Kansas economic incentives bind taxpayers, Cerner and Sporting KC
By TIM CARPENTER Kansas Reflector
TOPEKA — The state of Kansas reached a $7 million settlement with the parent company of Sporting Kansas City to resolve a dispute about repayment of taxpayer-funded economic development incentives relied upon to build Cerner Corp.’s office complex in Wyandotte County, officials said Friday.
OnGoal, the parent company of the professional soccer franchise, pledged to complete the settlement payments in 2025. Cerner’s exodus from Wyandotte County had left OnGoal responsible for the IT company’s economic development obligations.
Payments would be distributed this way: Willa Gill Services Center, $2 million; 2026 FIFA World Cup, $2 million; Quindaro Ruins, $1 million; community projects east of I-635, $1 million; Soldiers and Sailors Memorial Hall, $500,000; Wyandotte County Historical Museum, $250,000; and Agricultural Center and Hall of Fame, $250,000.
The administration of Gov. Sam Brownback provided Cerner with $48 million in incentives in 2010 to build an office complex in Wyandotte County in exchange for the company’s promise to shower 4,500 jobs on Kansas. In 2011, the job metric obligations linked to the government-backed incentives were dropped in concert with a deal with OnGoal that led to construction of the soccer stadium for Sporting Kansas City.
Overhaul of the original Brownback agreement with Cerner didn’t eliminate expectations the company would generate payroll tax collections sufficient to cover economic incentives provided by Kansas taxpayers for the office space opened in 2013.
In 2021, Cerner put the set of office towers in western Kansas City, Kansas, up for sale and relocated employees. Cerner was later bought by Oracle.
The Brownback-era arrangement involving Cerner and OnGoal permitted the state to invoke clawback mechanisms to recoup up to $3.04 million annually for five consecutive years if Cerner didn’t meet payroll requirements. For the year ending Dec. 31, 2021, payroll tax collections were insufficient and the Unified Government of Wyandotte County demanded in July 2022 the first $3.04 million payment from OnGoal. That prompted negotiations led by the Kansas Department of Commerce.
“Since day one of my administration, I have directed the Department of Commerce to pursue business deals in a way that benefits our communities,” Gov. Laura Kelly said. “Often that means creating jobs and bringing in investment, but — as this agreement shows — it also means holding businesses accountable and protecting taxpayer dollars.”
The Brownback-era arrangement spawning construction of the office complex and the soccer stadium intertwined Cerner, OnGoal, the Unified Government and the state of Kansas. A special entity, Kansas Unified Development LLC, had been launched to handle development of the stadium and Cerner’s offices. To protect taxpayers, OnGoal — the parent of Sporting Kansas City — agreed to be responsible for financial clawbacks if Cerner failed to meet economic development targets.
Once Cerner bolted from Wyandotte County, it left guarantor OnGoal with potential repayment obligations of $15 million.
Attorney Korb Maxwell, speaking on behalf of OnGoal, said the company appreciated its partnership with the state and county.
“For more than a decade, OnGoal has been committed and invested in the local community and looks forward to further enhancing Kansas City, Kansas, as a major destination,” Maxwell said.
Lt. Gov. David Toland, secretary of the Department of Commerce, said the agency shielded taxpayers by enforcing clawback provisions embedded in economic development incentive programs. OnGoal’s contributions could begin in November with regard to Quindaro and Memorial Hall. Other payments should be completed by the end of 2025.
“This agreement ensures sales tax dollars still are being utilized to further the state’s tourism goals and put money back into the community to have lasting impact,” Toland said.
David Johnson, administrator of the Unified Government, said the settlement provided grants to important projects, including an effort to better serve homeless people.
“Funds will support ongoing efforts to provide supportive services for the unhoused – all important initiatives to our economic future,” he said. “We are grateful for the willingness of the state and developer to work with us to make this a reality.”