Project: I-70 and 110th Street Interchange

1.0 Synopsis

Between 1995 and 2001, the Kansas Department of Transportation undertook a project to improve the I-70 and 110th Street interchange and surrounding road network in Wyandotte County, KS. The project was part of a state and local effort to attract a NASCAR speedway to the region. The transportation improvements, combined with state and local tax incentives, considerable land planning, and the unification of the Kansas City, KS and the Wyandotte County, KS governments, have resulted in over 2 million square feet of new development in a 1,600-acre area. Total investment to date has topped $900 million, with over $1.4 billion in additional development projects underway. The development has created 5,900 jobs to date, with an annual payroll exceeding $52 million.

2.0 Background

2.1 Location & Transportation Connections

The transportation improvement project included a new four-way diamond interchange at 110th Street (replacing an inferior interchange), widening of I-70 between Interstate 435 to the east and ? mile west of the 110th Street interchange to the west, and realignment of US 24 (State Street). The interchange is 12 miles west of downtown Kansas City, Kansas. The Kansas City International Airport in Kansas City, Missouri is 22 miles east of the interchange. Rail service is available in all directions from the nation's second largest rail hub in Kansas City, Missouri.

2.2 Community Character & Project Context

For many decades, Wyandotte County lagged other counties in Kansas in terms of economic growth and prosperity. For example, between 1980 and 1995, employment in the state grew by 23%, Shawnee County (home of Topeka) by 22% and Sedgwick County by 19%, while Wyandotte County suffered employment loss of 0.4%. In the 1990's, Wyandotte County's per capita income was lower than that of the Kansas City metropolitan area and the county was losing population. The county had the highest tax rate in the state of Kansas. There were few retail and dining opportunities, resulting in an estimated leakage of more than 70% of the area's disposable income to other communities. Downtown Kansas City, KS, in competition with both the larger Kansas City, MO and suburban malls, also suffered from job loss and high commercial vacancy rates.

3.0 Project Description & Motives

In the 1990's, the State of Kansas, Wyandotte County, and Kansas City were all seeking opportunities to create economic growth in the Kansas City area. They learned that the Kansas International Speedway Corporation (KISC) was looking for a site to build a NASCAR quality speedway in the mid-west. The state and county decided to pursue the speedway in an effort to attract new development to the county to diversify the economy. The transportation improvements described above were part of the package put together to attract the speedway to the region. KISC looked at sites in Kansas City, MO, Oklahoma City, and Omaha, but settled on the Wyandotte County site in part because they liked the access provided by Interstates I-70 (east-west) and I-435 (north-south). The I-70 interchange improvements were particularly important to the speedway developer because they would allow 60,000 people to vacate the speedway within two hours on big race days. They had experience at other speedways throughout the country where egress from the speedways was congested and could take hours. The speedway organization prides itself on the total experience it provides to its customers, and wanted to improve the final impression race day visitors had of its venue by improving the exit process.

The total project cost was $57.76 million (2001$). Funding sources for the transportation improvements included Kansas Department of Transportation, the Kansas Turnpike Authority, state economic development funds, and $7.5 million from the Unified Government of Wyandotte County-Kansas City, Kansas.

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

When the Speedway and Village West developments were first proposed, there was considerable public concern that tax dollars were being used to help these developments with no guarantee that the community would receive any benefit. Despite this concern, the public did vote to support the development project with public funding. Today, the public hails the project as the best thing that has happened to the region in decades.

In the county, new residential development increased from 100 units per year before the Speedway, to 500 per year in 2007. Between 2003 and 2005, the county saw $200 million invested in new residences. In 1997 when the Speedway project first came about, homes sold for a maximum of $150,000. Now speculative homes valued at over $500,000 are being built. Spokespersons for the Unified Government credit the Speedway and adjacent Village West mixed-use development with spurring this additional development throughout the county.

The Kansas Speedway proved to be a powerful anchor for the area. The Speedway hosts five major events and 200 smaller events (such as driving clinics) per year, attracting 650,000 visitors annually. Prior to the Speedway, the site generated only $15,000 annually in property taxes, and is now expected to generate over $5 million annually. For the first 30 years after the project development, the Speedway is paying a $5.3 million annual PILOT to the Unified Government to pay off a $70 million bond floated to pay for some of the infrastructure supporting the speedway. The STAR bonds sold to fund the Speedway totaled $23 million, which require an annual payment of just under $2 million. However, the property is generating over $3 million in sales tax annually. Approximately 70% of visitors to the Speedway come from outside the Kansas City region, accessing the site via I-70 and I-435. The Speedway employs 60 full-time employees year-round, with this number swelling to over 1,000 additional part time employees on the five big race weekends.

Development attractions include Cabela's (with more than 2 million visitors in the first five months it was open), the Nebraska Furniture Mart, and the Legends (several restaurants, a 14-screen cinema, six hotels, a mule deer museum, and an indoor water park). The impacts of the investment in the I-70 interchange and the surrounding 1,600 acres are still being realized. Expected future developments include the $370 million Schlitterbahn Aquatic Park on 370 acres, a $705.6 million state-owned, but privately managed casino (recently placed on hold due to the national economic downturn), and new residential development which has increased from 100 units per year before the Speedway, to 500 per year in 2007. Notably, Wyandotte County has reversed its previous employment losses, with employment in the county increasing by 5% between 1995 and 2006. In the 66111 zip code, where the interchange, speedway and new retail development is located, employment increased from 2, 745 to 9630 (251%) between 1994 and 2006. The package of incentives in the Tourist District, including the highway interchange and roadway improvements, has resulted in economic impacts beyond anything that was predicted. The 1,200 acre speedway and adjacent 400-acre development parcel (site of the Village West project) have attracted development that has created approximately 5,900 jobs. This has resulted in sales tax revenues approaching $50 million per year, new property taxes of $13 million annually, $5.3 million in PILOT payments, $900 million in direct construction investment, and over 2 million square feet of development. This does not include the Schlitterbaun and casino projects that are under construction and planned. Approximately 30% of these impacts can be attributed to the roadway infrastructure improvements.

5.0 Non-Transportation Factors

The transportation investment made at the I-70 ? 110th Street Interchange was only one component of a package of incentives used to attract development to western Wyandotte County. While local officials recognize that the development would not have occurred without the interchange and state highway improvements, they also note that the highway improvements alone could not have attracted this development. The STAR bonds played a critical role in attracting the Speedway and the Legends. Without the STAR bonds, the county would not have been able to provide the infrastructure investments needed at both sites, nor buy the 400 acres of land on which the Legends now sits. Both KISC and RED Development needed the investments paid for by the bonds to make their projects feasible.

In addition, the negotiation of a PILOT payment for the Speedway was necessary to make that project feasible. Re-zoning of the full 1,600 acres to allow mixed-use development provided the necessary regulatory environment and the master plan produced for the 400-acre Legends site provided developers with a very clear understanding of what any development for the site should look like. Finally, the Speedway developers have cited the unification of the county and city governments as a key consideration in their location decision, as it limited the number of government approvals they would need for the project.

6.0 Resources

6.1 Citations

Coopers & Lybrand L.L.P., Kansas International Speedway: Preliminary Economic and Fiscal Impact Assessment, prepared for Unified Government of Wyandotte County Kansas City, Kansas, January 13, 1998

Hayes, Denise, Kansas City, Kansas Tourism District ? Kansas Speedway/Village West, July 2006.

High Street Consulting Group, Transportation Infrastructure Investments and Economic Growth: Five Kansas Case Studies, draft report, October 6, 2008.

Village West and Kansas Speedway Area Economic Review, 2007-2008, prepared by the Unified Government of Wyandotte County, Kansas City, Kansas

Village West and The Legends Survey Summary, October 2007, prepared by the Unified Government of Wyandotte County, Kansas City, Kansas

6.2 Interviews

Footnotes