The Sedgwick County Commission infused $2 million from the county general fund into operating costs for INTRUST Bank Arena in August.
According to the Wichita Eagle, the sales tax money set aside nearly 20 years ago to pay for upkeep has run dry, and the county’s profit-sharing and naming-rights agreements with private companies haven’t generated enough money to keep things up to snuff.
According to the Eagle, this is far from the first time the county has “backfilled” Intrust Bank Arena maintenance shortfalls, transferring nearly $1.2 million from the general fund since 2021.
“The money transferred from the general fund to backfill the arena maintenance fund is part of a change to the county’s management agreement with SMG — now operating as Legends Global — that the commission approved in 2019,” the Eagle reported. “Under those terms, SMG added a $1.50 facility fee to every ticket sold at the arena, and the county agreed to a dollar-for-dollar match from the general fund.
“In other words, every ticket sold at INTRUST Bank Arena costs Sedgwick County taxpayers $1.50. The combined $3 a ticket goes into the arena fund.”
According to the Eagle, the county owns INTRUST Bank Arena and is “responsible for all capital improvements and emergency repairs, including to the equipment that the private operator needs to make money.”
That private operator is Legends Global — formerly SMG — and the operator receives the first $400,000 of profit made by the arena each year and then splits everything over that 50-50 with the county. The county’s portion goes into the arena maintenance fund. The Eagle reports that since 2010, when the arena opened, the county has received less than $4.8 million in profits from the arrangement and made zero profit in four years—2011, 2014, 2020, and 2021.
“During that same time, the county spent $10.8 million on items labeled in the county budget as ‘SMG asset replacements,’ the Eagle reported. “Such as scoreboards and ribbon boards that wrap around the interior of the arena. The county spent another $14 million on other capital projects at the arena. Another $2.5 million went to emergency repairs.”
The county has also been paid about $9.4 million for naming rights.
“The arena fund gets $350,000 a year from Intrust Bank for the building, $120,000 from Cessna for the outdoor plaza and $120,000 from Boeing for the concourse,” the Eagle reported. “The naming rights are set to expire in 2029, but the county’s contract grants an auto-renewal for another 5 years if they want to continue,” said Lindsay Poe Rousseau, chief financial officer for Sedgwick County, meaning those rates are likely locked in until 2034.
But those rights have their own expenses, according to the paper, including signs, access to suites, tickets and other perks for employees at the sponsoring companies, totaling approximately $5.3 million since 2010.
Commissioners are weighing using property taxes or sales taxes to cover the difference, or asking the City of Wichita to help make up the difference.
“The county essentially built the arena as a favor to Wichita, because they couldn’t get it done,” the Eagle reports Commissioner Jim Howell said. “And now we need a favor from them to make sure it is managed responsibly in perpetuity. We’re looking for a good-faith partnership.”
But, as The Sentinel previously reported, county surpluses can easily cover the maintenance fees without increasing taxes.
Based on its own budget projections, the county will have more than $120 million in General Fund surplus funds by 2030. Dave Trabert, CEO of Kansas Policy Institute — which owns The Sentinel — believes Sedgwick County does not need to raise taxes to fund maintenance at Intrust Arena.
“Sedgwick County had a $100 million surplus in 2023,” Trabert said. “Their projection that the surplus will exceed $120 million by 2030 means the County will have taken in at least $20 million more than it plans to spend. In other words, county commissioners are already over-taxing citizens.
“The black dots on each bar of the graph reflect what the County believes should be the minimum fund balance, so by their own admission, they already have sufficient excess surplus funds that could cover all the maintenance.
“Sedgwick County calling for another unnecessary property tax increase is further evidence that the State Legislature must impose assessment and levy limits to protect taxpayers from being taxed out of their homes by local officials’ spending decisions.”