Colby council advances five requests tied to proposed equestrian arena

The Colby City Council unanimously agreed Oct. 6 to advance five of eight requests intended to help progress a proposed multipurpose equestrian arena south of Interstate 70’s Exit 53, while leaving several potentially costly utility and tourism-funding commitments unresolved.

The requests would be incorporated into a proposed amendment to the city’s development agreement with Colby Investment Group. City officials said the amendment and its detailed conditions will return to the council for further consideration.

Colby Investment Group, led by local businessman Mike Woofter, is pursuing an approximately $60 million arena designed to make Colby a regional destination for equestrian events. The planned complex would include two indoor arenas with seating for more than 3,500 people, 520 indoor stalls, warmup and outdoor arenas, 160 recreational-vehicle hookups and parking for hundreds of vehicles and trailers.

Project representatives said the state has authorized as much as $40.9 million in Sales Tax and Revenue, or STAR, bonds for the development. Those bonds would be repaid with increases in state and local sales taxes and transient guest taxes generated within the project district, rather than with a general-obligation pledge backed by property taxes.

The group is exploring a private placement of the bonds with banks and other investors. Representatives said conventional bond-market estimates had indicated the existing revenue streams might support about $33 million in proceeds, leaving a gap between that amount and the state’s authorization.

Approval of all eight requests could increase estimated proceeds to approximately $38 million or $39 million, representatives said. The amount available will not be known until the bonds are sold.

The first request allows revenue from a 2% Community Improvement District sales tax on Woofter’s properties to be pledged toward bond payments. The district is currently generating approximately $35,000 to $40,000 per month, according to information presented to the council. Representatives estimated that revenue could total about $17.7 million over the life of the district.

The four other requests advanced by the council would:

The Thomas County Economic Development Alliance previously recommended the $500,000 expenditure. The recommendation limits the money to infrastructure such as electrical equipment, water and sewer connections and lift-station improvements rather than a direct payment to the developer.

Woofter, the Alliance’s vice chairman, left its Sept. 16 meeting before the matter was discussed and did not vote on the recommendation.

That recusal became a point of discussion after resident Brian Luedke questioned Woofter’s position on the board and cautioned that the project’s visitor and revenue figures remain projections rather than guarantees. Group representatives responded that Woofter had not participated in the Alliance’s discussion or vote.

The development group cited a study projecting $111.6 million in pledged tax revenue during the bonds’ 20-year term. Representatives also pointed to an earlier feasibility analysis estimating that the completed development could attract approximately 150,000 additional visitors to Colby annually, with an average stay of more than three days.

Woofter told the council the project could generate retail activity, jobs and additional sales-tax revenue while creating opportunities for hotels, restaurants and businesses serving equestrian visitors. He said the developers have invested years of work and private money in the proposal and are offering the Community Improvement District revenue even though it could otherwise remain available to his businesses.

He characterized population and commercial growth as necessary if Colby wants to finance future community needs without placing additional pressure on property taxes.

Council members and city officials generally agreed that the proposal could have a major economic impact and vocalized their support for the project. Their reservations centered on approving open-ended commitments before final construction plans, utility requirements and dependable revenue figures are available.

The three requests not advanced would have had the city cover water and wastewater connections and related lift-station improvements; provide electrical infrastructure that could include approximately $450,000 to $500,000 in transformers and wire; and pledge as much as $150,000 annually from convention and visitors funding toward bond payments.

City Manager Ron Alexander said the city does not yet have final architectural and engineering plans showing the project’s water, sewer and electrical demands. Committing utility money without those figures could reduce city fund balances and eventually require increases in water or electric rates, he said.

Several council members said they were comfortable with the first five requests but wanted firm estimates and clearer limits before considering the utility commitments.

The proposed visitors-fund pledge also generated concern. Developers said placing that money last in the bond-payment structure could make it especially valuable to investors and potentially add more than $3 million to available bond proceeds. They expect the money would be needed only during the first three or four years, before arena-related revenues have fully developed.

City officials cautioned, however, that investors might require the revenue to be formally pledged for the life of the bonds. If project revenues fell short of projections, the commitment could last longer than anticipated.

The city currently uses transient guest-tax revenue to help support the Colby Event Center. The Convention and Visitors Bureau also uses those funds for tourism promotion. Officials said redirecting $150,000 annually could require substantial changes to those operations.

There were additional legal questions because Kansas law generally directs transient guest-tax money toward tourism promotion. The city may need to adopt a charter ordinance before using those funds for bond payments, and the Legislature could change the rules governing such local ordinances in the future.

Council members discussed a possible compromise under which $100,000 could come from a city project fund and $50,000 from convention and visitors funding. No final commitment was made. The council indicated the proposal could return after the city and developers produce additional figures and appropriate safeguards.

Representatives of Colby Investment Group said the city’s support for the first five requests gives them enough direction to continue negotiations with potential bond purchasers. They acknowledged that significant work remains and said the project would be difficult to complete without additional support.

In other business, the council approved a Build Kansas grant for the city-owned airport hangar, revised the city’s hiring incentive policy, approved an $2 increase in solid-waste collection rates beginning Jan. 1, 2027, accepted a fire-department equipment grant and approved a state-funded traffic-enforcement agreement.