The Prairiefire development has defaulted on close to $65 million in outstanding bond debt, further substantiating concerns among Kansas lawmakers that the Overland Park project hasn’t generated enough sales to make payments in a timely manner. Bondholders recently were notified that Prairiefire missed the Dec. 15 maturity date for $14.9 million in sales tax revenue (STAR) bonds, the balance of a $15 million tranche. That tranche was the first of three Overland Park issued in 2012, totaling $65 million, to build the 56-acre retail and entertainment complex south of 135th Street, between Lamar and Nall avenues. STAR bonds are a state program designed to attract more tourism and revenue to Kansas by helping municipalities finance commercial, entertainment and tourism projects. Trustee UMB Bank had not received sufficient funds to make $14.9 million in principal and $1.75 million in interest payments due for Prairiefire’s STAR bonds as of a Dec. 18 event notice. The bank said it had transferred the $3.8 million balance of the bonds’ reserve fund to help cover debt service. “The Trustee is currently evaluating certain provisions of the Indenture which provide conflicting guidance on how to apply funds in this scenario,” UMB Bank wrote in the notice. “The Trustee will provide additional updates to Bondowners as they become available.”
Source: Kansas City Business Journal
