Commerce Finds Resolution for Cerner Payroll Tax Obligations
Published on October 27, 2023
TOPEKA – Governor Laura Kelly today lauded the commitment made by OnGoal LLC, the parent company of Sporting Kansas City, to contribute $7 million to various economic development and community projects primarily in eastern Wyandotte County. The contributions are the result of a Kansas Department of Commerce-negotiated settlement of a years-long dispute regarding payroll tax obligations resulting from a development agreement between Cerner Corp. and the Unified Government of Wyandotte County in 2010.
Cerner received $48 million in state incentives at the time in exchange for creating up to 4,500 jobs and sufficient withholding taxes to satisfy the award. That agreement, as well as another developer agreement with OnGoal that had led to the creation of the soccer complex in western Wyandotte County, were modified prior to the Kelly Administration taking office to remove the job metric.
As part of the developer agreement, failure to reach the withholding metric would result in the state clawing back up to $3.04 million of incentives each year. The metric was not met in 2021, and the Unified Government made formal demand in July 2022 for the first $3.04 million payment. Kansas Department of Commerce, the Unified Government, and Cerner have been negotiating a compromise solution since that time.
“Since Day One of my administration, I have directed the Department of Commerce to pursue business deals in a way that benefits our communities,” Governor 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. I’m so glad this agreement will uplift the entire region by supporting worthy projects like the Quindaro Ruins and the upcoming World Cup.”
Projects identified in the settlement include:
- Willa Gill Services Center $2,000,000
- 2026 FIFA World Cup $2,000,000
- Quindaro Ruins $1,000,000
- Community projects east of I-635 $1,000,000
- Soldiers and Sailors Memorial Hall $500,000
- Wyandotte County Historical Museum $250,000
- Agricultural Center and Hall of Fame $250,000
“The Commerce Department places claw-back provisions into all incentive agreements so Kansas taxpayers benefit from the projects and any other programs we offer,” said Lieutenant Governor and Secretary of Commerce David Toland. “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.”
Contributions will begin as early as November 1 in the case of the Quindaro and Memorial Hall projects. All expenditures will be made by the end of 2025 at the latest.
“OnGoal appreciates the partnership with the State of Kansas and the Unified Government of Wyandotte County,” Polsinelli shareholder Korb Maxwell said. “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.”
“The Unified Government has worked with the State of Kansas to ensure the economic benefits of development in Wyandotte County can be realized by our community,” Unified Government County Administrator David Johnston said. “This agreement will position us for the future by providing our community with $4M in directed grants to catalyze and support economic activity at the Quindaro Townsite, WyCo Historical Museum, Kansas Agricultural Center and Hall of Fame, and Memorial Hall. Additional funds will support ongoing efforts to provide supportive services for the unhoused – all important initiatives to our economic future – and we are grateful for the willingness of the State and developer to work with us to make this a reality.”
About the Kansas Department of Commerce:
As the state’s lead economic development agency, the Kansas Department of Commerce strives to empower individuals, businesses and communities to achieve prosperity in Kansas. Commerce accomplishes its mission by developing relationships with corporations, site location consultants and stakeholders in Kansas, the nation and world. Our strong partnerships allow us to help create an environment for existing Kansas businesses to grow and foster an innovative, competitive landscape for new businesses. Through Commerce’s project successes, Kansas was awarded Area Development Magazine’s prestigious Gold Shovel award in 2021, 2022 and 2023, and was awarded the 2021 and 2022 Governor’s Cup by Site Selection Magazine.