State officials in Kansas moved this month to choke off public money flowing to Derby Shores, a stalled $160 million lagoon resort that has yet to put a single building above ground.
The Kansas Department of Commerce filed a petition in Sedgwick County District Court demanding an immediate halt to all bond disbursements for the project. State attorneys also asked the court to force an accounting of the $35,285,000 in public bonds already sold. The four-year delay crossed the line for state regulators. Announced opening dates collapsed one after another, leaving taxpayers on the hook for millions in debt issued against empty land.
More than four years after the project was approved and bonds were sold, it has not been built. Announced opening dates have come and gone.
Kansas Department of Commerce Petition
The lawsuit names Derby Destination Development—a private partnership comprising Dave Murfin, Rick Worner, and Genesis Health Clubs founder Rodney Steven II. It also names bond trustee Security Bank of Kansas City and the municipal government of Derby.
Derby City Manager Kiel Mangus confirmed local administrators are reviewing the state's filing while pressing the private developers to act. "It is going to take action by the developer to move things forward," Mangus stated. "We haven’t fully been able to evaluate all the things in the suit, so that’s what we’re going through right now. We’re hopeful that we can find a resolution and move forward in an acceptable manner to all parties."
Neither the developers, Commerce Department spokespersons, nor agency counsel from Morris Laing responded to requests for comment.
| Project Parameter | Official Detail |
|---|---|
| Project Name | Derby Shores Resort |
| Current Estimated Cost | $160,000,000 (initially $130,000,000) |
| STAR Bonds Issued | $35,285,000.00 |
| Core Water Feature | 4.5-acre lagoon (expanded from 2 acres) |
| Total Footprint | Approximately 40 acres |
| Named Defendants | Derby Destination Development, Security Bank of KC, City of Derby |
Promoters initially pitched Derby Shores as an unmatched regional draw across 40 acres. The centerpiece called for a 4.5-acre artificial lagoon surrounded by sandy waterfront restaurants, a tiki bar, a hotel, multi-family apartments, and senior housing complexes. Recreational blueprints added a climbing wall, a zipline canopy, an aerial ropes course, a BMX track, camp grounds, and an outdoor amphitheater.
Costs swelled rapidly. The original budget stood at $130 million before Murfin and Worner enlisted Steven, whose health club network spans nearly 90 locations nationwide, to build and run the water complex. Steven, who also operates the Genesis Sports Complex and Blast Off Bay water park in Goddard, expanded the water footprint from an initial two acres. He defended the expansion, stating that a smaller footprint lacked commercial gravity and that he refused to build something undersized.
The development anchors a broader $100 million sales tax and revenue (STAR) bond district established by Derby in 2018. The city first set up the special taxing zone to finance Worner’s Field Station: Dinosaurs attraction. While that prehistoric theme park cleared its original bond debt, it currently faces potential closure following sustained pandemic-era operational losses.
Kansas STAR bonds allow cities to borrow capital for commercial developments by pledging future sales tax collections inside the designated district to repay bondholders. That money bypasses the State General Fund entirely. To guard against speculative real estate plays, the Kansas Legislature enacted strict statutory tripwires.
By law, construction must commence within two years of plan approval. If work fails to start within that window, public financing ceases permanently. Court filings reveal Derby approved the Derby Shores development plan on May 10, 2022, before issuing $35,285,000 in bonds two months later in July 2022.
Attorneys for the developers insist construction began on schedule in January 2023, pointing to the bulldozing of an old barn and farmhouse on the acreage. State officials flatly rejected that argument in court filings, noting that Derby's own 2026 municipal reporting acknowledged construction did not begin until 2026.
Mangus noted that horizontal infrastructure—including stormwater culverts, grading, access roads, and sewer ties—is nearly complete. Yet the physical reality above ground triggered the state's intervention. State inspectors documented that zero vertical structures exist on the property, and cleared dirt has surrendered back to weed patches.
The Commerce Department made clear it does not seek to dissolve the wider Derby STAR Bond District, terminate city agreements, or prohibit the developer group from financing construction out of private capital reserves. Instead, the petition seeks an injunction blocking further public disbursements, securing an audit of past bond proceeds, and holding the developer syndicate accountable to statutory deadlines before the district court issues its next order.
| Governing Court |
| Sedgwick County District Court |