The Kansas Department of Commerce has sued the developers behind Derby Shores, the long-promised lagoon and entertainment complex south of Wichita, saying the project still has not been built more than four years after it was approved and financed with public bonds. The lawsuit names Derby Destination Development, Security Bank of Kansas City and the city of Derby itself, escalating a dispute over whether the STAR bond-funded project has met the state's construction deadlines.
According to a report on the lawsuit, the suit targets Derby Destination Development, described as a team consisting of Dave Murfin, Rick Worner and Rodney Steven II, along with Security Bank of Kansas City as trustee on the project and the city of Derby. Derby adopted the Derby Shores project plan on May 10, 2022, and $35,285,000 in bonds were sold in July 2022 to finance it. The state's core argument, per the lawsuit, is blunt: more than four years after approval and the bond sale, the project has not been built.
Exactly when construction began is murky, and the two accounts in the lawsuit conflict. Lawyers for the Derby Shores developers reportedly said work started in January 2023 with the demolition of a barn and farmhouse on the property, while a 2026 report from the city of Derby to the state reportedly said construction began in 2026. Derby City Manager Kiel Mangus has said infrastructure work, including roads, drainage, grading and sewers, is nearly complete — but the lawsuit says there is no vertical construction at the site, and that ground cleared in the past has gone back to weeds.
What the State Is Demanding
The Commerce Department is seeking a temporary, and possibly permanent, injunction against further payments to the developers, according to the same report. The agency is also demanding an accounting of the money spent on the project so far. Notably, the lawsuit reportedly does not seek to end the Derby STAR bond district, cancel Derby's agreements, block privately funded construction, or claw back bond proceeds that were legitimately spent on eligible project expenses — nor does it seek to stop the developer from asking the secretary to approve the project again. It asks only that public bond proceeds not be spent until the Act's requirements are met, and that any unexpended proceeds be applied toward retiring the bonds if those requirements aren't satisfied.
Kansas law requires construction to begin within two years after a STAR bond project plan is adopted, or the project loses its funding, the lawsuit account notes. STAR bonds themselves are repaid through new sales tax revenue generated by a development, with Kansas cities making annual payments to the state to retire that debt. The dispute has already produced dueling requests: Derby has asked the state to rescind its directive to stop approving draws, while the developers have asked the city to resume them, per the lawsuit.
Mangus said the city is still analyzing what's in the lawsuit. He added that action by the developer is needed to move the project forward, and said the city hopes to find a resolution acceptable to all parties.
A Project That Has Grown — and Grown Again
Derby Shores has been pitched as a roughly 40-acre lagoon and hotel development anchored by a crystal-blue lagoon with water features and activities, plus plans for apartments, senior housing, waterfront restaurants, a tiki bar, a climbing wall, zipline, aerial park, BMX course, picnic lawn, camping park and event esplanade. The project was initially estimated to cost $130 million; coverage has since described it as a $160 million development, though cost figures have varied across reports over time. The lagoon itself was expanded from an originally planned two acres to four and a half acres, a change Rodney Steven II said in 2024 he wanted so the attraction would be large enough to draw visitors. Steven, who founded Genesis Health Clubs — now with almost 90 clubs nationally — is responsible for building and operating the Derby Shores lagoon.
Developers held a groundbreaking for Derby Shores on May 26, 2026, according to the Derby Informer, with developers at the time aiming to open first-phase amenities within 12 to 18 months. By August 2026, developers had pulled a permit to begin construction on the first phase of luxury apartments — 108 units across three buildings — with units expected to be ready in spring 2028, according to the Wichita Eagle's business columns.
The Derby STAR bond district itself wasn't created for Derby Shores originally. It was first established for Rick Worner's Field Station: Dinosaurs park, which opened in 2018 within a $100 million STAR bond district created by Derby. Field Station: Dinosaurs has since repaid its bond debt, though the park is now at risk of closing because of financial struggles dating back to the pandemic.
Derby Shores Isn't the Only Stalled Kansas Megaproject
Derby isn't the only Kansas city watching a big-ticket development sit without vertical construction. In Overland Park, the nearly $2 billion Meridian development has similarly shown no vertical construction on its site, according to KSHB. That city amended its development agreement, pushing the first construction milestone from July 2026 to July 2027. The Meridian developer has said construction on the first building, a planned 317-unit mixed-use structure, was expected to begin in November and would take 27 months to complete, with the project's last milestone not scheduled until 2038.
For now, Derby's answer to the state's lawsuit remains a work in progress. Mangus said the city is still reviewing the filing, even as both sides trade requests over whether money should keep flowing to a project that, by the state's own account, has yet to put a single building up out of the ground.
