Archive for Thursday, August 17, 2000

County listens to Oz opinions

August 17, 2000

After two work sessions consuming eight hours, Johnson County Commissioners have listened to a wide range of opinions on Oz Entertainment Co.'s proposed redevelopment plan for the Sunflower Army Ammunition Plant.

The four commissioners who must decide if the county will approve Oz's redevelopment plan for Sunflower have heard the proposed transfer praised as a landmark public-private effort that puts blighted land back in production and dismissed as corporate welfare that will bring glitzy California-type development to Johnson County.

The latest marathon work session was Tuesday, when spokesmen for more than 20 groups gave their views on the transfer and Oz's redevelopment plan for its proposed $861 million Wonderful World of Oz Theme Park and Resort.

The county commission began its approval process on the Oz redevelopment plan with a work session six days earlier.

During that earlier meeting, Oz representatives and officials with state and federal agencies who negotiated the Sunflower transfer and cleanup agreements told commissioners Annabeth Surbaugh, Johnna Lingle, Doug Wood and George Gross that the agreements were the first of their kind and will serve as a model for the transfer of other Defense Department properties to private hands and productive uses.

Commissioner Gary Anderson did not attend the meetings and will not vote on the issue because his law firm represents the Kansas Development Finance Authority, which would issue the tax-exempt bonds for the theme park's development.

Blaine Hastings, realty officer for the U.S. General Services Administration, told the commission the draft agreement accomplishes the federal government's goals of cleaning up Sunflower as soon as possible and doing the job at the least amount of expense to taxpayers. Hastings and Oz's chief financial officer Francoise Mattice said the $300 million in environmental insurance and a $45 million performance bonds Oz will be required to purchase guarantee the cleanup of Sunflower's 9,065 acres at the time the plant is transferred.

In addition to the Oz cleanup, the Army will spend $29 million to burn down buildings that could be contaiminated with explosives, Army attorney Robert Lingo said.

Kansas Department of Health and Environment Secretary Clyde Graeber said the consent agreement his department negotiated with Oz will assure Sunflower is cleaned up to uses compatible with the land-use plan the county developed for Sunflower.

While the KDHE will monitor the cleanup, the work must conform to all federal regulations, Graeber said.

The Sunflower cleanup will be a big job, put his company has been involved in larger environmental remediation efforts, said Martin Ballistoni, a vice president with IT Corp., the company Oz selected as its environmental contractor.

Remediation estimates developed by Oz, the different contractors who bid on the clean up and AIG all came within 10 percent of each other, Ballistoni said. He suggested one reason the estimates came in so much lower than the KDHEs worst-case $120 million estimate was the large scope of the cleanup.

For example, IT Corp. can cleanup areas with similar contamination at the same time. This and other economies of scale will allow the company to clean up Sunflower more efficiently than smaller projects.

Ballistoni was equally sure the cleanup could be finished in 12-year schedule established in the consent degree.

The plant can be cleaned up while the theme park is operating at no risk to employees or visitiors, Ballistoni said. His company often safely performs cleans up polluted property in residential neighborhoods, he said.

That will be good news to the 2.8 million people Oz "conservatively" believes will come to the theme park annually. That exceeds the 2.4 million annual visitors the theme park will have to attract to pay off the tax-exempt bonds issued, said Oz President Robert Kory. He added that the 2.8 million attendance figure can be reached without attracting new visitors to the metro area.

Commissioner Wood expressed a "healthy skepticism" over Kory's assertion. At Tuesday's meeting, Oz foes went further.

Greg Wilson of the citizen's group Taxpayer Opposed to Oz Inc. said the feasibility study Oz provided with its redevelopment plan show the company capturing a greater share of the tourist market than parks operated by Disney and other established companies in the industry.

By applying the average market capture rate of the theme park industry, Wilson said he estimated the Wonderful World of Oz's attendance would be 1.8 million, well short of the attendance needed to retire the tax exempt bonds.

The feasibility study also indicates Ozs management team will operate its theme park more efficiently than Disney, Wilson said. The feasibility study suggests the company can deliver 65 cents of product for every $1 of revenue it receives, while it costs Disney 77 cents to deliver $1 of product, Wilson maintained.

When Wilson compared the latest feasibilty plan to one released in August 1999, he found it was estimated Oz would operate more efficiently. The reason for the increased efficiency projections, Wilson suggested, was to show more available revenue to retire an increased amount of debt financing.

Because of Oz's request for a state-funded $29 million Kansas Highway 10 interchange and a county-funded $6 million to $12 million road to the theme park, Countryside Mayor Ken Davis, TOTO President Bill Sheldon and others questioned Hastings assertion that the transfer represented a good deal to taxpayers.

Should the county fund the road, it would have to forego needed projects elsewhere in the county, Davis said. Not all those speaking at Tuesday work session opposed Oz. DeSoto Economic Development Committee Chairman Dave Anderson expressed that group's endorsement of the Sunflower transfer (see related story). DeSoto Chamber of Commerce President Pat Atchison cited a recent poll that found 77 percent of the chamber's 121 members support the Oz proposal.

Atchison told the commissioners she supported Sunflowers transfer to Oz because that provides for the plants cleanup. That, in turn, means a broader tax base for the fast-growing DeSoto School District, she said.

Based on the 7 million visit Branson, Mo., and the 2.1 million who visit Silver Dollar City each year, Atchison said she was confident Oz would attract more than enough visitors to be successful.

While not lobbying for the Oz redevelopment plan, DeSoto School Superintendent Marilyn Layman explained the "impacts" of the theme park on the school district.

A theme park appraised at $500 milllion would lower the mill levy burden on district home and business owners, Layman said. If an additional $500 million in appraised valuation was available this year, the district's property tax levy would shrink from 71.9 mills to 51.129 mills, she said.

The "futuristic" theme park and the associated digital technology center would offer the districts students learning and career opportunities, while also opening up teacher development possibilities, the superintendent said.

Finally, in the transfer agreement, Oz has agreed to make 500 acres available to the district for three future high schools, an equal number of grade schools and a full compliment of elementary schools, Layman said.

Members of the public will have the opportunity to express their opinions of the Oz redevelopment plan at 7 p.m., Monday, Aug. 21, when the commission has a public hearing on the proposal at DeSoto High.

Commenting has been disabled for this item.