Archive for Thursday, September 14, 2000

Wood: County has Oz’ attention

September 14, 2000

Johnson County Commissioner Doug Wood said he thinks the county now has the attention of Oz Entertainment Co.

Monday, Wood backed away somewhat from his suggestion that the county should purchase the Sunflower Army Ammunition Plant, clean it up and sell off land it doesn't retain for parks.

Oz hopes to build a $861 million Wonderful World of Oz Theme Park at Sunflower. Oz has negotiated draft agreements with state and federal agencies that would transfer Sunflower the company for its commitment to cleanup an estimated $45 million worth of contamination.

Before the transfer can occur, the Johnson County Commission and the Kansas Development Finance Authority must approve Oz's redevelopment agreement for the plant.

"There are consequences if we don't follow through with the Oz proposal," Wood said.

He received many calls in support of his suggestion, Wood said, and one expressing another point of view.

"(Oz CEO) Robert Kory called and asked that I give him another chance," Wood said.

Wood said he was willing to do so, but he said it was time Oz got down to business. He said he thinks Oz has received that message.

Commissioner George Gross said he has sent the same message to the company, especially in light of the company's performance at an Aug. 31 work session on Oz's redevelopment agreement.

"I was extremely disappointed in the performance of the Oz team," he said. "My expectation of the (Aug.) 31st was this was going to be a business meeting rather than a sales meeting.

"They should have came in expecting tough questions. Eight to 10 times they said they couldn't answer or would have to get back to us. They gave us no reason to approve what they are asking for."

The company is asking the county for a property tax break in the form of $39 million in tax increment financing. Oz also wants the county to build a $6 million to $13.2 million access road from Kansas Highway 10 to the theme park.

The commission has decided it will make a decision on the Oz plan while Commissioner Johnna Lingle is in office. Lingle lost to Susan Wolf in the August GOP primary and will leave office after Jan. 4, 2001.

Commissioners said they want Lingle to take part in the decision because of her expertise on Oz and Sunflower. It is not fair to ask an inexperienced commissioner to participate in the decision, Commission Chair Annabeth Surbaugh said.

Wolf could legitimately abstain from the decision because she didn't participate in the public hearings on the Oz proposal, Surbaugh said. With Commissioner Gary Anderson abstaining from the Oz decisions because his law firm serves as bond counsel to the Kansas Development Finance Authority, that would leave the decision to three of the five commissioners.

"That's unacceptable," Surbaugh said.

The future of Oz's proposal may turn on the company's planned use of sales taxes collected at the theme park. Should the county and the KDFA approve a redevelopment district at Sunflower, it would allow the developer, in this case Oz, to apply 7.9 percent sales tax collected there to paying off $189 million in Sales Tax Revenue Bonds issued by the KDFA. Oz would have to pay the county's bi-state cultural, jail and storm-water dedicated sales taxes.

Oz financial adviser Ken Becker of Salomon Smith Barney told commissioners at the Aug. 31 meeting that a "critical aspect" of Oz's proposal would allow the use of annual sales taxes collected above that required to meet STAR bond obligations to retiring Oz's privately placed construction debt.

County legal counsel Don Jarrett said state statute allows sales taxes to be used for approved costs during the 30-year life of the redevelopment district. But, he added, those costs are to be identified in the redevelopment agreement.

The county commission can limit the definition of legitimate costs through that agreement, Jarrett said.

For his part, Wood said the use of sales taxes to pay off infrastructure improvements within Sunflower was legitimate. But the commissioner said he could not approve the use of sales taxes to pay off Oz's privately placed theme park construction debt.

"I'm not going to agree to that," Wood said. "That's just unacceptable. If that's a deal breaker, so be it. After all, we are talking about tax revenue."

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