Archive for Thursday, March 15, 2001

Commission fails to approve Oz project, plans feasibility study

March 15, 2001

A change on the Johnson County Commission failed to produce a decision on Oz Entertainment Co.'s redevelopment plan for the Sunflower Army Ammunition Plant.

As it did last November, the commission deadlocked 2-2 on Oz's $861 million proposal that would build the Wonderful World of Oz Theme Park and Resort at the closed plant. Commissioner Susie Wolf voted no, just as her predecessor Johnna Lingle did in November.

But, also like the earlier vote, the deadlock didn't resolve the issue. After the tie vote, the commission agreed to hire a consultant to perform a feasibility study on the financial information Oz included in its redevelopment proposal.

Commissioner Chairman Doug Wood said the study would take from six to eight months and cost from $80,000 to $100,000. The commission also agreed to ask the Kansas Legislature to extend the deadline on the Sunflower redevelopment enabling legislation for another year. The statute that allows the Kansas Development Finance Authority to issue sales tax revenue bonds and tax increment financing bonds for the plant's redevelopment expires July 1.

In announcing their opposition, Wolf and Commissioner Annabeth Surbaugh repeated their concern over the lack of independent verification of the Oz financial plan.

As the only commissioner not on record from last November, Wolf's vote was the most anticipated. When her turn came, Wolf voiced concern the Sunflower transfer agreement Oz negotiated with the Army and the U.S. General Services Administration was so complicated it invited endless lawsuits that would delay the plant's redevelopment.

After the meeting, Wolf said she didn't think a theme park was compatible with Johnson County or the high-tech development envisioned for the K-10 corridor.

With the Army scheduled to clean the plant in 12 years, Wolf said the county should consider other uses that would honor the men who fought and died in the conflicts the plant was built to arm.

"Let's return it to the public benefit for more than just a few," she said. "Why not consider returning it directly to the public."

Oz's failure to repay Wyandotte County money it owes from past attempts to develop the theme park was also a concern, Wolf said. But she added she did not question the character of Oz President Robert Kory or other company representatives.

Once the tie vote was recorded, Oz supporter Commissioner George Gross made a motion to ask the Legislature to extend the deadline on the enabling legislation so that the commission could have a consultant review Oz's financial plan.

Surbaugh said she would support the motion with two amendments. She asked Oz to make a commitment that any of its infrastructure needs would not divert revenue from projects elsewhere in the county.

Oz has already made that commitment, Surbaugh conceded, but she said she wanted that assurance in writing to allay fears that have been raised during public hearings on the Oz proposal.

Surbaugh further asked that Oz restrict the use of sales tax revenue collected in its Sunflower development not needed to retire sales tax revenue bonds. The "uncommitted revenue" should be used to pay for infrastructure cost, not to pay off investors or stockowners, she said.

"I want it to go for something I can walk on, not to some New York investor," she said. "The people living in the county are the ones taking the risk. We ought to benefit."

Gross withdrew his support for his motion after Surbaugh made her amendments. He dismissed her suggestions as "trinkets" that had nothing to do with Oz.

Wood also said Surbaugh's amendments were unnecessary, but he said he was willing to accept them as a means to keeping the Oz project alive. Oz lawyer John Peterson said the company would accept them, too.

"The project will be pay as it goes," he said. "It will not take revenue away from the capital improvement plan. In all honesty, we think that's documented.

"Uncommitted revenue will go back into the project the entire 9,000 acres for infrastructure and other development."

An independent revenue would confirm Oz's financial plan is sound, Peterson said.

After the meeting, Wood said the independent consultant would have to do more than a review of the financial studies Oz provided in its redevelopment proposal. To put oft-repeated concerns to rest, the county's consultant would have to make its own estimate of the theme park's attendance levels and other key assumptions, he said.

Surbaugh said she wanted the study to develop the county's "direct, indirect, incremental and hidden costs."

"Their (Oz's) study didn't do that," she said. "There was no reason why it should.

This is the study I've been calling for since September 1999."

Surbaugh said she wasn't committed to voting to approve the Oz plan if the feasibility study confirmed the company's projections and indicated a benefit for the county. But she said a positive finding could change her mind.

"I wouldn't have voted yes today if that wasn't a possibility," she said. "I don't object to a theme park."

The commission would start discussing its search for a consultant for the study as soon as they get an indication from the Legislature that it would extend the deadline on the enabling legislation.

Rep. John Ballou, R-Gardner, said the commission probably wouldn't have to wait long for that assurance.

"If the request for the extension comes from the county commission, I think it will go through without any problem," he said.

Thursday afternoon, Blaine Hastings, a GSA realty officer who is handling the transfer of Sunflower, said the federal government would have to review its position now that the county "made the worst possible decision" to further delay its up-or-down vote.

The Army will now have to make a number of pressing budgetary decisions concerning Sunflower, Hastings said. Alliant Techsystems Inc.'s contract to manage Sunflower expires at the end of the fiscal year Sept. 30, he said.

The further delay will necessitate the amendment to the transfer agreements released last summer, Hastings said. The federal government is required to get market value for Sunflower and that will change as values of surrounding property increases, he said.

"Valuation is one thing that will have to be reviewed," Hastings said.

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