Archive for Thursday, February 20, 2003

Sunflower transfer documents released

Kessinger/Hunter spokesman says firm expects first closing late this year

February 20, 2003

Although it was scheduled for discussion on the county's proposed Sunflower Army Ammunition Plant legislation, last Thursday's Johnson County Commission work session served as a progress report for Kessinger/Hunter and Co.'s redevelopment proposal for the closed plant.

Kessinger/Hunter's attorney John Petersen told the Commission negotiations with the state about a possible early transfer of Sunflower were beginning to bear fruit. That very day, the U.S. Army released a preliminary finding of suitability for early transfer specific to the Kessinger/Hunter proposal, and the Kansas Department of Health and Environment made public a draft consent order listing the developer's responsibilities in the plant's environmental cleanup and financial guarantees needed to make it happen.

"This is a real deal in the view of the U.S. Army," Petersen said. "We hope to have the first closing this calendar year. We don't think that is unrealistic."

Petersen said Kessinger/Hunter's interest in Sunflower started last year after the demise of Oz Entertainment Co. In June, then-Gov. Bill Graves announced the formation of a four-member panel from his administration to explore a possible early transfer of Sunflower to Kessinger/Hunter and its financer, Cherokee Investment Partners of Raleigh, N.C.

Kessinger/Hunter entered the talks with four guiding principles, which were reflected in the recently released draft agreements, Petersen said. The principles were:

  • Money to clean up the known contamination sites and insurance guaranteeing cleanup of any unforeseen pollution would be in place at closing.
  • No public money or tax incentives would be needed to accomplish the transfer or the plant's environmental cleanup.
  • Johnson County's "Community in a Park" land-use plan adopted in 1998 would serve as the basis for Kansas House, where Ballou is speaker pro tem.

"He's the man with the gavel," Toplikar said. "He's the elected leader in the House. I don't think it's going to be very fruitful to disagree with the second man in charge in the House."

Changes could be made to the county's proposal before it makes it to the House. Boyer said Tuesday Karin Brownlee, R-Olathe, will likely change the bill before it passes out of the Senate Commerce Committee she heads.

Among her concerns, Brownlee said, was the value of Sunflower. An estimate of the property's worth will be part of her review of the legislation, she said.

For his part, Ballou said Sunflower is worth far more than the cost of cleaning it up, estimated to be from $45 million to $55 million.

"Conservatively, that land is worth $600 million," Ballou said. "Why should that much land go to any one developer? Why shouldn't it go to a redevelopment authority that would provide revenue to the federal government, the state, county and the city?

"Where do the taxpayers win in this deal?"

With that much profit to be made from future land sales, Ballou questioned the need for added tax incentives that would only increase the price of land Kessinger/Hunter sold to secondary investors.

Kessinger/Hunter wasn't asking for the tax rebates the bill would provide and repeated they would not be needed to accomplish the transfer or cleanup of Sunflower, Petersen told the Commission. But, he added the incentives would be a useful tool in attracting future development to the plant.

Should Sunflower be transferred to Kessinger/Hunter, the company would be eligible for tax deductions for donating property to the Johnson County Park District, K-State Extension, De Soto USD 232 and the city of De Soto. Those tax advantages could disappear should title of the property be transferred to a redevelopment authority, which Ballou's bill would mandate.

After the work session, Petersen said transferring Sunflower to a redevelopment authority could threaten Kessinger/Hunter's proposal. He also questioned whether Ballou's proposed redevelopment authority could receive title to Sunflower under federal early transfer laws.

"It depends on its mandated authority," he said. "Ownership causes a problem because you have to have a fully developed plan for cleanup. The question left unanswered, is where is the funding coming from?"

Another major difference between Ballou's proposed legislation and the county's bill was the membership of the redevelopment authority. Ballou's bill would include two members from De Soto and one each from Olathe, Gardner, Eudora, the state and the county. The county's bill would have the County Commission appoint all seven members but states "at least three" should be from local municipalities, townships or jurisdictions.

At the work session, Anderson presented the Commission a letter asking the city be specifically included on a future redevelopment authority.

"De Soto's history for the last 50 years has been tied with the plant," the De Soto mayor wrote. "Since we are the only Johnson County city that directly borders the plant, it is practical to ensure the city will be represented directly in the decision-making process. We need a guaranteed membership contingent (on selection) first by our City Council and then approved by the commissioners."

Surbaugh said De Soto's concerns were a non-issue. She would use her appointment to ensure De Soto's representation should other commissioners overlook the community, she vowed.

"I don't think anyone doubts De Soto has an interest here," she said. "But once you start specifying one you have a hard time not specifying the next, next and next."

The county's plan would make a redevelopment authority more accountable, she said, because the terms of its members would be the same as the county commissioners who appointed them.

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