Archive for Thursday, September 2, 2004

Letter clarifies Sunflower bill’s intent, consequences

September 2, 2004

An attorney for the developer working to secure ownership of the Sunflower Army Ammunition Plant has assured Rep. Dennis Moore that any transaction of the closed plant would include the proposed public benefit transfers and be subject to existing federal laws.

The assurances were stated in a letter from John Petersen to Moore dated Aug. 20. The letter was in response to an earlier letter the congressman sent to the attorney for Kessinger/Hunter and Co. of Kansas City, Mo., asking for clarification on a number of concerns raised with the introduction of federal legislation affecting the transfer.

Meanwhile, officials with the city of De Soto are trying to work out terms of an agreement with Kessinger Hunter that would give the city added assurances it would receive the water treatment plant at Sunflower.

Johnson County has been negotiating the purchase of Sunflower for two years with the hope that it could immediately transfer the plant to a developer. To that end, the Johnson County Commission has designated Kessinger/Hunter the potential developer of the plant.

In early June, Sen. Elizabeth Dole, R-N.C., introduced legislation on behalf of Sen. Pat Roberts, R-Kan., that would allow the Army to negotiate a direct transfer of Sunflower to a developer selected by Johnson County.

Moore -- who was not informed of the amendment written by the county, developer and Roberts' staff -- asked Petersen to explain the intent of the amendment, its possible consequences on proposed public benefit transfers, and to address concerns expressed by constituents that it would allow the developer to circumvent policies established in a number of federal laws governing the transfer of property like Sunflower.

Petersen wrote the congressman that the legislation was meant to remove Johnson County from the chain of title for the contaminated 9,065-acre plant and thus any responsibility for its environmental cleanup.

Further, Petersen wrote that Kessinger/Hunter, federal officials, the governor's office, and the county all agreed the transfer could go forward only if Gov. Kathleen Sebelius signed a document called a finding of suitability of early transfer and an agreement was reached with the Kansas Department of Health and Environment that dictated a cleanup schedule for the plant. Furthermore, the KDHE agreement would include third-party insurance and bonding guaranteeing the remediation, Petersen wrote.

"We simply disagree with any interpretation of the amendment asserting that any responsibility or commitment of the developer associated with the transaction has been eliminated," Petersen wrote.

As for the public benefit transfers to Kansas University, Kansas State University, the city of De Soto, De Soto USD 232 and the Johnson County Parks and Recreation District, Petersen wrote that Kessinger/Hunter had "acknowledged and expressed our intent to the transfer of significant portions of Sunflower at no cost to identified public entities."

But, Petersen argues in the letter it was still too early to discuss the details of the public benefit transfers.

"Again, it has been our understanding that everyone understood that we needed to complete our due diligence and negotiations with the Army to first determine if the transaction is economically viable before we turn our attention to the specific details of the public benefit transfers," Petersen wrote.

The developer had been talking to the city of De Soto and the two universities about the transfers, Petersen wrote.

Mayor Dave Anderson said the city wanted title to the water plant as defined in a legal description the city paid $10,000 to have completed.

Moore called Petersen's letter a "good first step."

"After the Senate approved the Roberts/Dole amendment, there were no clear answers in the public record regarding the intended development of that land," the congressman said. "I appreciate Mr. Petersen's letter and assurance that the developer intends to provide public benefit transfers of land to the city of De Soto, the De Soto School District, Johnson County Parks and Recreation, the University of Kansas, and Kansas State University.

"I will continue to watch the transfer process to ensure it has the best interest of our communities at heart."

The federal Sunflower amendment became public knowledge when Micheline Burger, president of the citizen's group Taxpayer's Offering Tomorrow's Opportunities, discovered it through an Internet search. She was among those concerned it would allow Kessinger/Hunter to circumvent existing laws governing the transfer.

Like Moore, she found Kessinger/Hunter's commitment to the public benefit transfers reassuring, but Burger said she wanted more than promises that existing transfer legislation couldn't be avoided under the proposed legislation.

"There is no meat there to make the public feel like we should have some confidence in all respects," she said.

It has been assumed that Kessinger/Hunter would get tax write offs for the public benefit donations. Johnson County Chief Legal Counsel Don Jarrett has explained in the past that the timing and details of such arrangements were tricky because coerced donations might not be seen as tax deductible.

Moore's letter to Petersen cites case law suggesting no tax deductions would be available. Petersen didn't respond to that part of Moore's letter except to say Kessinger/Hunter would avail itself of all tax benefits available.

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