Archive for Thursday, August 4, 2005

Sunflower transfer nearing completion

August 4, 2005

The transfer of the Sunflower Army Ammunition plant from the federal government to a private developer made significant progress last week and could be completed Wednesday.

Blaine Hastings, the point man in the transaction for the U.S. General Services Administration, said Monday a few details remained to be completed before the federal government was ready to sign off on the transfer. Those could be wrapped up in one or two days, he said at that time.

The deal would transfer the 9,065-acre plant to Sunflower Redevelopment LLC, a partnership of Kessinger/Hunter and Co. of Kansas City, Mo., and International Risk Group of Denver, for the cost of cleaning up contaminated property on the plant.

Included in the deal are subsequent public benefit transfers of Sunflower property from the developer to Johnson County, the city of De Soto, De Soto USD 232, Kansas State University and Kansas University.

The public benefit transfers and the Kansas Department of Health and Environment's oversight of the environmental cleanup of the site required the developer to complete a series of complex and interlocking agreements with state and local jurisdictions, as well as many federal agencies and departments.

Sunflower Redevelopment attorney John Petersen said those agreements below the federal level were completed last week.

Noteworthy among them were Gov. Kathleen Sebelius' signing of a finding of suitability of early transfer for Sunflower -- required by federal law before the transfer of the still-contaminated site can go forward -- and a consent order for the Kansas Department of Health and Environment spelling out when and how the plant will be cleaned and establishing the insurance policies needed to guarantee the remediation.

"After years of negotiations and false starts, I am excited to announce today that an agreement has been reached that will transform the Sunflower Army Ammunition Plant into a powerful engine for economic growth in northeast Kansas," Sebelius said Thursday.

The governor insisted that any transfer to Sunflower Redevelopment set aside land for a life-science research park. Sunflower Redevelopment officials announced last week that an agreement had been reached that would transfer 200 acres to Kansas University for such a park. In addition, the developer agreed to make an additional 250 adjacent acres for bioscience development.

Sebelius said those uses and the 2,000 acres of Sunflower to be deeded to the Johnson County Parks and Recreation Department and the deal to transfer the Sunflower water plant to De Soto were key in her decision to sign the so-called finding of suitability for early transfer.

"That's great news for the city of De Soto, Johnson County, both the University of Kansas and Kansas State University, and the people of Kansas," she said.

The governor credited the work of Sen. Pat Roberts, Congressman Dennis Moore and the Johnson County Commission in moving the project forward.

"With this agreement in place, the Sunflower Redevelopment LLC firm can move ahead on transforming this site, with its ammunition production history, into a center for world-class scientific research and innovative economic development that will benefit all Kansans," Sebelius said.

One late snag in the negotiations was the desire of the state and Johnson County to have a 20-year term on the insurance policy guaranteeing the cleanup of any contamination found after initial cleanup is completed.

Petersen said Sunflower Redevelopment was unable to secure such a policy in the current insurance market but that its policy with Quanta Capital Holdings Ltd or Bermuda satisfied state and county concerns. There would be opportunities to review renewal of the 10-year policy, he said.

Available policies were jointly reviewed with federal, state and county representatives, Petersen said.

"Everyone would like a longer term if we could get it," he said. "Everyone agrees the package put together with Quanta was adequate to protect the developer, the state, the county and the public benefit transferees."

Sunflower Redevelopment was ready to start its remediation effort when the final transfer agreement was in place, Petersen said. It is estimated the cleanup would take from seven to eight years, but Petersen said Sunflower Development hoped to have it completed sooner, which would help ease concerns about the insurance term.

"Our hope is to get the cleanup done soon enough that (the term) won't be a problem," he said. "We are somewhat confident we can do that. The sooner we get it cleaned up, the sooner we can start developing the property. That's what it's all about."

The developer would clean up contaminated soil sites and administer the removal of many structures on the plant possibly contaminated with explosives. An Army deadline that progress be made on the transfer by July 29 or risk losing $50 million in Army funding dedicated to the explosive side of the cleanup led to much of the recent progress on the transfer.

With the transfer complete, Sunflower Redevelopment would start focusing on its redevelopment plan, Petersen said. The developer would also start talking to the county about needed roads and various jurisdictions about other needed utilities, including water and sewers.

Commenting has been disabled for this item.