Archive for Thursday, July 14, 2005

Pact reached on SFAAP water plant

July 14, 2005

The city of De Soto and the presumptive future developer of the Sunflower Army Ammunition Plant have reached agreement on the details that will give the city eventual ownership of the water treatment facility on the closed plant.

Under the agreement, Sunflower Redevelopment LLC will lease the water plant to the city until it is certified pollution free. At that time, title of the plant will be transferred to the city.

The agreement's final details, which the De Soto City Council approved in principle at its meeting last Thursday, were hammered out during the past week. The city and developer has been negotiating the details of a plan since January, when the Johnson County Commission named the partnership of Kessinger/Hunter and Co. and International Risk Group known as Sunflower Redevelopment LLC the developer of record for the closed 9,065-acre plant. At that time, Kessinger/Hunter principal Charles Hunter presented a letter to commissioners vowing the partners would negotiate an arrangement with the city for the water plant.

The negotiations took on more urgency this month because of annual budget considerations in the Pentagon.

Sunflower Redevelopment Executive Director Kise Randall told council members the Army conducted an annual review to weed out projects for funding that didn't appear to be moving forward. She said it was important to demonstrate progress to keep the Sunflower transfer on track. Kessinger/Hunter officials have said the goal is to complete the transfer this fiscal year, which ends Sept. 30.

"If it's stagnant and no progress is being made, the pressure will build to reallocate that money," she said, asking that the agreement be approved at the meeting or July 15 at the latest.

The plant can't be turned over directly to the city when the developer acquires Sunflower from the Army because federal law governing that process allows only transfer of uncontaminated land. Although there is no known pollution on the city's water plant property and it is assumed to be clean, the property was identified in as part of a larger "gray" area when the Kansas Department of Health and Environment and Tony Spaar, the plant's civilian commander, mapped the plant this past year.

That finding requires the city to lease the plant until it is certified as clean. Sunflower Redevelopment has agreed to an irrevocable lease until the water plant property is certified clean and title is transferred to the city.

Randall told the council that Sunflower Redevelopment would be responsible for the cleanup of any contaminants found on water plant property that originated from the manufacture of munitions at Sunflower.

One condition of the lease was that the city acquires what City Attorney Patrick Reavey characterized as "land lord insurance." The city was asked to acquire $2 million of liabilityinsurance that would protect Sunflower Redevelopment, as owner, from any claims resulting from the city's operation of the water plant.

The insurance request delayed the council's approval of the agreement because it would require the city to purchase an additional policy. That would provide protection far beyond the city's maximum $500,000 liability limit established by Kansas statute, Reavey said.

But faced with the deadline to reach an agreement, the council agreed to purchase the insurance provided the premium was less than $20,000 a year. If that stipulation is met, the council authorized Mayor Dave Anderson to sign the agreement.

Johnson said Tuesday discussion regarding the insurance was still ongoing but that the city's broker hadn't indicated a policy within the agreed upon premium limit would be a problem.

Overall, the city got what it wanted from the agreement, Reavey said, including hard-won easements through Sunflower needed to operate the plant. In addition, the city can walk away from the water plant with no obligations should a master plan of the city's water needs and options now being performed by consultant Shafer, Kline and Warren indicate refurbishing the Sunflower plant is not in the city's best interest, he said.

The city has leased the Sunflower water plant since 1998, and it has been the city's water source (the old Shawnee Street water plant has been set aside for emergency purposes).

The city's capital improvement plan calls for more than $2.8 million worth of improvement to the facility once questions of future ownership are resolved so bonds can be secured to pay for work. However, Johnson said some of those improvements have already been made. He anticipated the master plan would refine estimates of how much it would cost to refurbish the plant for the city's immediate needs.

The water plant is one of five public benefit transfers of Sunflower property approved by various federal agencies. Others included 2,000 acres to the Johnson County Park and Recreation District, Kansas and Kansas State universities, and 30 acres to De Soto USD 232.

The De Soto Board of Education accepted its agreement with Sunflower Redevelopment at a special meeting Tuesday night. Under the agreement, the district will receive 30 acres of land to use for future schools.

-- Contributing: Sara Stites,

sstites@theworldco.info.

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