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Archive for Sunday, September 20, 1998

OBSTACLES REMAIN ON ROAD TO OZ PARK

September 20, 1998

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State officials are proceeding with a plan to acquire the Sunflower Army Ammunition Plant for Oz developers.

Officials from at least three Kansas agencies continue the state's push to acquire the Sunflower Army Ammunition Plant from the federal government so that a Land of Oz theme park can be built there.

But federal and state officials say months of negotiation and unraveling of red tape lie ahead before it will be certain all or any of the almost 10,000 surplus federal acres in western Johnson County will end up in state hands for quick resale to the Oz Entertainment Co.

The Oz theme park promoters considered various sites, including one in Wyandotte County and another in Missouri, for the proposed $600 million entertainment complex, which promises to employ 1,500 people..

But now the company is working hardest on locating the park on the 1,500-acre northeast corner of the Sunflower Plant.

``We continue to focus our energy and resources on the Johnson County site,'' said Oz president Skip Palmer. ``We're continuing to work on the land-use plan, coordinating with Johnson County, Kansas Development Finance Authority, and both the governor's office and the Department of Commerce & Housing.''

In a June 10 letter to Commerce Secretary Gary Sherrer, Fred Ulrich of Buttonwood Capital, the Oz project's California investment banker, said that investors have committed $14.5 million in equity for the theme park and prefer the Sunflower site over the one in Wyandotte County.

Homeless get priority

A Kansas City spokesman for General Services Administration, the federal agency that will handle the Sunflower land disposal, said the army is expected to transfer the property to GSA sometime within the next two weeks, which would be a significant bureaucratic milestone.

``The army is finishing up its base-line survey (of the property) and we probably should receive that in a week or two,'' said Blaine Hastings of GSA. ``And at that point the property will be declared surplus to GSA.''

But it will be months, ``easily five to eight,'' before GSA can work through the various procedures required by federal law in deciding who ultimately gets the land, Hastings said.

For example, before the property can be sold to the state or private developers, Hastings said, GSA must determine it is unwanted to aid the homeless.

The McKinney Homeless Assistance Act gives first claim to surplus property to governmental or non-profit agencies that demonstrate the property will be used to help the homeless. Should such an agency come forward, which so far hasn't happened, the property would be theirs for free.

``Homeless screening will take at least 60 days,'' Hastings said.

In addition to the state of Kansas, various public agencies and local governments have shown interest in acquiring portions of the Sunflower reserve, which is south of Kansas Highway 10 near Desoto.

Hastings said federal law gives the state no precedence over local governments in the acquisition of surplus federal property.

But the state clearly has greater resources to pursue the transfer of the land for its favored purposes.

Selling the land

Earlier this year, the Kansas Legislature passed a bill that authorized Kansas Development Finance Authority to issue bonds for the Oz development. The same legislation gave KDFA approval authority over the eventual redevelopment plan for the Sunflower site, if the state succeeds in getting it, said KDFA President Kenneth Frahm.

``The state's interest is in trying to facilitate the eventual acquisition of the property by the Oz Entertainment Co.,'' Frahm said.

State or local governments have an advantage in acquiring federal surplus property because they can negotiate a sale price with federal authorities, Frahm said. Private developers, on the other hand, must competitively bid against one another for the property with sale to the highest bidder.

``The federal government is prohibited by the complex requirements they operate under from selling through negotiated sale to a private developer,'' Frahm said. ``It would be a really long and complex situation, if they were to do a competitive sale. And it would be difficult to sell the full 9,000 acres at competitive sale.''

Hastings said if the state wants the site for private development, then GSA is obliged by federal law to be paid market value for the property. He said the agency doesn't yet know the site's value.

Delicate negotiations

Frahm was reluctant to discuss how much the state is willing to pay for the site or precisely how the state's role as middle man between the federal authorities and Oz developers will be executed.

``That's a matter yet to be determined,'' he said. ``There's a lot of delicate negotiation going on, so I don't want to discuss what all those potential options might be.''

Steve Kelly, director of business development at Kansas Department of Commerce and Housing is another state official who has been working on the Oz project.

His agency, he said, has reviewed and approved the Oz plans and has certified the project acceptable for state bonds, but the agency's approval was not contingent on any specific site for the proposed park.

Because some areas of the Sunflower Plant are polluted, top officials from Kansas Department of Health and Environment also have been involved in the proposed land transfer to the state.

-- Mike Shields' phone message number is 832-7144. His e-mail address is mshields@ljworld.com.

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