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Archive for Thursday, November 6, 2003

Spring cleanup to boost Farmland project

K.C. company still seeks buyer for 467-acre site

November 6, 2003

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The first stage of a major cleanup at Lawrence's shuttered Farmland Industries nitrogen fertilizer plant could begin by April.

A Houston-based company won a bid to purchase much of the plant's fertilizer production equipment and plans to remove the equipment this spring for shipment to a buyer overseas, the company's president said Wednesday.

JAS Marketing will purchase about 30 percent of the plant's fertilizer production equipment for $725,000. Vas Kenyen, JAS Marketing president, said his crews could begin the six- to nine-month process of removing the equipment in March or April.

Farmland officials said the sale included three of the plant's major pieces of equipment and would be a good start to clearing the 467-acre piece of property for redevelopment.

"There will be a noticeable change in the skyline out there," said Kevan Vick, Farmland's general manager of nitrogen fertilizer operations.

Ongoing negotiations

Vick said Farmland, which filed for bankruptcy protection in May 2002, was in negotiations with several other parties interested in purchasing the remaining equipment at the plant. And he said developers are interested in purchasing the property with the equipment on it, probably to salvage it themselves before redeveloping the real estate.

"I really don't have any sense of whether it is more likely that someone will buy it in the state it is now or whether we'll continue to sell off more equipment before we sell the land," Vick said.

He declined to name potential buyers, but said the company was in discussions and it was possible a deal could be completed during the first quarter of 2004.

"I think we're talking about months rather than weeks, but we're not talking about years anymore," Vick said.

Douglas County and Lawrence city officials have said they were interested in purchasing the property. The two governments have said the land just east of Lawrence on Kansas Highway 10 could accommodate a mix of industrial, residential and green space uses.

Environmental issues

City and county officials got involved because of concerns that environment problems at the site, caused mainly by years of nitrate spills, would deter private development. And if it remained idle and vacant, the big plant site could become an eyesore at one of the major entrances to the city.

But Vick said Wednesday that concerns about the environmental condition of the property may be overblown. He said a program that began in 1995 to pump groundwater contaminated by nitrate into storage ponds is still working.

"There is a long-term commitment that is required out there, but it is not a particularly onerous commitment," Vick said.

When the pumping project began, Farmland estimated the project would require 30 years.

Kurt Limesand, a unit chief with the Kansas Department of Health and Environment, said Farmland had approached the department seeking more aggressive treatment to speed up the cleanup. None of the nitrate threatens groundwater used by the public or livestock.

"I think the situation out there is very manageable," Limesand said. "It is definitely under control, but it just takes time to restore the environment."

According to documents filed by Farmland, Limesand said, the company spends about $18,000 annually to run the program. Those costs likely went up when the plant was shut down, though.

Now, the company must periodically haul the contaminated water, which can be used as watered-down fertilizer, to area farm fields. Previously, Farmland was able to reuse the contaminated water in its manufacturing process.

If Farmland's financial problems prevent it from meeting its obligations, KDHE officials said the company previously posted a $482,750 bond that could be used to cover future costs.

"Since they have some financial bonds in place to cover environmental obligations, we feel reasonably confident those obligations will be met," KDHE spokeswoman Sharon Watson said. "It is a rather large bond."

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