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Archive for Saturday, April 22, 2006

City, county weighing Farmland site purchase

April 22, 2006

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City and County commissioners are considering whether to purchase the site of the former Farmland Industries plant on the east edge of Lawrence. Officials are reviewing a report about the necessary environmental cleanup at the site along Kansas Highway 10 before making a decision.

City and County commissioners are considering whether to purchase the site of the former Farmland Industries plant on the east edge of Lawrence. Officials are reviewing a report about the necessary environmental cleanup at the site along Kansas Highway 10 before making a decision.

City and county commissioners continue to inch closer to making an offer to buy the vacant Farmland Industries fertilizer plant on the east edge of Lawrence and convert it into a new industrial park.

Douglas County Commissioner Charles Jones said a new report outlining the environmental cleanup issues related to the 467-acre site - which closed in 2001 and became embroiled in the company's bankruptcy - was now out.

"I think that will lead us to a fish-or-cut-bait decision," Jones said.

The report was commissioned by the bankruptcy trust that is controlling the property along Kansas Highway 10, but it was vetted by officials from the Kansas Department of Health and Environment, Jones said.

Jones was still in the process of reviewing the highly technical report, but he said there were early indications that cleaning up the property - which has been contaminated from years of nitrogen spills - was financially feasible.

"I think it is still a doable project," Jones said.

Part of the reason that county officials remain optimistic about the financial feasibility of the project is because Farmland - as a condition of its bankruptcy - was required to place about $7 million in an escrow account to pay for future cleanup at the site.

The hope, Jones said, is that the $7 million will be enough to cover the cost of the environmental cleanup, but there likely will be additional expenses to remove aging structures from the property and ready it for use as a new industrial park.

Big questions

But how much additional money would be needed and where it would come from are two big questions that leaders must answer before the project can move ahead. City and county commissioners, along with the Lawrence-Douglas County Economic Development Board, have been discussing an increase in property taxes or a new countywide sales tax that would fund both economic development and open-space activities.

Raising the sales tax would require a public election; increasing property taxes would not.

Preliminary discussions have focused on a 1/4-cent sales tax that would raise $20 million over the next 10 years, or a 2-mill property tax increase that would raise about the same amount.

Members of the economic development board have said a property tax might be the better way to go, in part, because the issues surrounding the Farmland site could be complicated by an election.

"To me, there is a lot of risk with the sales tax vote," said Mike Maddox, chairman of the economic development board. "If the city and the county are committed to doing something, they have the power to do it with a mill levy increase."

Leaders have argued that an election with the Farmland project as a centerpiece could be difficult because leaders aren't in a position to promise voters that the project will happen, even if a sales tax is approved.

That's because the property is under the control of the bankruptcy court. Once an offer to purchase the property is made, the court will require that an auction be held to ensure that the land fetches the highest price possible. Local leaders can't be assured they would be the winning bidder. It also is possible that someone could make an offer for the property before the election, which would make it difficult for the city/county to be a bidder.

But city and county commissioners have said it is unlikely that someone in the private sector will step forward to buy the property. What little private interest has been shown in the property has included plans for a mix of commercial and residential space in addition to industrial development. Elected officials would have to change the zoning of the property to allow that to happen. It is uncertain whether commissioners would change the zoning to allow anything other than industrial uses.

The county currently doesn't have any spaces larger than 100 acres in size to offer a large new industrial employer. The fact that the Farmland site is adjacent to the existing East Hills Business Park and is at an entryway to the community also are factors.

"It is a horrible liability in terms of its appearance," Jones said. "And it is not being used and we need the industrial space."

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