Let's have an auction.
Lawrence City Commissioners on Tuesday said they're ready to make the opening bid in a bankruptcy court auction to purchase the vacant Farmland Industries plant east of Lawrence.
Commissioners emerged from a one-hour, closed-door executive session with a decision to bid on the 467-acre property so they could convert it into a new business or industrial park.
"Obviously it is a gateway to the community," Hack said of the former fertilizer plant that is along Kansas Highway 10, adjacent to the East Hills Business Park. "We know right now that it is pretty much an eyesore. To get it cleaned up is important, but way more important is the economic development potential this has for us."
But at what cost? City commissioners aren't saying yet. Hack would not disclose the city's opening bid in the auction. Instead, she said there will be an item on next week's City Commission agenda authorizing the city manager to file the necessary paperwork with the court requesting that an auction date be set.
As part of that process, the city will have to tell the court how much it is willing to initially bid on the property. Once an auction date is set, other interested parties can make bids, and the city will have a chance to raise its bid.
In other words, it will be a good old auction not unlike those held on farmsteads every weekend.
Hack said that does put the city in an odd position. She said the city won't be able to tell residents beforehand how much it is willing to spend to acquire the property. To do so would put the city at a bidding disadvantage.
The cost to buy the property is only one consideration. The longtime fertilizer plant, which closed in 2001, was the site of numerous fertilizer spills that left the ground contaminated. The city would assume the responsibility of cleaning up the property. But the cleanup may not have to be done with city funds.
At one point, there was at least $6 million in a trust fund set aside by Farmland to clean the property. City leaders previously have said there is a second administrative trust fund with $8 million to $10 million. But it has been unclear whether that money would be available to the purchaser of the property.
City Manager David Corliss confirmed that the city certainly would be looking to use trust fund money to clean the property, but declined to get into specifics. Hack also said the city was taking numerous measures to ensure it knows the full extent of environmental problems at the site before bidding on the property.
Hack said she hoped the city would be able to purchase the property without increasing taxes. She said the city, for example, would not make a bid that was contingent upon the approval of a new sales tax or an increase in the city's property tax rate.
In addition to the purchase and cleanup costs, it is expected that it will take a significant amount of money to extend infrastructure - such as sewer and roads - to the property, which is still outside the city limits.
Hack said the city would be looking to enter a partnership with the county to develop the site. There has been previous talk of private developers as well. It was unclear Tuesday whether the city would be pursuing a public-private partnership.
In the last two years, at least two private, out-of-state companies have publicly expressed interest in the site. But it is unclear whether they are still interested in the property. Some of their plans included using the property for purposes other than industrial development. The city and county have said they would be unlikely to rezone the property for anything other than industrial uses.
Lavern Squier, president and CEO of the Lawrence Chamber of Commerce, said he was pleased that the city was moving forward on the project. Squier said he could see the property developing into a business park that could serve a mix of uses, including light industrial, bioscience companies and corporate headquarters.
"It is just so easily accessible from the Kansas City area," Squier said. "The K-10 corridor really has a chance to blossom in the future."