This aerial view looks northwest over the former Farmland Industries Inc. fertilizer plant and its surrounding 467 acres. In the foreground is Kansas Highway 10, the extension of 23rd Street east of Lawrence.

This aerial photo, looking east over the northern end of the former Farmland Industries Inc. fertilizer plant site east of Lawrence, shows a holding tank in the foreground and holding ponds to the east. They are part of a system to remove nitrates from groundwater at the site, then pump the water into North Lawrence for use irrigating and fertilizing fields. At the top right of the photo is the East Hills Business Park.

The former Farmland Industries Inc. fertilizer plant at the eastern edge of Lawrence is a shell of its former self.

Today, now that the production equipment is gone, all that is left behind are unusable tanks, pipes and other infrastructure along with unwanted nitrates and an unknown inventory of other environmental concerns, ones that may or may not ever surface.

But one thing is for certain: Lawrence leaders want to buy the property and turn it into a thriving industrial park that could become home to high-tech bioscience operations, stable manufacturing plants and, potentially, create several thousand jobs.

After more than three years of discussions among local governments, city officials are conceding that the prime property has to get back in business soon.

“It’s kind of like we’ve been stuck in cement for a while,” said Mayor Sue Hack, who is helping lead the city’s efforts to acquire the 467-acre site. “We may need to get a bit more aggressive.”

Commissioner Rob Chestnut sees that aggressiveness taking the form of compiling a new bid for acquiring the property, one that would include the community – the city, Douglas County and possibly the state – taking responsibility for financing the cleanup of any unexpected environmental problems that might surface in the future.

“That’s what we need to do,” said Chestnut, who considers the chances of future problems surfacing “remote.” “All indications are that this would accelerate the process,” he said.

Below are questions and answers regarding the past, present and future of the former Farmland site that stretches from Kansas Highway 10 to the extension of 15th Street just east of town, generally west of the city’s existing East Hills Business Park.

Q: Who owns the property?

A: The site is controlled by a bankruptcy trust approved by the bankruptcy court that oversaw Farmland’s liquidation. The name of the trust is the F.I. Kansas Remediation Trust, and it is responsible for marketing the property to potential buyers. A company called SELS Administrative Services has been hired to oversee trust activities. It in turn has hired Shaw Environmental, which is responsible for doing cleanup efforts at the site. Shaw has paid property taxes on the site, and the site’s account – spanning several different addresses – “is all paid in full,” said Candice Norman, a registration and tax clerk in the county treasurer’s office.

Q: What has the city done to try to buy the Farmland property?

A: The city last July submitted a bid to the bankruptcy court, but the bid hasn’t been accepted by the trustees that oversee the Farmland property. The city’s bid was less than a slam dunk because the city proposed that the trustees continue to assume all legal liability for cleaning up the property. The city wants to take ownership of the property and do the work to convert the site into an employment center and community open space.

Q: Who is doing legal work for the city on this project?

A: In August 2004, Lawrence and Douglas County governments jointly hired Lathrop & Gage, a law firm in Kansas City, Mo., to advise city and county officials regarding issues related to the acquisition of the Farmland property through the bankruptcy process. The governments agreed to share costs equally.

Early last year, the city agreed to cover all legal fees. From 2004 through the end of February, the city had paid Lathrop & Gage a total of $32,504 for the firm’s work on the Farmland case, said Toni Wheeler, the city’s director of legal services.

Some of the city’s money has come from its general fund, while some has come from the city’s revenues for water and sewage services – a source of revenue tapped, with approval of Lawrence city commissioners, because the money would be used for supporting economic-development activities, Wheeler said.

Q: How much is the city proposing to pay for the property?

A: The bid doesn’t work that way. The city isn’t proposing to pay any city money for the property. Instead, the city’s bid is based on leaving a certain amount of money in the trust fund to be redistributed to Farmland creditors. There are two trust funds associated with the property. One is an environmental cleanup trust fund that has $5.2 million in it. The other is an administrative trust fund that has $7.8 million. The city’s bid does not propose to take any money from the $5.2 million environmental fund. But it does propose to take some of the $7.8 million. The city has not disclosed how much of that fund it would take. It would take significant amounts of city money in the future to develop the site into a business park. City Manager David Corliss has said that extending roads and sewer service to the site would be a multi-million-dollar, multiyear project.

Q: Was the city’s bid realistic? Did officials really think they could avoid the legal liability of cleaning up the property?

A: Corliss said he thinks the city’s bid is sound and realistic. He said it is unlikely that city crews will be able to manage the clean up of the property. That means the city would have to hire a third party to do the cleanup. He said a third-party contractor already is on site doing work for the trust. That contractor has expressed an interest in continuing the work, and the trust has a fund set aside to pay for environmental cleanup work.

Q: I’ve read where the city may be reconsidering its position. Why is that?

A: Basically because the Kansas Department of Health and Environment has said it is unlikely that it will recommend the city’s bid for approval. John Mitchell, the interim director of environment for KDHE, said having the city take over the cleanup would be better than leaving it up to the private trust. Mitchell has expressed concerned about what would happen to the property if the trust was responsible for cleaning up the property and depleted the $5.2 million trust fund before the clean-up was completed.

Q: How much would it cost to clean up the property?

A: Mitchell has told city leaders that KDHE believes the environmental cleanup can be accomplished with the remaining $5.2 million left in the trust fund dedicated for such purposes. But he also told city commissioners that he couldn’t guarantee that. KDHE likely would require the city to commit to using taxpayer dollars to clean up the property, if the $5.2 million isn’t adequate. But Mitchell has said that the city would not be required to put up any extra money, at least not up front.

Q: What is the environmental issue at the site?

A: The main environmental issue is groundwater and soil that is contaminated with nitrates, Mitchell said. The nitrates – basically crop-grade fertilizer – aren’t harmful to the touch but can cause problems if ingested. Specifically, it can cause “blue baby syndrome” in infants, which can lead to death.

A small patch of property – where a cooling tower once was located – contains soil with elevated levels of acid, the remnants of chromates that had been used at the site to stunt the growth of bacteria. But that site should not pose any problems for redevelopment, Mitchell said, so long as the site is left relatively undisturbed. The site could be covered with a parking lot, for example, and pose no public health dangers.

Overall, Mitchell said, the site’s dilapidated appearance from the outside belies the relatively benign environmental concerns lingering below the surface.

“The Farmland property presents a very low risk,” Mitchell said.

Q: How are the nitrates getting cleaned up?

A: A set of pumps, wells and drainage collection ponds on the property are doing a good job containing the contamination and slowly removing it, Mitchell said. He also said the site has a built-in disposal system for the millions of gallons of water that the pumps suck from the ground. The fertilizer-laced water is pumped beneath the Kansas River and into North Lawrence, where several farmers currently use it to irrigate crops. The biggest issue with the cleanup is that it is expected to be a long process. KDHE leaders estimate it will take about 30 years to fully pump all the nitrate-contaminated water out of the ground.

Q: Is there a chance that other, more serious environmental issues could be found at the site?

A: That’s what concerns city commissioners. In December, an abandoned landfill was discovered on the site. At the moment, it does not appear that it will need a costly cleanup, but commissioners have said it is a good reminder of how potential problems could crop up. Mitchell, with KDHE, said his agency can’t guarantee that other issues could be discovered. Others – primarily Douglas County Commissioner Charles Jones – however, have argued that the government likely would be responsible to clean up any new contaminant found on the site. The trust is only obligated to clean the property until the trust fund is depleted, and Jones argues that it would be in the community’s interest to have the eyesore property cleaned up and put back into use.

Q: How long has the property been vacant?

A: The plant closed in 2001 and Farmland declared bankruptcy in 2004.

Q: Is all the land environmentally contaminated?

A: No. KDHE estimates that 263 acres of the 467-acre site is essentially in good environmental condition. The remaining 204 acres – mainly on the northern half of the site – will need the environmental cleanup.

Q. There’s a lot of equipment still on the site. Is that a concern?

A: Not really, Mitchell said. Most of the metal can be taken down and sold for scrap.

Q: Why not let the private sector do this?

A: City and county leaders have said they would be fine with a private-sector buyer or buyers purchasing the property, so long as the property would be used as industrial space. The city and county have agreed that the property won’t be annexed into the city, nor have any development plans approved, if residential development or large-scale retail development is proposed for the site. There have been private companies that have expressed interest in the site, and they will have the opportunity to participate in an auction for the property.

Q: What type of auction?

A: Once the bankruptcy trust accepts a bid, the bankruptcy court will set an auction date for the property, with the accepted bid serving as the opening bid. At that point, the court would conduct a traditional auction for the property. The bidding would be open to anybody who can meet the minimum financial and legal requirements set by the court.

Q: The site is accessible by rail. Is that significant?

A: Definitely, said Beth Johnson, vice president for economic development at the Lawrence Chamber of Commerce. Of the 64 business-attraction prospects fielded by the chamber in 2007, 34 were turned away because Lawrence did not meet the companies’ various needs. Of those rejections, about a quarter were attributed to a lack of sites with available rail service.

“There are opportunities lost without (us) even being able to get in the game,” she said.

Q: If the city were to end up buying the site, who would market it to industrial users? The chamber? A consultant?

A: Hack said that the plan would be to continue the ongoing partnership that drives economic development in the community: city, county and chamber.

While there has been talk of how such marketing would take place, she said, no firm decisions have been made.