Archive for Tuesday, March 25, 2008

City cool to firm’s offer on Farmland

Private company previously wanted to buy site, take over its cleanup

March 25, 2008


Potential Farmland plant buyers back out

New information emerges today on a private company wanting to redevelop the former Farmland Industries plant into a biodiesel and ethanol center. Enlarge video

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PowerPoint presentation by John Mitchell ( .PPT )

A private company was strongly eyeing the former Farmland Industries site as a new biodiesel and ethanol production center but scrapped the plans after receiving a cool reception from city leaders.

Michael Steinle - a Lawrence resident and former environmental manager for Farmland Industries who was involved in the proposal - said the private development group that is redeveloping the former Sunflower Army Ammunition Plant wanted to buy the former fertilizer site a little more than a year ago.

But by that time, city commissioners already had expressed an interest in purchasing the 467-acre piece of property east of Lawrence to convert into a business park. Steinle said city leaders seemed closed to the idea of a private development company purchasing the site and assuming the liability of cleaning up the environmentally blighted piece of property.

"They were cordial enough, but in the end I got the very clear impression that they wanted complete control of that property," Steinle said.

Private interest

A chief executive of the private company - Denver-based International Risk Group - confirmed that his company was strongly interested in the Farmland site and had an ethanol/biodiesel company all but certain to take 50 acres of the site.

But Patrick Riddell, CEO of IRG Environmental, said his company gave up on the project because it became too complicated to determine how to move it forward. He said the deal was unusual because the city was trying to buy the property through the bankruptcy process.

"I don't think we have ever been in a situation where we've competed with a city before," Riddell said. "We just couldn't get a handle on how to proceed."

City Manager David Corliss confirmed that city leaders were presented with a proposal that included a biodiesel plant. But he said city leaders have had concerns about whether a private company is best suited to handle the environmental cleanup of the property that has been contaminated by years of fertilizer spills.

"There have been a lot of environmental vendors out there who were primarily interested in making money on the cleanup," Corliss said. "We have been concerned that would mean the trust fund set aside for cleanup would be quickly spent and we wouldn't get the property cleaned up the way we want it."

Mayor Sue Hack said that was her recollection of why the city didn't express interest in the IRG proposal.

"Our responsibility is to make sure that it will be cleaned up so that we and future generations can live with it," Hack said.

City's concerns

Corliss also said there were concerns that a biodiesel or ethanol plant may not be the best use of the property. He said it was likely that an ethanol plant would request a large public subsidy, may not employ large numbers of people, and may produce some environmental concerns.

IRG officials, though, said the city erred in its assessment. Riddell said the company wasn't planning on making its money through the cleanup process but rather through the redevelopment of the project. He said the company was particularly interested in the Farmland site because it thought it had a ready-made tenant for a portion of the facility in the biodiesel and ethanol center.

"It seemed like it made perfect sense because we had a tenant lined up," Riddell said. "We thought it was a pretty clean industrial tenant that could help pay for the rest of the development."

Riddell said his company wasn't seeking any financial assurances from the city, but rather wanted the city to express enthusiasm for the project and no longer be a potential bidder on the property. Tax abatements or tax increment financing could have been requested in the future, but wasn't part of what IRG was asking the city to commit to upfront.

Steinle said the alternative fuel center could have provided about 200 jobs similar in quality to the jobs that were at the former Farmland plant. He also said there would have been more than 200 acres left at the site to develop into a biotechnology business park, which is an idea the city has expressed interest in. No residential development was proposed for the site.

Moving forward

Not all city commissioners were aware of the previous offer. The proposal was made before City Commissioners Rob Chestnut and Mike Dever joined the commission following the April 2007 elections. Dever said he wasn't aware of IRG's interest in the site, but said he definitely had an open mind about considering proposals from the private sector. He also said he would be open to an ethanol or biodiesel plant locating in the city.

"I'd have to learn more, but at first glance, I don't think there would be anything unpalatable about inviting a green energy provider to the community."

Currently, city commissioners are struggling with whether to submit a bid for the property that would have the city assume full liability for cleaning up the property.

Riddell said the IRG proposal would have involved the company assuming all liability for cleaning up the property. He said the company has successfully assumed over $1 billion worth of environmental liability at sites across the country. He said the company had plenty of reasons to make sure that it wouldn't fail in Lawrence.

"We wouldn't take chance on having a black eye at the Farmland site when have the huge deal with Sunflower just down the road," Riddell said. "That would be disastrous."


DRsmith 9 years, 1 month ago

Commission must not have a financial stake in IRG.

BigPrune 9 years, 1 month ago

Just another example of how the City of Lawrence drives away businesses.

I'd like to see a survey on how easy it is to conduct business with the City of Lawrence. Then list the different departments and the ease of working with them.

Mail a survey to every business in town including non-Chamber members, and make it so it can be responded to anonymously (to prevent City reprisals for any criticisms).

jayhawklawrence 9 years, 1 month ago

Well I am VERY glad they didn't let this become a bogus ethanol plant. WHEW!

Thank you city of Lawrence for stopping that boondoggle.

BigPrune 9 years, 1 month ago

You must work for the City jayhawklawrence.

Godot 9 years, 1 month ago

Sounds like this was handled in another one of those illegal closed meeting. Where are the minutes? Who, besides Hack, was involved in making the decision? Why wasn't this brought before the public in a commission meeting? If this is true, it is cause for firing Corliss.

jsal 9 years, 1 month ago

It is once again very unfortunate that we lost another business for the City of Lawrence, especially when you look at how this type of fuel is gaining in popularity. Why are we first finding out about this a year after the offer was made?

The community of Lawrence definitely needs to step up to the plate and demand that our commision keep the public informed of these types of decisions. Why would the city want to take on such a large liability for clean up of this long as the requirements for clean up were outlined and monitored than who ever purchases this property could be held accountable for cleanup and use.

Once again, it appears to be very, very, very poor decision making has occured...let's keep driving away business' that would like to establish themselves here.

In the mean time what do we do to boost our revenue for the city, the commision turns down a mill levy increase...yet the city can't keep up with the current budget demands. Let's keep up the practice of shunning business and see where that eventually will get us.

tolawdjk 9 years, 1 month ago

200 chem/industrial + associated construction and contractor jobs = bad

New WalMart jobs = good

Yep, city government at its finest.

toefungus 9 years, 1 month ago

Maybe we need to start filming these so called leaders and make a documentary. We could call the film Entitlement. These behind the scenes, just for the elite, attitudes are killing many of the communities in Kansas. With so little pie to go around, hoarding is consider an acceptable plan. I do not understand why public money is being considered when private money is available. Hack is at the center of all of these storms. She would be a star in the film.

ralphralph 9 years, 1 month ago


..... city leaders have had concerns about whether a private company is best suited to handle the environmental cleanup of the property ....

HUH ????

Godot 9 years, 1 month ago

I believe that the reason private industry is being turned away for this project is because the city and county have made promises to provide KU with a research facility.

This is, as I recall, the third private entity that the city has turned away. Maybe more, who knows?

Janet Lowther 9 years, 1 month ago

The state definitely needs to repeal the so-called "home rule" provision as applies to municipalities.

Municipalities should have authority to build and maintain streets and sewers, and perhaps provide drinking water and fire protection, and nothing else.

The Sheriff should be in charge of law enforcement for the entire county, and any charges should go to the district court.

The municipal government of Lawrence seems to believe that they are a local deity, not a mere government.

jayhawklawrence 9 years, 1 month ago

People that promote ethanol are either not informed or they are usually Conservative Republicans of the Kansas variety.

Who else would ignore the facts and charge forward to protect short term corporate interests at the expense of plain common sense.

There are many things we can do to conserve energy and lowering fossil fuel usage will require regulation of the auto industry. We cannot keep fighting oil wars to feed our addictions. It is too expensive and it is just immoral.

But how can you talk sense to a bunch of Neufeld cultists who want to build coal, ethanol and bio-diesel plants on top of the last great American aquifer and laugh at talk of global warming.

Christine Pennewell Davis 9 years, 1 month ago

once again I say why? Other people willing to tackle the mess but this city says no why?

Jackson 9 years, 1 month ago

Same old, same old. The CC owns the comm., and Dist. 497 administration owns the school board.

Altogether now, jump through the hoop.

seriouscat 9 years, 1 month ago

Haha! Wow.

Sometimes it seems that Lawrence would be better off being run by chickens with their heads cut off or a random number generator or something.


twaldaisy 9 years, 1 month ago

But Glock I thought Merrill would want the co. to buy the site as they would provide "clean" burning fuel. And the city/county has sooooo much money to spend on cleaning it up and building more high dollar residential areas that Lawrence needs to provide to..... Oh that's right, no one is moving to Lawrence any more.

igby 9 years, 1 month ago

Hawk: As I remember, the LJW covered the CC elections fairly well. It's the voters that failed here. The town split, Liberals against the realtors and home builders. The "wingnuts against the robber barons". What do you expect. A village of idiots deserves idiots to lead them.

igby 9 years, 1 month ago

Who cares what happens to the farmland site as long as the tax payers don't have to pay for it.

igby 9 years, 1 month ago

The CC we have now is the best that special interest money can buy, both left and right of the middle. We should let the CC do just that. Build a bio-fuel plant, but not at the tax expense.

Richard Heckler 9 years, 1 month ago

Ethanol is NOT so green! Commissioners need to do homework. Exchanging one polluter for another makes zero sense

Volatile organic compounds (VOCs) being released by the ethanol plants include formaldehyde and acetic acid, both carcinogens. Methanol, although not known to cause cancer, also is classified as a hazardous pollutant.

The fumes are produced when fermented corn mash is dried for sale as a supplement for livestock feed. Devices known as thermal oxidizers can be attached to the plants to burn off the dangerous gases.

Recent tests have found VOC emissions ranging from 120 tons a year, for some of the smallest plants, up to 1,000 tons annually, agency officials said. It isn't known whether the chemicals are hazardous to nearby residents, they said.

When the plants were built, many reported VOC emissions well below 100 tons a year, allowing them to bypass a lengthy and stringent EPA permitting process. Plants with emissions above 100 tons annually are classified as "major sources" of pollution under the Clean Air Act and are more heavily regulated.

States started measuring VOC emissions at ethanol plants about a year ago following complaints of foul odors. One small facility in St. Paul, Minn., had to install $1 million in pollution control equipment to reduce the emissions.

"To the extent that this new test procedure is identifying new VOC emissions, the industry has certainly agreed to address those," said Bob Dinneen, president of the Renewable Fuels Association, the recipient of EPA's letter.

There are 61 ethanol plants, primarily in the Midwest, producing 2.3 billion gallons a year, and another 14 under construction. By the end of next year, the industry's output is expected to reach 3 billion gallons.

EPA's Chicago region oversees 25 plants in Illinois, Minnesota, Wisconsin, Michigan and Indiana. The agency's Kansas City regional office, responsible for Iowa and Nebraska, two other big ethanol producing states, is still gathering test results. Agency officials there have not said what they will do.

Most ethanol facilities are in rural areas. One that's not, the Gopher State Ethanol plant in St. Paul, Minn., has been the target of complaints from nearby residents. A neighborhood group settled a lawsuit against the company last month.

When the plants were built, it was thought methanol and ethanol would be the major pollutants, said Jim Warner, an official with the Minnesota Pollution Control Agency.

twaldaisy 9 years, 1 month ago

Glad to see that you have not fallen for the ethanol propaganda Merrill. I should've known you had done tons of research. Let the private company come in and do the dirty work and save the city's money for more important already existing infrastrucure repair/maintenance.

Godot 9 years, 1 month ago

"This commission is bogus as the developers and homebuilders have the commission in their pockets!"

Ummm, this was done before the new commission took office. Where were Rundle, Schauner and Highberger on this one?

LloydDobbler 9 years, 1 month ago

Merrill - I agree with you that ethanol is not a good long term option. The plan involved an alternative energy research component. The idea was that Lawrence could take advantage of the short term ethanol "boom" while also contributing to finding a long term alternative energy solution. And there are methods of production that limit emissions substantially.

There are almost never perfect answers, but I think this one comes close.

OnlyTheOne 9 years, 1 month ago

You have got to be kidding me! What is wrong with the leaders of Lawrence? They don't want someone to come in and clean up the property nor do they want the jobs that would be generated in the cleanup nor operation of the plant! What they'd rather do is sit on their duffs while any contamination that is present gets more firmly entrenched! Or is it that the kickbacks weren't big enough? RECALL RECALL RECALL Get them goofballs out of there!

monkeywrench1969 9 years, 1 month ago

Does anyone know how they would assess a tax on the product which would be produced at an ethynol/bio fuel plant.

I know retail has sales tax, how is this form of product accessed for taxing.

Frederic Gutknecht IV 9 years, 1 month ago

What do we know about this deal? I think ethanol is a mighty, mighty scam. Was the eth plant going to receive its righteous due for saving us and NOT have to clean up the site? Who knows? Does anybody KNOW? I hate ethanol. Who sees ethanol as any kind of salvation? It's not necessarily a good plan to praise the ethanol gig. There is little benefit from this "technology" so where's the plus that has been negated? Pay more for food and less for gas? We don't have enough information to really comment...but thanks for the faux opportunity~)

ilikestuff 9 years, 1 month ago

How about making this a children's park! From the photo there are all sorts of things to do, water features, big round things. Kids dig circles. How about it?

Thats_messed_up 9 years, 1 month ago

Booger, Rundle, and Schauner enough said!!!!!!!!!!

oh wait--F'n IDIOTS!!!!!!!!! now enough said. Lawrence is soooooooo poorly run and behind the times. I think a random number generator COULD do a better job. Vote NO on the school tax raise!!!!!!!

Brian Conrad 9 years, 1 month ago

How about the CITY leaders paying to clean up the eyesore ! FIRST THING PEOPLE SEE AS THEY COME TO LAWRENCE! CLEAN THIS CRAP UP NOW.

kansasredlegs 9 years, 1 month ago

"city leaders have had concerns about whether a private company is best suited to handle the environmental cleanup of the property that has been contaminated by years of fertilizer spills."

Years of fertilizer spills, contaminated soil. Where the heck was our government leaders on that one. The City and County just stood by while all those "spills" and "contamination" were happining.

Good try Dave. Just say the City wants the property and is not going to let a private company have it. However, I certainly believe that a private company would and could do a much better job of cleaning up the site. Oh, by the way, the last time I looked at the City's personnel roster, I didn't see anyone qualified to clean up "chemical spills and contamination."

Won't this mean that the City will have to hire a "private company [which may not be] best suited to handle the environmental cleanup of the property that has been contaminated by years of fertilizer spills." City leaders both elected and appointed speak out both sides of their a.......

As for a trust fund being depleted, I guess you win there since after the City goes through the entire bankruptcy trust fund the City can dig deep into residents pockets and fund all that clean up for turnover to some local private company for development.

LloydDobbler 9 years, 1 month ago

Here are a few points:

1) Ethanol isn't a good long term solution, but it's better than having the property sit idle with no environmental cleanup. That's why the deal had provisions for state of the art controlled emissions and a research initiative on alternative fuels. As far as the taxes are concerned, it would have been taxed just like every other business and could have generated a great deal of tax revenue.

2) The ethanol/biodiesel complex would have only taken about 50 acres leaving at least 250 acres open for development. Plans were underway to bring in wet lab space, life science and energy research developments

3) Yes, the current site is an eyesore, but that eyesore was one of the biggest tax base creators in Douglas County for many years and helped to build many of the roads and schools in our fair city. It was a tragedy that Farmland went bankrupt, but it's a bigger tragedy that this land has set vacant for so long.

4) Most of the contamination happened long before there were any environmental regulations or even a recognition of the long term impact of such spills. The City, while not being very proactive currently, can't be held responsible for things that happened 30 years ago prior to most of the major EPA regulations.

Godot 9 years, 1 month ago

max1 wrote: " if the current commission was of a different mindset than the former one, they could have invited IRG back."

From the article:

"Not all city commissioners were aware of the previous offer. The proposal was made before City Commissioners Rob Chestnut and Mike Dever joined the commission following the April 2007 elections. Dever said he wasn't aware of IRG's interest in the site, but said he definitely had an open mind about considering proposals from the private sector. He also said he would be open to an ethanol or biodiesel plant locating in the city."

Looks like Dever and Chestnut had nothing to do with this decision, and did not even know about the interest IRG had shown in the past. Finger points to Manager David Corliss, 1) for not keeping the public informed, and 2) for not providing very pertinent classified background information to new city commissioners.

It is very clear to me where the problem rests with this very troubling turn of events.

Godot 9 years, 1 month ago

The use of the term "classified" to define information the city posseses, but hides from the public, about businesses expressing interest in Lawrence was tongue-in-cheek.

redneck 9 years, 1 month ago

Yes, ethonal may not be "THE" answer. I "WOULD" rather give my money to the Kansas economy than the region of the world that produces the most terrorists. Ethonal has been around for over 20 years and it is not going to go away anytime soon. Oh yea, those 200 good paying jobs might take employees away from the mom-and-pop business that don't pay didley and give their employees zero benefits. My bad! Or maybe Lawrence just doesn't want it in their back yard. How many Lawrencians do you suppose drive to KC every day for work? It must be quite a few from how many cars are headed towards KC in the mornings on K10. That's it! Burn all fuel that you can, but don't help produce any of it. And for God sake, make sure to raise our taxes through the roof to pay for the clean up rather than let some company pay for it. Like Forrest Gump says, "Stupid is as stupid does".

jayhawklawrence 9 years, 1 month ago

Ethanol is bad. It is a hype driven boondoggle. It will drive up food prices as it increases the demand on supplies. You are already experiencing this when you go shopping. It is being used as a political tool to drive up farm prices.

New studies coming out are showing that it takes more energy to produce ethanol than previously thought. There is a major drawback on ethanol taking place across the country as people are starting to realize that it is not a good deal. Contracts are being canceled for equipment to build new plants.

You guys that are blasting the city commission over this are just plain wrong. Time for you to go out and read some books and get educated.

It is a VERY good idea to be cautious about the clean up of this site as it may have hidden and very expensive clean up issues. Imagine if we found out we have a major environmental disaster on our hands. How about paying for that one.

No, I don't work for the city.

jayhawklawrence 9 years, 1 month ago

What we are missing is a diverse industrial base. Therefore, we need to have industrial area available for small, medium and large industries, not another processing plant.

redneck 9 years, 1 month ago

Yes, food prices will increase but the Government (that is our money since we pay taxes/not aware of any books that explain this concept) may not have to pay out all that money if farmers can turn a profit on their own. And don't give me this BS about it costing more than shipping crude from the middle east. Do you have any idea how much fuel those barges burn? You can bet they don't get 40 miles to the gallon. They burn thousands of gallons an hour. I don't have to read any studies to figure that one out. And if that turns out to be a major environmental disaster, why do we want Lawrence to pick up the tab? BTW, I graduated for the School of Common Sence.

redneck 9 years, 1 month ago

I forgot. How about being interested in any business that wants to take liability for cleaning up the mess and bringing 200 decent paying jobs to town????

redneck 9 years, 1 month ago

This planet has experienced global warming in the past. Ever heard of the Ice Age? I think it has warmed up a little since then. I do believe that we are experiencing global warming, but my question is do we really know what is causing it? I'm not convinced that mankind is as smart as we think we are. Some people are trying to scare the crap out of everybody, just so we will conform to their ideas (global warming). Yes, conserving energy is another great idea. Ethonal is good for Kansas and last time I checked Lawrence is still in Kansas. Ethonal is NOT the solution, but I believe that It may be a stepping stone and lead to other renewalable energy resources. I don't believe that simply lowering fossil fuel usage by itself is the answer either. We have got to come up with an alternative fuel. Wouldn't it be nice if people started moving back to Kansas instead of leaving? Kansas having a great economy will benefit everybody.

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