The clock is now ticking on a pair of proposed multi-million dollar economic development projects in Lawrence.
Berry Plastics and the Bowersock Mills and Power Co. on Monday were awarded more than $30 million worth of bonds related to the federal stimulus.
But now, both projects must find buyers for the bonds by about Oct. 1 in order to use the special financing, which provides the companies access to money at lower interest rates.
“It is going to be a significant challenge, but we’re hard at work on it,” said Sarah Hill-Nelson, a co-owner of Bowersock.
Bowersock is seeking to sell the bonds to finance an approximately $20 million project to build a new hydro-electric power plant on the north banks of the Kansas River.
Berry Plastics — which operates a drink cup manufacturing plant in Lawrence — wants to use the bonds to pay for a 600,000-square-foot warehouse and distribution center that would cost about $21 million to develop.
The Berry project may be reaching a critical stage on other fronts as well. Steve Brown, a Berry executive overseeing the expansion plans, previously said the company largely had settled on Douglas County as the site for the new facility. On Monday, though, Brown declined to comment on whether the company was now looking at sites outside Douglas County.
The company — which hoped to have a site selected in March — has suffered a series of odd delays on the project. The company has expressed interest in building the warehouse on a portion of a 150-acre site near the Lecompton interchange on the Kansas Turnpike.
But that property became embroiled in a lawsuit between the property’s owners — a group led by Steve and Duane Schwada and Russell and Penny Tuckel. In July, the Tuckels won a $2.95 million courthouse auction to take over sole ownership of the property. But Berry largely had been negotiating with the Schwada group about the property.
Penny Tuckel said last week that she and her husband are open to Berry developing on the property. She said they have met with Berry officials and city and chamber leaders about the property.
But a bigger issue may be a pair of lawsuits filed by neighbors of the site. Both those suits are expected to take more than a year to resolve. Economic development leaders have expressed concerns that the lawsuits will make it difficult for Berry to move forward on the site soon enough to take advantage of the federal bonds.
A representative of the neighborhood group had expressed optimism that the lawsuits may be dropped if the Tuckels were willing to work more closely with the neighbors on developing the property. The neighbors are seeking the property to be zoned to a lesser industrial district that would still allow warehouses but would prohibit more intensive industrial uses.
On Monday, though, neighborhood leader Dave Ross said talks with the Tuckels had not gone real well.
“Our position to him was that if he worked with us, we would consider dropping the lawsuits,” Ross said. “But that doesn’t seem to be where we are headed.”
Ross said neighbors were caught by surprise when the Tuckels began pushing down several trees on the site earlier this month. Ross said the proposal to downzone the property also hasn’t been well received.
The Tuckels did not immediately respond to a request for comment.
Local economic development leaders, though, have said they are still optimistic that the project will land in Douglas County. A site near the Budweiser distributorship along North Iowa Street also has been under consideration. Economic development leaders said other sites in the county also have begun to be proposed to Berry.
Bowersock’s plans to build a new hydroelectric power plant are facing more traditional issues.
Hill-Nelson said the company remains in negotiations with utilities that would buy the power produced at the new plant. She said the company is working with Westar Energy and also regional power pools and municipalities that run their own electric utilities.
The project did receive a preliminary license from the Federal Energy Regulatory Commission last week.
“I’m still feeling optimistic,” Hill-Nelson said. “There are still a lot of pieces that have to fall into place, but I do feel good.”
The bonds that both projects were awarded by the Kansas Department of Commerce are Recovery Zone Facility Bonds that were created by the federal stimulus program. The bonds would be issued by the city, but the city would not provide any financial backing for the bonds.
Any unused bonds in Kansas are set to go back to the federal government by Dec. 31.