City of Lawrence makes official purchase of former Farmland Industries fertilizer plant
The Farmland story
Here are some key dates in the history of the Farmland Industries fertilizer plant property on Lawrence’s east side:
1954 – Plant begins production of nitrogen fertilizer.
2001 – Plant is shut down after U.S. fertilizer market takes a downturn.
2002 – Kansas City Mo.-based Farmland Industries files for bankruptcy.
2003 – Farmland sells most of its business divisions to competitors, but there’s no taker for the Lawrence plant, which was Farmland’s oldest.
2004 – Roger Billings, an eccentric businessman dubbed “doctor of hydrogen” makes an offer to buy the plant to make hydrogen fuel cells. The deal ultimately stalls and he rescinds the offer.
2005-2010 – City and county commissioners continue to discuss the possibility of buying the property to convert into an industrial park.
June 2010 — City commissioners agree to a deal to assume ownership of the property after an agreement is reached with an Overland Park-based company that had gained a legal interest in the trust fund set aside to clean up the property. The company is allowed to keep about $2 million of the trust fund in exchange for dropping its objections for the city to take over ownership and the remaining $8.5 million that is in the trust fund.
Sept. 29, 2010 — City takes over ownership of the property.
The deal is done.
After more than five years of back-and-forth, the city of Lawrence on Wednesday officially assumed ownership of the former Farmland Industries fertilizer plant on the eastern edge of Lawrence.
City Manager David Corliss confirmed that the final paperwork was signed Wednesday to transfer ownership of the 467-acre piece of ground along Kansas Highway 10 from Farmland’s bankruptcy trust to the city.
“But really, this is just the end of the beginning,” said Corliss, who has overseen the process to gain control of the property, which has been idled since Farmland closed the plant in 2001.
Now, the work begins to convert the environmentally blighted property into a business park that city leaders hope will become a bright spot on the city’s economic development scene.
“I think in 2011 we can expect to start talking to people about locating businesses on parts of this property,” City Commissioner Mike Dever said. “We need to have a certain amount of aggressiveness with this. We’ve made an investment, and now we need to start reaping the rewards.”
Corliss said area residents should see noticeable changes on the property within the next several months. City commissioners at their Tuesday evening meeting agreed to send out a request for proposals from companies interested in demolishing the majority of the structures that remain on the site. Work likely would begin by December. Corliss said the city is optimistic that salvage companies will pay the city to take some of the equipment that is on the property.
Cleaning up the buildings and equipment at the site is just one small part of an overall cleanup effort at the property. The site has soil and groundwater contamination left over from its days as a nitrogen fertilizer plant.
As part of the deal, the city became responsible for cleaning up the environmental issues left behind by Farmland Industries. The city received $8.5 million in trust fund money that had been set aside by Farmland to clean the property. The city will not pay a purchase price for the land, but does have to pledge the taxing authority of the city to cover any cleanup costs that exceed $8.5 million.
The cleanup of the property involves pumping groundwater through an existing pipeline system to North Lawrence, where it is spread on farm fields.
City commissioners are optimistic the cleanup can be done with the $8.5 million trust over a period of about 30 years. The Kansas Department of Health and Environment has estimated the cleanup costs at $13 million to $15 million over 30 years. But the city is counting on saving money by using city crews to do much of the work that the state had assumed would be done with contract labor. The city also is counting on interest earnings and revenue from future land sales once the property becomes a business park.
Regardless, the site will take millions of dollars in public money for infrastructure improvements.
The city has included about $3 million in new debt in its 2011 budget to provide infrastructure upgrades at the site. Corliss said some of the likely infrastructure improvements include a new road that would run through the Farmland property and connect to the adjacent East Hills Business Park, and an extension of O’Connell Road to connect with 19th Street. A new traffic light at 23rd and O’Connell also is likely, although developers on the south side of Kansas Highway 10 may be asked to pay for part of that project, Corliss said.
Which projects happen first will require further City Commission discussion, but Corliss said he hopes to begin construction on at least some of the infrastructure by late 2011.
The bigger question: What companies will economic development leaders find to fill the site?
Dever said he’s optimistic that the property will be able to attract both a mix of traditional industrial projects — similar to what’s in East Hills Business Park — and new bioscience projects that could grow out of the new biosciences incubator on Kansas University’s West Campus.
“Now that we have an incubator in place, it is reasonable to expect some of these companies will one day need a place to manufacture their pharmaceuticals or their new technologies,” Dever said. “And now we’ll have a place for them to do that.”