Archive for Thursday, November 9, 2000

Future of Oz uncertain

November 9, 2000

Uncertainty and reassessment were the watch words after the Johnson County Commission failed to approve Oz Entertainment Companys $861 million redevelopment plan for the Sunflower Army Ammunition Plant.

"Theres a lot of uncertainty that resulted from (Mondays) vote," Commissioner George Gross said. "I dont think anybody knows whats going to happen.

"Oz has too much invested ($25 million) to walk away."

Gross and Commissioner Doug Wood twice voted to approve the plan Monday. They were opposed by commissioners Johnna Lingle and Annabeth Surbaugh. A motion by Lingle to deny the proposal resulted in the same 2-2 vote.

The commissions failure to approve the proposal was a setback to Oz because the county must OK the redevelopment plan before the state can approve a package of sales and property tax bonds that would finance the proposed Wonderful World of Oz Theme Park and Resort.

Soon after the vote, Oz CEO Robert Kory said his company would take time to reconsider its options. But he was clear on one thing X the commissions failure to approve the redevelopment plan will not kill the project.

"Were definitely not giving up," he said. "We have a number of options, but I think it only fair that, over the next couple of weeks, we try to consider what can happen here."

Kory didnt say what the options might be, but the company might choose to bring the same or modified redevelopment plan back before the commission in January. Lingle, who was defeated by Shawnee Republican Susie Wolf in the August primary, will leave the commission Jan 8.

Wolf did not return phone calls, and her position on Oz and the approval process are among the many unanswered questions surrounding Oz and the future of Sunflower. Her position may not matter, because it was unclear if the commission would consider the Oz proposal again.

Soon after Mondays vote, Gross said he wouldnt "work to make that happen." Tuesday, he said he didnt know if further consideration was appropriate given the "inordinate" amount of time the commission and county staff has spent on the Oz proposal over the past two to three years.

GSA wont wait

Gross said he supported the Oz proposal because it guaranteed Sunflowers environmental cleanup to residential standards, would bring tourism and jobs to Johnson County and give the county control of future development at the plant.

"Im afraid the county may have lost its chance to control what happens out there (Sunflower)," he said Tuesday.

Should Sunflower property that is transferred to private hands stay unincorporated, the county could control development through zoning. But Gross said the countys effort to create a planned community at Sunflower is now jeopardized.

In 1998, the commission adopted the Sunflower Community in a Park comprehensive plan that calls for residential, light industrial, commercial and business park development.

"The land-use plan isnt worth anything without a developer," he said. "If they (U.S. General Services Administration) sell Sunflower property for heavy industry, were stuck."

Blaine Hastings, a realty officer with the GSA who is handing Sunflowers transfer, said Mondays tie vote left federal officials confused.

"We would have preferred a 3-1 one way or the other," he said. "We dont have a plan set."

The federal government is actually negotiating the transfer with the Kansas Development Finance Authority not Oz, Hastings said. The GSA will now attempt to find out what action the state agency is considering, he said.

A statement released by KDFA President Jack Brier suggests the agency will have little to tell the GSA. According Briers statement, his agencys role is dependent on Johnson County approving Ozs redevelopment proposal.

"KDFA would fulfill a role as a financing mechanism for the transaction, and at this point there is no transaction to finance," the statement read. Agency officials would not comment further.

The state may be patient, but there is pressure on the Army and GSA to move on, Hastings said.

"If everybody is sitting on their hands, we wont," he said. "We will dispose of the property."

The GSA will try to work with the county when disposing Sunflower land, but must also consider its duty to taxpayers to get the best deal possible, Hastings said.

Before voting Monday, Surbaugh read from correspondence she has received over the past few weeks concerning Oz. One e-mail she read suggested that the GSA, county and state open up the bidding for Sunflower by seeking request for proposals.

That is one option the GSA is considering, Hastings said. But he said the federal process might not include the financial package of sales and property tax breaks the Kansas Legislature has made available to help develop and clean Sunflower.

"There is not a big market for that kind of thing," he said.

WILL DESOTO BECOME INVOLVED?

There has been speculation Oz would turn to DeSoto if the company didnt get approval from the county. In January, former DeSoto city attorney Mike Howe drafted legislation that would have given state municipalities the right to issue sales tax revenue bonds within redevelopment districts. The bill was withdrawn in the face of widespread opposition among Kansas legislators.

Prudden first replied "no comment" when asked Tuesday if Oz might be considering another such attempt. He then said he was unaware of such an effort.

Rep. John Ballou, whose district includes Sunflower, said he expects Oz to come forward with something like the January proposal in the wake of the companys latest setback.

"I would almost be disappointed if they (Oz) and DeSoto arent back with something," the Gardner Republican said.

Ballou tried to rescind the Sunflower redevelopment enabling legislation after Howes bill became public. The effort was defeated by a coalition of Republican Oz supports and labor-backed Democrats.

The effectiveness of that coalition makes it had to predict the outcome of any new Oz request, Ballou said. But, he is confident legislators will attempt to rewrite part of the enabling legislation. Ballou said many lawmakers dislike that part of the legislation that allows developers to use sales taxes collected over what is needed to retire state-issue bonds to pay off privately placed debt.

The county commission only learned of that "cash trap" during an Aug. 31 work session when Wood asked Oz financial advisor Ken Becker to clarify Ozs proposed uses of sales tax revenue.

Surbaugh said she voted against the Oz proposal because of the way the county commission learned of the cash trap. It made her wonder if Oz was withholding more information, she said.

"There will always be unknowns in a project of this magnitude. But I want them to be true unknowns, not just unknowns I dont know about," she said.

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