Archive for Thursday, February 3, 2005

Partners selected SFAAP developer

February 3, 2005

The Johnson County Commission agreed Thursday to formally recognize partners Kessinger/Hunter and Co. and International Risk Group as developers of the Sunflower Army Ammunition Plant.

The developers' attorney John Petersen said the agreement would allow the partners, now known as Sunflower Redevelopment LLC, to move beyond the memorandums of understanding negotiated with various state and federal agencies to contracts needed to close on the property.

"We are at the precipice of seeing the hopes and dreams of turning that plant into productive property come to fruition," he said.

A summer closing was now anticipated, said Petersen, who had previously predicted closings in May and October 2004. The partners have said they will develop the property in accordance with the county's master plan, which calls for a research park and a mix of residential, commercial and light industry uses.

It was the third time in the last year commissioners have given Kessinger/Hunter recognition as developer of the closed 9,065-acre plant south of De Soto. In January 2004, commissioners agreed to limit county negotiations to Kessinger/Hunter with the naming of the Kansas City, Mo. based real estate company the potential developer of Sunflower. In June 2004, the county approved a so-called pre-development agreement with Kessinger/Hunter and its new partner IRG, a banking, insurance and risk management firm with experience in the redevelopment of closed military installations.

The latest county designation was more meaningful because of federal legislation passed in October that allowed a developer chosen by the county to negotiate the direct purchase of Sunflower, Petersen said.

Kessinger/Hunter started its effort to acquire the plant in June 2002 under existing federal statutes governing so-called early transfers of properties like Sunflower. That process would have required the county to first take title of the plant and then immediately sell it to the developer.

The direct purchase process took the county out of the plant's chain of title and any liability that might bring with the plant's cleanup, Petersen said.

De Soto Mayor Dave Anderson and others voiced concern that language in the federal legislation would allow the designated developer to negotiate a transfer that wouldn't include public benefit transfers of Sunflower property approved by various federal agencies. Those include transfers of the plant's water treatment facility to the city of De Soto and land to the De Soto school district, the Johnson County Parks and Recreation District, Kansas University and Kansas State University.

Petersen, who has dismissed that view in the past, told commissioners recent negotiations should remove that fear. The partnership now envisioned the public benefit transfer of 2,577 acres would take place simultaneously with the closing, he said. Satisfactory agreements would have to be in place before the partnership got title to Sunflower, he said.

Another change that resulted from recent negotiations with the Army was an agreement to privatize Sunflower's entire environmental cleanup, Petersen said. Previously, it was assumed the Army would be responsible for burning structures possibly contaminated with explosives from the manufacture of rocket propellant, while the developer would clean up chemically polluted ground.

"Our new goal is the complete cleanup of Sunflower in eight years after closing," he said. "That is significantly more expeditious than previously envisioned."

It would take an estimated $150 million to clean the property and another $50 million to purchase the bonding and insurance guaranteeing the plant's cleanup, Petersen said.

While the majority of commissioners praised the possibility of seeing Sunflower developed and cleaned at no cost to local taxpayers, two said the county process of selecting Kessinger/Hunter remained a concern.

Commissioner Ed Petersen called that process "truncated," which limited public involvement.

"I'm troubled somewhat by history and how we got to where we are," he said. "This time last year we were told we had to have an abbreviated search (for a developer) because there would be a May 1 closing.

"Today I note, we are asked to designate a separate entity that is 50 percent Kessinger/Hunter and 50 percent IRG."

But Peterson said he would vote for the designation despite his reservations because of the progress made in the transfer.

Commissioner John Toplikar, who represents the western Johnson County region surrounding Sunflower, was the lone dissenting vote, arguing that the selection process should have included involvement of a still-unnamed Sunflower Redevelopment Authority, which state legislation gave broad powers in selecting and evaluating a developer.

"There was a chance to get the public involved, and that didn't happen," he said.

Chief county legal counselor Don Jarrett said the authority would be named shortly after closing. It would act as a planning commission, concerned with development standards and broad planning issues rather than zoning, he said.

Commission Chair Annabeth Surbaugh said that was as it should be. Selecting a developer was properly left to commissioners accountable to voters, she said.

Before the meeting, Surbaugh said she hoped the latest designation meant the transfer was nearing completion. But she said 13 years of dealing with Sunflower had taught her to be cautious.

"Yes, it does make me hopeful, however I've been hopeful before," she said. "What I've found out is when you deal with the federal government -- the Army, the EPA -- it's never going to go as quickly or as fast as you would want."

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