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U.S./Kansas Propose Landmark Property Transfer At Sunflower Ammunition Plant

GSA #9693

June 14, 2000
Contact: Blaine Hastings 253-931-7550

Washington, DC -- The U.S. General Services Administration (GSA) announced today a conditional agreement to transfer the 9,065-acre former Sunflower, Kan., Army Ammunition Plant in Johnson County to the Kansas State Projects Development Corp., a Kansas government corporation.

The announcement was made by Blaine Hastings, the GSA project manager and Clyde Graeber, Secretary of the Kansas Department of Health and Environment, who plan to hold a news conference tomorrow.

"This agreement represents a landmark public/private partnership, demonstrating the ability of inter-governmental cooperation to provide for the redevelopment of 9,000-acres of government surplus property along the vital, K-10 Corridor in Johnson County, and at the same time save taxpayers millions of dollars in environmental cleanup costs," Hastings said. "The reuse will stimulate tourism in the Kansas City Metropolitan Area and provide a model for future reuse of government surplus property."

Under the terms of the proposed agreement, the Kansas State Projects Development Corp. will convey the property to The Oz Entertainment Co., a Los Angeles-based, family entertainment company. Oz will perform and pay for the environmental cleanup, under the oversight authority of the Kansas Department of Health and Environment, according to the Consent Order to be issued by the state environmental agency. However, the Army will conduct the cleanup of those portions of the plant that pose risks involving explosives. Ultimately, the Army remains responsible to ensure proper cleanup of the entire facility.

Oz has agreed to spend $37 million to obtain an approved, independent contractor to complete environmental remediation. The company will start to develop a theme park, resort and technology business complex on the property, while still performing the environmental cleanup. The company also has agreed to donate nearly 2,500 acres of the property for educational, historic preservation, park and recreational uses.

Oz has assembled a $300 million, financial assurance package to guarantee completion of the environmental cleanup. The package includes performance, payment and surety bonds, environmental project cost-cap insurance, and pollution legal liability insurance policies.

"The Sunflower Army Ammunition Plant is another example of the U.S. government's continued divestiture effort, which provides opportunities for communities to reuse property the government no longer needs," said Hastings. "The government's transfer and remediation of these properties provide those opportunities. GSA is working to transfer a number of similar properties, nationally."

Now that GSA and the Kansas Department of Health and Environment have agreed on the structure of the transaction, the next step is to present the proposed agreement to the Johnson County Commission, the Kansas Development Finance Authority and Kansas Governor Bill Graves for approval. The Army will send a Covenant Deferral Request, including a Finding of Suitability for Early Transfer, to Governor Graves. The Kansas governor must approve any property being transferred before completion of environmental cleanup. Once he approves the transaction, it will then be submitted to Congress for review.

Copies of the proposed agreement will be available for public review at all Johnson County libraries and posted under "Special Projects" on the GSA website at Http:// property/.

Graeber and Hastings will be available to answer questions at the Sunflower Army Ammunition Plant, Desoto, Kan., Thursday at 11 a.m. A joint Kansas Department of Health and Environment and GSA public briefing to discuss the terms of the proposed agreement in principle will be scheduled in the near future.

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