Memorandum

City of Lawrence

TO:	Mayor and City Commissioners
FROM:	City Manager David L. Corliss
Date:	November 26, 2008
RE:	Next steps in City offer for former Farmland property

The attached briefing memorandum from Bill Ford provides a good summary of recent activity on the former Farmland property.  A number of the environmental regulatory requirements for the property have been solidified in recent months as the assessment of the property is finalized.  Additionally, as the memorandum indicates the City has been in communication with the environmental regulatory agencies to determine the requirements for possible purchasers of the property which essentially take the form of a contract between these agencies and the new property owner. For example, we have reviewed a draft consent order from KDHE which any purchaser would be required to execute setting out a number of responsibilities imposed on the new property owner.

The community’s need for adequate locations for new employers remains strong, and a number of our land use policies indicate the appropriateness of the redevelopment of the former Farmland property.  Evaluation of possible City acquisition of this property continues to reflect a balancing of several interests:  the possible liability risks associated with clean-up responsibilities and costs associated with infrastructure development versus the community need for additional industrial space to provide better opportunities for employment and tax base growth.   As the liability risks have been clarified with the finalization of assessments on the property it is easier to weigh these competing interests.

A City offer on the property to accept the liability for clean-up on the property – coupled with access to most of the remaining trust funds and agreements with the environmental regulatory agencies setting out those responsibilities is proposed as the new offer to proceed in the bankruptcy proceedings.  This offer would not cap the City’s potential liability for clean-up of the property.   As further outlined in the attached memorandum, we believe we can learn relatively quickly whether this offer is acceptable to begin the auction process and get the property transferred to a property owner who will maximize its use for the community.  If the property proceeds to auction, the likely bidding scenario is that bidders – including the City – will bid amounts indicating how much of the remaining trust funds shall be retained by the bankruptcy trust and how much will be retained to fund the environmental remediation requirements on the property.

Additionally, the City is ready to proceed with the unilateral annexation process.  The attached service plan has been prepared.  We will schedule the necessary hearings before the Planning Commission and Douglas County Commission in the coming weeks.