Memorandum

City of Lawrence

TO:	Mayor and City Commissioners
FROM:	City Manager David L. Corliss
CC:	Toni Wheeler, Director of Legal Services
Date:	March 18, 2010
RE:	March 23, 2010 Study Session on proposed acquisition of former Farmland facility

At your March 23, 2010 study session, we will discuss the proposed acquisition of the former Farmland facility.  Staff is favorably recommending with proceeding with this acquisition based on several contingencies which we believe can be met in the coming weeks.  The general outline of the acquisition is as follows:

• The City will acquire the 467 acre site without a purchase price paid by the City.

• The City will receive at closing $8.5 million from the current property owner, the Farmland Industries (FI) Kansas Remediation Trust to be used for remediation.

• The City will, as condition of closing, execute a Consent Order with the Kansas Department of Environment (KDHE).  Essentially, the Consent Order will place the liability for the necessary environmental remediation of the Farmland site on the City.  If the City successfully executes the remediation as outlined in the Consent Order, the City will not have any further environmental liability for the known site conditions from KDHE for the site.   The City will also receive a statement from the Environmental Protection Agency (EPA) concerning the limits of the City’s obligations on the Farmland property.

Remaining Issues

There are a number of remaining issues which need resolution to proceed to closing the acquisition, including:

1) Finalize the acquisition agreement, a current draft of the agreement is provided.

2) Finalize the Consent Order with KDHE, a current draft of the order is provided.

3) Finalize the EPA letter.  Discussions concerning possible content are on-going.

4) Any necessary Trust document alterations are left with the Trust to finalize in order to proceed to closing.   These alterations are also under draft stages.

5) Any other traditional necessary closing items such as title insurance, etc.

Staff and counsel believe that these remaining items can be effectively moved toward resolution in the coming weeks, pending City Commission approval.

Frequently Asked Questions

Staff has prepared an FAQ for this issue in anticipation of questions concerning this acquisition.  Staff also hopes that a study session format will generate additional questions which can receive an appropriate response.