De Soto, Kan.- Tax incentives could soon support new development at the former Sunflower Ammunition Plant in De Soto.
On January 6, the De Soto City Council will host a public hearing to get feedback on the creation of a redevelopment district to cover roughly 6,000 acres of the former plant.
In November, the city council approved the annexation of approximately 6,009 acres of land within the former Sunflower Army Ammunition Plant north of 127th Street. The council also unanimously approved a pre-development agreement with Sunflower Redevelopment LLC (SRL) detailing new plans for the northern portion of the Sunflower property.
Agreement outlines the developer’s intent to request the creation of a Tax Increment Financing (TIF) District to address blight on the existing property.
In exchange for the tax incentive, SRL agrees to give the city the rights to the utility corridor along Sunflower Road and fund public improvements using TIF reimbursements.
The developer claims the land suffers from blight left over from its previous use as an ammunition plant. The pre-development agreement lists the cost to fully remediate the blighted conditions at approximately $200 million.
The TIF district will be broken down into four project areas. The first area of the development would involve 1,000 acres in the northeastern portions of the site to be developed for manufacturing and warehouse uses.
The remaining 5,000 acres still need remediation work to be done before it will be ready to develop.
If approved, the TIF would capture 100 percent of increased property taxes on the site for a 20-year period. That money would be used to build infrastructure within the first project area and fund clean up efforts at other locations within the TIF district.
The proposal calls for 20 percent of the TIF to be earmarked for public infrastructure expenses, and the remaining 80 percent be used for private development expenses.
Pending approval from the city council, the city would also issue Industrial Revenue Bonds (IRBs) to allow for a sales tax exemption on costs to construct, furnish and equip the development.
Under the pre-development agreement, if the TIF district is not formed, the first phase of the plan is not approved, or the master development plan is not executed by May 22,2022, the city is obligated to de-annex the property.
If the TIF district is approved the developer will submit specific project plans for approval. One conceptual plan for the property as a whole shows the developer has tentatively planned for
- 1,033 acres of warehouse and industrial development
- 130 acres of commercial and mixed-use development
- 13 aces for a planned hotel or multi-use development
- 2,493 acres of planned residential to the west
- 1,703 acres of planned residential to the east
- 550 acres dedicated for use by the University of Kansas (KU)
History of the plant
The Sunflower Army Ammunition Plant opened in 1943 as the world’s largest powder and propellant plant. The plant produced jet propulsion powder and a variety of ammunition through World War 2, the Korean War and the Vietnam war.
Production at the plant stopped in 1992, and the 9,000 acre site was declared an excess of the Army’s needs in 1998
In 2004, Congress created special legislation to transfer the property to a private developer to be selected by the Johnson County Board of Commissioners.
In August 2005, the Army transferred the former ammunition plant to Sunflower Redevelopment, LLC (SRL). In connection to the transfer the Army entered into a remediation agreement with SRL and the Kansas Department of Health and Environment (KDHE).
The production of ammunition left behind nitrates, lead, heavy metals, asbestos and explosive residue in buildings, foundations, groundwater and soil. According to city documents, currently there are about 2,200 buildings and foundations of the original 5,000 structures that remain in deteriorated conditions on the property.
Before the property was transferred to SRL, the Army performed a number of studies to identify the extent and types of pollution at each of 92 production areas on the property. Those studies were used as the basis for budget estimates to clean up Sunflower.
The Army committed $109 million to cover the cost of removing hazardous materials from the site based on those studies; however those estimates were different from the standards of KDHE and the Environmental Protection Agency (EPA).
The cost to complete the cleanup of Sunflower increased to approximately $248 million. According to the pre-development agreement, additional federal funds have been secured to assist with cleanup at the plant. The Army anticipates the work to be complete by 2026.
The De Soto City Council will host a public hearing on creating a TIF district on the former ammunition plant property on Thursday, January 6 at 7 p.m. If the approval is granted, the city council would review a master development agreement for the proposed site in March. The master development agreement must be approved before construction on the project can begin.