A private company was strongly eyeing the former Farmland Industries site as a new biodiesel and ethanol production center but scrapped the plans after receiving a cool reception from city leaders.

Michael Steinle — a Lawrence resident and former environmental manager for Farmland Industries who was involved in the proposal — said the private development group that is redeveloping the former Sunflower Army Ammunition Plant wanted to buy the former fertilizer site a little more than a year ago.

But by that time, city commissioners already had expressed an interest in purchasing the 467-acre piece of property east of Lawrence to convert into a business park. Steinle said city leaders seemed closed to the idea of a private development company purchasing the site and assuming the liability of cleaning up the environmentally blighted piece of property.

“They were cordial enough, but in the end I got the very clear impression that they wanted complete control of that property,” Steinle said.

Private interest

A chief executive of the private company — Denver-based International Risk Group — confirmed that his company was strongly interested in the Farmland site and had an ethanol/biodiesel company all but certain to take 50 acres of the site.

But Patrick Riddell, CEO of IRG Environmental, said his company gave up on the project because it became too complicated to determine how to move it forward. He said the deal was unusual because the city was trying to buy the property through the bankruptcy process.

“I don’t think we have ever been in a situation where we’ve competed with a city before,” Riddell said. “We just couldn’t get a handle on how to proceed.”

City Manager David Corliss confirmed that city leaders were presented with a proposal that included a biodiesel plant. But he said city leaders have had concerns about whether a private company is best suited to handle the environmental cleanup of the property that has been contaminated by years of fertilizer spills.

“There have been a lot of environmental vendors out there who were primarily interested in making money on the cleanup,” Corliss said. “We have been concerned that would mean the trust fund set aside for cleanup would be quickly spent and we wouldn’t get the property cleaned up the way we want it.”

Mayor Sue Hack said that was her recollection of why the city didn’t express interest in the IRG proposal.

“Our responsibility is to make sure that it will be cleaned up so that we and future generations can live with it,” Hack said.

City’s concerns

Corliss also said there were concerns that a biodiesel or ethanol plant may not be the best use of the property. He said it was likely that an ethanol plant would request a large public subsidy, may not employ large numbers of people, and may produce some environmental concerns.

IRG officials, though, said the city erred in its assessment. Riddell said the company wasn’t planning on making its money through the cleanup process but rather through the redevelopment of the project. He said the company was particularly interested in the Farmland site because it thought it had a ready-made tenant for a portion of the facility in the biodiesel and ethanol center.

“It seemed like it made perfect sense because we had a tenant lined up,” Riddell said. “We thought it was a pretty clean industrial tenant that could help pay for the rest of the development.”

Riddell said his company wasn’t seeking any financial assurances from the city, but rather wanted the city to express enthusiasm for the project and no longer be a potential bidder on the property. Tax abatements or tax increment financing could have been requested in the future, but wasn’t part of what IRG was asking the city to commit to upfront.

Steinle said the alternative fuel center could have provided about 200 jobs similar in quality to the jobs that were at the former Farmland plant. He also said there would have been more than 200 acres left at the site to develop into a biotechnology business park, which is an idea the city has expressed interest in. No residential development was proposed for the site.

Moving forward

Not all city commissioners were aware of the previous offer. The proposal was made before City Commissioners Rob Chestnut and Mike Dever joined the commission following the April 2007 elections. Dever said he wasn’t aware of IRG’s interest in the site, but said he definitely had an open mind about considering proposals from the private sector. He also said he would be open to an ethanol or biodiesel plant locating in the city.

“I’d have to learn more, but at first glance, I don’t think there would be anything unpalatable about inviting a green energy provider to the community.”

Currently, city commissioners are struggling with whether to submit a bid for the property that would have the city assume full liability for cleaning up the property.

Riddell said the IRG proposal would have involved the company assuming all liability for cleaning up the property. He said the company has successfully assumed over $1 billion worth of environmental liability at sites across the country. He said the company had plenty of reasons to make sure that it wouldn’t fail in Lawrence.

“We wouldn’t take chance on having a black eye at the Farmland site when have the huge deal with Sunflower just down the road,” Riddell said. “That would be disastrous.”