Brief(1)
Sub. for S.B. 675 would establish a mechanism for creating a redevelopment district within federal enclaves in which tax increment financing (TIF) may be used to finance "projects of statewide as well as local importance." Specifically, the federal enclaves in the bill refer to the Sunflower Ammunition site in Johnson County and the Parsons Ammunition site in Labette County. The U.S. Army would like to dispose of both these sites.
The Sunflower Ammunition site would be considered an alternative site to an area under consideration in Wyandotte County for the development of the Oz Theme Park and Resort. The bill would authorize the Kansas Development Finance Authority (KDFA) to issue bonds to finance the project because the project would be developed within a federal enclave outside city limits; existing law authorizes only cities to issue bonds for projects of statewide as well as local importance (e.g., the Oz project). KDFA would be authorized in the bill to enter into a lease-purchase financing arrangement with the developer.
The procedures for establishing the redevelopment district and redevelopment plan would be essentially the same for projects within federal enclaves as for any project that may be developed within a city under existing law. However, the redevelopment district for the project in Johnson County could not exceed 2,500 acres. As is the case under existing law, the Secretary of Commerce and Housing would have to designate the redevelopment project as being of statewide as well as local importance as a precondition for any bond issues. The bill also would require the Council on Travel and Tourism to make such a finding. To be designated as being of statewide as well as of local importance, a project at the Sunflower Ammunition site would be subject to the same capital improvement commitments (at least $300 million) and employment commitments (at least 1,500 positions) as would be required of a project within the redevelopment district of a city under existing law. For a project at the Parsons Ammunition site, developers would have to commit to at least $5 million in capital improvements and employment of at least 150 positions.
As is authorized under existing law, this bill would allow local transient guest tax, local sales tax, and state sales and use tax revenues from the redevelopment district to be pledged to repay any bonds (sales tax and revenue or STAR Bonds) that finance a project of statewide and local importance. Bonds for this type of project could be issued for no more than 20 years (the same as under existing law). For purposes of redevelopment projects in federal enclaves (Johnson County or Labette County), the following taxes would be levied or collected within the redevelopment district to repay the bonds issued by the KDFA for the project:
The revenues could only be levied or collected for the duration of the bond repayment but could not exceed 20 years after establishment of the redevelopment district (whichever occurs earlier).
The bill would authorize the enlargement of an enterprise zone by the Unified Government of Wyandotte County/Kansas City, Kansas for the Oz project even if the enlargement extends beyond Kansas City's boundary. Under existing law, the original location for the Oz project is an enterprise zone located completely in Kansas City. The bill would require the developer of the Oz project to repay, within one year of the commencement of project construction, $1.5 million to a local government for any direct and indirect investments made in the project. In addition, the bill would clarify that the state, local units of government, and the KDFA would not assume responsibility for any environmental remediation required to be performed in any redevelopment district within a federal enclave.
The bill would take effect upon publication in the Kansas Register.
Background
The introduced version of S.B. 675 was requested by Skip Palmer, President, Wonderful World of Oz. Mr. Palmer advised the Senate Commerce Committee that the Oz Entertainment Company had been considering the site of the Sunflower Ammunition plant as an alternate site to the originally identified area in Wyandotte County in light of that area's close proximity to the planned NASCAR speedway with its associated noise and traffic. The Sunflower Ammunition site consists of 9,065 acres which became available due to a decision of the U.S. General Accounting Office to sell that property and 13 other sites in the country. The procedure for disposing of excess property recognizes conveyance for specified public uses of up to a 100 percent discount as having priority over negotiated sales to eligible public entities as would be permitted in the bill. Of 9,065 acres comprising the Sunflower Ammunition site, 1,500 are considered to be in pristine condition. The Senate Committee on Commerce was informed that the site is contaminated by nitrates and asbestos; however, the Army is liable for remediation.
According to information furnished to the Senate Committee, final site selection for the Oz project is scheduled for May 1998 and the grand opening of the theme park is scheduled for May 2001. The total project is estimated to cost $585 million. Of that total, $190 million would be financed through STAR Bonds.
Other conferees included: Gary Anderson, Gilmore and Bell, who reviewed the bill and proposed amendments to clarify intent; Dick Murray, Vice-President and Manager, A. G. Edwards & Son, Inc., who explained STAR Bond financing for the Oz project; Bill Caton, President, KDFA, who addressed KDFA's role in the bill; and Gary Sherrer, Secretary of Commerce and Housing, who outlined the process of disposing of the excess property.
The Senate Committee of the Whole made a technical amendment.
The House Committee of the Whole amended the bill to: (1) limit the size of the redevelopment district in Johnson County to 2,500 acres; (2) require the Council on Travel and Tourism to make a finding that the project is of statewide as well as local importance; and (3) require the developer to reimburse a local government for any direct and indirect investments made in the project.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.