[CPEO-MEF] SFAAP: Kansas agreement outlines Oz land cleanup responsibilities

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http://www.kcstar.com/item/pages/home.pat,local/37748998.614,.html

Kansas agreement outlines Oz land cleanup responsibilities
By GRACE HOBSON - The Kansas City Star
Date: 06/14/00 22:23

Kansas environmental officials released an agreement late Wednesday that
outlines the Oz Entertainment Co.'s responsibilities for cleaning up
pollution at the Sunflower Army Ammunition Plant near De Soto. 

Under the terms of the agreement, the Oz company would spend $37 million
over 12 years to clean up the 9,065-acre site where it wants to build a
theme park. In addition, the company would buy insurance to guarantee the
cleanup is completed. 

Under certain conditions, the cleanup could be transferred to an
irrevocable trust that would finish the job. 

"The trust is important because it assures that the cleanup continues on
schedule, irrespective of the success or failure of the Oz Entertainment
Company," said company chairman Robert Kory. 

The agreement requires Oz to clean up contamination already known at
Sunflower, plus any additional pollution the company discovers there. 

The company could face fines of as much as $4,000 a day if it

fails to meet deadlines yet to be determined. 

The company must clean up the acreage to standards that fit with Johnson
County's land-use plan for Sunflower. The plan calls for a mix of
residential and commercial development. 

Also, Oz must pay -- in advance -- the Kansas Health and Environment
Department costs for overseeing the cleanup, including payroll,
consultants, travel and lab expenses. 

Oz and the Kansas Department of Health and Environment reached the
agreement, called a consent order, this week. Clyde Graeber, secretary of
health and environment, said he will not sign the order until Oz has
approval for its theme park project and closes on the Sunflower site. 

"This is just the beginning," Graeber said of the consent order. "It's a
very important beginning, but it's still the beginning." 

Also Wednesday, federal officials announced they had reached "conditional
agreement" with Oz to transfer the Sunflower land to the state through a
development corporation. The corporation then would transfer the land to Oz. 

Kory, the Oz chairman, said he was delighted the negotiations had been
successfully concluded after two years of work. What was time-consuming,
Kory said, was an extraordinary effort by attorneys inspecting every detail
of the transaction so that "in the end the land gets cleaned up, it's safe,
and there's no question about it. 

"I'm making a commitment to clean this up," Kory said, adding that the
agreement would not be terminated until the land is clean. "If there's some
problem with us, the trust takes over." 

The transfer and the cleanup plan must be approved by the Johnson County
Commission, the Kansas Development Finance Authority and Gov. Bill Graves
before the land deal can close. 

The goal, according to the agreement released Wednesday, is to have the
company spend 12 years cleaning up the land; to have the company clean up
acreage it plans to transfer for public use, such as park land, as soon as
possible; and to clean up the land Oz plans to develop for its theme park
for $1.5 million or less. 

The agreement sets out penalties for Oz's failure to comply with the order.
For example, the fines for failing to meet cleanup deadlines would be $500
a day for the first seven days; $2,000 a day for the eighth through the
21st day; and $4,000 a day after that. 

The order also lists behavior by Oz that would trigger a process that could
lead to the trust's takeover of the work. 

Triggers include halting cleanup for more than three months without cause;
failing to pay the department's costs for overseeing the cleanup; and
failing to clean up the land to standards. 

If the work were transferred to the trust, costs would be paid by the Oz
company's $45 million surety bond. If that money were spent, other insurance

, required by state law, would be tapped to cover the trust's cleanup costs. 

The company would buy a policy capped at $100 million to cover
unanticipated costs and any claims against the company; $100 million in
pollution liability insurance to cover unexpected contamination; a
performance bond to guarantee the contractor's work and a payment bond to
guarantee subcontractors get paid. The policies must paid for before the
land deal is closed. 

Once the consent order is signed, Oz must adhere to its provisions no
matter what happens to the company, the document states. Any future owners
of land at Sunflower also must comply with the agreement until the cleanup
has been completed or the order terminated. 

While Oz would be responsible for the cleanup, the Army is not off the
hook. According to the order, if Oz has spent more than $37 million and
money is not available through the financial guarantees, Oz would have two
fiscal years to arrange for the Army to clean up the site. 

Just how much contamination exists -- and how much it poses a health hazard
-- is unknown. It would be up to Oz to determine the "full extent of the
potential threat to public health and safety and the environment." 


To reach Grace Hobson, call (816) 234-7744 or send e-mail to
ghobson@kcstar.com


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