[CPEO-MEF] Public Funds for Privatized Cleanup

[Lenny Siegel <lsiegel@cpeo.org>]

One of the attractive features of the privatized, early transfer cleanup
scenario is that the funds for cleanup can come out of the value of a
piece of property, which itself is enhanced by the accelerated reuse.
This has been an argument for the turnover of the Sunflower Army
Ammunition Plant to the Oz Entertainment Company (OEC), in Johnson
County, Kansas.

However, a recent statement by Oz, in response to questions from Johnson
County, clarifies that some of the money will come from the public. In
essence, local taxpayers and other agencies are being asked to pick up
the tab cleanup that is the responsibility of the Army.

First, Oz explains, "OEC believes it would not be fair to require OEC to
meet the tremendous obligation to the state of Kansas under the Consent
Order and to expect 2,800 acres of clean donated land without allowing
OEC to use the business incentive tools authorized by the special state
statute." That is, local agencies are being asked to forego revenue so
that Oz can afford to do cleanup that is the Army's obligation.

Second, Oz says, "It is clear, and OEC has always stated, that the
senior lenders on the project will require a pledge of sales taxes as
additional sources of repayment to compensate for the risk associated
with development involving such high levels of remediation." That is,
public revenues may be diverted to help cover environmental liabilities.

Finally, Oz expects to receive $20 million in grants in support of its
project, out of $30.5 million in state and federal grants for which it
is eligible. One of those grants is a "Federal Environmental Remediation
Research Grant," which would be for up to $5 million. I am not familiar
with this program, but I suspect that such money is not supposed to be
used for the actual remediation of federal property. (Does anyone know
what this program is?)

Lenny Siegel

-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 222B View St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/968-1126
lsiegel@cpeo.org
http://www.cpeo.org

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