Thursday, April 17
Lawrence Business Magazine LLC
Lawrence Business Magazine LLC
2013 Summer - Real Estate Issue

EAST LAWRENCE EAST HILLS & FARMLAND

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Residential Real Estate Making A Comeback
| 2013 Summer | story by EMILY MULLIGAN | photos by STEVEN HERTZOG |

east iconAmid the buzz of city-funded, large-scale construction projects this year, such as the Lawrence Public Library and Rock Chalk Park, environmental and construction crews have quietly plugged away at the former Farmland nitrogen plant site on East 23rd St.

The former Farmland site doesn’t have near the costs associated with it that the other two projects have, but the potential impact of its development may be just as great.

“This is one of the few places we have that can accommodate industrial businesses in the city, and it is a high priority because of the primary jobs it can create,” said Britt Crum-Cano, economic development coordinator for the City of Lawrence.

FarmlandThe circumstances that led to the city taking over development of the site are rather unique. Farmland went bankrupt and, as part of the settlement, the company had to set aside $8.5 million to remediate the land and site. So, the city acquired the property in September 2010 at no cost and set to work to remediate the environmental issues and prepare the land for development.

“The city did something kind of extraordinary. You don’t find very often that a municipality takes over land like this,” said Megan Gilliland, communications manager for the City of Lawrence. “Clean up began immediately. From a visual standpoint, it looked like a rundown old plant. Now, it looks like developable land.”

Greg Williams, president/CEO of the Lawrence Chamber of Commerce, agreed that the city was doing something it had not done before, for the benefit of current and future residents.
“The city is putting its money where its mouth is,” he said. “It is standing up and doing something very bold, something unique to Lawrence: taking a risk. This is not just an investment of building; it is an investment in workforce: hiring qualified, talented local residents who enjoy living in Lawrence and want to work in Lawrence.”

demolitionDemolition to Development
Matt Bond, the City of Lawrence’s manager of the storm water division of public works, has been the lead project manager for the city through the clean-up and into the beginning of development of the 335 acres, out of 467 total acres, that have been master planned.
demolition2Bond oversaw the demolition of about 1,600 tons of scrap metal that was recycled from the site, as well as working with the Kansas Department of Health and Environment (KDHE) to evaluate and treat the soil and groundwater, which have significant nitrogen concentrations, among other issues.

Now, Bond is leading the development and construction of infrastructure on the site. This spring, crews began grading and planning for a road that will run east-west just north of 23rd St. to enter the site and to connect it all the way to the East Hills Business Park to the east. That road will also align with a new stoplight installed in May across 23rd St. at O’Connell, to allow for easy entry and exit for both the Farmland site and East Hills. Bond anticipates that the road, storm sewers and sanitary sewers will be completed by this fall.

Construction crews also are grading and building a pad site further north and west on the property that eventually will house an electrical substation, which will replace the original substation on the western edge that is visible from 23rd St. The city has partnered with Westar to upgrade and maintain electrical poles and lines, most of which have been there since the early 1950s, Bond said. Westar also ran new lines along the back of the property and created a redundant power source. Once the new substation is up and running in late 2014 to early 2015, other power poles will be moved to make for a better entrance.

Bond and the KDHE are planning for changes to managing groundwater runoff from the site. Currently, there are several ponds on the site that collect groundwater runoff. That water is monitored for nitrogen levels and then piped under the Kansas River and applied to a series of farmed fields north of the river whenever the farmers need it. The concentration of nitrates in that water is going down, Bond said, so workers are in the process of implementing a new runoff plan: one regional detention pond on the north end of the property that will collect water from the entire site through an interceptor trench and let it run to the Kansas River.
Bond also will oversee work beginning this summer on a part of the site that falls under EPA guidelines for the Resource Conservation and Recovery Act (RCRA). The soil has low pH, and previous attempts to correct for it have not succeeded, so crews will take a more aggressive approach, excavating the soil and mixing in chemicals to bring up the pH.

When the city first acquired the site, it worked with Shaw Environmental on an action plan to remediate the site. The KDHE set out requirements for the land, that it not be used for residential or commercial purposes, only industrial. Based on the action plan, the KDHE initially estimated that the remediation would cost about $13.5 million. With Farmland’s bankruptcy allocation of $8.5 million, that leaves the city with the balance.

Matt Bond“I think we can clean the site up for $8.5 million to $11 million,” Bond explained. “If the property had been left the way it was, I’m not sure the fund would have cleaned up the site. We have saved some costs as a city staff doing things ourselves. We didn’t pay for the property. The flip side is we’re paying for its infrastructure and development.”

The city hopes to make good use of the undevelopable portion of the site, about 132 acres, as well. In early 2012, it received a technical assistance grant from the National Renewable Energy Laboratory (NREL) and the Environmental Protection Agency to investigate the site’s potential for using renewable energy.

Eileen Horn, sustainability coordinator for the city and Douglas County, said that the NREL and EPA conducted an early feasibility study for biomass conversion into electricity generation, but that the Farmland site was not a good fit for that particular option.
“That study ignited an interest in renewable energy there, so we hired a company to evaluate other possibilities, and it looks like using solar photovoltaic’s [PVs] for electricity generation might work well with the site,” Horn said. “If we can put solar panels on the undevelopable part of the property, that would be a win-win.”

Role Model
The city and other entities need to look no farther than next door to the former Farmland site to see a successful industrial development in Lawrence. Its development process was more traditional, and East Hills Business Park, which is adjacent to the east to the Farmland site, was designed to accommodate a variety of industrial sites.

“For all intents and purposes, East Hills is virtually built out,” said Williams, who is also the CEO of the Economic Development Corporation of Lawrence and Douglas County.
East Hills boasts a full capacity of its largest sites, with companies like Kinedyne, Plastikon, K & M Tire, and Grandstand Sportswear and Glassware.

Chris Piper, owner of Grandstand, said that East Hills offered the only available space that could accommodate the growing company when it moved from near 31st and Haskell in 2011.

“We love our building, and we have room to grow here,” he said. “We fell into an absolutely fantastic deal, and the city was great.”
He said that East Hills would be an even better location when the South Lawrence Trafficway is built, providing quicker access across Lawrence and from the west and south.

There are smaller tracts of land still open at East Hills, Williams said, as well as an 87-acre parcel that is located in a flood plain.
“There are some opportunities for ancillary or even complementary development at East Hills for those who work there,” he said.
Those could include, but are not limited to, day care, food, dry cleaners or a convenience store.

“It’s been a case study on how to develop an industrial park properly, and there are lots of people to thank and congratulate for that,” Williams said.

Bringing in Business

grand standAlthough the actual development of the business sites and arrival of tenants to the Farmland site is a few years off, Crum-Cano and Gilliland said the city was already marketing the sites to prospective tenants. No one has signed on publicly, so there are no announcements to make just yet. “We don’t have a formalized brochure or materials, but we are actively involved in informing potential companies about the Farmland site,” Crum-Cano said.

Gilliland said that the city was eager to rename the property so that it would no longer have to be referred to as “the former Farmland site.” But even that might be several months to a year away.

“Since the acquisition, the vision and development of what we want Farmland to be has been at the forefront,” Gilliland said. “The marketing process will be accelerated as the infrastructure is completed.”

Crum-Cano said there are many positives about the site – one big advantage is its location.

“Where it sits is ideal: in the Johnson County corridor, near the new K-10 [South Lawrence Trafficway] and with access to I-70,” she said. “Basically now this particular site will have access to the east, west and north, and some parcels will have rail access, which is very valuable.”

Crum-Cano said that although the property size could accommodate large industrial businesses, the city would be open to what potential tenants may need.
“Since our initial plans, we have allowed for flexibility, because we don’t know if someone will need a small parcel or a large parcel,” she said.

Williams agreed that the location and highway access were crucial to attracting and maintaining businesses at the new site. And he emphasized that the success of those businesses was important to Lawrence for many reasons.

“This land is going to be critical to the economic success of the community,” he said. “Manufacturing creates mass quantities of jobs, and not only are they good jobs, but there is a multiplier effect that one dollar invested in manufacturing circulates five to seven times in the community.”
Gilliland said that the site was being planned with attention to detail.
“We want this to be not just an industrial park; we want it to have a park-like feel, so there will be bike lanes and trails,” she said.

Horn said the Farmland site showed that development and environmentalism did not have to be opposable forces.

“This is a premium example of visionary leadership. It shows that economic development and environmental stewardship can coexist. It’s a wonderful story, and it is really a powerful statement about what Lawrence is,” she said.■

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