Descripción del estado actual de la industria

The Tonganoxie Business Park site is a 237± acre (.37 square mile) tract located to the south of the main portion of the City of Tonganoxie, Kansas. This site could be expanded over time to incorporate adjacent land that is currently undeveloped. The City is in the south-central portion of Leavenworth County, which is in the northeastern corner of the State, a short distance (approximately 30 miles) west of Kansas City, Missouri. The site is approximately 12 miles northeast of Lawrence, Kansas, the location of the University of Kansas. Fort Leavenworth, Kansas is located approximately 25 miles northeast of the site.

The general location of the Tonganoxie site is an excellent one for companies seeking to serve some combination of the metropolitan Kansas City area, Fort Leavenworth, and the University of Kansas.

Figure 1

Tonganoxie Location Map

Site

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The southwestern corner of the site is located approximately 2.7 miles from Exit 212 of Interstate 70 (the Kansas Turnpike), an east-west Interstate linking to Kansas City, St. Louis and Indianapolis to the east, and Denver to the west. I-70 intersects with I-35 in Kansas City, providing north-south connections to Des Moines and Minneapolis to the north and Wichita, Oklahoma City and Dallas-Fort Worth to the south.

This location, approximately 235 miles (by road) from the claimed center of the 48 contiguous states in Lebanon, KS, provides excellent four-directional access via high-speed, limited access highways, for distribution or other companies seeking to serve a broad marketplace.

The site is rectangular in shape, somewhat longer east-to-west than north-to-south. The site is bounded by 222^nd Street to the west, Kansas Avenue to the north, and other largely

undeveloped lands to the south and east.

Figure 2 Tonganoxie Site

(Boundary Lines Approximate)

The road linkage between the site and I-70 is via County Road 1, with a turn onto 222^nd Street.

Some interview sources questioned whether the turning radius (also known as the turning circle or turning path) from County Road 1 onto 222^nd Street would require improvement for efficient movement of large tractor-trailers; this requires additional study by a qualified engineering firm.

Site

US 24

Kansas Ave.

222^nd St

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County Road 1 also connects to US 24 just to the west of the site. US 24 provides an alternate route to Kansas City, Lawrence and Topeka.

The Tonganoxie site is highly accessible via a good road network. Eventually, however, 222^nd Street and Kansas Avenue will require widening or other improvement to accommodate a growing amount of vehicular traffic (both cars and trucks) as the park develops.

The Tonganoxie site is well-located in terms of access to a major airport (Kansas City

International Airport). The airport can be reached from the site by either going south to I-70 to I-435 to I-29, or north from the site to U.S. 24 to I-435 to I-29. The distance is about 40 miles with a 45 minute drive time. The site is also a short distance from Lawrence Municipal Airport, a general aviation airport with a 5,700 foot runway and Class 1 instrument landing system that can accommodate corporate jets.

A slight weakness of the site for some companies is that the portion of the Kansas Turnpike serving it to the west/southwest is a toll road. This may be a discouraging factor for prospect companies that have a large volume of vehicles, particularly trucks, that will need to use the Kansas Turnpike (parts of I-70, I-335 and I-35) headed west/southwest. The Kansas Turnpike Authority website shows that the current toll between Exit 212 and the ends of the toll portion of I-70 in Kansas are:

While this may be a modest cost for an individual vehicle, it can be a sizeable cost for a fleet of vehicles traveling a long distance.

A potential weakness in the past, which has been corrected, was the load-bearing capacity of several bridges on County Road 1. Bridges between the Tonganoxie site and I-70 can now accommodate standard, legally loaded trucks up to 80,000 pounds. From a marketing

perspective, the only limitation would now be for companies using oversized trucks carrying a load weighing more than 80,000 pounds.

Traffic

Observed traffic in the vicinity of the site at multiple times of day was very limited. Kansas Department of Transportation maps published in March 2011 for the district that includes Leavenworth County show traffic on County Roads in the vicinity of the site at only 1,500 vehicles per day or less.

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A preliminary traffic assessment prepared by TranSystems as part of its Preliminary Design Report issued in November 2009 provided a discussion of necessary road improvements based on then-current baseline traffic and a “…cursory estimate of potential traffic generation for the site….” based on TranSystems’ site assessment showing a total development potential of 2,727,500 square feet (if the eastern portion of the site is developed). This estimate concluded that at full development, the Tonganoxie site is expected to produce 1,340 – 2,087 vehicle trips during the peak weekday hours. Added to the existing traffic, this results in an estimated peak hour traffic volume of 2,800 – 3,500 vehicles.

The traffic generated by the site will add to an expected growing traffic volume past the site as more people use Exit 212 to and from I-70. However, total traffic volume is not expected to be a problem if necessary road improvements identified in TranSystem’s Preliminary Design Report are constructed in a timely fashion.

Visibility and Attractiveness

The site is currently undeveloped and is surrounded by largely undeveloped areas on three sides (there is more existing development north of the site). The site is visually attractive and visible from US 24 (particularly the western end of the site), and can be developed in an attractive fashion. The site’s visibility may provide a marketing advantage for businesses desiring exposure to drive-by traffic. Care must be taken in building design and construction so as not to lose this advantage because of poor visual quality of building construction and site design, development or use.

A small trailer park adjacent to the northwestern corner of the site is the least attractive aspect of the site or its immediate vicinity, but is not a major detriment.

There is some community concern about assuring that the Tonganoxie site is developed attractively, as this development will be a gateway to Leavenworth County and the City of Tonganoxie from I-70.

Topography

The site is gently rolling with a mixture of slopes. The eastern portion of the site has somewhat steeper slopes that lend themselves to smaller footprint buildings in order to minimize site preparation costs. The low spot of the site, along the site’s northern boundary about 900 lineal feet east of the western boundary, is at approximately 900 feet elevation. The high spot of the site, at approximately 980 feet elevation, is about 500 feet east of the center of the site.

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Figure 3

Tonganoxie Site Topography

Source: Leavenworth County GIS Department website

The topography of the Tonganoxie site supports cost-effective development of a variety of building sizes, particularly, but not exclusively in the western portion of the site, with smaller footprint buildings in the eastern portion. The site’s contours are shaped by several existing or seasonal watercourses, and provide good gradients to support stormwater runoff.

Wetlands and Watercourses

An environmental scan included in the TranSystems report states that available data “…indicate there are three potential jurisdictional ponds totaling 1.4 acres present on the property. No on-site wetlands were identified by NWI [National Wetland Inventory] data. An unnamed tributary with defined bed and bank morphology was present on the site in the southeast portion of the property. There is a drainage swale located on the northwest corner of the site that appears to convey water towards a pond located on property to the north of the site, the water passes through culverts under Kansas Avenue. A possible wetland was located near the culvert.”

Neither the TranSystems report nor the County’s GIS mapping indicates that any of the site is located in a flood prone area. (See Figure 4 on the next page for wetlands mapping.)

Low Spot

High Spot

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Figure 4

Tonganoxie Site Wetlands and Watercourses

Source: Leavenworth County GIS Department website

Developability of the Tonganoxie site will not be impacted negatively by wetlands or

watercourses. However, development will require field delineation of wetlands and compliance with all applicable wetlands regulations including those of the U.S. Army Corps of Engineers.

Soils and Subsurface Geology

The TranSystems Preliminary Design Report included a detailed geotechnical investigation and report prepared by Kleinfelder Central Inc. This report found that the site is comprised of a mixture of soils types including glacial till, clay, sand lenses, cobbles and boulders. Some bedrock was found, generally at depths of 8½ feet or greater. The site has approximately 6 – 10 inches of topsoil. Much of the site has been in farm use with a plow zone (loosely compacted soil) of approximately 12 inches. No appreciable groundwater was noted, although glacial deposits often contain isolated pockets.

Known soil types and conditions indicate that no unusual construction techniques will be necessary to cost-effectively develop the Tonganoxie site.

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Observed or Known Property Crossings

Neither field observation nor aerial photographs of the site indicate any easements, rights-of-way or other forms of property crossing, in particular for roads or utilities. This is consistent with preliminary survey work performed by TranSystems. Since their report was prepared, the City of Tonganoxie has taken title to the property. We are not aware that pre-purchase due diligence identified any development limitations from portions of the site subject to legal or informal crossing of the property.

Vegetation

As can be seen in Figures 2 and 4, portions of the eastern half of the site are wooded; however, the majority of the site is open farm fields. While available reports do not specify the type of trees, they appear to be a mix of deciduous and coniferous trees common to this part of

Kansas. It is not known at this time whether any existing tree cover is marketable timber or can be incorporated into landscaping plans for the eastern portion of the site. Also, it is not known at this time whether there are any endangered plant species on the site.

Current and Preexisting Uses

As previously noted, past use of this site has been agricultural in nature. Until specific

construction needs are identified, it may be possible to continue this use under a year-to-year lease with a farmer in order to generate some revenue for the City of Tonganoxie, which now owns the property.

Existing Infrastructure Roads

The road network serving the Tonganoxie site is discussed in the Site Description, Location and Accessibility section above. Existing roadways are suitable for initial development of the site. As development density increases, in conjunction with increased traffic on County Road 1 from I-70, additional road improvements may be necessary in the future.

Rail

The nearest rail line is several miles to the south of the site and would require crossing I-70 in order to provide rail service to the Tonganoxie site. It is highly unlikely this can be done cost-effectively given the limited development area over which to allocate construction costs.

Public Water and Sewer

The City of Tonganoxie will provide public water and sewer services to the site. Although not yet in place, planning has already occurred for necessary construction. The City will be responsible for necessary extensions of water and sewer lines, and will include development potential of areas around the park in its plans.

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The City has one water treatment plant that serves the city limits including the Tonganoxie site.

The water supply is from wells (both City and Kansas City Board of Public Utilities), with a current capacity of 2.5 million gallons per day (MGD). Current usage is .40 MGD, yielding a current surplus capacity of 2.1 MGD. A water quality report provided by the City indicated no unsafe conditions. Industrial users requiring soft water would have to provide suitable softening treatment. Plans include the construction of two new 300,000 gallon water towers (one within the eastern portion of the site and one approximately 4,000 feet north of the site), sized to adequately serve the Tonganoxie site and anticipated development in the surrounding area.

This will be important for fire protection for business buildings in the Tonganoxie park. Equally important, the majority of the site is served with a looped water supply system.

The City also has a single waste water treatment plant that serves the city limits. Built in 2006, this secondary treatment plant has a current design capacity of .75 MGD with the ability to double in size. Current usage is .40 MGD, resulting in a current surplus capacity of .35 MGD.

The City is working to maximize treatment capability from the current plant through an ongoing infiltration and inflow reduction program. The City has a pretreatment ordinance that appears to be common for municipal pretreatment requirements. Businesses generating “high strength”

wastewater would be required to pretreat their effluent.

TranSystem’s Preliminary Design Report included recommendations for necessary

improvements to the water and sewer service for the Tonganoxie site. This report budgeted

$1,698,000 for off-site water and sewer improvements and $1,796,000 for on-site

improvements, or a total cost of $3,494,000 (approximately $14,560 per acre). Based on more recent discussions with TranSystems, we find no reason to modify these estimates at this time.

Any inflation related cost increases (in particular, for some construction materials) since 2009 will be small due to the depressed state of the construction industry (which has kept labor costs and profit margins down) and would likely be covered by the 10 percent contingency budget included in TranSystems cost estimates. The U.S. Bureau of Reclamation’s Construction Cost Trends Index shows that the composite cost index for the first quarter of 2011 is only slightly higher than the index for 2009.

Tonganoxie’s planned improvements to its public water and sewer capabilities to serve the proposed business park site are critical for development of this site. Current water and sewer capacities are adequate for short term development for businesses that are not intense water users or generators of large volumes of wastewater. However, it is necessary to extend water and sewer mains as soon as possible to make this a marketable business park, as well as to minimize any inflation-caused cost increases.

Electric Service

Westar Energy’s coal-fired Lawrence Energy Center is the closest generating station to the Tonganoxie site; however, it is important to note that development is not dependent on a single

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generating plant, but rather the grid serving the area. Westar has overhead transmission lines adjacent to the site along 214^th and 222^nd Streets.

Three-phase power is available to the Tonganoxie site. Current facilities (substation and conductor) can handle additional load, and Westar would upgrade facilities as demand warrants, as long as that demand covers construction costs in a reasonable period of time.

Westar reports that at present, there are no limitations on business development at the Tonganoxie site.

Reliability measures (SAIDI, SAIFI and CAIDI) are within reason, although improvements can be made. This will be important in meeting the power needs of businesses that are particularly sensitive to power outages or fluctuations. At present there is no dual feed or uninterrupted power supply capability to the Tonganoxie site.

Although the Tonganoxie site is not in the service territory of the Leavenworth-Jefferson Electric Cooperative (a Touchstone Energy Cooperative), LJEC is nearby and serves portions of

northeast Kansas including Fort Leavenworth. Depending on the willingness of Westar to allow it, a dual feed capability may be possible by having separate distribution lines from Westar and LJEC.

Electric power is currently adequate to support initial development of the Tonganoxie site unless a company must have a guaranteed dual feed or uninterrupted power supply. While more attractive, we do not recommend going to the added expense of undergrounding the electric and telecommunications lines.

Natural Gas

While Kansas Gas Service (KGS) is the natural gas provider in the vicinity of the Tonganoxie site, there is currently no natural gas service in the immediate area. This may not be a problem as many businesses have no need for natural gas. On the other hand, some businesses need natural gas as a process heat source, while others prefer it over oil or electric for their domestic heating needs. The Kansas Department of Commerce reports that most of their prospect

companies prefer sites with full utilities, including natural gas.

The TranSystems report includes two possibilities for meeting this need: the first is a 3500+

foot extension of a 4” main located on the east side of U.S. 24 that extends into a residential area near 12^th Street; the second is a 2700± foot extension of a 2” line at South Delaware Drive and Stayyard Road. Which course of action best meets the development needs of the site will depend on the demands of future business prospects. TranSystems’ budget includes $140,000 for extension of the 4” line. At $591 per acre, if gas is needed at all, it would be advisable to put in the larger line, particularly if it can be used to serve other areas surrounding the park that will develop in the future.

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Additional information provided by the City indicates that KGS can provide gas service at 58 mcf/hr at 20 psig at a cost of $260,000 for the line extension, exclusive of the costs of

easement acquisition. While this is more expensive than the TranSystems estimates, at $1,097 per acre, it is still a reasonable cost to have a business park with full utilities, particularly if this installation serves other areas surrounding the park. KGS can also provide 80 mcf/hr but believes this is excessive unless a huge gas user wanted to locate in the park.

Telecommunications

Due to security and competition concerns, it has gotten very difficult to obtain specific information on telecommunications services and facilities. On the other hand, the same concerns about competition have caused telecommunications companies to become more aggressive in planning and installing telecommunications services in developing population centers to capture growing customer demand. This can be particularly true for a new business park of good size where businesses may have a need for robust voice and data transmission services.

The Yellow Pages for Leavenworth County include listings for multiple telecommunications companies including AT&T and Time Warner Cable Digital Phone. The nearby Kansas City metroplex is served by nearly every major telecommunications company including those known as “triple play” suppliers of phone, internet and digital television services.

Our personal experience in the vicinity of the Tonaganoxie site, and interviews with several people familiar with the area, indicated no problem with cellular service. Given the ongoing growth of Tonganoxie, we do not expect that telecommunications will be a weakness for development of a new business park on the Tonganoxie site.

Stormwater Management

The City of Tonganoxie has a Storm Water Detention Plan that requires a zero increase in runoff (ZIRO) for 10 and 100-year frequency storms. As noted above in the section on

topography, the natural contours of the land are conducive to good stormwater management.

TranSystems’ site plan includes a stormwater detention pond with a spillway outlet structure in the northwestern corner of the site that would serve the major portion of the site west of the north-south ridgeline dividing the site. Development areas east of the ridgeline will be

dependent on lot-specific stormwater management, but because of the topography of this area,

dependent on lot-specific stormwater management, but because of the topography of this area,