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Texas Leans Toward Appeal of DHS Decision Not to Host National Agro-Defense Facility in State

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A coalition of life-science and government leaders from Texas is leaning toward appealing a decision by the US Department of Homeland Security last month not to pick the Lone Star State as the base for its planned National Bio and Agro-Defense Facility, Texas officials told BioRegion News last week — while officials in Mississippi are weighing their own legal challenge to DHS.

DHS chose Kansas from among five states to host the $650 million center. The agency is currently proceeding with design work on the biolab, which it plans to begin building in 2010 and to open in 2015, according to a DHS spokesperson.

The Texas Bio and Agro-Defense Consortium argues that DHS should have told it how significantly it would base its decision on the amount of subsidies that state and local governments would make available for the project.

The Texas consortium also claims that its NBAF proposal would have been a safer bet than Kansas' based on procedural, weather, and budgetary considerations it said DHS failed to adequately consider.

Asked whether the consortium will sue DHS, one of its leaders, York Duncan, president of the Texas Research Park Foundation, told BRN: "That's our position now."

"We're very disappointed in the decision. We've analyzed the draft environmental impact statement, the final environmental impact statement, and all of the supporting documents, and there are just several inconsistencies that don't make a lot of sense to us," Duncan said. "In our opinion, they change the process in the middle of the game, which put Texas as a very definite competitive disadvantage, particularly with the offset package they introduced, that, as it turned out, made so much difference in the whole decision.

"We want to ask DHS to delay the final decision if possible, and make it a fair process to all the sites," Duncan said. "We don't want it to be just between Kansas and Texas. Let's get everybody a last, fair chance, which we didn't get. That's why we're talking about filing a suit. We want the process to open back up for a fair competition."

The agency announced its decision to host the facility in Kansas Dec. 5, two days after the Associated Press reported the leaked results, though the decision was not formalized until Jan. 12.

The Texas consortium and others objecting to the decision have until Feb. 11 to file an appeal with the agency. At deadline, DHS had received no notification of any appeal by Texas, agency spokesman John Verrico told BRN late last week.

Verrico said DHS' review process for NBAF was fair to Texas and the other four states seeking the new biolab, and said the agency was confident the review could withstand an appeal by Texas or any other state.

That process established four criteria: Proximity to research capabilities; proximity to workforce; acquisition/construction/operations requirements; and community acceptance. The five finalist states — Kansas, Texas, Mississippi, Georgia, and North Carolina — also underwent threat and risk assessment studies site–cost analyses.

Texas may not be alone in appealing the decision. Mississippi Gov. Haley Barbour has said in numerous news reports that his state may wage its own legal challenge to DHS' decision.

Barbour's press office last week referred questions about that possibility to a spokeswoman for the state's economic-development agency, who said the Mississippi consortium had yet to decide what it will do.

"We are still looking at how we're going to handle that," Melissa Medley of the Mississippi Development Authority told BRN last week. "We are still determining how to handle our next move. That's really all I can say."

In comments reported Dec. 15, 2008, by the Mississippi Business Journal, Barbour said: "We're studying the environmental impact study that was done at the staff level. We're studying it with an eye toward appealing it. We've got a little time to prepare our appeal. We think we've got the best site with the best management system with Battelle [Memorial Fund], and the best set of partners.

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"The bureaucrats who prepared the environmental impact study seemed to think that our partners in Iowa and Texas and Tulane [Louisiana] couldn't get on an airplane to fly over here to do work," Barbour added. "They said it was too far away. Well, people do that everyday in government and private business. We're looking at it very seriously, because we do have the best site. We'll proceed accordingly."

Medley said the state would not publicly discuss what its arguments will be if it appeals the DHS decision, except to say: "We're not pleased with the outcome because we felt that we certainly were deserving of the project."

If it goes through with its appeal as expected, Texas would make procedural arguments questioning the manner DHS carried out its review and substantive arguments detailing reasons supporting Texas desire that the NBAF reopen its environmental review.

Typically in such an appeal, substantive arguments carry more weight than procedural ones, according to a lawyer familiar with the US National Environmental Policy Act governing federal facility reviews.

"The procedural challenge, while it gets you in court, and may be successful in overturning the decision, ultimately does not always win the day," said Nicholas Ward-Willis of the White Plains, NY, law firm Keane & Beane. "The substantive challenge is going to be where one wants to put their forces and their arguments, and try to convince the court it the agency acted in an arbitrary and capricious manner, and didn't have a rational basis in selecting one alternative over the other.

"What's key in any challenge is, 'Does any statement in the record of decision have support in the underlying environmental impact statements,'" Ward-Willis said. "I think that's something Texas is going to be reviewing."

At issue in any effort to appeal the NBAF decision will be whether DHS erred by selecting a Kansas site as its preferred NBAF location. The biolab is set to rise on the Manhattan campus of Kansas State University, immediately adjacent to the Biosecurity Research Institute, a $54 million research/education facility that, like the one planned by NBAF, has BSL-3 and BSL-3 ag-research space and BSL-3 Enhanced space.

The biolab would border the research laboratories and a teaching hospital associated with the Kansas State University College of Veterinary Medicine — proximity that helped elevate Kansas over the other options, DHS said in its final environmental impact statement on the project. DHS also cited the Kansas proposal's strong local support from business, academic, and government leaders; and its lowest cost after weighing in incentives.

While Kansas had the highest construction cost for NBAF at $563 million before incentives, the Sunflower State and city of Manhattan chipped in more than $200 million in subsidies, lowering the cost to the lowest of the five state options considered by DHS.

The Texas Research Park Foundation's Duncan told BRN the Texas consortium wants more time to craft a costlier package of subsidies for the NBAF project. Texas said it was unable to submit an incentive plan comparable to those of the other competing states by DHS' March 31, 2008, deadline because its state Legislature did not call a special session last year because it saw no need to undertake the expense.

"This is the state of Texas. It's a huge state. And special sessions are very expensive to call and to operate," said Duncan. "We didn't feel like, until the end of '08 with no session, that it was so important to DHS to develop an offset package. So we didn't have an opportunity to go back to the Legislature and say we're looking for 'x' number of dollars. We all felt we could get what we wanted form the Legislature, but there was no opportunity to do so."

Kansas complied with the March 31 deadline by submitting a $44 million package. DHS' Verrico told BRN that Texas did not contact DHS before that deadline about needing more time to offer additional incentives.

Last October, six months after the deadline, Texas Gov. Rick Perry announced the state would more than double its earlier incentive package of $50 million, thus reducing the cost of the project to $401.7 million — the lowest of the five states. DHS refused to consider the higher incentive offer.

"To be fair to everyone else who met the deadline, we couldn't consider anything that came afterward," Verrico said. "How would you feel if you were one of the other states that did everything within the deadline, and then got outbid, so to speak, because somebody came forth after you already met the deadline and spilled the beans about what your bid was? That would be taking unfair advantage. So in order to keep the process fair and equal across the board, we could not accept any offers that came after the 31st of March."

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Similarly, Kansas Gov. Kathleen Sebelius has publicly likened Texas' request to changing the rules in mid-stream.

Even if DHS wanted to consider an amended incentive package for Texas, the issue appears to be moot: Texas was rejected less for incentives than for "lack of proximity" to a veterinary school or college of agriculture, said Jay Cohen, the agency's undersecretary for science and technology, citing DHS' Preferred Alternative Selection Memorandum for the National Bio and Agro-Defense Facility.

The closest vet and ag schools to the city is Texas A&M's College of Veterinary Medicine and College of Agriculture and Life Sciences, both in College Station, about 200 miles northeast of San Antonio. However, the University of the Incarnate Word, a Catholic institution, promised last August — four months after DHS' deadline — to build a new veterinary school in San Antonio if the agency selected Texas for its biolab site.

Duncan said the San Antonio site enjoyed proximity to the animal medicine training centers used by all branches of the US military.

Duncan also said Texas would consider mentioning in its appeal Kansas' ability to shell out its planned incentive package given that state officials are scrambling to shore up a $140 million deficit in the current state budget, which ends June 30, while wrestling with a $1 billion budget shortfall expected for the fiscal year that will begin July 1.

Kansas officials have vowed the state would go forward with its funding for the project, whose benefits to the state include 1,641 temporary construction jobs, resulting in $138.2 million in labor income; 250 to 350 permanent jobs yielding $26.8 million in annual salaries; and $1.5 million in new state and local taxes. All three figures were the lowest from among the five contender states.

DHS has hinted that the biolab is most likely to create 326 permanent jobs, since that was the figure used as the basis of economic forecasts in the draft environmental impact statement.

Duncan also said Texas would bring up Kansas' potential for turbulent weather if it appeals. Specifically, he said, the Texas consortium would argue that the Kansas site is too susceptible to tornados to be safe for NBA. He cited the June 11, 2008, category F4 tornado — categorized as having winds of between 207 and 260 mph — that caused $20 million in damage to the KSU campus after touching down in Manhattan a quarter-mile away.

"You can't tell us, in Texas or any of the other state sites, that there's not an exceptional risk in putting a facility in Kansas, especially when within the [Threat and Risk Assessment], they said they were designing to withstand an F3 tornado," Duncan said, referring to twisters with wind speeds of between 158–206 mph.

Verrico cited the Final Environmental Impact Statement and its TRA, which said tornados and hurricanes "are a significant potential at the proposed sites and can occur with wind speeds in excess of 150 mph." The FEIS also stated that the National Bio and Agro-Defense Facility's "structural system could resist a wind speed that is expected to occur, on the average, only once in a 500 year period."

"In the unlikely event that a 500-year wind storm strikes the facility, the interior BSL-3Ag and BSL-4 spaces would be expected to withstand a 200 mph wind load (commonly determined to be an F3 tornado)," DHS concluded.

If the NBAF took a direct hit from an F3 tornado, said the FEIS, "the exterior walls and roofing of the building would likely fail first. This breach in the exterior skin would cause a dramatic increase in internal pressures leading to further failure of the building's interior and exterior walls," the DEIS stated. "However, the loss of these architectural wall components should actually decrease the overall wind loading applied to the building, and diminish the possibility of damage to the building's primary structural system," the FEIS concluded.

And since the walls of the NBAF's BSL-3Ag and BSL-4 laboratories would be reinforced cast-in-place concrete, "those inner walls would be expected to withstand the tornado," the FEIS added.

Unlike those labs, the overall building would be designed to resist a 119-mph wind. That's an improvement from the original 90-mph wind design — an upgrade from resistance to an F1 tornado to an F2 — which DHS said should be sufficient.

"The building would be built to withstand wind pressures up to 170 [percent] of the winds which are expected to occur locally within a period of 50 years," FEIS said.

According to Duncan, "if they're going to do that, the cost is going to be more. The building has got to be redesigned [to reflect Kansas weather conditions], and that's unfair to the other sites."

As of last December, soon after DHS announced its selection of Kansas [BRN, Dec. 8], the state said it combined $105 million in bonds for infrastructure improvements, typical with new construction projects, with $5 million from the city of Manhattan and another roughly $100 million toward biological research at the Biosecurity Research Institute, an existing building at KSU with BSL-3 lab space, Tom Thornton, president and CEO of the Kansas Bioscience Authority, which led Kansas' NBAF effort, told BRN at the time. That research would be shifted to the NBAF biolab upon its completion in 2015.

"The idea is to get started now. Why should we, as a nation, faced with these animal-borne diseases coming our way, wait until 2015 to initiate that research in a modern facility?" Thornton said in December, explaining Kansas' incentive strategy. "Let's get started now."

Thornton last week did not return e-mail and telephone messages from BRN seeking comment on the planned Texas appeal.

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