Kansas Republicans want to block $95M Johnson County manufacturing plant over China fears

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When Johnson County last June considered property tax incentives for a proposed $95 million manufacturing facility, officials encountered unexpectedly intense opposition.

“Why is Johnson County funding China? This is incredibly concerning,” said Debbie Detmer, a far-right regular at county meetings. She was among a handful of residents who voiced objections to the project last summer over fears the company has ties to the Chinese government.

County commissioners approved the incentives anyway and the company, Cnano Technology, moved forward with developing a 333,000-square-foot facility in the business park of Johnson County’s New Century AirCenter.

But more than half a year later, the opposition of a few local residents has grown into a nascent movement among Kansas Republicans to block the plant, potentially imperiling a project expected to generate more than 100 jobs.

U.S. Rep. Jake LaTurner, a Republican, touched off a new round of concern earlier this month when he released a letter calling on the Committee for Foreign Investment in the United States – a federal panel – to investigate whether Cnano has ties to the Chinese Community Party.

LaTurner, whose district does not include the proposed facility, has also urged state officials to block the company. Whether the Republican-controlled Kansas Legislature takes up the issue may determine Cnano’s future in the state.

“There are serious allegations regarding the leaders of Cnano participating in state-sponsored theft of intellectual property and data. This is an issue that requires coordination on both the federal and state level,” House Majority Leader Chris Croft, an Overland Park Republican, said in a statement.

Kansas Attorney General Kris Kobach’s chief deputy attorney general, Dan Burrows, said the office was looking into what actions could be taken against the company. In a letter to the Johnson County Commission on Friday, Kobach, a Republican, urged the county to withdraw its incentives.

“It appears that the pursuit of economic growth has been placed above national security,” Kobach wrote.

Kansas lawmakers were already mulling legislation that would block foreign ownership of farmland, and House Speaker Dan Hawkins, a Wichita Republican, has emphasized the importance of combating China’s communist government. LaTurner’s call for action will likely intensify those discussions.

LaTurner has spoken of Cnano’s “proven and significant ties” to the Chinese Community Party. The allegations trace back to reporting by the Daily Caller, a conservative news outlet, in a partnership with the Heritage Foundation, a conservative think tank that has urged the Republican Party to take a more aggressive stand on China.

Cnano – its full name is Cnano Technology USA Inc. – is a wholly-owned subsidiary of C-Nano Technology Co., Ltd., which in turn is owned by Chinese-based Cnano Jiangsu, according to the Daily Caller. Cnano Jiangsu employs Chinese Community Party members, the publication reported.

Cnano specializes in making carbon nanotubes and graphene, which are used in electric car batteries. The proposed Johnson County investment came after Panasonic announced plans to create a $40 billion electric battery plant in De Soto.

The Star did not receive a reply from the only email address listed on the company’s website. Members of the project development team, with VanTrust in Kansas City and CBRE, did not return The Star’s requests for comment.

“We’re proud to bring cutting-edge technology, investment dollars and, most importantly, jobs to the region,” Shawn Montgomery, president of Cnano Technology USA, Inc., said in an August news release.

The U.S. Department of Treasury, which houses the Committee for Foreign Investment in the United States, declined to comment on LaTurner’s letter. The committee typically provides an annual report to Congress, but it’s prohibited from publicly disclosing information supplied to the committee and does not confirm nor deny when it’s investigating a company.

Rep. Rui Xu, a Westwood Democrat and the only Chinese-American Kansas lawmaker, said concerns surrounding Cnano are part of a trend he’s watched for years.

“It’s just fear mongering around the CCP because apparently it’s a popular campaign issue for them. But, it’s just falling upon Asians and then usually, after that, Asian Americans as well,” Xu said.

Xu said any foreign land ownership policy needed to be narrowly tailored and warned against expanding into commercial and residential lands.

Johnson County commissioners in June approved a 10-year, 75% property tax abatement for Cnano’s facility, which is expected to employ about 120 workers manufacturing battery additives, according to county documents. Prior to the development, the land was owned by the county and tax exempt.

The Johnson County Airport Commission previously approved the ground lease for the building developed by VanTrust Real Estate, with rental revenues to be used to retire the debt for area infrastructure improvements and support the operational needs of the airport. Bryan Johnson, the executive director of the Airport Commission, declined to comment, deferring questions to the county.

Johnson County Commission Chairman Mike Kelly has warned that the county should be wary of the rhetoric surrounding the project, saying it is a “welcoming community” and supportive of development from both national and international companies.

“There’s examples from the past and present that tell us the pattern of invoking China as a threat has dangerous consequences for Americans of Asian descent and perpetuating long-standing stereotypes of Chinese and other Asian communities as foreign or dangerous or unscrupulous,” Kelly said during a commission meeting.

Kelly said in a statement to the Star on Friday that the Cnano building will soon be outfitted with equipment and that bonds for the project had been sold. He said Cnano will “be subject to the protocols, codes, laws and regulations established by the county, state and federal government,” and noted that doing business with global entities brings opportunities to the region.

Johnson County Commissioner Charlotte O’Hara, a conservative, opposed the tax break for Cnano. She said she has concerns about the company.

“Unfortunately, I think our due diligence is really lacking when we have these properties that come in for tax abatements,” O’Hara said.

‘We don’t know’

Republican efforts to restrict foreign ownership of land in Kansas have until now mostly focused on blocking ownership of agricultural land, though available data indicates Chinese nationals and companies own a miniscule fraction of Kansas farmland. Kobach this fall proposed blocking individuals and entities connected to foreign governments from owning more than 10 acres unless a state council gives it permission.

Sen. Mike Thompson, a Shawnee Republican, said he believed legislation blocking foreign land ownership should be composed in a way that prevents Cnano from owning land in Kansas. He said there’s “no such thing” as a private company in China.

“We don’t know what kind of operations they’re doing,” Thompson said. “We don’t know whether they’re spying or not but we have to assume that they are.”

Rep. Ken Rahjes, an Agra Republican who chairs the House Agriculture Committee, was more cautious. Calling himself a capitalist, Rahjes said he thinks everybody can make an opportunity for themselves.

Still, he said verification is important.

“Same thing with China, they’re a trading partner with us,” Rahjes said. “We need them, they need us but that doesn’t mean we just give them carte blanche.”

Asked whether Democratic Gov. Laura Kelly’s administration had concerns about Cnano or CCP influence in Kansas more broadly, Patrick Lowry, a spokesman for the Kansas Department of Commerce, said the agency “did not provide any support for this company coming to Kansas.”

“Restricting a private company from investing in the state would require action from the legislature,” Lowry added in an email.

Concern in Washington

The growing controversy over Cnano in Kansas comes as lawmakers in Washington have increasingly attempted to appear tough on China, seeing it as a global threat to the United States.

There have been several efforts to block Chinese countries from acquiring land, including a bill filed by U.S. Sen. Josh Hawley, a Missouri Republican. The bill was not considered in the Democratic-controlled U.S. Senate.

Hawley is one of the most vocal opponents of China in Congress and has argued for decreasing the amount the U.S. is spending to support Ukraine in support of putting more resources in Asia to counter China. He has also pushed for a ban on TikTok, a Chinese-owned social media app that officials say collects data about Americans.

Other lawmakers – like U.S. Sen. Jerry Moran, a Kansas Republican – have tried to ban several countries from investing in, purchasing or leasing U.S. farmland. His bill, supported by some Democrats, would prevent China, Russia, Iran and North Korea from owning land.

Maria Holiday, chair of the Johnson County GOP, applauded Johnson County residents for speaking in opposition of Cnano since last summer. More residents showed up to this past week’s commission meeting, echoing LaTurner’s concerns. But she said their fears have “fallen on deaf ears.”

But Cole Robinson, executive director of the Johnson County Democratic Party and a Prairie Village councilman, said he’s not surprised by the Republican messaging on China, especially in a presidential election year. He expressed concern that opposition to Cnano’s project could give other companies pause as they consider locating in Johnson County.

“I don’t think it’s great that someone looking at the growth in Kansas has to also run a calculus about whether or not they’re going to run into this type of overly nationalist, protectionist, isolationist rhetoric,” Robinson said.

The Star’s Daniel Desrochers contributed to this report.