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Very Classy, Mr.Fritzel.
I've never heard anyone call him classy.
I can't wait for the comment on this one.
Well I'll start. If Thomas Fritzel's Dad didn't start Thomas with a million bucks or more (he didn't earn it on his own!) when he turned 18, we wouldn't be hearing about any of this. Gene Fritzel HAD a great reputation as a home builder. To bad Thomas got money hungry and is slowly destroying everything his Dad worked for. To bad for Gene.
Does not hurt to marry well either.
The city should foreclose on the unpaid taxes, and then sell off the lots. This way, they will recoup some of their money.
Looks like Fritzel is borrowing from Junction City to finance the sports complex in Lawrence.
Fritzdl could be using Lawrence to pay for Junction City.
Anyone for a vote on this project?
If I had a million dollars just handed to me without having to work for it; I think I wouuld use it other than ruining my fathers business
So now we understand better what a Limited Liability Corporation means.
Let's Loot Citizens.
Aka I've been Fritzeled!
You won't have to wait long. If this project goes forward as planned the city is going to have to print and sell a million of these stickers every year at a dollar a pop just to pay the maintenance costs on the new recreation center. The sticker, however, is going to read, We've been Fritzeled or We just got Fritzeled.
Dodging Taxes is about the most unpatriotic thing a person/business can do. Its like stealing money from your customers or defecating on a fallen soldiers grave. For someone who wants to do business in Lawrence with this athletic center I say....cough up your back taxes and we will talk. But not before. Developers make bad choices.
Question - who are some of the other partners in Fort, LLC ??? I am not up on all the details, but this situation out there seems awfully close to the time period when another Lawrence 'developer' got caught bribing Junction City officials. He had partners in that deal, but I don't know who. Any connection to Fort, LLC ?? There may not be, I truly don't know, but think it would be worthwhile for LJW to investigate before we go much further with this.
....“closed the last window” on a comeback for the project." Well, no Mr. Fritzell, the window isn't closed. Simply pay what you owe (or make some arrangements to do so) and my guess is they would be happy to give you permits to build rental units. This sounds to me a lot like, If I can't have it MY way, I will take my ball and go home. And me not paying what I OWE is YOUR fault, not mine. pitiful.
Oh, I I did notice that they had a "no bid" clause also. Hhhmmmm, how did that work out for ya ?????
But, we shouldn't be worried, this is 'different'. Yeah, right.
what kind of idiots would involve our city in a deal with someone with a track record like that
Todd Sutherland on the executive committee of Ku endowment, failed to acknowledge his conflict of interest to KU endowment. Dale Sueferling must have his cranium up his anal canal. Looks like Ku endowment will become the poster child of cronyism. Ku endowment a non profit, Kansas Athletics a non profit, rock chalk park (rcp llc) is a for profit company set up by a non profit. Who paid the 3 million 500 thousand to fairway llc (owned by mike stultz) for the land? Looks like a lot of explaining to do. Did Fritzel buy the land and give to ku endowment or did ku endowment buy the land, and give it to Fritzel. Will the Assists foundation money for the Regional basketball complex go to Fritzel or to the city? Pull the plug start over. Will the Ncaa find Ku athletics involvement in this fiasco worthy of penalties?
How is it that the assists foundation is run out of the Ku athletic department, along with its website?
How come no one is looking at Dale Sueferling in all this wheelin' and dealin'?
I do not think this project should move forward.
there is a petition on change.org asking the city to put rec center on ballot.
A lot of very well known Lawrence builders were in Junction City during this same period of time.
Likely are in the same situation.
Some of Lawrence names have been and perhaps still are in tax dollar trouble in Topeka,Kansas.
How about the big names in Lawrence,Kansas? Maybe not paying property taxes in Lawrence,Ks? Do they have the pleasure of cover up? or the turning of blind eyes?
Insider trading is risky business. Time to open all bidding to the world.
A Junction City lawmaker went to prison over the Junction City dealings. Beware....
Of course one had to read Topeka Capitol Journal/KC Star to know these things.
The most telling part of this is his comment that "everybody's predictions were wrong".
That's the problem with speculative development in a nutshell, and exactly why the city shouldn't be involved in it.
I thought the most telling part was when he blamed Junction City's policies for him not paying the delinquent taxes.
The prediction that he would be honest and pay his taxes sure was !
Schumm and KU Endowment claiming they did not know about the Junction City business is nonsense. It suggests only three possibilities -- incompetence, lack of due diligence or outright lying. If you are going to go into business with someone, you should at least take the time to find out how they have performed in the past.
Wake up commissioners! The city should not touch this project with a 10 foot pole.
Junction City fraud
Boom Town for Lawrence Developers
Freeman also said Tuesday that he and Wunder helped another Lawrence company -
Lawrence developers for a project to revitalize central Topeka's College Hill business district are in breach of their contract with the city because they failed to pay Shawnee County $130,196.77 plus interest for property taxes due May 10.
"First, the developer is currently in default under its loan obligations in excess of $16 million to the private bank group led by CoreFirst," he wrote. "In the event default of the loans is not remedied, the private bank group may move to foreclose on the property or appoint a receiver."
Topeka's city council voted in 2006 to provide about $5 million in tax-increment financing for a $30 million project in which Washburn-Lane Parkway Renovation built 183 apartments and 24,000 square feet of retail space on property it had acquired in the College Hill district, just northeast of Washburn University.
Link to the article:
Merrill failed to name the Lawrencians involved in the Topeka project. They are Bill Newsome, Doug Compton and Steve Roth,. according to the article linked.
A couple of things...
I grew up around JC and Manhattan. If you thought the GI's were coming back to buy houses you were nuts. More than just the Fritzel's guessed wrong on that one. In fact, I had a cousin who went bankrupt betting on GI's buying homes they didn't want. There is a reason you form corporations or LLC's; its to protect the assets of the owners. Mr. Fritzel as an individual owes Geary County nothing, nor should he pay for the debts of the LLC. Would it be "nice" if he did, of course, but despite the rumblings of the commissioner, he has no legal responsibility to do so. Finally, this has nothing to do with the agreement between the Endowment and Bliss. It's an entirely different deal. There is no speculation on whether KU needs the track, softball, soccer and tennis facilities, so put aside you r hatred of all things Fritzel and see this for what it is, a business venture gone wrong. It happens. As an aside, the Geary County reaction to the problem with many of the land speculators is also wrong. To not allow development if there are back taxes owed solves nothing, but insures that taxes will continue to be delinquent until the county forecloses on the property if they ever do.
"Everybody's predictions were wrong".
This could easily also be true of everybody's predictions that a huge new sports complex on the west side of Lawrence will draw massive amounts of people from out of town, and pay for itself many times over.
Exactly... we're talking pure and unadulterated speculation. Even the consultants were less than excited about the speculated end result.
So I guess there is an exception to the "corporations are people" rule when it comes to paying taxes.
And by the way, its not an "entirely different deal." Its failure evidences Fritzel's lack of business acumen. And it raises a key question: do the citizens and taxpayers of Lawrence want to business which this deadbeat.
"Fritzel said the Olivia Farms project was dealt a major setback in 2007 when the Geary County Commission vetoed an incentive package that would have allowed the new property taxes generated by the housing development to be used to pay for the infrastructure."
Risky business across the board. If the developer could not afford the business expenses such as property taxes perhaps the business was out of its' league?
Are these the same type of arrangements floating around Lawrence,Ks? Why should property taxes be abated in this manner? No one knows IF the houses will sell or what their values will be worth. Isn't this a lot like cooking the books? Wall Street speculation?
"Free Lunch: How the Wealthiest Locally Politically Connected Americans Enrich Themselves at Government Expense (And Stick You with the Bill)."
And its our very own local Plutocracy. Fritzel and Compton own this town, folks. We're just along for the ride and expected to pay them for the privilege of living in their town. No, I don't mind people making lots of money, but when they do it at the expense of others and take no responsibility, its not ok. Private profits. Public risk. Its happening everywhere.
(I'd like to know who'd want to live in one of those ticky-tacky houses? Looks like prison rehab housing.)
Did the developers seriously think that active duty soldiers, or former soldiers desiring to live in Junction City after discharge, would willingly purchase one of those units to live in as a private residence? I've seen some mind-numbing row house designs in my time, but my God...that Olivia Farms project looks like barracks housing. One after another after another, spaced with military precision, each structure exactly like its neighbor.
The horror.... The horror....
the most telling section of this story:
Junction City has been left with the highest level of public debt per capita in the state and has been forced to raise taxes, lay off city personnel and receive special legislation from the state to carry an extraordinary amount of public debt.
Forshadowing for Lawrence? Wake up, people! Don't let these robber barons continue to pillage; stop the private profits/public risk runaway train!
thanks for good investigative journalism, Chad...the business beat is where all the bodies are buried
If this were happening with another town's commission, we could laugh and say "what a bunch of dumb hicks". However, it is not so funny when it is happening in our town.
This whole deal stinks to high heaven, but our commissioners are still lapping up all they can get. Their attitude is how dare the common citizen question their 1% overlords, even though Fritzel repeatedly demonstrtes that he is unworthy of the protected status his cronys in Lawrence have annointed him with.
Put it to a vote if it's such a great deal.
"Everybody's predictions were wrong." I just had a vision of this line plastered on a bunch of signs carried by protesters in front of City Hall whenever the commission decides to sign all the documents etc.
Your yard sign alone would have gotten you elected. Stop whining.
One-Eyed Wilbur for City Commission!
I'm busy. You wanna run, you put up your own yard signs.
“I hope that group is proud of itself, because it has caused the taxes of a lot of working people — a lot of them soldiers who have done two or three tours — to go up,” said Scott Johnson, a Junction City commissioner. “It looks to me like they have the money. They just refuse to pay it.”
So seniors and struggling families taxes go up and they can't afford to pay them, then what. Don't they eventually get sold for back taxes thus making these people lose their homes? Does Fritzel care that the elderly will lose their homes? Probably not. When he ran Gene out of business, long time employees lost their pensions leaving them with little for retirement.
Pay the taxes Fritzel.
The screw job on Leavenworth aside, I think the failure to share its burden of the tax load should immediately disqualify Fritzel from even participating in the bidding process, much less being bonded in by KU Endowment, who is apparently already digging their heels in rather than do the right thing and kick Fritzel to the curb.
That 3.4 million dollar cut to area revenue represents a tangible deprivation to the citizens of local services and jobs and increases the proportional tax burden on all of us normal working citizens and small businesses trying to get by in a tough economy. Why would any local entity right now reward such locally damaging behavior by awarding any further contracts much less the additional monies in developer welfare that inevitably get requested and granted. I'm amazed Leavenworth had the balls to stand up and say "No" to the now-standard practice of suckling at the public teat by these speculators who can't seem to compete on a level playing field.
Pay your damn taxes and then you can play in the market again. Shame on KU Endowment for having no spine.
Chad, has the LJW ever done an article on how much back taxes are due to the city/county by developers? I was thinking they had, but I might be remembering wrong.
Did anyone else notice these parts of the article:
“It really is not the citizens’ fault that their lots aren’t selling,” said Johnson, who in addition to serving on the City Commission is a housing developer.
“Some of us feel like we were overcharged,” said Jack Taylor, a Junction City commissioner who also is a real estate agent...
So, it appears to me that two of the city commissioners are competing real estate developers who imposed a no build ordinance on their out of town competitor's land. Sounds to me like the local Junction City Commission with two competing real estate developers voting, decided to shut down the out of towners while pushing their own real estate.
"This is not a speculative development project"
Bliss LC (Fritzel) formed 7/19/2012
6 1/2 month old, unknown financial ability
Never built a softball stadium
Never built a soccer stadium
Never developed KU- NCAA track and field facilities.
KUEA reportedly giving Fritzel/Bliss a no-bid-contract on all infrastructure to serve Rock Chalk Park without detailed plans and specifications or independent cost estimates.
Six month old Bliss LC (Fritzel) is granted by this city commission an intent to issue up to 40 million in IRB's to build his project: of yet to be released plans and specifications or any independent cost estimates.
City also has authorized Bliss to proceed with construction KUEA land.....
Seuferling has been bamboozled---
a major embarrassment for KU.
Where's the Board of Directors???
Isn't it wonderful how just walking away and screwing those who are left holding the bag is considered merely good business practice if you're wealthy enough to hide behind a corporate veil?
A couple of Fort Development owners currently direct KUEA, Sutherland sits on the executive board and Padgett is a trustee. Did these guys vote for Fritzel on behalf of KU Endowment to be in charge of their 50 million dollar project for KU.
Better yet, who the hell is Olivia?
With business people like this, is it any wonder Lawrence is business unfriendly. With friends like this, who needs enemies?
lol, where did they get their advice that the new influx of 'Big Red One' soldiers would want to BUY?! Of course enlisted soldiers who are stationed at a base for only 2-3 years would want to rent...especially in a down economy. Anyone with ANY knowledge of the military should know that fact.
In 2005 or maybe 6 the DOD came in to the area (Geary County/Junction City, Riley County/Manhattan as well as Clay County and set up many, many, many meetings telling the city and county leaders that the military was building up the troops at Ft Riley and returning the Big Red One brigade. Along with more soldiers came the support personnel. The DOD stated that they would need housing for about 8000 soldiers plus housing for support personnel. They would need housing of every type. Apartments, duplexes and stand alone houses. The DOD said the soldiers would need and want restaurants and entertainment. They really fanned the fires of hope to revitalize the area with hopes of prosperity. Greed was a player as well. I think that the city fathers were hoping for a bright partnership with the military....except of course the infamous mayor of JC. At the time of the building "boom" the economy was great (well before the mortgage industry scam).
The building boom ended pretty quickly when Pres. Bush ordered the "troop surge". Once the soldiers left the support staff went with them. A great number of spouses, children, etc left to go back to their hometowns. So at that point civilian development essentially ended. Development has continued on post with new schools and a nearly completed military hospital.
Then in October 2009 the mortgage industry scam crippled the economy nationwide.
Because Fritzel and other developers walked away in 2009 the citizens of JC now have extremely high property taxes. The entire town is bearing the burden of the housing push.
The city policy for getting a building permit requires that the taxes be paid up to date on the lot the developer wants to build on. Fritzel wants to put in another row of houses (15? is what I have been told) and not pay any of the taxes which have not been paid for nearly 3 years.
Did the LJWorld actually do some investigative reporting? Doubtful. One or more of the no growth ninnies spent some of their unlimited free time digging this up. These are the same folks that dig through old Maters papers looking for buried dead bodies.
"no growth ninnies"
Let's elected him to some gubment office and call him "W" for short.
Don't Mr. Chase's son-in-law have a few fingers in this PIE???
Who is Mr. Chase? Who is Mr. Chase's daughter? Who is Mr. Chase's son-in-law? What "pie" does he have his fingers in? We need to know!
This is a perfect example of why these guys need to keep building and building with more and more tax breaks, tax abatements, special tax districts, tax breaks on building supplies and equipment and have no bid contracts. It's very much like a ponzi scheme where if they don't get a new set of suckers (we tax payers) set up every few months to help them to catch up on their payments on their latest building development, their jet airplanes, vacations to Rome, and yards full of zebras, their money starts to dry up quick. That's why we need to hurry up and get this recreation center built so Fritzell can finally start to pay off the taxes on this latest project with the taxes he's going to save with the incentives we're going to give him with the recreation center. How can anyone expect these guys to go on gambling with our money if we don't give them more money to gamble with?
Fritzel claims that he is not making a dime on the proposed rec center, but rather, is involved because he "loves Lawrence." Any reasonable philanthropist with an ounce of dignity would have pulled the plug on this project the moment the attacks on his character surfaced.
That Fritzel continues to hang indicates but one thing: he is lying through his teeth when he claims he is not making a profit. Either that, or he is a complete fool.
Thus the question becomes: should the taxpayers of Lawrence be doing business with a person who is obviously a Knave or a Fool? Or perhaps he is both?
Man thats alot of money... Someone needs to be held accountable for that.
A man is only as good as his word. This is why corporations should never be considered people. It should also be a lesson that Thomas fritzel isn't to be trusted.
Thank you for the information. Your article was timely, informative and, given the general attitude of your newspaper and Lawrence city government, probably courageous. One item not discussed is the cost of infrastructure (streets, curbs, gutters, sidewalks, and sewers). These are high dollar items and the City Commissioners, as well as Fritzel, have been very ambiguous as to how those costs will be paid. This is the same issue giving rise to the situation now facing Junction City . Should we not be demanding more definitive information from our elected officials and Fritzel?
Once again, this publisher lowers the standard for responsible journalism. I find the unauthorized photo of Mr. Fritzell (obviously at a KU basketball game) on the front page of the newspaper tabloidesque and an invasion of privacy. Did he give you are release for that photo? Your reporting is one-sided, mean-spirited and shallow. Perhaps we should ask who is wagging your tail LJW?
How about some in-depth research and responsible journalism that aims at revealing the truth, not making a villain out of a local business man.
I am cancelling my subscription on Monday. Phew-!
Ridiculous, I think you've got it all wrong. You should cancel your subscription because the paper failed to report this story earlier than they did. And why would the paper need permission to use a picture of a public figure and publicity seeker like Fritzel. In an earlier LJW article Fritzel himself admitted he was building the recreation center for his love of the community and the publicity and attention he was garnering from doing it. I'm thankful the paper is putting this out there, it allows us all to make more informed decisions on issues important to those of us who truly do care about the future of our community.
"Did he give you are release for that photo?"
He's made himself a public figure, and occasionally having your picture published goes with the territory.
" Your reporting is one-sided,"
From the article--
"Fritzel declined to be interviewed for this article but provided a lengthy written statement"
Perhaps what you really mean is that nothing should be printed about Mr. Fritzel unless it's a laudatory puff piece that he can edit to his own liking.
You obviously haven' a clue as to the legal right of privacy in American. A person's image, when in a public place, is not subject to privacy laws. And attending a KU basketball game is certainly considered public.
After some research, I stand corrected on the photo. This publisher has rights under "fair use" for newsworthy story. If this is newsworthy is debatable. IMHO
I would like to read Mr. Fritzel's statement Chad.
Facts and timing would be beneficial and help clarify whether this story is relevant to the our little project here in Gilligan's Island (Lawrence).
An unbiased, fact filled story would help. Half baked sensational journalism.
I agree with a lot of you who think the City & KU should run, not walk away from this deal! I thought it smelled a little before, but it really stinks now. I have NO use for anyone screwing over a VET!
Chad-perhaps some disclosure about the relationship between the Simons, the Fritzels and the purchase of the 645 New Hampshire Building in 2005 by Postal Investors, LC. Did something go wrong with that deal so the Simons are out to get Fritzel?
Something smells funny.
"Something smells funny."
And as this article points out, some of that smell is emanating from Junction City.
Fritzel, Sutherland, and associates clearly did little due diligence on the "Olivia" project and/or they are not particularly astute. Anyone with a modicum of experience with the military (do any of these gentlemen have even the slightest bit of military service?) would have known that the highly transient population in the military will rarely be interested in buying homes in the area of a post or base. This is especially true for enlisted soldiers during a time of war. The enlisted soldiers who tend to live in the Junction City area would comprise the greatest market, but they will either rent, or if housing is available on the base/post, they will choose to live there. The result for Fritzel, Sutherland and fellow "investors" was predictable and not deserving of sympathy. Carpet-bagging and attempted exploitation of the military for their personal gain come to mind.
Among many questions for Lawrence, as several commentators have mentioned, is whether Fritzel has even a modicum of knowledge or even interest in building facilities that will qualify under NCAA standards? It would be a shame if the new track does not meet those requirements--how many of these has Fritzel built, who is he engaging to design the track, and how many tracks has that person or firm designed?
Please do not drag the name of Lecompton into this muck.
Perhaps all developers seeking tax breaks, incentives, etc. should be required to provide detailed information about any back taxes they owe, loans they're delinquent on, etc. and the paper should make that information easily available to Lawrence residents.
And/or the city commission should decline to provide any such favorable treatment for those developers.
Perhaps all individuals seeking government benefits such as welfare, food stamps and subsidized housing should be required to provide a detailed accounting of their past record of having received assistance, including any instances where they have been delinquent on rent or paying of their bills and then the paper should provide that information to the public.
And/or those agencies charged with giving out such assistance should decline to do so if either the information is not given to the public via the newspaper or the individual has in the past not met their financial obligations.
Yea, all those cadillac-driving, big-screen teevee watching, caviar-munching poor people are really bilking the public.
Right, because a poor guy on welfare is exactly analogous to a rich developer.
And, assistance we provide to the poor who are struggling to make ends meet is exactly analogous to tax incentives, breaks, etc. we provide to rich developers.
Jafs and Bozo, you're missing my point. My objection was to Jafs' suggestion that anyone's tax information ought to be given to the newspapers and then made public.
As both of you know, I've advocated in this forum for a flat tax. One of the reasons I think we should go that way is because it would greatly simplify our tax system, one that as currently operated, greatly benefits the wealthy. The fact is this, if an extremely wealthy person took their tax information to 10 different accounting firms, they would get 10 different tax returns. I've gone to accounts who have asked me how aggressive I want to be when they prepare my taxes. Essentially, they are asking me to define what my fair share is. Again, you both should know that is another concept I've been opposed to.
Getting back to this particular situation and this particular individual, and I'm speculating here, but we have a developer with multiple interests, multiple LLPs, multiple complex taxing questions. With him, I suspect it would be true that he could go to those 10 different accountants and get 10 different returns. Whatever road he would then choose, the various taxing entities, be they city, county, state or federal, it would not at all surprise me that they would come up with a different number. In fact, I'd be surprised if they didn't. Then there are multiple appeals process that we all have the right to avail ourselves to.
I recall the years of my youth when I filed a 10-40EZ form. This is a completely different animal. The bottom line is this, it's an extremely complex system with no clear right or wrong answer. Given that, I don't think that information should then be made available to the newspapers for public dissemination. No more than those who receive public assistance should have their financial histories published in these pages.
Wow - that's pretty circuitous and tortured.
It's not at all unclear - if you owe back taxes, you owe them. And, if you are delinquent on your loans, that's also clear.
I never said we should provide all of their information, just those things, which indicate either financial instability or lack of integrity, or both.
Seems like due diligence to me.
"if you owe back taxes, you owe them" While that sounds cut and dried, it's not. Because the tax system is so complex, with multiple filing deadlines that can be extended, and then multiple routes of appeals that may take multiple years to resolve, it is not at all clear that simply because some taxing entity sends you a notice that you owe a certain amount of money that that will then be the final outcome. it's a long and winding road. It's complex. Taking a snapshot at any given time may or may not be insightful as to what the final outcome will be. To then publicize that snapshot seems irresponsible in that it may or may not be disseminating true information.
Well, if you extend your deadlines, then you don't owe "back taxes".
And, though I agree that the tax code is too complex, and the IRS moves slowly, the simple way not to owe back taxes is simply to pay them on time the first time, right?
No, I don't agree. That's because as I said earlier, ask 10 accountants and you'll get 10 different answers. There is no particular reason to think that just because the IRS or the state says you owe a certain amount that that is the actual amount owed. Your accountant and tax lawyers may be telling you that the actual amount owed is different. The actual amount might depend on how a certain person at the IRS is interpreting some very complex set of numbers. Your attorney might interpret them in a very different way.
Think of it this way. The IRS says you owe a certain amount. That's like a prosecutor saying you committed a certain crime. But just because he says you did doesn't mean you actually did. There is still a long and complex process that needs to be followed before we say with certainty if he is correct or not. With the IRS, you can appeal, but unlike the criminal case, the appeal is done prior to any finding of guilt.
BTW - I once got a huge bill from the IRS that included back taxes, interest and penalties because they went back a couple of years, made some assumptions and based their calculations on that. After another year, we came to find out that the IRS misplaced part of our returns and it took us some time to figure out what they had done and why. In the end, we owed no additional taxes, but my point is that if you took a snapshot on the day we received that IRS letter, you might assume I was behind on my taxes. I wasn't. The question I have is that in the case in question here, is this some sort of final determination? I don't think anyone can say for certain. If we extend your proposal to publish all sorts of snapshots, are we really giving the public good information? I don't know.
I'd say the IRS is the arbiter of taxes owed, not your accountant, etc.
I get your point, though - I suppose it's possible that all these developers who aren't paying their taxes are in that situation, but I think it's very unlikely, and much more likely that they're simply not paying their taxes and playing a bunch of games.
We could of course publish whether or not the developers were appealing the back taxes as well, and whether or not there was a final determination.
Two quick points. First, saying the IRS is arbiter fails to see that the IRS is itself many layers that need to be gone through before a final decision is reached, sometimes by them, sometimes by a tax court. Second, the tax codes give several perfectly legal ways of avoiding paying your taxes for some period of time. File for an extension and then another and another, and then pay your taxes. In that way, you have your money for a longer period of time should an opportunity come up. If I had to guess, that's what I would say is happening here. The taxes will get paid, eventually. Let's face it, if the proper process wasn't being followed, the city of Junction City could simply foreclose on the properties in question and sell them off for the back taxes. Because they are not leads me to believe that whatever legal maneuvering is taking place, the process has not been completed. But all this brings me back to my original point, if you're going to have a very complex taxing system, you're almost obligated to allow allow for an equally complex process.
The point is that accountants, lawyers, etc. may have a variety of opinions about your taxes, but the IRS will make the final determination of what you owe, not them.
If you're using legal methods of postponing paying your taxes, then you don't owe "back taxes", right?
I think the city could in fact do that, but doesn't want to, because they'd wind up losing big time financially. But I don't know for sure. The problem is that the lots aren't selling - how much could the city get for them if they owned them? He owes over $3 million in property taxes.
A quick search shows that you can get an extension to file, but are expected to pay your taxes at the time you file the extension. Or you can file on time, request an extension to pay, but you are assessed interest and penalties on the amounts owed.
So, basically, the IRS doesn't like it if you don't pay your taxes on time, and even though they'll grant an extension of time to pay, they'll penalize you for it.
As I said, the best way to avoid owing "back taxes" is to pay them on time.
Finally, this story is about property taxes owed to the city, not federal IRS taxes, so the whole thing is a bit different, probably much less complex.
Again, Jafs, the IRS may or may not be the final arbiter. A tax court is always an option when a judge will be the final arbiter.
And just because the IRS says you owe "back taxes" today, doesn't mean that will be the final determination. It might. Or it might not. But that's precisely why I cautioned against taking a snapshot approach. Sure, the IRS will say it's "back taxes". But is it really? The answer is a definitive maybe.
As to the issue of the city not wanting to take over those properties, I doubt your concerns are correct. Taxes owed would only account for a very small percentage of the value of the properties. What are property taxes here, roughly 1%. If I would be delinquent for even 5 years, my debt in taxes alone would be 5% of the value of my property. For the city to lose, they would have to sell those properties for less than 5% of their assessed values. If they can't do that, a very unlikely scenario, then that would be evidence that the assessed values by the city were greatly overestimated, another grounds for appeal and more appeals.
The whole IRS discussion is really irrelevant, since the taxes in question here are property taxes owed to the city.
But, even if a judge is involved, my point stands - your accountant's and lawyer's opinions aren't any sort of final determiners - I wouldn't give their opinions so much weight - if you have questions about IRS taxes, I'd contact the IRS and ask them directly.
Did you read the article before commenting? This whole thing is a perfect example of why cities shouldn't be involved in speculative development, in which people suffer from "irrational optimism". Your numbers are off - if you calculate it, the city only has to get about 1/2 of the assessed values to get less than the taxes owed (there are also penalties involved).
"Everybody's predictions were wrong" - from the horse's mouth.
"Everybody's predictions were wrong" - How about we substitute the phrase "Best available information"? Would that make you feel better. But if not, what information would you base decisions on, if not that?
Is it just the picture or are those the ugliest houses you've ever seen? They appear to be stacked on top of one another with the garage all you can see of the house. Unless we are looking at the back of the houses, that is one hideous development. There don't appear to be any yards.
my thoughts, too. Look like Tornado targets and only one small step from a mobile home park.
i find it hard to believe that our city leaders cannot have been aware of this situation, do we really think there isn't going to be more to this story
The Fritzel Family has long been in the Lawrence area, many extended family members operating businesses as well as a large agricultural dairy operation., All that I am aware of operated these endeavors is a very up-front and honorable manner; and now comes along an individual who seems to violate the honorable impression of his forebearers. I'm sure that Gene and Charlene are proud of their son Tom's work in the community, but I also bet that the seemingly seedy manner in which he operates give them some "legacy" pause. The old theory of "alternation of genations" seems to have life here!
My error in my prior post. Should had read "alternation of generations" a valid biologikcal concept (or theory to the creationist non-believers)!
Hit piece. Few facts. Lots of innuendo.
"Thomas Fritzel, the key private partner in Kansas University’s proposed $50 million Rock Chalk Park athletics complex, is part of an investment group"
What percentage does he own? Is he a minority member or a controlling member? What does the Operating Agreement dictate on what is required to make a decision for the LLC? Simple majority? 2/3? Unanimous?
Lots of mud slinging in the article without a lot to back it up.
Why don't you do a bit of research and find out those answers, which you can then share with us?
Because that's the paper's job.
They're your questions - you can answer them if you like.
I expect that those are questions that would have been asked, if Fritzel had consented to be interviewed. Why do you suppose he refused to be interviewed? Could it be he didn't want to answer the questions you posed?
Funny we havn't heard a word from our illustrious Governor about this one? The poor get their taxes increased by 5000% so they can subsidize these multi-millionaires who don't pay any taxes at all. It makes me sick to my stomach. The rich are all in bed together & everyone knows it while the middle class gets their unions & benefits stripped away from making a decent living & the poor & middle class pay for the ever higher sales taxes for groceries so they can eat (God forbid). But do not worry folks because Mr. Brownback will be at church on Sunday before the cameras so everyone knows he is a "Christian" man who helps & feeds the poor as Jesus taught him to do, right?
Do you think there should be a citywide vote on a new rec center?
If you agree, please sign the petition below that calls for the City Commission to put the rec center project to a public vote in April:
SIGN PETITION HERE
Compton defaulted on a 20m loan in topeka and with this on his resume, the city of lawrence gave him a free pass on his latest building on 9 street. Lawrence city commission has no shame when it comes to dealing with these guys.
jhf - that's why I oppose speculative investments by cities and other public entities.
Predicting the future is risky.
Let the developers take the risks, and let cities provide infrastructure and basic services. If developers are right, and make money, great. If not, that's a shame, but that risk is part of their game. It shouldn't be part of the city's game though.
And, meanwhile, they should pay their taxes.
"Irrational optimism" is behind all of the boom/bust cycles I know of, from the Great Depression to our most recent mess. I prefer a more cautious approach.
Yes, predicting the future is risky. But necessary. When I first moved to Lawrence, it was half the size it is now. Between 1940 and 1950, Lawrence's size grew by 62%. During some decades, Lawrence grew at a 40% clip while the last decade saw a 9.4% increase in size. That's a lot of growth. If someone isn't predicting the future, there will come a time when kindergarteners won't have enough classrooms to accommodate them. Or we might be swimming in extra space. We might have a housing shortage. Or a glut of housing. We may have a shortage of jobs, roads, parks. Or we may have too much of all of that. Someone better be in the business of predicting the future. That's not to say your concerns aren't valid. But I'm having a tough time imagining what Lawrence would be like if someone wasn't using the best information available and then making decisions based on that.
Let me throw out a little concept here, one that I'd like for you to consider. We hear much about the housing bubble, the dot com bubble, depressions, recessions, etc. It's like CNN breaking in with a Breaking Story that a plane has crashed. It's news. What we don't hear about is all the thing going right. All the projections that turned out to be accurate. CNN doesn't break in and tell us all that a plane has landed safely with no problems. That's not news. So while many people worry about traveling by plane, the most dangerous part of that journey is the drive to the airport. And while you're hearing about the projections gone wrong, you're not hearing about the projections gone right. You're perspective has become skewed.
There's a very clear difference between trying to plan for growth based on realistic and sober projections, and the kind of crazy pro-development optimism that these kinds of projects involve.
If we had people actually looking at numbers without bias, and trying to decide what would realistically happen in Lawrence, and basing our decisions on infrastructure, etc. on that, I suppose that might be ok.
In either case, we may have a shortage or glut, depending on how our predictions were off, and in what direction.
I'm not willing to gamble with taxpayer dollars, that's all. And, there are enough examples of these kinds of speculative investments gone wrong for me to see that it's clearly a gamble.
If you have the time, and inclination, you could look up all such projects in the Lawrence area, and analyze the net gain or loss from all of them. It's enough for me to know it's a gamble, with a real chance of loss for taxpayers.
Of course, that's a hard thing to do, because we don't really know what would have happened without the projects, so there's no real control group.
Do you go to casinos and spend your hard earned money there? People do win in casinos sometimes, right?
The population growth in Lawrence between 1980-1990 was 24.4%. Then between 1990-2000 it was 22.1%, before slowing to the aforementioned 9.4% from 2000-2010. I have to believe that someone in the city was trying to find businesses to come to Lawrence to accommodate a growing work force. I have to believe someone in the school district was advocating for more schools to accommodate the increases in enrollment. I have to believe that people were encouraging more housing so these people would have a place to live. I believe projects have been made, over and over again. You keep wanting to focus on the failures. I'm not saying they're not real. But since the successes aren't publicized, you're not hearing about them. But they're just as real. In fact, they're more real because there are more of them. You just don't hear about them. If all of these projections were wrong, or many of them were, we'd be having kindergarten classes overflowing. That we don't is an indication of a successful projection. But it isn't news, so you don't hear about it. We don't hear about massive unemployment or of a huge housing shortage. That's because of correct projections.
You mentioned casinos, let's discuss that for a second. From their point of view, a success is when you go there and lose money. They are in the business of taking your money. From their perspective, a failure is when someone wins money and the greater the failure, the greater amount someone is walking away with. Yet go to a casino or play the state lottery and all they publicize is the failures from their perspective, which would be the winners. The losers don't have their pictures taken. Those who play the lottery and don't win aren't written up in the papers. Again, it's only the failures that get publicity.
If my child had come home yesterday from school with a note that he had failed a major test, or perhaps he had misbehaved in school, I should be rightly concerned. But he came home with no note at all, an indication that generally, everything went well. Only the bad news warrants a letter. Good news gets nothing. Bad projections gets written up in big articles. Correct projections get not a whisper.
Well, we expanded infrastructure instead of focusing on basic maintenance, and so we spent a lot more money than we might have otherwise.
And, we do seem to have an excess of housing, as far as I can tell, and too much turnover in retail, etc. especially downtown.
Lawrence's growth has been mainly due to commuters, folks who work in KC or Topeka and live in Lawrence - fewer people, percentage wise, both live and work in Lawrence now than when I moved here. If you look at city data, an interesting site, you'll find that there's a large disparity between average wages and costs of housing here. That's true of all college towns, of course, but it's worse here than in others.
If more people come here, then there's a market for all of those things in the private sector, and they'll provide them. Similarly, there's a need for public services, which will also be provided. I simply oppose providing massive tax breaks and incentives to private businesses based on overly optimistic projections of future revenue.
Do you spend your hard earned money in casinos? In the long run, everybody loses, but in the short term, you could win big. Of course, you could also lose big.
Feel free to do the research if you like, then you can come back and tell us what the big picture is like, and whether or not there have been more successful projects than unsuccessful ones, and whether or not the city has gained or lost financially from them.
By the way, your comments about only negative things getting a lot of publicity is generally true. But, I hope that schools give more positive reinforcement than that - it's been well determined that the best way to reinforce behavior is by a majority (large?) of positive reinforcement, combined with a smaller amount of negative.
In other words, celebrate your children's successes, and give them lots of attention and positive energy for them, rather than just ignoring them and focusing on the mistakes.
We've gone off on a couple of little tangents, here, so I'll try to bring those back a little.
You've asked if went to casinos. Let's suppose, for the sake of argument, that I told you I did go, twice a week. Suppose I told you it's part of my regular routine, that I go every Tuesday and Thursday. Now suppose I told you that this past Tuesday I went there and won $1,000. What have I really told you? Nothing, really. Because you're correct that in the long run, most people lose. Saying I won on one day doesn't really say much at all. That's the snapshot approach I cautioned against with my original thought. If you really want to know how I've done at casinos, you might need to ask how I've done in the past ten years, or twenty years. But certainly not how I did Tuesday.
You say there is a glut of housing in this town. I agree. We've all paid for infrastructure to support that housing glut, a sure drag on our collective wallets. Then again, Economics 101 suggests that if there is an oversupply of a commodity compared to demand, prices go down. So if you've been in the housing market, either as a renter or purchaser of a home, then you've benefitted by lower prices. Of course, there are going to be a million variables, such as when you purchased. But I'm speaking in very general terms. So you paid for infrastructure but paid less for housing. Then again, if there was a shortage of housing stock, all that would be reversed, again with the million variables. But what you can't do, at least in my way of thinking, is to buy a house at that low price, and then complain that you're unfairly having to pay for the infrastructure. You can't take a snapshot approach.
Let me give you just one more example. Suppose we looked at the taxes we all pay and then asked our attitudes towards that. But suppose we only asked that question and only looked at the data for one day each year, that day being April 15th. Well, I don't need to be some researcher with a Ph.D. to guess that you're going to get some pretty skewed data about taxes and some pretty skewed data about people's attitudes towards taxes if it's limited to just that day. That snapshot approach will likely lead to misinformation rather that information. It's that type of information that I initially cautioned against when looking at one person's tax bill in regards to one of many projects in one city amongst many, with one partner amongst many.
The question about whether or not you go to casinos is really a question about whether or not you gamble with your hard earned money. I don't, and I don't want to gamble with taxpayer money either.
As I said, if you want, you can try to do some research, and arrive at the big picture over time in Lawrence if you like - I'd be interested in those results, but not enough to do that research myself.
One would think that oversupply should lower prices, but Lawrence is odd that way - I'm not at all sure it does.
I see no problem providing the information I mentioned, especially if we include appeals and/or final determinations. I think it's important information for those making decisions about partnering with these developers, ie. the city, and/or us.
It's a lot better than just buying into the collective overoptimism about future revenues and jumping blindly on board with developers who've failed to pay their taxes and/or loans on other similar projects.
"I see no problem providing the information I mentioned, especially if we include appeals and/or final determinations." - Would you be interested in how many jobs a project like that provides? Are you interested in how much money is pumped into the local economy? Are you interested in how much money all that activity generates into taxes? Would you like to compare that against estimates of what would happen if that money didn't come into the economy? How many carpenters might lose their homes because they can't pay their mortgage, further depressing the local housing industry? How many diners will close because plumbers aren't eating out, causing employees to seek whatever jobs are available or go on unemployment? Are you interested in the costs to taxpayers for unemployment for the dozen carpenters, dozen plumbers, dozen electricians, dozen laborers? Are you interested what effect having so many unemployed tradesmen will have in setting wages for those in similar occupations throughout the region?
There are risks whenever a project like this goes forward. There are risks if you do nothing. Not taking a risk isn't an option, Jafs, no matter how much you would like it to be. The only real question is will we seek the best available information, knowing even that will be wrong sometimes. Or will we ignore those projections because they aren't correct 100% of the time.
Any accurate information like that would be welcome.
Of course, there's no control group, so there's no way to know what will happen if we don't go ahead with specific incentives for particular projects, and thus no way to really compare accurately.
All of the things you mention are examples of the kinds of overly optimistic projections I'm talking about, and are frequently incorrect.
Why don't you take some time and research the history of tax subsidized, abated, incentivized projects with private businesses, and analyze the net gain/loss to Lawrence? I'll be interested to hear the results.
Then, once you've done that, compare that to what would have happened if we hadn't gone ahead with them (oh wait, that's impossible to do).
My main point here remains - I don't want us to do business with developers who don't pay their loans and/or taxes - either they lack integrity, or they're not good businesspeople, both of which would disqualify them in my book.
And again, I'm not suggesting the city "do nothing", I'm suggesting that it collect taxes and provide public services, just as it's supposed to do.
warren buffet goes on every talk show, is featured on every liberal media outlet (CNN, ABC, CBS, NBC etc) about how the rich need to pay their fair share, even stating he pays less taxes than his secretary, and everyone gobbles it up without question....then, it turns out one of his companies has been fighting the IRS for the past 10 years because the tax bill is $1 BILLION DOLLARS.
not a peep from the liberal left on here about mr. buffet's hypocrisy...since he backed obama, it doesn't apply....but what if mr. fritzel was a big democratic backer, locally and nationally? then, he'd be good, right? i wonder if mr. fritzel will come out as a big democratic donor? then it should be smooth sailing.
What does Warren Buffet have to do with this? Jeez, keep on the subject at hand, please.
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