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Archive for Wednesday, March 27, 1991

COMMISSION WARY OF RISK IN PROJECT

March 27, 1991

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After engaging in a philosophical discussion about risk during their meeting Tuesday night, Lawrence city commissioners decided not to take one on a local historical building.

The risk involved releasing the Chelsea Group, owners of the Lawrence Riverfront Plaza, from liability for their lease on the Consolidated Barbed Wire Co. building.

The 99-year-old building, located beween city hall and the Riverfront Plaza at Sixth and New Hampshire streets, is listed on the Kansas Register of Historic Places.

Two local residents, Mike Elwell and Ron Miller, want to renovate the building and turn it into a sculpture garden surrounded by artisan shops.

BUT FOR both parties to get what they want, Commissioner Bob Schumm said, the city would be taking a financial risk because it could "get stuck picking up the pieces" if the renovation project failed and Chelsea Group had been released from responsibility for the building.

City attorney Gerald Cooley agreed. "That is essentially what you're doing here, you're taking a risk if this thing (agreement) goes through."

Under the proposed agreement, Chelsea would transfer the lease on the building to Elwell and Miller for an undisclosed price, which would be paid by Nov.1.

Under the proposal, the lease transfer would relieve Chelsea from all responsibility for upkeep of the barbed wire building, which was a condition of the firm's original agreement with the city when the construction of the Riverfront Plaza was approved.

"IF THE renovation project fails . . . for whatever reason, the city would be obligated to take this (building)" under the terms of the agreement, Cooley said. "If this goes through, Riverfront walks."

Elwell and Miller, who have spent 18 months studying the feasibility of a barbed wire building renovation, urged commissioners to take a chance and approve the release of liability agreement.

"We've spent a lot of time on this project," Elwell said. "If we give up on this, you're looking at a fairly long time before anyone might be willing to take this up again . . . and the building is just going to deteriorate."

The renovation project would cost an estimated $600,000, which also would be used to bring the building up to current codes and enable the developers to get a building permit, Elwell said.

HE OFFERED an "insurance downpayment" of up to $100,000, which could be kept by the city if the liability release was approved and the renovation project failed.

However, City Manager Mike Wildgen said, "I don't know if we're better off with $100,000 and the building."

After a lengthy discussion of what the city could gain and lose if the renovation project failed and the city were forced to resume responsibility for the building, and whether it was worth a gamble, commissioners decided they wanted a little more insurance.

Schumm suggested that Cooley work with Elwell, Miller and Chelsea to formulate a document outlining a way to raise the full $600,000 before the city would approve the liability release.

"I think that's a solution that everyone can work with," Schumm said.

The document eventually would be sent to commissioners for formal action.

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