Archive for Saturday, December 15, 2012

Simons’ Saturday Column: Unique development arrangement raises questions

December 15, 2012


What started as a relatively simple, clear-cut scheme to develop a good — actually, an excellent — city recreation center has turned into a tangled, confusing and embarrassing mess.

Over the years, Lawrence residents have witnessed numerous conflicts over various development projects, but few, if any, match what is going on today with the recreation center effort.

What started with city officials trumpeting the plan as a means for the city to enhance its relationship with Kansas University now has expanded to include many other players. In many ways, the city really is not calling many of the shots about how the project will be developed.

What started as a city-university program now has evolved to include the KU Endowment Association, KU basketball coach Bill Self and his Assists Foundation and KU Athletic Director Sheahon Zenger as major players. City politics now are playing a role, with local developer-builder Thomas Fritzel emerging as the central player.

In fact, what started as a KU-city project now is a Fritzel-city project with the city, city commissioners and various planning officials caving in on many long-time city policies.

The Endowment Association has a contract to buy the land where the recreation center would be located and is committed to having the entire project built by Fritzel, who also will own the project’s KU facilities and lease them back to the university. Having handled the land part of the deal, the Endowment Association has washed its hands of any consequences or negative fallout from the deal it helped broker. It appears the university, Kansas Athletics and perhaps Self were used as a front or window dressing to generate enthusiasm and a belief that all aspects of the development would be above-board.

Now, Kansas Athletics is into the project hook, line and sinker, the Endowment Association has OK’d a development arrangement it has never before granted, and some city officials are intent on jamming this project through in record time, probably hoping to get it all done before it becomes an issue in the next City Commission election.

Under the deal and zoning Fritzel is working out with the city, he will control the entire area except for the 20 acres that will be owned by the city. Kansas Athletics will lease its facilities from Fritzel, and, apparently, when KU is not using the facilities, Fritzel will be able to use them for a variety of events and pocket proceeds from those events, such as tickets, concessions and possibly liquor sales. Endowment officials say they and Kansas Athletics would have to approve the events, and the city would have to issue a special use permit, but it still represents a huge financial opportunity for Fritzel.

This is just one example of how far and how fast the project has been allowed to develop without the city — or the public — knowing all the details of the plan.

Adequate parking and traffic flow in and out of the center and how this will affect neighbors are issues that remain to be addressed. How long is the lease Kansas Athletics will sign with Fritzel? Who actually controls acreage not yet designated for specific uses? Will additional commercial development be permitted?

Some observers have said the only way to find out all the details is if and when someone files a legal action related to the project, which, in turn, would require many of the players to testify under oath.

If Kansas Athletics leases the facilities from Fritzel, who will own them, who, other than the university can use these facilities?

There are too many unanswered questions, too many strings or threads attached to the project that keep unraveling and revealing new information and details.

Lawrence deserves better oversight by city officials. This is a deal unlike anything in the city’s history.


David Holroyd 5 years, 4 months ago

Dolph, how is this any different than the scheme cooked upmyearsvago regarding Jayhawk Towers and the Phillips Oil guys and Adams family? Or the convoluted deal for the land at 11 th and Indians that had a rather suspect sale. Published sale of lots in Kansas Register and only one offer! Dolph won't touch that. Or maybe theJWcould do some fairness in reporting about how the Planning department has run off investors unless the are pa select few connected with KU.

Bob Forer 5 years, 4 months ago

"Unique development arrangement raises questions"

Lets call a spade a spade and replace "Unique" with "Unorthodox" With millions of future tax dollars on the line for a dubious project, now is not the time to be polite.

pinecreek 5 years, 4 months ago

'some city officials are intent on jamming this project through in record time'

Names, please?

somebodynew 5 years, 4 months ago

From what I have read - everyone except Amyx. He seems to be the only one with any sense on this matter.

Steve Jacob 5 years, 4 months ago

Plus who knows if the centers biggest fan, Carter, can even vote for it?

irvan moore 5 years, 4 months ago

thanks mr simons, the more this is exposed the better off we are. the rush to finish off this deal before the elections stinks

Budgets_Smudgets 5 years, 4 months ago

Someone told me this week that the city building in this project would be all-electric, as in it would be heated by electricity, not natural gas. Could this be true?

msezdsit 5 years, 4 months ago

This project has stunk from day one. Keep the tax dollars out of it. If they are calling the shots, let the developers pay with their own money and abide by existing codes and zoning for that area.

KiferGhost 5 years, 4 months ago

Tax payer dollars from the ordinary citizen, tax dodge for the rich.

KiferGhost 5 years, 4 months ago

Since Fritzel's father in law is providing the endowment funds and Fritzel will own it is the endowment being used to dodge taxes? Aren't the funds given to the endowment tax deductible? Is that the purpose of an academic endowment now days? Otherwise, why doesn't Fritzel just buy it outright with the money from his father in law and avoid all the shenanigans?

David Reynolds 5 years, 4 months ago

Because he probably can't raise the money himself.

More than likely the current arrangement benefits himself & his family. Additionally the good tax payers of Lawrence will grant a very low cost loan via a city sponsored bond issue that exempts his property from taxes. There are other grants that can accrue also.

The citizens of Lawrence need to wake up and recognize the "sweet deal" that is being hatched for the financial benefit of a few under the guise of benefiting the citizens. The only problem is the citizens are paying for this ruse.

brewmaster 5 years, 4 months ago

The expanding level of collusion and corruption between the city officials, certain local businesses and a few old Lawrence families with money is astonishing. Of course, history also shows that the "private and stand-alone" KU Athletics organization is increasingly suspect, too.

It must be coincidence that the same circle of people are always associated with shady, underhanded activity; from real estate scams in Junction City to public financing of private developments in Lawrence to ticket scandals at KU.

Phil Minkin 5 years, 4 months ago

Although it happen only slightly more often than 17 year locusts, Dolph has a coherent column that I agree with.

David Reynolds 5 years, 4 months ago

The question is "Who benefits?" The answer is several people. First there is John T. Stewert, he gets a tax deduction & ensures his son-in-law Thomas makes a lot of money off both the citizens of Lawrence & KU Athletics. Can't blame John. The second winner is Thomas. He makes millions off of the following. He gets a low interest bond issue from the city that ensure Thomas has cheapest financing possible. The Endowment Association has requested that the city provide free watering of all of the landscaping for the athletic fields landscaping; no fees for building permits, impact fees nor cost of water meters; the big ticket is the city will be responsible for both maintaining & replacing all of the parking & private roads in Rock Chalk Park. None of this is in the city's budget or analysis of the cost impacts to the city. Thus the city is distorting the truth when it says they have enough money to pay for this. The only way this is true is if taxes are raised.

A concern for the citizens should be, besides the "obvious give-away" by the city, is: "Who holds title to the underlying collateral until the bonds are paid in full". Will we the citizens be properly protected in case of default?

The city also pays $25 million for a no bid Recreation Center, to Thomas. The cost estimates the shown indicates some of those costs to be questionable.

The critical issue is the city will pay $25 million for a facility and the city will not own one parking space. This will be owned by Thomas. Will the any users of the recreation center eventually have to pay for the usage of something we paid for?

The final question is why is the city commission so willing to move forward on this project which has many concerns & why is the city commission not publicly debating this? Details can only be obtained by getting involved and demanding the city turn over information.

There are too many egos involved and absolutely no long term responsibility by the city commission.

The city commissioners say by virtue of the fact they were elected they have the authority to execute this deal as they see fit. With that authority comes both responsibility & accountability.

This definitely should be an issue during the upcoming city commission election. The problem is all of the taxes & problems will not show up until after the election.

msezdsit 5 years, 4 months ago

I remember years ago when the only thing that mattered was to build that riverfront mall. While it failed for all the reasons everyone said it would, tax funded to the hilt, it was built. When it exhausted all the shops no one shopped at it became dolphs riverfront mall. Now his good buddy doug has the barb wire building and dolphy has the mall. Oh well, it seems the kettle is calling the pot black in dolphy's latest rant. However, for once, I kinda have to agree with the point of his rant even though he is guilty of what he is complaining about.(as usual)

leftylucky 5 years, 4 months ago

Timothy Fritzel is involved with the 100 acres north of proposed rock chalk park.

Catalano 5 years, 4 months ago

He's part of Garber Enterprises?

Could somebody just do a freaking Venn diagram of the players. That would save everyone a lot of time on here.

David Reynolds 5 years, 4 months ago

The issues should be: (1) Should we build a Recreation Center versus all the other capitol needs we have that are upon us, e.g. New Police facilities, water treatment plant, etc. (2) How do we build an "affordable" recreation center that does not raise taxes for either its daily operation nor its long term maintenance. (3) Currently several ongoing expenses & bond payments are due to stop as those are paid for. What is the best place to spend those funds or do we spend them on anything for the time being?

The big problem with the current recreation center plan is it is too big, unaffordable (parks & recreation currently says they can not cover the operating expenses in the current budget). Parks & Rec is being asked to market the rec center to a fragmented industry to get sporting events into the facility. This is not in their field of expertise.

The way this project is being implemented we (the city/citizens) do not control our own destiny. This entire project is being dictated by KU Endowment Assoc. See their letters to the city dated 10/2/2012 & 11/08/2012.

WilburM 5 years, 4 months ago

Single best Saturday column in memory. Lots of good information, coherently put. This project is different from any development in Lawrence history, and the lack of transparency is staggering. Why the rush, anyway? We need lots more answers, and this column, along with many if the comments here, represents a good start.

jack22 5 years, 4 months ago

"In many ways, the city really is not calling many of the shots about how the project will be developed." You've got that right Dolph. It's like Fritzel is throwing himself a twenty year long birthday party and building himself a family memorial all the while saying we can all come over to the party at any time as long as we agree to bring him some presents. After all the eating, drinking, and dancing are done we not only get stuck with the bill, we'll also have to clean up the mess, too. I have a bad hangover just thinking about it.

Lawrence Morgan 5 years, 4 months ago

Dolph Simons, I am very impressed with this column! You have hit things right on. Thank you!

This shows the power of real writing, New York Times style, on a local level.

Now what we need, immediately, is a diagram Catalano has written about that shows all players, the amount of money involved in each one. including all members of the City Council.

Then we can go from there.

And all letters to the city council. It may indeed take a legal action to bring all this out into the open.

And to what extent are the officials at KU, top officlals, also involved - including the Chancellor, for instance?

Thank you again for your superb writing of this column.

Catalano 5 years, 4 months ago

Don't get too enthused with your kudos, there. I have a feeling his column went through a few edits/editors before it went to print. He was missing a few key phrases; especially "AGAIN... yada yada yada..." and didn't refer to any secret unnamed sources etc. It almost seems ghost-written.

I think we should charge Chad with beginning the Venn diagram. Put J. Stewart in the center, fill in the extensions he knows, then we'll carry on. Or, do a Six Degrees of Kevin Bacon, but make J. Stewart Kevin Bacon. That might be more fun. Sweet...interactive games on LJWorld!

minimadoff 5 years, 4 months ago

One thing is for sure, Lew Perkins would have never allowed himself to used like Thomas Fritzel has used Sheahon Zenger.

JackMcKee 5 years, 4 months ago

What!?!? No Obama this week??? Dolph is slipping in his old age.

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