Archive for Friday, December 21, 2012

City, KU Endowment discussing new bidding process for recreation center project

December 21, 2012


Plans for a $25 million city-owned recreation center in northwest Lawrence are shifting as questions emerge about the propriety of Lawrence businessman Thomas Fritzel building the project without going through the city’s standard bid process.

City officials on Friday released details of discussions they are having with Kansas University Endowment about a process that would allow other construction companies to submit bids for the work. But the proposal stops short of following the city’s standard open bidding process.

“We’re trying to be open to making a public-private partnership work here,” City Commissioner Mike Dever said of the new proposal. “This is an unusual opportunity for Lawrence, but we’re doing all of this in the spirit of openness.”

The new proposal would require KU Endowment to invite bids from two other contractors — of the Endowment Association’s choosing — in addition to a bid from Bliss Sports, an entity that Fritzel controls.

If either of the bids from the other two contractors is lower than Fritzel’s bid, Fritzel would have a chance to match the bid and receive the work.

KU Endowment officials previously have said Fritzel is their presumed contractor for the facility. Fritzel has made an offer to the city to build the 181,000-square-foot recreation center, outdoor tennis courts and other amenities for a maximum price tag of $25 million.

The city has an architectural estimate that projects the value of the improvements are closer to $33 million. A majority of city commissioners have said Fritzel’s offer — which they have viewed as a donation to the city — makes the project unique.

But Dever confirmed he has heard from at least one local contractor who has expressed an interest in bidding on the project, and City Commissioner Mike Amyx has said he would like to see what other contractors can offer on the project.

“I would love to see it traditionally bid,” Amyx said Friday. “You have public funds going into this, so that seems reasonable.”

The project has another twist in that KU Endowment currently holds the rights to the approximately 20 acres that the city’s recreation center would be built on. KU Endowment has offered to donate the land to the city as part of a larger sports complex that would include a track and field stadium, soccer field, softball stadium and other amenities for KU Athletics.

Fritzel is presumed to be the contractor for those improvements, and last week project officials confirmed the current proposal actually has Fritzel’s company owning those facilities and leasing them to KU.

The city would own its recreation center, but KU Endowment has insisted on controlling construction of the center and then turning it over to the city after it is built. Dever on Friday said that insistence from KU is playing a role in why the city has not proposed a traditional bid for the center.

“They are giving us a chance to build something remarkable and, as a result, there are a few strings attached,” Dever said.

Dever said he thinks KU Endowment’s conditions on the project are reasonable. He estimated the KU facilities will represent an investment of at least $50 million.

“If you had a chance to control what your neighbor’s property is going to look like in that situation, I think most people would try to do that,” Dever said.

But Dever said the new proposal does provide more clarity than the previous plan. Previously, KU Endowment had not proposed any type of competition related to who would serve as the general contractor or construction manager for the project. The previous proposal was that Bliss Sports and KU Endowment would select subcontractors for the project and would share the bid results with city commissioners after the bids had been awarded.

Dever said the new proposal should ease concerns about whether Fritzel — who recently agreed to pay $50,000 to settle a development dispute with the city related to an apartment project in Oread Neighborhood — is giving the city a good deal.

“This process will identify the magnitude of any gift associated with the project, or it will show the true value of the project,” Dever said. “Either way, the public wins.”

But it was unclear Friday how KU Endowment would go about selecting the two other contractors that would be invited to bid on the project. The city’s standard bidding process publicly advertises projects available for bid, allowing any qualified company to compete for the work.

An attempt to reach an official with KU Endowment for this article was unsuccessful.


Pepe 5 years, 2 months ago

That is an insult to idiots everywhere. He is far dumber than an average idiot.

It is unbelievable that every commissioner besides Amyx is trying to cram this awful idea through. The city should not touch this project with a 10 foot pole. If they are going to consider doing it, then a true open bid process must be a non negotiable part of the deal.

Frank A Janzen 5 years, 2 months ago

We don't want this thing anyway. It's too expensive. We have other priorities.

KiferGhost 5 years, 2 months ago

“This is an unusual opportunity for Lawrence, but we’re doing all of this in the spirit of openness.”

I needed a good laugh.

KiferGhost 5 years, 2 months ago

“They are giving us a chance to build something remarkable and, as a result, there are a few strings attached,” Dever said.

Oh, like the Oread?

KiferGhost 5 years, 2 months ago

An attempt to reach an official with KU Endowment for this article was unsuccessful.

So much for openness.

KiferGhost 5 years, 2 months ago

“This process will identify the magnitude of any gift associated with the project, or it will show the true value of the project,” Dever said. “Either way, the public wins.”

Perhaps they can ask how the public wins. The public wanted a rec center, not to another Fritzel con.

Budgets_Smudgets 5 years, 2 months ago

Good grief. Secret changes to a process which is already secret. Where are the documents?

Unless a fully open and properly constructed bidding process is implemented, including a stick to require KU Endowment to accept the lowest responsible bid, no contractor is going to expend the resources necessary to negotiate with subs and submit a bid request. Because the whole thing already appears to be "fixed."

And larger questions the rock concerts and similar land use issues. Have the city commissioners examined, on paper, the actual relationshp between Bliss, KU Endowment, and the City? (ans: Nope)

This whole thing increasingly strikes me as a privately owned and operated "entertainment district" using a charitable organization (Endowment) to wash money at the front end for tax purposes, avoid public scrutiny and bidding laws, and being financed in part by a substantial long term city debt obligation from money which was originally to be dedicated to community (not university or state-wide) recreation....... not a high-flying speculation economic development gambit wrapped up in a community recreation flag.

KiferGhost 5 years, 2 months ago

Let's face it, the endowment is operating in a the way a bank launders money. A tax write off "gift" by Fritzel's father in law to profit Fritzel. It is great to see first, the tax write off that was meant for education used now more for sports, the same sports operation that pays millions of dollars to coaches and second, to see the city and university working to screw the taxpayers of Lawrence with one more developer scam to enrich themselves by not paying their fair share of taxes while leaving the average Joe to pay more. Have you no sense of decency?

Bob Forer 5 years, 2 months ago

Good observation. Let's say the father in law donates 25 million. Assuming he has sufficient income to be offset by that charitable contribution--and I surmise the donation will be in installments over a period of years to ensure the maximum tax saving-- he will save 38%, or $9.5 million in taxes, reducing his actual out-of-pocket outlay to 15.5 million.

Then lets assume that Fritzel pockets around 20% of the total 75 Million dollar project in profit. That's around 15 million.

In other words, it's basically a wash for the extended family. Not a bad deal--naming rights and the ability to lease out the KU premises--all for free.

I am sure that's why the Endowment Association is insisting on the unorthodox bidding process--to ensure that Frizel gets the bid. Otherwise, there is no contribution, and thus, no deal. .

The Endowment Association is private. If they want to screw their members, I have no quarrel. But the rec center will be paid for by all of us--the taxpayers--and therefore we must demand an open and transparent bidding process.

“They are giving us a chance to build something remarkable and, as a result, there are a few strings attached,” Dever said.

That's a laugh. By handpicking the two entities that will be permitted to bid, the Association is making sure that Fritzel will get the job.

It's insulting for the Association and the City Commission to think that ordinary folks aren't able to see through these transparent shenanigans.

Doesn't state law require all municipalities to put out for bid projects of over a certain value?

KiferGhost 5 years, 2 months ago

Hopefully when the tax loopholes are looked into by the federal government the abuse of educational investments is closed. Sports is big business and has no place in the academic setting where it is corrupting people who should have higher standards of ethics.

irvan moore 5 years, 2 months ago

this city commission needs to step back from the whole deal and wait for the election and the next commission to vote on it, the rush to get this done while these commissioners are in office stinks, bad project, bad bid process, bad commision, what could possibly go wrong

KiferGhost 5 years, 2 months ago

The city commissioners won't back off because ending up at the bottom of public outhouse just isn't appealing to them.

KiferGhost 5 years, 2 months ago

The leadership lawrence spawned pr effort, cadrelawrence demonstrates there are no ethics in the Lawrence chamber crowd. This is their response to Simon's article last week. They might show where the city commission has ever given a real opportunity to express their views. Are city wants to appear technologically savvy and yet they supposedly don't read the comments in the only paper in Lawrence? They voted to approve this project the night they supposedly were listening to other opinions, let's face it, everything their masters want is pushed through regardless-

CadreLawrence shared a link. Yesterday Let's look at some of the misnomers regarding the Rec Center. We would welcome your thoughts of course.

In Mr. Simon's article written last week, it was said that this has been a very fast process, and that City officials are trying to push this through.

Here's the truth, this has been a process that began last March, and has included many public meetings, forums and showing of the designs. Unfortunately, the same folks who are complaining about how quick this project has gone, are the same folks who never showed up at any public meetings...

KiferGhost 5 years, 2 months ago

Additional lies from cadrelawrence. I don't suppose are rocket scientist have seen the news about how Lawrence and Kansas have bent over backwards giving away treats to lure corporations here. Is the concept too difficult to grasp that a national corporation with stores in two larger metropolitian areas only minutes away is the real reason they don't want to add a major expense of a store in Lawrence? These people are pushing this sportsplex nonsense, does anyone at our city government actually look at the facts?

CadreLawrence December 13 In the Leadership Lawrence class of 2012, a representative of the KCADC used Menard's as an example of a company who avoided Lawrence alone based on its reputation of being hard to do business with. Things have to change and we must focus our processes and policies on encouraging the creation of jobs. If they don't, we are setting ourselves up for a future failure!

KiferGhost 5 years, 2 months ago

We have too many commissioners who have business reasons not to upset the big guys in this town. We need commissioners elected by neighborhoods and a real representative government.

youngjayhawk 5 years, 2 months ago

Most in the Lawrence community just want a westside rec center like the other centers in town. Let KU and the private donations build it, do not screw the rest of us!

Mike Myers 5 years, 2 months ago

Well that sounds fair right? How stupid does endowment think we are?

lunacydetector 5 years, 2 months ago

why should this be done in such a complicated manner? .....let the developer/endowment own it and pay for it from ticket proceeds....oh, that doesn't pencil?

$25 million = $33 million......who was the architect?

homergoodtimes 5 years, 2 months ago

Bid rigging Bid rigging is a form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid. This form of collusion is illegal in most countries. It is a form of price fixing and market allocation, often practiced where contracts are determined by a call for bids, for example in the case of government construction contracts.

Bid rigging almost always results in economic harm to the agency which is seeking the bids, and to the public, who ultimately bear the costs as taxpayers or consumers.

MartyT 5 years, 2 months ago

If anyone's interested: the definitive academic (urban theory/sociological) explanation of why development interests (almost inevitably) co-opt the local political process can be read via the link below (sorry, you'll have to sign up, etc, but it is free).

It is definitely an academic read...but having grown up in Lawrence, proof of its fundamental accuracy can be witnessed daily within the pages of the LJ World, this article being an excellent example....

lawrencereporter 5 years, 2 months ago

Christmas came early for Mike Stultz. Just heard KUEA closed on the sale of his land Friday. Thomas Fritzel and KUEA must be very confident they will receive the zoning and over 12 million dollars worth of infrastructure from the city they need. Looks like the deal was done behind closed doors and will be voted on (acted out ) by the city commission during the next few weeks for the public. Unbelievable...

lawrencereporter 5 years, 2 months ago

One of the people who started CadreLawrence is Paul Werner. Werner is Thomas Fritzel's puppet just like KU, Schumm, Dever, and Corliss. If his mouth is open he's lying about something.

KiferGhost 5 years, 2 months ago

Werner's time could be better spent learning about design. Are there plans to finish the two two stories of the Oread or is that really the way it is suppose to look including the four pop up things at the top that when lit with the colored lights looks like a children's toy.

KiferGhost 5 years, 2 months ago

Dolph the third is a board of trustee member, I'm sure the jw is holding back like it always does, sports is about the only reason most people read the paper and deep down I'm sure the Simon's are completely on board with this and the editorial was just to appear there is opposition.

homergoodtimes 5 years, 2 months ago

Types of Bid Rigging

There are some very common bid rigging practices:

Subcontract bid rigging occurs where some of the conspirators agree not to submit bids, or to submit cover bids that are intended not to be successful, on the condition that some parts of the successful bidder's contract will be subcontracted to them. In this way, they "share the spoils" among themselves. Bid suppression occurs where some of the conspirators agree not to submit a bid so that another conspirator can win the contract. Complementary bidding, also known as cover bidding or courtesy bidding, occurs where some of the bidders bid an amount knowing that it is too high or contains conditions that they know to be unacceptable to the agency calling for the bids. Complementary bidding, however, is not always a corrupt practice. A contractor that is too busy to complete the work will often place a high bid simply to maintain a relationship with government agencies. Bid rotation occurs where the bidders take turns being the designated successful bidder, for example, each conspirator is designated to be the successful bidder on certain contracts, with conspirators designated to win other contracts. This is a form of market allocation, where the conspirators allocate or apportion markets, products, customers or geographic territories among themselves, so that each will get a "fair share" of the total business, without having to truly compete with the others for that business. These forms of bid rigging are not mutually exclusive of one another, and two or more of these practices could occur at the same time. For example, if one member of the bidding ring is designated to win a particular contract, that bidder's conspirators could avoid winning either by not bidding ("bid suppression"), or by submitting a high bid ("cover bidding").

Richard Heckler 5 years, 2 months ago

Put the matter before the taxpayers. Let us vote on this project of questionable ethics?

Where are the numbers that the taxpaying stakeholders can rely on as accurate?

A vote should be mandated on projects of this magnitude. Commissioners should realize that taxpayers do not necessarily trust the judgement of politicians. This is not new.

We taxpayers deserve a chance to vote on this project. Why are commissioners protecting this special interest project?

Richard Heckler 5 years, 2 months ago

The largest number of stakeholders on this matter aka taxpayers deserve an opportunity to speak out on this matter.

Let the largest number of stakeholders vote on this matter. If it is a worthwhile project in the eyes of the taxpayer it will sail through as the library project did. As the T did.

Let fiscally responsible democracy work for the Stakeholders! Let we stakeholders vote on this matter. It's our money.

George Brenner 5 years, 2 months ago

Is anyone else tired of all the whining about this project? It seems like a great deal for a city that desperately needs more rec facilities for the kids. I could personally care less about a new rec center but this project looks like a win-win situation. I think a lot of those commenting would whine if they won the lottery!

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