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Archive for Friday, June 15, 2012

Rec center would cost $100,000

June 15, 2012

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It will take $100,000 per month in lease payments for the next 20 years — and a new special sales tax district — for the city to build a regional recreation center in northwest Lawrence.

But as city officials on Friday released the most detailed figures yet for the project, Lawrence Mayor Bob Schumm said he’s becoming more convinced the project is a good deal for the city. That’s in part because the new numbers indicate Lawrence developer Thomas Fritzel and his company essentially are offering to finance the project interest free, representing a potential savings of about $8 million for the city.

“It is a gift to the city,” Schumm said of the offer. “There is really no other way to look at it.”

City commissioners at their meeting on Tuesday will receive a public briefing on plans to build a regional recreation complex on the northwest corner of Sixth Street and the South Lawrence Trafficway. Here’s a look at some of the newest details:

l The city will make $1.2 million a year in lease payments to Fritzel for 20 years, for a total of $24 million. At the end of the 20-year period, the city will own the recreation center. The city will own the ground — which is proposed to be donated by Lawrence developers Duane and Steve Schwada — from the very beginning. Fritzel — who is an executive with Lawrence-based Gene Fritzel Construction Co. — will build the center.

Schumm previously had said he expected the project to cost the city in the $13 million to $16 million range. But that was a cost estimate, he said Friday, that did not include interest costs that would have to be paid on a bond that would have financed the project. With the interest costs, the city would have paid about $24 million over a 20 year period to build a recreation center on its own, but Schumm said the center would have been significantly smaller than what is now proposed. Under the Fritzel offer, the entire $24 million will be used for construction.

“We’ll basically be getting three-eighths more of a facility than we ever thought we could get,” Schumm said.

The city would make the lease payments of $1.2 million a year to Fritzel with money that has become available as the city recently has paid off several projects — the indoor aquatics center and the Community Health Building are examples.

“We will not have to raise any taxes to build this building,” Schumm said.

Attempts to reach Fritzel for comment on his involvement in the project were not successful on Friday.

l The $24 million in payments to Fritzel will not cover any of the infrastructure and road costs to serve the site. The city has estimated it will cost about $2.4 million to extend water and sewer service to the site. Currently, the city is proposing those costs be paid for by city ratepayers.

The city doesn’t yet have a cost estimate to build roads for the site. But the city is now proposing that a special taxing district be created to pay for the roads. Under the proposal, an extra 1 percent sales tax would be charged on all sales made at the recreation center plus the approximately 100 acres adjacent to the center that would be privately-owned and commercially developed.

l The project is still envisioned to have a major Kansas University component. Schumm said he believes KU is very eager to build an outdoor track and field stadium and a soccer field at the site. Under the current proposal, Fritzel would be the builder of those facilities as well.

KU’s involvement in the project is expected to help make the center attractive to regional and national youth tournaments, which city leaders believe will provide a major boost to the city’s economy.

l Neighbors of the proposed site have filed a protest petition objecting to the proposed commercial zoning for the property. Schumm said city officials have met with area homeowners twice and will continue to meet in the future. He said several concerns center around lighting and usage of the outdoor track and field stadium. Schumm said a current design for the site attempts to keep the stadium about 600 feet away from the nearest residence.

Commissioners will meet at 6:35 p.m. on Tuesday at City Hall to receive a briefing on the project.

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