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Archive for Wednesday, November 7, 2012

Costs, scope of proposed recreation center escalate

November 7, 2012

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Lawrence officials now are acknowledging the city’s costs for a proposed regional recreation center have increased since the project has begun working on a partnership with the Kansas University Endowment Association.

But city officials also quickly point out the number of amenities in the project has grown significantly.

“It is going to be a little bit more expensive,” said Mayor Bob Schumm. “But it is quite a bit larger and should yield quite a bit more value.”

City officials will host a public meeting from 7 p.m. to 8 p.m. Thursday at the Free State High School commons area, 4700 Overland Drive.

City leaders will be going over cost estimates that have increased as the proposed site of the project has shifted from the northwest corner of the Sixth and South Lawrence Trafficway intersection to a site that is just north of the northeast corner of the Sixth and SLT interchange.

When the city was considering building the multi-gym recreation center/youth fieldhouse on the western side of the SLT, it was estimated the city’s costs would check in at $29 million.

As the city has shifted its focus to the site east of the SLT, the project is now expected to cost the city $25 million. But there is a a key difference in the new cost estimates.

When the city was considering the west of the SLT deal, which was part of a partnership with development groups led by the Schwada family and Thomas Fritzel, $24 million of the $29 million in costs would have been paid through a lease-purchase agreement with Fritzel.

At the new site, the lease purchase agreement is no longer being offered, which means the city plans to debt-finance the entire $25 million the city will owe. That’s significant because the city will pay interest costs on the $25 million amount. Under the previous deal, the city would not have paid interest costs related to the $24 million lease-purchase agreement.

City Manager David Corliss is estimating the city will pay about $150,000 a year more in interest costs — or $3 million, if the debt is financed for 20 years — compared with the deal offered at the previous site.

The new site is controlled by the KU Endowment Association. The Endowment Association is proposing to build the recreation center — using Fritzel as the general contractor — for the city. Once the center is completed to the city’s satisfaction, the city would pay KU Endowment a $25 million lump sum payment, at which point the city would own the building and the land the city’s facilities sit upon.

The recreation center was proposed to be nearly identical at both the west and east sites, with eight gyms, a walking track, fitness center, multipurpose area and other amenities. But the eastern site proposed by KU includes more than double the amount of land for the entire recreation complex, which will allow the city to build lighted tennis courts, a hike and bike trail, and 1,400 parking spaces.

The larger property also will give Kansas University more room to build its facilities, which will include a track and field stadium, a soccer field and a softball stadium.

The additional parking the site offers and the proximity to KU’s facilities are expected to help the city be more successful in attracting regional or national youth tournaments to the site, which city officials say will provide a boost to the economy.

“Anytime we have to spend more money, it disappoints me,” City Commissioner Mike Dever said. “But if we want to take advantage of the significant opportunities of being partnered with KU, this is how we have to do it.”

But the cost increase — and the increasing scope of the project — continues a trend from the past year.

At the City Commission’s Nov. 8, 2011 meeting, city commissioners were still discussing building a recreation center on city-owned land at Sixth Street and Overland Drive. At that meeting, a majority of commissioners agreed the city should look at structuring a deal that would involve $12 million from the city’s coffers and $3 million from private sources such as Bill Self’s Assists Foundation, which has expressed an interest in supporting the center.

At that time the City Commission was contemplating a smaller facility, but it still would have been the largest recreation center in the city. City officials last November were presented with an architectural report that estimated a 75,000 square-foot center with five gyms, a walking track and a fitness room could be built for $13 million to $15 million.

Now, the proposed recreation center is 181,000 square feet, and the city’s cost for the center and necessary infrastructure has grown to $25 million.

City leaders, however, said they believe the new $25 million proposal represents a good value for the city. An architectural report estimates the total value of the city’s new recreation center and infrastructure will be about $33.5 million.

The city’s costs will be capped at $25 million plus interest. Any additional costs will be paid for by the KU Endowment Association and its donors for the project, which haven’t been publicly announced by the association.

“I started out on this project fairly skeptical,” Schumm said. “But as I’ve studied it and looked at what is possible, I’ve really changed my mind and my attitude.

“I think it is an extraordinary opportunity for the city because of the notoriety we’ll receive and the events we can host with a facility like this. It has grown in size, but also has grown in terms of potential.”

But questions about the project remain with some commissioners. The project is scheduled to be paid for with existing sales tax dollars that previously had been used to pay for the debt for the Community Health Building and the Lawrence Indoor Aquatic Center.

City Commissioner Mike Amyx, though, said he is worried about what happens if sales tax collections take another downturn. He also said he is concerned about tying up such a large amount of money for so long compared with building a smaller facility on land already owned by the city.

“I think we really have to ask ourselves whether the cost difference to locate this on a site in northwest Lawrence is something that we really can justify,” Amyx said. “I haven’t hidden at all that I have concerns about that.”

After Thursday’s public forum, commissioners are scheduled to discuss the project at Tuesday’s weekly City Commission meeting. At that meeting, commissioners make direct staff members to begin crafting formal agreements with the Endowment Association.

Comments

homergoodtimes 2 years, 1 month ago

Thomas Fritzel and Schumm can't be trusted.

kansasredlegs 2 years, 1 month ago

Dang Shumm, how is it at every turn where bad news about this project gets laid out, you are quoted that it's a better and better deal for the taxpayer? Could it have anything to do with Mr. Fritzels visits to your office there above Buff Bob's?

patkindle 2 years, 1 month ago

no big deal, it is all about the kids, and it is only pennies a day, that works for everyting else, why not this?? drink the kool-aid, smile and sing kum yah bah

EarthaKitt 2 years, 1 month ago

I have no idea what you're asking me to sing, but it sounds like a delicious soup I used to get in San Francisco.

homergoodtimes 2 years, 1 month ago

I wish somebody would throw a law suit at this bunch, get them each under oath, ask real questions, and get to the bottom of this fiasco. Dever, Schumm, Thomas Fritzel (family), KU Endowment board members, Sheahon Zenger, Corliss, Sean Lester, both architects, and the money man John Stewart. There's more twists and turns, deals, whispers, lies, false numbers, and a$$ covering going on, It would turn our stomachs. People would lose their jobs if the truth be told.

homergoodtimes 2 years, 1 month ago

“Anytime we have to spend more money, it disappoints me,” City Commissioner Mike Dever said. “But if we want to take advantage of the significant opportunities of being partnered with KU, this is how we have to do it.”

Dever how is buying a overpriced building, built by a kid you don't trust, partnership with KU. This is one of the most stupid quotes ever.

Nothing about this is okay.

fu7il3 2 years, 1 month ago

What about the facility proposed in Legends?

http://dbryan.wix.com/next-level#!__aboutus

I don't think Lawrence can compete with what Legends has to offer, KU or no KU. I love Lawrence, I just don't see competition with Legends as turning out well for us. The city stands to lose a ton of money if this doesn't pan out.

blindrabbit 2 years, 1 month ago

One long time city commissioner got contaiminated when he fell in (and had to be extricated from) a pit toilet at Clinton Lake many years ago while conducting some sales transaction. Don't trust anybody who has that stink on them!

somebodynew 2 years, 1 month ago

"I think it is an extraordinary opportunity for the city...."

NOT if we can't afford it. Then it is not any kind of an opportunity except to go deep into debt over something we really don't need. AND we are getting forced into a deal with no competitive bids and basically told to just take it, it is good for us.

pizzapete 2 years, 1 month ago

“I think it is an extraordinary opportunity for the city because of the notoriety we’ll receive"...for getting ourselves involved in such a huge money pit with no guarantees that we'll ever be able to pay for it without significantly raising property taxes and making further cuts in other necessary city services. Do we really need to worry about rising taxes or where we'll get the extra money to pay for the future costs of our expanding police and fire departments, or the increased costs associated with fixing our deteriorating roads and sewer system? Heck no, let's go play bad mitten at the new rec. center instead. The former city commissioner was quoted as saying at the time.

classclown 2 years, 1 month ago

The numbers don't add up. We are told several times that the cost will be $25 million plus interest (around $3 million).

However there is also this tidbit... "But the eastern site proposed by KU includes more than double the amount of land for the entire recreation complex, which will allow the city to build lighted tennis courts, a hike and bike trail, and 1,400 parking spaces." none of which is included in stated cost.

How much will those items as well as anything else the city may want to put in there going to cost taxpayers?

Chad Lawhorn 2 years, 1 month ago

Just to be clear, the $25 million the city would pay includes its parking, the tennis courts, the recreation path and the city's share of the infrastructure costs of the project. The city believes if it were to try to build all these things on its own, it would cost $33.5 million. The city will have a guarantee from KU Endowment that the city will pay no more than $25 million for them. The difference will be covered by KU Endowment and its donors.

pizzapete 2 years, 1 month ago

"City Commissioner Mike Amyx, though, said he is worried about what happens if sales tax collections take another downturn. He also said he is concerned about tying up such a large amount of money for so long compared with building a smaller facility on land already owned by the city."

Mike, thank you. You seem to be the lone voice of reason on the city commission. Would you please explain to these guys that we are in the middle of a worldwide recession, that we've been lucky here in Lawrence so far, but now is not the time to be gambling away our money when we have many other expenses that need attention. Someone needs to tell these drunk sailors that the ship has a leak and now is not the time to buy an expensive sports car, a swimming pool, or a hot tub, now is the time we all need to pull together to fix the leak in the boat before it gets any worse and we find ourselves deeper and deeper under water.

Windemere 2 years, 1 month ago

By far, the biggest need is gyms-- 5-8 or so. Indoor track, tennis courts-- do not believe these are burning needs. If they are, prove it. Common knowledge for many years that we need gyms. Build just gyms and save taxpayers the extra money and risk.

Phillbert 2 years, 1 month ago

"“I think it is an extraordinary opportunity for the city because of the notoriety we’ll receive..."

Yes, because we want to be notorious.

BringBackMark 2 years, 1 month ago

“I started out on this project fairly skeptical,” Schumm said. “But as I’ve studied it and looked at what is possible, I’ve really changed my mind and my attitude.

When was this? He's been a cheerleader for every site, every option, regardless of cost. Has anyone considered the increased operation and maintenance costs associated with more land and additional facilities?

This project should come before the taxpayers as a bond election. Then, if passed, public bidding should be required. This smells real bad.

Keith 2 years, 1 month ago

Bob Schumm, the local winner of the Mitt Romney flip flop award, now given weekly.

Caz Snwot 2 years, 1 month ago

Looks like bobby won't be getting re-elected.

hawkman8950 2 years, 1 month ago

the thing I do not understand is that KU has a decent amount of land out behind Ancshutz Pavilion going to 19th street. The old football practice fields where there and it was being planned for the track and field stadium with soccer pitch on the infield to be built there. Along with locker room facilities for softball, soccer and track and field teams. That area is better than it was but could be spruced up some in my opinion. I liked it better when in some instances KU was a separate entity from the city of Lawrence. Utilize the space you have and keep stuff on campus thus achieving that collegiate feel and setting all right there at your disposal

Patty Buchholz 2 years, 1 month ago

It might be a good idea to put this before the voters. It doesn't seem right for a public entity not to go through the bid process and just choose a contactor, especially one who has proven he cannot be trusted. I don't think the city commissioners are thinking about 'the will of the people'.

john heleniak 2 years, 1 month ago

It seems like everyone is scared about the Next Level Sports Center going into the Legends. If Basketball was going to be supported there, I would be to. If you look at their direction, they will only be supporting soccer and lacrosse.
Lawrence has an opportunity to become a destination for basketball tournaments. The majority of the games could be played in the proposed city facility and the championship game could be played in Allen Field House. Now that would be a draw.

average 2 years, 1 month ago

What basketball tournaments?

Even without basketball going in at the Legends, there are still half-a-dozen gyms the size of what we're proposing in greater KC. All of them much closer to tens of thousands of players. All of them closer to a commercial airport.

And we're not talking about picking off one or two weekend tournaments (which would be pretty optimistic). If the numbers worked for 'one or two tournaments', I'm okay with a little optimism. But, the numbers the commission are being fed only work if you have 16-20 major tournaments a year. That's the insane projection. Basically picking off everything of note from the entire KC metro area and maybe a few from Wichita and Springfield.

lawrencereporter 2 years, 1 month ago

Thomas Fritzel took Junction City and its taxpayers for a ride a few years ago. One of his construction company's DFC walked away with millions in profits from a no bid city project. Fritzel and his partners (all local Lawrence) haven't paid the taxes they owe in Junction City for the last three years. Why are the elected leaders of the City of Lawrence so eager to do business with Fritzel.

The mayor of Junction City at that time went to prison for taking bribes from another builder.

irvan moore 2 years, 1 month ago

it's a bad idea for the city to partner with ku on this project, i kinda thought when the rec center out west idea started it was going to be something like on east 15th. this isn't going to fill neighborhood needs, it's going to be a monument to greed and stupidity

Joe Hyde 2 years, 1 month ago

As happyp states (above), this whole plan must be put to public vote in a citywide referendum, and soon, before it gets waltzed to far across the dance floor. The ballot measure's wording describing the project needs to include relevant facts such as:

1) The project was proposed by KU Endowment Association, not by the leaders of Lawrence Parks & Recreation Department acting on their independent initiative, and;

2) The multi-million project would be built by a local construction firm that was awarded the contract arbitrarily; that is, absent the conventional procedure of competitive bidding typical of large-scale municipal projects.

Pepe 2 years, 1 month ago

"City leaders, however, said they believe the new $25 million proposal represents a good value for the city. An architectural report estimates the total value of the city’s new recreation center and infrastructure will be about $33.5 million."

This is asinine. The value of something is what it can be sold for in the open market, and no private firm would buy this type of facility.

This rec center is an absolutely terrible idea for Lawrence. Ever since the location mysteriously moved from the west side of K-10 to the east side of K-10, things have been very fishy. If KU wants to build this, then more power to them, but Lawrence taxpayers should not have to foot the bill.

average 2 years, 1 month ago

They were plenty fishy before the move, but the motives (build stoplights/water/sewer to my cornfield of dreams) were perhaps a little more transparent. Now, every local hyena is in on the kill.

Build a $33.5m ziggurat. Bargain for the city at only $25m. Who could pass that up?

Getaroom 2 years, 1 month ago

Does anyone smell graft in the air!

Move the sacred stone cow, Allen field house, out there too! It's a shovel ready project at the ready, to make millions for the millionaire's! Just what this sleepy little town needs to put Lawrence on the map as The destination point for worship at, "The Mega Church of Sports On The Prairie".

Faux Pastor Brownbackward(with his deep pockets connections) needs to jump right on this big job-creator and claim it as his own for the LORD and claim it as a "little piece of heaven on earth" right here in his own backyard Kingdom.

It ought to be completed just in time to have a God Sanctioned F-5 blow through here so he can get the newly privatized FEMA to come in and help pay for the clean up. Sounds like a yet another dream come true for the millionaire's club.

Imagine, Lawrences first "you did build that" project! What a relief that we finally have a joint business partnership only fit The Kings and all private sector financing too - dammed BIG GOV involved. This must be Heaven!!

kansasredlegs 2 years, 1 month ago

At this point, there are approximately 35 posters here that seem against the project. This should mean atleast 30 should show up to speak out against this proposal at the meeting tonight at FSHS at 7:00 p.m.

The last time there was a public meeting to discuss the Rec Center, the very next Commission meeting Mayor Schumm emphasized how little opposition there was to the project. Anyone and everyone opposed to this "deal" not the concept of a Rec Center on city property for use by city residents need to show up tonight to express their opinions. If all commenters are "no shows" then I guess we can't complain. So, get out and let's stop this runaway train!

puddleglum 2 years, 1 month ago

how about the the costs of the 'new' fire station that will be required to protect this center? you know that is coming next, folks..

please city commissioners, bail out of this one. it stinks to high heaven. thank you Mike amyx for at least trying to understand that NO lawrence taxpayers want this... only developers and KU-endowment silver spooners... please go somewhere else. and at least let compton put in a bid!

George_Braziller 2 years, 1 month ago

Preferential treatment? If we were getting preferential treatment we wouldn't have some streets and alleys that are almost impossible to drive on and water mains that regularly break.

average 2 years, 1 month ago

We're in the lowest-inflation presidential term since the deflationary Depression of the 30s. We very nearly went into a deflationary spiral, like the 30s, again. And you're freaking out in the exact opposite direction of objective reality?

Kontum1972 2 years, 1 month ago

lol...anytime these clowns get together at the strip club they come up with these scams....!

Everyone thinks Quantrill was bad...hell they just mutated ....and they run the city

turnright 2 years, 1 month ago

It was unfortunate that no one from KU Endowment showed up to this meeting. Commissioners and staff trying only to sell the building, not the project. Way to many basketball courts, nothing to be proud of. Unless you play basketball. What a disappointment...

Richard Heckler 2 years, 1 month ago

Taxpayers want to vote on this PLAY project. We do not trust the powers that be are making the right decision.

Lawrence,Kansas does not need more PLAY. Remember all of the over priced housing Lawrence was having no trouble unloading? WITHOUT this field house. No need for a field house.

Housing projects are slow in America and many more foreclosures are on the horizon. It's on the news.

Forget this PLAY field house. Be fiscal conservative and come up with a plan that does not require a $60 million input. Taxpayers we spent $20 million on PLAY by way of the school district.

This will be a tax dollar money hole just like field houses in most other cities. They don't pay back ever. What is the point of ADDING more to the list of taxpayer obligations?

Taxpayers want to vote on this project. We do not trust the powers that be are making the right decision.

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