News and notes from around town:
• Hopefully playing in a $24 million Lawrence recreation center is more fun than planning for one. It is becoming pretty obvious that city officials are getting worn out by the negotiations and other details that have gone along with building a city/KU sports complex at the northwest corner of Sixth Street and the South Lawrence Trafficway.
I hadn’t done the math until Tuesday night, but it has been almost 10 months since city commissioners first started talking about this site. It was in early November that commissioners halted planning for a recreation center near Wakarusa and Overland drives and started focusing on this unique opportunity to partner with private development groups led by Thomas Fritzel and Duane Schwada.
As we reported, commissioners on Tuesday deferred all votes on the recreation center for at least one week but probably two weeks. But there were still several pieces of information that emerged from Tuesday night’s meeting that I didn’t have room to report on late Tuesday night. So, here we go:
— City officials tried to get back on message. So much attention has been paid to what this new 180,000-square-foot recreation center could do to attract tournaments to town. But Tuesday night city officials tried to drive home the point that the primary reason to build this recreation center is because current city residents are underserved when it comes to indoor recreation space, especially gyms.
Ernie Shaw, the leader of the city’s parks and recreation department, cited an industry benchmark that says Lawrence — based on its population — should have 18 more gyms than it does. The new center would have eight full-sized gyms. As he has noted before, recreational youth basketball leagues have been cut from 12 games a season to six games a season. The city’s youth volleyball program is basically limited to fourth- and fifth-graders because of a lack of space.
“First and foremost, this project will address the pressing recreational needs we have in the community,” Shaw said.
He also sought to reassure people that the walking track, fitness center, classrooms and other amenities at the proposed center will be open to the public even when the center is hosting a tournament.
“Even if we have a tournament, you are going to still have a recreation center with a lot of things to do,” Shaw said.
— With all that said, the city is still clearly trying to accomplish two things at once. It wants to build both a community recreation center and a facility that can attract regional and even national youth sporting events.
I get the impression that commissioners understand that if they were just trying to build a community recreation center, this probably isn’t the site they would build it at.
Given that, city officials have to convince the public why this unique deal is better than building a simple recreation center on the 29 acres already owned by the city near Wakarusa and Overland. The answer has been because the partnership will allow the city to do something better than what it can do on its own.
But city officials have struggled to clearly articulate what the city is getting out of this partnership. Thus far, several members of the public have seized onto what developers are getting out of the project. Fritzel is getting $24 million over 20 years, and it appears, a chunk of business for a Fritzel construction entity. Schwada is getting several million dollars in infrastructure extended to the 146 acres he owns at the intersection, new retail zoning for the intersection, and a traffic generator that surely will help his Mercato retail development that hasn’t really gotten off the ground across the highway. KU gets land and infrastructure to build a new track and field stadium, which will clear the way for the university to eventually revamp Memorial Stadium once the track is eliminated there.
But what does the city get out of all this? That’s been less clear, but I’ll take a shot at summarizing what I’ve heard from city officials, and then you can decide whether to take it or leave it.
From the Schwada group, the city gets at least 50 acres — but it now looks like 60 acres — of highly visible property at the intersection of two state highways. Oddly, the city hasn’t really talked about how much that land would sell for on the open market. But it is significant.
My understanding is that less visible land along the SLT, just north of the intersection, is on the market for about $31,000 an acre. That site is closer to water and sewer infrastructure, which plays a role in the price. The Schwada site, however, is far more visible. It seems the city would be doing itself a favor by having an outside appraisal done of the site and announcing its fair market value to the public. That would put into perspective how large of a donation is being made by the Schwada group.
Bottom line, I think commissioners believe they are getting a piece of property that would cost in excess of $1 million if they were to try to go out and buy it.
From the Fritzel group, the city is getting cheap financing. That’s how they view it. The city’s architect has gotten a third-party construction company to estimate what the bid would be to build the 180,000-square-foot recreation center as proposed. The estimate is $22.5 million to $25 million. That is just to build it. That includes no costs — such as interest — to finance it.
The current plan calls for the city to pay $24 million over 20 years to Fritzel’s group. To put that in perspective, when the city was thinking about building a $16 million recreation center at Wakarusa and Overland, it was projecting to pay $8 million in interest expenses. On a $24 million building, the interest expenses would be significantly more than that.
So, are we supposed to believe that Fritzel is going to dig into his pocket and cover $10 million plus of interest expenses just because he wants to help the city out? I’m not sure I would quite put it that way. There will be some offsets for Fritzel. For example, if Bill Self’s foundation makes a donation to the project, that money will go to Fritzel’s foundation, not the city. If Lawrence Memorial Hospital decides to build a wellness center in the facility, that money will go to Fritzel’s foundation, not the city. And, if a Fritzel entity builds the center, part of that $25 million construction cost will be a profit margin.
The other big factor to keep in mind is that Fritzel and his foundation also are likely to be both the builder and the landlord for the KU facilities on the site. As proposed Fritzel’s non-profit foundation would have an agreement with the city that would allow the foundation to be the landlord for the KU track and soccer facilities that will be on the site. No one really knows, at this point, what type of deal Fritzel has with KU athletics to build and manage those properties.
But I don’t think the city really cares about all of that. What city officials see is that the city would get a $24 million building for far less than what it would cost the city to build it on its own.
From KU, the city gets a traffic generator and a partnership with the most important entity in town. I think there is a high level of confidence that if KU builds its track and field stadium (remember, the city’s not paying to build it) that Lawrence will become a regular host of the Big 12 Track and Field Championships. I think there is some optimism the NCAA may hold larger track and field events at the site as well. KU plans to build a top-notch facility that will get the track world excited.
But even more important than that, is the city wants to strengthen its relationship with KU. It has been pleased with what the partnership has produced at the bisocience and technology incubator on KU’s West Campus. It wants to do more of that sort of thing. And city officials have picked up a vibe that this sports complex idea is very important to the upper leadership of the university.
How committed the city is to working with KU will become clearer in the next couple of weeks. At the request of City Commissioner Mike Amyx, city staff members will put together a study that shows how much cheaper the city could build this recreation center if it located it on the Wakarusa and Overland drive site.
It will be cheaper. A preliminary estimate shows that there will need to be about $10.7 million worth of city and state infrastructure improvements made to the Sixth and SLT site. The Wakarusa and Overland site currently is thought to need only a $200,000 traffic signal.
But city officials note that the 29-acre site isn’t large enough to accommodate any of the KU uses, like the track and field stadium.
At last night’s meeting, a majority of commissioners said they thought it was important the city find a way to work with KU on this project.
“I can tell you that Lawrence is very dependent on the future success of KU with its recruiting of students and faculty,” said Mayor Bob Schumm. “I feel like we are doing something here that will benefit the city and KU in spades for years to come.”
City Commissioner Aron Cromwell went a step further and said the project will help solidify Lawrence’s overall reputation in the region.
“The image of Lawrence is a young, vibrant, healthy community,” Cromwell said. “That makes us attractive to the region as a place to live, as a place to locate a business. These sorts of things are important.
“If we try to compete with Olathe by being Olathe, we’re always going to lose because Olathe is much better at it. This project gets at a core value of what Lawrence is about.”
• Well, I think I’m going to call it a wrap for today. I have several other good Town Talk items, including news of a new home furnishing store in the Malls, a new boutique downtown, weekly land transfers and several other tid-bits. But all of that will have to wait for future Town Talk columns. This recreation center has worn me out, too. I think the best course of action is for me to spend the rest of the day trying to figure out how not to be Olathe. (Now, if I can just figure out how to convince my wife to not be the Oak Park Mall.)