Archive for Tuesday, February 19, 2013

Details emerge about agreements between Fritzel entity and KU on Rock Chalk Park project

February 19, 2013, 9:31 p.m. Updated February 20, 2013, 12:12 a.m.


An entity controlled by Thomas Fritzel will be the exclusive provider of all concessions on the Kansas University portions of the proposed Rock Chalk Park project, according to documents released Tuesday.

The agreements — which involve Fritzel’s Bliss Sports, Kansas University Endowment’s RCP LLC and Kansas Athletics — also give Bliss rights to charge for parking at the park and free facility rental on the KU portion of the complex. They also provide more details about how much KU may have to pay Bliss to lease the facilities over the next 50 years.

Here’s a look at points from the four agreements, which were released by Fritzel after Mayor Bob Schumm said he wanted to see the documents before the city moved forward on a proposed development agreement for the park:

• A signed operating agreement between KU Athletics and Bliss Sports states Bliss “shall have the exclusive right to control and manage concessions associated with any use of the stadiums, including athletics-sponsored events, developer-sponsored events and third-party sponsored events.”

Any event held on the KU portion of Rock Chalk Park — this agreement doesn’t cover the city’s recreation center — will have its concession needs served by Bliss Sports. The agreement goes on to say that “any net revenues” generated from concession sales will be deposited into a special escrow-like account called a “maintenance fund.” That fund can be used by KU Athletics to make repairs at Rock Chalk Park over the years.

It is not clear, however, how, if at all, other Fritzel entities will be allowed to participate in the concessions business as suppliers or otherwise and whether the profits from those entities also would be deposited into the maintenance fund.

The details related to the concessions business were in contrast to comments Fritzel made in an interview with the Journal-World on Jan. 18.

“It will be run just like Allen Fieldhouse, 100 percent like Allen Fieldhouse,” Fritzel said when describing whether his entities would be in a position to make any money off the Rock Chalk Park. “The important thing is Kansas Athletics controls everything.”

Fritzel on Tuesday evening declined to comment about the agreements.

• Bliss, in addition to KU Athletics, will have the right to charge “reasonable parking fees” for any event on the KU portion of the project. Both Bliss and KU Athletics must agree to the parking rates, but the agreement states: “It is the intent of the parties that as a general rule, at a minimum, parking fees will be charged for conferencewide collegiate athletic events; statewide, regional, national and worldwide sporting events; and third-party sponsored events.”

City Manager David Corliss said the city will want to create a separate agreement to make it clear that the City Commission would have to approve any parking fees on a per-event basis. It has been proposed that the city would contribute money to help build the parking lots that would serve both the city and KU portions of the project. Corliss said that means the city will want to be involved in setting parking policy for the development.

• Bliss would have the authority to use any of the stadiums and other KU-related facilities rent-free. KU Athletics would have limited ability to deny Bliss use of the facilities. Bliss could host private athletic events at the park without city approval. Any nonathletic events hosted at the park would require a special use permit from the city.

• As previously reported, KU Athletics will pay $1.3 million a year for 30 years to Bliss Sports to cover Bliss’ costs to finance the project. Also as previously reported, Bliss will maintain ownership of the facilities for 50 years.

What has not been previously disclosed is that the lease also calls for KU to pay lease payments in years 31 through 50 as well. Fritzel made no mention of that provision when interviewed by the Journal-World in January.

The rate of the lease for years 31-50 will be the “fair market rental value” of the property as determined by Bliss and agreed to by Kansas Athletics.


Lawrence Morgan 5 years, 3 months ago

Chad, you are a wonderful reporter - New York Times quality!

Thanks for your work in this area to keep us better and better informed.

kujayhawk7476 5 years, 3 months ago

Mr. Fritzel had an opportunity to help his alma mater and the city of Lawrence, who have given him so much opportunity and basis for success for many years. However, with this one scenario, he has shown his true colors and ruined his reputation and that of his families and friends who are associated with him in this play for greed!

Both the University of Kansas Endowment Association and the City of Lawrence shoud distance themselves from Mr. Fritzel immediately and forever.

Paul Wilson 5 years, 3 months ago

Why is it that the poor expect charity from the rich? You don't get rich by giving it away. You make money by signing into deals that benefit you. I'm sure all of you have turned down raises out of the goodness of your heart and for the good of your company..??

Secular society, education system, and pop media teaches total independence, that money is everything, that you must be highly educated to make the cash, and that you're a failure if you don't. Then when an 'indoctrinated disciple' becomes rich...that same society jealously demonizes the person out of one side of their mouth and expects charity out of the other. Modern liberalism at its best.

repaste 5 years, 3 months ago

This rich demanding money from the masses. Kind of like the tax he uses the Gov. to collect for his own use at the Oread.

jack22 5 years, 2 months ago

Capitalism works very well when the workers earn enough money to buy the products that they make. It's the workers who drive the economy, when they're able to afford to buy houses and furnish them, everyone benefits. For example, it benefits America when everyone can afford to buy luxury goods like washing machines. When workers are paid a decent wage a company in turn sells millions of the products (washing machines) to every worker who can afford one. The problem arises when only the rich can afford a product like a washing machine. How many washing machines does a rich person need? When they're the only ones that can afford to but them the capitalist system collapses. Extreme capitalism like we have today is much like communism where a few control the means of production and reap nearly all the profit. There is nothing wrong with being rich, traditionally the rich in America were willing to give back to their communities through charity because it served their own interests. When people are happy and have most of their basic needs met there is less crime and people have more money to spend on the products a business sells. It doesn't benefit Fritzel if our taxes are so high to support this development that we can't afford to live in our homes, or the city can't afford to maintain our roads, sewers, and emergency responders. The current economic crisis we have today is in large part because the very rich have taken all the profits and haven't given back to their communities, and the poor have no money to buy their products. It doesn't benefit Fritzel at all if we're all over taxed to make him rich and we don't have any extra money left to pay for the parking and concessions he wants to sell us. Giving back to the community would actually be to his benefit in the long term, it's kind of sad that we've lost sight of these truths and that this idea even needs explaining.

average 5 years, 2 months ago

Of course, if someone tried to live a modest 1-car life in the modest 50s houses of Lawrence, they sure wouldn't get much use out of the rec center they're paying taxes for, because someone put it 10 freaking miles away!

rtwngr 5 years, 2 months ago

What is a decent wage? I would argue that what you and I decide are decent wages are probably totally different. So who decides? What exactly do you consider rich? You sound like President Obama saying you want the "rich" to pay their "fair share." Who gets to decide what's fair? The problem with the economy is not "rich" people refusing to give back it is government's refusal to stop confiscating wealth. The wealthy will reinvest and grow businesses, pay competitive wages, and spur the economy if we get government out of the way with their infinite list of regulations.

just_another_bozo_on_this_bus 5 years, 2 months ago

"What is a decent wage?"

What constitutes a "decent" wage is indeed highly subjective.

But a minimum or living wage is not really subjective at all-- it should allow a person earning such a wage to support themselves (and their families in the case of a living wage) with the basic necessities of life, as well as some of the most basic amenities. Any employer who doesn't pay such a wage is either exploiting that employee, poorly managing their business or providing goods/services at too low a price, or all of the above.

elliottaw 5 years, 2 months ago

I would LOVE to see a flat tax rate go into effect, everyone pay xx% in taxes weather they are rich or poor. That way everyone hurts the same, no special breaks for those earning over $xxx a year and no special taxes for those earning under $XXX a year

just_another_bozo_on_this_bus 5 years, 2 months ago

That may sound fair on paper, but in practice, it's extremely regressive. The taxes paid by those in the lower income brackets would be extremely painful, and cut into the basics required just to survive, while the higher your income, the less the impact on lifestyle, to the point that the wealthy don't even notice them.

elliottaw 5 years, 2 months ago

it would be far more fair then the system that we currently have where the low/middle income pay around 35% taxes on their income and the upper income pay about 15% if we could just find a nice middle number say 25% the lower income would have a little more pocket money and the upper income would still have a boatload at their discretion but everyone would be pay the same % of taxes. This would also give the state/fed. government money to start repairing some of the major holes that our country has in infrastructure, education and public safety

jayhawklawrence 5 years, 3 months ago

There is something disturbing about committing the citizens of Lawrence to a 50 year long debt to the Fritzel family.

Maybe we cannot afford this.

This city commission likes to buy things with other people's money.

jayhawklawrence 5 years, 2 months ago

My reading comprehension says that this so called city asset will require fees for using it from the citizens who are paying for it with their taxes. Those fees will go to the Fritzel family for the next 50 years.

jayhawklawrence 5 years, 2 months ago

My reading comprehension says that the citizens of Lawrence who will be paying a large chunk of the cost of this facility will then have to pay fees to use it for the next 50 years to the Fritzel family. Is that what you are reading?

just_another_bozo_on_this_bus 5 years, 2 months ago

These two projects are very tightly linked-- without the city subsidizing it thru a construction contract for the building and paying for at least half of the infrastructure and parking, and supplying free water in perpetuity, it doesn't pencil out for Endowment, KUEA or Fritzel.

jafs 5 years, 3 months ago

He's a liar, plain and simple.

We shouldn't do business with him at all, and especially not with these sorts of deals.

irvan moore 5 years, 2 months ago

i don't blame fritzel, i blame corliss and the city commission

Joe Hyde 5 years, 2 months ago

“It (the concessions business) will be run just like Allen Fieldhouse, 100 percent like Allen Fieldhouse,” Fritzel said (on Jan. 18th) when describing whether his entities would be in a position to make any money off the Rock Chalk Park. “The important thing is Kansas Athletics controls everything.”

And from today's news story:

• A signed operating agreement between KU Athletics and Bliss Sports states Bliss “shall have the exclusive right to control and manage concessions associated with any use of the stadiums, including athletics-sponsored events, developer-sponsored events and third-party sponsored events.” (italics added)

That's a major change in operational control to accomplish in just 30 days. So...does Thomas Fritzel control KU Athletics?

Bob Forer 5 years, 2 months ago

When you have liars, crooks, and thieves making deals with other liars, crooks, and thieves, anything is possible.

lunacydetector 5 years, 2 months ago

i want to break down the KU portion and city portion, and see where this $1.3 million applies percentage wise...then amortize the KU Athletics construction cost to get a ball park rate of return, not counting concessions - i hope this comment doesn't get censored.

Pepe 5 years, 2 months ago

4 commissioners need to be voted out. Amyx should stay.

This deal is so unbelievably bad for the city, I have a tough time blaming it on mere stupidity of the 4 commissioners. I doubt any of them are stupid men. Thus, this raises a question of why would they possibly vote for this abomination. I hope I am wrong, but this thing smells rotten and corrupt.

If this project is such a sure fire money maker, let KU and/or private industry build it.

Catalano 5 years, 2 months ago

Well, you'll have to wait two more years to vote Schumm and Dever out. Cromwell's and Carter's terms are coming to an end and they're not running for re-election. So pay attention to who you vote for in the primary. Last night Soden and Rost both spoke out against moving forward.

just_another_bozo_on_this_bus 5 years, 2 months ago

None of the 4 commissioners who voted for this are standing for election this time around. So there is very little in the way of "courage" involved. Cronyism is the best way to describe the impulse behind this vote.

Wayne James 5 years, 2 months ago

Sounds like aa rip-off scheme to this reader! Structures, I don't care how well planned or constructed, will NOT last 50 years! The only structures lasting 50 years or more were built PRIOR to 1900. Today's materials and labor are not what they used to be. Houses were mostly constructed out of yellow pine and today's houses are built with a much softer white pine or other cheaper wood. Build the "Rec Center" build another sports facility and it might last 10-25 years before it is torn down to make way for someone else's bright idea. And where will the citizens of Lawrence (mostly KU students that come and go) be? Still paying for something that doesn't exist. Let private investors pay for and build these fancy projects...NOT the taxpayers. Let these investors then form a corporation to operate these facilities and charge one hellacious fee to those who then utilize these facilities. Sounds fair to me. That way those who do not use these wonderfully built facilities won't be left holding the bill for the money that it took to build something that will not be worth anything 25 yrs from now!

Pastor_Bedtime 5 years, 2 months ago

Since this appears to be a done deal, I think it would be reasonable for the city to now adopt a policy that Fritzel must step aside from consideration from future development partnerships with the city and major projects in town. He's benefitted enough from preferential treatment so far ~ let other entities have an opportunity for a change. Same with Compton.

And kudos to Mr. Amyx for having the gumption to stand against this project.

Anthony Mall 5 years, 2 months ago

and this town thinks sgt. Monroe is a criminal lol... While people are worried about a few tickets getting fixed Fritzel, Compton, and the city commission have been robbing you blind lol...

jayhawklawrence 5 years, 2 months ago

You like to believe that very qualified people are making these decisions. I believe that might be naive.

Perhaps it is time to look at what safeguards are in place to protect our community from very expensive mistakes made by individuals who manage to get elected to the city commission. Getting elected does not automatically make you a financial wizard but it does give you the ability to sign off on huge amounts of money that does not belong to you.

Matthew Herbert 5 years, 2 months ago

Excellent article Chad - can you print out and staple copies of this to the front door of the commission's meeting room?

57chevy 5 years, 2 months ago

I just have a really hard time believing that the city ever thought the current financing deal was reasonable. I think this just proves once again that corruption and undue influence of city officials seems quite benign until people find out what it really costs. I am a fervent supporter of the concept of a rec center, but, at this point, have to agree with all the naysayers that the city manger's oversight has completely failed. The only thing that seems to be assured is that the state (read KU athletics), the KU alumni and the citizens of Lawrence are being offered something good (a rec center) in exchange for a deal with the devil (Fritzel). I think we have reached the point where a public vote is needed and, unless a clear and uncomplicated deal can be reached, the rec center needs to be canceled until a responsible city manager is put in place that can ensure that public funds are haphazardly handed out to greedy developers. In local politics corruption really is black and white. First you fix a few speeding tickets in exchange for KU basketball tickets, the next thing you know, half the athletics department is in jail and city and KU are selling their future for a rec enter with no oversight. Vote accordingly in the current city election. At the next candidates forum a good question for someone to ask is: WIll you retain Dave Corliss as city manager?

Patricia Davis 5 years, 2 months ago

Where's a good injunction when you need one?

beezkneez 5 years, 2 months ago

We pay for this and Fritzel sits back and gets rich. On top of the construction money he's going to make he wants the parking and consession money?!?! He's getting greedier as this thing moves along and the commissioners are allowing it.
I agree that we need gym space but we don' t need to sell our souls to get it. Why aren't we negotiating a fair deal and not what Fritzel proposes? He can't make any money if it's not built, so we do have leverage to use. Duh.

Jason Johnson 5 years, 2 months ago

I think I'm going to run for City Commission. My sole platform will be to vote no against all these rich people and their projects that benefit no one but themselves.

Matter of fact, I would go through city Code line by line and try to weed out any ordinance that even had a whiff of benefiting anyone but the grand majority of the citizens of Lawrence.

Jason Johnson 5 years, 2 months ago

Well I'm not running this term, maybe next. You'll know who I am, since I'll be the one whose sole platform will be to get rid of the privateering that runs rampant in this town. I'll be untouchable (Eliot Ness reference) and I won't be bought out.

del888 5 years, 2 months ago

This project should not have ever been referred to as a "community center". It is clearly not designed to benefit the community and it appears the the community will have very limited access to the facitity, as there will be other 'events' taking place all the time. The name should be changed to "Lawrence/ KU Sporting Complex". Question: if there is an 'event' taking place at the facility and parking is being charged, will I also have to pay for parking if I am going just to use the facilitiy for recreational purposes? Maybe the 'city' should build a parking lot across the street from the new facility and put in meters. My belief is that if the community doesn't currently use Holcum Park or the East Lawrence Rec Center, it will probably not use this facility either. It's not exactly located in a convenient area.

del888 5 years, 2 months ago

• Bliss would have the authority to use any of the stadiums and other KU-related facilities rent-free. KU Athletics would have limited ability to deny Bliss use of the facilities.

So.... KU wants to host a major sporting event at their own facility, but can't because Fritzel would like to use the facility for his own personal use (like a family picnic)! KU: did you REALLY agree to this. Did anyone from KU read this agreement or was it rubber stamped? This is like building a house and then giving the builder the right to use your house for his own personal use. I can't stop laughing.

fuel_for_the_fire 5 years, 2 months ago

Of course they agreed to it. The contract is written this way to circumvent NCAA rules regarding recruiting activities.

Richard Heckler 5 years, 2 months ago

Let them know!!!

Mayor Bob Schumm Home (785) 842-6729 Work (785) 842-7337

Vice Mayor Michael Dever (785) 550-4909

Commissioner Hugh Carter (785) 764-3362

Commissioner Mike Amyx Home (785) 843-3089 Work (785) 842-9425

Commissioner Aron E. Cromwell (785) 749-6020

blindrabbit 5 years, 2 months ago

Ma, where did you hide the Lasix?, need it after trying to keep up with this story!

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