Archive for Tuesday, February 19, 2013

Mayor wants more information on KU-Fritzel agreements before final approval of rec center plan

February 19, 2013

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It is decision day — sort of — for the idea of a $25 million, city-owned recreation center.

Commissioners at their meeting tonight are set to take their biggest vote yet on the long-debated project, but Mayor Bob Schumm said Monday he will delay final approval of a key development agreement until the city gets more information.

Specifically, Schumm said he wants a better understanding of how Kansas University Endowment and Lawrence businessman Thomas Fritzel propose to operate the non-city portions of Rock Chalk Park, which will include a track and field stadium, soccer field, softball facilities and other amenities next to the city’s recreation center.

“I was promised by Thomas Fritzel that those agreements would be made public, and I’m going to hold his feet to the fire on that,” Schumm said.

Details sought

Schumm said he will ask his fellow commissioners to withhold final approval of a development agreement to build the recreation center until agreements between KU entities and Fritzel’s Bliss Sports are made public.

The development agreement between the city and KU Endowment’s private corporation RCP LLC spells out how the city will contribute millions of dollars to help build infrastructure to support Rock Chalk Park, will provide a property tax abatement for the project and will rebate almost $1 million in city fees that normally would be charged to the development.

For those reasons, Schumm said the public deserves to know more details about how Fritzel’s Bliss Sports LLC will be involved in the project. Officials have said Bliss will finance and own the various stadium and KU-related facilities for 50 years, and that KU Athletics will make about $39 million worth of lease payments to Bliss during the next 30 years.

But the agreements detailing what role Fritzel’s company will play in operations of the Rock Chalk Park property have not been made public.

Dale Seuferling, president of the Endowment Association, confirmed to the Journal-World on Friday that the agreements with Fritzel’s firm had been signed, but he declined to make a copy available.

Fritzel told the Journal-World in January that he would make the agreements public once they were finalized, but when contacted Monday, he declined to do so.

Fritzel also said in January that the agreements would ensure that his company would not have any special rights to profit from Rock Chalk Park, such as through concessions, parking fees, facility rentals or other such agreements. Fritzel went so far as to say that the only revenue he would derive from the project are the lease payments, which will be used to repay any loans he takes out to build the facilities for KU.

Seuferling, though, declined to go into details about what the agreements allow in regard to Fritzel’s ability to generate revenue from the property.

A two-vote process

Schumm said he now wants to find out those details, but he also wants to keep the project moving forward.

Schumm proposes that commissioners still take a vote at their meeting tonight on a development agreement between the city and the Endowment Association’s RCP LLC.

But the agreement will be in an ordinance, which means it must be approved on “second reading” before it becomes official. Normally, the second reading of an ordinance is a routine matter that happens the following week.

Schumm, though, said he will delay the second reading of this ordinance until the requested information is provided. He said he hopes the city would be in a position to give final approval to the development agreement by early March.

“I really believe it is time that we either move ahead or move aside on this project,” Schumm said.

Development details

In addition to wanting more information from KU Endowment, Schumm said the city also needed to provide more information about its proposed development agreement.

The city posted an approximately 50-page copy of the agreement to its Web site last week, but several key parts of the document still had blank pages left to be filled in.

The agreement lists 11 exhibits that are a part of the development agreement, but 10 of the 11 exhibits were left blank with the understanding that they would be filled in later. Schumm has said he expects many of those exhibits to be completed by the time the city approves the document on second reading.

Some of the exhibits are other agreements that will govern the project. For example, they include: a purchase agreement and easements that allow the city access to the 26-acre site where the recreation center will be built; a site plan detailing how the entire project will be built; and plans for how Bliss Sports will build infrastructure to serve both the KU and city portions of the project.

The development agreement, though, does provide some new details related to the project. They include:

• The city is estimating it will rebate $902,000 in city fees that normally would be paid by Rock Chalk Park Development. Those include building permit fees and water and sewer impact fees. But the largest chunk is forgiveness of $785,000 in special assessments that the property would have to pay for a sewage pump station. The city at-large now will pick up those costs. Those costs are not included in the city’s $25 million price tag for the project.

• The city now estimates the value of the city’s 181,000-square-foot recreation center — including eight outdoor tennis courts — will be $22.6 million. It estimates the value of the infrastructure — which will include roads, parking and utilities to serve both the city and KU portions of the project — will be $8.3 million. Previous estimates had been as high as $13 million for the infrastructure and parking.

The agreement calls for the city’s costs for the recreation center and related infrastructure to be capped at $25 million.

Commissioners meet at 6:35 p.m. today at City Hall.

Comments

Keith Richards 2 years, 3 months ago

Seuferling/KU Endowment is beyond shady and apparently they are liars as well. What is in this agreement that caused you decide not to release the document?

Schumm, you should release the exhibits and the KU documents weeks before a vote is taken. The public deserves time to review and then make comment. To release "many of those exhibits to be completed by the time the city approves the document on second reading." is a disservice and unethical.

The price tag for the public goes continually higher, and "deal" we are receiving gets continually worse by the day.

lama 2 years, 3 months ago

Does the Public Records Act apply to KU Endowment?

Bob Forer 2 years, 3 months ago

Not exactly. K.Richards is absolutely right. All documents need to be released weeks before a vote is taken. Schumm is merely trying to placate us in putting a little lipstick on the pig.

somebodynew 2 years, 3 months ago

"Those costs are not included in the city’s $25 million price tag for the project. "

And it starts before they even sign the paperwork. Why is it I have this feeling this won't be the last time we read this words if this thing moves forward ??

I am surprised that Mr. Schumm is demanding these agreements, but also agree that more time is needed to be able to read them. Plus, the City has apparently not made full disclosure of their part yet. Slow down !!!

just_another_bozo_on_this_bus 2 years, 3 months ago

If it goes to a vote, you get to vote, too, and you can base that vote on whatever information turns your crank.

3up3down 2 years, 3 months ago

Make Fritzel pay his back taxes of 3 point some odd million first.

deec 2 years, 3 months ago

So can anyone avoid paying property taxes on their homes or businesses until they sell, or is that a special privilege reserved for special folks? If so, I'm sure every person in Kansas whose home has sat on the market for moths will be relieved to know they don't have to pay property tax until the home is sold.

kuguardgrl13 2 years, 3 months ago

I believe that's a policy specific to Junction City. I'd hope that Lawrence wouldn't be so stupid to have something like that in place. Or they'd at least let the developer re-zone the property if that's what will sell. Of course we're not the most intelligent when it comes to building more housing than we need.

Eileen Jones 2 years, 3 months ago

Good point. Why are we even considering doing business with a man who left another city in the lurch and in debt?

Cant_have_it_both_ways 2 years, 3 months ago

It would suprise you if you knew who was in the investment group.

Missingit 2 years, 3 months ago

The more and more I read this my concern is this infrastructure. It seem like Lawrence could fall victim to the Fritzels the way Junction City did. Since this is a no bid I bet he charges the city an extra 2-4 million for infrastructure compared to a bid process and then the great deal becomes more of a rip off Nd the rec center has to be downside to pay for the cot over runs. I bet Junction City felt like the houses Fritzels built were gonna be a good deal as well

Missingit 2 years, 3 months ago

That's cost over runs sorry about that

deec 2 years, 3 months ago

If the government is paying for your house, then yeah. They should.

jhawk1998 2 years, 3 months ago

A sale item is only a good deal if you were going to buy it anyway. In this case the city is being convinced of something it had not previously determined we needed. Regardless of the hard sell this doesn't fit into the city plans. This impromptu long-term planning needs to stop.

deec 2 years, 3 months ago

And don't forget the annual cost overruns on operating costs. I seem to remember that it will be about a million a year to run, and the sales tax revenue will be $350,000 short.

Hadley_says 2 years, 3 months ago

If there isn't something noxious in the KUEA-Fritzel agreement, it would have already been released.

I hope the commissioners would start to understand this. This thing needs to be examined and discussed in the community before any so-called second-reading of the ordinance.

jack22 2 years, 3 months ago

The car analogy I was thinking of goes something like this. A family has saved to buy a new car and they decide to treat themselves to a more expensive car. The car is priced at $25,000, but the seller is adamant that it's true value is at least $35,000. After several days of negotiation the buyer decides to negotiate a deal that he feels will benefit everyone. The seller agrees to pay $30,000 cash for the car and the seller for his part gets full use of the car on weekends. It's no wonder Fritzel loves Lawrence, our city leaders have no negotiating skills. When the city is putting so much money into developing his land we should have more negotiating room to demand that the needed land and much of the building cost be paid for by the developer, not the city. Let me put it this way, when you took your wife out for Valentine's Day did you ask her to pay for it? No, because it's not really a gift when the recipient has to pay for it.

lunacydetector 2 years, 3 months ago

i might be more comfortable if the whole deal wasn't so confusing, expensive and how elected and appointed government officials have been pushing so hard for this thing to happen.

i guess we're supposed to turn a blind eye. the library boondoggle is hard enough to stomach.

jack22 2 years, 3 months ago

I can remember my father telling me about the real estate deals that he made years ago in several different cities. In one he donated 5 of his 20 acres so the city could have a place to build a water tower and in exchange the city brought in the roads and sewers and changed his zoning to allow a mixed us of commercial and residential development. In another he proposed that he'd give the city 10 acres for soccer and baseball fields in exchange for a change in zoning from agricultural to residential so he could build houses on the remaining 40 acres. In another the city came to him with a proposal to build a distribution center on his land. The city wanted to increase their tax base and add jobs, so they built the roads, sewers, and put in the necessary street lights to bring the business there. In exchange we agreed to sell the land to a large corporation at cost, with the benefit to us being that the rest of our land was now ready for development as the city paid the cost of the needed infrastructure. All of these deals benefited both the city and the developer. In this current deal the benefit is almost entirely with the developer. If Fritzel wanted to, or if the city had any negotiating skills, he could give us the land, built the recreation center, and give both as a gift to the city. In exchange, we would bring in the streets, sewers, and other utilities, pay for the maintenance of the recreation center, and he'd still make a handsome profit when he sells or rents the remainder of the property we paid to develop.

Eileen Jones 2 years, 3 months ago

This whole project should be scrapped. The whole thing just smells.

I'd like to see a YMCA come here. Not a huge mega-center that will cost a fortune and that the city does not need and the citizens (aside from the profit-makers and Bonnie) do not want.

deec 2 years, 3 months ago

"The agreement lists 11 exhibits that are a part of the development agreement, but 10 of the 11 exhibits were left blank with the understanding that they would be filled in later. Schumm has said he expects many of those exhibits to be completed by the time the city approves the document on second reading. "

Why in the world is the city even thinking about giving first approval to a scheme that has blanks? My folks taught me to NEVER sign off on anything with a blank on it.

Bob Forer 2 years, 3 months ago

"Fritzel told the Journal-World in January that he would make the agreements public once they were finalized, but when contacted Monday, he declined to do so."

Another Fritzel lie. Yet the CC is still hell bent on pushing this through. Can it get any dirtier?

Keith 2 years, 3 months ago

By CC do you mean City Commission or Chamber of Commerce? Never mind, they're nearly identical.

irvan moore 2 years, 3 months ago

Mayor Schumm, please table this issue while we wait for the details to be made public, it is worrisome that you and the other commissioners will vote to approve a project when you admit you don't know all the relevant information. why in the world would you have a vote to approve at this time before even knowing exactly what you are voting on.

Linda Aikins 2 years, 3 months ago

OMG. Seriously? 11 pages with 10 blank; yes we'll give you the details - wait, no we won't. I can't believe that you aren't setting this completely aside and getting on with honest and up front business deals.

How does this help the city? Will it be something Joe Average can use? I am in shock that the commission would even be willing to do the ordinance on this.

Pig lipstick - couldn't have said it better.

If this goes further, not one of the current commissioners who consider passing this should be re-elected.

Michael Bennett 2 years, 3 months ago

This is becoming the new South Lawrence Trafficway...

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