Geary County officials will auction off 182 Junction City building lots later this month for nonpayment of taxes and fees by a development group that includes Lawrence businessman and Rock Chalk Park partner Thomas Fritzel.
An official with the Geary County attorney’s office confirmed that lots owned by Fort Development LLC will be sold at an Aug. 28 sheriff’s auction after at least three years of unpaid real estate taxes and special assessments. The property is part of the company’s troubled Olivia Farms housing development.
Fritzel is the resident agent and an investor in Fort Development LLC, and has been considered by Junction City officials to be one of the lead developers of the Olivia Farms project. In Lawrence, Fritzel has been the driving force behind the public-private partnership for the Rock Chalk Park sports complex now under construction in northwest Lawrence.
The upcoming sheriff’s auction has been months in the making. The Journal-World reported in February that Fort Development LLC owned property in Junction City with about $3.4 million in unpaid taxes, special assessments, interest and penalties. This week a Geary County Treasurer’s spokeswoman said the amount is now about $3.5 million.
The bulk of the money that Fort Development owes is for special assessments meant to reimburse the city for public infrastructure such as streets, sidewalks and stormwater improvements related to housing ventures in Junction City. Junction City financed about $11 million in infrastructure that was built by Fort Development under a no-bid contract. Junction City expected special assessments from the new housing development, which is near Fort Riley, to repay the city over a 20- to 30-year period.
This week, Junction City Mayor Cecil Aska said the upcoming sale will help bring some closure to a tough development deal for the city.
“The city probably never should have ventured into it, period,” said Aska, who wasn’t on the commission when the deal was struck in 2006. “City leaders at the time, though, were acting in good faith, and they (Fort Development) haven’t lived up to their end.”
An attorney for Fort Development said his clients didn’t have any comment on the pending sale, and Fritzel also did not respond to a request for comment. But Fritzel did provide a written statement in February detailing how the company had worked to make the development successful.
“The problems in Junction City are the result of a perfect storm of unrealized expectations and predictions by many people, ourselves included,” Fritzel wrote in February.
The project was dealt a major setback in 2007 when the Geary County Commission vetoed an incentive package for the development. At nearly the same time, the Junction City real estate market also took a downward turn.
The sheriff’s sale is not unexpected. Fritzel in February indicated that Fort Development might not be able to turn the project around, in part because of a city policy that forbids development on any of the property until the back taxes and special assessments for all the parcels are paid.
“Given those realities, Fort may be unable to make any reasonable progress toward developing Olivia Farms, which is extremely unfortunate because Fort has invested millions of dollars of its own capital in Junction City,” Fritzel wrote in February.
Lawrence officials in February said Fritzel’s involvement in the Junction City development did not give them pause in an entering a public-private partnership with his Bliss Sports firm to develop Rock Chalk Park.
This week, city officials reiterated that position. City Manager David Corliss said there are performance bonds and contractual provisions in place to guard the city’s interests.
“We believe we have sufficient protection of the city’s interests out there,” Corliss said.
The Rock Chalk Park project also does not involve the levying of any special assessments that Fritzel’s firm will be expected to pay. Instead the city is paying Fritzel entities to build a recreation center, which was competitively bid, and about $12 million in parking and infrastructure that was not competitively bid.