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Archive for Tuesday, June 4, 2013

Cost estimates for Rock Chalk Park infrastructure come in about $3 million higher than expected; Self’s foundation to make $2 million donation

June 4, 2013, 3:24 p.m. Updated June 4, 2013, 11:48 p.m.

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It’s done. Despite a key cost estimate for roads, sewers and other infrastructure coming in around $3 million more than expected, city commissioners gave the final approvals needed for the city’s 181,000-square-foot recreation center at Rock Chalk Park to move forward.

The late Tuesday night approval capped a busy day for the controversial project. Earlier in the day, Bill Self’s Assists Foundation agreed to make a $2 million donation to partially offset some of the higher-than-expected costs estimated for infrastructure to be built by a group led by Lawrence businessman Thomas Fritzel.

Commissioners on a 4-1 vote authorized City Manager David Corliss to sign a yet-to-be-drafted construction contract with Fritzel’s firm to build the recreation center. That contract — which isn’t scheduled to come back for further City Commission action — will financially commit the city to build the project.

On Tuesday, commissioners acknowledged the project had many twists and turns and required the city to deviate from its standard bidding practices for public projects. But a majority of commissioners expressed supreme optimism about the final product.

“What I’m certain of is it will be a very, very fine facility and will be a good value for the community,” City Commissioner Bob Schumm said. “I’m not ashamed of what we accomplished. I’m very proud of what we accomplished.”

Matter of timing

Tuesday’s final approval of the project was unexpected. City commissioners on their agenda did not list that they would be voting on giving Corliss authority to sign the construction contract. The agenda item was listed as an update, and a staff memo indicated that there would be further agreements for city commissioners to act upon in the future.

The final approval came despite the fact the public had only a matter of hours to review the latest cost estimates for the project. The city released the latest cost estimates for roads, sewers, parking and other infrastructure costs about 2 p.m. on Tuesday, a little more than four hours before the public meeting.

Mayor Mike Dever defended the timing, saying city officials were privy to the estimates for several days earlier and had adequate time to review them.

“As for the public, that is a question that is up to each individual to decide whether there was adequate time,” Dever said. “There was time for an expert assessment of the costs.”

Crunching numbers

As for the new estimates, Kansas University Endowment Association and the private company led by Fritzel estimate the infrastructure, site work and tennis court construction at the site will cost $12. 2 million. City officials had estimated it would cost $9.3 million. The city deviated from its standard practice and gave a no-bid contract to Fritzel’s firm to build the infrastructure for the site, which will hold the city’s new recreation center and several athletic facilities that will be owned by Fritzel’s firm and leased by to Kansas University.

City officials on Tuesday also announced that Self’s Assists Foundation will donate $2 million to help pay for the infrastructure costs, and thus reduce the total amount of money the city will be responsible for paying. The city now says its absolute maximum contribution for the project will be $22.5 million.

That amount is down from a $25 million maximum that the city guaranteed earlier this year when it entered into a joint development agreement with Fritzel’s firm and the Endowment Association. But, as of two weeks ago, city officials were optimistic the amount would be closer to $21.6 million. That’s because bids for the 181,000-square-foot recreation center came in dramatically lower than officials expected. A company led by Fritzel won the construction bid for the center with a $10.5 million bid, which was $8 million to $10 million below what architects had estimated.

Despite that low bid, the higher-than-expected infrastructure costs still position Fritzel’s firms to receive nearly all of the $25 million that it had expected at the beginning of the project. According to numbers provided by the city, the total project costs for the recreation center and associated infrastructure will be $24.5 million — $22.5 million paid by the city and $2 million paid by Self’s foundation.

City engineers examined the cost estimates and said the per unit costs of the work were in line with other infrastructure work being performed across the city. The city plans to do a further audit of the costs after the work is completed.

Engineers said a preliminary analysis found the infrastructure costs were nearly $3 million higher than estimated for a variety of reasons. They included: $583,000 in landscaping costs that were not accounted for; $895,000 in increased costs related to upgraded parking lot pavements; and about $915,000 in legal, interest and construction management costs incurred by the developer.

Construction work on the recreation center — which will include eight gyms, a fitness center, indoor turf area and other amenities — could begin in the next several weeks. The center is expected to be open by late 2014. The recreation center will be adjacent to track, soccer, and softball stadiums that will be owned by Fritzel's group but leased to Kansas University Athletics.

Comments

cheeseburger 1 year, 6 months ago

The costs for the facility come in at half what is expected, and the infrastructure costs come in $3 million over. And part of the overage on the infrastructure was allegedly '$583,000 in landscaping costs that were not accounted for; $895,000 in increased costs related to upgraded parking lot pavements; and about $915,000 in legal, interest and construction management costs incurred by the developer.'

Someone's head ought to spin on this one.

Dont_Tread_On_Me 1 year, 6 months ago

If a decision was made to change the parking from asphalt to concrete, the $895k may be reasonable. The other two I agree with you on.

bidrigging101 1 year, 6 months ago

The parking was alway concrete, Bill Penny is a partner of Fritzel's in the Junction City development scandal. This is Thomas Fritzel's way, bait and switch.

George_Braziller 1 year, 6 months ago

I doubt the numbers have stopped changing. I'm betting that it will end up like the state Capitol building renovations and the final cost will be much higher than the original estimates.

jafs 1 year, 6 months ago

The Capitol thing is even worse, if I remember right.

Wasn't it originally supposed to come in around $3 million, but is now over $300 million and still counting?

George_Braziller 1 year, 6 months ago

Somewhere in that range. It's so horribly over budget and so many years behind schedule I think it has become the bastard child no one wants to talk about. It's a project that will never end.

lawrenceksfan 1 year, 6 months ago

This is exactly what happened when Robinson was built. The Lawrence taxpayers were duped into funding Robinson with the promise that Lawrence residents would have access to the gyms. This was the rational for Lawrence not getting a YMCA/YWCA. Once KU got our money, the doors were locked and residents have never been allowed in the building.

EJ Mulligan 1 year, 6 months ago

Everything else costs less. But Fritzel, allowed to bypass the bid system, comes in high -- to the tune of $3 million. Something reeks.

spiderd 1 year, 6 months ago

Find below a smattering of quotes from this fine news source one can find with a 15 minute google search. Moral of the story: they've never had a clue... but the theme has been that we would be getting tremendous value for the extreme amount of money we'd be spending. Reality is that well over 1/2 of the money now goes to infrastructure - and the value promised is absent. This is what happens when you build a recreation center outside of town, with all of the associated infrastructure costs that come with that. Oh, and you provide that infrastructure for a KU complex (Fritzel owned) just for kicks.

Why would we do this? See this December 7, 2012 quote: "“I’ve always said this project only makes sense if we stay laser-focused on economic development and growing jobs,” Carter said. “If we grow more jobs, that helps make a lot of these issues in the future easier to deal with.” A dubious claim to be sure, but regardless - one has to wonder if this is genuine use for the 1994 recreation vote that commissioners have used to justify the project? Well over 1/2 of the money goes to infrastructure and we use a 19- year old recreation vote for justification?

Quotes:

June 15, 2012: "But as city officials on Friday released the most detailed figures yet for the project, Lawrence Mayor Bob Schumm said he’s becoming more convinced the project is a good deal for the city. That’s in part because the new numbers indicate Lawrence developer Thomas Fritzel and his company essentially are offering to finance the project interest free, representing a potential savings of about $8 million for the city."

"The $24 million in payments to Fritzel will not cover any of the infrastructure and road costs to serve the site. The city has estimated it will cost about $2.4 million to extend water and sewer service to the site. Currently, the city is proposing those costs be paid for by city ratepayers. "

August 8, 2012: "City estimates placed the infrastructure costs for the new building at $6.45 million. Corliss said some of the infrastructure costs could be paid using funds from a transportation development district sales tax levied on businesses in the area."

November 7, 2012: "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. "

January 4, 2013: "The city believes the value of the project as it is currently designed is closer to $33 million, meaning Fritzel would be providing the city a value."

We are not getting a value anymore! We're paying straight up expenses, well over half of which are non-recreation, for an expensive project built outside of any existing residential area. And yes, a $2 million donation is great, but it's going toward... wait for it... infrastructure. No bid infrastructure one might add.

optimist 1 year, 6 months ago

Exactly right. We had at least one commissioner and a couple of candidates in the last election that were very clear about this. They voiced their concerns about the lack of details regarding costs and the lack of the required competitive bid process. Too many of us that voted in the last election weren't listening or didn't care it appears.

TalkSense 1 year, 6 months ago

As this expensive, convoluted and (I think) unnecessary project continues to twist and morph, it's difficult to establish what's right and what's wrong, who's honest and who's a cheat. What does seem clear - based on this project and past experience - is that the real estate developer has the reputation of being a buccaneer without scruples. It's disappointing to me - astonishing, actually - that the City of Lawrence, KU Endowment, and now Bill Self are having anything to do with the Fritzel firm. My respect for all three is diminished by their involvement.

lawrenceksfan 1 year, 6 months ago

and not even give the public time to review the bid before voting on it. Sort of like how they rushed the initial vote before the elections so that the Lawrence voters would consider this a done deal, making it less of an issue on election day. This is an absolute outrage. Somebody please start a lawsuit against the city!

deec 1 year, 6 months ago

If I remember right, the operating expenses for this monstrosity will consume the entire annual parks and recreation budget. Look for a sales tax hike or bond issue in a couple of years to support all the rest of the city's recreation needs.

Mike Myers 1 year, 6 months ago

Remember that $50k the city made Fritzel pay for his botching of the Varsity House job? I guess he wants it back.

hujiko 1 year, 6 months ago

The city didn't make him pay squat. Fritzel decided his own punishment before the city decided to fully investigate his unscrupulous business practices. Doesn't make him any less of a jerk.

Crazy_Larry 1 year, 6 months ago

Remember the Golden Rule! Those with the gold make the rules... Now, pay up! The whole situation is as crooked as a dog's hind leg. Who are the real criminals? Potheads? Hardy har harrrr!

Anyway...pass me another beer... Did you watch "The Biggest Loser" last night? Fat people losing weight! Wouldn't it be better if we made cheeseburgers illegal then jailed these people? The government's job is protecting us from ourselves, ya know.

Bob Forer 1 year, 6 months ago

Well ..... but....... ya know...... Thomas Fritzel told us he was giving back to the community. And Jeremy Farmer said he supported the project, in part, because Thomas seemed like such a nice guy.

And by golly, I believed them. I guess I am a moron.

KEITHMILES05 1 year, 6 months ago

I continue to be disappointed in the Assists Foundation making donations only to Lawrence and KC area. The KU coach is a KANSAS statewide coach and not a penny goes elsewhere. I refuse to continue contributing.

Brian Hall 1 year, 6 months ago

Where else would you like donations to go? Lawrence and KC are mostly served by KU (you know, since the university and med center are there). I don't see big money donors from K-State donating money to Lawrence area opportunities. K-State is a KANSAS statewide school but they rarely spend a dime on things east of Topeka.

KEITHMILES05 1 year, 6 months ago

You obviously are of the opinion the only areas which count for KU are Lawrence and KC. Rather naive and dumb to say the least! KU has a presence throughout the entire state and the Assists Foundation should be a reflection of that. Although they are operated independantly it would be better served to have the Assist Foundation branch out. Perhaps you are unaware this is not the first donation as they have done several in the past and all have gone to these two cities. Attempting to bring in KSU to the discussion is stupid.

joes_donuts 1 year, 6 months ago

I am happy for the facility but this is sad. For someone to completely blatantly take advantage of the city like this while the whole community watches is unthinkable.

BringBackMark 1 year, 6 months ago

It's time these clowns (commissioners) are held accountable, along with the City Manager. Where are the procurement requirements for these large of projects by a public body? These bozo's cost the tax payers $5 - $7 million with their reckless no-bid approach to this project. Oh, but it came in under $25M so we're all supposed to be happy.....? What is this blank check approach to the infrastructure? Bill tried to bail the idiots out but even he didn't want to extend beyond $2 million. Class Action lawsuit everyone!

frankfussman 1 year, 6 months ago

Kansas University wanted this all the time. The recent Kansas Alumni Magazine touted this as a real benefit for the university. So much for town/gown relations. They get the benefits, we get the shaft.

Curveball 1 year, 6 months ago

The real winners are KU Sports INC and KUEA. Bill Self gets to look over all the super prospects right here in town and then claim they were not on campus, but in a "City Facility."In the long run it's probably cheaper this way to keep building the KU Basketball Empire/ NBA farm system. After it is built, just try getting in to use the facilities if you are just an ordinary citizen of Lawrence.

bidrigging101 1 year, 6 months ago

Self’s Assists Foundation may see a drop in donations after this move. Its not Bill and Cindy"s money they are donating is it? The folks that gave to Assists Foundation probably didn't know their hard earned money was going to be lining Thomas Fritzel's pockets. What is the Assists Foundation mission?

just_another_bozo_on_this_bus 1 year, 6 months ago

I've little to say. No need since this embarrassment speaks quite loudly for itself.

The question now is whether this is how city government continues to operate into the future.

jafs 1 year, 6 months ago

I see no reason why it wouldn't, given the very low voter turnouts and the general makeup of the city commission.

jack22 1 year, 6 months ago

This whole thing reminds me of one of those deals where a co-worker says they're going to do you a favor and give you a ride home from work and they somehow end up talking you into buying them a new car. I've got to hand it to Fritzel, this is pure genius, the guy really ought to make an infomercial. I can see it now. Want to know how to turn your useless farm land into a thriving commercial development with no money down? Send me your money and I'll tell you how you can get your city to pay for all the roads, sewers, and even the building materials you need to make your property a thriving commercial center at no expense to you. The commercial will go on to explain, first you have to come up with a bold idea where the people of your city think you're doing something for their benefit. Once you get the uninformed citizens of your city on the hook to pay for all the infrastructure, there's no telling how much money you can make, the possibilities are endless. For example, you can charge the people who paid to build it for you a special tax, for parking, for vending, and a host of other expenses you can make up as you go along. Don't believe me? Just pick up the phone and give me your money right now and I'll send you a link to a web page that proves that it's all possible. Before ending, the voice speeds up and we hear that this infomercial does not represent the University of Kansas, the taxpayers of Lawrence, or anyone else Fritzel may owe money to now or in the future.

gccs14r 1 year, 6 months ago

Seems like there should be legal recourse. Lawrence wouldn't be the first city to be investigated for malfeasance, but good luck getting the Brownback administration to do it.

Eride 1 year, 6 months ago

I am trying to make the math work in my head (obviously it does because the city commission is 100% supporting this, they wouldn't blatantly give a several million dollar handout to a private developer would they?). Here is my attempt:

Original Building Estimate: $18-20 million

Maximum Lawrence Cost for Entire Project: $25 million

Actual Building Bid: $10.5 million

Actual Lawrence Cost for Entire Project $23 million

Funny how that happens when the developer gets the infrastructure in a no-bid contract. The building is actually bid at almost half of the estimate and yet Lawrence ends up almost paying exactly what they would have if the building actually was worth what it was estimated. Does anyone want to hazard a guess what Lawrence would have paid had this building been built on the existing city-owned land that already had most of the infrastructure in place? $12-15 million for a roughly $10.5 million building sounds a lot better than almost $23 million.

Nothing shady going on here... I used to think this might be either incompetence or outright graft. I think at this point it is obvious that this entire process is corrupt and equates to outright theft of millions of dollars of taxpayer funds. Keep this in mind next time you decide not to vote for the city commission elections... this is what you get.

Eride 1 year, 6 months ago

I should probably update this since I just scanned the LJWorld's updated article and noticed that the article clearly states now that the final amount is actually roughly the $25 million limit. It only costs the city around $23 million because Bill Self is donating $2 million.

So in actuality, even though the building was bid for roughly half of the estimated cost... the developer still maxed out the city's $25 million limit with the no-bid infrastructure cost. Who knows how many millions of dollars the city could have saved building this on city land with all pieces properly bid-out. The city is paying around $15 million in infrastructure costs (adding in the Self donation) for a roughly $10 million building... ridiculous!

They aren't even trying to hide how corrupt this is, that more than anything is what is truly sad.

jack22 1 year, 6 months ago

I really need to have a talk with these guys on our city commission. You see, I'd like to donate a ton of money to the city, too. I have this cousin who's the Prince of a small African nation no one's probably ever heard of. He's going to give me twenty million dollars if I can get him out of jail. I just need the city to give me a couple hundred thousand dollars to get him out of jail, then I can get the twenty million. Once I have the money, I'll pay back what was lent to me and donate a couple million to the city for helping me out. Does anyone know the name and phone number of who I need to talk to? No, really, this isn't a scam, I'm serious, Fritzel is a good friend of mine.

gccs14r 1 year, 6 months ago

Look between your cheeks, like the rest of us who thought this was a bad deal and now have an unpleasant "fullness" where we would rather not.

Mike Myers 1 year, 6 months ago

So, if you add this no-bid 3 million to Fritzel's low bid on the building, would Fritzel still be the low bidder? If I was one of the other bidders on the building I'd be pretty mad about this. That is really unfair and probably illegal.

"all nine companies that submitted bids for the project bid the construction between $10.5 million and $13.5 million. The Fritzel firm was the low bidder by about $280,000.". Brilliant!

jafs 1 year, 6 months ago

Except that it's a scam.

He bid a little low on the first project, and made it up many times over on the infrastructure - that's what Toto is saying.

Other firms that didn't get to bid on infrastructure didn't have that option available to them.

Richard Heckler 1 year, 6 months ago

Local government mismanagement has become monster disease. Sprawl Cost Us All aka tax increases that come in quietly as a result of new projects. http://www.sierraclub.org/sprawl/report00/intro.asp

It's how tax dollars are spent and if how they are spent does it increase taxes? It's a lot about how taxpayers are left out of very large tax dollar spending decisions at all levels of local government.

For instance the $100 million dollar sewage plant should be approved by the voters because local special interests are driving the issue for their own personal profiteering. Do taxpayers want to spend $100,000,000(million) that will only bring on more new tax dollar expenses?

There are consequence of helter skelter aimless spending, aimless growth and over saturation of the markets that usually goes unmentioned by the local media. Local profiteers are draining OUR pocketbooks and raising OUR taxes.

NOT necessary city growth is the result of over several decades of subsidies paid for by the local taxpayer. These range from the obvious to the obscure and include big projects-like the billions we spend on new roads as well as smaller ones-like the tax-breaks that encourage businesses to move to the edge of town and KILL downtowns.

We've subsidized local profiteers at such a basic level for so long, that many people believe the status quo is actually fair and neutral. This is false-what we think of as a level playing field is tilted steeply in favor of local profiteers driving development.

How we subsidize profiteers:

  • building new and wider roads
  • building schools on the fringe
  • extending sewer and water lines to not necessary development
  • extending emergency services to the fringe
  • direct pay-outs to developers - for example developers of the new building at 9th and New Hampshire have taxpayers furnishing their tenants with parking spaces built with our tax dollars. Plus a few million in tax dolar assistance.
  • next up two more 9th and New Hampshire structures looking at more and quite healthy multi-million tax $$$$ “donations if you will” http://www.sierraclub.org/sprawl/report00/intro.asp

Richard Heckler 1 year, 6 months ago

"Free Lunch: How Local Wealthiest Americans Enrich Themselves at Local Government Expense (And Stick You with the Bill)." David Cay Johnston reveals how local government subsidies and new regulations have quietly funneled money from the local poor and the local middle class to the rich politically connected.

David Cay Johnston http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

Bill Moyers http://www.pbs.org/moyers/journal/01182008/transcript.html

http://www.sierraclub.org/sprawl/report00/intro.asp

randomthoughts 1 year, 6 months ago

Too bad the city didn't allow the facility to be built on the other side of K10 where it would have been much cheaper to the tax payers...

Richard Heckler 1 year, 6 months ago

The commissioners and such received such a suggestion...... more than once. Take notice residential and more retail projects are on the table as we speak as a result of this questionable project. As predicted.

Just think the money spent on this project would provide thousands of taxpayers with new and/or rehabilitated sidewalks.... an estimated 100 miles. Or approximately 250 miles of safe shared use cycling/pedestrian pathways. Both of which increase the value of residential properties. Yes for thousands of taxpayers. And would make becoming healthy and staying healthy a bit more convenient.

grammaddy 1 year, 6 months ago

Fritzel is involved and nobody can get a handle on the numbers. Who is surprised? Certainly not I.

Tammy Copp-Barta 1 year, 6 months ago

And he and Hugh Carter went to school together and were friends .. hhmm ...

Chad Lawhorn 1 year, 6 months ago

The 4-1 vote was with Amyx in the negative. He simply said he continued to have concerns about the process. Thanks, Chad

spiderd 1 year, 6 months ago

This graph depicts what we were told we were getting, straight from the city website. Can we please get this updated now?

MichaelARost 1 year, 6 months ago

Anybody else feel a little like Snowball from Animal Farm? The facts keep changing, the story gets worse and nobody seems to really care.

This project is a good example of what happens when city government stops looking out for the interests of taxpayers.

Richard Heckler 1 year, 6 months ago

"Those folks out west don't know how run down Lawrence is."

Truer words were never spoken......

optimist 1 year, 6 months ago

"Mayor Mike Dever defended the timing, saying city officials were privy to the estimates for several days earlier and had adequate time to review them."

“As for the public, that is a question that is up to each individual to decide whether there was adequate time,” Dever said. “There was time for an expert assessment of the costs.”

Is he kidding us? He clearly has no interest in the public’s input on this project. While I'm sure the city "experts" had enough time to review it, we the loyal “subjects” did not have time to review and make comment if we so chose. Thanks should go to Bill Self and his foundation for recognizing this and stepping up but shame on the so called "city leaders" for ignoring how something like this might effect support for the project. On the other hand maybe they didn't ignore the publics concerns but rather took that into consideration before ramming it through. I'm not impressed at all with the government we've got here.

This coming from a generally pro development voter.

smileydog 1 year, 6 months ago

Is Lawrence run by a bunch of corrupt people, or does it just appear this way ALL the time?

Beth Ennis 1 year, 6 months ago

I will not vote for a any commisioner other than Mike A. to be re-elected. He isn't even a sure bet for me. I hope someone sues the city on behalf of all of us taxpayers on this. This whole deal stinks to high heaven.

Richard Heckler 1 year, 6 months ago

I believe the Thomas Fritzel group were underway with new infrastructure development before this latest vote.

The question is who gave the nod to begin before knowing the cost and before receiving approval?

Richard Heckler 1 year, 6 months ago

It certainly appears as though for any type of new construction project large or small citizens might do well seeking bids and plans from abroad = KCMO/Topeka Metro and surrounding communities.

Lawrence has been loyal to locals for many years in an effort to keep money in Lawrence. At what expense to ourselves? Watching the bids come in at City Hall on this project certainly got my attention. This latest activity got my attention again.

LeBo 1 year, 6 months ago

Mr. Fritzel is a businessman. His job is to make money. Public governance to serve the people. The City 'leadership' is to blame. Time to clean house.

blindrabbit 1 year, 6 months ago

The City Commission ought to realize that "In the Hogtrough of Life all Pigs Get Some Slop".

he_who_knows_all 1 year, 6 months ago

A few questions...

Will there be a cell tower placed on top of the rec center?

Will there be artificial grass used as landscaping at this location?

Were there any historical structures torn down and removed before the site work was started?

Thank you.

countryguyks 1 year, 6 months ago

You know this whole project is so UnReal and so crooked it stinks to Hi Heaven !

Tom Fritzel is a crook, as well as the Lawrence City Commissier that have alllowed this to go on !

Fritzel was allowed to start the project before the Bid's were even submitted ! He was given the go ahead from the city without evening giving a bid! This is BS !

As far as I"m concernd there should be a Federal Investagion into Fritzel and the Lawrence City Commissioners ! There is money going under the table or Fritzel is Blackmailing them !

I'm seen Hog Lots that don't stink as bad as this whole deal Is !

Its time for a outside Agency to sift thru this whole mess ! And while there in town they need to check into the City Commissiners, and Doug Compton too !

I'm sure the Journal World will delete this to protect their rich blue bud Buddies but I won't stop as this is time to clean all this mess up !!

Prairielander 1 year, 6 months ago

I think the voters do care, as shown in the last elecation, about getting this facility built.

bidrigging101 1 year, 6 months ago

Check out this link to minutes from a Junction City commission meeting when they discussed sending a letter to the City of Lawrence about Thomas Fritzel and the trouble he caused them.

http://www.junctioncity-ks.gov/docview.aspx?doctype=minute&docid=1027

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