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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

oneeye_wilbur 10 months, 3 weeks ago

Those involved will soon enough become members of The Has Been Club. And more wannabes will enter the stage!

1

bidrigging101 10 months, 3 weeks 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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toe 10 months, 3 weeks ago

It is corruption at its best. But, will the voters really care? My guess is their more worried about their government jobs and benefits to care. Give the votes some money and you shut them up, even when it is their own money to begin with. Self is a sly dog that has been "in" on this whole theft. But everyone loves him and he owns his home on formerly Fritzel land. Nope, this will blow over like all the crooked deals in this crooked little town.

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countryguyks 10 months, 3 weeks 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 !!

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he_who_knows_all 10 months, 3 weeks 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.

1

blindrabbit 10 months, 3 weeks ago

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

1

LeBo 10 months, 3 weeks 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.

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puddleglum 10 months, 3 weeks ago

what a great deal! (for fritzel)

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Richard Heckler 10 months, 3 weeks 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.

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Richard Heckler 10 months, 3 weeks 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?

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Beth Ennis 10 months, 3 weeks 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.

1

smileydog 10 months, 3 weeks ago

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

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optimist 10 months, 3 weeks 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.

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oneeye_wilbur 10 months, 3 weeks ago

If Amyx's concerns are truly valid, why the does not even one commissioner side with him? I do not believe that any of the commissioners are on board with this, including Amyx's objections. It just looks good.

Will Amyx vote NO to the city giving the commissioners health insurance? Will Amyx vote NO to a pay raise?

Would Amyx bring forth and and implement to upgrade ALL infras tructure in the Hood? That being all of Lawrence east of Kasold. Those folks out west don't know how run down Lawrence is.

1

MichaelARost 10 months, 3 weeks 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.

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toe 10 months, 3 weeks ago

Looks like Self is learning to game taxpayers, too. He should be a natural.

1

spiderd 10 months, 3 weeks ago

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

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cheeseburger 10 months, 3 weeks ago

Chad didn't mention who the dissenting vote was, but I'm assuming it was Mike Amyx.

I think Mike's reservations about the way this project is being handled are very valid.

And whose idea was it to release the report only hours before the vote? Dever seems comfortable that the 'experts' (haha) had it earlier. Are these the same experts that forgot a half-mil in landscaping costs?

This whole thing stinks to high heaven. The arrogance and non-transparency of all involved is appalling.

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Steven Gaudreau 10 months, 3 weeks ago

"A foole & his money, be soone at debate: which after with sorow, repents him to late. - Thomas Tusser

Unfortunately, our leaders are the fools and the money was ours.

4

grammaddy 10 months, 3 weeks ago

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

3

randomthoughts 10 months, 3 weeks 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...

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Richard Heckler 10 months, 3 weeks 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

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Richard Heckler 10 months, 3 weeks 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
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Mike Myers 10 months, 3 weeks 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!

3

MacHeath 10 months, 3 weeks ago

Schumm is always going to back Fritzel, because he doesn't want another swimming lesson.

0

MacHeath 10 months, 3 weeks ago

What is left of the middle-class will pay for it, KU and the wealthy will get the biggest benefit. Self will get a big tax right-off. I doubt that most folks will ever see the inside of the thing, or see any benefit from it being built. Its kind of like KU basketball, except without TV coverage.

0

jack22 10 months, 3 weeks 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.

11

Eride 10 months, 3 weeks 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.

10

gccs14r 10 months, 3 weeks 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.

6

jack22 10 months, 3 weeks 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.

8

just_another_bozo_on_this_bus 10 months, 3 weeks 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.

5

bidrigging101 10 months, 3 weeks 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?

4

Curveball 10 months, 3 weeks 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.

3

frankfussman 10 months, 3 weeks 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.

3

BringBackMark 10 months, 3 weeks 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!

4

joes_donuts 10 months, 3 weeks 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.

6

KEITHMILES05 10 months, 3 weeks 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.

0

Steven Gaudreau 10 months, 3 weeks ago

I'm really confused. I thought the original deal was we were paying $18m for a $25m project. Then the actual cost was cut in half. Then the unbid portion increased $3m, shocker, and now we are paying $22.5m? What did I miss? Glad our leaders are digging in their heels and taking such a strong stand that $22.5m is IT! What a bunch of buffoons. Stick it to em Thomas.

1

Keith Richards 10 months, 3 weeks ago

Bid the rec center and it comes in nearly 50% UNDER projections.

No bid the infrastructure and it comes in nearly 35% ABOVE projections.

Only a moron thought this would turn out differently.

15

Crazy_Larry 10 months, 3 weeks 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.

2

oneeye_wilbur 10 months, 3 weeks ago

Where is the "gift" the community was promised?

ALL five commissioners now and before have known all along what has been going on. Anyone who believes differently is extremely naive!

Lawrence has no Robin Hood, but rather thrives on Robbing the Hood , and the Hood is everything east of Kasold to Eudora.

Dolph, you wonder what is amiss?

3

Mike Myers 10 months, 3 weeks ago

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

10

mikekt 10 months, 3 weeks ago

Who is the independent auditor of this whole mess ?

Last time that I heard, the city auditor was busy looking into wether or not fluoridated water was or wasn't bad for people's health ?

Was he sent on this adventure to keep him too busy to look in on this whole mess ?

Why else would you sent an auditor, who is not as far as I know, an MD or DDS, out to study the effects of fluoridation of drinking water, on humans, unless it would be helpful to keep his nose out of any and all real city business ?

This all comes with the perception that the situation is being manipulated by some or that the City Commission lacks proper oversight and is way too friendly and trusting towards the site developer, when it comes down to costs .

3

LJ Whirled 10 months, 3 weeks ago

The "no-bid" contract came in high?

Shocked.

Totally shocked.

Sheesh! Some City "Leaders" have trouble ascending the learning curve.

13

jane_doe 10 months, 3 weeks ago

So construction estimates were way off. Infrastructure costs are way off. Obviously this is a sign that there is some bad planning, poor communication and ingrained issues here. This doesn't bode well for the actual running of the rec center. I'm getting less and less impressed every day.

10

cheeseburger 10 months, 3 weeks ago

How does someone fail to account for a half-mil of landscaping costs?

Sure exudes confidence and professionalism.

I supported this project initially, but enough is enough. The BS and surprises just keep coming.

8

TalkSense 10 months, 3 weeks 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.

23

spiderd 10 months, 3 weeks 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.

8

EJ Mulligan 10 months, 3 weeks ago

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

22

cheeseburger 10 months, 3 weeks 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.

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