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City prepares to sign development agreement for Rock Chalk Park recreation center as questions continue

March 1, 2013

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The idea of a $25 million recreation center in northwest Lawrence is about to begin to meet up with the city’s checkbook — even as new questions are arising about how the adjacent Kansas University athletics complex will be managed.

At their weekly meeting Tuesday night, city commissioners are set to give final approval to a development agreement that will commit the city to going out to bid for the 181,000-square-foot recreation center near the northeast corner of Sixth Street and the South Lawrence Trafficway. The agreement also will commit Lawrence to pay at least $2.3 million in fees and incentives even if the city ultimately decides not to build the center.

But the key vote comes at a time when recently-released agreements between Kansas Athletics and Thomas Fritzel’s Bliss Sports shed new light on how much the Rock Chalk Park sports village will be used by KU versus by Fritzel’s for-profit Bliss Sports.

One outstanding issue is the question of how much Rock Chalk Park is envisioned to be used for private events.

“I think you will have to ask (Fritzel) that,” Jim Marchiony, an associate athletic director for Kansas Athletics said. “There is no way we can speak for him.” Marchiony said the balance between KU and private events is the subject of “ongoing discussion” between university officials and Fritzel.

Fritzel declined to comment Friday.

City commissioners on Feb. 19 got their first glimpse at the operating agreements between Bliss Sports and the KU entities. The city at that time gave preliminary approval to a separate development agreement for the city-owned recreation center. But commissioners delayed giving final approval to the agreement for one week in order to give the public more time to review the agreements between Bliss and Kansas Athletics.

Fritzel’s Bliss Sports will own the KU-oriented facilities — including track and field, soccer and softball stadiums — for 50 years, and lease them back to Kansas Athletics.

The arrangement previously has been described by Fritzel as a philanthropic gesture to provide financing for a KU project. But operating agreements between KU Athletics and Bliss indicate Bliss’ role will be larger than that in the Rock Chalk Park project. The agreements give Bliss the authority to use any of the stadiums or other KU-related facilities rent-free for any event that Bliss organizes.

Previously, Fritzel had indicated that Kansas Athletics would have veto authority over any outside event at the facilities. Marchiony said that is still how Kansas Athletics and the other parties view the agreement. Wording in the agreement, however, seems to place limitations on when Kansas Athletics can object to an event organized by Bliss.

In addition to the rental issues, the operating agreement gives Bliss the exclusive rights to operate concessions at Rock Chalk Park for both KU events and outside events. Bliss also is given significant rights to manage and charge for parking at the property.

The amount of involvement Bliss has in the operations of the KU portion of Rock Chalk Park runs contrary to how Fritzel described the agreements prior to them being released. In a Jan. 18 interview with the Journal-World, Fritzel said he wouldn’t be in a position to profit from the project and said the project would be “run just like Allen Fieldhouse, 100 percent like Allen Fieldhouse. The important thing is Kansas Athletics controls everything.”

Despite the lack of clarity over the control of the KU portion of the facility, Schumm said he still envisions the city on Tuesday signing the development agreement that commits the city to going out to bid and paying certain development costs on the recreation center.

Schumm said the agreements between Bliss and KU shouldn’t overly concern the city because the city’s recreation center will not be covered by those operating agreements.

“It is a matter of how you slice and dice this thing, but I still go back to the point that we entered into this with the idea of helping KU out to relocate their facilities,” Schumm said. “The agreements they make with who else is helping them is their own business.”

But because the city’s recreation center will be adjacent to the KU facilities — and they will share infrastructure, entrances and parking — the operating agreements between Bliss and KU do have some impact on the city’s recreation center.

For example, the agreements between Bliss and KU gives Bliss the ability to charge for parking in a large lot that is to be shared by KU and the city’s recreation center. City officials have said they will insist upon a separate agreement that gives the city the authority to veto any parking charges in the lot, which the city will help pay for.

But as of Friday, that agreement has not yet surfaced. It was unclear whether it would be ready for approval prior to the city signing the master development agreement on Tuesday.

If city commissioners approve the master agreement on Tuesday, the city will be obligated to pay about $2.3 million in costs whether a bid is ever accepted on the recreation center project. Those costs include:

• $925,000 in architecture fees

• $400,000 for excavation work that Bliss will undertake to make a five-acre site ready for the recreation center building

• $902,000 in rebated building permit fees and special assessments that the project otherwise would be required to pay to the city

• $100,000 to pay for work rendered by a third-party architect that serves as a quality control manager of the project.

The development agreement also requires the city to “negotiate in good faith” an amount of money the city would contribute to Rock Chalk Park, even if the city’s recreation center doesn’t end up locating in the development.

In addition to those direct costs, the city also is being asked to approve $40 million in industrial revenue bonds for the project. Those bonds will allow the KU portion of the development to receive a 10-year property tax abatement and a sales tax exemption on construction materials. The incentive is valued at about $17 million over 10 years. The city’s Public Incentives Review Committee will meet at 4 p.m. on Tuesday to make a recommendation on the incentives request.

City Commissioner Mike Amyx, who has indicated his opposition to the project in the past, said he thinks there are still too many blanks left unfilled in the agreement for it to be finalized.

“If it is not all 100 percent written down yet, I don’t know how you can proceed with it,” Amyx said.

If commissioners do sign the agreement and proceed with building the recreation center, it will have its costs for the building and infrastructure capped at $25 million. The city has estimated the improvements will have a market value of about $31 million.

The city expects to go out for bid on the project in late March, but bids would not be approved until April, which will be after a new City Commission is sworn into office.

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

Comments

Eileen Jones 1 year, 9 months ago

The citizens have had no chance at all to weigh in on this. When the last commission was elected the project did not exist.

Why the hurry?

It would be fair to the citizens to wait until the new commission is in place before committing the city to giving $2.3 million that will be lost even if the project gets scrapped.

$2.3 million dollars owed before the details are even finalized. That is just bad management of taxpayer money.

COjayrocks 1 year, 9 months ago

In simplest terms, the deal between KUEA and Bliss is only relevant to the city for rezoning issues (which are resolved) along with any subsequent infrastructure costs. As it turns out, the "infrastructure costs" have been labeled that way innaccurately by this project's opposition as laid out by Chad in the itemized list of which none are general "infrastructure costs".

The $2.3M fee that the city must pay if they don't build the rec center on this site are all costs that the city has already committed to, not additions or any fee trying to be squeezed out of the city by KUEA or Bliss. There is NO REASON ANYONE needs to see the agreement between Bliss and KUAE, especially Amyx. If everyone is mad about the committed money be mad at our City Commissioners, not Bliss or KUEA.

just_another_bozo_on_this_bus 1 year, 9 months ago

I encourage you to sign the petition, COjayrocks, so that you can have the opportunity to express your opinion on this project with your vote in a city-wide referendum. (and give the rest of the residents of this city the same right to express their opinions.)

https://www.change.org/petitions/city-commission-city-of-lawrence-public-vote-on-the-public-financing-of-the-regional-rec-center

just_another_bozo_on_this_bus 1 year, 9 months ago

So, you're saying that because there was a small turnout in this last election, that voters should be punished by eliminating their right to voice their opinion. That's really special.

jhawkinsf 1 year, 9 months ago

I'm not necessarily opposed to having a vote. I even signed the petition you've put up in this forum. That was before this week's 8.6% turnout. I'm always optimistic that future votes will bring out large numbers that would then be truly representative, in my opinion. However, when faced with the reality of incredibly small turnouts, I'm forced to conclude that the results of such are meaningless. I said prior to this week's election that if the result was less than 10%, the results would be meaningless. That doesn't mean I think the election should be held invalid. But there is no mandate either. It is what it is, a very small number that may or may not be representative of the wishes of the larger community. What you're arguing for is another election that also may or may not be representative of the wishes of the community.

Tell me you expect a large turnout and I would support your position and respect the wishes of the voters. Tell me less than a third of the electorate will even show up, and I'll continue to say the results should be looked at with great skepticism.

just_another_bozo_on_this_bus 1 year, 9 months ago

Even an 8.6% turnout is still many, many more times the number of people examining this project than just five, and certainly no worse a representation of the will of the greater majority.

Abdu Omar 1 year, 9 months ago

No! THis whole thing is not supported by the people of Lawrence which means that they will not attend any activities and not support this project at all. Before signing anything, the city should put this up to a vote and see if the community supports you and if they do, go for it. If not, Stop and obey your constituents.

msezdsit 1 year, 9 months ago

As far as the city is concerned, there are only a very few people who need to be involved in the voting process and they have all been accounted for.

repaste 1 year, 9 months ago

"The building will not generate revenue to the city in any way" Indeed, it will cost the city a half million or so per year to operate.

Katara 1 year, 9 months ago

“It is a matter of how you slice and dice this thing, but I still go back to the point that we entered into this with the idea of helping KU out to relocate their facilities,” Schumm said. “The agreements they make with who else is helping them is their own business.”


Ummm...no, it is not their own business. If the city is going to enter into any agreement, they should know who else is involved and what the terms are.

COjayrocks 1 year, 9 months ago

What agreement has the city entered into regarding the Rec Center? No one but the city is involved with the Rec Center.

In fact, the city is getting a DEAL on the Rec Center, but everyone is confusing their desire to not build a $25M Rec Center with the fact that they are getting "fleeced". You may not like the pricetag, but the product is worth WAY MORE than $25M.

Katara 1 year, 9 months ago

"But because the city’s recreation center will be adjacent to the KU facilities — and they will share infrastructure, entrances and parkingthe operating agreements between Bliss and KU do have some impact on the city’s recreation center."

I want a rec center and I don't have a problem with the $25 million price tag overall. I do have a problem on how this is being handled and how we are finding out that this is not how it was presented to us. The whole thing is shady and I believe the city (us) will end up paying a lot more than the $25 million.

Eileen Jones 1 year, 9 months ago

It is also going to COST the taxpayers of this city FOREVER. Beyond the taxes approved almost 20 years ago. Why don't the taxpayers get to vote on that?

This project didn't exist the last time we elected city commissioners. There was never a way for the public fo weigh in on this, not even by choosing a commissioner.

The whole thing just stinks.

LadyJ 1 year, 9 months ago

Makes you wonder why certain commissioners insist on going ahead knowing the opposition. If I voice my thoughts, I'm sure they will be disappearded. I don't know about anybody else, but the city and school district will have a hard time getting me to vote for any future projects.

Prairielander 1 year, 9 months ago

I've attended some of the Commission meetings and everyone that has looked at the project, including Commissioner Amyx, has agreed that there is a need for the Rec Center. They've been saying that for more than a year. If these Commissions believe that we can get a $31M facility for $25M, I say BUILD IT! The benefits of the synergy with KU and the other amenities of the Rock Chalk Park are just icing on the cake.

Bob Forer 1 year, 9 months ago

There is no such thing as a free lunch. If we are getting a $31 mil center for only $25 mil, then somebody is ponying up $6 mil. Fritzel? If you believe that nonesense that I got a few bridges to sell ya.

Mark Currie 1 year, 9 months ago

My feelings exactly. Kind of like the City knows it is about to get screwed and does not care. I sure wish it was put up for a vote. I don't like these bend over and be prepared deals. Esp. with Fritzel.

kernal 1 year, 9 months ago

Since the commenting regulars seem to be the only ones voicing their opinions against this, I can't help but wonder what the rest of Lawrence thinks. Guess we'll find out eventually, whether this project bombs or succeeds. If it bombs, those who kept silent will only have themselves to blame. If it succeeds, then good for Lawrence.

Eileen Jones 1 year, 9 months ago

The turnout in the primaries was around 8% of registered voters.

Most people aren't paying attention. Probably don't even know about it. And I think the CC is counting on this.

It always up to a few.

just_another_bozo_on_this_bus 1 year, 9 months ago

So, basically, for the next 50 years, Rock Chalk Park is a private entertainment complex under the complete control of Fritzel/Bliss, with a usage agreement with one primary client, KUEA, but Fritzel/Bliss will be able to use it for whatever they want, whenever they want, at their sole discretion.

So much for philanthropy.

ldvander 1 year, 9 months ago

I look at two very important facts regarding the common laborer. Many framers, carpenters, HVAC guys...have made a living in Lawrence based on the building major contractors like the Fritzels engage in. If you've ever been to a KU sporting event you will see privately owned Kettle Korn, Cotton Candy, Burrito, BBQ stands that sell out of their product each game. Crowd control workers, internal and external security personnel, temp employees... When news channels address the state of the economy what is usually mentioned first is if Building and new construction is up. This new construction, across America, puts people to work and has the potential to sustain future employment. I support this and lots more new construction around Lawrence regardless of which parties are involved. If this rec center is open to the public and NCAA events, that just seems like a bonus.

del888 1 year, 9 months ago

I understand your comment. The problem here is that there will be no other workers who benefit from this project (except maybe subcontractors during construction). The consessions that you mention will all be owned by Fritzel. All of the control (crowd, security, etc) will all be owned by Fritzel. Until the city lets outside parties get involved, there is no employment opportunity for Lawrence residents here.

Joe Hyde 1 year, 9 months ago

Bait and switch. Bait and switch. New revelations of undocumented, backroom handshake agreements coming to light weekly, sometimes daily. Revelations we learn of at the 11th hour, such as Kansas Athletics and KU Endowment are supposedly the owners of their half of the project...except that Bliss Sports (Fritzel) will hold full operational control in terms of booking events, charging parking fees and selling concessions, plus nearly a $1 million tax rebate.

This project looks to be the most spectacular screwing the city of Lawrence has ever gotten bent over to receive. I wish our city commission would stand up, move to the nearest wall and press their backs firmly against it. Best protection there is against this sort of assault.

jafs 1 year, 9 months ago

Why push this through now, when the next commission will decide whether or not to proceed with it?

This way, we're on the hook for $2.3 million even if the next commission doesn't go ahead with it. That doesn't make much sense to me.

Also, I thought the idea of this was to benefit the city, not to "help KU relocate their facilities" as Schumm says.

just_another_bozo_on_this_bus 1 year, 9 months ago

"Why push this through now, when the next commission will decide whether or not to proceed with it?"

Because the current commission has already made up their minds on this, and they are afraid that the new commission (and/or citizens in a city-wide referendum) might have a different idea about how good an idea this is.

jhawkinsf 1 year, 9 months ago

Re: "city-wide referendum" You mean the 16% of eligible voters who showed up at the last city commission election? Or the whopping 8.6% that showed up to vote last week?

For me anyway, the phrase "city-wide referendum" conjures up an image of a vast majority voting. If history is any indication, that's not what will happen. What will happen is a very, very small minority winning over some even smaller minority, whichever way the vote goes. I'm not sure that will really tell us anything at all.

just_another_bozo_on_this_bus 1 year, 9 months ago

But the turnouts in the elections that elected this commission weren't any better. So, what's your solution-- just dissolve city government?

jhawkinsf 1 year, 9 months ago

No, we don't dissolve city government. Nor do we make calls for a city-wide referendum that are suggestive that doing so will give a more true indication of the wishes of the people when what we're really talking about is a very small minority getting a couple of more votes than some even smaller minority. That's no more representative than having elected officials decide.

Neither is a good result, given low voter turnout. We could have those in favor and those against meet in South Park and yell at each other, with the group that yells the loudest be declared the winner. That result would be equally valid as your city-wide referendum.

msezdsit 1 year, 9 months ago

The referendum seems to be that if people don't turn out and vote then you might get stuck with a special interest group as a city commission in which case you get stuck with special interest groups projects being rammed through at the expense of those who were to busy to vote. Oh, I guess this formula was figured out a long time ago.

just_another_bozo_on_this_bus 1 year, 9 months ago

"That's no more representative than having elected officials decide."

That's ridiculous, especially given that the mandate (as judged by voter turnout) that the elected officials have isn't any stronger than a referendum would have.

But a referendum would be much more specific in its outcome than any city commission election would (which is precisely why referendums exist.) City commission elections are decided first by name recognition (i.e., money) and after that, a bunch of platitudinous pronouncements that don't really inform voters very well about how they would vote on any single issue.

A referendum would require the city, and any commissioners in favor, to make the case for this project transparently and in detail-- something that's been sorely lacking on this very major project that we'll all be paying for with every purchase we make for the next 20 years.

jafs 1 year, 9 months ago

Right.

But then we're stuck with $2.3 million in costs for nothing at all.

just_another_bozo_on_this_bus 1 year, 9 months ago

I think that's the whole idea. They aren't ready to sign off on the project as a whole, so they're creating new facts on the ground-- Oh, we have to go ahead with this, because we're already committed to the tune of $2.3 million.

Eileen Jones 1 year, 9 months ago

I hate to accuse people of things without proofs, but I have to ask: what are these commissioners getting that makes them want to ram this through with so much opposition from the citizens and so many questions unanswered? Why won't they give this some time and do it right?

msezdsit 1 year, 9 months ago

Fritzel declined to comment Friday.

What is left for him to say: Mission accomplished or Love those tax dollars.

Eileen Jones 1 year, 9 months ago

Should not there be some minimum standard of integrity and reliability for an individual that the city does business with using taxpayer money?

Fritzel left Junction City holding the bag for $3 million. If I conducted my personal business this way I could not get a loan, a business deal, a mortgage, anything!

msezdsit 1 year, 9 months ago

Compton had a 20 million dollar default with the city of topeka on his resume when the city sugar coated his building on 9th street downtown. The minimal level of integrity is solely based on whether or not the city commission sees something in it for them. Try to get them to do something for you if your just an average person in lawrence with a good idea that may greatly benefit Lawrence in general.

Eileen Jones 1 year, 9 months ago

This site is not working correctly. It is practically impossible to post.

Is that by design today?

mrkuwick 1 year, 9 months ago

Why push it through now? So we can get the track out of Memorial Stadium and upgrade the stadium to a Big XII level so that the next time there is talk of conference realignment we'll stand a better chance of not ending up in the Mountain West!

tecuani 1 year, 9 months ago

I supported this project before I knew where they planned on putting it. Having a "Recreation Center" so far out on the periphery is stupid, it needs to be in a more central location where more people can utilize it on a regular basis. As it stands now, the only benefit it has is to provide more locations for youth athletics games, something that does not require as many courts as are being requested.

A simpler fix would be to add one or two courts to the other rec centers that have the space. And add a smaller, two court rec center somewhere in NW Lawrence . East Lawrence could add two more courts easily, while Holcolm has enough room for one court.

Funding could then be arranged so that the city can upgrade the school gyms that are smaller. Then these schools could be used for games and practices two at a time. The schools benefit because they now have more space and modern gyms and the city can now double up in schools that could only work for one event at a time.

Also, why aren't the High Schools gymnasiums used for youth sports? Both Free State and LHS have two gyms that could be used on weekends for youth games.

waitjustaminute 1 year, 9 months ago

I hate to say it, but this has been a "done deal" from the get-go. And it's another, in a long, long line of "wants" projects that always trump "needs" projects. And if it's this bad, on a local level, times that by 100 for state projects, and times 1000 for federal projects. And then you can understand how screwed up spending is from sea to shining sea. And that's about all I have to say about that.

irvan moore 1 year, 9 months ago

please remember that this is the city commission that thinks mr. corliss is doing a great job, i miss wildgen, he lost his job because he looked out for the best interests of the city instead of rubberstamping whatever the commissioners wanted.

LadyJ 1 year, 9 months ago

Just curious, what happens if Bliss/Fritzel declares bankruptcy within the next 50 years? That is a long time so it is not impossible. Can other failed projects put a lein on this project? I wonder if Schumm is thinking it will be good for his bussiness with the expected tourist turnout. Probably planning to start a new bussiness nearby.

Curveball 1 year, 9 months ago

I have forgotten the guy's name who is on the board of directors of KUEA, but as I understand it, he has a financial interest in Bliss Sports along with Fritzel. Are there other KUEA board members who have private investments in this thing? I have always understood that the mission of KUEA was to make KU a better University, not enrich the board members.

Richard Heckler 1 year, 9 months ago

Another feature of this project is that no tournaments have been schedule therefore this project is based on assumptions. These assumptions are backed by our tax dollars and the known fact that if necessary more tax dollars are available whether taxpayers approve or not.

Nobody would approve a loan for such a risky project IF taxpayers were not the backers. For such a small town Lawrence has plenty of large risky projects gone bad. Yes taxpayers have in some part bailed out these projects.

Why do politicians love tax dollar money holes?

Richard Heckler 1 year, 9 months ago

If the city is truly concerned about the health of citizens the city could offer up a voucher for each live in property owner of interest for say $1500 to be used toward the purchase of exercise equipment.

This would cost taxpayers wayyyyyyy less money. Plus there would not be the ongoing expense of a rec center year after year after year.

A wild estimate would be $15,000,000 over time and would likely attract new people to Lawrence. This plan would absolutely demonstrate a genuine interest in the health of Lawrence citizens.

"Lawrence,Kansas the community of healthy homes courtesy of citizen tax dollars"

Of course not everybody in town will apply just as not everybody will use the high dollar rec center.

Richard Heckler 1 year, 9 months ago

Equity Issue

Here's another scenario that might come back to bite taxpayers in the butt. This one gets built. This does not do away with the equity issue no matter what.

The plan leaves North Lawrence and Southeast Lawrence without a rec center. Both have had a major influx of population and still growing.

WE taxpayers know this field house scenario will cost we taxpayers more than $31 million after all infrastructure is installed etc etc etc. Traffic Lights/water lines etc etc do get expensive.

Considering the total cost will be more than 31 million no matter how the picture is painted why not build a neighborhood rec center in NW Lawrence with 3 gyms, North Lawrence with two gyms, and Southeast Lawrence with 2 gyms ? This is surely going to come up. Spend an estimated $11 million on each each facility.

Schedule local athletic events accordingly.

Jumping in a car to drive across town is simply not practical thinking. 29 cents a gallon gasoline went bye bye some time ago. A ton of people in Lawrence do not bring home $60,000 or more in wages such that many of the most vocal promoters do and some are on our tax dollar payroll.

In fact it still seems to me this1994 sales tax money was to provide"neighborhood" centers and such not field houses.

The equity issue is on the table and not going away.

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