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.