Archive for Monday, May 13, 2013

As city prepares to bid recreation center, officials still waiting to receive cost numbers from Fritzel on infrastructure

May 13, 2013


The companies that make a living building roads, burying sewers and paving parking lots have been hungry for work in recent weeks, in some cases bidding infrastructure projects for less than half what city officials had expected.

But when it comes to Lawrence’s new $25 million recreation center, city officials won’t find out how hungry. The city is set to receive bids for the building portion — the actual walls, roof and other such pieces of a structure — for the center on Wednesday. But the millions of dollars worth of roads, sewers, waterlines and parking lots for the project aren’t being bid.

Instead, a firm led by Lawrence developer Thomas Fritzel is building those pieces of the project through a no-bid arrangement with Kansas University entities and the city.

But the Journal-World has confirmed that even though Fritzel’s firm has begun work on the site, he hasn’t yet provided the city with a firm quote on how much it will cost the city to build the infrastructure.

City officials, though, are still scheduled to go forward with Wednesday’s bid opening, which is expected to produce bids in the $18 million to $20 million range. But it won’t be without some trepidation.

“I think it is imperative that we have these infrastructure costs in hand before we move forward,” said City Commissioner Mike Amyx, who previously has voted against moving forward with the project. “My big concern in all of this has been the process in which it has been handled, and this adds to that concern.”

No numbers to share

City commissioners agreed to the no-bid process for the infrastructure in February. At the time, a majority of commissioners said they believed allowing Fritzel’s Bliss Sports to build the infrastructure would be the most efficient process.

That’s because Bliss already had been chosen by Kansas Athletics and the Kansas University Endowment Association to build the infrastructure for the adjacent Rock Chalk Park, which will include KU-related track, soccer and softball facilities that will be owned by Fritzel’s company and leased back to the university. One contractor building all the infrastructure would allow the project to benefit from economies of scale, city officials said.

But now questions have emerged about when the city will be able to determine just how much the infrastructure will cost. The Journal-World asked city officials last week whether Fritzel had provided the city with a quote on the expected infrastructure costs, now that work had begun on the site.

Mayor Mike Dever said Fritzel had not, but he assumed that was only because the city had not asked for it. On Thursday he said he would ask Fritzel for the necessary documents. Dever said he was confident such numbers had been prepared.

“I’m sure he already has pricing for that, I imagine,” Dever said. “I don’t think he would carry on with the project without having quotes. There is no way he would do that.”

But on Friday, Dever said Fritzel told him that there were no hard numbers to share with the city. According to Dever, Fritzel said that was in part because the city’s planning office had not yet approved all of the specifications for the site’s infrastructure. Without those approvals, Fritzel’s subcontractor cannot give him a firm quote on the construction costs.

Dever, on Friday, said that explanation seemed reasonable to him. Attempts to reach Fritzel for comment on this article were unsuccessful.

A matter of timing

The lack of those numbers puts the city in an interesting situation. The city has created a complex agreement with Fritzel and the KU entities that caps the total amount the city will pay for the recreation center and related infrastructure at $25 million. But the agreement also holds out the possibility that the city could pay less than $25 million, if construction work is completed for less than what architects and engineers have estimated.

So, here’s the situation: The city has indicated to Fritzel and the KU entities that it has $25 million to spend on the project. Week by week, the city has been learning what its costs for the project will be: $925,000 for architects' fees; $784,050 for the price of the 26-acre recreation center site.

Now, only two parts of the equation remain unknown: the price to construct the building and the price to construct the infrastructure. Only the price of the building is going through a bidding process, and that amount will be known on Wednesday.

Once the price of the building is known, simple math will show what the difference is between the city’s costs and the $25 million maximum price it is willing to pay.

City officials have stopped short of saying Fritzel will make sure the infrastructure price is large enough to ensure the city will spend all of its $25 million budget. In fact, some city officials privately have said it is inappropriate to suggest Fritzel would conduct business in that manner.

Amyx said he’s not saying Fritzel would do that either, but he said it is the city’s job to create processes that protect the public’s interests.

“I think we have to have that infrastructure number,” Amyx said. “It is an absolute.”

Low bids

At various times, city officials have argued this whole issue is likely to be moot. City officials believe the value of the recreation center building and its related infrastructure will have a market value of about $31 million, and the city only will pay $25 million. The difference would be covered by an in-kind donation from Fritzel and his company.

That still may be the case, but without a full bidding process, there have been questions about the true value of the project. Those questions have grown in recent weeks as the city has bid a series of infrastructure projects across the city that have come in below estimates in recent weeks. They include:

• Road and waterline work to convert the former Farmland Industries property into a business park came in at $4.9 million, compared with the $8.1 million estimated by engineers.

• Sewer line work for the Farmland project came in at $601,089 compared with a $1.4 million engineer’s estimate.

• Work to reconstruct a portion of Wakarusa Drive came in at $1 million compared with a $1.2 million estimate.

• Waterline work along Bob Billings Parkway came in at $1.6 million compared with a $2.1 million estimate.

The city has estimated infrastructure work for the entire recreation center site and the Rock Chalk Park project will total about $9.3 million. The city estimates the recreation center building will cost $19.9 million.

With the land costs and architecture fees added on, that brings the total to about $31 million. In order for the city to pay less than $25 million on the project, construction estimates for the project will need to be off by 20 percent or more. That has been the case with several of the infrastructure projects the city has bid recently.

Dever said he recognizes that fact.

“In light of the low bids we have received recently, I would like the community to know whether there are some potential savings here,” Dever said.

But Dever said he doesn’t regret the decision to allow the infrastructure to be built without going through the city’s normal bidding process. He said he still believes the economies of scale of having one infrastructure contractor will benefit the city.

Amyx said he wishes the city would have used its normal bidding process.

“I’ve had concerns all along,” Amyx said. “I wish we would have just put all the city portions of this project together and put them out there to bid and seen what we came up with.”

The city does have a process that allows it to review invoices submitted by Fritzel’s subcontractor after the work has been completed. Dever said the city will compare the unit prices used in those invoices with the unit prices of other infrastructure work completed in the city. But Dever conceded resolving any pricing dispute will be more difficult to do after the work already has been completed.

“But we are entitled to see his math,” Dever said. “If there is any question, we’re not just going to write a check.”


Richard Heckler 5 years, 1 month ago

Has Fritzel paid the $50,000 fine for violating site plans?

Thomas Christie 5 years, 1 month ago

WTH? What's wrong with city leaders? No one, no one in their right mind would buy a car or house without asking how much it costs first. Too bad Mike Amyx is the only one concerned.

Gene Ramp 5 years, 1 month ago

If Amyx and the anti-development crowd keep screwing w/ this, Lawrence is going to lose $Millions....but what's new?

Orwell 5 years, 1 month ago

Right. What the city should do is to give Thomas Fritzel whatever he says he wants. It's only the taxpayers' money, and why should the city be concerned about that?

Kendall Simmons 5 years, 1 month ago

I've never understood why anyone would advocate throwing good money after bad. Perhaps you could explain?

Catalano 5 years, 1 month ago

Ooooh...BOHICA. Haven't seen that in awhile.

irvan moore 5 years, 1 month ago

I think it's pretty reasonable to know what something costs before you sign off on it, I sure miss wildgen

Kate Rogge 5 years, 1 month ago

Graft and corruption masquerading as civic pride and prosperity.

Matthew Herbert 5 years, 1 month ago

well put. I might have to reuse that line at the dinner table tonight.

WilburM 5 years, 1 month ago

Honestly, this is just unbelievable, This entire project has been a shifting target and completely lacking in transparency. I'm glad Dever and others are so damned confident. I suppose ignorance is bliss. LJW: Keep digging!!!

Bob Forer 5 years, 1 month ago

"City officials have stopped short of saying Fritzel will make sure the infrastructure price is large enough to ensure the city will spend all of its $25 million budget. In fact, some city officials privately have said it is inappropriate to suggest Fritzel would conduct business in that manner."

The City of Lawrence is like the hapless fool who enters a bar featuring "exotic dancers." The cost of his night's worth of entertainment is invariably the amount of money he has in his pocket.

Hudson Luce 5 years, 1 month ago

I can see Fritzel bringing in this project for $15 million, and taking a $10 million profit off the top. He's got a blank check, with a notation on the bottom: "Up to but no more than $25 million", and there's no accountability process with the City Commission to stop it.

Bob Forer 5 years, 1 month ago

Kinda makes you wonder why certain city commissioners wanted to push it through so quickly. The only obvious beneficiary was Fritzel.

Something is very very stinky. Just sayin.

JayhawkFan1985 5 years, 1 month ago

Nobody has mentioned for a while that this site isn't served by transit. Since the public is investing so heavily in this public facility, it should be built in a location accessible by transit...

pizzapete 5 years, 1 month ago

I thought we were building it out in the middle of nowhere because Fritzel was donating the land, but I guess not, we're paying him nearly $800,000 for 26 acres. That's a lot of money for farm land that generally sells for less than $5,000 an acre.

pizzapete 5 years, 1 month ago

Did it already have the roads, sewer, electric, etc., in place and otherwise ready for development or was it farm land? The joke is that we're paying a premium price and we're also providing all the infrastructure to make the land more valuable. And we don't even know yet what our infrastructure costs are going to be??? This joke just isn't funny!

Currahee 5 years, 1 month ago

Here's what the city did. You're looking for a new car. You go into the dealer saying you want this car and you're not willing to spend over 25,000. You sign the papers and look online and realize people paid 15,000 for it. But you also remember that the paper said the dealer could charge whatever they wanted. Then you go, "well it only cost other people 15k, they wouldn't charge me 25k for the car, right?" Dealer says nothing.

blondejuan 5 years, 1 month ago

The commissions spend our money so carelessly on Rock Chalk Park while the planners run off Menards. A place I would actually like to spend my tax dollars to attract to Lawrence. Also Lowes, Olive Garden, distribution centers, etc etc etc

Patty Buchholz 5 years, 1 month ago

It is so very disappointing to see Mr. Dever and others continue to defend this process. I find it hard to believe that Mr. Fritzel does not have figures available. It will be easier for him to charge the total $25 million and not have to be accountable, sad thing is, the city will not make him accountable just as in the past. It honestly does make us wonder why the commission continues to let Fritzel run the city. It is frustrating as a taxpayer and citizen of Lawrence to see the commission and city officials feel like they do not have to be accountable to us. Wow! Accountablilty, doesn't seem to exist, especially on any projects Fritzel is involved in. Seems like in only applies to us small fries, shoveling sidewalks, jaywalking, garage sale signs, etc..

seenitall 5 years, 1 month ago

The biggeest surprises will be saved for the end. By the time this is all finished everyone will be in agreement about how badly the city (you and me) got screwed. This is wrong on so many different levels but lets hurry before anything else negative comes out and people come to their senses.

Matthew Herbert 5 years, 1 month ago

"City officials believe the value of the rec center is $31 million"

Yes, and if you check my property taxes, they also believe my house is worth $30k more than I paid or ever could sell it for. I don't CARE what the city thinks the rec center is worth versus what they will pay. If you're going to take taxpayers money without a vote, AT LEAST have the courtesy to be a careful caretaker of that money. No bid contracts by a city commission should be a criminal act.

Tomato 5 years, 1 month ago

Seriously. It's not like there's a big market for rec centers. It's not as if they're going to be able to sell it for $31 million dollars if they decide they don't like it. Who's going to buy it?

It's a bit like telling your kid that you think his art project is worth $31 million dollars when you put it on the fridge.

leftylucky 5 years, 1 month ago

Mr. Dever poster child for YOU CAN'T TEACH STUPID.

pizzapete 5 years, 1 month ago

I've never heard of or seen anything to compare this with. Heck, I didn't even think something like this would even be possible. But after the recent housing bubble, the banking crisis, and Bernie Madoff, I guess we should just hope for the best but be ready and open for anything. Maybe if we all cross our fingers and wish at the same time it'll all work out as planned, that is if we ever had a real plan in the first place.

just_another_bozo_on_this_bus 5 years, 1 month ago

I think these commissioners really believe that this project is a good deal for the city. But I think they are so enthralled with how "neat" it will be that they are in denial about how ugly and non-transparent the process is that birthed it. And they are incapable of accepting that the general public would like to have something more than Dever's word on this that it's a good deal for taxpayers.

Beth Ennis 5 years, 1 month ago

First off, the process of selecting the lowest bidder is absolutely the worst. I work for the federal government, and every building I have ever seen go up has had so many problems after occupancy; all because you have the lowest bidder building it. They bid low and then take all kinds of shortcuts to save money so they can still make a bundle. It's horrible. Building something w/o any kind of bid or limit to what it can cost is totally assinine. I will not vote to re-elect anyone who voted for this rec center. it is being built in the wealthiest part of town which will limit it's use to those who live out there for the most part, and if KU really needs it, let them use some of the money they get from sports to build it. This is the most ridiculous thing I have ever seen and I for one think all of the commissioners who voted for this need to go away at the next election.

patkindle 5 years, 1 month ago

I am sure a lot of Lawrence citizens feel the govt knows what is best for us and can make our decisions for us, after all we have the money, and they need it so just open your check books, it is all part of the grand plan, hope and change spread the wealth you know

average 5 years, 1 month ago

Are you paying the slightest bit of attention? It's the 'hope and change' annoying liberal gadflies who are raising the most stink about this and were the ones against it in the recent (too late) election. You surely don't think it's still a Boog-n-Rundle kinda commission running things, do you? Because, dopey as you may have considered them, they were smarter than this kind of razzle-dazzle.

Orwell 5 years, 1 month ago

This is the opposite of "spread the wealth." It's taking tax revenues from everyone and giving those revenues to a single beneficiary; that's called "concentrate the wealth," and it seems to be government's primary function.

bidrigging101 5 years, 1 month ago

Fritzel’s people are telling subcontractors they have the rec center job, First Managements people are telling subcontractors they already have the rec center job. So, who will it be Fritzel’s company or Compton’s company, or will it be a combination of the two per Dever's instructions.

It's a shame City's leaders chose to waste other contractor’s time putting together their bids, spending time and money going over plans and specifications for what they were told was a open bid, public project.

When It was rigged from the beginning.

LogicMan 5 years, 1 month ago

Normally, I too would be worried. But my hidden antenna tell me that the real reason for this project is to get the new running track finished ASAP so that the old track can be removed from, and the seating expanded in Memorial Stadium between the next two football seasons. For KU's conference affiliation of the future, and Lawrence's economy, this is a very important, past-due project.

bidrigging101 5 years, 1 month ago

LM, adjust your antenna... KU's problem with conference affiliation will not be solved by the taxpayers of Lawrence over paying for the infrastructure and rec center building at RCP.

All that does is make Thomas Fritzel more money on this project.

EJ Mulligan 5 years, 1 month ago

I hope that all those above complaining about Mayor Dever and the City Commission's approach to this insanity will take the time to e-mail Dever et al directly. The only way this Commission seems to pivot on issues is when there is a direct public outcry. Cut and paste your comments, and e-mail them. These commissioners need to hear that not everyone is in love with this process.

P.S. Is there any way to get the new City Commission to re-vote on the whole project...?

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