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Lawrence and Douglas County

Lawrence and Douglas county

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

May 13, 2013

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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.”

Comments

oneeye_wilbur 11 months, 1 week ago

The rec center smells much like zest Hills business park. Douglas county taxpayers paid $750 thousand for 300 acres. Taxpayers got no property tax relief with new buildings.

Public /private partnership never has revealed the private partners who have profited. Thank the JW for not inquiring.

Now 25 years later , lots selling for $70 thousand, which puts the value of the park at 21 million. Taxpayers get nothing. Taxpayers will get nothing from Rec Center.

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oneeye_wilbur 11 months, 1 week ago

Not much hope for Dever. Anyone who assigns two private parking spaces on aublic street that has parking on both sides, well. Not much hope.

And continued dirty downtown, that the taxpayers have subsidized heavily for years.

Even Amyx and S humm have businesses downtown and they don't get it either.

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EJ Mulligan 11 months, 1 week 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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LogicMan 11 months, 1 week 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.

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bidrigging101 11 months, 1 week 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.

3

patkindle 11 months, 1 week 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

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Beth Ennis 11 months, 1 week 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.

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Scut Farkus 11 months, 1 week ago

I am relatively new to the area (a few years) and I must admit, I've never seen anything as fiscally irresponsible like this before. Have your city commissioners always been this ignorant or is this a recent administration that just doesn't have a clue? I think the residents of Lawrence are getting the shaft on this one.

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he_who_knows_all 11 months, 1 week ago

25 million will buy a lot of fake grass.

3

leftylucky 11 months, 1 week ago

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

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Matthew Herbert 11 months, 1 week 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.

3

seenitall 11 months, 1 week 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.

6

Steven Gaudreau 11 months, 1 week ago

Dever said. “I don’t think he would carry on with the project without having quotes. There is no way he would do that.” Why would any builder not go ahead? EVERYONE but the city knows this project is going to actually cost less then $20m and the builder has an open check book from the city to spend $25m. The price tag is going to be $25m after bills are padded and kickbacks are paid. This is one of the most foolish transactions any city has ever conducted "investing" tax payer dollars. If a division of a company behaved this way, everyone in management would be fired.

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happyp 11 months, 1 week 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..

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blondejuan 11 months, 1 week 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

3

LJ Whirled 11 months, 1 week ago

Mayor McClueless! Dever seems to know NOTHING about thus scam, except what he "imagines".

4

Currahee 11 months, 1 week 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.

4

JayhawkFan1985 11 months, 1 week 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...

0

1yardstare 11 months, 1 week ago

Don't worry folks just because Fritzel hasn't kept his word on the last three or four projects he's been been involved they didn't really hurt us because it was with his private investors partners money. This time it's taxpayers money and he can afford to keep his word with the open check book thats controlled by Dever, Schumm, Corliss and KUED/Zenger. He can't lose when the taxpayers paying for 100% of the infrastructure needed for his entire project, plus management fees, reimbursement of all development fees, refunded permit fees, refunded connection fees, 100% real estate tax abatement, and sale tax exemption on all materials. The City has a responsibility to the taxpayers to manage their funds wisely, apparently they have forgotten that simple fact. I'd say City leaders and KU Athletics have made the worst business deal for themselves in the history of both entities while helping a private for profit developer make the most lucrative deal of his life.

0

oneeye_wilbur 11 months, 1 week ago

All FIVE commissioners are pushing this through! Do not think for one moment that they are not in unison!

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Hudson Luce 11 months, 1 week 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.

10

Bob Forer 11 months, 1 week 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.

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1yardstare 11 months, 1 week ago

Don't worry folks Fritzel has only not kept his word on the last three or four projects he been involved with, this time is different he's using taxpayers money and can afford to keep his word this time. Open check book with the checks signed by Schumm, Dever, Corliss, and KUEA/Zenger. He can't lose with access to 65 million dollars.

0

mikekt 11 months, 1 week ago

Running into hidden or unseen-unnoticed or unstudied buried rock ledges in the middle of laying water mains, sewers..... for either sanitary sewers or parking catch basin drainage lines could get expensive .

Also sounds as if the city needs to provide Fritzel with engineering specifications for the infrastructure to be built, so Fritzel can speak to the costs of that bill.

I am not of the belief that you sign a check with your good faith credit...... and hand it to a builder to fill out as they so choose ( sounds like great work....if you can get it )

The assumption that "giving all of the infrastructure work to one party, will keep the costs down", is just an assumption.....no more....no less .

4

WilburM 11 months, 1 week 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!!!

10

Kate Rogge 11 months, 1 week ago

Graft and corruption masquerading as civic pride and prosperity.

9

thisismyvoice 11 months, 1 week ago

In my humble opinion, Don't trust the younger Fritzel. He is not of good character. He is not upright and honest.

Just stop the construction until the economy is on good footing.

Make stiff penalties for any construction that goes over the bid and the time allotted to do the job. No more constructions that cost triple the price of the bid. The penalties should be stiff enough to eat up any builder profits from the construction.

This is one time when I support Amyx. Stunning.

0

Keith Richards 11 months, 1 week ago

Dever is clueless. In a few short sentences a 'confident' Dever said "I'm sure, I imagine, I don't think, there is no way"

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irvan moore 11 months, 1 week ago

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

4

Gene Ramp 11 months, 1 week ago

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

0

Thom 11 months, 1 week 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.

9

Richard Heckler 11 months, 1 week ago

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

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