Lawrence commission approves most of Rock Chalk Park infrastructure payment
Most of the check will be in the mail soon.
Lawrence city commissioners, on a 3-1 vote, agreed Tuesday evening to pay the bulk of the $10.45 million city taxpayers owe for shared infrastructure at the Rock Chalk Park Sports complex.
But the city plans to temporarily withhold payment from its private partner for about $1.3 million worth of professional fees, legal costs, interest and other costs until the city has more time to study those expenses.
“They have done the work and we owe them the money,” City Commissioner Bob Schumm said. “I know when I do work and it is time to get paid, I want to get paid.”
A private firm led by Lawrence businessman Thomas Fritzel built the infrastructure as part of a no-bid contract that was part of a unique public-private partnership related to the Rock Chalk Park complex.
In recent days questions had arisen about several fees Fritzel’s firm has submitted for reimbursement. Previously the city was being asked to pay for a little more than $600,000 in interest and loan origination fees for the project, but the city had not been given access to basic information such as the interest rate or principal amount of the construction loan.
On Tuesday evening, an official with Kansas University Endowment Association, the third partner in the project, gave the city a letter that showed the construction loan for the project was $12.9 million with an interest rate of 4.125 percent.
City Manager David Corliss told commissioners that he wanted to withhold payment on the interest and loan origination fees until the city could run calculations on the new numbers. The city believes the value of the required infrastructure installed at the Rock Chalk site is about $11.6 million. Fritzel’s firm reports it has paid about $13 million in invoices for work at the site. Corliss said he questions whether the city should pay for interest on any part of the loan above $11.6 million.
Commissioners also said they had questions about legal, architecture and engineering fees and they want to study them further.
Commissioners also briefly discussed whether a formal audit of the infrastructure costs should be conducted. Commissioners confirmed that KU Endowment had not conducted an outside audit of the expenses submitted by Fritzel’s Bliss Sports II company, although the endowment association did internally review the expenses. Commissioners took no action on conducting its own audit of the expenses because they expressed confidence that city engineers had closely monitored the costs of the improvements as they were built.
An official with KU Endowment said he thought the city had done an extraordinary job of monitoring the project.
“The amount of oversight and due diligence done by the city was greater than really anything I have been a part of for about 25 years,” Monte Soukup, senior vice president of property for KU Endowment, said. “I hope everybody feels like the project was really watched.”
Not quite everybody did. Greg Robinson, a Lawrence resident who has been an opponent of the project, said the city should have written its contract with Bliss Sports II to allow the city to have greater access to Bliss’ financial records and books since the project was allowed to move forward without a bid.
“Whoever was looking out for our best interests really dropped the ball,” said Robinson, who was the only member of the public to speak on the issue.
The action by the commission authorizes the bulk of the Rock Chalk infrastructure costs to be put on the city’s lists of claims to be paid next week. The remainder of the claims will be brought back for a report to commissioners in the next several weeks. Commissioners voted to move ahead with the payment on a 3-1 vote, with Mayor Mike Amyx continuing his longstanding opposition to the project.
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