Lawrence commission OKs Rock Chalk Park audit, due by end of February

Lawrence city commissioners Tuesday set in motion an audit of the controversial Rock Chalk Park project and assured the public they expect full cooperation from their partners, Kansas University Endowment and a private firm led by Lawrence businessman Thomas Fritzel.

Commissioners unanimously approved a contract with Tennessee-based McDonald & Associates to audit about $12 million worth of infrastructure work such as parking lots, roads, sewers and other items that serve the sports complex. The work was done without going through the city’s standard bidding process, and after the public raised concerns, commissioners said they wanted an independent set of eyes to review the project.

“I want to make sure we have been accurately billed in terms of the city’s responsibility on the development agreement,” Mayor Mike Amyx said. “I want to make sure we are paying for the infrastructure costs and only those infrastructure costs.”

The Rock Chalk project involves about $40 million worth of stadium construction that also was constructed by a Thomas Fritzel-led entity. The city is responsible for paying for infrastructure costs, but is not responsible for paying for stadium costs. In some cases, the same set of contractors were used on both projects.

City commissioners were told the audit may require that Fritzel or Kansas University Endowment provide the auditor with more documents, such as invoices, copies of financial records and other such documents.

Commissioners Mike Dever and Jeremy Farmer said they met with the endowment and Fritzel on Tuesday to ensure that such documents would be forthcoming, if requested.

“I think they made it pretty clear to us that what we ask for, they will give us access to,” Dever said. “They are not hiding anything.”

Farmer said he hopes the audit will give members of the public confidence that the city received a fair deal for the infrastructure that was built at the complex. He said he also expects the audit will find problems with the process the city followed on the project.

“I’m sure the audit is going to come back and say procedurally there were some things we didn’t do right,” Farmer said. “I think there will be recommendations on how we can do this better in the future, if we ever choose to do so again.”

The contract with McDonald & Associates will charge the city $160 an hour to conduct the audit, with a cap of $27,000 plus out-of-pocket expenses. Last week, commissioners had considered a different contract with the firm that was capped at $25,000 plus expenses, but that contract would have allowed the company to produce a report that did not fully meet all accepted auditing standards. This new contract requires the company to meet all auditing standards. It sets a deadline of Feb. 26 for the report to be completed, although commissioners said they would give the firm a longer period of time, if needed.

In other news, commissioners unanimously:

• Agreed to hear a request for a 95 percent, 15-year property tax rebate for a proposed expansion of The Eldridge Hotel. The city’s Public Incentives Review Committee will hear the request on Feb. 3. City commissioners set a date of Feb. 10 to hear the tax rebate request. The $12.5 million Eldridge expansion would add 54 new rooms and additional restaurant and bar space on the vacant lot south of the hotel.

• Agreed to hear a request for a sales tax exemption for a proposed 76-unit independent living project at the Pioneer Ridge complex at Wakarusa Drive and Harvard Road. The company is seeking industrial revenue bonds, which would allow the company to avoid paying sales tax on the construction materials that would be purchased for the project. The city’s Public Incentives Review Committee will hear the request on Feb. 3.

• Approved a rezoning for the property just south of Rock Chalk Park. The new Community Commercial CC 600 zoning will give the owners of the property more flexibility in designing a retail center that complements the adjacent Rock Chalk Park complex. The previous zoning was approved prior to the Rock Chalk Park concept emerging. The previously approved plans, for example, had single family housing bordering the stadium sites. The new zoning will allow for commercial uses closer to the sports complex. The new zoning continues to cap the amount of retail space at the site at about 360,000 square feet.