City Commission approves final $1 million payment for Rock Chalk Park

Lawrence city commissioners on Tuesday approved a final $1 million-plus payment on the Rock Chalk Park project, and hoped to put a period on the controversial financial details of the sports complex.

“There is probably a lot more to say, but I think we have come to the point where it is decision time,” Mayor Mike Amyx said before calling for a vote on the final payment. “Even though I have questions about what process was followed for this project, I think the commission has made strong statements about the process we’re going to follow in the future.”

Tuesday’s payment — approved on a 4-1 vote, with Amyx dissenting — also allows for a final accounting of the joint project that houses a city-owned recreation center and privately owned stadiums that are used by Kansas University.

According to numbers compiled by a city-hired auditor, the city paid $10,452,604 — or 78 percent — of the shared infrastructure at the sports complex. Bliss Sports II, the private development group led by businessman Thomas Fritzel, paid $2,042,952 — or 15 percent — of the infrastructure costs. The city used a donation by a foundation led by Kansas University basketball coach Bill Self to pay the remaining $1 million — or 7 percent of the project costs.

The city owns a $10.5 million recreation center at the site that houses eight basketball courts, an indoor turf field, walking track, fitness room and other amenities. A group led by Fritzel owns $39 million worth of facilities at the site, including a track and field, softball and soccer stadiums that are leased by KU. The city- and Fritzel-owned facilities share roads, parking lots, landscaping and other pieces of infrastructure.

The total amount the city paid for the shared infrastructure ended up being more than what city officials originally anticipated when it first contemplated the public-private partnership with the Fritzel entity and Kansas University Endowment, which owns the bulk of the land at the sports complex.

The city originally negotiated a unique contract with the Fritzel entities and the KU Endowment entity that called for the city to spend no more than $25 million on all Rock Chalk Park expenses — including both the cost of the recreation center and the shared infrastructure. Fritzel and city-hired architects had estimated the recreation center would cost about $18 million to $20 million to build. That would have left the city paying between $5 million to $7 million for the shared infrastructure costs.

But bids for the recreation center came in dramatically lower than city officials expected at $10.5 million. City officials renegotiated the deal to reduce the city’s cap to $22.5 million, and agreed to use up to $2 million in possible donations from Bill Self’s Assists Foundation, bringing the total amount of non-Fritzel money available to the project to $24.5 million.

The city, however, did not renegotiate the part of the deal that allowed Fritzel’s Bliss Sports II to build the shared infrastructure without going through the city’s standard bidding process. City officials said they sought that change, but Fritzel and KU Endowment would not consent to it. The lower-than-expected bids on the recreation center left community members concerned that the city wasn’t receiving a good value on the infrastructure project.

City officials sought to reassure the public that the price for the infrastructure was fair by comparing the costs at Rock Chalk Park with some other infrastructure projects in the community. But questions about whether the projects were directly comparable dogged that effort. The city hired an independent auditing firm to review the project. The auditors from McDonald & Associates gave the project a glowing report, but then following the report it was discovered that some of the work related to verifying the amount of concrete used at the job site was in error.

On Tuesday, the auditors said that in retrospect, their efforts to measure concrete delivery tickets for the project were flawed and complicated by the fact the city inadvertently failed to provide the audit team with all of the concrete delivery tickets for the project. But the auditors stressed that the shortcomings of the concrete delivery ticket analysis had no impact on their other findings that the city received a quality product and was being fairly charged for the shared infrastructure under the deal it has with the Fritzel and KU Endowment entities.

“I still have no doubt that you guys got what you paid for,” said Warren Hudson, lead auditor on the project.

City commissioners did little reflection on the project Tuesday, but City Manager David Corliss did provide the commission with a memo on considerations for future projects.

Corliss told commissioners in a memo that he recommends all future city construction projects be bid on. He also said staff members will review the city’s purchasing policy, and bring forward possible changes that would require future city contractors to follow certain accounting standards when working on city projects. The audit revealed the Fritzel entity did not maintain a job cost ledger for the project, which would have provided additional details about how money was spent on the project.

Corliss also said he recommends that his staff conduct an “internal review of the project to review lessons learned.”

As the accounting questions about the project fade, Amyx said he does think the sport complex — which already is attracting large crowds — will become an important part of the community.

“I do believe these facilities are something that we will be very proud of for a long time to come,” Amyx said.