Lawrence City Commission to consider settlement regarding Riverfront Plaza lease payments

The west side of Riverfront Plaza is pictured in this file photo from 2012.

At its meeting Tuesday, the Lawrence City Commission will consider a more than $250,000 settlement agreement regarding invoices the city failed to send to the Riverfront Plaza.

The issue came to light about six months ago when Riverfront owners requested a review of the building’s ground lease billing. The city owns the land the building sits on, and city staff subsequently said that invoices for Riverfront’s lease payments hadn’t been sent since 2011.

City and Riverfront representatives disagree on the total amount owed, and the proposed settlement states it is a “compromise of a dispute.” City Attorney Toni Wheeler said under the proposed settlement, the city would be fully reimbursed for all costs owed according to the city’s records.

“We appreciate the cooperation of the folks at Riverfront to get this resolved,” Wheeler said.

A memo from the city attorney’s office to the City Commission states that staff believes the proposed settlement is “fair and appropriate.” Under the settlement, the Riverfront would pay the city about $257,000, which includes sums beyond the five-year statute of limitations.

The proposed resolution states the parties acknowledge that the settlement is a compromise and “should not be construed as an admission of liability by either of them, or by any of their related persons or entities.”

Riverfront owners have said the ground lease payment was reduced under an agreement with former City Manager David Corliss, but Wheeler said city records indicate that only the parking fee agreement was modified.

“We did not find evidence that that occurred,” Wheeler said. “The original agreement said that any modifications to the agreement had to be in writing and we found no modification other than the ones that we had identified.”

Specifically, Riverfront owner Dan Simons has said he believes the Riverfront’s ground lease payment had been reduced in 2010 from a minimum of $36,000 per year to $5,000. The Simons family is also the former owner of the Lawrence Journal-World.

The city hired an outside auditing firm to assess its billing as a result of the unsent payments. That audit is ongoing, and a final report will be presented to the City Commission once it is complete. An initial assessment found that poor record keeping, insufficient employee training and a lack of oversight caused the unsent invoices.

Simons said the agreement made under Corliss was a “gray area” and that he is glad to have a resolution regarding the ground lease payment.

“Now that we have the numbers going forward, everything is cleared from the errors of the past,” Simons said.

Simons also said he thinks both sides should have noticed that invoices weren’t being sent, but that he is ready to move on. He said the disagreement has hindered plans to sell parts of the three-story Riverfront Plaza building, which sits on the bank of the Kansas River and near the north entrance of downtown.

“I think we can absolutely look forward and say that we’ve corrected any and all issues, so let’s do some exciting development in downtown Lawrence,” Simons said.

The City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.