Board votes to let Lawrence developer Thomas Fritzel keep license, despite federal charges

photo by: Rochelle Valverde

Attorney Steve Six, who represents Lawrence developer Thomas Fritzel, questions city planners (not visible in photo) during a meeting of the Contractor Licensing Board on Sept. 27, 2018.

The Lawrence Contractor Licensing Board voted unanimously to deny the city’s request to suspend the local license of Lawrence developer Thomas Fritzel’s construction company.

The city recently filed a complaint with the board against DFC Company and recommended that the board temporarily suspend the company’s license because of pending federal charges of improperly disposing of asbestos and repeatedly violating the city’s contractor licensing regulations.

Assistant Director of Development Services Kurt Schroeder told the board that the federal allegations were serious enough that DFC’s license should be suspended during the case. City staff recommended that the board suspend the license for one year and that the board reconsider the suspension once the case was resolved.

“We think that these allegations are of such a grave nature that DFC Company of Lawrence and Thomas Fritzel should not be permitted, while these charges are pending, to act as contractors within the city,” Schroeder said.

Fritzel is charged, along with his son Tucker Fritzel and business associates Casey Stewart and Wesley Lynch, with violating the federal Clean Air Act by improperly removing and disposing of asbestos during the remodeling of the Alvamar Country Club, now known as the Jayhawk Club. The indictment alleges that Fritzel and others were aware the club contained asbestos and conspired, including sending in false demolition samples, to avoid proper handling and disposal of the asbestos in order to save money. The trial in that case has tentatively been set for July 24, 2019.

Attorneys representing Fritzel did not agree and asked the board to dismiss the city’s request. Attorney Steve Six said he did not think the city’s complaint, which referenced reports made by the Kansas Department of Health and Environment and the federal indictment, had met the board’s standard of proof. Six said it was the city’s burden to show those allegations were more probably true than not.

“What they’re saying is, something happened at Alvamar,” Six said. “We don’t yet know and nobody has determined what the violation is or whether any of the indictment allegations are true or not. We don’t know. Somebody will decide at some point.”

Ultimately, the board voted 5-0 to deny the city’s request to temporarily suspend DFC’s license. Three of the board’s eight members, Greg Rau, Verlon Myers and Barry Walthall, recused themselves from the proceedings because of stated conflicts of interest.

Acting board chair Katie Nichols said that she didn’t feel like now was the appropriate time to consider suspending the license given the pending charges. Though Nichols said she thought the city’s complaint was relevant, she said it would be difficult to take that action at this time.

“We don’t know the outcome of whether the events occurred or not,” Nichols said. “And that goes back to, as we’ve mentioned, our obligation as a board that we are held to the standard of a preponderance of the evidence.”

Without a license, DFC would not have been able to do construction work that requires a permit within the city limits. The indictment, and the city’s subsequent decision to file the complaint, followed a letter that the city sent to DFC Company in May regarding repeated violations of contractor regulations. The letter warned that the city would pursue discipline if future violations occurred.

Other recent stories about Thomas Fritzel

• Sept. 27 — Lawrence developer Thomas Fritzel has tentative trial date in 2020 on tax fraud charges

• Sept. 25 — Lawrence developer Thomas Fritzel has tentative trial date in July on asbestos charges

• Sept. 6 — In wake of indictment, City of Lawrence seeks to strip contractor license from developer Thomas Fritzel

• Aug. 14 — Lawrence developer Thomas Fritzel, associates plead not guilty to federal fraud, environmental charges

• June 29 — KU gave unique rights deal to Fritzel despite fraud investigation being underway

• May 22 — Rock Chalk Park started as $39 million deal for KU; now it may top $100 million

Timeline: Oread tax district dispute

● June 27, 2018 — Lawrence developer Thomas Fritzel and others indicted for alleged tax fraud scheme, illegal disposal of asbestos

● May 10, 2017 — Judge officially dismisses city’s lawsuit against The Oread in wake of settlement

● April 28, 2017 — All parties sign settlement in city’s lawsuit against Oread hotel

● April 19, 2017 — City leaders approve Oread hotel settlement that reduces incentives, removes Fritzel from management

● April 14, 2017 — Tentative settlement would reduce incentives to Oread hotel by millions, require Fritzel to resign management duties

● March 29, 2017 — Judge orders conclusion of mediation in Oread hotel lawsuit

● March 6, 2017 — After 10 hours of mediation and executive session, no public update in city’s lawsuit against The Oread hotel

● March 3, 2017 — City leaders to take part in second court-ordered mediation Monday for lawsuit against Oread hotel

● Feb. 22, 2017 — Mediation session does not resolve city’s suit against The Oread hotel; judge orders second session

● Jan. 20, 2017 — Judge orders mediation in city’s lawsuit against Oread hotel

● Dec. 9, 2016 — City’s lawsuit against Oread hotel moved to federal court

● Dec. 4, 2016 — City: Oread hotel developer admitted to much of alleged tax scheme

● Nov. 16, 2016 — Lawsuit against Oread group cites personal purchases, faked sales in alleged scheme to defraud city

● June 9, 2016 — Auditors continue to review Oread sales tax documents; timeline for resolution uncertain

● April 19, 2016 — After Oread kerfuffle, city suggests adding right to audit into future incentive deals

● April 6, 2016 — City awaiting findings from Oread sales tax documents; Fritzel sends letter to community

● March 15, 2016 — Oread developers agree to comply with city demands

● Feb. 22, 2016 — Developer-commissioned analysis: Oread Inn owes fraction of what city says

● Feb. 17, 2016 — Oread group willing to comply with some city demands, asks for meeting ‘immediately’

● Feb. 11, 2016 — Lawrence declares Oread Inn in default of redevelopment agreement; developer says city is in default

● Feb. 10, 2016 — Oread Wholesale submits report about city-ordered audit; record not released

● Jan. 22, 2016 — As deadline passes, city mum about next move on Oread hotel tax dispute; new questions about Oread tenants emerge

● Jan. 19, 2016 — Oread group again contests city’s demands, accuses city of violating state law

● Jan. 6, 2016 — City mum on action against Oread Inn, waiting on last deadline to comply with demands

● Dec. 31, 2015 — Oread group pays nearly $500,000 to city ‘under protest’

● Dec. 30, 2015 — City seeking more than money from Oread group as deadline nears

● Dec. 29, 2015 — Oread group has not yet responded to city letter demanding $500,000; city has discussed issue with law enforcement

● Dec. 16, 2015 — City seeks more than $500,000 from Oread group after audit finds possible violations of state sales tax law

● Dec. 16, 2015 — City overpaid Oread hotel’s development group, mayor says

● Nov. 22, 2015 — Lawrence hires firm to evaluate Oread tax district


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