photo by: Chad Lawhorn/Journal-World

The former Riverfront Mall complex near Sixth and New Hampshire streets is pictured on Oct. 11, 2024.

A settlement has been reached in the Riverfront building owners’ lawsuit against the city of Lawrence and its contractors, one in which the defendants would pay a total of $2.5 million, the city would take control of the building and the SpringHill Suites hotel would stop operating there.

Currently, a Lawrence-based entity called Riverfront LLC co-owns the former Riverfront Mall building with the other plaintiffs, but the city owns the land on which the building sits and leases it to the private ownership group. In February 2024, however, the ownership group sued the city and its contractors, alleging that they caused millions of dollars in damage to the building by altering the bank of the Kansas River during a repair project at the Bowersock Dam.

Among other things, the plaintiffs claimed in 2024 that the building had shifted so much because of the unstable riverbank that more than 10% of the rooms at the SpringHill Suites hotel that currently operates there could not be used due to cracked floors, walls and other damage.

The city included details of the settlement in its agenda for Tuesday’s Lawrence City Commission meeting, and the settlement is subject to the commission’s approval.

In the settlement, the city and its contractors agree to pay the plaintiffs $2.5 million in two installments. The first installment would be $2.175 million, and would be due within 30 days after the last party signs the settlement. The settlement itself says this would be “payable by the Defendants jointly,” but doesn’t divide up the responsibility, saying that “the source of funds and allocation of the First Installment … is a matter solely between and among Defendants.”

In a memo to the City Commission, city legal staff said this would be paid exclusively by the non-city defendants: they are contracting firm TSP Environmental, R.D. Johnson Excavating Company, Dondlinger and Sons Construction Company; and Recreation Engineering and Planning Inc.

The second installment is the one the city is solely responsible for paying. It is $325,000, and it is due when La Posada Group LLC, the owner of the SpringHill Suites hotel, vacates. The settlement says this must happen no later than April 5, 2027. City staff recommends paying for this using money allocated for City Hall renovations.

After this, the leases of the ground the building sits on will end, and the city will gain complete control of the building.

“The upshot of the settlement, from the City’s perspective, is that, in addition to releasing it from exposure to possible liability in the litigation, beginning no later than April 2027, it terminates two long-term leases (potentially forty years or longer) of the ground upon which the Riverfront Building sits,” city legal staff said in the memo.

The memo also says that the contractors and subcontractors named the city on their insurance policies, and that the insurers have paid the city’s legal fees in the case.

At one time, city government did lease space in the building for its planning department and Municipal Court, but both of those functions moved to City Hall in November 2024. City officials told the Journal-World then that the building was in poor condition, and staff had experienced roof leaks, HVAC issues and a ceiling tile falling on a staff member, among other problems. At times, conditions were bad enough that some planning staff members had to work remotely.

The memo from legal staff says there are “a myriad of possibilities for the future use of the land or Building” once the city takes over. The suggestions it gives would all involve the building’s demolition, however.

“Removal of the Building, for example, may grant the community unparalleled access to the Kansas River for use by the residents of Lawrence for recreation purposes, for civic purposes, for a nature park, or the like; all of which would allow for revitalization and reimagining of the northern portion of our beautiful Downtown,” the memo reads. “The City looks forward to exploring those possibilities with the community.”

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

(Full disclosure: Riverfront LLC is operated by the Simons family, the former owners of the Journal-World. However, the Simons family no longer has any ownership interest in the Journal-World, and the Journal-World has no ownership interest in the Riverfront property.)