Lawrence riverfront hotel settlement would shift building to city ownership

A $2.5 million settlement would do more than end a lawsuit. It would move one of downtown Lawrence’s most visible riverfront buildings into City of Lawrence control and force SpringHill Suites out of the property at 1 Riverfront Plaza.

The proposed deal, still waiting on City Commission approval, would require the defendants to pay the plaintiffs in two installments, with $2.175 million due within 30 days after the final signature. City legal staff said the payment responsibility would fall entirely on the non-city defendants, even though the settlement text described the defendants as jointly responsible. If commissioners approve it, the practical result would be immediate: the city would take control of the building, and hotel operations there would end.

That outcome would close a dispute that has tied up a prominent Kansas River property and raised questions about who should pay when river engineering, downtown development and public land overlap. Riverfront LLC filed suit in Douglas County District Court in February 2024, claiming work tied to repairs at Bowersock Dam altered the Kansas River bank and damaged the building. The owners said the structure shifted, floors and walls cracked, and more than 10 percent of the hotel rooms could not be used.

The city and the contractors named in the case denied that version of events. In their response, they said photographs showed existing undermining and foundation damage before the access road was installed. The city also blamed flooding or other prior high-water events, not the road work, for the damage. Named defendants included TSP Environmental Inc., R.D. Johnson Excavating Company LLC, Dondlinger & Sons Construction Company Inc., Recreation Engineering & Planning Inc. and S2O Design and Engineering.

The stakes reach beyond one hotel. The building sits on city-owned land, under a long-term ground lease tied to development originally acquired by The Chelsea Group, which built the outlet mall there in 1989. The property first opened in 1990 as a 150,000-square-foot outlet mall, and later became part hotel, part civic space. The city has leased space there for municipal court and planning since 2019, after approving a Riverfront office strategy in 2018 that set aside about 21,385 square feet on the west side top floor for development-related functions.

Those city leases were not cheap. Financial records show monthly payments of about $19,335.60 in contract year 1, about $20,297.93 in year 2, about $21,260.25 in year 3 and about $23,167.08 in year 5. City staff began moving municipal court and planning functions out of the building in late 2024, and the city’s departure from the riverfront site has now become official.

The building’s future is still open, but the choices are clear enough. City Hall could keep a civic use there, seek a new private tenant or fold the property into a larger redevelopment plan. What is no longer in doubt is that the city, which already owns the land beneath the structure, is moving toward direct control of a riverfront building that has been at the center of Lawrence planning, leasing and legal risk for years.