Homeless people enter former Topeka hotel, neighbor says

A Denver-based real estate company that plans to build high-rise apartments in Topeka went about three weeks without its license to do business in Kansas, although that has now been reinstated.

That company, Flywheel Fairlawn, LLC, lost its license effective July 15 due to its failure to file an annual report with the state in a timely manner, according to information posted to the Business Entities Database of the United States. ‘State.

The forfeiture came three days after Topeka’s mayor and city council approved $24.5 million in taxable industrial tax liabilities for the company’s plan to build high-rise apartments on the site of a former Holiday Inn Holidome at 605 SW Fairlawn Road.

Flywheel Fairlawn’s license remained lost as recently as Thursday, but was reinstated on Saturday, the Business Entity Database said.

The Capital-Journal received no response to phone and email messages it left last week seeking a response from Denver-based Flywheel Capital, LLC, the parent company of Flywheel Fairlawn, LLC.

The Topeka city government, which has yet to commit to issuing bonds for the project on the site of the former Holiday Inn Holidome, was aware of what happened to Flywheel Fairlawn, the city confirmed Thursday. city ​​communications director, Gretchen Spiker.

At this point, the license had not yet been restored.

“The city has been in contact with Flywheel Fairlawn, LLC and is reviewing its options,” Spiker told the Capital-Journal. “The city wants the community to know that there is no liability to the city for industrial tax obligations.”

A hole can be seen last week in the fence surrounding the former Holiday Inn Holidome at 605 SW Fairlawn Road, where plans call for high-rise apartments to be built.  Flywheel Fairlawn LLC, the owner, lost its license July 15 to do business in Kansas, according to state records, though that license was reinstated late last week.

Meanwhile, psychotherapist Sarah Bremer Parks, co-owner of a nearby business and building at 5315 SW 7th, told the Capital-Journal on Thursday that Flywheel Fairlawn does not maintain the former Holidome property at 605 SW Fairlawn. Road.

“There are homeless people in there now,” she said.

“Providing much-needed quality housing”

Hotels had operated on the property for decades before the Mayor and Topeka City Council learned in a September 2020 meeting that the property had recently been vacated.

They voted that evening to re-zoning to allow Flywheel Fairlawn to use this property to provide “market-priced labor housing” for 130 to 140 studio apartment units, one-bedroom and two-bedroom apartments.

The Denver Post reported in October 2021 that one of Flywheel Capital’s 50% partners, Adam Hazlett, filed a lawsuit against the other, Ben Hrouda, alleging he misappropriated funds from investors and filed fraudulent tax returns.

Hrouda was then among those present when Topeka’s mayor and council voted in November 2021 to issue $10 million in industry revenue bonds to help investors fund Flywheel Fairlawn’s Topeka development, named “Fairlawn Acres.” .

In exchange for the bond issue, Flywheel Fairlawn agreed to limit the monthly base rental rate to $550 for studios and $775 for one-bedroom units, while being authorized to impose increases that could reach 5% per year.

The Mayor and Topeka City Council voted July 12 to approve another zoning change and to change the amount of IRBs for the development to $24.5 million.

The bond issue would pose no financial risk to the city. Investors would purchase the bonds, which would be repaid using revenue generated from the project. If the project were to default, it would become a problem between the developers and the investors.

Flywheel Fairlawn plans to demolish existing structures “and construct two four-story buildings containing approximately 220 new workforce apartments to meet Topeka’s achievable housing needs,” a document in the order’s filing says. of the day of the July 12 meeting.

“The project will cost approximately $24.5 million and take 15 months to complete,” the document said. “The project will include a suite of high-end amenities such as a salon, fitness center and laundry facilities. This project will revitalize a vacant building while providing much-needed quality housing in Topeka.”

“The city can refuse to sign”

Flywheel Fairlawn’s license to do business in Kansas was revoked three days later on July 15, according to the state.

“The City of Topeka was made aware of the LLC status issues during its standard review process,” Spiker said Thursday. “This review process is part of the city’s due diligence prior to signing a performance agreement, which is a condition of the bond issuance.”

The city has not yet entered into a performance agreement with Flywheel Fairlawn for the project, she said.

“The city may decline to sign the agreement and proceed with the bond issue until the company has corrected the issue,” Spiker said Thursday.

A records check conducted two days later showed that Flywheel Fairlawn’s license had been reinstated.

“The fence is not secure and does not prevent anyone from entering”

Meanwhile, Sarah Bremer Parks said Thursday that no one has been looking after the property since its former manager, Michael Grant, moved out at least three months ago.

Parks said she works in private practice with her husband, Peter Parks, in the building they co-own near the site of the proposed skyscraper.

She keeps an eye on the old Holidome property, where she says people can easily enter and the doors to the buildings are unlocked.

“There are homeless people coming and going despite a fence that was put up about a month ago,” Parks said. “The fence is not secure and does not prevent anyone from entering.”

A hole could be seen in this fence last week.

The city has no comment at this time on Parks’ claims regarding access and maintenance of the property, Spiker said.

Tim Hrenchir can be reached at [email protected] or 785-213-5934.

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