- File photo
- Ebullient statues taunt the players in today's saga.
According to many Colorado Springs City Councilors, there's a finish line in the marathon-turned-ultramarathon to keep the U.S. Olympic Committee here.
At the end of May, following a contractual waiting period, the original economic development deal that would have kept the USOC in the Springs for another 25 years will terminate. And that's when Council is hoping a new deal will be signed.
Assuming some agreement is reached — negotiations are ongoing — it's likely the city, and the taxpayers, will have sacrificed much more for this victory than originally imagined.
"I'm OK with issuing whatever amount we can demonstrate [will give us] a return on investment," Councilor Jerry Heimlicher says, adding he would go along "if you told me $30, $35, $40 million."
Others are more cautious. Councilor Scott Hente, who is privy to negotiations that most Councilors are left out of, says there's a limit on what he'd be willing to approve. He's just not sure at this point what it is. Vice Mayor Larry Small won't reveal his limit until after negotiations are final. Councilor Tom Gallagher says he'd want private donors to cover part of the costs, rather than have the city foot the whole bill.
We've come to this because developer LandCo Equity Partners appears unlikely to fulfill its commitment to pay the total cost of the USOC's biggest priority, a $16 million expansion and modernization of the Olympic Training Center.
Some on Council doubt the developer will be able to pay anything toward that project. If that's true, the city could face covering most of the $53 million deal, nearly doubling its original obligation, or risk losing the USOC — which generated a $341.3 million in economic impact in 2007, according to a consultant's study.
But making a bigger investment means bigger annual loan payments in tough economic times.
"If we have to borrow more, then that poor lady [City Manager Penny Culbreth-Graft] is going to have to cut something," Gallagher says. "People are going to lose jobs."
City spokeswoman Sue Skiffington-Blumberg declined to comment on the effects any increased debt would have.
Meanwhile, complicating factors abound:
• Since the city never issued bonds to reimburse LandCo, the developer's construction loan for the USOC's downtown headquarters has not been paid, and United Western Bank could seize that building at any time. On the city side, that could be good or bad.
"Banks don't like to own property, so there's potential to cut a deal because banks will take a loss," Gallagher notes. On the other hand, Small says, the bank could hold onto the building, wait for the market to improve, and sell to another buyer. Also, Small says, foreclosing on the building could put it in limbo during a long legal process. Hente says he doesn't anticipate a foreclosure.
United Western did not return multiple phone calls seeking comment.
• Meanwhile, LandCo hasn't dropped its lawsuit against the city and the USOC. LandCo also faces an investigation by the district attorney and unrelated lawsuits.
• The mayor is under investigation for an ethics violation, stemming from an accusation made by Ron Johnson, president and chief executive officer of Central Bancorp Inc., that the mayor and LandCo have an improper business relationship that constitutes a conflict of interest. Johnson has promised to produce proof of his accusations this week.
Looking for bright spots? Heimlicher says he believes the market will offer the city a more favorable interest rate on bonds it issues. Gallagher notes that decreased costs for many building supplies and an abundance of available labor could cut costs.
Meanwhile, Hente and Gallagher say the USOC might not need all five floors of the headquarters building, opening the possibility that finishing it (windows are beng installed this week) might not cost as much as originally planned.