What a long, strange trip it's been — and maybe the train is about to pull into the station.
Two and a half years after he was indicted on 33 counts of securities fraud, conspiracy, theft and racketeering, LandCo exec Ray Marshall is finally going to trial for securities fraud and theft. And though it's not officially part of this trial, we may learn a little more about the ill-fated 2008 U.S. Olympic Committee deal, which led to a separate six-count indictment that will be tried later.
Did it just collapse under its own weight? Or was it a scam to begin with? And if it was, were Marshall and his close associate Jim Brodie the only scammers? Or did they have some highly placed co-conspirators?
In April 2008, just as the Great Recession gathered steam, the city of Colorado Springs entered into an agreement with the USOC and LandCo Equity Partners. The much-ballyhooed deal aimed to keep the USOC in town by giving the organization a downtown office building and another building for the national governing bodies of individual sports, plus improvements to the Olympic Training Center.
Best of all, it would be practically free! Yup, thanks to the financial acumen of local wunderkind developer Marshall, city taxpayers wouldn't be on the hook.
LandCo would provide the renovated building, turn over the top floors to the USOC, and magically make the deal work by renting out the ground floor, getting tax advantages, creating some kind of baffling enterprise zone, and taking advantage of synergy between the USOC project and the company's other downtown real estate ... it all sounded too good to be true.
But, hey, what do we know? That's why developers are rich and we aren't — they understand how to make money!
The city officials who created the deal were delighted with their work, as was City Council, which happily whooped the deal through. Mayor Lionel Rivera accompanied Marshall to the Beijing Olympics, while city staff, LandCo and the USOC began the complex process of implementing the deal.
In retrospect, the deal was doomed from the day it was inked. The local economy was tanking, commercial real-estate values were falling, and the deal may have been a scam from the get-go.
Delay followed delay. LandCo and the city missed deadlines, and threw down a barrage of misleading press releases.
The wheels were coming off. LandCo and other entities controlled by Marshall were already embroiled in multiple lawsuits brought by investors in unrelated projects who believed that they had been deliberately defrauded.
In November 2009, a state grand jury returned that 33-count indictment against Marshall and Brodie.
So the USOC deal officially collapsed, and the city was stuck with the bill. When the dust settled, taxpayers found themselves on the hook for $32.48 million in debt, payable in annual installments averaging $2.14 million, for a total of nearly $65 million. The USOC stayed, but city officials had to mortgage the Police Operations Center and Fire Station 8 to finance the deal.
The fallout began. Outraged voters wondered why city officials had failed so miserably. Was it all the fault of a couple of fast-talking con artists? Rumors circulated about payoffs, about under-the-table deals and about complex real estate transactions that may have benefited certain politicians.
The original indictment hinted at co-conspirators, noting that Marshall and Brodie acted in concert with others, both "known and unknown." That may simply have been legal boilerplate, allowing for prosecutorial flexibility.
But if there was a wider conspiracy, there most likely won't be any tangible evidence — no e-mails, no notes, no canceled checks, no Facebook posts ("Just got an awesome bag of cash from Jim & Ray!"). The only ones who know are Marshall and Brodie — and Marshall, who is represented by Colorado's best criminal lawyer, Pamela Mackey, isn't about to squeal.
That leaves Brodie. He was Marshall's right-hand man, and you can bet that the DA has offered him an opportunity to take a plea and testify against Marshall. Will he do it? Or, more precisely, does he have anything significant to give? If he doesn't, and if he holds firm in a possible subsequent trial as well, you can bet that the rumors are only rumors.
And if he does ... well, nothing like seeing more folks on trial!