City working behind the scenes to save USOC project

City officials are "actively engaged" in behind-the-scenes discussions with a real-estate developer and the U.S. Olympic Committee to salvage a troubled $53 million agreement designed to keep the USOC in Colorado Springs for at least the next 25 years.

None of the three parties is saying much about the discussions because the developer, LandCo Equity Partners, sued the city and the USOC in federal court last month, alleging that they have failed to meet their contractual obligations.

What some council members would say Thursday is that they're working to get the situation resolved.

"My goal is to provide the USOC what we promised them in March of last year," Mayor Lionel Rivera said.

"We're working towards it," he said.

A year ago, the city, the USOC and LandCo signed an agreement to provide the USOC an incentives package to keep its headquarters in the Springs. The agreement calls for LandCo to build a headquarters for the USOC and make $16 million in improvements to the Olympic Training Center, among other requirements. The headquarters building is under construction downtown at the corner of Tejon Street and Colorado Avenue.

The deal began to fall apart in November, when the city failed to issue more than $20 million in certificates of participation under terms of the agreement. Proceeds from the certificates were to pay for the top five floors of the downtown building, which the city then planned to lease to the USOC for a $1 a year. Some council members say the city didn't issue the certificates because LandCo didn't have the $16 million to pay for the OTC improvements.

Denver-based attorney Steve Long, who is representing LandCo in the lawsuit, said Ray Marshall, the company's chairman, wants to see the deal through.

"We filed a lawsuit for the purpose of trying to get the city and the USOC to live up to their contractual obligations, which they have not done," Long said.

"Our desire was, is and remains to be trying to get the deal done, whether by force of a lawsuit or through resolution of a lawsuit," he said. "That's the developer's goal."

At least three City Council members said they're optimistic the terms of the agreement will be met.

Councilman Jerry Heimlicher said the city is trying to raise $16 million from private sources to pay for the OTC improvements, which, under the agreement, is LandCo's obligation.

Once the USOC sees the $16 million as a "certainty," it will sign a 25-year lease on the new headquarters building, he said.

Then, Heimlicher said, the city will issue the certificates of participation.

"My take on this is that, through a combination of negotiations and behind-the-scenes work, we will come up with the money to fund the Olympic Training Center," Heimlicher said. "Then, when we get that and the Olympics see that as a sure thing, then I think we'll move forward with the (certificates), and I'm hoping it can happen maybe before the end of April, or certainly before the end of May."

Councilman Scott Hente said that's one of the proposals under consideration.

"I don't know if that's the scenario that's going to play out," he said. "I know the city is trying to cobble together or assemble a package whereby the $16 million (obligation) can be met."

The city is "actively engaged with our two partners to make sure everyone lives up to the agreement and we get this done," Hente said.

Councilman Larry Small said a fundraising effort to help pay for the OTC improvements has always been part of the plan.

"I'm hoping, personally, that we can get everything in place to (issue the certificates) this month to get it done next month," he said. "That's my own personal wish. That doesn't mean I have any insight into whether that will happen or not."

The USOC "is still moving forward with the expectation that the project will be fully developed and delivered," spokesman Darryl Seibel said.

"We're an organization that does business all around the world, and we understand, certainly, that projects of this complexity don't always go exactly according to script," he said. "That said, there's a threshold. There's a point at which you have to assess whether or not it's necessary to go in another direction."

Seibel declined to say whether the delays have prompted the USOC to consider moving its headquarters elsewhere, or if they have generated interest from other cities.

"I won't get into whether other cities have approached us, or whether we've approached other cities," he said.

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DETAILS

Longtime Colorado Springs attorney Pete Susemihl, who specializes in setting up special districts, said he met with officials from the Downtown Partnership in February to discuss a plan to form a special district downtown to collect a 1 percent "public-improvements fee," similar to a sales tax on bars and restaurants. He said the district could have issued up to $2 million in bonds, repaid from the fee, that would have helped pay for the USOC deal.

Downtown officials were cool to the idea, Susemihl said, and instead agreed that the Downtown Development Authority, a special district that collects a property tax for downtown improvements, repay a $1.3 million loan from the state Economic Development Authority used in the Olympic deal. Ron Butlin, executive director of the Downtown Partnership, wasn't available Thursday for comment.

Susemihl said the meeting was part of a larger effort to keep the Olympic deal alive.

Wayne Heilman, The Gazette