USOC is dropped from lawsuit; the city not so lucky

One chapter of the U.S. Olympic Committee soap opera appears to be ending, but it's unclear how the entire mess will be settled.

LandCo Equity Partners and the USOC announced Wednesday that they have "resolved all disputes" stemming from the troubled $53 million agreement the two parties and Colorado Springs officials signed last year to keep the USOC's headquarters in the city.

As a result, LandCo dropped the USOC from a federal lawsuit filed in March that alleged the USOC and city failed to hold up their end of last year's three-party agreement. That deal called for LandCo to develop new offices downtown for the USOC and Olympic-themed national governing bodies and make millions of dollars in upgrades to the USOC's local Olympic Training Center.

But LandCo said Wednesday that it has not settled its claims against the city or any individual or entity associated with the city. LandCo added that the company and the USOC "hope that a full resolution of all disputes between LandCo and the city can be reached so that the project can be completed for the benefit of the USOC and United States Olympic athletes."

Today is the deadline for the city to file a response to LandCo's lawsuit.

Vice Mayor Larry Small said he expects City Attorney Patricia Kelly to file a motion to dismiss the lawsuit because a settlement with LandCo is in the works.

Councilman Scott Hente, who has been directly involved in negotiations with LandCo and the USOC, wasn't so sure the city would file a motion to dismiss the suit; it might ask the court for time to allow a settlement to be reached.

Wednesday's announcement by LandCo and the USOC nevertheless raised more questions than it answered. What's unknown are the terms of the settlement between LandCo and the USOC; to what extent the company will continue to be involved in the USOC project; whether another developer will be brought in to assist the project; and whether the USOC remains committed to keeping its headquarters in the Springs.

LandCo Chairman Ray Marshall declined to elaborate, his attorney couldn't be reached, the USOC wouldn't comment, and Springs Mayor Lionel Rivera didn't return phone calls.

Small hinted Wednesday that LandCo will be involved in completing the downtown offices for the USOC and national governing bodies - but not with the Training Center upgrades.

"The suit between the city and LandCo, the part that needs to be resolved is two parts," Small said. "One is the completion of the headquarters building, and the other part is the completion of the NGB building. Whatever settlement will be reached with LandCo, those two facilities will be the subject of that agreement."

At issue is the March 31, 2008, agreement that called for the city and LandCo to provide $53 million in incentives to keep the USOC in the Springs, where it has been headquartered since 1978.

Last year's deal came after the USOC said in fall 2007 it wanted to upgrade its aging offices and improve facilities for athletes.

Under terms of the 2008 deal, LandCo was to provide the USOC with five floors of new office space in a building the company was developing at Colorado Avenue and Tejon Street. LandCo also was to remodel a nearby former city utilities building into offices for national governing bodies.

The city was to borrow money to finance its purchase of the buildings from LandCo.

The city then would lease the space to the USOC for a nominal fee and the organization would remain in the Springs for at least 25 years.

In another major part of the incentives package, LandCo was to provide $16 million in improvements upgrades - including new athlete housing - at the Training Center, which is part of the USOC's 34-acre campus at Boulder Street and Union Boulevard.

But LandCo has been unable to finance the training center upgrades, citing the poor economy and collapsing credit markets; the USOC has refused to sign a lease on its headquarters building as a result; and the city says it can't borrow the money to finance its purchase of the buildings from LandCo without the USOC's lease.

The disputes led to charges and countercharges over who's at fault, including LandCo's lawsuit.

Also, the 4th Judicial District Attorney's Office said it is investigating Marshall for unspecified reasons. And a Springs businessman had alleged that Rivera, a financial adviser, had a conflict of interest because he allegedly had Marshall as a client. The city's Independent Ethics Commission meets Friday to consider the complaint against Rivera.