USOC pulls out of deal with city

Mayor Lionel Rivera vowed Friday to deliver on year-old promises to the U.S. Olympic Committee, which a week ago quietly dissolved the original $53 million agreement to keep the sports organization from leaving Colorado Springs.

"Our intent is to secure them here for another 25 years, just like we intended to do last year," Rivera said.

"We're continuing to work with them and developing another agreement so we can make sure we keep them here and provide them the resources they need, the ones we committed to last year," he said.

The USOC notified the city April 30 that it was terminating its agreement with the city and the developer, LandCo Equity Partners, and its chairman, Ray Marshall, who has a criminal investigation hanging over his head.

A spokesman for the USOC said the decision to dissolve the agreement doesn't mean the USOC is looking for another home.

"This should not be interpreted in any way as a signal that we are suddenly changing our view about our future in Colorado Springs," Darryl Seibel said.

Steve Long, an attorney for Marshall, called a statement issued by the USOC Friday about the termination "disappointing," apparently because the decision was made last week.

"We consider the USOC's attempt to terminate these contracts to be the latest in a series of breaches of the agreements between the USOC, the City of Colorado Springs and LandCo," Long said in an e-mail.

The finger-pointing has become the norm on this deal, which was presented to the public with much fanfare last year.

Just this week, an ethics complaint was lodged against the mayor, a financial consultant by profession who has refused to explain his business relationship with Marshall.

"That's being forwarded to the city's Ethics Commission, and they will do whatever evaluation they need to do," Rivera said. "I plan to work with them and give them whatever they request."

In the meantime, the city will work on developing a new agreement with the USOC.

But a new deal could mean a higher price-tag for taxpayers.

Rivera said the city is evaluating the costs of a new agreement.

"Certainly, the makeup of the deal is going to be different than it was before," he said. "But I think it's too early to kind of speculate on anything more than that."

Last year's agreement called for, among other things, the USOC to move from its aging headquarters in central Colorado Springs into a LandCo-developed building at Colorado Avenue and Tejon Street, in the heart of downtown. Although it never happened, the city was supposed to have issued more than $20 million in certificates of participation to buy the top five floors of the building, which it would lease to the USOC for a nominal fee.

The city's failure to issue those certificates, meanwhile, is at the heart of a federal lawsuit LandCo filed in March against the city and USOC, alleging they've failed to live up to their end of the year-old, three-party agreement. That suit is pending.

Jim Johnson, president of Springs-based G.E. Johnson Construction Co. and the downtown headquarters' general contractor, said his company will continue working and at least finish the building's shell, despite the USOC's decision and in spite of not being paid over the past three months.

Johnson said his company is owed $2 million to $3 million for work it's done on the project since February. Prior to that, the company had been paid about $5 million by United Western Bank of Denver, LandCo's lender on the project, Johnson said. "Several million dollars" worth of work remains to be done on the building, he added, although he didn't have an exact figure. He had previously said the building exterior, plus its interior mechanical, plumbing and electrical systems, are supposed to be completed in September.

But whether the USOC occupies the building, or if it becomes home to other office users, Johnson said halting and re-starting construction would be a costly, time-consuming process. Construction work would have to be re-estimated, schedules would have to be re-drawn and mechanic's liens might be filed by sub-contractors, all of which would delay the project, he said. Liens are legal claims that contractors and subcontractors file when they have haven't been paid or when disputes arise on a project.

"One of these two things is going to play out," Johnson said of the building housing the USOC's headquarters or other tenants. "And we're not going to add to anybody's pain by having us pull off the job and remobilize, therefore adding more money to it."

Johnson said that was his company's philosophy, but he wasn't just taking the high road for the community's benefit. His company can still file a mechanic's lien, he said.

"It's not intended to be a high road, it's intended to be a common sense road," Johnson said. "Obviously, it's gone on a little longer than we'd like, but nobody really benefits by us quitting work, letting the thing settle down and then coming back, because then you have to revisit all the schedule and cost issues...Not every contractor would do that. That's what we have elected to do."

Johnson said he learned of the USOC's action Friday morning. He had met with city and LandCo representatives Monday to discuss project costs, but the USOC was not part of that discussion. In fact, G.E. Johnson hasn't dealt with the USOC because its contract is with LandCo, Johnson added.

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