DALLAS - Colorado Springs must issue $31 million of debt in 45 days, raise $1.5 million in donations in three months, and settle a developer's lawsuit to retain the U.S. Olympic Committee headquarters and training center.
But the carefully crafted deal approved by the City Council last week could unravel over another lawsuit that challenges plans to issue certificates of participation that would provide funding for the headquarters and use the city's Police Command Center and a new fire station as collateral.
Lindsay Fischer, a longtime Colorado Springs attorney who lives in the city's landmark Broadmoor Hotel, has sued to stop the transaction, claiming that the 30-year COP deal requires a vote.
By leveraging the public buildings, the COPs become de facto bonds because future city councils will have no choice but to continue making lease payments on the facilities, Fischer said.
"You've got to have an election in order to issue those COPs because they are now bonds," Fischer said.
Fischer also questions the use of the certificates to finance completion of a condominium building on the downtown USOC campus because it is a private facility that belongs to the nonprofit organization.
"COPs have always involved public buildings," he said. "I know of only one other situation when COPs were going to be used for a private facility, and it didn't eventually go through."
The deal approved last week was designed to resolve a lawsuit filed against the city in March 2008 by developer Ray Marshall and LandCo Equity Partners over delays in completing the USOC headquarters building, the training center and renovation of another building.
Marshall and LandCo were awarded a $53 million contract for construction of the USOC headquarters, two building renovations, and upgrades to the training center. But when the developers missed construction deadlines, USOC backed out of the agreement. LandCo then sued the city and the USOC, which was later dropped from the suit.
Under terms of the settlement and agreement with the USOC, the city will take over completion of the USOC headquarters building, which is currently just a shell. The cost of the headquarters project is $21.7 million, according to a presentation to the City Council. In exchange, USOC has agreed to extend its commitment to Colorado Springs to 30 years, five more than in the 2008 agreement.
Up to $9.5 million of the city's COPs will be used for improvements to the training center. LandCo had been responsible for the $16 million project before the agreement.
Rather than using the USOC buildings as collateral in the COP issue, "municipal bond market conditions now dictate that city real estate assets be pledged as collateral," according to the presentation of the city staff. "COP purchasers will require city assets to be pledged as collateral."
