RSS

Bailout to bail out USOC deal?

Mon, Apr 6, 2009

Blog

Got your attention, didn’t I?

But it’s true – sort of.  Chatting with a few councilmembers this morning, we found that City Council, aided by thus far unnamed, prominent and, most importantly, solvent members of our community, are furiously working to restructure the U.S. Olympic Committee/city/LandCo deal.

The key to the restructuring: a new financing package from a “major bank,” thus far also officially unnamed.

Like all “major banks,” this one is only liquid (not to mention solvent) because of the government’s injection of funds (OK, OK, that’s “taxpayer dollars” for all you unreconstructed right-wingers out there) into the banking system.

So the path is clear – it’s not Tinker to Evers to Chance but Taxpayer to Banks to (new) Developer to USOC.  Not a mere double play, but a triple play!

According to our sources, Ray Marshall and the city were in urgent talks during the weekend.  Purpose: to make Marshall’s lawsuit go away, and either replace him with another developer, or make him the junior partner in a newly created entity that will take over LandCo’s contractual responsibilities.

The key to the deal is simple, even elegant: who wants to put up $16 million for the agreed-upon improvements to the Olympic Training Center?

Absent a big, fat loan from a big, fat bank, the city will have cough up the dough right away, instead of working out a complex deal that might shift much of the burden to other deal participants (the state, the Downtown Development Authority, El Pomar Foundation, etc.).

If it works out, it’s only because of TARP, which has loosened the purse strings of all those big, fat banks – that’s right, the ones that paid big, fat bonuses to the big, fat CEOs who earned them by … oh, never mind.

Give council credit – they’re doing their best to keep the deal from blowing up, after being blindsided by the news of Marshall’s financial/legal difficulties.  It’s easy to blame our elected officials for being asleep at the wheel, but let’s be clear: they were ill-served by both the city attorney and the city administration.

So far, council has taken the position that the original deal, however flawed, would have worked out if the economy hadn’t gone south.  Maybe – but even a year ago, when the deal was first inked, many in the development community scornfully dismissed it as unworkable.  And as Marshall’s well-documented financial and legal problems multiplied, no one in either office gave council a heads-up.

Will heads roll?  We’ll see – but any such reckoning will have to come after a successful restructuring.  And when that happens, there might be a quiet resignation or two.

But in the happy event of a new and doable deal, don’t expect council to pass a resolution of appreciation thanking the folks who made it possible- Treasury Secretary Tim Geithner and President Barack Obama.

I’m sure they’d appreciate it …

<- Back to CSBJ.com

3 Comments For This Post

  1. John Whitten Says:

    So Mr Hazlehurst knows more than he says, if he knows the bank will use TARP money to bail this out.

    As one local DOB (Dirty Old Banker), I declined the Tarp money, because I didn’t want to give up my jet……….

    In any case, it’ll be interesting to see who, if anyone, actually replaces Rayray in this deal. No doubt when it’s announced, at 7:01 on election day(HEY, that’s TODAY!!), it’ll be with great fanfare and hugs all around.

    It is also interesting that the banners touting LandCo as the Real Estate Advisor to the Stars have disappeared….no doubt collector items for those with a cynical sense of humor. (yes, I admit I’d like to have one…..)

    Let’s speculate on the quiet resignations: Mayor Lionel? Mike ‘Colorado Humane’ Anderson?
    We should be so lucky………

    And if anyone is interested, take me to lunch and I’ll thoughtfully explain what the TARP money is REALLY being used for……

    I’d keep writing, but I have to catch my jet to see a customer in Falcon……

  2. sean Says:

    I think Mr. Hazelhurst actually knows less than he would like you to believe. He’s only reporting City Council’s side of the story (not supprising), and his recent writing seems absent journalistic integrity.
    The reality is that LandCo and Ray Marshal’s problems have been a matter of public record since 2008 and a large number of folks in the business and legal community have been aware of his ongoing litigation. Many of those same well informed folks are also aware that our Mayor has been attempting to peddle the City’s bonds door to door for the past 3 months in an effort to raise the City’s share of the money, which it has not yet done.
    I don’t think either side is truly shocked by where the deal sits today with its looming lawsuits and financial problems. The USOC demanded a list of facilities and amenities that would be needed to keep it here in COS. We who value that special business and its contribution to the communtiy continue to work towards those plans. Bailout money or not, getting this deal done and completing the necessary facilities is all that should matter to the people of this City.

  3. Tim O Says:

    I suspect that most developers have some skeletons in their closet. My understanding, however, is that the USOC is blocking the issuing of COPS by not signing the agreement as promised back in Nov. Where is the outrage at them for first blackmailing the city with unspecified offers and now holding out for “leverage”?
    There’s an old phrase about biting the hand. Everyone in this deal has shown incompetence except the people who were cut out of the deal…..the taxpayers.