In the latest salvo over keeping the U.S. Olympic Committee in Colorado Springs, the city on Thursday filed a motion to dismiss a lawsuit by developer LandCo Equity Partners, arguing the developer should not have filed its breach-of-contract lawsuit in Denver’s federal court.
While city leaders say they are working toward an amicable solution to the developer’s lawsuit that has plagued the $53 million deal to keep the Olympic committee in the city for another 25 years, its motion to dismiss filed in Denver District Court on Thursday is hardly amicable.
“Despite the rhetoric LandCo uses to describe the City Defendant’s actions, this remains a straightforward breach-of-contract case. While LandCo seeks the harbor of federal court by alleging due-process violations, what it really wants is money,” reads a 41-page brief supporting the motion to dismiss, penned by Colorado Springs City Attorney Patricia Kelly. “Like thousands of other major business deals around the country that have faltered in the wake of the recession, this deal too has fallen apart and a court may now need to sort out who is to blame. The fact that the government is one of the three parties, however, does not render this a federal case.”
LandCo in March filed the lawsuit against both the Olympic committee and the city, arguing that the two partners were engaging in “tragic and unsportsmanlike behavior” and were trying to restructure the March 2008 deal.
The deal had LandCo building a new headquarters, upgrading the Olympic Training Center and renovating offices for various Olympic sports. The city was to issue municipal bonds in November 2008 to help pay for the deal and the committee was to sign a long-term lease to stay in the LandCo-built headquarters. The city never sold the bonds and the committee never inked a lease. LandCo sued to make them follow the original plan.
Earlier this week, LandCo dropped the committee from its lawsuit, saying the two had reached an agreement. But the developer kept its allegations against the city.
“When the lawsuit is resolved, the city will comply with the terms of the settlement agreement. Any . . . bond issue required will be made in accordance with the terms of the settlement agreement,” said Colorado Springs Vice Mayor Larry Small.
On Friday morning, an attorney representing LandCo chairman Ray Marshall told a city ethics committee his client had a business relationship with Colorado Springs Mayor Lionel Rivera when LandCo was vying for the Olympic committee contract.
Rivera is vice president of investments at financial services firm UBS, where he handled three accounts for Marshall. Dan May, district attorney for Colorado Springs, is conducting a criminal investigation into Marshall and alleged misuse of investor funds.
