The U.S. Olympic Museum could break ground in the next several weeks after a Colorado Springs redevelopment agency agreed Friday to issue bonds that will provide a crucial piece of funding for the $75 million project.
The action by the city's Urban Renewal Authority was heralded as a milestone by museum and urban renewal officials, who envision the venue as a tourism magnet and a catalyst for the long-sought revitalization of southwest downtown.
"We just made history," said Chairwoman Wynne Palermo, after the authority overwhelmingly approved the bond issue.
The authority expects to receive bond proceeds Wednesday, which will be added to tens of millions of dollars in private donations and commitments raised by museum organizers. With those funding pieces in place, museum officials hope to start excavating their downtown site - on donated land at Sierra Madre Street and Vermijo Avenue - in early May. A formal groundbreaking would follow in the weeks afterward.
Construction should take a little less than two years, meaning the museum could open in early 2019, said Dick Celeste, chairman of the nonprofit U.S. Olympic Museum board and former Colorado College president .
"We become the anchor for that urban renewal district," Celeste said of southwest downtown's redevelopment. "I think it will become an exciting opportunity for the city and not just for the museum."
The museum has been a dream of organizers for years. Their latest proposal calls for a 60,000-square-foot venue - with a hall of fame, theater, exhibition hall and retail space - that would showcase exhibits and displays celebrating the nation's Olympic and Paralympic movements.
Colorado Springs has longtime ties to the Olympics. The U.S. Olympic Committee has been headquartered in the city for nearly 40 years, one of the country's three Olympic Training Centers is here and about two dozen Olympic national governing bodies - amateur sports groups - are based in the Springs.
After having proposed the museum, organizers joined the City for Champions tourism initiative in 2013. City for Champions was proposed that year by local government, civic and business leaders as a series of projects to entice visitors to the area.
In December 2013, the Colorado Economic Development Commission agreed to earmark up to $120.5 million in state sales tax revenues over 30 years to help fund the City for Champions projects. That money - to be captured from retail sales taking place in a large portion of Colorado Springs - was made available under the Regional Tourism Act, which Colorado lawmakers approved to spur tourism in communities around the state.
State officials designated the Urban Renewal Authority as the City for Champions financial entity - making it responsible for the receipt and dispersal of sales tax money for the tourism projects.
Museum officials have been raising money on their own, and now have close to $47 million in cash and pledges; they still need to raise another $2 million of private money, said B.J. Hybl, a member of the Olympic Museum board and its treasurer.
Over the last year, museum officials and authority officials have sought to borrow money to fund the rest of the museum's cost. After months of talks with lenders, Urban Renewal Authority officials reached a deal with a consortium of banks - UMB Bank, whose parent company is based in Kansas City, Mo., and local financial institutions FirstBank and Academy Bank.
Under terms of the deal, the authority will issue $39 million in bonds, which the banks will purchase. State sales tax revenue being funneled to the Springs as part of City for Champions will be the sole source for the bonds' repayment.
Of the $39 million in proceeds, $26.1 million will go to the museum, $8.8 million will help pay for public improvements in southwest downtown and the rest will go into a reserve and to help pay expenses related to the bond issue.
On Friday, the Urban Renewal Authority approved a resolution that authorizes the bond issue. That resolution effectively means the authority and the banks have signed off on a series of financial documents that spell out bond issue terms, how proceeds will be split, a repayment plan and numerous other details. The bonds are scheduled to be paid off by 2027.
Urban Renewal officials and their consultant said the bond issue proved to be extraordinarily complex. It's the first time any community has issued bonds backed by state sales tax revenues made available through Colorado's Regional Tourism Act. As a result, financial institutions had no track record to determine their potential risk, and some banks balked at lending money as a result.
Neither the Urban Renewal Authority nor the city would be on the hook to make up a shortfall, authority officials say.
"We don't have any liability to them (the banks) for the $39 million," said Palermo, the authority's chairwoman. "It all comes out of the (state tax revenue). If there's no (state tax revenue), that's their risk."
Beyond attracting thousands of tourists, the museum's is being counted on as an anchor for a southwest downtown makeover. The city declared about 100 acres southwest of Cascade and Colorado avenues as an urban renewal site in August 2001.
But nearly 16 years later, little change has taken place in the mostly light industrial area other than the addition of the city's America the Beautiful Park.
"There are people around the country, particularly Olympic and Paralympic athletes, folks involved in the national governing bodies and the rest who are tremendously excited about what we're about to birth here, and create not just for neighbors, but for folks across the country" Celeste said. "And I think from around the world, they'll come to see this and participate."
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