An investors conference call by bond trustee UMB Bank provided new details on Legacy Cares, Inc. (Legacy Sports, LLC)’s default at Bell Bank Park in Mesa.
The project is now officially in default, with bond payments not made and contractors not having received payment.
UMB representative Michael Slade said the project has never brought in sufficient revenues to cover payments since the project was completed and opened.
The site is owned by Pacific Proving LLC, leased by non-profit Legacy Cares and operated by for-profit Legacy Sports.
The project was losing, on average, $800K per month, according to Legacy Sports USA CEO Chad Miller in a July investors call. Company officials blamed the pandemic and delays in opening revenue-generating concession and restaurant operations.
The park’s development was financed through bonds from the Arizona Industrial Development Authority, making it cheaper to finance than it would have been through the private capital market and allowing investors to avoid taxes on revenues received. The project is tax-exempt since the bonds were issued by a government entity to a non-profit. Taxpayers are not responsible for the bond costs, but investors could lose their money if the project fails.
Legacy says it plans to ask AIDA to issue new bonds to refinance the project and pay off the approximately $30M owed to contractors.
UMB is working to find a consultant to perform a forensic audit to trace all the funds associated with the park’s development and operation. The bank is also working with contractors and other companies who filed liens to ask them to wait to pursue foreclosure actions in court.
At least 18 companies have liens pending against Legacy Cares. Active liens and foreclosure actions could make refinancing difficult or impossible.
Contractor Wholesale Floors has a lien for $335K and has filed a claim in Maricopa County Superior Court seeking foreclosure and forced sale of the property. Company officials said as of Tuesday they had not been contacted by anyone seeking a hold on the lawsuit. They said they intend to continue pursuing foreclosure.
UMB’s representatives said the largest investors should form a committee to develop a future action plan. (Source)