The City of Colorado Springs today announced it completed a competitive procurement process and selected GE Johnson Construction Company to complete the $2.7 million interior finish of the downtown building at 27 N. Tejon St. that will become headquarters for the United States Olympic Committee (USOC).

            The evaluation committee, including representatives from the City and USOC, determined the GE Johnson proposal was the best value.  A total of 12 companies submitted proposals.  GE Johnson is based in Colorado Springs.

            Improvements to the top five floors of the building will begin immediately.  The project is scheduled for completion in March 2010 to enable occupancy by the USOC by March 31, 2010.  The basement and first floor are being retained by LandCo Equity Partners, LLC (LandCo).

COPs used to finance USOC project

            The $21.749 million total acquisition and improvement costs were financed using certificates of participation (COP), a financing instrument that allows a public entity to lease facilities until debt is retired.

            A total of $32.48 million of COPs were sold on October 13 for the USOC projects.  Of that total, $21.749 was used for the new USOC Headquarters Building at 27 S. Tejon St. with $9.5 million to be used for athlete dormitories and other facilities at the Olympic Training Center.  The balance was used for issuance expenses and the purchase of insurance for the COPs.

Proceeds also help fund NGB and OTC improvements

            The sale of the COPs allows the City to help fund a portion of the planned $16.0 million of Olympic Training Center (OTC) improvements.  In addition to the $9.5 million of COP proceeds, a challenge grant of $1.5 million provided by the El Pomar Foundation, and a $500,000 contribution by the State Economic Development Commission, fund raising is ongoing to meet a $1.5 million requirement by the middle of November.  An additional $3 million is scheduled to be raised by the community by September 2011, also to fund the OTC improvements.

USOC Headquarters contractor chosen

            In addition, a former Colorado Springs Utilities Gas Department building adjacent to America the Beautiful Park has been converted for use by National Governing Bodies (NGBs), including USA Karate, Weightlifting, Judo, Taekwondo and Badminton.  Occupancy of that building is scheduled for December 31, 2009.

Delay in issuing COPs helps secure more favorable terms

            The Colorado Springs Public Facilities Authority originally planned to issue COPs in November 2008 for the USOC project.   That became impossible because of the collapse of the municipal bond market in October of that year.   Municipal bond market conditions have improved immensely since the fall of 2008 with interest rates having dropped to near 40-year lows early last week.  The Colorado Springs Public Facilities authority was fortunate to have been able to take advantage of that remarkable dip in interest rates last week when it sold its $31.37 million of COPs.  That, combined with the Authority's ability to obtain insurance for the COPs, pushed down the average interest rate on the COPs to just 4.62 percent.  The first year lease-purchase payment, to be borne by the City, will be $1.539 million which is appreciably below the $1.8 million anticipated when the USOC deal was first inked in April of 2008.  That 2010 payment is also about $661,000 below the $2.2 million included in the Preliminary 2010 City Budget.   The savings over the 30-year life of the COPs will be over $9 million.

Complex agreement ensures USOC's continued presence

            The issuance of the COPs is one step in a complex, multi-party agreement in which the City's Public Facilities Authority (PFA) issued COPs and purchased the Headquarters Building from LandCo.

            The PFA will now lease the top five floors to the USOC for $1 a year.

            Investment in the USOC projects preserves an estimated 3,500 jobs in Colorado Springs and approximately $4 million annually in sales tax revenue that supports general fund operations.