For Dan Schnepf, March 10 was the worst day of the past five years.
Schnepf, founder of Matrix Design Group and Blue and Silver Development, the public-private development partnership that is spearheading the U.S. Air Force Academy Gateway Visitor Center, had secured all of the necessary approvals to get started on the project.
The visitor center development, one of the four City for Champions projects, includes the $86 million visitor center, a 375-room hotel and convention center, a 180,000-square-foot office building and a retail sector that will provide food service, an iFly indoor skydiving facility and another small office component.
The individual projects had been designed and were shovel-
ready; guaranteed-maximum-price agreements had been written with GE Johnson Construction to build the visitor center and SummitSmith Development, which was to build the hotel and convention center for Provident Resources Group.
“We recently learned that The MITRE Corp. [a large, nonprofit company that does research and development for the federal government] is going to take the entire office building,” Schnepf said.
“We were ready to break ground on April 1.”
With plans and permissions in place, Schnepf sought bond financing for the project on Feb. 6.
“We had six different bond issuances to generate the $293 million that was required” in addition to the City for Champions funding through the state Regional Tourism Act and other private investment, Schnepf said.
“World Bank of Canada was the underwriter, and we had over a billion dollars of subscription” from major bondholders, he said. “Just about everybody who’s in the bond purchasing arena was buying these bonds.”
Among the subscribers who had verbally committed to the project were Vanguard, Silver Crest Investment Holdings, Invesco and Whitehaven Asset Management.
“We were in final bond pricing on the 10th of March, when the entire market collapsed [due to the COVID-19 pandemic],” he said. “All the bond buyers pulled their requests.”
Schnepf, a 1983 Air Force Academy graduate, has been focused on this project for the past five years and sees it as the capstone of his career. He was not to be deterred.
Under Section 4003 of the CARES Act, he found he could pursue an interim bridge loan until the bond market comes back. The section addresses projects of national importance or that concern national security.
So on April 17, he applied for a five-year, $293 million loan from the U.S. Treasury.
“Over the next five years, we would have to go back to the bond market and sell the bonds” to pay off the loan, plus about 6.3 percent interest.
“The best estimate is that the municipal bond market could come back as early as this fall, or it could take a year … or maybe two years,” Schnepf said.
He is waiting to hear back from Treasury, and he’s hopeful because public officials including Mayor John Suthers, Senators Michael Bennet and Cory Gardner, Rep. Doug Lamborn and four other U.S. senators wrote letters supporting the project.
Schnepf expects to learn within the next two to three weeks if the Treasury Department wants to proceed and what terms and conditions would have to be met to satisfy the provisions of the CARES Act.
“Were it not for the COVID-19 disaster, the project would have been already well underway,” he said.
The funding snafu has added about three months to the timeline for the project, which was supposed to be completed by June 2023.
If Schnepf can close the loan by the end of this June, the project could be finished by mid-summer 2023, or perhaps sooner, depending on weather and other circumstances.
When COVID-19 interrupted the bond process, it also jeopardized the $13.25 million in City for Champions funding that was allocated for the visitor center. The City for Champions projects are funded in part by $120.5 million in sales tax increment financing through the Regional Tourism Act and in part by private funding and other sources.
Schnepf met with the board of the state Office of Economic Development and International Trade that administers Tourism Act funds.
“They have extended the funding period until Dec. 31, 2020,” he said. “So we need to get this loan in place or the bonds placed by Dec. 31, or we’ll have to either ask for another extension or we’ll have to suffer the loss of the money.”
The most expensive and complex of the City for Champions projects, the Gateway center is projected to create 1,500 construction-related jobs and 1,100-1,200 permanent jobs.
According to a study by Summit Economics, which developed those projections, the project also is expected to generate $2.6 billion in economic input to the community over the next 25 years.
“That project’s just too important to the community and to the Air Force Academy,” said Bob Cope, the city’s economic development manager, who wrote the bond documents. “We’ve got to find a way to make that happen, and I’m confident that we will.”
OLYMPIC & PARALYMPIC MUSEUM
The COVID-19 pandemic has most drastically affected the Gateway visitor center project, but it has also impacted plans for opening the U.S. Olympic & Paralympic Museum and Hall of Fame.
Construction of the $75 million, 60,000-square-foot museum is nearly complete.
“We received our temporary certificate of occupancy about two weeks ago,” said Peter Maiurro, chief communications and business affairs officer. “At this stage, we are working with our exhibit fabrication team to finish up all of the technology and artifact installation.”
The original plan was to open the museum to the public around Memorial Day.
“Obviously that won’t be happening. We don’t yet have a new scheduled opening date,” Maiurro said.
“There are just still so many factors and variables outside of our control,” he said. “We’re going to continue to push to be open sometime this summer, but we will only open when we have received guidance from county and state health officials to ensure safety for our staff and for all of our visitors.”
Maiurro expects the delayed opening will affect the museum’s budget but isn’t sure what that impact will be.
“We’re in the process of re-evaluating our attendance models and thinking about how we can still ensure a safe and positive guest experience while generating the revenue that we need to operate,” he said.
At this point, projected admission prices haven’t changed. Full-price adult admission will be $24.95, with discounts for youths, seniors, military and first responders.
The museum will continue to pursue donations and a membership program that will generate revenue. Income also will be derived from retail sales and special events.
The museum has several indoor and outdoor special events spaces and had booked “quite a few” events, Maiurro said.
“After the current COVID situation, many of those have been canceled or are being rescheduled for later in the year,” he said.
The museum has not had to lay off or furlough any employees, because a big push of hiring guest service staff had not begun.
“We hope that as this situation begins to resolve itself, we’ll have the opportunity to welcome visitors into the museum,” he said.
SPORTS MEDICINE CENTER
Construction of the William J. Hybl Sports Medicine & Performance Center is 95 percent complete and on track to be finished on time at the end of June, said Chris Valentine, UCCS assistant vice chancellor of marketing and communications.
The $40 million, 104,000-square-foot facility is a partnership between Centura Health, which will occupy the two lower floors, and UCCS, which will have educational and research space on the top two floors.
It is expected to become a nationally recognized leader in caring for injured athletes, Paralympians, military veterans and injured first responders, and in research.
The original goal was to complete the lower floors in May to allow Penrose-St. Francis Health Services to open its sports medicine and performance clinics.
The coronavirus changed that, however, and the opening has been pushed back to August — the projected opening date for the entire building.
One coronavirus-related delay involves built-in furniture such as nurse’s stations.
“That’s all prefabricated in a factory; that factory had to close down due to the virus,” Valentine said. “So all that stuff has been delayed a little bit, which pushed back that early opening.”
The picture for the labs and classrooms — which will be used by an estimated 1,400 students a day — isn’t clear, Valentine said.
“Nobody has a crystal ball to see what September looks like,” Valentine said, “but our goal is to have campus classes within public health guidelines.”
“The conversations we’re having right now are: If we are able to come back to campus, what classes need to be on campus?” he said. “If there is an anatomy lab that you need to have …, you really can’t do that sitting at home; you have to come in and do that. But if there’s a lecture class on the latest technology, you can do that remotely with videoconferencing and things like that.”
STADIUM AND ARENA
The Downtown Stadium, which will be home base to the Switchbacks professional soccer team, and the Edward J. Robson Arena at Colorado College, home ice of Tiger Hockey, together comprise the fourth component of the City for Champions suite.
Both venues are under construction, are on schedule and have been minimally affected by the pandemic.
The 10,000-seat Downtown Stadium is about 25 percent complete, said Nick Ragain, president of the Colorado Springs Switchbacks Football Club.
The final steel beam was placed May 15 during a topping-off ceremony hosted by the Switchbacks.
“The superstructure has gone up really fast,” Ragain said.
The Switchbacks are targeting March 1, 2021, as the date for occupying the building.
“It’s a relatively soft target,” Ragain said, that could be altered by construction contingencies and other factors.
Much of the equipment, from kitchen tables and chairs to bleachers, TVs, field speakers and data infrastructure, have already been ordered.
“There’s always the chance that there could be delays, but from what we’re hearing right now, we don’t anticipate any significant impact,” he said.
Contractor GE Johnson Construction “has been great about increasing the level of safety and cleanliness that they provide on the site,” he said. “So there have been some additional costs, but they’re not substantial.”
Ground was broken Feb. 15 for the 3,400-seat Robson arena, which is anticipated to be complete by August 2021 and to open in October 2021 to host both on- and off-ice events.
Colorado College has added a multilevel parking garage with 324 spaces to the construction plans. The site, at the corner of Cache La Poudre and Tejon streets, will also house a campus support building that will contain a restaurant, pub, bookstore and mailroom, said Rick Greene, senior project manager.
Construction is about 9 percent complete, Greene said.
The pandemic has had very minimal impact on the project, causing extra meetings, but “it really doesn’t affect the field that much,” he said.
Suthers said the city is fortunate that four of the five City for Champions projects were already funded and under construction when the COVID-19 crisis struck.
“The momentum that they bring to our city has always been exciting, but even more so now, as we look forward to a recovery in our economy and specifically in our tourism industry,” he said. “Having these catalytic economic drivers nearing completion, and in some cases nearing opening, may well be very powerful in driving our recovery.”