Bond refinancing for troubled Arizona sports venue is spurned
2 min read
Problems are piling up for the nonprofit developer of a massive Arizona participant sports venue as its plan to refinance defaulted bonds was rejected by bondholders.
In because Legacy Cares failed to make scheduled monthly payments toward the revenue fund that supports debt service on the venue, built to host youth and amateur competitions in sports including soccer, basketball, volleyball and pickleball.
A bond payment default occurred in January when only $2.68 million was available in the bond fund to make a $10.3 million interest payment.
The nonprofit developer also faces mechanic’s lien claims from contractors who say they are owed for their work building Bell Bank Park.
Mechanic’s lien plaintiffs, who sued Legacy Cares in state court, agreed last year to stay proceedings in anticipation of a bond refinancing, but the stay has expired and claimants have not agreed to a further stay, according to the latest disclosure notice.
The 2023 budget of Legacy Sports, the for-profit manager of the park, remains up in the air.
“The borrower’s board has elected not to approve the budget as presented, but to respond with questions on the budget,” the notice said.” At this time, this remains an open item.”
It also said the bond trustee, pursuant to bondholder direction, agreed to transfer all the money in the capitalized interest fund to the operating reserve fund to pay expenses for Legacy Cares, the trustee, and for operating facilities.
The new notice also disclosed a March 2021 lawsuit filed by Icing Investment Holdings that had been referred to binding arbitration. The plaintiff claims among other things that Legacy Cares breached an “advisory agreement” by failing to pay a fee due to Icing under the agreement, the disclosure said.
Icing prevailed on two of its claims in December, including breach of contract, with the arbitrator, who set the total due to Icing at $2.4 million as of Jan. 30, the notice said.
