Future Legends receiver notes buildings in disrepair, multiple unpaid bills, money being diverted

WINDSOR — The state of the Future Legends Sports Complex in Windsor is in general mismanagement, neglect and disrepair, with a long list of unpaid bills — including insurance on the facility that continues to host multiple child athletes daily, according to the court-appointed receiver of the property.

Michael Staheli, of Cordes & Co. in Denver, appointed to protect the interests of U.S. Eagle Federal Credit Union, which is owed more than $45 million from Future Legends, delivered his first report of the conditions of the Future Legends properties that he was appointed to manage: the dome and clubhouse, the unfinished arena and unfinished dormitories. But his first month on the job has apparently been replete with demands for unpaid bills from vendors, suppliers and even Weld County government for unpaid taxes.

In addition, the receiver reported late Friday that the dome’s income is being diverted to other Future Legends ventures in an attempt to block the receiver’s management of the property and its income.

“After the receiver’s appointment, he learned that a portion of the receivership property was subject to a lease agreement between Future Legends and Future Legends 5, LLC,” according to an emergency motion filed late Friday requesting that the lease be terminated. “The lease agreement covers the dome property, a revenue-producing facility. The receiver has determined that the lease agreement diverts revenue and income from receivership estate to an affiliated entity with no corresponding benefit. 

“In addition, the receiver has learned that the property was used to host youth and adult sports activities without liability or property insurance in place and that significant utility bills are unpaid. The receiver requests emergency consideration to allow the receiver to take over operations of the dome property to preserve the income for the benefit and preservation of the value of the receivership estate.”

Future Legends owner Jeff Katofsky responded to some of the allegations via email responses over the weekend: 

“The lease was created prior to litigation between the parties and is a standard real estate tool. As for the receiver’s documents, all of which were filed just before the close of business on Friday of a holiday weekend (this is the second time they have done this), we intend to respond with admissible evidence and provable facts, rather than what the receiver did using unsubstantiated allegations based upon rumor, innuendo, hearsay and a complete lack of actual evidence.”

Weld District Court Judge Shannon Lyons ordered an emergency hearing on the matter to be held on Tuesday via an internet hearing.

The first receiver report states that the lease agreement between Future Legends and Future Legends 5 “appears to have been created and entered into solely as an obstacle to the receiver’s ability to obtain possession of the dome property and access to its rents and revenues. Future Legends is the owner of the dome property, yet it acts as ‘tenant’ under the lease agreement. Prior to entering into the lease agreement, Future Legends was already operating the dome property. It was Future Legends, not Future 5, who entered into contracts with parties seeking to utilize the dome property. However, as of August 1, 2024, Future Legends is obligated to pay Future 5 $200,000/year for access, to which it already had and was already entitled. The lease agreement is thus burdensome in that it diverts revenue from the receivership estate with no benefit in return.”

The receiver noted that the property he has been directed to manage is in a general state of neglect with overgrown weeds and piles of materials strewn around the property. Several accounts to maintain the dome alone have not been paid, including electricity, gas, fire alarm system monitoring and its internet, which was disconnected for nonpayment, making the dome systems monitoring programs inoperable. The rent the dome must pay in its new lease is not even enough to pay the dome’s annual property taxes of more than $292,000 or the annual property insurance premium of $157,332.50, the receiver’s report notes. 

“Since its appointment, the receiver has received demands for payment on outstanding bills that are not within the authority of the receivership, including the following:  

• $1,183,887.45 in delinquent 2023 property taxes payable to Weld County;  
• $124,872.98 owed to FNBO Bank on overdrawn bank accounts and business loans related to trailers used by the minor league team participants and officiators;  
• Approximately $82,000 owed to SpringHill Suites for hotel stays;  
• Over $60,000 in non-potable water fees and $16,000 in stormwater fees due to the City of Windsor;  
• Approximately $140,000 owed to Checkmark Cleaning for janitorial services in the Dome for the past 18 months;  
• Undisclosed amounts owing to the Pioneer Baseball League and United Soccer League;
• (and) $19,655.00 owed to Comcast Business.”

The receiver has secured a “protective advance” to open a new bank account for the property, in which he notes several things that need to be done to secure the properties, including weather-proofing the unfinished dormitories, ensuring weed control and snow removal during the winter, and bringing materials in that are being stored elsewhere, such as bunk beds being stored at a separate facility at a cost of $4,500 a month. The receiver reports he has created 20,000 square feet of storage on the property.

To finish the unfinished portions of the buildings, the receiver notes that millions are past due in work to-date, but it will take millions more to finish construction.

“Based on information provided to the receiver by Jaco (Jaco General Contractor), there is approximately $668,000 owed to Jaco and its subcontractors in unpaid work (on the dormitories) and retainage and approximately $3,250,000 is required to complete the building, plus remobilization costs. The property is insured by its Builders Risk policy through mid-January 2025. The receiver was notified by Fort Collins Mobile that a semi-truck load of vertical terminal air conditioner units for each dorm room were being held in their yard and that storage costs of less than $2,000 hadn’t been paid for a few months. The receiver has satisfied the obligation. The receiver was contacted by Johnson Storage with a notice that hundreds of bunk beds and mattresses were being held in storage at their facility and that $113,000 was outstanding on invoices dating back to 2022. The Receiver is evaluating other storage options,” the receiver report states.

The dome, as well, owes money, the receiver reported. “In most cases, vendors and service providers stopped providing service pending the receipt of payment for services already rendered. Where possible, Future Legends hired replacement vendors with assurances that payment will be coming. Of all the service providers that the receiver has since engaged with, all are owed money. 

“Most troubling is that Future Legends allowed its property insurance and general liability insurance coverage to be terminated for non-payment, while continuing to host daily sporting events in the dome, attended by hundreds of children, teenager(s) and adult participants and spectators,” the receiver reported.

There is a clubhouse attached to the dome, which still needs to be finished. Jaco representatives told the receiver that $938,000 is owed for work on the clubhouse, and it will cost another $350,000 to finish it. 

The receiver reports that he is working with the Town of Windsor to extend certificates of occupancy permits, which they had extended a third time until Oct. 31. “Windsor is willing to entertain the extension of the TCO for the dome provided the receiver demonstrates an ability to address certain concerns related to the dome,” the receiver reported.

The receiver noted that large amounts of valuable materials for the arena are unsecured throughout the property. “Many valuable construction materials, including HVAC equipment, plumbing fixtures, garage doors, wire shelving, and hot water heaters have been stored in the open rooms of this building. Large quantities of concrete masonry blocks, insulation panels, light fixtures and poles, and pipes for the Stadium are staged in the parking lot to the south of the Stadium without any apparent security.”Finally, the receiver reports that he is working to secure new management for the dome. “All of the scenarios being considered result in operating losses and the need for funds during the coming six to nine months. The receiver is working to finalize management terms and an operating budget that would be presented to U.S. Eagle Credit Union for approval and a financial commitment to support the continued operation during the coming months,” the receiver reported.

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