Travel sports destination has bond issues in first year of operation

A nonprofit founded to build a venue for a variety of youth and other participating sports in the Phoenix area stumbled out of the gate in its first year of operation, according to bonds disclosure documents.

Legacy Cares, the 501(c)3 behind the 800-acre Bell Bank Park sports facility in Mesa, Arizona, has failed to make three full monthly payments to the revenue fund that is servicing the $284 million bond debt supports issued in 2020 and 2021 the Arizona Industrial Development Authority, pursuant to a Notice from Trustee UMB Bank, NA, released Thursday on the EMMA Disclosure website of the Municipal Securities Rulemaking Board.

That means there are “events of default,” the statement said.

A rendering of the 320-acre multisport facility at Bell Bank Park in Mesa, Arizona. The trustee of the bonds issued to build the park has defaulted on payments.

Icon architecture group

The debt service was paid in full by the interest payment on July 1st.

Legacy Cares was converted from an Arizona limited liability company to a non-profit corporation in January 2020, according to offering documents, the same year it sold $250.8 million in sales bonds through the Arizona Industrial Development Authority. Another $33 million in debt followed in 2021.

Ziegler was the underwriter of unrated bonds. Gust Rosenfeld, PLC was Bond Counsel.

Except for $7.3 million, all debt is tax-free.

Legacy Cares sets out a mission statement to “Offer athletes and non-athletes of all ages, economic backgrounds and athletic ability levels the opportunity to participate in sport while fostering the joy and camaraderie of teamwork and endurance, key components in athletic competition and lifelong success.”

What that means is a 320-acre venue for youth and amateur sports competitions across multiple sports, one of the larger entries in a growing but competitive market aiming to attract events like large-scale youth soccer and volleyball tournaments.

Bell Bank Park in Mesa, Arizona, expands its offerings with home stadiums for a nearby college’s sports teams, an outdoor concert stage and 41 pickleball courts, highlighted by a 2,500-seat stadium court.

Bell Bank Park, so named as a result of a 10 year old Deal with naming rights with a North Dakota-based bank with branches in the Phoenix area, which was made public in January, consistent with projections it made in its bond offering documents.

His goal: Profit from a growing market for sports travel, especially youth sports travel teams participating in tournaments.

From 2015 to 2019, the last full year before the pandemic, sports travelers grew nearly 6% and spent more than 16% during that period, to more than $45.1 billion, according to 2021 Industry status report published by the trade organization Sports Events & Tourism Association.

“Demand for facilities is exceeding supply of facilities in the Phoenix metropolitan area, particularly in tournament programs,” according to Legacy Cares’ bond offering documents. “Most of the sporting events that are part of Legacy Sports Park’s business model require large facilities with multiple outdoor or indoor courts to allow for simultaneous gameplay on each day of a tournament to ensure all teams have an opportunity to participate and achieve championship status to reach. Any tournament organization must spread its tournament play across many separate facilities.

A look at some of the 41 pickleball courts at Bell Bank Park, a multisport venue facing binding issues.

Bell Bank Park

Legacy Cares wanted to address this with a facility that would combine 24 soccer/lacrosse/soccer fields, 57 indoor volleyball courts, eight adult baseball and softball fields, 16 fast-pitch softball and little league baseball fields, and 19 basketball courts and offers enough venues to accommodate entire tournaments, plus an arcade for the less athletic siblings and a sports bar for mum and dad to drink.

The bid memorandum notes that numerous sports parks have been developed across the country.

“Due to its all-inclusive features, Legacy Sports Park anticipates it will surpass revenue from similar facilities,” the bid reads.

Despite the obstacles caused by the pandemic, Bell Bank Park opened in January 2022 as promised in the offering documents.

And despite the ongoing impact of the pandemic, Bell Bank Park reported that it has achieved that Three million visitor mark before the end of September – fulfillment of an annual forecast specified in the offer documents.

But financial troubles were brewing. Long before Municipal Market Analytics flagged Legacy Cares’ woes in its Oct. 26 “Default Trends” newsletter, investors were voicing concerns, which are reflected in bond disclosure documents posted on EMMA.

A call with investors on June 7 left questions that only the borrowers answered later in writingin some cases not for more than two months.

These disclosures paint a picture of investors concerned about, among other things, insufficient interim disclosure, the number of events booked at the facility, and the financial impact of canceled or postponed events.

On October 5, Legacy Cares issued a statement on EMMA stating that it was exploring possible “compensations, redemptions, open market purchases and/or exchanges” of the bonds.

The original 2020 unrated bonds were rated at yields ranging from 6.25% to 7.836%, at a time when interest rates were much lower than they are today.

Legacy Cares officials did not respond to email or phone requests for comment.

The appeal of youth sports tournaments and spectators has encouraged some issue governments Debt to help build facilities that has didn’t always turn out well.

No governments are on the hook for the Legacy Cares bonds.

Mesa provided $1.5 million in cash incentives to the Arizona Sports and Tourism Authority, according to offering documents for the Legacy Cares bonds.

The trustee hired Bryant Barber of the Lewis Roca Rothgerber Christie firm to help track the events of the late payment, according to disclosure documents.


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