Loan Sought for Olympic Center Snags : Finances: A state legislative committee wants more information on $15-million loan for training center in Chula Vista that lacks collateral.

Bothered by the unusual absence of collateral, members of a key legislative budget committee Thursday balked at approving a $15-million unsecured loan to a San Diego-based foundation hoping to build a year-round Olympic training center in Chula Vista.

And, while the six-member budget conference committee requested more information about the proposed transaction, some members of the panel predicted that questions about the collateral could imperil the loan request.

“Certainly, it is not something that can easily be passed,” Assemblywoman Maxine Waters (D-Los Angeles) said during a break in the budget discussions. “It falls in the area of being in trouble.”

Added Sen. John Seymour (R-Anaheim), also a member of the conference committee: “If there’s no collateral, there should be no deal. Any deal without collateral is a bad deal.”

The state loan is to be paid in $5-million installments over the next three years to the San Diego National Sports Training Foundation, a nonprofit group founded by former San Diego City Councilwoman Gloria McColl and developer Ernie Hahn. Amid much fanfare last weekend, the foundation broke ground for a proposed $60-million, state-of-the-art training center supporters say will be a tourist magnet on the western shore of Lower Otay Lake Reservoir in Chula Vista.

The loan was mandated last year by a controversial law that provided for the $15 million to be paid back to the state’s general fund through the sale of specialized Olympic training-center license plates.

Nagging doubts about the reliability of those sales caused Gov. George Deukmejian to require the foundation to guarantee the loan as an extra precaution before he signed the bill requiring the loan.

The Times revealed last week that the final terms of the loan, as negotiated by the Department of Commerce and approved last week, fail to require the foundation to set aside assets or financial reserves to back up its written promise to pay off the balance of the loan in 20 years.

And a high-ranking Commerce Department administrator acknowledged to The Times that the “very unusual” arrangement could mean that the state would be out its money if the foundation changes its mind or folds before the loan comes due in 20 years.

Hahn and foundation executive vice president David Neilsen both have maintained that the group is committed to making sure the state is repaid. Chances that the nonprofit foundation will default are “very, very remote,” said Hahn.

However, legislators on the six-person budget conference committee expressed doubts Thursday about the propriety of the loan and gave indications that it might not pass muster, especially during a time when lawmakers are scrambling to cut social programs to make up for a projected $3.6-billion shortfall in next year’s budget.

The panel, consisting of three members each from the Assembly and Senate, is charged with the crucial task of working out the differences in budget proposals between the two chambers of the Legislature.

When the subject of the Olympic training center loan came up, both Waters and Assemblyman John Vasconcellos (D-Santa Clara), chairman of the powerful Assembly Ways and Means Committee, voiced opposition and held the item over for further explanation about the lack of collateral.

Although it is a procedural step, the move by the two Assembly members bodes ill for the loan. Since there are only six members on the panel, rejection by any two members from either the Assembly or the Senate spells almost certain doom for any budget proposal.

“I think this bears more discussion,” Waters said during the break. “I think it looks suspicious. Not good.

“If they don’t have collateral, it would be outrageous to lend them money,” she said. “No financial institution would operate this way. I don’t know why they aren’t getting private financing. It is a private, nonprofit organization.”

Neilsen said Thursday he didn’t know how the foundation would respond to the questions about the loan by legislators. “It’s still to be discussed further in conference committee and we’re hoping for the best,” he said.