Sport Complex for Olympians to Secure Loan : Finance: State would take over training site if foundation failed to repay $15 million in public funds within 20 years.

The state would become owner of the proposed Olympic Training Center in Chula Vista if the nonprofit foundation now building the sports complex defaults on its controversial $15-million state loan, according to a collateral agreement under negotiation.

David Nielsen, executive vice president for the San Diego National Sports Training Foundation, said last week that the group has offered “in concept” to secure the public loan by giving the state of California a first trust deed on the 150-acre facility scheduled to be built on the western shore of the Lower Otay Reservoir.

“We’re still negotiating with the (state) Department of Commerce, but we’re proposing to put the land up as security,” Nielsen said. “We’re still talking concepts, but in the end the state would receive a trust deed.”

The deed would allow the state to take over the year-round training complex from the United States Olympic Committee if the San Diego-based foundation failed to repay a $15-million simple-interest loan of public money within 20 years, Nielsen said.

“It looks as if the position of the state would be well-secured,” he said.

The public loan is intended to supplement a private pledge drive that will allow the foundation to build a state-of-the-art, year-round training center to help prepare athletes for Olympic competition. Plans for the first phase of the complex include 57,000 square feet of gymnasium space, four soccer fields, 12 tennis courts, athletic fields and lodging for 300 competitors.

So far, foundation officials say they’ve received more than $22.9 million in private cash pledges and an estimated $20 million in land to build the facility, which will be worth as much as $70 million when it is completed in early 1993--too late to help with the 1992 summer games in Barcelona, Spain.

As originally proposed, the $15-million state loan was to be repaid through the sale of Olympic Training Center license plates, which cost $134 a pair. But critics have scoffed at the plan as unrealistic, and a Department of Motor Vehicles report has estimated that it would take 142 years to sell enough of the tags to make $15 million.

Worried by the criticism, Gov. George Deukmejian agreed to approve the transaction in 1989 only if the foundation promised to guarantee the loan.

Despite that stipulation by Deukmejian, commerce officials subsequently worked out details for a loan that neglected to provide for collateral, The Times reported last summer. Commerce officials admitted the loan agreement could result in the state losing all its money if the foundation went bankrupt or simply refused to pay the obligation.

Commerce officials told The Times that they ignored that collateral requirement because they trusted the intention of foundation officials, who include shopping center magnate Ernest Hahn and other San Diego civic and business leaders.

But the disclosure of no collateral angered several lawmakers, especially at a time when they were forced to make deep cuts in programs for schools, the poor and the disadvantaged because of a $3.6-billion budget shortfall.

The furor sent commerce and foundation officials back to the drawing board, and Nielsen said Tuesday that the San Diego group has decided to offer a first trust deed to the sports complex as collateral for the loan.

Nielsen said the foundation is now trying to persuade the United States Olympic Committee to approve the collateral agreement. The U.S. Olympic Committee would own the complex outright once it is completed.

“The Olympic Committee will have to give its consent, and we are discussing this” with committee members, said Nielsen. “Our agreement with the Olympic Committee anticipates this possibility.”

Nielsen and commerce officials say the collateral agreement should be signed before the foundation receives its first $5-million installment of the loan in January.

Meanwhile, the foundation has filed its latest yearly financial disclosure statement, showing that it was $266,851 in debt as of April 30. The report, filed earlier this month with the state, also shows that the foundation has received $22.9 million in cash pledges that will be collected in the future.

Nielsen said the $266,851 operating deficit has since been erased by a $5-million donation by Arco oil in October. The money also helped the group pay off its $2.9-million debt to Wells Fargo Bank.

The report also shows that the foundation has paid nearly $1.3 million for a non-competitive contract with the San Diego architectural firm of Tucker, Sadler & Associates to design the training center. One of the principals of the firm, Harold Sadler, has served as a trustee of the foundation.

Nielsen said the foundation decided to hire Sadler’s firm because his work with the group has allowed him to become an expert on the design of Olympic training facilities.

“Based on hundreds of volunteer hours that he has put in, he has become the expert on Olympic training centers at his expense,” said Nielsen. “We negotiated and came up with a fair price.”

Of the $1.3 million paid to Sadler’s firm, it will keep $170,000 and pass the rest on to subcontractors working on the design, Nielsen said.

Grading is expected to begin on the training center site in January, he added.

Nielsen also said the foundation will soon launch an advertising drive to promote sales of the special license plates, which became available for purchase in February.

So far, only 177 sets have been purchased, said DMV spokesman Bill Gengler. “Sales are not too brisk,” he said this week.