News5 Exclusive: How the Pueblo baseball deal went wrong and how to fix it

Posted at 6:33 PM, Jul 19, 2018
and last updated 2018-07-19 20:33:22-04

The owner of the minor league Orem Owlz is speaking exclusively with News 5 about the last minute change up that could prevent him from relocating his team to Pueblo. The problem comes down to the land. The City of Pueblo owns two properties on the Riverwalk that have long been identified as sites for hotels that owner Jeff Katofsky agreed to build as part of the deal.

"Out of nowhere yesterday, I learned that the property that we’ve been talking about to build the hotels on all along for really a year and a half was going to be put out for an RFP, which is a Request For Proposal, which is essentially an auction," Katofsky said.

For Katofsky, this is a deal breaker.  For one thing, the bidding process delays construction by at least another 30 days on a project that is already months behind schedule.  It also opens up the possibility that another buyer could outbid him.

"If someone wants to stop this project, it’s really simple for them to outbid us on the land and simply not build it," he explained.

City Manager Sam Azad sent a letter last week to HARP Authority Chairman Seth Clayton explaining that the City Charter requires surplus property be sold to the highest bidder through a sealed bid process. 

When Katofsky heard that the City was planning to take bids for the land, he sent an email Wednesday that read in part, "thanks for all your help and effort in this matter. Based upon the new developments on your end, however, looks like Pueblo has killed the deal."

Urban Renewal Authority Director Jerry Pacheco then sent an email to his board members Wednesday afternoon saying, "It is with disappointment that I have to report that I have received word that the owner of the Orem Owlz, Jeff Katofsky, has declined to move forward with his plans to develop three hotels and will not move his team to Pueblo."

That led to widespread speculation in the community that Katofsky had backed out of the deal. However, Pueblo County Public Information Officer Adam Uhernik sent out a press release Wednesday night that said Commissioner Sal Pace spoke with Katofsky several times and that Katofsky’s position remains the same. 

"I never read that email to mean that the project is done," Pace is quoted in the email.

Katofsky then called News 5 and confirmed that he was not backing out. The hotels are a critical part of the baseball development deal. Sales and property taxes collected from them are expected to repay the $25 million loan the County plans to borrow in order to finance stadium construction.

"It’s always been a 3-prong piece but then all of sudden for whatever reason, the City and HARP decided to put the land in flux which takes a card out of the stack and the whole stack falls," Katofsky said.

He also stressed that there currently aren’t enough hotel rooms in downtown Pueblo to house visiting minor league teams, let alone the thousands of kids and parents he plans to bring to Pueblo for summer youth baseball tournaments.

"Those programs need literally tens of thousands of room nights over a short period of time," Katofsky said. "You have 250 or 270 in the downtown, you can’t even support the Owlz, let alone the youth program," he said. 

Katofsky wants to open at least two of the three hotels by 2020, the year the Owlz would play their first season in Pueblo. The construction timeline keeps shrinking with these delays. Urban Renewal Director Pacheco put it bluntly in an interview with News 5’s Caiti Blase Wednesday night.

"To be brutally honest the decision needs to be made very quickly," Pacheco said.

Given the language of the City Charter, it may seem like Pueblo’s hands are tied. They’re not.  Council can pass a resolution that transfers the properties to HARP which has the power to sell directly to Katofsky. In fact, they did that exact thing back in 2007 for another developer who built the Angelo’s Pizza building.

City manager Azad said in his letter that he will ask the Council to make that change in property designation, even though he prefers the bid process.