Phoenix Swim Club Stays Alive; AIM Bid to Sidestep Agreement is Thwarted -- September 10, 2001
By Phillip Whitten
PHOENIX, Sept. 10. THE celebrated Phoenix Swim Club won a crucial victory in Bankruptcy Court today when an agreement was reached between the Phoenix Swim Foundation (PSF) and Athletes International Ministries (AIM), which owns the club. The agreement will keep the club operating at least until November 15.
The Phoenix Swim Club was one of the most successful teams in the world at last year's Olympic Games, accounting for eight medals*:
Gary Hall, Jr., won two gold (50 free, 400 medley relay), silver (400 free relay) and a bronze (100 free);
Anthony Ervin won a gold (50 free) and a silver (400 freestyle relay); and
Klete Keller won a silver (800 freestyle relay) and bronze (400 freestyle).
In fact, only five countries produced more Olympic medals than the Phoenix Swim Club in 2000.
Despite PSC's storied history, AIM, which bought the club and its palm-fringed, 10-acre facility in Phoenix in November 1999 for $1.15 million, has been attempting for the past year to sell the property to a developer for a huge profit. Independent analysts estimate the property's worth at $5 million or more.
What has prevented them from doing so was a management agreement AIM signed, specifying that the organization would maintain the facility as a "world-class swimming facility" for 20 years.
Over the past year, AIM allegedly has abrogated the agreement, according to PSF spokespersons. For example:
* Last December, just before Christmas, AIM cut the salaries of all but the head coach, Pierre LaFonatine, in half -- interesting timing for a purported Christian organization;
* AIM kicked Kiss-The-Sky and Rehab-Plus off the property, losing valuable income, then complained the facility wasn't bringing in enough money;
* AIM got rid of PSC's weight-training equipment;
* AIM failed to maintain the property as a world-class facility, neglecting needed maintenance;
* AIM failed to live up to the management agreement, which stipulated it would build a shallow indoor teaching pool and put $1 million into upgrading the facility.
AIM also has ignored warnings from Phoenix municipal authorities to comply with zoning and other regulations, "hoping," in the words of one PSC parent, "to be found in violation and have the club lose its special zoning permit. Then AIM could say they couldn't comply with the Management Agreement and they could sell it (the PSC property) for Big Bucks. It all comes down to money," she said.
Indeed, profit appears to be AIM's primary motive, despite protestations to the contrary by Jay Thorne, AIM spokesman.
At best, however, religious principle, ranks a distant second to profit
When AIM's CFO, Joseph Villasenor, who allegedly has made numerous misleading statements to both PSF members and the local media, was asked by a reporter whether "Thou shalt not bear false witness" meant anything to him, he ignored the question. When the questioner persisted, an AIM attorney said: "Oh, come on. Don't give us that crap!"
Last Friday, at 4:00 pm, AIM unexpectedly declared bankruptcy apparently deciding, according to one attorney observing today's proceedings, "to use Bankruptcy Court to void a contract." The timing was bizarre, as AIM was in negotiations with potential buyers for the club who reportedly had offered over $2 million.
Villasenor reportedly began having the club's 25-meter pool drained, called a locksmith to have locks on all the gates and doors changed, and brought in police officers to escort head coach La Fontaine and the rest of the coaching staff from the facility without allowing them even to take their personal belongings. Then, according to witnesses, he pulled down the "Phoenix Swim Club" sign and tore it to pieces, then had all training equipment removed from the deck.
PSC swimmers, parents and Masters picketed the facility over the weekend.
This morning, the PSF went to Bankruptcy Court seeking a temporary injunction that would prevent AIM from shutting the facility down. The case was heard by Judge Randolph Haines.
Attorneys Taylor Ashworth (PSF) and Jordan Kroop (AIM) represented the two parties. Attorney Colin Gaffney represented the six Arizona high schools that train and compete at the Phoenix Swim Club. The Arizona high school season runs from August to November.
During the attorneys' statements and testimony from PSF President, Dr. Gary Hall, Judge Haines asked frequent questions. It appeared to this observer that the judge was sympathetic with the PSF's contention that the property should be maintained as a swimming facility (rather, say, than as a site for condos).
Apparently, the two chief lawyers felt similarly, as they met during lunch and struck an agreement that will keep the facility open through November 15. The PSF will contribute $75,000 to the facility's upkeep, and the two parties will continue to negotiate.
Reportedly, an investor who plans to keep the facility as a world-class swim club has offered $2.1 million -- which would give AIM an 80% return on its investment over two years. However, another investor, interested in "developing" the property has offered $5 million.
We will update you on this battle regularly until it is resolved.
*NOTE: Other PSC swimmers competing in the 2000 Olympics included Bart Kizierowski (Poland), Gordan Kozulj (Croatia) and Julio Santos (Ecuador).
The club was also home for Olympic pole vaulting champion Nick Hysong, who competed for the Kiss-The-Sky Pole Vaulting club, based at the Phoenix Swim Club. Melissa Mueller, also from Kiss-the-Sky, was a member of the US track and field team in women's pole vaulting.
Dan O'Brien, 1996 Olympic decathalon champion, also trained there regularly and was treated for injuries at Rehab-Plus, a superb rehab facility attached to the club.
This year, at the World Swimming Championships, PSC's Anthony Ervin won two more individual gold medals, taking both the 50 and 100 meter freestyle.