The collapse of two well-funded heavyweights in Colorado outdoor recreation realm

Two prominent and well-funded players in Colorado’s outdoor recreation industry have collapsed.

The Pro’s Closet in Louisville — which has sold tens of thousands of used bikes since its founding in 2006 — has closed after collecting nearly $100 million in funding in the past decade and Future Legends, a developer with more than $50 million in debt after launching a 118-acre sports complex in Windsor, has filed for bankruptcy protection in U.S. District Court in Nevada.

California-based Future Legends 5 LLC’s Oct. 14 bankruptcy filing cites 20 creditors — contractors who helped build and service the sports complex  — who say they are owed $14.9 million for unpaid work. This week, as the company faces angry contractors and lenders in dozens of lawsuits, the Town of Windsor said it would not renew temporary certificates of occupancy for existing buildings, prompting the company to sue the town in Nevada federal court. 

The Future Legends complex broke ground in 2019 with a plan to host two stadiums for minor league baseball and soccer teams, a multisport indoor dome, 10 baseball fields and 12 soccer pitches, two hotels, retail space and a 900-bed dormitory for as many as 64 visiting teams. The project is 10% completed and hosted 700,000 visitors in 2023 and generated $8 million in revenue, according to the company’s bankruptcy filing. The complex employs 200 people and has plans to employ 600 when fully built. 

The project is divided into seven ownership groups and the bankruptcy filing is for the owner of the indoor dome and attached two-story bar and restaurant on 5 acres. 

The owners of Future Legends are involved in many lawsuits and liens. In September, a Weld County District Court judge placed parts of the struggling sports complex in receivership after the owners failed to make payments on six loans totaling $47 million. U.S. Eagle Federal Credit Union in Albuquerque in August filed documents to foreclose on the six loans for construction of the indoor dome, dorms and stadium, all of which are partially completed. 

The New Mexico bank in late October asked the Nevada federal bankruptcy court to transfer the case from Weld County. 

U.S. Eagle Federal Credit union in that Oct. 22 filing said it petitioned the Weld County court for a state court receiver to take control of the Future Legends project “after a panoply of construction disputes, acrimony with the Town of Windsor, voluminous, heated, and fulsome mechanics lien litigation, loan defaults, failures to pay urgent utility bills, failures to carry insurance, misrepresentations and general gross mismanagement.”

Today, the facility is partially built, with fields choked with weeds and boarded windows in the half-built dorms.

In Weld and Larimer county district courts, Future Legends is facing several lawsuits from contractors and creditors. A hotel owner in Fort Collins says the company owes $76,193 for rooms used by visiting teams. Longmont-based Axis Electrical filed a complaint saying it is owed $12,255 after a check from Future Legends bounced.  A staffing company says Future Legends owes $64,364. A Nebraska bank says the company owes more than $300,000 in lease payments for commercial property and equipment. A Highlands Ranch company that built an indoor dome and pickleball and sand volleyball courts says Future Legends owes $467,282. A Burlington concrete company filed a lawsuit saying it is owed $614,329. Greeley-based construction firm Hensel Phelps says it’s owed $1.5 million. 

A dozen more lawsuits filed by unpaid contractors have been closed, settled, consolidated or delayed since 2019.

Weld County District Court Judge Shannon Lyons on Oct. 25 ordered Future Legends to pay a California landscape company, BrightView, $600,000 after the sports complex owner issued a check for $200,000 in 2023 that bounced. 

“Essentially Future Legends attempts to use financial sleight of hand to create the appearance that it had sufficient funds to cover the check,” Lyons wrote in his Oct. 25 ruling awarding treble damages to BrightView. 

While Windsor is listed as a creditor of Future Legends, the bankruptcy filing is not expected to impact local access to the complex’s fields, where youth and adults play soccer, baseball, flag football and softball. 

“It’s a big project and there are a lot of lenders and lots of things involved in the court and thankfully the town is not directly involved in those,” said Windsor Town Manager Shane Hale, who said the town is in contact with the court-appointed receiver, Denver-based Cordes and Co. 

On Oct. 30, Future Legends sued the town of Windsor in U.S. District Court in Nevada, asking that the court force the town to renew temporary certificates of occupancy set to expire Oct. 31. While the town had been renewing those temporary permits for the last year and a half, Windsor officials told Future Legends on Oct. 29 that they would not renew this time, due to “the lack of progress in completing the Future Legends project,” reads the complaint.

Mike Staheli, the court-appointed receiver with Cordes and Co., said the owner of Future Legends, California attorney Jeff Katofsky, inked a Aug. 1 lease between his different ownership entities. The receiver asked Weld County District Court to terminate the lease so it could take over the indoor dome but Katofsky filed for bankruptcy protection for the entity that purportedly controls the lease.

“This effectively sidelines the receivership as it relates to the dome until it can be proved to the Bankruptcy Court that (Future Legends 5 LLC) has no ownership interest in or control over the dome,” Staheli told The Sun in an email. “If the receiver would have remained in the control of the dome and been able to take over the operation of activities therein, it would have tried to persuade the Town of Windsor to extend the temporary certificate of occupancy and allow the continuation of activities while the receiver finished the construction of the adjoining clubhouse.”

The multi-sport facility is a difficult business model. A similar sports complex in Mesa, Arizona — the 320-acre Legacy Park — filed for bankruptcy protection in 2023 after defaulting on $284 million in municipal bond debt. Legacy Park has been acquired by a new ownership group.

The Pro’s Closet closes after 18 years and nearly $100 million in funding

The U.S. cycling industry is enduring a slump in sales following the buying frenzy that cleared out bike shops during the pandemic. The bike industry saw sales grow by 41% in 2020, followed by a dip in 2021, according to Statista, which values the U.S. bike market at $8.2 billion. 

Bike shops that ramped up orders following the surge in pandemic demand have seen inventories grow as sales fall. E-bike sales also are eating into traditional bike sales. Last year saw steep declines in U.S. bike sales. In Colorado, consolidation and the declining market have seen home-grown bike brands closing doors and leaving the state. 

One of the most innovative bike retailers in the industry closed in October. The Pro’s Closet, or TPC, recently auctioned off all its inventory in its 137,000-square-foot warehouse in Louisville. The company was founded by a pro mountain biker in 2006, a pioneer in the now-vibrant re-commerce business, buying and reselling high-end bicycles. The company raised close to $100 million from investors who were keen on both cycling and secondhand sales. 

In August 2020, the company told the Securities and Exchange Commission it had raised $12 million in equity shares. The year before the company filed reports with the SEC that it had raised $4.5 million in equity in two sales. The Pro’s Closet in January this year announced it had sold $20.1 million in equity shares. 

Early investment in The Pro’s Closet includes $9 million from Boulder investment firms Foundry Group and Ridgeline Ventures in 2017 and $12 million in 2020 from Foundry Group and Edison Partners, which helped the company relocate to Louisville from Boulder. 

In a post explaining the investment in the company in September 2020, Edison Partners General Partner Ryan Ziegler said The Pro’s Closet “powers the world’s largest re-commerce marketplace” for high-end bikes and gear. 

“They span road, mountain, gravel, and e-bikes and have built a rapidly growing, scalable, and profitable company with not a lot of capital. This is music to our ears here at Edison,” Ziegler wrote on his company’s blog. 

In June 2021, the Chernin Group led Edison Partners, Ridgeline Ventures and Foundry Group in a Series B round of funding that raised $40 million. That round of funding followed a 500% increase in revenue for The Pro’s Closet in 2019 and 2020 and was meant to help the company grow from 116 workers to 200 by 2022. 

Combined with investments from those early investors and public equity sales, The Pro’s Closet raised more than $90 million in the past decade. In an announcement that it was closing its doors and liquidating its inventory, the company said it had sold more than 46,000 bikes and had more than 160,000 customers. 

“This has been an extraordinary chapter in the world of cycling, and we’re incredibly grateful to everyone who has been a part of it,” The Pro’s Closet CEO Jonathan Czaja said in the statement.