Plan Gone Awry
Miller raised money again for the complex in 2018, planning to use cash to secure a letter of credit that would in turn be parlayed into collateral for a $200 million loan.
But a man who held himself out as a broker absconded with $2.4 million raised by Miller’s company, Legacy Sports, according to federal court records. Three people who’d invested in Miller’s letter-of-credit plan filed a lawsuit against him and his company for securities fraud in Maricopa County. Walter Simmons, one of them, said they dropped the case after reaching a settlement with Miller. Simmons said Miller repaid what he owed but he never received the equity stake in the project he was promised.
Miller was running short on options. Then, through a real estate consultant, he was put in touch with Ziegler, which had a niche raising money for nursing homes.
They decided to go through the Arizona IDA. To qualify for conduit financing, Miller converted one of his companies into a nonprofit called Legacy Cares and resigned from the board. Legacy Sports then signed a contract to develop and run the complex, and his son, Chad Miller, became chief executive. Chad Miller didn’t respond to phone and email messages. Doug Moss, who served as the president of Legacy Cares, didn’t respond to questions sent to his personal email and through the nonprofit’s attorneys. Moss hasn’t been accused of wrongdoing.
Ziegler, which was paid about $5.7 million in fees to underwrite the bond offering, sold them to big investors like Vanguard and AllianceBernstein, which were among the biggest buyers. Jessica Schifalacqua, a Vanguard spokesperson, said the investment was made as part of its broadly diversified fund portfolio. Carly Symington, an AllianceBernstein spokeswoman, declined to comment.
The pandemic posed challenges from the start by delaying the full opening, causing labor shortages and triggering event cancellations. Lackluster restaurant and concession operations also played a role, with the park bringing in just $27.7 million last year, far short of its projection for nearly $100 million.
After a failed effort to refinance the bonds, Legacy Cares began exploring alternatives, including a sale of the park. It fired Miller’s company as the operator in March. Two months later, it filed for bankruptcy.
In October, a preliminary deal was struck in bankruptcy court to sell the facility for $25.5 million, most of which would go to contractors waiting to be paid.
If it goes through, bondholders will come away with $2.2 million in cash and an 11% stake in the new operation—wiping out almost all the money they put in.
This article was provided by Bloomberg News.