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The Quest

Steve Burton says his multimillion-dollar project will open Chesterfield County to a world of national sports prominence. But who is going to pay for it?


THEY CHASE DREAMS in a bubble. On any given week 155 swimmers, some eyeing gold, saunter into this domed facility off Hull Street Road in western Chesterfield County. Steve Burton, the chief executive of SportsQuest, calls the 25-yard, six-lane pool a “short-course competition” tank. The owner of the facility, Dudley Duncan, says the swimming club that uses the training center, SwimQuest, likely will produce “three to five kids” who will qualify for Olympic trials in 2012.

The kids are quick fish. Duncan, 63, no longer swims regularly, but in high school he once swam 200 yards in 2 minutes, 16 seconds. Michael Phelps set the 200-meter world record in the 2008 Olympics, clocking in at 1 minute, 42 seconds. At SwimQuest Dudley says he once timed a 16-year-old boy at 1 minute, 57 seconds.

They may be training future Olympians, but SwimQuest really is just a converted community pool, tucked behind a Friendly's restaurant at the entrance to the Deer Run subdivision. A kiddie pool juts off to the side. A boom box sits on a card table. A piece of PVC pipe monitors air pressure and temperature while a man in black swimming trunks jumps feet-first into the water, which at one end is only 3 feet deep.

“My daughter is thinking Olympics. She's 10,” says a wide-eyed Cleary Maly, who's doing warm-up exercises on a mat by the door, next to a stack of iron weights. Maly, a network marketing executive for Arbonne International, brims with enthusiasm and positive thinking. The community pool is harboring big dreams. Olympiad or no, SwimQuest plans to trade in the bubble early next year for a bona fide aquatics center with two Olympic-sized pools — one is 50 meters by 25 yards and the other 25 meters by 25 yards. It will be the centerpiece of the 250-acre SportsQuest complex a few miles down the road.

After an investment pitch, Maly and her husband spent three or four months looking at the business plan and decided to pony up $20,000. They joined a group of seven families, including Duncan, who plopped down $500,000 to get SportsQuest off the ground. “I just knew it was going to take off,” Maly says. “I'm a visionary myself, so I got it.”

To many, however, the vision is increasingly blurry. County political leaders are pinning big hopes on SportsQuest, seeing it as a major economic booster, job generator and, more importantly, a showpiece for Chesterfield and the region.

But the project is perpetually behind schedule, financing remains a public mystery, and some are concerned that SportsQuest's success hinges on monopolizing youth sports. Others say the plan has too many moving parts to be realistically viable — among them 17 synthetic turf sports fields, a 200,000-square-foot aquatics center and field house, an ice skating rink, fitness center, cycling velodrome and dormitories for athletes.

It's easy to get lost in the sprawling, constantly moving tentacles of SportsQuest. But some say it's worth taking a hard look at the plan. In suburbia youth sports are big business, but it's also largely a not-for-profit business. Turning Little Leagues into profit centers bears some public scrutiny, perhaps. 

SportsQuest is also a private enterprise being funded on the taxpayer's dime. In July Chesterfield County jump-started the tournament complex by paying — up front, in one lump sum — $4.3 million as part of a lease and economic grant deal. The money, in essence, was used to pay vendors and help finance the construction of the 17 fields. The county also agreed to kick back real estate and sales tax revenue that the project generates. Burton says that tax kickback, which the county will reimburse during any consecutive five-year period that SportsQuest chooses in the next nine years — is worth $10 million.

THE $100 MILLION, 250-acre sports complex is intended as a massive fitness center of sorts, with paying members using high-performance training and facilities. Burton says he has 12,000 members already — sign up now and lock in low rates of between $30 and $80 a month! — and other revenue will stream in for large-scale regional and national tournaments. He envisions upper-crust athletes swarming to Richmond to train with Olympians, National Basketball Association players, former Redskins such as Art Monk, in such diverse sports as ice skating, swimming, basketball, lacrosse, field hockey, soccer and cycling. There's a private boarding school at which student-athletes live and train year-round. (Tuition is $25,000 to $45,000 a year.)

But will the revenue be enough to support such a massive project?

“We're still sort of in a vacuum here as to what's going on and what the justification and support would be,” says John Gerner, managing director of Richmond-based Leisure Business Advisors, a consultancy that specializes in tourist development projects. “This is on track where you could conceive at some point where they could overcommit and come back to the county and ask to be bailed out. … It's possible that they can do what they say they can. It's probable that they are going to have a harder time.”

The project is enormously ambitious. The outdoor sports complex, of which nine fields are complete, boasts high-end synthetic turf made of ground-up tire treads, with six inches of stone underneath acting as a drainage system. The technology allows for all-weather, year-round play. The fields can be converted for all kinds of sports, including football, soccer, lacrosse, rugby, field hockey and even baseball.

“For me personally it's huge,” says Ronnie Pascale, territory manager for Shaw Sportexe, the turf manufacturer that's installing the 17 fields that total 1.7 million square feet of artificial turf. All the fields should be open by June, says Pascale, who moonlights as a goalkeeper for the Richmond Kickers. “It's going to be the largest synthetic turf complex in the country,” he says.

The fields were the linchpin that got SportsQuest rolling. Carpet manufacturer Shaw Industries, a subsidiary of Warren Buffett's Berkshire Hathaway, had recently acquired turf maker Sportexe Construction Services in October 2009. Shaw Industries extended a $15 million line of credit to Burton's company last summer, envisioning the complex becoming a showcase for its new turf business.

Questions of financing, however, have dogged SportsQuest from the outset. Within weeks of agreeing to supply and install the $15 million worth of fields to SportsQuest on May 12, Burton went before the Chesterfield Board of Supervisors seeking $4.3 million in financial help. In previous interviews with Style, Burton said he had already secured $50 million in private capital, and would be constructing the East Campus, which includes the 17 fields, with “zero debt.”

A month after the Board of Supervisors approved the deal on May 26, the county's money — $2.3 million to lease the turf fields for 20 years and a $2 million economic-development grant — suddenly became mission critical.

Burton told Style he was merely trying to give the county a good deal. He'd happily forge ahead without the $4.3 million, albeit on a slower timetable. But on June 4, according to e-mails obtained through the Freedom of Information Act, Burton e-mailed a county official and warned that “a last second denial of the $2MM” would “serve up a lob for a crushing public blow to SportsQuest.”

Without the county's commitment, in late June Shaw Industries threatened to stop work on the project. Chuck Dobbins, director of corporate assets for Shaw, sent an urgent e-mail on June 28 to Garrett Hart, manager of new business for the county: “If the signing does not occur by Wednesday of this week (June 30), delivery of the project will be in severe peril,” Dobbins wrote to Hart, who was overseeing the SportsQuest project. “We are not in a position to commit the additional funds necessary to keep the project on track until the final documents are signed and there is a definitive commitment for funding.”

The county, Shaw, SportsQuest and developer Mark Sowers, who owned the land where the fields were built, closed on the deal July 12. While it's unclear how the money was disbursed after the deal closed, in e-mails Burton indicated some of the money would be used to pay vendors, such as engineering and design firm Timmons Group.

WHAT WAS DELAYING the deal? County officials were concerned about Burton's ability to secure $30 million in federal stimulus bonds in the run-up to the county's $4.3 million infusion.

Burton made a major splash, in late 2009 and early 2010, when he received county and state tax-exempt bond allotments intended to stimulate private investment in the wake of the recession. On May 26 Hart told the Board of Supervisors that Burton “had enough money to complete the project,” which was critical as county supervisors were looking for assurances that SportsQuest could fulfill its commitment to build a $100 million campus, creating 500 new jobs, by September 2013. But in early June Hart expressed concerns that Burton didn't have enough, e-mails show.

“Without the bond funds, we do not see you being in the position to fulfill your commitment to the full project of $100 million in three years,” Hart wrote in a June 4 e-mail to Burton. In early August, Burton told Style that SportsQuest was in a position to sell the bonds, and was working toward a sale.
“We are deeply engaged in the process of the bond transaction,” Burton said on Aug. 2. “We've talked with actual buyers of the bonds. … We feel comfortable that we have bonds that will be of interest in the market.”

Three weeks later, on Aug. 25, Burton sent a letter to Chesterfield County Administrator James Stegmaier, notifying the county that SportsQuest wouldn't need the bonds after all. SportsQuest relinquished the entire $30 million bond allotment.

The county's tune also changed. “It may not concern you that you are going to sign an agreement with us committing to create $100 million in capital investment with no financing in place but it does concern us,” Hart wrote to Burton on June 4. In fact, the agreement with the county specifies that Burton must return the $2 million economic development grant if the project fails to result in a minimum of 400 new jobs and $80 million in capital investment by September 2013.

In an interview last month, Hart expressed no such worry. “It's not really an economic-development agreement,” he says. “We don't get into their financing and their business plan. … [Burton] just chose not to use the facility bonds. I have not asked him directly about how he plans to finance the plan at this point.”

Burton says there's no great mystery. He simply didn't need the bonds because other financing options became available.

“When we originally said we would have [a] $100 million campus, I had allocated less than 10 percent of that to be part of corporate sponsorship,” he says. “I didn't think the corporate partnership dollars would see so much value in us. I was wrong.”

Despite the public investment, Burton frequently cites confidentiality clauses when it comes to financing. Burton says in addition to Shaw's $15 million loan, the company has agreed to a “seven figure” corporate partnership with SportsQuest. Coca-Cola has agreed to do a similar partnership, he says.

“We have partnership agreements that are being negotiated today with $43 million of corporate sponsorships,” Burton says. “It's a category that far exceeds, literally four times the amount of capital than I originally thought we would find. So that single element alone has provided us tremendous flexibility in our business.”

For a company so flush with capital, others aren't seeing the direct benefits. Earlier this month SportsQuest President Phil Evans resigned. Evans was working part-time, commuting from his home in Greenville, S.C.

Burton says Evans' departure was mutually agreed-upon because his interests lie mainly in developing the company's professional sports franchises, which have been slower to develop. Evans ran the arena football team, the Richmond Revolution, and hoped to bring a professional NBA development team to the campus in the near future.

“I'd been at SportsQuest right at two years. I had signed on with the intention of becoming a full-time employee sooner rather than later,” Evans says. “I guess that the company wasn't able to get to the point where they were able to do that.”

Evans and Burton say the departure was amicable. And Evans says he continues to have faith in the SportsQuest vision. But at times he fears the company is moving too fast, launching too many businesses and programs simultaneously.

“The company is trying to operate a number of different and related businesses and start them more or less at the same time with a level of resources that would make it very difficult to support [them],” Evans says.
While there are skeptics, Evans says he wouldn't underestimate Burton's abilities. “He's really done a tremendous job of getting the campus to where it is today,” he says.

TIMING WILL BE everything. Constructing a $100 million campus with 500 jobs by 2013 will require a breakneck pace. Burton says the first phase of the West Campus, which includes the aquatics center and field house — a $20 million investment — is on pace to open by Jan. 1. In mid-February the county planning staff approved the site plans. In mid-March, the Planning Commission is set to consider the project.

Can such a project really be completed in nine months? Duncan, SportsQuest's aquatics director, says financing should be in place by early April. Two banks are competing to finance the project, he says.

Duncan also runs a swimming pool management outfit, SwimMetro Management, which supervises some 400 lifeguards at 40 pools throughout the region. Last year he launched a new pool construction company, SwimQuest Ventures. His first project will be constructing the two pools for the SportsQuest aquatics center at a cost of $1.7 million (the entire facility will cost about $3 million).

The pools will be constructed using pre-cast concrete, Duncan says. “It's a unique method of construction that hasn't been done with pools before,” he says. “Typically, you have to pour concrete over lots and lots of rebar. It's a laborious process. … This can be done in a pre-fab shop.” Once the financing is in place, Duncan says the pools can be constructed — he calls them “fresh air” pools, which means there's a roof but it's not enclosed — in about three months.

The field house, a 140,000-square-foot court complex for indoor sports such as basketball and volleyball and a fitness center, is expected to cost about $17 million and also be completed by Jan. 1.

Timing, however, often is a moving target at SportsQuest. In late January Burton told Style that the concession and locker room facilities on the East Campus should be ready in time to serve fans of the Richmond Revolution, which will play arena football outdoors starting March 5. A few weeks later, however, he says construction won't be complete until the end of March.

With so many moving parts, missing deadlines could become costly. Burton has, at times, issued public pronouncements before deals are finalized. On Jan. 5, he held a news conference at the Weinstein Jewish Community Center to announce that NBA stars Chauncey Billups and Omri Casspi would lead summer camps at SportsQuest. About a week later (Burton says it may have been two weeks) they discovered a conflict that may prevent them from coming.

Meanwhile, Burton was promoting Casspi's arrival in an interview with Style on Jan. 23, more than two weeks after the public announcement. The week of the announcement, Burton says his Web site had 100,000 hits. “We're actually … going to do a reality show on the week of him being here,” Burton said on Jan. 23. Casspi “could have gone anywhere. He picked SportsQuest.”

THEN THERE'S THE sports academy. Burton says the academy is on pace to open its doors in September with about 100 students. But dormitories aren't scheduled to be complete until 2012. Burton declines to say where the kids will attend school.

The students will train in their respective sports in the morning and early afternoon, Burton says, and then attend classes from about 3 p.m. to 7 p.m. These are mostly high-school students looking to improve in their games in hopes of attaining college scholarships. For instance, one student from the Philippines is looking to improve his basketball skills in order to make the team at Harvard.

Tony Tucker, a well-known basketball trainer who's worked with several high-profile NBA players, is heading up the academy. Tucker, who helped start the IMG Basketball Academy in Bradenton, Fla., says he's recruiting about 20 to 30 potential students, but as of last week none had officially enrolled.

Burton, however, says they're coming. Some are already here.

“I had a student [who] visited my home yesterday.He's moving into the dorms early,” Burton says. “Yeah, I call the house my dorm. He's actually going to be moving into my home. Is that commitment? His mom's here. They are moving stuff into my house. … Has he signed and paid the deposit? Not yet. But he will.” While the dormitories are under construction, Burton says he'll place students in either his home or with other families around Chesterfield. If the dorms aren't ready in time for 2012, he says SportsQuest has a deal to take control of a local hotel.

As for the actual schooling, Burton says that's covered. The students will take a hybrid of online classes with a yet-to-be-publicly-announced institution, and SportsQuest has signed a deal with a local private school to bring in teachers.

“It's a private school — SportsQuest University,” he says. “We have a fully certified educational curriculum approved by the state of Virginia to issue a high-school diploma.”

Not exactly. The state Department of Education doesn't certify private schools to issue diplomas. George McVey, the president of the Virginia Council of Private Education, the agency that oversees accreditation of private schools, says no school can be accredited before the doors open.

“It's not open, then it can't be accredited,” McVey says.

Burton stands by his assertion that his school is certified. He says that the private school SportsQuest plans to contract with already issues high-school diplomas, and is certified to do so. “We have established partners that have those curriculum accreditations,” he says. He just can't say who — yet. 

THERE MAY BE some public-relations work ahead. For all the feel-good proclamations and dream-chasing, SportsQuest has managed to alienate some people with its aggressive approach to acquiring existing sports associations and businesses.

The Richmond Baseball Academy, for instance, wound up as a tenant of Burton's after SportsQuest in October 2009 took over the warehouse that the academy shared with another sports training business. Burton attempted to evict the academy in November 2010, and the academy filed a lawsuit seeking to preserve its lease.

Burton had recently merged his company with another baseball training group associated with the Richmond Braves and was operating in a building next door, home of the Richmond Indoor Sports Experience, which has also merged with SportsQuest. Both buildings are located in an industrial park off Genito Road in Chesterfield, behind Southside Speedway.

After talks between Burton and the Richmond Baseball Academy about a possible merger fell through, SportsQuest served the academy with an eviction notice, giving them one month to move.

Burton says it's just business. The academy was a competitor to one of his business units. And it was in his building.

It's not the first time Burton's pulled the plug on a possible competitor. Just last week Brad Gamlin, who ran the SportsQuest division of social sports, resigned over “philosophical differences” with Burton concerning flag football.

He says Burton wanted to acquire the Central Virginia Football Association, which Gamlin owns. The association, which has 560 players, had been playing 20-plus games a week at SportsQuest since August. The association “will not be playing at SportsQuest anymore,” says Gamlin, who says he isn't allowed on SportsQuest property for the league's remaining games, which run through early March. In fact, he says, he's banned from being on the property.
After Sunday's games, the association's Facebook page was rife with comments from players, and even Gamlin, about what some described as a “hostile takeover” of the flag-football league. “I was told that if I showed up I would be arrested,” Gamlin posted on the league's Facebook page, CVFA Commish.

Burton says Gamlin resigned, but that the flag football association didn't lease his fields. “The people who are playing on our campus today enrolled in SportsQuest Social Sports,” he says. “They paid SportsQuest to join SportsQuest Social Sports to play football. Brad has a league that he is very proud of and he'll continue to run. Those players are free to enroll wherever they want. But for this season, they enrolled in SportsQuest. … It was our program.”

When SportsQuest recently proposed using the former Clover Hill High School as an Olympic dormitory, the boo birds came out in force. Some were concerned SportsQuest would push out existing leagues using the high school's fields.

Ron Maxey, chairman of county's Parks and Recreation Advisory Commission, says the monthly meetings have been packed lately. “Ever since the SportsQuest thing bubbled up, everything is standing-room-only. They are just so worried that they are not going to be there when this guy comes and says something,” Maxey says of Burton. “Just over the last six months, this SportsQuest thing has really gotten everybody's gander up.”
Burton says the youth groups were simply wrong about his proposal.

“The community members that heard about it heard, I believe, vastly distorted rumor about what would happen,” Burton says. So he withdrew the proposal.

DESPITE THE CHALLENGES, the idea behind SportsQuest has merit, says Mark Rosentraub, professor of sports management at the University of Michigan. “The concept is actually valid, and a good one,” he says. “There is far more money spent on participatory sport than spectator sport.”

Indeed, participatory sports is big business. In 2009, 178 million people, ages 6 and older, participated in some form of team sport, tennis or swimming in the United States, according to a study conducted by the Sporting Goods Manufacturers Association.

That led to team equipment sales, including uniforms and equipment, of nearly  $4 billion in 2009, the study found.

Over the next two weekends a massive soccer tournament known as the Jefferson Cup will take Richmond by storm, bringing more than 800 teams to the Richmond area. Starting this year the Henrico County-based Richmond Strikers soccer club and SportsQuest are cooperating to put on the tournament, with the centerpiece being the field complex at SportsQuest. Starting next year, Burton says the Jefferson Cup will be able to expand dramatically with the use of all 17 synthetic turf fields, adding another 400 or so teams to the overall tournament.

The tournament will generate 22,000 hotel room nights, Burton says, and create enormous economic impact.

Rosentraub says the trick is moving the idea from concept stage into an actual business. It needs to be “tight and focused,” he says, not unlike the soccer tournament complex in Overland Park, Kan. Those tournament complexes that concentrate on one or two sports and cater to them have an opportunity to flourish. “The concept is solid,” he says. “Is the business plan solid — that's a whole 'nother story.”

The sharp rise in sports participation and the market for high-performance training brings other social concerns. Namely, there's been a sharp decline in recent years of casual, unorganized play. And young children are being pushed by their parents to specialize in a particular sport, which some say is unhealthy. 

“Certainly in team sports, there is really very little correlation between early specialization and later success,” says Merrill Melnick, a sports sociologist at the College at Brockport, part of the State University of New York. “Sending kids to college is much more problematic. One of the myths is that there are thousands and thousands of scholarships out there to be given out like jellybeans.”

The push toward specialization mirrors society, perhaps dangerously so. A child's success in a particular sport, sociologists say, often has an unhealthy correlation with the social status of the child's parents. It's jock culture on steroids — perhaps literally.

“When you put this emphasis on performance, it really sets the die,” Melnick says, which is a “skip, hop and a jump” from performance-enhancing drugs. “You have summer camps just for hurdlers. … Look before you leap.”

SportsQuest isn't leaping. But its business model might be. 

Burton says the concept is modeled after Disney's ESPN Zone in Orlando, Fla., and Overland Park. The Disney sports park is part of a much bigger amusement park complex, of course, an established national tourist draw. And Overland Park was financed by an increase in hotel taxes.

Will SportsQuest go back to the county for more public money? Mark Sowers — the developer and SportsQuest's “biggest investor,” says Burton — doesn't think so.

“I don't know,” Sowers says. “Anything's possible.”

One thing is clear. In 2003 Sowers hired a consulting company to study the feasibility of building a similar sports complex on the same plot of land, which concluded that it couldn't be done with a large public investment, such as an increase in meals taxes, reallocation of hotel taxes or some other form of public financing.

This, ultimately, is what concerns Gerner, the leisure development consultant. There's a reason new baseball stadiums and coliseums are paid for with public dollars: They typically aren't profitable as private enterprises.

“That model is really difficult to do privately,” he says. “If it wasn't, government wouldn't have to support it.”

If Burton goes back to the county for more, will the political support be there? Burton says despite all the critics and questions, there's no mistaking that SportsQuest is already having a major affect on the county.

“We're turning heads at a national level,” Burton says. “Even if nothing else happens, it has put Chesterfield County in a new place. Every venture is a dream and a leap of faith — and this is nothing different.” S

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