Olympic Torch Could Burn Public : Legislature must act fast to restore security requirement on loan for center

The last thing Californians need, in these difficult financial times, is to be on the hook for a $15-million unsecured loan. But those are the circumstances that today govern funding for the Olympic Training Center in Chula Vista, despite the best intentions of the Legislature and the assurances of the project’s sponsors.

This situation has developed--after several extraordinary twists and turns--because Gov. Deukmejian earlier this month vetoed special language written by the Legislature requiring security for a $15-million state loan to the San Diego National Sports Training Foundation.

Deukmejian later said that he may have been misinformed when he vetoed the provision. The governor said he was under the assumption that the foundation had agreed to guarantee the loan, and that a contract had not yet been signed. Later, his press secretary said that Deukmejian actually was referring to negotiations for an addendum that would require collateral.

The contract gives the foundation $5 million annually for three years to help develop the year-round facility on Lower Otay Reservoir. It had, in fact, been signed in June. In a deal that has drawn protests from legislators, the deal contains no requirements that the foundation offer security for the loan.

It was Deukmejian himself who last year demanded a written promise from the foundation that it would guarantee the loan after fears surfaced that revenue from the sales of special license plates would be insufficient to pay it back.

But there was no provision for collateral when the Department of Commerce negotiated the contract, forcing the Legislature to act.

The $60 million, 150-acre development--a state-of-the-art facility for Olympic athletes scheduled for completion in 1992--is a meritorious project caught in what is at best the kind of snafu for which government is infamous. Even though the foundation is insistent that it will find some way to guarantee the loan by the time it collects its first $5 million payment at the end of this year, the public deserves the kind of assurances that only action by the Legislature and the governor can provide.

The Legislature has less than two weeks to resubmit the language requiring collateral, a move that State Sen. John Seymour, who was angered by the veto, has said he is considering. That should be done at once, and this time Deukmejian should approve the measure.