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Early in the game, SportsQuest is falling behind

Aaron Kremer August 25, 2011 22

An ambitious sports complex in Chesterfield County continues to trudge along, despite being months behind schedule and battling behind-the-scenes turmoil.

SportsQuest is having trouble paying its bills and keeping its employees, and the business will not be running an arena football team for the upcoming season as advertised.

Over the past year, at least nine former directors have left SportsQuest, depleting the development project of organizational expertise and future athletes/customers.

Money appears to be in short supply. Former employees and contractors say that they have been owed money for months. And while they worked for SportsQuest, they were not always paid on time. They said that when they asked SportsQuest about their money, they were frequently told that an investor is just around the corner and that they would be paid soon.

One landlord waited seven months to be paid a $2,000 monthly rent for a small sales office near the SportsQuest campus, and a construction contractor working on the fields said he has not been paid for work he did months ago.

A handful of former program directors also said that they were never given the stock options that were promised when they were hired. And private leagues and teams have left SportsQuest or not joined as earlier publicized.

SportsQuest founder and president Steve Burton said that, as a startup business, it hasn’t always been possible to pay everyone right away, but that all vendors and employees are eventually paid.

So far the project consists of 12 artificial turf fields and a bath house on what’s called the East Campus. The plan called for 17 fields, but construction has stopped for now. SportsQuest leased its fields to several tournaments this summer, including a girl’s lacrosse tournament and a field hockey tournament. Burton also said he’s working to get SportsQuest Academy up and running this fall as a boarding school for student athletes. He said he has around 25 students who will enroll.

In addition, he said construction is getting ready to start on the West Campus, which is to include an indoor facility with a pool and basketball courts. He said that’s the most pressing need for SportsQuest’s members and that he’s lining up financing. (You can read about the plans for the West Campus in a newspaper report here.)

Dudley Duncan, a board member of the SportsQuest Foundation who invested $200,000 in the project, said that there are five more fields to be built on the East Campus and that construction will resume once a financing package is closed to start on the West Campus.

“We’re really at a critical point, where financing for the West Campus is really critical to us moving forward,” Duncan said.

Although Burton rallies to keep the project moving toward the finish line, the cash-flow troubles have been painful for some former employees.

Sue Murphy joined SportsQuest in April 2010 as the executive director of lacrosse. At that time, she folded her existing business – Premier Lacrosse, LLC – into SportsQuest and established fall and winter indoor lacrosse leagues. She also helped bring in two of the tournaments that leased fields from SportsQuest this summer along with multiple travel teams.

Murphy left June 8, and by that time her title had been changed from director of lacrosse to director of professional sports to VP of operations and finally president of events.

She said she was not paid according to her contract, which she said would give her a membership interest in SportsQuest for folding Premier Lacrosse into SportsQuest and bring in customers.

And she said she was not paid the salary she agreed to. “When I departed, there were two months that I was not paid according to my contract,” said Murphy, who now runs New World Sports.

Burton denies she is owed anything and said SportsQuest paid $25,000 in refunds for sports programs to help her get started on her new business venture.

Another SportsQuest employee, Charlie Hildbold, was laid off three weeks ago from his position as the manager of the Richmond Revolution. He had moved to Virginia to help launch the arena football team, and in its first season, it drew capacity crowds at the Arthur Ashe Center. Last season, the team drew only a few hundred fans per game when they were moved outdoors on the SportsQuest campus. The team was losing hundreds of thousands of dollars, Hildbold said.

Hildbold said his direct deposit paycheck almost never went through on time.

“I was paid every pay period, but for the last three or four months, it was late pretty much every time. The worst was 11 days late,” said Hildbold, who is in Richmond looking for another job in sports.

“That was the worst, because it was near the first of the month and so I ended up bouncing a rent check. That’s just embarrassing.”

Without Hildbold, there will not be football.

Burton said that the team will return once there is an indoor facility.

“We are going to delay one year,” Burton said. “The outdoor season just presented too many challenges. It rained every game but one, and people didn’t enjoy that experience.”

Brad Gamlin brought his flag football league to SportsQuest around September 2010 and left in January. Gamlin said that his pay was not as much as he had discussed with SportsQuest.

“I look at it as one of the biggest mistakes of my life,” Gamlin said.

“I was put on a salary with an aggressive bonus system. Whenever I asked about it, I was told that we’ll talk about it next week. I still don’t know what my bonus system was supposed to be.”

Gamlin is now running his league independently from SportsQuest.

Burton declined to discuss individual employees’ complaints, but he said that part of the turnover is from hiring candidates that didn’t quite see that SportsQuest is more of a facility for Olympic training.

As for the trouble with payments, Burton said that sometimes revenue from event and registrations comes in after an event, and that vendors also have to wait, just like SportsQuest has to wait for its cut.

“We remain committed and have made complete payments,” Burton said, “There may have been times where payment terms went beyond [what’s normal], but we always make good on our outstanding bills, and we will.”

Burton said that with a project as big and complicated as what he’s attempting, the vendors are partners in the vision. “This has been a huge undertaking, and of course there are bumps through the process, but this is a great big win for Chesterfield.

“Is it stressful getting there? Yes, but we’ll get there.”

The grand vision has meant small details often go unattended. For two years, Phil Evans worked at SportsQuest and helped establish professional football. When reached by phone, he said that the business might still work but that perhaps SportsQuest bit off more than it could chew.

“Unfortunately, SportsQuest consistently underestimates how much its going to cost, so cash flow is a persistent problem,” said Evans, who left SportsQuest in February.

Evans said he was not given stock options that were part of his compensation. He said a stock option plan was never formerly adopted. Burton denies that claim.

“It’s another one of those projects that had good intentions, but there just wasn’t the money or resources to get it done,” said Evans.

Aaron Kremer is the BizSense editor. Please send news tips to Editor@richmondbizsense.com.

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22 Comments »

  1. John Richmond August 25, 2011 at 7:31 am - Reply

    As someone who has been close to this whole fiasco on the outside, I have seen Steve Burton go from speaking at Chambers of Commerce about his “dream”… to firsthand witnessing the overpromising and undelivering of this venture…

    Burton made his money designing a sleep apnea program I believe; and then was attracted to speed skating and developing olympic caliber atheletes here in Richmond for speed skating…

    How does someone supposedly intelligent, go into a massive undertaking to be the biggest sports mecca on the east coast with so little ability and congruity… Mr. Burton stood and spoke not long ago about how the focus was Olympic style sports… and then within months he was installing revolving doors for every local sports guru to come join in and bring everything from football to tiddlywinks…

    To anyone who stood back and watched, it was obvious as to where this was going… and perhaps Burton is just a bored flake whith good intentions… But the reality now is, that he has made a shamble quickly out of the master plan… and hurt small business people and even youth atheletics in the area…

    To me Burton belongs in California with all the Bill gates wannabees, and FACEBOOK moguls… and I just hope the management of Chesterfield County hopefully hasnt mortgaged too much of the taxpayers money while listening to Burton and SportsQuests’ ridiculous and scattered approach to building an atheletic DisneyLand…

    Isnt this much like the last presidential election where someone who never ran anything was all of a sudden annointed to be the supreme visionary??

    Maybe we should have looked more closely at someone who made their money while people sleep…

  2. Navia Gulley August 25, 2011 at 7:58 am - Reply

    Thank you for running the story on SportsQuest. At the Candlewood Suites, we housed many of their players on the Richmond Revolution football team here. They had about 30 players staying in about 15 rooms for 3 months. They racked up quite the bill, a lot of which was paid off, however late they may been. Unfortunately, though, they checked out around June 17, 2011 and we are still left with an unpaid balance of $11, 668. If our emails/calls are answered at all, we just keep getting the run around.

    Navia Gulley
    Director of Sales
    Candlewood Suites-Richmond South

  3. Paul Everitt August 25, 2011 at 8:29 am - Reply

    As a girls lacrosse customer, I have to admire the chutzpah of the claim that SportsQuest gave Sue Murphy $25k.

    SportsQuest gave Sue nothing. The $21k was refunds to customers who were not delivered what was paid for. Checks went straight to the parents, not to Sue, to wiggle out of SportsQuest’s already-overdue liabilities. Quite the contrary: Sue was left underwater, like all the other Richmond business, customers, employees, and youth that are “partners” in the SportsQuest loss-generation scheme.

  4. james August 25, 2011 at 8:29 am - Reply

    How much taxpayer money has Chesterfield County put into this project?

  5. casteffen August 25, 2011 at 10:10 am - Reply

    What about the Las Vegas lawsuit filed against SportsQuest?

  6. Lisa Heinrichs August 25, 2011 at 11:07 am - Reply

    I was also a customer of the Sports Quest Girls Lacrosse Program. I think it was easy for SQ to refund the parents because they had not paid our tournament fees (9 days before the 1st tourney!), they had not purchased any uniforms, and we had no diet or physical training/gym/personal trainer time, so that money was just sitting there. When our coach was let go from Sports Quest, we were not contacted by them to say they program had changed. Sue Murphy and her staff keep the practices smooth and constant for our kids and later we found out from the coaches that there was a problem with Sports Quest. I wrote my check to Sports Quest for a comprehensive program including coaching, physical training, and a dietitian, and SQ didn’t have the courtesy to even call and say they had let our coach go. No communication to say our coach is gone, but we plan to make good on the contract we made with you in ‘this’ matter. My daughter will graduate in 2012 and this summer is her last chance to be recruited, so I and other 2012 parents, was very concerned about having made an investment and not even a phone call from SQ. Well, the good part of the story is that because of the dedication of the coaches to the girls and families, and by the generosity of parents to pay for uniforms and tournament fees the were PAST DUE, my daughter has offers from 6 universities to play lacrosse! Many thanks to Sue, her staff, and their undying commitment to make this work! Sue keep up the verbal contract she had made with us when we shook hands and put our child under her tutelage. The $25,000 that Burton says was refunded went directly to the families in the form of a check from SQ, THEY DID NOT GO TO FUND SUE MURPHY AS SOME KIND OF GENEROUS DEPARTING GIFT! I still had to turn around and pay the tournament fees, uniform, etc. that SQ failed to take for of AS AGREED TO IN THE CONTRACT I MADE WITH SQ. Great concept, wrong business model!

  7. susan l flemmons August 25, 2011 at 11:19 am - Reply

    I too am a former girls lacrosse customer and can tell you from first hand experience that Steve Burton’s claim of reimbursing lacrosse money to Sue Murphy is an untruth. The goods and services I paid for were promised by Sports Quest, not Sue Murphy! I wrote a check directly to Sports Quest and the goods and services were never rendered; including tournament and uniform fees. After personally having to pay vendors for these items (again) in order for my daughter to participate, I demanded a refund from SQ. I eventually received a reimbursement check written directly to me, not Sue Murphy. We never received an apology or explanation from SQ.
    I am certainly glad I pay taxes to Henrico County, I would be furious if my money was going to Chesterfield to fund this farce!!

  8. Adam W. August 25, 2011 at 12:10 pm - Reply

    As someone whose family member worked for one of Burton’s other failed venutures, this story has a sad familiarity to it. Anyone familiar with Burton’s past ventures know that this is a classic pattern for him. He overreaches in everything he does, and ends up losing other people’s money. He then walks away to create another overblown venture that will do the same. Burton has left a trail of people around town that have nothing but bad things to say about him. A past Bizsense story had a qoute from someone calling him a “snake oil salesman”; how apropos! Its especially sad when the taxpayers are suffering the consequences of his actions. It is simply amazing that he is still getting away with this behavior.

  9. Mike Flannigan August 25, 2011 at 12:13 pm - Reply

    Chesterfield County needs to cut off any funds made or to be made to Sports Quest immediately before they “break ground” on the West Campus. It sounds like this project is going to fail and then this area of the county will be ruined and will display abandoned and vacant facilities for many decades to come. Mr. Burton will then leave the area never to be seen or heard of again thus leaving behind a mess for the taxpayers of Chesterfield County to clean up.

  10. Blackbeered August 25, 2011 at 12:37 pm - Reply

    The only ones who didn’t see this coming was Chesterfield County officials, more specifically Economic Development.

    Duh.

  11. Mark Smith August 25, 2011 at 2:04 pm - Reply

    Take note: central VA cannot support a women’s lacrosse business, much less a NEW NBA FRANCHISE!

    You people ra-ra-ing the possibility of an NBA franchise in Richmond, keep on dreamin!

  12. Ruben Foster August 25, 2011 at 2:57 pm - Reply

    This is fantastic news for the Richmond Raiders. lol

  13. Brian E. August 25, 2011 at 5:35 pm - Reply

    Chestefield County has cut the educational workforce by axing a bunch of good teachers jobs which the community needs. They then lend money to a very outlandish & ver expensive athletic training venture in the poorest economy we have ver seen. While at the same time they approve building a new YMCA in the Swift Creek corridor which is of “non-profit” status, which means they are exempt from paying COUNTY real estate, property, etc, related taxes. The county needs money but the board members are making decisions without deeply analyzing the financial consequnces of their decisions to boost?? the economy locally.Very few jobs have been ceated by SQ, if you call them jobs-lol I even asked them at a hearing per the Y if they did a study or calculation of all the county tax revenue they would lose over the yearsby allow the non-profit Y to be built and they all replied no. Helllo?

  14. John Richmond August 26, 2011 at 7:17 am - Reply

    If the county was smart, as they are now finding all of this out… they would take over the cleared spaces and atheletic fields in place and utilize them for youth sports tourneys of various types… this is big big money and potential for the county. Look at RF & P park in Henrico Co. where they just had the Babe Ruth World Series… It is a county owned and run facility that generates great activity and revenue for surrounding businesses… This was the goal for SQ in a sense.. to capture this market, though reaping all of the benefits for themself… however the House Of Cards is falling. Chesterfield needs fields for football / baseball / soccer and lacrosse badly!! People on the inside know that there are dozens of groups like USSSA, AAU, the Kickers, etc. who will rent these fields and bring big time revenue if the county just maintains the fields and provides infrastructure and safety. Ironbridge is full constantly as are the other complexes… There is need for more – and these groups have money – like the groups that Sports Quest screwed around… is there an internal person with the county that could bring that together?? Surely SQ owes taxes or is in non-compliance somewhere??
    Get Burton out, and let the kids, families and private associations work with the county to make this a win-win.

  15. james August 26, 2011 at 8:49 am - Reply

    John Richmond has a good point. What SQ wants to provide is very much needed. But Burton clearly can’t do the job. Of course, it was clear when the $4 million loan was made that he couldn’t do the job but the supervisors had grand visions instead of smart business sense. The only way I see the county being able to take it over is to either call in their loan and go through foreclosure proceedings (best option) or try to take it by eminent domain, which would require another project being on the board and that’s not going to happen right now.

  16. Shane Doran August 26, 2011 at 11:14 am - Reply

    Blackbeerd said it.

  17. Pat Anderson August 26, 2011 at 5:28 pm - Reply

    The truth of the matter is when SQ fails the City of Chesterfield takes over the fields and can profit handsomely off them. Steve Burton has done them a great favor by running the company into the ground quickly, so that the City will have access to the fields. The vision was great, the leader however, failed to take on quality staff that could have assisted the project.

  18. J Beall August 28, 2011 at 5:15 pm - Reply

    Steve Burton is a terrible businessman. It looks like he should have stayed away from the business side of things. I have heard nothing but horror stories about his business practices. He is not paying people what he owes them? I feel sorry for everyone invovled in this.

  19. Chuck T. August 28, 2011 at 7:20 pm - Reply

    The article stated refunds were made but did not state directly to Sue. I feel some of the statement was misleading such as refunding the money to help Sue with her new venture. That statement makes no sense like some of the others. Frankly smells like a failure here but maybe the silver lining is Chesterfield might own some very very nice fields if SQ defaults and that is not a bad thing. The rest of the land can be developed over time resulting in a quality facility on a lesser scale. Personally I feel SQ is shooting themselves in the foot by stating that we are interested in olympics first and whats left over for their paying memebers implied. Why not become the best regional sports training facility on the east coast and let the reputation speak for itself? If you build the program they will come.

    At this writing this is clearly an organization whose actions not words mean anything. Personally I am looking forward to enjoying the fields for many years and not worrying about who owns them. The fields are the best and largest quantity /quality unmatched in the Richmond metro area regardless of the noise of politics being played out.

  20. DaveM August 29, 2011 at 7:13 am - Reply

    What a complete disaster this project has been. This was a pipe dream from the get go and I think most people knew it. Too bad SportsQuest has screwed over so many people for too much money! There should be lawsuits coming to clean this scam artist out…

  21. J Beall August 29, 2011 at 8:43 am - Reply

    Putting Olympics first? What about all the family memberships and the proposed West Campus? People signed up two years ago, and still have no campus that was promised.

  22. Chris Miller December 15, 2011 at 11:44 pm - Reply

    Wow! Some very interesting specific comments. I’m curious to see the new feedback response to today’s stories about the new board and team behind this initiative now in place.

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