1/20/2013 12:04:00 PM Council OKs measure to ease bond debt on Pronghorn homeowners
Ken Hedler Special to the Tribune
The Town Council is supporting a proposal to reduce the debt burden on Pronghorn Ranch homeowners by charging builders about $1,873 for each new home in the subdivision.
The council, meeting as the community facilities district board, plans to vote on the charge next Thursday.
The charge means builders likely would pass it on to whoever buys homes in Pronghorn Ranch, a 1,102-lot subdivision located north of Highway 89A off Viewpoint Drive. The builders would pay the charge in addition to impact fees that they pay to offset the effects of new residents on municipal services.
Homeowners in Pronghorn currently pay $4.80 per $100 in secondary assessed valuation into the CFD to pay off a $7 million bond that town officials authorized in 2002. The council hiked the rate effective this past July 1 from $3.90.
The CFD is a buy-now, pay-later approach, in which homeowners pay off a 25-year bond that is financing public improvements in Pronghorn.
The bond debt, which has been accumulating interest, amounts to $6.3 million, according to Town Manager Larry Tarkowski, who doubles as CFD manager for Pronghorn and other subdivisions with CFDs.
The original developer, Brown Family Communities, deposited $700,000, but the developer closed its doors in 2008 as the housing market collapsed, and its lots went into foreclosure. As of Aug. 14, the deposit had dropped to about $449,530, according to a staff report to the council.
The original developers of Pronghorn, StoneRidge and Quailwood resorted to CFDs to finance public improvements, which lowered the sale prices of the homes. However, Pronghorn differs from the two other subdivisions because it has diverse owners of residential lots, Tarkowski said at Thursday's meeting.
Tarkowski said Town Attorney Ivan Legler came up with the idea of the successor-in-interest standby contribution charge of $1,873.
Legler said homeowners would assume additional burden of the bond payments when developers no longer have to make standby contributions. He said his proposal would lead to a "soft landing."
The resolution brings up issues of fairness, Tarkowski said.
"This approach cuts the attorneys out of the negotiations and therefore cuts the expenses," Tarkowski said.
The proposal drew support from two homeowners who spoke at the meeting.
One of them, Dieter Krantz, said after the meeting that some homeowners have been paying into the CFD from the start. Anyone who buys a new home in the near future will be paying into the CFD for about 12 years.
He mentioned Mandalay Homes has built a number of homes since Mandalay bought 138 lots in 2009.
Mandalay has sold about 45 homes, said Cathi Pospisil, broker associate with RE\MAX Mountain Properties.
Referring to the CFD, she said, "I don't see this as hurting sales."
The CFD costs have become a source of consternation for homeowners in Pronghorn Ranch and other subdivisions.
"Just to remind U all, CFD's are a dumb idea, hopefully to never be perpetrated on any one else," homeowner Barry D'Orazio stated in an email he sent to Tarkowski Friday and copied to the Courier. "It would be preferable to fund development costs up front at the time of home purchase rather than leave us at the mercy of bankrupt developers and/or those who hide their assets."