Grand Elk subdivision looks to the future after tumultuous past
April 29, 2015
The Grand Elk subdivision in Granby, on the rebound after years of financial struggles, is a complex mix of overlapping private and quasi-governmental entities.
The 684-lot subdivision is owned variously by regular homeowners, developer Koelbel and Company, and in an odd twist the Grand Elk Improvement District, a quasi-governmental entity made up entirely of the Granby Board of Trustees.
The development has had a tumultuous past. The first developer, Grand Elk LLC, was foreclosed on in 2009, leaving substantial outstanding debts. The Grand Elk Homeowners Association (HOA) took the lead in overseeing the administration of the subdivision afterwards and has worked for the past several years to pay off debt, build up cash reserves, and secure assets.
The work has paid dividends for the HOA which, according to HOA President Dr. Tom Fry, now has significant cash reserves. The HOA purchased the Grand Elk golf course in 2013 and spent over $100,000 last year redoing roads within the subdivision.
"We feel very fortunate following all the problems with the developer and the economy that Grand Elk is financially very sound and stable," said Fry.
The purchase of the Grand Elk golf course was a central goal for the HOA.
"We now have control of the major asset outside of our homes," Fry said.
He explained the golf course itself has significant reserves for capital improvements and the HOA intends to begin using those funds to replace bridges, ball washers and other amenities for the course.
The Grand Elk Clubhouse is currently in negotiations with an outside party to possibly take over management of The Grille, the clubhouse restaurant.
According to Fry roughly one-third of the lots in Grand Elk are owned by private individuals and homeowners, one-third are owned by developer Koelbel and Company and roughly one-third are owned by the Grand Elk Improvement District (GEID).
The GEID recently contracted with real estate broker Paul Chavoustie to market the properties.
The fact that the GEID actually owns real estate in the subdivision and is trying to sell it is quite unique. Granby Town Manager Wally Baird said he was not familiar with another similar situation where a quasi-governmental entity owned property in a subdivision that was for sale.
The GEID was established by the Town of Granby at the request of Grand Elk developer Grand Elk LLC. In such improvement districts, a municipality issues debt for infrastructure and development projects. Funding for the GEID comes from a property tax in Grand Elk.
The GEID Board is made entirely of the Granby Board of Trustees. The Granby Town Manager acts as manager for the GEID as well.
According to Baird the GEID took possession of the lots in Grand Elk at the request of the HOA. The HOA made their request to the GEID because developer Koelbel had not paid system development fees and property taxes on numerous lots in the subdivision that were set to go into default.
Baird explained that Granby Town Attorney Scotty Krob negotiated with the HOA and Koelbel, which resulted in the town receiving numerous lots as "a deed in lieu of foreclosure." Baird said it was an advantage to take the deeds in lieu of foreclosure to help enable future negotiations between the GEID and the HOA. Baird also said a fair amount of money was saved by not going through with the foreclosure proceedings.
Baird explained that any revenues received by the GEID from the sale of property in Grand Elk would go toward paying off the outstanding obligations on the properties, i.e. property tax, system development fees and HOA dues. Baird said any excess revenues that might be received above outstanding debt obligations would go back to the GEID.
Funds from the GEID cannot be used by the Town of Granby and are exclusively for the improvement district.
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