Grand Elk HOA on the mend |

Grand Elk HOA on the mend

The Grand Elk Homeowners Association, which now controls Grand Elk, is rebounding from the foreclosure of the original developer Grand Elk LLC and is working with the town of Granby, which just made it easier for the subdivision to cover snow removal costs.

The 684-lot subdivision’s homeowners association board suffered when the developer failed to pay dues for about three years, according to board members.

After Bank Midwest of Kansas City, Mo., foreclosed on the developer in 2009, it paid six months of back dues, but a $500,000 deficit remained. Added to the deficit was about $30,000 in bad debt from other lot owners not paying dues.

Since then, the Association board has been working hard to rebuild its cash reserves and repair relationships with the town, the banks and the Grand Elk golf course and club owners, making it “an extremely healthy homeowners association for all of Grand Elk,” said Grand Elk properties owner Stuart Huster, broker-owner of Coldwell Banker Mountain Properties of Winter Park.

Recently, Grand Elk’s General Improvement District board, made up of Granby town board members, voted to dip into $200,000 of GID reserves in the town budget to pay for snow plowing in Grand Elk, an estimated annual cost of $35,000 to $50,000. The money in the fund is generated by a property tax of 10 mills in Grand Elk.

“It was a tremendously favorable move for all the owners of Grand Elk,” Huster said. “I applaud the town for their action in helping the community.”

General improvement districts serve as a financial tool for developments to start up.

The way they work is a town – Granby in this case – issues debt to build infrastructure and improvements. Grand Elk was made possible by a general improvement district that started in 2001. Town board members serve as the ex-officio board for the district, and the town manager serves as the ex-officio manager.

A new energy within the community focused on revitalization may eventually help existing homeowners.

One challenge communities such as Grand Elk face are heavy property taxes compared to outside of such districts.

By example, a home of $400,000 actual value in 2010 assessed at the 7.96 percent rate would have property taxes of $1,681.76 in downtown Granby compared with $3,114.56 in Grand Elk, according to Grand County Assessor Tom Weydert.

In 2010, the tax burden on a Grand Elk home is around 98 mills, compared to a home in Granby proper where the burden is about 53 mills.

The difference is the general improvement district, which has a bond obligation of 35 mills for debt repayment and another 10 mills at present for an operational budget – the latter fund where money was found for Grand Elk snow removal.

In addition, property owners pay homeowners dues in the amount of $720 a year.

In essence, Grand Elk homeowners are “triple taxed,” paying General Improvement District property taxes, taxes as residents of Granby and homeowners fees, pointed out Granby Town Trustee Greg Mordini, a Grand Elk resident.

A saving grace for the community’s lot owners and homeowners would be more residents buying into the community and building homes. Added community value comes with a more extensive home inventory. This reduces each individual homeowner’s tax burden because the overall burden is shared by more homeowners.

“A decrease in tax burden, by any means, or an increase in services received for that burden, would bring a better balance to the cost-service equation,” said Grand Elk Homeowners Association President Tom Fry.

“This balance will make the development more attractive to potential buyers and developers. That will stimulate building, local purchases, new residents and ultimately additional revenue for the town – a win-win situation.”

The biggest attraction in Grand Elk right now, according to Huster, is that “prices are incredibly low” in a community with completed infrastructure: utilities, paved roads, and an operating community pool, clubhouse, and golf course.

Vacant land prices have fallen by about 70 percent since 2008, he said, and prices of homes have gone down by about 40 to 50 percent. Golf-course lots have depreciated from about $189,000 in 2008 to about $69,000 now, and there is a “plethora of inventory,” he said.

Yet in spite of the deals, just three homes have gone under contract in Grand Elk in 2010.

Huster, who serves on the Grand Elk design review board, said he believes the stagnant market in Grand Elk is in part due to the economy and in part due to a perception of instability in the wake of foreclosure on the main developer.

With Grand Elk’s homeowners association now solvent and with reserves in the bank, and with the golf course and club assets owned separately “free and clear,” the community is ripe for further development, according to Huster.

The Grand Elk Homeowners Association has control of the development, and Fry reports that about 60 percent of the Association’s budget is devoted to rebuilding the reserves, with 30 percent devoted to operations – the bulk of which is snow plowing, road maintenance and repair.

“It seems to me, the club is in good condition, the HOA is in good condition, the banks that own properties are in good condition and are paying dues,” Huster said.

“More development makes good economic sense.”

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