Grand Park developer discusses potential tax increases with homeowners
For the first time since its creation, the Board of the West Meadow Metropolitan District for Grand Park held a meeting on Dec. 7 with all five board seats filled, including homeowners in the district.
The virtual meeting discussed the amended service plan that Grand Park’s developer, Cornerstone Holdings, presented to the town of Fraser that morning. If the town approves it, the service plan will increase the taxation timeline and debt paid by West Meadow homeowners for services and infrastructure.
Currently, three metro districts make up Grand Park: Byers View, West Mountain and West Meadow. When West Meadow homeowners realized Cornerstone was attempting to increase taxation for infrastructure and improvements without their input, they petitioned to be represented on the board.
At that time, only Clark Lipscomb, Grand Park’s developer who spearheads Cornerstone’s Grand County projects, and his wife, Meredith Lipscomb, served on the board. Clark Lipscomb is the board president and Meredith Lipscomb is the secretary and treasurer, positions they’ve both held since 2012.
On Nov. 15, the developer chose Michael Featherman, Steve Watts and Michael Basel to join the board, ahead of the May 2023 election. Now these three residents are reviewing an updated service plan that directly impacts them.
Clark Lipscomb presided over the meeting, which opened with public comment. Homeowner Deborah Shulman expressed dissatisfaction with what she viewed as the developer’s lack of transparency in operations and posting notices, such as notifying homeowners of upcoming board elections.
“When we bought into Grand Park, we didn’t know we were buying into a metro district, we learned about the district last summer,” said Shulman.
Learning about West Meadow’s potential tax increases prompted Shulman to educate herself on metro districts. She then applied for a seat on the board. Ultimately, the developer did not accept her application, but she plans to run in the May 2023 election, when four seats will be available. She added she believes there is conflict of interest with the developer and his wife serving on the board.
“This (metro district) bypasses a lot of loopholes … I’m concerned,” she said. “I’m glad there’s three residents on the board. I hope they have the fealty to the taxpayers first.”
Shulman stated homeowners should only pay for the debt incurred by infrastructure needs within their metro district, not take on debt to develop infrastructure in other districts like Grand Park’s West Mountain district.
“I hope the new appointees educate themselves about metro districts, their uses and abuses, and read the amendment to the service plan,” she said. “It is very hard to read and understand what it is actually is, which ultimately is to increase our taxes.”
Clark Lipscomb countered that the details of the metro district were spelled out in the homebuying contract, and that Shulman’s belief that elections were held without proper notice was “incorrect.”
During his public comment, homeowner Joseph Landen stated that, based on the language of the amended service plans, it’s possible that the mill levy could increase to 59 mills or more. At the current level of 50 mills, a home valued at $500,000 pays roughly $1,692 a year in taxes.
Clark Lipscomb said Cornerstone doesn’t plan to increase the mill levy, despite concerns by Shulman, Landen and others. He explained that the service plan amendment is necessary to ensure Grand Park can continue to develop, provide infrastructure like water and sewer lines, and eventually build recreational amenities.
Clark Lipscomb added that no bonds have been issued for West Meadow to pay for infrastructure and improvements, to ensure that development was done conservatively, rather than accruing massive debt.
“So you don’t pay a whole lot of interest that didn’t go to infrastructure that benefits you,” he said. “The districts effectively sat dormant … which is a good thing, since there was no (homeowner) tax base to support repayment of bonds, particularly after the economic crash of ’07.”
Homeowners, through their property taxes, pay bonds back over time, reimbursing the developer for infrastructure. Since bonds typically take 40 years to repay back, plus interest, Lipscomb stated the taxation timeline for residents would have to be extended through the amended service plan.
The taxation’s original expiration year was 2050.
Even after increasing the taxation timeline, residents wouldn’t be able fully reimburse the developer without the mill levy being increased, especially now that Cornerstone is ready to move forward with bigger projects.
“Infrastructure likely never gets paid in full, because of the cost of infrastructure and the simple fact that at 50 mills, the tax base is just not big enough to even come close to covering the full cost,” Clark Lipscomb conceded. “… My intent has always been to keep it at the 50 mills where it’s at, but also be in also be in a position that if the tax assessments went way down … as tax assessors determine, the values are stabilized.”
The amended service plan requests that the 50 mill levy cap can be adjusted based on assessed property values, “so someone who’s issued bonds has a reliable cash flow in a real estate market downturn,” Clark Lipscomb added. This is where a potential mill levy increase might be levied to repay the developer.
In Colorado, developers can also refinance bonds to be paid back at higher interest rates, although legislatures have previously attempted to stop this.
Clark Lipscomb then showed residents a map of Grand Park that would reflect new boundaries based on the amended service plan. He said that, to address residents’ concerns about taxation, their proposal is to restrict West Meadow District to its developed portion, which would be under the amended service plan. The undeveloped portions would then become their own district.
“This gives (West Meadow) a tax base that’s understandable and not speculative,” he said. “We would then cap the amount of bonds that would be issued based on that tax base and put closure on West Meadow … we’re trying to respond to (public) comments that the town may be getting, or the town might have.”
Cornerstone plans to cap the new amount at 30 million. This amount would be paid by homeowners over 40 years.
Clark Lipscomb explained this timeline is due to their “slow, methodical approach” which prevents drastically raising the mill levy to pay for quickly thrown up construction.
“That’s not what we want to do,” he said. “We want to build a very high-quality development … and build it in a fashion that enhances and improves the community we live in.”
He said the crash of 2007 and COVID-19 pandemic slowed many of Cornerstone’s projects — such as the unfinished Market Street commercial building off U.S. Highway 40 and proposed recreational facilities — that the developer plans to return to.
“We never quite thought (Grand Park) would take as long as it has to develop … but I think it’s been a good, organic growth that’s allowed us to develop product as market conditions existed,” he said.
He also acknowledged that some developments, like the Fraser Mills affordable housing complex, stalled because of disagreements Cornerstone had with the town. Cornerstone Holdings also faces litigation from the town to preserve Cozens Meadow within Grand Park.
“I’m cautiously optimistic that maybe we’ll get there with the town of Fraser with some of these issues we’ve proposed some settlements on,” he said.
The town is currently reviewing the amended service plan. The metro district’s next board meeting will be on March 9, 2023. Their board election will be on May 2, 2023. Feb. 24 is the last day for a resident to nominate themselves for the election.
Neither Cornerstone nor Cornerstone’s law firm responded to requests for additional comment by publication time.
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