Grand Park developer wants taxation-limit and timeline increases
For Sky-Hi News
The developer of Grand Park in Fraser is asking the Fraser Board of Trustees to change the taxation structure for property owners in Grand Park in such a way that it would extend the timeframe owners are expected to pay taxes, increase their debt and expand the number of metropolitan districts in the development.
Cornerstone Holdings is the developer of Grand Park, which is located in Fraser, between the boundary with Winter Park and the Foundry Cinema and Bowl and Murdoch’s shopping center.
While the taxation changes would only impact the owners in Grand Park, some Fraser residents see the developer’s request as an opportunity for the Fraser board to address ongoing concerns about Grand Park relating to open space dedication, employee housing and the naming of the Cozens Meadow.
Cornerstone, through its representation on the metro tax district boards, is asking for a tax increase on property owners over a 40-year period. This would give $199 million to the three metro tax districts set up to collect property taxes to pay for infrastructure. The change Cornerstone is asking for would amend the original service plans agreed upon by the Town of Fraser in the early days of the Grand Park development. The service plans are the legal documents through which the town gives Grand Park the authority to be a governmental entity that can levy and collect property taxes. Terms of that authority are spelled out in the service plans.
The three metro districts are, in essence, the developers of Grand Park infrastructure, as allowed by the State of Colorado’s metropolitan district law.
Metro tax districts are run by a board, which in this case consists of Clark and Meredith Lipscomb. Clark Lipscomb is the president of the real estate division of Cornerstone Holdings, the investment entity that is developing the Grand Park subdivision, who manages Cornerstone Holdings properties in Grand County. Meredith Lipscomb is his wife.
Due to the particulars of the metro district taxation structure allowed by state law, the developers of a property can control taxation and development decisions without a direct vote of new property owners throughout the districts. The metro districts overlay the Grand Park property.
The Grand Park metro districts maintain that taxation structure changes are needed to phase development in the new districts and to cover increased costs. They also say more time is needed to finish improvements.
These requests are spelled out in a cover letter from law firm Spencer Fane LLC, which represents the districts. The letter also cites the depressed economic conditions from 2007-2009 as another circumstance that is forcing the need for the changes.
A critical aspect of the changes is that they proposal to restart a 40-year repayment period in 2023, which means that property owners would pay a 50-mill property levy until 2063, beyond the current termination date of 2050. The developers say the additional taxation would pay for the needed infrastructure improvements.
The requested changes have drawn the attention of former Fraser mayor Peggy Smith and other Fraser citizens concerned about open space, affordable housing and an apparent name change to Cozens Meadow that appears in the documents.
Smith said she’s concerned about possibly changing the name of Cozens Meadow to Grand Park Meadow and the location of recreation improvements, including a fieldhouse in the open space conservation easement that has been contested by Grand Park. These new changes are on the conceptual maps included with the proposal presented to the town and do not appear on previous maps of the area.
“It is imperative that the development of Grand Park, through these metro district service agreement changes, be held accountable for the 466 acres of open space and the affordable housing requirements which were part of the original 2003 annexation agreement that brought Grand Park into the Town of Fraser,” Smith said.
The demand for affordable housing needs to be addressed in any changes, she said, as well as considerations for the funding of schools and other public impacts of such development, including police protection, water, sanitation and fire protection.
Spencer Fane submitted a formal request to the Town of Fraser in a letter dated July 6. The letter is from attorneys representing the West Mountain Metropolitan District, West Meadow Metropolitan District and Byers View Metropolitan District.
The town of Fraser is currently reviewing the service plan amendment and will schedule at date to bring it before the board of trustees after the review is completed, Fraser town manager Ed Cannon stated in an email.
The Town of Fraser has the power to approve revised service plans for the tax districts. Those service plans cover issues such as the boundaries of the districts, the amount of debt that can be accrued by the districts to pay for infrastructure improvements in the districts, and the length of time that property taxes can be assessed to pay for the improvements, among other issues.
The first proposed amendment to the service plans calls for removing reference to the West Mountain Metro District and creating four additional metro districts for “phased development in the West Mountain area, which are largely in the underdeveloped area west of the railroad tracks.
The metro districts are also proposing to clarify that the total debt issuance limit for Byers View and West Meadow, the other two districts, is $99 million. However, the districts are proposing to add another $200 million in debt limitation for the new and amended West Mountain Districts, bringing the total debt limit for all the improvements in all three districts to nearly $300 million.
The letter from the attorney for the three districts states this is needed because of an increase in the costs of the public improvements and construction the districts are financing.
The third part of the developers’ request to the town clarifies that the districts are subject to a 40-year maximum term for bond issuance and that they have a debt service mill levy cap of 50 mills, the tax rate that is applied to the assessed value of a property.
The districts say they experienced delays to the development as a result of economic conditions unfavorable for development, necessitating the need for time and debt limit expansions.
“The Districts are now in a position to resume development after the economy has experience sustained improvement in the last few years,” the request letter states. Districts are asking for “flexibility to issue debt in accordance with development occurring within their boundaries.”
The letter also asks for permission to “finance and construct limited park and recreation improvements” because such assets are limited in the district boundaries. While the request would allow such construction, once completed, the letter states the districts will not “own, operate or maintain such improvements.”
The request letter states that the new service plan for the new district is “substantially similar” to the service plan for the other district, giving the districts authority to provide public improvements, including sanitary sewer, water, traffic and safety control, street and park and recreation improvements and facilities,” with the same caveats about not owning, operating or maintaining the improvements.
For the new districts and the West Mountain District they include 1,109 acres of residential and commercial property with an estimated cost of public improvements at build-out to equal $1.29 million with a total debt issuance limitation of $200 million. The same “financial restrictions” apply for the West Mountain district: 40-year term for bonds, 50-mill debt service cap and an interest rate cap on reimbursement agreements of 8%.
“We have prepared an amendment to the Intergovernmental Agreement between the District and the Town to address the modifications to the Service Plan and the formation of the West Mountain Metropolitan District Nos. 2-5,” the letter states.
The developers are asking the town to review the first amendment to the plan and the service plan for the West Mountain Districts.
Concerned citizens hope to give the proposed service plan changes sufficient public review through the Fraser Board of Trustees so that issues related to Grand Park and the Fraser community can be addressed.
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