Creation of a metro district
BRECKENRIDGE – Breckenridge Town Council members got a first glimpse earlier this week of a proposal to create two metropolitan districts to fund and service new development Vail Resorts hopes to build at the bases of Peaks 7 and 8.
Ski resort development officials are on a tight deadline to get a proposal to create the two districts on the Nov. 5 election ballot; if they miss the Sept. 11 deadline, they will have to wait until next fall.
Resort officials want to create two districts – a financial district, from which revenue would be generated, and a service district that will be in charge of building infrastructure. Infrastructure includes not only such things as roads, water, sewer and parks and recreation, but also transportation – of note, the proposed gondola from Watson parking lot to the base of Peak 7.
Traditionally, a developer or neighborhood forms a single metropolitan or special district that then can levy property taxes to fund community needs. According to Steve Jeffers, an investment banker who represents Breckenridge, there are various reasons why it is better to have two metropolitan districts.
It all begins with how long it will likely take to complete development of the Peak 7 and 8 base areas, Sawmill and Watson parking lots and other parcels the ski area owns.
“If you have one metro district, then as people move into the development, they take over the board,” Jeffers said. “They are responsible for living up to the promises of the developer, but they don’t always want to.”
Leaving metro districts in the hands of the developer until construction is complete usually ensures a project will be finished as planned.
Under the terms of the draft proposal presented to council Tuesday, development officials want to place on the election ballot a question that creates the two districts. The only eligible voters are the owners of the property in the district – in this case, Vail Resorts. Vail Resorts is the sole owner of the land on which the improvements would take place, and thus the only ones entitled to vote on the creation of the districts.
Breckenridge Ski Resort Chief Operations Officer Roger McCarthy will cast the sole vote in that election, said Matt Sugar, spokesman for Vail Resorts.
If approved, the ski company would like to issue $14 million in bonds to pay for some of the infrastructure, including the beginning of the gondola.
To repay those bonds, company officials propose to impose a mill levy of 20 mills and a one-time $2,000 “facility impact fee” on new homeowners. A subsidy from Vail Resorts would pay for the interest accrued – about $4.3 million – until homes are built and property tax revenue generated.
As homes are built, the Breckenridge Mountain Metro District would collect tax revenue generated by a 20-mill property tax and fund infrastructure, operations and maintenance through the Alpine Metro District.
The ultimate cost of all infrastructure is estimated to be $39 million, Jeffers said.
“One way or another, they’ve got to put in this infrastructure,” Jeffers said. “They could get it from capital markets, taxable basis, pay some big dollars or go this way.”
Town council members want to be sure they understand what it is they’re getting into, said Mayor Sam Mamula, and are glad a provision in the draft proposal includes a review and approval process.
“It’s confusing as hell to a layperson like myself,” Mamula said. “This is a big deal. We have to understand it.”
Jane Stebbins can be reached at (970) 668-3998 ext. 228 or firstname.lastname@example.org.
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