Quote:
Originally Posted by shuffleboard
Your missing the point... These bonds are mostly for the pure profit for the developer.
For Example, The Savannah performing center cost the developer 7 million to build. He sold it to the CDD (his appointed individuals) for 25 million based on an income stream asset valuation, over the next 30 years. The CDD issued bonds for 25 million which the residents are paying off with ammenity fees. The difference of 18 million went into the profit column of the developer. That's what has the IRS concerned about and why they are questioning the tax free status of the bond.
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To a point....
Why would the developer build the Savannah Center if not for a profit? He sold it for $25M based on the present value of a future earnings stream. Did he make a lot of money? Yes. But the Savannah Center provides entertainment for a price, which presumably the CDD then recovers.
As far as the tax free status of the bonds - let's wait and see. We can speculate until the buffalo return, but ...
Kate
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Holyoke, Mass; East Granby, Monroe, Madison and Branford, Conn; Port Clyde, Maine; North Myrtle Beach, SC; The Village of Bonita (April 2009 - )
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