Quote:
Originally Posted by JimJoe
Kate, I don't understand. . You chose the Savannah Center to discuss future revenue earnings.. Do you really think it is that profitable? Even if true.. explain what the revenue earnings are for golf courses, pools, tennis courts, softball courts, etc that can only be used by residents and their guests, renters, and lifestyle previewers, at no cost beyond the amenities fee. Was a "profit" including future earnings made on those too? Isn't the main problem the IRS has that this "profit" is being for a non public purpose and therefore should not be tax free? Wasn't the increased value to the surrounding land the "profit"? Do you count the amenities fee as future revenue earnings? I don't think villagers think those fees were intended to be for profit nor do they think that they were marketed that way. If the district bought the land and paid for "future earnings profits", who is getting those profits now after it was purchased? And where is that money going? How can a seller claim the price of property upon which a village amenity was built reflects their hard work that would generate future earnings when at the time they were built the amenity apparently could never have any future earnings because only the villagers and the invited would use them forever at no cost beyond the cost of maintaining them with the amenities fee? I thought the golf courses, pools, tennis courts etc will be here for the villagers as long as the amenity fees are paid and they will not be sold and run for profit in the future? Doesn't the advertisement say "play golf free the rest of your life"? If I am right , there would be no future earnings. The amenities fee should only reflect the cost of acquisition and maintenance. If I am wrong, I am more confused than ever.
On your first post you talked about the cost to villagers if the IRS preliminary ruling stands. You did not address the question who pays the cost if bond holders are charged interest and penalties by the IRS for the years the bonds are denied tax exempt status. Those bonds go back several years. Who pays that and how much can interest and penalties be on those bonds if they are denied tax free status? If they did get IRS approval why are they reviewing it now?
I appreciate your expertise and hope you can clear those up for me. Thanks.
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Hi,
You have a lots of
really good questions that I can't answer - but hopefully which we will get answers to as this develops. There are a lot of parts of this transaction that could impact the status of the bonds, how they affect the bondholders, the developer, the CDD and us as Villagers.
I don't know if the transactions were "arms length," if any original IRS
determinations will be overturned, how the value of income from all these properties should be valued (put 10 accountants in a room and get 10 answers), was it double counted, etc etc.
My remarks were just to clear up some comments that seemed to not understand what a bond represented and others that villified the developer for making a profit. Ms. Ritchie writes an article we should all read - but which we need to interpret along with all of our knowledge and not take as fact. We should not shoot the messenger, but we should question her motives and those of her IRS source. Like Chelsea, I believe "what we get" for what we pay in TV is worth it.
Right now I think we can all learn as much as we can or put our head in the sands or start playing the blame game. I think your questions and those of a few previous posters agree that #1 is our best choice.