Hi Lauren,
First, thank you for posting here and for agreeing to respond to questions. You have taken a lot of heat on this forum for your opinion columns about the bonds.
I have a comment and some questions. The comment concerns the fact that the central CDDs, rather than the developer per se, will collect the amenitiy fees for 30 years. I do understand that TV homeowners will not own the amenities at the end of the 30 years. But it also is true that if the developer were still collecting the fees directly, and had not established the two central CDDs, the homeowners still would not own the amenities after 30 years. Same difference on that particular point.
I also think I understand the IRS agent's reasoning in questioning the tax-exempt status of the central CDDs. Whether the developer and his attorneys found a clever and legal way to establish the two CDDs to issue tax-exempt bonds to finance the future fees, or whether the IRS eventually rules against the developer remains to be seen.
However, if the IRS rules that the central CDDs did not meet the criteria for issuing tax-exempt bonds, wouldn't the developer be responsible for paying the taxes on the bonds, inasmuch as he owns and controls the two CDDs? What is your opinion on this?
I suppose the developer could try to use amenity fees to pay the taxes and refinance the bonds, but then I would think 80,000 + homeowners could justifyably and easily get class-action status to fight such action. Yes, that would be a costly mess, but it also seems so unlikely, don't you think? The developer would never sell another house, here or anywhere. Has anyone ever managed to cheat 80,000 people and stay in business.
If Morse found a legal instrument for financing the future amenity fees, what of it? We TVers wouldn't own the amenities after 30 years with or without the two central CDDs. If the IRS rules against him, he'll owe back taxes, not us. Am I wrong?
I also agree with the previous poster. Obviously, bond counsel approved the sale. Also, what, if anything, do you think would be the repercussion to the bond holders?
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