A couple of things. First, what scandal. It is clear that the Florida Legislature passed laws to allow CDDs to qualify to sell tax free municiple bonds. Did the developer do it exactly right? Maybe, maybe not. A scandal, or a technical violation of a complex set of State and Federal laws.
Did the CDDs and VCDDs pay too much for the amenities? Maybe, maybe not. So what. The deal works and we get the best amenities in all of Florida for the lowest price of anything comparable. Add in all the defunct CDDs around the state, and things are looking pretty good here.
So, run some numbers. Worst case, about $400 million in bonds over 8 years at maybe 6% get disqualified. That is $192 million in total interest. Lost taxes to the IRS at 33% is $63 million. Make it $100 million with interest and penalties. Not sure how many homes in The Villages, buy say 85,000 at build out. That is about $1,200 per home. Worst case, which is not likely to happen.
With a $100 million tax bill, maybe someone will give Tax Masters a call.
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