Quote:
Originally Posted by villages07
Jan.... from what I understand, the central CDD not only bought the facilities but also the right to collect amenity fees for a certain number of rooftops in perpetuity. It is this future revenue stream that adds the value not the raw building cost.
I am not adn accountant nor ever pretended to be one but this is how I have heard it explained.
Sorta like buying a successful business...you don't just buy the brick and mortar, you are buying the customer base, goodwill, value of the name, future contracts, etc.
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Your understanding is correct, as far as it goes.
One of the questions being examined by the IRS is the methodology that was used to value the futue income stream when the Developer sold the assets to the Center Districts. The IRS argues that the methodology used resulted in an overvaluation of the assets and thus an over-issuance of bonds. The proceeds of the sale of the bonds were used to pay the Developer.
In other words, the IRS is arguing that the Developer improperly used purportedly tax exempt bonds to enrich himself at the expense of the U.S. taxpayer, which subsidized the bonds through the tax exemption. The Developer denies this.
Time will tell who will prevail, but we should hope that the Developer does because of the huge potential liability of the Center Districts, which furnish us with our amenities. In the meantime, the Daily Sun headline, which indicated that the matter had now been resolved in favor of the Developer and which provoked happy posts at the beginning of this thread, was, at best, inaccurate. Let's just hope that it was merely premature.