Quote:
Originally Posted by mikeod
Couple of things.
The developer most assuredly has a staff of legal and tax people at his disposal. I would expect their advice to him was that the bnd issue was legal and proper. The IRS expresses some concern but closes the case. Don't forget the IRS is a department that tells taxpayers to come to them for advice on their tax returns, but, if the advice they give is faulty, the taxpayer owes the tax plus interest and penalties. I don't have such confidence in the IRS that I would automatically assume everything they say is 100% accurate. I suspect Morse went back to his advisors and had them review the issue and was told it was proper. Regarding state law, I remember the IRS has in their recent (last few years) review made statements that indicated they did not understand the CDD form of governance as established in Florida.
I would not say I'm completely comfortable with the CDD situation either. It seems that efforts have been made to further dilute the ability of the residential CDDs to have any say in finances especially with regards to the Project Wide funding. However, might this also somewhat shield the residents in this IRS dispute? The dispute is nominally between the central districts and the IRS. The amenities fee is capped by CPI. So the risk to us is the central district having to deplete its funds to pay the government or the bondholders or ??? and the effect that may have on maintaining the amenities to the level we are accustomed. I don't see any way the residents are on the hook for the total that may be due.
The Morse family has created a wonderful community here through some risk and hard work. They do not appear to me to be the type that would sit back and let the community go down the drain by allowing the amenities to deteriorate. They still have significant investments in this community, and they live here as well. Yes, you can sell the commercial property, the real estate office, and the championship golf courses. But the negative publicity of the residents being cheated out of the lifestyle they bought into while the family bolts for greener pastures would assuredly cut into the selling price. Truth is, they can likely make much more money by keeping this place up to the usual standard.
But I agree we need to be alert and aware.
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Clarification - When I said the "we the residents" would pay the financial penalties, I meant that the CDD which we pay into and which controls our amenities, would be paying, and our amenities would possibly suffer. I do agree that the Morses have built a wonderful community, and we all enjoy the lifestyle. I do have concerns though, based on their past history (remember the lawsuit filed against them some years ago), of whether or not they will step up to the plate and make things right if the need arises. With so much money at stake, its not in my nature to sit back with my head in the sand and "trust" a Developer to take care of things. I agree with your statement - we need to be alert and aware.