Future Cost: Private to Public Transfer

[coolkayaker1]

The Villages: Florida's Disney World For Retirees : NPR (http://www.npr.org/templates/story/story.php?storyId=125389925)

My wife, Cathy, and I are considering the Villages, but one concern remains for me: the future governmental and infrastructure costs.

The NPR article and book referenced above (link) confirm that the private developer, Gary Morse, owns TV except for the individual homes. As in any new condos, subdivisions, etc., the developer owns everything and initially bears 100% of all costs, sells off parcels or units, then eventually, when all sold, exits and leaves the owners to themselves for the continued financing of the infrastructure, commons and public spaces.

A common scenario (not saying this is TV, but it could be): developer subsidizes infrastructure --golf courses, town squares, shops, media (radio, television, press), offers reduced rents to restaurants, etc.--to maximize "show" and gain fullest profits from home sales (which is where the developer makes his money). When home sales completed and developer obviously has no further financial gain in paying for general daily maintenance and function, owners experience skyrocketing property tax and residential/condo fees to now pay for the extensive infrastructure (most often an infrastructure that they, themselves, would not have voted for if asked in a traditional town referendum for property tax increase to pay for said structure). Even businesses (eg developer owner or leased bowling alley), although charging a fee (e.g. to bowl), once private developer reduced rent subsidy ceases, the business often cannot survive on fees alone.

I have a basic understanding of the bonds and the property tax structure of TV.

What will the future hold for the governmental and fiscal structure of TV? Is there a legally defined succession plan, and accountancy estimates for the post-private developer Villages?

Thank you for any comments, or links to other related threads. I'm sure extensive thought has been given to this crucial next step as TV finishes its build out in the upcoming very few years. I respect your thoughts and knowledge on this subject. Thank you.

Steve

[ilovetv]

Everything is here at our local government Community Development District website.

See Budgets:

VCDD Budget (http://www.districtgov.org/departments/budget/budget.aspx)

And Capital Improvement Budgets:

Village Community Development Districts (http://www.districtgov.org/departments/budget/CIP.aspx)

There is also a weekly class on our local government and how it's funded:

VCDD Orientation (http://www.districtgov.org/school.aspx)

[mulligan]

The CDD's are in place to continue what has been started. Fee increases tied to CPI cannot accelerate faster. Maintenance of common areas is covered by you annual maintanance on your tax bill. Water and sewer, to date, are self-sustaining. It all seems to work.

[TNLAKEPANDA]

Those are some very good points. I do not know if the developer is subsidizing anything at all. It would be interesting to know. The economy in TV is pretty robust and I am sure that the shops, restaurants and golf courses can be self-sustaining. May be not all the golf courses but the better run ones will do just fine.

[coolkayaker1]

I appreciate the links above and will study them. Thank you, iloveTV. (PS I looked them over--they are for now, not the post-Morse future. Please direct me if I missed that part). Thanks, Mulligan, but as a native Massachusetts person myself (born and raised in western MA, lots of time in Worcester--love it, but for the snow), you and I know taxes.

Residents cannot, as TNLakePanda points out, know the amount of business subsidy provided by developer to restaurant/shop renter. The subsidy comes in a private business interaction between developer and renter. Although businesses can appears to be flourishing, it can be because of a developer providing attractive rents. When the developer is done selling homes, they next sell the strip malls/retail shops, the new owners attempt to make money from the retail space alone (they have no homes to sell), and the house of cards falls: retailers exit, vacancies open, property tax and business sales taxes decline, homeowner's taxes rise, home values decline, etc.

We have a family friend who owns a gorgeous condo in a large, six-year old development in Ft Meyers, FL where they have a restaurant, private retail rentals (e.g. private shops on premises), two large pools, tennis courts, etc. Now that the units are 90% sold (and the developer is 90%+ out--a legitimate developer, highly regarded, who followed the prescribed succession plan), her condo fee has spiked from $500/month to $1200/month in only 36 months--it was stable in the prior 3 years (when the developer was footing the bill on the upkeep), and it's still going up! The condo association is now trying to sell off the restaurant and retail privately to get control of spiking monthly costs, and wondering whether they need two large swimming pools, trying to renegotiate the cleaning and maintenance contract for their "village square" area, etc. It's, in a word, a fiasco.

Just background to know where I'm coming from. The bonds for TV, undoubtedly, have gone up precipitously from first developments to current Brownwood--much much faster than CPI.

Perhaps TV has a more carefully thought out plan than hers, specifically when the Morse family exits TV, and includes projected costs.

Seriously, I'll be quiet now and listen. lol Sorry so long. Thanks for any information.

[Bogie Shooter]

Those are some very good points. I do not know if the developer is subsidizing anything at all. It would be interesting to know. The economy in TV is pretty robust and I am sure that the shops, restaurants and golf courses can be self-sustaining. May be not all the golf courses but the better run ones will do just fine.

How do you make the distinction of what is better run?

[Bogie Shooter]

I appreciate the links above and will study them. Thank you, iloveTV. (PS I looked them over--they are for now, not the post-Morse future. Please direct me if I missed that part). Thanks, Mulligan, but as a native Massachusetts person myself (born and raised in western MA, lots of time in Worcester--love it, but for the snow), you and I know taxes.

Residents cannot, as TNLakePanda points out, know the amount of business subsidy provided by developer to restaurant/shop renter. The subsidy comes in a private business interaction between developer and renter. Although businesses can appears to be flourishing, it can be because of a developer providing attractive rents. When the developer is done selling homes, they next sell the strip malls/retail shops, the new owners attempt to make money from the retail space alone (they have no homes to sell), and the house of cards falls: retailers exit, vacancies open, property tax and business sales taxes decline, homeowner's taxes rise, home values decline, etc.

We have a family friend who owns a gorgeous condo in a large, six-year old development in Ft Meyers, FL where they have a restaurant, private retail rentals (e.g. private shops on premises), two large pools, tennis courts, etc. Now that the units are 90% sold (and the developer is 90%+ out--a legitimate developer, highly regarded, who followed the prescribed succession plan), her condo fee has spiked from $500/month to $1200/month in only 36 months--it was stable in the prior 3 years (when the developer was footing the bill on the upkeep), and it's still going up! The condo association is now trying to sell off the restaurant and retail privately to get control of spiking monthly costs, and wondering whether they need two large swimming pools, trying to renegotiate the cleaning and maintenance contract for their "village square" area, etc. It's, in a word, a fiasco.

Just background to know where I'm coming from. The bonds for TV, undoubtedly, have gone up precipitously from first developments to current Brownwood--much much faster than CPI.

Perhaps TV has a more carefully thought out plan than hers, specifically when the Morse family exits TV, and includes projected costs.

Seriously, I'll be quiet now and listen. lol Sorry so long. Thanks for any information.

What assumptions did you make to come to this conclusion?

As to, as you put it, the post-Morse future..............I think you will need a crystal ball to determine that. The Morse family does not divuldge their long range plans. However, your further review of the links in post #2 will help you understand what is in place. Far, far different than your family friend above.

[Mikeod]

The difference may be that the residents here are already paying for the executive course, rec center, other amenities' maintenance. Those north of 466 are already owned by the central CDD (VCCDD). All is done through our amenity fee which can only rise with the CPI. Funding for the purchase of the facilities was through bonds guaranteed by our amenity fees.

Those south of 466 are still owned by the developer, but maintenance and repair are still funded by our amenity fees. Eventually, when the IRS question is resolved, the amenities will be sold to the SLCDD in the same manner as the north along with the ability to collect our amenity fees which are currently going to the developer.

The town squares and championship golf courses are owned by the developer. Whether he retains or sells them should not affect our amenity fees. But, if sold, could certainly affect our lifestyle.

I don't foresee our amenity fee rising as in the example above.

[Carl in Tampa]

Residents cannot, as TNLakePanda points out, know the amount of business subsidy provided by developer to restaurant/shop renter. The subsidy comes in a private business interaction between developer and renter. Although businesses can appears to be flourishing, it can be because of a developer providing attractive rents.

Contrary to your assumption, I have been told by employees of various businesses in The Villages that in those buildings which are owned by the developer, the business not only pays appropriate rent but also pays a negotiated percentage of the profits that the business makes to the developer.

And, on the highways where many of the businesses "in" The Villages are located, US 27/US 441 and CR 466, the businesses are not actually in The Villages or owned by the developer, so there is no subsidy to lose.

And, of course, the local towns of Wildwood and Leesburg, and nearby Ocala have businesses that benefit from patronage by residents of The Villages.

There is no shortage of places to shop.

[Indydealmaker]

I appreciate the links above and will study them. Thank you, iloveTV. (PS I looked them over--they are for now, not the post-Morse future. Please direct me if I missed that part). Thanks, Mulligan, but as a native Massachusetts person myself (born and raised in western MA, lots of time in Worcester--love it, but for the snow), you and I know taxes.

Residents cannot, as TNLakePanda points out, know the amount of business subsidy provided by developer to restaurant/shop renter. The subsidy comes in a private business interaction between developer and renter. Although businesses can appears to be flourishing, it can be because of a developer providing attractive rents. When the developer is done selling homes, they next sell the strip malls/retail shops, the new owners attempt to make money from the retail space alone (they have no homes to sell), and the house of cards falls: retailers exit, vacancies open, property tax and business sales taxes decline, homeowner's taxes rise, home values decline, etc.

We have a family friend who owns a gorgeous condo in a large, six-year old development in Ft Meyers, FL where they have a restaurant, private retail rentals (e.g. private shops on premises), two large pools, tennis courts, etc. Now that the units are 90% sold (and the developer is 90%+ out--a legitimate developer, highly regarded, who followed the prescribed succession plan), her condo fee has spiked from $500/month to $1200/month in only 36 months--it was stable in the prior 3 years (when the developer was footing the bill on the upkeep), and it's still going up! The condo association is now trying to sell off the restaurant and retail privately to get control of spiking monthly costs, and wondering whether they need two large swimming pools, trying to renegotiate the cleaning and maintenance contract for their "village square" area, etc. It's, in a word, a fiasco.

Just background to know where I'm coming from. The bonds for TV, undoubtedly, have gone up precipitously from first developments to current Brownwood--much much faster than CPI.

Perhaps TV has a more carefully thought out plan than hers, specifically when the Morse family exits TV, and includes projected costs.

Seriously, I'll be quiet now and listen. lol Sorry so long. Thanks for any information.

Your friend may do well to spend some time reading the Florida Condo Statutes. Condo associations do not have carte blanche on fee increases.

If the board adopts an annual budget in which assessments exceed 115 percent of assessments for the previous fiscal year, 10 percent of all voting interests may petition for a unit owner meeting in order to adopt a substitute budget.

[asianthree]

My crystal ball says everything will be as perfect as I want it to be..I will not worry about things I can not change

[Harry Gilbert]

Coolkayaker1,
You are not alone in your concerns. Depending on your age the concept of "long term" is relavent. I'm in my early 50's and 30 years sounds right to me, But a lot on this board are working on (as I have seen others call it)the 15 year plan.
And from the vibe of this board most don't care about the after buildout. It won't be their problem. So search homes/areas with your heart but purchase with your head.

[Bogie Shooter]

Coolkayaker1,
You are not alone in your concerns. Depending on your age the concept of "long term" is relavent. I'm in my early 50's and 30 years sounds right to me, But a lot on this board are working on (as I have seen others call it)the 15 year plan.
And from the vibe of this board most don't care about the after buildout. It won't be their problem. So search homes/areas with your heart but purchase with your head.

Are you a residient?

[kstew43]

when we go to the nightly entertainment, Brownwood and Lake Sumpter Landing, they always have a announcement that they make once or twice a night that says the entertainment is being subsidized by Sumter County.

So as of now they are not self selficient, which is only reasonable being new and not totally completed, but why would Morse(the villages management) required the financial support of the County to continue the nightly entertainment ??.

I enjoy the entertainment and wonder what will happen at build out.....I would really miss it.

[Harry Gilbert]

Are you a residient?

Does it really matter?

I stand by my post

[Bogie Shooter]

Does it really matter?

I stand by my post

Just wondering, if you are a resident how you got around all those concerns.

[Bogie Shooter]

when we go to the nightly entertainment, Brownwood and Lake Sumpter Landing, they always have a announcement that they make once or twice a night that says the entertainment is being subsidized by Sumter County.

So as of now they are not self selficient, which is only reasonable being new and not totally completed, but why would Morse(the villages management) required the financial support of the County to continue the nightly entertainment ??.

I enjoy the entertainment and wonder what will happen at build out.....I would really miss it.

The support from the county as explained by the county administrator is because residents of the county benefit from the entertainment. Plus people come from outside the county which in the long run benefits all residents.
That is how the county has choosen to spend some of their tourist budget.
Could it stop, I suppose it could.

[dewilson58]

Coolkayaker1,
You are not alone in your concerns. Depending on your age the concept of "long term" is relavent. I'm in my early 50's and 30 years sounds right to me, But a lot on this board are working on (as I have seen others call it)the 15 year plan.
And from the vibe of this board most don't care about the after buildout. It won't be their problem. So search homes/areas with your heart but purchase with your head.

Me Too..........Early 50's wondering. When you are young like us and a resident, it's good to think about the future..............when the future could be 30 to 40 years.

[TrudyM]

The bonds for TV, undoubtedly, have gone up precipitously from first developments to current Brownwood--much much faster than CPI.

.

As I understand it bonds are not an ongoing recurring thing. The bond everyone speaks of is attached to the lot and reflect the cost of the initial construction of the public works infrastructure. The amount of the initial bonds differ by unit (area of TV) because the cost of building these infrastructures have changed over time. You have the option of paying off the bond at purchase and as the interest rate is well over prevailing a lot of people do so. It is just an artificial way of making the houses look cheaper it is a marketing trick of sorts for the real cost of a house take the price and add the bond. If you are speaking of some other bond please enlighten me, as I am unaware of it.

[dewilson58]

As I understand it bonds are not an ongoing recurring thing. The bond everyone speaks of is attached to the lot and reflect the cost of the initial construction of the public works infrastructure. The amount of the initial bonds differ by unit (area of TV) because the cost of building these infrastructures have changed over time. You have the option of paying off the bond at purchase and as the interest rate is well over prevailing a lot of people do so. It is just an artificial way of making the houses look cheaper it is a marketing trick of sorts for the real cost of a house take the price and add the bond. If you are speaking of some other bond please enlighten me, as I am unaware of it.


Yep Yep Yep..................I always looked at the bond amount as additional cost of the lot. The bond structure is used to spread the infrastructure costs PLUS one billion dollars for the developer.

[Bogie Shooter]

Yep Yep Yep..................I always looked at the bond amount as additional cost of the lot. The bond structure is used to spread the infrastructure costs PLUS one billion dollars for the developer.

I guess the developer is in it to make money...............you had a choice.

[Bonnevie]

once again, I'm aghast at some of the replies to this poster's thoughtful question. He was looking for information so he could make an informed decision....because he likes The Villages. There is no need to tell him to stay in Massachusetts or consider someplace else.
I never understand some people's need to attack the person.....

[GPGuar]

once again, I'm aghast at some of the replies to this poster's thoughtful question. He was looking for information so he could make an informed decision....because he likes The Villages. There is no need to tell him to stay in Massachusetts or consider someplace else.
I never understand some people's need to attack the person.....

:agree:The op was just asking a question, I live in the villages and had the same concerns... and still do.

[villagerjack]

PARALYSIS THRUOGH ANALYSIS....Stopped by the Sales Center today... Board shows 61 clisings in the last 3 days...My home, purchased 7 years ago is now 20% higher in value! meaning I have essentially been snowbirding for 7 years, essentially for free, while enjoying the tax benefits and home appreciation. Been through a past build out in SC before coming here...transition was as smooth as can be. Keep analyzing and I will continue enjoying this great place called THE VILLAGES! BTW, the NPR linked article...ckearly a hit piece on Gary Morse from the otrageously left wing NPR.

[rubicon]

:agree:The op was just asking a question, I live in the villages and had the same concerns... and still do.

Agree I have lived here 7 1/2 years and still have questions and concerns so go with your instincts.

[rubicon]

I have lived here 7 1/2 years and I still have questions and concerns go with your instincts