PART 2 Community development in financial crisis

[The Shadow]

Community development districts' house of cards is falling down

Not a nickel' at stake

Shall we go on? Presumably, readers are getting the idea. These "governments" called community development districts are nothing but a money-making arm of the developer. And they are no more stable than the financial security of the firm, at least until the community is sold out. If developers did it the old-fashioned way � by paying for infrastructure up front � residents wouldn't be paying twice for infrastructure and would fare better in a down market.

When community development districts were created in 1980, the logic behind them was to give developers a boost to bring growth to Florida. Today, there are 594 of these districts. So far, only half of them has sold bonds.

The usefulness of community development districts � if there really ever was anything to be gained � is over. Florida has learned that letting developers make obscene profits does, indeed, spur growth. It's the kind of growth that is built like the proverbial house of cards. And that's why it's crumbling now. SNIP�..

http://www.orlandosentinel.com/news/local/lake/os-lk-lauren-ritchie-bond-defaults-0820100825,0,5455479.column

[Lou Card]

Community development districts' house of cards is falling down

Not a nickel' at stake

Shall we go on? Presumably, readers are getting the idea. These "governments" called community development districts are nothing but a money-making arm of the developer. And they are no more stable than the financial security of the firm, at least until the community is sold out. If developers did it the old-fashioned way � by paying for infrastructure up front � residents wouldn't be paying twice for infrastructure and would fare better in a down market.

When community development districts were created in 1980, the logic behind them was to give developers a boost to bring growth to Florida. Today, there are 594 of these districts. So far, only half of them has sold bonds.

The usefulness of community development districts � if there really ever was anything to be gained � is over. Florida has learned that letting developers make obscene profits does, indeed, spur growth. It's the kind of growth that is built like the proverbial house of cards. And that's why it's crumbling now. SNIP�..

http://www.orlandosentinel.com/news/local/lake/os-lk-lauren-ritchie-bond-defaults-0820100825,0,5455479.column

Sorry, but I must ask why you have started only 2 threads in TOTV and both are the same issue?

Do you live in the Villages?

Have you been hurt by a CDD where you live?

I understand the issue, its just that your motives are unclear to me.

[The Shadow]

Sorry, but I must ask why you have started only 2 threads in TOTV and both are the same issue?

Do you live in the Villages?

Have you been hurt by a CDD where you live?

I understand the issue, its just that your motives are unclear to me.

Now that is odd, you had 5 posts under the topic of �HomoSexual Males in The Villages� but after I go to the trouble to provide the second half of the story to the people that were interested enough to read the first half of the story you object to this informative information. I guess we have different values as far as what is important and what is not.

[RVRoadie]

The Villages is one of the few bright spots in the entire US economy. While these articles point out developer abuses in other CDD's througout Florida, it is hardly relavent to us.

Does anybody know of any other retirement communties that are doing better in economic terms than we are here in The Villages.

[Lou Card]

Now that is odd, you had 5 posts under the topic of �HomoSexual Males in The Villages� I think you misunderstood. Yes I posted 5 times in that String, But I was noting that you initiated the Strings about CCD's and those two strings are the only two you have ever initiated. Can you see the difference? I go to the trouble to provide the second half of the story to the people that were interested enough to read the first half of the story you object to this informative information. I do not object at all, as a matter of fact I think anything about the villages is wonderful to read in this site. I do question rather your interest is for the Villages or something more personal. I feel this way, because I also feel The Villages in a non player in this story, but the way you made the string might be misunderstood by Villagers and create unnecessary fear. I guess we have different values as far as what is important and what is not. Can I assume you do not think issues that concern Homosexual Males is worth discussion? Thats OK too, if you feel that way.
Also, it is none of my business, but I am curious if you live in The Villages? If you live here, in my opinion, it would bring more validity to your concerns for our wellbeing about the CDD issues in Florida.

[aljetmet]

I do not live here yet but am curious if the financial condition of the CDDs that are associated with TV are of public record. Any one know? Any link to view?

[Bogie Shooter]

I do not live here yet but am curious if the financial condition of the CDDs that are associated with TV are of public record. Any one know? Any link to view?
Here is a good place to start. http://www.districtgov.org/
Click on Departments.

[memason]

Also, it is none of my business, but I am curious if you live in The Villages? If you live here, in my opinion, it would bring more validity to your concerns for our wellbeing about the CDD issues in Florida.

I had to put on my detective hat and do a little sleuthing on this one... Here's what I found:

On 7/3/2009, in a thread title "Orlando Sentinel what-ifs for The Villages IRS fight", the Shadow wrote:

"Thank you Adogado, exactly the info I was after. As far as the POA meeting, if I lived in The Villages I would join the POA and I would be at that meeting. Until this issue is resolved my moving to TV is on hold.

Does the POA permit visitors/guest? I am an hour and a half away."

On 7/6/2009, in the same thread, the Shadow wrote:

Post Excerpt... "I have come close to buying in TV in the last 10 years several times. I have rented 4 times one time for 4 months."

Given these posts from last year, it would appear that The Shadow does not live in TV. Be that as it may, this is a public forum, open for anyone to express their opinions. As for ones motives...only the poster knows for sure :shrug:

[Opulence]

"only the poster knows for sure" . . . .

Since the poster is the Shadow - and if memory serves me correctly, I believe it goes like this - "The Shadow knows!" <g>

Betty

[Russ_Boston]

The bottom line for me is that all 6 of the developments that are mentioned in the article seem to share one very major component:

NONE of them finished selling the homes that were planned. To date TV has sold every (give or take 100 or so in some form of bulding stage) single home. Yes, if the homes that were planned are not sold then of course the CDD will have trouble paying the bond.

These are not CDD's that were finished and now are having trouble. Buying in FLA can be risky but after you do your homework I think you come to the conclusion that I did: TV seems like a safe bet.

Will it be desirable forever? That might be another question. But I don't plan to live forever:)

Funny thing about the shadow's writing. It seems to be in the same style as Laureen Ritchie who used to post directly on this site. Hmmm!

[BobKat1]

The information and learning is good, IMO. Good information for those in the process of determining where they may want to live in retirement.

[Lou Card]

The bottom line for me is that all 6 of the developments that are mentioned in the article seem to share one very major component:

NONE of them finished selling the homes that were planned. To date TV has sold every (give or take 100 or so in some form of building stage) single home. Yes, if the homes that were planned are not sold then of course the CDD will have trouble paying the bond.

These are not CDD's that were finished and now are having trouble. Buying in FLA can be risky but after you do your homework I think you come to the conclusion that I did: TV seems like a safe bet.

Will it be desirable forever? That might be another question. But I don't plan to live forever:)

Funny thing about the shadow's writing. It seems to be in the same style as Laureen Ritchie who used to post directly on this site. Hmmm!

Nice post Russ: Hopefully this post will remove unnecessary fear from anyone concerned about the big bad IRS.:BigApplause:

[Russ_Boston]

Lou, IRS may be another issue but, even if the ruling is against TV, the $ magnitude of that when split among all the residents doesn't worry me much either.

[JimJoe]

Lou, IRS may be another issue but, even if the ruling is against TV, the $ magnitude of that when split among all the residents doesn't worry me much either.

Russ: I do not live in TV but have looked very regularly for that last 4 years. I just retired this year. I waited because I was not retired and because of the IRS issue and because I believe the economy is still heading down and prices for the types of homes I have been following carefully have dropped gradually but steadily. I have many examples. Now that I am retired I am more motivated to buy but I am still a price shopper. I don't mind renting in the meantime.

What is the magnitude of the IRS issue? The issue seems incredibly slow in resolving. I wonder why. I think it is very hard to determine the magnitude/cost because if the IRS requires the bonds to be purchased and new taxable bonds sold I am afraid it could be very costly to buy back higher interest bonds in this market as the holders would want a premium I think, and that would be in addition to possibly interest and penalty. You have given very good information on this site in the past and I am interested in your opinion.
Thanks

[downeaster]

The bottom line for me is that all 6 of the developments that are mentioned in the article seem to share one very major component:

NONE of them finished selling the homes that were planned. To date TV has sold every (give or take 100 or so in some form of bulding stage) single home. Yes, if the homes that were planned are not sold then of course the CDD will have trouble paying the bond.

These are not CDD's that were finished and now are having trouble. Buying in FLA can be risky but after you do your homework I think you come to the conclusion that I did: TV seems like a safe bet.

Will it be desirable forever? That might be another question. But I don't plan to live forever:)

Funny thing about the shadow's writing. It seems to be in the same style as Laureen Ritchie who used to post directly on this site. Hmmm!

Well said, Russ. They all share another important component and that is they all seem to have got in over their heads financially.

Personally, I would rather be in The Villages than in some smaller development with a large portion of homes in foreclosure. Things are bad out there whether it is a CDD or not.

[bkcunningham1]

The Lauren Ritchie column starts by mentioning the Leesburg, Florida, community of Arlington Heights. She starts her opinion column by writing about the "greedy developer" and how the community went "belly up."

In October 2008, the Daily Commercial ran an article about this very community's Chapter 11 Bankruptcy. This was a reorganizational type of bankruptcy where a corporation or partnership does not put the personal assets of its stockholders at risk. That was two years ago. Why would Ritchie mention that now when it is moving up on 2011?

She failed to mention how the residents volunteered and apparently held the develop together until finances got rolling again. It appears they are still in business.

Perhaps Ritchie didn't do her homework and was just hand fed some information that she didn't double check. I think the concept behind the information is important. But it is more important to get correct information to get the proper concept.

http://www.dailycommercial.com/1029arlington

I looked at the Arlington Ridge bi-monthly newsletter. It appears the place is going strong. Correct me if I'm wrong. I am just saying this based on their website and newsletter.

http://www.myarlingtonridge.com/arlingtonridge/picture/may-june_newsletter.pdf

http://www.myarlingtonridge.com/arlingtonridge/outside_home.asp

[Opulence]

Lou, IRS may be another issue but, even if the ruling is against TV, the $ magnitude of that when split among all the residents doesn't worry me much either.

Russ if it comes to that, & the IRS rules against TV, do you think it would effect those residents who have already paid their bond? Would they have to kick in too? I have wondered about this before.

Does anyone know if there are any stats showing how many bonds have beend paid, and how many are still owed throughout TV?

Betty

[Snowbirdtobe]

The real estate market is in shambles. We've looked at other parts of Florida and prices can be 50% of the outstanding mortgage balance.
We bought in the villages because of the lifestyle. TV prices have held up compared to everywhere else in Florida and we think that it will continue.

My understanding of the IRS position is that the bonds are not tax exempt because no one lives in the districts that issued them. These districts are not a bad investment and I'm sure that many investors would line up to buy taxable bonds for the town centers.
TV is an economic driver for the whole area. Tens of thousands of homes that need services. Take a look at the developers web site that is selling access to us.

http://thevillagescommercialproperty.com/location.asp

Reporters need to find something to write about and many people have been crushed by the real estate downturn so be wary and read everything you can about the IRS issues.

[Bogie Shooter]

Russ if it comes to that, & the IRS rules against TV, do you think it would effect those residents who have already paid their bond? Would they have to kick in too? I have wondered about this before.

Does anyone know if there are any stats showing how many bonds have beend paid, and how many are still owed throughout TV?

Betty
I would think everyone would be treated the same. Whatever "treated" means.
This issue is not something to lose sleep over.

[Pturner]

The homeowners are not the holders of the bonds being challenged. That would be the investors who purchased the bonds. The IRS issue has nothing to do with the bond on the homes.

Someone PLEASE correct me if I'm wrong.

[ijusluvit]

Russ if it comes to that, & the IRS rules against TV, do you think it would effect those residents who have already paid their bond? Would they have to kick in too? I have wondered about this before.

Does anyone know if there are any stats showing how many bonds have beend paid, and how many are still owed throughout TV?

Betty

There has been lots written on the IRS matter. Some of the good stuff is hard to find in a search of threads here. But for my money, the most accurate information is contained in issues of the POA Bulletin. (Thank God for the POA!)

just go here: www.ccfj.net/POABull. You can start by scrolling down to the April, 2009 edition.

[Opulence]

There has been lots written on the IRS matter. Some of the good stuff is hard to find in a search of threads here. But for my money, the most accurate information is contained in issues of the POA Bulletin. (Thank God for the POA!)

just go here: www.ccfj.net/POABull. You can start by scrolling down to the April, 2009 edition.

DARN!

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Suggestions:
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�Search www.ccfj.net for POABull
�Search on Google:
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�2010 Google - Google Home

[bkcunningham1]

This is an excellent source of information about the IRS situation. Starting with the most recent:

http://www.districtgov.org/images/IRSupdates/20100121%20IRS%20Technical%20Support%20Request.pdf


http://www.districtgov.org/images/IRSupdates/20090604%20-%20IRS%20Update.pdf

http://www.districtgov.org/images/IRSupdates/20090416%20-%20IRS%20Update.pdf

[ijusluvit]

Opulence, sorry about the POA link. Try this:

www.ccfj.net/POABull.html

BK - I question the objectivity of the links you suggested. And ps.... I am still waiting for your reply to my post in "Fascism" about the federal government.

[bkcunningham1]

Why would you question the objectivity of one of the parties involved in the issue posting public information that anyone; including the other party (the IRS), can see and use against them if it is false. I'd rather get my information from the source. It is a letter sent to the IRS from the attorney.

[Pturner]

I have been reading these posts over the last year and have avoided getting involved, but I am now concerned that this information has become harmful and frightening people who might truly love living in The Villages. I am not sure that comparing The Villages to these smaller, completely different CDDs is appropriate in the sense that it does not provide an accurate analysis and, in my opinion, appears to be purposefully misleading. If �The Shadow� truly wanted to live in The Villages I think s/he would/should take a more proactive approach to sorting through these issues. So � why do I think that I am so smart and have all the answers � well I don�t, but I do have a Master's Degree in Public Administration, was the Founder of a publicly traded software company, and have worked for the Federal Government overseeing large government contracts. I am not trying to say that I know everything -- I state this just as a point that I do have some experience and education in both the public and private sectors that is relative. Since I don�t have the answers, what I will do is be proactive and get them. We close on our house on Oct. 12 and will move to TV full-time Nov 24. Along with getting settled in and having more fun than I ever thought was possible, I will begin researching this whole situation, joining the HOA group(s), talking with the CDD, going to the CDD New Resident Seminar to learn about their operation, reviewing the IRS information, etc. Then, with some �real facts� about The Villages CCDs, I will post information on TOTV so that anyone who chooses to read these posts can make their own decisions based on facts. I am not trying to be obnoxious, but I think that the U.S. was built by people who had good ideas and from what I can tell the family who started and continue to run The Villages had a good idea. They deserve to make money. That is how a capitalist society works � and I am not a Republican. Many cities, states, even counties fail and these are run by �public entities � people we elect� -- look at California (I was born and spent 40 years in CA). It appears that The Villages has been doing many things right and maybe some things wrong. But let�s take the time to find out and help keep it on track because it is an AWSOME place for adults to live!

Excellent post, JMitchell. I look forward to your future posts on the subject.

BTW, Welcome to TV. I'm excited for you and wish you the very best. You know, you have something besides the initial/name in common with the famous late JMitchell. She too, wanted to get herself back to the garden. ...

[graciegirl]

I have been reading these posts over the last year and have avoided getting involved, but I am now concerned that this information has become harmful and frightening people who might truly love living in The Villages. I am not sure that comparing The Villages to these smaller, completely different CDDs is appropriate in the sense that it does not provide an accurate analysis and, in my opinion, appears to be purposefully misleading. If �The Shadow� truly wanted to live in The Villages I think s/he would/should take a more proactive approach to sorting through these issues. So � why do I think that I am so smart and have all the answers � well I don�t, but I do have a Master's Degree in Public Administration, was the Founder of a publicly traded software company, and have worked for the Federal Government overseeing large government contracts. I am not trying to say that I know everything -- I state this just as a point that I do have some experience and education in both the public and private sectors that is relative. Since I don�t have the answers, what I will do is be proactive and get them. We close on our house on Oct. 12 and will move to TV full-time Nov 24. Along with getting settled in and having more fun than I ever thought was possible, I will begin researching this whole situation, joining the HOA group(s), talking with the CDD, going to the CDD New Resident Seminar to learn about their operation, reviewing the IRS information, etc. Then, with some �real facts� about The Villages CCDs, I will post information on TOTV so that anyone who chooses to read these posts can make their own decisions based on facts. I am not trying to be obnoxious, but I think that the U.S. was built by people who had good ideas and from what I can tell the family who started and continue to run The Villages had a good idea. They deserve to make money. That is how a capitalist society works � and I am not a Republican. Many cities, states, even counties fail and these are run by �public entities � people we elect� -- look at California (I was born and spent 40 years in CA). It appears that The Villages has been doing many things right and maybe some things wrong. But let�s take the time to find out and help keep it on track because it is an AWSOME place for adults to live!

I agree with P. Your post was helpful, informative and stress relieving.

I worry too, that these copies of the Orlando Sentinel articles are frightening people.

Shadow? I thought you lived here.

[BaylorBear]

:BigApplause:

[RVRoadie]

Russ: I do not live in TV but have looked very regularly for that last 4 years. I just retired this year. I waited because I was not retired and because of the IRS issue and because I believe the economy is still heading down and prices for the types of homes I have been following carefully have dropped gradually but steadily. I have many examples. Now that I am retired I am more motivated to buy but I am still a price shopper. I don't mind renting in the meantime.
Thanks

I am not sure this is accurate. From my observations, prices on Designer homes hit bottom around April of 2009. Since then, discounts have dropped dramatically and prices have been steadily creeping up. I purchased in May of 2009 and my home recently appraised a little higher when I applied for a Home Equity Loan. I occasionally look at open houses comparable to mine, and they are always higher.

[Russ_Boston]

I have been reading these posts over the last year and have avoided getting involved, but I am now concerned that this information has become harmful and frightening people who might truly love living in The Villages. I am not sure that comparing The Villages to these smaller, completely different CDDs is appropriate in the sense that it does not provide an accurate analysis and, in my opinion, appears to be purposefully misleading. If �The Shadow� truly wanted to live in The Villages I think s/he would/should take a more proactive approach to sorting through these issues. So � why do I think that I am so smart and have all the answers � well I don�t, but I do have a Master's Degree in Public Administration, was the Founder of a publicly traded software company, and have worked for the Federal Government overseeing large government contracts. I am not trying to say that I know everything -- I state this just as a point that I do have some experience and education in both the public and private sectors that is relative. Since I don�t have the answers, what I will do is be proactive and get them. We close on our house on Oct. 12 and will move to TV full-time Nov 24. Along with getting settled in and having more fun than I ever thought was possible, I will begin researching this whole situation, joining the HOA group(s), talking with the CDD, going to the CDD New Resident Seminar to learn about their operation, reviewing the IRS information, etc. Then, with some �real facts� about The Villages CCDs, I will post information on TOTV so that anyone who chooses to read these posts can make their own decisions based on facts. I am not trying to be obnoxious, but I think that the U.S. was built by people who had good ideas and from what I can tell the family who started and continue to run The Villages had a good idea. They deserve to make money. That is how a capitalist society works � and I am not a Republican. Many cities, states, even counties fail and these are run by �public entities � people we elect� -- look at California (I was born and spent 40 years in CA). It appears that The Villages has been doing many things right and maybe some things wrong. But let�s take the time to find out and help keep it on track because it is an AWSOME place for adults to live!


What s/he said!

Look forward to further comment.

[golfnut]

pturner, I think you are correct, jmitchell I look forward to your posts, pturner I thought CSN wanted to get back to the garden....gn

[Lou Card]

Originally Posted by jmitchell https://www.talkofthevillages.com/forums/images/buttons/viewpost.gif (https://www.talkofthevillages.com/forums/showthread.php?p=287101#post287101)
I have been reading these posts over the last year and have avoided getting involved, but I am now concerned that this information has become harmful and frightening people who might truly love living in The Villages. I am not sure that comparing The Villages to these smaller, completely different CDDs is appropriate in the sense that it does not provide an accurate analysis and, in my opinion, appears to be purposefully misleading. If �The Shadow� truly wanted to live in The Villages I think s/he would/should take a more proactive approach to sorting through these issues. So � why do I think that I am so smart and have all the answers � well I don�t, but I do have a Master's Degree in Public Administration, was the Founder of a publicly traded software company, and have worked for the Federal Government overseeing large government contracts. I am not trying to say that I know everything -- I state this just as a point that I do have some experience and education in both the public and private sectors that is relative. Since I don�t have the answers, what I will do is be proactive and get them. We close on our house on Oct. 12 and will move to TV full-time Nov 24. Along with getting settled in and having more fun than I ever thought was possible, I will begin researching this whole situation, joining the HOA group(s), talking with the CDD, going to the CDD New Resident Seminar to learn about their operation, reviewing the IRS information, etc. Then, with some �real facts� about The Villages CCDs, I will post information on TOTV so that anyone who chooses to read these posts can make their own decisions based on facts. I am not trying to be obnoxious, but I think that the U.S. was built by people who had good ideas and from what I can tell the family who started and continue to run The Villages had a good idea. They deserve to make money. That is how a capitalist society works � and I am not a Republican. Many cities, states, even counties fail and these are run by �public entities � people we elect� -- look at California (I was born and spent 40 years in CA). It appears that The Villages has been doing many things right and maybe some things wrong. But let�s take the time to find out and help keep it on track because it is an AWSOME place for adults to live!

Very well stated. jmitchell is the man

[EdV]

JM, good thoughts but in the future, could you at least break up a long post like this into a few paragraphs? It will make it a lot easier to read.

Thanks

[JimJoe]

I am not sure this is accurate. From my observations, prices on Designer homes hit bottom around April of 2009. Since then, discounts have dropped dramatically and prices have been steadily creeping up. I purchased in May of 2009 and my home recently appraised a little higher when I applied for a Home Equity Loan. I occasionally look at open houses comparable to mine, and they are always higher.

My information is from the Sumter County Assessor site, the villages sales website, the MLS website, and from tracking styles of homes.
Amarillos are down to a low of 129k, many 159k, and most for about 169 to 79. They were running for over 200k just a couple years ago and at a high of about 239k. I am not talking about designers.
New homes on villages website now start BELOW 126k. I have never seen that before.
Now 562 resale homes listed on the villages website. Many pages with no pending signs on them.
Nationwide sales are dropping, resales and new. Price drops follow sales drops. Gov artificial attempts to save home sales using 8k and 6.5k tax credits, and record low interest rates are not working.
We are in a debt deleveraging cycle. Everyone must reduce debt, including the gov. It also means prices must drop to get to their market value because you normally cannot sell property for more than it is worth, even with gov support. I believe that current market value is pre bubble levels 2000 but owners are still refusing to sell lower than 2004 levels.. and I do not blame owners one bit. They do not or cannot take a loss. Where market value is, might be debatable but we are clearly not there yet. If we were, none of those gov tricks would have been necessary and people would not be on average waiting a year now in most parts of the country to sell their home (not in TV, it is better). TV is better than most of the country because it is such a nice, beautiful, desirable, place. But it is feeling the pinch and prices are suffering because many potential buyers want or need to sell their home elsewhere before they buy here. Many have said that right here on TV. AND they do not want to take a reduced price.

Home Prices are dropping and will drop, until inflation comes back which will not happen until the employment problem is solved. Gov cannot safely inflate the currency without destroying it because we are borrowing so much and will not be able to borrow anything if gov destroys the currency with the printing press. Gov throwing money from the sky (bailouts) to the people will not solve the problem until the people believe the gov will do that for them every day on every payday. God help us.
The only way to solve the employment problem is to reduce the cost of labor. I do not believe americans will not do jobs done by immigrants. They will if it is a level employment field. When gov mandates costs of labor, they reduce labor. All of these problems are inter related and housing prices are just a symptom of them.
Sorry I went beyond the mere price, but my opinion on price of home prices moving lower comes from the above.
Jim

[EdV]

I would think that you folks in TV would welcome this article because in my mind, it shows how the CDD form of master-planned community developments can work if managed properly as has clearly been done here in TV. And I might add that the Morse family has been at this project for well over two decades. It�s the �Johnny come lately� developers that rushed into this for a fast killing during the boom years of 2002-2007 that are failing.

PTurner asked a pertinent question regarding how non-cdd developments have done through all of this. There�s probably not much info on this since they�re privately funded. But I think it would follow the same pattern of when the project was started. But what�s particularly bad about the privately funded developments is that they tended to sell homes before the promised amenities were built. Not good for those that believed what they wanted to hear.

As for the IRS ruling, let me say once again. Regardless of the outcome, there is absolutely no way that a homeowner in TV will be obligated to pay a dime of this. Your sole obligation is to pay the $135 per month amenity fee and that can never be raised more than the change in the CPI in any year. So no special assessments can be levied and those two special CDDs have no taxing power on the homeowners.

And to that I have not a �Shadow� of a doubt.

[The Shadow]

I would think that you folks in TV would welcome this article because in my mind, it shows how the CDD form of master-planned community developments can work if managed properly as has clearly been done here in TV. And I might add that the Morse family has been at this project for well over two decades. It�s the �Johnny come lately� developers that rushed into this for a fast killing during the boom years of 2002-2007 that are failing.

PTurner asked a pertinent question regarding how non-cdd developments have done through all of this. There�s probably not much info on this since they�re privately funded. But I think it would follow the same pattern of when the project was started. But what�s particularly bad about the privately funded developments is that they tended to sell homes before the promised amenities were built. Not good for those that believed what they wanted to hear.

As for the IRS ruling, let me say once again. Regardless of the outcome, there is absolutely no way that a homeowner in TV will be obligated to pay a dime of this. Your sole obligation is to pay the $135 per month amenity fee and that can never be raised more than the change in the CPI in any year. So no special assessments can be levied and those two special CDDs have no taxing power on the homeowners.

And to that I have not a �Shadow� of a doubt.

However I could see an effort to allow the home owners the opportunity to buy seized assets, after all the home owners have a desire for the assets to remain in place for their use. That is the only way I see residents money involved. IMO

This is in reference to the IRS case only.

[The Shadow]

My information is from the Sumter County Assessor site, the villages sales website, the MLS website, and from tracking styles of homes.
Amarillos are down to a low of 129k, many 159k, and most for about 169 to 79. They were running for over 200k just a couple years ago and at a high of about 239k. I am not talking about designers.
New homes on villages website now start BELOW 126k. I have never seen that before.
Now 562 resale homes listed on the villages website. Many pages with no pending signs on them.
Nationwide sales are dropping, resales and new. Price drops follow sales drops. Gov artificial attempts to save home sales using 8k and 6.5k tax credits, and record low interest rates are not working.
We are in a debt deleveraging cycle. Everyone must reduce debt, including the gov. It also means prices must drop to get to their market value because you normally cannot sell property for more than it is worth, even with gov support. I believe that current market value is pre bubble levels 2000 but owners are still refusing to sell lower than 2004 levels.. and I do not blame owners one bit. They do not or cannot take a loss. Where market value is, might be debatable but we are clearly not there yet. If we were, none of those gov tricks would have been necessary and people would not be on average waiting a year now in most parts of the country to sell their home (not in TV, it is better). TV is better than most of the country because it is such a nice, beautiful, desirable, place. But it is feeling the pinch and prices are suffering because many potential buyers want or need to sell their home elsewhere before they buy here. Many have said that right here on TV. AND they do not want to take a reduced price.

Home Prices are dropping and will drop, until inflation comes back which will not happen until the employment problem is solved. Gov cannot safely inflate the currency without destroying it because we are borrowing so much and will not be able to borrow anything if gov destroys the currency with the printing press. Gov throwing money from the sky (bailouts) to the people will not solve the problem until the people believe the gov will do that for them every day on every payday. God help us.
The only way to solve the employment problem is to reduce the cost of labor. I do not believe americans will not do jobs done by immigrants. They will if it is a level employment field. When gov mandates costs of labor, they reduce labor. All of these problems are inter related and housing prices are just a symptom of them.
Sorry I went beyond the mere price, but my opinion on price of home prices moving lower comes from the above.
Jim
You have done your homework grasshopper. You get an A.

[Pturner]

pturner, I think you are correct, jmitchell I look forward to your posts, pturner I thought CSN wanted to get back to the garden....gn

GN, you are right too. CSN did record the "Woodstock" song. But Joni wrote the music and lyrics. (She also recorded it, btw.)

[bkcunningham1]

Pturner,

I think that you are right in that the IRS issue is separate from the bond that a homeowner is responsible for paying monthly, except of course that someone, somewhere is relying on this income to pay someone, somewhere. I would imagine the relationship is quite a number of times removed. I believe that an independent organization would have been formed to repackaged and sell the bonds as investments and that "they" would be responsible for determining the appropriateness of the vehicles according to FL law. I just can not see how TV homeowners, our amenities, etc can possibly be affected at this point. Too much is already built and running itself through our monthly amenity fees. It is all very interesting and it may sound scary, especially when some people twist things and add their own personal but more than likely unrelated fears, but after working for the Federal government, I don't see the IRS purposely destroying a giant retirement community like TV. They may go after the investment organization that sold the tax exempt bonds if they can prove that they did so against FL law, but it seems that so far that is not the case.

Also, I think someone already mentioned this, but our Amenities Fees pays for the maintenance and upgrades to the already built facilities. Is this enough?? Well, that's something I'd like to see on paper, but my best guess is yes, unless TVers start foreclosing like crazy and there is no one left to pay the fees and I guess if that is the case than we won't need so many facilities :D

I also wonder how our property taxes fit in. Since TV is such a large portion of so many counties I assume that most of the towns, main roads, etc get tax money just like any other city. Maybe not... Anyone know?

Given that TV has weathered this recent "recession" probably better than any city/county in the country -- I am not worried. That doesn't mean that I will not get involved. Things can and will change -- Life assures us of that!

Very respectively, it doesn't take an advanced degree to understand the IRS issue. If you are interested it is spelled out with this link. It isn't a hidden issue. This is the latest information. To my knowledge, the IRS hasn't responded yet. Maybe you can use your DC contacts and find out.

http://www.districtgov.org/images/IRSupdates/20100121%20IRS%20Technical%20Support%20Request.pdf

[2BNTV]

Originally Posted by jmitchell
I have been reading these posts over the last year and have avoided getting involved, but I am now concerned that this information has become harmful and frightening people who might truly love living in The Villages. I am not sure that comparing The Villages to these smaller, completely different CDDs is appropriate in the sense that it does not provide an accurate analysis and, in my opinion, appears to be purposefully misleading. If �The Shadow� truly wanted to live in The Villages I think s/he would/should take a more proactive approach to sorting through these issues. So � why do I think that I am so smart and have all the answers � well I don�t, but I do have a Master's Degree in Public Administration, was the Founder of a publicly traded software company, and have worked for the Federal Government overseeing large government contracts. I am not trying to say that I know everything -- I state this just as a point that I do have some experience and education in both the public and private sectors that is relative. Since I don�t have the answers, what I will do is be proactive and get them. We close on our house on Oct. 12 and will move to TV full-time Nov 24. Along with getting settled in and having more fun than I ever thought was possible, I will begin researching this whole situation, joining the HOA group(s), talking with the CDD, going to the CDD New Resident Seminar to learn about their operation, reviewing the IRS information, etc. Then, with some �real facts� about The Villages CCDs, I will post information on TOTV so that anyone who chooses to read these posts can make their own decisions based on facts. I am not trying to be obnoxious, but I think that the U.S. was built by people who had good ideas and from what I can tell the family who started and continue to run The Villages had a good idea. They deserve to make money. That is how a capitalist society works � and I am not a Republican. Many cities, states, even counties fail and these are run by �public entities � people we elect� -- look at California (I was born and spent 40 years in CA). It appears that The Villages has been doing many things right and maybe some things wrong. But let�s take the time to find out and help keep it on track because it is an AWSOME place for adults to live!

jmitchell:

An excellent balance post. I look forward to hearing your views on this matter. Well done. Bravo. :BigApplause:

EdVinMass I would think that you folks in TV would welcome this article because in my mind, it shows how the CDD form of master-planned community developments can work if managed properly as has clearly been done here in TV. And I might add that the Morse family has been at this project for well over two decades. It�s the �Johnny come lately� developers that rushed into this for a fast killing during the boom years of 2002-2007 that are failing.

PTurner asked a pertinent question regarding how non-cdd developments have done through all of this. There�s probably not much info on this since they�re privately funded. But I think it would follow the same pattern of when the project was started. But what�s particularly bad about the privately funded developments is that they tended to sell homes before the promised amenities were built. Not good for those that believed what they wanted to hear.

As for the IRS ruling, let me say once again. Regardless of the outcome, there is absolutely no way that a homeowner in TV will be obligated to pay a dime of this. Your sole obligation is to pay the $135 per month amenity fee and that can never be raised more than the change in the CPI in any year. So no special assessments can be levied and those two special CDDs have no taxing power on the homeowners.

And to that I have not a �Shadow� of a doubt.
Today 05:25 PM

EdVIn Mass:
Thank you very much for this post. It really keeps me from worrying about increase fees.
I remember you posting something similar to this that was very well thought out. Well done. Bravo. :BigApplause:

[JimJoe]

I agree with EdVin. I do not believe TV home owners will ever be assessed for any loss caused by the IRS investigation. The problem is if some of the amenities are sold to pay the bonds and the IRS fines IF ANY, where do TVs play golf, swim, go to classes, etc? And what happens to the value of TV homes, the value of which is in part the result of those amenities?
I do not think the IRS investigation will result in a major change in TV, but IF THE IRS wins, there will be some eye opening. My mother always told me, If it looks too good to be true, it probably is. TVers eventually will pay more for those amenities if the IRS wins, if they want to keep them the way they are. I think most TVers will think they are worth an increase in amenities fees or the creation of membership fees to pay for the reissuance of the amenities bonds and or fines IF ANY.
The issue needs to be resolved.

[2BNTV]

jmitchell

Just to let you know you didn't come across as a know it all. I prefer when someone admits they don't have all the answers as oppossed to someone who will give an answer rather than admit they don't know something.

Smart and humble. Both good qualities to have.

[bkcunningham1]

bkcunningham,

Thanks for the information, although I think it may require more education than I have to understand the full extent of what is really being said in these 23 pages. Clearly TV's CDD has people that know what they are talking about. I can't wait to learn more. Thanks again.

Julie:read:

Someone posted this in another thread today. I thought I'd post it for you because it answers some of your other questions. It is from a column that runs in the local newspaper, the Daily Sun. Where Does My Money Go?

http://www.districtgov.org/PDFView/PDFMeeting.aspx?id=20100826000801

[jmitchell]

Someone posted this in another thread today. I thought I'd post it for you because it answers some of your other questions. It is from a column that runs in the local newspaper, the Daily Sun. Where Does My Money Go?

http://www.districtgov.org/PDFView/PDFMeeting.aspx?id=20100826000801

bkcunningham,

You are full of good information. :read:

Thanks!

[EdV]

.... They may go after the investment organization that sold the tax exempt bonds if they can prove that they did so against FL law, but it seems that so far that is not the case.


That�s not the way it works. In fact it is essentially the crux of the IRS preliminary ruling against the two amenity CDDs.

The Florida CDD law provides a CDD with the authority to sell municiple bonds to fund the project, but it does not and cannot dictate that they are federal tax free bonds.

In other words, the fact that Florida granted the two CDDs quasi-government status to issue municipal bonds is only one of a number of factors that determine if those bonds can be Federally tax free.

The IRS agent has not accused the CDDs of anything illegal, only that in hindsight and under scrutiny, the purpose of the bonds failed to meet all of the tests for tax free eligibility. And to put this matter to rest, it wants those two CDDs to pay off the balance due on the bonds (which are callable) and to pay a 2.8 million dollar fine as compensation for the lost tax revenue it would have received from the bond holders if the bonds had been issued as taxable munis.

Because the bonds in question amount to some $350 million (great news fodder), this is likely to be decided in Federal Tax Court. But even if the IRS were to prevail, the two CDDs would simply buy back the bonds in chunks and reissue them as taxable munis. And due to the visibility and strong financial position of TV in general, most of the institutions that own the tax free bonds would likely re-purchase them from one of their taxable bond funds.

The cost of doing this would perhaps amount to some 10s of millions of dollars and create a ripple in the budgets of the two CDDs, but hardly the tsunami that the Orlando Sentinel would have you believe.

And let�s not forget that the developer owes the northern CDD (VCCDD) $43 million dollars that the homeowner elected officials of the Amenity Authority Committee control. $7 million of it is being used to widen the rec. trails north of 466. So the remaining $36 million is a nice little cushion to be sitting on if things get down and dirty.

[NJblue]

I think this IRS issue is just a tempest in a teapot. Sounds awful when you look at the magnitude of the dollar amount that the IRS questions, but, as Russ indicates, when you look at it amortized over the population of TV=, it really doesn't amount to that much.

To get a VERY rough handle on this, consider its impact on the amenity fee (if, indeed it can legally betacked on to the amenity fee or some other new fee.) Currently the amenity fee is used to pay for all the operations of all of the amenities. Plus it is used to pay the debt on the bonds used to pay for the amenities. Lets say that the debt paymants amount to half of the total amenity fee (just a WAG on my part, I'm sure you can look at the CDD web site and get precise figures). That amounts to roughly $65 per month.

Now, let's say that instead of issuing tax free bonds that the CDD had to issue taxable bonds. That would make the interest payments for the taxable bonds higher. I'm not an expert on bond rates, but let's say that interest rates for taxable bonds are 35% more than that of tax-free bonds. So, if the amount of the CDD budget for debt payment increased by 35%, the net impact on the amenity fee would be approximately $23 per month. This is less than one night of dining out. Would anyone change their plans to live in TV based on that potential financial impact?

These are just rough figures, but I now have to go out and use my amenity (tee time in 35 minutes) so I don't have time to research these numbers further.

[RVRoadie]

My information is from the Sumter County Assessor site, the villages sales website, the MLS website, and from tracking styles of homes.
Amarillos are down to a low of 129k, many 159k, and most for about 169 to 79. They were running for over 200k just a couple years ago and at a high of about 239k. I am not talking about designers.
New homes on villages website now start BELOW 126k. I have never seen that before.
Now 562 resale homes listed on the villages website. Many pages with no pending signs on them.
Nationwide sales are dropping, resales and new. Price drops follow sales drops. Gov artificial attempts to save home sales using 8k and 6.5k tax credits, and record low interest rates are not working.

Jim

I still think you are misreading the situation in The Villages. I believe you are seeing a new class of Cottage homes with a lower entry point, but that is not an indication of falling prices. The developer is just trying to attract a wider range of buyers.

As to the appraisers office, I just got my new tax assessment and it shows an 8% decline in the market value of my house. However, a recent bank appraisal showed a 5% increase. The cheapest Whispering Pine was going for 190k in April of 2009. Today the cheapest is 200k.

The National economy is just not very relevant here, with the possible exception of those needing to sell a home to move here. Today's newspaper had an article on growth in The Villages and indicated that 60 new businesses had signed leases here in the last 12 months. Many of those are medical offices that are bringing in high wage jobs.

As to the job market here, about 3 months ago my 28 year old son lost his job in Myrtle Beach and moved back in with us. :sad: It took him a few weeks to get his act together and get his resume ready. He went to Colony Plaza and Sumter Landing in the morning and had three job offers that afternoon. Not great jobs, but not minimum wage either. He has steady work of at least 35 hours per week.

You don't have to go far outside The Villages to see the economy you are describing. I recently picked up a 2006 vacant foreclosed property in Fruitland Park at a cost of $45 per square foot. It didn't take much to get it ready for rent and it rented in 5 days with just a sign in the front yard. It is close enough to The Villages to be attractive to people working nearby.

For those waiting for better prices to sell their home in order to buy in The Villages, my advice is to determine a realistic price that will sell your home quickly. If you can make it work for you, then cut your loses now and come on down. At least you will be here enjoying The Villages lifestyle, and not at home wondering when you home value will come back.

[kentucky blue]

.
New homes on villages website now start BELOW 126k. I have never seen that before.
Now 562 resale homes listed on the villages website. Many pages with no pending signs on them.

Jim

Jim Joe is right on the money with his analysis of the current housing market, i have felt the same way for well over a year now.But here is some good news, all the villagers that were concerned about the developer leaving TV after the build out, have nothing to worry about.Because of the housing recession throughout this country, and the double dip recession on the way, the Morse's aren't going anywhere for a long, long, looooooooooong time.Of course my right to be heard does not include the right to be taken seriously,............this is only my opinion, astute as it may be, just an opinion..:)