Quote:
Originally Posted by Goldwingnut
(Post 2359255)
Brian,
Yesterday's show was a marathon I'd have to admit. I lost track of time and it really ran on much longer that expected.
About the Amenities, south of SR44 they are owned by the developer and the developer is responsible for all the costs of operation and maintenance (and taxes). They pay for this with the Amenity Fee contracts that they own and the residents south of SR44 pay. The Amenities are not turned over to the CDDs, in the past they have sold the amenities and their revenue contract to the commercial CDDs. Most recently in 2016 SLCDD purchased the Amenities between 466 and 44. The Sumter Landing Amenity Division (SLAD) now owns both the facilities and the revenue contracts, and now pays all the bills and is paying a $352M bond off for the purchase (the bond payment replaces the income and property taxes and profits that under the developer were incurred).
|
In other CDD communities I’ve familiar with, it has worked similarly, but the “amenities” remained “private enterprise” and were not sold to another CDD/Semi-Public entity, which is the genesis of my confusion, apparently. Previous experience, as well as confusion based on the multitude of un-informed opinions presented as “fact”, one reads on TOTV or other TV social media sites.
So unless a CDD opts to buy the amenities (including Executive Golf courses), the Developer maintains ownership?
So purchasing the amenities, is a “not so simple negotiation”, as to the value, both in the Developer’s opinion and the CDD’s opinion? Or arguably, a simple cash-flow analysis on both sides?
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
For the developer, the amenities operate at a loss for many of the early years until the number of homes sold and associated revenues start to cover the full costs. This is just the operating cost, the actual cost of acquisition and construction isn't really recovered unit they finally sell the amenities. Why they are willing to do this is simple, amenities help to sell houses.
They retain ownership for many years to come (through the buildout of CDD19 or 20?) when it becomes more profitable to sell them than operate them. It's a business.
|
If the Developer owns the Amenities, the Developer (for example) has the right to decide who can or cannot use them and under what circumstances?
In theory, the Developer has the right to say, “owners North of Rt. 44 have no access to Executive Golf Courses existing South of 44"? Or conversely, "folks who live within 50 miles of Sumter Landing, can use the Recreational Centers South of 44?"
The Developer also has the right to set and/or adjust the Amenity Fee at his whim?
None of above rhetorical questions seem reasonable or logical, but I’m missing the mechanism that makes them rhetorical, impractical or illegal.
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
Also as a business unit operating at a loss has a tax advantage.
|
Therein lies the basis of my questions regarding the ownership of Amenities. The Developer could very well be operating the amenities “at a loss” (operational). The tax benefits (advantages) would appear to come from “depreciation”, which is re-captured at the time of sale … essentially negating anything that was gained during the period of operational losses. Depreciation is great as long as the ball keeps rolling and/or generations keep dying off.
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
Brian,
Bonds are not used to build the amenities, this all comes out of the developer's pocket. The bonds cover the local roads, drainage, retention ponds, right of ways and open areas and all their associated infrastructure. Once the bond is issued by the CDD - the developer doesn't have involvement in the bond itself - all properties start paying the bond assessments, if the home is sold the new owners pay it, if the property hasn't been sold then the developer will pay the annual bond payment (one of the many reasons they like to close out sales in an area quickly).
|
I understand that the Developer pays the Bond cost on un-sold properties, but I thought the Bond included the Developer’s carrying costs and interest, during construction of the infrastructure?
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
Salaries are lumped together from the Executive Salaries and employment costs ($200/meeting X 18 meetings/year X 5 Supervisors = $9,000 + SS, Medicare, and workers comp) and the allocation of management cost which is targeted at 10% of the annual budget. Management costs are for the District Office and staff as each CDD doesn't have a dedicated staff needed to cover all the work needed.
|
I have a basic understand on how and why the “District” exists and it’s a clever way to reduce costs and improve efficiency. I question how independent and competent the individual CDD committees are, in comparison to the expertise of District employees. (CDD #7 being an example.)
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
Brian,
The budget is cumbersome to say the least and going through each line item as the Supervisors do is not for the faint of heart. The CDD budget is child's play compared to the County budget. They are difficult to chew through but once you understand the process it really isn't too bad. In my time as a CDD Supervisor I sat through 60+ budget workshops and argued with district staff on nearly every one of them. The saddest part is that during those 8 years and dozens of meetings there were a grand total of 4 residents present and only 1 question ever asked.
|
I’ve been to 2 Budget Meetings and I’ve yet to hear an intelligent question asked by a resident and very few by Supervisors. Quite honestly, it seems that those who should be questioning, are intimidated by the knowledge and preparation of District personnel.
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
Community Watch costs are an Amenity budget line item and not a CDD Maintenance Assessment item/cost, so not relevant to the discussion.
|
I understand the “Maintenance Assessment” and how it works. Thanks to you, I now have a better understanding of the structure of the amenities, but I’m now at a loss as to Community Watch program, which I think is the biggest boondoggle in TV.
CW is an “Amenity” or part of Amenity maintenance? Which means (for the sake of simplicity, I’ll use the “south of 44 situation) the Developer is in the Community Watch business? No different from a Recreation Center? He “owns” Community Watch, can fund it, staff it. operate it or abandon it, as he sees fit?
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
The Eastport Wide Advisory Committee (EWAC) exists because PWAC2 does not. PWAC2 was to encompass the CDDs south of 44 and PWAC between 466 and 44. It failed because the leadership (and I use that word lightly) of CDD7 did not want to bring the formation of PWAC2 to a vote at their CDD board meeting. Because the PWAC formation agreement required unanimous agreement by all signatories to make changes (form PWAC2) it failed. This is costing the CDDs between 44 and 466 each about $100K/year extra. I've not spoken much on the topic in the past because I was a sitting Supervisor on a different board, but I can now.
|
I sort of got the gist of that, when listening to our Podcast after golf yesterday. Luckily, I played well and had the patience to listen to all of it when I got home.
I don’t know the details of that decision, but it doesn’t surprise me, that there was a renegade CDD, who thought they knew more than everyone else and it came back to bite them in the butt.
Quote:
Originally Posted by Goldwingnut
(Post 2359255)
Brian,
They blindly follow the POA's I Hate The Developer mantra and think the developer constantly owes them something and sees the Developer as the boogie man hiding around every turn.
|
Just an observation (& opinion) after being in TV for 3.5 years. The Developer has some of the best marketing and public relations people in the world, tasked with promoting The Villages and the sale of property.
I think the Developer could do a better job of burnishing the reputation of the original Developers’ progeny. The constant refrain is, “Harold Schwartz would be rolling in his grave and Gary Morse was the salt of earth … the new generation is ________(fill in the blank) _________”.
Thank you for answering my previous questions. I don’t expect you or anyone else to be my “private tutor”. Just for my own edification, I’d like to better understand how it all works on a more granular basis (being retired, I’m pretty bored). If you could point me to a source to better understand how it all works, I’d appreciate it.
