IRS/Bond Issue

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  #61  
Old 03-19-2013, 09:36 PM
Advogado Advogado is offline
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Default The pricing issue is still open

Despite the Daily Sun headline that provoked this thread, the fact that the pricing issue is still open (as others and myself have pointed out above and have been called names for so doing) was confirmed by District Manager Janet Tutt at Tuesday night's POA meeting. The "Analysis" referred to in the Daily Sun headline was done by the District Staff and the District's tax attorney. Unfortunately, as Ms. Tutt acknowledged, the IRS has not yet concurred with that analysis. Until that happens or we get a court decision accepting that analysis, the fat lady has not yet sung and nothing has really changed.
  #62  
Old 03-20-2013, 06:04 AM
mickey100 mickey100 is offline
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We all hope that the decision will go our way, but the facts are, we still don't know what's going to happen, although I was reading on The National Law Review that an IRS decision is expected in the near future. As I read it, the IRS still has to recognize the Villages CDD as a true political subdivision for it to to be eligible. The sticking points are that the developer/land owner controls a majority of the votes and elects the board of supervisors of the Village CDD and thus controls the CDD. We all anxiously await a resolution of this issue.
  #63  
Old 03-21-2013, 09:51 AM
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It is quite clear from the majority of contributors on this forum, plus my well informed neighbors and friends, that the recent turn of events regarding the IRS issue has been viewed as a welcome harbinger of positive outcomes for homeowners. It was also embraced by those who were somewhat anxious about the contrived "Sword of Damocles" scenario perpetuated by Morse bashers, the loyal opposition and pessimists among us. In fairness, it is just in the nature of some to dwell on worst case scenarios and for some it is difficult to admit their initial documented assessment may have been exaggerated and off the mark. How sad to hope for an "I told you so outcome" for vindication. To all posters, be of good cheer. It's another great day in the Villages. Celebrate life.

The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true.

James Branch Cabell, The Silver Stallion
  #64  
Old 03-21-2013, 10:44 AM
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Originally Posted by ijusluvit View Post
Maybe there's a simple explanation which got by me, but here's what I don't get:

The developer, with a very gracious full page ad/editorial in The Sun, settled a lawsuit brought by some very brave POA members a few years ago. The districts north of 466 received about $44 million and the right to form the AAC committees to control the use of amenity fees, etc.

Why in the world would the developer, whose work I have immense respect for btw, not argue that he did not owe this money when he was selling off facilities to those same districts to the tune of maybe a $47.1 million loss?????

He didn't know he was selling facilities at a loss?
His lawyers recently helped him discover those losses?

Here's what I don't understand. When we, the residents, were forced to buy the facilities back in 2002, didn't we pay the developer nine times what it cost to build these facilities. For example: if the Savannah Center cost six million, we paid 54 million. Can anybody living here at the time refresh my memory?

If my figures are accurate, how can the developer come back ten years later and say he was shortchanged $47.1 million dollars?

I would like to see a chart with three figures for each facility; the cost to build, the amount the residents paid, and where did the deficit come from.
  #65  
Old 03-21-2013, 12:08 PM
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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 an 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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  #66  
Old 03-21-2013, 01:23 PM
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Originally Posted by villages07 View Post
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.
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.
  #67  
Old 03-21-2013, 01:53 PM
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Originally Posted by villages07 View Post
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 an 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.
Let's assume that everything you say is accurate. That still doesn't answer the question as to why it took the developer over ten years to realize he had been short-changed by over 47 million dollars. For such a business genius, as Gary Morse has been called many time, that is quite an oversight.
  #68  
Old 03-21-2013, 02:09 PM
mickey100 mickey100 is offline
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Originally Posted by cabo35 View Post
It is quite clear from the majority of contributors on this forum, plus my well informed neighbors and friends, that the recent turn of events regarding the IRS issue has been viewed as a welcome harbinger of positive outcomes for homeowners. It was also embraced by those who were somewhat anxious about the contrived "Sword of Damocles" scenario perpetuated by Morse bashers, the loyal opposition and pessimists among us. In fairness, it is just in the nature of some to dwell on worst case scenarios and for some it is difficult to admit their initial documented assessment may have been exaggerated and off the mark. How sad to hope for an "I told you so outcome" for vindication. To all posters, be of good cheer. It's another great day in the Villages. Celebrate life.

“The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true.”

James Branch Cabell, The Silver Stallion
I haven't seen anyone post their hope for an "I told you so outcome". And To imply that just because quite a view posters on this forum are wishing things will turn out positively, therefore its a done deal, is nonsensical. We are all hoping for a positive outcome but without a crystal ball, who knows how the wind blows.
  #69  
Old 03-21-2013, 04:33 PM
Bogie Shooter Bogie Shooter is offline
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Originally Posted by mickey100 View Post
I haven't seen anyone post their hope for an "I told you so outcome". And To imply that just because quite a view posters on this forum are wishing things will turn out positively, therefore its a done deal, is nonsensical. We are all hoping for a positive outcome but without a crystal ball, who knows how the wind blows.
Right, and the posters are just posting opinions.....nothing based on facts.
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