LovelandPolitics.com BLOG

Entry for May 23, 2008

Loveland’s representative in the Colorado State House, Don Marostica, successfully introduced and passed a bill (HB08 1395) that will exempt commercial land owners (like himself) from paying property taxes when they lease property to state and local governmental entities. See story

In a media campaign that would make P.T. Barnum blush by its misleading “facts” Marostica and McWhinney’s Rocky Scott (for whom the bill was introduced) are promoting this as saving state schools millions of dollars. In reality, it fits nicely into McWhinney’s ambition to steal colleges and vocational institutes of learning away from Loveland, Greeley and Ft. Collins city centers. It will also, in time, remove $44 million of assessed valuations from local tax roles that are already in decline thus further squeezing funds available for providing local emergency services by cities and counties. The money goes directly to the property owner and not state schools or other entities.

According to the State of Colorado analysis of the bill, it is really just a tax loophole for commercial landlords who may or may not pass their windfall profit off to their government tenants “Since rent is driven by market conditions and property taxes are a portion of the expenses charged to a tenant, a reduction in taxes may allow an owner to maintain the same rent and recapture a higher portion of operating expenses or increase its profit margin….. Consequently, the size of the property tax savings realized by state government is unknown and will depend upon leasing provisions and the rates negotiated by the state.”

While the analyst says hecan't predict if money will be saved by state schools it does cost the state hundreds of thousands of dollars and the increased costs to the county are still not entirely known – the analyst does point to increased profits to commercial property owners generating some additional income taxes for the state.

Why does the local media report hype as fact and why can’t they read the legislation before promoting it as something it clearly is not?

2008-05-23 15:37:38 GMT

Comments (18 total)

Author:Anonymous

Thanks for reporting this - I had no idea! I went back to read the RH and Coloradoan (you didn't provide a date) and was shocked by what I found. When I first read your story I didn't even know you were talking about the same bill.

Why are the Dems all over Bruce Douglas for voting on renting laws since he owns residential properties for rent? Isn't this a ten times worse conflict for Marostica to be introducing tax breaks specific to the kinds of commercial properties he owns through loveland commercial? Isn't this a little too self-serving to stomach? I think Don is a nice guy but did he really expect people to believe him that is for schools?
--Chuck

2008-05-23 15:53:54 GMT

Author:Anonymous

I think it is disgusting. Yesterday he was standing behind Governor Ritter in my town of Windsor pretending to care about the rescue workers trying to help victims of the tornado. Instead, he is just finding new ways to take money they need for equipment and facilities and putting it into the pockets of commercial developers like himself.

Imagine if a big commercial area of Windsor is rented by a university outreach or something like that. All our revenue from those property taxes will be taken from us and given to the commercial property owner not the school even. That means there would be a lot less rescue workers and equipment to help in the next tornado. I hope Marosticaglow (also supports uranium mining here) stays out of Windsor. He isn't even our representative.

Marostica's policies are doing as much damage as the tornado did.
--Gene

2008-05-23 16:01:30 GMT

Author:Anonymous

McWhinney's property in Berthoud already signed one junior college and is trying to attract other schools. They did this to improve McWhinney's offering.
--Carol

2008-05-23 23:10:41 GMT

Author:Anonymous

Thanks for reporting this. Man, when will the regular press ever get it right? Do they even try?
My guess is that they just copied from a press release and never bothered asking anyone who didn't have a personal stake in this, what they thought about it. And they certainly didn't read the bill... which they could've done in 3 minutes. I don't know what's sadder: that our state legislator sells his services to campaign financiers, that he is self-serving, or that the print media are either so incompetent or dishonest. In any case, once again as a taxpayer I get screwed.
--Herm

2008-05-24 03:34:48 GMT

Author:Anonymous

There is no way commercial property owners like McW and Marostica himself are going to pass on any savings, they will charge market rents and pocket the savings. Everyone should know that Marostica is a large commercial land owner and has a clear conflict of interest, not to mention McW. If McW rents to a university in Grand Station, also that is money that will not go to the URA and will go directly into their pocket. Another example of Lovelanders electing the fox to guard the hen house and the fox getting fatter. Marostica made himslef rich running the City of Loveland to his own benefit now he's been let loose at the state level.

2008-05-24 15:30:28 GMT

Author:Anonymous

If you are going to investigate "The Don" Marostica - and you should, then investigate Ed Lehman and The Reporter-Herald, which ran a smear campaign against Jim Welker to make sure he wouldn't run again, and their boy, Marostica, would get elected.

Of course, you won't investigate "Mr. Ed" Lehman because like Lehman this blog is dirty and corrupt.

Now that The Rocky Mountain Chronicle has gone out of business as a print newspaper I guess you'll have to find another newspaper to do your dirty work for you.

I hear Andrew Boucher is always available to run dirty campaigns.
--A disgusted resident of northern

2008-05-24 23:37:19 GMT

Author:Anonymous

You (digusted resident...) sound a lot like the Outlander.

Back on the topic, Marostica needs the Republican party a lot more than the Repuclican party needs Marostica. Not a single idea has been presented by Don to limit government, save money or even stop illegal immigration. Isn't he the Republican who crossed the isle and tried to driver's licenses for illegals again?

It is abundantly clear he is in the legislature to help himself and those he thinks he needs to befriend to make even more money.

What a sad man. Where is his conscious?
--Dapper Dan

2008-05-25 06:22:38 GMT

Author:Anonymous

The vast majority of commerial real estate leases in the state of Colorado are called Triple Net Leases (NNN). This means the tenants pay all expenses which include insurance, maintenance, and yes PROPERTY TAXES. I work for a local school district, and I can assure you that about 95% of our leases are NNN leases and not a "gross lease". This new Bill will save our school and many others a lot of money.

2008-05-25 14:20:34 GMT

Author:Anonymous

I agree with Dapper Dan, the person who wrote under "disgusted resident" must be the Outlander. He runs a weird blog that does nothing but bash Republicans, liberals, Andrew Boucher and most of all, the newspapers of the area. I wish Mr. Outlander would come out from behind his blog name and put himself forward to really make a difference in this world, rather than just hiding behind his computer criticizing everyone.

2008-05-26 02:01:08 GMT

Author:Anonymous

To Mr.NNN, watch how fast that base lease rate adjusts upward to reflect the lack of a tax charge. The NNN lease accounts for charges and will adjust upward under a NN lease. I hope you don't run their facilities because you don't have a clue about how opportunistic this is. I know Don Marostica, worked for him at the City for many years, he blatantly pursues his own agenda, he fought updating the City's zoning code for years because he had the old one figured out and considered it a competitive advantage, he actually bragged about how he was able to thwart efforts to update the code and for the City. He also blocked the adoption of the I-25 development standards when Windsor, Ft. Colllins and the County had adopted the standards. He secured preferential zoning decisions while he was on Council even after he promised to not develop in the community if elected.

2008-05-26 18:18:44 GMT

Author:Anonymous

The comment above, "The vast majority of commercial real estate leases in the state of Colorado are called Triple Net Leases (NNN)." IS WRONG AND MISLEADING.

Most commercial tenants in the state are not the sole tenants in the property and the taxes are not divided among the commercial tenants. Strip malls, office buildings and indoor malls do not try and charge property taxes to each tenant since it would a nightmare to apportion it properly.

If I understand the report on this site, it says the bill only impacts leases written after Jan. 09. Therefore, the comment above is naive since existing leases where a school might have NNN terms will continue to pay taxes under their current lease - especially if it runs for another ten years. Now, if the school is willing to split the difference and share the savings with the Landlord by writing a new lease - the landlord might take the deal and let them out of their current lease.

Also, here is the part of the state's fiscal impact report Mr. NNN failed to read. They already checked an only found "some" leases were NNN not 95%.

"In addition, some state government leases with private property owners contain provisions that require the owners to pass through property tax savings to the tenant. However, it is uncertain when these savings would be received or how many leases contain such provisions. For full-service
leases, it is also unclear if the reduction in property taxes for an owner would result in lower leasing rates."
--Walter

2008-05-27 03:49:21 GMT

Author:Anonymous

Not taking sides here....just trying to get a better understanding.

Walter: If I read the bill correctly, those properties with a current lease that runs past/into 2009 also would fall under this bill. Right?

FYI...Aims Community College (the last time I checked) would not fall under this bill as it is supported via a taxing district and not by state funding.
--ouch/rousey

2008-05-27 13:53:10 GMT

Author:Anonymous

Aims Community College, as I understand the bill, is covered. The catch-all phrase "any political subdivision" means it is covered.

Mr. Rousey, even if you believe the savings goes to the college or state directly, that means revenue (current property tax) is being taken away from local entities and given to state entities. Most elected officials don't advocate the transfer of money away from the local entity thus increasing the burden on everyone else.

Below is what the bill language says -

(b) (I) ON AND AFTER JANUARY 1, 2009, THE PART OF REAL PROPERTY THAT IS USED BY THE STATE, A POLITICAL SUBDIVISION, OR A STATE-SUPPORTED INSTITUTION OF HIGHER EDUCATION PURSUANT TO THE PROVISIONS OF ANY LEASE OR RENTAL AGREEMENT FOR AT LEAST A ONE-YEAR TERM, WITH OR WITHOUT AN OPTION TO PURCHASE, AND PURSUANT TO WHICH THE SUBJECT REAL PROPERTY IS USED FOR PURPOSES OF THE STATE, POLITICAL SUBDIVISION, OR NSTITUTION OF HIGHER EDUCATION, AS APPLICABLE, SHALL BE EXEMPT FROM THE LEVY AND COLLECTION OF PROPERTY TAX.
--Walter

2008-05-27 15:51:57 GMT

Author:Anonymous

Walter: Thanks. I will not disagree with the fact that revenue is taken from local entities...just not sure if "political subdivision" fits Aims Community College. It may but just not sure.

If Aims is covered then I would assume any taxing district?...Fire protection districts that lease property?

Anyway...thanks for the reply...again, not taking sides here, just not sure as to what properties may be affected
--ouch/rousey

2008-05-27 16:31:36 GMT

Author:Anonymous

I think you are correct, the bill language does say any new or current leases beginning in 1-09 so I would understand this to mean current leases are covered without having to be renegotiated.

Whether AIMS is covered - here is the definition in the bill. I suspect AIMS gets some state money even if it is only a prgram that supports students with grants or funding. In other words - any revenue - seems very open.

Also, the bill text specifically names "local district colleges" so it seems that AIMS is so defined as you describe it.

Here is the bill language -

FOR PURPOSES OF THIS PARAGRAPH (b), "STATE-SUPPORTED INSTITUTION OF HIGHER EDUCATION" INCLUDES, BUT NEED NOT BE LIMITED TO, ALL POSTSECONDARY INSTITUTIONS IN THE STATE SUPPORTED IN WHOLE OR IN PART BY STATE FUNDS, INCLUDING JUNIOR COLLEGES AND COMMUNITY COLLEGES, EXTENSION PROGRAMS OF THE STATE-SUPPORTED UNIVERSITIES AND COLLEGES, LOCAL DISTRICT COLLEGES, AREA VOCATIONAL SCHOOLS, AND THE INSTITUTIONS GOVERNED BY THE REGENTS OF THE UNIVERSITY OF COLORADO.

--Walter

2008-05-27 17:03:23 GMT

Author:Anonymous

I always comment to people who supported the "Don" why in heaven do you think this shrewd businessman would "invest" over $200,000 of his own money to BUY a seat in state government paying a paltry $27,000/year? I think we can see the answer coming into focus very clearly. The inside talk is he will be challenging Gov. Ritter next election. God help us!
--Carla

2008-06-01 23:47:31 GMT

Author:Anonymous

"The Don" Marostica may run against Bill Ritter.

The clash of the titans, as it were.

This ain't news.

2008-06-02 20:22:02 GMT

Author:Anonymous

Don is a big bully in a small pond. If he runs for Governor he will fail terribly. Titan, paid his taxes and didn't abuse his position for personal gain.

2008-06-17 05:25:52 GMT

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