Loveland Oct. 3, 2007

The Loveland City Council narrowly approved an additional 50 mills property tax for
451 new homes to be built on the far west end of 22nd Street in Loveland west of
's Run.   Metro Districts are special taxing authorities that can be created by the
City Council.  They may be used by a developer to pay for infrastructure or other
amenities by creating public debt in the form of bonds to be repaid by the future
home owners through their property taxes normally over 20-30 years.

The proposal to subsidize the new development named Cascade Ridge, at first,
appeared to be headed for defeat when a majority of the Council announced they
would not support the new development as proposed with public debt due to
philosophical beliefs or other financial concerns.

Councilman Daryl Klassen expressed his doubt about the
"absorption rate" in the
financial plan which projects selling all 451 new homes in Loveland while Jan Brown
"things are getting too tight and the market [new homes] is just saturated."  

Dave Clark and Gene Pielin expressed concerns about the fairness of saddling new
buyers with extra taxes to pay for infrastructure the developer normally pays.  
Finally, Walt Skowron announced his opposition due to the fact local Metro Districts
"usurps the authority of local governments."

The tide turned, however, when Mayor Larry Walsh, who supported the new Metro
District all along, reminded his colleagues that they just approved a similar all
residential Metro District tax for McWhinney's Lakes at Centerra Project last August.  
As reported in the past, another home builder,
KB Homes,  was
turned away with a similar proposal before the Council approved McWhinney's Lakes
Centerra Metro District in August.

"This isn't any different than what you were dealing with in the past and quite frankly
what you approved in the past [for McWhinney]."  The Mayor followed these
comments by saying in a lower voice, "Chad [McWhinney] shared with you the reason
these are needed."   
see video clip                                          

Christopher Fellows, the developer, spoke at length to the City Council regarding
Metro Districts in general and provided details of the financial plan for Cascade Ridge
in an effort to relieve concerns that the project carries too much risk in this poor
housing market.  Fellows stated he and his partners would invest $25 to $30 million in
the project before the $8 million in debt would be taken out by the Metro District.

Fellows also told the council several times that he had personally invested thousands
of hours helping people who lost their life savings through the failure of these types of
bonds.  Therefore, he argued, his project was conservative since the assumptions
made for paying back the bonds were very conservative.

Fellows argued that residential properties in the front range are expected to continue
increasing in value of at least 3%.  He told the Council the two most important factors
in paying back the debt (bonds) will be the increasing value of residential properties
(since the tax collected depends on assessed values) and the stability of interest rates.

How Cascade Ridge Differs From the Recently Approved McWhinney Project

Cascade Ridge Metro District will include 5 mills of property taxes (on top of the 45
requested) destined for exclusively for City of Loveland's recreation department and
Thompson School District (approximately $1 million each over 30 years).  Fellows
explained this was a gesture on his part to ensure the development "pays its way" by
having the future homeowners contribute some portion of their extra property taxes
towards general city services and public schools on top of what they will already be

The McWhinney Project, Lakes At Centerra, recently approved by council had no such
contributions to general city or school services.   Instead, the Metro District will fund
only amenities for the use of the new home buyers.  The Lakes at Centerra HOA will
determine access to the amenities being provided through the increased property

Curiously, one Councilmember asked if the amenities of Cascade Ridge would be
available for the public to use or reserved exclusively for homeowners.  Fellows
responded in the following way.  He stated there are two advantages of raising the
money through a metro district.  1. Property taxes will be deductible for homeowners
while HOA fess are not and 2.  All the amenities funded through the Metro District will
be available to the public.  Fellows stated, "If a district builds an amenity, according to
our attorneys, they must be available to the public."

This directly contradicts information provided to the council by McWhinney when
they approved Lakes at Centerra Metro District.  According to the McWhinney
spokesperson, the Lakes at Centerra home owners association will decide access to
the amenities paid through the increased property taxes.

Councilman Dave Clark attempted to remove the 5 mills for the schools and city by
proposing an amendment to the plan.  Councilman Steve Dozier than made the motion
but stated it was 5% (he was corrected) and the vote to amend failed.  Glenn Rousey
and Dave Clark were the only two to vote for removing the extra 5 mills.  

Ironically, the Metro District passed Council on a 5-4 vote with Walt Skowron, the
Council's only regular opponent of Metro Districts, supporting Cascade Ridge and thus
serving as the swing vote to approve the new Metro District.

After stating he was voting in the affirmative, Skowron was scolded by Rousey who
stated, "I am just surprised Walt voted one way a few weeks ago and now is voting
another way."  To which the Mayor replied in jest, "Well, just buckle-up down there."

Skowron and Dozier voted against the Lakes at Centerra Metro District
(see story) but
the City Clerk recorded the vote for McWhinney's development as "unanimous" in the
minutes of the meeting which were later approved by the entire city council.

Most cities provide developers guidelines for a minimum standard for residential
Metro Districts.  This prevents overly ambitious developers from placing too high a
burden on homeowners with exceptionally high Mill Levies.  
451 New Homes -
New Metro Di
strict Narrowly Passes
City Council
"As a matter of personal
integrity, I will not remove
the contribution to the
school district"

Chris Fellows, Cascade
Ridge Developer
"Philosophically we disagree
on where that money (school
funding) should come from."

Councilman Glenn Rousey
"I have a little bit of a fairness issue since
we have just approved one"
Councilman Clark
All over the map - City Council Supports
Metro Tax Concept for McWhinney but
divided on other Metro Tax Proposals
Below - Support Given To Metro Districts