The Steamboat 700 annexation could help fund improvements to the intersection at U.S. Highway 40 and Routt County Road 129, or Elk River Road.

Photo by Matt Stensland

The Steamboat 700 annexation could help fund improvements to the intersection at U.S. Highway 40 and Routt County Road 129, or Elk River Road.

Developers of Steamboat 700 could spend $72 million on phased projects

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Vote on 700

■ Ballots for the mail-only election will be sent to registered Steamboat Springs voters between Feb. 15 and 19. The election ends March 9.

■ Steamboat 700 is a proposed master-planned community on 487 acres adjacent to the western city limits of Steamboat Springs. The project proposes about 2,000 homes — from apartments to single-family home lots — and 380,000 square feet of commercial development that would be built to the standards of new urbanism (dense, walkable and transit-friendly).

Online

■ Learn more about the proposed Steam­boat 700 annexation at www.steamboatpilot.com/news/steamboat700/.

■ Learn more about future plans for recommended traffic improvements on U.S. Highway 40 on the west side of Steam­boat Springs at www.us40west.com/.

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Planned capital improvements at Steamboat 700

— A city financial official said last week that nearly all of the monetary risk associated with Steamboat 700’s capital projects lies with the developers rather than the city.

The financial plan for the proposed Steamboat 700 annexation estimates $72 million in potential capital project funding from developers, staggered throughout years if not decades. The money would fund projects including improvements to U.S. Highway 40, sidewalk and shoulder improvements on roadways near the annexation, new mass transit and public works facilities, a fire station, a public safety building, a community center and more. Capital projects would be phased with the development of Steamboat 700.

The capital facilities phasing plan in Steamboat 700’s annexation agreement with the city assigns capital projects a specific share of cost, by percent, for developers, the city and other funding sources.

The city’s financial risk related to the annexation has been a topic of local debate. Dan­ny Mulcahy, Steamboat 700 principal and project manager, said last week that the risk is developers’ own. According to the annexation agreement, Steam­boat 700 developers would advance, or loan, $53 million of the $72 million to the five metropolitan districts that would make up the development. Those loans would occur in phases as the development grows. The districts then would reimburse developers with revenue from property taxes. The other $19 million is the municipal bond capacity for lending from other investors.

Mulcahy said if the market does not generate enough home sales and associated property tax revenue at Steamboat 700, developers will be holding the bill.

“We’re taking the risk of investing the $53 million, whether the market will accept it or not,” Mulcahy said. “At the end of the day, we’re taking the risk of getting the money back.”

Bob Litzau, assistant finance director for the city of Steamboat Springs, agreed with that assessment last week.

“The amount that the city is on the hook for, that the city has committed to, is almost nothing,” Litzau said, referring to capital projects. “The one thing we have a commitment on is some of the transit stuff, but the risk there is pretty small.”

At 1,500 dwelling units, Steam­boat 700 would be required to pay 20 percent of the cost for two transit buses. The remaining 80 percent would be funded by the city and grants, which Litzau said have been a stable funding source in recent years.

The number of dwelling units at Steamboat 700 is the primary determinant of when capital projects are built. A new community center that could cost an estimated $3.5 million in 2009 dollars and would be funded entirely by Steamboat 700, for example, is required at 1,000 dwelling units.

On the road

Transportation projects are the majority of the capital phasing plan.

Steamboat 700 would advance $5.5 million for U.S. 40 improvements before development of the first unit. That would be followed by a series of improvements starting with funds for design and right-of-way work on U.S. 40 from just west of 13th Street to Downhill Drive, including improvements to the highway’s intersection with Routt County Road 129, or Elk River Road. Steamboat 700 would pay 77 percent of those costs, with the remainder assigned to the Colorado Department of Transportation, the Federal Highway Administration and other potential annexations west of Steamboat, such as 360 Village.

Litzau said assigning percentages of cost, rather than dollar amounts, is safer for the city because it eliminates risks tied to inflation. For example, if the city in 2009 required Steamboat 700 to pay $3 million for future U.S. 40 improvements, and that work turned out to cost $10 million when the work is done in 2015, hypothetically, the city would have to pay a larger share. Percentages are stable, Litzau said.

U.S. 40 work in the capital phasing plan extends from 12th Street to Steamboat West Boulevard, the primary entrance into Steamboat 700. Work also is slated for ancillary roadways including C.R. 129 and C.R. 42. The projects are detailed according to last year’s National En­­vironmental Protection Act study of U.S. 40 improvements west of Steamboat. Much of the work involves widening the highway to four lanes of through traffic and adding multiuse pedestrian pathways. City engineer Laura Anderson said pedestrian underpasses are planned for major intersections on U.S. 40 west of Steamboat.

Cost questions

The $72 million total capital cost for Steamboat 700 is adjusted for inflation. The annexation agreement’s financial plan assumes 4 percent inflation per year for capital projects. In 2009 dollars, Steamboat 700 would fund about $57 million of projects totaling $97 million in cost. About $28.2 million of Steamboat 700’s total, in 2009 dollars, would go toward projects funded entirely by Steamboat 700. The remainder would be for shared projects.

Litzau said the involvement of other funding sources for capital projects makes the city’s cumulative commitment to capital projects relatively small.

Mulcahy said at least 30 percent of Steamboat 700’s projected capital costs would “pay for existing city infrastructure,” meaning projects already in the city’s capital improvements plan.

That plan, part of the city’s 2010 budget, includes $21.5 million for U.S. 40 improvements and a total of $4.3 million for New Victory Highway and C.R. 129 improvements from last year to 2014.

City Manager Jon Roberts said future funding for capital improvement projects is not secure.

“The five-year capital im­­prove­ment program, other than the current year, is more like an identification of needs that you have, and it isn’t necessarily related to projected revenues,” he said. “Certainly, for the current year, you scale back your capital improvements to meet what your revenue streams are.”

Decreasing sales tax revenues have forced significant city budget cuts in the past two years.

“The improvements on High­way 40 are extensive and would occur over multiple years — the schedule on which they occur would be entirely dependent on revenues coming in,” Roberts said. “At this time, other than the (U.S.) 40 improvements through downtown, there aren’t any secured revenue streams.”

Roberts said the initial $5.5 million from Steamboat 700 “would provide some funding to go out and make some incremental improvements to Highway 40, even before the traffic impacts from Steamboat 700 begin to occur.”

Overall, Roberts said, the city is viewing capital project revenue from Steamboat 700 as equal to the impacts of the development.

“We took our direction from the West of Steamboat Springs Area Plan, which called for revenue neutrality,” Roberts said. “So the revenues that have been identified, according to our analysis, are equal to the impacts.”

Financial projections in the annexation agreement cite a total of about $165 million in cumulative property tax revenues generated by the development by 2050.

“That’s if things get built, and they can continue to sell lots,” city planner Jason Peasley said. “The $165 million is intended to pay for the costs of the development.”

Those costs include everything from the $25 million land purchase — for 700 total acres bought by Mulcahy and his Las Vegas partners in 2007 — through consultants, studies, infrastructure, development and more. Mulcahy said last week that home sales would be a source of profit for the Steamboat 700 team.

“There’s obviously a lot of risk involved in development,” Peasley said. “With that higher risk, they expect higher returns.”

Comments

addlip2U 4 years, 11 months ago

“The amount that the city is on the hook for, that the city has committed to, is almost nothing,” Litzau said, referring to capital projects. “The one thing we have a commitment on is some of the transit stuff, but the risk there is pretty small.”

The above is WRONG!! The City has a commitment to supply potable water and provide wastewater treatment! Neither can be done without capital projects.

The City will be on the hook for water and wastewater capital projects required to service Steamboat 700 (and other areas in the WSSA). At an estimated cost of $34 million!

What happens if the Elk River water supply system needed to service Steamboat 700 is built and Steamboat 700 does not happen on the timeline and/or scale contemplated? The risk should have been assumed by the developer (or a Steamboat 700 metro district) if revenues ("tap fees") are inadequate!

Roberts and Litzau should disclose ALL the capital costs associated with Steamboat 700 (including off-site water and wastewater capital projects)! If not, they (and the City) may be accused of trying to affect the annexation vote.

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danny 4 years, 11 months ago

addlip2u- The existing residents do not have to pay for plant expansions! One way or another the community needs a redundancy plan. Tap fees have always been used for water and sewer expansions. Tap fees are generated from new development and redevelopment only. The existing tax payers do not pay tap fees. What we pay each month for water is used for operations and maintenance not capital expansion. There is sufficient capacity in the existing plants to accommodate SB700.

The whole purpose of the Water Rate Study which is currently being finalized is to determine the appropriate rate of the tap fees, to ensure not only existing plant expansions are paid for but also enough to pay for a redundant water system for the entire community. All new development, not just Steamboat 700, pays these new tap fees. SB700 is an opportunity to have a more reliable water system without charging the existing residents for it. The Water report attached below stated two areas of concern that should be addressed 1) a 1922 water compact call and 2) a fire in the Fish Creek Basin. Their primary recommendation to address those concerns was to provide a redundant water supply and suggested the Elk River because the City already owned water rights on the Elk River. There are several other redundancy alternatives but the Elk is the only one being looked at right now

The report goes further and states emphatically under aggressive growth projections and under drought conditions there is more than sufficient water supply to serve nearly 3 Sb700’s and double the population within the existing City limits. (even with annexation the town doesn't have the land to achieve these growth projections but that is what they used for this study)

The only reason the Elk River would ever be affected would be to provide the community with redundancy- not primary supply.- Call Philo or even Mt Werner Water district.

With SB700 the community doesn't have to pay for their redundancy- without SB700 the existing residents will be the only ones paying for redundancy.

Steamboat Water Supply Master Plan – Prepared by STANTEC Adopted by City Council Nov. 18, 2009

2.3 PROJECTED DEMANDS “…It was therefore determined that a conservative approach should be taken in regards to projecting water demands. The growth in water demands presented in the following sections should therefore be considered as an envelope curve and represent the maximum growth that might be reasonably considered for the City and the MWWD under the most aggressive scenario. These projections include expansion of the Urban Growth Boundary to the west of Steamboat as well as account for an increase in housing densities throughout the water service area. Increasing development density is consistent with trends experienced at many resort communities where real-estate is a premium.”

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danny 4 years, 11 months ago

cont.. 2.3.1.3 Envelope Projected City Water Demand An envelope curve for the projected total City Demand including Steamboat 700 is shown in Table 2-20and in Figure 2-13. In this analysis it was considered reasonable and conservative to double the projected water demands for Steamboat 700 to account for additional growth in the western portions of the community, both within and beyond the existing service area boundary. considers SB700 to be 2,600 units – so they project 5200 units in west SteamboatTable 2-20 accounts for 3%- 4% annual growth within existing City Limits= 80% increase in existing population 10,000 existing resident. + 80%= 18,000 + 13,000(5,200 * 2.5 per hs hld) =31,000 people

3.2 WATER RIGHT OVERVIEW The FIRM YEILD represents the amount of water that can be considered to be available 100% of the time, even during the most severe drought conditions. 4.3 WATER CONSERVATION Experience in Denver and other regional communities have shown it is possible to reduce water consumption by 10 to 15 percent without implementing severe restrictions. If implemented, such a program could have the reasonable effect of reducing maximum day water demands by approximately 0.7 to 2 mgd and effectively defer the need for water treatment plant and/or Yampa Well capacity expansion. 5.1.3 Ability to Meet Future Demands The ability for the City and the District to meet anticipated future demands is quite good, based on the following comparison of the projected 20-year Water Demands envelope curve and the calculated firm yield of existing water supply sources available to the City and the District. 1) Both the City and the District have a reliable long-term supply source in the Fish Creek Basin capable of meeting projected demands throughout the next twenty years. Additionally, the existing Yampa River Wells provide a valuable backup and peaking supply source. Maintaining the reliability of these sources and associated infrastructure is critical to the water supply security for the community and should be zealously pursued. 5.2.3 Ability to Meet Future Demands These results indicate that the community in general has several decade to identify, design, and implement the next significant expansion of water supplies for the community. Given the environmental, regulatory, financial, legal, and other requirements associated with the development of water resources, it is not too early to initiate said investigations. Vote yes on A on March 9th 2009

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greenwash 4 years, 11 months ago

I will support 700.....But is there some way to verify these guys have the $100 million available?

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addlip2U 4 years, 11 months ago

Danny... "The only reason the Elk River would ever be affected would be to provide the community with redundancy- not primary supply" is simply NOT supported by the Water and Wastewater Master Plan Updates prepared by McLaughlin Water Engineers, Ltd for the City and delivered to the City c/o Philo Shelton on December 8, 2009.

A copy is available at http://www.steamboatpilot.com/documents/2009/dec/17/water-and-wastewater-master-plan-update/

The Water/Wastewater Master Plan Update(s) clearly states that "development of the Elk River water supply is triggered by hydraulic limitations and the improvements are needed at approximately 20% WSSA development, or 800 EQR". See IV-6

In the Water/Wastewater Master Plan Update(s), "the improvements have been segregated between those needed to meet ultimate WSSA development demands and City only requirements". City only requirements are those improvements needed to service the development within the present corporate limits.

Steamboat 700 alone will need far more than 800 EQR (Equivalent Residential Unit)!

Additional treatment capacity for development within the current city limits can be provided through expansion of the Yampa Gallery System (or the addition of two filter bays to the Fish Creek Water Plant). See: IV-8

For the cost estimates for the "City only" and "WSSA" water improvements see IV-10 to IV-1. For wastewater cost estimates see IV-24 to IV-26.

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Fred Duckels 4 years, 11 months ago

It was but a few years ago that our elected officials were expressing concern that no one had responded to the West Steamboat plan, and they were wondering if the bar might needed to be lowered. We basically were advertising for a developer with means, to help us accompllish our long range objectives. The 700 group answered that call, they did not break down the door to rape our valley. They have bent over backward to accomodate the special interests that proposed this plan, but anticipated that it would never be built, and are now bent on destroying everything. The affordable housing has been tossed around in recent years, and in my opinion used mostly as a political tool. More inventory will bring about lower prices, much to the chagrin of special interests. If the naysayers wanted a say, they had ample opportunity during the planning phases, and it is not right now to renege, after the developers have risked so heavily. If this venture is negated, I for one will be embarrassed. This is not the first, not will it be the last economic downturn in this valley, Much of the development here has been through boom times and the projects somehow were finished in due time.The alternative is to go no growth, and how will we generate taxes to keep the ball rolling? No growth will punish the very people that this project is designed to help.

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JLM 4 years, 11 months ago

@ addlip2u ---

Water and wastewater systems are built in logical phases determined by the actual rate of growth. You do not build 100% of the improvements when the first house is built. It is phased in as demand builds.

Even the financing for the improvements is phased. When a city receives an underwritten commitment to provide municipal finance (bonds), they only sell the securities (bonds) as they need the cash.

You sound like a 17-year old who has just discovered sex --- developers and cities have been doing this kind of stuff for years. Calm down, it's going to be OK.

The water and wastewater guys know exactly what they are doing and they have a fabulous plan. Remember SBS is a pretty small city in the greater scheme of things.

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Steve Lewis 4 years, 11 months ago

addlip2u, Your writing is the best I've seen for understanding crux elements of the 700 water costs debate. Thanks for engaging this issue. Its much appreciated as I've been focused on 700 housing.

Tap fees will rise (a lot?) because there is a lot of infrastructure to build. Our old town water bills have jumped. Aren't these water bills also going into that infrastructure?

Danny, I understand taxpayers don't pay tap fees. New development does, including that done in current Steamboat Springs. (I'm told that redevelopment pays less in tap fees when adding fixtures.) When will we know what tap fees will need to be? Before the election? Is this burden carried evenly by both the Old Town and Mt werner water districts?

I noted your reference above: “…It was therefore determined that a conservative approach should be taken in regards to projecting water demands..." Please post the preceding text telling why "a conservative approach should be taken". Thanks.

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Steve Lewis 4 years, 11 months ago

JLM, Please. Your writing can be good when its respectful.

But your last post: "You sound like a 17-year old who has just discovered sex --- developers and cities have been doing this kind of stuff for years. Calm down, it's going to be OK. The water and wastewater guys know exactly what they are doing and they have a fabulous plan."

Inserting insults and propaganda into an otherwise rational discussion, as you do above, serves absolutely no one.

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danny 4 years, 11 months ago

addlip2- The McLaughlin Report's scope of work was defined by the recommendations made in the Stantec report. http://steamboatsprings.net/sites/default/files/2008/12/15/Steamboat_report.pdf They were essentially told to figure out when and how to develop the Elk River water right- it might have been more appropriate to have a study of various redundancy solutions and WSSA service.
All the previous water studies had correctly predicted that a new tank, PRV, and booster station would be necessary to serve West Steamboat and even McLaughlin Group acknowledges that in the event the Elk River right is delayed a booster station, tank, and PRV would be necessary to serve WSSA.(the City has known this since the 90’s) and this handles the "hydraulic limitations". The fact is the current facilities both water and waste water were expanded to accommodate the future growth of West Steamboat but now the City recognizes they need redundancy in case of a fire or compact call- regardless of SB700.

What’s not in question is who pays for it- the annexation agreement states we will adhere to the adopted master plan; and the way the City has structured the master plan is to put that cost wholly on West Steamboat development. (Call Philo). In any event, the burden of paying for whatever is necessary to provide redundancy or West Steamboat service will fall on the shoulders of new development; most of which will be Steamboat 700, not the existing residents. The booster, tank, and prv will have to be installed, because the Elk River right will almost certainly be “delayed”, it will take a lifetime to develop anything on the Elk River.
There are a number of other options for redundancy from building more infiltration galleries, treatment plant below Stage Coach, new plant off the lower Yampa, new equipment in the existing facilities, etc…(I’m not an engineer, but what would McLaughlin recommend if the City didn’t have a junior right on the Elk?).

With Steamboat 700 the existing residents get a partner to fund a more reliable and redundant water system and without SB700 the existing residents will be faced with paying for redundancy by themselves.

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addlip2U 4 years, 11 months ago

JLM...have you read the "Water and Wastewater Master Plan Updates" for the City of Steamboat Springs delivered 12/8/2009 by the City's consultants?

"...treated water supply to WSSA is hydraulically limited by reasonable system transmission capacity. Therefore, from a hydraulic standpoint, development of the Elk River supply system is needed when the WSSA approaches 20 percent, or approximately 800 EQR. "

The City's consultants are recommending phased construction:

"A water treatment plant at CR 44 and White Tail Lane - approx. elevation 6890, sized for an ultimate capacity of 5.0 MGD to fully utilize the conditional water right on the Elk River. Practical filter module sizing would likely result in four filter bays ultimate. Phased construction is recommended with two filters initially (2.5 MGD)."

Even if only one filter (1.25 MGD) was initially constructed at the required Elk River Water Treatment Plant, the estimated WSSA Improvement Budget (for potable water) would still exceed $25 million because of the other fixed costs [including the Elk River augmentation reservoir (Phase 1), Raw water transmission main from diversion/intake to the Elk River Water Treatment Plant, Land Acquisition, etc.].

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Steve Lewis 4 years, 11 months ago

I commend City staff for the work they've put into this. The final agreement was largely built on their effort, which I consider diligent. But at many "intersections" along the way, city council said to both staff and 700, "we need more, we're o.k. with less, we'll follow that 3rd option,...etc." This is council's annexation, not staff's.

If council had said "no", I can't imagine finding a staffer who would say we should have passed 700. Council said "yes" and I can't imagine finding a staffer who would say we should vote against 700. Witness the staff comments above. It makes complete sense above when Danny refers to Philo (Public Works) for corroboration.

addlip2u makes a worthy point about imperfect staff representations before the ballot. And backs it up with his example of such.

In another vein, remember the Annexation Agreement says, the City cannot advocate for this ballot passage. How does one discern between "stating the facts", and advocacy. Objective fact is fact. Offered opinion such as "we think we've got it covered" is advocacy.

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danny 4 years, 11 months ago

lewi- the missing language is: "An envelope curve for the projected total City Demand including Steamboat 700 is shown in Table 2-20 and in Figure 2-13."

Here is the link to the whole report: http://steamboatsprings.net/sites/default/files/2008/12/15/Steamboat_report.pdf the quote is from section 2.3.1.3 but you should start reading at 2.3

We won't know the tap fees until the community decides on the alternative. We may have an estimate of the Elk River diversion and storage and what the booster station, tank, and prv might cost but by no means does that mean the community will adopt that plan. SB700 has to abide by whatever master plan the City adopts. Everyone can be certain the City and Public works have been adamant that the existing residents not be at risk for anything necessary to serve SB700. Additionally, the City has chosen to seperate what would be necessary west of 13th from south/ east of 13th. So anything necessary for West Steamboat will be mostly on SB700.

There hasn't been any discussion that I am aware of between Mt Werner and the City in these regards. The reports are only focused on what is necessary for the City. It will be interesting to see how the City and Mt. Werner water district work out redundancy sharing.

addlip2u might disagree but the adopted water reports(Stantec Nov. 08 & McLaughlin Dec 09) state the community needs better fire flow in West Steamboat and protection (redundancy) from a fire in the Fish Creek Basin or a Colorado Compact call with or without Steamboat 700. The difference is; with SB700 the community has a financial partner to bear most of the burden and without SB700 the community will have to figure out how to pay for redundancy by themselves; which will most likely be in the form of increased water rates or a bond measure.

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danny 4 years, 11 months ago

addlip2u- "...treated water supply to WSSA is hydraulically limited by reasonable system transmission capacity. " This can be remedied by a new line, booster station, prv, and a water tank. It doesn't mean we have to get water from the ELK. The City wants the Elk line for redundancy and the annexation agreement provides that SB700 will pay for it.

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aichempty 4 years, 11 months ago

Revenue neutral = you pay now, and get it back later. Maybe.

At least people seem to have become concerned with the risks of potential costs to existing residents.

Nice to see the heat turned up in advance of the vote, however. At least people have a chance to find out what they're voting for.

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JLM 4 years, 11 months ago

@ steve #1 ---

Get over yourself. If you are so thin skinned as to be hurt by such bluntness, then maybe you should take up another sport. Knitting?

If we were having a beer, that is exactly how I would say it. Sorry. For you, my friend.

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JLM 4 years, 11 months ago

From a legal perspective, "advocacy" requires "active espousal" which is pleading for, recommending or supporting a particular decision pertinent to an electoral contest.

It is a fairly well litigated part of election law and in my view is almost always decided in favor of advocacy.

Even asking a City employee publicly how they would personally vote on an issue is not prohibited "advocacy" as the employee's answer is not "active espousal". It's a provocative question to ask and it is imprudent to answer but it is not prohibited advocacy.

A SBS City Council member could even ask a city employee --- "in your opinion will this deal work as planned?" and that is not "advocacy" as again, it is not "active espousal".

The problem becomes more apparent when the questions are posed as follows:

"In your professional opinion, do you think that this plan will work as designed?"

v

"Would you recommend that citizens of SBS vote in favor of this annexation?"

I personally think there is damn little difference between the two questions but the Courts have found them to be hugely different. Go figure!

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JLM 4 years, 11 months ago

Water is a funny issue these days as total consumption of water on a per capita basis is slowly but surely declining in a meaningful way.

One has only to think of rainwater systems, graywater systems, xeriscaping, point source irrigation, structural plumbing improvements (low flush toilets), municipal water system maintenance using advanced leak detection equipment, evaporation controls of large empondments and other very significant but clearly not painful conservation measures to see how and why consumption figures are actually going down.

There are some views that water consumption may decline as much as 50% per capita over the next 10 years.

Wastewater treatment to potable water standards is the ultimate consideration and it is being done in some very odd places --- El Paso TX can treat its effluent sufficiently that it is BETTER than its potable water. I have actually seen a person drink water coming out of the final stage of El Paso's new treatment plant.

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weststmbtres 4 years, 10 months ago

$72,000,000.00 divided among the estimated 2000 housing units that will be built comes to $36,000.00 per housing unit. That will be money the developer has pledged through a loan to the metro districts and it will be recouped by the developer through taxes collected from future homeowners.

An average tax bill currently is $1500-$2000. Average I'd say for the product they are planning to put on the market, and average for what similar owners pay for current city and county services. If the developer wants to recoup this additional money within the 20 year buildout plan, that would require an additional $1800 per year without taking into consideration the developers carrying cost. That carrying cost is going to get tacked on the sale price or added to the taxes as well.

Tell me again how we are going to keep this affordable for buyers.

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JLM 4 years, 10 months ago

@ west ---

Not all of the $72MM inflation adjusted dollars are recoverable under the annexation plan. Only $53MM.

To be perfectly fair you would have to include the impact of commercial development within SB 700. This would more than halve the numbers you have suggested.

Also, I suspect the amortization period of the repayment plan could be as long as 40 years. This would reduce the annual cost to an individual homeowner considerably.

While it is not an insigificant consideration, it is nowhwere near what you have suggested.

N = 40, I = 3%, PV = $53MM, PMT = $2.3MM

50% residential, 50% commericial = $1,150,000 each

$1,150,000/2000 homes = $515/year = $47.92/month

N = 20 >>> $891/year = $74.22/month

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Steve Lewis 4 years, 10 months ago

JLM, Your assumptions above are a very generous foundation for your argument.

1) Commercial development will never pay half of 700's recoup. Commercial will always be a smaller piece of the valuation. 400,000 sq ft commercial (60 businesses?) vs. 2,000 homes. It will also be built later, waiting for enough residential units to make business viable. 2) There will not be 2,000 homes paying for the term of "N" years. They will appear over N years, and so your amortization should use half the buildout, or 1,000 homes. 3) 3% interest is also optimistic.

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Steve Lewis 4 years, 10 months ago

My mistake, N is bond timeframe, not buildout period. My point remains that you won't have 2,000 units contributing the first tax year, at N=1.

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JLM 4 years, 10 months ago

@ steve #1 ---

Fair comments all but they do not materially change the financial outcomes. Bottom line is that the cost will not be anywhere near what was indicated in this string of comments.

The improvements will not be built on day one as the homes will not be built on day one. The improvements will be built as needed and the homes will be built as demanded. I suspect that the improvements and homes will be pretty close in schedule and therefore assuming that to be the case over any time period is a fair one-index card modeling technique.

If the commercial is to be 400K SF and the homes are to be 2,000 @ say 3,000 SF average, the values are just about equivalent given comparable per SF valuations of residential v commercial. I would not quibble if the relative proportions were changed but I suspect they are close enough for the purpose intended.

The type of business is a big issue with hospitality and food service being huge water users and others being very light. While I would certainly not quibble that I have any prescient insight into what will be built, one has to think it will be of the character to serve the community and just like what is already here. SBS is quite restaurant centric.

Having built elaborate and extensive financial models for such investments in the past, the scope of such a 20-40 page workbook is a bit beyond the available space on this comment thread. But for a one index card analysis, I think it is probably pretty damn close but it certainly sets the order of magnitude of the costs to the homeowners.

One of the reasons I always lay out the assumptions (HP 12C simple DCF stuff) in any argument is to solicit exactly the comments you have made. I have played with the range of assumptions and keep coming to the same results.

I care not a whit as to what the numbers say but I do like to have the numbers speak for themselves. We can all fashion better informed opinions when we really know the numbers.

Conclusion, they will be quite reasonable.

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insbsdeep 4 years, 10 months ago

700 is not paying for the capital improvements, they are loaning money to the districts to fund the capital improvements. Is that right?

Taking a 53 million dollar loan now...

Not Good for Steamboat

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freerider 4 years, 10 months ago

JLM ........go away and let the adults talk , go play with your nintendo

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cindy constantine 4 years, 10 months ago

insbsdeep,

Check out the new website letsvoteno.com and I think you will find the answers you need to your annexation questions

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weststmbtres 4 years, 10 months ago

And the developer is going to pledge this money and wait around for up to 40 years to recoup their investment. I find that hard to beleive. They are going to get their money back much faster than that. Through higher sale prices. Again, tell me how we are going to keep this thing affordable.

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