THROUGH FREDA MIKLIN – GOVERNMENTAL REPORTER
The CityB of Greenwood Village gave its approval for the Marin Metropolitan District (the District) to be formed in 2007, including approving it to sell tax-free quasi-government bonds totaling $ 31,485,000 to finance construction. infrastructure for the European Village, a development to be built at 5555 Greenwood Plaza Boulevard in Greenwood Village. The bonds were issued and purchased by Colorado Bondshares, a tax-exempt fund.
Facts later revealed that the city had received fraudulent representations regarding the inclusion of residents of Landmark Towers in the district. The European Village was never built because developer principal Zach Davidson converted between $ 7 million and $ 8 million of the bond proceeds for his personal use and when he was indicted for the crime in 2013 , he committed suicide. After countless lawsuits, in September 2020 a final order and judgment was issued confirming that residents of Landmark Towers had no responsibility for taxes or debts incurred by the district.
On June 7, Paul Oberman and Richard Nathan, Landmark residents representing his HOA, called on GV City Council to initiate legal proceedings under state law to have Landmark Towers removed entirely from the Metropolitan District of Marine.
Nathan told council, “The reason we asked you here to exclude us (The Landmark) from the district… is that it started here in 2007, and the Court of Appeal… in May 2018… (said) that there was a fraud on Greenwood Village… in what was done here in 2007… As a result, the tax obligations of the inhabitants of The Landmark were permanently enjoined… We have no business in the neighborhood and we ask you to let us out. “
Lawyers Kim Seter and John Walsh appeared remotely at the city council meeting on behalf of Century at Landmark, LLC, which owns the 11.4-acre property at 5555 Greenwood Plaza Boulevard, just south of the Landmark Towers. Century bought the land on March 16, 2016 for $ 11 million, hoping to build luxury townhouses on it. In 2018, while the property was still bare and no development had been approved, Greenwood Village City Council amended the city’s comprehensive plan to say that residential development in this location “will be discouraged” it “exceeds on average four housing units per acre.”
In the fall of 2019, plans were announced to build a high-end independent and assisted living center for seniors at the site, which GV says is in line with the goals of its overall plan. This project went all the way to a community meeting on November 19, 2019 before the developer decided not to go ahead with the project. No plans have been announced for the property since then.
Seter objected to the exclusion of Landmark Towers from the district as it would leave the Century property as the only taxpayer available to pay the district’s debts. In his opinion, it would be better for everyone if the city and Landmark worked with Century to settle the district’s debt to Colorado Bondshares. A certified shareholder report filed by Colorado Bondshares with the United States Securities and Exchange Commission for the fiscal year ended September 30, 2020 indicates that the principal delinquency owed by the district is $ 17,485,000, but the actual value of the debt is $ 1,573,650 and no interest is accrued. above
Seter’s argument fell on deaf ears and city council voted unanimously to approve Landmark’s request when GV City lawyer Tonya Haas-Davidson told council that there was no legal reason for Landmark to stay in the district because “they cannot be taxed, there is no service provided (by the district), they should be excluded”, and it was normal that the city application to the court on behalf of Landmark.
One of the unusual traits of a Colorado metropolitan district is that it must be approved by the elected officials where it is located, usually a city council, even though the city is not responsible for the district’s debts or its actions. .
Metropolitan districts are commonly used to allow a developer to borrow money by selling non-taxable quasi-government bonds to finance the construction of infrastructure (streets, water, sewers, utilities, etc.) in a new development. Debt is repaid over time by residents of the metropolitan area through property tax deductions. While some would argue that the cost of the infrastructure should be borne by the developer, not the people buying homes in the development, this arrangement has become common in Colorado and has gone largely unnoticed, or at least not understood. , for many years. A series of articles in the Denver Post from 2019 on metro areas provided disturbing examples of how residents, who typically don’t know when they are buying homes in a new development that has a metro area, can find themselves financially stranded if the neighborhood, which is usually controlled by the developer, is not able to meet its financial obligations on its obligations. The series of articles drew attention to the long history of poor disclosure and the lack of accountability of metro districts when things go wrong.