County gives Celebration Pointe new way to pay for infrastructure
Published: Wednesday, December 19, 2012 at 6:55 p.m.
Last Modified: Wednesday, December 19, 2012 at 6:55 p.m.
Celebration Pointe, a large planned development to be built off Archer Road near Interstate 75, has a new way to fund its infrastructure thanks to the Alachua County Commission.
This month, the commission approved the establishment of two community development districts (CDDs) for Celebration Pointe.
"They are in essence kind of a special purpose local government," Missy Daniels, a senior planner with the county, said.
These government units offer an alternative method of financing infrastructure by giving developers the ability to issue bonds and levy assessments on property owners, according to a staff presentation at the commission's Dec. 11 public hearing.
"One big benefit is it charges the property owners that will benefit directly from the infrastructure for the cost of it," she said.
It's similar to the idea of paying homeowners association dues, but a CDD can amass such fees through the local tax collector's office, Alachua County Growth Management Director Steven Lachnicht said.
"It's like a more firm version of a property owners association," Lachnicht said.
A district is supervised by a five-member board subject to the state's Sunshine Law. Members are initially appointed but are later elected by property owners, according to the staff presentation.
The first CDD for Celebration Pointe includes land set aside for mixed-use purposes, such as retail space and conservation, while the second is for its residential sector.
The commission didn't give the development's districts optional powers, which sometimes include powers related to waste collection and disposal services, mosquito control and other issues. County staff recommended granting only general powers because they didn't have specific information on how the districts might use the optional ones, Daniels said.
A little over 600 districts have been established in Florida, she said.
Alachua County approved a CDD in the mid-2000s for the Oakmont development that hasn't been built, largely due to a tough market, Lachnicht said. If Celebration Pointe similarly stalls, it shouldn't negatively impact the county.
"We're not accepting any liability for them," he said.
Many CDDs haven't succeeded. Richard Lehmann, who runs an independent investment advisory and research firm and publishes the Distressed Debt Securities Newsletter, said 183 CDDs are in default on about $5.5 billion in bonds throughout the state. Lehmann tracks districts in Florida at floridacddreport.com.
Lehmann questioned whether new CDDs can find bondholders willing to buy their bonds when so many projects have stalled. The housing crisis hurt the districts, which couldn't find people to buy their properties and thus couldn't pay bondholders back.
"They are definitely high-risk bonds," Lehmann said.
Svein Dyrkolbotn, owner of SHD Development LLC and project developer for Celebration Pointe, said the plan is to sell district bonds to raise money for infrastructure and use assessments to pay those bonds back.
"Community development districts are a funding mechanism for when you build public infrastructure," he said. "And because it's public infrastructure, you know, we found that this was a better way to do it than conventional financing."
The project's biggest infrastructure cost will be the main roadway into Celebration Pointe, which includes plans for an overpass over I-75.
Joe MacLaren, director of the special districts department at Fishkind and Associates, said these districts are best for large developments.
This funding method is relatively stable compared to property owners or homeowners associations, primarily because developers can collect assessments through the county tax rolls and thus are more assured of receiving that revenue, said MacLaren, who advised SHD Development.
Contact Morgan Watkins at 352-338-3104 or firstname.lastname@example.org.
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