Avimor Parent Could Leave Arizona Buyers On The Hook

One of our GUARDIAN admirers in Arizona sent this news story regarding a planned community in that state developed by the same outfit that built the Avimor development off Highway 55 north of Eagle.

The story points out the potential nightmare Idaho buyers could face if infrastructure is financed using a law that SunCor/Avimor lobbied through the Idaho legislature several years ago. It works like a local improvement district, but the debt is tacked on to the sales price of each home to cover the costs of streets, sewer, water, etc. Here is the report from Arizona:

1/4/2011 12:31:00 PM
“StoneRidge homeowners await bankruptcy announcement”
By Ken Hedler
Special to the Tribune

With a potential bankruptcy looming for the developer of the StoneRidge
subdivision, town government officials plan to meet with homeowners to discuss
how it would affect what they will owe for improvements.

Homeowners currently pay $800 to $1,000 a year into a community facilities
district, and could see their obligations double, Town Manager Larry Tarkowski

The town established the CFD Dec. 1, 2001, at about $14.8 million to pay for the
bridge at StoneRidge Drive and other street improvements, according to Tarkowski
and Management Services Director Bill Kauppi. The debt remains at about $13.5
million for the 25-year life of the CFD, Kauppi said.

The homeowners could be stuck with the bill if the developer, SunCor, files for
bankruptcy, town officials said. Tarkowski said SunCor has paid 100 percent of
the annual debt service, minus about 1,000 homes that SunCor has built in

The CFD assessments are based on the secondary assessed value of the homes,
Kauppi said. Louie Lizza, a member of the board of directors of the homeowners
association, said the rate is $3.30 for every $100 in secondary assessed value.

SunCor officials at the Tempe headquarters were unavailable for comment. SunCor
is a division of Pinnacle West, which owns”>Arizona Public Service.

“They tell us they are continuing a very aggressive effort to sell the SunCor
property,” Tarkowski said.

SunCor this past January announced a deal to sell the 18-hole golf course,
homeowners association center and more than 1,000 future home sites to Shea
Homes and Angelo Gordon Real Estate Inc. However, that deal apparently fell
through, town officials said.

Tarkowski said he and Kauppi plan a series of meetings with the homeowners this
month to explain what a bankruptcy would mean for them.

Lizza said he met recently with SunCor officials, who hold seats on the HOA

“They are going to go bankrupt at some point,” he said. “They are going to
settle with all of their creditors. They are still negotiating with Prescott
Valley for a fix for this (CFD).”

Lizza said a number of homeowners do not understand the CFD line item on their
tax bills. He said StoneRidge has about 2,500 residents.

He suggested one big meeting instead of a series of meetings with groups.

Comments & Discussion

Comments are closed for this post.

  1. Boise got its first equivalent to a CFD with the CID that was set up for the new Harris Ranch subdivision. First of its kind in Idaho. Similar requirements…extra taxes based on value of the home to fund the development. I didn’t know the homeowners were on the hook if it didn’t work out though. I thought the bond holders took that risk.

    EDITOR NOTE–We often hear the idea the risk is on the backs of the bondholders. Do you think they will simply say, “aw shucks I lost $14 million?” There aren’t many loan deals that don’t require collateral and the bondholders will quickly go after sewer, water, roads, etc….or even ski lifts!”

  2. Suncor probably wishes Team Dave had won its lawsuit against Ada County.

  3. sam the sham
    Jan 6, 2011, 1:24 pm

    Rather like the problem residents of Boise County are facing… the people they trusted made an error in judgement, were sued, lost the law suit and (do the idiots making the decision pay – no o o o ) the tax payers will foot the bill.
    Always it trickles down leaving the money in the deep pockets.

  4. As I recall, the bill had bipartisan support until Mayor Bieter warned of just this consequence. Then Republicans rammed it through.

    Capitalism should have risk. Developers used government to ameliorate their risk and spread it to their dupes, er, homeowners allowing the developer to escape the consequences of failure. Sounds like socialism to me, and one which would artificially create an unsustainable real estate bubble. People better wise up and recognize whose got their hands on their wallets.

  5. We need to give the rich more tax breaks so they won’t feel like fleecing us tax payers so much.

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