Resolution 2008-44 - Laserfiche WebLink

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~~q ~~~ August 26, 2008 Malcolm Flemming, Ciry Manager City of Louisville 749 Main St. Louisville, CO Re: Proposed Takoda Metropolitan District in the City of Louisville Dear Malcolm, We would like to take this opportunity to thank the City for its support and approval of the Takoda Development. Due to an unprecedented nationwide constriction of credit, RMCS has recently found that banks have virtually withdrawn from lending for land acquisition and public infrastructure construction for residentiaUcommercial development projects. The nationwide problem with home prices, which is the source of the banking crisis, is not evidenced in the Louisville market; unfortunately the freeze on credit seems to be a blanket policy that does not spare good projects in healthy markets, and there is no indication how long this policy will last. Though RMCS is well capitalized and we have a quality homebuilder who is ready to purchase and build on over 100 of the Takoda lots, neither we nor the potential homebuilder can secure the financing for the Public Improvements (streets, parks, trails, trunk utilities) from our traditional bank lenders. The only rernaining option for private financing for the public improvements is to look for non-bank equity lenders, who now demand interest rates of over 20% and equity stakes in the development. Such crushing interest costs and the dilution of control will seriously impact the quality of the Takoda Development. Either these costs will force home prices to rise, or the amenities and special features of the development will have to be cut, or both. An even worse, but increasingly likely scenario is that the non-bank loan terms will make the Takoda development as planned and approved no longer practical. This would mean the development would unwind back to the original separate land parcels, and new PUDs would have to be brought forward by the different land owners at some future time. Years of work would be wasted, our company would have to close our business in Louisville, and the City would have to start the process over again. RMCS's financial advisor, Alan Matlosz of George K. Baum Company, has advised that a Takoda Metropolitan (Metro) District could provide much of the funding for the construction of Public Improvements at Takoda, but that the organization of a district and a TABOR election are required before special district financing would be possible. The organization of a district requires the approval of City Council, and by this letter and the attached Service Plan, RMCS is 726 Primt St. Suite 13 Luuis~~illv~, ('O~ 50027 b I'}ume 720.52..1.3620 Pax "720 >65.1a~;~