New housing will be built within the next couple of years as the town council approved service plans for two metropolitan districts during an Aug. 21 town council meeting. 

A metropolitan district is a quasi-municipal corporation and political subdivision of Colorado and is governed by a five-member board. 

The District must be compliant with the town’s codes, rules, policy and regulations and the service plan contains the District’s purpose, financial plan, powers and requirements. 

Councilmembers approved four resolutions to approve the first amendments to the service plans for the Hess Ranch Metropolitan Districts  5-8, located between Stroh and Hess, west of North Crowfoot Valley Road. 

According to project documents, the first amendments will allow the Districts to form special improvement districts within the town boundaries and impose special assessments to finance capital improvements. 

“It’s important to note that these will be assessments and not property taxes or development fees,” said Town Attorney Kristin Hoffman. 

A Special Improvement District - SID - is an entity that has been used by cities as a mechanism to finance public improvements. They are not a separate government but are governed by the metro district board. 

For this project, Dream Finders is anticipated to build close to 1,800 residential units at a price point ranging from $600,000 to $900,000. 

“The metro district bonds are paid by future property taxes and these are revenue bonds that are repaid prior to the homeowner moving into the property,” said Shelby Noble, managing director at Piper Sandler. 

Also, assessments will be paid at or prior to the issuance of a certificate of occupancy, said Noble.

Some of the advantages outlined in the presentation include early stage financing, lower cost of borrowing and longer term financing, Noble said. 

“The interest rate is significantly lower,” she said. “The developer has to pay these costs regardless, and their cost of financing is significantly higher and so allowing for the special improvement district, gives them a lower cost of capital, which would ultimately be passed onto the homeowner.” 

Additionally, the debt issued by the special improvement district will not be considered debt under the service plan and does not count against the metro district’s debt limit, said Hoffman.

Council also approved a resolution for the Service Plan for the Kime Ranch Metropolitan District, which will assist the town with construction and maintenance of infrastructure the town determines is necessary or desirable in connection with the impacts of development in the District. 

The District is located north of Mainstreet between Longs Peak Lane and Parker Vista Circle, the District is estimated to be about 43 acres. 

“A district is necessary for this project because Kime Ranch is necessary to keep development competitive,” said Elizabeth Cortese, legal counsel for the McGeady Becher P.C. 

There is currently no jurisdiction to undertake financing, construction or ongoing maintenance of needed improvements, said Cortese. These districts are a cost-effective way to finance public infrastructure, generate independent revenues and amortize the costs through the payment of property taxes. 

Stated in a document provided to the town, under an intergovernmental agreement, the District agrees to impose a property tax of five mills, which will be remitted to the town. 

The district will include 148 residential units and the build out is estimated to be completed by the end of 2025. 

Cortese said the city will never be responsible for district debt and all debt must be issued in compliance with TABOR requirements.

In addition, the District will not be able to operate or maintain any part or all of the public improvements as there will be a separate homeowners association put in place to provide that function in line with the town’s rules on district zoning property. 

Public improvements include streets, water, storm sewer, sanitary sewer and landscaping. 

Councilmember Laura Hefts said that members of the community often wonder why the council continues to approve the building of more homes and why the town is becoming more crowded. 

Hefta reminded the public that the Kime family sold their ranch to developers, as many do across the country. 

“We [town council] have no ability to interfere with private landholders and what they do,” said Hefta. “But they do come before us such as tonight to talk about the requirements with regards to the property the developer will now have.” 

Finally, the council approved the Town’s Model Single District and Multiple District Service Plans, which is in accordance with the Parker Municipal Code. 

Revisions made to the plan include an additional definition for clarification, the district may establish one or more special improvement districts within the town’s boundaries and impose a Special Assessment within such special improvement district.