9/9 FRI 8:00 | Community Development Districts


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Cheryl Stuart
David Tillis
Susan Beaugrand

With more than 500 community development districts throughout Florida, CDDs have been a common way to finance and, in some cases, maintain public infrastructure in developing areas.
This session will review their historic role in providing such infrastructure, and then examine how CDDs have fared in the face of the economic recession and decline in Florida real estate
values. We'll also discuss how Florida's law governing CDDs has worked in these difficult times. The diverse panel will share "lessons learned" from their varied perspectives, and what each believes the future holds for these special district infrastructure providers.

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9/9 FRI 8:00 | Community Development Districts

  1. 1. APA-Florida 2011 Conference Gary Moyer, Cheryl Stuart, David Tillis
  2. 2. <ul><li>What is a Community Development District (CDD)? </li></ul><ul><li>Why Florida created CDDs </li></ul><ul><li>The role CDDs have played in Florida’s effort to manage growth </li></ul><ul><li>The economic recession and real estate market downturn: how have CDDs fared? </li></ul><ul><li>Lessons learned: what does the future hold for CDDs as a part of Florida’s growth management landscape and as a way to meet infrastructure finance and maintenance needs? </li></ul>
  3. 3. <ul><li>I ndependent , special purpose , local governments , with a common statutory charter: Chapter 190, Florida Statutes </li></ul><ul><li>Governed by a 5 member board, elected by landowners with a transition to resident-voting </li></ul><ul><li>Established by Governor and Cabinet or City/County, depending on size, always with landowner consent </li></ul><ul><li>Has power to levy assessments and issue bonds to finance infrastructure (roads, stormwater , recreation, water/sewer, etc) </li></ul><ul><li>CDDs are a response to growth, not a catalyst for growth </li></ul>
  4. 4. <ul><li>NOT a general purpose government </li></ul><ul><li>Has no planning, land use, or zoning authority </li></ul><ul><li>Has no environmental permitting authority </li></ul><ul><li>As an independent entity, debt of CDD is not debt of state, city, or county </li></ul><ul><li>Decision whether to establish a CDD is not a land use decision </li></ul>
  5. 5. <ul><li>Need for uniform , focused and fair procedures in state law for establishment and operation of independent special districts. </li></ul><ul><li>An independent district can constitute a timely, efficient, effective, responsive and economic way to deliver basic services, thereby providing a solution to the state’s planning, management and financing needs for delivery of capital infrastructure. </li></ul><ul><li>“ Growth should pay for itself” </li></ul>
  6. 6. <ul><li>Provides long term lower interest rate financing for public infrastructure and facilities </li></ul><ul><li>Reduces up front equity requirements </li></ul><ul><li>Mitigates risk of large scale community development </li></ul><ul><li>Allows for enhanced amenity levels and recreation options making community more attractive and livable </li></ul><ul><li>Provides a perpetual public maintenance and governance entity with professional staff and stable funding </li></ul>
  7. 7. <ul><li>Higher level of community amenties and recreation opportunities </li></ul><ul><li>Government in the Sunshine, fiscal accountability and responsibility, ability to contract for services </li></ul><ul><li>Resident elected Supervisors after initial period of landowner elected Supervisors </li></ul><ul><li>Professional staff-manager,engineer,attorney </li></ul><ul><li>Control their own destiny-decide level of maintenance and how much to spend </li></ul>
  8. 8. <ul><li>Infrastructure in place sooner than otherwise would be the case </li></ul><ul><li>More exactions passed down through entitlements process </li></ul><ul><li>CDDs not the cause of growth, but a response to it </li></ul><ul><li>Takes burden off local government </li></ul><ul><li>Impact of establishing unit of government compared to the alternatives </li></ul><ul><li>Long term maintenance of infrastructure and compliance with permits </li></ul>
  9. 9. <ul><li>CDDs are NOT identified as the cause of the economic recession! Nor are they the cause of the real estate downturn. </li></ul><ul><li>Failure of large landowners to pay assessments has caused some districts to miss debt service payments, tap reserves, or default on bond issues </li></ul><ul><li>Levels of service have been adjusted </li></ul><ul><li>Impact of individual homeowner failure to pay is minimal </li></ul><ul><li>Reserves, trustee held funds, and other structural requirements have given time to recover and rebound </li></ul>
  10. 10. <ul><li>If no CDD, likely left only with homeowner’s association with limited financial strength </li></ul><ul><li>Long term maintenance of infrastructure </li></ul><ul><li>Ability to participate in financial workout; professional staff </li></ul><ul><li>Ability to collect and enforce assessment levies </li></ul><ul><li>Governmental accountability (open meetings, public records, etc) </li></ul><ul><li>More “one off” subdivisions versus master planned communities with greater variety of housing, land use and recreation opportunities </li></ul>
  11. 11. <ul><li>Will CDDs be a part of the infrastructure landscape in the years ahead? </li></ul><ul><li>Has the assessment process “worked”? </li></ul><ul><li>How will the financial markets/investors react to CDD bond offerings? What might be different? </li></ul><ul><li>How will consumers react to buying in communities with CDDs? How much will that reaction depend on the amenities provided by the CDD compared to other developments? </li></ul><ul><li>How might local governments view CDDs going forward? </li></ul>