Check out market updates

Loveland council approves 3 new metro districts for Centerra South

LOVELAND — The final financing step for the Centerra South development in east Loveland received a positive nod from the Loveland City Council Tuesday, a step that will, as anticipated, add significantly to the property taxes that commercial and residential property owners will pay.

Centerra South is a planned unit development proposed by McWhinney Real Estate Services Inc. It is included in a new urban renewal area that permits use of tax-increment financing to help pay for public infrastructure in the development.

As proposed, the development will require at least $147.5 million in public improvements. Of that, slightly more than half, or $72.2 million, will be paid by metropolitan district property taxes, as approved by the City Council Tuesday.

Three new metro districts will be established in Centerra South — District 1 will be a commercial district, and Districts 2 and 3 will be residential districts.

As outlined by city finance director Brian Waldes, the metro-district financing plan meets the city’s 17-point requirements, with two exceptions, and includes provisions that go beyond the 17-point requirements.

“We’ve asked for more transparency than required by the 17 points,” he said. Also, the city manager will have more oversight over the public improvements than required under typical city policy.

The exceptions to the 17-point plan involve the debt and mill levies permitted.

Waldes said that the developer will have 20 years, instead of 10, to issue debt because of the size of the project. And the debt mill levy in the commercial district will be 55 mills instead of 50, while the operating and maintenance mill-levy cap will be 15 instead of 10.

McWhinney representative Alan Pogue said the extra time to issue debt was requested because of the uncertainty of recessions in the future given the length of development time for Centerra South. The additional higher limits on mill caps were requested in order to meet the anticipated public improvement costs.

Mill-levy caps in the residential portions of the development will be at the maximum permitted under the city’s rules, which are 50 mills for debt and 10 mills for operating and maintenance.

Residential properties in the development will be subject to 79.5 mills of property taxation under normal circumstances from school, city, county and other taxing authorities. The additional 50 plus 10 mills will not quite double the property taxes on a $500,000 home, according to information shared with the council.

The 79.5 mills on a home of that value would generate $2,763 in property tax, which increases to $4,848 when the additional metro-district mill levies are added.

Council member Andrea Samson said she was concerned about the additional taxation placed on homeowners but said she understands that people who live there might like the additional amenities and be willing to pay for them.

Mayor Jacki Marsh, one of two votes against the metro districts, summarized her objection: “I don’t believe metro districts are good for commercial or residential.”

The council voted 6-2 to approve the districts and their service plans. Council member Patrick McFall was absent.

Source: BizWest