McGeady Becher is committed to providing our clients with innovative, personalized advice related to mechanisms available under Colorado law to implement the financing of public infrastructure through the issuance of tax-exempt and, in some instances, taxable bonds, loans, and other obligations.
Whether your financing needs relate to raw land in an unincorporated area of a county consisting of thousands of acres, providing improvements for the benefit of an active and growing community, or the redevelopment of an urban neighborhood consisting of just a few acres, our attorneys have the experience and ingenuity to provide sound advice to reach individual financing objectives through the use of special districts.
Over the years, we have developed partnerships with municipal bond attorneys, investment bankers, and underwriters with the skills and resources necessary to support a variety of public financing models—from relatively small, single-issue bond deals to complex debt structures involving multiple revenue sources. We closely co-counsel with legal teams to address the complex challenges involved with utilizing various financing methods and multiple-revenue stream structures.
Members of our Firm have extensive experience with:
- General Obligation Bonds – Bonds secured by the full faith and credit and general taxing power of a governmental entity. Property taxes are tax deductible to the property owner as opposed to fees or assessments imposed by private entities (such as HOAs), which are not.
- General Obligation (Limited Tax) Bonds – Bonds secured by a limited ad valorem property tax. Generally, special districts are limited to issuing bonds, which are payable from a limited mill levy until their debt to assessed valuation reaches a certain threshold, typically 50% of debt to assessed valuation.
- Revenue Bonds – Payable from any revenue source of a district, including fees, charges, or other non-tax revenues collected from district residents and customers, which are not tax deductible.
- Public Improvement Fees – Public improvement fees (PIFs) are imposed via private covenants recorded on a designated area of real property located within a special district. The PIF is imposed on all taxable retail transactions within the designated area and may be used to support the issuance of municipal bonds. The PIF structure may be utilized independently, or in concert with other financing mechanisms, to supplement revenue streams available for the financing of public improvements.
- Tax Increment Financing – Working with municipalities and urban renewal authorities to establish urban renewal areas, whereby incremental sales and/or property taxes collected with respect to the redevelopment of the property may be utilized to finance public infrastructure to support the development within the urban renewal area.
- PILOT (Payment in Lieu of Taxes) – Payments that are made to compensate a local government for some or all of the property tax revenue that would otherwise not be available because of the nature of the ownership or use of the property (i.e., property owned by tax-exempt entities).
- Grants and Loans – Available through the Colorado Division of Local Government and other state and federal agencies and programs, a special district can be eligible for infrastructure improvement grants and/or very low interest loans under a variety of programs.
Related Article: Alternative Revenue Streams for Public Infrastructure Financing (Colorado Real Estate Journal, February 20 – March 5, 2013).