The Coloradoan covered the foreclosure hearing yesterday of The Promenade Shops at Centerra in Loveland see story
LovelandPolitics previously covered the issues related to a dispute in court between the partners (McWhinney and Poag & McEwen) that have curiously not been covered to our knowledge by any mainstream media source.
Poag & McEwen, the managing partners of The Promenade Shops at Centerra, appealed the county property tax assessment of the shopping center in an attempt to lower their annual property tax burden and improve the bottom line of the center.
McWhinney opposed a re-assessment of the property value to a lesser value to defend the 98.8% of the property taxes rebated to the McWhinney controlled Centerra Metro District. The conflict between the partners ended in court where a judge was reported have decided to postpone a decision until after the foreclosure. KeyBank will likely support the lower assessment and reduced property taxes putting a strain on the Centerra Metro District’s ability to repay the $100 million plus public bond debt issued to build Centerra.
According to sources within Poag & McEwen, they were unhappy with McWhinney using the Metro District to develop competing projects like Grand Station by using property taxes generated by The Promenade Shops for questionable “public purposes.”
A quasi-government taxing entity Centerra has been operated out of McWhinney offices by McWhinney employees who determine when they were performing a function for McWhinney or for the benefit of the Metro District.
KeyBank may now be able to appoint non-McWhinney controlled directors to the Centerra board who could object to McWhinney’s previous governance of the Metro District.
Any comments?
Loveland Politics is constantly bashing and making these crazy predictions about McWhinney and the Centerra Metro District. It’s to the point that these predictions and ‘news stories’ seem more like name calling and mudslinging.
But guess what folks, LP has called it again. Tuesday’s City Council agenda (which just came out this morning) includes an item asking City Council to approve the ability for Centerrra Metro District to refinance the ‘2008 bonds’, could it really be because of what LP is predicting above? Centerra says no, but the True Barometer could be right again. . . Great job Loveland Politics on keeping us informed!
We are about to see if the new city council is different from the old one. The latter diverted resources and waived annual tax revenues by the tens of millions to subsidize Centerra, hoping it would be a catalyst for high-paying jobs and large future sales taxes. They enabled large debt financing at low rates w/ no recourse to the city for repayment thru conduits like the Centerra Metro District. They prioritized that part of Loveland above others for all manner of infrastructure improvements. With all these advantages, Centerra failed anyway.
Now that it’s in foreclosure, refinancing will only make sense for the project, if it lowers payments near term and stretches out principal repayment far into the future. However, a successful refinancing of tainted bonds like these will almost certainly involve adding the city’s guarantee for repayment. Putting the city and all its residents on the hook for formerly private Centerra debt is a bad idea, no matter how many future jobs & taxes are imagined.
The fact is that Centerra exists. How McWhinney, Poag & McEwen, and KeyBank divide up the losses from their poor decisions is up to them and the courts. If left alone by the council, Centerra will find its way into stronger and smarter hands at a lower price, and somebody will make money by owning it – without more subsidies or guarantees. The last thing Loveland needs to do is to try again to prop it up. That will only save the former owners from their already highly-subsidized mistakes.
It’s time to let Centerra stand or fall on its own and focus city resources on long-neglected infrastructure elsewhere that could yield a quicker payoff with less risk to taxpayers. Replacing century old sewers and drainage downtown would spur more rapid development at a lower cost to the city without adding to sprawl. The West Eisenhower corridor has needed attention for years and would likely also give the city a more rapid payback in increased sales tax revenues and higher property values. Centerra was an expensive distraction for the last decade. Let’s hope it’s not a future fascination for the new city council.
Neil and Kevan bring up some observations which I believe accurate, I would like to add a bit to that.
The productive life of these malls is much shorter than the maturity date of the proposed extention and suggesting unkown future development as an avenue for more funding is nothing short of a ponzi scheme.
As previously pointed out, bond payments are already in the rears/very soon to be. It is time that responsible people operate east Loveland in a manner that does not require any more public funding or risk.