Are Grand Park And Byers Peak Ranch The Next Shorefox?

It's hard not to think so.

I was at the Fraser planning commission meeting regarding the possible annexation of the Byers Peak Ranch property, and I have to say that the 30 year timeline the developer gave is a clear indication that they are going to have to either take a massive hit and sell, or simply walk away from both the Grand Park and Byers Peak Ranch developments.

These two developments came to be during the height of the real estate bubble, and today's Case-Schiller home price index should provide a good idea of where real estate development is going in the U.S.:

The peak occurred in 2006. The rebound from 2009 was strictly due to games being played by the Federal Reserve, the Financial Accounting Standards Board (FASB), and Fannie Mae and Freddie Mac. Reality is beginning to re-enter the picture and thus you see the second down trend. This is referred to as a double dip. Right now, the Federal Reserve is playing games with interest rates. As I've said before, when rates normalize, house prices are going to take a dirt nap.

Both the Grand Park and Byers Peak properties were purchased during the height of the boom, and both of them have taken a swan dive. I personally would not want to be invested in real estate purchased within the last ten years, and would not want to be at the helm of this roller coaster.

My prediction is that these developments will end up like Grand Elk and Shorefox in Granby. Time will tell, but the numbers aren't in their favor. Parent company Cornerstone Holdings will only finance the bleeding for so long before they have to pull the plug.

Here's the letter I sent to the Fraser Planning Commission regarding the annexation:

"Hello Catherine,

I was in attendance at last night's meeting, and wanted to write with my thoughts regarding the annexation of the Byers Peak property.

I'm of the view that people should be able to dispose of their property as they see fit. If Mr. Lipscomb wants to build 2000+ homes on that piece as per the County's allowance, then so be it. He has the water and the land, so if he thinks it can be done, all the power to him. If people want the view that property provides, then they should make him an offer for the property. It's not up to the town of Fraser--especially elected officials--to determine the needs of the many over the rights of the few.

I do think the Town of Fraser should exercise extreme caution when looking at the motives for annexation though. There is a clear history of behavior with the Grand Park development that warrants a bit of skepticism, and that is where my concern comes in.

Currently, the Fraser Recreation Center bond issue is under IRS scrutiny because of reversion clauses that may invalidate the tax-exempt status of the bonds. This is a red flag, and I would urge you on the planning commission to wait until the IRS investigation is complete before making any decisions regarding the Byers Peak property. Be aware that if these bonds are determined NOT to be exempt, the holders will be liable for something like $1.7 million dollars in taxes. What implications this has for Grand Park remains to be seen.

Another issue is that Grand Park's businesses currently enjoy traffic generated by the Rec. facility. The placement of the center is such that all traffic must pass by these businesses. This could be construed as a private business benefitting financially from a publicly funded entity. If that facility wasn't there, I don't believe the gas station, liquor store or deli would be viable businesses. The Town of Fraser enjoys the tax revenues from those businesses, but that has to be offset by the 6.161 mills residents are now paying to the Rec. District. It boils down to a taxpayer-subsidized business, and THAT is unacceptable.

Because the developer of Grand Park has a history of using taxpayer-funded entities for private benefit, I think it should be assumed that this annexation has the same goals. I have not looked closely enough at the development or the potential cost/benefit, so I don't have a clear picture of how annexation would benefit this particular development, but I have some ideas.

Last night, it was stated that this development would proceed regardless of wether Fraser annexes the property or not. In addition, it was also mentioned how the County allows for a much higher density than what is planned for annexation. I believe this is a sheer bluff maneuver to scare the town into action. I think the development will only move forward if Fraser annexes the property because of the need for an existing sewage infrastructure. I don't believe the current developer has any plans to actually build this piece out, but to sell it to a holding company for future use. If the piece is not annexed, the value of the property would be compromised by the need to build a separate sewage handling facility.

At the end of the day, I believe Fraser's sewage and utilities are the prize. There are rumors that the Rec. Center issue was clouded by improprieties, and many homeowners feel they are paying a tax they shouldn't be. It behooves the Town of Fraser to use extreme care in this annexation issue. The assumption should be that this developer will fail, much like the Grand Elk property. The impact of such a failure must be taken into consideration with any decision to move forward with this plan. Fraser can't handle a financial boondoggle, and anything that exposes the town to liability could place the town in jeopardy financially.

Thank you for your time,


Reggie Paulk"