APA-Florida 2011 Conference

Gary Moyer, Cheryl Stuart, David Tillis

What is a Community Development District (CDD)?

Why Florida created CDDsThe role CDDs have played in Florida’s effort to

manage growthThe economic recession and real estate market

downturn: how have CDDs fared?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?

Independent, special purpose, local governments, with a common statutory charter: Chapter 190, Florida Statutes

Governed by a 5 member board, elected by landowners with a transition to resident-voting

Established by Governor and Cabinet or City/County, depending on size, always with landowner consent

Has power to levy assessments and issue bonds to finance infrastructure (roads, stormwater , recreation, water/sewer, etc)

CDDs are a response to growth, not a catalyst for growth

NOT a general purpose governmentHas no planning, land use, or zoning

authorityHas no environmental permitting authorityAs an independent entity, debt of CDD is not

debt of state, city, or countyDecision whether to establish a CDD is not a

land use decision

Need for uniform, focused and fair procedures in state law for establishment and operation of independent special districts.

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.

“Growth should pay for itself”

Provides long term lower interest rate financing for public infrastructure and facilities

Reduces up front equity requirementsMitigates risk of large scale community

developmentAllows for enhanced amenity levels and

recreation options making community more attractive and livable

Provides a perpetual public maintenance and governance entity with professional staff and stable funding

Higher level of community amenties and recreation opportunities

Government in the Sunshine, fiscal accountability and responsibility, ability to contract for services

Resident elected Supervisors after initial period of landowner elected Supervisors

Professional staff-manager,engineer,attorneyControl their own destiny-decide level of

maintenance and how much to spend

Infrastructure in place sooner than otherwise would be the case

More exactions passed down through entitlements process

CDDs not the cause of growth, but a response to it

Takes burden off local governmentImpact of establishing unit of government

compared to the alternativesLong term maintenance of infrastructure and

compliance with permits

CDDs are NOT identified as the cause of the economic recession! Nor are they the cause of the real estate downturn.

Failure of large landowners to pay assessments has caused some districts to miss debt service payments, tap reserves, or default on bond issues

Levels of service have been adjusted Impact of individual homeowner failure to pay is

minimalReserves, trustee held funds, and other structural

requirements have given time to recover and rebound

If no CDD, likely left only with homeowner’s association with limited financial strength

Long term maintenance of infrastructure Ability to participate in financial workout;

professional staffAbility to collect and enforce assessment leviesGovernmental accountability (open meetings,

public records, etc)More “one off” subdivisions versus master

planned communities with greater variety of housing, land use and recreation opportunities

Will CDDs be a part of the infrastructure landscape in the years ahead?

Has the assessment process “worked”?How will the financial markets/investors react to

CDD bond offerings? What might be different?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?

How might local governments view CDDs going forward?