After residents' furor, Florida CDD bond deal is withdrawn
A Florida developer formally terminated a controversial agreement to sell pools, parks and other amenities in the central Florida retirement community of Solivita, just days before Tuesday’s election in which candidates opposed to the deal are running for the community development districts' boards.
The Poinciana CDD and Poinciana West CDD, which encompass Solivita, signed a purchase agreement without obtaining an appraisal to finance the 15- to 17-year old developer-owned amenities with $73 million in bonds.
The move sparked residents' anger over a purchase price many felt was too high, and led them to oppose attempts to validate the bonds in court.
The deal also spurred five Solivita residents to run for seats on the CDDs' boards of supervisors. All are backed by the grassroots Price is Too High Committee, said candidate Michael Luddy.
The recent sale of Solivita's developer led to a change of tune on the sale and the bond proposal.
On Oct. 2, Scottsdale, Arizona-based national homebuilder Taylor Morrison Home Corp. closed on the purchase of AV Homes.
Brian Brunhofer, the Orlando division president for Taylor Morrison, said in an Oct. 25 email to Solivita residents that the company recognized that proposed sale had been “a point of frustration and confusion for many.”
“We want to move forward focused on building on the strong sense of community, developing a foundation of strong relationships and trust, and to make that mutually successful we have decided not to move forward with the sale of the club amenities to the CDDs,” Brunhofer said, adding that Taylor Morrison will continue to own and operate the facilities.
On Oct. 29, attorneys for the developer formally notified the CDDs in separate letters that the developer would terminate its agreement to support validating the bonds, and to terminate the company’s funding for the effort.
The CDD boards still need to vote to withdraw the bond validation case. Their next meeting is scheduled for Nov. 28, when new board members will be seated. Tuesday's election may bring some new faces to the boards.
“We’re running as a group of like-minded individuals that opposed the bond sale and the manner in which it was being done,” said Luddy, a 64-year-old retiree who bought a home in Solivita in 2013. “The bottom line number on the deal was a huge negative to the residents and to the community at large.”
Luddy, Tony Reed and Elizabeth Lambrides are carrying the Price is Too High Committee banner in the Poinciana CDD board of supervisors election. Peggy Gregory and Roy LaRue are the committee's candidates for the West Poinciana CDD. Luddy said they are running because most of the existing CDD supervisors didn’t listen to residents’ calls “to do the right thing” and obtain appraisals for the amenities before agreeing to a purchase price.
“We are reasonable people who want a reasonable and fair deal,” he said, adding that recent events may give new board members an opportunity to negotiate a new transaction.
Five other candidates are also seeking seats on the boards. Most, if not all of them, support the original deal.
Lita Epstein, a Poinciana CDD supervisor whose term expires in 2020, has opposed the purchase and bond issue since she before was elected in November 2016.
“I believe Taylor Morrison looked at the deal and saw how bad it would be for Solivita in long term,” she said when asked to comment on the termination. “The deal maxed out the bond capacity of the community and left nothing for reserves or capital improvements for 30 years."
Epstein said she hopes Taylor Morrison will work with the CDDs to “structure a deal that is a win/win for both Taylor Morrison and the residents of Solivita.”
In addition to a change in ownership, Luddy said he believes that recent rulings in two ongoing court cases — the bond validation and a class-action suit opposing fees residents must pay to use the amenities — affected Taylor Morrison’s recent decision to sell the amenities.
On Oct. 31, Circuit Court Judge Steven L. Selph ruled that residents opposed to validating the bonds can take depositions of AV Homes' executives. In a prior bond validation attempt that was unsuccessful, another judge prohibited opponents from taking those depositions.
“I think that motivated [Taylor Homes] to cancel the deal,” Luddy said. “AV Homes put the company in bad spot, and got residents up in arms.”
Brenda Taylor, a defendant opposing the bond validation case, hailed Taylor Morrison’s decision to terminate purchase of the amenities and said she hoped they would be turned over to the homeowner’s association.
“We are thrilled that we shut down the sale that would have charged $73 million to the residents for amenities that we believe are required to be turned over to the Solivita HOA at no charge when the developer turns over the HOA to the community residents,” Taylor said.
The CDDs had planned to issue about $102 million of bonds, using most of the proceeds to buy existing amenities and $11.2 million to build a new wellness center and a small performing arts theater.
Luddy said canceling the bond issue as proposed means the deal can be revisited. “Everything is negotiable,” he added.
Taylor Morrison did not immediately comment on the decision to terminate its agreement to sell the amenities.