NEWS
February 15, 2012
Land Use
As anyone involved in the real estate market can attest, the past few years have witnessed dynamic changes in both inventory and capital markets. The market today bears little resemblance to the landscape of 2008 and prior boom years, leaving lenders, developers, investors, and buyers scurrying to reposition themselves. One pronounced trend of great impact locally and nationwide has been the precipitous decline of multi-family projects. Although the so-called Great Recession kicked off with a wide inventory of this housing product on the market, new construction and sales continue to be stymied by lending challenges. In response, the Sonoran Institute, a regional non-profit with a mission to “inspire and enable community decisions and public policies that respect the land and people of western North America,” recently hosted a workshop on real estate financing and economic development in Glenwood Springs. The event was well attended by Garfield County real estate professionals, including attorneys from Karp Neu Hanlon, P.C., and featured a panel of experts providing baseline information on multi-family real estate financing as well as group discussion. Copies of the presentations are available at http://www.sonoraninstitute.org/where-we-work/central-rockies/real-estate-financing-and-economic-development-workshop.html.
The outlook presented at the financing seminar was mixed. Although banks are recapitalized and assets are high, banks, taking a cue from current Federal Housing Authority (FHA) financing requirements, are risk-averse to an extreme degree. The most desirable projects in terms of financing are conventional housing schemes such as the single-family residential suburban development, a common enough sight in Western Colorado and beyond but hardly responsive to the region’s needs and values. In contrast to conservative lenders, residential development trends indicate a sense of place and community is most desirable to buyers. Walkability, a mix of uses, 24-hour activity, and transit centers are all highly ranked factors for today’s buyer. The obvious disconnect between the two products described, combined with other economic factors, is driving potential home owners to the rental market, even in an environment with historically low mortgage interest rates. See http://www.freddiemac.com/pmms/pmms30.htm. Andy Knudtsen of Economic and Planning Systems, Inc. reported that 16,000 rental units are in the development pipeline in metropolitan Denver, and investors are focused on the rental market as well.
Will this trend continue, or will lending requirements for mixed use and condominium projects relax to the extent that potential buyers will be able to finance their desired product? In response to this question, participants at the Sonoran Institute seminar discussed various indicators but agreed that the federal government and FHA must do more to encourage investment by setting reasonable standards for construction and residential lending.
| January 27, 2012 |
PROPERTY TAX – CHANGES TO AGRICULTURAL CLASSIFICATION
Last session, the Colorado legislature passed House Bill 11-1146 (“HB 11-1146”), amending the statutory definition of “agricultural land” for property tax purposes to exclude up to two (2) acres of land underlying and surrounding a residence and other improvements (i.e. barn, stables, etc.) unless those improvements are “integral to an agricultural operation” conducted on the property. See C.R.S. § 39-1-103(1.6)(a)(I)(A). Previously, “agricultural land” specifically included land underlying improvements located on agricultural property.
Under the new law, an improvement is considered “integral to an agricultural operation” if an “individual occupying the residential improvement [or spouse, parent grandparent sibling, or child of the individual occupying the residential improvement] either regularly conducts, supervises, or administers material aspects of the agricultural operation.” See C.R.S. § 39-1-103(1.6)(a)(I)(B).
HB 11-1146 poses two risks to owners of agricultural land. First, it may result in the land underlying improvements to be taxed as “residential” and not “agricultural.” Second, this legislation could have an effect on the rights of redemption in foreclosure proceedings. Under current law, owners of land taxed as agricultural are entitled to a 6-month redemption period. Owners of non-agricultural land do not receive any redemption rights.
County Assessors are currently sending owners of agricultural land questionnaires to determine if a property should retain its agricultural status under the new law. Attorneys at Karp Neu Hanlon, P.C. have successfully handled property tax protests, appeals, and abatement proceedings involving agricultural property and can help protect a property’s beneficial classification and ensure you are not overpaying property taxes.
To see the text of HB 11-1146, follow this link: http://www.leg.state.co.us/CLICS/CLICS2011A/csl.nsf/fsbillcont3/523FB7A4B6092FB28725780800801513?Open&file=1146_enr.pdf
Planning for Rifle’s downtown future
City hires Boulder firm to conduct planning project for Rifle’s future
ENLARGEThe latest step in the process is a yearlong downtown strategic plan project that will determine viable options for development and rehabilitation for Rifle’s downtown core and ‘gateway’ area.
According to City Planner Nathan Lindquist the first phase of the project will address a number of topics including future transit options, street design, building and site design and engineering, market analysis and energy sustainability. The ultimate goal is to determine a number of viable projects, and be prepared to move forward as soon as funding for development and construction can be attained.
“The main idea is to identify the projects we want to move forward with and put the city in a position to leverage this money to get more funds for construction,” Lindquist said. City Council approved a contract with Boulder-based Charlier and Associates at its Jan. 4 meeting to head phase one of the project. Funding for the project comes from an $806,000 Community Challenge Planning grant awarded to the City of Rifle from the U.S. Department of Transportation and the U.S. Department of Housing and Urban Development (HUD). The city received the grant in Oct. 2010, according to Lindquist, specifically because of its participation in the Colorado Sustainable Main Streets Initiative and the city’s track record of building relationships with other organizations to complete projects such as the Rifle Civic Plaza and Rifle Branch Library project, where the city collaborated with the Garfield County Library District.
The contract with Charlier and Associates is for $445,118 for phase one of the Downtown TOD Strategic Plan Project.
Councilor Keith Lambert expressed slight opposition to the project despite later voting for approval at the Jan. 4 meeting.
“I don’t want to plan for the sake of planning,” Lambert said, pointing out that a lot of the scope of work presented in the plan has previously been done. But according to Lindquist, Charlier will use what planning work has already been done and move forward.
“We wanted to take the planning that has already been completed and take it to the next level, and not redo the work that has already been done,” Lindquist said.
More specifically, the city has already completed a significant amount of work to define a transit-oriented development pattern for the downtown and gateway area including a downtown master plan, a gateway conceptual alternative report, an associated feasibility study and an updated downtown zoning code. Each of these documents won’t be rewritten, Lindquist said, but will be used to provide a foundation for the overall assessment.
Specifics of the project will look at Second Street between the Rifle Branch Library and the Brenden Rifle 7 Movie Theatre to determine opportunities best suited for the community that will enhance downtown.
“We are trying to find ways to collaborate with businesses and property owners to bring new opportunities and investments to Rifle,” Lindquist said. “That is the main idea.”
Another specific topic to be addressed through phase one will determine the feasibility of an integrated local and regional transit strategy including potential for high capacity connections into the Roaring Fork Valley and future connections down valley as Rifle becomes an employment destination.
“This will look more to regional transit and what is the long term vision,” Lindquist said. “Do we want to eventually have busrapid transit, like Aspen to Glenwood, or not? If we do, we need to look at how that will work in the downtown even if it’s 10 years away.”
Phase one is scheduled to be completed in Dec. 2012. There is also a public outreach component to phase one as well to garner public input on the projects. According to Lindquist, an initial meeting will likely be scheduled for early March, but no specific date has yet been set.
