PWCBG co-founders Ralph Stephenson and Bob Pugh
Gainesville Times reporter Tara Slate-Donaldson
7-8 April 2013
——– Original Message ——–
|Subject:||Brentswood and CDAs|
|Date:||Mon, 08 Apr 2013 10:03:30 -0400|
|From:||Bob Pugh [e-mail address withheld]|
|CC:||‘Ralph Stephenson’ [e-mail address withheld]|
Ralph is absolutely correct in his assessment of the “proffers” and the Community Development Authority (CDA) relating to Brentswood in 2006. As a senior financial analyst with the Prince William County government from 1998 to 2003, CDAs were one of my primary areas of responsibility. Giff Hampshire (County Attorney’s Office) and I jointly did all of the staff work on CDAs at that time. Brookfield Homes would have paid zero of the costs of the improvements to which Ralph referred. In fact, at a town hall meeting at the time John Stirrup organized Lacey Compton (one of Brookfield’s land use attorneys) acknowledged that fact when asked directly. All of those expenses would have fallen on taxpayers as special assessments to pay debt service on the CDA bonds.
Moreover, despite that fact that Chairman Stewart and CXO Peacor deny that CDA and IDA debt have no impact on the County’s creditworthiness, I know as a long-time practitioner in the investments profession that they do. They are not direct obligations of the County but investors consider jurisdictions that approve CDAs, IDAs, and any debt associated with them to have a “moral obligation” to pay the debt if the issuing CDA or IDA defaults. Board approval is required to create an IDA or CDA, and for each and every debt issuance they do. Thus, Brookfield Homes would not only have paid none of the funds that it was proffering, it would have piggy-backed on the County’s credit-worthiness and left County taxpayers holding the bag if the CDA had been unable to pay its debt service.
Please feel free to contact me if you have any questions.
Bob Pugh, CFA, CFP®
NAPFA-Registered Financial Advisor
President, Insight Wealth Management, Inc.
7250 Heritage Village Plaza, Suite 101
Gainesville, Virginia 20155
Office (703) 753-6082
——– Original Message ——–
|Subject:||Re: Inaccuracy in 20-26 Mar GT Article on Stone Haven|
|Date:||Mon, 08 Apr 2013 08:07:52 -0400|
|From:||Ralph Stephenson [e-mail address withheld]|
|To:||Tara Donaldson <email@example.com>|
Thanks, Tara. Bottom line is that since no one (neither state nor county) would’ve accepted responsibility for the CDA, Brookfield would’ve walked away scot-free, cost-free, with no new road capacity whatsoever created, but still able to claim credit for something it never did.
At the time, county planning staff saw this for what it was, a phony offer by Brookfield that really just shifted all financial responsibility onto homeowners and taxpayers while at the same time giving Brookfield political cover, allowing it to appear generous. (And how could anyone in his right mind not accept such a generous offer from Brookfield? : ) I assure you, that when the story is presented that way, those who are uninitiated in the ways of local residential developers will fall for it almost every time. Please note the following excerpts from the attached county Planning Staff documents:
“The applicant has submitted an application to establish a CDA to fund off-site infrastructure improvements. A staff analysis of the CDA application is contained in Attachment B of the rezoning report under ‘Materially Relevant Issues.’ Regarding the use of a Community Development Authority to obtain construction of I-66/Route 29/Linton Hall interchanges, VDOT representatives have indicated VDOT will not enter into an agreement with the Brentswood Community Development Authority. VDOT suggested an alternative whereby the County would enter into an agreement with VDOT to administer the project. In this alternative, the County would then enter into an agreement with the Brentswood CDA. Staff does not recommend this alternative due to the scale and complexity of the I/66/Route 29/Linton Hall interchange. The County is not positioned to administer a large federally funded interstate highway project.”
“Community Development Authority – Denial of the CPA [Comprehensive Plan amendment] would be appropriate because the applicant proposes, with approval of the Board of County Supervisors, to establish a Community Development Authority (CDA) to fund proffered off-site road and recreation facility improvements. If the CDA is not established, the applicant has no obligation to make the proffered improvements. The CDA application is not consistent with the Board’s policy for establishing a CDA.” Ralph
On 4/7/2013 9:43 PM, Tara Donaldson wrote:
You raise an interesting point. I understand what you’re saying but I want to get an expert opinion on whether my (admittedly extremely simplified) paraphrase was inaccurate or just extremely simplified. I feel it goes without saying that “proffer” always implies that the cost is passed onto the future buyers.
But adding in the CDA thing, you have a point there. I’ve asked the planners to give me a definitive on whether it’s wrong to say that Brookfield “offered to pay” for the road project, taking into account the CDA.
As soon as I get an outside answer on that, I’ll run either a correction or a clarification.
Thank you for being so attentive! I appreciate the food for thought and I’m on it.
———- Forwarded message ———-
> From: Ralph Stephenson [e-mail address withheld] Date: Sun, Apr 7, 2013 at 9:15 PM
Subject: Inaccuracy in 20-26 Mar GT Article on Stone Haven
To: GT_Dan Roem <firstname.lastname@example.org>, GT_Tara Slate Donaldson
Tara (info Dan): In your 20-26 March 2013 Gainesville Times front-page article on Stone Haven, there was a very important misstatement of fact. I’m referring to the front-page article titled “Board moves forward with Stone Haven,” the eight and ninth paragraphs, which state: “In 2004, Brookfield Homes proposed a 6,800-home community on the [current Stone Haven] site. In exchange, the developer offered to pay to rebuild the Gainesville Interchange — a $180 million project. It was a huge proposal, but it went nowhere.”
Brookfield Homes did not really offer to pay to rebuild the Gainesville Interchange as part of the Brentswood project. They instead offered to set up a Community Development Authority (CDA) that would have passed the costs of building the $180M in road improvements on to Brentswood residents. The proffers would have been paid through CDA bonds, and the debt service on the CDA bonds would have been paid by a special assessment on (Brentswood) residents, not the applicant. If Brentswood residents could not afford the entire cost, the remaining bill would’ve been passed on to county taxpayers. The developer (Brookfield) was, in fact, proffering the money of other people — future Brentswood residents and probably county taxpayers as well.
Furthermore, the county advised the Board of County Supervisors that the Brentswood proposal did not meet the requirements for a CDA and that even if it had, the county could not legally accept responsibility for certain aspects of the CDA/road building proposal.
Please search on the term “CDA” in the two attachments — the county’s versions of the actual Brentswood proposal — for more info on the CDA. Here’s a background article that may be helpful as well:
I enjoy reading your newspaper and am sure that you want at least as much as I do for your articles to be as accurate and truthful as is humanly possible, so I respectfully request that you issue a correction advising readers of this rather important error in the article in question.
Thank you for your consideration.
Ralph Stephenson, Prince William Citizens for Balanced Growth