Pan and Fork purchase in Basalt: Unaffordable or perfect timing?
SUMMARY OF SIDES
Proponents of the Basalt ballot issues say the time is perfect to borrow money to buy land and build a legacy park because interest rates are so low.
Opponents of the ballot issues say the town has already spent a lot of money at the Pan and Fork site and should recoup some of the investment.
Opponents of Basalt’s ballot proposal to buy additional land at the former Pan and Fork Mobile Home Park site contend town voters have already spent too much money on the property.
Proponents counter by saying that buying another 2.3 acres for $2.9 million is a great community investment that makes financial sense now because of favorable interest rates.
Basalt voters will settle the issue in the November election. Question 2F will ask voters if they want to buy 2.3 acres of land at the Pan and Fork site that fronts Two Rivers Road. The town would use some of the land to enlarge its envisioned riverside park. (The town already owns the part of the Pan and Fork adjacent to the Roaring Fork River.)
Roughly half of the additional property would be reserved for development of commercial or public uses.
Question 2G will ask voters to approve nearly $4 million for park improvements. Those bonds would only be issued if voters approve 2F. If the land acquisition fails, the town will use existing revenue sources to make incremental improvements to the parkland it already owns.
If both questions are approved, Basalt would issue bonds for about $7 million.
Tax increase or extension?
One point of contention is phrasing — is it a tax hike or not? If the ballot issues are approved, Basalt town government will extend an existing property tax being used to pay off bonds issued in 2013. Those bonds don’t have to be paid off until 2023, but Basalt is in position through its repayment schedule to pay them off three years early in 2020, according to Bruce Kimmel, senior municipal advisor for Ehler’s Inc., the town’s financial advising firm.
Instead of paying off the bonds in 2020, the town would extend them through 2026 to fund the purchase of the Pan and Fork property and the park improvements.
Basalt resident Doug McDonald is an outspoken supporter of the Pan and Fork purchase because it would get the land under the town’s control. Basalt can buy the land without increasing its property tax bill.
“The current mill rate isn’t going to be impacted at all,” McDonald said.
Steve Chase, a Basalt resident who opposes the land purchase, contends that an extension of an existing property tax is still a tax increase. If the land isn’t purchased, tax bills will decrease in 2020 when the original bonds are repaid.
“By extending our debt another six years to 2026, is that not a tax increase?” asks a display Chase uses at public presentations.
The financial case against
The town has already spent significant funds on the Pan and Fork site — though not all for creating a park.
The Roaring Fork Community Development Corp., a nonprofit organization, bought the entire 5 acres at the Pan and Fork Mobile Home Park in August 2011 for $3.25 million. It already had arranged the sell the town of Basalt nearly 3 acres, some of which are in the river, for $1.2 million.
The town spent $1 million to relocate residents of 38 mobile homes on the site. Relocation of residents “out of harm’s way” of flooding was deemed a top priority for the town.
The town also spent $2.1 million to ease the flooding risk of the stretch of the Roaring Fork River along the Pan and Fork and stabilize the bank.
Another $1.7 million was spent on infrastructure for Community Development Corp.’s 2.3 acres and to raise it out of the floodplain. Without that work, none of the site would be developed.
Chase is asking Basalt residents to look at how much Basalt will be investing in the Pan and Fork park, also known as the Basalt River Park, if the ballot issues are passed.
When factoring in interest paid on bonds, the town has incurred nearly $6 million in sunk costs at the site. Chase questions if the town can afford devoting another $7 million to buying additional land and making the park improvements. He claims the bond request is not a responsible path for the Town Council to pursue when there are other pressing needs, such as affordable housing, child care facilities and infrastructure upkeep.
Some opponents of the ballot questions want the town to recoup some of the funds invested — specifically the $1.7 million spent to make Community Development Corp.’s property developable and at least half of the $1 million spend on location — through development of Community Development Corp.’s land rather than using it as a park.
The financial case for support
Proponents contend it makes financial sense to issue bonds now to take care of interest rates that are at the lowest level in 65 years, as Kimmel and the town’s bond counsel have regularly reminded the Town Council.
Now is the most cost effective time to create what they are labeling a “legacy park” that will make Basalt a regional draw.
If the property purchase fails, the town cannot approach voters again until November 2017. It is almost certain that interest rates will climb by then, McDonald said, so it will be more expensive to develop the park.
McDonald and Basalt resident and bond supporter Mark Kwiecienski contend that Chase is assigning expenses that don’t belong to the Pan and Fork park effort to stir sentiment against the ballot issues.
The funds spent on the relocation of residents of the mobile home park and the river work to ease the flood threat “are costs the town was going to incur anyway,” McDonald said.
Proponents also claim the town’s final bill for developing the park won’t be as inflated as opponents say. Some funds will be recouped by development of the 1 acre closest to the Rocky Mountain Institute’s Innovation Center. The open space programs of Pitkin County and Eagle County also will be approached for funds to help buy the land from the Community Development Corp. If they agree to help, it will reduce Basalt’s commitment.
Some park proponents also said that preventing development of the entire Community Development Corp. parcel is priceless.
“The development community is ready to pounce if this doesn’t pass,” McDonald said.
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