Letter: Wrong way in Basalt
On the pre-development agreement with Lowe Enterprises and what it will do and not do to aid in the decision-making process: This also will explain the upset and opposition to entering into this process prematurely.
1) The analyst will provide an accurate description of the terms and cost of any bond issuance for varying amounts that we might want to see such as $2 million, $3.5 million or $5.5 million. He will let us know the cost in sales tax percentages that could fund various options for the town to purchase the park. This information will be good.
2) The developer, Lowe Enterprises, which right now does not have to compete with any other developers on this, will provide that analyst projections for both expenses and revenue for various amounts and types of buildings. The problem with this is that Basalt is treating Lowe as the only possible developer, in essence granting it a monopoly on this process. So I believe there is a 99.999 percent chance that Lowe Enterprises will say that all the projected costs will be higher than they will be and that the projected revenue will be far lower than it will be. This will lead to the false conclusion that more development is required to make a reasonable profit and pay off the Roaring Fork Community Development Corp. and the town of Basalt.
3)The analyst will combine the first two steps to provide recommendations. Any information that comes from Step 2 and used will be worthless in my opinion. Garbage in, garbage out.
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So Basalt has set itself up for frustration. The only way to do this right is to buy the park, or to decide what Basalt wants first, and then bid out Step 2 to the open market rather than allowing the monopoly situation that the pre-development agreement has set up. The worst that could happen by doing it the right way is it might have to have the plans readjusted and rebid. But it would be worth it to manage this right.
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