Castle Rock Metro Bonds are a Builder Tax

Metro Bond Tax

What is a Colorado Metro Bond?

When a new home builder plans a sub division on a parcel of land, there are no roads, sewer systems, utilities, etc. It is vacant land without a sub division infrastructure. Typically, the town is not willing to build or pay for the infrastructure, but they are willing to move forward with the permitting and growth. Developer needs this infrastructure built to sell houses and are willing to build and pay for it, as long as they get reimbursed for the expense. So they build and pay for this item, sell houses, and make a profit on both items. Quick cash to the builder is the sale of a new build home. Long term cash flow is the repayment of the subdivision build out.

In return the government agrees to collect taxes for the infrastructure expense to pay back the developer’s costs in the form of a bond with defined interest rates and terms. A new sub division is carved out with a new name as a “metro district”. The government and the developer agree on a “Service Plan”, which dictates the bond terms for the metro districts’ repayment plan.

What are a Metro Bond Taxes in Castle Rock CO?

Once a repayment plan has been agreed between the developer and the town with a “Service Plan”, Metro Bonds are issued. The Metro Bonds become a tax lien on the properties in the subdivision to repay the developer. Legal documents are filed dictating the repayment terms. Developer may retain the bonds themselves or sell them on the open market. The government collects the metro tax money to fund the metro bond(s) payments, usually twice a year, which becomes a Metro Property Tax. Douglas County gets paid 1.5% of the revenue collected for their collection efforts. The Town of Castle Rock does not receive any money from this tax. All metro property tax funds received are sent to the metro board to pay the bond holder(s), in addition to minor on-going maintenance. The HOA has nothing to do with the metro tax or bond holder payments. 

How are the taxes administered?

Once the government and developer agree on the bond terms, a metro board is established to administer the funds. A metro board is defined as a quasi-governmental organization, which means the town is removed from its’ responsibility after a signed repayment agreement called a Service Plan. The metro board is tasked with administering the collected taxes and on-going minor infrastructure items. Metro Boards are designed to be run by the residents who live or own property in that sub division. That places the responsibility of the debt repayment on the residents who live and use the infrastructure in their neighborhood.

When building a new area, the board seats are typically held and administered by the developer because there are no residents or not enough residents to run the board. However, the goal is to have local residents on the board with the developer removed, so the resident members work with the bond holders to pay off the bonds with their collected tax revenue and, eventually, eliminate the tax.

In the case of new homes in The Meadows in Castle Rock CO, the developer continues to retain a majority of the board seats with all 7 metro districts 35+ years after the project began in the 1980’s. As such, the developer continues to control a majority of the metro tax money collected. In The Meadows, the bondholder, the developer, and the board members are all closely related entities.

If you have questions or want to be involved in eliminating this tax, please contact Jim Garcia.

Thank you,

Jim Garcia

RE/MAX Professionals
720-385-4497
jimgarcia100@gmail.com
December 20, 2024

2023 – #1 Agent in Castle Rock (Total Transactions)
2023, 2022 – Top .5% of all Agents in Colorado
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Jim Garcia Overview:

Jim Garcia, a top Real Estate Agent in Douglas & Elbert County Colorado, is among the Top 1.5% of All Agents & Teams Nationwide. Having resided in the area for several years, he possesses valuable insights into potential challenges that may arise during transactions. A local agent is crucial for both residential home Buyers and Sellers. For instance, understanding the significant variations in taxes & HOA fees, weighing the pros and cons of different subdivisions, evaluating schools, growth areas, and more are essential. Brokers unfamiliar with the area might not grasp the nuances of the local market.

Jim has been a licensed Real Estate Agent since March 2007, specializing in residential transactions in Castle Rock, homes for sale in The Canyons Castle Pines, Parker, Elizabeth, real estate for sale in Elbert Colorado, and nearby regions. With over 25 years of experience as a senior business executive, serving as CEO/COO, he brings expertise in construction, contract negotiations, intricate real estate deals, fix & flips/holds, 1031 exchanges, short sales, foreclosures, and investment properties.

His objective is to offer top-notch service and sound guidance to all his clients, enabling them to make informed decisions. This empowers them to secure the best possible deal with the most favorable outcome.

Jim is a real estate expert known for his local market knowledge and personalized approach. Clients value his dedication, attention to detail, and community involvement. With Jim, clients receive tailored strategies and support, even after close.

You can view a more detailed professional resume online at About Jim Garcia, and see what clients say about him and read his 250+ 5-Star Reviews.