Last chance for Village at Avon
October 8, 2012
AVON, Colorado – Deadlines have come and gone as Avon town officials and developers of the Village at Avon have tried – so far in vain – to settle years of legal disputes. But what happens if the lawsuits aren’t settled?
The Avon Town Council and developer’s representatives will take another crack Oct. 9 at passing on first reading an ordinance essential to finish the settlement, first announced in October of last year. A vote on that ordinance – which alters the land-use approvals first granted in 1998 – was twice delayed last month. If the parties can’t settle the case, they go back to court.
It’s impossible to predict what will happen if the town and the developers end up in court again – a six-week trial is currently set to start in early January of next year – but there are some certainties.
One is that the Village at Avon’s finances – which drove the parties to court in the first place – will become more constrained and complicated.
If the parties don’t settle, much of the development’s future financial tune will be called by BNP Paribas. The French bank currently holds a letter of credit that the developers are using to pay bondholders who originally financed the streets and other public improvements at the subdivision.
The bank informs a trustee of its intent to allow bond payments from the letter of credit. In the last year the bank has three times notified the trustee that bond payments can be made. But that may come to an end after Nov. 16.
According to an Oct. 5 letter from BNP attorney Brandee Caswell to town officials and developer’s representatives, Caswell wrote that the bank will provide one more notification.
But, the letter states, according to Avon Town Attorney Eric Heil, the “town must take final action … by Nov. 16, 2012 under its Municipal Code and that time period cannot be extended … “
If the parties can’t reach agreement by then, Caswell wrote, BNP “… will not provide any of the financial or other economic concessions set forth in the (settlement term sheet).”
Those concessions include arrangements to allow construction of a 2 million gallon water tank, an essential element required before anything else can be built on the nearly 1,800-acre property. If the tank isn’t built, Walmart, Home Depot and the Traer Creek Plaza commercial building will be the only structures on the land – and producing any kind of tax revenue – for the future.
And, if the bank declines to make any more payments to bond holders, the bonds will go into default, which will require BNP to buy the bonds from the current owners. If that happens, Caswell said virtually every penny of all the revenue from the project will go toward paying off the bonds.
Business Editor Scott N. Miller can be reached at 970-748-2930 or firstname.lastname@example.org.