Gypsum wraps two deals in one
Gypsum, CO Colorado
GYPSUM, Colorado – Gypsum officials moved forward with their purchase of the Cotton Ranch Golf Club Tuesday night, plus one more thing – they worked an additional six-acre property into the deal.
“The Bindley property is a parcel adjacent to the town property,” said town manager Jeff Shroll. “It sits atop the hill and overlooks the high school and elementary school. We’ve been looking at it for years and the opportunity came up near the end of November.”
The extra purchase adds $840,000 to the Cotton Ranch deal, for a new total of $2.9 million and a new principle of $3.32 million. That will all be financed by a lease purchase with town hall as collateral.
“Scary,” said Pam Schultz in a hushed voice to her fellow council members as they participated in a conference call with lawyers working the deal Tuesday night.
Shroll said the town is saving $30,000 to $50,000 in finance charges by working the two deals into one.
Gypsum closed on the Bindley parcel Wednesday, paying the $840,000 in full with funds from the open space account.
“We would prefer not to close on it today,” Shroll said Wednesday, “but that’s the way it has to be with the owner for tax purposes.”
The open space account currently holds about $1.2 million, collected from a 1 percent real estate tax. When the finance deal closes Jan. 15, $420,000 will immediately be put back into the open space account, Shroll said.
In the contract, Gypsum has the option to pay off the lease purchase in full after eight years. Shroll is confident the town will be able to do that.
“You will always own your property but it’s subject to leases that affect your ownership rights,” said Penfield Tate, a lawyer for PMC Commercial, the lending company for the Cotton Ranch Golf Club.
The Cotton Ranch Golf Club went into foreclosure earlier this year. Last month the town of Gypsum stepped forward to purchase the property.
The term of the financing lease is set to expire in 2034, should the town opt to pay it off over a longer period of time. The ground lease on the town hall is set for 2039. That way, if a problem comes up, the bank has options to work something out while Gypsum keeps its town hall.
The town will be required to make an annual appropriation to finance the deal, but that amount is not set at this point, Shroll said. However, it is known that the maximum amount will not exceed $227,000.
As to the future of the Bindley property, it is too soon for the town to decide, Shroll said. It will probably host joint uses, such as a sports complex and open space.
Of the entire lease-purchase agreement, Shroll thinks it’s a great deal.
“We’re getting collateral of three times the amount we paid to have the town hall built in 1997,” he said.
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