Valley Voices: Questions about Eagle River Station
There are missing documents from the Eagle River Station file to support the developer Trinity/Red’s fiscal projections:
1) A balance sheet or statement of financial condition for Trinity/Red would give a clue as to its financial strength and commitment to see the project to fruition. Yet what I discerned from my reading is that the town of Eagle is called upon to lend its financial statement of around $66 million-plus via municipal bonds. Should not the financial records of Trinity/Red be as transparent as those of the town? In other words, if this project “goes south” like this recession portends, Trinity will simply slough off its shell, and dissolve, but the town of Eagle (taxpayers) will remain to pay off the defaulted debt obligations. Would this be called a “bail-out” a la Bear Stearns, or what?
2) A pro forma range of the costs of bond indebtedness to acquaint the town with what its liability will become were it to buy into this partnership. It’s the town of Eagle’s credit, along with the projected income stream, that will determine the rates at which these bonds will become salable in a sick financial market. Also, the debt service for these bonds will be a prior lien or claim upon sales tax revenues that would affect the $4.8 million that Eagle River Station promises at build-out on a $180 million per annum gross.
3) A statement of Eagle River Station corporate debt structure that will fund its end of the deal; ergo, does Eagle River Station have financing committed, and upon what terms? I subsume that the private lender that the developer uses will have a first deed of trust for construction on the 89 acres; query, will this lien be prior to the bond indebtedness and/or the claim of the town of Eagle?
4) A schedule of anticipated rents at and after build-out based upon letters of intent or commitments from prospective commercial tenants; this would be supportive of the $180 million income stream that Eagle River Station touts. Rather, Eagle River Station bases its anticipated rentals on a hypothetical $296 per square foot that is taken from general statistics (compiled when, where and by whom, we can only surmise). In fact, the Eagle River Station impact statement avers that it has no commitment letters or schedules of anticipated rental rates to assure that it (itself) can financially survive.
5) A definitive statement of cost-sharing on infrastructure, both on and off site, that would indicate who pays what. The impact statement is equivocal as to what the metro district would pay, what Eagle River Station would pay, and what the town of Eagle’s share would be. If the town knew precisely what its share would be, then it can enter into the deal intelligently, and budget accordingly. Also, it would be interesting to know what the actual corporate monies will be that Trinity/Red will put into the deal, including the acquisition of the property from Red Mountain.
6) A study by Eagle River Station showing the actual per-square-foot revenues generated by commercial operations in the Eagle or Vail Valley areas. This would then factor into the equation additional costs such as: higher freight and fuel expenses in the mountains, higher wages, higher utilities, etc. Instead, we are left to assume that it is $296 per square foot for all types of business, from art galleries to food markets. Not knowing who the prospective tenants are, we have no way of knowing how realistic this $296 is.
Eagle River Station’s fiscal presentation reminds me of a hamburger with no beef ” as the little old lady once said, “where’s the beef?” Of course, and if the summary representations of Trinity/Red are true, and there is no downside on revenues as illustrated by the “tick-tact-toe” demonstration, then the principals of Trinity/Red should have no objection to personally underwriting the venture, or placing sufficient monies into escrow as good faith. There is method in Trinity/Red’s reticence to substantiate its projections of wealth, and that is a harbinger for the town of Eagle to heed.
Fred Butler is an Eagle resident. E-mail your guest column to email@example.com.
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