Tamarron Metropolitan District – the special district servicing the Glacier Club – has missed more than $14 million in debt payments. And La Plata County officials are taking an interest in the matter.

Commissioners voted Tuesday to exercise their right to request information from the special district regarding its ability to service more than $23 million in outstanding debt. The move was prompted by a letter from state officials sent in July 2022 alerting the county that the metro district was about $13 million behind in debt payments.

The Colorado Department of Local Affairs informed the county that “Tamarron may be demonstrating an apparent decrease in its financial ability to discharge its existing indebtedness,” according to a staff report delivered to commissioners by Kathleen Moore, an attorney for the county.

The special district was approved by the county in October 2003. Its electors voted the next month to allow the district to accrue up to $150 million of debt for the acquisition of public utilities such as roads, sidewalks and parks.

According to a 2019 investigation by The Denver Post, the Glacier Club is in good company with regard to its approach to infrastructure financing. Developers frequently form special districts before their projects have been built and take a vote of all electors – often consisting of developers and their spouses – to approve large debt ceilings.

In Tamarron’s case, a summary of votes indicates there were just five eligible voters in the 2003 election to approve the $150 million borrowing limit. Three years later, $23,127,000 in bonds were issued to the district.

According to financial reports filed with the Colorado Department of Local Affairs, no payment was required on those bonds until 2010, at which time interest payments were due. Principal payments were due beginning Dec. 1, 2013.

However, those same statements also indicate that the district has been unable to make any principal payments since the first one was due in 2013. As of the latest statement, which documents the district’s finances through the end of 2021, the metro district entity has missed scheduled annual payments totaling $3,759,000. It is also more than $11 million behind in interest payments.

With a tax rate of over 96 mills, property taxes in the Glacier Club are among the highest in the county, falling below only a few other metro districts that also have large debts to service.

According to the county assessor, there are 254 single-family residences within the district, and at least two condo developments.

The county maintains a legal right to request a finding of reasonable diligence every five years after the debt is approved to ensure the district’s service plan equips it to repay its obligations. County officials do not believe that right was exercised in 2018.

After staff members in the county attorney’s office were alerted of the district’s possible decrease in financial stability, they brought those concerns to the Board of County Commissioners on Tuesday. Although the county has no exposure or liability were the metro district to default, the county does have the legal authority to keep watch over the district’s finances.

According to Colorado law, a special district may not make any “material modifications” to the approved service plan – and a decrease in financial ability to meet its debt obligations is defined as a modification.

Jim Goodman, who serves as the chief operating officer of the Glacier Club and the board president of the Tamarron Metropolitan District, declined to comment for this story.

But he and Rick Carlton, the developer of Glacier Club, offered public comment before the Board of County Commissioners on Tuesday. The comments raised questions about whether a change to the service plan was made, as well as the ethical implications of conflating the business of a private development with the financial stability of a supposedly separate metropolitan district.

Carlton told commissioners the debt had been purchased about five years ago by the Florida-based ITG Capital Group for $7 million.

“They are very cooperative with our attorney – or with the district’s attorney,” Carlton said. “... The bond holder has agreed to set a limit on the bond as far as an expiration date, and he’s also willing to remove an escalation clause that says that at a certain point, if the bonds aren’t being serviced, he can raise the mill levy – he’s removing that. So we have a very friendly bond holder here.”

Carlton and Goodman both pushed the county to speed up the approval of the Club’s development projects, saying that faster growth results in more taxable units, allowing the district to better meet its debt obligations.

Carlton said ITG’s flexibility should quell any concerns raised by the county attorney’s office. However, that flexibility, which has so far resulted in the postponement of debt payments, could constitute a material change in the district’s service plan. As a result, the county could force the district to apply for modifications to the plan, said county spokesman Ted Holteen in an email.

The debt obligations saddled on homeowners in the Glacier Club also raises the question of how property values could be affected. But, because of the wealthy customers to whom the golf community caters, Durango real estate agent John Wells said the impact is most likely negligible.

“It’s very important that we educate the buyer as to the amount of bond debt that is on real estate that a buyer may be considering purchasing,” Wells said. “... That’s less of an issue because a lot of the homes, with the values that they are in Glacier, are purchased by people that can afford to pay the taxes that they’re currently paying.”

Still, Wells said, potential homebuyers should carefully examine the debts for which they could become partially liable.

County Assessor Carrie Woodson said that with the exception of the Tamarron Condos, all homes in the district sell for over $1 million.

As far as next steps for the county, the Board of County Commissioners approved a letter to the district requiring its board to file an application for a finding of reasonable diligence and informing the district that county officials expect it to file a petition to modify its service plan. The district has 60 days to respond.

rschafir@durangoherald.com