Are Florida DDDs a shyster’s scam? (St. Augustine Record)

My friend Diane Mills first alerted me to the corrupt farce of development districts in 2006, shortly after we net for the first time at a St. Augustine City Commission meeting.  She's an astute and intelligent local businesswoman who has spoken out for years against developer corruption.

I've opposed creation of new development districts, and have never heard a coherent policy reason for them.

Here's an excellent opinion column by Bob Moore from the St. Augustine Record:





Opinion
Are Florida DDDs a shyster’s scam?
Posted Sep 21, 2019 at 12:41 PM
Bob Moore
St. Augustine Record

Florida Statutes Chapter 190 Community Development Districts: Are a Legislature approved “Local Unit of Special-Purpose Government,” financed by a developer’s tax-exempt Bond Issue debt. The FS 190.048 CDD disclosure is bogus as a three-dollar bill, being ambiguously worded so not to disclose diddly squat, obviously designed by its very wording for deception: It reads:

(Name of) COMMUNITY DEVELOPMENT DISTRICT) “MAY IMPOSE AND LEVY TAXES OR ASSESSMENTS, OR BOTH TAXES AND ASSESSMENTS, ON THIS PROPERTY. THESE TAXES AND ASSESSMENTS PAY THE CONSTRUCTION, OPERATION AND MAINTENANCE COSTS OF CERTAIN PUBLIC FACILITIES AND SERVICES OF THE DISTRICT AND ARE SET ANNUALLY BY THE GOVERNING BOARD OF THE DISTRICT. THESE TAXES AND ASSESSMENTS ARE IN ADDITION TO COUNTY AND OTHER LOCAL GOVERNMENTAL TAXES AND ASSESSMENTS AND ALL OTHER TAXES AND ASSESSMENTS PROVIDED FOR BY LAW.”

Notice: This deceptive worded disclosure starts with the word “may,” which is a word that denotes something could or might be but not stating what is. Disclosures are for the sole purpose of disclosing facts, but the Florida Lawmakers approved CDD disclosure does not disclose the amount of the bond debt or purpose for the bond debt, which is to pay for the subdivision’s amenities that sales agents direct the buyers’ attention toward while making their sales pitch. It’s definitely an attention getter.

Yet, what is deliberately, willfully and intentionally withheld is that unsuspecting home buyers will also be assuming the developer’s bond debt for not only the amenities, but also for reimbursement to the developer for the costs of his CDD subdivision infrastructure. Those costs include entranceways, streets, curb and gutter, utilities layout, drainage system and ponds, sidewalks, lighting, common areas, etc. Neither does it disclose the pro-rata balance that will be owed by each homeowner, nor disclose annual payments or debt maturity date. Nor, does it mention the Developer’s Deferred Costs over and above the bond debt that could be in the amount of $1 million-plus, which will also be transferred to clueless home buyers by the Developer’s CDD hand-picked Board of Supervisors prior to the developer turning control over to the residents.

The fact of the matter is: A Florida residential subdivision can have its homeowner amenities, governed by its HOA/POA without it being a CDD. So, why a CDD subdivision? Because it’s a scheme allowed by Florida Legislators to enhance developers’ profits, apparently as a trade-off for campaign contributions. Repayment by the buyers includes paying not only for the subdivision’s amenities but also the “double jeopardy” CDD infrastructure debt — as well as being double taxation for the homeowner. The amenities (like our CDD subdivision), make up only about 30 percent or less of the bond debt, while the remaining 70 percent of the developer’s originated 30-year bond debt is for the purpose to reimburse himself for his subdivisions infrastructure costs. Yet subdivisions’ infrastructure costs are always figured into a developer’s sales price of the house, as well as being included in the appraiser’s total estimate of value of the home – always! Thus, when purchasing a CDD, home buyers pay for the same stuff twice, as developers whistle all the way to the bank.

The question is, why do Florida legislators allow home buyers to be scammed by nondisclosure of the facts when purchasing homes in developers’ CDD subdivisions?

I have letters from three former Northeast Florida Association of Realtor presidents, and the Florida Association of Realtors, insinuating Florida Legislators do not require sales agents to fully disclose all the CDD facts to home buyers. Isn’t this “legal fraud legislation” and predatory selling, where buyers are conned, duped and deceived by lawmakers allowing nondisclosure of the truth?