Residential builders in north metro area are making sure school district can keep up with burgeoning population
by Erin Johansen, Denver Business Journal
Developers in the fast-growing north metro region have contributed more than $4 million and pledged $12 million-plus to help build schools in three communities.
The money is part of the Capital Facility Fee Foundation set up three years ago by builders, local lawmakers and school officials to help fund capital costs in Adams County School District 27J. The district includes Brighton, parts of Commerce City and Thornton as well as some of unincorporated Adams and Weld counties.
The foundation was formed after it became clear there would be a shortfall of at least $18 million between what the district could raise through bond issues and what it would need for schools in the next 10 years.
The dollar amount of bonds that may be sold - after a bond issue is approved by voters - is based on the assessed value of property in the school district.
“We anticipated that enrollment would double in five years,” said Joy Gerdom, director of planning for the 27J school district. “Our guess was we’d have 9,500 students by 2005. We’ll have 9,000 this year, so we’re a little faster than we thought.”
Those who came up with the idea, including three development companies, believe this is the only foundation of its type in the country. One unique aspect is that much of the funding comes from voluntary contributions by builders.
How much each developer pays is based on the type and number of homes it’s building. For example, the fee for a single-family detached home is $1,010 each, and it’s $202 for a condo.
A contribution by Shea Homes, a founding member, just pushed the foundation above $4 million. The other two founding developers are Gateway American Properties and Carlson Associates.
In Colorado, there’s long been a debate over growth, including who should pay for it. The debate has placed environmentalists and developers at odds and led to legislative attempts to limit growth.
“We had a problem with no solutions,” said Joel Farkas, a principal with Denver-based Gateway American Properties, about the funding shortfall. “We wanted to try to solve that problem. Schools are critically important. It’s a misnomer that community developers don’t involve themselves. The first thing we looked at is how to help schools.”
With contributions of more than $1 million, Gateway is the largest contributor to the foundation to date.
“As a master-planned community developer, we’re starting in areas where there’s a demand for what we’re offering,” Farkas said. “We believe growth should pay its own way and we believe it does pay its own way. We take the risk to finance the communities. What I hear [from some developers] is if you’re using impact fees to solve some past mistakes, that’s very different than keeping it in the area where you’re building. I have not seen any resistance at all to this foundation.”
“I think that it’s brought the communities as a whole and each with the school district closer together,” said Gerdom, who also helped put the foundation together. “It provides a better idea about the need. We do have a good working relationship with the three cities and I think the foundation had a good deal to do with that.”
The foundation has nine directors, including representatives for each of the founding developers, three members of the 27J board of education and a councilperson from Brighton, Commerce City and Thornton.
“We aren’t just building one product, but also a community,” Farkas said. “We are combining all those community all those community uses for our ultimate customer - the homebuyer. We want to provide what our customers want, including places to shop, safety and good schools.”
David Foster, an attorney with Foster, Graham, Huttner, Calisher LLP, represents Gateway on the foundation board and helped put the foundation has received inquiries from builders and others nationwide interested in it.
Equal Housing Opportunity