Special tax district to facilitate development in east Springs disbanded
Back then, Powers Boulevard was a two-lane blacktop, not a six-lane speedway flanked by a who's who of national retailers.
Back then, the sea of rooftops that's come to define Colorado Springs' suburban sprawl was cow pastures.
That was the mid-1980s and Colorado Springs and Powers Boulevard were on the cusp of change that would ultimately see new neighborhoods flowing east over prairies that had been ranches for more than a century and would turn the lonely road on its eastern border into its commercial heart.
But first, there had to be the Metex Metropolitan District.
Until seven miles of Powers was widened to four lanes, the city wouldn't annex the land that developers coveted.
The developers' brainchild: a special district that would fund the improvements - widening Powers between Platte and Constitution avenues and extending it north to Woodmen Road - and recoup its costs with a tax on the homeowners expected to flock to the area.
It got the job done and transformed the city in the process, but not before a banking crisis, a near bankruptcy, residents facing soaring property taxes threatened to walk away from their homes, threats to barricade Powers and charge a toll, and a government bailout.
Last month, the district declared mission accomplished and petitioned the state to dissolve it after halting collecting taxes in 2007 and paying off its debt eight years early in 2008.
It's a watershed moment for a district that nearly went belly up, hobbled in its infancy by the savings and loan crisis that dried up home construction and forced the district to seek handouts from Colorado Springs and El Paso County.
Metex issued $13 million in debt and levied property taxes to pay it off. The road was finished within a year. That was when the S&L debacle hit.
The Resolution Trust Corp., which took over failed thrifts that had guaranteed Metex's financing, refused to honor those guarantees, designed to make debt payments until enough houses were built to share the burden.
Lacking that cushion, the district's mill rate soared from 8.75 mills in 1987 to 31 mills in 1990 because nobody was buying homes. A mill is $1 for every $1,000 of assessed value.
A typical homeowner's Metex bill went from $183 to $378 within a year or two.
"The mill levy kept going up, and it got to the point where people were leaving their homes. Just plain walking away," said Rosemary Ferrarini who with her husband, Bob, bought a house in Stetson Hills in 1988.
Other districts were in worse shape. Colorado Centre southeast of Colorado Springs, had issued general obligation bonds without a mill-levy cap, so when the economy sank with only a handful of homes built, the levy exploded to 3,000 mills, said Pete Susemihl the district's lawyer.
People abandoned their homes, and homebuyers looked askance at special districts.
"There was bad press for special districts," Metex manager Connie Goodwin said. "A lot of districts were filing for bankruptcy. It really put a black cloud over anyone buying in a special tax district."
As the mill rate climbed, Metex residents seethed.
"We are 5 percent of the users of Powers and 100 percent of the payer," Ferrarini said. "There was talk of barricading the road, putting up toll roads. People were upset that we were the only ones paying for it."
That's when the district board persuaded the city and county in 1992 to dedicate a half-mill from the county's road and bridge fund. Total bailout: $7 million.
"Once they knew the worst they could expect, that relieved the anxious buyer, and sales did start turning around," Goodwin said.
It was the beginning of an eastward march of Colorado Springs that provided affordable housing to tens of thousands of new residents during the 1990s that didn't abate until the current recession.
After the bailout, the mill levy dropped to 15 mills and eventually fell to 10.45 mills in 2005, the district's final tax year.
Big box stores, movie theaters and restaurants followed the rooftops and Metex went from a district of roughly 50 parcels in 1986 to 15,069 today, assessor records show.
Tax money poured in enabling Metex to pay off the city and county in 2003 and retire its debt early.
The city has since traded Powers Boulevard in exchange for Academy Boulevard, which had been a Colorado highway.
Oddly, hardly anyone noticed when the Metex mill levy dropped from tax bills, Goodwin said. The Ferrarinis, for example, both of whom served on the district board at different times, paid $165 in Metex's final tax year, less than the $183 they paid in 1993, although their home's value more than doubled.
Though Metex soon will pass into history, Susemihl said it left lasting changes.
After it and other districts ran into financial trouble, lenders created new financing tools that capped mill levies for general obligation bonds. That in turn forced developers and bond holders, not homeowners, to assume risk if markets soured.
Second, Metex served as the model for developer-funded infrastructure, a concept often repeated since, such as with Jackson Creek Parkway at Monument and Woodmen Road to Falcon.
"Metex turned out to be a great success," Susemihl said, "and set the standard for how major off-site road projects are going to get done in this county."
-
Call the writer at 636-0238
