Beleaguered Cornerstone Seeks New Path Forward
by Gus Jarvis
Sep 19, 2013 | 2159 views | 0 0 comments | 32 32 recommendations | email to a friend | print

Proposing Mil Levy Increase to Cover Infrastructure Costs

WESTERN SAN JUANS – With only a few property owners, a defunct golf course and mounting infrastructure needs, the owners of the beleaguered Cornerstone Colorado subdivision are seeking changes that would allow its homeowners association to provide covenant enforcement and design review services.  The owners also hope to hold a special election to raise the district’s mil levy to cover infrastructure costs.

Because Cornerstone straddles the Montrose/Ouray county line on Horsefly Mesa, two public hearings are now scheduled to take place in order for the Cornerstone Metropolitan District No. 1 and 2 to change its consolidated service plan. The Ouray County public hearing is set for Sept. 24 while the Montrose County hearing is set for Oct. 7. The move to amend the service plan comes after the massive 6,000-acre development, which includes a Greg Norman-designed 18-hole golf course, fell victim to the housing crash of 2007-2008. District officials are seeking a sustainable way to move forward out of that crash.

Clint Waldron, an attorney representing the Cornerstone Metropolitan District, spoke via telephone with the Montrose County Commissioners on Monday, when he explained the two proposed changes in operations: the first to permit the HOA to provide architectural review and provide covenant enforcement and the second to raise new taxes to cover the district’s operating and maintenance costs.  

“Right now the cap is unrealistic,” Waldron said, referring to the current mil levy. “Overall there is a bulk of service including water and wastewater treatment services and the budget is just two thin.”  

Commissioner David White summed it up by asking, “Basically, you don’t have enough operating capital?”

According to another district official who spoke on the phone, before the housing crash Cornerstone had an assessed valuation of $18 million, which generated $270,000 in tax revenue for the district. That valuation has now dropped to $4.4 million, generating approximately $70,000 in tax revenue for the district.

An increased mil levy would have to be approved by Cornerstone Metropolitan District voters. If it were to fail, Waldron said another possible solution would be to collect a new fee from every owner and “limp along until we can come up with a better solution.”

It was approximately one year ago that a group of investors from Arkansas and Nashville, including the owner of The Bridges Golf Club in Montrose, Lew Thompson, purchased the majority of assets at Cornerstone, suggesting that the subdivision could have a brighter future. But last March, members of the Cornerstone Golf Club and the Cornerstone Homeowners Association filed suit against the development’s new majority owners, charging that they have engaged in “willful and wanton” breach of contract, breach of fiduciary duties and civil conspiracy, among other charges.

The majority owners effectively closed and stopped maintaining the golf course and clubhouse last summer and, according to the complaint, have “indicated they plan to put to private use” both the clubhouse and “the 3,100 acres of open space purchased to the preclusion of the owners of the Homesteads.”

It is unclear what the status of that lawsuit is right now. Interim general manager of Cornerstone, Eric Feely, did not return phone calls by press time.

 

gjarvis@watchnewspapers.com

Twitter: @Gus_Jarvis

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