MUNI WATCH: Land-Secured Deals Ailing In Current Economy: "NEW YORK --A developer in Florida this year reportedly used $409 million of tax-exempt bonds to build upscale golf course residential communities in 10 counties. The firm suddenly stopped payment on all of them as the battered housing market and tightened bank lending practices in the Sunshine State caught up with it.
The incident marks just one example of how the municipal bond market is feeling the pain and agony accompanying the current downturn, especially as it impacts a sliver of the market loosely known as land-secured deals.
'Tax increment financing deals have not done well in this environment because they are speculating on continued property tax increases,' which are anything but a given in this economy, said Matt Fabian, senior municipal market analyst for Municipal Market Advisors, based in Concord, Mass. 'I think these bonds are going to feel a lot more credit pressure.'"
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This is worth reading to understand how development strategies of municipalities--TIFs, CIDs, etc.--that once were sure things have now turned into potential disasters.
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