Despite current economic turmoil, Pitkin County is moving forward with the issuance of $10 million in bonds to cover the cost of buying local open space.
The county’s open space program was given authority in 2006 by local voters to issue up to $20 million in bonds backed by property taxes. The county’s financial advisory board has recommended that land purchases be made before local real estate values climb even higher.
While those values might have stopped soaring lately, Pitkin County Treasurer Tom Oken said the county decided Thursday to push ahead with the $10 million bond issuance after seeking advice from its bond counsel.
In response to an e-mailed question, Oken on Friday wrote: “With respect to market conditions, here is an excerpt from yesterday’s proposal letter from our bond underwriter: ‘Despite the current market turmoil, the opportunity to issue approximately $10 million of Bank Qualified bonds is very good. The ‘BQ’ market is quite strong — and perhaps the only market segment that is showing signs of life at the moment.”
According to Oken, banks purchasing the county’s open space debt can classify the county’s interest payments as tax-exempt income, which makes the county debt “more attractive to banks than larger, taxable debt issues.”
While the large municipal bond market is largely locked up due to the international financial crisis, there is still a market for smaller debt such as the county’s $10 million in bonds, according to Oken.
Oken said it is common practice for the county to issue open space bonds “whenever acquisitions exceed the annual property tax revenue allocated for open space,” currently about $6 million.
About $2 million of the proceeds from the $10 million bond is expected to be spent right away, and a portion of the proceeds will be used to reimburse the county’s general fund for land purchases in 2007, when it spent $15 million to conserve seven square miles of land in Jerome Park and to place a conservation easement on 187 acres of the Grange Ranch in Basalt.
The county will have three years to spend the rest of the money, which open space staff members said they do not expect to be a problem given local land prices and the long list of desirable parcels in the county.
Some of the current open space deals working their way through the county’s approval process that would be purchased with the bond proceeds include 20 acres of land along the Crystal River just downstream from Redstone known as the Argeros parcel for $355,000, another nine acres of land along the Crystal River across from Filoha Meadows known as the Larson parcel for $550,000, and a one-acre parcel along the Roaring Fork River in lower Woody Creek that will provide public access to the river. The county purchased that acre, known as the Neiley River Parcel, for $255,000.
Bond proceeds could also cover the $2.05 million cost of the Sawmill Hill parcel in Redstone, which includes 266 acres on the hillside above the Redstone Inn and the Redstone Castle, if voters reject Referendum 1C.
That ballot question authorizes a complicated land swap involving the Ryan Parcel, an open meadow between the Pine Creek Cookhouse and the Ashcroft ghost town that the county purchased for $3.2 million in 2000.
The land swap also includes the Sawmill parcel, as well as a 40-acre parcel on the Crystal River now owned by the Bureau of Land Management, land on Smuggler Mountain, and the Wildwood parcel near Difficult Campground.
The sale of the Wildwood parcel for $2.05 million is expected to cover the cost of Sawmill Hill. But the bond question is a bit of an insurance policy so that even if Pitkin County voters — for the first time ever — reject an open space deal, the county can still move forward with acquiring Sawmill Hill.
Earlier this year, the open space program also purchased the old Emma townsite for $2.65 million with $300,000 in assistance from the town of Basalt.
The department also recently secured a conservation easement on the Darien Ranch in Marble for $891,500 along with funding from Pitkin County, Aspen Valley Land Trust and Great Outdoors Colorado.
“This is the busiest I recall us being since I began working here in 1997,” Barb D’Autrechy, a program specialist who coordinates much of the activity in the county’s open space program. “We are really busy — we have a lot going on.”
D’Autrechy says there are also several other ongoing discussions with local landowners that she could not disclose.
On Oct. 1, the open space board held a two-and-one-half hour executive session at a “ranch in Snowmass” to discuss “land acquisition.”
bgs@aspendailynews.com