Arizona community newspaper examines legal tool developers use to subsidize projects

Residential and commercial developers in Arizona rely on commercial financial districts to finance public improvements, which allows them to sell homes for less while municipalities deal with obtaining streets, water and sewer lines and other public infrastructure. In Prescott Valley, Ariz., CFDs were created during development of three subdivisions and a commercial corridor along a highway. In a three-part series, Ken Hedler of The Daily Courier in Prescott (A on Google map) "examines the residential CFDs, where bonds issued by the districts finance water and sewer lines, and other improvements," and explores the pros and cons of CDFs.

The first part of the series discusses CDFs' financing of improvements in subdivisions, for which homeowners will pay long-term through property taxes. Hedler reports two Prescott Valley subdivisions with CDFs went out of business and a third sold out to another developer. The second part explains how laws govern CFDs, and the third part is a response from Prescott Valley town officials who told Hedler they are "unlikely to approve community facilities districts for master-planned communities in the foreseeable future" because of the continuing housing slump and previous problems with CDFs.