January 13, 2025, Lakewood City Council will vote in a new ordinance regulating metropolitan districts. The Denver Post has done deep investigations into metro districts, exposing them as mechanisms that bury taxpayers in debt with no accountability. Other cities are starting to pay attention and not allowing metro districts. Lakewood, on the other hand, is still supporting developer-sponsored metro districts. Staff has been bringing forward this ordinance since 2021 and backing down against resident pushback in Lakewood and across the state. Now the time has come.
The new ordinance has language attempting to fix some existing problems with metro districts. However, a city ordinance cannot fix the problems that exist within state law. Lakewood is passing the ordinance now to enable the developers of The Bend to apply for metro district status, which is anticipated in February.
Metro districts are critical for developers to make money from bonds without a vote from residents – because there are no residents to vote yet. Research shows this debt does not benefit residents.
“…developers issue a small tranche of debt on the bond market with unfavorable terms (above-market interest) and then buy the debt themselves so future homeowners will end up paying the developer for decades through their property taxes for a completely unnecessary load of bad debt.” -Denver Post
“Metro district financing is the opposite of affordable housing.” – Rooney Valley News
Will Lakewood have a “safe” metro district ordinance? Not if state law prevails. They can only make baby improvements.
“[metro districts] all lead to the same result – taxing residents without representation based upon single party agreements by a developer with a confessed conflict of interest to pay themselves profits by issuing taxes with no accountability for how the money is spent.” – Rooney Valley News
“…debt is often intentionally hidden and getting true control of metro districts can be hard if not impossible.” – Denver Post
For example, one of the improvements Lakewood attempts is to reveal home cost differentials showing that residents will not be over-paying for homes. Except there is no way to audit the costs, get company financials, or hold the developers accountable if they are overcharged.
“The Service Plan shall include a cost estimate of what an individual property within the District would cost an End-user with and without the establishment of the District.“ – proposed ordinance
Once the metro district status is granted, Lakewood has little authority to make sure the developer governs fairly, a point that several Council Members brought up in past meetings. As the quotes above show, metro districts are historically problematic and more expensive for the end-residents. Lakewood hopes it will be different this time.
“This time” includes The Bend development at 6th and Union. As of fall 2024, the developer anticipated applying for metro district status in February. Then they would have the advantages of being a government entity, while being blighted and thereby partially funded by Lakewood.
All opinions in this or any post are the personal opinions of the author