Municipal Bonds, like any other loan, must have collateral to secure the loan. Beaumont’s Sewer Bonds were secured with promises of Sewer Fees collected.
For the rest of the Bonds Beaumont used the Appraised Values of the Development Areas, and later the Property Owners’ Homes without their knowledge, as collateral for the City’s Mello Roos Bonds.
The first Bond acquired in 1994 for $10,290,000. Page 40 of the 1994 Series AB Bond lists the total appraised values of the Original Development Areas at $54,912,000.
Together; Rolling Hills Area 4 and Heartland Area 5 were responsible for 1/2 of the 1994 Bond and received 1/2 of the Funds, or $5 Million, to build their Development Areas.
Neither Development Area was built.
Rolling Hills Area 4 was Appraised for $7.6 Million in 1994 and is Appraised at $37.7 Million in 2016. Even though the property is contaminated and can’t be developed; it still increased its value 5-fold in the last 22 years.
Heartland Area 5 was Appraised for $11.7 Million in 1994, but is Appraised at only $8.7 Million today. To my knowledge there nothing ‘wrong’ with this property that prevents development, yet its value has declined by $3 Million, or 25% in the last 22 years.
Rolling Hills is 155 acres, Heartland is 414 acres.
There is something ‘wrong’ with Heartland Area 5; the first of being that no one seems to know who even owns it.