Most everyone is familiar with the Sunnyside project on the right-hand side of the hill before Society Turn when leaving town. While this project provides valuable housing to its occupants, it also provides a lesson in ways financing can be "fudged" without voter approval. Sunnyside had two significant advantages going for it: it was completed in 2022, before construction costs spiraled out of control, and before interest rates reached over 7%.

The total pre-pandemic cost for Sunnyside was just over $14 million, with almost $12 million of that financed with 2.82% bonds. The project included approximately 30,500 square feet of livable space, which works out to about $458 per square foot. This amount increases with financing to roughly $631 per livable square foot when fully financed.

To fit within the loophole, the bondholder's only recourse is to take over the property in the event of default. When finance costs are included, the total cost per livable square foot is approximately $621.

However, to keep the monthly finance costs in line with the property's available income at the deed-restricted levels, the Town allowed a $6 million balloon payment at the end of the 20-year term. This payment represents half of the overall amount financed, indicating that the project is not being funded solely by the income generated from the project itself, as required by the TABOR loophole. If there were no balloon payment, the monthly financial costs would be approximately double their current rate.

This financial trick is neither good nor bad, but it is the kind of information that should be available to voters to approve or reject, along with details on the type of risk this financial trick may pose.