SMR forges unique financing deal

Florida economist Hank Fishkind has worked many financial deals, but never one like this.

Florida Community Bank will give a line of credit to the Lakewood Ranch Stewardship District, a special taxing district that spans across portions of Sarasota and Manatee counties.

Fishkind, through his company Fishkind and Associates, has served as the Stewardship District’s district manager since 2007, but served as financial adviser to the district since its 2005 inception. He served as financial manager to Lakewood Ranch’s original community development districts when SMR started them about 20 years ago.

Lines of credit may be typical for personal and business finance, but they are an anomaly for community development districts.

“I’ve been trying to do this for 25 years,” Fishkind said, adding his company serves as district manager for The Villages and other well-established clients that have issued more debt than Lakewood Ranch.

CDD supervisors on Sept. 8 signed off on the deal.

Traditionally, CDDs issue bonds, repaid over 30 years, for example, to fund construction of roadways and other infrastructure improvements. Historically, it’s been the only way to finance large capital projects without private money.

The Stewardship District has used bonds to finance the construction of White Eagle Boulevard and other major roads north of State Road 70, for example. But this new financing option will allow it to save on interest and pass those savings on to future property owners.

In the section of Lakewood Ranch generally located east of Lorraine Road, north of State Road 70 and south of State Road 64, the Stewardship District anticipates spending about $84 million on infrastructure to prepare the area for development.

Fishkind said on phase 1, estimated to cost $45 million, the district will save up to $5 million, possibly more,  by using the line of credit instead of issuing bonds.

Tony Chiofalo, Stewardship District supervisor and CFO for Lakewood Ranch developer Schroeder-Manatee Ranch, said the savings come from the ability to spend smaller amounts of money upfront and then use bonds when more significant capital is required.

“You’re paying interest on what you’re not using,” Chiafalo said of initial use of bonds.