Lake County commissioners authorize staff to pursue LLC with Leadville Lake County Regional Housing Authority to secure sales tax exemption

Lake County commissioners at a special meeting on Oct. 25 authorized staff to prepare documents to form a limited liability company with the Leadville Lake County Regional Housing Authority to pursue a sales tax exemption for an Oakwood housing project.

County staff told commissioners the exemption would apply because housing authorities can qualify purchases for tax‑exempt treatment; the county would be the majority member of the LLC and the vehicle is intended to secure the same cost savings the county would receive if it bought the units directly.

The change matters because staff provided preliminary estimates showing the sales tax exemption could save roughly $227,000 tied to the purchase of units in the project. Staff also cited other project costs that would increase buyers' prices if taxes were paid, including a concrete estimate of about $360,000, rental fencing, and added decks and storage for each unit. Staff said the project includes 12 buildings totaling 24 units.

County staff said the LLC would be specific to this project and would be dissolved once the exemption was no longer needed. The county presenter said the operating agreement would set each party's responsibilities; the Leadville Lake County Regional Housing Authority would participate as the member qualifying the project for the exemption but would not take on ownership liabilities for the land. The presenter noted the Colorado Constitution prevents the county from providing a legal indemnity to the housing authority and said the county would instead agree contractually to absorb potential land liabilities so the housing authority is not placed in a successor‑in‑interest position for environmental obligations.

Staff said drafts of the LLC formation documents and an operating agreement are being prepared and that Ashley Coppell, the RHA’s attorney, would review final language. They told the board the county intends to file articles of organization with the Colorado Secretary of State once the board gives final approval. Staff also said some sales taxes are triggered when components are ordered, which makes timing for filing time sensitive.

Commissioners authorized staff to proceed with drafting and filing the documents by voice vote at the meeting. The motion was approved by voice vote; the meeting record does not include a roll‑call tally or member names for the yes votes. Staff said the board will see the final documents again at the board meeting on Sept. 2 for a formal decision.

Commissioners and staff discussed that the statutory sales tax exemption language currently applies to qualified housing authorities and does not explicitly extend to counties, creating the need for this arrangement. Staff suggested pursuing a legislative change in the future so counties would not have to use an LLC to obtain the same exemption. The presenter said the county researched alternative structures but chose an LLC as the simplest route for this project.

Next steps: staff will finalize draft LLC documents and the operating agreement, coordinate review with Ashley Coppell, and file with the Secretary of State after the board’s anticipated approval at the next meeting. The county will dissolve the LLC after the project no longer requires the exemption, according to staff comments.