After three years and more than A$l million in legal costs, bondholders and the Castle Pines North Metropolitan District have reached a tentative agreement over repayment of $35 million of defaulted development bonds.

The agreement comes after the case was thrown out of bankruptcy court, whereupon bondholders in May won an unusual state court judgment ordering the district to repay $46.4 million in principal and interest on Dec. 15.

Last week, however, an appellate, level court granted the district a stay on the lower court judgment, which means that the district does not have to make the Dec. 15 bond payments.

Following last May's judgment, Castle Pines homeowners began pressuring their board to seek a settlement with bondholders. Each of the 479 homeowners faced an average debt burden of $80,000 to retire the debt used to develop the land.

A month ago, both the district and bondholders dismissed their attorneys and hired replacements. After three weeks of negotiations, the two sides reached the following plan:

* The unpaid bonds, which yielded an average return of 9.3%, would yield 8.55% over 40 years.

* Homeowners would see their property taxes more than double the first year of repayment to 180 mills and then drop to 140 mills the next eight years, then rise again slowly for the life of the bonds.

* Writer Corp., a developer that owns land in the district, would pay higher tap fees for water and sewer hookups.

The district plans to refile for bankruptcy. If granted, Castle Pines attorney Joel Laufer said he will move to get the settlement approved by bondholders and the bankruptcy court by March.

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