Why this matters
VooDoo is the cleanest case study for how Telluride Housing Authority debt is structured — what it costs, who pays for the gap, and what's queued up to come due. The numbers are not in dispute; they come straight out of the Town's own 2025 Budget Book and 2026 Enterprise Fund budget, the Colorado Sun's April 2026 reporting, and the project's bond payment schedules.
What VooDoo is
- 27 deed-restricted residential units plus the Coffee Cowboy commercial space.
- Owner / borrower: the Town of Telluride, via the Telluride Housing Authority.
- Completed: 2024.
- All-in public cost per unit: approximately $955K — the highest of the THA's five projects. The figure includes three bond series, roughly $4.7M in cash subsidies from the Affordable Housing Fund, and about $1M in waived tap fees.
The debt — $20.07M, three series, all due Dec 2032
VooDoo is financed with three series of interest-only revenue bonds placed with NBH Bank. Total authorized principal is about $20.065 million. All three mature simultaneously in December 2032.
| Bond series | Rate | Principal at maturity |
|---|---|---|
| Series 2022A | 4.69% | $6,234,290 |
| Series 2022B | 5.86% | $14,472,068 |
| Series 2023 | 5.86% | $2,339,506 |
| Combined balloon (Dec 2032) | $23,045,864 |
Source: 2025 Budget Book debt schedule, pp. 259–261 (cited in the April 2026 Debt Analysis).
The Town's annual cash outlay between now and 2032 is $1,190,240 in interest-only coupon payments — about $12 million over the life of the bonds. Then the principal comes due as a single payment. By that point the Town will owe roughly $2 million more than it originally borrowed, against a ten-year-old building.
The rent does not cover the debt
Per the Town's 2025 Budget Book (VooDoo Fund Summary, pp. 95–96) and the independently-sourced Telluride Debt Analysis (April 2026), which draws on Colorado Sun reporting of April 19, 2026:
| FY2025 line | Amount |
|---|---|
| Rental revenue, actual (Colorado Sun) | $872,000 |
| Operating expenses (Budget Book pp. 95–96) | $134,098 |
| Annual debt service | $1,190,240 |
| Total annual cost (DS + OpEx) | $1,324,338 |
| Required annual subsidy | ~$452,338 |
The debt-service coverage ratio comes in at 0.73× on reported rent. (1.00× is the minimum any commercial lender would accept; conventional underwriting expects 1.20×–1.25×.) The Town's 2025 budget identifies $219,000 as a "moral obligation" subsidy line for VooDoo; about $54,431 of what the Enterprise Fund reports as VooDoo "revenue" is itself a transfer from public funds.
Both the 2025 Budget Book and the Colorado Sun's reporting describe VooDoo as fully occupied for FY2025 — this is not a vacancy problem. Even at full occupancy, VooDoo falls about $452,000 short of covering its own annual costs. The Town is currently bridging that gap through three temporary mechanisms — bond-construction interest income, fund-balance drawdown, and the $219,000 moral-obligation payment plus $54,431 in transfers — and the Debt Analysis projects the bond-interest cushion will be exhausted by the end of FY2026, after which the shortfall needs direct Town appropriation. FY2026's own budgeted operating expenses already rise to $183,132, which the Town's October 2025 budget packet attributes to higher insurance costs.
The 2032 balloon — $23M, no reserve
All three NBH Bank series come due in December 2032 as a single combined payment of $23,045,864. To save the balloon over the six years remaining would require putting aside roughly $3.84 million per year — about three times what the project currently collects in rent.
What the balloon actually bought: about $7M in extra interest
The interest-only, balloon structure was chosen to keep the annual payment low. But a low annual payment and a low total cost are not the same thing. Compare the structure the Town chose against simply amortizing the same principal — paying it down in level installments over the same ten years:
| Cost through Dec 2032 | If amortized | Balloon (actual) |
|---|---|---|
| Annual payment | ~$2.8M/yr | $1.19M/yr |
| Paid over 10 years | ~$28M | ~$12M |
| Lump sum due at maturity | $0 | $23.05M |
| Upfront public cash (same either way) | ~$6M | ~$6M |
| Total cost by 2032 | ~$34M | ~$41M |
Illustrative comparison. The “if amortized” column repays the same ~$20M principal in level payments over the 2022–2032 term at the bonds’ blended rate; the exact gap runs about $7–8M depending on the amortization assumptions. Upfront public cash (Affordable Housing Fund cash plus a $2M state DOLA grant) is identical under either structure and nets out of the comparison. This is the same choice the interactive cost tracker’s Fully Amortized vs. Unamortized with Balloon Payment toggle lets you test.
Where this fits in the bigger picture
VooDoo is the most exposed of five THA projects, but the structural pattern repeats across the portfolio:
- Total THA bonded debt: $72.4M across Shandoka, Virginia Placer, VooDoo, and CanyonLands (Sunnyside excluded from the analysis).
- Known balloon exposure: $26.2M+ (the $23M VooDoo balloon in 2032 plus $3.1M for Virginia Placer in 2036; CanyonLands and the Shandoka COPs have additional unscheduled exposure).
- Portfolio debt-service coverage ratio: 0.50× on a vacancy-adjusted basis.
- Vacancy: 49 of 201 units (April 2026).
- Cross-subsidy: the Shandoka surplus that historically covered other projects is gone — Shandoka itself now runs a $66K deficit at budget occupancy, $437K with vacancy folded in, because COP 2024 + COP 2025 roughly tripled its debt service.
- Annual gap across the portfolio: about $2.13M between cost and vacancy-adjusted rent.
Timeline
All three bond series mature simultaneously. Combined $23,045,864 balloon due. No sinking fund identified in the Town's published budget documents.
Independent Telluride Debt Analysis circulated. ~5 units vacant; companion reporting notes no lease renewals signed for the next year. Town's 2025 Budget identifies $219K as a "moral obligation" VooDoo subsidy line.
Rental revenue reported at $872,000 against $1,190,240 in debt service — DSCR 0.73× before vacancy.
Project completed. Approximately $4.7M in Affordable Housing Fund cash subsidies and ~$1M in waived tap fees were applied, putting all-in public cost per unit at ~$955K.
Series 2023 (5.86%) bond issued, bringing total authorized principal to $20.065M.
Series 2022A (4.69%) and Series 2022B (5.86%) revenue bonds issued through NBH Bank.
Where things stand now
The project is operating. The Town's 2026 Enterprise Fund budget continues to carry the VooDoo line items; rent collection continues; the bonds remain current on their interest-only coupons. The questions ahead are what the refinancing or repayment plan for the 2032 balloon looks like, whether a sinking fund will be established and at what level, and what THA does as the Shandoka cross-subsidy disappears.