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Home My WebLink About4 Mello Roos Agenda Item # w u ► . To: Board of Directors From: Peter Holzmeister Date: June 17, 2003 Subject: Mello-Roos Community Facilities District Why this matter is before the Board — This matter involves a report from staff and our consultant on the first stage of the analysis of formation of a Community Facilities District. Formation of a CFD is a matter that only the Board can authorize. History — East West Partners, developers of Grays Crossing and Old Greenwood projects, asked the Board to consider formation of a Community Facilities District (Mello- Roos). After considerable discussion the Board employed Fieldman, Rolapp & Associates to conduct the first stage of a feasibility study. New Information — Attached is a powerpoint presentation prepared by Larry Rolapp. In it he concludes that the financing plan and proposed special tax structure associated with formation of a CFD for Grays Crossing and Old Greenwood projects are reasonable and consistent with industry standards. Larry will attend the meeting on Wednesday evening to walk through the power point presentation and answer questions. A key to making this work for the District is the benefit we would get from the plan. I have met on several occasions with representatives of East West partners and we have tentatively agreed upon a business arrangement that offers significant to the District. Attached is a spreadsheet of financial benefits that I will describe in detail at the meeting on Wednesday evening Recommendation — I recommend that the Board direct staff and consultants to proceed to commence pre-CFD formation activities Old Greenwood and Gray's Crossing Community Facilities District Summary: June 17, 2003 Project CFD —� Permit Proiects Cost OG Gray's Issuance 24" Pipeline Sanders to Fiber Crossing 2,100,000 2,100,000 20" Old Greenwood 875,000 875,000 Water Source (1) 1,565,000 375,000 1,200,000 Facilities Fee (2) Units Fee Electrical Fee -Old Greenwood 250 1,200 300,000 300,000 Electrical Fee- Gray's Crossing 600 1,200 720,000 720,000 Water Fee -Old Greenwood 350 3,100 775,000 775,000 Water Fee - Gray's Crossing (3) 600 3,100 1,860,000 1,860,000 8,195,000 1,250,000 4,020,000 2,935,000 (1)Gray's Crossing water development agreement will reflect that Gray's contribution to the "Northeast Area Project" and the 6170 Tank" are satisfied by Contributing to Water Source. (2) Electric and Water Development agreements will reflect that facilities fees are to be paid at time of Permit Issuance at the then current rates, except for Gray's electrical to be paid through CFD upon final mapping of each phase. (3)Gray's Crossing water development agreement will reflect a Developer Reimbursement against Facilities Fees paid on all 400 Single Family residential lots. The reimbursement will be at a flat rate of$1,750 per residential facility fee paid. t Truckee Donner Public Utility DIStric 5r; J . 1 l G n r ty Facilities District Study t( g r r E !tPartners - Proposed CFD presented by Fieldman , Rolapp & Associates June 18, 2003 y Background ■ Board Workshops ❑ Board has engaged in discussions on several occasions regarding its participation in CFDs ❑ Request made by East West Partners to consider CFDs ❑ John Murphy, District's Bond Counsel has addressed Board ❑ Staff directed to develop cost reimbursement agreement to study feasibility of CFDs June 18, 2003 Feldman, Rolapp & Associates Page 1 ipJ1 , r Background (continued) ■ Board Action ❑ Approved CFD Study Funding & Reimbursement Agreement ■ Staff Actions ❑ Received $20 ,000 to fund study of CFDs for East West Partners ❑ Directed Fieldman , Rolapp & Associates to meet with Staff and East West Partners June 18, 2003 Fieldman, Rolapp & Associates Page 2 .zr ��nlylL ) rt t 3 ., Development Projects ■ Old Greenwood ■ 99 Single Family Lots-Custom Home sites (plus 4 existing cabins and 1 lot for Single Family construction)-Town Staff currently reviewing Final Map-99 lots currently for sale-Closing beginning Sept 30th. ■ 74 Lots-Cabins-Fractional Units-( 19 included in Final Map)-first 10 to start construction July 15 ■ 100 Town homes-Fractional Units (up to 15 potentially for whole ownership)-can be constructed when Final Map approved—first 7 scheduled to start July 15 ■ 17,000 sf Swim-Tennis Fitness Center ( 5,000 sf outdoor pool and 6 tennis courts)-Currently under construction June 18, 2003 Fieldman, Rolapp & Associates Page 3 Development Projects ■ Old Greenwood (continued) ■ Old Greenwood House (2 phased building-1st phase includes cart barn , pro shop and locker room/bar/grill-2nd phase includes front desk, 1800 sf conference facility and property management space)-Construction of first phase to start August 15th ■ "Floating entitlements" 20 lodging rooms, restaurant and 2500 sf conference space) ■ 18 hole Golf Course-rough shaped-July 4, 2004 is scheduled completion date ■ Natural Resource Management Center (2 buildings (approx.35,000 sf)-construction to commence by August 15th ■ Welcome Center (500 sf)-construction completed June 18, 2003 Fieldman, Rolapp & Associates Page 4 NEEMMMMOMMEN Whn4%4 Y l rf Development Projects (Continued) ■ Grays Crossing-(does not include potential density bonuses of 150 units) ❑ 410 Single Family Units* ❑ 57 Cottage Lots* ❑ 48 Attached Condominiums or Town homes ❑ 21 Residential Studio Units-above Retail/Office/Commercial (21 Grays Crossing affordable) ■ *15 Grays Crossing affordable-will be deed restricted June 18, 2003 Heldman, Rolapp & Associates Page 5 Development Projects (Continued) ■ Grays Crossing-(continued) ❑ 120 Unit Hotel (Lodge) ❑ 92 Multi-Family Rental Complex (64 Grays Crossing affordable/28 Old Greenwood employee housing) ❑ 38,000 sf Retail/Office/Commercial ❑ 7,000 sf Community Use ❑ 1 ,800 sf Service Station ❑ 18 hole Golf Course (including clubhouse) ❑ 2 Church sites June 18, 2003 Fieldman, Rolapp & Associates Page 6 ■ i t. ��tl` r ,u Development Projects (continued) ■ Grays Crossing (Continued ) o Draft EIR completed/currently in circulation ❑ Construction expected to commence in Spring , 2004 (subject to EIR certification and land use approvals) June 18, 2003 Fieldman, Rolapp & Associates Page 7 Review Process ■ Meetings with Staff ❑ Reviewed facilities proposed by East West Partners to be included in CFDs ❑ Discussed strategy to include other PUD capital improvement facilities in the CFDs ❑ Participateed in discussions with Bond Counsel and Staff of eligible improvements which could be financed June 18, 2003 Fieldman, Rolapp & Associates Page 8 Review Process (Continued) ■ Meetings with East West Partners ❑ Understand development/entitlement status of Old Greenwood and Grays Crossing ❑ Determine status of construction and anticipated sales activities ❑ Assist in the facilitation of a joint meeting with Staff and East West Partners to articulate Staffs position on facilities to be included in CFDs June 18, 2003 Fieldman, Rolapp & Associates Page 9 I mom yy trMC.'LUa,o'., Rev iew of Proposal to form CFDs ■ Proposed Legal Structure ❑ Two CFDs, one for each development Projects ■ Proposed facilities to be included in CFDs ❑ Fund specific PUD regional and project related public infrastructure ❑ Fund other project related public infrastructure (JCFAs) ❑ Assist in the facilitation of a joint meeting with Staff and East West Partners to articulate Staffs position on facilities to be included in CFDs ❑ All PUD CFD facilities (except the wells) will be acquired from East West Partners June 18, 2003 Fieldman, Rolapp & Associates Page 10 W�s., u ■ ��71ti}Wy11 Review of Proposal to form CFDs ❑ Proposed Financing Plan ■ Old Greenwood-Approximately $11 million (+/-$8.5 million in net construction costs) ■ Grays Crossing-Approximately $19.5 million $ 15.5 million in net construction costs) ■ Capitalized interest until the first initial tax roll date ■ Maximum allowable Bond Reserve Fund ■ Funding for the first year administrative costs ■ Minimum 3x1 value to debt ratio ■ 30 year financing at assumed rate of 6.50% June 18, 2003 Fieldman, Rolapp & Associates Page 11 y' titi � r s : Review of Proposal to form CFDs ❑ Proposed Special Tax Structure ■ No special tax on non-residential units ■ No special tax on affordable residential units ■ Special tax on "for-sale" single family residential units at an annual special tax rate of $3,000 ■ Special tax prepayment option included in the proposed tax formula (rate and method of apportionment-"RMA") June 18, 2003 Fieldman, Rolapp & Associates Page 12 , n Review of f Proposal to form CFDs o Proposed Special Tax Structure (continued) ■ Special tax on property in an undeveloped state (Maximum annual special tax of $9-12,000 per acre) ■ Special taxes increasing not greater than 2% ■ 110% revenue coverage capacity in excess of expected debt service requirements June 18, 2003 Fieldman, Rolapp & Associates Page 13 �T Review i of Proposal to form CFDs p ■ Proposed Special Tax Structure (continued) ■ Estimated total tax burden (amount appearing on the property tax bill) less than 1 .5% of the initial estimated sales price of a residential unit ■ Included in annual special taxes is annual administrative funding of $30,000 per CFD, escalating 2% per year. June 18, 2003 Fieldman, Rolapp & Associates Page 14 Now, I Proponent- East West Partners due dili ence ) (initial g ■ Old Greenwood and Grays Crossing primarily owned (approximately 80%) by East West Resort Development V, LLP , LLLP ■ "EWRD V" is a subsidiary (approximately 90% owned ) of Crescent Real Estate Equities Company ("CEI") ■ CEI is a REIT publicly traded on the NYSE ($ 1 .677 billion market capitalization-6/17/03) ■ CEI provides the primary funding for the two development projects June 18, 2003 Fieldman, Rolapp & Associates Page 15 v l Proposed Schedule of CFDs ❑June 18 ■ Board directs Staff and consultants to proceed to commence pre-CFD formation activities FlAugust 6 ■ Resolution Intention for each CFD is presented to Board for it's consideration ■ Board adopts CFD Goals and Policies Heldman, Rolapp & Associates Page 16 June 18, 2003 5 Sb�x y Proposed Schedule of CFDs (Continued) ❑ September 17 ■ Board conducts public hearing , consider owner formation of one or both CFD , holds landowner election-2/3 vote. (If Grays Crossing has no received sufficient project approvals, Public Hearing and subsequent CFD proceeding and financing actions will be continued) Any JCFAs must already be approved by other agencies ■ Board considers Public Hearing and Ordinances of Special Tax June 18, 2003 Fieldman, Rolapp & Associates Page 17 .... b4�4`"?��S(�izlf f45 v v Proposed Sc h ed u l e of CFDs (Continued) ❑October 15 ■ Board considers legal and financing CFDs n preparation documents for one or b of bond sale ❑+/-November 4 ■ Bond sale [] November 5 of Bond sale ■ Board advised of the results ❑+/-November 18 received ■ Bond closing-Bond proceeds June 18, 2003 Fieldman, Rolapp & Associates Page 18 . . . w r Conc lusions Financing Plan is ■ Theproposed reasonable and consistent with industry standards ■ The Special Tax Structure is proposed reasonable and consistent with industry standards Fieldman, Rolapp & Associates Page 19 June 18, 2003 .,,,ti •.,,max,,,,,. , ,.�.,.,