HomeMy WebLinkAbout17 Gray's Crossing MOU APN 043-010-007-000AGENDA ITEM # 17
MEETING DATE: January 5, 2022
TO: Board of Directors
FROM: Michael R. Salmon, Chief Financial Officer
SUBJECT: Consideration of Authorizing the Execution of a Memorandum of
Understanding Related to Gray's Crossing APN 043-010-007-000
APPROVED BY
RECOMMENDATION:
Brian C. Wright, General Manager
Authorize the General Manager to execute the Memorandum of Understanding (MOU)
regarding APN# 043-010-007-000 (attachment 1) as revised; accepting full payment for
all installment special tax amounts past due, in exchange for waiving current Penalty and
Interest amounts due.
BACKGROUND:
In 2004 and 2005, the Truckee Donner Public Utility District (TDPUD) Community
Facilities District (CFD) No. 04-1 (Gray's Crossing) issued special tax bonds (Bonds)
totaling $34.5 million. The Bonds were issued to construct and acquire various public
improvements needed with respect to the development within Gray's Crossing, to fund
the Reserve Account securing the Bonds, to fund capitalized interest on the Bonds and
to pay costs of issuance of the Bonds.
The CFD is a Mello -Roos CFD and the Bond's debt is repaid by a Mello -Roos special tax
assessment. The tax is applied only to parcel owners of the CFD and is an additional line
item on property tax bills each year, with installments due with property taxes (December
and April). The Bonds are limited obligations of CFD payable solely from the special tax.
TDPUD has no financial obligation regarding the CFD's debt. As the Bonds are currently
issued, the special tax runs through 2035, corresponding with the last debt payment.
The vast majority of 407 parcels in the CFD have been paying their respective annual
special tax amounts and are current. However, there are three undeveloped parcels that
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have significant installment delinquency amounts, and have incurred significant penalties
and interest charges due to the delinquencies.
Current Special Tax Installment
Owner Assessor Parcel Number (APN) Delinquent Amount
SI DDIQU I 019-770-002-000 $1,931,901
SIDDIQUI 043-010-005-000 $ 933,379
DK ALVISO 043-010-007-000 $1,585,166
The referenced parcels have Mello -Roos tax assessment delinquencies beginning in
2009 through current. In 2020, the parcels were purchased in tax sales, with proceeds
applied to current year's special tax delinquency amounts by Nevada County. The current
owners assumed all past due amounts. The parcels cannot be developed without
settlement of amounts due to the CFD.
DK ALVISO LLC, the owner of parcel APN# 043-010-007-000 has been working a real
estate developer, Paradigm8, to solve the delinquent tax problem and develop the
property. Further details on amounts owed for this parcel are as follows:
APN: 043-010-007-000. LDK (Across from PJ's Restaurant) Mello -Roos Assessment Costs
11.66 acres, corner of Prosser Dam Rd and Henness Rd
Current Owner: DK ALVISO LLC
Estimated Attorney & Legal Fees:
Prior Judgement $11,411
SYCR Restructuring $28,284
TDPUD Admin $26,396
Fees Estimate $66,090
^35% of Big3 delinquent parcels costs incurred
-35% of Big3 delinquent parcels costs incurred
Tax Year
Mello -Roos
Penalty
Interest
Total
Months
DQ Date
Int. Thru
2009/2010
$27,048
$2,705
$55,990
$85,743
138
6/30/2010
12/31/2021
2010/2011
$143,054
$14,305
$270,371
$427,730
126
6/30/2011
12/31/2021
2011/2012
$149,232
$14,923
$255,186
$419,341
114
6/30/2012
12/31/2021
2012/2013
$161,018
$16,102
$246,357
$423,477
102
6/30/2013
12/31/2021
2013/2014
$165,861
$16,586
$223,912
$406,358
90
6/30/2014
12/31/2021
2014/2015
$166,469
$16,647
$194,768
$377,883
78
6/30/2015
12/31/2021
2015/2016
$165,741
$16,574
$164,083
$346,398
66
6/30/2016
12/31/2021
2016/2017
$168,167
$16,817
$136,215
$321,199
54
6/30/2017
12/31/2021
2017/2018
$113,979
$11,398
$71,807
$197,183
42
6/30/2018
12/31/2021
2018/2019
$113,483
$11,348
$51,067
$175,898
30
6/30/2019
12/31/2021
2019/2020(a)
$91,994
$9,199
$24,838
$126,032
18
6/30/2020
12/31/2021
2020/2021
$119,122
$11,912
$10,721
$141,755
6
6/30/2021
12/31/2021
2021/2022 (b)
$121,048
LO
L
$121,048
NA
6/30/2022
12/31/2021
Total
$1,706,214
$158,517
$1,705,317 $3,570,048
Mello -Roos special tax Total of $1,706,214less
$121,048for 21/22 equals $1,585,166.
(a) In January 2020, NV County tax auction sale
proceeds of $37,261.16 applied to this parcel by
County.
County applied $31,106.14to Mello -Roos
and $6,155.02to
Penalty.
(b) 21/22 invoiced on NV County
property tax
bills, payable in
2 installments Dec'21 and Apr'22.
The Dec'21 installment
has not
been paid as
of 12/28/2021.
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Paradigm8 has presented the CFD (to District as administrator of CFD) a Memorandum
of Understanding (MOU). The MOU in essence request in exchange for payment of
Installment Amounts past due in full, the CFD waive all accrued Penalties and Interest to -
date.
The waiver of current penalty and interest amounts due is in the best interest of the
owners of the bonds in that it will result in the curing of a significant special tax
delinquency and facilitate development of the parcel thereby reducing the likelihood of
future special tax delinquencies.
The CFD's legal council, Stradling Yocca Carlson & Rauth, has reviewed the MOU
presented by Paradigm8 and made several markup edits. The MOU with markup edits
is presented as Attachment 1. Per council review of CFD formation documents, the
District has the authority to waive all or a portion of penalties and interest, but not the
principal special tax/installment amounts.
FISCAL IMPACT:
There is no financial impact for Truckee Donner Public Utility District.
For the CFD, receiving the Installment Amount of $1,706,214.38 would increase cash for
the CFD, replenishing the Reserve balance, and decreases accounts receivable.
For the CFD, billed but not collected Penalties of $155,370 and Interest of approximately
$1.6 million would not be collected. The probability of collecting said amounts with
current or a future owner are considered very low. The Penalties and Interest amounts
are recorded on a cash basis, so there would be no financial impact to the CFD's current
financial statements.
Going forward, with the receipt of $1,706,214.38 and write-off of all past to current
Penalties and Interest, the parcel is able to move forward with
development/improvements to parcel. With said development, the parcel's value
increases and the CFD retains full rights to foreclose on the parcel, if parcel again
becomes delinquent on special taxes.
ATTACHMENTS:
Attachment 1 — Memorandum of Understanding (MOU) markup draft
Attachment 2 - CFD 04-1 Gray's Crossing — 2020/2021 Annual Continuing Disclosure
Information Statement, December 8, 2021
Attachment 3 - CFD 04-1 Gray's Crossing — 2021/2022 Annual District Administration
Report, November 2021
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