In this quarter’s publication of the Launch Report you will find articles and information related to:
  • Markets at a Glance – Land Advisors Organization’s residential indexes for selected markets across the US.
  • Guest Corner – An article by Hal Guggolz and Josh Cameron of the Land Advisors Austin, Texas office providing insight into what is happening in Austin’s exploding residential land market.
  • RCLCO / Launch – Financing Matrix of the Top 50 Selling Master Planned Communities.
  • California Level 1 School Fee Increase
  • Proposed CFD Law Changes in Arizona
  • SB 330 – California’s Housing Crisis Act of 2019 with a detailed SB330 outline provided by John Condas of Allen Matkins.

I trust that you will enjoy this quarter’s publication!

Sincerely,

Carter Froelich
Managing Principal

Before we outline what is included in this quarter’s Launch Report™, we are happy  to announce that Launch Development Finance Advisors has merged with Land Advisors Organization (www.landadvisors.com).

The combination with Land Advisors, expands Launch’s geographic reach and provides the critical component of infrastructure financing to a national organization that can truly provide an “end-to-end solution” for investors, owners and consumers of land.

In this quarter’s Launch Report our Guest Corner author is Eric Higuchi, the Principal of Qtative. Eric has a provided a great article in relation to strategic planning as it relates to land disposition.

Also in this issue you will find special district financing review related to the Top 15 selling master planned communities as reported by RCLCO (www.rclco.com).

Other articles include, the importance of Reimbursement Agreements related to SID financings in Nevada in addition to a Developer’s Continuing Disclosure Obligations.

Naturally, we have included third quarter market information for all of the markets in which Launch and Land Advisors provide services.

Sincerely,
Carter Froelich, CPA
Managing Principal

Launch advisors have just completed a financial diagnostic into the RCLCO Real Estate Advisor’s Midyear 2019 Top Selling Master Plan Communities Report in order to estimate the amount of net bond proceeds being generated by special district bonds for the top 15 selling master planned communities.

On average, the top 15 communities are generating net proceeds ranging between $2,900 to $135,000 per unit with an average of $27,000. Total property taxes as a percentage of home price including special district taxes is approximately 1.64%. Click on the link below to see the full report.

Midyear 2019 Top Selling Master Plan Communities Report

Should you care to discuss our findings or how special district financing may benefit your project, contact Carter Froelich at carter@launch-dfa.com

In this issue of The Launch Report™ you’ll find a compelling article by Gregg Logan of RCLCO Real Estate Advisors (“RCLCO”) on how demographic trends are up-ending the housing market but simultaneously creating opportunities for developers who are in tune with this aspect of market dynamics.

Launch Development Finance Advisors provides our insights on how the Top 50 Master Planned Communities as identified in RCLCO’s mid-year 2019 survey are financing their infrastructure.

We also provide an overview of the Public Improvement District statute that was recently passed by the Utah legislature which we anticipate will be the “go to” financing vehicle for master planned developers and builders in Utah.

This issue also discusses the ramifications of recent changes to New Mexico’s Public Improvement District statute that impacts the governance of districts and the ability of developers to maintain control of the Districts through the critical financing period.

Lastly, we provide Land Advisors Organization’s snapshot of the second quarter’s housing statistics for selected markets.

Sincerely,

Carter Froelich, CPA

Managing Principal


In this quarter’s Launch Report we address the issue of reducing ever increasing infrastructure costs.

Greg Vogel, CEO of Land Advisors Organization, this issue’s guest writer, explores what he has dubbed as “the $250 (per front foot) problem”.

We have also included examples of how to offset $250 (front foot) of costs, as well as recent financing transactions and local market insights from the Land Advisor’s Organization.

Best,

Carter Froelich, CPA

Managing Principal

The Town of Marana (“Town”) adopted a new CFD policy (“Policy”) at its regular Council Meeting on June 4, 2019.

2019 Amended CFD Policy FINAL

The highlights of the Policy include:

A. Two Tiered CFD Structure

  1. Standard Infrastructure CFD – To be used for development projects that do not have large regional infrastructure items. In this instance the preferred financing source will be General Obligation Bonds.
  2. Extraordinary Public Infrastructure CFD – To be used for projects that have large regional infrastructure items.
  • a.  Extraordinary CFD’s will have the ability to use both General Obligation Bonds and Special Assessment Bonds.
  • b. Extraordinary Public Infrastructure includes: Traffic Interchanges, water reclamation facilities, water treatment campuses and similar regional infrastructure.

B. Increase in the General Obligation Bond Authorization period from 7 years to 15 years or 75% development of lots.

C. CFD Application Fee of $15,000 and $50,000 deposit.

D. Requirement for the maintenance of $100,000 in cash or letter of credit to fund operations and maintenance costs until such time as the $0.30 operations and maintenance tax exceeds $100,000 per year.

E. Requirement that Applicant fund $2 million of coverage for CFD Directors and Officers Insurance.

 

On May 21, 2019 the Buckeye City Council adopted a policy related to the use of Revitalization Districts (“RD”) to assist in the financing of ever increasing infrastructure costs. This is an important milestone for the City and proves that Buckeye is “open for business” and is willing to work collaboratively with the private sector.

City of Buckeye RD Policy

For more information on how RD financing may benefit your development project, contact Carter Froelich at 480-874-4355 or email at carter@launch-dfa.com.

Lucero Assessment District No. 1
Goodyear, AZ
$6,913,000
Bond Type: Special Assessment
Closing Date: April 26, 2019
Average Coupon: 4.46%
Maximum Term: 25 years
Overall Value-to-Lien Ratio: 4.86 to 1
Average Assessment Per Unit: $13,218

Purpose: To reimburse the developer for regional roadway, water and sewer improvement costs.

For more information or how Launch Development Finance Advisors can assist in the financing of infrastructure costs associated with your project, contact Carter Froelich, CPA at 480-874-4355 or email at carter@launch-dfa.com.

https://launch-dfa.com

 


 

We are happy to announce the inaugural issue of The Launch Report, Launch Development Finance Advisor’s Quarterly Newsletter.

 

In this issue you will find information on: fourth quarter 2018 market statistics; RCLCO’s and Launch’s analysis of how the Top 50  Selling Master Planned Communities are financing their infrastructure; the potential use of Revitalization Districts in Arizona; recent bond transactions in Nevada, as well development impact fee trends in Idaho.

 

We trust that you will enjoy the content included in this quarter’s Launch Report.

Kind regards,

Carter Froelich, CPA
Managing Principal

RCLCO Real Estate Advisors (“RCLCO”) and Launch Development Finance Advisors (“Launch”) have updated the financing mechanisms used by the RCLCO’s Top Selling Master Planned Communities for the year end 2018.  See how MPC are financing their infrastructure by clicking on the link below to see the updated list.

RCLCO/Launch Top 50 2018 Financing Report