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

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.

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

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

Rainbow Canyon – Phase I

Henderson, Nevada

$17,805,000

Average Yield: 5.18%

Maximum Term: 30 years

Value-to-Lien Ratio: 7.49 to 1

Average Assessment Per Unit: $12,745

Underwriter: Stifel Nicolaus

Purpose: To reimburse the developer for costs of regional roadway, water and sewer improvements related to the development of Phase I of Rainbow Canyon located on the North Shore of Lake Las Vegas.