Development Activity and Disclosure Report
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DEVELOPMENT ACTIVITY AND DISCLOSURE REPORT For the Quarter Ending September 30, 2008 Frederick County, Maryland Special Obligation Bonds (Urbana Community Development Authority) $30,000,000 Series 1998 $26,513,000 Series 2004A $6,461,000 Series 2004B Prepared by MUNICAP, INC. February 19, 2009 DEVELOPMENT ACTIVITY AND DISCLOSURE REPORT For the Quarter Ending September 30, 2008 I. UPDATED INFORMATION 1 II. INTRODUCTION 3 III. DEVELOPMENT ACTIVITY 6 A. Status of Governmental Permits 6 B. Status of Construction 11 C. Status of Sales 19 D. Status of Financing 24 IV. TRUSTEE ACCOUNTS 27 V. DISTRICT OPERATIONS 29 A. Levy of Special Taxes 29 B. Delinquent Special Taxes 34 C. Collection Efforts 35 VI. DISTRICT FINANCIAL INFORMATION 36 A. Bonds Outstanding and Reserve Fund 36 B. Property By Ownership and Classification 36 C. Special Taxes Paid By Owner and Classification 36 VII. SIGNIFICANT EVENTS 38 A. Developer Significant Events 38 B. Listed Events 38 I. UPDATED INFORMATION Information updated for the quarter ending September 30, 2008 is as follows: • The developer reports that construction of Phase One and Phase Two of Maryland Route 355 is complete. According to the developer, the project is expected to be submitted to the State Highway Administration in 2009. • As of September 30, 2008, Monocacy reports that there have been 527 settlements between builders and homebuyers in Villages X, XI and part of XIV (formerly X) in Section M7, compared to 526 during the second quarter of 2008. • As of September 30, 2008, Monocacy reports that there have been 160 settlements between builders and homebuyers in Village XII, compared to 158 during the second quarter of 2008. • As of September 30, 2008, Monocacy reports that a total of 47 building permits have been issued for Village XIII. According to the developer, there have been 39 settlements between builders and homebuyers for this section, compared to 31 settlements during the second quarter of 2008. • As of September 30, 2008, Monocacy reports that a total of 55 building permits have been issued for Village XV, and Ryan Homes closed on 42 homes with homebuyers, compared to 33 homes during the second quarter of 2008. • As of September 30, 2008, Monocacy reports that a total of 80 building permits have been issued for Village XIV, and Ryan Homes closed on 69 condominium units with homebuyers, compared to 64 condominiums during the second quarter of 2008. • As of September 30, 2008, Monocacy reports that 37 building permits have been issued for Town Center II. According to the developer, there have been 29 settlements between builders and homebuyers, compared to 27 settlements during the second quarter of 2008. • Monocacy reports that NV Homes has been assigned 35 townhouse units in Town Center V and has closed on four lots as of September 30, 2008. • As of September 30, 2008, Urbana Highlands, LLC reports that 355 building permits have been issued, which includes 149 large single-family detached homes, 134 small single-family detached homes and 72 townhomes, compared to 354 building permits during the second quarter of 2008. • As of September 30, 2008, Urbana Highlands, LLC reports that a total of 349 lots have been settled with homebuilders, compared to 347 lots during the second quarter of 2008. • As of September 30, 2008, Monocacy has reported that 2,017 lots have been settled with homebuilders, compared to 1,974 lots during the second quarter of 2008. • As of September 30, 2008, Monocacy has reported that 2,010 building permits were issued by Frederick County, compared to 1,977 during the second quarter of 2008. • As of September 30, 2008, Monocacy has reported that contracts with homebuyers have been Page 1 executed for 2,022 units, compared to 1,993 units during the second quarter of 2008. • As of September 30, 2008, Monocacy has reported that 1,959 homes have been settled with homeowners, compared to 1,932 units during the second quarter of 2008. • Sales teams for Monocacy report an estimated 818 prospective buyers visited the model homes during the third quarter of 2008, which represents twelve percent increase in the traffic experienced during the same quarter of 2007. • According to Monocacy, the Branch Banking and Trust Company of Virginia (BB&T) acquisition and development loan and letter of credit balances, repayments, and amounts available to fund as of June 30, 2008 and September 30, 2008 are shown in the table below. June 30, 2008 September 30, 2008 Revolving loan funded $3,552,798 $4,352,798 Amount repaid $449,441 $801,771 Revolving loan balance $3,103,357 $3,551,027 Letters of credit issued $6,440,608 $6,467,851 Total borrowings & $9,543,965 $10,018,878 LOC Maximum balance $15,000,000 $15,000,000 Amount available to fund $5,456,035 $4,981,122 • As of September 30, 2008, CDA draw requests were $43,973,364, which is equal to 95.01 percent of the revised budget. • Special taxes were levied in the amount of $4,750,578 for fiscal year 2008-2009 and were to be collected on September 30 and December 31, 2008. As of February 10, 2009, the county has reported collecting special taxes in the amount of $4,658,389, representing 98 percent of special taxes for fiscal year 2008-2009. According to the county, delinquent special taxes are expected to be collected at tax sale in May 2009 except for properties, which are under bankruptcy protection. Page 2 II. INTRODUCTION The Frederick County, Maryland Special Obligation Bonds (Urbana Community Development Authority) Series 1998 bonds were issued pursuant to a Trust Indenture between the county and Manufacturers and Traders Trust Company (formerly Allfirst Trust Company, National Association), dated as of November 1, 1998, and a Limited Offering Memorandum for the bonds dated November 6, 1998. The Frederick County, Maryland Special Obligation Bonds (Urbana Community Development Authority) Series 2004A bonds and the Frederick County, Maryland Subordinate Special Obligation Bonds (Urbana Community Development Authority) Series 2004B bonds were issued pursuant to a Trust Indenture between the county and Manufacturers and Traders Trust Company, dated as of November 1, 1998, as amended by a First Supplemental Trust Indenture, dated as of June 5, 2002, a Second Supplemental Trust Indenture, dated as of April 1, 2004, a Third Supplemental Trust Indenture, dated as of April 1, 2004, and a Limited Offering Memorandum for the bonds dated April 5, 2004. The public improvements to be built with the proceeds of the Series 1998 Bonds include the following: (a) the design, construction, and alteration of interchange improvements to I-270, Maryland Route 80, and Maryland Route 355 located within and adjacent to the authority; (b) the design, construction, and alteration of interchange improvements to state highway intersections and collector roads within the authority; and (c) the design, construction, establishment, extension, and alteration of an adequate water and sewer system, including water and sewer lines from approximately three miles north of the authority to the boundary of and through the authority. The public improvements to be built with the proceeds of the Series 2004A and B Bonds include the following: (a) two regional water storage tanks, an interim wastewater pumping station and subsequent regional wastewater pumping station within the ORI/MXD zoned property, and trunk water and sewer mains located within the PUD and ORI/MXD portions of the CDA; (b) the relocation of Maryland State Route 355; and (c) the construction of local streets, water and sewer lines, storm drain lines and structures, and other improvements located within the public rights-of-way. The Urbana Community Development Authority consists of approximately 1,378 acres of land in Frederick County, Maryland and is located generally at the confluence of Interstate 270, Maryland Route 80, and Maryland Route 355. The property in the district is under development and is approved for up to 3,484 residential units, 221,000 square feet of retail space, 361,000 square feet of office space, and 2,000,000 square feet of office/research industrial and additional retail space. Development plans contemplate three discreet projects known as Villages of Urbana, Urbana Highlands, and Bennett Creek Center. Page 3 The developers of Villages of Urbana and Bennett Creek Center are Monocacy Land Company, LLC. On October 1, 2003, Urbana Communities, LLC, a Maryland Limited Liability Company and managing member of Monocacy, acquired all of the membership interests of Fairview Properties, Inc. and the Kiplinger Washington Editors, Inc. in Monocacy, LLC. As a result of this change in ownership, Monocacy acquired title of record to all of the real estate formerly owned by the Kiplinger Washington Editors within the boundaries of the CDA. Following the completion of this transaction, Urbana Communities, LLC became the sole and managing member of Monocacy. Concurrent with the transfer of interests in Monocacy, Urbana Corporate Center, LLC, a Maryland Limited Liability Company managed and controlled by the principals of Natelli Communities, acquired title to all of the real estate formerly owned by Fairview Properties, Inc. within the boundaries of the CDA. Urbana Corporate Center has contracted with Monocacy to provide management and development services for all of the lands within the CDA that it owns. Urbana Highlands is being developed by Urbana Highlands, LLC, which is the contract purchaser of the 167 acres of land owned within the special assessment district by Route 80 Limited Partnership, which – in turn – holds the land as an investment. Pleasants reports that as of July 14, 2005, Route 80 Limited Partnership was converted from a partnership to a Maryland Limited Liability Company named Urbana Highlands Development, LLC. All partnership interests have been assigned to Urbana Highlands Investments, Inc., sole member of Urbana Highlands Development, LLC.