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HomeMy WebLinkAboutCouncil Presentation 05/02/2017 - Tangerine Farms SA Refunding STIFEt 0 @role re 0 $141P46910000* Special Assessment Revenue Refunding Bonds, Series 2017 MARANA, VF . May 2, 2017, 7:00 P.M. *Estimated Pale No: Aerial Map & Historical Summary 3 Refunding Bonds Objectives 4 Current Debt Profile 6 Bond Market Update & Private Placement Alternative Summary 7 Preliminary Debt Service Savings 8 Preliminary Financing Calendar 9 Disclosure 12 Appendix: I. Ownership & Description of Development Progress II. Draft Request for Proposal III. Preliminary Refunding Numerical Analysis 2 TANGERINE, FARMS IMPROVEMENT' DISTRICT ° -nSII ,tJahrr rr - � ��.1� �r .�� Land Advisors 4 1 ® a 4 A � w r 1 14 e rrn�i ^ v m rs �•N _I , .J, ., ICY tt9a Y •ti r ry lllf�,d�@w $imUN'✓�i°I� .. �' I® � t•yam.,-. • .. ,,. i..,.,.4 au I 1.� jku µ s "M 0 � a 1 Cl a wr L 016 Al BIi •�.I a^ f u k' � a i I � M1� ^ � .4T^ iN WI • '. „• ,.. """"`Pig � -. �u n � i� a �� � �w., �••.nlr , iii �X w g • "'" � '^ �w—. ...,. '�� .,. e� . III • •e Marne Assns ent har.bcdm p;pId in(kill 71ie A5 F,�,;C.foulp .71 -1'fit!5 t!r,uzmi Frl-61lr�'Ii ^ tr!rnr, V l�r11 H u,w 1 E N Uft Fl MA H63 Spital 100 Bank Pad Cot d IRS -I,jIj''� I��II AWA > ^ ^ ^ � algrrtr� 13 1:1}1'[Y Z,DWe ^ u. er•rte m^e "� 13 1 K d i L v,M w 14 Ill tmr,'r%Ouole ricM Fm F 64-39-11T � � a. =�° ��. � �� i� La%r,„,ir w H.�,l-,�r-ar%1 Ai nr^�Uri 44 1 w t rd hdwhcfL*,#qpr4Umdm W dm pwt R t i ic:p'i1i 4p will 1161 a'k"AW, +^1 14 eV b I,i°oMillil 4 %N d•^I%. a a v�'"ii ”. �,°� ,, �i='°o A"-e.Ilr*.W,WP I1 F1 IN^Vp1K6Wd Iry p IF C»n Ouu"415,111 at f L. ,,.�• _ �.o��R mill e.1 F�t�.u, 3 1. Lower current 4.60% rate to approximately 2.67% achieving significant savings of approximately $900,000 — lowering special assessment payments allocated to (15) property owners 2. Structure with same par size and amortization as current bonds — savings up-front (1/1/18) based on general consensus among the major property owners 3. Debt service payments after benefit of up-front savings will approximate prior debt service 4. Submit an RFP to several financial institutions utilizing the Private Placement Alternative (not a public sale) 4 vigil Purpose of Formation: (2006) Significant Public Infrastructure Improvements to Tangerine Farms Road as a four-lane divided roadway, multi-use lanes and dedicated turn lanes, curbs and gutters, a 24-foot wide landscaped median, drainage facilities and sidewalks, street lighting, utility installations and relocations, a pedestrian underpass and traffic signal. Acreage: 1,500 Original Principal Amount Issued: $25.7 million (4.60%) Current Estimated Principal: $14.5 million Special Redemption Features: On any interest payment date — without penalty Source of Repayment: Property Owners — special assessment payments based on capital cost allocation to each property owner based on benefit. 11-Year successful history of payments Collateral: Special Assessment Lien on Real Property — subordinate only to general taxes Credit: Town General Fund — backup requirement in the event of default - Town would exercise foreclosure remedies for repayment 5 $25.1774 Tangerine Farms Roa d Improvement District Maturity Date (January 1) Principal (a) Coupon 2018 $1,334 4.600% 2019 1,395 4.600% 2020 1,459 4.600% 2021 1,526 4.600% 2022 1,597 4.600% 2023 1,671 4.600 2024 1,747 4.600% 2025 1,828 4.600% 2026 1,912 4.600% $14.1469 Call Features: Callable 7/1/17 @ par (a)Does not-include reduction for pre-payments during the current payment period. 6 6.50 Current=4.02% 6.00 Max=6.48% Min =2.98% 5.50 5.00 10-yr Avg. =4.74% 0 4.50 a� 4.00 3.50 3.00 2.50 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Source:The Bond Buyer.As of 4-27-17 7 ■ Over Past Three Years Banks and Financial Institutions Interested in Purchasing Arizona Municipal Bonds — Direct Placement ■ Prefer Shorter Amortization Periods Similar to Tangerine ■ Prefer Stronger Credits ■ Lower Costs of Issuance (Generally) ■ Possible Lower Interest Rates than Traditional Public Sale of Bonds (Subject to their Internal Cost of Funds Which Adjust Daily Based on Market Conditions) ■ Flexible Call/Payoff Features — Required for Tangerine Refunding ■ Town/District Legal Documents Utilized (Not Vendor Legal Documents) ■ Competitive Bid List Approximates 15 - Financial Institutions and Banks s IAMM3 • C • $2,390,000 2019-2029 Littleton ESD (Maricopa County) / General Obligation Refunding 2.17% Bonds (May 2, 2017) (12 years) $14,302,000 2018-2026 2.43% Town of Oro Valley / Excise Tax Refunding Bonds (April 6, 2017) $3,346,000 2016-2026 1.93% Town of Chino Valley / Excise Tax Refunding Bonds (May 19, 2016) (10 years) $12,181,000 2017-2021 Lake Havasu City, AZ / Excise Tax (November 3, 2016) 1.50% (4 years) $4,055,000 2017-2024 Santa Cruz Valley USD (Santa Cruz County) / Refunding Bonds, 1.74% (November 29, 2016) (7 years) $37,835,000 City of Yuma MPC / System Revenue Refunding Bonds (November 3, 2017-2024 1.50% 2016) (7 years) $6,493,000 2015-2025 2,55% Town of Marana / Excise Tax Refunding Bonds (June 3, 2014) (11 years) 9 i Tangerine Farms Improvement District (Town of Ma ra na, AZ) Improvement Refunding Bonds, Series 2017 Prior Refunding Date Debt Service Debt Service Savings 7/1/2017 $332,787 7/1/2018 11968,892 $985,141 (a) $983,751 7/1/2019 11967,125 1,966,390 (a) 735 7/1/2020 11965,483 11965,216 267 7/1/2021 11963,828 11963,507 321 7/1/2022 11962,999 11962,623 376 7/1/2023 11961,835 11961,525 310 7/1/2024 11959,221 11958,211 11010 7/1/2025 11957,996 11957,642 354 7/1/2026 11955,976 11955,766 211 17,996,142 16,676,021 987,334 Savings Summary Net PV Savings 972,031.47 Net PV Savings % 6.71% (a) Includes supplemental interest payments used for purposes of paying cost of issuance. 10 dip Action Date/Timing Town Council approves Resolution authorizing May 16tH the Private Placement Submit RFPs / Term Sheet May 17t" (or sooner) Bids Due May 30tH June 14t" Closing 11 * Subject to Change Stifel, Nicolaus & Company, Incorporated ("Stifel") has been engaged or appointed to serve as an underwriter or placement agent with respect to a particular issuance of municipal securities to which the attached material relates and Stifel is providing all information and advice contained in the attached material in its capacity as underwriter or placement agent for that particular issuance. 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Where indicated, this presentation may contain information derived from sources other than Stifel. While we believe such information to be accurate and complete, Stifel does not guarantee the accuracy of this information. This material is based on information currently available to Stifel or its sources and is subject to change without notice. Stifel does not provide accounting, tax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and /or counsel as you deem appropriate. 12 t � � � via • 9 •• • • , gash • h • % of Ownership- "Common" Physical Entitlement Owner Remaining Owner Name Acres Zoning Status Description The Aspen Group Planned retail center.Owner has GLADDEN 25 LLC Total 1.5% Scottsdale,AZ 14 Commercial Vacant Land a recorded Final Plat and an approved Development Plan. Gladden Phase 22-24,LLC 3.1% All of this property has been sold to Lennar and Richmond American.See additions belo Total Last remaining residential Gladden Phase I,LLCTotal 2.0% Crown West Land Group 17 Residential Vacant Land parcel within Gladden Farms I.Owner has a recorded Final Plat and approved plans. Planned Gladden Farms II MPC.Owner has a Gladden Phase 11,LLC Total 46.0% Crown West Land Group 486 Mixed Use Agricultural recorded Master Block Plat and Development Agreement,and approved Specific Plan and CFD. INT'L CENTER TUCSON LLC& Warehouse/ 0.7% Ventana Medical Systems 4 Commercial Fully improved and occupied commercial structure SECUNDUS TUCSON LLCTotal Distribution Building Half of the KB Home property consists of fully improved residential lots engaged in an active KB Home Tucson Inc.Total 4.3% KB Home 30 Residential Fully improved lots homebuilding/home sales program.The remaining and vacant land 50%has a Tentative Plat approval for 68 additional residential lots,with site improvements planned to begin in fall 2017. MERITAGE HOMES OF AZ Fully improved lots 2.3% Meritage Homes 18 Residential Active homebuilding/home sales program. Total Northwest Medical Center Northwest Hospital 58 Commercial Agricultural Fully entitled planned medical campus. Total 4.7% NP Investments LLCTotal 0.1% Same 1 Commercial Vacant Land Corner pad at signalized intersection within the planned"Fry's"shopping center. Owner has approved zoning entitlements Tangerine/1-10,LLCTotal 22.7% Cottonwood Properties 113 Commercial Agricultural forcommercial uses at majorfreeway interchange of I-10&Tangerine Road. TOWN OF MARANA Total 0.5% WALGREEN CO.Total 0.2% Walgreens 2 Commercial Vacant Land Corner pad at signalized intersection. Overall developer of the planned"Fry's Weingarten Realty Total 1.0% Same 10 Commercial Vacant Land Shopping Center"and owner of the smaller anchor spaces,in-line shop space,and retail pads. Owner has approved zoning entitlements WESTCOR MARANA LLC Total 10.9% Mace rich/Westcor 279 Commercial Agricultural for commercial uses near major freeway interchange of 1-10&Tangerine Road. Title Security Trust No. Fully improved lot Lennar 13*** Residential Jve homebuilding/home sales program. 01546S 1.6% Fully Fidelity Nat.Title Trust#60453 1.5% Richmond American Residential improved lots Active homebuilding/home sales program. Grand Total 100% 1,058.99 *** - Ownership acres is constantly being reduced due to active homebuilding/home sales program. NOTE - List appears to be missing the 11-acre commercial parcel 217-57-3710 owned by Smith's Food and Drug Centers,Inc.(Fry's). Land Owner # 1 - GLADDEN 25 LLC - This is a 14-acre vacant commercial parcel within the Gladden Farms Master-Planned Community, located at the southeast corner of the signalized intersection of Tangerine Road and Lon Adams Road. The ownership is generally referred to as The Aspen Group, based in Scottsdale, AZ, that purchased the land from the Gladden Farms master developer in 2008 and has held it since. The group has sold off the corner commercial pad to Walgreen's (Land Owner # 12) and has obtained approval from the Town for a 106,000 SF retail/office complex on the remainder, to be known as the Heritage Park Shoppes. Land Owner#2 - N/A - No longer owns any assessed land within the District. Land Owner#3 - Gladden Phase 1, LLC - This is the master developer's last remaining parcel within Gladden Farms I. It is a 17-acre vacant residential parcel located along Tangerine Farms Road that has been subdivided into 75 individual residential lots, which have not yet been improved. A contract with a major homebuilder to purchase these lots is being finalized and the start of development is anticipated in the 3rd Quarter 2017. Land Owner#4 - Gladden Phase 11, LLC - This is the 486-acre area planned for the Gladden Farms II portion of the master-planned community, immediately adjacent on the east edge of Gladden Farms I.The Gladden Farms II property has one full mile of frontage along Tangerine Road and has received approvals from the Town of a Specific Plan, a Master Block Plat, a Community Facilities District, and associated engineering studies. The land is entitled for 2,345 residential units and 210 acres of mixed-use/commercial land.The start of development is anticipated in the 1St Quarter 2018. Land Owner#5 - INTERNATIONAL CENTER TUCSON LLC&SECUNDUS TUCSON LLC - This is a 4-acre commercial parcel which has been fully developed with a 60,000 SF warehouse/distribution building which opened in 2016. The owner and building occupant is an entity of Ventana Medical Systems, which is a member of the international Roche Group of companies. Land Owner#6 - KB Home Tucson, Inc. - KB Home is a national public homebuilding company which has been actively building and selling homes within the Gladden Farms master-planned community since 2014. KB Home has acquired a total of 207 residential lots as of April 30, 2017 and has closed on the sale of 72 homes,with 23 others in production. Land Owner#7 - MERITAGE HOMES OFARIZONA - Meritage Homes is a national public homebuilding company which has been actively building and selling homes within the Gladden Farms master-planned community since October 2016. Meritage has acquired a total of 89 fully-improved residential lots as of April 30, 2017 and has closed on the sale of their initial 3 homes, with 29 others in production. Land Owner#8 - Northwest Medical Center - Northwest Medical Center operates two major full-service hospitals in the Tucson area and numerous other clinics and emergency rooms. They are owned by the national public health care provider Community Health Systems and acquired this 58-acre vacant parcel within the Gladden Farms master-planned community in 2008 for another major medical campus to serve the region. • 4P • • , - � • 1 Land Owner#9 - NP Investments LLC - This is a 1-acre vacant commercial pad at the northeast corner of the signalize intersection of Tangerine Road and Lon Adams Road, within the Gladden Farm master-planned community. The pad is intended to be used for a financial institution as part of a larger planned retail center.The ownership group is Phoenix-based investors/developers. Land Owner#10 - Tangerine/1-10, LLC - The ownership is generally known as Cottonwood Properties, based in Tucson, AZ, and has been an active developer and owner of a wide variety of major master-planned communities, retail centers, and commercial land. Cottonwood is well known in the Tucson area as the master developers of the Dove Mountain, La Paloma, and Rita Ranch planned communities. These 113 acres of vacant commercial land are situated along Tangerine Road immediately west of Interstate 10, and the first user within the planned Tangerine Commercial Center was the Ventana Medical Systems facility (Land Owner#5). Land Owner#11 - Town of Marana - N/A Land Owner#12 - WALGREEN CO. - Walgreen's acquired this vacant 2-acre commercial pad at the southeast corner of Tangerine Road and Lon Adams Road in 2008 for a planned free-standing drug store as a component of the Heritage Park Shoppes complex (Land Owner# 1). Land Owner#13 - Weingarten Realty - Weingarten is a Texas-based retail developer that owns over 200 retail centers across the country with a total of more than 44 million square feet of retail space. These 10 acres of vacant land are located at the northeast signalized corner of Tangerine Road and Lon Adams Road and comprise the planned Gladden Farms Marketplace, which is approved to include 210,000 SF of retail services. The "core parcel" of Gladden Farms Marketplace has been acquired by Kroger's, with the intention of owning and operating a Fry's Marketplace grocery store. Kroger's has paid their Tangerine Farms Road Improvement District assessment in full and is not a part of this list. Land Owner#14 - WESTCOR MARANA LLC - This 279-acre vacant parcel comprises the majority of the land at the northwest corner of the interchange of Interstate 10 with Tangerine Road, and is approved by the Town of Marana for a major mixed-use development to be known as The Shops at Tangerine and 1-10 Motorplex and to include 450,000 SF of retail and commercial space and 40 acres of automotive dealerships. Westcor Marana LLC is an entity of Macerich, one of the leading national retail developers, and is the owner and developer of the La Encantada shopping center in Tucson,AZ. Land Owner#15 - Title Security Trust and Fidelity National Title Trust - This 26-acre parcel was sold by the Gladden Farms master developer in 2016, with half of the residential lots being sold to Richmond American Homes and the other half to Lennar, both of whom are national public homebuilding companies which have been actively building and selling homes within the Gladden Farms master-planned community since 2005. Richmond American has acquired 58 additional fully-improved residential lots, and as of April 30, 2017 they have closed on the sale of 443 total homes within the community, with 3 others in production. Lennar has acquired 60 additional fully-improved residential lots, and has closed on the sale of 401 total homes with Gladden Farms, with 2 more in production. Both of these builders have just commenced homebuilding and sales efforts within this newest phase of the community.