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HomeMy WebLinkAboutCouncil Presentation - Mandarina CFDMandarina Community Facilities District (Marana, Arizona) August 20, 2024 Page 2 Summary Points Town Staff have received from the Mandarina Holdings, LLC (the “Developer”) a draft application for the formation of the Mandarina Community Facilities District (the “District”) The first formal Council action regarding potential formation is adoption of Resolution No. 2024-081 authorizing the execution of a District Development, Financing Participation and Intergovernmental Agreement (the “CFD Agreement”) Town Staff anticipates the Developer’s submission of the final application for formation of the District. The Council would, at a future council meeting, adopt a resolution declaring formation of the District and authorizing the taking of certain actions with respect to such formation The CFD Agreement: 1.Allows control by the Developer until the first $50,000,000 in bonds are issued or 25 years pass, whichever occurs first 2.It is anticipated the first $50,000,000 in bonds, if the CFD Board decides to issue them, will be used to acquire from the Developer public infrastructure constructed by it, in and for the benefit of the District, including certain infrastructure addressed in Exhibit B to the CFD Agreement, which must be provided by the Developer 3.The Developer has constructed a large portion of the possible eligible infrastructure to be financed by the District and, per the CFD Agreement, would only be able to request that the CFD Board issue General Obligation Bonds (i.e., bonds payable from a property tax levy) to acquire such infrastructure 4.Includes a target secondary tax rate of $3.80 per $100 of limited assessed valuation, which includes $0.30 per $100 for operation and maintenance expenses The actual rate for payment of debt service on the bonds could go higher, if for some reason the total assessed valuation within the District falls or some other unforeseen event makes it necessary to raise the tax rate to cover the bond debt service The Developer’s financial obligations include: a)A letter of credit in the amount of $350,000, due upon formation of the District b)An annual obligation to pay up to $50,000 in CFD operation and maintenance costs c)A deposit of $50,000 with the Town to cover initial costs of the CFD prior to the $0.30 per $100 operation and maintenance tax which is to be replenished when $25,000 of the $50,000 deposit is expended Page 3 Location Mandarina lies within the Town of Marana in Pima County, Arizona. The site is approximately 342 acres and is located east of Interstate 10 and north of Tangerine Road in the Central Growth Area of the Town of Marana General Plan Page 4 Homebuilders and Ownership Currently, 608 of the 1,004 lots have been sold (closed to three builders - Meritage, Lennar and KB Home) and are currently being held in a land trust In addition to the 608 lots that have closed, the remaining 396 lots are under contract. KB Home is under contract for 201 lots and Meritage is under contract for 195 lots (both to close in 2025) For the mixed-use land, Evergreen Devco, Inc. is under contract for approximately 50.4 acres of which 42 acres is anticipated to be located in the District. No other mixed-use is under contract. Mixed use will add another 1,000 units. Page 5 Infrastructure - Preliminary As of 7/26/2024, the Developer has invested over $45.6 million in the project (including soft costs) The table below shows which infrastructure projects have been completed to date: Page 6 Cost to Taxpayers - Preliminary Based on the estimated average home price of $370,000, it is estimated that the total annual District property tax billing will be $787 per residential lot depending on location within the Project, as show in the table below: Page 7 Disclosure Stifel, Nicolaus & Company, Incorporated (“Stifel”) is providing the information for discussion purposes and is declaring that it has done so within the regulatory framework of MSRB Rule G-23 as a financial advisor, as defined therein, and not an underwriter to the issuer for this proposed issuance of municipal securities. A “financial advisory relationship” shall be deemed to exist when a firm enters into an agreement to render financial advisory or consultant services to or on behalf of an issuer with respect to the issuance of municipal securities, including advice with respect to the structure, timing, terms and other similar matters. Accordingly, any services provided by Stifel as they relate to our role as financial advisor should not be construed as those of an underwriter or placement agent. These materials have been prepared by Stifel for the client or potential client to whom such materials are directly addressed and delivered for discussion purposes only. All terms and conditions are subject to further discussion and negotiation. Stifel does not express any view as to whether financing options presented in these materials are achievable or will be available at the time of any contemplated transaction. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Stifel to provide or arrange any financing for any transaction or to purchase any security in connection therewith and may not relied upon as an indication that such an offer will be provided in the future. 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 are 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.