COMMUNITY FACILITIES DISTRICT NO (VILLAGE OF ESENCIA) OF THE COUNTY OF ORANGE. DEVELOPER CONTINUING DISCLOSURE ANNUAL REPORT June 2016

Transcription

1 COMMUNITY FACILITIES DISTRICT NO (VILLAGE OF ESENCIA) OF THE COUNTY OF ORANGE DEVELOPER CONTINUING DISCLOSURE ANNUAL REPORT June 2016 RMV PA2 DEVELOPMENT, LLC

2 VILLAGE OF ESENCIA UPDATES TO PROPERTY OWNERSHIP AND THE DEVELOPMENT General Description of the Development As of May 22, 2016, all of the developable land has been purchased and closed escrow according to the individual option agreements with the respective builders. See attached as Exhibit A the current home sales summary as of 5/22/2016 for Esencia which reports a total of 332 homes are sold or reserved, and 152 have closed escrow. There are approximately 100 homes occupied in Esencia at this time. The Developer No changes. The Development General. Residential lots are being developed in phases by the merchant builders. Homebuilders have closed escrow on all of the land available for residential and apartment construction, and are in various stages of construction. See attached as Exhibit B for a schedule of building permits pulled by merchant builder. Infrastructure Requirements and Financing Plan. As of April 30, the Developer estimates that approximately $6 million remains to be spent on improvements installed by the Developer on the Project, including: a) $4 million for streets and utilities (appx. 95% complete); and b) $2 million for landscaping, hardscape and parks (appx. 95% complete). As development progresses, Developer will be continually transferring ownership of private facilities to the HOA and anticipates the transfer of public facilities to the public agencies to begin in June $8 million has been spent on La Pata in satisfaction of a portion of the Developer s roadway obligation fee. All remaining improvements are anticipated to be completed by late 2016 and are planned to be funded by the Developer with cash on hand of $260 million, and estimated Bond proceeds of $87 million. Entitlements for the Overall Rancho Mission Viejo Ranch Plan Planned Community. No changes. Environmental Impact Report and Litigation. No changes.

3 Other Settlement Agreements. No changes. Affordable Apartment Property. Esencia Norte Apartment Homes are planned to be developed as a joint venture between affiliates of the Developer and of Western National Group ( Affordable Apartment Developer ). In the fourth quarter of 2015, the Affordable Apartment Developer leased lot 52 within Tentative Tract from the Developer, consisting of gross acres, for the purpose of developing the site. As of June 1, 2016, a final site development permit for 112 apartment units was received from the County. The Affordable Apartment Developer has not yet obtained a construction loan for the project. Vertical construction is planned to commence in 2016 with the first units planned to be delivered by Q The project is estimated to achieve stabilized occupancy within one year. The estimated cost of construction of the project is approximately $25 to $30 million. Market Rate Apartment Property. Esencia Sur Apartment Homes is planned to be developed as a joint venture between affiliates of the Developer and of Western National Group (Apartment Developer) and Lewis Operating Company. In the fourth quarter of 2015, the Apartment Developer purchased Lots 53 and 54 within Tentative Tract from the Developer, consisting of 5.56 gross acres, for the purpose of developing the site. As of June 1, 2016, a final site development permit for 150 apartment units was received from the County. The Apartment Developer has not yet obtained a construction loan for the project but is currently in negotiations with potential lenders and anticipates funding in mid to late Vertical construction is planned to commence shortly after, with the first units planned to be delivered by Q The project is estimated to be stabilized approximately one year later. The estimated cost of construction of the project is approximately $30 to $40 million. Remaining Developer Properties. The Developer currently owns the remaining nonresidential projects (consisting of a 14 acre school site and a 1 acre day care site). Current plans anticipate the sale of the school site to Capistrano Unified School District in 2017 for the construction of a K-8 school. The Developer plans to sell the day care site in 2016.

4 RMV PA2 Development, LLC Balance Sheets (Unaudited) ASSETS December 31, 2015 December 31, 2014 Cash and Cash Equivalents Note 1 $ 242,019,307 $ 182,409,708 Land and Land Improvements Note 2 76,687,254 69,605,398 Total Assets $ 318,706,561 $ 252,015,106 LIABILITIES AND MEMBERS' EQUITY Accounts Payable & Accrued Liabilities Note 3 $ 4,151,778 $ 7,140,501 Option Payments Note 4 10,219,367 51,234,150 Builder Sales Deferred Income 35,527,305 21,269,669 49,898,450 79,644,320 Member's Equity RMV Community Development, LLC 210,066, ,786,103 Retained Earnings 58,741,818 16,584, ,808, ,370,786 Total Liabilities & Member's Equity $ 318,706,561 $ 252,015,106 Statements of Operations For The Current Month and Year to Date Period Ended December 31, 2015 (Unaudited) Current Month Year to Date Revenue Land Sales $ 57,701,866 $ 218,606,589 Profit Participation 93,410 93,410 Total Income 57,795, ,699,999 Cost of Sales Land Sales 40,368, ,498,849 Total Cost of Sales 40,368, ,498,849 Other Income: Marketing Reimbursement 126, ,515 Interest Income 97, ,272 Total Other Income 223, ,787 Other Expenses: Marketing Expense 164,744 2,457,317 Other G&A 100, ,700 Total Other Expenses 264,954 3,251,017 Net Other (41,140) (2,359,230) Prior Year Deferred Income Adjustment 0 315,215 Net Income/(Loss) $ 17,386,056 $ 42,157,135 Continuing Disclosure Annual Report Financial Statements - As of Dec 2015

5 RMV PA2 Development, LLC Notes to Financial Statements December 31, 2015 (Unaudited) Note 1 Cash and Cash Equivalents Union Bank Checking $3,060,580 Union Bank Money Market 11,655,302 County of Orange Trust-PA2 71,200 Temporary Investments* 227,232,225 Total $242,019,307 * Temporary Investments represent Commercial Paper with maturities ranging from 30 days to 45 days. Note 2 Land and Land Improvements Land and Land Improvements are carried at cost, which in management's opinion, is not in excess of that which will be realized from the orderly development and disposition of the Project. The costs of Land and Land Improvements sold are determined based on the relative sale value. Land and Land Improvements includes direct and indirect land costs, offsite and onsite improvement costs, as well as carrying charges during such time as a portion of the Project is under active development. Selling and marketing costs are generally expensed as incurred unless future benefit from such expenditures can be demonstrated. Land and Land Improvements at December 31, 2015 consist of: Land $248,614,663 Land improvements 226,948, ,562,873 Less amount allocated to cost of sales (398,875,619) $76,687,254 Note 3 Accounts Payable & Accrued Liabilities 12/31/15 12/31/14 Accounts Payable $4,151,778 $7,140,501 Property Taxes 0 0 $4,151,778 $7,140,501 Note 4 Options Payments Option payments represent deposits received for PA2.2 and PA2.3 builder land sales. Continuing Disclosure Financial Statements - As of Dec 2015

6 EXHIBIT A Rancho Mission Viejo (Esencia) Sales and Traffic Analysis Weekly Activity for the Week #36 Ending 5/22/2016, 8 Week-ROS Project Overview Traffic Weekly YTD Misc Project Sales Date Opened Sales Date Closed Total Units Rls. Sold Rsvd. To Date Avail. Bal. Closed This Week YTD Total Weekly Net Sold +Net Rsvd Weekly Reserv. Converted Sold Cancel Net Closed Sold Closed Sold + Rsvd. Overall ROS YTD Sales Rate 8 Week ROS Gavilan (Esencia) Lyon Vireo 9 /20/ ,518 3, Cal Atlantic Avocet 9 /20/ ,707 3, Shea Cortesa 9 /20/ ,949 4, Shea Alondra 9 /20/ ,654 3, Gavilan (Esencia) Totals ,828 15, Esencia Lyon Aurora 9 /20/ , Warmington Trellis 9 /20/ ,734 4, TRI Pointe Aria 9 /20/ ,678 3, Cal Atlantic Citron 9 /20/ ,354 2, Cal Atlantic Heirloom 9 /27/ , Shea Ventana 9 /20/ ,259 3, Meritage Cirrus 9 /20/ ,029 3, TRI Pointe Aubergine 9 /20/ ,063 3, Esencia Totals ,898 24, Esencia Grand Totals ,726 39, /2/2016

7 EXHIBIT B CFD No (Village of Esencia) Schedule of Building Permits Rancho Mission Viejo PA2.1 Entitled Dwelling Building Permits Issued by Units County of Orange PA2.1 Lyon Vireo AQ CalAtlantic Avocet AQ Shea Cortesa AQ Shea Alondra AQ Lyon Aurora MR Warmington Trellis MR TRI Pointe Aria MR CalAtlantic Citron MR CalAtlantic Heirloom MR Shea Ventana MR Meritage Cirrus MR TRI Pointe Aubergine MR TOTALS /2/2016