Semi-Annual Report for CFD No ofthe Etiwanda School District

Transcription

1 ~ Merltage Homes" March 30, 2012 Mr. Brien Clarke Special District Financing Administration 437 West Grand Avenue Escondido, CA RE: Semi-Annual Report for CFD ofthe Etiwanda School District Mr. Clarke: Attached, please find the March 31, 2012, Continuing Disclosure Semi-Annual Report of Meritage Homes of California, Inc. in connection with Community Facilities District of the Etiwanda School District. Contained within this document is the current infonnation required to comply with the Developer Continuing Disclosure Certificate dated as of January 7, 2011 executed by and between Meritage Homes of California, Inc. and Special District Financing Administration, as Dissemination Agent. Thank you, and please feel free to call me with any questions. Peter Vanek Director offorward Planning Meritage Homes of California 1250 Corona Pointe Court, Suite 210 Corona, CA p f

2 Semi-Annual Report CFD of the Etiwanda School District (Henderson Creek) March 31, 2012 INTRODUCTION This Semi-Annual Report is hereby submitted under Section 4 of the Continuing Disclosure Agreement of the Developer (the Disclosure Agreement ) dated as of January 7, 2011, executed by the undersigned (the Property Owner ) in connection with Community Facilities District of the Etiwanda School District. Capitalized terms used in this Annual Report but not otherwise defined have the meanings given to them in the Disclosure Agreement. This Semi-Annual Report is organized in the following manner; the bold typeset section represents relevant sections of the Continuing Disclosure Agreement of the Official Statement which defines the scope of the reporting requirement. The regular typeset section represents disclosure information included in the Official Statement or in previously filed Continuing Disclosure Reports. Lastly, the italicized typeset section represents the current project disclosure information, as of December 31, 2011, which has changed since the publication of the Official Statement ( OS ). N/C represents that there has been no change in the information since the publication of the OS. SECTION 4. Content of Semi-Annual Report: (i) PROPERTY OWNERSHIP AND THE DEVELOPMENT The Developer According to the Official Statement ( OS ), the property within the District is being developed by Rancho 2004, LLC with the intent of selling 123 single-family homes to individual homeowners. Since the date of the OS, on October 19, 2010, Rancho 2004, LLC sold the remaining 81 single family detached lots and the 3 lettered lots to Meritage Homes of California, Inc., a California corporation ( Developer ) which is a part of the property commonly known as Ironwood Estates. Meritage Homes of California, Inc, a California corporation is based out of Irvine, CA. Meritage Homes is a wholly-owned subsidiary of Meritage Corporation, a Maryland Corporation ( Meritage Corp. ), which has its corporate offices in Plano, Texas and Scottsdale, Arizona. Meritage Corp. is a designer and builder of single-family homes with operations in Texas since 1987, in Arizona since 1985, in northern California since 1989, in southern California since January 2004 (with the acquisition of Citation Homes), in Nevada since 2002, in Colorado since 2004 and in Florida since Meritage Corp. operates under a number of brand names, including: Legacy Homes, Monterey Homes and Hammonds Homes in Texas; Monterey Homes, Meritage Homes and Hancock Communities in Arizona; Meritage Homes and Citation Homes in 1

3 California; Perma-Bilt Homes in Nevada; and Meritage Homes and Colonial Homes in Ft. Meyers and Naples in Florida. Meritage Corp. is listed on the New York Stock Exchange under the symbol MTH, and is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, under which it files financial reports, proxy statements and other information with the SEC. The internet site for Meritage Homes and Meritage Corp. is Recent Projects. Projects recently developed or under active development by Meritage Homes are detailed below: Community Location # of Units Sq. Ft. Sales Price Month and Year Sales Commenced Est. Month and Year of Close Out Montevina at Morgan Hill Temecula 65 2,524-3,302 $346,985-$496,489 2/2010 5/2011 Kona Road French Valley 88 2,217-3,258 $254,990-$288,990 3/2011 8/2013 Tierra Grande at Sagemore Menifee 38 2,219-2,721 $240,465-$266,401 5/2010 3/2012 Woodlands at Sycamore Creek Corona 67 2,524-3,302 $379,990-$464,990 1/2011 7/2013 Oak Estates Corona 10 2,524-3,302 $432,990-$474,990 3/2011 8/2012 The Developer and its affiliates have completed and closed on the sale of approximately 154 homes in Fiscal Year The Developer anticipates 170 homes will close in Development Plan According to the OS, the District allows for the development of 123 single family homes in a project marketed as Ironwood Estates ( Ironwood Estates ). The homes in Ironwood Estates will range in size from 3,775 to 5,788 square feet with projected base sales prices ranging from $910,000 to $1,140,000. A Table showing more information of the plans is set forth on Table 4 below. As of September 26, 2007, 16 homes had closed escrow to individual homeowners, 4 models and 5 production homes were complete (of which 1 had been sold but had not closed escrow to an individual homeowner) 11 homes were 90%-95% complete to allow for the construction and installation of homebuyer choices upon sale (of which 1 had been sold but not closed escrow to an individual homeowner) and 87 lots were in a near finished condition. -As of December 31, 2011, Meritage plans to build home sizes in the range of 3,227 to 4,049 square feet with projected base sales pricing from $505,000 to $562,500. As of December 31, 2011, of Meritage Homes 81 lots, 0 homes have closed escrow to individual homeowners. Meritage Homes does not intend to sell any of land within the District, other than to individual homeowners. 2

4 Plan of Units (ii) TABLE 4 Estimated Product Mix, Development Status and Base Pricing as of December 31, 2011 of Building Permits Issued Sq. Ft. Units Under Construction Units Completed or Substantially Completed Base Pricing , $505, , $539, , $550, , $562,500 SOURCE: The Developer Financing Plan As of December 31, 2011, the Developer has expended approximately $10,500,000 on the acquisition and estimates that approximately $3,900,000 will be required to complete the development. (iii) Governmentally-Imposed Preconditions -Have there been any major governmentally-imposed preconditions for commencement or continuation of development of the Property that would have a material adverse effect on the Developer s Development Plan and/or the Developer s Financing Plan? - (iv) Challenges -Have there been any major legislative, administrative, or judicial challenges to or materially affecting the Developer Improvements? - (v) Amendments -Have there been any significant amendments to the land use entitlements with respect to the Property? - (vi) Special Taxes Is the Developer current on all Special Tax payments in regards to the Development? -Yes (vii) Audited Financial Statements Audited Financial Statements (Form 10K) were provided for the period ending December 31,

5 (viii) Previous Reports N/A (ix) Legal Structure -Have there been any changes to the legal structure or organization of the Developer that could have a material adverse effect on the ability of the Developer to complete the proposed development or to pay the Special Taxes when due? - (x) Lawsuits -Has there been any filing and service of process on the Developer of a lawsuit against the Developer seeking damages, or a judgment in a lawsuit against the Developer, either of which, in the reasonable judgment of the Developer, could have a significant impact on the Developer s ability to pay its Special Taxes prior to delinquency or to sell or develop all or any portion of the Developer s Property? - SECTION 5 - Reporting of Significant Events 1. Any failure to pay real property taxes, special taxes or assessments levied within the Transferred Property? 2. Any damage to or destruction of any of the Developer Improvements or District Improvements which has a material adverse effect on the value of the Transferred Property owned by the Developer, any Affiliate or Land Bank? 3. Any material default by the Developer or any Affiliate on any loan which is part of the Financing Plan or any loan with respect to the construction or permanent financing of the Developer Improvements? 4. Any material default by the Developer or any Affiliates on any loan secured by the Transferred Property owned by the Developer or any Affiliate? 5. Any denial or termination of credit, any denial or termination of, or default under, any line of credit or loan or any other loss of a source of funds (whether or not such line of credit or loan is secured by Property) that could have a material adverse affect on the Developer s most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, or any Affiliate of the Developer owning any Property, to pay its Special Taxes prior to delinquency or the payment of Special Taxes on Transferred Property owned by a Land Bank? 4

6 6. Any occurrence of Bankruptcy with respect to the Developer, any Affiliate of the Developer or any Land Bank that is reasonably likely to have a material adverse affect on the Developer s most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, any Affiliate or any Land Bank to pay its Special Taxes prior to delinquency? 7. Any previously undisclosed legislative, administrative or judicial challenges to the development of the property owned by the Developer or any Affiliate of the Developer that would have a material adverse effect on the Developer s most recently disclosed Financial Plan or Development Plan or on the ability of the Developer, any Affiliate of the Developer or any Land Bank, as applicable, to pay Special Taxes prior to delinquency? 8. Any conveyance by the Developer of Transferred Property to an entity that is not an Affiliate of such Developer, the result of which conveyance is to cause the Developer to require such transferee to become bound by obligations substantially similar to the obligations of the Developer under this Disclosure Agreement? 9. Any previously undisclosed governmentally-imposed preconditions to commencement or continuation of development on the Transferred Property what would have material adverse effect on the Developer s most recently disclosed Financing Plan or Development Plan or on its ability of the Developer, or any Affiliate of the Developer or any Land Bank, as applicable, to pay Special Taxes prior to delinquency? 10. Any changes, if material, in the alignment, design or likelihood of completion of significant public improvements affecting the Developer s Property, including thoroughfares, sewers, water conveyance systems and similar facilities that would have a material adverse affect on the Developer s most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, any Affiliate of the Developer owning any Property or any Land Bank, to pay its Special Taxes prior to delinquency? 11. Any filing of any lawsuit against the Developer (with the service of process having been accomplished) which, in the reasonable judgment of the Developer, (i) will adversely affect the completion of the development of the Transferred Property owned by the Developer or (ii) would materially adversely affect the ability of the Developer to pay Special Taxes prior to delinquency? 5

7 Certification The undersigned Developer hereby certifies that this Annual Report constitutes the Annual Report required to be furnished by the Developer under the Disclosure Certificate. Dated: ~1-0_.5_u-r;:_/_2 MERITAGE HOMES OF CALIFORNIA, INC., a California corporation peter Vanek Director of Forward Planning Title: ~ ~ ~~_~