1) In 2006 the City of Poway issued bonds described in detail below.
2) The money was spent on building schools, roads etc.
3) The master developer Black Mountain Ranch llc
is on the hook to pay the fees until they sell the land to merchant builders who build and sell the homes.
4) District 14 is equi-distant between 5 and 15 and two miles north of 56 known as
Black Mountain Ranch/Del Sur.
5) As of 8/31/08 95% of grading and 85% of backbone improvements were complete.
6) Of 1148 lots, 430 homes are completed and 407 have closed escrow.
7) Black Mountain Ranch llc claims the project will be entirly built out by the end of 2009.
MY INITIAL ANALYSIS
1) This is a nice part of town that will get built out sooner rather than later.
2) It’s more critical that the homes get built,
doesn’t matter if the houses go to foreclosure
’cause the Mello Roos deficiency must be made good because it is senior to trust deeds.
3) My biggest risk is serious delay of buildout.
Builders and probably homeowners are on the hook but they may BK.
Here’s some stuff:
POWAY UNIFIED SCHOOL DISTRICT
COMMUNITY FACILITIES DISTRICT NO. 14
(DEL SUR)
IMPROVEMENT AREA A
SPECIAL TAX
THESE BONDS ARE FROM A $51.495 MILLION ISSUE THAT CAME TO MARKET IN JUNE 2006.
THE POWAY UNIFIED SCHOOL DISTRICT PROVIDES EDUCATION TO APPROXIMATELY
32,670 STUDENTS IN A 99-SQUARE MILE AREA OF CENTRAL SAN DIEGO COUNTY. THE
DISTRICT OPERATES 23 ELEMENTARY SCHOOLS, SIX MIDDLE SCHOOLS, FIVE HIGH
SCHOOLS, AND AN ADULT SCHOOL. ITS SERVICE AREA INCLUDES THE CITY OF POWAY,
NORTHERN PORTIONS OF THE CITY OF SAN DIEGO, AND VARIOUS UNINCORPORATED
COMMUNITIES IN THE VICINITY OF POWAY: BLACK MOUNTAIN RANCH, CARMEL
MOUNTAIN RANCH, RANCHO BERNARDO, RANCHO PENASQUITOS, SABRE SPRINGS,
SANTA LUZ, SANTA FE VALLEY, TORREY HIGHLANDS 4S RANCH, AND DEL SUR.
COMMUNITY FACILITIES DISTRICT NO. 14 AND IMPROVEMENT AREA A ARE ONE AND THE
SAME PROPERTY. THE PROPERTY IS LOCATED IN NORTHERN SAN DIEGO COUNTY IN AN
AREA KNOWN AS BLACK MOUNTAIN RANCH AND IS PART OF A NEW COMMUNITY BEING
DEVELOPED AS DEL SUR. SPECIFICALLY, THE DISTRICT PROPERTY IS ABOUT
EQUIDISTANT BETWEEN I-5 AND I-15, AND A COUPLE OF MILES NORTH OF HWY 56, WHICH
CONNECTS THE TWO INTERSTATES.
THE DEL SUR COMMUNITY OVERALL IS PLANNED FOR 2,581 SINGLE FAMILY DETACHED
AND ATTACHED HOMES, AND 469 AFFORDABLE APARTMENTS AND HOMES.
IMPROVEMENT AREA A CONSISTS OF 143 TAXABLE ACRES PLANNED FOR THE
DEVELOPMENT OF 1,148 HOMES IN 13 NEIGHBORHOODS. TWO NEIGHBORHOODS WILL
HAVE 205 ATTACHED HOMES (80 DUPLEXES IN ONE DEVELOPMENT AND 125 CONDOS IN
THE OTHER) AND ELEVEN NEIGHBORHOODS WILL HAVE A TOTAL OF 943 HIGH-PRICED
SINGLE FAMILY DETACHED HOUSES. THE PROPERTY WILL NOT HAVE ANY AFFORDABLE
HOUSING, BUT WILL INCLUDE A 10-ACRE ELEMENTARY SCHOOL AND A 5-ACRE
COMMUNITY PARK. THE PROPERTY REPRESENTS A LITTLE LESS THAN HALF OF THE
PROJECT, AND WILL BE THE FIRST PORTION TO BE DEVELOPED.
AS OF JANUARY 2008, 399 HOMES HAD BEEN COMPLETED. 344 HOMES HAD BEEN SOLD
WITH ESCROWS CLOSED. THE DEL SUR MASTER DEVELOPER IS BLACK MOUNTAIN
RANCH, A CALIFORNIA LLC. BLACK MOUNTAIN RANCH ANTICIPATES SELLING IN EXCESS
OF 80% OF THE PROPERTY WITHIN THE DISTRICT TO MERCHANT BUILDERS BY THE END
OF THE SECOND QUARTER OF 2010. MERCHANT BUILDERS CURRENTLY ACTIVE IN THE
DISTRICT INCLUDE STANDARD PACIFIC, WILLIAM LYON HOMES, DAVIDSON
COMMUNITIES, SHEA HOMES AND LAING LUXURY.
THE PROCEEDS OF THIS ISSUE WERE USED TO FUND SCHOOL FACILITIES FOR POWAY USD
AND TO FUND PUBLIC IMPROVEMENTS FOR THE CITY OF POWAY AND CAL TRANS, WHICH
MAY INCLUDE ROAD AND TRANSPORTATION IMPROVEMENTS FOR BOTH PUBLIC
AGENCIES, ALONG WITH PARKS, LIBRARIES, FIRE STATIONS, AND WATER AND SEWER
IMPROVEMENTS FOR THE CITY.
THE BONDS ARE SECURED BY THE SPECIAL TAX LEVIED ON CFD 14 AND AREA A
SEPARATELY, WHICH ARE NOT CROSS-COLLATERALIZED. IN OTHER WORDS, THE CFD 14
SPECIAL TAX CANNOT BE RAISED TO MAKE UP FOR AN AREA A SPECIAL TAX
COLLECTION SHORTFALL, AND VICE VERSA. ADDITIONAL SECURITY WILL BE PROVIDED
THROUGH LETTERS OF CREDIT POSTED BY EACH BUILDER ATTIBUTABLE TO AREA A
PROPERTY ONLY, UNTIL INDIVIDUAL HOMEOWNERS OWN 60% OR MORE OF THE LOTS IN
EACH DEVELOPER’S PORTION OF AREA A.
THE MARKET VALUE OF THE PROPERTY WITHIN CFD 14/AREA A, AS OF APRIL 1, 2006, WAS
APPRAISED AT $330.5 MILLION. THE APPRAISED VALUE TO LIEN RATIO WAS
APPROXIMATELY 3.23 TO 1. WE DO NOT HAVE AN UPDATED VALUE TO LIEN RATIO THAT
TAKES INTO ACCOUNT THE COMPLETED AND SOLD HOMES.
SOURCE: UNDERWRITER’S NEW ISSUE CREDIT REPORT, DATED 6-1-06
SECONDARY MARKET UPDATE, DATED 4-1-08
THE SEMI-ANNUAL REPORT AS OF 8-31-08 DISCLOSED THAT THE PROPERTY OWNER,
BLACK MOUNTAIN RANCH, HAS SOLD LAND TO MERCHANT BUILDERS OR ENTERED
INTO CONTRACTS FOR THE SALE OF LAND TO MERCHANT BUILDERS FOR 746 OF THE
APPROXIMATELY 1,148 SINGLE FAMILY DETACHED AND ATTEACHED DWELLING
UNITS WITHIN THE DISTRICT. BLACK MOUNTAIN RANCH HAS ALSO COMPLETED
APPROXIMATELY 95% OF THE GRADING AND APPROXIMATELY 85% OF THE
BACKBONE PUBLIC IMPROVEMENTS.
OUT OF THE 1,148 TOTAL PLANNED HOMES IN THE DEVELOPMENT, THERE WERE 430
HOMES COMPLETED AND 407 OF THEM HAD SOLD AND CLOSED ECROW TO
INDIVIDUAL HOMEOWNERS. BUILDING PERMITS ISSUED AT AUGUST 31, 2008 TOTAL
689.
BLACK MOUNTAIN RANCH LLC ESTIMATES THAT ABSORPTION AND FULL BUILDOUT
OF NEW HOMES IN THE DISTRICT IS TO CONCLUDE IN 2009.
URBAN ANALYTIC RESEARCH PUTS THE ASSESSED VALUE FOR THE IMPROVEMENT
AREA AT $307.38 MILLION IN 2008/09, A 34.11% INCREASE FROM LAST FISCAL YEAR,
ACCORDING TO COUNTY RECORDS. SAN DIEGO TAX COLLECTOR RECORDS SHOW
949 PARCELS ARE DEVELOPED AND SECURE THE ASSESSED VALUE FOR 2008/09.
BASED ON BONDED DEBT OUTSTANDING, THE ASSESSED VALUE TO LIEN RATIO IS 5.96
