Park Center Community Development Authority. Agenda for February 20, 2013 Meeting

Transcription

1 Park Center Community Development Authority 1. Approval of agenda. Agenda for February 20, 2013 Meeting 2. Approval of minutes for June 27, 2012 meeting. 3. Election of officers. 4. Discussion of Development Activity and Disclosure Report for the year ending September 30, Approval of Annual Assessment Report and Amendment of the Assessment Roll for the Collection of Assessments in Adjourn.

2 Minutes of June 27, 2012 Park Center Community Development Authority 1. Meeting called to order at 7:00 p.m. All board members were present. 2. The agenda for the meeting was amended to add a new item 6, reinvestment of bond proceeds. The amended agenda was approved by unanimous vote. Bob Gordon made the motion; Terry Caniford seconded the motion. 3. The minutes for the February 29, 2012 meeting were approved by unanimous vote. Bob Gordon made the motion; Terry Caniford seconded the motion. 4. Audrey Davis of Davis and Associates presented the audit for the fiscal years ending on June 30, 2010 and June 30, The audit was unanimously accepted. Bob Gordon made the motion; Bill Treuting seconded the motion. 5. The board felt that the fiscal health of the CDA had been properly addressed in an previously sent by Dean Crowhurst. Nonetheless, Joshua Forster of Municap spoke to the board about the current outstanding invoices for administrative expenses, including amounts owed to Municap and amounts owed to the City to reimburse it for payment of member compensation and CDA attorney fees. The discussion evolved into a discussion about how best to invest bond proceeds (agenda item #6), which total approximately $800,000 and are held in the reserve fund. Mr. Forster recommended investing in a product that would provide an interest rate of 1 to 1½ percent, which would likely be possible with a 1 to 3 year investment. He said that this rate should provide sufficient proceeds to pay off the outstanding invoices for administrative expenses, when added to the amount recently transferred to this fund, and to ensure sufficient funding for future administrative expenses. The board unanimously agreed to authorize Municap to solicit proposals and to enter into an agreement to invest the bond proceeds, and directed Municap to present the new investment details and provide an explanation of expected future annual expenses at the next board meeting. Bob Gordon made the motion; Terry Caniford seconded the motion. 6. Giff Hampshire spoke to the board about True North and its goals with Park Center. 7. The board unanimously approved A RESOLUTION ACCEPTING AND APPOINTING TNHYIF REIV HOTEL, LLC AS DEVELOPER FOR PURPOSES OF THE INDENTURE OF TRUST AND OTHER DOCUMENTS ENTERED INTO BY AND BETWEEN THE PARK CENTER COMMUNITY DEVELOPMENT AUTHORITY AND THE DEVELOPER FOR THE PARK CENTER PROJECT. Bob Gordon made the motion; Terry Caniford seconded the motion. 8. Meeting adjourned at 7:57 p.m.

3 DEVELOPMENT ACTIVITY AND DISCLOSURE REPORT For the Year Ending September 30, 2012 $12,350,000 Park Center Community Development Authority (Virginia) Special Assessment Revenue Bonds, Series 2007 CUSIP NUMBER AA4 Prepared by: MUNICAP, INC. February 1, 2013

4 DEVELOPMENT ACTIVITY AND DISCLOSURE REPORT I. UPDATED INFORMATION 1 II. INTRODUCTION 2 III. DEVELOPMENT ACTIVITY 3 A. Overview 3 B. Landowners and Developers 3 C. Status of Government Permits 3 D. Status of Public Improvements 3 E. Status of Development 4 F. Status of Financing 4 IV. TRUSTEE ACCOUNTS 6 V. DISTRICT OPERATIONS 7 A. Special Assessments Levied 7 B. Annual Revenue Requirement 7 C. Delinquent Special Assessments 8 D. Collection Efforts 9 VI. DISTIRICT FINANCIAL INFORMATION 10 A. Summary of Administrative Expenses 10 B. Taxpayers Responsible for Special Assessments 10 C. Tax Sale on District Property 10 D. Changes to the Identity of Administrator or Developer 10 E. Special Assessments Levied and Prepayments 11 F. Special Assessments Levied and Property Assessed Value 11 G. Special Assessments Collected 11 H. Special Assessment Delinquencies 12 I. Foreclosure Proceedings 12 J. Fund Balances 12 K. Principal Amount Outstanding 13 L. Principal and Interest Paid 13 M. Changes to Rate and Method of Apportionment of Special Assessments 13 N. Significant Amendments to Land Use and Legal Challenges 13 O. Material Changes to the Nature of the Facility 13 P. Summary of Payment In Lieu of Assessments 13 Q. Amendments to the Continuing Disclosure Agreement 14 VII. LISTED EVENTS 15 A. Developer Significant Events 15 B. Notice Events 16

5 I. UPDATED INFORMATION Information is updated for the period ending September 30, 2012, unless otherwise stated: The Current Owner, who acquired the property through foreclosure on the construction loan, is unable to provide an update on the status of development at this time. The Administrator is working with the Current Owner to obtain a development status update and will provide that under separate cover as a supplemental disclosure at a future date. According to TNHYIF REIV Hotel, Inc, a foreclosure on the property previously owned by the Former Developer was completed by TNHYIF REIV Hotel, Inc on March 23, As of September 30, 2012, the Current Owner reports that construction of roads and related improvements is 99 percent complete. According to the City of Manassas Park Assessor s office, the July 1, 2012 assessed value of the property within the District is $52,650,000. Annual assessments in the amount of $251,729 were billed for the 2012 tax year to be collected in two equal installments in June and December The trustee reports that annual assessments totaling $125,865, representing 100 percent of the first half annual assessments billed for the 2012 tax year, were received from the city on August 15, According to the City of Manassas Park Treasurer's office, annual assessments in the amount of $125,865 were collected, representing 100 percent of the second half annual assessments billed for the 2012 tax year. Page 1

6 II. INTRODUCTION The $12,350,000 Series 2007 Special Assessment Revenue Bonds (the Series 2007 Bonds ) were issued pursuant to Article 6 of Chapter 51 of Title 15.2 of the Code of Virginia of 1950, as amended (the Act and an Indenture of Trust, dated April 1, 2007 (the Indenture ), between the Park Center Community Development Authority (the District ) and Regions Bank, as trustee (the Trustee ). According to the Private Placement Memorandum, the District consists of approximately 32.3 acres of land within the City of Manassas Park, Virginia, on a site located adjacent to the intersection of Manassas Drive and Park Center Court and near the Virginia Railway Express station. The District is a mixed-use development that is expected to provide residential and commercial spaces. According to the Private Placement Memorandum, the Series 2007 Bonds were issued to finance the acquisition, construction and extension of certain roads and traffic improvements, signage and traffic signals, water management, storm and sewer system improvements, parks, and other amenities benefiting the District. The property within the District was owned by the City of Manassas Park and Park Center LLC (the Former Developer ). According to TNHYIF REIV Hotel, Inc, a foreclosure on the property previously owned by the Former Developer was completed by TNHYIF REIV Hotel, Inc ( the "Current Owner") on March 23, The information regarding development activity was provided by the Current Owner and is believed to be accurate; however, no effort has been made to independently verify the information. The information provided herein is not intended to supplement or otherwise relate to the information provided in the Private Placement Memorandum and any such intent is expressly disavowed. Rather, this report responds to the specific requirements of the Continuing Disclosure Agreement. No representation is made as to the materiality or completeness of the information provided herein or as to whether other relevant information exists with respect to the period covered by this report. Other matters or events may have occurred or become known during or since that period that may be material. All information is provided as of September 30, 2012, unless otherwise stated, and no representation is made that the information contained in this report is indicative of information that may pertain since the end of the period covered by this report or in the future. Page 2

7 III. DEVELOPMENT ACTIVITY The Current Owner, who acquired the property through foreclosure on the construction loan, is unable to provide an update on the status of development at this time. The Administrator is working with the Current Owner to obtain a development status update and will provide that under separate cover as a supplemental disclosure at a future date. A. OVERVIEW According to the Private Placement Memorandum, the District consists of approximately 32.3 acres of land within the City of Manassas Park, Virginia. Upon completion, the development is expected to consist of approximately 291 apartment units of various types and approximately 45,000 square feet of commercial/ retail space. The Series 2007 Bonds were issued to finance the costs of the public improvements related to the construction and extension of certain roads, traffic improvements including signage and traffic signals, water management, storm management, sewer system, parks, and certain other amenities benefiting the District. B. LANDOWNERS AND DEVELOPERS According to the Private Placement Memorandum, Park Center, LLC (the "Former Developer") and the City of Manassas Park owned all of the property in the District. According to TNHYIF REIV Hotel, Inc, a foreclosure on the property previously owned by the Former Developer was completed by TNHYIF REIV Hotel, Inc on March 23, As a result, TNHYIF REIV Hotel, Inc is the Current Owner of the property in the District. C. STATUS OF GOVERNMENT PERMITS According to the Private Placement Memorandum, administrative reviews and approvals for code compliance with respect to planning and development consisting of site development permits, traffic signalization permits and building permits, were required from governmental bodies or agencies at the time construction was initiated. The Current Owner reports that all required permits have been obtained. Table III-1 below shows permits, approval status and permitting agency as reported by the Current Owner as of September 30, Permit/Approval Table III-1 Status of Permits and Approvals Approved Actual/Projected Date of Permit Approved by Site Development Permit Yes January 4, 2007 City of Manassas Park Traffic Signal Yes January 4, 2007 City of Manassas Park Building Permits Yes September 30, 2007 City of Manassas Park D. STATUS OF PUBLIC IMPROVEMENTS According to the Private Placement Memorandum, construction of the public improvements within the District commenced in April As of September 30, 2012, the Current Owner reports that construction of the roads and related improvements is 99 percent complete. The Current Owner also reports that construction of the sanitary sewer infrastructure and the storm water management system is complete. Page 3

8 As of September 30, 2011, the Former Developer reported that $7,172,071 had been expended for construction of the public improvements, representing 97 percent of the public improvements funded by the Series 2007 Bond proceeds. Due to the foreclosure on the property, updated information regarding the public improvement budget is not available. Table III-2 below shows the public improvements, the original budget, budget changes, the revised budget and the amount spent as reported by the Former Developer as of September 30, Table III-2 Status of Completion of Public Improvements Public Improvement Original Budget Budget Changes Revised Budget Spent to Date Percent Complete Milleson Park Land/closing costs/real estate taxes $1,421,933 $440 $1,422,373 $1,422, % Design/submission fees $0 $6,705 $6,705 $6, % Landscaping/hardscape Hard cost $50,000 ($6,705) $43,295 $36,769 85% Manassas Drive Design/submission fees $46,000 $40,297 $86,297 $86, % Dry utility relocation and new service $80,000 $1,204 $81,204 $81, % Bonds, fees, and permits $50,690 ($50,690) $0 $0 Hard costs $1,139,112 $106,322 $1,245,434 $1,133,948 91% Traffic Signal Design/submission fees $19,700 ($1,302) $18,398 $18, % Bonds, fees, and permits $5,000 ($5,000) $0 $0 Hard costs $213,484 ($56,649) $156,835 $152,831 97% SWM Pond Design $60,000 ($5,220) $54,780 $54, % Public Utilities, Travelways, and City Parking Land cost $0 $105,913 $105,913 $0 0% Design/submission fees $173,206 $1,803 $175,009 $175, % Bonds, fees, and permits $50,000 ($50,000) $0 $0 Hard costs $3,610,849 $162,163 $3,773,012 $3,773, % Contingency $250,000 ($249,279) $721 $ % Developer Fee and Overhead $230,024 $0 $230,024 $230, % Total $7,400,000 $0 $7,400,000 $7,172,071 97% E. STATUS OF DEVELOPMENT As of September 30, 2012, the Current Owner reports that the vertical development, which consists of approximately 291 apartment units and approximately 45,000 square feet of retail space, is substantially complete. Due to the foreclosure on the property, information regarding the percentage occupancy for the apartment units and retail space is not available. F. STATUS OF FINANCING According to the Private Placement Memorandum, the total bond financed improvements were equal to $7,400,000. In addition to bond financing, the Former Developer had obtained a construction loan Page 4

9 from Bank of America (formerly LaSalle Bank, N.A) in the amount of $56,000,000, payable monthly at an interest rate of LIBOR plus 2 percent. The initial maturity date of the construction loan was May 2010 with an option to extend the term on the loan for twelve additional months. As of September 30, 2011, the Former Developer reported that the maturity date on the $56,000,000 construction loan was extended from May 1, 2010 to May 1, On May 24, 2011, the Former Developer received a notice of default from Bank of America (formerly LaSalle Bank, N.A) on the $56,000,000 construction loan secured by the property within the CDA. As of September 30, 2011, the Former Developer reported that the outstanding balance on this loan was $51,922,477. The Administrator was advised at the annual CDA Board meeting on February 29, 2012 that TNHYIF REIVE Hotel, LLC, the Current Owner, purchased the construction loan previously held by Bank of America. On March 23, 2012, TNHYIF REIVE Hotel, LLC foreclosed on the Former Developer. As a result of the foreclosure, information regarding the status of financing is not available. Page 5

10 IV. TRUSTEE ACCOUNTS The trustee for the Series 2007 Bonds is Regions Bank. The account balances as of September 30, 2011, interest paid, additional proceeds, disbursements and account balances as of September 30, 2012, are shown by the following table: Table IV - 1 Fund Balances Fund/Account Balance 09/30/11 Interest Paid Additional Proceeds Disbursements Balance 09/30/12 Project Fund $34,615 $3 $0 $34,619 $0 Administrative Expense Fund $54 $1 $66,682 $42,515 $24,223 Debt Service Reserve Fund $879,337 $88 $0 $0 $879,425 Manassas Drive Account $394,070 $39 $0 $227,929 $166,180 Revenue Fund $125,654 $5 $251,518 $262,136 $115,041 Bond Fund-Interest Account $8 $0 $230,072 $230,081 $0 Total $1,433,738 $136 $548,272 $797,279 $1,184,869 Additional proceeds to the Revenue Fund represent transfers of annual assessments collected and transferred by the city for the payment of debt service. Additional proceeds to the Bond Fund Interest Account represent transfers of funds from the Revenue Fund for the payment of debt service. Additional proceeds to the Administrative Expense Fund were transfers from the Project Fund and Revenue Fund for the payment of administrative expenses. Disbursements from the Project Fund represent transfers of funds to the Administrative Expense Fund to close the Project Fund. Disbursements from the Manassas Drive Account represent payments of costs related to the construction of Manassas Drive. The interest paid through September 30, 2012 does not include interest accrued but not yet paid. Bond proceeds are invested in money market funds currently earning approximately 0.01 percent per annum. Pursuant to Section 7.5(b) of the Trust Indenture dated as of April 1, 2007, if the amount on deposit in the Debt Service Reserve Fund exceeds the Debt Service Reserve Requirement, the trustee shall transfer such excess to the Interest Account of the Bond Fund. Table IV-2 Rates of Return Account Rate of Return Debt Service Reserve Fund 0.01% Manassas Drive Account 0.01% Page 6

11 V. DISTRICT OPERATIONS The information provided in this section is taken from the annual special assessment report for the Park Center Community Development Authority dated February 16, The information herein reflects information available as of the same date and may not contain the most updated information regarding special assessment collections, delinquencies or other updates to the expected debt service on the Series 2007 Bonds as of the date of this annual continuing disclosure report. A. SPECIAL ASSESSMENTS LEVIED Special assessments in the amount of $251,729 are to be collected in the Park Center Community Development Authority (CDA) for the 2012 tax year. An explanation follows of the projected expenses of the CDA and the source of funds available to pay the expenses. B. ANNUAL REVENUE REQUIREMENT An Annual Installment of Special Assessments is to be levied and collected from each parcel of assessed property within the CDA (except those parcels for which the Principal Portion of the Special Assessment has been prepaid) each year in an amount equal to the Annual Revenue Requirement. According to the Rate and Method of Apportionment (RMA) of Special Assessments for the Park Center Community Development Authority, the Annual Revenue Requirement, for any tax year, is equal to the sum of: (i) debt service on the Bonds to be paid from the Annual Installments; (ii) periodic costs associated with such Bonds, including but not limited to, rebate payments and credit enhancement on the Bonds; (iii) administrative expenses; less (iv) any credits applied under the bond indenture, such as investment income earnings on any account balances; and (v) any other funds available to the CDA that may be applied to the Annual Revenue Requirement. As shown in Table V-1 below, available funds and investment income are not sufficient to cover debt service and administrative expenses. As a result, the Annual Revenue Requirement for the 2012 tax year is $251,729. Debt Service Table V-1 Annual Revenue Requirement Tax Year 2012 Debt Service: Interest Payment, October 15, 2012 $115,040 Interest Payment, April 15, 2013 $115,040 Principal Payment, April 15, 2013 $0 Total Debt Service $230,081 Administrative Expenses $21,649 Sub-Total Expenses $251,729 Reserve Fund Investment Income $0 Annual Revenue Requirement for 2012 $251,729 Debt service includes interest on the Series 2007 Bonds payable on October 15, 2012 and April 15, Each semi-annual interest payment on the Series 2007 Bonds is equal $115,040, equal to a coupon rate Page 7

12 of percent on an outstanding principal balance of $12,350,000. There is no principal payment due on Series 2007 Bonds on April 15, As a result, total debt service on the Series 2007 Bonds for 2012 tax year is $230,081. Administrative Expenses Administrative expenses include the trustee, the city's collection cost, the administrator, and other administrative expenses for services related to the district. The estimated expenses for CDA operations in the 2012 tax year are shown in Table V-2 below. Table V-2 Estimated Expenses for CDA Operations Tax Year 2012 Trustee $5,000 City collection cost $2,500 Administrator including Arbitrage calculation $8,640 Miscellaneous (CDA meetings, CDA counsel, tax returns, audit, insurance, and other unanticipated administrative expenses) $5,508 Total Administrative Expenses 2012 $21,649 It should be noted that administrative expenses from the 2010 and 2011 tax years remain unpaid due to lack of funds. The Administrative Expense Fund budget cannot be increased due to the restriction imposed by the maximum Annual Assessments in the 2012 tax year. Reserve Fund Investment Income As of December 31, 2011, the balance in the Reserve Fund was $879,359, which is equal to the reserve requirement and an investment income of $59. The reserve requirement is invested in money market funds currently earning approximately 0.01 percent per annum. Due to the adverse investment market conditions, the report assumes that no investment income will be available in the 2012 tax year for the payment of debt service. As a result, the Debt Service Reserve Fund investment income for the 2012 tax year is zero. Summary The total expenses of the District for the 2012 tax year are $251,729. The estimated funds available to pay these expenses are zero, resulting in an annual revenue requirement of $251,729. Accordingly, annual assessments in the amount of $251,729 are to be collected in C. DELINQUENT SPECIAL ASSESSMENTS There are no delinquent annual assessments for tax years 2007 through Annual assessments in the amount of $251,729 were billed for the 2012 tax year to be collected in two equal installments in June and December The trustee reports that annual assessments totaling $125,865, representing 100 percent of the first half annual assessments billed for the 2012 tax year, were received from the city on August 15, According to the City of Manassas Park Treasurer's office, annual assessments in the amount of $125,865 were collected on November 14, 2012, representing 100 percent of the second half annual assessments billed for the 2012 tax year. Page 8

13 D. COLLECTION EFFORTS There are no collection efforts underway at this time. Page 9

14 VI. DISTRICT FINANCIAL INFORMATION The information provided in this section is intended to meet the requirements for the annual report as provided for in Section 2(a) of the Continuing Disclosure Agreement. The items listed below are in the same order as the items required for the annual report as listed in the Continuing Disclosure Agreement. All information in this section is provided as of September 30, 2012, unless otherwise stated. A. SUMMARY OF ADMINISTRATIVE EXPENSES The estimated expenses for CDA operations in the 2012 tax year are shown in Table V1-1. Table VI-1 Estimated Expenses for CDA Operations Tax Year 2012 Trustee $5,000 City collection cost $2,500 Administrator including Arbitrage calculation $8,640 Miscellaneous (CDA meetings, CDA counsel, tax returns, audit, insurance, and other unanticipated administrative expenses) $5,508 Total Administrative Expenses 2012 $21,649 B. TAXPAYERS RESPONSIBLE FOR MORE THAN FIVE PERCENT OF SPECIAL ASSESSMENTS The list of taxpayers responsible for more than five percent of the annual assessments levied for the 2012 tax year is provided by the following table. Tax Map No. Table VI-2 Major Taxpayers Tax Year 2012 Owner Special Assessment Percent TNHYIF REIV Hotel Inc. $131,490 52% TNHYIF REIV Hotel Inc. $120,239 48% Total $251, % C. TAX SALE ON DISTRICT PROPERTY According to the Current Owner, none of the property in the District has been sold at tax sale. D. CHANGES TO THE IDENTITY OF THE ADMINISTRATOR OR DEVELOPER As of September 30, 2012, the Administrator is not aware of any changes to the identity of the Current Owner and there have been no changes in the identity of the Administrator. Page 10

15 E. SPECIAL ASSESSMENTS LEVIED AND SPECIAL ASSESSMENT PREPAYMENTS The total of the special assessment liens on all property as of the first and last day of the tax year (July 1, 2011 June 30, 2012) and the assessment liens prepaid during the tax year are shown by the table below. Table VI-3 Total Assessment Liens Amount Special assessment lien as of July 1, 2011 $12,350,000 Special assessments prepaid during tax year $0 Special assessments lien as of June 30, 2012 $12,350,000 F. SPECIAL ASSESSMENTS LEVIED AND PROPERTY ASSESSED VALUE Annual assessments in the amount of $251,729 were billed for collection in the 2012 tax year. According to the City of Manassas Park Assessor s office, the July 1, 2012 assessed value of the property within the District is $52,650,000. Table VI-4 below provides a summary of annual assessments billed for the 2012 tax year and the assessed value of the property. Table VI-4 Special Assessments and Property Assessed Value Tax Map No. Assessed Value 07/01/12 Special Assessment $1,633,400 $ $0 $ $0 $ $19,359,300 $131, $17,098,900 $120, A-B 3,882, B $1,177,100 $ $2,658,000 $ $3,920,100 $ $2,921,100 $0 Total $52,650,000 $251,729 G. SPECIAL ASSESSMENTS COLLECTED Annual assessments are due on June 5 and December 5 of each year. Annual assessments billed and collected for the 2012 tax year are shown by the following table. Page 11

16 Table VI-5 Annual Assessments Due and Collected Amount Semi-annual Assessments Due (06/05/12) $125,865 Semi-annual Assessments Collected (06/05/12) $125,865 Percent due collected as of (08/15/12) 100% Semi-annual Assessments Due (12/05/12) $125,865 Semi-annual Assessments Collected (12/05/12) $125,865 Percent due collected (12/05/12) 100% H. SPECIAL ASSSESSMENT DELINQUENCIES The delinquent annual assessments are shown by the table below. There are no delinquent annual assessments. Table VI-6 Special Assessment Delinquencies Amount Delinquent Six months delinquent $0 One year delinquent $0 Two years delinquent $0 Total $0 I. FORECLOSURE PROCEEDINGS The annual assessments subject to foreclosure proceedings are shown by the following table. There have been no foreclosure proceedings within the District. Table-VI-7 Annual Assessments Subject to Foreclosure Proceedings Amount Subject to foreclosure but not yet instituted $0 Foreclosure instituted but not concluded $0 Judgment obtained but not yet collected $0 Reduced to Judgment and collected $0 Total $0 J. FUND BALANCES report. The balances of the funds and accounts are provided under Section IV, Trustee Accounts, of this Page 12

17 K. PRINCIPAL AMOUNT OUTSTANDING As of September 30, 2012, the outstanding Series 2007 Bonds were $12,350,000. L. AMOUNT OF PRINCIPAL AND INTEREST PAID ON THE BONDS The principal and interest paid on the Series 2007 Bonds in the bond year ending April 15, 2012 is shown by Table VI-8 below. Table VI-8 Principal and Interest on the Bonds Bond Year Ending April 15, 2012 Date Principal Interest October 15, 2011 $0 $115,040 April 15, 2012 $0 $115,040 The principal and interest due on the bonds in the bond year ending April 15, 2013 is shown by Table VI-9 below. Table VI-9 Principal and Interest on the Bonds Bond Year Ending April 15, 2013 Date Principal Interest October 15, 2012 $0 $115,040 April 15, 2013 $0 $115,040 M. CHANGES TO THE RATE AND METHOD OF APPORTIONMENT OF SPECIAL ASSESSMENTS As of September 30, 2012, there have been no changes to the Rate and Method of Apportionment of Special Assessments. N. SIGNIFICANT AMENDMENTS TO LAND USE OR LEGAL CHALLENGES TO THE CONTRUCTION OF THE DEVELOPMENT As of September 30, 2012, the Current Owner reports that there have been no significant amendments to land use entitlement or legal challenges to the construction of the development. O. MATERIAL CHANGES TO THE NATURE OF THE FACILITY As of September 30, 2012, the Administrator is not aware of any material change to the nature of the facility. P. SUMMARY OF PAYMENTS IN LIEU OF ASSESSMENTS RECEIVED DURING THE PREVIOUS FISCAL YEAR AND AMENDMENTS TO DOCUMENTS RELATED TO PAYMENTS IN LIEU OF ASSESSMENTS The Administrator is not aware of any changes to the amendments to the documents related to payments in lieu of assessments. Page 13

18 Q. AMENDEMENTS TO THE CONTINUING DISCLOSURE AGREEMENT AND A COMPARISION OF ANY CHANGE IN THE FINANCIAL STATEMENT OF THE AUTHORITY As of September 30, 2012, the Administrator is not aware of any amendments to the Continuing Disclosure Agreement and any change in the financial statement of the Authority. Page 14

19 VII. LISTED EVENTS A. DEVELOPER SIGNIFICANT EVENTS Whenever the Developer obtains actual knowledge of the occurrence of one of more of the following events, the Developer shall notify the administrator of such occurrences and the administrator shall immediately report such event in the manner as provided in Section 7 of the Continuing Disclosure Agreement. (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) failure to pay any real property taxes or special assessment levied within the District on a parcel owned by the Developer; material damage to or destruction of any development or improvements within the District; material default by the Developer on any affiliate on any loan with respect to the development or permanent financing of District development undertaken by the Developer; material default by the Developer of any affiliate on any loan secured by property with the District owned by the Developer or any affiliate; payment default by the Developer or any affiliate on any loan to the Developer or by any affiliate on any loan to such affiliate (whether or not such loan is secured by the property within the District); merger, consolidation, or acquisition of the obligated person, if material, (material is defined as the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the normal course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms); bankruptcy, insolvency, receivership or similar event of the obligated person to include, the filing of the Developer or any affiliate or any owner of more than 25% interest in the Developer or any affiliate in bankruptcy or any determination that the Developer or any affiliate or any other owner of more than 25% in the Developer or any affiliate is unable to pay its debts as they become due; the filing of any lawsuit with a claim for damage, in excess of $1,000,000 against the Developer or any affiliate which may adversely affect the completion of the District development or litigation which would materially adversely affect the financial conditions of the Developer or affiliate; and any change in the legal structure, chief executive officer or ownership of the Developer. According to TNHYIF REIV Hotel, Inc, a foreclosure on the property previously owned by the Former Developer was completed by TNHYIF REIV Hotel, Inc on March 23, report. The Administrator does not have knowledge of any other significant events as of the date of this Page 15

20 B. NOTICE EVENTS The administrator is required to file a notice to the State Depository (if any), each National Repository, or the Municipal Securities Rulemaking Board to report the occurrence of the following listed events of which the administrator has actual knowledge. The Administrator shall also immediately report such event to the trustee and to the Authority. (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) principal and interest payment delinquencies; non-payment related defaults; unscheduled draws on debt service reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax-exempt status of the Bonds; modifications to right to Holders; bond calls; defeasances; release, substitution, or sale of property securing repayment of the Bonds; rating changes; tender offers; appointment of a successor or additional trustee, or the change of name of a trustee, if material; and the failure of the Authority or on before the date required by the Disclosure Agreement to provide Annual Financial Information to the persons and in the manner required by the Disclosure Agreement. On May 24, 2011, the Former Developer received a notice of default from Bank of America (formerly LaSalle Bank, N.A) on the $56,000,000 construction loan secured by the property within the CDA. The original date of maturity of the loan was May 1, As of September 30, 2011, the Former Developer reported that the outstanding balance on this loan was $51,922,477. The Administrator was advised at the annual CDA Board meeting on February 29, 2012 that TNHYIF REIVE Hotel, LLC, the Current Owner, purchased the construction loan previously held by Bank of America. On March 23, 2012, TNHYIF REIVE Hotel, LLC foreclosed on the Former Developer. The Administrator does not have knowledge of any other listed events as of the date of this report. Page 16

21 PARK CENTER COMMUNITY DEVELOPMENT AUTHORITY SPECIAL ASSESSMENT BONDS SERIES 2007 ANNUAL ASSESSMENT REPORT AND AMENDMENT OF THE ASSESSMENT ROLL FOR THE COLLECTION OF ASSESSMENTS IN 2013 Prepared By: MUNICAP, INC. February 11, 2013

22 PARK CENTER COMMUNITY DEVELOPMENT AUTHORITY Introduction This report explains the methodology used to calculate the levy of the Annual Installment of Special Assessments in the Park Center Community Development Authority (CDA) for the 2013 tax year. Debt service and administrative expenses for 2013 tax year exceed the interest income earned on the Reserve Fund and the bond proceeds deposited to the Administrative Expense Fund. As a result, the Annual Installment of Special Assessments for the 2013 tax year is $252,082 and Special Assessments are required to be collected on the Assessed Property within the CDA for the 2013 tax year. An explanation follows of the projected expenses of the CDA and the source of funds available to pay the expenses. Trustee Accounts The trustee for the Series 2007 Bonds is Regions Bank. The account balances as of January 1, 2012, interest paid, additional proceeds, disbursements and account balances as of December 31, 2012, are shown by the following table: Beginning Balance as of 1/1/12 Table A Fund Balances Ending Balance as of 12/31/12 Additional Proceeds Disbursements Interest Paid Project Fund $34,616 $0 $34,619 $3 $0 Administrative Expense Fund $54 $66,682 $53,057 $1 $13,681 Debt Service Reserve Fund $879,359 $0 $0 $74 $879,434 Manassas Drive Account $394,080 $0 $227,929 $33 $166,184 Revenue Fund $10,623 $251,518 $262,144 $5 $2 Bond Fund-Interest Account $0 $230,080 $230,081 $0 $0 Total $1,318,733 $548,281 $807,829 $116 $1,059,300 Additional proceeds to the Administrative Expense fund represent transfers of proceeds from the Project Fund pursuant to the agreement between the Authority and the Developer and from the Revenue Fund resulting from the collection of Special Assessments to pay outstanding and current CDA expenses. Additional proceeds to the Revenue Fund represent transfers of Special Assessments by the city. Additional proceeds to the Bond Fund-Interest Account represent transfers of revenues from the Revenue Fund for the payment of debt service. Disbursement of proceeds from the Project Fund represents a transfer to the Administrative Expense Fund to pay outstanding CDA expenses. Disbursements from the Administrative Expense Fund were for the payment of administrative expenses. Disbursements from the Debt Service Reserve Fund represent transfers of investment income to the Bond Fund Interest Account for payment of debt service. Disbursements from the Manassas Drive Account represent payments for the costs of the public improvements. Page 1

23 Disbursements from the Revenue Fund represent transfer to the Bond Fund-Interest Account and Administrative Expense Fund for the payment of debt service and administrative expenses, respectively. Disbursements from the Bond Fund Interest Account represent payment of debt service. The interest paid through December 31, 2012 does not include interest accrued but not yet paid. All of the proceeds are invested in money market funds currently earning approximately 0.01 percent with the exception of the Debt Service Reserve Fund, which is currently invested in a Certificate of Deposit at a rate of 0.63 percent. Pursuant to Section 7.5(b) of the Trust Indenture dated as of April 1, 2007, if the amount on deposit in the Debt Service Reserve Fund exceeds the Debt Service Reserve Requirement, the trustee shall transfer such excess to the Interest Account of the Bond Fund. Annual Revenue Requirement An Annual Installment of Special Assessments is to be levied and collected from each parcel of assessed property within the CDA (except those parcels for which the Principal Portion of the Special Assessment has been prepaid) each year in an amount equal to the Annual Revenue Requirement. According to the Rate and Method of Apportionment (RMA) of Special Assessments for the Park Center Community Development Authority, the Annual Revenue Requirement, for any tax year, is equal to the sum of: (i) debt service on the Bonds to be paid from the Annual Installments; (ii) periodic costs associated with such Bonds, including but not limited to, rebate payments and credit enhancement on the Bonds; (iii) administrative expenses; less (iv) any credits applied under the bond indenture, such as interest earnings on any account balances; and (v) any other funds available to the CDA that may be applied to the Annual Revenue Requirement. As shown in Table A below, available funds and investment income are not sufficient to cover the debt service and administrative expenses. As a result, the Annual Revenue Requirement for the 2013 tax year is $252,082. Table C below provides a summary of the Annual Revenue Requirement for the 2013 tax year. Table C Annual Revenue Requirement Tax Year 2013 Table B Rates of Return Debt Service: Interest Payment, October 15, 2013 $115,040 Interest Payment, April 15, 2014 $115,040 Principal Payment, April 15, 2014 $0 Total Debt Service $230,081 Administrative Expenses $30,447 Sub-Total Expenses $260,528 Reserve Fund Investment Income ($5,673) Surplus from prior year ($2,772) Total available funds ($8,446) Annual Revenue Requirement for 2013 $252,082 Rate of Return Account Debt Service Reserve Fund 0.63% Project Fund 0.01% Administrative Expense Fund 0.01% Manassas Drive Account 0.01% Revenue Fund 0.01% Page 2

24 Debt Service Debt service includes interest on the Series 2007 Bonds payable on October 15, 2013 and April 15, Each semi-annual interest payment on the Series 2007 Bonds is equal $115,040, equal to a coupon rate of percent on an outstanding principal balance of $12,350,000. There is no principal payment due on Series 2007 Bonds on April 15, As a result, total debt service on the Series 2007 Bonds for 2013 tax year is $230,081. Administrative Expenses Administrative expenses include the trustee, city collection cost, the administrator, and other administrative expenses for services related to the district. The estimated expenses for CDA operations in the 2013 tax year are shown in Table D. Table D Estimated Expenses for CDA Operations Tax Year 2013 Trustee $5,000 City collection cost $2,500 Administrator including Arbitrage calculation $8,806 Miscellaneous (CDA meetings, CDA counsel, tax returns, audit, insurance, and other unanticipated administrative expenses) $14,141 Total Administrative Expenses 2013 $30,447 As of December 31, 2012, the balance in the Administrative Expense Fund was $13,681, which is expected to be used to pay outstanding administrative expenses. Reserve Fund Investment Income As of December 31, 2012, the balance in the Reserve Fund was $879,434, which is equal to the reserve requirement and an investment income of $134. On October 5, 2012, the CDA entered into a Deposit Agreement (the Agreement ) to reinvest the Reserve Fund proceeds. The proceeds are invested in BB&T Public Funds Certificate of Deposit ( Certificate of Deposit at an investment rate of 0.63 percent per annum and is set to mature on April 15, The rate of 0.63 percent yields an anticipated investment income of $5,540 in the 2013 tax year. As a result, the aggregate investment income in the amount of $5,673 ($134 + $5,540) is expected to be available to pay debt service in the 2013 tax year. Surplus from Prior Year As of December 31, 2012, the balance in the Revenue Fund was $2. As previously stated, on October 5, 2012, bond proceeds deposited in the Reserve Fund are invested in a Certificate of Deposit at an investment rate of 0.63 percent per annum. Accordingly, an estimated semi-annual investment income in the amount of $2,770 is expected to be available to pay debt service on April 15, Additionally, the City of Manassas Park Treasurer s Office is expected to transfer the second-half Annual Installment for the 2012 tax year in the amount of $125,865 in March A semi-annual interest payment is due on April 15, 2012 in the amount of $115,040 is due on April 15, 2013, equal to a coupon rate of percent on an outstanding principal balance of $12,350,000. Table E shows the anticipated sources of revenues available to pay the upcoming debt service on April 15, Page 3

25 Table E Surplus from Prior Year Balance in the Revenue Fund as of December 31, 2012 $2 Reserve Fund investment income $2,770 Anticipated transfer of the second-half Annual Installment (2012) $125,865 Total expected revenues $128,637 Semi-annual interest payment April 1, 2013 ($115,040) Total debt service ($115,040) Second-half installment of administrative expenses ($10,825) Total CDA expenses ($125,865) Surplus from prior year $2,772 As shown in Table E above, the total debt service due on April 15, 2013 is equal to $115,050. Additionally, the second-half annual budget for the 2012 tax year, as approved by the CDA Board, is equal to $10,825. Accordingly, the total CDA expenses expected to be paid on April 15, 2013 are equal to $125,865. The total anticipated available revenues, as shown in Table E, to pay debt service on April 15, 2013 in the amount of $128,637 less total estimated CDA expenses of $125,865 result in an estimated surplus of $2,772 ($128,637 - $125,865 = $2,772), to be available to pay debt service in the 2013 tax year. Method of Levying the Annual Installment Annual Installment According to the Rate and Method of Apportionment, the Annual Installment on each parcel shall be equal to the Annual Installment Rate multiplied by the Principal Portion of the Special Assessment for each assessed parcel. The total of the Annual Installments on all assessed parcels is to be equal to the Annual Revenue Requirement, which was explained in the previous section. The Annual Revenue Requirement as shown above is $252,082. Accordingly, and as shown in the Assessment Roll attached hereto as Appendix A-2, the total Annual Installment for the 2013 tax year is $252,082. Annual Installment Rate According to the Rate and Method of Apportionment, the Annual Installment Rate is equal to the Annual Revenue Requirement divided by the aggregate Principal Portion of the Special Assessment. The Annual Revenue Requirement is $252,082. The aggregate Principal Portion of the Special Assessment is equal to the bonds outstanding, which is $12,350,000. Accordingly, the Annual Installment Rate is equal to 2.04% ($252,082 $12,350,000 = 2.04%). The Annual Installment Rate is multiplied by the Principal Portion of the Special Assessment for each assessed parcel to determine the Annual Installment for each assessed parcel, as shown in table below. Page 4

26 Principal Portion of the Special Assessment Table F Annual Installment Principal Portion of Special Assessments Annual Installment Rate Annual Installment Parcel $0 2.04% $ $0 2.04% $ $0 2.04% $ $6,450, % $131, $5,899, % $120, A-B $0 2.04% $ B $0 2.04% $ $0 2.04% $ $0 2.04% $ $0 2.04% $0 Total $12,350,000 $252,082 The Principal Portion of the Special Assessment of all of the assessed parcels is equal to the bonds outstanding. The Principal Portion of the Special Assessment on each assessed parcel is based on the Equivalent Units of each assessed parcel. According to the Rate and Method of Apportionment, Equivalent Assessment Factors for each Land Use Class is equal to the number of units that is or may be built on a parcel, multiplied by the factors for each Land Use Class shown below, which represents an allocation of the costs of the public improvements funded by the bonds. Table G CDA Property and Equivalent Assessment Factors Land Use Class Property Type Equivalent Units Class 1 Residential dwelling units single story 1.00 per dwelling unit Class 2 Residential dwelling units two story 1.30 per dwelling unit Class 3 Residential dwelling units single family attached 1.80 per dwelling unit Class 4 Residential dwelling units single family detached 2.20 per dwelling unit Class 5 Retail and other commercial business property and other assessed property 1.20 per 1,000 BSF Reapportionment of Principal Portion of the Special Assessment upon Subdivision of a Parcel According to the Rate and Method of Apportionment, upon the subdivision of any parcel, the Special Assessment (including the Principal Portion of the Special Assessment) of the parcel prior to the subdivision is to be reallocated to each new parcel in proportion to the Equivalent Assessment Factors of each new parcel and the Special Assessment for the parcel prior to the subdivision. The reapportionment of the Principal Portion of the Special Assessment is represented in the following formula: A = B x (C D) Where the terms have the following meanings: A = the Special Assessment for the parcel Page 5

27 B = C = D = the Special Assessment of the Parcel prior to the subdivision the Equivalent Assessment Factors of a Parcel the sum of the Equivalent Units for all of the new Parcels of Assessed Property that result from the subdivision. According to the developer, there have been no subdivisions of parcels in As a result, there is no reallocation of Special Assessments in the 2013 tax year. The Principal Portion of the Special Assessment and the Special Assessment for each of the assessed parcels within the CDA is shown in Appendix A-2 attached hereto. Assessment Roll The assessment rolls attached hereto as Appendix A-1 and A-2 include the parcels in the CDA, the Special Assessment, the Principal Portion of Special Assessment and Annual Installment for each assessed parcel. The Annual Installment for each assessed parcel is shown in Appendix A-2 and represents the Annual Installment Rate multiplied by the Principal Portion of the Special Assessment for each assessed parcel as explained above. Page 6

28 Appendix A-1 Special Assessment Roll Annual Installment of Special Assessment Park Center Community Development Authority Manassas Park, Virginia Annual Installment Forgone Annual Installment Billed Tax Year Beginning Principal Interest Administrative Expenses Annual Installment 2008 $741,000 $20,000 $761,000 ($761,000) $ $230,081 $20,400 $250,481 ($10,481) $240, $230,081 $20,808 $250,889 $0 $250, $230,081 $21,224 $251,305 $0 $251, $230,081 $21,649 $251,729 $0 $251, $230,081 $30,447 $260,528 ($8,446) $252, $741,000 $22,523 $763, $135,000 $741,000 $22,974 $898, $145,000 $732,900 $23,433 $901, $155,000 $724,200 $23,902 $903, $160,000 $714,900 $24,380 $899, $170,000 $705,300 $24,867 $900, $180,000 $695,100 $25,365 $900, $195,000 $684,300 $25,872 $905, $205,000 $672,600 $26,390 $903, $215,000 $660,300 $26,917 $902, $230,000 $647,400 $27,456 $904, $245,000 $633,600 $28,005 $906, $260,000 $618,900 $28,565 $907, $275,000 $603,300 $29,136 $907, $290,000 $586,800 $29,719 $906, $305,000 $569,400 $30,313 $904, $325,000 $551,100 $30,920 $907, $345,000 $531,600 $31,538 $908, $365,000 $510,900 $32,169 $908, $390,000 $489,000 $32,812 $911, $410,000 $465,600 $33,468 $909, $435,000 $441,000 $34,138 $910, $460,000 $414,900 $34,820 $909, $490,000 $387,300 $35,517 $912, $520,000 $357,900 $36,227 $914, $550,000 $326,700 $36,952 $913, $585,000 $293,700 $37,691 $916, $620,000 $258,600 $38,445 $917, $655,000 $221,400 $39,214 $915, $695,000 $182,100 $39,998 $917, $735,000 $140,400 $40,798 $916, $780,000 $96,300 $41,614 $917, $825,000 $49,500 $25,652 $900,152 Total $12,350,000 $18,340,403 $1,156,316 $31,846,719 ($779,926) $1,246,005 Appendix A-2 Page 7

29 Special Assessment Roll Annual Installment of Special Assessment Park Center Community Development Authority Manassas Park, Virginia Tax Year 2013 Parcel Special Assessment Principal Portion of Special Assessment Annual Installment $0 $0 $ $0 $0 $ $0 $0 $ $16,635,018 $6,450,978 $131, $15,211,701 $5,899,022 $120, A-B $0 $0 $ B $0 $0 $ $0 $0 $ $0 $0 $ $0 $0 $0 Total $31,846,719 $12,350,000 $252,082 Page 8