Launch - Development Finance Advisors

Are you ready to take your real estate development financing to the next level? As a developer or home builder, you know that accessing capital quickly and efficiently is crucial to success. But with traditional infrastructure financing methods currently falling short, how can you reduce overall infrastructure and capital costs and optimize returns? That's where special district financing comes into play. By exploring new sources of capital and utilizing innovative financing and cost-reduction strategies, you can unlock new opportunities and achieve your financing goals like never before. But with so many options available, where do you start? Click the link to find out... launch-mpc.com

Supreme Court Streamlines Development Impact Fee (DIF) Challenges On April 12, 2024, the United States Supreme Court issued its ruling in the Sheetz v. El Dorado, U.S. No. 2201074 stating that the Nollan/Dolan constitutional test applies equally to legislative and administrative permit conditions imposed by jurisdictions. In a nutshell, permit conditions must have an “essential nexus” to the government’s land use interest that are “roughly proportional” to a development’s impact on land uses. To date, courts have not agreed on the appropriate test for the validity of legislatively imposed impact fees. For local governments that routinely charge large development impact fees on new development without regard to the development’s impact on the land use, this ruling could require significant changes in the local governments’ methodology. Launch has been reviewing development impact fee studies for the private sector and local BIAs since the mid 1980’s and has been averaging a 22% reduction in development impact fee studies reviewed. Carter Froelich, CPA is also the author of the National Association of Home Builder’s Impact Fee Handbook 2008 and 2016 editions. For more information on any of these legislative developments or questions about development impact reviews in your state, please contact Pamela Giss ([email protected]) or Carter Froelich ([email protected]).

Our Company Just Created a PID, Now What? Once you’ve created a PID, it’s imperative to maintain and preserve your ability to be reimbursed for your eligible public infrastructure costs. As such, the company follow must follow the PID's enabling statutes related to procurement of construction contracts as well as the retention of appropriate documentation, including procurement records (as appropriate), construction contracts, change orders, draw requests, invoices, proof of payment, unconditional lien releases, acceptance letters, certification of engineers, and as built plans. To prevent our client from losing track of all this required backup documentation; we created The Launch Reimbursement System™ (LRS). The LRS alerts our consultants to all PID documentation required for reimbursement and notifies us if such documentation has not been provided to us as part of our reimbursement tracking process. This ensures that we are always collecting and retaining all the necessary information required for our clients to be reimbursed for eligible PID costs. The professionals at Launch Development Finance Advisors (Launch) have been assisting our clients navigate the challenges of PID cost and document tracking for over 20 years utilizing The Launch Reimbursement System™. For more information on how Launch may assist you and your company preserve its rights to be reimbursed from PID bond proceeds, contact Curry Froelich at [email protected]. #reimbursement #development #homebuilders #bonds

MUD FORWARD FUNDING FINANCING CONTINUES Another Successful Closing MUD Forward Funding Special Revenue Bond Astro Texas Land Projects Brazoria, Galveston, Harris and Waller Counties, Texas Par Amount: $164,990,000  Net Proceeds: $150,000,000 Coupon Rate: 5.50% Maturity: December 15, 2028 We are pleased to announce the successful closing of another non-recourse, tax-exempt Municipal Utility District (“MUD”) Forward Funding Special Revenue Bond (“Bond”), marking the addition of a significant financial instrument that allows developers and builders utilizing MUDs to accelerate the receipt of future MUD bond proceeds. The non-recourse, tax-exempt Bond is collateralized by the assignment of future MUD bond proceeds from ten (10) MUDs contained within four (4) master planned communities. Once the Bond is retired, net MUD proceeds flow back to the developer. The Bond proceeds in this transaction will be utilized to reimburse the developer for $150 million in eligible MUD improvements. The transaction also includes a $9.1 million reserve fund. As the MUD bonds pay down the outstanding Bond balance, to the extent that the reserve fund exceeds one year’s estimated interest payment, such excess reserve fund balance will be used to call Bonds. For more information on how the MUD Forward Funding Bond may accelerate the receipt of your future MUD bond proceeds, contact Carter Froelich, CPA at [email protected] or Ryan Mills at [email protected], respectively. Please visit our website: thelaunchbond.com for more details.

MUD FORWARD FUNDING FINANCING CONTINUES Another Successful Closing MUD Forward Funding Special Revenue Bond Astro Texas Land Projects Brazoria, Galveston, Harris and Waller Counties, Texas Par Amount: $164,990,000  Net Proceeds: $150,000,000 Coupon Rate: 5.50% Maturity: December 15, 2028 We are pleased to announce the successful closing of another non-recourse, tax-exempt Municipal Utility District (“MUD”) Forward Funding Special Revenue Bond (“Bond”), marking the addition of a significant financial instrument that allows developers and builders utilizing MUDs to accelerate the receipt of future MUD bond proceeds. The non-recourse, tax-exempt Bond is collateralized by the assignment of future MUD bond proceeds from ten (10) MUDs contained within four (4) master planned communities. Once the Bond is retired, net MUD proceeds flow back to the developer. The Bond proceeds in this transaction will be utilized to reimburse the developer for $150 million in eligible MUD improvements. The transaction also includes a $9.1 million reserve fund. As the MUD bonds pay down the outstanding Bond balance, to the extent that the reserve fund exceeds one year’s estimated interest payment, such excess reserve fund balance will be used to call Bonds. For more information on how the MUD Forward Funding Bond may accelerate the receipt of your future MUD bond proceeds, contact Carter Froelich, CPA at [email protected] or Ryan Mills at [email protected], respectively. Please visit our website: thelaunchbond.com for more details.

Episode 47 – The Launch Sequence – Managing a Special District Financing (4 of 4) In this episode Carter discusses the fourth stage of The Launch Sequence™ in which the project’s financing is managed, administered and reimbursements for public infrastructure are received. In The Launch Sequence™ this is called the Management Phase of the financing. In this podcast you’ll learn:   • What it the Lookback Diagnostic Review; • Why would a company want to perform a Lookback Diagnostic Review; • What are the reasons for companies losing track of reimbursable costs. #developmentfinance #bonds

RCLCO / Launch 2023 YE Top MPC Infrastructure Financing Mechanisms Launch Development Finance Advisors, partnering with RCLCO Real Estate Consulting (“RCLCO”), delivered its Year End 2023 Infrastructure Financing Mechanisms for the Top 50 Master Planned Communities (MPC). Developers and builders continue to lean heavily on public financing mechanisms to construct infrastructure with 87% of home sales occurring within a special taxing district. Estimated net construction proceeds from special district financing for a sample home in top selling MPCs increased to more than $35,000 up from an average of just over $30,000 at Mid-Year 2023. Estimated average total property taxes including special district payments as a percentage of home prices rose slightly from 2.18% to 2.23%. Of Texas’ 21 MPCs in the Top 50, all but two have a PID, MUD and/or MCID to assist in financing public infrastructure. Florida is second with 16 MPCs on the list, 12 of which use special districts. If you are interested in learning more about special district financing and how it can benefit your project, please contact Pamela Giss at [email protected] or call (480) 874-4358 or Carter Froelich at [email protected].

Sheetz v. County of El Dorado, CA – The Changing Horizon of CA Impact Fees? Unlike many other states in which we provide impact fee consulting services for the private sector and local building industry associations, the CA impact fee enabling legislation (AB 1600) has, in my opinion, led to the constant overcharging of new growth with excessive costs that are not adequately supported by typical industry standards and case law related to such matters. This all may be changing as of January 2024, the US Supreme Court heard oral arguments in the Sheetz v. County of El Dorado California case; in which a landowner filed suit against El Dorado County after paying a $23,420 Traffic Impact Fee (“TIF”) stating that the TIF violates the US Supreme Court’s holdings in Nollan v. California Coastal Commission, Dolan v. City of Tigard, and Koontz v. St. Johns River Water Mgmt. District. These cases required an “essential nexus” existing between the condition and the “legitimate public purpose” and that a monetary exaction must satisfy the “essential nexus” and “rough proportionality” tests. A decision is expected in June and its outcome could dramatically influence the impact fees California jurisdictions charge. Carter Froelich, CPA is the Managing Principal of Launch Development Finance Advisors and is the author of the National Association of Home Builder’s Impact Fee Handbook. For more information contact, reach out at [email protected]. #californialaw #californiarealestate #finance

Time to Prepare for 2024 CFD Bond Season Do you have a running total of your unreimbursed CFD eligible costs? Have you sourced and organized all your supporting public bidding documents, contracts, change orders, proof of payment, lien releases, letters of acceptance and district engineering conveyance documents? Have you obtained available Assessed Value for GO bonding purposes? Have you estimated your GO bonding capacity? Did you identify specific eligible Public Infrastructure for reimbursement? Have you estimated the useful life of your remaining eligible Public Infrastructure to ensure it is still eligible for reimbursement?  Have you prepared Reimbursement Binders in your CFD Development Agreement? Have you prepared your Bond Feasibility Report as required by ARS 48-701 (the “Act”)? If you haven’t completed each of these actions, give us a call. We can help track your reimbursements, prepare the statutory reports required by the Act and get your bond proceeds. For more information, contact Pamela Giss at (480.874.4358) or [email protected]