28202 CABOT RD | SUITE 620 | LAGUNA NIGUEL, CA 92677
PHONE: (949) 542-7070 | FAX: (949) 542-7076
www.zimmermangroup.com
May 9, 2024
Margarita Cornejo
Deputy Finance Director
City of Menifee
29844 Haun Road
Menifee, CA 92586
T. (951) 723-3716
E. [email protected]
RE: Series 1 Bond Issuance Request, CFD No. 2023-1 (Rockport Ranch) Dear Ms. Cornejo,
On behalf of Lennar Homes (“Developer”), we are requesting the City of Menifee (“City”) move forward with the issuance of a series of bonds (“Bonds”) for CFD No. 2023-1 (Rockport Ranch) (“CFD”). The CFD is includes 305 lots within Tract Map No. 37131 (the “Project”). We would like to issue a series of bonds secured by roughly 60% of the lots within the Project (“Series 1 Bonds”). A summary of the development status for the proposed Series 1 Bonds is included in the table below.
CFD No. 2023-1 (Rockport Ranch)
Development Status Units % of Total
110 61%
9 5%
47 26%
12 7%
Closed Homes*
Completed Homes (8 Models)
Under Construction/Sold
Under Construction/Unsold
Finished Lots (Permitted) 3 2%
Series 1 Bonds - Total Units 181 100%
The attached Exhibit A shows the estimated bond sizing and debt service schedule for the Series 1 Bonds, which results in approximately $7.9M in construction proceeds. The construction proceeds would fund City impact fees and facilities and EMWD facilities. The purpose of issuing two series of bond is to limit the special taxes to be levied on property owned by the Developer. Given that interest rates have remained low and the City’s recent success in selling bonds, w e believe it's on optimal time to move forward with the Series 1 Bonds.
We a ppreciate your consideration of this request and look forward to working with the City team to issue bonds for the Project. If you have any questions, please contact me at (949) 542-7072.
Sincerely,
John Zimmerman
Principal
CC: Shane Spicer, Spicer Consulting Group
Sepideh Bastani, Lennar Homes – Project Manager
Wi
lliam Sacriste, Lennar Homes – Director of Forward Planning Geoff Smith, Lennar Homes – Vice President
* Estimated closings as of June 2024
EXHIBIT A
City of Menifee CFD No. 2023-1 (Rockport Ranch)
Lennar Homes - Rockport Ranch (TR No. 37131)
Estimated Debt Service & Bond Sizing Schedule
May 9, 2024
ISSUANCE ASSUMPTIONS ESTIMATED SOURCES AND USES
Closing Date 9/15/2025 Sources
Special Tax Revenue Escalation 2.000% Par Bond Amount 9,170,000$ Annual Administration Expense 30,000$
Administration Expense Escalation 2.000% Uses
Debt Service Coverage Ratio 110% Reserve Fund 846,869$
Underwriter Discount Estimate 2.000% Capitalized Interest - Issuance Costs Estimate 250,000$ Underwriter Discount 183,400 Months of Capitalized Interest - Costs Of Issuance 250,000 Gross Special Tax Revenues 2024-2025 582,604$ Construction Fund 7,889,731 Total Uses 9,170,000$
BOND DEBT SERVICE
Period Gross Priority Capitalized Net Debt Debt Service Ending Revenues Admin Principal Yield Interest Interest Service Coverage 9/1/2026 582,604$ 30,000$ 10,000$ 2.420% 471,932$ -$ 481,932$ 114.66% 9/1/2027 594,256 30,600 20,000 2.420% 490,786 - 510,786 110.35% 9/1/2028 606,141 31,212 30,000 2.670% 490,302 - 520,302 110.50% 9/1/2029 618,264 31,836 40,000 3.020% 489,501 - 529,501 110.75% 9/1/2030 630,629 32,473 55,000 3.420% 488,293 - 543,293 110.10% 9/1/2031 643,241 33,122 65,000 3.720% 486,412 - 551,412 110.65% 9/1/2032 656,106 33,785 80,000 3.920% 483,994 - 563,994 110.34% 9/1/2033 669,228 34,461 95,000 4.170% 480,858 - 575,858 110.23% 9/1/2034 682,613 35,150 110,000 4.420% 476,897 - 586,897 110.32% 9/1/2035 696,265 35,853 125,000 4.620% 472,035 - 597,035 110.62% 9/1/2036 710,191 36,570 145,000 4.770% 466,260 - 611,260 110.20% 9/1/2037 724,394 37,301 165,000 4.870% 459,343 - 624,343 110.05% 9/1/2038 738,882 38,047 185,000 4.920% 451,308 - 636,308 110.14% 9/1/2039 753,660 38,808 205,000 5.000% 442,206 - 647,206 110.45% 9/1/2040 768,733 39,584 230,000 5.070% 431,956 - 661,956 110.15% 9/1/2041 784,108 40,376 255,000 5.140% 420,295 - 675,295 110.13% 9/1/2042 799,790 41,184 280,000 5.200% 407,188 - 687,188 110.39% 9/1/2043 815,786 42,007 310,000 5.270% 392,628 - 702,628 110.13% 9/1/2044 832,101 42,847 340,000 5.320% 376,291 - 716,291 110.19% 9/1/2045 848,743 43,704 370,000 5.370% 358,203 - 728,203 110.55% 9/1/2046 865,718 44,578 405,000 5.420% 338,334 - 743,334 110.47% 9/1/2047 883,033 45,470 445,000 5.470% 316,383 - 761,383 110.01% 9/1/2048 900,693 46,379 480,000 5.520% 292,041 - 772,041 110.66% 9/1/2049 918,707 47,307 525,000 5.620% 265,545 - 790,545 110.23% 9/1/2050 937,081 48,253 570,000 5.620% 236,040 - 806,040 110.27% 9/1/2051 955,823 49,218 615,000 5.620% 204,006 - 819,006 110.70% 9/1/2052 974,939 50,203 670,000 5.620% 169,443 - 839,443 110.16% 9/1/2053 994,438 51,207 725,000 5.620% 131,789 - 856,789 110.09% 9/1/2054 1,014,327 52,231 780,000 5.620% 91,044 - 871,044 110.45% 9/1/2055 1,034,614 53,275 840,000 5.620% 47,208 - 887,208 110.61% Total 23,635,109 1,217,042 9,170,000 5.48% 11,128,515 - 20,298,515 110.01%