The URL can be used to link to this page

Home My Public Portal Aboutgulfstream (3) Renee Basel From:mark raymond <mark.raymond@mraymondlaw.com> Sent:Thursday, April 14, 2011 1:34 PM To:jrandolph@jones-foster.com; spgumm@mailmt.com Cc:'Danny Brannon'; Bill Thrasher Subject:gulfstream Skip: I just received a call from susan schoettle-gumm. She did not know that I was being considered as bond counsel for gulfstream, but rather she wanted to talk about jupiter inlet colony. However, our conversation turned to gulfstream. I told her that I had asked to see the ordinance in advance of the 4/18 meeting, and she explained to me that the ordinance was going to create a dependent assessment district. I question whether this is the best way for the town to proceed, and here is why. Most lenders are going to want more than the assessment as security for the debt. Lenders do not like special assessment debt because not only do they have to analyze each property subject to the assessment, but also a default in payment by one taxpayer causes a default on the debt. Typically, a special assessment loan would have a backup covenant to budget and appropriate (CBA) by the municipality. This places the collection risk on the town rather than the bank, and the town would make up any deficiency in the assessment from available non ad valorem revenues. While I understand that the entire town will not be assessed, this does not in itself mandate creation of a dependent district, as the town itself can assess only the benefitted property. Using the town as the assessing entity and borrower facilitates the back-up CBA. The lending environment is very constrained right now. Jupiter Inlet Colony only received one bid from the 12 banks solicited, Jupiter Island only received two, and Hillsboro Beach only received one. So anything that can improve the creditworthiness of the transaction is very important. I realize that the town hasn't hired me, but this is a very important consideration, and I think more thought needs to be put into the structure before 4/18. Mark E. Raymond 4360 Northlake Boulevard Suite 204 Palm Beach Gardens, FL 33410 Tel: 561.775.8440 Fax: 561.775.8442 Cell: 561.758.0930 Home Tel: 561.625.1561 Email: mark.raymond@mraymondlaw.com Alt. Email: mer101559@comcast.net 1