[Bill14564]

Originally Posted by onfire

Both parties hired independent appraisers and the final value is a negotiation, as with any sale / purchase agreement.

The developer still has primary control as they appoint the board, however, it should be transparent to home owners who continue to pay the amenity fee and receive the services.

The developer will get their cash to build more amenities further south and the CDD takes on bonds.

The only issue I have with this arrangement is the "landowner" control, it seems this should transition to the residents (local election) since the land is being purchased and is no longer owned by the developer, or perhaps that statement is incorrect.

Originally Posted by Bill14564

The article states that the SLCDD hired PFM to determine the value. Based on that reporting, this would be the buyer's value.

Note: the article is very light on the details of the process.

Originally Posted by onfire

You can attend or read the minutes of the meetings. The developer hired "Stantec" and the process is explained. They should finalize today I believe.

ANALYSIS/INFORMATION:
On October 14, 2024, the SLCDD Board approved a purchase and sale agreement to
purchase amenities in District 12 and District 13 and the remaining amenities in the
SLCDD service territory north of State Road 44. The SLCDD Board subsequently
approved the agreement with PFM to perform a valuation of said amenities to arrive at
a value using the income approach over 30 years. The seller was to engage with their
own valuation consultant, in which they hired Stantec to perform the valuation for the
seller to have a comparative value. Once each consultant derived a value, a
comparison is to be made to determine the preliminary purchase price. As previously
stated, the income approach is to be used over a 30 year period using a discount rate
equal to the modified true interest cost as provided by the investment banker. The
discount rate as provided by investment banker to use is 5.79%. Once each
preliminary valued is determined by both consultants, then a comparison is made to
determine how far apart the values are by percentage. If the difference is less than 5%,
the lesser of the two values will be the preliminary value used for pricing. If the values
are between 5-10%, then the average will be used as the preliminary value.
The preliminary value as prepared by PFM is $246,493,180.
Once final pricing is completed, the actual discount rate, as defined, will be applied and
the final purchase price will be determined as defined in the purchase and sale
agreement.

Then you agree that the PFM value is the buyer’s value.

Those details may be in the SLCDD minutes but they were not in the recent article which contained very few details.

The Developer does not strictly appoint the SLCDD board. The board is selected through a landowner election though it is true that the landowner is the Developer. The end result is the same but the process follows the State rules for CDDs.

It is the SLCDD that is purchasing the amenities, not a numbered CDD. As far as I know, there are no residents within the boundaries of the SLCDD so there can be no transition to a resident/local election. The numbered CDDs will transition to local control in the timeline set by the statutes that create a CDD.

[BrianL99]

Originally Posted by BrianL99

It's been reported that the "preliminary value" is $246.49M. Who's value is that? The Seller's or Buyer's ?

Originally Posted by onfire

Both parties hired independent appraisers and the final value is a negotiation, as with any sale / purchase agreement.

The developer still has primary control as they appoint the board, however, it should be transparent to home owners who continue to pay the amenity fee and receive the services.

The developer will get their cash to build more amenities further south and the CDD takes on bonds.

The only issue I have with this arrangement is the "landowner" control, it seems this should transition to the residents (local election) since the land is being purchased and is no longer owned by the developer, or perhaps that statement is incorrect.

I know exactly how it works. I asked a specific question, that you're apparently unable to answer.

Originally Posted by onfire

Y

The preliminary value as prepared by PFM is $246,493,180.
Once final pricing is completed, the actual discount rate, as defined, will be applied and
the final purchase price will be determined as defined in the purchase and sale
agreement.

Thank you Onfire, that answers my question.