05-13-2020 Council Packet - Laserfiche WebLink

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TABLE OF CONTENTS Page Page SUMMARY STATEMENT.........................................................i INTRODUCTORY STATEMENT.............................................1 Forward-Looking Statements Disclaimer..............................3 THE ISSUER...............................................................................4 THE BORROWER......................................................................4 THE LIMITED GUARANTOR..................................................4 THE PROJECT AND PLAN OF FINANCE..............................4 DEBT SERVICE SCHEDULE...................................................7 THE SERIES 2020 BONDS........................................................8 Special, Limited Obligations.................................................8 Interest; Maturity; Payment...................................................8 Exchange; Transfer................................................................8 Replacement..........................................................................9 Redemption or Prepayment...................................................9 Notice of Redemption; Payment.........................................11 Ownership............................................................................11 SECURITY FOR THE SERIES 2020 BONDS........................12 General................................................................................12 Assignment of Loan Agreement; Loan Repayments...........12 The Indenture.......................................................................12 The Limited Guaranty of Limited Guarantor......................12 Reserve Fund.......................................................................13 The Mortgage......................................................................13 Special Covenants...............................................................14 Transfers of Assets..............................................................16 Repair and Replacement Reserve........................................17 Defeasance...........................................................................17 RISK FACTORS.......................................................................18 Limited Payment Sources....................................................18 Dependence on Revenues of the Project.............................18 No Subordination of Management Fees..............................18 Limited Value of the Project upon Foreclosure..................19 Additional Debt...................................................................19 Additional Guaranteed Debt; Dilution................................19 Taxability of the Series 2020 Bonds...................................19 Cybersecurity Risk..............................................................19 Financial Feasibility Study..................................................20 Competition and Reliance on Market Information in the Financial Feasibility Study............................................20 Construction and Lease-Up Risks Relating to the 2020 Project...........................................................................20 Utilization Demand.............................................................21 Failure to Maintain Occupancy...........................................21 Uncertainty of Revenues.....................................................21 Nature of Limited Guarantors’ Obligations........................22 No Credit Enhancement Facility.........................................22 No Appraisal of the Project.................................................22 Resident’s Ability to Pay.....................................................22 Certain Tax Status Issues Related to Facilities for the Elderly...........................................................................22 Absence of Rating...............................................................23 Value of Mortgaged Property..............................................23 Liquidation of Security May Not be Sufficient in the Event of a Default.........................................................23 The Manager; Possible Future Conflict of Interest.............24 Maintenance of Tax-Exempt Status....................................24 Possible Limitations on the Mortgage.................................25 Property Taxes.....................................................................25 Risk of Early Redemption...................................................25 Effect of Affiliates; Conflicts with Affiliates; Related Party Transactions; No Restrictions..............................25 Matters Relating to Enforceability......................................26 Bankruptcy..........................................................................26 Compliance with the Code..................................................26 Environmental Matters........................................................27 Amendments to Documents................................................27 Elder Care & Vulnerable Adult Protection Act of 2019.....28 State Licensing Issues [TO BE UPDATED UPON REVIEW OF THE MIX OF REVENUES AS SET FORTH IN THE FORECAST].....................................28 State Regulatory Issues........................................................28 Risk Factors Relating to the Project and also with respect to the Limited Guarantor [COVID-19 DISCUSSION TO BE ADDED AT A LATER DATE]...........................................................................29 Other Possible Risk Factors.................................................35 Summary..............................................................................35 TAX MATTERS........................................................................35 Tax Exemption....................................................................35 Bond Premium.....................................................................36 Original Issue Discount.......................................................36 Not Bank-Qualified Obligations..........................................37 Legislative Proposals...........................................................37 THE FINANCIAL FEASIBILITY STUDY..............................38 AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE LIMITED GUARANTOR............38 ENFORCEABILITY OF OBLIGATIONS...............................38 APPROVAL OF LEGAL PROCEEDINGS..............................39 ABSENCE OF MATERIAL LITIGATION..............................39 The Issuer............................................................................39 The Borrower.......................................................................39 The Limited Guarantor........................................................39 RELATIONSHIPS AMONG THE PARTIES...........................39 UNDERWRITING....................................................................40 CONTINUING DISCLOSURE.................................................40 NO BOND RATING.................................................................40 THE TRUSTEE.........................................................................40 MISCELLANEOUS..................................................................41 General................................................................................41 Limited Issuer Involvement.................................................41 No Registration of Series 2020 Bonds................................41 Interest of Certain Persons Named in this Official Statement.......................................................................41 Official Statement Certification of the Borrower................42 APPENDIX A –THE BORROWER, LANGTON SHORES, AND THE LIMITED GUARANTOR.................................A-1 APPENDIX B –FINANCIAL FEASIBILITY STUDY........................................................................................................B-1 APPENDIX C –AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION OF THE LIMITED GUARANTOR AND AFFILIATES (INCLUDING THE BORROWER) FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019............................................C-1 APPENDIX D –DEFINITIONS AND SUMMARY OF CERTAIN PRINCIPAL DOCUMENTS.....................................D-1 APPENDIX E –FORM OF BOND COUNSEL OPINION...................................................................................................E-1 APPENDIX F –FORM OF CONTINUING DISCLOSURE AGREEMENT.......................................................................F-1 APPENDIX G –BOOK-ENTRY ONLY SYSTEM..............................................................................................................G-1