05-13-2020 Council Packet - Laserfiche WebLink

Home Browse Search

21 delays caused by the Borrower, the architect, the general contractor, change orders, labor orders, labor disputes, fire, unusual delivery delays, unavoidable casualties or other causes beyond the Borrower’s control. Failure to complete the construction of the 2020 Project would materially adversely affect the value of the Project. The rate at which the 2020 Project initially lease-up, as well as long-term occupancy levels of the Project, will be critical for the Project’s success. The Forecast has certain assumptions with respect to stabilization and occupancy for the Project during the time period covered by the Forecast. No assurance can be given that the Borrower will achieve the lease-up assumptions set forth in the Forecast, even though, as of ________, 2020 there were ___ individuals on the waiting lists for independent living facilities of affiliates of the Limited Guarantor and the Borrower in the market area indicated in the Forecast. Future occupancy of the Project could be affected by numerous conditions, including overall demand, competition, the affordability or competitiveness of rates and charges and the desirability of the physical facilities and available services, in addition to general or local economic conditions. The viability of the Project will require sufficient revenues to meet both debt service requirements and the costs of operating and maintaining the Project, many of which costs may be beyond the control of the Borrower or may be as yet unknown or not precisely determinable. If the Project fails to maintain occupancy levels and an acuity mix as management forecasted in the Forecast, there may be insufficient funds to pay the debt service on the Series 2020 Bonds. The Forecast should be read in its entirety, including management’s notes and assumptions set forth therein. See “APPENDIX B - FINANCIAL FEASIBILITY STUDY” in this Official Statement. Utilization Demand Several factors could, if implemented, affect demand for services of the Borrower, and consequently the Project, including (i) efforts by insurers and governmental agencies to reduce utilization of senior facilities such as the Project by such means as preventive medicine and home health care programs; (ii) advances in scientific and medical technology; and (iii) increased or more effective competition from facilities now or hereafter located in the service area of the Project. See “APPENDIX B - FINANCIAL FEASIBILITY STUDY” in this Official Statement. Failure to Maintain Occupancy The economic feasibility of the Project depends in large part upon the ability of the Borrower and the Manager to maintain substantial occupancy throughout the term of the Series 2020 Bonds. If the Borrower fails to obtain or maintain substantial occupancy in the Project, there may be insufficient funds available to pay the debt service on the Series 2020 Bonds. Uncertainty of Revenues The Borrower does not anticipate having any other assets other than the Project and is not expected to have any revenues except those derived from the Project. As noted elsewhere, except to the extent that the Holders of the Series 2020 Bonds receive under certain circumstances, proceeds of insurance, sale or condemnation awards, the Series 2020 Bonds will be payable from Loan Repayments or prepayments to be made by the Borrower under the Loan Agreement. In the event that the Project does not generate sufficient revenues to pay debt service on the Series 2020 Bonds; then, provided that the Limited Guarantor has not been previously released from its obligations under the Limited Guaranty, the Limited Guarantor will be required to make payments under the terms of the Limited Guaranty. The ability of the Borrower to make payments under the Loan Agreement is dependent upon the generation by the Project of revenues in the amounts necessary for the Borrower to pay the principal, premium, if any, and interest on the Series 2020 Bonds, as well as other operating and capital expenses. The realization of