Amenity Asset Valuation
POINCIANA CDD BOARD OF SUPERVISORS
& POINCIANA WEST CDD BOARD OF SUPERVISORS

28-Jul-16

Environmental Financial Group	1

Valuation Concept
AMENITY ASSET VALUATION

28-Jul-16	2

Valuing Recreational Amenities
Value on open market not defined by original or replacement cost Value is unique to Poinciana CDD
Amenity value intrinsically linked to Poinciana residential market
Capped revenue is viewed as a negative on the open market Current revenue stream a practical indicator of value Acquisition assures long-term, sustainable amenity benefits

28-Jul-16	3

Our Objectives
Determine available capital funds
Quantify renewal & replacement needs and cash reserves Estimate amenity acquisition value
Estimate required Assessment Bond amount

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Capital Funds
AMENITY ASSET VALUATION

28-Jul-16	5

Available Funds
5,590 Planned Units
Developed and undeveloped
No non-residential units
Based on 2016 Club Membership Fees
$5,437,212 available each year for capital
Does not take into account discounts or collection fees required by Florida law

Development	Phase	Planned Units

Rainbow Lakes	1B 	401	$65.00	$31 2,780.00	
Treviso	1C 	36	$85.00	$36,720.00	
Bella Vista	1D 	65	$74.00	$57,720.00	
Lago Vista	1E 	84	$74.00	$74,592.00	
Treviso	1F 	1 71	$85.00	$1 74,420.00	
Lago Vista	1 G-TH	32	$85.00	$32,640.00	
Lago Vista	1H ( 40'-45')	23	$85.00	$23,460.00	
Lago Vista	1H ( 50'-65')	16 	$85.00	$1 6,320.00	
Candlewood	2A, 2B	271	$65.00	$21 1 ,380.00	
Terra Vista	2C, 2D	422	$75.00	$379,800.00	
Venezia	3A, 3B	507	$85.00	$51 7,1 40.00	
Portofino	4A	92	$75.00	$82,800.00	
Capri	4B	1 66	$75.00	$1 49,400.00	
Flora Vista	4C	370	$85.00	$377,400.00	
Flora Vista	4D	70	$85.00	$71 ,400.00	
N/A	5A, 5B W /5D	251	$85.00	$256,020.00	
N/A	5C	233	$85.00	$237,660.00	
N/A	5E ( S)	63	$85.00	$64,260.00	
N/A	5E ( W )	68	$85.00	$69,360.00	
Courtyards of Montelena	5F	1 70	$84.00	$1 71 ,360.00	
N/A	5H	1 77	$85.00	$1 80,540.00	
Portofino	5I, 5J	30	$85.00	$30,600.00	
Bella Viana	6 ( 55', 65')	1 20	$85.00	$1 22,400.00	
Bella Viana	6 ( 80')	1 02	$85.00	$1 04,040.00	

SOLIVITA WEST CDD		3,940		$3,754,21 2.00	
Valencia	7A	259	$85.00	$264,1 80.00	
Vizcaya	7B	446	$85.00	$454,920.00	
Portofino	7C	202	$85.00	$206,040.00	
Mira Vista	7D	203	$85.00	$207,060.00	
Alta Vista	7E	1 65	$85.00	$1 68,300.00	
Vestrella	7F	92	$85.00	$93,840.00	
Volare	7G1	1 02	$85.00	$1 04,040.00	
Verona	7G2 ( 55', 65')	1 81	$85.00	$1 84,620.00	
		1 ,650		$1 ,683,000.00	

SOLIVITA CDD

Club Membership
Fee

Total Revenue Available for
Capital

TOTALS	5,590	$5,437,21 2.00
Environmental Financial Group	Source: AV Homes	6

Total Bond Capacity
Establishes maximum bonding capacity only
Does not define amenity acquisition value or terms
Interest rate subject to market timing
Assumes level annual revenues available for capital over 30 years

Annual Revenue Available for Capital	$5,437,212	
Average Bond Interest Rate	3.75%	
Bond Term	30 Years	
Total Bond Capacity	$96,941,386	

Item	Amount

Environmental Financial Group	7

R&R Needs
AMENITY ASSET VALUATION

28-Jul-16

Environmental Financial Group	8

Renewal and Replacement
Condition Assessment Report is source of R&R cost and timing info We defined a 30-year replacement schedule
We defined level annual transfers to a capital reserve account
Includes both existing and new amenities Accounts for effects of construction inflation
Reflects multiple replacements for short-lived assets (e.g. HVAC) Takes a conservative view to ensure 30-year capped capital support

28-Jul-16

Environmental Financial Group	9

Condition Assessment Study Findings
$5,393,900 replacement cost of specific components if done today Replacements needed to maintain existing functionality
Inspector cost estimates are within +50% / -30% range
Some components at or near end of useful life  Others will be replaced more than once over 30 years

28-Jul-16

Environmental Financial Group	10

2017	2018	2019	2020	TOTAL	
1	2	3	4	5-30	
Riviera Spa and Fitness Center	62,400	124,000	137,700	-	4,812,300	
Waterfront Café	44,500	-	35,400	47,300	846,800	
Arts and Craft Facility	62,600	-	76,100	-	956,000	
Mosaics Restaurant	21,000	-	42,000	175,600	1,154,700	
Starlight Ballroom	130,200	-	53,800	-	1,606,800	
Bell Tower	-	-	23,600	-	151,400	
Freedom Park	-	3,800	23,600	443,700	2,083,400	
Palms Amenity Complex	56,200	148,700	85,800	68,900	2,773,000	
Rainbow Lake Amenity #1	22,600	4,300	-	-	187,400	
Rainbow Lake Amenity #2	22,600	4,300	-	-	185,800	
Candlewood Amenity	-	2,600	-	-	195,800	
Capri Amenity	1,500	1,800	-	23,100	196,800	
Terra Vista Amenity #1	-	2,600	-	23,100	195,000	
Terra Vista Amenity #2	-	2,600	-	23,100	198,000	
Flora Vista Amenity #1	3,100	2,600	-	23,100	155,200	
Flora Vista Amenity #2	3,100	2,600	-	19,000	191,100	
Lago Vista Amenity	1,500	-	32,000	6,100	516,800	
Venezia Amenity	33,100	13,500	-	19,800	1,006,400	
Bella Viana Amenity	33,100	13,500	-	19,800	740,400	
ESTIMATED R&R (Existing)	$497,500	$326,900	$510,000	$892,600	$18,153,100	
ESTIMATED R&R (AV-Requested)	$0	$0	$0	$0	$3,777,100	
TOTAL R&R NEEDS	$497,500	$326,900	$372,300	$892,600	$21,930,200	

R&R Outlays
$21,930,200 total 30- year outlays
Based on inspection results w/ 20% contingency
Includes inflation
Limitations of annual transfer require additional reserves

Environmental Financial Group	11

Capital Reserves
Timing of R&R needs requires continuous annual transfers to capital reserve
$1,103,056 annual transfer
Some temporary shortfalls may occur, but overall reserves will support needs

$1,500,000

$1,000,000

$500,000

$0

-$500,000

-$1,000,000

-$1,500,000

-$2,000,000

-$2,500,000

-$3,000,000

Capital Reserve Account Forecasted Activity
Replacements	Reserve Deposits	Year-End Balance

2017	2022	2027	2032	2037	2042

-$3,500,000

Environmental Financial Group	12

30-Year R&R Cash Reserves Summary
$27,240,170 for existing amenities
$5,851,507 for new amenities
$33,091,677 TOTAL
$1,103,056 annual transfer to the Capital Reserve Account Assumes no interest earnings on cash reserve account balance

28-Jul-16

Environmental Financial Group	13

Amenity Acquisition
AMENITY ASSET VALUATION

28-Jul-16	14

New Amenities
Funded by Assessment Bond
Exclude improvements to amenities retained by AV
Deducted from total bond capacity

Environmental Financial Group

1	Waterfront Café and Arts & Crafts	$508,628

Project	Estimated Cost

2	Bell Tower Remodel	$147,850	
3	Mosaics Restaurant and Starlight Ballroom	$1,191,338	
4	Performing Arts Building	$4,359,870	
5	Health & Fitness Center	$3,113,600	
SUBTOTAL	$9,321,286
20% Contingency	$1,864,257
TOTAL	$11,185,543
Source: AV Homes
(CDD boards have not approved any specific reconstruction or new construction)

15

Acquisition Value Calculation
Total Bond Capacity with Proposed Higher Total Units (5,590)
Identified new amenities
30-year R&R outlays and reserves
ADA compliance needs met by owner prior to close

Environmental Financial Group

	Financing	Annual, $	Total, $	
				
Total Annual Revenue Available for Capital		5,437,212	96,941,386	
				
New Amenities	Bonded	(627,371)	(11,185,543)	
				
Provision for Future R&R Needs				

Existing Amenities	(908,006)

AV Requested New Amenities	(195,050)

Total R&R Needs	Cash Transfers	(1,103,056)		
				
Other Issuance and Financing Costs	Bonded	(416,395)	(7,424,001)	
				
Acquisition Value	Bonded	3,290,391	58,665,187	
Estimated Acquisition Value approximately $54 million with 2014 build-out units

16

Assessment Bond
AMENITY ASSET VALUATION

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Capital Funds Detail
30 year term and 3.75% average bond rate
Debt service reserve (50% of maximum annual debt service) 12 months of capitalized interest (may be reduced by board)

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Sources of Funds

Assessment Bond Net Proceeds

$77,274,731

Amount

Uses of Funds

Asset Purchase	$58,665,187
Near-Term Capital Improvement Plan	$11,185,543
Debt Service Reserve Fund (50% of MDS)	$2,167,078
Capitalized Interest (12 months)			$2,897,802 Underwriting Fees	1.5%		$1,159,121 Other Issuance Costs		 $1,200,000

Assessment Bond
Amenity Asset Purchase (Limits)
$11.2 million New Amenities
No ADA compliance needs
Issuance expenses
$4,334,156 annual debt service

Environmental Financial Group

Total Uses	$77,274,731

19

28-Jul-16

20

Proposed Next Steps

✏	$59 - $81 million purchase price range

✏	Determine Operating and Maintenance Assessments

✏	Begin negotiations of Purchase and Sale Agreement

Amenity Asset Valuation
POINCIANA CDD BOARD OF SUPERVISORS
& POINCIANA WEST CDD BOARD OF SUPERVISORS

28-Jul-16

Environmental Financial Group	21