12/13/2012 8:05:00 AM Prescott Valley nears bankruptcy pact for original StoneRidge developer
Ken Hedler Special to the Tribune
The original developer of the StoneRidge subdivision here has proposed paying about $1.5 million to StoneRidge's community facilities district in a bankruptcy settlement, Town Manager Larry Tarkowski announced Wednesday.
SunCor Development Co, and its parent company, Phoenix-based Pinnacle West, proposed a settlement to liquidate SunCor with Pinnacle West contributing $7 million to the bankruptcy estate, Tarkowski wrote in a memo to the Town Council. A creditor committee approved the settlement plan.
"This is a huge step forward being able to leverage additional dollars to pay down the CFD debt," Tarkowski said. It also means StoneRidge homeowners would be able to buy down the debt for the CFD bond with new bonds at lower interest rates.
Meeting as the CFD board, the Town Council approved issuing $14.8 million in bonds in December 2001 to finance a bridge, streets and other public improvements in StoneRidge, a 2,832-lot subdivision SunCor planned in the hills south of Highway 69. Homeowners currently pay $4.47 per $100 in secondary assessed valuation to pay off the bond.
Uncertainly over SunCor's future led to fears that the CFD board would double the secondary assessment rates. SunCor filed for Chapter 11 bankruptcy protection Feb. 24 in U.S. Bankruptcy Court in Phoenix.
After SunCor pays administrative costs, Tarkowski anticipates $5.1 million will be available to share with various CFDs in the state, including about $1.4 million to settle the StoneRidge CFD's joint claim with the bond trustee.
The amount is possible because the new developer of StoneRidge, Scottsdale-based Univest, reached a separate agreement with SunCor to contribute $100,000 to the settlement plan and an additional $100,000 directly into the StoneRidge CFD to help cover legal costs.
SunCor is requesting approving of the StoneRidge CFD board, according to Tarkowski, who also wears the hat of CFD manager. Meeting as the CFD board, the council will consider the settlement plan at 5:30 tonight in the library auditorium, 7401 E. Civic Circle.
In anticipation of the settlement, the CFD staff has asked the bond underwriter, RBC Dain Rauscher, to run scenarios on possible bond refinancing, Tarkowski wrote. RBC stands for Royal Bank of Canada.
Tarkowski, Mayor Harvey Skoog and Harry Ramsey, president of the StoneRidge homeowners association board, hailed the proposed settlement plan. Tarkowski praised Town Attorney Ivan Legler and CFD attorney Jared Parker for doing "and outstanding job shepherding this (settlement plan) through the process."
Skoog said, "I think we have come to a point where we can live with it. It will help us put the deal together."
The deal is good for the homeowners because the bankruptcy proceeding blocked the CFD from refinancing the bond, Ramsey said.
"If this agreement is accepted and goes through, we can go on with the refinancing project, and we are outside with what happened with the bankruptcy," Ramsey remarked.
Both Ramsey and Skoog indicated they look forward to the building of new homes in StoneRidge, which would lower the secondary tax rates homeowners are paying into the CFD.
Thirty of 100 new homes are in the process of being built, "or committed, if you will" over the next two years, Ramsey said. Univest, which had a long working relationship with SunCor, bought the unbuilt lots and 18-hole golf course in August 2011.
SunCor President Joe Lapinsky was unavailable for comment.