A Way Forward for University
Park’s Future
August 28, 2019

The Goal
Complete the acquisition/turnover supported by vast majority
Avoid unnecessary costs associated with continued delay:
Minimize ongoing legal fees
Mitigate extra charges associated with Purchasing and Sales Agreement
Additional costs/risks of alternative purchase options (BAN)
Remove uncertainty impacting property values/home sales
Take advantage of historically low municipal bond rates
End acrimony within the UP community
“Create A Way Forward To Ensure University Park’s Future”

Where We Are
Purchase and Sales Agreement
Price of $16,975,000
$46,000/month escalator charge -- $138,000 to date with additional impact of
$138,000 if not resolved by year end.	Total of $17,251,000
Current agreement expires 9/30/19 with automatic extension unless cancelled by either party.
Legal Landscape
Trial date November 13th & 15th with anticipated bench verdict
Although confident of position, always uncertainty
Potential for appeals extending far into future (2020 or 2021)
Current legal costs approx $250,000 and expected to escalate significantly

Where We Are (Cont’d)
Costs/Risks of Alternative Financing (BAN)
Additional cost of nearly $600,000
Minimal, yet inherent risks add to anxiety until bond validated
Historically Low Municipal Bond Rates
Original Annual Assessments based on 4% rate
Currently expect 3% or a 25% reduction in interest rate
Potential savings of $ millions over 30 years
Impact on Home Values, Home Sales
Uncertainty has impacted both
Anxiety for those who wish/need to sell
Acrimony
Increasing tensions, frustration, anxiety and discord between and among residents

Where We Want to Be
Complete the acquisition/turnover at the lowest cost possible

Eliminate future unnecessary costs and delays

Take advantage of historically low municipal bond rates

Remove cloud of uncertainty and impact on property values & resale

Put differences aside and return to our little slice of heaven!

Seeking Common Ground
Initiated Negotiations Two Weeks Ago

Parties involved: Richard Garrett & RD Board member and between RD Board member and	John Neal, Charles Varah – then attorneys

Required in-person meetings, phone conferences, emails, etc. involving countless hours

Resulted in an agreement positioned between RD and each of the parties

Settlement Agreement

Richard Garrett withdraws lawsuits, seeks support of those opposed to bond validation

Bond validation moves forward to take advantage of favorable municipal bond rates (25% lower than original 4% estimate)

John Neal, Charles Varah (representing Pasold family):
Eliminate $46,000 monthly escalator clause – immediate $138K savings now and total of	$251K savings if close by December
Reduced base price by $225K -- $16,975M to $16,750M
Total reduction of $501,000

Settlement Agreement (Cont’d)

When acquisition complete, UPRD to cover 40% ($160K) of R. Garrett’s legal costs incurred to date

Eliminates additional future legal costs estimated at $250,000 to
$500,000
Clears the way to pursue and secure Bond Validation

Eliminates the possibility of similar future lawsuits – 1 year statue has passed several weeks ago

Settlement Agreement (Cont’d)
Bottom Line:
Reduced Purchase Price and eliminate Escalator Clause:	$501,000
Eliminate Cost (risk) of BAN:	$588,000
Increase RD reserves due to lower interest rate:	$400,000
Reduced future legal costs (estimate):	$250,000
Reimburse portion of Garrett’s legal fees:	($160,000)
Total:	$1,579,000

Other Financial Benefits:
Increasing bonds from $23.310M to $24M allows increase in reserves	$680,000

Bond interest decrease saves over term of bonds or increases reserves annually	$5,000,000

Settlement Agreement (Cont’d)

Non-Quantifiable, But Critical Benefits:

Constructive path and timeframe for completing acquisition

Removes cloud of uncertainty restraining property values, resale

Ensures acquisition and turnover supported by vast majority of residents

Offers end to acrimony and opportunity to bring community together

Next Steps
Court to acknowledge withdrawal of all lawsuits
Use set hearing dates to gain bond validation
Slow down, curtail BAN activity
Finalize Purchase and Sales agreement
Initiate bond financing
Complete acquisition and turnover process by November/December

Open issues be addressed:
Remaining funds from $1,000 assessment – refund or add to reserves

Bond Validation – others have objected – will they withdraw objections

Court date and decision on Bond Validation is central to expediting and securing bonds and completing the purchase

Can residents make one time payment as opposed to annually on tax bill?

What do I do if I haven’t yet paid the $1,000 assessment?

Appreciation

To all parties involved for a willingness to do what is right for our community
To John Neal and Charles Varah for their efforts to work with us through this process and, most recently, their willingness to modify the existing agreement
To Rich Garrett for recognizing the unique opportunity to secure incredibly low interest rates and the resulting opportunity to increase our reserves by withdrawing the lawsuits
To our entire legal team for their advice and counsel
And most importantly, to the entire UP community for your involvement and commitment over the past 28 months.

The Way Forward for University Park

We all agree this is a unique community that we value and cherish.	Today is the day for us to
unite, rally and focus on building an even
better University Park for all of us – now and forever in the future.