PRILIMINARY OFFIC STATEMENT 11-15-2001 44.

Home Browse Search

no assurance or guarantee can be given that, in the event of nonperformance under any contract or agreement described herein, the Borrower will make the required payments pursuant thereto. Damage or Destruction Although the Borrower will be required to obtain certain insurance as set forth in the Loan Agreement,there can be no assurance that the Project will not suffer losses for which insurance cannot be or has not been obtained or that the amount of any such loss, or the period during which the Project cannot generate revenues, will not exceed the coverage of such insurance policies. The Ground Lease The HRA, pursuant to the Ground Lease, has leased to the Borrower the land upon which the Project and related facilities will be located. The term of the Ground Lease is for approximately ninety-nine(99)years unless sooner terminated. The lease payments of$1.00 per year will be prepaid at the closing on the Series 2001 Bonds. The Ground Lease is a"net lease"to the HRA with all costs or expenses required to be paid by the Borrower. The HRA is required to give any notice of a default under the Ground Lease, a termination of the Ground Lease or a matter on which the HRA may claim a default to the Trustee, as mortgagee under the Mortgage and the Subordinate Mortgage, and the Trustee has an opportunity to cure any default within certain time periods. A termination of the Ground Lease will render the Mortgage Property valueless. The HRA has not subordinated its interest in the Ground Lease to the Mortgage or the Subordinate Mortgage. The HRA has no obligation or responsibility for payment of principal of and interest on the Bonds. See "The Ground Lease" in Appendix A. Competition Presently,the Project faces competition from existing facilities and is likely to face additional competition in the future either as a result of new construction or the renovation of existing facilities. Such competition may be based on prices, services, amenities and facilities, location,reputation,affiliation or other factors. Currently,there are no restrictive regulatory or similar barriers to entry into the senior housing industry. No assurance can be given that occupancy or rental rates of the Project will not be adversely affected by future competition. At this time, the Borrower is not aware of any pending developments within the primary market area of the Project. (See"The Project-Market Area and Competition" in Appendix B to this Official Statement.) No assurance can be given that occupancy of the Project or the level of rents to be charged will not be adversely affected by the availability of the other senior housing facilities in the Project's market area and elsewhere. Liability under Loan Agreement; Value of Mortgaged Property The obligations of the Borrower under the Loan Agreement to repay the Loan