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Capitalized Interest 645,053 <br /> Cost of Issuance(3) 351,520 <br /> Acquisition and Construction Costs(4) 6,708,999 <br /> Debt Service Reserve Fund 579,438 <br /> Operating Reserve Fund(2) 250,000 <br /> Total $8,735,000 <br /> (I) Pursuant to the Development Agreement,these fees payable to the City shall be forgiven upon termination of the <br /> Development Agreement if the Project operates as a senior housing facility throughout the term of the Development <br /> Agreement. <br /> (2) At closing on the Series 2001 Bonds the Operating Reserve Fund shall be initially funded through the deposit by the <br /> Borrower of a letter of credit issued by Wells Fargo Bank Minnesota,National Association for the benefit of the <br /> Trustee. <br /> (3) Includes Underwriter's discount,legal fees and accounting fees. <br /> (4) Includes amounts to be used to pay the$218,000 fee of the project coordinator,Dunbar Development Corporation. <br /> This does not include additional deferred and subordinated compensation to be paid for add tip,ial development <br /> services associated with the development and construction of the Project. <br /> FINANCIAL STATEMENTS <br /> The Borrower has no operating history and currently owns no significant assets and <br /> has no liabilities. Consequently, no historical financial statements of the Borrower are <br /> included in this Official Statement. <br /> The Borrower has prepared forecasted financial statements for its fiscal years ending <br /> December 31, 2001 to 2006, which have been examined by Virchow, Krause & Co., Inc., <br /> independent certified public accountants, whose report with respect thereto is included as <br /> Appendix C hereto. As stated in the report of Virchow, Krause & Co., Inc., there will <br /> usually be differences between forecasted and actual results, because events and <br /> circumstances frequently do not occur as expected, and those differences may be material. <br /> Therefore, the actual results achieved during the forecast period may vary materially from <br /> those forecast. <br /> LITIGATION <br /> There is no controversy or litigation of any nature pending or threatened restraining <br /> or enjoining the issuance,sale,execution or delivery of the Series 2001 Bonds,or in any way <br /> contesting or affecting the validity of the Series 2001 Bonds or any proceedings of the City <br /> or the Borrower or the Sponsor taken with respect to the issuance or sale thereof,the pledge <br /> or application of any moneys or security provided for the payment of the Bonds, the <br /> existence or powers of the City, the Borrower or the Sponsor or the title of any officers of <br /> the City, the Borrower or the Sponsor to their respective offices. <br /> ENFORCEABILITY OF OBLIGATIONS <br />