Development / Redevelopment

AFG’s professionals have provided financial advisory services on a broad range of redevelopment transactions, including commercial and recreational redevelopment projects as well as market and affordable housing transactions. In connection with these projects, AFG’s professionals have been at the forefront in assisting with the negotiation of redevelopment and tax abatement agreements and providing advice relating to the structuring and financing of redevelopment projects, including security agreements and financial assistance contracts.

The structural complexity of even the most basic redevelopment project requires a wide range of financial expertise and the experience of applying these skills. AFG develops in-house financial models that are tailored specifically to each transaction. Our experience on a wide range of redevelopment transactions gives us the ability to create models that have the built-in flexibility to evaluate various scenarios based on different project and financing assumptions. AFG’s professionals continuously prove to our clients that we have the experience and technical capabilities to successfully achieve our clients’ redevelopment goals.

Examples of redevelopment projects on which AFG’s professionals have worked include the following.

Pennsauken Township Waterfront
Redevelopment Project
In September 2004, AFG’s professionals were hired by Pennsauken Township to provide financial advisory services in connection with the proposed Pennsauken Waterfront Redevelopment Project (the “Project”). The Project consists of (a) remediation of the Redevelopment Project Site and construction of certain macro-infrastructure improvements thereon, (b) construction of a maximum of three thousand one hundred (3,100) residential housing units of varying product types (including specifically and without limitation, single family, townhouse, mews, flats and duplex units) throughout the Redevelopment Project Site, (c) construction of an 18-hole golf course, and related golf course amenities, (d) construction of a conference center hotel/resort complex and (e) construction of a mixed-use commercial development, grouped in a shopping village setting. Cherokee Pennsauken, LLC (“Cherokee”) has been selected to act as master developer with respect to the Project.

The scope of services provided to Pennsauken included, among other things, assistance with the negotiation of the redevelopment agreement with Cherokee, review of other redevelopment and financial documents and the preparation of numerous financial/cash-flow analyses. Specifically, AFG’s professionals played an especially importation role in developing independent financial models to analyze the impact of various Payment in Lieu of Taxes (“PILOT”) structures. These models were designed to allow the Township to evaluate the financial impact of the Project under different financial scenarios. In addition, AFG professionals analyzed the financing assumptions and structure of Cherokee’s financial models to ensure that the information presented to the Township was mathematically accurate and reasonable.

Recently, on behalf of the Township, AFG professionals prepared an application to the Local Finance Board seeking approval of a bond ordinance authorizing not to exceed $51,000,000 aggregate principal amount of Acquisition Bond Anticipation Notes (the “Acquisition Notes”). The purpose of the Acquisition Notes is to obtain the funds necessary for the Township to acquire the Redevelopment Project Site. As ultimate security for the Acquisition Notes and to permit the Acquisition Notes to be deducted from the “gross debt” of the Township in accordance with the applicable provisions of the Redevelopment Law, the full, prompt and unconditional payment of the principal of and interest on the Acquisition Notes will be irrevocably guaranteed by Cherokee Investment Partners III, L.P., and Cherokee Investment Partners III Parallel Fund, L.P. (collectively, the “Guarantor”), all pursuant to the terms of a guaranty agreement to be entered into by and between the Township and the Guarantor. As set forth in the Guaranty Agreement, the Guarantor shall maintain available uncommitted capital in an amount equal to 115% of the principal amount of any of the Acquisition Notes outstanding at any time. Prior to the issuance of any Acquisition Notes, the Guarantor shall provide an affidavit to the Township stating that the amount of available uncommitted capital is at least equal to 115% of the principal amount of any Project Site Acquisition Notes outstanding plus the principal amount of the Project Site Acquisition Notes proposed to be issued. AFG professionals attended the LFB hearing on December 14, 2005 and assisted with the presentation of the Township’s application, which was unanimously approved by the LFB. The first phase of the note issuances in the amount of $15 million is scheduled to close on June 8, 2006.

New Jersey Economic Development Authority
Municipal Rehabilitation Bonds
In 2003, AFG professionals advised the NJEDA with the financing of $181 million Municipal Rehabilitation Bonds which were issued to fund the purposes articulated in the “Municipal Rehabilitation and Economic Recovery Act”. Briefly, these purposes include providing funds to qualified municipalities to encourage, among other things, economic growth and viability, market rate housing, improved security and quality of life for residents, and better health services. Under the Act, a State Economic Recovery Board is created for each qualified municipality and is responsible for overseeing the preparation of a strategic revitalization plan which promotes development and redevelopment in the municipality. A tax-exempt and a taxable series were issued with maturities ranging from four to twenty-five years. The professionals at AFG played a significant role in structuring the bond issue to achieve the Authority’s desired pattern of payments, analyzing the impact on the financing of various interest rate scenarios, and assisting with the procurement of credit ratings and bond insurance.

Township of West Deptford, Gloucester County
The Township of West Deptford (the "Township") is located in Gloucester County along the Delaware River. The Township is a residential and industrial community within the Delaware Valley economic region.

In 2000, AFG’s professionals assisted the Township with a financing for its RiverWinds Project (the “Project”). The Project, located on a 1,100 acre tract of land on the Township’s riverfront, consists of a community center, indoor pool and fitness center, 18-hole golf course, pier and marina, age restricted housing complex, athletic fields, scenic and equestrian trails and retail shops and restaurants. The total project cost was $58.9 million. The Township funded this cost through the issuance of long-term bonds. It is anticipated that portions of the total project cost will be offset by federal grants and corporate donations. Additionally, application of proceeds from the sale of certain land and agreements with companies for payments in lieu of taxes will be used to help minimize the impact to taxpayers. AFG professionals assisted the Township with the development of the financial plan including the preparation and evaluation of feasibility studies and preparation of detailed cash flow analyses, State of New Jersey approvals, rating agency presentations and the issuance of long and short term debt.