DEER VALLEY GARDENS - SUMMARY REPORT LETTER.PDF

A PROFESSIONAL CORPORATION
RYLEY CARLOCK
3200 North Central Avenue, Suite 1600
S& A P P LEW HITE Phoenix, Arizona 85012-2401
Attorneys P 602.440.4800 F 602.257.9582
Offices in Arizona, Colorado and Michigan
www.rcalaw.com
John J. Fries
Direct Line: 602-440-4819
E-mail: jfries@rcalaw.com
February 4, 2021
To: Board of Supervisors Board of Directors of
Maricopa County, Arizona The Industrial Development Authority
of the County of Maricopa
Re: Not to Exceed $20,000,000 The Industrial Development Authority of the County
of Maricopa Multifamily Housing Revenue Note (Deer Valley Gardens Project),
Series 2021
Ladies and Gentlemen:
At the Authority Board meeting on January 25, 2021, the Authority Board acted
by Resolution to grant preliminary approval for the Deer Valley Gardens Project. At the
Authority Board meeting on February 9, 2021, the Authority Board will be asked to grant final
approval to the financing and to adopt a resolution authorizing the issuance and sale of the
Authority’s Multifamily Housing Revenue Note (the “Note”), through the Federal Home Loan
Mortgage Corporation (“Freddie Mac”) under its Tax-Exempt Loan program (‘Freddie Mac
TEL”), a tax exempt financing vehicle that serves as the functional equivalent of a bond. This
letter provides a summary review of the proposed financing.
THE AUTHORITY
The Authority is an Arizona nonprofit corporation, formed with the permission of
Maricopa County and incorporated under and pursuant to the Arizona Industrial Development
Financing Act, Title 35, Chapter 5, Arizona Revised Statutes, as amended (the “Act”), and the
Authority is designated by law as a political subdivision of the State of Arizona.
THE APPLICANT/BORROWER
The Applicant for financing is Deer Valley Gardens, LP, an Arizona limited
partnership (the “Borrower”’). The Managing General Partner of the Borrower is FFAH Deer
Valley Gardens, LLC (“FFAH Deer Valley”), whose sole member is Foundation for Affordable
Housing, II, LLC, (“FFAH”), a 501(c)(3) nonprofit public benefit corporation. Borrower’s
administrative partner and developer is Spira Deer Valley Gardens, LP, a California limited
partnership (“Spira”). The Authority is advised that Spira, through its affiliates, is a “Freddie
Mac Select Sponsor,” a designation earned, among other things, by a successful track record on
Freddie Mac transactions.
4795029.1
02/04/21

Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
February 4, 2021
Page 2
THE PROJECT
The “Project” consists of using $20,000,000 in note proceeds, together with other
funds available, to (a) acquire, finance or refinance, as applicable, the construction, improvement
and equipping of a 164-unit multifamily rental residential project for seniors, located at 15051
West Deer Valley Drive, Sun City West, Arizona (the “Apartments”), including over $5,000,000
to refurbish the interior of the apartment units and additional investments for exterior
improvements, including a new TPO roofing system, new energy efficient windows, ADA-
compliant modifications, common area upgrades and exterior painting; (b) fund any required
reserve funds; (c) pay capitalized interest on a portion of the Note; and (d) pay costs incurred in
connection with the authorization, issuance and sale of the Note. The Apartments will be subject
to a Regulatory Agreement and will continue to be used to provide affordable senior housing to
individuals 55 years of age or older that make 60% or less than the Area Median Income.
PLAN OF FINANCE
FFAH Deer Valley acquired the Apartments on December 18, 2020, financed by a
senior mortgage from Freddie Mac and subordinate financing from Spira. As envisioned in the
December acquisition, FFAH Deer Valley will convey the Apartments to Borrower as part of
this financing. The Note will be issued under and pursuant to the Project Loan Agreement and
the Funding Loan Agreement. The Note will be sold to Capital One, N.A., as the Initial Funding
Lender in a private placement through Freddie Mac TEL program. The Note will be secured by
a deed of trust and security agreement on the Apartments. Capital One will receive various
guarantees, including Guaranty of Completion and an Operating Deficit Guaranty, from FFAH
and Spira Preservation Fund II, LP, or one or more of Spira’s affiliates. Freddie Mac will enter
into a commitment to buy the Note from Capital One upon the satisfaction of certain conditions.
The Borrower will use the proceeds of the Note, together with additional equity
and financing, to finance the Project. The Borrower will obtain additional financing for the
Project using 4% Low Income Housing Tax Credits authorized by the Arizona Department of
Housing and a Deferred Developer Note of approximately $1,246,000.
NOTIFICATION TO ARIZONA ATTORNEY GENERAL
As required by the provisions of Arizona Revised Statutes, Section 35-721.F, the
Authority has notified the Arizona Attorney General of the Authority’s intention to issue the
financing.

Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
February 4, 2021
Page 3
PUBLIC HEARING
A public hearing pursuant to Section 147(f) of the Internal Revenue Code of
1986, as amended, will be held by a representative of the Authority on February 12, 2021, and a
Report of Public Hearing will be delivered to the Maricopa County Board of Supervisors.
ALLOCATION FOR TAX EXEMPT FINANCING
An allocation of the Arizona “volume cap” is required for the issuance of the Note
and the Borrower will apply for and obtain the required allocation.
FINANCING PARTICIPANTS
The major participants in the financing are as follows:
Issuer: The Industrial Development Authority of the County of
Maricopa
Issuer Counsel: Ryley Carlock & Applewhite, a professional corporation
Borrower: Deer Valley Gardens, L.P.
Borrower Counsel: Lotzar Law Firm, P.C.
Developer Spira Equity Partners
Developer’s Counsel Carle, Mackie, Power & Ross, LLP
Note Purchaser: Capital One, N.A.
Note Purchaser Counsel: Tiber Hudson LLC
Bond Counsel: Kutak Rock
Fiscal Agent: U.S. Bank, N.A.
PRINCIPAL FINANCING DOCUMENTS
Document Parties
Multifamily Housing Revenue Note Borrower, Issuer

Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
February 4, 2021
Page 4
Project Loan Agreement- TEL Issuer, Borrower and Fiscal Agent
Funding Loan Agreement- TEL Issuer, Note Purchaser and Fiscal
Agent
Multifamily Deed of Trust, Fixture Filing, Assignment Borrower
of Rents and Security Agreement (“Security
Instrument’)
Tax Certificate and Agreement Issuer and Borrower
Various assignment of contract instruments Issuer
Continuing Covenant Agreement Borrower and Bond Purchaser
Guaranty Spira Preservation Fund II, L.P.
Regulatory Agreement and Declaration of Restrictive Issuer, Borrower and Bond
Covenants Purchaser
FINAL APPROVAL
At the Authority Board meeting on February 9, 2021, the Authority Board will be
asked by the Applicant/Borrower to grant final approval to the application for financing and to
adopt a Resolution authorizing the issuance and sale of the Note.
BOARD OF SUPERVISORS APPROVAL
If the Authority Board acts to grant final approval for the financing and to adopt a
Resolution authorizing the issuance and sale of the Note, the Maricopa County Board of
Supervisors will be requested, at its meeting on February 24, 2021, to act as required by A.R.S. §
35-721.B to adopt a Resolution approving the proceedings of the Authority for the issuance of
the Note.
Under the provisions of the Act, specifically A.R.S, § 35-742, Maricopa
County is not in any event liable for the payment of principal or interest on bonds issued by
the Authority or for the performance by the Authority of any pledge, mortgage, obligation

Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
February 4, 2021
Page 5
or agreement of any kind undertaken by the Authority and the Note or any of its
agreements or obligations shall not be construed to constitute an indebtedness of Maricopa
County within the meaning of any constitution or statutory provision.
TRANSACTION CLOSING
If the required approvals of the Authority Board and the Maricopa County Board
of Supervisors are received, it is currently anticipated that the Note will be issued in late March,
2021. At the time the Note is issued, it is anticipated the designated Bond Counsel, will deliver
its written opinion to the effect the Note has been validly issued and that as to the portion of the
Note designated as being tax-exempt, the interest on the Note is exempt from federal and
Arizona income taxation.
LEGAL COUNSEL RECOMMENDATION
As counsel to the Authority, we have reviewed drafts of the principal financing
documents, we have been advised that these documents are now in substantially final form, and
based upon our review of such and our review of the proceedings to date relating to the proposed
issuance of the Note, we believe the financing documents and proceedings are in substantial
conformance with the policies and guidelines of the Authority and are in both form and
substance acceptable for the Authority Board and Maricopa County Board of Supervisors to act
upon and that the Resolution presented to the Authority Board relating to authorizing the
issuance and sale of the Note, and related matters, and the Resolution of the Maricopa County
Board of Supervisors will be asked to adopt are in form and substance acceptable for the
adoption.
Respectfully submi