The reference to current liabilities is unclear does this – include capital expenditures or debt service payable from cash flow? Purchase price should be set to allow investor tax liability. It is okay for the Department to approve the appraiser, but not the appraisal. The appraisal is supposed to be an independent valuation. NPH We appreciate the desire to require strong option agreements, See response to MPH comment above. but there are several problems with the language as drafted. We recommend HCD delete this section, and do guidelines instead. CE See above comment. See response to MPH comment above. NPH’s Abode Remove the requirement that the purchase option equal to the See response to MPH comment above. greater of fair market value or debt (excluding taxes). Industry standard is set at fair market value or debt plus taxes. SCANPH Commend interest in back-end protections. See response to MPH comment above. See above comment. Abode’s Clarify policy on reserve spend-down to avoid year 15 problems. The limited partner buy-out process is complicated and requirement to approve an appraisal may add to the HCD’s complexity and stress. CHPC See above comment. See response to MPH comment above. SCANPH’s PH As written there are a lot of concerning points. Buyouts are a See response to MPH comment above. delicate and time sensitive process. In addition, this conflicts
The reference to current liabilities is unclear – does this include capital expenditures or debt service payable from cash flow? Purchase price should be set to allow investor tax liability. It is okay for the Department to approve the appraiser, but not the appraisal. The appraisal is supposed to be an independent valuation. NPH We appreciate the desire to require strong option agreements, but there are several problems with the language as drafted. We recommend HCD delete this section, and do guidelines instead. See response to MPH comment above. CE See NPH’s above comment. See response to MPH comment above. Abode Remove the requirement that the purchase option equal to the greater of fair market value or debt (excluding taxes). Industry standard is set at fair market value or debt plus taxes. See response to MPH comment above. SCANPH Commend interest in back-end protections. See Abode’s above comment. Clarify policy on reserve spend-down to avoid year 15 problems. The limited partner buy-out process is complicated and HCD’s requirement to approve an appraisal may add to the complexity and stress. See response to MPH comment above. CHPC See SCANPH’s above comment. See response to MPH comment above. PH As written there are a lot of concerning points. Buyouts are a delicate and time sensitive process. In addition, this conflicts See response to MPH comment above.
summary-and-response-to-comments.docx