| Silver Maples of Chelsea (1996) |
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$14,140,000 Silver Maples is a corporate affiliate of Chelsea Community Hospital and the developer of a senior living community consisting of independent and assisted living units. The Silver Maples project represents a joint venture between Chelsea Community Hospital and the United Methodist Retirement Communities, a locally-based long-term care organization. As Financial Advisor, First River Advisory coordinated the issuance of variable-rate demand obligations backed by a bank letter of credit. Many of the same advantages that First River Advisory had negotiated in connection with the Chelsea Community Hospital transaction, such as the arrangements with the underwriter, remarketing agent and trustee, were reproduced for the benefit of Silver Maples. To obtain the letter of credit, First River Advisory focused on demonstrating the viability of this industry in general and this project in particular to a letter of credit bank which had not been active in this market segment. Ideally, though infrequently achievable, a four-year interest-only period followed by a 26-year amortization period is essential to ensure financial viability of projects of this nature. First River Advisory negotiated a 3/22-year arrangement featuring significantly reduced debt amortized during the first two years of the amortization period, even though the 22-year amortization period extended beyond the bank's "house limit." The financing plan achieved a balance between the client's objectives, the financial forecasts relating to the project and the bank's constraints and preferences. First River Advisory also contributed its talents toward securing the necessary approvals under Michigan's Life Care Registration Act, and on construction cost issues. The firm worked especially closely with the Silver Maples governing board, and presented progress reports and decision-making information at almost all monthly board meetings.
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