2006-387C-Minutes for Meeting December 16,2005 Recorded 4/7/2006i.
December 16, 2005
Mr. Mike Daly
Mr. Dennis Luke
Ms. Bev Clamo
Re: Thornburgh Resort Company, LLC
Dear Commissioners:
I am writing on behalf of Umpqua Bank to provide a letter of reference for the
Thornburgh Resort Company LLC, and their respective principals, David Chapman and
Kameron DeLashmutt. Umpqua Bank is working closely with the Thornburgh
Development Company on a variety of issues related to its proposed resort development
project. Through this process, the Bank has conducted a financial analysis of the
proposed resort and its development plan.
The Bank feels that Thornburgh should have adequate financial support to
facilitate the proposed development. Without going into specifics, Thornburgh seems to
have identified the issues, done the appropriate research and put together an impressive
plan, including a strong development team, which should provide a high probability of
success for the project. In its financial evaluation of the project, the Bank has reviewed
the personal financial statements of David Chapman and Kameron DeLashmutt. These
individual financial statements indicate that the financial resources are available to
undertake and complete development of the proposed resort. Chapman and DeLashmutt
have a substantial combined net worth and available cash flow that will provide a strong
secondary repayment source for any development loans.
At the current time, the Bank has a line of credit available to Genesis
Development Group, LLC (Kameron's development company) of $1.76 million which
Kameron DeLashmutt alone guarantees. This line is being used to fund home
construction. We are also in the process of closing the first of what we hope will be
several facilities to Thornburgh Resort Company, LLC. This first facility (for
approximately $1.7 million) is. for the purchase of a 436-acre tract of land and is
supported by the financial strength of David Chapman and Kameron DeLashmutt, who
will guarantee the loan. In addition to the above to credit facilities, we are in the process
of underwriting a request for a loan of approximately $2.7 million for the construction of
the sales center at Thornburgh Resort. We consider these facilities-to be the beginning
of a great relationship between Umpqua and the aforementioned individuals and
borrowing entities.
Exhibit
Page of S
As we have previously mentioned we think very highly of our relationship with
the Thornburgh Resort Company and their principals and look to expand the scope of our
relationship in the future. We are confident that they intend to develop a quality project
that will be an amenity to Deschutes County and will be widely accepted in the
marketplace.
I hope this is helpful in answering any questions you may have concerning the
financial strengths of the Thornburgh Resort Company and their principals.
Sincerely,
Marty Roca
Vice President
Commercial Relationship Manager
Andrew J. erlicher
Senior Vice President
Area Manager
Exhibit L.
Page 2 of
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bank.
Five Star Service G,.tced CJ
Private Client Group
December 15, 2005
Thornburgh Resort Company, LLC
Mr. Kameron DeLashmutt, member
Mr. David Chapman, member
Mr. Gary Mattox, member
2447 NW Canyon
Redmond, OR 97756
Gentlemen:
I am writing to expand on the letter that I wrote to the Deschutes County Planning
Department on February 4, 2005. The comments that follow will outline why I feel that
the Thornburgh Resort project is financially feasible from the standpoint of a lender.
This letter is not to be construed as a commitment by U.S. Bank to lend money, because a
formal application for a development loan has not yet been submitted, however we are
excited about the possibility to participate in the development of this project. Please feel
free to share this letter with any party you deem necessary as it relates to your hearing
with the Deschutes County Commissioners.
With any development loan, a lender will evaluate the following:
1. Cash flow available and/or projected to repay the loaned funds.
2. Quality of the collateral and the relation of its value to the amount loaned.
3. Support to the overall loan provided by the guarantors/owners of the property.
I will address each item separately below:
Cash Flow
For a typical development loan, repayment comes primarily from the sale of the
improved residential lots. A lender relies on an independent appraisal to determine the
value of the completed lots and the state of the local & regional real estate market, which
correlates into an estimate of how long it might take to sell those lots.
Based on your estimates of the cost to complete the improvements, the strength of the
local & regional real estate market, and a substantial amount of documented interest from
prospective buyers, it is my opinion that the cash flow component of your forthcoming
development loan application will be met favorably by any number of lenders in the
marketplace.
Collateral
Collateral for a development loan consists of the real estate that is being developed with
the loan funds, and is typically considered a secondary source of loan repayment. In
other words, if lot sales are not adequate to repay the development loan, the lender then
1025 NW Bond Street - Bend, OR 97701
(541) 388-8732 - (541) 388-8798 fax
Exhibit C
Page _3 of S
evaluates the collateral on a wholesale basis. This refers to the bulk-value of the lots,
which are sold to an investor at a discount.
Using even minimum expected values of the completed lots, it is my opinion that the
collateral value for your forthcoming development loan will exceed the minimum
requirements for any number of lenders in the marketplace.
Guarantor/Owner Support
Finally, a lender will evaluate the financial resources available to the guarantors/owners
of the project and their ability to complete the development as defined in their business
plan. Simply, do they have the personal resources and expertise to complete this project
and repay the development financing?
I have personally evaluated the financial condition of each owner of Thornburgh Resort
Company, LLC and believe that they have the financial resources needed to undertake
this project. Collectively, the members of Thornburgh Resort Company have a combined
net worth that exceeds $125 million.
Furthermore, I have had a business relationship with Thornburgh Resort Company and its
members for over a year and it is my opinion that, in the eyes of a prospective lender,
each one of you provides strength to the overall development loan proposal. Mr.
DeLashmutt is a successful developer with extensive knowledge of the region and of the
subject property. Mr. Chapman & Mr. Mattox are both experienced businessmen and
real estate developers and have provided substantial personal resources towards the
development costs to date. Mr. Chapman is also an experienced developer of high-end
resort property.
Together you have put together a very strong development team to successfully complete
the Thornburgh Resort project. You have worked with many of the team members in the
past and expect to build on those relationships for this project. All in all, I have a very
high opinion of the abilities of the Thornburgh Resort Company management team.
With the information that I have obtained over the past year regarding this proposed
development, there is not any part of the proposed financing structure that appears to be
out of the ordinary. Therefore it is most likely that Thornburgh Resort Company will be
able to obtain typical development financing from any number of lenders, or group of
lenders, in the marketplace.
Sincerely
S
Wes Wright
Vice President Private Banker
Exhibit (2-
Page _ 4 of 5
bank.
Fi vc S- Service G--,,!ed
Private Client Group
February 4, 2005
Deschutes County Planning
c/o Kameron DeLashmutt
Thornburgh Resort Company, LLC
2447 NW Canyon
Redmond, OR 97756
Planning Authority:
W. WES WRIGHT
Vice Presideni
Bend Office
This letter is written at the request of the members of Thornburgh Resort Company, LLC. U.S.
Bank has reviewed the personal financial information of the Thornburgh Resort members and c
state that the group has a combined net worth exceeding a mid eight-figure amount. A review of
their personal cash flows reveals that they are capable of developing their proposed project with
multiple sources of development financing that is available in the marketplace.
Additionally, Mr. David Chapman has developed projects similar in scope and is deemed to have
tremendous experience.
If you need any further assistance, please contact me at (541) 388-8734
Sincerely,
~i
Wes Wright
102 NW Oregon - PO Box 911 - Bend, OR 97709-0911
Exhibit -0
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