We have been informed that those buyers who have utilized GMAC for financing are beginning to receive letters demanding payoffs of their loans within forty five days of notice. The letters also include threatening language regarding the communication being from a “debt collector”.  I am surprised and disappointed that GMAC has taken this track to resolve the delays that we are experiencing with the completion of Presidio in the Pines infrastructure.  We are in the process of initiating contact with GMAC to discuss this matter.  It is symptomatic of what is occurring around the country as financial institutions are scurrying to clean up their loan portfolios in the wake of the financial concerns by the regulators.  Unfortunately, we have all become part of this drama due to the delays we have experienced.  It is frustrating for everyone.  In order to address this issue, we are contacting several alternative financing sources to replace GMAC and resolve this particular aspect of our project relationships.  For Doucette buyers, we are in discussion with Wells Fargo and Compass Bank to try and put a plan in place to transfer these loans to a new lender with the same terms and financial requirements preserved.  We only have one loan with M&I Bank and about twenty with GMAC.  Of course, all of our financial issues, as well as the other builders and owners, are affected by the Chapter 11 financial proceedings for the project.    

At this point in time, there are a number of significant steps being taken to move forward with the completion of infrastructure which allows us to proceed with construction of our homes under contract.  The owner/developer, represented by Rick Elsey, has been actively working on and negotiating for new financing to complete the improvements for the overall community. He is also seeking the release of funds held in a neutral account which serves as an assurance for the City of Flagstaff on the primary or first phase of street and infrastructure improvements.  These improvements are particularly important in that they affect all of our buyers and owners with loans that are coming due.  A hearing is scheduled on October 1st in Phoenix with the Bankruptcy Court to discuss the very topic of releasing approximately 3.5 million dollars held in a bank account to assure completion of the Phase 1 improvements. The owner/developer is also obligated to file a plan of reorganization with the court by October 2, 2008. I have been told the current reorganization plan will be filed prior to the October 2nd deadline. The reorganization plan will include disclosure as to how the owner plans to complete the project, pay the creditors, and meet its’ obligations.  They will show a commitment for the balance of financing needed, explain how the existing funds will be used, and disclose the value of the assets to secure the completion the community. All of the creditors for Presidio in the Pines have already filed claims as to how much they are owed and the principal entities involved are First National Bank of Arizona, the subcontractors who have performed work on the site, the builders, and property owners.  From a building standpoint, my principal concern is the timing of completing Phase I Improvements because of the inevitable weather issues which are headed our direction.  From all outward appearances, the financial matters are moving forward in a positive manner and I believe that Rick Elsey has exhibited a sincere desire to complete the remaining tasks for the community.  It has required a incredible level of patience for everyone involved. To the extent that we can provide a level of communication and straight answers to your questions, please let us do so.  After reviewing some of the comments and postings, there seem to be some misconceptions about the current situation regarding ownership of lots and the loans that are in place as security for that ownership.  The sooner everyone is on the same page, the less frustration or problems down the line there will be.  Please keep us up to date with any communications you may have with your lender so that we can be of the most assistance we can in helping resolve the expiration of existing commitments.  Based on the communications by GMAC, it appears that they have made a decision on a national basis to eliminate their lending on residential construction. Collectively, we need to ensure that the transition is as smooth and facilitative as it can be.  The introduction of a new lender or lenders will require that completions of the improvements are underway once more and that a reinstituted Public Report is in place.  This will require a cooperative relationship between the City of Flagstaff, the bankruptcy court, the owner/developer, our banks, and our buyers. Please feel free to contact us in Flagstaff and provide us with information or input.  We will attempt to provide updated information via email to individual buyers, updates on the www.doucetteflag.com website and posting to the Presidio community website.