We finally have some news worth reporting. The City of Flagstaff, the bonding company and the owner/developer reached an agreement that was accepted by the owner, Bonding Company, City Council and the bankruptcy court.  This agreement has had the affect of releasing over 3.6 million dollars held in an account to be used for the purpose of completing Phase I of the public improvements in Presidio in the Pines. The bulk of the funds are now in the hands of the Bonding Company.  The developer has authorized LP Excavating to begin work on an emergency access road deemed necessary by the City of Flagstaff. The construction of this road is only a beginning at this point but is necessary for our ability to restart construction on our homes.  An agreement with the bonding company to approve funds allowing contractors to proceed with curb and paving has still to be reached but the owner is hopeful it will happen in the coming week.  The developer intends to submit his reorganization plan with the bankruptcy court by December 3rd. The plan will detail how the owner/developer intends to proceed with the funds available and any other funding needed to finish the entire project. We can assume a thirty day process to review the plan by the court.  Once the plan is accepted by the court, a more definitive timetable can be announced. Once the developer has finalized a site construction schedule, we will be able to provide a strategy for our home construction and prospective schedule. Our intent is to resume construction as soon as the complete funding becomes available to finish the Phase I streets and associated improvements.

The existing GMAC construction loans are still an issue to be resolved. Once we have the construction schedule for Phase I in hand, we can continue with our communications with other lenders for the replacement of the GMAC loans. Our fingers are crossed for a mild winter as it will benefit our construction efforts greatly.