Fiscal Affairs

Fiscal Affairs Division

Finance

Due Diligence Guidelines for Ventures

NOTE: These Due Diligence Guidelines are provided as general guidance only.

Each proposed privatized transaction is a unique opportunity. There may be a degree of similarity with other privatized transactions – but each opportunity is unique.

The information provided will vary by transaction. Do not assume that the information provided for a similar transaction will be sufficient for the currently contemplated transaction.

It is highly suggested that you meet with the System Facilities Office as soon as you initially contemplate a privatization transaction.

Application
This guideline is applicable for proposed transactions that utilize private bond proceeds to fund a portion or all of the development cost. It does not include private money as a gift. Transactions include development on Board of Regents property, whether or not the Board of Regents rents the improvements, and development not on Board of Regents property when the Board of Regents will rent the improvements.

Pertinent Board Policy
See due diligence for appropriate portion of transaction.

Pertinent Agreements: Ground Lease

Submittal Guidelines

Prior to Board Information Item

A. Team member list (firm name, principals, officers, main participants), including counsel (update as necessary through-out transaction processing)
B. Entity that will be Lessee and / or Landlord

  1. Entity name
  2. Type of legal entity
  3. Relationship(s) of entity to the ÐÔÊÓ½çAPP*
  4. Board members, trustees, etc, including relation, if any, with the ÐÔÊÓ½çAPP*
  5. Officers, including relation, if any, with the ÐÔÊÓ½çAPP*
  6. Employees who are also employed by the ÐÔÊÓ½çAPP*
  7. List of all existing agreements with the ÐÔÊÓ½çAPP*
  8. List of all assets, including the value of each asset.

* The ÐÔÊÓ½çAPP is to include the Board of Regents, any ÐÔÊÓ½çAPP institution, any cooperative organization of the Board of Regents and / or any cooperative organization of any ÐÔÊÓ½çAPP institution.

C. Program schedule
D. Financing schedule
E. Draft Pro-formas

  1. Development Budget
  2. Construction Budget
  3. Institution Pro-forma
  4. Foundation Pro-forma

F. Conformance with Master Plan
G. Conformance with Institutional mission
H .For Housing – Housing Plan including marketing study

Prior to Board approval

A. 100% Design Documents
B. Complete due diligence (as applicable) for:

C. Recordable property survey
D. Environmental Assessment
E. Title examination

  1. Title certificate
  2. If Board of Regents property
  • Date(s) real property acquired. If within past 25 years - What is the cost of acquisition and the source(s) of funding.
  • Date(s) facilities constructed. If within past 25 years - What is the total cost of development and the source(s) of funding.
  • Date(s) of any facilities renovations, additions, etc - If within the past 25 years - What is the total cost and the source(s) of funding.

F. Updated program schedule G. Updated financing schedule H. Updated pro-formas (final except for pricing)

Prior to executing ground lease agreement

Note: Minimum of three weeks required after finalization of ground lease to obtain execution.

A. Preliminary Official Statement
B. Updated pro-formas
C. Trust Agreement (if not BOR property)

Prior to executing rental agreement

A. Final pro-formas based on pricing

After Bond Sale

A. Official Statement

After construction completion

A. Revised survey and amendment to ground lease
B. Certificate of Occupancy

Annually

A. Updated pro-formas

  1. Institution pro-forma
  2. Variance from final pro-forma
  3. Variance from prior pro-forma
  4. Foundation pro-forma
  5. Variance from final pro-forma
  6. Variance from prior pro-form