Introduction

Twenty minutes from downtown Dallas, surrounded by mature trees, free-flowing creeks and overseen by an unspoiled "big sky" stands a vibrant, environmentally-sensitive, master planned, mixed-use community known as Falcon's Lair.
Twenty five years ago, Spencer Alpert saw something remarkable in this "secret" enclave, and because of this vision several hundred satisfied homeowners now live and play in harmony with nature in the idyllic setting.

Over the years, Falcon’s Lair has become a showplace for green, master-planned, mixed use communities, with its dedication of over 50% of the project to open space development. In order to create this "one-with-nature" environment, Mr. Alpert took several unusual steps: rescuing large trees from the bulldozer for relocation to a park within the development where they stand today with monarch butterflies and native species of plants and animal life as their companions; creating three new lakes where egrets and peregrine falcons now spend their days; planting new trees which have grown with the community to surround the new lakes, while leaving the bluebonnets and indian paint brushes which predated the development to provide a splash of color for the countryside around the new homes every spring; building hike and bike trails throughout the project to encourage pedestrian and bicycle traffic; and providing for perpetual maintenance of the two community centers and their swimming facilities, along with mature year-round landscaping, antique lighting features and other amenities which enhance the lifestyle of the residents.

And to ensure financial stability and success,
Mr. Alpert partnered with the area's largest master-planned community developer, Ross Perot, Jr.'s Hillwood Development for the residential portions of the project and Koll Development Company, one of the nation's leading business park developers and operators, for the commercial portions. As well, the Master Development Agreement Mr. Alpert concluded with the city of Mesquite, the Mesquite Independent School District, Koll and others provides innovatively and adequately for the long-term sustainability and success of the Falcon's Lair project.

In the end, Falcon's Lair was brought to life, nourished through its early years and ultimately flourished in its maturity as a result of the dreams and perseverance of Spencer Alpert.

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General Description

Falcon's Lair is a master-planned, high amenity, environmentally friendly, "green" mixed use community located in eastern Dallas County in the city of Mesquite, Texas, 20 minutes from downtown Dallas. The 1,417-acre upscale development straddles
I-20, the primary east-west travel corridor for interstate traffic entering the Dallas/Fort Worth area, three miles east of I-635 (LBJ Freeway).

Falcon's Lair's 665-acre residential Northern Tract currently incorporates over 500 homes and developed lots, as well as two amenity centers and a regional park. An affiliate of Alpert International, acting as master developer, arranged the financing for and developed the initial infrastructure. The land has since been developed in phases by Hillwood Development Company (hillwoodresidential.com) and several major homebuilders.

Falcon's Lair's 752-acre Southern Tract is scheduled for development as a business park starting in mid 2008 by Koll Development Company (kolldevelopment.com), a well-respected national business park developer.

Citigroup Global Markets, Inc. (citigroup.com) is currently arranging $40 million in bond financing to fund new infrastructure to serve the balance of the project.

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Structure

Falcon's Lair is owned by Falcon's Lair, LP, an affiliate of Alpert International. The residential land sold to Hillwood has been developed as a Hillwood Master Planned Community, with two community centers, swimming facilities, landscape features and a homeowner's association. Other developers include D.R. Horton Homes, Wall Homes, Standard Pacific Homes, and Horizon Homes, and The Children's Safari Private School anticipated to open in Fall 2008 by well respected local day care operators Rusty Simpson and Michael Foster. The commercial land in the Falcon's Lair Business Park is subject to an exclusive marketing and development agreement with Koll Development Company.

All the land in the 752-acre Falcon's Lair Business Park lies within the Falcon's Lair Utility and Reclamation District. The District was created pursuant to special legislation enacted by the Texas legislature in 1985 and amended in 1997. This grants the District all powers granted to municipal utility districts (MUDs) under Texas law and certain special powers unique to the District. In addition, the legislation grants the District the power to levy and collect assessments on the land within the District. The District is responsible for and has undertaken the design, planning and construction of infrastructure necessary to provide drainage improvements, utilities and roadways for the development. The city of Mesquite is responsible for funding $10 million towards a new interchange and providing an additional $3.32 million towards roads and utilities for the project. All major infrastructure improvements have been completed to serve the Northern Tract of the Falcon's Lair Master Planned Community. The District anticipates finalizing the sale of $40 million of new bonds by mid 2008 to fund the balance of the infrastructure for the business park.

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Zoning

A comprehensive zoning plan for the Falcon's Lair Master Planned Community was approved by the city in 1985 and revised in 1999, 2000, 2001 and 2002 providing the developer and users with flexible zoning to maximize the development potential of the site. The zoning allows for a well balanced development with higher development densities and a greater number of amenities than similar locations, thereby enhancing the value of individual tracts. Covenants, conditions and restrictions ensure high quality throughout.

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Financing

Initial funding for Falcon’s Lair has come in the form of Certificates of Participation (COPS) issued by the District in October 1997. A total of $18,570,000 in COPS were issued, with proceeds used primarily to complete detailed planning, drainage improvements, utility construction and roadways for the initial residential tracts in the Northern Section of the development. The COPS currently have an outstanding principal balance of $15,070,000. The District has retained Citigroup Global Markets, Inc. to underwrite and market an additional $40 million of bonds, and approximately $55 million in bonds and COPS will be outstanding once the financing is complete. The proceeds of the financing will be used to complete infrastructure to serve the Falcon's Lair Business Park. The business park property was granted a Tax Increment Finance (TIF) district by the city and the Mesquite Independent School District which today provides for payment of over $30 million, plus interest, from tax collections by the city and the school district as major infrastructure is completed. TIF payments to the developer do not increase real estate taxes in the development, and may be used to repay District-issued bonds. The new District financing will also be enhanced by an agreement with the city of Mesquite to fund $13,233,000 in infrastructure for the Falcon's Lair project, including the new I-20 interchange. Security for the new financing will include an interest in the real estate, an assignment of the TIF proceeds, and 126 acres of land being transferred to Falcon's Lair, LP by the city, including 88 acres at an existing I-20 interchange.

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Land Sales

The initial land sale in the Falcon's Lair Master Planned Community was completed in 1999 to Engle Homes, a major national homebuilder. Since then, Falcon's Lair, LP has completed sales of five additional single family residential tracts totaling 240 acres. Starting in 2005, Falcon's Lair, LP began marketing the commercial property designated to serve the residential development. The residential tracts have been designed to include over 1,000 homes and two amenity centers, and most of the lots and over half the homes are already developed. Individual enclaves include The Arbors, The Preserve, The Peninsula, Hillside at Falcon's Lair, Falcon's Ridge and The Villages of Falcon's Ridge. Builders/developers include: Hillwood Development Company, owned by Ross Perot, Jr., which specializes in master planned communities, D.R. Horton, Newmark Homes, Standard Pacific Homes and Horizon Homes. A two acre commercial site has been purchased and is under construction for The Children’s Safari Private School, an upscale day care center anticipated to open in Fall 2008. One multi-family tract and two small commercial corners remain. Koll Development Company, one of America's leading office park developers, is responsible for developing and marketing the 752-acre business park known as the Falcon's Lair Business Park, starting in late 2008.

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Development Status

Northern Tract Single family, multifamily, commercial and regional park All infrastructure and major amenities are in place. All zoning and entitlements are in place. All single family residential land sold and under development - over 500 homes and developed lots. Initial commercial sale completed. Two amenity centers completed and open, each with individual swimming, playground and other community-oriented facilities. All lakes and tree planting completed per Corps of Engineers wetlands permit as part of regional park system. Remaining developable land includes limited multifamily and commercial.

Southern Tract Business park, multifamily and regional park Preliminary design, parcellation, infrastructure planning and development budgets completed for Falcon's Lair Business Park. Texas Department of Transportation (TXDOT) and city of Mesquite have executed an agreement to complete the Falcon’s Lair I-20 Interchange - pre-design work is currently on-going. All necessary infrastructure is available. All zoning and entitlements are in place. Recent approvals for the extension of State Highway 190 (George Bush Turnpike) have resulted in the inclusion of a major SH 190/I-20 interchange in conjunction with the Falcon's Lair Business Park. City of Mesquite and Mesquite Independent School District Tax Increment Finance (TIF) District completed to reimburse over $30 million, plus interest, of costs related to major utilities and major roadway system, with no increase in real estate taxes. The city has also agreed to provide $13,320,000 toward construction of the I-20 Interchange and additional roads and utilities to serve the Falcon's Lair Business Park beginning late 2008.

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Market Factors

Market analysis of the project – what makes Falcon’s Lair unique:

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