A senior citizen housing facility in Orange County, N.Y., has defaulted on principal and interest payments, according to a material event notice.
Tuxedo Place LP failed to pay principal and interest due on Aug. 3 on $9.8 million of bonds outstanding that were issued by the Orange County Industrial Development Agency in 1999.
The default triggers the immediate repayment of principal of the outstanding bonds, according to the notice filed on Aug. 7 by trustee Bank of New York Mellon. The trustee declined to comment on the default.
Real estate developer William Helmer formed the limited partnership to redevelop the Tuxedo Memorial Hospital into a 100-unit senior housing rental facility in the town of Tuxedo, according to the official statement. The partnership comprised Seniors at Tuxedo Inc., an entity wholly owned by Helmer and NDC Corporate Equity Fund II LP.
Helmer is the founder and sole partner of Helmer-Cronin Construction Inc., a Stony Point construction company. A call to Helmer-Cronin was not returned yesterday. New York Department of State records list Seniors at Tuxedo Inc. with a Maryville, Tenn., address. Helmer is also the chairman of the board of directors of the Montebello, N.Y.-based Provident Bank.
According to Thomson Reuters, all the outstanding bonds are held in Oppenheimer Funds Inc.'s Rochester Fund Municipals portfolio. Digby Clements, senior vice president of investment brand management at Oppenheimer, said that the company was talking to the issuer but declined to comment further.
NDC is connected to the National Development Council, a nonprofit that provides equity capital for affordable housing projects using federal low income housing tax credits. A call to the National Development Council was not returned yesterday.
The Orange County IDA originally sold $10.5 million of term bonds in two series maturing in 2032 and 2033. The bonds were unrated and marketed to as highly speculative investments for sophisticated investors. Both series bear a 7% interest rate according to the OS. According to a debt service schedule in the OS, annual debt service was to increase from $295,000 in 1999 to $815,000 by 2004. The obligor was to have a $825,000 debt service reserve fund, according to the OS.
Calls to the IDA were not returned yesterday.
Cain Brothers & Co. underwrote the deal and Ruberti, Girvin & Ferlazzo PC was bond counsel.
The facility is currently operated by Elant Inc., a nonprofit which leases it from the owners.
