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Advisory committee calls proposed 288‑site RV resort a high financial risk, asks for fuller assurances
Summary
The FACT committee reviewed a developer presentation for a proposed high-end 288‑site RV resort and, citing financing, occupancy and community‑impact concerns, voted to tell the council it cannot support the project as presented and requested more detailed financial assurances.
The Town of Loxahatchee Groves Financial Advisory Committee (FACT) examined a proposed 288‑site RV resort and advised the town council that, based on the materials provided, the project appears to present substantial financial risk to the developer and potential secondary costs to the town.
Committee Chairperson Manish Sood described the committee's analysis of the developer's assumptions and said the proposal, as presented, does not demonstrate sufficient free cash flow to cover likely financing costs. "You will bring 1,200 to 1,500 people to our town," Sood said, raising concerns about added service costs and public‑safety and roadway impacts. Sood also ran a debt example during discussion: with a $45,000,000 project and 60% debt, he said, the interest burden at commercial rates could amount to roughly $2,000,000 a year — a figure he said the developer's pro forma did not clearly cover.
The developer, identified in the meeting as "Mr. Bo," defended the underwriting and clarified the town would not be a financial partner. "The town is not a partner," he said, describing options that would provide an up‑front impact fee and recurring non‑ad valorem payments to the town under some contract options.
Committee members and the auditor questioned the project's assumptions: occupancy levels, achievable rates, the project's cap‑rate assumptions (the developer cited a 7.5% cap rate), and whether a bank commitment for the construction debt had been secured. Members asked for documentation — lender commitment letters, detailed pro forma cash flows, evidence of escrow or performance guarantees, and a scenario analysis showing municipal impacts in a down market.
After discussion the committee voted 4–0 to transmit the committee's analysis to the council with this conclusion: based on the materials supplied, FACT judges the project to be high financial risk for the town to rely on and requests additional, verifiable financial assurances before the council considers any agreement or approval language that would grant fiscal expectations to the developer.
The committee asked the developer to supply detailed underwriting, proof of financing commitments, and explicit answers to potential municipal liabilities if the project underperforms. FACT noted the committee's role is advisory, and the council — not the committee — will determine whether to accept any of the developer's proposed payment or partnership options.
