SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) NOVEMBER 18, 1998
CALPROP CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
CALIFORNIA 1-6844 95-4044835
(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
13160 MINDANAO WAY, SUITE 180, MARINA DEL REY, CA 90292
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
(310) 306-4314
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On November 18, 1998, RGCCLPO Development Co., LLC, a California limited
liability company (the "LLC") and subsidiary of Calprop Corporation, acquired an
18 acre parcel of undeveloped land ("Parcel 1") and a 2 acre parcel of
undeveloped land ("Parcel 2"), both located in the City of Milpitas, County of
Santa Clara, State of California, from Ford Motor Land Development Corporation,
a Delaware corporation ("Ford Land"). The LLC expects to develop a new 382-unit
single-family attached development, to be known as Parc Metropolitan, on
Parcel 1, and a new 68-unit apartment development on Parcel 2.
Calprop Corporation and RGC Courthomes, Inc., a California corporation,
constitute all of the members of the LLC. The LLC will develop Parc
Metropolitan as market-rate housing, and Parcel 2 as a mix of market-rate and
middle-income housing.
The total purchase price for Parcel 1 and Parcel 2 was $17,700,000. In
addition, Ford Land has a participation interest in the total gross sales prices
for homes sold on Parcel 1; this participation interest is secured by a deed of
trust encumbering Parcel 1. The acquisition consideration for these two parcels
was determined by arm's-length negotiations between the parties.
On November 18, 1998, in connection with the acquisitions described above,
Lowe Enterprises Residential Partners, a California limited partnership (the
"Lender"), and the LLC entered into a Loan Agreement (the "Loan Agreement")
pursuant to which the Lender made a loan (the "Loan") to the LLC, secured by
Parcel 1. The Loan Agreement provides for borrowings of up to $9,700,000
through November 15, 2000 (the "Maturity Date"), subject to two (2) six
(6)-month extension options, to pay a portion of the costs of the acquisition of
Parcel 1, and certain other costs in connection with the development of
Parcel 1. The Loan bears interest at a floating rate calculated by adding a
negotiated spread to the reference rate of interest quoted from time to time by
Bank of America, N.T. & S.A. Furthermore, as additional interest, the Lender is
entitled to receive a specified percentage of all additional net cash flow of
the LLC until the total internal rate of return of the Lender from the Loan
reaches a specified level. Proceeds of the Loan will be used, in part, to
finance certain project costs relating to the acquisition and development of
Parcel 1 and the construction thereon in accordance with certain plans
previously approved by the Lender.
The Loan Documents provide that the Loan is non-recourse to the LLC, except
for certain customary exceptions. Pursuant to the Loan Documents, Calprop
Corporation has indemnified the Lender from any losses arising out of the
exceptions and from certain losses, if any, arising out of certain environmental
matters involving Parcel 1. Calprop Corporation has also guaranteed the
completion of the development of Parcel 1 in accordance with certain plans
previously approved by the Lender.
Pursuant to the Loan Agreement and the other documents evidencing and
securing the Loan (the "Loan Documents"), the LLC will use reasonable good faith
efforts to close additional construction loans from Imperial Bank on certain
specified dates, secured by Parcel 1, to finance certain additional costs of the
development of Parcel 1.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CALPROP CORPORATION
By: /s/ MARK F. SPIRO
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Mark F. Spiro
Vice President/Secretary/Treasurer
(Chief Financial and Accounting Officer)
December 10, 1998
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EXHIBIT INDEX
Exhibit Number Description
10.1 Loan Agreement, dated November 18, 1998, by and among
Calprop Corporation, RGCCLPO Development Co., LLC and Lowe
Enterprises Residential Partners.
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