COR DEVELOPMENT, LLC
NOTICE OF THE ANNUAL MEETING OF MEMBERS
September 13, 2002
TO THE MEMBERS OF COR DEVELOPMENT, LLC:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Members of
COR Development, LLC, a Kansas limited liability company, will be held
on October 30, 2002 at 5:00 p.m., local time, at 13720 Roe, Room
407, Leawood, Kansas 66224, for the following purposes:
1. Ratification of auditors; and
2. To vote upon such other matters as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
Only members of record at the close of business on September 10, 2002,
are entitled to notice of and to vote at the meeting. The stock transfer
books will not be closed between the record date and the date of the
meeting. A list of members entitled to vote at the Annual Meeting will
be available for inspection at the executive offices of COR Development
for a period of ten days before the Annual Meeting.
All members are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to
sign and return the enclosed Proxy as promptly as possible in the envelope
enclosed for that purpose.
Any member attending the meeting may vote in person even if he or
she has returned a Proxy.
Sincerely,
Robert M. Adams
Manager
September 13, 2002
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF
UNITS YOU OWN. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE READ THE ATTACHED PROXY STATEMENT
CAREFULLY, AND COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
PROXY STATEMENT
TABLE OF CONTENTS
GENERAL 1
Revocability of Proxies 1
Solicitation 1
Deadline for Receipt of Member Proposals 1
Record Date and Voting 2
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS 2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 2
OTHER BENEFICIAL OWNERS 3
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING 3
Proposal One-Ratification of Auditors 3
FEES PAID TO INDEPENDENT AUDITORS 4
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES 4
REPORT TO AUDIT COMMITTE 4
OTHER MATTERS 5
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 6
PLAN OF OPERATION 6
FORM 10-KSB 8
APPENDIX A - PROXY CARD 9
COR DEVELOPMENT, LLC
13720 Roe
Leawood, Kansas 66224
PROXY STATEMENT
FOR THE ANNUAL MEETING OF MEMBERS
TO BE HELD ON OCTOBER 30, 2002
General
The enclosed proxy ("Proxy") is solicited on behalf of the Managers
of COR Development, LLC, a Kansas limited liability company ("COR
Development" or the "Company"), for use at the Annual Meeting of Members to
be held on October 30, 2002, (the "Annual Meeting"). The Annual Meeting will
be held at 5:00 p.m., local time, at 13720 Roe, Room 407, Leawood, Kansas 66224.
These proxy solicitation materials were mailed on or about September
13, 2002 to all members entitled to vote at the Annual Meeting.
Revocability of Proxies
Any person giving a Proxy has the power to revoke it at any time before its
exercise. It may be revoked by filing with the Managers of COR Development
at COR Development's offices, at 13720 Roe, Leawood, Kansas 66224, a notice
of revocation or another signed Proxy with a later date. Any person may also
revoke his or her Proxy by attending the Annual Meeting and voting in person.
Solicitation
COR Development will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the
Proxy and any additional soliciting materials furnished to members. Copies
of solicitation materials will be furnished to fiduciaries, and custodians
holding units in their names that are beneficially owned by others so that
they may forward this solicitation material to such beneficial owners. In
addition, COR Development may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The
original solicitation of proxies by mail will be supplemented by solicitation
by telephone, telegram, or other means by managers or employees of COR
Development. No compensation will be paid to managers or employees for any
such services.
Deadline for Receipt of Member Proposals
Proposals of members of COR Development that are intended to be presented
by such shareholders at the 2003 Annual Meeting of Members must be
received by COR Development no later than April 1, 2003, in order that they
may be included in the proxy statement and form of proxy relating to that
meeting.
Page 1
Record Date and Voting
There are two classes of securities, common units and preferred units. As of
July 24, 2002, 254,850 common units (individually, a "Common Unit" and
collectively, the "Common Units") and 601,416 preferred units (individually,
a "Preferred Unit"and collectively, the "Preferred Units") were outstanding.
Abstentionsare counted as present for the purpose of determining the presence
of a quorum for the transaction of business. Each member is entitled to one
vote for each Common Unit or Preferred Unit held. All votes will be tabulated
by the inspector of election appointed for the meeting, who will separately
tabulate affirmative and negative votes and abstentions.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
COR has not established any equity compensation plans and we do not
expect that COR will do so in the foreseeable future.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information as of July 24, 2002,
concerning the beneficial ownership of the Company's Common Units and
Preferred Units by each manager, by all directors and officers as a
group, and by each person known to the Company to "beneficially own"
more than 5% of its common or preferred units.
Name of Number of Number of
Individual or Common % Preferred %
Person in Group Units (1) Class Units Class
MANAGERS
Robert M. Adams (2) 1,500 0.59% 1,500 0.25%
2345 Grand Blvd
Suite 2800
Kansas City, MO 64108
J. Frederick Ball 25,000 4.16%
5300 Speaker Road
Kansas City, KS 66106
Steven L. Eginoire 15,000 5.89% 10,000 1.66%
8700 State Line Road
Suite 100
Leawood, KS 66206
Arthur E. Fillmore, II 500 0.20%
4435 Main St
Suite 1100
Kansas City, MO 64111
J. Scott Harrison 5,500 0.91%
2600 Grand Blvd
Suite 700
Kansas City, MO 64108
James M. Selle 1,000 0.17%
1201 Walnut St
Suite 2800
Kansas City, MO 64141
All managers 17,000 6.67% 43,000 7.15%
as a group (6 persons)
Page 2
OTHER BENEFICIAL OWNERS
Steven L. Eginoire 15,000 5.89% 10,000 1.66%
8700 State Line Road
Suite 100
Leawood, KS 66206
Michael B. and Ann Hayes 20,000 7.85%
2404 W. 124th Terrace
Leawood, KS 66209
Rosemary Lytle 15,000 5.89%
10180 Shadow Circle
Olathe, KS 66061
Robert Kirkpatrick 60,000 9.98%
P.O. Box 419692
Kansas City, MO 64141
(1) Unless otherwise noted, all units shown are held by persons
possessing sole voting and investment power with respect to such
units.
(2) Held jointly between Mr. Adams and his spouse.
As used in this table, the term "beneficial ownership" means sole
or shared voting power (including the power to vote or direct the vote)
and/or sole or shared investment power (including the power to dispose
or direct the disposition of) with respect to the security through any
contract, arrangement, understanding, relationship or otherwise, including
a right to acquire such power(s) during the next 60 days. More than one
person may be deemed to have beneficial ownership of some securities.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL ONE - RATIFICATION OF AUDITORS
The Managers have selected the firm of Mayer Hoffman McCann P.C., 420 Nichols
Road, Kansas City, Missouri 64112 ("MHM") as independent certified public
accountants to audit the financial statements of COR Development for the fiscal
year ending December 31, 2002, and we are asking the Members to ratify this
appointment. MHM has extensive experience in public accounting, including
significant experience in auditing the financial records of public companies
such as COR Development.
In the event the Members fail to ratify the appointment, the Managers will
reconsider their selection. Even if the selection is ratified, the Managers
may in their discretion direct the appointment of a different independent
auditor at any time during the year if the Managers believe that such a change
would be in the best interests of COR Development and its Members. The
affirmative vote of a majority of the Members represented and voting at the
Annual Meeting is required to ratify the selection of MHM.
A representative of MHM is expected to be present at the Annual Meeting, will
have the opportunity to make a statement if he or she desires to do so, and
will be available to respond to appropriate questions.
The Managers recommend that the Members vote FOR the ratification of the
selection of Mayer Hoffman McCann P.C. serve as COR Development's independent
auditor for the fiscal year ending December 31, 2002.
Page 3
FEES PAID TO INDEPENDENT AUDITORS
The following table shows the fees paid or accrued by COR Development for the
audit and other services provided by Mayer Hoffman McCann P.C. for the fiscal
year ending December 31, 2002.
Fees for Audit of Fiscal 2001 Financial Statement and
for Reviews of 2002 Quarterly Financial Statements $21,331
Fees for Financial Information Systems Design
and Implementation $ 0
Fees for All Other Non-Audit Services (1) $ 5,088
TOTAL $26,419
(1) Comprised of accounting consulting work rendered in connection with
reconciliation of member lists and financial statement footnote disclosures
related to tax issues.
In connection with the recently revised standards for independence of the
Company's independent public accountants promulgated by the Securities and
Exchange Commission, the Audit Committee has considered whether the
provision of "Other Non-Audit Services" is compatible with maintaining the
independence of Mayer Hoffman McCann P.C.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
COR Development did not engage MHM (or any other independent auditors) to
provide advice to COR Development regarding financial information systems
design and implementation during the current fiscal year.
REPORT OF THE AUDIT COMMITTEE
The information contained in this report shall not be deemed to be
"soliciting material" or "filed" or incorporated by reference in future
filings with the SEC, or subject to the liabilities of Section 18 of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), except to
the extent that the Company specifically incorporates it by reference
into a document filed under the Securities Act of 1933, as amended, or
the Exchange Act.
The Audit Committee is primarily responsible for assisting the Managers in
their general oversight of the Company's financial reporting, internal control
and audit functions. The Managers are responsible for the preparation,
presentation and integrity of the Company's financial statements, accounting
and financial reporting principles, internal controls and procedures designed
to ensure compliance with accounting standards, applicable laws and
regulations. The Company's independent auditor is responsible for performing
an independent audit of the annual financial statements in accordance with
auditing standards generally accepted in the United States.
Page 4
Among other matters, the Audit Committee monitors the activities and
performance of the Company's independent auditor, including the audit scope,
audit fees, auditor independence matters and the extent to which the
independent auditor may be retained to perform non-audit services. The Audit
Committee and the Board of Directors have ultimate authority and responsibility
to select, evaluate and, when appropriate, replace the Company's independent
auditor. The Audit Committee also reviews the results of the audit work with
regard to the adequacy and appropriateness of the Company's financial,
accounting and internal controls. In addition, the Audit Committee generally
oversees the Company's internal compliance programs.
The Audit Committee has reviewed and discussed with the Managers and Mayer
Hoffman McCann P.C. ("MHM") the audited financial statements of the Company
contained in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001. The Audit Committee has also discussed with MHM the
matters required to be discussed pursuant to SAS No. 61 (Codification of
Statements on Auditing Standards, AU Section 380), which includes, among
other items, matters related to the conduct of the audit of the Company's
consolidated financial statements.
The Audit Committee has received and reviewed the written disclosures and
the letter from MHM required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and has discussed with MHM
its independence from the Company.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Managers that the audited consolidated financial statements
be included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001 for filing with the SEC.
Audit Committee Members:
Robert M. Adams
Steven L. Eginoire
J. Frederick Ball
OTHER MATTERS
The Managers know of no other matters that will be presented for consideration
at the Annual Meeting. If any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the enclosed form of
Proxy to vote the Common Units and Preferred Units they represent as the
Managers may recommend. Discretionary authority with respect to such other
matters is granted by the execution of the enclosed Proxy.
Page 5
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities Exchange Act of 1934 ("Section 16(a)") requires COR
Development's directors and executive officers and persons who own more than
10 percent of a registered class of COR Development's equity securities to
file with the Securities and Exchange Commission ("SEC") initial reports of
ownership and reports of changes in ownership of COR Development Common Shares
and other equity securities. Officers, directors and greater-than-ten percent
shareholders are required by SEC regulations to furnish COR Development with
copies of all Section 16(a) forms they file.
To COR Development's knowledge, based solely on review of the copies of any
such reports furnished to COR Development and written representations that no
other reports were required, all Section 16(a) filing requirements
applicable to its officers, directors and greater-than-ten percent beneficial
owners were complied with on a timely basis during the fiscal year.
PLAN OF OPERATION
COR Development, LLC ("COR") has not had any operating revenues during
the past two (2) years.
For the next twelve (12) months, COR will be actively involved in the
development of 47 acres located at the intersection of 137th and Nall
in Leawood, Kansas.
We expect COR'S primary sources of revenue to be:
1) the sale of six undeveloped pad sites over the next three years;
2) the leasing of space in the commercial buildings; and
3) the sale of the commercial buildings after a period of
operation and at the time that holders of a majority of the units shall
approve the sale, which is currently contemplated to be by the end of
2015.
We propose to accomplish four purposes with the real estate. First, we
will develop and sell six pad sites over the next three years. Second,
we plan to develop and build commercial office and retail space and will
engage a management company to lease this space. Based upon the current
site plans, there will be approximately 360,000 square feet of retail and
office space, consisting of 220,000 square feet of retail space, 53,000
square feet of pad space (which is expected to include a bank and three
restaurants), and 90,000 square feet of office space. These facilities will
be located on 34 acres. The site may include a hotel, depending on our
ability to attract an appropriate hotel operator at a price, and within a
timeframe, that we deem acceptable.
Third, we plan to donate a total of approximately 15 acres to the Church
of the Resurrection for use in the development of its worship and
educational facilities. Fourth, we plan to develop the commercial
buildings in a manner that provides parking fields that can be utilized
by the Church of the Resurrection for its Sunday services and other
programs and activities.
Johnson County, Kansas has experienced a significant expansion of commercial
office space over the past ten years. Since 2000, the vacancy rate for
commercial property in Johnson County has increased substantially while
average rental rates for commercial property have stabilized and even declined
slightly. These market conditions may make it difficult or infeasible
to reach our projected vacancy and rent targets.
Page 6
We anticipate that construction on the facilities will commence in late 2002
to 2003 and should be completed in 2005. In late October, 2001, we finalized
and filed with the City of Leawood, Kansas, our original site plans for the
building of the facilities for the office and retail space. In conjunction
with the filing of the site plans, we requested the zoning necessary for the
proposed development. Because of subsequent and significant changes to the
site plan, it was necessary to re-submit plans to the City. A revised site
plan and accompanying documentation was submitted to the City of Leawood on
May 31, 2002, and the project is currently scheduled to go before the City's
Planning Commission on September 24, 2002. We expect that response after the
September 24 hearing will take a minimum of three to five months. In the
interim, we anticipate that we will be conducting meetings with the staff of
the City of Leawood and meetings with adjacent property owners in preparation
for receiving approval of the site plans and receiving building permits for
the construction of the facilities. The process of zoning the property is
continuing.
However, we cannot assure you that the City of Leawood will approve the
site plans, grant the necessary zoning or issue any or all of the
necessary permits required for us to develop the real estate as
proposed. If the City of Leawood fails to approve the site plans in
substantially their current form or fails to grant the requested
zoning, or if the City of Leawood or other local governments or
regulatory authorities fail to issue one or more necessary permits,
we anticipate that we will not be able to conduct the development
without significant revision to our current plan of operation.
We will employ a construction management company to take responsibility
for the overall management of the construction, including preparing the
pad sites for sale and developing and constructing the commercial
buildings. We have selected Walton Construction Co., Inc. to act as the
general contractor for the building of the facilities. We also plan to
employ a real estate development management company to assist with securing
the approval of the site plans, to provide leasing services including
obtaining tenants for the facilities, and to manage maintenance of the
buildings. We have selected Red Development Services, L.L.C. to serve as
development manager. We have entered a contract with Red Development Services,
L.L.C., but as of August 26, 2002, no contract had been executed with Walton
Construction Co. COR's Managers will provide oversight of these companies.
At this time, we have sufficient capital to carry the land for the next
twelve (12) months. Assuming the City of Leawood approves our site
plans and provides the requested zoning, and assuming that all necessary
permits are issued, we have sufficient capital to construct at least
some of the pad sites during the next twelve (12) months. However,
without a construction loan we do not have sufficient capital to
otherwise develop the real estate. We anticipate that we will use such
capital only as necessary until we obtain an initial construction loan
in 2002. We currently anticipate that the principal amount of this initial
construction loan will be approximately $3,000,000 to $5,000,000, which we
plan to use toward construction of development infrastructure. This
infrastructure construction is expected to involve selective demolition,
earthwork, construction of underground duct and utility structures,
construction of sanitary sewerage and storm drainage, and installation
of pavement.
Page 7
We will need to obtain further construction loans to complete
development as planned. The development will continue for an extended
time - we currently anticipate that construction of all of the proposed
facilities should be completed in 2005. We also anticipate that we
will need to obtain a total of approximately $39,000,000 in construction
loans to complete development. We may not be able to obtain all
necessary loans. We are currently attempting to obtain a non-recourse
loan and we can provide no assurance that such a loan will be available
at all or on terms that are suitable to COR. If we do not obtain
approximately $39,000,000 in total construction loans, we expect that
we will not be able to complete the construction of all the facilities
as proposed.
Further, factors such as cost overruns, unanticipated expenses and
other factors may require us to seek more loans than we currently
estimate to be necessary. We cannot project the impact that shortfalls
in financing, cost overruns or unanticipated expenses might have on our
plan of operations, but any of these factors or other factors could
defeat our ability to complete the development as proposed.
FORM 10-KSB
The Company files an Annual Report on Form 10-KSB with the SEC. A copy of
the Annual Report on Form 10-KSB (excluding exhibits) including financial
statements and schedules has been included with the mailing of this proxy
to all shareholders. Shareholders may obtain additional copies of these
reports, including financial statements and financial statement schedules,
without charge, by writing to Arthur E. Fillmore, II, Manager of COR
Development, at 13720 Roe, Leawood, Kansas 66224.
Dated: September 13, 2002 THE MANAGERS OF COR
DEVELOPMENT, LLC
/S/ Robert M. Adams
____________________________
Robert M. Adams, Manager
Page 8
APPENDIX A
Leawood, Kansas
COR DEVELOPMENT, LLC
Proxy Solicited by the Managers
For the Annual Meeting of Members
To Be Held October 30, 2002
The undersigned hereby constitute(s) and appoint(s) the Managers of
COR Development, LLC, a Kansas limited liability company, and each of them,
the true and lawful attorneys and proxies of the undersigned with full power
of substitution and appointment, for and in the name, place and stead of the
undersigned, to act for and to vote all of the undersigned's' Common Units
and/or Preferred Units of COR Development, LLC (the "Units") at the Annual
Meeting of Members to be held at 13720 Roe, Leawood, Kansas 66224 on October
30, 2002 at 5:00 p.m. Central Daylight Time, and at any and all adjournments
thereof as specified below and on any other matters that may properly come
before the meeting:
(1) Proposal One - Ratification of Auditors:
( ) For ( ) Against ( ) Abstain
All as set forth in the Proxy Statement.
In their discretion, the proxies are authorized to vote upon such other
business as may lawfully come before the meeting; hereby revoking any
proxies as to said Units heretofore given by the undersigned and ratifying
and confirming all that said attorneys and proxies may lawfully do by virtue
hereof.
It is understood that this proxy confers discretionary authority in
respect to matters not known or determined at the time of the mailing of the
Notice of Annual Meeting of Members to the undersigned. The proxies and
attorneys intend to vote the Units represented by this proxy on such matters,
if any, as determined by the Managers.
Page 9
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Members and the Proxy Statement furnished therewith.
Dated and signed: __________ ___ , 2002.
______________________________
______________________________
Signatures of Members
Signature(s) should agree with name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when
signing
This proxy is solicited on behalf of the Managers. Please sign and return this
Proxy to Robert M. Adams, 13720 Roe, Leawood, Kansas 66224. The giving of a
proxy will not affect your right to vote in person if you attend the meeting.
Page 10