Greg,

I went to the title company yesterday and as instructed by Irwin I signed the deed of trust, the promissory note for 8.4, and the subordination agreement.  Can the loan amount be adjusted based on new costs estimates.  What will happen at closing?  Is the major problem with the appraisal that since the land was only appraised at 1,120,000 we would be required to contribute an additional 180,000 in equity?  If so, that is not good.

You mentioned that the we are firm on the construction numbers given to me previously.  Can you send those numbers again so I can be positive I am not looking at old numbers.  Also, I would really appreciate a schedule of true costs and expected loan.

Thank you,

Phillip

 -----Original Message-----
From: 	Greg Thorse <gthorse@keyad.com>@ENRON  
Sent:	Tuesday, October 09, 2001 1:45 PM
To:	Allen, Phillip K.
Subject:	Bishops

Phillip,

I am trying to press Bank to get the Deed of Trust to you. I am in a balancing act between moving on the construction and holding until the lien is perfected. I talked to Cheerie and she said the person in Dallas is trying to get it done today, however, she may not finish it out today, which means it will be sent for Thursday morning delivery to a sister Ticor office for signature and recording.  Have they told you any of this? Or do I need to make sure you know when, where, and how as soon as I know.

I talked to Andrew this morning the Dallas office received the Appraisal and gave the information to us over the phone.  The appraised value as built is 12.5 million, the NOI is $1,152,695.  The problem is the Land Value is $1,120,000, as this is what they have recorded as the transaction cost in January.  Andrew talked to me about if we want to put additional costs on top of this showing improvements or other costs associated with the value to show an increase in value?.  I am tending to think we are going to reduce our overall loan by adjusting the Land, Title Policy Amount, Debt Carry Cost and some other small adjustments to costs. This would reduce our overall debt and resultant equity requirement. The main difference in committing to a greater loan is that our costs of points will rise and our equity may be out of balance in the end, vs. if we borrow the exact amount, we may risk being short and needing a loan increase for any soft cost overages. I have been working on this and I am reviewing the changes to see what overall effects each change will have on your equity and return.

We are firm on the construction numbers given to you previously and we have had a number of additional costs which we have been able to absorb in the overall construction budget.  The biggest is the detention pond dredging which has gone up in cost.  The only area left to work through is the foundation/concrete number and I am confident we will hit that one on the mark. Thus, overall I am comfortable with the Hard Cost numbers at this point.

I am attempting to get with Irwin and Cheerie and seeing if we can get the final Doc's put together. Have'nt been able to get a meeting yet.

I just got interrupted in another meeting.  Let me know if there are any questions today.