Long-Term Debt

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Long-Term Debt

(5) Long-Term Debt. Long-term debt is summarized as follows (in thousands):

	September 30,		December 31,
	2017		2016
Revolving credit (uncollateralized)	$	6,440		6,665
5.6% to 7.9% mortgage notes
due in installments through 2027		30,792		34,080
RiverFront construction loan		60,881		—
RiverFront EB5 secondary financing		17,000		—
		115,113		40,745
Less portion due within one year		4,674		4,526
	$	110,439		36,219

On January 30, 2015, the Company entered into a five year credit agreement with Wells Fargo with a maximum facility amount of $20 million (the "Credit Agreement"). The Credit Agreement provides a revolving credit facility (the “Revolver”) with a $10 million sublimit available for standby letters of credit. As of September 30, 2017, there was $5,687,000 outstanding on the revolver, $2,266,000 outstanding under letters of credit and $12,047,000 available for borrowing. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development. Most of the letters of credit are irrevocable for a period of one year and typically are automatically extended for additional one-year periods. The Revolver bears interest at a rate of 1.4% over the selected LIBOR, which may change quarterly based on the Company’s ratio of Consolidated Total Debt to Consolidated Total Capital, as defined which excludes FRP RiverFront. A commitment fee of 0.15% per annum is payable quarterly on the unused portion of the commitment. The commitment fee may also change quarterly based upon the ratio described above. The credit agreement contains certain conditions and financial covenants, including a minimum $110 million tangible net worth. As of September 30, 2017, the tangible net worth covenant would have limited our ability to pay dividends or repurchase stock with borrowed funds to a maximum of $77.5 million combined. The Company was in compliance with all covenants as of September 30, 2017.

On July 24, 2015 the Company closed on a five year, $20 million secured revolver with First Tennessee Bank with a twenty-four month window to convert up to the full amount of the facility into a ten year term loan. Interest accrues at 1.90% over one month LIBOR plus an annual commitment fee of 0.10%. As of September 30, 2017, there was $753,000 outstanding on the revolver and $19,247,000 available for borrowing. The Company expects to close on a second facility with First Tennessee Bank with a $20 million ten year term loan secured by to-be-determined collateral. The purpose of these loans is to facilitate growth through new construction in the Land Development and Construction segment and/or acquisition of existing, operating buildings to be added to the Asset Management segment.

Effective July 1, 2017 the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners I, LLC partnership (“Dock 79”) which was previously accounted for under the equity method. As such the full amount of our construction loan and secondary financing were recorded in the consolidated financial statements and described below. Both these financing sources are non-recourse to FRP.

Effective August 7, 2014, the Dock 79 obtained a commitment for a construction loan from a financial institution in the principal amount of $65,000,000 to fund certain development and construction costs of the Dock 79. The initial maturity date of the loan is the earlier of (i) August 7, 2018, or (ii) the date to which the loan is accelerated pursuant to certain terms as outlined in the agreement. Dock 79 has the option to extend the initial maturity date for one extension period of four years (Extension Term) upon the compliance with and satisfaction of certain conditions as defined in the agreement. The interest rate on the loan through the initial maturity date is based on the 2.35% over one month LIBOR and the interest rate during the Extension Term (if any) until the maturity date will be based on a fixed-interest rate swap or interest rate cap, as applicable, for the applicable LIBOR-based rate on the then applicable market terms. Accrued interest is payable in arrears on the first day of each calendar month and on the maturity date. The outstanding principal balance on all loans shall be due and payable in full on the maturity date. After maturity, accrued interest on all loans shall be payable on demand. The loan is secured by any real and personal property of Dock 79. The agreement contains certain conditions, affirmative financial covenants and negative covenants including the maintenance of a debt service ratio of not less than 1.25 to 1.00 during the Extension Term.

Effective August 7, 2014, Dock 79 partnership member EB5 Capital-Jobs Fund 8, L.P. made an initial capital contribution of $17 million in cash into an escrow account with a financial institution all of which have been used for construction. Associated with the $17 million cash contribution, EB5 is entitled to earn an investment return. The investment return requires the Dock 79 to pay interest monthly based on an annual rate of 4.95% for the first 5 years and 8% thereafter, on the balance remaining of the initial capital contributed. Dock 79 is required to repay or redeem EB5's membership interest for a purchase price equal to the sum of the balance of EB5's contribution account, plus any accrued by unpaid investment return sixty months after the initial capital contribution, unless extended for an additional twelve months in accordance with the agreement. Subsequent to the repayment of the investment return, EB5 will no longer be a partner in the Dock 79. Due to the mandatory redemption requirements associated with the EB5 financing arrangement, the related investment is classified as a liability on the balance sheets.

During the three months ended September 30, 2017 and September 30, 2016 the Company capitalized interest costs of $210,000 and $382,000, respectively. During the nine months ended September 30, 2017 and September 30, 2016 the Company capitalized interest costs of $812,000 and $864,000, respectively.