1. Sell at a premium in 10-15 years?
That loud outburst of laughter is the corporate/muni bond desk at your broker's office, where individual investors are nothing more than shark bait when we buy/sell individual bonds. Sure, it's not Elliot Spitzer-corrupt, but just because you see Muni or corporate yields at Yahoo's site yielding 4.5%, don't think for a minute that you'll be buying/selling anywhere near that. The markup/discount on the secondary market for bonds (corporate/muni) is outrageous (up to 5%). If you do buy it, plan on holding to maturity, unless you're willing to take a possible loss (or at the very least a gain so small you might be lucky to buy a few McDondalds Extra Value Meals) if you need the money in 10-15 years.
2. I don't know anything about the project - it sounds like it's funding a private development. Be careful about the following:
--tax implications/AMT: for 'private activity' bonds (such as this one) that aren't truly municipal activities, they are sometimes exposed to the Alternative Mininum Tax, and are not fully tax-free.
--creditworthiness: believe it nor not, just because a bond is a municipal bond doesn't mean it's backed by that municipality. For instance, there are quite a few municipal bonds in various parts of the country that are selling for a pretty good price (i.e. offer a fat yield). The reason? It's backed by General Motors, since the bond was sold to fund a municipal-sponsored facility for General Motors. Find out what the particulars are in terms of private insurance (there are several insurance companies that offer private insurance for Municipal bonds), as well as who is guaranteeing the repayment of principal and interest payments. What happens if the development hits contaminated soil or (God-forbid) uncovers a rare snail thought to be extinct for millions of years, or what if they have only sold 50% of the lots after 10 years?
Let me know what you find, as it sounds like it could be an interesting deal....