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Home My WebLink About2003 05-27 EDAP EDA MEETING City of Brooklyn Center May 27, 2003 AGENDA 1. Call to Order 2. Roll Call 3. Approval of Agenda and Consent Agenda -The following items are considered to be routine by the Economic Development Authority (EDA) and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes - Commissioners not present at meetings will be recorded as abstaining from the vote on the minutes. 1. May 12, 2003 - Regular Session 4. Commission Consideration Items • a. Proposed Hotel Developments - Requested Commission Action: - Discuss and select a proposal. 5. Adjournment • MAY -27 -2003 05:24P FROM: T0= 9524767939 P:1/2 DEVELOPMENT BROKERAGE CONS LILTING �COGNOSCENTEJ May 27, 2003 Honorable Mayor and City Council Brooklyn Center EDA 8301 Shingle Creek Parkway Brooklyn Center, MN 55430 -211 Dear Mayor and City Council, I have discussed the matter with my associates including Inter - Continental Hotels. We have decided to withdraw our proposal. Our reasons are as follows: 1. We understood the process to be that the Staff was to present the facts of the competitive proposals. This morning we discovered that the Staff has recommended one proposal over the other; Our team relied on the representations and we further evaluated the possible additional parameters by adding a water park. We understood that we would be given an equal opportunity to present our concept to the EDA on an equal footing. We committed additional funds and resourcesfo that effort and re- drafted our proposal including a larger hotel and water park. 2. We considered a private water park and found that it was unfeasible with out real estate tax exemption. Neither -our partner Inter- Continental nor we are aware of any financing that is available be it credit enhancement for revenue bonds or a mortgage for a water park. We are aware of public tax exempt enmities in the metropolitan area producing water parks that work because of their real estate tax exempt nature. Our partner and we would have been glade to build and operate an upper scale hotel on this site. We are reluctant to promise a private real estate taxable water park when we found these to be unfeasible in urban non resort destinations. We do not think that the water park adds significantly to the hotel occupancy rate and would have rather not proposed it at all. In light of the Staffs preemptive endorsement of the Radisson and private water park, I would like to say, we believe our proposal superior for a number of significant reasons: First. The management brand, (Holidex), would provide greater reservation presence. The reservation system, which should be a primary concern to the convention center, is superior to any system in the world. Its immediate production of over 140 rooms per night would provide the necessary stability to attract debt financing in this fragile market. Second. The presence of Holiday Inn Management on premise and participation of Inter - Continental would assure the continued success of the hotel. Their commitment to enter the Minneapolis / St, Paul market with this property is a huge statement of their confidence. Third. The mutual success of the hotel and convention center will rely on a close working relationship with all parties - the owners, the managers, the brand and the Earle Brown Center staff. We feel that this location being Radisson's fifth convention location in the MAY -27 -2003 05:25P FROM: TO:9524767939 P:2i2 Metropolitan area will put it at both a reservations and cost disadvantage to their other owned and managed locations making this a lower priority to them. Fourth. We feel that the Inter - Continental brand system is a better. We submit testament to that idea with the fact that many Radisson properties have recently applied to convert to the Inter- Continental system. In example the 243 room Radisson in downtown Portland has just completed application to change brands. This fact is not lost on the consumer or lenders. Fifth. Inter- Continental's participation in the hotel is far more involved and superior to competitors. We stand behind our representation that an Inter - Continental brand hotel in concert with the Earle Brown Center would be successful. The two uses would compliment each other. Not only to address the many challenges of today but the ability to meet them in future. 1 do not consider this to be true in the case of Radisson, The unfortunate reality of the current situation is that none of the parties of our team will stand still and your opportunity to take advantage of our combined resources may not be reconstituted in future. The water park seems to be at issue. Although we proposed a contribution to a water park, we feel that it will not be successful or be able to be financed without being tax exempt real estate. To additionally burden the hotel, which constitutes a majority of the debt, with the additional cost of the tax exempt debt required for the water park, would be short sighted and not serve the common goal of supporting the convention center long term. While the water park is an attractive amenity it remains to be seen that it will have a positive impact on the long term revenue of the hotel and convention center as a group. I would have preferred to explore that amenity jointly with the staff of the Earle Brown Center to better calculate its benefits. A better solution may be to reserve the space for future expansion of the convention center. Sig d, r jJn ivin gston, Managing P er scente cc/ Inter - Continental Hotels Charles Knapp Robert Ekman Thomas Noble Mark Queripet Richard Krier, Midwest Planning & Design, LLC EDA Agenda Item No. 3a • MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION MAY 12, 2003 CITY HALL - COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in regular session and was called to order at. 8:26 p.m. by President Myrna Kragness. 2. ROLL CALL President Myrna Kragness, Commissioners Kathleen Carmody, Kay Lasman, Diane Niesen, and Bob Peppe. Also present: Executive Director Michael McCauley, Assistant City Manager /Director of Operations Curt Boganey, Director of Public Works /City Engineer Todd Blomstrom, Planning and Zoning Specialist Ron Warren, City Attorney Charlie LeFevere, and Deputy City Clerk Maria • Rosenbaum. 3. APPROVAL OF AGENDA AND CONSENT AGENDA A motion by Commissioner Carmody, seconded by Commissioner Lasman to approve the agenda and consent agenda. Motion passed unanimously. 3a. APPROVAL OF MINUTES A motion by Commissioner Carmody, seconded by Commissioner Lasman to approve the April 28, 2003, regular session minutes. President Myrna Kragness abstained from the vote. Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION APPROVING 2 ND AMENDED AND RESTATED DEVELOPMENT AGREEEMNT AND ASSIGNMENT OF THE SAME Executive Director Michael McCauley discussed that Talisman Companies had requested to extend by one year the date by which the total market value of Brookdale must equal $75 Million for tax purposes in the Amended and Restated Development Agreement for the redevelopment of Brookdale. The current agreement requires that value to be reached by August 1, 2003, and be • certified for tax purposes as of January 2, 2004. Increment under the current agreement would be available for taxes payable in 2005 through 2009. 05/12/03 -1- DRAFT Under the proposed authorization of a 2 nd Amended and Restated Development Agreement, • increment would be available for taxes payable in 2006 through 2009. Mr. McCauley informed that there would be no change in the minimum improvements required and that Brookdale is close to the required market values. RESOLUTION NO. 2003-04 Commissioner Lasman introduced the following resolution and moved its adoption: RESOLUTION APPROVING 2 ND AMENDED AND RESTATED DEVELOPMENT AGREEEMNT AND ASSIGNMENT OF THE SAME The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Niesen. Motion passed unanimously. 5. ADJOURNMENT A motion by Commissioner Niesen, seconded by Commissioner Carmody to adjourn the meeting at 8:29 p.m. Motion passed unanimously. President • 05/12/03 -2- DRAFT • EDA Agenda Item No. 4a City of Brooklyn Center A Millennium Community • To: Mayor Kragness and C uncil Members Carmody, Lasman, Niesen, and Peppe From: Michael J. McCauley City Manager Date: May 23, 2003 Re: Hotel Proposals Two development proposals for a hotel adjacent to the Earle Brown Heritage Center will be presented to the Economic Development Authority on Tuesday evening. One is a proposal for a 200 room, 7 story Radisson and the other is for a 240 room, 6 story Crowne Plaza. ( Crowne Plaza includes 10 rooms at the Inn on the Farm to achieve a total of 250 rooms.) Each developer will make a presentation to the EDA after the Powerpoint presentation by staff. We will be asking the EDA to direct staff to negotiate a Development Agreement with one of the two development groups. As indicated in the attached materials, there are many similarities between the proposals. Both proposals are for up scale franchises and • predominantly glass towers that would be compatible with the surrounding area. Both envision connections to the Earle Brown Heritage Center. Unanswered from both proposals is whether those connections would be at EDA or developer expense. Questions that the developers should address before the EDA include: - actual commitment of Franchisor (Radisson or Crowne Plaza) - actual financing commitment. The primary differences between the proposals lie in the following areas: 1. Market value for tax purposes • Crowne Plaza ■ $13,945,000 • Radisson ■ $23,000,000 2. Water Park/Aquatic Center o Crowne Plaza: Aquatic Center ■ 15,000 square feet • EDA or City owned & operated ■ Substantial EDA cost of construction (developer proposes usin g $500,000 developer contribution $1 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 www. cityo fbrooklyncenter. org developer TIF contribution, and $2,639,490 EDA bonds for • balance o Radission: Water Park ■ 27,000 square feet ■ Developer owned, constructed, and operated The general impression from the materials submitted would indicate that the Radisson team has compiled more market data in a comprehensive market study and is further along in development of their concept and planning. In fairness to the Crowne Plaza team, the Radisson developers have been working on this for a substantial period of time. However, the Radisson proposal is for a more substantial overall development. There is functionally no water park associated with the Crowne Plaza proposal since the EDA and City would not be in a Dosition to finance and overate a water Dark. The staff recommendation would be to direct us to negotiate a development agreement with the Radisson group that would provide obligations to: 1. Construct not fewer than 200 rooms no later than December, 2004 and open no later than April, 2005 2. Agree to a market value for tax purposes not less than $23 Million 3. Construct and operate an attached water park of not less than 27,000 square feet 4. Arrive at an agreement for a connection of the Earle Brown Heritage Center to the hotel 5. Provide final commitments or agreements for the Radisson franchise and financing 6. Pay not less than $2,165,000 for the property, which would be deferred until the property is sold or 15 years after opening, whichever would occur 1" 7. Issuance of General Revenue Bonds for the project (solely obligations of the developer from the project and not obligations of the EDA or the City). We would also recommend that a framework for such negotiations target the development of an agreement for EDA consideration by August 18, 2003. • EDA Presentation Ma 26 2003 y Hotel Development Proposals �� _ a '� �, Q � �� e�" ��_ a � �� !i Am�1 ^' AI � e _ �� m� � '� #�!AA �1 :vs iY if If I I I a I Alif Q. URN "M 77 NUNN �� imam" urn 77, —77 —*07, ,� �� t Aille I� �e� 4 Jv . . . . . . . . . . . 1011M RMS T IVELOICEILY1 ! 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E, r / � �. ccz z 9 MTI.R. i" Ile elf! wl > :'ea?t%rtfr ?? ^�¢ tw` j i � 1 �'`r, a, � �, '�� f.�•x' ,i �'�.�' // � � I ! , r U bAhN IL G BARN li BARN � � � "� w t '` - � 7 7 - 77 -4 L D BARN w 4 'HOTEL- o , o . ......... SERVIC�PELIVMY �W P—J! k . ...... c;4 z T 11 7 711 71, LINK PLAN Z Z. EL .. . .. .... . ... 0 say f7l, CC) HOTEL. . . . ....... WY IN ,.KEY PLAN TYPICAL ELEVATION - A a SERVICEOSLAsy "I Ifi, hfS 11 t1k ...... .... .. PEDPSINIAN I-INK ss '�� Qm�, � � �rj a� � V � rl� w rr.:.v..., hz Fm 01 Z� H" "HOTE, 0 "260 _0 7- LLJ �'. RV � N '6 d. A ERSUDES . . . . .... ........ w; � _ s�� %�4. ' . ,�� . � - �t.r � ' � - VAC-i:E, 'LY + ef ; .f � ; �^I � L.l -•2 : � ., t�� ? 4 . .�'� °� �� _� +R�.P �� •.y 3 ---ncv Fvent Center Con r 30 P A tr ' z o 10 0 ION 0% • vv N TE PARK HOTtW 1-T ENTR'N r N Fir W Il n. R.j�t, LO" I.At to.N 563�,',-Wq P roposal Compari &V'11�1_1, . . . . . . . . . . . . . . • Radisson • Crowne Plaza — Principals — Principals • Kent Oliver Cognoscente L.L.P. (J. Livingston) Comtem Development (J. Noble) * Intercontinental — Mana g ement of — Management of property property • OH Hospitality Inter - Continental • Proposal Comparisons A 'A • Radisson Crowne Plaza — Number of Rooms — Number of Rooms • 200 250 (includes 10 at Inn) — 120 Double — 75 Doubles — 60 King — 163 King — 10 Double w/ Parlor — 2 Suites — 10 King w/ Parlor — Building Height _ g g Building Height • 7 Stories • 6 Stories — Market Value — Market Value • $21 Million $13.9 Million Prop osa omparisons IV • Radisson Crowne Plaza::': z r: — Amenities — Amenities • Business Center • Business Center • Full Service Restaurant • Full Service Restaurant — 150 seat linen, — Franchise such as upscale Alamo Grill • Bar • Bar • Conciege — Market ' Study — Market Study • Submitted None submitted Prop osal Radisson • Crowne Plaza v Subsidy Request — Subsid y Request uest • Tax Increment write Tax Increment down of 5 years - $300,000 Hotel - $1,150,000 Aquatic • Waiver of SAC charges $160,000 (Aquatic) • Waiver of building permit fees $100,000 Aquatic) Proposal ROM "" • Radisson Crowne — Bonds — Bonds • General Revenue Bonds • General Revenue for Hotel • EDA Revenue Bonds for Aquatic Center Proposal • Radisson Crowne Plaza — Water Park — Water Park • 2700 Sq. Ft. • 1.5,000 Sq. Ft. • Developer owned & • City owned & operated operated • Free use by Hotel Guests • City EDA pay majority of construction costs — Payment for Land Payment for Land • $2,165,000 • $2,000,000 net • Deferred until sale • Deferred 15 years P ro osCo ari.s. r � Radisson Pla • Crowne z a — Exterior — Exterior • Extensive Glass Extensive Glass — Connection to EBHC — Connection to EBHC • Yes Yes • Funding ? Funding ? Pr oposal Svervzew r,p. ,a. s.. MAI w k .t .' Radis s o n Crowne Plaza Minimum Market Value $23,000,000 $13 1 945 2 000 Subsidy taxwrite down for 5 years $300,000 Hotel I $1,150,000 Aquatic Land Payment $2,165,0001 I $2,000,000_ Deferral of Land Payment Until Sale 1 115 years Water Park or Aquatic Center 2700 Sq. Feet 15000 Sq. Feet Owner /operator of Water Amenity Developer EDA or City I Market Study Yes (No Hotel Rooms (exclusive of Inn) 2001 1 240 Waiver of Fees No I IYes Aquatic Bonds General Revenue (General Revenue & EDA aterior Materials Predominantly Glass JPredominantly Glass Franchise Level Upscale I IUps cale ' Market Study 1 1 1 RADISSON HOTEL BY CARLSON Brooklyn Center, Minnesota 1 1 1 Prepared by Jack Prill, MSA Commercial Appraisal & Consulting Group ' 2400 Prior Avenue North Suite 101 ' Roseville, Minnesota 55113 ' Comments and conclusions made in this review are subjective opinions based on time spent on research and study of the subject site. It is not the intent to make any representation or guarantee, expressed or implied, as to the accuracy or the completeness of any of the information contained within. 1 1 SECTION 1 Introduction SECTION 2 Market Overview ' SECTION 3 Site Analysis SECTION 4 Brand Affiliation SECTION S Production Description SECTION 6 Competitive Analysis SECTION 7 Marketing Strategies ' SECTION 8 Financial Projections SECTION 9 Appendix A — Site Photographs � 2 I SECTION 1 INTRODUCTION 3 ' PROPOSED HOTEL DEVELOPMENT — BTOOkly_ n Center. Minne_ snta INTRODUCTION Background In July 2000, the City of Brooklyn Center expressed a strong desire to have a full - service hotel built in Brooklyn Center to support and accommodate their growth, development goals and local events. Cambridge Commercial Realty, O -H Hospitality and City of Brooklyn Center met with key people to determine initial feasibility of this idea. Cambridge Commercial Realty, O -H Hospitality, and City of Brooklyn Center then agreed to explore the development of this new hotel, its feasibility and funding sources to support it. ' Financing Through the efforts of Cambridge Commercial Realty and O -H Hospitality working with national investor contact and local investors, a plan requiring 30% equity investments was proposed for development of the hotel. This equity was recommended as a minimum by financial institutions and is a hotel industry standard for a hotel of this 1 size. The enclosed study describes a 200 -room hotel with a 28,000square foot water park. The current plan is that the managing "general" partners for this hotel will be a Limited Liability Company called Brooklyn Hotel Partners, L.L.C. The people who own Brooklyn Hotel Partners, L.L.C. will form the overall management team which will assist with investor coordination, design and construction, hotel management, hotel sales, marketing and operations management. The initial investors in Brooklyn Hotel Partners, L.L.C. will retain 100% of the ownership and will finance the capital costs, first year operational costs and all reserves. These costs are estimated to approximate $23,400,000.00 excluding land, extra soil preparation costs, utility connection fees, other city fees, and the cost of structure connecting the hotel and conference center. In order to attract financial institutions to finance (loans, bonds, etc.) construction and all start-up costs, the Brooklyn Hotel Partners, L.L.C. ' must assemble up to 30% of the project costs as equity. The plan is to assemble equity of $7,020,00.00 of equity to assure the success of funding professional and design services, owners' expenses, construction, furnishings, fixtures, office, operational expenses, supplies and pre- opening expenses. The partners in Brooklyn Hotel Partners, L.L.C. will be entitled to the appropriate pro -rated percentage share of after -tax net profits. The partners have expressed the desire to not re- capitalize or obtain any additional funds for the hotel during construction, opening or operations. This may not be needed, but if it is, this responsibility will be assigned to the partners. Schedule Brooklyn Hotel Partners, L.L.C. in preparation for acquiring the site and construction workforces this year has agreed to execute an agreement with the current landowner for the acquisition of the land. Closing and financing of the purchase can be culminated within 180 days, and construction can begin immediately thereafter. Opening is scheduled for 2004, but there may be good reason, if desired by owners and management team, to open in March of 2005 to take advantage of the seasonal traffic and business customer base. Design ' This hotel is a prime candidate for becoming a Radisson Hotel. The development team has obtained their design standards and the architect is ready to begin site planning and preliminary drawings. The current plan is to orient the building on the northeast corner of the site to give it maximum visibility from the highway and exit ramps off Interstate 694. 4 PROPOSED HOTEL DEVELOPMENT — Brookly_ n Center. Minnesota INTRODUCTION Management The team of Cambridge Commercial Realty and O -H Hospitality will be the team delivering the project. Their combined 150 years of national experience in hotels, motels, hospitality, restaurant and commercial real estate bring a very high level of expertise to all aspects of project delivery. Their expertise includes financing, investor relations, design, construction, purchasing, hotel management, recruiting and a sales and track record of sustaining success that most hotels never achieve. This team is a professional group specializing in this type of project. Local Support Unique to this project is the enthusiastic local business support of the idea of having a new full service hotel and ' water park attached to the Earle Brown Heritage Conference Center located in Brooklyn Center. Local businesses, landowners, neighbors, and the community in general have voiced a desire to have this hotel opening as soon as possible. This kind of support is unusual for a community and will help support success on a long -term basis. The addition of a full service hotel is viewed as a major asset to the Earle Brown Heritage Conference Center. It gives the Earle Brown Heritage Conference Center the ability to attract a new level of client to the facility, which can improve its position in the conference, meeting and convention market. The local chamber of commerce, city employees, and Earle Brown Heritage Conference Center will be asked to join us in a "Hotel Development Team" to assist us, the developers, in bringing this hotel complex to fruition. Scope of the Study The scope of the work included, but was not limited to the following: i ■ An examination of the site characteristics of the proposed hotel in regard to attributes such as visibility, accessibility, appeal to travelers, and proximity to primary demand generators; ' ■ A review of selected economic and demographic factors affecting the current and future market potential of the proposed hotel and water park; ■ Interviews with key representatives of commerce and industry to determine the degree of acceptability and the need for the proposed hotel; ■ Research pertaining to the identification of the existing and planned lodging which are believed to be competitive with the proposed subject; ■ Review of the type and style of facilities envisioned that will accommodate market demand now and in the foreseeable future•, ■ An estimation of the future needs for lodging accommodations in the market area based on the present and anticipated future supply of lodging rooms and the estimated market demand. ■ An estimation of occupancy levels and average room rates that the proposed hotel is anticipated to achieve for its initial ten full calendar years of operation; and ■ The preparation of the report summarizing the findings and conclusions. Primary Assumptions The objective of this study is to determine preliminary feasibility of lodging development in Brooklyn Center, Minnesota. Projections are based on certain assumptions and the interpretation of evolving events that are inherently subject to uncertainty. There were no attempts to ascertain legal, zoning, regulatory, license, permit and ' signage or related approvals. 5 PROPOSED HOTEL DEVELOPMENT — Brooklvn Center. Minnesota INTRODUCTION The conclusions and estimates in the report are based in part, on the following assumptions: ■ The actual facility will not vary significantly from the description outlined in this report. ■ The hotel will be affiliated with Radisson Hotels by Carlson and will be operated by competent and professional management. ■ The assessments of the economic environment of the market area and growth demand for lodging will be realized. ■ Additions to the supply of the competitive rooms in the lodging market will not differ significantly from the 1 estimates contained in the analysis. ■ The proposed Radisson Hotel by Carlson will contain facilities and amenities similar to those outlined in this report. Should some of the assumptions not materialize, the occupancy and average daily room rates estimates could be materially affected. 6 George Hovland III 3319 Greysolon Rd Duluth, MN. 55804 (218) 724 -5422 ' Professional — -- Experience: OH Hospitality. Duluth. Minnesota 1998 to Present, Managing Partner * Responsible for the operations of 10, fidll and limited service hotels, in .Minnesota t and Wisconsin. * Assisted in the Design, Construction & FF &E Purchasing of the 84 Room Holiday Inn Express Motel, & Suites and the 30 timeshare suites at The Suites Waterfront Plaza. * Assist in the creation, implementation and review ofannual operation budgets. * Create and implement Corporate /Cooperative Sales & Marketing programs. ' * Cash Management of over $15 million dollars of'annual sales and expenses. * Creation ofall company wide proforma projections. * Communicate to Hotel owneri's on all operational issues * Maintain accounting records for O.H. Hospitality. A. /P cat AIR Hawthorn Suites. Duluth, Minnesota 1998 to 2000 General Manager Assisted with opening 107 -room suite hotel * Prepared initial start -up operating budget * Exceeded Banks 3 year reveniie%cctapancy projec•tion,s after first year of operation * Created/Itnplemented marketing program which received a 18 to I ROI * Alaintained an average NOI of 46 * Received a 99.2% approval rating on Hawthorn Suites Comment Cards * Scored 499 out ofa possible 500 points on US Franchise OA. Inspection * Voted 1999 General, Manager of the Year By Hawthorn Suites Franchise * Manage day to day operations of hotel * Created cooperative advertising; campaign with local. Restaurants Best Western Chaska River Inn & Suites, Chaska, Minnesota 1997 -1998 General ,Manager * Increased ADR over previous year by 57.00 * Increas-ed Occupancy over previous year percen rage by 21 Yo * Increased NOI rn)er previous yeor by 14 * Decreased labor over previous year by 12% ,_Scored 1000 out of a possible 1000 points on Best Western OA Inspection * Created /Implemented Preventive Allaintenance Program * CreatedlImplemented OSHA program for all departments ' Zenith n ent a 7 n :th M a er rPt1�.2.1IJ', ulu tlr,Mtnnesota (1992 - 199 ) Frampton Ian, Tucson. Arizona (1996 -1997) General a r * Assisted in opening 92 - room hotel including mass employee hiring /training * Exceeded budgeted NOI by 10% * Assisted in purchasing /installinp of all. F.F & E products * Prepared initial start -up operating budget * Implemented hotel procedures and operating policies * Administered daily revenue & accountingJ4inetion.s for processing by core. office * Managed accounts pgvable /receivable * Performed outslde sales calls * Createdlimplemented adveritong and promotion programs * Performed daily quality assurance reviews to exceed Hampton Inn standards Professional Black Bear Hotel and Casino. Carlton- Minnesota (1996) Zenith Management Experience: Managemen Consultant (Co * Assisted owneriResewnt,'on .$zesiness Council with restructuring operational .systems and personnel management associated with new 158 room hotellcasino * Increased monthly profi ts by $.150, 000 through modifications ofprocedures, improving cost analysis of labor, purchasing and Increasing occupancy and A.DR v * .Trained General Adanager. Director of Sales, Front Desk Manager, Fxecutive Housekeeper, Maintenance Engineer and Security Supervisor on proper operating procedures and cost analysis t * Redesigned income statement to improve cost analysis Best Western Edgewater, Duluth, Minnesota (1991 - .1995) Zenith Management Guest, Services Manager • Managed front desk operations for a 283 room, high occupancy hotel • Hired and trained 35 employees for front desk hell staff & conference setup ' * Prepared budget prgfile.s for front desk, hell ,staff and conference set staff * Monitored and adjusted staffing levels of optimum productivity and guest services * Monitored Prapen> i Management System to insure optimum yield management * Supervised group_1i4nctions and banquet setups Yllage Resor Inc. - Breckenridge. Colorado The Inn at Keystone, Village Resorts Inc.. Keystone Colorado (1990-1991) Rooms .Divisi_o anape * Supervised front desk,, housekeeping, maintenance, concierge and gift shop Oversaw yield management ofa 102 roam hotel/176 unit condominium complex Prepared operating budgets fir front desk, housekeeping and maintenance * Provided monthly operating statistics to company and condominium association * Assessed maintenance needs,lrequircments,for condominium association * Assisted in the development/implementation of hotel policy and procedures l Lake Pro nQrties Inc., Cross ville. Tennessee. (1986 -1990) Fitgcr's on the Lake, Duluth, Minnesota (1989 -1990) ' ¢ssistartt General Manager * Assisted in the daily operations and property management for a 75, 000 square foot historic facility containing a 60 room inn, 3 restaurants and 30 retail stores ' * Managed hotel and restaurant operations,f or company owned leases * Prepared budget profiles and cash flow projections for hotel, restaurant and lounge * Implemented new marketing programs which increased mall tenants sales by 10° /n * Decreased (.4M charges by Implementing value engineering and restructuring existing contracts and personnel * Conducted lease negotiations with new and existing tenants ' Education: Duluth Business University, Duluth, Minnesota Associates of Arts Degree in Business Management VhiversioJ of Minnesota Duluth Business Administration ' Associations: * Board of Director: Duluth Convention and risitors Bureau * Duluth Economic Development Committee Member Awards: *General JYlanager of the Year -U.S. Franchise (1999) * Quality Excellence Award -500 out of 500 QA Score (1999 -2001) * Most Improved Hotel. - Carlson Company /Country Inn & Suites (2000) * Sales Growth Award- Carlson Company /Country Inn & Suites (2000) Iforel. Franchise Affiliations: Hawthorn Suites, Holiday Inn. Holiday Inn Express, Country Inn & .Suites. 1 gvil Inn, Econolodge & Best Western i 1 1 Scott S. Tessier ' District Manager. Residence: O. H. Hospitality, LLC 4611 Otsego Street 215 North Central Avenue Duluth, MN 55804 Duluth, MN 55807 218525 -2296 218 -628 -2822 / Cell Phone: 590 -2423 HOSPITALITY INDUSTRY EMPLOYMENT HISTORY: O. H. Hospitality, LLC 215 North Central Avenue Duluth, MN 55807 218- 628 -2822 District Manager: Econo Lodge Miller Mall/Airport, Duluth, MN - 88 room L.ixni.ted Service Airport/Suburban Days Inn, Eveleth, MN - 145 room Full Service Corn.vention/Leisure The Lodge at Giants Ridge, Biwabik, MN - 92 room. Full. Service Resort /Conven.,ti.on. Days Inn of Baxter, Baxter /Brainerd, MN - 59 room Limited Service Highway /Golf Leisure My role as the District Maaiager for 0. i i. Hospitality is to oversee the overall operations of the ' above mentioned properties. Eacb property does have their own General Manager on property to oversee the daily operations of the property. I communicate directly with the General Manager of the property to offer direction in the daily operations. My corporate office functions are as follows: *Direct reporting of all operational issues to the property Owner. *Marketing of all properties on an individual and cooperative level through O_ TI. Hospitalities Marketing Program. *Budgeting and Budget Review for all properties. *Overall, expense control. *Coordination of all Capital Improvements, Capital Expenses, and Construction Projects. *Corporate Level com..munication between Brand. Franchises and the individual properties, r r Zenith Management Company ' 350 Canal Park Drive Duluth, MN 55802 218- 723 -8433 General Manager: The Tnn on Lake Superior, Duluth, MN - 102 room Upscale Limited Service Opened as a new property in 1996. Responsible for on -site construction and overall operational set up of the property prior to opening. Complete hiring and training for 40 -r Staff associates prior to opening. Continued on as General Manager of the property until 1999. Days Inn, Lawrence, KS - 112 room Full Service Suburban /Golf Leisure Best Western Metro Inn, Nashville, MN - 156 room Full Service Highway ' Consultant: Black Bear Hotel & Casino, Carlton, MN - 156 room Limited Service Casino/Leisure Opened as a new property in 1995 Responsible for on -site construction and overall operational set tip of the property prior to opening. Complete training of 65+ staff associates prior to opening, Continued on as Consultant until 1996 and later moved on to The inn on Lake Superior project. Assistant Manager: Best Western Edgewater Motels, Duluth, MN - 283 room Limited Service Convention /Leisure ** �******* ww*+ tw+* wwsrwwwwwww *w *ww *wwwww�wwrr�ra+. Holiday Inn Metrodome 1500 Washington Avenue South Minneapolis, MN 55434 61.2- 333 -4646 ' Guest Services Manager: Holiday Inn Met7odome, Minneapolis, MN - 256 room Full Service Convention /Corp(.Leisu.re Holiday Inn 207 West Superior Street Duluth, MN 55802 ' 218 -722 -1202 Guest Services Manager: r Holiday Inn, T-)ulutb, MN - 242 room Full Servicc Con.vciil:ion /Corporat:e /L eisurc *,4*A * *�r/r,V -kA *M 4 4.L4 *k 4 *i4w 4wi✓eww wwwie *www* 1 1 1 I r SATES EXPERIENCE: Twin Ports Paper & Supply Company P pP Y any p 4223 Airpark Drive Duluth, MN 55811 218 - 722 -6547 ' Krenzen Indoor Auto Mall 2500 Mall Drive Duluth, MN 55811. 218 - 727 -2905 1 t 1 i 1 1 1 1 1 1 1 BRENDA A. WITTE ' 5718 Olney Street Duluth. MN 55807 (218) 621 -9372 OBJECTIVE; A. challenging position that will utilize my skills with opportunity for advancement. ' SUMMARY OF QUALMCATiONS: Organized professional with a view to improving customer satisfaction and bottom line results of an organization. Demonstrates ability to work effectively under pressure and within time constraints. Excellent customer relations with both clients and employees easily gaining respect and cooperation. Enjoys challenging opportunities. PROFESSIONAL EXPERIENCE: District Sales Manager (May 2000 to present) O.H. Hospitality L.L.C. - Duluth, MN Purpose: To increase profits by accelerating hotel sales and generating business through aggressive sales efforts. Direct sales calls introducing products and services to all market segments. • Ma.intain strong relationship with the Duluth Convention & Visitors Bureau and the Duluth Entertainment Convention Center in an effort to market and promote SUrrounding area. I Maintain rapport with clients and contacts in order to produce association /convention, corporate, government and group business. • Develop high visibility in the hospitality community and surrounding area. • Assist/train hotel property Sales Managers /General Managers so they can effectively market and sell their product and services, in addition to providing sales leads for follow -up. • Participation in various trade shows and professional education conferences. Convention Sales Manager (March 1999 to April 2000) Duluth Entertainment Convention Center - Duluth, MN • Aggressive sales efforts to increase convention sales. .Active participation in trade shows and professional education conferences statewide and also on a national level. • Created and implemented lead campaigns in an effort to generate new convention business. • Maintained close relationship with the Duluth Convention & Visitors Bureau while working ' together to promote the area_ • Prepared detailed bid proposals and conducted facility tours to prospective convention groups. • Prepared monthly sales report for Roard of Directors meetings. Sales Manager (May 1997 to March 99) Hawthorn Suites at Waterfront Plaza - Duluth, MN • Involved with opening procedures of hotel. • Assisted General Manager in the creation of the annua.) Marketing Plan. • Aggressive sales calls introducing product to the corporate market both locally and statewide. • Preparation of bid proposals as requested by the Duluth Convention & Visitors Bureau. • Accurate account of outside sales calls and telephone calls along with the preparation of monthly reports. • Knowledge of and selling of all product lines of hotel. Sales Manager (September 1991 to May 1997) Canal Park Jnn - Duluth, MN • .Direct sales calls to tour operators and corporate market. 1 Promote and coordinate banquets and meetings on site. • Assist with familiarization tours for fixture business. • Represent hotel at lodging shows. • Assurc guest satisfaction. Page 2 BRENDA A. WITTE OTHER EMPLOYMENT; Consumer Loan /Student Loan Representative Western National Bank - Dulutih, MN Bookeeper Saw -Mill Unpainted furniture - Dultuh, MN PROFESSIONAL MEMBERSHIP, Meeting Professionals International (MPJ), Minnesota Chapter Midwest Society of Association Executives (MSAE) ' EDUCATJON: Duluth Technical College - Duluth, MN Accounting Hermantown High School - ilermantown, MN I I QUALIFICATIONS r Jack Prill, MSA Certified General Real Property Appraiser #4001494 National Association of Master Appraisers #8312 T es of Appraisals QP raisals Experience includes appraising and financial analysis of many types of commercial real estate including: Warehouses Manufacturing Plants Shopping Centers Supermarkets Office Buildings Truck Terminals Apartments Discount Department Stores Medical Buildings ' Post Offices Churches Greenhouses Hotels Research and Development Buildings Restaurants Auto Washes Auto Dealerships Sub - Divisions ' Appraisals of Special Interest A small sample of specialized appraisals includes: IDS Center, Minneapolis, MN American National Bank Building, St. Paul, MN Brandon Mall, Brandon, Manitoba Central National Bank Building, Des Moines, IA Kennedy Mall, Dubuque, IA Glen Pond Estates (300 Unit Apartment) Eagan, MN Murphy Mart Center, Youngstown, OH Grant Park Plaza Shopping Center, Winnipeg, Manitoba ' Governor's Square, Columbus, OH Ridgedale Shopping Center, Minnetonka, MN Five Lakes Center, Fairmont, MN Giants Ridge Hotel, Biwabik, MN Hawthorne Suites Hotel, Duluth, MN Country Inn & Suites, Hastings, MN Business Experience ■ Commercial Appraisal & Consulting Group - Owner. ■ Senior Commercial Real Estate Appraiser, Forsythe Appraisals, Inc. ■ The Equitable Life Assurance Society of the United States, City Mortgage Department from 1964 to 1972. Completed Equitable's formal two -year training program in commercial real estate finance, construction, and appraisal; and subsequently headed the appraisal staff in the Minneapolis office. Education University of Minnesota, B.A. English Specialized Education "Fundamentals of Real Estate Practice ", "Real Estate Law", and "Real Estate Appraisal ", 1965 University of Minnesota, "Real Estate Appraisal I" Indiana University, 1968 and "Real Estate Appraisal II ", University of Missouri, 1968, sponsored by the Appraisal Institute. Accredited Real Estate Schools, Minneapolis, Minnesota: (Continuing Education) "Investment Analysis," "Syndication for Profit," and "Legal Documentation," 1984; "Commercial & Industrial Financing," r "Condemnation Valuation," "Financial Concepts,' "Investment Property Sales Analysis," 1987; "Introduction to Small Business Sales," "Investment Cash Flow Analysis," "How to Put Together a Real Estate Exchange," "Real Estate Investment and Taxation," "How to Put Together a Real Estate Syndicate," "Business of Real Estate," 1990; "Condemnation and Tax Appeals," "Financing with Contract for Deed," and "The Power of Appraisals," 1991; "Intro to Standards & Ethics," "Fair Housing," and "Advanced Yield Capitalization," 1992; "Obtaining Market Data by Abstraction," "Direct Capitalization," "Discounted Cash Flow Analysis," "Retail and Shopping Center Trends," "Appraiser Licensing and Certification Issues," 1993; "Appraisal Standards & Regulations," "How to Avoid Environmental Hazards Liability," 1994; "Expert Testimony," "Contract for Deed ", and "Real Estate Closing," 1995; "Special Purpose Properties," and "Hotel /Motel Valuation," 1996; r "Real Estate Exchanges," "Real Estate Practice Update" 1997; "Minnesota Real Estate," "The Farm Sale," 1998; "USPAP Update," Energy Efficient Housing," 1999; "Environmental Issues affecting Real Estate," 2000; "MN Building Codes," 2001; "Appraisal Standard and Ethics ", 2002. r SECTION 2 MARKET OVERVIEW Hennepin County Anoka County Brooklyn Center Neighboring Communities 7 H z o °° U O A z a w z w x Minnesota Community Profile Page 1 of 9 The MN Department of Trade and Economic Development Community Profile for —Trade & — Brooklyn Center DeMWrmt www.dted.state.mn.us Shwo__Map o Overview Although largely developed, Brooklyn Center continues to attract new businesses. Within the past two years, the City has ' experienced unprecendented growth in its business sector, in no small part due to its attractive location and healthy economic climate. Affordable housing in a strong housing market, quality schools, family recreational opportunities and community spirit all contribute to attracting hundreds of new residents yearly. ' Location County: Hennepin Region: West Twin Cities Metro Distance from Minneapolis: 9 Distance from nearest MSA *: 0 Miles from Minneapolis -St. Paul MSA US Congressional District: 3 MN Legislative District(s): 46B .. Web site: N/A Last Updated: 9/3/2002 Population Area 2003 Estimate 2002 Estimate 2001 Estimate 2000 Estimate 2000 Census 1990 Census Community: 29,180 29,172 29,172 28,887 County: 1,114,977 1,116,200 1,116,200 1,032,431 ' Nearest MSA: 2,968,806 2,968,806 2,538,776 Minnesota: 4,972,294 4,919,479 4,919,479 4,375,099 Source: U.S. Census, State Demographer *Metropolitan Statistical Area Major Employers ' Employer NAICS Products /Services Employee Count View All Emplovers i Workforce Source: MN Department of Economic Security 2000 Hennepin County Hennepin County & Minneapolis -St. PauIMSA Adjacent Counties Total Employment 651,568 1,477,318 1,658,354 Available Workforce 664,198 1,506,575 1,695,741 ' Annual Average Unemployment Employment By Industry Hennepin County Minneapolis -St. Paul MSA Hennepin County & h : / /www.mn ro.com/detail .as 4/3/2003 ttr r r r Minnesota Community Profile Page 2 of 9 Adjacent Counties Agriculture 3,431 7,681 N/A Construction 27,317 59,185 72,026 ' Finance, Ins., Real Estate 81,892 116,842 127,147 Government 82,624 178,415 231,278 Manufacturing 122,701 294,125 277,026 ' Mining 77 386 535 Retail Trade 140,242 263,673 298,107 Services 268,238 444,119 502,311 ' Trans., Comm., Utilities 55,076 83,328 93,850 Wholesale Trade 63,458 98,789 101,836 N/A -No Data Available ' Occupations and Wages in Twin Cities Region Job Title Wage /Hr Job Title Wage /Hr Accountants & Auditors $18.10 Machine Feeders & Offbearers $10.08 Assemblers & Fabricators $10.91 Machinists $15.28 Automotive Body & Related Repairers $16.37 Maintenance Repairers, General Utility $13.41 Bookkeeping, Accounting, & Auditing Clerks $12.11 Offset Lithographic Press Setter /Operator /Tender $17.45 Combination Machine Tool Setter /Operator /Tender $14.35 Packaging & Filling Machine Operators & Tenders $9.96 Computer Programmers $22.63 Plastic Molding & Casting Machine Set /Oper /Tend $12.28 ' Computer Support Specialists $17.88 Receptionists & Information Clerks $9.84 General Managers & Top Executives $32.55 Sales Representatives $20.36 General Office Clerks $10.89 Secretaries, Except Legal & Medical $12.72 Hand Packers & Packagers $7.69 Systems Analysts, Electronic Data Processing $27.15 View All Occupations and Wages Utilities Utility Type Utility Name Utility Phone Contact Contact Phone Electricity Northern States Power Co (800) 642 -6066 Ken Stabler (612) 330 -5834 Natural Gas Minnegasco (800) 269 -1114 xxx (612) 372 -4727 Wastewater Metropolitan Council Environmental Svc (612) 222 -8423 Jeff Syme (612) 229 -2109 ' Water Brooklyn Center Municipal (612) 569 -3300 Dave Peterson (612) 569 -3380 Water Information Wastewater Information ' Water Source: Wells Treatment Type: Mechanical Plant Storage Capacity: 3,000,000 gal. Capacity of Plant: 250,000,000 gal. /day Pumping Capacity: 10,700 gal. /minute Average Demand: 226,000,000 gal. /day Average Demand: 2,500,000 gal. /day Peak Demand: 600,000,000 gal. /day Peak Demand: 10,000,000 gal. /day Usage Charge: No base chg.; $1.32/1,000 gal. ' Total Water Hardness: 20 ppm Industrial Water Rate: No base chg.; $.86/1,000 gal. Communications Telephone Information Local Telephone Company: US West Communications ' Telephone Number: (800) 603 -6000 ' 4/3/2 03 http : / /www.mnpro.com/detailp.asp 0 'Minnesota Community Profile Page 3 of 9 Contact: Karen Jothen Telephone Number: (612) 663 -5675 Digital Central Switch: Yes ' Equal Access Market: Yes Extended Area Service: Yes Custom Calling Feautures: Yes ' Customized Local Area Services: Yes Current Technologies: ISDN Internet Service ' Local Public Internet Access Site: No Multiple Internet Service Providers: No Speed of Service: DTED Certification as E- Commerce Ready: No Newspapers Information Newspaper Name Telephone Frequency Minneapolis Star Tribune (612) 673 -4000 Daily St Paul Pioneer Press (612) 222 -5011 Daily Additional Telecommunication Providers Telecommunication Type Provider Name Phone Commercial Transportation & Shipping Highway Information ' Interstate Miles From Community Load Limit in Tons Seasonal Limit In Tons I -494 3 I -94 Within ' Four Lane Miles From Community Load Limit in Tons Seasonal Limit In Tons MN -100 Within MN -252 Within US -10 1 ' Other Miles From Community Load Limit in Tons Seasonal Limit In Tons CO -57 1 Truck Information Truck Lines: 334 ' Truck Terminals: 30 Navigable Water Information Water Name Depth ' Rail Information Inter -Modal Facility: No Inter -Modal Facility Distance: 1 miles Rail Line Frequency Reciprocal Switching Distance to Main Line Passenger Service ' Soo Line Monthly No No ' h : / /www.mn ro.com/detail .as 4/3/2003 � p p P 'Minnesota Community Profile Page 4 of 9 ' Air Service Information International Local Regional Name Mpls. /St. Paul Intl. Airport Crystal Airport ' Location Bloomington Crystal Miles to 17 3 Longest Runway Length 10,000 Feet 3,267 Feet ' Surface Type Paved Paved Lighted Yes Yes Customs Yes No ' Service Type Charter, Commercial, Freight, Jet Charter, Commercial, Freight Navigational Aids BEACON, DME, ILS, VOR/DME BEACON, VOR/DME ' Weather Info Systems AWOSA /MNWAS, SAWRS AWOSA/MNWAS, PUBLICTV Major Airlines American, Continental, Delta, Northwest, TWA, United Airlines, US Air ' Daily Flights To MSP- Minneapolis -St. Paul Intl.: ' Additional Commercial Transportation Providers ' Transportation Type Provider Name Phone Housing & Commercial Activity ' Housing Information Single Family Units: 8,307 Percentage Owner Occupied: 70 Multiple Family Units: 3,345 Median Sales Price: --- Mobile Homes: 41 Median Assessed Value: --- Number of Units Built Since Last Census: Median Rent: $509 Number of Residential Building Permits for: Vacancy Rent: 4 ' Value of Residential Building Permits for: Source: US Census, 1990 ' Commercial Activity Information Number of Commercial Building Permits for: Value of Commercial Building Permits for: Number of Public Building Permits for: Value of Public Building Permits for: ' Retail Sales Information Year Community Sales County Sales ' 1996 $354,120,805 $14,562,375,815 1995 $330,690,246 $13,202,824,376 1994 $330,450,371 $12,657,431,633 ' Source: MN Dept. of Revenue ' Business & Community Services htt : / /www.mn ro.com/detail .as 4/3/2003 r r r r i Minnesota Community Profile Page 5 of 9 Financial Institutions Information Name Phone Total Assets Capital as % of Assets Norwest Bk MN NA $15,453,887,000 7% Firstar Bk of MN NA N, 8.6% Marquette Bk NA U _'. $917,017,000 8.94% View All Financial Institutions ' Lodging & Meeting Facilities Information ' Facility Number of Facilities Facility Size Teleconferencing Teleconferencing Available Available Available to Public Hotel 6 550 rooms No No Motel No No ' Conference Center 1 2,015 rooms Yes Yes ' Additional Lodging & Meeting Facilities Facility Type Facility Name Phone Local Medical Facilities Information Facility Type Nbr of Facilities Total Nbr of Beds Telemedicine Available Clinic 2 No ' Dentist No Doctor No Hospital 0 No ' Nursing Home 1 No Name of Nearest Hospital (if none in community): North Memorial Hospital, Robbinsdale ' Miles to Nearest Hospital: 4 Additional Local Medical Facilities Facility Type Facility Name Phone Telemedicine Available Local Transit Information Service Available Service Available Inter - Community Bus Yes Taxi/Cab Yes Intra- Community Bus Yes Disabled Transportation Yes Local Transit Providers ' Transit Type Name Phone Disabled Transportation Care Van Disabled Transportation Metro Mobility Inter -City Bus Greyhound Inter -City Bus Jefferson ' Intra -City Bus MCTO Taxi/Cab Suburban Taxi Taxi/Cab Yellow Cab ' http : / /www.mnpro.com/detailp.asp 4/3/2003 Minnesota Community Profile Page 6 of 9 Library Information Name Phone Internet Access Hennepin County Branch Library Yes ' Metropolitan Regional Library No Worship Information ' Worship Type Worship Name Phone Membership ' Recreation Information Facilities Festival /Arts Service Organizations ' Education Post - Secondary Information ' Nearest Technical College & Specialty Location Miles To H Tech nical College Brooklyn Park & Eden Prairie 3 ' "Our college provides quality technical education needed for employment in an ever - changing, global work environment." Business and Computer Careers Construction and Building Careers Floral and Landscape Careers Health Careers Manufacturing and Electronic Careers Media Communication Careers Service Careers Transportation Careers ' Nearest Community College & Specialty Location Miles To Minnea Co and Technical, C ollege Minneapolis 9 The mission of Minneapolis Community and Technical College is to provide high quality lifelong learning programs. We ' offer academic programs that end in certificates, diplomas, and associates degrees. Many programs transfer to 4 -year colleges, and others prepare students for work. Nearest Public College /University & Specialty Location Miles To University of Minnesota Minneapolis and Saint Paul 9 ' Nearest Private College /University & Specialty Location Miles To Augsburg College Minneapolis 9 the College provides educational experiences and opportunities that transform theory into action and unite the liberal with the ' practical in preparing its students as leaders for service in a global society. ' Telecommunications Use Available at Area Post - Secondary Institutions: Yes Local K -12 Information ' School Type Nbr of Schools Enrollment Grades Pupil /Teacher Ratio Elementary 8 4,186 K -6 23:1 Middle School Junior High 2 2,150 7 -9 23:1 Senior High 2 2,358 10 -12 20:1 ' Private/Parochial 1 286 1 -8 16:1 ' htt : / /www.mn ro.com/detail .as 4/3/2003 P p P p 'Minnesota Community Profile Page 7 of 9 ' School District: Telecommunications Use Available at Local K -12: No High School Graduates Attending Post - Secondary: State Wide Average: 65% Education Institutions Education Type Name Phone ' Government Structure Information Organization: Council \Manager Budget: $25,000,000 Community Bond Rating: Moody's - - Al Comprehensive Land Use Plan: Yes Locally Controlled Loan Program: No Recycling: Yes Fire Insurance Rating: 5 ' Industrial Plans Approved By: City Building Official, City Council, Economic Dev Public Protection Services Service Type Regular Part -Time Volunteer Seasonal Fire 1 1 40 --- Police 58 16 --- - - - Sheriff - -- - -- - -- EMT - -- - -- - -- - -- Property Taxes Property Tax Information Assessed Market Value Information Municipal Tax Rate 36.05% Commercial $356,102,458 County Tax Rate 37.62% Residential $897,247,034 ' School Tax Rate 50.37% Other $17,048,297 Misc. Tax Rate 8.87% Total $1,270,397,789 Total Tax Rate 132.92% ' Minnesota commercial real estate taxes are based upon market value of taxable roe as set b the local assessor. To compute the tax for p property �Y Y p the year 2002, first compute the tax capacity by multiplying all property value up to $150,000 times .024, plus any value over $150,000 times .034. Tax capacity times the tax rate equals taxes owed. In some localities where voters have approved referendums, an additional referendum tax must be added, calculated by multiplying the referendum tax rate rimes the total market value of the commercial property. Net tax capacity on a $200,000 business: ($150,000 * .024) + ($50,000 * .034) = $3,600 + $1,700 = $5,300 ' Source: League of Minnesota Cities based on Minnesota Department of Revenue tax abstracts. ' Commercial Buildings and Land Sites Building Name Type of Building Contact Name Address Total Bldg Sqft Organization ' City, State Zip Code Total Available Phone Number Photo 16820 Shingle Creek Parkway II Industrial j1jef Minea II ' htt : / /www.mn ro.com/detail .as 4/3/2003 P P P p I Minnesota Community Profile Page 8 of 9 ' 6820 Shingle Creek Parkway 113,414 Welsh Companies ,Brooklyn Center, MN 55430 11 17,905 1 1_(612) 897 -7741 II I Broo To wers Office Barb Ankrum 5701 Shingle Creek Parkway 62,804 Cave & Associates, Ltd. Brooklyn Center, MN 55430 6,658 (651) 482 -9668 Earl Bro P laza Office Anna Murrav ' 6040 Earl Brown Drive 53,000 Results Real Estate Brooklyn Center, MN 55430 14,000 (377) 1212 Free Bus iness_Center 11 Industrial Eric Dueholm 6707 Shingle Creek Parkway 75,939 Northco Real Estate Services ' Brooklyn Center, MN 55430 28,078 (612) 820.1614 Free Bu siness Center IV Industrial Eric Dueholm 2700 Freeway Blvd. 78,741 Northco Real Estate Services Brooklyn Center, MN 55430 9,812 (612) 820.1614 Shingle Creek Parkway Industrial lEric Dueholm 6800 Shingle Creek Parkway 167,564 1(612) Northco Real Estate Services Brooklyn Center, MN 55430 21,000 820.1614 Young Buildi Industrial Shirley Young One block from Highway 169 3,840 ' Brooklyn Center, MN 55352 (715) 273 -5123 Land Site Space Available Contact Name ' Address Build To Suit Organization Photo City, State Zip Code Zoning Phone Number ' Economic Development Services Economic Development Authority: Yes Incentives Housing Redevelopment Authority: No County Development Corporation: No Chamber of Commerce: Yes ' Port Authority: No Contact Information Brad Hoffman Myrna Kragness Community Development Director Mayor Brooklyn Center, City of Brooklyn Center, City of 6301 Shingle Creek Parkway 6301 Shingle Creek Parkway ' Brooklyn Center, MN 55430 -2199 Brooklyn Center, MN 55430 -2199 , (612) 569 -3305 (612) 569 -3300 ' Economic Development Organizations Type Name Phone Fax Disaster & Emergency Services ' Name Phone Number(s) Public Safety em ry esou rces 1- 800 - 422 -0798 or metro 651 -649 -5451 F ederal Emer ncy M Agent Region V FEMA 312 - 408 -5500 Small Business_ Adm ,Disaster Disaster Area Offices 404 - 347 -3771 Resou ' h : / /www.mn ro.com/detail .as 4/3/2003 ttP p p p 'Minnesota Community Profile Page 9 of 9 ' Print Thi Page Copyright ©1999 -2003 Minnesota Department of Trade and Economic D All rights reserved. Information in this system is deemed reliable, but is not guaranteed. Read Full_ D - Contact Us r http : / /www.mnpro.com/detailp.asp 4/3/2003 PROPOSED HOTEL DEVELOPMENT — Brooklvn Center. Minnesota ' MARKET OVERVIEW ' Major Employers of Hennepin & Anoka Counties Employers Employee Employers Employee Count Count University of Minnesota 34,317 Wal -Mart 300 Dayton Hudson Corp. 22,600 Barborossa & Sons 300 First Bank Systems Inc. 14,725 Gannett Offset 300 Hennepin County 10,472 Hanson Concrete Products 300 Norwest Corporation 10,250 Wal -Mart 300 ' ( Grand Metropolitan Inc. 7,700 Park Construction 300 Honeywell Inc. 7,500 Parsons Electric 300 City of Minneapolis 7,500 Byerly's 270 Northern States Power Co. 7 Cub Foods 270 Hennepin County Medical Center 4,000 Unisource Worldwide 264 Independent School District #279 3 Wal -Mart 262 Scimed Life Systems Inc. 3,000 Minneapolis Auto Auction 250 Star Tribune 2,814 REO Plastics 250 Medronic Inc. 2,500 Tiller Corporation 250 US West Communications 2,100 Holiday Plus 250 Target 2,025 US West Dex 230 CP Wainman Pioneers - America 2,000 MedSource 225 Norwest Bank MN NA 2,000 Champps Americana 225 United Defense 1,800 Varitronic Systems 175 Onan Corp. 1,727 Wilson's 150 Unity Medical Center 1,400 Menard Cashway Lumber 150 ® Storage Tek 1,200 Home Depot 150 ■ ( United Parcel Service 900 TL Systems Corp. 140 Caterpiller Paving Products 519 Holiday Plus 250 Minco Products Inc. 500 Medtronic 420 Siemens Empros Systems 404 International LaMaur 400 Medical Arts Press 375 Recovering Engineering 375 Banta Catalog Mpls 350 Kurt Mfg. Co. 350 ` 1 Mc Glynn's Bakery Inc. 350 Meyers Printing Co. 300 9 O a w H z w U Z a � x O O � � � � � � � O � � � � � � 4 �� PROPOSED HOTEL DEVELOPMENT — Brooklyn Center. Minnesota ' MARKET OVERVIEW Attractions ' Earle Brown Heritage Center — Brooklyn Center The Earle Brown Heritage Center stands as a remarkable monument to civic pride and respect of a community for its roots. In 1989, the Earle Brown farm underwent a restoration and renovation as a meeting and convention complex. Completed in 4 .. 1990, the complex now includes 36,000 square feet of convention center; extensive " meeting and conference facilities; the Inn on the Farm, a 10 room bed and v ` ' breakfast Earle's a special occasion restauran • on -site catering facilities; and on- site parking for hundreds of cars. ' Brookdale Mall — Brooklyn Center - The Brookdale Mall is located at the intersection of Hwy 100 and Hwy 152 in Brooklyn Center MN. It recently underwent a $60+ million dollar renovation, creating an up -to -date mall for the north metro shoppers. ri. Heart Alive — Brooklyn Center - ' This facility is a meeting and conference center. Thunder Allev — Brooklyn Center This facility has the largest indoor go- karting raceway and meeting entertainment center. The tracks are set up for both adults and children. Meeting rooms are available with catering services. Points of Interest ' Centerbrook Golf Course — Brooklyn Center Centerbrook is located on 28 acres in the heart of the city. With its challenging nine -hole, par three layout, ' Centerbrook appeals to all level of golfers. Open to the public, Centerbrook offers open golf, organized leagues and golf tournaments. ' Banfill -Locke Center for the Arts — Fridley Brooklvn Park Historical Farm — Brooklyn Park Collings Fine Art Center — Brooklyn Park Islands of Peace Park — Fridley MegaStar Cinema — Maple Grove ' Rice Creek Trail West — Fridley Skateland Skate Center — Brooklyn Park tt i PROPOSED HOTEL DEVELOPMENT — Brooklvn Center. Minnesota MARKET OVERVIEW Overview of Brooklvn Center, Minnesota ' Located just nine miles north of the Twin Cities, the community of Brooklyn Center is nestled along the banks of the Mississippi River. Brooklyn Center has the "best of both worlds" with 522 acres of parks and nature preserves located near major metropolitan attractions, shopping and more. At the same time Brooklyn Center offers excellent public and parochial schools, civic and religious organizations, and a proud heritage that is celebrated each year with ' s the Earle Brown Festival. Brooklyn Center incorporates a forward- looking city government, strong business /civic organizations and a growing, diversifying economic base. Brooklyn Center, platted in 1868, was incorporated in 1911. ' 0 sse0 0 9 �`""��'" Offering excellent freeway access, infrastructure and business growth, Maple erookw A i d , Brooklyn Center is minutes from the activity and opportunity of trove ,a° = °ark F Minneapolis and the northwestern suburbs. ' )1 47 ilew Hope� Hamel - sass Laice 11 , w For years the suburbs north of the I -694 Corridor have grown at a slower ` pace than their counterparts directly south and west due to the lack of a H'. E N N P I N a 1 86 -- -! ' S5 ,81 189 100 2 "O Tnoutn " z° r't'a highway system with the capability to handle the growing traffic demands. Ti4Jn tak La This trend has now reversed with the opening of the new U.S. 10/1 -610 ke Medic B Lake' - z Goldsh '° , freeway extending northwest from I -35W ' LaBs e Isles O 2001 Micr�ft ro. All rights r resserved. 48 Demographic Indicators ' Population 2007 2002 2000 Census 1990 Census Projection Esti Age of Population Hennepin 1,153,795 1,126,037 1,116,200 1,032,431 ' County Age Percentase Anoka 328,445 306,403 298,084 243,641 0-4 7.47% County 5 -9 7.78% 1 10 -14 7.84% Population 2002 2007 15 -19 7.27% 20 -24 6.96% Forecast Estimated Proiection 25 -34 15.40% Anoka County 306,403 328,445 35-44 16.64% Hennepin County 1 19153,795 45 -54 13.54% 55 -59 4.42% ' 60 -64 3.17% Anoka & Hennepin C 65 -74 5.26% Census Fore 75 -84 3.31% 1990 2000 I 2002 2007 I 85+ 0.95% ' 1,276,072 1,414,284 1,432,440 1,482,240 Per Capita Income ' Sales Annual Gross Annual Gross $28,387 Sales _ Sales Brooklyn Center Median Household Income ' Total i Brooklyn Center Retail Sales $68,022 ' Year City Sales County Sales 2002 $1,286,150,432 $17,763,287,040 12 PROPOSED HOTEL DEVELOPMENT_ — Bro_ok]vn Center__ Minnesota. MARKET OVERVIEW Utilities ' Electricity Northern States Power Co. Natural Gas Minnegasco Wastewat _ Metropolitan Council Environmental Services Water Brooklyn Center M_ _u nicipal Communications Local Telephone Company I US West Communications Cable Television Time Warner Air Service Commercial Transportation Metro Bus Tr ansportation _ _ Metro Systems Various commercial cabs /taxis Suburban, Golden, and United ' Light Rail ( under con Federal, State & Local Governments Education ' Elementary (K -6) Garden Center, Evergreen Park, Northcourt, Palmer Lake Senior High (7 -12) Park Center Private/Parochial (K -6) Sain Alphonsu Catholic Medical Facilities Clinic Park Nicollet, HealthPartners, Frefnenius, Northcourt Medical Center Dentist River Road Dental, Brooklyn Blvd Dental, Mintaler Dental, Heritage Dental, Orthodontic Specialist, Associated Oral, HealthPartners ' Doctor See Clinics Hospital North Memorial Hospital, Northern Minneapolis ' Nursing Home Matrix Advocate Care Center Churches All Denominations Christian (22 churches), Synagogue — St Louis Park Public Protection Services Fire Fire Station East, Fire Station West Police Brooklyn Center Police Department ' Sheriff Hennepin County Sheriff Department EMT Brooklyn Center Fire Department (Paramedics) Newspapers ' Minneapolis Star Tribune Daily Pioneer Press Daily ' 13 NEIGHBORING COMMUNITIES I , I PROPOSED HOTEL DEVELOPM — Brooklvn Center. Minnesota ' MARKET OVERVIEW ' Overview of NeiLyhborin2 Communities Brooklyn Park Brooklyn Park is the sixth largest city in Minnesota and continues to be a rapidly growing second -ring suburb. This former agriculture community is only two- thirds developed and offers a wide range of commercial, industrial and residential development opportunities. The City provides excellent recreational opportunities ranging from an extensive park and trail ' system to a nationally recognized public golf course. Total Potential Retail Sales 1 City City Sales County County Sales Brooklyn Park $133,972,896 Anoka County $3,539,052,288 Demographic Indicators Population 2007 Projection 2002 Estimate 2000 Census 1990 Census ' Brooklyn Park 9,932 9,203 8,904 6,672 ' I Major Employers Employee Count _J Storage Tek 1,200 ' Target Corporation 1,200 Caterpillar Paving Products 519 Medtronic 420 Siemens Empros Systems International 404 Medical Arts Press 375 Recovering Engineering 375 ' Meyers Printing Co. 300 Wal -Mart 300 Umsource Worldwide 264 MedSource 225 ' Target 225 Varitronic Systems Inc. 175 Wilson's 150 1 TL Systems Corp 140 ' 15 ' PROPOSED HOTEL DEVELOPMENT — Brooklyn Center, Minneso MARKET OVERVIEW ' Maple Grove ' Maple Grove is one of the state's fastest growing and dynamic cities. Strong City management and excellent location has allowed high quality residential, commercial and industrial growth to take place. Portions of the City still have a unique rural flavor and the City has an exceptional parks and recreation program with over 40 developed parks. Maple Grove is truly one of Minnesota's most exciting cities. ' Total Potential Retail Sales City City Sales County County Sales ' Maple Grove $479,866,432 Hennepin County $17,763,287,040 Demographic Indicators Population 2007 Projection 2002 Estimate 2000 Census 1990 Census Maple Grove 32,996 33,040 33,093 31,443 ' Major Employers Employee Count Independent School District #279 3,000 Scimed Life Systems Inc. 3,000 ' United Parcel Service 900 Banta Catalog Mpls 350 Barborossa & Sons 300 Gannett Offset 300 Hanson Concrete Products 300 Wal -Mart 300 1 Byerly's 270 Cub Foods 270 Minneapolis Auto Auction 250 REO Plastics 250 Tiller Corporation 250 US West Dex 230 Champp's Americana 2 25 ' 16 ' PROPOSED HOTEL DEVELOPMENT — Brooklyn Center., Minnesota MARKET OVERVIEW ' Fridley The city of Fridley is committed to building for its future through careful, comprehensive planning and the fostering of solid ' economic growth. The City already has an expanding base of business and industry, and in recent years has become a center for high technology firms. Sound financial management, favorable tax rates, AA -1 bond rating and development incentives add to its desirability as a business location. Total Potential Retail Sales City City Sales County County Sales Fridley $402,730,720 Anoka County $3,539,052,288 Demographic Indicators ' Population 2007 Projection 2002 Estimate 2000 Census 1990 Census Fridley 31,529 30,758 30,530 31,301 ' Major Employers � Employee ' Count Medronic Inc. 2,500 United Defense 1,800 Onan Corp. 1,727 Unity Medical Center 1,400 Target 600 Minco Products Inc. 500 ' LaMaur 400 Kurt Mfg. Co. 350 Mc Glynn's Bakery Inc. 350 ' Park Construction 300 Parsons Electric 300 Wal -Mart 262 Holiday Plus 250 Home Depot 150 Menard Cashway Lumber 150 i ' PROPOSED HOTEL DEVELOPMENT— Brookly_ n Center. Minnesota MARKET OVERVIEW Minneapolis Educated workforce; access to high technology; transportation services; low cost energy; available capital, high household income, strong, diversified business base, manufacturing supercomputers, electronics, medical instruments biomedical, research milling achine manufacturing, food processing, graphic arts. Sound fiscal bond rating, financial center. Regional g .f g� f P g� gr' P .f g� .f gl commercial trade & Cultural arts center, state of art convention facilities. Center for organ transplants, open heart surgery, First class sports facilities, professional sports. Total Pot_ ential Retail Sales ' City City Sales County County Sales Minneapolis 2,838,658,729 I Hennepin County 1 $17,763,287,040 Demographic Indicators - Po ulation 2007 Pro ection 2002 Estimate 2000 Census P 1990 Census Minneapolis 1 168,370 163,745 162,107 153,274 Major Employers Employee ' Count University of Minnesota 34,317 Dayton Hudson Corp. 22,600 First Bank Systems Inc. 14,725 ' Hennepin County 10,472 Norwest Corporation 10,250 ' Grand Metropolitan Inc. 7,700 Honeywell Inc. 7,500 City of Minneapolis 7,500 ' Northern States Power Co. 7,362 Hennepin County Medical Center 4,000 US Post Office -Main 4,000 Star Tribune 2,814 US West Communications 2,100 CP Wainman Pioneers- America 2,000 Norwest Bank MN NA 2,000 1s ' SECTION 3 ' SITE ANALYSIS 1 1 1 1 1 PROPOSED HOTEL DEVELOPMENT — Brooklyn Center. Minnesota SITE ANALYSIS — FRANCHISE AFFILIATION — PRODUCT DESCRIPTION ' Site Analvsis ' Site Overview The hotel site is located near the intersection of Interstate 694 and Shingle Creek Parkway and is visible to traffic in all directions. Interstate 694, a divided six -lane expressway, passes through Brooklyn Center and intersects with ' Shingle Creek Parkway within the city limits. Accessibility is primarily via Interstate 694 and Shingle Creek Parkway. ' The site is 10 minutes from downtown Minneapolis, 20 minutes from downtown St. Paul, 25 minutes from the Minneapolis /St. Paul International Airport. The site is also adjacent to the Earle Brown Heritage Center. This is a historic renovation of the Earle Brown Farm property. It is now a 36,000 square foot conference and event center, ' with a full service catering and sales staff. Traditionally, business and conference hotels have a low occupancy on weekends. This location offers the ability to offset this problem with the addition of a waterpark facility. The northern suburbs traditionally have a high rate of weekend occupancy in June, July and August, and the waterpark ' is expected to bring high occupancy rates throughout the year, particularly on weekends, holidays, and school break periods. This location also will be the location of choice for out of town guests attending weddings at the Earle Brown Farm Conference Center. ' Approximately six acres, the site is situated within a commercial/office development adjacent to the Earle Brown Conference Center. The site will be appealing to guests because it is adjacent to a historic farm, a pond and conference center. 1 1 1 1 ' 20 •r�� ' 7� � -:Yt; 1y'r{ I _ a i / � r1 �Yr, � t4 `Tr` � t'N� �.� • ��a�� }� • I ' 111 a a, ��+ ' (' ' .�•. �� r + 1`�' „� p � �, '' �� / j, >T • '� ,.�� .I ..�. `•; '• , ,' rt y'Ar N ' 4� , � / r. �► � �• t r Q'1, '��,.� r �� .1.- l K f TIN t v t l•. ,� .. �� ,4 ; nF ' ` r.� tf 1. 'w' � �^` �4 � /� •{ 1, p V IN INS ,\ `\ I C I 1 \r , •~, L •` ' ,i Y , , � r ! j , ��! ��. A �/ `y� t �\ � jam. ♦.` . )' �_._. \ \�' •' ` ,� ,i p a �' °� ,It`d '•t � � � t ,t, f r .41*e ♦ n .. ' i1 _ ' . N V - I .�' � -, - r �1., , r }j � � ��,, �� Y � r 1 �* �„ �4 ` e ��r� — _ _ } M � r i � 1 /� � � � ;� � 1 S r i F ` � M r l 40, lillol r; MOP I-NI '�` +`, `r,� "�1 r r +i G K J I r a r �s � �• '"� �.•� Y i /" •, w . ' .� 1 ' r � . 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C :J C 1 •' � 1 ' .v � aye �� }� 4 ' a I u r � t 0 >►� �•� tai 1 ` L I F � t � 1 _ _ u u s II f( gpgpp T o S!.�P 1 ._ - - - -- Iro sr no a - I � I I J u y y � W �� L R "n m,i 22e�. o A \ i Sane Browg 3 f Merit Eail o wnto 6755 Ea h Brown Drive ® saspses Minheapoli _ fIIIiI � �.. - -- 1 CARRIAGE HALL ARVEST R - PT C _W RDEN E ALLR , ARM r LA - -- C 7: C: FA Ah LU uI I� �� = � � --mss -- -- \ H O E L Cr Zd z 1 r f POND - -- ) l.L CC -j 1 w ' _ _ Lu Lwi GE TE - COz A Q Ll- ' t ..�� -„frr� p � i � AN HISTORIC RESTORATION � 4/4�/!! Conference Event Center —J cr LU C) er W o m 4r LL4 GENERAL PLAN 1 r - ji 1 � —' 11 J_a I I I o architects S planners - —____ 2280 Watertown Road, Long Lake, MN 55356 -9419 1 � oog PEDgS RIAN LINK SERVICE 1 IM W I — HOT - 1 200 O • 1 _ w — p R K - ,..: . _. — WA' ERSLIDES ' LL LU btixE TE - z / J SERVICE AN HISTORIC RESTORATION ifi�� 3: W � Conference & Event Centel• Oa U .: ,. 3 SP i�►/ �: cr z 4 1 � °C w t% ♦' 1 / N HOTEUWATER PARK 1 ENTRY Q PLAN ao 1 • s " / U:Q � _ Lu I I I i �fi q architects 8 & . planners - 2280 Watertown Road, Long Lake, MN 55356 -9419 952.476.4434 • Fax 952.476.5863 • nw @weberarchitects.com I a I .- 1 .=Wra 1 00 t Wl• .•W i //�\ r 1p,�p1 ' .�.1 %J.:. .s/11.- ..>�A■' i1:N, -. S u= n U t J .�. 1 .. �1/ 11f49(t� +■■ i - NEW . UNK 1 i 0 BA f Mtbw .f i ro` S Pr 1 - D GAIL) , � �. �d � � � SERVICEIDELIV�R�' &, UN . KPLAN_ UJI Z CC z 1 LL Cc Z w 1 W' -.. G DART "i': i.' ':�," 1, .il . .. I CO P GTAM" H DAM _ - W LW The Intent of this document Is to C A�i��11� I - T ' _ I � 0 present In a preliminary document for _J - cost estimating a new link to the Hotel. I �- ' -� The link will be detailed in a manner - -- similar to the existing links at Earl - Q / Brown The metal frame, fascia. glass 1 / transoms, metal root and entrance + '^�• doors are intend to be detailed similarly to existing. 0 � 9 a VVV ' l 1 11 4 1111 1 l / V t ,f 355 architects 8 planners 1 x / 2280 Watertown Road, Long Lake, MN 55356 -9419 t 952.476.4434 • Fax 952.476.5863 • nw @weberarchitects.com 1 -low }} , Pond :4♦ Patio Concession 1t I r - 1 A Concession /Pool Deck Bat ms \y % \ Whirlpool Hotel Lobby _ f P I I �I 4 ' T-_r M 4 P r ill — Arcade R ik" r>Geren _ _ f B Children's Pool � ' O •' - • , - I - -- =° - - � E River Channel F Water Activity Structure Ci Activity Pool f' • — Mechanical /HVAC Service \ :' - .:':. fv.'ir' . °��•'�'_` r.._I- r C Activity Pool scale: 1' =30' C7 Tube Slide Complex B R O O K L Y N C E N T E R ° 15 30 60 =�D 1 INDOOR WATERPARK CONCEPT PLAN BUILDING BY PROJECTNo.: NA l WATER 2.21.2003 J IBS 1 BROOKLYN CENTER MN ED TECHNOLOGY INC. 100 Park Avenue / PO Box 614 Beaver Dam, Wisconsin 53916 r Voice 920.887.7375 FAX 920.887.7999 architects & planners This Document and the ideas, renderings and other contents contained therein are the sole property of Water Technology, Inc. and may not be disseminated, copied, 2280 Watertown Road, Long Lake, MN 55356 -9419 reproduced or otherwise used without prior written consent of Water Technology, Inc. 1 952.476.4434 • Fax 952.476.5863 • nw @weberarchitects.com 1 1 1 i 1 Section 4 1 BRAND AFFILIATION 1 i 1 i 1 1 1 1 1 1 1 1 PROPOSED HOTEL DEVELOPMENT — Brooklvn Center. Min lesota SITE ANALYSIS — FRANCHISE AFFILIATION — PROD UCT DESCRIPTION Franchise Advantages ' Franchise Affiliation Instant Recognition: This is the prime benefit to the franchisee, instant name recognition. Franchising Overview Customers often look for a facility with a Branded hotels base their product superiority on familiarity and recognizable name and image as they are consistency with benefits received from name recognition, giving the seeking a certain degree of assurance that the guest or resident a positioned perspective related to quality and service quality and service will meet the expectations levels. As important are the service and support that a franchiser can based on perhaps, a pervious experience. A provide, and a partnership must be formed enabling both franchiser and faster build -up of occupancy may be realized for a new development when the proper brand franchisee to benefit from a relationship. The franchiser must safeguard affiliation is selected. standards of product and service, securing the integrity and consistency of the brand on a long -term basis. Balancing the demands for growth in Market Segments: Specific images within a global brand - oriented marketplace with the desire for product integrity various market segments can be produced by a and consistency will always be a challenge. Investors are focused on franchise. The market strengths of each hotel long term results. Brand affiliation becomes critical. lodging chain can be direct benefit for a franchisee. The property "type" and the The brand must deliver what they promote. Fragile customer loyalties selected franchise should have compatibility. and quickly shifting market preferences should encourage franchise Operations: Established franchise companies companies to focus on brand development from the standpoint of have successful manuals and training programs driving it with dedicated customer support. that have been developed for internal ' management guidelines. Systems and Franchising Affiliation versus Independent Hotel procedures must be proven as beneficial to There are many considerations to be made when weighing the relative insure franchise success. merits of an independent operation versus an operation with a franchise affiliation. Ultimately, the bottom -line projection will decide which Centralized Reservation System: Another path to follow. Decisions resulting in an affiliation with a franchise primary benefit for a hotel is the centralized company must then simultaneously evaluate the price/benefit reservation system that ties the entire chain relationship that different brands offer. Due to the initial cost of a together. These reservation systems must offer franchise, this determination requires long range projections. trained personnel, be able to process all reservation requests, and maintain a state -of- ' the -art database. The primary benefit for the franchisee is the name recognition that gives the perspective customer a perception of the positioning of the property, Marketing: National and regional marketing the service and quality level, and the security of "knowing" the offices are advantageous to hotels. Hotel property. The brand name identifies "who" you are and suggests franchisees that anticipate meeting, convention "what" type of facility you are to the consumer. Franchise companies and group business will benefit greatly as the lend identity to a franchisee as a result of brand awareness. They send a time and effort necessary to insure segment message as to their pricing position, amenities offered, and even specific maximization is often too costly for an types of accommodations. The result is a high comfort level realized by individual property. the customer. Reports, Inspections, Audits: Franchisers periodically inspect their franchised properties Chains have used technology to achieve domination in part due to the to determine that standards established are met, development of progressive distribution networks, which allows ultimately protecting the integrity of each customers to purchase rooms inventory. Along with central reservations property within the chain. ' centers and automated systems, national and regional group sales are systematically linked to hotels throughout a brand portfolio. These links provide customer databases for valuable marketing information as well as the capacity to sell product from multiple outlets within one chain. Brands must dominate the development of leading edge technology, continue to form strategic alliances with other travel industry and consumer product companies to mass market with emphasis on customer incentive and frequency programs. Their evolving distribution programs must enable high volume purchasers to more efficiently contract transient and group inventory across many geographic and price segments. PROPOSED HOTEL DEVELOPMENT — B rooklyn Center, Minnesota SITE ANAL YSIS — FRANCHISE AFFILIATION — PRODUCT DESCRIPTION ' Brand Selection Process (Brand Affiliation vs. Independent) A study of competitive facilities in the hotel market place was conducted to determine existing franchise affiliations. Qualification guidelines of potential franchise affiliations that could benefit the proposed Brooklyn Center hotel were reviewed. The most viable option for the proposed hotel, that would encompass maximization of 1 market exposure and address the financial parameters, was determined to be Radisson Hotels by Carlson. The Radisson Hotel chain is one of the largest in the world with the upscale image that is currently lacking in the Brooklyn Center Market. i i 1 1 1 1 1 1 1 1 1 1 23 PROPOSED HOTEL DEVELOPMENT — Brooklv Center. Minnesota SITE ANAL YSIS — FRANCHISE AFFILIATION — PROD UCT DESCRIPTION ' Carlson Hospitality Worldwide Carlson Hospitality Worldwide is the parent company of approximately 1,000 hotel, resort, restaurant and cruise ship operations in 66 countries. Hotel brands of Carlson Hospitality Worldwide include Regent International Hotels, Radisson Hotels Worldwide and Country Inns & Suites by Carlson Partners, operating in approximately 500 locations around the world. Carlson Hospitality Worldwide is one of the major operating groups of Carlson Companies, Inc., headquarters in Minneapolis, Minnesota. Carlson Companies recently celebrated 60 years of industry excellence. Other Carlson Companies operations include Carlson Marketing Group, a worldwide marketing services company operating in 17 countries; Carlson Leisure Group, responsible for leisure travel ventures around the world; Carlson Vacation Ownership, Carlson Lifestyle Living; and Carlson Wagonlit Travel (co -owned with Accor Group of Paris), a world leader in business travel management. Carlson's travel agency interests include 5,300 travel agency locations in more than 140 countries. System wide revenues for Carlson Companies, Inc. exceeded $30 billion in 1999. t Radisson Hotels by Carlson Radisson Hotels by Carlson is the 16 largest Franchise Company in the world and the 3ra largest Hotel Franchiser behind Marriot and Holiday Inns. Radisson Hotels generated over 4 billion dollars in revenue from October 2001 to October 2002. Radisson Hotels by Carlson, part of Carlson Hospitality Worldwide, is a fast - growing full - service lodging chain. Founded in 1964, the lodging concept consists of more than 239 locations in the United States and over 400 worldwide. Radisson Hotels offer competitive rates and attractive accommodations featuring upscale decor. A typical Radisson hotel features value along with upgraded services and amenities. The properties are strategically located in and near metropolitan areas and business to provide convenience and accessibility for business or leisure travelers. Radisson locations are characteristically upscale architecture and Reservation System sophisticated interior design in addition to breakfast, other complimentary The most sophisticated reservation amenities include in -room coffee makers, irons, and ironing boards, system in the industry, offers a host weekday morning newspapers and free local newspapers and free local of instantaneous convenient services telephone calls. for guests and travel agents. In addition, Radisson along with sister Gold Points Rewards is the brand's guest loyalty program offering 10 companies Country Inns & Suites points for every dollar spent on properties. Enrolled members can earn a and Regent Hotels International, free night's stay when 15,000 Gold Points are accumulated. Points are offer the first ever travel agent also earned and can be redeemed for rewards at other Carlson branded incentive program, "Look to Book." hotels and ' restaurants. Other national partners include MCI WorldCom, National Car Rental and SkyMall, a popular in -flight merchandise catalog. 24 PROPOSED HOTEL DEVELOPMENT — BROO CENTER, MINNESOT SITE ANALYSIS — FRANCHISE AFFILIATION — PRODUCT DESCRIPTION Outstanding Hotel Performance ' Customer loyalty declines substantially with anything less than the highest guest rating, according to the J.D. Power and Associates 2002 Domestic Hotel Guest Satisfaction Study. The study was based on a national sample of ' more than 10,000 businesses and leisure Hotel guests, who each evaluated one of 52 hotels comprising five market segments. While more than one -half of all hotel guests rate their overnight stay at a chain high in customer satisfaction only an outstanding performance by the hotel will create the strong loyalty necessary to bring those guests back again. The primary drivers of overall customer satisfaction in this study are: satisfaction with the guestroom, pre- arrival/arrival and departure, followed by guest services, and food and beverage. This applied to all segments included in the study: Mid -Price Full Service, All Suites and Upscale. Upscale Hotel Chains with Full Service Radisson performs well in nearly all aspects of the guest experience, especially in the areas of reservation/check -in, guestroom, guest services and departure. In addition to the Crown Plaza and Hilton Hotels, Radisson performed at or above the segment average. The Hotels in this segment that perform above average have a considerably higher room rates. (Renaissance, Embassy Suites, Onmi and Westin) Source: J.D. Power and Associates August 29, 2002 Fee Structure An all- important economic consideration is the amount and structure of the brand/franchise fees. This compensation is based on the use of the name /logo, identity, overall image, reservation contribution, systems /procedures and marketing. The fees typically include a Royalty Fee, Advertising/Marketing Fee, Reservation Fee and often times a Training Fee. These continuing fees must be analyzed to determine whether the price /value relationship warrants the acquisition of a franchise or if another viable avenue must be explored. Monthly Fees Royalty Fee Marketing Fee # Units Initial Fees (% of Gross Room (% of Gross Room Reservation Fee Rev) Rev) Year 1 -2 3.50% Year 1 -2 0.50% 2% of gross revenue 200 $50,000 Year 2 -4 3.75% Year 2 -4 0.75% Year 5 4.00% Year 5 1.75% (Source: Radisson Fee Schedule) r 25 ' May 30, 2001 ' Mr. Kent Oliver Duluth Superior Lodging 215 North Central Avenue Duluth, MN 55807 Dear Kent, Thank you for your interest in Radisson Hotels and Resorts Worldwide and for the time you extended me during our meeting last week in Brooklyn Center. Pursuant to your request, it is my pleasure to submit the following proposal for a Radisson License ' Agreement for the proposed new hotel development next to the Earle Brown Heritage Center. Please note that this proposal is subject to the terms and conditions of the standard form License Agreement delivered with the Uniform Offering Circular, which ' you received in March 2001. It is not binding until an application has been submitted and approved by the Radisson Franchise Committee and completion of mutually satisfactory legal documentation. PROPOSED PROPERTY NAME: Radisson Hotel Brooklyn Center TERM OF LICENSE: Standard Twenty (20) Years HOTEL MANAGEMENT COMPANY: Duluth Superior Lodging ' FEE STRUCTURE: a) APPLICATION FEE: A non - refundable application fee of $10,000 is due with your application. This fee will be credited against the total initial fee due on the execution of the License Agreement. Please note that in the event your application is not approved Radisson will refund this fee. b) INITIAL FEE: The standard Radisson Initial Fee is $50,000, plus $250 for each rentable guest room unit in excess of 200. c) ROYALTY FEE: The standard Radisson Royalty Fee is 4% of gross room revenue payable for each month by the 15` day of the next month. At this time, Radisson is pleased to extend a special Royalty Fee proposal of 3.5% of gross room sales per month for the first 2 years of the Agreement with a minimum Royalty Fee of $150,000. After the 2nd year of the Agreement, the Royalty Fee will increase to 3.75% for the next two years of the Agreement. After the fourth year of the Agreement the Royalty Fee will increase to 4% for duration of the Agreement. Radisson Hotels & Resorts 3100 North Lakeharbor • Suite 220 • Boise, Idaho 83703 Telephone: 208 - 433 -8747 • Fax: 208 - 433 -8750 . www.radisson.com ' d) RADISSON MARKETING ASSOCIATION FEE: The standard Radisson Marketing Association Fee is 1.75% of gross room sales payable for each month by the 15 of the next month. At this time Radisson is pleased to extend a.50% Qualified Advertising Reimbursement proposal for the first 2 years of the Agreement, which will allow you to receive a reimbursement from your RMA Fee for certain approved advertising. After the 2nd year of the Agreement, you will receive a .25% QAR for the next two years of the agreement. After the fourth year the RMA fee will increase to 1.75% for the duration of the Agreement. e) ROYALTY FEE AND RMA FEE NET OF REIMBUSEMENT: YEAR 1 & 2: 4.75% ' YEAR 3 & 4: 5.25% YEARS 5 & BEYOND: 5.75% f) RESERVATION FEE: 2% of Gross Room Revenue, a able for each month b the pY Y 15 of the next month. ' g) PERFOMANCE CLAUSE: To be determined and on. agreed upon. P ' h) AREA OF PROTECTION: The cities of Brooklyn Center, Brooklyn Park and Maple Grove. East to 35W. North to the Mississippi River. Additionally, a three mile radius around the hotel for the term of the agreement. Kent once again, thank you for your interest in Radisson Hotels and Resorts Worldwide. We greatly appreciate the opportunity to work with you and look forward to a long- standing relationship with the Radisson Hotel Brooklyn Center. Please feel free to contact me directly should you have any questions or need any assistance. Sincere y r Steven M. Barick Vice President Development Radisson Hotels & Resorts Copy: Mr. John Sheehan Radisson Hotels & Resorts 3100 North Lakeharbor • Suite 220 • Boise, Idaho 83703 /y dt :ii b o v Telephone: 208 - 433 -8747 • Fax: 208- 433 -8750 w www.radisson.com ' hrough Carlson Hospitality Worldwide operations, Carlson Companies, Inc. is a world leader among hospitality servicers, encompassing more than 1,615 hotel, resort, restaurant and cruise ship operations in 82 countries. RFGFNT INTERNATIONAL HOTFI.S ' Carlson Hotels Worldwide lodging Carlson Restaurants Worldwide operations tally operations include over 845 locations up to more than 765 locations in 56 countries. ' in 64 countries. T.G.I. Friday's, a world leader in ob Crowning the luxury segment of the lodging industry, casual dining for 37 years, recently Regent International Hotels defines the world -class introduced an exciting new menu offering a variety HOTELS & RESORTS benchmark of hospitality excellence. Its worldwide of innovative items along with traditional favorites, presence includes premier locations in Southeast such as the Jack Daniel's Grill entrees and the Asia, Central .Asia, Europe and the United States. Meyer Natural Angus"' Beef Burger. www.regenthotels.com ' One of the leading upscale, full- service hotel Friday's Front Row Sports Grill companies in the world, Radisson Hotels & Resort, combines America's great love of food currently features more than 430 properties in 61 and sports in one location. Appealing to singles and countries. Radisson delivers exceptional personalized families with its great four, good times and nom - stop service and genuine hospitality fix corporate and games and activities, Front Row Spores Grill targets P ark Plaza leisure guests. www.radisson.com major markets worldwide. Park Plaza hotels feature 35 downtown, suburban Friday's American Bar offers a uniquely or airport commercial locations in 12 countries. quaint atmosphere in neighborhood- Positioned as a mid- to upscale, full - service hotel style gathering places. The menu brand, Park Plaza amenities and services appeal to contains T.G.I. Friday's menu items plus extensive ' business guests, meeting attendees and weekend alcoholic and non - alcoholic beverage choices, all leisure visitors. wwty parkplaza.com presented with signature flair. ' Country Inns & Suites welcomes guests at Pick Up Stix focusses on fresh, more than 325 locations in the United States, high - quality food cooked to order, or 0 Latin America, Canada, Europe, Australia and wok'd fresh, in a friendly, comfortable Indonesia. A limited- service leader, the chain environment. Exhibition kitchens treat guests to ' earns high guest satisfaction by offering excellent the tasty art of Chinese cooking (now with less oil value. www.countryinns.com and sodium) for national expansion success. Park Inn hotels offers 50 suburban and leisure destinations worldwide with special amenities and �� , services for business and leisure travelers. The brands position in the economy to mid -scale segment of sAnissoN ' the limited - service hotel category drives its success. A leader in the luxury cruise SEVEN SEASCRU1SES' www.parkinn.com market, Radisson Seven Seas % Cruises showcases six deluxe vessels and an additional ' ship under construction for launch in 2003. The highly acclaimed luxury line routinely wins some of the top honors in the cruise industry. 1 1 1 ive distinctive brands span several key market segments, all from a singularly focused mission, building valued customer relationships. Crowning the luxury segnicnt of the lodging industry, Regent International Hotels defines the REGENT INTERNATIONAL HOTELS world -class benchmark of hospitality excellence. Carlson Hotels acquired the rights to the Regent 1 brand in 1997 and embarked on a selective global growth program, dramatically expanding its worldwide presence to include unique locations in Southeast Asia, Central Asia, Germany and the United States. ' In January 2002, Regent debuted in Europe with The Regent Schlosshotel Berlin. Today, several new properties are under development, such as The Regent Beijing, The Regent Boston at Battery Wharf Hotel and Residences, The Regent Winter Park near Orlando, and The Regent Cote d' Azur in Rocquebrune, France. www.regenthotels.com 1 j a � a di 4s G6"� HOTELS &RESORTS ' One of the leading upscale, full- service hotel companies in the world, Radisson Hotels & Resorts currently features more than 430 properties in 61 countries. Radisson has distinguished itself in the hotel industry through its commitment to delivering personalized service and genuine hospitality. The ' Radisson vision is to be a global hotel company distinguished by four key characteristics: great hotels in strategically important locations; a recognized and trusted brand; valuable relationships with the guests it serves; and superior financial returns for owners and investors. www.radisson.com Park Plaza 1 Park Plaza hotels are well positioned in the mid -scale to upscale segment of the fill- service hotel category with 35 locations in 12 countries —all popular and convenient locations in downtown, suburban and airport commercial areas. Typically sized at 150 rooms or larger, these hotels offer restaurants, meeting 1 rooms, catering, suites and recreational facilities appealing to business guests, meeting attendees and weekend leisure guests. www.parkplaza.com 1 Country Inns & Suites is a fast- growing, limited - service lodging chain offering excellent value and attractive accommodations in a charming decor. These inns, suites and resorts welcome guests at more 1 than 325 locations in the United States, Latin America, Canada, Europe, Australia and Indonesia. The chain boasts a 98 percent guest return rating and has received numerous industry awards for quality and guest satisfaction. The J.D. Power and Associates 2002 North American Hotel Guest Satisfaction Study 1 ranked Country Inns & Suites highest in guest satisfaction among mid - priced hotel chairs with limited service. T ?? www.countryinns.com Park Inn 1 Park Inn hotels holds a strong position for growth within the economy to mid -scale segment of the limited - service hotel category. Park Inn is primarily a conversion brand that serves a wide range of guests 1 in 50 suburban and leisure destinations around the globe. Park Inn hotels offer a continental breakfast, as well as special amenities and services for both business and leisure travelers. www.parkinn.com 1 1 1 1 1 arlson Hotels Worldwide offers several distinctive brands of lodging accommodations to welcome a vast spectrum of travelers —from those with economy as their priority to those who consider upscale comforts a necessity. Diverse options, all with the Carlson quality hallmarks, including modern a d amenities, exemplary service, loyalty rewards and our 100% Guest Satisfaction Guarantee. HOTELS & R 1 ESORTS Companies around the globe have joined the Worldwide Hospitality Program to enjoy world -class 1 accommodations and amenities at preferred rates, and more. The long -term success of the program reflects its value to professional travel planners and their clients. ' A highly successful •a uest loyalty ram, Gold Points Rewards offers loyal guests 1,000 Gold Points'' K Y g per night at Radisson hotels or 10 Gold Points for every dollar spent on accommodations when ' they stay at other participating Carlson hotels. The points may be redeemed for a free room night, free travel with a participating airline partner, or brand name merchandise. This network is one of Park Plaza the most unique and lucrative incentive programs in the industry today. 1 1 The premier online loyalty program for travel agents, Look To Book rewards travel agents with points redeemable for free stays and an array of O merchandise just for booking their travelers into a participating Carlson t o dti Hotels Worldwide hotel or resort. Over 300,000 agents worldwide have 40 To 1 joined Look To look using the simple and free enrollment through the Q GDS system or on Icx>ktobook.com. Look To Book points are automatically goo 1 awarded through the GDS systems or our brand web sites when travel 1992 -2002 agents make a himking. 1 1 1 I? Park [nn 1 1 1 1 a HOTELS & RESORTS adisson Hotels & Resorts, a leading, global hotel company, operates, manages and franchises full- service hotels and resorts worldwide. From its franchise partners and -�— strategic allies, to every manager and employee at every hotel, the Radisson organization is _ committed to providing personalized, professional guest service and "Genuine Hospitality" at every point of guest contact in 435 hotels, representing more than 102,000 guest rooms i in 61 countries. Radisson is pursuing a vision supported by strategies and structures that defines the company as a global leader distinguished by: • Great Places in Great Places — Having the right hotels in the right markets with a RA on on rla:a Lord Bahhnoi, :. Itimore, Manland, USA dedicated new division to develop owned and managed hotels, supplementing growth �- through high - quality franchise locations • Building a Recognized and Trusted Brand • Building Valued Relationships with the Guests it Serves • Achieving Superior Returns for Owners and Investors Radisson has achieved a global presence by expanding into new markets around the world. The company is solidifying its position by focusing on total guest satisfaction, industry - leading loyalty programs and extensive customer relationship programs. As part of its focus on total guest satisfaction, Radisson offers one of the hospitality industry's most dynamic guest relations training programs called Yes, I Can!' This program Radissm Hotels & Suites Chicago. Chicago, Illinois, USA translates the core of the company's service philosophy for hospitality excellence to the front -line service employees in Radisson operations worldwide. After more than a decade, Yes I Can! has become a central part of the Radisson culture, creating a point of difference for the brand in the manner with which customers are served. ' Radisson is continuing to add new hotels and resorts in key U.S. business and leisure destinations, pursuing a strategy of increased management and investment in new assets, combined with high quality franchising with owners who share the brand's values and commitment to a consistent, guest experience. ' To learn more about Radisson Hotels & Resorts, please visit our web site ' at www.radisson.com , HOT S & HEs R'r a dolb t% ' HOTELS & RESORTS Atlantic 1 ' Ocean ' Pacific � •• Ocean Gu /f of Mext(o t • 1 a d�sG ' HOTELS & RESORTS ' Ft. Pierce MINNESOTA RHODE ISLAND Ft. Walton Beach Duluth Providence ALABAMA Jacksonville Minneapolis (3) bVarvAck ALBERTA Birmingnam Key West Plymouth SOUTH CAROLINA Cal our 9 / 1 Huntsville Kissimmee Rochester Charleston Canmore Mobile Marco Island Roseville Myrtle Beach BRITISH Madison Melbourne St. Cloud SOUTH DAKOTA Burnaby COLUMBIA ARIZONA Miami Beach St. Paul 12) Rapid City Richmond Flagstaff Miami MISSOURI Sioux falls MANITOBA ' Phoenix Orlando W Branson TENNESSEE W :nnipeg ;2i Scottsdale Sarasota Kansas City Knoxville NOVA SCOTIA Sedona St Petersburg St Louis (2! Memphis (2) Ha ifax Tucson Tallahassee NEW HAMPSHIRE Nashville Q) ONTARIO Yuma Tampa (2) Merrimack TEXAS ARKANSAS E[obicoke (Toronto Airport) West Palm Beach ,Anpo*t) NEW JERSEY Austin Kingston ' Fayetteville GEORGIA Englewood Corpus Christ! Kitchener Little Rock Atlanta (2i Fairfield Denton London CALIFORNIA Augusta (2; Mt Laurel Dallas (3) Markham (Toronto) Araheirn Savannah Princeton El Paso Mississauga (Toronto) Berkeley Tucker Saddle Brook Fort Worth Niagara Falls Beverly Hills HAWAII Secaucus Houston 12) Ottawa ' Brisbane Honolulu NEW MEXICO Irving Toronto (2) Buena Park Kauai Albuquerque (21 Richardson Windsor Chatsworth ILLINIOS Santa Fe San Antonio (2) QUEBEC Culver City Alsip NEW YORK South Padre Island Laval (Montreal) Fresno Arlington Heights Buffalo (21 Tyler Longueuil ;Montreal) Fullerton Bloomington Corinna Wichita Falls Quebec City ' La )old Chicago Rochester UTAH SASKATCHEWAN Los Angeles (3) tmcolnwood Holtsville Park City Regina Newport Beach Moline Jamaica- Queens Salt Lake City Saskatoon Oxnard Rosemont New York VERMONT Rancho Bernardo Schaumburg Utica Burlington San Bernardino INDIANA NORTH CAROLINA VIRGINIA Acapulco, Guerrero liar Diego i2i Indianapo45 Faye!ty %to Alexandria Chihuahua, Chihuahua San Francisco f21 Lafayette G•eensooro Hampton Cancun, Q. Roo San lose Merrillville Hrgr Point Lynchburg Ixtapa- ZihuataneJo, Guerrero Santa Barbara Muncie Resea Triangle Park Norfolk Santa Maria IOWA NORTH DAKOTA Richm Juarez, Chihuahua Davenport Richmond Juarez, C D. F. ' San *,a Monica Mexico Bismarck W l iamsburq Monterrey N.L Sacramento Des Moines Fargo WASHINGTON Sherman Oaks New <.or OHIO Seattle Queretaro, Queretaro Stockton KANSAS Akron (2:1 WEST VIRGINIA Sunnyvale Wichita Cleveland Huntrigin Union Gty KENTUCKY Cincinnati (2) WISCONSIN Nassau, Bahamas ' V!sa!'a Lexington Columbus Appleton Palm Beach, Aruba COLORADO LOUISIANA Eastlake Green Bay San Juan, Puerto Rico Aurora Baton Rouge Middleburg Heights La Crosse Colorado Springs (2) New Qdeans North Olmsted Madison Denver MARYLAND Sandusky Milwaukee Thornton Annapolis Toledo Pewaukee ' CONNECTICUT Baltimore f2) Worthington Pleasant Prairie Danbury MASSACHUSETTS OKLAHOMA Racine Bristol Boston Tulsa Wauwatosa Cromwell Cambridge OREGON WYOMING Enfield Chelmsford Portland 12) Casper New London Hyannis PENNSYLVANIA ' DISTRICT OF COLUMBIA Marlborough Bethlehem Washington, DC Milford Camp Hill FLORIDA Rockland Phdadelohia Boca Raton (2) Woburn Pittsburgh Cape Canaveral MICHIGAN King of Prussia Clearwater (Sand Key) Farmington Hills Monroeville ' Daytona Beach Grand Rapids (2) Scranton Ft. Lauderdale Kalamazoo Trevose R. Myea Q) Lansing Williamsport West Middlesex 1 1 1 � a t HOTELS & RESORTS ,u 1 In" Ocean SOUTH AMERICA AUSTRALIA CENTRAL AMERICA [MIDDLE FAST i I OY.alL.u. iN di4si3K HOTELS & RESORTS Limerick. Ireland ' Galway Ireland Cape Town Gty, Cape Town Salzburg, Austria Riga, Latvia Baku, Azerbaijan Vienna, Austria Klaipeda, Lithuania Manama, Bahrain Antwerp, Belguim Vdrlus, Lithuania Shaml El Sheikh, Egypt Beijing, People's ep Brussels, Belgwm St. Julien, Malta Taba. Egypt Hangzhou, People's e p c China (2i e's R Republli c of China Spa, Belguim Amsterdam, The Netherlands ,21 Amman, Jordan ' Shanghai, People's Reoubfic of China Sofa, Bulgaria Alesurid, Norway Aqaba, Jordan Lansheng, People's Republic of China Prague, Czech Republic Bertostolen, Norway Kuwait CGty, Kuwat New Delhi, India Aalborg, Denmark Bergen, Norway (2) Beirut, Lebanon lalandhar, India Aarhus, Denmark Bode, Norway Muscat, Oman Chennai, India Bornholm, Ronne, Denmark Haugesund, Norway Yanbu Albahr, Saudi Arabia Raithak, India Copenhagen, Denmark i4; Kristiansand, Norway Istanbul, Turkey ' Bali, Indonesia (2) Frederikshavn, Denmark liilehammer, Norway Shalah. United Arao Emirates West Java, Indonesia Koiding, Denmark Longyearbyen, Norway Surabaya, Indonesia Odense, Denmark Oslo, Norway (4) Yogyakarta, Indonesia Sdkeborg, Denmark Stavanger, Norway (3) La Paz, Bomia Osaka, Ja n Leeds, England Tromso, Norway Pa Sao Paulo, Brazil loyko, Japan (2) London, England (11) Trondheim. Norway Santiago. Chile ' Kathmandu, Nepal Manchester, England Ulstemv Norway Nor Bogota. Colombia Seoul, South Korea Tallinn, Estonia SZUKIn, Paantl Bangkok, Thailand Espoo, Finland Warsaw, Poland Quito, Ecuador g Helsinki, Finland (31 Wroclaw, Poland Cara(d%. Venezuela Oulu, Finland Lisbon, Portugal Vaasa, Finland Moscow. Russia ' Sydney New South Wales (3; Cannes, France Sochi, Russia (2) Caens, Queensland Nice, France St. Petersburg, Russia Gold Coast, Queensland Paris, France f2) Glasgow, Scotland Port Douglas, Queensland Cottbus, Germany Stirlingshve, Scotland Adelaide, South Australia Dresden, Germany Bratislava, Slovakia Melbourne, Victoria Dusseldorf, Germany Gothenburg, Sweden (2) ' Erfurt, Germany Helsingborg. Sweden Fleesensee, Germany Linkoping, Sweden Belize City, Belize Hamburg, Germany Malmo, Sweden San lose, Costa Rica Hannover, Germany Orebro, Sweden San Salvador, Fl Salvador Lubeck, Germany Oslersund, Sweden Guatemala City, Guatemala Merseburg, Germany Ronneby Sweden t Neubrandenburg, Germany Saltslobaden, Sweden Rugen. Germany Solna, Sweden Wiesbaden, Germany Stockholm. Sweden (2) Budapest, Hungary Stcockholm•Arianda, Sweden (2) Reykjavik. Iceland (2) Uppsala, Sweden ' County Londonderry, N, Ireland Vaster3s, Sweden Dublin, Ireland Basel, Switzerland � � ad N16e� HOTELS & RESORTS Section 5 PRODUCT DESCRIPTION SITE ANALYSIS — FRANCHISE AFFILIATION — PRODUCT DESCRIPTION ' PRODUCT DESCRIPTION ' While Radisson does not suggest its properties all look alike, it is advantageous that the Brooklyn Center hotel building exterior and the design of the public areas maintain an individuality that reflects geographical location. Certain amenities and features must convey the Radisson image, a perception of quality throughout the hotel. Radisson locations are characteristically upscale architecture and sophisticated interior design. Each hotel welcomes guests with classic furnishings that blend rich woods and exquisite floral - patterned fabrics. The rooms e combine the elements of amenities often found in higher - priced hotels. In addition to the breakfast, other complimentary amenities include in -room coffee makers, irons & ironing boards, weekday morning newspapers and free local telephone calls. i Considerable thought is reflected in the building layout and property design. Positioning the building to be favorably viewed by highway travelers with maximize walk -in (guests with no reservation) activity. The swimming pool amenity is more desirable when the area is light and bright, allowing sun to filter through as much as possible. INTRODUCTION: Earl Brown Heritage Center's beginnings date back to the early 1900's when this pioneer farm first became the home of Earle Brown, a noted farmer, horse breeder and civic leader. Upon his death, as a gesture of gratitude, he willed all of his property to the University of Minnesota. In 1983, the City of Brooklyn Center acquired 14 acres comprising the original farmstead and all of its outbuildings, with a view to preserving them as a historic landmark. The restoration and renovation of the estate and its buildings as a meeting and convention complex began in the ' spring of 1989. Completed in 1990, the complex now includes a 36,000 sf convention center; extensive meeting and conference facilities; the Inn on the Farm, a 10 -room bed and breakfast; Earle's a special occasion restaurant; on -site catering facilities; and on -site parking for hundreds of cars. Directly adjacent to the Center is a modern glass clad office building which provides the community with top quality space for local businesses. ' SITE CONCEPT: 1. GENERAL CONCEPT The Hotel is laid out to take advantage of the office building across the pond. The massing of the building will successfully offset the similar massing of the office building while allowing the layout of the Earl Brown buildings to not be interrupted or lessening their impact. The Hotel, which will contain 200 rooms and be 7 stories high, will be connected to the existing buildings with a link that will be designed in the same manner as the current links between the Heritage buildings. Our site plan shows a link from D Barn to a staging area which serves as an entrance to the Hotel. This will allow entrance to the Hotel from the parking areas to the east. The hotel itself will be the buffer between the Heritage Center and the 28,000 square foot waterpark. ' There will be an outdoor patio toward the pond area to allow group gatherings to occur on site adjacent to the gathering spaces in the hotel. The design of the patio area and its amenities will be in the same vocabulary as the existing Heritage Center site development. ' The use of reflective glass as the exterior skin of the building accomplishes a number of things. First, it will successfully complement the existing Brookdale Corporate Center office structure. While not being a ' duplicate building, it will be designed to be compatible with it. Second, and perhaps most importantly, the reflective glass will allow the character of the Heritage Center to reflect on itself. It will not be an attempt to try to make a multi -story building design compatible with the unique design already existing. 1 ?, 1 SITE ANALYSIS — FRANCHISE AFFILIATION — PRODUCT DESCRIPTION The rooms will be a variety of king rooms, and queen/queen rooms ranging from 325 to 375 sf. Suites will be developed as the market studies indicate. The top floor will be luxury suites. ' 2. PARKING The parking is laid out to flow smoothly into the existing parking layout of the Heritage Center. The Hotel will have its own entrance from the parking area but can also be accessed from the Heritage Center parking or walking link as connects the Heritage buildings. We will provide over 300 cars on site. This will ' provide plenty of parking spaces for the hotel patrons and their guests without putting any drain on the parking needed for the Heritage Center. 3. LANDSCAPING The area on the "inside" of the site will continue the landscape concepts developed for the Heritage Center. The area adjacent to D Barn currently has the orchard and that will remain. Paths will be developed to connect the Hotel with the Heritage Center on the exterior of the site to allow pedestrian links during warm weather. The parking areas will have landscaped islands and buffers along the buildings. BUILDING CONCEPT: 1. EXTERIOR ' The exterior of the hotel will reflect the design characteristics of the office building across the pond from the hotel site. While the hotel is a different type of occupancy, the architecture of the Hotel will act as a balance to the massing provided by the office use on the southern edge of the site. The physical link of the Heritage Center to the Hotel building will continue the architectural vocabulary that currently exists. ' 2. STRUCTURE / GUEST UNITS The hotel will be structural steel frame with precast floor structure and an exterior to compliment the office structure. The base of the Hotel will be designed to work with and enhance the architecture character of the existing Heritage Center. 3. PORTE COHERE The main entry to the Hotel will be from the parking area to the north and west of the porte cohere. The entry is centrally located to provide the easiest access for all guests. e 4. LOBBY/RECEPTION DESK The entry to the hotel will be designed to clearly define the hotel use and the water park use. Patrons to the hotel will be providing the ability to enter the hotel with the entrance to the water park being separate from the hotel. 28 5. RESTAURANT A 100 to 150 seat restaurant will be incorporated into the Hotel and will be located off of the large entrance lobby. A small bar will be incorporated into the design which provides Hotel patrons a high quality meeting place while in the Hotel. We would not propose any facility to complete with the functions of the Heritage Center but rather it should be a complimentary use to the total complex. ' 6. BUSINESS CENTER The Hotel will include a business center to accommodate its business users. Copiers, fax machines, computers, printers and other equipment will be available for guests. 7. RECREATION FACILITIES Recreation facilities will be provided in the Fitness Center of the Hotel. This will be designed to complement to the pool, sauna, and whirlpool area of the water park. The 28,000 sf water park as shown on the attached concept plan will incorporate activities for people of all ages. Detains of the water park and its enclosed will follow. i ' 29 1 �1 1 1 1 Section 6 ! COMPETITIVE ANALYSIS 1 ! 1 1 1 1 I 1 ! 1 I ' PROPOSED HOTEL DEVELOPMENT - BROOKLYN CENTER M INNESOT A COMPETITIVE ANALYSIS ' National Lodging Outlook The Hotel Development Pipeline appears to be approaching a bottoming that will set the stage for increased ' development activity either late in 2003 or early 2004, Lodging Econometrics (LE), reports in its 3Q Guidance Memo to Wall Street analysts and corporate clients. The project count for the Total Development Pipeline — all hotels Under Construction, those scheduled to Start in the next 12 months and those in Early Planning — declined by ' 99 or 4.8% in 3Q, dropping under 2,000 projects for the first time. The total room count, below 300,000 for the second quarter in row, declined 2.9% to 272,531 rooms, down 50% from the high reached in 3Q 98 and 22% lower than a year ago. i "The continuing declines virtually guarantee that net new guestroom additions will be near a 1.5% low in both '03 & '04. That's good news for industry, which is still recovering from the recession, the effects of 9/11 and ' restrictive business travel policies," said Patrick H. Ford, President. Quarter- over - quarter, Rooms Under Construction were down, 6.1% and Starts in the Next 12 Months were down 3.7 %. In 3Q, 240 new project announcements entered the Pipeline, 47 of those projects having 7,993 rooms were either rooms were either postponements or cancellations reactivated from a previous period. Only 176 new projects having 16,294 rooms exited the Pipeline and opened in 3Q, the fewest for the cycle. LE estimates that between 82,000 and 84,500 total rooms will open in '02 with new openings below 80,000 rooms likely for both '03 & '04. ' Pipeline activity in the Top 25 Markets was essentially even with 2Q. In 3Q the Pipeline decreased in 313 markets while 8 showed minimal increases. Of the 12 largest markets likely to lag behind the recovery Boston, Miami, Chicago, Seattle and San Francisco were ranked as being of greatest concern with fallen demand and absorbing new supply additions typical of the back end of the cycle. Some developers are showing little rush to complete projects already started nor are they hurrying to start construction on new projects. In fact, 52 projects having ' 7,667 rooms were reclassified backward from Starts in the Next 12 Months to Early Planning, either for reasons of economic uncertainty or because of difficulty in locating attractive financing. LE noted that, despite low interest rates, financing difficulties await most developers' projects due to lenders' challenging loan to value ratios caused by the economic and political uncertainty. Some are seeking mezzanine financing and FF &E leasing arrangements as ways to move forward. 31 PROPOSED HOTEL DEVELOPMENT - BROOKLYN CF,NTER. MINNESOTA COMPETITIVE ANALYSIS ' Upscale with Food & Beverage Segment The proposed Brooklyn Center will be positioned as a upscale property with food and beverage. This segment continues to experience product innovation and brand repositioning, though the brakes are starting to engage as the segment begins to react to the beginnings of oversupply. In the past five years, the upscale with Food & Beverage Segment added an estimated 186,000 Rooms, a cumulative growth of 75.9 percent. During this same period, demand increased by an estimated 65.1 percent, decreasing average annual occupancy from an estimated 70.2 ' percent in 1995 to an estimated 66.7 percent in 2002. Although rapid daily rates have achieved moderate real growth. ' In 2002, the segment is expected to focus on operation efficiency, as development opportunities become less obvious. Ernst & Young suggest supply growth to decrease significantly to an estimated 1.5 percent, while demand growth will decline to an estimated 3.6 percent. Additionally, segment occupancies will decrease marginally by 0.2 ' points to an estimated 63.8 percent in 2002, while room rates achieve modest gains to an estimated $93.73 in 2002. Operating Performance (Minnesota and Minneapolis /St. Paul) ' Room Rooms Rooms Occupancy % Average Room Rate Revenue Available Sold Sept 2001 Year to Date % % % % % ' Compared to Sept 2002 2001 2002 Change 2001 2002 Change Change Change Change State - Minnesota 61.9 60.0 -3.1 77.39 76.6 -1.0 -2.0 2.2 -1.0 Market - Mpls /St. Paul 65.8 62.4 -5.2 86.70 84.5 -2.5 -4.6 3.3 -2.1 Price - Upscale (US) 64.2 63.8 -0.6 96.77 93.73 -3.1 -1.6 2.3 -1.6 (Source: Smith Travel Research, October 2002) 32 I PROPOSED HOTEL DEVELOPMENT - BROOKLYN CENTER, MINNESOT COMPETITIVE ANALYSIS Overall, the industry has performed exceptionally well. Of importance to the proposed Brooklyn Center hotel, Location - Highway depicts strong performance as compared to the previous year. Occupancy indicates stability and average room rate reflects a healthy increase. From a Midscale w/o F &B standpoint, occupancy shows a slight decrease, however, average room rate significantly increased over the previous yer. Annual Forecast for the Hotel Industry (2000 - 2001) ' Table 2. PricewaterhouseCoopers' U.S. Lodging Outlook as of August 2001 1997 1998 1999 2000 2001 2002 ' Occupancy ( %) 64.5 63.8 63.2 63.9 63.6 63.5 l Average Daily Rooms Sold 2,293 2,365 2,439 2,543 2,609 2,674 ' Change from Prior Year ( %) 2.8 3.1 3.1 4.3 2.6 2.5 End -of -Year Room Supply 3,626 3,778 3,914 4,031 4,146 4,246 Change from Prior Year ( %) 4.1 4.2 3.6 3.0 2.9 2.4 Average Daily Rate ($) 74.76 78.19 81.41 85.06 97.00 97.00 Change from Prior Year ( %) 5.9 4.6 4.1 4.50 14.0 0.0 RevPAR Percent Change ( %) 5.1 3.5 3.2 5.60 3.50 3.80 Real RevPAR Percent Change ( %) 2.7 1.9 1.0 2.40 0.06 0.07 (Sources: PricewaterhouseCoopers L.L.P. (2000 to 2002): Smith Travel Research (1997 to 1999) ' Occupancy Average Daily Rate 1999 2000 2001 1999 2000 2001 Actual Estimated Actual Estimated Minneapolis 65.3% 68.8% 63.4% $97.00 $101.00 $97.71 ' Total US Cities 70.6% 71.4% 71.8% $116.76 $120.93 $124.95 Average property size 200 rooms (Source: The Hospitality Research Group of PKF Consulting) 33 PROPOSED HOTEL DEVELOPMENT - BROOKLYN CENTER MINNESOTA ' COMPETITIVE ANALYSIS BROOKLYN CENTER COMPETITIVE SET ' The competitive area radius will include Brooklyn Center, Brooklyn Park, Fridley, Maple Grove, Golden Valley, St. Louis Park, Plymouth, Minnetonka and northernmost Minneapolis as it is anticipated that rooms market share will be drawn from each of these locations. ' Brooklyn Center has one competitive property within the city limits and seemingly with the EBF conference center has the opportunity to create demand to fill rooms. The competitive set on the following pages was established in ' terms of similar product, rate and offered amenities to the proposed Brooklyn Center hotel. Brooklvn Center Accommodations Rate Amenities Recreational Meeting Competitive Set Descriptions Range Facilities Hilton Hotel 176 rooms (1985) $99— Full Service Pool 8,000 s.f. 120 Brooklyn Park Accommodations Rate Meeting Competitive Set Descriptions Range Amenities Recreational Facilities Northland Inn 231 Rooms $125 Full Service Pool 46,000 s.f. of full (1989) service mtg rooms Accommodations Rate Meeting Fridley Competitive Set Descriptions tions Range Amenities Recreational Facilities Not applicable ' ( Maple Grove Accommodations Rate Amenities Recreational Meeting Competitive Set Descriptions Range Facilities Not applicable Golden Vallev Accommodations Rate Amenities Recreational Meeting Competitive Set Descriptions Range Facilities ' Not Applicable Northern Minneapolis Accommodations Rate Meeting ' Competitive Set Descriptions Range Amenities Recreational Facilities Not Applicable ' Plvmouth Accommodations Rate Amenities Recreational Meeting Competitive Set Descriptions Ra Facilities Radisson Hotel 243 rooms (1987) $99- Full Service Pool 36,000 s.f. 105 Minnetonka Accommodations Rate Amenities Recreational Meeting ' Competitive Set Descriptions Range Facilities Marriot Hotel 320 rooms (1988) $105 Full Service Pool 10,000 s.f. —125 St. Louis Park Accommodations Rate Meeting Competitive Set Descriptions Range Amenities Recreational Facilities Doubletree 297 rooms (1987) $99— Full Service Pool 22,000 s.f. l 115 ' 34 PROPOSED HOTEL DEVELOPMENT - BROOKI,YN CENTER. MIN_NE_ SOT_ A COMPETITIVE ANALYSIS ' Projected Business Mix and Occupancy Determining the best business mix is essential in not only maximizing rate opportunity but also maximizing occupancy during all demand periods. The Corporate market segment is the "base" business year - round. Demand ' generators expect availability during all demand periods. The Leisure segment can be maximized, however, displacement of key corporate accounts during the Leisure high demand period could materialize and loss of corporate business /loyalty result. ' The first two operating years projected below suggests percentages of mix and room night consumption. It has been determined that occupancy stabilization should occur by the end of year two. This is subject to change as the ' proposed hotel may experience fluctuation in segment demand and realize additional opportunity in management of yield. The proposed Brooklyn Center hotel anticipates generating 25 percent of budgeted revenues through Leisure market segment. 20% of budgeted revenues are expected to achieve through the development of the Corporate market segment and 50 percent conference segment. The remaining 5% will be generated by all other segments ' including, but not limited to Group, SMERF, Government and Tour. Year One Segment Segment Inclusions Room Charge % of Mix (81% Occ) Leisure Visitors to the area; walk -in trade 18,292 25% ' Corporate Corporations/businesses within a 25 -mile 14,633 20% radius; ' Conference Groups of 10+ persons using the Earle Brown 36,584 50% Conference Center next door. ' Other Extended stay (relocations, training), 3,658 5% Government, SMERF. 35 � 0 Mow; T H E H 0 S T S T U D Y i i i � Hotel ' 2002 �n � REPORT FOR StdhShCS � THE YEAR 2ooi S�ffi Travel Resmrch 1 Full- Service Hotels- Statements of Operating Income & Expenses - 2001 Independent Occupancy (of Sample) 64.7% 65.2% 58.9% ' Average Size Of Property (Rooms) 295 302 234 Average Daily Rate (of Sample) $128.34 $126.99 $144.54 Ratio Per Per Ratio Per Per Ratio Per Per ' to Available Occupied to Available Occupied to Available Occupied Sales Room Room Night Sales Room Room Night Sales Room Room Night REVENUE Rooms 62.1 % $ 29,893 $128.34 63.3 % $ 29,825 $126.99 50.5 % $ 30,860 $144.54 Food 19.8 9,541 40.96 19.4 9,127 38.86 23.2 14,133 66.20 Beverage 4.7 2,250 9.66 4.6 2,149 9.15 5.5 3,372 15.79 Other Food & Beverage 4.5 2,174 9.33 4.6 2,142 9.12 4.2 2,544 11.91 Telecommunications 2.0 943 4.05 2.0 947 4.03 1.5 902 4.23 ' Other Operated Departments 4.6 2 9.43 3.8 1,775 7.56 11.2 6,815 31.92 Rentals & Other Income 2.3 1,106 4.75 2.2 1,034 4.40 3.1 1,901 8.90 Cancellation Fee .2 97 .42 .1 60 .25 .8 501 2.35 Total Revenue 100.0 % $ 48,200 $ 206.94 100.0 % $ 47,059 $ 200.36 100.0 % $ 61,028 $ 285.84 ' DEPARTMENTAL EXPENSES Rooms 25.3 % $ 7,571 $ 32.50 25.2 % $ 7,524 $ 32.03 26.4 % $ 8,142 $ 38.14 Food & Beverage 75.5 10,540 45.25 75.6 10,147 43.20 74.4 14,916 69.86 ' T elecommunications 50.5 477 2.05 49.7 471 2.01 59.8 539 2.53 ther Operated Depts & Rentals 3.2 1,550 6.65 2.5 1,191 5.07 9.0 5,476 25.65 otal Departmental Expenses 41.8 % $ 20,138 $ 86.45 41.1 % $19,333 $ 82.31 47.6 % $ 29,073 $136.18 ' Total Departmental Profit 58.2 % $ 28,062 $120.49 58.9 % $ 27,726 $118.05 52.4 % $ 31,955 $149.66 UNDISTRIBUTED OPERATING EXPENSES Administrative & General 8.2 % $ 3,952 $ 16.97 8.1 % $ 3,802 $ 16.19 9.2 % $ 5,622 $ 26.33 Marketing 6.4 3,107 13.34 6.4 3,033 12.91 6.5 3,940 18.45 ' Utility Costs 3.7 1,796 7.71 3.7 1,756 7.48 3.7 2,249 10.54 Property Operations & Maintenance 4.7 2,273 9.76 4.7 2 9.36 5.1 3,108 14.56 Total Undistributed Operating Expenses 23.1 % $11,128 $ 47.78 22.9 % $10,789 $ 45.94 24.4 % $14,919 $ 69.88 GROSS OPERATING PROFIT 35.1 % $16,934 $ 72.71 36.0 % $16,937 $ 72.11 28.0 % $ 17,036 $ 79.78 Franchise Fees (Royalty) .5 250 1.07 .6 273 1.16 .0 7 .03 Management Fees 3.1 % $ 1,516 $6.51 3.3 % $ 1,567 $6.67 1.6 % $ 966 $4.53 ' INCOME BEFORE FIXED CHARGES 31.5 % $ 15,168 $ 65.13 32.1 % $ 15,097 $ 64.28 26.3 % $ 16,063 $ 75.22 Selected Fixed Charges Property Taxes 3.3 % $ 1,593 $6.84 3.4 % $ 1,588 $6.76 2.7 % $ 1,661 $7.78 Insurance .7 339 1.46 .7 326 1.39 .8 490 2.29 Reserve For Capital Replacement 1.7 822 3.53 1.7 813 3.46 1.5 922 4.32 AMOUNT AVAILABLE FOR DEBT SERVICE & OTHER FIXED CHARGES" 25.8 % $12,414 $ 53.30 26.3 % $12,370 $ 52.67 21.3 % $12,990 $ 60.83 PAYROLL & RELATED EXPENSES`* Rooms 16.8 % $ 4,273 $ 18.70 16.4 % $ 4,120 $ 17.72 20.7 % $ 5,578 $ 27.08 Food & Beverage 43.5 4,663 20.77 43.5 4,315 18.82 43.5 7,622 37.33 Telecommunications 30.5 277 1.19 29.6 276 1.17 38.0 291 1.31 Other Operated Departments 1.8 1,192 5.61 1.3 856 3.80 4.4 3,270 16.79 Administrative & General 4.8 1,871 8.36 4.7 1,729 7.53 5.7 3,096 15.53 Marketing 2.7 1,025 4.65 2.6 944 4.21 3.3 1,766 8.72 Property Operations & Maintenance 2.5 964 4.33 2.4 890 3.91 3.0 1,610 7.98 Total Payroll & Related Expenses 32.9 % $13,456 $ 59.83 32.1 % $12,533 $ 54.52 39.2 % $ 21,270 $104.75 ' Other Fixed Charges include Depreciation and Amortization, Interest, Rent, and Equipment Leases. Included in above expenses. Only shown here for additional detail. Expense ratios to sales for departmental expenses are based on their respective departmental revenues. All other expenses are based on total revenue. Totals may not add due to rounding. 27 R. Full- Service Hotels- Statements of Operating Income & Expenses - 2001 Ge Reg ion Ratios to Sales New Middle South East North East South West North West South ' England Atlantic Atlantic Central Central Central Central Mountain Pacific Occupancy (of Sample) 64.1% 68.1% 64.3% 61.2% 61.0% 63.0% 64.3% 62.6% 67.1% Average Size Of Property (Rooms) 252 307 287 277 271 269 327 249 342 ' Average Daily Rate (of Sample) $141.09 $159.56 $121.46 $116.47 $102.23 $ 97.71 $115.78 $115.04 $141.66 REVENUE Rooms 64.4 % 63.5 % 62.8 % 63.1 % 60.7 % 63.4 % 60.7 % 55.0 % 62.1 % Food 20.1 19.7 20.0 19.8 20.3 21.2 16.4 22.4 19.8 ' Beverage 4.4 5.4 4.4 4.9 4.0 4.5 3.5 5.2 4.7 Other Food & Beverage 4.0 4.4 4.9 5.0 4.6 3.9 6.2 5.0 3.5 Telecommunications 2.0 2.1 2.0 2.0 1.8 1.6 2.0 1.7 1.9 Other Operated Departments 3.8 2.8 3.5 3.1 4.1 3.3 9.4 7.8 4.6 ' Rentals & Other Income 1.3 1.9 2.1 2.0 4.2 1.9 1.5 2.4 3.2 Cancellation Fee .0 .1 .2 .1 .4 .1 .3 .5 .1 Total Revenue 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % ' DEPARTMENTAL EXPENSES Rooms 23.9 % 27.6 % 24.5 % 25.3 % 24.9 % 26.0 % 22.5 % 25.5 % 25.9 % Food & Beverage 74.8 79.4 73.2 73.0 73.6 76.4 71.9 73.1 78.4 Telecommunications 47.1 51.7 53.1 50.7 60.2 67.1 50.6 49.4 45.6 ' Other Operated Dept, & Rentals 2.4 2.0 2.7 2.4 5.5 2.9 2.5 6.2 4.0 Total Departmental Expenses 40.0 % 44.2 % 40.6 % 41.1 % 42.9 % 43.1 % 35.9 % 44.9 % 42.9 % Total Departmental Profit 60.0 % 55.8 % 59.4 % 58.9 % 57.1 % 56.9 % 64.1 % 55.1 % 57.1 % ' UNDISTRIBUTED OPERATING EXPENSES Administrative & General 8.4 % 7.9 % 8.4 % 8.9 % 8.9 % 9.0 % 7.6 % 8.3 % 7.9 % Marketing 6.4 6.1 6.7 6.8 6.4 6.5 6.2 7.1 6.2 Utility Costs 4.4 3.8 3.7 3.6 4.1 4.5 3.9 3.5 3.4 ' Property Operations & Maintenance 4.3 4.5 4.8 5.1 5.2 5.0 4.4 5.0 4.6 Total Undistributed Operating Expenses 23.6 % 22.4 % 23.6 % 24.4 % 24.6 % 25.1 % 22.1 % 23.9 % 22.2 % GROSS OPERATING PROFIT 36.4 % 33.4 % 35.8 % 34.5 % 32.5 % 31.8 % 42.0 % 31.2 % 34.9 % Franchise Fees (Royalty) .5 .4 .6 .7 1.1 .8 .5 .5 .4 Management Fees 3.2 % 2.5 % 3.7 % 3.4 % 3.4 % 3.1 % 3.6 % 3.2 % 2.8 % INCOME BEFORE FIXED CHARGES 32.8 % 30.6 % 31.5 % 30.4 % 28.1 % 27.9 % 37.9 % 27.6 % 31.8 % Selected Fixed Charges Property Taxes 3.9 % 4.2 % 3.0 % 5.1 % 3.2 % 3.6 % 3.0 % 3.2 % 2.3 % Insurance .6 .5 .7 .6 .6 .7 .7 .6 .9 ' Reserve For Capital Replacement 1.6 1.7 1.8 1.6 1.1 1.3 1.9 2.0 1.6 AMOUNT AVAILABLE FOR DEBT SERVICE & OTHER FIXED CHARGES* 26.7 % 24.2 % 26.0 % 23.1 % 23.2 % 22.3 % 32.3 % 21.8 % 27.0 % PAYROLL & RELATED EXPENSES ** Rooms 16.2% 17.7% 16.3% 17.3% 17.3% 17.4% 14.6% 17.1 % 17.7% ' Food & Beverage 44.0 45.4 43.5 43.2 45.0 44.9 40.1 42.5 43.9 Telecommunications 25.3 32.7 30.0 31.6 28.4 36.3 30.9 26.1 31.3 Other Operated Departments 1.9 1.5 1.8 1.7 1.2 1.8 1.2 2.5 1.8 Administrative & General 4.6 4.5 4.8 5.1 4.9 4.9 4.9 4.9 4.9 Marketing 2.6 2.4 2.7 2.7 2.7 2.7 2.9 3.0 2.5 ' Property Operations & Maintenance 2.1 2.4 2.5 2.7 2.6 2.5 2.4 2.5 2.5 Total Payroll & Related Expenses 32.0 % 34.0 % 32.0 % 33.7 % 32.3 % 34.2 % 30.1 % 33.6 % 33.7 % Other Fixed Charges include Depreciation and Amortization, Interest, Rent, and Equipment Leases. ** Included in above expenses. Only shown here for additional detail. Expense ratios to sales for departmental expenses are based on their respective departmental revenues. All other expenses are based on total revenue. Totals may not add due to rounding. ' 28 - Price go L Location Under 150 150 to 300 300 to 500 Over 500 ' Urban Suburban Airport Highway Resort Luxury Upscale Mid -Price Economy* ** Rooms Rooms Rooms Rooms 66.0% 62.3% 68.4% 62.2% 64.0% 65.8% 63.9% 61.7% 64.0% 65.1% 62.5% 64.5% 66.9 423 246 278 181 395 392 239 202 217 123 215 380 839 ' $148.34 $109.99 $104.94 $ 91.03 $169.00 $148.60 $110.54 $ 85.30 $ 74.99 $ 93.61 $106.08 $130.34 $159.07 64.3 % 63.6 % 67.8 % 63.3 % 53.8 % 59.9 % 65.2 % 69.6 % 69.0 % 72.1 % 64.3 % 60.5 % 60.1 % ' 19.1 20.3 17.9 15.3 22.8 20.5 18.8 17.1 16.8 13.8 18.4 20.5 21.1 4.8 4.3 3.7 3.7 5.7 4.9 4.4 3.9 4.1 3.9 4.3 4.4 5.2 4.6 5.7 5.1 4.4 3.1 4.6 4.5 3.8 4.8 4.6 3.7 5.9 4.0 2.3 2.0 2.0 1.5 1.6 2.0 1.8 1.7 1.6 1.7 1.8 2.0 2.1 2.6 2.3 1.8 10.4 9.0 5.2 3.6 2.6 2.0 2.5 5.9 4.5 4.1 2.2 1.6 1.7 1.2 3.6 2.6 1.6 1.3 1.5 1.2 1.6 1.9 3.2 .2 .2 .0 .3 .3 .2 .2 .1 .1 .1 .1 .3 .2 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ' 26.0 % 24.9% 25.8 % 24.2 % 24.8 % 24.7 % 26.1 % 27.2 % 29.5 % 25.3 % 25.7% 24.7% 25.5 % 78.6 73.9 72.7 75.5 73.8 74.1 78.2 79.9 80.0 79.7 77.4 73.9 75.1 48.6 50.6 54.6 56.1 50.3 47.8 54.5 64.4 79.6 49.4 54.7 52.0 47.7 2.0 2.0 1.6 2.1 7.5 3.6 2.8 1.6 1.4 1.8 2.8 3.6 3.5 42.1% 41.1% 39.5% 35.9% 45.0% 41.6% 42.4% 41.3% 43.6% 38.6% 40.7% 42.4% 42.5% 57.9% 58.9% 60.5% 64.1% 55.0% 58.4% 57.6% 58.7% 56.4% 61.4% 59.3% 57.6% 57.5% 8.1 % 9.0 % 8.7 % 8.4 % 7.3 % 7.9 % 8.7 % 9.4 % 9.0 % 9.8 % 9.1 % 8.5 % 7.2 % 6.4 7.0 6.7 6.0 6.1 6.3 6.6 6.9 7.3 6.0 7.0 6.9 5.9 3.7 4.0 3.7 4.1 3.4 3.4 4.1 4.9 5.9 4.3 4.2 3.7 3.4 4.5 4.8 4.7 4.8 4.8 4.5 5.0 5.5 6.1 5.4 4.9 4.6 4.6 22.7% 24.8% 23.8% 23.3% 21.7% 22.1% 24.4% 26.7% 28.4% 25.4% 25.2% 23.6% 21.1% 35.2 % 34.1 % 36.7 % 40.8 % 33.3 % 36.3 % 33.2 % 32.0 % 28.0 % 36.0 % 34.1 % 34.0 % 36.4 % 3 .7 .9 1.6 .2 .3 .9 1.6 1.1 .9 1.3 .5 .1 3.1 % 3.3 % 3.5 % 3.5 % 2.8 % 3.3 % 2.9 % 3.1 % 3.0 % 3.4 % 2.8 % 3.3 % 3.2 % 31.8 % 30.1 % 32.3 % 35.8 % 30.4 % 32.8 % 29.4 % 27.4 % 23.9 % 31.7 % 30.0 % 30.2 % 33.2 % 4.0% 3.2% 3.2% 2.6% 2.6% 3.3% 3.2% 3.5% 1.9% 3.0% 2.8% 3.2% 3.7% 6 .7 .8 .7 .7 .7 .8 .9 1.0 .7 .8 .7 .7 ' 1.5 2.2 2.1 1.9 1.3 1.6 1.9 2.0 2.1 3.1 1.6 1.8 1.4 25.7 % 24.0% 26.2 % 30.6 % 25.8 % 27.2 % 23.5 % 21.0% 18.9 % 24.9% 24.8 % 24.5 % 27.4% 16.9 % 16.6 % 16.5 % 17.3 % 17.0 % 15.4 % 17.3 % 18.6 % 21.5 % 17.7 % 17.0 % 15.9 % 16.0 % ' 45.8 42.2 43.5 44.0 41.5 41.1 44.3 46.8 49.9 46.8 43.6 39.8 42.9 31.8 27.2 34.0 29.3 31.1 28.4 32.8 33.3 67.0 36.2 26.8 31.8 34.0 1.1 1.3 .8 2.3 4.0 1.6 2.2 1.3 1.9 2.5 2.0 1.6 1.4 4.9 4.9 4.9 4.9 4.5 4.5 5.0 5.2 5.4 5.1 5.0 4.8 4.1 2.8 2.8 2.5 2.5 2.6 2.5 2.6 2.9 3.7 2.1 2.9 2.9 2.4 2.5 2.4 2.3 2.5 2.8 2.3 2.5 2.8 3.3 2.5 2.5 2.4 2.6 34.5% 32.5% 31.4% 31.6% 35.0% 31.8% 33.2% 34.2% 37.0% 31.0% 33.3% 33.7% 34.0% Full Service Budget and Economy properties are grouped together. 29 Full- Service Hotels - Statements of Operating Income & Expenses - 2001 Geo g r aphic R Dollars Per Available Room New Middle South East North East South West North West South England Atlantic Atlantic Central Central Central Central Mountain Pacific Occupancy (of Sample) 64.1% 68.1% 64.3% 61.2% 61.0% 63.0% 64.3% 62.6% 67.1% Average Size Of Property (Rooms) 252 307 287 277 271 269 327 249 342 ' Average Daily Rate (of Sample) $141.09 $159.56 $121.46 $116.47 $102.23 $ 97.71 $115.78 $115.04 $141.66 REVENUE Rooms $ 32,567 $ 39,147 $ 28,256 $ 25,481 $ 22,687 $ 22,438 $ 26,857 $ 26,141 $ 34,121 Food 10,148 12,156 9,004 7,987 7,598 7,509 7,233 10,624 10,877 Beverage 2,225 3,349 1,993 1 1,477 1,601 1,570 2,463 2,600 Other Food & Beverage 2,027 2,723 2,188 2,007 1,705 1,393 2,735 2,379 1,910 Telecommunications 1,008 1,323 895 818 677 552 880 823 1,049 Other Operated Departments 1,941 1,700 1,584 1,244 1,543 1,184 4,139 3,716 2,499 ' Rentals & Other Income 655 1,156 943 788 1,561 668 667 1,150 1,752 Cancellation Fee 24 81 103 53 132 31 150 216 79 Total Revenue $ 50,595 $ 61,635 $ 44,966 $ 40,369 $ 37,380 $ 35,376 $ 44,231 $ 47,512 $ 54,887 ' DEPARTMENTAL EXPENSES Rooms $ 7,786 $ 10,790 $ 6,932 $ 6,457 $ 5,647 $ 5,829 $ 6,055 $ 6,675 $ 8,840 Food & Beverage 10,774 14,475 9,648 8,750 7,932 8,027 8,299 11,301 12,066 Telecommunications 475 684 475 415 408 371 446 406 478 Other Operated Depts & Rentals 1,199 1,279 1,202 988 2,03 1,013 1,097 2,950 2,181 Total Departmental Expenses $ 20,234 $ 27,228 $18,257 $16,610 $16,019 $15,240 $15,897 $ 21,332 $ 23,565 Total Departmental Profit $ 30,361 $ 34,407 $ 26,709 $ 23,759 $ 21,361 $ 20,136 $ 28,334 $ 26,180 $ 31,322 ' UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 4,238 $ 4,879 $ 3,790 $ 3,586 $ 3,308 $ 3,191 $ 3,341 $ 3,942 $ 4,336 Marketing 3,258 3,770 3,031 2,731 2,391 2,313 2,732 3,363 3,387 Utility Costs 2,238 2,346 1,644 1,448 1,535 1,602 1,745 1,669 1,893 Property Operations & Maintenance 2,198 2,793 2,150 2,075 1,944 1,773 1,952 2,358 2,543 Total Undistributed Operating Expenses $11,932 $13,788 $10,615 $ 9,840 $ 9,178 $ 8,879 $ 9,770 $11,332 $12,159 GROSS OPERATING PROFIT $18,429 $ 20,619 $16,094 $ 13,919 $12,183 $11,257 $ 18,564 $14,848 $19,163 Franchise Fees (Royalty) $ 237 $ 228 $ 279 $ 271 $ 427 $ 283 $ 233 $ 221 $ 211 Management Fees $ 1,618 $ 1,529 $ 1,668 $ 1,360 $ 1,256 $ 1,109 $ 1,583 $ 1,500 $ 1,522 ' INCOME BEFORE FIXED CHARGES $16,574 $ 18,862 $ 14,147 $ 12,288 $10,500 $ 9,865 $16,748 $13,127 $ 17,430 Selected Fixed Charges Property Taxes $ 1,976 $ 2,580 $ 1,360 $ 2,050 $ 1,187 $ 1,265 $ 1,344 $ 1,510 $ 1,274 Insurance 305 338 322 240 240 249 309 306 484 ' Reserve For Capital Replacement $ 812 $ 1,063 $ 821 $ 639 $ 425 $ 454 $ 840 $ 935 $ 891 AMOUNT AVAILABLE FOR DEBT SERVICE & OTHER FIXED CHARGES* $13,481 $ 14,881 $11,644 $ 9,359 $ 8,648 $ 7,897 $14,255 $10,376 $14,781 ' PAYROLL & RELATED EXPENSES ** Rooms $ 4,527 $ 5,574 $ 3,967 $ 3,737 $ 3,138 $ 3,528 $ 3,386 $ 4,015 $ 5,153 ' Food & Beverage 5,179 6,551 4,285 3,952 2,579 3,718 3,445 4,991 5,404 Telecommunications 253 466 280 218 194 208 247 213 290 Other Operated Departments 1,145 1,273 1,109 844 576 899 670 1,984 1,406 Administrative & General 2,026 2,211 1,799 1,698 1,272 1,557 1,651 1,830 2,157 Marketing 1,156 1,151 1 884 751 859 964 1,104 1,108 Property Operations & Maintenance 941 1,205 887 902 673 780 817 967 1,152 Total Payroll & Related Expenses $14,450 $17,545 $12,532 $11,607 $ 8,593 $10,972 $10,663 $13,765 $15,951 Other Fixed Charges include Depreciation and Amortization, Interest, Rent, and Equipment Leases. Included in above expenses. Only shown here for additional detail. Expense ratios to sales for departmental expenses are based on their respective departmental revenues. All other expenses are based on total revenue. Totals may not add due to rounding. ' 30 Location Price Category Under 150 150 to 300 300 to 500 Over 500 ' Urban Suburban Airport Highway Resort Luxury Upscale Mid -Price Economy* ** Rooms Rooms Rooms Rooms 66.0% 62.3% 68.4% 62.2% 64.0% 65.8% 63.9% 61.7% 64.0% 65.1% 62.5% 64.5% 66.9 423 246 278 181 395 392 239 202 217 123 215 380 839 ' $148.34 $109.99 $104.94 $ 91.03 $169.00 $148.60 $110.54 $ 85.30 $ 74.99 $ 93.61 $106.08 $130.34 $159.07 $ 35,188 $ 24,700 $ 26,018 $ 20,407 $ 39,166 $ 35,499 $ 25,210 $ 19,028 $ 16,101 $ 22,064 $ 23,927 $ 30,170 $ 38,365 10,484 7,884 6,891 4,947 16,600 12,120 7,282 4,677 3,923 4,232 6,862 10,211 13,461 2,611 1,662 1,419 1,184 4,154 2,881 1,688 1,068 964 1,196 1,615 2,195 3,299 2,513 2,223 1,941 1,405 2,249 2,725 1,725 1,033 1,108 1,414 1,380 2,964 2,534 1,258 772 774 470 1,130 1,211 702 452 369 507 652 988 1,345 1,420 906 694 3,354 6,526 3,057 1,374 716 477 769 2,195 2,263 2 1,230 638 649 385 2,642 1,567 637 362 353 378 583 934 2,034 95 61 17 97 238 132 67 28 18 44 48 132 132 $ 54,799 $ 38,846 $ 38,403 $ 32,249 $ 72,705 $ 59,192 $ 38,685 $ 27,364 $ 23,313 $ 30,604 $ 37,262 $ 49,857 $ 63,797 $ 9,134 $ 6,145 $ 6,708 $ 4,940 $ 9,711 $ 8,776 $ 6,578 $ 5,185 $ 4,755 $ 5,588 $ 6,150 $ 7 $ 9,782 12,264 8,695 7,450 5,692 16,982 13,135 8,364 5,417 4,795 5,454 7,633 11,359 14,485 611 391 423 264 568 579 383 291 293 250 357 514 642 1,071 752 605 678 5,449 2,115 1,078 418 321 531 1,044 1,795 2,190 $ 23,080 $15,983 $15,186 $11,574 $ 32,710 $ 24,605 $16,403 $11,311 $10,164 $11,823 $15,184 $ 21,134 $ 27,099 $ 31,719 $ 22,863 $ 23,217 $ 20,675 $ 39,995 $ 34,587 $ 22,282 $16,053 $13,149 $18,781 $ 22,078 $ 28,723 $ 36,698 $ 4,459 $ 3,480 $ 3,329 $ 2,722 $ 5,300 $ 4,658 $ 3,369 $ 2,579 $ 2,101 $ 2,987 $ 3,388 $ 4,234 $ 4,604 3,482 2,705 2,585 1,930 4,462 3 2,564 1,878 1,706 1,824 2,620 3,419 3,763 2,019 1,563 1,409 1,312 2 2,038 1,582 1,334 1,382 1,307 1,555 1,830 2,177 2,491 1,883 1,818 1,555 3,496 2,670 1,934 1,502 1,422 1,649 1,837 2,284 2,916 $12,451 $ 9,631 $ 9,141 $ 7,519 $15,757 $13,109 $ 9,449 $ 7,293 $ 6,611 $ 7,767 $ 9,400 $11,767 $13,460 $ 19,268 $ 13,232 $ 14,076 $13,156 $ 24,238 $ 21,478 $ 12,833 $ 8,760 $ 6,538 $11,014 $12,678 $16,956 $ 23,238 $ 166 $ 265 $ 342 $ 501 $ 116 $153 $ 345 $ 439 $ 267 $ 265 $ 468 $ 229 $ 47 $ 1,703 $ 1,273 $ 1,329 $ 1,120 $ 2,040 $ 1,931 $ 1,107 $ 836 $ 693 $ 1,046 $ 1,036 $ 1,657 $ 2,034 $17,399 $11,694 $ 12,405 $11,535 $ 22,082 $19,394 $ 11,381 $ 7,485 $ 5,578 $ 9,703 $11,174 $ 15,070 $ 21,157 $ 2,1% $ 1,229 $ 1,247 $ 830 $ 1,923 $ 1,972 $ 1,251 $ 955 $ 442 $ 930 $ 1,035 $ 1,590 $ 2,385 350 288 297 235 527 389 296 248 228 211 294 350 420 ' $ 842 $ 841 $ 820 $ 613 $ 916 $ 937 $ 746 $ 552 $ 482 $ 950 $ 597 $ 916 $ 921 $14,011 $ 9,336 $ 10,041 $ 9,857 $18,716 $16,096 $ 91088 $ 5,730 $ 4,426 $ 7,612 $ 9 $12,214 $17,431 $ 5,253 $ 3,828 $ 3,894 $ 3,317 $ 5,746 $ 5 $ 3,892 $ 3,298 $ 3,323 $ 3,958 $ 3,897 $ 4,630 $ 5,775 ' 6,018 4,167 3,212 2,895 8,325 6,304 3,872 2,736 2,683 3,310 3,935 5,981 7,924 365 211 250 155 311 318 219 189 306 276 212 285 384 614 762 357 1,259 3,257 1,240 1,236 623 1,258 1,701 1,256 1,082 1,088 2,181 1,769 1,610 1,388 2,733 2,320 1,689 1,318 1,155 1,670 1,707 2,214 2 1,238 984 821 693 1,548 1,291 906 704 668 712 990 1,293 1,322 1,138 847 751 692 1,696 1,216 848 678 615 811 848 1,107 1,486 $16,605 $11,981 $10,624 $ 9,117 $ 22,668 $17,445 $11,697 $ 8,755 $ 8,307 $10,525 $11,887 $16,478 $ 20,473 Full Service Budget and Economy properties are grouped together. ' 31 r Full- Service Hotels- Statements of Operating Income & Expenses - 2001 Ge Dollars Per Occupied Room New Middle South East North East South West North West South ' England Atlantic Atlantic Central Central Central Central Mountain Pacific Occupancy (of Sample) 64.1% 68.1% 64.3% 61.2% 61.0% 63.0% 64.3% 62.6% 67.1% Average Size Of Property (Rooms) 252 307 287 277 271 269 327 249 342 ' Average Daily Rate (of Sample) $141.09 $159.56 $121.46 $116.47 $102.23 $ 97.71 $115.78 $115.04 $141.66 REVENUE Rooms $ 141.09 $ 159.55 $121.45 $116.47 $102.23 $ 97.71 $ 115.77 $ 115.04 $141.66 Food 43.96 49.55 38.71 36.51 34.24 32.70 31.18 46.75 45.16 r Beverage 9.64 13.65 8.57 9.10 6.65 6.97 6.77 10.84 10.79 Other Food & Beverage 8.78 11.10 9.41 9.17 7.68 6.07 11.79 10.47 7.93 Telecommunications 4.37 5.39 3.85 3.74 3.05 2.40 3.80 3.62 4.36 Other Operated Departments 8.41 6.93 6.81 5.68 6.95 5.15 17.84 16.35 10.37 ' Rentals & Other Income 2.84 4.71 4.05 3.60 7.04 2.91 2.87 5.06 7.27 Cancellation Fee . .33 .44 .24 .60 .13 .64 .95 .33 Total Revenue $ 219.19 $ 251.21 $193.29 $184.51 $168.44 $154.04 $190.66 $ 209.08 $ 227.87 ' DEPARTMENTAL EXPENSES Rooms $ 33.73 $ 43.98 $ 29.80 $ 29.51 $ 25.45 $ 25.38 $ 26.10 $ 29.38 $ 36.70 Food & Beverage 46.68 59.00 41.47 39.99 35.74 34.96 35.78 49.73 50.10 Telecommunications 2.06 2.79 2.04 1.90 1.84 1.61 1.92 1.79 1.98 r Other Operated Depts & Rentals 5.20 5.21 5.17 4.52 9.16 4.42 4.73 12.99 9.06 Total Departmental Expenses $ 87.67 $110.98 $ 78.48 $ 75.92 $ 72.19 $ 66.37 $ 68.53 $ 93.89 $ 97.84 Total Departmental Profit $131.52 $140.23 $114.81 $108.59 $ 96.25 $ 87.67 $122.13 $115.19 $130.03 ' UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 18.36 $ 19.89 $ 16.29 $ 16.39 $ 14.91 $ 13.89 $ 14.40 $ 17.35 $ 18.00 Marketing 14.11 15.37 13.03 12.48 10.77 10.07 11.78 14.80 14.06 Utility Costs 9.70 9.56 7.07 6.62 6.92 6.98 7.52 7.35 7.86 Property Operations & Maintenance 9.52 11.38 9.24 9.48 8.76 7.72 8.42 10.38 10.56 Total Undistributed Operating Expenses $ 51.69 $ 56.20 $ 45.63 $ 44.97 $ 41.36 $ 38.66 $ 42.12 $ 49.88 $ 50.48 GROSS OPERATING PROFIT $ 79.83 $ 84.03 $ 69.18 $ 63.62 $ 54.89 $ 49.01 $ 80.01 $ 65.31 $ 79.55 Franchise Fees (Royalty) $1.03 $ .93 $1.20 $1.24 $1.92 $1.23 $1.01 $ .97 $ .87 Management Fees $7.01 $6.23 $7.17 $6.22 $5.66 $4.83 $6.83 $6.60 $6.32 INCOME BEFORE FIXED CHARGES $ 71.79 $ 76.87 $ 60.81 $ 56.16 $ 47.31 $ 42.95 $ 72.17 $ 57.74 $ 72.36 ' Selected Fixed Charges Property Taxes $8.56 $ 10.51 $5.84 $9.37 $5.35 $5.51 $5.80 $6.65 $5.29 Insurance 1.32 1.38 1.38 1.10 1.08 1.08 1.33 1.35 2.01 ' Reserve For Capital Replacement $3.52 $4.33 $3.53 $2.92 $1.92 $1.98 $3.62 $4.12 $3.70 AMOUNT AVAILABLE FOR DEBT SERVICE & OTHER FIXED CHARGES* $ 58.39 $ 60.65 $ 50.06 $ 42.77 $ 38.96 $ 34.38 $ 61.42 $ 45.62 $ 61.36 i PAYROLL & RELATED EXPENSES ** Rooms $ 20.26 $ 23.56 $ 17.08 $ 17.40 $ 14.28 $ 15.30 $ 14.68 $ 18.13 $ 22.30 Food & Beverage 23.45 28.16 18.94 18.63 11.87 16.41 15.49 22.88 23.65 Telecommunications 1.08 1.86 1.20 1.07 .84 .89 1.08 .92 1.23 Other Operated Departments 5.74 5.82 5.64 4.35 2.42 3.96 3.01 8.86 6.36 Administrative & General 9.23 9.69 7.94 8.25 5.77 6.77 7.29 8.23 9.46 Marketing 5.26 5.12 4.53 4.43 3.46 3.83 4.32 5.05 4.90 Property Operations & Maintenance 4.30 5.26 3.94 4.40 3.11 3.46 3.62 4.35 5.06 Total Payroll & Related Expenses $ 65.51 $ 75.47 $ 55.26 $ 55.32 $ 39.23 $ 48.09 $ 47.16 $ 62.41 $ 69.69 Other Fixed Charges include Depreciation and Amortization, Interest, Rent, and Equipment Leases. ' ** Included in above expenses. Only shown here for additional detail. Expense ratios to sales for departmental expenses are based on their respective departmental revenues. All other expenses are based on total revenue. Totals may not add due to rounding. 32 1 Cate L Location Price Under 150 150 to 300 300 to 500 Over 500 ' Urban Suburban Airport Highway Resort Luxury Upscale Mid -Price Economy' Rooms Rooms Rooms Rooms 66.0% 62.3% 68.4% 62.2% 64.0% 65.8% 63.9% 61.7% 64.0% 65.1% 62.5% 64.5% 66.9 423 246 278 181 395 392 239 202 217 123 215 380 839 ' $148.34 $109.99 $104.94 $ 91.03 $169.00 $148.60 $110.54 $ 85.30 $ 74.99 $ 93.61 $106.08 $130.34 $159.07 $ 148.34 $ 109.99 $ 104.94 $ 91.03 $ 169.00 $ 148.60 $ 110.54 $ 85.30 $ 74.99 $ 93.61 $ 106.07 $ 130.34 $ 159.08 44.19 35.11 27.79 22.07 71.62 50.73 31.93 20.97 18.27 17.95 30.42 44.11 55.81 11.01 7.40 5.72 5.28 17.92 12.06 7.40 4.79 4.49 5.07 7.16 9.48 13.68 10.59 9.90 7.83 6.27 9.71 11.41 7.56 4.63 5.16 6.00 6.12 12.81 10.51 5.30 3.44 3.12 2.10 4.88 5.07 3.08 2.03 1.72 2.15 2.89 4.27 5.58 5.99 4.04 2.80 14.96 28.16 12.80 6.03 3.21 2.22 3.26 9.73 9.78 10.89 5.19 2.84 2.62 1.72 11.40 6.56 2.80 1.62 1.64 1.61 2.58 4.03 8.43 .40 .27 .07 .43 1.03 .55 .30 .12 .08 .19 .21 .57 .55 $ 231.01 $172.99 $154.89 $143.86 $ 313.72 $ 247.78 $169.64 $122.67 $108.57 $129.84 $165.18 $ 215.39 $ 264.53 $ 38.50 $ 27.37 $ 27.05 $ 22.04 $ 41.90 $ 36.74 $ 28.84 $ 23.24 $ 22.15 $ 23.71 $ 27.26 $ 32.25 $ 40.56 51.70 38.72 30.05 25.39 73.28 54.99 36.68 24.28 22.33 23.14 33.84 49.07 60.06 2.58 1.74 1.70 1.18 2.45 2.42 1.68 1.31 1.37 1.06 1.58 2.22 2.66 4.52 3.35 2.44 3.03 23.51 8.85 4.73 1.87 1.49 2.26 4.63 7.76 9.08 $ 97.30 $ 71.18 $ 61.24 $ 51.64 $141.14 $103.00 $ 71.93 $ 50.70 $ 47.34 $ 50.17 $ 67.31 $ 91.30 $112.36 $133.71 $101.81 $ 93.65 $ 92.22 $172.58 $144.78 $ 97.71 $ 71.97 $ 61.23 $ 79.67 $ 97.87 $124.09 $152.17 ' $ 18.80 $ 15.50 $ 13.43 $ 12.14 $ 22.87 $ 19.50 $ 14.77 $ 11.56 $9.79 $ 12.67 $ 15.02 $ 18.29 $ 19.09 14.68 12.04 10.43 8.61 19.25 15.67 11.25 8.42 7.94 7.74 11.61 14.77 15.60 8.51 6.96 5.68 5.85 10.78 8.53 6.94 5.98 6.44 5.55 6.89 7.91 9.03 10.50 8.38 7.33 6.94 15.08 11.18 8.48 6.73 6.62 7.00 8.15 9.87 12.09 $ 52.49 $ 42.88 $ 36.87 $ 33.54 $ 67.98 $ 54.88 $ 41.44 $ 32.69 $ 30.79 $ 32.96 $ 41.67 $ 50.84 $ 55.81 $ 81.22 $ 58.93 $ 56.78 $ 58.68 $104.60 $ 89.90 $ 56.27 $ 39.28 $ 30.44 $ 46.71 $ 56.20 $ 73.25 $ 96.36 $.70 $1.18 $1.38 $2.23 $30 $.64 $1.51 $1.97 $1.25 $1.12 $2.07 $.99 $.19 $7.18 $5.67 $5.36 $4.99 $8.80 $8.08 $4.86 $3.75 $3.23 $4.44 $4.59 $7.16 $8.43 ' $ 73.34 $ 52.08 $ 50.04 $ 51.46 $ 95.30 $ 81.18 $ 49.90 $ 33.56 $ 25.96 $ 41.15 $ 49.54 $ 65.10 $ 87.74 $9.26 $5.47 $5.03 $3.70 $8.30 $8.25 $5.49 $4.28 $2.06 $3.95 $4.59 $6.87 $9.89 1.48 1.28 1.20 1.05 2.27 1.63 1.30 1.11 1.06 .90 1.30 1.51 1.74 $3.55 $3.74 $3.31 $2.73 $3.95 $3.92 $3.27 $2.47 $2.24 $4.03 $2.65 $3.96 $3.82 $ 59.05 $ 41.59 $ 40.50 $ 43.98 $ 80.78 $ 67.38 $ 39.84 $ 25.70 $ 20.60 $ 32.27 $ 41.00 $ 52.76 $ 72.29 $ 22.47 $ 17.05 $ 15.93 $ 15.14 $ 25.87 $ 21.62 $ 17.49 $ 14.94 $ 16.27 $ 17.41 $ 17.41 $ 19.98 $ 24.26 25.95 18.85 13.24 13.76 38.01 27.27 17.77 12.71 13.90 15.17 17.97 26.15 33.58 1.54 .93 1.02 .70 1.35 1.35 .96 .79 1.73 1.22 .92 1.21 1.64 2.67 3.47 1.45 6.86 15.60 5.73 5.99 3.03 7.44 8.77 6.20 4.91 4.72 9.54 7.98 6.61 6.61 12.56 10.01 7.77 6.10 6.19 7.62 7.70 9.73 9.96 5.48 4.53 3.43 3.32 7.25 5.64 4.26 3.31 3.56 3.31 4.54 5.74 5.92 4.98 3.87 3.10 3.24 7.81 5.28 3.93 3.14 3.09 3.75 3.87 4.85 6.41 $ 71.73 $ 54.03 $ 43.69 $ 42.85 $103.86 $ 75.21 $ 53.53 $ 40.30 $ 42.47 $ 47.69 $ 53.91 $ 71.98 $ 87.31 Full Service Budget and Economy properties are grouped together. ' 33 2001 U.S. LODGING INDUSTRY Sources of Revenue ' ° Other Operated Dept. 3.8% Rentals &Other Income 2.0 /o ' Cancellation Fee 0.2% Telecommunications 1.6% Food and Beverage 18.5% ' Rooms 74.0% SOURCE: ®2002 SMITH TRAVEL RESEARCH ' Distribution of Expenses & Pre -Tax Income ' Franchise & Management Fees 4.2% Departmental Expenses 38.2% Pre -Tax Income 15.7% ' Fixed Charges 17.7% Undistributed Expenses 24.2% SOURCE: © 2002 SMITH TRAVEL RESEARCH ' 34 r r r r r rr rr rr r rr rr rr rr rr rr rr rr rr rr ( SM)fh Travel Research Standard Historical TREND lob: 73168 AK BROOKLYN CENTER, MN AiBa Selected Properties etrrlcusl Jant my 1996 - December 2002 Dat4w 02/1312003 Occupancy _ _ Roo thte _ _ _ R oom Su pply Room Demand Roo Revenue Census B: Sam % Year `Mends ! T1tis Tear 76 tL This Y % Ch8 This Year % Chg This Year X ChS Thh Year % C This Yev 9i Chg Census ProLu Census Rvoe»a 9i Rooms Sample 2000 ARBrch 73.0 115 96.47 5.9 69-69 31,961- 0.0 . 23,326 6.4 ' : 2,228,974 14.8 5 -- 1,031 100 -0 2000 April 67,4 -1.7 98.71 0.7 68 -49 4.8 30,930 0.0 20,834 -1.8 2,056,528 4.8 5 1,031 100.0 2000 May 70.3 10.2 99.85 8.8 "70.16 17.6 31;961 0,0 22,457 10.1 2;242,242 17 -6 5 1,031 100.0 2000 June 81.8 1017 103-58 8.3 8 17,7 30,630 0.0 25,304 10.7 2,620,363 17.7 5 1,031 100.0 2000 July 89.5 -4 - 102 5.7 , 70.94 1.0 . 31,961. . 0.0 22 _ - 4,5 ... 2 07,383 _ 0.9 5 1,031 100.0 2000 August 75.5 5.2 99,53 3.0 75.14 -23 31.961 6 -0 24,128 -5.1 2,401,547 -2.3 5 1,031 1000 2000 September 73.4 -0.5 99.38 3.8 72.94 3.2. 30;930 0.0 22,700 -0.6 - 2,255,983 3.2 5 1,031 100.0 2000 October 74.2 -0.4 100.31 3.9 74.41 3.5 31,961 0.0 23,708 -0,4 2,378,148 3.5 5 1,031 100.0 2000 November 63.4 -0.9 99 -85 7,8° 63.32 , - 6.8 30,930 0.0 19,615. 4.0 :'1;!358,822 6.8 5 1,031 10010 2000 December 44.4 -9.0 90.29 4,1 40,06 -5.4 31,961 9.0 14,180 -9.1 1,260,360 5,4 5 1,031 100.0 2080 Total Year 67.2 -0.3 98.89 5.6: _..: - ; 44.47 - 53 376,315 OA 252,1150 - -0.3 - 38,01+1,791 5.3' 2001 January 56.2 8.3 99.61 4.7 55.98 13.5 31,961 0.0 17,963 8.4 1,789,247 13.5" 5 1,031 100,0 2001 February 62,2 0.2 101,27 -3.7'.. - •'83.04 4.0 . 28,868 0,0 17,869 0,3 1;819,781 4_0 5 1,031 100.0 2001 March 69.1 -5.3 104.92 9.9 72.47 4.0 31,961 0.0 22,076 -5.4 2,316,277 4.0 5 1,031 100.0 2001 April 62.7 -7.0 112.21 13.7r 70,30 ' ,5.7 30,930 0.0 19,378 -7.0 .'.2,174,337 5.7 6 1,031 1000 2001 May 81.8 -12.1 102.72 2.0 83.43 -9.8 31,961 0 -0 19,737 . 12.1 2,027,360 -9.6 5 1,031 100 0 2001 June 73.6 -10.0 102.85 4.7.: 7589 ". -10:7 30,930 0.0 22,763, -10,0 2,341;208 -10.7 5 .1,031 _ 10010 2001 July 63.7 -8.3 100.55 4-5 64.02 -9.8 31,961 OA 20,350 $.4 2,046,203 -9.8 5 1,031 100.0 2001 August 71:7 -5.0 99.84 0.3 71.54. 4.8 31,961 0.0 22,903. $.1 2;286.618 4,8 5 1,031 100.0 2001 September 58 -3 -20 "6 97.38 -2.0 66.79 -22.1 30,930 0.0 18,041 -20.5 1,756,425 42.1 5 1,031 100.0 2001 October 83,9 -13.9 98.48 -1.19. ' .- 62.97. -15.4. , 31;981 0.0 20,430 AU 2,012,672 -15.4 5 - 1,031 itX3,C 2001 November 54.7 -13.7 92.49 -7.4 56.59 -20.1 30,930 0.0 16,917 -13.8 1,584,706 -20.1 5 1,031 100.0 2001 December 43.8 -1.4 88.03 -2.5- 18.59' :' -3.7 31,961. _. 0,0 14,013• • -1.2 ;; 1;233;504 -3.T- .5 1,031 100.0 2001 Total Year 41.0 4.0 1".49 1 A 61.10 -6,6 376,315 0.0 232,518 -ti. i 23.368,308 -6.6 2002 January 501 -9.4 96.81 4.8 ::; 49.26. -12:0 31.,961 0,0 16 ; 283 : . 8.5; ..:1;574,342 12.0 -"5 1,031 100 0 2002 February 56.5 -9.2 94.34 -6.8 53.28 -15.5 28,808 0,0 16,297 -9,3 1,537,442 -15.6 5 1,031 100.0 2002 March 57. 11 -17.4 93.94 -10.5 :,:55.$9 -25.9. 31,961 0A 18,285 - 17,3:_:.1;715,817 -29.9 5 1,031 100.0 2002 April 62.4 -0.5 95.73 -14.7 59.69 - 15.1 30,930 0.0 19,288 - 6.5 1,849,297 - 15.1 5 1,031 100,0 2002 May 55.2 - 10.7 97.45 - 5.1 53,76. -15;2 31981 0.0 17,631 " =10:7 ,"1718,212 -15.2 5 1,031 100. 2002 June 64.2 -12.6 95.53 -7.1 61.30 - 19.0 30,930 0 "0 19,847 -12.8 1,896,946 -19.0 5 1,031 100.0 2002 July 62.0 -2.7 06.29 ,4.2 59.&1: , -8.6 .. 31,961 0.0 110,600 . -2.7 .1;906,485 -6.8 9 1,031 1� 0 2002 August 88.5 -7.3 95.39 -4.5 63.43 -11.3 31,961 0.0 21,251 -7.2 2,027,228 -11.3 5 1,031 100.0 2002 September 63.3 8.6 99 -91 :2.8 :..,_83:21 " :'! 11:3 30,930 - 0.0 19,367. 65 .954,992 1.1.3 5 .. 1,031 100:0 2002 October 69.0 8.0 101.87 3.4 70,33 11.7 31,961 0.0 22,067 k6 2,247,926 11.7 5 1,031 100.0 2002 November 53.5 -2.2 88.47 4.3 ` 47:31 -6.5 - 30,930 0.0 16,540 =2.2 ` _:1,463 -6.5 5 1.031 100.0 2002 December 42.4 -32 88.95 1.0 3768 -2.4 31,961 0.0 13,539 -3.4 1,204,300 -2.4 5 1,031 100,0 2002 Total Yew $8.6 - 5.2 --_-- V S.h A.7 '56.05 :A.7 376,315. . 0.0 .110,353. , .5.1 - -' Tto mrnmwl cw*irad In d* repwt is baeed +yen inlaper" t surveys and raseanch from smm cwsk red reiahle bud np mprese7deim is made as to ib e0mpkteness or sonfacy. T tss WOM' MOn Is In ra My 10 be oorebueo as e by Snit+ Travel Reseamh I d any Indrntry standard and is k*mided 90trN far the Werne! purposes Ot you cow and 811001 nOt be PU%5t>ad In any eramer wimi whwiced by 3rnkh Trend Ressamh, A ha* row kdkaw ksutrklert dda GOWW t 2002 9"M Traeel R9 search it r r r r r r r r r r r r r r r r r r r ` Smith Travel Research Standard Historical TREND lot: 73168 AK BROOKLYN CENTER, MN Area Selected PropEdies etrdou51 January 1996 - Decembe 2002 Date: 021113/2003 Oe Roam Rate RevPar R oam S ly Roo Dem Room Revenue Census Year Month T7rls Year % Chu Thb Year %Ch8 This Year % ChhiL TNs Year % Ch$ TMs Year �% Ch5 Tivis Year % Chg Census Props COMM Roor»s % Roams "I e 1996 January 6322 3 , 72.67 2.6 "45.90 4.13 ....29,357 0.0 18,642 21 1;347;358 4,8 4 947 100.0 1996 Febr iary 71.5 0.1 75.46 3.1 53.95 3.3 26,516 0.0 18,9669 0 "2 1,43r1,618 3 - 4 947 1000 1996 March 76,6 1.6 77.48 6.1 . 59.34' 9.7 29,357 0.0 22,486 1.5 ° 1,742,133 9.8 4 941 81.4 1996 April 74.3 -0.5 74.96 3.4 55.66 2.7 28,410 0.0 21,095 -0.6 1,581,324 2.7 4 947 100.0 1996 May 72.1 -2.7 79.95 7.5 . - _ 57.68. -4.7 29,357 0.0 21,180 -216 1,693,353 4.7 - 4 947 1D0.0 1996 June 83.1 -4.3 81.23 0 61.50 1.2 28,410 0.0 2307 -4,3 1,917,544 1.2 4 947 100.0 1996 July 75.0 -9.9 82.38 6.8 61.81 . -3.7 29,357 11:0 - 22,028 48 . '1,814,885 4.7 4 947 100.0 1996 August 80.1 - 10.2 80.98 5.2 64.85 -5.5 29,357 0.0 23,511 -42 1,903,622 -5.5 4 947 1100.0 1996 September 77.1 -3.1 81.79 5,7 <' '§3,00 ` 2.4 28,410 0.0 21;914. : -3.1 11;792,286 2.4 4 . 947 100.0 1996 October 80.3 -1.8 82.60 5.1 66.34 3.2 29,357 0.0 23,580 -1.8 1,947,631 3.2 4 947 100.0 ov 1998 Nember 88.8 2.9 79.77 15.8 : >.; 54 :84; , 12.8 28,410 0.0 19,x533.. :,2;4 - _1 12.8 _ 4 947 _ 100.0 1996 December 55.5 -4.6 75.57 110.4 42.66 5 -2 29,367 010 16,674 4.7 1,262,505 5.2 4 947 100.0 1996 ToW Year 73 ;2 133 78.97' 6.3 .. _ ST.S{:. 3,9 : 345,"S 0.9 .2S3,t149 3.2 . _ [4 91i1,2p9 ' 2 1997 January 87.5 6.8 77.92 T -2 52,58 14.6 29 9357 0.0 19,811 6.8 1,543,619 14.8' 4 947 +� 100 0 1997 February 73.8 3.2 79.66 5.6' 5d:g3:. 9.0 - 26,516 0.0 19,582 3.3 1,559,898 _ 9.0 4 947 1.00.0 1997 March 68.1 -1111 81.00 4.5 55.17 -7.0 29,357 0.0 19,995 -11.1 1,619,670 -7.0 4 947 100' 1997 April 78.0 5.0 86.17 15.0 - : 67:24 : , 20.8 30,930 8.9 24,135 14.4 2,079,598 31.5 5 1,031 91.9 1997 May 66.2 -8.2 87.03 8.9 57.59 -6.2 31,961 8.9 21,148 42 1,840,500 8.7 5 1,031 100.0 1997 June 78 - 5.7 89.90 10.7, 70.45 4A 30,930 8.9 24,237 2,7 , B 178,971 13.6 5 1,031 100.0 1997 July 77.1 2.8 87.50 6.2 67.50 9.2 31,961 8.9 24,656 11.9 2,157,416 18.9 5 1,031 100.0 1997 August 78.7 -1.7 69.55 10.6 - -70.45 - 8.7 31,961 8.9 26,147 - 1.0 2,251,870 18,3 .5 1,031 100.0 1997 September 79.3 2.9 89.81 9.8 71.24 12.9 30,930 8.9 24,535 12.0 2,203,393 22,9 5 1,031 100.0 1997 October 70.6 42 -1 87.11 5.5 : ; -, .61.47 -7.3 : 31,961 8.9 22,553 -4.4 1,964 0.9 5 1,031 100.0 1997 November 56.8 - 17.4 84.18 55 47.77 -12.9 30,930 8,9 17,554 -10.1 1,477,610 -5.2 5 1,031 100.0 1997 December 49.9 -11,7 79.40 5.1 .` 39.68 . -7.0 31;961 6.9 15,964 -3.7, .7,267,582. 1.2 _5 1,031 100.0 1997 Total Year 70.3 -4.0 85.40 8.1 60AS 3,9 368,755 6.7 259,317 2.5 12,144,723 1 0.8 -- 1998 January 511.7 -23.4 88.60 111.4 - 4403 _ 719.7 °31 8,9 98,509 -16.7 `_ 1' 32, -7 2' - 5 _ 1,031 100.0 . 1998 February 65.1 -11.8 88.64 11.3 57.70 -1.9 28,868 6.9 18,794 -4.0 1,665,813 6.8 5 1,031 100.0 1998 March 64,2 -5.7 88.60. 0.4 58.85 3.0 31,961 8.9 20,507 2.6 _., .1,816,984: - 12.2 5 _ 1,D31 100.0 1998 April 67.0 -14.1 93.33 8,3 62.54 -70 30,930 0.0 20,727 -14.1 1,934,494 -7.0 5 1,031 100.0 19% May 63.8 -3.6 92.38 8:1 _:58.92: 2.3 . _ 31,961 0.0 20,386..z 3.6 i;883,24T 2.3 5 1,031 10D.0 1998 June 83.2 6.1 97.68 8.7 81.28 154 30,930 0.0 25,736 6.2 2,513,920 154 5 1,031 100.0 1998 July 71.8 -69 93.81: 7.2 ;- 67:33, -0.3 31,961 0.0 22,939 -7 ::2.152,022 - -0.3 5 1,031 100.0 1998 August 76.9 0.3 94.32 6.3 74.44 5.6 31,961 0.0 25,224 0.3 2,319,130 5.7 5 1,031 100.0 1998 September 74.1 -6.6 95.95 6.8 .71,10 - -0.2 30,930 0.0 22,918 4,6 ._.2 -02 5 1,031 100.0 1998 October 75.1 6.4 95.90 10.1 72.06 17.2 31,961 0.0 24,014 6,5 2,303,606 17.2 5 1,031 100.0 1998 November 59.5 4.8 88:75 5.4 52.84_ 10,6 30,930 0.0 18,415 4.9 ., 1;83019 10.6 5 1,031 100.0 1998 December 481 -2.4 84.35 6.2 41,06 3.6 31,961 0.0 15 -2.5 1,313,012 '3.8 5 1,031 100 - It" Total Year 66.9 42 91.27 6.0 ' 61.72 1,8 - - 376,31S 2.1 251,731 =L9 -� 2:1,221,890 4.9' 1999 January 57.1 10A 90.06 3.8 51.,03 14.7 31,961 0.0 18,251 10,6 1,643,598 14.7' 9 1,031 100.0 1999 February 65.0 - 0.2 90,73 '2.4 S8.9B 2.2 28,868 0.0 18,765 -42 1;702 2 - 2 5 1,031 - .100.0 1999 March 67.3 4.8 90.18 1.8 60.70 6.6 31,061 0.0 21,513 4.9 1,940,132 6.8 5 1,031 1CK0.0 1999 April 68.6 2.4 92.53 -0.9 . 63.47 1:6 30,930 0.0 21;217, 2.4 i; 1.963;253 1,5 6 1,031 100.0 1999 May 63.6 0.0 93,48 1.2 59.68 1.3 31,961 0.0 20,404 0.11 1,907,403 1.3 5 1,031 1 00.0 1999 June 73.9 -11.2 97,43 .0,3 71.98. »11.4 30,930. 0.0 .22851 -11.2',.2-,226,203 -11.4 5 1,031 100.0 1999 July 72.7 1.3 96.60 3.0 70.27 4.4 31,961 0.0 23,251 1.4 2,246,050 4.4 5 1,031 100.0 1999 August T9.6 0.9 96.67 2,5 ~:_ 76,90 13 31,061 0.0 25,425 :. 0:8 ',2 3:3 5 11031 100.0 1999 September 73.8 -0.4 95.71 -0.3 70.68 -0.6 30,930 0.0 22,841 .0 -3 2;186,200 -0.6 5 1,031 100.0 1999 October 74.5 -0.8 96.56 0.7 : - - -- 71.89 - -0.2 31.961 .0.0 •23;795_ -0.9 2,297547 -*.2 5 _ 1,031 100.0 1999 November 64.0 7.6 92.60 4.3 59.31 122 30,990 0.0 19,809 7.6 1,834,389 12.2 5 1,031 100.0 1999 December 48.8 0.2 86.74 2.8 :. ' d2.34 &1 31,991 010 °15;800 0.2 _1;333,145 31 5 1,031 10010 1999 Total Year 67.4 0,7 93.64 1.5 63,13 2,3 376,315 0.0 153,722 0.8 23,756,575 230 ^ - - - - -- ."_.____ -- 2000 January 51.9 -9.1 95.10 56 49,32 -4.1 31,961 0.0 16,5T6 -9.2 1,576,370 -4.1 51 1,0311 100.0 2000 February 62.1 -4.5 97.70 7.7 60.63 2.8 28,868 0.0 17,914 -4.5 1 2.8 5 1,031 100.0 rr rr rr rr rr rr rr rr rr �r rr rr r rr ® r rr rr rr sr� Sm/th Trove! Research TREND Response Report lab: 73168 BROOKLYN CENTER, MN Area Selected Properties eresp3yr SIR Cods Nana of Esl abtlahxw r rt cu b state I oat Code Tttlepltotte A li] Date then Oats Roatetb Cbp.M Am J M A M J. J A S O' N D �P IM A 1A J 1 A S O W — 6U M A M J J A S 0 ti Q 17t t TKJU9LC'iREE PARK PLACE MNNEAPOt IB, MN 55418 .. (952)'542.9600 198710 198108 267 z x x x x x of x x x X x x x x X z ri x x x x x x x X X x x x x x x x x x 15186 NORTHLAND F A d IS NF CENTER BROOKLYN PARK, MN 5542A (769) Wfl -a 0 190907 188907 231 x x x x x x x x x x x x x x X x x x x x x x K x x X X x x x X x x x x x 21584 HILTON 14lQJEApOLt6 NORTH BROOKLYN CENTER IAN' 56436 VIM Be"900 1076803 198506 17e = -x x x x x x x x x x x x x x it x x x x x x x x x x x x x x x x i x x x 2191P RADISMON HOTEL S CONFERENCE CENTER PLYMOUTH, MN 55441 (763) 559.6600 199108 198705 243 x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x &4 COUNTRY INN B SUITES BROOKLYN CENTER BROO CENTER: MN 5544 (7.83) e0I.0900 199704 199704 e4 X x K X x x x x Y X X x x x x x x X x x s ft x x a x i X x x a 1031' x - 0enobes data received by SIR - - Denotes no data because of seasonal Yank Denotev no data received by sTR e09rew ernim If-VI Ptoo—.h The Adtmseroe coRl*wd in" wportb bared spantfdepende94 17rvey9 wro"'seam from 9ubroeewr"WO"d ebMe bat 90 rape" Nafon b M*m s b Rcampletero "meceuacy- TAN Iftomwan N br no way to to corO d e ercoornncndsdon &,A Trerel P-nv h of wy hdL*W starrfr.d and b btewd a" yfw the We" pwpoeee of yowo9/np#ny end oh%M rotbe fx MaMdln wy mefinef unless wbodzed by SrrithTraral Hemomh. A blmA fowlnt ketce Itbumdere deto. Crgytipht c'S7C2 Dmtn T�al R"..ch II ' Section 7 MARKETING STRATEGIES I PROPOSED HOTEL DEVELOPMENT — BROO CENTER MINNESOT MARKETING STRATEGIES Overview In as much as lodging demand appears to exist in Brooklyn Center, it is imperative to move forward with a strategic ' plan that insures success in creating additional lodging demand to fulfill projected financial expectations. This section highlights strategies that may be implemented to serve as a foundation. Additionally, the development must serve the community of Brooklyn Center in regard to enhancing economic growth. What is good for the community will be good for the hotel and visa versa. Due to its size and location, Brooklyn Center reflects a community that could advantageously be marketed as not ' only a suburban area, but also an urban area. Although numerous attractions, large corporations and world - renowned shopping is nearby, Brooklyn Center offers a convenient, quiet get -away with the amenities provided by the Earle Brown Farm. ' Like an other business or industry, ■ Camping is the number one outdoor y try, tourism needs the moral and vacation activity in America financial support of the entire community. Although certain businesses, . Biking vacations attracted more than 27 such as hotels, restaurants, gift shops, attractions, service stations and million travelers in the past five years and ' places of entertainment receive the direct bulk of tourist dollars, other rank as the third most popular outdoor businesses benefit as well. vacation activity in America ■ Business travelers, in 2002, took 31.6 million business trips that included a child; ' Conference centers help a community become more attractive and a 24.7% increase in a ten year period. prosperous and create opportunities to introduce new growth and ■ Dining, shopping, museums and tours are investments that will stimulate economic growth, as visitors are the top activities for travelers potential investors and consumers. ■ One -fifth (21 %) of all US adults attended a ' festival while on a trip ■ Thirty -one percent of US adults (61.8 Economic Impact million) said they took a get -a -way Conference centers generate benefits, which include convenient meeting vacation in the past 12 months. sites for business, jobs for communities and revenue for the conference ' Weekend trips by Americans increased center facilities. The impact can be significant, even when the facility 70% between 1990 and 2000, accounting produces a small number of j obs. Predictably, the level of benefits vari for more than half of all US Travel es Travel Industry Association of America ' widely with differences in the quality of the facilities, access, and demand created by the hotel, restaurant, and conference center. ' The impact of conference centers attached to hotels can be grouped into three categories: ■ Direct Impacts: Those arising from initial tourism spending; money spent at local businesses and the conference center. ■ Indirect Impacts: The hotel purchases goods and services (inputs) from other businesses. ■ Induced Impacts: The hotel and conference center employees spend a portion of their wages to purchase ' various goods and services. If a hotel purchases the goods and services from outside the region or community, then the money provides no indirect impact to the area — it is siphoned away. A common priority is to increase economic benefits and attract ' more visitors. Given that negative impacts (environmental, experiential, sociocultural and economic) correspond to varying degrees to visitor numbers, it would be preferable to increase local benefits by: ■ Increasing spending per visitor ' Increasing backward linkages (reduce siphoning away) ■ Increasing local participation in the industry ■ Increasing bookings of events at the EBF Conference Center ' A waterpark added to the hotel and conference facilities could be expected to produce the following additional benefits: ' ■ Greatly enhanced hotel occupancy on weekends, during school vacation periods, and during the summer tourist season. ■ Much higher hotel rates obtained during weekends and other times of high demand. 37 PROPOSED HOTEL DEVELOPMENT — BROOKLYN CF,NTF,R. MINNESOTA ' MARKETING STRATEGIES Segment Target Considerations Travelers Profiles The Internet and online services are very popular 1 segment for business promotion reduces ry p p Targeting the right trave segm p with travelers. 16.5 million travelers booked trips expense and increases success. The following segments and brief ' online in 2000, which is up over 200% from 1998. descriptions would serve Brooklyn Center well. The percentage of travelers who use the Internet for Leisure Traveler: Today's leisure traveler is time - starved, value - travel plans or reservations has increased from 11% conscious, concerned with safety and the environment and the ' in 1996 to 62% in 2000, which equals 52.2 million move, visiting more destinations but staying shorter time periods. travelers who planned online. Business Traveler: Similar to the leisure traveler, time is of the ' essence to these travelers. Nearly one out of four business travelers Weekend trios by Americans jumped by a dramatic report that they included some vacation time on the average 70% between 1990 and 2000 and account for more business trip with a high percentage including a household member than half of all U.S. travel. In comparison, non- on the trip, ultimately leveraging travel time. ' weekend travel increased by only 15% during the same period. Americans took 604 million weekend Generation X (born 1965 - 1976): Approximately 17 percent of the population, this segment controls $150 -200 million annually. They person -trips in 1996 and nearly 80% of the travel are different in terms of values and experiences and welcome new ' was for pleasure. Weekend trips are popular year ideas and experiences that make sense to them. round but summer is the most popular time for weekend travel, accounting for 28% of all weekend Babv Boomers (born 1946 - 1964): The largest population segment, Baby Boomers are lifestyle- oriented, enjoy increasing levels of ' trips. education, value leisure time taking shorter, more frequent trips using weekends as get -a -ways. Baby Boomers generated the Travel agents are the consumer's preferred source highest travel volume in the U.S. in 1999 (registering more than for making reservations and seeking information 259 million trips, more than any other age group). Boomers are about travel prices and schedules ' but a significant more likely to stay in a hotel or motel (60 %), travel for business (35 %) and to fly (26 %). Boomers spend more on their trips than number of Americans have shifted their preference other age groups, averaging $460 per trip, excluding transportation to the Internet in the past year. to their destination. ' Family Reunions & Weddings are popular in the Families with Children: Seeking excitement and new experiences, this segment is well educated with annual incomes of $40,000 or summer months (June through August), with 26 more that desire balance between work and family. Family ' percent of summer travelers planning to attend a vacation time is important, as many are guilt -driven due to having family reunion in 2003. This share is down slightly insufficient time to spend with family. Short get -a -ways have from Summer 2002 when 29 percent of travelers replaced long vacations. The proposed waterpark facilities will said they were planning on attending a family appeal to hotel visitors of all ages, but will be a destination facility ' for families with young children. reunion. Attending family reunions is most popular among travelers over the age of 55 (32 %). Empty Nesters (ayes 45 -54): This segment has significantly increased in population. Seeking cultural and historic attractions Conferences /Conventions and personal growth experiences, shopping and dining, health and fitness, Empty Nesters can well afford to travel. It is estimated that Conferences are a large part of the business plan for near one in four households have an income of $75,00 or more. the hotel. With 175,000 people attending functions at the EBF Conference Center normally. The Mature /Seniors Market (ate 55 +): The Seniors market travels property will capture enough business to meet our during all seasons and typically stays longer than other segments. projections. Culture and history, outdoor recreation, educational experiences are enjoyed by a segment who is value and bargain- conscious, but has Corporate travelers are also a large part of the the disposable income to spend. Mature Americans average the business plan with Medtronics generating 34,000 longest stays away from home (3.9 nights), with 18 percent staying room nights alone. seven or more nights away. Conversely, this group also has a This property will achieve the Proforma revenue and higher share of day trips (21%). Half (52 %) of mature travelers ' stay in a hotel or motel on their trip, and four in ten stay at the occupancy. homes of friends and relatives (43 %). ' 38 - PROPOSED HOTEL DEVELOPMENT — BRO CENTER, MINNESOT MARKETING STRATEGIES Cultural and Historic Tourism is one of the more popular sectors of the travel ' Tourism Marketing Concepts industry. A recent TIA survey found that 53.6 million adults said they visited a museum or historical site in the past year and 33 million U.S. adults attended a Value t The hotel and cultural event such as a theater, arts, or music festival. Cultural and historic conference must meet the needs and desires of the typical visitor travelers spend more, stay in hotels more often, visit more destinations and are ' to Brooklyn Center. twice as likely to travel for entertainment purposes than other travelers. Value to the Hotel and Business travel has grown slightly since 1998, to 212.3 million person -trips in Brooklvn Center: Tourism and 1999. Thirty -six percent travel by airplane. Among overnight business trips, 85 ' business travelers, being percent staved in a hotel or motel, which is up from 82 percent in 1998. The evaluated as both a hotel vast majority of business trips (77 %) include only one household member, while ' strategy and a community only 7 percent include children. economic development strategy must insure benefits that Group Travel outweigh the costs incurred and that they are distributed as equitably as possible. Brooklyn Center appears to have excellent opportunity to increase the Conference Center market segment. The conference center market is made up of ' Competitive Advantage: In groups generally ranging from 25 to 50 persons who are traveling a specific order to insure visitors come to itinerary, which has been packaged and promoted. Itineraries can last from one the Brooklyn Center hotel, the day or more, depending on the scope and price of the conference. ' hotel will have a direct connection to EBF. Overnight accommodations often times are the most important component of a conference. Many travelers evaluate their conference experience on the overnight accommodations provided. While not all conferences require deluxe rooming, all conferences should offer a variety and comfortable rooms. The most important aspect is the service provided. Some considerations when marketing to and servicing conference travel markets: ' Groun Conference Rates: Conference groups represent volume business. Group rates should reflect both occupancy at the time of the conference and the annual impact on the conference center. Many conference center operators negotiate annual group rates with hotel properties. ' Location: Conference Operators select hotels that are convenient to conference center, shopping area, attractions, etc. These areas offer conference attendees the freedom to explore on their own. ' Friendlv Staff: Critical to the lodging success, a friendly conference - oriented staff. Amenities: Many of the added extras such as special bath soaps, plush towels, welcome packages, etc. will place a finishing touch on an overnight visit, making the accommodations memorable. The waterpark facility proposed for the subject development will, of course, provide a major amenity not currently existing in the Brooklyn Center market. There are two other waterparks proposed for the north ' suburban area, but the hotel facilities are of lower quality compared to the subject Radisson Hotel. One of them is an older motel in Brooklyn Park and the other is a proposed limited service hotel in Otsego, an outlying northwest suburb. ' 39 Section 8 FINANCIAL PROJECTIONS PROPOSED HOTEL DEVELOPMENT - BROO CENTER, MINNESOTA ' FINANCIAL PROJECTIONS ' Basis for Prospective Financial Analysis Estimates of annual operating results for the subject Radisson were prepared for the first ten years of operation. These estimates are based on an analysis of other selected lodging facilities in the local area, the anticipated ' competitive position of the Radisson as previously mentioned in this report, demand generators and the personal knowledge of the subject site area. Revenue and expense classifications generally conform to the definitions prescribed by the American Hotel and Motel Association in the Uniform System of Accounts for Hotels. Projections Projections made in this financial analysis are subjective opinions based on time spent on research and study of the subject site. It is not the intent to make any representation or guarantee, expressed or implied, as to the accuracy or completeness of any of the information obtained herein. 41 43 National Full- Service Lodging S ' AS MORE COMPANIES LOOK TO SAVE Despite these concerns, supply costly and time consuming to build. MONEY AMID AN ANEMIC ECONOMIC RE- growth for the full- service lodging seg- Second, locating a parcel of land in a COVERY, THE NATIONAL FULL - SERVICE ment remained relatively strong through desired market is difficult. And lastly, ' LODGING SEGMENT CONTINUES TO BATTLE 2002. According to Smith Travel Re- receiving local government support and LOW OCCUPANCIES AND INCREASED COM- search, a combined total of 192 new approval can be a protracted process. PETITION FROM TRADITIONALLY LOWER- hotels opened in the upper - upscale and Despite these obstacles, new projects ' PRICED LODGING SEGMENTS. "Limited- upscale chain segments, while 69 new either underway or set to break ground service hotels now offer travelers a real hotels opened in the midscale- with -food- shortly include the 506 -room San Jose competitive alternative to full service," and - beverage chain segment in 2002. Marriott in California and a 300 + -room ' adds the participant. While this state- Although several additional full - service Embassy Suites in Charlotte, North ment is especially true now since many projects are in preplanning stages Carolina. In addition, Starwood Hotels travelers have become price sensitive, it throughout the country, it will likely be & Resorts Worldwide is set to start con- will likely remain true in the future as well at least a few of years before many of struction of its 1,120 -room hotel at the as more companies retain their reduced these additions to overall supply are Boston Convention & Exhibition Center travel budgets in order to maintain profits. made. First, such hotels are extremely on the South Boston Waterfront in May ' 2003. While these projects will report- Table 26 edly fill voids for first - class, full - service NATIONAL FULL- SERVICE LODGING SEGMENT demand in these markets, they will enter ' First Quarter 2003 a lodging segment struggling with low KEY IN DICATORS CURRENT QUARTER THIRD QUARTER 2003 • occupancies and heightened price com- Discount Rate (IRR)a petition. ' RANGE 11.50 % 15.00% 11.50 % - 15.00% 11.50 17.00% AVERAGE 13.51% 13.51% 13.85% One bright spot for these types of CHANGE (Basis Points) 0 -34 hotels is the fact RevPAR growth has Overall Cap Rate (OAR)' held up surprising well in the meetings ' RANGE 8.00 % - 13.00% 7.00 % - 13.00% 8.50 13.00% and conventions segment in most major AVERAGE 10.64% 10.61% 10.77% markets. One explanation is that ADR CHANGE (Basis Points) — +3 -13 related to group demand has held up ' Residual Cap Rate better than ADR among transient guests. RANGE 9.00 % - 13.00% 9.00 13.00% 9.00 AVERAGE 10.67% 10.67% 10.91% Still, with more companies and organi CHANGE (Basis Points) — 0 -24 zations continuing to exercise controls ' Average Daily Rate Chg. Rate' over meeting budgets and conference � RANGE - 5.00 % - 10.00% - 5.00 % - 10.00% - 5.00 0/-10.00% participation, this trend bears watching. AVERAGE 2.30% 2.30% 1.85% The expectation among hotel opera- ' CHANGE (Basis Points) — 0 +45 tors who are opening new projects either Operating Expense Chg Rate now or in the immediate future is that RANGE 1.00 4.00 1.00% 4.00% 1.00 4.00% once these projects are completed, the AVERAGE 2.90% 2.90% 2.88% ' CHANGE (Basis Points) — 0 +2 lodging industry will have made great strides toward a turnaround. Based on Average Marketing Time (in months) RANGE 2.00 -12.00 2.00 -12.00 2.00 -12.00 the forecast increases in both occupancy ' AVERAGE 7 -00 7.00 7.90 and ADR in this lodging segment over % CHANGE 0 -11.39 the next two years, their optimism could a. Rate on unleveraged, all -cash transactions b. Initial rate of change be right. + FIRST QUARTER 2003 KORPACz REAL ESTATE INVESTOR SURVEY ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! V O NATIONAL FULL - SERVICE LODGING SEGMENT - INVESTOR SURVEY RESPONSES' First Quarter 2003 OVERALL GROSS R OOM RESERVE FOR DISCOUNT CAP RATE REVENUE MANAGEMENT REPLACEMENT OF MARKETING CHANGE RATES RESIDUAL RATE (IRR) ( MULTIPLIER FEES FIXED ASSETS TIME Average Daily Operating Cap Year Selling Free & Free & Percent of Total Rate Expenses Rate Capped Expense Clear Clear GRRM Base Fee Revenues Months MANAGEMENT COMPANY ♦ Forecast Period: 10 years 0.0% Seeks opportunities nationwide; uses both DCF and direct capitalization; 9.00% 12.00% 9.50% Does 3.0%; 4.0% 6 in direct cap, capitalizes forecast income for 2003; initial ADR growth rate Year 1; 3.0% to 11 2.0% to to not incentive fee to to in stabilized markets where supply and demand are near equilibrium is 5.0% 11.00% 14.00% 10.50% use varies 6.0% 12 close to CPI; selling expenses depend on size and value of property. Year 2 INVESTMENT BANKER ♦ Forecast Period: 5 years 4.0% 11.00% 2.0% 12.50% 11.00% Does 4.0% 6 Uses both DCF and direct capitalization; in direct cap, capitalizes to 10% to 6 to to to not 4.0% to to forecast next 12 months income. 5.0% 12.00% 3.0% 14.50% 11.50% use 5.0% 8 REAL ESTATE ADVISOR ♦ Forecast Period: 5 to 7 years Buys nationwide; uses DCF and direct capitalization; relies on DCF but 10.00% 6 13.00% 11.00% Does 5.0% 2 is sensitive to market rates; growth rates are specific to the market, 3.0% 4.0% to to 1.0% to to not Varies to to forecasts demand growth from the fundamental demand side based on 12.00% 8 15.00% 13.00% use 8.0% 3 forecast growth in room rate demand and models the mix of four different sources of business, each of which typically has a different rate. REAL ESTATE ADVISOR ♦Forecast Period: 10 years 0 10.00% 12.00% Does 2.5% to 3.0 %; 9 Uses both DCF and direct capitalization; in direct cap, capitalizes Years 1 & 2 3.0% . 11 2.0% . 10.50% not 10.0% of GOP 4.0% to 11.0 0% 15.0 forecast next 12 months income; prefers urban markets and West Coast. 0% use incentive fee 12 REIT ♦ Forecast Period: 5 or 10 years 5.0% 9.50% 6 9.50% Does Uses both DCF and direct capitalization; checks cash -on -cash return to 3.0% to or 2.0% 15.00% to not 3.0% 4 .0 - for years two and three. 10.0% 11.00% 11 12.00% use OWNER- OPERATOR- FRANCHISER ♦ Forecast Period: 10 years Does Uses both DCF and direct capitalization; in direct cap, capitalizes forecast 3.0% 3.0% 10.00% 11 2.0% 13.00% 10.00% not 3.0 4.0% 6 next 12 months income. use LIFE INSURANCE COMPANY ♦ Forecast Period: 7 to 10 years 0.0% 10.75% 1.0% 13.75% 10.50% Does 2.5% to 3.5 %; 4.0% 9 Prefers well - located properties in growing suburbs, airport markets, and to 3.0% to 11 to to to not 0.05% to 1.00% to to conference centers with potential to turn around and add value. 3.0% 11.50% 2.0% 15.00% 11.50% use incentive fee 5.0% 12 PRIVATE HOTEL COMPANY ♦ Forecast Period: 10 years Does 3.0 %; Uses both DCF and direct capitalization; in direct cap, capitalizes prior 3.0% 3.0% 11.00% 10 2.0% 12.00% 11.00% not 10.0% AGOP 4.0% - 12 months income; prefers West, Northeast, and Southeast. use incentive fee PENSION FUND ADVISOR ♦ Forecast Period: 5 years 0.0% for Uses both DCF and direct capitalization; in direct cap, capitalizes prior 12 12 months, 9.00% 2.0% 12.00% 9.00% 2.0 1.5% to 2.0 %; 4.0% months income; prefers California (both Northern and Southern), Arizona, then a 2.5% to 6 or $ to to to 1.5% to 2.0% to 4 Seattle, Chicago, New York, and Mid - Atlantic region. 3% increase 13.00% specific 14.00% 12.00% 2.5 incentive fee 6.0% in RevPAR 'Representative sample; due to space constraints, r R'Cr y, � / RHOU G1�PERS Source: Personal survey conducted by , not all responses are included. 1 `• • E J PricewaterhouseCoopers LLP during January 2003. ' Project Budget Radisson Hotel & Waterpark Per Room Total Cost j Land Value: $10,825 $2,165,000 i Construction of Improvements: Hotel Construction $61,625 $12,325,000 Waterpark Structure & Equipment 42,000 8,400,000 1 Building Permit 375 75,000 Architectural & Engineering Fees — Hotel 2,050 410,000 j Architectural & Engineering Fees — Waterpark 425 85,000 ' Total Direct Construction Cost $106,475 $21,295,000 ' Furniture, Fixtures & Equipment: $7,800 $1,560,000 Fees: ' Origination Fee $800 $160,000 Interim Financinq Fee 800 160,000 Permanent Financing Fee 800 160,000 Franchise Fee 250 50,000 Loan Commitment Fee j Total Fees $4, 250 $850,000 Other Costs: Insurance (Builders Risk) $250 $50,000 ' Workinq Capital & Miscellaneous 5,000 1,000,000 Total Other Fees $5,250 $1,050,000 Total Project Budget $132,400 $26,600,000 � TEN YEAR PROJECTION Software : ARGUS Ver. 10.0.0 Radisson Hotel Brooklyn Center File : Radisson Brooklyn Center, Minnesota 55555 Property Type : Hotel /Motel Portfolio SCHEDULE OF PROSPECTIVE CASH FLOW In Inflated Dollars for the Fiscal Year Beginning 4/1/2003 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Mar -2004 M -20 05 Ma r -200 _ Mar -2007 Mar -2008 M - 20 09 Mar -2010 Ma -20 11 Ma r -2012 Mar -2 Mar -2014 GROSS REVENUE Room Revenue $7,941,556 $8,179,803 $8,425,197 $8,677,953 $8,938,291 $9,206,440 $9,482,633 $9,767,112 $10,060,126 $10,361,929 $10,672,787 Food & Beverage 1,548,603 1,595,062 1,642,913 1,692,201 1,742,967 1,795,256 1,849,113 1,904,587 1,961,725 2,020,576 2,081,193 Telecommunications 303,367 312,468 321,843 331,498 341,443 351,686 362,237 373,104 384,297 395,826 407,700 Other Departments 92,916 95,704 98,575 101,532 104,578 107,715 110,947 114,275 117,703 12 124,872 TOTAL GROSS REVENUE 9,886,442 10,183,037 10,488,528 10,803,18 11,127,279 11,461,097 11,804,930 12,159,078 12,523,851 12,899,566 13,286,552 DEPARTMENTALEXPENSES Room Expense 2,372,746 2,443,929 2,517,247 2,592,764 2,670,547 2,750,663 2,833,183 2,918,179 3,005,724 3,095,896 3,188,772 Food & Beverage 800,802 824,826 849,571 875,058 901,310 928,349 956,199 984,885 1,014,432 1,044,865 1,076,211 Telecommunications 88,978 91,647 94,397 97,229 100,146 103,150 106,244 109,432 112,715 116,096 119,579 Other Departments 217,502 22 4, 02 7 230,748 237,670 244,800 252,144 _ 259,7 267,500 2_75,525 _ 283,790 292,304 02 TOTAL DEPARTMENTAL EXPENSES 3,480,0 3,584,429 3,691,963 3,802,72 _j,9 _4,034,306 4,1 _4,279,996 4,408,396 _ 4, 676,8 6 6 DEPARTMENTAL PROFIT 6,406,414 6,598,608 6,796 ,565 7,0 00,46 3 7,210 7,42 6,79 1 7 ,649,5__9 . 6 7 ,879,0 82 8, 115,455 _8,35 _8, UNDISTRIBUTED EXPENSES Administrative & Gen. 830,461 855,375 881,036 907,467 934,691 962,732 991,614 1,021,363 1,052,003 1,083,564 1,116,070 Marketing 296,593 305,491 314,656 324,096 333,818 343,833 354,148 364,772 375,716 386,987 398,597 Utilities 514,095 529,518 545,403 561,766 578,619 595,977 613,856 632,272 651,240 670,777 690,901 Property Op. & Maint. 444,890 458,237 471,984 486, 143 500,728 515,7 __5 547,159 - _563,573 __ 580,480 597 27 TOTAL UNDISTRIBUTED EXPENSES 2,08 2,148,621 2, 2, 2,347,856 2,418,291 2 ,490,840 2,565,566 2,642,532 2,721,808 2,803,463 GROSS OPERATING PROFIT 4,320, 4,44 4,58 4 4,862,620 5,008,500 5, 5 5,472,923 ___5__ 5,80 - - -- - -- -- - - - - -- - - - -- FIXED EXPENSES & COSTS Property Taxes 370,800 846,598 871,996 898,156 925,101 952,854 981,439 1,010,883 1,041,209 1,072,445 Insurance 108,751 112,013 115,374 118,835 122,400 126,072 129,854 133,750 137,762 141,895 146,152 Reserves 187,842 193,478 199,282 205,260 211,418 217,761 224,294 231,022 237,953 245,092 252,444 Franchise Fees 642,619 661,897 681,754 702,207 723,273 744,971 767,320 790,340 814,050 838,472 863,626 Management Fees 266,934 274,942 283,190 291,686 300,437 309,450 318,733 328,295 338,144 348,288 358,737 TOTAL FIXED EXPENSES & COSTS 1,206,146 1,613,130 2,126,198 2,189,9 2,255,684 2,323,355 2,393,055 2,464,846 2,538,792 2,614,956 2,693,404 NET OPERATING INCOME 3,114,229 2,836,857 2,457,288 2,531,007 2,606,936 2,685,145 2,765,701 2,848,670 2,934,131 3,022,155 3,112,819 CASH FLOW BEFORE DEBT SERVICE $3,114,229 $2,836,857 $2,457,288 $2,531,007 $2,606,936 $2,685,145 $2,765,701 $2,848,670 $2,934,131 $3,022,155 $3,112,819 & TAXES Software : ARGUS Ver. 10.0.0 Radisson Hotel Brooklyn Center File : Radisson Brooklyn Center, Minnesota 55555 Property Type : Hotel /Motel Portfolio SCHEDULE OF SOURCES & USES OF CAPITAL Equity is Based on Property Value, Leverage and Operating Requirements Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 For the Years Ending M ar -2004 Ma -2005 M -200 Mar -2 007 _ Mar -2 008 Mar -2009 Mar -2010 Mar -2011 Mar -2012 Mar -2013 SOURCES OF CAPITAL Net Operating Gains $3,114,229 $2,836,857 $2,457,288 $2,531,007 $2,606,936 $2,685,145 $2,765,701 $2,848,670 $2,934,131 $3,022,155 Initial Equity Contribution 23,454,079 Net Proceeds from Sale 28,522,109 TOTAL SOURCES OF CAPITAL $26,568,308 $2,836,857 $2,457,288 $2,531,007 $2,606,936 $2,685,145 $2,765,701 $2,848,670 $2,934,131 $31,544,264 USES OF CAPITAL Property Present Value 2 Pe Y $ 3, 4 079 DEFINED USES OF CAPITAL 23,454,079 CASH FLOW DISTRIBUTIONS 3,114,229 2,836,857 2,457,288 2,531 ,007 2,606,9 2,685,145 2,765,701 2,848,670 2,934,131 31,544,264 TOTAL USES OF CAPITAL $26,568,308 $2,836,857 $2,457,288 $2,531,007 $2,606,936 $2,685,145 $2,765,701 $2,848,670 $2,934,131 $31,544,264 UNLEVERAGED CASH ON CASH RETURN Cash to Purchase Price 13.28% 12.10% 10.48% 10.79% 11.12% 11.45% 11.79% 12.15% 12.51% 12.89% NOI to Book Value 13.28% 12.10% 10.48% 10.79% 11.12% 11.45% 11.79% 12.15% 12.51% 12.89% Software : ARGUS Ver. 10.0.0 Radisson Hotel Brooklyn Center File : Radisson Brooklyn Center, Minnesota 55555 Property Type : Hotel /Motel Portfolio PROSPECTIVE PROPERTY RESALE Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 For the Years Ending Mar -200 Mar -2005 ___ Ma -2 006 Mar -2007 Mar -2008 _Mar-2009 _ Mar -2010 M a r -201 Mar- 201 2_ M a_r -2 RESALE AMOUNT Gross Proceeds from Sale $26,389,367 $22,858,493 $23,544,251 $24,250,567 $24,978,093 $25,727,451 $26,499,256 $27,294,242 $28,113,070 $28,956,456 Commissions & Other Costs _A 395,8 4- 1 ) ( 342,8 T 7 J __353,164) _ C63,759) __ _(374,671) (385,912) _ (397,489) X09,414) (42 _( NET PROCEEDS FROM SALE $25,993,526 $22,515,616 $23,191,087 $23,886,808 $24,603,422 $25,341,539 $26,101,767 $26,884,828 $27,691,374 $28,522,109 Software : ARGUS Ver. 10.0.0 File : Radisson Property Type : Hotel /Motel Portfolio Radisson Hotel Brooklyn Center Brooklyn Center, Minnesota 55555 PROSPECTIVE PRESENT VALUE Cash Flow Before Debt Service plus Property Resale Discounted Annually (Endpoint on Cash Flow & Resale) over a 10 -Year Period For the P.V. of P.V. of P.V. of Analysis Year Annual Cash Flow Cash Flow Cash Flow Period _ Ending Cash Flow _ _ @_ 13 : 00% _ @ 1 Year 1 Mar -2004 $3,114,229 $2,768,204 $2,755,955 $2,743,814 Year 2 Mar -2005 2,836,857 2,241,467 2,221,675 2,202,144 Year 3 Mar -2006 2,457,288 1,725,832 1,703,024 1,680,616 Year 4 Mar -2007 2,531,007 1,580,095 1,552,314 1,525,141 Year 5 Mar -2008 2,606,936 1,446,664 1,414,940 1,384,047 Year 6 Mar -2009 2,685,145 1,324,502 1,289,725 1,256,009 Year 7 Mar -2010 2,765,701 1,212,656 1,175,591 1,139,814 Year 8 Mar -2011 2,848,670 1,110,253 1,071,555 1,034,369 Year 9 Mar -2012 2,934,131 1,016,499 976,728 938,678 Year 10 Mar -2013 3,022,155 930,661 890,291 851,840 Total Cash Flow 27,802,119 15,356,833 15,051,798 14,756,472 Property Resale @ 10.75% Cap 28,522,109 8,783,274 8,402,281 8,039,389 Total Property Present Value $24,140,107 $23,454,079 $22,795,861 ---- - - - - -- ---- - - - - -- ---- - - - - -- ---------- ---- - - - - -- ---- - - - - -- Rounded to Thousands $24,140,000 $23,454,000 $22,796,000 ---- - - - - -- ---- - - - - -- ---- - - - - -- ---------- ---- - - - - -- ---- - - - - -- Per Room 120,701 117,270 113,979 PERCENTAGE VALUE DISTRIBUTION Prospective Income 63.62% 64.18% 64.73% Prospective Property Resale 36.38% 35.82% 35.27% 100.00% 100.00% 100.00% Software : ARGUS Ver. 10.0.0 File : Radisson Property Type : Hotel /Motel Portfolio Radisson Hotel Brooklyn Center Brooklyn Center, Minnesota 55555 PROPERTY SUMMARY REPORT TIMING & INFLATION Analysis Period: April 1, 2003 to March 31, 2013; 10 years Inflation Method: Fiscal General Inflation Rate: 3.00% PROPERTY SIZE & OCCUPANCY Property Size: 200 rooms PROPERTY PURCHASE & RESALE Purchase Price: - Resale Method: Capitalize Net Operating Income Cap Rate: 10.75% Cap Year: Year 11 Commission /Closing Cost: 1.50% Net Cash Flow from Sale: $28,522,109 PRESENT VALUE DISCOUNTING Discount Method: Annually (Endpoint on Cash Flow & Resale) Unleveraged Discount Rate: 13.00% Unleveraged Present Value: $23,454,079 at 13.00% 1 t SECTION 9 ■ Appendix A — Site Photographs I � 1 42 t 1 Y, ,•mo � - � � �� e • �` �r a q F w ;j '�5 ff i M , L Aikr 4.. )i d'a4 .�, .�• "•. - L M rf it� � j' � �' �k '' "�yt , s,' y `' at'+ G - '� . = . - 1 ! 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B1 • •- to �"' •"�� ! a► a� \ } r !• n� � fl y , 10 e _ • A rid ° •� r ki L- nn I Milli I y 3 ti� y a " t mil 00 ri • i a, ;; f. � f 1� v / f •r�� t e .. ♦� I r• f � tip'' .. rye,: - -� ' �_ �-v.. • s .._ �. - `" -�.. ♦ �• n �r _ � . �: Yy.�e 5 y = ;e _ ' ■ i.��.a...r. - -� _ _. -. � _�. r.,.� t � ^� CIF 4 _� - _.- _.�— ..._ - - -.._ _ _.. ... _ r ,� s ._ ....._.... .._ __. __. _. _...- ..._.�� .,. —�.. 1 • • • • • • C �I�a ►zta Hjo,�t�l j Rjje Fla ri olat§ a Lli • fro o k�V Lij C� aj[we r� � Mj� • • • t By • Cognoscow Um-Cam UM Groups i NMINMMIIR1r1NN • • • • • • • • • t • i • • Brooklyn Center Proposal Table of Contents • Cover Letter • Hotel Questionnaire i Plans and Pictures: • Elevation and typical pictures Schematic Site Plan • Typical Rooms Resumes and Lender Commitment: Bremer Bank Inter - Continental Hotel Groups (Owner/Manager) formally Six Continents • John Livingston, Cognoscente, LLP (Owner/Developer) Tom Noble, (Owner /Consultant) • Richard Krier, AICP Midwest Planning & Design, LLC (Redevelopment Consultant • Terra Verde Architects, LLC (Architect) • Market / Proforma: Letter from Marketing & Development Associates Crowne Plaza Hotel and Restaurant Proforma . Aquatic Center Proforma • • • • • • i • • • • • • • • • • May 20, 2003 Brad Hoffman Community Development Director i City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 -2113 • RE Hotel Proposal Dear Brad: The purpose of this letters is to make a development proposal to the EDA on • behalf of Inter - Continental Hotels Group, Cognoscente, Comten Development. • In summary our experienced development team will produce the following: Product Build, and operate a 250 room full service Crowne Plaza Hotel. The site will be designed with the Hotel, one full service restaurant and a 15,000 square foot all season Aquatic Center. All three uses will be connected to the Earle Brown Heritage Center by an enclosed walkway. In addition, we will manage and maintain the 10 room Inn on the Farm including it in Holidex international • reservation system. Significant to our proposal is the ownership and extraordinary assistance from Inter - Continental Hotels Group (formally Six Continents Hotels), the owner of the • Holiday Inn brands including Inter - continental Hotels and Resorts, Crowne Plaza Hotel and Resorts Holiday Inn Hotels and Resorts among others. They will be an owner in the hotel as well as manage this property. This is a substantial commitment by Inter - Continental because they will be creating an area • management office and using this property as their entry property in the • Minneapolis /St. Paul area. This rare opportunity to work directly with Inter- continental will significantly add to the value of the property. Inter - Continental will manage the hotel and include the Inn on the Farm to the list of available rooms. • This is also significant because, unlike the competition which manages and owns conference center properties that compete with the Earle Brown Center, this will be the only `conference center' hotel owned and managed in this market place by Inter - continental. The coordinated hotel marketing efforts will add dramatically to • the marketing efforts of the Earle Brown Heritage Center bring in additional Midwest Planning & Design, LLC 1491 Shoreline Drive Wayzata, MN 55391 Phone 952.476.1762 • (Fax) 952.476.7939 . krier001 @gold.tc.umn.edu • • • • • • • conferences to the Earle Brown Center. At the EDA's discretion, we are also proposing to build a 15,000 square foot • Aquatic Center. This Center would be built by us and turned over to the City or EDA once completed. The Center will feature a wave pool as well as a number of • other activities. We will contribute $500,000 to the construction of the Center and will provide EDA with additional $1,150,000 in land payments that can be used to • fund the Center. • We have included a brief narrative describing the Crowne Plaza, and Aquatic . Center, an illustrative site plan showing the Crowne Plaza with restaurant and Aquatic Center, building elevation, and illustrative lobby illustrations, proforma for the hotel and the Aquatic Center, hotel comparison letter and the answers to the questions that you posed. As you can see by the enclosed information, we are proposing a high quality • hotel for this site. We will work closely with you and the Earle Brown Center management in the design, final room mix and final price point of the hotel in • order to address the mutual needs of the Earle Brown Center and the hotel and • conform to the market demand in this strategic area. Development Team • Our development team consists of: • Inter - Continental — Owner/ Hotel management. Inter - Continental Hotels Group is an international company that is well known for its excellence in operating hotels, maintaining high quality, and its reservation system. This will be their first hotel in the Twin Cities to be added to their exclusive list of 450 hotels world wide currently owned and 3000 hotels managed by Inter - Continental. • • Cognoscente (John Livingston), Comten Development (Tom Noble) and . Midwest Planning & Design LLC will be the real estate development team with Cognoscente and Comten retaining ownership along with Intercontinental. This team will various members of this team will: 1. Work with the EDA and the City, 2. arrange the financing, • 3. supervise the building the hotel, restaurant and Aquatic Center, 4. provide asset oversight and direction. • • • • • • This team has extensive experience having developed numerous types of large real estate projects through out the country and internationally. Of the team, Tom Noble is responsible for the Normandy in Minneapolis and, until recently, the Sheraton in Bloomington Minnesota. Cognoscente, Inc has been involved in the development of hotels including Staybridge, Candlewood and Holiday Inns. Richard Krier is a specialist in redevelopment having been involved in the creation of over $180 million in residential and commercial redevelopment real estate. A resume and project list is attached for each of the team members. w Property Acquisition, Assistance and Schedule The development team will enter into an agreement with the EDA to purchase the site. The total amount paid to the EDA for the land would be $3,150,000 with $2,000,000 deferred for a maximum period of 15 years or deferred until when the hotel is sold if that occurs sooner than 15 years. We require little assistance to build the hotel. The Aquatic Center does require assistance. We are asking for $300,000 of TIF assistance for the hotel and • $1,150,000 of TIF assistance for the Aquatic Center. The assistance for both will be generated from the hotel real estate taxes as a "pay as you go" tax increment. Part of the TIF ($1,150,000) will be paid to the EDA as additional land costs and than used by the EDA for the Aquatic Center. Once the proposal is accepted and a developer agreement signed. We would be able to finalize the design, complete application for the construction loan, arrange additional investor equity, the permanent loan, obtain a building permit and begin • construction. We anticipate construction to start in the fall of 2003 and • construction to take about 18 months. Sin Iy, Richard Krier, AICP Midwest Planning & Design, LLC CC John Livingston Tom Nobles Charles Knapp Inter - Continental HOTEL DEVELOPMENT QUESTIONAIRE • 1. Who are or will be the owners (principals) of your proposed development. Provide a brief resume of their experience developing like properties. r Cognoscente LLP is a development company owned by John Livingston Managing Partner (Resume Attached). Cognoscente has been involved in numerous developments including 3 hotels(Resume Attached) Inter - Continental Hotel Groups (formally Six Continents) is a hotel management company that owns 450 hotels and manages 3000 locations in 100 countries (Marketing Material Attached) Comten Development is a development company managed by Tom Noble. Tom and his family have been actively involved in the hotel development and management business in the twin cites for over 40 years. (Resume Attached) 2. Who will manage the proposed hotel development? Briefly outline their experience in hotel management. Inter - Continental Hotel Groups (formally Six Continents) is the largest . owner and manager of Inter - Continental, Crowne Plaza, and Holiday Inn hotels and resorts in the world. They also own and manage Holiday Inn Express and Staybridge Suites. This management company spends over $200 million annually on marketing and advertising, more than any other hotel • company. Holidex the industries best reservation system generates 400,000 calls per week. This will be the prime location for Inter - continental and unlike the competition a focus of its twin cities convention business. 3 What specific hotel affiliation and type is the proposed development going to be? • Crowne Plaza Hotel. The Crowne Plaza is a full service upper upscale hotel. . Crowne Plaza hotels feature a full service restaurant, luxury lobby, fitness center and 24 hour business services. The Crowne Plaza also has room service, relaxing lounges, comfortable quest rooms equipped with coffee makers, hair dryer and irons. The other features include high speed • elevators, enclosed connection to the conference center, and a garden • terrace adjacent to the orchard and pond. 4 How many rooms will there by and briefly describe their make up (suites and • standards, amenities, square footage, etc.) The Crowne Plaza will be 250 rooms plus the 10 rooms at the Inn on the Farm. The typical room mix and sizes are: Guest Rooms Percentage of Total Room Size Inn on the Farm 4% Variable . King Jr. Suite 1 % 610 SF HC King 2% 610 SF Extended King 3% 395 SF King A 33% 338 SF King B 27% 338 SF Double A 20% 338 SF i Double B 7% 392 SF . Double HC 3% 567 SF For the benefit of the Earle Brown Heritage Center, the final room mix and price point will be developed by the Hotel Developer, Inter - Continental as • manager and the Earl Brown Center Management. It is important to have close coordination with the Earl Brown Center Management and Conference Planners and the Hotel with all decisions being supported by a market study. • 5 How many stories will your development be? The Crowne Plaza will be a 6 story building. The Aquatic Center extra high one story space 6. Describe the pallet of materials proposed for the exterior of the building and approximate percentage each material represents as a total of the exterior skin. Both the Crowne Plaza and Aquatic Center will be all glass and aluminum curtain wall similar to the adjacent office building. The three white areas in the middle of the building area all stucco. The parapet wall cap will be metal clad (to match the metal roofs at the Earle Brown Center. The Base will all be red brick to match the Earle Brown Center. There will also be some detailing at columns to match the Earle Brown Center. 7. Provide a brief description or listing of amenities that will be available to your guests. The Crown Plaza will have the following amenities available to the quest: • Common Area: Luxury lobby,'lounge area, full service restaurant and bar, enclosed connection to the Conference Center. High speed elevators, 24 hour business service area including internet, fax, and r copy machine access, vending, decorated and appointed hall system • and a garden terrace. • Guest Rooms: Inn On the Farm rooms in the existing styles, king and double bed quest rooms including full appointed baths, desk and chair, amour, night stands, lounge chair, table and lights , refrigerator, • mini bar, TV, computer internet access, closet, and large windows 0 Site: Parking including handicapped parking, protected, barrier free arrival area with guest services, sidewalks, irrigated landscaping, including landscaped parking lot islands • Aquatic Center including lounge area, wave action pool, tots water play area, slides, and tubing area, in door and outdoor garden . terrace, lap pool, whirl pools, and locker rooms. This is a 15,000 square foot center to be available to the hotel quests, Brooklyn Center residents, and businesses in Brooklyn Center and Conference Center attendees. Because we are contributing $500,000 to the construction hotel quests would not be charged to use the Aquatic Center. Non resident will be able to use the pool with a more expensive day pass then residents and businesses. • 8. What is your minimum estimate of the total market value of your i development to which you would commit for real estate taxes. $13,945,000 • 9. What is the offer price to the EDA for the development site? $2,000,000 to be deferred for 15 years or until the site is sold which ever comes first. Another $1,150,000 would be paid to the EDA over the first 5 years. The total amount paid to the EDA would be $3,150,000. 10. Describe the level or type of food and beverage service that you would provide in your hotel and what providers/franchise you might have under consideration for this development. The Crowne Plaza will include a full service restaurant, bar, vending and room service. The restaurant and bar will be in the hotel and one of the high quality franchises in the Inter - Continental family such as Alamo Grill or the restaurant will be run by the Inter - Continental. I 'I 11. What if any financial consideration or assistance is necessary to this development? i li We would like Brooklyn Center to make available two types of bond financing. • Revenue bonds that would be available when credit enhanced by our team to finance the hotel • • Gross Revenue Bonds to build part of the Aquatic Center. We would provide $500,000 towards the construction of the $4,300,000 Center. $1,150,000 would be financed with proceeds from the EDA land sales (TIF amount) and the remainder with gross revenue bonds without a general obligation backing. This type of financing can be done by the City Council without the approval of the electorate. A financial feasibility study would be required indicating that enough revenues would be generated to issue the gross revenue bonds. The bonds would be repaid from revenues generated by the Aquatic Center. 12. What other financial assistance would you like the EDA to consider assuring the success of this development? There are four years left on the tax increment district established some time ago. We would like to capture the increment on a pay as you go method for the partial year 2005 and for years, 2006, 2007, and 2008. This will generate about $1,450,000 in TIF. One million one hundred and fifty • thousand ($1,150,000) would be used for the Aquatic Center. This would be done by providing the increment to the hotel developer. The hotel developer S would pay the EDA an additional $1,150,000 for the land. Because the Aqua Center will be owned and operated by the City or EDA, we would like • the City to waive the building permit fee and the SAC and WAC charges. 13. What obstacles or concerns do you have presently that would delay or prevent a spring 2004 construction start? None. Our schedule will be to start construction in the fall of 2003. With the existing low interest rates there is a need to start the construction as soon as . possible. Delays beyond 2003 may change the ability to obtain favorable • financing. �� D I � � --� a � �� 0 ••••••••••••• ••••••••••••••••••••••••••••••• rom -- — l' I 11 T1 p w ill Stnemauc Fronl Elevation _` L 250 Raom Crowns Plaza Rotel wft v „ a , Water Park and Restaurant This 250 room Crown Plaza Hotel, 4.500 square foot full service restaurant and bar and 15,000 square foot Aquatic Center (shown on the right) feature a unique architectural style designed to complement the Earle Brown Heritage Center. All elevations are mirror glass to reflect the Earle Brown Center and Inn image. The three white areas in the middle of the building are stucco. The parapet wall cap will be metal clad to match the metal roofs at the Earle Brown Center. The Base will all be red brick to match the Earle Brown Center. There will also be some detailing at columns to match the Earle Brown Center. The rooms will consist of suites, king and double rooms. The hotel's (Inn on the Farm theme) luxury lobby is illustrated below. The entire complex will be connected to the Earl Brown Heritage Center. + a i Typical lobby picking up the Earle M Brown Parlor Inn on the farm �' �j� r Theme Rear elevation with enclosed Connector to the Earle Brown Heritage Center and °*; Family fun at the Aquatic Center or garden terrace, red brick base, mirror glass r_ a place for fun while attending a to reflect the Farm image conference •••0000000 0 00 _wo0 0000•- •�r►- • = =•-� _�•�_q 1��0s•••• t 1 I I 1 .�� _u n LLLLILI; UiLLL ! _ _ I f 4. g7 TOT SITE AR j . a — ( Lu Av $chern-Oc ;:alt* Phrl COG NOSCENTE Lest 1 , Black 1 Brooklyn Farm � I II SIX CONTINENTS HOTEL k, vp I • I NTER CONTINENTAL ' ' P @ HOTELS AND RESORTS HOTELS • RESORTS.; IX CONTINENTS'"" HOTELS IS COMMITTED TO DELIVERING A QUALITY LODGING EXPERIENCE EVERY TIME A GUEST WALKS THROUGH OUR DOORS, WITH GREAT HOTEL BRANDS LOCATED IN JUST THE RIGHT PLACES AT JUST THE RIGHT PRICES. AS INVESTORS, WE SUPPORT YOU WITH GLOBAL SYSTEMS AND SERVICES, RELATIONSHIP MARKETING, AND OUR ONGOING COMMITMENT TO DELIVERING HIGH STANDARDS SYSTEMWIDE. At Six Continents Hotels, our goal is to From the moment you contact us at expand the worldwide distribution of our range Six Continents Hotels about a franchise license, of high quality hotel brands through a diverse joint venture, or management contract, our portfolio of owned and leased hotels, powerful resources come together with the management contracts and franchises. strongest hotel support team in the lodging The strategy for achieving this is to make our industry — a team dedicated to supporting your brands the preferred choice for the guest, project. While quality and service are words enhancing the revenues and returns for our we often use about how we treat our guests, licensees, partners, and shareholders. they are equally important in describing the way we work with our investors to plan, build or convert and operate a successful hotel. s Fortified by the strength of Six Continents PLC, there is no question that the standards we have set will keep us ahead of the competition well into the future. Hotel Inter - Continental Hong Kong I Six Continents Hotels corporate identity may be new, however, our success stories' are well known across many outstanding ■ rN ; ^ ` y ', brands — the most recognized hotel brands in the world: ■ +� • Inter - Continental® Hotels and Resorts • Crowne Plaza® Hotels and Resorts • Holiday Inn® Hotels and Resorts • Holiday Inn Express® Hotels Crowne Plaza Nashua, New Hampshire • Staybridge Suites® by Holiday Inn® Travelers may find themselves anywhere With billions of dollars invested in owned Holiday Inn Select Pittsburgh hotels, Six Continents Hotels thinks like a in the world, but the minute they spot Pennsylvania hotel real estate owner, not just a licensor. our familiar signs, they know they are Six Continents Hotels strategically deploys about to be warmly welcomed with the its capital to develop high - quality projects same quality, comfort, and service that capable of generating strong financial have literally defined the standards of the performance. In this way, all development hotel industry since 1946. That's why enhances the value of the hotel portfolio 90% of all U.S. travelers stay with us, including 68% in any one year. to both Six Continents Hotels and its licensees — but development is only part of the picture. From an operations standpoint, Six Continents Hotels ensures that brand standards are maintained at all levels, and controls the impact of new development on existing hotel properties. To our investors, this represents an outstanding investment opportunity. Fortified by the strength of Six Continents PLC, there is no question that the standards we've set will keep us ahead of the competition well into the future. I BUILDING THE WORLD'S PREFERRED PLACES TO MEET, RELAX, AND DREAM The worldwide brands of Six Continents Hotels present an outstanding investment opportuni INTERCONTINENTAL. POTELSRESOR HOTELS AND RESORTS Inter - Continental Hotels and Resorts is the world's Full- service Holiday Inn® Hotels and Resorts premier international upper - upscale hotel brand. have become "America's Favorite Hotel" by Dedicated to meeting the needs of successful, offering guests dependable services and discriminating travelers, the brand provides an amenities for both business and leisure extraordinary level of service at each of its 135 travelers. Guests enjoy amenities such as locations in more than 75 countries. Club floors, restaurants and room service, relaxing business centers, expert concierges, internationally lounges, swimming pools, and fitness centers. trained staff, functional and elegant meeting Properties also feature comfortable guestrooms facilities, superb dining, and guestrooms that are equipped with coffeemakers, hair dryers and distinctive and well - appointed, are the hallmarks irons. For the business traveler, today's that set Inter - Continental Hotels apart. Holiday Inn offers 24 -hour business services Generally located in the heart of the world's major and meeting facilities. cities and in exclusive resort destinations, the brand will continue to build on its world -class reputation t9 by opening special hotels that set the standard in - 5rm their market for hospitality and service. 3 E L E c T Holiday Inn Select® hotels are located throughout North and South America near business centers and airports. • Holiday Inn Select provides business travelers with special services and amenities to make their stay as comfortable and productive as Crowne Plaza Hotels and Resorts operates in the possible. Holiday Inn Select hotels feature heart of the upscale segment. An international hotel meeting facilities equipped with video - brand with more than 160 locations in 40 countries, conferencing capabilities, on -site meeting Crowne Plaza is renowned for its expertise in specialists, 24 -hour business services and managing meetings and in servicing the needs of professional support, and outstanding guest - business travelers. Meeting facilities are flexible, rooms equipped for business. with professionally trained staff to handle any request. Business centers; healthy dining alternatives; comfortable rooms with computer connections, SunSpree Resorts ample work space, and coffee makers; fitness centers; and 7 a.m. check -in are all standard features. Holiday Inn SunSpreeO Resorts can be found in more than 25 locations in the U.S., Canada, With its enriching style of hospitality and unique the Caribbean, and Mexico. The casual meetings expertise, the Crowne Plaza brand is atmosphere and modern facilities of particularly well positioned for growth in key Holiday Inn SunSpree Resorts make it easy urban, suburban, and airport locations. for families to relax and have fun together during their stay. Families will find activities Six Continents Hotels is able to coordinators who plan recreational activities and events for both adults and children. address distinct price points across Resorts feature themed gateway entrances, each spectrum by applying the right guest activity desks, sporting activities, brand to each new opportunity. and KidSuites® i Holiday Inn Express® is the modern limited service hotel for value- oriented travelers. These travelers expect clean rooms and Inter - Continental -The Barclay, New York conveniences such as a free breakfast bar, and free local calls within the U.S. and Canada — all delivered in an atmosphere of informal hospitality. Holiday Inn Express hotels are the ■ ( ii Jd' WW smart choice for travelers who want dependable "� r quality, comfort and convenience without all the extras most travelers don't use and don't want to pay for, such as a full- service * 1 ' restaurant, lounges or extensive meeting space. Crowne Plaza Palo Alto, California STAYBRIDGI U .y�� Staybridge Suites® by Holiday Inn® is the newest member of the Six Continents Hotels, Inc. _ corporate family and is the latest evolution of J the all -suite extended -stay concept. It is the / result of extensive research and the best Holiday Inn SunSpree Resort, Jamaica planning of one of the finest hotel organizations in the world. Staybridge Suites hotels incorporate unique flexibility, state -of- the -art technology and innovative features designed to meet customers' needs more completely than _ j any other hotel in the category today. E71i Staybridge Suites Lincoln, Nebraska is _ � u �• P �m all n a _ - r a n , a as . . F . Holiday Inn Orlando, Florida Holiday Inn Express Warwick, Rhode Island Holiday Inn Select Norfolk, Virginia 4 ALES AND MARKETING IN THE COMPLEX ENVIRONMENT OF TODAY'S HOTEL INDUSTRY, IT IS CLEAR THAT guests' needs are too diverse to be captured under a single hotel flag. Six Continents Hotels is able to address distinct price points across each spectrum by having the right brand for each new opportunity. It is this targeted approach which allows Six Continents Hotels to efficiently drive demand for our hotel products in accordance with established 1 11 marketing goals. Each brand maintains their own marketing strategies, focused on three distinct market segments: Business, Leisure and Meetings. Within each of these segments, marketing efforts are tailored to specific market opportunities. Brand alliances with such distinguished partners as American Express ®, Delta ®, Visa ®, and AT &T® enhance the overall effectiveness of marketing through increased distribution and shared costs. Sales and Marketing are integrated on several levels — global, regional and local — to ensure that each hotel benefits from the efforts of the entire corporation, and that the properties' individual marketing • j activities strengthen the entire brand. We have 300 professionals on our F.r r Global Sales Team throughout the world, including the U.S., Canada, Mexico, Tokyo, Hong Kong, Singapore and London. A planning process built on standardized tracking and reporting systems addresses specific revenue goals. Allerton Crowne Plaza Chicago Sales and Marketing are integrated on several levels — global, regional and local Inter - Continental Miami At Miami Center, Florida • y =�a I^ R.M. r '1►` �, , l Holiday Inn Express Centro HistBrico, Oaxaca, Mexico REATING LOYAL CUSTOMERS Priority Club members generate approximately SIX CONTINENTS HOTELS BELIEVL� i\ BUILDING 27% of the occupancy in the Americas. customer relationships to create brand Priority Club offers several marketing loyalty — the key to driving success. opportunities to assist you in targeting This approach reduces marketing costs, members through direct marketing. Using increases customer yield and maximizes the Priority Club database, we can provide revenue opportunities. information about members who have Priority Club® Rewards, the hotel loyalty previously stayed at your property. You can � program for Six Continents Hotels, currently communicate individual hotel bonus point serves more than 12 million members world - offers on our website, in our quarterly wide and is available at virtually every corner newsletter, and via direct mail postcards. Also, you can reward and recognize your most loyal of the world, including North America, Central guests, Priority Club members, with something and South America, Europe, the Middle East, they really value, Priority Club points. The Africa, Asia Pacific and the Caribbean. Members enjoy the opportunity to earn Priority Club Point Voucher program provides points toward free hotel room nights, a your hotel with the opportunity to award rich array of reward options through the Priority Club points when and where you want Member Awards Guide or airline miles with to, and all in just a few easy steps. over 40 airline partners. *-9r rP i - PRIORITY CLUB ® REWARDS rte► �► 3 Ln 4 , 1997 1998 1999 2000 2001 MEMBER IN MILLIONS S 0 S 6 f M IT Holiday Inn Select Vancouver, Canada S ERVICE, QUALITY AND TRAINING BUILDING ON OVER 50 YEARS OF HOTEL EXPERIENCE AROUND THE WORLD, SIX CONTINENTS HOTELS, INC. has established a Strong commitment to service and quality that enables operators to maximize profits while delivering a superior guest experience. Today, this wealth of expertise is at the heart of our Brands' success. More than bricks and mortar, a great hotel is a product of its staff. Nowhere is this more evident than at the Six Continents Hotels properties worldwide. The guest services staff is the key to building guest preference through strong customer relationships — relationships founded on the staff's ability to address each guest's unique needs, and their eagerness to go beyond the customer's expectations. The Services Organization provides extensive support when and where it is needed, making education and training resources, tools and systems available and relevant to each hotel's needs. Upon entering the Six Continents Hotels family, each hotel is assigned a field services representative who functions as an on-site consultant delivering expertise in the areas of guest service, product quality and revenue management. In addition to on-site consulting, the field services representative periodically hosts regionally-based workshops that provide networking opportunities and hotel-to-hotel interactions, in addition to fulfilling the training, certification requirements. More than bricks and mortar, a great hotel is a Staybridge Suites Houston, Texas product of its staff. • • Each hotel has its own Service Manager who can be reached by calling a dedicated toll -free number. The • Service Manager can quickly answer questions regarding • policy, procedures, systems and new initiatives. In short, • the Service Manager functions as an in -house liaison • jll between you and corporate headquarters, and in conjunction with the field services representative, provides an around- the -clock response to any issue that arises in the day -to -day operation of your hotel. Crowne Plaza Bucknead, Atlanta Quality Consultants perform routine inspections to ensure • Mark Hopkins Inter - Continental that each Six Continents Hotels property not only meets . San Francisco, California but exceeds guests' expectations. Like the field service • representatives, the consultants take on the role of trainer, educating hotel management in the area of product quality. • Human Resources policies at Six Continents Hotels • are focused on creating the world's best hoteliers by • encouraging the discovery and promotion of exceptional • and diverse staff members throughout the organization. • Owners, our guests, management and employees all • agree that we can't meet our guests expectations without employee commitment; therefore, employee education • and training are essential. • • • • • • {y Inn Cordoba, Argentina • Holiday Inn Express Benson, Arizona roe ECHNOLOGY • OPERATING A HOSPITALITY BUSINESS IS OFTEN DESCRIBED O in warm, friendly terms. After all, it is a people business. However, behind the scenes, it requires more than a smile to be successful. Today's technology must • be put to work for an efficient, effective operation. • In the hotel industry, no other technology measures up to our Property Based and Centralized Reservation Management Systems. These combine the power .�. of our advanced Six Continents Hotels Central Reservation /Management System (SCHCRS) with the • added efficiencies of our Reservation Optimizer (HIROTm) programming and our Property Management Systems. This integrated hardware and software system is geared to promote competitiveness and profitability . through applied technology. • Through this increased flow of advance business • and constant infusion of new technology, we are able • to increase overall productivity, cost management and resource improvements to the benefit of all • property owners. HIRO'"' REVENUE MANAGEMENT SYSTEM The HIROT"' system maximizes and optimizes reservations at your hotel by instantly reacting to shifts in demand conditions, accurately forecasting future business, and keeping close tabs on • room inventory levels. In other words, using current and historical data stored in SCHCRS and . HIRO, the systems determine the best reservation strategies for each hotel. The new Graphics User Interface screens, which will be available in 2002, will aid in navigation within the system and reduce training time. hr 1 I There are more than • 3,200 hotels and 520,000 rooms within the Six Continents Hotels • family, located in nearly 100 countries. Holiday Inn SunSpree Resort Wrightsville Beach, North Carolina • • • WWAb , AWrrb Still • Hotel Inter - Continental Guatemala • Guatemala City, Guatemala • . ESERVATIONS • As ON -LINE HOTEL BOOKING HAS EXPLODED, SIX CONTINENTS HOTELS continues to lead the industry with secure and flexible • websites. Continually striving to remain innovative, • n n n ee e n n n n u u IN eon n n n Six Continents Hotels maintains the first website to allow „ it „ „ e ,e ee ee ee ee ee „ It „ „ „ „ n n n e ee ee ee n e nee u u n n • real -time reservation bookings on -line. We were also the first ,e n n u u u e „ ee ee nee ee ee 11 „ „ „ „ hotel company to launch the industry's most comprehensive n u n n • _ ._ wireless services for locating hotels and making reservations. • Combined bookings on Six Continents Hotels websites continue • to grow dramatically, with triple digit growth each year, ranking among the top ten most visited of all travel industry websites. • Holiday Inn Atlanta Airport, Georgia • Voice reservation services are channeled through our global network of ten call centers in seven countries. This integrated global network processes over 25 million room nights per year, amounting to more than $2.5 billion in annual room revenues. Each of these calls, no matter where it originates, is — • managed by our advanced computer reservation system. The _ Six Continents Hotels Central Reservation System (SCHCRS), • the most powerful reservation system in the industry, makes it convenient and advantageous for travel intermediaries and • agents to choose one of our hotels. Our Six Continents Hotels reservation system links over 430,000 terminals worldwide, Staybridge Suites Naples, Florida • giving travel agents real -time access to our hotels through all • major global distribution systems and GDS back -ended websites. • • • 10 • AVENDRA i i EVERAGED PURCHASING PROGRAMS — AVENDRA LLC: THE ABILIT TO PROCURE AND PURCHASE GOODS AND SERVICES EFFECTIVELY AND EFFICIENTLY WHILE maintaining brand quality standards is essential to success in the lodging industry. As a proactive measure to leverage procurement at its hotels, Six Continents Hotels is a founding member of Avendra LLC. Avendra is the web enabled strategic supplier of business -to- business procurement solutions for the hospitality and related industries. Avendra provides one, comprehensive resource across all lodging brands. Through national and regional contracts, owners and operators realize significant savings on an extensive array of high quality products • and services. i Avendra combines procurement and purchasing power and is poised to target the estimated i $80 billion of goods and services purchased each year in the North American hospitality i market. Avendra's value to owners and operators comes from four key areas: hospitality expertise, largest purchasing volume, supply chain management expertise, and most flexible access to programs. i Avendra offers a cutting edge, Internet -based technology that enables management and franchise companies to gain complete control of all purchasing and procurement practices. The flexible software, offered by GoCo -op, allows for varying levels of authorization to create i purchase orders, a complete electronic catalog to view items, access to suppliers' inventory i levels, and connections to back office accounting systems for seamless payment and invoice tracking, among many other features. • • I � i • - - -- i W ill Inn Express Loudon, Tennessee r:q • i • • Avendra combines procurement and purchasing power and is g i poised to target the estimated $80 billion of goods and services Crowne Plaza Monterrey, Nuevo Leon, Mexico purchased each year in the North American hospitality market. • i r • • � # arr— x - ir A slowly 411 9 won fly i■: ■ r 1 � ■I 1■II � • Is Willard Inter-Continental Washington,DC • ESIGN AND PLAN REVIEW SERVICES EXPERTISE AND STANDARDS • THE DESIGN AND PLAN REVIEW TEAM PROVIDES CONSULTANCY The group's expertise includes all aspects of project ranging from full project management assistance for a development, from the planning and design phase to the new hotel to renovation planning, and is available to all specification, construction and fitting-out process. In Six Continents Hotels properties. addition, this area provides the hotel or resort with the INTERNATIONAL AND QUALIFIED PROFESSIONALS appropriate Architectural,Engineering and Life Safety standards,which are regularly reviewed to meet The Design and Plan Review offices of Six Continents changing international demands and regulations. Hotels, located in Atlanta, London and Singapore,are staffed with internationally experienced architects, To assist in driving consistency and service, the design engineers, and quantity surveyors. The group has and plan review professionals work closely with other comprehensive experience in selecting and recruiting departments,particularly Operations,Marketing and specialist consultants and contractors from its up-to-date Information Technology, and are the hotel's liaisons and register of professional consultants around the world. contact points during construction or renovation. 12 • • • i • • • • • • O SUCCEED IN HOSPITALITY IT IS NO LONGER ENOUGH TO DO SOME THINGS WELL. • TODAY, THE DIFFERENCE BETWEEN SUCCESS AND i • FAILURE LIES IN THE ABILITY TO HARMONIZE ALL • THE ELEMENTS AND MEET THE NEEDS OF AN INCREASINGLY DISCRIMINATING GUEST. , i THROUGH INNOVATIVE INTEGRATED MARKETING, • BEST PRACTICE OPERATING STANDARDS, AND • A GLOBAL PRESENCE, THE DISTINCTIVE BRANDS • OF SIX CONTINENTS HOTELS HAVE ACHIEVED • • IMPRESSIVE SUCCESS ALREADY - AND ARE DEDICATED TO REMAINING THE WORLD'S • PREFERRED PLACES TO MEET, RELAX AND DREAM. i • • • • • • SIX CONTINENTS HOTELS INVITES YOU TO i BE PART OF THE FUTURE OF HOSPITALITY. • • • • i i AM Iw l mm Iwl !' N mw ! �. an1 I I� Noma �I !I N owl ! rt I _ r I Am AIM AW � � I E _ 1 • .. 1 �..'ar I .. r I/ ,I � N „•,,. �' _ two +'�N"4�`��1 f � • s • s • • • • • • t • 1 . • • • • • • Al • SIX CONTINENTS • SIX CONTINENTS HOTELS Three Ravinia Drive • Suite 2900 • Atlanta • GA 30346 • www.6c.com /development • ® 2002 Six Continents Hotels, Inc. All rights reserved. Most hotels independently owned and/or operated. The following registered trademarks, service marks and trademarks used in this publication are owned by Six Continents Hotels, Inc., Its parent, subsidiaries, or affiliates: Inter- Continentar', Crowns Plaza-, Holiday Inn*, Holiday Inn Family Suites'- Resorts, Holiday Inn Express', Holiday Inn Select^°, Holiday Inn SunSpree® Resorts, Staybridge Suites' by Holiday Inn', Priority Club-, HIR0 KidSuites•, Stay Smart', Six Continents'" is a trademark of Six Continents PLC and used under license. • AMERICAN EXPRESS' is a registered trademark of American Express Company. Delta® is a registered trademark of Delta Air Lines, Inc. AT&T• is a registered trademark of AT&T Corp. VISA° is a registered trademark of Visa International Service Assoc. Registered mark. ° Marca Registrada. ` Marque de Commerce. °"Service Mark. TM Trademark. • '• - I O' -1 V3 • � I li' -1 Vt • rL ALL i 1 i I I p g ° k F* F F11 D P , I. I D 1 CL r. I orr T q O - I — I o °T I ,�• I I �°benn I I pHWGlR4TCR OP WIL \/ 1 _ i i O X o ;,.� ! V -b V4 • 9' -13T' 6 1' ! 6'-p V4 • p' -� Y8 • IVI • ! Y -18 /t • 6'-0 &6 • lY-0 3/t • �/ l 6 V4 • x aae° i - �cHapb 1 - - �ciwee w S _ I O ir3 vy 1 ENLARGED KING GUEST ROOM PLAN °°10A1 a sv I ENLARGED D/D GUEST ROOM PLAN ENLARGED ACCESSIBLE D/D GUEST ROOM PLAN 70 1/4• a l'- 0• eacq aaeer ro un�° 4 10 1/4'- V- 0' 10 M 10 i r I a.rg 7 2-1 *• H om, ° FNI J. �••-It a :, � „ :1 ; I i i I � i C I 1 G s f I I O — IK — `, Rj O I C ^ C I I j i I I C rw r-au• . I i x r-• In —' Qr a ll s i • - I � i - ' io a � i s 0 N 6D i i' w 4 I •- I .. ` � � D 1 —. - - --- � c o - C 1 ��gry1 , i I � •� i i �� a -x iro • 1 e-i sro • i' ro • I w-4. • t Y Vd • 2'-0• I V4 , e -, sm • �-x �� • I xC C�9 1 ENLARGED KING GUEST ROOM PLAN � I"�TORAQ � z ENLARGED ACCESSIBLE KING GUEST ROOM PLAN ENLARGED KING GUEST ROOM PLAN 114'. 1'. 0• w�e w awia° wva �j 1/4• s 1' • 0• 71 1/4• . 1' - 0• 1 1 swcomnNM una,.°,In ray° .� � � �c.� — LSD � � o ss �r C �� , �� ; �� a p ��7 f c '� �� 0 ' BPXAILK BREMER BANK 225 SOUTH SIXTH STREET, SUITE 200 MINNEAPOLIS, MINNESOTA 55402 BANKING• INVESTMENTS *TRUST •INSURANCE (612) 782 -1960 FAX (612) 782 -1978 March 18, 2003 John Livingston Managing Partner i Cognoscente, LLP • 2502 n a Avenue South Suite 240 Minneapolis, MN 55401 Re: Hotel Financing in Brooklyn Center, MN Dear John: Bremer Bank, N.A. ( "Bremer ") is a full service financial institution serving the Twin . Cities Metropolitan Area. Bremer lends funds for the construction and permanent financing of commercial real estate projects that include office, industrial, retail, residential and hotel/lodging properties. Bremer would consider providing financing for various hotel/lodging projects assuming the following criteria are met: • Strong local sponsorship of the project; • Personal guarantee of the loan amount by a local individual with significant financial strength; • • Substantial equity contribution of the borrower equal to at least 25% of the overall project cost or 30% of the project's appraised valuation, whichever is more; • Minimum debt service coverage of 1.35x. This letter is not a commitment to lend, but rather an expression of interest to further examine all aspects of any potentially requested loan transactions. If you would like to discuss this matter further or have any questions /comments, please . feel free to contact me directly at 612 - 782 -1983. Sincer , Bradley L. Steiner Commercial Real Estate Officer 24 -HOUR BANKING 1- 800 - 908 -BANK • TDD 1- 800 - 829 -6795 www.bremer.com • BREMER BANK IS MEMBER FDIC • • • • . SIX CONTINENTS February 17, 2003 • • Mr. John Livingston Cognoscente 250 Second Avenue South, Suite 240 Minneapolis, MN 55401 Re: Proposed Holiday Inn - Brooklyn Center, MN • Dear John: • • Six Continents is looking forward to receiving your application for a new proposed full service Holiday Inn in Brooklyn Center, Minnesota. The proposed location is a choice • site in a strong market. Your group's experience owning and operating hotels is another advantage. Six Continents would look forward to the opportunity to manage the hotel. • This would be our first managed property in the Minneapolis/St. Paul area. Six Continents Hotels is very proud of our leadership position. Holiday Inn hotels now serves our customers in more than 3000 locations in more than 100 countries worldwide. • The brand recognition of our hotels, three times that of our nearest competitor, is only one benefit of affiliating with us. Six Continents spends over $200 million annually on r worldwide marketing and advertising, more than any other hotel company. Holidex, the • industry's best reservation system, generates more than 400,000 calls per week, approximately 25 million room nights each year, and more than $2.5 billion in room sales each year. • We would be happy to meet with you and the City of Brooklyn Center to review the hotel design. We look forward to working with you on this project. • Sincerely, i r Charles W. Knapp • Regional Director • Franchise Sales & Development 2850 28 Avenue SW Fargo, ND 58103 • 701.232.8519 phone 701.232.8536 fax • • • • • John Livingston, Managing Partner Cognoscente, L.L.P. 250 Second Avenue S., Minneapolis, MN, 55401 Cognoscente's team of development professionals has been together since the mid 1980's and took its current name in 1997. Cognoscente is a Latin word describing knowledge as an art form. More • information can be found at www.Cognoscente.biz. Through the years our team has consulted on, i or constructed projects ranging from housing to building conversions to new office /warehouse construction. Some of the projects include: S HOTEL DEVELOPMENT AND CONSULTING • Candlewood Smites Land and option rights were purchased from Homestead Village during their bankruptcy reorganization for the development of a non "Homestead" property. Cognoscente directed the assembly of a investment group, engaged an architect and contractor. The investment group approved the selection of Candlewood Suites as the flag for the property. • Government approvals previously granted to Homestead needed to be modified for the selected brand. Cognoscente directed all activities until being paid for its interest in the project. Cognoscente decided to withdraw from the project to pursue the development opportunity with ® Cendant. You can see the project at: http:// terraverdeusa .com/Candlewood.htm • Staybndge Inn by Holiday Inn. Cognoscente, as developer, contracted for the purchase of land at • multiple locations, negotiated municipal approvals and arranged mezzanine financing with the franchiser as well as made arrangement for construction and permanent financing. During the final phase of contractor selection ownership of the projects were transferred to another investment group whom had pursued the projects after being introduced to them by Cognoscente. Multiple areas in the Minneapolis / Saint Paul area were involved as well as one location in Colorado. The project proceeded and the hotels were built. Crestswd Suites. Exclusive representative (Minnesota & Wisconsin) for Burson & Simpson Lodge i Development, Inc's evaluation of the Minnesota and Wisconsin areas for expansion of their • wholly owned brand Crestwood Suites ( httn : / /www.crestwoodsuites.com). Crestwood maintained 9 properties in the southeast states and wanted to evaluate expansion in this market. Cognoscente undertook, on behalf of the principals of Crestwood, the negotiation for the purchase of land and air rights as well as government entitlements. Several areas were studied, • cataloged and a matrix prepared. The areas studied were Minneapolis and Saint Paul metro area, • Rochester, Minnesota, Saint Cloud, Minnesota and the areas of Madison and Milwaukee Wisconsin. • SPECIAL APPLICATION FACILITIES • United Healthcare. Redevelopment of an existing 400,000 square foot manufacturing facility to Class "A" office and Data Center. ■ Worked together with the client's administrative services director to determining scope of project. Project expanded to include relocation of a major component of the company employing over 600 people.. ■ Managed project parameters, site selection and contract services negotiation process for each phase of the redevelopment project.. ■ The project resulted in a $20 Million dollar tenant improvement as well as a complete exterior redesign and refit. ■ Negotiated a multi - million dollar joint development agreement with electric utility for standby power. ■ Directed the documentation and financial agreements of the transaction in order to minimize the impact on the real estate tax value of the improvements. This direction created a savings of over $10 Million dollars in real estate taxes to the tenant. Providian Bank. Cognoscente was asked to evaluate the real estate department of a growing service bank located in San Francisco, California. The bank was rapidly expanding its credit card services business and needed additional call centers. The company was growing at an incredible rate having been at approximately 1,200 employees upon contacting us and growing to over 8,000. Cognoscente, acting as an outsource real estate department, evaluated the current decision . process and gave corrective direction OFFICE AND WAREHOUSE Free Spirit Publishing. Cognoscente purchased a 100 year old, 60,000 square foot warehouse for . conversion into retail — restaurant and office. All aspects of the project were directed including • architectural, engineering and historic restoration. After the principal tenants were secured the property was sold. Total cost of project approximately $3,000,000. The project looks like this: http: / /terraverdeusa.com/428.htm Warehouse Development Consulting. Cognoscente has been retained by multiple companies to oversee the development process for the construction of warehouse and manufacturing space. Recently complete projects include two 60,000 square foot office /warehouse properties in Bloomington, MN as well as a 162,000 square foot warehouse in Shakopee, MN. We assisted in the leasing of the properties. HOUSING Ballast Point Group, LeCesse Development Corporation, and Del Amenca Development have all contracted with Cognoscente for the development of housing and mixed use housing projects. Collectively • the three groups, in combination with Cognoscente, proposed development of over 1,000 housing units in Minnesota since 1999. The projects ranged in size from 150 units in 3 story mixed use structures to a high rise structure with over 300 housing units, a hotel and parking structure. Many of the projects were mixed use requiring additional partners to augment the project. Cognoscente negotiated with and secured those development partnerships with local a companies (Le., Welsh Companies, InterContinental Hotels). OFFICE . Zentro py Partners Cognoscente was retained by Inter -Public Group to negotiate the lease of space . for a new company it was creating. Because this new company was not yet in existence we were required to secure the lease, analyses and design the space to meet the company's intended use, and, after building out the space, deliver it to them turn-key. We were highly successful in all S aspects of the project. The lease negotiations resulted in lease terms that were significantly better . than any other lease in the program of seven offices. Our responsibilities included not only build - out of the space but space design, furniture budget, selection and installation as well as the installation of sophisticated telcom and computer systems. This 40,000 square foot lease was brought in exactly on time and within $5,000 of the scheduled budget even after changes. Various Projects We have been retained by many growing companies to analyses, design and implement leasehold improvements. In some cases we have been asked to act as principal in i • • order to complete a project. DataSource Hagen retained us to locate lease space to meet its specific needs. When space could not be found they contracted with us to design/build and lease back space to them. You can see some of the analysis on the following web page: • http://terraverdeusa com/DataSource.htm. • GENERAL . Cognoscente maintains a partnership with Terra.Verde Development,LLC a full service architectural and construction company located in Boulder, Colorado and licensed to operate in • multiple states including Minnesota. Terra Verde provides full in-house architectural services complete with CAD/CAM capability. They are actively involved with resort and golf community • development as a contract provider of architectural and site plan services. Terra Verde's web site is: hM://terraverdeusa.com. • • i • • • • i • • i • • • • • • • • • • • .10 • • • THOMAS EDWARD NOBLE BUSINESS ADDRESS: 405 South Eighth Street Minneapolis Minnesota 55404 • Phone: 612-375-0501/Fax: 612-375-0502 Email: westreal@gwest.net COLLEGE HISTORY: BBA Southern Methodist University-May 1984 CURRENT POSITION: President West Real Estate and Management, Inc. r • WORK HISTORY: May 1984-November 1987/Associate: Henry S. Miller . Grubb and Ellis Real Estate Services 2001 Bryan Tower#2000, Dallas Texas Responsibilities included Land Acquisitions, Property Leasing, Financial and Feasibility Analysis, Syndication S Sales and Marketing of Public and Private Syndication Offerings. December 1987-December 1996 • Noble Hotel Company/Kensington Investments i Responsibilities included various job descriptions leading To Operational Oversight of Corporate Hotels, Industrial Real Estate and Miscellaneous Investments. Corporate Hotels included a 200 Room Full Service Major Downtown • Area Hotel and a 260 Room Full Service Major Airport Hotel. The Industrial Portfolio consisted of Approximately '/2 Million Square Feet of Industrial Space located around the Minneapolis Market Area. January 1997-December 1999/Industrial Associate United Properties Real Estate Services 3500 West 80th Street, Minneapolis MN 55431 Responsibilities included all aspects of Marketing • Industrial Real Estate including Brokerage(Sales And Leasing), Development and Consulting for Third Party Clients. Acted as In-House Consultant For Company Hotel Brokerage Assignments Worldwide. • December 1999-Present/President West Real Estate and Management, Inc. 405 South Eighth Street, Minneapolis MN 55404 Responsible for Development of Office,Hospitality, And Industrial Projects for Family Real Estate Partnership. I • r Ii WORK HISTORY(CONT): Current Projects include 123,000 Square Foot Warehouse In Shakopee Minnesota, 29,000 Square Foot Office in • Bloomington Minnesota, 170 Room Limited Service Hotel In Phoenix Arizona, and various Hotel and Industrial Projects in the Planning and Feasibility Stage of Develop- ment. PERSONAL: Age 39, Married with Three Children. Interests include Hunting, Fishing, Coaching Youth Athletics. i • • • • i • • • • • i • i • i BUSINESS RESUME THOMAS E. NOBLE I � • 1984-1987 Henry S. Miller/Grubb and Ellis Commercial Real Estate Services 2001 Bryan Tower,Dallas Texas Broker-Investment Division Duties included sales and marketing of public and private syndication units. Projects were primarily retail and multi family investments and developments located throughout the Dallas/Fort Worth market. Duties also included representing M company and third party clients in acquisition and disposition of commercial land in the north metro area. 1987-1997 Kensington Investments *I 405 South Eighth Street Minneapolis Minnesota 55404 General Manager of a family real estate business specializing in hospitality and industrial properties. Duties included management of hotel operations including . multi-property operations. In addition,duties included property management and leasing support for a 300,000 S.F. commercial industrial portfolio located throughout the Minneapolis/St. Paul metro area. 1997-1999 United Properties Commercial Real Estate Services • 3500 West 80th Street, Suite 200 Minneapolis Minnesota 55431 Industrial Broker i Provided real estate solutions to company and third party industrial clients by providing leasing, acquisition,and disposition services throughout the Minneapolis Metro Area. Duties included landlord or seller representation, tenant or buyer representation,and general consulting services. . 1999-2002 West Real Estate and Management,Inc. 405 South Eighth Street Minneapolis Minnesota 55404 President • Duties include general operational oversight of a family partnership focusing on development, management, marketing,and acquisition of hotel and industrial real S estate. The current portfolio consists of approximately 500,000 S.F. of office warehouse buildings located in the southwest quadrant of the Minneapolis market and a 200-unit hotel located in downtown Minneapolis. College: Southern Methodist University,Dallas,Texas,B.B.A-Finance 1984. General: Married with 3 children—wife Susan,John 10,Danny 7, Grace 2. Resume • Richard Krier, AICP 1491 Shoreline Drive Wayzata, MN 55391 952 476 1762 1 have over 35 years of planning, redevelopment management, real estate development, municipal zoning and economic development experience. I have worked as a planner providing zoning administration, comprehensive planning, neighborhood planning and project planning for a number of cities In addition, I have worked as a housing and redevelopment specialist managing the urban design, financing and redevelopment process, developing housing strategies and neighborhood revitalization strategies. I have been principal consultant to municipalities, EDAs, redevelopment authorities, port authorities, and large real estate developers. I have served as Community Development Director for a suburban municipality, National Director of Development for a large health/housing company and planner to a number of neighborhoods and cities. While National Director of Development, I created and managed the redevelopment of housing and downtown projects worth more than $180 million. These redevelopment and housing developments are in Minnesota, Iowa, Georgia, Florida and Colorado. 1 have a Masters degree in Urban Studies and a Bachelors degree in Geography and Political Science. I am a member of the American Institute of Certified Planners, and American Planning Association, Until recently, I have been a member of the Urban Land Institute, and National Association of Housing and Redevelopment Officials. I have certificates from the Urban Land Institute in Real Estate Development and Real Estate Finance and various continuing education certificates in project management and organizational • development and facilitation. As a recognized expert in housing and redevelopment, I have served on: The APA Legislative Committee, Minnesota NAHRO tax increment financing committee, Former Senator David Durenberg's Advisory Committee on local affairs, Hennepin County CDBG Citizen Advisory Committee, APA Economic Development Advisory Committee and several Metropolitan Council Task Forces and Committees including: Fully Developed Area Task Force, HRA Advisory Committee, S and Committee on Aging I am currently serving on the Urban Ventures Real Estate Advisory Committee, GTS Technical Advisory Committee and LMC Annual Conference Program Committee. My recent endeavor is to develop a system for building and sustaining community/ neighborhood character. I teach the subject for the Government Training Service and the Minnesota League of Cities. I have also been i adjunct faculty at Mankato State University where I taught organizational development. I have taught tax increment financing and the development process at Hamline University I � Project Lists Revitalization and Redevelopment Richard Krier, AICP i 1491 Shoreline Drive Wayzata, MN 55391 952 476 1762 City of St. Cloud M While on staff(1966 to 1968), 1 completed work on the St. Cloud Comprehensive Plan and Downtown Redevelopment Plan. This M was one of the first redevelopment projects outside of the twin cities. City of Dayton Ohio While on staff, I completed a citizen • participation system and work as liaison with the school district desegregation committee. City of Rochester While on staff, I accomplished several projects including: A major sewer study • Organized the "new" HRA to provide assisted housing Prepared a major economic development plan • Provide assistance to the Planning Commission and worked on the performance based zoning ordinance • Initiated and organized the Rochester i Olmsted Council of Governments City of Richfield . While on staff as Community Development Director, I accomplished several projects including: • Initiated, organized, worked with the business community and neighbors, planned and administered the Lyndale HUB Nicollet Redevelopment Project. A 90 acre redevelopment project and one of the most successful in the State. f I � i • Initiated, planned and administrated the New Home Program for revitalizing Richfield Neighborhoods • Produced a performance based zoning ordinance to regulate the redevelopment • Prepared a revitalization Comprehensive Strategy that is still being used today • Managed a Community Development Department • Working with Hennepin County cities, initiated and negotiated first urban county agreement for CBDG funds • Provide organizational development training with City Managers Wayne Burggraaff and Karl Nollenberger i City of St. Anthony As a consultant working with the City Manager, i David Childs I accomplished the following: • Planned, organized the business community and administrated the Kenzie Terrace Redevelopment Project. This project has been very successful and is now in its second generation of redevelopment • Planned and administrated 4 other minor S redevelopment projects City of Brooklyn Park As a consultant I organized the HRA, planned and administered two redevelopment projects 4 City of Willmar As a consultant working with the downtown businesses, I prepared a revitalization plan City of Spicer As a consultant working with the EDA, I prepared a alternative design for TH 23. 1 also negotiated with MNDOT on the highway design to provide integration with the downtown. City of Maple Plain As a consultant, I have accomplished the following projects: • Comprehensive Plan e Downtown Redevelopment Plan e MNDOT negotiations for Highway 12 downtown. Senior Housing task force facilitation City of Duluth As a consultant working with the NW Neighborhood, I prepared the NW Area Revitalization Plan. This plan was accomplished using a real time land use planning computer-based model called SAVES City Chicago Heights As a consultant working with the Community Development Director and neighborhood organizations, I have prepared several plans including: e East side revitalization plan. This plan was part of the Hope VI grant application • SW Neighborhood and Hill Neighborhood revitalization plans. These plans have a emphasis on crime prevention e Prepared a Traditional Neighborhood Development Ordinance to implement the neighborhood plans City of Superior As a consultant, I accomplished several projects for the City including; e A neighborhood revitalization comprehensive plan e An economic development study e North End Neighborhood Revitalization and Design Guideline Implementation Program e An historic preservation plan and implementation program, e Revised performance standard based zoning ordinance A Fair Housing Plan and Program e A Master CBDG Plan and Program e A CBDG monitoring plan and program e City Hall location study to keep the City Hall downtown e Department reorganization plan M • • I was interim community Development Director for just over 1 year responsible for department operations while the City searched for a Director • City of the Village of Minnetonka Beach As a consultant, 1 am the planning and zoning administrator for this community. In addition, I »1 have completed a number of projects including: e A neighborhood preservation comprehensive plan and negotiated with the Metropolitan Council e Facilitated a road closure task force e Rewrote a number of the city's ordinances City of Shakopee As a consultant, I worked with a downtown task • force to complete their first Downtown Redevelopment Plan. Most of this pain has been implemented • City of Excelsior Working with the Planning Commission and key downtown business leaders, I completed an interim strategy plan for downtown • preservation City of Ashland Working with task force, I facilitated the preparation of a redevelopment plan for the "old rail yard" Urban Ventures As a consultant, I have complete a number of • redevelopment projects for this CDC including: e The Opportunity Zone Redevelopment Plan a revitalization plan for a 10-block area in • the Lake Street and 4th Ave area. The 4th and Lake redevelopment project e The Collin Powel Center redevelopment project Hillside Business Association • As a consultant, 1 have completed a number of projects for this CDC including: i • I • • Village Place mixed use redevelopment ` project, a first floor retail center with housing above The SMDC redevelopment plan • HBA over all redevelopment strategies using Michael Porters theory of"competitive advantage". This plan is currently being implemented. Loring Square Neighborhood Council I was retain to prepare a feasibility study on the Council's proposal to create a CDC Redevelopment Projects While Director of Development for a large national health company, 1 initiated, planned, arranged financing and managed the development of the following redevelopment projects: • Village Place at Longmont, a senior housing redevelopment in Longmont CO • Village Place at Marion, a senior housing redevelopment in a suburb of Cedar Rapids • Village Place at Mankato, a mixed income apartment project • Village Place at Colorado Springs, a large apartment complex i • Village Place, a Minneapolis townhouse redevelopment project • Village Place at Sky Line, a St. Paul townhouse project Park Terrace Residence, an Anoka senior housing project • Oak Ridge Place, a Stillwater, senior housing project • Cottages of White Bear, A senior housing project Market Towers/Market Palza, a large mixed use redevelopment • Wood Lake Point, a large high rise senior housing redevelopment project • Park Place, the first Housing Development Action Grant (HODAG) project in Minnesota • Park Place Eden Prairie, a mixed income housing development • Lindberg Place a large redevelopment in Atlanta Georgia • Skyline Apartments, an affordable housing development in Naples Florida r TERRA VERDE ARCHITECTS,LLC We are dedicated to providing exceptional professional design services. Meeting our i client's goals economically, functionally and aesthetically has earned Terra Verde its . reputation for superior service and design excellence. We provide creativity and leadership to assist our clients in developing the best design solutions. In our teamwork system for design your objectives are heard and understood. Through open communications and careful analysis we are able to share your vision and lead the team in creating your distinct architecture. Terra Verde is well versed in all types of architectural projects including commercial, i residential,hospitality and resort.As developers ourselves we understand the process from start to finish and therefore bring a unique experience to bear on behalf of our clients.Principal Mark Queripel,AIA, CID,NCARB has over 25 years of diverse experience as an Architect, Planner, Interior Designer, Commercial Real Estate Agent a and Developer and is a nationally recognized leader in the design/construction industry. Below is a partial list of past projects of Mark S. Queripel, AIA, CID,NCARB: �' • Bromley Park V, (180 twnhomes),Design Services, Brighton, CO • Candlewood Suites Hotel, Planning Services, Plymouth, MN • Award-winning Lake Valley Golf Clubhouse, Design Services, Longmont, CO • Staybridge Suites Hotel,Planning Services, Bloomington, MN • Red Roof Inn and Suites, Planning Services, Thornton, CO • The Shores Apartments, (280 luxury 1,2 &3 bedroom units with detached garages and a Clubhouse/Pool), Planning and Design Services, Longmont, CO w • Nobel Park Townhomes, Planning and Design Services,Boulder, CO • Historic Carversville Hotel Restaurant, Interior Design, Carversville, PA • Historic St. Paul Hotel, Renovation and Interior Design, St. Paul, MN • Downtown Radisson Hotel, Interior Design, Minneapolis, MN • Historic Commodore Hotel, Renovation, Interior Design, St. Paul,MN • Bridger's Cache(20 ski-in/out units and clubhouse), Planning Services, Design Guidelines and Marketing Collateral, Winter Park, CO • The Cabin Club(Clubhouse and 24 luxury cabin units),Planning, Design and ,f Interior Design Services, Fox Acres Country Club, Red Feather Lakes, CO • The Tuscany at Cherry Creek(8 luxury condos),Design Services, Denver, CO • Rosemary Woods Townhomes, Design Services, Plymouth, MN • Centennial Townhomes, Design Services, Coon Rapids, MN • Country Crossing Townhomes, Design Services,Elk River, MN • Lewiston Townhomes,Planning and Design Services, Estes Park, CO Terra Verde Architects,LLC.954 Pearl Street Boulder,CO 80308 (720)565-3929 www.terraverdeardi.com MARK S. QUERIPEL,AIA, CID,NCARB Principal Education: University of Minnesota,Master of Architecture, 1980 University of Wyoming,Bachelor of Arts, 1973 Registration: National Council of Architectural Registration Boards Certification(NCARB) Licensed Architect:Colorado,Minnesota,Nebraska,New York and Wisconsin Certified Interior Designer: Minnesota Real Estate Agent: Minnesota(license inactive) Certified Sales&Marketing Professional:National(inactive) Memberships: American Institute of Architects: Colorado Chapter of the American Institute of Architects, 1997&2001 Board Member, 1996&2000 Editorial Board Member,2000&2001 Governmental Affairs Committee;Colorado North Chapter of the American Institute • of Architects, 1997&2001 President, 1996&2000 President Elect, 1997, 1998,2000&2001 Nominations Committee,2001 Design Awards Committee Co-Chair, 1997, 1998&2001 Annual Awards Banquet Chair, 1995 . Program Committee Chair National Association of Home Builders: Colorado Association of Home Builders;Home Builders Association of Metro Denver 1998 Executive Board; Boulder County Chapter Board 1995, 1996, 1997, 1998,&1999,Tour of Homes Committee 1994, 1995,&1996, Membership and Retention Committee 1995 Chair, 1996, 1997, 1998,Government Affairs Committee 1997 Chair, 1998, 1999,Vice President of External Affairs 1997,Chapter President 1998,Saint Vrain Valley Public Schools Fund Raising Committee Chair 1998,Jefferson County Public Schools Fund Raising Committee 1996 Boulder Chamber of Commerce: City of Boulder Comprehensive Plan Subcommittee 1996,Community Development Committee 1995,1996&1997 University of Wyoming Alumni Association: Life Member University of Minnesota Alumni Association: Life Member Publications: • "Mile High Boom+Bust"AIA 2001 National Convention/AIA Colorado Magazine Commemorative Issue "Blueprints"Monthly Column for The Denver Post's Sunday Home Section "What Makes A Livable Community"April 2000,AIA Colorado Newsletter "Why Is Less More When Remodeling?"March 2000 Home Builder Magazine "Network"February 2000,AIA Colorado Newsletter "What Kind of Builder Do You Want to Be in 2000?"January 2000 Design/Build Magazine "Is There A Colorado Regional Home Style?"November, 1999,Home Builder Magazine "Remodel or Build New?"October, 1999,Fall Tour of Homes Magazine "Childish Advice"September, 1999,Home Builder Magazine "Net-work"July, 1999,Home Builder Magazine "Remodel or Start From Scratch?"May, 1999,Home Builder Magazine "Built Green-Is There Really Any Other Choice?"April, 1999,Home Builder Magazine "Trends in Home Design"February, 1999,Home Builder Magazine • "Actions Speak Louder Than Words"September, 1998,Home Builder Digest "What is Public Relations"June, 1998,Home Builders Digest "New Year Ahead"January 1998 President's Letter,Home Builders Digest "New Trends in Custom Home Design" 1997 Fall Tour of Homes Magazine "Terra Verde Development"September, 1997,AIA Colorado North Chapter Newsletter "Which Hat Do You Wear?"August 1997,Colorado North Chapter Newsletter of the AIA "Trends in Architecture:Going Home"Harvest of Homes Tour,Daily Camera,Oct. 1995 "Your Architect is a Partner in Your Dream.Home",Spring Showcase of Homes,Daily Camera,May, 1995 "Architectural Trends in Home Design",Fall Festival of Homes,Daily Camera,Oct. 1994 I, • • Mark S.Queripel,AIA "Energy Efficient Housing:A Research Survey",University of Minnesota, 1979 • Teaching: Master of Ceremonies,AIA Colorado North Chapter Annual Awards Banquet,2001 AIA 2001 National Convention Speaker,Design/Build in the Custom Home Market University of Colorado at Boulder,College of Environmental Design,2000 Juniors Fall Studio Guest Critic 1999,98,97,96,95,&94 Tour of Homes Judging Committee,Boulder County Home Builders Association. 1998 AIA New Mexico Annual Design Awards Juror 11`h Annual NAHB Custom Builder Symposium,Plan Review Roundtable Session Critic, 1999 11`h Annual NAHB Custom Builder Symposium Speaker,"Design/Build Process", 1999 Colorado Renewable Energy Society(CRES)Speaker,"Built Green Marketing",1999 Home and Garden Television,Dream Builders Series,"Building Green", 1999 Master of Ceremonies,Boulder County Chapter of HBA Annual Awards Banquet, 1999 "Home Design"Guest Speaker,Boulder County Chapter of HBA General Membership Meeting, 1998 Master of Ceremonies,AIA Colorado North Chapter Annual Awards Banquet, 1997 • Boy Scouts of America,Architecture Merit Badge Counselor, 1997 Home Design Seminar Panel Member,HBA Tour of Homes, 1995&1996 University of Colorado at Boulder,College of Environmental Design,Guest Design Critic, 1996& 1997 Boulder Technology Incubator Group Guest Speaker,"Build or Lease", 1996 Milwaukee School of Engineering,Student Advisor/Mentor Program, 1993 • Milwaukee Public Schools,Student Mentor for Architecture, 1993 Denver Public Schools,Student Mentor for Architecture, 1992 SMPS Colorado Guest Speaker"Marketing New Turf', 1991 Awards: 2001 Platinum Award for"Best Overall Home between$500,000.00&$1,000,000.00"for"La Cortina" 2000 Rocky Mountain Chapter American Concrete Institute Award of Merit,Comer Residence,Breckenridge,CO 1999 Fall Tour of Homes Peoples Choice Award&Gold Award for a Whole House Remodel,Boulder,CO 1999 MAME Award,Silver Finalist,Custom 3,200 SF Spec Home Lot 2,The Shores,Longmont,CO Quiet Retreat#2,Tour of Homes,Gold Award,Best of Show,Judges Award, 1998 Quiet Retreat#2,Tour of Homes,Gold Award,Best of Show,People's Choice, 1998 iLot 2 North Lake,HBA Platinum Award of Merit,Best Kitchen&Best Family Room/Great Room,Spring Tour • Villas at North Lake,HBA Platinum Award Best Exterior Design,Fall Tour of Homes 1997 1997 Presidents Award for Service,AIA Colorado North Chapter Lot 2 North Lake,Platinum Award of Merit,Best Exterior Design&Gold Award Best Family Room,Fall Tour Lake Valley Golf Club,Clubhouse,First Place 1996,unbuilt Design,Colorado North Chapter of the AIA Blackfox Group,Commercial Remodel Category, 1994 NARI Award and AIA 1995 Ten on Ten featured project. Hepp Homes,Gold Award,Best Floor Plan under 2100 sq.ft.and Best Exterior Design under 2100 sq.ft.,Boulder County Home Builders Association,Fall Tour of Homes, 1995 • The Villas at Northlake,Platinum,Best Exterior Design,Best Kitchen and Best Floor Plan,Boulder County Home Builders Association,Spring Tour of Homes, 1995 Meritorious Service of the Year Award,Home Builders Association of Metro Denver,Boulder Cnty.Chapter, 1995 • Award of Recognition,Boulder County Chapter of the Home Builders Association of Metro Denver, 1994-1995 SMPS Grand Award,HGA Marketing Brochure 1992 Coldwell Banker Commercial Real Estate,Minneapolis,MN,Top Five, 1986 City of Frisco,Colorado Historic Streetscape Design Competition,Winner, 1981 Mark S. Queripel,AIA Professional Expertise: Mark has more than 25 years of diverse professional experience as an architect, planner, interior designer, commercial real estate agent and developer. He is recognized for residential and resort design and has been featured on the national television series HGTV's"Dream Builders"for his work in sustainable design and green building. Widely published, Mark has been a guest speaker at several local and national conventions. His • experience encompasses all aspects of design and development including community consensus building,visioning, market analysis, site selection, real estate transactions, facilities analysis and valuations, design guidelines, • programming, master planning, space planning, interior design, architecture and construction management. Additionally, Mark has an extensive background in historic and period renovations, restorations and interior remodeling. • Partial Project List: • Residential • "The New Prairie Urbanist" 10 Custom Spec Homes,New Fredrick Village,Fredrick,CO • Livingston House Boat Remodel,Minneapolis,MN Caribou Springs Ranch Custom Spec Home and Barn/Office,Boulder County,CO • LaPlante Residence,Remodel,Denver,CO Coulson Lake Home,The Cliffs on Possum Kingdom,Graford,TX Lot 160 Custom Spec Home,Pine Brook Hills,Boulder County,CO . Barcewski Master Builders,Inc.,Custom Spec Home,New Frederick Village,Frederick,CO Cornerstone Homes,Inc.,Custom Spec Home"The Pasadena Today",Longmont,CO Cornerstone Homes,Inc.,Custom Spec Home"The Pasadena",Longmont,CO • Wildridge,Custom Spec Duplex Residence,Avon,CO SCS Building Group,LLC,Ski in/Ski out Custom Spec Home,Keystone,CO Bridger's Cache PUD,Ski in/Ski out Clubhouse/Spa and 38 varied housing units,Winter Park,CO The Cabin Club PUD,Camp House/Spa and 25 Luxury Cabins,Fox Acres CC,Red Feather Lakes,CO Dr.and Mrs.Schilke Residence,Scottsbluff Country Club,Scottsbluff,NE Cornerstone Homes,Inc.,Custom Spec Home`Breakwater",The Shores,Longmont,CO Cornerstone Homes,Inc.,Award winning Custom Spec Home"La Cortina",Ute Creek Golf Course,Longmont,CO • J.Y.Liu and Pei-Lan Wang Residence,Conceptual Design,Boulder,CO • Grubb Residence,Barn/Office and Stable,Niwot Meadow Farm,Niwot,CO Dr.and Mrs.Dewey Vacation Home,Fox Acres CC,Red Feather Lakes,CO • Dr.and Mrs.Gwin Vacation Home,Fox Acres CC,Red Feather Lakes,CO Sickenius Residence,The Shores,Longmont,CO • Owens Vacation Home,Fox Acres CC,Red Feather Lakes,CO • Morrow Vacation Home,Fox Acres CC,Red Feather Lakes,CO Morrow Custom Spec Home,Fox Acres CC,Red Feather Lakes,CO • Harbor Vacation Home,Fox Acres CC,Red Feather Lakes,CO Comer Vacation Home,Breckenridge,CO Cornerstone Homes Inc.,Cotton Ranch Custom Spec Home,Gypsum,CO Cornerstone Homes,Inc.,Craftsman style Custom Spec Home,Ute Creek Golf Course,Longmont,CO Cornerstone Homes,Inc.,Patio Homes,2 Models,Cotton Ranch,Gypsum,CO • Kurowski Development Co.,The Pinery Custom Spec Homes # 1 &2,Parker,CO Kurowski Development Co.,Lowry Custom Spec Homes # 1 and 2,Denver,CO The Tuscany at Cherry Creek,Condominiums,Denver,CO Brandon Park Condominiums,Aurora,CO • Gerstenberger Residence Remodel,Boulder County,CO Hassel Residence,Schematic Design,Larimer County,CO • Dapuzzo Residence,Schematic Design,Somerset Estates,Niwot,CO Gallery Homes,3 Production Spec Models,The Shores,Longmont,CO Cordillera Custom Spec,Lot 25,Settlers Park,Edwards,CO • Award Winning Villas at North Lake,2 Models,Longmont,CO Oliver Residence,Somerset Heights,Niwot,CO • Frontier Homes,Custom Spec Homes # 1,2,3,4&5,Quite Retreat,Niwot,CO Bellflower Custom Spec Home,Somerset Estates,Niwot,CO Dakota Ridge Custom Spec Home,Steamboat Springs,CO (unbuilt) • • I � • i • Mark S. Queripel,AIA • The Patio Homes at Lake Pawnee,6 Duplex units,Fox Acres CC,Red Feather Lakes,CO . Award Winning Custom Spec Home,Lot 2,The Shores,Longmont CO • Lot 4 Custom Spec Home,The Shores,Longmont CO Martin Residence,Longmont,CO • Papenfus Vacation Home,Fox Acres CC,Red Feather Lakes,CO McMonagle Residence,Lake Valley Estates,Niwot,CO Lots 25&26,Custom Spec Homes,Lake Valley Estates,Niwot,CO • Frontier Homes,Custom Spec Home,Lake Valley Estates,Niwot,CO Rugenstein Residence Remodel,Boulder County,CO Dr.and Mrs.Luttenegger Remodel,Fox Acres CC.,Red Feather Lakes,CO John Hepp Residence Renovation&Out Building,Longmont,CO • Brown Vacation Home,Fox Acres,CC.,Red Feather Lakes,CO • The Shores Apartments,240 Units,Longmont,CO(While at MOA Architects) Galnick Residence Renovation,Lake Valley Estates,Niwot,CO(While at MOA) • Nobel Park Townhomes,Boulder,CO(While at MOA) Smith Residence Renovation,Boulder,CO(While at Knudson Gloss Architects) Westlake Manors,Master Plan and Conceptual Design,Longmont,CO (While at KGA) Award Winning Villas at North Lake,7 Models,Longmont,CO(While at KGA) McKenley Park,5 Custom Homes,Wonderland Custom Homes,Louisville,CO (While at KGA) • Livingston Townhomes,Fridley,MN(While at KGA) • Lewiston Townhomes,Estes Park,CO(While at KGA) Gaffney Residence,The Rim at Lake Valley,Niwot,CO(While at KGA) Castlegate Apartments,Schematic Design,Castle Rock,CO(While at KGA) • Murphy Homes,2 Custom Spec Homes,Four Mile Ranch,Boulder,CO(While at KGA) Award Winning Maplewood/Maple Village 7 Spec Homes,Frederick,CO(While at KGA) The Grove Townhomes,Frederick,CO(While at KGA) Artistry Townhomes,Thornton,CO(While at KGA) Frederick Apartments,Frederick,CO(While at KGA) Falcon Homes,2 Spec Models,Castle Pines,CO(While at KGA) • Castleridge,4 Spec Homes,Reno,NV(While at KGA) Timber Lakes Townhomes,Eden Prairie,MN(While at KGA) Rosemary Woods Townhomes,Plymouth,MN(While at KGA) • Centennial Townhomes,Coon Rapids,MN(While at KGA) Country Crossing Townhomes,Elk River,MN(While at KGA) Qu6ripel Residence,Remodel and Interior Design,Whitefish Bay,WI • Historic Springdale Estate,Remodel and Expansion Design,New Hope,PA • Queripel Residence,Remodel and Interior Design,Historic Crocus Hill,St.Paul,MN Sopris Creek Ranch,Master Plan and Conceptual Design,Carbondale,CO • Queripel Residence,Remodel and Interior Design,Linden Hills,Minneapolis,MN Award Winning Rottlund Townhomes,Eden Prairie,MN(While at Heise Vanney Queripel) Aspen Heights Condos,Thornton,CO(unbuilt),(While at Downing Leach Associates) Ramsey Hill Apartments Renovation,St.Paul,MN(While at Nemith&Associates) Harrison Residence,Sunfish Lake,MN(While at Brooks Cavin Architects) • Stevens Residence,Hudson,WI(While at BCA) Camaccio Flat,Interior Design,London,England(While at MDI) Montegue Residence,Unbuilt,Sharja,United Arab Emmerates Dr.Breckenridge Residence,Renovation#1,Summit,NJ(While at Queripel Interiors) Dr.Breckenridge Residence,Renovation#2,Summit,NJ(While at QI) Mars-Vogel Vacation Home,Grafton,VT(While at Ql) Western Regional Solar Housing Project,Lander,WY(While at Ql) Dr.Breckenridge Residence,Renovation#1,Summit,NJ(While at QI) Christie Vacation Home,Interior Design,Jackson Hole,WY(While at QI) International Nickel Corporate Apartment,Interior Design,New York,NY (While at QI) • Charles Scribner Apartment Interior Design,New York,NY(While at QI) M.Johnson,United Nations Apartment,Interior Design,New York,NY(While at QI) Lilly New York Apartment,Interior Design,New York,NY(While at QI) 93 West Bridge St.,Whole House Remodel and Expansion,New Hope,PA(While at QI) • Lilly/Healy Country Home,Interior Design,Mountainville,NJ(While at QI) Lilly/Healy Apartment,Interior Design,New York,NY(While at QI) J.P.Miller Home,Interior Design,Stockton,NJ(While at Ql) li • i Mark S. Queripel,AIA • Carlos Fuentes Residence,Interior Interior Design,Princeton,NJ(While at QI) • Penske Residence,Red Gables Estate,Interior Design,Middleton,NJ(While at QI) Beard Weekend Home,Interior Design,South Hampton,NY(While at QI) K.B.Schley Country Home,Construction&Interiors,Far Hills,NJ(While at QI) Lorillard Country Estate,Interior Design,Far Hills,NJ(While at QI) Lorillard Apartment,Interior Design,New York,NY(While at QI) Charles H.Mellon Estate,Horse Barn,Bedminster,NJ(While at QI) MFlorence Residence,Interior Design,Princeton,NJ(While at QI) iCommercial Reliant Technologies,Offices and Warehouse Renovation,Longmont,CO American Family Insurance Office,Space Plan,Boulder,CO • Liquor Depot Site Development Design Consulting,Minneapolis,MN Cognoscente Office Space Plan,Minneapolis,MN . Candlewood Suites Hotel,Planning,Plymouth,MN Blackfox Warehouse,Renovation Design,Longmont,CO Staybridge Suites Hotel,Planning,Bloomington,MN • Red Roof Inn and Suites,Planning,Thornton,CO DataSource-Hagen,Program Plan,Space Plan,Edina,MN West Bloomington Warehouse Design,Bloomington,MN • Washington Ave.North Warehouse Renovation Design,Minneapolis,MN Portland Ave.South Warehouse Renovation Design,Minneapolis,MN • Award Winning Lake Valley Golf Clubhouse,Longmont,CO(While at MOA) • Twenty Mile Mini Storage Facility,Parker,CO(While at Knudson Gloss Architects) Award Winning Blackfox Group's HQ,Renovation and Interior Design,Longmont,CO(While at KGA) • Bozarth Chevrolet/GEO,Expansion,Aurora,CO(While at KGA) Birtcher Properties,ADA Surveys, I 1 States (While at Hammel Green and Abrahamson,Inc.) . Terracertre Office Tower,Multipal Space Planning/Renovation Projects,Denver,CO(While at HGA) • HGA Rocky Mountain Regional Office,Space Plan/Interior&Furniture Design,Denver,CO(While at HGA) US West Office Buildings,Design/Build Negotiations,Eden Prairie&Plymouth,MN(While at Prime Develop.) IDS Financial Services,Regional Office Relocation&Construction Cost Analysis,Missoula,MT(While at PD) FBS • Mortgage,Space Evaluation&Lease Negotiations,Saint Paul,MN(While at Coldwell Banker Commercial) CDC Technology Center,Leasing,Minneapolis,MN(While at CBC) International Centre,Leasing,Minneapolis,MN(While at CBC) Court International,Historic Willy's Jeep Factory,Leasing,Saint Paul,MN(While at CBC) . 900 Marquette Tower,Feasibility Study,Land Purchase Negotiations,Minneapolis,MN(While at CBC) H.B.Fuller Company,Site Selections,Florida,Michigan&Minnesota (While at CBC) Ecolab,Inc.,Facilities/analysis&Valuations,Colorado,Ohio,Minnesota (While at CBC) The Saint Paul Companies,Facility Analysis&Valuation,Austin,Denver&Saint Paul(While at CBC) Historic Junior Achievement Building,Valuation,Marketing and Sale,Saint Paul,MN(While at CBC) Historic Designers Guild Building,Renovation,Minneapolis,MN(While at Heise Vanney Queripel) • Power Brake,Service Garage Expansion,Saint Paul,MN(While at HVQ) Rodier II,Woman's Clothing Shop,The Galleria,Edina,MN(While at HVQ) • The Criterion Restaurant,Renovation and Interior Design,Bloomington,MN(While at HVQ) David's Gifts,Calhoun Square,Minneapolis,MN(While at HVQ) Jackson Grave's Fur Salon&Clothing Store,Interior Design,Town Square,Saint Paul,MN(While at HVQ) Prince Street Bar,Remodel Design,Historic Riverfront,Minneapolis,MN(While at HVQ) General Mills,Interior Remodeling,Minnetonka,MN(While at Hammel Green and Abrahamson,Inc.) Historic St.Paul Hotel,Renovation and Interior Design,Saint Paul,MN(While at HGA) • Kerker and Associates,Renovation and Interior Design,Bloomington,MN(While at HGA) Fredrickson and Byron,P.C.,Headquarters Space Plan and Interior Design,Minneapolis,MN(While at HGA) Drovers Bank,Expansion and Interior Design,Saint Paul,MN(While at HGA) First State Bank,Renovation and Interior Design,Wayzata,MN(While at HGA) Group Health,Inc.Headquarters,Interior Design,Minneapolis,MN(While at HGA) • Group Health,Inc.,Corporate Identity and Signage Design,Minneapolis,MN(While at HGA) • Piper Jaffray Tower,Interior Design,Minneapolis,MN(While at HGA) Merrill Lynch Office,Interior Design,Princeton,NJ(While at Queripel Interiors) Historic Carversville Hotel Restaurant,Interior Design,Carversville,PA(While at QI) New French Bar,Interiors,Minneapolis,MN(While at Architectural Framework) Rocky Rococo's Restaurant,Dinkytown,Minneapolis,MN(While at AF) I � Mark S.Queripel,AIA IDS Tower,Orion Room,Interior Design,Minneapolis,MN(While at Murillo Design International) • Ripley's Bar and Nightclub,Interior Design,Niagra Falls,Canada(While at MDI) • Odegard's East Bookstore and Coffee Bar,Victoria Crossings,Saint Paul,MN(While at Nemith&Associates) Historic Commodore Hotel,Renovation,Saint Paul,MN(While at Robert Deidrick&Associates) • Institutional ABELOVE Children Shelter,Home of The Good Sheperd,Utica,NY • VA Medical Center,Renovations and Expansion,Hot Springs,SD(While at HGA) Vail Valley Medical Center,Renovations and Interior Design,Vail,CO(While at HGA) . Becketwood Cooperative Housing,Interior Design,Minneapolis,MN(While at HGA) Mayo Clinic,Multiple Renovation and Interior Design Projects,Rochester,MN(While at HGA) Group Health,Inc.,Multiple Clinic Renovation Projects,Minneapolis,MN(While at HGA) • Children's Hospital,Renovations and Interior Design,Minneapolis,MN(While at HGA) St Paul Ramsey Medical Center,Patient Tower Renovation and Interior Design,Saint Paul,MN(While at HGA) St Louis Park Medical Center,Renovations and Interior Design,St Louis Park,MN(While at HGA) Front Range Community College,Program/Budget Reviews,Westminster and Fort Collins,CO(While at HGA) Metropolitan State College of Denver,Offices of Admin.,Finance and Alumni,Denver,CO(While at HGA) Adams State College,Campus Master Plan,Alamosa,CO(While at HGA) University of Colorado at Boulder,ITL Program Plan,Boulder,CO(While at HGA) Western State College,Student Union Renovation Program Plan,Gunnison,CO(While at HGA) Western State College in Colorado,Campus Master Plan,Gunnison,CO(While at HGA) Mesa State College,Campus Master Plan,Grand Junction,CO(While at HGA) Boulder Valley School District,Programming,Boulder,CO(While at HGA) Denver Public Schools,Planning Buyers and Zuni High Schools,Denver,CO(While at HGA) Historic City of Durango Design Guidelines,Durango,CO(While at Downing Leach Associates) Historic City of Frisco Streetscape Design Competition,Frisco,CO(While at DLA) Historic Fort Snelling Gun Shed Recreation,Saint Paul,MN(While at Brooks Cavin Architects) Historic Minnesota State Capitol Building,Exterior Restoration,Saint Paul,MN(While at BCA) �- ,��L--�------� �=� 0 a � �"� r L.�� • FROM : FAX N0. : 5076435115 May. 20 2063 08:06AM P1 i MDAMarketing & Development AssoCJafe$ Paawv . Asset rtiem�t OPerAll"1 S4port 8 Audh Ampft Sary w May 19, 2003 aarkeurir9 s • Ac`quISJN�t Ar�lysls Mr.John Livingston, Managing Partner Cognoscente 250 Second Avenue South Suite 240 • Minneapolis, Minnesota 55401 RE: Franchise Review& Recommende0ons Brooklyn Center, Minnesota Dear John, 1 was a pleasure speaking with you regarding the hotel project that you are working on in Brooklyn Center. As mentioned, the Earle Brown Center will allow a new hotel to penetrate both the Metro North market as well as the great Twin Cities market. However, you have to also consider that you project will have immediate competition within and around Brooklyn Center. The market demand will drive the product. This is one of the-first comerstones of hotel development. In the last 10 years we have had countless situations where the developer has a specific franchise selected before completely understanding the lodging demand. In turn, the holistic project is jeopardized by having the "cart in front of the horse". In the case of Brooklyn Center and the proposed hotel that would be built adjacent to the Earle Brown Center there are more market dynamics at hand than are being discussed. r . We have been working with owners/developers in Coon Rapids, Blaine, Brooklyn Park, Brooklyn Center, Shoreview and Minneapolis all in the last 6 months. There is new supply that will be changing the holistic lodging situation in the greater Metro North market area. This equates to being our firm advising you not to be forced into a comer regarding a speck brand at this time. . We have reviewed the lodging performance of 4 different groups of hotels. The four groups are Metro North Full Service properties, Hotels with 200-300 Rooms and Meeting Space,All Metro !North Hotels and Upscale Hotels throughout the Twin Cities. This review shows us the monthly performance going back 6 years for each group, the Performance changes and in each case, we have been able to forecast reasonable and 317 Fourth Street South • Suite 198 • La Grosse • Wisconsin • N01 Office:507-643.6982 • Fax:507-543-5115 • E-mail:ProfitMore0aoixorrm • I � • FROM FAX N0. : 5076435115 May. 20 2903 08:06AM P2 I � realistic trends within each group as well. In addition we have interviewed' • approximately 50 meeting planners for this assignment. We have also reviewed the • lodging/meeting business treads from ALL of the Full Service Motels operating within the Metro North Market Area. We have also reviewed the franchise comparisons of 114 different brands,the fees, reservation contributions, etc. • There seems to be a perception that an Upper Upscale brand like Redisson would be more suited for your development than an Upscale Holiday Inn & Suites. While these • two brands are the only two being discussed, there is a proliferation of brands that • would also fit the same price tier positioning— no of which are being discussed. Which brand is best? That question will be full answered, upon the completion of the +• Market Analysis& Economic Feasibility Study. At this time, the most.prudent thing that we can advise you is to stick to the facts. • Upper Upscale Hotel Trends—Radisson Hotels • * The trends are showing that the Upper Upscale hotels are performing well off their highest point which was experienced in 2001. • ■ Average occupancy is only 66.0%.today as opposed to 72.1%in 2001. . ■ Average Room rates have decreased to $139.08 from the $1:1.53 achieved in 2001. ■ Weekday occupancy has decreased by--9.4%. • ■ Weekend occupancy has decreased by—6.8%. • The supply for Upper Upscale will be impacted with new rooms that are going to be competing for the same customers that the property in Brooklyn Center would • be going after, if positioned as Upper Upscale. ■ The lodging demand(rooms occupied)has remained flat. • ■ The cost per room can exceed$175,000 per room. • Upscale Hotel Trends—Holiday Inn & Suites • Growth in this segment has been quite respectable throughout the TWO Cities. • Average occupancy has increased by 4.5%. r Average room rates have increased by 6.8%. • ■ Weekday occupancy has increased by 7.3%. • Weekend occupancy has increased by 5.9%. ■ The lodging demand has been increasing every year since 1999. • ■ The lodging supply has increased at slightly under half the demand growths • pace. ■ The cost per mom might exceed$104,000 per room. ■ The Brooklyn Center market WILL have a new Holiday Inn & Suites as the day it • opens there will be approximately 150 rooms per day, filled by the reservation • system. This marlret is already active and will immediately shift to a replacement of the existing facility. 2 FROM : FAX N0. : 5075435115 May. 20 2003 08:07AM P3 � i i • li What does this mean? You have two choices. You can develop an Upper Upscale brand,which Radisson is ONLY one of and it will cost more to build and your exposure will increase accordingly. Radisson is a great franchise, lout is it the exact match for the opportunities that we have identified? Not necessarily? You can develop an upscale brand,which Holiday Inn & Suites is positioned within. This will reduce the capital outlay while providing higher returns as the market is already these. These passion and there's logic. The facts won't change regardless of the desires of parties outside of the development group. Proceeding with a project that is positioned incorrectly would NOT be something we could recommend to you. Lastly, knowing that this is somewhat premature, we do not want to give you the impression that our firm is an advocate of one franchise over the other. We are not. If you are forced into a posture that is less than desirable., we will reflect that posture in your Future Forecast of revenues and Expenses. Sincerely, Marks ng vQlopment Associates -KA gain Nederhiser President � 3 i � li • • • • • Brooklyn Center Crowne Plaza Hotel &Restaurant Estimated Development Costs 5/27/2003 Per Room Costs(Total) Number of Rooms 250 • Construction per Room $55,783 Furniture fixtures and equipment $5,436 . Technical Systems per Room $1,728 Signage per Roam $310 • Land&Soft Costs $17,525 • Development Expenses Legal $125,000 Franchise $125,000 Special Marketing Fee $2,500 Loan Origination Construction $237,214 Loan Origination Permanent $320,000 • Construction Interest $627,559 • Architect $375,000 Structural Engineer $62,500 Civil Engineer $62,000 Estimated Tax increment Permits,Fees $25,000 Base Value $ 1,600,000 • Building Permit $56,247 Incremental value $ 12,345,750 • MC/ES SAC $163,200 Tax rate $ 0.045 Insurance $200,000 Payable 2006 $ 555,559 Land $2,000,000 Payable 2007 $ 572,226 Subtotal $4,381,220 Payable 2008 $ 589,392 • Total $ 1,717,177 • Construction Cost Hotel $13,945,750 Present Value $ 1,450,000 Land write down for Hotel $ 300,000 Furniture fixtures and equipment $1,359,000 Available for Aquatic Center $ 1,150,000 . Technical Systems $432,000 Signage $77,500 Subtotal $15,814,250 Development Fee $2,221,502 Construction Management $706,841 • Contingency $650,000 01 Development Cost Estimate $23,773,813 • • • • • • • • • • • • • • • i Brooklyn Center Crowne Plaza Hotel & Restaurant Use of Funds 05/27/03 Land $ 2,000,000 Construction Cost • Hotel $ 15,814,250 TOTAL CONSTRUCTION COST $ 15,814,250 Professional Fees Architect $ 375,000 Engineering $ 124,500 Attorneys $ 125,000 • Construction Management $ 706,841 Subtotal Professional Fees $ 1,331,341 Soft Costs Building Permit SAC/WAC $ 244,447 Insurance $ 200,000 Franchise $ 127,500 Other $ 25,000 • Subtotal Soft Costs $ 596,947 Construction Finance Construction Interest $ 627,559 • Loan Fees $ 557,214 Subtotal Construction Finance $ 1,184,773 Developer Fee $ 2,221,502 Working Capital Reserves $ 650,000 TOTAL $ 23,798,813 i • • • i Brooklyn Center Crowne Plaza Hotel & Restaurant ,. Source Of Funds 05/27/03 Mortgage $ 16,117,456 Equity Contributions TIF Proceeds $ 300,000 Deferred Purchase $ 2,000,000 Developers Fee Hotel $ 2,221,502 Construction Management Aquatic Center $ 460,350 Construction Management Hotel $ 706,841 • Cash Investment $ 1,792,663 Insurance Premium $ 200,000 Total Sources $ 23,798,812 $ 23,798,813 Brooklyn Center Crowne Plaza Hotel and Restaurant Estimated Operating Statement 5/27/2003 Interest Rate Amortization Loan to Value 5.70% 22 68% Description Year 1 Year 2 Year 3 Year 4 Year 5 Number of Rooms 250 250 250 250 250 Daily Rate $105.00 $108.15 $111.39 $114.74 $118.18 Occupancy Rate 62.0% 65.0% 67.0% 70.0% 70.0% Average Daily Rate $65.10 $70.30 $74.63 $80.32 $82.72 Room Revenue $5,940,375 $6,414,647 $6,810,381 $7,328,783 $7,548,647 Restaurant Rent NNN $125,000 $128,750 $132,613 $136,591 $140,689 Gross Revenue $6,065,375 $6,543,397 $6,942,994 $7,465,374 $7,689,336 Variable Expenses Labor $891,056 $962,197 $1,021,557 $1,099,318 $1,132,297 Material $475,230 $513,172 $544,830 $586,303 $603,892 Total $1,366,286 $1,475,369 $1,566,388 $1,685,620 $1,736,189 Gross Profit $4,699,089 $5,068,028 $5,376,606 $5,779,754 $5,953,147 Operating Expenses Administrative Expense $475,230 $513,172 $544,830 $586,303 $603,892 Marketing 297,019 320,732 340,519 366,439 377,432 Maintenance $356,423 $384,879 $408,623 $439,727 $452,919 Management $267,317 $288,659 $306,467 $329,795 $339,689 Energy $237,615 $256,586 $272,415 $293,151 $301,946 Franchise $297,019 $320,732 $340,519 $366,439 $377,432 Other Fees $47,300 $48,719 $50,181 $51,686 $53,237 Total $1,977,922 $2,133,479 $2,263,554 $2,433,541 $2,506,547 Fixed Expenses Hotel Taxes $717,559 $739,086 $761,258 $784,096 $807,619 Hotel Insurance $75,000 $77,250 $79,568 $81,955 $84,413 Replacement Reserve $136,471 $147,226 $243,005 $298,615 $346,020 Asset Management 118,808 128,293 136,208 146,576 150,973 Total $1,047,837 $1,091,855 $1,220,038 $1,311,241 $1,389,025 Net Operating Income $1,673,330 $1,842,694 $1,893,014 $2,034,973 $2,057,575 Debt Amount(Start of Year) $16,117,456 $16,085,116 $16,050,132 $16,012,216 $15,971,040 Interest Rate 5.70% 5.70% 5.70% 5.70% 5.70% Loan Amortization 22 21 20 19 18 Annual Debt Service $1,303,777 $1,303,777 $1,303,777 $1,303,777 $1,303,777 Net Income $369,552 $538,916 $589,236 $731,195 $753,798 , • • Brooklyn Center Aquatic Center Estimated Development Costs Per Room Costs(Total) • Total Area 15000 Square Feet ` Construction/Square feet $141 Furniture fixtures and equipment pe $3 Technical Systems per SF $1 i Signage per SF $17 Soft Costs $59 Total $251 • Development Expenses Legal $25,000 • Bond Costs $265,000 Architect/Aqua Consultant $340,200 Structural Engineer $12,150 • Civil Engineer $28,000 Permits, Fees& Land $20,000 Building Permit $0 Waived MC/ES SAC $0 Waived • Construction Interest $170,000 Builders Risk Insurance $20,000 Land $0 Paid with hotel i Subtotal $880,350 • Construction Cost Aquatic Center $2,115,000 Construction Management $460,350 Furniture fixtures and equipment $45,000 • Technical Systems $15,000 • Signage $255,000 Total $2,890,350 • Total Construction Estimate $3,770,700 Construction Reserve $518,790 Total Estimate $4,289,490 • • • • I � • • • • • i i Brooklyn Center Aquatic Center Uses and Sources 05/200/03 • Uses Land $ Construction Cost Aquatic park $ 2,890,350 TOTAL CONSTRUCTION COST $ 2,890,350 Professional Fees Architect/Engineering $ 380,350 Attorneys $ 25,000 TOTAL PROFESSIONAL FEES $ 405,350 Soft Costs Permits $ 20,000 Construction Insurance $ 20,000 TOTAL SOFT COSTS $ 40,000 Construction Finance Construction Interest $ 170,000 Bond Fees $ 265,000 TOTAL CONSTRUCTION FINANCE $ 435,000 Working Capital Reserves $ 518,790 TOTAL RESERVES $ 518,790 Total Estimated Uses $ 4,289,490 i � �I � • • Brooklyn Center Aquatic Center Source Of Funds 05/20/03 • Tax Exempt Gross Revenue Bonds • 6,5% Q 20 yrs $ 2,639,490 Developer Contributions • Cash $ 500,000 EDA Proceeds $ 1,150,000 Total Estimated Sources $ 4,289,490 $ 4,289,490 • • i • • • • M • • • • • • • • • • • Brooklyn Center Aquatic Center Estimated Operating Statement 5/20/2003 Interest Rate Gross Rev.Bond Amortization Loan to Value 6.50% 20 70% 2005 Description Year 1 Year 2 Year 3 Year 4 Year 5 Daily Use Visits 450 475 500 525 550 Daily Pass Rate $8.00 $8.24 $8.49 $8.74 $9.00 Use Rate 85.0% 85.0% 85.0% 85.0% 85.0% Average Daily Rate $6.80 $7.00 $7.21 $7.43 $7.65 Pass Revenue $1,116,900 $1,214,319 $1,316,577 $1,423,878 $1,536,432 Vending and other Revenues $10,000 $10,300 $10,609 $10,927 $11,255 Gross Revenue $1,126,900 $1,224,619 $1,327,186 $1,434,805 $1,547,687 Pools Labor&Maintenance Labor $111,690 $121,432 $131,658 $142,388 $153,643 Material $55,845 $36,430 $39,497 $42,716 $46,093 Total $167,535 $157,861 $171,155 $185,104 $199,736 Gross Profit $959,365 $1,066,757 $1,156,031 $1,249,701 $1,347,951 Operating Expenses Administrative Expense $33,507 $36,430 $39,497 $42,716 $46,093 Marketing 11,169 12,143 13,166 14,239 15,364 Building Maintenance $67,014 $72,859 $78,995 $85,433 $92,186 Management $50,261 $54,644 $59,246 $64,075 $69,139 Energy $225,000 $231,750 $238,703 $245,864 $253,239 Safety $111,690 $121,432 $131,658 $142,388 $153,643 Operating Reserve $58,500 $61,750 $65,000 $68,250 $71,500 Total $557,141 $591,008 $626,264 $662,964 $701,165 Fixed Expenses Taxes(Cl y/EDA owned) $0 $0 $0 $0 $0 Insurance $90,000 $92,700 $95,481 $98,345 $101,296 Replacement Reserve $25,355 $27,554 $29,862 $32,283 $34,823 City/EDA Management Fee 55,845 60,716 65,829 71,194 76,822 Total $171,200 $180,970 $191,172 $201,822 $212,940 Est.Net Operating Income $231,024 $294,779 $338,596 $384,915 $433,845 Debt Amount(Start of Year) $2,639,490 $2,633,778 $2,627,540 $2,620,712 $2,613,218 Interest Rate 6.5% 6.5% 6.5% 6.5% 6.5% Loan Amortization 20 19 18 17 16 Annual Debt Service $239,551 $239,551 $239,551 $239,551 $239,551 Net Income/City EDA -$8,526 $55,229 $99,045 $145,364 $194,295 • •• •i • • • • 00 •. • • • ! • • • • 0 • •• • • 0,t0 •• • •?• • • • • • • • • • • •