HomeMy WebLinkAbout2013 05-13 EDAPEDA MEETING
City of Brooklyn Center
May 13, 2013 AGENDA
Call to Order
—The EDA requests that attendees turn off cell phones and pagers during the meeting. A
copy of the full City Council packet, including EDA (Economic Development Authority),
is available to the public. The packet ring binder is located at the front of the Council
Chambers by the Secretary.
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
1. February 25, 2013 — Regular Session
4.Commission Consideration Items
a. Letter of Intent by Minnesota Hospitality Inc. for the Purchase and Hotel
Development of Lot 2, Block 1, Brooklyn Farm 2 nd Addition (Phase II Embassy
PUD)
1. Resolution Accepting Minnesota Hospitality Inc.'s Letter of Intent for
Development of Lot 2, Block 1, Brooklyn Farm 2 n1 Addition and Authorizing
the Preparation of a Development Agreement (Phase II Embassy PUD)
Requested Commission Action:
—Motion to adopt resolution.
5.Adjournment
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
FEBRUARY 25, 2013
CITY HALL — COUNCIL CHAMBERS
1.CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to
order by President Tim Willson at 7:19 p.m.
2.ROLL CALL
President Tim Willson and Commissioners Carol Kleven, Kris Lawrence-Anderson, Lin
Myszkowski, and Dan Ryan. Also present were Executive Director Curt Boganey, Assistant City
Manager/Director of Building and Community Standards Vickie Schleuning, City Attorney
Charlie LeFevere, and Carla Wirth, TimeSaver Off Site Secretarial, Inc.
3.APPROVAL OF AGENDA AND CONSENT AGENDA
Commissioner Ryan moved and Commissioner Myszkowski seconded approval of the Agenda
and Consent Agenda, and the following item was approved:
3a. APPROVAL OF MINUTES
1. January 14, 2013 — Regular Session
Motion passed unanimously.
4.COMMISSION CONSIDERATION ITEMS
4a. RESOLUTION NO. 2013-02 OPTING NOT TO WAIVE TORT LIABILITY FOR
2013
Commissioner Ryan moved and Commissioner Lawrence-Anderson seconded adoption of
RESOLUTION NO. 2013-02 Opting Not to Waive Tort Liability for 2013.
Motion passed unanimously.
5. ADJOURNMENT
Commissioner Ryan moved and Commissioner Kleven seconded adjournment of the Economic
Development Authority meeting at 7:20 p.m.
Motion passed unanimously.
02/25/12 -1- DRAFT
EDA Agenda Item No. 4a
EDA ITEM MEMO NDUM
DATE: May 13, 2013
TO: Curt Boganey, City Manager
!O\FROM: Gary Eitel, Director of Business & Development
SUBJECT: Letter of Intent by Minnesota Hospitality Inc. for the Purchase and Hotel
Development of Lot 2, Block 1, Brooklyn Faun 2 nd Addition (Phase II Embassy
PUD)
Recommendation:
It is recommended that the Economic Development Authority consider approval/adoption of the
Resolution Authorizing the Executive Director to execute the Letter of Intent with Minnesota
Hospitality Inc. and to proceed with the negotiations and preparation of the appropriate
development agreement and actions necessary for the conveyance and development of Lot 2,
Block 1, Brooklyn Farm 2" Addition. (Phase II Embassy PUD)
Background:
On June 27, 2005, the City Council approved the rezoning of a 6.2 acre parcel from CIA
PUD/C1A for the development of a 250 room hotel containing a 100 seat restaurant and a 32,000
sq. ft. water park facility.
The development plans were revised by the City Council on May 14, 2007 to provide for the
phased development of two hotels:
Phase I was an eight story, 175 room Embassy Suites Hotel on a 4.02 acre lot that
included a 100 seat restaurant and a physical connection to the Earle Brown Heritage
Center.
Phase II conceptually illustrated the location of a second hotel and the agreement
identified the following Hotel Flags: Holiday Inn Express, Marriot Courtyard, Hilton
Garden Inn, Indigo, Cambria, Staybridge, Homewood, Hampton, Comfort, or another
equivalent hotel flag acceptable to the Authority with no less than 75 rooms, which
hotel need not be a full service hotel.
Attached for your reference is a copy of conceptual development plans and City Council
Resolution No. 2007-70, which approved the amendment to the PUD Development Plans.
In 2006, the City Council and EDA conducted the necessary public hearings to remove this
property from Tax Increment District No. 2, establish a Tax Abatement Plan, and execution of a
Development Agreement which included the authorization for the phased conveyance of the
property to Brooklyn Hotel Partners.
Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life
for all people and preserves the public trust
EDA ITEM MEMO NDUM
In 2007, the City Council approved the final plat of Brooklyn Farm 2 nd Addition which created a
4.02 acre lot for the Embassy Hotel project and a 2.18 acre lot for the Phase II site. The eastern
1/3 of the Phase II site included the existing pond, a portion of a cement pond, and the majority
of the trail which connected to the Earle Brown Farm site.
Attached is an aerial photograph of the Phase II site which illustrates the location of an access
easement for the use of the main drive which enters the Embassy Hotel and the buildable area of
approximately 1.5 acres.
In 2009, the developer completed the Embassy Suite Hotel and informed the EDA that he was
not in a position to complete the link to the Earle Brown Heritage Center.
After months of negotiations on the developer's default in the terms of the Development
Agreement by not completing the required Minimum Improvements, the EDA adopted
Resolution No. 2010-14, an amendment to the Development Agreement which amended the
rights and obligations of the Authority, the City, and Developer relating to the developer's
forfeiture of any rights to the Phase II development; confirmed the D-Bam Lease Agreement and
easements for the EDA's construction of the link; approved adjustments to the payment of tax
abatements for the Phase I development, including the right of set off to secure the D-Barn Lease
and Link Maintenance Agreement; and conveyed the development rights for Phase II to the EDA
and the obligation to construct the link to the Earle Brown Heritage Center.
Letter of Intent for Sales and Development of Phase II Embassy PUD Site:
The attached Letter of Intent by Minnesota Hospitality Inc. provides for the purchase of the
Phase II site for the development of a 4 story, 81 room Candlewood Extended Stay Hotel.
The purchase amount is $500,000 with a closing date scheduled to occur in 2013 after the
developer has been issued approval from the InterContinental Hotels Group; received the
necessary approvals from the EDA and City Council and a building permit; and has provided the
City with a copy of its Financing Commitment.
The terms also include the following which will be incorporated into the Development
Agreement:
a.The provision of a 10 year tax abatement program similar in structure to the prior tax
abatement agreement for the Phase II development as approved in 2006.
b.The City and EDA approvals will include the necessary public hearings and actions
necessary to amend the PUD Plans; a Re-Plat or Land Division to separate the portion
of the lot occupied by the pond & trail; establish a Tax Abatement Plan; approval of
a Business Subsidy Agreement; and resolution with economic findings for the
conveyance of EDA owned land.
c. Architectural development standards identical to the Shingle Creek Crossing PUD,
• At least 50% of all four sides of wall surfaces of the hotel will be constructed
of Class I materials and the remainder of Class II materials.
Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life
for all people and preserves the public trust
EDA ITEM MEMO A NDUM
•Class I materials include: brick or acceptable brick-type material, natural looking
stone, textured cement stucco, copper, architectural panels or masonry units with
enhanced detailing such as patterns, textures color, dimension, banding, brick
inlay or glass.
•Class II materials include: EFIS, pre-finished metal, concrete block, fiber-
reinforced cement board siding, canvas or vinyl awnings.
Budget Issues:
The sales of the Phase II is sufficient to repay the EDA's advancement of funds used to complete
the construction of the link connecting the Embassy Suites Hotel to the Earle Brown Heritage
Center.
The tax abatement of the local share of property taxes is a factor of the assessed valuation of the
completed project, the City's tax rate, and the percent of contribution required for the fiscal
disparity fund and is projected to be in the range of approximately $30,000 - $40,000 annually.
As an example, a property with an assessed valuation of $3,000,000 would have a tax capacity of
approximately $60,000 of which the application of the 2012 fiscal disparity contribution rate of
35.1835% would leave 64.8165% for local taxation or a tax capacity of $38,890 times the local
tax rate (2013) 0.72.202 equals approximately $28,079 that would be available for a tax
abatement.
Council Goals:
1.We will proceed aggressively with implementation of City's redevelopment plans
2.We will improve the city's image
Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life
for all people and preserves the public trust
Commissioner introduced the following resolution and
moved its adoption:
EDA RESOLUTION NO.
RESOLUTION ACCEPTING MINNESOTA HOSPITALITY INC'S LETTER
OF INTENT FOR DEVELOPMENT OF LOT 2, BLOCK 1, BROOKLYN
FARM 2ND ADDITION AND AUTHORIZING THE PREPARATION OF A
DEVELOPMENT AGREEMENT (PHASE II EMBASSY PUD SITE)
WHEREAS, on June 27, 2005, the City Council adopted Resolution No. 2005-97,
which approved the rezoning of a 6.2 acre parcel from CIA to PUD/C1A for the development of a
250 room hotel containing a 100 seat restaurant and a 32,000 sq. ft. water park facility; and
WHEREAS, on October 23, 2006, the City Council adopted Resolution No. 2006-
121, which approved a Property Tax Abatement Plan and Development Agreement with Brooklyn
Hotel Partners in connection with two full service hotels and related facilities; and
WHEREAS, on October 23, 2006, the EDA adopted Resolution 2006-12, which
deleted this 6.2 acre parcel from Tax Increment Financing District No. 2 and Approved and
Authorized the Execution of a Development Agreement; and
WHEREAS, on May 14, 2007, the City Council adopted Resolution 2007-70, which
approved an amendment to the PUD/C1A Development Plans for the 1 st phase of a two building
hotel complex, consisting of an eight story, 175 room Embassy Suites Hotel and 100 seat restaurant
with a physical connection to the Earle Brown Heritage Center; and
WHEREAS, on July 9, 2007, the City Council adopted Resolution No. 2007-100,
approving the Final Plat of Brooklyn Farm 2n d Addition, which created a 4.02 acre lot for the 1 st
phase development of an Embassy Suites Hotel and a 2.18 acre lot for the 2 nd phased as conceptually
illustrated on the approved PUD Development Plans; and
WHEREAS, on July 23, 2007, October 8, 2007, and December 27, 2007, the EDA
adopted Resolution 2007-12, Resolution No. 2007- 19, and Resolution No. 2007-23 which approved
minor amendments to the Development Agreement Between the Economic Development Authority
and Brooklyn Hotel Partners; and
WHEREAS, the Brooklyn Hotel Partners completed the 175 room hotel and 100 seat
restaurant in 2009, but were unable to complete the pedestrian link to the Earle Brown Heritage
Center and were in default to the terms of Development Agreement; and
WHEREAS, on June 28, 2010, the EDA adopted Resolution No. 2010-14, the Fourth
Amendment to the Development Agreement and Certain Related Agreement which modified and
amended the following:
1.The rights and obligations of the Authority, the City, and the Developers as it related
to the construction of the connection and development of the Phase II site,
2.Amended the Parking, Access and Pedestrian Link Agreement relating to the location
of the link to be constructed by the EDA,
3. Revised the Lease Agreements for the D-Bam; and
WHEREAS, on April 11, 2011 the EDA adopted Resolution No. 2011-08, which
approved a Spending Plan authorized under the 2010 Minnesota Jobs Act, which enabled $360,000
from Tax Increment District No. 2, to fund the construction of the portion of the link relating to the
D-Barn Lease and the EDA advanced the funds projected from the future sales of the Phase II site to
complete the pedestrian link to the Earle Brown Heritage Center; and
WHEREAS, on October 10, 2011, the EDA adopted Resolution No. 2011-22, which
approved the termination of the Cement Pond/Fountain Easement, accepted a new trail easement
from Wings Financial, and conceptualized the future trail, lighting, and placement of a fountain
within the pond; and
WHEREAS, Minnesota Hospitality Inc. has expressed an interest in the development
of the Phase II site for the construction of a 4 story, 81 room extended stay hotel consistent with the
conceptual development plans of the approved PUD plans and with similar provisions for a Tax
Abatement Plan as approved for the initial Phase II development, and
Whereas, Minnesota Hospitality Inc. has provided a letter of intent for the purchase of
Lot 2, Block 1, Brooklyn Farm Second Addition, excludes the area of the pond and trail, for the
amount of $500,000 with terms and conditions to be formalized in a development agreement.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority
in and for the City of Brooklyn Center that the Executive Director is hereby authorized to execute the
Letter of Intent with Minnesota Hospitality Inc, and to proceed with the negotiations and preparation
of the appropriate development agreement and actions necessary for the conveyance and
development of Lot 2, Block 1 Brooklyn Farms 2 nd Addition. (Phase II Embassy PUD Site)
May 13, 2013
Date President
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
and upon vote being taken thereon, the following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
Member Kay Lasman introduced the following resolution and
moved its adoption:
RESOLUTION NO. 2007°70
RESOLUTION REGARDING THE DISPOSITION OF PLANNING
COMMISSION APPLICATION NO. 2007-008 SUBMITTED BY SETH OLIVER
(BROOKLYN HOTEL PARTNERS, LLC)
WHEREAS, City Council Resolution No. 2005-97 adopted on June 27, 2005
approved a rezoning from CIA (Service-Office, no height limit) to PUD/C1A (Planned Unit
Development/Service- Office, no height limit) of a 6.2 acre site located on the east side of the west
leg of Earle Brown Drive (to be addressed as 6300 Earle Brown Drive); and
WHEREAS, that proposal comprehended the rezoning of the above mentioned
property and development plan approval for a 250 room hotel containing a 100 seat restaurant and a
32,000 sq. ft. water park facility on the above mentioned site; and
WHEREAS, that specific development plan is no longer being considered for
implementation; and;
WHEREAS, Planning Commission Application No. 2007-008 consisting of a PUD
amendment to allow construction of the first phase of a two building hotel complex consisting of an
eight story, 175 room Embassy Suites hotel and 100 seat restaurant with a physical connection to
the Earle Brown Heritage Center has been proposed by Seth Oliver (Brooklyn Hotel Partners,
LLC); and
WHEREAS, the Planning Commission held a duly called public hearing on April
26, 2007 when a staff report and public testimony regarding the Planned Unit Development
amendment were received; and
WHEREAS, the Planning Commission recommended approval of Application No.
2007-008 by adopting Planning Commission Resolution No. 2007-02 on April 26, 2007; and
WHEREAS, the City Council considered Application No. 2007-008 at its May 14,
2007 meeting; and
WHEREAS, the City Council considered this Planned Unit Development
amendment request in light of all testimony received, the Guidelines for Evaluating Rezonings
contained in Section 35-208 of the City's Zoning Ordinance, the provisions of the Planned Unit
Development Ordinance contained in Section 35-355 of the City's Zoning Ordinance, the City's
Comprehensive Plan, City Council Resolution No. 2005-97 and the Planning Commission's
recommendations.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Brooklyn Center that Application No. 2007-008 submitted by Seth Oliver (Brooklyn Hotel
Partners, LLC) be approved in light of the following considerations:
RESOLUTION NO. 2007-70
1.The Planned Unit Development is compatible with the standards, purposes and
intent of the Planned Unit Development section of the City's Zoning Ordinance.
2.The Planned Unit Development proposal will allow for the utilization of the land in
question in a manner which is compatible with, complimentary to and of
comparable intensity to adjacent land uses as well as those permitted on surrounding
land.
3.The utilization of the property as proposed under the Planned Unit Development
Rezoning is considered a reasonable use of the property and will conform with the
ordinance standards except for allowing a green strip along the Earl Brown Drive
right of way that is less than 15 ft. This modification from the ClA ordinance
standard is justified on the basis of the development plan being an appropriate plan
for this area and that it is off set or mitigated by various factors contained in the
approved site plan.
4.The Planned Unit Development proposal is considered consistent with the
recommendations of the City's Comprehensive Plan for this area of the city.
5.The Planned Unit Development proposal appears to be a good long range use of the
existing land and this development can be considered an asset to the community.
6.In light of the above considerations, it is believed that the Guidelines for Evaluating
Rezonings as contained in Section 35-208 of the City's Zoning Ordinance are met
and the proposal is, therefore, in the best interest of the community.
BE IT FURTHER RESOLVED by the City Council of the City of Brooklyn Center
that Application No. 2007-008 be approved subject to the following conditions and considerations.
1.The building plans are subject to review and approval by the Building Official with
respect to applicable codes prior to the issuance of permits.
2.Grading, drainage, utility and erosion control plans are subject to review and
approval by the City Engineer prior to the issuance of permits.
3.A site performance agreement and supporting financial guarantee in an amount to
be determined based on cost estimates shall be submitted prior to the issuance of
building permits to assure completion of all required site improvements.
4.B-612 curb and gutter shall be provided around all parking and driving areas.
5. Any outside trash disposal facilities and rooftop or on ground mechanical equipment
shall be appropriately screened from view.
RESOLUTION NO. 2007°70
6.The building shall be equipped with an automatic fire extinguishing system to meet
NFPA standards andshall be connected to a central monitoring device in
accordance with Chapter 5 of the City Ordinances.
7.Underground irrigation shall be installed in all landscaped areas to facilitate site
maintenance
8.Plan approval is exclusive of all signery which is subject to Chapter 34 of the City
Ordinances.
9.The applicant shall submit an as built survey of the property, improvements and
utility service lines prior to the release of the performance guarantee.
10.All work performed and materials used for construction of utilities shall conform to
the City of Brooklyn Center Standard Specifications and Details.
11.The applicant shall provide appropriate erosion control during construction as
approved by the City Engineering Department and obtain an NPDES construction
site erosion control permit from the Minnesota Pollution Control Agency prior to
disturbing the site.
12.The applicant's storm water management plan shall be approved by the Shingle
Creek Watershed Management Commission prior to the issuance of building
permits for this project.
13.The applicant shall enter into a PUD agreement with the City of Brooklyn Center to
be reviewed and approved by the City Attorney prior to the issuance of building
permits. Said agreement shall be filed with the title to the property and shall
acknowledge the specific modifications to the CIA underlying zoning district as
well as other conditions of approval. The agreement shall further assure compliance
with the development plans submitted with this application.
14. The development plans shall be modified in the following manner.
a.To provide a lighting plan consistent with the requirements of Section
35-712 of the City Ordinances regarding lighting.
b.To provide a parking plan consistent with the parking requirements for a
hotel and restaurant complex or an appropriate off site parking
arrangement that will accommodate the two phase proposal.
c. To provide the elimination of all parking lot encroachments into the
public right of way.
May 14, 2007
Date
-guls-bcATTEST:
City Clerk
'
Mayor
RESOLUTION NO. 2007-70
15.Approval of the 75 room hotel indicated as future development on the site is
subject to the Planned Unit Development amendment process prior to the
issuance of building permits for that project.
16.The property owner shall enter into an agreement for maintenance and
inspection of utility and storm drainage systems, as approved by the City
Engineer, to insure continued maintenance of on site utilities and storm water
facilities.
17. The property owner shall dedicate a drainage and utility easement over all
portions of the storm water detention pond within the hotel property as approved
by the City Engineer.
The motion for the adoption of the foregoing resolution was duly seconded by member
Mark Yelich
and upon vote being taken thereon, the following voted in favor thereof:Tim Willson, Kay Lasman , Dan Ryan, and Mark Yelich;
and the following voted against the same: Mary 0' Connor;
whereupon said resolution was declared duly passed and adopted.
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LETTER OF INTENT FOR DEVELOPMENT
* , i
This Letter of Intent is made as of the day of i 775—) / , 2013 by and between
Minnesota Hospitality, Inc., a North Dakota corporation ( Buyer"), and the Brooklyn Center
Economic Development Authority, a Minnesota public corporation ("Seller").
The purpose of this Letter of Intent is to set forth certain nonbinding understandings and certain
binding agreements for the preparation of a Development Agreement and for the purchase and
development of vacant land and easements and accesses thereto from Seller by Buyer.
The following numbered paragraphs are a general description of the present intentions of the
Buyer and Seller, but do not constitute a complete statement of, or a legally binding and
enforceable agreement on the Buyer or Seller with respect to the matter described herein.
1. Seller. Economic Development Authority of Brooklyn Center, Minnesota ("EDA" or
"Seller"), 6301 Shingle Creek Pkwy, Brooklyn Center, MN 55430.
Buyer. Minnesota Hospitality, Inc. ("Buyer") a North Dakota Corporation whose President
is Mr. Sanjay C. Patel of Fargo, ND.
3.Assignment. Buyer may assign this Letter of Intent to an affiliate entity providing it is
owned in whole or in part by Mr. Sanjay C. Patel.
4.Scope of Sale. Buyer intends to purchase the Land further identified as:
Lot 2, Block 1, Brooklyn Farm 2 nd Addition
City of Brooklyn Center, County of Hennepin, State of Minnesota excluding the
area around the existing pond and trail ("Land")
5. Price and Terms. Buyer and Seller envision that the principal terms of the proposed transaction
would be substantially as follows:
a.Assets to be Acquired. Buyer will purchase the Land only with all easements and
accesses thereto. Seller will warrant that Land being sold is free and clear of any
security interests, mortgages, liens or other encumbrances.
b.Pond Fountain. In the event a fountain is added to the adjacent pond, Seller will
assume the ongoing and annual maintenance of said fountain. This will require
Seller to remove, maintain and install the fountain each year in the proper season.
c.Liabilities to be Assumed. No liabilities will be assumed by Buyer. All the
liabilities, other than those specifically mentioned herein or in the Development
Agreement, shall be paid in full by the Seller.
d.Consideration. The aggregate consideration for the Land to be purchased shall be
Five Hundred Thousand and no/100 dollars ($500,000), hereinafter "Purchase
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421467v2 BR305-111
Price". Purchase Price will be paid in two increments. First increment of
$10,000 will be paid upon acceptance of Development Agreement and final
increment of $490,000 will be paid upon issuance of the building permit, which
will trigger the closing.
e. Contingencies. The sale and purchase will be subject to the following
contingencies, which may be modified by the mutual consent of the parties:
i. Government Authority. Buyer and/or project will have been granted all
permits, variances or other authorization needed to complete and/or operate
the project.
Deed. The Deed will be conveyed to Buyer at Closing.
Permits and Approvals. Closing will occur when Buyer: a) has been
issued approval from MG, and; b) has been issued a building permit from
the City of Brooklyn Center for a hotel approved by the IHG Corporation
which will be built to the quality of having a minimum tax assessed value of
$3.0 Million, and; c) has provided the City of Brooklyn Center with a copy
of its financing commitment. Buyer has until December 31, 2013 to be
issued the building permit, financing and WIG approvals or this contemplated
sale will be null and void.
iv.Taxes. The City and EDA will agree to a 10-year tax abatement similar in
structure to the prior tax abatement agreement on the site. The Buyer will
submit a business subsidy plan.
v.Board/Council Authorization. Both Buyer and Seller will provide to the
other corporate resolution or other authority, if granted, authorizing the
purchase, sale, and investment respectively.
f. The Development Agreement will identify acceptable hotel companies or brands
and any additional companies or brands will require EDA approval.
g.The Development Agreement will require that the Land be developed in
accordance with plans approved by the EDA for an extended stay hotel with a
minimum of 75 rooms. Conveyance of the Land will be subject to covenants
assuring that the Land will be developed in accordance with plans approved prior
to closing or as later amended by mutual consent of the parties.
h.The Seller and Buyer will prorate taxes to date of closing.
Seller will warrant that there are no wells on the Land; there are no underground
storage tanks on the Land; and, to the best of Seller's knowledge, there are no
environmental or human hazards on the Land.
2
421467v2 BR305-111
At least 50% of all four sides of wall surfaces of the hotel will be constructed of
Class I materials and the remainder of Class II materials.
1.Class I materials include: brick or acceptable brick-type material, natural looking
stone, textured cement stucco, copper, architectural panels or masonry units
with enhanced detailing such as patterns, textures color, dimension, banding,
brick inlay or glass.
2.Class II materials include: EFIS, pre-finished metal, concrete block, fiber-
reinforced cement board siding, canvas or vinyl awnings.
k. The Land will have or will be granted any needed access and utility easements or
right-of-away from adjacent streets or parcels now owned by the City of Brooklyn
Center.
6, Government Review and Approval. Development of the Land will require public
hearings for the sale of the property, business subsidy and land use approvals including a
planned unit development ("PUD") amendment and site and building plan review. The
City and the EDA will conduct public hearings and give full and fair consideration to the
matters brought before them. Nothing in this Letter of Intent or the Development
Agreement will require the approval of any application required for the development by
the City or the EDA that is contrary to law or to the exercise of discretion by the City
Council or the EDA as they deem appropriate in the best interest of the public at large.
7 Due Diligence Review. Promptly following the execution of this Letter of Intent, Seller
will allow Buyer to complete an examination of the Land, surveys, soils, environmental
reports, plats, title, utilities and other legal documents as necessary and upon request of
Buyer to complete due diligence. Any information obtained by Buyer as a result thereof
will be maintained by Buyer in confidence. The parties will cooperate to complete due
diligence expeditiously. Buyer will not discuss sale with non-party employees.
8.Termination. Prior to execution of a Development Agreement the Buyer may terminate
this agreement upon written notice to the Seller.
9.Definitive Development Agreement. All of the terms and conditions of the proposed
transaction will be stated in the Development Agreement, to be negotiated, agreed and
executed by Buyer and Seller. Neither party intends to be bound by any oral or written
statements nor any correspondence concerning the Development Agreement arising
during the course of negotiations, notwithstanding that the same may be expressed in
terms signifying a partial, preliminary or interim agreement between the parties.
10. Closing. All Parties will use all reasonable efforts to complete and sign the Development
Agreement beforeTY, uty( (2, 1, 2013 or at another mutually agreeable date and will work
diligently to close the transaction on or before December 31, 2013. Buyer reserves the
right to request an extension as needed to complete all pending governmental and IHG
approvals. Buyer will, immediately upon execution of this Letter of Intent, request its
lender to order an appraisal on the Property.
3
421467v2 BR305-111
11.Expenses. Each Party will pay their respective legal, accounting, underwriting, appraisal
or other expenses incident to this Letter of Intent, the Development Agreement and the
transactions contemplated hereby and thereby. Real Estate brokerage fees of $50,000 will
be paid to John Sheehan by Buyer at closing.
12.Exclusive Negotiating Rights. In order to induce Buyer to commit the resources, forego
other potential opportunities, and incur the legal, accounting and incidental expenses
necessary properly to evaluate the possibility of acquiring the Land, and to negotiate the
terms of, and consummate, the transaction contemplated hereby, Seller agrees that for a
period of sixty (60) days after the date hereof, Seller and its respective officers, directors,
employees, agents, and brokers shall not initiate, solicit, encourage, directly or indirectly, or
accept any offer or proposal for all or any substantial part of the Land.
13.Miscellaneous. This Letter of Intent shall be governed by the laws of the State of
Minnesota. This Letter of Intent constitutes the entire understanding and agreement
between the parties hereto and their affiliates with respect to its subject matter and
supersede all prior or contemporaneous agreements, representations, warranties and
understandings of such parties (whether oral or written). No promise, inducement,
representation or agreement, other than as expressly set forth herein, has been made to or
by the parties hereto. This Letter of Intent may be amended only by written agreement,
signed by the parties to be bound by the amendment. Evidence shall be inadmissible to
show agreement by and between such parties to any term or condition contrary to or in
addition to the terms and conditions contained in this Letter of Intent. This Letter of
Intent shall be construed according to its fair meaning and not strictly for or against
either party.
14.No Binding Obligation. Except for Sections 7 through 13, this Letter of Intent does not
constitute or create, and shall not be deemed to constitute or create, any legally binding or
enforceable obligation on the part of either party to this Letter of Intent. No such
obligation shall be created, except by the execution and delivery of the Development
Agreement containing such terms and conditions of the proposed transaction as shall be
agreed upon by the parties, and then only in accordance with the terms and conditions of
such Development Agreement.
MINNESOTA HOSPITALITY, INC. BROOKLYN CENTER ECONOMIC
DEVELOPMENT AUTHORITY
By: Ae..---9 By:
Its: President
Its: 171/7-
And by:
Its: Executive Director
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CANDLEWCDD.
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Developing hotels with us, owners, and their hotels
have access to a host of resources worldwide. We
have scale in the largest markets, our global poi [folio
has measurable performance, and our brands work
hard for our owners, winning guest loyalty, building
momentum, and outperforming their market segments
and categories. And our growth projections have never
been higher: our hotel development pipeline outpaces
all of our competitors, leading to strong, enduring
global distribution.
Through our half-century of experience, we've learned successful hotel
development depends on matching owners with the right brands and markets.
That's where the IHG Global Development team comes in:
*Flexible hotel building design with a mix of suite options to suit your
market: studio and one-bedroom
o Efficient building design reduces cost to build and ensures that nearly
every square inch is revenue-making
*Site identification assistance
o Site planning and property layout advice
•Architectural planning assistance, including prototype CAD CD-ROM
*Leverage and purchasing power of IHG
IHG works with more than 2,000 hotel owners throughout the world. They
are our business colleagues and one of our greatest strengths. Together,
we've created a winning formula for success, including innovative ways
to make development as easy as possible.
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CANDLEWUDD.
Welcome to Candlewood Suites® Hotels.
The Candlewood Suites brand is more than a hotel. It's a place where guests can kick theirfeet up and -feel perfectly at
home. Part of the renowned InterContinental Hotels Group (IHGc 9), the Candlewood Suites brand caters to the needs of the
most lucrative segment of the traveling public, the extended stay traveler, by creating the kind of hotel experience they
crave — informal, relaxed, and independent.
. It's an expe e ce we're Proud to say makes every guestpnsider.us home ®, and affords every franchisee, and developer
' theoppo :. or A great investment. . -Flit
• -
A fully equipped kitchen offers guests
the opportunity to make a meal, or
nuke their leftovers.
Segment Opportunfty
Extended stay, extended profits.
Because fewer guests staying longer drives extended
stay occupancy, the team member-to-guest ratio is lower.
A Candlewood Suites hotel is typically run with only 12
team members, an efficient operating approach allowing
for higher profit margins and annual RevPAR increases
across the brand.
Right place, right traveler.
The typical Candlewood Suites guest is an affluent,
educated, hard-working professional with a preference
for privacy, self-sufficiency, and above all, value. With a
variety of proven extended stay demand generators, the
Candlewood Suites brand is positioned for success during
economic up or downturns.
Brand Growth
The Candlewood Suites brand leads the growth charge with more hotels in the pipeline than any other brand in the mid-
scale extended stay segment. Coupled with more than 290 hotels already open, the brand has strong and ever increasing
distribution. IHG brands have scale in the largest markets, the portfolio has measurable performance, and each brand works
hard for our owners, winning guest loyalty, building momentum, and outperforming their market segments and categories.
-
Brand History
2006
1995
Expansion plans into Canada
announced. Candlewood Suites brand
introduces its proprietary bedding
collection, Comforts of HomeTM including
an 'E-Z Skirt' and unique duvet cover,
both designed with care for guests and
housekeepers alike. Announced plans
for the first mid-priced extended stay
hotel in New York City.
Candlewood Suites brand
founded by Jack DeBoer,
the pioneer of the
extended stay segment.
IHG acquires the
Candlewood Suites brand
from Candlewood Hotel
Corporation for $15m.
The first Candlewood Suites
hotel opens in Wichita,
Kansas, US.
The Candlewood Suites brand is ranked highest
in guest satisfaction among extended stay hotel
chains, according to the North America Hotel
Guest Satisfaction Index Study. The brand
launches the national Candlewood Cares'
program, which provides a free suite for the
night to anyone forced out of their homes due
to fire or damage caused by severe weather.
Candlewood Suites brand is named best in
customer satisfaction in America-based Market
Metrix Hospitality Index survey.
04
2011
Candlewood Suites
brand becomes the
official hotel partner
of the NHRA® and
sponsor of Kalitta
Motorsports for the
2011 NHRA® Full
Throttle® Drag Racing
Series.
200® Candlewood Suites
hotel opens in Rocky
Mount, North Carolina.
First Candlewood Suites - hotel opens in
Canada outside the US in Montreal, Canada.
Candlewood Suites brand announces its latest
prototype design featuring a comfortable
residential look and feel with a new exterior
design and paint scheme, an expanded lobby
and environmentally-friendly amenities.
250th Candlewood Suites hotel
opens in Kalamazoo, Michigan.
2_007 7_009
05
Hotel Development.
IHG works with thousands of hotel owners throughout the world. They are our business colleagues and one of our greatest
strengths. Together, we've created a winning formula for success, including innovative ways to make development as easy
as possible, including:
o Prototype design concept designed to accelerate the
development process and programming efforts
o Flexible hotel building design with a mix of suite
options to suit your market: studio and one-bedroom
•Efficient building design to reduce build cost and
ensure that every square inch is revenue-making
o Site identification assistance
o Site planning and property layout advice
•Architectural planning assistance, including
prototype CAD CD-ROM
•Ability to leverage the purchasing power of IHG
Locations with the appropriate demand generators should be carefully considered when evaluating your extended stay
hotel investment. Approximately 70% of Candlewood Suites guests stay 7 nights or longer. The brand has a track record
of success across different location types including city centers, secondary city sites, suburban, and airport locations.
However, in order to keep operational costs down it is crucial for hotels to be in the right market to generate business
from long-term stays. Government and military installations, hospitals and nursing facilities, airports, corporate training
facilities and university/research institutes are all examples of facilities that would drive long-term stay business to your
Candlewood Suites hotel.
Candlewood Suites hotel development continues to succeed due to smart design, quality construction, and a commitment
from forward-thinking owners and operators. While the brand is primarily focused on new build projects, strong brand-fit
conversion opportunities will also be considered.
New Blinds
The Candlewood Suites brand offers prototype design
concepts that are strategically constructed to expedite
development and programming efforts to help ensure
each hotel is up and running faster. The room mix includes
studios and one-bedroom suites, while we created
prototypes for 83 and 113 units, these designs are flexible
and adaptable to market conditions. Standardized room
decor packages and equipment specifications are also
provided to speed and simplify the development process to
help save on the cost of each project.
Conversions
IHG has a team of experienced professionals with a track
record of working with owners to convert brand-fit hotels
quickly into the Candlewood Suites brand. The IHG team
works with owners, operators and design professionals
to develop a tailored renovation plan for each conversion
hotel to ensure that each hotel complies with brand
standards and meets guest and brand expectations prior
to opening. Most important is the smooth transition for
the staff and property to deliver the Candlewood Suites
experience, resulting in improved guest relations and
overall hotel performance.
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Brand Marketing and Priority Ckb® Rewards
Brand Marketing
Candlewood Suites brand marketing utilizes IHG resources
to execute brand strategy, build momentum for national
brand focused and multi-brand campaigns, as well as
providing local hotel marketing support. The team's central
goals are to raise consumer awareness of each brand to
differentiate IHG hotels from the competition, while driving
top-line revenue to your hotel. Candlewood Suites brand
marketing drives performance through many avenues,
so messages remain consistent to the communications
strategy, whether they be local, regional, or national in
scope. With expertise and an integrated role, no other team
is better able to articulate the benefits and advantages of
your hotel to audiences nationally.
Priority Club Rewards
The IHG loyalty program, Priority Club Rewards, is The
largest in the hotel industry, offering members more
choices to redeem their points than any other hotel loyalty
program in the world. Serving over 67 million members
worldwide, Priority Club Rewards is an effective tool for
driving customers to IHG hotels and creating brand loyalty.
For instance in 2011, Priority Club Rewards drove 59 million
room nights and $6.9 billion in revenues into IHG hotels. We
are particularly proud of the fact that Priority Club Rewards
has been voted Best Hotel Loyalty Program in the World
by readers of Global Traveler Magazine for the seventh
consecutive year, 2005-11.
Brand Hallmarks
The Candlewood Suites brand strives to provide more space and functionality that
guests want to be able to tend to their personal needs during their stay. When
guests experience Candlewood Suites hotels, they can expect to be in control of
their priorities and make themselves right at home.
The brand's spacious studio and one-bedroom suites feature a fully equipped
kitchen, large workspace, and a comfortable recliner. Plus, a list of signature
amenities allow guests to live, work, and relax on their own terms while away from
home for an extended stay.
Candlewood Suites hotels provide guests with services and features specifically
designed for the independent, extended stay traveler. Guests can take advantage
of the Candlewood Cupboard and grab a snack or ready-to-prepare meal, quickly
paying on the honor system. They appreciate the value and convenience of the
Candlewood Gym and free guest laundry.
Hotel Amenities
At Candlewood Suites hotels, team members strive to provide guest with all the essentials they need for an extended stay
at great value. Guests are given the room to be themselves but team members are always on hand to assist when needed.
•
In-Suite Kitchen
Eating out every meal can get old fast. At Candlewood Suites
hotels, our in-suite kitchens feature a full size refrigerator/
freezer with ice maker, cook-top stove, microwave,
dishwasher, pots, pans, dishes, and yes, even the kitchen
sink. So whether guests are in the mood to microwave a
quick snack or whip up an elaborate dinner, everythingthey
- need is close at hand.
Workspace
The large workspace provides guests lots of elbow room
to spread out enabling maximum functionality while on the
road. There is also a comfortable desk chair with overhead
lighting positioned to provide just the right illumination.
With the coffee maker nearby, guests can brew up a pot
and be good to go whenever they need to.
Free Local Calls & High-Speed Internet Access
Sometimes, hotel guests use their suite as a temporary
office as well as a home. That's why hotel suite amenities
such as free local telephone calls and two phone lines with
a dataport are provided. Candlewood Suites hotels feature
high-speed Internet access, absolutely free.
Candlewood Cupboard °
With the Candlewood Cupboard only steps away, guests
can pick up a variety of shacks, easyto prepare meals,
beverages, and even toiletry items wheneverthey want.
The honor paymentsystem means they don't have to dig
for change. They simply fill out a purchase slip and drop it
in the payment slat. The Candlewood .Cupboard features
our convenient Brown Bag Breakfastthat includes a choice
of breakfast menus for one fixed cost. So it's easy to grab
breakfastthe night before or get itto go early in the morning.
Take a break. Or catch a flick.
The Candlewood Cupboard allows guests the option
to grab a snack or small meal. After that guests can
relax in their recliner with their pick of a movie from the
Lending Library.
Sometimes, food just tastes better on the grill. And
when guests have a craving for a juicy burger, steak, or
even grilled veggies, they just fire up the gas grill at the
Candlewood Gazebo Grill. There's even an outdoor dining
area for eating under the stars.
Leading the mid-scale extended stay segment as the only
brand to offer free guest laundry. The Guest Laundry,
available 24 hours daily, provides washers and dryers to
make taking care of life's necessities a little easier. And no
quarters are needed because it's free. Detergent and other
laundry supplies are available for a nominal cost.
Each suite features a DVD player so guests can relax in the
comfort of their suite's recliner with a movie borrowed from
the Lending Library located on the lobby level of the hotel.
Staying fit on the road is a priority for many guests. It's a
great way to relax and work out the kinks of the day. The
24-hour fitness area, the Candlewood Gym, features a
variety of exercise equipment where hotel guests can work
out at their convenience.
The collection features housekeeper-friendly bed skirts and
duvet covers with inserts. Other elements include upgraded
mattresses and box spring sets, mattress topper, fluffy
duvet inserts and poly-cotton covers, 250-thread count
micro-check sateen sheets, triple sheeting, contemporary
cotton estate blankets, choice of three upgraded pillow
types and a decorative "Consider Us Home" pillow.
Work out Or wash up.
Enjoy a great workout any time of day at the 24-hour
Candlewood Gym. Or toss in a load anytime with
Free Guest Laundry.
P .1
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Communfty Engagement
When is a hotel more than a hotel? When that hotel gets involved, makes a difference, and supports the community with
more than rooms and revenue in mind. When it provides a roof not only for affluent travelers, but for those less fortunate.
When it becomes not just another hotel in the neighborhood, but rather a part of it.
Candlewood Caress
Imagine being forced out of your home in the dark of night by
a fire, flood, or hurricane. Where would you go? What would
you do? We couldn't fathom the hardship caused by such an
event. So in 2005, the Candlewood Suites brand launched
Candlewood Cares, a program providing a free suite for the
night to anyone facing the upheaval of disaster.
Give Kids The World
In 2011, the Candlewood Suites brand joined forces with
Give Kids The World Village to help make a difference
in the lives of hundreds of children with life-threatening
illnesses. With this partnership, Candlewood Suites hotels
across the United States and Canada conduct fundraising
activities to support Give Kids The World Village, a
destination that celebrates life, hope, laughter, and love.
The brand is proud to sponsor these activities and the
mission of Give Kids The World to provide a memorable,
magical experience for the children at no cost to the family.
Together we can keep the guiding light of hope burning for
as long as there is a need.
[HG Support & Services
At IHG, we have a lot to offer our franchisees. We've been
a leading player in the global market for 60 years, with a
targeted focus on building and operating great hospitality
brands. IHG support includes the benefits of our global
network, with integrated distribution and technology
channels, and award-winning marketing programs. We also
offer personalized support and training initiatives to help
maximize your revenues and fine tune your hotel for
peak performance.
Our success is built upon our commitment to matching
owners with the right brands and markets. One of the most
critical steps to any development project is site selection.
Our regional development team will help determine
whether your market and site match IHG distribution
criteria and investigate available brand opportunities. At
IHG, we tailor our project support to each owner and each
project. Whatever type of project you're interested in,
IHG offers a fast and efficient process that matches our
experience in the global market with the personal vision
you have for your hotel.
Whether you are building a new hotel or renovating an
existing property. IHG provides advice and consultation
throughout the design and construction process. We will
work with your architects and designers to share best
practices that will enable you to complete your project in
the most efficient and cost effective way in compliance
with brand standards.
The IHG Oil Board Program guides Owners and Operators
through the entire hotel opening process, from ground break
to opening. You'll be supported by a dedicated team
throughout all aspects of the development process, as well
as strategize your hotel's revenue opportunities and sales
& marketing initiatives. The Hotel Opening Manager (HOM)
is a proven project management system designed to track
and communicate progress towards the projected opening
date to deliver on-time openings.
The purpose of Hotel Performance Support (HPS) is
to improve the performance of your hotel by utilizing
industry best practices, IHG tools and resources. The
main focus of the HPS team is to maximize your return
on investment. HPS will assign a dedicated expert,
called an Area Manager, to your hotel from the moment
your license agreement is executed. Area Managers
are former hotel operators and are armed with years of
experience in development, operations, and sales. The
Area Manager has two objectives. One is to assist hotels
in optimizing profitability and asset value. Second, and
equally important, is to develop strong, positive working
relationships that serve as the basis for long-term growth
and mutual success.
People on the front line are key to bringing our brands to
life and driving your business. We provide you with the
tools and training to help you attract, retain and develop
the very best talent. The IHG learning library helps you
develop the skill and ability of your people to operate the
hotel in the disciplines of sales, revenue management and
systems, quality, brand service delivery, risk management
guidance, food and beverage, and leadership.
Global Technology, in partnership with IHG brands, will
deliver global, innovative, simple-to-use solutions that
generate increased value for our owners. We accomplish this
by delivering collaborative solutions including cost savings,
efficiencies, consistency, and automation - continuously
improving the performance and efficiency of our internal
operations systems and maintaining our robust hotel
system operations and infrastructure (customer support,
information security, networks, and disaster recovery).
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Extended Support
Beyond the IHG framework, you'll also have access to resources tailored specifically for the
Candlewood Suites brand:
•Regional Sales Directors teach and mentor hotel sales
teams on extended stay and direct sales fundamentals
o Secondary sales support such as extended stay specific
trade shows, E-cornmeice, outbound telemarketing, and
selected marketing/advertising opportunities
•IHG Global Sales Team uncovers extended stay
business with key accounts
•Targeted training programs including "CAN DO"
Sales, "CAN DO" Service, "CAN DO" Operations
and Front Desk staff
o Area Managers provide revenue management,
quality, and service consultation
Extended Stay Owner Certification
Be assured that when you invest in IHG extended stay brands, IHG will invest in your education to learn the keys to owning
a successful extended stay hotel. IHG provides the industry's only extended stay owner certification program, designed
specifically for new Candlewood Suites franchisees, demonstrating the differences between the extended stay model and
a traditional hotel operation. This orientation will be centered on the guest profile, product differences, pricing strategies,
sales focus, staffing levels, and management team criteria you will need to employ in order to ensure a successful ramp-
up of your hotel.
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A Unique Development Opportunity.
The Candlewood Suites extended stay model drives profitability with:
•A low ratio of team-member-to-guest for increased operating margins
•Occupancy rates:far exceedingtransient hotels
•Backyard sales with a definable customer base
•A clean, uncomplicated extended stay hotel choice offering convenience and good value
,• Focused guestservices
•Attractive, easy-to-manage investment with a level of quality you can take pride in
7 • The systems and support of 1HG
If you would like to know more about why the Candlewood Suites brand would be a great investment in
Brooklyn Center, please contact:
Shawn Siemers
Regional Director - Franchise Sales & Development
I nterContinental Hotels Group
(765) 420-7234
shawn.siemers@ihg.com
Shawn Siemers
Regional Director - Franchise Sales & Development
(765) 420-7234
shawn.siemers@ihg.com
InterContinental Hotels Group
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INTERCONTINENTAL Lf i L tf.d !t,715:51 CROWNE PLAZA
HOTELS & RESORTS 1 Kitictay trill HOTELS & RESORTS
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HUALUXE egliN°4151G0. Fi;.1 HOTELS RSTAYBRIDGE 01 CANDLEWOD.
1r SLIITES —E• SUITES
Three Ravinia Drive Suite 100 Atlanta, GA 30346-2149 1 866.933.8356 development@ilig.corn I ihg.cordelevelopment
This is not an offering. The content of this material is proprietary to Intercontinental Hotels Group and may not he reproduced, disclosed, distributed or used without the express permission of an
authorized representative of InterContinental Hotels Group. Facts and figures are provided without representation or warranty and are subject to change without notice and were deemed correct at the time of
printing. For more information regarding franchising Candlewood Suites, refer to the Franchise Disclosure Document for Candletvood Suites available on request. 02012 InterContinental Hotels Group. All rights reserved.