HomeMy WebLinkAbout5.611 AmendmentPort Angeles
Hotel and +. Center
Port Angeles, Washington
�
j
�
�
�
�
Dear Mr. Smith;
On behalf of Ehm Architecture with MMP, Destiny International Venture, Radhe Investments and Six Continents
Hotels, | am pleased to present this information package in response to the City's Due Diligence Criteria for
development of the Port Angeles Hotel and Conference Center Facility.
As you know. | have been extremely active in preparing for development of this exciting and very important
project. | am committed to furthering the ideals of the City of Port Angeles, and look forward to this unique
opportunity to effect positive change in such a beautiful community.
This response has been prepared with input by and in cooperation with City of Port Angeles, Port of Port Angeles,
Washington State Department ofNatural Rosourcea, The Chambers Group, Six Continents Hotels, Interbank
Brener, Smith Travel Roneamh, MTK8 Management, Destiny International Venture, Andy Patel, and Rick Hod.
I feel that the information contained herein will satisfy the City's needs in protecting the Lodging Tax Funds being
contributed, and that it clearly demonstrates the viability of this project.
My partners and \ are hopeful that you will be able to ogondbu the City Council review of committee
recommendations for May 7.and have developed our timeline around that date. It is critical that we stay onmfast
track, hz ensure that the facility is completed in its entirity before the beginning of peak season in 2003.
I look forward to seeing you on April 11, as I will be attending the Conference Center Review Committee Meeting
that afternoon. Please don't hesitate to call me if you should have any questions or comments about his
� Randal Jay Ehm m^ Principal 2707 California Avenue SW 9407 Vancouver Mall m�m�p �me���R� �� poo=r�
= ��,�a�e^="^�� WA 98116 w����� Bellingham, WA �����=� ����° ~
�� ����m 206 64&1783 360 646-1011 ��. .
FAX 206933-ASzo
=
Toll Free 800 299-6463
City of Port Angeles
Conference Center/Hotel Development Project
Preferred Proposal Due Diligence Phase
TABLE OF CON TEN TS
Pre-Desiqn of the Building Structure(s) and Site Improvements
(a) the interior and exterior design and finishes to assure high quality
(b) sufficient provisions for parking in accordance with City regulations
(c) preservation of public access to the current Waterfront Trail Easement
(d) any other onsite or offsite improvements necessary to meet anticipated permitting
requirements.
Business Plan Document
Marketing Plan Budget and Implementation Strategy
IV. Property Acquisition /Lease Negotiations
(a) the Port of Port Angeles
(b) the WA State Dept of Natural Resources
(c) any other property owner for the acquisition and/or lease of Oak Street
Development Site and any other necessary properties.
V. Documented evidence that all Sources of Project Development and Start-up
Financing are Available.
V1. Project Development Schedule
(a) permitting
(b) construction
VII. Development of a Long Term Lease or other Agreement with City for
Commitment of Lodging lax Funds in exchange for City Ownership Interest
and viable Marketing /Operation Plan by the Developer.
11
[A
City of Port Angeles
Conference Center/Hotel Development Project
Preferred Proposal Due Diligence Phase
|. Pre-Design of the Building Structure and Site Improvements
(a) The interior and exterior design and finishes to assure high lit
Ehm Architecture has redesigned the exterior of the building ho better suit the Crownm Plaza Hotel level
of quality, to better reflect the cultural richness of the Port Angeles area, and to enable the project to
remain highly competitive among Washington State conference hotels.
We have included plans and renderings of the redesigned facility that reflect the revised character and
layout of the structure. We have also included examples of interiors that are typical of the Cnxwne Plaza
ohoin, although we will design interior spaces that are more reflective of Northwest Sh/|o and of the
historic significance of Pod Angeles in its American Indian nu|1urm. its logging activity and its maritime
legacy.
0 VVo recently conducted a Public Design Workshop in Port Angeles, hoinvolve the community in the design
process and ko help foster o sense of ownership among city residents. The workshop was well attended,
�
and generated constructive criticisms and positive comments from the participants. VVo have gathered
'N
all materials and comments from that workshop, and are in the process of incorporating the public's
�
/
design suggestions into the project wherever possible and practical.
�
�
The enclosed She Plan reflects our proposed parking layout. Vve are utilizing all available land m/ the
property vvewill purchase from the Port. We have also designed subterranean parking, although this
option imcost-pruhibdive. VVm have been in contact with an adjacent property owner who has expressed
�
interest in exchanging his property for an equity position in the deal, and have shown his parcel with its
proposed parking layout on the site plan.
�
We understand that the City is interested in developing a parking structure in the immediate vicinity of our
�
project, and we have already begin to negotiate with the City in this regard. VVe feel that o joint venture
ho construct parking kn the Downtown Redevelopment area will beof great benefit ho the City, that itwould
ensure our ability to finance this project at a reasonable construction cost, and that it would ultimately offer
�
-cost savings tn the City for additional parking.
(c) preservation of public access to the current Waterfront Trail Easement
The enclosed parking plan reflects our desire to minimize parking on DNR-owned property. If we are able
no secure m jointly-developed parking ~structure with the —` of Port Angeles, we will be in a position to ^
retain the minimal parking plan. The plan am shown obviously offers much more opportunity for public
amenities and access to the waterfront trail than if we are required to place more parking on the DNR
�
land.
Regardless of the outcome cd son .we are cnmniMmdhmmainta�ingpubUn access hm
the VVate�rontT/uii YVe plan ho - provide amenities including benches, lamp posts, walkways, landscaping
and interpretive elements along the Trail to further enhance the waterfront area. VVe are also required
by the Port tn allow for an access easement tm the existing pier for offloading of fishing vessels.
(d) any other onsite or offs1te improvements necessary to meet anticipated permitting reguirements
Additional onsite improvements will be defined when the parking issue is resolved. Landscaping will be
designed accordingly, as will hardscape and pathways in and around the site, Street improvement plans
will be produced by a licensed Civil Engineer in the Construction Documents Phase pursuant to
acceptance of this Due Diligence Response document.
-0 _
' � }
<\
B",..} \
ao
aZ
cl
- - - - - - - - - - -
-----------
- - - - - - - -- -
- - - - - - - - - -
- - - - - - - - - --
- _.._.._.._.._.._.._.._.._..J -
I L
I H D U V [ME
HMN90 30N3H33N00
(INV 1310H
S313ONV
IHOd
ao
aZ
cl
- - - - - - - - - - -
-----------
- - - - - - - -- -
- - - - - - - - - -
- - - - - - - - - --
- _.._.._.._.._.._.._.._.._..J -
I L
0 'd V MIM 2OiN30 3ON32J33NOO
ONV IDIOH
S313ONV
IHOd
-1 a 91 M 0 1 a a ■ m 1 - -M ---a --m --m --a --u --m --a —M --a
3 n 1 0 3 Z I H O W H MM, 2I31N30 30N3H3:JNOO e
ONV 1310H %g
woP'ywewye�ep)eae :RIVW-3 ww'4wew4a'amm
9E9M(BLGZLEt•96E.Z68SM99'09aZ Z 14 ;a%aq$ � wm'ywew45 -6 6U9Z w Sfi 9 IIV V- S313ONV
ESo-66ZIO
W26 alp as
S 9
U e Y y
u
enuen (OLZ ]ew3$uotBul4seM'M 910t � 4 M
IL IL
d
w
0
O q
LL LL
Z O
Q Z
0
U
w
s �
u
-- -- - --- - -- a
------------
�A g
g�A dtl _
°s u
® 4 tl 8A I
a
-
A
a -ro tl tl
A tl — tl
I
b
a A
----------- -- --------
i _ tl
e :
'e
A e
b'
------------- __ ----------------
R
p ILL
LLJ
fr B k
tl tl �A A
a I
A
' a Fl 9
N
ti
J�
n I D H I I H
D U V MM
7J31N30 3ONE�13=INO0
CNV 1310H
2
PL-oz
5313 NV
S IM vm .I ... s
MZ6 Vo ftla ..s
mgWl
IHOd
z
z
O
0
0
uj
W
W
_j
W
w
U)
<
0
0
LU
U)
z
EB 1B ED
13
a]
,C]
EE
IE
13
jj
F7
FTF--
-131.
E
E
0
e—
I
__ —
11
F
P:
E
E.-
ji.......
13 ED IE
E-1
R
LU
E
E
E
ILE
E
E
-
E
E
E
E
7 rl
lia,
C
IP
. .....
E
El
[B [B
[B
ID IB
m ffl [B
E
E111]
i
i
A$4
r
colon
more
wa
s gan
Pu
grout
on a2
were"
1Nt
gaiter
FltmaxMAxctt7 2pg2 #^ �'�� m a yam a
�rtl�6 §F u�snthDnu�l7avnrs<
4, � ry
•_
v, `"V .�aM inr. u. ." . ' ` "�' • "am.:- ,l!"�t 1' ^,�a� . .. Po ...
U�dian artart elthcndi the sta ai con a at ,.Watts sr os aaaora �rtreat boats far
Hmm'tvc+w+elPeefvcmn,n r)na.r titive -7�
dents said they didn't want if to Arrifedad Jxiy Eimi descr�tes some of 1#a" fhm i. end me s pde
resemble i Cedars Casino. trret of a Proposed iwtet and convention cantor forowrRsrso-r
Ehm said he .ranted to tarn the own Port Angeles w�aterfroat during a d9a�p agreed: and disagree with the front lend at Front and C7ek Wa are still mformetnon �
' P 7tiorsday various points — anrd then streets
t
to
he area's rainfall into an art�a appearance to those on the d�cathMCll d hE aad�e�ice s Etnip Natrts W l egnn
afrom the roof in some lrind Several peoFle also said tbeEhm —who says�he has The hotel and study Jacei Gom Cftv Ownncil rOn°s�
MCO protect .rr71 be Cvnded y tens,, o l ,
deco ratrwe waterfall coiararicefhe °'nIuYe lya '„
Suggestad artistic elements new building should fit in with already put morn than center wadd be bu>7d'byE2itn's part with 52 million in citj% lied Ehm'amd he wantsf'o
included waterfalls where the the downtown buildings behind t$hI 00 of his own money into company, Ehm ArcbifeiJi"xrr of tax mmnry -- paid out at tie faetawad% and othar" awonta with
buildings would be, arched win. it many of which could be the proposed project listened Seattle and San
down chinmeps that didn't look refurbished to give a better attentive asked parcel ` Calif, rate of �100,p00 a year over the the cify to bribg ;people 'fi a "z
� , questions, on a 3.8 -acre star- neat 20 yeors: diainK the Novi peiwda. , ,
Email
lnb~ W .ehrnarchxorn
Facslmll* 61929$4867
Toll Fret Boo 2994M
1016 West Washington Street
San Diego, CA 92103-1865
Randal Jay Ehm President
Mf ror,
OEM ECR 0 W N t P
I C I Ii -
The registration
desk lies just beyond
the lounge area
where the
welcoming smiles of
the team reflect the
finest tradition of
Crowne Plaza and
Six Continents
hospitality.
As soon as they step
inside the lobby and
lounge, guests enjoy
a surprising sense of
arrival, whether
they're getting down
to business or
getting away from it
all.
MMP Building for the 11 TM
North America South America
11
E -mail wdalrfl-hmalch Co
Internet www.ehrnsrchxorn
Facsirrillo cis 2994967
Toll Free 800 2994463
1016 WW Washington Street
San DkW, CA 92103-1 SOS
Randal Jay Eh. Pesickat
,',rone.rf-y Informat'
Ion
R 0
LW N E PL Al
EMI-
Wine and dine to your hearts content in our full service restaurant. The choice of the
menu will stagger your mind. Guests remember a perfect dinner setting.
Get away in our Cigar & Brandy bar for those days you just need to kick back.
MMP Building for the FutureT.
North America South America
E -mail Land E hmarchc=
Irftraot w .ahrnarchxorn
FacsInift Gi 9 299-M7
Toll Fr" 600 2984693
1016 W*st Washington Str•et
San Ditgo, CA 92103-1806
Randal Jay Shm President
Me'r,
EW N f 1P.L-A'I A
IF L S . R rm 9 OPTS
!3
Once you develop a Crowne Plaza Resort Hotel, you join a family of 1AI
conveniently located worldwide locations of one of the industry's elite Hotels. Wi
leading reservation system, proven world wide sales, training and support and
marketing system, the Six Continents Corp. offers all the advantages that will ma
the Crowne Plaza brand the choice for all your stays worldwide. I,
MMP Building for the TM
North America South America
MMP
WNF- P L A I A'
I ELS R ESOQ�'$
Building for the Futumi-m
North America South America
Whether it be a simple meeting, fancy
banquet or elegant wedding, Crowne
Plaza is capable of handling events of
all sizes.
Our staff of professionals can help you
with all necessary preparations for
your event.
Enjoy live music, professional catering
services, full bar, and much more.
E-mail en
_�ql,'Jehmarch Com
Internet w .*hmarchxorn
Facslrnlia, 619290-0967
Toll Free 900 299-6493
1016 West Washington Street
San Diego, CA 92103-I609
Randal Jay Ehaa President
CROWN PLAZA
'AC I E L S RES0 9 T5
Our meeting rooms come with the
state of the art audio-visual
capabilities for every presentation
need.
What better way than to hold your
private small or large business
meeting, banquet, weddings or
private parties in our extra
spacious ballroom.
MMP Building for the TM
North America South America
� \\
■
M., 0
-4.,- &.
-77--1 \
/ � 7ƒ
. a . .
®» �� � , .
i�
E-mail wdal',Dehmarch co
lnt&nW w .ehmmrchxorn
le
Facsimi 619 2994967
Toll Fr" 80029$4493
1014 West Washington Street
San Dl*go, CA 92103-I608
Randal Jay Ehm President
The guests remember
the elegance of our
richly decorated extra
large rooms with
oversized beds.
The amenities make the
guest completely at
home with 2 phones,
microwave, minifridges,
iron, ironing board,
coffee maker and many
more exclusive
amenities.
-.=* I
E 4*�.
OWNE P L A I A'
C I C LS - R E SOP TS
!3
MMP Building for the FutureT.
North America South America
A work desk in each
room with high
speed internet so a
traveler can
continue working at
any hours makes
this a favorite
among business
travelers.
A large screen TV
with all major
networks on cable,
pay per view movies
and video games,
makes relaxing
Mn;MI'MLo
U
U
Environmental Consulting - Site Permitting
March 30, 2002
Mr. Randall Ehm
Ehm Architecture
1016 West Washington Street
San Diego, CA 92103
Dear Mr. Ehm:
Enclosed is a preliminary summary of environmental issues as we discussed. I spoke to
Brad Collins, the lead SEPA official for the City. He indicated that he does not need
anything written on environmental issues to satisfy the due diligence requirements (April
5), although someone else in the City may want an indication that we are making progress.
He indicated that a brief summary of issues and work to be done would be a helpful
submission. I enclose a summary of issues for you to use in your April 5 Due Diligence
submittal to the City. Please review the document, particularly the Project Description
Section to make sure that it conforms with your design plans.
Mr. Collins suggested that the use of the existing pier be considered as a separate permit
submission, since otherwise the complex shoreline issues involved in that could compromise
the likelihood of success of the hotel/convention center project. Therefore, I have not
discussed that potential aspect of the project.
I will be out of my office next week, but I will check in with you to make sure that you
received this information. I hope it is helpful in your submission.
Sincerely,
G. Bradford Shea, Ph.D., REA
Principal
GBS/ms
Enclosure
WT7851SS.PAC/033002gbs
P.O. Box 2876 'Port Angeles, Washington 98362 'Telephone: (360) 4520186 *Fax: (360) 4524118
email: bshea@tenforw.wd.com
Q1
e
r
ENVIRONMENTAL ISSUES:
OAK STREET HOTEL/CONVEINTION CENTER
PROPOSED BY EHM ARCHITECTURE
Project Description
The project as defined is to construct a 150 room hotel and a 10,000 square foot
convention center on a parcel of land north of Front Street and west of Oak Street along
the Port Angeles waterfront. The land is currently owned by the Port of Port Angeles, with
a portion of the property under state ownership, administered by the Washington
Department of Natural Resources (DNR). Construction of the project would involve the
purchase of the property from the Port of Port Angeles, a exchange of equal sized land
parcels with DNR (15,600 square feet) and a subsequent lease of land from DNR for
parking for the facility. The structure itself would be built entirely on land owned by the
Pore following the property exchange. Conceptual details of the exchange and the purchase
have been worked out with the Port and DNR.
The proposed building will be four stories in height at a maximum height of 42 feet. The
1st floor will contain a lobby, cafe /lounge, a restaurant, supporting space (mechanical,
laundry, storage, rest rooms, linen storage, staff offices etc.), a 10,000 square foot
conference center, an exercise /training room and an indoor pool. The second and third
floors each contain about 50 rooms and a guest service area. The third floor also contains
a deck area on the east side. The fourth floor contains about 50 rooms plus an upscale
bistro /lounge.
On -site parking will be provided as per Port Angeles City Code. Some off -site parking will
also be provided at a nearby location. Present plans call for 246 total on -site parking
spaces. The developer is currently investigating feasibility for below ground parking under
the facility.
Environmental and engineering studies for the facility are on -going at this time.
Geotechnical investigations (Pacific Rim) including test cores and structural stability tests
will be conducted and a geotechnical report will be prepared and submitted to the Port,
the City of Port Angeles, and other interested agencies and will be available for public
review. Similarly a Drainage Plan and related civil engineering studies will be prepared
by licensed civil engineers (Northwestern Territories, Inc.) and will be similarly circulated.
WT785ISS.PAC /033002gbs 1
An Environmental Assessment (EA - this will be an expanded SEPA Environmental
Checklist) is being prepared and will be submitted to the Port, the City of Port Angeles,
DNR and other cognizant agencies. The EA will be based on the issues discussed below,
which were identified by Mr. Brad Collins, the lead SEPA official at the City of Port
Angeles.
Issues
Topographic effects will not be important since the site is level. Effects of underlying strata
(soils and geology) will be important since the area consists of a filled shoreline.
Geotechrlical studies will be directed to determine whether the soils are stable and
structurally sound such that they will support the facility.
W-N
Air quality will be a relatively minor issue due to the relatively good air quality in the area.
Effect of existing industrial facilities OD the proposed project will be considered.
WATER
Water will be an issue in terms of water enjoyment land uses which the facility will
provide. Stormwater and drainage will also be important water issues. Effects on the
nearshore areas of Port Angeles Harbor will be considered briefly here and more
extensively under the "biology" section.
RIKVT�
This may be an important issue. The project will not be on the water, however, parking
will be adjacent to Port Angeles Harbor. The various fish and wildlife agencies will be
contacted for comments on the Draft EA.
ENERGY AND NATURAL RESOURCES
This is expected to be only a minor issue. It will be discussed briefly in a qualitative
manner.
ENVIRONMENTAL HEALTH
Potential effects of the project on nearshore biological organisms may be an issue. This
will include effects of the project on the recently emplaced Valley Creek Estuary. There
may be opportunities for mitigation related to improvement of the estuary or the shoreline
north of the facility.
1 WT7851SS.PAC/033002gbs 2
LAND AND SHORELINE USE
This issue will be very important. A Shoreline Permit will be required for the project. The
Shoreline Application will be reviewed by the City of Port Angeles. Sub-issues will include
use of the shoreline, building height, parking near the shoreline, and stormwater drainage
and discharge. Potential effects On rearshore biological organisms is also expected to be
an issue.
HOUSING
This is not expected to be an issue. The project will effect no existing housing. Effects on
views will be covered under the section on aesthetics, below.
AESTHETICS
The project will block some views. It has been designed to utilize northwest colors and
design elements. The aesthetics will be analyzed for these issues.
LIGHT AND GLARE
Proper design should result in only minor increase in light and glare. Project design will
be analyzed for potential effects on traffic, nearby businesses, residential properties on the
bluff and on other nearby uses.
NOISE
Existing industry will not be required to mitigate or buffer noise levels unless they exceed
existing regulations. The hotel /conference center design should incorporate noise
reduction measures, particularly for rooms on the west side of the structure.
RECREATION
The hotel will provide some recreational opportunities to users of the facility. It may also
preclude potential recreational uses of the land. Loss of public access to the waterfront
may also be significant. Incorporation of the Waterfront Trail into the project design will
be important. These issues will be discussed in the EA.
HISTORIC AND CULTURAL PRESERVATION
There are no known historical or cultural resources on the Site which would be affected.
In the event that such resources are identified, they will be examined in the environmental
analysis.
iWT7851SS.PAC/033002gbs
0
r
TRANSPORTATION
Transportation is a major issue. The facility will add many vehicle trips to an area which
is planned to house the Gateway Transportation Center being planned by the City of Port
Angeles. It also is in the area served by the Victoria ferries (MV Coho and the Victoria
Express). This traffic plus normal downtown business traffic and through traffic will be
discussed in the EA. In the event that significant impacts seem likely, a more detailed
traffic study will be performed.
PUBLIC SERVICES
Availability of public services is not likely to be an issue. All services are available at the
Site. Storrnwater treatment and discharge will be important and will depend on a well
designed stormwater system on the site.
UTILITIES
Utilities are available at the site and
The City will provide electricity, water
media communications are available.
WT785]SS.PAC/033002gbs
capacity is not known to the City to be a problem.
and sewer. Telephone service and other electronic
Utilities will be discussed briefly in the EA.
11
0
0
| U.
w
The information that follows includes several spreadsheets that form the complete Business Plan.
| The first several pages of this section contain our Five-Year Low Yield Pro Forma Projection. ThThis }
document reflects a wnns�oms� scenario for revenues, which b; based upon moderate management
� .
� ntrategies that are utilized by one of our potential managing entities.
The second document he the Five Year High Yield Pro Forma Projection. This document reflects a best-
case scenariofornavenoen.whichisbenndupunaggressiveondh|gh-endnnanognmerdstrgteOiesGhad
are utilized by two of our potential managing entities.
'0
The third document consists of our First Year of the Low Yield Pro Forma Projection, ina
m
-breakdown to reflect a more detailed breakdown the worst-case occupancy scenario. This projection
|
reflects variation by month, aa the market typically and consistently fluctuates throughout the year.
The fourth document ism printout of the Smith Travel Reports hotel market historical data that was used
in preparation of these Pro Formas. The period studied was from 1996 to July of 2001.
The final document in this section is our Construction Cost breakdown. This breakdown is not reflective
of design that |noorpmnsham underground parking, as this option would be cost-prohibitive and would
most likely be problematic due to a high water table below the subject site.
�
�
Five Year Pro-Forma Projection: Low Yield
Accounting & Banking
Year I
Year 2
Year 3
Year 4
Year 5
Forecast
$125,000-00
Forecast
Forecast
Forecast
ADR
$120.Ob
-Forecast
$130.00
$140.00
$155-00
$168.00
Occupanc %
60.00%
61.00%
62.00%
63.00%
64.00%
RevPAIR
$72.00 $79.30 $86.80
_ $97.65,
$107.52
Income
$28,800.00
$28,800.00
$28,800.00
$28,800.00
..... ......
... $TB_,666Y6
Room Revenue
Dues KSu"b's`c_r_iption_s . ...
$3,994,560.00
$4,399,564.00
$4,815,664.00
$5,417,622.00
$5,965,209.60
Phone Revenue
Eduation Tfrai Im.
$60,000-00
$62,400.00
$64,896.00
$67,491.84
$70,191.61
-, Conference Meeting
"'—'-$175,000.00
$200,000.00
1
$208,000.00
_$201,177.60
_$216,320.20
--.-.$224,972.80
_&
Miscellaneous
16
$186,000.00 . . . .
$193,440. 00
$209,224.70
$217,593.69
-dross income
$4,229,560.001
$4,661,964.
3,560.00,
$5,701,433.84,
$6,260,373.91
$24,567.03
0
Repair & L'ntenace
............
$19.000 .00
. ,
$19,760.00
$20,550.40
Accounting & Banking
$20,000.
$28,--000
-----------
$39,200
$54,880.00
$76,832.00
-"TcFv-e �i`s' i n c i & Marketing
$125,000-00
$100,000.00
$104,000.00
$108,160.00
y $112,486.40
Commissions
$79,891.20
$87,991.28
$96,313.28
$108,352.44
$119,304.19
"--Credit Card Fees
$78,692.83
$79,192.15
$86,681.95
$97,517.20
$107,373.77
Cable
$28,800.00
$28,800.00
$28,800.00
$28,800.00
..... ......
... $TB_,666Y6
Dues KSu"b's`c_r_iption_s . ...
....... ___ $2,500.00 . , .
$2,600.00 .
$2,704.00
$2,812.16
$2,924.65
Eduation Tfrai Im.
$8,550.00
__...J7,500.00
_$7,800.00
$8,112.00
$8,436.48
.0
Franchise Fees
$334,564.80
$395,960.76
$433,409.76
$487,585.98
$536,868.86
16
Licenses & Permits
$1,000.00
........ ... . .... __
$1,040.00
.........
$1,081.60
$1,124.86
1169.86
Linen /Laundry /Supplies
$21,.000-00
$21,840.00
$22,713.60
$23,622.14
$24,567.03
0
Repair & L'ntenace
............
$19.000 .00
. ,
$19,760.00
$20,550.40
$21,372.42
$22,227.31
Office Supplies
_ .
.00
$20,800.00
$21,632.00
$22,497.28
$23,397.17
____.._______$20,000
Supplies & Breakfast
$115,891.20
$123,991.28
$132,313.28 _.
..... . .....
$144,352.44
$155,304.19
$10,000.00
$10,400.00
.
$10,816.00
$11,248.64
$11, 698.59
_Telephone
Utilities
$95,869.44
$99,704.22
$103,692.39
$107,840.08
$112,153.69
Conference Coordinator
$85,000.00
$88,400.00
. ..
.........
$91,936.00
......
$95,613.44
$99,437.98
Gardening/Maintenance
$399,420.00
$40,996.80
$42,636.67
$44,342.14
$46,115.82
Concier eliNalet
$21,900-00
$22,776.00
$23,687.04
$24,634.52
$25,619.90
Front Desk
$96,360.00
$100,214.40
$104,222.98
$108,391.90
$112,727.57
Housekeeping
$257,496.55
$267,796.41
$278,508.27
$289,648.60
$301,234.54
General Manag r
$35,040.00
$36,441.60
$37,899.26
$39,415.23
$40,991.84
_mm
Shift Managers
$55,480.00
$57,699.20
$60,007.17
$62,407.45
$64,903.75
Management
$169,182.40
$186,478.
542.40
$228,057.35
$2.50,414.96
_'$22_,545.5T
Benefits
$20,844.60
$21,678.38
Payroll Taxes
$113,981.84
$120,120.45
$126,365.97
$133,8 76.60,
$141,216.96
Insurance -
$50,000.00
$52,000.00
$54,080.00
$56,243.20
$58,492.93
Property Taxes
$183,600.00
$187,27200
$_1_91µO17.44
$194,837.79
$198,734.54
ax,
Miscellaneous _m
$40,000-001
$41,600.60
U_
Income and expense for the pro-forma projections are based on area market and real operating expenses of
Crowne Plaza hotels and other north Washington state properties.
is
O
O
CL
M
O
ct
-
I-
jeuoijejado
11OJAed
poxii
0 (N 0
co to
10 0 -
q q q 0
C� 0 0 0
- 0 Q 0
C: (N 0 0 0
C� q C� 0 0 0 c) 0 000j..
C010 (D100.!o (14 0
00 0 C'410 0 ol"Icj 6
v 0
"t q
00
0
o
9
0000
'.0
.
"i-
r
000
o o
o
v
o -000
(1)
0-0 0
0 0 CD 0 CY) 00 00 Y) 8
1 1
IS 00 - 0 0 -
C� CD cc� 12:1 111�
018288
D
C�
VL
"I M
8
V-
0
-or w
0 'T
C� r__I_
OCD ap
- 0),6)
60
0' SD
6 00
C3 04
11
0 'T 0
0) 10
120 , I
U, ID ml� CNI00 0
1 1. I� 13 C14 ua 61� Cl) I" �2 1011)
L.00
CO)
(d
r_�
t6 Ld
c, to
Cri L61 C)
- - -
0 c)
to
-
0
'T
- -
C'�
M
6c, V) U) U) M V) 611, 61* 6�' 64
61)
bl�
O'� 69
W
C14
64 V�
V) T:
V,
ul �2
61�
V�
cli
C4
CA r- v-) co C'j
- SD P,
t- co C' 0 M!"
120 1 (D Lc� 0 (Y)IO c
CO N C"
1 cn "� I Iq 'q
ow
0) C) 0 C:)j(DIC)
0 M
C3 C) C)
co
C,
V? C�
CR
0)
0 r- to Lo
jl'y�
co CD to (Y) 0 00 1 M 1- 0 (D tn
colo
0 Olt- "Ico M C011D r- 'T Is
I- co
QD n CO 00 co m i 1
M U.) U3
c:, Lr)
I
c-, 1,-, (0
cl� C)
co
0
0
. 0
co
10
M w
a 0
(D
m I L6
M
Iua 0 -M 0)
Lo.
fl- 0 (0 C61 C4 06 —1—
U, 64 V� 61� V+
ua U)
0110 CC40
vi
64 bG
om
__ cd
W, w
M. (D 'T
C41 V: "i
6e V�
M c"
(d cli
-
V71 td
co co
vi cr�
pi,
U-1
bl� co
I-
�2 0 'D
co 0 0 to
6.16.
f
r�lr--IOICD 0 M10 loico Im 'Coll-1- co
A 1; ' (D Lq (q Mir 1, M f ID
" , " , " .1 . - - co
cy� Iq
- cl�
cs
M Lo
co M
CO
9 1�_
4_' '6 16 (b f� 61 c) Ico 1co C) co �!
! �2
L" "o LO S C')
co Ito Ln
00 00 N
6
0 CV
co
C14
0
CO
C')
�2
1 �E Z�ICT 61 C41 P-�
CN
C61
I C'j
C, 'T �2
61, 61� 1
1 ullot 11311
U& I r
11121 C�o
fwD
C4
51
1
IV)-
EE
-
-
100 ['_g (0 o !r-
m s c-, 1 'c) LO
-1-
C�'
C)
cy) 00
01" ')
0
M M
M "
'10'
co
20
r- -T cy�
C,
C� .4 C6 '6 �6 IM i6ko
.0 0; 00 D P-
c '1,
'o T I C? CQ J.
Oct 00 C'4
0 C14
C1)
to
0i
co
tto C61 L-,
I U) 61> V� I b4
W- zm�
0
OW5
(0 C14
- �'7 "i
i M .0
'6 C6
-'i L'o
'M 'v'!
Cli
2
It!
164 _1A
w
Wit
Us in, I C) g�.
(D V. C:, i M •
r-� a! 'D (q r--: C� (M r- t (D c2
I
0 CD
M 0 CD
C) 00
C) (o
0 co OD
ID. CI) C)
10
10 04
1 — 0
ID CD
M V�
1p
J3 "IT
'q L6 'n
cw, 016 c616 6 1 co c-� Ico
CD. c2
1
co LO U-)
1
co C,
0 C)
�) i
0 IL
im
CY) co
co
64
�! 10 j ,
- 1'_1 L'o
. c, I co
Ci 8
c)
" '_
0, 'D
CY)
M a
'2
CD
"
M
t-
LL C6
0
I C� 9� (Qi(dic41v1' ! C611"iLd
�; V)
t-: cli
603� U"
oo
C11 v
-
(D co
- - -
'T 1�)
-
V)
(113t
- rz
LO
C')
V)
(4�
co
M10 .
r"i V-: a m
416
MiM t� CNJ I Lr) Lr)
LO Q i cy� CY?2,P qlNi"
cy)
M 1 0 0
M
I C) to
0 M (o
CD M C)
M 0)
M to
1- 0
(D 0
cy) C'4
in
o
0)
(D (D M (0-
�2
'T .
00 CO z (D 0 0); 0� I
'6 11131 L6
,
16 '5
)�
c
6 "51
Ic)
:t
co c .
(D
.
co co
.
t--
6",
� I (A Lo i-, Lo
ico LO
to U� Z11W
0 CN co
r�
01
.6 1
mi - 1 11
C4 �q I'tr
"� Lq
(D co
-I C'
"T Lf)
c'!
M (4,
u:t
6q U) C, I
1
N3 ('��
j
ic
61) -
01, (D
co
ult
ta
ICO I co 1 M
C, 0 "?
r_� If) 'T ID CIJ
1r) C01010 C,),O!C-qi 7.
C"-4 R) 00 M N
If) w (6 co i � I U)I f�p
LO (n Lo N
M so cc)
cl C?
(Y)
0 M
0 MIC
0
C3,
6 "s
W�
C�
to to CD
0) f- I
M co 0 !�_)t co C) (X)
I Ck r-
r': CQJIT C! 'q I QQ I (Cii 'In
!to
00 00 C14
q ! cc�
c')
0
C4 C'j
c,4 N
CQ171MIC
C� Cli LO
i
(D 010
�2101cy)
cl� cq
Lo
O�
a
cri
cr� M
co P
61* c
C'J I W 1'a 1,Z) 1 1 LO
UY01W !I ;; '�;
r- M
co
6a
C'j 'IT V71 ID CO
V� U) "
"il
,
M
tP, V,
61 Lo •M co 0
C:) -
IQ C� (q C� .
0:1 0
10 Of M. C) C) M
'P "q Cl) 11) IS M
1 m 9 1
0 0
0 q
O100 101M
MIMICN
C14
r-- i co
(0
(D
"T "1 10
> C14 C, W CQ1 N, 11
d
.1 .
U) co,
<0 f�_ Q cyi i CO' �o LO r� 0)
w (01�0 C, CQ CD
��l I 1 co f �o
C-i U) to
1*
(D
co
(D M C6 C.� tn
cli N 0
9,
I C'?
(6 CD Cl)
11
0 M 0 (D
-
06 CO C)I;:
I C'� 'q IQ, C�j ED
C) " M
-;
0 co
(D
C06
co 0
CY) (D H LO
C2 0
1? 19
M
1(i
t-:
fn U) 641 C'41
I I ('� 1 ,,
'M; ;�
L6
�2
to
ED Lo C� 1
n (p
CD JCOIO NIMI
8 c-, •1 "o 1 Lo" ON 2) TO c-,
Cl) C) C>
C, 0
L_j
0 1-
0
0 co 10) 1 M U-)
c)
W �D (N Ir co
0 Gq (0
NIW 10
(D Cq Co Lr) M c6
'o cloi-ImIC61co Col. 01CM)
Mo 1--i
CM0 LMo L"
(D
q I? CN
1
0 co C6
C'4 CN I C')
(D (D M
'o * ' I c'),
CO 0 c')
M
co*
CN
'i
0 0) �T IT
T OD IQ 1 C'� co 1 10
(D (D CN, Q) 1
C! c!
:�
Cil ci
"i
100 i
1� V)
(1)
(131(1
C') CD
�>
C� 1 V7 CD
V: U) M
w
7 64
it
(D CNICDI(o 0) 8 4
IQ Lx! 0 0)
CD, M
NU) W_ �ro_ 'PD_ Ot 0. 00 111) 1 C) I M 1 r-- �01V I CO
co �q (N
CO co
co 0 0
C? 9 0
CD, C�'
9 ()
0, M "0'
OI(�)1tn1cc'?)1Lq
0 M
ly�
11�
m
CL
1� cli
C I
619 6% 0"
M CO co cli (D 4 C616
.1R,
gR U) V_
Q, (D CO CL11 00 (D
b9 C'� C) 0
00 00 04
Ili cc)
0 6
c')
04
6 cyi P_ (N
C'4 CN M
C'! (Y)
(D C) V)
co
M
C14
tc!
w
10
09
C) (D (61cfl� (N cli
v) 1 1 t" LO E4 N bi
C0.1
69 6�'
N I'
Q�
I
(N
I,
C14 En to 0 0) 0
0 '1: (q
'o C LO
M irZ. 4r- 1
, . �C, 11 C, 11
_j" C016i-
C�O, i,4,;7 c - i L.
Lq C� I IM, 18 •12 Irl- 'I'D 1 0 I'T
CV 0 (,b
M 0 CIO
1.0
ID
- C11 C-
0
-I- Y)
.T '2
�2 C)
00 Iq ct
0c) co (D i
C'� uj CO I (N 0
Y) '0 1,C)
C.co) 0-0
o I
'Cy�)
01 C"Y')
6 Cl)
(0 10 (1)
U)
CY) r- -IM
(NICN
'Q �; (D (61 C'i U1, 1
w 64Jwj�j 1
11 11
('N V)
lv�
CO C'�
W, V�
R
Q;,
"q
cv
V),
;Lo
C>
0i W 0)
C) 'q�
c 0 "yo) Loo C') CIS IM, i 1. 1 I'll,
OD w (,o- z Cj L")Ia
-.I(D 0
T L-
L"c"-
co1co co I
C') 1 1
F_ E,
r_: C6
r'_ co
' T I") " ('-
IT EN CID
pa "C'
wi
L"
M �o C'o TO I Q, IR I'M, 1 18112 1 "Do 1 �_D '-T
2 '6 Ii
"D 1.10
6 1
100
'-)
I'l . J ID
.12110
C-i
N3
co C,
R
03 1 1
N'
�N3�69f
06":5
C�
Ni INiIN)I69l N; 1M N3
N,I-1
64 N3
V,
CD
co
co r-
V 1
, colc�i v
s' I m 1'. !.6
C, 0 'o M
00 I'D_ SO CO3 IM, 'o co !�?Ico ID CD
cli (6 1,6 16 i.� .5 161,6 1 1
Scl
c-,
"'o
<D co
w
C co;m
:4,
"� 1616
-'r L-". -'I Or 1 R, 1 1 12. P2 T 1 2 111:111, .113 100
M 16 61
1 CNO N.
ofold
211 N
'616 C�16
I
6 C6
01co
(1i
'r
C;
a
co -i .6
Ott,
-1 1 lc'�" I
to NiIr
's
Iq cl�
ot
Iq C:
1'�q
cn
C4
It,
Ul �, 1 1,;'
X
V)
M
E
co
17� 01
I (D
W
-1 .1 1,21 SIC
0
c':
0
cc, =3
> eU
ID
E
E Uo-
IWD 'D'
ILOL Q-J jj 1 o
I CLI-61 �V_
op
w
i
w
p
>
< C aw�
.0
w
u 2
I
'.' 0 rn C
'D
E
C
ID
E
E E
0 0 8 2
NI ICI NE E w I
D -
u Z� I
� a) c 1
I fll
'N
-0
c
L
LU
0 0
2
I< C) 0 u io 1LU
1 L 0
1 (D 0
Of
I= (01 (D w
co 1i Cot a-
2
uj
I
o
I
Five Year Pro-Forma Projection: High Yield
Accounting & Banking
Year 1
Year 2
Year 3
Year 4
Year 5
Cash Flow
Forecast
Forecast
Forecast
Forecast
Forecast
$112,486.40
Net Cash Flow
ornmissions
$96,535.20
$104,912.68
$113,512.08
$122,333.40
$131,376.64
Market Vallue
617.09
$22,276,016.44
$24,558,753.20
Income
Room Revenue
$4,826,760.00
$5,245,634.00
$5,675,604.00
$6,116,670.00
$6,568,832.00
nce & Meeting
$175,000.00
$200,000.00
$208,000.00
$216,320.00
$224,972.80
Miscellaneous
$186,000.00
$193,440.00
$201,177.60
$209,224.70
$217,593.69
Gross Income
$5,061,760.00
$5,508,034.001
$5,948,500.00
$6,400,481.84
$6,863,996.31
Exoenses
Accounting & Banking
$20,000.ob
$28,000.ob
$39,200.00
$54,88000
$76,832.06
Cash Flow
vertising & Marketing
$125,000.00
$100,000.00
$104,000.00
$108,160,00
$112,486.40
Net Cash Flow
ornmissions
$96,535.20
$104,912.68
$113,512.08
$122,333.40
$131,376.64
Market Vallue
617.09
$22,276,016.44
$24,558,753.20
$26,858,907.48
$29,160,293.21
Debt Service Ratio
epair & Maintenace
$19,000.00
$19,760.00
$20,550.40
$21,372.42
$22,227.31
Office Supplies
0,000.00
$20,800.00
$21,632.00
$22,497.28
$23,39717
upplies & Breakfast
$132,535.20
$140,912.68
$149,512.08
$158,333.40
$167,376.64
ephone
$10,000.00
$10,400.00
$10,816.00
$11,248.64
$11,698.59
Conference Coordinator
$85,000.00
$88,400.00
$91,936.00
$95,613.44
$99,43798
ening/Maintenance
$39,420.00
$40,996.80
$42,636.67
$44,342.14
$46,115.82
ncierge/BelINalet
$21,900.00
$22,776.00
$23,687.04
$24,634.52
$25,619.90
ront Desk
$144,540.00
$150,321.60
$156,334.46
$162,587.84
$169,091.36
Housekeeping
$267,
.60
$301,23454
2
Shift Managers
$55,480.00
$57,699.20
$60,007.17
$62,407.45
$64,903.75
Management
$440,642.72
$549,119.71
Benefits
$2 08,763.41-717
$221,014.87
$233,377.78
$246,137.56
$259,302.98
Payroll Taxes
$156,572.60
$165,761.15
$175,033.33
$184,603.17
$194,477.24
Insurance
$50,000.00
$52,000.00
$54,080.00
$56,243.20
Property Taxes
$183,600.00
$187,272.00
$191,017.44
$194,837.79
Total Expenses
1 $2,779,744.031
$2,946,292.111
$3,124,243.381
$3,311,707.481
$3,610,562.59
Cash Flow
rojected Debt Service
$1,255,984.28
$1,255,984.28
$1,255,984.28
$1,255,984.28
$1,255,984.28
Net Cash Flow
$1,026,031.69
$1,305,757.61
$1,568,272.34
$1,832,790.08
$2,097,449.44
Market Vallue
617.09
$22,276,016.44
$24,558,753.20
$26,858,907.48
$29,160,293.21
Debt Service Ratio
Income and expense for the pro-forma projections are based on area market and real operating expenses of
Crowne Plaza hotels and other north Washington state properties.
_ ��`
Occupancy
Room Rate
RevPAR
Room Supply
Room Demand
Room Revenue
Room Supply
This Year
%Chg This Year %Chg
This Year %Chg
This Year
%Chg This Year
%Chg This Year %Chg
This Year
%Chg This Year
%Chg
This Year %Chg This Year
%Chg This Year
%Chg This Year
%Chg
Year Month
1996 Jan
36.6
54.78
20.07
19,189
7,030
385,100
1996 Feb
45.9
57.36
26.32
17,332
7,954
456,203
1996 Mar
54.9
60.73
33.33
19,189
10,531
639,534
1996 Apr
68.2
62.90
42.92
18,570
12,670
796,969
1996 May
70.3
67.82
47.67
19,189
13,487
914,727
1996 June
82.9
74.55
61.80
18,570
15,394
1,147,547
1996 Jul
91.1
99.80
90.90
19,189
17,478
1,744,242
5.0
30.85
-7.4
19,189
0.0
9,283
-11.9
1996 YTD
64.4
7 147-
46.36
131,228
84,544
6,094,322
36.45
-15.1
18,570
0.0
10,562
-16.6
676,839
1996 Aug
92.2
90.87
83.78
19,189
17,691
1,607,581
1996 Sept
81.7
81.25
66.42
18�570
15,180
1,233,417
1996 Oct
61.5
71.18
43.75
19,189
11,794
839,440
1996 Nov
43.2
65.16
28.17
18,570
8,027
523,056
1996 Dec
32.3
61.64
19.93
19,189
6,204
382,419
-8.4
13,240
-24.2
1,319,697
-24.3
1997 YTD
53.5
1996 Total
63.5
74.39
47.23
225,935
143,440
10,670,2
Occupancy
Room Rate
RevPAR
Room Supply
Room Demand
Room Revenue
This Year
%Chg This Year
%Chg
This Year %Chg This Year
%Chg This Year
%Chg This Year
%Chg
Year Month
1997 Jan
33.8
-7.7
60.02
9.6
20.26
0.9
19,189
0.0
6,477
-7.9
388,762
1.0
1997 Feb
33.5
-22.7
67.88
18.3
24.13
--8.3
17,332
0.0
6,161
-22.5
418,211
-8.3
1997 Mar
48.4
-11.8
63.77
5.0
30.85
-7.4
19,189
0.0
9,283
-11.9
591,979
-7.4
1997 Apr
56.9
-16.6
64.08
1.9
36.45
-15.1
18,570
0.0
10,562
-16.6
676,839
-15.1
1997 May
59.8
-14.9
76.24
12A
45.55
-4.4
19,189
0.0
11,466
-15.0
874,133
4.4
1997 June
66.8
-19.4
85.38
14.5
57.00
-7.8
17,010
-8.4
11,356
-26.2
969,578
-15.5
1997 Jul
75.3
-17.3
99.68
-0.1
75.08
-17.4
17,577
-8.4
13,240
-24.2
1,319,697
-24.3
1997 YTD
53.5
-16.9
76.43
6.2
40.91
-11.8
128,056
-2.4
68,545
-18.9
5,239,199
-13.9
1997 Aug
88.6
-3.9
103.39
13.8
91.62
9.4
17,577
-8.4
15,576
-12.0
1,610,414
0.2
1997 Sept
66.6
-18.5
92.33
13.6
61.53
-7.4
17,010
-8.4
11,335
-25.3
1,046,602
-15.1
1997 Oct
50.4
-18.0
71.07
-0.2
35.84
-18.1
17,577
-8.4
8,863
-24.9
629,899
-25,0
1997 Nov
38.5
-10.9
65.88
1.1
25.37
-9.9
17,010
-8.4
6,551
-18.4
431,609
-17.5
1997 Dec
32.1
-0.6
66.53
7.9
21.37
7.2
17,577
-8.4
5,646
-9.0
375,612
-1.8
1997 Total
54.2
-14.6
80.10
7.7
43.45
-8.0
214,807
-4.9
116,516
-18.8
9,333,335
Occupancy
Room Rate
RevPAR
Room Supply
Room Demand
Room Revenue
This Year
%Chg
This Year
%Chg
This Year %Chg
This Year
%Chg
This Year
%Chg This Year
%Chg
Year Month
Year Month
1998 Jan
38.1
12.7
64.88
8.1
24.73
22.1
17,577
-8.4
6,699
3.4
434,622
11.8
1998 Feb
48.9
37.7
70.51
3,9
34.50
43.0
15,876
-8.4
7,768
26.1
547,688
31.0
1998 Mar
49.8
2.9
72.86
14.3
36.25
17.5
17,577
-8.4
8,746
-5.8
637,215
7.6
1998 Apr
52.3
-8.1
73.01
13.9
38.19
4.8
17,010
-8.4
8,898
-15.8
649,676
4.0
1998 May
61.9
3.5
83.14
9.1
51.43
12.9
17,577
-&4
10,873
-5.2
904,002
3.4
1998 June
65.6
-1.8
90.17
5.6
59,17
3.8
17,010
0.0
11,163
-1.7
1,006,564
3.8
1998 Jul
74.6
-0.9
119.07
19.5
88-80
18.3
17,577
0.0
13,108
-1.0
1,560,762
18.3
1998 YTD
56.0
4.7
85.35
11.7
47.76
16.7
120,204
-6.1
67,255
-1.9
5,740,529
9.6
1998 Aug
87.1
-1.7
11.51
11.7
10.55
b.7
17,577
0.0
15,301
-1.8
1,767,453
9.8
1998 Sept
77.8
16.8
89.00
-3.6
69.29
12.6
17,010
0.0
13,242
16.8
1,178,600
12.6
1998 Oct
52.3
3.8
76.74
8.0
40.11
11.9
17,577
0.0
9,187
3.7
705,041
11.9
1998 Nov
35.9
-6.8
69A1
4.9
24.78
-2.3
17,010
0.0
6,099
-6.9
421,488
-2.3
1998 Dec
31.6
-1.6
64.68
-2.8
20.47
-4.2
17,577
0.0
5,563
-1.5
359,831
A.2
.1998 Total
56.4
4A
87.21
&9
49.16
13..1
206,955
-3.7
116,647
0.1
10,172,942
9.0
Occupancy
Room Rate
RevPAR
Room Supply
Room Demand
Room Revenue
This Year
%Chg
This Year
%Chg This Year %Chg This Year
%Chg
This Year
%Chg This Year
%Chg
Year Month
1999 Jan
31.8
-16.5
65.94
1.6
20.94
-15.3
17,577
0.0
5,581
-16.7
368,021
-15.3
1999 Feb
42.1
-13.9
69.30
-1.7
29.19
-15.4
15,876
0.0
6,687
-13.9
463,424
-15.4
1999 Mar
57.0
14.5
59.52
-18.3
33.93
-6.4
17,577
0.0
10,019
14.6
596,364
-6.4
1999 Apr
57.8
10.5
69.98
A.2
40.43
5.9
17,010
0.0
9,827
10.4
687,739
5.9
1999 May
68.7
11.0
75.13
-9.6
51.64
0.4
17,577
0.0
12,081
11.1
907,657
0.4
1999 June
76.7
16.9
87.04
-3.5
66.75
12.8
17,010
0.0
13,045
16.9
1,135,379
12.8
1999 Jul
81.5
9.2
110.77
-7.0
90.25
1.6
17,577
0.0
14,321
9.3
1,586,383
1.6
1999 YTD
59.5
6.3
80.28
-5.9
47.79
0.1
120,204
0.0
71,561
6.4
5,744,967
0.1 -
1999 Aug
87.0
-0.1
116.55
0.9
101.36
0.8
17,577
0.0
15,287
-0.1
1,781,677
0.8
1999 Sept
75.7
-2.7
97.56
9.6
73.83
6.6
17,010
0.0
12,872
-2.8
1,255,781
6.5
1999 Oct
61.2
17.0
80.48
4.9
49.23
22.7
17,577
0.0
10,753
17.0
865,373
22.7
1999 Nov
47.5
32.3
68.65
-0.7
32.64
31.7
17,010
0.0
8,088
32.6
555,260
31.7
1999 Dec
33.0
4.4
69.38
7.3
22.90
11.9
17,577
0.0
5,801
4.3
402,479
11.9
11.9
.1999 Total
60.1
6.6
85.28
-2.2
51.25
4.3
206,955
0.0
124,362
6.6
10,605,537=.3
2001 Aug
2001 Sept
2001 Oct
2001 Nov
2001 Dec
2001 Total
Occupancy
Occupancy
Room Rate
Room Rate
RevPAR
RevPAR
Room Supply
Room Supply
Room Demand
Room Demand
Room Revenue
Room Revenue
This Year
%Chg This Year
%Chg
This Year
%Chg This Year
%Chg
This Year
%Chg This Year
%Chg
This Year
%Chg
This Year
%Chg
Year Month
Year Month
2000 Jan
33.8
6.3
70.11
6.3
23.68
13.1
17,577
0.0
5,938
6.4
416,291
13.1
2000 Feb
44.2
5.0
69.29
0.0
30.65
5.0
15,876
0.0
7,022
5.0
486,543
5.0
2000 Mar
49.8
-12.6
72.02
21.0
35.85
5.7
17,577
0.0
8,750
-12.7
630,176
5.7
2000 Apr
62.5
8.1
75.61
8.0
47.26
16.9
17,010
0.0
10,631
8.2
803,819
16.9
2000 May
69.4
1.0
80.86
7.6
56.12
8.7
17,577
0.0
12,199
1.0
986,368
8.7
2000 June
73.7
-3.9
93.06
6.9
68.60
2.8
17,010
0.0
12,538
-3.9
166,803
2.8
2000 Jul
79.2
-2.8
116.55
5.2
92.31
2.3
17,577
0.0
13,921
-2.8
1,622,561
2.3
2000 YTD
59.1
-0.7
86.09
7.2
50.85
6.4
120,204
0.0
70,999
-0.8
6,112,5611
6.4
2000 Aug
86.6
-0.5
124.65
6.9
107.95
6.5
17,577
0.0
15,221
-0.4
1,897,373
6.5
2000 Sept
75.4
-0A
103.64
6.2
78,18
5.9
17,010
0.0
12,832
-0.3
1,329,905
5.9
2000 Oct
54.8
-10.6
79.83
-0.8
43.77
-11.1
17,577
0.0
9,637
-10.4
769,346
-11.1
2000 Nov
41.4
-12.8
74.13
8.0
30.66
-6,1
17,010
0.0
7,036
-13.0
521,563
-6.1
2000 Dec
35.4
7.3
72.58
4.6
25.68
12.1
17,577
0.0
6,218
7.2
451,310
12.1
2000 Total
58.9
.2.0
90.88
6.6
53.55
4.5
206,955
0.0
121,943
-1.9
11,082,058
4.5
2001 Aug
2001 Sept
2001 Oct
2001 Nov
2001 Dec
2001 Total
Occupancy
Room Rate
RevPAR
Room Supply
Room Demand
Room Revenue
This Year
%Chg
This Year
%Chg
This Year
%Chg This Year
%Chg
This Year
%Chg
This Year
%Chg
Year Month
2001
Jan
36.5
8.0
71,81
2.4
26.23
10.8
17,577
0.0
6,420
8.1
461,049
10.8
2001
Feb
37.6
-14.9
75.25
8.6
28.27
-7.8
15,876
0.0
5,965
-15.1
448,858
-7.7
2001
Mar
45.5
-8.6
76.86
6.7
34.98
-2.4
17,577
0.0
8,000
-8.6
614,916
-2.4
2001
Apr
54.3
-13.1
77.91
3.0
42.31
-10.5
17,010
0.0
9,237
-13.1
719,623
-10.9
2001
May
65.0
-6.3
83.03
2.7
53.96
-3.8
17,205
-2.1
11,182
-8.3
928,406
-5.9
2001
June
71.9
-2.4
94.53
1.6
67.95
-0.9
16,650
-2.1
11,969
4.5
1,131,388
-3.0
2001
Jul
81.2
2.5
112.95
-3.1
91.75
-0.6
17,205
-2.1
13,977
0.4
1,578,639
-2.7
2001
YTD
56.0
-5.2
88.113
2.4
.2.90
119,100
-0.9
66,750
-6.0
5,882,879
-3.8
2001 Aug
2001 Sept
2001 Oct
2001 Nov
2001 Dec
2001 Total
JOB COST• JOB -Port Angeles -001
LMAdludd
NUMBER OF ROOMS
146
DRAWS
TOTAL PAID
City of Port Angeles, WA
COST
ORIGINAL
REVISED
BUDGET
TOTAL
REQUESTED
VS. REVISED
ITEM - -- interior corridor
CODE
BUDGET
BUDGET
VAR
PAID
THIS PERIOD
BUDGET
LAND
01000.
S 11000,000.00
Accrued Property I'axes
01003
$ 13,600.00
T
—
$ 1,013,600.00
CONSTRUCTIO
Amortization Exii-nse
_0_100_4
$ 50,0()0.00
-T—nterest
01005
5 226,00.00
Bank Inspection Costs
01006
$ -
TOTAL CONSrj"
S 276,000.00
308 COST:
GENERALCOI
Accrued Au tf I ax Prep Fees
01015
5,000.
Attorney's Fees
�01_020
20,000.00
Advertising
01025
100,000.00
Insurance
01_030
40,000,00
Appraisal
01035
Office Salaries
01041
S 80.000.00
Superintendent
01042
S 75.000.00
-T-ay-f-oll I axes
01043
S 20,000.00
Payroll Services
01044
5 21.000.00
Security
01045
S _30,000,00
Payroll Health Insurance
01046
S 3900,00
Civil Engineering
01050
S 32.000,00
-1—
-1 opo, AL'I A Survey
01 051
-
-Phase 1
00-52
S 7,500.00
of Borings
01 053
$ 6,500.9-
-Survey-Job Site
01054
S
Survey-As Built ALTA survey
01055
S 3,100,00
any
01060
S 800,000.00
Bid and Permit Sets
01070
S 5,000.00
Energy Study
-0-10-80
$ 2,400.00
-Building Permit Lonlimi
0I-40-0
T_ 2,000.00
Concrete] esting
01410
S 4.00090
of Testing
01415
S 3,500,00
Construction Fence
olsool
S 6.000.00
Construction Trailer
015"
S 3,000,00
Storage Trader
01591
S 2.500,00
1 emporary I clep one o i e
-�01-600
S 10.000.00
I emporary Water
01610
S 3,000.00
Temporary Electric
6-16-25
7,850.00
_f
Refundable Deposits Utilities
01626
500.00
CleaningUl5ar
01710
9,500.00
isc.Txpense
01715
-6-17-20
S 10,000.00
-M-i -sc-. TIa_nrx_ 'pe n se
S 1.500.00
Misc. Site Expense
01750 ,
S 10.000.00
Misc. Expense'l-ravel
01760
S 42.000,00
Misc. Expense ca s -riteriamment
01765
S 6.000.00
-Dumpster
01800
.11 12.000.00
1 emporary 'Foilet
01805,
S 2,400.00
Sewer I ap Fee ( ), , ,
01810
S 150,000.00
'Iransporlat ion inipaelfeel onlirti—i
1812
S 50,0()0.00
TOTAL GENE
_S 1.567,250.00
SITE WORK
I
Grading/fill/Velention pond—
02210
S 120.000.00
Site Clearing--dcrno
02211
S 20,000.00
-Misc. Site or
-62-21-2
S 25900.00
ma rad
Fl 6ing.
_�_2215
12,000. 00
BlaslingfIrench work,
02221
S -
Lime Stabilization
02280
9 -
Rock Excavation
02300
S
Paving/Striping
02580
S 90900.00
Road Concrete
02581
S
_S
Curb & (jutter
-02-600
25,000.00
(juardrail--40'aprox.
2212
V_ 8,000.()0
Traffic Signal --62-601
$
-
Water Service-- 17 - ont
626-60
$ ff,_616.00
Rear water service
26601—
4,000.00
6" Fire Line& Hydrant
02661
S 15,000.00
Tap Fees
--0-2-662
_§_ 13,100.00
Add irrigation well
:
S 5,000.00
-Vault at Street or Siamese Connection
762-663
1— 12,000.00
Lawn Irrigation
02664
V_ 10,000.00
-Ti-o-im-S—ewerage System
02720
S 55,00000
Sewer Pipe out o m mg
--62-730
$ 7,000.00,
Retaining Walls
1 027351
S
Chain in Fence
j 028301
S
I
I
FI
30B COST: JOB —Port Angeles -001
LN[Adiasted
NUMBER OF ROOMS
1446
DRAWS
—TOTAL PAID
City of Fort Angeles, WA
COST
ORIGINAL
REVISED
BUDGET
TOTAL
REQUESTED
VS. REVISED
ITEM--interior corridor
CODE
--6-2831
BUDGET
BUDGET
VAR
PAID
THIS PERIOD
BUDGET
Temp Fence
2,100.00
Black Vinyl Fence
028501
17,000.00
LanaSCaping
_JTo_n&S_
029701
S 45,000.00
029711
S 3,000.00
Dumpster Pads & Fence
029721
S 6,600.00
Erosion Control
029731
$ 5,000.00
Construction Entrance—sidewalks
029741
$ 8,000.00,
Water & Sewer
2975
S 15,000.00
TOTA-U-SrMWORK
$ 533,420.00
DIRECT CONSTRUCTION
Manufacture Guestrooms
1000
S 6,180,406.00
Haul Guestrooms
1100
$ 100,000,00
Install Guestrooms
12001
$ 99,000.00
Termite Prespray
20001
S 3,000.00
Simpson Tiedowns/Brackets, etc.
21001
$ 20,000.00
Wire & Poly, Anchor Bolts, etc.
03000
$ 2,500.00
Slab & Sidewalks(M)
03111
$ 60,00.00
Slab & Sidewalks(L)
03200
S 50,000.00
Drill Caissons
03300
$ 60,000.00
Pout Caissons
03301
$ 60.000.00
Void Caissons
03302.
S 50,000.00
Concrete Pumping
03303
S 40,000.00
Gyperete
03304
$ 13,000.00
Masonry/Brick/Stone
03305
S 60,000.00
Metal Work/Stairs(L&M)
03510
$ 35,000.00
Misc. Labor
04210
$ 15,000.00
Framing(M)
05510
$ -
Framing(L)
06005
S 40,000.00
Misc Petty Cash Materials
06100
S 10,000.00
Heater Rental
06101
S 2,000.00
Trellis / Exterior Structures
add
S 150.000.00
Exterior Decks
add
$ 200,000.00
Roof Trusses
06102
$ 74,000.00
Floor TJI's
061031
$
Trim (M)
06190 1
$ 45,000,00
Trim Carpentry(L)
061"
$ -
Cabinets(M)
06200
$ 40,000.00
Insulation
06201
$ 71.000.00
RoofmgM
06405
$ 52,000.00
Roofing(L)
07210
$ 29,620.00
Siding(M&L)—
07300
$ 500,000.00
Doors/Windows(M)
073011S
20,000,00
Hollow Metal Doors
07411
S 165,000.00
Ext. Door Hardware
08100
$ 55,000,00
Interior Looks
08111
$ 5,000.00
Drywall(L&M)
08120
$ 55.000.00
Vinyl(L&M),
08130
$ 7,300.00-
Ceramic Tile & Office Tile
09260
$ 20,000.00
Carpet(M)
096501S
8,000.00
Painting(L&M)
096601$
15,000.00
Signs
096801
S 26,000.00
Bath Accessories
09901
S 12,000.00
Closet Shelving
104001S
3,500,00
Bath Mirrors
10800
$ 1.800.00
Hydraulic Passenger Elevators
10805
S 42,000.00
Sprinkler System with detector V.
10810
$ 75,000.00
Plumbing
14240
S 80.000.00
Fire Caulk/Collars
15330
$ 75,000.()0
FIVAC Units
15400
S 8,500.00
HNAC Grills
154011$
5,050.00
HVAC Cans
15500
$ 3,500.00
Electrical
15505
$ 45,000.00
Mechanical/Venting (In iv. Fans)
15510
$ 45,000.00
TOTAL DIRECT CONSTRUCTION
S 8,834,176.00
JOB COST: JOB —Port Angeles -041
LM Ad
NUMBER OF ROOMS
146
---'DRAWS
TOTAL PAID
City of Port Angeles, WA
COST
ORIGINAL
REVISED
BUDGET
TOTAL
--REQUESTED
--VS. —REVISED
ITEM - -- interior corridor
CODE
BUDGET
BUDGET
VAR
-PAID
;iiiIS PERIOD
BUDGET
FURNISHINGS & EQUIPMENT
Laundry Equipment
11110
$ 8,0()0.00
Laundry Chute
11111
S 3,500.00
Radios
11340
S 1,300.00
Gardall Safe
11350
S 1.000.00
Time Clock
11400
S 500.00
Satellite Dish
11450,
S 22,000.00
Vending Machine
11455
S 1,950.00
Appliances
11460
S 73.000,00
Telephone System
11470
S 32,000.00
Room Phones
11475
$ 3,500.00
Security System
11480
S 2,500.00
Key Machine/Blank/Box
11490
1 S -
Carpet Cleaner
Ilsool
S -
Computer
11510
S 5,000.00
Internet system
11520
S 24,000.00
Office Supplies
11520
S 6,000.00
Dishes
11521
$ -
Maid Room Equipment
11522
S 17,000.00
TV SETS with Bracket
11530
] S 35,000.00
Furniture /Case Goods
12600
S 21,000.00
Sleeper Sofas
12605
S 30,000.00
Linens
12610
S 9,600.00
Bedspreads
12615
$ 6,800.00
Misc. Operational Items
12640
$ 8,600.00
Cleaning Supplies
12670,
S 1,000.00
Misc, Expense
12680
S 11,000.00
Mini Blinds
12681
S 1,200.00
Fire Extinguishers
126"
S 3,200,00
Finishing Team
12700
S 10,000m
Building Contingency Fee
12705
$ 30,000.00
TOTAL FURNISHINGS & EQUIP.
S 368,650.00
ARCHITECTURE AND ENGINEERING
S 800,000.00
CONSTRUCTION MANAGEMENT FEE
5 683,221.00
MW SERVICES, OH&P
S 1,708,052.00
LLC MANAGEMENT FEE
S 250,000.00
CONSTRUCTION SALES TAX
$ 713,416.00
CONTINGENCY
S 445,885.00
TOTAL MISCELLANEOUS FEES
S 4,600,574.00
RECAP of PROJECT COSTS
LAND
S 1,013,600.00
CONSTRUCTION LOAN COSTS
S 276,000.00
TOTAL GENERAL CONDITIONS
$ 1,567,250.00
TOTAL SITEWORK
s 533,420.00
TOTAL DIRECT CONSTRUCTION
S 8,834,176.00
TOTAL FURNISHINGS & EQUIP.
S 368,650.00
TOTAL MISCELLANEOUS FEES
5 4,600,574.00
SUBTOTAL
$ 17,193,670.00
TOTAL COST
S 17,193,670,00
Cost per Room
$ 117,764.86
Cost per Room - Land & Loan Costs
$ (108,931.99)
�
�
UL -
The Marketing Plan enclosed herein was produced largely by Rick Hmtformer Executive Director of the
| North Olympic Peninsula Visitor and Convention Bureau. Mr. Hert was engaged due / to his
' oonokjenab|eknowledge of the h)uhsmand viodorn�arketonU)e Peninsula, and based in large part upon
.�
his overall understanding of the Port Angeles area.
Rick was assisted in preparation of the report by Jayand Patel of Rodhe |nvamhnentm' one of our main
investors, and by Randal Jay Ehm AIA, Developer and Architect of this project.
The budget information requested bv the City of Port Angeles is reflected in the text uf the Marketing Plan
as it identifies our commitment to employing both o Marketing Coordinator and a Marketing Assistant.
These positions will represent o salary commitment cf $O5.0O0inthe first year with adjustments upward
in future years. This amount is also reflected in the Business Plan under the heading and "Conference
Coordinator."
-
The Business Plan also contains a line item for "Advertising and Marketing." The first year commitment
for our advertising budget is $125.000. Six Continents Hoha|n has also owrnnoiMad to an annual
�
expenditure of approximately $ 50,000, and offers its Worldwide Reservation System, the participation
�
of its corporate sales team, and the direct involvement of a Regional Sales Director in further support of
our marketing efforts.
Our Implementation Strategy is included in the text of the Marketing Plan
� (\\
� �
Marketing * M
Rick Hert _•
•1• Nygren Place
Port Angeles, . P*
Phone: 360-457-3802
with
• o , , IMEMIM
0
Ehm Architecture
2707 California
Washington 9811i
206545 1783
PortAngelesConferenceCenter Pro' 1 04/04/02
EXECUTIVE SUMMARY
1=93x=
Marketing a new hotel and conference center in the State of Washington and the
Pacific Northwest will take high energy, finesse and targeted marketing
strategies. It is our goal to take advantage of the our proximity to Victoria
Canada, not only from the pass-through traffic of tourists on their way to Canada,
but from the Vancouver Island / Saanich Peninsula market which is home to
approximately 250,000 people. It is also our intent to have a multi-faceted
comprehensive marketing plan attracting guests to our facilities year around.
We believe we can increase current levels of tourism for Port Angeles and the
surrounding area. We plan to accomplish this mission by targeting new business
in convention and group sales, tapping into the group tour market, attracting
Canadians, and increasing visitation to Port Angeles by free independent
travelers. We have budgeted for two sales people, a Conference Coordinator and
a Marketing Assistant at a combined salary of $85,000 per year, plus an
additional $125,000 a year for direct advertising and marketing expenses. Six
Continents Hotels will expend approximately $100,000 marketing this facility on
an annual basis, through direct expenditures and through the involvement of an
assigned Regional Sales Manager.
Conclusion
The new hotel/conference center will be quite different from other facilities now
serving Port Angeles and the Olympic Peninsula, therefore having a unique
opportunity to attract a different kind of clientele than currently stays in the area.
This will be a first-class facility with strong amenities and a well-trained,
customer-friendly staff catering to an upscale clientele. The savings that we can
realize through our design-build approach, together with the Lodging Tax
Incentive offered by the City of Port Angeles, allow us to offer the only full-service
conference facility in the city that can accommodate groups of up to 728 people.
Vision/Mission
It is the vision of the Developer to build and operate a four-star Hotel and
Convention facility, and to successfully grow our tourism numbers while
minimizing negative impact on existing businesses. Our strength will be in
providing a full-service facility with a name-brand restaurant for fine dining and an
upscale bistro, along with state-of-the-art conference facilities. We will excel in
customer service, we will offer a strong management team, and we will engage in
innovative marketing.
PortAngelesConferenceCenter Page 2 04/03/02 113
n
n
E
WASHINGTON STATE TOURISM MARKET ENVIRONMENT
In the millennium year, tourism generated $ 476 billion in receipts internationally
and the overall industry grew by 7.4 per cent, "its highest growth rate in nearly a
decade and double the increase in 1999". (World Tourism Organization, 2001).
In 2001, tourism was expected to increase from 2.5 to 3 percent internationally.
With the attacks on the World Trade Center and the Pentagon Building late last
year, travel was severely affected. The estimated growth rate has been reduced
to 1.5 to 2 percent (World Tourism Organization, 2001).
In the first quarter of 2001, 9.5 million foreign visitors traveled to the United
States. These visitors contributed $18.5 billion to the United States economy
during that same quarter (Tourism Industries, 2001). In the latest statistics for
Washington State (1999), ten billion dollars were spent by travelers generating
$2.3 billion in payroll, and supporting 126,800 jobs (Eqn an, 2000). From 1991
to 1999, travel spending in' Washington State has grown 4.7 per cent annually
and at twice the rate of inflation. In-state residents accounted for over one-half of
all visits, but accounted for less than 40 percent of travel spending. This
incongruity is explained by the higher number of one day trips made by in-state
residents (Runyan, 2000). After September 11, 2001, the projections for tourism
have dimmed as individuals (especially Americans) are not taking long haul trips.
These statistics reveal an industry that is expanding and that is expected to
continue to expand. The terrorist attacks on September 11, 2001 caused many
travelers to cancel reserved trips, and caused others in the planning stages to
alter their plans. The International Air Transport Association reported last year
that passenger service on international scheduled services declined 17 percent
in September 2001 compared to September 2000. But in October, tour operators
reported that, "in the absence of any new bad news, business continues to
improve on a daily basis ... bookings now outpace cancellations, and demand is
shifting away from Florida and East Coast destinations to the West Coast and
national parks" (TW Crossroads, 2001). Even with recession and safety fears,
the tourism industry will continue to be a growth industry. Vacations will be taken
within Washington, Oregon, and other nearby states. The cruise industry now
uses Seattle as a point of embarkation and anticipates a high occupancy rate on
most cruises to Alaska for the summer 2002.
The tourism industry internationally, nationally, and statewide, however, has
some perennial problems. RLiley (1991, • 10) succinctly outlines some "universal
themes: Demography and the shrinking employment pool and labor shortage;
the tourism industry's image as an employer; compensation, benefits, and reward
systems; recruitment, retention, and staff turnover; education and training in
college and industry; skill shortages in upper level positions; not linking human
resources with development • products and marketing strategies and the quality
of service; poor management and planning information related to human
resources; and reactive planning to human resources issues".
PortAngelesConferenceCenter Page 3 04/03/02
MARKETING STRENGTHS, WEAKNESSES, OPPORTUNITIES AND CHALLENGES
Hotel/Conference Space
Internal Strengths:
• Completion of a $15 million hotel and flexible conference space
will be the newest property on the North Olympic Peninsula.
0 The property will serve an unfulfilled need for a new upscale
hotel/resort.
• The hotel proximity to Victoria ferries and downtown services is
very good.
• We can tap into a large population base within a five-hour travel
radius.
Weaknesses:
• Many new conference spaces will be coming online around
Washington State, increasing competition for groups and
meetings.
• There is a current trend toward business people staying closer
to home for meetings. This facility will initially represent an
unknown product.
External Opportunities:
• Our location with respect to the water and trails.
• We will be offering a franchise property leveraging worldwide
marketing, and will have the ability to offer upscale conference
and meeting space that is not currently available on the North
Olympic Peninsula.
• We have existing relationships with organizations who have
already expressed significant interest in holding conferences at
this facility
Challenges:
• Establishing a working relationship with other properties in our
marketplace may take time.
• Achieving the support of the community is very important.
• Successfully marketing the property before opening to assure
success is critical.
• We will see several new meeting and convention sites coming
on line within the next two years with marketing departments
and handsome budgets.
• Our remote location, which will present some difficulty as we
seek to attract groups and meetings.
PortAngelesConferenceCenter Page 4 04/03/02
MARKETING MISSION STATEMENT
Providing guests with the best possible service, and offering them a good value
for their money will create a memorable and totally enjoyable experience for
consumers within today's hectic and busy society. We believe our primary
responsibility is to the customers who use our products and services.
In carrying out our day-to-day business we will strive to:
• Treat our employees with respect, consideration, and fairness.. These are the
keys to our success in creation of a positive working environment.
Adhere to the philosophy that our customers are "Number One," to be treated
as though they are invited guests in a private home, and that they are more
than welcome.
Be considered as a leader in the lodging industry and a recognized purveyor
• congenial hospitality in the community.
Through a long-term commitment to this mission, we will become known as a
company that cares about its customers and as one that offers only the very best
• quality and service.
Our customers, our vendors, and our employees will recognize our hotel and
conference facility as one that offers the finest foods and services, as a facility
that is totally committed to customer needs, and as a company that is
consistently focused upon producing positive results in the most professional and
efficient manner possible.
PortAngelesConferenceCenter Page 5 04/03/02
MARKETING GOALS
T1W0TrM= . 0
gr ;ML11101TIVAIN • •
• Promote the facility as a flagship for MMP. Invite hospitality executives
worldwide to the facility for personal tours. Encourage visitation by
potential franchisees as an example of what MMP can offer in terms of
quality and amenities.
• Promote the facility as a flagship for Crowne Plaza Hotels and their
conference capabilities. Offer the facility for tours and conferences for
Six Continents Hotels staff, their executives and their franchisees.
• Conferences and meetings: Within four months of opening, we will have
booked at least 10 new groups from outside our area for 2003. By
working with local contacts, we will open a new market for groups of up to
728 participants.
• Group tours: In the first twelve months of operations, we will send flyers
to tour companies of the American Bus Association, the National Tour
Association and the Washington State Tour Task Force offering a special
for the first ten tours that book our facilities.
® FIT (Free International Traveler) Market: Within six months of opening,
We will augment Six Continents Hotels' Worldwide Reservation System
by utilizing several well-defined online reservation services including
Expedia, Orbits, Marcus Yearout, and others.
o Calculate the lifetime value of potential new customers and to determine
value of loyalty programs.
Po rtA ng e lesCo nfe re n ceCe nter Page 6 04/03/02
i I/.
MARKETING OVERVIEW
Our corporate objective is to focus on targeted, direct sales activities in
conjunction with print-media campaigns, direct mailings and traditional
approaches. The intent is to identify demand generators that exist among our
competitors in the conference market set and personally solicit them. Our method
of marketing a property contains the following key steps:
• Research occupancy, rate and market segmentation trends for the past
several years for the subject competitive set.
• Research Crowne Plaza contributions, properly position rate categories
and database information in the central reservation system. Contact Six
Continents support and determine how effective the company has been in
exploiting this area and the degree to which this property can participate in
their special programs.
• Define an appropriate competitive set in the local market. Complete an
objective analysis recognizing strengths and weakness by property and by
market segment.
• Obtain STAR (Smith Travel Research) data for the competitive set and
evaluate overall market demand and the Crowne Plaza Hotel's yield and
penetration history.
• Identify key demand generators in the market and interview decision-
makers relative to their perception of the Crowne Plaza Hotel.
• Target those demand generators that will buy our product and do
"whatever it takes" to secure their business.
Develop a documented approach (including sales activities) by person an,#'
track compliance.
Keep the sales staff focused on what they are selling. Avoid targetiniv
unrealistic clients or spending an inordinate amount of time on "Ionro
shots."
This approach is basic, but our experience has proven that given solid building
blocks, a concerted and well-focused direct sales effort will significantly impact
market penetration. This approach, coupled with front desk and reservations
sales training, will provide a productive and cost-effective method • increasing
hotel revenues.
Market Segment
This facility will primarily target attendees to meetings and conferences being
held at the facility, restaurant patrons seeking a new dining experience, and
visitors who are drawn to the area through our intensive marketing campaign.
PortAngelesConferenceCenter Page 7 04/03/02
STRATEGIC ALLIANCES
Our hotel and conference center needs to form some very important relationships
with other hospitality members to help successfully market this facility. The
following is a list of suggested alliances:
• Victoria Lodging industry for referrals and package programs
• Seattle Lodging industry for referrals and package programs
0 Local organizations and service clubs to attract state and regional groups
0 Local government and military contacts to attract regional and national.
groups
• Concierge serving upscale clientele in Victoria and Seattle
• Peninsula Golf Course & Dungeness Golf Course creating golf packages
• Local kayak and raft companies creating adventure packages
0 Port Angeles Chamber of Commerce & the North Olympic Peninsula
VCB for referrals
0 Seattle King County VCB for referrals and contact list
• Float planes, ferry service to/from Victoria to create packages
0 Concert and Special Events Promoters for musical, civic and cultural
events between major conferences
• Royal Caribbean and Norwegian Cruise Lines to increase visitation of
cruise ships to Port Angeles with strategically-timed festivals
0 Yachting, bicycling and environmental organizations for scheduled visits
and guided tours.
• Native Indian Tribes and Housing Associations
• Industrial and Manufacturing Companies
0 Universities and Colleges
* Medical Centers and Medical Organizations
0 Government Agencies
• Upper-end Social Groups
® Clubs and Collectors
® Fraternal Groups
• Recreational and Athletic Teams
® Entertainers and Their Agencies
-P Local Civic Organizations
® Charitable Institutions
® Visitor Centers
o Teachers' Associations and Other Unions
I r
PortAngelesConferenceCenter Page 8 04/03/02
MARKETING STRATEGY
Port Angeles, Washington has earned good name, recognition, largely due to its
prominence as the gateway to Olympic National Park. Port Angeles also serves
as a gateway to Victoria, Canada. Port Angeles is an easy drive from all of the
major cities in the Pacific Northwest and is served by a major highway. Port
Angeles is also served by a reliable airline with sufficient space, adequate flight
schedules and close proximity • air to SeaTac International Airport.
Market Analysis
Our focal sales and marketing goal for the Crowne Plaza at Port Angeles include:
• To position the property as an "affordable" corporate and transient hotel
offering clean, well-appointed guest rooms and yet very
favorable/competitive rates versus the competition. Focal marketing
programs:
• This positioning effort would be targeted at all primary market segments
known to be providing strong volumes of room night business in the
marketplace.
Our strategy would be to increase guestroom revenues through a variety
of sales and marketing efforts. Key emphasis would be placed on meeting
the proper price points in the room night segments, while at the same time
improving room night capture in the available commercial accounts known
to frequent the market. Secondary revenue generators will be the
conference facility.
Overall rate strategies will center on finding and achieving the correct
price point in the market to achieve fair market share. Pricing strategies
should revolve around maximization of rates in all room night segments
during peak time periods. Conversely, during low demand time periods,
emphasis should be directed toward providing highly competitive rates in
order to influence higher occupancies and optimal room night mix, which
in turn will provide peak revenue opportunities.
In this regard, it would be our intention to incorporate our requisite yield
management programs into the daily operations of the front desk sales
areas. These programs in particular would provide the support systems
needed to ensure improved rooms department revenues and occupancy.
Moreover, we will analyze current trends, provide key account evaluations
and concentrate on repositioning current rates and strategies and direction
of the existing sales and marketing department and redefining, then
implementing, additional new directions that will contribute to improved
success and revenue growth for the hotel.
04/03/02 Y_,
1.41
I 1 1 I
��= I
TTe will implement the following marketing programs and strategies designed tit
enhance market penetration and profitability:
• Focus sales efforts on expanding penetration in the special
corporate/preferred guest segments to drive the price point of the overall
commercial segment to higher levels.
• Broaden solicitation efforts in the Government and related vendor
segments in order to increase capture from its current room night level.
Due to our contacts with numerous hotels in surrounding states, we will
maintain an extensive database of these government contractors and their
respective suppliers.
• Review the corporate rack rate to ensure it is at a level commensurate
with the price point in the market in order to promote room night capture
via the Six Continents system.
• Emphasize sales solicitation activities in the immediate area to quickly
increase utilization by local area demand generators.
• Establish a key account penetration program to maximize room night
production from established users.
• Establish realistic group room night ceiling commensurate with targeted
average rate goals.
• It is our estimation that rate and occupancy opportunities can be achieved
through improved and more sophisticated daily analysis of demand
patterns that will occur at the property.
• Strengthen and intensify the local transient and corporate sales efforts.
• Development of a hotel Secretarial Club newsletter for distribution to the
local corporate community.
• Establishment of Reservation Department nightly call program to monitor
and solicit local hotel referral business during competitor sellout time
periods throughout the year.
• Implement ongoing "turn-down" analysis report to further fine-tune market
mix and average rate yields during all time periods of the year.
• Audit and evaluate all current sales call schedules, history of bookings
resulting from past visits, and bottom line productivity of local accounts.
• Develop new and improved sales collateral materials, if necessary, and
distribute it if required.
• Strengthen tour and travel programs through increased solicitation and
promotions to known producers both locally and regionally.
• Develop targeted sales solicitation campaigns to our Strategic Alliances
outlined earlier.
Po rtAng e lesCo nfe re n ceCe nte r Page 10 04/03/02
• Ensure the property is listed in ALL available travel industry hotel
directories nationally, internationally and electronically.
• Ensure the property in listed in all available corporate/travel meeting
planner directories for future years.
• Schedule an ongoing commitment to complete a total file audit in order to
update all active files and ensure proper documentation on all future calls.
Our advertising and promotion strategy is to position Crowne Plaza at the Pier as
the leading provider of upscale lodging on the Olympic Peninsula. We will utilize
several advertising mechanisms in various media, including newspapers,
magazines, lodging guides, travel and visitor brochures, televised programs and
networking with cooperative outside vendors.
We anticipate significant sales and profits from increased advertising and
diversity of services offered, and we will pursue the following objectives:
• Position our hotel/convention center as the leader in reasonable
accommodations on the Peninsula, with close proximity to city shopping,
adequate meeting space with a high level of quality, access to the Waterfront
Trail, adjacency to the Victoria Ferries and proximity to other regional
transportation centers.
• Increase our hotel and brand name recognition among regional businesses
and customers.
• Develop, through market research, significant information to continue with our
immediate and long-term marketing plans. In-room surveys offering future
room discounts will be used to improve service, to monitor customer relations
and satisfaction and to obtain contact information for future guest marketing
through postal and electronic mail, including:
■ Monthly email and snail mail flyers on promotional lodging activities and
limited-time special offers
• Promotions for awareness • the facility among significant industry groups
and potential conference groups
• Establishment of a corporate image that is professional, reliable, well-
positioned in the marketplace throughout the Olympic Peninsula and one
that is highly competitive in the Washington State Conference market.
111 11111111 � !111111111!11 1111111 loll 1111 111 I� I
04/03/02
r
SALES STRATEGY
1-*18hV12111W161 WIN
t*41404MMEOM M[0J1KMJMC!_
Generally, many consumers will become regular patrons after becoming familiar
with our facility. Accordingly, our facility will utilize a proprietary system of
research and response to ensure the maximum benefit from our advertising
dollars and from those monies contributed through the local Lodging Tax Fund.
For the next two years as a minimum, the company will focus on the following
growth strategies:
Mro � _
• Plan a sales blitz. Order giveaways and mementos with hotel logo, address
and phone numbers. Choose items that will stay in contact's office (candy
jars, "post-it" note pads or coffee mugs).
• Research and bid on meeting and convention appropriate for our conference
space.
• Cultivate local contacts to attract service clubs, fraternal groups and
government groups to our facility.
Issue press releases of grand opening, business events, groups booked ant'
special events sponsored
0 Place display ads in area lodging guides distributed throughout the Olympic
Peninsula, such as the PA Chamber Guide, the NOPVCB Guide, and
brochures similar to other travel industry promotional materials that are
distributed on the Washington State and Victoria ferries.
• Place advertising in the QwestDex and GTE Yellow Pages under appropriate
categories defining all of our services
• Secure advertising displays at the airport, on Washington State Ferries, and
on roadside billboards primarily on the Olympic Peninsula
• Participate in tradeshows that further our cause such as the National Tour
Association annual convention and Tourism Victoria special events.
• Obtain memberships with the PA Chamber, Seattle/King County VCB,
Tourism Victoria and the National Tour Association.
PortAngelesConferenceCenter Page 12 04/03/02
Research and Development
0 Meet with General Manager and Sales Director of primary and secondary
competitors. Site-tour each hotel and establish a referral and walk program.
• Contact primary and secondary competitors to research price points, features
and benefits. Obtain sales collateral and start a competitive information file.
0 Review trend reports and Smith Travel Research (STAR) report to provide a
baseline of comparable properties. Review in-room guest information guide.
• Meet with contacts at Convention and Visitors Bureau and Chamber of
Commerce. Obtain list of advertising and trade-show opportunities for
budgeting.
• Contact local Chambers of Commerce and obtain lists of the area's top
businesses and employers. Qualify key companies and individuals to create
our own mailing lists and labels.
• Solicit requests for information, and seek approval of targeted recipients
before sending electronic messages in development of a permission-based
campaign.
• Calculate the lifetime value of potential new customers, to determine value of
acquiring a new permission.
• Measure the result of each e-mail marketing blitz and test new approaches
periodically.
• Measure haw many permissions we receive and how much the permission-
based program changes behavior.
MEMO=,
Coordinate a market review with our Franchise Marketing Manager and
obtain franchise national media schedule. Discuss opportunities for radio and
print advertising to promote our hotel. Determine dates for next directory
printing deadline.
• Contact frequent guest club administration at franchise headquarters to order
mailing labels for direct mailer.
• Review central reservation database property information file. Forward to
central reservation database supervisor.
Contact each segment specialist for franchise worldwide sales staff to
determine what opportunities are available to promote our hotel at upcoming
tradeshows, future segment-specific directories or sales missions.
Po rtAn 9 e lesC o nfe re n ceCe nte r Page 13 04/03/02
F
Advertising
• The best way to reach our potential customers is to develop an intense
regional advertising campaign promoting Port Angeles, the Park and access
to Victoria for groups and their spouses and individual travelers.
• Review quality and quantity of sales collateral for this hotel including franchise
directories, frequent guest information, segment-specific flyers (such as
government rate for sales blitz), business cards and postcards for previous
guests.
• Develop a Sales and Marketing Budget, reviewing the STAR report carefully.
• Contact regional and national billboard companies to determine locations
available for contracting.
• Contact local Yellow Pages publisher and determine deadline for print
advertising.
Media and Public Relations
We intend to utilize additional forms of available media to promote the facility:
• Contact franchise frequent guest program administrator at franchise
headquarters to arrange to promote our hotel in the next member newsletter.
Solicit an article on our hotel as a feature story.
• Develop possible press releases for the coming year.
• Press releases of business events, grand opening, and groups booked and
special events sponsored.
• Select primary tourist and organizational publications with high specific
market penetration.
• Schedule adequate frequency of ads to impact market with corporate image
and product messages.
• Where possible, position advertising in or near articles on industry, product
reviews and appropriate editorials.
• Invite and host key media representatives to further our marketing.
• Take advantage of special high-interest issues of major publications when
possible.
• Maximize ad life with monthly and weekly publications that offer good shelf
life.
• To get the most out of our promotional budget, focus coverage on a
sophisticated upscale audience.
• Develop seasonal promotional specials and obtain local and Seattle-area
radio time and newspaper advertising.
PortAngelesConferenceCenter Page 14 04/03/02
New Directions in Internet and Electronic Marketing
•
Develop an e-mail marketing campaign, but make it tasteful and to the point.
Direct the campaign directly to specific contacts, rather than a bulk-mail
approach.
0
Outline the needs and strengths of the property, as well as the specific needs
of prospective clients.
•
Acquire and/or build an electronic database of qualified targets separated by
industry, region and specific needs for one-to-one marketing.
•
Create a strong database for electronic mail promotions.
•
Develop our facility website and provide appropriate links.
•
Continuously create and deliver "can't resist" content. Updated specials,
invites to special event like wine tasting, mid-week specials.
•
Structure the basic website to turn it from brochureware to a focused,
permission acquisition medium.
•
Develop a "bookable" website that gets travelers' attention and creates a call
to action. Review existing travel websites and review our listings or links
periodically. Verify that links or listings are accurate and comprehensive.
•
Consider pop-up advertising with an enticing, attention - grabbing design.
Special Events
•
Schedule special events between conferences.
•
Obtain local event calendar from the Chamber of Commerce and the VCB in
Port Angeles, Sequim and Victoria to schedule key conferences around event
dates.
•
Promote the facility as a venue for public events and community programs.
New Opportunities
• Establish a floatplane shuttle to Victoria, San Juan Islands and Seattle.
Consider also Vancouver, Bellingham, Bellevue, Tacoma and Anacortes.
• Consider hydrofoil shuttle to Seattle. Contact Victoria Clipper to determine
their intent.
• Seek increased visitation by cruise lines frequenting the area.
• Develop a relationship with the local Ranger Station and the National Park
Service. Hold campfire events and guided tours with park rangers.
• Obtain memberships to local golf clubs.
PortAngelesConferenceCenter Page 1 5 04/03/02
Join and participate in the local Chamber, Business Association and
Downtown Forward Committee the .
• Develop working relationship with Seattle, Victoria and Vancouver concert
promoters and coordinate for gigs in Port Angeles.
• Develop a rapport with local tribal leaders and offer programs and activities
that benefit local Indian/Native American tribes.
Develop and implement a dinner package offer from Vancouver, Seattle,
Bellingham and Victoria. Gauge potential interest in other communities.
MARKETING SUMMARY
We know that a sound marketing strategy is needed to implement one properly.
That is why our focus of this property is three-fold:
Consumer Focus
• Targets: Transient business travelers, groups, meetings, leisure travelers,
and people seeking full-service and luxury-class accommodations.
• Travel Occasions: Convention, corporate meetings, individual business
travel, vacation and sightseeing.
• Needs/Expectations: Traditional full-service upscale experience with
expectations based on heritage of the Six Continents name.
Demand
• The Port Angeles market is growing fast market in the lodging industry,
and the outlook for the future is promising for both business and leisure
travel.
• As emphasized by the local support, the City of Port Angeles, and other
influential establishments the city is in dire need of a product such as the
Crowne Plaza. With great visibility, an experienced develoOpment and
management team, and support from City officials and residents that is
unheard of, this opportunity is one in a million.
• By implementing the sound marketing strategy, as outlined in this section,
a successful and profitable business will be achieved,
Product Focus
Crowne Plaza represents an upper-tier, mid-priced hotel opportunity for
investors. Designed for commercial & leisure, airport and resort markets.
Crowne Plaza features moderate room rates, but the quality service,
desirable amenities and gracious hospitality are worthy of the name Six
Continents.
PortAngelesConferenceCenter Page 16 04/03/02
NOTE: Many of the references used are located on web sites as well as in print
form. Due to the constantly changing status of the tourism facts and figures
available web sites are listed for your information so that you might investigate
the most recent data.
Baum, T
9• resource issues in international tourism. Boston:
Butterworth-Heinemann.
Riley
«• Baum, T. (1993). Human resource issues in international
tourism. Boston: Butterworth-Heinemann.
International Air Transport Association (2001) http://www.iata.org
Runyan, D.
111
61 "lly ra V V F. M-
Tourism Industries (2001) http://www.tinet.ita.doc.gov
TW Crossroads (2001) httr)://www.twcrossroads.com
Fivowe I I
PortAngelesConferenceCenter Page 17 04/03/02
IV. Property Acquisition/Lease Negotiations
(a) the Port of Port Angeles
We have made substantial, meaningful and positive progress in negotiating acquisition of the Port-owned
|
parcel of land, oo evidenced bv the Letter of Intent contained herein.
u
We have also requested a land avvop between the Port and DNR, to better facilitate placement of the
|
building on owned x and to avoid location of any building structures on leased property. |
Avoidance of built structures on leased land is a prerequisite of our lenders to participate in financing the
(b) the WA State Dept of Natural Resources
-The Port has agreed to renegotiate its lease of DNR-owned property on the site for a new 55-year term,
DNR has agreed in concept to the terms of the proposed land swap with the Port of Port Angeles, with
minor conditions that are being discussed by both agencies. Evidence of this conceptual agreement was
offered to Ehm Architecture verbally by Port Executive Director Clyde Boddy, Deputy Port Director Dave
Hagowmro. and by Don Olmstead ofDNR. A feature article in the Peninsula Daily News also described
this conceptual agreement.
The Port reports that it has also discussed our request for use and extension of the existing pier.
Discussions between Ehm Architecture and DNR in this regard have centered upon the need to make this
request a separate issue to avoid unnecessarily delaying the hotel and conference center project.
�
(c) any other property owner for the acquisition and/or lease of Oak Street Development Site and any
other necessary properties
Significant progress has been made in negotiations with adjacent property owners as to the potential for
�
additional land acquisition. Discussions with Pete Capom. who owns a parcel directly east of the subject
property across Oak Street, have centered upon his decision as to whether he may be interested in selling
the site, in leasing it to our LLC, or in offering it as equity in exchange for an ownership position in this
�
project. This issue has been under discussion for some time, but was only recently formed into a specific
�
request by Ehm Architecture to Mr. Capos when the cost of subterranean parking was determined to be
too high.
�
Significant progress has been made in discussions with the City of Port Angeles about the possibility of
joint pursuit of structured parking. These discussions have been ongoing ine general fashion for several
months, but only recently became more pointed as we discovered that underground parking on our site
�
would becoot'prohibiUve.
�
�
' —
[
! J���J��r�
� ==~~�"" °
~
U���������U�����
�����.��".��. .°�.��.�"
This letter of intent memorializes the mutual intent of the parties to undertake specified actions in
furtherance cf the development cf a motel, restaurant and convention center complex (the "p 'eot)onthe
�
1 Parties., The parties to this letter of intent are: Pier Group LLLC.or its assigns ("Developer"); The
Port of Port Angeles ("Port"); The City of Port Angeles ("City"); and the State of Washington
Department oy Natural Resources (^ONR"\
� '.
2. Propedy. The property proposed as the project site and the uunerd ownership thereof is described
� in Exhibit 1 and depicted on Exhibit 2.
3. Project. The project to be undertaken by Developer isgenerally described in Exhibit 3 and the
�
accompanying site plans and elevations (Exhibit 3Athrough . |tia acknowledged the final
design of the proposal ia likely tobe modified during environmental review and permit processing,
but that the principal components of the project aanarrative|ydnnchbedinExhibit3vviUnotbe
�
modified without the consent of all parties hereto. .
4. The Port and DNR will pursue approval ofeland
�
exchange by the Board of Natural Resources (pursuant to RCW 79.90.457, WAC 332-30-170 and
other applicable laws) whereby all right, title and interest of the DNR in Parcel C as depicted and
described in Exhibit 4 will be transferred to the Port in exchange for transfer by the Port to DNR of all
�
its right, title and interest in Parcel D as depicted and described in Exhibit 4. The Port and DNRalso
agree, contingent upon approval of the land exchange by the Board of Natural Resources, to jointly
seek a boundary adjustment from the City for the land exchange herein described. The Port shall
U�
bear all survey costs, recording fees, and other expense associated with the land exchange and
boundary adjustment. The parties agree to accept the appraisal performed by John He|berg. N1A[
dated the day of _, 200, for purpose of determining values for this land exchange.
5. Port convevance. The Port will grant and convey to Developer good and marketable title to Parcels
A and C as depicted and described in Exhibit 4, together with a quit claim of any interest the Port
00
may have in improvements, including fill, situate on Parcels B and E as depicted and described on
Exhibit 4, for the total sum of One Million Thirty Thousand and No/100 ($1,030,000), all cash at
|
^m�
�
2
\Y
|_0
�
�
�
� 6
. DNR will enter into e new ' tidelands lease with
Developer Oeve|operhorParoelsBandDasdap/cbadanddeacrbedinExhibit4.Thenenttobachorgedbv
DNR for Parcel B will be based upon the ultimate usage of the parcel in accordance
~~ with
formulas and examples set forth in Exhibit 5. The parties understand and acknowledge that
|
rent
i� --
psntto be paid for Parcel D shall at all times be non-water dependent rent as that term is defined applicable state laws and shall be in the initial amount specified in Exhibit 5and shall
_ be
subject to adjustment over time based upon changes in assessed value of the adjoining
�
parcel as more specifically described in Exhibit |� The pa�iasfudheranknow|edg^ that the upland
to be paid by Developer for Parcel B is anticipated to be a combination of non-water dependent,
''
water dependent and public access rentals. The formulas and examples set forth in Exhibit 5
|
acknowledged to not necessarily represent the ultimate design and usage for Parce| B. --
� parties acknowledge that final negotiation of usages and rents for Parcel will be conducted -
conjunction with oratthe conclusion of permit processes for the development of the project. - �'
| podionaof Parcel B developed for public access to the shorelines wiUbededinatedby '-
Developer
� to such use and may bo subleased iothe Cdyfor park purposes. Those areas sodedicated shall
not be subject to payment of any rentals to DNR. Said leases shall reserve to the Port -on
i
easement for access for Pod purposes to the harbor area lying north of Parcel B and the dock
located in the harbor area identified as Parcel F . The leases shall also reserve an easement
public trail purposes in favor of the City in the area depicted on Exhibit 3 and Exhibit 4.
7. Contiguous harbor area leases. Harbor areas abut Parcel B on the north and include an area
of filled harbor area and hpnap approximately _____feet in width (Parcel E on Exhibit 4\ and an
existing pier depicted on Exhibit 4. The subject harbor area leases are |eQo|k/ described in
Exhibit 6. The Port will relinquish management ofthese harbor areas to DNR. Thereafter DNR
will lease the harbor areas depicted on Exhibit as area F to the Port for mixed uses. �including
water dependent and public access ueem, fora new 30-year term. It is anticipated the Port may
sublease portions of this harbor area and portions of the pier as depicted in Exhibit 4 to
Developer for the 30-year term. The Port shall pay rentals for said harbor area lease from
time to
time as described in Exhibit 6. The harbor area identified as Area E shall be leased to Developer
for a new 30-year term and shall be dedicated to public auname ueea , subject also to easements
reserved to the City and the Port am identified in Section Gabove.
8. Portions ofParcel B and Parcel E as depicted in Exhibit may be subleased by
Developer to the City for public park and trail purposes. The areas anticipated to be subleased
to
the City are depicted and described in Exhibit 3. Neither the City nor Developer shall pay o
rent to DNR for these public access areas as ultimately specified
ed in the subject | on ^
and
dedicated to public use.
�
� \ .�
g. Convention center. The City shall lease the convention center facilities described in Exhibit 3
from the Developer for the sum of One Hundred Thousand Dollars ($100.000.00) per year, to be
paid from city lodging tax revenues. The City shall lease back the convention center to Developer
in consideration of the Developer's agreement to operate` maintain and market the convention
center in accordance with the terms of the business plan document and marketing plan budged
and implementation strategy previously submitted by Developer bothe City and dated the
day ` 2002` and the terms of convention center sublease which remains to be
negotiated prior to closing.
/ 10^ The parties acknowledge Developer has: made 'substantial
�
progress" on predeaign of the building structure and site improvements; submitted a business
|
plan document acceptable to the City; submitted a marketing plan budget and implementation
}
^
strategy acceptable to the City; provided satisfactory evidence that project financing ia available
� and provided project development schedule aU as oonhsmp|obsd by the letter ofintent between
< the City and EhmArchihectumo and dated January 30, 2002 ("due diligence phase requirement
\
�
letter"). The parties hereto further acknowledge that execution of this letter of intent by all parties
�
satisfies the remaining terms of said due diligence phase requirement letter. The parties mutually
|
agree to pursue with good faith and due diligence the closing of this transaction through signing
i
� of
�
-
definitive agreements consistent herewith. The parties hereto acknowledge that number of
|
matters pertinent to the finalization of this transaction remain to be negotiated. Those items
�
�
include, but are not limited to, the following:
� (o) establishing a schedule for permit applications and closing of the real estate transactions
�
identified above;
(b) development of final documents consistent with this letter of intent, to be utilized at
M allocation of closing costs;
(d) approval by all parties of final design and acceptance by Developer of permits as issued.
Counterpart signatures. This Letter of Intent may be signed by the parties in counterpart.
\U
�
By:_
Its:
Date:
By:
Its:
Date:
I In
By:
Its:
Date:
a 0 Ty 1 0 A 0
By:
Its:
Date:
V. Documented evidence that all Sources of Project Development and Start-up Financing are
Available
-Destiny International Ventures with Hospitality Associates This joint venture has previous experience
working together in development of significant hotel properties. Destiny International Venture acts aodeal
broker for Hospitality Associates on projects where oU`erdmve|opmns are invo}vmd, oo they typically
develop, own and manage their own properties. The Spokane-based firm recently announced a52-hohe|
deal with La C}uin(o Hote|e, and has e large hotel portfolio that includes La [3uinto. Holiday Inn Express,
Boat Hotels and Hawthorn Suites.
Destiny International Ventures has issued a Letter of Intent to participate in major finannhngof8)ep 'ent
mn behalf of Hospitality Associates. The financial resources cf Hospitality Associates are evident from
their recent restructuring under the Lm Ouinte flag, which resulted in an influx of additional capital for the
company. The D|VYHA Joint Venture will oonurm all financing for the project through their lender, (3E
Capito|, and will contribute $ 4.5 million in debt equity for the project with the balance being obtained
through GE under a construction loan.
� Radhe Investments This investor has remained committed ho participation in this project since early in
the selection process. Radhe will participate in the project through investment of $ 1.5 million, which will
|
fund purchase nf the property and will provide operational expenses in the project atad'upperiod.
Fathy Construction Company �
FaUhy Construction Company has issued e Letter of Interest huparticipate
| in the projoo(, but has not yet committed to an amount. Fothy'm involvement is not required for an
�
appropriate level of financing in the projeot, but may be entertained by the LLC subject to further
�
BHR Capital This lender has committed to financing furnishings, fixtures and equipment (FFE) in the
project based upon their ongoing business relationship with Six Continents Hotels. This contribution io
estimated sd$750.O00.
Ehm Architecture with MMP Inc. Ehm Architecture has already contributed $2OO,00Uin this project
—
through design, coordination and ppodeva|opment. Randal Ehnn's design-build firm, MK4P|no..intends
contribute anadditional $5O0.00Oto the project through sweat equity.
�
�
/
�
�ur
I
I
rr
Ehm Architecture Inc.
Randal Jay Ehm AIA
2707 California Avenue SW
Seattle, Washington 98116
RE: Port Angeles Hotel and Conference Center
Dear Randal,
This letter sets forth our interest in entering into an Agreement by and between Destiny
International Ventures (DIV), and/or assignee and Randal Jay Ehm. (RJE), and/or assignee to
develop a joint venture hotel and suites project located on the property to be owned or Joint
Ventured by (RJE), located on the northwest comer of Front and Oak Streets in Port Angeles,
Washington.
It is anticipated that the site shall consist of approximately 3.75 acres gross buildable area. The
initial size of the facility is anticipated to be approximately 150 rooms and suites. DIV anticipates
that the property will include conference facilities, full service restaurant, upscale bar, business
center, indoor pool, breakfast room, sauna, spa, gift shop, fitness center, etc.
The following is an outline of terms that we propose for this venture:
I RJE to contribute the land at fair value ($1,200,000).
01
01
U
.13
DIV to contribute cash, contracts, goodwill, etc. RJE to provide designs and plans
funded by DIV.
DIV to facilitate and coordinate financing of the project.
Super majority vote of RJE (65%) required on major decisions of the future L.L.C.
Accounting for venture to be done by an independent accounting firm.
Construction, architectural and engineering to be performed exclusively by Ehm
Architecture / N0,1P Inc. with a designated General Contractor as mutually agreed to by
DIV and RJE.
DIV to secure hotel management company to manage hotel for the future L.L.C. The
designee is Hospitality Associates of Spokane, Washington.
Management company to charge a management fee of approximately (4-5%).
9. No real estate fees are to be paid or are a part of this transaction.
10. No developers profit (cash) will be received by DIV for the development of the project,
other than financing fees and services rendered. All such developer profits shall be
contributed to the venture.
11. DIV and RJE collectively and/or nominee/designee may need to open a $100,000 Line of
Credit (LOC) on behalf of the L.L.C. The L.O.C. will be retired by the construction loan.
These funds may be used to pay for engineering, building plans and fees, environmental
studies, appraisal, feasibility study, loan fees, etc., as required.
12. DIV will facilitate obtaining of national franchise for the property subject to the approval
of the L.L.C. members, which may include Marriott, Six Continents Hotels, Hilton
Hotels, Radisson Hotels or Ramada Inns.
13. DIV, RJE and/or designee will cooperate to obtain the necessary permits, zoning, special
use, etc.
14. Financial projections are a part of this agreement. Past performance is no guarantee of
future results, which may be greater or lesser than similar projects of DIV.
RJE agrees to proceed with the development of a hotel/suites and conference center at the subject
site. Upon- agreeing to proceed with the development, RJE expressly agrees that RJE is
responsible and will pay for their pro rata share (as set forth in the allocation of ownership) of
expenses incurred if RJE withdraws from the project. DIV agrees to cooperate with RJE to
coordinate any activities and plans for the project to meet requirements of neighbors, architectural
committees, town boards, zoning ordinance, building codes, etc.
The allocation of ownership will be 40% to RJE for land contribution and 60% to DIV. This
agreement shall give the DIV/RJE Joint Venture or designee the exclusive right for development
of a hotel and conference center on this land for six months from the date of acceptance or from
the date on which the LLC is signed, if signed earlier than six months. This agreement may be
extended by mutual agreement.
It is further agreed to that an L.L.C. will be created for the development of this hotel project.
Very Truly Yours,
Jack McIntosh
Destiny International Ventures
Agree
Signa,
Date:
Hospitality Associates has an extremely talented group of supervisory personnel with
significant experience in successful hotel development and management. Their expertise
means that their hotels take off quickly and generally perform well above industry
averages. The management team and leadership of Hospitality Associates have been
involved in the hotel and food service industry for over 40 years. Their concern for the
dignity of the individual and delegation of both responsibility and authority has empowered
their employees to become team players who are not only responsible but "response-
able". Customer service and problem solving are prime management tenants.
Terry P. Wynia, CHA (Certified Hotel Administrator): Owner, President and Chief
Executive Officer of Hospitality Associates is Terry P. Wynia, who has been in the
hotel/food service industry for over 40 years. He founded Hospitality Associates in 1978
with one hotel and has grown the Company to its present status of more than 50 hotels in
a dozen Western States. During this time he has been the principle player in at least 75
hotel projects. He is currently a major owner, managing general partner or president of
each of the hotels that are in the Hospitality Associates family.
His background includes working with nationally respected firms such as Marriott, Westin,
Holiday Inns, Ramada Inns, Glacier Park, Inc., and others. Having worked in virtually
every region of the United States, he has had experience at hotels ranging from 30 to 700
rooms. Mr. Wynia has worked in all facets of operations from entry level to top
management; from small, rooms-only motels to large full-service convention hotels and
resorts. His food service experience includes fast foods, cafeteria/college food service,
coffee shop, catering and gourmet dining. Mr. Wynia has a B.A. degree in Advertising and
Public Relations from Brigham Young University and an M.S. degree in Hotel and Food
Service Management from Florida International University. The American Hotel Motel
Association awarded him the distinction of Certified Hotel Administrator. In addition to his
industry experience, Mr. Wynia has taught both part-time and full-time in hospitality
management at the association, community college, and university levels. He is also
active in many industry and community organizations. Mr. Wynia's prime philosophy is
that all persons - employees and their families, guests, vendors, etc. - be treated with
fairness and respect.
Jeffrey H. Lyman, CHA: Executive Vice President and Chief Operating Officer. Mr. Lyman
began his current role with Hospitality Associates in 1985. Mr. Lyman received a B.A.
degree in Political Science in 1970 from Brigham Young University. He has been heavily
involved in managing and operating within the travel industry for many years. Prior to his
present assignment with Hospitality Associates he worked for Frontier Airlines in Denver,
Colorado. During his 14 years in the airline industry, from 1972 to 1985, he served as the
Sales Manager, District Sales Manager, and the Operations Manager of all
1 NFONIOMMWIM
airport operations. Prior to his time there he worked in management with First Security
Bank in Salt Lake City, Utah. Mr. Lyman also functions as Chief Financial Officer in
addition to overseeing the direct operations of several hotels.
James S. Mulloy, J.D.: Corporate Counsel and Project Coordinator. Mr. Mulloy joined
Hospitality Associates in 1996. Mr. Mulloy received a B.S. Degree in Business
Management in 1992 and a Juris Doctor Degree from Brigham Young University in 1996.
Mr. Mulloy's legal education specifically concentrated on real estate development,
construction law, real property and environmental and land/use issues associated with the
development of real estate. Mr. Mulloy is also a licensed general contractor and has
worked in the construction field since 1988. Prior to his current position with Hospitality
Associates, he worked as a Sales Executive for a major construction supply company. In
this position, Mr. Mulloy gained extensive experience in all facets of the construction
industry including: design, site layout, architectural, engineering, purchasing, shipping,
and operations. Mr. Mulloy's education, experience and ability in the development and
construction fields make him a valuable addition to Hospitality Associates.
Michael N. Metcalf, CLU (Chartered Life Underwriter): Vice President of Human
Resources. Prior to joining Hospitality Associates, Mr. Metcalf was a seventeen year
veteran of the life insurance industry, having qualified as a member of the Million Dollar
Round Table and most recently ran his own financial services firm as owner and president
of Metcalf and Associates, specializing in estate planning, corporate life insurance and
employee benefits. His experience includes a background in radio and television and
successful work with advertising agencies in both Los Angeles and New York.
Jackie Neves, CHA: Regional * Vice President. Ms. Neves began her hotel career with
Hospitality Associates in 1982 and has very successfully managed three individual hotels.
Her degree in hotel management has helped her to achieve exceptional results in her
region which covers several states. Jackie has received designation by the American
Hotel Motel Association as a Certified Hotel Administrator. She once served as a regional
governor for Best Western. Those hotels which Ms. Neves supervises have won
numerous accolades for excellence and generally perform far better than other hotels in
her market area. Her talents in "people skills" and her experience, expertise, attitude, and
ability are valuable additions to the Company and make her one of the unique reasons
why Hospitality Associates performs as well as it does.
Jay Kemble, CHA: Regional Vice President. Mr. Kemble joined Hospitality Associates as
a teenager and worked his way up from dishwasher to manager of hotels in several cities
and states and to the position of Regional Vice President. Along the way he earned an
A.S. degree in Travel and Tourism and a B.A. in Economics from Brigham Young
-
Page 3
University. He has also received designation by the American Hotel Motel Association as
a Certified Hotel Administrator. Jay is active in community organization and once served
as President of the Oregon Lodging Association. His more than twenty years of
experience with Hospitality Associates and his extensive hands-on knowledge of
operations have contributed to his consistently outstanding performance.
Carolyn Schwendener, Regional Manager. Born and raised in Ashland, Oregon, Carolyn
began her career with Hospitality Associates as a front desk clerk in 1994. By 1996 she
became the General Manager of that hotel and completed the Best Western Hotel
Management Training. Since that time Carolyn has also attended many other hotel
training classes and Dale Carnegie courses. Prior to her hospitality career, Carolyn and
her husband owned and operated their own business for 10 years. In addition, this
regional manager spent a few years providing service to both the handicapped and the
elderly. It was there that she honed the necessary skills of dealing fairly and effectively
with others. Mrs. Schwendener continues to be active in her community having served for
two years as the Ashland Ambassador Committee Chairperson.
Sandy Morris, CHA: Regional Manager. Mrs. Morris began her work in the hotel industry
in 1984,. joining the Hospitality Associates Family in 1994. Most of her experience
consists of taking an older, aged property and turning it around by renovation and then
rejuvenation through heavy sales and marketing efforts. Her hotels attain higher average
daily rates due to enthusiastic sales on the front desk. She motivates and educates her
employees to take an ownership pride in their properties and is a firm believer in the team
concept. Sandy has been heavily involved in the Film and Convention Board and the
Hotel / Motel Association in the Provo area.
Cecilia Lara, CHA: Regional Manager. Mrs. Lara, with a degree in hotel/motel
management, joined Hospitality Associates in 1982. Cecilia has managed five hotels
during her career with Hospitality Associates and has received numerous awards with her
staff for achieving excellence, as well as reaching some of the highest occupancies and
average rates for our Company. Mrs. Lara also held the position as Director of Training
and has received designation by the American Hotel Motel Association as a Certified Hotel
Administrator. As Director of Training she created and implemented training programs
and seminars for each department within our hotels. As Regional Manager, her territory
includes hotels in Washington, Montana and Utah.
Sam Saleh: Regional Manager. Mr. Saleh was born in Beirut, Lebanon and has a French
and Arabic education. He began his U.S. career in the restaurant and hotel industry as a
Management Trainee at the Washington Plaza hotel (presently the Westin Hotel), in 1966.
Since then, Mr. Saleh has worked as a Restaurant Manager and General Manager of
several hotels, He has also been involved with all aspects of hotel food and beverage
marketing as well as the opening of new hotels. Mr. Saleh has a reputation for attaining
and maintaining a high occupancy in the hotels he manages. Sam joined Hospitality
Associates in 1996 as General Manager/Regional Manager in the Puget Sound area.
Design and development services include the following items:
1. Site layout, room types and number, public area, amenities, exterior treatments,
floor plans, construction materials and methods are reviewed with contractor.
Architectural and engineering fees are significantly reduced and time lines
shortened by our experience and assistance.
2. Job specifications, including electrical, mechanical, HVAC, laundry, plumbing,
telephone, pre-wire, etc., are worked out on a design/build relationship with
contractor and subs by corporate and field staff.
3. Regular construction inspection, accounts payable monitoring and/or processing,
and course of construction services are performed by management personnel in
the home office and at the job site.
4. Furniture, fixtures, and equipment are specified, bid, contracted, scheduled, and
installation coordination is provided by our purchasing/design and corporate staff.
Volume discounts and direct purchase from manufacturers reduces costs.
5. Financing, appraisal, and legal services are coordinated by corporate staff as is file
preparation, documentation, and franchisor relations. Formats developed over the
years speed up the process and cut expenses.
6. Marketing and sales efforts are planned six to twelve months in advance. Media
selection, materials production, contracting and coordination are all provided.
Advance planning is critical to a quick start and good first year or two.
7. Employee selection, training, coordination and supervision is a vital function. Of
primary importance is the proper choice of the manager and key personnel,
including department heads, who will open the hotel. Initial and ongoing training is
thorough and professional.
Design and development services by experienced, knowledgeable professionals such as
Hospitality Associates insures every effort will be made to help the project come in on
budget, on time, in the right place with the right product.
r
Hospitality Associates is more than a lodging company with a proven track record.
Specializing in the development, construction, renovation, and management of hotels,
they are the developers/managers of 75 hotels in the West valued in excess of $295
million. Hospitality Associates has done hotels in Washington, Oregon, Idaho, Utah,
Alaska, Hawaii, Nevada, California, Colorado, Montana, and has projects under
development throughout the West.
President of Hospitality Associates is Terry P. Wynia, who has been in the hotel/food
service industry for over 35 years. His background includes working at nationally-
respected hotels such as Marriott, Westin, Quality Inns, Holiday Inns, Ramada Inns,
Glacier Park, Inc., and others. Having worked in virtually every region of the United
States, he has had experience at properties ranging from 30 to 700 rooms, serving the
tour, convention, corporate, and resort markets. His food service experience includes fast
foods, cafeteria/college food service, coffee shop, catering and gourmet dining.
Mr. Wynia has a B.A. degree in Advertising/Public Relations from Brigham Young
University and a M.S. degree in Hotel and Food Service Management from Florida
International University. The American Hotel Motel Association awarded him the
distinction of Certified Hotel Administrator. In addition to his industry experience, Wynia
has taught hospitality management at a number of universities and colleges. He is also
active in many industry and community organizations.
The Hospitality Associates staff specializes in operating hotels featuring deluxe decor
and amenities and stressing friendly, personal service at affordable prices. Their
development experience results from the necessity to have the best possible hotels in the
most desirable locations at the lowest possible cost. Therefore, they have extensive
experience in designing, building, and rehabilitating hotels. New construction or
turnaround, they have done it all. Their experience in a wide range of markets and
conditions enables them to custom design each hotel for the needs of its market. Their
track record for revenue and profit growth in good times and bad has been exceptional.
Hospitality Associates has also received numerous awards for operating some of the
finest inns in the West.
In summary, Hospitality Associates has the experience and expertise necessary to
maximize returns from hotel investments.
I
Select a site where there exists an unmet need for a lodging product. Site selection is based
on market analysis, customer demand, and staff awareness and response.
Product
Based on customer needs, land price, and construction /conversion costs, design a product
that will satisfy customer needs at a room rate that will create exceptional perceived value.
That product may be hard-budget, luxury-budget, mid-price, full-service, all-suite, or a
combination of several. The proper room mix and amenities are crucial to success.
Is] = •
Appoint a manager and hire a staff that will maintain our high standards of performance,
cleanliness, and friendly, personal service. Develop a winning team that will work together to
create a successful project. Employee morale is essential to creating a comfortable
environment for our guests. Satisfied customers are our best sales people.
Sales is a multi-faceted process including site, facilities, amenities, staff, and franchise. The
franchise chosen must be appropriate to the market, product, and competition. Essentially,
sales is the responsibility of the general manager who is expected to make weekly-sales calls
in the vicinity and monthly trips to feeder markets. In some cases, the manager's efforts are
supported by a regional sales manager who concentrates on out-of-town sales, regional trade
shows, and major clients, travel agents, tour brokers, groups, etc. Our Corporate Director of
Marketing attends national trade shows, calls on key markets, and constantly reviews staff
sales efforts.
0=11
Marketing is closely tied to the efforts and programs of the franchisor - national advertising, co-
op projects, promotions, etc. Critical to the success of each hotel is its relationship to the
Hospitality Associates family of properties. Inn-to-inn referrals, promotional programs, in-room
and lobby displays, co-op advertising, and referrals by our team of managers and sales
directors generates a substantial portion of the business at each location. Our frequent
traveler program is typical of the promotions that build a solid -customer base. Seasonal
planning, special event, yield management, rate reviews, staff training and supervision, and
constant performance evaluation all contribute to the marketing effort.
Randal Ehm
Ehm Architecture
1016 West Washington Street
San Diego, California 92103-1808
Dear Mr. Ehm,
Ue have reviewed the development at Port Angeles, Washington and find it exciting
and promising for the developers as well as the community. It has been passed on,41,
our lenders, who are interested in providing financing for this project. They have given
us a preliminary commitment already. 0
Sincerely,
I d REMEM
1935 Polk Avenue • San Diego, CA 92104-1017 • 619.269.9973: Voice • 619.269.7772: Fax
Fathy Construction company
A<- General Contractors License # 597747 -)*
8305 Vickers Street, Suite 203, San Diego, CA 92111
Telephone: 858-751-1683 / 1684 Fax: 858-751-1685
April 4, 2002
Randal Jay Ehm AIA, President / CEO
Ehm Architecture Inc.
2707 California Avenue SW
Seattle, WA 98116
RE: Port Angeles Hotel and Conference Center
FNIMIMMMEN
Thank you for contacting me about your current hotel development project in
Washington State. While I understand that you have not yet finalized the deal with the
City, I might be interested in participating in the project through potential joint purchase
of the Port-owned property.
I believe I have the financial ability to purchase the property, but may involve other
partners at my discretion and subject to your approval. Prior to signing any agreement, I
would need to review the specifics of your limited Partnership Agreement and details of
the Purchase Agreement with the Port of Port Angeles.
This letter of interest is valid for thirty days.
Yours truly,
iztFath
109 IN I
April 4, 2002
Randal.jay Ehrn
2707 California Ave. SW
Seattle, Wa. 98116
Dear Randal,
I was pleased to learn of the hotel and conference center that you are
developing in the northwest.
--Our firm Is in the business of providing financing for hotel projects with the
SJx_(:o11tMenis brands. We would be pleased to entertain financing of the
furniture, fixtures and equipment part of your hotel when you get to that point.
We would need to have a full development package on which to make our
decision.
I look forward to healing from you in the near future.
Sincerely,
LY,
Three Ravinia Drive, Suite 2900, Atlanta, GA 30346-2149
toll free 877.GFT.BIIRC 0 877.438,2472 • fax 770.604-867) I 7veb site w-w-N. B 11 RC 'Pital -coin
"",III
VI. Project Development Schedule
(a) permitting The schedule for permitting this project was determined through discussions with
Community Development Director Brad Collins, Assistant Planner Sue Robevde, Economic
Development Director Timothy Smith and City Manager Mike Quinn of City of Port Angeles.
(b) construction The construction schedule was determined by MMP with assistance by Ehm Architecture
of Seattle, Britco Structures of Surrey, British Columbia and Paragon Construction of Bellingham.
��
��
�]
�o
�D
�u
U�
n�
4r
�
5.
p€
w
gg
I-
og
g
N
ul
r
%
m F
_
°
IA
LU
8e
¢ o
$
_
uj
" °
J �_
a „
w
ui
_d
"
° _
-- -- -- --Y a --- -
- -- -- ---
ui
LL
" W s
U)
• °
zo
w
g°
W
w° W
g
--
tY°
(7
s �52
g wa Y �—
"
W
la
=nl m ,�
�SgwcQ 1 o g
!-
g z w
>W =�tN o
W
'i
�$y�
gi iIs
e� C a x 1 R a
UA
uj
d
_
h
�-
°
a o
Q a 0 o S
°
y N
5
ado&
;
s
I o
°
1
" w
o¢ au
o og
z
_
m g I I
Q
w
g 4
w w w
0
s8ouaIuh�gs����3o9
<so¢�om9z3u�w
Sf ° 08
y
g
mm
mmilriim m
o�
1-7-TT
w$& p �"
A S 8 T-
fi
VII. Development of a Long Term Lease or other Agreement with City for Commitment.of Lodging Tax
Funds in exchanqe for City Ownership Interest and viable Market! ng/Operation Plan by the
Develope
Randal Ehm of Ehm Architecture has been in constant contact with Timothy Smith of City of Port Angeles
throughout the process to date. Timothy has also involved City Manager Mike Quinn and City Attorney
Craig Knutson in several detailed discussions. The City's primary interest is in protecting the public's
investment through contributions of Lodging Tax Funds over a twenty-year period.
Negotiations with the City of Port Angeles have centered around three distinct options
One was ho^owndVmhniumize' the conference canber.whichwosdetenninedhobeunhanab|edueho|ego|
impossibilities.
Another option was to tie the contribution to annual marketing performance. This option was considered
untenab|*, as the City's contribution is essential to financing for the project and cannot therefore be
considered conditional by the Developer.
The third and mutually acceptable option isto negotiate o lease from the Developer's LL{}{o the City for
an annual payment of $ 100.000 for twenty years. The City will {hen sub-lease back to the LLC for
operation of the Conference Center for a stipend amount.
O
�