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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$uotBul4seM'M 910t � 4 M IL IL d w 0 O q LL LL Z O Q Z 0 U w s � u -- -- - --- - -- a ------------ �A g g�A dtl _ °s u ® 4 tl 8A I a - A a -ro tl tl A tl — tl I b a A ----------- -- -------- i _ tl e : 'e A e b' ------------- __ ---------------- R p ILL LLJ fr B k tl tl �A A a I A ' a Fl 9 N ti J� n I D H I I H D U V MM 7J31N30 3ONE�13=INO0 CNV 1310H 2 PL-oz 5313 NV S IM vm .I ... s MZ6 Vo ftla ..s mgWl IHOd z z O 0 0 uj W W _j W w U) < 0 0 LU U) z EB 1B ED 13 a] ,C] EE IE 13 jj F7 FTF-- -131. 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U�dian artart elthcndi the sta ai con a at ,.Watts sr os aaaora �rtreat boats far Hmm'tvc+w+elPeefvcmn,n r)na.r titive -7� dents said they didn't want if to Arrifedad Jxiy Eimi descr�tes some of 1#a" fhm i. end me s pde resemble i Cedars Casino. trret of a Proposed iwtet and convention cantor forowrRsrso-r Ehm said he .ranted to tarn the own Port Angeles w�aterfroat during a d9a�p agreed: and disagree with the front lend at Front and C7ek Wa are still mformetnon � ' P 7tiorsday various points — anrd then streets t to he area's rainfall into an art�a appearance to those on the d�cathMCll d hE aad�e�ice s Etnip Natrts W l egnn afrom the roof in some lrind Several peoFle also said tbeEhm —who says�he has The hotel and study Jacei Gom Cftv Ownncil rOn°s� MCO protect .rr71 be Cvnded y tens,, o l , deco ratrwe waterfall coiararicefhe °'nIuYe lya '„ Suggestad artistic elements new building should fit in with already put morn than center wadd be bu>7d'byE2itn's part with 52 million in citj% lied Ehm'amd he wantsf'o included waterfalls where the the downtown buildings behind t$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.. 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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 �