HRI PROPERTIES. Revitalizing cities by creating diverse, vibrant, & sustainable communities. REQUEST FOR QUALIFICATIONS. Submitted to: Submitted by:

Transcription

1 HRI PROPERTIES Revitalizing cities by creating diverse, vibrant, & sustainable communities. REQUEST FOR QUALIFICATIONS Submitted to: Bureau of Purchasing Chief Procurement Officer 1300 Perdido, Suite 4W07 New Orleans, LA Submitted by: HRI Properties 812 Gravier St., Suite 200 New Orleans, LA (504) November 14, 2014

2 TABLE OF CONTENTS A. Description of the Proposed Redevelopment Plan 3 1. Narrative 2. Timetable for Development 3. Proposed Transaction Structure 4. Plan for DBE participation 5. Plan for Orleans Parish/local participation B. Qualifications and Performance History Contact 2. Owners of developer 3. Members of Development Team 4. Description of prior experience with government entities C. Financial Capacity of Respondent Financial information 2. Summary of costs and 10 year proforma 3. Performance bond 4. Litigation status 5. Market analysis D. Financial Terms Construction period rent 2. Annual rent 3. Restoration Tax Abatement E. Other Requirements Completed Forms 2. DBE 3. Key Lease Terms 2

3 Alexandrite Suite Casa Madrona (HRI Lodging Managed) DESCRIPTION OF THE REDEVELOPMENT PLAN

4 A. DESCRIPTION OF THE REDEVELOPMENT PLAN 1. Narrative HRI Properties, LLC and its wholly owned affiliate, HRI Development, LLC, (collectively HRI ) propose to redevelop the World Trade Center ( WTC ) building into a full-service Andaz (luxury, lifestyle) hotel by Hyatt and luxury residential apartments. The project will include 252 hotel rooms, 14,000 s.f. of meeting space, 7,000 s.f. of commercial space and 295 luxury apartments in the historic WTC building with parking, a 6,000 s.f. ballroom and rooftop pool/ amenity deck in an ancillary structure to be constructed on-site. HRI has completed numerous architectural designs of the building previously, putting the company in an advantageous position to advance the design and to meet the current development program. HRI has developed six (6) mixed-use projects that combine both hotel and apartments in a single historic building, in New Orleans, LA; Houston, TX; Richmond, VA; and Jackson, MS, and currently has two additional mixed-use projects under construction in New Orleans and Dallas, TX. HRI s mission is Revitalizing Cities by Creating Diverse, Vibrant, & Sustainable Communities which it has done successfully for over 30 years, starting right here in the New Orleans Warehouse District in A project like the World Trade Center re-development requires a dedicated development team covering finance, hotel and apartment management, construction management, architecture, interior design, hotel brand requirements, FF&E procurement and coordination with purchasing and ongoing asset management. HRI and its affiliates, HCI Architecture, LLC ( HCIA ) in partnership with HCI Design, LLC ( HCID ), HRI Lodging, LLC ( HRIL ) and HRI Management, LLC ( HRIM ), has a team of 50 professionals located in New Orleans that will all work on this project. The local HRI team is currently developing the 225 Baronne project, which will be an Aloft Hotel by Starwood and apartments in New Orleans and is also developing a similar project in Dallas, which will be a Hilton Garden Inn and apartments, both scheduled to be complete in These two projects require at least 50 people from HRI to design, finance, (obtain hotel brand approval) and close. The local HRI team is prepared to tackle the WTC project and make our plan for the building a reality. HRI has a track record of closing large, complex transactions. HRI currently has four (4) adaptive reuse of historic building with some new-build components, under construction in New Orleans and Dallas that include federal and state tax credits. In total, these projects include 605 apartment units and 359 hotel rooms with total development costs of $261 million. The leadership and staff from HRIL and HRIM will work very closely with the development team and architects from HCIA to design, coordinate and close the WTC transaction. This internal coordination and operational cooperation will result in a well thought out project that operates seamlessly once completed. HRI delivers this unique capability along with a 30-year track record of similar, successful projects. HRIL, an approved operator for Hyatt full-service and limited brands, as well as Hilton, Marriott, Starwood, Intercontinental and Wyndham Brands, will operate the hotel portion of the project under a management agreement. Hyatt has expressed interest in providing its Andaz luxury lifestyle hotel flag, as set forth in the attached letter. HRI believes the Andaz flag is compelling for the WTC project based on its luxury lifestyle focus, strong Hyatt reservation system, Hyatt Gold Passport loyalty program that targets higher end group and transient guests, a market segment which is currently under served in the New Orleans market. 4

5 A. DESCRIPTION OF THE REDEVELOPMENT PLAN Currently, HRIL operates four (4) hotels in New Orleans, including the Hyatt French Quarter, Hyatt Place Convention Center, Hilton Garden Inn French Quarter/CBD and the Federal City Inn and Suites. HRI s fifth hotel in New Orleans, an Aloft by Starwood, will be added to the portfolio in HRIL also operates thirteen (13) hotels outside of New Orleans, including both branded and independent luxury and select service hotels for HRI and third-party owners. HRIM will operate the residential component of the project. HRIM operates 35 multifamily developments with 5,226 apartment units in New Orleans, LA, Jackson, MS, Richmond, VA, Shreveport, LA, Lafayette, LA, Hammond, LA and Winston-Salem, NC. HCIA with HCID, will serve as the project s architect of record. HCID employees 16 architects, of 14 of which are located in New Orleans. The project is envisioned as a 252-room, full-service, luxury lifestyle hotel and 295 luxury apartments. The project will respect the historical features of the iconic World Trade Center while delivering an exciting design that will set the hotel and apartments apart from their competitors. HRI is currently redeveloping two similar 1960 s buildings in Dallas and New Orleans and has 30 years of experience maximizing the potential of historic buildings, all while meeting National Park Service standards for historic structures. The project s interior design team will be selected based on their design concept for the hotel component, which will flow into the residential design. Although no historic redevelopment project is simple, the HRI team has completed over 70 similar projects with total development costs in excess of $2 billion over its 30-year history. The first challenge and opportunity pertains to the historic nature of the building and working with the State Historic Preservation Office ( SHPO ) and the National Park Service ( NPS ), as this can be a challenging process for firms unfamiliar with the rigorous requirements imposed on historic structures. HRI has worked with these agencies for over 30 years, successfully completing every historic project in compliance with each Part 2 approval. HCIA and HCID understand both SHPO and NPS requirements and make every effort to adhere to those requirements from the beginning, saving time and money for HRI and its public-private partners. The second challenge is to accommodate the parking needs of the project. Although the existing WTC garage is available at market rents, the garage is not ideal due to its compact driveways and entrance/exit ramps. HRI s plan is to construct an ancillary structure on the site to accommodate the hotel s need for approximately 20,000 s.f. of meeting space, 320 parking spaces for the residents and hotel guests and a rooftop pool and amenity deck. The former Plimsoll Club and the Trade Mart (Club 360) space present a unique opportunity for an upscale restaurant and bar plus additional amenity space. HRI will work closely with its design team to maximize the impact of this space. HRI has extensive experience in negotiating long term lease structures in public private ventures and anticipates being able to work with the City of New Orleans and its representatives to 5

6 A. DESCRIPTION OF THE REDEVELOPMENT PLAN structure a market rate/term lease for the building. Examples include the successful lease restructuring for the Hyatt French Quarter and D.H. Holmes Apartments projects which successfully closed in 2012 and 2014, respectively. The existing lease form that was approved by City Council and used in these transactions could serve as the basis for, and save time and money in, negotiating the WTC lease. 2. Timetable for Development HRI estimates that it can start construction within eight (8) months of executing a lease on the property. Construction is anticipated to take approximately 20 months to complete. Date March 2015 May 2015 August 2015 December 2015 February 2016 April 2016 May 2016 June 2016 February 2017 March 2017 March 2019 Milestone Developer selected to begin negotiating lease Developer and City execute lease Architectural design process begins Interior Design process begins National Park Service Part 2 approval Architectural and Interior Design plans approved by Hyatt Building Permit issued Financial closing Construction commences Construction complete Hotel and apartments open Operational Stabilization 6

7 A. DESCRIPTION OF THE REDEVELOPMENT PLAN 3. Proposed Transaction Structure Developer/Owner Hotel Operator Apartment Manager Architect Hotel flag Lender General Contractor Interior Designer HRI Properties, LLC, through a wholly-owned, to be formed subsidiary entity, will be the Tenant under the Lease HRI Lodging, LLC HRI Management, LLC HCI Architecture, LLC Andaz by Hyatt TBD TBD TBD HRI will utilize its affiliates to structure, design and manage the project, consistent with its eight (8) other hotel and apartment mixed-use projects previously completed or currently under construction. This structure allows HRI to control every step of the process, including design, cost and timeline. HRI will work closely with its general contractor and interior design firm, as well as the hotel brand, to produce a project that meets design, schedule and budget needs. Hotel Brand Relationships HRI has successfully completed two (2) projects with Hyatt in New Orleans during 2012, including the full service Hyatt French Quarter, a 254-room hotel and associated retail, along with the 170-room Hyatt Place, across the street from the Morial Convention Center. Both hotels were awarded the Best Hotel Conversions in North America by Hyatt. HRI maintains a great working relationship with Hyatt and anticipates another smooth closing and construction process for this project. General Contractor Relationships HRI maintains several relationships with qualified general contractors who have completed projects in the New Orleans market. HRI has successfully completed projects with New Orleans based general contractors Woodward Design+Build, Landis and Broadmoor Construction and with national general contractors such as Tutor Perini (NYSE: TUT), Clayco, Greystar and Paric Corporation. HRI anticipates running a competitive process utilizing one of these existing relationships for the construction of the WTC redevelopment in order to get the best price, schedule, project team and DBE commitment in order to make the WTC project successful. 7

8 A. DESCRIPTION OF THE REDEVELOPMENT PLAN Construction Debt Financing Relationships As it relates to the construction debt financing, HRI has closed over $100 million of construction loans with Capital One, Whitney, Fidelity Homestead, First Bank & Trust, Chase and U.S. Bank within the last twelve months and anticipates utilizing one or more of these financial institutions to provide the construction and mini-perm debt for the project. HRI also maintains ongoing debt relationships with Wells Fargo, J.P. Morgan and Bank of America, all of whom would also be considered for financing of the WTC project. Equity Investor Relationships HRI closed on a $150 million corporate facility in April 2014 with Almanac Realty Investors, a New York based private equity fund. Since 1996, Almanac Realty Investors primary investment activity has consisted of making private placements into public and private real estate operating companies. To date, Almanac Realty Securities, formerly known as Five Arrows Realty Securities, has committed more than $2.9 billion into more than 32 companies. HRI s existing facility with Almanac will provide the private equity capital required for the WTC project. HRI also has completed equity investments with Prudential Real Estate Investors, Carey-Watermark Investors, a non-traded, public REIT, Canyon Capital Realty Advisors, and Lubert-Adler, among others. HRI maintains relationships with ARES Management, Fundamental Investors and Building and, Land Technology, all of whom have expressed an interest in the WTC project, as well as relationships with Goldman Sachs, GEM Realty Capital and Brookfield, among other private equity groups. Historic and New Markets Investor Relationships The project will utilize Federal and State historic tax credits and is eligible for New Markets tax credits. HRI closed two projects in 2013 and 2014 utilizing all of these financing tools. HRI has worked with U.S. Bank, Capital One and Whitney who have invested in New Markets tax credits as recently as the third quarter of 2013 and have closed Federal Historic tax credit investments with First NBC and The National Trust for Historic Preservation and Louisiana and Texas State Historic tax credit investments with Stonehenge Capital in the third quarter of 2013 and second quarter of HRI has completed several federal historic tax credit investments with Aegon and Chevron and also maintains ongoing relationships with Goldman Sachs and PNC. HRI would run a competitive process with existing relationship investors to maximize the investment or transaction economics in the project. National Cities Fund, a HRI affiliate, currently has $20 million of New Markets tax credit investment allocation that could be utilized in the WTC project. National Cities Fund is one of the few development firms that has been awarded New Market Tax Credit authority. It has been awarded $208 million in credits, and has a pending application in the current allocation round. HRI has also been successful in obtaining third party allocation for its past projects. Interior Design Relationships Interior design is a key component for the Andaz hotel component and HRI maintains ongoing 8

9 A. DESCRIPTION OF THE REDEVELOPMENT PLAN relationships with the industry s top hotel design firms. HRI is currently re-developing/ developing three hotel projects, including a full service Hilton, a Hilton Garden Inn and an Aloft by Starwood with Looney & Associates, the design firm who completed the New Orleans Hyatt projects for HRI and also served as the interior design firm on the Hyatt Regency New Orleans. HRI has also worked with Gettys (Hard Rock), Montgomery-Roth (Wyndham), Forrest-Perkins (St. Louis Renaissance) and R.D. Jones. HRI maintains relationships with Wilson, Studio 11, Floss Barber, Thomas Hamilton, Morrison Sieffert Murphy and Boka Powell. HRI anticipates running a competitive process utilizing one of these existing relationships for the interior design of the WTC redevelopment in order to get the best design, schedule and price to comply with brand standards as a luxury hotel. Historic Tax Credit Advisory Relationships HRI has utilized several prominent historic consultants, including Rick Fifield, Heritage Consulting, Merriman & Associates and Marque Real Estate Consulting and would anticipate using an external firm for SHPO and NPS approvals required for the project. Legal Counsel HRI s primary legal representative is Gary Elkins with Elkins, PLC, based in New Orleans. 4. DBE Participation HRI will work with its general contractor to target at least a 35% DBE participation in the project. HRI has successfully met or exceeded this requirement on numerous other New Orleans based projects, as well as projects outside of New Orleans. 5. Orleans Parish/local business participation As a local employer with over 1,400 employees companywide, HRI strives to use local businesses in its projects and has a long track record of achieving this goal. HRI will select a qualified general contractor based on contractor performance, fee structure and price estimate, with an emphasis on selecting the contractor and sub-contractors from Orleans Parish and the surrounding metro-area. 9

10 Top Notch Resort, Stowe, VT (HRI Lodging managed) QUALIFICATIONS AND PERFORMANCE HISTORY

11 1. Contact A Thomas Leonhard, Jr. President and Chief Operating Officer HRI Properties, LLC 812 Gravier Street, Suite 200 New Orleans, LA Phone (504) Fax (504) TLeonhard@hriproperties.com 2. Lead Development Entity HRI Properties, LLC and HRI Development, LLC Developer Owners M. Pres Kabacoff, Co-Chairman and C.E.O Edward Boettner, Co-Chairman and C.A.O. A. Thomas Leonhard, President and C.O.O. 3. Development Team Leadership Steven Nance, Vice President Investments Project Executive, HRI Properties, LLC Gary Gutierrez, President, HRI Lodging, LLC David Abbenante, President, HRI Management, LLC Gary Meadows, President, HCI Architecture, LLC Sidney Barthelemy, Vice President Civic Affairs, HRI Properties, LLC Hal Fairbank, Vice President Acquisitions, HRI Properties, LLC Larry Daniels, Vice President of Operations, HRI Lodging, LLC 4. Experience Working with the Public Sector For the last 30 years, HRI has been working collaboratively with its public sector partners. The list of public-private projects is long, but some key projects include King Edward/Standard Life Jackson, MS, Hilton Shreveport, Gateway Renaissance Hotel St. Louis, MO, Miller & Rhoads Hilton Garden Inn and apartments- Richmond, VA, Marriott Courtyard-Omaha, NB and multiple Low-Income Housing projects in Louisiana and Missouri. HRI has completed two public-private transactions with Canal Street Development Corporation and a major public housing redevelopment with the Housing Authority of New Orleans and another public housing redevelopment currently under construction. 11

12 Lead Development Entity HRI Properties ( HRI ) is a vertically-integrated, full-service, turn-key real estate development company with over thirty (30) years of experience in furthering its mission of Revitalizing Cities by Creating Diverse, Vibrant Sustainable Communities. The Company is based in New Orleans, and is recognized as a national leader in public/private partnership development and historic adaptive reuse of historic structures. HRI has successfully completed 70 large-scale projects, including 5,226 apartment units, 4,116 hotel rooms, and 1,378,404 square feet of office and retail space, with a total funding value in excess of $2 billion. HRI, along with its affiliates, is a one stop shop for the development of significant real estate projects, especially those that have a larger synergistic impact on a community. From conceptualizing to designing, structuring and sourcing capital; managing regulatory and brand requirements; managing construction and managing the completed project; HRI possesses in-house all the expertise needed to control a project and insure its successful outcome and continued efficient operation. Long-term relationships developed over its history with investors and financial institutions have enabled the Company to creatively structure the capital stack for development projects and minimize the required gap financing. Because of its mission, HRI s projects have entailed a close working relationship with cities, other public entities and other stakeholders, as will be required to facilitate the development of a world-class hotel and residential development at the World Trade Center. HRI Lodging, LLC HRI s affiliate, HRI Lodging, LLC ( HRIL ), manages HRI s hotel portfolio as well as hotels for third parties. On average, its executive team has over 25 years of combined lodging experience with all major brands in first tier markets throughout the United States, and has had direct responsibility for the oversight of diverse lodging facilities in union and non-union environments, including large convention center and urban hotels, independent boutique properties, extended stay, select service properties, golf resorts, destination spas and 5-diamond resorts. HRI Lodging is an approved operator with brands such as Marriott, Hilton, Hyatt, Starwood, Wyndham, Intercontinental and Hard Rock. HCI Design, LLC HCI Design, LLC ( HCID ) is a professional architectural services entity, and an affiliate of HRI. As its President, Gary Meadows oversees a design staff of nine architects, two interior designers, two design quality control managers and two administrative assistants. Through contract with HCIA, this entity provides professional design services; assists in developing project programming; works closely with local, state and federal agencies; coordinates with consultants' work; produces graphic presentation materials for marketing purposes; and provides construction administration services. 12

13 The HRI Process A project development team headed by an experienced HRI development project manager that includes property managers, architects and construction managers, is assigned to develop the project from the schematic design phase through construction administration and completion. The architectural personnel provide design services and work in concert with all "Owner/Manager/ Operator" entities. Meanwhile, HCI Construction ( HCIC ) personnel, through close interaction with a project s general contractor, develop and maintain a project budget and construction schedule in conjunction with the design process to allow HRI ongoing, in-depth knowledge and control of the project's progress. The cross-functional project development team, with a development project manager, an architectural project manager, and a construction project manager, supported by their respective staffs and HRI s finance and accounting departments, brings the project to fruition. HCIA, with design services contractually provided by HCID, is integrally involved in the project throughout the construction process, often through a design-build relationship with a project s general contractor, maintaining a strong construction administration presence. This on-site team of architects is dedicated to managing the budget, scope and schedule, as well as complying with the intent of the contract documents. The high-level of service available to HRI is not typically offered by traditional third-party architecture firms. The HCIA team offers design and cost evaluation for all possible alternatives and approaches throughout the design and construction process, further enhancing HRI's ability to complete a project on time and within budget, which is especially important in adaptive reuse of a historic building. It also provides services in facility management, retail and office space planning for the properties within the HRI portfolio. This turnkey, integrated team approach through predevelopment, design and construction sets HRI apart. HRIL and HRIM are involved in a project from start to finish, participating in the initial RFQ response by running pro-forma operating models to selecting the hotel brand, unit mix between hotel and apartments and desired amenities for the hotel and apartment components. The involvement of both HRI Lodging and HRI Management are critical to the success of the project and uniquely are all provided in-house at HRI. Pre-Opening Activities: HRIL participates in the design and construction meetings throughout the process so that are aware of any issues, changes and milestone dates. The pre-opening schedule will be managed by Larry Daniels, Vice President of Operations for HRI Lodging. Mr. Daniels, a 30 year veteran of Hyatt Hotels, joined HRI in 2011 as the general manager of the Hyatt French Quarter. The schedule is as follows: 180 days from opening Hire a general manager ( GM ) and a director of sales ( DOS ), set up a pre-opening office, purchase information technology, property management software, sales software, point of sale system (MICROS) and 13

14 phone system. Order operating supplies, attend Hyatt orientation, complete all brand standard requirements. GM and DOS would visit other Andaz hotels, meet with the respective GM s of those hotels and their sales teams. 120 days from opening Hire a human resources director and aparking management company, secure vendor relationships for food and beverage, laundry, paper goods, etc. Apply for a liquor license. 60 days from opening Hire senior leadership team and department heads 30 days from opening Hire the front office staff, executive housekeeper and do on-going training On the HRIMside, the management team would begin pre-leasing 5-6 months prior to opening, depending on demand. The HRIM team would also be involved in weekly meetings throughout the construction process. Topnotch Resort Spa, Stowe, VT (HRI Lodging managed) 14

15 (MAURICE) PRES KABACOFF Co-Chairman of the Board of Directors & Chief Executive Officer Education Juris Doctorate, 1970, Louisiana State University Law School Bachelor of Science, 1967, University of Denver Experience : A native of New Orleans, Pres practiced real estate law and general litigation : Assistant to the Managing Partner of International Rivercenter (IRC), which was the developer and managing partnership of the New Orleans Hilton Riverside and Towers, a 1,600-room convention center hotel; Riverwalk; and International Cruise Ship Terminal; and was the attorney and team member in the development of Beau Chene, a 3,000-unit recreational community in St. Tammany Parish, Louisiana present: Co-founded HRI Properties, based in New Orleans. HRI is a full-service real estate company and a leader in the adaptive reuse of historic structures. Its mission statement is to revitalize cities by creating diverse, vibrant, and sustainable communities. Professional Affiliations Chair, Mayor of New Orleans Housing Task Force Committee Mayor Mitch Landrieu Member, Urban Land Institute (ULI), whose mission is to provide responsible leadership in the use of land to enhance the total environment. ULI Council Member, Public-Private Partnership Council. Past District Chairman of the Louisiana Chapter of the Urban Land Institute. Advisory Board Member of the Brookings Institution s Urban and Metropolitan Policy. One of 250 Trustees of the Committee for Economic Development (CED), a national research and education organization whose goal is to study and seek solutions to pressing social and economic issues affecting the long-term health of our nation s economy. Board Member, Preservation Action, the national lobbying organization for historic preservation. Member, Metropolitan Neighbors, the Task Force on Regionalism. Member, National Advisory Council of the Trust for Public Land (TPL). Co-Chair, Top 10 by 2010, a citizen-based nonprofit initiative to chart a new direction for the Southeast Louisiana Region. Member, Housing Task Force of the Committee for a Better New Orleans, whose mission is to achieve the brightest economic future for all of its citizens. Board Member, Public Affairs Research Council of Louisiana, a nonprofit watchdog over political issues. Board Member, New Orleans Police Foundation. Board Member, MetroVision Executive Committee, whose mission is to increase regional cooperation. Board Member, Dillard University, New Orleans, Louisiana. Member of the Governor s NFL Stadium Advisory Commission. Director, Economic Development, Dillard University, New Orleans, Louisiana. Honorary doctorate from the University of New Orleans 15

16 (MAURICE) PRES KABACOFF (Con d) - Co-Chairman of the Board of Directors & Chief Executive Officer Civic Affiliations Founder, New Orleans Council for Young Children. Past Member of the Orleans Parish School Board. New Orleans Public Schools Early Childhood Task Force. Chair, Coalition for Educational Excellence, better known as COED Participant on the Governor s Panel on Education and chaired the committee At-Risk Children. Participant on the educational component under the Governor of the committee Redirecting State Dollars. Co-Chair, Mayor s Special Task Force on Children, Youth and Families. Honors Recipient of the 1989 First Citizen of the Learning Society, a business/education award presented by the University of New Orleans Council for Lifelong Learning. The Young Leadership Council selected Pres Kabacoff as one of 25 Role Models in Recipient of one of five individual Peacemakers awards by the New Orleans Peace Foundation for his love and dedication to the City of New Orleans. The National Council of Jewish Women (NCJW) Greater New Orleans Section selected Pres Kabacoff as the 1995 recipient of the prestigious Hannah G. Solomon Award (Founder). A. THOMAS LEONHARD, JR. President and Chief Operating Officer Mr. Leonhard is President and Chief Operating Officer of HRI Properties (HRI), a premier national real estate company specializing in large-scale urban development of hotels, apartments and other commercial uses, including adaptive re-use of historic properties. Mr. Leonhard has over 25 years of service and is responsible for all of HRI s operations, which includes 1,400 employees managing over 50 properties in five states. Education MBA with Real Estate Concentration, 1992, University of New Orleans Bachelor of Science in Finance, 1989, University of New Orleans Mr. Leonhard was an adjunct professor of Economics and Finance at the University of New Orleans from 2003 to 2005 and is a member of the Louisiana Chapter of the Young Presidents Organization. 16

17 EDWARD BOETTNER Co-Chairman of the Board of Directors; Chief Administrative Officer Experience Founded News on Wheels Magazine, photo-classified ads for automobiles and other vehicles President Add Inc. of Louisiana Developed publishing and commercial printing business Acquisition Officer for Historic Restoration Incorporated. Mr. Boettner assumed the responsibility of Co-Chairman of the Board and Chief Administrative Officer of Historic Restoration, Incorporated in January Civic Affiliations Fore Kids Foundation (host of the Zurich Classic of New Orleans) Executive Committee member since 1988; 2013/2014 Chairman's Committee; 2012 Tournament Chairman; 2011 Tournament Vice Chairman. Education Bachelor of Science in Printing Management, 1976, Rochester Institute of Technology, Rochester, NY STEVEN NANCE Vice President, Investments Mr. Nance is the Vice President, Investments for HRI Properties, LLC and will serve as the project executive on the WTC conversion. In addition to managing the firm s debt and equity relationships, Mr. Nance has successfully completed the $45 million recapitalization and renovation of the Hyatt French Quarter and the $24 million acquisition and repositioning of the Hyatt Place, both hotels located in New Orleans. He is currently is overseeing the $90 million conversion of the former LTV building in Dallas, TX into a 171 room Hilton Garden Inn with 186 luxury apartments and ground floor retail, opening August Mr. Nance is also the project executive on the $60 million acquisition and conversion of the Miller & Rhoads mixed use project, which is currently operating as a 250 room Hilton Garden Inn with 133 residential units that will be converted into a full service Hilton hotel, opening August Mr. Nance is also involved in project acquisitions and financing for existing and development projects. Nance, a 20-year banking and finance veteran, came to HRI from J.P. Morgan Chase where he was a senior vice president and spent 10 years financing both private and public companies across several industry segments, including hotels, energy service, manufacturing and construction. Prior to working for J.P. Morgan Chase, he spent five years with the predecessor to Capital One Bank, Hibernia National Bank where he served as vice president of commercial banking. 17

18 Mr. Nance graduated from Louisiana State University in 1986 with a degree in Petroleum Land Management and received his Masters of Business Administration from the University of New Orleans in GARY GUTIERREZ President, HRI Lodging Mr. Gutierrez is President of HRI Lodging, LLC, with responsibility over the company s hotel properties in New Orleans, LA; Shreveport, LA; Jackson, MS and Richmond, VA. He also is responsible for eleven third party owned hotels in the Bay Area around San Francisco, CA, Stowe, VT, Jackson Hole, WY, Chandler, AZ and Birmingham, AL. In addition to overseeing all aspects of operations and performance of the company s hotel assets, Mr. Gutierrez provides guidance and oversight to project acquisitions and brand relations. His extensive background has focused on turnaround strategies for distressed and under-performing hotel properties. These strategies included the oversight of over $300 million dollars in renovation and repositioning programs. His multi-property, regional and corporate experience coupled with the knowledge to quickly assess and develop appropriate revenue and profit generating initiatives, fits well with HRI Lodging s focus on creating high returns for their investment partners. Gutierrez, a 30-year lodging industry veteran, came to HRI Lodging from Highgate Hotels, a leading independent hospitality management firm serving some of the country s largest and most sophisticated institutional owners based in Dallas, Texas. As vice president of operations, he successfully oversaw operations of hotels such as the AAA 4-Diamond 676-room Westin Hotel and 1010-room Parc55 Hotel in San Francisco. In addition, he has managed boutique and lifestyle hotels such as the iconic Paramount Hotel and On The Avenue Hotel in New York City. Prior to working for Highgate Hotels, Gutierrez served as divisional vice president of Remington Hotels, managing operations of both independent and Marriott branded venues. As Area Director of Operations with Wyndham International for 16 years, Gutierrez managed all operations of the company s trophy assets such as the coveted AAA 5-Diamond Boulders Resort & Golden Door Spa, AAA 4-Diamond Carmel Valley Ranch Resort and Isla Navidad Luxury Resort in Mexico. DAVID ABBENANTE President, HRI Management David Abbenante is a high-energy, dynamic real estate professional with over 20 years of experience in all aspects of commercial and residential asset management, property management and development project management. Prior to working for HRI Properties, Mr. Abbenante worked in the third-party residential and commercial management business and was a facility manager for a Louisiana based bank. In 1996, Mr. Abbenante joined HRI as a development Project Manager to 18

19 oversee low-to-moderate income residential properties and hotel conversion developments. He was promoted as head of the Asset Management Division wherein he represented HRI in its role as Managing General Partner on a portfolio which at the time was comprised of 1,395 residential apartments, 750,000 square feet of office space, three hotels and five parking garages. In February of 2000, the HRI Asset Management Division was merged with the Property Management Division, and Mr. Abbenante was promoted to President of HRI Management where he oversees all HRI owned real estate assets and HRI Management functions. Affiliations Member, Institute of Real Estate Management (IREM) Past President, Louisiana s IREM Chapter President - New Orleans Apartment Association Education B.S. in Business from USM, Certified Property Manager, IREM Real Estate Sales License, State of Louisiana Housing Credit Certified Professional GARY MEADOWS President, HCI Architecture Mr. Meadows has been responsible for management of Architectural services for HCI since 1995, thus enabling HCI to offer in-house comprehensive design services. His employment history also includes eleven years as Architectural Design Coordinator for a major design-build firm and experience dating to 1980 in the New Orleans marketplace. Mr. Meadows is the Architect for the St. Thomas Hope VI Housing Redevelopment, the Marriott Residence Inn, the Hilton Garden Inn, the Cotton Mill Apartments, and the American Can Apartments all in New Orleans, Louisiana; the Blackstone Courtyard by Marriott in Ft. Worth, Texas; the Humble Courtyard, Residence Inn and Apartments in Houston, Texas; the Courtyard by Marriott in Omaha, Nebraska; the Renaissance Suites Hotel and the Merchandise Mart Apartments in St. Louis, Missouri and numerous other commercial and industrial facilities. Affiliations American Institute of Architects Registered in the State of Louisiana (Reg. No. 2900) Registered in the State of Texas (Reg. No ) Registered in the State of Nebraska (Reg. No. A-2757) 19

20 Sidney Barthelemy Vice President Civic Affairs Elected Offices Mayor, City of New Orleans, Councilman-at-Large, New Orleans City Council, Louisiana State Senator, Experience Adjunct Professor, Kennedy School of Government Adjunct Professor, Tulane University School of Public Health Adjunct Professor, University of New Orleans - College of Education Associate Professor of Sociology, Xavier University, Director, City of New Orleans Welfare Department, Major Awards and Citations National League of Cities Leadership Award, 1994 New Orleans Chapter, National Association for the Advancement of Colored People (NAACP) Daniel E. Byrd Award, 1990 President s Award, Louisiana Conference of Black Mayors, 1989 American Spirit Award from the Air Force Recruiting Service, 1989 Certificate of National Merit, Department of Housing and Urban Development, 1988 B nai B rith Torch of Liberty Award Social Worker of the Year, Louisiana Chapter of the National Association of Social Workers, 1987 American Freedom Award, Third Baptist Church of Chicago, 1987 Outstanding Alumnus, Tulane University School of Social Welfare, 1986 Purple Knight, St. Augustine High School (best all-around student), 1960 Education Tulane University, New Orleans, Louisiana, Masters Degree, Social Work St. Joseph Seminary, Washington, D.C., Bachelor of Arts, Philosophy,

21 HAL FAIRBANKS Vice President Acquisitions Mr. Fairbanks is responsible for identifying and overseeing due diligence for new development opportunities and closing financing for select developments. In this capacity he has closed approximately $400 million of financing for inner-city revitalization projects over the last five years. He also oversees the operations and investments of HRI s affiliated NMTC community development entity, National Cities Fund. In his previous position as a Development Project Manager at HRI, he has been responsible numerous large scale historic property developments from project inception to completion. Adaptive re-uses of these properties have included residential, commercial, office and hospitality. Mr. Fairbanks began his career at HRI in 1995 as a Financial Analyst. Before joining HRI Mr. Fairbanks was a real estate agent and investor, and managed a portfolio of residential real estate in New Orleans, LA. Education: Master of Business Administration, A.B. Freeman School of Business, Tulane University Bachelor of Arts, Art and Architecture History, Tulane University LARRY DANIELS Vice President of Operations, HRI Lodging A 30-year veteran of Hyatt Hotels, Larry Daniels joined HRI Lodging in 2011 as General Manager of the Chateau Bourbon Hotel. He led the property through a $20 million renovation and conversion to a Four Diamond rated Hyatt French Quarter. In 2013, he was promoted to Vice President/General Manager with responsibility for HRIL s assets owned with investor group Carey Watermark, Inc. and now serves as Regional Vice President of Operations with direct oversight of the entire HRIL branded portfolio. 21

22 HRI Executive Team 22

23 ABOUT HRI LODGING HRIL & MWTH offer an unrivaled range of experience in the hotel industry - from prestigious national brands to independent boutiques, from 5-diamond resort spas to transformational historic buildings in city centers. HRIL & MWTH offer a leadership team averaging 25 years of lodging experience, including large convention center and urban hotels, independent boutique properties and destination resorts. HRIL & MWTH draw on the resources of HRI Properties for in-house development, architecture, construction management and FF&E procurement. HRIL & MWTH have a proven track record of repositioning underperforming and distressed assets. OVERVIEW HRI Properties ( HRI ), based in New Orleans, is a full-service real estate development and property management company. HRI has been in operation since 1982 and is a national leader in the adaptive reuse of historic structures. Through its subsidiaries, HRI has completed 70 large-scale projects for a total funded value of over $2 billion, which includes the development of over 5,000 apartment units, over 4,000 hotel rooms, and over 1.2 million square feet of office and retail space. Hotel projects comprise in excess of $1 billion of development to date. HRI Lodging ( HRIL ) is an affiliate of HRI Properties and offers the unique perspective of hotel and mixed-use property ownership as well as management for multiple third-party owners. HRIL is an approved operator for full and focus service brands such as Hilton, Hyatt, IHG, Marriott, Starwood and Wyndham. In May of 2013, a joint venture brought HRIL to operate MetWest Terra Hospitality ( MWTH ), a management company comprised of seasoned luxury hospitality professionals, operating and developing a dynamic collection of hotels and resorts in spectacular locations. MWTH also provides development and asset management services for investors, financing institutions, and owners. HRIL & MWTH currently operate 17 hotels with over 2,500 keys across nine states, employing over 1,200 associates. Both companies practice the best-in-class balanced approach to property management and continue to grow in their respective markets. 23

24 CONSTRUCTION B. QUALIFICATIONS AND PERFORMANCE HISTORY AWARDS & RECOGNITION 2012 Hyatt Best Full Service Conversion of the Year (Hyatt French Quarter, New Orleans, LA) 2012 Hyatt Best Select Service Conversion of the Year (Hyatt Place New Orleans/CC, New Orleans, LA) 2010 National Preservation Honor Award (King Edward Hotel & Residences, Jackson, MS) 2009 Hilton Garden Inn Developer of the Year (Hilton Garden Inn Richmond Downtown, Richmond, VA & Hilton Garden Inn Jackson Downtown, Jackson, MS) 2008 Hilton Garden Inn Best Conversion of the Year (Hilton Garden Inn Jackson Downtown, Jackson, MS) HRI SERVICES HCI ARCHITECTURE & DESIGN staffs a team of architects, interior designers and design quality control managers. This entity provides design and construction document production services, assists in developing the project programming, works closely with local, state and federal agencies, coordinates with consultants, produces graphic presentation materials for marketing purposes, provides construction administration services. HCI CONSTRUCTION is the construction management entity, which employs the construction management team including project managers, field superintendents and field foremen. The construction team develops and maintains a project budget and construction schedule in conjunction with the design process to allow ongoing, indepth knowledge and control of the project progress. HCI manages a project throughout the construction process, and represents the interest of the Owner/Developer during construction. FF&E PROCUREMENT SERVICES provide bidding and purchasing oversight for capital expenditures and major projects. The team negotiates with vendors, liaises with major brands on compliance and coordinates all logistics associated with schedules and deliverables. Procurement services work closely with HCI design on development projects, as well as regional engineering on facility maintenance of current portfolio assets. ARCHITECTURE & DESIGN FF&E PROCUREMENT 24

25 WHY CHOOSE HRIL & MWTH? DEVELOPMENT & RENOVATION MANAGEMENT RESOURCES RELATIONSHIPS VALUE CREATION Completed over $2 billion of development to date (4,000 hotel rooms, 5,000 apartments and over 1.2 million square feet of office and retail space). Extensive experience managing capital programs (PIP s) with top-tier brands such as Hilton, Hyatt, IHG, Marriott, Starwood and Wyndham. Effective execution of negotiations between ownership and brands to maximize investments while keeping to brand standards. Successful repositioning of underperforming and distressed assets in short periods of time. Support from HRI Properties, which has over 32 years of experience in full service real estate development and remains a national leader in the adaptive reuse of historic structures. In-house access to a team of architects, interior designers, and project managers. A senior leadership team averaging 25 years in the lodging industry. Experience operating all hotel types, such as: convention center hotels, downtown corporate hotels, lifestyle boutique hotels, historic assets, conference centers (IAAC), airport locations, suburban areas, all-inclusive resorts, full service, focus service, extended stay, 5-diamond, golf/tennis facilities, spa and mixed use. Approved operators for full and focus service brands such as Hilton, Hyatt, IHG, Marriott, Starwood, Wyndham and Hard Rock To maximize results, HRIL & MWTH work with best of class service partners such as: LRA Worldwide, Shepherd & Associates, ShareIt on Line, BirchStreet/ HSM, Greenrock, ADP, Great Plains/FRX, Newmarket International, Global Hospitality Marketing and PDQ Consulting. For owners and investors, HRIL & MWTH are able to stabilize and optimize asset performance through: Integrated Sales and Marketing. Centralized services for additional enhancements of key disciplines such as Accounting, Revenue Management, Human Resources and Procurement. Flexible and intelligent deployment of systems and technology compliant with Sarbanes Oxley and REITS. Established management for mixed use operations such as office, retail, food & beverage outlets and rental properties. 25

26 Hotel Brand Selection Hyatt Hotels has expressed an interest in providing its luxury, lifestyle brand, Andaz, for this project. HRI believes this would be a wonderful brand and product in the New Orleans market, complementing the Hyatt Regency, Hyatt French Quarter and Hyatt Place products already in the market and the Hyatt House proposed for the office building adjacent to the Benson Tower. We believe the Hyatt brand is under-represented in the New Orleans markets as compared to Marriott, Hilton, Starwood and IHG. With the Andaz flag, Hyatt would have offerings at every price point and product type. Behind the Andaz flag is Hyatt Hotels Corporation with a worldwide portfolio consisting of 573 properties in 48 countries. For more information, please visit Hyatt is a publicly traded company (NYSE: H) and generates 59% of its EBITDA from owned hotels vs 41% from franchised hotels. The Andaz flag was introduced by Hyatt in 2007 and currently Andaz has seven (7) properties in the United States (New York (2), California (3), Hawaii and Georgia), two (2) locations in Europe, two (2) in Asia and one (1) in Costa Rica. 26

27 The Andaz brand fits in Hyatt s Luxury hotel segment, along with Park Hyatt and Grand Hyatt. Hyatt s loyalty program, Hyatt Gold Passport, generates 34% of Hyatt s total room nights. 27

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29 A Vibrant Hotel Experience At Andaz, we ve set the stage to ignite creative minds and bring eclectic souls together. It began with a passion to connect with our guests and experience the world through their eyes. So we created a fresh and stimulating environment, infused with character, welcoming guests to create inspiring experiences through a kaleidoscope of local culture. USA CALIFORNIA Andaz Napa Andaz San Diego Andaz West Hollywood GEORGIA Andaz Savannah HAWAII Andaz Maui at Wailea Resort NEW YORK Andaz 5th Avenue Andaz Wall Street Andaz Distinctions and Awards Andaz Brand 2014 Best Cause Related Marketing for Holiday Bazaar PR Daily Awards 2014 Platinum Winner for Corporate Social Responsibility Program for Holiday Bazaar Hermes Creative Awards 2013 Best Boutique Hotel Brand Premier Traveler 2013 Best Lifestyle Hotel (#1) Global Traveler Tested Reader Survey Awards 2013 Best Partnership Limited Edition Awards 2012 Best Boutique Hotel Brand Premier Traveler 2012 Top Lifestyle Hotel (#1) Global Traveler Tested Reader Survey Awards Andaz 5th Avenue NY 29

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33 Hyatt Hotels Corporation Hyatt Hotels Corporation, headquartered in Chicago, is a leading global hospitality company with a proud heritage of making guests feel more than welcome. Thousands of members of the Hyatt family strive to make a difference in the lives of the guests they encounter every day by providing authentic hospitality. The Company's subsidiaries manage, franchise, license, own and develop hotels, resorts, branded residences and vacation ownership properties under the Hyatt, Park Hyatt, Andaz, Grand Hyatt, Hyatt Regency, Hyatt Place, Hyatt House, Hyatt Zilara and Hyatt Ziva, Hyatt Residences and Hyatt Residence Club brand names and have locations on six continents. As of September 30, 2014, the Company's worldwide portfolio consisted of 573 properties in 48 countries. For more information, please visit COMPANY HISTORY Hyatt was founded by Jay Pritzker in 1957 when he purchased the Hyatt House motel adjacent to the Los Angeles International Airport. Over the following decade, Jay Pritzker and his brother Donald Pritzker, working together with other Pritzker family business interests, grew the company into a North American management and hotel ownership company, which became a public company in In 1968, Hyatt International was formed and subsequently became a separate public company. Hyatt Corporation and Hyatt International Corporation were taken private by the Pritzker family business interests in 1979 and 1982, respectively. On December 31, 2004, substantially all of the hospitality assets owned by Pritzker family business interests, including Hyatt Corporation and Hyatt International Corporation, were consolidated under a single entity, now named Hyatt Hotels Corporation. HYATT GOLD PASSPORT The Hyatt Gold Passport guest loyalty program is part of Hyatt s ongoing commitment to making our guests feel more than welcome every time they stay. Members can enjoy exclusive benefits, such as earning five points per eligible dollar spent to redeem toward free nights with no blackout dates, room upgrades and airline miles. There are two elite tiers providing members with even more privileges. This unique guest loyalty program is designed to demonstrate our loyalty to all our members worldwide. 33

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35 ABOUT HRI MANAGEMENT HRIM offers leading edge management capabilities to multifamily owners nationally and specializes in managing historic buildings. The HRIM leadership team averages over 20 years of apartment management experience in urban locations. HRIM draw on the resources of HRI Properties for in-house development, architecture, construction management and FF&E procurement. HRIM has a proven track record of repositioning underperforming and distressed assets. OVERVIEW HRI Properties ( HRI ), based in New Orleans, is a full-service real estate development and property management company. HRI has been in operation since 1982 and is a national leader in the adaptive reuse of historic structures. Through its subsidiaries, HRI has completed 70 large-scale projects for a total funded value of over $2 billion, which includes the development of over 5,000 apartment units, over 4,000 hotel rooms, and over 1.2 million square feet of office and retail space. Multifamily projects comprise in excess of $1 billion of development to date. HRI Management ( HRIM ) is an affiliate of HRI Properties and offers the unique perspective of multifamily and mixed-use property ownership as well as management for multiple third-party owners. HRIM currently manages 35 multifamily properties across 5 states, employing over 100 associates. 35

36 REFERENCES 1. Karl Zavitkovsky Dallas (LTV Tower) Economic Development City of Dallas 1500 Marilla St. Room 5CS Dallas, TX (214) Dale Sibley Shreveport (Hilton Hotel) 505 Travis Street, Shreveport, LA (318) Mayor Allen Joines Winston-Salem (Nissen Apartments) Suite 150, City Hall, 101 North Main St., Winston-Salem, NC (336)

37 HRI has a 30-year+ track record of successfully bringing public/private partnership real estate projects to fruition. Below are three pertinent examples of HRI Properties projects that are further discussed in the Case Studies section of this RFQ response. 37

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42 1. Hyatt French Quarter New Orleans, Louisiana HRI originally converted the former D.H. Holmes department store into a 250 room hotel in early 1990 in a public-private venture with the City of New Orleans. The hotel was completely renovated in 2012 and converted into a full service Hyatt hotel. The 281,000 square foot, 254-room hotel includes a rooftop swimming pool and fitness center, as well as the upscale Batch Bar and Powdered Sugar, the hotel s grab and go restaurant. The 23,489 s.f, of retail space house Ralph Brennan s Redfish Grill, Hard Rock Café, RPM Fro-Yo and Pop This! The $45,688,755 project was financed by a combination of debt, private equity, Office of Community Development PROP funds and Louisiana state historic tax credit equity. The renovation project was completed within budget and opened in May, HCI Architecture ( HCIA ), an HRI affiliate, and Looney & Associates re-programmed the hotel public space and completed the Hyatt approved interior design work, delivering a contemporary design while respecting the history of the pre-civil war building. Woodward Design+Build was selected to renovate the building based on a not-to-exceed GMP. HRI provided construction management services to insure that the building was built to plans and specifications and provided FF&E procurement and coordination services. HRIL manages the hotel, which has been sustaining a RevPAR penetration index of 100% against a strong competitive set and is still ramping up, as well as consistently receiving high quality assurance scores from the brand. 2. Miller & Rhoads Richmond, VA HRI developed the historic Miller & Rhoads buildings on Broad Street in downtown Richmond, Virginia as part of a mixed-use/adaptive re-use of the vacant, but iconic, department store located across the street from the recently expanded 700,000-square foot Richmond Convention Center. The mixed-use hotel project was conceived by the City as a way to secure a large block of hotel rooms in close proximity to the Convention Center. The property was rehabilitated as a 250-room Hilton Garden Inn, 133 residential units and 20,000 square feet of retail space and opened in February of The hotel performs well within its competitive set that includes several upper upscale full-service lodging flags. HRIL has developed a close working relationship with the Convention Center management and the CVB, and has experienced increasing market share relative to nearby competitors. The project has helped to revitalize interest in living, working, and playing in downtown Richmond, spurring the revitalization of several nearby buildings and the opening of many new businesses. The building was acquired from the City of Richmond subject to an RFQ/RFP process and the $111 million project funded by a combination of state and federal historic tax credits, new market tax credits, institutional equity and a low leverage bank facility. In July 2014, HRI acquired a 100% interest in the Miller & Rhoads project and is currently converting the hotel to a full service Hilton, which is scheduled to be completed August First Finish will serve as the general contractor on the build-out of 20,000 s.f. of new meeting and retail space as well as the renovation of the guestrooms and public space. Looney & Associates is providing the interior design and Commonwealth is the architect of record with HCI Architecture providing schematic design work. HRIL will manage the full service Hilton under a long term management agreement. HRI Management manages the residential units and has consistently maintained occupancy in the mid 90% range and has achieved consistent rent growth. 42

43 3. King Edward & Standard Life Mixed-Use Project Jackson, MS This project involved the rehabilitation of three historic buildings in downtown Jackson, MS that had been acquired by the Jackson Redevelopment Authority. The adaptive reuse project involved the development of a 186-key Hilton Garden Inn, 140 residential units in two buildings, a 153-space parking garage and 75 surface parking spaces. HRI Lodging manages the hotel and HRI Management manages the aprtments. Financing for the $82 million first phase of the project was closed in March, 2008 and construction was completed in December, This phase included the renovation of the King Edward Hotel, a historic hotel that had been vacant for over 40 years. HRI converted the building into a 186-room Hilton Garden Inn, which included 5,000 square feet of conference space, a restaurant, a bar, a swimming pool and a fitness center. Sixty-four apartments and a 1,111 square foot Seattle s Best Coffee shop were also created within the historic hotel building. The development includes 158 garage parking spaces in the adjacent historic Hines Motor Company Building, and 25 surface parking spaces. The second phase brought in additional financing sources of $32 million to incorporate the historic Standard Life building into the transaction. The Standard Life building was converted into 76 residential rental units with 2,671 square feet of retail space. The property also provided an additional 50 surface parking spaces for the project. To bring the Standard Life building into the project, HRI successfully requested a private letter ruling from the IRS allowing the project to be treated as a single integrated unit for the purposes of using NMTC to enhance other project funding sources. Financing for the Standard Life building was closed in May 2009, and construction was completed in August From its inception, the project was designed to incorporate amenities critical to the community, and to complement other downtown revitalization projects, including Jackson s new 265,000 square foot convention center located two blocks from the project, a new Class-A office building (Jackson Place), and the construction of a new federal courthouse. The hotel facilities were designed specifically to service the business, convention and leisure traveler; all are population targets critical to the economic vitality of the area that were lacking in the Jackson market prior to the completion of this development. The hotel is now downtown Jackson s premier hotel. The project s residential housing component, managed by HRI Management, offered the first major influx of downtown living space, which has served a critical role in the overall revitalization efforts of the City by bringing 24-hour life and activity to the area. The creation of 64-upscale apartments on floors 9 thru 12 of the King Edward Hotel, and 76 additional units in the Standard Life Building, not only complement the hotel use, but have also stimulated further residential development activity in downtown Jackson. During rehabilitation the grand, historic spaces of the hotel were intricately restored to their original architectural grandeur, including the lobby, rotunda, pre-function spaces and the neo-classical exterior. Environmental remediation of the site was also undertaken during construction. Once considered an impediment to the success of downtown Jackson, the rehabilitated buildings are now the launch pad of the community s economic and social revitalization. The project qualified for an received a Restoration Tax Abatement 43

44 4. LTV Tower Mixed Use Project Dallas, TX The LTV Corporation, a Dallas based conglomerate, built its new headquarters in downtown Dallas in LTV owned Wilson Sporting Goods, Lykes Meats, Corsair, Braniff Airlines, LTV Steel and Vought Aircraft, to name a few. The building was sold in 1968, and in 1975 the building was sold again to Dresser, Inc. The building went through a series of successive owners intending to convert it into residences, but because of economic conditions no plans had come to fruition. In 2010, work by a San Antonio-based developer began to renovate the building -- to be renamed The Grand Ricchi -- for residential and office condo use. Richhi did not have the financial wherewithal to complete the project and Ricchi lender was taken over by the FDIC in late HRI had begun working with Ricchi in 2012 to acquire the building and working with the City of Dallas Economic Development group to provide the TIF financing required to retire the existing debt on the building. When the FDIC took over the failed financial institution, HRI approached the FDIC who agreed to work with HRI to close the transaction. HRI secured debt financing from Capital One and Fidelity Homestead and secured First NBC as the federal historic investor and Stonehenge Capital as the state historic investor. The Hilton Garden Inn flag was secured for 171 room hotel portion and HCI architecture along with Merriman Associates completed a design that provided 206 parking spaces for the residential units on floors 2-4 along with the existing 150 space valet garage in two sub-basement levels. The project closed its financing and began construction with Andres Construction, a Dallas based general contractor who specializes in adaptive reuse projects in Texas. The project is currently on budget and on schedule and will be completed in the third quarter of The project qualified for an received a Restoration Tax Abatement. HRI Lodging will manage the hotel and HRI Management will manage the apartments Baronne Mixed Use Project New Orleans, LA Left completely vacant after Hurricane Katrina, the historic 225 Baronne building was at one time the tallest building in New Orleans. Roughly 300 new downtown residents will live in the tower, with 20% of the residential units set aside for low to moderate income persons. The project consists of 192 units of mixed-income housing, a 188 key Aloft hotel, and a 356 space public parking garage. The development achieved financial closing in November Amenities will include on-site property management office; multi-purpose room; fitness center; roof-top swimming pool; and direct covered access to reserved automobile and bicycle parking. Capital One serving as the lead arranger for the loan syndication and Whitney Bank and First Bank and Trust as participants. Prior to financial closing, HRI acquired two adjacent parcels, the historic 500,000 square foot tower and a non-historic annex to the former Chevron Building. Additionally, HRI executed a franchise agreement with Starwood for an Aloft hotel, with HRI Lodging approved as an operator. Roy Anderson, a subsidiary of Tutor Perini, is the general contractor, with HCI Architecture serving as the Architect of Record. Capital One, Whitney USBCDC, and Stonehenge invested in portions of the project s tax credit equity investment, which was sourced from State and Federal Historic and New Markets Tax Credits. The project is currently scheduled to be complete in the second quarter of The project qualified for and received a Restoration Tax Abatement. HRI Lodging will manage the hotel and HRI Management will manage the apartments. 44

45 FINANCIAL CAPACITY OF RESPONDENT Top Notch Resort ( HRI Lodging Managed)

46 C. FINANCIAL CAPACITY OF RESPONDENT 1. Financial Information HRI has a long track record of closing complex financing for historic projects and currently has two projects under construction with total development costs of approximately $200 million that utilized New Markets, Federal and State historic tax credits, bank debt financing and private equity. These transactions closed in the fourth quarter of 2013 and second quarter of Lenders and tax credit investors in these two projects including New Orleans based financial institutions, national banks and syndicated state historic investors. HRI will utilize these and other national providers of debt and historic and New Markets tax credit equity to finance the WTC project. In its 30 year history, HRI has completed 70 large scale projects with total development costs in excess of $2 billion, exhibiting its long track record of successfully completing projects similar to the WTC project. HRI will utilize bank debt, private equity and both federal and state historic tax credit equity to finance the improvements to the WTC building. The project is also eligible for New Markets tax credits. National Cities Fund, an affiliate of HRI, currently has its own $20 million allocation of New Markets tax credit allocation that can be utilized in the WTC project. HRI intends to fund the private equity component internally through its $150 million facility provided by Almanac Realty Investors, which HRI closed in April Lending partners, including Capital One, U.S. Bank, Wells Fargo and Bank of America, among others, would be invited to provide financing the project. Historic equity investors, including Aegon, U.S. Bank, Stonehenge Capital and Enhanced Capital will be invited to provide tax credit equity financing to the project as well. New Market investors U.S. Bank, Capital One and Whitney Bank, among others will be invited to provide the New Markets investment in the project as well as their own allocation. HRI closed transactions with all of these investors and lenders within the last 12 months. HRI Properties, LLC has provided completion guarantees on projects with total development costs in excess of $300 million to Capital One, Whitney Bank, Fidelity Homestead, and U.S. Bank for projects under construction or nearing completion. HRI has also provided a completion guarantee to the City of Dallas on the LTV project. 2. A summary sources and uses for the project is outlined below: SUMMARY SOURCES & USES Total % per Gross S.F. Bridge Loan $ 40,000, % $ Permanent Sources Senior Loan $ 83,930, % $ Investor Equity 39,004, % Federal HTC Equity 35,940, % State HTC Equity 33,710, % Total Sources (1) $ 192,584, % $ Uses Financing Fees $ 1,988, % $ 2.37 Soft Costs, Fees, & Misc. (2) 23,236, % FF&E 12,148, % Reserves 3,907, % 4.66 Construction Period Interest 6,973, % 8.32 Construction Hard Costs 131,210, % Owner's Hard Cost Contingency 13,121, % Total Development Cost (1) $ 192,584, % $ Hotel Management Fee 3.00% Residential Management Fee 4.00% Notes: (1) Excludes any accrued deferred developer fee payable from project cash flow. (2) Includes development, construction management, FF&E, and architecture fees to affiliates of HRI. 46

47 C. FINANCIAL CAPACITY OF RESPONDENT The project s operating pro-forma was prepared by HRI, utilizing input from HRI Lodging who operates 17 hotels nationwide and from HRI Management, who operates 35 multifamily projects regionally. HRI Lodging uses third party information from Smith Travel, PKF, Convention and Visitors Bureau statistics airlift statistics. The pro-forma provides a summary 10 year forecast for the project based on HRI current assumptions regarding the hotel and multifamily market, interest rate environment, bank underwriting, market equity return hurdles and brand requirements for the Andaz hotel as well as HRI s standards for luxury apartments. (The 10 year pro-forma is shown on the next page.) 3. The project s payment and performance bond will be provided by the general contractor selected by HRI. All of the proposed general contractor firms have bonding capacity sufficient for the WTC project and any award of a construction contract will be subject to a payment and performance bond acceptable to HRI, its investors and lenders. 4. HRI Properties, LLC and HRI Development, LLC, the project sponsor and developer respectively have none of the following: pending or past litigation, claims filed, felony convictions, pending criminal investigations, bankruptcy filings. 5. HRI analysis of the market indicates sufficient demand for the proposed project. The analysis is based on the current market conditions for both hotel and residential apartments. HRI and its affiliates manage and own four hotel properties and numerous multi-family developments in the New Orleans market which are experiencing strong demand, high occupancies and strong rental rates. Therefore, based on our analysis we believe the WTC project is a project that will garner support from the financial community, hotel brands and residents. The project s operating pro-forma was prepared by HRI, utilizing input from HRI Lodging who operates 17 hotels nationwide and from HRI Management, who operates 35 multifamily projects regionally. HRI Lodging used third party information from Smith Travel, PKF, Convention and Visitors Bureau statistics airlift statistics in deriving the pro-forma. HRI has traditionally been a long term investor in real estate and has owned many projects for 20 years or more, including the Hyatt French Quarter, D.H. Holmes Apartments, to name a couple. HRI anticipates owning the WTC project for the foreseeable future. 47

48 C. FINANCIAL CAPACITY OF RESPONDENT World Trade Center New Orleans - Mixed-Use Project Consolidated Property Operating Cash Flow Pro Forma (1) Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Average Hotel Occupancy: 70.77% 73.27% 75.16% 75.48% 76.08% 76.50% 77.11% 77.08% 77.06% 77.08% Average Hotel Daily Rate: $ $ $ $ $ $ $ $ $ $ Average Apartment Occupancy 25% 78% 93% 93% 93% 93% 93% 93% 93% 93% Average Apartment Rent: $2,641 $2,720 $2,802 $2,886 $2,972 $3,061 $3,153 $3,248 $3,345 $3,446 Operating Cash Flow Hotel Gross Revenue $ 16,414,495 $ 21,837,172 $ 23,391,273 $ 24,221,123 $ 24,946,734 $ 25,701,095 $ 26,529,959 $ 27,359,636 $ 28,057,258 $ 28,855,778 Apartments Gross Revenue 2,359,275 7,605,929 9,310,992 9,590,322 9,878,031 10,174,372 10,479,604 10,793,992 11,117,811 11,451,346 Parking Gross Revenue 1,094,065 1,391,645 1,470,336 1,525,076 1,579,028 1,635,273 1,697,901 1,752,923 1,800,014 1,854,579 Total Revenue 19,867,835 30,834,747 34,172,600 35,336,521 36,403,793 37,510,741 38,707,463 39,906,551 40,975,083 42,161,702 Growth: n/a 55.20% 10.82% 3.41% 3.02% 3.04% 3.19% 3.10% 2.68% 2.90% Hotel Operating Expenses 11,318,652 14,415,377 15,420,128 15,792,328 16,144,808 16,533,060 16,975,479 17,416,510 17,742,662 18,111,061 Apartments Operating Expenses 1,142,025 1,595,600 1,702,543 1,753,619 1,806,228 1,860,415 1,916,227 1,973,714 2,032,925 2,093,913 Parking Operating Expenses 533, , , , , , , , , ,560 Real Estate Taxes 1,139,935 1,241,354 1,270,738 1,300,848 1,331,700 1,363,314 1,395,710 1,428,908 1,462,929 1,497,793 -less: Rehabilitation Tax Abatement (1,139,935) (1,241,354) (1,270,738) (1,300,848) (1,331,700) Total Expenses 12,994,580 16,665,050 17,799,025 18,232,232 18,661,598 20,492,662 21,051,472 21,607,948 22,048,522 22,537,328 Growth: n/a 28.25% 6.80% 2.43% 2.35% 9.81% 2.73% 2.64% 2.04% 2.22% Adjusted Net Operating Income 6,873,254 14,169,697 16,373,575 17,104,289 17,742,195 17,018,080 17,655,992 18,298,603 18,926,561 19,624,375 Margin: 34.59% 45.95% 47.91% 48.40% 48.74% 45.37% 45.61% 45.85% 46.19% 46.55% Non-Operating Items FF&E Reserve - Hotel (2) 521, , ,971 1,020,165 1,051,154 1,083,380 1,118,838 1,154,021 1,183,600 1,217,509 Replacement Reserve - Apartments (2) 31,740 91,155 93,890 96,706 99, , , , , ,472 HTC Audit & Tax 17,500 17,500 17,500 17,500 17, Total Non-Operating Items 552,853 1,011,221 1,078,861 1,116,871 1,150,761 1,185,976 1,224,512 1,262,865 1,295,709 1,332,982 Cash Flow Available to Ground Lease 6,320,401 13,158,476 15,294,714 15,987,418 16,591,434 15,832,104 16,431,480 17,035,738 17,630,852 18,291,393 Ground Lease Ground Lease Payment 1,800,000 1,845,000 1,891,125 1,938,403 1,986,863 2,036,535 2,087,448 2,139,634 2,193,125 2,247,953 Total Ground Lease Payments 1,800,000 1,845,000 1,891,125 1,938,403 1,986,863 2,036,535 2,087,448 2,139,634 2,193,125 2,247,953 Cash Flow Available to Debt Service 4,520,401 11,313,476 13,403,589 14,049,015 14,604,571 13,795,569 14,344,031 14,896,104 15,437,727 16,043,439 Debt Service Senior Loan - Interest 5,531,220 5,522,050 5,444,757 5,348,800 5,246,324 5,136,887 5,020,016 4,895,206 4,761,918 4,619,575 Senior Loan - Principal (3) - 672,231 1,412,584 1,508,541 1,611,017 1,720,454 1,837,325 1,962,135 2,095,423 2,237,766 -less: Capitalized Interest (3,226,545) Total Senior Debt Service 2,304,675 6,194,281 6,857,341 6,857,341 6,857,341 6,857,341 6,857,341 6,857,341 6,857,341 6,857,341 Trailing 12 Month DSCR: n/a 2.12x 2.23x 2.33x 2.42x 2.31x 2.40x 2.48x 2.57x 2.67x Property Free Cash Flow 2,215,726 5,119,196 6,546,248 7,191,674 7,747,230 6,938,228 7,486,690 8,038,763 8,580,386 9,186,099 -less: Cash Flow to Historic Investors (4) (1,078,200) (1,110,546) (1,143,862) (1,178,178) (3,010,524) Free Cash Flow to Investor Equity$ 1,137,526 $ 4,008,650 $ 5,402,386 $ 6,013,496 $ 4,736,706 $ 6,938,228 $ 7,486,690 $ 8,038,763 $ 8,580,386 $ 9,186,099 Return on Equity 6/30/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/2026 Capital Contributions $ (39,004,906) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Free Cash Flow - 1,137,526 4,008,650 5,402,386 6,013,496 4,736,706 6,938,228 7,486,690 8,038,763 8,580,386 9,186,099 Gross Sale Proceeds (6% Cap Rate Apartments & 8% Cap Rate Hotel) (5) 264,744,902 -less: Value of Ground Lease (6% Cap Rate) (6) (37,465,889) -less: Cost of Sale (2% ) (4,545,580) -less: Senior Debt (68,872,524) -add: Working Capital 3,234,000 Net Sale Proceeds 157,094,908 Net Annual Cash Flow $ (39,004,906) $ 1,137,526 $ 4,008,650 $ 5,402,386 $ 6,013,496 $ 4,736,706 $ 6,938,228 $ 7,486,690 $ 8,038,763 $ 8,580,386 $ 166,281,007 Equity IRR 18.72% Notes: (1) Operations begin March 1, 2017 (2) FF&E Reserve calculated as 4% of Total Hotel Revenue; Apartment Replacement Reserve calculated as $300 / unit / year trending at 3.0% (3) Senior Loan is Interest-Only for the first 36 months (4) Calculated as 3.0% of HTC Investor's equity plus a Year-5 sale put payment equal to 5.0% of its equity (5) Calculated as the value of the fee-simple interest in the property (6) Value discount for lease-hold interest in the property based on the annual lease payment 48

49 FINANCIAL TERMS Miller & Rhoads Richmond (HRI Owned / HRI Lodging managed)

50 D. FINANCIAL TERMS 1. Construction period during the Construction Period [to be determined]. 2. An annual rent for the term of the lease in the $1,800,000 range, which will be adjusted annually based upon an agree adjustment method [to be determined]. HRI is open to working with Landlord to negotiate a percentage rent and sale participation structure in the lease. 3. The project will apply for and will have the Landlord s support of a Restoration Tax Abatement ( RTA ) as it is a qualifying restoration project. The benefit of the RTA to the city of New Orleans is the ability to provide increased rent during the abatement period and the City s ability to retain 100% of the lease payment for its general operating fund. The lease will contain language by the Landlord that it will support the Tenant s RTA application. 50

51 OTHER REQUIREMENTS King Edward Hotel (HRI owned / HRIL managed

52 E. OTHER REQUIREMENTS 1. Completed forms are attached hereto, including: a) Conflict of Interest Disclosure Affidavit Attachment A b) Statement of Veracity Attachment B c) Disadvantaged Business Enterprise Participation Plan Attachment C 2. DBE HRI will require its general contractor to provide its DBE plan and to insure all efforts will be taken to achieve the 35% DBE requirement. HRI and its selected general contractors have successfully achieved strong DBE participation in all projects on which it has worked with the City of New Orleans. The Office of Supplier Diversity Equal Business Opportunity Programs for Disadvantaged Business Enterprise Participation Plan guidelines and its Good Faith Efforts will be used to establish the DBE plan for the project, including Pre-Bid meetings, Small Contracts, Follow-Up, Advertisement, Good Faith Negotiations, Information, Written Notices, Community Resources utilization and maintenance of Contract records. 3. Key Lease terms F. No Subordination acceptable G. Term 99 years is acceptable H. Improvements all capital improvements to become part of the realty upon lease termination is acceptable I. Reserves a capital improvement and reserve fund will be maintained as required by the hotel brand or lender, whichever is greater J. Property Condition As Is is acceptable K. Assignment the lease will be assignable to a Qualified Assignee, as defined in the Lease, as that term is defined in similar leases L. Performance Milestones subject to force majeure, or the expiration of the Louisiana State Historic Tax Credit program hotel brand approval, National Park Service approval and Lender approval, the Lease will require commencement of construction within a mutually agreed upon timeframe acceptable M. Operation / Management Andaz will be an approved brand or a Successor Franchise Agreement with an Upper Upscale national hotel franchise will also be an approved brand. HRI Lodging, LLC will be an approved hotel manager and HRI Management, LLC will be an approved apartment manager. 52

53 D. OTHER REQUIREMENTS Conflict of Interest Disclosure Affidavit Attachment A 53

54 D. OTHER REQUIREMENTS Statement of Veracity Attachment B 54

55 D. OTHER REQUIREMENTS Disadvantaged Business Enterprise Participation Plan Attachment C 55

56 D. OTHER REQUIREMENTS Disadvantaged Business Enterprise Participation Plan Attachment C 56