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1 . NATURE OF THE ASSIGNMENT <br /> ill . <br /> _ Charlie Hall, principal of Mounds Vista Inc, owner of The Mermaid Supper Club, engaged <br /> JLC Marketing Associates to produce a Market Analysis & Economic Feasibility Study for a <br /> proposed new hotel development in conjunction with an existing restaurant, sports bar, <br /> nightclub and bowling lanes in Mounds View, a northern suburb of Minneapolis-St. Paul, <br /> Minnesota. <br /> Mr. Hall has investigated the possibility of acquiring adjacent land parcels to accommodate <br /> the hotel and additional parking. He has commissioned Construction Design & Estimating <br /> to do preliminary site planning, and he has received certain approvals and encouragement <br /> from the City of Mounds View regarding tax increment financing. <br /> Now, Charlie Hall wants to know what area demand exists for additional hotel rooms in the <br /> Mounds View market. How many rooms, if any, should be built? What type of hotel and <br /> facilities should be constructed? What types of customers would use the hotel? What are <br /> the consumer needs and expectations regarding the facilities, services, price and quality of <br /> the proposed hotel? What franchise brand might be needed? Who would manage the <br /> hotel? What revenues could be generated? And with competent management and <br /> • effective marketing, what would be the expenses and cash flow that could be generated to <br /> support the debt service for such a hotel project? In other words, is the project <br /> economically feasibility? And to what extent can Charlie Hall increase the value of his <br /> current asset by adding a hotel? <br /> Much of the success of the proposed hotel is incorporated in the nature of the consumer <br /> demand for more lodging and meeting facilities in the Mounds View area. To further <br /> quantify the hotel room night demand and meeting space demand with a higher degree of <br /> accuracy, JLC Marketing Associates established a methgdology to interview the major <br /> demand generators and the competitive hotel owner/managers in the market area. As a <br /> result, we obtained a large amount of reliable information and evidence to support our <br /> conclusions, recommendations and financial projections. <br /> This is an independent report of factual data. Although commissioned by Mr. Hall, any <br /> prospective investors or lenders, who read this report, may rely on its objectivity. Our <br /> recommendations and forecasts in this report are based upon our best judgment and <br /> experience as professional independent hospitality consultants. If you have any questions, <br /> please call: <br /> Jeff Coy President 507 289-7404 <br /> Morgan Nederhiser Vice President 507 643-6982 <br /> III <br /> 1 <br />