01-28-1999 - Laserfiche WebLink

Home Browse Search

Mr. Kevin Carroll January 22, 1999 • Page 3 need to be acquired by the Developer to facilitate the Project will be committed to the Project. The existing debt against the Mermaid complex is approximately $750,000.00, the amount used to improve the existing bowling complex in 1998. This nominal debt that exists against the Mermaid is a result of the Hall family's commitment to reduced debt against properties to enhance operational goals. REVISED AND RESTATED PROJECT COSTS The Developer's consultant, John F. Seibert, has revised the hotel and banquet project costs to reflect the current project scope and expenses incurred by the Developer. The costs do not identify any expense incurred by the Developer in connection with acquiring the existing land and Mermaid complex. Because Moundsvista, Inc., the Mermaid, Inc. and the Developer are related parties, the economics of that transaction are not relevant in considering the level of commitment of the Halls, except to state that the Developer could meet a substantial requirement of cash equity towards the Project, but to do so would only be to unnecessarily encumber the existing Mermaid complex with debt the proceeds of which would go to a related party. The only result of such a transaction requirement would be to require the Halls to unnecessarily incur expenses • related to financing that would not directly benefit the Project. In other words, the Halls could easily borrow significantmonies against the existing Mermaid complex for the purposes of re- committing that as equity to the Project, but for the purposes of good lending business practices, the Halls would simply be moving the asset from its right pocket to its left pocket. The cash equity requirement should not unnecessarily penalize the Halls since they have endeavored to keep the debt on their existing project as low as possible. PROJECT REVENUE SPINOFF Mr. Seibert has recently acquired the summary financial data with respect to the average daily dollars spent by a patron of a hotel in the north metro area. For the year 1996, such information reflects-that the-average-expenditure per party ger day was$188.00.It-is projected that the per -— diem expenditure will be raised to $200.00 per day in the calendar 1999. The revenue expended by a visiting party to the hotel, it is broken down in the following manner: 29.6% Lodging 23.6% Food and Beverage 16.6% Transportation 16.2% Entertainment and Recreation 14.0% Other-Retail 411