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Mr. Kevin Carroll <br /> . January 22, 1999 <br /> Page 4 <br /> CONCLUSION <br /> This clearly demonstrates that the hotel project will be important to the City at large, meeting <br /> needs that are not currently met by existing City facilities and resulting in significant spinoff <br /> business to benefit other economic sectors of the City. <br /> As the City is aware, a number of Developers have examined the prospect of building a hotel and <br /> banquet center on the Mermaid site, but have declined to do so because of the inability to meet <br /> project and operating costs without (i) the equity of the existing real estate and improvements to <br /> the Project; and (ii)the availability of tax increment financing proceeds to assist in financing the <br /> project costs. In other words, if a hotel banquet center is to be constructed, the cooperation of <br /> the City is needed. <br /> On behalf of my client, I recommend and request that the provisions relating to cash equity and <br /> the requirement that my client's deposit a sum of cash in addition to committing the land and the <br /> improvements to the Project be deleted. My client's will already incur substantial expense in <br /> connection with acquiring additional properties and integrating the hotel and banquet.center to <br /> 4110 the existing complex. To require them to submit to yourrequirement of cash equity ignores the <br /> fact that by doing so they would only dilute the equity in the Project by forcing my client to <br /> incur unnecessary financing expense in connection with borrowing and using the existing real <br /> estate and complex as collateral. <br /> Obviously, there will need to be other changes made to the revised Development Agreement <br /> relating to the Commencement Date and Completion Date of the Project. In addition, because <br /> of the significant personal commitment my client's have made to the Project, we are requesting <br /> that any reference of a personal Guaranty of the Tax Increment shortfall Guaranty be deleted. <br /> My client also recognizes the significant commitment it will make to the City with respect to the <br /> regional stormwater holding pond referenced in paragraph 3.6 of the revised Development <br /> Agreement. <br /> I will look forward to supplementing this information in any manner that you may request and <br /> trust that this response will better identify both the parties and the nature of the transaction. <br /> Since / <br /> 4 <br /> Chris H. Berndt <br /> CHB/smp <br /> • cc: Hall, LLC <br /> John F. Seibert <br />