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RES 2016-1602 - World Hotel TIF redevelopment project plan ompt"A A'fa4, - Planning Department .L 9J Omaha/Douglas Civic Center 1819 Farnam Street,Suite 1100 1Wv James R.Thele City of Omaha Director Jean Stothert,Mayor November 22, 2016 Honorable President and Members of the City Council, The attached Resolution transmits the World Hotel Tax Increment Financing (TIF) Redevelopment Project Plan for a redevelopment site located at 203 South 18th Street. This redevelopment project site will be an adaptive re-use and conversion of an older, vacant office building with some historic significance into a boutique hotel. The office building, called the "World Building", was built in 1913 and was the headquarters for World Insurance Company. Woodmen of the World Life Insurance Company purchased the building in 1987 and utilized the building for office space until it moved to the newer 30-story building along 17th & Farnam Streets. Viallova Development and Clarity Development have partnered to transform the "World Building" into a boutique hotel. Viallova Development is a small firm with offices in Chattanooga, Tennessee and Atlanta, Georgia that specializes in multi-family and hospitality developments, with a focus on 2nd and 3rd tier cities in the southeast and Midwest sections of the country. The building is not currently listed on the National Register of Historic Places, but development team is investigating whether the structure has retained enough historic characteristics to qualify for a historic designation, and if so, will consider using historic tax credits to finance a portion of the project. The redevelopment project will involve a complete overhaul of the interior of the World Building to include new plumbing, electrical, and framing throughout. The result will be a 90 room boutique hotel with two meeting rooms, a banquet hall, rooftop restaurant and gym. Recent negotiations with Woodmen of the World should result in a portion of their parking garage being dedicated to the World Hotel. Approximately 40 new jobs are anticipated as a result of this project. The Planning Board recommended the approval of this Redevelopment Project Plan at the November 2, 2016 public hearing. The Redevelopment Project Plan recommends the City's participation in the redevelopment of this project site through the allocation of TIF in an amount up to $1,900,000.00. TIF will be used to offset eligible expenses for acquisition, hard construction costs, infrastructure and non- room costs (the rehabilitation of the building itself), architectural and engineering fees and public improvements as required, to include $25,000.00 of the TIF proceeds contributed towards the Downtown Public Improvement Fund. The total estimated project costs are $13,573,195.00, but are subject to change as final costs come in. Your favorable consideration of this Resolution will be appreciated. Respectfully submitted, Referred to City Council for Consideration: g . '11.4_ 1(1,1„. Il ames R. Thele w.1/4_, Date Mayor's Office Date Planning Director A444 $�� // 9SCurtiss ate obert G. Stubbe, P.E. Date Finance Director 1 Public Works Director 2451 dlh Notice of Publication: November 24, 2016 and December 1, 2016 Public Hearing: December 13, 2016 A. Survey DOUGLAS STRELI T - «A.E ar�e.aor) — - - — - 0mn N _ - B°. Cure Drivewa Curb w°50�--� Sidewalk Sidewalk W_j S 0 09_- , �,E aa:M=E6 00 50' ROW °3axe /�' Builder Overhang_ _L ®C.3' 7.----5,„` LH Property Line .Building re I' 4'3't G]^� 1 nlel y b Post Property er e I 0 :he Building ipP 3.3'Wes_rnof o ° corner Build.ny corer c 73 PO'eln9 Q Pon,,,aoa,l,m M t r . r On'�' L., 0 I e 7 STORY a BUILDING Cl cq; BDIs se -. I� III 1, II 1 w w °agl m v o oi o -rJ Builainy Lne L p (Party wale �� _ i Property Lines ii .s°ud,eo me \-__---' -Ili I Volpe � - Building Line^Lar�rea�&o�a 50' Row B°x s�I +% Vu^3, m' Property Corner i.e. Cc- II der trash L_— . p rcsoe.ou Glee t nand. G ; , ,�L SKIWALK Tele I I—S ,SK YRAALK YOw^mwmq I ppi L S'dewal, ILL Ll IL4 -I 'rn r_I1 IEL L_II L� LL__T L�L_L__J La LLL__J LL��L1__J 1 L_L_-J ♦ N 89'5(5'31"W P&M=66.00' N,...(' G`'ryVaults Building Lire CtOR PAPER deaccess „j mot..or THE WORLD LEE MS I. SPECIAL EXCEPTION 011 TITLE COMMCMENT ENCROACHMENT SCHEDULF _EGAL DESCRIPTION CACAO TALE [COMPANY Sa.rh. ..Cry, prosko. .nnai/2..torso.lay na9maprvan rho ammi men P .:u _. u ..m. n unxc 1xE Exzs Pwa[R1r uxE,♦s sroMx manRrn.c RRpamr. SURVEYOR'S CERTI VCUTo mePr r rts m..n Hare. .ry n°a..mm ev.r..[oar IC. A v SNOW L o., 5gic 1N[rwmN c a'r PRrog ux[, SIRE °M.NA LL ,LLC,n rive' SZIAll'u51 xE55 nOTIL'i rf'ffla,and LIRi ORE 4_c=,., ' "''""'. Sno... a a u.n. .ny.. y enr over me E.M i0.r 'u� souvr c.uoxc m.SOU,PO mN or 10E oEmvrvn_a. r of s based ^ 2.1.i9i6..n eeer FA .. -I.tt-vne!late.Ne yap , u e TA/NPPsr to ed d ro1,3e no ALIA and Lim aN01.R:llhHO. inn I.a� ,0, ,16..n 9us1 309 ve 4p'.*b cay..ne eve o .nr 'e..m re a wA+ueusr awn Oro 1.5-1113 6 q m.m nae/s b°+n age Sr.5....am.x°.. rnn cenv a dry Ate•" TO-AL AREA 9372E SC ACRES I FGEND ZONING NOTES ALTA/NSPS LAND TITLE SURVEY SLµcE WOODMAN p.' FLOOD GONE 203 So. 18th STREET L " -rxo OMAHA, NEBRASKA (id-CORREEPON: ma[.MNnMENr w.w,x[.awR..xm;„.,�,yT..R.xa a..,x..,,[W ,- PREPARED BY: p_CORRESPONDS TO ENVRO.CN[rEWS GENERAL CORES K S M LAND SURVEYING INC. GRAPH:0 SCALE 6611 SOUTHFORK CIRCLE,LINCOLN.NE CHOIR - PHONE(a02)036-3020 FAT(a02)J76-3138 _5 IOD ra sw.r[roR+s Prot Parnv.L.L.u1[.m-urrunwpn.o uuuN[s' SCALE 1"=10' I DATE. 0-30-2016 I PROT#1608030 16 EXHIBIT "B" WORLD HOTEL TIF REDEVELOPMENT PROJECT PLAN 203 SOUTH 18111 STREET DECEMBER 2016 1 cMAHA,Ar 1111 Cai/ r • _ "i b�b (,,ettic4,-.4,1E1, PA - ti, 04?44D FEIOP' PLANNING• OMAHA Jean Stothert, Mayor City of Omaha James Thele, Director Planning Department Omaha/Douglas Civic Center 1819 Farnam Street, Ste. 1111 Omaha, Nebraska 68183 INTER-OFFICE COMMUNICATION City of Omaha,Nebraska Planning Department TO: Chairman and Members of the Planning Board FROM: James Thele,Planning Director DATE: October 26,2016 SUBJECT: World Hotel TIF Redevelopment Project Plan 203 South 18th Street Case#C3-16-278 Project Description This redevelopment project site will be an adaptive re-use and conversion of an older office building with some historic significance into a boutique hotel; the flag of a well-known and respected hotel brand. The flag for this hotel is currently under review. The building is not listed on the National Register of Historic Places. The development team is investigating the probability of a historic designation;the structure may not have enough historic characteristics to qualify due to various alterations over the years. Historic Tax Credits may be considered; however, this is dependent on the outcome of the historic designation investigation. The building currently sits vacant at 18th and Douglas in the shadow of the Woodmen of the World Tower. This office building, called the "World Building", was built in 1913 and was the headquarters for World Insurance Company. Woodmen of the World Life Insurance Company purchased the building in 1987 and utilized the building for office space until it moved to the newer 30-story building along 17th and Farnam Streets. The Viallova Development and Clarity Development have partnered to completely transform the "World Building"into a boutique hotel. Viallova Development is a small firm with offices in Chattanooga, Tennessee and Atlanta,Georgia that specializes in multi-family and hospitality developments,with a focus on 2nd and 3rd tier cities in the southeast and midwest sections of the country. The redevelopment project will involve a complete overhaul of the interior of the World Building to include new plumbing,electrical,and framing throughout. The result will be a 90 room boutique hotel, with two meeting rooms,a banquet hall,restaurant,and gym. Recent negotiations with Woodmen of the World should result in a portion of their parking garage being dedicated to the World Hotel,to include the provison of concierge. Jobs created as a result of this project will be hospitality service-oriented jobs. Employment Information Permanent Jobs(FTE)to be CREATED 40 Permanent Jobs(FTE)to be RETAINED 0 Permanent Jobs(FTE) to be RELOCATED 0 TOTAL 40 Anticipated Annual Payroll(Each) $41,600 Estimated number of construction jobs created as a result of this project 50 *Jobs will be retail type of jobs-cooks,servers,bartenders,hotel staff,salespersons&general proprietors The applicant anticipates completion by June of 2018. BH No Building Permit will be issued based on a site plan that does not comply with theprovisions of the Zoning Ordinance. The project site is located within a Community Redevelopment Area,meets the requirements of Nebraska Community Development Law and qualifies for the submission of an application for the utilization of Tax Increment Financing to cover costs associated with project development as submitted for approval through the Tax Increment Financing process. The project is or will be in compliance with the Master Plan,appropriate Ordinances and development regulations of the City. DEPARTMENT RECOMMENDATION:Approval. ATTACHMENTS General Vicinity Map Project Plan BH r::','-'71 11111M. ' ' '' ', .::ii MINI . legi l9 m t ya �o 1O S 15th St . VN �._ _ o+ vt �i�',T .+ O l9 4 y . - co c V * (n T CI III r _,_.. __ _ 0 "Y` - S 16th St n -, I. m L S 17th St yyy t. 0- , lS Los L S - -D_ ' ,: ` • : :: ' l '—' :7":1'. !-C13' ti Nr: S 1am St ' - 3� r. S ,tgthSr,__,, : _ o -. -S 19th St P: 4� d !� �' � � - - - - rn I , 30 p — 0 t t _ t ��q,,,, 5 20th St ., i• - Ln N N ' 0' P' -nJ .. 0 � , c 11/212016 ImageServlet(640x480) ,a.' i x I , • v4R''t 1 F 6 ,.- JULY 2014 DOUGLAS COUNTY ASSESSOR 1/1 http://douglascone.wgxtreme.com/java/wgx_douglasne/ImageServlet?type=photo&accounted=R0311010000&econarea=23&bldgid=1 3 CASE: C3-16-278 APPLICANT: Planning Department on behalf of the City of Omaha REQUEST: Approval of the WORLD HOTEL TIF REDEVELOPMENT PROJECT PLAN LOCATION: 203 South 18th Street SUBJECT AREA IS SHADED - NOVEMBER 2016 I • • ■ CBD-ACI-1(PL) ■ ■ ■ ■ • U • 1. . ■ ' r • a { CBD-ACI-1(PL) � ■ CBD-ACI-1(PL)■ • '1 • co ■ ' CBD-ACI-1(PL) • •■ ' • ■ a . a ■' a •a , i , ____ Douglas St 1 r CBD-ACI-1(PL) . CBD-ACI-1(PL) cr, . CBD=ACI=1.(PL') E CBD-ACI-1(PL) U) I 1 1 Far-nam-St , r ' CBD-ACI-1(PL) CBD,ACI-1(PL) a } omaha • ee N aO9 0 300 Deo INTER-OFFICE COMMUNICATION Date: October 12, 2016 To: TIF Committee: James Thele, Stephen Curtiss,AL Herink, Paul Kratz,Robert Stubbe,Todd Pfitzer,Cassie Paben, Gail Braun From: Bridget A. Hadley-City Planning Applicant: City of Omaha Planning Department Project Name: World Hotel TIF Redevelopment Project Plan Location: 203 South 18th Street Request: The TIF request is for up to $1,900,000, at a bank interest rate of 5.0%. Using the levy rate of 2.23039% and other assumptions of both TIF calculation spreadsheets (both the cost approach and the market approach) supports the TIF request. See attached TIF calculation spreadsheet. Using the cost approach assumptions,the final incremental value is lower,and the project would use the full term to payoff. Using the market approach assumptions results in a higher final incremental value, and thus the project would payoff prior to the end of the 15 year term. TIF Fee Schedule: $500 application fee paid; the processing fee of$3,000 will be collected; $21,000 in administrative fees will be collected. Total fees will be $24,500. TIF Justification The project site is located within a Community Redevelopment Area, meets the requirements of Nebraska Community Development Law and qualifies for the submission of an application for the utilization of Tax Increment Financing to cover costs associated with project development as submitted for approval through the Tax Increment Financing process. The project is/or will be in compliance with the Master Plan, appropriate Ordinances and development regulations of the City. This redevelopment project plan will help restore another downtown office structure to a productive use. The plan supports goals of the 2030 Downtown Master Plan and the overall City Master Plan through the re-utilization of a vacant structure in the downtown core, preservation of a structure with some historic significance, and restoration of pedestrian activity to the area with renewed occupancy of the structure. This potential boutique hotel will add to the economic activities necessary to keep Downtown Omaha as a strong and viable community as hotel guests visit and spend money at nearby restaurants and entertainment venues. Ultimately,this project plan will enhance the tax base for various taxing jurisdictions. TIF will be used to offset costs such as acquisition, hard construction costs, infrastructure and non-room costs (part of rehab of the building), architectural and engineering fees and public improvements as required. The total estimated project costs are $13,573,195. TIF eligible costs are as follows: TIF Eligible Expenses: Building Acquisition $1,500,000 Hard Construction Cost $6,000,000 *Other Construction: Total Infrastructure&Non-Room Cost $1,900,000 Architecture&Engineering (5%of hard costs) $ 300,000 Subtotal $9,700,000 TIF Fees $ 24,500 Total TIF Eligible Expenses $9,724,500 *Note: Total Infrastructure&Non-Room Cost does not include Restaurant&Bar Equipment Public Improvements(included above) $30,000 - Exterior Paving and Lighting $10,000 - Streetscapes and Landscaping ROW $20,000 The TIF is 14%of the total project costs. Recommendation: Approval Project Description This redevelopment project site will be an adaptive re-use and conversion of an older office building with some historic significance into a boutique hotel; the flag of a well-known and respected hotel brand. The flag for this hotel is currently under review. The building is not listed on the National Register of Historic Places. The development team is investigating the probability of a historic designation; the structure may not have enough historic characteristics to qualify due to various alterations over the years. Historic Tax Credits may be considered; however, this is dependent on the outcome of the historic designation investigation. The building currently sits vacant at 18t'' & Douglas in the shadow of the Woodmen of the World Tower. This office building, called the "World Building", was built in 1913 and was the headquarters for World Insurance Company. Woodmen of the World Life Insurance Company purchased the building in 1987 and utilized the building for office space until it moved to the newer 30-story building along 17th & Farnam Streets. The Viallova Development and Clarity Development have partnered to completely transform the "World Building"into a boutique hotel. Viallova Development is a small firm with offices in Chattanooga, Tennessee and Atlanta,Georgia that specializes in multi-family and hospitality developments,with a focus on 2nd and 3`d tier cities in the southeast and midwest sections of the country. The redevelopment project will involve a complete overhaul of the interior of the World Building to include new plumbing, electrical, and framing throughout. The result will be a 90 room boutique hotel, with two meeting rooms, a banquet hall, restaurant, and gym. Recent negotiations with Woodmen of the World should result in a portion of their parking garage being dedicated to the World Hotel,to include the provison of concierge. Jobs created as a result of this project will be hospitality service-oriented jobs. Employment Information Permanent Jobs(FTE)to be CREATED 40 Permanent Jobs(FTE)to be RETAINED 0 Permanent Jobs(FTE)to be RELOCATED 0 TOTAL 40 Anticipated Annual Payroll(Each) $41,600 Estimated number of construction jobs created as a result of this project 50 *Jobs will be retail type of jobs-cooks,servers,bartenders,hotel staff, salespersons&general proprietors The applicant anticipates completion by June of 2018. Project Finance Summary- Sources& Uses Sources of Funds Owner Equity $2,345,348 *Bank Construction Loan—SSC Loan Investments, LLC' $ 9,327,847 TIF -Mutual of Omaha Bank, 5% $ 1,900,000 Total $13,573,195 Uses of Funds Property Acquisition $ 1,500,000 Infrastructure and Non-room Costs $ 2,025,000 Hard Cost Construction $6,000,000 Total Owner Purchases $ 1,800,231 Total Soft Costs $ 1,490,588 Project Management $ 250,000 Contingency $ 477,376 TIF admin fees $ 15,000 *TIF Voluntary Contribution(for the Downtown Public $ 15,000 Improvement Fund)3 Total Uses $13,573,195 *Notes: 1)SSC Investments, LLC is a mezzanine lender chosen by the investors;Mutual may replace this lender. 2) The owners re-negotiated the sales price down to$1.5M 3)Per the TIF Contribution Policy, a TIF contribution is 3%of the TIF loan, which would be about $57,000; We could accept a lower suggested amount of$25,000. Final Valuation Discussion The projects the post-rehab valuation to be approximately $11,530,000 using the income capitalization approach and a 6.75%cap rate($775,000/.0675=—$11,500,000). Land Use and Zoning The current use is vacant office space. The proposed use is a hotel. This building is currently zoned CBD-ACI-1 (PL). Rezoning will not be necessary for this project. Utilities and Public Improvements Standard utilities(electrical, water, sewer)exist at the site. The public improvements to be constructed along with the project are sidewalks, curbs, and streetscaping -decorative lighting. Transportation No transportation issues noted. Mandatory Criteria—from the application Mandatory Criteria#1: The project is located within an area that is eligible for designation as a community redevelopment area. Community Development Law 18-2103(20)states"community redevelopment are"means a"substandard and blighted area which the committee redevelopment authority designates as appropriate for a renewal project." World Hotel site is a community redevelopment area because it satisfies the Community Development Law's definitions of a"substandard area" and"blighted area." First,the project area qualifies as a"substandard area"under 18-2103 (10)because the combination of the high density of population and the dilapidation, deterioration, age or obsolescence, of the majority of the buildings in the area is conducive to crime and ill health, and is detrimental to the public safety and welfare. Second,the project area qualifyes as a"blighted area" because it satisfies the requirements of both 18- 2103(11)(a)and(b). The project area satisfies subsection(a)because the combination of certain factors, specifically,the presence of a substantial number of deteriorating structures,deterioration of site and other improvements in nearby commercial lots,and diversity of ownership, substantially impairs the sound growth of the community and retards the provision of quality housing accommodations. The project area satisfies subsection(b)because the average age of the residential units in the area is at least forty years. Mandatory Criteria#2: The use of Tax Increment Financing will not result in a loss of preexisting tax revenues to the city and other taxing jurisdictions. A portion of the revenue will be utilized to pay the Tax Increment Financing Note,which will come from additional valuation resulting from the improvements to be constructed on the site. The tax received from the increased taxable valuations will be more than sufficient to support the Tax Increment Financing and will not result in a loss of preexisting tax revenues. Mandatory Criteria#3: As set forth above,the project is not economically feasible without the use of Tax Increment Financing. TIF provides a necessary gap financing that is critical to the capital stack due to the considerable cost of the development given the "Class A" facilities the developer wishes to create and the lack of alternate subsidies for market rate residential developments. Furthermore,based upon the projection set forth above, it is reasonable to conclude that this project would not occur in this area without TIF, given the construction costs involved. Mandatory Criteria#4 The project furthers the objective of the City's Master Plan and by providing housing, furthering job creation, and contributing to business growth and expansion. Cost Benefit Analysis—from the application 1. The use of Tax Increment Financing for this project will result in a tax shift for the City of Omaha. The increased value of revenues,resulting from the improvements,will be applied to the eligible cost. Ultimately,the TIF note will be paid off and the result will be a tax shift in favor of the community. 2. Community public services currently exist in the area. The proposed TIF will be used to make required public infrastructure improvements,which is an eligible expense. The development of the dilapidated site will enhance business development in the area and provide needed hotel services to the local residential and business community. In this case, a vacated building will once again be brought back to life. This is very important for the community as it demonstrates a healthy and vibrant society. 3. This development will impact other businesses in the area as it increases traffic and availability of retail,dining and housing services in the surrounding community. The new commercial facilities will produce numerous employment opportunities. 4. The current property tax system is able to accommodate the development. Furthermore,the long- term benefit resulting from an increase in the tax base from the development is another valid reason to approve TIF assistance for this project. 5. Impacts on employers and employees within the city and the immediate area: This development will impact other businesses in the area as it increases traffic and availability of retail, dining and housing services in the surrounding community. The new commercial facilities will produce numerous employment opportunities. Hotels have a means of bolstering the local economy. More hotels in the downtown corridor provide Omaha the means to support large national conventions and activities like the US Olympic Swim Trials and College World Series,which have been instrumental in keeping the local economy strong. 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Spring St. SE Suite 285 Smyrna, GA 30080 Estimated Total Project Cost: TIF Request: $ 13,575,000.00 $1,900,000.00 New Construction: No Proposed Project Size: Rehabilitation: Yes Gross Sq. Ft. (Bldg(s)): 60,984 Net Sq. Ft. (Bldg(S)): 60,984 Acres: .21 Lot/Parcel Sizes: - .21 acres/ 9,372 sq ft LIHTC Project:No Market-Rate Project:Yes Address Current Use Current Zoning Land Value Improvement Total 203 S 18th St Office Space CBD-ACI-1(PL) $0.00 $0.00 $0.00 Current Annual Real Estate Taxes ( 2015 tax year): $ 83,025.18 Current Assessed Tax Valuation ( 2016 tax year): Land: $ 0.00 Improvements: $0.00 Total: $0.00* *The current building is marked as a non for profit status and thereby does not have a tax assessment. The development team has been in touch with the Douglas County Assessor regarding the matter since the inception of the contract. It is understood that a beginning assessment will not be 0 for the purposes of TIF. The Assessor is still deliberating however, for the purposes of this application a beginning assessed value is anticipated to be $1,250,000. 2 World Hotel 203 S 18th St Omaha NE, 68102 Project Directory Owner/Developer: Property Owner: 18th Street Omaha, LLC Developer:Viallova Development North America 817 Broad St Suite 200 Chattanooga,Tennessee 37402 Vyomesh Desai Vyomesh.desai@vianovadevelopment.corn 423.400.3308 Nirav Shah Niray.shah@vianovadevelopment.com 404.668.5421 Neil Kapadia Neil.kapadia@vianovadevelopment.com 412.412.3270 Clarity Development Company, LLC 144 S 39th St, Suite 2B Omaha, NE 68131 Tom McLeay tmcleay@claritydevco.corn (402) 516-8881 Mike Peter mpeter@ claritydevco.corn (402) 525-7626 3 Biography of Project Team Viallova Development North America Viallova Development is a full-service,vertically integrated multi-family property and hotel investment, development,and management company that prides itself on its proven entrepreneurial and strategic approach to investment placement. Currently focusing on developing a portfolio of properties with historic significance under the brand of"Heritage Properties" across the Southeastern and Midwestern United States,Viallova is looking to restore historic buildings by working with local General Contractors and lenders.Viallova's core belief is that integrating with local management is a key success factor and that local partnerships are required. See attachment G—Management Team, for more information. Clarity Development Clarity Development,whose Principals have been involved in the development of over$100 million in multifamily real estate nationwide,bring depth and experience from inception to completion and stabilization of the project. With wide-ranging experience with Tax Increment Financing(TIF),Low Income Housing Tax Credits (LIHTC) —particularly the 4% Credit and tax-exempt bonds,Historic Tax Credits (HTC) —both state and federal,New Market Tax Credits (NMTC), EB-5 (both direct investment and through Regional Centers), HOME Investment Partnerships Program (HOME) grants, Community Development Block Grants (CDBG), and Federal Home Loan Bank's (FHLB) Affordable Housing Program. 4 I. NARRATIVE A. Description of project The project being developed by Viallova Development and Clarity Development will convert the iconic World Building on 18`''St. and Douglas St. into a 90- room boutique hotel while preserving original historic elements of the World Building and incorporating details related to the history of Woodmen of the World and Omaha itself. The World Building was built in 1912 and was the headquarters of the Woodmen of the World until 1969,when they moved to the new 30-story building. The building has not been utilized since 2014. Due to the historic nature and significance of the World Building to the City of Omaha,a historic renovation of the building that once buzzed with life throughout its corridors and helped forge Omaha into a national icon, has been planned. Located right off of the Douglas St. corridor, the renovation of this building into a Boutique Hotel will invigorate Douglas St. and bring life to an area that has been overlooked during the course of redevelopment in the Downtown Omaha area. Renovations are to include a complete overhaul of the interior of the World Building to include new plumbing,electrical,and framing throughout: 90 rooms,2 meeting rooms, banquet hall,restaurant, and gym. This is in addition to the task of bringing everything up to current codes. While not yet confirmed as further study is needed,there is a possibility the project will adhere to State and National Historic rehabilitation guidelines. Recent negotiations with Woodman of the World have been made to dedicate a portion of their parking garage to the World Hotel,providing concierge parking for their guests. The developer's application is currently under review for the flag of the hotel. While this is to remain confidential for the time being, this brand can be described as independent, unique, four& five star, backed by one of the most prominent hotel companies in the world. This brand is known for offering a luxury experience amongst historic buildings with modern amenities. Overall,Viallova is very interested in investing in the World Building in Omaha. Situated in an area surrounded by businesses like: Woodman of the World,First National Building,and the Court House,World Hotel will fill the demand for meeting spaces and lodging. The venture will entail 90-rooms for, a gourmet restaurant, rooftop bar, fitness center,business center, and meeting rooms. This project will greatly serve Omaha as it its location will increase options for government and private business lodgings. B. Land Use Plan 203 S 18th St: Current Use: Office Space Proposed Use: Hotel The applicant will renovate the World Tower in to a boutique hotel consisting of 90- rooms, a gourmet restaurant,rooftop bar, fitness center,business center,and meeting rooms. 5 C. Zoning-Current and Proposed This parcel is presently zoned CBD-ACI-1 (PL). Because the use of the property fits within current zoning regulations,rezoning will not be necessary for this project. 808), 111 1805 t_ 1705 214 206 ,;.. 20 9 ..a 208 r. cn 2 22 2 25 rill, 1700 1 Farnam St D. Public Improvements The following public improvements will be constructed along with the project: 1. Sidewalks and Curbs 2. Streetscapes with Landscaping 3. Decorative Lighting 6 II. DEVELOPMENT FINANCING PLAN A. Sources&Uses.Construction Budget.Pro Forma.and Project Timeline Hotel Curio Sources and Uses Sources Perm Loan 9,327,847 TIF 1,900,000 Equity 2,345,348 Total Sources 13,573,195 Uses Property Aquis do n 1,500,000 Infrastructure and Non Room Costs 2,025,000 Hard Cost Construction 6,000,000 Total Soft Costs 1,490,588 Total Owner Purdiases 1,800,231 Project Management 250,000 Contingency 477,376 TIF Admin Fees 15,000 TIF Voluntary Contribution 15,000 Total Uses 13,573,195 Itemized Public Improvements(In above line items) Exterior Paving and Lighting 10,000 Landscaping-Streetscapes and Landscaping ROW 20,000 Total Construction Contract 30,000 TIF Eligible Costs(In above line items) TIF Hard Costs (See Construction Contract Total) 7,900,000 TIF Fees 30,000 Total TIF Eligible Costs 7,930,000 Total Project Costs 13,573,195 Total Project Value 13,573,195 7 Post-Rehab Valuation and TIF Request: The post-rehab valuation is approximately$11,530,000. This is supported by the use of the income capitalization approach and a 6.75% cap rate ($775,000/.0675= —$11,500,000). The TIF request of$1,900,000 is reasonable because,when utilizing the post-rehab valuation of$11,530,000, an initial taxable valuation of$1,250,000 and a 5%interest rate, the loan potential,inclusive of capitalized interest,is $1,900,000. 8 III.World Hotel Construction Budget Hotel Curio-World Building-Omaha,NE Total Units 90 Line Item Amount Per Key Existing Building/Land Cost 1,500,000 16,667 Infrastructure&Non-Room Cost - - Ground Floor Storefront 150,000 1,667 Elevator Upgrades 250,000 2,778 Light Well/Common Costs 500,000 5,556 Asbestors Abatement -Restaurant/Bar Equipment 125,000 1,389 Lobby/Rooftop 1,000,000 11,111 Total Infrastructure&Non-Room Cost 2,025,000 22,500 Hard Construction Cost 6,000,000 66,667 Parking Cost - - Architectural and Engineering 300,000 3,333 Construction Inspections 15,000 167 Tax Credit Consultant Fees 10,588 118 Legal/Amounting fees 140,000 1,556 Insurance 35,000 389 Taxes(property,F&E,business,etc) 75,000 833 Impact/tap fees - - Closing costs-hand,Constr/Perm Loan 300,000 3,333 Feasibility,appraisal,environmental studies 15,000 167 Construction interest 500,000 5,556 Initial franchise fees 75,000 833 Miscellaneous 25,000 278 Total Soft Costs 1,490,588 16,562 0 Owner Purchases(FF&E) - - FF&E w/installation,taxes&freight 1,515,231 16,836 FF&E taxes&freight - - FF&E installation - - Opening supplies 20,000 222 Exercise equipment 30,000 333 Business Center 5,000 56 Signs 90,000 1,000 Security system 15,000 167 TIF Admin Fees 15,000 167 TIF Voluntary Contribution 15,00(1 167 Property management/point of sale system 50,000 556 Telephone system/high speed intemet/cabling - - Pre-opening salaries,training,marketing collateral 50,000 556 Miscellaneous 25,000 278 Total Owner Purchases 1,830,231 20,336 Project Management 250,000 2,778 Contingency 477,376 5,304 TOTAL 13,573,195 150,813 9 World Building Construction Contract Summary Total Construction Contract Line Items Ground Floor Storefront 150,000 Elevator Upgrades 250,000 Light Well/ Common Costs 500,000 Lobby/Rooftop 1,000,000 Hard Construction Cost 6,000,000 Total 7,900,000 World Hotel Contruction Contract Category Amount % $/Line Item $/Line Item/SF Demolition 206,190 2.61% 2,291 3.38 Exterior Improvements 135,880 1.72% 1,510 2.23 Elevator 250,000 3.16% 2,778 4.10 Misc Masonry Repair 188,020 2.38% 2,089 3.08 Interior Carpentry 664,390 8.41% 7,382 10.89 Interior Finishes 685,720 8.68% 7,619 11.24 Interior Drywall 641,480 8.12% 7,128 10.52 Doors&Openings 681,770 8.63% 7,575 11.18 Electrical 805,800 10 20% 8,953 13.21 HVAC 743,390 9.41% 8,260 12.19 Plumbing 885,590 11.21% 9,840 14.52 Appliances 150,890 1.91°/i 1,677 2.47 Flooring 577,490 7.31°% 6,417 9.47 Fire Sprinkler 240,950 3.05% 2,677 3.95 Window Restoration/Repair 410,800 5.20% 4,564 6.74 General Conditions 276,500 3.50% 3,072 4.53 Contractor Fee 355,500 4.50% 3,950 5.83 Total Contract 7,900,360 87,782 129.55 Project timeline: 1. Entitlements: Fully Entitled. 2. Financial closing: The project is anticipated to close in November 2016. 3. Construction period: The construction period is anticipated to start March 2017 and complete June 2018. 10 IV.Pro Forma Hotel Curio 5 Year Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Gross Potential Income 3,611,981 3,720,340 3,831,951 3,946,909 4,065,316 Subtotal Other Inmme 292,173 300,938 309,966 319,265 328,843 Total Revenue 3,904,154 4,021,279 4,141,917 4,266,174 4,394,160 Department Expenses 1,498,593 1,543,551 1,389,857 1,637,553 1,686,680 Operating Expenses 1,092,009 1,124,769 1,158,512 1,193,268 1,229,066 Real Estate Taxes 248,838 256,303 263,992 271,912 280,069 Insurance 35,000 36,050 37,132 38,245 39,393 Management Fees 195,208 201,064 207,096 213,309 219,708 Replacement Reserve 56,798 58,502 60,257 62,065 63,927 Total Expenses 3,126,446 3,220,239 3,316,846 3,416,352 3,518,842 NOI 777,708 801,039 825,071 849,823 875,317 PMT 622,166 622,166 622,166 622,166 622,166 NCF 155,542 178,873 202,904 227,656 253,151 11 V. Statement of need and ROI analysis Total project cost is estimated to be approximately$13,575,000. Without Tax Increment Financing ("TIF"), this project cannot move forward. The TIF Request is $1,900,000.00. The TIF requested represents approximately 14% of the total project cost. The remaining cost is funded though equity and conventional debt. The TIF and project costs are subject to adjustments based on final estimates. The TIF amount is subject to change and is approved up to and to exceed $1,900,000.00. Hotel Curio But For Sources With TIF Without TIF Loan 9,327,847 9,327,847 Equity 2,345,348 4,245,348 TIF 1,900,000 - Total 13,573,195 13,573,195 NOI 777,708 777,708 PMT 622,166 622,166 CF 155,542 155,542 ROI 6.63% 3.66% As Demonstrated in the "But For"Analysis above, the project ROI without TIF would be below 4% and therefore, this project would not proceed without TIF. Furthermore, this represents a new large private investment in an area of Omaha from an out of town source. This is an opportunity for the city of Omaha to partner with private capital in upgrading the urban core. The execution of TIF and resulting rehabilitation will continue to remove blight from the neighborhood and surrounding areas. In the case of the World Building, the renovation of this structure is very challenging. Regarding the interior,years of retrofitting for various uses will have to be removed and a complete new structure will be built. This will take a very detailed and organized plan to achieve in a timely manner. This is a risk the private market is willing to take,which will result in Omaha receiving a building back into the fray of our redeveloping city. Specifically,this project will provide both jobs for construction and long-term employment opportunities. As the downtown hotel corridor continues to develop,Omaha further enhances itself as conference and vacation destination. 12 VI. Evaluation Criteria: Mandatory Criteria Mandatory Criteria#1: The project is located within an area that is eligible for designation as a community redevelopment area. Community Development Law 18-2103(20) states "community redevelopment are" means a "substandard and blighted area which the committee redevelopment authority designates as appropriate for a renewal project." World Hotel site is a community redevelopment area because it satisfies the Community Development Law's definitions of a "substandard area" and"blighted area." First,the project area qualifies as a "substandard area" under 18-2103 (10) because the combination of the high density of population and the dilapidation, deterioration,age or obsolescence, of the majority of the buildings in the area is conducive to crime and ill health, and is detrimental to the public safety and welfare. Second, the project area qualifies as a "blighted area" because it satisfies the requirements of both 18-2103(11) (a) and (b). The project area satisfies subsection (a) because the combination of certain factors, specifically, the presence of a substantial number of deteriorating structures, deterioration of site and other improvements in nearby commercial lots,and diversity of ownership, substantially impairs the sound growth of the community and retards the provision of quality housing accommodations. The project area satisfies subsection (b) because the average age of the residential units in the area is at least forty years. Mandatory Criteria #2: The use of Tax Increment Financing will not result in a loss of preexisting tax revenues to the city and other taxing jurisdictions. A portion of the revenue will be utilized to pay the Tax Increment Financing Note,which will come from additional valuation resulting from the improvements to be constructed on the site. The tax received from the increased taxable valuations will be more than sufficient to support the Tax Increment Financing and will not result in a loss of preexisting tax revenues. Mandatory Criteria#3: As set forth above, the project is not economically feasible without the use of Tax Increment Financing. TIF provides a necessary gap financing that is critical to the capital stack due to the considerable cost of the development given the "Class A" facilities the developer wishes to create and the lack of alternate subsidies for market rate residential developments. Furthermore,based upon the projection set forth above,it is reasonable to conclude that this project would not occur in this area without TIF,given the construction costs involved. Mandatory Criteria#4 The project furthers the objective of the City's Master Plan and by providing housing, furthering job creation, and contributing to business growth and expansion. 13 VII. Cost-Benefit Analysis 1. The use of Tax Increment Financing for this project will result in a tax shift for the City of Omaha. The increased value of revenues, resulting from the improvements, will be applied to the eligible cost. Ultimately, the TIF note will be paid off and the result will be a tax shift in favor of the community. 2. Community public services currently exist in the area. The proposed TIF will be used to make required public infrastructure improvements,which is an eligible expense. The development of the dilapidated site will enhance business development in the area and provide needed hotel services to the local residential and business community. In this case, a vacated building will once again be brought back to life. This is very important for the community as it demonstrates a healthy and vibrant society. 3. This development will impact other businesses in the area as it increases traffic and availability of retail,dining and housing services in the surrounding community. The new commercial facilities will produce numerous employment opportunities. 4. The current property tax system is able to accommodate the development. Furthermore, the long-term benefit resulting from an increase in the tax base from the development is another valid reason to approve TIF assistance for this project. 5. Impacts on employers and employees within the city and the immediate area: This development will impact other businesses in the area as it increases traffic and availability of retail, dining and housing services in the surrounding community. The new commercial facilities will produce numerous employment opportunities. Hotels have a means of bolstering the local economy. More hotels in the downtown corridor provide Omaha the means to support large national conventions and activities like the US Olympic Swim Trials and College World Series,which have been instrumental in keeping the local economy strong. 14 F. Employment Information Permanent Jobs (FTE) to be CREATED 40 Permanent Jobs (FTE) to be RETAINED 0 Permanent Jobs (FTE) to be RELOCATED 0 TOTAL 50 Anticipated Annual Payroll (Each) $41,600 Estimated number of construction jobs created as a result of this project 50 *Jobs will be retail type of jobs- cooks, servers,bartenders, hotel staff, salespersons & general proprietors G. Attachments A. Survey B. Site Plans and Renderings C. Documentation of Site Control D. Preliminary Commitment Letters for Financing E. Organizational Documents F. Reports and Studies G. Financial Statement H. Management Team 15 B. Site Plans& Renderings '" . . "NW • , '„ akt•aim.4,1 -- il*-i -;-1.•77 176.. ftie• 41611t ttk-tkir' ". ' • , 11*11--ft*' allt--- INSH---- •*6.. - , ,,. -r•:- ...:--'7!, .,-.,• . ' , -. -7, *;•••:,-.,^7i, :',7.'-',.I.:7:7,, •• ... , _-•,, , ;.3. ., . .?.....-,...,. .i, '•-4L:`,7:7!:, 7..„ , ' k tf. '. -.444d--71/lik---..Z. ' ' - • f '-' 1 ...,„..,,,• „„.,,,,,,.,*,,-,,. . .11 . .. . „ . M . Z -", z___. *7 Z.-. First Natic ,--, -----I .--, . °' OD (IDCn CD .---+,-+ Cl. Dodge St ...,„... Dodge CD CD CD `,---- ---.„I_., 0-, CD ( ,4+ COO ,...*F g et C, CD _..., CD 203 South 18th Street = .,. _ cr. ,--- ,-. ---, co — cf) $ , cf.), Wells Fargo Bank 15 -. 13 Farnam ,:-L,r. CD til 1 7 Curio by Hilton Omaha,Nebraska concept for the re-use of an existing building OI'1 FLIICIRIC KITCHEN OFFICE CENTER th KIICHFN HALL IU INFORMATION _ '— VENDING MIFCHANICAI. ly ELEVATORS FI .I . u S HALL hauppAl OFFICES _. RESIADRANT I II aNOCF:I'ROOM ST Al FRONT DESK FOYER LORRY MIEETING PLACE MEETING PLACE JIMMIMMIU — _ Owner&Contact information: Viallova Development 1500 Ramsgate Pkwy. Chattanooga,TN 37343 PH:423-400-3 308 GROUND LEVEL FLOOR PLAN FX:423-875-9716 Ay;kytekaa asF onr.C6-17-16 c.Myomesh.dcsai@vianovadcvelopmenc.coom Curio by Hilton Omaha,Nebraska concept for the re-use of an existing building J STORAGE n EMPLOYEE BREAK I ■0 BOARD ROOM HALL • ELEANIURE 11111 MECHANICAL frj Owner L Contact information: Viallova Development 1500 Ramsgate Pkwy. Chattanooga,TN 37343 PH:423-400-3308 MEZZANINE LEVEL FLOOR PLAN FX:423-875-9716 6y:kyteRaatsntaanLaxm C6-17.16 e.Yyomesh.desai@vianovadevelopmenccomp 1 Curio by Hilton Omaha, Nebraska concept for the re-use of an existing building I 1��y Purninirc Legend 6 '0 . �O II- NEW LIGHT WELL (I21 • O 485 of t - 415 sf it � • 336 sf • .. --- Q I 1 1 - •I• CIO.. OM LL .: i _ _ _ . - rlii "(_6,:_ & , _r, n 1 in sr.mI. S A. 1 • O �°(3, :: ► ,l j,ii Q r r�I 74sf (11 (14) iC. (Il] 1 11111� I ,. _ u linen •c ,' 414 sf I13i 414 sf • 393 sf 355 sf 1 / 315 sf a FiPVFxTOBS-:. .-i n o 41 8....it wmdtir 4typeall v�- 15 suites total ��\� _ I r c�i E.ao * La c.4. or p-mo- .�i 5 Kings w%show ��■ E � '� LI _*Law,- • _ iI . 3 Kings w%rub �` r ❑ _ .-. _ _ 'n 4 doubles ar showerIll in ' (Si�. ' 11 '� ' __ill Ili • - 3 doubles w/tub (5) •• M 7 •.A (S w+ 9 (10) �. L380 of 1 380 sf^ ■'I■ 80 sfpm. •Q 111. ^t 384 sf ■ i■384 sftlttti ■l' 453 sf 41 Owner&Contact infonnntinn: Viallova Development 1500 Ramsgate Pkwy. Chattanooga,TN 37343 PH:42 3-400-.3308 TYPICAL FLOOR PLATE FOR FLOORS 3 TH RL1 S FX:42 3.87 5.9 716 by.6yGhaatadaeraCaot,06-17-16 enyomesh.desai@vianovadevelnpment.com Curio by Hilton Omaha,Nebraska concept for the re-use of an existing building 7 [�-- MANOtiI I( New LIGIn'WBI.L Ietx,nmp EQUIPMENT uII I j oia�Ice HIC� lP71C1Lf7fI�'tlE�ii Mti . q/�y�J.t .�/y��/.1 STAIR I WAITRESS Y if • ATABLRS I - l..' I'/"I uvcrneuro AueA • • • • • STAIR 2 UNCOVERED AREA Owner&Courant information: Viallova Development 1500 Ramsgate Pkwy. Chattanooga,TN 37343 PH:423-400-3308 ROOFTOP MR FLOOR PLAN FX:42 3-87 5.9 716 Bea;6u&RaAtwd7-e.a[0647./6 e.vynmesh.desa i@vianovadevelopmenecom 19 C. Documentation of Ownership or Site Control 1. 203 S 18th St, Omaha NE 68102: Owned by Woodmen of the World Life Ins Douglas County,Nebraska Property Record-R0311010000 Print Report Information is valid as of 2315 8 17 View Interactive GIS Map Treasurer's Tax Report New Feature 4 3-I Subdivision Sales Search Owner WOODMEN OF THE WORLD LIFE INS WO MORTGAGE&RE INVESTMENT 133 FARNA.M ST OMAHA NE 68132-3003 Property Information Key Number: 1131 3303 33 Account Type: Ex Chartable Parcel Number: 3311310000 Parcel Address: 233 S 18 57 OMAHA NE 68132-3000 Legal Description: CITY LOTS LOT 4 BLOCK 116 112 VAC ALLEY ADJ ON S &68 X 142 Value Information Land Improvement Total 2016 S0.33 53.30 50.03 2015 5234.330.3o S3,652,130.33 53.886.430.33 2014 5234,300.33 S2.315,7 30.33 52,553,003.30 2013 S234,am.3-3 52.315,73.30 S2,553,003.33 2012 5234.330.33 S2.315,730.30 S2,550,333.33 2011 S234,333.33 52,315,700.33 S2,550,000.33 Land Information Acres SF Units Depth Ylfdth Vacant 3.21 0372.3 1.3 3.3 3.3 Na 20 PURCHASE AGREEMENT mid w e eeletybwdeg antic W na usehn nld,seers loser whorl The Lard C.eegrey.tfedbr Derr pis 7C.3 T10 indeed?+/Ste•'.Mrwer ors Or wet Keels b wat4M Ire Property deoaks/ee Wove. 7 hille.e.1ll loess W Sass OnrAa,tleereate tit»: i lanai Desateieire7O SE PllOfr=:Peesg5"diets el tens end eo tamers peolsor e4 Md b res Prgery. 3. tenses/£r.,.0 The arb yea rsei Xaa$rty wooled se as bass.:eel raw toned Nana+sal 4111141111 eye toereAae Nemo 4. 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Morn.CowpsatrMa: © Sot*N Sao•arowAis tott h WO;pOc•b►0&wf.,e on No on to r000Mne!emery t etc Aloft loin lik IR*W Saw Mom to Mr sfpt ono women* El Boyer OM VOW id+oorp IN*►Doped o moors 71 Cansoes•r - O$rtR dare owaaanmt U4 Waft t--. wf1I f fNA1I A/w Darr; 12ni! m 1 RECtsr: .raft poises b.c.cE Norte Carlow *0.Dtwo.,RId.a W V to w Nrdoto rco K PM P It*1110 Palm so cordials os wrta tero wrap is Hoc on •ate1y*,ci Ill•DON Oar n owdoss IEatnrAQMh Conp.OrNtot coO trlAsay Ousho.Neatest& i ISM: ACCCP Out: 281ti Tom S.M inners P'krosaa'9 pexpaslecn en ra itriM.src ar0 Oye.s 1C aorS+►M b Prt reopen►.dthr oolieriO1 ono Wow*tO tot worn•rf3 aard•an sot Wirt art tcin1.4.t r.C.iZ ter M eotnl.f GUN of the ealedemee s eete tar QN hr b* I s da:cow s; amnia?is Aaotptres rWrporrs rrodinioot oenottA a•wester O>b%In oar er otsr kt r>s fegoot to tmgnrra ter ender Ph Or cn ,b- r-otbd,AM SELLER 44 14/441 SELLER• h.intirtapc. Lally 4111 -flerie .t • = r+aFoovt s ACexptwa Sow.arf'stsyn Hoop etc Sof eoccoo ccoy d Mt•fo Mont era moon Po OasMu propad so sot aut*as 1 owl. ON.: Bum et/YEfit. 24 THIRD AMENDMENT TO PURCHASE AGREEMENT THIS THIRD AMENDMENT TO PURCHASE AGREEMENT(this"Amendment")is made and entered into this 1st day of September, 2016, by and between WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY,a Nebraska corporation('-Seller-),and 18 H STREET OMAHA,LLC, a Nebraska limited liability company("Buyer"). PRELIMINARY STATEMENTS Seller and Viallova Development, LLC, a Tennessee limited liability company (-Viallova"), entered into that certain Purchase Agreement, dated December 9, 2015 (the '`Purchase Agreement"), pertaining to certain real property commonly known as 203 South 18"'Street in Omaha,Douglas County, Nebraska(the"Property"),which Property is more particularly described in the Purchase Agreement. The Purchase Agreement was subsequently amended by Seller and ViaN ova pursuant to (i)that certain First Amendment to Real Estate Purchase Agreement dated June 3, 2016 (the '`First Amendment"), and (ii) that certain Second Amendment to Real Estate Purchase Agreement dated June 30. 2016 (the "Second Amendment"). The Purchase Agreement,as amended and modified by the First Amendment and the Second Amendment,is referred to herein as the"Agreement-. Viallova subsequently assigned its right,title and interest under the Agreement to Buyer pursuant to that certain Assignment of Purchase Agreement dated August 26,2016. Capitalized terms used in this Amendment but not defined in this Amendment shall have the meanings assigned to them in the Agreement. Seller and Buyer desire to amend the Agreement as further set forth herein. NOW,THEREFORE, in consideration of the mutual promises,covenants and conditions set forth below, and other valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, Seller and Buyer acknowledge and agree that the Agreement is hereby amended as set forth below. Section 1. Conveyance of Title. Buyer and Seller hereby agree that closing under the Agreement shall occur on or, subject to mutual agreement of the parties, before October 17, 2016 (the ':Outside Closing Date"). Section 2. Deposit. Buyer previously deposited an amount equal to Seventy-Five Thousand and Noll 00 Dollars ($75,000.00) (the -Original Deposit`) with Nebraska Title Company, having an address of 11336 South 96th Street, Suite 120,Papillion NE 63046(the'Escrow Agent"),pursuant to the terms of the Agreement. Buyer and Setter hereby agree that Buyer shall deposit an additional Seventy- Five Thousand and No/i 00 Dollars(S75,000.00)(the"Additional Deposit")with Escrow Agent, by bank wire transfer or certified check,by 5:00 p.m.CST, September 6,2016. Any failure by Buyer to make the Additional Deposit within the time period required by the preceding sentence shall constitute an immediate event of default by Buyer under the Agreement. Buyer and Seller hereby agree that any reference to the"Deposit'under the Agreement shall hereafter refer to the combined total of the Original Deposit and the Additional Deposit, in an amount equal to One Hundred Filly Thousand and No/100 Dollars(S150,000.00). The full amount of the Deposit shall be applicable to the Purchase Pricer however, 25 Buyer and Seller agree that, notwithstanding anything to the contrary in the Agreement, such Deposit shall be non-refundable to Buyer for any reason whatsoever,with the sole exception of Seller's refusal or failure to convey title to the Property to Buyer by the Outside Closing Date in accordance with the terms of the Agreement. Buyer shall not be entitled to a refund of the Deposit for any other reason,including, without limitation,any failure to satisfy other contingencies or closing conditions in favor of Buyer as set forth in Section I I or any other Section of the Agreement. Section 3. TIF Application. Seller hereby acknowledges that Buyer, at its sole cost and expense,may make applications to the City of Omaha,Nebraska for Tax Increment Financing(TIF)with respect to Buyer's proposed acquisition and development of the Property. Seller hereby consents to such applications by Buyer;provided,however,in no event may Buyer take any action in connection therewith which would (i)encumber or be binding upon the Property prior to closing,or(ii)obligate Seller to pay money,construct improvements or dedicate any interest in real property,or otherwise incur any liability with respect to the Property. Section 4. Full Force and Effect; Counterparts. To the extent not inconsistent herewith, all other terms and provisions of the Agreement shall remain in full force and effect and are ratified by the parties hereto. This Amendment may be executed in counterparts, each of which when taken together shall constitute one entire agreement. [SIGNATURE PAGE FOLLOWS] 26 IN WITNESS WHEREOF. Buyer and Seller have executed this Amendment as of the day and year first above written, SELLER: WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY,a Nebraska corporation By: 4Name444 R. 'lig Its:President and CEODate: f / /it, By: ,,J)hku Name:Denise M. McCauley Its:Executive yice president,Operations and Secretary Date: 7l /(o BUYER: I8TH STREET OM_ .HA,LLC,a Nebraska limited liability company By: Name: _ _ Title: Date: 27 IN WITNESS WI IF Rt DI', Buyer and Seller have executed this ,Amendment as of the day anti year fiat above written, SELLER: WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY,a Nebraska corporation By. Name: Dean HoIdswnrtli Director-Mortgage& ReaI Estate Investment Date: 13C1•'ER: l8 rtt STREET OMA HA, LLC.a Nebraska limited liabilitt company By: Natue: ethumrd Unt.e, l itle: Y�1n,+e r_ Date: q I ilia14. 28 D. Preliminary Commitment Letters for Financing SSC LOAN INVESTMENTS I,LLC LOAN COMMITMENT DATE: August 17,2016 • SUBJECT: Curio by Hilton—Omaha,NE TO: Nirav Shah PROPERTY:90-key Curio Collection by Hilton located at 203 South 18th Street,Omaha,NE Dear Mr.Shah: SSC LOAN INVESTMENTS,LLC, ("SSC"or"Lender")has approved and is pleased to make a loan through a to be formed special purpose entity(the"Loan")subject to your compliance with and acceptance of the following terms,provisions and conditions. Certain terms used herein arc defined in the Exhibits hereto. A. TERMS OF LOAN 1. BORROWER: ISO Street Omaha. LLC Borrower's organizational agreement and certificate, the identity and composition of Borrower's principals,and any document relating to the organization and status of Borrower and of its principals,must be submitted to SSC for its approval prior to closing the Loan. 2, GUARANTOR: Non-recourse except guarantors to provide completion guarantee through construction period,and carve out guarantee after hotel achieves Certificate of Occupancy. Guarantors will be Edward Chen, Neil Kapadia, Vyomesh Desai, and Nirav Shah. 3. LOAN AMOUNT: Lesser of$9,900,000,80%Loan to Cost,or 80%of appraised as complete value. 4. VARIABLE RATE INTEREST RATE: 30-Day LIBOR+975 bps with a Floor Rate of 10.25%on the outstanding principal balance of the Loan.Unfunded loan proceeds will accrue interest at a rate of 3.00% until the Loan is fully funded or Borrower notifies Lender if any unfunded loan proceeds are no longer required. The 3,00% accrual will begin on the date of the initial advance. *As there is specific personal information in the remainder of this Commitment Letter, the City may request this document in its entirety directly from the owner. 29 MutualofthmahaBanke 3333 Farnam Street Omaha,NE 68131 mutua Iofornahabank.com September 2,2016 Mr.Mike Peter,Principal Clarity Development Company,LLC 144 S.39+'St,Suite 2B Omaha,NE 68131 RE Conditional Terms Letter for the proposed World Hotel Project at 203 S.18th Street,Omaha,NE 68102 Dear Mt.Peter: We are pleased to express an interest in providing Tax Increment Financing(TIF)for the acquisition and rehabilitation of the World Building on 18th Street for a proposed 90-room boutique hotel This is not a commitment but rather a conditional terms letter for a potential$1.9 million TIF loan. The preliminary terms and conditions are as follows: Project Cost Value: $13,575,000 TIF Proceeds $1,900,000 Interest Rate 5.00%fixed Maturity 180 months Repayment: Interest only for initial 24 months then converts to principal and interest payments amortized over 156 months Origination Fee: 1% Prepayment Penalty: None Final approval is subject to normal underwriting guidelines and your ability to secure Tax Increment Financing through the City of Omaha. We look forward to woriring with you to make this exciting project a reality. Sincerely, I Forrest Newburg Vice President,Commercial Real Estatc Lending 30 E. Organization Documentation NE Sot;of Smra.fohn A Gala C.ORP CRTG' ;1o0m202.51-Page 1 at 1 HTH;STREET OMAHA,LLC Filet 12 2o1 F 113:04+:66 PM CERTIFICATE OF ORGANIZATION FOR 18TH STREET OIVIAHA, LLC (4 Nebraska Limited Liabili y Company) 1. The Name of the Limited Liability Company is jith Street Ot+ ha,LLC_ 2. The street and mailing address of the initial de-signaled office of the initial agent fur SCIV'ICC of process of t1l*uompauy is as follows:. 233 S, 13th SStrcct Suite 1900 Lincoln,Nebraska 68508 3, The Registered Agent for this LLC is CSC-Lawyers incorporating Service Company located at 233 S, 13ei Street,Suite 1900;Lincoln.Nebraska 68508. 4, This LLC is jorganized to render a professional service.the professional service its members,managers,professional employees.tmd agents are licensed or otherwise legally authorized to render in this state, 5. This LLC shall be effective as of the date written below. Signed this 12*day of July'.2016. l3 Y: (fi k 141 ELiw n,Member and Organizer 18th Street Omaha,LLC 31 STATE OF NEBRASKA. United States of America, } ss. Secretary of State State of Nebraska } State Capitol Lincoln, Nebraska I, John A. Gale, Secretary of State of the State of Nebraska, do hereby certify that 18TH STREET OMAHA,LLC was duly formed under the laws of Nebraska on July 12,2016; all fees,taxes,and penalties due under the Nebraska Uniform Limited Liability Company Act or other law to the Secretary of State have been paid; the Company's most recent biennial report required by section 21-125 has been filed by the Secretary of State; the Secretary of State has not administratively dissolved the company; the Company has not delivered to the Secretary of State for filing a Statement of Dissolution; a Statement of Termination has not been filed by the Secretary of State. This certificate is not to be construed as an endorsement. recommendation,or notice of approval of the entity's financial condition or business activities and practices. In Testimony Whereof, I have hereunto set my hand and ��,.t..<".,.�y affixed the Great Seal of the ,'�-';♦,,u s f 1 r'till State of Nebraska on this date of / 0\' .;: te '' hi ',°1 `. 4.'.:,f'4+'?I. July 13,2016i 414 \I„_,...:,,,_,./..„ , _40...,....:.,.,,,, t 4 .,fir,- �;0 "111, 4. 0(...?„,(.., I;fit'il • ti kc t � . Secretary of State Verification ID 8e3ce7b has been assigned to this document. Go to ne.gov)golvalidate to validate authenticity for up to 12 months. 32 F. Reports and Studies Subject Property CBRE Market Study CBRE Proposed Curio Hotel Downtown Omaha Hotel Market Analysis Subject Demand Penetration Analysis and Projected Occupancy Market penetration is a term used to evaluate a property's ability to compete within its defined market, and within the various demand segments, and is based on a "fair share" analysis. Fair share is simply the ratio of the number of rooms in a particular property to the number of rooms in the defined primary competitive supply. The Subject's fair share will be 7.4 percent Market penetration, or penetration rate. is the ratio of captured demand to fair share of demand. Factors indicating competitive advantages are typically reflected in penetration rates above 100 percent,while, conversely, competitive disadvantages are reflected in penetration rates below 100 percent. Actual penetration of each market segment by the Subject may deviate from fair market share for the following reasons: • The competitive advantages or disadvantages of the hotel versus the competition taking into consideration such factors as age, location, room rate structure, chain affiliation,quality of management, marketing efforts, and image; • The characteristics, needs, and composition of each market segment; • The r estrain on d emand c aptured due t o c apacity c onstraints during c ertain periods of the week or times of the year; and • Management decisions concerning target markets. The S ubject's pe netration r ates i n t he c orporate, I eisure, a nd g roup s egments w ere estimated t o be 160 percent, 70 percent, and 65 percent, r espectively, i n 2018. Penetration in the all segments is expected to increase to 170 percent, 75 percent, and 65 percent i n 2 019 and each y ear t hereafter. The S ubject's occupancy i n 2019 i s estimated to be 67 percent and overall penetration is expected to be 98 percent. The S ubject w ill s tabilize in 2020 at an ov erall pene tration I evel of 9 8 p ercent and occupancy at 69 percent. The estimated penetration by market segment and the Subject's mix of demand from 2018 through 2022 is presented in the following table. 33 G. Financial Statements 18t'Street Omaha,LLC is a privately held company,however we agree to permit access to financial information to this entity at the office of 8712 West Dodge Road. The purpose of sharing private financials is solely to for the City of Omaha to determine its business relationship with 18th Street Omaha,LLC. The City of Omaha therefore shall not disclose financial statements to any entity or person for any means. H. Management Team Viallova Development Management Team i Vyomesh has served the commercial real estate industry for over ten years.including 3 years on the board at Greater Chattanooga II Hospitality Association.Vyomesh began his career in construction in the 1990 s.building 18 hotels in the Southeast.In 1999 he formed Hixson Hotel Management a full service management company.to manage a 57 room Holiday inn Express.Within a year.his company acquired a 150 unit full-service Holiday inn.Hixson Hotel Partners was acquired by Nobel Management Company where'Vyomesh held a partnership role.He was directly invoked in growino Nobel s portfolio from 3 hotels to 15 hotels at its peak.Along with hotel management,Vyomesh Desaf has been directhy invoked in the ground up development of 5 limited and full service branded hotels Vyomesh Desai ranging from 65 units to 120 units In 2009 he formed v2DesignGroup,LLC_a real estate development and design firm specializing in both commercial and residential property.v2Desgn Group has gained experience in the redevelopment of existing hotels by completing 2 redevelopment projects within a year.notable converting a 92 unit independent hotel to Days Inn increasing the value by 25% Vyomesh. with his vast experience,is also responsible for looldng into future growth strategies for Viallova Development. 1111 Nirav has experience working with and evaluating businesses across a broad range of industries and sizes.Prior to fooning Vrallova Development,Nirav worked as an Investment Strategy and Acquisition Associate'with Capital Asset Funding.a private equity firm in Atlanta.where he was responsible for the P&L of portfolio companies as well as acquisition strategies and underwriting in the financial services.manufacturing.healthcare.and real estate industries.Prior to Capital Asset Funding.he spent five years working es a Consultant with Accenture on several business developn-wnt.strategic advisory.and process improvement assignments in several industries.including hospitality services.energy.financial services:consumer products&services.and manufacturing.Nirav is currently a Managing Partner at Viallova Partners conducting due diligence on multi-family and hospitality real estate investment opportunities. Nirav Shah Nirav named a B.S.in Computer Engineering from the Georgia Institute of Technology-and completed his M.B.A.from the Ross School of Business at the University of Michigan. INNeil has significant experience acquiring,managing.and improvina service and manufacturing businesses.Prior to co-founding Viallova Development,Neil worked with a variety of Private Equity firms including Carlyle and Platinum Equity analyzing their recent acquisitions/potential targets to identify operational and financial improvement opportunities across multiple industries including hospitality.heavy manufacturing.transportation,utilities,and aviation.Neil has spent over 15 years in the hospitality industry building and operating limited service hotels across the eastem US.He is a turnaround management spec ialist with a special focus on drking improvements while minimizing capital investments through operational optimization.Prior to a specialization in turnaround management. Neil spent almost 10 years in strategy arid project portfolio management consulting-in addition to his operational experience,Neil Neil Napadia specializes in due diligence and business forensics.Nell co-founded Via Nova in 2010 and has been working in the advisory space searching to pair investors to opportunities that earn exceptional returns across the US.Neil triple-majored in Civil Engineering.Finance. . and Economics at Cameoie Mellon.and completed his M.B.A.from INSEAD 34 Articles of Organization - NOT IN PUBLIC DOCUMENTS CERTIFICATE OF ORGANIZATION FOR 18TH STREET OMAHA, LLC (A Nebraska Limited Liability Company) 1. The Name of the Limited Liability Company is 18th Street Omaha,LLC. 2. The street and mailing address of the initial designated office of the initial agent for service of process of the company is as follows: 233 S. 13th Street Suite 1900 Lincoln,Nebraska 68508 3. The Registered Agent far this LLC is CSC-Lawvers Incorpor^atina Service Corporation located at 233 S. 13th Street,Suite 1900,Lincoln,Nebraska 68508. 4. This LLC is not organized to render a professional service,the professional service its members,managers,professional employees,and agents are licensed or otherwise legally authorized to render in this state. 5. This LLC shall be effective as of the date written below. Signed this 8th day of July,2016. BY: Edwd Clien,Member and Organiser 18th Street Omaha,LLC 35 Operating Agreement- NOT IN PUBLIC DOCUMENTS 18th Street Omaha LLC Operating Agreement 18th Street Omaha LLC(the"Company')has been formed as a limited liability company pursuant to the laws of Nebraska. The sole member of the Company is Via Nova Development LLC,a Tennessee limited liability company,and the sole manager of the company is Via Nova Development LLC. The Company shall be manager-managed. The Company is intended to be an entity which is disregarded for U.S.state and federal income tax purposes and interests in the Company are intended to be personal property regardless of whether the Company's assets include real estate. Death or dissolution of a member of the Company(or any other person holding an interest in the Company)shall not be an event causing dissolution or liquidation of the Company.Except as otherwise provided herein, the Company shall be governed by the limited liability company laws of the State of Nebraska, and the company's registered agent and office shall be as set forth in its Article of Organization as field with the State of Nebraska. // SOLE MEMBER Date:7/gil"! U Via Nova Development LLC Manager SOLE MANAGER Date: 2/811-0) D Via Noy.Developrnent LL Manager ORGANIZER Date: `?i$13-Ra16 � (� Edward Chen 36 C 2sA CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, the primary objectives of the City of Omaha's Master Plan and Community Development Program are to encourage additional private investment and infill development within inner-city neighborhoods; and to eliminate conditions which are detrimental to public health, safety and welfare, by developing vacant, underutilized property within these neighborhoods; and, WHEREAS, the redevelopment project site located at 203 South 18th Street is within a community redevelopment area, as the area meets the definition of blighted and substandard per the Community Development Law and is in need of redevelopment; and, WHEREAS, the World Hotel Tax Increment Financing (TIF) Redevelopment Project Plan was approved by the TIF Committee and subsequently by the City of Omaha Planning Board at their November 2, 2016 meeting; and, WHEREAS, the project site for the World Hotel Tax Increment Financing (TIF) Redevelopment Project Plan is located at 203 South 18th Street, and is legally described in Exhibit"A"which is attached hereto and herein incorporated by reference; and, WHEREAS, the World Hotel Tax Increment Financing (TIF) Redevelopment Project Plan proposes to adaptively re-use and convert the World Building into a 90 room boutique hotel as described in Exhibit "B" attached hereto and herein incorporated by reference; and, WHEREAS, the World Hotel Tax Increment Financing (TIF) Redevelopment Project Plan recommends City's participation in the redevelopment of this project site through the allocation of TIF in an amount up to $1,900,000.00 to offset TIF eligible expenses such as acquisition, hard construction costs, infrastructure and non-room costs (the rehabilitation of the building itself), architectural and engineering fees, and public improvements as required, to include $25,000.00 of the TIF proceeds contributed towards the Downtown Public Improvement Fund, for a project with total estimated costs of$13,573,195.00; and, By Councilmember Adopted City Clerk Approved Mayor C ZSA CITY OF OMAHA LEGISLATIVE CHAMBER Omaha, Nebraska Page 2 WHEREAS, the Plan presents a project based on estimated figures and projections that are subject to change as project costs are finalized, and is required to comply with all Planning Department requirements and Planning Board recommendations; and, WHEREAS, Section 18-2108 of the Nebraska Revised Statutes requires the City of Omaha to adopt a redevelopment plan before taking an active part in a redevelopment project; including the division of ad valorem taxes for a period not to exceed fifteen years under Sections 18-2147 through 18-2150,Revised Statutes of Nebraska; and, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: THAT, the attached World Hotel Tax Increment Financing (TIF) Redevelopment Project Plan for a redevelopment site located at 203 South 18th Street which proposes to adaptively re-use and convert the World Building into a 90 room boutique hotel, recommending the City's participation through the allocation of TIF in an amount up to $1,900,000.00 to offset TIF eligible expenses such as acquisition, hard construction costs, infrastructure and non-room costs (the rehabilitation of the building itself), architectural and engineering fees, and public improvements as required, to include $25,000.00 of the TIF proceeds contributed towards the Downtown Public Improvement Fund, but is subject to change as final costs come in, containing a provision for the division of ad valorem taxes under Section 18-2147 through 18-2150, Revised Statutes of Nebraska, as recommended by the City Planning Department, be and hereby is approved. 2451 dlh APPROVED AS TO FORM: c ASSISTANT CATTORNEY DATE B 41t, S7.�' Y Councilmember Adopted �. .C...1...3...20. -U City Clerk / 44./ Approve . ... .... Mayor NO .6?( ::........ Resolution by Res. that, the attached World Hotel Tax 2451 dlh Increment Financing (TIF) Redevelopment Project Plan for a redevelopment site located at 203 South 18th Street which proposes to adaptively re-use and convert the World Building into a 90 room boutique hotel, recommending the City's participation through the allocation of TIF in an amount up to $1,900,000.00 to offset TIF eligible expenses such as acquisition, hard construction costs, infrastructure and non- room costs (the rehabilitation of the building itself), architectural and engineering fees, and public improvements as required, to include $25,000.00 of the TIF proceeds contributed towards the Downtown Public Improvement Fund, but is subject to change as final costs come in, containing a provision for the division of ad valorem taxes under Section 18-2147 through 18-2150, Revised Statutes of Nebraska, as recommended by the City Planning Department, be and hereby is approved. Presented to City Council NOV 222016 r f �� A/71 �re ,e4 44-&" -) (4- -74C/ 3 t DEC 1 3 2016 -- opted __c Uts�e�., l��cvrz City Clerk