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HomeMy WebLinkAbout17. Adopt Resolution Approving Purchase and Sale of 9066 Firestone Blvd.A « APPROVED - And that the City Council authorize the City Manager to execute the final Agreement and any other documents and agreements necessary to complete the sale transaction. BACKGROUND On December 1, 2014, staff issued a Request for Proposal soliciting development proposals for a hotel development on City -owned land at 9066 Firestone Boulevard. With direction from City Council, it was staff's intent to attract a recognized major hotel flag /brand. On February 20, 2015, staff received three development proposals. The submittal from Kamla Hotels provided the best detailed information and offered a'SpringHill Suites by Marriott. Staff spent the subsequent months analyzing the development and financial information provided by Kamla Hotels. Upon the conclusion of various comprehensive discussions with the Kamla Hotels development team, and detailed analysis of their pro forma staff has concluded the information provided by Kamla Hotels was an accurate depiction of the type of hotel product they can build and finance at the City owned site. At its August 25, 2015 meeting, City Council approved staff's recommendation to enter into an Exclusive Negotiating Agreement (ENA) with Kamla Hotels. The purpose of the ENA was to provide the City and Kamla Hotels the security that each would negotiate in good faith exclusively with each other towards the execution of a Purchase and Sale Agreement for the property. PSA 9066 FIRESTONE BLVD. NOVEMBER 24, 2015 PAGE 2 The elements of the ENA included the duration of the negotiating period, which was 180 days. The site, project, and value of the site were also included. Kamla Hotels made a non - refundable deposit of $30,000, which shall be credited towards the purchase price if a Purchase and Sale Agreement is entered into between City and Kamla Hotels. This deposit will be used to pay for the City's predevelopment costs, such as attorney, architectural, and /or consultant fees. The end product of the ENA will be the creation and approval of a Purchase and Sale agreement by City Council. Staff has concluded negotiating the Purchase and Sale Agreement with Kamla Hotels. Kamla Hotels has formed a Limited Liability Corporation to purchase and develop the site, by the name of Downey Hospitality, LLC. The Purchase and Sale Agreement will be executed between the City of Downey and Downey Hospitality, LLC. The site's appraised value is $2,525,000. The sales price of the site will be $2,525,000. The Purchase and Sale Agreement details the cost of the land, escrow, title responsibilities and hotel type. The parties are agreeing to a hotel owned and operated under the SpringHill Suites by Marriott major flag brand, or other similar brand approved by the City in its sole and absolute discretion. The Agreement also provides for a Feasibility Period, which will mirror the City's Development Entitlement Process. During the Feasibility Period staff will work with Kamla Hotels on the a schedule of performance that will dictate the completion of project tasks, such as: site elevations, floor plans, site plan, construction drawings, and any environmental impacts as through the California Environmental Quality Act (CEQA). Approval of the development entitlements must be obtained from the Planning Commission, and if necessary City Council before the close of escrow for this sales transaction. In addition, Kamla Hotels shall be responsible for financing and constructing all improvements on the site and for payment of all building, planning and other fees required by governmental authorities for the completion of the project. FISCAL IMPACT The property at 9066 Firestone Boulevard was purchased with a combination of federal and state funds. Sale proceeds will be returned to those fund accounts. Attachments: "A Site Aerial "B" — Resolution with Purchase and Sale Agreement PA • ��.. - :. -..r. - ,.�� A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY APPROVING A PURCHASE AND SALE AGREEMENT BETWEEN DOWNEY HOSPITALITY, AND THE CITY OF DOWNEY FOR PROPERTY LOCATED AT 9066 FIRESTONE BOULEVARD WHEREAS, the City has negotiated a purchase and sale agreement with Downey Hospitality, LLC ( "Buyer "), pursuant to which the City would sell the Property, located at 9066 Firestone Boulevard Downey, CA for a sales price of $2,525,000; and WHEREAS, the City Council has determined that approval of the Agreement and the sale transaction contemplated thereby, is in the best interest of the City and the public health, safety and welfare. NOW, THEREFORE, • OF DOWNEY DOES RESOLVE HEREBY FOLLOWS: SECTION 1. The City Council of the City of Downey hereby (i) approves the Agreement, copy of which attached hereto as Exhibit "A ", and is on file with the City Clerk, (ii) if required, authorizes and directs the City Manager to make final changes to the Agreement consistent with the City Council's direction, and (iii) authorizes and directs the City Manager to execute the final Agreement and any other documents and agreements necessary to complete the sale transaction contemplated by the Agreement. SECTION 2. The City Council of the City of Downey hereby determines that the sale of the Property is exempt from the California Environmental Quality Act (CEQA) under Section 15301 of the CEQA Guidelines, as an existing facility. W-11110 SECTION 3. The City Clerk shall certify to the adoption of this resolution. LUIS H. MARQUEZ Mayor ADRIA K JIMEN Z, CIVIC City Clerk I HEREBY CERTIFY that the foregoing Resolution was adopted by th- D. - egular meeting held on the 1 oth day of March, 2015, by th- . - to wit: AYES: Council Members� NOES- Council Member: ABSTAIN: Council Member: ABSENT: Council Member: ADRIA M. JIMENEZ, CIVIC City Clerk A. Seller is the owner of real property in the City of Downey ("City"), County of Los Angeles ("County"), State of California, located at 9062 and 9066 Firestone Blvd, Downey, CA 90241, and described and/or depicted in Exhibit "A "("Property"). mipz�� 1.1 Purchase and Sale.Seller shall sell the Property to Buyer for development of the Project, and Buyer shall purchase the Property from Seller for development of the Project, subject to the terms and conditions set forth in this Agreement. 1.2 Purchase Price. The purchase price of the Property including the "Property Rights" (as defined in Section 2.8 below) is TWO MILLION FIVE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($2,525,000) ("Purchase Price"). 2. Escrow, 6801012225-0109 9060592.1 a I I/ M15 Attachment "C" Holder with their respective Federal Tax Identification Numbers and such other information as is reasonably required by Escrow Holder. 2.2 Payment of Purchase Price.The Purchase Price for the Property shall be payable as follows: Intentionally deleted. (3) Seller Obligations. Seller is not in material default under this A has been performed as required, including, without limitation the delivery of all documents required • Seller under this Agreement. (4) Possession. Seller is able, at the Close of Escrow, to deliver possession of the Property and Property Rights to Buyer in accordance with this Agreement and does so. 680/012225-0109 9060592.1a11/17/15 -2- I •: OM (3) Entitlements. Buyer has obtained all o Schedule of 1 Elevations, / Site following: Design. During the Feasibility Period, Buyer's and Seller's mutual agreementon all of the • of Performance, • the Site Elevations, Design, • DDA. 6801012225 -0109 9060592.1a1 1117115 -3- (1) Seller's Default. • to close d • default and this Agreement is terminated, Seller shall pay all Escrow cancellation charges. "Escrow cancellation charges" means all fees, charges and expenses charged or passed on to the Parties by Escrow Holder, including all title expenses. i Default. • to close due to default and this Agreement is terminated, Buyer shall pay all Escrow cancellation charges. Default. If Escrow to close and this Agreement is terminated for any reason other than a default by one of the Parties, each party shall pay one half of the Escrow cancellation charges, and each Party shall be deemed to have released the other r"arty from all liability for the failure of Escrow to close. 6801012225 -0109 9060592.1a11117/15 -4- . 680/012225 -0109 9060592.1aIIM/15 "'S ' • i *. i • i i =Irs-171-1-171 • i • i i • costs obligations of Seller under any Contract, including, without limitation, the obligation to pay any or ges of any kind there under. 269 Taxes, Assessments and Prorations. 6801012225 -0109 9060592.1a11/17115 -6- 2.15 Termination of Property Contracts. Seller shall, at no additional cost and expense to buyer, terminate any service contracts or similar agreement relating to the Property which the Buyer does not elect in writing to assume which termination shall be effective as of the Close of Escrow. 6807012225-0109 9060592, 1 al 1/17115 -8- 6801012225 -0109 9060592.1a11/17/15 ®9�'` Buyer's deposit of same on the Property) including without limitation diminution in value of the Property. 5. Additional Agreements. 5.2 Warranties, 6801012225 -0109 9060592,1a11/17115 -10- (7) Assumed Obligations. With the exception Of obligations • cesponsibilities of Seller that are expressly assumed by Buyer in this Agreement, there are no obligations or responsibilities of Seller with respect to the Property or otherwise of any kind that are assumed by Buyer. (8) Endangered pecies. o t e est o e er s ow e ge, ,fa�, there are no endangered or threatened s�;e� of animals -flants or insects on the Pro��M-A ani 14 (b) there are no environmental • biological characteristics of the Property which under existin�N. law will adversely affect Buyer's ability to own, develop and/or market the Property or the cost r,.'tereof. 680/012225-0109 9060592, lal 1/17/15 -12- (13) Material Change. Seller shall promptly notify Buyer if this Section 5.2.1 materially inaccurate or misleading. (1) Authorizatiow Buyer is duly formed and validly existing under the laws of the State of California and is qualified to transact business in the State of 6800012225-0109 9060592.1a11/17/15 -13- 680/012225 -0109 9060592.1 a11/17/15 14 680/012225- 0109 9060592.7 a11l17115 I S PEBTION."The provisions of this Section shall survive the Close of • 6801012225 -0109 9060592.1a11/17/15 -16- SELLER'S INITIALS BUYEWS INITIAU 680/012225-0109 9060,92 Jai I/J7/15 -17- r . BUYER'S 6801012225- 0109 9060592,1a11/17115 —17- SELLER'S I.. TIC ..AS BUYER'S INITIALS 5.8 Intentionally Onritted. 5 ®9 i r► 1.11 1 rryer is solely responsible for financing and construction of all improvements on the Property and f ®r payment of all building and planning and other fees _required by governmental authorities for the Project. 5.10 Seller's Purebase Option. 680/0 123250 i 09 9000591 tai Id 7115 � i 8° J-25f SELLER'S INITIALS BUYER'S INITIALS 5.9 Financing esponsibility.Buyer is solely responsible for financing and construction • all improvements • the Property and for payment • all building and planning and other fees required by governmental authorities for the Project. J 1111 =%;i 11 .1. 11 .3 1wil I I. - I I I 6801012225-0109 9060592.1a11/17/15 680/012225 -0109 9060592. Iz11/17115 -19 the recorded Property Grant Deed to Seller, and causing the Seller Title Policy to be issued to f r' 6801012225 -0109 9060592.1 a 11/ 1 7115 -20- Downey, CA 90241 Attn: City Manager With Copy to Rutan& Tucker, LLP 611 Anton Boulevard, 14`h Floor Costa Mesa, CA 92626 Attn: Jeffrey T. Melching Phone No.: (714) 641 -5100 BUYER: Dev Patel Chairman/CEO 12644 S. Lakewood Blvd. Downey, CA 90242 With Copy to Niranjan D. Patel A Professional Law Corporation 18000 Studebaker Road, Suite 700 Cerritos, CA 90703 Escrow Holder: Security Land Escrow 10805 Paramount Blvd., Suite A 6801012225-0109 9060592.1a11117119 -21- Downey, 90241 • Robison • - • • • • r 8.1 No modirications, No addition to or modification of any term or provision of r signed by Construction of .. - provisions of Agreement • be construed in favor of or against either Part. but shall be construed as if both Parties texe%ared this 83 Headini!s.The Section headings of this Agreement are only for convenience • shall not be deemed to limit the subject of • or • be • • -t in their construction. &4 Governing Law.The laws of the State of California shall govern this 9M 680(012225 -0109' 9060592.1a11117/15 -23- Saturday, Sunday or federal holiday. The time for performance on any Performance Date shall be • later than 5:00 p.m., unless otherwise provided in this Agreement. 8.13 Incorporation of Exhir t as intentionally omitted, all exhibits attached hereto and referred to herein are incorporated into the Agreement as though fully set forth herein. 8.14 Venue.in the event of any legal action to enforce • interpret this Aireement I the sole and exclusive venue shall be the Su i erior Court of the Countv and the Rzrties I I L,7dMWJL- t_!j V-00 8.15 Counterparts.This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be construed as one instrument. 8.16 Assignment.Except as provided below, Buyer may not assign its rights or obligations under this Agreement without the prior written consent of Seller, which consent may be withheld in the sole discretion of Seller. 680/012225-0109 9060592.lall/17/15 -24- [SIGNA TURE PA GE TO SALE AGREEMENT AND ESCROW INSTRUCTIONS] Buyer and Seller have executed this Agreement as of the Effective Date. THE CITY OF DOWNEY, a DOWNEY HOSPITALITY, LLC, a California municipal corporation California limited liability company By: City Manager "Seller" APPROVED AS TO FORM: Special Counsel to City of Downey 690/012225-0109 -25- 9060592, [a I M 7/15 By:_ Its: Sharad R Patel,'Nlanagii.ig Member By: Nan-ie: Its: &M [SIGNATURE PAGE TO "Seller" S • • w v• 680/012225 -0109 9060592.1al 1117/15 -25- By: Name: Its: "'Buyer.'.' YA City Manager 680JO12225 -0109 9060592,1a11/17/15 -25- Y: Its: Ya Name: Its EXHIBIT "A" 11563 'p .3 11120. • i i' 1• i ii • . . i . I • . , . • . . i, i i' l' i •I • 9 GOP ' i 680YO12225 -0109 9060592.lall/17115 ' 1` THAT PORTION OF BLOCK "Q" OF THE RANCHO SANTA GERTRUDES, IN THE CITY OF DOWNEY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP OF • THEREOF; RECORDED BOOK I PAGE 502 OF MISCELLANEOUS • i IN OFFICE OF THE COUNTY RECORDER OF COUNTY, DESCRIBED AS • „ i 680(012225 -0109 9060592.1a11/17/15 -2' -: r r i'r r 1 :�i r � r♦ � i i ' •�r a • i'r • i, • r ''! i i ♦ r i� � r 1 f i' r .,.f i 'i 1' • 1 EXCEPTING ■' ■• M THE NORTHEASTERLY 215.00 FEET MEASURED ALONG NORTHWESTERLY THE OF • r LAND. It ♦ ' •' Ir EASEMENT IS BOUNDED • i UTHWEST BY THE NORTHEASTER LINE OF i0 FOOT RIGHT OF WAY i PACIFIC RAILROAD COMPANY AND BOUNDED ON THE NORTHEAST BY THE SOUTHWESTERLY LIN OF i :i'r 100 FEET WIDE. ♦ .i. � •, r♦ r r r 1 1 i. AND • ' r i '' 1 i i '� • ♦ i ♦ i • ♦ ♦ r r: 1 1 1 i, i, 1 it 1 • r : i i w1v i' ♦ 1 i 11 i i i i, 5801012225 -0109 9060592.1a11/17/15 -3- 6801012225 -0109 9060592.1 a] 1/17/15 "�° EXHIBIT " " • 680/012225 -0109 9060592.1 a11/17(15 1" • 616111 • . Prepared Gilmore Version: Original February , Hotel Development Proposal - Kamla Hotels 1 COVER LETTER February 20, 2015 City of Downey Community Development Department Attention: Aldo Schindler Director of Community Development 1111 Brookshire Avenue Downey, CA 90241 Re: Hotel Development Proposal 9066 Firestone Blvd., Downey, CA Dear Mr. Schindler, On behalf of Kamla Hotels, I am honored to provide our hotel development proposal for the site located at 9066 Firestone Blvd. in the City of Downey. It is not every day that residents have the opportunity to propose to develop and operate a hotel in the city in which they call home. Devang and Sharad Patel, of Kamla Hotels, embrace that opportunity with the hope of being selected the developer of choice. We propose to bring one of Marriott International's most exciting brands, SpringHill Suites, to this site. This upper- moderate, all- suites hotel delivers the space, and stylish, inspiring design that enriches the guests' travels at a great value. With over 300 SpringHill Suites hotels throughout the United States and Canada, over 58% of guests make reservations by taking full advantage of the globally recognized and honored Marriott Rewards reservation system. This proposed all -suite hotel will feature a 7,000 square foot roof top lounge offering 360 degree views of the City, a business center, over 3,000 square feet of meeting space, fitness center, indoor pool and spa and, complimentary hot breakfast. All these amenities, along with the architectural fenestrations unique to Downey, will provide a sense of place reflective of the City's vision in revitalizing Firestone Blvd. While targeting the "stylish, suite seeker ", this hotel will be "green" built, meeting and exceeding industry standards for environmental sensitivity. "Local hiring" is a Patel policy which will excite up to 50 new employees. This is the way Devang and Sharad Patel approach all of the over 1,000 rooms under their award winning management. With over 25 years of experience in owning and operating hotels of the type proposed, they have the experience and financial capability to provide the City of Downey the kind of hotel of which it will be proud to be associated. We look forward to working through the process and collaborating with the City. Truly, Robert Gilmore Gilmore55919 @sbcgloba1.net Request for Proposal Hotel Development Proposal - Kamla Hotels N KAMLA HOTELS HISTORY Locally owned and operated, Kamla Hotels has strictly been a hotel developer and operator for over 25 years. Currently owning and managing three hotels in the City of Downey, Kamla Hotels is the 2nd highest transient occupancy tax payer in the City. Our award winning management team lives and works in the City of Downey. We understand the needs of the City and the regional hospitality market, and are committed to meeting the needs of the residents, businesses and visitors. Currently we own and manage the American Inn, the Studio Inn & Suites, and the Regency Inn & Suites in Downey. In addition, we are an existing Marriott International franchisee with a SpringHill Suites Hotel in Hesperia. Currently our affiliate is constructing a Residence Inn and Courtyard by Marriott in Riverside County. We have a proven track record of exceptional leadership in the hospitality industry representing the top tier hotel brands in guest satisfaction and product quality: We have over 1,000 rooms under management and care in the Southern California region. Rest assured, Kamla Hotels meets and exceeds the minimum requirements of the Request for Proposal for the Development and Operation of a Hotel, and has the desire and ability to carry out all of the required elements of the proposed Hotel Project throughout the entire term of the Agreement. • Indoor pool and spa Request for Proposal Hotel Development Pr•s• Hotels • Complimentary hot breakfast and high speed Internet access • Newly designed lobby, lounge, communal circle and, great room and buffet areas •- Lobby Market • Estimated 20 month schedule from close of escrow to Grand Opening • Proposed Land Purchase Price: $2,000,000.00 • Locally owned and operated by the award winning Kamla Hotels management team • Kamla Hotels "Green" Built Program of sustainable strategies and methods to preserve water and energy, and to minimize the hotels carbon foot print, including: use of solar panels, biofiltration, SMART irrigation, in room energy management systems, LED lighting, low flow toilets, water saving shower heads and other features • Projected $16 million project cost • Budgeted $5,000.00 per unit refurbishment cost in 5-7 years • TOT revenue generation in the range of $370,000.00-$450,000.00 annually • Local hiring policies for the estimated 50 new employees • Approximately $700,000.00 annually in employee salaries • 312 SpringHill Suites throughout US and Canada • Integrated marketing campaign • Marriott Rewards Direct Mail Promotion • In- flight and In- airport advertising to over 60 million travelers • Marriott digital and social media advertising, promotions and events • All -suite hotel benefits both the business and leisure traveler • Estimated Average Daily Rate (ADR) of $125.00 • Average length of stay of 2.3 days infusing additional shopping days and restaurant use • Target guest: male, mid-40's, college educated, $129,000.00 average income Request for Proposal Request for Proposal An existing Marriott franchisee, we have attached a list of twelve (12) hotel properties, including the SpringHill Suites in Hesperia, which Kamla owns and operates. (See Attachment B.) Together these properties generate annual gross revenue of over $14 million. Kamla currently has two large projects under development with Marriott in Riverside County; a Residence Inn and a Courtyard. These projects are being delivered on time and under budget. Kamla Hotels is known for its delivery of projects on -time, whether a ground -up development project or an "acquire- and - remodel" project. All of our ground -up development projects have followed a development timeline as follows: a) 60 days to deliver conceptual drawings to the City b) 60 days from date of approval of the conceptual drawings by the City for delivery of construction documents c) Construction begins immediately upon issuance of building permits d) Approximately 90 days for on and off -site improvements, including utilities e) 12 months for shell and core, and interior construction completion Kamla is a top notch hospitality developer that has a proven track record of developing not only privately -held hotel projects, but has collaborated with city Redevelopment Agencies in the communities of Lynwood, South Gate, Pico Rivera and Hesperia. We have successfully turned a number of distressed hotels into successful and profitable hotels in those communities. All those projects were "time -of- the - essences" projects, and Kamla delivered as promised. Kamla Hotels is not only an existing Marriott franchisee, but has franchise relationships with national and international brands such as Intercontinental Hotel Group, Choice Hotels, Wyndham International, Red Roof Inns, C6 Hospitality and Hilton Worldwide. Kamla Hotels spoke with many of the brands listed above to determine what the best brand would be for the City's site. Our analysis was specific and pointed to pick just the right fit for the community's needs. In our professional opinion, the SpringHill Suites by Marriott is the best alternative on the market for quality, amenities and value to drive the highest occupancy rate, estimated daily rate and thus, the annual projected Transient Oriented Tax to the City of Downey. The attached letter from Scott McAllister, Area Vice President of Marriott Lodging Development, expresses Marriott's level of interest and their recommendation for a SpringHill Suites Hotel based on their expertise and a thorough analysis of the Downey hospitality market. Request for Proposal Hotel Development Proposal - Kamla Hotels i ' • L Request for Proposal Hotel Development Proposal - Kamla Hotels 6 HOTEL DEVELOPMENT PLAN/FINANCING Kamla Hotels' development team for this project will be led by Devang and Sharad Patel They have led the ground -up development of seven hotels, at this time. Preliminary drawings were provided by David G. Simons Jr. Architects of Temecula, CA. This group has worked for Kamla Hotels for many years in designing, programing and site planning many of its hotel projects. First Choice Bank located in Cerritos, CA has discussed and analyzed this proposed project and has expressed a serious interest in financing it. Currently, Kamla Hotels has five credit facilities with First Choice Bank with loan commitments in excess of $16 million. A majority of these loans were to provide financing for hospitality properties in which Devang Patel and his partners hold a significant amount of ownership interests. The remaining development team will be chosen through a deliberate bidding process selecting contractors, engineers and consultants with the depth of experience and expertise in executing a development plan of the magnitude and quality of the proposed SpringHill Suites Hotel. Kamla Hotels worked closely with Marriott Lodging Development in analyzing the best brand for the community and considering a variety of site factors. Preliminary Timeline and Schedule: Opening to close of Escrow 60 days Architecture, Engineering, Permitting & Financing 120 days Construction of on and off site improvement & hotel 420 days Set -up & Pre - opening (Marriott Implementation) 30 days Soft & Grand Opening 10 days Total Project Time 640 days Notable events within the development schedule will include: Request for Proposal Hotel Development Proposal - Kamla Hotels 1. Ground Breaking Event with City Council and other local dignitaries 2. Model Guest room suites made available for viewing 3. Soft Opening 4. Grand Opening 6C PROPOSED FACILITY BUILD -OUT Attached is preliminary cost breakdown of the proposed SpringHill Suites by Marriott to be built by Kamla Hotels. (Exhibit 1) The estimated total project cost is $15,034,270.00 The estimated cost per suite for this all -suite hotel is $123,000.00. We have budgeted $5,000.00 per suite for refurbishing in a 5 -7 year time frame, This hotel will prominently feature architectural features and designs, inside and out, representing Downey's proud heritage from the Apollo Space Program to the world's oldest McDonald's. We intend to feature the areas' artists by exhibiting their art throughout the hotel common areas. This will be "Downey's" hotel. 6D FINANCIAL CAPABILITY Kamla Hotels is a holding company for the various special purpose entities formed for each of Kamla's hotel projects. Therefore, we have included personal financial statements for Devang Patel and Sharad Patel, the principals of Kamla Hotels, prepared in accordance with generally accepted accounting principles. (Exhibit 2) Each financial statement reflects extensive ownership of hotels throughout Southern California. Sharad Patel, for instance, among the eight properties listed on his financial statement, has listed a Travelodge Hotel in Lynwood valued at $5 million that is secured by a $950,000.00 note. The eight hotel properties listed for Sharad have a combined value of $32,300,000.00 with combined mortgages of $5,130,000.00. Devang Patel has provided a list of eight hotel properties with a combined value of $52,050,000.00 with mortgages of $25,110,000.00. The Eden Roc Anaheim Disney Resort listed on his financial statement has a market value of $12,500,000.00, with a mortgage of $4,725,000.00. Devang Patel and family's personal financial statement provided states total assets of $54,050,000.00; total liabilities of $25,110,000.00; and, a net worth of $28,940,000.00. Sharad Patel and family have provided a financial statement stating total assets of $33,415,000.00; total liabilities of $5,195,000.00; and, a net worth of $28,220,000.00. Request for Proposal Hotel Development Pr. p. Hotels First Choice Bank has provided Kamla Hotels with a letter of interest to finance this project. Vincent Wong, First Vice President of First Choice Bank states he has been in discussions with Kamla and "would offer serious consideration in providing financing for said project." (Exhibit 2) We anticipate engaging our financing institution of choice immediately after being selected as the successful bidder. We anticipate a due diligence period of approximately 60 days and close of escrow contingent upon obtaining appraisals of the fair market value and purchase price. We will purchase the property by cash, and continue to provide personal funding as we proceed through the architectural, engineering, design and permitting phases, and into the construction phase of the project. The financing process will run in the range of 90 -120 days parallel with the entitlement and permitting process. Request for Proposal Hotel Development Proposal - Kamla Hotels 7 FACILITY DESIGN AND QUALITY OF • We are providing an extensive architectural package along with this proposal. The full color photos provide a color palate based on a typical SpringHill Suites hotel. We have engaged our architect to provide a site specific design and layout. The attachments we have included are as follows (Exhibit 3): 1) The overall design of the hotel facility from a street front view, an aerial view of the site layout, a proposed first floor including the lobby layout and meeting space. Also included is a conceptual for the proposed roof top lounge. What these renderings do not reflect is the uniquely distinct Downey historical and "heritage" architectural features that we will include in the final design inside and out. 2) We have attached an extensive design package for a prototypical SpringHill Suites. Extracted from that package for this tab is a page reflecting the look and layout of the typical King room and shower, and the Queen /Queen optional layouts. These nicely exemplify the advantage of an all -suite hotel in amenity, size and comfort. These rooms are 420 square feet in size. 3) Throughout the prototypical hotel presentation attached, you will see a number of photographic representations of the lobby area. As stated above, we have provided an architectural drawing of the first floor reflecting the lobby, or "great room ", as guest enter the hotel which includes the lounge, communal circle, the buffet area and network zone. We have also singled out pages for this tab reflecting the look and feel of the prototypical lobby area. 4) For the meeting areas, please refer to the first floor layout which represents over 3,000 square feet of meeting space and business center. The main meeting room has the flexibility to be split into smaller rooms, as needed. There is a private Board Room across the hall from the proposed larger meeting room, as well. 5) Please refer to the attached prototypical SpringHill Suites hotel package for the detail of the items requested in the sub section. This hotel provides a uniquely stylish aesthetic and spacious suites at an affordable price. SpringHill Suites have become a dominant player in the upper- moderate all suites hotel market because of its design features and space. 6) As provided in the aerial site plan, this hotel will completely integrate the Dunkin Donuts as a hotel amenity. Also, provided is the integration of the existing surface parking lots and future parking structures with a fluid circulation plan. Request for Proposal 8 HOTEL OPERATING Kamla Hotels owns, operates and manages all of its hotels. The proposed SpringHill Suites is no different. In fact, the Kamla advantage is that the management team is homegrown and Downey based. No out of town management team that will take days to respond to issues and problems. Kamla commits to provide the same award winning management it currently provides to its other Downey hotels. Marriott Lodging Development, through Scott McAllister, Area Vice President, has provided us with a Letter of Interest expressing their interest in developing a SpringHill Suites hotel at the Firestone location should Kamla Hotels be the successful bidder. (Exhibit 4) b. Kamla Hotels Inca and /or an affiliate intends to develop, operate and manage this subject hotel. Kamla reserves the right to assign this hotel to new special purpose entity or LLC for this venture. In any event, Devang and Sharad Patel will act as general partners and will operate and manage this hotel. We understand that assignment of the Agreement to another entity following the date of the Certificate of Occupancy is subject to the approval by the City of Downey, and will be strictly reviewed and may not be approved by the City. We would like to reiterate that Kamla Hotels has every intention of retaining ownership and management of this hotel. Any assignment will be an "internal" assignment and "in- name" only. Attached is an "Anticipated Associate Chart -Post Opening" depicting the management and personnel structure of the proposed hotel. (Exhibit 5) There will be a general manager and an assistant general manager located on site. This hotel will employ in the range of 40 -50 employees as indicated on the Associate Chart. This is the personnel level demanded to provide the quality of service promised by Kamla Hotels and SpringHill Suites by Marriott. From its front desk staff to the servers for the complimentary hot breakfast to the servers at the Roof Top Lounge, service will be the trademark of this all- suites hotel. Wages will be of a significant, livable level at this hotel. Kamla Hotels has a history of attracting talented people and providing them the opportunity to grow with the organization. The SpringHill Suites Hotel will continue that tradition. Front desk, housekeeping, breakfast attendants and waiters will receive in the range of $10.00 14.00 per hour. Engineering and night auditors will receive in the range of $14.00- $18.00 per hour. The front desk manager, housekeeping and engineering manager will have a salary range of $28,000.00 - $32,000.00 annually. Our sales manager and, food and beverage manager will have salaries starting in the $25,000.00 - $40,000.00 range, not including commissions. Our Assistant Manager will have a salary in the $35,000.00- $40,000.000 range, and our General Manager will have a salary in the $50,000.00- $70,000.000, not including commissions. Request for Proposal In total, Kamla Hotels' employees will be receiving in the range of $700,000.00 annually in wages. This will be another $700,000.00 going into the local economy as we have a local hiring policy. c. As stated previously, Kamla Hotels has been strictly in the business of developing and operating hotels for over 25 years. It has over 1,000 hotel rooms under its award winning management. It currently operates three hotels in the City of Downey, and is the 2nd highest transient occupancy tax payer in the City, second to the Embassy Suites. Every one of Kamla Hotels' properties is located on busy commercial thoroughfares. From its hotel near Disneyland to its hotel in the wine country of Solvang, Kamla has built its reputation on serving the business traveler as well as the leisure traveler. Its hotels, as listed on the personal financial statements, include the romantic Wine Valley Inn & Cottages in Solvang and strategically located Eden Roc Anaheim Disney Resort, as well as the Residence Inn and Courtyard by Marriott under development in Riverside by its affiliate. All are either the size and /or quality of the proposed SpringHill Suites. Request for Proposal Hotel Development Proposal - Kamla Hotels DISADVANTAGED Kamla Hotels ri a certified DBE, and does not to receive information on being certified as such. Request for Proposal Hotel Development Proposal Hotels We are providing Projected Financials for the proposed SpringHill Suites Hotel as Attachment D. This includes our projected revenue and expenses for the first five (5) years of the hotel operation. As an existing Marriott franchisee and an operator of hotels for the past 25 years, we are comfortable in presenting this pro- forma. In summary, we estimate the average daily room rate to start at $125 in year 1 and will grow to an estimated $137 per room by year 5. We conservatively estimate occupancy to begin at 75% in year 1 and grow to 82% by year 5. We estimate to generate $375,722 in transient oriented tax in year 1, up to $450,225 in year 5. This hotel will generate additional tax sources to the City. The effect of the additional tax generation will be significant in the City's ability maintain and expand its level of services. With an estimated average length of stay at a SpringHill Suites Hotel of 2.3 days, there will be a significant multiplier effect through the additional shopping, restaurant and recreational use of its guests. This will be amplified by the SpringHill Suites target guest of a male in his mid - 40's, college- educated, taking 26 business trips a year with an average income of $129,000.00 per year. Remember, 58% of SpringHill Suites guests come through the Marriott Rewards program, a clear Marriott advantage. Request for Proposal Hotel Development Proposal - Kamla Hotels 11 FINANCIAL BACKGROUND INFORMATION a. Kamla Hotels Inc., the proposer, is a holding company for its numerous hotel holdings. Kamla Hotels Inc. is a limited liability corporation consisting of Devang and Sharad Patel. As such, we have provided personal financial statements for both individuals. b. Kamla Hotels Inc. is a limited liability corporation with Devang Patel acting as general partner. c. See attached Exhibit 2, Personal Financial Statements. d. Business References: 1) Aaron Telford Coastal Valley Insurance Services, Inca 2483 Sunrise Blvd, #B, Gold River, CA 95670 aaron @coastalvalley.com, (800)252 -0422 (p), (916)436 -0422 (f) 2) Niranjan Patel Niranjan D. Patel Law Offices 1800 Studebaker Rd, Suite 700, Cerritos, CA 90703 lawrewards @ndplaw.net, (562)467 -8952 (p), (562)467 -8953 (f) 3) Brendan Watters Boomerang Hotels 100 Bluegrass Commons Blvd, Suite 110, Hendersonville, TN 37075 Financial References: 1) Kimberley Thorn berry Vice President, Senior Relationships Manager Banc of California 888 Disneyland Dr., Ste. 500, Anaheim, CA 92804 Kimberley .thornberry @bancofcaI.com, (714)864 -5009 (p), (877)885.4820 (f) 2) Vincent Wong First Vice President First Choice Bank 17785 Center Court Drive, Suite 750, Cerritos CA 90703 (562)345 -9092 (p), (562)926 -8737 (f) e. The financial changes that have occurred over the past two years for Kamla Hotels and its principals have been positive with a steady growth in annual revenue and asset value. f. Kamal Hotels is not in the Dunn and Bradstreet nor the Standard and Poor's Summary. As stated previously, Kamla Hotels is a limited liability corporation that is a holding company for the many hotels owned and managed by Kamla. Request for Proposal Hotel t *, Proposal Hotels equity to develop this project. d. Vincent Wong First Vice President First Choice Bank 17785 Center Court Drive, Suite 750 Cerritos, CA 90703 (562)345.9092 Tel (562)926.8737 Fax Kimberley Thornberry VP, Senior Relationship Mgr. Banc of California 888 Disneyland Dr. Ste. 500 Anaheim, CA 92804 (714)864.5009 Tel (877)885.4820 Fax Kimberley .Thornberry @bancofcal.com e. Please see the attached letter (Exhibit 6) from Vincent Wong from First Choice Bank. His contact information is provided above. f. Please see the attached Attachment E's. g. Kamla Hotels is not currently in any lawsuits or financial settlements that would impact our ability to undertake and complete this project. h. Kamla Hotels is not involved in any litigation or other disputes that could result in a financial settlement having a material adverse effect on our ability to execute this project. L Neither Kamla Hotels, Devang Patel nor Sharad Patel have filed for bankruptcy or had projects foreclosed upon. Request for Proposal KAMLA HOTU I $ Truly, City of Downey Attn: Aldo Estrella Schindler Director of Community Development I I I I I Brookshire Avenue Downey, CA 90241 M Truly, Shared Patel State of California County of , I t,:, , me On before lvi, �t4 i 1-c _ti 6 Here Inser ame an� Title of UI abate; Officer personally appeared V Name(s) of Signer(s) WITNFSS my tiled and 00(-Ial seal, ALICIA PLANCAR Commission # 1961517 Notary Public - California z ..... . . .... Los Angeles County Sign Nly Comm Eipires Fv6 7, 2016 13i qnal"f,e of Public Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or ,fraudulent reattachment of this form to an unintended document- Description of Attached Document Title or Type of Document: DocumeW Date'. Number of Page.; Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name Signer's Name: I I Corporate Offw-�r — Title(s): Corporate Officer — Title(s). Partner Litii led Ci General Partner Limited General Individual Attorney in Fact Individual Attorney in Fact Trustee Guardian or ConseIIvato! Trustee Guardian or Conservatot I Other: Other Signer Is Represe,)ting, Signer Is Representing, Oc 2014 National Nolary Association • www.NatiorialNotary org • 1-800-US NOTARY (1- 800 -876 6827) Item #5907 ATTACHMENT "B" tuallifications E -mail address: dpatel @kamlahotels.com Hotel Operation annual gross revenues for the last 5 years (if applicable): Approx $1,500,000.00 since ownership in 2012 annually. (Use additional sheets for other locations) ATTACHMENT "B" Qualifications Statemel (Use additional sheets for other locations) ATTACHMENT "B" Project Name and Location: American Inn- Downey, CA $180,000 annually. (Use additional sheets for other locations) The proposer has operated under its current name since 2006 fora period of 8 years and 9 months, and the Proposer (if applicable, ) formerly operated under the name: Independent ATTACHMENT "B" Qualifications Statement (Use additional sheets for other locations) ATTACHMENT "B" (Use additional sheets for other locations) ATTACHMENT "B" E -mail address: dpatel @kamlahotels.com Hotel Operation annual gross revenues for the last 5 years (if applicable): $950,000.00 annually (Use additional sheets for other locations) The proposer has operated under its current name since 2006 for a period of 8 years and _ 9 months, and the Proposer (if applicable, ) formerly operated under the name: Independent ATTACHMENT "C" I Fill in the following information exactly as it is to appear on the Agreement; if operating under a fictitious name, so indicate. Name of Firm: Kamla Hotels Inc and/or affiliate Business Purpose Develop SpringHill Suites By Marriott at 9066 Firestone Blvd, of Proposer: Principal Office Address: 12644 S. Lakewood Blvd. Suite 100 Downey, CA 90242 Individual Corporation Limited Liability Partnership Joint Venture Business Association X Other (Explain) LLC to be formed for this venture, . y.� � � � � « : a� � � \ \ ^� � \ : « � � �� �� \� :dam � )� � \ \ � � «� : � :� \ a.� � � `� � ®« \ \� \\ ��� \ \��\ \ S? °� � <: .� . «2 «± <�� � d ..... .....� \ \± : � » . «� � � \ � . � � � \� \ } \� �� ( � l� �� « . \���... ���\ \� »2 � � � � � »� mw ��� /\ / % 1 � �iui� um�nruuuu�rrnii� �rw�wMwiwi�uww�%�� ,� •.�� Marriott. December 15, 2014 Mr. Dev Patel Kamla Hotels 12644 S. Lakewood Blvd Suite 100 Downey, CA 90242 Dear Mr. Patel, Marriott International; Inc. Hotel Development 1301 Dove Street, Suite 500 Newport Beach, CA 92660 Scott McAllister Vice President 480- 962 -1809 480- 907- 1191Fax It was a great pleasure speaking with you about your interest in developing a Marriott branded hotel in Downey, CA. This letter is to express our interest in developing a SpringHill Suites in the Downey, CA market. As we discussed, Marriott International does not have any hotel representation in Downey and have been interested in developing a hotel on the site on Firestone Blvd. Marriott is interested in Kamla Hotels developing a SpringHill Suites in Downey should Kamla Hotels be successful at acquiring the site through the RFP process. Based on my knowledge of the Downey market and my meetings with several of the Downey City Officials, I would suggest developing a SpringHill Suites that would have somewhere between 115 -135 rooms based on site layout and other factors. As you know, the SpringHill Suites is doing very well as a brand. With a newly designed lobby experience, fitness facility, complimentary breakfast all make for great amenities at an all -suite hotel that would benefit both the business traveler as well as the leisure traveler. While the SpringHill Suites brand does not have a full service restaurant, it wouldn't be necessary based on the number of restaurants nearby, but you developing a bar would be another nice amenity for hotel guests. Please feel free to reach out with any questions or when you are ready to discuss the next steps. Kind regards, Scott McAllister Area Vice President Marriott Lodging Development IFM -1 ®d d m� 9 a d a w® �o IFM -1 First Choice BankTm First in Speed I Service I Solutions To: Tn whom h may concern, RE: Credit Reference or Mr. Devang Patel of Kamla Hotel Group and RFP Springhills Suites Hote Development in Downey, CA. Tm whom iit may concern, Suites Hotel in Downey. This is the type of the property/transaction FCB would be interested inn providing financing for. Given Mr. Patel's extensive experience in hospitality industry and his i�utstanding track record with FCB, and provided that all terms and conditions fall within FCB's lenclin?�, 0 Headquarters - 17785 Center Court Drive, Suite 750, Cerritos ' CA 90703 o Tel' (562) 345-9092 - Fax. (562) 926-873 11 Cerritos Branch 12845 Towne Center Drive, Cerritos, CA 90703 - Tel: (844) 392-2842 - Fax. (562) 381-711 0 Alhambra Branch 407 W. Valley Blvd., Unit 1, Alhambra, CA 91803 * Tel: (626) 300-8987 - Fax, (626) 300-850 0 Rowland Heights Branch - 17458 E. Colima Road, Rowland Heights, CA 91748 - Tel: (626) 964-3400 o Fax. (626) 964-875 0 Anaheim Branch - 2401 E. Katella Avenue. Suite 125, Anaheim, CA 92806 , Tel: (714) 634-5119 - Fax' (714) 456-9811 SPRINGHILL SUITESO GEN 4.5 Proto-Model Design Al-',.Cll,TEClURE AND CONSTRUCTION Building Length 298 feet Building Depth 65 feet Land 2,18 acres Parking 128 spaces Front Elevation >)ae man E King 67% Queen/Queen 33% 14' -6 min cir King with Shower I 14' -6" min, dr. Queen/Queen with Shower 14' -6' min, cir Queen/Queen with 4'6"Tub a a �♦ Program (Prototype) Pl1I#II0olof 1;01 Ai ('I) (1idl'1t; Mv11I /,Jd /, r(!)I /I(SI(. King Shower 63% 81 369 29,889 King Accessible 3% 4 496 1,984 Queen /Queen Shower 14% 18 436 7,848 Queen/Queen with 4' -6" Tub 11 °!0 14 436 6,104 Queen/Queen with 5' -0' Tub 6 °!0 8 496 3,968 Queen /Queen Accessible 2% 3 496 1,488 Total units 100% 128 Total Guest Rooms (tiff f'I W010 S l(I 1 O I J( (k(411 ('I I(tN N k I OOk (11v111 AN I 10,1/d (f,l ) Corridor /Elevator Lobby 5,344 Total Back of House 7,551 7,551 Stairs Total Square Foot Per Room 2 232 1,856 Elevators 2 131 524 Elevator Machine Room 84 84 Linen 326 326 Vending &Ice (Upper Floors) - 1 306 306 Guest Laundry 87 87 Total Guest Room SupportlCirculation 10,734 H)H R( [,A( 1 10 AI (T, I) Lobby /Lounge 2,066 The Market 111 Vending Area 0 Business Library 112 Meeting Room 356 Fitness Room 419 Vestibule (Front & Rear) 132 Cart Storage 40 Circulation 673 Public Toilets 254 Indoor Pool 1,181 - Total Public Space 5,344 ®si Spring Hill Suites by Marriott (K01iOtJ 1;01 Ai ('I) Registration Desk 229 " Work Area 297 General Manager Office 171 Sales Manager Office 236 Luggage Storage Room ' 61 Associate Break Room - 190 Associate Restroom 47 Housekeeping Laundry 557 Food & Beverage Preparation Room 260 Engineering /Maintenance Room 214' Mechanical /Electrical Room 822 Janitor's Closet 28 Telephone Equipment/Video Room 213 Pool Equipment /Storage 109 The Market Storage 71 Corridor & Roof Access - 522 Total Back of House 4,027 'Y tx,5 S3 s33;;�.3df�jt }Ty.> tr }rP�l ��.t #SStiry tf�rf�S(5 YT4f i § }.y : �u11� { {{ {11``'1'7 {Y'li Stl% T}li}rr"tt } 4',?ryfi Total Guest Rooms 51,281 Total Guest Room Support/Circulation 10,734 Total Public Space 5,344 Total Back of House 4,027 Total Gross Building Area 71,386 Total Square Foot Per Room 558 Data based on a 128 -room prototype d" r' hh � 7t xfFt �sr Brand Positiicining: STYLE, SPACE, VALUE SpringHill Suites by Marriott' is an upper-moderate all-suites hotel brand that delivet the space, and the stylish, inspiring spaces that enrich our guests' travel at a great valu • Provide dedicated business center • Offer optional bar plan ■ Feature one compartment bathroom ■ Allow for optional two compartment bathroom MarriottO International partnered with the U.S. Green Building Council's (USGBC) and joined its LEED Volume Program to develop a pre- approved prototype design for each of our Select Service and Extended Stay brands. Simplifying the LEED certification process enables owners to take advantage of a cost - effective and streamlined approach to building their hotels- T Marriott aspires to be the global hospitality leader that demonstrates how ' ' responsible hospitality management can be a positive force for the environment and create economic opportunities around the world. Marriott International, Inc - 10400 Fernwood Road, Bethesda, MD 20817 ® MarriottDevelopment,com March 2012 02012 Marriott International, Inc: GDPS 120143 Es r * w u- r its... F \ sly t f' it i Y r its... ������ «^ ---- -- . . \» 2 \: --------------------- \\ \ < + + / ens « wm«, o . w.. .. . . . «imp m# ...... MdSNI U 0. S9 "'MN3'3 E6lCE160 ...0 WMI. I Wo)10 31V "ns"I sue ioo do r !d I� 1PuejeoldAl-1!ungZl-S-60 &-60 aF<aar�3�li p... 1!Nn m r SNVld 800-U d01 (IMd Tdald)d 6 n iiutn .ticxmswa'a *i ., to ^J#mtls...a Mcdui 3r3 V 3S3'ru ^��- OIMt6G5£ii C£:} £1614 Nm 1ti531130 `, �M042k*�ivMN'S ➢S N6iDi SUNIMV80 3NI130m) NOIS30. ''..... 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