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HomeMy WebLinkAboutLinn-Court Sherman Associates proposalM 1 mmmm� mal'Imm ftmmft� .1 RAW"I I all 0 0 7 gj. vabb d CmUM2 Content I Section Proposal Submittal Signature Form .................................................................................. 1 SignedCover Letter .......................................................................................................... 2 Contacts........................................................................................................................... 3 DevelopmentEntities ....................................................................................................... 4 ContractEntities .............................................................................................................. 5 OrganizationalChart ........................................................................................................ 6 Experience....................................................................................................................... 7 FinancialCapacity ............................................................................................................ 8 ProjectNarrative .............................................................................................................. 9 Financial Narrative (Sources & Uses) .............................................................................. 10 VisualDescription .......................................................................................................... 11 EnergyEfficiency ............................................................................................................ 12 Litigation........................................................................................................................ 13 References..................................................................................................................... 14 Unique Resources, Capabilities & Assets ........................................................................ 15 1 EXHIBIT "A" Proposal submittal signature form The undersigned attests to his/her authority to submit this proposal and to bind the firm herein named to perform if the firm is selected by the City of Iowa City. The undersigned further certifies that he/she has read the Request for Proposal, terms and conditions, and any other documentation relating to this request; has complied in all respects with all conditions hereof, and this proposal is submitted with full knowledge and understanding of the requirements and time constraints noted herein. The undersigned hereby further acknowledges that it accepts the terms of the Request for Proposals in its entirety and by the submission of its proposal hereby waives any claims or claims to irregularities that arise out of such RFP, the process employed by the City to solicit and develop proposals, or the RFP evaluation process described in the RFP, and agrees to release and hold harmless the City, its employees, agents, and consultants from any claim, loss, or damage arising therefrom. The undersigned hereby authorizes any person, firm or corporation to furnish any credit history and financial condition or other information required by the City to verify information related to the firm's submission to the City. I hereby certify, on behalf of the undersigned firm, that the above information is true and correct to the best of my knowledge and that the City may rely on the information provided. Firm name: Sherman Associates Inc. Home office address: 233 Park Avenue South, Suite 201 City, state, zip� Minneapolis, MN 55415 Name and Title of Representative: Name: George Sherman Signature: Date: 07/15/14 19 2 F&sherman A S S 0 C I A T E S July 15, 2014 City Clerk City Hall 4 10 East Washington Street Iowa City, Iowa 55240 Re: Sherman Associates Proposal for the Court St/Linn St Redevelopment Dear Iowa City Staff, Sherman Associates and our development partners are pleased to submit the enclosed proposal for redevelopment at South Linn Street and East Court Street. The enclosed materials demonstrate our team's mixed use and urban infill experience. It shows our ability to deliver a product that is in line with the city's goal of an urban, downtown - density development. We propose to develop the site into three distinct yet interconnected uses. We would develop 91 market rate residential units, a nationally branded 146 key hotel and 23,000 square feet of flexible office space. The development would include 329 structured parking stalls, to serve the needs of the site. Sherman Associates and associated entities would be the long term owner and operator of all components of this development. This development would bring street level vibrancy and vertical development to the area. Our team possesses three key competencies that will enable us to deliver this product on time and on budget: Efj�ctive Public -Private Partnerships: The development team recognizes local governments as critical partners in the development process. Through the coupling of expertise and through effective communication we create measurable impact within communities. 0 Thoughyid Design and Quality Construction: The development team has experienced design and construction professionals on staff to ensure quality and timely delivery. Effective Communication with stakeholders allows us to create innovative and aesthetically appealing building while ensuring that budgets are held. Complex Financing: Sherman Associates has the ability to secure and manage a variety of complex funding sources. We bring our experience, as well as strong relationships with financial institutions, to the Linn & Court Street project. The development team is excited about the possibility of partnering with Iowa City to develop this underutilized parcel into one that demonstrates the vibrancy of the downtown district. Thank you for the opportunity to submit this proposal. We look forward to answering any questions you may have through the review process. Sincerely, George Sherman President Sherman Associates, Inc. 233 PartAvcnue South, Suite 201, Minnedpolis, MIN 554 15 Tel: 612-332-3000 Fax: 6 12-332-8 � 19 - wAwsherman-associaLes.com Shxm�nn Assocfne,� is i�n Ecpjo) Oppurtw)ity Enpioycr Sherman Associates, Inc. 233 Park Avenue South, Suite 201 Minneapolis, Minnesota 55415 Phone: 612.332.3000 Fax: 612.332.8119 PRIMARY CONTACT Jackie Nickolaus, Vice Preside nt/Project Manager 515.491.5103 1 mnickolaus@sherman-associates.com Jackie Nickolaus is Sherman -Associates Iowa -based project manager. Her main focus will be working with local development authorities and coordinating local team members. Jackie Nickolaus has a 10 -year history of downtown redevelopment practice, including long-term planning and project implementation. Before joining Sherman Associates in 2005, she was an Economic Development Coordinator for the City of Des Moines. Jackie earned a University of Iowa Bachelor of Arts Degree and a Master of Arts from the University of Minnesota's Humphrey Institute of Public Affairs. ADDITIONAL CONTACTS George Sherman, President/Owner 612.332.3000 1 gsherman@sherman-associates.com George Sherman will oversee the development process and will be involved in a// critical decisions. Mr. Sherman has been involved in multi -family and single-family housing for 25 years. He has been the principal involved in the completion of over $2 billion in real estate development. Presently, Mr. Sherman is the President and Principal Developer of Sherman Associates, Inc. Sherman Associates, Inc. has developed approximately 8,500 multifamily, townhouse and single-family homes, 600,000 square feet of commercial space and two hotel properties. Mr. Sherman is a graduate of the University of Minnesota where he earned a BS in Biochemistry in 1976 and completed MBA studies in 1977. Rich Kiemen, Senior Vice President of Construction 612.604.0865 1 rkiemen(@sherman-associates.com Rich Kiemen will oversee and help coordinate a// construction activities on behalf of Sherman Associates, from initial project design and cost estimations through completion of construction. Richard Kiemen has more than 25 years' experience in general contracting and project management. Working with Sherman Associates since 2005, he has been involved with multi -family, residential, public and private construction projects throughout the Midwest. Richard received a bachelor's degree in Architectural Engineering from Milwaukee School of Engineering and holds a Minnesota residential contractor's license. Tony Kuechle, Project Manager 612.604.0852 1 tkuechle@sherman-associates.com Anthony Kuechle is an accomplished real estate professional with over 19 years of experience in real estate development, acquisitions and asset management. Prior to joining Sherman Associates in 2010, Anthony worked as a Vice President of Development and Acquisitions for Hempel Properties and a Project Manager for United Properties. He has a Bachelor of Science in Real Estate and Finance from St. Cloud State University. L� EMOROUSO Sherman Associates, Inc. 233 Park Avenue South, Suite 201 Minneapolis, Minnesota 55415 612.332.3000 George Sherman: 100% owner Sherman Associates Development LLC 233 Park Avenue South, Suite 201 Minneapolis, Minnesota 55415 612.332.3000 George Sherman: 100% owner Craftsman Construction, Inc. 233 Park Avenue South, Suite 201 Minneapolis, Minnesota 55415 612.332.3000 George Sherman: 100% owner To be formed single asset entit 5 r91 (n-) 0 UTIBRU I architects LRCHITECr MARK SWENSON Principal mark.swenson@esgarch.com CITY OF IOWA CITY r&sherman ASSOCIATES SHIVEFIA77EFZY ". STRUCTURAL, LLANDSCAPE PHIL LARSON Vice President plamon@shive-hattery.com GEORGE SHERMAN President and Principal Developer JACKIE NICKOLAUS Vice President/Project Manager TONY KUECHLE Vice President/Project Manager WILLANDERSON Associate Project Manager CONSTRUCTION MANAGER — RICH KIEMEN Senior Vice President — RON WAGNER Vice President 1111111"knuirsen EIIL cost'Zia. I ENERGY DESIGN L JIM DOUGLAS, PEJEEDAP Project Manager JimD@TWGI.com GENERAL CONTRACTOR BRADJOHNSON Vice President/General Manager bjohnson@KnutsonConstruction.com 7 2huffian AmDQUOSUZOO pmqufla M Sherman Associates, Inc. 233 Park Avenue South, Ste. 201 Minneapolis, Minnesota 554 Phone: 612.332.3000 www.sherman-associates.com Virlssherman A S S 0 C I A T E S Sherman Associates, Inc. is an award-winning developer specializing in design, construction and financing of quality housing and commercial properties in Minnesota, Wisconsin, Iowa, Missouri and Colorado. Having earned a strong reputation for quality and follow-through, cities around the country have turned to Sherman Associates to pioneer redevelopment in their downtowns and highest priority neighborhoods. Sherman Associates' experience includes new construction and rehabilitation of historic structures. With over 30 years of development and construction experience, Sherman Associates is able to offer a diverse range of services in the commercial, single-family and multifamily markets. These services include: • Development Services * Construction • Design -Build Services * Site Analysis • Financial Analysis/Feasibility * Marketing Programs/Feasibility • Federal, State and Local Housing Programs * Equity and Debt Funding • Property Management Services Sherman Associates has established an impressive and prolific track record, completing over $2 billion in real estate development. Sherman Associates has developed approximately 8,500 multifamily, townhouse and single-family homes, 600,000 square feet of commercial space and two hotel properties. Our current pipeline consists of $200 million to $250 million a year in new developments, both commercial and residential. This experience allows ourfirm to bring about the following outcomes: • Assemble financing from a variety of public and private sources • Create strong public-private partnerships • Complete mixed-use and mixed -income projects • Ensure thoughtful design and quality construction • Create tangible community impact Contacts George Sherman, President/Owner 612.332.3000 1 gsherman@sherman-associates.com Jackie Nickolaus, VP / Project Manager 515.491.5103 1 qnickolaus@sherman-associates.com Rich Kiemen, VP Construction 612.604.0865 1 rkiemen@sherman-associates.com Susan Fauver, General Council 612.604.0853 1 sfauver@sherman-associates.com Chris Sherman, VP / Project Manager 612.604.08591 csherman@sherman-associates.com Tony Kuechle, VP / Project Manager 612.604.0852 1 tkuechle@sherman-associates.com Will Anderson, Associate Project Manager 612.604.0866 1 wanderson@sherman-associates.com 2huffian AmDQUOME200 pmqufla M Zenith Condominiums I aLoft Hotel Minneapolis 901 2nd Street South Minneapolis, MN 55415 Use: Hotel, Housing (condos), Commercial Development Team: Developer- Sherman Associates Architect- ESG Architects GC- BOR -SON Construction Project Value: $61 Million 4 1. Mll,= Ow", ��MM ;low JIM moo ttD, 'oil FuhandM Sherman Associates has completed more than $2 billion in real estate development. Sherman Associates has experience in developing strong public-private partnerships and brings expertise in assembling complex financing from a variety of public and private sources. Below are several Sherman Associates projects recently completed or under development that highlight the complexity and variety of the firm's financing experience. Riverside Plaza: 1,303 Residential Units & K-8 Charter School Minneapolis, MN Total Development Cost: $132 Million Financing: Federal 4% UHTC Equity, State Historic Tax Credits, Federal Historic Tax Credits, Tax Exempt Bonds, HUD Insured Mortgage, MIN Housing Fund's (MHFA) Economic Development and Housing Challenge, MHFA's Preservation Affordable Rental Investment Fund, Metropolitan Council's Local Housing Incentive Account, Family Housing Fund, Greater Metropolitan Housing Corporation, and multiple Brownfield sources, Equity Rayette Lofts: 88 Residential Units & Commercail (Under Construction) St. Paul, MN Total Development Cost: $25 Million Financing: Conventional Mortgage, Federal Historic Tax Credits, State Historic Tax Credits, Metropolitan Council TBRA/TOD, Energy Credits, Equity Harrison Lofts: 60 Residential Units & Commercial Davenport, IA Total Development Cost: $8 Million Financing: Iowa Finance Agency First Mortgage Loan, State and Federal Tax Credits, EZ Sales Tax Rebate & Equity, Neighborhood Stabilization Plan Funds, and Land Contribution by City of Davenport, Equity West Side Flats: 178 Residential Units & Commercial St. Paul, MIN Total Development Cost: $38 Million Financing: HUD Insured Mortgage, TIF, MHFA HOME Funds, Department of Employment and Economic Development, Metropolitan Council TBRA, Equity The Nexus: 142 Residential Units & Commercial (proposed) Des Moines, IA Total Development Cost: $27.5 Million Financing: HUD Insured Mortgage, City Assistance, Brownfield Tax Credits a pr4aN HaTT00OWS Sherman Associates proposes a mixed-use development at the corner of South Linn Street and East Court Street in Iowa City, Iowa. Our proposal calls for the construction of a hotel, market rate rental housing, office space and a parking structure. The development would capitalize upon the site's prominent urban location and would advance the City's goal of transforming underutilized property to active uses. It would build upon the already vibrant and walkable downtown area. The development is consistent with the City's Economic Development Policy and Downtown Strategic Plans. This proposal is being presented to stimulate dialogue regarding potential public/private partnership terms. Sherman Associates would acquire the parcel and develop the entire 1.93 acre site as one project into three distinct yet interconnected uses. Residential - The residential component would consist of 91 units. A variety of layouts would be available including efficiency, one bedroom and two bedroom. We expect the project to attract a variety of potential residents. However we anticipate young professionals working in the Iowa City market to be primary residents. Units would feature high quality interior finishes in line with class A market rate apartment products. The amenity package would include a rooftop deck, community room, pool, patio, theater room and fitness center. The 5 story residential structure, clad in brick, glass and metal panel, would anchor the south side of the project. Upon construction completion the residential portion would be owned and operated by an entity associated with the developer. Hotel - The proposed nationally branded hotel would include 146 guest rooms. Due to its location we anticipate bookings from both business and leisure travelers. Amenities would include a restaurant, meeting rooms, exercise facility, pool and patio. The hotel structure would be six stories, with the front entrance on grade at East Court Street. Upon construction completion the hotel portion would be owned and operated by an entity associated with the developer. Office - Included within the proposal is 23,302 square feet of office space. It will be accessible off of south Linn Street, from its own separate entrance. The space will have a creative feeling with a curtain wall of glass and soaring ceiling heights. The office space will have access to the parking garage. We currently underwrite the space to serve as incubator space forthe Iowa City Market. a pr4aN HaTT00OWS Parking - The parking structure would have a capacity of 329 vehicles. The parking structure would serve the residential, office and hotel development. The parking structure would not be visible from the street as it would be lined bythe residential and hotel developments. This proposal package details the developer's intent to transform this site from an underutilized parcel to an active multi -use development. This site is poised to become a tremendous asset to the neighborhood, the Riverfront Crossing Area and to Iowa City. Organization & Management Approach Sherman Associates and the development team have a track record of successfully bringing mixed use development projects to market. Our achievement is driven by three key competencies, identified below: Effective Public -Private Partnerships: The development team recognizes local governments as critical partners in the development process. Through coupling the expertise of the development team with the local knowledge of government entities we create measurable impact within communities. This impact is clearly illustrated in our Heritage Park project. Sherman Associates, ESG Architects and the Minneapolis Public Housing Authority partnered to create a mixed use development that incorporates housing, a memory care facility and public space. The development has a contemporary design and brings and brings a needed service to the community. Effective communication and partnership between the development team and a local government entity enabled a successful project Complex Financing: Sherman Associates has the ability to secure and manage a variety of complex funding sources. We have extensive experience in TIF, LIHTC, Historic TC, New Market Tax Credits, HUD Mortgages, Energy Rebates, and Enterprise Zone Credits. Our Riverside Plaza rehabilitation project has 17 sources that must be managed. Sherman Associates leverages this experience and strong relationships with financial institutions. Thoughtful Design and Quality Construction: Sherman Associates has been recognized for their innovative and functional designs. In 2010 the development team won a "Best of the Decade" award from the Minneapolis/St. Paul Business Journal for the Midtown Exchange/Chicago Lofts project. We have experienced construction professionals on staff to ensure quality and timely delivery. Effective communication with stakeholders allows us to implement cost saving mechanisms while ensuring the aesthetic and functional appeal of the project. The development team has demonstrated the ability to deliver mixed use products similar to what is proposed at the Linn & Court site. This is a result of an organizational approach that values communication and places a premium on accountability and delivery. Schedule It is anticipated that the project will be completed within 18 - 24 month following commencement of construction. Property acquisition and construction commencement are anticipated to occur in summer, 2015. A detailed construction schedule will be provided at a later date. a pr4aN HaTT00OWS Financing Plan Project will be financed with conventional debt, owner equity, and gap sources. Sherman Associates would like to open a dialogue with city staff regarding potential gap sources. Potential gap sources may include: 1) Tax Abatement: $2.5M - $3.5M 2) Tax Increment Financing: $8M - $10M 3) Construction Cost Savings: $4M - $5M 4) Subsidy of Incubator Office Space: $4M - $5M 5) New Market Tax Credit (Contingent on NMTC Award): $3.5 - $4 Million 6) Housing Enterprise Zone Credits & Sales Tax Rebate: $1 - $3.5 Million See financing section. Marketing Approach Sherman Associates marketing staff and external vendors conduct an extensive review of the surrounding neighborhood and market comparables. Sherman Associates marketing staff conducts advertising analysis and projections. Marketing budgets include but are not limited to: • Internet Listing Services • Brochures and Other Marketing Materials • Office Setup and Staffing Costs • Open House Events • Referral Services • Site Signage A marketing plan and lease -up schedule is developed. Goals and leasing incentives are put in place. Sherman Associates marketing staff works closely with compliance, regional management and executive management to assure that marketing plan is executed and all deadlines are met. Proposed Purchase Price for Land Sherman Associates proposes that the City provide the land at no cost to the development. City contribution of the land helps to fill the project financing gap. See sources & uses document. 10 Iowa City Mixed Use Development - Summary Document 07.14.14 Uses Hotel Housing Commercial; Total Land Costs - - - $3.5-$4 Architectural & Engineering Costs 700,000 650,000 300,000 1,650,000 Construction Costs 24,102,963 22,303,955 7,991,692 54,398,610 Financing/interim Costs 1,716,767 803,613 343,475 2,863,855 Other Costs 4,500,000 2,858,121 673,161 8,031,282 Total Uses 31,019,730 26,615,689 9,308,328 66,943,747 Sources Developer Loan 21,047,343 12,978,510 3,752,841 37,778,693 Developer Equity 4,600,000 3,850,000 1,400,000 9,850,000 Gap 5,372,387 9,787,179 4,155,487 19,315,053 Total Uses 31,019,730 26,615,689 9,308,328 66,943,747 Potential Gap Sources (Millions) Tax abatement $2.5-$3.5 Tax increment financing $8-$10 Construction cost savings $4-$5 Subsidy of incubator off ice space $.75-$1 New Market Tax Credits $3.5-$4 HEZ Credits & Sales Tax Rebate $1-$3.5 $19.75-$27 Public Financial Participation Sherman Associates staff desires to conduct discussions with City staff regarding project gap financing. Public financial participation in this project will further the City's economic development goals. This project will increase residential density, bring a mix of uses to the area and create vertical development in the downtown core. The location is walkable and the design contributes to a vibrant streetscape. The mix of users at the site- hotel guests, office users and residents, will contribute to the economic vitality of the area. The economic benefits of investment in this site will be felt by businesses and individuals in the surrounding neighborhood. Market Demands and Conditions Sherman Associates has conducted preliminary market analysis at the site. The uses proposed are viable. There is demand for market rate rental housing, office and hotel rooms in the area. Sherman has developed over 8,500 multifamily homes, two hotels and over 600,000 square feet of commercial space, throughout the Midwest. This experience, coupled with the expertise of local staff based in Iowa, has given the developer confidence in the preliminary design and underwriting of this project. Should our proposed project move forward, additional market studies would be conducted. The project would be further refined based on this additional analysis. HOTEL, HOUSING AND OFFICE COMPONENTS OF THIS PROJECT IC Hotel Sources and Uses 07.15.14 Uses Total Per Unit PGSF Land Costs Architectural & Engineering Costs 700,000 4,795 7.27 Construction Costs 24,102,963 165,089 250.31 Financing Costs 1,716,767 11,759 17.83 Other Costs 4,500,000 30,822 46.73 Total Uses 31,019,730 212,464 322.14 Sources Developer Equity 4,600,000 31,507 47.77 Loan 21,047,343 144,160 218.57 Gap 5,372,387 36,797 55.79 Total Uses 31,019,730 212,464 322.14 ,Gap - Assumptions ft of keys 146 Gross SF 96,294 IC Hotel Development Costs 07.15.14 Land Costs Total Per Unit PGSF Land Acquisition Subtotal Architectural & Engineering Costs Architect Fees 600,000 4,109.59 6.23 Engineer Fees 100,000 685 1.04 Subtotal 700,000 4,795 7.27 Construction Costs Construction Cost(.. 15,960,000 109,315 165.74 General Conditions 1,476,300 10,112 15.33 Escalation 159,600 1,093 1.66 Contingency (owner) 500,000 3,425 5.19 Project Fee 959,595 6,573 9.97 CM Fee 500,000 3,425 1 5.19 Parking Construction 4,547,468 1 31,147 1 47.22 Subtotal 24,102,963 165,099 250.31 Financing Costs Alta Survey/Platting 6,000 41 0.06 Appraisal Fees 5,000 41 0.06 Carrying Costs 1,157,604 7,929 12.02 Lender Closing Fees 50,000 342 0.52 P&L Insurance Construction Insurance 40,000 274 0.42 Environmental Phase 1 2,500 17 0.03 Inspecting Architect Lega 1 150,000 1,027 1 1.56 Lender Site Inspection 10,000 68 0.10 Loan Origination Fees (Construction) 210,473 1,442 2.19 Loan Origination Fees (Perm) Tax contract & Flood Certificate Title / MRT 84,189 577 0.87 Subtotal 1,716,767 11,759 17.93 Other Costs FF&E 2,000,000 13,699 20.77 Ownership Direct Purchases 309,900 Guest Rom Corridors 100,000 Public Area 100,000 Hotel Rom FF&E 876,000 OS&E 489,100 Signage(interior & Exterior) 50,000 Technology 75,000 Ownership Startup Fee 500,000 3,425 5.19 City/Govt Fees Development Fee 2,000,000 13,699 Subtotal 4,500,000 30,922 46.73 TOTAL DEVELOPMENT COST 31,019,730 212,464 3;22.14 Assumptions # of keys 146 Gross SF 96,294 Iowa City Mixed Use Housing Development Preforms Prq..t Name Address Gity, State Zqpcode 5224D r County Johnson B. Site S, Structure Information 1. SIM INFORMATION a Total Site Area SF 84,D71 ft. 1 93 Density 47 rarda/ace, b Legal Dranniption F 2. BUILDING INFORMATION Ty,ass of Stractuam, Housing Siators Tyie, of Budding N u in her of Buildings N u in her of Stories Nuratherof Units Grass Sul Feet Now Construction Unit Type Numthei-of � Unit S 91 92,1 FM Rehabilitation Total R (MR,TG) It Bods Units )a (SqF't' MonthlyRont Rent Potential Tor Utilit.s Totalftizaring 0 0 91 92AW Non -Housing Space $ 123,614 3d 2 299 Unift:l 91 1 f2,f14 Administrator $ 123�614 1 Total Rental Income(mo) TotalRoores:1 D I Bud Debt $ Community Space 3f g Other Loss (specify) $ Common Arme 3g TotaiRectudifLoars Total Non -Housing 1 0 11 0 0 1 Rental Income $ TotalSpace: 1 0 1 0 911 92,1 W 7Z714 rentathle (1) We& up (144B), Townfromes (M), Ekeator (E), &nab Famly (SF), DWbx gle) (2) Tdain�erofm�nhal���me�Mdetac�dg�W�a�deta�da�oqW�Ms II. Development Infor-mation $ 1,483,MG I Total Rental Income(yr): Mailret Rate $1.70 Average PSF I Commercial Space sf Sledfly, $ - TotalConamenciallibeyeacre, R.n:.n In -me Unit Type Numthei-of � Unit S I Grass Monthly MoluffilyTrunint Rest. R.stn.t.n Total R (MR,TG) It Bods Units )a (SqF't' MonthlyRont Rent Potential Tor Utilit.s (%Ml) J.ntl Room s :s MR 91 71 $ $ 123,614 3d 2 299 Unift:l 91 1 f2,f14 $ 123�614 1 Total Rental Income(mo) TotalRoores:1 D $ 1,483,MG I Total Rental Income(yr): Mailret Rate $1.70 Average PSF I Commercial Space sf Sledfly, $ - TotalConamenciallibeyeacre, 2 Pandang Spaces 7% Sufface $ 1D3,8r36 $ renthao $ - Underground Ga.,. 1 ;14qq,uan:Z $76 w $ rename $ 15trugh George hudividual) qua $ rename $ - 3c 11,106 d Other Income Vacancy $ 158,688 Tom/ ftering Revenue Ill. Operating Budget A. Annual Income 1. RENTAL INCOME a Rental Income Potentiol la 1,483,366 b CommencolinoomePotentiol 11, - c Penang Rent Potential Ic 158,688 TotalRentalinconne, Total Rental Income Potential S 1,642,054 2. OTHER INCOME a Tenant Fees (specify) _iPerund 2a b Laundryinoome _iPerund 21, c Formited Socunty Deposids _iPerund 2c d Interest Income 2d a Misc Income 2. TotalOtherdacome, 3. RENTAL LOSS a Rental Vacancy 7% M $ 1D3,8r36 b Com mencial Vacancy 31, - c Penang Vacancy 3c 11,106 d Other Income Vacancy 7% 3d 2 299 a Rent Concraeurons $ 3a I Bud Debt $ 3f g Other Loss (specify) $ 3g TotaiRectudifLoars 4. TOTAL REVENUE 1 Rental Income $ 1,M2,0M 2 plus Otherincome $ 32,841 3 less Rental Loss $ 117,243 TotaiReverame $ 1,557,652 Profoula Page 1 of 5 Iowa City Mixed Use Homsing Development Preforms 1. ADMINISTRATIVE EXPENSES a Advertising I Marketing $I per unit b Management Fee $ Per Unit Per Month Fee $43 % Total Revenue 300% c Legal d Audding a Bookkeeping I Accounting I On -Site Management Salary g Telephone h Other (specify) a Elevator Maintenance I Contract b Extem inating c LVAG R.,Per Sm,u.. d Other Contract Somices a Maintenance & Jandonol Su piplies I Grounds Maintenance g Snow Removal h General Reiamr Services i Paint I Damaging Materials I Maintenance & Janitorml Payroll k Other (specify) I Other (specify) 3. UTILITIES a Water b Sewer . Trush d Gas& Oil . Electricity 4. TAXES, RESERVES & ESCROWS a Insurance b RealEstateTaxes . Replacement Resort. d Miscellaneous Reserves S. OTHER EXPENSES a Security Expense b Sup,xin Sm,u.. (sp c Tax Grodd Mondonng Fees d Mortgage Insurance Premium (MIP) . Other (specify) I Other (specify) 6. TOTAL EXPENSES 1 Administrative Expenses 2 Maintenance Expenses 3 Utditics 4 Taxes, Reserves & Escrows 5 Othmi-Ex,Pers. C. Net Openinfing Income 1D,DW ab 46'7W 1 c 5,WD ld 21, 5(X0 1. 2c 6(X0 R if 2d 7DDW 1g 2. 2 5gD 1h a TocaiAdminitsmitive Expensew $ 145,2M 2a 8,(X0 21, 2c 8,(X0 2d 2. 12,500 a 5,WD 29 5,WD 2h 4DDW 21 25,DW 21 4DDW 21, 211 1 Tom/ �mtixxumce Expenses $ 143,50g 3a 31, 1DDW 3c F� ZJBWD 3d 'OGG 2 2D OWq 3a D DOO Tocai Uffifms 65,DW 4. V GO $ Par J n it $ 2,100 4b 1MT11 , 2155 $ Par J n it 400 4c 36400 $ Par J n it 4d Tocuf Taxes, Reuuerve� & Escrows $ 257,500 51, 5c 5d 5a .cify) If 17 ToMlOtherExpenses 1 145230 21 143�� 1 3 65,DW 41 257,� 5 1 5,WD TotaiOperating Expens. S 616,230 S 6,772 EveancePerUnk � Annual Income A� 1,557,652 B Operating Ex,xmses B 616�2W Net Openiting lucanne $ 9TJ� ftrMnth: $ 78,452 ftrUnft (Vr): $ 1D,345 ftrUnft (me). $ 862 Preforma Page 2 of 5 1. Supportable Mortgage Elased on Stabiliced NOI NOI Debt Coverage Ratu. 2. Mher Am orb ted Subord lasted Debt Iowa City Ifixed Use Housing Development Preforms $ 9T,4� 1 2D NO[Aveffattkicat-DebtSeerke $ 784,519 Araofiv,.fton Annual Debi Tom/ Subordinated Debt Seerke $ - 3. Total Net Operating Income Available for Debt Service less Total Subonfinated Debt $ 784,519 1. Mortgage Elasecl on Income Approach a FiritflortgageTerms fth, 450% Term 4D b Debt Senuce Factor Debt Conetant 005395 Annortimdon 4D MP. D 65% Debt Constant with MP D 06045 c Annual Fee Fee Type �xim�SuppoHabie�dgagedB�edonNOt $ 12,978,51D Perthaft $ 142,621 2. Mortgage Elasecl on Loan to Value a Cap Rat. 600% b Cappec! N 01 $ 15,690,375 c Loan to Value W% ltleximarne Supportable l4artgaged Based on LTV. $ 12,552,30D Perthuft $ 137,937 3. Mortgage Elasecl on Loan to Court a Total Development Go,,t $ �'615'wq b fia. Cournmerrial Couraftudon $ �'615'wq c 86% of HDMIM Development Foot $ �,889,493 1 ltlexhame mortgage based on LTC. $ �,889,493 Per 4. Negotiatm! Mortgage I Selected Mortgage Amount: $ 12,978,51D Per Proforma Page 3 of 5 1. AcquisitioncRefinance a ftguication Cost b Legal Fees c Existing Structures d Other 2. Site�ric Iowa City Ifixed Use Homising Development Reforms a On site Work b OfiVSde Work Icr Utilitylierrying Extension c Demolition d Garages (not included in met) a Parung (not included in rent) I Landscaping g Other 3. Constaxii a Now Building (Residential) b Now Building (Paraing) c Lead Based Paint Interim Control it ftcessiarry Bunking(s) dircl garages in art) . Other I Community Service Facility g General Requirements I Conditions h Escalation i Construction Contingency I Proliat F. k Construction Supervision I Owner Construction Contingency in i%stmeAcs i%lLatementiGointaimment n Other Less E2! Sales Tax Retail. Less Energy Robot. Less Builders Eligible Base Reductum 4. Preafessional Fees a lachitect Fees - Derag n b lachitect Fees - S ultuansum Totef/Vuleffect c Enginearl'oes it Mormarl'ousi Estate) a ftcountant Laos, I Other g Other Total Cost 30% 70% Historic Total Acquanithen/Raffiriance Total &is Worti, per unit 139�2!10 14 12,673,583 Constractran 21r Conefroustion 21759 95s' 25% Total Construction 3 mma L3O3,955 Zr Subricural She We& S. Interim Costs , Construction Interest b Construction Loan Originator Ever c Construction Loan Inspection it Taxes Duning Construction a Water, Sewer and Impact Fees I Other Hamal and Liability Insurance ,maingen 2Z 303,9� ftrU4f S245,09841 lrof�nxt 291% Totialli'mureendonalAse, 650,000 5001000 f30,000 Total Intence Costs 570,000 6. Financing Fears & Expenses; a Bond Premium b Bond Costs c Cused Report it Cost of Issuance a Permanent Loan Origination Fors I Permanent Loan Credit Enhancement g Mai F. h Letter of Credit (LOG) To. i Title and Recording I Placement Ever k Other H U D Inspection Fee (D 5D%) I Other H U D Applicator Ever M 30%) Total Financing Fees & Expenses Proforma Page 4 of 5 1 ) 2) 3) 4) 5) 6) 1D) Iowa City Ifixed Use Housing Development Preforms 7. Soft Comm . Property Appraisal b Marad Study c Environmental Relion d Survey a RentTl I, Mmiuding I Tax Gradd Application Fees g Tax Gradd Complonce Fee h Tax Gradd Reservation Fee i WN Fee I Cost CedificationfAccounting Fees k Permanent Relocation Exiiiinses, I Tomixuarry Relocation Exiiiinses in Furnishings and Equipment • Capital Nords Assessment Relport • Legal Fees I, Other q Other Totai Soft Cours 9. Syndication Costs a Bridge Loan Fees and Expenses First Mortgage, Lose 4D 515% b Organizational (Partnership) 142,621 Owner Equity , Tax Opinion $ 3,85D," 42,3W Gap it Other $ 9,787,179 1D7,551 TomelSyndicadon Fees 9. Developers Fees a DeveliagerFee %of T� 5 97%1 1,W0,000 1 b Develiager Overfeed , Consultant Fee I it Other I TotiulDevelopers, Fe. 1,�0,000 to. Project Reserves a Wo�ing�pitaiRe�we(4%ofHUDmo�gagelmi 519,140 b Operating Deficit Reserve (6 months mdebt sernce�)rxaumad by HUD) "add , Escrows it Other Tom/ Peci lihamine, I rToWD,vidic, —�-ent Cose; $ �,615,wq Permart: $ M480 Perwi $ C. Total Basis for Tax Credits 30% 70% Historic rTo aii Been; ft, —rT,- Crefits $ Tow $ - $ mermuft: $ parmat: S - $ S persqft: $ Pereira: S - $ S D. Total Mortgageable Comm Total Development Costs $ �,615,wq less Pral Reserves W5,121 $ 25,71D,569 A. Souri of Funding 1. Negotiated Mortgage Amount: $ 12,978,51D Name of Source Type Aneafixation RAW Amount PerUmt Notes First Mortgage, Lose 4D 515% $ 12,978,51D 142,621 Owner Equity $ 3,85D," 42,3W Gap $ 9,787,179 1D7,551 Gap: acisitive I gregative) $ $ 292 40D Parforana Page 5 of 5 IC Office Sources and Uses 071514 Uses Total PGSF Land Costs - Architectural & Engineering Costs 300,000 1287 Construction Costs 7,991,692 34295 Financing Costs 343,475 1474 Other Costs 673,161 2889 Total Uses 9,308,328 39945 Sources Developer Equity 1,400000 6008 Loan 3,752:841 16105 Gap 4,155,4871 17832 Total Uses 9,308,328 39945 Gap - lAssumptions I Gross SF 23,303 Iowa City Office July 15, 2014 Cost Budget A & E Fees Reimbursables $ 270000 $ 30000 Financing Costs Alta Survey City Review Costs $ 5,000 Appraise Fees Years Rate Avg Bal. $ 4,000 Carrying Costs 0.75 4.50% 60% $ 209,588 Closing Fees 0% $ $ 500 P&L insurance Project Management Fee $ 3,500 Construction Insurance 23,302 $ 10,000 Environmental Phase 1 $ $ 2,500 Inspecting Architect 23,302 $ $ 3,000 Lender Legal Sign $ 10,000 Lender Site Inspection Loan Amount $ 2,500 Loan Origination Fees (Construction) 0.50% $ 10,350,000 $ 51,750 Loan Origination Fees (Perm) $ 10,350,000 $ - MRT Construction 0.240% $ 10,350,000 $ 24,840 MRT Permanent $ 10,350,000 $ - Guaranty Fee 0.50 $ $ - Tax contract & Flood Certificate $ 2,000 Title Insurance $ 10,350,000 $ 8,798 Title Disbursing Fees - $ 3,000 Recording Fees of Deed & Loan Doc's $ $ 2500 1 Units 0 $ 343,47511 FLa.d Cost. - Land Acquistion $ 1 $ Development Costs City Review Costs $ 5000 Escrow & Legal Costs Resale $ - Acquisition Fee 0% $ - $ - Project Management Fee Shell Constrcutiion Cost 23,302 LegalFees 112.12 $ 75,000 Leasing Commissions 23,302 $ 5.00 $ 116,510 Sign 4,418:187 $ 10,000 Park Dedication Fees 25.00 $ - SAC Fees* Units 0 $ Storm Water Mgmt Fees $ - Space Planning Fees 23,302 $ 0.50 $ 11,651 Soil Borings $ 5,000 Traffic Study $ - Trunk Dedication Fees $ WAC Fees* Units 0 Watershed Fees $ - $ 223,161 on Costs Construction Surveying Construction Testing Shell Constrcutiion Cost 23,302 $ 112.12 $ 21612531 Parking/Storage Constrcution Cost 23,303 $ 189.60 $ 4,418:187 Office TI's 23,303 $ 25.00 $ 582,575 CM Fee 23,303 $ 6.44 $ 150,000 Construction Contingency 3% $ 7,613,293 $ 228,39878 Fevelcipers Fee $ 45000000 Sale Of Tax Credit 11 ITotals $ 9,308,328 �1�14FIL 6T N7119�4 11 IM"m m Ell IN M on C) V) M X u 0 u I)o CD M X u 0 u I)o CD iaajis iinoD ispi jjo-doi(] ojnV I 0 1 �D M X u 0 u 1)0 CD 0 0. E - I L Ll Milo I 0 1 �D M X u 0 u 1)0 CD iaajis iinoD ispi 0 1 V) M X u 0 u (Do CD 0 m 0 0 o o 0 25 2 0 00 u -6 0 Immimommommi z CD NEI NEI NMI =IEEE so olso MINEEI on NEI Immimommommi z CD ,OS L Ll I I I I I I I I Ll -di CY, CY 01 CY CY CY CY CY cyo CY CY CY CY 0 0 N cy, CY N CY cy� N cy- CY v CY, N CY N 'o N 0 N LEO CY cy— N 0 N 0 N OS L iz z 0 0 u W z 0 u V) M u 0 u (Do CD 0 0 N 0 LEO N N OS L iz z 0 0 u W z 0 u V) M u 0 u (Do CD M X u 0 u I)o CD o o oo o 0 7 No� T T M X u 0 u I)o CD Ln M I X u 0 z 6 1 86 20 0 u (Do t CD CD 0 0 V) M X u 0 u (Do CD 0 0 V) M X u 0 u (Do m I , a t mm" Aw 'A WWA, a 0 IRW IWO ff m N ff 0 B I�w 9 I �T 2 AT I CD S V) M X u 0 u (Do CD 0 V) M X u 0 u (Do I. U N z 0 V) M X u 0 u (Do CD k LU H C) i Ar I-A-F7-Arl AW Adw V" vw r-AMF ,or AW AW 7 AW AIW V AV /a F / LOW AmP-L E E V) M X u 0 ,n ad n ad , ad , ad m N 0 I)o Ln ad Td m z m < F 0 N 0 N -7d v 0 N CD N N N N N E 0 P- I 0 0 0 0 0 0 1 0 0 N M 0 0 0 0 0 0 0 0 0 0 0 N I N M N m 1 0 1 N m m m m 0 0 0 0 N— 0 m 0 0 N 0 0 0 0 0 1 OL N m N MM- E E V) M X u 0 ,n ad n ad , ad , ad m N 0 I)o Ln ad Td m z m < F 0 N 0 N -7d v 0 N CD 12 Energy Efficiency Sherman Associates has engaged The Weidt Group as energy consultant for the project. The Weidt Group will complete energy design and energy modeling services. Sherman Associates and The Weidt Group have participated successfully on numerous projects together. As the long term owner and operator of this development, Sherman Associates is interested in creating an energy efficient building. We will explore implementing items such as solar and utility monitoring systems. We will explore pursuing LEED certification. As project design and development move forward, the energy efficiency scope will be refined. Sherman Associates is committed to developing an efficient building. 13 CONFIDENTIAL 5 YEAR LITIGATION SUMMARY AS OF JULY, 2014, FOR SHERMAN ASSOCIATES, INC. AND AFFILIATES INVOLVING CLAIMS OF $50,000 OR MORE Active Matters 1. Northeast Quadrant LLC ("Northeast Quadrant'), an affiliate of Sherman Associates, Inc. (the "Company'), has been sued by the Essex on the Park Owner's Association (the "Essex Association") in Minnesota State Court, Second Judicial District, Ramsey County, for alleged construction defects in the Essex condominium project. Specifically, the complaint alleges "systemic defects in the design and construction of the Project that result in excessive sloping of the floors." The defendants (Northeast Quadrant LLC; the general contractor, Kraus Anderson-, a material subcontractor, Structural Components Systems, Inc.; and the rough carpenter for the project, J. Eiden Construction) sought to have the claims dismissed by summary judgment on the grounds that the claims are time- barred by the applicable statutes of limitations and repose. The judge denied the summary judgment motions, holding that there are material issues of fact pertaining to the statute of repose and statute of limitations that a jury will need to decide at trial. The trial block for this case has been set for July 7 through July 25, 2014. Northeast Quadrant and Essex Association are negotiating a settlement. 2. The Company and its affiliate, Water Street Brownstones LLC ("Water Street"), the developer of the Water Street Brownstone Condominium project in Des Moines, Iowa, have been threatened with a lawsuit by the Homeowners Association of the Water Street Brownstone Condominiums (the "Water Street Association") alleging liability for water infiltration issues. The Company and Water Street have put the general contractor (Hansen Company) and the architect (Elness Swenson Graham) on notice of the claims and in the case of the general contractor, that it tender the defense to its insurer, and that both the general contractor and the architect defend and indemnify the Company and Water Street to the extent a lawsuit is commenced. The Company and Water Street are currently working with the Water Street Association to further investigate the issue. 3. The Company, Lyons Court LLC, Sibley Court Apartments LLC, Sibley Park Apartments, LLC, Vine Street Lofts LLC and Sherman Associates Development LLC (die "LLCs"); and Lyons Court Limited Partnership, Sibley Court Limited Partnership, Sibley Park Limited Partnership and Vine Street Limited Partnership (die "LPs") and George E. Sherman ("Sherman") are defendants in a matter styled The Lander Group, Inc. v. Sherman Associates, Inc., et al., Hennepin County Court File No. 27 -CV -13-19388. In that case, the Plaintiff seeks ajudgment in the principal amount of $445,371.00, legal and equitable relief under Minn. Stat. § 322B against the LLCs; and legal and equitable relief under Minn. Stat. § 321 against the LPs. The Plaintiff filed an Amended Compliant and the Company, LLCs, LPs and Sherman have filed Joint and Separate Answers and Counterclaims. Plaintiff moved for partial summary judgment on its declaratory judgment claim. Plaintiff seeks a judgment declaring that Sherman Associates, Inc. is solely responsible for paying for any operating deficits of the LLCs and LPs. The Court took the motion for partial summary judgment under advisement. 4. The Villas at Little Canada Owners' Association (the "Villas Association") filed suit against Craftsman Construction Incorporated ("Craftsman") and The Villas at Little Canada, LLC ("VLC"), each an affiliate of the Company. This construction defect litigation involves a thirteen (13) multi -unit townhome development known as the Villas of Little Canada, located in the Little Canada, Minnesota (die "Villas"). Craftsman served as the general contractor and VLC served as the developer for construction of the Villas. The Villas Association filed suit asserting that systemic defects and/or omissions in the materials and/or design and/or installation and/or construction of the common elements and units, including but not limited to retaining walls, drainage, hardscape, asphalt steps, siding, deck supports, and roofing exist at the Villas. The matter is being defended by the insurer for Craftsman and VLC which has filed an equitable diird-party complaint against various subcontractors. Discovery and investigation is in the preliminary stages, and Trial is set for November 17, 2014. 5. SA Russell Lamson Limited Partnership, an affiliate of the Company, is the subject of an investigation being conducted by certain Federal and State government agencies related to the recording in Black Hawk County, Iowa of a Land Use Restrictive Agreement. The investigation is still pending and employees of the company have participated in voluntary interviews with the agencies conducting the investigation. Also, the company has produced documents as requested by the agencies conducting the investigation. The U.S. Government conducted a search of Sherman Associates' Minneapolis office on May 6, 2014 pursuant to a search warrant dated May 6, 2014. 6. The Company and its affiliates are parties to property tax challenges on an annual basis. 7. The Company and its affiliates are also involved in unlawful detainer actions on a regular basis for residential and commercial tenants. Concluded Matters The following matters are included because they have occurred within the last five years but are resolved I . The Company, and its affiliates, Chicago Lofts, LLC ("Chicago') and SA Midtown Exchange Apartments Limited Partnership ("Midtown Limited Partnership") filed a lawsuit against Ryan Companies US, Inc. ('Ryan") on March 13, 2012, to seek recovery of damages in connection with certain operating budgets provided by Ryan for the Midtown Exchange Project located in Minneapolis, Minnesota. The suit alleged that after development was complete, Ryan provided operating budgets that were substantially higher than those delivered during acquisition and development of the Projects. Midtown Limited Partnership was notified of a potential action against it in arbitration by the Owner's Committee for the Midtown Exchange Project in November 2012. The claim is for common area costs in excess of $100,000 allegedly owed by Midtown Limited Partnership. The parties have settled both disputes above. 2. Capital Heights City Home Owners' Association (the "CH Association") commenced a lawsuit against the Company, Craftsman and Capital City Homes LLC, a affiliate of the Company ("CCII") asserting claims of breach of statutory warranties, breach of express and implied warranties, and negligent construction. This construction defect case involves a development known as Capital Heights located in St. Paul, Minnesota. This Project contains seven buildings where six buildings contain pitched roofs with asphalt shingles and one building contains a flat roof with an EPDM membrane. CHC was the developer for the project and Craftsman served as the general contractor. Craftsman contracted with various subcontractors to supply materials and/or labor for the construction of the project. The primary claim surrounds the construction of the flat roof of the one building at the project, though there are other claims relating to the exterior siding, trim around windows and garage doors, and retaining walls. Craftsman commenced a third -party action against pertinent subcontractors pursuant to the CH Association's construction defect claims. The matter was being defended by the Defendants' insurer and it has settled. 3. The Company and its affiliate, River Point West LLC (­RPW LLC"), were named as defendants in a lawsuit by Hubbell Terminal Corporation ("Hubbell"). The lawsuit claimed that the RPW LLC breached its obligations under a purchase agreement. The parties settled the matter and RPW LLC paid Hubbell $690,000.00 over three (3) payments. 4. Midtown Lofts LLC ("Midtown"), an affiliate of the Company, filed an Amended Demand for Arbitration dated January 12, 2011, in connection with the failure of sprinkler pipes and a domestic water line at the Midtown Lofts Project, Minneapolis, Minnesota. Midtown alleged that Kraus -Anderson Construction Co. and its subcontractors ("KA-) negligently designed and constructed the Project. KA counterclaimed that Midtown and other Company affiliates, Printers Row LLC, 9b Street Lofts LLC, Sibley Court Limited Partnership and Sibley Park Limited Partnership withheld payments due to KA under contracts relating to projects owned by such affiliates because of the alleged defects at the Project. The matters settled and Midtown received a payment of$390,000. The Company and the affiliates agreed to make a payment of $100,000 in equal installments of $10,000 commencing December 1, 2011 and continuing on the I' day of each month until paid. 5. The Company was named as a defendant in a lawsuit by Hannon Security Services, Inc. ("Hannon"). The lawsuit claimed that the Company breached its obligations under a contract relating to security services relating to payment of $86,902.85. The parties entered into a Settlement Agreement pursuant to which the Company paid Hannon $75,050.38 over three (3) payments. 6. Wisconsin Security Police ("WSP") sought a breach of contract claim in Milwaukee County circuit court against Highland Park Apartments LLC ("Highland"), SA Boulevard Apartments LLC ("Boulevard"), and the Company arising out of the failure to pay for security services WSP provided from April 2009 through September 2009. The parties entered into a Settlement Agreement in September of 2011 pursuant to which the Company agreed to pay $125,000 in fall satisfaction of any and all claims. 7. Bottineau Commons LLC ("Bottineau"), Craftsman and the Company were named as defendants in a lawsuit brought by the Bottineau Townhomes Owners' Association (the "Bottineau Association") relating to alleged construction defects at certain units in the Bottineau Townhomes project. Craftsman and the Company have been improperly named in the action and the action was not filed. The parties inspected the units and conducted necessary repairs and this matter is resolved. 8. River Point West LLC, an affiliate of the Company, was a defendant in a matter styled Metro Demolition, Inc. vs. River Point West LLC, in Court File No. CE 71577, Polk County, IA, and brought an arbitration proceeding against Metro Demolition, Inc., AAA No. 65-110-00109-12. The parties entered into a Settlement Agreement, in which the Company agreed to pay $50,000.00 on or before November 1, 2012, and the remaining principal balance of $119287.11 in 24 equal monthly payments of principal and interest in the amount of $5,180.03. The Company is current on its payments and the Settlement Agreement settled the claims in the state court action and the arbitration. 9. The Company was a defendant in a matter styled as Kaambo Market, LLC (the "Tenant'), Plaintiff vs. Sherman Associates, Inc., Defendant and Sherman Associates, Inc., Third -Party Plaintiff vs. Abdirashid Jama and Emad Y. Abed (the "Lease Guarantors'), Court File No. 27 -CV -09-21373. The nature of the litigation was a lease dispute. Tenant sued to enforce a five-year renewal option and alleged it was entitled to damages in an amount in excess of $50,000.00. Tenant sought to amend its Complaint to assert a claim for rescission and restitution of all funds it invested in the leased premises, which it claimed exceeded $ 1,000,000.00. The Company sought to evict Tenant and obtain judgments against Tenant and Lease Guarantors for certain amounts due and owing under the Lease. The trial court granted the Company summary judgment on all of the Tenant's claims and summary judgment on the Company's claims against the Tenant and Lease Guarantors. On June 27, 2011, the Court of Appeals, in Appellate Court File No. A10-1810, affirmed the trial court's decision. 10. Grande Market Square, LLC, an affiliate of the Company, was a defendant in in a matter commenced in Dakota County, Minnesota by RREF SSI Acquisitions, LLC. The parties entered into a Confidential Settlement Agreement in May 2012. 14 15 unduque Ramurgw, capabduflVez M AwMo Many of the development team's experience and competencies have been discussed throughout this proposal. Below are a few of the unique capabilities, resources, and assets Sherman Associates will bring to this project: Unique Aspects of Our Team: • Successful track record of creating public/private partnerships to revitalize high priority neighborhoods. • Substantial mixed-use development experience. • In-house Construction Management team (Craftsman Construction) to oversee project planning and the entire construction process; including hiring of a General Contractor and Subcontractors. • The project energy consultant served as Project Manager for the Iowa Utilities Board/Office of Consumer Affairs Office Building, which was named a 2012 AIA COTE Top Ten project. • A member of Sherman Associates' Project Management team was part of a group that won the National Developer of the Year award from NAIOP. Select Awards 2012 Best in Real Estate: Multifamily Development or Redevelopment — Riverside Plaza Minneapolis/St. Paul Business Journal 2011 Capstone Award: Multifamily — Grand Boulevard Lofts Kansas City Business Journal 2011 Lifetime Achievement Award — George Sherman Minneapolis/St. Paul Business Journal 2010 Property Excellence Award: Affordable Housing 101+ Units — Midtown Exchange Minnesota Multi Housing Association 2009 Best of the Decade — Midtown Exchange Minneapolis/St. Paul Business Journal 2008 Development of the Year — Syndicate Trust City of St. Louis 2008 Top Projects — Zenith Condominiums / aloft Hotel Finance & Commerce 2007 Best Historic Rehabilitation & Readers Choice Award — Midtown Exchange & Chicago Lofts Affordable Housing Finance Magazine 2006 Project of the Year: Adaptive Reuse — Midtown Exchange Apartments & Chicago Lofts Multifamily Executive Awards 2005 Best Smart Growth Community Up to 150 Units — Waterstreet Brownstones Professional Builder Magazine