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developed, but they anticipate it to include between 162 and 182 rooms. Caribou <br />estimates the project costs at approximately $38 million. Caribou indicated that the initial <br />$10 to $13 million will be self- financed in order to perform the asbestos abatement, mold <br />abatement and seismic retrofitting. Prospective lenders for the construction loan are <br />Farmers and Merchant Bank or US Bank. <br />Caribou is currently in negotiations to obtain a tenant for the proposed One Broadway <br />Plaza project. Caribou indicated that there is the possibility that this tenant will be <br />interested in pre - leasing a majority of the proposed hotel rooms. If this occurs, Caribou <br />may develop a first class hotel — along the lines of the W Hotel brand. Caribou anticipates <br />that the average daily rate (ADR) of this type of first class hotel would be approximately <br />$170 - $240. If the tenant for the proposed One Broadway Plaza project is not secured, or <br />is not interested in pre - leasing the proposed hotel, Caribou anticipates that it will develop <br />the project as a more budget - friendly hotel. Caribou projects the ADR of this type of hotel <br />to be in the range of approximately $85. Caribou anticipates that the target market of this <br />type of hotel would be visitors to the courthouse and Civic Center. <br />Based on Caribou's proposal, it is expected the project will be completed 60 months after <br />the execution of the Disposition and Development Agreement (DDA). Caribou proposes to <br />purchase the Site from the City for $1 million, with the payment due at the earlier of the <br />issuance of a certificate of occupancy for the project or 60 months following DDA <br />execution. Caribou would prefer to purchase the site outright, but might be amenable into <br />entering a long -term ground lease. <br />At the interview, Caribou indicated that if the seismic retrofit and all of the exterior and <br />interior construction of the YMCA building is not reasonably complete within the identified <br />timeframe, the YMCA building will be returned to the City. In addition, if the construction <br />lender provides approval, Caribou stated that the City will be allowed to keep the $1 million <br />purchase price as liquidated damages. <br />Caribou acknowledges that without the development of the One Broadway Plaza project, <br />and the attraction of a tenant that wishes to prelease a significant number of first class <br />hotel rooms, it is unlikely that a hotel concept can be supported in the vicinity. As such, a <br />hotel project is speculative in nature, and there is significant risk that the project may not <br />be able to obtain financing needed for renovations. Furthermore, the site would be <br />encumbered over a lengthy five -year timeline, at the end of which the renovation may not <br />have been completed. <br />Page 2 of 4 <br />25J -6 <br />