1. Proposed Hotel and Convention Center City Council Meeting December 10, 2013

2. Agenda 2  Purpose  Project Overview  Convention Center Financing  Convention Center Feasibility and Timeline  Development Agreements  Next Steps

3. Purpose of Convention Center 3  Encourage the convention and tourism industry, resulting in positive economic impact to Denton retail, restaurant, and hotel businesses  Expand the tax base through construction of new retail and restaurants  Provide a facility in Denton to serve citizens, businesses, educational institutions, and organizations

4. Project Overview 4  Collaboration Between:  City of Denton  O’Reilly Hospitality Management (OHM) (Developer & Operator)  O’Reilly Hotel Partners Denton (OHPD) (Financier)  University of North Texas (UNT)  Site - 13.5 Acres Located on UNT Property  Embassy Suites Hotel and Houlihan’s Restaurant (OHPD Funded)  Convention Center (City Funded)  Total Project Cost - $85 Million  Convention Center - $25 Million  Hotel & Restaurant - $60 Million

5. Project Overview – Hotel/Restaurant 5  OHPD to Lease Land from UNT  Funded and Owned by OHPD  OHM to Manage Construction and Operations  Embassy Suites with Latest Design Concepts  Planned 318 Suites  LEED Certified  Houlihan’s – 8,000 sq/ft with 290 Seats  Educational Opportunity Through the UNT School of Hospitality

6. Project Overview – Convention Center 6  City to Lease Land from UNT  City to Fund and Own Convention Center  City is not Funding the Hotel  OHM to Serve as Architect and Construction Manager  Sub-Lease Convention Center to OHPD  Operated and Managed by OHM  Size is Currently Proposed at Approx. 100,000 sq. ft.  Grand Ballroom  Approximate 2,000 Person Capacity for Banquet Style Events

7. Project Overview- Site Plan 7

8. Convention Center Financing 8  Goal is to be Self Supporting  City to Sell Certificate of Obligations to Fund Conv. Center  Debt Supported from Project Revenue Including OHM Rent  Creation of a Tax Increment Finance District (TIRZ).  Helps Ensure Project is Developed  Located on UNT Property that is Currently Tax Exempt  Leasehold Interest in Hotel will be Taxable  Opportunity for Participation by DISD and County

9. Convention Center Financing 9  Debt Service Funded by:  Hotel Occupancy Taxes (HOT) Related to the Development of the Project  This Includes HOT Revenue from Convention Center Hotel and up to $100K in Other HOT Revenue  TIRZ Revenue (Ad Valorem Taxes from Increased Value)  City Sales Taxes – Derived from Project  OHPD Lease Payment to City  Equal to the Net Balance of Total Project Revenue and the Amount Needed to Satisfy the City’s Annual Debt Payment  Begins in Year Three of Operations

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11. Development Agreements 11  Master Development Agreement  City-UNT Land Lease  City-OHPD Convention Center Sublease  UNT-OHPD Land Lease  Professional Service Agreement – Construction Management  Professional Service Agreement - Design  Non-Disturbance and Attornment Agreement

12. Next Steps 12  Approval of Development Agreements  Begin Initial Design  Initiate Creation of the TIRZ  Determine Level of Participation from Other Governmental Entities  Solicit Construction Proposals  Receive Franchise/Hotel Funding Commitment from OHPD  Finalize Project Budget  Confirm Feasibility  Close on Financing  OHPD Financing for Hotel  City to Issue Bonds  Finalize Design  Begin Construction