1. MarketFront Financing PDA Council Meeting February 26, 2015 MarketFront Financing

2. City Funding - $34 million PDA Equity - $3 million WSDOT - $6 million Housing Grants - $9.2 million Philanthropy - $2.1 Committed, $3.9 million remaining* State Grants - $2-2.5 million* NMTC - $4 million* PDA Debt - $8.5 - $18.9 million (short and long term) (See MarketFront Project Flow of Funds Chart) *indicates funding not yet secured MarketFront Financing Funding Sources

3. PDA Debt History from 1999 – 2015 and projections through 2022 ( see PDA Debt History and Financing Capacity Chart) MarketFront Financing PDA Debt History

4. 1 st & Pine Loan and Bond – To be refinanced – current interest rate of 5.4% and 5.12% – Projected interest rate for refinancing below 4% Garage Bond – $2.2 million callable now and note due to City of $680,692 to be paid from bond reserves of $441,166 and $2,299,526 from the CRRF. Remaining CRRF Balance after payment - $8,418,769 Series 2009 Bond – Current annual debt service of $472k – paid off in 2021 MarketFront Financing PDA Debt – Refinancing and Retirement

5. Current interest rate levels – Still historically low below 4% Options for debt – Direct Placement - variable loan (fixed for 7), lower initial interest rate – Public Offering - Bond (fixed for 20), higher interest rate MarketFront Financing Current Financing Market Analysis

6. Amortization:20Years Expected Term:7Years Projected Rate:0.17%1.83%3.03% Current10-Year Avg20-Year Avg. Base (67% 30-Day LIBOR)0.11%1.23%2.03% Projected Credit Spread1.50% 1.61%2.73%3.53% Annual Debt Service: $18,000,000$1,179,379$1,269,721 $22,000,000$1,441,463$1,551,881 Pros: 1)Fastest transaction completion timeframe 2)Least transaction costs 3)Greatest extraordinary redemption flexibility Cons: 1)Loan maturity expected to be less than full desired amortization term 2)Interest rate expected to be variable MarketFront Financing Financing Scenario – Direct Placement

7. Amortization:20Years Expected Term:20Years Projected Rate:Rating A-Baa-1 3.55%3.74% Annual Debt Service: $18,000,000$1,265,750$1,287,500 $22,000,000$1,545,500$1,575,250 Pros: 1)Rate is fixed for full term 2)Full desired term Cons: 1)Decreased extraordinary redemption flexibility 2)Greater transaction completion timeframe 3)Increased transaction costs MarketFront Financing Financing Scenario – Public Offering

8. Assumptions – Current Garage Bond Paid off in 2015 – 1 st & Pine Loan and Bond refinanced Maximum capacity - $24 million – additional $500k approx. per year in debt service Medium – $22 million – does not include project alternates or TI Funds Low – $18 million – does not include above plus PDA carry on NMTC and portion of Philanthropy MarketFront Financing PDA Debt Capacity

9. Summary of Expense and Revenue – from 2005-2021 Modeled with $18, $20, $22 and $24 million in debt/refinancing (See Financing Option – All PDA Charts) MarketFront Financing Market Pro-Forma with MarketFront

10. Total Project Cost - $73,205,983 Alternates - $1,192,923 million TI Funds - $1.3 million Contingencies – Construction Contingency - $4.5 million (10%) – Owner Contingency - $3.9 million (8.5%) Base Project without TI funds and Alternates - $71,763,250 (See MarketFront Total Budget Summary Chart) MarketFront Financing Project Cost

11. MarketFront Financing Project Debt and Long Term Risk – Best Case Best Case (Base project cost of $71,763,250) City of Seattle$34,000,000 WSDOT$6,000,000 PDA Equity$3,000,000 Housing Grant$9,200,000 PDA Philanthropy$6,000,000 New Market Tax Credit$4,000,000 State and Other Grants$2,000,000 Subtotal $64,200,000 Long Term Debt $7,563,250

12. MarketFront Financing Project Debt and Long Term Risk – Mid-Range Mid-Range - assume no future philanthropy or grants (Base project cost of $71,763,250) City of Seattle$34,000,000 WSDOT$6,000,000 PDA Equity$3,000,000 Housing Grant$9,200,000 PDA Philanthropy$2,000,000 New Market Tax Credit$4,000,000 State and Other Grants$0 Subtotal $58,200,000 Long Term Debt $13,563,250

13. MarketFront Financing Project Debt and Long Term Risk – Worst Case Worst Case - assume no future philanthropy, tax credit, or grants City of Seattle$34,000,000 WSDOT$6,000,000 PDA Equity$3,000,000 Housing Grant$9,200,000 PDA Philanthropy$2,000,000 New Market Tax Credit$0 State and Other Grants$0 Subtotal $54,200,000 Long Term Debt $17,563,250

14. Cooling Tower Relocation - $840,000 – (Upon notice from City of commencement of Overlook Walk) South Walkway - $540,000 – (Part of future Heritage House Remodel – and informed by Overlook Walk) Retail space fronting Overlook Walk - $200,000 – (Dependent on Overlook Walk) Vertical Green-scape infill on west face of garage - $350,000 – (dependent on Overlook Walk) Shared responsibility for driveway connecting to new Alaskan Way - $400,000 Signage Plan Integrated with existing Market Signage - $200,000 Total Future Related Costs - $2,530,000 ($1,930,000 dependent on Overlook Walk) MarketFront Financing Future Related Costs

15. Variable Loan vs. Long Term Bond – Recommendation - Pursue fixed rate long term Bond over variable rate loan Will take additional time to finalize. Potential short-term savings with variable loan not significant enough to outweigh value of long term predictability. Total Amount of Debt Required – Recommendation - Total debt including refinancing of 1 st & Pine Loan/Bond not to exceed $24 million Exercise all prudent project cost control efforts. Base project cost not including TI funds and Alternates in favor of robust contingency during early work. Secure corresponding debt required to bridge funding gap with early call options for Philanthropy, Grants, and NMTC projected funding amounts and timing. MarketFront Financing Key Decisions and Recommendations