The City of Irving and Ark Group of Irving, Inc.

Partnership
Goal No. 3: Economic Development
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Overview
Ark Group of Irving, Inc. Benefits Risk Proposal Performance Incentives Return on Investment (ROI) Timeline Recommendation/Discussion

Ark Group of Irving, Inc.

Amphitheater Performance hall Four limited food service/ entertainment venues Nine full-service restaurants 5,000 sq. ft. retail Pedestrian walkway Three live music stages Open air plaza 1,200-space parking garage

Development Budget
Size sq. ft. Live Music Venues 3,000 Capacity Indoor Venue 7,000 Capacity Outdoor Amphitheatre Indoor Venues & Lounges Restaurants, Bowling, Comedy Club Misc. Parking Deck Plazas and Plaza Stages Contingency 50,000 120,000 40,000 114,000 $18,500,000 $60,750,00 $48,925,000 $24,000,000 $10,000,000 $14,925,000 $164,175,000 Estimated Cost $36,000,000

100,000 Total Cost Including Contingency

Benefits
Debt to be based on Brimer HOT tax Developer fronts project financing City owned entertainment center Private funding 48.8% Public financial participation 51.2%

Benefits
Performance payments from project generated revenues 1,550 jobs at the Entertainment Center 400-500 construction jobs Lawsuit settled Catalyst for Urban Center Private financing to be used

Risk
$96.045 M less risk City participation identified Citys risk not dependent on success (managed risk) Settle lawsuit at no increased cost to city Structure less than $128 M previously recommended option

Risk Analysis Proposal

Funding Source General Fund Brimer and Project Debt (Includes: Brimer 2 percent HOT, Brimer Parking Tax, Brimer Ticket Tax, State HOT, Sales Tax, City Sales Tax, Mixed Beverage Tax) Existing Brimer Debt Land Debt TIF Garage TIF Infrastructure Additional Brimer Debt LCG Original Increase/ (Decrease) Current Recommended Increase/ (Decrease)

$180,450,000 $23,500,000 $2,569,875 $23,500,000 $2,569,875 $24,000,000 $20,000,000

($180,450,000) $23,500,000 $2,569,875 $24,000,000 $20,000,000 $24,000,000 $20,000,000 $40,000,000

($180,450,000)

$24,000,000 $20,000,000 $40,000,000

City at Risk Tax Rate at Risk

$206,519,875 8.5 cents

$70,069,875 -0- cents

($136,450,000) (8.5 cents)

$110,069,875 -0- cents

($96,450,000) (8.5 cents)

City of Irving Contribution

Project performance revenue City sales tax City mixed beverage tax State sales tax Brimer HOT tax TIF District No. 1

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$84M + $80.175M = $164.175M

Proposal
Public Funding TIF Parking Facility TIF Infrastructure Additional Brimer Debt TOTAL % Public Funding Private Funding Developer Participation % Private Funding Estimated Performance Payments City Sales Tax City Mixed Beverage Tax State Sales Tax* Ticket Tax Parking Tax TOTAL Revenue to City Annual Rent *Special consideration from Texas Legislature $1 $14,544,000 $2,645,000 $19,182,000 Unknown Unknown $36,371,000 $24,000,000 $20,000,000 $40,000,000 $84,000,000 51.2%

$80,175,000 48.8%

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Financing Proposal/Comparison
Convention Center Initial Funding Division Public $145 M (100%) Private 0 M (0%) Performance Payments City Property Tax City Sales Tax City Mixed Beverage Tax State Sales Tax State HOT City HOT Ticket Tax* -0Parking Tax* -0TOTAL Revenue to City Annual Rent *Cannot reliably estimate revenue due to lack of history Convention Center Hotel Ark $9 M (10%) $84 M (51.2%) 81 M (90%) 80 M (48.8%) $2,304,422 1,425,800 200,067 3,962,625 10,613,520 19,952,750 -0-0$38,459,184 -0$14,544,000 $2,645,000 $19,182,000 -0-0Unknown Unknown $36,371,000 $1

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Ark Group of Irving, Inc. Comparison

External Comparisons Descriptions Funding Structure Performance Incentives Revenues Comments

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Return On Investment
Risk-Related ROI
Less risk: $96,045,000 less than LCG proposal City participation identified upfront (less risk) City cost not dependent on success of venue (managed risk) Lawsuit settlement without increase in city cost Project cost decreased from $250 million to $164 million Citys funding contribution decreased from 68% to 51%

Economic ROI
1,550 permanent jobs 500 construction jobs Increase in Urban Center valuation Boost HOT revenue Enhanced capacity for large scale events Increased visitors to Urban Center Spurs Northshore and Waterstreet developments Creates activities for Convention Center and Convention Center Hotel visitors

Strategic ROI
Supports Strategic Goal 1 and Goal 3 Synergy with Convention Center and Convention Center Hotel

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Time Line Target Dates

Milestone
Lease Agreement Construction Loan Financing Term Sheet and Equity Commitment Letter City Bond Sale

Target Date
December 31, 2013 December 31, 2013

March 1, 2014*
Estimated date to sale bonds; date contingent on Ark Group of Irving, Inc. financial commitment letter

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Recommendation
Recommend Approval of Resolution

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Discussion/Questions

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