HomeMy WebLinkAbout079lL
PueasANT HrrReoR
Jefferson County Co.-uoiry Development
Attention: David Wayne Johnson
drri ohnson@co j efferson.wa.us
621 Sheridan
Port Townsend, Washington 98368
trGtr[VE
sEP r 4 2015
JTTIERSON COUIiTY
0 ,IiMIINITY DEVFI .OPMFNTEA Engineering, Science & Technology Inc.
Attention: Richard Schipan. i, Kristy Hollinger
rschipanski@zeaest.com t
khollineer@,iaeast.com ,
22OO - 66 Avenue, Suiteill
Seattle, Washington, lEt{
September 8, 2015
Dear Representatives
The enclosed package represents extensive research by consultants Wright-Johnson, LLC; Hospitality Advisors
Group, Mr. Zachery Zoul, CHA; and others for an SEIS requirement by Jefferson County of an Actual Business
Plan as well as a Market and Economic Analysis which enabled a response to the Fiscal Comments.
The Binding Site Plan (BSP) allowed the developer to "prove the market" and provide a list of local consultants and
subcontractors which included a significant labor component to develop Sub-Phase I of a destination resort in rural
Jefferson County, to be named Pleasant Harbor Resort.
The readers of these reports are requested to understand the approved FEIS application and the BOCC requirements
imposed on a developer including hiring local people to help support the local economy. Further, by providing staff
housing, food and education for the purpose of staff advancements at stabilization.
Although these reports are extensive and make mention to various lifestyle opportunities for staff, these reports
purposely omit amenities such as food, accommodation, and education which equate to real and tangible cost of
living benefits to local employees.
Please address comments to Jeffrey Holland, VP of Project Development and Document Control, at the address
below to facilitate the completion of the SEIS on behalf of the applicant.
Sincerely,
Jeffrey Holland
VP of Project Development and Document Control
fo r P leasant Harbor Resort
Pleasant Harbor Marina
308913 US Hwy 101
Brinnon, WA 98320
36O-796-46tL | 8OO-547 -3479
FAX 866-848-4612
A STATESMAN GROUP OF COMPANIES DEVELOPMENT
www.stotesmongroup.com
a
Pleasant Harbor
Marina & Golf Resoff
Actual Business Plan
ACTUAL BUSINESS PI-A.N
Pursuant to I CFR 52O4.6(1N4)(B) and Matter of Ho
August 2015
Sponsored by:
Fuget Sound RC, LLC
9300 E. Rainftee Drive, Suite 100
Scottsdale, Arizona 8 5260
CONTENTS PRIVATE & STRICTLY CONFIDENTIAL
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--elPr,rasaNT HARtsoR ManmvA AND Gorr Rrsonr
DISCLOSURE NOTICE
NOT AN OFFER TO PURCHASE OR SELL SECURITIES. THIS
OVERVIEW IS FOR INFORMATIONAL PURPOSES AND IS NOT AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES IN PLEASANT HARBOR FUND, LP, A TO-BE FORMED
LIMITED PARTNERSHIP (THE "LIMITED PARTNERSHIP"), AND
MAY NOT BE RELIED UPON IN CONNECTION WITH THE
PURCHASE OR SALE OF ANY SECURITY. NO SECURITY
DESCRIBED IN THIS BUSINESS PLAN HAS BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS
I.INLESS THE SECI.IRITIES ARE REGISTERED UNDER THE ACT, OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT IS AVAILABLE. INTERESTS IN THE PARTNERSHIP, IF
OFFERED, WILL ONLY BE AVAILABLE TO PARTIES WHO ARE
..ACCREDITED INVESTORS" (AS DEFINED IN RULE 50I
PROMULGATED PURSUANT TO THE SECURITIES ACT OF I933, AS
AMENDED) AND WHO ARE INTERESTED IN INVESTING IN THE
LIMITED PARTNERSHIP ON THEIR OWN BEHALF.
ANY OFFERING OR SOLICITATION WILL BE MADE ONLY TO
QUALIFIED PROSPECTIVE INVESTORS PURSUANT TO A
CONFIDENTIAL OFFEzuNG MEMORANDUM, AND THE
SUBSCRIPTION DOCUMENTS, ALL OF WHICH SHOULD BE READ
IN THEIR ENTIRETY. THE LIMITED PARTNERSHIP AND THE
GENERAL PARTNER MAY BE FORMED AT A LATER DATE BASED
UPON INVESTOR INTEREST.
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
TABLE OF CONTENTS
1.0 EXECUTTVE SUMMARY ...............1
L.l
L.2
1.3
L.4
1.5
2,L
2.2
2.3
De rrrurroru or TeRus
Mem or Holnotx
lrurnooucnoN ................
Nrw Counarncrm ErurunpRrsE ............
Joe-Cnelrr're Iruvesruet,tr Tanerr......
L
3
4
5
5
2.0 BUSTNESS OVERVTEW ................7
Pnorrcr OwNrnsxrp.
!HvEsruerur SrRUcruRE
Mnneeeuexr Trnu........
2.3.7 Developer Monogement.....
2.3.2 Regionol Center Sponsorship
2.4 Corusulrnrurs ..........
David Ho milton : Architect...
Hospitolity Advisors Group: Hospitolity lndustry Consultont (Dire* Job Verificotion)..
Wright tohnson, LLC: Economic lmpact Consultant........
7
7
2.4.1
2.4.2
2.4.3
10
10
13
L4
14
75
16
3.0 r
3.1
3.2
3.3
3.4
PnoJecr Srre
PnorEsr Derers
Susrecr Pnopenrv Anen PRortE ................
Ecottotvuc lruplcrro rsg Reetoru
4.O DEVELOPMENT AND COST CAPITATIZATON
,t7
19
40
M
45
4.L
4.2
4.3
6.1
6.2
6.3
CeprrauarroN ................
Use or Furuos...................,..,....,45
..........58EB-5 Loaru Tenus
5.0 PROJECT DEVELOPMENT T!MELINE.
6.0 FINANCIAT PERFORMANCE...........
Mmmue Vru-aee.....
Fooo SenucEs...............
MaRrNa
59
61
62
66
67
ACTUAT BUSINESS PLAN Table of Contents
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Sures
Feutv Cenren
Orrrce Rerurnl
7.O MARKETANATYSIS
7.L lruousrRvAcnvmes
7.2 TnnveuR Accorvrruoonrrorus (NAICS 72LLl
7.2.1 U.S. lndustry Overview.........
7.3 Mnnxerrue Srnnreev
6.4
5.5
6.6
68
59
70
72
72
74
74
82
99
8.1 TeReEreo Eurpr-ovuerurAnee..........
8.2 ResoRr SrlrFrNG............
8.3 JosDescnrproNs............
100
100
LO7
ACTUAT BUSINESS PLAN Table of Contents
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
I.O EXECUTIVE SUMMARY
l.l Definilion of Terms
Developer: Pleasant Harbor Marina and Golf Resort, LLP ('PHMGR" or "Developer), a
Limited Liability Company within the State of Washington, is the Job Creating Entity (see also
"JCE") that will develop, own and operate the Pleasant Harbor Marina and Golf Resort and
related business activities.
EB-5 Investor: A prospective purchaser of a Unit in the Limited Partnership; an EB-5 Investor
may also be known simply as an Investor. If an Investor purchases a Unit, such Investor shall
thereafter be referred to as a Limited Partner.
EB-5 Limited Partner: An EB-5 investor is admitted as a limited partner to the Partnership
(defined below), with certain rights, powers, and duties normally granted to limited partners
under the Uniform Limited Partnership Act, in satisfaction of the 'policy formulation' required
under EB-5 Immigrant Investment Program, USCIS policy memoranda, ffid related
Adminishative Appeals Office precedent decisions goveming the EB-5 Program. An EB-5
Limited Partner may also be known simply as a Limited Partner or an EB-SInvestor.
EB-5 Loan: The funds from the EB-5 Investors' capital contribution ($500,000) investment into
the New Commercial Enterprise (see also "NCE"), defined below, are delivered to the JCE
through a loan from the Partnership to the Developer. Therefore, the NCE creates jobs indirectly
by providing the EB-5 funds to the JCE.
General Partner: Puget Sound RC, LLC ("Regional Center), an Arizona Limited Liability
Company, will manage The Limited Partnership's business activities on behalf of the Limited
Partners.
High Unemployment Area: A geographical area that has experienced unemployment of at least
150 percent of the national average rate. See fNA $ 203(bX5XBXii).
Immigration Act: The Immigration Act at 8 USC 1153(bX5XAXiHiii), (BXiHiii), (CXiHiii)
and (D).
Job Creating Entity ("JCE"): This is the Job Creating Entity, who is also the Developer, or
business, that will create direct, indirect, and./or induced employment in order to meet job
creation requirements in accordance with the USCIS requirements. The JCE is the borrower or
ACTUAL BUSINESS PLAN Executive Summary L
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
recipient of EB-5 capital; herein, delivered to the Developer through a loan from the Limited
Partnership.
Limited Partnership: Pleasant Harbor Fund, LP ('Partnership'), a Washington Limited
Partnership, is the New Commercial Enterprise (defined below) that will aggregate EB-5
investor funds and loan them to the Developer for job-creating purposes. Pleasant Harbor Fund,
LP consists of Puget Sound RC, LLC as the General Partner and each of the foreign investors
who purchase a Unit in the Limited Partnership as its Limited Partners. The Limited Parhrership
may also be known simply as The Partnership.
Metropolitan Statistical Area ("MSA"): The general concept of a metropolitan area is that of a
large population nucleus, together with adjacent communities having a high degree of social and
economic integration with that core. Metropolitan areas may comprise a number of towns or
cities, or even entire counties. A consolidated MSA has a population of one million or more and
also has separate component areas meeting statistical criteria and supported by local opinion.
New Commercial Enterprise ("NCE"): Referring to the Limited Partnership, a New
Commercial Enterprise is one created on or after November 29, 1990. This is the enterprise that
EB-5 Investors will submit their capital contribution, become limited partners following the
execution of subscription and operating agreements, and will thereafter serve as the lender to the
job-creating enterprise (JCE).
Offering: The offering is of Units in Pleasant Harbor Fund, LP pursuant to the Private Placement
Memorandum.
Partnership Agreement: The Limited Partnership Agreement of Pleasant Harbor Fund, LP, as
the same may be amended from time to time. All definitions utilized in the Partnership
Agreement are incorporated herein by reference.
Project: Pleasant Harbor Marina and Golf Resort Projecl, an undertaking to the construction,
renovation, and operation of a 256-acre master-planned resort community.
Project Documents: Project documents include, but are not limited to, the following: (a) this
business plan drafted in accordance with Matter of Ho, (b) a corresponding economic analysis
(c) a private placement memorandum, (d) a limited partnership agreement, (e) subscription
agreement, (f) and other related feasibility studies, appraisals, term sheets, and escrow
documents.
ACTUAL BUSINESS PLAN Executive Summary 2
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Regional Center: Puget Sound RC, LLC (oRegional Center"), an Arizona Limited Liability
Company, approved as an EB-5 Regional Center by the United States Citizenship and
Immigration Services ("USCIS") on September 16, 2013 (see Exhibit A), and sponsor to
Pleasant Harbor Marina and Golf Resort Project. As sponsor, Puget Sound RC, LLC will advise
the Project, the EB-5 process, and the associated entities as well as provide reporting for matters
of I-526 and I-829 related requirements.
Subject Property: 308913 US Highway 101, Brinnon, IYA 98320; the proposed lot of land
intended for development of the Project. The Subject Property may also be referred to as the
Project Site.
Targeted Employment Area ("TEA"): A TEA may be a Rural Area or a High Unemployment
Area as designated by the appropriate state authority.
Unit: A limited partrrership unit in Pleasant Harbor Fund, LP, which will be offered under
Regulation D and S to foreign nationals outside the U.S. at a purchase price of $500,000 each.
United States Citizenship and Immigration Service ("USCIS"): USCIS is the government
agency that oversees lawful immigration to the United States.
1.2 Mqtler of Ho Index
According to Matter of Ho,22 I&N Dec.2006, a comprehensive business plan as contemplated
by the regulations should contain, at minimum, a description of the business, its products and/or
services, and its objectives. The following are excerpts from Matter of Ho, along with the
corresponding sections of this business plan:
Markej;\nalysis
"The plan should contain a market analysis.. . [Section 7.0 Market Analysis]
...including the names of competing businesses and their relative strengths and
weaknesses, a comparison of the competition's products and pricing structures, and a
description of the target market/ prospective customers of the new commercial enterprise
[Section 2.3 Management Team outlines skills and strengths of regional center and
developer management, and Section 3.0 and Section 7.0 describe the desirable features
of each asset proposed herein]."
ACTUAT BUSINESS PLAN Executive Summary 3
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Permits and Licenses
"The plan should list the required permits and licenses obtained. [Section 5.0 Project
Development Timeline]."
Manufacturing or Production Process
"If applicable, it should describe the manufacturing or production process, the materials
required, and the supply sources." [Not applicable]
"The plan should detail any contracts executed for the supply of materials and/or the
distribution of products." [Not applicable]
Market Strategy
"It should discuss the marketing strategy of the business, including pricing, advertising,
and servicing." [Section 7.3 Marketing Strategy]
Business & Staffine
"The plan should set forth the business's organizational structure and its personnel's
experience." [Sections 2.3 Management Team]
"It should explain the business's staffing requirements and contain a timetable for hiring,
as well as job descriptions for all positions." [Section 8.0 Employment]
Financial Proiections
"It should contain sales, costs, as well as operating expense and income projections and
detail the bases therefore. Most importantly, the business plan must be credible. [Section
6.0 Financial Performance]
1.3 lnlroduclion
This is an Actual Business Plan for the development of the construction, renovation, and
operation of a 256-acre master-planned resort community. The total cost for the Project is
divided into four independent phases where phase one, the phase that is the focus of this business
plan, will cost approximately $53,812,652. Pleasant Harbor Marina and Golf Resort, LLP (the
"Developer") is seeking up to $10,000,000 in EB-5 financing from as many as 20 foreign
ACTUAI- BUSINESS PLAN Executive Surnmary 4
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
investors. According to an economic analysis commissioned by the Developer and prepared by
Wright Johnson, LLC, the Project will create a total of 389.4 direct, indirect, and induced jobs.
1.4 New Commerciql Enlerprise
The Fund
Fund Objective
Regional Center
Affiliation
Use of EB-5 Investment
Proceeds
Debt Investment
1.5 Job-Creqling lnveslmenlTorgel
Pleasant Harbor Fund, LP, a Washington Limited Partnership.
The Parhrership was established to finance the development of
Pleasant Harbor Marina and Golf Resort Project.
Puget Sound RC, LLC, the Regional Center sponsor, will
review and monitor the Offering to confirm compliance with
EB-5 rules and policies, reporting to USCIS as required.
Equity invested into the Partnership will be issued in full as a
loan to Pleasant Harbor Marina and Golf Resort, LLP ("the
Developer") as the Project's owner for the purpose of
developing Pleasant Harbor Marina and Golf Resort Project.
The Parhrership plans to make a qualiSing Investment
permitted under the EB-5 Program in the form of the Loan to
Pleasant Harbor Marina and Golf Resort, LLP to finance the
construction, renovation, and operation of a 256-acre master-
planned resort community.
The Project
Developer
EB-5 Investment Offering
Pleasant Harbor Marina and Golf Resort Project, the
construction, renovation, and operation of a 256-acre master-
planned resort community. The Project will create 389.4 direct,
indirect, and induced jobs from construction activities and
operations.
Pleasant Harbor Marina and Golf Resort, LLP, referred to as
"the Developer," will use EB-5 capital to develop Pleasant
Harbor Marina and Golf Resort Project.
The Partnership will accept up to 20 EB-5 investors as
ACTUAL BUSINESS PLAN Executive Summary 5
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Organization and
Structure
Project Costs and
Capitalizations
Project Development &
Schedule
Project Job Creation
TEA Designation
Job Creation Sufficiency
members with all the rights and responsibilities accorded under
the State of Washington Uniform Limited Partnership Act. The
Partnership will loan money to the Developer, which will own
and develop the facility.
The total project costs for phase one amount to approximately
$53,812,652. The Developer will seek bank or alternative
financing in the amount of $25,891,041, and will seek to raise
up to $10,000,000 in EB-5 capital. The Developer will
contibute the remaining capital required.
Construction of the subject facility will take approximately 36
months. EB-5 funds will be utilized for the first 30 months of
construction of the Project. As demonstrated by the Economic
Analysis the full requisite employment needed for EB-5
investors to receive permanent gteen cards will be available
before the I-829 petitions will be submitted.
According to the Economic Analysis by Wright Johnson, the
Project will create 389.4 jobs from construction and
operations.
The project is located in rural area, which means that the
minimum EB-5 investment amount is reduced to $500,000 per
investor.
According to the economic analysis by Wright Johnson, the
Project will create 389.4 jobs that are a result of this
development assuming only construction and operational jobs.
This equates to approximately 19.5 qualiffing jobs for each of
the Partnership's investors, assuming 20 members on an EB-5
capital raise of S10,000,000.
ACTUAL BUSINESS PI.AN Executive Summary 6
PLEASANT HARBOR MARINA AND GO!-F RESORT PROJECT
Sponsored by Sound RC, LLC
2.0 BUSINESS OVERVIEW
2.1 Projecl Ownership
The following flow chart illustrates the equity ownership, and operations of PHMGR. Once the
Project has completed all acquisition, construction and renovations, PHMGR will continue to
operate and manage the properties through its wholly-owned subsidiaries: Pleasant Harbor Golf
and Spa, LLC, and Pleasant Harbor Marina, LLC.
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2.2 lnveslmentSlruclure
Pleasant Harbor Fund, LP (the "Partnership"), is a Washington limited partnership, formed for
the purpose of making one or more "qualifuing investments" in compliance with the EB-5
Investor Program and United States Citizenship and Immigration Services ("USCIS")
requirements so that investors are in a position to obtain conditional or permanent U.S. resident
status. The Partnership will be managed by Puget Sound RC, LLC as its General Partner on
behalf of the foreigu investors.
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ACTUAL BUSINESS PLAN Business Overview
&tsrhe
Pba.ant HarDor
7
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Pleasant Harbor Fund, LP will receive at-risk equity investment from EB-5 investors, who will
be Limited Partners and co-owners in the Limited Partnership. The Limited Parhership will
issue the full amount of equity investment as a loan of $10,000,000 into the Project by means of
a loan to Pleasant Harbor Marina and Golf Resort, LLP.
The following diagram provides the basic lnvestment Structure of the Project:
ACTUAL BUSINESS PLAN Business Overview 8
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
PuFet Sound RC, LLC,
an Arizona Limited Liability Company
LENDER
PLeeseNr Hanson FuNo, LP.
a Washington Limited Partnership
GENERAL PARTNER:
Puget Sound RC, LLC
TIMITED PARTNERS:
Eecx Fonsreru lrvesron
Pumenr Henaon Menrraano Gou Resonr, [LP,
a Washington limited liability company
Pleosont Horbor Morino and Golf Resort, LLP is the owner, developer ond operotor of
the Pleosont Horbor Morino and Golf Resort Project
BORROWER
ACTUAT BUSINESS PLAN Business Overview
REGIONAL CENTER
9
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
The following diagram traces the path of the funds invested into the Project:
2.3 Monogemenl Teom
. TheXegional Centerwill prepare evidence of EB-S capital expenditures and revenues generated over the 2-year
conditional period of residency for use as part ofthe Form I-829 Removal of Conditions to validate tle required job
creationVerification
. Money is-spent by the-conclusion ofthe consruction period in accordance with tlle details provided herein, creadng
the iobs described in t}le "fob Creation Analysis" section.
. Based on the Economic Analysis attached hereto, t}re Proiect will create 213,5 permanent fobs.
. The Partrrership will loan the money to the Developer, which will be responsible for the development of the Proiect
. The full EB-S Capital Raise is placed at risk in accordance with the budget listed in tlre "Financial Performance"
section of this document over t}te 5 year period following the release of money from Escrow.
. Formation of special purpose entity to organize up to 20 EB-s investors and pool $10,000,000 ofEB-S capital,
. The Regional Center will serye as the managing parher,
Partnership
The
. The Regional Center conducts its internal due diligence regarding the Iawful source of funds,
. Capital will be placed in escrow pending t}le approval ofthe I-525 visa petitions.Forelgn
Investment
2.3.1 Developer Monogemenl
Garth Mann
President & CEO
A graduate of the University of Waterloo, Ontario, Canada, with a
Doctor of Optometry degree, Dr. Mann practiced for 22 years
before divesting his practice to his Associates, and focusing on a
career in Real Estate Development under the banner of The
Statesman Group.
ACTUAT BUSINESS PLAN Business Overview
Job Creation
Loan to
Developer'
10
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Alana Mann
President - USA
Operotions
The Statesman Group of Companies has evolved as a 40-year
multi-national organization with offices in Ontario, Alberta,
British Columbia, Canada; and Washington, Arizona, and North
Carolina, United States. The head office for the United States is
Scottsdale, Aizona, and Canada is Calgary, Alberta.
With the recent and on-going North American recession, the
American market experienced significant down-turn that was not
experienced to the same degree in Canada. As a result, the
financial resources to continue progressing our communities in the
United States was recognized by Banks and Statesman
Communities were in the minority of firms continuing to develop
over the past 5 years.
This growth has been in two main categories that include Resort
Communities in preferred locations, and Senior Supportive Care
and Advanced Medical Communities. With 3 of the Mann Family
involved in the Statesman Business and living in the United
States, the family business is expanding, and employing
Americans with progressive opportunities from future expansion.
The Statesman Logo: "WHAT A BEAUTIFUL WAY TO LIVE!"
has proven that our mandate of quality & care is meaningful to our
thousands of happy residents.
Alana Mann acquired a Bachelor of Science Degree from
University of Memphis in 1994 while attending University on a
full scholarship representing the Women's Golf Team.
Although growing up in the family business, Ms. Mann began
full-time employment for the Statesman Canadian Corporation as
the General Manager in January 1996. She was responsible for
overseeing the day to day operations and human resource
compliance, as well as, working in sales on the weekends. She
managed the marketing campaigns, and developed a substantial
network by which the residential communities built by Statesman
were sold. Ms. Mann supervised many staff professionals dealing
with project management, property management and other various
development issues.
ACTUAL BUSINESS PIAN Business Overview 1L
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Jeffrey D. Holland
Vice President of Project
Development ond
Document Control
Don Coleman
Project Systems
Manoger
ln 1997, company plans for the Senior Living Developments
expanded to the United States necessitating the transfer of Ms.
Mann to Phoenix, Arizona n late 1997. Since coming to the
United States Ms. Mann has become a United States citizen,
responsible for the start-up of the US Corporate Office and all
Operations involved. Responsibilities included, managing of the
day to day operations, implementation of US Corporate policies
and procedures maintaining corporate reports and forms, human
resource compliance, hiring and firing of personnel, overseeing
sales and marketing, customer service assuring customer
satisfaction, working with financiers developing project pro-
formas and banking including having knowledge and skill in
accounting systems and abilities to generate and maintain budgets
and financial statements, working diligently with corporate
attorney's assisting in composing all legal documents, and all
other tasks involved in managing the companies US business
affairs.
Jeffrey D. Holland is a licensed attomey (currently on inactive
status) in Arizona, Nevada, Texas and Washington and is
currently employed as Statesman's Vice President of Project
Development and Document Control Prior to joining Statesman,
Mr. Holland spent over 9 years practicing law in a civil litigation
firm handling construction, business and insurance related matters.
As Vice President of Project Development and Document Control,
Mr. Holland oversees all development related issues and programs
in the United States and is responsible for contract review,
negotiations, project development, and management from
acquisition through construction completion. He also assists the
President (USA Operations) with banking, construction financing,
and other acquisition, development, and licensing related matters
Don Coleman is a resident of the Puget Sound area of Washington
State since 1974, which includes history of military service,
college and employment. As a small business owner/manager in
ACTUAL BUSINESS PIAN Business Overview L2
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
the outdoor power equipment industry servicing and selling
equipment for landscape, logging, and small farms. Don Coleman
relocated to Brinnon, Washington in 2002 and started a
recreational dive charter business. Experience and skills required
for the dive charter business include being a dive instructor, US
Coast Guard Master (Captain), emergency response training
(instructor), along with marketing and business skills.
2.3.2 Regionol Center Sponsorship
Regional Center: The regional center sponsor of the Project and its investors is Puget Sound
RC, LLC ("PSRC" or "Regional Center"). PSRC received its Regional Center designation from
USCIS on September 16, 2013. A copy of the approval letter is attached as Exhibit A.
PSRC is an Arizona limited liability company established to participate in the United States EB-
5 immigrant investor program pursuant to Section 203(bX5) of the Immigration and Nationality
Act of 1990, as amended ("EB-5 lnvestor Program") in order to promote economic growth and
facilitate investment within the contiguous geographic area of the State of Washington. The
Regional Center will facilitate investment into Washington through Pleasant Harbor Fund, LP
(the "Partnership"). The Regional Center will promote economic growth within Washington by
marketing, managing, and administering the Parhrership, which will make a $10,000,000 secured
at risk investment to finance the development of the Project.
The Regional Center's approved geographic region includes the Counties of Jefferson, Clallam,
and Kitsap Counties in the State of Washington, as depicted in the following map:
ACTUAT BUSINESS PLAN Business Overview 13
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
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Lessors of Nonresidential Buildings (Except Miniwarehouses)
Marinas
Fitness and Recreational Sports Centers
Hotels
Drinking Places
Full-Service Restaurants
Limited- Service Restaurants
2.4 Consullonls
2.4.1 Dovid Homillon: Archilecl
The David Hamilton architectural firm practices across Canada and the United States. The firm
has designed residential projects as large as 1,600 units with a value of $500,000,000. The firm
ACTUAL BUSINESS PLAN Business Overview L4
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
has also designed commercial projects, including offices, hotels, shopping centers and industrial.
The firm has also been active in all areas of affordable housing, building envelope design and
energy conservation with over 30 years experience in environmentally sustainable construction.
Professional affl iations include :
Alberta Association of Architects since l97l
Architectural lnstitute of British Columbia - 2013
Ontario Architects Association - 1996
State of Arizona Board of Architecture - 1998
Saskatchewan Architects Associati on - 2004
NWT Architects Association -2006
State of Washington -2007
The firm is also a member of the following professional organizations:
The Alberta Chapter-Canada Green Building Council
Edmonton Home Builders Association
National Fire Prevention Association
Royal Architectural Institute of Canada
2.4.2 Hospitolity Advisors Group: Hospitolity lndustry Consullont (Direct Job
Verificotion)
Zachary Z. Zoul, CHA is the Chairman and Chief Executive Officer of Hospitality Advisors
Group. Mr. Zoul has thirty years of executive experience managing hospitality, development,
and property management operations. Prior to joining Hospitality Advisors Group, Zoul was
President, Chief Executive Officer, and Director of the Cote Family Companies, a resort,
hospitality, and real estate/development company with holdings in the Midwest and Southwest
including the award winning Grand View Lodge Resort and it's three championship golf courses
and the Tanque Verde Ranch resort. He served on the executive team of Palmetto Bluff in Hilton
Head, South Carolina overseeing operations for one of the largest resort and residential
communities in the United States encompassing 20,000 acres including the Inn at Palmetto Bluff
- recognized as the #1 resort in North America. Additionally, he served as General Manager for
two distinctive coastal Georgia properties, including the Greyfield Inn on Cumberland Island.
Recently, Zoul served as managing director of the historic luxury hotel Deco XV in Omaha, NE.
Zoul' s focus on sales and marketing was reflected in his work as an Adjunct Professor for
Brenau University teaching graduate and undergraduate marketing. In addition to his pre-
opening and start-up experience, Zoul has been actively involved in hospitality facility design
a
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ACTUAL BUSINESS PIAN Business Overview 15
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
and development, including Minnesota's newest outstate and widely acclaimed conference and
event center - the Gull Lake Center. Zoul holds a Master's Degree from Minnesota State
University and a Bachelor's Degree from Drake University and is a Certified Hotel Administrator
by the American Hotel and Lodging Association.
2.4.3 Wrighl Johnson, LLC: Economic lmpocl Consultant
Wright Johnson, LLC is a business consulting and planning firm that specializes in USCIS's EB-
5 Regional Center Program with an econometrics division that has successfully prepared
numerous economic studies to evaluate and summarize the job-creation and economic benefits
attributed to regional center designation and individual EB-5 projects. The firm has authored
numerous economic analyses to demonstrate the local employment and economic impacts of
various projects to local, state, and federal agencies. Based on prior government projects and
peer-review, including EB-5 job-creation studies, Wright Johnson's methodologies and
economic research are well-vetted and considered to be in accordance with the practices and
standards of professional economists nationwide. The economic analysis conducted by Wright
Johnson's is referenced throughout this business plan and will be submitted along with this
business plan.
Wright Johnson report, titled An Economic Anolysis of the Pleasant Harbor Marina and Golf
Resort Project - Final Report, is referenced throughout this Business Plan and will be submitted
along with this Business Plan.
ACTUAL BUSINESS PLAN Business Overview L6
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
3.0 PROJECT DESCRIPTION
3.1 Proiect Site
The project encompasses 256 protected acres with coastal views and is approved for 890 Resort
units including staff housing. Framed by the natural beauty of Puget Sound and Olympic
National Park, Pleasant Harbor Marina and Golf Resort is an ideal location for a master planned
resort. The project can be accessed by float-plane, ferry or by vehicle, and is a short 2 hour drive
outside of Seattle or Tacoma, Washington. The location sits just South of rural Brinnon at US
Highway l0l and Black Point Road. Parcel numbers associated with the project include
502153002,003,023,022,021 &020; APN 502154002; APN 502152005,012,013,014,015 &
016, in Sections 15 & 22, Township 25, Range 02 West, WM, located south of Brinnon,
Washington 98320.
The following are current pictures of the Marina and Harbor:
ACTUAL BUSINESS PLAN Proiect Description
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3.2 Project Detoils
Pleasant Harbor Marina and Golf Resort is a master planned resort located on a natural harbor
and marina in picturesque Jefferson County, Washington. The Project is being developed in four
phases, with EB-5 funds used for Phase 1 of the Project only.
Phase I construction will focus on the following resort amenities, facilities, and programming
elements:
Food and Beverase: there will be three food and beverage venues consisting of the following
Gallev Bistro: A tnro story 3,000 square foot restaurant and lounge will be located
adjacent to Pleasant Harbor seating eventually 60 guests. This venue will serve breakfast, lunch
and dinner.
Sports Bar: Located in the Maritime Village building between the Farmer's Market Store
and Family Fun Center will be a Sports Bar that will seat 70 guests indoors with additional
seating on the exterior for another 20 guests. This will primarily be a late afternoon and evening
venue.
Center Cafe: This casual dining venue and party room will be located on the second floor
mezzanine overlooking the Family Fun Center and will feature a casual environment with a
limited menu inclu drng pizzas.
Marina: Located along tle shore of the Hood Canal, a deep water harbor will be a 286 slip full
service Marina. The Marina will feature a full complement of marine services including slips,
moorings, mechanics shop, laundry, showers, boat shop, fuel, and pool.
Accommodations: Lodging accommodations will be provided in the form of 66 one bedroom
suites. These hotel style suite accommodations will allow for both short term and extended stay
reservations. The suite rooms will be located in floors one, two and three of the Maritime Village
building.
Family Fun Center: This facility will serve as a center for both indoor and outdoor recreation.
The 6,000 square foot indoor facility will feature an array of recreational elements for youth and
adults including rock climbing zip lines, arcade, laser tag, youth programming, party room, and
play, fitness, and sports equipment. A second mezzanine level area will serve as a food and
beverage outlet and party room and allow for special events, birthday parties, and family
gatherings with an allowance for catering service.
ACTUAL BUSINESS PLAN Project Description L9
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Retail: The Maritime Village building will house a number of retail and service establishments
including a Farmer's Market as an anchor on the main level. A component of the Grocery Store
is a Coffee and Tea Shop similar to a Starbucks designed to accommodate up to 40 guests. The
second floor will feature a Dive Shop, Clinic, and two other commercial spaces in addition to a
Yacht Club for Marina guests.
Administration: An administrative offrce for the property will be located on the second floor of
the Maritime Village building.
Security: Security services will be provided by on-site Security personnel.
The drawings that follow illustrate the design of the buildings to be constructed during Phase I
Bistro Floor Plan & Renderings
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ACTUAL BUSINESS PLAN Project Description 22
PLEASANT HARBOR MARTNA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
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ACTUAT BUSINESS PIAN Project Description 24
PTEASANT HARBOR MARINA AND GOIF RESORT PROJECT
Sponsored bv Sound RC, LLC
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PUASE 1 CONSTRUCTION
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PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
The following is an explanation of the various elements of Phase 1 construction. Phase 1 is the
focus of this Business Plan and EB-5 funds will be used solely for the first 30 months of
construction of the facilities described below:
U.S. Highway 101 - The forecast increase in traffic generated by Pleasant Harbor Marina
and Golf Resort requires improvements to the intersection of U.S. Highway 101 and
Black Point Road to maintain an acceptable level of service and traffic safety. Both roads
will be widened to increase lane widths and to create tuming, deceleration, md
acceleration lanes. Black Point Road will be relocated to form a ninety-degree
intersection with U.S. Highway 101 to improve intersection sight, safety and turning
movements.
Black Point Road - Black Point Road will be straightened to improve the intersection
alignment with U.S. Highway l0l. This reconfiguration will require dedication of new
right of way to Jefferson County, complete removal of the existing roadway, and road
surface widening. Concrete curb and gutter are proposed to provide a more formal
appearance. An access drive to the Maritime area and an access drive to a new parking
area and bus stop for Jefferson Transit and Mason Transit will be established with a new
four-way intersection. The drive to the parking area and bus stop will also provide access
to a gated secondary access to the Golf Resort area primarily for service vehicles,
pedestrians, and resort shuttles.
Washington Department of Fish and Wildlife (WDFW) Boat Launch Access Road -
The current boat launch access road intersects with Black Point Road at an acute angle
and at the end of a curve resulting in a very poor sight distance condition. With projected
increase in vehicle traffic this intersection would present an unsafe condition. The
existing location would fonn a five-way intersection that is not an acceptable engineering
practice. An alternative location for the boat launch access road intersection is remote
from the proposed new intersection and provides for a much improved entrance to Black
Point Road.
Maritime Village - The Maritime Village is situated in a sloping terrain requiring re-
contouring of the site to accommodate drives, parking, and three buildings. The access
drive and shuttle route to the marina is to be widened as required to include improved
parking and drive fronting the marina buildings. Paved parking areas and drives will be
landscaped in all areas and include curb, gutter, and sidewalk at the Maritime Building.
Sidewalk will connect with a pedestrian crossing of Black Point Road and the bus stop
and adjacent parking area to the south. The bus stop and parking area will be paved with
asphalt and landscaped. A covered area will be provided for transit patrons at the bus
waiting area.
Water and Sewer Major Facilities (Water) - A water storage facility will be
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ACTUAL BUSINESS PLAN Project Description 27
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
constructed to serve the entire resort and marina area. The site constructed concrete tank
will be a buried on a high point of the golf course near the southeast comer of the site.
The tank will contain 310,000 gallons of well water. The existing well on the resort site
is to be rehabilitated and an additional well is to be drilled and put into service for the
resort water supply. The initial construction will include transmission piping from the
wells to the storage, distribution piping, and pressure control equipment to establish water
pressure zones as needed within the service area.
. Water and Sewer Major Facilities (Sewer) - The first of the three phases of treatment
plant construction is included in this estimate. The ffeatment plant will produce Class A
effluent that is allowed to be used for irrigation and fire suppression. Treated reclaimed
water along with collected site storm water runoff is to be stored in the 120 million gallon
capacity, 12 acre surface area, and synthetically lined "Kettle B" storage pond.
. Marina Bistro - A2 story restaurant with 30,015 square feet of space.
. Maritime Village Building - 42Rental Units with 11,700 square feet of Commercial
space.
FUTURE PHASES
PHASE 2
Phase 2 includes the construction and grading of the golf course, plus the central resort complex
of 140,000 square feet. That central building will include restaurants, a spa/fitness center,
conference centers, a wedding chapel, management offices, retail stores, and a pro-shop. The
developer will construct a building for the storage of golf carts and other equipment, and staff s
housing to accommodate 104 full+ime support staff. The Developer may seek also EB-5 funds
to finance Phase 2 under a separate capital raise.
PHASES 3 & 4
Phases 3 and 4 encompasses the balance of the strucfures, where the multi-level Terrace Resort
buildings are designed for Short Term Stays (approximately 545 Terrace Resorts); and the Sea-
View Villas and Alpine Vistas are designed to accommodate those wishing to enjoy Longer
Stays, and most likely second homes (approximately 293 Villas and Vistas). The Developer may
seek also EB-5 funds to finance Phase 2 under a separate capital raise.
The following photographs show work that has already been completed on Phase I.
ACTUAI BUSINESS P!.AN Project Description 28
PLEASANT HARBOR MARTNA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
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3.3 Subject Property Areo Profile
With the population 29,872 in 2010, Jefferson County is estimated to increase by 1.9% average
annual growth in the next l0 years that surpasses higher growth rate than the US and Washington
State averages. Surrounded by the Pacific Ocean on one side and the Puget Sounds on the other,
the county encompasses a large portion of the Olympic National Park.
Jefferson County's economic strength is largely due to its diverse businesses and community.
The county pivots around nine business clusters: Arts and Culture, Education, Small Business
and Entrepreneur, Food and Farm, Healthcare, Marine Trades, Real Estates and Construction,
and Tourism and Retail. The maritime, arts and culfure, food and farm, and tourism and retail
clusters draw well over one million visitors each year to the county.
The 2013 average annual wage for Jefferson County was $34,497, well below the state's average
annual wage of $53,029. The median hourly wage in 2012 was $18.75, less than that of the
state's median hourly wage at $21.64 and for the state less King County at$19.24.
Per capita personal income in Jefferson County in 2012 was $44,946 compared to $46,045 for
the state and $43,735 for the nation. Personal income includes earned income, investment
income, and govemment payments such as Social Security and Veterans Benefits. Investment
income includes income imputed from pension funds and from owning a home. Per capita
personal income equals total personal income divided by the resident population. Jefferson
County ranked fourth in the state in 2012 in per capita income. It ranked third in 2007 and 2008
and fourth in2004,2005 and 2006.
Given its rural classification, it is not too surprising that Jefferson County has a slightly higher
poverty rate than that of the state. According to the U.S. Census QuickFacts, 13.7 percent of
those in the county were living below the poverty level compared to 12.9 percent of the state
population and,l4.9 percent of the U.S. population in the period 2008 throughz0l2.
The table below provides population statistics for Jefferson County and the State of Washington.
Jefferson
Population, zott estimate
Population,2o1o
Population, percent change, zooo to zoto
Population,2ooo
Persons under 5 years, percent, 2oto
Persons under t8 years, percent, 2o1o
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ACTUAL BUS!NESS PLAN Project Description E
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PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RG LLC
Persons 65 years and over, percent, 2olo
Female persons, percent, 2o1o
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12.3o%
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ACTUAT BUSINESS PLAN Project Description 4L
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Racial demographics for Jefferson County and the State of Washington are provided in the table
below.
Jefferson
White persons, percent, zoto (a)
Black persons, percent, zoro (a)
American lndian and Alaska Native persons, percent, zoto (a)
Asian persons, percent, zoto (a)
Native Hawaiian and Other Pacific lslander, percent, zoto (a)
Persons reporting two or more races, percent, 2o1o
Persons of Hispanic or Latino origin, percent, zoto (b)
White persons not Hispanic, percent, 2o1o
Living in same house lyear & over, zoo6-zoto
Foreign born persons, percent, 20c6-2010
Language other than English spoken at home, pct age 5+,
2006-2010
High school graduates, percent of persons age25+, zoo6-zoto
Bachelor's degree or higher, pct of persons age 25+, 2oo5-
2010
Mean travel time to work (minutes), workers age t6+, zoo6-
2010
Housing units, 2olo
Homeownership rate, 2o06-20io
Housing units in multi-unit structures, percent, 2oo6-2oro
Median value of owner-occupied housing units, 2006-2olo
Households, 2oo6-201o
Persons per household, zoo6-zoto
Per capita money income in past rz months (zoto dollars)
zoo6-zoro
Median household income zoo6-zoto
Persons below poverty level, percent, zo06-2o'ro
9t.oo%
o.8o7"
z.3o%
t.6o%
o.zo%
3.40%
2.8o%
89.3o%
85.9o%
4.20%
5.50%
94.20%
34.8o%
2.4.6
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73.8o%
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64.8o%
25.9o7,
$285,4oo
2,577,375
2.49
529,1)3
157,244
The table below provides statistics on household demographics for Jefferson County and
the State of Washington.
4,854 607,737
Household De phics Jefferson
ACTUAI. BUSINESS PIAN Project Description
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42
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
The table below provides business statistics for Jefferson County and the State of
Washington.
Business .lefferson
Total number of firms, zooT
Black-owned firms, percent, 2o07
American lndian- and Alaska Native-owned firms, percent,
2O07
Asian-owned firms, percent, 2o07
Native Hawaiian and Other Pacific lslander-owned firms,
percent,2ooT
Hispanic-owned firms, percent, 2007
Women-owned firms, percent, 2oo7
Manufacturers shipments, 2oo7 (9rooo)
Merchant wholesaler sales, zooT (gtooo)
Retail sales, zooT ($tooo)
Retail sales per capita, zooT
Accommodation and food services sales, zooT ($tooo)
Building permits, zoto
Federal spending, zoog
Land area in square miles, zoto
Persons per square mile, zoto
FIPS Code
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28.707"
112rO53,283
76,79o,966
92,968,519
gr4,38o
tz389,4zz
2o,69l
689,812,76't
66,455.52
101.2
53
The table blow provides geographical statistics for Jefferson County and the State of
Washington.
t,8o3.7o
t6.6
31
The above profile of Jefferson County is a list of quick facts acquired through US Census
website.l
Jefferson
ACTUAL BUSINESS PIAN Project Description
t
I W.rhi"gt*
N: data not available
43
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
3.4 Economic lmpocl lo the Region
The economic impact analysis conducted by Wright Johnson, LLC frnds that the Project will
generate significant and positive economic benefits for the regional economy. Total annual
benefits projected for the region that is the result of the proposed Project is forecast at
$531409,000, which includes the following:
o Annual growth in regional household eamings:
. Annual demand for business services:
. Annual demand for utilities:
. Annual demand for maintenance/construction:
o Demand on new supplier/vendor links with
manufacturers
$16,832,000
$2,930,000
$282,000
s30,880,000
$2,485,000
Source: Economic Analysis by Wright Johnson; p. 2.
ACTUAT BUSINESS PIAN Project Description 44
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
4.0 DEVELOPMENT AND COST CAPITATIZATON
4.1 Copitolizolion
The Developer anticipates the Project to have a capital development budget of $53,812,652,
inclusive of financing costs. The budget for the Project will be secured through a combination of
equity and debt. The Developer will seek to raise up to $10,000,000 in EB-5 financing. The
balance will be funded through developer equity.
The sources of funding for the Project are detailed in the following table.
Pleasant Harbor Profect Budget for Phase 1
Descrlptlon % Amount
EB5 Loan
Equity
Domestic Funding
L8.6%
42.O%
39.4%
Slo,ooo,ooo
S22,600,ooo
52t,z1.2,6sz
Total Uses LOO.O%$s3,8t2,652
4.2 Use of Funds
The Project is anticipated to cost a total of $53,812,652. The Developer's budget for the Project
is shown in the following table.
ACTUAT BUSINESS PLAN Development and cost capitalizaton 45
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC LLC
Pleasant Harbor Project Phase 1 Budget
Description Total
EB-S Eligible Hard
Constructlon Costs
EB-5 Eligible
Soft Costs
Land Costs
Hwy 101/ BPR lntersection
WDFW Boat Access Road
Maritime Area lnfrastructure
Phase l Water/Sewage
Clearing/G rading of Site
Resort Well System w/ Storage
Construct Materials Processing Site
Septic Tanks and Drainfield
Amenities/Zip [inesfiree Topper
PUD Transformer Upgrade
EB-5 Eligible Hard Costs
Sales Tax
Mason County PUD lmprovements
EB-S Eligible Hard Costs
Sales Tax
Construct Kettle B Reservoir
Create Wetland in Kettle C
Engineering Costs
Maritime Village Building
EB-5 Eligible Hard Costs
Other Hard Costs
FF&E
Fees & Permits
A&E
Bistro Building
EB-5 Eligible Hard Costs
Other Hard Costs
Construction Camp
Remodeling Projects
Hard Costs
Sales Tax
Marina Docks/Fuel Lines/ Sanitary
Hard Costs
Sales Tax
Legal, lnsurance, Taxes
Marketing
Total Development Costs
s12,600,000
Sss2,aca
S288,218
s3,992,17t
sl,gog,226
SS,soo,ooo
Sgoo,ooo
S14o,ooo
s450,000
SGoo,ooo
S3oo,ooo
Szt,ooo
S4,5oo,ooo
S4os,ooo
S45o,ooo
Stoo,ooo
5g+g,ggz
S7,G43,500
Sgoo,ooo
Ssoe,ooo
s33,200
S148,ooo
S1,1s0,71s
S153,735
szoo,ooo
s668,535
S6o,teg
s3,660,490
5329,443
s1,191,649
Sstz.tto
$sg,8tz,65z
S552,843
Szag,ztg
s3,992,777
57,909,226
S8,5oo,ooo
Sgoo,ooo
S140,ooo
S+so,ooo
$soo,ooo
Sgoo,ooo
s4,500,000
S45o,ooo
s100,000
s7,543,500
$1,150,71s
S2oo,ooo
SGG8,s36
SGoG,ooo
s3,660,480
s35,906,295 $606,q)0
Hard Costs includes (1) Offsite work consisting of improvements to the intersection of
Highway l0l and Black Point Road; (2) Sitework and Infrastructure improvements, including
to Black Point Road, construction of the W
ACTUAT BUSINESS PIAN Development and cost capitalizaton
of Fish and
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Wildlife (WDFW) Boat Launch Access Road, construction of the wastewater reclamation plant,
and water storage and delivery system improvements; (3) Building Construction, including
construction of the Maritime Village Building, and the Bistro Building; (4) Remodeling
Projects, and (5) Marina, Docks, Fuel Line, and Sanitary Upgrades. The hard cost
expenditures are provided in construction bids from Statesman Construction LLC, which are
included below.
The Developer's Project Budget above also distinguishes EB-5 Qualifying Hard Costs, which
Wright Johnson used in the job-creation analysis, and Other Hard Costs, which were not
considered for job creation. In addition, certain expenditures from the bids are re-categorized
where appropriate. The following line items were excluded from EB-5 qualiling hard costs and
re-categorized as indicated:
Maritime Village Building:
l. Consulting Fees ("Maritime Village Building A&E")
2. Fees and Permits ("Maritime Village Building Fees & Permits")
3. Light Fixtures (included in "Maritime Village Building FF&E")
4. Decorating and Accessories (included in "Maritime Village Building FF&E")
5. Project Costs (included in "Maritime Village Building (Other Hard Costs)")
6. General & Administration (included in "Maritime Village Building (Other Hard Costs)")
7. Contingency (included in "Maritime Village Building (Other Hard Costs)")
Bistro Building:
1. Finish Hardware ("Bistro Building FF&E")
2. Contingency (included in "Bistro Building (Other Hard Costs)")
3. Contractor's Margin (included in "Bistro Building (Other Hard Costs)")
4. Washington State Sales Tax (included in "Bistro Building (Other Hard Costs)")
ACTUAL BUSINESS PLAN Development and cost capitalizaton 47
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Construction Estimates
Pleasant Harbor Golf Resort
Plul lloCp.dhom
con trucoon Iamg.r
X.rch iE,2015
St t .m.n Con tructlon LLP
e300 E Rrlntrrc
Cost Estlmatos
CornmanL
Cnate Wetana ln-Kcttle C
TOTAL lor3-9t,Oa'l
xrwToi iaFE lntersection
Fnise I
512,11O
WDFW Bo.t Accect Ro.A
M.dtime Arci lntmatruciuro
552,E/t3
Pha;e i
6!8'i{
916604_8!i !M4Q
100,0q, l
!!.{gfE i
9-,{A-rZs - l
uq!490
4qqq
99_0'09
!{:999
" ,-3{?1e .',;. l-&tt! i,. 1_Ng :r. 8:10'999
e9r9Q
f,-fl9,m0.ts0,qrO l
t----
ACTUAL BUSINESS PLAN Development and cost capitalizaton
f-
..
i
i
1
48
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Ga(g
Pec*
1',t402 +O'E.
Tacoma,
tschni€l
253-84U5482
2s}20{l'4523
July 28,2015
Paul Construction
Statesmal
Phoenix, AZ
BYEMAIL:
RE:Cost
Marina Golf Resort
Dear Mr,
of Construction Cost was from predcsign
enStneenng thc Pleasant Marina and Golf Reson in County ncar Brinnorq
Washington.of itcrns were estimated from plans.
l.end Gredlng Slte tE500,000
r,750,000175 acres
1,000,000
sitc requirc clearing at $
yards excavated" screened,
and or placed embankments al $6.751cy =6,750,000
Wrter Trrnsmicrion $900,000
Well sorsens, pury, powcr supply,
pump and test
984!f.
This
2.
3.
4.
Water
Water
Sepdc
Grade
Meteriels
Gradc surfacc sitc for
400,000 gallons at $1.2slgal
PiPing,lO00 LF at $62.50
Slte
conveyors, and cnrshcrs by
north retaining wall
to be used as inrcrim septic and
for
ariks at WWTP
and
150,000
500,m0
250,000
water system washing processes
electric scrvice to site
material cquipment
rnd
site and
450,000
55,000
tanks 150,000
$l{0,000
50,000
25,000
15,000
50,ofi)
ACTUAL BUSINESS PIAN Development and cost capitalizaton
t
l a
49
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Pump to sertic tanks 90.o0!'
to 50.0q,
50,000
line field 45,000
5.B 4!il1,(m0
150,000syntheth liner plaoed u $0.30 =
and treatm€nt
sf S25 =300,000
6.
7.
c 100,000
Install and provide amponry
I lcr€d 100,000
Grade
Gradc
6c camp temporrry use
200,0(n
40,000
30,000
75,000
20,000
35,000
surfrce
Watcr
and
and
IfI can you concvning the general orthese
estimates of oost,cont cl mc-
Vcry truly
\e^L
Craig A. Peck,
ACTUAI BUSINESS PLAN Development and cost capitalizaton
infonnation
50
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
til€ and GEvol
Fhtrcrt
EnginerfiE
TOTAL COI{gULTING
FEEE AilD PERI'ITS
F€€s
Deyelqpm g!.Y.tmpgg rC99 _
@!1_
Permit Fees
TOTAL FEES AI{D
OI{ 81TE DEVELOPTIET{T
and Acca$olb3
TOTAL ON 8ITE
, -,EXCAVAnON ___-
Dcmoll0on
Control
.t91,!9,an9!-! E-o-B _ -_
Maritime Village
4.z.85260
21,W
Budget
AO{txl
ct{000 COilSULNXG FEES
Slst€sman Construction LLP
9300 E Rahree
c1-0005
cr-00r0
sr_{q2i-
9t{930
cr{n35
c1-0040
c2{t000
_--+
c2{o10
c2.o0'r5 __ei
0l
.9
Dp{900
D&Oo70
c24025
c2{o35
924W-
c2{055
02{090
o2.&72
D0{r070
204050
EO-0010
EGM15
-,_9
ol
0lIl
_el
OI-ol
J
ol
0
0l
E0{025
E0-0035
;i
I---1.
I
Iq
- -i4
--t
--1F0.0000
F0.{p.25
i
II.
TOTAL COST
PROJECTED
0
U1{IT
PROJECTED
COST PER
UN]T SFJOBDESCRlPNON
PHASE CODES
0
ACTUAT BUSINESS PIAN Development and cost capitalizaton
IG03Os
0
51
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Budget
FO{D35
G0{t000
G0-0020
Stalesman Constuction LLP
9300 E Raintree
M 85260
Marltlme Village
1t
TOTAL FOUI{DATION
.CONCRETE MATERI,ALS
./ Pa_iling Gar8oe _ _
walls
TOTAL CONCRETE
lnlp9cilgll -* -
TOTAL COITCRETE S'I TISC
_r-
q9{99
@.m50
H0.0000
t0-{,000
i,rq-{qs
H0-0055
I
Iol,1--
OI
-|---- -0l--t
it
I
,1
oi
oI
I
0!'-F'-
ot-+ --0t
i
- f.--
9_"_
-0; _
0r
&
4.1
52,m0
.FRATIING
to{ol0
r0.00!?
rGqo_q
leqo{
tG{n70
Jo{qq
J0-0005
KGo000
Kcq99,q
K0-0035
K9{910
K0-o055
K0{000
Lo{t000
LGOO05
F-ramlng Syciem,
Part'tion Walls
Pado Doors
Stairs (Stalruells)
1
FRAilTNCi--_ - _+-TOTAL
.ROOFI{G
Mst€rialE Lsbor --rorrr-noonrc
jExrEiuori
_caps/Flaehlns (l! E99F9 )
Stonc & Tlb
Wdb & DGcorative TUnEtE
TOTAL EXTERIOR
'PLUIBIIIG ArrlD HEATING
I -- tl --. l
3S6,0001t-I 43,0001
l.oool
?,9e9]
12,0001
tszog,
i.t'
i
0l I
il
I
I
tr
- --
0l_ _
ol
. ,,9]
ol-.1 - --
ol
' --i
ol
If-'
I
I
olFlxhjrss end
_-
i
'- J
41 7,000 i
TOTAL COST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCRIPTION
PHASE CODES
ACTUAT BUSINESS PLAN
Labor
Development a nd cost capitalizaton
stairwells and
'SITE COI{CRETE
sound
52
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Budget
LGO010
L(N)025
LOO040
lr0{r000
Tubs E Showers
Statesman Construction LLP
9300 E Raintsse
ta 85260
Maritime Village
TOTAL PLUTIBI]TG AND HEATING
.ELECTRICAL
llaterlals & Labor!qo_aq
Mq{q:!9
MO-m25
M(Hx)3O
M0-0035
MGo045
N04010
N0-0020
ooo00s
00-0015
00{030
Fb(trcs
voltaje conduit
T6levlslon/Talophono
Re-Work
72,@0
2'.1
17,OOO
0
0
TOTAL
DRYWALL
'
INSULATIOil
Materlels & Labor
o0-0000 TPAlNTING
!ntefior
Er<terior
Partfulg Lln6a
.FLOORIT{G
P0{010
P0-o015
rflg q qb!9
o0{,000 TIilTERIOR FINISH
oqogos
oo:9919
00-0025
Q0-0030
Wor*(Door8/Bas€board8,stc. )
Cablnets/Minors
: _Granltg
99{035
9q910
QO-0050
Accossorlos
Doors
TOTAL DRYWALL
'
INSULATION
TOTAL
TOTAL FLOORII{G
-
1El:gq9
87,m0
_qry0
88,000
r8!909
0:
I- __i . .
l!1tsl
tzo,oool--I
s'ml
21,mOl
7,omJ
rs,mo]
el
0l
0l
0t
el
0i
01
TOTAL COST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCRIPTION
PHASE CODES
0
ACTUAT BI.iSINESS PI.AN
& Clos6t
Development and cost capitalizaton
N0{t000
!g{qs .
_-1 ., --. -.-
0.
P0{1000
53
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Budget
R0-(x)05
s0.0000
Stratesman Construction LLP
9300 E Raintsee
Scottsdale, P2.8526{J
rOTAL INTERIOR FII{ISH
ilaritime Village
.APPUANCES
TOTALAPPUA'{CES
1 18,000
1!499.
17
8,flto
5,000
10,m01
uqq
- 9,90__q_
-._. ----__ i _--.CLEANING
s0.{xn5
s0.0010 Be{@!r -TOTAL
TO{000 .COX[O'{AREA
T0.0005 g@rle!ge4eglgrsl
Iqelq
r0{930
rg{q9_
T(XD45
Fmures
Door
TG0065
T0-0105
T0{115
Parklng Garage Doot
&t tllltyRooms (Paftade)
AutomatedAoe$SFEm _
storsfront
T0{310 Decoratlng &AcceEsories
TOTAL COttOt'l AREA
rf9:9ooo .PR(UECT COSTS
llqlq0
uo{D15
Rontal
I _ i-I s.oooli 3pooii opool -
t---
0
0
0
0tii
ol"l
0t
dl
ol--t
ol
,1
!i
1
ol
ol
_qi
I
0
9
0
T0-0300
TG0305
ly@$q/-regrr-
qqfg?0
uq-{9?5
uo-(x)30
u9{9$
ug.qo4g
u9{qi9
uo-{t105
Power
& Far
Facilities _ q,oooj
ra,oool
lpoo-]- lpool
,,iip*l
_6_,9-0_0.l.l
217,0001
0
u0-0205 S!.pgrv!soF
ueo-?19
u0.0305
Labor
Cosls
0.1
TOTAL COST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCRIPTTON
PHASE CODES
ACTUAT BUSINESS PLAN
TOTAL PROJECT COSTS
Development and cost capitalizaton
R9.0000
..--,I__-_._.
54
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Budget Stratesman Constuction LLP
9300 E Reintree
Scotbdale, AZ 85260
Maritime Village
TOTAL COST
PROJECTED
0
UNIT
PR(UECTED
COSTPER
UT{IT SFJOBOESCRIPTION
PHASE CODES
vo-0935 ,
v0-0040
wg{q?_g
w0{030
__Y9i9S
Yo{q1q
Y11"0015
Y0.0020
YO-m25
v0{000
v0-0030
w0-0020
WHD5O
Y0{r000
y_0!910
vo-(x)l1
vo-m12
v0:091s
v0{@0
w0.0000
wo{015
z0-,0000
2o.0005
1._. ^--
FII{ANCIAL COSTS
TOTAL FINA'{CIAL
UARXETI{G COSTS
lsl_st'999 g Fr€!
TOTAL MARKETIT{G COSTS
GE'{ERAL E ADilINISTMTIOI{ COSTS
Gen€ral A Administratlon Cosls
--_+
TOTAL GENERAL &
TOTAT CONTINGENCY
I
COilTINGENCY
Contln9loncy
Ll6blllty lnsuranco
l9rgtsr-s-e Fee3 (ln l-lo(r3€ Sel€s)
Home Operaling
+- --
Benofits (Healthcars, etc.)
Rlsk lnsurance
On Comuucfion Loan
EmplrJ€€ Peyroi F6eg
401K RetrBm€nt Plan
F€ss
F€6s
& Tltl6 F6os
Taxas
Feas
leovenum
lBroorrr..
rPflQJ!rqgs
1+
9,330.700
9,330,700
HARD COTSTRUCTION COSTS ONLY
GRAND TOTALS
ACTUAL BUSINESS PLAN Development and cost capitalizaton
i
i
I
55
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC LLC
Bistro Building Budget
God per Unlt
Permlt UO
obllhdlm
Temporary porer lnstalbtbn fo
Temporary polrg usmp UO
Temporery tdaphona hgtdlation 1 160 150
Temporarydephone usago 6 190 t1/O
TsttPorarYdlcs D&R 2 ax,qro
Tgnp@officeusae 0 250 1500
Tsnpraryblet B,lO
Tsnporaryunta B/lO
Ternponery hsst B/O
Oroltocd
Sitp Suoervlsbn 3&
,rolect ovdhoad 2708/.
nelneerlng
Clval and survey to
Sfucfrrd vo
tttbdtar{aal BO
Dgnctll0on
Capwebrand se*sr llnes 2 200 lo0
Dboonnecl electlcd o
tlsonned tdephone B/O
Dle@nnect cable BrcI
Rornovtd dusablegmds B,o
-andgcape gUacdon itA
l'land demollflon ]{A
Machlna demolltlon UO
Deblb rcmod lndudcd
Ercavdon
Machlne excavatlon zxxro
Hand ercamtbn
Madlnadtcfilrtq
Hand ditching
Machho bacldl lnduded
Hand becldll lndudad
lacldll materials lnduded
Founddlon
Bulldlno lercut 16hrs 65 1040
Batter0oard mat€rids 1 300 3m
lattErDoard lebor 24 65 1560
Footins form melcrlals 47457
ACTUAT BUSINESS PIAN Development and cost capitalizaton E
}arctlodon IEmii,
Fmtino form labor lnclfilad
Wallhrm materbl lrduded
Wallbrm labor lndudod
Re sled m#rlals lnduded
Ro sleal hbor lndudod
:oundation vents lndudod
Fourdaton bolb lndudod
Foundaton hardrvars lnduded
@ncrefe lndudsd
Conqpte pumphg lnduded
Fonndaton uldl patchlns 24 65 1Gff)
Foundffinudl dampeqEtg_
Foundedon st€m walls
5000
sCU
Drdnagt
4'footm dralns
4'dovnapout drahe
drah rcck
lrt FloorSbb
Vapor barler 't160
iubOrade 8285
shb 125n
Frznlng
l'brduarc
SIsder
Mudlll
StucturalSbol 6EO7B
lgtfloor dm idet
lstlloor lobb
ockkrg
Extetur uvallfnamlm 23400
Exterbruallshathlm 137W
lnterbr ursllfiemlno 17s47
Bbckfg
Cr*lhs becklns
Rilss
Trusea8
Celllru backins
ncluded
Roof soffltfmmlns
Reke ard fada
Rake moddlns
SlMishtorrb
SteelSoeirs flxxlo
Rooflns 37fln
Slo/isht oane
Steo flashins
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
ACTUAL BUSINESS PIAN Development and cost capitalizaton
rcbedfioendtramho
odb rYall f,aehlno
57
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
CONTIITGENCY 32000
Subbtal s1,150,7X5
Conhadors Marsin 645.028Uffids1,196,743
wssr s107.707
Total q1 -t(l4-4so
Furniture, Fixtures, and Equipment includes all furniture and equipment in the buildings, as
well as in the cofirmon areas.
Architectural and Engineering Costs includes fees paid to the architect and engineers for their
professional services.
Soft Costs includes other non-construction costs associated with the project:
(l) Sales Tax
(2) Design, Survey, Permits & Inspections
(3) Contingency
(4) Legal, Insurance, Taxes
Working Capital includes, without limitation, costs associated with hiring and training
employees, for grand openings, and initial capital needed for the first year of operational
expenses.
4.3 EB-5 loon Terms
Pleasant Harbor Fund, LP will provide the Developer with an EB-5 loan in the amount of
$10,000,000. The EB-5 investors' return on investment depends on the success of the Project and
is not guaranteed. Assuming the Project is successful, the principle will be repaid to the EB-5
with interest at arate of l.5Yo annually.
ACTUAL BUSINESS PIAN Development and cost capatalazaton 58
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
5.0 PROJECT DEVETOPMENT TIMETINE
The total construction time, including offsite work, site work, infrastucture development, and
buildings is expected to take approximately 30 months. A detailed timeline for construction,
which includes monthly construction expenditures, is attached as Exhibit B.
Developer equity and domestic funding will be used to fund the Administration and Pre-
Construction Phase of the Project. EB-5 funds will be deployed at the beginning of the
Construction Phase and will be used to help fund all construction activities.
The graphic below illustrates the development timeline for the project.
ADMINISTRATION/PRE.CONSTRUCTION PHASE
The Administrative phase covers land entitlements, design, civil engineering, permits, and
applicable fees. Specific milestones within the Administrative Phase include, without limitation:
Project due diligence and EB-5 Project positioning in finalizing a market study report and
economic analysis for job creation projections. The Developer intends to use private equity and a
loan (either private or bank) to finance the administrative costs that are incurred during this
phase.
Significant milestones achieved so far include:
. Site Improvement Plan drawings sealed and approved by Hargis Engineers, Inc.
Dnd"E$lty$d
Conlfiuc{m lorn
EB5 f unds Dopbyed
tlCI &b CilId ftlor Co.*rdoll rd oDilUor
DEliFrtr Drpbyrd
ACTUAT BUSINESS PI-AN Project Development Timeline
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59
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
a Permit Applications issued by Jefferson County, WA. (See Exhibit C)
CONSTRUCTION PHASE
The Construction Phase is divided into three sub-phases: (1) Offsite Work, (2) Sitework and
Infrastructure, and (3) Building Construction.
Offsite Work involves improvements to the interchange between Highway 101 and Black Point
Road. This work is expected to take approximately 9 months to complete.
Sitework and Infrastructure includes improvements to Black Point Road and the WDWF boat
launch access road, site grading and infrastructure for the Maritime Area, construction of the
Water Reclamation Plant, improvements to water transportation and storage systems, and
miscellaneous items. For additional detail, please see the complete construction bid included in
Section 4.2. Sitework and Infrastructure will begin while the offsite work is being completed
and continue through the end of the Construction Phase.
Building Construction includes construction of the Maritime Village Building (14 months total
construction time) and the Bistro Building (approximately I month construction time).
OPERATIONS PHASE
The marina is an ongoing business that is already operating and will continue to operate
throughout the period. Maritime Village operations will begin in early 2017 and, Bistro
operations will begin in late 2015.
ACTUAL BUSINESS PISN Project Development Timeline E
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
6.0 FINANCIATPERFORMANCE
The following operational departments will result from Phase I of the Project:
1. Maritime Village
2. Food Services
3. Marina
4. Suites
5. Family Center
6. Offices
Of the operational departments listed above, only revenues from Maritime Village room rentals
were considered by Wright Johnson in the job-creation analysis. The projected financial
performance of each department is discussed below.
ACTUAL BUSINESS PIAN Financial Performance 61
PLEASANT HARBOR MARINA AND GOLF RESORT PROJEfi
Sponsored by Sound RC, LLC
6.1 Moritime Villoge
The Developer's projections related to the Maritime Village suites are based on the market
analysis prepared by Hospitality Advisors Group (^See Section 7.2.2 and Exhibit D), as well as
the 2015 HOST Almanac, which includes U.S. hotel operating statistics for 2014 (^lee Exhibit E).
Specifically, the Developer's figures are based on the following reported ratios-to-sales for
limited service hotels in the Pacific Region:
O.cupanc, (ol Sample)
Avc.ate SiE of Pepcrty (R@ms)
Ave,ate Daily Rala
79.3%
125
$121.43
RE}AIE
nom
flod
Badata
Olld hod l8ffia!
olha o9s.frd Dcp.rlnf, nG
Total Rdeoue 100,0%
R@m
food I 8G.g!
UIOG'NBUIED OPlN tslG ETPEIISES
Admiridntivc & G.mr.l
lr.rlctiif
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II{COI{E EEFORE FIIED CXARGES
SclEtcd Fqld ctiJf.!
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lrE!nm!
AMOUilI AVAILABTf FOR DEBT
SENYrcE & OIIIER RISD CHARGES'
iffi rq ilpbc.mnt
3.i I
14
a4a%
] l.l
See Exhibit 8,p.49
In addition, the Developer has made the following assumptions:
r the suites will reach peak occupancy in the third year of operations
. room rates will increase with inflation at a rate of 2%o annually
Finally, although the HOST statistics include franchise fees as an expense, the suites will not be
of a franchise.below does not include franchise fees.
Limited-Service Ratio.to-Sales
Total 22.1L
Profit 77.5%
Tobl Uhdilhbut.d 240*
53.6./.
ACTUAT BUSINESS PtAN
the
Financial Performance
DEPARTM€I'ITAT EXPENSES
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
As shown on the proforma below, the Developer expects that the suites will generate over $2
million in revenue in the first year of operations, rising to over $3 million by Year 3. Profits are
projected to be over $l million in Year 1, increasing to over $1.6 million by Year 3.
PRO;ORMA PROFIT A]ID IOSS
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Revenue. Revenue includes income from the sale of suites, as well as food and beverage sales,
income from other operated departments, and rentals. Department expenses include labor costs
for front desk, housekeeping, reservations, bell staff and laundry, plus employee benefits. Other
operating expenses in the rooms departrnent include cable television, commissions, contract
cleaning services, guest relocation, guest transportation, laundry and dry cleaning, linen,
operating and cleaning supplies, training, uniforms and complimentary guest services.
Occupancy and Average Room Rate (ADR) are tle two variables that determine Rooms
Revenue and Revenue per Available Room (RevPAR). Hospitality Advisors Group predicts that
the suites will achieve an ADR of $229 and occupancy rate of 59% at stabilization. The
following is Hospitality Advisors Group's discussion of the local market data that forms that
basis for its conclusion:
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ACTUAT BUSINESS PLAN Financial Performance
0
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I
63
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
To aid in this study, Hospitality Advisors Group ordered a STR Trend Report for
the Olympic Peninsula area. Resort properties similar to the Pleasant Harbor
development were selected to be in the competitive set. Unfortunately, it was
discovered that, contrary to most areas of the US, very few Olympic Peninsula
properties, including Lake Crescent Lodge and Lake Quinault Lodge, report their
performance to STR. Consequently, Woodmark Hotel and Willows Lodge were
selected to round out the required four property minimum, and to bring the
proportional weight of Semiahmoo's 213 rooms under the 40o/o limit. As
mentioned in the individual property descriptions above, Woodmark and Willows
are both managed by the same company that manages Alderbrook.
The STR Trend Report is summarized for analysis on the following page.
STR Trend Report
Smith Travel Research
The Semiahmoo Resort was closed January - September 2013 for renovations by
a new owner. It depressed the aggregate competitive set occupancy for twelve
months thereafter as it ramped-up market awareness. The first three months of
2015, not shown in the chart above, have posted a 3.8o/o improvement in
Occupancy, and an 8.3% improvement in Average Daily Rate, which combined
for a 12.4o/o Revenue increase.
Rate Analysis for the Maritime Village Suites
Rates for the Maritime Village Suites, in current dollars, are proposed to match
those at Toscana of Desert Ridge Resort in Scottsdale AR, a Statesman Group
Irna fFrr (Al. t !.& Uaotr!.rt tflil., asLln + B.trcdr)
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ACTUAT BUSINESS PLAN Financial Performance 64
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
development. In the top-line Pro Forma below, the 2014 Monthly Occupancy
from the STR Trend Report is used with the proposed average seasonal rates.
High Season
Shoulder Seasons
low Seeson
TSVn
One-bc.'drmm Af-
t2o9-1299 1274
{169-J229 S19e
3109 - 3169 t139
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Blended
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66 Vlltagc
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ioom
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rut
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73.3%80,6qb 7r.4.h 57.09t lio.atb
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rr$
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TI,:U
Total Departmental Expenses are estimated at 22.4% of Departmental Revenue, based on the
2015 HOST Almanac. See Exhibit 8,p.49.
Administrative and General Expense. Included in this category are the payroll and related
expenses for the general manager, human resources, security, clerical staff, controller and
accounting staff. Other A&G expenses include office supplies, computer services, accounting
and legal fees, bad debt expenses, credit card commissions, and travel and entertainment.
Administrative and General Expenses are estimate d at 7 .8o/o of Total Revenue based on the 20 1 5
HOST Almanac. See Exhibit 8,p.49.
Marketing Expense. Marketing expenses include payroll and related expenses for the sales and
marketing staff, direct sales expenses, advertising and promotion, and travel expenses for the
sales staff. This account normally includes national advertising fees or assessments paid to a
hotel franchise company, plus cost of frequent guest stay programs. Marketing Expense is
estimated at 5.2o/o of Total Revenue based on the 2015 HOST Almanac. See Exhibit E,p. 49.
Property Operation and Maintenance. This category includes payroll and related expenses for
maintenance personnel, cost of materials and contract services related to repairing and
maintaining the building, electrical and mechanical equipment, elevators, HVAC equipment,
furniture, grounds and landscaping, painting and decorating. Property Operation and
ACTUAL BUSINESS PIAN Financial Performance
: 1,980
! 1,{30
i 72.2*
i tzrst__*.
i t420
I
65
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Maintenance Expenses (POME) are estimated at 4.3o/o of Total Revenue based on the 2015
HOST Almanac. See Exhibit 8,p.49.
Energy Costs. Energy costs include the cost of electricity, water, and sewer service. Utility
costs are estimated at3.9%o of Total Revenue based on the 2015 HOST Almanac. See Exhibit E,
p.49.
Insurance. Includes the cost of insuring the hotel building and contents against damage or
destruction by fire, weather, sprinkler leakage, plate glass breakage or any other cause. General
insurance costs, including premiums relating to liability, fidelity, and theft coverage should be
included in this account. Payroll related insurance (workers' compensation) is included in
employee benefits in the appropriate department to which the associated payroll is charged.
Insurance expense is estimated at I.4Yo of Total Revenue based on the 2015 HOST Almanac. ,See
Exhibit E,p.49.
Property Taxes. Typically include taxes on real estate, business and occupation, personal
property, utilities and other municipal taxes. Property Tax expense is estimated, at3.SYo based on
the 2015 HOST Almanac. See Exhibit 8,p.49.
Management Fee is estimated at 3.2o/o of total revenue based on the 2015 HOST Almanac. See
Exhibit 8,p.49.
6.2 Food Services
Earnings from food services are expected to increase through the first five years of operations.
The following table provides the Developer's earnings projections related to food services:
ACTUAL BUSINESS PLAN Financia! Performance 56
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
PROFIT AND IOSS FORECAST
FOOD SERVICES
Sales
Direct Costs
Credit Card Fees
Total Cost of Sales
Year 1
$3,243,122
$'1,203,415
$81,078
$1,284,493
Year 2
$3,729,591
$1,383,927
$93,240
$1,477,167
Year 3
$4,363,621
$1,619,194
$109,091
$1,728,285
Year 4
$5,149,073
$1,910,649
$128,727
$2,039,376
Year 5
$6,127,397
$2,273,673
$153,185
$2,426,959
Gross Margin
Gross Margin %
$1,958,630 52,252,424 52,635,336 $3,109,597
60.39% 65.370/o 65.410/o 65.410/o
$3,700,539
65.46%
Expenses
Payroll
Advertising / Marketing
Utilities
Liability lns
Shared Expenses
Legal fees
Computer/software
Accounting
Bank Service Charges
Telephone/Cell
License & Permits
Office Supplies
Cleaning Costs
Other Costs
TotalOperating Exp
$1,001,467
$97,931
$3s,346
$50,720
$456,014
$180
$3,600
$2,200
$600
$550
$5,400
$1,800
$1,800
$1,151,687
$112,621
$40,648
$58,328
$456,014
$207
$4,140
$2,530
$690
$633
$6,210
$2,070
$2,070
$1,347,474
$131,767
$47,558
$68,244
$456,014
$242
$4,844
$2,960
$807
$740
$7,266
$2,422
$2,422
$'1,590,019
$155,485
$56,1 19
$80,528
$456,014
$286
$s,716
$3,493
$953
$873
$8,574
$2,858
$2,858
$1,892,123
$185,027
$66,782
$e5,828
$456,014
$340
$6,802
$4,1s7
$1,134
$1,039
$10,202
$3,401
$3,401
st,657,609 st,837,848 s2,O72,760 s2,363,774 $2,726,249
EBITDA $3ot,ozt 54L4,s76 5s62,s76 Stqs,g2g $974,29,.
Food service revenues will come from sales at the following venues:
1. OlympicR&L
2. Halturay l#9
3. GolfCart
4. Gallery Bar
5. Bistro
6.3 Morino
Eamings from the marina are expected to increase through the first five years of operations. The
following table provides the Developer's earnings projections related to the marina:
ACTUAT BUSINESS PIAN Financia! Performance 67
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Marina Profit and Loss Projections
Year 1 Year 2 Year 3 Year 4
$610,322
$610,322
$701,870
$701,870
$821,188
$821,188
$969,002
$969,002
Year 5
$1,153,1 13
$1 ,l 53,1 13
Revenue
Sales
Tota! Revenue
Expenses
Payroll
Advertising / Marketing
Utilities
Liability lns
Shared Expenses
Credit Card Expense
Legal fees
Computer/software
Accounting
Bank Service Charges
Telephone/Cell
License & Permits
Office Supplies
Cleaning Costs
TotalOperating Exp
$285,019
$29,7s3
$35,346
$36,000
$159,370
$18,3'10
$180
$3,600
$2,200
$600
$550
$5,400
$1,800
$1,800
$579,928
$327,772
$34,216
$40,648
$41,400
$159,370
$21,056
$207
$4,140
$2,530
$690
$633
$6,210
$2,070
$2,070
$643,OL2
$383,493
$40,033
$47,5s8
$48,438
$159,370
$24,636
$242
$4,844
$2,960
$807
$740
$7,266
$2,422
$2,422
5725,231
$452,522
$47,239
$56,118
$57,157
$159,370
$29,070
$286
$5,716
$3,493
$953
$873
$8,s74
$2,858
$2,858
s827,O87
$s38,501
$s6,214
$66,781
$68,017
$159,370
$34,593
$340
$6,802
$4,157
$1,134
$'1,039
$10,202
$3,401
$3,401
s953,952
EBITDA $lo,lgc $58,858 $95,957 $141,915 stgg,tOt
Marina revenues will come from moorage and maintenance fees. The marina will offer moorage
at annual (average $300 per month), monthly (minimum $275 per month), and daily ($1.50 per
foot) rates. Maintenance fees are based on annual operating expenses for the marina and
adjusted for variance in the next year. The Developer expects to pay 3% in credit card fees and,
for the purposes of these projections, assumes that all marina sales will be by credit card.
6.4 Suiles
Earnings from suite sales are expected to increase through the first five years of operations. The
following table provides the Developer's earnings projections related to suite sales:
ACTUAL BUS!NESS PLAN Financial Performance 68
PLEASANT HARBOR MARINA AND GOIF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
PROFIT AND IOSS FORECAST
SUITES
Sales
Direct Costs
Credit Card Fees
Total Cost of Sales
Year 1
$13,857,480
$346,437
$346,437
Year 2
$15,936,102
$398,403
$398,403
Year 3
$18,645,239
$466,131
$466,131
Year 4
$22,001,382
$5s0,035
$550,035
Year 5
$26,181,645
$654,541
$654,541
Gross Margin
Gross Maroin %
s13,5U,013
97.5Oo/o
S1s,537,699
65.370/o
sl&179,108
65.41o/o
$21,451,349
65.41o/o
$2s,s27,Lo4
65.46%
Payroll
Advertising / Marketing
Laundry
Liability lns
Shared Expenses
Legal fees
Computer/software
Accounting
Bank Service Charges
Telephone/Cell
License & Permits
Office Supplies
Cleaning Costs
Other Costs
Total Operating Exp
$935,393
$675,552
$60,000
$5,000
$1,049,494
$180
$3,600
$2,200
$600
$550
$5,400
$1,800
$1,800
$0
s2,741,569
$982,163
$776,885
$61,200
$5,7s0
$1,049,494
$207
$4,140
$2,530
$690
$633
$6,210
$2,070
$2,070
$0
$2,894,O4t
$982,163
$908,9s5
$62,424
$6,728
$1,049,494
$242
$4,844
$2,960
$807
$740
$7,266
$2,422
$2,422
$0
53,o9r,,461
$982,163
$1,072,567
$63,672
$7,938
$1,049,494
$286
$5,716
$3,493
$e53
$873
$8,574
$2,858
$2,858
$o
33,20t,44s
$982,163
$1,276,355
$64,946
$9,447
$1,049,494
$340
$6,802
$4,157
$1,134
$1,039
$10,202
$3,401
$3,401
$0
S3,412,880
EBITDA Sto,t69,474 912,643,6s8 $Ls,L47,642 $18,249,903 $22,L,.4,224
6.5 Fomily Center
Eamings from the Family Center are expected to increase through the first five years of
operations. The following table provides the Developer's earnings projections related to the
Family Center:
ACTUAT BUSINESS PLAN Financial Performance
Expenses
69
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PROFIT AND IOSS FORECAST
FAMILY CENTER
Sales
Direct Costs
Credit Card Fees
Total Cost of Sales
Year 1
$1,887,750
$o
$47,194
$47,194
Year 2
$2,170,913
$0
$54,273
$54,273
Year 3
$2,539,968
$o
$63,49e
$63,499
Year 4
$2,997,162
$0
$74,929
$74,929
Year 5
$3,566,623
$o
$89,166
$89,166
Gross Margin
Gross Marqin %
s1,840,556 s2,1L6,64O s2,476,468 52,922,233 53,477,457
97.500/o 65.370/o 65.41% 65.410/o 65.460/0
Expenses
Payroll
Advertising / Marketing
Utilities
Liability lns
Shared Expenses
Legal fees
Computer/software
Accounting
Bank Service Charges
Telephone/Cell
License & Permits
Office Supplies
Cleaning Costs
Other Costs
TotalOperating Exp
$812,382.24
$92,028
$15,000
$50,000
$243,062
$180
$3,600
$2,200
$6oo
$550
$5,400
$1,800
$1,800
$0
st,229,602
$934,240
$105,832
$17,250
$57,500
$243,062
$207
$4,140
$2,530
$6e0
$633
$6,210
$2,070
$2,070
$0
51,376,433
$1,289,811
$146,112
$23,815
$79,38s
$243,062
$286
$5,716
$3,493
$953
$873
$8,574
$2,8s8
$2,858
$0
St,gol,l94
$1,093,060
$123,823
$20,183
$67,275
$243,062
$242
$4,844
$2,960
$807
$740
$7,266
$2,422
$2,422
$0
$1,s69,106
$1,534,875
$173,873
$28,340
$94,468
$243,062
$340
$6,802
$4,157
$1,134
$1,039
$10,202
$3,401
$3,401
$0
s2,105,093
EBITDA $611,954 $740,206 sgOZ,geZ s1,114,438 st,372,364
6.6 Office Renlol
Earnings from office rentals are expected to increase through the first five years of operations
The following table provides the Developer's earnings projections related to office rentals:
ACTUAL BUSINESS PLAN Financial Performance 70
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
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PROFIT AND IOSS FORECAST
OFFICES
Sales
Direct Costs
Credit Card Fees
Total Cost of Sales
Year 1
$97,600
$0
$2,440
$2.440
Year 2
$112,240
$o
$2,806
$2,806
Year 3
$129,665
$0
$3,242
$3,242
Year 4
$150,148
$0
$3,754
$3,7il
Year 5
$174,296
$0
$4,357
$4,357
Gross Margln
Gross Margin %
S9s,160
97.50o/o
s109,434
65.370/o
s!26,423
65.41o/o
$tcs,ggt
65.4'.\o/o
s169,938
65.46Yo
Expenses
Payroll
Liability lns
Shared Expenses
Legal fees
Computer/software
Accounting
Bank Service Charges
Telephone/Cell
License & Permits
Office Supplies
Cleaning Costs
Other Costs
Total Operating Exp
$35,649
$7,186
$10,000
$180
$3,600
$s00
$600
$s50
$2,000
$1,800
$1,800
$0
$el,gos
$40,996
$8,264
$10,000
$207
$4,140
$s7s
$690
$633
$2,300
$2,070
$2,070
$0
571,,94s
$47,966
$9,669
$10,000
$242
$4,844
$673
$807
$740
$2,691
$2,422
$2,422
$0
Sgz,t75
$56,600
$11,409
$10,000
$286
$5,716
$794
$953
$873
$3,175
$2,8s8
$2,858
$o
$95,521
$67,3s3
$13,577
$10,000
$340
$6,802
$945
$1,134
$1,039
$3,779
$3,401
$3,401
$o
Sttt,tto
EBITDA s31,295 s37,489 s43,948 $SO,gZl $Sa,teg
ACTUAL BUSINESS PLAN Financial Performance 7L
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
7,0 MARKET ANALYSIS
7.1 lndustry Activities
NAICS 2361 Residential Building Construction
This industry group comprises establishments primarily responsible for the construction or
remodeling and renovation of single-family and multifamily residential buildings. Included in
this industry are residential housing general contactors (i.e., new construction, remodeling or
renovating existing residential structures), operative builders and remodelers of residential
structures, residential project construction management firms, and residential design-build firms.
NAICS 2362 Nonresidential Buitding Construction
This industry group comprises establishments primarily responsible for the construction
(including new work, additions, alterations, maintenance, and repairs) of nonresidential
buildings. This industry group includes nonresidential general contractors, nonresidential for-sale
builders, nonresidential design-build firms, and nonresidential project construction management
firms.
NAICS 4232 Furniture and Home Furnishing Merchant Wholesalers
This NAICS Industry Group includes establishments classified in the following NAICS
Industries: 42321, Furniture Merchant Wholesalers; and 42322, Home Furnishing Merchant
Wholesalers.
NAICS 4234 Professional and
Wholesalers
Commercial Equipment and Supplies Merchant
This industry group comprises establishments primarily engaged in the merchant wholesale
distribution of photographic equipment and supplies; office, computer, and computer peripheral
equipment; and medical, dental, hospital, ophthalmic, and other commercial and professional
equipment and supplies.
NAICS 4236 Holsehold Appliances and Electrical and Electronic Goods Merchant
Wholesalers
ACTUAI. BUSINESS PLAN Market Analysis 72
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This NAICS Industry Group comprises establishments classified in the following NAICS
Industries: 42361, Electrical Apparatus and Equipment, Wiring Supplies, and Related Equipment
Merchant Wholesalers; 42362, Electrical and Electronic Appliance, Television, and Radio Set
Merchant Wholesalers; and 42369, Other Electronic Parts and Equipment Merchant Wholesalers.
NAICS 5413 Architectural, Engineering, and Related Services
This industry group comprises establishments primarily engaged in providing architectural,
engineering and related services, such as structure design, drafting, building inspection,
landscape design, surveying and mapping, laboratory and on-site testing, and interior, industrial,
graphic and other specialized design services.
NAICS 72ll - Traveler Accommodations
This industry comprises establishments primarily engaged in providing short-term lodging in
facilities known as hotels, motor hotels, resort hotels, and motels. The establishments in this
industry may offer food and beverage services, recreational services, conference rooms and
convention services, laundry services, parking, and other services. This industry comprises
establishments primarily engaged in providing short-term lodging in hotel facilities with a casino
on the premises. The casino on premises includes table wagering games and may include other
gambling activities, such as slot machines and sports betting. These establishments generally
offer a range of services and amenities, such as food and beverage services, entertainment, valet
parking, swimming pools, and conference and convention facilities. This US industry comprises
establishments primarily engaged in providing short-term lodging in facilities known as bed-and-
breakfast inns. These establishments provide short-term lodging in private homes or small
buildings converted for this purpose. Bed-and-breakfast inns are characterized by a highly
personalized service and inclusion of a full breakfast in the room rate.
NAICS 713930 - Marinas
This industry comprises establishments, commonly known as marinas, engaged in operating
docking and/or storage facilities for pleasure craft owners, with or without one or more related
activities, such as retailing fuel and marine supplies; and repairing, maintaioiog, or renting
pleasure boats.
ACTUAT BUS!NESS PtAN Market Analysis E
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
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7.2 Troveler Accommodolions (NAICS 7211)
7.2.1 U.S. lnduslry Overview
The following analysis of the U.S. Hotel Industry consists of excerpts from the February 2014
Indrrsfrv Rennrt 7?1 I I flnfels and IVfotels in the U.S.published by IBISWorld.
The Hotels and Motels industry is undergoing a recovery following declines
sustained during the recession. The industry is highly susceptible to changes in
the global economic environment, as exemplified by a 7.60/o drop in revenue in
2009 caused by decreases in travel spending, reduced corporate profit and
subdued consumer spending. The industry began to recover in 2010 as the
economy improved and domestic and intemational tavel rates increased. As a
result, the Hotels and Motels industry has ou@erformed the broader economy
over the past five years, driven by a combination of demand from leisure and
business travelers, and intemational tourists. Over the five years to 2014,
IBISWorld expects industry revenue to grow atanaverage annual rate of 2.5Yo.ln
2014, industry revenue is expected to jump 2.3yo, as consumer confidence and
spending spike, raising revenue to $144.4 billion.
Many operators responded to reduced demand during the recession by engaging
in price wars and slashing room rates or offering additional perks and services as
part of packaged deals. During the recession, tourists were less likely to spend on
nonessential travel items and hunted for bargains. However, as the economy
improved, demand for hotel rooms has outpaced supply, leading to higher room
rates (commonly referred to as RevPAR) and lifting industry revenue. According
to Lodging Econometrics, in 201l, the industry hit a low point in terms of hotel
development, with only 346 new openings. The resulting undersupply of hotel
rooms has enabled hoteliers to charge more and operate with lower vacancy rates.
As a result, average industry profit margins, measured as earnings before interest
and taxes, have improved in line with the long-term average.
Over the five years to Z0l4,IBISWorld forecasts that the industry will continue to
expand, with particularly strong growth in the extended-stay hotels, boutique
hotels, spa and health retreats and resorts segments. As demand picks up, the
number of industry employees is projected to rise at an annualized rate of 3.3%o
over the five-year period to 1.8 million workers. Industry players are also
expected to continue expanding abroad to emerging economies such as Asia,
Eastern Europe and South America. These foreign markets will somewhat detract
ACTUAT BUSINESS PIAN Market Analysis 74
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
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from domestic investment, as they offer higher growth prospects. Consequently,
revenue is projected to increase at an average annual rate of 3.0o/o to $167.0
billion over the five years to 2019.
IBISWorld's February 2014 Industry Report includes the following performance
and outlook statistics:
l(cy Stotlstlcs
Snoprhot
Rancour Annuol Groxrth 09-1(Aoauol 6rowth 14-19
$1t A.Abn z.S% 3.0%
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The industry's primary products and services are as follows:
The Supply Chain
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the US
ACTUAT BUSINESS PTAN Market Analysis
,
75
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Products ond scrvlcos rcAmentnUon {2014}
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The following statistics define the industry structure:
lndustry Struc'ture
tifs C],ch $age I,iatrrre ReouldionLe\al Medium
Revenue \ddility llerliur; Tschnology Chango Lledium
Cafld htensity Llediurn Baricn to Eney i{edium
hdrstry Assistarrce Lorv lndrstrySobdization lledium
Concerdrstion Lelgl Mediurn CompetitionLe{ol Hlgh
Trends in domestic travel, especially business tavel, and the total nights spent
away from home directly affect demand for accommodation. As the number of
trips made by US citizens rises, demand for hotels and motels to house them
increases. The number of domestic trips is expected to increase slowly in 2014,
presenting a potential opportunity for the industry.
ACTUAT BUS!NESS PLAN Market Analysis d
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777
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
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The Hotels and Motels industry has fought back strongly since the recession. At
the onset of the economic downturn, all forms of travel accommodation faced
decreased demand as people became more concemed about their furances and cut
back on luxuries such as travel. ln 2009, as the recession deepened and
unemployment rose, a 5.lo/o decline in domestic travel accompaniedby a 5.2%
fall in international travel to the United States severely cut into industry demand.
Since destination hotels and motels rely heavily on domestic and foreign tourists,
the decline in domestic and intemational travel hurt the indusbry's bottom line.
However, 2010 marked a reversal of the industry's fortunes and, consequently,
revenue is expected to increase at an average annual rate of 2.5o/o over the five
years to 2014. Over this period, arrivals from abroad have spiked at an average
rate of 5.6%o per year, while domestic travel rates have increased an annualized
1.9%o over the same period. The infusion of tourist dollars is expected to continue
into 2014, benefiting hotels and motels and enabling them to increase room rates,
which will cause revenue to grow 2.3% in20l4 to $144.4 billion.
The industry is particularly sensitive to macroeconomic factors, geopolitical
instability and actual or threatened terrorism, all of which negatively affects
people's tendency to travel. Due to the prevalence of these factors over the period,
the industry heavily tumbled during the recession. However, as the economy has
improved over the past five years in line with incomes, corporate profit,
employment and consumer confidence, so have travel rates and, therefore,
demand for hotels and motels. The broader tourism sector has reestablished itself
as one of the economy's fastest-growing sectors, and industries with exposure to
tourism, such as the Hotels and Motels industry, have fared particularly well over
the past five years.
ACTUAT BUSINESS PIAN Market Analysis 77
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Technological innovations have increased labor productivity, lowered labor costs
and enhanced customer service within the Hotels and Motels industry over the
past five years. The industry has especially benefited from the proliferation of the
internet, which enables operators to gather information, manage reservations and
remotely purchase supplies, thereby lowering overall costs. The information
gathered by operators using internet technology also allows them to send better-
targeted promotions via e-mail, text message or social media. The internet has
allowed major hotel chains to better and more frequently communicate with
members of guest rewards programs, which helps them athact and hold frequent
travelers. Also, most operators now allocate a portion of their unsold rooms to
websites, such as Lastminute.com and Priceline.com, which increases their
occupancy rates and generates additional revenue. Bookings made through online
travel agents accounted for 14.9o/o of all hotel bookings in 20t3, according to
research company TravelClick, compared with 27.lYo of bookings made directly
through a hotel's dedicated website.
Major operators, such as Starwood Hotels and Resorts Worldwide, have also
formed real estate investment trusts to raise funds. Investment in condominium
hotels was widespread until the recession, when investment funds dried up as a
result of the subprime mortgage crisis. Nevertheless, major operators restructured
operations away from direct hotel property ownership to solely provide specialist
services in hotel management. While overall revenue from hotel management is
lower, such services have provided an opportunity to generate higher profit
margins due to the elimination of many property-related costs. Nevertheless, the
industry is still largely property-based. Therefore, owners are subject to changes
in general property value cycles and economic conditions and to any localized
imbalances in hotel room demand and supply influences.
Profit margins have increased over the past five years as hotels and motels have
increased their room rates to supplement the fewer new rooms on the market. To
attract guests during the recession, hotels slashed room rates, which caused profit
margins to sink. However, as demand has picked up over the past five years,
operators have increased their room rates. Hotels have also been hiring with
increasing intensity meet guests' higher expectations of service. Industry
employment has grown slowly but steadily by 1.4% per year on average to 1.5
million workers. A large proportion of industry's employee's work on a casual or
part-time basis, a tend that has increased over the past five years as operators
have sort to control costs. Casual employees can work split shifts to cover peak
ACTUAT BUSINESS PIAN Market Analysis 78
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
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periods and special tourist events. Full-time employees, on the other hand, add to
operators' fixed costs. Due to resurgent demand and widespread cost cutting,
profit margins have increased in the years since the recession to represent an
estimated 17.0% of indusfiry revenue.
Revenue Growth
tGar
2000
2001
2002
2{,03
zoc4
2005
mw
20ot
2008
2009
2010
m-11
2012
2013
zsl1
Rerenue 3 million
123.209.5
119,061.9
116,394.2
't18,957.1
125.262.7
125,048.9
127,689.7
137,-209.1
137,933.9
127,718.3
*Groudr
130,593.8
1_35,689.9
't37.531.4
141,177.5
1U.U2.4
0.0
-3.4
-2.3
2.2
5.3
-0.2
2.1
7.5
0.5
-7.1
2.3
3.9
1.4
2.7
2.3
The Hotels and Motels industry has surpassed its prerecession high and is set for
another five years of consistent growth. The industry will expand as a sense of
normality returns to the global economy, and tourism and business travel increase
as a result of improved consumer confidence. Over the five years to 2019,
IBISWorld forecasts that revenue will increase at an average annual rate of 3.0%o
to $167.0 billion.
Over the next five years, the industry will benefit from improvements in the
domestic and global economy as unemployment rates decline and consumers
begin to spend more freely, particularly on recreational activities such as
vacations and traveling. Consumer spending is expected to increase over the five
years to 2019 at an average annual rate of 3.0yo, including a rise of 3.0% in 2015
alone. Business spending is also forecast to increase in line with rising corporate
profit, which will contribute to growth in demand for hotels and motels from the
all-important corporate sector. Corporate profit is projected to rise 3.9o/o per year,
on average, over the next five years to reach $2.6 trillion, a level never before
reached in the United States.
ACTUAL BUSINESS PLAN Market Analysis 79
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With consumers enjoying larger incomes and businesses replenishing their
budgets, travel spending is projected to increase over the next five years. In 2015,
intemational arrivals are projected to rise 3.7yo, while domestic travel is expected
to grow 4.2% n the same year. IBISWorld expects that these rates will remain
steady over the next five years, with international arrivals and domestic travel
growing at annualized rates of 3.60/o and 3.2o/o, respectively. With a greater
number of tourists needing accommodation, hotels and motels are expected to
benefit from an influx of tourist dollars and business travel.
Over the next five years, investnent in new hotel and motel rooms will gradually
accelerate due to a sustained rise in demand for tourist accommodation.
Investment will likely be heavier in the first part of the five-year period, as
operators compensate for the dramatic decline in investment that occurred in the
years srrrounding the recession. The low point in hotel development came in
2011, and research firm Lodging Econometrics expects both the number of new
hotels and the number of new rooms to increase substantially in 20t4 and 2015.
IBISWorld expects the number of industry establishments will increase at an
annualized rate of 0.4Yoto 51.,222. This new supply of rooms will temper industry
revenue growth to some degree, as existing operators will be hesitant to increase
room rates for fear of losing a competitive edge.
Operators in the Hotels and Motels industry are expected to increasingly focus on
opportunities abroad to satis$ demand in intemational travel markets, including
Russia, Easter Europe, the Middle East, Latin America, Asia, China and India.
According to the United Nations World Tourism Organization's (UNWTO)
Tourism Towards 2030, international tourist arrivals in emerging economies, such
as Asia, Latin America, Central and Eastern Europe, Eastem Mediterranean
Europe, the Middle East and Africa, will grow at double the pace of advanced
economy destinations. The most robust growth is expected in Asia and Oceania,
where arrivals are forecast to increase at an annualized rate of 4.9Yo through 2030.
The Middle East and Africa are also forecast to more than double their arrivals
over this period. Overall, international arrivals in emerging economies are
expected to surpass arrivals in advanced economies by 2015. In 2030, 57.0%o of
international arrivals will be in emerging economy destinations, as opposed to
30.0% in 1980, and 43.0% in advanced economy destinations, as opposed to
70.0% in 1980. As a result, intemational hotel chains are projected to gain the
majority of their revenue $owth from emerging economies, meaning investment
will shift from the United States towards these new regions. This trend will also
have ramifications for operators in the domestic tourism industry, as they will
ACTUAT BUSINESS PTAN Market Analysis 80
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face greater competition in an increasingly competitive global tourism industry,
putting pressure on revenue growth.
Industry profit margins are also anticipated to grow over the next five years in
response to increasing demand for travel accommodation. The continued growth
of higher-margin specialty operations, such as extended-stay boutique hotels, spa
and health retreats, and resorts, are expected to boost improvements in
profitability. On the other hand, the low-cost hotel and motel segment is also
anticipated to expand and face more intense price competition on room rates. This
factor may place some pressure on operators to reduce costs in order to remain
competitive. Employment will increase over the next five years in response to
increased demand for accommodation, although employment will grow at a
slower rate than revenue. Operators will hire more workers to meet guests'
expectations for service, but will continue to monitor costs closely. Over the next
five years, employment is projected to grow at an average annual rate of 3.3%o to
about 1.8 million people.
Revenue Outloolr
Yerr
2015
2016
2017
2018
2019
2020
Ralenue 3 millbn
147,620 1
154,558.3
151,358.9
165,sil.2
167.W.2
1n,22]0_3
Grw& tl
2_2
4.4
2.6
0.9
2.5
According to IBISWorld research the following success factors represent the mcst
important for hotel operators to optimize profitability during the expected
recovery:
Access to multi-skilled and flexible workforce: Access to multi-
skilled and well-trained staff is vital.
Being part of a franchising chain: There are many benefits to
being part ofa chain or ofa franchised group.
Receiving the benefit of word-of-mouth recommendations:
Good word-of-mouth recommendations are quite often the most
successful promotional tool in the hospitality industry.
I
2
3.
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Proximity to key markets: The location, facilities and services
offered to the identified market that use the accommodation
facility are very important.
Ability to quickly adopt new technology: It is essential to be
aware of the new technology available in this industry for
inforrnation, promotions, bookings and general management
conhol systems.
Ability to control stock on hand: Understanding the various
room stock/ availability and tariff mechanisms used in this industry
is important.
7.2.2 Locql Morkel
The Developer has engaged Hospitality Advisors Group to perform a market analysis for the
Project. This Section consists of excerpts from the relevant portions of Hospitality Advisors
Group's report, dated April 17,2015. The full report is attached as Exhibit D.
Hospitality Advisors Group recognizes that the Olympic Peninsula, encompassing
3,600 square miles, 40o/o of which is the Olympic National Park, is a unique
leisure destination. There are 400-miles of saltwater coastline, the Olympic
Mountains, a temperate rainforest and the 60-mile glacial fiord of the Hood Canal.
Over 3,000,000 people visit the Peninsula annually.
Tourism contributed $14 Billion to Washington State's economy in20t4, making
it one of the state's largest 'export' industries. Unfortunately, the Hood Canal area
in Central and South Jefferson County saw very little of this revenue or tourism-
supported employment, due to the severe lack of accommodations and amenities
to attract the leisure visitor.
The Statesman Group intends for Pleasant Harbor to be a major economic driver
for Central and South Jefferson County, and to bring tourist dollars and
employment to the Hood Canal region. In support of that effort, Hospitality
Advisors Group identified and inspected competitive resort properties, evaluated
their respective accommodation product and amenities, and determined their price
/ value relationship.
Based on this review, Hospitality Advisors Group has determined:
4.
5
6
ACTUAL BUSINESS PLAN Market Analysis E
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
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I.Pleasant Harbor will be a first-choice travel destination for Olympic
Peninsula visitors seeking an amenity-rich year-round vacation
experience.
II.Pleasant Harbor represents a high value proposition based on its
suite style of accommodations, multiple dining venues, range of
sport and recreation activities, and the proposed rate structure. In
fact, Hospitality Advisors Group considers the pricing sfucture, in
current dollars, to be conservative, and sees the opportunity for a
higher pricing structure post-opening.
m. Pleasant Harbor will compete aggressively in the corporate meeting
and social event markets with its Conference Center and Wedding
Chapel, and with its extensive resort amenities.
IV Based on the ease of accessibility and the year-round nature of the
resort, Pleasant Harbor is positioned, upon stabilization, to exceed
the 59o/o annual transient occupancy posted by the Competitive Set.
V Based on an earlier Hospitality Advisors Group study, Pleasant
Harbor will generate at least 225 fuIl-time employment positions.
Pleasant Harbor
Competitive Property Matrix
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ACTUAT BUSINESS PIAN Market Analysis 83
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Notes to Competitive Set Matrix
Competitive Set
The first six competitive properties were selected for their location on the
Olympic Peninsula / Puget Sound, and their position as upscale full service lodges
and resorts serving the leisure and conference markets. Both of these travel
segments are attracted to the unique beauty of the Olympic Peninsula, which
offers visitors the opportunity to disconnect from the modern world.
The last two properties, the Woodmark Hotel and Willows Lodge, are included
based on their remote settings, albeit west of Seattle, and for the fact that they
report monthly occupancy and ADR to Smith Travel Research, which is discussed
under a separate section of this report. Although these two properties are not on
the Olympic Peninsula, they athact a similar guest profile. The Woodmark is on
Lake Washington, and Willows Lodge is at the threshold of the Woodinville
Wine Country. Both properties are managed by MTM Management, which also
manages the Alderbrook Resort.
Total Rental Units
A Rental Unit serves the short-term transient market, and is a singular commodity
regardless of its configuration. It may be a conventional bed-and-bath hotel room,
or a multi-room suite or cottage with parlor, one or more bedrooms, and perhaps a
kitchen. In the latter case, the suite or cottage cannot be divided into smaller rental
units.
Standard Guestrooms
The guestroom count is a subset of Total Rental Units that only includes
conventional bed-and-bath hotel rooms.
1B Suites / Cottages
These rental units have a parlor / living room, a single private bedroom, and one
or two bathrooms. In some instances, the parlor may have a convertible sofa bed
to accommodate an additional two people. These units may be Suites located
within a Hotel or Lodge, or free standing Cottages that are part of a resort.
ACTUAL BUSINESS PLAN Market Analysis 84
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
These rental units have a parlor / living room, two bathrooms, and two private
bedrooms that are integral to the suite or cottage and cannot be rented separately.
The case in which one of the bedrooms can be locked off and rented separately is
counted as a lB Suite and a Standard Guestroom.
High Season Rates
It was determined that the selected properties vary in their respective calendar
definition of High Season, but in all cases High Season Rates did apply to June,
July and August, which is the time period utilized in the Matrix for comparison
purposes.
The rate range for each property was determined by testing an availability pattern
(ten weekday and weekend dates, excluding holidays) throughout the stated three-
month period. The date requests were entered into the booking engine on the
respective Website of each property. Discounted rates (i.e. AAA, Senior, etc) and
package rates (e.g. the quoted rate contains non-guestroom components) were
excluded. The hospitality industry would define the quoted rate range as Rack
Rates.
Eood & Beversse lu4ets
The number of distinct F&B facilities available to the transient guests.
Conference Center SF
The aggregate net square feet of meeting and function space is listed for each
property. The Semiahmoo Resort also has a7,200 SF Exhibition Hall.
Spe
Spa facilities at the listed properties are typically available to local patronage as
well as registered guests. At Port Ludow, the spa is independent of the Resort;
however, it is adjacent to the hotel, and will even offer treatments in the
guestrooms.
ACTUAT BUSINESS PIAN Market Analysis
28 Suites / Cottages
85
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Pool
Cool temperatures, even in the summer months, make indoor pools quite popular.
Pleasant Harbor has two pools: the Maritime Village pool is outdoor; the second
one at Davenport Center, like the pool at Semiahmoo, is indoor / outdoor in that
one can enter the pool while indoors, and then swim to an open-air area.
Golf
The nine hole public and private course can be played twice for a total of 18
holes. There are also three training holes for Family Fun and teaching children
the game of golf. Other course referenced near Shelton and Woodmark Hotel are
not immediately adjacent to the properties, but in both cases they are only I hour
distance.
Competitive Set Location Map
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Sponsored by Puget Sound RC, LLC
Distance and Driving Time from
Seattle International Airport (SeaTac)
Miles Time
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Harbor
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ACTUAT BUSINESS PLAN Market Analysis 87
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Sound RC, LLC
Description of Competitive Set Properties
Pleasant Harbor
Pleasant Harbor is sited on the Hood Canal immediately adjacent to the Olympic
National Park. The resort will enjoy a pristine setting and view. Brinnon WA,
population 900 is three miles from Pleasant Harbor. There are several trailheads
into the Park within a few miles of Pleasant Harbor. Quite surprisingly, some of
the best SCUBA diving in Puget Sound is in the Hood Canal just off Pleasant
Harbor.
Except for the existing 296-slip marina, Pleasant Harbor will be 100% new
construction on 252 acres, which will have only a l2o/o impervious area. The
transient / residential resort will be developed in four 30-month phases (see
Project Description and Exhibit III), and will comprise:
66 One-bedroom Maritime Village Suites (with Condo-Tel option)
o 'Condo-Tel' is shorthand for Hotel Condominium, whereby the units
are sold to third parties under a condominium regime. These units
remain in the transient rental inventory, but the purchasers may use
them periodically as vacation homes. Currently, the Statesman Group
intends to retain the Maritime and Resort Terrace under resort
ownership; however, it retains the right to sell the units as Condo-Tel
units.
ACTUAT BUSINESS PI.AN Market Analysis
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479 One and trvo-bedroom Resort Terrace Suites (with Condo-Tel option)
292 Two and three-bedroom Sea View Villa residential units targeted to the
senior retirement market
296-slip Marina
9-18 Hole par-72 Golf Course with Pro Shop
4 Restaurant Venues with various themes and menu concepts
Spa & Health Center, including convalescent rejuvenation
Maritime Village
66 Suites (referenced separately above)
Family Fun Center -
o Indoor Bungee Jumping
o Playhouse with slide
o American Ninja challenge center
o Outdoor Tree-Topper adventure, Zip Lne through openings in the
trees
a Yacht Club and Yacht Sales
a Walk-in Health Center
Hair and Nail Salon
a Real Estate Rental and Sales Office
a Conference Center
Wedding Chapel
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ACTUAI BUSINESS PLAN Market Analysis
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89
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
ACTUAT BUSINESS PLAN Market Analysis 90
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
Alderbrook Resort
Alderbrook , founded in 1913 and located at the foot of Hood Canal, is the closest
competitive property to Pleasant Harbor. At its inception, it was unique to the
Pacific Northwest. No roads existed, so visitors arrived by steamer from Seattle.
Accommodations were tents heated by wood-burning stoves. After World War II,
the tents were replaced by a lodge building and twenty-one cottages.
In 2001, Alderbrook was purchased and repositioned as a modern, albeit rustic,
resort. The lodge and cottages (five are now privately owned) were extensively
remodeled, conference facilities were built, and amenities, such as a spa and
waterfront pool, were added. A retirement and vacation home community, which
includes a 6,338-yard golf course, has grown up around the resort.
The 7l-acre property comprises:
77 Guestrooms in the Lodge
15 Two-bedroom Cottages * I One-bedroom Cottage
l8-Hole Golf Course (owned by the Alderbrook Homeowner's Assoc.)
1,500 LF Dock (no permanent moorings)
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are in Union WA, which is 8.5 miles from the resort)
Spa
a Conference Center
Kalaloch Lodee
The Quinault Indians first called this coastal area "Kalaloch" or "good place to
land". The lodge and cottages are the only guest accommodations within the
Olympic National Park to directly overlook the Pacific Ocean. Unfortunately, the
beach is more mud than sand, and it is densely strewn with large driftwood.
The property, privately developed in 1925, was purchased by the National Park
Service in 1978, and operates under a concession contact. The Lodge is a base
camp for exploring the surrounding Park area: Ranger Programs, Whale
Watching, Fishing and Clamming, Hiking, and Mountain Biking. Even though the
property is quite dated, it receives very good guest reviews.
The 4O-acre coastal plot comprises:
38 Guestrooms in the Lodge and Seacrest House
26 Studio, One and Two-Bedroom Cabins with kitchens and fireplaces
I Restaurant
Outdoor Wedding Venues
Gift Shop
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ACTUAT BUSINESS PLAN Market Analysis
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a General Store with groceries and hiking provisions
I Restaurant (a highly rated seafood restaurant is located within I mile)
Lake Quinault Lodge
Lake Quinault Lodge, designed in a Rustic Colonial Revival style, openedin 1926
and was named to the National Register of Historic Places in 1998.
The signature feature of the Lodge is its wood-beamed Lobby with a large
fireplace flanked by tall windows overlooking Lake Quinault. Most guestrooms
are rather spacious considering their vintage, although the bathrooms are quite
small. Lodge guests can take interpretive tours of Lake Quinault and the
surrounding Rainforest. Hiking and biking trails are at the doorstep of the Lodge.
The 3-arce property comprises:
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o Water Sports (kayaks, skiing)
ACTUAL BUSINESS PIAN Market Analysis
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PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored hy Puget Sound RC, LLC
1,450 SF of Meeting and Private Dining Space
l3 One and trvo-bedroom Singer Cottages
4 One and two-bedroom Roosevelt Fireplace Cabins
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Lake Crescent Lodge
Lake Crescent Lodge, designed in the Arts and Craft Style, opened in 1915 as
Singer's Tavern. Throughout the following three decades, there were
modifications and additions, including four cabins with fireplaces and
kitchenettes. The comfortably spacious guestrooms underscore an escape from the
modern lifestyle by eschewing televisions, telephones, and Wi-Fi. Boating, and
hiking to Marymere Falls and Pyramid Mountain, are popular guest activities.
The Lodge is open May through December; the Roosevelt Cottages remain open
on weekends throughout the winter season.
The 3-acre property comprises:
38 Lodge Guestroomsa
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ACTUAL BUSINESS PLAN Market Analysis
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Weddings staged in the meadow overlooking Lake Crescent
Water Sports (boating and kayaking)
I Restaurant * several acclaimed restaurants in the town of Port Ludlow
Spa services from adjacent independent spa
l8-Hole Golf Course (l% miles away at Port Ludlow Golf Club)
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Port Ludlow Resort
The modern 37-room Port Ludlow Resort, designed in the Arts and Craft Style,
sits on a spit of land protruding into Puget Sound. The town of Port Ludlow is on
the far side of the Bay, about six miles from the Resort.
Although the property is relatively small, its amenities and quality dining attracts
a large number of corporate meetings and destination weddings. These groups
often reserve the entire facility for their events.
The Resort comprises:
37 Guestrooms with gas fireplaces and jetted soaking tubsa
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300-Slip Marina
a 2,650 SF of Meeting and Function Space
Semiahmoo Resort
The Skagit lndians named the site "Semiahmoo", or "half moon", which
accurately describes the crescent spit of land at the mouth of Drayton Harbor on
the northern part of Puget Sound. The resort opened in 1994, then closed briefly
for renovations after being purchased by a Seattle business group in20l2.
Semiahmoo Resort is a mid-market family and goup oriented facility. The 15-
acre site comprises:
212 Guestrooms, some with wood-burning fireplaces and balconies
Indoor / outdoor swimming pool
Spa & Fitness Center
2 Outdoor Tennis Courts
o 2 Indoor Tennis Courts
o I Racquetball Court
300-Slip Marina (kayak rentals)
2 l8-Hole Golf Courses (public with hotel guest access).
' Semiahmoo Golf & Country Club is 3.2 miles from the resort;. Loomis Trail Golf Club is 7.6 miles
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ACTUAL BUSINESS PLAN Market Analysis
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PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
2 Restaurants * a restaurant at each golf clubhouse
15,100 SF Conference Center
o 7,200 SF Exhibit Hall (doubles as lndoor Tennis facility)
Kids Kamp: large privately operated complex at the Resort entry for local
family enrollment with separate programs for toddlers, pre-school, and grades
1-6. Drop-in rate for children staying at the Resort is $10 per hour (minimum
3 hours).
Woodmark Hotel
Although the Woodmark Hotel is an urban property, it is part of the competitive
set because it effectively turns its back on the City of Kirkland and focuses on its
lakefront setting flanked by a marina and shoreline parks. Additionally, the hotel
is managed by the same company as the Alderbrook Resort; and reports its
monthly average rate and occupancy to Smith Travel Research, the importance of
which is explained in the following section of this report.
The property focuses on the leisure and group market segments, and blends the
two as a very popular destination-wedding venue.
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ACTUAT BUSINESS PIAN Market Analysis
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PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
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The Woodmark Hotel comprises:
a 100 Gueshooms
2 Restaurants * numerous acclaimed restaurants within walking distance
Spa
104-Slip Marina
6,350 SF Meeting & Function Space (most of the function rooms open onto
patios and terraces, which make them idea for social events)
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Willows Resort
The Willows Lodge, designed in the Craftsman Style, is sited on the banks of the
Sammamish River east of Seattle at the gateway to the Woodinville Wine
Country. Although not on the Olympic Peninsula or Puget Sound, the Lodge is
part of the competitive set because it has a resort setting and draws on the same
customer base as the other properties in the set. Like the Woodlark Hotel
described above, it is managed by the same company that manages the
Alderbrook Resort; and reports its monthly average rate and occupancy to Smith
Travel Research, the importance of which is explained in the following section of
this report.
The Lodge, considered a culinary destination, focuses on the leisure and corporate
meeting markets.
ACTUAL BUSINESS PIAN Market Analysis
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98
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
The S-acre property comprises:
84 Guestrooms, all with stone fireplaces and soaking tubsa
2 Restaurants
o The highly acclaimed Barking Frog
o S-Diamond Herb Farm Restaurant
o Numerous fine-dining opportunities within minutes of the Lodge
Spa & Fitness Center
Garden Wedding venue with Mt. Rainer as a backdrop
5,000 SF of Meeting & Banquet Space
Guest Activities focus on tours of the Woodinville Wine Counhy, currently
home to over 50 wineries and tasting rooms. Also, guests can walk out the
backdoor to visit Red Hook Brewery, one of the country's most highly
regarded microbrews.
7.3 Morketing Sholegy
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ACTUAT BUSINESS PLAN Market Analysis
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99
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
8.0 EMPIOYMENT
8.1 Torgeted Employmenl Areo
Under the EB-5 immigrant investor program, an alien can become eligible to obtain U.S.
permanent resident status by investing either US $1 million or US $500,000 in a new commercial
enterprise in the U.S. To participate in the immigrant investor progrcm through investing the
lower US $500,000 amount, the alien must invest his/trer capital funds into a geographic area
that qualifies as a Targeted Employment Area ("TEA").
Section 203(bX5XB) of the Immigration and Nationality Act defines a TEA as an area that, at
the time of investment, is a rural area or an area that has experienced an unemployment rate that
is at least 150 percent of the national average unemployment rate.
Specific to the Project, which is located within the boundary of the regional center's USCN-
pending geographic desiguation, the minimum threshold for an individual alien investor's capital
investment into a new commercial enterprise will be $500,000 if the investment is made in a
TEA, or $1,000,000 if outside of a TEA.
8.2 Resort Slqffing
The Developer plans to hire the equivalent of 65 full-time employees to operate the departments
of the resort created by Phase I construction activities. The stafFrng requirements of each
department are set forth in the table below.
ACTUAT BUSINESS PLAN Employment 100
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
PTEASANT HARBOR RESORT
STAFFING REQUIREMENTS BY DEPARTMENT
FOOD AND BEVERAGE - GALTEY BISTRO
Manager
Servers/Hosts
Cooks
Bartenders
MARINA 8
Manager L
Dock master (Customer Service/Administrative Support) 1
Deckhands/Attendants 5
Mechanic L
ACCOMMODATIONS . SUITES
Housekeeping Supervisor/l nspector/Common Areas
Housekeepers
Laundry Attendant
FAMTTY FUN CENTER WITH F/B OUTTETS
Recreation Director
Supervisors
lnstructors
Attendants
Cooks - Sports Bar and Cafe
Servers/Hosts
Bartenders
RETAIT
Retail Manager
Clerks
Barista
ADMINISTRATION - OFFICE
Ad ministrative Assista nt
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PatrolOfficers
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ACTUAL BUSINESS PLAN Employment @
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
The Developer has obtained a report from Hospitality Advisors Group, titled, Analysis of
Employment for Pleasant Harbor Marina and Golf Resort - Phase I, dated, July 17, 2014, and,
authored by Zachary Z. Zoul, CHA. A copy of Mr. Zoul's report is attached as Exhibit F.
Hospitality Advisors Group is a hospitality management consulting firm specializing in full
service resort and hotel properties providing services in the areas of business and development
plans, marketing studies, asset management, and hospitality operations.
Mr. Zoul reached the following conclusions regarding the reasonableness of the Developer's
staffing projections:
Based on a review of the referenced materials including project design plan,
business plan, operating budgets, and staffing schedules and an analysis of these
materials as they relate to industry standards, Hospitality Advisors Group is able
to certiff that no fewer than 65 full time jobs will be created as a result of Phase I
of the Pleasant Harbor Marina and Golf Course development.
In his report, Mr. Zoul also discusses the staffing requirements of each department of the Resort:
Food and Beverage: The food and beverage functions consist of three venues as
referenced. The staffing level of 13 full time positions is attributable to the Galley
Bistro as delineated in the Personnel Matrix (Exhibit II). These positions include
Restaurant Manager, Cooks, Servers, and Bartenders. The jobs associated with the
Sports Bar and the mezzanine level Cafi/Pafi Room of the Family Fun Center
are included in the Family Fun Center jobs allotment. This is delineated in the
Personnel Matrix.
The Galley Bistro in Phase I will have a seating capacity of 80 guests and will
serve breakfast, lunch and dinner daily. It is expected to be highly seasonal in
terms of business levels. Because the property is on a busy highway with little or
no services for travelers within a sixty mile radius, the level of transient business
is difficult to ascertain and business projections do not account for this segment of
the market. Staffing requirements for the venue have been based on scheduled
staff from 6 a.m. to 10 p.m. daily. This equates to 5,850 hours. Two full time
cooks will staff the venue which includes a Prep Cook. In order to staff the
culinary requirements for a restaurant with a capacity of 80, industry standards
require not fewer than 11,680 hours which equates to five fulI time cooks. The
lounge bar will be staffed ten hours a day with a variable schedule. To provide
bartender coverage including two staff during weekend and holiday peak periods,
two full time bartender positions are required. Service standards in terms of wait
L02ACTUAT BUSINESS PIAN Employment
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
staffand host duties have been based on an average daily guest count of40 with
two turns. This is also highly variable based on the season. In order to provide
service coverage at this level, five full time wait/trost staff positions are required
The staffing levels provided for in the development plan have been analyzed in
relation to industry benchmarks and, in particular, those set forth in the
"Restaurant Industry Operations Report" published by the National Restaurant
Association. This report sets forth staffing levels for restaurants based on sales
volume and menu price point. Based on sales projections furnished by the
development plan and a mid-tier menu price point, we were able to ascertain and
veriff that the delineated staffing level of not fewer thanl3 full time positions is
appropriate and consistent with industry standards.
Marina: The jobs associated with the Marina function include a Marina Manager,
Dockmaster, Mechanic, and deckhands. There are 8 full time positions associated
with this function. A 286 slip marina is considered to be a substantial marine
operation and given the array of services offered requires a full complement of
operational and supervisory personnel for the planned hours ofoperation.
The Marina will be staffed daily from 6 a.m. to 10:00 p.m. This equates to 5,840
operating hotus. With shift change overlap and down time, this equates to 3 full
time deckhand positions at the minimum staffing level of one per operating hour
to tend to boats, dispense fuel, perform maintenance functions, and respond to
other boater needs. 2 additional full time deckhand positions are needed to meet
the required staffing level of two per operating hour which will encompass
weekends, holidays, and the three month summer high season. One full time
mechanic position will staff the mechanic shop which will be open forty hours a
week and accommodate boat repair and service needs. One Marine Manager
position will supervise the operation and provide administrative support and
customer service. One full time guest service position will staff the dockhouse
and provide customer service and administrative support for the facility.
The staffing levels provided for in the development plan for the Marina have been
analyzed in relation to industry standards and, in particular, the "Financial and
Operations Benchmark Study for Marina Operations" published by the
Association of Marina Industries. The study sets forth industry benchmarks for
staffing levels associated with marinas based on capacity, facility design and
service levels. Based on the projected Marina operations in the development plan,
103ACTUAL BUSINESS PIAN Employment
PLEASANT HARBOR MARINA AND GOLF RESORT PROJECT
Sponsored by Puget Sound RC, LLC
we have determined that the staffing level of eight full time positions is necessary
and appropriate for a 250 plus slip marina and consistent with industry standards.
Accommodations: The accommodations function consists of operating the 66
lodging suites and is primarily a housekeeping function. Occupancy rates are
variable and seasonal. The housekeeping staff provided for herein will handle the
guest rooms as well as common areas. The housekeeping function is associated
with the year-round operation of these units which will generally be booked on a
short term rental basis for periods of one to two weeks in duration. While daily
service is available, it is anticipated that most guests will utilize the standard three
day service level offered as part of the standard rate. Occupancy is projected at
85% during the three month "high" season, 50% during the four month
"shoulder" season, and,35o/o during the five month "low" season.
In calculating full time staffing requirements associated with the aforementioned
occupancy levels, room nights by season are as follows:
High:
Shoulder
Low:
5,329
3,960
3,465
Total:12,754
There are 5 full time jobs associated with this function whose duties are
housekeeping in nature. Indusfiry standards set forth a 30 minute allotment of staff
per occupied guest room for guest room housekeeping. Given 12,754 room nights,
this equates to 6,377 labor hours or 3 full time housekeeping positions.
Additionally, an integral function of housekeeping is laundry. Industry standards
provide that one full time laundry position is required for every 50 guest rooms.
Because the service standard will generally be every three day service with linen
and towel turn, one position is reasonable for 66 guest rooms. An additional
position is associated with common area cleaning, stocking, ordering, inspection,
and supervision. The industry standard for this is one position for every 50 guest
room with a25o/o common area square footage area calculation. Again, because of
the three day service standard, one position for these functions is considered
sufficient.
The staffing levels provided for in the development plan for the Accommodations
function has been analyzed in relation to indushy standards including those set
ACTUAL BUSINESS PIAN Employment @
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forth in the "Uniform System of Accounting for the Lodging Industry" and
"Housekeeping Management" published by the American Lodging Association.
The manual and report set forttr standards for housekeeping staffing and
supervision including time calculations based on guest room size, design, and
service levels. Based on projected occupancy and service standards, the staffing
projections set forth for Accommodations are consistent with industry standards
and are deemed to be necessary and appropriate.
Familv Fun Center: The Family Fun Center incorporates a number of diverse
programs and activities, including active sports and programming warranting a
high level of supervision and - in some cases - a level of specialization and
compartmentalization in terms of duties. Additionally, the staffing of the Sports
Bar, the food bar, and special event catering in the Center is assigned to this
category. There are 3l full time jobs associated with this function of which 14 are
related to the food and beverage function of the Center.
The planned staffing level for the recreational and programming element of the
Family Fun Center is 17 full time positions. To supervise a 6,000 square foot
facility of this nature, one full time management position is required. To provide
full time hands on supervision and oversight of the operation, 4 full time
supervisor positions are required. This includes two supervisory positions during
peak operating hours on weekends, holidays, and throughout the three month
summer "high" season. Four instructor positions will assist guests with amenities
and activities such as rock climbing, the zip line, and hee topper. There will be an
additional 8 attendant positions providing programming assistance and operations
for all of the amenity and recreational elements of the propefi.
As it relates to the Family Fun Center, we have relied primarily on experiential
data and knowledge to analyze staffing levels. There is not an industry standard or
benchmark that can be readily applied to a facility as unique as that designed for
Pleasant Harbor. Recreational facilities and parks are often operated by
municipalities. ln order to provide comparative data that is relevant to Pleasant
Harbor, we have consulted the International CitylCounty Management
Association and, in particular, its publications setting forth performance measures
including the report "Parks and Recreation Perforrnance Measures" and
"Comparative Performance Measurement Data" and associated case sfudies.
Staffrng levels vary considerably and are highly subjective based on levels of
service and risk management. Based on our analysis of the recreational
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component of the Family Fun Center, the staffing level of l7 full time positions is
considered to be reasonable and appropriate.
The Family Fun Center will offer two food and beverage outlets - a Sports Bar
and mezzanine level overlook Caf6 which will also host special events and
parties. There are 14 full time food and beverage related positions associated with
these venues. The food offering in both is considered limited and light in nature
and will include pizzas, sandwiches, and appetizers. The magnitude of the two
venues is considered comparable to the Galley Bisfro. These outlets will also
provide back of the house support for the Coffee and Tea Shop.
As referenced previously in relation to the Galley Bistro restaurant, the staffing
levels for the Food and Beverage component of the Family Fun Center as
provided for in the development plan have been analyzed in relation to industry
benchmarks and, in particular, those set forth in the "Restaurant Industry
Operations Report" published by the National Restaurant Association. Based on
sales projections furnished by the development plan and a mid-tier menu price
point, we were able to ascertain and veriff that the delineated staffurg level of not
fewer thanl4 full time positions is appropriate and consistent with industry
standards.
Retail: The primary retail function is the Grocery Store which will serve as the
retail anchor and a focal point of the Resort. The store manager will also
supervise other retail activities including two second level shops. In addition to
this position there will be four full time retail clerk and support positions. Staffing
levels associated with this function are directly attributable to operating hours.
The Grocery store will have daily operating hours of 7:00 a.m. to 7:00 p.m. This
equates to 4,380 hours per annum and two full time positions. One component of
the store is a Coffee bar which will be staffed eight hours a day equating to 2,920
hours. The store will staff an additional Clerk for the store and coffee shop for an
additional 1,020 hours. Given the scale and scope of this retail operation, a
staffing level of five full time positions is deemed to be reasonable and
appropriate.
Administrative: An administrative office will be staffed on the second floor of the
Maritime Village building. This will be staffed as occupancy levels dictate. One
full time position is planned. This position will provide administrative support for
operations during regular business hours. While there is no fixed industry
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standard for administrative services, one position is deemed to be required for the
operation of Phase I of this property.
Security: The security function will consist of providing on-properly security
pahol and emergency response. This function will be staffed on a combination of
a fixed and variable basis depending upon season and occupancy levels. Security
patrol will be provided for one eight hour shift a day. A second eight hour shift
will be staffed on weekends - Fridays, Saturdays, and Sundays which also
encompasses holidays and special events. 2 full time positions are provided for.
Staffing will be as follows:
Daily:365X8hours
Weekend Supplemental: 156 X 8
Total Hours
2,920 hours
1,248 hours
4,168 hours
The level ofjobs created and the associated staffing levels provided relate only to
Phase I of the development. Occupancy and facility utilization levels will
increase over time thereby affecting the need for security staffing. There is no
industry standard for security levels. This is a highly discretionary service which
relates not only to need, but also perceptions regarding safety. Two positions are
deemed to be sufficient for the scope and scale of Phase I operations.
8.3 Job Descriplions
8.3.1 Borlender
Desired Skills and Abilities
. 107 Great customer service
. 107 Must be 2l years or older
. 107 Attention to detail
. 107 Positive attitude and excellent communication skills
. 107 Experience in bartending
. lO7 Bartender certification
. 107 Computer literacy
Duties and Responsibilities
. 107 Prepare beer/wine and non-alcohol beverages
. 107 Interact with customers, take orders and serve snacks and drinks
. 107 Assess customers' needs and preferences and make recommendations
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8.3.2 Line Cook / Boristo I Coshier
. 108 Check customers' identification and confirm it meets legal drinking age
. 108 Restock and replenish bar inventory and supplies
. 108 Stay guest focused and nurture an excellent guest experience
. 108 Comply with all food and beverage regulations
. 108 Maintain bar equipment
. 108 Point of sale transactions
Desired skills and abilities:
. Common sense, initiative and motivation
. Computer skills a must, will be trained on our programs
. Basic knowledge of Microsoft Office
o Understand the importance of customer service and have exceptional customer service
skills
. Ability to be productive working alone
. Ability to observe and identiff potential problems regarding safety, security and
maintenance
. Ability to make decisions and take proper action when problems are identified
. Willingness to leam new skills
. Food Handlers Card will be required, can be scheduled
Responsibilities include, but not limited to:
. Set up stations and collect all necessary supplies to prepare menu for service
. Prepare a variety of foods; meat, seafood, poultry, vegetable, and cold food items
. Serye menu items compliant with established standards
. Opening or closing the kitchen correctly and following the opening or closing checklist
for kitchen stations
. Keep the work area fresh all through the shift
. Make sure all storage areas are tidy and all products are stored appropriately
. Constantly use safe and hygienic food handling practices
. Assist with all duties as assigned by Kitchen Manager
. Point of sale transactions
. Preparing espresso
. Such skills include being able to tilize a wide range of kitchen tools and utensils.
In addition to his or her food preparation duties, may also be responsible for completing a large
number of smaller tasks. Such tasks could include that leftover food is stored
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performing kitchen maintenance tasks such as emptying the trash and washing dishes, and testing
the temperature of food at specified intervals.
8.3.3 Food Prep
Desired skills and abilities:
. Common sense, initiative and motivation
. Computer skills a must, will be trained on our programs
. Basic knowledge of Microsoft Office
' Understand the importance of customer service and have exceptional customer service
skills
. Ability to be productive working alone without supervision
' Ability to observe and identiff potential problems regarding safety, security and
maintenance
. Ability to make decisions and take proper action when problems are identified
. Willingness to learn new skills
. Food Handlers Card will be required, can be scheduled
Responsibilities include, but not limited to:
' A prep cook's role is to assist in the preparation of meals by chopping vegetables, making
salads, and putting together entrees. Although this role generally does not include any
cooking duties, it provides the ideal opportunity to develop many other types of skills
essential to becoming a chef.
' Such skills include proficiently being able to utilize a wide range of kitchen tools and
utensils.
In addition to his or her food preparation duties, may also be responsible for completing a large
number of smaller tasks. Such tasks could include ensuring that leftover food is stored properly,
performing kitchen maintenance tasks such as emptying the hash and washing dishes, and testing
the temperature of food at specified intervals.
8.3.4 Kitchen/Bor Supervisor
Desired Skills and Abilities
. Great customer service
. Attention to detail
. Leadership & management skills
. Computer knowledge
. OrganizationalSkills
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. Problem-SolvingSkills
. Great communication
Duties and Responsibilities
. Kitchen managers might have to interact with customers. Being friendly and courteous
will help keep customers coming back.
. Kitchen managers have to keep their eyes on a lot of elements: food standards, costs,
safety, etc.
. Kitchen managers must be leaders in the back of house, rallying their team during heavy
shifts, resolving conflicts and getting the job done.
. Kitchen managers not only deal with food, they also have to deal with costs, pricing,
creating work schedules and more.
. Keeping work schedules, shipments, cleaning schedules and more organized is crucial to
the job.
. Dealing with employee conflict, irate customers and wrong stock orders is part of a
kitchen manager's job. Being able to come up with a solution quickly is a needed skill.
. Kitchen managers need to accurately and easily communicate standards and cooking
methods to staff, give orders and speak with customers clearly.
. Kitchen managers can expect long days around hot cooking elements, much of it on their
feet.
8.4 Job Creolion Anolysis
The economic impact analysis conducted by Wright Johnson LLC finds that the Project will
generate significant and positive economic benefits for the local, regional and U.S. economy.
The total investment for phase one will be $531812,652 and the EB-5 invesftnent into the project
will be up to $10,000,000 from as many as 20 foreign investors.
Foreign investment will require evidence of creating at least 200 jobs. According to the
economic analysis, the Project will create 389.4 permanent new jobs comprising of direct,
indirect, and induced jobs. Therefore, each investor will be assigned 19.5 jobs to meet the EB-5
capital raise of $10,000,000.
The following table demonstrates the breakdown of jobs utilizing the RIMS II input/output
model:
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Proiect (with
NAICS Code)
Prolected
Expendlture/Revenue
(in 2010 dollars)
($ millions)
RlIulS ll
Final
Demand
Multlpller
RIMS !t
Dlrect Job
Multiplier
Total
Number
of New
Direct
Jobs
Created
Total
Number
of New
lndlrect
Jobs
Greated
Tota!
Number of
New
Permanent
Jobs
Greated
Construction
(NAICS 236 and
237)
$30.689 11.1851 N/A 203.2 140.1 343.3
Furniture,
Fixtures, and
Equipment
Purchases
(NATCS 4232,
4234,and 4236)
$0.551 3.1541 N/A 1.7 1.7',
Traveler
Accommodations
(NATCS 7211)
$1.924 14.7822 N/A 21.4 7.0 28.4
Restaurants and
Other Eating
Places (NAICS
72551
N/A N/A 1.2309 13.0 3.0 16.0
Grand Total:389.4
ACTUAT BUSINESS PLAN Employment
Table A. Summary of Employment Profectlon for the Pleasant Harbor Marlna and Golf Resort
tLL