RESPONSE TO REQUEST FOR PROPOSALS No. 8975-01775 / January 2, 2015

2 CANAL STREET REDEVELOPMENT

Presented to CITY OF NEW ORLEANS

NEW ORLEANS BUILDING CORPORATION February 16, 2015 by

TWO CANAL STREET INVESTORS, INC. Steven M. Peer, President and CEO 935 Gravier, 6th floor New Orleans, LA 70112 410-302-5789 SPeer@PeerInterests.com

TABLE OF CONTENTS page VOLUME I: RESPONSE TO RFP AND EXHIBITS I - VII Attachment A: Conflict of Interest Disclosure Affidavit ..................................... 1 Attachment B: Agreement and Signature ................................................................ 2 Introduction ........................................................................................................................ 3 A. Redevelopment Plan ................................................................................................ 4 1. Description of Redevelopment Plan ............................................................ 5 Exterior Architecture of the X-Shaped Building Faade ............... 7 Summary .......................................................................................................... 9 2. The Developments Physical Components .............................................. 10 Hotel Alessandra New Orleans ........................................................... 10 The Alessandra Residences .................................................................. 11 Wine Bar and Restaurant/Caf/Bar ................................................. 11 Carriage Station ........................................................................................ 12 World Trade Center New Orleans. .................................................. 12 River Jazz Lounge Presented by Kermit Ruffins ....................... 15 Proposed Off-Site Improvements ....................................................... 19 Development Plan Summary ............................................................... 25 3. Redevelopment Schedule ............................................................................. 28 4. The Generation of Maximum Benefits ..................................................... 30 Social and Community Benefits .......................................................... 30 Economic Benefits .................................................................................... 32

5. Plans for Services, Amenities, Parking and Access ............................. 35 Hotel Alessandra New Orleans ........................................................... 35 The Alessandra Residences .................................................................. 38 Motor Court and Parking ....................................................................... 39 6. Operational and Management Plans ........................................................ 40 Hotel Alessandra New Orleans ................................................................. 40 Website Development ............................................................................ .41 Central Reservations Office .................................................................. 43 Online Travel Agents ............................................................................... 44 Leisure Business ....................................................................................... 45 Restaurant and Bar Operations .......................................................... 45 Partners PMS, GDS ................................................................................ 48 Brand Loyalty Program .......................................................................... 48 Cooperative Marketing ........................................................................... 48 Management/Brand Corporate Support ......................................... 49 Revenue Management ............................................................................ 50 Social Media ................................................................................................ 51 Electronic Marketing ............................................................................... 51 Public Relations ........................................................................................ 52 Human Resources .................................................................................... 54 Accounting & MIS ..................................................................................... 54 Purchasing & Procurement ................................................................... 54 Engineering ................................................................................................. 55 Pre-Opening & Technical Services ..................................................... 55

Why Hotel Alessandra New Orleans? ............................................... 56 The Alessandra Residences .................................................................. 61 B. Project Design .......................................................................................................... 64 1. Site Plans ....................................................................................................... 65-81 A. On-Site Plans ....................................................................................... 65 Perez Architectural Plans ....................................................... 66 Perez Renderings ................................................................ 82-89 Rottet Studio Inspirational Imagery .......................... .90-109 B. Off-Site Plans to Finish the Riverfront ................................... 110 Entergy Substation Wonder Wall of Art .......................... 110 New Ferry Terminal ................................................................ 113 Louisiana Maritime Museum .............................................. 124 Spirit of Freedom Monument ............................................. 128 Carriage Ride Station ............................................................. 132 Stairs to Spanish Plaza .......................................................... 135 Refurbishing the Spanish Plaza Fountains .................... 136 C. Development Team (Credentials in Exhibits) .......................................... 138 1. Contact Person and Redevelopment Team ........................................ 139 2. Commitment between Developer and Team Members ................. 151 3. Past or Pending Litigation ......................................................................... 168 D. Financial Arrangements and Funding Sources ........................................ 170 1. Capital Structure ........................................................................................... 171 2. Completed/In Process Projects Since 2010 ....................................... 189

3. Guarantor and Guarantors Financial Capability............................... 191 4. Developer Budget ......................................................................................... 192 5. Surety Company Approval ........................................................................ 195 Arthur J. Gallagher Risk Management Services, Inc. ................ 195 6. Projected Employment ............................................................................... 196 7. Orleans Parish Local Business Participation ..................................... 197 E. Financial and Lease Terms................................................................................ 200 Financial Response to the RFP .......................................................... 201 F. Disadvantaged Business Enterprises (DBE) Plan ................................ 204 Arnold Baker ........................................................................................... 205 Perez ........................................................................................................... 206 Disadvantaged Business Enterprises ............................................ 206 McDonnel Group MBE/WBE/DBE Program ............................... 210 Negotiation with Local DBE Contractors and Sub-Contractors 211 Bond Protection Insurance Alliant Bonding Solutions ......... 212

EXHIBITS I Ground Lease II Parking Lease III Two Canal Street Investors, Inc. Principals IV Woodbine Development Corporation V Valencia Group VI Monday Properties VII Perez Architects VOLUME II: EXHIBITS VIII - XVII VIII Rottet Studios IX Ten Eyck Landscape Architects X Gallagher & Associates XI Lord Cultural Resources XII The McDonnel Group XIII Crescent Growth Capital XIV HVS Market Study: Proposed Hotel Alessandra New Orleans XV Valbridge Property Advisors Apartment Market Study XVI DBE Participation Plan XVII The New Orleans Maritime Tower at Freedom Park

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INTRODUCTION: Two Canal Street Investors, Inc. is pleased to respond to RFP No. 8975-01775 as a selected Finalist Developer Respondent for redevelopment of 2 Canal Street, the original International Trade Mart Building. The City of New Orleans will negotiate with the winning Developer (to be selected from five finalists) the terms and conditions for a 99-year ground Lease for the building and contiguous land formerly known as the World Trade Center and now RFP referenced as 2 Canal Street. We intend to be the Developer that brings a Silver LEEDS certification to the World Trade Center adaptive reuse project. We offer the City a $23 million capital fee upon execution of the Lease commensurate with current market/appraised value and a 99-year term. Additionally, we would make an annual payment of $2.5 million cash adjusted by a CPI annual escalator or six percent (6.0%) of gross revenues, whichever is greater. This is a $238 million redevelopment project for the City, along with the economic impact stimulus of millions of dollars in hotel occupancy and sales tax revenue and thousands of jobs. (SEE EXHIBIT I GROUND LEASE). Contingent upon a City of New Orleans/New Orleans Building Corporation (NOBC) 99-year Lease signing with Two Canal Street Investors, Inc., the World Trade Center of New Orleans (WTCNO) will return its offices to this building. The venerated organization has granted our Team the right to use the trademark World Trade Center name during this RFP bidding process, and to rename 2 Canal Street The World Trade Center for the term of its Leasehold. Our RFP bid will at times alternatively refer to 2 Canal Street as the World Trade Center, as our Team Members have worked hard and diligently to earn the right to do so. Each team member on the Two Canal Street Investors, Inc. team has individually and specifically committed to provide the work product, staff and resources necessary to complete the development plans provided herein and within the times provided for in the RFP.

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A. Redevelopment Plan

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1. Description of Redevelopment Plan The emblematic 2 Canal Street building has symbolized and celebrated the City of New Orleans for five decades. Legendary architect Edward Durell Stone designed the signature 33-story structure as an enormous compass with four cardinal points, a window-striped X marks the spot of this geographical location. The original modernist building set the standard for other structures worldwide. This iconic emblem graced multiple New Orleans retro postcards. It is a piece of the historic fabric of the Crescent Citys sense of place and history. The tower-on-the river building with a once-revolving Tower of Light rooftop that visually linked the citys defining bodies of water will once again spearhead the continued renewal and revitalization of the City of New Orleans. The cruciform plan with four wings has always represented the concept of trade across the world, and will now be adapted for use by succeeding generations. With a view from the Mississippi to Lake Pontchartrain, the buildings bold vertical lines will once again be a source of great pride for the citys leadership. The once futuramic building of well-recognized modernism and dynamism will return to a position of empowering the city, as a pivotal Mississippi riverfront anchor and catalyst. Two Canal Street Investors, Inc. is committed to executing an adaptive reuse project to return the elegant and serene mid-century 2 Canal Street high-rise to its deserved historical role. The defining skyline fixture that once transformed downtown New Orleans and the Riverfront is called the most important piece of property in the city. The World Trade Center (2 Canal Street) with its various components will continue to be a living monument to the fact that New Orleans was founded on the Mississippi River, lifeblood and impulse of both continental and international trade. The river delivers products and produce from Americas heartland, with world disbursement; and serves as the transportation hub importing products from overseas for much of Middle America. Additionally, this building sits at the focal point of the City of New Orleans, the edge of the French Quarter and the Central Business District (CBD) at the foot of Canal and Poydras streets. The 2 Canal Street site for adaptive redevelopment has the potential to finally unite all the physical elements of Spanish Plaza and the Canal Street Ferry Terminal (Canal Street/Algiers Ferry). Our plans will create an exciting and vibrant riverfront destination venue for increased public use, a lively revitalized site for visitors and residents alike. Exterior Architecture of the X-Shaped Building Faade Modernisms populist architect Edward Durell Stone designed this building. The National Register of Historic Places listed the building in June of 2014, under the original International Trade Mart name. http://www.nps.gov/nr/feature/places/13001127.htm Today the building is a federal landmarked historic property, deemed worthy of preservation. Stones senior partner at his architectural firm and fellow architect on the 60s building design was Peter Capone, AIA. Capone, a renowned architect in his own right, is the only living partner of

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Edward Durell Stone. Capone is an architectural consultant and member of our team for his knowledge of Stones visionary work and intentions for this important structure. Capone states that the buildings X shape was its distinguishing feature. Two Canal Street Investors, Inc.s project architect for Perez, Pio Lyons, a recognized national historical architectural and urban design expert, will lead the way in the preserving the modern-movement past in the present, adapted to be relevant again. Lyons and the Perez architects devise creative solutions to both conserve history and function in todays market. Industry talk says, several RFP bidders would not proceed with the project unless the metal louver sunshades striping the vertical windows on floors three through 29 are removed, without impacting historic rehabilitative tax credit status. As a condition of the bidding process, it is virtually impossible for the RFP Selection Committee to know in advance what the federal and state historical agencies might determine. TWO CANAL STREET INVESTORS, INC. PLEDGES TO HONOR A CITY BUILDING LEASE WHETHER OR NOT THE WINDOW LOUVERS ARE DETERMINED AN ARCHITECTURAL FEATURE THAT CANNOT BE REMOVED. Also, we do not intend to replace the exterior cladding. We will, however, replace broken faade elements, clean the building, renovate and remodel the interior, replace all building systems (mechanical/electrical/plumbing/etc.), replace all windows with state-of-the-art hurricane-certified glass and frames, and engage a lighting consultant to dramatically highlight the structure in the evening. Nighttime visual aesthetics will create an opportunity for increased public awareness, support and appreciation of preserving important and influential moderist buildings. In late 2014, the French light art company, La Maison Productions, projected a custom-tailored surrealistic light show onto Gallier Halls historic faade. La Maison has been known to splash walls with icy blue tidal waves that magically disassemble into digital building blocks, allowing Banksy-like silhouettes to scamper over the buildings exterior, while shifting psychedelic color bathes the architectural details. Few structures have the architectural bones of the World Trade Center, a perfect palette.

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Night-lit. The iconic World Trade Center Building coated in multi-hued color(s). Awash in kindred colors, Architect Edward D. Stone's 60s modernist possesses a unique projection surface for lighting. Urbanist illumination, a rainbow eye-pop spectrum of colors lit up the building in 2003, when the Arts Council of New Orleans hosted the New Orleans Canal Street Projection Project, for media artists. Here the artists cloaked the WTC in coatings of gold and green.

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Our proposal is not for a single use. New Orleans is not a plain vanilla place, nor a cookie-cutter kind of town. New Orleans remains the crossroads of the world. We believe in thinking inside and outside of the Crescent City curve. Two Canal Street Investors, Inc. recognizes that nothing happens without thought, interaction with the City of New Orleans/NOBC, with the dedication and determination to get it right. We believe that the Citys representatives will find that we present far more than satisfactory documentation to show realistic income and unsurpassed creativity on a sustained basis for the City of New Orleans. The 2 Canal Street building remains a colossal and influential presence, a gateway into the future. The Two Canal Street Investors, Inc. develop-ment team is committed to a business-like, transparent, first-class revital-ization of this historic site. Our team is comprised of recognized development professionals with sterling track records and accomplishments, and the financial ability to take the World Trade Center to its highest and best use. Expectations for the successful mixed-use redevelopment of this now-historic landmarked building remain high. The long-term financial feasibility of bringing this property back into commerce underscores the upcoming 2018 Tricentennial New Orleans 300-year birthday celebration of Jean-Baptiste Le Moyne de Bienvilles founding La Nouvelle-Orlans in 1718. Our proposal gets it right on the front end and on the back end convincingly demonstrating to the City of New Orleans/NOBC that the Two Canal Street Investors, Inc. development team has the professional track record, accolades, creativity, vision, passion, integrity, commitment and financial strength to succeed. We know New Orleans, the urban landscape, and older buildings that give it a unique character. Our plans are motivated by one core idea: the best vision of a citys future cannot ignore its past. We look forward to partnering with the community, on this unusual project, a project that requires an agile, creative approach to a variety of architectural components, public use benefits balanced against financial rewards for the City-owned property, and a creative approach to architectural and planning issues. 8

Our plan makes the most of all the potential this building and this location have to offer. It will showcase New Orleans progression into the future, outside and in, as only an almost 300-year-old city can do. Repurposed, contemporary and future forward, it will be another incarnation of what the modern, mid-century edifice was meant to be when it was first imagined. It will set the standard for innovative and adaptive re-use not only in New Orleans but throughout the United States. When adapted to higher uses, this property will continue to be a worldwide-recognized riverfront and skyline symbol for New Orleans. Our development proposal will return this landmarked building back into commerce and preserve the building for future generations. Again, in short, multiple primary components anchor our building development proposal:

318-room, five-star hotel branded Hotel Alessandra New Orleans, with restaurants, bar areas, spa, healthclub and ballroom; jazz lounge on the, 33rd floor, formerly the famed Top of the Mart, headlined by Kermit Ruffins; World Trade Center building distinctive ground-floor seating area and wine bar (Grand Foyer and Eads Wine Bar) and separate chef-driven restaurant with patio seating. 240 luxury apartments branded The Alessandra Residences; and multiple public use, off-site contributions that span the Ferry Terminal, Louisiana Maritime Museum, Riverfront access, proposed improvements to the Spanish Plaza water fountain, an Art Wall and construction of a Wine Laboratory at the UNO Kabacoff hotel school. A mixed-use hotel and residential facility with a modern bent is a natural fit for the design of this

60s era commercial building transforming a now vacant edifice into a world class five-star hotel and luxury residential apartments that will add much needed inventory for the younger demographic traveler as well as our own growing entrepreneurial and health care populations. The World Trade Center sits at the epicenter of the City of New Orleans and the Mississippi River where the French Quarter and the Central Business District meet at the foot of Canal and Poydras streets tying together the beautiful and vast elements of this unique city. Summary Two Canal Street Investors, Inc. presents a solid thought-out redevelopment plan for adaptive reuse with a superior financial proposal that meets RFP requirements. Two Canal Street Investors, Inc. believes that a professional evaluation will demonstrate the synergistic superiority our team brings to this one-of-a-kind adaptive reuse development project, having especially strong track records of many years of success and superior financial strength. Winning this bid and successfully negotiating a joint vision with the Citys representatives, Two Canal Street Investors, Inc. intends to restore the greatness of this irreplaceable New-Orleans building, a site once greeted with revered awe, wonderment, fanfare and celebration. Two Canal Street Investors, Inc. believes that by working closely with the City of New Orleans, our proposal will receive New Orleans City Council approval and subsequent execution by Mayor Mitchell J. Landrieu all completed on a fast track time line.

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2. The Developments Physical Components

Hotel Alessandra New Orleans The dominant force and focus in this 33-story building will be the luxury Hotel Alessandra New Orleans, the top-tier product of the Valencia Group and comprising some 11 floors, plus two full floors of reception, restaurant and lounge (the 30th floor), presidential and ambassadorial suites (the 31st floor), and a stand-alone ballroom connecting to the third floor. This five-star hotel will be the premiere hotel in the city. As will be demonstrated later in this response to the RFP, Valencia will outperform other brands with a luxury product that is both fresh and relevant to New Orleans as evidenced by their track record. Valencias Executive Vice President John Keeling, before his tenure at Valencia, was a partner with both PKF Consulting and Laventhol & Horwath for 30 years and is acknowledged as one of the most knowledgeable experts on the New Orleans hotel industry, having asset managed, appraised, or performed research for the vast majority of hotels developed in the city since the mid-70s.

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The Alessandra Residences In the floors above the hotel guestrooms will be the Alessandra Residences with approximately 240 luxury rental units flexible to market demands for larger units. The City of New Orleans has a demand for such units. Dorian Bennett Sothebys International Realty, our Team Member realtor and marketer for these residential units, confirms widespread excitement and commitment to this premiere project. The rental market is strong for exclusive apartment rentals in the urbanscape of downtown New Orleans. The national phenomenon of New Urbanism in a historic city remains viable and sustainable, reviving and breathing life back into an this mid-century modernist building. The Two Canal Street Investors, Inc. residential proposal remains adaptable to market conditions dictating the size of the units. Hotel Alessandra New Orleans branded amenities will include concierge, housekeeping and room service. This tie-in between hotel and residential units adds extra enticements to prospective residential tenants who find it impossible to acquire downtown high-rise New Orleans riverfront living with spectacular views. Seating Area and Wine Bar and Separate Restaurant/Caf The World Trade Center building will have a ground-floor vivid expanse (distinct from the Hotel Alessandra New Orleans ground-floor lobby) proposed as the Grand Foyer. The Grand Foyer will utilize an interesting mlange of ideas, dcor and lighting for a striking seating area. The showplace area would encompass an interior wine bar proposed as the Eads Wine Bar. Small dishes to pair with the wine flights may be included in the concept. A proposed chef-concepted and operated restaurant/caf would connect to the Grand Foyer and Eads Wine Bar. The restaurant is expected to utilize patio dining and outdoor seating, fanning out onto the Galvez Plaza, weather permitting. The chef would most likely be known for New

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Orleans and Gulf South inspired food with eclectic innovation. The restaurant will be a signature destination in its own right and complement Hotel Alessandra New Orleans restaurant and bar on the 30th floor. Two Canal Street Investors, Inc. and Valencia Group will curate and most likely operate the prominent and inviting World Trade Center ground-floor space but will remain open to inviting a compelling operator. The street level experience will embrace the traditional culture of New Orleans with a contemporary palate. Carriage Station Two Canal Street Investors, Inc. plans a turnaround for patrons to be dropped off on the north side of the World Trade Center Grand Foyer/restaurant, which will be located in the present grassy area on the ferry terminal side of the building. Also built into this turnaround will be an extra lane for carriages to wait for customers, plus the drop off turn around, similar to the Decatur Street station. This would unify the French Quarter ambiance to the World Trade Center and Spanish Plaza Riverfront. World Trade Center New Orleans The World Trade Center of New Orleans has an exclusive agreement with Two Canal Street Investors, Inc. to return to the World Trade Center building upon expiration of their current office lease for a ten-year period. WTCNO predates and served as a model for other U.S. World Trade Centers. The WTCNOs return to their roots and namesake building will bring their legacy home. The WTCNO web page describes itself: The World Trade Center of New Orleans is the strongest international business organization in the Southeast Region of the U.S. with +1,000 corporate and high-profile individual members. Our mission is to create jobs and wealth in Louisiana through international trade by providing advocacy, information, educational services, stakeholder programs and services; as well as supporting a prosperous business climate resulting in the retention, recruitment and expansion of Louisiana-based international business.

Old postcard of New Orleans famed Edward Durell Stone International Trade Mart!

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River Jazz Lounge - Presented by Kermit Ruffins

Kermit Ruffins at the World Trade Center, 2 Canal Street The buildings 33rd floor rotating rooftop lounge will be a jazz and cocktail lounge headlined by Kermit Ruffins. Built-in banquette seating on the rotating section of the club will make this the

most upscale jazz venue in New Orleans. Tasty and elegant bar food will compliment classic cocktails prepared by trained mixologists. Kermit, as is his custom, will host and showcase some of the areas best local musical talent to play at this club, set to be one of the citys most celebrated venues. This revolving glass-walled, sky-high location will once again become even more popular than the buildings Top of Mart from decades past.

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Proposed Off-Site Improvements Riverwalk to Spanish Plaza to the Audubon Aquarium to Harrahs Casino to One Canal Place the riverfront is not fully utilized, due to a mishmash of public use barriers and a series of overlapping, confusing elements. It is time to recalibrate and finally finish this riverfront as a creative, cohesive draw. The worlds best riverfronts feature amenities that increase peoples comfort and enjoyment, setting a convivial location for social interaction. Lighting and landscape strengthens a riverfront plazas identity and can help identify entrances, pathways and direct people to specific activities. Public art is also a magnet to attract people of all ages. Renovation of the landmark-designated World Trade Center building will encourage increased public use. In addition to the financial factors proffered in our RFP response, Two Canal Street Investors, Inc. offers improvements to the attractiveness and appeal of the immediate locale around the World Trade Center. These goals work in conjunction with some of the Reinventing the Crescent ideals and Ernest N. Morial Convention Center phased expansion core ideas of how to reformulate critical infrastructure and reposition the riverfront as a singular, continuous ensemble of international prominence. We call it RECONNECTING the Crescent. We, like others, believe in the forward-looking and always inventive creative culture of New Orleans. Once in place, these proposed improvements will help attract visitors to the riverfront:

Mural Art on the Entergy Substation Perimeter Because City tax revenues are needed for other priorities in the immediate future, it is most unlikely that the City of New Orleans tax revenues will be available for the completion of the riverfront improvements near the proposed adaptive reuse development at the World Trade Center anytime soon. Two Canal Investors, Inc. believes several locational problems, adjacent to or close by, will adversely affect and detract from the fire-star quality of the proposed Hotel Alessandra New Orleans and Residences, and the food, beverage and music venues that are an integral part of our response. In addition to the financial factors proffered in our RFP response, Two Canal Street Investors, Inc. offers to mitigate these imperfections affecting the immediate locale around the World Trade Center. Once in place, these proposed improvements will attract visitors to the riverfront like no other set of proposals. . The Entergy substation takes up an entire block of prime space and looks industrial. We propose it be covered in mural art to become a smaller-scale version of the Wonder Wall (taken from the 1984 New Orleans Worlds Fair). See details in the Design Section.

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Staircase Down to the Spanish Plaza The public does not easily obtain access to the river from Canal Street. The World Trade Center and the city behind it do not connect easily with Spanish Plaza and the river. Two Canal Street Investors, Inc. proposes to build a staircase down from the

World Trade Center to the Spanish Plaza from the riverside of the building for easy connection to the Ferry Terminal and to Spanish Plaza. (See Design Section below) 20

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Terminal Building and Louisiana Maritime Museum The Ferry Terminal has nonfunctioning escalators and needs to be updated. The terminal shows evidence of decline. It needs revamping. Escalators do not work and the building has not been updated. Two Canal Street Investors, Inc. will provide financing for the Louisiana Maritime Museum to be located in a new building connected to the new Ferry Terminal. The Louisiana Maritime Museum the artifacts from a museum that used to be housed within the Two Canal Street building but are now on display at the USS Kidd museum in Baton Rouge. The Louisiana Maritime Museum will tie all the elements of this riverfront together, inducing locals and visitors alike to come to the riverfront to see historical exhibits. Once the public is at the Riverfront, they will take greater advantage of the Canal Street/Algiers Ferry, the Audubon Aquarium, Spanish Plaza, Riverwalk, festivals, food and beverage facilities, new and old venues and the river vessels available for cruises or dinner.

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Two Canal Street Investors, Inc. proffers these proposals as part of our response to redevelop the World Trade Center. Prior to implementation, all approvals required will be obtained from various agencies such as NOBC, the Downtown Development District, Entergy (Art Wall), the RTA (Ferry Terminal) and others. Many preliminary endorsement letters are included in this RFP response. None of these proposals will in any way interfere with the prompt process for design, approval, and renovation of the World Trade Center building, and construction of the ancillary building, upon a signed Leasehold with the City of New Orleans/NOBC.

Development Plan Summary Our plan is an approximately $220 million adaptive reuse of the 33-story, 670,000-square foot property into a dynamic mixed-use destination project including:

Hotel Alessandra New Orleans 318-room luxury lifestyle hotel on floors six through 16, plus an attractive new five-story structure on the south side of the property to provide valet and parking space, a hotel loading/service area, Louisiana Maritime Museum offices, high-ceiling, 8,000-square foot, column-free ballroom, and a new 16,000-square foot hotel pool/rooftop event and live music area overlooking the river. 25

Upscale, contemporary 6,700-square foot, round, rotating cocktail lounge/dinner-only venue on the 33rd floor with the citys best views, a high-profile chef and live music from leading local musicians. World Trade Center building distinctive ground floor seating area and wine bar (Grand Foyer and Eads Wine Bar) and independent chef-driven restaurant with patio seating. 240 hotel-serviced luxury residential apartment rental units on floors 17 to 29, including a diversified mix of spacious contemporary one- and two-bedroom units with high-end finishes and spectacular views. The new apartments above the hotel will enjoy modern, upscale residential amenities on the fifth floor including an open-air roof deck with a spectacular pool, spa, state-of-the art fitness center, and a large resident community party room and private cinema. The new luxury apartments and amenities will set a new standard of excellence in New Orleans, will cater to a wide upscale demographic and will contribute to the vitality and strenght of the Riverfront by activating this neighborhood. The new Louisiana Maritime Museum and Entergy mural walls will, remove the prevailing decay and attract New Orleans residents to the citys center.

3. Development Schedule

First Six Months Upon execution of the Developers Lease with NOBC, financing will commence IMMEDIATELY with the infusion of capital to effect the milestones agreed to. Work will begin with the cooperation of the City of New Orleans on abating and gutting all of the remaining floors, lead paint remediation, environmental cleanup and signoff, refurbishing elevators, the motorized revolving rooftop lounge, replacement of all exterior windows, mechanical, plumbing and electrical core work, architectural and engineering drawings for fast track submission. Upon approval, the installation of the exterior glass elevator from the ground level to the 30th floor hotel lobby will commence destined to become instantly recognized as the Hotel Alessandra New Orleans and Residences. Design Development will be ongoing. All work will be subject to National Park Service approval. Second Six Months Interior work on all segments of the building will begin; Realtor Dorian Bennett will accept residential lease reservations on a first come, first served basis. Two Canal Street Investors, Inc. anticipates a 50% reservation list with deposits within sixty days of announcement, based on previous experience. Some exterior building work and interior renovations will begin, based on fast track approvals working with the City of New Orleans. Filings for the City and other approvals to include valet drop off, construction permits, zoning, signage, etc.

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Third Six Months Construction and renovation will be ongoing, with our professional Team Members working closely with the City of New Orleans. 2017 Completion Depending on the Citys response time to the Developers submissions and permit requests, it is the Developers plan to complete the construction/renovation and open all phases by December 31, 2017. NOBC Board of Directors and City Council approval of Leases, then:

Financial closing and start construction process by end of 2015 Complete construction by end of 2017 Grand opening in early 2018 Stabilization of operation in 2020 (Year three post construction)

Contingencies and Mitigation Timely approval by NOBC and City Council, so that design and abatement can commence by May 1, 2015. This will ensure the historic tax credits are earned before sunset on December 31, 2017. Historic Tax Credit Approvals National Park Service approves limited faade modification such as window upgrades to utilize twenty-first century technology. RTA approves access and public space modifications at the Ferry Terminal site. Access and pedestrian license agreements for Spanish Plaza, Riverwalk and across the railroad tracks. Timely issuance of permits. PLEASE SEE FOLLOWING TABLE SHOWING ALL THE MAJOR CATEGORIES, INCLUDING ABATEMENT AND DEMO/DESIGH/PERMITTING/FINANCIAL CLOSING/CONSTRUCTION/ RESIDENTIAL AND HOTEL OPENING AND STABILIZATION.

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4. Generation of Maximum Benefits As demonstrated in Section D.1. (Capital Structure), our plans are well though out to maximize financial benefits to the City. Two Canal Street Investors, Inc.s proposal is to maximize capital to the City of New Orleans by developing a five-star, luxurious hotel and residence apartments, restaurants, and entertainment in the City of New Orleans. Likewise, recognizing the importance of public use and incorporation of the Mississippi Riverfront, Two Canal Street Investors, Inc. and its team of dedicated professionals and partners have taken the time and effort to properly consider and to proffer public benefits for the World Trade Center site. We believe that our extraordinary thinking outside and inside the buildings envelope and our collective efforts over the past two years will demonstrate commitment to the synergistic relationship required between the luxury and public use requirement necessary to make this adaptive reuse development a long-term financial and creative success for the City of New Orleans, as well as others affected by and who hold a stake in the success of this focal project. We believe the most prominent and dominant location in the City demands the best and most characterful that can be created in every one of the categories of hotels, restaurants, residences and lagniappe. We believe that a review of Section D.1. (Capital Structure) will give evidence to the financial and economic benefits each component of our redevelopment plan will produce to the City. Social and Community Benefits Our plans for subject site of this response to RFP No. 8975-01775 also offer fresh and invigorating impressions, and a concrete plan of action, for the areas surrounding 2 Canal Street, so this Riverfront area has a cohesive composition and character for both visitors and the local community:

1. Two Canal Street Investors, Inc. is working closely with the RTA to produce a creative and memorable Louisiana Maritime Museum attraction in a new pedestrian Canal Street Ferry Terminal building. This planned utilization will help reinvigorate an area now diminishing the experience of this steeped-in-history Riverfront location. While the Ferry Terminal will attract tourists for a pleasure ride on the Mississippi River it is also important to serve local commuters between Algiers and Canal Street. The new Terminal and Museum will become a joy to pass through, rather than just a function, increasing and enhancing public use.

2. The Louisiana Maritime Museum of approximately 10,000 square feet and developed as an expansion of the Ferry Terminal will celebrate the maritime history of this special part of the historic Mississippi Rivers navigable waters. Louisianas coastal waters are like no other in the world. The Maritime Museum with rotating attractions will bring history and maritime education to the general public. The 30

Museum will connect the public use into the Spanish Plaza and the Mississippi River. This marks the return of the original Maritime Museum of Louisiana to this location as well as the return of many of the original museum artifacts to New Orleans, which are now on display at the USS Kidd in Baton Rouge. 3. Two Canal Street Investors, Inc. will research the feasibility of the strategic placement of interesting historic and/or unusual boats used on the Mississippi River and in coastal Louisiana. Exhibit boats would be a powerful attraction to bring people to Spanish Plaza, Woldenberg Park, Riverwalk, and the Mississippi Riverfront. Two Canal Street Investors, Inc. believes these vessels would help unite all the elements of the Riverfront at this strategic location in the city. 4. The upgrade of the Spanish Plaza Fountain, which we propose to do in conjunction with Riverwalks Howard Hughes Corporation, (the lessee that controls Spanish Plaza), will be an engaging attraction. We believe that the fountain should be returned to a prominence it enjoyed when it was new, and when there were not many other fountains of such consequence in the country.

Two Canal Street Investors, Inc.s various consultants reached out to secure a cooperative agreement with the World Trade Centers neighbor Spanish Plaza leased by the Howard Hughes Corporation. There were several discussions with CEO David Weintraub who referred us to Mr. Mark Bulmash, Senior Vice President Development for the Howard Hughes Corporation. Mr Bulmash indicated that the Howard Hughes Corporation was deeply involved with one of the other finalists for the RFP but, in the event that Two Canal Street Investors, Inc. were to become the lessee of the World Trade Center building, Howard Hughes Corporation would be very interested in discussing our plans for improvement of the Spanish Plaza and upgrading the water fountain. They would support increased public use down to the riverfront. 5. The Wonder Mural Wall, which will encircle the Entergy station occupying one whole block of prime space, will be a new attraction that shouts New Orleans.

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6. Return of the World Trade Center New Orleans to its historical home at the World Trade Center building is worthy in itself, and will concentrate an understanding and appreciation for the dominant place New Orleans has played in world trade, and continues to play to this day. The saving of this famed but mothballed twentieth-century building from demolition was of critical significance, as evidenced by its designation on the National Register of Historical Buildings. But the return of the organization that was the dominant force of the buildings purpose is of equal significance. By facilitating the World Trade Center New Orleans to return to its roots, Two Canal Street Investors, Inc. shines a bright light on the continued significance of New Orleans as a center of world trade. 7. Placement of a carriage stop and turnabout circle on the north side of the World Trade Center will immediately imbue the area with distinctive new character and provide a unifying element between the Vieux Carr, 2 Canal Street and Spanish Plaza. The carriage ride station activity will provide a traditional, unique experience. This popular activity will be a second, though smaller, launching post for carriage rides which locals always appreciate both for themselves as well as tourists to New Orleans. 8. Two Canal Street Investors, Inc. will provide a grant of nearly a half million dollars to the Lester E. Kabacoff School of Hotel, Restaurant & Tourism Administration at the University of New Orleans to construct a new Wine Laboratory. Additionally, Hotel Alessandra New Orleans will co-develop an intern program with the Kabacoff School and employ UNO students each semester and summer in a structured learning program at the hotel. Economic Benefits Pre-Construction will begin on May 1, 2015 and Construction will continue through December 31, 2017. During this time we estimate that between 800 and 1,000 jobs will be created. While it is possible that those who are on the job in early months go away and are not there in peak months, it is not really that likely. We estimate an additional 20% over peak to pick up jobs that may have come and gone by and after peak. Assuming in the course of 18 months that 20% of the total peak per trade have come and gone and are not included in the peak value, the 835-person peak manpower would increase to 1,000.

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A large number of permanent jobs will result from operating Hotel Alessandra New Orleans and Residences as well as the Maritime Museum and restaurant tenant. Hotel Operations 190 FTE Hotel Restaurant 50 FTE Banquet/Catering 40 FTE Valet 25 FTE Spa 15 FTE Jazz Club 35 FTE Tenant Restaurant 50 FTE LA Maritime Museum 60 FTE This results in approximately 465 total Full Time Equivalent employees. At an average annual blended wage of $30,000, total annual payroll not including benefits would be approximately $14 million. This number does not include the additional employment resulting from the new carriage stand and the hundreds of vendors who will service these facilities.

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5. Services, Amenities, Parking and Access Hotel Alessandra New Orleans (NOTE: PHOTOS IN THIS SECTION ARE OF EXISTING VALENCIA GROUP HOTELS) Guest Rooms Hotel Alessandra New Orleans will be a 318-room luxury hotel. Guestrooms will be large and well appointed with high ceilings and ceiling to floor windows providing breathtaking views of the Mississippi River and the City of New Orleans. These rooms will average nearly 500 square feet, not including the two Presidential suites. The room breakdown is as follows: Levels 6-16 143 Standard Guestrooms ranging from 404 to 472 sq. ft. Levels 6-16 176 Deluxe Guestrooms ranging from 492 to 596 sq. ft. Level 31 8 Junior Suites ranging from 630 to 706 sq. ft. Level 31 2 Presidential Suites of approximately 2,400 sq. ft. Each room will embrace the New Orleans culture in a contemporary vernacular. The designer we will use is Lauren Rottet and her Rottet Studios who designed the renovation of our Hotel Valencia Santana Row in San Jose, California and is designing both the renovation of Hotel Valencia Riverwalk in San Antonio, Texas and our under-construction Hotel Alessandra Houston. Her qualifications are presented in Exhibit VIII at the end of this RFP Response. While the exact design is not yet known we do know the standard that the design will be held to. Subtle but elegant design touches will remind guests that they are in New Orleans, not South Beach or Chicago. Floors will be of wood or other high quality material with luxurious and unique carpet or rugs adjacent to the bed. Art in the room will be original and, while reflecting the culture of the Crescent City, will avoid touristy clichs. Fresh flowers will be common. Beds will feature pillow-top and memory-foam mattresses and have custom designed headboards. Guests will enjoy Frette sheets of Egyptian cotton. While the default pillow will be of goose down, a choice of pillow fills such as silk, wool, cashmere, premium foams or latex will be available. Lights under the nightstands will illuminate a guests way automatically as he or she steps out of bed. Illuminated walk-in closets with drawers, shelves and premium hangers of wood and satin will be in every room. Closets will have two comfortable robes, slippers and a large umbrella. Room lighting will be dimmable at a touch. In addition to a desk and desk chair,

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each room will have a sofa and coffee table. Honor bars will be provided stocked with such items as Sazerac Rye Whiskey, Creole Bloody Mary mix, Abita and other local craft beers as well as the more common premium brands. For technology, the rooms will be equipped with digital thermostats, cordless phones, electronic safes, and extremely wide bandwidth for effortless internet connections. Todays affluent guest travels with all of the wireless appliances that he or she needs and wants to know there is enough bandwidth to operate as many devices as wanted without a hitch. Internet connections will be free. A Hotel Alessandra app will be downloadable which will give the guest access to all of the hotels services and amenities. While printed room service menus will be available, guests will have the ability to review the menus of any food outlet in the hotel and order it or make reservations with the app. Electrical outlets will be easily available above or next to the desk, at each nightstand for convenience. Reading lights will be installed either in the ceiling over the bed or the headboard with intuitive controls near each nightstand. A digital, high fidelity clock radio will be provided in each room. Large flat-panel ultra high definition televisions with attached Bluray players will be standard. A Bluray library will be available. Bathrooms will be large and well lit. Each room will have a large soaking tub with a hand held sprayer and a separate enclosed shower with body jets and rain shower. There will be an upscale toilet with two flushing function in an enclosed space. Two sinks with ample counter space will be provided. Generous sized, heavyweight plush high-absorbency cotton bath sheets and towels will be provided. Very upscale, ample sized, brand name toiletries including, at a minimum: soap, shampoo, conditioner, body lotion, mouthwash, shower cap, sewing kit, etc. In addition to the large mirror behind the vanity, a large lit magnifying mirror will be provided along with a digital bathroom scale.

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Nightly turndown service will include filling the ice bucket with fresh ice. Occasionally small and surprising gifts will be left during turndown. Custom personal services such as one-hour pressing, shoe shine and tailoring or alterations will be available. Two separate Presidential suites on the 31st floor will host performing artists and heads of state in New Orleans style. Each will have two bedrooms, large dining room table and a service kitchen. Additional smaller suites will be available on the floor to accommodate security staff and other members of the guests entourage. As additional security, the suite floor will only be accessible by a separate elevator from the lobby. Public Space Guests will arrive at a well-designed door on the south side of the hotel. They will be greeted by a uniformed valet and assisted by one or more bellmen. Once inside a dramatic ground floor lobby they will be escorted to a glass elevator that will take them non-stop to the lobby on the 30th floor. Exiting the elevator they will cross the small distance to the front desk that is backed up to a expansive glass wall that overlooks the French Quarter and the Mississippi River. Ample seating areas will provide space for quiet coffee or cocktails. In the afternoons formal tea will be served. Once checked in, which can be accomplished by app for those who prefer a high-tech method, they would proceed down to their room. On the same level nearby would be the distinctive club, with the feel and some of the artifacts from the original operation on this floor when the building was the home to the World Trade Center. Live entertainment will be provided in the lounge Wednesdays through Saturdays, or more often as demand requires. The club may feature an oyster bar providing New Orleans themed appetizers and bar food. Just beyond the club would be the casual fine-dining restaurant. The restaurant will be a chef-managed, high-end venue that embraces New Orleans cuisine in a respectful but fun way. Service will be prompt and anticipatory but not formal or stuffy. Great food, great service, great views and a great time will be hallmarks of the restaurant and bar operation.

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The 30th floor lobby will also have a gift shop and a professionally staffed business center with express shipping and the latest business technology. Guests will have access to a professional concierge at a desk in the lobby. The concierge will not only arrange restaurant reservations and tickets to attractions and events but will also curate special behind the scenes tours of locations and events that are not generally available to the public. Meetings space will include an elegant 8,000-square foot ballroom with protruding ceiling to floor glass walls on the west side facing Harrahs Casino and on the east end overlooking the Mississippi River. Blackout drapes will darken the room when required for audio-visual presentations. Escalators will allow easy flow from the ground floor drop off area. Meeting facilities will include 7,500 square feet of flexible breakout space on the third floor and an additional 8,200 square feet of executive conference center quality space including ergonomic chairs on the fourth floor. Custom conference services will be available to all meeting planners. The fourth floor will also house the offices of the World Trade Center of New Orleans. On the roof of the ballroom will be a deck that will have a negative-edge pool on the east side as well as a lap pool for more serious swimmers. Landscaping, fire and water features as well as a fashionable bar and restaurant will create a welcoming venue for socializing and people watching. Cabanas and sun shelters will make this a comfortable place to relax for much of the year. This deck will connect at the fifth level with a fitness facility and luxury spa. This level will also house a party room and theater for use by apartment residents. Alessandra Residences The Alessandra Residences offer luxury high-rise apartment homes in the heart of New Orleans. Ranging from floors 17 through 39, residents will enjoy breathtaking views, high ceilings, granite countertops in kitchen and baths, open kitchens with island bar areas, stainless steel appliances including side-by-side refrigerators, iPod docking stations and built-in speakers, wood and tile flooring, custom track lighting, computer nooks and work desks and garden tubs. Interior corridors are styled with local art and soothing music. An expansive outdoor deck offers a large negative-edge saltwater pool as well as a lap pool. You can enjoy sunsets on the terrace sundeck or kick back in the residents-only sports lounge and Internet caf.

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Because the residences share the World Trade Center Building with the luxurious Hotel Alessandra New Orleans, apartment residents will have access to a cutting edge 24-hour fitness center, world-class spa, and hotel services such as housekeeping, room service and concierge service as well as preferred reservations in all of the hotels venues including a jazz lounge on the 33rd floor to be headlined by Kermit Ruffins. Motor Court and Parking This five-star hotel and residential building requires a well-functioning motor court entrance to accommodate residents and visitors. Traffic jams or long waits in line would inconvenience patrons and other vehicular traffic and pedestrians along this main avenue. Therefore, Two Canal Street Investors, Inc. will construct a covered motor court adjacent to the subject property on the current lawn on the Hilton Hotel (south) side. In this way, arriving hotel guests and residents or those using valet services will have adequate room. This roofed component will also provide protection from the elements. Parking requirements for this five-star hotel and residential redevelopment plan will be provided under the proposed NOBC Lease for market-rate parking in the buildings original parking structure adjacent to the Hilton Hotel. Handicapped spaces and check-in parking spaces on ground level at the parking court will also be provided for the hotel and residences. Above the motor court would be the offices of the Louisiana Maritime Museum and above that an 8,000-square foot high-ceilinged ballroom, connected to the World Trade Center building at the third level. The ballroom would have glass walls on west side (Canal Street) and east side (Mississippi River) providing views not available in competing venues. The top floor will feature negative-edge and lap pools, as well as outdoor social and recreational space overlooking the City and Riverfront. Service vehicles will continue to use the south service entry to the existing loading docks. It is anticipated that two docks and one trash compactor will adequately service the project. Please see suggested amendments to the Parking Lease (Exhibit II). We will operate the garage at market rates. The number of spaces we lease will be equal to the required number of spaces per local regulations. If the proposed changes currently in from of City

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Hall are approved, our allotment of spaces will decrease to conform to the new regulations. We will provide valet service from the ground level of the new adjacent building. The valet will use the space as a staging area for apartment tenants and guests of the museum, hotel and restaurants. 6. Operational and Management Hotel Alessandra New Orleans Recent research has identified a number of characteristics about modern hotel consumers:

They do not trust corporations; They are not brand loyal if they have one frequent traveler card, they have four or more; They get all of their information from the internet; and They do not trust published ratings such as AAA but do trust peer-review websites like Yelp, TripAdvisor and Zagat. With an increasing number of user-generated reviews and people reading and acting on them, the impact of the guest experience (guest satisfaction and dissatisfaction) directly impacts hotel selection and, consequently, has a quicker economic impact. The guest experience has never mattered more. Valencia Group personnel are experts in positioning, selling and marketing independent hotels. We have our own booking engine and call center, outperforming the legacy brands in the markets where we compete while reducing or eliminating costly third party transaction and reservation fees. Creating a memorable guest experience is part of the fabric of our culture. Every employee is empowered to impact the guest experience from the front desk clerk, to the property engineer, to the hotel PBX operator.

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Hotel Sorella CityCentre, Houston Guest experience is so important to Valencia that we query our guests by email while they are still in the hotel to inquire about whether there is anything we can do to improve their stay. All hotel managers seek comments from their guests, but it is the rare few that care

enough to improve the guests experience before he or she leaves the property. Hotel staff respond immediately to guest comments. The general manager, if not already involved, reviews all comments at least daily. Valencias EVP Operations reviews comments at least weekly and all comments (positive and negative) are sent to Valencias other principals weekly. This approach results in Valencias hotels having some of the highest guest satisfaction in the industry. Website Development : Valencia Group has partnered with Vizergy Digital Travel Marketing. Vizergy is a full-service hospitality digital marketing firm with a diverse group of independent boutique hospitality and technology professionals. Vizergy provides a scalable formula for success leveraging technology and an understanding of Valencia Group and our customers. This in-depth knowledge assists Valencia in out-performing the competition and driving increased direct revenue. Utilizing a proven web management platform and a full scope of digital marketing services the Valencia and Vizergy partnership is strategic in determining digital marketing both currently and for the future. We have a centralized, unique, long-term, one-on-one relationship with a dedicated Vizergy Strategic Account Services team allowing Valencia Group to maximize online marketing and revenues through collaboration and strategic thinking across all brands.

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Valencia Group websites are award winning within the web development and marketing community. While look, feel and design are critically important, Valencia Group websites are designed and developed for conversion, reach, visibility, ranking and functionality for the user. Our goal is to drive business to our own web-booking engine that has a reservation cost of only $200 per month and no third party transaction fees.

Hotel Valencia Santana Row, San Jose, California New sites are being built in responsive design that enables the site to be viewed dynamically across all platforms, from desktop, tablet and mobile. The Vizergy Content Management System (CMS) provides us the capability and ease to update website content

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to stay relevant and current without the expense of paying a third party. Located in the web management platform, Valencia Group not only can access the CMS, we have access to reporting that enables us to track our results by service such as Search Engine Optimization (SEO), Pay Per Click (PPC) and more. Through Adobe Site Catalyst, Valencia and Vizergy can take a deep dive into the data focusing by hotel to deliver success metrics. We established key strategic partnerships and we pride ourselves on being an expert in this realm. We are able to drive up to 40% of our business through our own website and booking engine. We avoid commissions, third-party fees, Global Distribution System (GDS) transaction fees, etc. with every reservation that we create and capture. Valencia Group websites are award winning! Awards that we have received within the last five years include: 2014 W3 Silver Award Custom Mobile Website, Lone Star Court 2013 Adrian Awards Silver Digital Marketing Excellence, Valencia Group Portfolio 2011 Gold Magellan Award Hotels & Resorts Web Marketing & Advertising, Hotel Valencia Santana Row 2011 Travel Weekly Gold Magellan Award Valencia Group Search Engine Marketing Campaigns 2010 Davey Awards Silver Valencia Group 2010 W3 Award Hotel Valencia Riverwalk 2009 Adrian Awards Bronze Hotel Valencia Riverwalk 2009 Summit International Awards Bronze Hotel Valencia Santana Row Search Engine Optimization involves short-term, mid-term, and long-term sustainable strategies to gain visibility in a highly competitive arena. SEO requires constant monitoring and optimization throughout the year to drive traffic and revenue through natural search. Our strategic partnership with Vizergy allows us to adjust to changes in algorithms, keyword traffic sources, social media and emerging trends. Vizergy assists us with the hotels Pay Per Click campaign. PPC strategies include: keyword traffic research visibility growth of revenues campaign optimization on a monthly basis Our PPC advertising campaigns perform at a return on ad spend from 1187% to 2449%. Through our partnership with Vizergy we collaborate, review, and determine future digital marketing direction through the latest technology with transparent trackable results.

Central Reservations Office The effectiveness of our people is greatly enhanced by our investment in systems and infrastructure. Valencia has its own Central Reservations Office (CRO) based in San Antonio, Texas where labor cost is effective, reliable and plentiful. This CRO has operated since the first Valencia Hotel in 2003. It operates 24 hours per day, 365 days a year. The 43

CRO significantly reduces operating costs of Valencia-managed hotels and allows hotel employees to focus on the number one priority of enhancing the guest experience. Our state-of-the-art CRO phone system will recognize calls from Hotel Alessandra New Orleans and the agents will customize the guest experience to the location of the property. The transfer will be seamless to the hotels guests. In 2013 and 2014 35% of our rooms revenue was generated by our CRO. Valencia Group also offers Live Chat on our websites. Online Travel Agents Because of the strength of our CRO and website booking engine, unlike many independent operators, we are not dependent on Online Travel Agents (OTA) such as Expedia.com or Hotels.com. In 2014 the following percent of total occupied rooms was generated by OTAs.

6.2% - Hotel Sorella CityCentre, Houston, TX 5.2 - Hotel Valencia Santana Row, San Jose, CA 24.2% - Hotel Valencia Riverwalk, San Antonio, TX 18.2% - Hotel Sorella Country Club Plaza, Kansas City, MO (opened Nov. 2014) The higher percentage of OTA business for San Antonio reflects both the distressed nature of this over-built market and the high percentage of leisure travel. Hotel Sorella Country Club Plaza is in its first year of operation so the percent of OTA business will decline as it reach stabilization in 2015. Since New Orleans is a largely a leisure market, it is still a very robust destination. We would anticipate about 12% or less of our room nights to be generated by OTAs.

Hotel Sorella Country Club Plaza, Kansas City, Missouri

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Leisure Business In San Antonio, a significant leisure market, we generate a 129 RevPAR penetration index against our competitive set. One of the things that really sets us apart is our ability to attract leisure business in predominantly corporate markets such as Houston and San Jose. Even though there are no leisure attractions proximate to either hotel, on Fridays and Saturdays very challenging periods in strong corporate markets we average 170 RevPAR penetration on weekends in San Jose and 174 RevPAR penetration on weekends in Houston.

Lone Star Court, Austin, Texas

Restaurant and Bar Operations We emphasize food and beverage operations in all of our properties. Rather than going on about our awards and accolades [such as our Radio Milano restaurant at Hotel Sorella CityCentre in Houston being rated number 7 in the top 10 best new restaurants of 2014], a recent review will give you an objective insight into the impact our F&B has on our guests. The following is a January 14, 2014 review by Angela Bond, a critic with Pitch Dining about our Rosso restaurant in Hotel Sorella Country Club Plaza in Kansas City.

Rosso Finds a Brilliant New Color for Italian Its been a long time since a Plaza restaurant justified its buzz. The sexy, inventive new Italian establishment inside the new Hotel Sorella does and then some.

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Rosso (it means red in Italian) is a fresh, vibrant addition to the Country Club Plaza. The seventh-floor restaurant is officially Italiano only during the evening, and even then, executive chef Brian Archibald stresses that hes not turning out that countrys traditional cuisine. I dont want people to think they can come here for a plate of scampi, he says. For that, after all, you can still go elsewhere on the Plaza. And I dont want scampi here anyway, not when I can have Archibalds starter of roaster prawns, offered on a cloud of creamy herbed polenta. Better yet, I can eat more of the wood-roasted prawns that come atop a dish of linguini tossed very discretely in fresh basil pesto. According to the menu, that latter dish isnt pesto linguini but Linguini (pesto-ish). The menu has a tendency toward cuteness especially on the dessert list expressed primarily with an abundance of quotation marks, as in a risotto verde that lists among its ingredients green olive dirt). That sounds grating on paper, but when youre sitting in this sleek but informal space, its just another sly detail in a very likable venue. Its far less serious than youd expect from a place where the average dinner tab for two runs at least a C-note. Is Rosso worth the dough? Absolutely. The dining room done in shades of Pompeian red and black with soft white upholstered furnishings is shiny and sophisticated and inviting. And Archibalds culinary sensibility is as distinctive as that of the hot young chefs in Westport or the Crossroads (other parts of town where scampi is, thankfully, off the table).

The first night I dined here, I was seated at a table near the windows, which overlook not the postcard-pretty Plaza but the winding stretch of Ward Parkway leading to the neighborhoods western side. I found myself preferring that view, with flowing headlight

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ribbons replacing post-holiday Plaza lights and the strolling shoppers. Theres something deliciously subversive in a room confident enough to face the wrong way. This renegade quality extends to Archibalds spin on Italian favorites. The spaghetti and meatball, for example, is made not with spaghetti but with the thicker, ropier bucatini noodle and topped with a single, handball-size sphere of pork, veal and beef molded around a center of meaty Bolognese sauce. At $28, its one of the least costly dishes on the dinner menu, and its memorably satisfying. That goes as well for one of the better starters, a big bowl of peppery wild-boar sausage smothered in a parmesan broth and scattered over and around the lightest, most delicate pillows of gnocchi youll find in the metro. The menu isnt elaborate. There are just 10 entres, and only one of them, a risotto with fresh asparagus and summary sweet peas, is meatless. But when Archibald scores, he does so masterfully. Case in point, a gorgeous dish of succulent veal short ribs, braised for six hours with blood-orange juice and lemon zest and served with a jumble of pappardelle streamers, disarmingly dart from the evanescent blood-orange-butter sauce. The ribs were so rich that I almost regretted having started the meal with a cup of luscious cream soup made with parsnips, Granny Smith apples and chestnuts. Almost more regrettable is that you cant have this nearly perfect soul as a main course with, say, a few slices of nutty, crusty bread. I made a separate trip to sample Rossos ruby-red beef carpaccio, sliced from Kansas wagyu and arranged like flower petals around a pile of spicy arugula lightly dressed in lemon juice and olive oil. Its not an inexpensive starter, but on the bitter night I ordered it seated this time near the rooms glass-paned gas fireplace I felt that I deserved it. (This room makes you feel a certain welcome entitlement. Own the feeling.) I was certainly treated as if I deserved it. The service at Rosso is low-key but gracious and observant. The restaurants manager, Dean Smith, knows his stuff: He was the general manager at the legendary Starkers for years. The dessert list at Rosso is unabashedly arty, centering on such dishes as open-fired rosemary-mascarpone cheesecake and almond-butter cups made with burnt bananas. I usually detest deconstructed sweets and smores about equally, but the smores and berries here somehow won me over. If you think those ingredients dont really go together, well, thats why you share. I liked nibbling on the desserts house-made honey marshmallows and intensely flavored cinnamon malted ice cream, while m dining companion gobbled up its pieces of dark chocolate and fresh berries. As in all hotel dining rooms, Rosso wears a different daytime personality. The breakfast menu is straightforward, and the lunch selections include somewhat smaller versions of a few dinner items. Oddly, theres also a midday version of a blue-plate staple, the sloppy Joe; this one, though, is made with lamb, pork, veal and beef poked into freshly baked bread. I suppose, by now, I dont have to tell you that its called the sloppy Luigi or that its terrific.

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Partners PMS, GDS Valencia properties utilize the Pegasus platform for the GDS and would recommend an interface for all reservation transactions with Opera. We believe that it is not necessary to affiliate ourselves with soft brands (e.g. Autograph, Curio, Preferred, Small Luxury Hotels, etc.). We have proven success stories. Hotel Sorella CityCentre, for example, opened as an independent and utilized Pegasus as the GDS representation company. Sorella was number one in their competitive set on the GDS within 12 months of opening. We believe that business from the GDS is predominately negotiated accounts which are located in the markets backyard. The Negotiated Sales Managers are very effective when using Valencia Group tactics to move share. Brand Loyalty Program Our Brand Program is stay-driven and called the VVIP Program (Valencia VIP). After a guest stays at any of our properties at least once they are eligible to opt into our program. AVVIP member will receive these benefits:

Express Check-In Personalized Welcome Amenity Complimentary Room Night for Each Eight Paid Room Nights Upgrades Based Upon Availability on Day of Arrival Complimentary Gift Certificates Annual Birthday Gift and Dining Credit Priority Waitlist

Cooperative Marketing All Valencia Group hotels participate in co-op marketing that covers some expenses of marketing efforts. In 2012 we introduced to the Valencia Group website an additional page called the Authentic Experience page. We also have a Valencia Group mobile-compatible website. As we find opportunities to advertise in areas such as in-flight magazines such as Southwest (in flight for Southwest Airlines) or American Way (American Airlines), all hotels will be included. In 2014, Valencia Group was featured in USAirways in a two-page spread in both the June and December issues. In the United Airlines issue of Rhapsody for first and business class passengers, Valencia Group also placed an ad featuring all hotels. Additionally, all properties participated in an in-flight Valencia Group video on American Airlines in conjunction with Getaway Places TV that had exposure on their 777 and 757 aircraft in First and Business Class in October and November 2014. Cooperative marketing covers the quarterly e-blasts sent to the entire database for promotions of packages and special offerings. This expense also covers the light boxes that appear on the website. Additionally, co-op marketing covers Pay Per Click internet advertising managed by the e-Commerce Manager. Valencia Group has an agreement with Sojern that serves up ads for the collection and individual hotels based on behavioral targeting. All properties participate in a national program that secures placement in high-end publications such as Cond Nast, Vanity Fair, New Yorker, and Architectural Digest in various markets throughout the year. Cooperative Marketing and branding also creates and promotes brand initiatives that support the brand such as National Gin Day with special promotions in our unique bar environments and National Kiss and Make Up day for the

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perfect romantic stay at a Valencia Group hotel. In an effort to surround a cause and give back to our community, Valencia Group hotels rallied behind promotions benefitting American Cancer Society while offering fun packages and drink offers with a portion going to American Cancer. In 2014, Valencia Group placed the finishing touches on brand scents which are now in spray and candles for the three brands with our specialty scents: Sevilla, Linobello, and 1952. Cooperative dollars also support the group market segment across the brand through participation in eblasts and advertisements with Plan Your Meetings and Smart Meetings. Valencia Group recognizes the benefit of building relationships and advertising with our own industry and making sure we are recognized as a market leader among our peers. We advertise and run corporate profiles in: Hotel Business, HOTELS, and Hotel Management. Because of these deep relationships, we have had recognition and exposure with Hospitality Design featuring our VP of Branding & Design, Brandi Montgomery, a feature in Leisure & Hospitality Magazine and a full feature of our President, Doyle Graham, Jr. in Hotel Management Magazine. Mr. Graham was recognized as the Hotelier of the Year by the Boutique & Lifestyle Lodging Association. Management/Brand Corporate Support Rooms

Supported by Executive Vice President Operations, Roy Kretschmer Supported by Foster Burnett, Area Director of Operations Valencia standards, policies and procedures are implemented and maintained through weekly reporting audits and bi-annual, third-party comprehensive quality and service shops Food & Beverage Supported by Executive Vice President Operations, Roy Kretschmer Supported by regional Food & Beverage Director, Juan Flores, based in Houston Menu design, costing and fresh food sourcing is coordinated by the Valencia Corporate Chef. Although addressed in the purchasing section, it should be noted that while supplies and collateral are typically volume-priced via Valencia Group accounts, food is sourced for quality and freshness LOCALL