Kimpton Hotels & RestaurantsHotel Development & Historic Tax Credits

Kimpton Hotels & Restaurants

2

- Kimpton is the largest owner, operator and developer in the boutique segment

- Experienced in-house design and construction team

- Proven ability to profitably operate unique, high-volume chef-driven restaurants

- Growing brand recognition and loyalty

- Strong culture of innovation, service, and care for the environment

3

Kimpton Hotels & Restaurants

ArlingtonHotel Palomar

Phoenix Hotel Palomar

Scottsdale FireSky Resort & Spa

Cupertino Cypress Hotel

San Diego Hotel Solamar

San Francisco Argonaut HotelHarbor Court HotelHotel MonacoHotel PalomarHotel TritonPrescott HotelSerrano HotelSir Francis DrakeTuscan Inn

Portland Hotel MonacoHotel Vintage Plaza

Seattle Alexis HotelHotel MonacoHotel Vintage Park

Vancouver Pacific Palisades

Denver Hotel Palomar

Austin Hotel Van Zandt

Salt Lake City Hotel Monaco

Aspen Sky Hotel

Denver Hotel Monaco

Properties Under Development

Current Properties

DallasHotel PalomarHotel Lumen

South Beach FairwindRitz Plaza

MiamiEpic Hotel

AtlantaHotel Palomar

NashvilleHotel Palomar

ChicagoHotel AllegroHotel BurnhamHotel Monaco

ChicagoHotel Palomar

MilwaukeeHotel Palomar

PhiladelphiaHotel PalomarRobert Morris BaltimoreHotel MonacoPotomacPark PotomacWashington DC

Hotel GeorgeHotel HelixHotel MaderaHotel MonacoHotel PalomarHotel RougeTopaz Hotel

AlexandriaHotel MonacoMorrison House

New York70 Park AvenueThe Muse Hotel

New YorkVu HotelEventi Hotel

BostonNine Zero HotelOnyx Hotel

CambridgeHotel Marlowe

Alexandria Lorien HotelLos Angeles

Hotel Palomar Westwood

Key LargoResort Hotel

Orange CountyGuasti Hotel

CharlestonMidtown Hotel

4

Historic Tax Credit Development

- 16 historic tax credit projects

- Over $50 million in tax credits generated

- “Every Hotel Tells a Story”

“They stepped in where others had given up hope, turning white elephants into magnificent gems. With preservation at the core of its corporate strategy, Kimpton is a

model for the private sector”

-Richard Moe, President, National Trust for Historic Preservation

;

5

Hotel Argonaut, San Francisco, CA

6

Hotel Argonaut, San Francisco, CA

7

Hotel Argonaut, San Francisco, CA

8

Hotel Monaco, Washington, D.C.

9

Hotel Monaco, Washington, D.C.

10

Hotel Monaco, Washington, D.C.

11

Keys to Success

- Be flexible and creative with programming

- Work within historic restrictions

- Be prepared for environmental risks and issues

- Public & private partnership

- Conversion of the Architects Building, an existing office building, into a Hotel Palomar

- Located at 117 S. 17th St. in downtown Philadelphia, proximate to Rittenhouse Square

- 230-room Hotel, including 19 suites

- 120-seat signature restaurant

- 6,500 SF of meeting space, including a 2,100 SF ballroom located on the on the 24th floor

- LEED certified

- Demolition began in Q1 2008 with full scale construction in Q2 2008

Hotel Palomar - Philadelphia, PA

12

13

Tax Credit Structure

.01%

PalomarPhilly, Inc.(ManagingMember)

HTC Investor

Palomar PhillyMT, LLC

(Master Lessee)

Kimpton Hotel &Restaurant Group, LLC

KimptonInvestmentPartners IILLC (GP)

LimitedPartners

KHP II Philadelphia, LLC

(Hotel Fee Owner)

99.99%

99 Year Lease

5% Member Interest /FF&E + OS&E Purchase

19 Yr 8 Mo Lease

Palomar PhillyBuilding, LLC

(Hotel Ground Lessee orDevelopment Entity)

KHP II Palomar Philly Hotel, LLC(Master Sublessee)

15 Year Sublease

Mgmt.Agmt.

100%

Mgmt.Agmt.

Put Option

KearnyStreet II LLC

KHP Hotel Holding, LLC

KHP Fund II,L.P.

50%

KimptonGroup

HoldingLLC

50%

$50 Million Construction Mini-Perm Loan$6 Million Welcome Fund Loan

Guarantor (with mortgage as

collateral)

RenovationAgmt.

95%

100%

Bridge Loan for 50% of HTC Equity

- Choose your consultants and advisors wisely

- Choose a lender that has experience with tax credits and make sure their lawyers do as well

- If possible, design your basic equity and management & development fee structure with the tax credit structure in mind

- Become an expert on the details of the models and the legal documents

- Consider local tax issues – transfer taxes, business privilege taxes, etc.

- Evaluate reportable transaction implications

Tax Credit Syndication

14