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2000-027 Convention Center Capital Improvement Fund Appropriation
AN ORDINANCE ORDINANCE NO. 2000- 27 amending the 2000 budget for the City of Yakima; and making an appropriation of $50,000 within the 370 — Convention Center Capital Improvement Fund for expenditure during 2000 to provide Architectural, 'Marketing and Other Professional Services. WHEREAS, the amount of $50,000 must be appropriated within the 370 -- Convention Center Capital Improvement Fund for expenditure during 2000 to provide Architectural, Marketing and Other Professional Services, and WHEREAS, at the time of the adoption of the 2000 budget it could not reasonably have been foreseen that the appropriation provided for by this ordinance would be required; and the City Council finds that an emergency exists of the type contemplated by RCW 35.33.091 and that it is in the best interests of the City to make the appropriation herein provided, now, therefore, BE IT ORDAINED BY THE CITY OF YAKIMA: Section 1. The amount of $50,000 is hereby appropriated from the Unappropriated Fund Balance in the 370 - Convention Center Capital Improvement Fund to account number 370-4-370-328-1909-57520-410 as a 2000 appropriation. Section 2. This ordinance is one making an appropriation and shall take effect immediately upon its passage, approval and publication as provided by law and by the City Charter. PASSED BY THE CITY COUNCIL, signed and approved this 97-77/ day of �� 2000. ATTEST: CITY CLERK First Reading: Publication Date: Effective Date: 7-26--gerso cje 05/30/00 ARY PLAa, MAYOR • • BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.: For Meeting of: June 6, 2000 ITEM TITLE: Consideration of: 1) a Resolution of intent to create a Public Facility District for the purpose of expanding the Yakima Convention Center, and 2) an Ordinance appropriating $50,000 from the Convention Center Capital Reserve account to the Convention Center Professional Services Account. - SUBMITTED BY: Cook, Director of Community and Economic Development CONTACT PERSON/TELEPHONE: William Cook 575-6227 SUMMARY EXPLANATION: During the 1999 legislative session, with the leadership of State Senator Alex Deccio, the State of Washington adopted a new program to assist communities, such as Yakima, to build new or expand existing "regional" public facilities in their communities. "The legislative authority of a city or a group of contiguous cities located in a county or counties each having a population of less than 1 million may create a public facilities district for the purpose of building, remodeling, owning and operating a regional center. A regional center means a convention, conference, or special events center, or any combination of facilities and related parking facilities that serve a regional population and that costs at least $10 million, including debt service. The boundaries of the city -created public facilities district must be the same as the boundaries of the city or cities that establish it. A city -created public facilities district is governed by either a five -member or seven -member board of directors (depending upon whether the district is created by a single -city or multiple cities) appointed by the legislative body that created the district. All members of the board of directors are appointed by the legislative authority, but no members of the legislative authority can be members of the board of directors. A public facilities district is given authority to use various financing mechanisms to assist in the construction, rehabilitation, or operation of one or more regional convention, conference, or special event centers including: Continued to next page Resolution X Ordinance Contract:" Other Specify: Funding Source: 370 Convention Center Capital Reserve APPROVAL FOR SUBMITTAL: City'Manager STAFF RECOMMENDATION: Approve resolution of intent and read only the ordinance appropriating funds. This ordinance should be acted upon on second reading on June 27, 2000. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: • General Obligation and Revenue Bonds • Charges for; use of facility, admissions and vehicle parking • Taxes on Admissions and Vehicle Parking • Local Retail Sales and Use Tax • State Sales and Use Tax Credit The Project: In 1974 the City initiated a program to construct the City of Yakima's Convention Center (Bicentennial Pavilion) located at 10 North 8th Street. The project was built at a cost of approximately $2,250,000 with funding provided through a general obligation bond. In the early 1990's'attention turned to future expansions of the Center to meet a growing demand for convention space and take advantage of the opportunity to extend a state credit of hotel/motel bed tax utilized to pay debt service on the original building. A Phase II expansion of the Convention Center including approximately 21,000 square feet of additional space and remodeling of the existing building, was completed in 1996 at a cost of approximately $6 million utilizing a general obligation bond with repayment dedicated from the State's credit of Hotel/Motel bed tax plus a portion of the local option bed tax. The state legislature has provided a window of opportunity for cities to take advantage of the new Public Facilities District (PFD) Program, but this "open window" has a deadline. The law requires that all projects to be funded under this new provision be started construction by January 1, 2003. At a Council Study Session held on Tuesday, April 18, 2000, a staff briefing on the Public Facilities District State enabling legislation was provided. Although additional legal issues needed further study, the consensus of the Council was to: 1. Utilize the Council's Economic Development committee to continue discussion and planning for a Public Facilities District project to expand the Yakima Convention Center 2. Invite the adjacent cities of Selah and Union Gap that benefit from the Convention Centers contribution to the local economy to join Yakima in funding this project. 3. Research options to 1) provide the required 33% match and b) to maximize the Council's ability to retain control over this project and Public Facilities District activities. The Economic Development committee has met twice, April 26, 2000 and May 17, 2000, to consider additional information from our attorney, Forest Walls of Preston, Gates & Ellis. We have briefed each Council member on our recommendation to use the city of Yakima's real property interest in the existing Convention Center as the required project match, and transfer ownership of the existing Convention Center to the Public Facility district. In addition, it is the opinion of Forest Walls that "the City may utilize one or more of the following mechanisms for maintaining control over the Public Facilities District's development, financing, and operation of the expanded Convention Center: • The City's power to appoint the Public Facilities District board members • The Public Facilities District Charter • The contractual arrangements between the City and the Public Facilities District, and • • • The conditions attaching to the transfer of any real property from the City to the Public Facilities District. With your approval of the attached resolution of intent and appropriation of funds within the Convention Center budget, staff will begin work on the "preliminary action item list" attached and more specifically: 1. Contract for an updated market study for the expansion of the Convention Center. 2. Contract for preliminary architectural work to determine the feasibility of this expansion project within estimated $5 - $6 million dollar budget that will be available. 3. Begin negotiations with the Department of Revenue on the City's match contribution plan. The attached ordinance appropriating funds should be read only at the June 6, 2000 meeting and acted upon on second reading at your meeting on June 27, 2000. 0121E-k- ���. iI 0(1 1997 Edition -Electronic Format AIA Document A101-1997 Standard Form of Agreement Between Owner and Contractor where the basis of payment is a STIPULATED SUM AGREEMENT made as of the 41{9th, day of August in the year of 2002 (In words, indicate day, month and year) BETWEEN the Owner: (Name, address and other information) City ofYakiina 129 North.2nd Street Yakima; ;WA`98902 and the Contractor: (Name, address and other information) Paas General'Contredtors,yiT-i 1315, North Monroe Spokene 1VA,99201i The Project is: (Name and location) Yakima",Convention`,Centeripcpans ion 110. th 8th Street Makin WA` 98'901' The Architect is: (Name, address and other information) WardelI Arel iiteate P S:' 509 West Chestnut Maki ma;�VVA",;98902 The Owner and Contractor agree as follows. ARTICLE 1 THE CONTRACT DOCUMENTS The Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement; these form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents, other than Modifications, appears in Article 8. ARTICLE 2 THE WORK OF THIS CONTRACT The Contractor shall fully execute the Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others. ARTICLE 3 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION 0 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, O 1997 by The American Institute of Architects. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates US copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date of expiration as noted below. THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY I5 ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401. AIA Document A201-1997, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. This document has been approved and endorsed by The Associated General Contractors of America. 01997 AIA® AIA DOCUMENT A101-1997 OWNER -CONTRACTOR AGREEMENT The American Institute of Architects 1735 New York Avenue, N.W. Washington, D.C. 20006-5292 3.1 The date of commencement of the Work shall be - - di ferent -date 4s -stated -belew-previsien -is a -fes -the -date - e -be fixed in a notice to proceed issued by the Owner. (Insert the date of commencement if it differs from the date of this Agreement or, if applicable, state that the date will be fixed in a notice to proceed.) If, prior to the commencement of the Work, the Owner requires time to file mortgages, mechanic's liens and other security interests, the Owner's time requirement shall be as follows: N/A 3.2 The Contract Time shall be measured from the date of commencement. 3.3 The Contractor shall achieve Substantial Completion of the entire Work not later than three:hundred;(300,ca lendar i days from the date of commencement, er• as-fellews: (Insert number of calendar days. Alternatively, a calendar date may be used when coordinated with the date of commencement. Unless stated elsewhere in the Contract Documents, insert any requirements for earlier Substantial Completion of certain portions of the Work.) , subject to adjustments of this Contract Time as provided in the Contract Documents. (Insert provisions, if any, for liquidated damages relating to failure to complete on time or for bonus payments for early completion of the Work.) For eachcalendar day after thefeontracted:;date fixed forsubstantial completion: of the,proiect, as adlustednby.change order, if'appicable;`.that•the;work remai41 THIS DOCUMENT HAS IMPORTANT LEGAL CONSEOUENCES. CONSULTATION WITH AN ATTORNEY 15 ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401. AIA Document A201-1997, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. s '' - ;, • This document has been approved and unto"rripieted;'the t ontractora r `" C. gees to�payand'autforizesotleOwner` to ,deductany endorsed by The Associated General money' due,; or' coming due- to' the' Contractor:. the, sum of`$2,200 00 as,;liquldated;! Contractors of America. damages,.not as a, penalty, provided: that= nothing contained herein: shall: preclude the" Owner;from recoveringactualpdamages,ina .greater amount where'thesame are; proven tyaapreponderanceof:thee'evidence! The time between the date-established°as Substantial Completion and the date1 fixed'as`,Finalmption le=shall;not exceed thirty.(30)scalendar das: of,yw hal� right toh'e Owner, of.Iiquidated damages°isanot_affected bypartl competiorf, occupancy, or beneficial occupancy) Liquidated' damages: do not=relieve the Contractorfrom; liability for damages due to other breaches � TheContractor,,,byL submitting -items bid, assumes responsibility fora liquidatedidaages and believes them to>be reasonable mDisagreement with they M amountof Iiquidated.damages are waivedunless a rticulated m writing, at the of-thebid ARTICLE 4 CONTRACT SUM 4.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor's performance of the Contract. The Contract Sum shall be a .construction. cost;of1, =Y,..x.3 � 4" ar.: 411:4ii-",110;ttr214V-11.g7141;i: `-: '-a_"'.s,.-Y.":.r1e,:., .-. n - Four7 Million Eight -H,�undred,Five Hundred, Eighty and no 00. Dollars: ($4,886;580.00) pluses Tax at 7.9% of Three Hundred Eighty-six=Thousand,Fortyand; no/00 p011ar_ ($386;040.00)° for a total. -cost sr,of Five1 Million.:TWo ;Hundre'd Sevent a'two �_. '� ,s . `ro l Doll w, �.._._..... y- ' Thousand: Six.' Hundred:Twentyand no/00 Dollars (s 5;272,620 00 ), subject to additions and deductions as provided in the Contract Documents. 4.2 The Contract Sum is based upon the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner: (State the numbers or other identification of accepted alternates. If decisions on other alternates are to be made by the Owner subsequent to the execution of this Agreement, attach a schedule of such other alternates showing the amount for each and the date when that amount expires) 0 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, O 1997 by The American Institute of Architects. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates US copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can Inn ror.r..d.1.-e.1 ;., ee,-..rrlor,,o ,.,;+h ,,....r Bentsen ,.,t+h.,, 4 ,,,,l,ti,.n ..r.#;1 rhe rlmte ..F nvr,Goti.,r, .r ...steel 01997 AIA® AIA DOCUMENT A101-1997 OWNER -CONTRACTOR AGREEMENT The American Institute of Architects 1735 New York Avenue, N.W. Washington, D.C. 20006-5292 •'A elt mate No. 19 Alternate No'' 2 g Alternate No. 354' Alternate No. 4: Alternate,No..5` Altenate',No'°.6 V L AltehnategNo °'8^ AI_ternate.No`. Alternate'No.:1 Alternate No:•.12 arpet fo existing ball,roq q ?w Y--^ �g ,avrng^and�improvements�fornew east packing lot laving and improvements;, for new,westparking loth, Kitchen,Shell Addition pgrade' exterior, sign to an electronic readerboa da Replace: existing:HVAC: units;RTU-5 -8 =9 : and -1 Q !inyl°wallcovering In lieu of paint in lobbies finyl: wal jcoyeri ng -in new$meeti ng;rooms Vinyl' wallcovering'in`'old meeting `rooms: Dimming; system for addition:. 4.3 Unit prices, if any, are as follows: None ARTICLE 5 PAYMENTS 5.1 PROGRESS PAYMENTS 5.1.1 Based upon Applications for Payment submitted to the Architect by the Contractor and Certificates for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in the Contract Documents. 5.1.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of the month,:'-er• as-fellews: 5.1.3 Provided that an Application for Payment is received by the Architect not later than the i3Othday of a month, the Owner shall make payment to the Contractor not later than the 4,091 day of the following month. If an Application for Payment is received by the Architect 1,� . after the application date fixed above, payment shall be made by the Owner not later than 45 days after the Architect receives the Application for Payment. 5.1.4 Each Application for Payment shall be based on the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Contract Sum among the various portions of the Work. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor's Applications for Payment. 5.1.5 Applications for Payment shall indicate the percentage of completion of each portion of the Work as of the end of the period covered by the Application for Payment. 5.1.6 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows: .1 Take that portion of the Contract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Contract Sum allocated to that portion of the Work in the schedule of values, less retainage of five percent ( %). Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute shall be included as provided in Subparagraph 7.3.8 of AIA Document A2o1-1997. .2 Add that portion of the Contract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the completed construction (or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing), less retainage of five percent ( 5%); © 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, CO 1997 by The American Institute of Architects. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates US copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date of expiration as noted below. THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY I5 ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401. AIA Document A201-1997, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. This document has been approved and endorsed by The Associated General Contractors of America. 01997 AIA® AIA DOCUMENT A101-1997 OWNER -CONTRACTOR AGREEMENT The American Institute of Architects 1735 New York Avenue, N.W. Washington, D.C. 20006-5292 .3 Subtract the aggregate of previous payments made by the Owner; and .4 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Paragraph 9.5 of AIA Document A2o1-1997. 5.1.7 The progress payment amount determined in accordance with Subparagraph 5.1.6 shall be further modified under the following circumstances: .1 Add, upon Substantial Completion of the Work, a sum sufficient to increase the total payments to the full amount of the Contract Sum, less such amounts as the Architect shall determine for incomplete Work, retainage applicable to such work and unsettled claims; and (Subparagraph 9.8.5 of AIA Document A2o1-1997 requires release of applicable retainage upon Substantial Completion of Work with consent of surety; ifany..) .2 Add, if final completion of the Work is thereafter materially delayed through no fault of the Contractor, any additional amounts payable in accordance with Subparagraph 9.10.3 of AIA Document A2o1-1997. 5.1.8 Reduction or limitation of retainage, if any, shall be as follows: (If it is intended, prior to Substantial Completion of the entire Work, to reduce or limit the retainage resulting from the percentages inserted in Clauses 5.1.6.1 and 5.1.6.2 above, and this is not explained elsewhere in the Contract Documents, insert here provisions for such reduction or limitation.) N/A 5.1.9 Except with the Owner's prior written `"approval, the Contractor shall not make advance payments to suppliers for materials or equipment which have not been delivered and stored at the site. 5.2 FINAL PAYMENT 5.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum, less retainage; 'shall be made by the Owner to the Contractor when: .1 the Contractor has fully performed the Contract except for the Contractor's responsibility to correct Work as provided in Subparagraph 12.2.2 of AIA Document A201-1997, and to satisfy other requirements, if any, which extend beyond final payment; and .2 a fmal Certificate for Payment has been issued by the Architect. 5.2.2 The Owner's fmal payment to the Contractor shall be made no later than 3o days after the issuance of the Architect's final Certificate for Payment, or as follows: 1' Retainage shallnbe paid when the.,Contractor.has-submitted,=arid the Architect a. ,F � `A ,e'W. �� a.y vtx" a a �.r.""f; F�,:>�,... .s Y ; s pproved, aCertificateeof. Paymentufor;release';of,,retainage�and the Owner has received all matenais and certifications�as required in Section 00800_Article 9;J,y; ,� paragraph 9.;10:2ofsthe $p" ecifications' 4VapvIr THIS DOCUMENT HAS IMPORTANT LEGAL CONSEOUENCES. CONSULTATION WITH AN ATTORNEY I5 ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401. AIA Document A201-1997, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. This document has been approved and endorsed by The Associated General Contractors of America. ARTICLE 6 TERMINATION OR SUSPENSION 6.1 The Contract may be terminated by the Owner or the Contractor as provided in Article 14 of AIA Document A2o1-1997. 6.2 The Work may be suspended by the Owner as provided in Article 14 of AIA Document A2o1-1997. ARTICLE 7 MISCELLANEOUS PROVISIONS O 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, © 1997 by The American Institute of Architects. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates US copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date of expiration as noted below. 01997 AIA® AIA DOCUMENT A101-1997 OWNER -CONTRACTOR AGREEMENT The American Institute of Architects 1735 New York Avenue, N.W. Washington, D.C. 20006-5292 7.1 Where reference is made in this Agreement to a provision of AIA Document A2oi- 1997 or another Contract Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract Documents. 7.2 Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located. (Insert rate of interest agreed upon, if any.) Usury laws and requirements under the Federal Truth in Lending Act, similar state and local consumer credit laws and other regulations at the Owner's and Contractor's principal places of business, the location of the Project and elsewhere may affect the validity of this provision. Legal advice should be obtained with respect to deletions or modifications, and also regarding requirements such as written disclosures or waivers.) 7.3 The Owner's representative is: (Name, address and other information) LoisA:Wardell Wardell -Arch itects ,� ,PS 509' WestChestnut Yakima; WA, 98902 7.4 The Contractor's representative is: (Name, address and other information) James D. Paras Paras: Gerieral,Contractors1n6 131 &North Monroe Spokane; WA'.99201i 7.5 Neither the Owner's nor the Contractor's representative shall be changed without ten days written notice to the other party. 7.6 Other provisions: Noris ARTICLE 8 ENUMERATION OF CONTRACT DOCUMENTS 8.1 The Contract Documents, except for Modifications issued after execution of this Agreement, are enumerated as follows: 8.1.1 The Agreement is this executed 1997 edition of the Standard Form of Agreement Between Owner and Contractor, AIA Document A1o1-1997. 8.1.2 The General Conditions are the 1997 edition of the General Conditions of the Contract for Construction, AIA Document A2o1-1997. 8.1.3 The Supplementary and other Conditions of the Contract are those contained in the Project Manual dated June ,3; 2002 , and are as follows: See`'Attachmei t :; Document Title Pages 8.1.4 The Specifications are those contained in the Project Manual dated as Subparagraph 8.1.3, and are as follows: 8 See:Attaehment,kA;' (Either list the Specifications here or refer to an exhibit attached thisAgreement.) THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY 15 ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401. AIA Document A201-1997, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. This document has been approved and endorsed by The Associated General Contractors of America. 01997 AIA® AIA DOCUMENT A101-1997 OWNER -CONTRACTOR AGREEMENT in The American Institute of Architects 1735 New York Avenue, N.W. Washington, D.C. 20006-5292 O 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974, 1977, 1987, © 1997 by The American Institute of Architects. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates US copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date of expiration as noted below. Section Title Pages 8.1.5 The Drawings are as follows, and are dated June;3, .2.002 unless a different date is shown below: (Either list the Drawings here or refer to an exhibit attached to this Agreement.) Number Title Draw" ing:A20 Drawn 20 Drawing A207- D`rawing,:M201 Drawing ,E20' .Addition °Floor:Plan Kitchen';Shell Additlon.Plans �itcheri SheilAdditlon Elevations: echanical Addition Floor Plan A t•',. ao Electrical Addition'Floor Plan Ag Date ev . July: 38;2002. my 2°2002 I`uly;2 2002 66 14 '2002 ev,.Juri4 002 See Attachments"A";f6176drriplete^drawing lisfl 8.1.6 The Addenda, if any, are as follows: Number Addendumt Addendufr No Addendum No 3 Addendum Addendum'Nos Date une'n17,;2002 JuIy3; 2002'�t« 'July J °-'July 22, 2002d Pages a es +evised M201' E209i l?,5: 9 Z , page05 °A206 )xpages Gpages :+'Revisei'A201 ''page Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding requirements are also enumerated in this Article 8. 8.1.7 Other documents, if any, forming part of the Contract Documents are as follows: (List here any additional documents that are intended to form part of the Contract Documents. AIA Document Azo1- 1997 provides that bidding requirements such as advertisement or invitation to bid, Instructions to Bidders, sample forms and the Contractor's bid are not part of the Contract Documents unless enumerated in this Agreement. They should be listed here only if intended to be part of the Contract Documents.) None' This Agreement is entered into as of the day and year first written above and is executed in at least three original copies, of which one is to be delivered to the Contractor, one to the Architect for use in the administration of the Contract, anal the remainder to the_Qwner. OWNER (Signature /e , A , Z4 /s 7 (7-y / '/A,Vf7651e (granted name and title) A i i c.A i� 4ri,i City Clerk CITY CONTRACT NO: RESOLUTION NO: CON RACTOR (signature) ,s ranted name and title)- / �( I(,E.VE13l O 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1 • • Al :i ', r , © 1997 by The American Institute of Architects. Reproduction of the material herein or �.'uotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution. WARNING: Unlicensed photocopying violates US copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance with your license without violation until the date of expiration as noted below. THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY I5 ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT 0401. AIA Document A201-1997, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. This document has been approved and endorsed by The Associated General Contractors of America. ®1997 AIA® AIA DOCUMENT A101-1997 OWNER -CONTRACTOR AGREEMENT The American Institute of Architects 1735 New York Avenue, N.W. Washington, D.C. 20006-5292 Yakima Convention Center Expansion P. 1 Contract Attachment "A" INDEX TO THE CONTRACT DOCUMENTS Prnjpnt Manual VnlumA 1 Part I BIDDING AND GENERAL REQUIREMENTS (Division 0) 00010 Invitation to Bid 00100 Instruction to Bidders 00200 Bid Form Bidders Check List Non -Collusion Declaration Non -Discrimination Provision Bidders Certification Subcontractor Certification 00500 General Contract (AIA A101 Reference) Performance Bond Form Informational Certificate of Insurance 00700 General Conditions (AIA A201 Reference) 00800 Supplementary General Conditions Certificate of Compliance Form 00900 Special Conditions / Minority and Women's Business Enterprise Policy PART II CONTRACT REQUIREMENTS (Division 1) 01010 Summary of the Work 01030 Altemates 01200 Progress Meetings 01300 Submittals 01311 Prevailing Wage Rates 01445 Building Envelope Design Requirements 01450 Structural Testing and Quality Assurance 01500 Temporary Facilities 01631 Product Substitutions 01731 Cutting and Patching 01770 Cleanup and Project Closeout PART III TECHNICAL SPECIFICATIONS Division 2: Sitework 02070 Selective Demolition 02200 Earthwork 02550 Site Utilities 02740 Hot -mix Asphalt Paving 02750 Portland Cement Concrete Paving and Curbs 02831 Chain-link Fences and Gates 02900 Landscaping and Irrigation 1101.00 Yakima Convention Center Expansion p. 2 Contract Attachment "A" Division 3: Concrete 03100 Concrete Formwork 03200 Concrete Reinforcement 03300 Cast -in -Place Concrete Division 4: Masonry 04810 Unit Masonry Assemblies Division 5: Metals 05120 Structural Steel 05123 Architecturally Exposed Structural Steel (AESS) 05300 Metal Deck 05400 Cold Formed Metal Framing 05500 Metal Fabrications Division 6: Wood and Plastic 06100 Rough Carpentry 06200 Finish Carpentry and Casework Division 7: Thermal and Moisture Protection 07210 Building Insulation 07270 Fire Stopping 07552 SBS -Modified Bituminous Membrane Roofing 07620 Sheet Metal Flashing and Trim 07720 Roof Accessories 07811 Sprayed Fire -Resistive Materials 07920 Joint Sealants Division 8: Doors and Windows 08110 Steel Doors and Frames 08211 Flush Wood Doors 08311 Access Doors and Frames 08360 Roll -up Sectional Doors 08410 Entrances and Storefront 08710 Door Hardware 08800 Glass and Glazing 08900 Glazed Curtainwalls Division 9: Finishes 09220 Portland Cement Plaster (Stucco) 09255 Gypsum Wallboard Assemblies 09310 Ceramic Tile 09511 Acoustical Panel Ceilings 09650 Resilient Base 09681 Carpet 09720 Vinyl Wallcovering (Alternate No. 8, 9, 10) 09840 Acoustical Wall Treatment 1101.00 Yakima Convention Center Expansion P. 3 Contract Attachment "A" 09900 Division 10: Painting Specialties 10155 Toilet Compartments 10431 Signage (Added in Addendum No. 3) 10520 Fire Protection Specialties 10650 Operable Partitions 10700 Exterior Sunscreens 10800 Toilet and Bath Accessories Division 11: 11172 Division 12: 12490 Equipment Residential Appliances Furnishings Horizontal and Vertical Louver Blinds Division 13 and 14: No Work PART IV DETAILS AND NOTES Materials List (Added in Addendum No. 3) Room Finish Schedule (Added in Addendum No. 2) Door Types Door Schedule Detail Index Details Prnjpct Manual Vnlumw 1( Division 15: Mechanical 15010 Mechanical General Provisions 15060 Piping & Accessories 15140A Supports, Hangers, Anchors & Sleeves 15140 Supports, Hangers, Anchors & Sleeves 15170 Electric Motors 15190 Systems Identification 15240 Vibration Isolation 15241 Acoustics 15250 Insulation 15400 Domestic Water Systems 15410 Drainage Systems 15420 Gas Systems 15440 Plumbing Fixtures 15470 Fire Protection Systems 15771 Packaged Air -Cooled Roof -top Unit 15772 Packaged Air -Cooled Roof -top Units RTU -1 through RTU -9 1101.00 Yakima Convention Center Expansion p. 4 Contract Attachment "A" 15555 Duct Silencers 15800 Ductwork 15860 Fans 15900 Building Management System (Added in Addendum No. 1) 1 `000A Controls &Instrumentation (Deleted in Addendum No. 1) 15910 Dampers 15930 Air Terminal Units 15940 Air Outlets & Inlets 15990 Mechanical Systems Balancing 15991 General Mechanical Starting & Testing Requirements 15992 Mechanical Equipment — Equipment Starting & Testing 15993 Mechanical Systems Starting & Testing Division 16: Electrical 16010 Electrical General Provisions 16020 Equipment Connections & Coordination 16110 Raceways & Boxes 16120 600 Volt Wire and Cable 16140 Wiring Devices 16425 Switchboards 16440 Disconnect Switches & Individual Motor Controls 16470 Panel boards 16475 600 Volt Fuses 16500 Luminaries & Accessories 16510 Architectural Lighting 16680 Grounding System 16721 Fire Management System 16740 Telecommunications Raceways and Accessories 16790 Programmable Lighting Control System 16900 Sound System (Added in Addendum No. 2) DRAWINGS (Bound Separately) T-1 Cover Sheet T-2 Abbreviations, Symbols, Drawing List T-3 Codes and Overall Floor Plan A101 Overall Site Plan Al 02 South Site Area Demolition, Utilities, Landscape A103 South Area Site Plan A104 West Parking Lot Grading and Paving A105 East Parking Lot Grading and paving D201 Demolition Floor Plan A200 Overall Floor Plan, Wall and Sheathing Types and Notes A201 Addition Floor Plan (Reissued in Addendum No. 4) A202 Partial Existing Floor Plan A203 Partial Existing Floor Plan A204 Addition Roof Plan A205 Trellis and Canopy Plan A206 Kitchen Shell Addition Floor Plan, Alternate No. 4 (Added in Addendum No. 2) 1101.00 Yakima Convention Center Expansion p. 5 Contract Attachment "A" A207 Kitchen Shell Addition Elevations and Sections, Altemate No. 4 (Added in Addendum No. 2) A301 Exterior Elevations A302 Exterior Elevations A401 Addition Building Sections A601 Addition Interior Elevations A602 Interior Elevations A603 Interior Elevations A604 Interior Elevations A610 Floor Finishes A701 Addition Reflected Ceiling Plan A702 Partial Reflected Ceiling Plan, Office and Existing Building A703 Partial Reflected Ceiling Plan, Existing Building A801 Curtain Wall Types A802 Curtain Wall, Storefront and Sunscreen S0.00 Abbreviations, Legends and Drawings List S0.01 General Notes S0.02 General Notes S1.00 Load Maps S2.01 Foundation and First Floor Plan S2.02 Low Roof Framing Plan S2.03 High Roof Framing Plan S3.01 Truss and Brace Frame Elevations S3.02 Truss Sections and Details S3.03 Truss Sections and Details S3.04 Brace Frame Details S4.01 Typical Concrete Details S4.02 Typical CMU Details S4.03 Typical Steel Details S4.04 Typical Deck Details S5.01 Sections and Details S5.02 Sections and Details M101 Mechanical Legend and Abbreviations M102 Miscellaneous Schedule M201 Mechanical Addition Floor Plan A (Reissued in Addendum No. 1) M202 Mechanical Floor Plan B M204 Mechanical Addition Roof Plan A M205 Mechanical Roof Plan B M501 Mechanical Details E101 Electrical Legend and Abbreviations E102 Miscellaneous Schedule E103 Addition Panel Schedules E104 Addition Lighting Schedules E105 Existing Panel Schedules E201 Electrical Addition Floor Plan A (Reissued in Addendum No. 1) E202 Electrical Floor Plan B E203 Electrical Floor Plan C E204 Electrical Addition Roof Plan A E205 Electrical Roof Plan B E301 Lighting Addition Floor Plan A 1101.00 Yakima Convention Center Expansion p. 6 Contract Attachment "A" E302 Lighting Floor Plan B E304 Electrical Addition Partial Plan E401 Electrical Addition Site Plan E501 Lighting Riser Diagrams E601 Electrical Details E602 Electrical Details P101 Legend, Abbreviations, Drawing Index P301 Plumbing Enlarged Plan P401 Plumbing Floor Plan Addition P402 Plumbing Roof Plan Addition P501 Plumbing Details fi 1101.00 END OF INDEX ti Contract Administration G701 Change Order PROJECT (Name and address): Yakima Convention Center Expansion 10 North 8th Street Yakima, WA. 98902 TO CONTRACTOR (Name and address): Paras General Contractors, Inc. 1315 North Monroe Spokane, WA 99201 Distribution List: Owner Architect Contractor Field Other CHANGE ORDER NUMBER: 1 DATE: 10/17/02 ARCHITECT'S PROJECT NUMBER: 1101.00 City Project No. 1909 CONTRACT DATE: 8/19/02 CONTRACT FOR: General Construction THE CONTRACT IS CHANGED AS FOLLOWS: (Include, where applicable, any undisputed amount attributable to previously executed Construction Change Directives) 1. Remove and dispose of roofing materials containing asbestos, per Architect and Owner's approval. Pricing per Paras General Contractors, Inc. Change Order Request No. 00002, dated 10/3/02. Total Cost This Item, including WSST $ 6,646.00 2. Add 18 additional speakers for sound system, per Architect and Owners approval. Contractors, Inc. Change Order Request No. 00003, dated 10/15/02. Total Cost This Item, including WSST Total Cost This Change Order Pricing Per Paras General $ 10,791.00 $ 17,437.00 The original (Contract Sum) was The net change by previously authorized Change Orders The (Contract Sum) prior to this Change Order was The (Contract Sum) will be (increased) by this Change Order in the amount of The new (Contract Sum) including this Change Order will be The Contract Time will be (increased) (dec eased) (unchanged). by ( ) days. The date of Substantial Completion as of the date of this Change Order therefore is July 26, 2003. $ 5,272,620.00 $ 0.00 $ 5,272,620.00 $ 17,437.00 $ 5,290,057.00 NOTE: This Change Order does not include changes in the Contract Sum, Contract Time or Guaranteed Maximum Price which have been authorized by Construction Directive until the cost and time have been agreed upon by both the Owner and Contractor, in which case a Change Order is executed to supersede the Construction Change Directive. O AIA Document G701 Change Order Electronic Format O 2001 The American Institute of Architects • www.aia.org • WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject the violator to legal prosecution. To report copyright violations of AIA Contract Documents, e-mail The American Institute of Architects' legal counsel. copyright@aia.org. This document was electronically produced with permission of the AIA and can be reproduced without violation until the date of expiration as noted below. User Document: change order no -- 10/17/2002. AIA License Number 1008340, which expires on 7/31/2003. NOT VALID UNTIL SIGNED BY THE ARCHITECT, CONTRACTOR AND OWNER. Wardell Architects, P.S. ARCH ITECT (Firm name) 509 West Chestnut Yakima, Was 8902 1 fAff e) Lois A. Wardell (Typed name) /O•/ OZ DATE Paras General Contractors, Inc. CONTRACTOR (Firm name) 1315 North Monroe Spoane, WA 99201 ADDRESS BY (Signature) James D. Paras City of Yakima OWNER (Firm name) 129 North 2nd Street Yakima, WA 98901 ADDRESS (Typed name) 10/21/02 DATE ' BY (Signature) (Typed nam DATE CAUTION: You should sign an original AIA Contract Document. An original assures changes will not be obscured. AIA Document G701 Change Order Electronic Format O 2001 The American Institute of Architects • www.aia.org • WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject the violator to legal prosecution. To report copyright violations of AIA Contract Documents, e-mail The American Institute of Architects' legal counsel. copyright@aia.org. This document was electronically produced with permission of the AIA and can be reproduced without violation until the date of expiration as noted below. User Document: change order no -- 10/17/2002. AIA License Number 1008340, which expires on 7/31/2003. Paras General Contractors, Inc. 1315 N. Monroe Phone: (509) 535-7170 Spokane, WA 99201 Fax: (509) 535-3800 CHANGE ORDER REQUEST No. 00002 ikLE: Roof Asbestos Abatement DATE: 10/3/2002 PROJECT: Yakima Convention Center Expansion JOB: 02.0012 TO: Attn: Richard Zais CONTRACT NO: 01000.0000 City of Yakima 129 North 2nd Street Yakima, WA 98902 RE: To: From: Number: DESCRIPTION OF PROPOSAL Remove and legally dispose of approximately 7400 square feet of roofing materials containing asbestos fibers. A complete breakdown of all pricing is attached for your review. If the City of Yakima would like to proceed with this work, we request that either written authorization to proceed or a change order be issued, thus authorizing us Paras General Contractors to proceed with the work. We request that a quick review is made in order to avoid delay to the project. Due to the nature of the issue, we are unable to determine at this time if the schedule will be impacted. Paras General Contractors reserves the right to request additional time upon full disclosure of the impact. • Unit Cost: Unit Tax: Lump Sum: Lump Tax: Total: $0.00 $0.00 $6,646.00 $0.00 $6,646.00 fROVAL: By: By: Todd Walton Date: tc> 1 t_._ Date: Paras General Contractors inc Standard Estimate Report Asbestos Abatement Page 10/2/2002 6:21 F Item Description Takeoff Qty 2050.00 DEMOLITION 2080.00 Hazardous Mat. Abatement Remove Asbestos Roofing Hazardous Mat. Abatement 7,400.00 sf Unit Cost Amount Unit Cost Amount Subcontract. r" � Amount 5,400 5,400 Name Equipment Amount Other' I Amount :Total Amount 5,400 5,400 DEMOLITION 0 Estimate Totals 0 5,400 Subcontract 5,400 5 400 5.400 5,400 5,400 OH & Profit on Sub Work - 10% 540 10.000 % T 540 5,940 Perf & Payment Bond 110 B General Liability Insurance 55 8.250 $ / 1,000.000 T Builder's Risk Insurance 23 0.350 $ / 100.000 T WA State B&O Tax 31 0.471 % T 219 6,159 WA State Sales Tax (7.9%) 487 7.900 % T Total 6,646 0 0 5,400 • • . SEP -30 02 22:02 FROM:LESLIE ROOFING 15092487887 TO:5353800 PAGE:01 FAX TRANSMITTAL DAN LESLIE ROOFING INC. 506 AHTANUM ROAD UNION GAP, WASHINGTON 98903 PHONE: ( 509 ) 453 - 0074 FAX: ( 509 ) 248 - 7887 TO: T k_ 4)L1+0" DATE: i 0- -1::61-.„, COMPANY: faC4. r c4. i i PROJECT: 4.,k ,'. Q. o,�,u, c . R. FROM; mts L Vie. s l ,t t LOCATION: Ii V.,l `.. s SUBJECT: _ FAX NUMBER: s 36 -.3 Id d O ❑ AS REQUESTED O REPLY ASAP ❑ PLEASE REVIEW TOTAL PAGES SENT INCLUDING THIS COVER PAGE: COMMENTS: Re- Convention Center- Asbestos abatement of roofing 1. Quantity of asbestos roofing to do is approx 5000 sq. ft, of demo area- In our quote we included a line item to remove approx 2400 sq, ft. of membrane roofing where new roof will go 2. The 5000 sq. ft. is in addition to 2400 sq. ft. 3. Quote includes demo and disposal of 5000 sq. ft of roofing. All permits and dump fees are covered. Demo is per all appl laws, 4. Quote includes asbestos charge for 2400 sq. ft. in original quote. Demo of 2400 sq. ft. is in line item of original quote. Total price $ 5,400,00 • Paras General Contractors, Inc. 1315 N. Monroe Phone: (509) 535-7170 Spokane, WA 99201 Fax: (509) 535-3800 CHANGE ORDER REQUEST No. 00003 FLE: Additional Speakers DATE: 10/15/2002 PROJECT: Yakima Convention Center Expansion JOB: 02.0012 TO: Attn: Richard Zais CONTRACT NO: 01000.0000 City of Yakima 129 North 2nd Street Yakima, WA 98902 RE: To: From: Number: DESCRIPTION OF PROPOSAL Resulting from Energized Electric's letter dated 9/19/02: Add 18 ea. additional speakers to the "Speaker System Upgrade" portion of the sound system scope of work. All documentation of correspondance regarding this issue is attached for your review. If the City of Yakima would like to proceed with this work, we request that either written authorization to proceed or a change order be issued. Unit Cost: Unit Tax: Lump Sum: Lump Tax: Total: $0.00 $0.00 $10,791.00 $0.00 $10,791.00 •ROVAL: By: Todd Walton Date: ►u /11542- Date: Paras General Contractors inc Standard Estimate Report Sound System Page 10/15/2002 10:16 A Item Description Takeoff Qty 16000.00 ELECTRICAL 16000.10 Division 16 Quotes 010 Electrical Sub Division 16 Quotes 1.00 Isum Labor Unit Cost Material Amount Unit Cost Amount Subcontract .. Amount 8,767 8,767 Name 1 Equipment 1 Amount Other Amount Total 1 Amount 8,767 8,767 ELECTRICAL 0 Estimate Totals 0 8,767 Subcontract 8,767 8 767 8,767 8,767 8,767 OH & Profit on Sub Work 877 10.000 % T 877 9,644 Perf & Payment Bond 179 B General Liability Insurance 89 8.250 $ / 1,000.000 T Builder's Risk Insurance 38 0.350 $ / 100.000 T WA State B&O Tax 51 0.471 % T 357 10,001 WA State Sales Tax (7.9%) 790 7.900 % T Total 10,791 0 0 8,767 • • October 2, 2002 Todd Walton, Project Manager Paras General Contractors 1315 North Monroe Spokane, WA 99201 Re: Yakima Convention Center Expansion Project No. 1101.00 Request for Proposal No. 1 CMU walls at East and West Parking Areas Request for Proposal No. 2 Additional Sound System Speakers Dear Todd As we discussed by phone yesterday, the Owner will delay a decision on your Change Order Request No. 00001 until next spring when unforeseen costs are better known. We will ask you to revisit this issue at that time. Second, please prepare a Change Order Request for additional sound system speakers per the Energized Electric letter you transmitted to us. obert A. Principal cc: Mike McGuire 47....:57/-2, 9-19-2002 12:09PM FRnM ENERGIZED ELECTRIC 509 4820158 ENERGIZED ELECTRIC INC P.1 • 9/19/02 Paras General Contractors 1315 N. Monroe Spokane WA, 99201 Attention: Todd Walton Re: Yakima Convention Center Todd, Addendum #2 added a sound system for the Yakima Convention Center project. This added system consists of four parts: 1) Common Area Sound System for new addition. 2) Meeting room Sound System for new addition. 3) Speaker System upgrade. 4) 2 zone all paging. Energized Electric used the attached bid from Evco Sound to compile our competitive bid. After bid in review with Leo Lee of Sousley Sound, Leo stated he had helped with the design and advised me of the quantity of speakers that were desired for item #3 above "Speaker System Upgrade". in my close review of the bid documents regarding Speaker Upgrade, I found no direction regarding area or quantity of speakers to upgrade, I called Kevin Bauer of Evco Sound to verify quantity of speakers he had included in his quote to us. He explained the bid documents did not give direction or quantity and that he had left three messages for the project engineer to call him so they could confirm quantity. Finally with no response from project engineer and no direction in the bid documents. Evco provided a price for the Speaker upgrade (based on one room) 6 speakers. Please see the attached specification outlining "Scope Of Work" for the Speaker System Upgrade and Evco's quote to us. Sousley Sound helped in the design and had included 24 new speakers including several rooms related to item #3 above "Speaker System Upgrade". Currently we have included in our bid, the cost to up grade 6 new ceiling speakers, which is the cost included in our quote from Evco Sound. To include. 18 more speakers, a cost of $8767.00 would need to be added to our contract. If the quantity had been identified in the bid documents, the additional 18 speakers desired would have been included in our bid on bid day. Energized Electric would still have been the low competitive electrical contractor on this 4444 N. FREYA • P.O. BOX 6228 • SPOKANE, WA 99217 • (509) 483-6447 • FAX (509) 482-0158 a • • • 9-19-2002 12:10PM FRnM ENERGIZED ELECTRIC 509 48201FR P.2 project. At this point we could also credit $1,800.00 the amount included in our bid, to delete the "Speaker Upgrade Section" from our contract. Sorry for the confusion, this is not normally the way we begin projects. Having completed many projects over the years with Paras General Contractors, you know this is not Energized Electric's normal procedure. Please advise. Energiz ctric, In Paul Canter President 1 • 9-19-2002 12:10PM FROM ENERGIZED ELECTRIC 589 4820158 Yakima Convention Center Expansion 16900-3 Speaker cables shall be Belden 5200UE for branches and 5100UE for main feeds. 3 AI( equipment shall be housed in UL Listed welded equipment cabinet(s). Pro..isinns for ventilation and power surge protection shall be provided. Lowell L260 series or equal together with vent and blank panels shall be acceptable cabinet(s). 6 SPEAKER SYSTEM UPGRADE Scope of Work: Upgrade the existing ceiling speakers ins ace name Bose Model 32 flush mount speakers are specified to match the sonic qualities of exis in ee wig rooms. - 12 Bose approved active equalization must be used per manufacturer's specifications. 15 Speakers she'llbe located in such a manner to provide even coverage. The high and low variance shall not be greater than 3dB. 18 installer must be familiar with the existing IVIE processing system. Room equalization must be re- calibrated using the IVIE system. 21 Speaker cable where necessary shall be Belden 52000E for branches and 5100UE for main feeds. 24 2 -ZONE ALL CALL PAGING FOR MEETING AND NON -MEETING ZONES Scope of Work: Provide an independent audio paging system for the entire building. The system shall 27 be divided by two zones. One zone shall include all the meeting rooms and the other zone shall include all other interior common areas. P. 3 30 System Requirements: Two dual -zone paging microphones shall be installed, one in the business office and the second in the 33 engineering office as designated by owner. The red button on the microphone shall activate all call paging in the meeting rooms. The black button shall activate the all call to the common areas. The paging microphone shall be Astatic AMC105-2. The mixer/amplifiers shall provide inputs for paging microphones. One mixer/amplifier shall be required for each zone. The mixerfamplifiers shall be TOA A-512 Mixer Power Ampler. Highly efficient and intelligible loudspeakers are required for this project. Coverage must include each and every individual meeting room and common area. Ceiling speakers for tiled ceilings shall be Recessed Flange -mounting speakers (Atlas Sound APF - 15T or equal) for coverage up to 1,600 sq. ft. The flange -mount speaker shall be mounted on an Atlas 45 MK -2 together with a white metal ceiling baffle (Atlas 51-8 or equal) and supporting bridge (Atlas 81- 8R or equal). 48 For areas without tiled ceilings the Recessed Flange -mounting speakers (Atlas Sound APF -15T or equal) shall be mounted to a baffle (Atlas L20-101 or equal) and surface enclosure (Atlas L20-213 or equal). For areas smaller than 900 sq. ft. conventional' 8" ceiling loudspeaker (Atlas C1 OAT70 or equal) and enclosure (Atlas CS95-8 or equal) assembly shall be installed to keep the sound level in the correct 54 balance. The baffle (Atlas 51-8 or equal) and supporting bridge (Atlas 81-8R or equal) shall be used with the 8" ceiling speaker assemblies. 36 39 42 51 1101.00 Sound System • • • 9-19-2002 12:11PM FRr" ENERGIZED ELECTRIC 509 4820174 P.5 Thank you for allowing Sousley Sound & Communications to participate in the sound system bids for the Yakima Center expansion project. Here are the four systems and the costs: COMMON AREA SOUND DISTRIBUTION SYSTEM FOR NEW ADDITION $10,554.02 MEETING ROOM SOUND SYSTEM FOR NEW ADDITION $25,440.56 SPEAKER SYSTEM UPGRADE $10,550.00 2 -ZONE ALL CALL PAGING FOR MEETING AND NON -MEETING ZONES $14,892.80 We will perform the complete installation with the exception of floor boxes and all conduits and standard electrical backboxes where required. Two other items that should be addressed are permits and lift rental. Permit fees for L&I will be added. Lift rental is $550 per month and I can easily see a month or. more of work for the wiring phase quickly followed by the installation phase. If a lift can be furnish by the electrical contractor then we would not have to rent one. If you .have any questions on the bids please call me at 248-4848. Thank you and good. luck! WRRDELL ARCHITECTS 5094531336 ARCHITECTS FAX TRANSMITTAL September 23, 2004 To: Bob Desgrosellier, Senior Engineer City of Yakima Re: Yakima Convention Center Expansion Project No. 1101.00 Enclosed/Attached Herewith: Copies of the following: Bid Tab Letter recommending award of contract Letters to the 4 bidders Comments: p. 1 i� C °) vim~ Number of pages sent including this: 10 Bob, Hope this helps. Let me know if you need more and I will try to find it. All of these things should be somewhere in your files, since they were copied to multiple parties. I will drop hard copies off as well. By: cc: E } is Wardell, AIA Wardell Architects 509 W. Chestnut • Yalcirna • WA • 98902 phone 509.453.3693 • fax 509.453.1336 U E c c C c C C C C E E E N N m N N N N N N m m CD m m ¢Qaa¢a< «« f\T .4 6. 7 WRRDELL RRCHITECTS :t ARCHITECTS July 30, 2002 Richard Ostrander President, Yakima Convention Center Public Facilities District 10 North 8th Street Yakima, WA 98901 Re: Yakima Convention Center Expansion Project No. 1101.00 Dear Dick 5094531336 p•2 We are pleased to report that the Convention Center Expansion bids came in very favorably. We have met with city staff to ascertain the amount of project funding in place. It is our recommendation that the following alternates be approved and the contract be awarded on the basis of the total of the base bid plus the selected altemates: Alternate No. 1: Carpeting of existing rooms A H. Alternate No. 2: Paving and improvements to the new east parking lot Alternate No. 3: Paving and improvements to the new west parking lot. Alternate No. 4: Kitchen Shell Addition. Alternate No. 5: Upgrade of the exterior sign to an electronic readerboard. Alternate No. 6: Replace existing HVAC units RTU -5, 8, 9 and 10 (this will mean that all rooftop units over rooms A through D will be new). Alternate No. 8 through 10: Vinyl Wallcovering in lieu of paint in the old and new lobbies and meeting rooms. Alternate No. 12: Dimming system for new lighting. Please note that Alternate No. 7 was not bid and that Alternate No. 11, which would have repainted the existing meeting rooms, could only be taken if we chose not to take Alternate No. 10. We recommend maintaining a Construction Contingency of 7.5%. To do this, we have adjusted the overall project budget as reflected in the attached sheet. Certain costs have been adjusted to reflect additional information received since the last budget was prepared and we also recommend that the cost for the dance floor be deleted from the FF&E budget since this appeared to be Tess of a priority than other FF&E items. We request that the PFD Board make a recommendation to the City Manager to award the construction contract to aras General Contractors for a total amount, including sales tax, of $5,272,620. President ardell, ALA cc: Kathy Coffey, Dick Zais, Glenn Rice, Bill Cook 509 W. Chestnut • Yakima • WA • 98902 • I • WARDELL ARCHITECTS ARCHITE CTss July 30, 2002 Re: Yakima Convention Center Expansion Project No. 1101,00 Total Project Cost 5094531336 p•3 Net Bond Proceeds $ 6,600,000 Convention Center Capital Reserve for Parking,lmprovements 100.000 Total Project Funding $ 6,700,000 Construction Base Bid ($ 4,625,000) Alternate No. 1 Carpet 111,830 Alternate No. 2 E. Parking Lot 87,190 Alternate No. 3 W. Parking Lot 70,270 Alternate No. 4 Kitchen Shell 111,900 Alternate No. 5 Sign Readerboard Upgrade 30,550 Alternate No. 6Additional HVAC Replacement 73,145 Alternate No. 8 Vinyl Wallcoveming in Lobbies 18,735 Alternate No. 9 Vinyl Wallcoveming in New Meeting Rooms 2,480 Alternate No. 10 Vinyl Wallcoveming in Old Meeting Rooms 24,310 Altemate No. 12 Dimming System 117.210 Total Alternates' ($ 647,620) Construction Contingency on $5,272,620 @ approx. 7.57% ($ 399,202) A/E Fees and City Project Manager Fee as of 7/30 ($ 531,000) Estimated A/E fee for study of HVAC problem in rooms EFGH ($ 20,000) Soft Costs • FF&E Allowance 2 $ 377,178 • Printing (allow) 20,000 • Testing, Survey, etc. (allow) 25,000 • Permits (estimated) 20,000 __A Relocation costs for VC&B staff 3 30,000 • Soft Cost Contingency 5.000 Total Project Cost ($ 477,178) ($6,700,000) Notes: 1. Alternate No. 7 was not used; Alternate No. 11 is not used if Alternate No. 10 is taken. 2. FF&E Allowance = Budget of 6/13/02 less dance floor ($30,104). 3. Assumes use of mobile home owned by City. Amount covers estimated cost of moving, utility hook- up, new paint and carpet 509 W. Chestnut • Yalcima • WA • 98902 ••.. S• . • . 1' Architect's Basic Bid Apollo, Inc. Bershauer Phillips Construction Co. Paras General Contractors Tri -Ply Construction Estimate: $4,639,700 BASIC BID $4,586,282 $4,650,000 $4,625,000 $4,980,000 Alternate No 1 Carpet $115,489 $144,876 $111,830 $114,042 Altemate No 2 E. Parking Lot $97,707 $75,947 $87,190 $70,270 $98,679 $80,806 Alternate No 3 W. Parking Lot $75,629 $75,898 Altemate No 4 Kitchen Shell $157,763 $61,858 $111,900 $137,779 Altemate No 5 Exterior Sign $32,565 $32,770 $30,550 $32,534 Alternate No 6 HVAC Units $97,448 $71,786 $73,145 $72,242 Alternate No 7 Lighting in N. Lobby No work No work No work No work Altemate No 8 Vinyl at lobbies $14,875 $21,040 $18,735 $14,744 Altemate No 9 Vinyl at new mtg rooms $5,822 $4,401 $2,480 $2,862 Alternate No 10 Vinyl at old mtg room: $28,769 $28,939 $24,310 $19,364 Alternate No 11 GWB & paint, exist m $29,589 $28,647 $29,655 $30,000 Alternate No. 12 Dimming system $113,204 $105,301 $117,210 $113,558 Basic Bid + Alt 1-6, 8-10,12 $5,325,553 $5,272,816 $5,272,620 $5,666,610 S1331IH ThU 113a8UM 9E616Sb60S -a WRRDELL RRCHITECTS 1 : t ARCHITECTS July 25, 2002 Re: Yakima Convention Center Expansion Project No. 1101.00 5094531336 p•5 SCHEDULE OF ALTERNATES Alternate No. 1: Replace Carpet in existing ballrooms (Rooms 203 - 206). Alternate No. 2: Build east parking lot. Alternate No. 3: Build west parking lot. Altemate No. 4: Kitchen Shell Addition. Work of alternate is to provide a shell space, rough -in plumbing, rough -in electrical, and HVAC unit. Alternate No. 5: Exterior Sign. Upgrade of sign reader board. Basic sign is included in base bid. Alternate No. 6: Replace existing HVAC units RTU -5, -8, -9, -10. (Work on units RTU -1, RTU -2, RTU -3, RTU -4, RTU -6 and RTU -7 is part of basic bid.) Alternate No. 7: Not Used. Alternate No. 8: Vinyl wail covering in lieu of paint in new and existing lobbies. Alternate No. 9: Vinyl wall covering in lieu of paint in new meeting rooms. Alternate No. 10: Vinyl wall covering in existing Rooms 203 — 210 (existing meeting rooms). Alternate No. 11: Gypsum wallboard and paint existing meeting rooms 203-210. Note: Either alternate 10 or 11 could be taken, but not both. Alternate No. 12: Provide all work relating to the dimming system and described on Sheet E602, including all associated labor and materials, whether shown or referenced on this sheet or in other areas of the Contract Documents, as an additive alternate rather than as a part of the Basic Bid. Note: This alternate must be accepted to have working system. 509 W. Chestnut • Yakima • WA • 98902 •,. 1 - 1• • •f: 09.453.1336 WARDELL ARCHITECTS t [t ARCH ITE CTs July 31, 2002 James D. Paras Paras General Contractors 1315 N. Monroe Spokane, WA 99201 Re: Yakima Convention Center Expansion Project No. 1101.00 Dear Mr. Paras 5094531336 P.6 We are pleased to inform you that this morning the Public Facilities District Board directed the Yakima City manager to award the Convention Center bid to you construction firm. The board elected to take all altematives except number 11, making your firm the apparent low bidder. We have enclosed a bid tabulation in accordance with the selection. We would like information about your firm and please refer to specification section 00100-4, Post -Bid information. We will be in contact over the next few days as timing for the award is developed. Please contact us should you have questions or comments. We know that considerable resources are expended in preparing a bid and we thank you for participating. Congratulations. Principal cc: Glenn Rice, City of Yakima 509W. Chestnut • Yakima • WA • 98902 •hone 509.453.3693 • fax 509.453. I 6 WARDELL ARCHITECTS A IP ARCHITE CTs July 31, 2002 Mr. Chuck Lee Apollo Inc. 1201 W. Columbia Drive Kennewick, WA 99336 Re: Yakima Convention Center Expansion Project No. 1101.00 Dear Chuck 5094531336 P•7 The Public Facilities District Board this moming elected to take all alternates except number 11 for the Center expansion. Paras General Contractors is the apparent low bidder. The Board authorized the Yakima City Manager to award the bid to Paras. We have enclosed a bid tabulation in accordance with the selection. We know that considerable resources are expended in preparing a bid and we and the owner thank you for participating. Please feel free to contact our office should you have questions or comments. Sincerely, obert A. Wardell Principal cc: Glen Rice, City of Yakima S09 W. Chestnut • Yakima • WA • 98902 1••. 1•. ••. ,•. WARDELL ARCHITECTS A It. ARCHITECTS July 31, 2002 Mr. Charlie Eglin Tri -Ply Construction 106 W. Pine Street Yakima, WA 98902 Re: Yakima Convention Center Expansion Project No. 1101.00 Dear Charlie 5094531336 P•8 The Public Facilities District Board this morning elected to take all altemates except number 11 for the Center expansion. Paras General Contractors is the apparent low bidder. The Board authorized the Yakima City Manager to award the bid to Paras. We have enclosed a bid tabulation in accordance with the selection. We know that considerable resources are expended in preparing a bid and we and the owner thank you for participating. Please feel free to contact our office should you have questions or comments. Sincerely, -j Robert A. Wardell Principal cc: Glen Rice, City of Yakima 509 W. Chestnut • Yakima • WA • 98902 . hone 509.453.3693 • fax 509.453.1336 WARDELL ARCHITECTS 5094531336 July 31, 2002 CHIE TECT. Ms. Lisa Coffman Berschauer Phillips 8232 29th Ave. Ste. TA °nsfruction Co. mwater, WA' 98512 Re: Yakima Convention Project No. 1101.00 Center Expansion Dear Lisa The Public Facilities District Center ex Board this expansion. Paris General morning electedty to take all alternates selection. ami the bid to Paras. apparent l except number 11 for the We know '� enclosed a bid and authorized the You for that considerable resources tabulation in a participating. cable f stare expended in preparing re a . accordance eel free contact our office p and a bid and we and the o 'incerely, should you have owner thank r® questions or comments. �/ldL Wardell City of Yakima hestnut • Yakima • WA • 98902 e 509.453.3693 • fax SO9.453.1336 p.9 1 -01-02 03:41P Wardell Architects PS ARCHITECTS FAX TRANSMITTAL Date: I e" 1 •02 To:13:74° T7e+OS,'OI,1ieV Re: &rr'411 d 509-453-1336 P.01 CI 5 -R-oj 4-(101 1 Number of Sheets Sent Including This: Original will not be sent. Enclosed/Attached Herewith: 1 cow gevi4eto L Atolisr rLt 1 NSOLNC.E .GE(1rIrir Comments:1w2. -3:34,4At5 g7007, t-ps4.44.E0 `ta -rHe j'E'pL1E C' MAlraitil ADVk1W.E 1 N rcaoE . O(a+do / N,at, oF Cgi2T1fIcaTe. 14.1fr`re7 GiENT Tb 7se.. C.1t1, 50 -ritEK MAST H,W It 5a060+e26 By: • Wardell Architects 509 W. Chestnut • Yakima • WA • 98902 phone 509.453.3693 • fax 509.453.1336 Jct -01-02 03:42P Wardell Architects PS 509-453-1336 P.02 y,•w yLaii a •a avv+ ■ 1— .....• i..••-ators am• • • s■'...v• v .......►.r 1.......yL191U can MARSH ADVANTAGE AMERICA A SERVICE OF SEABURY & SMITH PO BOX 2151 SPOKANE,WA ,.9210 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND. EXTEND OR THE COVERAGE AFFORDED,SY THE POLICIES eFt.OW. „„.ALTER INSURERS AFFORDING COVERAGE ttasuApOKA�1E, Paras General Cantractors, Inc 1315 N. Monroe Sp0 G _ wA 99201 m6uAsaiA_ Caliber One Indemnity CompanY Imams: Safeco Group mquaaac; Liberty Mutual Ins carol.). Ieisuatca a NSu! Ate; THE POLICIES OR INSURANCE LISTED BELOW HAVE BEEN 18SuE0 TO THE INSVRED ANY REQVIRENiENIT, TERM 0A CONDITION OF ANY CONTRACT OR OTHER MAY PERTAIN, THE INSURANCE AFFORDED BY THE ROUGES DESCRIBED HEREIN POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID MANED MOVE DOCUMENT WITH RS SUBJECT CLAIMS. Pou& -FP. JV , 11 _ Y .4 FOP THE POLICY RESPECT TO WHICH TO ALL THE TERM. `SSL Y F ATION •1..:. • . 1 .., l:...a, PERIOD INOICATW. NOTwrTHSTANDING THIS CERTIFICATE MAY BE ISSUED OR FXCWSIOMS AND CONDITIONS OF SUCH — iMr, .�..�.+ L TYPE OP PbvRMCI POvCY . R A aTyreAAIuAOzUTY X 'CAL000249001 ..mm L+L OP+e+A1. UAeIUTY 15 02 4/15 03 .E"a'om+AAeuca • 1000000 FIAff DAMAGE tAm era sirs* s 5 0 0 0 0 C1.4445eaACE COCCUS WO EttP tMy Ona WWII s 5000 PatsoNAt,aADVN.flJ Y a 1000000 X STOE' -sAMP aB AcptaEGATE s 2 0Of�.,,r,004 Ge1gtL *4 .. TE LIMIT APItlEE M& oucvLi7.. al PR00uCTS • COMPIQ>j Aga • 2000000 8 AUTOMO11LEswumm X�1ANYAUTO M10+••44ED •UTOb 01CG156 9201 4 15/02 4/15/03 GOraaaa0osomaLWIR me oto os* P 1000000 a0t V'IIUAY �. SC$IDUlD AUTOS WAEO AUTO! NON-OYRIED AuTU r WWI W 8 X +� BODILY INJURY th' 8 �tP00r Pscdtdk+pe i GAAapff OACUTY ANY AVTO 4%15/02 4/15/03 1_ AUTO ONLY . EA ACC,OO•rT S OTMiA TNAN CA apo s — .WTO O+,YI Mao YAcr;accuRseect • s S000000k C ExessELV•$1ury oecuo f tyuMsy *46 LQ1R71077076 a 500000(1, rAGGREGATE • X txoucttet.e RETENTION S 0 T -t WORKERS COMPEN30.TION /WD EVPIAIMP, . 93434.CIYERS' t.t®BILITY E.l, EACH ACCAENT _ a 1.1. OILP.Ase • ir_jt.____EDAPto P I DISEASE - POLICY UMIT $ OrstSA soscom oto or ooslawvionsisoCAT+ONsNesoc LSRXCLU$tONS A999139y osoop mssiTmPEC1Al PROv16tows ADDITIONAL INSUREDS: CITY OP YAKIMA, ITS AGENTS, EMPLOYEES & ELECTED & APPOINTED OFFICIALS AND WARDELL ARCHITECTS. PROJECT: YAKIMA CONVENTION CENTER EXPANSION. CERTIFICATE HOLDER ADDIY/tl$A1 INLIJQLD: M.tu#$el IFTTE*; CANCELLATION CITY oP YAKIMA 129 NORTH 2ND STREET YAKIMA, WA 98902 ACORD 25-S (7/971 memo ANY Oo TME ASOIPE moms Pak/CIEs is CMcatID Wow THE SINPIRATIQ$ OATS T ERE0f. TMa It$9uPHQ WttNAEA WILL i6@ffiXAX.ib MAIL. Q Ni4Ya WIiTTffN NOTne$ TO T►1E: CEATIIKATE MOLDER KAM D TO rig LQ'%Y•.z.41541104Vircgat 1•L aiaTAWIxifedcgred1 ltiabruir4fx as Icxa c16 - cs AIA Document A312 o.� Performance Bond BOND NO. PRF08650877 Conforms with the American Institute of Architects, AIA Document A312. Any singular reference to Contractor, Surety, Owner or other party shall be considered plural where applicable. CON 1 RACTOR (Name and Address): PARAS GENERAL CONTRACTORS, INC. 1315 N. MONROE SPOKANE, WA 99201 OWNER (Name and Address): CITY OF YAKIMA 129 NORTH 2ND STREET YAKIMA, WA 98902 CONSTRUCTION CONTRACT Date: August 19 2002 Amount: $5,272,620.0 SURETY (Name and Principal Place of Business): FIDELITY AND DEPOSIT COMPANY OF MARYLAND P. O. BOX 2151 SPOKANE, WA 99210 Description (Name and Location): YAKIMA CONVENTION CENTER EXPANSION, 10 NORTH 8TH STREET, YAKIMA, WA BOND Date (Not earlier than Construction Contract Date): August 28 2002 Amount: $5,272,620.00 Modifications to this Bond: CONTRACTOR AS PRINCIPAL Company: PA S GENERAL _. CONTRAC.TOR., INC. Sig- Name and Title: James D. Paras, Vice (Any additional signatures appear on page 2.) (FOR INFORMATION ONLY - Name, Address and Telephone) AGENT or BROKER: SEABURY & SMITH INC. P. O. BOX 2151, SPOKANE, WA 99210 509-358-3900 1 The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns to the Owner for the performance of the Construction Contract, which is incorporated herein by reference. 2 If the Contractor performs the Construction Contract, the Surety and the Contractor shall have no obligation under this Bond, except to participate in conferences as provided in Subparagraph 3.1. 3 If there is no Owner Default, the Surety's obligation under this Bond shall arise after: (Corporate Seal) President 3.1 The Owner has notified the Contractor and the Surety at its address described in Paragraph 10 below that the Owner is considering declaring a Contractor Default and has requested and attempted to arrange a conference with the Contractor and the Surety to be held not later than fifteen days after receipt of such notice to discuss methods of performing the Construction Contract. If the Owner, the Contractor and the Surety agree, the Contractor shall be allowed a reasonable time to ® None SURETY Company: FIDELITY AND DEPOSIT COMPANY OF MARYLAND Signature: ED See Page 2 (Corporate Seal) Name antle: JoANNE TONANI, ATTORNEY-IN-FACT OWNER'S REPRESENTATIVE (Architect, Engineer or other party): WARDELL ARCHITECTS, P.S. 509 WEST CHESTNUT YAKIMA, WA 98902 perform the Construction Contract, but such an agreement shall not waive the Owner's right, if any, subsequently to declare a Contractor Default; and 3.2 'The Owner has declared a Contractor Default and formally terminated the Contractor's right to complete the contract. Such Contractor Default shall not be declared earlier than twenty days after the Contractor and the Surety have received notice as provided in Subparagraph 3.1; and 3.3 The Owner has agreed to pay the Balance of the Contract Price to the Surety in accordance with the terms of the Construction Contract or to a contractor selected to perform the Construction Contract in accordance with the terms of the contract with the Owner. 4 When the Owner has satisfied the conditions of Paragraph 3, the Surety shall promptly and at the Surety's expense take one of the following actions: SURETY 5026 (6-92) S-1852/GEEF10/99 Page 1 of 2 4.1 :Arrange for the Contractor, with consent of the Owner, to perform and complete the Construction Contract; or 4.2 Undertake to perform and complete the Construction Contract itself, through its agents or through independent contractors; or 4.3 Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner for a contract for performance and completion of the Construction Contract, arrange for a contract to be prepared for execution by the Owner and the contractor selected with the Owner's concurrence, to be secured with performance and payment bonds executed by a qualified surety equivalent to the bonds issued on the Construction Contract, and pay to the Owner the amount of damages as described in Paragraph 6 in excess of the Balance of the Contract Price incurred by the Owner resulting from the Contractor's default; or 4.4 Waive its right to perform and complete, arrange for completion, or obtain a new contractor and with reasonable promptness under the circumstances: .1 After investigation, determine the amount for which it may be liable to the Owner and, as soon as practicable after the amount is determined, tender payment therefor to the Owner; or .2 Deny liability in whole or in part and notify the Owner citing reasons therefor. 5 If the Surety does not proceed as provided in Paragraph 4 with reasonable promptness, the Surety shall be deemed to be in default on this Bond fifteen days after receipt of an additional written notice from the Owner to the Surety demanding that the Surety perform its obligations under this Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety proceeds as provided in Subparagraph 4.4, and the Owner refuses the payment tendered or the Surety has denied liability, in whole or in part, without further notice the Owner shall be entitled to enforce any remedy available to the Owner. 6 After the Owner has terminated the Contractor's right to complete the Construction Contract, and if the Surety elects to act under Subparagraph 4.1, 4.2; or 4.3 above, then the responsibilities of the Surety to the Owner `shall not be greater than those of the Contractor under the Construction :Contract, and the responsibilities of the Owner to the Surety shall not be 'greater than those of the Owner under the Construction Contract. To the `limit of the amount of this Bond, but subject to commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on the Construction Contract, the Surety is obligated without duplication for: 6.1 The responsibilities of the Contractor for correction of defective work and completion of the Construction Contract; 6.2 Additional legal, design professional and delay costs resulting from the Contractor's Default, and resulting from the actions or failure to act of the Surety under. Paragraph 4; and 6.3 Liquidated damages, or if no liquidated damages are specified in the Construction Contract, actual damages caused by delayed performance or non-performance of the Contractor. MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: 7 The Surety shall not be liable to the Owner or others for obligations of the Contractor that are unrelated to the Construction Contract, and the Balance of the Contract Price shall not be reduced or set off on account of any such unrelated obligations. No right of action shall accrue on this Bond to any person or entity other than the Owner or its heirs, executors, administrators or successors. 8 The Surety hereby waives notice of any change, including changes of time, to the Construction Contract or to related subcontracts, purchase orders and other obligations. 9 Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent jurisdiction in the location in which the work or part of the work is located and shall be instituted within two years after Contractor Default or within two years after the Contractor ceased working or within two years after the Surety refuses or fails to perform its obligations under this Bond, whichever occurs first. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suit shall be applicable. 10 Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address shown on the signature page. 11 When this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming to such statutory or other legal requirement shall be deemed incorporated herein. The intent is that this Bond shall be construed asa statutory bond and not as a common law bond. 12 DEFINITIONS 12.1 Balance of the Contract Price: The total amount payable by the Owner to the Contractor under the Construction Contract after all proper adjustments have been made, including allowance to the Contractor of any amounts received or to be received by the Owner in settlement of insurance or other claims for damages to which the Contractor is entitled, reduced by all valid and proper payments made to or on behalf of the Contractor under the Construction Contract. 12.2 Construction Contract: The agreement between the Owner and the Contractor identified on the signature page, including all Contract Documents and changes thereto. 12.3 Contractor Default: Failure of the Contractor, which has neither been remedied nor waived, to perform or otherwise to comply with the terms of the Construction Contract. 12.4 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the Contractor as required by the Construction Contract or to perform and complete or comply with the other terms thereof. (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL SURETY Company: (Corporate Seal) Company: Signature: Name and Title: Address: S-1852/GEEF 10/99 Signature: (Corporate Seal) Name and Title: Address: Page 2 of 2 OR( G AIA Document A312 J I BOND NO. PRF08650877 Payment Bond Conforms with the American Institute of Architects, AIA Document A312. Any singular reference to Contractor, Surety, Owner or other party shall be considered plural where applicable. CON TRACTOR (Name and Address): PARAS GENERAL CONTRACTORS, INC. 1315 N. MONROE SPOKANE, WA 99201 OWNER (Name and Address): CITY OF YAKIMA 129 NORTH 2ND STREET YAKIMA, WA 98902 CONSTRUCTION CONTRACT Date: August 19 2002 Amount: $5,272,620.00 SURETY (Name and Principal Place of Business): FIDELITY AND DEPOSIT COMPANY OF MARYLAND P. O. BOX 2151 SPOKANE, WA 99210 Description (Name and Location): YAKIMA CONVENTION CENTER EXPANSION, 10 NORTH 8TH STREET, YAKIMA, WA BOND Date( Not earlier than Construction Contract Date): August 28 2002 Amount: $5,272,620.00 Modifications to this Bond: CONTRACTOR. AS PRINCIPAL Company: PARAS GENERAL CONTRACTOFS, INC. Signature: G� NameandTitle: James D. Paras, Vice President (July additional signatures appear on page 2.) (FOR INFORMATION ONLY - Name, Address and Telephone) AGENT or BROKER: SEABURY & SMITH INC. P. O. BOX 2151, SPOKANE, WA 99210 509-358-3900 1 The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns to the Owner to pay for labor, materials and equipment furnished for use in the performance of the Construction Contract, which is incorporated herein by reference. (Corporate Seal) 2 With respect to the Owner, this obligation shall be null and void if the Contractor: 2.1 Promptly makes payment, directly or indirectly, for all sums due Claimants, and 2.2 Defends, indemnifies and holds harmless the Owner from claims, demands, liens or suits by any person or entity whose claim, demand, lien or suit is for the payment for labor, materials or equipment furnished for use in the performance of the Construction Contract, provided the Owner has promptly notified the Contractor and the Surety (at the address described in Paragraph 12) of any claims, demands, liens or suits and tendered defense of such claims, demands, liens or suits to the Contractor and the Surety, and provided there is no Owner Default. Ix None ❑ See Page 2 SURETY Company: FIDELITY AND DEPOSIT COMPANY OF MARYLAND (Corporate Seal) Signature: Name and,itle: JoANNE TONANI, ATTORNEY-IN-FACT OWNER'S REPRESENTATIVE (Architect, Engineer or other party): WARDELL ARCHITECTS, P.S. 509 WEST CHESTNUT YAKIMA, WA 98902 3 With respect to Claimants, this obligation shall be null and void if the Contractor promptly makes payment, directly or indirectly, for all sums due. 4 The Surety shall have no obligation to Claimants under this Bond until: SURETY 5026 (6-92) S-1853/GEEF 3/00 Page 1 of 2 4.1 Claimants who are employed by or have a direct contract with the Contractor have given notice to the Surety (at the address described in Paragraph 12) and sent a copy, or notice thereof, to the Owner, stating that a claim is being made under this Bond and, with substantial accuracy, the amount of the claim. 4.2 Claimants who do not have a direct contract with the Contractor: .1 Have furnished written notice to the Contractor and sent a copy, or notice thereof, to the Owner, within 90 days after having last performed labor or last furnished materials or equipment included in the claim stating, with substantial accuracy, the amount of the claim and the name of the party to whom the materials were furnished or supplied or for whom the labor was done or performed; and Have either received a rejection in whole or in part from the Contractor, or not received within 30 days of furnishing the above notice any communication from the Contractor by which the Contractor has indicated the claim will be paid directly or indirectly; and .3 Not having been paid within the above 30 days, have sent a written notice to the Surety (at the address described in Paragraph 12) and sent a copy, or notice thereof, to the Owner stating that a claim is being made under this Bond and enclosing a copy of the previous written notice furnished to the Contractor. 5 If a notice required by paragraph 4 is given by Owner to the Contractor or to the Surety, that is sufficient compliance. 6 When the Claimant has satisfied the conditions of Paragraph 4, the Surety shall promptly and at the Surety's expense take the following actions: 6.1 Send an answer to the Claimant, with a copy to the Owner, within 45 days after receipt of the claim, stating the amounts that are undisputed and the basis for challenging any amounts that are disputed. 6.2 Pay or arrange for payment of any undisputed amounts. 7 The Surety's total obligation shall not exceed the amount of this Bond, and the amount of this Bond shall be credited for any payments made in good faith by the Surety. 8 Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for the performance of the Construction Contract and to satisfy claims, if any, under any Construction Performance Bond. By the Contractor furnishing and the Owner accepting this Bond, they agree that all funds earned by the Contractor in the performance of the Construction Contract are dedicated to satisfy obligations of the Contractor and the Surety under this Bond, subject to the Owner's priority to use the funds for the completion of the work. 9 The Surety shall not be liable to the Owner, Claimants or others for obligations of the Contractor that are unrelated to the Construction Contract. The Owner shall not be liable for payment of any costs or expenses of any Claimant under this Bond, and shall have under this bond no obligations to make payments to, give notices on behalf of, or otherwise have obligations to Claimants under this Bond. 10 The Surety hereby waives notice of any change, including changes of time, • to the Construction Contract or to related subcontracts, purchase orders and other obligations. 11 No suit or action shall be commenced by a Claimant under this Bond other than in a court of competent jurisdiction in the location in which MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: the work or part of the work is located or after the expiration of one year from the date (1) on which the Claimant gave the notice required by Subparagraph 4. I or Clause 4.2.3, or (2) on which the last labor or service was performed by anyone or the last materials or equipment were furnished by anyone under the Construction Contract, whichever of (1) or (2) first occurs. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suit shall be applicable. 12 Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address shown on the signature page. Actual receipt of notice by Surety, the Owner or the Contractor, however accomplished, shall be sufficient compliance as of the date received at the address shown on the signature page. 13 When this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming to such statutory or other legal requirement shall be deemed incorporated herein. The intent is that this Bond shall be construed as a statutory bond and not as a common law bond. 14 Upon request by any person or entity appearing to be a potential beneficiary of this Bond, the Contractor shall promptly fumish a copy of this Bond or shall permit a copy to be made. 15 DEFINITIONS 15.1 Claimant: An individual or entity having a direct contract with the Contractor or with a subcontractor of the Contractor to furnish labor, materials or equipment for use in the performance of the Contract. The intent of this Bond shall be to include without limitation in terms "labor, materials or equipment" that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental equipment used in the Construction Contract, architectural and engineering services required for performance of the work of the Contractor and the Contractor's subcontractors, and all other items for . which a mechanic's lien may be asserted in the jurisdiction where the labor, materials or equipment were furnished. 15.2 Construction Contract: The agreement between the Owner and the Contractor identified on the signature page, including all Contract Documents and changes thereto. 15.3 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the Contractor as required by the Construction Contract or to perform and complete or comply with the other terms thereof. (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL SURETY Company: (Corporate Seal) Company: Signature: Name and Title: Address: S-1853/GEEF 3/00 Signature: (Corporate Seal) Name and Title: Address: Page 2 of 2 EXTRACT FROM BY-LAWS OF FIDELITY AND DEPOSIT COMPANY OF MARYLANL. "Article VI, Section 2. The Chairman of the Board, or the President, or any Executive Vice -President, or any of the Senior Vice -Presidents or Vice -Presidents specially authorized so to do by the Board of Directors or by the Executive Committee, shall have power, by and with the concurrence of the Secretary or any one of the Assistant Secretaries, to appoint Resident Vice -Presidents, Assistant Vice -Presidents and Attorneys -in -Fact as the business of the Company may require, or to authorize any person or persons to execute on behalf of the Company any bonds, undertaking, recognizances, stipulations, policies, contracts, agreements, deeds, and releases and assignments of judgements, decrees, mortgages and instruments in the nature of mortgages,...and to affix the seal of the Company thereto." CERTIFICATE I, the undersigned, Assistant Secretary of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, do hereby certify that the original Power of Attorney of which the foregoing is a full, true and correct copy, is in full force and effect on the date of this certificate; and I do further certify that the Vice -President who executed the said Power of Attorney was one of the additional Vice -Presidents specially authorized by the Board of Directors to appoint any Attorney -in -Fact as provided in Article VI, Section 2, of the By -Laws of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND. This Power of Attorney and Certificate may be signed by facsimile under and by authority of the following resolution of the Board of Directors of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND at a meeting duly called and held on the 10th day of May, 1990. RESOLVED: "That the facsimile or mechanically reproduced seal of the company and facsimile or mechanically reproduced signature of any Vice -President, Secretary, or Assistant Secretary of the Company, whether made heretofore or hereafter, wherever appearing upon a certified copy of any power of attorney issued by the Company, shall be valid and binding upon the Company with the same force and effect as though manually affixed." IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed the corporate seal of the said Company,.this 28TH day of AUGUST 2002 Assistant Secretary Power of Attorney FIDELITY AND DEPOSIT COMPANY OF MARYLAND HOME OFFICE: P.O. BOX 1227, BALTIMORE, MD 21203-1227 Know ALL MEN BY THESE PRESENTS: That the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a corporation of the State of Maryland, by W. B. WALBRECHER, Vice -President, and T. E. SMITH, Assistant Secretary, in pursuance of authority granted by Article V1, Section 2, of Laws of Company, which are set forth on the reverse side hereof and are hereby certified to be in full fo d effect • e date hereof, does hereby nominate, constitute and appoint Wm. DINNEEN, W. W. WEL� Lois S RT, Jo Anne TONANI, George C. SCHROEDER, Chris CARSON and Charla M. BOA t SI all of S elhsfi , Washington, EACH its true and lawful agent and Attorney -in -Fact, to make, execute, seal and •iia: , for, an• . behalf as surety, and as its act and deed: any and all bonds and undertakings and the execution • ".‘y bonds rtakings in pursuance of these presents, shall be as binding upon said Company, as fully and amp •, all inten">purposes, as if they had been duly executed and acknowledged by the regularly elected officer �,_ e Com its its office in Baltimore, Md., in their own proper persons. This power of attorney revokes that ' cit s on behalm. DINNEEN, W. W. WELLER, Lois STEWART, Jo Anne TONANI, George C. SCHROEDER, I ARSOI body HATTON, and Charla M. BOADLE, dated September 10, 1999. 2 The said Assistant Secretary does certify to extract set forth on the reverse side hereof is a true copy of Article VI> Section 2, of the By -Laws �s IN WITNESS WHEREOF, the said Vice-Prt and Assistant Secretary have hereunto subscribed their names and affixed the Corporate Seal of the said FIDI AND DEPOSIT COMPANY OF MARYLAND, this 19th day of October, A.D. 1999. and is now in force. ATTEST: EPOSIT COMPANY OF MARYLAND T. E. Smith Assistant Secretary State of Maryland ss: County of Baltimore ))) By: W. B. Walbrecher • Vice -President On this 19th day of October, A.D. 1999, before the subscriber, a Notary Public of the State of Maryland, duly commissioned and qualified, came W. B. Walbrecher, Vice -President and T. E. Smith, Assistant Secretary of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, to me personally known to be the individuals and officers described in and who executed the preceding instrument, and they each acknowledged the execution of the same, and being by me duly sworn, severally and each for himself deposeth and saith, that they are the said officers of the Company aforesaid, and that the seal affixed to the preceding instrument is the Corporate Seal of said Company, and that the said Corporate Seal and their signatures as such officers were duly affixed and subscribed to the said instrument by the authority and direction of the said Corporation. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year first above written. Carol J. Fa, -r Notary Public My Commissi• Expires: August 1, 2000 L1428-180-4117 TRANSMITTAL September 17, 2002 Dick Zais, City Manager City of Yakima Re: Yakima Convention Center Expansion Project No. 1101.00 Enclosed/Attached Herewith: One original of the Contractor's Retainage Bond, for signature. Comments: c\-cA-v_s — c?„3 Paras General Contractors have chosen to post a retainage bond as they are allowed to do by state law, per RCW 60.28.011 (6) and per the Supplementary Conditions of the Specification, Section 00800, 9.3.1.4. Please sign the Bond and return to us; we will forward it to the General Contractor. ell, AIA ardell Architects cc: Mike McGuire RETAINAGE BOND KNOW ALL BY THESE PRESENTS: Bond No. •RRT08650880 that PARAS GENERAL CONTRACTORS , INC . , a corporation organized and existing under the laws of the State of Washington , and authorized to do business in the State of Washington as Principal ("Principal") and FIDELITY AND DEPOSIT COMPANY OF MARYLAND , a corporation organized and existing under the laws of the State of Maryland and authorized and admitted to transact business in the State of Washington, as Surety ("Surety"), are jointly and severally held and bound unto CITY OF YAKIMA 129 N. 2nd Street Yakima, Wa. 98902 as Obligee ("Owner") for the use and benefit of Claimants defined below as benecbcAtie o eDtr tt fund )c created_ & NO/00 by RCW 60.28 in the amount of TWO HUNDRED FORTY—FOUR THOUSAND L7oars (�+�+ 991181\11.1 -NINE for the payment whereof Principal and Surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. WHEREAS, on the 19th day of August 2002 , the Principal entered into a contract with the Owner in accordance with Drawings, Specifications, and other Contract Documents, which contract is by reference make a part of this Retainage Bond ("Contract"); YAKIMA CONVENTION CENTER EXPANSION 10 North 8th Street, Yakima, WA. AND WHEREAS, the Contract and RCW 60.28 require the Owner to reserve from the monies earned by the Principal on estimates during the progress of the improvement or work a sum not to exceed 5% ("Retained Funds").; AND WHEREAS, Principal has requested under RCW 60.28 011 (6) to submit a bond for all or a portion of the Retained Funds, and the Owner is required by the statute to accept a satisfactory bond in lieu' of the Retained Funds unless it can demonstrate good cause for refusing it; AND WHEREAS, it is the intent of the Principal, the Surety and the Owner that this Retainage Bond and any proceeds from it are subject to all claims and liens in the same manner and priority as set forth for retained percentages in RCW 60.28; NOW THEREFORE, the condition of this obligation is that, if there are no valid claims by any person or entity arising under the Contract pursuant to RCW 60.28, and no payment due from the Principal to the State of Washington with respect to taxes imposed pursuant to Title 82 RCW or payments pursuant to RCW 50.42, then this obligation shall be void, otherwise, it shall remain in full force and effect, subject, however to the following conditions: 1. The principal and Surety hereby jointly and severally agree among themselves and with the Owner that every person or entity making a valid claim on the Retained Fund pursuant to RCW 60.28 ("Claimant") who has not been paid in full before the expiration of a period o1• forty-five (45) days after the completion of all Contract work may sue on this Retainage Bond, all in accordance with and to the extent permissible under RCW 60.28. The Owner shall not be liable for the payment of any costs or expenses, including • attorneys' fees, of any such suit. Retainage Bond Page 1 2. No suit or action shall be commenced under this Retainage Bond by any Claimant: a. Unless the Claimant has complied with the requirements of RCW 60.28, and b. Other than in a state court of competent jurisdiction in and for the county in which the Project is situated, and not elsewhere. 3. The amount of this Retainage Bond consists of a fixed portion of the Revised Funds as described above. Any balance of the Retained Funds will continue to be withheld and retainage will be withheld from any future progress payments or increases in the Contract sum unless this Retainage Bond is amended or replaced. 4. The amount of this Retainage Bond shall be reduced by and to the extent of any payment or payments properly made under it. SIGNED AND SEALED this 5th day of September , 2002 PRINCIPAL SURETY Paras General Contractors, Inc. Fidelity and Deposit Company of Maryland Title Approved: By: Authorized Sign ure Dated: Lois Stewart Attorney—in—Fact Seabury & Smith Inc. Name of Local Office or Agent P.O.Box 2151, Spokane, Wa. 99210 Address of Local Office or Agent Retainage Bond Page 2 Power of Attorney FIDELITY AND DEPOSIT COMPANY OF MARYLAND HOME OFFICE: P.O. BOX 1227, BALTIMORE, MD 21203-1227 Know ALL MEN BY THESE PRESENTS: That the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a corporation of the State of Maryland, by W. B. WALBRECHER, Vice -President, and T. E. SMITH, Assistant Secretary, in pursuance of authority granted by Article V1, Section 2, of t -Laws of 44,Company, which are set forth on the reverse side hereof and are hereby certified to be in full tod effect . .� e date hereof, does hereby nominate, constitute and appoint Wm. DINNEEN, W. W. WEL . Lois S RT, Jo Anne TONANI, George C. SCHROEDER, Chris LARSON and Charla M. BO ►. all of S • =t; -, Washington, EACH its true and lawful agent and Attorney -in -Fact, to make, execute, seal and . .+ , for, an '47 behalf as surety, and as its act and deed: any and all bonds and undertakings and the execution bonds•• . ' -rtakings in pursuance of these presents, shall be as binding upon said Company, as fully and amp •. all intenpurposes, as if they had been duly executed and acknowledged by the regularly elected officer f. e Com ..its office in Baltimore, Md., in their own proper persons. This power of attorney revokes that A•'on behalDINNEEN, W. W. WELLER, Lois STEWART, Jo Anne TONANI, George C. SCHROEDER, 1. • ARSOAlk: •y HATTON, and Charla M. BOADLE, dated September 10, 1999. The said Assistant Secretary does Article VI, Section 2, of the By -Laws th•e extract set forth on the reverse side hereof is a true copy of and is now in force. t and Assistant Secretary have hereunto subscribed their names and AND DEPOSIT COMPANY OF MARYLAND, this 19th day of certify d Comvi IN WITNESS WHEREOF, the said Vice -Pr affixed the Corporate Seal of the said FID October, A.D. 1999. Al I'EST: EPOSIT COMPANY OF MARYLAND T. E. Smith Assistant Secretary State of Maryland } ss: County of Baltimore ))) By: W. B. Walbrecher Vice -President On this 19th day of October, A.D. 1999, before the subscriber, a Notary Public of the State of Maryland, duly commissioned and qualified, came W. B. Walbrecher, Vice -President and T. E. Smith, Assistant Secretary of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, to me personally known to be the individuals and officers described in and who executed the preceding instrument, and they each acknowledged the execution of the same, and being by me duly sworn, severally and each for himself deposeth and saith, that they are the said officers of the Company aforesaid, and that the seal affixed to the preceding instrument is the Corporate Seal of said Company, and that the said Corporate Seal and their signatures as such officers were duly affixed and subscribed to the said instrument by the authority and direction of the said Corporation. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year first above written. Carol .1. Fa, -r My Commissi L1428-180-4117 Notary Public Expires: August 1, 2000 EXTRACT FROM BY-LAWS OF FIDELITY AND DEPOSIT COMPANY OF MARYLAN►_ "Article VI, Section 2. The Chairman of the Board, or the President, or any Executive Vice -President, or any of the Senior Vice -Presidents or Vice -Presidents specially authorized so to do by the Board of Directors or by the Executive Committee, shall have power, by and with the concurrence of the Secretary or any one of the Assistant Secretaries, to appoint Resident Vice -Presidents, Assistant Vice -Presidents and Attorneys -in -Fact as the business of the Company may require, or to authorize any person or persons to execute on behalf of the Company any bonds, undertaking, recognizances, stipulations, policies, contracts, agreements, deeds, and releases and assignments of judgements, decrees, mortgages and instruments in the nature of mortgages,...and to affix the seal of the Company thereto." CERTIFICATE I, the undersigned, Assistant Secretary of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, do hereby certify that the original Power of Attorney of which the foregoing is a full, true and correct copy, is in full force and effect on the date of this certificate; and I do further certify that the Vice -President who executed the said Power of Attorney was one of the additional Vice -Presidents specially authorized by the Board of Directors to appoint any Attorney -in -Fact as provided in Article VI, Section 2, of the By -Laws of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND. This Power of Attorney and Certificate may be signed by facsimile under and by authority of the following resolution of the Board of Directors of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND at a meeting duly called and held on the 10th day of May, 1990. RESOLVED: "That the facsimile or mechanically reproduced seal of the company and facsimile or mechanically reproduced signature of any Vice -President, Secretary, or Assistant Secretary of the Company, whether made heretofore or hereafter, wherever appearing upon a certified copy of any power of attorney issued by the Company, shall be valid and binding upon the Company with the same force and effect as though manually affixed." IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed the corporate seal of the said Company, this 5th day of September 2002 Assistant Secretary ISSUED BY TRANSNATION TITLE INSURANCE COMPANY COMMITMENT FOR TITLE INSURANCE Tra A LANDAM]ERICA COMPANY Ttransnation Title Insurance Company, an Arizona Corporation, herein-called_the Company, for a valuable consideration, hereby commits to issue itspolicy or policies of title insurance,—as identified in Schedule A, in favor of the proposed insured named in Schedule A—as owner-ormortgagee of the estate or interest covered hereby in the land described or referred to in Schedule A, upon payment of the premiums and charges therefor; all subject to the exceptions and conditions and stipulations shown herein, the Exclusions from Coverage, the Schedule B exceptions, and the conditions and stipulations of the policy or policies requested. (See reverse side of this cover and inside of back cover for printed Exclusions from Coverage and Schedule B exceptions contained in various policy forms.) This Commitment shall be effective only when the identity of the proposed Insured and the amount of the policy or policies committed for have been inserted in Schedule A hereof by the Company, either at the time of the issuance of this Commitment or by subsequent endorsements and is subject to the Conditions and Stipulations on the back of this cover. This Commitment is preliminary to the issuance of such policy or policies of title insurance and all liability and obligations hereunder shall cease and terminate six months after the effective date hereof or when the policy or policies committed for shall issue, whichever first occurs, provided that the failure to issue such policy or policies is not the fault of the Company. IN WITNESS WHEREOF, TRANSNATION TITLE INSURANCE COMPANY has caused its corporate name and seal to be hereunto affixed by its duly authorized officers on the date shown in Schedule A. NOTE: THE POLICY COMMITTED FOR RA :.V ;E EXAFY ONED r Y INQUIRY AT THE OFFICE WHICH ISSUED THE COMMIT .1ENT, AND A SPECIRAEN COPY OF THE POLICY FOR (OR FOS r.IS) REFE RE TO IN THIS CORA ?OTENT WILL sE FU - NOSH -IED PROMPTLY UPON REQUEST. TRANSNATION TITLE INSURANCE COMPANY By: Attest: President Secretary Commitment - WA C®iy10VJOTOkfIjFE T CO DOTIONS ND S1OPULATO®i JS 1. The term mortgage, when used herein, shall include deed of trust, trust deed, or other security instrument. 2. If the proposed insured has or acquires actual knowledge of any defect, lien, encumbrance, adverse claim or other matter affecting the estate or interest or mortgage thereon covered by this Commitment other than those shown in Schedule B hereof, and shall fail to disclose such knowledge to the Company in writing, the Company shall be relieved from liability for any loss or damage resulting from any act of reliance hereon to the extent the Company is prejudiced by failure to so disclose such know- ledge. If the proposed insured shall disclose such knowledge to the Company, or if the Company otherwise acquires actual knowledge of any such defect, lien, encumbrance, adverse claim or other matter, the Company at its option may amend Schedule B of this Commitment accordingly, but such amendment shall not relieve the Company from liability previously incurred pur- suant to paragraph 3 of these Conditions and Stipulations. 3. Liability of the Company under this Commitment shall be only to the named proposed insured and such parties included under the definition of insured in the form of policy or policies committed for and only for actual loss incurred in reliance hereon in undertaking in good faith, (a) to comply with the requirements hereof, or (b) to eliminate exceptions shown in Schedule B, or (c) to acquire or create the estate or interest or mortgage thereon covered by this Commitment. In no event shall such liability exceed the amount stated in Schedule A for the policy or policies committed for and such liability is subject to the insuring provisions, the Conditions and Stipulations, and the Exclusions from Coverage of the form of policy or policies committed for in favor of the proposed insured which are hereby incorporated by reference and are made a part of this Commitment except as expressly modified herein. 4. Any action or actions or rights of action that the proposed insured may have or may bring against the Company arising out of the status of the title to the estate or interest or the status of the mortgage thereon covered by this Commitment must be based on and are subject to the provisions of this Commitment. SCHEDULE OF EXCLUSIONS 0=ROrr', COVER GE The matters listed below each policy form are expressly excluded from the coverage of that policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason thereof: 111 t poly .LN CLJ+ND `t�ll4LE ASSOCIATION LO EPOLIICY (10/17/92) and ARfJEROC ,til LAND InTLE SS®COQroo ! LEASEHOLD LOAN POLICY CO 0/17/92) The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1.(a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part of; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in ...s:.... .. 4Mi. (`mmnnnv by the' incurart claimant nrior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy (except to the extent that this policy insures the priority of the lien of the insured mortgage over any statutory lien for services, labor or material); or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any statutory lien for services, labor or materials (or the claim of priority of any statutory lien for services, labor or materials over the lien of the insured mortgage) arising from an improvement or work related to the land which is contracted for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance. 7. Any claim, which arises out of the transaction creating the interest of the mortgage insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (a) the transaction creating the interest of the insured mortgagee being deemed a fraudulent conveyance or fraudulent transfer; or (b) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine of equitable subordination; or (c) the transaction creating the interest of the insured mortgagee being deemed a preferential transfer except where the preferential transfer results from the failure: (i) to timely record the instrument of transfer; or (ii) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. PRELIMINARY COMMITMENT SCHEDULE"A" ORDER NO.: 00159157 TO: YAKIMA CITY HALL 129 NORTH 2ND STREET YAKIMA, WA 98901 Attn: B–Benson— ) 1. Effective Date: May 28, 2002 at 5:00 p.m. 2. Policy or policies to be issued: a. Owner's Policy Proposed Insured: CITY OF YAKIMA, a municipal corporation b. None Proposed Insured: c. None Proposed Insured: 3. A. Premium: B. Premium: C. Premium: $190.00 Tax: $15.01 Tax: $ Tax: $ ISSUED BY: SCHREINER TITLE COMPANY 30 North Second Street Yakima, WA 98901 (509) 248-5801 Amount $TO COME Amount $ Amount $ Total: $205.01 Total: $ Total: $ 4. The estate or interest in the land described herein and which is covered by this commitment is: Fee Simple Estate 5. The estate or interest referred to herein is at Date of Commitment vested in: CITY OF YAKIMA, a municipal corporation 6. The land referred to in this Commitment is situated in the County of Yakima, State of Washington and is more fully described as follows: See Exhibit A attached hereto and made a part hereof. Commitment No. 00159157 SCHEDULE A - continued INDEX TO EXCEPTIONS FOR TAXES, ASSESSMENTS AND OTHER ITEMS WHICH USUALLY ARE CLEARED PRIOR TO CLOSING, SEE SCHEDULE "B". Investigation should be made to determine if there are any service, installation, maintenance or construction charges for sewer, water, or electricity. In the event this transaction fails to close, a cancellation fee will be charged for services rendered in accordance with our rate schedule. Exhibit A Commitment No. 00159157 The East 60 feet of Lots 15 and 16, and all of Lot 1, Block 149; the East 60 feet of Lots 9, 10, 11, 12, 13, 14, 15 and 16, all of Lots 1, 2, 3, 4, 5, 6, 7 and 8, Block 150, HUSON'S ADDITION TO NORTH YAKIMA, now Yakima, according to the plat thereof, recorded in Volume "A" of Plats, Page 11, records of Yakima County, Washington; TOGETHER with those portions of street and alleys accruing thereto by reason of vacation. Situated in Yakima County, State of Washington. ASSESSOR'S PARCEL NO.: 191319-12560 AREA CODE 331 PRELIMINARY COMMITMENT SCHEDULE B Commitment No. 00159157 EXCEPTIONS: Schedule B of the policy or policies to be issued will contain exceptions to the following matters unless the same are disposed of to the satisfaction of the Company. GENERAL EXCEPTIONS: A. Applicable Exclusions from coverage set forth on inside of Commitment cover. B. Defects, liens encumbrances, adverse claims or other matters, if any, created, first appearing in the public records or attaching subsequent to the effective date hereof but prior to the date the proposed Insured acquires for value of record the estate or interest or mortgage thereon covered by this Commitment. C. Instruments necessary to create the estate or interest to be properly executed, delivered and duly filed for record. SPECIAL EXCEPTIONS: 1. Real Estate Excise Tax as may be due on this transfer, as now imposed at the rate of 1.53% of the taxable value for all area codes except 540 AND 420, which are 1.78% of the taxable value. 2. Real property taxes are currently classified as exempt. 3. Reservation of easements and rights of way for water maths, sewers or utilities, together with stipulation that no buildings may be constructed within vacated streets and alleys without approval of the City of Yakima, contained in Ordinance No. 1814, vacating alleys and streets, and filed in Volume 963, July 29, 1975 under Auditor's File Number 2392899. 4. An easement affecting a portion of said premises and for the purposes stated herein, and incidental purposes, for underground water pipeline, in favor of Old Union Irrigation Company, as recorded November 26, 1975, in Volume 977 of Official Records, under Auditor's File Number 2404437. 5. Agreement and the terms and conditions thereof between the City of Yakima and Morco Co., dated December 1, 1975, and recorded January 13, 1976, in Volume 981 of Official Records, under Auditor's File Number 2408241, regarding driveway or roadway easement. 6. Right of way and secondary easement granted to Pacific Power and Light Company for lines and appurtenances, the specific location of which is not disclosed, granted by instrument recorded September 27, 1979, in Volume 1052 of Official Records, under Auditor's File Number 2560652. SCHEDULE B - continued Commitment No. 00159157 7. Matters disclosed on Survey map prepared by PLSA and filed on December 29, 1995 in Book 62, Page 80 of Surveys, records of Yakima County, Washington. Among other items, the map discloses a fence, wall and garbage enclosure. NOTE A: The City of Yakima no longer assesses for irrigation maintenance on an individual billing. All irrigation charges will be included as a composite item of the regular City services billing. END OF SCHEDULE B jr /05/31/02 By SCHREINER TITLE COMPANY Your Tit( fficer Is: KAY MULKEY PRELIMINARY COMMITMENT SCHEDULE C Commitment No. 00159157 There is an action pending in Yakima County Superior Court under Cause No. 77-2-01484-5, notice of which has been given by the recording of a Lis Pendens on October 14, 1977, in Volume 1012 of Official Records, Auditor's File No. 2479271. Said action is an action wherein the Plaintiff: Department of Ecology, State of Washington, prays for a determination of water rights affecting the Yakima River Drainage Basin. Defendants are all parties using surface water of said drainage basin. I. Within Schedule B. General Exceptions of the Policy is the following exception to coverage therefrom: "Water rights, or matters relating thereto." Therefore, as to the STANDARD AND RESIDENTIAL POLICY, STANDARD AND RESIDENTIAL FORM PURCHASER'S POLICY, STANDARD FORM LEASEHOLD POLICY, and the STANDARD FORM MORTGAGEE'S POLICY, the foregoing action is EXCEPTED from the insurance afforded thereby. II. As to the Lender's Extended Loan Form Policy the foregoing pending action, by reason of this affirmative statement, DOES INSURE AGAINST ANY LOSS which the insured may sustain by reason of any judgment or final order entered therein OTHER THAN that which pertains to the quantum of and/or rates for waters which may be withdrawn or used. 1 inCn = 20v • /1 /.5. 177-178R ▪ SW i 486-40_0-6 11021 1..72. 11020 , sir 11022 11023 11: LARRISON'S ADDITION 11507 3.18 16 12541 15 16 TERRACE Z. 11491 m 3 r0 1 11490 F 1 26 1 25 24 south lino of HUSON ADON a 11404 1.15 11405 1 1 2.15 3e ( �v O 4 23 EAST +1 1 • /4424 • 1 .271 3 • 14425 2 .19 3 FRANCQS 5 RIV 22 ( 1146 h 6 ER v• 21 11495 1 1 5 61 1 5. .. 1. 1::79 43 3 3114 tJig9 i. \\\\\ 2 FENrON 15 13966 •a 3561 14412 12 11 This sketch is provided, without charge, for your information. It is not intended to show all matters related to the property including, but not limited to, arca, dimensions, easements, encroachments or location of boundaries. It is not a part of, nor does it modify the commitment or policy to which it is attached. The Company assumes NO LIABILITY for any matter related to this sketch. Reference should he made to an accurate survey for further information. 14037 34 /72. 500 FEET • , • • /•• •--- •- • :.YAKI DEC 29 2 oi4 PH '95 D 01!!:' 511°1 0 44 )CK 1l2 BRASS PLUG IN MON. CASE FND. PLAT MON. -\ i -1,(60) bri3 • <6 Q\ A.L) 1 \ \-59.9 C3 • ----,f5 k...‘ ; \ _--- ,--- o --uil 0\ ...-- ..... ,.0 A ..-- ,-- .---‘ ul —./ - ---- \ o. o o' .1" SEE DETAIL 2 \ 9 Sji g re‘c)\ _groos 1/2" REBAR WITH CAP LS NO. 16909 FOUND AT 2.0' OFFSET SOUTH tp 1-3 0 o g \- ,oN 0 59 v A•59. LAA0) "\ 09°) 19'9'1 3120721 6' CHAINLINK FENCE N g'± SEE DETAIL 1 GARBAGE ENCLOSU R DETAIL 1 ON. OT FOUND . CASE \ 0 0 00 "X" ON STEEL / / 0.11'± / >� /\ /0.40'± . 0 4" W . \ \ 8" BLOCK WALL \ I \ / 7' CHAINLINK \ / FENCE ON 6' \\ CONC. FOOTING /N./ DETAIL 2 i I/° - - 5 0 n . (1) __„\ i9.96 13 o ul O'��n1 1 0o tko \ y Co \ N NA PLAT MON. I% MON. NOT FOUND a IN MON. CASE c9 \ cr �) LOCK X30 \iC----------- PLAT MON. 2" ALUM. CAP LS NO. 16909 FOUND \ PLAT MON. - 2" ALUM. CAP LS NO. 16909 FND. 09 ---10 ---1000�1� SURVEYO R THIS MAP CORRECTLY RE UNDER MY DIRECTION IN OF THE SURVEY RED KEN ORMBRECK IN DECE RICHARD L. WEHR, CERTII CLTA STANDARD COVEF(A.GE LOAN POLICY 1990 The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or govemmental regulation (including but not limited to building or zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or govemmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Dateof Policy. (b) Any govemmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) whether or not recorded in the public records at Date of Policy, but created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy, or the inability or failure of any subsequent owner of the indebtedness, to comply with the applicable doing business laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage, or claim thereof, which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any claim, which arises out of the transaction vesting in the insured the estate or interest insured by this policy or the transaction creating the interest of the insured lender, by reason of the operation of federal bankruptcy, state insolvency or similar creditors' rights laws. ANEMIC Li;L I®'IITLE 4',SSOCBATDOEN OW ER'S and A MIE,`;9CL,,NED TITLE SSOCUATION LLE aSF;=DIOLED OV OLOCY (10/17/92) 1X9 El=;'S POLUCY (10/17/92) The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or govemmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the affect of any violation of these laws, ordinances or govemmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any govemmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 4. Any claim, which arises out of the transaction vesting in the Insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (a) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or (b) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure: (i) to timely record the instrument of transfer; or (ii) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. SCHEID ULE - STANDA.;D EXCEPTDONS SCHEDULE S EXCEPTIONS APPEARING IN ALTA OWNER'S POLICY - STANDARD COVE AGE AND CLTA STANDARD COVERAGE LOAN POLICY 1. Taxes or assessments which are not now payable or which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records; proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession, or claiming to be in possession thereof. 3. Easements, liens or encumbrances, or claims thereof, which are not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey of the land would disclose, and which are not shown by the public records. 5. Any lien, or right to a lien, for labor, material, services or equipment, or for contributions to employee benefit plans, or liens under workmen's compensation acts, not disclosed by the public records. 6. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) Indian treaty or aboriginal rights, including, but not limited to, easements or equitable servitudes; or, (d) water rights, claims or title to water, whether or not the matters excepted under (a), (b), (c) or (d) are shown by the public records. 7. Right of use, control or regulation by the United States of America in the exercise of powers over navigation; any prohibition or limitation on the use, occupancy or improvement of the land resulting from the rights of the public or riparian owners to use any waters which may cover the land or to use any portion of the land which is now or may formerly have been covered by water. 8. Any service, installation, connection, maintenance or construction charges for sewer, water, electricity or garbage collection or disposal, or other utilities unless disdosed as an existing lien by the public records. SCHEDULE S EXCEPTIONS APPEARING IN ALTA OWNER'S POLICY - EXTENDED COVERAGE 1. Taxes or assessments which are not now payable or which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records; proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Underground easements, servitudes or installations which are not disclosed by the public records. 3. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) Indian treaty or aboriginal rights, including, but not limited to, easements or equitable servitudes; or, (d) water rights, claims or title to water, whether or not the matters excepted under (a), (b), (c) or (d) are shown by the public records. 4. Right of use, control or regulation by the United States of America in the exercise of powers over navigation; any prohibition or limitation on the use, occupancy or improvement of the land resulting from the rights of the public or riparian owners to use any waters which may cover the land or to use any portion of the land which is now or may formerly have been covered by water. 5. Any service, installation, connection, maintenance or construction charges for sewer, water, electricity, or garbage collection or disposal, or other utilities unless disclosed as an existing lien by the public records. B 1004-250 1 A NORTHWEST REGION 1010 South 336th Street, Suite 215 Federal Way, Washington 98003 (253) 838-1054 AGENCY OPERATIONS 10655 4th Street, N.E., Suite 428 Bellevue, Washington 98004 (425) 452-5353 TITLE AGENTS Washington Benton . Clallam . Cowlitz . Franklin Island . Jefferson . Lewis Pacific . Skagit . Yakima Oregon Benton . Curry . Deschutes . Jackson Klamath . Lane . Lincoln . Linn . Marion Polk . Umpqua . Yamhill 01111011NON00111111101110101011110101.11 111 n,IIIIIIIIIIl111nInnn.110 1111011111111011111111111111111 111111111111111111111415 r COMMITMENT FOR TITLE INSURANCE ISSUED BY TRANSNATION TITLE INSURANCE COMPANY Transnation A LANDAMERICA COMPANY HOME OFFICE: 101 Gateway Centre Parkway, GatewayDne Richmond, Virginia 23235-5153 1-800-446-7086 '7111,11111111111,10. 1111111 11 NORTHWEST REGION Washington Chelan -Douglas Counties 700 N. Mission Street, Wenatchee, WA 98807 (509) 662-4721 . King County 1200 Sixth Avenue, Suite 100 Park Place Building Seattle, WA 98101 (206) 628-4650 . Kitsap County 9619 Levin Road N.W., Silverdale, WA 98383 (360) 692-4556 . Okanogan County - 715 Okoma Drive, Omak, WA 98841 (509) 422-3490 . Pierce County 6111 100th Street S.W. Lakewood, WA 98499 (253) 589-1488 . Snohomish County 2939 Colby Avenue, Everett, WA 98201 (425) 252-1156 . • Spokane County North 720 Argonne Road, Spokane, WA 99212 € (509) 922-2222 . Thurston County 3905 Martin Way East, Suite A, Olympia, WA 98506 (360) 459-2331 Oregon Multnomah . Clackamus • Washington Counties 12360 East Burnside Portland, OR 97223 (503) 256-7400 1 ,@ , Yakima Convention Center Proposed Expansion Market/Financial Analysis October 27, 2000 JKA File #00-125 Prepared by Jinneman, Kennedy, and Associates, P.S. 6720 Fort Dent Way, Suite 120 Seattle, Washington 98188 Prepared for City of Yakima Engineering Division 129 North 2nd Street Yakima, Washington 98901 October 27, 2000 Mr. K. Wendell Adams, P.E. City Engineer Engineering Division 129 North 2nd Street Yakima, Washington 98901 Dear Mr. Adams: Hospualin Investment Advisors At your request, we have completed a market/financial analysis of the proposed expansion of the Yakima Convention Center. The purpose of the assignment was to review the historical performance of the convention center, evaluate the competitive position of the Yakima facility, make recommendations concerning the proposed expansion, and estimate future performance. In the course of our study, we inspected the existing facilities of the Yakima Convention Center, reviewed the preliminary plans for the expansion, and interviewed the management of the convention center and the Yakima Valley Visitors and Convention Bureau. We reviewed historical operating statements of the convention center, a listing of hosted events, the current forecast of events booked, and the record of lost business. We inspected each of the hotels in the primary and secondary tiers of the local lodging market, interviewed property management, and gathered monthly and annual data on performance. We identified those communities that compete most directly with Yakima in the convention market; in each case, we inspected the existing meeting and event facilities, identified and inspected the primary tier of convention hotels, and interviewed management. We surveyed associations that generate convention demand. We developed specific recommendations concerning the scope and nature of the proposed expansion. Based on these recommendations, we prepared a forecast of convention center revenue, operating expenses, and lodging tax receipts. The attached report presents a summary of our research, analysis, and recommendations. We will be pleased to assist you in the interpretation and application of this study. Respectfully submitted, By: John D. Gordon, MAI Thomas P. Kennedy, CHA Jinneman, Kennedy, & Associates, P.S. 6720 Fort Dent Way, Suite 120 Searle, Washington 98188 Telephone (206) 439-6733 Fax: (206) 439.7059 Assumptions Limiting Conditions Certification TABLE OF CONTENTS PREFACE SECTION I EXECUTIVE SUMMARY Introduction I-1 Scope Of The Study I-1 Resources I-3 Format Of The Report 1-4 Summary Of Findings I-4 SECTION II OVERVIEW OF THE CONVENTION MARKET Meeting And Event Facilities 1I-1 Trends In The National Meetings Market 11-2 The Convention Market In Washington 11-3 SECTION III YAKIMA CONVENTION CENTER Location f-1 Development History f-2 Facilities I11-3 Amenities I11-4 SECTION IV HISTORICAL PERFORMANCE Measures Of Performance IV -1 Convention Center Volume IV -2 Revenue, Expenses, And Income W-7 Summary IV -13 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors TABLE OF CONTENTS SECTION V YAKIMA LODGING MARKET Market Supply V-1 Market Demand V-5 SECTION VI COMPARABLE MARKETS Selection Criteria VI -1 Wenatchee VI -2 Tri -Cities VI -4 Spokane VI -6 Summary VI -9 SECTION VII MARKET DEMAND AND COMPETITIVE POSITION Methodology VII -1 Regional Market Demand VII -2 Competitive Position VII -6 Demand Survey VII -7 Summary VII -9 SECTION VIII CHALLENGES AND RECOMMENDATIONS Operating Challenges VIII -1 Recommendations VIII -4 SECTION IX PROJECTED PERFORMANCE Scenarios a-1 Projected Market Conditions [X-2 Projected Penetration And Revenue IX -3 Projected Expenses And Net Operating Income/Loss IX -8 Projected Lodging Tax Receipts IX -1 1 ADDENDA JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors PREFACE ASSUMPTIONS This market/financial analysis has been prepared under the following general assumptions: • No responsibility is assumed for matters of a legal nature. • Responsible ownership and competent property management are assumed. • The information provided by others is believed to be reliable. However, no warranty is given for its accuracy. • All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. • It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less useful. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. • Full compliance with all applicable federal, state, and local environmental regulations and laws is assumed. • Full compliance with all applicable zoning and use regulations and restrictions is assumed. • It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained. • It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass. JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality investment Advisors LIMITING CONDITIONS This market/financial analysis has been prepared under the following general limiting conditions: • Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of Jinneman, Kennedy, and Associates, P.S., and in any event only with proper written qualification and only in its entirety. • Jinneman, Kennedy, and Associates, P.S., is not required to give further consultation, testimony, or be in attendance in court with reference to this report unless arrangements have been previously made. • Projections of future revenue, expenses, net operating income, mortgage debt service, capital outlays, cash flow, or inflation represent our judgment of the assumptions likely to be used by informed persons in the marketplace. These estimates are intended solely for analytical purposes and are not intended to accurately predict future results or events. Actual performance will differ from these projections, and these differences may be significant. • In accordance with our contract with the client, the accompanying analysis is not intended to be a complete market analysis or appraisal. The purpose of this market overview feasibility study is to assist in the initial development planning of the client. The results of this market overview analysis are subject to change based on completion of a full market study or appraisal. • Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention of nor did the consultant become aware of such during the consultant's inspection. The consultant has no knowledge of the existence of such materials on or in the property unless otherwise stated. The consultant, however, is not qualified to test such substances or conditions. The presence of such substances, such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions, may affect the feasibility of the project. Our analysis is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto. No responsibility is assumed for any such conditions, nor for any expertise or engineering knowledge required to discover them. JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors CERTIFICATION I certify that, to the best of my knowledge and belief: • The statements of fact contained in this report are true and correct. • The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. • I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. • My compensation is not contingent upon the attainment of a stipulated result or upon an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report. .♦ My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with and subject to the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. • John D. Gordon and Thomas P. Kennedy each have made a personal inspection of the property that is the subject of this report. • No one provided significant professional assistance to the persons signing this report. • As of the date of this report, John D. Gordon has completed the requirements of the continuing education program of the Appraisal Institute. Joh . Gordon, MAI Thomas P. Ke JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors SECTION I EXECUTIVE SUMMARY SECTION I EXECUTIVE SUMMARY INTRODUCTION Jinneman, Kennedy, & Associates, P.S., was engaged by the City of Yakima to conduct a market/financial analysis of the Yakima Convention Center. The center was first opened in 1976 and expanded in 1997. The purpose of this study was to assist the City in estimating demand for the facility and evaluating a proposed further expansion. The engagement was authorized by resolution of the Yakima City Council, dated August 15, 2000, a copy of which is included in the Addenda. The engaging entity is the City of Yakima, represented by Mr. K. Wendell Adams, P.E., City Engineer. SCOPE OF THE STUDY The Convention Center Market Our first task in this study was to determine and evaluate the current market for the Yakima Convention Center. The two components of this market analysis are supply and demand. The competitive market supply consists of convention centers that are located within the Pacific Northwest region, offer comparable facilities and services, and cater to a similar mix of conventions, corporate meetings, trade shows, and other events. Using these criteria, we identified the most direct competitors of the Yakima Convention Center, including both free-standing convention centers and convention hotels. We inspected these competing facilities and interviewed management, focusing on the issues of capacity, quality, seasonality, and sources of demand. Based on this research, we estimated the current and historical volume of demand for the competitive market. Our analysis considered the segmentation of demand by location, season, source, and type. Historical demand growth and economic and demographic indicators were used to project the volume of convention center demand for a five-year forecast period. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page I-1 Hospitality Investment Advisors Market Share of the Yakima Convention Center We reviewed the historical volume of demand captured by the Yakima Convention Center. By comparing this data to the results of our market analysis, we derived the achieved market share of the Yakima facility. We estimated the share of overall market demand that could be captured by the Yakima Convention Center if it were to be expanded as proposed. This estimate took into account the quality and capacity of the expanded Yakima facility in comparison to its primary competitors. We estimated the market share that should be achievable in a representative future year, and projected the ramp -up of market share from completion through the absorption period. Facility Space Requirements We reviewed the plans for the proposed expansion, considering the capacity, flexibility, and configuration of function space in relation to market demand. Among the considerations addressed in this step were convention attendance, use of breakout space, food and beverage requirements, and suitability for concurrent events. Capacity and Revenue We considered the necessary trade-off between the development cost of new meeting space and the potential increase in revenue. This step focused on the elasticity of demand and the incremental effect of new capacity on captured demand, by estimating the stabilized annual revenue under several expansion scenarios. Potential Operating Challenges We identified potential challenges to the successful operation of the convention center, including the capacity of the Yakima lodging market, the quality and condition of local hotels, the site selection criteria of convention and meeting planners, and the possible implications for marketing of the convention center. We also considered the potential impact of development of competing lodging, conference, or convention facilities. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page I-2 Hospitality Investment Advisors Projected Operating Performance We projected the annual operating revenue and expenses of the expanded convention center through the absorption period and for a representative future year. These estimates took into account the project volume and mix of demand, the current fee structure, fees charged at comparable convention facilities, and anticipated inflation. HoteVMotel Tax We reviewed the historical volume of hotel/motel tax receipts generated in Yakima County over the past five years. We projected the annual volume of tax receipts with and without the proposed expansion, considering the projected volume and seasonality of convention demand, the capacity of the existing hotels, and the timing and impact of potential new lodging development. RESOURCES Information on the history and performance of the Yakima Convention Center was provided by the staff of the center and by representatives of the Yakima Valley Visitors and Convention Bureau. The performance of competing convention facilities and hotels was reported by the management of these properties. Economic data, including lodging tax receipts, was obtained from various state and local agencies. Input was received from several state associations through a mailed questionnaire. We reviewed several documents relating to the 1997 expansion. These included studies by Bucher, Willis & Ratliff; Traho, Inc.; HNTB Corporation; and Property Counselors. We also reviewed the following studies and reports on the regional and national markets for conventions, lodging, and tourism. • Kennewick Convention Center Feasibility Study, Final Report; Property Counselors; 1996 • Washington State Visitor Profile; Dean Runyan Associates; 1997 • Thurston County Convention/Conference Center Feasibility Study, Market Analysis; Property Counselors; 1998 • Leavenworth Civic/Convention Center Feasibility Study; Huckell/Weinman Associates and Buffalo Design; 1999 • 2000 Meetings Market Study; Meetings and Conventions Magazine; 2000 • Washington State County Travel Impact 1993-1999; Dean Runyan Associates; 2000 JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page I-3 Hospitality Investment Advisors FORMAT OF THE REPORT The results of our analysis are presented in ten sections. • Introduction to the scope of the engagement and summary of findings (Section I). • Brief overview of the meetings and convention market (Section II). • Description of the Yakima Convention Center (Section III). • Review of the historical performance of the Yakima Convention Center (Section IV). • Description and analysis of the Yakima lodging market (Section V). • Identification, description, and evaluation of comparable markets (Section VI). • Analysis of regional market demand and current market position (Section VII). • Discussion of operating challenges and recommended facilities (Section VIII). • Projections of operating performance and lodging tax receipts (Section IX). SUMMARY OF FINDINGS The convention market encompasses a wide variety of facilities, including traditional convention centers, conference centers, convention hotels, and resorts. Nationally, the volume of meeting and convention activity is estimated at over one million events and nearly eighty million delegates. The Yakima Convention Center is located at the intersection of Yakima Avenue and North Eighth Street, just east of the city's downtown core. The existing facilities consist of a large divisible meeting room entirely surrounded by a perimeter lobby, offices, and services areas. The main meeting room has a total floor area of 23,568 square feet. There is also one breakout room with an area of 459 square feet. The Yakima area includes a number of amenities that make it especially attractive to meeting and event planners. Between 1992 and 1997, the annual number of event days recorded by the Yakima Convention Center fluctuated within a relatively narrow range, between 226 and 278. In 1998, following the first JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page I-4 Hospitality Investment Advisors expansion, the facility recorded 327 event days. By 1999, the figure had risen to 411. Growth in the number of attendees has paralleled the increase in event days. Available figures demonstrate a high degree of seasonality in convention activity. The increase in total revenue between 1997 and 1999 was proportionate to the increase in meeting area. The volume of meeting space was expanded by 68.5 percent; after adjusting for inflation, total revenue increased by about 70 percent. The Yakima lodging market consists of 24 hotels and motels, providing a total of 1,940 guestrooms. We have analyzed this market in three tiers, based on the degree of involvement with and reliance on the convention center. During 1999, we estimate that the hotels in the primary and secondary tiers attracted a total of 218,700 occupied room nights, for a market occupancy rate of 62.6 percent. The average daily room rate during that year is estimated at $63.30. Based on partial -year results and hotel management expectations, we estimate a market occupancy rate of 64.4 percent for the year 2000, with a market average room rate of $64.80. Approximately 69,000 rooms were occupied in the group segment in 1999, accounting for 32 percent of total demand. We identified three market areas that are reasonably comparable to Yakima in terms of geographic location and accessibility, the type and volume of meeting space, the quality and capacity of local hotels, and urban amenities: Wenatchee, the Tri -Cities, and Spokane. Wenatchee Center is a publicly -owned convention facility located just east of Wenatchee Avenue in the city's downtown core; the center opened in 1980, and was expanded in 1997. The Trade, Recreation, and Agricultural Center (TRAC), located in Pasco, consists of a 38,184 square foot exhibit hall and an arena, linked by a central lobby and prefunction area. The Spokane Convention Center, Opera House, and International Agricultural Trade Center are adjoining structures located in downtown Spokane, on the south shore of the Spokane River. The total meeting and exhibit space in the competitive market, including public facilities and primary hotels, is roundly 264,000 square feet. In 1999, the competitive market generated an estimated 215,100 group room nights and over $38,000,000 in the combined revenue of convention centers and primary hotels. Over the past five years, regional market demand has increased significantly. In 1999, Yakima captured greater than its proportionate share of revenue and group room nights. JKA#00- 125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page I-5 Hospitality Investment Advisors By most measures, the Yakima Convention Center and the primary convention hotels have been very successful in capturing regional convention demand. The principal advantages of Yakima are the quality of the convention center facilities and staff, the central location of the community within the region, and a moderate rate structure. The city also benefits from the lack of a convention center in the Tri -Cities, and what appears to be an underutilization of the facilities in Spokane. The main disadvantages of Yakima are external to the convention center itself. Groups that have used or considered the city as a venue for events have expressed concerns with regard to the quality of available lodging, the character of the surrounding neighborhood, and the availability of cultural and recreational activities. Also, the city of Wenatchee is a strong competitor: while its convention center does not have as large a volume of contiguous space, it does offer a more flexible meeting venue, and is very popular with small and midsize events. The most fundamental challenge to the Yakima Convention Center is new competition, in particular the likely development of a new convention center in the Tri -Cities. Internal challenges relate to the capacity and flexibility of meeting rooms, and service space and accessibility. In addition to new competitive facilities, external challenges include the further promotion of cultural and recreational amenities, and the quality and capacity of the local lodging market. The City of Yakima has several options with respect to the further expansion of the Yakima Convention Center. The first option (discussed in this report as Scenario 1) is to do nothing, continuing to operate the center with its present capacity and configuration. The second option (Scenario 2) is to extend the existing structure to the north, adhering to the long-range plan developed as part of the 1997 expansion. A third option (Scenario 3) is to construct a freestanding building to the east of the existing structure, across North Eighth Street. Based on our analysis of the existing facilities, historical operating performance, and current and anticipated market conditions, it is our opinion that further expansion of the Yakima Convention Center is warranted. We recommend that the City of Yakima consider each of the two development options. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page I-6 Hospitality Investment Advisors SECTION II OVERVIEW OF THE CONVENTION MARKET SECTION II OVERVIEW OF THE CONVENTION MARKET MEETING AND EVENT FACILITIES In the broadest sense, a convention facility is a location that accommodates group functions. Within this broad spectrum, properties are differentiated according to facilities and use. Convention Centers A traditional convention center provides one or more large rooms for meetings or banquets, breakout rooms to house smaller meetings, and an open area for exhibits. Typically, the space is designed with flat floors, moveable soundproof partitions, and flexible furnishings. Meeting space is carpeted, whereas exhibit areas may have carpeted or concrete floors. Conference Centers A conference center is a high-end derivative of the typical convention center. These facilities tend to be relatively expensive, and cater primarily to a corporate clientele. Conference centers have multiple meeting rooms, some of which have fixed walls and all of which provide a quiet, insulated environment. Some centers have a terraced, fixed seat auditorium. There are designated areas for coffee and snack breaks. Equipment and furnishings are state of the art, with audiovisual services, internet and intranet communication, tackable wall surfaces, excellent lighting, and 18 -hour chairs. Many conference centers offer package plans that include meeting facilities, meals, and lodging. Convention Hotels Hotels that cater to convention and group business generally provide meeting space that is similar in character to that of a freestanding convention center, with divisible rooms and flexible furnishings. Convention hotels generate their highest profit margins through guestroom sales, and so tend to solicit groups that require overnight lodging. More often than not, the kitchen that serves the hotel restaurant also provides food service for banquets. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page II -1 Hospitality Investment Advisors 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Resorts Convention facilities in resort locations differ primarily in providing more extensive scenic and/or recreational amenities. Their goal is to provide those attending group functions with a comfortable, stress -free environment and a balance between work and play. Other Facilities Larger public assembly facilities occasionally are employed to house major corporate meetings, trade shows, or other events. Examples include the Tacoma Dome, the Sun Dome in Yakima, the Coliseum in Kennewick, the Arena in Spokane, and (until recently) the Kingdome in Seattle. Performing arts centers also can have a role in conventions, providing a venue for plenary sessions or entertainment. The newest example is the new performing arts center in Wenatchee. Other examples include the Spokane Opera House and the Capitol Theater in Yakima. TRENDS IN THE NATIONAL MEETINGS MARKET Conditions and trends in the national meetings market are reported in the 2000 Meetings Market Study, published by Meetings & Conventions Magazine. Convention Volume According to the study, over one million meetings were held in public facilities during 1999. The combined attendance at these functions approached 80 million attendees, and total related expenditures exceeded 540 billion. Table 2.1 shows the estimated volume of corporate meetings, association meetings, and conventions during 1999. Table 2.1 1999 Meeting Market Summary Number of Meeting Annual Meetings Attendance Expenditures Corporate Meetings 835,700 51,014,000 510,243,000,000 Association Meetings 174,200 15,599,000 S13,668,600,000 Conventions 11,600 12,306,000 S16,251,600,000 Total 1,021,500 78,919,000 S40,163,900,000 Source: 2000 Meetings Market Study, Meetings & Conventions Magazine JKA#00-125 JINNEMAN, KENNEDY. & ASSOCIATES. P.S. Hospitality Investment .advisors Page II -2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Trends In Meeting Volume Nationally, the volume of meeting and convention activity declined through much of the 1990s, but increased slightly in 1999. However, total meeting attendance remained low, and total expenditures were flat. The following table tracks the number of meetings and total attendance since 1989. Table 2.2 Trends In Meeting Volume Number of Meeting Average Annual Average Meetings Attendance Attendance Expenditures Expenditure 1989 1,066,000 93,700,000 88 $39,600,000,000 $423 1991 1,031,400 80,800,000 78 $35,000,000,000 $433 1993 1,019,600 84,500,000 83 $40,400,000,000 $478 1995 983,600 77,400,000 79 $37,400,000,000 $483 1997 984,700 79,500,000 81 $41,800,000,000 $526 1999 1,021,500 78,900,000 77 $40,200,000,000 $510 Source: 2000 Meetings Market Study, Meetings & Conventions Magazine Site Selection Criteria According to the survey, corporations, associations, and other groups have differing priorities when it comes to selecting a site for a meeting or convention. Corporations place the highest priority on the fees charged, the suitability of meeting rooms, and the quality of food and beverage service. Associations have similar concerns, although food service is less important to these groups than is the overall cost of the event. In the case of group incentive meetings, the safety and security of the destination takes precedence over facilities and services. For conventions, the availability of quality lodging is of paramount importance. THE CONVENTION MARKET IN WASHINGTON Market Supply Washington has a wide variety of convention facilities. The largest of these, the Washington State Trade and Convention Center in Seattle, is a 350,000 square foot complex with 100,000 square feet of meeting space and an equal volume of exhibit space. The center presently is in the midst of a major expansion that will double the volume of exhibit space. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page H-3 Hospitality Investment Advisors Several smaller cities have developed local convention centers. The major centers include those in Tacoma, Bellevue, and Ocean Shores, in Western Washington; and Yakima, Wenatchee, and Spokane, in Eastern Washington. The Tri -Cities, while lacking a true convention center, operates TRAC, a large exhibit hall and arena. The premier conference center in Washington is the Bell Harbor Conference Center, located on the Seattle waterfront. This high-end facility is owned by the Port of Seattle and caters to an international corporate market. Convention and group business is a major component of the Washington lodging market, and many of the larger hotels have substantial in-house meeting space. Among the properties especially active in this business are the Westin and Sheraton Hotels in downtown Seattle, the Sheraton Hotel in Tacoma, and numerous hotels carrying the WestCoast and Doubletree flags. Some Washington resorts also have extensive convention facilities. The largest of these are the Resort Semiahmoo in Blaine, and Skamania Lodge in Stevenson. Primary Source Markets For Convention Demand Demand for conventions and other events is generated by the activities of associations, government agencies, and private business. While the membership of these organizations is statewide, the level of activity tends to be affected by economic conditions in the major population centers. Seattle, Washington The greater Seattle area encompasses four western Washington counties aligned along the eastern shore of Puget Sound. King, Island, and Snohomish Counties comprise the Seattle Metropolitan Statistical Area. Pierce County includes the city of Tacoma. The combined population of the four -county area is approximately three million residents. In terms of population and economic strength, King County is the single largest county in Washington. As such, it plays a major role in setting the stage for economic development both in its neighboring JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page II -4 Hospitality Investment Advisors counties and statewide. King County is the home of both The Boeing Company and Microsoft Corporation. Other major industries in the area include transportation equipment, food products, wood products, fish processing, medical equipment, biotechnology, and electronic and measurement instruments. King County is also a regional center for professional and business services for both domestic and international commerce. Snohomish County was founded on the timber industry, and the county's economy has never been wholly severed from these roots. However, in the latter part of the century, lumber and wood products were supplanted as the dominant economic force. Today, Snohomish County's economy has become quite diversified, including strong retail, manufacturing, and services sectors. The aerospace industry, the new Naval Station Puget Sound (Homeport) in Everett, the Port of Everett, and computer software and retail businesses now comprise the area's economic base. Pierce County has long been one of the fastest growing counties in Washington, whether in terms of population, labor force, or employment. Centered on the city of Tacoma, the Pierce County economy is heavily influenced by three major economic sectors: military activity, national and international trade, and aerospace -related activity, all of which are affected by the global economy. Island County is largely rural, with low-density residential development and large areas devoted to agriculture. Whidbey Island includes numerous bed and breakfast inns and several small hotels. Spokane, Washington Located at the eastern edge of the state, Spokane is the business, cultural, social, and civic center of the Inland Northwest, a 36 -county, 80,000 -square -mile area that includes eastern Washington, northern Idaho, northeastern Oregon, western Montana, and southeastern British Columbia, with a population base exceeding three million. Spokane is the center of business and financial activity for most of the Inland Northwest region, and the preferred location for meetings, conventions, and exhibitions. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page II -5 Hospitality Investment Advisors Growth in surrounding Washington counties, northern Idaho, western Montana, and parts of British Columbia has contributed to growth in Spokane County. In addition, Spokane County's relatively well-developed infrastructure shares the credit for the recent surge in population and retail trade and services. The Boeing Company, Seafirst Bank Card Services, and Pitney Bowes Customer Services are only the three most prominent examples of firms that chose the Spokane area when they sought to expand and relocate: Despite growth in other sectors, Spokane County will, nonetheless, continue to be heavily invested in agricultural services, various types of manufacturing, and wholesale trade. As the population continues to grow, so will the government and education sectors as they respond to rising service demand. General Economic Indicators Beyond the primary source markets, the demand for convention facilities in Washington is influenced by the general health of the statewide economy. Table 2.3 provides a summary of selected economic indicators. JKA#00- 125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page II -6 Hospitality Investment Advisors EN EN 1 N== I M- I 1 MN I 1 i == NB M SZ 1-00#V)If Cr CI v Table 2.3 Economic Indicator Summary Population City of Yakima Yakima County State of Washington 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 CAAGR 54,843 57,676 58,706 59,580 59,740 60,850 62,670 63,510 64,290 65,500 2.0% 188,823 190,500 193,900 197,000 202,100 204,100 207,600 208,700 210,500 212,300 1.3% 4,866,663 5,000,371 5,1,16,671 5,240,900 5,334,400 5,429,900 5,516,800 5,606,800 5,685,300 5,757,400 l .9% Per Capita Personal Income Yakima County $15,531 $16,049 $17,225 $17,553 $17,768 $18,150 $19,154 $19,367 n/a n/a 3.2% State of Washington $19,605 $20,401 $21,436 $22,024 $22,687 523,677 524,958 $26,451 n/a n/a 4.4% Employment (Yakima County) Manufacturing 9,600 10,000 10,000 10,200 10,700 10,600 10,700 11,000 10,900 11,200 1.7% Construction/Mining 2,600 2,800 2,800 3,100 3,300 3,100 3,000 3,500 3,400 3,200 2.3% Trans/Comm/Utilities 3,000 3,000 3,000 2,900 2,900 3,000 3,100 2,900 3,000 2,700 -1.2% Wholesale/Retail Trade 20,100 19,700 20,500 20,700 21,700 22,400 22,100 22,200 21,000 21,000 0.5% Finance/Insurance/Real Estate 2,000 2,000 2,100 2,200 2,200 2,200 2,300 2,500 2,600 2,400 2.0% Services 15,800 16,100 17,000 17,800 18,100 18,500 19,100 19,500 20,100 20,000 2.7% Government 11,700 12,200 12,700 12,800 13,000 13,100 13,200 13,600 13,700 13,900 1.9% Total Nonagricultural 64,800 65,800 68,100 69,700 71,900 72,900 73,500 75,200 74,700 74,400 1.5% Unemployment Rate 10.7% 12.6% 13.5% 14.5% 11.6% 12.6% 13.5% 9.9% 10.5% 9.8% Employment (Washington State) Manufacturing 369,400 351,900 347,200 340,800 336,900 332,000 345,000 370,000 379,500 363,700 -0.2% Construction/Mining 121,100 121,900 122,600 122,300 126,400 125,000 131,300 139,800 147,000 156,600 2.9% Trans/Comm/Utilities 113,000 111,900 113,600 114,200 116,500 120,100 125,000 132,800 135,600 139,400 2.4% Wholesale/Retail Trade 521,600 527,200 537,800 546,600 565,100 580,000 590,900 607,000 622,800 635,800 2.2% Finance/Insurance/Real Estate 115,500 116,900 119,300 121,200 124.100 121,500 123,800 127,700 134,600 138,000 2.0% Services 504,400 536,000 557,800 576,700 598,100 624,000 649,200 678,900 709,300 736,100 4.3% Government 397,600 411,600 423,600 430,000 437,200 443,900 450,400 458,000 465,900 473,000 1.9% Total Nonagricultural 2,142,600 2,177,400 2,221,900 2,251,800 2,304,300 2,346,500 2,415,600 2,514,200 2,594,700 2,642,600 2.4% Unemployment Rate 4.9% 6.4% 7.6% 7.6% 6.4% 6.4% 6.5% 4.8% 4.8%4.7% Highway Traffic (AVD) Exit 25 (North of Yakima) 10,603 1/,000 12,000 12,000 13,000 I3.000 13,000 13,000 14,000 n/a 3.5% Exit 48 (South of Yakima) 15,400 16,000 16,000 17,000 18.000 19,000 19,000 21,000 21,000 n/a 4.0% US Consumer Price Index 130.7 136.2 140.3 144.5 148.2 152.4 156.9 160.5 163.0 166.6 2.7% Sources: WA Depts of Revenue, Employment, Transportation Figures in italics, if any, are interpolations WA Office of Financial Management CAAGR = Compound Average Annual Growth Rate for years shown SECTION III YAKIMA CONVENTION CENTER SECTION III YAKIMA CONVENTION CENTER This section of the report discusses the location, development history, convention facilities, available lodging, and urban amenities of the Yakima Convention Center. LOCATION The city of Yakima is the largest urban area in Yakima County, in southcentral Washington, and has nearly one-third of the county population. The city is the commercial hub for an otherwise agricultural region, and is home to a wide variety of retailers and services, as well as local, county, and state government offices. Major employment sectors include agriculture, food processing, retail trade, and services. With over 200,000 residents and a land area of nearly 4,300 square miles, the county ranks second in land area and seventh in population within the state. Yakima is served by two primary highways. U.S. Highway 97 links the area to the city of Ellensburg, Interstate Highway 90, and northcentral Washington to the north, and to central Oregon to the south. U.S. Highway 12 runs west across the Cascade Range to Interstate 5 and western Washington, and east to the Tri -Cities (Pasco, Kennewick, and Richland) and northcentral Idaho. Portions of U.S. 97 (between Ellensburg and Yakima) and U.S. Highway 12 (between Yakima and the Tri -Cities) are designated as Interstate Highway 82. The Yakima Convention Center is located at the intersection of Yakima Avenue and North Eighth Street, just east of the city's downtown core. Yakima Avenue is a primary surface arterial linking downtown Yakima with Interstate 82. Inaddition to the convention center, this route is improved with a variety of commercial uses, including hotels, restaurants, retail stores, and offices. The center occupies the eastern portion of the super block bounded by Yakima Avenue, North Sixth Street, East B Street, and North Eighth Street. The site includes the former right-of-way for Seventh Avenue, which was vacated for development of the center. The western portion of the block, fronting on North Sixth Street, is improved with a full service hotel, the WestCoast Yakima Center. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page III -1 Hospitality Investment Advisors The block immediately east of the convention center is improved with two small structures, a Dairy Queen restaurant and the offices of the local Chamber of Commerce, and is otherwise used primarily for parking. Further to the east, across North Ninth Street, are three hotels: the WestCoast Gateway, Holiday Inn Express, and Budget Suites. The blocks to the north of the convention center are improved with single-family residences. Several of the residential parcels immediately adjoining the grounds of the center could be incorporated into an expansion of the meeting space and/or related parking areas. DEVELOPMENT HISTORY The existing facilities of the Yakima Convention Center were developed in two phases. A proposed third phase of construction is the subject of this study. Phase I, the initial development, was planned during the early 1970s, and completed in 1976. This structure included a single large meeting room, divisible into four smaller units. In addition, the building included a prefunction lobby, offices, kitchen facilities, and storage areas. The total meeting area was 14,257 square feet; the gross building area was approximately 30,000 square feet. Phase II, the expansion of the center to its current form, was first studied in detail in 1989. Several other market and architectural studies followed, spread over a period of six years. Final approval of the expansion was granted in 1995, and work was completed in September 1997. The expansion increased the size of the ballroom to 23,568 square feet. With the enlarged lobby and additional storage and service areas, the gross building area increased to 51,650 square feet. The purpose of the current study is to evaluate a possible third phase of development. This further expansion was considered during the studies for Phase II. A tentative proposal discussed at that time would have increased the total meeting space to 38,344 square feet and the gross building area to 78,450 square feet, by extending the existing structure to the north. However, the specific scale and configuration of this next phase have not yet been finalized. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page III -2 Hospitality Investment Advisors FACILITIES The existing facilities of the Yakima Convention Center consist of a large divisible meeting room entirely surrounded by a perimeter lobby, offices, and services areas. The main entrance and prefunction lobby are located on the east side of the meeting rooms, fronting along North Eighth Street. A smaller secondary lobby extends around the north side of the meeting space. The southern end of the building houses administrative offices and restrooms, and is accessed by a public corridor. The west side of the convention center houses back -of -the -house facilities, including the kitchen, storage areas, and service corridors. The meeting room has an overall length of 259 feet, a depth of 90 to 92 feet, and a total floor area of 23,568 square feet. The meeting space is divisible into eight smaller units (designated as Rooms A through H) through the use of soundproof folding partitions. There is also a separate breakout room (Room I) with an area of 459 square feet, located on the east side of the lobby. Rooms A and B form the southern end of the meeting space. Each of these units has a floor area of 1,575 square feet. Room A is accessible from the public corridor along the south side of the convention center, as well as from the service corridor to the west. Room B has direct access only from the main lobby. Rooms C, D, and E are the largest individual units, ranging in size from 5,520 to 5,845 square -feet. Each of these rooms is accessible from both the main lobby and the service corridor. Rooms F, G, and H comprise the northern end of the meeting space. These rooms have areas of 1,122, 1,116, and 1,126 square feet, respectively. Room F is accessible from the north lobby and the service corridor. Rooms G and H have direct access only to the lobbies. The ceiling height is not consistent through the function space. In the first phase of construction, corresponding to Rooms A through D, a ceiling height of 15 feet was selected. In the 1997 expansion, the additional space (Rooms E through H) was built to a ceiling height of 23 feet. The floor plan on the following page, prepared as part of the 1997 expansion, shows the current configuration and capacities of the convention center. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page III -3 Hospitality Investment Advisors IIIIII MIMI NMI MN I= IMO =II 111111 MI I I 1E11 I I IM 11E1 MIS 'Milt 1E11 Mil OM 1E1 YAKIMA CENTER EXPANSION . . — — • — — — • — • — — • — • — • — — • ___ . . . . . . . . . . — . . • . . • • —Z1 !LA, 7 0 , • _ '• - T"N _ et- sarnfter amo, __ _L_ — — — Ta 7, - • • c 4.--S,Torokl• STG _ ‘,.,.r. .j.•111011;1CC. 60. *CO V 1....„ I I J' II' GUI 66.11 16..6 BANQUET ROOM If (1.575 SO. FT.) B ANQUET ROOM (1,122 SQ. FT.) BANOUET/ EXHIBIT AREA ROOM (5.845 SQ. FT.) BANQUET/ EXHIBIT AREA ROOM 'E' (SOU SO. FT.) B ANQUET ROOM 'Sr (1.115 SO. FT.) BANQUET ROOM 'B' (1.575 SO. FT.) BANQUET ROOM If (1.126 SO. FT.) -r- 66S. —rr 3 r 7 — • 27 J - 111 1! — n T 0.4-SSIMGI MIN 1 .61 OS 66.6606 GS. rIT 1-1 176.66T Room Square Feet Theatre Classroom Rounds A 1.575 150 60 105 B 1,575 150 60 105 FLOOR PLAN C 5.520 530 220 380 s.:...a. ,06--,.-e- D 5.845 560 230 400 E 5,689 545 220 390 F 1.122 105 45 75 G 1,116 105 45 75 H 1,126 105 45 75 Grand Hall 23.568 2,250 925 1,605 Per Person 10.4 sq.ft. 25.4 sq.ft. 14.6 sq.11. EXISTING SPACE EXPANSION AREA A u MINSIZSTS 0•64CPS 6.•••06 x FLOOR PLAN — OPTION (EXISTING & NEW) --66.061:1 1-011- TRAHO ARCHITECTS Comae 0 Ka 66- 1-6-04 00. 166 AMENITIES The Yakima area includes a number of amenities that make it especially attractive to meeting and event planners. Sun Dome The largest enclosed structure is the Sun Dome, a 36,000 square foot arena that is the home court of a CBA basketball team. In addition to basketball and other athletic events, the Sun Dome is used for trade shows, concerts, and very large meetings, such as the annual gathering of Jehovah's Witnesses. The facility accommodates 6,000 fans for athletic events, and up to 8,000 attendees for concerts, meetings, and trade shows. Capitol Theater The Capitol Theater was originally built in 1920, operated successfully for many years, then gradually fell into disrepair. In 1975, the theater was placed on the National Register of Historic Sites- and sold to the City of Yakima. Shortly thereafter, fire gutted the interior of the structure. Over the next three years, the building was fully restored with the help of insurance proceeds, local donations, and public funds. It reopened in 1978. The theater has a seating capacity of 1,500, a fully equipped stage, storage and staging areas, and the Robertson Room, a public meeting and reception room. - Yakima Stadium This outdoor baseball stadium is home to the Yakima Bears, a Class A farm club of the Los Angeles Dodgers. In addition to the Bears, the stadium is used for other sporting events and concerts. It seats 3,000 in the stands and an additional 5,000 on the field. Fairgrounds The Yakima County Fairgrounds is the site of several cultural and recreational activities through the year, including the annual Central Washington State Fair. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page DI -4 Hospitality Investment Advisors Yakima Valley To the south and east of the city of Yakima, along the banks of the Yakima River, is a largely unincorporated region known as the Yakima Valley. The Valley consists of a handful of towns and villages distributed at intervals along the river, and separated by extensive agricultural acreage. Farmers in the Yakima Valley grow 75 percent of the nation's hops, a basic and necessary ingredient in beer. Over the past 20 years, the area also has become known for its vineyards and wine production. There are presently 26 vineyards in operation throughout the Valley, many of which offer tours and tastings. Recently, the wineries have participated in a joint marketing effort, with support from the Washington State Department of Tourism. The town of Toppenish is located about 20 miles south of Yakima along US Highway 97. To attract visitors and promote local retailers, the town has developed a western theme for its central business district. The dominant feature of this effort is the proliferation of murals throughout the downtown area, each of which presents some aspect of the area's history and culture. Tours of the murals have become a strong draw for half-day or overnight visits. The Yakama Indian Nation occupies an area of approximately 150 square miles south and west of the Yakima River. Among its attractions are the Yakama Nation Cultural Center and the Legends Casino. Recreation The Yakima area offers a wide variety of opportunities for recreation. The city has over 300 acres of parks. Apple Tree Golf Course is a highly regarded 18 -hole course. The White Pass ski area is a one-hour drive to the west. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page III -5 Hospitality Investment Advisors SECTION IV HISTORICAL PERFORMANCE SECTION IV HISTORICAL PERFORMANCE MEASURES OF PERFORMANCE The performance of the Yakima Convention Center is evaluated through measures of volume, revenue, and net operating income. Center management tracks the number and duration of events held at the convention center, and the number of participating delegates. These records are kept in several formats, measuring events, event days, delegates, and attendees. An event day is defined as one event held for one day; a three-day convention would generate three event days. An attendee is equivalent to a delegate day; 100 delegates attending a three-day convention would be recorded as 300 attendees. The events are tracked in three categories: conventions, trade shows, and other; the "other" category includes a wide variety of one -day meetings, banquets, receptions, and religious functions. Since 1998, this data has been broken down according to the point of sale, separating events that are booked by the Visitor and Convention Bureau from those booked through individual hotels. Beginning in 1999, events have been further categorized according to the facilities utilized: the convention center, hotel meeting rooms, sports facilities, and other venues. Also tracked are advance bookings, including both definite and tentative events. The historical records report monthly revenue from meeting room rental, catering commissions, and other charges. These figures include commission revenue from banquets and other events that are catered through the convention center kitchen but held "out of building" (e.g., at a local hotel or other facility). For example, in June 2000, off-site catering contributed nearly $5,000 in commissions to the center account. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -1 Hospitality Investment Advisors CONVENTION CENTER VOLUME Event Days Between 1992 and 1997, the annual number of event days recorded by the Yakima Convention Center fluctuated within a relatively narrow range, between 226 and 278. In 1998, following the first expansion, the facility recorded 327 event days. By 1999, the figure had risen to 411. Significant growth was seen in the number of conventions. This category includes events that involve a significant number of delegates, require catering services, and extend over two or more days; these are also the events that are most likely to benefit local hotels. From an annual average of just over 100 event days prior to the expansion, convention activity increased to 128 events days in 1998 and 180 event days in 1999. The number of trade shows held at the center actually declined, from an average of 17 events per year prior to the expansion, to only six events in 1999. This result probably does not reflect an overall drop in trade show activity in the region, but rather the displacement of trade shows in Yakima by conventions and other more lucrative events. Trade shows are not a preferred source of business for the convention center, as they attract a largely local audience and generate little in the way of catering revenue or hotel demand. The "other" category increased from an average of about 140 annual event days prior to the expansion to over 200 event days in 1999. Attendees Growth in the number of attendees has paralleled the increase in event days. Convention attendance increased from an annual average of about 40,000 delegates prior to the expansion to nearly 80,000 in 1999. Trade show attendance dropped with the reduction in the number of such events. Attendance at other events rose from about 38,000 to just over 60,000. Overall, there was no change in the average size of an event (the ratio of attendees to event days). A slight increase in size was recorded in the convention category, but this was offset by reductions in the average size of trade shows and other events. Table 4.1 presents the historical volume of event days and attendees at the Yakima Convention Center. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -2 Hospitality Investment Advisors SZ [ -00#V?If 1111111 1 111111 NM N N 11111 1 I 11111 NM 1 NM I I Table 4.1 YCC Event Days And Attendees By Type Of Event Conventions Trade Shows Other Total Event Days Attendees Avg Event Event Days Attendees Avg Event Event Days Attendees Avg Event Event Days Attendees Avg Event 1992 103 37,193 361 11 7,950 723 136 42,222 310 250 87,365 349 1993 111 42,127 380 21 16,500 786 134 40,932 305 266 99,559 374 1994 114 43,561 382 16 13,250 828 146 33,573 230 276 90,384 327 1995 72 27,877 387 18 14,075 782 136 35,235 259 226 77,187 342 1996 95 40,440 426 17 7,300 429 166 40,379 243 278 88,119 317 1997 114 39,245 344 11 5,300 482 124 41,194 332 249 85,739 344 1998 128 52,523 410 11 5,290 481 188 52,145 277 327 109,958 336 1999 January 5 1,435 287 0 0 0 19 5,583 294 24 7,018 292 February 0 0 0 3 2,000 667 21 5,486 261 24 7,486 312 March 13 6,805 523 0 0 0 15 6,264 418 28 13,069 467 April 9 2,220 247 0 0 0 22 8,140 370 31 10,360 334 May 23 8,555 372 0 0 0 14 4,259 304 37 12,814 346 June 16 7,310 457 0 0 0 16 2,661 166 32 9,971 312 July 26 12,610 485 3 2,000 667 17 3,398 200 46 18,008 391 August 18 6,391 355 0 0 0 21 5,615 267 39 12,006 308 September 20 9,857 493 0 0 0 11 1,660 151 31 11,517 372 October 33 17,260 523 0 0 0 16 6,064 379 49 23,324 476 November 14 5,490 392 0 0 0 26 5,850 225 40 11,340 284 December 3 445 148 0 0 0 27 6,706 248 30 7,151 238 Annual 180 78,378 435 6 4,000 667 225 61,686 274 411 144,064 351 CAAGR 8.3% 11.2% 2.7% -8.3% -9.3% -1.1% 7.5% 5.6% -1.8% 7.4% 7.4% 0.0% CAAGR = Compound Average Annual Growth Rate, 1992-1999 Source: Yakima Center Management Report (monthly) Seasonality Available figures from 1998 forward demonstrate the high degree of seasonality in convention activity. These monthly reports encompass most or all of the convention activity in Yakima, including both events held at the convention center and those that take place at local hotels. For this reason, the annual totals do not tie to the YCC figures presented in Table 4.1. Over the past three years, the largest numbers of events have been concentrated between May and July and September through October. Fewer events are held during the summer, when attendance at conventions may be problematic. Fewer still are scheduled during the winter months, due to real or perceived issues concerning highway travel across the Cascades. The pattern of seasonality in event attendance is somewhat different. During March, the area is host to regional sporting events that involve a large number of participants, though with little or no use of the convention center itself. Similarly, during August, a single large religious event boosts the citywide attendance figures. Table 4.2 shows the seasonality of local events and delegates since 1998, with the data broken down according to the point of sale (i.e., the visitor and convention bureau or the local hotels). Table 4.3 presents the same data for the first eight months of the years 1999 and 2000, categorized according to the facilities used. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -4 Hospitality Investment Advisors 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 4.2 Yakima Events By Point Of Sale Bureau Hotels Total Events Delegates Events Delegates Events Delegates 1998 January 4 641 10 522 14 1,163 February 2 2,215 10 606 12 2,821 March 9 10,520 19 1,116 28 11,636 April 7 3,212 17 1,262 24 4,474 May 7 7,006 12 731 19 7,737 June 20 8,141 14 688 34 8,829 • July 15 5,793 10 268 25 6,061 August 15 6,843 12 1,139 27 7,982 September 29 7,459 14 918 43 8,377 October 19 7,510 13 1,191 32 8,701 November 10 3,497 8 240 18 3,737 December 6 2,062 2 222 8 2,284 Jan -Aug 79 44,371 104 6,332 183 50,703 Annual 143 64,899 141 8,903 284 73,802 1999 January 4 1,097 3 216 7 1,313 February 3 506 6 938 9 1,444 March 15 16,925 7 1,154 22 18,079 April 15 3,670 13 1,016 28 4,686 May 23 10,077 8 418 31 10,495 June 21 8,004 8 386 29 8,390 July 21 7,707 4 273 25 7,980 August 8 9,137 2 95 10 9,232 September 16 5,695 5 238 21 5,933 October 15 9,691 6 239 21 9,930 November 7 2,675 2 180 9 2,855 December 4 896 1 98 5 994 Jan -Aug 110 57,123 51 4,496 161 61,619 Annual 152 76,080 65 5,251 217 81,331 2000 January 5 1,053 4 190 9 1,243 February 5 2,310 0 0 5 2,310 March 16 18,405 7 606 23 19,011 April 9 1,997 6 379 15 2,376 May 19 5,406 4 287 23 5,693 June 28 9,165 10 1,342 38 10,507 July 21 4,189 8 503 29 4,692 August 15 14,458 1 176 16 14,634 Jan -Aug 118 56,983 40 3,483 158 60,466 Percent Change 1998-1999 6.3% 17.2% -53.9% -41.0% -23.6% 10.2% 1999-2000 7.3% -0.2% -21.6% -22.5% -1.9% -1.9% Source: Convention Sales Monthly Recap JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors Page W-5 111111 N En 1 NM 1 11111 11111 N 111111 N M N IN111 NM 1 MI SZ I-oo#V)U crca Table 4.3 Yakima Events By Facility Convention Center Hotels Sports Other Total Events Delegates Events Delegates Events Delegates Events Delegates Events Delegates 1999 January 0 0 3 216 4 1,097 0 0 7 1,313 February 0 0 6 938 3 506 0 0 9 1,444 March 5 2,984 6 1,148 11 13,947 0 0 22 18,079 April 5 1,250 11 924 11 2,455 1 57 28 4,686 May 8 4,126 10 662 12 5,207 1 500 31 10,495 June 6 1,651 12 2,799 11 3,940 0 0 29 8,390 July 4 1,964 7 746 14 5,270 0 0 25 7,980 August 2 583 2 95 4 1,710 2 6,844 10 9,232 Jan -Aug 30 12,558 57 7,528 70 34,132 4 7,401 161 61,619 2000 January 1 263 4 190 3 655 1 135 9 1,243 February 2 1,779 2 251 1 280 0 0 5 2,310 March 6 3,445 9 831 7 14,235 1 500 23 19,011 April 2 246 8 760 4 920 1 450 15 2,376 May 4 1,356 5 419 14 3,918 0 0 23 5,693 June 5 2,405 12 1,480 19 5,866 2 756 38 10,507 July 3 1,344 10 763 16 2,585 0 0 29 4,692 August 3 1,302 1 176 9 3,156 3 10,000 16 14,634 Jan -Aug 26 12,140 51 4,870 73 31,615 8 11,841 158 60,466 Percentage Change -13% -3% -11% -35% 4% Facilities Mix 1999 18.6% 20.4% 35.4% 2000 16.5% 20.1% 32.3% -7% 100% 60% -2% -2% 12.2% 43.5% 55.4% 2.5% 12.0% 100.0% 100.0% 46.2% 52.3% 5.1% 19.6% 100.0% 100.0% 8.1% Source: Yakima Valley Visitor and Convention Bureau, Segmented Comparison REVENUE, EXPENSES, AND INCOME The management operating statements of the Yakima Convention Center account for revenue and expenses in two funds. Fund 170 is used for all operating revenue, including fee and commission income and an allocated share of lodging tax receipts. This fund also includes the ongoing operating expenses of both the Yakima Valley Visitors and Convention Bureau (designated as Unit 324) and the Yakima Convention Center (designated as Unit 325). Fund 370 is a capital improvement account. Sources of revenue for this fund include bond proceeds, interest, a share of lodging tax receipts, and miscellaneous transfers. Expenses are capital items, such as land acquisition, building construction, equipment purchases, and major repairs. Operating Revenue Sources Of Revenue The convention center generates operating revenue in three principal categories: meeting room rental, catering commissions, and other sources. The standard event contract includes a room rental fee based on the number of rooms/floor area utilized and the duration of the event. However, most groups receive a credit of 15 percent of any catering charges, up to the full amount of the rent. Larger events with full meal service frequently pay no additional room charges. Catering services at the convention_ center are provided by an independent contractor under an agreement with the City of Yakima. The convention center receives commissions based on the cost of meals and other services provided to the various events. The current contract, negotiated in 1996, calls for commissions payments of 16 percent of food and snack bar sales, 20 percent of alcoholic beverage sales, and 12 percent of vending sales for events that take place at the convention center. For events held off-site, but serviced through the convention center kitchen, the commission ratio is 12 percent of total sales. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -7 Hospitality Investment Advisors Other minor sources of revenue include equipment rental fees, tenant insurance, and interest. Growth In Revenue Between 1992 and 1995, fees received from the rental of meeting rooms in the convention center averaged $88,000 per year. Conventions generated about $38,000 in annual fees, and trade shows provided about $12,000. The balance came in the "other" category, including one -day events such as banquets, parties, and auctions. Rental fees grew substantially over the next two years, reaching $122,000 in 1997. Most of this growth was in the convention category, and likely was due to a more aggressive effort to market the facility for conventions. An even greater increase was seen following the expansion of the convention center. In 1998, rental fees totaled $196,000. By 1999, the figure had grown to over $268,000. The growth in annual revenue from catering commissions followed a similar pattern to room rental fees. Commissions averaged $130,000 annually between 1992 and 1995, rising to $165,000 by 1997, and to $245,000 by 1999. While still very significant, the rate of growth in commission revenue was slightly below the growth rate in rental fees. The increase in total revenue between 1997 and 1999 was proportionate to the increase in meeting area. The volume of meeting space was expanded by 68.5 percent; after adjusting for inflation, total revenue increased by about 70 percent. The historical operating revenue of the center is summarized in Table 4.4. These figures were compiled from segmented monthly reports, and so may differ slightly from the annual statements. In the table, the amounts shown as catering revenue reflect only the commissions paid by the catering contractor; the gross catering income generated by the contractor in 1999, upon which the commission was calculated, was $1,592,881. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -8 Hospitality Investment Advisors Table 4.4 Historical Operating Revenue Conventions Trade Shows Rent Catering Misc Total Rent Catering Misc Total 1992 $35,268 $44,588 $4,033 $83,889 $9,150 $600 $370 $10,120 1993 $45,268 $43,954 $4,634 $93,856 $15,870 $1,008 $2,877 $19,755 1994 $40,573 - $52,345 $5,307 $98,225 $10,789 $2,462 $880 $14,131 1995 $30,423 $40,664 $4,169 $75,256 $15,454 $3,730 $2,064 $21,248 1996 $47,168 $42,656 $6,370 $96,194 $15,929 $3,058 $1,036 $20,023 1997 567,510 $58,069 $6,421 $132,000 $11,100 $353 $600 $12,053 1998 $93,695 $71,936 $13,698 $179,330 $11,637 $7,287 $1,674 $20,598 1999 $123,705 $112,731 $16,715 $253,151 $11,600 $206 $600 $12,406 CAAGR 1992-97 13.9% 5.4% 9.7% 9.5% 1997-99 35.4% 39.3% 61.3% 38.5% 3.9% 2.2% -10.1% 10.2% 3.6% -23.6% 0.0% 1.5% Other Events Total Rent Catering Misc Total Rent Catering Misc Total 1992 $40,894 $74,511 $5,512 $120,917 $85,312 $119,700 $9,915 $214,927 1993 '$32,472 $77,549 $5,378 $115,399 $93,610 $122,511 $12,889 $229,010 1994 $36,711 $84,873 $4,792 $126,377 $88,073 $139,681 $10,979 $238,733 1995 $37,955 $93,774 $6,034 $137,763 $83,832 $138,168 $12,267 $234,267 1996 $59,116 $103,862 . $7,907 5170,885 $122,213 5149,576 $15,313 5287,101 1997 $50,696 $106,232 $6,353 $163,280 $129,306 $164,654 $13,374 $307,334 1998 $90,418 $117,966 $15,048 $223,432 $195,751 $197,189 $30,420 $423,360 1999 $132,844 $131,921 $8,750 $273,515 $268,149 $244,858 $26,065 $539,072 CAAGR 1992-97 4.4% 7.4% 2.9% 6.2% 8.7% 6.6% 6.2% 7.4% 1997-99 61.9% 11.4% 17.4% 29.4% 44.0% 21.9% 39.6% 32.4% Source: Yakima Center Management Report (monthly) CAAGR = Compound Average Annual Growth Rate JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors Page IV -9 Operating Expenses The direct operating expenses of the convention center are referred to as Unit 325 expenses. Management fees comprise over half of these expenses. Other line items include office supplies, postage and telephone charges, utilities, and payment for contracted city services. Net Operating Income/Loss The difference between operating revenue and operating expenses (Unit 325) is the net operating income of the convention center. As is typical for a public convention facility, the center has recorded an operating loss in each of the years surveyed. On the average, Unit 325 expenses have exceeded fee and commission revenue by approximately $100,000 per year. This loss has been covered through the use of lodging tax receipts rebated from the state, and passed through the city to the convention center. Lodging Tax Receipts The State of Washington imposes a sales tax on all retail purchases, including most transient lodging. A portion of this tax, calculated at 1.98 percent of taxable revenue, is rebated to the local jurisdiction to fund tourism promotion and related projects. The basic tax rebate has been allocated by the city to three accounts: Fund 170 (convention center and convention bureau operations), Fund 370 (convention center capital costs), and Fund 171 (the Capitol Theater). The allocations to the capital improvement account and the Capitol Theater are predetermined and relatively small. The residual, roughly 75 percent of the total, is allocated to the convention center operating account. This amount has increased nearly every year, from $150,000 in 1992 to $291,000 in 1999. In addition to the statewide lodging tax, cities and counties have the option of imposing a supplemental lodging tax for facility development. In January 1996, the City of Yakima initiated a supplemental tax of 3.0 percent to fund the 1997 expansion of the convention center. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -10 Hospitality Investment Advisors YVVCB Expenses The operating statements of the convention center also include a separate category of expenses, Unit 324. These are the costs associated with the operation of the Yakima Valley Visitors and Convention Bureau, including professional services, consultation, marketing, and (beginning in the year 2000) funding of the Sports Commission. Surplus/Deficit The surplus or deficit reported for Fund 170 is the difference between total revenue (operating revenue plus the allocation of lodging tax receipts) and total operating expenses (Units 324 and 325). Since 1994, the operation of the center has generated an annual surplus; that is, the revenue generated through center operations, combined with the allocation of lodging tax receipts, has exceeded the combined operating costs of both the convention center and the bureau. Over the past four years, this surplus has averaged about $26,000. For the year 2000, management is projecting an overall deficit of $74,225. However, this is also the first year in which the Sports Commission is to receive funding through Unit 324. In the absence of this line item ($75,000), the overall operation of the center would be expected to break even. The historical revenue, expenses, net operating income/loss, and overall surplus/deficit of the convention center is summarized in Table 4.5. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -11 Hospitality Investment Advisors 11111 11111 r ■■N 1 NB N 1 MI M NM EN r MI MI 1 11111 SZ1-oo#VNf Table 4.5 YCC Operating Income Operating Lodging Tax Total Unit 325 Unit 324 Surplus/ Ratio To Net Operating Ratio To Revenue Receipts/Other Revenue Expenses Expenses Deficit (A) Total Rev Income (B) Op Rev 1992 $219,068 $175,000 $394,068 $322,490 $102,736 -$31,158 -7.9% -$103,422 -47.2% 1993 $229,802 $224,783 $454,585 $356,282 $114,542 -$16,239 -3.6% -$126,480 -55.0% 1994 $241,949 $222,214 $464,163 $359,242 $91,609 $13,312 2.9% ' -$117,293 -48.5% 1995 $238,141 $226,412 $464,553 $251,319 $91,581 $121,653 26.2% -$13,178 -5.5% 1996 $291,692 $217,251 $508,943 $397,979 $101,500 $9,464 1.9% -$106,287 -36.4% 1997 $311,218 $278,788 $590,006 $432,983 $121,477 $35,546 6.0% -$121,765 -39.1% 1998 $427,278 $292,639 $719,917 $534,722 $166,519 $18,676 2.6% -$107,444 -25.1% 1999 $545,930 $290,536 $836,466 $634,775 $162,875 $38,816 4.6% -$88,845 -16.3% 2000 (est) $524,200 $331,000 $855,200 $652,425 $277,000 C -$74,225 -8.7% -$128,225 -24.5% 2001 (est) $535,200 $350,000 $885,200 $672,028 $277,000 -$63,828 -7.2% -$136,828 -25.6% CAAGR 1992-1997 7.3% 9.8% 8.4% 6.1% 3.4% 1997-1999 32.4% 2.1% 19.1% 21.1% 15.8% 1999-2001 -1.0% 9.8% 2.9% 2.9% 30.4% Note A: Surplus/Deficit is Total Revenue Tess Total Expenses (Units 324 and 325). Note B: Net Operating Income is Operating Revenue less Operating Expenses (Unit 325). Note C: Increase reflects $75,000 for new expense item (Sports Commission). CAAGR = Compound Average Annual Growth Rate Source: Yakima Center Operating Statement Forecast Variance In 1994, during the planning for the first phase of convention center expansion, city and center officials prepared a forecast of revenue and expenses for the year 1998. In this forecast, the expanded convention center was projected to generate operating revenue of about $307,000 and direct operating expenses of $570,000. The operating deficit for that year was projected at just under $263,000. Receipts from the lodging tax were projected at about $278,000, barely enough to cover the operating deficit. The gross deficit, after deducting the operating expenses of the visitor and convention bureau, was projected at $107,000. The actual results achieved in 1998 far exceeded the projection in terms of both revenue and net operating income. Operating revenue was significantly above the projection, at over $427,000. In contrast, the direct operating expenses of the convention center were below the projected level, at just under $535,000. As a result, the 1998 operating deficit was only $107,000. With lodging tax receipts of nearly $300,000, the convention center was able to fund both its own expenses and the bureau costs, ending the year with a modest gross surplus of $19,000. The forecast developed in 1994 was reasonably accurate as concerned operating expenses and lodging tax receipts. However, it proved conservative with respect to the projection of operating revenue, due to the very substantial growth in meeting room rental fees and catering commissions. Adjusted for inflation, the cumulative increase in operating revenue between 1993 and 1998 was 64 percent, very nearly proportional to the increase in available meeting space. SUMMARY The performance of the Yakima Convention Center, as measured by both volume and revenue, increased dramatically following the 1997 expansion. Based on a comparison of the 1999 results with the performance recorded in the years prior to the expansion, usage of the convention center grew nearly in proportion to the increase in meeting space. This outcome indicates that a large volume of unsatisfied demand was present in the regional convention and event market, and that the increased capacity of the Yakima Convention Center allowed that facility to capture a significant share of the additional demand. JKA#00- 125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IV -13 Hospitality Investment Advisors SECTION V YAKIMA LODGING MARKET SECTION V YAKIMA LODGING MARKET MARKET SUPPLY The Yakima lodging market consists of 24 hotels and motels, providing a total of 1,940 guestrooms. We have analyzed this market in three tiers, based on the degree of involvement with and reliance on the convention center. Primary Tier The primary lodging tier consists of hotels that are reasonably convenient to the convention center, provide complete food and beverage service, and have a significant volume of in-house meeting space. Three properties are found to meet these criteria. Together, these hotels have 534 guestrooms and over 27,000 square feet of meeting space. The WestCoast Yakima Center Hotel, previously operated as the Cavanaughs at Yakima Center, is located immediately west of the convention center. WestCoast Hospitality Corporation was formed in 1999 through the acquisition of WestCoast Hotels by Cavanaughs Hospitality Corporation. In 2000, essentially all of the Cavanaughs properties were reflagged to the WestCoast name. The hotel has 154 guestrooms, an in-house restaurant and lounge, and 11,393 square feet of meeting space. The WestCoast Gateway Hotel is located one block to the east of the convention center, across North Ninth Street. Previously operated as a Holiday Inn, the hotel was acquired by Cavanaughs Hospitality and operated for several years as the Cavanaughs Gateway Hotel. It was reflagged as a WestCoast hotel in 2000. Facilities include 172 guestrooms, a restaurant and lounge, a swimming pool, and 8,550 square feet of meeting space. The 208 -room Doubletree Inn is located on North First Street, about one and one-half miles from the convention center. The hotel has full food and beverage facilities and 7,448 square feet of meeting space. This property was originally was developed and operated as a Red Lion Hotel. The Red Lion JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-1 Hospitality Investment Advisors chain was purchased by Doubletree Hotels, which itself was subsequently acquired by Promus Corporation; during this period, the hotel was reflagged to the Doubletree moniker. The Doubletree chain is now part of Hilton Hotels. Secondary Tier The secondary tier includes hotels which lack the extensive in-house facilities of the primary tier, but which, due to convenient location or good quality, nonetheless participate in housing a significant volume of convention and group demand. This tier has five properties and 423 guestrooms. The nearest of these hotels to the convention center is the Holiday Inn Express. This 87 -room property opened in 1998 on a site adjacent to the WestCoast Gateway, about one block from the convention center. Although this property does not offer significant meeting space, it does have a breakfast area, interior corridors, and an indoor swimming pool. The Oxford Suites and Oxford Inn are adjoining hotels located just east of the I-82/Yakima Avenue interchange. Owned by the Oregon -based Baney Corporation, these two hotels target commercial and leisure demand, with only incidental participation in the group market. The high-quality units at the Oxford Suites have proven especially attractive to midscale and upscale business travelers. The 74 -room Best Western Peppertree Inn also opened in 1995. This limited -service property is located near the Doubletree Hotel, and offers good quality guestrooms at modest prices. Although it does not capture a high volume of group demand, this property is assigned to the secondary tier due to its good quality and strong affiliation. The Comfort Suites is a 59 -room hotel located about three miles from the convention center, at the Fruitvale Boulevard interchange of Highway 12. Due to its distance from the convention center and the other hotels, this property generally is the last to receive overflow group business, and more often serves as a referral property for commercial and leisure travelers displaced from the downtown core. It is included in the secondary tier due to its very good quality. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-2 Hospitality Investment Advisors Tertiary Tier The third tier of lodging includes the remaining properties in the Yakima market. Most of these hotels and motels are located along North First Street (near the Doubletree Inn) and in the south Yakima community of Union Gap. Due to the various differences in location, facilities, and overall quality, these generally participate only in the largest citywide events. If all of the available hotels are included regardless of quality, this tier provides an additional 983 guestrooms. Summary Table 5.1 presents a profile of the primary and secondary tiers of the Yakima lodging market. It should be noted that the room rates shown in the table are published rates; the actual average daily room rates achieved by these properties generally are somewhat lower, due to discounting. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-3 Hospitality Investment Advisors Table 5.1 Lodging Market Profile Primary Tier Doubletree Hotel 1507 North First Street WestCoast Yakima Center 607 East Yakima Avenue WestCoast Gateway 9 North Ninth Street Secondary Tier Oxford Inn 1603 Terrace Heights Drive Oxford Suites 1701 Terrace Heights Drive Best Western Peppertree 1614 North First Street Comfort Suites 3702 Fruitvale Boulevard Holiday Inn Express 1001 East A Street Amenities Key: Year Guest Room Rates Meeting Space/ Services/ AAA Opened Rooms (Peak/Off) Largest Room Amenities Rating 1967 208 859 859 1968 154 $72-$91 $72-$91 1969 172 $72-$91 $72-$91 1985 96 $61-865 $61-$65 1995 107 $75-$105 $75-$105 1995 74 $65-$125 $65-$125 1998 59 $94-$104 $89-$94 1998 87 $74-$98 $74-$98 A = Restaurant/Lounge B = Meeting Rooms C = Refrigerator/Microwave Sources: Hotel Management, AAA Tour Book, JK&A 7,448 sf 5,148 sf 11,393 sf 3,885 sf 8,550 sf 3,402 sf None One Room One Room One Room One Room D = Data Ports E = Fitness Center F = Swimming Pool ABCDEF 00 ABCDF 000 ABCDF 000 CEF 000 BCDEF 000 BCDEF 000 BCDEF 000 BCDEF 000 JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-4 Hospitality Investment Advisors MARKET DEMAND Our analysis of market demand incorporates the historical performance of Yakima hotels as reported by management. Our focus was on the primary and secondary lodging tiers. We gathered annual results from 1995 (or the date of opening) through 1999 for each of the competitive properties. We also estimated 2000 performance, based on partial -year results. Data concerning the operating performance of these hotels was obtained on a confidential basis. Consequently, we do not present individual property results within this report. Instead, this data is grouped in the form of market averages. Current Market Performance During 1999, we estimate that the hotels in the primary and secondary tiers attracted a total of 218,700 occupied room nights, for a market occupancy rate of 62.6 percent. The average daily room rate during that year is estimated at $63.30. Based on partial -year results and hotel management expectations, we estimate a market occupancy rate of 64.4 percent for the year 2000, with a market average room rate of $64.80. By way of comparison, a regional lodging industry survey (Trends in the Hotel Industry, Pacific Northwest Edition, published by Wolfgang Rood Hospitality Consulting and PKF Consulting) reported an average occupancy rate of 56.9 percent and an average daily room rate of $58.02 for the Central Washington region during 1999. Within the overall market, there was wide variation in the performance of individual properties. Annual rates of room occupancy ranged from just over 50 percent to r.Early 80 percent. The current average daily room rates have a narrower range, from about $60 to just over $70. Segmentation For purposes of this study, demand for lodging is analyzed in three segments: commercial, leisure, and group. The following table summarizes our estimates of market segmentation during 1999. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-5 Hospitality Investment Advisors 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 5.2 Market Segmentation Occupied Market Segment Room Nights Mix Commercial 92,500 42% Leisure 57,200 26% Group 69,000 32% Total 218,700 100% The commercial demand segment is composed primarily of visiting executives, sales representatives, and other professionals conducting business with local companies. This demand typically occurs weekdays, usually peaking mid -week. Commercial travelers are an important source of business for the larger hotels, and are the dominant segment within the secondary tier. In 1999, commercial demand accounted for approximately 92,500 occupied room nights, or 42 percent of the overall market total. Leisure demand consists of individuals and families visiting the Yakima area or traveling through the area on their way to another destination. In the past, Yakima was not generally thought of as a tourist destination, but rather as a convenient stopover point for highway travelers. However, the enhanced marketing of the area by the Yakima Valley Visitor and Convention Bureau, and in particular the growing appeal of the region's wineries, has provided a boost in this segment. During 1999, leisure demand accounted for approximately 57,200 occupied room nights, or 26 percent of total demand. Group demand is composed of room blocks for delegates attending conventions; commercial guests who meet as a group to attend business meetings, conferences, or seminars; and guests participating in social or religious activities and general educational events. Approximately 69,000 rooms were occupied in the group segment in 1999, accounting for 32 percent of total demand. As a test of these estimates, we compared our figures to the estimates of group room nights prepared by the Yakima Valley Visitors and Convention Bureau. The YVVCB figures are intended to be JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-6 Hospitality Investment Advisors citywide, and to encompass both convention center events and group activities held at individual hotels. For 1999, the bureau estimated that group events generated 56,440 room nights. The difference between this figure and the aggregate estimate of the hotel managers likely is due to differing definitions of group events, and to incomplete reporting of some smaller functions. Seasonality Demand for lodging in Yakima is distinctly seasonal. As in many parts of the state, the volume of tourism and travel during the summer is quite high. However, the Yakima lodging market also benefits from strong shoulder seasons, due to a combination of convention activity, high school and college sports competition, and special weekend events. This strong shoulder season allows the local lodging market to achieve an annual occupancy rate above the rates reported in markets that are more heavily dependent upon summer tourism. From December through early February, the sporadic closure of the mountain passes tends to discourage both individual travel and the scheduling of group events, and hotel occupancy rates are quite low. The pattern in average daily room rates is similar to that of room occupancy, with the highest rates achieved during the summer. This is because fewer discounts are offered, and more rooms are occupied by two or more guests. Also, annual rack rate adjustments typically are implemented in advance of the summer season. The seasonality of the market is demonstrated in the monthly reports of lodging tax receipts. Table 5.3 shows the receipts generated by hotels within the Yakima city limits. Table 5.4 shows the total receipts generated in Yakima County. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-7 Hospitality Investment Advisors - M S I N r MB EN N N 1 an EN MN 11111 11111 M MB III sz I oo#d}Ir Table 5.3 City of Yakima Hotel/Motel Taxes January February March Quarter 1 1995 1996 1997 1998 1999 SMR CAAGR $9,126 $11,975 $33,147 $15,136 $17,248 $23,309 $17,812 $16,774 $21,576 $14,038 $14,170 $21,209 $15,553 $25,543 $35,794 $54,248 $55,693 $56,162 $60,790 $65,518 18% 4.8% April $25,017 $25,702 $26,144 $25,028 $29,996 May $30,900 $31,317 $33,049 $32,445 $27,112 June $32,527 $36,307 $27,792 $28,303 $40,154 Quarter II $88,444 $93,326 $86,985 $85,776 $97,262 28% 2.4% July $27,780 $30,360 $43,568 $23,429 $43,339 August $39,748 $34,154 $36,534 $47,878 $26,386 September $37,422 $32,938 $33,003 $32,163 $33,623 Quarter III $104,950 $97,451 $113,105 $103,471 $103,349 33% -0.4% October $27,405 $31,827 $29,347 $30,977 $33,897 November $18,881 $17,039 $18,835 $19,121 $23,278 December $13,203 $15,514 $13,558 $12,997 $17,138 Quarter IV $59,490 $64,380 $61,739 $63,095 $74,313 20% 5.7% Annual Tax Receipts $307,132 $310,850 $317,991 $313,133 $340,441 100% 2.6% Taxable Room Revenue $15,511,703 $15,699,483 $16,060,160 $15,814,786 $17,193,999 Percent Change - 1.2% 2.3% -1.5% 8.7% Note: Taxes are calculated at 1.98 percent of taxable room revenue (excluding monthly and other tax-exempt rentals) Tax receipts are shown for the months accrued; actual payment of rebate is lagged two months. Table does not include receipts from 3% supplemental lodging tax imposed from January 1996 forward. Source: Washington State Department of Revenue SMR = Seasonal mix of receipts for five-year period CAAGR = Compound Average Annual Growth Rate I I 1 M NE MN 1 NM E ! -- - - -- 1 N EN CZ l oo#Vxr so Table 5.4 Yakima County Hotel/Motel Taxes 1995 1996 1997 1998 1999 SMR CAAGR January $24,114 $37,114 $41,229 $35,044 $37,736 February $28,473 $40,836 $41,283 $49,589 $34,352 March $73,388 $60,227 $49,802 $58,899 $82,164 QuarterI $125,975 $138,176 $132,314 $143,531 $154,253 18% 5.2% April $63,106 $61,240 $62,596 $60,397 $66,583 May $74,898 $71,233 $75,012 $73,992 $60,666 June $78,636 $86,163 $66,314 $67,075 $93,039 Quarter II $216,640 $218,636 $203,922 $201,464 $220,287 28% 0.4% July $69,623 $72,437 $100,225 $57,458 $95,617 August $94,806 $83,607 $85,907 $103,923 $72,798 September $87,822 $78,678 $77,431 $82,299 $77,229 Quarter III $252,251 $234,722 $263,563 $243,681 $245,645 33% -0.7% October $64,487 $74,349 $72,057 $71,634 $81,355 November $44,782 $40,819 $42,492 $43,099 $54,696 December $31,952 $37,443 $33,433 $33,994 $41,889 Quarter IV $141,222 $152,610 $147,982 $148,727 $177,941 20% 5.9% Annual $736,087 $744,145 $747,781 $737,403 $798,126 100% 2.0% Taxable Room Revenue $37,176,107 $37,583,075 $37,766,724 $37,242,585 $40,309,376 Percent Change 1.1% 0.5% -1.4% 8.2% Note: Taxes are calculated at 1.98 percent of taxable room revenue (excluding monthly and other tax-exempt rentals) Tax receipts are shown for the months accrued; actual payment of rebate is lagged two months. Source: Washington State Department of Revenue SMR = Seasonal mix of receipts for five-year period CAAGR = Compound Average Annual Growth Rate Historical Growth In Market Demand Between 1995 and 1999, the annual volume of occupied room nights increased from 175,700 to 218,700. For the current year, a further increase to 225,000 room nights is anticipated. The cumulative increase between 1995 and 2000 is estimated at 28 percent; the compound average annual rate of growth during the period is estimated at 5.1 percent. This increase in demand can be traced to two sources. The first source was the underlying growth brought about by increases in population, employment, disposable income, and general economic activity. Based on our analysis of demographic and economic indicators, we estimate the historical underlying rate of growth in lodging demand at two percent. The second source was the opening of new hotel rooms, each of which added to the capacity of the market and allowed for the accommodation of demand that might otherwise have been turned away. If market demand had simply increased from the 1995 level at a two percent underlying rate, the expected level of demand in 2000 would have been about 194,000 occupied room nights. In fact, we have estimated 2000 demand at 225,000 room nights, indicating a surplus of 31,000 room nights. In our opinion, this surplus demand is attributable to the opening of new hotels. Over the five-year interval, the average daily room supply increased by 240 guestrooms. The indicated volume of induced demand was about 129 occupied room nights for each new room opened. Market Room Rates The current average daily room rate in Yakima is about $65 for both the primary and secondary tiers. The three convention hotels in Yakima each were built during the late 1960s, and each is somewhat dated in appearance. Periodic renovation of these hotels, including cosmetic work presently in progress at the WestCoast Gateway, has been unable to fully offset the impact of advancing age. Between 1995 and 2000, the average price of a guestroom in the overall market increased from $59.10 to $64.80, for a compound average annual increase of 1.9 percent, near the overall rate of inflation. With relatively low rates of room occupancy and a heavy reliance on rate -sensitive group demand, there has been little opportunity to achieve significant real growth in room prices. JKA#00- 125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-10 Hospitality Investment Advisors IIIII S— — I r M M M I— N S— — M M I I SZ 1-00#exr Table 5.5 Lodging Market Performance 1995 1996 1997 1998 1999 2000 CAAGR Average Daily Room Supply 717 811 811 880 957 957 Available Room Nights 261,900 296,000 296.000 321,200 349.300 • 349,300 5.9% Occupied Room Nights 175,700 185,900 195,600 191,000 218,700 225.000 5.1% Market Occupancy 67.1% 62.8% 66.1% 59.5% 62.6% 64.4% Market Average Room Rate $59.10 $60.40 $62.10 $62.30 $63.30 $64.80 1.9% Market Daily REVPAR $39.60 $37.90 $41.00 $37.00 $39.60 $41.70 1.0% Annual Room Revenue $10,384,000 $11,228,000 $12,147,000 $11,899,000 $13,844,000 $14,580,000 7.0% CAAGR = Compound Average Annual Growth Rate, 1995-2000 Source: Jinneman, Kennedy, & Associates, P.S. SUMMARY The Yakima lodging market has experienced growth in both supply and demand over the past five years. The addition of 240 new rooms allowed the market to accommodate a significant volume of new demand. Much of this demand was in the group segment, and was due in large part to the expansion and increased volume of use at the convention center. Despite the growth in annual occupied room nights, the overall rate of room occupancy in the primary and secondary lodging tiers experienced only moderate fluctuation. This result is a reflection of the seasonality of the market, particularly within the group and leisure segments. As discussed in Section IV, the expansion of the convention center attracted a greater number of conventions and other events. However, most these events appear to have been concentrated during the spring and fall periods, when the major convention hotels were already hosting a significant volume of group functions. Much of the additional demand was accommodated by the additional capacity available at the new hotels. Similarly, the recent emphasis on tourism to Yakima -area wineries and other attractions draws tourists during what are already peak travel periods. Again, the market could accommodate most of this new demand only by building new rooms. There are two principal implications that may be drawn from this analysis. First, with or without a further expansion of the convention center, local hotels are unlikely to achieve a market occupancy rate that is materially above the historical range. Second, the fact that the market occupancy rate is relatively low on an annual basis does not preclude the possibility that additional unsatisfied demand exists during peak seasons. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page V-12 Hospitality Investment Advisors SECTION VI COMPARABLE MARKETS SECTION VI COMPARABLE MARKETS SELECTION CRITERIA We identified three market areas that are reasonably comparable to Yakima in terms of geographic location and accessibility, the type and volume of meeting space, the quality and capacity of local hotels, and urban amenities. Each of these markets contains one or more facilities that compete directly with the Yakima Convention Center. The focus of our market analysis is Eastern Washington, for two reasons. First, highway transportation among the various communities in the eastern part of the state is relatively direct, minimizing the perceived locational differences. By contrast, transportation between east and west, across the Cascade Range, may be problematic during the winter, and the risk of road closures, however small, may discourage some groups. Second, many state agencies and statewide associations prefer to rotate their events between east and west, or (less frequently) among east, west, and central locations within the state. This means that, while the Yakima Convention Center may be physically similar to certain convention facilities in western Washington, most of the competition for specific events takes place in the eastern part of the state. Within the target region, we identified three communities that have both significant meeting facilities and an adequate supply of lodging. These include Wenatchee, the Tri -Cities (Kennewick, Richland, Pasco), and Spokane. Each of the selected communities has a unique collection of urban amenities, such as shopping centers, recreational facilities, and cultural offerings. We have chosen not to further narrow the competitive market on the basis of differences in amenities. However, we have considered the impact of available amenities on the competitive position of each location within the overall market. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -1 Hospitality Investment Advisors Our analysis excludes the smaller conference facilities in resort locations, such as Skamania Lodge (Stevenson), Sleeping Lady (Leavenworth), and Campbell's Lodge (Chelan). Groups that select these facilities often are influenced as much by the resort setting as the facilities themselves, so that urban convention cities such as Yakima are at a significant competitive disadvantage in capturing this demand. WENATCHEE Location The city of Wenatchee is located 108 highway miles north of Yakima, at the confluence of the Columbia and Wenatchee Rivers. Wenatchee is on the west side of the Columbia River; East Wenatchee, a separately incorporated suburban community, is located on the east side of the river. The principal surface arterial through the city is Wenatchee Avenue (State Route 285), which parallels the river. Wenatchee has a population of just over 20,000. Convention Facilities Wenatchee Center is a publicly -owned convention facility located just east of Wenatchee Avenue in the city's downtown core. The center opened in 1980, and was expanded in 1997. The first phase of the development included a 10,000 square foot main ballroom, several breakout rooms, and about 6,000 square feet of exhibit space. In the 1997 expansion, the original exhibit area was converted to meeting and prefunction space, and a new exhibit hall with 7,560 square feet of space was constructed. The center now has combined meeting and exhibit space of nearly 25,000 square feet. In September 2000, a new performing arts center opened on a site adjoining the convention center. The new facility consists of a 500 -seat theater, a fully equipped stage, backstage and support areas, and a large lobby. The theater lobby has an indoor connection directly into the prefunction space outside the convention center ballroom. It is anticipated that the new theater will be used occasionally for the plenary sessions of large conventions. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -2 Hospitality Investment Advisors Lodging The Wenatchee Center Hotel (now the WestCoast Wenatchee Center) opened in 1985. It is located adjacent to the convention center, and is linked directly to the upper level of the center by an elevated pedestrian walkway. The hotel has 147 guestrooms, a restaurant and lounge, and two breakout rooms, but relies almost entirely upon the convention center to house meetings and other group functions. The hotel operates the convention center as a contracted agent of the City of Wenatchee, and pays commissions to the city based on the volume of revenue generated from meeting room rent and catering fees. The Red Lion Hotel opened in the 1970s, and for many years was the dominant lodging property in Wenatchee. With 149 guestrooms and nearly 9,000 square feet of meeting space, this full-service hotel accommodated most of the local demand for meetings and banquets. With the development of the convention center and the adjoining hotel, the role of the Red Lion in hosting conventions and other large groups was somewhat reduced. The property continues to attract a significant volume of in-house group business, and is the primary overflow hotel for citywide conventions. The secondary tier of lodging in Wenatchee consists of several limited service hotels situated in the blocks between the Red Lion Inn and Wenatchee Center, most of which are affiliates of regional or national lodging- chains, as well as two independent properties in East Wenatchee. Other available lodging includes about 300 guestrooms in several small, independent motels along Wenatchee Avenue. Overflow lodging also is available in the communities of Leavenworth (20 miles to the west) and Chelan (40 miles to the north). Each of these cities draws a significant volume of tourism, and has a mix of small hotels, motels, and bed -and -breakfast inns. Urban Amenities Principal amenities in Wenatchee include the new performing arts center, downtown shops, parks and activities along the riverfront, and occasional citywide events, such as the annual Apple Blossom Festival. The city is also reasonably convenient to the shops and restaurants in Leavenworth, recreational opportunities at Lake Chelan, golfing at Desert Canyon, and skiing at Mission Ridge. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -3 Hospitality Investment Advisors TRI -CITIES Location The Tri -Cities area is located in southcentral Washington, at the confluence of the Columbia, Snake, and Yakima Rivers, 90 miles southeast of Yakima via Interstate 82. The area consists of the communities of Kennewick and Richland (in Benton County) and Pasco (in Franklin County). The combined population of the three cities is approximately 100,000. Convention Facilities The Tri -Cities does not presently have a freestanding convention center in the traditional sense. The only facility that comes close is the Trade, Recreation, and Agricultural Center (TRAC), located along Interstate Highway 182 in Pasco. The TRAC consists of an exhibit hall and an arena, linked by a central lobby and prefunction area. The exhibit hall has a floor area of 38,184 square feet, a 39 -foot maximum ceiling height, and a concrete floor. The room has no folding partitions and is not divisible into smaller units. According to management, the principal uses of the hall are for exhibits, banquets, dances, and receptions. The hall can accommodate over 200 exhibit booths, and has a banquet capacity of over 2,000. The arena has a -39,200 square foot dirt floor surrounded by bleacher seating. This area is used for events such as rodeo competition, horse shows, and livestock auctions. Three breakout rooms are located in the central portion of the TRAC, opening to the lobby. These rooms have floor areas of 713, 1,960, and 2,516 square feet; the largest can accommodate a banquet of 140 or a meeting of over 200. The lobby and prefunction areas also are used occasionally for small banquets or receptions. Lodging The dominant convention hotel in the Tri -Cities is the Doubletree Hotel in Pasco. This property has 279 guestrooms, full food and beverage service, and over 17,000 square feet of meeting space, including a 12,800 square foot main ballroom. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -4 Hospitality Investment Advisors The other significant convention hotel in the area is the WestCoast Tri -Cities Hotel in Kennewick. Although much smaller than the Doubletree, with 161 guestrooms and less than 10,000 square feet of meeting space, the WestCoast property is an effective competitor for small to mid-size events, and is the primary overflow property for large conventions. The secondary tier of lodging includes two full-service hotels in Richland (the Shilo Inn and the Red Lion Hotel), as well as a number of chain -affiliated limited -service hotels. The two Richland properties tend to rely more heavily on commercial and government demand, and less on convention activity. The limited -service hotels, such as the Sleep Inn in Pasco, the Hampton Inn in Richland, and the Silver Cloud Inn, Comfort Inn, and Fairfield Inn in Kennewick, receive overflow from the larger convention properties. Peripheral or tertiary lodging includes a number of motels in the outlying sections of Kennewick and Pasco, and properties in the nearby communities of the eastern Yakima Valley. Urban Amenities Each of the three communities offers its own distinct mix of urban amenities. Richland is best known as the site of the Hanford Works, a government complex that encompasses 400 square miles north of the city. Kennewick has the largest concentration of retail activity in the area, the Coliseum (a multipurpose arena that is home to the local hockey team), and a nine -acre amusement park. In addition to the TRAC, Pasco has an extensive soccer facility and a large wildlife refuge. Proposed Convention Center For many years, efforts have been underway to develop a public convention center in the Tri -Cities. A feasibility study completed in 1996 discussed development of a facility with a main ballroom of 20,000 to 25,000 square feet, 10,000 square feet of breakout space, and a 600 -seat theater. Several possible locations have been considered for such a development, including two sites in Kennewick (one adjacent to the Coliseum, the other next to the WestCoast Tri -Cities Hotel), a site in Richland (near the Shilo Inn), and a site in Pasco (near the TRAC). To date, the inability of the three cities to reach agreement on a location has stalled efforts to secure public funding. Reportedly, the Kennewick city council is preparing to take up the issue again. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -5 Hospitality Investment Advisors SPOKANE Location Spokane is the largest city in eastern Washington, and the economic hub for much of eastern Washington and Northern Idaho. It is located 200 miles northeast of Yakima via Interstate Highways 82 and 90. The city population is about 190,000; the population of Spokane County is over 400,000. Convention Facilities The public convention facilities in Spokane are contained within a multi -use complex known as Spokane Center, an umbrella agency for four separate entities: the Spokane Convention Center, the International Agricultural Trade Center, the Spokane Opera House, and Joe Albi Stadium. The Convention Center, Opera House, and Ag Center are adjoining structures located in downtown Spokane, on the south shore of the Spokane River. Joe Albi Stadium, a soccer and football stadium built in the 1950s, is located about seven miles northwest of the downtown core. The Convention Center was built as part of Expo '74, the Spokane World's Fair. Despite its name, this structure is actually a large exhibit hall, divisible into four sections. The main hall has a total area of nearly 39,000 square feet, with perimeter prefunction space, administrative offices, a full kitchen, and a loading dock. Floors are bare concrete. The Opera House also was developed during Expo '74. This first class performance hall seats 2,700, and has a stage suitable for concerts, dance, and theatrical productions. The Trade Center, opened in 1989, is a carpeted ballroom, also divisible into four sections. This structure adjoins the Convention Center; the two share a common kitchen and some prefunction space. The Trade Center has over a dozen breakout rooms with various possible combinations. There also is a 270 -seat conference theater equipped with extensive audiovisual capabilities. The roof of the theater serves as an outdoor patio accommodating 400 guests for parties, weddings, and receptions. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -6 Hospitality Investment Advisors Lodging The Spokane area includes 4,400 guestrooms in over 40 hotels, motels, and inns. The largest of these properties (the Doubletree Hotel and the WestCoast Grand) are located within walking distance of Spokane Center. If the other downtown hotels are included, there are over 2,000 guestrooms in the immediate vicinity of the convention center. The WestCoast Grand (formerly Cavanaughs Inn at the Park) is the largest hotel in Spokane. Located on the north side of the Spokane River, directly across from Spokane Center, the hotel is linked to the convention facilities by a series of paved paths and pedestrian bridges. The hotel has full food and beverage facilities and nearly 28,000 square feet of meeting and exhibit space. The Doubletree Hotel is a full-service property that offers 379 guestrooms, a restaurant and lounge, and over 15,000 square feet of meeting space. Although it is slightly smaller than the WestCoast Grand, the Doubletree serves as the headquarters hotel for many events, due to its location. The hotel adjoins the Spokane Center property, and is only a few steps from the east entrances to both the Ag Trade Center and the Convention Center. The reopening of the Davenport Hotel will substantially increase the lodging and meeting capacity of the Spokane market. This hotel, originally developed between 1890 and 1914, already has undergone significant renovation of meeting rooms; completion of the entire project is planned for late 2001. The renovated hotel will have 395 guestrooms, 29,400 square feet of meeting space, three food and beverage outlets, a health club, and retail space. Although it is located several blocks from the Spokane Center, this hotel is expected to compete in the primary lodging tier on the basis of its high quality and extensive meeting facilities. The secondary lodging tier includes the other hotels in downtown Spokane, such as the WestCoast Ridpath Hotel, the WestCoast River Inn, and the Courtyard. Peripheral lodging is available outside the downtown core, including hotels near the airport and along Interstate 90 in the Spokane Valley. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -7 Hospitality Investment Advisors Urban Amenities Spokane can offer a wide variety of amenities to attract conventions and other events. Major retail centers include River Park Square in downtown Spokane, Northtown Mall, and Spokane Valley Mall. Cultural offerings include the Spokane Symphony and various theaters. Recreational opportunities include sporting events at Joe Albi Stadium; sports, concerts, and other events at Spokane Arena; outdoor activities, and winter sports (at nearby Schweitzer Mountain). The 100 -acre Riverfront Park, one block west of Spokane Center, provides an exciting entertainment venue. Proposed Convention Center Expansion For several years, a committee of elected officials and business leaders has been studying a possible expansion of the convention center. Known as Facilities 2000, this working group initially was considering a site directly south of the existing center, across Spokane Falls Boulevard. However, the high asking price for the property and the additional expense for a pedestrian bridge boosted the estimated cost of the expansion to $85,000,000. The current tentative proposal is for an extension to the east, incorporating portions of the Doubletree Hotel parking lot and adjoining parcels. Funding for the project likely would involve a mix of public and private sources. In addition to the cost of the convention center itself (perhaps $65,000,000), the budget would include $20,000,000 for improvements to the fairgrounds and other facilities elsewhere in the county (a move intended to gain a wider base of public support), as well as an undetermined expense to construct a parking garage. The proposal for expansion to the south would have resulted in a facility with a 30,000 square foot ballroom, 38,000 square feet of breakout rooms, and 100,800 square feet of exhibit space. The gross area of the expanded convention facilities would have been 364,500 square feet. In addition, the proposal called for construction of a three-story, 800 -stall parking garage. The specifics of the proposed expansion to the east have yet to be determined. At a minimum, the addition is expected to increase the available exhibit space by at least 40,000 square feet. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -8 Hospitality Investment Advisors SUMMARY Yakima competes with three other communities in the regional convention market. In terms of location, both Yakima and Wenatchee are centrally positioned within the state and convenient to both the eastern and western regions. Spokane is geographically further from the Seattle area, but this locational disadvantage is offset by frequent and efficient air transportation, and by the city's extensive urban amenities. The overall volume of convention space in Yakima is nearly 50 percent greater than in Wenatchee, and the connectivity of the space in the Yakima Convention Center allows it to accommodate larger groups. The Tri -Cities has a larger overall volume of space than Yakima, but over half that city's capacity is contained within the TRAC exhibit hall, a facility with limited appeal for conventions. The total volume of meeting space in Spokane is comparable to Yakima; however, Spokane also has a large exhibit hall, 13 in-house breakout rooms, and a conference theater. The planned addition to the Spokane Convention Center, and the projected opening of a new convention center in Kennewick, will enhance the competitive position of those communities. In terms of lodging, the competitive position of Yakima is mixed. The primary tier can offer more guestrooms than either Wenatchee or the Tri -Cities, and two of the properties are within walking distance of the Yakima Convention Center. However, the three hotels in the primary tier are each over 30 years old and in only average condition. By comparison, the WestCoast hotels in Wenatchee and Spokane are less than 20 years old, and several of the competitive properties have been recently renovated. The following tables summarize the size and capacity of convention facilities in Eastern Washington. Table 6.1 compares the features of public facilities, including the Yakima Convention Center, Wenatchee Center, the Trade, Recreation, and Agricultural Center in Pasco, and the Convention Center and International Agricultural Trade Center in Spokane. Table 6.2 includes the primary convention hotels in each of the target markets. Table 6.3 shows the combined capacity of the convention centers and convention hotels. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -9 Hospitality Investment Advisors Table 6.1 Competitive Market Profile - Convention Centers Yakima Wenatchee Tri -Cities Spokane Development History Year Opened 1976 1980 1995 1974 Year Expanded 1997 1997 1989 Ballroom Subdivisions 8 2 4 Total Area 23,568 sf 10,080 sf 18,270 sf Largest Unit 5,850 sf 6,120 sf 4,990 sf Smallest Unit 1,080 sf 3,960 sf 4,370 sf Average Unit 2,946 sf 5,040 sf 4,568 sf Exhibit Hall Subdivisions 2 1 4 Total Area 7,560 sf 38,184 sf 38,722 sf Largest Unit 4,500 sf 10,504 sf Smallest Unit 3,060 sf 9,279 sf Average Unit 3,780 sf 38,184 sf 9,681 sf Breakout Rooms Number of Rooms 1 14 3 13 Total Area 459 sf 7,212 sf 5,189 sf 7,400 sf Largest Room 2,016 sf 2,516 sf 2,240 sf Smallest Room 364 sf 713 sf 550 sf Average Room 459 sf 515 sf 1,730 sf 569 sf Total Meeting & Exhibit Space 24,027 sf 24,852 sf 43,373 sf 64,392 sf Ballroom Capacity Banquet 1,600 800 1,500 Classroom 925 550 1,400 Theater 2,250 1,200 1,800 Reception 3,300 1,450 2,000 Exhibit Booths 157 65 113 Exhibit Hall Capacity Banquet 470 2,800 3,200 Classroom 350 2,000 Theater 800 3,700 3,200 Reception 800 3,700 5,000 Exhibit Booths 50 213 205 Theater Capacity (Dedicated) Performing Arts 500 - 2,700 Conference - 270 JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors Page VI -10 Ell 1E1 EN MIN IMO OM MIS 11111 11111 11111 11111 11111 11111 111E 11111 NEI MI Table 6.2 Competitive Market Profile - Primary Convention Hotels Gucstrooms Maximum Room Block Yakima Wenatchee Tri -Cities Spokane WC Center WC Gateway Douhletree WestCoast » Red Lion WestCoast Douhletree WestCoast Douhletree 154 172 208 147 149 161 279 402 125 140 150 140 140 125 200 325 379 275 Ballroom Subdivisions 3 4 3 - 3 6 4 6 5 Total Area 2,900 3,402 5,148 5,734 7,245 12,800 9,800 10,080 Largest Unit 1,300 1,080 1,716 3,186 2,346 3,200 3,600 3,384 Smallest Unit 570 575 1,716 1,176 528 3,200 649 1,104 Average Unit 967 851 1,716 1,911 1,208 3,200 1,633 2,016 Exhibit Hall Subdivisions Total Area - - 8,600 Largest Unit - - Smallest Unit - - Average Unit - - Breakout Rooms Number of Rooms 8 7 4 2 4 3 8 11 8 Total Area 8,493 5,148 2,300 800 3,255 2,415 4,440 9,316 5,187 Largest Room 2,160 2,560 1,000 400 1,767 2,415 1,800 4,143 3,360 Smallest Room 364 288 300 400 342 595 322 423 396 Average Room 1,062 735 575 400 814 805 555 847 648 Total Meeting & Exhibit Space 11,393 8,550 7,448 800 8,989 9,660 17,240 27,716 15,267 Ballroom Capacity Banquet 250 250 400 - 525 550 1,300 650 800 Classroom 150 150 300 - 300 400 700 600 675 Theater 350 350 600 620 1,000 1,500 1,300 1,200 Reception 650 750 2,100 1,500 1,800 Exhibit Booths - 60 - Exhibit Hall Capacity Banquet 600 Classroom - 400 Theater - 800 Reception 1,000 Exhibit Booths 55 Table 6.3 Competitive Market Profile - Combined Capacity Yakima Wenatchee Tri -Cities Spokane Guestrooms, Primary Hotels 534 296 440 781 Maximum Block, Primary Hotels 415 280 325 600 Total Guestrooms In Market 1,940 1,156 2,908 4,400 Meeting & Exhibit Space Ballrooms 35,018 sf 15,814 sf 20,045 sf 38,150 sf Exhibit Halls 7,560 sf 38,184 sf 47,322 sf Breakout Rooms 16,400 sf 11,267 sf 12,044 sf 21,903 sf Total 51,418 sf 34,641 sf 70,273 sf 107,375 sf Total Space Per Guestroom Primary Hotels 96 117 160 137 All Hotels 27 30 24 24 Largest Ballroom Subdivisions 8. 2 4 Total Area 23,568 sf 10,080 sf 18,270 sf Largest Unit 5,850 sf 6,120 sf 4,990 sf Smallest Unit 1,080 sf 3,960 sf 4,370 sf Average Unit 2,946 sf 5,040 sf 4,568 sf Largest Exhibit Hall Subdivisions - 2 1 4 Total Area 7,560 sf 38,184 sf 38,722 sf Largest Unit 4,500 sf 10,504 sf Smallest Unit - 3,060 sf 9,279 sf Average Unit 3,780 sf 38,184 sf 9,681 sf Breakout Rooms Number of Rooms 20 20 14 32 Total Area 16,400 sf 11,267 sf 12,044 sf 21,903 sf Average Size 820 sf 563 sf 860 sf 684 sf JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VI -12 Hospitality Investment Advisors SECTION VII MARKET DEMAND AND COMPETITIVE POSITION SECTION VII MARKET DEMAND AND COMPETITIVE POSITION METHODOLOGY In this section of the report, we estimate total demand for the competitive market, by aggregating the estimated performance of the convention centers and primary convention hotels in the four market areas. We then evaluate the competitive position of Yakima within this overall market through an analysis of fair share and market penetration. The lodging components of this analysis were relatively straightforward, as most hotels compile and report their operating results according to a uniform standard. However, measurement of the performance of the various convention facilities was complicated by differences in definitions, units of measure, and depth of detail. The performance of Wenatchee Center is presented in quarterly reports. These documents provide good detail on gross revenue and commissions, and include some figures on hotel occupancy. However, there is no reference to the number, duration, or attendance of conventions and other events. The manager of TRAC, the Tri -Cities exhibit hall, is not required to submit a detailed public annual report, and could provide only an approximation of usage and revenue, some of which is generated in the adjoining arena. The annual report of Spokane Center identifies the number and size of major conventions, but the remaining events at the Convention Center, Trade Center, and Opera House are reported solely in the aggregate. The Spokane report does provide a good breakdown of revenue and expenses. Based on the available market data, we have selected four measures by which to compare the performance of the several convention markets and derive aggregate estimates of market demand. These include the total revenue generated at each convention facility, the number of occupied room nights captured from the group segment by hotels in the primary lodging tier, the room revenue of the primary hotels, and the combined revenue of the convention centers and primary hotels. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VII -1 Hospitality Investment Advisors 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 REGIONAL MARKET DEMAND Fair Share Ratios The fair share ratio of each convention market is defined as its proportionate share of available capacity. The measure of capacity is the combined meeting and exhibit area of the public convention centers and the hotels in the primary lodging tier. The following table shows the calculation of these fair share ratios. Table 7.1 Fair Share Ratios Cony Ctr Hotel Total Fair Share Area Area Area Ratio Yakima 24,027 sf 27,391 sf 51,418 sf 19.5% Wenatchee 24,852 sf 9,789 sf 34,641 sf 13.1% Tri -Cities 43,373 sf 26,900 sf 70,273 sf 26.6% Spokane 64,392 sf 42,983 sf 107,375 sf 40.7% Total 156,644 sf 107,063 sf 263,707 sf 100.0% Primary Group Room Nights The first measure of market performance is the volume of room nights generated in the group segment. This analysis focuses on the primary lodging tier in each market. These are the hotels that capture the greatest share of convention center demand. They are also the properties with the largest volume of in-house space, allowing them to attract and house additional small and midsize groups. Table 7.2 combines the results reported by the management of the various hotels. To ensure the confidentiality of the data, individual property results are not disclosed. Table 7.2 Group Room Nights Group Market Fair Share Market Room Nights Share Ratio Penetration Yakima 48,900 22.7% 19.5% 117% Wenatchee 32,400 15.1% 13.1% 115% Tri -Cities 48,600 22.6% 26.6% 85% Spokane 85,200 39.6% 40.7% 97% Total 215,100 100.0% 100.0% 100% JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investment Advisors Page VII -2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Convention Center Revenue The second unit of measure is the gross revenue generated within each convention facility. This includes rent for meeting space, food and beverage sales, fees for equipment rental, and other miscellaneous charges. As is the case at the Yakima Convention Center, catering charges in the other public facilities frequently are credited against meeting room rental fees. For groups with substantial food and beverage requirements, the room charge may be eliminated entirely. In each of the four facilities, gross food and beverage sales represents the single largest source of revenue. Figures for Yakima and Spokane differ from those shown in management operating statements. In the original statements, food and beverage revenue reflects only the share paid to the public entity as a commission. In this analysis, we have used the gross revenue received by the concessionaires. Table 7.3 Convention Center Revenue Total Market Fair Share Market Revenue Share Ratio Penetration Yakima $1,893,000 34.0% 19.5% 174% Wenatchee $1,195,000 21.5% 13.1% 164% Tri -Cities $500,000 9.0% 26.6% 34% Spokane $1,979,000 35.5% 40.7% 87% Total $5,567,000 100.0% 100.0% 100% Primary Lodging Revenue The third measure of hotel performance is room revenue. This comparison is not limited to group and convention demand. However, it does provide a perspective for the overall health of the primary lodging tier. Table 7.4 Primary Lodging Revenue Room Market Fair Share Market Revenue Share Ratio Penetration Yakima $7,198,000 22.0% 19.5% 113% Wenatchee $4,454,000 13.6% 13.1% 104% Tri -Cities $7,288,000 22.3% 26.6% 84% Spokane $13,726,000 42.0% 40.7% 103% Total $32,666,000 100.0% 100.0% 100% JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Hospitality Investrnent Advisors Page VII -3 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Convention and Lodging Revenue This comparison combines the gross revenue generated at each convention center with the room revenue of the primary lodging tier. This analysis is especially helpful in understanding the Tri - Cities market, where most of the actual meeting business is handled by the two large hotels. Table 7.5 Convention And Lodging Revenue Combined Market Fair Share Market Revenue Share Ratio Penetration Yakima $9,091,000 23.8% 19.5% 122% Wenatchee $5,649,000 14.8% 13.1% 113% Tri -Cities $7,788,000 20.4% 26.6% 77% Spokane $15,705,000 41.1% 40.7% 101% Total $38,233,000 100.0% 100.0% 100% Historical Growth In Market Demand Over. the past five years, regional market demand has increased significantly. This growth stands in sharp contrast to the minimal growth reported for the nation as a whole, as discussed in Section II. The general health of the Washington economy and the recent expansion of meeting capacity in Yakima and Wenatchee are considered the primary reasons. We used two measures to track the growth in demand. The first is the volume of convention activity, measured in terms of either revenue or delegates, depending upon the availability of the data. Table 7.6 presents a summary of this historical growth. For Yakima, the table shows net convention center revenue after catering commissions. For Wenatchee, the measure is the total commissions paid to the city. For the Tri -Cities, the table shows the annual number of convention delegates, as estimated by the Tri -Cities Visitor and Convention Bureau. For Spokane, we track the combined net revenue of the Convention Center and the Ag Trade Center. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VII -4 Hospitality Investment Advisors 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 7.6 Growth In Market Demand Yakima Wenatchee Tri -Cities Spokane 1995 $234,267 $118,340 43,845 $898,677 1996 $287,101 $123,279 63,540 $964,473 1997 $307,334 $109,536 66,150 $1,075,823 1998 $423,360 $144,789 83,710 $997,734 1999 $539,072 $165,666 91,563 $1,016,975 CAAGR 23.2% 8.8% 20.2% 3.1% In Yakima, Wenatchee, and the Tri -Cities, each of which developed new convention facilities during the period surveyed, the average annual rate of growth ranged from 8.8 percent to over 20 percent, with much of the increases coming in the years immediately following the expansion. In Spokane, where no new facilities were built, growth averaged 3.1 percent. Considering the larger base of the Spokane area, the average annual rate of growth in convention activity for the Eastern Washington region as a whole probably was in the range of five to ten percent. The second measure is the volume of lodging tax receipts; this measure is considered only an indirect indication of convention activity, since it includes receipts generated by tourism and independent business travel. Table 7.7 summarizes the historical growth in receipts. Table 7.7 Growth In Lodging Tax Receipts Yakima Wenatchee Tri -Cities Spokane Total 1995 $307,132 $195,156 $498,976 $777,603 $1,778,867 1996 $310,850 $184,754 $485,582 $814,936 $1,796,122 1997 $317,991 $202,040 $471,394 $884,263 $1,875,688 1998 $313,133 $205,167 $502,674 $897,186 $1,918,160 1999 $340,441 $210,585 $502,844 $904,952 $1,958,822 CAAGR 2.6% 1.9% 0.2% 3.9% 2.4% Growth in convention sales clearly has outpaced the increase in lodging revenue. This result reflects the increasing importance of the convention segment within the overall market. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VII -5 Hospitality Investment Advisors COMPETITIVE POSITION Within the regional market, Yakima has been very successful in attracting and retaining convention demand. In terms of direct revenue, the Yakima Convention Center far outperforms the market, achieving a penetration ratio of 174 percent. Wenatchee Center performs at a similar level, penetrating at 164 percent. By contrast, in-house revenue is extremely low in the Tri -Cities, where the two primary hotels house most of the convention activity. Surprisingly, the revenue generated at the much larger Spokane Convention Center and Ag Trade Center was only slightly greater than that generated in Yakima. In terms of primary lodging revenue, Yakima also fares well, achieving penetration of 113 percent. By this second measure, Spokane and Wenatchee perform near the market average, while the Tri - Cities again trails the market. The spread of penetration rates in this category is relatively narrow, suggesting that differences in convention volume may be somewhat offset by room sales to other segments of lodging demand. For the combination of convention and lodging revenue, Yakima penetrates the market at 122 percent of its fair share, slightly ahead of Wenatchee. Again, Spokane captures its proportionate share of combined revenue, and the Tri -Cities market captures below its fair share. Yakima is also reasonably successful in its capture of group room nights. As this measure includes both convention center and hotel -based events, it is affected by the volume and mix of convention business at the primary hotels. Here, Wenatchee also emerges as a successful market, penetrating at 115 percent. This is due largely to the close relationship between the WestCoast Hotel and Wenatchee Center, as well as the significant group mix at the Red Lion Hotel. Yakima penetrates at 117 percent, Spokane at 97 percent, and the Tri -Cities at 85 percent. JKA#00- 125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VII -6 Hospitality Investment Advisors Several conclusions may be drawn from this analysis. • The facilities of the Yakima Convention Center are serving a volume of convention activity that exceeds the proportionate share of regional market supply. • The superior performance of Yakima may be attributed in part to its central location within the state and consequent accessibility to both the eastern and western regions. • The seasonality of the convention market has not prevented the convention center and primary hotels in Yakima from achieving penetration well in excess of fair share. • The relative position of Yakima has been enhanced by the historically low penetration of the Tri -Cities market, a direct result of the lack of a true convention facility in that community, and by the surprisingly weak performance of Spokane Center. • Yakima has not yet been successful in developing a supplemental base of lodging demand, such as tourism, that could support the secondary and tertiary properties and reduce the reliance on group functions. DEMAND SURVEY To better understand the reasons for the achieved rates of penetration, we surveyed approximately 50 state associations, agencies, and other groups. Some of these organizations have utilized the Yakima Convention Center in the past two years. A second sample included groups that had considered Yakima but ultimately selected another venue. The response rate to the survey was approximately 35 percent. Past Business Among the ten respondents that had utilized the Yakima Convention Center, the general attitude toward the convention center itself was quite positive, with several comments lauding the facility. Other positive features cited in the survey included the central location of Yakima within the state, the relatively low room prices, and the friendliness of the convention center staff. Negative comments focused on external issues, including the limited air service to Yakima and a lack of cultural or recreational activities. One respondent was quite outspoken concerning one of the hotels in the primary lodging tier: they stated that they "had a bad experience" with the hotel, and JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VII -7 Hospitality Investment Advisors that, as a consequence, the group "would not return" to Yakima. Another group noted some "inconsistency" in the quality of the meals. Five of the groups that have used the Yakima Convention Center in the past cited a need for additional space. An event with 1,000 delegates would like a larger main meeting and exhibit area and uses 14 breakout rooms at the neighboring hotels. A second group brought 1,500 delegates to Yakima for a religious conference, but expects to outgrow the facility with 2,000 delegates in 2001. Finally, the organizers of three smaller functions cited a need for additional breakout rooms. Lost Business Among the groups that had rejected Yakima in favor of another venue, the selection criteria were mixed. One group cited a need for additional exhibit space, up to 30,000 square feet; however, this event eventually was held in Wenatchee, where the total meeting and exhibit space is less than 25,000 square feet. One group noted that while the convention center was suitable and available on the desired dates, nearby hotels were booked; this group also ended up in Wenatchee. A third organization cited the lack of "good quality" sleeping rooms (they needed 150 guestrooms), and relocated their event to the Tri -Cities. One organization reported very different experiences for two religious conventions held in 1999. In the larger event, with 1,000 participants, the group had a "terrible hotel experience", and was left with a negative impression of Yakima. In the second event, with 600 participants, the entire experience was very positive. These decisions also appear to have been influenced by external factors. Two of the respondents objected to the character of the surrounding neighborhood, citing perceived safety concerns regarding crime and drug use. (These responses came from two associations of firefighters, a profession not known for its timidity.) Another disadvantage noted was a lack of extracurricular activities, at least in comparison to alternate locations. However, six of the seven respondents in the lost business category had positive comments to offer concerning the convention center facilities and staff. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VII -8 Hospitality Investment Advisors SUMMARY By most measures, the Yakima Convention Center and the primary convention hotels have been very successful in capturing regional convention demand. The principal advantages of Yakima are the quality of the convention center facilities and staff, the central location of the community within the region, and a moderate rate structure. The city also benefits from the lack of a convention center in the Tri -Cities, and what appears to be an underutilization of the facilities in Spokane. The main disadvantages of Yakima are external to the convention center itself. Groups that have used or considered the city as a venue for events have expressed concerns with regard to the quality of available lodging, the character of the surrounding neighborhood, and the availability of cultural and recreational activities. Also, the city of Wenatchee is a strong competitor: while its convention center does not have as large a volume of contiguous space, it does offer a more flexible meeting venue, and is very popular with small and midsize events. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VII -9 Hospitality Investment Advisors SECTION VIII CHALLENGES AND RECOMMENDATIONS SECTION VIII CHALLENGES AND RECOMMENDATIONS OPERATING CHALLENGES New Competition The most fundamental challenge to the Yakima Convention Center is new competition. The recent additions to Wenatchee Center have allowed that facility to compete more effectively for small and midsize conventions. The planned expansion of exhibit space at Spokane Center also will have some impact on Yakima. Proposed convention facilities in Olympia, Vancouver, and Tacoma, although outside the regional market, could have an indirect effect on demand. The most direct competitive threat will come from the development of a convention center in the Tri - Cities. As discussed in this report, we expect that a new facility will be developed within the next few years. Associations and other groups that employ a rotational pattern through the state are likely to view the Tri -Cities as an alternative to Yakima and Wenatchee, further dividing the share of conventions located in Central Washington. Capacity The Yakima Convention Center has a maximum capacity of 1,600 for banquets and 2,250 for theater seating. These upper limits are comparable to those of Spokane's International Agricultural Trade Center, and well above the maximum capacities in Wenatchee. The TRAC facility in Pasco has an advertised banquet capacity of 2,800; however, the physical features of this facility (concrete floor, 40 -foot ceiling height, minimal noise insulation) make it an ineffective competitor. In our survey of associations, the overall size and capacity of the convention center ballroom was considered adequate by nearly all of those responding. The Yakima ballroom provides the largest contiguous carpeted area of any facility in the competitive set. While larger, uncarpeted spaces are available for exhibits in Spokane and Pasco, these rooms appeal primarily to trade and consumer shows, which typically generate little in the way of lodging demand or economic impact. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VIII -1 Hospitality Investment Advisors Flexibility Another issue concerns the flexibility of the available space in meeting the needs of varying groups. Both Wenatchee and Spokane can offer a large number of breakout rooms (14 and 13 rooms, respectively), many of which can be combined into midsize units. These are not subdivisions of the main meeting or exhibit space, but dedicated breakout rooms, with ceiling heights that are more in proportion to floor area. In Wenatchee, most of the breakout rooms are located on the lower level of the convention center, beneath the main ballroom. In Spokane, the rooms are situated on the floor above the ballroom and exhibit hall. In contrast, the Yakima Convention Center has only one true breakout room, and while the ballroom space is divisible into several units, none is as small as the 500 to 600 square foot size of the average breakout room in Spokane or Wenatchee. In the absence of in-house breakout space, many Yakima events rely upon breakout rooms in nearby hotels. However, this space is not always available, as the hotels tend to give preference to their own in-house groups, a practice that enables hotel managers to better control the use of their meeting space, and to target groups that will purchase the largest number of sleeping rooms. Service Access While the Yakima Convention Center was designed with future expansion in mind, it is unclear whether or not the existing kitchen facilities will be adequate if the meeting area is increased to accommodate more and larger groups. Furniture storage is an issue for most facilities, and Yakima is no exception. However, the tendency to use service corridors for overflow storage exacerbates another problem in Yakima, that is the width of the corridors themselves, sections of which are too narrow to allow for mechanized delivery of furniture and equipment. A final service issue concerns access between the kitchen and storage areas and the individual meeting rooms. When the ballroom is configured as one or two units, the number of service doors is quite adequate. However, when the space is subdivided, three of the smaller units do not have service access, so that meals and equipment must be carted through the prefunction space. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VIII -2 Hospitality Investment Advisors Amenities The Yakima Convention Center has little in the way of on-site amenities for event participants. In this respect, it is similar to the competing facilities in Spokane, Wenatchee, and the Tri -Cities. However, Wenatchee Center is located in that city's downtown shopping district, and Spokane Center offers easy access to a host of retail opportunities, parks, and river walks. The immediate neighborhood of the Yakima facility includes a Dairy Queen Restaurant, a grocery store, and various service and office uses. There is little to attract delegates out of the building during breaks or meal periods. Lodging In our survey of state associations, the quality and capacity of nearby hotels both were issues. In terms of the number of rooms in its primary lodging tier, Yakima is superior to both Wenatchee and the Tri -Cities, and only slightly below Spokane. However, both Spokane and the Tri -Cities have a much greater capacity in their secondary tiers. While these additional hotels cannot support groups that require in-house meeting space, they do accommodate a greater number of delegates to convention center events. The issue of guestroom quality is more subjective. We note that the WestCoast properties nearest the convention center are undergoing some renovation, and that similar improvements are planned at the Doubletree Hotel. Furthermore, these properties are quite similar in age, guestroom size, and furnishings to the primary hotels in Wenatchee and the Tri -Cities. While lodging quality should remain a concern, it is by no means clear that Yakima is at a competitive disadvantage in this area. Parking With parking on three sides of the convention center itself, nearly a full block of parking immediately to the east, and overflow capacity available at nearby hotels, the parking needs of convention delegates generally can be accommodated. Event participants who are guests of one of the nearby hotels tend to park at their hotel and walk to the convention center, freeing the center parking stalls for local residents and guests of more distant hotels. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VIII -3 Hospitality Investment Advisors There are two conditions under which parking capacity becomes an issue. First, for events with significant local participation, such as trade shows, vehicles may overflow to the hotel lots without bringing a compensating source of lodging revenue. Second, when the nearby hotels are occupied with their own events, a concurrent event at the convention center may lead to an overall shortage. RECOMMENDATIONS The City of Yakima has several options with respect to the further expansion of the Yakima Convention Center. The first option (discussed in this report as Scenario 1) is to do nothing, continuing to operate the center with its present capacity and configuration. The second option (Scenario 2) is to extend the existing structure to the north, adhering to the long-range plan developed as part of the 1997 expansion. A third option (Scenario 3) is to construct a freestanding building to the east of the existing structure, across North Eighth Street. Based on our analysis of the existing facilities, historical operating performance, and current and anticipated market conditions, it is our opinion that further expansion of the Yakima Convention Center is warranted. We recommend that the City of Yakima consider each of the two development options. Scenario 2 — North Option The proposed northerly expansion of the existing structure would increase the total meeting and exhibit space from the existing 24,027 square feet to 38,344 square feet. The southern end of the meeting space (presently Rooms A through D), with a 15 foot ceiling height, would be converted to three midsize units, separated by prefunction corridors, with each unit divisible into three breakout rooms. The existing northern addition and the proposed extension would be combined into a new divisible ballroom with a total area of 27,400 square feet and a consistent, 23 -foot ceiling height. The revised configuration would enhance the flexibility of the meeting space. The southern breakout rooms would range in size from 1,012 to 1,360 square feet, and could be joined in a variety of combinations. The new main ballroom would be divisible into five smaller units, ranging in size from 4,000 to 8,000 square feet. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VIII -4 Hospitality Investment Advisors With the increase in the number of breakout rooms, the small conference room presently located on the east wall of the lobby would no longer be needed for this use. In this proposal, the area is used for new public restrooms. Service issues would remain a concern under this proposal. As designed, the convention center would have up to 14 separate meeting spaces, only six of which would have direct access to the service corridor along the west side of the building. The remaining units would be accessible only through adjoining units or public corridors. Additional service corridors could be added, but only by trading away meeting or prefunction space. Scenario 3 — East Option This scenario has been developed by Jinneman, Kennedy, & Associates as a conceptual alternative to the 1997 plan, and is intended to address the issue of breakout space from the ground up. Rather than attempt to expand or adapt the present facilities, this option would involve construction of a freestanding building on the block bounded by Yakima Avenue, North Eight Street, North Ninth Street, and East B Street, directly east of the existing convention center. The new building would house 15 to 20 individual breakout rooms. Most of the rooms would be designed in clusters of two to four units, with the units within each cluster separated by moveable partitions. The average floor area of individual units would be about 600 square feet. The total floor area of the new meeting space would be in the range of 9,000 to 12,000 square feet; for purposes of our analysis, we have assumed an area of 10,000 square feet. As conceived, the building would be two stories in height. The first floor would include a wide corridor running east to west through the building. The southern portion of this level would house leased retail shops, which would open both to the interior corridor and to an exterior walkway. To support the retail tenants, the building would need to have good exposure along Yakima Avenue, possibly incorporating the parcel presently occupied by a Dairy Queen restaurant. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VIII -5 Hospitality Investment Advisors The northern portion of the first floor will present the greatest design challenges. The intent is to provide space to accommodate the assembly and break needs of several small groups concurrently. This concept would include a small central prep kitchen capable of preparing coffee, pastries, and other simple fare. This kitchen would be ringed by two or three defined break areas, separated from one another, but with each open to the central corridor. Each break area would be large enough to accommodate casual assembly, and would include some lounge seating. Coffee and snacks could be distributed from the kitchen to the break areas through catering counters or buffet tables. The breakout room clusters would occupy the remainder of the first floor and most of the second floor (allowing for circulation, stairwells, an elevator, and restrooms). Rooms on the main level could provide a means for separating the break areas. The second floor could include some break space as well, with service provided from the first floor kitchen. In addition to providing needed breakout capacity, the new structure would address several ancillary challenges. First, it would provide an interior link between the main convention hall and the several hotels located to the east of North Ninth Street. Second, it would add to the space available for prefunction assembly and informal social gatherings. Finally, this plan would create an opportunity to generate ancillary income from retail leases. Ideally, the products or services of shop tenants would serve the needs of both convention delegates and the local public. Examples could include a photocopy service, an espresso bar, a gift and sundry shop, a flower shop, or a travel agency. One issue of concern in this proposal is the need for delegates to cross North Eighth Street between the main meeting rooms and the new structure. Several options have been discussed, including the closure of North Eighth Street and the construction of a pedestrian overpass. However, a possible street closure has been and would be again a highly contentious issue, and the sporadic movement of delegates to and from breakout rooms is unlikely to justify the cost of an elevated bridge. In our opinion, the use of a wide pedestrian crosswalk, signalized and positioned near the center of the block, would adequately address the issue of pedestrian traffic flow. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VIII -6 Hospitality Investment Advisors Other Considerations Given the seasonality of the convention market, the accommodation of additional lodging demand is likely to prompt new hotel development. Given the relatively large number of rooms presently operating in the primary lodging tier, we consider it unlikely that another full-service convention hotel would be developed in the Yakima. However, we would expect to see the opening of one or two new limited service properties in the secondary tier, the development of which could spur further renovation and improvements at the full service properties. Under either of the development scenarios, the number of parking stalls surrounding the convention center would be reduced. Coupled with the projected increases in convention activity, this will increase the incidence and severity of parking shortages. It may be necessary to consider construction of a public parking garage, offsetting a portion of the associated costs through daily or hourly fees. Among the suggestions put forth near the conclusion of our study was the possible expansion of meeting capacity through construction of breakout space above the existing ballroom. We have not evaluated this suggestion in detail. However, we do note that the structural requirements of a second floor could include the placement of multiple support posts in the ballroom, features that could obstruct sightlines and restrict movement. The scope of this study does not include the estimation of construction and other costs for the two recommended development options. As discussed in Section IX, the operating performance of the convention center is expected to improve under either development scenario. In selecting a course of action, the City will wish to estimate and consider the construction cost of each option, the potential for ancillary income, the functional utility of the end product, and the aesthetics of the overall design. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page VIII -7 Hospitality Investment Advisors SECTION IX PROJECTED PERFORMANCE SECTION IX PROJECTED PERFORMANCE SCENARIOS We have estimated the future performance of the Yakima Convention Center under three scenarios. The first scenario assumes no change from the existing facilities. The convention center would continue to operate with a large divisible ballroom and a single breakout room, relying on the neighboring hotels to provide breakout space. Under this scenario, the total meeting area of the convention center remains at its current level, 24,027 square feet. The second scenario assumes the convention center is expanded as originally proposed, extending the existing structure to the north and reconfiguring the southern portion of the building to provide several breakout rooms. The total meeting area under this proposal is 38,344 square feet. The assumed first year of operation for the expanded facility is 2002. In the third scenario, the existing convention center would remain in its present configuration. New construction would consist of a two-story structure located to the east of the existing facility, across North Eighth Street. This building would house retail shops, a prep kitchen, break areas, and approximately 10,000 square feet of clustered breakout rooms. The total meeting space in this scenario, including the existing facility, is roundly 34,000 square feet. Again, completion is assumed by 2002. Under each scenario, the focus of our projections is net operating income, the difference between the operating revenue of the convention center (primarily rental fees and catering commissions) and direct operating expenses (Unit 325), such as management, staffing, supplies, and utilities. The scope of our study did not include an analysis of the allocation of lodging tax receipts, potential retail or parking income, or the expenses of the Yakima Valley Visitors and Convention Bureau or the Sports Commission (Unit 324). However, each table does include our projection of citywide lodging tax receipts, from which subsequent allocations may be made. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IX -1 Hospitality Investment Advisors PROJECTED MARKET CONDITIONS Market Supply In each of our scenarios, we are projecting an increase in the regional supply and meeting and exhibit space. These developments are expected to take place without regard to the further expansion, if any, of the Yakima Convention Center. Based on our market research and discussions with community and convention center officials, we are projecting the development of a 40,000 square foot addition to the Spokane Convention Center, with completion in 2003. The initial plan for that facility involved a more ambitious proposal that would have added 40,000 square feet of meeting space and 100,000 square feet of exhibit space. However, the cost of this proposal has proven to be prohibitive, and this more modest extension of the existing exhibit hall now appears more likely. In the Tri -Cities, interest has again been expressed in the development of a convention center. While the specifics of the proposal have yet to be finalized, it is likely to follow the general plan outlined in the 1996 feasibility study, which recommended a 20,000 square foot main ballroom and 10,000 square feet of breakout space. The most likely site for such a development would be near the existing Coliseum in Kennewick. However, this location is unlikely to draw strong support from the neighboring cities, particularly Pasco, which can already accommodate trade shows at TRAC and conventions at the Doubletree Hotel. We expect that funding for the new facility eventually will be secured at the county level, with support from Kennewick, Richland, and the eastern Yakima Valley. We project the opening of the Benton County Convention Center in 2004. Market Demand Under each of the scenarios, the volume of regional market demand, as measured by group room nights, is projected to increase at an average annual rate of three percent. This rate of growth is consistent with long-term economic and demographic trends for the region as a whole. While the development of new meeting space in Yakima and elsewhere likely will shift the competitive position of the several markets, it is unlikely to have a material impact on the total volume of convention activity in Eastern Washington. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IX -2 Hospitality Investment Advisors The several measures of regional market revenue each are projected to increase at 5.5 percent annually. This figure is toward the low end of the estimated historical range, as discussed in Section VII. The projected rate has been developed as the sum of a 3.0 percent underlying rate (a blend of the various economic and demographic indicators presented in Section II) and an assumed 2.5 percent annual inflation rate. PROJECTED PENETRATION AND REVENUE Scenario 1 In the first scenario, we assume the facilities of the Yakima Convention Center remain unchanged. The maximum ballroom area would stay at just under 24,000 square feet, although the room would more typically be divided for use by multiple groups, or for multiple setups for a single large group. The center management would continue to rely on hotels in the primary lodging tier to provide breakout rooms. Under this scenario, rates of penetration are projected to remain at the 1999 levels through 2002. While it will affect Yakima's fair share ratio, the expansion of the Spokane Center in 2003 is not expected to have a material impact on penetration, since the events housed in the new, larger exhibit space probably would not consider Yakima in any event. However, the projected 2004 opening of a convention center in Kennewick would introduce a strong direct competitor for Yakima, and likely shift the penetration rates of both Yakima and the Tri -Cities nearer to their fair share. Scenario 2 Under the second scenario, the Yakima Convention Center would be expanded as initially proposed, with an assumed opening date of 2002. The improved flexibility and larger overall area of the center will boost the fair share ratio from 19.5 percent to 23.6 percent, and is expected to support modest increases in penetration in the near term. The opposite impact will be felt in subsequent years with the advent of new competition. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IX -3 Hospitality Investment Advisors Scenario 3 Our projections under the third scenario are similar to those in Scenario 2. Penetration rates are expected to be slightly more favorable here, due to the greater flexibility of breakout space. Summary Under Scenario 1, the revenue of the Yakima Convention Center is projected to increase gradually through 2002, then to decline with the opening and expansion of competitive facilities. Under Scenarios 2 and 3, the center receives a large boost in revenue following the expansion, and suffers less of a decline from the new competition. While the projected increase in convention center revenue under Scenarios 2 and 3 are substantial, they are not without precedent. Following the 1997 expansion, convention center revenue increased by 70 percent in a two year period, very near the percentage increase in available meeting space. Our projections are for increases of 40 to 60 percent in meeting area, and about 30 percent in convention center revenue. Tables 9.1 through 9.3 present our projections of group room nights and revenue under the three scenarios. JKA#00- 125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IX -4 Hospitality Investment Advisors 111111 all NM MI EN EN- r- Er M--- MN r- I SZ 1-00#V?If Table 9.1 Projected Penetration And Revenue Scenario 1 1999 2001 2002 2003 2004 2005 2006 Meeting & Exhibit Space Yakima 51,418 51,418 51,418 51,418 51,418 51,418 51,418 Wenatchee 34,641 34,641 34,641 34,641 34,641 34,641 34,641 Tri -Cities 70,273 70,273 70,273 70,273 100,000 100,000 100,000 Spokane 107,375 107,375 136,775 177,000 177,000 177,000 177,000 Total 263,707 263,707 293,107 333,332 363,059 363,059 363,059 Yakima Fair Share Ratio 19.5% 19.5% 17.5% 15.4% 14.2% 14.2% 14.2% Regional Market Demand Group Room Nights 215,100 228,200 235,000 242,100 249,400 256,900 264,600 Convention Center Revenue $5,567,000 $6,196,000 $6,537,000 $6,897,000 $7,276,000 $7,676,000 $8,098,000 Primary Lodging Revenue $32,666,000 $36,358,000 $38,358,000 $40,468,000 $42,694,000 $45,042,000 $47,519,000 Convention And Lodging Revenue $38,227,000 $42,548,000 $44,888,000 $47,357,000 $49,962,000 $52,710,000 $55,609,000 Yakima Fair Share of Demand Group Room Nights 41,900 44,500 41,200 37,300 35,300 36,400 37,500 Convention Center Revenue $1,085,000 $1,208,000 $1,147,000 $1,064,000 $1,030,000 $1,087,000 $1,147,000 Primary Lodging Revenue $6,369,000 $7,089,000 $6,729,000 $6,242,000 $6,047,000 $6,379,000 $6,730,000 Convention And Lodging Revenue $7,454,000 $8,296,000 $7,874,000 $7,305,000 $7,076,000 $7,465,000 $7,876,000 Projected Penetration Rates Group Room Nights 117% 117% 117% 117% 115% 110% 110% Convention Center Revenue 174% 174% 174% 174% 170% 160% 160% Primary Lodging Revenue 113% 113% 113% 113% 110% 105% 105% Convention And Lodging Revenue 122% 122% 122% 122% 119% 113% 113% Projected Yakima Demand Group Room Nights 48,900 51,900 48,100 43,500 40,600 40,000 41,300 Convention Center Revenue $1,893,000 $2,108,000 $2,001,000 $1,856,000 $1,751,000 $1,739,000 $1,835,000 Primary Lodging Revenue $7,198,000 $8,012,000 $7,605,000 $7,054,000 $6,652,000 $6,698,000 $7,067,000 Convention And Lodging Revenue $9,091,000 $10,120,000 $9,606,000 $8,910,000 $8,403,000 $8,437,000 $8,902,000 Source: Jinneman, Kennedy, & Associates, P.S. M r N N MI - -- M r E-- r- I --- SZ l-00#V){1 Table 9.2 Projected Penetration And Revenue Scenario 2 1999 2001 2002 2003 2004 2005 2006 Meeting & Exhibit Space Yakima 51,418 51,418 65,735 65,735 65,735 65,735 65,735 Wenatchee 34,641 34,641 34,641 34,641 34,641 34,641 34,641 Tri -Cities 70,273 70,273 70,273 70,273 100,000 100,000 100,000 Spokane 107,375 107,375 136,775 177,000 177,000 177,000 177,000 Total 263,707 263,707 307,424 347,649 377,376 377,376 377,376 Yakima Fair Share Ratio 19.5% 19.5% 21.4% 18.9% 17.4% 17.4% 17.4% Regional Market Demand Group Room Nights 215,100 228,200 235,000 242,100 249,400 256,900 264,600 Convention Center Revenue $5,567,000 $6,196,000 $6,537,000 $6,897,000 $7,276,000 $7,676,000 $8,098,000 Primary Lodging Revenue $32,666,000 $36,358,000 $38,358,000 $40,468,000 $42,694,000 $45,042,000 $47,519,000 Convention And Lodging Revenue $38,227,000 $42,548,000 $44,888,000 $47,357,000 $49,962,000 $52,710,000 $55,609,000 Yakima Fair Share of Demand Group Room Nights 41,900 44,500 50,200 45,800 43,400 44,700 46,100 Convention Center Revenue $1,085,000 $1,208,000 $1,398,000 $1,304,000 $1,267,000 $1,337,000 $1,411,000 Primary Lodging Revenue $6,369,000 $7,089,000 58,202,000 $7,652,000 $7,437,000 $7,846,000 $8,277,000 Convention And Lodging Revenue $7,454,000 $8,296,000 $9,598,000 $8,954,000 $8,703,000 $9,182,000 $9,687,000 Projected Penetration Rates Group Room Nights 117% 117% 120% 125% 120% 115% 115% Convention Center Revenue 174% 174% 177% 180% 170% 150% 150% Primary Lodging Revenue 113% 113% 115% 120% 115% 110% 110% Convention And Lodging Revenue 122% 122% 124% 129% 123% 116% 116% Projected Yakima Demand Group Room Nights Convention Center Revenue Primary Lodging Revenue Convention And Lodging Revenue 48,900 $1,893,000 $7,198,000 $9,091,000 Source: Jinneman, Kennedy, & Associates, P.S. 51,900 60,200 57,300 52,100 51,400 53,000 $2,108,000 $2,474,000 $2,347,000 $2,154,000 $2,006,000 $2,117,000 $8,012,000 $9,432,000 $9,182,000 $8,553,000 $8,631,000 $9,105,000 $10,120,000 $11,906,000 $11,529,000 $10,707,000 $10,637,000 $11,222,000 Mr NIP M M MN I I M MI r NM= r M M M r - SZ I -00#V3I1 Table 9.3 Projected Penetration And Revenue Scenario 3 1999 2001 2002 2003 2004 2005 2006 Meeting & Exhibit Space Yakima 51,418 51,418 61,418 61,418 61,418 61,418 61,418 Wenatchee 34,641 34,641 34,641 34,641 34,641 34,641 34,641 Tri -Cities 70,273 70,273 70,273 70,273 100,000 100,000 100,000 Spokane 107,375 107,375 136,775 177,000 177,000 177,000 177,000 Total 263,707 263,707 303,107 343,332 373,059 373,059 373,059 Yakima Fair Share Ratio 19.5% 19.5% 20.3% 17.9% 16.5% 16.5% 16.5% Regional Market Demand Group Room Nights 215,100 228,200 235,000 242,100 249,400 256,900 264,600 Convention Center Revenue $5,567,000 $6,196,000 $6,537,000 $6,897,000 $7,276,000 $7,676,000 $8,098,000 Primary Lodging Revenue $32,666,000 $36,358,000 $38,358,000 $40,468,000 $42,694,000 $45,042,000 $47,519,000 Convention And Lodging Revenue $38,227,000 $42,548,000 $44,888,000 $47,357,000 $49,962,000 $52,710,000 $55,609,000 Yakima Fair Share of Demand Group Room Nights 41,900 44,500 47,600 43,300 41,100 42,300 43,600 Convention Center Revenue $1,085,000 $1,208,000 $1,325,000 $1,234,000 $1,198,000 $1,264,000 $1,333,000 Primary Lodging Revenue $6,369,000 $7,089,000 $7,772,000 $7,239,000 $7,029,000 $7,415,000 $7,823,000 Convention And Lodging Revenue $7,454,000 $8,296,000 $9,096,000 $8,472,000 $8,225,000 $8,678,000 $9,155,000 Projected Penetration Rates Group Room Nights 117% 117% 125% 135% 130% 125% 125% Convention Center Revenue 174% 174% 190% 200% 180% 160% 160% Primary Lodging Revenue 113% 113% 120% 130% 125% 120% 120% Convention And Lodging Revenue 122% 122% 130% 140% 133% 126% 126% Projected Yakima Demand Group Room Nights 48,900 51,900 59,500 58,500 53,400 52,900 54,500 Convention Center Revenue $1,893,000 $2,108,000 $2,518,000 $2,468,000 $2,156,000 $2,022,000 $2,133,000 Primary Lodging Revenue $7,198,000 $8,012,000 $9,326,000 $9,411,000 $8,786,000 $8,898,000 $9,388,000 Convention And Lodging Revenue $9,091,000 $10,120,000 $11,844,000 $11,879,000 $10,942,000 $10,920,000 $11,521,000 Source: Jinneman, Kennedy, & Associats, P.S. PROJECTED EXPENSES AND NET OPERATING INCOME/LOSS We have projected the direct operating expenses of the convention center in two components. Fixed expenses are those that do not vary materially with the volume of activity at the center, including management fees, professional services, building insurance, the transfer to the capital fund, and a portion of the utilities; these expenses are projected to increase at the overall rate of inflation. Variable expenses are those that increase as the volume of activity increases, such as postage, office supplies, telephone charges, advertising, and maintenance. These costs are projected at the historical ratio to operating revenue (roundly 13 percent of gross revenue or 45 percent of net revenue). To derive the net operating income or loss of the convention center, we deduct the direct fixed and variable expenses from the net operating revenue. In 1999, the center recorded a net operating loss of just under $90,000. Under Scenario 1, we project similar losses through 2002, with the losses increasing in subsequent years as new competition enters the market. Under Scenarios 2 and 3, the facility is expected to operate near a breakeven point in 2002, following the expansion; again, operating losses are forecast to increase with the opening of new competition, although they are expected to be less severe than under the first scenario. As discussed in Section IV, the Yakima Convention Center has not been entirely self-supporting from an operational perspective. Net operating losses have been funded through the allocation of a portion of lodging tax receipts, and a continuation of this practice is anticipated. In addition, the tax allocation is expected to be used to support the expenses of the Yakima Valley Visitors and Convention Bureau and the new Sports Commission, costs that are not a subject of this study. Our projections of operating revenue, operating expenses, and net operating income/loss for the • Yakima Convention Center are presented in Tables 9.4 and 9.5. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IX -8 Hospitality Investment Advisors IIIINi M= MI MI S OM I M 1 N-- MI M MI I M Table 9.4 Projected Operating Performance Total Dollar Amounts 1999 2001 2002 2003 2004 2005 2006 Scenario 1 Gross Operating Revenue $1,892,598 $2,108,000 $2,001,000 $1,856,000 $1,751,000 $1,739,000 $1,835,000 Less Catering Fees 1,346,668 1,500,000 1,424,000 1,321,000 1,246,000 1,237,000 1,305,000 Net Operating Revenue $545,930 $608,000 $577,000 $535,000 $505,000 $502,000 $530,000 Variable Expenses 248,331 277,000 263,000 244,000 230,000 229,000 242,000 Fixed Expenses 386,444 406,000 416,000 426,000 437,000 448,000 459,000 Net Operating Income/Loss -$88,845 -$75,000 -$102,000 -$135,000 -$162,000 -$175,000 -$171,000 Scenario 2 Gross Operating Revenue $1,892,598 $2,108,000 $2,474,000 $2,347,000 $2,154,000 $2,006,000 $2,117,000 Less Catering Fees 1,346,668 1,500,000 1,760,000 1,670,000 1,533,000 1,428,000 1,507,000 Net Operating Revenue $545,930 $608,000 $714,000 $677,000 $621,000 $578,000 $610,000 Variable Expenses 248,331 277,000 325,000 308,000 283,000 263,000 278,000 Fixed Expenses 386,444 406,000 416,000 426,000 437,000 448,000 459,000 Net Operating Income/Loss -$88,845 -$75,000 -$27,000 -$57,000 -$99,000 -$133,000 -$127,000 Scenario 3 Gross Operating Revenue $1,892,598 $2,108,000 $2,518,000 $2,468,000 $2,156,000 $2,022,000 $2,133,000 Less Catering Fees 1,346,668 1,500,000 1,792,000 1,756,000 1,534,000 1,439,000 1,518,000 Net Operating Revenue $545,930 $608,000 $726,000 $712,000 $622,000 $583,000 $615,000 Variable Expenses 248,331 277,000 331,000 325,000 284,000 266,000 281,000 Fixed Expenses 386,444 406,000 416,000 426,000 437,000 448,000 459,000 Net Operating Income/Loss -$88,845 -$75,000 -$21,000 -$39,000 -$99,000 -$131,000 -$125,000 Source: Jinneman, Kennedy, & Associates, P.S. M M M M IIIIIII M N MI I E IIIIII M M E IIIIII M IIIIII M M Table 9.5 Projected Operating Performance Ratios To Gross Revenue Scenario 1 Gross Operating Revenue Less Catering Fees Net Operating Revenue Variable Expenses Fixed Expenses Net Operating Income/Loss Scenario 2 Gross Operating Revenue Less Catering Fees Net Operating Revenue Variable Expenses Fixed Expenses Net Operating Income/Loss Scenario 3 Gross Operating Revenue Less Catering Fees Net Operating Revenue Variable Expenses Fixed Expenses Net Operating Income/Loss 1999 2001 2002 2003 2004 2005 2006 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 71.2% 71.2% 71.2% 71.2% 71.2% 71.1% 71.1% 28.8% 28.8% 28.8% 28.8% 28.8% 28.9% 28.9% 13.1% 13.1% 13.1% 13.1% 13.1% 13.2% 13.2% 20.4% 19.3% 20.8% 23.0% 25.0% 25.8% 25.0% 4.7% -3.6% -5.1')/0 -7.3% -9.3% -10.1% -9.3% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 71.2% 71.2% 71.1% 71.2% 71.2% 71.2% 71.2% 28.8% 28.8% 28.9% 28.8% 28.8% 28.8% 28.8% 13.1% 13.1% 13.1% 13.1% 13.1% 13.1% 13.1% 20.4% 19.3% 16.8% 18.2% 20.3% 22.3% 21.7% -4.7% -3.6% -1.1% -2.4% -4.6% -6.6% -6.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 71.2% 71.2% 71.2% 71.2% 71.2% 71.2% 71.2% 28.8% 28.8% 28.8% 28.8% 28.8% 28.8% 28.8% 13.1% 13.1% 13.1% 13.2% 13.2% 13.2% 13.2% 20.4% 19.3% 16.5% 17.3% 20.3% 22.2% 21.5% Source: Jinneman, Kennedy, & Associates, P.S. -4.7% -3.6% -0.8% -1.6% -4.6% -6.5% -5.9% PROJECTED LODGING TAX RECEIPTS To project the volume of lodging tax receipts under the three scenarios, we have again segregated the local lodging market according to tier. Lodging revenue in the primary tier is projected as shown in Tables 9.1, 9.2, and 9.3. The balance of the lodging revenue generated in Yakima is projected to increase at a modest annual rate of three percent, slightly above the assumed overall rate of inflation. Table 9.6 presents our estimates of lodging tax receipts through the forecast period. JKA#00-125 JINNEMAN, KENNEDY, & ASSOCIATES, P.S. Page IX -11 Hospitality Investment Advisors r E M E I M M- 1 MO R MI M O- M N M MI szi-oo#VNI Table 9.6 Projected Lodging Tax Receipts Scenario 1 Primary Lodging Revenue Secondary/Tertiary Revenue Total Lodging Revenue Basic Tax Receipts (1.98%) Supplemental Tax Receipts (3.0%) 1999 2001 2002 2003 2004 2005 2006 $7,198,000 $8,012,000 $7,605,000 $7,054,000 $6,652,000 $6,698,000 $7,067,000 $9,996,000 10,605,000 10,923,000 11,251,000 11,589,000 11,937,000 12,295,000 $17,194,000 $18,617,000 $18,528,000 $18,305,000 $18,241,000 $18,635,000 $19,362,000 $340,000 $369,000 $367,000 $362,000 $361,000 $369,000 $383,000 $516,000 $559,000 $556,000 $549,000 $547,000 $559,000 $581,000 Scenario 2 Primary Lodging Revenue $7,198,000 $8,012,000 $9,432,000 $9,182,000 $8,553,000 $8,631,000 $9,105,000 Secondary/Tertiary Revenue 9,996,000 10,605,000 10,923,000 11,251,000 11,589,000 11,937,000 12,295,000 Total Lodging Revenue $17,194,000 $18,617,000 $20,355,000 $20,433,000 $20,142,000 $20,568,000 $21,400,000 Basic Tax Receipts (1.98%) $340,000 $369,000 $403,000 $405,000 $399,000 $407,000 $424,000 Supplemental Tax Receipts (3.0%) $516,000 $559,000 $611,000 $613,000 $604,000 $617,000 $642,000 Scenario 3 Primary Lodging Revenue Secondary/Tertiary Revenue Total Lodging Revenue Basic Tax Receipts (1.98%) Supplemental Tax Receipts (3.0%) $7,198,000 $8,012,000 $9,326,000 $9,411,000 $8,786,000 $8,898,000 $9,388,000 9,996,000 10,605,000 10,923,000 11,251,000 11,5 89,000 11,937,000 12,295,000 $17,194,000 $18,617,000 $20,249,000 $20,662,000 $20,375,000 $20,835,000 $21,683,000 $340,000 $369,000 $401,000 $409,000 $403,000 $413,000 $429,000 $516,000 $559,000 $607,000 $620,000 $611,000 $625,000 $650,000 Source: Jinneman, Kennedy, & Associates, P.S. -, 2 al EMI NMI NM=- = MN N N i ME= MB- MN M I r I RESOLUTION NO. R-2000- 100 A RESOLUTION authorizing and directing the City Manager of the City of Yakima to execute an agreement with Jinneman, Kennedy, & Associates, P.S. (JKA), a marketing/financial consulting firm, for consultant services to prepare a marketing/financial analysis for the Yakima Convention Center. WHEREAS, the City of Yakima desires to expand the existing • Yakima Convention Center; and WHEREAS, the City requires professional marketing/financial consultant services to determine and evaluate the current market for the proposed project; and WHEREAS, the City does not have the staffing levels or technical expertise necessary to provide said consultant services; and WHEREAS, the Yakima City Council deems it to be in the best interest of the City that the attached agreement document be executed by 1.1 the City of Yakima, accordingly; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager of the City of Yakima is hereby authorized and directed to execute an agreement with Jinneman, Kennedy, & Associates, I P.S. (JKA) for the purpose mentioned above, a copy of which agreement is attached hereto and by reference made a part hereof. ADOPTED BY THE CITY COUNCIL this 15th day of August, 2000 ATTEST: F:G.r FAUN s. nuns, lb's, L C l : City Clerk 1J August 10, 2000 1 SI MARY PLACE. Mary Place, Mayor Certified to be a true anti original filed in my office. //i // CITY CLEK, L� /� ��L7%/ALS✓ TECHNICAL ASSISTANCE AGREEMENT This Technical Assistance Agreement (hereinafter "Agreement") is made and entered into this day of August, 2000, by and between the City of Yakima, a Washington State municipal corporation (hereinafter "City"), and Jinneman, Kennedy, & Associates, P.S., (hereinafter C 4 JKA „ ). WITNESSETH: WHEREAS, the City desires to carry out a Market/Financial Analysis for the Yakima Convention Center Expansion Project (the "Project"); and WHEREAS, the City has determined that the professional services of a financial consultant are needed in developing and implementing the Project; and WHEREAS, the City, issued a public "Request for Statements of Qualifications" from qualified consultants and consultancy firms in order to determine the consultant or consultancy firms best qualified to assist the City in the development and implementation of the Project; and WHEREAS, JKA was determined by the City to be the best qualified consultancy firm to assist the City in the development and implementation of the Project; and WHEREAS, JKA is willing to provide the City with said services in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, the City and JKA do hereby agree as follows: 1. SCOPE OF SERVICES. JKA shall provide the City with the following consultant services generally described as assessment, planning, presentation, and final preparation and presentation of a Marketing/Financial Analysis for the Yakima Convention Center. A. The Convention Center Market JKA first task in this study is to determine and evaluate the current market for the Yakima Convention Center. The two components of this market analysis are supply and demand. The competitive market supply consists of convention centers that are located within the Pacific Northwest region, offer comparable facilities and services, and cater to a similar mix of conventions, corporate meetings, trade shows, and other events. Using these criteria, JKA will identify the most direct competitors of the Yakima Convention Center. They will inspect these competing facilities and interview management, focusing on the issues of capacity, quality, seasonality, and sources of demand. Based on this research, they will estimate the current and historical volume of demand for the competitive convention center market. Overall demand will be segmented by location, season, source, and type. Historical demand growth and economic and demographic indicators will be used to project the volume of convention center demand for a five-year forecast period. B. Market Share of the Yakima Convention Center JKA will review the historical volume of demand captured by the Yakima Convention Center. By comparing this data to the results of their market analysis, they will derive the achieved market share of the Yakima facility. JKA will estimate the share of overall market demand that could be captured by the Yakima Convention Center if it were to be expanded as proposed. This estimate will take into account the quality and capacity of the expanded Yakima facility in comparison to its primary competitors. JKA will estimate the market share that should be achievable in a representative future year, and will project the ramp -up of market share from completion through the absorption period. C. Facility Space Requirements JKA will review the plans for the proposed expansion, considering the capacity, flexibility, and configuration of function space in relation to market demand. Among the considerations addressed in this step will be convention attendance, use of breakout space, food and beverage requirements, and suitability for concurrent events. D. Capacity and Revenue JKA will discuss the necessary trade-off between the development cost of new meeting space and the potential increase in revenue. This step will focus on the elasticity of demand and the incremental effect of new capacity on captured demand, by estimating the stabilized annual revenue under several expansion scenarios. E. Potential Operating Challenges JKA will identify and discuss potential challenges to the successful operation of the convention center. One such issue will be the capacity of the Yakima lodging market, and the extent to which local hotels can or will accommodate a greater volume of overnight demand by those attending conventions or other group functions. A second issue will concern the quality and condition of local hotels, the site selection criteria of convention and meeting planners, and the possible implications for marketing of the convention center. Finally, JKA will address the potential impact of development of competing lodging, conference, or convention facilities. F. Projected Operating Revenue JKA will project the annual operating revenue of the expanded convention center through the absorption period and for a representative future year. These estimates will take into account the project volume and mix of demand, the current fee structure, fees charged at comparable convention facilities, and anticipated inflation. G. Hotel/Motel Tax JKA will review the historical volume of hotel/motel tax receipts generated in Yakima County over the past five years. They will then project the annual volume of receipts with and without the proposed expansion. This analysis will consider the projected volume and seasonality of convention demand, the capacity of the existing hotels, and the timing and impact of potential new lodging development. In performing the above services, JKA shall consult with officers and employees of the City and shall meet, as appropriate, with such representatives or other entities when necessary, including, without limitation, state and federal officials and representatives of other local organization. The City and JKA may, by mutual written agreement, revise the scope of services of this Agreement. The City and JKA may also, by mutual written agreement, extend and amend this Agreement and the compensation referenced herein, in order to accommodate ensuing Project implementation or other work resulting from the market analysis planning efforts contemplated by this Agreement, beyond the scope of services described herein. 2. COMPENSATION The City shall compensate JKA for performance of services received hereunder in the total amount of Twenty-two thousand five hundred dollars and no/100 dollars ($22,500), payable monthly upon receipt and approval by the City of invoices and documentation of percentages of work completed on the Project. Said compensation amount shall include and cover any and all costs of providing the services required under this Agreement. This will also include out-of- pocket expenses, including transportation, lodging, meals, long distance telephone charges, and document purchases. The City shall make payment to JKA within thirty (30) calendar days upon receipt of each invoice. 3. OWNERSHIP OF MATERIAL AND DOCUMENTS All final reports and other materials prepared by JKA for the City shall be the property of the City; however, all work papers and other source materials shall be the property of JKA. JKA shall deliver such materials to the City in accordance with the terms and conditions of this Agreement. The City shall not, without JKA's written consent, associate JKA's name with the report/product, if a subsequent change is made in such report/product after submission to the City. 4. RIGHT TO INSPECTION AND AUDIT. JKA shall establish and maintain appropriate procedures which will assure the proper accounting of all funds paid to it under this agreement. The City or any of its duly authorized representatives shall have a right to access to any books, documents, papers and records of JKA and/or its subcontractors which are related to the services required under this Agreement for the purpose of making an inspection, an audit, copies, excerpts and transcriptions. All such books and records shall be retained for such periods of time as required by applicable law; provided, however, notwithstanding any shorter periods of retention, all books, records and supporting details shall be retained for a period of at least three (3) years after the expiration of the term of this Agreement. 5. CONFIDENTIALITY REPORTS. JKA shall keep confidential all reports, information and data given to, prepared or assembled by JKA pursuant to JKA's performance hereunder which the City designates as confidential. Such information shall not be made available by JKA to any person, firm, corporation or entity without the prior written consent of the City. 6. COMPLIANCE WITH LAWS. JKA agrees to perform all services under and pursuant to this Agreement in full compliance with all applicable federal, state and local laws. 7. INDEPENDENT CONTRACTOR STATUS OF JKA. JKA and the City understand and expressly agree that JKA is an independent contractor in the performance of each and every part of this Agreement. JKA, as an independent contractor, assumes the entire responsibility for carrying out and accomplishing the services required under this Agreement. Additionally, and as an independent contractor, JKA and its employees shall make no claim of City employment, no shall claim against the City any related employment benefits, social security, and/or retirement benefits. Nothing contained herein shall be interpreted as creating a relationship of servant, employee, partnership or agency between JKA or any officer, employee or agent of JKA and the City. 8. TAXES AND ASSESSMENTS. JKA shall be solely responsible for compensating its employees and for paying all related taxes, deductions, and assessments, including, but not limited to, federal income tax, FICA, social security tax, assessments for unemployment and industrial insurance, and other deductions from income which may be required by law or assessed against either party as a result of this Agreement. In the event the City is assessed a tax or assessment as a result of this Agreement, JKA shall pay the same before it becomes due. 9. EQUAL OPPORTUNITY/NON-DISCRIMINATION. During the performance of this Agreement, JKA shall not discriminate in violation of any federal, state, and/or local law and/or regulation on the basis of race, age, color, sex, religion, national origin, creed, marital status, political affiliation, or the presence of any sensory, mental or physical handicap. This provision shall include, but not be limited to, the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff, or termination, rates of pay or other forms of compensation, selection for training, and the provisions of services under this Agreement. 10. CONFLICTS OF INTEREST. No board member, officer or employee of the City or its designees or agents, and no other public official who exercises any functions or responsibilities with respect to any requested technical assistance, shall be permitted to financially benefit from this Agreement or have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with this Agreement. 11. LIMITATION ON SCOPE OF SERVICE. JKA will advise the City to the best of its ability concerning the matters within the scope of services under this Agreement. JKA advises the City under this Agreement with certain Assumptions and Limiting Conditions are attached hereto as Exhibits "A" and "B" respectively and incorporated herein by the reference. Nevertheless, and notwithstanding any other agreement between the parties, the following will apply: JKA does not and cannot warrant or guarantee that the City will obtain any particular result. Furthermore, while JKA can advise the City as to the practices or procedures of government entities, JKA does not and cannot warrant or guarantee to the City that those practices or procedures will be followed or will not change. JKA cannot be responsible for giving legal advice or opinions, and the City understands that such advice or opinions can only be given by legal counsel. JKA is responsible for errors in documents it prepares, except that JKA may reasonably rely on factual statements provided by sources outside JKA's control. 12. NO INSURANCE PROVIDED BY THE CITY. JKA understands and agrees that the City does not maintain and shall not provide any insurance, liability or otherwise, for or on behalf of JKA, its directors, officers, employees, agents, representatives, or subcontractors. 13. ERRORS AND OMISSION INSURANCE. Before this Agreement is fully executed by the parties, JKA shall provide the City with a certificate of insurance as proof of Error and Omission liability insurance with a minimum liability limit of One Million Dollars ($1,000,000.00) combined single limit bodily injury and property damage. The certificate shall clearly state who the provider is, the coverage amount, the policy number, and when the policy and provisions provided are in effect (any statement in the certificate to the effect of "this certificate is issued as a matter of information only and confers no right upon the certificate holder" shall be deleted). Said policy shall be in effect for the duration of this Agreement. The policy shall name the City, its officers, elected officials, agents, and employees as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kin upon the company" shall be crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A -VII or higher in Best's Guide and admitted in the State of Washington 14. ASSIGNMENT. This Agreement, or any interest herein, or claim hereunder, shall not be assigned or transferred in whole or in part by JKA to any other person or entity without the prior written consent of the City. In the event that such prior written consent to an assignment is granted, then the assignee shall assume all duties, obligations and liabilities of JKA as stated herein. 15. SEVERABILITY. If any portion of this Agreement is changed by mutual agreement, or if any portion is held invalid, the remainder -of the Agreement shall remain in full force and effect. 16. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties regarding the matters covered and supersedes any and all other agreements, either oral or in writing, regarding the matters contained herein. 17. NON -WAIVER. The waiver by JKA or the City of the breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party or prevent either party from thereafter enforcing any such provision. 18. TERMINATION OF AGREEMENT. Either party may terminate this Agreement, with or without cause, by providing the other party with a written termination notice at least thirty (30) calendar days prior to the effective termination date. In the event that the City terminates this Agreement without cause, JKA shall be entitled to compensation in accordance with section (III) for services rendered through the date of termination. 19. NOTICES. Unless stated otherwise herein, all notices and demands shall be in writing and sent or hand - delivered to the parties to their addresses as follows: To City: To JKA: K. Wendell Adams, P.E. City Engineer Engineering Division 129 North 2nd Street Yakima, Washington 98901 Paul Jinneman, ISHC, MAI Principal Jinneman, Kennedy, & Associates, P.S. 6720 Fort Dent Way, Suite 120 Seattle, Washington 98188 Or to such other addresses as the parties may hereafter designate in writing. Notices and/or demands shall be sent by registered or certified mail, postage prepaid, or hand -delivered. Such notices shall be deemed effective when mailed or hand -delivered at the addresses specified above. 20. SURVIVAL. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the term or expiration of this Agreement and shall be binding on the parties to this Agreement. 21. GOVERNING LAW. This Agreement and the rights of the parties shall be construed, interpreted and determined in accordance with the laws of the State of Washington. 22. VENUE OF LEGAL PROCEEDINGS. Venue for any action to enforce or interpret this Agreement shall lie in the Superior Court of Washington for Yakima County, Washington. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first written above. CITY OF YAKIMA By: Date: is a • . . is, Jr. City Manager ATTEST: City Contract No. Resolution No. JINNEMAN, KENNEDY, & ASSOCIATES, P.S. By: Date: City Clerk \:;\ -• 2000-65 R-2000-100 Paul Jinnem Principal (F/do/(2e7 C, MAI Exhibit A ASSUMPTIONS This feasibility study report has been prepared under the following general assumptions: • No responsibility is assumed for matters of a legal nature. • Responsible ownership and competent property management are assumed. • The information provided by others is believed to be reliable. However, no warranty is given for its accuracy. • All engineering is assumed to be correct. The plot plans and illustrative material in this report are included only to assist the reader in visualizing the property, • It is assumed there are no hidden or inapparent conditions of the property, subsoil, or structures that render it more or less useful. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. • Full compliance with all applicable federal, state, and local environmental regulations and laws is assumed. • Full compliance with all applicable zoning and use regulations and restrictions is assumed. • It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or administrative authority from any local, state, or national government or private entity or organization have been or can be obtained. • It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass. Exhibit B LIMITING CONDITIONS This feasibility study report has been prepared under the following general limiting conditions: • Jinneman, Kennedy, and Associates, P.S., is not required to give further consultation, testimony, or be in attendance in court with reference to this report unless arrangements have been previously made. • Projections of future revenue, expenses, net operating income, mortgage debt service, capital outlays, cash flow, or inflation represent our judgment of the assumptions likely to be used by informed persons in the marketplace. These estimates are intended solely for analytical purposes and are not intended to accurately predict future resultsor events. Actual performance will differ from these projections, and these differences may be significant. • Estimates of project cost and operating performance are based on building plans and specifications provided by the client during the course of the study. Cost figures are intended as approximations only, and should be verified by competent architectural and engineering firms. In addition, to the extent that the eventual design and construction of the project vary from the plans and specifications provided, the actual development costs and operating performance of the project will differ from the estimates presented herein. • Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, or other environmental conditions, were not called to the attention or nor did the consultant become aware of such during the consultant's inspection. The consultant has no knowledge of the existence of such materials on or in the property unless otherwise stated. The consultant, however, is not qualified to test such substances or conditions. The presence of such substances, such as asbestos, urea formaldehyde foam insulation, or other hazardous substances or environmental conditions, may affect the feasibility of the project. Our analysis is predicated on the assumption that there is no such condition on or in the property or in such proximity thereto. No responsibility is assumed for any such conditions, nor for any expertise or engineering knowledge required to discover them. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 JKA MEETING & CONVENTION SURVEY Yakima, Washington October 2000 Jinneman, Kennedy, & Associates is studying a proposed expansion of the Yakima Convention Center. The needs and preferences of your organization are important to this decision. Thank you for your participation. Association: Contact: Please describe the conventions, group meetings, or other events sponsored by your organization: Type of event: How often does this event take place? During which months is the event typically held? What is the average duration of the event? days days What is the average number of delegates in attendance? delegates delegates How much space do you need for large meetings/banquets? sf sf How much additional space do you require for exhibits? sf sf How many breakout rooms do you typically use? rooms rooms How many sleeping rooms do you need on your peak night? rooms rooms In what cities and facilities do your events most often take place? What hotels do you use for overnight lodging? City: Meeting facility: Reason for selection: Hotel name: Typical room rate: $ $ $ Reason for selection: What is your overall impression of the Yakima area? Positive Neutral Negative Don't Know Why? What is your impression of the Yakima Convention Center? Positive Neutral Negative Don't Know Why? Comments: Thank you for your participation in the survey. Please return the completed form by mail or fax to: Jinneman, Kennedy, & Associates, P.S. 6720 Fort Dent Way, Suite 120, Seattle, Washington 98188 Phone: 206-439-6733 Fax: 206-439-7059 Qualifications Of JOHN D. GORDON, MAI Direct Line: (206) 439-3280 E-mail: jgordon@jk-a.com John brings many years of hospitality appraisal and consulting experience to our clients. PROFESSIONAL HISTORY • Jinneman, Kennedy, & Associates, P.S., Appraiser - August 1998 to Present • Gordon/Rood Hospitality Consulting, Principal - 1992 to 1998 • Pannell Kerr Forster, Appraisal Services, Senior Manager - 1984 to 1991 • America West Motor Hotels, Accounting Department - 1982 to 1984 STATE CERTIFIED GENERAL REAL ESTATE APPRAISER • Washington Certificate # GO-RD-OJ-D471D7 AREAS OF EXPERTISE • Hotel Appraisal • Feasibility Analysis • Litigation Support PROFESSIONAL MEMBERSHIPS • Appraisal Institute EDUCATION • University of California, Berkeley - Bachelor of Arts, Economics, 1976 • University of Washington, Seattle — Master of Business Administration, 1981 • Appraisal Institute - Various Courses and Seminars in Finance and Valuation • North Seattle Community College - Instructor, Real Estate Division Qualifications Of THOMAS P. KENNEDY, CHA, PRINCIPAL Direct Line: (206) 439-6800 E-mail: tkennedy@jk-a.com Tom brings many years of hospitality sales and marketing, operations, and consulting experience to JK&A. He serves as the designated broker .for the firm and maintains an extensive network of hospitality contacts. Tom's industry experience and market and economic feasibility analysis skills have served hundreds of clients throughout the Pacific Northwest. PROFESSIONAL HISTORY • Jinneman, Kennedy, & Associates, P.S. - January 1991 to Present • Pannell Kerr Forster - September 1983 to January 1991 • Sr. Manager Responsible for Management Advisory Services • Hotel Operations, Sales, and Marketing - 1974 to 1983 • Holiday Inns • Westwater Hotels • Super 8 Motels AREAS OF EXPERTISE • Market and Economic Feasibility Analyses and Forecasts for the Hospitality Industry • Market Research and Analysis • Hotel Operational Reviews • Sales and Marketing Planning • Hotel Brokerage, Due Diligence, and Acquisition PROFESSIONAL MEMBERSHIPS • Washington State Hotel and Motel Association • Oregon Lodging Association • Commercial Brokers Association • Idaho Lodging and Restaurant Association EDUCATION/LICENSES/CERTIFICATIONS • Licensed Real Estate Broker, State of Washington • American Hotel and Motel Association - Certified Hotel Administrator • University of Washington, Bachelor of Arts - Communications/Advertising • Holiday Inn University - Professional Selling in the Hospitality Industry • Standards of Professional Practice, Parts A and B, Appraisal Institute