Hotel Feasibility Study - City of Maricopa Final.pdf

7/24/2019 Hotel Feasibility Study - City of Maricopa Final.pdf

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City of Maricopa, AZMarket Feasibility Study

For more information regarding this report, contact:

Core Distinction Group LLC(612) [email protected]


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Introduction/Objective .. 3

Executive Summary (Conclusions) 4-7

Property RecommendationsProperty Type, size, and rate strategy

Property Features, Amenities, and ServicesSleeping Room ConfigurationBrand AffiliationOpening DateEconomic Impact PotentialMaricopa, AZ (Snapshot)

General Market Overview 8-10

General Market Location & Characteristics

Economic Overview 11-22

Population

Effective Buying IncomeWorkforce/Employment DistributionMajor EmployersUnemployment/Labor Supply/Wage PressuresEating and Drinking Places

Transportation InformationContinued Economic Overview Information to follow:* Retail Leakage Opportunities (5 and 15 Mile Radius)* Arizona Profile 2010 Census* Area Development News (2014)

Lodging Demand 23-33

Market Segmentation

Lodging Demand Potential IndexSeasonality of Lodging DemandRate SensitivityFeeder Markets & Unaccommodated DemandEvents and AttractionsCommunity InterviewsBenefits and Challenges

Lodging Supply 34-58

Competitive Hotel PropertiesProjected Average Daily Room Rate & PositioningCompetitive Property Performance

Arizona Extended Stay Rate Survey - 2014STR Data (5 Year Trends)

Financial Projections 59-71

Development CostsProjections Year 1Projections Years 1-5Projected Break Even Results

Table of Contents:

* Geographic Location (Maps)


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Introduction

This Market Study report provides statistical support and highlighted narratives to support the

conclusions regarding the market area and its ability to support the proposed hotel. This reportshould be acceptable for external investing and/or lending purposes. Core Distinction GroupLLC will be available to answer any questions related to this Market Feasibility Study Report.

This report will present projections for stabilized hotel operation based upon current operatingperformance in the market area. Occupancy, Average Daily Room Rate, and Sales Revenueprojections for the hotel were based upon a detailed review of the field research data. Also,

recommendations as to the property type, suggested property size, brand affiliation, services, andamenities were included. These projections and recommendations were based upon the marketdemand research for the proposed facility.

This consultant from Core Distinction Group LLC met with representatives of the community

and the surrounding area to gather information pertinent to the proposed hotel development.Comprehensive research was performed and reviewed regarding the community's economicindicators, competitive lodging supply, and lodging demand generators. CDG performed fieldresearch to determine the relationship between the community and proposed facility's lodgingsupply competitors and its lodging demand generators. Economic indicators were studied todetermine the stability and future growth potential of the general market. The research wasconducted as a macro and micro market analysis of the Maricopa area and the areas immediatelysurrounding the proposed hotel to determine their viability to support the proposed hotel.

Core Distinction Group LLC (CDG) has been engaged to provide this Comprehensive MarketFeasibility Study Report of the City of Maricopa, Arizona market area. This Market Studyprovides an overview of information concerning the market area and the factors that would affect

the possible development of a hotel facility in this community. This document is written in aformat that highlights key information and offers a preliminary indication of this market's ability tosupport the proposed hotel development.

The following Comprehensive Market Feasibility Study Report will review the proposeddevelopment of a hotel in Maricopa, AZ.

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Some special features may be required to attract identified target markets.

Executive Summary

The Property Typerecommended for the proposed hotel is an upscale extended stay hotel. This wouldreflect the research performed in the Community Overview Market Study. Also, this type of hotel wouldallow the property to be positioned properly at the subject site and would best match the demographics of

the competitive set and future Lodging Demand market in the area. It is anticipated that a new, upscale

extended stay branded hotel would capture displaced Lodging Demand currently staying in marketssurrounding Maricopa, AZ. Additionally, the newness of the hotel should be well received in themarketplace. Its location will be ideal to serve Maricopa and regional markets. This type of hotel wouldalso be capable of adjusting rates to best fit the demand in the market and the seasonality of the area.

The property sizeof this upscale extended stay hotel was researched to be 125-150 guestrooms in this

preliminary Market Feasibility Study. This would position it to be equal to the average room size of thehotels in the competitive set in Chandler. The size would assist the property in achieving the Occupancyprojections listed in this report. It is not advisable to over-build in this market at this time. Expansion ofthe hotel in future years could be considered as the market's Lodging Demand grows. Adjusting the roomcount will modify Occupancy Performance.

Rate positioning, as previously stated, rate competition for an upscale extended stay branded hotel in thismarket will be present throughout the year. This rate competition will be dictated by the rate structure of

the hotels in the surrounding regional area. With proper rate positioning the hotel should achieve a yieldto the immediate market of 150% (Weekday) and the overall region of 90%-100% which is average andwould assist in mitigating any rate sensitivity. The developed hotel in this market should mirror the ratesof the branded hotels in Chandler or within $10. Negotiated rates with local businesses or demandgenerators may be discounted and could drive ADR down dependent on rooms allotted to each account.In this region, two major accounts identifying extended stay need are present with a minimum potential of5,000-10,000 guestroom nights annually. That said, negotiated rates with these businesses for 7+, 14+, and

30+ stays will impact average daily rate (ADR) as a whole for the hotel development. Rate strategies for anextended stay hotel would tier down for each level of extended stay time frame. Example: 7+ rates wouldbe negotiated from $129; 14+ rates would be negotiated from $119; and 30+ $109 or less. These are onlyexamples, these rate structures are typically negotiated through national RFPs with each corporation in thearea and fluctuate based on total room nights consumed.

Property features, amenities, and services of the hotel should satisfy the market it is attempting toattract. Features and amenities required by the brand chosen for the proposed hotel should include:

* Fitness Center recommended to meet the needs of today's traveler

* Adequate Parking for both commercial and recreational vehicles due to market demand generators.

* Bar/Lounge/Restaurant

* Extended Stay Guestrooms for long term market demand

* Guestrooms offering full kitchens for long term market demand

* Guest Laundry Facilities recommended to meet the needs of long term stay guests

* Complimentary Breakfast to meet the needs of today's traveler

* Evening Social or Evening Restaurant Option to meet the demand of the extended stay client in the market* Japanese and German Extended Stay Clientele indicating need for menu options appealing to these groups

* Outdoor Recreation Area inclusive of outdoor cooking facilities

* Outdoor Pool and Spa

* Meeting Room for 50-100 people

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The recommended Sleeping Room Configurationshould be compatible with the overall MarketSegmentation of the area. Since the property's demand appears to be corporate long term stay, the

property should offer a selection of King bedded rooms at 40% with a slightly higher percentage of roomsavailable for double occupancy for shared guestroom need.

Brand Affiliationshould be considered for this hotel to enhance its marketability. The brand should

position the hotel well in this market. It should be competitive with the Market Segments identified for thehotel. An upscale extended stay hotel brand should be pursued. Potential impact issues should beaddressed with pursuing a brand affiliation although these factors do not seem to be relevant in thismarket. A brand should be successful in Maricopa since this will be the only branded hotel in the market.

The Opening Datefor the hotel should be considered a priority as demand generated by the corporatesegment in the market is aggressive; delaying opening could result in reduced opportunities to capitalize on

current demand generators. Ideally, opening the hotel in late spring 2015 to capture the maximum revenuemonths of extended stay demand indicated.

Economic Impact Potential: There are multiple economic impacts of building and developing a newhotel in a community. Some direct impact drivers include projected hotel revenue including all rooms'revenues, meeting room revenue, as well as vending/bar revenue. Additionally, payroll paid out toemployees hired at the hotel. On average, this size property will create 20-25 full time jobs, part-timeemployment varies by hotel need and hiring practices. Fiscal impact referring to all taxes collected fromthe development and operations of the new hotel. Taxes include all sales taxes collected on hotel revenue,as well as all payroll related taxes collected from full-time hotel employees and temporary constructionworkers. Local governments will also collect new property taxes from the operation of the hotel. IndirectImpact includes all jobs and income generated by businesses that supply goods and services to the hotel. A

few examples of businesses that will indirectly benefit from the development of a hotel include suppliers of

rooms' related goods (housekeeping supplies, room amenities, etc.), telecommunication vendors (internet,cable, etc.), utility companies, food and beverage suppliers, and other hotel related vendors.

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Maricopa, AZ (Snapshot)

Maricopa, AZ at a Glance (Pinal County):

Maricopa offers residents and businesses the experience of a small-town atmosphere within a shortdistance to two major metropolitan areas. The City of Maricopa became Arizonas 88th municipality when

it incorporated in October 2003. Since that time, it has been Arizonas fastest growing community,transforming from a quiet town of under 5,000 residents to a bustling city of more than 46,000. Theaverage household income in Maricopa is $75,000 and is among the highest in the State of Arizona. Thelocal population is also highly educated with 46% of adults possessing a bachelors or advanced degree, and89% having at least some college education.

2013 Population Estimate:46,140 (Arizona Department of Administration)

Growth and Development:

Copper Sky Recreation Complex: The grand opening celebration for the Citys Copper Sky RecreationComplex was held in March 2014. Comprised of the 52,000 square foot Copper SkyMultigenerational/Aquatics Center and 98-acre Copper Sky Regional Park, it is the destination for sports,

fitness, recreation and leisure activities in Maricopa. It also hosts regional athletic tournaments andcommunity events. With a projected 500,000 visitors in its first year, it has become the center of activity inMaricopa. To take advantage of activity at the complex, 18 acres of highway frontage has been reserved forfuture commercial development. The City is currently seeking a development partner. Central Arizona College Maricopa Campus: Central Arizona College (CAC) opened its new MaricopaCampus in January 2013. The first phase of the Maricopa Campus includes more than 76,000 gross squarefeet. At full build-out, the 217-acre campus is planned to accommodate more than 20,000 students andhave a gross square footage of 720,000 feet. Banner Health: The Banner Health Center is the first major medical facility in Maricopa and opened in

May 2012. Made possible through a public-private partnership between the City of Maricopa and BannerHealth, the 40,000 square-foot facility provides primary and specialty medical care. Banner has plans toexpand the center and its services as local demand requires. Dignity Health Arizona: The healthcare provider opened an urgent care center in Maricopa in 2013. Thecompany also purchased 18.6 acres in Maricopa with long-term plans for a 34,000 square foot, free-standing emergency hospital. Maricopa Station: This project is located on a 2.5-acre site at the northeast corner of John Wayne

Parkway and Smith-Enke Road and broke ground in October 2014. The plans for Maricopa Stationinclude a 7,800 square foot multi-tenant shops building and 3,300 square foot drive through restaurant. Estrella Gin Business Park: The Estrella Gin Business Park site is a 50+ acre, city-owned parcel locatedjust west of the intersection of Edison Road and Roosevelt Avenue. Planned to be developed through a

public-private partnership, it is the Citys leading priority to spur local economic growth. The goal for thebusiness park is to provide employment opportunities for local residents by allowing expanding businessesto remain in the community and facilitating the relocation of industry to Maricopa. Approximately 40 acres

is available for commercial development, anticipated to include a mix of industrial, office and flex space.The property is currently being marketed for lease and build-to-suit opportunities.

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Additional Demand Generators:

Major employers in the market: Maricopa Unified School District, Walmart, City of Maricopa,Volkswagen Proving Grounds, Nissan Proving Grounds, Pinal Feeding Company, Southern Dunes GolfClub, The Duke at Rancho El Dorado Golf Club, USDA Arid-Land Agricultural Research Center,University of Arizona Maricopa Agricultural Center

USDA Arid-Land Agricultural Research Center: USDA opened its Arid-Land Agricultural Research

Center in Maricopa in 2006. The 97,000 square foot research center houses 22 research scientists andnearly 40 research and administrative support personnel. UA Maricopa Agricultural Center: The mission of the more than 40 person staff at the University ofArizonas Maricopa Agricultural Center is to develop, deliver, and service the best integrated agriculturaltechnologies for all problems faced by Arizona consumers and producers. Volkswagen and Nissan operate their North American proving grounds in Maricopa where they put

vehicles to the test under extreme heat and sun conditions. In addition to the year-round staff at theproving grounds, a large number of engineers and race teams visit throughout the year. Maricopa is home to two golf courses Southern Dunes Golf Club and The Duke at Rancho El Dorado.Southern Dunes golf course has been named one of Arizonas top five courses and hosts US Openqualifying rounds each year. The Duke at Rancho El Dorado has been recognized as one of the top five

intermediate priced courses in Arizona, and the most player friendly course in the Phoenix area.

*For more information on the lodging demand generated by each of these facilities, please see the Community Interviews section .

Development Incentives:

Fast Track Permitting: Recognizing the need for businesses to be able to relocate and expand rapidly andefficiently, the City offers a Fast Track Permitting Program for qualifying projects. The City is committedto providing a business-friendly environment and is continuously looking to further streamline and simplifyits governmental permitting process. Additional Depreciation: To encourage new capital investment, Arizona provides accelerated

depreciation schedules for commercial personal property. Depreciation schedules for most equipmentclasses provide for depreciation down to 2.5% of original value, thus virtually eliminating the tax liability. Development Agreements: These agreements generally give some type of benefit to the developer, suchas a repayment for public infrastructure improvements through sales tax rebates. Arizona municipalities arerestricted to providing only tax incentives consisting of reimbursements for public infrastructure and maynot exceed or otherwise be disproportionate to the capital development costs or jobs created through theprojects. The City of Maricopa has, in the past, entered into development agreements and is willing to

explore this option with any business bringing a high level of economic benefit to the community.

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General Market Location

General Market Overview

Maricopa, AZ is located in northwest Pinal County and is surrounded by several smaller communitieswithin short driving distance. These cities offer a variety of local support for retail, dining options, andcommunity. Nearest city with pop. 200,000+: Chandler, AZ (25.0 miles, pop. 246,197). Nearest citywith pop. 400,000+: Mesa, AZ (35.2 miles, pop. 450,310). Nearest city with pop. 1,000,000+: Phoenix,AZ (34.6 miles, pop. 1,485,751).

The general market for this hotel is Maricopa, Arizona. However, this market is broader than just

Maricopa and includes areas within Pinal County.

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Source: US Census Bureau

Economic OverviewThis section describes the preliminary general economic conditions observed in this area through various research sources.

With an estimated 46, 140 residents as of 2013, Maricopa is the second most populous incorporated city in

Pinal County and eighteenth most populous in Arizona. Maricopa forms part of the Phoenix metropolitanarea. Pinal County is located in the central part of Arizona. As of the 2010 census, the population was375,770, making it the third-most populous county in Arizona.

Population

Pinal County 2010 Census Data (Including 2013)

Population, 2013 estimate 389,350

Population, 2010 (April 1) estimates base 375,770

Female persons, percent, 2013 47.8%

White alone, percent, 2013 (a) 83.3%

Black or African American alone, percent, 2013 (a) 4.8%

American Indian and Alaska Native alone, percent, 2013 (a) 6.8%

Asian alone, percent, 2013 (a) 1.9%

Native Hawaiian and Other Pacific Islander alone, percent, 2013 (a)

Population, percent change, April 1, 2010 to July 1, 2013 3.60%

Population, 2010 375,770

Persons under 5 years, percent, 2013 6.4%

Persons under 18 years, percent, 2013 25.0%

Persons 65 years and over, percent, 2013 17.0%

0.4%

Two or More Races, percent, 2013 2.8%

Hispanic or Latino, percent, 2013 (b) 29.0%

White alone, not Hispanic or Latino, percent, 2013 58.2%

Living in same house 1 year & over, percent, 2008-2012 79.6%

Foreign born persons, percent, 2008-2012 10.1%

Language other than English spoken at home, pct. age 5+, 2008-2012 22.6%

High school graduate or higher, percent of persons age 25+, 2008-2012 84.2%Bachelor's degree or higher, percent of persons age 25+, 2008-2012 18.3%

Mean travel time to work (minutes), workers age 16+, 2008-2012 31.3

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Source: US Census Bureau, Census 2010. Esri Forecasts for 2014/2019

Effective Buying IncomeHouseholds by Income 2014 Est. 2019

Median Household Income $55,684 $63,612

Average Household Income $67,097 $76,603


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Source: 2014 Dun & Bradstreet, Inc. Esri Total Residential Population forecasts for 2014.

5 MileTotal Employees: 9,236

Workforce/Employment Distribution

Arts, Entertainment & Recreation

Transportation & Warehousing

Finance & Insurance

General Merchandise Stores

1.0%

7.9%

1.4%

2.9%

3.3%

1.5%

Educational Services

Health Care & Social Assistance

5.6%

Employment leaders within Maricopa area include: Public Administration (38.7%); Arts, Entertainment,and Recreation (8.2%); Retail Trade (7.9%); Administration/Support/Waste Management and Remediation(6.9%); and Professional/Scientific and Tech Services (5.6%)

1.9%

2.7%

2.2%

5.0%

5.1%

8.2%

3.1%

5.2%

6.9%

Total Residential Population: 44,398

by NAICS Codes Percent

Data for all businesses in area of Maricopa within:

Professional, Scientific & Tech Services

Administrative & Support & Waste Management & Remediation

1.0%

2.2%

38.7%

3.1%

Public Administration

Accommodation & Food Services

Food Services & Drinking Places

Other Services (except Public Administration)

Agriculture, Forestry, Fishing & Hunting

Securities, Commodity Contracts & Other Financial

Real Estate, Rental & Leasing 1.9%

Central Bank/Credit Intermediation & Related Activities

Food & Beverage Stores

Construction

Manufacturing

Wholesale Trade

Retail Trade

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Note: Areas marked with an asterisk (*) are outside of the City limits but within the City's planning area

Unemployment

Fry's Food Store

Volkswagen Proving Grounds

Ak-Chin Farms

Basha's

Maricopa, AZ Major Employers

Employees (FT)

760

650

Wage Pressures

Since 2005 the unemployment rate in Maricopa, Arizona has ranged from 4.0% in May 2007 to 14.8% inJuly 2009. The current unemployment rate for Maricopa is 7.0% in August 2014.

Labor SupplyThe labor supply is felt to be above average to support a hotel development. The hotel could drawemployment from the broad geographic area of Pinal County or entice commuting community members to

stay closer to home for work rather than commuting to cities outside Maricopa, AZ.

Legacy Traditional School 76

300283

200

200

89

85

Company Name

Harrah's AK-Chin Casino Resort

Maricopa Unified School District

WalmartMaricopa City Office

Electrical District 3* 57

Univ. of Arizona Maricopa Agricultural Center* 48

Duke at Rancho El Dorado 47

Scott's Miracle Gro 39

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Pinal Feeding Co Inc.

Sequoia Pathway Academy

USDA Arid-Land Agricultural Research Center* 69

Southern Dunes Golf Club* 65

Ace Hardware 36

Wage pressures were not reported to be a concern in attracting Service employees for a hotel. Wagecompetition was indicated as average.

Banner Health Center 34

Arizona Castings Inc.* 58

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Air Transportation

Continued Economic Overview Information to follow:

* Retail Leakage Opportunities (5 and 15 Mile Radius)

* Arizona Profile 2010 Census* Area Development News (2014)

Eating and Drinking Places

State Route 287

State Route 347

State Route 587 State Route 177

State Route 84

State Route 79

Interstate 10

State Route 77

U.S. Route 60

The nearest major airport is Phoenix Sky Harbor International Airport (PHX / KPHX). This airport has

international and domestic flights from Phoenix, Arizona and is 34 miles from the center of Maricopa, AZ.Another major airport is Phoenix-Mesa Gateway Airport (AZA / KIWA), which has domestic flights from

Mesa, Arizona and is 36 miles from Maricopa, AZ.

State Route 87 State Route 387

Major Highways Pinal County

Interstate 8

Amtrak- Maricopa is one of 17 Amtrak stations in Arizona. The Maricopa station, serviced by the SunsetLimited and Texas Eagle routes, is the closest train station to Phoenix (30 miles south). The Station Building(with waiting room) is located at 19427 North John Wayne Parkway, Maricopa, AZ 85139.

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Yogurt Jungle

Firehouse Subs

Dominos Pizza

Brooklyn Boys Italian

Great Wall

Headquarters Caf

Helens Kitchen

Barros Pizza

Pizza Hut

Plaza Bonita Mexican Restaurant

Say Sushi

Sonic Drive-In

Starbucks Coffee (coming soon)

Subway

Sunrise Caf

Taco Bell

Tacos N More

Arbys

Peascos Mexican Restaurant

Papa Murphys Pizza

Panda Express

Oshays

Native New Yorker

McDonaldsLong John Silvers

Little Caesars

KFC

Jack in the Box

Honeycutt Coffee Company

Cilantros Mexican Cocina

Chipotle (coming soon)Carls Jr.

Bead & Berry Coffee House

Alibertos

Papa Johns Pizza


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Source: Esri and Dun & Bradstreet 2013

Definition of 'Leakage' A situation in which capital, or income, exits an economy, or system, rather thanremains within it. In economics, leakage refers to outflow from a circular flow of income model. In a twosector model, all individual income is sent back to employers when goods and services are purchased, andback to employees through wages and dividends. Leakage occurs when income is taken out through taxes,savings and imports. In retail, leakage refers to consumers who spend money outside of the local market.Leakage may also refer to the release of private information prior to it being released to the public.

Data Note:Supply (retail sales) estimates sales to consumers by establishments. Sales to businesses are

excluded. Demand (retail potential) estimates the expected amount spent by consumers at retailestablishments. Supply and demand estimates are in current dollars. The Leakage/Surplus Factor presents asnapshot of retail opportunity. This is a measure of the relationship between supply and demand thatranges from +100 (total leakage) to -100 (total surplus). A positive value represents 'leakage' of retailopportunity outside the trade area. A negative value represents a surplus of retail sales, a market wherecustomers are drawn in from outside the trade area. The Retail Gap represents the difference betweenRetail Potential and Retail Sales.

Retail Market Potential5 and 15 Mile Radius of Maricopa, AZ

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2013 Population

2013 Households

2013 Median Disposable Income

2013 Per Capita Income

Industry SummaryDemand

(Retail Potential)

Supply

(Retail Sales)

Retail Gap Leakage/Surplus

Factor

Total Retail Trade and Food & Drink $331,687,227 $52,974,307 $278,712,920 72.5Total Retail Trade $299,140,214 $47,339,025 $251,801,189 72.7

Total Food & Drink $32,547,013 $5,635,282 $26,911,731 70.5

Industry GroupDemand

(Retail Potential)

Supply

(Retail Sales)


Factor

General Merchandise Stores $57,965,704 $76,763 $57,888,941 99.7

Motor Vehicle & Parts Dealers $58,343,762 $4,391,235 $53,952,527 86.0

Automobile Dealers $50,139,402 $1,140,603 $48,998,799 95.6

Other General Merchandise Stores $37,867,706 $0 $37,867,706 100.0

Gasoline Stations $30,738,234 $1,216,049 $29,522,185 92.4

Food Services & Drinking Places $32,547,013 $5,635,282 $26,911,731 70.5

Food & Beverage Stores $50,720,069 $24,142,130 $26,577,939 35.5

Grocery Stores $48,438,995 $23,802,715 $24,636,280 34.1Department Stores Excluding Leased Depts. $20,097,998 $76,763 $20,021,235 99.2

Health & Personal Care Stores $20,062,206 $1,928,480 $18,133,726 82.5

Clothing & Clothing Accessories Stores $17,559,402 $1,935,204 $15,624,198 80.1

Nonstore Retailers $21,485,622 $6,067,766 $15,417,856 56.0

Electronic Shopping & Mail-Order Houses $18,080,954 $4,112,374 $13,968,580 62.9

Limited-Service Eating Places $15,258,202 $1,560,714 $13,697,488 81.4

Full-Service Restaurants $15,115,535 $3,507,028 $11,608,507 62.3

Clothing Stores $12,479,312 $1,769,044 $10,710,268 75.2

Miscellaneous Store Retailers $10,054,612 $1,519,881 $8,534,731 73.7

Electronics & Appliance Stores $9,081,341 $1,307,306 $7,774,035 74.8

Bldg Materials, Garden Equip. & Supply Stores $9,260,770 $1,826,215 $7,434,555 67.1

Bldg Material & Supplies Dealers $8,539,905 $1,826,215 $6,713,690 64.8

Sporting Goods, Hobby, Book & Music Stores $7,115,982 $931,163 $6,184,819 76.9

Sporting Goods/Hobby/Musical Instr Stores $5,731,823 $554,086 $5,177,737 82.4

Furniture & Home Furnishings Stores $6,752,510 $1,996,832 $4,755,678 54.4

Other Miscellaneous Store Retailers $5,168,641 $1,148,367 $4,020,274 63.6

Office Supplies, Stationery & Gift Stores $3,033,231 $296,058 $2,737,173 82.2

Home Furnishings Stores $2,700,510 $99,741 $2,600,769 92.9

Shoe Stores $2,508,279 $0 $2,508,279 100.0

Other Motor Vehicle Dealers $3,077,822 $600,266 $2,477,556 67

Auto Parts, Accessories & Tire Stores $5,126,538 $2,650,366 $2,476,172 31.8

Jewelry, Luggage & Leather Goods Stores $2,571,811 $166,160 $2,405,651 87.9

Furniture Stores $4,051,999 $1,897,091 $2,154,908 36.2

Direct Selling Establishments $2,338,375 $927,152 $1,411,223 43.2

Used Merchandise Stores $1,428,857 $75,456 $1,353,401 90.0Special Food Services $1,213,222 $0 $1,213,222 100.0

Beer, Wine & Liquor Stores $1,158,732 $0 $1,158,732 100.0

Book, Periodical & Music Stores $1,384,159 $377,077 $1,007,082 57.2

Specialty Food Stores $1,122,341 $339,415 $782,926 53.6

Lawn & Garden Equip & Supply Stores $720,866 $0 $720,866 100.0

Florists $423,883 $0 $423,883 100.0

Drinking Places - Alcoholic Beverages $960,055 $567,540 $392,515 25.7

Vending Machine Operators $1,066,294 $1,028,240 $38,054 1.8

Summary Demographics (5 Mile Radius)

$23,140

$49,849

15,375

46,674

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2013 Population

2013 Households

2013 Median Disposable Income

2013 Per Capita Income

Industry SummaryDemand

(Retail Potential)

Supply

(Retail Sales)


Factor

Total Retail Trade and Food & Drink $725,763,106 $188,429,778 $537,333,328 58.8Total Retail Trade $655,594,950 $152,202,852 $503,392,098 62.3

Total Food & Drink $70,168,155 $36,226,927 $33,941,228 31.9

Industry GroupDemand

(Retail Potential)

Supply

(Retail Sales)


Factor

General Merchandise Stores $125,156,628 $88,135 $125,068,493 99.9

Motor Vehicle & Parts Dealers $126,567,874 $18,381,778 $108,186,096 74.6

Automobile Dealers $108,352,653 $7,746,839 $100,605,814 86.7

Other General Merchandise Stores $82,152,849 $0 $82,152,849 100.0

Food & Beverage Stores $110,613,161 $56,522,115 $54,091,046 32.4

Grocery Stores $105,629,676 $52,341,488 $53,288,188 33.7

Department Stores Excluding Leased Depts. $43,003,778 $88,135 $42,915,643 99.6

Health & Personal Care Stores $46,148,577 $4,691,331 $41,457,246 81.5Nonstore Retailers $50,610,171 $11,236,213 $39,373,958 63.7

Electronic Shopping & Mail-Order Houses $42,533,816 $8,192,033 $34,341,783 67.7

Food Services & Drinking Places $70,168,155 $36,226,927 $33,941,228 31.9

Clothing & Clothing Accessories Stores $37,433,882 $6,114,407 $31,319,475 71.9

Full-Service Restaurants $32,674,353 $7,533,456 $25,140,897 62.5

Gasoline Stations $65,970,543 $40,941,405 $25,029,138 23.4

Clothing Stores $26,488,471 $5,154,327 $21,334,144 67.4

Miscellaneous Store Retailers $22,377,110 $3,442,191 $18,934,919 73.3

Electronics & Appliance Stores $19,785,012 $1,611,153 $18,173,859 84.9

Bldg Materials, Garden Equip. & Supply Stores $21,574,330 $3,407,708 $18,166,622 72.7

Bldg Material & Supplies Dealers $19,844,930 $3,407,708 $16,437,222 70.7

Sporting Goods, Hobby, Book & Music Stores $14,761,387 $2,751,043 $12,010,344 68.6

Furniture & Home Furnishings Stores $14,596,276 $3,015,372 $11,580,904 65.8

Sporting Goods/Hobby/Musical Instr Stores $11,938,254 $2,113,325 $9,824,929 69.9

Other Miscellaneous Store Retailers $11,589,296 $2,815,990 $8,773,306 60.9

Auto Parts, Accessories & Tire Stores $11,343,216 $4,336,649 $7,006,567 44.7

Office Supplies, Stationery & Gift Stores $6,728,353 $523,900 $6,204,453 85.6

Furniture Stores $8,613,677 $2,755,061 $5,858,616 51.5

Home Furnishings Stores $5,982,599 $260,311 $5,722,288 91.7

Limited-Service Eating Places $33,062,355 $27,757,323 $5,305,032 8.7

Shoe Stores $5,277,907 $0 $5,277,907 100.0

Jewelry, Luggage & Leather Goods Stores $5,667,504 $960,080 $4,707,424 71.0

Direct Selling Establishments $5,759,469 $1,525,659 $4,233,810 58.1

Used Merchandise Stores $3,020,137 $102,301 $2,917,836 93.4

Book, Periodical & Music Stores $2,823,132 $637,719 $2,185,413 63.1Special Food Services $2,417,620 $333,805 $2,083,815 75.7

Lawn & Garden Equip & Supply Stores $1,729,399 $0 $1,729,399 100.0

Drinking Places - Alcoholic Beverages $2,013,827 $602,342 $1,411,485 54.0

Florists $1,039,324 $0 $1,039,324 100.0

Vending Machine Operators $2,316,886 $1,518,522 $798,364 20.8

Beer, Wine & Liquor Stores $2,544,219 $1,823,242 $720,977 16.5

Other Motor Vehicle Dealers $6,872,005 $6,298,290 $573,715 4

Specialty Food Stores $2,439,266 $2,357,384 $81,882 1.7

Summary Demographics (15 Mile Radius)

$24,215

$43,735

31,135

85,307

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Source: City of Maricopa November 2014

The City of Maricopa has issued a Request for Statement of Qualifications (RSOQ) seeking a

qualified development team that has the experience, financial strength and capacity to transform itsCopper Sky Commercial Site into a high-quality mixed-use destination that complements theCopper Sky Recreation Complex and delivers significant social and economic impact to thecommunity. The approximately 18-acre city-owned site offers great visibility and more than 1,100feet of frontage on SR 347, Maricopa's main retail corridor and north-south connection to I-10 andI-8. The adjacent 120-acre Copper Sky Recreation Complex opened in March 2014 and is a year-round destination for sports, fitness, recreation, and leisure activities. With a projected 500,000visitors in its first year, it has quickly become the center of activity in Maricopa.

City Issues RSOQ Seeking Development Partner forCopper Sky Commercial Site

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Source: City of Maricopa October 2014

Vintage Partners and the City of Maricopa hosted a groundbreaking celebration for MaricopaStation this morning. Located at the northeast corner of John Wayne Parkway and Smith-EnkeRoad, plans for this exciting new project include a 7,800 square foot multi-tenant shops buildings

and 3,300 square foot drive through restaurant.

Walter Crutchfield, Partner at Vintage Partners, kicked off the event by acknowledging theexcitement within the community as vehicles drove by honking. Monty Ortman, longtimedeveloper and fellow Partner at Vintage Partners, reminisced about his earliest experiencesdeveloping land in Maricopa more than 29 years ago and said he looks forward to another 29successful years. Mayor Christian Price spoke about the complexity of commercial developmentand the many partnerships that must come together to get a project off the ground. VintagePartners and City of Maricopa representatives then gathered with shovels and officially broke

ground on the project.

Maricopa Station Development Breaks Ground

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Source: City of Maricopa May 2014

Maricopa Works to Attract Retailers and Developersat ICSC 2014 RECon

Recently, a group of City of Maricopa representatives consisting of Vice Mayor Edward Farrell,

Councilmember Marvin L. Brown, City Manager Gregory Rose and Economic DevelopmentSpecialist Denyse Airheart traveled to the International Council of Shopping Centers (ICSC) 2014RECon convention in Las Vegas. RECon is the worlds largest retail real estate industry event,attracting more than 33,000 retailers, developers, brokers and exhibitors.

The Citys participation at RECon is a key component of its strategy to aggressively target andrecruit businesses. At the convention, City leadership and staff worked to sell Maricopa as adestination for retailers to establish or expand their operations. The group met with more thanthirty retailers and real estate developers to discuss a range of opportunities, from establishing a

presence in Maricopa to identifying the best locations within the city.

Retailers and developers are increasingly looking at Maricopa as a location for business, and wemust actively sell the benefits of locating in Maricopa, said Vice Mayor Farrell. Investors seekpopulation growth, population within a trade area, median household income and rooftop growthnumbers when making a decision to enter a new market.

The conference allows us to tout the Maricopa story and educate nationally branded retailers onthe citys location, residents and recent projects, said City Manager Rose. Within the past fewyears, Maricopa has seen the arrival of Banner Health, Dignity Health, Central Arizona CollegesMaricopa Campus, the new City Hall building and City Center complex, and most recently theCopper Sky Recreation Complex.

Councilmember Brown believes Maricopa is poised to enter a new era of growth that will have aprofound impact on the citys future. Maricopa is on the verge of many exciting changes that will

enhance quality of life, draw new residents, and attract investment from retailers and developerslooking to take part in our citys growth.

For questions, contact the City of Maricopa Economic Development Department at (520) 316-6990.

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20%

50%

10%

20%

100%

Market Segmentation Projection for Maricopa, AZ are as follows:

Negotiated ESSOC

Source: Core Distinction Group LLC

Lodging Demand

Identifying which segments have the potential to produce 80 percent of a hotelsrevenue is imperative to success of developing these segments to ensure your hotel isachieving fair market share. This starts with understanding the market in which anygiven hotel operates. A fundamental understanding of the competitive environment,key economic drivers and historical trends is essential to understanding which market

segments are relevant. The two main market segments are Transient and Group.However, these can be further segmented depending on each hotels individualtrading area and feeder markets. Examples of these are as follow: TransientSegments: Rack, Corporate, Government and Seniors etc. Group Segments:Corporate, Association and Sports etc. At this time, the proposed hotel shouldexperience the same Market Segmentation as the overall market. The proposed hotelin Maricopa would be the newest hotel in the immediate regional area. The proposedhotel would be positioned to serve a wide variety of Lodging Demand. Also, as anupscale extended stay hotel, it would be able to flex rates and services to

accommodate a full range of Lodging Demand identified for this market.

This section of the report is a brief overview of the Lodging Demand highlights identified in this market.

Negotiated

Transient Leisure

Transient Group

TOTAL

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Company Parties, Awards Dinners, and Celebrations

Social/Leisure Markets

Regional Shopping

SMERF (Social, Military, Education, Religious, and Fraternal

)

T

T

Average

Above

AverageEvents & Festivals

Area Sites, Entertainment, and General Tourism

Outdoor Recreation

G

Average

T

T

Average

Area Recreation

T, E, G

T = Transient

E = Extended

G = Group

T, G, E

AverageAmateur/Youth Sports

As described in the above chart, the overall market potential appears to be aboveaverage and growing. Additionally, the development of a hotel in the city has thepotential to encourage new areas of growth in the market.

G

Corporate Above

Above

Average

T, G

T, E

Market Segmentation Profiles

Average

Above

Above

Above (Growing)

Above

Average

Above

Average

AgricultureT

Average

Utilities

Maricopa, AZDemand Potential

Insurance

T

T, E

Average

AverageAssociation Groups

T, G

Above

Distressed Social-Interim Housing

Average (Growing)

Below


G

Relocation-Real Estate

T

T, E

Average

Average

T

E, G

Association

Vendors & Suppliers to Local Market

Government

Health Care

Entertainment

Distribution

Above

AverageAverage

TReal Estate

Education

Meetings and Seminars

Training Groups

Above

Inventory and Auditing Companies

Highway Travelers T

Corporate/Commercial Markets

Below, Average, Above

Average

T, E

Average

Average

T, G, E

Manufacturing

Construction

T, E, G

T, E, G

T

T

T

TT

T, E

T, E, G

Professional Services

Transportation

Retail/Commercial

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Seasonality of Lodging Demand

January February March

3,875 3,500 3,875

65% 80% 85%2,519 2,800 3,294

119.00 129.00 129.00

$299,731 $361,200 $424,894

April May June

3,750 3,875 3,750

70% 65% 60%

2,625 2,519 2,250

119.00 109.00 109.00

$312,375 $274,544 $245,250

July August September

3,875 3,875 3,750

55% 55% 60%

2,131 2,131 2,250

99.00 99.00 109.00

$210,994 $210,994 $245,250

October November December TOTAL

3,875 3,750 3,875 45,625

65% 70% 60% 65.7%

2,519 2,625 2,325 29,988

109.00 109.00 109.00 $93.65$274,544 $286,125 $253,425 3,399,325Total Revenue

It should be noted that the hotels used in this seasonality analysis are all from outsideof Maricopa, in the neighboring community of Chandler. The market's Seasonality ofLodging Demand patterns appear above average. Traditional higher occupancy

nights during the week are Tuesdays and Wednesdays. On weekends, occupancy istraditionally higher on Saturdays, yet within this comp set Fridays and Saturdays arefairly even for demand. The weakest nightly occupancy is on Sundays. This patternshould be representative of what we could expect at this location in Maricopa as well.Capitalizing on extended stay 7+ business will increase overall weekend results.

Average Daily Rate

Total Occ. Rooms

3rd Quarter (July-Sept)

Average Daily Rate

Total Occ. Rooms


Lodging Occupancy %

Total Revenue

Average Daily Rate

Lodging Rooms Available

Lodging Occupancy %

Total Occ. Rooms


4th Quarter (Oct-Dec)


Total Revenue

Total Revenue

A Seasonality of Lodging Demand analysis was performed. This demand analysis is based ongeneral observations of the surrounding market area and the overall Arizona market area.

Lodging Occupancy %

Lodging Occupancy %

1st Quarter (Jan-Mar)

Average Daily Rate

Total Occ. Rooms

2nd Quarter (Apr-June)


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Rate Sensitivity

Feeder Markets

Unaccommodated Lodging Demand

December:Merry Copa Holiday Festival - December 6, 2014; Holiday Homes on Parade - December 8

thru 18, 2014

Misc.: 2nd Saturday Market - Second Saturday of Every Month - October thru May

June: Movies in the Park - June 14, 2014

July: Great American BBQ - July 4, 2014

August:

September: Concerts in the Park - September 5, 12, 19 & 26, 2014

October:Stagecoach Days October 11 thru 26, 2014; 2nd Annual Mud Run - October 18, 2104;

MHS Hispanic Heritage Night - October 21, 2014; 4th Annual Historical Society Golf

Tournament - October 25, 2014; Mysterious Mansion Mayhem - October 29, 2014

Events and Attractions(The events/attractions listed have the potential to be demand generators for leisure transient business)

This market should have low to average rate sensitivity. Traditionally, the social/leisure market willbe more rate sensitive than the corporate/commercial markets. This pattern should be representedin the Maricopa market. There may be additional ADR (Average Daily Rate) opportunities as wellduring peak demand periods when festivals and city events bring more travelers to the market

creating demand to force ADRs higher than average. Traditionally, social/leisure/group rates willbe discounted on weekends with special rates and packages for 10 or more guestrooms utilized. Atthis location a group may also be considered as 5 or more guestrooms utilized for a period of time.

Unaccommodated Lodging Demand may be occurring in this market primarily due to the demand in

the market versus lack of lodging available in the community. A secondary definition ofUnaccommodated Lodging Demand is demand by consumers desiring to stay in other markets buthaving to stay in Maricopa or other surrounding markets due to lack of Lodging Supply in theprimary market desired. This type of Unaccommodated Lodging Demand does not currently appearto occur in Maricopa, primarily due to the number of lodging facilities in the Phoenix Metro Area.Yet, some of the smaller communities surrounding Maricopa could affect this Lodging Demandpotential as they require lodging accommodation for their visitors as well.

The Feeder Markets for this hotel will be regional and local. Social/Leisure feeder markets tend to

be generated from the region. Typical Corporate/Commercial market segments tend to be morenational or international yet this market may not see this type of business in the immediate future.

Maricopa Events (2014)January:

February:

March: Salsa Festival - March 29, 2014

April:

May: Movies in the Park - May 3, 17 & 31, 2014

November: Art on the Veranda - November 8, 2014

Fishing Derby - April 5, 2014; Maricopa Easter Egg Hunt - April 19, 2014; Easter Brunch

and Bowl - April 20, 2014; Concert in the Park - April 25, 2014

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TheSonoran Desert National Monumentcontains more than 487,000 acres of Sonoran Desertlandscape. The Sonoran Desert is the most biologically diverse of the North American deserts, andthe monument exemplifies this desert setting. The most striking aspect of the plant communitywithin the monument is the extensive saguaro cactus forest. The monument contains three distinctmountain ranges, the Maricopa, Sand Tank and Table Top Mountains, as well as the Booth andWhite Hills, all separated by wide valleys. The monument is also home to three congressionallydesignated wilderness areas, many significant archaeological and historic sites, and remnants of

several important historic trails.

Arizona Soaringrides are given over the beautiful Sierra Estrella Mountains where passengers canenjoy views of the undisturbed and natural desert environment. This area is also home to manyhawks and other soaring birds so it is an excellent opportunity to see them in their true element. All

of our flight staff are FAA certified flight instructors with many years of experience. Impromptuhands-on instruction is possible for those with flying aspirations. Your ride can be as thrilling or asrelaxing as you like and for the truly adventurous full-on aerobatic rides are also available.

Sprawling across more than 320 acres,Ak-Chin Southern Dunes Golf Clubprovides a welcoming,laid-back ambiance; a place where the world melts away and the game of golf becomes the focus.Amid uninhibited, 360-degree views of Arizonas magnificent desert expanses this world-class,Troon Golf-managed club offers impeccable course conditioning, unmatched playability andsuperlative customer service, thus ensuring an unparalleled round of sensational Southwestern golf.

The Copper Sky Regional Parkencompasses 98 acres, offering endless opportunities for fitness,fun and leisure. The park includes: A five-acre fishing lake stocked with bass, rainbow trout, catfish,bluegill and white amur; a special event amphitheater surrounded by 9 acres of lawn; two interactiveplaygrounds; six shaded ramadas with BBQ grills and picnic tables, plus one 5000 sq. ft. groupramada; A dog park with separate areas for active and timid dogs; eight multi-purpose sports fields(four are lighted fields); three lighted softball fields; one full-size lighted baseball field; two enclosed

batting cages with pitching mounds; two lighted tennis courts; a lighted skate plaza; two lightedbasketball courts; two lighted sand volleyball courts; two regulation horseshoe pits. More detail onCopper Sky to follow.

Pacana Parkis the City's first public park. Pacana Park spans more than 22 acres of land with apristine 2.25 acre lake that is home to various fish including catfish and blue gills.

The Duke at Rancho El DoradoNamed one of the top 20 courses to play in Arizona, The Dukeis a superb choice. With its inviting fairways, meticulous maintenance and exquisite cuisine, TheDuke is a model of perfection for the golfer who enjoys Resort golf and pristine accommodations.

The Him-Dak Eco Museumwas established to collect, analyze, preserve, protect, promote andteach various aspects of the Ak-Chin heritage, culture and communication between generations.Tribal crafts, exhibits and photographs of the Ak-Chin people are displayed. The Museum is

distinguished from a traditional museum, in that land and territory replace the museum building, andthe residents of the area take on the role of curator and public. This museum acts as an exhibit andstorage area that reflects both prehistoric and local items from families that are housed here.

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Community Interviews

In speaking with the Interim Resident Director at the University of Arizona Maricopa

Agricultural Center,he indicated they have groups in for meetings approximately 50-150 per year.

Currently they utilize lodging in Chandler due to proximity to Maricopa as well as negotiated rates.When asked if Maricopa would benefit from a newer branded hotel he indicated support as the city

currently does not have any lodging options and the casino hotel is often filled. Amenitiesrecommended included breakfast, pool, exercise facility, and a dining option.

In speaking with the Center Director at USDA Arid-Land Agriculture Research Center, heindicated they occasionally have overnight accommodation need approximately 50-100 per year formeetings. Currently they either utilize the Harrah's Ak Chin Casino Resort or hotels in SouthPhoenix/Chandler. When asked if Maricopa would benefit from a newer branded hotel he indicatedsupport as the city is large enough to sustain a hotel, they have limited apartment space in the

community, and a Wal-Mart. Amenities recommended included breakfast and meeting space possibly aHoliday Inn Express or LaQuinta type product would fit well.

In speaking with the Chief Operating Officer of the Maricopa Chamber of Commerce, sheindicated people come to their offices for information about the community, wedding business, andcasino overflow. Currently she recommends the local B&B, Harrah's Ak-Chin Casino Resort Hotel, andeven hotels in Chandler and Casa Grande. When asked if Maricopa would benefit from a newerbranded hotel she indicated support as it would benefit the entire community. Amenities recommendedincluded extended stay guestrooms and meeting space for 15-125 people. Additional demand indicated

included college as they do not currently have a dorm for students, Harrah's Casino overflow, NewRecreation Center, Dunes Golf Course, and local area events/festivals.

In speaking with a Council Member at the City of Maricopa,he indicated from time to time theyhave auditors in as well as business development groups coming into the city needing accommodations.

Currently they utilize the Harrah's Ak-Chin Casino Resort Hotel or extended stay hotels in Chandler.When asked if Maricopa would benefit from a newer branded hotel he indicated support as the onlyhotel nearby is Harrah's Ak-Chin Casino Resort, no hotels in Maricopa proper. Amenities

recommended included an exercise room and restaurant. Additional demand generators indicatedincluded New Recreation Center and Entertainment Complex.

In speaking with the General Manager of The Duke at Rancho El Dorado Golf Club, he indicatedthey have overnight accommodation requests during their season from December through Aprilspecifically as their facility is a destination golf course. Currently he recommends the nearest Harrah'sAk-Chin Casino Resort Hotel or hotels in Chandler. When asked if he felt Maricopa would benefit froma newer branded hotel he was in support as there are currently no hotels in the city. Amenities

recommended included pool, fitness center, upscale guestrooms, and extended stay suites. Sizerecommendation indicated from 100-250 guestrooms. Additionally, he indicated an opportunity for thegolf course to offer packages in conjunction with a new hotel to drive business.

In speaking with a Partner and Senior Project Manager at the Boyer Company,he indicated theyhave project managers coming in monthly approximately two a month who stay in Phoenix close to theairport at Marriott hotels. When asked if he felt Maricopa would benefit from a newer branded hotel he

indicated support as development would draw more people to the community in general. Amenitiesrecommended included pool and breakfast area, something similar to a Fairfield Inn.

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In speaking with a Council Member at the City of Maricopa, she indicated they have lobbyists orsite inspectors coming in 6-10 times per year that have overnight accommodation need. Currently theystay at the Harrah's Ak-Chin Casino Resort Hotel due to proximity to their offices. When asked ifMaricopa would benefit from a newer branded hotel she indicated strong support as there is a great needfor lodging in the area due to local businesses, families, the Multi-Gen Center and Regional Park, as well

as the Amtrak Train Route through town. Amenities recommended included fitness center, restaurant,and meeting space for up to 300 people.

In speaking with the General Manager at Volkswagen Arizona Proving Grounds, he indicated

they have a tremendous need for lodging from their facility. He indicated they have support andengineers coming in from mid-April through October approximately 2,000 people looking for lodgingwho typically stay from a few days up to 30+; the number of rooms needed between November throughMarch is less potentially 500 or less during that timeframe. Additionally, he indicated they are currentlyundergoing an expansion at their facility adding larger workshops and office space. This expansion isforecasting a 20%-30% growth at their facility, which may indicate more room nights needed. Currentlythey stay at the Sheraton Wild Horse Pass Resort and Spa or the Chandler area in general. They have

stayed in Casa Grande but many of their clients prefer staying in the Phoenix Metro area. Currently theyhave negotiated pricing at the Sheraton which also offers a hospitality room for socializing, largerefrigerators, and grilling available for outdoor cooking. They approached the local Harrah's Ak-ChinCasino Resort for a negotiated rate but were turned down due to needing rooms for the gamblers to stayin. When asked if he felt Maricopa would benefit from a newer branded hotel there was strong supportas the population of the city is growing, there may be a need for other families and events in town andthere is a strong need from their facilities. Amenities recommended included dinner options, pool,breakfast, exercise facilities, outdoor grilling, social space, and extended stay suites with full kitchens.

In speaking with the Chief Financial Officer at Central Arizona College, he indicated they have 5campuses, their main campus in Coolidge does have a dorm the others do not and may have need forstudents or their families from time to time. When asked if Maricopa would benefit from a newerbranded hotel he indicated support as the only nearby hotel is Harrah's Ak-Chin Casino Resort and they

are often full. Amenities recommended included extended stay lodging with monthly or weekly ratesoffered. Additionally, he indicated the college has purchased 208 acres of land for expansion and isutilizing 45 acres for phase one.

In speaking with the Assistant Dean of Workforce Development at Central Arizona College,she

did not indicate specific need for hotel accommodations at this time. However, when asked if Maricopawould benefit from a newer branded hotel she indicated support as the city does not currently have ahotel. Amenities recommended included extended stay guestrooms, pool, and meeting space.Additionally she offered her services in the hiring process as she teaches hotel revenue management andmay have some sources for workers at a new hotel in town.

In speaking with the Senior Advisor at the Maricopa Economic Development Alliance, sheindicated they have 6-10 board members per month in need of overnight accommodations as well as

residents and winter visitors who may have lodging needs. Currently they recommend hotels inChandler, Ahwatukee, and Tempe, as that is where a majority of the hotels are located. When asked ifMaricopa would benefit from a newer branded hotel she indicated strong support as this is a criticalpiece for their growing community. Amenities recommended business center, fitness center, andbreakfast. She indicated a Residence Inn may be a great hotel for the area.

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In speaking with the Vice Mayor at the City of Maricopa, he did not indicate specific room nightsfrom the city. However, when asked if he felt Maricopa would benefit from a newer branded hotel, hefelt strongly that two hotels would be of most benefit as the closest hotel Harrah's Ak-Chin CasinoResort is often booked sending clients into South Phoenix or Chandler for overnight accommodation.Amenities recommended included a hotel that offers breakfast, lunch, and dinner as well as space for

meetings or conference space. Brands indicated included Hampton, Hilton Garden Inn, or Holiday Inn

Express type hotels would be a good fit. He also indicated that the city is a stopping point on the way toRocky Point and San Francisco as well the new Copper Sky Regional Park appears to have high leisuredemand need with the baseball and soccer fields offered.

In speaking with the Mayor at the City of Maricopa, he indicated there appears to be a substantialamount of overnight accommodation need in the city including families, tournaments held at the new

sports complex, VW Proving Grounds business, other local businesses, and even people travelingthrough to the Sand Dunes nearby. Currently they recommend the nearest Harrah's Ak-Chin CasinoResort Hotel or hotels in the Chandler market. He also indicated Harrah's Ak-Chin Casino ResortCasino Resort is often full, charging upwards of $150/night for travelers. He felt strongly that Maricopawas in need of a lodging facility. Amenities recommended included meeting space for receptions from

250-500 people.

In speaking with the Community Services Director at the City of Maricopa,she indicated theyhave approximately 10 tournaments annually with teams coming in from out of town seeking lodging aswell as contract employees estimated at over 1,000 annually in need of accommodations. Currently theyrecommend hotels in Casa Grande or Chandler as they are the closest lodging options to Maricopa andthe Harrah's Ak-Chin Casino Resort being sold out oftentimes during their events. When asked if shefelt Maricopa would benefit from a newer branded hotel she indicated strong support for a family-

friendly hotel with extended stay options and meeting space for 100-200 people.

Source: Core Distinction Group LLC Community Interviews (2014)

In speaking with the Senior Operations Manager at Nissan Arizona Proving Grounds,she

indicated they have visitors coming in from Nissan, third party customers, groups, and race teamscoming in weekly. Currently, they have had a group in since August ranging from 10-25 people stayingfor up to 90 days. One of their race teams consisting of 30-40 people are coming in this month andstaying for 30+ days. The estimate of rooms needed on an annual basis is between 5,000-7,500 withmost coming in for 14+ days at 30 people or more per month. She indicated July was their busiestmonth with between 100-200 visitors this year. Currently they recommend the Wild Horse PassSheraton, Hampton Inn Chandler, or Residence Inn Chandler. Most of their Japanese travelers preferthe Residence Inn location staying for extended periods of time. When asked if she felt Maricopa wouldbenefit from a newer branded hotel she indicated their facilities directly would benefit as their guests

would not have to travel over 15 miles to Chandler and the city would benefit with these groups

spending their dollars in the community at local stores and restaurants. Amenities recommendedincluded microwaves, refrigerators, and/or full kitchens, dinner, and breakfast. One note is that many oftheir clients are from Japan or Germany, therefore it would benefit a hotel to cater some of theirbreakfast or dinner menu options to appeal to these groups.

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Source: Core Distinction Group LLC Community Interviews (2014)

Growth in Community (IV)

Strong Sense of Community

Supportive Local Government

Challenges of Maricopa, AZLocals Commute to Valley for Work (V)

High Tax (II)

Distance to Phoenix, AZ

Retail Space High Cost (III)

Seasonality

More Community Awareness Needed (II)

High Quality of Life

Greater Disposable Income

Tight Knit Community

Needs more family style restaurants

Lowe's or Home Depot Facility in town needed

Needs more business and services

16 Miles to Nearest City

Benefits of Maricopa, AZ

Great Place to Live

Well Educated Workforce (II)

Banner Health Maricopa Center

Locals Support Local Businesses

Affordable Housing (III)

Up and Coming Community

Best Kept Secret in AZ

New City, Open to New Ideas

Community Spirit

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Competitive Hotel Properties

SINGLE DOUBLE WEEKEND CORP

$142.99 $134.49 $118.99 $129.99 $131.62$159.00 $149.00 $119.00 $99.00 $131.50$139.00 $139.00 $104.00 $89.00 $117.75$79.99 $79.99 $179.99 $79.99 $104.99

$121.46

SINGLE DOUBLE WEEKEND CORP/ESSOC

$105.99 $96.99 $78.99 $79.00 $90.24$96.05 $96.05 $89.25 $89.00 $92.59$142.99 $134.49 $118.99 $129.99 $131.62$124.00 $119.00 $94.00 $79.00 $104.00$159.00 $149.00 $119.00 $99.00 $131.50$139.00 $129.00 $129.00 $99.00 $124.00$139.00 $129.00 $104.00 $89.00 $115.25$139.00 $139.00 $104.00 $89.00 $117.75

$113.37

Rooms 7+ 14+ 30+

102 $159.99 $159.99 $129.99 $129.9983 $149.00 $129.00 $119.00 $119.00133 $139.00 $124.00 $109.00 $109.00

$119.33

SINGLE DOUBLE WEEKEND Nissan/VW

292 $79.99 $79.99 $179.99 $79.99 $104.99

500 $130.00 $130.00 $156.00 $120.00 $134.00

$119.50

Homewood Suites Phoenix Chandler (II)

COMPETITIVE MARKET AVERAGE DAILY ROOM RATE (ADR):

Lodging SupplyThis section of the report describes the primary competitive Lodging Supply that will affect the property, particularly for hotel room demand.

As noted above, there are four properties pared down for comparison in rate positioning. The above mentioned hotels

were running rack rates from $104-$159 for the month of December 2014. Average ADR for these hotels range from

$105-$131 excluding negotiated business (occupancies vary based on accounts). With this rate positioning, this would

place the subject hotel competitive with this grouping of extended stay hotels out of the Chandler market.

RATE ANALYSIS ProjectedADR

STR Competitive Hotel Rates (December 2014)


The Overall/Statistical Competitive Set was pared down to the four most comparable or competitive properties which

will help to generate preliminary rate positioning for the proposed hotel.

Direct Competitive Set

RATE ANALYSIS ProjectedADR

Residence Inn Phoenix Chandler Fashion Center

Homewood Suites Phoenix Chandler (I)


Property

Harrah's Ak Chin Resort


The above mentioned hotels are located directly in the Maricopa market yet do not report their occupancies, rates, or

revenues to STR for comparison.

Harrah's Ak Chin Resort




Property


Courtyard Phoenix Chandler Fashion Center

Hampton Inn & Suites Phoenix Chandler


Hampton Inn Phoenix Chandler


Radisson Phoenix Chandler

Holiday Inn Express & Suites Phoenix Chandler

STR Competitive Hotel EXTENDED STAY Rates (December 2014)

PropertyRATE ANALYSIS

30+ Rate

Projected

ADR

STR Competitive Hotel Rates Immediate Market (December 2014)Not reported on STR due to Independent Branding

Property

Monthly Rate Survey Completed for Harrah's due to proximity to Maricopa on following pages.

Rooms

Sheraton Wild Horse Pass

RATE ANALYSIS

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Room rate competition for an upscale extended stay branded hotel in this market will be presentthroughout the year. This rate competition will be dictated by the rate structure of the hotels inthe surrounding regional area. With proper rate positioning the hotel should achieve a yield to theimmediate market of 150% (Weekday) and the overall region of 90%-100% which is average and

would assist in mitigating any rate sensitivity. The developed hotel in this market should mirror

the rates of the branded hotels in Chandler or within $10. Negotiated rates with local businessesor demand generators may be discounted and could drive ADR down dependent on roomsallotted to each account. In this region, two major accounts identifying extended stay need arepresent with a minimum potential of 5,000-10,000 guestroom nights annually. That said,negotiated rates with these businesses for 7+, 14+, and 30+ stays will impact average daily rate

(ADR) as a whole for the hotel development. Rate strategies for an extended stay hotel would tierdown for each level of extended stay time frame. Example: 7+ rates would be negotiated from$129; 14+ rates would be negotiated from $119; and 30+ $109 or less. These are only examples,these rate structures are typically negotiated through national RFPs with each corporation in thearea and fluctuate based on total room nights consumed.

The proposed hotel will directly serve the Maricopa market and will attract the Lodging Demandidentified in this report. As a result, it should be the premier property in Maricopa and shouldattract any Unaccommodated Lodging Demand being displaced elsewhere in the region due to thelack of accommodations in the city. Its facilities will be developed to match the expectations of

today's travelers. This property could be established with a national or regional brand. Working

with a brand that has experience in the lodging market will establish quality assurance for the hotel.Its defined rate positioning should establish the property as a highly competitive hotel for itsLodging Demand.

The statistical competitive market surveyed has seen new supply growth in the past year. In July of2014, an upscale extended stay Staybridge Suites Hotel with 104 guestrooms opened in theChandler market further indicating a need in the region for extended stay guestroom options. Atthe time of this report there was no other indication of another hotel under construction in theregion. Still, this should be monitored closely throughout the Maricopa hotel developmentprocess. No additional supply growth was factored into the projections at this time.

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Occ % ADR

2009 -18.4% ($22.11)2010 5.9% ($7.24)2011 16.0% $4.912012 -3.4% $6.332013 2.6% $2.362014 1.4% $0.01

Occ % ADR

2012 2.6% $6.332013 1.4% $2.362014 1.4% $0.012015 2.1% $3.102016 1.8% $3.19

247,743257,294

Annual Occupancy Occupied Rooms

Year

71.4%

Source: STR & Core Distinction Group, LLC

(Growth/Decline)

$100.84

$103.20

(Growth/Decline)67.5%

Note: Occupancy decline shown from 2009 vs. 2008 was caused primarily by aggressive hoteldevelopment in the Chandler market. In 2009, the following hotels opened adding 743 additionalrooms to the market nightly to the area or 271,195 annually:1. 2/2009 - Hilton Phoenix Chandler (197 Guestrooms)

2. 9/2009 - Hampton Inn & Suites Phoenix Chandler (153 Guestrooms)3. 9/2009 - Fairfield Inn & Suites Chandler (110 Guestrooms)

4. 9/2009 - Courtyard Phoenix Chandler (150 Guestrooms)

5. 10/2009 - Homewood Suites Phoenix Chandler (153 Guestrooms)

$103.20$103.21

270,167

Hampton Inn & Suites Phoenix Chandler 153

70.8%

Average Rate

$106.31

67.5%

Based on STR data provided, the following table summarizes the projected occupancy and ratesfor the competitive supply in the upcoming three years.

Projected Market Performance

75.4%

70.1%

71.4%

Occupied Rooms Average Rate

262,299 $103.21

260,125 $94.50

Based on STR data provided, the following table summarizes the historical trends in occupancyand rates for the competitive supply in the past five years and estimated 2014.

70.1%

Homewood Suites Phoenix Chandler (I) 83

48.9% 179,471 $96.8454.8% 201,286


Historical Market Performance

159

1006

$100.84

Occupancy appears to be accurately forecasted for the upcoming three years based on the marketand demand as recent year trends. Occupancy and ADR are projected to climb through 2016 asthere are currently no hotels slotted as U/C (Under Construction) in the immediate area as of thisreporting date.


262,299257,294

Annual Occupancy


276,922 $109.50

262,299

Courtyard Phoenix Chandler Fashion Center 150Homewood Suites Phoenix Chandler (II) 133

Competitive HotelsPrimary Competitive Hotels (Chandler, AZ) # of Rooms


102Hampton Inn Phoenix Chandler 101Residence Inn Phoenix Chandler Fashion Center

125

$89.59

73.6%

Grand Total:

Year

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Holiday Inn Express & Suites Phoenix Chandler Homewood Suites Phoenix Chandler (I)

Homewood Suites Phoenix Chandler (II)Hampton Inn Phoenix Chandler

Courtyard Phoenix Chandler Fashion CenterResidence Inn Phoenix Chandler Fashion Center

Hampton Inn & Suites Phoenix ChandlerRadisson Phoenix Chandler

IMAGES of Hotels Surveyed in Chandler, AZ:

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Source: Ihg.com


Complimentary 100% Non-Smoking Facility No

Pool (Indoor) Pool (Outdoor) Spa

The Holiday Inn Express Hotel & Suites Phoenix - Chandler is the answer for those seeking affordable

Phoenix hotels. Thoughtfully located off I-10 and Chandler Boulevard, less than 15 miles from Phoenix SkyHarbor International Airport (PHX), our property ensures convenient access to prominent businesses andpopular attractions throughout both Phoenix and Chandler, AZ. The hotel's professional services are ofgreat appeal to corporate travelers. In addition to a Business Center with fax, copy and print capabilities,patrons can use the more than 700 square feet of meeting space. Those visiting clients or colleagues inPhoenix also appreciate our proximity to companies like Intel, ADP, Honeywell, Global Crossing and the

Arizona Department of Agriculture. Phoenix vacations are likely to be action-packed. Guests can find theseason's latest styles at nearby Chandler Fashion Center in Chandler, AZ, or leave the hotel's property inpursuit of a Wild West experience at Rawhide Western Town and Steakhouse. Phoenix Premium OutletsMall is just 3.2 miles from our hotel and Lone Butte Casino is less than two miles away. Designed withyour comfort in mind, this hotel's facility in Phoenix, AZ boasts every amenity from free Wi-Fi access and acomplimentary, hot breakfast to a Fitness Center and an outdoor pool. Guest laundry facilities are also

available. Find your niche here!

No Yes No

Complimentary Yes Yes

Parking Smoking/Non-Smoking

# of Guestrooms # of Floors Kitchenettes125 4 No

Market / Gift Shop Elevator Shuttle Service

Yes Yes Yes/LaFitness $30

Yes - 840 sq.ft. No No

Complimentary No

Breakfast Lunch Dinner

Restaurant on Site Room Service

No

No

Business Center Fitness Center (Onsite) Fitness Center (Off Site)

Banquet/Meeting Facilities

Pets

Internet Guest Laundry Facilities Valet

Yes Yes

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Source: Radisson.com


Yes - 6,800 sq.ft. Yes Yes

Yes

Market / Gift Shop Elevator

Yes Yes N/A

Banquet/Meeting Facilities Restaurant on Site Room Service

Shuttle Service

Yes Yes Yes


Yes - Restaurant No Yes - Restaurant



Ideally located in the beautiful Valley of the Sun, the Radisson Phoenix-Chandler is an upscale property

offering easy access to Phoenix-Sky Harbor Airport (PHX) and nearby attractions in Phoenix, Tempe,Mesa, Gilbert and Glendale. Here, you can take advantage of numerous on-site amenities, includingcomplimentary Wi-Fi, a fitness center, on-site dining and a sparkling outdoor swimming pool. Feel likeexploring the area? Take advantage of complimentary shuttle service within a five-mile radius (based onavailability), allowing you to visit popular highlights like the renowned Rawhide Western Town, Wild HorsePass Casino, the Chandler Fashion Center Mall, the Phoenix Premium Outlets, Wild Horse PassMotorsports Park and the Bob Bondurant School of Driving. Reserve your stay online to discover what

sets the Radisson apart from other hotels in Chandler.




Yes Yes Yes

Parking Smoking/Non-Smoking Pets

No Yes

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Source: Marriott.Com


# of Guestrooms # of Floors Kitchenettes102 3 Yes - All Rooms


Yes Yes No


Yes - 441 sq.ft. No No


Complimentary No Complimentary Weekday Social


No Yes Yes


Yes Yes No




Complimentary 100% Non-Smoking Facility Yes

Thrive on Long Stays - The preferred choice for extended-stay hotels in Chandler, AZ, Residence Inn

Phoenix Chandler, welcomes you to the beautiful Southeast Valley of Phoenix. Guests stay within walkingdistance of Chandler Fashion Center Mall, more than 25 restaurants, and just a quick trip from countlessother Phoenix area attractions. All-suite accommodations are ideal for corporate visitors, governmentcontractors, leisure guests and group travelers. We are pleased to offer a complimentary full, hot breakfasteach morning and evening social hours with light fare (Tues and Wed). Additional amenities includecomplimentary Wi-Fi, available meeting space, outdoor pool and Jacuzzi, fitness center and outdoor

barbeque area. Each spacious suite is complete with a full-sized kitchen and available in one or two-bedroom floor-plans. Our knowledgeable and friendly team is standing by 24/7 to assist you. Discover oneof the premier extended-stay hotels in Chandler, AZ.

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Source: Hilton.com

Hampton Inn Phoenix Chandler



No Yes N/A


1 - 450 sq.ft. No No


Complimentary No No


No Yes Yes


No Yes No


Complimentary No Yes


Complimentary Smoking Rooms Available No

Located directly off I-17/I-10, the Hampton Inn Phoenix / Chandler hotel is in the heart of the Phoenixtech district with proximity to several major corporations, including Intel, Honeywell, BE Aerospace, andNovell. Sky Harbor Airport and downtown Phoenix are just 15 minutes directly north from our Chandlerhotel. Our refreshed lobby and an array of amenities makes our Chandler hotel a convenient andcomfortable choice among hotels in Phoenix, AZ. Stay connected with free WiFi and rest easy on asignature clean and fresh Hampton bed. Start your day with a free hot breakfast or a Hampton On the

Run Breakfast Bag on your way out the door. Maintain your regimen in our fitness center, newlyrenovated August 2014, or wind down with a dip in the outdoor pool.

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Source: Hilton.com


# of Guestrooms # of Floors Kitchenettes83 3 Yes


Yes Yes N/A


Yes - 240 Sq.ft. No No


Complimentary No Complimentary Weekday Social


No Yes No


Yes Yes No




Complimentary Smoking Rooms Available Yes

Discover this hotel in Chandler, AZ with the comforts of home. Unwind at Homewood Suites by HiltonPhoenix/Chandler and stay a while in a home away from home. Situated just fifteen minutes from PhoenixSky Harbor International Airport, our hotel is close to a range of businesses, shopping and dining options.Play a round of golf at one of three nearby Phoenix golf courses within eight miles of our hotel in

Chandler, AZ, or treat yourself at the nearby Arizona Mills indoor outlet mall or Chandler Fashion Center.Discover all the comforts of home in this pet-friendly Chandler hotel. Unwind in a spacious suite, featuringa large, separate living area, a fully equipped kitchen and two flat-screen TVs. Continue your exerciseroutine with the fitness center, pool or basketball court, situated just steps from the hotel. Start your day

with a complimentary hot full breakfast or savor complimentary evening dinner and drinks* served Monday

through Thursday. Enjoy all the support you need in the hotels business center or host a meeting for up totwelve people and relax while expert event planners take care of the details.

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Source: Hilton.com

# of Guestrooms # of Floors Kitchenettes153 3 Microwaves/Refrigerators


Hampton Inn & Suites Phoenix Chandler

Yes Yes N/A


Yes - 575 sq. ft. No No


Complimentary No No


No Yes Yes


Yes Yes No




Complimentary Smoking Rooms Available No

Comfort and convenience at our hotel in Chandler, AZ. Take advantage of the great value found at the

Hampton Inn & Suites Phoenix Chandler-Fashion Center AZ hotel next to the intersection of Loop 101and 202. Enjoy our free 5-mile radius shuttle to many of the technological businesses nearby or to ChandlerFashion Center, just two miles from our hotel in Chandler, AZ. While traveling for pleasure, make a bet atnearby Lone Butte Casino, hit the links at Ocotillo Golf Course, or watch car racing at the Wild Horse PassRaceway. Venture to downtown Phoenix with its wealth of attractions, including Chase Field, the PhoenixConvention Center, and Phoenix Zoo. Enjoy our thoughtful amenities including free WiFi and an on-site

convenience store, as well as a microwave and mini-fridge in each guest room and suite. Get some well-deserved rest on the clean and fresh Hampton bed before waking up to Hamptons free hot breakfast.Reinvigorate with a workout in the fitness center or spend a day basking in the sunshine by the outdoorpool and whirlpool spa. Our hotel in Chandler, AZ also provides a 24-hour business center, in addition tomeeting space for up to 40 guests.

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Source: Marriott.com


Courtyard Phoenix Chandler Fashion Center


Yes Yes N/A


Yes - (4) Meeting Rooms 1,600 sq.ft. Yes (Bistro) No


Yes (Bistro) Yes (Bistro) Yes (Bistro)


No Yes Yes


Yes Yes No


Complimentary No Yes



Courtyard Phoenix Chandler hotel located off Highway 202 just 20 minutes from downtown via I-10 offers

thoughtful amenities for the busy, tech-savvy traveler. Our state-of-the-art lobby features individual mediapods, free WiFi and interactive GoBoard for the most up-to-minute news, traffic & weather. Businesstravelers and vacationing families love our hotel rooms with free WiFi and flat-screen TVs. Some roomseven offer mountain views. When you stay with us, you'll enjoy healthy meal options at our onsite Bistroserving breakfast with Starbucks coffee and dinner with bar service. The most convenient of Chandlerhotels, we're minutes from Chandler Mall and offer a free shuttle service to the mall and nearby

corporations (7am-10pm). After a busy day in the Phoenix area, take advantage of our fitness center,outdoor pool & patio with fire pit. With rates typically lower than downtown options and close proximityto Fashion Center, Diablo Stadium and Phoenix Raceway, we're the top choice of Cha

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Hotel Feasibility Study - City of Maricopa Final.pdf

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