Extension Hearing Presentation, Dec 20 th 2011 368.5 Acre Multi-Use Development DOUGLAS, AZ © Copyright 2011 by Ardent Investments, LLC

Extension Hearing Presentation, Dec 20Extension Hearing Presentation, Dec 20thth 2011 2011

368.5 Acre Multi-Use Development368.5 Acre Multi-Use DevelopmentDOUGLAS, AZDOUGLAS, AZ

© Copyright 2011 by Ardent Investments, LLC

Copper Sky: Multi-Use Development Project OverviewCopper Sky: Multi-Use Development Project Overview

Building Neighborhoods ~ Creating Neighbors™

• Comprised of 368.5 acres of prime real estate;• Comprehensive residential and business community;• Designed to be built in phases to meet residential and commercial market demand;• Located west of City of Douglas, AZ and between the area’s three primary economic drivers:oUniversity of Arizona South/Cochise College, US Border Patrol Station (largest in US), CANAMEX

transportation corridor (coming soon).

Univ. of Arizona /

CANAMEX Transportation Corridor

Univ. of Arizona /

CANAMEX Transportation Corridor

2

This presentation is an overview of the comprehensive Copper Sky Multi-Use Development analysis (a detailed research and feasibility study that establishes the justification, and implementation strategy for Copper Sky.)

Copper Sky: Development Analysis OverviewCopper Sky: Development Analysis Overview


• Investment Opportunities• Economic / Geographic Rationale• Target Market Segmentations• Product Positioning Strategy• Competitive Analysis• National / International Considerations• SWOT Analysis• Engineering Studies

The analysis includes, but is not limited to:

© Copyright 2012 by Ardent Investments, LLCPaul R. Fiel, PrincipalTel: 520-990-9599www.CopperSkyCommunity.comPaul.Fiel@ardentinvestments-llc.com

3

http://www.copperskycommunity.com/

mailto:[email protected]

Presentation ObjectivesPresentation Objectives

1.1. Provide an overview of the Copper Sky development initiative Provide an overview of the Copper Sky development initiative

2.2. Highlight target market and growing need for multifamily Highlight target market and growing need for multifamily housing options housing options

3.3. Demonstrate how geographic location of development Demonstrate how geographic location of development provides strategic, competitive advantagesprovides strategic, competitive advantages

4.4. Outline partnerships and explain investor and Cochise County Outline partnerships and explain investor and Cochise County opportunitiesopportunities

5.5. Real estate investment attorney update and justification for Real estate investment attorney update and justification for requesting five (5) year extensionrequesting five (5) year extension

6.6. ConclusionConclusion

Building Neighborhoods ~ Creating Neighbors™ 4

1,344 Total Residential Units 1,090 multifamily residence or 81%81%

• 520 apartments• 344 town homes • 226 duplexes

Commercial Space 165,900 of 810,000 sq. ft. configured

Public Areas: 32 acres of parks, playgrounds

4.6 mile integrated walking/biking trail

10 acre set aside for school zone

.5 acre set aside for ambulance/fire station

43 acres of additional open space

Copper Sky: OverviewCopper Sky: Overview


Market fit – Phased build-out with multifamily emphasis

254 single family residence or 19%19%

• 118 - 9,000 sq ft lots• 60 - 36,000 sq ft lots• 38 - 18,000 sq ft lots• 38 - 2-acre estate lots

1

23

5

4

876

9

12

10

11

13

Phase 1: Apt build out

Note: proportionate distribution of products can be altered based on future market trends.

5

Initial target market segmentation

Border patrol, customs, port of entry, law enforcement, other government agents and their familiesThe Douglas Border Patrol station:

• Is the largest in the United States! • Facility expansion despite 2008 - 2010 economic recession; agent count now “undisclosed”• Average agent on the job 3 years (for BP, ICE and Customs)• Agent purchasing power compatible with multi-family living options• DHS 2010 memo outlines “tour of duty” options translates to increased demand for short-term

housing• As corridor comes to fruition, more security will be required


(Agent purchasing power compatible w/ multifamily residential market)


Local Workers / Commuters• The City of Douglas currently has a new business development initiative aimed

at attracting major industry employers such as bio-technology, manufacturing, logistics, call centers, etc.

• If local short term housing options are not available:• Workers MUST commute to Douglas from other communities• The current average commute ranges 80 – 240 miles round-trip (SV, Tucson)• Average fuel costs range from $360-$600 per month• Long commute and costs are not attractive; an impediment to new business expansion

$4M gov’t building revitalization (2011)


(Emerging market purchasing power compatible w/ multifamily rental market)


Partnership with Douglas - Regional Economic Development Corporation (REDC) for future business expansion initiatives

Letter of Support, Daniel Ortega, Chairman Douglas - REDC


Cochise College’s (southern campus of UofA, ASU) stated “housing shortage.” In 2009 – 2010, 7 Townhomes built Total of 184 housing units (most single occupancy) In 2011, 1,300+ students Emphasizes the growing need for housing


(Student purchasing power compatible w/ multifamily residential market)


9


Employment associated with the extension of the Canamex Corridor (North American Super Corridor)• The North American SuperCorridor's primary artery connects the US & Mexico via

Laredo, TX• The City of Douglas was selected as secondary corridor site (Canamex Corridor) • Corridor related support entities to follow: logistics, warehousing, IT firms, defense

contractors preceded by in-fill commercial such as retail, restaurants, etc. (similar to economic growth in other corridor hosting port of entry cities: California, Texas, New York)

NAFTA Secondary Corridors RepresentationSource: North American SuperCorridor Coalition

(NASCO), Inc

Built btw 2008-2010: Transportation Inspection StationCorner 191 and 80


(Emerging market purchasing power compatible w/ multifamily residential market)


Local Regional Investors•As development begins in the Copper Sky community, it will draw the attention of smaller real estate investors looking to piggyback and capitalize on the opportunity. •This target market will capitalize on real estate opportunities typically by purchasing rental properties such as duplexes and/or single family rentals.

Shifting demographics throughout USA supports increased demand for multi-family living options

Baby Boomer impacts • Persons born between 1945 - 1964

• Comprise 25% of current US population (75 million)• Downsizing, seeking active retirement living

• Tend to prefer maintenance free homes such as townhomes, duplexes

Retirees and Baby Boomers



Extensive research and analysis supports the need and desire Extensive research and analysis supports the need and desire

for long and short-term multifamily housing solutions in and for long and short-term multifamily housing solutions in and

around Douglas, AZ. around Douglas, AZ.

The Copper Sky multi-use development has been The Copper Sky multi-use development has been

strategicallystrategically positionedpositioned, , designeddesigned, and , and rezonedrezoned

with a primary focus on meeting this immediate with a primary focus on meeting this immediate

housing demand through the construction of new, housing demand through the construction of new,

energy efficient apartments, townhomes and energy efficient apartments, townhomes and

duplexes laid out in a comprehensive, community duplexes laid out in a comprehensive, community

setting.setting.

Copper Sky: Design Model

12

Single Family Residential (SFR)

• 358% growth in new housing construction and planned construction from 2000 – 2007

• Translates to 1,200+/- Single Family Residential (SFR) homes planned• 100% are SFR

• However, from 2008 - 2011, 50+% of SFR remains in final plat stage (i.e. blueprint)

• Douglas, AZ., like all USA, is affected by the slow single family housing market

Mounting demand for multifamily living options!!

Current Housing Inventory: Douglas, AZCurrent Housing Inventory: Douglas, AZ

As of Aug 12th , 2011

• 24 = Single Family Homes are on the market**

• 119 = average number of days on the market**

Douglas’s Single Family Housing Market availability exceeds demand


Multifamily Residential (MFR)

• Since Jan 2004, all area apartments have been filled to capacity (over 7 years). Prospective renters face long waiting lists and limited/no choice.

• No multifamily options (apartments, town homes, duplexes) have been planned or proposed with the exception of Copper Sky.

• The Copper Sky design received high praise at 2008 entitlement hearing. o Pat Call, District 1 Supervisor, stated, “we need more of these…” and “…this

[Copper Sky] should be the model going forward.”

Current Housing Demand: Douglas, AZCurrent Housing Demand: Douglas, AZ


Example: Le Perilla apt complex (8/2011)

14


Away from Canamex Corridor (2.3

miles) : alleviating traffic, pollution

and safety deterrents in other

areas;

Between three primary economic

drivers (University, BP Station,

Corridor) ….ALL EXPANDING!

Offers opportunities for corridor

related employment, University

housing, general office space,

defense contractors, etc.;

Near largest Border Patrol Station

in USA provides added safety,

security.

Away from Canamex Corridor (2.3

miles) : alleviating traffic, pollution

and safety deterrents in other

areas;

Between three primary economic

drivers (University, BP Station,

Corridor) ….ALL EXPANDING!

Offers opportunities for corridor

related employment, University

housing, general office space,

defense contractors, etc.;

Near largest Border Patrol Station

in USA provides added safety,

security.

Copper Sky – West of City

Saddleview Estates

La PerillaEstates

CANAMEX Transportation

Corridor

Map Source: Google.com

Copper Sky is Optimally Located!

Copper Sky: Geographic Rationale within DouglasCopper Sky: Geographic Rationale within Douglas

1515

Opportunities for Investor/Developer and CountyOpportunities for Investor/Developer and County

At full build out Copper Sky is projected to accommodate 3,000 – 4,000 residents providing both scalability and sustainability despite the current economic climate. This provides the following opportunities for the investor/developer and Cochise County:

• Only development positioned to offset Douglas’ current and future multifamily housing gap, as well as offer commercial office space for new businesses

• Long-term cash flow from residential and commercial rental/leasing market;

• Product adaptability: POD design facilitates a flexible, durable business model for marketing and sales;

• Long-term cash flow to Cochise County from expanded residential and commercial tax base

• Ability for county to fund other projects due to increased bond rating - Copper Sky: more county assets

• Opportunity to partner with D&R International, LLC, Road9, Douglas Regional Economic Development Corporation (REDC)

• Opportunity to align with investor network; Andrew Spitler, Real Estate Investment Attorney


PartnershipsPartnerships

Teaming agreement with D&R International LLC and others for energy efficient technologies in the Copper Sky Community: wastewater facility, solar, no-load electrical technology, etc. (Letter of Support dated: Sept 21, 2011)


Road 9, Inc., a broadband solutions company, provides video, telephone, Internet, security, and in-home technology services for residential, resort and large commercial entities (Letter of Support dated: Sept 27, 2011)

Mission is to “promote the development of industry, trade and commerce for the diversification of the region’s economic base and raising the standard of living and quality of life in the greater Douglas region” (Letter of Support dated: Dec 14, 2011)

Re-engaged business community July 2011, more to come prior to build out…

Forward thinking design; owner is an expert in identifying emerging markets, products, and technologies in diverse industries, including, but not limited to product engineering, development, and competitive positioning.

17

Update: RE Investment Attorney, Andrew SpitlerUpdate: RE Investment Attorney, Andrew Spitler


Existing RE Market Conditions•Ardent Investments, LLC did the right thing by standing down (2008-2010)•Slow recovery, but positive signs 2012•Large investors are eager to invest again, but they remain “…jittery.”•Investors, now more than ever requiring well researched, quantitatively evaluated projects•Douglas area is emerging, so its not an obvious (or first) choice vs. larger cityoEst. 6-12 months: time required to market to investment community oEst. 6-8 months: Potential investor(s) will require time to evaluate projectoVarious contract negotiations

Ardent partnership (est. 4-6 months) If on-site WWF (est. design: 12 months, permit 18 per State of AZ, build 12 months) If city extension (est. contract 8 months, design 6 months, other TBD months)

What We Need?•Five (5) year extension, required - shows the business and investment community that BOS and all parties are serious

18

ConclusionConclusion


• Envisioned and created based on comprehensive market Envisioned and created based on comprehensive market researchresearch, , analysisanalysis, and , and forecastingforecasting. .

• The research and data that supports the Copper Sky initiative has been analyzed and The research and data that supports the Copper Sky initiative has been analyzed and professionallyprofessionally collaboratedcollaborated, thereby mitigating risk., thereby mitigating risk.

• Design Design complimentscompliments, , alignsaligns, and , and integratesintegrates seamlessly with the Douglas business initiatives seamlessly with the Douglas business initiatives that are currently underway.that are currently underway.

• Development needs to Development needs to precedeprecede business initiatives in the Douglas area, as the shortage of short business initiatives in the Douglas area, as the shortage of short term and affordable housing options will term and affordable housing options will impedeimpede progress. progress.

• Past and current economic conditions have resulted in a country wide slow down of all housing Past and current economic conditions have resulted in a country wide slow down of all housing related development.related development.

• Investors Investors have resources have resources to put into new construction, but are hesitant to do so without a strong to put into new construction, but are hesitant to do so without a strong probability of a successful outcome. probability of a successful outcome.

• The Ardent Investments, LLC, management team has invested significant resources into the The Ardent Investments, LLC, management team has invested significant resources into the development of Copper Sky and is development of Copper Sky and is committedcommitted to working with Douglas administrators, investors, to working with Douglas administrators, investors, and developers to achieve common and developers to achieve common revitalizationrevitalization and infrastructure expansion goals. and infrastructure expansion goals.

• A five year entitlement extension for Copper Sky is mandatory for demonstrating a strong A five year entitlement extension for Copper Sky is mandatory for demonstrating a strong commitmentcommitment to our initiatives, and to our initiatives, and attractingattracting investors, developers, and businesses to the investors, developers, and businesses to the Douglas areaDouglas area..

19

ContactContact


or Mail stop:Box 6193

Huachuca City, AZ 85616

Paul R. Fiel Paul R. Fiel MBA, MSIM, ITIL®, PMP®MBA, MSIM, ITIL®, PMP®

PrincipalPrincipalArdent Investments, LLCArdent Investments, LLC626C-236 ADRIMRAL DR.626C-236 ADRIMRAL DR.ANNAPOLIS, MD 21401ANNAPOLIS, MD 21401Phone 520-990-9599Phone 520-990-9599

[email protected]

www.CopperSkyCommunity.com

20

mailto:[email protected]

http://www.copperskycommunity.com/


Additional InformationAdditional Information

21

Executive Summary: As of Tuesday, December 20th, 2011

Development Metric Status/Trend Challenges Mitigation

Copper Sky MDP

Scope Good • No scope challenges at this time

Schedule Progressing • Cochise County extension decision • County presentation, request 5 years

Resources Good • No resource constraints at this time

Cost Progressing • Completing cost/benefit analysis (Douglas utility extension vs. on-site WWF)

• Copper Sky, RE investment attorney to negotiate with City of Douglas and investment partners

• Utility extension vs. WWF decision dependent on builder / developer / investor option selected

Executive Summary

Resu

lts

• Q3 2011 Copper Sky research = DONE• Hired Scottsdale real estate investment attorney = DONE• Reached partnership agreement from D&R International = DONE• Reached partnership agreement from Road9 (fiber optic) = DONE• Continued engagement with Canamex Corridor Director = On-going• Continued engagement with GSA Sector 9 rep (DC, Pacific Rim) =

On=-going• Via RE Attorney:o Identified initial set of investment/development partners = DONE o Continued engagement w/ Gov. Brewer’s representative = On-goingo Initiated partnership discussions with Douglas Reg. Econ Develop.

Corpo Initiated contact w/ City of Douglas

• RE Attorney presentations to investment community On-going

• Meeting: Chairman of Homeland Security, Rep Peter King Feb 2012

• Meeting: Governor Brewer’s rep Feb 2012

• Next Steps: (~2012)

o Investor solicitations

o Select investor/developer and enter into contractual agreement

o Select utility option (city of Douglas extension or on-site WWF)

o Solidify infrastructure design, site preparation

(Q1

- 20

12

)

Work

ing

Weighted Milestones - % complete (0, 15, 45, 65, 85, 100)•Cochise County extension decision 85%•Interview and hire new civil engineering firm 45%•Cost/benefit analysis – Douglas extension vs. on-site WWF utility 45%•“DHS Mission Improved ~ Quality of Life Leasing Solution” 65%•DHS contract 0%•Investment presentations 15%

• Pending unknowns with Federal Government real estate legislation• Nervous investment community • Constrained bank lending

Ch

alle

ng

es

© Copyright 2011 by Ardent Investments, LLC 22

Documents

Extension Hearing Presentation, Dec 20 th 2011 368.5 Acre Multi-Use Development DOUGLAS, AZ © Copyright 2011 by Ardent Investments, LLC