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The Generation Companies, LLC
50-year Heritage of Hospitality Relationship Driven Turn-key Solutions
Kevin Famiglietta
Director, Asset Management Direct Line 919-313-7237
Fax 919-361-9009 Cell 919-306-0705
“Creating Value, Inspiring Others”
www.generationcompanies.com
Hospitality Receivership Advisors, LLC
William F. Smith
Managing Director Direct Line 919-313-7231
Fax 919-361-9009 Cell 919-676-7736
TABLE OF CONTENTS
I. Executive Summary: The Generation Companies’ History and Current
Status
II. Company Overview
A. Awards and Acknowledgements
B. Organizational Chart
C. Resources and Operational Specialties
III. The Generation Portfolio
A. Property Map
B. Photos of Hotels
IV. Receivership Background
A. Receivership Benefits
B. Functional Skills and Services Summary
C. Qualifications – William F. Smith
D. Qualifications – Kevin K. Famiglietta
I. Executive Summary The Generation Companies, LLC, (Generation) based in Durham, North Carolina has a 50 year heritage in hospitality ownership, development and management.
In 1959, Hugh M. Daley Sr., one of the original Holiday Inn franchisees, developed his first Holiday Inn in Rocky Mount, North Carolina. He went on to develop additional Holiday Inn properties in North Carolina. In 1969, H. Mark Daley, Jr. joined Daley Investments, Inc., as General Manager of the Holiday Inn of Greenville, NC and went on to convert the property into one of the country's first Holidomes. In the late 1980's and early 1990's, Mr. Daley, Jr. developed, acquired, and operated focus service properties which have since been sold. H. Mark Daley, III now carries on a fifty year family tradition of focusing on creating value via progressive lodging development, asset management and customer service oriented operations by partnering with premier brands and franchisors. Currently Generation operates and asset manages:
• 28 hospitality assets in 9 states • Over 3,100 guest rooms • $50 Million in total revenues
Generation’s heritage of entrepreneurship, traditional values, and innovation are still at the core of the company’s success.
H. Mark Daley, III William F. Smith Kevin K Famiglietta President/CEO Managing Dir. Asset Mgmt Director Asset Management II. Company Overview
A. Awards and Acknowledgements
Generation is nationally recognized as a leading hospitality management company with acknowledgements from industry publications and franchisors. The Generation Companies Durham, NC:
• 2009 Deal Developer of the Year Award- Hilton Hotels (Homewood Suites) • Ranked 81st on the Hotel & Motel Management’s 2010 Top US Hotel Companies
Candlewood Suites Rocky Mount, NC:
• 2010 Newcomer of the Year Award- Intercontinental Hotels Group
Suburban Extended Stay Sterling, VA:
• 2010 Gold Award- Choice International
Candlewood Suites Hopewell, VA:
• 2010 Regions Top OSAT 12 Month Rolling Score Award- Intercontinental Hotels Group
Candlewood Suites Durham/RTP, NC:
• 2009 Turning Point Award- Intercontinental Hotels Group
Candlewood Suites Raleigh-Crabtree, NC:
• 2009 & 2010 Quality Excellence Award Winner- Intercontinental Hotels Group Staybridge Suites Jacksonville, FL:
• 2009 Newcomers Award- Intercontinental Hotels Group • 2009 Priority Club Members Choice Award- Intercontinental Hotels Group
Suburban Extended Stay Wilmington, NC:
• 2006 & 2007 Platinum Award- Choice International • 2008 Gold Award- Choice International • 2007, 2008, 2009 Hotel of the Year Runner Up- Choice International
Suburban Extended Stay Hampton, VA:
• 2008 Inn of the Year Finalist- Choice International • 2007 Platinum Award- Choice International
• 2007 Inn of the Year Finalist- Choice International Suburban Extended Stay- Richmond, VA:
• 2008 Choice Gold Award- Choice International Mainstay Suites, Charlotte, NC:
• 2006 Choice Gold Award- Choice International Candlewood Suites Sterling, VA:
• 2005 Newcomer of the Year Award- Intercontinental Hotels Group • 2006 Quality Excellence Award- Intercontinental Hotels Group
Candlewood Suites Herndon, VA:
• 2004 Most Improved Hotel Award- Intercontinental Hotels Group Candlewood Suites Richmond, VA:
• 2004 & 2009 Quality Excellence Award- Intercontinental Hotels Group
Candlewood Suites Lake Mary, FL:
• 2006 Torchbearer Award- Intercontinental Hotels Group
VP, Operations
Ron Jacobsen
Board of Advisors
Director, Asset Management
Kevin Famiglietta
Regional Choice/Hilton
Manager
Rick Stroud
SES Brand Coordinator
James Bowman
IT Coordinator
Gary Hopkins
Area GM
Peter Hutchins
Area GM
Rolf Holte
Training Managers
Ingrid PayneFrank Jones
Peter HutchinsDarren Sheehan
Assistant Controller
Bob Bullock
AccountantCynthia Dixon
ControllerMike Cook
Managing Director Asset Management
William Smith
HR & Process Improvement Coordinator
Teressa Holman
Property Support Manager
Micki Evans
The Generation Companies
2010 Organizational Chart
Chief Financial Officer
Randy Coupland
Executive Assistant & Building Manager
Lynn Stokke
President
Mark Daley, III
Director Acquisitions
Jeff Castleberry
AccountantNick Dhruna
Team C
Bob CoxBrandon Cantrell
Rachid Alaoui
Team B
Laila Oinas
Dave Monroe
Boyd Harrison
Kelly Clark
Lynn Folsom
Team A
Scott TurnerDarren SheehanJonathan AllardMatt Coombs
C. Resources and Operational Specialties In order to support current and anticipated growth Generation has established Regional Offices located in:
• Durham, NC (Headquarters) • Herndon, VA • Jacksonville, FL • Austin, TX
As a full service, award winning management company, our organization includes all of the operating disciplines that are required to achieve hotel success, including:
• Sales and Marketing • Revenue Management • Engineering, Facilities & Capital Expenditures Management • Information Technology • Human Resources • Accounting Systems • Financial Reporting & Internal Audit Functions
Franchise relationships are a vital part of the success of any property transition. Throughout the tenure of Generation in the hotel industry, strong partnerships have been built with:
• Intercontinental Hotels Group (IHG) • Hilton Worldwide • Choice International • Starwood Hotels & Resorts Worldwide • Best Western • Wyndham Hotels • Marriott International
The enclosed information highlights the attributes of Generation and provides an overview of our capability and successes. The Generation Companies’ Corporate Service Center is located at 1822 East NC Highway 54 in Durham, North Carolina. All corporate initiatives are coordinated from its headquarters and are executed in the field through its Regional Operations Managers as well as the Vice President of Operations who are supported by sales, engineering, accounting and finance professionals. Experts in the areas of revenue management, information technology, marketing, food and beverage, and market analysis are all called upon to infuse and implement strategies that best fit individual hotels’ needs to maximize performance. Each hotel within the Generation portfolio has access to the full complement of Generation’s extensive network of support services which include:
Asset Management
As an owner and operator of hotels for over 50 years, Generation understands the objectives of the owner and lender regarding the management of hospitality properties. Generation’s asset management division was developed to assist owners and financial institutions in achieving their goals and ensuring that the hotel asset’s maximum value and potential is reached. In addition, Generation engages in consulting and advisory assignments, providing the hospitality expertise necessary in assisting owners and lenders in making critical decisions regarding their assets. Scope of services include:
• Operational overview, evaluation and implementation of strategies • Sales and Marketing overview, evaluation and action plan • Capital Improvement planning and budgeting • Operational Budget preparation and benchmarking • Vendor and Franchisor contract negotiations • Market evaluations and analysis • Property Improvement Plan management and negotiations
It is a primary objective for Generation to provide a customized level of services to its clients in order to fully satisfy the individual needs of that client. Tailored plans are prepared and executed to achieve these specific goals.
Sales and Marketing
The Sales and Marketing initiatives of the hotel will be directed by the Director of Asset Management and the Vice President of Operations. Each of these individuals will play a role in the overall sales and marketing strategy implementation, action steps, measuring systems and overall performance of the sales team at the property level and is included as part of Generation’s management fees. The Sales and Marketing team will focus on the following areas:
• Market Segmentation Mix Optimization • Sales staffing levels and scheduling • Local Negotiated Account Production and Pricing • Franchise related activities • E-Commerce Production • Group Rooms Inventory • Sales and Marketing Action Plans • Yield Management • Monthly STAR report analysis
Generation, often in conjunction with specific franchisor brand teams, has Revenue Management capabilities that provide ongoing yield and inventory pricing expertise for
Revenue Management
all distribution channels of participating properties. E-Commerce, Global Distribution Systems, group inventories and Franchise Contributions are all reviewed on a constant basis for pricing, inventory allocation and occupancy opportunities.
Accounting
Generation’s Accounting Team will review, in detail, all financial results and operating performance of the hotel. This team is lead by our seasoned Chief Financial Officer and is supported by a team of Controllers and Accountants. Generation’s proprietary online intranet access provides for a highly efficient platform for ongoing, up to date reporting to interested Managers, Agents, Owners, Lenders and other stakeholders. This online financial reporting package includes:
• Executive Summary • Cash Flow statement • Income Statement • Balance Sheet • Summary Trial Balance • General Ledger • Accounts Receivable • Accounts Payable • Graphical Analysis
Recruitment and Training
It is Generation’s objective to hire the absolute best industry leaders for all its properties. Once a property is under management, the Generation leadership team will search for the right individuals to match the specific needs of the property. We immerse new members into an extensive internal training program as well as obtain required certifications within their hospitality network or the brand they represent.
Human Resources
Employees and Managers of The Generation Companies have historically had a high level of job satisfaction due to our unique corporate culture and merit based incentives that are available. With Core Values like Respect, Balance, Stewardship and Integrity, Generation boasts a long list of tenured individuals in key positions as well as line level employees. Employees are consistently developed at the property level through training and development programs. Employees are also eligible to receive health benefits through a competitive plan as well as participate in bonus programs both for line level and management positions. All programs and incentives can be tailored to individual situations and are at the discretion of the ownership of the individual property.
Information Technology
The Information Technology Department of Generation provides support as needed for ongoing technology needs which includes an initial IT audit to ensure the property has appropriate software and hardware installed and meets relevant IT brand standards. Since Generation has experience with numerous brands, the IT department is familiar with multiple property management and telephone systems as well as accounting and reservation engines and can provide onsite support. This ongoing support is part of the management service with no additional fees. All IT travel related expenses are subject to reimbursement by the hotel but many functions can be performed remotely.
Acquisitions
Generation’s acquisition team researches and analyzes potential investment opportunities on behalf of the company’s principals as well as a core group of investing partners. Generation’s current portfolio of 22 owned hospitality assets reflects this commitment. Below are The Generation Companies basic acquisition criteria:
• Brands associated with major franchise portfolios (or potential to reposition) • Primary or secondary US markets • Quality Extended Stay and Focused Service hotels
Facilities and Engineering
The Generation Companies has a competent staff of individuals to oversee all areas of property maintenance, engineering, renovations, property improvement program analysis and property conversions. In recent years, Generation has successfully completed more than $10 million in PIP related projects, renovations and conversions. Capital budgeting is a routine part of our analysis and planning process as well as interior design and engineering technical support. As a premier developer of lodging properties, no facilities job is too big or too small.
Food and Beverage
Generation can provide direct and indirect support in all phases of the Food and Beverage discipline. Some areas include:
• Menu design • Costing of menus for profitability • F&B Inventory control • Food and Beverage Purchasing • Labor Control
Hotel and Land Brokerage
Three of Generation’s Senior Executives are licensed Real Estate brokers who have special expertise in Hotel Brokerage and Hotel Dispositions. Generation can provide a comprehensive
analysis and opinion of asset value and handle all aspects of property marketing and sale through a separate agreement.
Development, Design and Renovations
The Generation Companies has Turn Key developed over 30 hotels and has overseen multiple hotel renovations and conversions. As such, we have the internal expertise to do complete market and site analysis, replacement cost and repositioning evaluations and other strategic asset management functions.
Purchasing
The Generation Companies has unique purchasing power with its affiliations with the biggest hotel brands in the world. Relationships with major vendors such as LG Electronics, Proctor and Gamble, Sysco Foods and Sealy make Generation an effective and efficient purchasing agent for our clients.
The Generation Companies’ Properties 28 Hotels 3202 Rooms
10 Suburban Extended Stay Hotels, 12 Candlewoods, 3 Staybridge Suites, 2 Mainstay Suites, 1 Homewood Suites
2010 Property Map
Suburban Extended Stay HotelsCandlewood Suites
StaybridgeMainstay
Homewood Suites
B. Photos of Hotels
Rocky Mount, North Carolina Jacksonville, North Carolina
Wilmington, North Carolina
Jacksonville, Florida Charlotte, North Carolina
IV. Receivership Background
A. Receivership Benefits
• Short term, defined relationship • Removal of “Borrower” from control • Protection of asset and cash flow • Minimize devaluation of physical plant • Ensure funds control • Assures payment of taxes, utilities, employees, vendors • Shifts liability to the Receivership LLC • Keeps the “Lender” out of the chain of title • Provide timely/accurate reporting of revenue and expenses • Improve the relationship with vendors, suppliers and regulatory agencies • Allows for the disposition of unused assets • Bond can be posted by the “Lender” to minimize expenses • Expedite negotiations with Franchisors and other interested partners
B. Functional Skills and Services Summary
Asset Management • Approved Superior Court “RECEIVER” for full service hotels • Advisory services for pending legal actions/foreclosures/partnership conflicts • MOLD and ASBESTOS Evaluation and Remediation Supervision • Financial and management reporting to Lenders/Superior Court/Borrowers • Chapter 11 Administration – Debtor in Possession • Experience in securing all City/County/State licenses • Lease/contractor/vendor negotiations • Selecting and hiring of hotel brokerage/management/accounting services for
distressed hotels
Franchising • Expertise with all brand families including Starwood, IHG, Marriott, Hilton, Best
Western, Choice Hotels, Wyndham • Negotiations of interim and long term Franchise Agreements • Relicensing and renovation of hotels in “Default” • Construction supervision/purchasing for renovation to PIP Standards • Negotiations of lender licenses, license renewals, change of ownership licenses • Market development planning and analysis of multi-unit franchise brands • Repositioning or Brand selection for distressed assets • Costing and Analyzing the “PIP” Product Improvement Plan
Development • Full capability to project manage a partially complete or stalled construction hotel • Full hotel renovation and repositioning expertise • Market analysis, site selection, facility design and planning services • Strategic and tactical develop planning, project analysis, budgeting and assisting asset
disposition
C. Qualifications – William F. Smith Managing Director of Asset Management – The Generation Companies (2006 – Present) President of Hospitality Receivership Advisors, LLC (2002 – Present)
An affiliate of The Generation Companies, LLC • Coordinate seamless engagement of Generation property management to deliver a
turn-key hotel asset solution • Experienced receiver for distressed hotels or assets in foreclosure or Chapter 11 • Provides Financial, Management and Legal reporting to the General Court of Justice,
Superior Division, Lenders and Investors as needed
Vice President Hunter Realty Associates, Inc., Raleigh, North Carolina (2001-2005) • Manage the Raleigh brokerage office of Hunter Realty Associates, Inc., Atlanta,
Georgia, a National Hotel Brokerage Firm • Asset management services for financial institutions, owners and investors • Hotel advisory services for renovations, franchise selection and negotiations, market
opportunities
ITT Corporation/Starwood Hotels & Resorts Worldwide, White Plains, New York Director of Development-Mid-Atlantic/Mid-West (1995-2001) • Responsible for the growth of the Westin, Sheraton and Four Points Hotels franchise
system to include product selection, franchise committee approval, product upgrade requirements and all license negotiations.
Bass Hotels Worldwide, Atlanta, Georgia Director of Development-Mid-Atlantic Region (1990-1995)
• Responsible for the growth of multiple brands including Crowne Plaza Hotels, Holiday Inns, Holiday Inn Express, Holiday Inn Sunspree and Holiday Inn Select resulting in the addition of over 200 hotels to the system.
Holiday Corporation, Atlanta Georgia
Director of Development-Southern Region (1972-1982) (1986-1995) • Market distribution and growth of the Holiday Inn System overseeing the licensing
supervision of 490 hotels. Supervised directors for eight districts and coordinated multi-brand expansion with other Corporate Hotel divisions-Hampton Inns, Embassy Suites and Residence Inns.
Personal – William F. Smith • In 1968, Mr. Smith earned a BS in Economics from the University of Tennessee
and immediately joined the US Air Force as a commissioned officer. Upon his discharge in 1972, Captain Smith joined the corporate office financial planning staff of Holiday Inns, Inc. Mr. Smith earned his MBA in Real Estate Finance from the University of Memphis in 1976.
Professional Certification/Licenses • Superior Court Appointed Receiver • Licensed Real Estate Broker State of North Carolina/Hotel Brokers International • Executive Development Program, University of Virginia, Charlottesville, VA • Served as Debtor in Possession of PEC Corporation • Cornell University Brokerage Certificate-Hospitality Valuation Analysis
D. Qualifications – Kevin K. Famiglietta
Director of Asset Management, The Generation Companies
GF Management, LLC – Philadelphia, PA, Vice President of Operations (2009 – 2010) • Managed the takeover of assets in Receivership worth in excess of $200 million • Demonstrated competencies to manage over $100 million in portfolio revenue • Directly accountable for 13 hotels and 2600 rooms • Consistent communication with lenders, asset managers and principals on a weekly
basis • Total understanding of financial reports, capital and operation’s budgeting processes
The Generation Companies, LLC – Durham, NC, Regional Operations Manager (2004 – 2009) • Directly accountable for 15 hotels totaling 1530 rooms in 6 states • Demonstrated competencies to manage $25 million in revenue • Managed the openings of 6 hotels • Presided over the management of 2 renovations and 1 conversion
The Generation Companies, LLC – Durham, NC, General Manager – 122 room Candlewood Suites (2002 – 2004) • General Manager of the Year finalist – 2004 IHG • Rookie of the Year – 2002 The Generation Companies • Quality Excellence Award – 2004 IHG
Applebee’s – Hot Springs, AR, Training General Manager (1996 – 2002) • Managed the opening of 2 Applebee’s restaurants • Directly accountable for the training standards for 6 Applebee’s in Arkansas and
Oklahoma • Lowest Food Cost Award winner • Revenue year over year increase award winner +23% from 1999 – 2000
Holiday Inn – Wadco Services Inns – Arkadelphia, AR, General Manager (1992-1996) • 100 room full service Holiday Inn nestled in a growing community on Interstate 30
between Texarkana and Little Rock Arkansas with 300 person capacity convention center, restaurant and bar. Rev PAR was increased by 20% within the first quarter of implementing an aggressive revenue management and sales strategy initiative.