Iron Horse Proposals

City of Steamboat Springs September 18, 2015Attn: City CouncilRe: Proposal for the purchase of the iron Horse Inn

Steamboat Springs Council Members:

This enhanced proposal is being submitted on behalf of a consortium of three local employers in the community, BAP

Inc., Big Agnes, Inc., and EN-R-G Foods LLC, ("the Companies") all related by common ownership. The Companies currently

employ over 100 employees in Steamboat Springs, and our operations are spread throughout the community. We see the

Iron Horse property as the solution to bringing many of our operations into a single location enabling us to further our

mission to become more productive and employ even more Steamboat Springs employees.

Adjacent to a busy highway, the Iron Horse property is perfectly suited for use as a commercial operation. We

respectfully suggest that it wouid make a better commercial location rather than residential neighborhood.

After reviewing our ability to make an investment in this property, including the necessary costs to make improvements,

we offer the City $1,700,000. We also commit to the citizens of Steamboat Springs escrowed funds in the amount $130,000

at closing specifically earmarked for community amenities on the property as previously presented. These core trail-related

amenities wili be made permanent for community use either by easement or by deed.

We recognize that an offer has been made in excess of this amount. Nonetheless, the original RFP indicated in section V.

Award of Contract that; "The City... reserves the right... to accept the proposal... which best serves the interest of the City

of Steamboat Springs and its citizens."

The common perception is that council should choose the highest bidder. We have a recent, narrowly defined survey by

the Steamboat Pilot that, due to limited survey choices, channeled the majority of respondents to select that very option.

Conspicuous by its absence in the survey was an alternative to support local employers. We challenge the city council in its

decision-making process to see that which is not at first obvious, which is the value employers, especially large employers,

bring to the community and to its citizens.

We feel that the past, present/ and future value that our companies inject into the community in the form of payroll/ the

huge demand for additional goods and services, local sales tax revenue/ philanthropy, and the global marketing of

Steamboat Springs is in keeping with the spirit of the Award of Contract in the RFP.

Big Agnes will need to make the necessary improvements to the property to convert it to commercial office and retail

space. As such, conventional SBA financing wi!l need to be secured prior to closing. These and alt other details will be

embodied in a real estate contract.

Respectfully submitted, /.

William Gamber I!!CEO BAP, Inc., Big Agnes, !nc, & EN-R-G Foods LLC

Big Agnes, Inc.® ,%c Ji^/w. o/^n/wt/

po box 773072 • 735 oak street • steamboat springs, Colorado 80477

toli free: 877-554-8975 • 970-871-1480

[email protected] • www.bigagnes.comROXY ANN, iittle sister of Big Agnes

Kicked in the head whila shoe'n herfavorits niule. ^tank « 1807-1035

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PROCLAMATIONof

The City of Steamboat Springs, Colorado

A PROCLAMATION RECOGNIZING BIG AGNES AS A "COLORADO COMPANY W WATCH" SY THE COLORADOOFFICE OF ECONOMIC DEVELOPMENT AND INTERNATIONAL TRAS>EAND COALITION PARTNERS.

WHEREAS, the role of Micro Entrepreneurial Companies in diversifying our economy Is a key infrastructure of CUTcommunity; and

WHEREAS, Big Agnes has been recognized as a "Colorado Company to Watch" by the Colord.do Office ofEconomic Development and International Trade and coalition partners; and,

WHEREAS, Big Agnes has, and continues to contribute to our community's entrepreneurial recognition, creates

employment opportunities., generates revenue and strengthens our community with philanthropic giving; and

WHEREAS, we realize that to create these companies in a rural Colorado community is a testament to Big Agnescomnutm-ent to our cormnunily.

NOW, THEREFORE, BE IT PROCLAIMED, by the City Council of the City of Steamboat Springs, Colorado thatBig Agnes is a. successful, siistaiâble^ trend-settmg leader and a Colorado Company to Watch.

ADOPTED THIS 2nd day of June, 2009.

Attest:^ "• •••'

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'Paul Antonucci

Steamboat Springs City Council President

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City of Steamboat Springs August 4,2015Attn: City CouncilPO Box 775088Steamboat Springs, CO 80477

Re: Counter proposal for the purchase of the Iron Horse Inn

To All:

This counter proposal is being submitted on behalf of a consortium of three local employers in thecommunity, 8AP Inc., Big Agnes, Inc., and EN-R-G Foods LLC, ("the companies") all related by common

ownership. We are modifying the offer to purchase the entirety of The Iron Horse Inn made in ourpreviously submitted proposal dated June 19,2015 from $1/400,000 to $1/500/000.

In addition, we offer an additional $130,000 earmarked for on-site community amenities. First, wepropose the construction of a climbing wall, climbing rock, or traverse, or combination thereof. The

climbing amenity itself shall be located within an area as generally presented upon the attached site

plan.

Secondly, purchaser wishes to work with the city toward developing a river access easement to belocated as generally shown on the attached site plan.

Finally/ the remaining amenity funds shall be used for bike trail seating, art/ bear proof receptades,

and the like, either on or off of a city easement/ to be decided.Please enjoy our brief digital video presentation.

Respectfully submittecî

William Gamber IIICEO BAP, Inc./ Big Agnes, Inc, & EN-R-G Foods LLC

/ Gâte

Attachments:Digital video memory stickSite Plan

Iron Horse Proposal SnapshotCalculation of fair value

Big Agnes, Inc.® °r/^ JLf/^ o/ômfot.'

po box 773072 * 735 oak street • steamboat springs, Colorado 80477

toll free: 877-554-8975 • 970-871-1480

[email protected] • www.bigagnes.comROXY ANN, little sister of Big Agnes

Kicked in th® head while shoe'n her favorite mule. Hank • 1807-1835

Possible river access andbench through easement

or lease of land back to city.

Bench

Possible easement or leaseto city for pocket park withpublic amenities, maybeclimbing boulder bench.

Bench

Big Agnes, Honey Stinger/BAP owned Green

Iron Horse Proposal Snapshot

Submitted by Big Agnes, Honey Stinger, BAP 8/4/2015

Proposal Highlights1. Consolidate Big Agnes, Honey Stinger and BAP operations on the Iron Horse site

2. Purchase offer - $1.5M

3. Additional on-site community amenity allowance $130,000

4. Potential for seasonal housing leaseback for winter of 2015 -2016

Brands Overview

"The companies" currently employ a combined staff of 90 people (forecasted to be 92 by year

end) with a 2015-budgeted payroll in excess in excess of $4,000,000. Using a multiplier of 1.4

this yields an overall economic impact of nearly $6,000/000 to the local economy.

All but two of our employees reside in Routt County. Total payroll this summer includes over

100 employees when you factor in 10 local high school students with summer positions.

About 65% of staff have office jobs. Unfortunately/ "the companies" office staff (and

approximately eleven dogs) are spread across four separate Steamboat locations/ six if you

consider having to walk outdoors to get from one department to another.

The locations include two in the Copper Ridge area and two small, undersized downtown

locations. "The companies" also operate two active warehouses and multiple storage

warehouses in the Copper Ridge area.

Three local home sales will dose by the end of August to new or relocating employees. Many

other employees either own or are actively pursuing new home or townhome purchases.

Two new Big Agnes management-level employees have relocated to Steamboat Springs from

New Hampshire (four adults, two children) this summer and co-owner Len Zanni relocated his

family from Basalt (four adults, two children). We expect this growth and relocation trend to

continue in coming years.

Project Benefits to the Community

Stronger community partner - As described below the companies are active in philanthropic

activities in the community. Our success, made more possible by consolidating our operations/

wiil permit us to continue in our philanthropic efforts

Community restoration - We view the intrinsic value of a "re-purposed" Iron Horse, located as it

is along the Core Trail and the Yampa River to be compatible with our corporate credo and this

property is a great fit. We see the outdoors as not only our playground, but as the basis for our

livelihoods, and those of our staff, as well. As a local company, we take pride in our community

and believe this this project will improve the positive nature of downtown by relocating our

employees downtown. Moreover, we believe that our project will greatly improve the aesthetics

and function of the existing property.

Public Access and Amenities - We are willing and interested in pursuing a public-private

partnership with the City to allow public access to various points of the property. These

amenities may include riverside benches or improved access and a pocket park with benches

and picnic table, climbing boulder(s), slackline posts, and/ or other amenities stili to be

determined.

Seasonal Housing - If it is decided to leave the 1965 structure in place for the winter of 2015 -

2016, we may be open to a lease back to the City for use as employee housing until the spring of

2016 at a triple net breakeven rental rate.

Sales Tax-We intend to house a Bap/Big Agnes/Honey Stinger "factory' retail store on the

premises which will result in increased sales tax revenue.

Downtown Patronage - We aim to create a central campus for our employees as close to the

downtown core as possible. Our staff will undoubtedly increase their patronage of downtown

retailers, restaurants and other facilities in the area such as the Hot Springs Pool and Fitness

Center, the summer and winter traits at Howelson Hill and the library.

Alternative Transportation - Our project will yield fewer vehicle commuter and intra-office

vehicle trips from staff and visitors and in their place one will observe full bike racks just off the

Core Trait. In 2014 our staff amassed a total of 2027 commuter days (bike/ walk, run, ride share)

which equated to 11,068 miles and approximately 463 total gallons of gas saved and 8,984 Ibs.

of C02 saved. (That's a lot of empty parking spaces!)

Truly Global Reach

Big Agnes is the largest of "the companies" and does business on a global scale, importing its

"best in class" product fines from Asia to its distribution center in west Steamboat. In 2014, we

shipped product from Steamboat Springs to consumers in 55 countries and all 50 states. Major

retailers in the US include REI, Eastern Mountain Sports and Backcountry.com.

All Honey Stinger products are manufactured in the U.S. and Canada and are shipped to our

distribution center in west Steamboat. In 2014, Honey Stinger shipped product to consumers in

16 countries and all 50 states. Major retailers in the US include Whole Foods, REI/ and Philmont

Scout Ranch to name Just a few.

Honey Stinger is especially proud to be a supplier to various entities within the Armed Forces.

Our Philanthropic Support

Several of our employees serve local non-profits in various capacities ranging from volunteering

as a youth mentor with Partners in Routt County, Chamber marketing committee membership,

or serving on the board of Routt County Riders. We recently completed a staff volunteer trail

work day during company hours on portions of the Steamboat Stinger course in conjunction

with RCR.

Our largest philanthropic-oriented event is the annual Steamboat Stinger mountain bike and

trail running race, which celebrates its 5th anniversary in August. Nearly 1,000 participants,

support crew and family members are expected to come to town this year. At! profits are

donated to Partners in Routt County and Routt County Riders.

We are excited to share that YVCF awarded "the companies" their Philanthropists of the Year

award for 2015. We support or sponsor the following organizations; (and others both local and

national) United Way, Partners in Routt County, Rocky Mountain Youth Corps, Routt County

Riders, Steamboat Soccer, Steamboat Springs Winter Sports Club, Steamboat Running Series,

Steamboat Town Challenge Mountain Bike Series/ Gymkhana/ Steamboat Marathon, Girl Scouts,

Girls on the Run, Challenge Fund/ Steamboat Dance Theater and Yampatika/ and we take pride

in company clean up events of a two mile stretch of Highway 131 as part of CDOTs Adopt a

Highway program.

Our Employees• Not only are employees eligible for "industry days' which can be applied to trail work or

community volunteer days but we pledge to help build and maintain the public amenities that

are built upon the property.

• Big Agnes and Honey Stinger have both been awarded Outside Magazine's Best Places to Work

which measures the benefits, location, philanthropy and other attributes of a company and

requires employee survey results to be eligible.

• Open positions garner many local and out of market applicants. A recent Big Agnes Customer

Service Representative position advertisement yielded over 50 applications and a recent Honey

Stinger Marketing Coordinator- Sponsorship position yielded over 35 applicants.

Examples of Climbing Boulders

OUR PRODUCTS

AWARD-WINNING TENTS, BAGS AND SLEEPING PADS

ALL NATURAL HONEY-BASED ENERGY FOOD

Big Agnes Delivers Steamboat Springs to the World

Significant Awards - Updated 7/31/15

2015

Backpacker Editor's Choice Award - mtnGLO technology

Outside Gear of the Year - Rattlesnake SL2 mtnGLO

Active Gear Review ORWM 15 Gear of the Show-Long DrawParka

Backcountry Skiing Canada - Gear of the Year - Helinox Chair One

Good Housekeeping-Best Tents- Rocky Peak4mtnGLO

Men's Health Tech Guide - Rattlesnake SL2 mtnGLO

Gear Institute Best In Class - Rattlesnake SL2 mtnGLO

Yampa Valley Community Foundation - Philanthropists of the Year/ Business Category

2014

Backpacker Editor's Choice Award - Double Z

OutDoor Industry Award (Germany) - Fly Creek UL2

Red Dot Design Award - Helinox Ground Chair

Red Dot Design Award - Helinox Table One

Outside Gear of the Show - Gilpin Falls mtnGLO

National Geographic Gear of the Year - Gitpin Falls mtnGLO

Gear Junkie Best inShow-Gilpin Falls mtnGLO

2013

National Geographic Gear of the Year - Fishhook UL2

Red Dot Design Award - Chair One

Men's Journal Approved - Fishhook UL2

Men's Journal Approved-Q-Core SL

ISPO Product Award Winner - Helinox Chair One

Backpacker Editor's Choice Award-Scout UL2

Outdoor Gear Lab's Top Pick - Flying Diamond 8

2012

National Geographic Gear of the Year - McAlpin SL

Outside Magazine Best in Show Award - Outdoor Retailer Summer Market - Fishhook UL2

Gear Junkie Gear of the Show-Outdoor Retailer Summer Market-Fishhook UL2

2011

*Backpacker-March-Editors' Choice Award-Copper Spur UL4

*0utside-Buyer's Guide-Green Gear of the Year-Copper Spur UL4

2010

Nominated for 2010 Vendor Partner of the Year by REI for the Camp Division

Backpacker Editors' Choice Award - Fly Creek UL2

2009

Co-Founder Bill Gamber named by SNEWS as one of ten Power Players in the Outdoor Industry in January

2009 issue

Big Agnes named one of Colorado's Companies To Watch 2009 by the Edward Lowe Foundation

* Backpacker-March-Editors' Choice Award Green-Salt Creek 2 Recycled tent

Backpacker - March - Gear Guide - Fly Creek UL1 wins "Best All-Around" single person tent

Backpacker - March - Gear Guide - Fly Creek UL1 wins String Ridge 2 wins "Best AII-Around" tent in the

mountaineering category

Outside Magazine Gear Guide - Gore Pass 2 - recognized as "Killer Value"

2008

*Backpacker-April-Editors' Choice Award-Copper Spur UL3

^Backpacker - April - Editors' Choice Award - Cyclone SL Chair Kit

Backpacker Gear Guide - Best All Around two person - Copper Spur UL2

Backpacker Gear Guide — Copper Spur UL2

Rock and Ice - Sprout Award recognizing environmental product construction and the Re-Routt

Collection of products

*NGA-December/January - Best of Adventure-Skinny Fish

* Camping Life-May-Editors' Choice Award-Ripple Creek

Nominated for 2008 Vendor PartneroftheYearbyREiforthe Camp Division

2007

*Backpacker-April-Editors' Choice Award-Emerald Mountain SL3

*0utside-Buyer's Guide-Gear of the Year-Emerald Mountain SL2

*0utside-Buyer's Guide-Green Gear of the Year- Battle Mountain

*Blue Ridge Outdoors-March Gear Guide-Editors' Choice-5eedhouseSL2

Asia Outdoors Tradeshow, Nanjing, China - China Outdoor Equipment Award - Emerald Mountain SL2

*Men's Journal-December-Gear of the Year-Emerald Mountain SL2

The Gear Junkie: Top 10 Gear of the Year Awards 2007-Dream Island

Named 2007 Vendor Partner of the Year by REI for the Camp Division

2006

*Camping Life-May- Editors' Choice Award Dual Core Pad

Blue Ridge Outdoors - February - Readers' Choice Award - Mystic

Blue Ridge Outdoors-February-Readers' Choice Award-Parkview2

Backpacker Gear Guide - Big-Guy Favorite - Parkview 2

Backpacker Gear Guide - Lightest Freestanding Two-Person - Seedhouse SL2

Parkview 2

Backpacker Gear Guide - Lightest Freestanding Three-Person - Seedhouse SL3

Backpacker Gear Guide - Editors' Choice Award Update - Insulated Air Core

Nominated for 2006 Vendor Partner of the Year by REI for the Camp Division

2005

Reserve America -Gear of the Year award-Seedhouse 3

Backpacker Gear Guide - Best Buy Seedhouse 3

2004

*Backpacker Editors' Choice Award 2004 - Insulated Air Core

* Editors' Choice Level Awards

Calculation of Fair Value June 2015

Valuation Consultants - Fair Value ifVacant

Necessary deduction - costs of

demolition & asbestos abatement

Valuation Consultants market valueper August 8, 2014 appraisal

Big Agnes calculation of marketvalue

Our offer to purchase ($250,000premium over market value)

Additional for Community Amenities

Combined counterproposal

;Erca 20C5 estij-na-les ->

ValuationConsultants

$2,000,000

($370,000) Per contrsctor bid J'jne 2GJ'5 ->

$1,630,000

Big Agnes

$2,000,000

($750,000)

$1,250,000

$1,500,000

$130,000

$1,630,000

08/03/2015

Biggest Increase in

Workplace Giving2013-2014

Routt County United Way

HONEY STINGER, BIG AGNES, BAP!

PEOPLE HELPING PEOPLEYOU MADE THE DIFFERENCE

THANK YOU

City of Steamboat Springs June 19,2015Attn: SheliySt.Pierre •PO Box 775088Steamboat Springs, CO 80477

Re: Cover Sheet and Proposal for the purchase and repurposingofa City-owned property, the IronHorse inn.

Ms. St. Pierre:

II. A. 1. Cover sheet. This proposal is being submitted on behalf of a consortium of three local

employers in the community; SAP Inc., Big Agnes/ inc., and EN-R-Foods LLC/ ("the companies") all

related by common ownership. Questions regarding this proposal may initially be directed to Greg Fritz,

Director of Finance, who participated in preparing this submittal. His contact information [email protected] / 970-439-3049.

II. A. 2. Current Operations and Locations BAP and Big Agnes both incorporated in May of 2000, and

EN-R-G Foods (brand name Honey Stinger) followed a year later, incorporating in May of 2001. More on"the companies" .....

Our first brand/ BAP!, short for Bwear Action Products, began long ago, when our fearless leader, andIronman Triathlete, Bill, began selling bike shorts out of his dorm room in college, at Lock Haven, incentral Pennsyivania. Fast forward twenty years and 2000 miles west to BAP's retail store on Oak Streetwhere spandex has made way for the current line of outerwear/softshell Jackets and fleece garmentsand accessories for adults and chiidren. www.wearbap.com. BAP aiso serves as a local retailer of Honey

Stinger and Big Agnes product lines.

Big Agnes has become the preeminent brand in the high performance outdoor camping gear industry.

We name our products, and for that matter, our company, after local peaks/ history, places, and rivers

which is always a fun process, it brings back memories of trips both successful and epic and hopefullyinspires our customers to explore. The reach of Big Agnes products/ which all include mention of ourhometown/ is truly global and brand exposure has never been greater.

Big Agnes is the largest of "the companies" and does business on a global scale, Importing its"best in class" product lines from Asia to its distribution center In west Steamboat. In 2014, we shipped

product to consumers in 55 countries. Big Agnes has gained additional notoriety in 2015 with theintroduction of the mtnGLO™ Collection of tents and tent accessories which include LED lights

integrated into the seams. The company has a long history selling to REi and has partnered with this keyretailer on the launch of these products. Having received many editorial reviews from Backpacker,Outside and other important outdoor lifestyle magazines/ REI chose to advertise mtnGLO™ tent in a fulfpage ad in the May 2015 issue of National Geographic magazine. www.biRaRnes.com

Big Agnes, Inc.® .•%<. Jio//^. o/c€om/m(f

po box 773072 • 735 oak street • steamboat springs, Colorado 80477

toil free: 877-554-8975 • 970-871-1480

[email protected] * www.bigagnes.comROXY ANN, little sister of Big Agnes

Kicked in the head while shoe'n her iavorite mule. Hank • 1807-1835

THE WHERE:GLOBALDISTRIBUTIONBy the end of 2015, Big Agnes produttswili be sold in countries covering morethan 44% of the world's land massl

Honey Stinger Honey Stinger makes nutritious and great tasting honey-based foods including energy &protein bars, gels/ organic waffles/ organic chews, kids' specific snacks and organic honey. Fueling more

than just the country's top cyclists, runners, triathletes and professional teams. Honey Stinger isespecially proud to be a supplier to our Armed Services. All products are manufactured in the U.S.andCanada and are shipped to our distribution center in west Steamboat. In 2014, we shipped product toconsumers in 16 countries.

Honey Stinger Global Domination - 16+ Countries and growingl

All Countries In/;- :.0</7

currentlypurchase HoneyStinper— withmore on the

horizon!

Current Situation "The companies" currently employ a combined staff of 90 people (forecasted to be 92by year end) with a 2015-budgeted payroll in excess in excess of $4,000/000.00. All but two of theseemployees reside in Routt County. Two key Big Agnes employees are relocating to Steamboat Springsfrom New Hampshire this summer and co-owner Len Zanni recently relocated his family from Basalt.

Number of Employees Across all Companies by Quarter Ending

100

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Quarter Ending

Annual Payroll Across all Companies

Annual Payroll with 1.4 Economic Multiplier Effect * S Annual Payroll

soDec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013

soDec 2014 Dec 2015 Est

' Multiplier effect source h(tp;/AViitchdpg,orB/22084'j/coa1-OpfTatiyn-inti;rii,)r-colDra(!o' May 26,2015

About 65% of the above staff have office type jobs. Unfortunately, "the companies" office staff (and

approximately eleven dogs) are spread across four separate Steamboat locations/ six if you considerhaving to walk outdoors to get from one department to another. These locations include two in theCopper Ridge area and two separate downtown locations. "The companies" also operate two active

warehouses and multiple storage warehouses in the Copper Ridge area. Being physically spread across

town in this manner denies the synergy, networking/ and cost efficiencies that may be enjoyed if all ofthe "desk jockeys" were able to share one roof. There are increased vehicle trips/ lost productivity andincreased logistics to operating in this way. We also know/ first-hand, the scarcity of available Steamboatcommercial office space of the scope required for our operation.

Our Vision The July/ 2014 appraisal by Valuation Consultants, Inc. (provided in the RFP documents)concluded the highest and best use of the Iron Horse property to be for redevelopment as a residentialproject catering to mostly the second home markets.

We, on the other hand, view the intrinsic value of a "re-purposed" Iron Horse, located as it is along

the Core Trail and the Yampa River to be compatible with our corporate credo. We see the outdoors asnot only our playground, but our livelihood as well. Without open spaces, not only are we bereft of a

place to play, but so are our neighbors and customers.

Initially/ we will remodel the 1995 structure into commercial office space. We recognize that aremodel of the scope intended wi!l necessitate bringing the facility up to current building code. Non-load bearing walls/ many bathrooms and closets/ wil! be removed, creating large open space work areas

for our staff. The wall mounted heating/air conditioning units will be replaced with a central HVACsystem. We will install new windows, carpet/ paint the interior, and perform cosmetic repairs to theexterior.

The 1965 buildings will be razed, a!! or in part/ on a timeline yet to be determined, but in allprobability in the first year of ownership. Areas of demolition will be landscaped and maintained asopen space until such a time as we have created a master plan for the final development of the site toaccommodate the future growth of "the companies."

ft is not out of the question that we may one day house a Bap/Big Agnes/ Honey Stinger "factory"retail store on the premises.

-Tô^J -^yCSfc-... •-^ -^-^^.

II.A.3. Purchase Our offering price was determined with reference to last summer's appraisal by

Valuation Consultants in which the fair market value (FMV) was stated to be in the amount of$2/000,000 less a factor of $370/000 to convert it to vacant land ($1,630,000 net.) What we've learnedwhile performing our due diligence is that the discount off of the FMV presented in the appraisal wassignificantly understated, specifically in the category of asbestos abatement. After discounting for whatwe have discovered is a more realistic cost of demolition and site improvements/ we respectfully offer$1,400,000.00 for the purchase of the entirety of the Iron Horse.

II. A. 4. If our proposal is selected by the City we shall proceed with our formal 504 SBA financingapplication with a view toward a cash closing within approximately 90 days of the award of the contract.The ultimate purchaser of the property shall be a single purpose/ yet to be formed, entity owned bycertain affiliates of "the companies".

If it is decided to leave the 1965 structure in place for the winter of 2015 -2016, we may be open to alease back to the City for use as employee housing until the spring of 2016 at a triple net breakevenrental rate.

II. A. 5. Financial Capability Please see attached letter from Vectra Bank Colorado.

U.A.6. The remodel of the 1995 structure will commence as early as is practical after the dosing of thepurchase. The demolition and landscaping will probably occur within the first year of ownership. Theexecution of the master building plan will occur when further growth and financial wherewithal permit.

II.A.7 We have decades of time invested in the growth of our companies, our staff and the greaterSteamboat Springs community. We are raising families here and helping our employees prosper andcontribute to the local community both economicaiiy and culturally. We fee! that by submitting a bid forthe Iron Horse property that our intentions and focus should be clear. We aim to create a centralcampus for our employees as close to the downtown core as possible.

II.A.8. Public Benefit Consolidating our office operations in the downtown area will result in a number ofpositive public benefits. Our staff/ visitors and out of town guests who come to town for work trips willbe located closer to downtown retail, restaurant and lodging operations. The effect of relocating somany consumers downtown wii! likely yield increased revenue for these business segments and maypositively impact service providers and the real estate market as witnessed by the recent relocationsmentioned elsewhere. We believe this vision is in alignment with the City and residents of creatingstrong local businesses that will help build the economic and cultural vitality of the downtown and

greater area.

"The companies" have also proven to be active in the community and generous on the

philanthropic side. From raffle and prize donations to cash contributions to Iaea! and regional non-profits, "the companies" support Steamboat in many different ways. Perhaps the single largestphilanthropic-minded event is the annual Steamboat Stinger, which celebrates its 5th anniversary inAugust, mountain bike and trail running race. A!! proceeds are donated to Partners in Routt County andRoutt County Riders. Lastly/ we are excited to share that we have just learned that YVCF will award "thecompanies" their Philanthropists of the Year award in 2015.

We also believe that there are additional community benefits beyond those listed above. Therewill be fewer commuter and intra-office vehicle trips from staff and visitors and in their place one willobserve bike racks full of commuter bikes parked Just off the Core Trail. Our staff wi!l undoubtedly

increase their use of facilities closer to downtown such as the Hot Springs Pool and Fitness Center/ the

summer and winter trails at Howelson Hill and the library. Our employees are extremely passionateabout the outdoor industry/active outdoor recreation and the community. Several of them serve local

non-profits in various capacities ranging from volunteering as a youth mentor with Partners in Routt

County, Chamber marketing committee membership, or serving on the board of Routt County Riders.Lastly, Big Agnes and Honey Stinger have both been awarded Outside Magazine's Best Places to workwhich requires employee survey results to be eligible.

In section two we offered two graphs presenting "the companies" employee count and wage growthfor the five years ending December 31, 2015. While not all of the employees enumerated on the graphare full time equivalents, most of them are. And while the economic growth multiplier shown on thewage graph may be too high/ or too low/ at 1.4, we can all agree that an employees contribution into

the wage base of a local economy has an impact greater than the origina! input.We are proud of the trend lines depicted on these graphs and one can only imagine where they might

track over the next five years. We have already been good citizens/ and good for the citizenry of

Steamboat Springs. We look forward to our future here with enthusiasm. Our call to action by the

City Council is to choose our proposal for the repurposing of the Iron Horse Inn.

IV., V., VI. We agree to the General Requirements of Section IV./ the Award of Contract process of

Section V./ and the Genera! Conditions of Section VI.

RespectfuHy submitted/

f~L.^/

WiHiam Gamberlll Date

CEO BAP, Inc./ Big Agnes, Inc/ & EN-R-G Foods LLC

Attachment: Vectra Bank Colorado regarding financial capability

COLOKADO

June 16,2015

RE: Big Agnes, Inc.

To Whom It May Concern:

Big Agnes/ Inc. is a valued and longtime client of Vectra Bank. The company maintains various

performing credit facilities with the bank and will be a good candidate for SBA 504 financing to purchase

theiron Horse Inn property. The SBA 504 loan process will take approximately 90 days to finalize

subsequent to receipt of a complete loan package. Please do not hesitate to contact me directly with

additional questions. Thank you.

Sincerely/

t^M^ ^f^^JL^}

MellssaGaertner

Vice President

Commercial Banker

STEAMBOAT SPRINGS2153 RESORT DRIVE STE 300 STEAMBOAT SPRINGS, COLORADO 80487

PHONE; 970 870 4251 FAX: 970 879 5693www. ve c [ raba nic. corn

Attn: Shelly St. Pierre

June 22, 2015

RE: RFP - INTENT TO PURCHASEIRON HORSE INN333 S. LINCOLN AVENUESTEAMBOAT SPRINGS, CO 80487

Dear City of Steamboat Springs:

On behalf of Stephen and Michelle Caragol ("Buyer"), I am pleased to present thefollowing terms and conditions to purchase the Iron Horse Inn ("Property") from the Cityof Steamboat Springs, CO ("Seller"). The parties will use a standard Colorado Agreement

to Buy and Sell Real Estate (the "Agreement"), with appropriate modifications to reflectthe specific transaction.

SELLER:

BUYER:

PROPERTY:

INTENDED USE:

DEED RESTRICTION:

City of Steamboat Springs

Stephen and Michelle Cai'agol or Caragol Trust or LLCwhere Stephen and/or Michelle are the manager

Iron Horse Inn

333 S. Lincoln Avenue, Steamboat Springs, CO

Buyer intends to operate the property as short-term rentalhousing focusing on service sector employees in the

community to satisfy the lack of seasonal affordablehousing opportunities. A small portion of the propertycould be utilized as a European style hostel where all ages

of guests are welcome focusing on hiking in the summerand skiing in the winter.

The long-term plan is listed as the Intended Use; however,

to guarantee that tlie Buyer is serious, the Buyer agrees to a

two (2) year use restriction on the property to limit the useto short-term rental housing focusing on service sector

employees and hostel.

PURCHASE PRICE: One Million Dollars ($1,000,000.00)

EARNEST MONEYDEPOSIT: Fifteen Thousand Dollars ($15,000.00)

CLOSING PROCEEDS: Nine Hundred Eighty Five Thousand Dollars ($985,000.00)

DATE OF CLOSING:TRANSFER OF TITLE:

INSPECTION ANDDUE DILIGENCE:

APPRAISALPROVISION:

October 1,2015General Warranty Deed

Buyer, acting in good faith, has the right to haveinspections (by one or more third parties, personally or

both) of the Property and Inclusions (Inspection), atBuyer's expense. If (1) the physical condition of theProperty, including, but not limited to, the roof, walls,structural integrity of the Property, the electrical, plumbing,

HVAC and other mechanical systems of the Property, (2)the physical condition of the Inclusions, (3) service to theProperty (including utilities and communication services),systems and components of the Property (e.g. heating and

plumbing), (4) any proposed or existing transportationproject, road, street or highway, or (5) any other activity,odor or noise (whether on or off the Property) and its effector expected effect on the Property or its occupants is

unsatisfactory, in Buyer s sole subjective discretion. Buyer

may, notify Seller in writing within ninety (90) days fromthe mutual execution of the contemplated Agreement thatthe contemplated Agreement is terminated.

Buyer has the sole option and election to terminate

contemplated Agreement if the Property's valuation,

determined by an appraiser engaged on behalf of Buyer, isless than the Purchase Price.

CURRENT SURVEYREVIEW:

ENVIRONMENTALPROVISION:

BROKER:

CONFIDENTIALITY:

Seller to provide current ALTA Survey at Sellers expense,

for Buyer's review and approval.

Seller to provide environmental inspections of the property

including Phase I and Phase II Environmental SiteAssessments as applicable. Buyer has the right to terminate

the contemplated Agreement within ninety (90) days fromthe mutual execution of the contemplated Agreement based

on any unsatisfactory results of Environmental inspection,

in Buyer s sole discretion by notifying the Seller in writing.

Tenant represents that it has dealt with Michael Taylor inconnection with this letter of intent to purchase and the

Seller is obligated to pay 2.5% commissions in connectiontherewith.

Neither Seller nor Buyer, nor any of their principal

shareholders, partners, employees, agents andrepresentatives will disclose the subject matter or terms of

2

this letter agreement, financial information of the Buyer,or any other pertinent details regarding the transaction

contemplated hereby, except to legal, financial and

business advisors, unless and until written consent isobtained from the other, which consent may be withheld at

Seller's and Buyer s sole discretion.

This Letter of Intent is meant to outline the initial terms only and is in no matter intendedto obligate any party contractually, and no such obligation shall arise unless and until a

Contract to Buy and Sell Real Estate is fully executed by all parties. No prior orsubsequent correspondence or course of dealing between Buyer and the Seller shall be

construed to create any contract with respect to the Property. This paragraph supersedes

any conflicting language herein.

Submitted this 22nd day of June,2015.

Agreed and accepted this 22nd day of June, 2015.

PROPOSED BUYER: Stephen Caragol

_(^$^fe^€taragol

Agreed and accepted this _ day of June, 2015.

SELLER: City of Steamboat Springs

BY:

This offering has been prepared solely for informational purposes. It is designed to assist a potentialinvestor in determining whether it wishes to proceed with an in-depth investigation of the subjectproperty. While the information contained herein is from sources deemed reliable, it has not beenindependently verified by the Coldwell Banker Commercial affiliate or by the Seller.

The projections and pro forma budget contained herein represent best estimates on assumptionsconsidered reasonable under the circumstances. No representations or warranties, expressed orimplied, are made that actual results will conform to such projections.

This document is provided subject to errors, omissions and changes in the information and is subjectto modification or withdrawal. The contents herein are confidential and are not to be reproducedwithout the express written consent.

Interested buyers should be aware that the Seller is selling the Property "AS IS" CONDITION WITHALL FAULTS, WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE.Prior to and/or after contracting to purchase, as appropriate, buyer will be given a reasonableopportunity to inspect and investigate the Property and all improvements thereon, eitherindependently or through agents of the buyer's choosing.

The Seller reserves the right to withdraw the Property being marketed at any time without notice, toreject all offers, and to accept any offer without regard to the relative price and terms of any otheroffer. Any offer to buy must be: (i) presented in the form of a non-binding letter of intent; (ii)incorporated in a formal written contract of purchase and sale to be prepared by the Seller andexecuted by both parties; and (ill) approved by Seller and such other parties who may have aninterest in the Property. Neither the prospective buyer nor Seller shall be bound until execution of thecontract of purchase and sale, which contract shall supersede prior discussions and writings andshall constitute the sole agreement of the parties.

Prospective buyers shall be responsible for their costs and expenses of investigating the Propertyand all other expenses, professional or otherwise, incurred by them.

Friends of the YampaFriends of the Yampa

PO Box 774703/ Steamboat Springs, CO 80477

FRIENDS""'"^ .^-:VAMPA

The Friends of the Yampa's mission is to protect and enhance the Yampa River's environmental

and recreational integrity through stewardship, advocacy, education and partnerships.

COVER LETTER

June 19, 2015

Dear Steamboat Springs City Council,

Friends of the Yampa (FOY) and many other Yampa River advocates would like to

propose continuing the use of the Iron Horse Inn as short-term workforce housing but

gradually transition it into a new Yampa River amenity, The Iron Horse River Park. The

new Iron Horse River Park will allow recreational access to the river and serve as a

bookend to the intense recreational uses in the downtown Steamboat Springs river

corridor.

THE IRON HORSE RIVER PARK PROPOSAL WILL:

1. Allow workforce housing to remain for a period of three to five years.

2. Address river access issues from Iron Horse River Park.

3. Create the Iron Horse River Park for river access and public uses which will add a

greater long-term value for the community than other proposed uses.

4. Increase public space on the Yampa River for residents, visitors, and future

generations.

5. Add an additional river access point which will lead to better management of the

Yampa River through Steamboat Springs.

6. Add public parking for Yampa River access and recreation.

7. Address storm water runoff issues.

8. Create an opportunity to carry out the vision of the Yampa River Management Plan

and address unresolved issues for the long-term benefit of the residents and visitors to

Steamboat Springs:

• Create an environment where the stewardship of the Yampa River will

be improved.

* Address legal issues concerning uses of City of Steamboat Springs owned

river parcels with existing conservation easements held by Colorado

Parks and Wildlife. These conservation easements were purchased

using Fishing is Fun Grants for fishing and passive wildlife recreation.

• Create an opportunity to adhere to the intent of the existing Yampa

River Management Plan relative to private non-commercial tubing

access.

• Allow for the separation of uses on the Yampa River where the

recreational experiences for the public will be improved.

• The Iron Horse River Park will be the designated upstream river public

access for private non-commercial tubers. Commercial tubing access will

remain downstream of 5 Street.

• Create the necessary downtown Yampa River focal point for river

education and enforcement of the Yampa River Management Plan by

seasonal river rangers based at the Iron Horse River Park.

Friends of the Yampa believes this proposal meets the important goals of preserving important

workforce housing until it can be replaced, provide a beautiful river park, adding an important

and strategic access point to the river and give the City of Steamboat Springs the time necessary

to assess the best long-term outcome for the Iron Horse Inn site. The Friends of the Yampa

understands and it is our intent through the planning process of the proposed interim period to

adhere to the City Council's goal as stated in the City's Economic Development Policy

"requiring the funding of or plan for funding ongoing operating and maintenance costs for new

capital construction prior to construction " of the Iron Horse River Park.

Submitted by Friends of, the Yampa

""u"j'.v^t^~By; Kent Vertrees

For The Friends of the Yampa Board of Directors

Kent Vertrees

Phone: 970-846-7933

Email Addresses: [email protected] , [email protected]

t.i

Friends of the YampaPO Box 774703,

Steamboat Springs, CO 80477

FRIENDS <";7nr'VAMPA

The Friends of the Yampa's mission is to protect and enhance the Yampa River's environmental

and recreational integrity through stewardship, advocacy, education and partnerships.

IRON HORSE COMMUNITY PROPOSAL

THIS PROPOSAL ("PROPOSAL") is submitted by the Friends of the Yampa ('TOY")in response the CITY OF STEAMBOAT SPRINGS (the "City") Request for Proposals("RFP") for the Iron Horse Inn parcel.

The following exhibits are attached and included as part of this Proposal:

Exhibit A - Iron Horse Proposal Funding

Exhibit B - Iron Horse Proposal Timehne

Exhibit C - Letters of Support

INTRODUCTORY STATEMENT

The FOY presents this Proposal to the City in response to the City's RFP for theIron Horse Inn Property of March 17, 2015. The subject of this Agreement is a 2.361-

acre parcel located at 33 1 and 333 South Lincoln Avenue, Steamboat Springs, CO 80477,with improvements, owned by City which is commonly known and referred to in thisProposal as the "Iron Horse".

The FOY in presenting this Proposal understands that it will take time to bringthis Proposal to fruition. The FOY is willing to work with the City and the Communityof Steamboat Springs to find the best manner to accomplish the goals of this Proposal.The FOY through this Proposal is volunteering to take the leadership in minimizing theCity's capital expenditures and to accomplish the stated goal of the City's EconomicDevelopment Policy (2011) requiring the funding of or plan for funding ongoingoperating and maintenance costs for new capital construction prior to construction of theIron Horse River Park. See Exhibit A - Proposal Funding.

The City purchased the Iron Horse in 2007 with the intention of providing rentalhousing for transitional, seasonal, and year-round employees of the City and the private

1Friends of the Yampa

Iron Horse Park on the Yampa River

sector. Since 2007 the Iron Horse has been operated and managed as workforce housing

by various parties under contracts with the City. The City in its RFP is willing toconsider a proposal for the repurpose of the Iron Horse.

The FOY is a 35 year-old. Steamboat Springs based organization. In 2011, thisgroup became a 501 c3 nonprofit. Over the years, FOY and the City have worked on a

number of Yampa River focused community projects in Steamboat Springs and along theYampa River watershed. FOY has spearheaded several river based improvement projects

including building river structures like Charlie's Hole, the D-Hole and features in andalong the river from the Iron Horse and thru downtown Steamboat Springs. FOY hosts

several annual signature events including the Yampa River Festival, the State of theYampa address, the Yampa River Awareness Project, the Big Snow Dance and annual

river clean ups. FOY was a key contributor to the City of Steamboat Springs'

Recreational In-Channel Diversion application that was granted to the City by theColorado Water Conservation Board.

The City and the FOY recognize the economic and cultural importance of thearea's tourism-based economy. Winter tourism is based on skiing and other winter

activities and summer recreation is based on the abundant natural resources and open

lands epitomized by the Yampa River with access for fishing, boating and wildlifewatching and the adjacent mountains that provide a multitude of hiking and hiking trails.

The City, Routt County, the Yampa Valley Housing Authority, the SteamboatSprings Economic Development Council and the Steamboat Springs Chamber Resortrecognize the lack of workforce housing in the Steamboat Springs Area. These entitiesrecognize that workforce housing for our service industry workers is necessary for the

area's tourism based economy.

The City through the vision of City Council understands the importance "toenhance Steamboat Springs unique sense of place and its vibrant and healthy community

for the future." One of the City s Goals is to "Preserve open space and agricultural lands

while integrating appropriate recreational opportunities whenever possible."

The City recognizes that in order to further this vision and goal that it is necessaryto prioritize the Yampa River as the most important community natural resource. This

vision and goal is acknowledged in Strategy OS-5.1(b) ofthe Steamboat Springs AreaCommunity Plan which states the importance to "Provide and Manage River Access -

Develop a rivers and creeks (riparian areas) access management plan and maintainappropriate access points to the Yampa River."

The City and the FOY acknowledge that the goals of this Proposal are consistentwith the vision of the City and the Steamboat Springs Community: 1. Provide interimworkforce housing and 2. Provide access for recreation for our residents and visitors tothe Yampa River while protecting its natural environment.

Friends of the Yampa

^9//^f^^^mSS RFP,Iron Horse Park on the Yampa River

The FOY has successfully worked as a partner with the City on a number ofplanning and structure improvement projects including the Yampa River Master Plan, theYampa River Structures Project, the City's Recreational In-Channel Diversion water

right, the Phase I Yampa River Structures Project, the build out of the Yampa RiverBoating Park (Charlie s Hole, D-Hole and features from the Iron Horse thm downtown

Steamboat Springs). FOY has worked in partnership with the City on tree plantingefforts, organized river clean ups, ADA access locations and had board members

participate on other City based boards, planning efforts and presentations. The FOY iscertain that a partnership with the City on the Iron Horse project will be successful.

The FOY acknowledges that this Proposal contains a long-term vision and willrequire a three to five year planning effort to accomplish the goals of this Proposal. SeeExhibit B - Proposal Timeline. This effort will be a success not only because the

Community of Steamboat Springs is supportive of this vision but because the FOY isintent on creating a successful model for future community efforts to increase the accessto the Yampa River while protecting this important natural resource.

The Iron Horse Parcel is a unique site. Even though it has been used as a

commercial accommodations site at least since the 1960s, it is located on one of the last

free flowing rivers in the Western United States, the Yampa River. There are few placesin the world where a major river runs through the downtown of a community. The

Yampa River has been recognized as not only the most important feature of Steamboat

Springs but also of Colorado. The Yampa River is one of those quality of life featuresthat helps create the unique ambiance of Steamboat Springs. In recent years the YampaRiver has seen exponential growth of its use by residents and visitors. These uses

include: whitewater kayaking, rafting, fishing^ fly-fishing, swimming, tubing, and paddleboarding.

These more visible uses are overshadowed by what the Yampa River brings to

Steamboat Springs including: wildlife habitat, bird watching, picnicking, and just theenjoyment of watching the flow of the river. It is important that the Steamboat SpringsCommunity continue to protect the Yampa River and increase the public spaces whereresidents and visitors can enjoy this great amenity. The Yampa River is one of the main,if not the main, legs of our economic future. The Yampa River is the thread that ties the

Yampa Valley to its past and future.

The FOY presents this Proposal to the City as a community plan to further thevision and goals of the City. The FOY will work with the City, the Steamboat SpringsPark and Recreation Commission (P&R Comm.) and community members to fulfill thesecomplementary economic, environmental, and recreational goals: 1. Protect and createrecreational opportunities of our most important natural resource, the Yampa River; and2. Promote the well being of our important tourism based economy. This proposal

creates the opportunity for temporary workforce housing for a period of three (3) to five(5) years; and 3. As a final goal, the transition of the Iron Horse into a City owned Iron

Horse River Park with recreational river access.


?^^)^^mss RFP,Iron Horse Park on the Yampa River

The FOY sees the acceptance of this Proposal as the opportunity for the City andthe Steamboat Springs Community to accomplish the following:

1. The creation of the Iron Horse River Park will not only allow workforce

housing to remain at the present Iron Horse Inn site.

2. With the creation of the Iron Horse River Park the Yampa River ManagementPlan can be improved and implemented. The new river access will be the upstream

access for private tubers. The Iron Horse River Park will allow private tubers to havetheir own access and a longer river reach for tubing than commercial tubers whose access

will remain downstream ofFiftli Street. With all private non-commercial tubers moved

to the Iron Horse River Park the upstream river reaches will be maintained for the use of

fishermen, boaters, and passive recreation. This separation of uses will allow for a betterexperience for all and facilitate the education about and enforcement of the rules and

regulations of the Yampa Management Plan.

3. This separation of uses will promote an improved stewardship of the YampaRiver and solve legal issues with the conservation easements of three City-owned river

parcels purchased with Colorado Parks and Wildlife Fishing is Fun grants that containrestriction of the uses that negatively impact fishing and passive wildlife recreation. Thetubers are not only an important activity for residents and visitors alike but are also themajor contributors to the problem of river trash. The concentration of tubing use to a

limited reach will allow for a better cleanup and maintain the remaining reaches of theYampa River as more pristine and adhere to the intent of the Yampa River Management

Plan.

4. The creation of the Iron Horse River Park will create the facility where theenforcement necessary to ensure the separation of uses and to advance the vision of the

Yampa River Management Plan can be located. The Iron Horse River Park cottage can

be the headquarters for the bicycle enforcement officials who will not only patrol theriver corridor by way of the core trail but will also be able to assist and educate the publicin regards to the Yampa River as a global and community resource.

The creation of the Iron Horse River Park with river access will be the

opportunity for the City to create a model for the management of multi-user urban river

resources in Colorado and the West. The Yampa River is not the only urban river

corridor experiencing increased uses. There are other communities i.e. Boise, Idaho and

Durango CO which are creating plans to manage their river corridors. These

communities are facing similar pressures from river user issues like we have in

Steamboat Springs but they do not have the conservation easement issues or the quality

fishery like we have on the Yampa River thru Steamboat Springs.

The City also has a local model for the separation of uses: the USFS management planfor the separation of skiers and snowmobiles on Rabbit Ears Pass. The FOY wants to

work with the Community and the City to revise and update the Yampa River

4Friends of the Yampa

M]iIron Horse Park on the Yampa River

Management Plan in order to give the best possible experience to our residents and

visitors.

The Iron Horse River Park will add additional parking to the Yampa Rivercorridor. The number of parking spaces will be determined through the studies anddesign of the park relative to the space needs to accommodate the various uses including

but not limited to: river access, swimming, picnicking, and green spaces in a naturalriparian environment. The Iron Horse River Park will be complimentary to the adjacent

Rich Weiss Park, the core trail, and the adjacent green spaces. In the future the Iron

Horse Park could have a pedestrian bridge which would allow the public to access thepublic spaces if available on Snake Island.

In order to accomplish the maximum benefit for the City and public through theinterim workforce housing period, the FOY is willing, if asked by the City, to assist theCity in finding a remedy to the river access issue at the Iron Horse site.

The FOY in submitting this Community Proposal has had conversations with thevarious Yampa River users including: fishermen organizations, commercial tubing

entities, members of the public, and Colorado Parks and Wildlife. See Exhibit C -Letters of Support. This Proposal has evolved through these contacts and it can be

expected to change and be refined as the Proposal is implemented.

Upon final acceptance of this Proposal the FOY agrees to work closely with theCity in furthering the mutual goals of the FOY and the City. The City as owner of theiron Horse Inn parcel and the Community as the beneficiaries of this Proposal will beconsulted throughout the Iron Horse Project. If there are any questions, the FOY would

be happy to meet with the City to clarify any aspects of this Community Proposal.

Thank you for your consideration.

FRIENDS OF THE YAMPA

Kent Vertêes f^r theTriends of the Yampa Board of Directors


?M^%^^:mgs RFPÎron Horse Park on the Yampa River

Exhibit A: Iron Horse River Park Proposal

PROPOSED FUNDING FOR THE IRON HORSE RIVER PARK

City to obtain a Lease from the Sheraton/Steamboat Ski Corp entity for City Building A,

the hotel, with its 26 units and Building B, the apartments, with its 27 units as workforce

housing for a period of 3 to 5 years: $15,000/mo for approximately 4 months.

Great Outdoors Colorado Grant for Park Design: Approximately $75,000 for a $100,000

Planning Grant

Explore Conservation Easement for the removal of existing structures and development

rights; Possibility of $500,000 based on $900,000 appraised fair market value.

Great Outdoors Colorado Grant for Park Construction to be determined by Planning

Grant

Other Ideas pending:

Pursue funding through Gov. Hickenlooper's new Inspire Initiative which creates a

$25,000,000 Great Outdoors Colorado fund to ensure that urban parks will be built within

walking distance of Colorado citizens.

Ideas for funding for Maintenance of the Iron Horse Park and Yampa River

Management Plan Enforcement that will be pursued through the planning process:

Set up a Fund where individuals can donate for the improved stewardship of the

Yampa River and the maintenance of the Iron Horse River Park.

Create a Fund for donations by fisherman organizations to assist in the separation

of use and the protection of the fishing qualities of the Yampa River.

Create a funding mechanism for the enforcement of the Yampa Management Plan

Exhibit B: Iron Horse River Park Proposal

PROPOSED TIMELINE FOR THE IRON HORSE RIVER PARK

September 1, 2015 to November 1,2015

Discussions with the City and finalization of this Timeline and Proposal.

November 1,2015 to November 1,2016

The City as owner of the Iron Horse will lease or propose to use City Building A, the

hotel, with its 26 units and Building B, the apartments, with its 27 units as workforce

housing for a period of three (3) years with the possibility of extending this use if there is

a community need for a period not to exceed a total of five (5) years.

The Iron Horse River Park Advisory Committee will be formed ("Iron Horse Advisory

Committee") to assist and advise FOY in fulfilling the responsibilities of this Proposal

and Timeline. Proposed members of the Iron Horse Advisory Committee will include: a

City representative appointed by the Steamboat Springs City Council, a representative of

Steamboat Springs Parks and Recreation Commission appointed by the Steamboat

Springs Parks and Recreation Commission, a representative of Colorado Parks and

Wildlife ("CPW") appointed by CPW, a representative of the Yampa Valley Land Tmst

("YVLT") appointed by the Board of the YVLT, and a representative of the Friends of

the Yampa ("FOY") appointed by the Board of the FOY. These founding members may

appoint additional members. All members including additional members will have full

voting rights.

The FOY working with the City and the Iron Horse Advisory Committee will create a

process to refine what will be the purpose and needs of the Iron Horse River Park.

The FOY will apply to Great Outdoors Colorado for a Planning Grant for the designing

of the Iron Horse River Park which could include but not limited to these uses: parking

area, a new river access, a green space, a picnic area, swimming area, and river ranger

education and enforcement facility. The new Iron Horse River Park will not only

preserve this stretch of the Yampa River for future generations but also be complimentary

to the adjacent Rich Weiss Park and existing open space and the core trail.

November 1, 2016 to November 1,2017

The City continues to lease or use City Building A, the hotel, with its 26 units and

Building B, the apartments, with its 27 units as workforce housing.

The FOY and the Iron Horse Advisory Committee working with the design and the

information from the interface with community groups and the public will proposed

amendments to the Yampa River Management Plan for the separation of the various users

of the Yampa River in order to protect the resources of the Yampa River for future

generations and to grant greater access to the Yampa River through a new river access at

the Iron Horse River Park.

Finalize the plans for the Iron Horse River Park with input from all interested entities.

November 1,2017 to November 1,2018



The FOY will apply for a grant from Great Outdoors Colorado for the development and

construction of the Iron Horse River Park per the plan as developed through the planning

process.

The FOY will assist the City in applying for a conservation easement on the Iron Horse

Inn parcel. The FOY with assistance from the Iron Horse Advisory Committee will

research funding sources for the conservation easement.

November 1, 2018 to November 1,2019



Demolition of the existing structures and the construction of the Iron Horse River Park

will take place after the close of the ski season. Possible retention will be considered of

the existing small structure on the west side of the Iron Horse site for housing river

information, education, and enforcement entities as per the plan as developed.

Construction will include a parking area, river access, green space, picnic area, and

landscaping.

Close on the conservation easement for the Iron Horse Inn parcel.

June 2020

Dedication of the Iron Horse Park as a new Steamboat Springs City Park will be

scheduled at a convenient time for all participating entities.

Ben Beall

41970 CR 36


970-879-4234

[email protected]

Mr. Bart Kounousky

President Steamboat Springs City Council

137 10th Street

PO Box 775088


June 22, 2015

Regarding: The Friends of the Yampa Proposal for the Iron Horse Community Proposal

Dear President Kounovsky/

The Friends of the Yampa Proposal for the Iron Horse site contains a vision for the future that

has given Steamboat Springs praise from around Colorado and the United States. The creation

of a River Park on the banks of one of the last free flowing rivers in the Western United States

will be another testament to the Steamboat Spring's Community in their two decade attempt to

preserve the natural environment that makes this place attractive to residents and visitors. The

epitome of this natural environment is the Yampa River.

I have lived and participated in this two decade effort to preserve our land and communities. As

a County Commissioner for eight years, as Chairman of the Yampa River System Legacy

Partnership/ and as Chairman of the Emerald Mountain Partnership/1 have been involved in

many of the land conservation projects in Routt County and Steamboat Springs.

What the Friends of the Yampa proposes to accomplish at the iron Horse site is no less daunting

than many of the other conservation projects that some said would never happen: the creation

of Routt County's Purchase of Developments Program, the Yampa Valley Land and Cattle

purchase, the additions of lands surrounding Howelsen Hill/ the parcels purchased all along the

Vampa River with the help of Colorado Parks and Wildlife/ and the Emerald Mountain Land

Exchange. The creation of the Iron Horse River Park will take time/ energy, and creativity to find

funding sources. The Community has done it before. We can do it again.

The Friends of the Yampa, as the vehicle for the Community/ is only asking for the chance to

create the Iron Horse River Park which will protect the Yampa River, add a park with a river

access for recreational useoftheYampa, and refine the management of the Yampa River

through Steamboat Springs which will allow future generations to enjoy and use the river.

Many times I have heard residents and even leaders of Steamboat Springs apologize for the

City's purchase of the Iron Horse. Let's turn it into a positive! Where in Colorado does a

municipality own a 2 to 3 acre site on one of the last free flowing rivers? Where in the whole

United States does a municipality with an economy based on attracting residents and visitors

have the opportunity to create an amenity that can add to the quality of life that drives our

economy?

The Friends of the Yampa/ with this Proposal, is asking for the chance to create value for the

community. The Iron Horse is in the center of Steamboat Springs. Let's imagine the future. It

may be difficult but it will be worth it

Thanfôujprimîningthe Iron Horse River Park/

June 22, 2015

Steamboat Springs City Council137 10ttl Street

PC) Box 775088Steamboat Springs, CO 80488

Dear City Council Members: Bart, Waller, Sonja, Scott, Kenny, Tony and Scott,

I encourage your strongest yupport for the Friends ofthe Yainpa's proposal for the crealion oT'the

Trun Iloryc Rive PEirk. The multiple bene(:lts of this visionary and commimity-i.bcusecl projôya!

create a rare opportunity to address lon^-stancling river n-umE-igumcEit issues in a positive and

proactive inanner while also provide new opporlunities lor ouf coinmunity and j'iver usery.

Having worked for over three decades to conserve the very best ofvvjiat the Yampa Valley has to

offer 1 am passionate about the Yampa River, the lifebloocl of our valley nncl the common threaci

thfoughout all ofNorthwest Colorado. Working with Tlie Nature Conservancy, Yampn Valley

Umd Trust First initialed [he Yampa River System Legacy Projecl thatlias since grown to include i\

tnultUnde of partners from both Routl and MoITat Counlies willi participation at [he federal, state,

and local levels from a diversity o'f backgrouncis oFbuyinesy, recreation, education, agricuitnrc Eind

conservation - alt with y singulnr focus ol protecting the remarkable - - yet vulnerable m Yampa

River and its siuTouncHng lands.

Our collective efforts through [he Yampa River System Legacy Project have brought tens of

millions of dollars to our community H'om a diversity of outside fimders, leveraging many tens of

millions more that have been invested in perpcUml assets thai benefit our uomnumity - today and

into the Future. Furthermore, economic .studies based out of Colorado State University have

documented thai our efTorl.s cirounct land conservalion in Routt Coiiiity and (he Yampa Kiver Valley

generate more revenue for local businesses. Visitors urc more attracted to the area, stay longer and

spend more per day as a rcsiflt of our open land (and river!) resources. Our commumly has alô

captured the attention of location neutral employees and businesses, not to mention many outdoor

recreation based businesses. Now that's economic development! The FOY proposal for Ihe Iron

Horse River Park creates anolher opportunity to follow on this Legacy ofYampa River protection.

ro jôx 773014 ^ Sieasnboai Springs, Colorado 30477 ^ (970)879-7240 @ www.yvlt.org

With a dccndcs-long [rack record ofnchieving extraorclinary projects with great success, the Iron

(Jorsc River Park us conceptually proposed is extremely cloablc. I recall in the early 80's when T

first discovered that other comiminitEes were conserving lands and rivers, ]:mrchasing development

rights WK\ creating amazing futures fur Eheir communities. None ofthls existed in our communiEy aE

thi-H time and many thought concepts such as these were impossible (Ihc miysaycry!). l-lowcvei- with

perseverance and dedication we have clcnionstnited Ihal anything (almost anything!) can be

achieved. Locally this is dcmonsfrated through projects and programs that have been implcmunteci

since those early days. This includes the c/rcalion of a PDR program which has been used locally to

ftincl Eancl and river conservation projects (înd to match funcl from outside funclers such as GOCO);

the Yampo Valley Land and Cattle acquisition followed by the Emerald Mountain Luml Excliange

(which also induded our comnuinity initiating a chnnge to Ihc Colomclu Constitulion); the additions

of lands siUTOunding Howciscn I J.ill that expand traii.s E'br year-t'oiuKl recrealion; Y^mpn River

HCCCSS cicquisitions; Lind so many more. Some of us in this community arc cncn'gizcd by our passion

for our commimity and thrive on these chiltenges that result in a better community for all of those

[\Vt\{ that live, work and play in the Y^mpa River Valley - residents and visitors alike.

The City's current ownership of the Iron Morse site ci'eates a remarkable, once in a lifetime

opportunity to stay the course of ownership and participate in the dcvciopmenl o.Ca project of

lasting "Legacy" stature that will provide a return on mvcslmenl for our community many times

over the originat mvcstmenl. Again, ? encourage your strongest support for - and pcirticipation w

the Friends of the Yampa's conceptual proposa! for Jron Horse River Park. As we say at Yainpa

Valley Land '! rust • • this is your remarkable opporlunity to Leave a Lasting Legacy.

Sincerely,

c. .-.^

^Z^>? <y~- ~— ——-^Susan Dorsey

Executive Director Yainpa Valley Land Trust

Founding Partner Yampa River Syylcm Legacy 3)roJect

Parf<s and WMife

Department of Natural Rc'sources

Steamboat Springs Service Center925 Weiss Dr.Steamboat Springs, CO 80487P 970-870-2197 | F 970-871-2853

Mr. Bart KounousRy

President Steamboat Springs City Council137 10th Street

PO Box 775088Steamboat Springs, CO 80477

June 22, 2015

Regarding: The Friends of the Yampa Proposal for the Iron Horse Community Proposal

Dear President Kounovsky,

Colorado Parks and Wildlife (CPW), a Partner with the Friends of the Yampa (FOY) onthe Yampa River System Legacy Partnership/America's Great Outdoors (LegacyPartnership) is sending this letter of support for the FOY proposal in regards to theIron Morse parcel in Steamboat Springs.

The FOY has made presentations and explained their Proposal at the LegacyPartnership meetings in April and May of 2015.

The CPW supports the FOY Proposal because it furthers the vision not only of CPW butalso the Legacy Partnership.

The FOY Proposal promotes the Legacy Partnership vision wifch the following:

1. Protects the natural resource of the Yampa River by creating a river access point

for private tubing which would allow the Cifcy to adhere to fche Legacy Partnershipsupported conservation easements held by Colorado Parks and Wildlife on theTrafalgar, Baxter, and Mt. Werner parcels owned by the City of Steamboat Springs.

The funds for these conservation easements were supported by the LegacyPartnership in order to protect the fishing and passive recreation of the Yampa River.2. Creates a Yampa River Park and access point for river recreation in Steamboat

Springs.

Bob D. Broscliekl, Director, Colorado Parks and Wildlife »Parks and V/ikftife Commission; Revert W. Bray, Chair o Chris Caslilian, Vice Chairwin tLu-rto Ctu-mfnni . Inhn HfSmr/f Ir » Rilll/aiUi * IVata DSjfif • lart*iAT Rrilvit * lanwc Uifill • nnan Winnfuilfi a JHichdttn 71i1inwrman • Atiav 7n

^:^&.-•i?^.\C\ ^t',-%(%ia

3. Creates the iron Horse River Park and River Access site that will be used foreducating the public concerning the Yarnpa River and its natural environment.

The CPW thanks the City of Steamboat Springs for their continued support of theLegacy Partnership and requests the Steamboat Springs City Council strongly considerthe FOY Proposal for the Iron Horse parcel as the most appropriate use of tin's site forthe future of the Yampa Rjver.

Sinaêb^

/ James M. Haskins

Area Wildlife ManagerColorado Parks and WildlifeSteamboat Springs

CC: NW Regional Office, Area File, J, Pollock


Proposal for Use of the Iron Horse Inn Property

Iron Horse Inn

Community Rentals Transit Housing

Contact Information: Organization: City of Steamboat Springs Person preparing this submittal: Winnie DelliQuadri Email: [email protected] Phone: 970-871-8257

mailto:[email protected]

2. Describe the Proposer’s current operations and locations. Include branding affiliations as may be applicable and any other pertinent qualifications to achieve the intent of this request. Explain in detail the type of development, operations or desire to purchase. Current Operations: The City of Steamboat Springs is a home rule local government for the municipality of Steamboat Springs. As a municipality, the City provides a full range of municipal services to the community, including transportation, public safety, planning, parks and recreation, economic development and some support of affordable housing. The City currently operates the Iron Horse for housing. Iron Horse: City operations of the Iron Horse this past winter are the model for this proposal. These operations include Building B, the apartments, being leased to the public as local workforce housing with city staff managing the property and the month to month leases. Building A, the hotel, was leased this past winter in its entirety for the winter season as housing for seasonal employees. Transit services: Steamboat Springs Transit provides the only public transit service in the rural resort community of Steamboat Springs. Transit service is free to rider within the city limits, encompassing approximately nine square miles. Steamboat Springs fixed transit routes provide service to the downtown, mountain, and west Steamboat areas, residential neighborhoods, lodging properties and condominiums, recreational amenities, shopping, service areas of the community, the library, and the Yampa Valley Medical Center. In addition, SST provides a complementary paratransit service within the Steamboat Springs service area, and a free demand response service route providing connecting services to Colorado Mountain College and two income-restricted low income housing developments. The City of Steamboat Springs Transit service provides over one million passenger trips each year and has been in operation since 1981. Specific service routes and hours change frequently due to the nature of our tourism driven community. Please see attached SST brochure for a detailed service route map and schedules for the previous winter and current summer seasons. The City’s transit service relies on seasonal transit drivers for its winter operations. Housing transit drivers is a challenge and in order to recruit and hire drivers on which the city relies for provision of winter transit services, the City is looking to secure transit driver housing. Proposal: As an alternate to selling the property, city staff propose that the City continue to operate the Iron Horse for affordable housing, reserving 10 units in Building A, the hotel, for seasonal transit drivers from November through April. The transit units would be rented May – October as a summer seasonal rental. The remaining units in the hotel would also be leased for seasonal workforce housing, preferably to one entity. Branding: The City is branded as the entity that provides municipal services within the community of Steamboat Springs, to both residents and visitors. This branding is sufficient to continue operation of the Iron Horse as proposed, as is evidenced by the unsolicited proposal to lease the facility this past winter.

3. State whether the Proposer is offering a shared financial and/or operational interest with the City for some or all of the proposed development or operation. If the proposal is for the purchase of the property, price must be included. With this proposal, the City would keep ownership of the property, would manage and maintain the property, would manage the operations of the Building B apartment units and the Building A winter transit units, while leasing the operations of the remaining Building A seasonal units. 4. Proposer to provide specific detail of operational and financial terms and conditions:

Please see attached budgets for operations. In terms of terms and conditions, the city would follow all existing financial policies and procedures. 5. Describe the Proposer’s financial capability to purchase, develop or operate the intended use.

The City has adequate financial capability to operate the Iron Horse as is proposed, as shown by the attached approved 2015 budget for the facility. The City follows Generally Accepted Accounting Principles (GAAP), and successfully completes an A-133 Audit each year. The City has received the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting every year that we have submitted our CAFR for review since 1988. Financial records include detailed schedules which segregate fund revenues as well as administrative, operating, and capital expenses. The City has the necessary operational capacity and infrastructure in place to provide for the operations as proposed. 6. Provide a general time frame for the improvement, development or purchase of the property.

With this proposal, operation of Building B, the apartments, would continue as is with no changes. For Building A, the hotel, the general timeline would consist of: Fall, or upon Council Decision re Iron Horse: RFP / lease facility for seasonal winter and summer use (preferred) or winter use only (if necessary). March: RFP / lease transit reserved units for summer use.

7. Any additional information that may be beneficial to the City to indicate the proposer’s interest.

The Steamboat Springs City Council recently voted to fund Steamboat Springs Transit at a level that would continue winter operations at a level that requires the hiring of seasonal transit drivers. Driver recruitment is underway, however for the recruitment to be successful, the city will need to find housing for the incoming drivers. The alternative to housing transit drivers at the Iron Horse Inn would be to build something specifically for them or to rent houses for transit drivers to share. (Note that in previous years, the city rented houses for transit drivers to share, however the problems that arose from that included difficulty in finding houses to rent, difficulty in renting housing for six months, and difficulties that arose between housemates.) 8. If applicable, please describe in detail the public benefit provided by the proposed development, operation, etc.

This proposal to have the City of Steamboat Springs retain ownership of the Iron Horse Inn would provide significant public benefit to the community:

• Transit Driver Housing – which is critical to the provision of robust transit services in the winter months – directly enables seasonal winter transit services which are a critical element of the community’s recreation tourism economy. In addition to supporting the economy, transit services decrease congestion on local roads, reduce Greenhouse Gas emissions, decrease the community’s overall carbon footprint, and contribute to clean air within the Yampa Valley.

• Seasonal employee housing & local workforce housing – benefits the community

through supporting existing jobs within the community, while ensuring that there are employees available to work in jobs which are critical to the resort economy. In addition, to the degree that the apartments are rented by Lift Up and other human service agencies, the Iron Horse Inn provides short term critical housing to the community’s social support network.

^-_Stea

-b-6,S} Sheraton'^lcf^

'tt."Aî^ IIOTEI.S& H^îOilTS

Iron Horse Inn ProposalPrepared by:

Alison Brodie, Housing Manager, Steamboat Ski & Resort Corporation

&Suzanne Jose, Human Resources Director, Sheraton Steamboat Resort

Steamboat Ski & Resort Corporation Contacts

Jim Schneider, Vice President-Skler Servicesischneider(%steamboat.com, 970-871-5381

Trish Sullivan, Vice President-Human Resources

tsullivanf%steamboat.com. 970-871-5131

AUson Brodie, Housing Managerabrodie(%steamboat.com. 970-871-5133

Sheraton Steamboat Resort Contacts

Dan Pirrallo, General ManagerDan.Pirrallof%Sheraton.com. 970-879-1343

Suzanne Jose, Human Resources Director

Suzanne.Josef55Sheraton.com, 970-871 -6504

,**• ~*A

[S) Sheraton'^^j^y IW'rU.SSt. HKSOHTS

June 22, 2015

City of Steamboat Springs137 10th StreetSteamboat Springs, CO 80477

To Whom It May Concern:

Steamboat Ski & Resort Corporation ("SSRC") and Sheraton Steamboat Resort ("Sheraton") areexcited to provide the attached proposal for the Iron Horse Inn in response to the City of Steamboat

Springs ("City") Request for Proposals. SSRC & Sheraton are proposing to use Building A of the IronHorse Inn (the newer, hotel style building, hereafter Building A") for the intent the City of SteamboatSprings had when it purchased the Inn in 2007 - transitional, seasonal and year-round employee

housing.

While we are aware that the City is looking for alternatives for long-term use of the property, we

believe this proposal serves as the best and highest use as a temporary bridge between another chosen

long-term proposal and the time to put that chosen proposal into action. Currently there is a critical

need for employee housing in Steamboat Springs and the primary reason this proposal is beingsubmitted by SSRC & Sheraton.

Under the proposal. Building A would be managed through SSRC's property management team. ThePonds at Steamboat ("The Ponds"). The proposal does not include Building B, (the older, efficiencyapartment building), which is currently managed by the City and as we understand it is fully occupied.As the owner and manager of one of the largest independently managed apartment complexes in

Steamboat Springs, SSRC s team at The Ponds has the industry knowledge and resources to effectivelymanage Building A as an extension of their current operations.

The proposed lease agreement would guarantee the City of Steamboat $15,000 per month for themonths of December through March for Building A for a period of two (2) years with options to (i)renew for two (2) additional one year terms and (ii) at the City's election, have the Ponds team continuemanagement of Building A during the period of April through November for each year that SSRCmanages Buildmg A during the winter season for a monthly fee equal to the greater of 3 5% of grossrevenues or $5,000 per month. Management of Building B would remain as is, with the City ofSteamboat Springs.

We believe selecting this proposal would be mutually beneficial to all parties and the community andwould provide a unique opportunity to address the changing housing trend. In today's extremely tightrental market, it is becoming increasingly difficult to hire employees when they are unable to findhousing. The ability to bring more residents to the City by adding additional rental units provides many

benefits. One such example is additional revenue through accommodation, food and beverage, and

sales taxes for the City. As we all know, when a business cannot fully staff its operations, a negativeimpact is felt across the entire community. This proposal would, at least temporarily, lessen this impact

and be a significant benefit in attracting employees in this highly competitive marketplace.

The following proposal has been prepared by Alison Brodie, Housing Manager for The Ponds/SSRCwith input from the other persons listed below. Please direct all correspondence regarding the Iron

Horse Inn proposal to Trish Sullivan and/or Jim Schneider at SSRC or Dan Pirrallo and/or SuzamieJose at the Sheraton.

Sincerely,

Jim SchneiderVP-Skier Services

Steamboat Ski & Resort Corp.

Dan Pirrallo

General ManagerSheraton Steamboat Resort

Trish SullivanVP-Human Resources

Steamboat Ski & Resort Corp.

OJL^— Q^^!Lut-

Alison BrodieHousing Manager - The PondsSteamboat Ski & Resort Corp.

Suzanne Jose

Director-Human Resources

Sheraton Steamboat Resort

Table of Contents

I. Operations Plan Page 51. Proposed Use Page 52., Hours of Operation Page 53. Office Location Page 54. Lease Agreement Page 55. Summer Option Page 56. Rental Rates and Deposit Page 67. Lease Terms for Tenants Page 68. Utilities Page 69. Improvements Page 610. Maintenance Page 611. Insurance Page 712. Contingencies Page?

II. Detail of Financial Terms and Conditions Page 7III. Financial Capability of SSRC and Sheraton to

Operate Building A Page 7IV. Timeline Page 8

1. August - November 2015 Page 82. December 2015-March 2017 Page 83. March 2017 Page 8

V. Relevant Business Experience Page 8VI. Building A Staff Structure Page 8

1. AIison Brodie, Housing Manager Page 82. AIisa Bonelli, Housing Admin. Assist. Page 83. Steve Gallup, Resident Manager, The Ponds Page 84. Randy Smith, Resident Manager, The Ponds Page 85. TBD, Resident Manager, Buildmg A Page 86. Supporting SSRC Departments Page 8

VII. Building A SSRC/Sheraton Coalition Structure Page 9VIII. Training Page 9

1. Training Sessions Page 92. Employee Reviews Page 93. Wages Page 9

DC. What Sets Us Apart Page 91. Coalition Between SSRC and Sheraton Page 92. Staffing and Support Page 93. The Ponds Track Record Page 94. The Ponds Location Page 105. SSRC's Service Excellence Initiative Page 10

X. Marketing Strategy Page 1 01. Website Promotion Page 102. Other Advertising Sources Page 103. SSRC and Sheraton Recruiting Page 10

XI. Public Benefit Page 10Appendix A - Lease Agreement Page 11Appendix B - Building A SSRC/Sheraton Coalition Structure Page 25Appendix C - Winter and Summer Financial Models Page 26Appendix D - Credit References Page 27

I. Operations Plan

1. Proposed Use

• Building A will be managed as an extension of SSRC's existing property managementteam, which manages The Ponds at Steamboat.

• Building A will be used for its original intended purpose - seasonal, transitional andyear-round employee housing.

• Building B would remain under City management.2. Hours of Operation

• Office Hours - Monday - Friday Sam to 5pm

• 24 hours a day on-call Resident Manager3. Office Location

• The management office for Building A would be located at The Ponds HousingOffice, 795 Walton Pond Circle, Unit Al, Steamboat Springs, CO 80487.

4. Lease Agreement

• SSRC and Sheraton would jointly lease Building A from the City for four months outof each year (December through March) for a period of two (2) years with options torenew for two (2) additional one-year terms. After the first two (2) four-month rental

periods, the City could terminate the lease by giving notice thereof prior to July 1 ofthe applicable year provided that the termination date could not occur during themonths of December through March.

• SSRC and Sheraton would be separate lessees for a certain number of beds dividedbetween them, but comprising all of the beds and units in Building A. Each of SSRCand Sheraton would separately pay rent to the City for their respective number ofbeds, anticipated to be 25 for SSRC and 25 for Sheraton (although this could changeover time) but regardless resulting in a guaranteed total rent to the City of $15,000 permonth for each of the four month winter rental periods (each a "Winter Season").

SSRC and Sheraton would only have liability to the City for their respective shares ofthe rent, not for each other's shares.

• SSRC's Ponds team would also manage the beds allocated to the Sheraton under a

separate agreement between those parties.

• See Appendix A for draft of the proposed lease agreement which contains more detailthan this summary. In the event of any perceived inconsistences between thesummary provided herein and the draft lease, the draft lease will control. Note also

that while the attached draft of the lease has been developed by SSRC and Sheratonbased on the lease Sheraton signed with the City last winter, it is intended as a draftand the parties may have further comments based on subsequent developments and

discussions with the City.5. Summer Option

• The City would have the option to have SSRC's Ponds management team manage

Building A during the months of April through November for each year of the termand any renewal terms in which the lease Is in effect for the prior four ski season

months in return for a property management fee to be paid by the City equal to thegreater of thirty five percent (35%) of gross rental receipts received or $5,000 permonth.

6. Rental Rate and Deposit

• $15,000 per month December - March

• All rates will include all utilities, including but not limited to, water, gas, electric,sewer, cable, high speed Wi-Fi, phone, trash, plowing, snow removal, and lawn care.

• SSRC and Sheraton will each pay the City a $2,500 security deposit.7. Lease Terms for Tenants

• During the winter season the leases will be December - March.

• If the City would like The Ponds to manage Building A during the months of Aprilthrough November the leases will be month to month.

• Leases will be "per bed" as currently implemented at The Ponds. In a "per bed" lease

the tenant is placed with roommates but is only responsible for their portion of therental type. For example, as there are two beds in the motel/donn rooms, each bed

would be leased separately at $350, for a total room cost of $700 (these may not beactual rental amounts and rents to tenants may vary from time to time or by season).

8. Utilities

• All utilities, including but not limited to, water, gas, electric, sewer, cable, high speedWi"Fi, phone» trash, plowing, snow removal, and lawn care would be paid by the City.

9. Improvements

• High speed Wi-Fi would be required as an included utility.• Building A would need additional kitchen appliances. The cost is to be paid by the

City either up front or in the form of a rent credit towards December rent.1. Additional refrigerators, stoves and sinks

2. Addition ofdishwasher and disposals3. Addition of a ventilation system in the kitchen area

* Addition of dressers in every room of Building A.

• Correction of any dangerous or defective conditions observed during site inspections

prior to taking possession.

• Remediation of any environmental conditions discovered from an inspection to be

done by an expert retained by SSRC and Sheraton at their cost prior to takingpossession.

• Any capital improvements are to be paid for by the City.10. Maintenance

• Major maintenance is to be performed by the City. This includes, but is not limitedto:

o Building maintenance (HVAC, plumbing, electrical, building structure,appliances and any other type of maintenance or repair beyond the day to dayminor maintenance and repairs to be handled by SSRC and Sheraton)

o All grounds maintenance (snow removal lawn care, landscaping, repair of

damage, removal of nuisances or abandoned vehicles, etc.)

o Refuse removal and receptacles (frequency of removal adequate to avoid trashbuildup at Premises)

o Repairs to satellite TV and high speed Wi-Fi serviceo Towels and linens - provided at the start of the Lease; replacements will be the

responsibility of the Lessoro Vacuum cleaners

o Repair or replacement of furniture

o Any legal or regulatory compliance issues arising with respect to thePremises, including, but not limited to, environmental (including hazardous

materials unless introduced by SSRC or Sheraton), Americans withDisabilities Act, health and safety laws and codes, building codes, and allsimilar types of legal and regulatory problems occurring or existing at thePremises not directly caused by SSRC or Sheraton

• The onsite Resident Manager will perform minor maintenance as needed and to

his/her skill level.11. Insurance

• SSRC and Sheraton will each insure that the standard liability insurance which theycarry with respect to their businesses is applicable to their tenants and operations in

Building A, and in the case of SSRC, its management operations, but the primaryproperty insurance for the property itself will remain with the City, provided that eachof SSRC and Sheraton would indemnify the City for their respective negligence orwillful misconduct in the lease. The City would provide a reciprocal indemnity to theextent allowed by applicable law.

12. Contingencies

• Proposal is contingent on an inspection to be done by an expert retained by SSRC andSheraton at their cost, with results satisfactory to SSRC and Sheraton in their solediscretion.

II. Detail of Financial Terms and Conditions• SSRC and Sheraton propose leasing BuildingAfor a monthly fee of $15,000 for two

(2) four-month periods commencing December 1 and ending March 31 for the 2015-16 and 2016-17 winter seasons. Also being proposed is an option to extend this lease

for the 2017-18 and 2018-19 seasons. The City shall have the right to terminate thelease after the initial 2 year term by providing written notice prior to July 1immediately following each winter period.

• SSRC will provide the City a management agreement to an option to continue leasing

the premises for a monthly fee equal to the greater of 35% of gross revenues or

$5,000 for the periods April 1 through November 30.• See Appendix C for detailed Winter Season Financial Model and the Summer Season

Financial Model Example. The Summer Season Financial Model Example is basedon rental inquires and waitlist levels at The Ponds this summer as well as inquires The

Ponds have already received for next summer.

III. Financial Capability ofSSRC and Sheraton to Operate Building A

• SSRC is a wholly owned subsidiary of Intrawest. Intrawest financial information can

be located at investor section ofhttD://www.mtrawest,com/.

• Sheraton is a subsidiary of Starwood and Starwood financial information can be

located at http://www.sheratonsteamboatresort.com/.

IV. Timeline1. August - November 2015

• SSRC and Sheraton will have an expert perform a site inspection.

• City will complete necessary improvements.

• Lease and management agreement will be finalized and signed.2. December 2015-March 2017

• Building A will be managed by The Ponds at Steamboat according to the terms of thelease agreement.

3. March 2017• City, SSRC and Sheraton to look at lease option to renew.

V. Relevant Business Experience

• SSRC has owned The Ponds at Steamboat (The Ponds) for more than 20 years. Formany years, SSRC outsourced the management of The Ponds to various local

property management companies. In 2009, SSRC brought the property managementin-house and experienced great success with this change.

VI. Building A Staff Structure1. Alison Brodie, Housing Manager, The Ponds at Steamboat, SSRC

• 6 years with SSRCN Responsible for all aspects of property management operations

• Responsible for relationships with City staff2. Alisa Bonelli, Housing Administrative Assistant, The Ponds at Steamboat, SSRC

•lyearwithSSRC• Responsible for assisting housing manager with all aspects of property

management operations3. Steve Gallup, Resident Manager, The Ponds at Steamboat, SSRC

•15yearswithSSRC• Responsible for on-call maintenance or behavioral issues

• Responsible for basic maintenance of apartments

4. Randy Smith, Resident Manager, The Ponds at Steamboat, SSRC• 5 years with SSRC" Responsible for on-call maintenance or behavioral issues• Responsible for basic maintenance of apartments

5. TBD , Resident Manager, Building A of the Iron Horse Inn

• This position will be selected upon receiving the award for the bid.• Responsible for on call maintenance or behavioral issues

• Responsible for basic maintenance of apartments

• Responsible for cleaning of the common areas

6. Supporting SSRC Departments - these departments currently provide key assistance to The

Ponds at Steamboat.- SSRC Human Resources Department

s SSRC Engineering and Security Departments• SSRC Finance and IT Departments

VII. Building A SSRC/Sheraton Coalition Structure• See Appendix B

VIII. Training1. Staff will attend mandatory training session in line with SSRC staff including the following:

• Mandatory New Hire Orientation- This session is administered by SSRC HumanResources and covers essential information for new staff members. This includes

policy information on Safety, Sexual Harassment, Standards of Business, PCI

compliance. Network Security, Appearance and Drug and Alcohol Policy.

• Service Training: All new hires and retumers attend Service Excellence training.

Introductory level sessions are offered for new hires and successive training

session for returning staff. All staff works toward a goal of building relationshipswith guests and co-workers th*ough various situational activities and round table

discussions.

• On-going training: housing manager will work with staff daily and providetraining updates verbally and via email messages.

2. Employee Reviews

• Each employee will receive an annual mid-season and end of season review.Employees are scored on the categories of Appearance, Service Excellence,

Profitability, Teamwork, Safety, Honesty and Integrity.

• The annual review is used to determine re-hire eligibility and can impact wage

increases.

3. Wages

• Resident Manager will be paid minimum wage and receive a discounted rate for

their apartment.

• Annual performance increases are subject to review at the start of each season and

typically range from 0-2% increases over the previous year's wages.

• Other compensation

a) Season Ski Passes for all seasonal employees of SSRC.b) Dependents ofFull-Time employees receive Season Passes.

c) Health Benefits begin m the third consecutive season as an SSRCemployee.

d) Discounts on and off the mountam at retail and food outlets throughoutSSRC.

IX. What Sets Us Apart1. Coalition between SSRC and Sheraton

• A coalition of two prominent hospitality groups which are working together tofind and provide additional affordable rental units.

2. Staffing and Support• The Ponds at Steamboat has a strong support system from SSRC - including but

not limited to the management team, human resources, engineering, security,finance and information technology departments.

3. The Ponds Track Record

• The Ponds has a proven success record with increasing occupancy year over year

since management was brought within SSRC in 2009.

• The Ponds is a fully functioning property management company with all thenecessary computer programs, systems, policies and procedures that would be

required to manage Building A.• The Ponds are currently 100% employee housing in the winter season, which

means they are well versed handling any issues that may arise in shared employee

housing.

4. The Ponds has a convenient location.

• The Ponds Housing Office is on the bus line making it easy for Building A tenantsto get to the office when needed.

5. SSRC s Service Excellence Initiative• Steamboat has always been a leader in the industry for exceeding service

expectations for guests.

• Service Excellence training model began in 2010 as part of an effort to increase

sales at Central Reservations.

• The initiative evolved to focus on creating relationship with guest and staff.

X. Marketing Strategy1. Website Promotion

• Listing Building A will be included on the Housing section ofwww.steamboat.com.

• The Ponds at Steamboat s website will feature Building A atwww.pondsatsteamboat.com.

2. Other Advertising Sources• In today's rental market advertising is not always needed. When and if it is

needed ads will be place in appropriate outlets such as the Steamboat Pilot andToday and online rental sites such as Apartments, corn and CraigsUst.

3. SSRC and Sheraton Recruiting• Promote Building A in recruitment materials and job fairs.

XI. Public Benefit• Temporarily fill the need for employee housing. Without housing available

businesses cannot fully staff operations, which can have a negative impact across

the entire community.

• Use Building A for the purpose it was originally intended, transitional, seasonaland year-round employee housing.

• Act as the bridge between the chosen long-term proposal and the time it takes to

put the chosen proposal into action.

• Provide affordable rental options.• Accommodation tax benefit to the City due to available staff.• Food and Beverage tax benefit to the City due to available staff.• More residents spending their money in Steamboat.

10

Appendix A: Lease Agreement

LEASE AGREEMENTIRON HORSE INN - BUILDING A

This Lease Agreement ("Lease") is made this _ day of. , 2015 between the

City of Steamboat Springs, CO, a Colorado home rule municipality (hereafter "Lessor"),Starwood Steamboat LLC a Delaware limited liability company d/b/a Sheraton SteamboatResort ("Sheraton") and Steamboat Ski & Resort Corporation, a Delaware Corporation("SSRC" and together with Sheraton, the "Lessees"). Each of Lessor and Lessees are

sometimes referred to herein as a "party" and collectively as the "parties."

1. Lease of Premises. Lessor owns real property and improvements at 333 S. Lincoln

Avenue in Steamboat Springs, Colorado commonly known as the Iron Horse Inn. The property

and improvements consist of two buildings, generally described as the "Building A" alsoknown as the "hotel building," and "Building B," also known as the "apartment building," and

the surrounding parking areas, grounds and other facilities located at the property. Lessor

hereby leases to Lessees, and Lessees hereby lease from Lessor, severally but not jointly,

Building A, and all rooms, spaces or units located therein, together with the exterior parking,common areas, grounds and other facilities located within the perimeter of the area shown on

Exhibit A (the "Premises"), upon the terms and subject to the conditions set forth herein.Lessor acknowledges and agrees that Lessees' primary purpose in leasing the Premises is toprovide housing for Lessees employees, although the use of the Premises by Lessees is not

restricted solely to employees, and Lessees may rent the individual rooms and beds located inthe Premises to other tenants as they may determine in their sole discretion. Lessees

acknowledge that they have inspected the Premises and are satisfied that the Premises areappropriate for their needs. Lessees, by taking possession of the Premises, shall be deemed to

have agreed that the Premises were, as of the date of taking possession, in good order, repairand condition except to the extent provided otherwise in Section 10. Lessor shall have no

obligation to modify the Premises except as and to the extent expressly provided for elsewhere

herein.

2. Term; Renewal Terms. The term of this Lease shall initially consist of two (2) four (4)month periods during the each of 2015-16 and 2016-17, commencing on December 1 of eachsuch period and ending on March 31 of each such period (each of such periods, individually, a"Winter Period" and both of such periods, collectively, the "Initial Term"), unless sooner

terminated as provided herein. Lessees shall have the option jointly to renew the term of this

Lease for two (2) additional Winter Periods occurring in 2017-18 and 2018-19, respectively(each such term, upon exercise by Lessees of the option therefor, a "Renewal Term" and

collectively with the Initial Term the "Term,") by providing written notice thereof from both

11

Lessees to Lessor not later than ninety (90) days after the expiration of the then just concludedWinter Period, provided that Lessor shall have the right, at any time after the Initial Term, toterminate a Renewal Term (and any options for additional Renewal Terms) by providingwritten notice of such termination, and the termination date, prior to the July 1 immediately

following the end of the then just concluded Winter Period, provided further that the date uponwhich Lessees must surrender occupancy of the Premises shall not fall between December 1and March 31 of any year. Each Renewal Term shall be on the same terms and conditions as

set forth herein, except that the Rent (as defined below) for each Renewal Term shall beincreased by application of the CPI (defined below). The parties agree that if one Lesseedesires to exercise an option to continue the Lease during any of the Renewal Terms but theother Lessee does not so desire to exercise such option and waives such option in writing

within 80 days after the expiration of the then just concluded Winter Period, then the Lesseedesirmg to continue shall have the right by itself to extend the Lease for any or all RenewalTerms for such exercising Lessee alone, without naming or including the other Lessee, in

which event this Agreement shall continue for the sole benefit of the City and such electingLessee, and the non-electing Lessee shall be deemed to have withdrawn and been released

prospectively from this Agreement.

3. Summer Management Options. Lessor shall have the option to retain SSRC, whose

management team will manage the Premises for both Lessees during the Winter Periods, to

manage the Premises (Building A only) for Lessor for each of the periods of April 1 throughNovember 30 (each a "Summer Period") following a Winter Period during the Term. Theseoptions may be exercised at any time not less than sixty (60) days prior to each such SummerPeriod by written notice from Lessor to SSRC. Upon exercise of such option(s), SSRC willcoordinate with Lessor concerning the upcoming Summer Period and will provide the samemanagement services to Lessor that it provides to Lessees during each Winter Period, adjusted

as appropriate to accommodate the differences In managing for Lessor as the landlord for the

rooms/beds in the Premises as opposed to Lessees' use primarily for employee housing.

SSRC s management services that would apply during the Summer Period are set forth in briefon Exhibit B and would be reflected in separate written management agreement between SSRCand Lessor. As its management fee for each Summer Period, SSRC would be entitled to retain,

or receive from Lessor, thirty five (35%) of the gross rental revenue and any other charges

collected from tenants of the property during each Summer Period, provided that if the totalrevenue to SSRC from the management fee for any month is less than five thousand dollars

($5,000) Lessor shall pay the difference to SSRC upon invoice to allow SSRC to cover its costsof managing the Premises during the Summer Period. During each Summer Period, Sheraton

will have no management, operation and maintenance responsibilities for the Premises and will

be held harmless by Lessor and SSRC from any responsibilities or liabilities occurring on orrelated to the Premises during a Summer Period.

4. Rent. Lessees agree to pay as rent an aggregate total sum of fifteen thousand dollars

($15,000.00) per month for each of the four (4) months of the Winter Period for the Premises.Each Lessee shall be separately responsible for its share of each month's rent, as Lessees shall

among themselves determine, and shall provide separate checks to Lessor each month,

12

provided that the total of such checks shall always be $15,000. Lessees shall be severallyliable for payment of each of their respective Rent obligations, and neither Lessee shall beliable to Lessor for the other Lessee's Rent payments. Rent shall be due and payable, without

demand, on the first day of each month during Winter Period of the Term at P.O. Box 775088,Steamboat Springs, CO 80477. Payments not received by the 5th day of each month shall bearinterest at the rate of eighteen percent (18%) per annum from the date such payment was dueuntil paid. If a check is returned by a Lessee's bank for any reason, such Lessee shall pay a

returned check fee of $25.00. In addition to any late fee or returned check fee, such Lessee

shall pay any other out of pocket charges actually paid by Lessor by reason of such latepayment or returned check. If Lessees' exercise any of their options for Renewal Terms, the

Rent for each Renewal Term shall be increased by the same percentage as any increase in the

Consumer Price Index - All Urban Consumers ("CPI-U") for all items ("CPI") published by theUS Department of Labor, Bureau of Labor Statistics for the most recent 12 month period priorto the January 1 of the year in which the Renewal Term commences for which the CPI hasbeen distributed. If publication of the CPI is discontinued, the generally accepted replacementindex shall be used in its place for purposes of this adjustment.

5. Defaults and Remedies. Lessees shall Jointly be deemed in default under this Lease ifeither Lessee fails to pay its share of Rent or any other charges promptly when due; or ifLessees fail to comply with any of the other terms, conditions or covenants of this Lease, or

Lessees leave the entire Premises vacant during any Winter Period before the expiration of this

Lease. In the event suit is brought by any party to enforce the provisions of this Lease, the

party not prevailing shall be liable for the prevailing party's attorney^ fees and costs of suit.The provisions of Section 20 below apply in the event of any such default. In the event of adefault by either Lessee^ the other Lessee has the right to cure such default within the 30-daycure period described in Section 20 below.

6. Future Rents. In the event it becomes necessary for Lessor to serve an eviction notice,either because ofnonpayment of Rent, or failure of either Lessee to abide by this Lease,Lessees shall each be severally responsible for their respective shares of the Rent for the

balance of the Lease less any moneys collected through the reletting of the Premises to others.

7. Use of Premises. Lessees agree that the Premises are to be used and occupied by

Lessees' respective employees and other tenants for residential purposes only. Lessees shall

obey, and cause any tenants to obey, all Federal, State and Local laws and ordinances affectingor relating to the Premises and will not use or permit the Premises to be used for any purpose

prohibited by such laws. Pets may not be kept on the Premises. Smoking is not permitted insidethe building.

8. Maintenance. Lessees agree to keep and maintain the Premises in a good state of repair

and order and in a clean and sanitary condition, subject to the respective obligations of Lessorand Lessees as provided in this Lease with respect thereto, and subject to the last sentence of

13

Section 3 above, provided that under no circumstances shall Lessees be responsible for

conditions existing at the Premises prior to the commencement of this Lease or any matters

with respect to Building B or its associated parking and common areas or other facilities.

Lessees are responsible for common area cleaning, individual unit cleaning, and laundering oftowels and linens during each Winter Period. Lessees' manager shall promptly notify Lessor

of any damages to the Premises or any conditions of the Premises not caused by Lessees,

Lessees' manager or Lessees tenants requiring repairs that cannot be reasonably effected by

Lessees' manager as part of routine, day-to-day maintenance, or without incurring out of

pocket costs, and Lessor shall promptly cause such repairs to be completed at its cost. Lessor's

primary contact for the Premises is Iron Horse Inn Resident Manager for Building B, Jayson

Belyea, (970) 819-8745. Lessees shall reimburse Lessor for the costs of any repairs to the

Premises made necessary by the negligent or careless use by Lessees or Lessees' tenants during

any Winter Period. Lessees shall not make any alterations to the Premises, including changing

or adding locks, without the written consent of Lessor. Lessor shall provide the following:

a. Building maintenance (HVAC, plumbing, electrical, building structure,

appliances and any other type of maintenance or repair beyond the day to day minormaintenance and repairs to be handled by Lessees as provided above).

b. All grounds maintenance (snow removal, lawn care, landscaping, repair of

damage, removal of nuisances or abandoned vehicles, etc.) adequate to keep the grounds in aneat and clean condition.

c. Refuse removal and receptacles (frequency of removal adequate to avoid trash

buildup at Premises).

d. Repairs to satellite TV and high speed Wi-Fi service.

e. Towels and linens - provided at the start of the Lease; replacements will be the

responsibility of the Lessor.

f. Vacuum cleaners.

g. Repair or replacement of furniture.

h. Any legal or regulatory compliance issues arising with respect to the Premises,

including, but not limited to, environmental (including hazardous materials unless introduced

by Lessee's or their manager), Americans with Disabilities Act, health and safety laws andcodes, building codes, and any bedbug or other pest infestation of the Premises, and all similartypes of legal and regulatory problems occurring or existing at the Premises not directly caused

14

by Lessees or their manager.

i. Any and all capital improvements required to be made to the Premises.

Lessees agree to cause their manager to notify Lessor upon Lessee's actual knowledge of any

evidence of bed bugs or other pests at the Premises.

9. Utilities. Lessor shall provide the following utility services at Lessor's cost: water,

sewer, electricity, heat, trash, satellite or cable television, high speed Wi-Fi internetconnectivity, and local telephone service. Lessees shall be responsible for obtaining and

paying for any other utility services.

10. Lessor's Improvements. It shall be a condition to the effectiveness of this Lease, and

Lessees' taking possession of the Premises to begin the Initial Term, that Lessor shall have

completed, at Lessor's sole expense, or at Lessor's option and request made of Lessees in

writing prior to October 1 , 2015, Lessee's have completed at their expense but subject to fullexpense recapture as credits against first months rents payable under Section 4 above, the

following improvements to the Premises:

a. Additional kitchen appliances and general kitchen facility upgrade to the RentalUnits to be mutually agreed by Lessor and Lessees, including additional refrigerators, stove,

double sink, dishwasher and garbage disposals;

b. Additional, functional dressers in the Rental Units, to ensure there is one for each

Bed;

c. Correction of any dangerous or defective conditions, and correction of any

failures that the Premises are in good order, repair and condition as described in Section 1above, in either case as observed during Lessees' site inspections prior to taking possession for

which oral or written notice has been given to the Iron Horse Inn Resident Manager for

Building B, Jayson Belyea, (970) 819-8745;

d. Remediation of any adverse environmental conditions discovered from an

inspection to be done by an expert retained by Lessees at their cost prior to taking possession.

11. Casualty or Condemnation. If the Premises are damaged by fire or other casualty,

Lessor will repair them with reasonable dispatch after notice of such damage. Upon substantial

damage. Lessees shall have the right to terminate this Lease upon notice to Lessor. If thePremises are rendered totally mitenantable by fire or other casualty the Term will cease and

1.5

Rent will be paid up to the date of such damage, or the date of last possession by Lessees,whichever occurs last, and both parties will be relieved of further obligation hereunder.

12. Security Deposit. On execution of this Lease, Lessees shall each deposit with Lessor the

sum of $2,500, for a total of $5,000, to secure Lessees' performance of Lessees^ respectiveobligations hereunder. In the event cause exists for retaining all or any portion of the security

deposit at the termination of this Lease, Lessor shall provide Lessees with a written accounting

of the amounts withheld and return any portion not retained within sixty (60) days aftertermination of this Lease. Lessee shall not use the security deposit in lieu of the payment ofRent. Lessor is not entitled to draw upon the deposit unless Lessee(s) are in default beyond any

and all notice and cure periods.

13. Surrender. Lessees agree that upon the termination of this Lease Lessees will

peacefully surrender the Premises in the same condition as when first leased to Lessees,

ordinary wear and tear or damage excepted, provided that Lessees will not be responsible for

any condition of the Premises resulting from causes not the result of acts or omissions of

Lessee(s) or their manager, including, but not limited to, a failure of Lessor to timely perform

any of its obligations with respect to the condition of the Premises as provided herein.Sheraton will not be held responsible for damage to the Premises which occurs during anySummer Period if the City elects to have SSRC manage the Premises during any SummerPeriod.

14. Insurance, Release and Indemnification. Lessees understand that Lessor's insurancedoes not cover any of Lessees' property. Lessor will not be liable for, and Lessees indemnify,

release, and hold harmless Lessor from any and all claims and liabilities resulting from any

death, personal injury, or loss of, or damage to, property arising out of Lessees and theirmanager's use of the Premises or Lessees rental of the Rental Units or occupancy by

employees of either Lessee or other tenants during each Winter Period, except to the extent thatLessor has assumed any such obligations pursuant to Section 10 hereof. The obligations of this

paragraph shall not extend to any injury, loss, or damage which is caused by the act, omission,

or other fault of Lessor or its employees, agents, contractors or subcontractors. The

obligations of this paragraph by Sheraton are also limited to acts or omissions by Sheraton orits employees during each Winter Period. SSRC, and not Sheraton, will indemnify the City tothe extent only described above during the Summer Periods if the City elects to have SSRCmanage the Premises during Summer Periods.

Lessees shall procure and maintain general liability insurance with minimum combined singlelimits of one million dollars ($1,000,000) each occurrence and two million dollars ($2,000,000)aggregate. The policy shall include the City of Steamboat Springs as additional insured andshall contain a severability of interests provision and shall be primary and non-contributory to

insurance available to Lessor with respect to personal injury liability coverage, except to theextent such injuries were caused by the acts or omissions of Lessor or its employees, agents,

16

contractors or subcontractors. Lessees' manager shall maintain workers compensation

I insurance in accordance with statutory limits and SSRC's standard auto insurance. Lessees

shall provide to Lessor a certificate of such insurance, naming the City of Steamboat Springs as

an additional insured with respect to general liability and auto, as evidence of insurance

coverage.

Lessees will not be liable for, and Lessor will, to the extent allowed by applicable law,indemnify, release, and hold harmless Lessees from any and all claims and liabilities resultingfrom any claims, losses or damages resulting from a dangerous or defective condition,

including but not limited to environmental, Americans With Disabilities Act, health and safety,hazardous substances, mold, or similar types of conditions, at the Premises or Iron Horse Inn

(including Building B and its common areas). The obligations of this paragraph shall notextend to any injury, loss, or damage which is caused by the act, omission, or other fault of

Lessees or their employees, agents, contractors or subcontractors.

Lessor shall maintain its standard property msurance coverages for the properties it owns andoperates and shall provide a certificate thereof to Lessees, naming Lessees as additional

insureds, it being the intent of the parties that Lessees shall be primarily responsible forpersonal injuries occurring during the Term and Lessor shall be responsible for propertydamages or losses. Such coverage shall contain a severability of interests provision and shall be

primary and not contributory to any insurance available to Lessees, except to the extent the

damage to the Premises was caused by the acts or omissions of Lessees or their manager.

15. No Punitive, Consequential or Incidental Damages. EACH PARTY'S LIABILITYHEREUNDER TO ANOTHER PARTY OR PARTIES SHALL BE LIMITED TO DIRECTACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THESOLE AND EXCLUSIVE REMEDY AND ALL OTHER DAMAGES AT LAW OR INEQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, AND EXCEPT INCONNECTION WITH INDEMNIFICATION ON ACCOUNT OF THIRD PARTY CLAIMSUNDER SECTION 14, NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL,INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITSOR OTHER BUSINESS INTERRUPTION OR LOST OPPORTUNITY DAMAGES, BYSTATUTE, IN TORT OR CONTRACT, OR OTHERWISE. IT IS THE INTENT OF THEPARTIES THAT THE LIMITATIONS IMPOSED IN THIS AGREEMENT ON REMEDIESAND THE MEASURES OF DAMAGES BE WITHOUT REGARD TO THE CAUSE ORCAUSES RELATED THERBTO, INCLUDING THE NEGLIGENCE OF ANY PARTY,WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE ORPASSIVE.

16. Assignment and Subletting. Lessees shall be entitled to sublease the Premises toLessees' respective employees, their family members, other businesses in need of temporary

housing for their employees, and the general public as Lessees may determine. Lessees shall

( ••lv 17

not otherwise sublease the Premises as a whole or assign this Lease without Lessor's prior\ written consent, which may be granted or withheld in Lessor's sole discretion. Lessees shall

remain primarily responsible for the payment of Rent and their other obligations hereunderregardless of any unapproved sublease or assignment.

17. Access. Lessor may enter the Premises at any reasonable time to inspect, make needed

repairs, or for any other lawful purpose. Lessees, through SSRC as their manager, shall beentitled to twenty four (24) hours' notice of such entry which may be via email. At Lessees'

option^ Lessor shall be accompanied by a representative of Lessees' manager during any such

inspections.

18. Alterations and Improvements. Lessees shall make no alterations to the Premises

without the prior written consent of Lessor. Alterations, addition, and improvements other thanpersonal property attached to the Premises and removable without damage to the Premises

shall be the property of Lessor and shall remain on the Premises at the expiration of this Lease.

19. General Provisions. This Lease contains the entire agreement between the parties and

may only be amended by written agreement of the parties. There are no oral understandings,

terms or conditions, and neither party has relied on any representations, express or implied, thatare not contained in this Lease. No waiver of any provision of this Lease will be implied by

any failure of either party to enforce any remedy upon the violation of such provision. ThisLease shall not hold Lessees' employees, shareholders, affiliates, officers, directors, etc.

personally liable. Except for the persons entitled to indemnification hereunder, nothing in thisLease is intended or shall be construed to confer any rights or liabilities upon any person orentity that is not a party to this Lease. The headings contained in this Lease are intended solelyfor convenience and shall not affect the rights of the parties to this Lease.

20. Termination. Lessor shall be entitled to terminate this Lease in the event of a material

breach of any of Lessees' obligations hereunder or in the event of a default described in

Section 5 above and if neither Lessee cures said breach or default with thirty (30) days ofreceipt of written notice of such breach or default from Lessor to each of the Lessees, or, in the

event ofabreach that cannot be cured within thirty (30) days, if neither Lessee commences anddiligently pursues the cure of said breach within such period. Lessor shall provide such writtennotice of any material breach or a default under Section 5 above to each Lessee before such 30-

day cure period commences. Lessees shall be entitled to terminate this Lease in the event of a

material breach of any of Lessor's obligations with respect to the condition of the Premises ifLessor fails to cure said breach with thirty (3 0) days of receipt of written notice of such breachfrom either Lessee or, in the event of a breach that cannot be cured within thirty (30) days, ifLessor fails to commence and diligently pursue the cure of said breach within such period, andin either instance only if both Lessees elect to terminate this Lease. Either Lessee shall providesuch written notice of any material breach to Lessor before such 30-day cure period

commences, but termination by Lessees requires the election to terminate by both Lessees.

(••

21. Quiet Enjoyment. Lessor agrees that Lessees, upon paying the Rent and performing

the covenants and conditions of this Lease, may quietly have, hold and enjoy the Premises.

22. Approvals and Authorization. Lessor represents and warrants to Lessees that all

required approvals and authorizations required under applicable law and the City Charter havebeen duly obtained and that this Lease is binding upon the City in all respects in accordancewith its terms.

23. Notices. Any notice given under this Lease shall be in writing and shall be either (a)hand delivered, (b) sent via overnight courier, or (c) sent by certified or registered mail, return

receipt requested to the following addresses, which may be changed by such notice by anyparty at any time:

To Lessor:

Director of General Services


137 10th Street

PO Box 775088


With a copy to:

City Manager


137 10th Street

PO Box 775088


To Lessees:


2200 Village Inn Court


Attn: Suzanne Jose, Hiunan Resources Director

19

With a copy to:

Starwood Steamboat LLC

c/o Sfarwood Hotels & Resorts

One StarPoint

Stamford, Connecticut 06902

Attn: Seth Ruzi, Vice President and Associate General Counsel

And

Steamboat Ski & Resort Corporation

2305 MtWemer Circle


Attn: Trish Sullivan, Vice President - Human Resources

With a copy to:

Intrawest Resorts Holdings, Inc.

1621 18th Street, Suite 300

Denver, CO 80202

Attn: Chief General Counsel

23. Governiug Law; Jurisdiction; Waiver. This Lease shall be interpreted and enforced inaccordance with the laws of the state of Colorado, excluding any choice of law or conflicts of

law rules that would result in the application of the laws of a different jurisdiction. ExclusiveJurisdiction over any proceedings arising from or related to this Lease shall reside in the courtsofRoutt County, Colorado. Each party irrevocably waives its right to trial by jury inconnection with any claims arising from or related to this Lease or any claim of inconvenient

forum or lack of jurisdiction in such courts. In the event of any litigation arising out of thisLease, the prevailing party shall be entitled to reasonable attorney fees.

24. Counterparts. This Lease may be signed in any number of counterparts with the same

effect as if the signatures to each counterpart were upon a single instrument, and all suchcounterparts together shall be deemed an original of this Lease.

[signatures on following page]

20

)IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year firstwritten above.

Lessor;

CITY OF STEAMBOAT SPRINGS

By:.

Attest:

Lessees:

STEAMBOAT SKI & RESORT CORPORATION, a

Delaware corporation

By:.

Name:

Title:

STARWOOD STEAMBOAT LLCa Delaware limited liability company

By^

Name:

Title:

21

EXHIBIT A

Leased Premises

m„!„

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^^-^^--..-^,,^-^-^-<'- -^f ,-;,T; / '" Î;/^,. "-"- --^-^^V^<. ^Lî-,^-^^^^^,< '-f- i i . '' ' ! ;''"" ; [^.îi.K-^',-^-/ ^[^

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&

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22

EXHIBIT B

SSRC Summer Period Management Services

Evaluate the property and determine an accurate rental rate

• Perform a detailed documentation of the units including photos

Ready the property for rent

• Prepare units for rent

o Clean units

• When the market dictates that advertising is needed, create ads tailored to the property andadvertising medium. Some of the mediums commonly used are:

o Paid and free rental listing websiteso Print publicationso Signso Fliers

• Field calls from prospects for questions and viewings

• Meet prospective tenants for showings

• Provide prospective tenants with rental applications that are legally compliant with fairhousing laws

• Collect rental applications

Tenant Screening and Selection

• Thoroughly review rental application, check references and perform a background check ifneeded to verify identity, income, credit history, rental history, etc.

• Inform tenants who were turned down, including the reason for denial

Tenant Move In

• Draw up leasing agreement* Confirm move in date with tenant

• Review lease guidelines with tenant regarding things like rental payment terms and proper

behavior expectations• Ensure all agreements have been properly executed

• Have tenants sign a report verifying the condition of the property prior to move-in• Collect the first month's rent and security deposit

Rent collection

• Receive rent

• Hunt down late payments• Send out pay or quit notices• Enforce late fees

Evictions

• File relevant paperwork to initiate and complete an unlawful detainer action

• Coordinate with law enforcement to remove tenant and tenants possessions from unit

23

Legal

• Understand and abide by the latest local, state and federal legislation that apply to rentingand maintaining rental properties

Inspections

• Perform periodic inspections (inside and outside) on a predefmed schedule looking forrepair needs, safety hazards, code violations, lease violations, etc.

• Send owner periodic reports on the condition of the property

Financial

• Provide accounting property management services• Detailed documentation of expenses via invoices and receipts

• Maintain all historical records (paid invoices, leases, inspection reports, warranties, etc.)• Provide easy to read monthly cash-flow statements which offer a detailed breakdown of

income and itemized expenses

Maintenance and Repairs

• Establish a preventative maintenance policy to identify and communicate to the City anyrepair needs

• Maintain and monitor a 24 hour emergency on call Resident Manager who will performminor maintenance to his/her comfort level

Tenant Move Out

• Inspect unit and fill out a report on the property's condition when the tenant moves out• Provide tenant with a copy as well as estimated damages

» Return the balance of the security deposit to the tenant

• Clean imit and perform and needed repairs or upgrades

24

Appendix B: SSRC/Sheraton Coalition Structure

Building A SSRC/Sheraton Coalition Structure

SSRC and SheratonBuilding A of the

Iron HorseCoaliton

Dan Pirrallo

Sheraton GeneralManager

Trish Sullivan

Vice President

Human Resources

Jim SchneEder

Vice President I

Skier Services I

Suzanne Jose

Sheraton HumanResources Director

25

Appendix C: Winter and Summer Financial Models

Winter Season Financial ModelIron Horse Proposal Fin an ca I Model IWinter Seasonal Budget

Rental Income

Un it Types2 BedroomMotel / Dorm

# of Beds2 Bedroom

Motel / Dorm

Rental Rate Per Unit2 BedroomMate! / Dorm

Occupancy %2 BedroomMotel / Dorm

Rental Income

2 Bedroom

Motel / Dorm

City LeaseGuaranteed SSRCGuaranteed Sheraton

Total lo the City

Dec-15

12525

448'

52

1,2007QD

0,0%80.0%

14,03014,000

7,5007,500

15,000

Jan-16

12526

4"

48'

52

1,200700

D.0%

95,S%

1G,G2516,625

7,5007,500

15,000

Feb-1G

12526

248"

50

1,200700

0.0%

35.0%

16,62516,625

7,5007,500

15,000

Mar-16

1252G

448"52

1,200700

0.0%

95.0%

16,62516,625

7,5007,5SO

1S,OSO

Total

70,000

Resident Manager Free Rent91.3%

63,87563,875

30,00030,00060,000

Summer Season Financial Model ExampleSteamboat Ski & Resort CorporationIron Horse Building AExample of Summer operation option Apr-15 May-15 Jun-15 Jul.15 Aug-15 Sep-15 Ocf-16 Nov-15 TotalRental incomeUnit Types2 BedroomMotel / Dorm

# of Beds2 BedroomMotel / Dorm

Rental Rate Per Unit2 BedroomMotel/Dorm

Occupancy%2 BedroomMotel/Dorm

Rental IncomeCleaning Fee2 BedroomMotel/Dorm

Management Fee

NettpCjty

12526

448"

52

12526

448'

52

12526

448'

52

12526

448'

52

12526

248'

50

12526

248'

50

12526

248'

50

12526

248"

50

35.0%

1,200 1,200700 700

0.0% 0.0%25.0% 40.0%

1,200 1.200 1,200700 700 700

0.0% 0.0% 0.0%70.0% 90.0% 75.0%

1.200 1,200 1,200700 700 700

0.0% 0.0% 0.0%70.0% 65.0% 30.0%

4,375 7.000 12,250 15,750 13,125 12,250 11,375 5,250 81,3754,375 7,000 12,250 15,750 13,125 12,250 11.375 5,250 81,375

5,000 5,000 5,000 5,513 5,000 5,000 5.000 5,000 40,513

_t625)__2^00___2.2AO--1PA238.___8._1_2_5___7.250____6.375 __2_50__4p^)63

26

Appendix D: Credit References

INTRAWEST

Locatton end BftUnd Iriformiayon

IntrawestAttn: Accounts Paystile1621 18ft Street, Suite 300Oertwr, Colorado tlO'/-02303^9.8200

Corporate Officers

Tom Marano, CEO, jntrav/estGaryFerrera, CFO intrawest

ww.fntfawest.tonn

IntrawestCredit References

Corporate Informiition

hVawist US Hold fry 1

hvnwcst Shanil Sftvtffii Iw

WbllW PBfk ROKIIt

Steanriwat Sld & EtesotL Cwporaltott

Snuwitiue WAusitain ftesort toe.

Snowihuc Muuntiiin Uww ILC

Cheat Miiuntah Watw Cwnpsr/ Inc

Stfattan CwpQtatfoui

ZepliyrMtsuntaln Lodge

V/ertln Mofwhfr

hlfBwaiLCilJtomtiiftosiaufBnt^

t.n^wflst »wua Knt HQEpttaUtyMEt Ll.C;

htf)iwestHWp!lalityMantsai»ntlnc

»MtlM9f

M.OWMM71-0)?M3

M-im-na

W-07WS6

4&-WW?

W-tff^W(H.(Bttwi

M-naMw

M-lWiMif.-OWtW

16.MSe31M

^tAWWi

Credit informat.ion

4 US Bank National Awodation95017lh St, Denver CO SDlOi(303) 585-693i AKOim OTCi36579'H107Troy Stalter, AKOWI, Officer

• PrinothW W Route 106, CEtmanton NH (B237Amtwr tiartj Sales St AdministratiwiP(tnolh.re?tvablei®prlnoth,'com

• Ainorkon Howl Rojltterlot) S Milwaukee AvftiwVcrntm Hilti IL 60061(M7) 7^3-161}Merit[fth Surtia, Acct Etep

• IKOH, a Rjcoh Cotnpany300-7245 South Havana StreetCcnionntat CO 80112 A«?)51Z6'(0{flO)S75'?W WarkLucat, S.aln tianagsr

• Oftico Oefwt5ZW JoUct, St, Stlitc A Denver CO 80U9(303}5M-WS4RobBiVf?rTpn'ltary Oevelapmcnt Manager

• c&wZ60 « Mltwatfkee AvenwVemon HfttS IL 60061(877) 325-5326 Hewman Albin, Acet Rep

Shippinii Addresses

htmwit Cofporatomnff- stile isoDtSflWf, CO Wi02

Zopbyr Ucuntafn Lot^ttW ftyitmnt KTOWinter Park, CO ??1

Snow*hoeWourrt(iIn RwortBlack turn HoadSn(w?bw,WVWi09

Stratton Uoyntaln ResortRraUoh th! ReartRRt,S?H5Strtttnn Kountain, VT 05155

V/ifiLs'pAfh RiMartMary Jane Warehwus'iHEJUacyJau'lujWntwPwk,C08Mfl2

Authorized By

Swambo&tIkKtRwsrt2M5MtWem(TCifclcSteanibdBt Sfifiiw, CO ?W

WertiftWtinathnEOHili(itf*DHroMammoth Ukes, CA ^3!i4*

Ai.tthori2acft)[i

Q»r( Long, Chl&? Accounting Offlc&r

tjanut HA] Bowrt a SpaW K^l HAalina t-ariwayLahafaa,H19WM

'tSwtwe <uth*<iits KfesajfftwUns umtffwSt fsfwww fts[wmotS<sn softiyfw the fiwpos^ of wstwltiy m<Ht wwtWiSfss mul wtaiiSlffiSns o tilllffl?

(KWiwit. f:vrt<?r,MvitSsatly^hf(Wii^wfbv is{g»md In nd™iuf niitt b\ tvflU)^ ty on wtl»ifie<!slwloa o!!lw <tf Mfwwst Sliand SvivSce^

fntrawest Sliared Servtcesi Inc.WA lSt!l Street, Suite 300Denver, Colorado 8KOZ

(303) 749-8270 A/P Pltftne(303)749-fi269A/PFAX

ConfidCTttal

27


CREDIT INFORMATION

Company Name:Starwood Steamboat, LLC

DBA Sheraton Steamboat ResortDBA Rollingstone Ranch Golf Club

Federal ID: 52-1193298

Billing Address:Sheraton Steamboat Resort

c/o Starwood Hotels & Resorts WorldwidePO Box 14029Scottsdale, AZ 85267

A/P Phone: 888-852-3900

DUNS: 08-195-4299

Shipping Address:2200 Village Inn Court, Steamboat Springs, CO 80487PO Box 774808, Steamboat Springs, CO 80477

Telephone:

Fax:

(970) 879-2220(970) 879-4684

Principal Owners and Officers:

Starwood Steamboat LLCAffiliate ofStarwood Hotels & Resorts Worldwide, Inc.Dan Pirrallo, General Manager (970) 871-6500Robert Harbison, Director of Finance (970) 871-6501

Bank Information:Wells Fargo Bank N.A.

320 South Lincoln Ave., Steamboat Springs, CO 80487(970) 879-0550Account Number: 4121535900

28

COMMERCIAL REFERENCES:

American Hotel RegisterPO Box 94150, Palatine, IL 60094-4150(800)323-5686Account Number: 80477SSR

EcolabPO Box 70343, Chicago, IL 60673-0343(800) 759-2837Account Number: 030088819Sales Rep: Larry Marsh

Meadow Gold DairyDept. 275, Denver CO 80271(800)313-6455Account Numbers: 4972084,5061765

US Food ServiceDepartment 597, Denver CO 80271(303) 792-3663Account Number: 33621905

Earthgrains21066 Network Place, Chicago, IL 60673(801)487-4677Account Number: 86789

29

COVER SHEET:

Ski Town Commercial, LLC and/or Assigns (the "Buyer")

635 Lincoln Avenue


Jon W. Sanders

970.871.0002

Brandon Dardanis

970.871.0002

Prepared by Jon W. Sanders and Brandon Dardanis, both of which can be reached by telephone

and/or email.

Please find the following information attached and made a part hereto:

Proposer & Intent

Desired Use

Timeframe

Public Benefit

Exhibit A - "Partners"

Exhibit B - "Iron Horse Inn - Term Sheet

Exhibit C - "Option for 655 Yampa Street - Term Sheet"

CE3 ITIiTiSNCflR U

PROPOSER & INTENT:

Established in 2009, Ski Town Commercial specializes in large asset acquisition and disposition as well aswarehouse, office, retail and multi-family acquisition, disposition and leasing in the town of Steamboat Springs.

The firm's partners, Jon W. Sanders and Brandon Dardanis have been real estate brokers for 11 years and 16

years respectively. Both Jon and Brandon worked for many years in the corporate real estate brokerage anddevelopment sector prior to Steamboat and Ski Town Commercial. The office is currently located downtown

Steamboat Springs at 635 Lincoln Avenue. In the past eighteen months Ski Town Commercial has brokered

over $28+ million dollars of commercial real estate transactions in Colorado; a proven data point which further

substantiates the ability to capitalize on this opportunity.

The intent of the Proposer (Ski Town Commercial, LLC and/or assigns), is to Purchase the Iron Horse

Inn from the City of Steamboat Springs for an amount equal to $2,600,000.00 payable in Cash at Closing.(Please see Exhibit B "Iron Horse Inn - Term Sheet")

Ski Town Commercial, LLC has brought together a group of up to three strategic partners to purchase the Iron

Horse Inn from the City of Steamboat Springs. Any one of the partners has the ability to close on this Propertyindependently, but as a focused group the town will benefit from a combined experience of:

• 700+ units of multi-family development, ownership and management in Steamboat Springs, Boulder

and Denver, CO (front range), St. Peters, MO., Sweden and Spain (Europe).

• 300+ units of current hotel operations and ownership - Sweden and Spain (Europe).

• 30+ years of restaurant ownership and management - Boulder, Denver (front range), Sweden and

Spain (Europe)• 100+ golf course developments - nationally across the United States

* Hundreds of thousands of square feet of office and warehouse development - primarily front range of

Colorado.

To further substantiate the ability to perform on such a purchase, the acquisition partner's brief bios are furtherdescribed within Exhibit A "Partners". Such Exhibit shall remain confidential and not open to or for public

review.

DESIRED USE:

The plan is to redevelop the existing buildings.

The vision is for a multi-use project which includes multi-family with a portion of the building allowing forlong term rental, seasonal employee housing (dormitory), and nightly rental as a travel hostel. We plan to

redevelop the west wing back into a bar/restaurant utilized for the hostel, but also for the public and seasonalstay guests to create social atmosphere and develop a sense of community. The hot tub/sauna structure will be

reutilized for retail use, with plans a bicycle and water sport retailer that also helps organize guests activities for

Skiing, Hot Springs tours or the like.

This Proposal fills the City's immediate needs for apartments, seasonal employee housing and affordable

travel stay, all while supporting future sales tax revenues for the City of Steamboat Springs.

TIMEFRAME:

The purchase timeframe of the property is further described in the attached Exhibit B - "Iron Horse Inn - Term

Sheet". Please note the Buyer can be flexible with regards to timing.

The timing of the redevelopment and renovation of the property would begin immediately, however it ispreferable that the permitting process begin while under contract. It is the desire of the partners to acquire this

Property quickly so that plans can be implemented in time to fulfill the demands of seasonal employee housingprior to the coming ski season; we do understand that this may not be possible and are willing to negotiate as-is

use until redevelopment timing works for all.

PUBLIC BENEFIT:

With the location being right on the core trail and a five minute walk to downtown, the Iron Horse Inn offers the

majority of the units to be multi-family (apartment) housing. Apartments are a sorely needed asset class in the

town of Steamboat. Due to its location on the bus line, tenants would have easy bus transit access to the manyemployers in town, such as the Steamboat Ski Area, downtown restaurants, Resort Group, Wyndam Properties,

Starwood etc. By creating a minority of the units to be hostel and short term stay use, this property will also filla demand of travelers that can engage in hotel type of travel at affordable rates not currently offered within the

City, but offered at almost all other ski areas around the world. By creating a restaurant/bar at the property it

will bring ail energy and community feel to the property that all can enjoy by the river and core trail.

The following is a quick summary of Public Benefit:

Seasonal Employee Housing

Apartments in the Downtown Area

Affordable Nightly rental OptionSales & Lodging Tax Revenue for the City

Additional City Benefit Option (Not a requirement of this Proposal): The City of Steamboat has previouslyexpressed interest in acquiring 655 Yampa Street since the Urban Land Institute (ULI) highly recommendedacquiring this property for a future pedestrian right-of-way across the Yampa River. Such Purchase details arefurther described within the attached Exhibit C - "Option for 655 Yampa Street - Term Sheet Such Exhibitshall remain confidential and not open to or for public review. Within the term sheet can be found the

opportunity of a trade or acquisition for an asset that is directly on the Yampa River at 7 and Yampa Street:655 Yampa Street, Steamboat Springs Colorado. The owners of the Yampa property are willing to trade/sell

their property within the acquisition of the Iron Horse Inn via this Proposal. With this acquisition the City canhave more public land that can be utilized and enjoyed by the general public for the long term future.

We certainly thank you for the review of this proposal and opportunity to develop the Iron Horse Inn into an

engaging and professionally managed property that adds apartment living, seasonal employee housing, andtravel hostel stay ability, along with retail use.

We will make ourselves available to introduce our Partners and further explain our plans and the visions for the

future of the Iron Horse Inn.

Thank you for this opportunity,

Jon W. Sanders & Brandon Dardanis

Ski Town Commercial Real Estate

970.871.0002

EXHIBITS

Sale of 331 S. Lincoln AvenueSteamboat Springs, Colorado

IRON HORSE INN - TERM SHEETJune 22, 2015

This Term sheet is non-bmding and subject to the negotiation and execution of a definitivepurchase and sale agreement ("Contract"),

Property

Buyer

Purchase Price

Contract

Earnest Deposit

Title Company

Due Diligence

Title and Survey

Real property known as and located at 331 S. Lincoln Avenue inSteamboat Springs, Colorado.

A Limited Liability Company which shall be created by the partners forthe acquisition, until such time: Ski Town Commercial, LLC, and/orassigns ("Buyer")

$2,600,000.00 Cash at Closing.

Buyers are prepared to close on the Property 10 days followingexpiration of the Due Diligence Period.

Within five (5) Days following the mutual execution and delivery of thePurchase Contract, Buyer will deposit an amount equal to $100,000.00with the Escrow Hoider (Title Company). At Closing, the Deposit shallbe credited against the Purchase Price. The Deposit will be returned toBuyer if Buyer elects not to proceed with the Purchase of the Property onor before the expiration of the Due Diligence Period (as defined below).

Land Tile Guarantee Company, unless otherwise agreed to between

Seller and Buyer.

Buyer will have a due diligence period that shall expire 30 day aftermutual execution of the Purchase Contract. As part of the due diligence

materials;, Seller will deliver to Buyer any Leases in its possession within

10 days of mutual execution of the Purchase Contract. Purchase shall

not be conditioned upon any additional Due Diligence outside of theLease Review and Title Review & Objection.

As part of the due diligence materials. Seller will deliver to Buyer anyadditional surveys in its possession and a commitment for a standard

coverage owner's policy of title insurance within 10 days of mutual

execution of the Purchase Contract. Buyer shall have from the receipt of

the title commitment and exception documents, until 20 days followingmutual execution of the Purchase Contract (the "Title Review Period")to review title and notify Seller of any objections to title. The titleinsurance premiums attributable to standard title insurance coverage in

the amount of the Purchase Price shall be allocated in accordance withthe custom for commercial real estate transactions in the county in which

the Property is located.

Prorations and

Closing Costs As applicable, all items of revenue and expense with respect to theProperty, including real estate taxes, rents, and other revenues shall all be

prorated as 11:59 pm, local time, on the day of closing, withconventional prorations to be set forth in the Purchase Agreement.

AH closing costs shall be allocated in accordance with the custom forcommercial real estate transactions in the county in which the Property islocated.

Broker Ski Town Commercial, LLC, as Transaction Broker. Broker

Commission shall be paid for by Buyer at Closing, unless otherwiseagreed to in writing.

Confidentiality The terms of this LOI are confidential and will not be disclosed to anyother parties.

If the foregoing outline of basic terms and conditions is acceptable to you, we request that you soacknowledge by signing and returning the enclosed copy of this letter by 5:00 P.M., MountainTime, on July 22 , 2015, unless otherwise agreed to between the parties.

Seller and Buyer also acknowledge and agree that this letter is non-binding and is not intended tobe, and in no way creates a contract of any kind, including, without limitation, a contract to

negotiate, and should not be construed as an agreement for the sale and purchase of the Property

nor a binding agreement nor an agreement to enter into a binding agreement, but is merely

intended to specify certain of the terms and conditions of the transaction contemplated herein, and

does not necessarily include all of the material terms and conditions which will be required in thePurchase Agreement. Seller and Buyer further acknowledge that the enumeration of certain

contingencies, conditions, warranties and representations in this letter is not intended to be

exhaustive, and the Purchase Agreement may well contain additional contingencies, conditions,

warranties, and representations. Notwithstanding the foregoing, the confidentiality provisions

contained above shail be binding.

This letter shall be governed by the laws of the State of Colorado, and each party hereto consentsto exclusive jurisdiction and venue in such State.

Submitted this 22nd day of June, 2015.

BROKER: Ski Town Commercial, LLC

( ']()~"7/ "

BY:Jan W Sanders

Agreed and accepted this _ day of_, 2015.

BUYER: Ski Town Commercial, LLC and/or Assigns

BY:NAME:Its:


BY:NAME:Its:

Exhibit A

Jj'f|^,,...-V

EXHIBIT C

June 22, 2015

City of Steamboat Springsc/o City CouncilSteamboat Springs, COVia RFP: Iron Horse Inn Proposal

RE: INTENT TO PURCHASE655 YAMPA STREETSTEAMBOAT SPRINGS, COLORADO

Dear City of Steamboat Springs,

This letter shall serve to confirm the Property Owner's interest in selling 655 Yampa Street to theCity of Steamboat Springs.

We are hoping for your continued interest in purchasing the 655 Yampa Street Property. Inresponse to the historical interest we have prepared a proposal and accompanying Term Sheet

(together, the "Terms") outlining the key terms under which 655 Yampa, LLC or its affiliate("Seller") is prepared to negotiate a contract to sell 655 Yampa Street, Steamboat Springs,Colorado 80477 (the "Property") at the time of the Iron Horse Inn acquisition.

Assuming the same group (Ski Town Commercial, LLC and/or assigns) would be acquiring theIron Horse Property with their partners, we believe this makes an excellent time opportunity toClose on this transaction in tandem with the Iron Horse Property acquisition. We believe the Citycould Sell the Iron Horse Property and acquire 655 Yampa Street on the same day. This property,containing approximately .26 Acres, is currently being marketed for $1,900,000.00. Weunderstand the current economic and market conditions and thus believe that our following terms

and pricing of this transaction is competitive in today's environment.

Please contact us if you have any questions regarding this Term Sheet. Please indicate your

acceptance of the terms by returning a signed copy to us at your earliest convenience.

Best Regards,

Jan W. Sanders On behalf of:Ski Town Commercial, LLC 655 Yampa, [email protected]

970.871.0002

Sale of 655 Yampa StreetSteamboat Springs, Colorado

OPTION for 655 YAMPA STREET - TERM SHEETJune 22, 2015

This Term sheet is non-bmding and subject to the negotiation and execution of a definitivepurchase and sale agreement ("Contract").

Property

Buyer

Purchase Price

Contract

Earnest Deposit

Title Company

Due Diligence

Title and Survey

Prorations and

Closing Costs

Broker

Real property known as and located at 655 Yampa Street in SteamboatSprings, Colorado.

City of Steamboat Springs, or affiliate ("Buyer")

$1,650,000.00

At City's discretion, however a Closing is to occur in tandem at the

Closing of the Iron Horse Inn Property Closing.

None.

Land Tile Guarantee Company, unless otherwise agreed to between the

parties.

Buyer will have a due diligence period which shall expire 5days prior toClosing. Buyer shall have the right, at any time during the DueDiligence Period, and for any reason or no reason whatsoever, to

terminate the Purchase Agreement. Buyer may at Buyer's full discretion,

chose to accelerate the Due Diligence Period to allow for an earlier

Closing Date.

At City's discretion, as part of the diligence materials. Seller will deliverto Buyer any survey in its possession and a commitment for a standard

coverage owner's policy of title insurance. Buyer shaU have from the

receipt of the title commitment and exception documents, until Sdays

prior to Closing (the "Title Review Period") to review title and notifySeller of any objections to title. The title insurance premiums attributableto standard title insurance coverage in the amount of the Purchase Price

shall be allocated in accordance with the custom for commercial real

estate transactions in the county in which the Property is located.

As applicable, all items of revenue and expense with respect to the

Property, including real estate taxes, rents, and other revenues shaU all be


All closing costs shall be allocated in accordance with the custom forcommercial reai estate transactions in the county in which the Property is

located.

Ski Town Commercial, LLC, as Transaction Broker, shall be paid fivepercent (5%) of the Purchase Price from Seller proceeds at Closing.

Confidentiality Effective with Buyer's acceptance of this LOI, Seller will not engage inany sale discussions with any other parties for a period of 30 businessdays to provide time for Contract negotiation/execution. The terms of

this LOI are confidential and will not be disclosed to any other parties.

If the foregoing outline of basic terms and conditions is acceptable to you, we request that you soacknowledge by signing and returning the enclosed copy of this letter by 5:00 P.M., MountainTime, on July 22"(1, 2015.




intended to specify certain of the terms and conditions of the transaction contemplated herein, anddoes not necessarily include all of the material terms and conditions which will be required in thePurchase Agreement. Seller and Buyer further acknowledge that the enumeration of certain

contingencies, conditions, warranties and representations in this letter is not intended to be



contained above shaU be binding.

This letter shall be governed by the laws of the State of Colorado, and each party hereto consentsto exclusivejurisdiction and venue in such State.


BROKER: Ski Town Commercial, LLC/'""\ -/")

n:<--^-^BY:

Jon W Sanders

Agreed and accepted this _ day of_, 2015.

BUYER: City of Steamboat Springs

BY:NAME:Its:

SELLER: 655 Yampa, LLC

BY:NAME:Its:

Exhibit A

100

"PREMISES"

June 22, 2015

City of Steamboat Springsc/o City CouncilSteamboat Springs, COVia RFP: Iron Horse Inn

RE: INTENT TO PURCHASE655 YAMPA STREETSTEAMBOAT SPRINGS, COLORADO

Dear City of Steamboat Springs,

This letter shall serve to confirm the Property Owner's interest in sellmg 655 Yampa Street to theCity of Steamboat Springs.

We are pleased of your interest in purchasing the 655 Yampa Street Property. In response to theinterest we have prepared a proposal and accompanying Term Sheet (together, the "Terms")

outlining the key terms under which 655 Yampa, LLC or its affiliate ("Seller") is prepared tonegotiate a contract to sell 655 Yampa Street, Steamboat Springs, Colorado 80477 (the"Property").

Assuming the same group (Ski Town Commercial, LLC and/or assigns) would be acquiring theIron Horse Property with their partners, we believe this makes an excellent time opportunity toClose on this transaction in tandem with the Iron Horse Property acquisition. We believe the Citycould Sell the Iron Horse Property and acquire 655 Yampa Street on the same day. This property,containing approximately .26 Acres, is currently being marketed for $1,900,000.00. Weunderstand the current economic and market conditions and thus believe that our following termsand pricing of this transaction is competitive in today's environment.

Please contact us if you have any questions regarding this Term Sheet. Please indicate youracceptance of the terms by returning a signed copy to us at your earliest convenience.

Best Regards,

'. i^-e/3.

Jon W. Sanders Howard UlepSki Town Commercial, LLC 655 Yampa, [email protected]

970.871.0002

Sale of 655 Yampa StreetSteamboat Springs, Colorado

TERM SHEETJune 22, 2015

This Term sheet is non-binding and subject to the negotiation and execution of a definitivepurchase and sale agreement ("Contract").

Property

Buyer

Purchase Price

Contract

Earnest Deposit

Title Company

Due Diligence

Title and Survey

Prorations and

Closing Costs

Broker

Real property known as and located at 655 Yampa Street in SteamboatSprings, Colorado.

City of Steamboat Springs, or affiliate ("Buyer")

$1,600,000.00

At City's discretion, however a Closing Is to occur in tandem at theClosing of the Iron Horse Inn Property Closing.

None.

Land Tile Guarantee Company

Buyer will have a due diligence period which shall expire 5days prior toClosing. Buyer shall have the right, at any time during the DueDiligence Period, and for any reason or no reason whatsoever, to

terminate the Purchase Agreement. Buyer may at Buyer's full discretion,

chose to accelerate the Due Diligence Period to allow for an earlierClosing Date.

At City's discretion, as part of the diligence materials. Seller will deliverto Buyer any survey in its possession and a commitment for a standard

coverage owner's policy of title insurance. Buyer shall have from the

receipt of the title commitment and exception documents, until 5daysprior to Closing (the "Title Review Period") to review title and notifySeller of any objections to title. The title insurance premiums attributableto standard title insurance coverage in the amount of the Purchase Price

shall be allocated in accordance with the custom for commercial realestate transactions in the county in which the Property is located.

As applicable, all items of revenue and expense with respect to theProperty, including real estate taxes, rents, and other revenues shall all be


All closing costs shall be allocated in accordance with the custom forcommercial real estate transactions in the county in which the Property islocated.

Ski Town Commercial, LLC, as Transaction Broker, shall be paid five

percent (5%) of the Purchase Price from Seller proceeds at Closing.

Confidentiality Effective with Buyer's acceptance of this LOI, Seller will not engage inany sale discussions with any other parties for a period of 30 businessdays to provide time for Contract negotiation/execution. The terms of

this LOI are confidential and will not be disclosed to any other parties.

If the foregoing outline of basic terms and conditions is acceptable to you, we request that you soacknowledge by signing and returning the enclosed copy of this letter by 5:00 P.M., MountainTime, on July 22nd, 2015.




intended to specify certain of the terms and conditions of the transaction contemplated herein, anddoes not necessarily include all of the material terms and conditions which will be required in thePurchase Agreement. Seller and Buyer further acknowledge that the enumeration of certaincontingencies, conditions, warranties and representations in this letter is not intended to be



contained above shall be binding.

This letter shall be governed by the laws of the State of Colorado, and each party hereto consentsto exclusive jurisdiction and venue in such State.



0-iBY:

Jon W Sanders

Agreed and accepted this _ day of June, 2015.

BUYER: City of Steamboat Springs

BY:NAME:Its:

SELLER: 655 Yampa, LLC

i-C^fî^^, ^

BY:NAME: Howard UlepIts: Managing Member

Exhibit A

c:Qmmsj=K=iFiL-

EXHffiIT B - Replacement

Sale of 331 S. Lincoln AvenueSteamboat Springs, Colorado

IRON HORSE INN - TERM SHEETSeptember 18,2015

This Term sheet is non-binding and subject to the negotiation and execution of a definitive

purchase and sale agreement ("Contract").

Property

Buyer

Seller

Purchase Price

Contract

Earnest Deposit

Title Company

Due Diligence

Title and Survey

Real property known as and located at 33 I S. Lincoln Avenue in

Steamboat Springs, Colorado.

A Limited Liability Company which shall be created by the partners forthe acquisition, until such time: Ski Town Commercial, LLC, and/or

assigns (Buyer).

City of Steamboat Springs ("Seller").

$ J. ^^^0^-<ya Cash at Closing. 4 ^06^000, OQ £^(î(^ t>u?UC S^.6^'1'

Buyers are prepared to close on the Property 10 days following

expiration of the Due Diligence Period.

Within five (5) business days following the mutual execution anddelivery of the Purchase Contract, Buyer will deposit an amount equal to

$100,000.00 with the Escrow Holder (Title Company). At Closing, theDeposit shall be credited against the Purchase Price. The Deposit will bereturned to Buyer if Buyer elects not to proceed with the Purchase of theProperty on or before the expiration of the Due Diligence Period (asdefined below).

Land Title Guarantee Company, unless otherwise agreed to between

Seller and Buyer.

Negotiable - Buyer will have a due diligence period that shall expire 50days after receipt of substantially all Due Diligence materials fromSeller. As part of the due diligence materials, Seller will deliver toBuyer any Leases in its possession within 10 days of mutual execution of

the Purchase Contract. Purchase shall not be conditioned upon any

additional Due Diligence outside of the Lease Review and Title Review& Objection.

Negotiable - As part of the due diligence materials, Seller will deliver toBuyer any additional surveys in its possession and a commitment for a

standard coverage owner's policy of title insurance within 10 days of

mutual execution of the Purchase Contract. Buyer shall have from the

receipt of the title commitment and exception documents, until 20 days

following mutual execution of the Purchase Contract (the "Title Review

?c•3^0

Prorations and

Closing Costs

Conditions of Sale

Use & Zoning

Broker

Confidentiality

Period") to review title and notify Seller of any objections to title. Thetitle insurance premiums attributable to standard title insurance coverage

in the amount of the Purchase Price shall be allocated in accordance with

the custom for commercial real estate transactions in the county in which

the Property is located.

Negotiable - As applicable, all items of revenue and expense with respect

to the Property, including real estate taxes, rents, and other revenues shall

all be proratecf as 11:59 pm, local time, on the day of closing, withconventional prorations to be set forth in the Purchase Agreement.

All closing costs shall be allocated in accordance with tlie custom forcommercial real estate transactions in the county in which the Property is

located.

The Buyer shall take possession of the Property with Leases in place,

which shall be assigned at Closing. Furthermore, Buyer agrees to accept

a Sheraton Lease through March 31 , for the second or first floor of the

A Building, and a Lease with the City for the First or second floor of theA Building for the same. The Buyer agrees to honor the existing Leases

within Building B, and plans to keep such as long-term multi-family

housing, except for during the periods of which Buyer needs to vacate

the Premises for the purpose of renovations.

On or before expiration of the Due Diligence period. Seller shall causethe Property to be permitted for Dormitory and Long-term stay Multi-

family use.

Ski Town Commercial, LLC, as Transaction Broker.

The terms of this LOI are confidential and will not be disclosed to anyother parties.

If the foregoing outline of basic terms and conditions is acceptable to you, we request that you so

acknowledge by sign/ng and returning the enclosed copy of this letter by 5:00 P.M., Mountain

Time, on _(^ / f\ _ , unless otherwise agreed to between the parties.T

Seller and Buyer also acknowledge and agree that this letter is non-binding and is not intended to

be, and in no way creates a contract of any kind, including, without limitation, a contract to



intended to specify certain of the terms and conditions of the transaction contemplated herein, and

does not necessarily include all of the material terms and conditions which will be required in the

Purchase Agreement. Seller and Buyer further acknowledge that the enumeration of certain

contingencies, conditions,, warranties and representations in this letter is not intended to be



contained above shall be binding.

This letter shall be governed by the laws of the State of Colorado, and each party hereto consents

to exclusive jurisdiction and venue in such State.

Submitted this 15 day of September, 2015.


BY:

BY:

Ipn W Sanders

Brandon Dardanis

Agreed and accepted this <^-ii- day of Srjc^L>-s 2015.

BUYER: Ski 'poîi Commercial, LLC and/or AssignsI

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Proposal Requirements

Pages 1-8 (2) Describe the proposer's current operations and locations. Include branding

affiliations as may be applicable and any other pertinent qualifications achievethe intent of this request Explain in detail the development or operations or desire to

purchase.

Page 9 (3) State whether the proposer is offering a shared financial and/or operationalinterest with the city for some or all of the proposed development or operation.

Page 9

Pages 9-10

Pages 11-12

Page 13

Page 13

(4) Proposer to provide specific detail of operational and financial terms andconditions.

(5) Describe the propose r/s financial capability to purchase, develop or operate theintended use.

(6) Provide a general time frame for the improvement, development or purchase of the

property.

(7) Any additional information that may be beneffcial to the City to indicate theproposer s interest.

(8) If applicable, please describe in detail the public benefit provided by the proposed

development^ operation, etc.

ssasBsm

iii'J^SI wsss

I § i i

(2) Describe the proposed current operations and locations. Include branding affiliations as may be applicable

and any other pertinent qualifications achieve the intent of this request. Explain in detail the development or

operations or desire to purchase.

The Base LLC. is new business that was formed a little over a year ago. The Base has been in search of a property in thedowntown Steamboat Springs to open a hostel and employee housing business. David and Georgie, Founders of TheBase, have and stayed and worked in hostels around the world which sparked interest in opening a hostel in SteamboatSprings. The idea of opening a hostel became an exciting venture to pursue because one, there is no hostel in SteamboatSprings and two/ our unique business model solves an issue with accommodation and long term rentals for employees orresidents. To help drive the business we abide by a set of core values which we will strive to maintain as wel! as a set ofcritical success factors to apply too our business.

- Honesty

-Safety and Security- Clean, fresh, well presented rooms

- Staff training and Empowerment" Customer obsession

-Great value

- Enjoyable ambience- Enriching experience

-Staff friendliness, knowledge and efficiency- Cleanliness and presentation of rooms including "common spaces"

- Kitchen fit-out

- Communications capability/efficiency-website, wi-fi, reservation software ect.

- Entertainment and bar

- Ambience and quiet spaces

" Sightseeing and tour guidance /organization

Today, quality budget accommodations do not exist in Steamboat Springs, especially in the downtown area. As aresult, travellers whether seeking sports or other recreational pursuits, together with seasonal workers, are finding itincreasingly difficult to secure reasonably priced accommodation. We feel that a hostel and lodge is the perfect solution.

A Hostel and Lodge, typically located downtown close to transport, shops, cafes and restaurants/ and, entertainment,

provides "affordable" accommodation year round with "room rates" up to 30 % less than traditional motels andhotels. Hostels provide "common spaces" which encourage social interaction, a communal kitchen, a reading and

computer room, a games room and bar, laundry and storage facilities, and shared accommodation. Theambience of a

hostel, particularly the Iron Horse !nn Location, backed by a friendly efficient staff creates a "home away from homeexperience.

The hostel concept has been around in the United States for a long time but due to the recent economic climate thehostel business mode! has become increasingly popular. The Base Hostel and Lodge, located in the heart of SteamboatSprings, will attract these visitors because of its very competitive pricing points, location/ambience, facilities, and greatfriendly service.

i m a

IS31

a

i

There is a dear need for additional accommodation in Steamboat Springs, particularly/ downtown. Occupancy rates inthe Central Business District (CBD) are 10-15% higher than the rest of the areas accommodations. Hostels are a conceptthat is rapidly emerging in the US/ particularly in resort towns but has yet to arrive in Steamboat Springs.

The Base Hostel & Lodge will offer a range of accommodation options. En-suite rooms wilt cater to guests seekingshort-term private accommodation and individuals looking for long-term rentals. Shared accommodation rooms willappeal to individuals, couples or small groups visiting for short-term stays. The Base's pre-eminent competitive positionwill be driven by off street parking, laundry and storage facilities, a safe and secure environment with facilities and staffcreating an exciting ambience. The ideal space will be located in or near the CBD of Steamboat Springs, of which thereare several. It wi!! be revamped and refurbished to transition from an under utilized building into a modern hostel layoutthat brings focus to the "common spaces" encouraging the social interaction.

The Base will target travellers who are searching for a fun/ safe and affordable place to stay. The introduction of thisunique concept to Steamboat Springs will lift overall visitor numbers.

Refurbishing The Iron Horse Inn will not only help our business succeed but it will help increase the value of the property.The property has had a string of missed opportunities in renting out both buildings successfully. Because only onebuilding is being rented out/ the property is being underutilized. The Base Hostel & Lodge will be able to utilize bothbuildings while solving two issues that downtown Steamboat Springs currently has; accommodation and Month tomonth housing for people who live and work in Steamboat Springs.

The Base will utilize Building A as a hybrid between a hostel and hotel. Our goals of opening a successful business will beattained after rebranding/ remodeling and utilizing our great staff to manage the property.

The Base is committed on keeping Building B as month to month rentals for people who live and work in SteamboatSprings. Improving this area to make it safe and secure as well as creating an inviting and pleasant experience is

important.

See plans for more details on pages 3-8

(3) State whether the proposer is offering a shared financial and/or operational interest with the city forsome or all of the proposed development or operation.

The Base is looking to lease the property with the intention to buy. The Base's plan for The Iron Horse Inn propertyprovides the least amount of impact with the most amount of benefit for our operations and for the City of SteamboatSprings. Our company would like to rent the property under an agreed upon lease with an option to buy the propertyafter the lease has expired or have the option to buy during the course of the lease.

The Base will be investing our money back into the business and into the Property which will make our business asuccess but also improve the value of the property.

(4) Proposer to provide specific detail of operational and financial terms and conditions.

Ideally, The Base LLC. would like to sign a 5 year lease with the option to re-sign the lease or buy the building once fundsbecame available. If the City decides to sell the property, The Base would like a provision in the lease stating operationswill continue through the remainder of the lease. The Base would also like first right of refusal if an offer is made on the

property.

If awarded with the property on the basis of a lease agreement, the first five years the Base LLC agree to pay the Statedamount in the RFP of $216/000 a year. After five years The Base LLC will have the opportunity to re-sign the lease or after'X' year have the opportunity to buy the property from the City.

(5) Describe the proposer/s financial capability to purchase, develop or operate the intended use.

The Base LLC has a combined 350,000 to invest which include stakeholder investments and pledged funds.These fundsprovides us with the opportunity to be loan free and phase the remodel. Ultimately we can open the doors as is butusing $250,000 to improve Building A will help launch our business. As the business grows we will be able to do more

renovations to the property.

See The Base's Pro Forma on the following page

I SBia• sa

n

Mam

SSS8u

(M • B

Revenue

Hostel & Lodge SalesLease Revenue

Vending Sales

Lounge Revenue

GROSS REVENUE

EquityCash Investment

Capital Expenditure

Startup Cost

Hostel & Lodge RemodelLounge Build OutExterior Remodel

Total Capital Expenditure

Loan Amount

Line of Credit

Cost of Goods SoldLinens

Merchant Fees

Food & BevTOTAL COGS

Operating Expense

AdvertisingSank Service Charges

Computer Expense

Dues/SubscriptionsGuest GiftsInsurance

La ndscaping/G roundsWages

FICAWorkers Comp

BenefitsPenalties/Late FeesPostage

Accounting

Repair & Maintenances

Rent

Janitorial SuppliesLodging SuppliesOffice SuppliesCableUtilitiesTrash

Other Expense

TOTAL EXPENSE

Cash Flow

Net ProfitDividendsEOY Cash Balance

Year 1

i_

i_

i_$

_$_

$

_$_

$_

1^_$_

I:

I:

_$_

_$_

_$_

$

_$_

1.

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$_

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i_

$_

$_

$_

1.

$_

$_

_$_

$_

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$_

$_

_$_

A.

_$_

$

$_

$$

475,563.40

204,300.00

15,150.00

38,955.06

733,968.46

300,000.00

100,000.00

150,000.00

250,000.00

50,000.00

15,150.00

7,070.00

12,120.00

34,340.00

12,000.00

250.00

1,000.00

1,300.00

1,000.00

25,000.00

13,500.00

192,940.00

25,082.20

3,858.80

6,000.00

500.00

250.00

8,400.00

18,000.00

216,000.00

6,000.00

10,000.00

2,000.00

10,000.00

65,000.00

6,200.00

6.500.00

630,781.00

68,847.45

118,847.45

Year 2

$_

$_

$_

$_

I:

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$_

$_

$

$

$_

$_

$$

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$_$$

!_$F

578,184.11

204,300.00

15/301.50

72,918.24

870/703.85

100,000.00

200,000.00

300/000.00

15,301.50

7,140.70

12,241.20

34,683.40

12,240.00

255.00

1,020.00

1,326.00

1,020.00

25,500.00

13,770.00

196,798.80

25,583.84

3,935.98

6,120.00

510.00

255.00

8,568.00

18,360.00

216,000.00

6,120.00

10,200.00

2,040.00

10,200.00

66,300.00

6,324.00

6,630.00

639,076.62

196,943.83

15,791.28

Year 3

î_

$_$-$1,<

J_

$_

i,

$_$i_

$

!_

$_

$.$_

$_

$_

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A-

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1^

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704,975.31

204,300.00

15,454.52

85,699.43

1,010,429.25

300,000.00

300,000.00

15,607.53

7,283.51

12,486.02

35,377.07

12,484.80

260.10

1,040.40

1,352.52

1,040.40

26,010.00

14,045.40

200,734.78

26/095.52

4,014.70

6,242.40

520.20

260.10

8/739.36

18,727.20

216,000.00

6,242.40

10/404.00

2,080.80

10,404.00

67/626.00

6,450.48

6,762.60

647,538.15

327,514.03

43,305.31

Year 4

$_

1.

i_$i_

$

i_

i_

i.

i_

F

F

i_

1,

i_$

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$_

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1.

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$$

_$_

$$

719,074.82

204,300.00

15/763.61

87,413.42

1,026,551.84

200,000.00

200,000.00

15,919.68

7,429.18

12,735.74

36,084.61

12,734.50

f£ ii]I ! m

(6) Provide a general time frame for the improvement, development or purchase of the property.

We do not see this business venture as a short term investment. We see this project becoming a staple in thecommunity. To be successful and for the continued growth of the business. The Base will have to reinvest money into theproperty. Over the first four to five years, the Base will invest $950,000 in renovations a nd improvements. If awarded the

opportunity to start our business on the property, we would develop the site in phases.

Phase I-Focus on building A. Add shared accommodation rooms, communal kitchen, common area/ and refurbish the

front lobby area.

Phase I!-Focus on adding a lounge. After the first winter season, we would start to remodel the north buildingthat is attached to Building B.-This will also include the additional patio out the West side of Building A. This can be seen in our renderings.

Phase III-Improving the landscape around Building B. Along with the bar and lounge, we would improve and add an

outdoor seating areas, paths/ and a fire place

Phase!V-improve the exterior of both buildings.

Time line on following page.

(7) Any additional information that may be beneficial to the City to indicate the proposer /s interest.

The Base LLC. is committed to increase the City's accommodation capacity and to provide housing for the residentswho live and work in Steamboat Springs. Using the property this way wil! be the least impactful but wil! have the most

amount of benefit for the City and the community of Steamboat Springs.

Bios and resumes on the following pages

(8) If applicable, please describe in detail the public benefit provided by the proposed development

operation, etc.

The main public benefit from our proposal is going to be the overall improvement to a property that has great historicalvalue for the City of Steamboat Springs. The Iron Horse has had a string of misfortunes but with rebranding, afresh newidea and improving the condition of the property will bring it new fife not only enjoyed by the guests but the community

as well.

David Rock - Founder

M^1

h t\David's itch for traveling and extending the boundaries of his own comfort zone came at a very young

age. Alongside his family, they would set out on many road trips and vacations across the US. Learningat a young age to trust few people, always double check your bags, stick the schedule/ and always betwo hours early for your flight are very important things about traveling.

After high school David enrolled at North Dakota State University where he studied Architecture. This

degree/ like most, had its ups and downs, but one of the perks was that it offered the experience tostudy abroad. This is where he first went overseas to Europe and experienced hosteling firsthand. Helearned very quickly/ that traveling wasn't all about what his family had taught him. Although some off

thosethingare very important, the very opposite is just as important. Hostelinggave him a differentperspective on how to enjoy the company of others who are in the same boat as you/ to visit and meetwith complete strangers, to learn and gain knowledge of the area first hand by the people staying at the

same place as you.

His first taste of traveling overseas was never forgotten. After he graduated from NDSU/ David moved toAustralia to gain work experience in the architectural field. He soon discovered that was not going to bethe case. He lived and worked in a hostel for the majority of his time spent down under. Shortly afterarriving back in the US/ he settled in Steamboat Springs where he is pursuing his professional career asan architect with Vertical Arts. Recognizing the need for affordable accommodation in the US gave him

the idea to open a hostel in Steamboat Springs.

dr David Roc)< Resume3203396622

Job Captain [email protected]

Objective-To apply the skills I have learned through my educational and professional work experience

EducationNorth Dakota State University Fargo, ND"Master of Architecture iVi.iy "w ] o

"Bachelor of Science in Environmental Design fVw/ :io09

Computer SkillsRevit AutoCAD Photoshop Indesign Illustrator Sketchup Microsoft Office Suite

PrpfessiQnal ExperienceVertical Arts Architecture - Steamboat Springs, COJob Captain Januai'y 20'i 2 • preêiil

-Manage project BIM models. Develop drawings In all phases from design through construction documents. Meetwith clients, contractors, and consultants.

Greenstaff- Sydney, NSW AustraliaGeneral Laborer fvUy 201 1 Auqust 2011

-Basic landscape duties; worked with a team to plant trees and grass, graded land, pre-formed concrete form

work, and installed drain pipe

Roers" Development Incorporated - Fargo, NDIntern Architect Jun;-2 ô0<' Octot_)ei iK)! 0

-Configured site plans, floor plans, and elevations for residential and commercial projects-Developed construction documents. Critiqued and updated company websjte-Research and code review

Lang Building and Design St. Cloud, MNCarpenter Surnrners 2003 • <-!007

-New residential structures - structural framing, window installation, roof and siding applications, dr/waliinstallation, wood flooring and trim applications-Remodel of residential and commercial structures - complete and partial remodeling projects

Activities and HonorsAmerican Institute of Architecture Students September 2006 May 201 o"Treasurer October 2008- Octobo) 2009-Managed money raised for AIAS NDSU"Assisted, organized and hosted biweekly meetings

Freedom by Design-Designed and constructed better living situations for the disadvantaged and disabled

College of Engineering and Architecture Ambassador Q( toi )or 2008 M?y 20 10-Gave college tours to prospective students-Assisted with events held by the College of Engineering and Architecture

E. Georgie Walters" Founder

Georgie Walters/ onginaiiy from Australia, has lived/ studied and worked in Hong Kong, Japan/ the UK/

France and Italy and, the USA.

After graduating from the University of Denver in 2002 she moved back to Australia to further hereducation and gained a Diploma of Education from La Trobe University.

Georgie taught in Australia for three years and a further two years in London, England.She then moved back to the US and Steamboat Springs in 2009 working in the Hospitality industry. She

now considers Steamboat Springs, home.

Georgie has extensive experience globally from "high-end " resorts and hotels to hostels and backpackers accommodation.

She has a proven record of developing strong relationships with both guests and staff alike.Georgie is committed to building the Base brand as the "iconic "hostel experience in North America, and

beyond.

GEORGINA E. WATTERS612 Oak Street • Steamboat, Colorado • 80487 • gcorgie^waUersj®gjnaiLcom

• Mobile (206) 713-7985

EDUCATION & DIPLOMAS

Graduate Diploma of Education (Primary) - LaTrobe University, Melbourne (2005)Bachelor of Arts, Major: Anthropology Minors: Art & Art History, Marketing - University of Denver, Colorado

(2002)Secondary Education Certificate — American School of Paris, France (1997)Computer skills: MS Word, Excel, Powerpoint, Internet (Research & Navigation)

HOSPITAUTY EXPERIENCE

SUNPIES BISTRO - Steamboat Springs, Colorado 11/2009 ~ Current

Eusure customer satisfaction while maintaining quality and consistence in a high volume enviromnet.Maintained blaanced cash drawer at the beginnning and end of evey shift. Demonstrated patience andendurance.

SLOPESIDE GRILL - Steamboat Springs, Colorado 8/2009 -11/2014

Responsible for serving behind the bar, as well as waitressing on the restaurant floor. Scheduled partybookings and continually maintained a high standard of service.

TEACHING EXPERIENCE

STEAMBOAT SPRINGS SKI RESORT, Steamboat Springs, CO 11/2009 - CurrentCertified Ski Instructor by the PSIA. Adhear to current skiing and sports philosophies. Taught various skiingtequniques amd safety precautions to all levels of ability.

GAINSBOROUGH PRIMARY SCHOOL - Hackney Wick, London 11/2008 - 10/2009

Managed classroom coverage of 5th and 6th grade. Assumed all responsibilities of a classroom teacher,including professional development, communication with parents, assessment of students and staff meetings.Collaborate with cooperating teachers to design curriculum and lesson plans.

PROTOCOL EDUCATION - London, England 8/2007 - n/20o8

Worked at a number of schools over a two year period covering both ends of the socio - economic scale.Involved in curicula development, interactive learning structures, and discipline, especially social awarenessand responsibility skills. Active participant in teacher development and team building skills.

ADDFFJONAL EXPERIENCE

FOLEVS DEPARTMENT STORE - Denver, Colorado 6/2002 -12/2003Assistant Manager

Developed and built on a broad range of analytical, management, and business skills - forecasting trends,analyzing sales and profitability, managing merchandise and inventory, planning promotions and supervisingassociates.

KEYBARBIN fTV LTD - Baryulgil, NSW Summer/breaks 1996-currentAssistant Manager

'Keybarbin' is a 8,000 acre cattle property holding 1,500 head of cattle. Directed breeding and heardmanagement, pasture and feed development and the general maintenance of the property and its equipment.Responsible for budget maintenance.

ACHIEVEMENTS & SKILLS

•Extensive participation in student teams-Participated / Led groups to create business reports and presentations-Developed communication skills and built analytical skills

•International background and experience-Can comfortably live and travel internationally

•Division I Women s Lacrosse player 1997-2001-Developed valuable leadership skills-Demonstrated excellent time management and scheduling abilities-Applied goal setting and measurement techniques to track and improve performance-Committed to year round training to gain competitive edge

Ryan Olson - Hostel ManagerRyan served at the Directorof Operations at Rocky Mountain Youth Corps for 4 years and had previously

been in the ski service industry for over eleven years, including seven years of management, before

deciding to join The Base Hostel & Lodge team as our General Manager. We knew we had found themissing piece to our puzzle after sitting down with Ryan and finding that his ambitions were in line withour plan. We have known Ryan for years and trust him to manage and run the daily operations of TheBase. His passion for Steamboat and all the outdoor recreation opportunities it has to offer coupled with

his years of experience in customer service/finance, accounting, budgeting, project management,

marketing, and personnel management will be invaluable during the start-up phase and continuing into

operating The Base once we open.

R.I.A. Rod Waiters - Financial Advisor

An Australian, currently lives in New South Wales, Australia.

Rod graduated from Monash University with a Bachelor of Economics degree in 1966 and also holds aMasters Degree in Business Administration from the University of New South Wales/ Sydney.

He worked for over 20 years with ALCOA becoming the Far East regional Managing Director based in

Hong Kong.

Rod then Joined PPG Industries Inc. in 1986 as the regional President, Asia - Pacific based firstly in HongKong and then/ Tokyo. His role was to establish a regional team to firstly build PPG's glass, f/g, coatingsand chemicals sales while establishing some 20 joint ventures. Rod, then went on to become VicePresident Coatings - Europe based in Paris. PPG had operations in 11 countries with a turnoverapproaching US$1.5bn. He was an Officer of the Company and a member of the Chairman's Council for

10 years.

Rod clearly sees a "niche", a unique opportunity to create a "hostel" in downtown Steamboat Springs

and take the "brand", the concept across Nth. America.

RYAN OLSON

467 8fh St, Steamboat Springs, CO 80487 • C: 3603190437 4 [email protected]

PROFESSIONAL SUMMARYSmall business consultant and operations manager with a successful record running a consulting firm, as well as the operations

for a non-profit organization, and managing sports retail companies. Managed many different aspects of business including:

business plan development, finance and accounting, multi level government contracting, project planning and management,

business operations, strategic planning, developing and introducing marketing plans, developing margin boosting product buying

plans and growing retail product sales.

CORE COMPETENCIESExcellent people & communication skills • 11 years personnel management

Skilled at navigating multiple responsibilities • 15 years customer service experience

Budget development & project management • Developing efficient business systems & identifying best

Proficiency with Microsoft Office Suite & accounting practicessoftware • Long-term business planning and execution

EXPERIENCE

Owner/Consultant, 01/2014 to Current

Exceptional Strategies —Steamboat Springs, CO

Research, analyze, and develop opportunities for new business. Meet with and assist clients requesting business consultingservices, including: business plan development, financial analysis and planning, marketing assistance, business

management and operations, human resources, and legal issues.

Accomplishments:

• Successfully established business.

• Motivated clients to focus on relevant solutions to their issues.

• Coached clients on results- driven personnel management styles.

• Advised clients on accurate financial records keeping and inventory management.

Director of Operations, 05/2010 to 12/2013Rocky Mountain Youth Corps - Steamboat Springs, CO

Senior leadership role responsible for all business finances, budgeting, equipment, and field personnel management.

Responsible for multi level government project, contract, & grant management.

Accomplishments:

• Systemlzed financial records keeping, resulting m more accurate yearly budgeting and a reduction in yearly operating

expenses.

• Systemized equipment inventory systems resulting m reduced shrinkage and reducing yearly equipment cost.

• Developed capacity for and secured government funding to increase number of projects in collaboration with senior staff.

• Developed efficient field staff structure resulting in reduction of payroll expense.

• Developed project management systems resulting in increased ability to better serve project sponsors.

• Managed 4 direct report employees responsible for 100 to 130 field staff members.

Department Manager, 08/2008 to 04/2010Fairhaven Bike & Ski -Bellingham, WA

Managed department sales floor associates, managed inventory levels and bought products in line with current trends as well as

within budget, increase department sales and margins.

Accomplishments:

• Developed open-to-buy system for product replenishment using a cost effective just-in-time inventory management

system to increase margins and cash flow.• Merchandized and marketed locally owned business to increase consumer awareness and increase sales.

EDUCATIONBachelor of Arts: Business, 2009

Western Washington University - Bellingham, WA

- Lobby and Check-in desk- kitchen- Common Area- Upgrade Laundr/ ffacilities

PROPOSAU

SD

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- Demolition | i I - Interior fit-oufs @ loun'ge

- Exterior waij demolition @ common room " Exterior concrete and oavers-I .- i !

- Exterior excavatioh i I - Soft Lan'dscaping

21 ; 22 ; 23 ; 24 ; 25 ; 26 ; 27 ; 28 ; 29 ; 30 ; 31 ; 32 ; 33 ' 34 ^ 35 ; 36 ; 37 ; 38 ; 39 ; 40Jan.2017 Feb.2017 March20i7 April2017 May20f7 June2017 Ju!/20t7 Aug.2017 Sepl.20t7 Oct. 2017 Nov. 2017 ' Dec. 2017 Jan. 2018 | Feb. 2018 ' March 20)8 ' April 2018 ' May 2018 ' June 2018 ' Ju!y2018 ' Aug. 2018

PR! R2017 FALL 2017

-PHASED)- Improve landscape arpund the lounge- Outdoor patios and walkways- Fireplace |- Outdoor furnishings

- Improve existing deck bround spa

PHASE IV- Exterior improvements on alt buildings- New sidirtg- Roof improvements | |- New exte'rior stair and railings

- Improve parking

SD $D

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- Exterior fit out- Install heaters and iights

- Soft Landscaping I

! CONSTRUCTION- Pre demo preparation - Siding

- Deqnoiitson i

- Paint

- Stairs and railin'gs

Ex+eripr imprpvemerfi+s complete^

^ OUTDOOR PATIO OPEN

PROPOSAL - IRON HORSE INN PROPERTY

333 LINCOLN AVENUE STEAMBOAT SPRINGS, CO 804871515

FOR THE CITY OF STEAMBOAT SPRINGS - REQUEST FOR PROPOSALDATE: JUNE 22, 2015

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June 17, 2015

"Proposal Iron Horse Inn Property Cover Sheet"

The following proposal was prepared by Jay Wetzler, President, Yampa River, Inc.

Contact Information:

Jay Wetzler

3155 South Lincoln Avenue


Tel: 970-846-9121

email: [email protected]

Page 1.

June 17, 2015

DearShellySt. Pierre,

With regard to the confidentiality of our proposal, it is our desire to keep our personal

information and information about our various enterprises confidential. We are a privately held

family business and we choose to keep our business affairs private. I provided you and your

staff with specific information/ businesses, names/ etc., for the purpose of evaluating our

experience to fulfill our proposal. I respectfully request that you consult with me prior to

making this public information.

Sincerely/

Jay Wetzler

President

Yampa River/ Inc.

"Proposal to Purchase and Operation Plan Details":

Our proposal is to purchase the Iron Horse Inn. Our offer is $1/100,000.00. Our plan is to operate the

Iron horse Inn as an affordable housing facility. It is our intent to utilize both buildings as long term

affordable housing. We believe that Steamboat will continue to experience a demand for affordable

housing, in particular, "essential services" employee housing, such as bus drivers/ police employees, fire

department staff, hospital staff, etc. We are prepared to offer these essential service employees and

resort employees an affordable option to make their long term or transitional cost reasonable and

consistent with what the city is currently offering. We will offer month to month rentals priced in the

$700.00 to $750.00 range for the motel/dorm units in Building A and for the efficiency units in Building

B. We are prepared to commit to giving the "essential services" employees priority placement; that is,

we will reserve a number of units for the City for a predetermined and mutually agreed upon time frame

to ensure that the "essential services" staff needs are met. And we are prepared to extend this offer for

a predetermined and mutually agreed upon term, perhaps two years. We are well aware of the various

proposals for affordable housing currently in the pipeline, which means there may be a time within the

next few years when new affordable housing units coming on the market may diminish the demand for

affordable housing at the Iron Horse. We propose that the City of Steamboat give us a two year deal in

which we agree to operate the Iron Horse Inn as an affordable housing facility. After that term/ or in the

event of a sale, we would be free to act in our best interest.

"Additional Operational Information":

Our plan is to hire a resident manager to operate the day to day operations of the facility, including

showings/ rentals and collection of monthly rents and to oversee the maintenance and capital

improvement requirements as they arise. Wewil! hire a maintenance staff and of course, we have

support staff at the Mountain Lodge and Steamboat Hote! who can assist with the Iron Horse

operations.

Page 3.

"Financial Terms and Conditions":

Our offer is a cash purchase, payable in full at the time our offer is approved or at the end of the 60 day

term commencing June 22, 2015.

"Proposer's Financial Capability to Purchase";

Our financial capability to purchase property will be achieved through cash reserves and individual cash

investments by the family members listed above. !n addition to the purchase price we will contribute

start-up capital of approximately $70/000 to $90,000.

"Corporate Entity at Time of Purchase":

It is our intention to form, at the appropriate time/ a new corporate entity with the above listed

members to complete the purchase if our proposal is approved.

"Time Frame for Purchase and Operations":

We are prepared to purchase based on the time frame as per the approval process of the terms of theRequest for Proposal. We wilt offer rental units to the market upon possession.

Page 4.

"Public Benefit":

We believe that our proposai will allow the Iron Horse Inn to continue to operate as an affordablehousing facility and it is our intent to expand this public benefit by opening up Building A. as affordablehousing year round. One other note: Affordable housing Is an issue for all of us, not just for governmentemployees or the large resort businesses. Small businesses such as ours experience problems attractingand retaining staff. It is a constant battle to attract and keep employees due to the cost of housing. Webelieve that operating both buildings as affordable year round housing will be a tremendous benefit tothe community and we believe we can successfully operate this facility for the long term as we've

proposed.

Jay Wetzler

Yampa River/ Inc.

Page 5.

Documents

Iron Horse Proposals