Agmt15 Keyser Marston Association, Inc.

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EXHIBIT "A" SCOPE OF SERVICES The project is summarized as a 181-room upscale, full senrice hotel in an 8-story building, with parking to be provided in an underground parking garage that cannects with the theater garage. Two aspects of Lowe's proposed business terms are particularly notable: first, Lowe proposes to make a deferred land payment to the city (up to eight years after land take-down) with the amount contingent upon the sale/refinance proceeds of the project; second, Lowe proposes that it be the responsibility of the city to fund the cost of constructing the garage and maintaining the garage in the long term. These are both fundamental aspects of the business terms and have important economic and policy implications. Consultant will review Lowe's development pro forma for the project as outlined in their March23rd letter. The purpose of ConsultanYs review is to assess for reasonableness the projections of development costs — hard construction costs, soft development costs, and financing costs, the private investment supported (also based on a review of the developer's projection of annual gross rental income and operating expenses for reasonableness), and the business proposal to the city. Based on current underwriting criteria and the project's income stream, Consultant will test the reasonableness of the developer's ability to have a financially feasibility project and the proposed land value supported. In addition, Consultant will provide a qualitative discussion of potential project altematives that the city may wish to consider with the intent of improving the overall development economics and putting the city in a better position to achieve the desired public benefits. If the city is ultimately interested in pursuing any project alternatives, analysis of the development economics of such alternatives would be undertaken under a new, to-be- prepared scope of work. In terms of ineetings, the budget for this assignment will accommodate up to five: (1) a kick off meeting with city staff and Lowe, (2) one work session with Lowe to discuss details of their pro forma, and (3) up to three optional meetings with city staff, the City Council, the Real Estate Subcommittee, or any other groups the city may identify, if it is determined by city staff that such meetings are needed. Budget, Deliverable, Schedule Consultant proposes to undertake this work scope on a time and materials basis with a not-to- exceed budget of $22,500 (a current billing rate schedule is attached). This budget includes the three optional meetings noted above at $1,000 per meeting. If the city elects to not pursue these optional meetings, Consultant will not bill against that portion of the budget. The following is the breakdown of the budget: Page 9 of 11 REV 07-13-15 VR ATTY/AGR.2015.142/Keyser Marston Associates/Winslow Lot Disposition and Development