Lobby w/ Grand Ballroom and Rose Room

Spa Level (second floor)

Includes a Museum

dedicated to the rich

history of the Baker

Hotel and Mineral

Wells, Texas

Typical Guest Room Floor (floor 3 thru 9)

21 Guest Suites per floor

11th floor Baker Suite and Meeting Space

A fully restored

Baker Suite, two

additional suites and

significant meeting

space with spiral

staircase access to

the tenth floor below

and the Cloud Room

above

The Cloud Room and Roof Top Garden

The spectacular

Cloud Ballroom with

rooftop wine & beer

garden and a

warming kitchen to

serve up to 200

guests

Where are we today and where

is all the money coming from?

The Baker Hotel Capitalization

The Baker Hotel Capitalization

Let’s start by looking at the projected value

of the Baker Hotel post renovation….

The Baker Hotel Capitalization

$30 Million

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

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The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

Assumes a $175 per

room average rate

and a 68% occupancy

4 years after

completion

The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

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Based on the $30 million projected valuation let’s look at what an economically feasible cost

and capital structure would be if this were a traditional real estate development

The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$26.6 Million

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

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The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

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The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

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The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

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The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

Entrepreneurial Profit

$30 to $40 Million

Value

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The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

Entrepreneurial Profit

$30 to $40 Million

Value

“Traditional” Real Estate

Development Transaction

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But the renovation of the Baker Hotel is by no means a “Traditional” Real Estate Development

Transaction

Let’s look at the actual budget required to renovate a 90 year old 14-story hotel that has

been left abandoned for almost 50 years…

The Baker Hotel Capitalization

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

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ns

$2.2 Million

The Baker Hotel Capitalization

Building Purchase

Hard Costs

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

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ns

$33.6 Million

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

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$7.5 Million

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

lio

ns

$5.6 Million

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

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ns

$8.8 Million

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$30 to $40 Million

Value

Mil

lio

ns

$3.5 Million

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

Mil

lio

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The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost

$35 Million

“Economic Gap”

$30 to $40 Million

Value

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So this can be no “Traditional” Real Estate

Development Transaction…

The successful renovation of the Baker

Hotel - with a nearly $35 million Economic

Gap - requires a “public/private

partnership” at every level of

government…

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

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Let’s fill the Gap…

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

?

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$7.3 Million TIF

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$7.3 Million TIF

$4.0 Million 4B

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$7.3 Million TIF

$4.0 Million 4B

$10.3 Million

State HTC

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$7.3 Million TIF

$4.0 Million 4B

$10.3 Million

State HTC

$7.0 Million

Federal HTC

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$7.3 Million TIF

$4.0 Million 4B

$10.3 Million

State HTC

$7.0 Million

Federal HTC

$6.0 Million NMTC

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

Mil

lio

ns

The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$7.3 Million TIF

$4.0 Million 4B

$10.3 Million

State HTC

$7.0 Million

Federal HTC

$6.0 Million NMTC

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

$61.2 Million

Capital Stack

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The Baker Hotel Capitalization

Building Purchase

Hard Costs

FF&E

OS&E and Marketing

Soft Costs

Interest Reserve

$30 Million

Possibly up to $40

Million

$26.6 Million

$34.6 Million

in

Incentives Needed

$10.0 Million

Debt

$13.1 Million

Cash Equity

$3.5 Million Dev. Fees

$7.3 Million TIF

$4.0 Million 4B

$10.3 Million

State HTC

$7.0 Million

Federal HTC

$6.0 Million NMTC

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

Costs Value Feasible Costs Sources

$61.2 Million Cost $30 to $40 Million

Value

$61.2 Million

Capital Stack

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Questions?

Baker Hotel

video

presentation

Questions?