IMC Proposal to CLV

IMC PROPOSAL FOR A PUBLIC/PRIVATE PARTNERSHIP FOR A DOWNTOWN LAS VEGAS EXPO CENTER International Market Center January 22, 2018

Our Goal is to create a Downtown Las Vegas Exposition Campus for all.

Contents .......................................

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1.0 Executive Summary

2.0 Project Overview

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3.0 Proposed Project

4.0 Project Finances

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5.0 Supplemental .......................................

Downtown Expostion Campus + World Market Center’s Permanent Showroom Facilities for the Home Furnishing Markets IMC CLV Contents

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EXECUTIVE SUMMARY 1.0

I N T E R N AT I O N A L MARKET CENTERS

Executive Summary

3

Overview of IMC Markets Overview of IMC 

Markets

World’s largest owner/operator of premier, permanent World’s largest owner/operator of premier, showroom space for the• furniture, home décor and gift permanent showroom space for the furniture, permanent  World’s largest owner/operator of premier, industries

Markets

home décor and giftfor industries. showroom space the furniture, home décor and gift



industries Owns and operates over 12.2 million square feet of world• Owns and operates over 12.2 million square feet class exhibition space in High Point, NC and Las Owns and operates overspace 12.2Vegas of world-class exhibition inmillion High square Point, feet of worldclass exhibition space in High Point, NC and Las Vegas serving the East and WestNC coast customers and Las Vegas serving East and West coast serving the East and West coast customers

− Each location hosts twocustomers. each year, − Markets Each location hosts two which Marketsare each year, which are • Each location hosts two Markets each year, which events Super Bowl-sized, must-attend industry events Super Bowl-sized, must-attend industry are Super Bowl-sized, must-attend industry − has Las Vegas Campus also has an center open-daily design center − Las Vegas Campus alsoevents. an open-daily design and hosts events throughout the year and hosts events throughout the year

• Las Vegas Campus also has an open-daily design center & hosts other events throughout the year.

IMC OVERVIEW

Las Vegas and High Point

Las Vegas and High Point Las Vegas Campus: 5.4mm SF (3 buildings)

High Point Transportation Hub

Las Vegas

Las Vegas Campus: 5.4mm SF (3 buildings)

Las Vegas

1.1

High Point Campus: 6.8mm SF (15 buildings)

High Point Campus: 6.8mm SF (15 buildings) High Point,

High Point, NC

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High Point Transportation Hub NC

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1

5

3

4

4

10 7

3

10 8 79

2

11 12

13

13

1/5/2018

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I N T E R N AT I O N A L MARKET CENTERS

1

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The Heart of the High Point Market

1. International Home Furnishings Center 2. Showplace 3. Plaza Suites 4. Furniture Plaza 5. National Furniture Mart 6. Commerce & Design 7. Historic Market Square

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8. Market Square Suites 9. Market Square Tower 10. South Main 11. Hamilton Market 12. Hamilton 200 13. Hamilton 320 14. Hamilton 330

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The Heart of the High Point Market

1. International Home Furnishings Center 8. Market Square Suites 2. Showplace 9. Market Square Tower 3. Plaza Suites 10. South Main Executive Summary 4 4. Furniture Plaza 11. Hamilton Market 5. National Furniture Mart 12. Hamilton 200 6. Commerce & Design 13. Hamilton 320 7. Historic Market Square 14. Hamilton 330

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IMC Hosts Two Markets Per Year Our Markets and Properties at each of the High Point, North Carolina and Las Vegas Campuses 

IMC hosts two Markets per year at each of the High Point, NC and Las Vegas Campuses

High Point, NC

Las Vegas

15 Buildings

3 Buildings / 3 Pavilions / Garage

Gross / Rentable Square Feet (mm)

6.7 / 5.4

5.4 / 4.8

# of Perm. Tenants

514

626

April & October

January & July/August

# of Attendees

75,000

45,000

# of Buyers

23,000

23,000

Public Funding

$6.5MM

$0

Industry Focus

Furniture & Home Décor

Furniture, Home Décor & Gifts

# of Buildings

OUR MARKETS & PROPERTIES 1.2

I N T E R N AT I O N A L MARKET CENTERS

Event Dates

Selected Properties

1/5/2018

Executive Summary

3

5

Temporary Exhibitors @ Market

OUR MARKETS & PROPERTIES 1.3

I N T E R N AT I O N A L MARKET CENTERS

• Today, IMC utilizes our Pavilions to host our temporary exhibitors.

• These temporary exhibitors are considered the “what’s new” in the industry and are a major draw to the Market.

• Temporaries include new companies (who one day will grow into large, established brands), companies selling one of a kind items (big draw for Market), and companies testing Market to see if it is a good fit for their business (often converting to permanent showrooms).

• You simply cannot have a “Market” without a strong & robust temporary exhibitor destination.

Executive Summary

6

PROJECT OVERVIEW 2.0

I N T E R N AT I O N A L MARKET CENTERS

Project Overview

7

IMC operates three Pavilions for Tradeshows & Special Events. These Tradeshows are profitable & CRITICAL to the success of IMC because they drive attendance & function as an incubator for future long term tenants.

The permits to operate the Pavilions expire in 2019. IMC has applied for a 3 year extension and a waiver of all milestones.

We propose to construct a 384,310 square foot Exposition Center for yearround use on our existing parcel of land contiguous with our campus that would benefit both IMC and the City of Las Vegas.

PROJECT OVERVIEW 2.1

The City would benefit from having a large modern exposition center in the downtown area driving revenue increases in lodging, gaming and entertainment.

After the proposed EXPO Center is built, the Land where our existing Pavilions are located will be converted to parking or other alternative use compatible with the plans for Symphony Park.

The design is consistent with the existing architecture on the IMC campus.

I N T E R N AT I O N A L MARKET CENTERS

Project Overview

8

Proposed Project Program Exposition Space Meeting Rooms Office Space

PROJECT SUMMARY 2.2

273,752 sf 24,315 sf 5,449 sf

Pre-Function, Registration, 80,794 sf Concessions, Restrooms Total Gross Area

384,310 sf

Meeting Room space is flexible and reconfigurable and can handle small or large venues. This includes 10,142 square feet on the 16th floor of B Building overlooking downtown Las Vegas.

I N T E R N AT I O N A L MARKET CENTERS

Project Overview

9

Existing Downtown Conference Space

CURRENT STATISTICS 2.3

• Golden Nugget

31,000 sf

• Plaza Hotel & Casino

23,000 sf

• Stratosphere Casino and Hotel

17,000 sf

• The D Las Vegas

11,000 sf

• Fremont Hotel and Casino

7,330 sf

• California Hotel and Casino

4,935 sf

• Main Street Station Casino, Brewery & Hotel

4,500 sf

• El Cortez Hotel and Casino

3,200 sf

• Downtown Grand Las Vegas

2,490 sf

• Four Queens Hotel and Casino

2,264 sf

• Total Downtown Conference Area

106,719 sf

Sources: Las Vegas Convention & Visitors Authority; Applied Analysis.

I N T E R N AT I O N A L MARKET CENTERS

Project Overview

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PROPOSED PROJECT 3.0

I N T E R N AT I O N A L MARKET CENTERS

Proposed Project

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Overall Site Plan of the World Market Center Exposition Center

Existing World Market Center Buildings

C.

B.

SITE PLAN 3.1

I N T E R N AT I O N A L MARKET CENTERS

Proposed Exposition Center

A. The Exposition Center will be located in front of and on the ground floor of the existing garage

Current location of the existing Pavilions to be converted to surface parking after construction of the Exposition Center

Proposed Project

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Proposed Exposition Center A

B

C

A

D

B

EC

D

F

E

F

PHASE 1

G

G

LEGEND

A

EXISTING BUILDING A

B

EXISTING BUILDING B

C

EXISTING BUILDING C

D

PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)

E

REGISTRATION

F

BUS AND VALET DROP-OFF

G

EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)

ny

Pa

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PROJECT IMAGES

CONCEPT IMAGE

Grand J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170

I N T E R N AT I O N A L MARKET CENTERS

E X P O S I TI O N C E N TE R

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I NT E R NAT I O NAL M AR K E T C E NT E R S L AS V E G AS , NE V AD A

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Proposed Project

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Proposed Exposition Center w/future showroom expansion A

B

C

DA

B

EC

D

F

E

F

PHASE 1

G

G

LEGEND

A

EXISTING BUILDING A

B

EXISTING BUILDING B

C

EXISTING BUILDING C

D

PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)

E

REGISTRATION

F

BUS AND VALET DROP-OFF

G

EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)

ny

Pa

rk

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PROJECT IMAGES

CONCEPT IMAGE

Grand J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170

I N T E R N AT I O N A L MARKET CENTERS

E X P O S I TI O N C E N TE R

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I NT E R NAT I O NAL M AR K E T C E NT E R S L AS V E G AS , NE V AD A

2

Proposed Project

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Proposed Exposition Center A

B

A

CB

D

C D

E

E

FF

PHASE 1

G

CONCEPT IMAGE LEGEND

A

EXISTING BUILDING A

B

EXISTING BUILDING B

C

EXISTING BUILDING C

D

PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)

E

REGISTRATION

F

BUS AND VALET DROP-OFF

G

EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)

PROJECT IMAGES 3.4 J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170

I N T E R N AT I O N A L MARKET CENTERS

E X P O S I TI O N C E N TE R

I NT E R NAT I O NAL M AR K E T C E NT E R S L AS V E G AS , NE V AD A

2

Proposed Project

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Proposed Exposition Center w/future showroom expansion A

B

A

CB

D

C D

E

E

FF

PHASE 1

G

CONCEPT IMAGE LEGEND

A

EXISTING BUILDING A

B

EXISTING BUILDING B

C

EXISTING BUILDING C

D

PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)

E

REGISTRATION

F

BUS AND VALET DROP-OFF

G

EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)

PROJECT IMAGES 3.5 J A N UA R Y 0 8 , 2 0 1 8 PROJECT # 2017170

I N T E R N AT I O N A L MARKET CENTERS

E X P O S I TI O N C E N TE R

I NT E R NAT I O NAL M AR K E T C E NT E R S L AS V E G AS , NE V AD A

2

Proposed Project

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Proposed Exposition Center w/future showroom expansion

I N T E R N AT I O N A L MARKET CENTERS

Proposed Project

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Proposed Exposition Center w/signage A

B

C D

E

F

PHASE 1

G

CONCEPT IMAGE LEGEND

A

EXISTING BUILDING A

B

EXISTING BUILDING B

C

EXISTING BUILDING C

D

PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)

E

REGISTRATION

F

BUS AND VALET DROP-OFF

G

EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)

ive

PROJECT IMAGES

JANUAR Y 08, 2018 I N T E R N AT I O N A L MARKET CENTERS

PROJECT # 2017170

EXPOSITION CENTER

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INTERNATIONAL MARKET CENTERS LAS VEGAS, NEVADA

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Proposed Project

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Proposed Exposition Center w/signage C

D

E

G

PHASE 1

F

CONCEPT IMAGE LEGEND

A

EXISTING BUILDING A

B

EXISTING BUILDING B

C

EXISTING BUILDING C

D

PREFUNCTION / MEETING SPACE (ACCESS TO LEVEL 1 EXPO AND LEVEL 2 MEZZANINE)

E

REGISTRATION

F

BUS AND VALET DROP-OFF

G

EXISTING GARAGE (146,500 GSF OF LEVEL ONE TO BE CONVERTED TO EXPO AND SUPPORT SPACES)

PROJECT IMAGES 3.7

rkway

tral Pa Grand Cen

JANUAR Y 08, 2018 I N T E R N AT I O N A L MARKET CENTERS

PROJECT # 2017170

EXPOSITION CENTER

INTERNATIONAL MARKET CENTERS LAS VEGAS, NEVADA

5

Proposed Project

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Level ONE

Existing World Market Center Building

Converted Grade Level of Garage

C

Proposed Exposition Center

FLOOR PLAN 3.8.1

Column Free Area

Registration

Courtyard Entrance

C I N T E R N AT I O N A L MARKET CENTERS

Proposed Project

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Level TWO

Existing World Market Center Building

C

FLOOR PLAN

Proposed Exposition Center

3.8.2

I N T E R N AT I O N A L MARKET CENTERS

Proposed Project

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Entitlements Prepare Drawings 30 Days $25K

CLV Planning & Approval 90 Days RFP & Selection of Contractors 4 weeks

Contract Documents

PROJECT TIMELINE 3.9

Construction

Architecture and Engineering Documentation 12 to 15 months

CLV Building Dept.

Review | 90 Days

$2.2 MM (CD’s Only)

$850K

Preparation for Construction is expected to take 14-17 months at a cost of approximately $3.1 MM

On-Site & Off Site Improvements | Vertical Construction Approximately 18 months Total time projected to be 30 - 35 Months

I N T E R N AT I O N A L MARKET CENTERS

Proposed Project

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PROJECT FINANCES 4 .0

I N T E R N AT I O N A L MARKET CENTERS

Project Finances

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Estimated Costs SOFT COSTS

• Architectural & Engineering Fees • Agency Fees • Sub Total

$3,700,000 $2,100,000 $5,800,000

HARD COSTS

PROJECT COSTS

• • • • •

Pavilion Demolition On & Off Site Improvements Conversion of Garage to Expo Support New Expo Facility Construction Sub Total

146,536 SF 237,774 SF 384,310 SF

$775,000 $6,500,000 $9,200,000 $53,500,000 $69,975,000

LAND COSTS

4.1

• 8.7 Acres @ $2MM/Acre

• Grand Total

I N T E R N AT I O N A L MARKET CENTERS

$17,400,000

$242.45/SF

$93,175,000

Project Finances

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EXPO Revenue Projections & Comps

Revenue/SF/Day

$0.33

(a)

Projected Annual Revenue/SF

$18.00

(b)

PROJECT REVENUE (a) $0.33 is average revenue psf on show days among major venues nationally. (see appendix)

4.2

I N T E R N AT I O N A L MARKET CENTERS

(b) The Las Vegas Convention Center generated $21.52 psf and the Cashman Center generated $15.92 psf in calendar year 2016.

Project Finances

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SUMMARY Without Public Funds the return on this project is -7.3% due to the low profitability of Convention Center revenue.

SUMMARY CONCLUSION 4.2

I N T E R N AT I O N A L MARKET CENTERS

Our desired minimum IRR on a project like this is 15% and a cash yield of 10%.

IMC will need Public Funds of $30 million to achieve a -1.4% IRR and a cash yield of less than 5%.

Without Land, IMC will need Public Funds of $30 million to achieve a 3.9% IRR. Project Finances

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Economics & Returns Economics and Returns Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

10.00 95% 83,364 834

12.00 95% 83,364 1,000

12.48 95% 83,364 1,040

12.98 95% 83,364 1,082

13.50 95% 83,364 1,125

14.04 95% 83,364 1,170

14.60 95% 83,364 1,217

15.00 40% 109,501 1,643

16.50 55% 150,564 2,484

18.00 70% 191,626 3,449

18.18 85% 232,689 4,230

18.36 90% 246,377 4,524

18.55 90% 246,377 4,569

18.73 90% 246,377 4,615

9.62 1,053

9.86 1,485

10.11 1,937

10.36 2,411

10.62 2,616

10.88 2,682

11.16 2,749

2,476 1,053 1,423 57.5%

3,485 1,485 2,000 57.4%

4,490 1,937 2,553 56.9%

5,312 2,411 2,902 54.6%

5,649 2,616 3,033 53.7%

5,739 2,682 3,058 53.3%

5,832 2,749 3,083 52.9%

-

-

-

39,878

Tradeshow A Assumptions Revenue psf Occupancy Occupied sf Revenue Expo Assumptions Revenue psf Occupancy Occupied sf Revenue Cost Assumptions Cost psf Tradeshow

PROJECT REVENUE

Cost psf Convention Cost Total Earnings Revenue Cost EBITDA Margin Cash Flow Construction Cost

4.2

Public Funds

(93,175) 30,000

Sale (7.5% Cap Rate, Net of Tx Cost (3.0%)

Net Cash Flow

(63,175)

Yield on Cost Unlevered IRR

I N T E R N AT I O N A L MARKET CENTERS

1,423

2,000

2,553

2,902

3,033

3,058

42,961

2.3%

3.2%

4.0%

4.6%

4.8%

4.8%

4.9%

-1.4%

1/7/2018

1 Project Finances

27

IMC

SUPPLEMENTAL 5.0

I N T E R N AT I O N A L MARKET CENTERS

Supplemental

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Additional Amenities on the IMC Campus 90K SF Courtyard for Outdoor Events

IMC AMENITIES

Multiple Atriums

5.1 Atriums can be used for receptions & events

I N T E R N AT I O N A L MARKET CENTERS

Banquet Facilities

WORLDVIEW - 10,000 SF of Meeting Space overlooking Downtown

Outdoor Events

Additional outdoor event space on top of B Building

Supplemental

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Publicly‐Owned Product Positioning Publicly-Owned Product Positioning SUMMARY CONSIDERATIONS

Summary Considerations Overall, it appears that Las Vegasthat venues (the Overall, it appears Las Vegas basis from whichvenues revenue at the (theprojections basis from which subject propertyrevenue are derived) are generally in projections at the subject line with the broader convention market.

The property are derived) are generally venues identifiedinatline thewith right basedconvention on theare broader surveyed resultsmarket. and reflect published (non- at The venues identified discounted) pricing on show days (as of June the right are based on surveyed 14, 2016), whichresults is different than published effective and reflect rental rates over(nondiscounted) the course of apricing year. Pricing on showis based on net square feetofrents. days (as June 14, 2016), which is different than effective rental Average Among Venues rates overMajor the course of a year. $0.33 PSF on Show Days Pricing is based on net square feet rents.

PRODUCT POSITIONING 5.2

Sources: Applied Analysis; Southern Nevada Tourism Infrastructure Committee; Las Vegas Convention & Visitors Authority.

Notes: (a) For many convention centers, actual contracted rates may differ from the published, non-discounted rates listed above; (b) Many convention facilities, particularly those within privately‐run resorts with other available revenue centers, may offer discounted or free rental space depending on other revenues from lodging, catering, etc., that may be contracted with convention clients.

Average among Major Venues

$0.33 PSF on Show Days

1/5/2018

I N T E R N AT I O N A L MARKET CENTERS

CITY

FACILITY

REVENUE/SHOW DAY

City

Facility Name

Revenue/Show Day

New Orleans, LA Houston, TX

Ernest Morial Convention Center George R. Brown Convention Center

$0.55 $0.50

San Francisco, CA

Moscone Convention Center

$0.44

San Diego, CA

San Diego Convention Center

$0.42

Anaheim, CA

Anaheim Convention Center

$0.38

Indianapolis, IN

Indiana Convention Center

$0.37

Orlando, FL

Orange County Convention Center

$0.37

Las Vegas, NV

Sands Expo & Convention Center (private facility)

$0.36

Las Vegas, NV

Las Vegas Convention Center (increased rate as of 7/1/18)

$0.35

Las Vegas, NV

Mandalay Bay Convention Center (private facility)

$0.35

Las Vegas, NV

World Market Las Vegas Exposition Center

$0.33

Atlanta, GA

Georgia World Congress Center

$0.33

Las Vegas, NV

Las Vegas Convention Center (increased rate as of 7/1/16)

$0.33

Los Angeles, CA

Los Angeles Convention Center

$0.32

Las Vegas, NV

Las Vegas Convention Center (current thru 7/1/16)

$0.29

Louisville, KY Salt Lake City, UT

Kentucky Expo Center Salt Palace Convention Center

$0.29 $0.29

Philadelphia, PA

Pennsylvania Convention Center

$0.20

Denver, CO

Colorado Convention Center

$0.19

Chicago, IL

McCormick Place

$0.18

Dallas, TX

Dallas Convention Center (Kay Bailey Hutchinson Conv Ctr)

$0.17

Sources: Applied Analysis; Southern Nevada Tourism Infrastructure Committee; Las Vegas Convention & Visitors Authority. Notes: (a) For many convention centers, actual contracted rates may differ from the published, non-discounted rates listed above; (b) Many convention facilities, particularly those within privately‐run resorts with other available revenue centers, may offer discounted or free rental space depending on other revenues from lodging, catering, etc., that may be 21 contracted with convention clients.

Supplemental

30

Downtown Expostion Campus + World Downtown Expostion Campus + Worl Market Center’s Permanent Showroom Market Center’s Permanent Showroom Facilities for the Home Furnishing Markets Facilities for the Home Furnishing Market I N T E R N AT I O N A L MARKET CENTERS