BIG LAGOON Executive Summary

Big Lagoon R a n c h e r i a

E x e c u t i v e S u m m a ry T R I N I DA D, C A L I F O R N I A

July 2016

Big Lagoon R a n c h e r i a

Contents

CONTENTS 01

Letter from the Chairman

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Project Introduction

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Design Approach

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Legal - Marketing and Feasibility

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Proposal and Conlusion

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Cover Letter

LETTER FROM THE CHAIRMAN July 11, 2016 Mr. Rodney Butler Chairperson Mashantucket Pequot Tribal Nation P.O. Box 3060 Mashantucket, CT 06338-3777 Dear Chairman Butler, As promised, I am forwarding you an executive summary of our casino/resort project. The purpose of this document is to present a framework that attempts to establish a working partnership between our two tribes. The content of this proposal is to present a broad overview that both identifies a clear path for implementing our program and provides some context and background of how we got to where we are today.

We would be honored to have your tribe and business organization as our partners. I hope the following will also lead you to the conclusion that Big Lagoon Casino and and Resort will be a very special place which has the real potential to be a nationally renowned destination resort. Having the Pequot Tribe and the Foxwood organization as partners only enhances that goal.

There are many details yet to be worked out and I hope this document provides a reasonable first step in terms of helping you understand what we are attempting to accomplish. I would very much appreciate the opportunity continue our conversation and address any issues or questions you may have. Thank you for your time and interest.

Sincerely,

Virgil Moorehead Big Lagoon Rancheria Tribal Chairman

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Project Introduction

PROJECT INTRODUCTION The purpose of this paper is to present to the Pequot Tribe and Foxwood Casino business enterprises, a proposal to form a business partnership with the Big Lagoon Rancheria to develop and operate a Casino and Resort in northern Humboldt County in California.

THE MARKET OPPORTUNITY The site for development is located on the Big Lagoon Rancheria, located just off Highway 101 in Humboldt County, California and has approximately 20 acres along the Pacific coastline and overlooking Big Lagoon. It is one of the most scenic sites for Tribal gaming anywhere in the country.

The marketing concept is to create an Indian Gaming Hotel (120 rooms) and Casino as part of a semi-luxury resort. The facility would be designed to accommodate corporate retreats, family events like weddings and reunions and business and educational seminars in addition to the local gaming market.

According to the recent feasibility study completed by the Innovations Group, the market is dominated by hotel facilities with very limited services. The study points out that only two hotels in the study profile would be considered nicer than a Holiday Inn Express/Comfort Inn and only one hotel would be considered upscale. They conclude that this end of the market is under served and represents a good market opportunity.

While gaming activity from the local market represents 75% of Casino revenue a much greater potential exists if the development can attract business outside of the local market. These potential areas would include the San Francisco Bay area and Silicon Valley and the Pacific Northwest, where many headquarter tech companies reside. The site is located a short/scenic drive from the areas regional airport which has jet service to San Francisco and Portland.

What is also appealing about The Big Lagoon location is its proximity to many of primary tourist attractions in the area such as Redwood National Park and the many redwood forests in Humboldt and Del Norte counties. There is also the Pacific Coast, which offers a variety of recreational activities and outdoor sports that include fishing opportunities, duck hunting, hiking, camping, swimming, surfing, boating and kayaking.

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In addition, a key attraction to this area is the amount of eco-tourist friendly activities.

For example, Humboldt Bay is home to the third largest colony of harbor seals and houses the third largest amount of variety of shore birds. These unique amenities, along with the rugged northern California Pacific Ocean coastline attract a wide range eco-tourists and ornithologists who are typically higher income and very mobile.

Given northern California’s cool climate and rich soil this area excellent for cultivating produce, specifically wine grapes, and is therefore home to over twenty different wineries in Humboldt County. The majority of wineries are situated along the Highway 101 corridor. These wineries, which many are eco-friendly, draw a significant amount of visitors to the area.

The Big Lagoon Rancheria resort would offer a product that does not exist anywhere in Northern California or anywhere else in the country. This Casino/Resort will be in a class of its own and would truly create a very unique investment opportunity.

HISTORY The Big Lagoon Rancheria has been attempting to develop a Casino on trust land, just north of Trinidad for nearly 30 years. The Rancheria has been involved in several development initiatives since the early 1990’s all being thwarted by shifting institutional frameworks and California politics.

The underlying cause of most of these roadblocks was a jurisdictional dispute with the State of California through its California Coastal Commission and the rights of Native Americans to develop their Trust lands.

To summarize the dispute, the tribe applied to the State of California for a compact to develop a Casino on their property as prescribed the National Indian Gaming Regulatory Act. At the behest of the Coastal Commission, the State proposed to require many environmental protection requirements, which went well beyond the scope of the intended regulatory provision of the Act and severely impacted their ability to conduct a successful business operation. Extensive negotiation brought no resolution to the impasse and after a failed attempted to allow the tribe to participate in gaming at an off-site location, they were left with no alternative except to file suit against the State for negotiating in bad faith.

After years of litigation, the Ninth Circuit Court finally resolved the dispute, siding with the tribe. The Courts ruling allowed them to apply for a compact to be issued by the Department of Interior with no oversight or involvement by the State of California. The Bureau of Indian Affairs (BIA) is now in the final stages of completing Big Lagoon’s compact which will be under Federal jurisdiction and should allow them to commence development within the next several months.

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Project Introduction

PROJECT BACKGROUND The Big Lagoon Rancheria is a small group of Yurok Native Americans comprised of thirty two

members from one family. Some members live on the reservation lands but most are off site and live in and around Arcata California. The leadership of the tribe has been very stable under the capable guidance of Virgil Moorhead who has been Chairman for over thirty years. A national leader in Indian Affairs, he has overseen and managed the legal process that brings them to their present situation. Sadly the patriarch of the family, Ted Moorehead, passed away within the last month. His steady presence and historical insights will certainly be missed.

The Tribe has been quite successful in developing its membership. Most of the adult members are both employed and well educated with several having advanced college degrees. Their business ventures have been equally successful, owning a profitable historic hotel in downtown Arcata. They also are in the process of developing a $3 million health club and spa in addition to holding several investment properties in the region.

DEVELOPMENT CONCEPT Humboldt County is home to several Native American trial communities, many of them operating Casinos in the market. Most of these are relatively small operations, and are generally considered to be very adequate but not premier facilities. The development concept at Big Lagoon is to take advantage of this very unique and highly aesthetic location by creating a resort that will become a destination for not only gamers but the broader business and tourist market.

As mentioned, this property is within the California coastal zone. The Coastal Commission has very stringent guidelines regarding development in this zone and most certainly would never allow a project as envisioned by Big Lagoon. But as the Courts have finally resolved, the commission does not have jurisdiction over trust land and have no legal basis for preventing the project from moving forward. The net result of these circumstances is that, this is almost certainly the only project of this type ever to be developed along the entire Pacific coast of California.

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To take advantage of this unique opportunity, the development concept envisions a more exclusive

concept which likely would include premium hotel rooms, an upscale restaurant, conference center, meeting rooms, an entertainment center and wedding chapel. While these are not typical amenities offered at most smaller casino projects, they are a particularly good fit because of the unique location and physical amenities offered by the site.

The project feasibility has been evaluated several times over the years and the general conclusion is the market can support a small to medium sized project. Because of the site location, hotel rooms and other amenities are considered cost effective and tend to create a broader market potential by appealing to non-traditional business segments. While the primary market area of the site is relatively low density, it is served by scheduled airline service from both San Francisco and Portland. This is an important factor in attracting corporate retreats, as well as family reunions, weddings and eco-tourism.

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Design Approach

DESIGN APPROACH Due to the myriad of issues yet to be resolved prior to embarking on a capital program it will be necessary to evaluate and refine a number of issues that will help define the Big Lagoon Resort project development program. While some of these initiatives would be categorized as ongoing and administrative in function, other components are original research that will needed before one can quantify the financial scope of the project. While many of these research functions have been studied in the past, it is still necessary to update the underlying assumptions and factor in current costs.

The information developed during this feasibility phase is also envisioned to provide a financial framework for evaluating the project as an investment opportunity. It should also help to provide some level of comfort that it can be accomplished for the cost prescribed. The work Items to be accomplished fall within the broad general categories of; site master plan and schematic design of capital facilities; design of infrastructure; legal cost of compact execution; preliminary marketing plan and development of a marketing proposal.

Design Approach One of the most critical factors driving the feasibility of this project is the architectural design program. What makes this project unique is its setting and the views of Big Lagoon and the Pacific Ocean. The fact that this is likely to be the only resort project of the type and that can be built in California and its relatively compact site, the Master Plan of the site becomes a very critical program component. A destination resort must have all its various facilities working in harmony if it is to appeal to the destination resort market. Additionally, there are adjacent properties that could potentially be incorporated into the mix and should be considered for utilization in all phases of the development.

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The Tribe has been working with an architectural team comprised of Fentress Architects of Denver, an internationally renowned firm which has designed many award winning airports and public facilities throughout the world and EV&A Architects of Las Vegas who has designed and developed many casino and hotel projects throughout the country specializing in the gaming and hospitality markets. The combination of these two firms promises a design program that is both functionally practical and architecturally unique.

Chairman Moorehead with Architect Curt Fentress, FAIA

Architect Edward Vance, FAIA

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Design Approach

CONCEPTUAL DESIGN 12

Big Lagoon Hotel & Casino

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Legend:

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1. Entry/Gallery 2. Hotel over Meeting Rooms 3. Convention Space 4. Casino 5. Service Entrance 6. Beach Entrance 7. Parking 8. Wedding Pavilion 9. Ceremonial Site 10. Beach Deck 11. Dock/Marina 12. Existing Tribal Housing

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Conceptual Site Plan

Big Lagoon Rancheria|Humboldt County | CA

March 14, 2016 Virgil Moorhead Tribal Chairperson Big Lagoon Rancheria Trinidad, California Re:

Proposal for Professional Architectural Design Services Project No. 2015900.124

Dear Virgil,

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On behalf of Fentress Architects & EV&A Architects, we are pleased to submit our profes design services proposal for your destination Hotel & Casino project. The site for develop located on the Big Lagoon Rancheria located just off Highway 101 at the Big Lagoon St exit, in Humboldt County.

The Big Lagoon Rancheria is approximately 20 miles north of Arcata, 27 miles north of Eu 45 miles south of Crescent City. The Rancheria’s trust acreage is approximately 20 acres those acres are expected to be used for the proposed casino and hotel. The Tribe has a

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Aerial view from the Bay.

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Conceptual Site Plan

1. Entry/Gallery 2. Hotel over Meeting Rooms 3. Convention Space 4. Casino 5. Service Entrance 6. Beach Entrance 7. Parking 8. Wedding Pavilion 9. Ceremonial Site 10. Beach Deck 11. Dock/Marina 12. Existing Tribal Housing

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Conceptual Site Plan

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Conceptual Site Plan 03

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Conceptual Floor Plan

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Entry/Gallery Hotel Lobby Convention Space Meeting Rooms Casino Cage

7. Restaurant 8. Kitchen 9. Lounge 10. Retail 11. Service Dock 12. BOH

Conceptual Floor Plan

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Conceptual Hotel Floor Plan

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Bathroom Sleeping Area Patio Corridor Stairs Houskeeping

Conceptual Hotel Floor Plan

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Conceptual Hotel Floor Plan 03

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Legal | Marketing and Feasibility

LEGAL MARKETING & FEASIBILITY A s previously outlined, the Big Lagoon Rancheria has been forced to defend its sovereign rights through the Federal Court against the State of California for the last 10-15 years. This David vs Goliath battle has required the Tribe to expend hundreds of thousands of dollar against a protagonist who could overwhelmingly outspend them. But justice has prevailed and now the final stage of this epic confrontation is the execution of a Compact document which incorporates the findings of the Courts and protects the Tribe from any future litigation from the State. This should be complete in the next several months and all that will remain is to pay the lawyers who are performing the final stages of this task.

Marketing and Feasibility The tribe has recently commissioned a feasibility analysis conducted by The Innovation Group.

Completed last Fall, this study has been made available to Foxwood Management group for their review. The report focusses on the economic potential of a casino and hotel in the northern California primary market. Since completion of this study, there has been a shift in emphasis in the marketing potential to how this project would perform as a destination resort targeting business meetings and retreats and large scale family events like weddings and reunions. Research for this component is contemplated to be largely in addition to the core analysis of economic potential already completed.

Infrastructure Capacity Analysis Update During the construction phase partially completed during the mid 90s, extensive analysis was completed evaluating the demand for elements such as electric power availability, sewage treatment, water storage, surface drainage and retention, highway access and other environmental issues related to the development of this site. Since these plans and studies were completed

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over twenty years ago and the building program has changed considerably, it is necessary that all these issues be readdressed to reflect the changed conditions and current building program.

The research will not include detailed construction designs or documents but rather focus on the feasibility aspects and any capacity issues. Findings will be incorporated into the architectural design of the facilities as well as site layout components.

EB5 Finance Options There have been many different scenarios used over the years to finance and develop an Indian Casino. As the marketplace has evolved, so too have the institutional players who are more aggressively pursuing financial partnerships with Tribes. A relatively new approach is the EB5 investment vehicle in conjunction with the US Citizenship and Immigration Services (under the US Department of Homeland Security) which allows foreign investment in domestic job creation providing visas for foreign nationals. While there is no guarantee, this could be a source of funding for a share of the project. It is felt that some exploratory research is justified to evaluate the feasibility of this option.

Conceptual Site/Floor Plan

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Project Proposal & Conclusion

PROJECT PROPOSAL Fees and Administration To put this program into a cohesive package it is anticipated that some consulting services and commissions will need to be expensed. In addition the Tribal leadership will likely be required to participate in several out of state locales to meet with potential project partners. It is also anticipated the tribe will be required to spend time in Washington DC to work with government officials to finalize the compact.

BUDGET Architectural Legal Marketing and Feasibility Infrastructure and Capacity Analysis Update Administration and Fees

$ 75,000 $ 60,000 $ 10,000 $ 10,000 $ 35,000

TOTAL

$ 190,000

PROPOSAL As was previously discussed during your conversation with Big Lagoon Chairman Moorehead the next step in the process is to create a partnership with experienced entities such as yours that have the capacity to turn these visions into a reality. Once the work program is completed, the foundation for structuring a financial relationship should be in place that identifies the vision, timeframe and expectation of return on investment.

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The Big Lagoon tribe is proposing that the Pequot Tribe fund the design and feasibility phase

as described above and in return receive an exclusive rights to its development for six months following the completion of the program and 6 months first right of refusal thereafter to match other potential financing relationships. These terms are general guidelines and are certainly subject to further refinement and negotiation.

CONCLUSION We feel we have an opportunity to develop a property that Foxwoods would be proud to be part of and looking for your Team to take a leadership role in this development. As we have previously discussed, before the Big Lagoon Development project could be truly evaluated for its investment potential, many key components and issues needed to be both refined and examined in more depth. While the program described in this proposal will certainly not resolve every unknown, it will hopefully bring us much closer to this result. While this outline represents our best effort to address the steps needed to define the program we would certainly appreciate additional input and feedback.

It is our hope that once a program is agreed upon, we could formalize it with a binding agreement with mutually acceptable terms in return for participation in funding of this program. As we keep moving forward, it is exciting to realize that this project is getting very close to becoming to becoming a reality and we look forward to the opportunity to do it in conjunction with your organization. Thank you for allowing us to present this to you and I hope to hear from you soon.

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Big Lagoon R a n c h e r i a

July 2016