ICONA WIldwood Beachfront Parking Lot Hotel

Response Request For Qualifications Wildwood Beachfront Parking Lot Hotel

Table of Contents

Executive Summary

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Section A: Development Team

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Section B: Qualifications and Experience

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Section C: Development Approach

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Section D: Financial Feasibility

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Section E: Financial Capacity

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E x ec u t i v e S u m m a r y As a qualified developer, Icona is pleased to submit our proposal to the city of Wildwood for the development of a Wildwood beachfront hotel on the beachfront parking lots.

As a local company with regional and national reach, Icona, it’s hotel portfolio, and management company is uniquely qualified to add real value to this project.

Icona understands and aligns with the city of Wildwood’s goals and objectives for a beachfront hotel, as presented in the Request for Qualifications and Proposals dated January 2019. Owing to our significant experience as a hotel management and hospitality company, we are uniquely positioned to understand and embrace the vision for the beachfront hotel and the benefits it will provide for the Wildwood community as a whole.

Our in-house resources and business partnerships will allow us to develop a signature hotel project that will resonate with the community and Wildwood visitors now and into the future, which will stretch well into the shared future of the entire region. We envision a beachfront hotel that serves not just as a centerpiece to Wildwood, but one that actively stimulates the city’s businesses and encourages and fosters economic growth throughout the area. To us, a beachfront hotel fuses a full-service hotel experience with retail and restaurant boardwalk frontage, exciting and enticing board-walkers to come inside the hotel. In our vision, the beachfront hotel provides both local residents out-of-town guests an upscale opportunity to experience the unique character of Wildwood.

As a developer, operator, and owner, Icona brings tremendous industry experience to this development initiative. Icona’s extensive background in developing and operating hotels includes the development and opening of three hotels in the last four years in Cape May County. These Icona-branded hotels have set new standards for their levels of service and attention to our guests. Our management experience supports the city of Wildwood’s goal of ensuring that the beachfront hotel is successfully managed for long-term financial success. In terms of financial capability, Icona possesses a strong balance sheet that ensures our ability to effectively develop and operate the hotel.

We see this as an exciting opportunity to be involved in the future of Wildwood. Icona is pleased to be considered as a qualified developer and hotel operator with the city of Wildwood.

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Section A: Development Team For each member of the Respondent, identify the following:

• Development Teams should provide an overview of each team member, describing general experience with details on years of operation, number of projects, range of project sizes and budgets, awards, prizes, citations, etc.

• Name, address, telephone number, fax number and e-mail address of each principal, and such team member’s resume, role or title within the Development Team. Identify which team member will serve as the lead development partner and project manager/primary point of contact.

• Name, address, telephone number, fax number and e-mail address of the Development Team members authorized to act on behalf of the Respondent.

• Identification of any affiliation or other relationship between any members of the Respondent and any development company, parent company or subsidiary.

Eustace Mita Chairman Icona Chairman and CEO Achristavest Chairman Caritas Construction 2501 Seaport Dive Suite SH400 Chester, PA 19013 Office: 610.497.9700 Cell: 610.574.2077 Email: emita@icona.com Mr. Mita is CEO of Icona, LLC and Achristavest, LLC and Caritas Construction, LLC. Achristavest and Caritas are Icona’s sister companies.

Mr. Mita will serve as the lead development partner and project manager/primary point of contact. Mr. Mita will act on the behalf of Icona and Achristavest.

Mr. Mita founded Icona in 2013. As Chairman and CEO, Mr. Mita currently oversees all aspects of the business. Mr. Mita has brought to Icona 40 years of executive development experience. As the founder of Icona, Mr. Mita has developed a portfolio of resorts while overseeing the corporation’s growth and operations. Mr. Mita has personally managed the development of hotels and resorts valued at more than $1 billion.

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Achristavest is a developer of waterfront properties in New Jersey, Nantucket, Maryland, Utah and Pennsylvania. Achristavest portfolio of projects has brought itself and Icona to unique locations in Utah, Maryland, New Jersey, the Carolinas, Pennsylvania, and Nantucket. In Utah, Achristavest developed what has become known as the most desirable home site in Deer Valley, which was purchased by Fred Smith, founder and chairman of FedEx. In New Jersey, Achristavest developed prime beachfront property in Avalon for John Middleton, owner of the Philadelphia Phillies.

Caritas, formerly Allied Construction, is the group’s commercial construction company and has built many of the region’s world class buildings including projects on the campuses of Temple University, Princeton University, and the University of Pennsylvania. Caritas is regarded as best-in-its-class providing a full range of construction and management services across the Eastern US. As Chairman, Mr. Mita oversees all major business operations as well as Caritas’ strategic vision and operations.

Mr. Mita is also Chairman of Mita Management, a closely-held company with interests in the automotive and real estate industries. Prior to Mita Management, Mr. Mita was President and Chief Executive Officer of HAC Group, one of the world’s largest automotive dealer training and consulting groups, with worldwide operations in 19 countries. Mr. Mita merged the HAC Group with one of the nation’s largest automotive IT companies, Reynolds & Reynolds (NYSE: REY) in 2000.

Eustace Mita, Jr. CEO of Icona 2501 Seaport Dive Suite SH400 Chester, PA 19013 Office: 609.368.5155 Cell: 610.715.8180 Email: emitajr@icona.com Mr. Mita Jr. has 20 years of experience in business management and operations, financial and marketing planning, and strategic and tactical planning. Mr. Mita Jr. oversees all aspects of Icona’s corporate operations and management of the company’s portfolio of hotels and restaurants. He is committed to fostering a culture that provides exceptional hospitality experiences through a dedication to Icona’s core values.

Eustace Mita Jr brings to Icona a background that includes internet commerce and revenue management. Under his stewardship, Icona has produced outstanding results, while maintaining a property-level culture that is value-driven, collaborative and focused on profitability.

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Mr. Mita Jr. is responsible for the annual budgeting process and oversees weekly forecasting activities as well as Icona’s business plans to maximize operational efficiency by leveraging best practices across the departments.

Mr. Mita Jr. considers training and development of staff to be very important to develop the next generation of hotel managers and, in 2018, commenced a management development program, which is designed for advancing high performing middle managers who have the potential to take on key management roles as the company grows.

Section B: Qualifications & Experience Respondents must clearly demonstrate qualifications in commercial, retail and residential development and prior experience and success similar to that contemplated in this RFQ/RFP and consistent with the Team’s development approach. Respondents should include the following for each project qualification:

• Project summary, including project name, address, size, client, development program, total development cost, project team members (including project principals).

• Brief physical description (may include photograph, site plan, or rendering in Appendices).

Comparable local development experience: i. I cona Diamond Beach 9701 Atlantic Avenue Wildwood Crest, New Jersey 08260

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Icona Diamond Beach Opened in 2013, Diamond Beach rose from the $20 million redevelopment of the 1960’s-era Pier 6600 Hotel and showcases the company’s ability to blend the past and future. Today, Diamond Beach, owned by Mr. Mita, is a sophisticated hotel offering an intimate, friendly, home away from home atmosphere.

Diamond Beach offers 106 guest room suites with galley kitchens, private balconies, and sweeping views of the Atlantic Ocean. The condo style suites and studios contain contemporary furnishings that exhibit hints of mid-century flair that are also recalled in the hotel’s 60’s facade, which was retained from the Pier 6600 hotel in a strategic decision to link the present hotel with the history of its site.

Permanent financing was placed with Beneficial.

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ii. I cona Golden Inn, Avalon 7849 Dune Drive Avalon, New Jersey 08202 Mr. Mita and Achristavest purchased the Golden Inn in December 2015 for $25 million.

A local landmark for 50 years before its acquisition, the hotel underwent a comprehensive $25 million renovation in 2016. The project combines preservation with the need for modern oceanfront accommodations. Opened in May 2016, the Golden Inn is recognized today for its distinctive blend of the architectural styles of Nantucket and South Beach.

Each of the 157 guest rooms features balconies and the highest quality custom furnishings.

The property also features 7,000 square feet of meeting space and three dining outlets. The hotel attracts a well-balanced guest mix and enjoys enviable market-wide dynamics.

Beneficial was the lead lender on this project.

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iii. Icona, Cape May 1101 Beach Avenue Cape May, New Jersey 08204 Opened in October 2016 after a $4.5 million renovation to the former Palace Hotel, Cape May, owned by Mr. Mita, is Icona’s newest hotel, located in the heart of Cape May’s fashionable Beach Street District. With 57 guest rooms and suites, the beachfront hotel is only a few blocks away from the Washington Street Mall, the convention center, and dining and cultural activities. Each of the property’s 57 rooms features custom furnishings, luxurious finishes, Carrera marble bathrooms, and a balcony. The hotel’s design theme recalls the boutique hotels that lined Beach Avenue at the turn of the 20th century.

Fox Chase was the lead lender.

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iv. Th e Grand at Diamond Beach 9601 Atlantic Avenue Wildwood, NJ 08260 In addition to designing the Grand at Diamond Beach, Achristavest was also the coconstruction manager. The building features a distinctive chateauesque architectural style, including stone cladding on the lower elevations and dramatic balconies encompassing the surrounding building. The project consists of condominiums on 13 floors, underground parking and a pool deck. Close coordination and partnering among all the major stakeholders was essential in accomplishing the goals of this fast-tracked project, on-time and within budget. Under Achristavest leadership, the entire 400k SF project was designed and constructed in 611 calendar days.

Carlyle was the lead lender and co-developer for the project.

Icona is uniquely well qualified to partner with the city of Wildwood. The company has extensive construction experience and deep roots in Wildwood and Cape May County.

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Section B: (Continued)

• Three to five references, including names, addresses, telephone numbers, and e-mail addresses for individuals directly involved with projects presented in qualifications section.

In support of this RFQ, we have included the resumes of its principal and CEO. Icona has a talented team that possesses extensive experience with land use, development, property management, construction, hotel investment and public-private partnerships.

References for the principal and the entire development team are available and can be furnished upon request.

Section C: Development Approach Respondents are required to submit a site-specific development proposal for the beachfront parking lots.

The ideal site appears to be south of the “Welcome to the Wildwoods” marque. This site gives the project a “Gateway” feel to the city of Wildwood.

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District Vision Concept Plan Icona envisions a 200-key, full service hotel. As an overarching goal, our design seeks to incorporate the hotel, retail and a possibly a parking garage into the existing boardwalk, becoming an extension that will likely include inviting restaurants and cafes with indoor and outdoor spaces. We propose that the parking area be located on the southern side of the hotel, between the hotel and East Bennett Avenue. The parking lot will not be beneath the hotel. The parking lot will be shared between the hotel, the city and the convention center.

In our vision for the project, we will engage architectural forms and design characteristics reminiscent of the Doo-Wop era, and which blend and complement Wildwood’s historic past. Close coordination and partnering among all major stakeholders will be essential in accomplishing these goals. The organization of the building and site will create an engaging connection to the ocean, keeping with this Doo-Wop neighborhood’s connection to the 1950s and 60s. Our overall design goal is to create a distinct landmark that reinforces the Doo-Wop history and identity of Wildwood. Icona’s design plans would integrate a DooWop theme with mid-20th century futurist architecture, that could be influenced by car culture, jets, the Space Age and the Atomic Age. Project Development Approach The benefits of a beachfront hotel in “our” community are undeniable. A landmark hotel helps to complete the three pillars that are vital for every shore town: tourism and economic impact, residential benefits, and employment.

The hotel’s connectedness to the Wildwood Boardwalk provides a unique visitor experience – an eclectic setting for hotel guests, locals, and convention attendees to enjoy the sights and sounds of the Doo-Wop age.

Planners of conventions and meetings select locations based on a community’s total package, not solely on the merits of convention centers themselves. In other words, cities compete on a “destination basis”. Industry surveys have consistently identified the same top three factors in selecting a convention destination: convention facilities, hotel packages and the nature of destination itself, e.g., attractions and activities. Adding the beachfront hotel component puts the finishing touch on fulfilling these top three market drivers.

This beachfront hotel, when considered in conjunction with the boardwalk, beaches and other local activities; elevates the stature of Wildwood in its ability to attract events.

The new hotel also enhances Wildwood’s ability to be recognized as a destination town, known for its beaches and hospitality. With an iconic beachfront hotel Wildwood will come to be known as a competitive venue for conventions, trade shows and meetings with Philadelphia and Atlantic City.

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Increasingly larger and more frequent conventions and trade shows will be drawing growing numbers of out-of-town visitors, and their dollars, to the city, which not only has a positive economic impact on the city of Wildwood, but also on the entire area’s hotels and local businesses. Professional meetings and trade shows are not necessarily tied to a single city but move the site of their conventions around the country to provide “geographic fairness” to their membership. For these potential clients, conventions and exhibition sites are selected based on a community’s total package. Cities compete on a “destination basis” rather than on a “facility basis.” A beachfront hotel enhances the city of Wildwood as a destination.

Our design for the beachfront parking lot hotel will reflect influences from sustainable building design practices and new hotel technology. In our vision for the project, we will engage architectural forms and design characteristics, blending and complementing the city of Wildwood’s historic past. Close coordination and partnering among all major stakeholders will be essential in accomplishing this goal.

Project Phasing Plan The beachfront hotel project paired with the Wildwood Boardwalk and Convention Center, will create a “sense of place” on the Boardwalk, and in the surrounding area. Icona sees this vision extending beyond the facility itself to include local businesses, residents, public agencies and other stakeholders from all over the island. How Wildwood is perceived by out-of-town visitors is influenced by the part of the city they experience.

Architecturally, the hotel and the southern end of the boardwalk will positively impact the hospitality industry, which ultimately will contribute to building a vibrant, resilient and diverse year-round economy. There is an opportunity to frame a reimagined plaza, enhancing the boardwalk arrival experience. Improvements to the streetscape and adjacent sideways will enhance the pedestrian experience for those coming to the hotel and Wildwood.

The hotel and the city of Wildwood would become a great demand driver in attracting Northeast conventions and exhibitions. The hotel’s location and its connection to the boardwalk and convention center would serve as catalysts for additional development of Wildwood. Icona believes that this project’s proximity to the boardwalk and to the very center of Wildwood will play a pivotal role in the redevelopment of the area and encourage the growth of local year-round entertainment as well as other developments of mixed uses.

We envision the hotel providing both a creative ambiance, as well as an element of surprise and delight to visitors and guests. In feel, the hotel will be authentic and imaginative, with retail spaces adaptable to multiple uses. Exemplary service and accommodations will be available at an affordable price point, and the hotel will be committed to delivering the comforts of home while embracing the excitement and aesthetic interest of the Doo-Wop theme. The hotel will quickly become an integral part of the greater Wildwood community.

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Commitment and Project Readiness An Icona beachfront hotel in Wildwood: this is the time – we are the team.

Our strategy is to approach this project by thoroughly understanding its many influences and then incorporating this understanding into our development of the hotel. Some of the strongest influences we have noted and will endeavor to address in the design, construction, and operation of the hotel include: The Doo-Wop design and theme, the hotel’s integration into the boardwalk as an extension of the boardwalk itself, and the need to establish and cultivate the connection between the community, the hotel, and the convention center.

Icona is enthusiastic about the prospect of delivering a premier project that will enhance the city of Wildwood’s ability to help the convention center attract business to the Wildwood area and participate even more fully in its redevelopment. Icona is driven by projects that have an impact on the community. Historically, projects completed by Icona have succeeded to a great extent by understanding the needs of the neighborhood in which they are built.

This RFQ presents a unique opportunity for the qualified developer to leave a special mark on Wildwood, complementing its beaches, amenities and neighborhood character and to complement the convention center. The proposed hotel is positioned to become the centerpiece of the Wildwood redevelopment effort and provide further vitalization to Ocean Avenue and beyond.

Icona will endeavor to meet the city’s long-term goal of creating a vibrant, culturallyrich, epicenter that will function as a source of community pride. The project is meant to serve as a beacon through the entire Northeast, saying that Wildwood is definitely a trend setter. Working together with the city of Wildwood, Wildwood will be able to better accommodate events requiring overnight stays. In partnership with the city, the visitor’s bureau and convention center, the hotel work together towards a unified approach in attracting events. Working with the city of Wildwood, the project will now be able to market Wildwood’s small-town appeal with big city amenities that can draw an array of new demand.

Property Rights Icona owns and operates The Icona Diamond Beach. Its address is 9701 Atlantic Avenue, Diamond Beach.

Commitment to Local Participation Mission Critical. Icona understands and supports the goal to working with local participation. Icona will seek input from the city of Wildwood throughout the process.

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Section D: Financial Feasibility Respondents should provide a preliminary project financial framework plan for the redevelopment proposal. The financial framework plan should consist of order-of magnitude projections and a description of sources and uses, a hard and soft cost budget and an operating pro forma through project stabilization for each project component (retail, residential, office, parking, etc.). Sufficient preliminary information should be provided for the city to determine the proposed project’s financial underpinnings and ability to be self-sustaining.

Hotel Development Costs Land Hard Construction and Site Improvements Building Costs Contractor Overhead Landscaping Permiting Building Signages Construction Contingency Total Hard Construction Soft Costs Financing and Construction Interest Insurance Architectural Design Engineering Interior Design Professional Contingency Total Soft Cost Furniture, Fixture and Equipment Guest Room Public Technology Kitchen and Laundry Soft Goods Total Furniture, Fixture and Equipment Pre-opening and Working Capital Supply Inventory Technical Service Recruiting, Staffing and Training Total Pre-opening and Working Capital Total Project Costs

To be determined $32,500,000 1,625,000 750,000 1,625,000 315,000 2,300,000

$3,000,000 1,125,000 1,600,000 600,000 750,000 1,500,000 1,500,00

$10,500,000 1,500,000 300,000 1,300,000 400,000

$300,000 750,000 950,000 1,250,000

$39,115,000

$8,575,000

$14,000,000

$3,250,000 $64,940,000 16

Three Year Hotel and F&B Consolidated Pro Forma Year Available room nights Occupied Room Nights Occupancy Average Daily Rate

Year 1 73,000 25,550 35% $210

Year 2 73,000 29,200 40% $240

Year 3 73,000 34,675 47.50% $275

Operating Revenue Room Revenue Food and Beverage Revenue Other Total Operating Revenue

$5,365,500 2,000,000 321,930 7,687,430

$7,008,000 2,750,000 420,480 10,178,480

$9,535,625 3,500,000 572,138 13,607,763

Operating Expenses Rooms Expense Food and Beverage Expense Total Operating Expenses

1,537,486 1,500,000 3,037,486

2,035,696 2,062,500 4,098,196

2,721,553 2,625,000 5,346,553

Total Department Income

4,649,944

6,080,284

8,261,210

Undistributed Expenses Administration and General Information and Telecom Sales & Marketing Management Fee Operations and Maintenance Insurance Utilities Total Undistributed Expenses

561,182 76,874 384,372 384,372 461,246 153,749 307,497 2,329,291

743,029 101,785 508,924 508,924 610,709 203,570 407,139 3,084,079

993,367 136,078 680,388 680,388 816,466 272,155 476,272 4,055,113

500,000 – 500,000

500,000 – 500,000

500,000 – 500,000

1,820,653

2,496,205

3,706,097

153,749

203,570

272,155

$1,666,904

$2,292,635

$3,433,942

Non Operating Expenses Property Taxes Interest Total Non-Operating EBITA Reserves Available for Debt Service

Financing As developer/manager/operator, Icona envisions the hotel phase of the project to be financed from a variety of sources, including, (i) senior secured debt (likely senior bonds), (ii) mezzanine debt or developer’s equity, and/or (iii) if required, a city of Wildwood 17

contribution. The city of Wildwood could contribute capital to the project, this could be accomplished through subordinated debt. The land, in whole or in part, is envisioned to be contributed under a long-term lease to the project by the city of Wildwood.

It is important to note that the financing options available to the project are subject to market forces as well as the specific characteristics of the final transaction. Moreover, the rights of any financing participant will fluctuate depending on how the land is treated in the transaction. In order to develop and fund the project, ICONA may seek financing that could be structured with the land contribution in a variety of ways.

Secured Senior Debt Given a $66 million estimated hotel cost, it is likely that a $55 million senior loan could be obtained with an estimated interest rate of 4 to 5% and an origination fee of 1%. This senior debt would need to be secured by the land (with a mortgage) and the building.

Mezzanine Debt The Project will likely require a mezzanine loan, which is a financing vehicle that typically serves as a bridge between debt and equity during construction and afterwards in the developer’s capital stack. Commercial lenders will likely look for 15% equity requirement.

Equity The city of Wildwood may have equity interests in the Project. The city of Wildwood’s equity return will be treated in line with similar recently built beachfront hotels on municipally owned land around the country. Icona is currently studying these transactions.

Sources and Uses for the Hotel Below the city of Wildwood will find a preliminary Source and Use plan. The sources scenario is presented here for preliminary discussion purposes.

Sources and Uses Sources Senior Debt Mezzanine Equity and other Total Sources

$48,705,000 9,741,000 6,494,000 $64,940,000

Uses Hard Construction and Site Improvements Soft Costs Furniture, Fixture and Equipment Pre-opening and Working Capital Total Uses

$39,115,000 8,575,000 14,000,000 3,250,000 $64,940,000

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Icona is currently studying investment structures for property. We anticipate that the project will require assistance from the New Jersey Economic Development Authority’s Economic Redevelopment and Growth (ERG) Program as well as from Tax Incremental Financing from the New Jersey Department of Community Affairs. With our experience, expertise, and drive to see this project to completion, Icona stands ready to fulfill these this critical project requirements.

Respondents should include their preliminary methodology for determining land valuation for the sites.

The land, in whole or in part, is envisioned to be contributed to the project by the city of Wildwood.

Section E: Financial Capacity Respondents should provide separate, audited financial statements indicating the net worth of the Development Team entity or its principals.

Icona has successfully secured both debt and equity funding for multiple projects in several states. For more than 15 years, Icona and Icona’s sister company Achristavest has financed, constructed and completed every project on which it has commenced development.

Through experience and relationships with lending and equity sources such as the Carlyle Group, Bank of America, Citi and Morgan Stanley; Icona is well-positioned to secure the best possible financing and deal structures for the hotel and conference center.

Prior to the city of Wildwood’s final selection Icona and its principal will provide the necessary financial statements.

Conclusion With its waterfront location and boardwalk frontage, the Icona beachfront hotel built on the city’s parking lots would play a pivotal role in the ever-evolving development of the city of Wildwood.

With this response to the RFQ, Icona presents its expertise, experience, drive, and vision for your consideration in choosing a developer for this unique opportunity to make a lasting contribution to the city of Wildwood, both now and in the years to come. With our extensive development experience and deep roots in the Wildwoods and in Cape May County, we feel uniquely qualified to advance an Icona Wildwood hotel. Icona greatly values the opportunity to create this premier hotel on Ocean Avenue, a hotel that will stay true to the Doo-Wop design, theme, and history of Wildwood.

We look forward to applying our skills, knowledge, and drive to adding a new page to the history of Wildwood.

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