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Cherryville, L.P. Executive Summary

Project Description

The Cherryville, L.P. Property consists of an assembled tract of land located at the approximate northwest intersection of State Highway 80 and SH/Tollway 130 (currently under construction). This intersection is approximately 19 miles from the of Austin, 10 miles from the City of San Marcos and 50 miles from the city of . The total area of the project is approximately 3,214 acres.

The project is bounded a) on the west by Road 107 with approximately 2.5 miles of road frontage, b) on the south by State Highway 80 with approximately 1.7 miles of road frontage and, c) on the east by County Road 110, which provides two way service roads to Tollway 130 with approximately 3.0 miles of road frontage. This corner will become the “going home” corner for traffic from Austin to the bedroom communities of San Marcos, Martindale, Cherryville and others that will be developed along the east side of Tollway 130 .

Since this project is located at the center of several population areas (Luling, Lockhart, San Marcos and, Seguin) it will be a regional service area. The intersection is a major intersection in the south eastern part of the Area and, is therefore land planned to serve that area with University/Educational facilities, health care facilities that will interact with the Educational Units (i.e. nursing schools etc) and, a residential community supporting quality site built homes at prices benefited by lower land prices. It will be supported by school sites and, neighborhood retail.

The size of the project has allowed a well planned community with comprehensive community services, schools, etc. The ownership has worked with the Austin firm of Garrett-Ihnen Civil Engineers to do the landplanning and engineering. The planning of this project has included land use percentage comparisons with new and rapidly growing communities in the state of . Both the preliminary plan and the revised land plan have been approved by the County Commissioners Court of Caldwell County. The current land plan calls for the following land uses. (see attached concept plan):

• Commercial land suitable for the following uses:  Automobile Dealerships  Industrial Parks  OfficeParks  Hotel and Conference Center sites  Hospital and Healthcare  University/Education sites  Senior Living community  Neighborhood and Regional Retail sites  Church, School and Religious sites  Center sites

• Residential uses:  More than 4,000 Residential lots ranging fromSF-1 to SF-5  Multi-Family sites  Senior Living sites  Garden Home sites suitable for up to 280 lots

• Community Support:  Water and Waste Water treatment areas  Detention lakes and ponds  Public and semi-public sites for Community Fire Service, School and Park Lands

The 2009 session of the approved and passed into law the Caldwell County Municipal Utilities District #1 providing this project with the first MUD in Caldwell County. The MUD may issue bonds to provide for the financing and tax recovery of roads, water and waste water utilities as well as other forms of community improvements. The MUD is both expandable and divisible. Although local water supply companies have agreed that the ultimate cost and complexity of this project exceeds their available financial resources and organizational structures, they have agreed to provide water services for the first phases of the project. Negotiations are currently underway to provide for the long term water needs of the M.U.D. created by the ownership. Guadalupe Blanco River Authority (GBRA) has acknowledged the importance of the development of this site to Caldwell County and has offered utility support to the development of the project as well.

Caldwell County has expressed strong support for the project due to the quality of planning which includes site built homes, the plan to seek out institutions of higher learning to establish satellite locations within the project and the expectation that additional jobs will be brought into the county via the industrial and commercial development that is planned for.

Electric utilities for the site will be provided by Blue Bonnet Electric Company. The planning of the project has involved close consultation with Blue Bonnet in appropriate areas. Bluebonnett offers abundant, redundant power with advanced Smart Grid technology. It is likely that the site will receive “Sustainable” certification in the area of electric utilities.

Location SH 80 and Texas Toll Road 130

Austin, Texas, located approximately 19 miles north on I-35 is the state capital. While Texas is leading the nation in job growth; Austin, the state capital, is leading the state. A city of approximately 700,000 people, business growth in Austin is generated by the presence of government, the University of Texas, Dell Computers, IBM, Hewlett Packard etc. and is often referred to as the second “Silicon Valley”. This project is located only about 15 to 20 minutes by the Tollway 130 from the Austin Bergstrom Airport. The Austin Hill Country is a prime retirement area within the state. for more information see www.austin-chamber.org

San Antonio located 90 miles south of Austin on I-35 is now the most populous city in Texas. With approximately 1.2 MM people in San Antonio proper, the city is also the home of Sea World, USAA Insurance, the largest military base in the state, the Alamo, and downtown Riverwalk, and the 1995 World’s Fair. Since the creation of the NAFTA agreements between the US and Mexico promoting commercial exchange, approximately 90,000 trucks per day cross the border into Texas with goods being delivered to the US markets. for more information see www.SanAntonio.gov/edd

San Marcos located approximately 10 miles from the subject property, is a city of approximately 55,000 in population, not including the 28,000 students of . It is the county seat of Hayes County, and is 29 miles south of Austin, 49 miles north of San Antonio and is accessible by. Interstate Highway. 35 ( I-35) which is the primary transportation artery that serves the state running south to north (Laredo, San Antonio, Austin,and ). San Marcos is the home of Texas State University and has a strong manufacturing base; however it may be best known as the location of Prime Outlet Malls and Tanger Outlet Malls. Attracting approximately 11 million shoppers each year who spend an average of $127 each, San Marcos is now the 3rd largest tourist attraction in the state of Texas. It’s airport has recently begun a $4.5 MM development to enhance it’s foreign trade sector. for more information see www.ecodevsanmarcos.org)

InterstateHighway 35 (I-35) is the primary transportation artery running north and south from the Mexican border at Laredo, Texas to the northern Texas/ boundary. Traffic on this interstate highway has become so heavy that the Texas Department of Transportation (Tx.DOT) has created plans to build a new Trans-Texas highway from south of San Antonio running parallel to I-35 on the east, all the way to the Oklahoma state line. for more information see: www.dot.state.tx.us

Development between Austin and San Marcos on I-35 has caused the small to the south of Austin to grow exponentially. For example, the city of Kyle, 10 miles north of San Marcos, was 12,000 in population in 2005. In 2006 the population within it’s ETJ reached approximately 50,000. Traffic counts along I-35 at San Marcos which were 80,000 per day in 2005 were 100,000 per day by 2006.

State Highway/Tollway 130: Although the entire length of I-35 from the Texas/Mexico border to Dallas has been severely impacted by the heavy traffic on I-35, the City of Austin has been most negatively impacted by the traffic. The City is virtually in gridlock therefore, Texas Department of Transportation (TxDot) has begun the construction of the first portion of the Trans-Texas Highway with the creation of SH/Tollway 130. This 6 lane divided tollway is reportedly to planned for an increased speed limit and will become an outer /by-pass around Austin thus diverting traffic from I-35. The proposed speed limit is 10-15 miles faster than other speed limits in the state and will reduce travel time to Austin workplaces to about 14 minutes from the site. (for TxDot updates and pictures of current development of SH/Tollway 130 see: CentralTexasTurnpike.com ) The bill permitting an 85 mph speed limit is now before the Texas Legislature and passage is expected in May of 2011.

Construction has already been completed and is open to traffic from north of Austin at Georgetown past the Austin International Airport. Road construction can now be seen in process to just north of Lockhart on SH 183. The project has been split into six (6) road segments. In order to speed construction, TxDot has contracted with Cintra/Zachary builders and financiers to construct the project.

The delivery of the contructed SH/Tollway 130 is now on course for an early delivery of the final segments (segments 5 & 6) of the 90 mile tollway from Georgetown on the north to Seguin (I-10) to the south. a) Construction of Segments 5 and 6 by Cintra/Zachry is moving rapidly toward and early delivery. Meetings with Cintra/Zacahary indicated that they hope to have traffic flowing in these segments by mid 2011. (for more information on these companies and the SH/Tollway 130 contracts see: www.cintra.es and www.zachry.com ) b) Acquisition of Right of Way from property owners along Segments 5 and 6 were completed in September of 2009. Cherryville sold approximately 258 acres of land to TxDOT for this roadway. c) SH 130 bisects the subject property on it’s east side leaving approximately 80 acres of land on the east side of the tollway.

Centers of Development and Population growth: SH/Tollway 130 will have only five (5) tollbooth intersections south of Austin by which traffic can exit the tollway onto an east/west state highway to access I-35. The most significant of these will be the intersection of State Highway 80 and SH/Tollway130 at which the subject property is located. Traffic will exit SH/ Tollway 130, travel west on SH 80 approximately 10 miles to I-35 and the north side of San Marcos. For this reason, it is expected that development closest to San Marcos will begin at this intersection and radiate outward therefrom.

State Highway 80 provides primary access to the property from the east and west with approximately 1.7 miles of frontage. This 4 lane state highway is a significant transportation route from and the ETJ to San Marcos and, further west to in the .

Caldwell County is the county in which the subject property is located. Meetings with both the City Development officer of Lockhart, and the County Commissioners for Caldwell County strongly indicate that both the city and, the county are eager to support development. The property is currently receives recognition as Agricultural land enjoying appropriate tax treatment, the Preliminary Land plan has been approved by the County Commissions Court. This project has been the recipient of active co- operation from all levels of the state and county.

Utilities - Water utilities to the site are currently provided by two sources including Tri- Community Water Company and, Maxwell Water Company. Additionally, Guadalupe Blanco River Authority (GBRA) has offered it’s support with addition water for the project.

Electric power is currently available to the site by Blue Bonnett Electric Co-Op. which has one of the most advanced delivery systems in the state. (See Bluebonnett website for description of its Smart Grid Technology.

Wastewater will be provided by central waste systems which may be financed via bonds issued by the approved M.U.D. and later connected to a project wide wastewater plant.