12-15-2014 Final Major Commercial Entertainment and Tourism Area

MAJOR COMMERCIAL ENTERTAINMENT AND TOURISM AREA STUDY I-435 and Antioch Mixed-Use Project

December 10, 2014

I. Introduction

Overland Park Development Company I, LLC ("Developer") has submitted a request for tax increment financing (“TIF”) to the City of Overland Park, Kansas (the "City") for the redevelopment of the Brookridge Golf & Fitness property, an approximately 194-acre site generally located in the northwest and northeast quadrants of Antioch Road and Interstate 435 (“Brookridge,” and along with certain adjacent right-of-way, as described below, the “Subject Property”), the legal description of which is set forth on Exhibit A attached hereto. This study is intended to review the Subject Property for eligibility as a major entertainment and tourism area pursuant to K.S.A. 12-1770 et seq., the Kansas TIF statutes (the “Act”).

II. Legal Description

The legal description of the Subject Property is attached hereto as Exhibit A . The Subject Property includes the Brookridge Golf & Fitness property, as well as the adjacent Antioch Road and 103 rd Street right-of-way. The Subject Property’s general boundaries are Interstate 435 to the south, the eastern boundary of the Brookridge Golf & Fitness property to the east, 103 rd Street to the north, and Farley Street to the west (excluding all of the residential property west of Antioch). A map depicting the boundaries of the Subject Property is attached hereto as Exhibit B.

III. Background

The Developer acquired Brookridge in the fall of 2014. According to Johnson County records, Brookridge was developed and built in approximately 1960. Brookridge consists of two clubhouse/fitness buildings east of Antioch along 103 rd Street situated next to 18 holes of golf. Two maintenance buildings are also located on the east side of Antioch approximately 850 feet north of the west-bound I-435 exit ramp on to Antioch Road. A small clubhouse and 9 additional holes of golf are located immediately west of Antioch Road across from the rest of the Brookridge Golf & Fitness property.

The Developer proposes to redevelop the Subject Property to create a mixed-use, urban-style center consisting of office, retail, entertainment, hospitality, residential, and public park components (the “Project”). More specifically, the Project calls for –

• Performance Venue: An open air performance venue consisting of an approximately 3,000-seat amphitheater will be a centerpiece feature of the Project. The performance venue will be designed to host musical and performing arts events. The Developer is also exploring, through market studies and investigations of venues around the country, whether a covered or even fully-enclosed performance venue is financially viable as part of the Project. An enclosed venue would extend the number of usable days for the venue during the year.

• Retail Village: Approximately 330,000 square feet of restaurants and retailers is proposed to be constructed as part of the Project. This will be designed to enhance the appeal of the performance venue for visitors, offering dining and shopping options in a walkable environment along the grand lake and central park to and from the performance venue and ample structured parking. An additional approximately 45,000 square feet of retail is anticipated as part of the planned hotel and office buildings.

• Office: Approximately 3.8 million square feet of new Class A office space, which will offer large blocks of Class A office space with easy interstate exposure and access, providing corporate and regional headquarters currently located out of state with options to relocate into Kansas. Corporate and regional headquarters would result in additional out-of-town visitors, including board members, clients, and company personnel to the Project.

• Central Park: A substantial park, with a grand lake traversed by multiple bridges and open to the public is planned as a key feature of the Project. For visitors from out of town, the park experience will offer yet another amenity for “weekend getaways” in combination with the planned hotels, the performance venue, golf, and retail village.

• Golf: The Developer plans to construct a new, luxury clubhouse on the west side of Antioch and to enhance the existing 9-hole course that currently exists on the west side of Antioch, creating a unique “executive 9-hole experience,” designed to attract both business and pure recreational travelers.

• Hotels: The Developer plans to construct three hotels consisting of approximately 750 guest rooms to serve both corporate and leisure visitors.

• Residential: Approximately 3.3 million square feet of residential offerings, consisting of over 2,500 for-sale and rental units, will also be constructed as part of the Project.

IV. Major Commercial Entertainment and Tourism Area Requirement

In order for TIF financing to be available for a project, the project must be in an “eligible area.” K.S.A. 12-1770a(g) defines “eligible area” as follows:

“Eligible area” means a blighted area, conservation area, enterprise zone, intermodal transportation area, major tourism area or a major commercial entertainment and tourism area or bioscience development area.

The Developer has proposed that the combination of features and the interrelated nature of the components and amenities of the Project proposed for the Subject Property, as described above, qualify the Subject Property as a “major commercial entertainment and tourism area” under the TIF Act.

Given that the TIF Act does not define “major commercial entertainment and tourism area,” this Study utilizes the factors set forth in K.A.R. 110-9-6 for the Kansas Secretary of Commerce to consider when making a determination as to whether to designate land under the STAR Bond Act as a “major commercial entertainment and tourism area.” Those factors, as well as some additional factors (the “Eligibility Factors”), are set forth below, and this Study examines whether the Subject Property should qualify as a “major commercial entertainment and tourism area” under the TIF Act in light of such factors.

The Developer has commissioned a STAR Bond feasibility study by Canyon Research Southwest, Inc. (the “Feasibility Study”) in support of the formation of a STAR Bond District that would encompass the Subject Property and have boundaries that are identical to the proposed TIF redevelopment district. The Feasibility Study addresses many of the Eligibility Factors in great detail, and for that reason, is referenced multiple times below and is attached hereto as Exhibit C .

V. Analysis of Subject Property under Major Commercial Entertainment and Tourism Area Factors

(a) Size of project and geographic factors

1. Size of Subject Property

The Subject Property consists of approximately 194 acres, plus 103 rd Street and Antioch Road right-of-way.

2. STAR Bond “Eligible Area” Finding

The Secretary of Commerce of the State of Kansas in a letter to the City of Overland Park, Kansas, dated November 6, 2014, attached hereto as Exhibit D , determined that the Subject Property is an “eligible area” within the meaning of the STAR Bond Act, KSA 12-17, 160 et seq. , based on the Project’s qualification as a “major commercial entertainment and tourism area.”

(b) Unique Quality of the Project

1. State-wide, regional, and national market attraction.

The Project will provide an upscale, cohesive, urban blend of entertainment, business, retail, and residential components that will be the first of its kind of this scale in Kansas. The Project, as proposed, will contain the single largest office development designed for multiple tenants, and one of the largest mixed-use developments, ever constructed in the State of Kansas. (Feasibility Study, Market Study Conclusions, p. v)

Across Kansas and the Midwest region, the Project’s variety of offerings will be well-positioned to entice leisure travelers to venture to the Project for a weekend filled with concerts or performances at the performance venue, strolls along walking trails that meander through the Central Park and over the bridges traversing the

Grand Lake, meals in several of the dozens of restaurants and exploring the boutiques and other retail offerings in the Retail Village, golf rounds at the executive course, and stays at one of the hospitality options nestled among all of these amenities.

Especially alluring to travelers from across the metro, State of Kansas, and region, will be the ability to enjoy the array of entertainment options described above, without the need to travel in a car during their entire experience. Moreover, while leisure travelers in the region have certain other comparably diverse destination options, nearly all, if not all, of those alternatives are in truly urban centers that lack the extraordinary safety and security that the City of Overland Park offers.

This unique package of amenities offered by the Project, and the intrinsic desirability and convenience of traveling to and within Overland Park, help drive strong estimates for regional leisure travel to the Project. Of the projected 3.0 million visitors that are expected to patronize the Project at full build-out (as discussed in more detail below), regional leisure travel is expected to constitute a significant portion of the Project’s visitors. (Feasibility Study, Market Impact Study – “Estimated Customer/Visitor Counts,” pp. 51-53)

In addition to significant leisure visitation, the Project’s components are expected to draw regionally and even nationally based on the Project’s planned approximately 3.8 million square feet of Class A office space. Business travel associated with the Project’s office component, whether it is company executives and other employees based in offices across the country, or clients or customers traveling to the company’s offices for meetings or events, is expected to be significant. The walkable proximity of the spectrum of amenities described above would offer corporate operations the entertainment and hospitality benefits of an urban locale without the traffic, crime, and other negative realities that accompany the typical urban downtown business district. Given the relative uniqueness of this type of corporate environment, it is expected that corporate operations from around the region and country will locate at the Project, and the regular flow of out-of-town visitors associated with such operations will follow.

The Project, in conjunction with the Overland Park Convention Center and Convention Center Hotel, should also be well-positioned to bring regional and national conventions to Overland Park that the City has to-date not been able to secure. Of all the City of Overland Park and its Convention Center have to offer -- walkability, convenient entertainment, proximate and clustered dining and shopping, and nearby public and large-scale open space are not on the list. However, these are some of the most important attributes of USA Today’s “Ten Best Convention Cities” 1 have to offer, as captured in excerpts from the most powerful factors that put many of the cities on the list:

1 USA Today’s Ten Best Convention Cities can be found at http://www.10best.com/awards/travel/best-convention- city/ , and include: Indianapolis, Boston, Nashville, Salt Lake City, Atlanta, Denver, New Orleans, Washington, DC, Minneapolis, and Chicago.

“Visitors can also take a scenic route to their event by strolling the pedestrian promenades and bridges.” (Chicago)

“Located a few blocks from a sprawling park, downtown shopping and all sorts of entertainment options and attractions…it is a big draw throughout the year. [There are] a substantial number of hotels and restaurants … nearby, adding to its appeal.” (Minneapolis)

“Convention-goers can indulge in an onsite massage before heading back to one of the many nearby hotels.” (Chicago)

“Amphitheater … scenic outdoor entertainment” (Denver)

While the Overland Park Convention Center and its surrounds are not presently positioned to offer these amenities that convention-goers seek, the Project’s less than 3-mile, five-minute drive to the Convention Center would provide a paradigm shift. The Developer intends to investigate joint efforts with the Convention Center to provide regular “public transit” between the Convention Center / Convention Center Hotel and the Project, as well as joint marketing and promotions, including marketing the two locales as a unified “campus” experience. Whether its park space, dynamic entertainment, substantial shopping and restaurants, the Project would bring all of these to convention-goers doorstep, opening the door to new regional and national tourism to the City of Overland Park. The Developer considers the Project’s synergies with the Convention Center of paramount importance, and the Feasibility Study confirms the potential for such synergies. (Feasibility Study, Impact on Comparable Area Businesses, p. xi)

2. Utilization of nature, culture, or heritage unique to Kansas.

Nature: Over 50% of the Subject Property will be left to green/open space and will include many native plantings that reflect the natural landscape of Kansas.

Culture/Heritage: The Developer has proposed the integration of a Kansas “walk of honor” into the Central Park that will serve as the central backbone connecting the various components of the Project. Woven into the scenic park and Grand Lake trails, statutes and other monuments and markers would celebrate men and women over the last century and half that have made the Sunflower State what it is today. Included among the Kansas heroes would be local leaders that have helped Johnson County and Overland Park become some of the most highly-desirable places to live and work in the country, setting the table for the Project’s vision and scale.

3. National market brand identity for the State of Kansas.

As discussed above, the Class A office opportunities for businesses to relocate from across the region and country, driven by the walkable entertainment, restaurant/retail, and outdoor space and upscale urban feel in a suburban locale, should begin to put Overland Park on more short lists for corporate relocations and expansions. In addition, opening up the Overland Park Convention Center to a

whole new world conventions from coast to coast, should also provide a boost to the brand identification of the State as well as the City of Overland Park.

1. Absorption schedule

The Developer anticipates the Project will build-out in approximately fifteen (15) years. Given that over such a period of time there will be some number of individual segment and overall economic downturns of unknown severity, all of which the Project’s build-out schedule will have to weather, the actual absorption timing could in reality be shorter or longer. Accordingly, the Developer will agree that no TIF redevelopment project plan will be approved more than twenty (20) years after creation of the TIF redevelopment district.

Within the Developer’s approximately fifteen-year estimated construction schedule, there are three approximately five-year phases of development. The Developer’s intention, given current market conditions, is to focus initial efforts and financing on building a significant portion of the Project’s infrastructure, along with the Retail Village and initial phase of the office component. The performance venue and most of the remaining infrastructure would follow soon thereafter, trailed by the initial residential and hospitality. In the remaining years the office and residential components would steadily continue to build-out as demand allows, along with additional hospitality.

The table below shows a general breakdown of the Developer’s estimated development schedule:

Performance Residential YEARS Office SF Venue (seats) Retail SF (units) Hotel (rooms)

2015 -2019 1,431,440 3,000 303,296 772

2020 - 2024 792,745 35,001 1,028 450

2025 - 2029 1,637,391 35,955 808 300

Total 3,861,576 3,000 374,252 2,608 750

2. Timing of local economic impact

The local economic impact of significant construction on the Project is expected to begin by late 2015 and continue for the next fifteen or more years. Over the course of the Project’s construction, construction phase direct on-site employment is estimated at 6,473 full-time equivalent jobs. (Feasibility Study, Economic Impact Study, Construction Phase, pp. 65-66) Additionally, City permit and other

development-related fees would be substantial (for example, City building permit fees, assuming a permit fee multiplier of 0.005 and $2 billion of construction valuation, would generate $10 million in fees).

Just as construction-related jobs and economic impact will soon begin, the indirect local economic benefits should begin to accrue by the end of the first five-year phase of development, as some or all of the Retail Village, some or all of the Central Park, a portion of the office component, and the Performance Venue are all expected to be built and operating. The impact will only grow as each subsequent year of development goes by. Even with this level of initial critical mass, the collateral local economic impacts will likely begin to be felt. For example –

- Increased size and number of conventions, which in turn benefits not only the Convention Center Hotel, but also other hotels in the area where convention-goers stay (i.e., conventions are attracted to the Convention Center that exceed the capacity of the Convention Center Hotel)

- Other Overland Park restaurants and retailers will see increased sales from the increased visitors, which in turn will generate additional sales tax for the City

- Synergies with other Overland Park attractions, such as the Youth Soccer Complex (e.g., more tournaments booked to take advantage of the amenities the Project and other projects within the City have to offer) or Prairiefire (more planned trips to the museum by out-of-town guests to take advantage of not only the museum, but the Performance Venue and other components of the Project). Tourism attractions have proven to leverage further tourism and economic opportunities. (Feasibility Study, Synergy with Area Attractions, pp. vii-viii)

- Increased investment within the City’s “north-of-435-corridor,” both in terms of the Project and the adjacent street infrastructure around the Project, will likely lead to capital investment in the surrounding northern Overland Park neighborhoods, which leads to higher home values and stronger tax base.

In addition to the immediate positive economic impacts to the City described above, very substantial economic benefits will begin to flow to the City beginning as soon as approximately fourteen (14) years after the first STAR Bond issuance, as the bonds are retired and the City’s 1.0% sales tax generated by the relevant STAR Bond project area is released back to the City. The fourteen (14) year estimated life of the STAR Bonds is based on the coverage factor applied as part of the bond underwriting, which means that if sales tax revenues are collected in accordance with the sales projections that formed the basis for the bond sizing, there will be excess revenues used each year to retire bonds early, causing the bonds to pay off earlier than the potential full 20-year term of STAR Bonds. Several years later the first TIF project area will terminate and real property tax revenues will begin to be collected by the City and other taxing jurisdictions for the relevant project area. This will continue and, as each year goes by, more and more sales and real property taxes will be captured and retained by the City and other taxing jurisdictions. At Project

stabilization, the City’s 1.0% general sales tax, for example, could exceed $2,500,000 per year (not adjusted for inflation). By contrast, without the Project, the City will continue to collect a fraction of that amount in sales and property tax revenue per year. (Feasibility Study, STAR Bond Revenue Projections, p. vii-viii)

3. Timing for regional/national attraction to be constructed, opened, and stabilized

The Developer plans to construct the Performance Venue within the first five-year phase of development. Market studies are underway now to determine the exact nature of the Performance Venue structure, either as an open-air amphitheater, covered amphitheater, or fully-enclosed Performance Venue. The Developer is aware of the sound, light, and other applicable City ordinances and plans to comply with any such requirements. Based on other similar venues around the region and country, the venue would be stabilized within the first year or two of opening.

(d) Other project characteristics

1. Types of tenants and uses

- Office: regional and national relocations of corporate headquarters and back- offices; expansions of local companies that have outgrown the available capacity of their current facilities; and other small and large office users

- Performance Venue

- Retail/Restaurants: primarily full-service restaurants, specialty retailers, and clothing and accessory retailers

- Residential: high-quality for-rent and for-sale residential living targeting millennials and “empty-nesters”

- Hotels: three to four star boutique and full-service accommodations matching the ethos of the Project

(Feasibility Study, Summary of Major Findings, Market Impact Findings, Project Positioning and Unique Quality, pp. vi-vii)

2. Impact on City and other governmental services

- Traffic: The Developer has engaged a professional traffic engineer to study all possible traffic improvements needed in conjunction with the Project, which has been submitted to the City. Traffic improvements will include, for example, the widening of Antioch Road, certain improvements to 103 rd Street, and possible improvements to the I-435 and Antioch interchange.

- Police/Fire: As the Project builds-out over time, it seems likely that additional police and fire personnel and equipment will be necessary. Given the diverging and even conflicting “wisdom” on the formulas for life safety personnel and equipment

needs as development expands, the actual new police/fire needs triggered by the Project will have to come from the City’s Fire and Police Chiefs’ analyses. However, the Developer intends to work with the City to insure that any such marginal costs are offset in some way by the tax revenues generated by the Project.

- Schools: Given the target demographics of the development (millennials without school-age kids and “empty-nesters”) and the high-end nature and specs of the residential product, the Developer does not believe there will be many school kids living within the residential component of the Project. Therefore, while the school district will reap the benefits of higher taxes in the surrounding neighborhoods as redevelopment and reinvestment takes place in conjunction with the Project, the Project will generate very little marginal cost to the schools.

3. Impact on surrounding neighborhoods

As the Project brings billions of dollars in investment to the northern half of the City of Overland Park over the next decade and a half, reinvestment in the neighborhoods surrounding the Project will occur. It is anticipated that home values will increase as the City’s largest public park, as well as restaurants, shops, and a Performance Venue, become walkable from nearby neighborhoods. The existence of Leawood Town Center at 119 th and Roe has become an attractive amenity listed on many nearby residential property listings as a “bonus” for homebuyers. In Prairie Village demand for homes around Corinth Square Shopping Center has increased following substantial reinvestment and renovation through a Community Improvement District. The Plaza-area continues to be a sought after residential locale with its easy access to all that the Plaza has to offer. In all three of these cases, people want to live around these desirable community assets, ultimately feeding demand for the surrounding housing stock, which leads to higher property values. It is anticipated that the Project will have a similar effect on its surrounding neighborhoods, in addition to adding to the quality of life of residents who will have access to the Project’s many amenities.

4. Proposed zoning plan

The zoning application and accompanying plans were filed with the City on November 24, 2014.

(e) Integration / competition / collaboration with other businesses

1. Office

Johnson County supports a large office market totaling 22.7 million square feet of space, or 45 percent of the metro total, approximately 10 million square feet of which is in south Johnson County, including Overland Park.

While the amount of office building inventory in Overland Park and the rest of south Johnson County is impressive, there are formidable obstacles to growing the Class A

office inventory and putting the area in regular contention for large corporate relocations to, or expansions within, the City and County.

- Much of the existing office inventory is over 25 years old and not considered Class A quality space.

- Most large corporate office users require interstate frontage / access and other than the Subject Property, there are no readily available tracts of land along I-435 for new office construction.

- Class A occupancy rates in southern Johnson County continue to hover around 95%. 2 In addition, Overland Park’s primary Class A office buildings that have vacancy do not have more than, on average, 8,500 square feet of contiguous space. 3 Not only does this preclude the entry of a new corporate office user to the market, it also hinders the ability of growing companies that are based here now from expanding in one consolidated location, which can ultimately leave growing companies no choice but to relocate outside the State.

(Feasibility Study, Market Impact Study, Project Positioning and Unique Quality, pp. 46-47)

The approximately 3.8 million square feet of planned office on the Subject Property will, over the estimated 15-year build-out period, remove these primary barriers to Overland Park’s continued growth in the office market. The Project’s office space will offer corporate grade Class A office space suitable for large local, regional and national companies. As discussed above, office tenants will be attracted to the Project because of the convenient access and visibility via Interstate 435, ample on- site structured parking and presence within a prestigious, mixed-use, walkable urban center located in one of the country’s leading suburbs, with all of the safety, quality schools, affordable housing, and other key attributes of Overland Park.

While any time more product comes into a market, more competition will take place, the Project’s impacts on the existing office stock will not be in the context of a zero- sum game. Given the current deficiency in the Class A market, the Project’s highly desirable Class A space will land new corporate tenants that otherwise would not be in the market. Additionally, where existing businesses are expanding and growing out of their current space, such business’s relocation to the Project will provide a larger block of space in their existing building to allow current tenants to expand into that space (rather than leave the market), and midsize businesses to move into the existing Class A buildings where previously sufficient square footage was not available.

Without the Project, Overland Park’s ability to have substantial growth in the Class A, corporate headquarters and back-office space, will likely be stymied. There is no

2 Office Market Analysis entitled “Office Insight – Kansas City, Q3 2014,” Jones Lang LaSalle IP, Inc. 3 Inventory of Overland Park Class A office space with vacancy, prepared by Jones Lang LaSalle IP, Inc. (November 2014).

other large piece of I-435 frontage in the City capable of launching Overland Park into the next tier and generation of office development. The Project is positioned to draw out-of-town businesses to Overland Park, and to accommodate expansion of businesses currently here, not to compete with existing office stock and merely shift current businesses’ square footage to the Project with vacancy left behind.

2. Retail / destination / entertainment attractions

Performance Venue

The performance venue is designed to fill a void in the Kansas City market for a contemporary facility with a seating capacity of approximately 3,000 seats capable of accommodating a wide range of events such as concerts, theatre groups and Broadway show companies, symphony orchestras, opera, ballet, comedians and lectures. The planned venue will host performances not presently available in the local market.

The Project’s proposed 3,000 seat performance venue will allow events to come to Johnson County that are currently limited to the 3,000-seat Midland Theatre or the 2,402-seat Municipal Auditorium, both of which are older venues located in downtown Kansas City, Missouri. Moreover, given the age of the Midland Theatre and Municipal Auditorium, the Project’s performance venue will have the space, technology, and other features that should let events that have historically skipped the Kansas City market entirely add Overland Park to the tour list.

(Feasibility Study, Performing Arts Market Analysis, pp. 15-19)

Retail

Leveraging on visitation to the Project’s performance venue, hotels, office space and housing, the Project’s lifestyle and entertainment retail will support dining, entertainment and specialty shops. The market positioning of the lifestyle and entertainment retail component is well suited to capture the Kansas City area’s unmet retail demand and retail sales leakage now occurring in eating and drinking places, entertainment, clothing and accessories, and home furnishings.

Lifestyle centers and entertainment districts are occupied primarily by department stores, clothing and accessories, home furnishings, entertainment, and eating and drinking places. Each of these retail categories provides significant opportunities for capturing additional retail sales in the Kansas City MSA. Department stores are estimated to support an additional $825 million in annual sales in the Kansas City MSA. All segments of the clothing and accessories category are under retailed and forecast to support an additional $566 million in annual sales. Furniture and home furnishings are estimated to support an additional $298 million in annual sales. Annual sales of an estimated $608 million can be supported by eating and drinking places.

Annual retail sales leakage within the Kansas City MSA for such specialty retail categories as clothing and accessories, entertainment, and eating and drinking places is estimated at $1.19 billion. Lifestyle and entertainment space is estimated to garner approximately 30 percent of this retail sales leakage, or $358 million. The market positioning of the Project’s retail component is well suited to capitalize on this retail sales leakage. Feasible development of Phase 1 will require the capture of less than 17 percent of the estimated retail sales leakage for lifestyle and entertainment space in the Kansas City MSA.

The Kansas City MSA captures retail sales at a rate 12 percent higher than the averages for Kansas and Missouri and support the position that Kansas City is a regional shopping, dining and entertainment destination. While the gap has narrowed in recent years, in terms of retail pull the portion of the Kansas City MSA in Missouri outperforms the communities in Kansas.

Existing upscale retailers and restaurants in the Kansas City MSA are concentrated within six lifestyle centers and entertainment districts, of which three are located in Kansas. These lifestyle centers cater to the metropolitan area’s 2.1 million residents and 22.3 million annual visitors. Reported retail sales among these lifestyle centers run above industry averages, suggesting healthy market conditions and the ability to support additional development. The anticipated retail tenant mix of the Project will have little duplication to the nearby lifestyle centers of Town Center Plaza, Park Place, and Prairiefire. Additionally, Developer is conscious of the importance of not having a dilutive effect on Oak Park Mall and Corbin Park.

By concentrating on attracting national restaurant chains and upscale retailers not currently in the Kansas City market the Project is not expected to adversely impact sales of lifestyle centers and entertainment districts operating in the Kansas City MSA. In fact, development of the Project is anticipated to heighten the status Kansas and the Kansas City MSA as a regional tourism destination. By attracting increased out-of-town visitation and extending the length of stay of current visitors to the Kansas City MSA, the Project will create the opportunity for existing area retailers and restaurants to capture a share of the growing pool of tourism expenditures.

(Feasibility Study, Retail Marketability Analysis, pp. 20 -36)

3. Hotel / creation of overnight stays

The three hotels planned as part of the Project are designed to capitalize on the lodging demand generated by the Project’s entertainment, retail, and office components. At full build-out of the Project, the approximately 750 rooms across the three proposed hotels would not offer sufficient capacity to meet the estimated room demand. Thus, the Project is expected to increase room nights for area hotels, rather than taking room nights from existing hotels.

As discussed above, the synergies that are expected between the Project and the Overland Park Convention Center should have a profound impact on area hotels’ room nights, especially the Convention Center Hotel. In addition to the Convention Center, the Project will greatly enhance the City’s cluster of tourist destinations, including the soccer complex, Prairiefire, and Deanna Rose Farmstead, leading to higher visitation counts and, as a result, more room nights across the City.

(Feasibility Study, Lodging Market Analysis, pp. 37 -45)

4. Residential

The Project’s demographic focus is on millennials and “empty-nesters.” By and large, neither of these groups is finding in Overland Park the housing experience they are looking for. The result is that we are losing our children after high school or college to other communities across the United States that offer what they are looking for – living experiences that are walkable, offer entertainment, and provide convenient restaurant and retail experiences. “Empty-nesters” on the other hand want the same experiences, but are now forced to remain in their oversized/underutilized single-family homes in which they raised their children, move to villas that still do not offer anything in the way of walkability and convenient entertainment experiences, or seek Plaza-area apartment living or similar communities outside Kansas City.

In summary, the target market for the for-sale and for-rent residential units proposed as part of the Project is different than the target market for the current multi-family stock available in Overland Park. The residential Project is aimed at capturing a completely unmet demand with a first-of-its-kind supply of residential units to meet that demand.

(f) Visitation (at full build-out/stabilization)

1. Out-of-state visitation

Given the Subject Property’s close proximity to the Kansas-Missouri border, out-of- state residents are conservatively forecast to account for approximately 54 percent of total visitation to the Performance Venue, lifestyle and entertainment retail and hotels or 1.6 million annually. (Feasibility Study, Market Impact Study, Estimated Customer/Visitor Counts, pp. 51-53)

2. Visitation from beyond 100 miles

Regional visitors traveling more than 100 miles are conservatively estimated to account for 35 percent of total visitation, or approximately 1.0 million annual visitors. Annual regional visitation by Project component includes 56,700 visitors to the Performance Venue; 873,250 visitors to the lifestyle and entertainment retail and 104,000 visitors to the hotels. (Feasibility Study, Market Impact Study, Estimated Customer/Visitor Counts, pp. 50-53)

3. Total annual visitation

The Subject Property will support and host a critical mass of entertainment, recreational, shopping and dining attractions capable of serving as premiere visitor destination and draw from a local, regional and national geographic area. Annual visitation estimates for each of the Project’s components were drawn from industry standards.

Attendance for the Performance Venue was based on seating for 3,000 patrons, 160 event nights per year and average ticket sales for 80 percent of the seating capacity. Based on these assumptions, annual attendance for the Performance Venue is estimated at 384,000 patrons.

The 374,252 square feet lifestyle and entertainment retail is estimated to attract approximately 2,495,000 million annual visitors based on sales of $500 per square foot and average sales of $75 per customer (according to a report published by the ICSC on average shoppers of lifestyle centers spent $75.70 per trip).

Based on a stabilized occupancy rate of 70 percent, an average stay of three nights and an average of 2.5 persons per room, the 750 hotel rooms are estimated to host approximately 160,000 guests per year.

At build-out and stabilization, annual visitation to the Project’s Performance Venue, retail and lodging is estimated at approximately 3.0 million. These visitation estimates exclude employees and residents of the Subject Property. Based on unique and presently unavailable attractions in the Kansas City area, much of the visitation to the Subject Property is expected to be new visitors to Overland Park, Kansas. (Feasibility Study, Market Impact Study, Estimated Customer/Visitor Counts, pp. 51-53)

(g) Economic Impact -- Direct and indirect expenditures; job creation

1. Construction-Phase

The total estimated capital investment associated with the Project is approximately $2.7 billion. Infrastructure and building costs are estimated at more than $2 billion. Construction phase direct on-site employment associated with development of the Project District is estimated at 6,473 full-time equivalent jobs. Indirect job creation

is forecast at 11,511 jobs, bringing the total construction-phase work force to 17,984 jobs.

The Occupational Employment and Wage Estimates 2013 , published by the U.S. Department of Labor estimates annual median incomes in the Kansas City MSA of $23.02 per hour for construction occupations, $17.59 per hour for production and manufacturing occupations, $16.24 per hour for transportation and $16.89 per hour for other occupations. Total payroll originating from these construction-phase jobs is estimated at $688 million, resulting in total consumption expenditures of $443 million. (Feasibility Study, Economic Impact Study, Construction Phase, pp. 65-66)

Construction-Phase Economic Impact Project District

Project Economic Indicator Totals

Capital Investment $2,389,267,482 Infrastructure, Site Work and Building Costs $2,009,861,418

Full-time Equivalent Employment On-Site 6,473 Off-Site 1,020 Manufacturing 5,477 Trade/Transportation/Services 3,715 Others 1,298 Total Full-time Equivalent Employment 17,984

Payroll $688,249,198 Disposable Income $481,774,439 Consumption Expenditures $443,232,484 Shopping Goods $75,792,755 Convenience Goods $102,829,936 Other Consumption (i.e., Housing, Health, etc.) $264,609,793 Source: Canyon Research Southwest, Inc.; November 2014.

2. Operational-Phase

Full-time equivalent employment resulting from development and operation of the Project is estimated using employment rations stated in the number of jobs per 1,000 square feet of building area or per hotel room. This study applied full-time equivalent employment ratios of 0.50 jobs per full-service hotel room, 2.5 jobs per 1,000 square feet of retail space, 3.0 jobs per 1,000 square feet of restaurant space and 5.0 jobs per 1,000 square feet of office space.

Total payroll was estimated based on annual mean incomes pertinent occupations in the Kansas City MSA published by the U.S. Department of Labor’s Occupational

Employment and Wage Estimates May 2013. A sample of annual mean incomes include $46,000 for all occupations, $49,240 for food service managers, $43,470 for cooks and head chefs, $29,780 for first-line food preparation supervisors, $20,460 for food preparation and serving related workers, $25,130 for retail sales, $19,820 for cashiers, $39,470 retail store supervisors, $58,380 for lodging managers, $19,990 for hotel clerks, $20,040 for maids and housekeeping, $67,220 for business and financial operations, $75,630 for computers and $35,100 for office and administrative.

At full build-out, direct employment generated from operation of the retail, restaurant, hotel and office components planned for the Project Area is estimated to total approximately 20,000 full-time equivalent jobs and a total annual payroll of approximately $1.1 billion. (Feasibility Study, Economic Impact Study, Operational Phase, pp. 67-68)

Project District Operational-Phase Direct Employment & Payroll

Building # of FTE Annual Annual Project Component Area Rooms Jobs Wage Payroll

Lifestyle & Entertainment District Retail Shops 238,200 596 $25,000 $14,887,500 Restaurants 158,000 474 $27,500 $13,035,000 Full-Service Hotels 750 375 $22,000 $8,250,000 Professional Office 3,861,576 18,342 $60,000 $1,100,549,160

Grand Totals 19,787 $1,136,721,660

At full build-out and stabilized occupancy, the Project is estimated to attract 1.7 million out-of-state visitors annually generating direct expenditures of $397 million. The total economic impact to the State of Kansas associated with out-of-state visitor expenditures is estimated at $284 million annually, including $219 million in direct expenditures (industries directly providing goods and services to visitors) and $65 million in indirect expenditures (industries directly providing goods and services to tourism providers).

The Project is forecast to attract 867,760 annual out-of-state visitors from outside of 100 miles. Assuming 56 percent of travel parties will stay in hotels or motels (Kansas City MSA average for 2012); an average of 1.8 persons per guest room and an average length of stay of 3.0 nights, the Project will generate an estimated 485,945 guests and total demand for overnight accommodations of approximately 809,908 room nights. These lodging demand forecasts illustrate the significant impact the Project District will have on the Kansas City area hotel market and the potential to support additional hotel development.

(Feasibility Study, Economic Impact Study, Operational Phase, pp. 67-68)

(h) Long-term viability

1. Profitability

The Developer’s willingness to make an extraordinary investment in the Project is based on the track record of growth and stability in Johnson County and particularly Overland Park over the last half century. Investing in the future of northern Overland Park’s revitalization and continuation of the City’s history of a strong commercial foundation, joined with a solid housing stock and a dedication to public parks, the Developer believes this Project can be the catalyst for Overland Park’s next 50 years of success.

2. Status as a significant factor for travel decisions

See extensive discussion above.

(i) Quality of service and experience

See discussion above regarding the types of uses, vision for the interconnectedness of the mixed- use experience, and high-quality nature of the Project’s components.

EXHIBIT A

LEGAL DESCRIPTION

I-435 Mixed-Use Redevelopment Johnson County, Kansas Date: 11/04/2014

PROPOSED TIF DISTRICT DESCRIPTION

A tract of land over a portion of the Southeast Quarter of Section 1, Township 13 South, Range 24 East, and the Southwest Quarter of Section 6, Township 13 South, Range 25 East, and the Northwest Quarter of Section 7, Township 13 South Range 25 East, and the North half of Section 12, Township 13 South, Range 24 East, being more particularly described as follows: Commencing at the Northeast Corner of the Northeast Quarter of said Section 12, Township 13 South, Range 24 East; thence South 87°38’50” West, along the North line of said Northeast Quarter, a distance of 45.03 feet, to the Point of Beginning; thence North 02°13’34” West, departing said North line, a distance of 45.00 feet, to a point of intersection of the North Right- of-Way line of 103rd Street and the West Right-of-Way line of Antioch Road, as both are now established; thence North 87°53’46” East, departing said intersection, a distance of 110.00 feet, to a point of intersection of said North Right-of-Way line, and the East Right-of-Way line of Antioch Road, as now established, per plat of PINEHURST ESTATES – 4TH PLAT, a subdivision in the City of Overland Park, Johnson County, Kansas, recorded in Book 39 at Page 47; thence departing said intersection and along said North Right-of-Way line, the following calls: thence North 88°04’08” East, a distance of 235.26 feet; thence South 89°04’08” East, a distance of 100.12 feet; thence North 88°04’08” East, a distance of 2096.53 feet; thence South 02°12’31” East, departing said North Right-of-Way line, a distance of 80.00 feet, to a point of intersection of the South Right-of-Way line of said 103rd Street, and the West line of INDIAN CREEK VILLAGE, a subdivision in the City of Overland Park, Johnson County, Kansas, recorded in Book 32 at Page 24, as both are now established; thence continuing South 02°12’31” East, along said West line of INDIAN CREEK VILLAGE, and along the West line of INDIAN CREEK VILLAGE SECOND PLAT, a subdivision in the City of Overland Park, Johnson County, Kansas, recorded in Book 38 at Page 35, a distance of 2415.39 feet; thence South 87°48’08” West, departing said West line of INDIAN CREEK VILLAGE SECOND PLAT, along the North boundary line of a Tract of land recorded in a Deed in Book 6668 at Page 350, a distance of 840.00 feet; thence South 02°12’31” East, departing said North boundary line, along the West boundary line of said Tract, a distance of 195.00 feet, to a point on the South line of the Northwest Quarter of said Section 7; thence South 87°48’08” West, departing said West boundary line, along said South line of Section 7, and along the North Right-of-Way line of Interstate 435, a distance of 948.86 feet; thence departing said South line of Section 7, along said North Right-of-Way line of Interstate 435, the following calls: thence South 89°47’30” West, a distance of 223.86 feet, to a point on a non-tangent curve; thence Westerly and Northwesterly, along a curve to the right, having a radius of 1980.80 feet, a central angle of 03°53’47”, and whose initial tangent bearing is South 87°53’10” West, a distance of 134.71 feet, to a point of compound curvature; thence Northwesterly, along a curve to the right, having a radius of

4886.67 feet, and a central angle of 02°09’32”, a distance of 184.13 feet; thence South 89°15’33” West, departing said North Right-of-Way line of Interstate 435, a distance of 386.25 feet across said Antioch Road, to a point of intersection of said North Right-of-Way line of Interstate 435 and the West Right-of-Way line of Antioch Road, as now established; thence departing said North Right-of-Way line of Interstate 435, along said West Right-of-Way line of Antioch Road, the following calls: thence North 81°18’27” East, , a distance of 17.11 feet; thence North 67°27’33” East, a distance of 31.92 feet; thence North 11°54’41” East, a distance of 450.90 feet; thence North 00°19’06” East, a distance of 164.39 feet; thence South 57°33’56” West, departing said West Right-of-Way line of Antioch Road, a distance of 367.53 feet; thence North 76°56’04” West, a distance of 280.00 feet, to the Northeast corner of THE ORCHARDS 1ST PLAT, a subdivision in the City of Overland Park, Johnson County, Kansas, recorded in Book 58 at Page 10; thence South 79°48’56” West, along the North line of said THE ORCHARDS 1ST PLAT, a distance of 300.00 feet; thence South 70°48’56” West, continuing along said North line of THE ORCHARDS 1ST PLAT, a distance of 316.69 feet, to a point of intersection of said THE ORCHARDS 1ST PLAT and said North Right-of-Way line of Interstate 435; thence departing said North line of THE ORCHARDS 1ST PLAT, and along said North Right-of-Way line of Interstate 435, the following calls: thence continuing South 70°48’56” West, a distance of 98.31 feet; thence South 85°48’56” West, a distance of 260.00 feet; thence South 71°18’56” West, a distance of 200.00 feet; thence South 42°48’56” West, a distance of 72.59 feet; thence South 89°35’35” West, a distance of 148.02 feet; thence North 79°49’07” West, a distance of 115.58 feet; thence North 87°27’27” West, a distance of 171.58 feet; thence South 70°00’35” West, a distance of 156.63 feet; thence South 83°10’34” West, a distance of 158.09 feet; thence South 86°03’04” West, a distance of 110.45 feet; thence South 89°15’28” West, a distance of 141.24 feet; thence North 87°56’10” West, a distance of 587.40 feet; thence North 87°24’42” West, a distance of 200.76 feet; thence North 88°40’06” West, a distance of 106.46 feet; thence North 88°31’18” West, a distance of 93.31 feet; thence North 01°06’06” East, a distance of 19.85 feet; thence South 88°50’03” West, a distance of 172.99 feet, to a point of intersection of said North Right-of-Way line of Interstate 435 and the East line of WYCLIFF WEST, a subdivision in the City of Overland Park, Johnson County, Kansas, recorded in Book 31 at Page 30; thence North 02°11’40” West, departing said North Right-of-Way line of Interstate 435, along said East line of WYCLIFF WEST, a distance of 395.23 feet, to a point of intersection of said East line of WYCLIFF WEST and the Southerly line of Block 9 of WYCLIFF, a subdivision in the City of Overland Park, Johnson County, Kansas, recorded in Book 28 at Page 27 and in Book 26 at Page 26 and in Book 29 at Page 50 and in Book 34 at Page 2; thence South 44°12’10” East, departing said East line of WYCLIFF WEST, along the Southerly lines of Lots 39 and 38 in said Block 9, a distance of 240.87 feet, to the Southeast corner of said Lot 38; thence North 33°40’46” East, along the Easterly line of said Lot 38, a distance of 149.97 feet, to a point on a non-tangent curve, said point also being on the Southerly Right-of-Way line of West 106th Street, as now established; thence Southeasterly, departing said Easterly line of Lot 38, along said Southerly Right-of-Way line of West 106th Street, and along a curve to the left, having a radius of 290.00 feet, a central angle of 03°57’05”, and whose initial tangent bearing is South 52°12’38” East, a distance of 20.00 feet, to the Northwest corner of Lot 37 of said Block 9; thence South 33°29’44” West, departing said Southerly Right-of-Way line of West 106th Street, along the Westerly line said Lot 37, a distance of 153.52 feet, to the Southwest corner of said Lot 37; thence South 44°07’47” East, along the Southerly line of said Lot 37, a distance of 64.72 feet; thence South 89°09’33” East, along the Southerly lines of Lots 37 thru 27 of said Block 9, a

distance of 1115.16 feet, to the Southeast corner of said Lot 27; thence North 85°15’33” East, along the Southerly lines of Lots 26 and 25 of said Block 9, a distance of 225.93 feet, to the Southeast corner of said Lot 25; thence North 65°24’18” East, along the Southerly lines of Lots 24 thru 20 of said Block 9, a distance of 498.06 feet, to the Southeast corner of said Lot 20; thence North 83°04’39” East, along the Southerly lines of Lots 19 thru 11 of said Block 9, a distance of 907.46 feet, to the Southeast corner of said Lot 11; thence North 63°53’49” East, along the Southerly lines of Lots 10 thru 8 of said Block 9, a distance of 345.85 feet, to the Southeast corner of said Lot 8; thence South 70°47’38” East, along the Southwesterly line of Lot 6 of said Block 9, a distance of 168.92 feet, to the Southeast corner of said Lot 6; thence North 46°29’32” East, along the Southeasterly line of Lot 5 of said Block 9, a distance of 177.39 feet, to the Northeast corner of said Lot 5; thence North 16°03’30” West, along the Easterly line of Lot 4, of said Block 9, a distance of 169.49 feet, to the Northeast corner of said Lot 4; thence North 23°52’01” East, along the Easterly lines of Lots 2 and 1, of said Block 9, a distance of 279.81 feet, to the Northeast corner of said Lot 1; thence North 56°09’51” West, along the Northerly line of said Lot 1, a distance of 100.00 feet, to a point on the Easterly Right-of-Way line of Benson Street, as now established; thence North 56°18’45” West, departing said Northerly line of Lot 1 and said Easterly Right-of-Way line of Benson Street, a distance of 52.18 feet, to a point on the Westerly Right-of-Way line of Benson Street, as now established, said point also being on the Northerly line of Lot 1 of Block 5 of said WYCLIFF; thence North 56°12’13” West, departing said Westerly Right-of-Way line of Benson Street, along the Northeasterly lines of Lots 1 thru 3 of said Block 5, a distance of 299.35 feet, to the Northwest corner of said Lot 3; thence North 59°27’53” West, along the Northeasterly lines of Lots 4 thru 6 of said Block 5, a distance of 316.99 feet, to the Northwest corner of said Lot 6; thence North 66°56’09” West, along the Northeasterly lines of Lots 7 thru 15 of said Block 5, a distance of 956.86 feet, to the Northwest corner of said Lot 15; thence South 72°44’13” West, along the Northwesterly line of Lot 16 of said Block 5, a distance of 104.74 feet; thence South 43°54’01” West, along said Northwesterly line of Lot 16 and the Northwesterly line of Lot 17 of said Block 5, a distance of 184.70 feet; thence South 01°09’26” East, along the Westerly lines of Lots 17 thru 22 of said Block 5, a distance of 605.23 feet, to the Southwest corner of said Lot 22; thence South 05°29’35” West, along the Westerly lines of Lots 23 thru 25 of said Block 5, a distance of 266.58 feet, to the Southwest corner of said Lot 25; thence South 21°52’41” West, along the Westerly lines of Lots 26 thru 28 of said Block 5, a distance of 239.34 feet, to the Southwest corner of said Lot 28; thence South 50°59’47” West, along the Northwesterly lines of Lots 29 thru 31 of said Block 5, a distance of 224.57 feet, to the Northwest corner of said Lot 31; thence South 79°55’35” West, along the Northerly lines of Lots 32 thru 34 of said Block 5, a distance of 238.25 feet, to the Northwest corner of said Lot 34; thence North 89°09’03” West, along the Northerly lines of Lots 35 thru 43 of said Block 5, a distance of 900.45 feet, to the Northwest corner of said Lot 43; thence North 41°45’58” West, along the Northerly line of Lot 44 of said Block 5, a distance of 46.09 feet, to the Northwest corner of said Lot 44; thence South 31°50’21” West, along the West line of said Lot 44 of Block 5, a distance of 162.75 feet, to a point on a non-tangent curve, said point also being on the Northerly Right-of-Way of West 106th Street, as now established; thence Northwesterly, departing said West line of Lot 44, along said Northerly Right-of-Way line of West 106th Street, along a curve to the right, having a radius of 240.00 feet, a central angle of 04°46’37”, and whose initial tangent bearing is North 61°33’21” West, a distance of 20.01 feet, to the Southeast corner of Lot 45 of said Block 5; thence North 31°50’20” East, departing said North Right-of-Way line, along the Easterly line of said Lot 45, a distance of

168.98 feet, to the Northeast corner of said Lot 45; thence North 41°37’03” West, along the Northeasterly lines of Lots 45 and 46 of said Block 5, a distance of 82.05 feet, to the Northeast corner of said Lot 46; thence North 02°02’08” West, along the East line of Lot 47 of said Block 5, a distance of 80.36 feet, to the Northeast corner of said Lot 47; thence North 86°52’02” East, along the Southerly lines of Lots 49 thru 51 of said Block 5, a distance of 280.03 feet, to the Southeast corner of said Lot 51; thence North 87°51’23” East, along the Southerly lines of Lots 52 thru 58 of said Block 5, a distance of 726.24 feet, to the Southeast corner of said Lot 58; thence North 54°46’56” East, along the Southeasterly lines of Lots 59 and 60 of said Block 5, a distance of 252.83 feet, to the Southeast corner of said Lot 60; thence North 20°48’00” East, along the Southeasterly lines of Lots 61and 62 of said Block 5, a distance of 249.02 feet, to the Southeast corner of said Lot 62; thence North 02°10’22” West, along the Easterly lines of Lots 63, Tract “A”, 64 thru 70 of said Block 5 and Lot 30 of Block 3 of WYCLIFF, a distance of 1094.26 feet, to the Southwest corner of Lot 31 of said Block 3; thence North 87°53’49” East, along the Southerly lines of Lots 31 thru 37 of said Block 3, a distance of 569.72 feet, to the Southeast corner of said Lot 37; thence South 59°34’37” East, along the Southwesterly lines of Lots 16 thru 13, a distance of 580.42 feet; thence South 67°55’32” East, a distance of 578.10 feet, to the Southeast corner of Lot 5 of said Block 3; thence South 67°55’59” East, along the Southerly lines of Lots 4 thru 1 of said Block 3, a distance of 351.72 feet, to a point on said Westerly Right-of-Way line of Benson Street; thence South 29°04’48” East, departing said Westerly Right-of-Way line of Benson Street, a distance of 67.72 feet, to a point on the Easterly Right-of-Way line of said Benson Street, said point also being the Southwest corner of Lot 1 of Block 4 of said WYCLIFF; thence South 75°42’29” East, departing said Easterly Right-of-Way line of Benson Street, along the Southerly line of said Lot 1 of Block 4, a distance of 195.67 feet, to the Southeast corner of said Lot 1; thence South 02°14’31” East, along the West line of Lot 6 of said Block 4, a distance of 74.50 feet, to the Southwest corner of said Lot 6; thence North 87°51’14” East, along the Southerly line of said Lot 6, a distance of 180.13 feet, to a point on the Westerly Right-of-Way line of said Antioch Road, as now established; thence North 02°11’12” West, along said Westerly Right-of-Way line of Antioch Road, a distance of 784.98 feet; thence South 87°48’48” West, continuing along said Westerly Right-of-Way line of Antioch Road, a distance of 5.00 feet; thence North 02°11’12” West, continuing along said Westerly Right-of- Way line of Antioch Road, a distance of 255.00 feet, to a point of intersection of said Westerly Right-of-Way line of Antioch Road and said Southerly Right-of-Way line of West 103rd Street; thence North 02°13’34” West, departing said intersection, a distance of 45.00 feet, to the Point of Beginning, containing 9,234,327.40 square feet or 211.99 acres, more or less.

EXCEPT:

A tract of land over a portion of the Northwest Quarter of Section 7, Township 13 South Range 25 East, being more particularly described as follows: Commencing at the Northwest Corner of the Northwest Quarter of said Section 7, Township 13 South, Range 25 East; thence North 88°04’08” East, along the North line of said Northwest Quarter, a distance of 50.18 feet; thence South 01°55’52” East, departing said North line, a distance of 40.00 feet, to the Point of Beginning, said point also being on the South Right-of- Way line of 103rd Street, as now established; thence North 88°04’08” East, along said South Right-of-Way line, a distance of 158.71 feet; thence South 02°11’12” East, departing said South Right-of-Way line, a distance of 168.69 feet; thence North 88°04’08” East, a distance of 11.29

feet; thence South 02°11’12” East, a distance of 1156.30 feet; thence South 88°04’08” West, a distance of 190.00 feet, to a point on the East Right-of-Way line of Antioch Road, as now established; thence North 02°11’12” West, along said East Right-of-Way line, a distance of 1304.99 feet; thence North 42°56’28” East, continuing along said East Right-of-Way line, a distance of 28.22 feet, to the Point of Beginning, containing 249,641.11 square feet or 5.73 acres, more or less.

EXHIBIT B

Map of the Subject Property

49183665.6

EXHIBIT C

STAR BOND FEASIBILITY STUDY

See Attached

49183665.6

STAR BOND FEASIBILITY STUDY I-435 MIXED-USE PROJECT DISTRICT INTERSTATE 435 AND ANTIOCH ROAD OVERLAND PARK, KANSAS

November 2014

49183665.6

CANYON RESEARCH SOUTHWEST, INC. COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS

STAR BOND FEASIBILITY STUDY I-435 MIXED-USE PROJECT DISTRICT INTERSTATE 435 AND ANTIOCH ROAD OVERLAND PARK, KANSAS

October 2014

Prepared for: Overland Park Development Company, LLC 12321 Metcalf Avenue Overland Park, KS 66213

Prepared by: Canyon Research Southwest, Inc. 475 Ellicott Street #301 Buffalo, NY 14203

PR# 14-08-02

475 ELLICOTT STREET, SUITE 301 / BUFFALO, NY 14203 / (716) 551-0655 49183665.6

CANYON RESEARCH SOUTHWEST, INC. COMMERCIAL REAL ESTATE RESEARCH AND ANALYSIS

November 24, 2014

Chris M. Curtin Overland Park Development Company, LLC 12321 Metcalf Avenue Overland Park, KS 66213

RE: STAR Bond Feasibility Study Interstate 435 and Antioch Road; Overland Park, Kansas

Mr. Curtin:

Sales Tax Revenue (“STAR”) bond financing is being sought to assist in funding a portion of a large-scale mixed-use development proposed at the northeast and northwest corners of Interstate 435 and Antioch Road in Overland Park, Kansas (the “Project District”). The Project Plan utilizes New Urbanism planning concepts designing the 194-acre site as an integrated mixed-use urban center featuring retail, entertainment, cultural, professional office, hotel and residential uses. No such large-scale, dense urban center combining employment, retail, entertainment, recreation and housing exists on the Kansas side of the Kansas City MSA.

Pursuant to the STAR Bond Financing Act, Canyon Research Southwest, Inc. has prepared the attached STAR Bond Feasibility Study for the Project District. The study examines the viability of the proposed Project Plan as well as evaluates their impact on the Kansas economy and similar businesses in the project market area, quantifies out-of-state visitation and evaluates the project’s ability to remain profitable past the term of the STAR bonds.

Upon review of the report, should any questions arise or additional information requested, contact me directly at (716) 551-0655.

Respectfully submitted,

CANYON RESEARCH SOUTHWEST, INC.

Eric S. Lander, Principal

475 ELLICOTT STREET, SUITE 301 / BUFFALO, NY 14203 / (716) 551-0655 49183665.6

T A B L E O F C O N T E N T S

Page # Tab #

SUMMARY OF MAJOR FINDINGS ...... iii

INTRODUCTION ...... 1 1 Study Objective and Organization ...... 1 Project District ...... 4

MARKET STUDY ...... 7 2 Tourism Destination Market Analysis ...... 8 • Kansas City Area Attractions ...... 8 • Tourism Market Trends ...... 9 Performing Arts Market Analysis ...... 15 • Performing Arts Venues ...... 15 • Site Evaluation ...... 17 Retail Market Analysis ...... 20 • Lifestyle and Entertainment Center Concept ...... 20 • Kansas City Retail Market Overview ...... 22 • Kansas City MSA Retail Pull Factor ...... 27 • Kansas City MSA Retail Sales Gap Analysis ...... 28 • Retail Space Demand Estimates ...... 30 • Kansas City Area Upscale Retail Market ...... 31 • Site Evaluation ...... 34 • Conclusions ...... 36 Lodging Market Analysis ...... 37 • Competitive Hotel Market Trends ...... 37 • Site Evaluation ...... 42 Conclusions ...... 43

MARKET IMPACT STUDY ...... 46 3 Project Positioning and Unique Quality ...... 46 Synergy with Area Businesses and Attractions ...... 47 Impact on Comparable Market Area Businesses ...... 48 Estimated Customer/Visitor Counts ...... 50 Estimated Retail Sales Potential ...... 53 Impact on Active Kansas STAR Bond Projects ...... 59

ECONOMIC IMPACT STUDY ...... 65 4 Construction Phase ...... 65 Operations Phase ...... 67

STAR BOND REVENUE PROJECTIONS ...... 69 5 STAR Bond Revenues ...... 69 Canyon Research Southwest, Inc. ii 49183665.6

Supportable Bond Debt Coverage ...... 72 SUMMARY OF MAJOR FINDINGS

Sales Tax Revenue (“STAR”) bond financing is being sought to assist in funding a portion of a large-scale mixed-use development proposed at the northeast and northwest corners of Interstate 435 and Antioch Road in Overland Park, Kansas (the “Project District”). The Project Plan utilizes New Urbanism planning concepts transforming the 194-acre site as an integrated mixed- use urban center featuring retail, entertainment, cultural, professional office, hotel, residential and executive golf course uses.

As part of the STAR bond application process Canyon Research Southwest, Inc. has prepared a STAR Bond Feasibility Study on the Project District that addresses the various evaluation criteria outlined by the Kansas Secretary of Commerce. The study evaluates the impact of Project District upon similar businesses in the market area, quantifies out-of-state visitation, forecasts the project’s economic impact and evaluates the project’s ability to remain profitable past the term of the STAR bonds. The report’s major findings are summarized in the text below.

Market Study Conclusions

The Market Study section of the report evaluated the ability of the Project District to gain market share locally, regionally and nationally and to gain sufficient market share to: 1) remain profitable past the term of repayment and 2) maintain its status as a significant factor for travel decisions.

The Project District occupies a 194-acre site located on the northeast and northwest corners of Interstate 435 and Antioch Avenue in Overland Park, Kansas. The Project Plan calls for approximately 8.0 million square feet of commercial and residential space along with structured parking for 14,869 vehicles. The commercial components includes 3.9 million square feet of office space, 374,252 square feet of retail space and three hotels totaling 750 guest rooms. Residential development includes 2,608 for-sale and rental attached dwelling units. Mixed-use buildings will include office and residential over ground floor commercial space.

The Project Plan is designed to foster economic development for the Kansas portion of the Kansas City MSA by creating a unique mixed-use urban environment capable of generating increased out-of-town visitation and expenditures as well as create a major employment center offering Class A office space. A defining element of the Project Plan is an extensive open space network featuring green space, a natural stream system and two lakes that will be incorporated into the City of Overland Park’s existing trail system. The open space network will meander throughout the Project District, linking individual buildings and creating recreational opportunities and unique settings for urban development. Public access to the open space and complimentary mixed-use development will create a vibrant, pedestrian-oriented urban environment not currently available on the Kansas side of the Kansas City MSA.

The Project Plan incorporates several tourism-related components, including a amphitheater, lifestyle and entertainment retail, and full-service hotels. It is these project components that will generate retail sales tax revenues eligible for capture under STAR Bond Canyon Research Southwest, Inc. iii 49183665.6

legislation. The STAR Bond Feasibility Study evaluated the suitability of Project District to facilitate development of a amphitheater, lifestyle and entertainment retail and lodging uses.

Most of the existing performing arts venues in the Kansas City MSA are small, supporting a capacity of less than 2,000 seats. These venues principally host local productions and traveling acts with modest followings. Large venues include the 7,958-seat Starlight Theatre and 7,316-seat Municipal Auditorium Arena. The 18,500-seat Sprint Arena plays host to major national and international performers. Mid-size venues in the Kansas City MSA are limited to the 3,000-seat Midland Theatre and 2,402-seat Municipal Auditorium, both of which are older venues located in downtown Kansas City, Missouri.

The Project District is a feasible site for the operation of a mid-sized outdoor amphitheater, possessing a unique location within a major mixed-use urban center, access to a large metropolitan population and tourism market, and the necessary site access. There appears to be a void in the Kansas City market for a venue with a seating capacity of 2,000 to 3,000 seats capable of accommodating a wide range of events such as concerts, theatre groups and Broadway show companies, symphony orchestras, opera, ballet, comedians and lectures. Mid-sized event venues are limited to the 3,000-seat Midland Theatre and 2,402-seat Municipal Auditorium Music Hall, both of which are in downtown Kansas City, Missouri and were built in the 1920’s and 1930’s. While both venues have undergone considerable renovation, they lack the stage capabilities a new venue can provide. Also, Johnson County’s high income and white collar employment levels bode well for supporting above average expenditures on entertainment.

The Project District’s lifestyle and entertainment retail space that will be incorporated into multi- story, mixed-use buildings. To best capitalize on the market draw of the amphitheater and Johnson County’s high income levels, the Project District’s retail space is best suited to target high-end boutique retailers, upscale clothing and accessories stores, theme restaurants and entertainment venues. Eating and drinking establishment will occupy an estimated 35 to 40 percent of the retail space. The goal is to create a unique dining, entertainment and shopping destination leveraging off of the crowds drawn by the attractions as well as on-site office, hotel and residential components.

Six destination lifestyle centers and entertainment districts operate in the Kansas City MSA, the closest being Town Center Plaza and Park Place (2.5 miles) and Priariefire (5.5 miles). Country

Club Plaza and the Kansas City Power & Light District are the most comparable to the lifestyle and entertainment retail envisioned for the Project District. These developments illustrate the ability to support an expanded regional trade area through a unique tenant mix and association with major attractions. Despite the existing competition, a large number of national upscale

Canyon Research Southwest, Inc. iv 49183665.6

clothing, accessories, specialty retailers and restaurant chains are candidates for the Project

District.

The Project District is a feasible destination lifestyle and entertainment retail site, possessing access to a large tourism market and the necessary access, visibility, exposure and critical mass of retail space. The Project District’s attractions will supporting large visitor volumes and mixed-use design will provide the opportunity to attract a sufficient number of upscale retailers, restaurant chains and entertainment venues to support feasible development.

Concurrent with national hospitality trends, the Kansas City MSA hotel market suffered adversely from the economic downturn of the late 2000’s suffer a decline in demand, occupancies, room rates and revenue. Over the past several years the Kansas City MSA hotel market has rebounded posted strong gains in room demand, ADR, RevPAR and total lodging revenue. By 2013, the local market was operating at levels exceeding the pre-recession. With improving lodging market condition in the past several years new development opportunities are expected to materialize.

Most of the full-service hotels operating in the Kansas City MSA opened in the 1970s and

1980s and lack the level of amenities and services to be directly competitive to the 3-star and 4- star hotels planned for the Project District. Sources of on-site lodging demand include business and leisure travelers to the Kansas City area. In addition, the Project District is well positioned to capture room demand generated by the nearby Overland Park Convention

Center and 10 million square feet of office space in South Johnson County.

The Project District possesses the necessary location and site requirements to support future development of full-service hotels. The site offers an established lodging location, access to room demand generators and tourism amenities, adequate access and exposure, and presence with a destination project designed for a mix of retail, entertainment and office uses. Presence of the lifestyle and entertainment retail, large inventory of Class A office space and such unique project elements as a canal, lake, open space network and 9-hole golf course will establish the Project District as a major visitor destination.

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The Project District is a suitable development site for a mix of destination retail, hotel and cultural uses, possessing the necessary infrastructure, size, access, visibility, exposure, trade area demographics and tourism market. Kansas City’s status as a major tourism destination and business center and synergy with the nearby Overland Park Convention Center and Interstate 435 office corridor provides the opportunity to attract the necessary businesses and customers to support feasible development. The critical mass of cultural and retail attractions unique to the local market will create a regional destination catering to both local residents and out-of-town visitors. Therefore, this study concludes that the Project District qualifies as a major commercial entertainment and tourist area as defined by the Secretary of Commerce.

The Project District will provide an upscale mix of employment, retail, entertainment, lodging and residential components at an urban scale that will be the first of its kind in Kansas. Mixed-use projects on the Kansas side of the Kansas City MSA such as Park Place, Prairiefire and Village West do not support a dense urban context designed for the Project District. Wichita’s River District, Old Town and The Waterfront mixed-use developments also lack the density, size and character planned for the Project District.

The best comparison of the urban scale of development planned for the Project District is the Country Club Plaza in Kansas City, Missouri that supports dense urban development featuring 1.4 million square feet of office space, 900,000 square feet of retail and restaurants, nine totals totaling 1,900 rooms and structured parking for 6,400 vehicles. Annual visitation to the Country Club Plaza is reported at approximately 20 million with average retail sales exceeding $500 per square foot.

The Project District is designed as a major employment center with the nearly 3.9 million square feet of professional office space representing the single largest office development in Kansas. The nearby Corporate Woods with 3.2 million square feet of existing of planned office/hotel space is now the State’s largest office park. The Wichita MSA office market totals just 8.7 million square feet with no master planned office/business park coming close to the inventory of office space designed for the Project District.

Market Impact Study Findings

The Market Impact Study addressed the Project District’s market positioning and quality; synergy with area attractions; impact on comparable market area businesses and active STAR bond projects in Kansas; estimated customer/visitor volumes and forecast retail sales at build- out. Specifically, the Marketing Impact Study focused on these issues:

1. Project positioning and unique quality; 2. Project’s synergy with area attractions; 3. Impact on comparable market area businesses; 4. Expected draw of tourists from out-of-state and from more than 100 miles away; 5. Estimate the project’s retail sales at build-out; and 6. Impact on active STAR bond projects in the Kansas City, Kansas area.

Project Positioning and Unique Quality

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The Project District development plan creates an integrated mixed-use urban center featuring retail, office, hotel, cultural, residential and recreational uses. The principal “destination attractions” will include a amphitheater, open space network featuring canals, two lakes and open space as well as lifestyle and entertainment retail space. The Project District’s retail component is designed as a destination lifestyle and entertainment district targeting theme restaurants, entertainment venues, high-end, specialty retailers, and upscale clothing and accessories stores. National chain eating and drinking establishments will anchor the retail, offering unique “concepts” not currently available in the Kansas City MSA, creating destination attractions and minimizing direct competition with existing area businesses.

The 3.9 million square feet of planned office space will serve as a major economic engine for the Project District and Kansas. Johnson County supports a large office market totaling 22.7 million square feet of space, or 45 percent of the metro total. However, much of the existing inventory is over 25 years and not considered Class A quality space. The Project District will offer corporate grade Class A office space suitable for large local, regional and national companies. Office tenants will be attracted to the Project District because of the convenient access and visibility via Interstate 435, ample on-site structured parking and presence within a prestigious, mixed-use urban center. These attributes will make the Project District a highly desirable business address. The large employment base will also generate on-site demand for goods and services.

Three full-service hotels totaling 750 guest rooms are planned for the Project District. On-site lodging demand will originate from the out-of-town leisure travelers to the Kansas City area, business travelers generated from the office space and groups attending events at the conference center or nearby Overland Park Convention Center. The hotel will be a principal generator of out-of-town and out-of-state visitation to the Project District, enhancing on-site expenditures for food, beverages and entertainment.

The residential component will assist in creating a 24/7 active pedestrian environment for the Project District. The mix of attached for-sale and rental housing will cater to a broad base of residents including young professionals, couples and empty nesters. The residents will also generate demand for on-site goods and services.

assures a cohesive, integrated development while the architectural design will create an upscale urban environment. Together, the project’s uses, concepts and design will generate large visitor volumes, draw out-of-town travelers and enhance the Kansas City region’s status as a regional shopping, entertainment and business destination.

Synergy with Area Attractions

Much like business clusters, the clustering of destination tourism attractions creates the critical mass necessary to generate and sustain increased visitation and expenditures. Most tourism clusters also have strong linkages to other closely related and supporting industries such as transportation, lodging, retail, food and beverage. Tourism attractions have proven to leverage further tourism and economic opportunities. The larger cluster of tourism attractions a tourist destination supports the greater the direct and indirect economic benefits.

Strategically important tourism destinations and attractions have been used to further stimulate economic and social benefits. The common themes are:

• Offer a variety of experiences that meet the needs of a large and diverse visitor base; • Are located where there is an established cluster of activities and experiences that encourage longer stays and increased spending; • Enhance their uniqueness with high quality interpretation, positioning and marketing; • Are developed via disciplined and integrated plan; and • Have sufficient space to expand and to accommodate additional infrastructure development.

Tourism is increasingly seen as a catalyst for regional economic development with tourism destinations and attractions playing a major role. Research suggests that positive economic impacts and benefits of tourism attractions include:

• New event facilities and infrastructure; • Urban revival; • Enhanced reputation as a tourism destination; • Increased visitation and expenditures; • Improved public welfare and additional employment opportunities; • Local business opportunities; and • Increased publicity and prestige.

Kansas City is a regional tourist and family destination boasting a wide selection of shopping and host of sporting, gaming, recreational and cultural attractions. During 2012, the Kansas City area attracted an estimated 22.3 million out-of-town visitors, including over 18.5 million leisure travelers. Based on the theory of tourism clusters, the introduction of additional attractions in the Kansas City MSA will generate increased tourism visitation and expenditures.

The largest tourism attraction on the Kansas side of the metropolitan area is the Village West Tourism District located immediately west of the Project District. Village West is now home to the Kansas Speedway, Community America Ballpark, Sporting Park home to Sporting KC, Canyon Research Southwest, Inc. viii 49183665.6

Nebraska Furniture Mart, Cabela’s and Legends Outlet Center. Together, Village West and the adjacent Schlitterbahn Kansas City (both STAR Bond financed tourism-based projects) have created a critical mass of destination attractions that enhance Kansas City’s status as a regional tourist and family destination as well as generate larger visitor volumes, out-of-town travelers and visitor expenditures. By offering differing attractions the Project District will compliment the Village West and Schlitterbahn tourism destination.

Southern Johnson County also serves as a major destination for visitors to the Kansas City area. Principal visitor generators in Southern Johnson County include the Overland Park Convention Center, Prairiefire Museum, Carlsen Center and Nerman Museum of Contemporary Art on the campus of Johnson County Community College and such lifestyle centers as Town Center, Park Place and Prairiefire (a STAR Bond funded project). By offering differing attractions the Project District will compliment the existing visitor attractions operating in Johnson County.

The Project District’s principal destinations attractions of an amphitheater, hotel and conference center complex, lifestyle and entertainment retail and network of canals, lakes and open space offer cultural, retail, meeting space, entertainment and recreational facilities not currently available in the Kansas side of the Kansas City area. By virtue of differing content and market positioning the Project District will compliment and have a synergistic effect on Kansas City’s tourism industry and the heightened out-of-town visitation is expected to translate to increased attendance at existing entertainment, cultural, educational and historic attractions. As evident by the 22.3 million annual visitors to the Kansas City MSA and their corresponding $4.6 billion economic impact, the presence of a large cluster of entertainment, sporting, shopping, dining, art and cultural attractions creates a synergistic effect that strengthens the regional draw, visitation counts, expenditures and visitor’s length of stay.

The Missouri side of the Kansas City MSA garners the lion’s share of the region’s tourism market supporting the majority of tourist destinations and capturing 79 percent of total visitor spending. By increasing the critical mass of destination attractions the Project District will improve Kansas’ competitive position in the Kansas City market as a tourism destination as well as compliment the existing attractions by creating a “one-of-a-kind” cultural, entertainment, retail and recreational destination not currently available in the region.

Impact on Comparable Area Businesses

Retail businesses incorporated into the Project Plan addressed by this study include an amphitheater, lifestyle and entertainment retail and full-service hotels. This section of the study examined the impact of these project components upon similar cultural, retail and lodging businesses in the Kansas City MSA (i.e., that the project will increase total sales in the surrounding area, not diminish sales from existing retailers in the surrounding area).

The amphitheater is designed to fill a void in the Kansas City market for a contemporary venue with a seating capacity of approximately 3,000 seats capable of accommodating a wide range of events such as concerts, theatre groups and Broadway show companies, symphony orchestras, opera, ballet, comedians and lectures. The planned venue will host performances not presently available in the local market and strengthen the Kansas City area’s cultural community. Canyon Research Southwest, Inc. ix 49183665.6

Leveraging on visitation to the on-site amphitheater, hotels, office space and housing, the Project District’s lifestyle and entertainment retail will support dining, entertainment and specialty shops. The market positioning of the lifestyle and entertainment retail component is well suited to capture the Kansas City area’s unmet retail demand and retail sales leakage now occurring in eating and drinking places, entertainment, clothing and accessories, and home furnishings.

Annual retail sales leakage within the Kansas City MSA for such specialty retail categories as clothing and accessories, entertainment, and eating and drinking places is estimated at $1.19 billion. Lifestyle and entertainment space is estimated to garner approximately 30 percent of this retail sales leakage, or $358 million. The market positioning of the Project District’s retail component is well suited to capitalize on this retail sales leakage. Feasible development of Phase 1 will require the capture of less than 17 percent of the estimated retail sales leakage for lifestyle and entertainment space in the Kansas City MSA.

By concentrating on attracting national restaurant chains and upscale retailers not currently in the Kansas City market the Project District is not expected to adversely impact sales of lifestyle centers and entertainment districts operating in the Kansas City MSA. In fact, development of the Project District is anticipated to heighten the status Kansas and the Kansas City MSA as a regional tourism destination. By attracting increased out-of-town visitation and extending the length of stay of current visitors to the Kansas City MSA, the Project District will create the opportunity for existing area retailers and restaurants to capture a share of the growing pool of tourism expenditures.

The hotel will be a key component in the project’s appeal to leisure, business and group travelers and is warranted based on the site’s location in Overland Park, excellent access, proximity to lodging demand generators, and presence with a mixed-use development designed for retail, dining, entertainment and employment uses. The hotel is designed to accommodate new lodging demand generated by the project’s cultural attraction and on-site professional office space. Lodging demand generated by the Project District is expected to exceed the hotels’ capacity. Therefore, existing lodging properties in the area will benefit by capturing overflow lodging demand generated by the Project District.

The Project District’s retail, entertainment and lodging components have the potential to have a major positive impact on the operation of the Overland Park Convention Center and surrounding hotel properties. By providing convenient access to amenities attractive to meeting planners, corporate meetings, conventions, trade shows and social functions the Project District can aid in generating increased events and attendance at the Overland Park Convention Center and the number of associated room nights. Synergy between the Project District and Convention Center can be fostered through joint marketing and promotion, shuttles running between the two sites during major events, appropriate directional signage and more.

The Overland Park Convention Center offers 58,494 square feet of exhibition space, a 25,000 square foot ballroom and seven meeting rooms totaling 14,115 square feet, that when fully utilized have the capacity to accommodate up to nearly 22,000 guests in a single day. During 2013 the Overland Park Convention Center hosted 339 events and a total attendance of 306,487. Therefore, capacity exists to attract additional annual events and attendance.

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To conclude, the Project District is positioned to further enhance the area’s competitive positioning as a regional tourist and business destination. The high percentage of new sales captured by the Project District and the potential of the Kansas City MSA to support additional retail sales suggests minimal cannibalization of current retail sales. Furthermore, the Project District’s amphitheater, golf course and office space are expected to lure out-of-town visitors and generate increased lodging demand, not all of which will be satisfied by the planned on-site hotels. Development of the Project District will also benefit other related retail, entertainment and restaurant businesses by attracting additional out-of-town visitors and expenditures. Therefore, this report concludes that development of the Project District will not have an adverse impact on comparable market area entertainment, retail, dining and lodging businesses.

Forecast Customer/Visitor Counts

At build-out and stabilization, the Project District is estimated to attract approximately 3.0 million visitors per year. Local residents living within a 100-mile radius are forecast to account for 66 percent of total visitation, of which 40 percent are estimated to be out-of-state visitors. Regional visitors traveling more than 100 miles are forecast to account for the remaining 34 percent of total visitation, 80 percent of which will be out-of-state and international visitors. In total, out-of-state residents are estimated to account for approximately 54 percent of total visitation, or approximately 1.6 million visitors per year. These out-of-town visitation trend estimates meets the State of Kansas Secretary of Commerce guidelines that 30 percent of visitors to a prospective STAR Bond District travel beyond 100 miles and 20 percent reside out-of-state.

Project District Estimated Visitation Patterns

Out -of - Total State Market Visitor Origination Visitors Visitors Share

Within a 100-Mile Radius 2,004,150 801,660 40.0% Outside of a 100-Mile Radius 1,034,850 827,880 80.0% Totals 3,039,000 1,629,540 53.6 % Source: Canyon Research Southwest, Inc.

According to the Overland Park Convention & Visitors Bureau, from 2007 to 2013 annual tourism visitation to Overland Park has ranged from approximately 2.1 to 2.4 million visitors generating an economic impact of $741 to $937 million. These tourism trends suggest that the Project Area will have a major impact on visitation and expenditures to Overland Park.

Estimated Retail Sales

As depicted by the table on the following page, at build-out and stabilization the Project District is estimated to generate annual retail sales of approximately $296.6 million. Given the high level of retail sales leakage within the Kansas City MSA as well as the forecast growth in out-of-state Canyon Research Southwest, Inc. xi 49183665.6

visitation and spending an estimated 63 to 73 percent of the Project District’s gross sales will represent new spending, equating to approximately $187 to $216 million annually. An additional $234 to $254 million in annual expenditures generated by out-of-state visitors to the Project District will be captured off-site by businesses throughout the Kansas City area.

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Estimated Amusement, Retail and Lodging Sales for the Project District

Building # of Sales Per Gross Sales Land Use Sq. Ft. Rooms Sq. Ft. ADR Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Phase 1 Lifestyle and Entertainment Retail 374,252 $500 $187,126,000 $189,932,890 $192,781,883 $195,673,612 $198,608,716 $201,587,847

Phase 2 Amphitheater $30,720,060 $31,180,861 $31,648,574 $32,123,302 $32,605,152 4-Star Full-Service Hotel 300 Guest Rooms $275 $18,067,500 $20,640,750 $22,995,000 $23,339,925 $23,690,024 Food & Beverage $6,022,500 $6,880,250 $7,665,000 $7,779,975 $7,896,675

Phase 3 3-Star Full-Service Hotel 200 Guest Rooms $175 $7,665,000 $9,015,500 $10,220,000 $10,373,300 Food & Beverage $2,555,000 $3,005,167 $3,406,667 $3,457,767

Phase 4 3-Star Full-Service Hotel 250 Guest Rooms $175 $9,581,250 $11,269,2 80 $12,775,000 Food & Beverage $3,193,750 $3,756,4 27 $4,258,333

Totals Taxable Sales $187,126,000 $244,742,950 $261,703,744 $282,777,852 $290,504,292 $296,644,097 Source: Canyon Research Southwest, Inc.; November 2014.

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Impact on Active STAR Bond Projects

Since adoption of STAR bond legislation the Department of Commerce has approved three STAR Bond Project Districts in the Kansas City area that are actively developing. These projects include Village West and Schlitterbahn Vacation Village in Kansas City and Prairiefire in Overland Park. To determine the potential impact of the Project District on these active STAR Bond Districts, a comparison was made of each project’s major attraction(s); market positioning and target market. The possible synergy of these projects was also considered.

The Project District’s principal tourism attractions will be cultural, recreational, entertainment and retail oriented, highlighted by an amphitheater and an open space system including canals, lakes and a trail system. Complimentary uses will include retail, restaurants, lodging and a conference center.

Prairiefire at LionsGate’s major tourism attraction is an educational museum complimented by dining and nightlife entertainment. Given this distinctive market positioning, the Project District is not anticipated to have a negative impact on tourism visitation and retail sales at Prairiefire at LionsGate. In fact, the proximity of Prairiefire at LionsGate affords the opportunity to leverage off of the success of the Project District. The inclusion of an AMNH attraction and lifestyle retail will enable Prairiefire at LionsGate to serve as an alternative tourism destination, complimenting the attractions offered by the Project District. Together, the two attractions can foster strong synergy and heighten the status of greater Kansas City as one of the Midwest’s primary tourism destinations, resulting in increased out-of-town visitation, average length of stay and spending.

Village West and Schlitterbahn Vacation Village are located adjacent to each other at the intersection of Interstates 70 and 435 in Kansas City, Kansas. The tenancy of such entertainment venues as the Kansas Speedway, Sporting Park and Hollywood Casino, along with such retail destinations as Nebraska Furniture Mart, Cabela’s and Legends Outlets Kansas City, has created one of the Midwest’s largest entertainment and shopping destinations attracting 10 million visitors per year. Together, Village West and Schlitterbahn water park have created Kansas’ largest family-oriented tourism destination with the capability of attracting visitors from a 300+ mile radius. The size and diversity of these two attractions create the opportunity to extend visitors length of stay prompting visitation to other Kansas City area attractions. Completion of the National Training Center & Coaching Development Center will create another complimentary attraction and add to the regional/national draw and visitation volumes of the collective projects.

Because each active STAR bond project supports distinctly different major tourism attractions and market segments, it has been concluded that development of the Project District in Overland Park, Kansas will not have a measurable adverse impact on visitor volumes, retail sales volumes and STAR bond revenues generated by the Village West Tourism District and Schlitterbahn Vacation Village in Kansas City, Kansas or Prairiefire at LionsGate in Overland Park, Kansas. Therefore, the operation of the Project District is not anticipated to cause default in the payment of outstanding STAR bonds issued by Village West, Schlitterbahn Vacation Village or Prairiefire at LionsGate.

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Economic Impact Study Findings

Total capital investment for the Project District is estimated at approximately $2.4 billion. Construction phase direct on-site employment is estimated at 6,473 full-time equivalent jobs. Indirect job creation is forecast at 11,511 jobs, bringing the total construction-phase work force to 17,984 jobs. The construction phase total payroll is estimated at $688 million. Through build-out of the Project District the State of Kansas is estimated to collect approximately $20.8 million in income tax revenues.

At build-out, direct employment generated from operation of the retail, restaurant, hotel and office components planned for the Project Area is estimated to total approximately 20,000 full- time equivalent jobs and a total annual payroll of approximately $1.1 billion. The State of Kansas is estimated to collect individual income tax revenues of approximately $46 million per year resulting from direct operational-phase payroll.

At build-out and stabilized occupancy, the Project District is estimated to attract 1.6 million out- of-state visitors annually generating direct expenditures of $397 million. The total economic impact to the State of Kansas associated with out-of-state visitor expenditures is estimated at $284 million annually, including $219 million in direct expenditures (industries directly providing goods and services to visitors) and $65 million in indirect expenditures (industries directly providing goods and services to tourism providers).

The Project District is forecast to attract 827,880 annual out-of-state visitors from outside of 100 miles, generating total demand for overnight accommodations of nearly 772,000 annual room nights. At an average occupancy rate of 65 percent this level of lodging demand is sufficient to support approximately 3,250 hotel rooms. The Project District is planned for 750 hotel rooms, suggesting the potential of Kansas City area hotels to capture excess lodging demand.

To conclude, the Project District will contribute significantly to the state and local economy by generating construction and permanent jobs; attracting out-of-state visitors, spending and lodging demand; strengthening the Kansas City area’s status as a tourist destination; and yielding state income tax revenues.

STAR Bond Revenue Projections

Total development costs for the Project Area are estimated at approximately $2.4 billion. STAR Bond eligible project costs associated with the Project Area that include land acquisition, infrastructure, amphitheater and soft costs are estimated at approximately $360 million. Requested STAR Bond financing for the Project Area amounts to approximately $130 million.

Throughout the statutory 20-year STAR bond maturity period the net Sales Tax Special Obligation Bond revenues estimated for the Project District of $448 million are sufficient to fully satisfy approximately $185 million in bond debt amortized over a 20-year term at a 6.0 percent yield with a debt coverage ratio of 1.35. Canyon Research Southwest, Inc. xii 49183665.6

Project District Supportable STAR Bond Debt Estimates

Estimated Debt Present Net STAR Bond Coverage Value Present Year Revenue 1.35 6.0% Value

1 $13,501,141 $10,000,845 0.94340 $9,434,797 2 $17,658,204 $13,080,151 0.89000 $11,641,334 3 $18,881,925 $13,986,611 0.83962 $11,743,438 4 $20,402,422 $15,112,905 0.79209 $11,970,781 5 $20,959,885 $15,525,841 0.74726 $11,601,840 6 $21,402,872 $15,853,979 0.70496 $11,176,421 7 $21,723,915 $16,091,789 0.66506 $10,702,005 8 $22,049,773 $16,333,165 0.62741 $10,247,591 9 $22,380,520 $16,578,163 0.59190 $9,812,615 10 $22,716,228 $16,826,836 0.55839 $9,395,937 11 $23,056,971 $17,079,238 0.52679 $8,997,172 12 $23,402,826 $17,335,427 0.49697 $8,615,187 13 $23,753,868 $17,595,458 0.46884 $8,249,454 14 $24,110,176 $17,859,390 0.44230 $7,899,208 15 $34,471,829 $25,534,688 0.41727 $10,654,859 16 $24,838,906 $18,399,190 0.39365 $7,242,841 17 $25,211,490 $18,675,178 0.37136 $6,935,214 18 $25,589,662 $18,955,305 0.35034 $6,640,802 19 $25,973,507 $19,239,635 0.33051 $6,358,892 20 $26,363,110 $19,528,230 0.31180 $6,088,902 Total $185,409,291 Source: Canyon Research Southwest, Inc.; November 2014.

Based on the results of the revenue and debt service estimates, this report concluded that the Project District will generate sufficient Sales Tax Special Obligation Bond revenues to cover the anticipated debt service obligations for the requested STAR bond financing. Moreover, the revenue and debt amortization estimates suggest the requested STAR bond financing would be fully paid off prior to the 20-year maturity of the district. Without drawing from excess revenues and the reserve account the pay off period would be approximately 14 years. Drawing from excess revenues and the reserve account would further reduce the pay back period.

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STAR BOND FEASIBILITY STUDY I-435 MIXED-USE PROJECT DISTRICT INTERSTATE 435 AND ANTIOCH ROAD OVERLAND PARK, KANSAS

November 2014

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INTRODUCTION

Study Objective and Organization

Through Sales Tax Revenue (“STAR”) bonds as authorized by the STAR Bond Financing Act, K.S.A. 12-17,160, et seq. are being sought to assist in funding a portion of the proposed Project District (the “Project District”) located at the northeast corner of Interstate 435 and Antioch Road in Overland Park, Kansas. The 194-acre property is currently occupied by the Brookridge Golf & Fitness Club and plans call for redevelopment with a mix of retail, entertainment, cultural, professional office, hotel and residential uses. The 9-hole golf course on the west side of Antioch Road will remain. An aerial photo of the Project District and surrounding area is displayed on the following page.

STAR bonds provide Kansas municipalities the opportunity to issue bonds to finance the development of major commercial entertainment and tourism areas and use revenues received by the city and county from any transient guest taxes, local sales taxes and use taxes generated by the development to pay off the bonds. STAR bonds possess a 20-year term. In order to be considered a major commercial entertainment and tourism area, a proposed project must be capable of being characterized as a statewide and regional destination, and include a high quality innovative entertainment and tourism attraction, containing unique features which will increase tourism, generate significant positive and diverse economic and fiscal impacts and be capable of sustainable development over time. The STAR bond program in Kansas was scheduled to expire on July 1, 2012. In June 2012, Gov. Sam Brownback signed a bill reauthorizing the STAR bond program for another five years, with a sunset date of July 1, 2017.

The Kansas Secretary of Commerce ultimately approves the use of STAR bond proceeds within a STAR Bond Project District once the District is established by a governing body. The types of development projects eligible for STAR bond financing include:

• A project with at least a $50 million capital investment and $50 million in projected gross annual sales revenues.

• A project located outside of a metropolitan statistical area that has been found by the Secretary of Commerce to be in an eligible area under Tax Increment Financing (“TIF”) law and of regional or statewide importance.

• A major commercial entertainment and tourism area as determined by the Secretary of Commerce.

• Auto racetrack facilities, multi-sport athletic complexes, river walk canal facilities, historic theaters, Manhattan Discovery Center, Wyandotte County Schlitterbaln Project, museum facility, or a major motorsports complex in Shawnee County.

STAR bond legislation allows the governing body of a city to establish one or more special bond projects in any area in the city or outside of a city’s boundaries with the written approval of the

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county commission. However, each special bond project must be approved by the Secretary of Commerce, based on the required feasibility study, prior to utilizing STAR bonds.

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Project District

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Pursuant to the STAR Bond Financing Act, a STAR Bond Project Plan must be accompanied by a Feasibility Study that examines the impact of the proposed development or special bond project upon similar businesses in the project market area, quantifies out-of-state visitation, forecasts the project’s economic impact and evaluates the project’s ability to remain profitable past the term of the STAR bonds. According to Section 7 of the STAR Bond Financing Act the Feasibility Study should contain the following:

• Whether a STAR bond project’s revenue and tax increment revenue and other available revenue are expected to exceed or be sufficient to pay for the project costs;

• The effect, if any, a STAR bond project will have on any outstanding special obligation bonds payable from the revenues described in Section 10;

• A statement of how the jobs and taxes obtained from the STAR bond project will contribute significantly to the economic development of the state and region;

• Visitation expectations; the unique quality of the project; economic impact study; and integration and collaboration with other resources or businesses;

• The quality of service, and experience provided, as measured against national consumer standards for the specific target market;

• Project accountability, measured according to best industry practices;

• The expected return on state and local investment that the project is anticipated to produce;

• A statement concerning whether a portion of the local sales and use taxes are pledged to other uses and are unavailable as revenue for the project and, if the revenues are so committed, a detailed explanation of the commitment and the effect; and

• An anticipated principal and interest payment schedule on the bond issue.

The Market Study component of the Feasibility Study determines the ability of the STAR bond project to gain market share locally, regionally and nationally and the ability of the project to gain sufficient market share to:

• Remain profitable past the term of repayment; and

• Maintain status as a significant factor for travel decisions.

The Marketing Impact Study component of the Feasibility Study examines the impact of the special bond project upon similar businesses in the market area (i.e., that the project will increase total sales in the surrounding area, not diminish sales from existing retailers).

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Project District

The Project District consists of the Brookridge Golf & Fitness Club located at the northeast and northwest corners of Interstate 435 and Antioch Road in Overland Park, Kansas. An 18-hole golf course, clubhouse and drive ranging operate on the east side of Antioch Road with a 9-hole executive course and clubhouse to the west. The Project Plan calls for redevelopment of the 18- hole golf course totaling 138.5 acres while retaining the 9-hole executive golf course on 55 acres.

Drawing from New Urbanism planning concepts, the Project Plan is designed to create an integrated mixed-use urban center featuring retail, entertainment, cultural, professional office, hotel and residential uses. The tourism-based components include an amphitheater, lifestyle/entertainment retail and hotel/conference center.

New Urbanism is an urban design movement focused on creating a “sense of place” by promoting walkable, mixed-use neighborhoods containing a range of housing and job types. New Urbanism supports regional planning for open space, context-appropriate architecture and planning, and the balanced development of jobs and housing. These strategies are designed to reduce traffic congestion, increase the supply of affordable housing, and rein in suburban sprawl.

The organizing body for New Urbanism is the Congress for the New Urbanism, founded in 1993. Its foundational text is the Charter of the New Urbanism , which says:

We advocate the restructuring of public policy and development practices to support the following principles: neighborhoods should be diverse in use and population; communities should be designed for the pedestrian and transit as well as the car; cities and towns should be shaped by physically defined and universally accessible public spaces and community institutions; urban places should be framed by architecture and landscape design that celebrate local history, climate, ecology, and building practice.

The Project Plan calls for approximately 8.0 million square feet of commercial and residential space along with structured parking for 14,869 vehicles. The commercial components includes 3.9 million square feet of office space, 374,252 square feet of retail space and three hotels totaling 750 guest rooms. Residential development includes 2,608 attached for-sale and rental housing units. Mixed-use buildings will include office and residential over ground floor commercial space.

Preliminary Project Plan

Building Hotel Dwelling Parking Project Component Sq. Ft. Rooms Units Spaces

Office 3,861,576 Retail 374,252 Hotel 340,000 750 Residential 3,350,909 2,608 Canyon Research Southwest, Inc. 4 49183665.6

Club/Amenity 91,687 Parking Structures 4,906,770 14,869 Totals 12,925,194 750 2,608 14,869 A defining element of the Project Plan is an extensive open space network featuring green space, a natural stream system and two lakes that will be incorporated into the City of Overland Park’s existing trail system through the property. The open space network will meander throughout the Project District, linking individual buildings and creating recreational opportunities and unique settings for urban development. Public access to the open space and complimentary commercial development will create a vibrant, pedestrian-oriented urban environment not currently available in Johnson County or the remainder of the Kansas side of the Kansas City MSA.

Tourism plays a significant role in the Kansas economy, attracting an estimated 32 million visitors annually. A primary objective of the Project District is to foster economic growth for Kansas by creating a unique urban employment center and tourism destination capable of catering to a statewide and regional trade area. By elevating Kansas’ status as a regional tourism destination other related businesses and attractions in the area are expected to benefit from the opportunity to capture the increased visitation and spending generated by the Project District.

The Project Plan and Program Massing is depicted on the following page.

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MARKET STUDY

The Market Study portion of the report evaluates the ability of Project District to gain market share locally, regionally and nationally and the ability of the project to gain sufficient market share to:

• Remain profitable past the term of repayment; and

• Maintain status as a significant factor for travel decisions.

The Project District is designed as a mixed-use urban center featuring several tourism- related components, including a amphitheater, lifestyle and entertainment retail, and full-service hotels. It is these project components that will generate retail sales tax revenues eligible for capture under STAR Bond legislation.

The Market Study portion of the report evaluates the suitability of Project District to facilitate development of an amphitheater, lifestyle and entertainment retail and lodging uses. In doing so, the Market Study examines Kansas City’s tourism market and the ability of the local market to support additional cultural, retail and lodging facilities.

Kansas City is a regional tourist and family destination, drawing visitors from throughout the Midwest and beyond. The Tourism Destination Market Analysis section identifies major attractions operating in the Kansas City MSA as well as exams trends in visitation and spending for both Kansas and the Kansas City area. This analysis will assist in forecasting visitation levels for the Project District.

The Performing Arts Market Analysis surveys existing Kansas City entertainment venues with the goal of identifying an under-served market niche. A site analysis evaluates such criteria as the market area demographics, local tourism market, site access and visibility, influence of neighboring development and synergy with existing Kansas City area attractions.

The Retail Market Analysis evaluates the Kansas City retail market by identifying historical operating trends, retail sales; trade area pull factors and retail sales gaps. The competitive analysis surveys high-end specialty retailers and lifestyle centers operating in the Kansas City MSA. A site specific evaluation determined the ability of the Project District to accommodate retail development.

The Lodging Market Analysis identifies directly competitive hotel properties and historic operating trends in occupancy levels, ADR, RevPar, room demand and lodging revenues. The Canyon Research Southwest, Inc. 7 49183665.6

analysis concludes with a site specific evaluation to determine the ability of the Project District to accommodate development of the planned hotels.

Based on the findings of the Market Study the report determined the suitability of the Project District as a prospective location for future development and continued operation of cultural, lifestyle retail and lodging uses.

Tourism Destination Market Analysis

Kansas City Area Attractions

Kansas City is a regional tourist and family destination boasting a wide selection of shopping and host of sporting, gaming, entertainment, recreational and cultural attractions. Major art and cultural attractions include the Nelson-Atkins Museum of Art, Kauffman Center for the Arts, Kansas City Repertory and Lyric Theatre. Major cultural, family and sporting attractions operating in the Kansas City MSA are listed in the table below.

Kansas City Area Major Attractions

Attraction Location Art & Cultural Attractions Kansas City, Kansas City Repertory Theatre Missouri Kansas City, Kauffman Center for the Arts Missouri Kansas City, Kemper Museum of Contemporary Art Missouri Kansas City, Lyric Theatre (Kansas City Ballet) Missouri Kansas City, Nelson-Atkins Museum of Art Missouri Kansas City, Municipal Auditorium Music Hall Missouri Overland Park, Museum at Priariefire Kansas Overland Park, Nerman Museum of Contemporary Art Kansas

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Family Attractions Kansas City, Kansas City Zoo Missouri Kansas City, Oceans of Fun / Worlds of Fun Missouri Schlitterbahn Kansas City Kansas City, Kansas Kansas City, Science City @ Union Station Missouri Sealife Aquarium & LegoLand Discovery Kansas City, Center Missouri

Sports Venues Kansas City, Arrowhead Stadium (Kansas City Chiefs) Missouri Community America Park (Kansas City T- Bones) Kansas City, Kansas Explorers Stadium (Kansas City Kansas City, Exploreres) Missouri Independence Events Center (Missouri Independence, Mavericks) Missouri Kansas Speedway Kansas City, Kansas Kansas City, Kauffman Stadium (Kansas City Royals) Missouri Sporting Park (Sporting KC) Kansas City, Kansas Kansas City, National Collegiate Basketball Hall of Fame Missouri

In recent years several high-profile projects opened in the Kansas City area have produced a measurable increase in tourism visitation. The largest tourism attraction on the Kansas side of the metropolitan area is the Village West Tourism District located at the confluence of Interstates 70 and 435. Village West is now home to the Kansas Speedway, Community America Ballpark, Sporting Park home to Sporting KC, Nebraska Furniture Mart, Cabela’s and Legends Outlet Center. Located immediately east of Village West is the Schlitterbahn Kansas City water park. The Museum at Prairiefire recently opened within the Prairiefire development in Overland Park, Kansas. Village West, Schlitterbahn Kansas City and Prairiefire are all STAR bond projects.

New tourism attractions on the Missouri side include the $325 million Kauffman Center for the Performing Arts, a $135 million upgrade to the Kansas City’s Bartle Hall convention center, 18,500-seat Sprint Arena, College Basketball Experience, $200 million expansion to the Nelson- Atkins Museum of Art, Sealife Aquarium and LegoLand Discovery Center at Crown Center and the Kansas City Power & Light District that occupies a nine-block area downtown housing restaurants, night clubs, entertainment venues, shopping and offices.

Tourism Market Trends

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Tourism is the third largest industry in Kansas accounting for 4.4 percent of the Gross State Product. According to the Kansas Tourism 2011 prepared by IHS Global Insight, during 2011 over 32 million visitors to Kansas spent $8.03 billion. Out-of-state and international visitors accounted for 55.8 percent of total tourist expenditures with in-state residents, internal business travel and private investment accounting for the remaining 44.1 percent. In-state tourism expenditures were broken down by 21.7 percent from residents, 12.5 percent from internal business travel, 5.8 percent from investment and government and 4.1 percent resident outbound. The Kansas City and Wichita metropolitan areas serve as the State’s principal tourism destinations supporting a wide range of attractions, shopping and entertainment.

Kansas Tourism Expenditures by Source: 2011

Out-of-State In-State Resident Internal Business Travel Private Investment Government Spending Resident Outbound

The Kansas tourism market has rebounded from the national recession marked by recent increases in annual visitation and expenditures. Visitation had declined by 2.7 percent in 2008 and by another 8.6 percent in 2009. The declines in visitor counts resulted in lower expenditure levels, dropping by 4.5 percent in 2009 following a slight gain of 1.2 percent during 2008. By 2010, visitation was back on the rise increasing by 2.8 percent and by another 3.4 percent in 2011. Tourism expenditures reached $8.03 billion, up 10.4 percent in 2010 and 3.1 percent in 2011. During 2011, spending per visitor to Kansas averaged $236.

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Trends in Kansas Visitation 2002 - 2011 40,000,000

35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

During 2011, tourism expenditures in Kansas reached $7.56 billion (excludes construction, private investment and government spending) with shopping accounting for the largest share (28.0%). Combined with food and entertainment, these three expenditure categories represented 68.3 percent of total visitor spending, or $5.17 billion. The Northeast (Kansas City) and South-Central (Wichita) regions of Kansas captured the State’s highest levels of tourism expenditures, accounting for market shares of 43.9 percent and 27.3 percent, respectively.

From 2009 to 2011, tourism expenditures in Kansas rose 10.9 percent. Entertainment (16.1%); food & beverage (15.2%) and transportation (13.6%) reported the largest percentage gains in visitor expenditures. Since 2006, shopping expenditures have experienced a significant lose in market share, with food and entertainment expenditures remaining relatively steady.

Kansas Trends in Tourism Expenditures by Category

2006 % 2009 % Change 2011 % Change ($ ($ ($ Category Millions) Share Millions) Share 2006-09 Millions) Share 2009-11

Entertainment $1,130 16.1% $1,045 15.3% -7.5% $1,213 16.0% 16.1% Accommodations $800 11.4% $923 13.5% 15.4% $1,009 13.3% 9.3% Transportation $1,186 16.9% $1,216 17.8% 2.5% $1,381 18.3% 13.6% Food $1,670 23.8% $1,598 23.4% -4.3% $1,841 24.3% 15.2% Shopping $2,237 31.9% $2,039 29.9% -8.9% $2,120 28.0% 4.0% Totals $7,023 100.0% $6,821 100.0% -2.9 % $7,564 100.0% 10 .9% Source: IHS Global Insight. Canyon Research Southwest, Inc. 11 49183665.6

The Project District is located within the Kansas City MSA. According to the 2012 Economic Impact Study & Visitor Profile prepared by Tourism Economics, tourism has a profound impact on the Kansas City MSA generating 45,107 local jobs, direct expenditures of $2.8 billion, a total economic impact of $4.6 billion and $186.4 million in local tax revenue. Kansas City’s tourism market is supported by a wide selection of shopping, dining, sporting, gaming, recreational and cultural attractions. Kansas City’s central location within the Midwest affords convenient access to nearly 22 million people residing in Kansas, Missouri, Iowa, Nebraska, Colorado and Oklahoma.

Out-of-town visitation to the Kansas City area grew steadily from 2005 to 2008 reaching a high of 22.1 million visitors. Due largely to a weakening national economy, out-of-town visitation reached a low of 20.8 million visitors in 2009, a decline of 5.7 percent from 2008. In 2010, out- of-town visitation to the Kansas City area rebounded to an estimated 21.6 million visitors, up 3.7 percent from 2009. During 2011 and 2012 local out-of-town visitation continued to improve reaching 22.3 million in 2012, surpassing the pre-recession high posted in 2008.

Kansas City MSA Trends in Out-of-Town Visitors

22,500,000

22,000,000

21,500,000

21,000,000

20,500,000

20,000,000

19,500,000 2005 2006 2007 2008 2009 2010 2011 2012

During 2012, out-of-state (defined as living outside of Kansas and Missouri) and international visitors accounted for an estimated 56.5 percent of all visitors to the Kansas City area. Leading places of origin for visitors to the Kansas City MSA included Nebraska (5.7%); Iowa (5.5%); Oklahoma (4.9%) and Texas (3.6%). Overall, about one-third of overnight visitors originate between 200 and 300 miles away and over one-third travel more than 500 miles. Singles and parties of two adults accounted for 52 percent of all visitors while 13 percent of overnight visitors came to attend an event with 56 percent staying in hotels. These visitation patterns bode

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well for the opportunity of the Project District and its cultural, retail and lodging attractions to lure a large percentage of out-of-state visitors.

During 2012, over 18.5 million leisure travelers visited the Kansas City MSA with more than 9.0 million staying overnight. An estimated 84 percent of overnight leisure travelers arrived by automobile. The average length of stay was 3.44 nights, up from 2.98 nights in 2010. The average party size was 2.9 persons. The average age of a visitor to Kansas City was 41.8 years, down from 44.5 years in 2010. An estimated 56 percent of overnight leisure travelers stayed in a hotel, up from 47 percent in 2010. The daily spending by each overnight leisure traveler in 2012 averaged $122.43, up 11.2 percent from 2010.

During 2012, Kansas City also hosted 1.4 million overnight business travelers. The average per person expenditure of an overnight business traveler to Kansas City was $249 per day compared with $110 daily per overnight leisure traveler. Business and group travelers will represent a significant market for the Project District’s full-service hotels.

During 2012, visitor spending in the Kansas City MSA reached a record of $2.8 billion. The State of Kansas captured just 21 percent of total visitor spending with Missouri communities garnering 79 percent. Johnson County, Kansas where the Project District is located captured 17 percent of total visitors spending for 2012. The Project District is designed to make Johnson County and the State of Kansas more competitive and capture an increased share of out-of- town visitation and spending.

Visitor Spending by County, 2012 Kansas City MSA

Jackson, MO

Platte, MO

Johnson, KS

Clay, MO

Wyandotte, KS

0% 10% 20% 30% 40% 50% 60%

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According to the 2012 Economic Impact Study & Visitor Profile , the top activities of overnight leisure visitors to Kansas City included shopping (45%); dining (20%); casino (15%) and visiting historic site (15%). The high visitor counts, tourist characteristics and preferred activities provide the opportunity for the Kansas City MSA to support specialty retail, restaurants, entertainment venues and attractions.

Top 10 Activities of Kansas MSA Visitors

Shopping

Dining

Casino

Sw imming

Historic Site

Museum

Nightlife

Theme Park

Exhibit/Festival

Sporting Event

0% 10% 20% 30% 40% 50%

The Kansas City Convention & Visitors Association (KCCVA) booked a total of 232 conventions in 2013 for future years—a 10-percent increase from 2012. Collectively, these bookings will generate more than 305,000 room nights and infuse more than $254 million into the local economy. This represents year-over-year gains of 29 and 40 percent, respectively.

The portion of the Kansas City MSA in Kansas consists of the Counties of Franklin, Johnson, Leavenworth, Miami and Wyandotte. During 2011, tourism expenditures within these five counties amounted to $1.97 billion, up 10.3 percent over expenditures of $1.78 billion reported in 2009. Johnson County accounted for nearly 85 percent of tourism expenditures on the Kansas side of the Kansas City MSA, or $1.66 billion.

Tourism expenditures in the 5-county region for the year were led by shopping at $487.9 million, food and beverage at $395.3 million and entertainment at $386.1 million. These expenditure patterns bode well for the potential of the Project District to capture increased tourism dollars, particularly in the categories of shopping, food service and entertainment.

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The Project District is located within Johnson County which supports the tourism market on the Kansas side of the MSA border. In 2011 Johnson County garnered nearly 85 percent of total tourism expenditures in Kansas’ five-county region, or $1.66 billion. Visitor spending in Johnson County was led by entertainment at $416 million, shopping at $406 million and food at $366 million. Johnson County’s large tourism market and visitor expenditure patterns bodes well for the Project District’s cultural, retail, entertainment and lodging components to capture visitor expenditures.

Tourism Expenditures by Category Kansas City MSA (Kansas Only) – 2011

($ Expenditures Millions) Shoppin Entertainmen Lodgin County g Food t Transp. g Totals

Franklin $10.39 $9.21 $1.52 $4.92 $5.20 $31.24 $365.6 $1,660.3 Johnson $406.43 0 $416.09 $268.07 $204.19 9 Leavenwort h $7.30 $6.29 $8.88 $4.20 $3.51 $30.18 Miami $1.88 $1.83 $5.76 $1.32 $1.12 $11.90 Wyandotte $61.28 $57.95 $42.66 $41.10 $28.42 $231.42 $4 40.8 $1,965.1 Totals $487.28 8 $474.91 $319.61 $242.44 3 Source: HIS Global Insights, Inc.

The Project District is designed as a regional destination featuring a mix of cultural, entertainment, shopping, dining and conference center attractions. The Kansas City MSA is already a regional shopping and tourism destination and its cluster of arts, cultural and entertainment venues serve as major attractions for visitors. Annual out-of-town visitation to the Kansas City MSA has increased from 20.8 million in 2009 to 22.3 million by 2012, due in part to an improving national economy and the opening of several new tourism destination attractions. The Project District will compliment the Kansas City area’s existing cultural and entertainment attractions by providing another destination attraction, increased visitation and spending to the area and extending the stay of visitors. Just as important, the Project District will improve the competitive position of the Kansas portion of the Kansas City MSA, and garner a larger market share of the local visitor and tourism markets.

The multi-state region of Kansas, Missouri, Iowa, Nebraska, and Oklahoma is the source for most visitors to the Kansas City MSA. According to the U.S. Census Bureau, the July 2013 population for the 5-state region was estimated at 17.75 million, with Kansas accounting for just 16.3 percent, or 2.9 million. From April 2000 Census through July 2013 the population of the 5- state region increased by an estimated 281,542 residents.

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The primary trade area’s large and growing population provides a source for continued visitor growth to the Kansas City MSA. By providing cultural and entertainment attractions not currently available in the Kansas City area the Project District will have a positive impact on visitation, lodging demand and expenditures to the region.

Performing Arts Market Analysis

The Project District is designed to include an amphitheater capable of hosting a wide variety of entertainers. The performing arts venue will take one of three formats, including: 1) an open outdoor amphitheater; 2) covered outdoor amphitheater or 3) an indoor/outdoor amphitheater. The amphitheater is envisioned overlooking the south end of the large lake adjacent to a full-service conference hotel. This section of the report evaluates existing performing arts venues operating within the Kansas City MSA.

Performing Arts Venues

The live entertainment industry is very robust and 2013 was a record setting year for the industry, with growth expected to continue in 2014 and beyond. During 2013, Live Nation sponsored 22,852 concerts, sporting, arts and theater and family events and sold nearly 149 million totaling $9.35 billion. Broadway shows touring across North America drew attendance totaling 13 million. Due to the consolidation in the promotion business there has been a shift in the importance of venues that range from 500 to 5,000 seats since Live Nation and AEG have effective control of the talent that performs in large stadiums and arenas nationally. National, regional and local promoters use these smaller venues to attract a broad cross section of events that are very well attended and profitable.

Existing performing arts venues operating in the Kansas City MSA were surveyed in an effort to identify the competitive environment and potential unmet demand for the venue planned within the Project District. Principal venues identified in the table on the following page.

Kauffman Center for the Performing Arts

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The Kauffman Center for the Performing Arts is a multi-venue center for music, opera, theater and dance designed by Moshe Safdie that opened in downtown Kansas City, Missouri on September 16, 2011. Three of the region’s leading performing arts organizations – Kansas City Ballet, Kansas City Symphony and Lyric Opera of Kansas City – are in residence at the Kauffman Center. The Kauffman Center has two performance venues, including the 1,800-seat Muriel Kauffman Theatre and the 1,600-seat Helzberg Hall. The Kauffman Center is capable of hosting a diverse mix of entertainers and performances, including concerts, Broadway productions, comedy acts and more.

Arvest Bank Theatre at the Midland

Located in downtown Kansas City, Missouri within the Power & Light District, the original Midland Theatre opened in 1927. Following a renovation in 2008, AEG Live now manages the theatre’s entertainment bookings and operations. Since re-opening, such performers as Jerry Seinfeld, Kid Rock, Paul Simon, Bill Cosby, BB King, John Melloncamp, Willie Nelson, Roger Daltry, Jewel and Tony Bennett have played at the Midland. The Midland’s live- show capacity ranges from 1,300 to 3,000.

Kansas City MSA Performing Arts Venues

Seating Venue Capacity

Kaufmann Center for the Performing Arts Muriel Kauffman Theatre 1,800 Helzberg Hall 1,600

1,300 - Arvest Bank Theatre at the Midland 3,000

Kansas City Repertory Theatre Copaken Stage 319 Helen F. Spencer Theatre (UMKC) 630

James C. Olsen Amphitheater (UMKC) White Recital Hall 612

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Folly Theater 1,078

Gem Theater 500

Municipal Auditorium Music Hall Music Hall 2,402 Little Theatre 400

Off Center Theatre 244

Starlight Theatre (Open Air) 7,958

Carlsen Center at Johnson County Community College (Kansas) Yardley Hall 1,341 Polsky Theatre 424

James C. Olson Amphitheater

Located on the UMKC campus, the James C. Olson Amphitheater consists of the 630- seat Helen F. Spencer Theatre and 612-seat White Recital Hall. The venue is home to the Kansas City Repertory Theatre and UMKC Conservatory of Music and Dance.

Starlight Theatre

Opened in 1951, this 7,958-seat outdoor theatre hosts a variety of concerts and theater productions. Recent additions to the Starlight Theatre include indoor rehearsal halls, a gift store, expanded concessions and restrooms, an administrative office building and the 10-story, climate- controlled stage. In 2007, Starlight introduced all new seats, group party pavilions and a new north façade.

Municipal Auditorium

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Built in 1936, the Municipal Auditorium in downtown Kansas City, Missouri supports three venues, including the 7,316-seat Arena, 2,402-seat Music Hall and 400-seat Little Theatre. The venue was renovated in 2007 and now hosts music, theatre, ballet and opera events.

Carlsen Center

Located on the Johnson County Community College Campus in Overland Park, Kansas, the Carlsen Center contains Yardley Hall and the Polsky Theatre. Yardley Hall is the largest of the two theatres, with a total seating capacity of 1,341 divided into four levels. Yardley Hall is ideal for dance or music performances, offering excellent acoustics. The Polsky Theatre supports a seating capacity of 424 located on two levels. There is also a 60-seat recital hall.

In recent years two performing arts venues in the Kansas City area have closed. In 2011, the Lyric Opera of Kansas City, the Kansas City Symphony and the Kansas City Ballet moved their performances from the 3,000-seat Lyric Theater at 1029 Center Avenue in Kansas City, Missouri to the newly constructed Kauffman Center for the Arts. On August 25, 2013 the American Heartland Theatre located within Crown Center closed after more than 26 years in operation. The theatre opened on April 1, 1987 on Level 3 of the Crown Center Shops, hosting more than 160 productions. The theatre closed because it was no longer financially sustainable.

The Carlsen Center on the Johnson County Community College campus is the only major performing arts venue operating within the Kansas side of the Kansas City MSA, this despite the highest income levels in the region. All of the competing venues are located in or near downtown Kansas City, which for many people in the Kansas City area is not desirable place to be after dark. Johnson County is safe with low crime rates.

Performing arts venues are distinguished by their audience capacity (as measured by the number of seats) and their staging capacities. Facilities range in audience capacities from 20,000+ to venues with less than 400 seats, while staging capacities range from minimal to extensive. Extensive staging capacities, found in Broadway theatres, mixed-use venues and resident performing arts venues allow shows to use complicated sets, lighting and sound features, and backstage space.

Arenas with seating up to and exceeding 20,000 seats, while featuring state-of-the-art lighting and sound capabilities, do not offer traditional wing-space and backstage space. Arenas are more difficult to use for traditional theatrical productions and better suited for large-scale concerts. Multi-purpose venues with a seating capacity of 2,500 to 5,000 are best suited for

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Broadway productions, concerts, theatre, dance and other performers. These venues generally feature good acoustics, relatively high ceilings and average stage depth. Assembly halls and presentation venues of 400 to 2,500 seats are often simplistic with little backstage and wing- space, little depth to the stage and moderately high fly galleries. These venues are best suited for resident performing arts groups. Theatres of less than 400 seats are designed to be low cost venues and thus feature small stages with temporary seating.

Most of the existing performing arts venues in the Kansas City MSA are small, supporting a seating capacity of less than 2,000 seats. These venues principally host local productions and traveling acts with modest followings. Large venues include the 7,958-seat Starlight Theatre and 7,316-seat Municipal Auditorium Arena. The 18,500-seat Sprint Arena plays host to major national and international performers. Mid-size venues in the Kansas City MSA are limited to the 3,000-seat Midland Theatre and 2,402-seat Municipal Auditorium, both of which are older venues located in downtown Kansas City, Missouri.

Site Evaluation

The Project District was evaluated to determine the potential of supporting an amphitheater. Factors include:

1. Population Size and Age Distribution 2. Competitive Venues 3. Visitor Counts 4. Site Access 5. Surrounding Development

Trade Area Demographics

An amphitheater’s trade area population is critical in measuring demand. Pertinent demographics include population size, income, workforce characteristics.

The 2010 Census population of the Kansas City MSA was reported at approximately 2.4 million residents. By 2018, Esri (an international demographic research company) forecasts the Kansas City MSA population to increase by 4.8 percent to over 2.53 million. The median household income for the Kansas City MSA is $52,020 with 52.3 percent of households having an annual income of $50,000+. Johnson County’s median household income is $75,139.

The characteristics of a market’s workforce provide an indication of the ability to support expenditures on entertainment. Sectors such as finance, information and professional and business services produce jobs and income levels that support high expenditure levels on entertainment. According to the U.S. Department of Labor, as of July 2014 these sectors accounted for 26.8 percent of employment within the Kansas City MSA. Canyon Research Southwest, Inc. 20 49183665.6

Kansas City’s population size, demographics and workforce composition are favorable for supporting above average levels of entertainment expenditures and the potential to financially support an amphitheater.

Competitive Venues

Mid-sized performing arts venues throughout the country supporting a 2,000- to 3,000- seat capacity fill a market niche between large arenas and outdoor amphitheatres seating in excess of 10,000 and smaller privately owned theaters below the 1,500-seat range. This seating capacity improves the financially feasibility of the mid-sized venue by hosting a wide variety of acts, including musicians, comedians, Broadway shows, live theatre, dance, speakers and more. Mid-size venues in the Kansas City MSA are limited to the 3,000-seat Midland Theatre and 2,402-seat Municipal Auditorium, both of which are older venues in downtown Kansas City, Missouri.

Visitor Counts

According to the 2012 Economic Impact Study & Visitor Profile prepared by Tourism Economics, during 2012 over 18.5 million leisure travelers visited the Kansas City MSA with more than 9.0 million staying overnight. Families accounted for an estimated 40 percent of all travel parties to Kansas City. During 2012, visitor spending in the Kansas City MSA reached a record of $2.8 billion. Leisure travelers to Kansas City provide the Project District with a large potential market from which to draw from.

Site Access

Transportation access is a key variable in determining a community’s attractiveness as a destination for the potential users and audience of the performing arts events. The roadway network in the Kansas City MSA includes major arterial streets, highways and freeways. Interstates provide direct access to the surrounding metropolitan areas of Topeka, Wichita, Tulsa, Oklahoma City, Omaha and St. Louis. The Project Area is located adjacent to the Interstate 470 at Antioch Road and in close proximity to Interstates 35 and 470 and U.S. Highways 69 and 71, providing efficient neighborhood, metropolitan and regional access. On-site access is provided by the adjacent major arterials of 103 rd Street and Antioch Road. The Project District possesses adequate vehicular site access to support an amphitheater use.

Convenient airport access and level of service are also important in evaluating the suitability of a community to support a performing arts venue. Commercial air travel for the Kansas City MSA is provided by the Kansas City International Airport which serves eleven airlines. During 2013, the airport reported 99,114 air carrier operations and a total passenger count of over 9.6 million.

Surrounding Development

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The Project District is designed as a mixed-use urban center featuring 3.9 million square feet of office space, 374,252 square feet of retail and restaurant space, 750 hotel rooms and 2,608 housing units. This critical mass of attractions and commercial space will create a regional destination. In addition, the amphitheater is positioned adjacent to a large lake and conference hotel, creating a unique setting for concerts, live theatre and other performances.

Conclusions

This report concludes that the Project District is a feasible site for the operation of a mid-sized amphitheater, possessing a unique location within a major mixed-use urban center, access to a large metropolitan population and tourism market, and the necessary site access. There appears to be a void in the Kansas City market for a venue with a seating capacity of approximately 3,000 seats capable of accommodating a wide range of events such as concerts, theatre groups and Broadway show companies, symphony orchestras, opera, ballet, comedians and lectures. Mid-sized event venues are limited to the 3,000-seat Midland Theatre and 2,402-seat Municipal Auditorium Music Hall, both of which are in downtown Kansas City, Missouri and were built in the 1920’s and 1930’s. While both venues have undergone considerable renovation, they lack the stage capabilities a new venue can provide. Also, Johnson County’s high income and white collar employment levels bode well for supporting above average expenditures on entertainment.

Retail Marketability Analysis

The Project District is planned for 374,252 square feet of retail shop space that will be incorporated into multi-story, mixed-use buildings. By definition, the planned retail is a lifestyle/entertainment center. This section of the report evaluates the market viability of the Project District to sustain development of destination lifestyle and entertainment uses by evaluating local trends in retail sales, retail pull factors, and retail sales gap analysis. A survey of comparable lifestyle centers identifies prospective retailers for the Project District.

Lifestyle and Entertainment Center Concept

The Project District’s retail component is designed to cater to area tourists, visitors and residents by housing destination restaurants, entertainment venues and specialty retailers. Based on this market positioning and tenant mix, the Project District’s retail component is in theory a destination lifestyle and entertainment center. These shopping center concepts are described below based on definitions by the Urban Land Institute and International Council of Shopping Centers.

Lifestyle centers provide a new type of business locale for fashion department stores, high-end specialty retailers and restaurants who traditionally operated the majority of their stores in regional malls. Components of a lifestyle center include one or more fashion department stores or large specialty retailer and a large number of high-end specialty stores, restaurants and entertainment venues. Lifestyle centers maintain several clusters of similar retail categories such as entertainment (i.e., movie theatre and restaurants); home furnishings (i.e., furniture and Canyon Research Southwest, Inc. 22 49183665.6

linens); and fashion (i.e., apparel and cosmetics). Lifestyle centers have increasingly evolved into entertainment destinations, incorporating theme restaurants, nightclubs, cinemas, arcades, amusement centers, and entertainment spaces and streets. According to the International Council of Shopping Centers (“ICSC”) definition, lifestyle centers possess the following characteristics:

• Lifestyle centers have an open-air configuration and include at least 150,000 square feet of shop space in an outdoor setting occupied by department stores, high-end national chain specialty stores and theme restaurants. Retail categories most commonly represented are apparel, home goods, and books and music. Entertainment retailers such as a multiplex cinema and a large concentration of table-service restaurants are common; and

• Design ambience is critically important. Lifestyle centers possess amenities such as fountains and street furniture conducive to leisure-time visits and casual browsing. The retail layout and street pattern often reflect a “Main Street” type design.

The lifestyle and entertainment center concepts are increasingly being incorporated into mixed-use developments. The Project District is designed using the mixed-use concept by incorporating retail, restaurant, entertainment, hotel and professional office space.

In an effort to formulate an industry-wide definition for mixed-use development, the International Council of Shopping Centers, Inc. (ICSC), the National Association of Industrial and Office Properties (NAIOP), the Building Owners and Managers Association International (BOMA), and the National Multi Housing Council (NMHC), collaborated on a cross- organizational member survey to identify the characteristics among mixed-use developments. Though mixed–use is commonly defined as a project that features the mixing of at least three significant revenue-producing uses, i.e. retail, residential and commercial, today the definition represents a collection of components working together simultaneously—and the project may include a non-revenue-producing—though traffic-generating—element. Thus, as a result of the survey, the new working definition for mixed-use development for these four associations is:

A mixed-use development is a real estate project with planned integration of some combination of retail, office, residential, hotel, recreation or other functions. It is pedestrian-oriented and contains elements of a live-work-play environment. It maximizes space usage, has amenities and architectural expression and tends to mitigate traffic and sprawl.

Because of the unique market positioning lifestyle and entertainment centers create a retail destination catering to local residents, visitors and tourists. The retail trade area boundaries of destination lifestyle and entertainment centers are influenced by a variety of factors, including:

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• The size of the center and its tenant mix; • The number and size of the anchor stores; • The size and location of the nearest “sister” unit of the anchor store(s); • The area’s transportation system; • Site accessibility and travel times; • Size and draw of the local tourism market; and • The surrounding area’s population density and demographic characteristics.

Within a shopping center’s trade area, customers closest to the site affect the center most strongly, with customer influence diminishing gradually as the distance increases. Trade areas are usually divided into three categories or zones of influence, each of which is defined below.

Primary Trade Area : The primary trade area draws 70 to 80 percent of a shopping center’s regular customers. The Project District’s primary retail trade area is defined as the 2 million people residing within the Kansas City MSA.

Secondary Trade Area : The secondary trade area generates about 15 to 20 percent of a shopping center’s total sales. Out-of-town visitors attracted by the performing arts venue, shopping and entertainment represent the Project District’s secondary retail trade area. During 2012, the Kansas City MSA attracted 22.3 million out-of-town visitors, of which over 18.5 million were leisure travelers.

Tertiary Trade Area : The tertiary trade area forms the broadest area from which customers may be drawn. The tertiary retail trade area includes the approximately 8.9 million people residing within a 4-hour drive from the metropolitan Kansas City area.

The Kansas City MSA serves as a regional shopping and tourist destination. Coupled with a metropolitan population base of approximately 2.0 million and 22.3 million out-of-town visitors per year, the Project District’s lifestyle and entertainment retail possesses the opportunity to capitalize on a large trade area population and customer base.

Kansas City Retail Market Overview

Historic Market Trends

According to the Kansas City Retail Report 2014 published by Lane4 Property Group, by year-end 2013 the Kansas City MSA maintained approximately 64.2 million square feet of shopping center space. The suburban sub-markets of Southern Johnson County, Kansas (12.8 million), Northern

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Johnson County, Kansas (11.6 million square feet) and Eastern Jackson County, Missouri (10.9 million square feet) support the largest inventories of shopping center space. Given the size of the Kansas City MSA, most national big-box retailers maintain a presence.

Retail chains entering the Kansas City market in recent years include Bass Pro Shops, Books-a- Million, Crate & Barrel, Bonefish Grill, Life Time Fitness, Pei Wei, Sephora, Lucky Strikes Lanes, Sports Authority, Staples, Von Maur, Nordstrom Rack and Ross. Retailers recently closing stores or vacating the Kansas City market include Kmart, Sharper Image, Comp USA, Circuit City, Linens & Things, Borders, Steinmart and Best Buy.

With the recent completion of such upscale retail projects as the Kansas City Power & Light District in downtown Kansas City, Missouri and One Nineteen in Leawood, Kansas, several new restaurant chains have opened in the Kansas City MSA, including Gordon Biersch Brewery & Restaurant, Maker’s Mark Bourbon House & Lounge, PBR Big Sky, North and Sullivan’s Steakhouse. Specialty retailers entering the Kansas City market include H&M, Trader Joe’s, Nordstrom Rack, Saks Fifth Avenue Off 5 th , Michael Kors and Sur La Table.

National Retailers Operating in the Kansas City MSA

Discount Department Stores Electronics Auto Supply Kmart/Sears Grand Best Buy Auto Zone Target O’Reilly Auto Parts Wal-Mart Advanced Auto Parts

Department Stores Office Supply Sporting Goods Dillard’s Office Depot Dick’s Sporting Goods J. C. Penney Office Max Bass Pro Shops Kohl’s Staples Cabela’s Nordstroms Sports Authority Sears Linens/Home Store Macy’s Bed, Bathe & Beyond Hobby/Crafts Hobby Lobby Home Improvement Book Stores Michaels Home Depot Barnes & Noble Lowe’s Books-a-Million Clothing Gap Warehouse Clubs Old Navy Costco Pet Supplies Ross Sam’s Club PetsMart TJ Maxx Petco Stein Mart

The Kansas and Missouri Departments of Revenue reported taxable retail sales for the Kansas City MSA are on the rebound. In 2012, retail sales for the 9-county Kansas City MSA of $26.96 billion Canyon Research Southwest, Inc. 25 49183665.6

were up 2.2 percent over the prior year. For 2013, the local retail market stabilized, supporting a strong 7.2 percent increase in taxable sales to $28.88 billion. Jackson County, Missouri and Johnson County, Kansas accounted for 65 percent of the Kansas City MSA total taxable sales. Leading sectors for retail sales included general merchandise, gasoline stations, food and beverage, eating and drinking places, and building materials.

Kansas City MSA Taxable Sales Trends by County (Billions $)

Cass, MO

Platte, MO

Clay, MO

Jackson, MO 2011 Miami, KS 2012

Leavenw orth, KS 2013

Douglas, KS

Wyandotte, KS

Johnson, KS

$0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0

In response to an active new housing market from 2000 to 2007 new shopping center construction in the Kansas City MSA totaled approximately 16.4 million square feet of space built as several national retailers both entered the market and expanded. The growing suburban markets of Southern Johnson County, Kansas; the Northland region of Kansas City, Missouri; and Eastern Jackson County, Missouri supported the bulk of new shopping center construction.

During 2008, eight shopping centers completed construction within the Kansas City MSA totaling approximately 2.0 million square feet. Many of the new shopping centers were planned and under construction before the national economic recession hit in 2008. Major shopping centers completed included the 353,885 square foot Zona Rosa Phase 2, 620,437 square foot Tiffany Springs Marketplace and 155,000 square foot North Oak Village in the Northlands; 450,000 square foot Kansas City Power & Light District in downtown Kansas City, Missouri; and 160,000 square foot One Nineteen in Leawood, Kansas.

By 2009, the Kansas City MSA retail industry became increasingly impacted by declining economic conditions marked by growing unemployment, declining housing and stock values, and increasingly conservative consumer spending. The net result was a drop in the level of new retail construction to less than 1.0 million square feet. New shopping center construction came to a near standstill during 2010 with just 136,000 square feet of new space built. For 2011 new

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shopping center construction remained modest at approximately 150,000 square feet of newly completed space.

By 2013, in response to tight market conditions and an improving local economy several new retail projects broke ground, retailers opened new stores at an increasing rate and project financing became more obtainable. Urban and infill areas are becoming increasingly popular as both developers and retailers seek to take advantage of the dense populations and outdated shopping centers in need of renovation and redevelopment. Development in outlying suburbs is also on the rebound with most of the activity involving centers that were either coming out of the ground or planned as the recession hit.

The year-end 2012 average occupancy rate for Kansas City MSA shopping center space was reported at 89.15 percent. By year-end 2013 the metro-wide occupancy rate improved to 89.39 percent. Occupancies improved for all shopping center types and are the highest for lifestyle centers (98.3%) and power centers (92.2%).

Kansas City MSA Occupancy Rate Trends by Shopping Center Type

100.0%

95.0%

90.0% 2012 2013 85.0%

80.0%

75.0% Lifestyle Pow er Community Neighborhood Strip

For 2013, the average shopping center lease rate for the Kansas City MSA was reported at $12.86 per square foot triple-net. Lifestyle and power centers garner the highest average rent of $26.93 per square foot range. The lease rate for strip center space averages approximately $11.88 per square foot triple-net, $10.36 per square foot for neighborhood centers, $12.90 per square for community centers and $15.41 per square foot for power centers. The Central Kansas City ($18.63 per square foot); Southern Johnson County ($15.50 per square foot) and Northwest Kansas City ($13.39 per square foot) sub-markets support the metropolitan area’s highest shopping center lease rates.

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Retail Sub-markets

The Lane4 Property Group’s Kansas City Retail Report 2014 divides the Kansas City MSA into nine sub-markets. Year-end 2013 shopping center market conditions by sub-market are outlined in the table below.

Kansas City MSA Shopping Center Market OPERATING RESULTS BY SUB-MARKET; YEAR-END 2013

Space % of Occupancy Average Lease Sub-market Sq. Ft. Total Rate Rate

Northwest Kansas City 4,119,346 6.41% 94.8% $13.39 Northeast Kansas City 8,057,951 12.55% 91.5% $10.82 Central Kansas City 2,283,462 3.56% 95.1% $18.63 South Kansas City 5,144,929 8.01% 80.6% $11.04 Lee's Summit/Raymore/Belton 5,349,686 8.33% 89.4% $11.53 East Jackson County 10,905,404 16.98% 91.2% $10.96 Northern Johnson County 11,694,270 18.21% 90.5% $12.35 Southern Johnson County 12,847,717 20.01% 89.7% $15.50 Wyandotte County 4,028,092 6.27% 78.5% $11.13 Totals 64,215,246 100.00% 89.4 % $1 2.86 Source: 2012 Kansas City Retail Report; Lane4 Property Group.

The Project District is located at the southern boundary of the North Johnson County sub-market. Southern Johnson County is a mature retail market supporting nearly 11.7 million square feet of space operating at a healthy 90.5 percent occupancy rate. The 95 th and Quivira Corridor, home to Oak Park Mall, remains a robust retail node. One of two new Acadeny Sports recently opened on the south end of the mall. Construction has commenced on the new 349,000 square foot IKE store at the former Merriam Village Shopping Center site at I-35 and Johnson Drive. Opening is scheduled for Fall 2014.

The Project District is located immediately north of the South Johnson County, Kansas sub-market boundary. Boasting a median household income of nearly $90,000 per year and steady population growth, in recent years the South Johnson County, Kansas sub-market has long represented the Kansas City area’s most desirable retail location supporting the highest land values, lease rates and levels of new construction. The 119 th Street corridor serves as the primary retail destination with new retail construction in recent years focusing on the 135 th Street corridor. The South Johnson County sub-market supports the largest concentration of retail space in the Kansas City MSA with 12.8 million square feet of shopping center space operating at an 89.7 percent occupancy rate. Two active retail developments in South Johnson County include the adjoining Corbin Park and

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Priariefire at 135 th Street between Metcalf and Nail. Prairiefire is a STAR Bond financed project highlighted by the Museum at Prairiefire. The initial retail component opened in 2013 with the new-to-market REI and The Fresh Market. Meanwhile, the adjacent1.1 million square foot Corbin Park now boats Von Maur, JC Penney, Steinmart, Sprouts Farmers Market and Lifetime Fitness. A 220,000 square foot Scheel’s All Sports is currently under construction. The Central Kansas City sub-market is one of the most robust retail markets in the Kansas City metro area. By year-end 2013 the Central Kansas City sub-market supported 2.3 million square feet of shopping center space operating at a healthy occupancy rate of 95.1 percent. The Country Club Plaza area continues to thrive as a destination for high-end retail and dining in Kansas City while Crown Center, Westport, Crossroads and Kansas City Power & Light District markets are seeing substantial growth. The recent upturn in retail activity in Central Kansas City stems from continued new residential development and the influx of affluent households.

The Northlands region includes the portion of the Kansas City MSA situated north of the Missouri River and incorporates both the Northeast Kansas City and Northwest Kansas City sub- markets. In recent years strong new home construction and population growth have fueled accelerated retail construction within the Northlands. Collectively, by year-end 2013 these sub- markets accounted for 18.9 percent of the Kansas City area’s total inventory of shopping center space, or 12.2 million square feet, and were operating at an occupancy rate of 92.6 percent. The intersection of Interstate 35 and Highway 152 remains a hot stop for retail development in Northeast Kansas City with the Liberty Triangle supporting the construction of Hy-Vee, Dick’s Sporting Goods and several restaurants. The intersection of Interstate 29 and Highway 152 represents Northwest Kansas City’s principal retail destination.

By year-end 2013, the Jackson County, Missouri communities of Lee’s Summit, Raymore and Belton supported 5.3 million square feet of shopping center space, operating at a cumulative occupancy rate of 87.9 percent. Summit Woods and Summit Fair shopping centers remain as cornerstones to the retail marketplace in Lee’s Summit. The Belton/Raymore market is seeing substantial growth led by the relocation of Sam’s Club from Grandview to the Raymore Galleria site. In addition, Menards looks to move forward with a new store.

The Wyandotte County, Kansas retail sub-market occupies the western portion of the Kansas City MSA. After years of stagnant new retail construction activity the Wyandotte County retail market has been reinvigorated by the development of the 400-acre Village West Tourism District at the intersection of Interstates 70 and 435. Village West is anchored by Cabela’s, Nebraska Furniture Mart and The Legends Outlets at Village West. Sam’s Club, Walmart and Best Buy operate within the Plaza at Speedway. Village West has changed the face of Wyandotte County’s retail market by attracting several retailers and restaurants new to the Kansas City market. Opportunities at Village West remain ripe as the Cerner Corporation recently completed two mid-rise office towers. By year-end 2013 the Wyandotte County retail sub-market maintained 4.0 million square feet of shopping center space operating at a metro low average occupancy rate of 78.5 percent.

Conclusions

From 2000 to 2008, a strong local economy marked by population growth and rising income levels fueled a growing and prosperous retail market. Kansas City’s retail market experienced accelerated Canyon Research Southwest, Inc. 29 49183665.6

new retail construction activity, expansion of a host of big-box retailers and the entry of new retailers to the market. By 2009, the Kansas City MSA retail market entered into a correction phase that produced a 50 percent drop in new construction activity, declining average rents and escalating vacancies. The weakening economy prompted most national retailers to dramatically curtail new store development. The local retail market remained in a correction mode during 2010, marked by only a slight increase in retail sales and a continued drop in new construction activity, tenant expansion, lease rates and occupancies. By 2011 the Kansas City retail market began to stabilize with a notable increase in the overall occupancy rate and leasing activity. The recovery continued through 2013 marked by rising occupancies, increased retailer interest and an upswing in new construction. The recovery of the overall Kansas City MSA retail market is being led by such desirable submarkets as Southern Johnson County and Central Kansas City.

Kansas City MSA Retail Pull Factor

Pull factors measure a community’s ability to attract shoppers, residents and non-residents alike, to make retail purchases within the community. A pull factor is a measure of the strength of a community’s retail trade, based on a comparison of local spending in relation to that of a wider geographic area (e.g. the state), with a measure of 1.0 representing a perfect balance. A pull factor greater than 1.0 indicates that the community is pulling in retail sales from beyond its boundaries and the balance of trade is favorable. Alternatively, a pull factor less than 1.0 indicates that the community is experiencing retail sales leakage. Pull factors are calculated by dividing the trade area capture by the community’s population.

The County Trade Pull Factors for Fiscal Year 2012 published by Kansas State University and Retail Pull Factors 2010 published by the Missouri Department of Economic Development were consulted to determine the retail pull factor for the 11-county Kansas City, MSA. As the table below indicates the retail pull factor for the Kansas City MSA is estimated at 1.12 with the Missouri side performing at 1.14 and the Kansas side at 1.10. The overall pull factor indicates the Kansas City MSA captures retail sales at a rate 12 percent higher than the averages for Kansas and Missouri and support the position that the Kansas City MSA is a regional shopping, dining and entertainment destination.

Kansas City MSA Retail Pull Factors

Pull County Population Factor

Kansas

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Franklin 25,931 0.72 Johnson 552,991 1.28 Leavenworth 72,044 0.54 Linn 9,612 0.44 Miami 32,715 0.63 Wyandotte 158,224 0.92 Totals - Kansas 851,517 1.1 0

Missouri Cass 99,736 0.85 Clay 222,686 1.18 Jackson 674,953 1.15 Platte 89,726 1.44 Ray 23,461 0.49 Totals - Missour i 1,110,562 1.14 Grand Totals - Kansas City MSA 1,9 62,079 1.1 2 Source: Kansas State University and Missouri Department of Economic Development. The Project District is located within Johnson County, Kansas which boasts the highest pull factor of any county in the Kansas City MSA at 1.28. Johnson County’s 24.5 million square feet of shopping center space represents 38.1 percent of the metro-wide inventory. The Project District’s retail component will benefit from Johnson County’s strong retail draw.

Kansas City MSA Retail Sales Gap Analysis

The Project District’s retail component is designed for a mix of major retailers, specialty shops, restaurants and entertainment venues. The goal of this development concept is to retain retail sales from area residents and draw visitors from a regional trade area by creating a retail and entertainment environment not currently available in the Kansas City MSA.

The RMP Opportunity Gap – Retail Stores Report published by Claritas, Inc. attempts to identify opportunities for additional retail store types in the Kansas City MSA and the Project District. The report data is derived from two major sources. The demand data is derived from the Consumer Expenditure Survey published by the U.S. Bureau of Labor Statistics while the supply data is provided by the Census of Retail trade. The difference between demand and supply represents the opportunity gap or surplus available for each retail category in the specified reporting geography. When the demand is greater than the supply there is an opportunity gap for that retail category. A positive value signifies an opportunity gap, while a negative value signifies a surplus.

Exclusive of automobile sales, for 2013 the RMP Opportunity Gap – Retail Stores Report estimated supportable retail sales of $31.8 billion and actual sales of $28.9 billion for the Kansas City MSA, suggesting a retail sales opportunity gap of $2.9 billion.

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Lifestyle centers are occupied primarily by clothing and accessories, home furnishings, entertainment, and eating and drinking places. Each of these retail categories provides significant opportunities for capturing additional retail sales in the Kansas City MSA. All segments of the clothing and accessories category are under retailed and forecast to support an additional $566 million in annual sales. Furniture and home furnishings are estimated to support an additional $298 million in annual sales. Eating and drinking places are estimated to support an additional $608 million in annual sales. Additional under serviced specialty retail categories include grocery stores ($91.3 million); shoe stores ($90.3 million); book and music stores ($55.2 million); jewelry stores ($42.9 million); gift, novelty and souvenir stores ($27.7 million) and luggage and leather goods stores ($14.1 million).

The Project District will primarily target full-service restaurants, specialty retailers, and clothing and accessories retailers. The goal is to create a unique shopping and entertainment destination leveraging off of the crowds drawn by the on-site workforce, residents and entertainment venues. The Kansas City MSA retail market is currently under-serviced providing the opportunity for the Project District to support feasible near-term development of lifestyle and entertainment retailers. Given the unique and complementary market positioning, coupled with the local retail market’s ability to support a high level of new retail sales, development of the Project District’s retail component is anticipated to harmonize with Kansas City’s overall retail base and capture local and visitor sales.

RMP Opportunity Gap by Retail Category – Kansas City MSA

Demand Supply Opportunity Consumer Retail Categories Expenditures Retail Sales Gap/(Surplus)

Total MSA Retail Sales $31,833,889,025 $28, 883,400,000 $2,950,49 9, 025 Department Stores $2,474,840,713 $1,649,073,826 $825,766,887 Building Materials & Home Centers $3,181,819,685 $2,459,372,882 $722,446,803 Pharmacies & Drug Stores $1,989,876,600 $1,374,404,332 $615,472,268 Clothing & Accessories Stores $1,768,982,997 $1,203,047,590 $565,935,407 Furniture & Home Furnishings $765,680,689 $467,867,400 $297,813,289 Full-Service Restaurants $1,754,820,916 $1,463,358,463 $291,462,453 Limited-Service Eating Places $1,623,173,525 $1,499,863,756 $123,309,769 Grocery Stores $4,602,837,958 $4,511,517,981 $91,319,977 Shoe Stores $248,148,678 $157,851,109 $90,297,569 Sporting Goods Stores $277,597,672 $209,289,306 $68,308,366 Jewelry Stores $239,404,495 $196,466,472 $42,938,023 Office Supplies $224,996,078 $185,041,585 $39,954,493 Book Stores $150,109,993 $117,931,723 $32,178,270 Gift & Novelty Stores $173,663,788 $145,975,431 $27,688,357 Source: Claritas, Inc.

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Retail Space Demand Estimates

The Project District is designed to serve as a regional shopping and entertainment destination attracting local residents and out-of-town visitors. Retail sales and space demand will originate from two primary sources, the Kansas City MSA population and out-of-town visitors.

Supportable retail sales from local residents are a function of consumer population and income levels. The U.S. Census Bureau estimated the July 1, 2013 Kansas City MSA population at 2,080,469 residents and per capita income of $28,058 yields total personal income of $57.2 billion. Based on the findings of the U.S. Census Bureau Annual Retail Trade Survey and U.S. Department of Commerce, the purchasing power by the Kansas City MSA population was estimated at 45 percent of personal income, or $26.3 billion for 2013. By applying the retail pull factor for the Kansas City MSA of 1.12, retail sales attributed to both residents and out-of-town visitors are estimated at approximately $29.4 billion.

The Kansas and Missouri Departments of Revenue reported taxable retail sales for the Kansas City MSA at approximately $28.9 billion in 2013. Supportable retail sales are estimated at $29.4 billion, translating into retail sales leakage for the year estimated at $537 million. Based on Dollars & Cents of Shopping Centers , at the median retail sales rate for Midwest open-air shopping centers of $253 per square foot the estimated retail leakage is sufficient to support approximately 2.1 million square feet of additional retail space in the Kansas City MSA.

According to Esri Business Analyst, by 2018, the Kansas City MSA population is estimated to increase by 76,825 residents and the per capita income to $32,191. Based on population and income growth, by 2018 the Kansas City MSA is forecast to garner retail sales sufficient to support an additional 4.1 million square feet of retail space. Total current pent-up demand and future retail space demand exists within the Kansas City MSA to absorb the retail space planned for the Project District.

Kansas City MSA Retail Space Demand Projections

Growth Retail Sales Formula 2011 2013 -18

Resident Population – July 1, 2013 (U.S. Census) 2,080,469 76,825 Per Capita Income – 2013 (Esri Business Analyst) $28,058 $32,191 Total Personal Income $58,373,799,202 $2,473,073,575 % Income Spent on Goods & Food Services 0.45 0.45 Canyon Research Southwest, Inc. 30 49183665.6

Supportable Taxable Retail Sales by Kansas City MSA Residents $26,268,209,641 $1,112,883,109 Kansas City MSA Retail Pull Factor 1.12 1.12 Supportable Retail Sales by Out-of-Town Visitors $3,152,185,157 $205,191,136 Total Supportable Non-Automotive Retail Sales – Kansas City MSA $29,420,394,798 $1,246,429,082 Less: 2013 Kansas City MSA Taxable Retail Sales ($28,883,400,00) Potential Capture of Additional Non-Automotive Retail Sales $536,994,798 $1,246,429,082 Average Retail Sales Per Sq. Ft. $253 $305 Supportable Additional Retail Space (Sq. Ft.) 2,122,509 4,086,653 Source: Claritas, Inc. and Canyon Research Southwest, Inc. Kansas City Area Upscale Retail Market

The Project Plan includes approximately 374,252 square feet of retail space designed to support eating and drinking establishments, entertainment venues and specialty retailers. Envisioned as a destination lifestyle and entertainment retail district, the Project District will compliment Kansas City’s current retail base as well as the existing entertainment and cultural attractions.

Six destination lifestyle and entertainment centers/districts operate within the Kansas City MSA, including Country Club Plaza, Town Center Plaza, Park Place, Prairiefire, Zona Rosa and the Kansas City Power & Light District. These lifestyle and entertainment centers complement Kansas City’s tourism and convention industries and support a regional draw by creating unique shopping, dining and entertainment destinations. The Country Club Plaza has long served as the Kansas City area’s premier upscale shopping, dining and entertainment destination attracting 20 million annual visitors and retail sales exclusive of anchors exceeded $500 per square foot.

In terms of a dining and entertainment destination Country Club Plaza and the Kansas City Power & Light District are the most comparable to the lifestyle and entertainment district envisioned for the Project District. These developments illustrate the ability to support an expanded regional trade area through a unique tenant mix and association with major attractions. Country Club Plaza benefits from its prestigious image, large inventory of exclusive retailers and restaurants, and mixed-use environment while the Power & Light District benefits from its proximity to sports and cultural venues as well as the tenancy of “one-of-a-kind” restaurants, night clubs and entertainment venues not previously operating in the local market. The market positioning of these lifestyle centers and entertainment districts attracts local residents, tourists and area visitors as well as captures increased retail sales.

For purpose of identifying prospective retail tenants for the Project District, the table on page 32 provides a matrix identifying the major easting and drinking establishments and

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entertainment venues operating within the Kansas City area’s six lifestyle and entertainment centers while page 33 identifies clothing and accessories stores and specialty retailers.

Examples of restaurants and night clubs currently operating within Kansas City’s lifestyle centers and entertainment districts that could be prospective tenants for the Project District include Bo Ling’s, Buca di Beppo, Capital Grill, Cheesecake Factory, Fat Fish Blue, Granite City, Houston’s, Kona Grill, McCormick & Schmick’s, P.F. Chang’s, Ruth’s Chris Steakhouse and the Melting Pot. Examples of restaurants not operating in the Kansas City MSA include Benihana, Bahama Breeze, Baja Fresh, BJ’s Brewery, Claim Jumper, Fleming’s Prime Steakhouse, Quaker Steak & Lube and Saltgrass Steak House. Prospective entertainment venues include Cinemark Theaters, Warren Theatres, Harkin Theatres, Dave & Busters, Lucky Strikes Lanes, Pin-Up Bowl and the Improve Comedy Club

A large number of national upscale clothing and accessories and specialty retailers are candidates for the retail portion of the Project District. The Project District is located outside of the primary trade area for Zona Rosa, Kansas City Power & Light District and Country Club Plaza, allowing the opportunity to support “sister” stores. Potential apparel and specialty retailers include Abercrombie & Fitch, Charlotte Russe, Coach, Eddie Bauer, Forever 21, H&M, Hollister & Co., Lucky Brand Jeans, Limited, Old Navy, Tommy Bahama and Urban Outfitters.

Tenant Mix Comparisons of Lifestyle and Town Centers

Country Town Park Zona KC Power Prospective Retailer Club Plaza Center Place Prairiefire Rosa & Light Tenants

Eating & Drinking Establishments Abuelo's Mexican Food Embassy X X Bar Louie X X X Bo Ling's Chinese Restaurant X X X Bravo Cucina Italiana X X Bristol Bar & Grill X X Buca di Beppo X X California Pizza Kitchen X X Capital Grill X X Cheesecake Factory X X Chuy's Mexican Food X X Dean & Deluca X Drunken Fish Sushi X X 801 Chophouse X X Fat Fish Blue X X Florella's Jack Stack Barbecue X X Gordon Biersch X X Granite City Food & Brewery X X Hereford House X X Houlihan's X Houston's X X Kobe Japanese Steak & Seafood X X Kona Grill X X McCormick & Schmick's X X North Italia X O'Dowd's Little Dublin X X Canyon Research Southwest, Inc. 32 49183665.6

On the Border Mexican Café X Outback Steakhouse X X P.F. Chang's China Bistro X X RA Sushi X Rock & Brew X Ruth's Chris Steakhouse X Sullivan's Steakhouse X Sushi House X The Melting Pot X X The Newport Grill X Wasabi Sushi Bar X

Entertainment Alamo Drafthouse Cinema X AMC Theater X X Cinemark Palace X Cinetopia X Improv Comedy Club X Pinstripes X X Z-Strike Bowling X

Tenant Mix Comparisons of Lifestyle and Entertainment Centers (Continued)

Country Town Park Zona KC Power Prospective Retailer Club Plaza Center Place Prairiefire Rosa & Light Tenants

Apparel & Accessories

Abercrombie & Fitch X Aeropostale X X American Eagle Outfitters X X X Ann Taylor/Loft X X Anthropologie X X Baby Gap X X Banana Republic X X BCBG Max Azria X Brooks Brothers X The Buckle X X Cache X Charlotte Russe X X Chico's X X X Claire's Boutique X X Coach X X Coldwater Creek X X Dress Barn X DSW X X Eddie Bauer X X Express X X X X Forever 21 X X X Gap X X X Canyon Research Southwest, Inc. 33 49183665.6

Gap Kids X X X Guess X Hollister Co. X Hot Topic X X H&M X X Justice X J. Crew X X J. Jill X Jessica McCormack X Justice X Lane Bryant X X Lucky Brand Jeans X X Michael Kors X X New York & Co. X X Old Navy X X REI X Talbots X The North Face X X Tommy Bahama X X Urban Outfitters X X Vera Bradley X Victoria's Secret X X X White House/Black Market X X X To conclude, the comparable lifestyle centers in the Kansas City MSA support a regional trade area and complement the region’s tourism and convention industries by creating unique shopping, dining and entertainment destinations. These major community assets effectively retain retail sales previously exiting the region as well as capture new retail sales by attracting additional visitors to the region. Given the current market dynamics the opportunity exists for the Project District to support development of a lifestyle and entertainment retail district which will elevate the status of the Kansas City MSA as a shopping, entertainment, convention and tourism destination.

Site Evaluation

The Project District is designed for 374,252 square foot lifestyle and entertainment retail space. Shopping center developers and major retailers evaluate potential sites based on a series of site specific criteria. Common selection criteria when evaluating a lifestyle and entertainment center development site include visibility and exposure; accessibility; traffic counts; critical mass of retail space; synergy with major attractions; the area tourism market and direct competition. Using these site selection criteria the Project District was evaluated for the potential for support development of a destination lifestyle and entertainment retail district.

Visibility

Visibility and exposure have a significant influence on a shopping center’s achievable retail sales volumes. All shopping center types should possess major arterial frontage with lifestyle centers preferring a freeway or highway location. National and regional big-box retailer, restaurant, convenience store and bank chains also require major arterial frontage.

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The Project District site is located adjacent to Interstate 435 with major arterial street frontage onto both Antioch Avenue and 103 rd Street, satisfying the exposure requirement of major and junior anchors, eating and drinking establishments and specialty retailers.

Accessibility

Lifestyle centers and entertainment districts rely on an efficient regional transportation network that typically includes a mix of major arterial streets and freeways.

The Project District site is located adjacent to Interstate 435 with an interchange at Antioch Avenue. The site is also serviced by Interstate 35, U.S. Highways 69 and 71 and a grid pattern of major arterial streets, providing the necessary regional access to support lifestyle center and entertainment district development.

Traffic Counts

The vehicular traffic counts on arterial streets that flow past the site are important when evaluating a potential lifestyle center site. Average daily traffic counts past the Project District site were reported by the Kansas Department of Transportation in April 2014 at 147,000 vehicles on Interstate 435 and 13,460 vehicles on 103 rd Street. These high traffic volumes provide sufficient exposure for major and junior anchors, specialty retailers and restaurants. Critical Mass of Retail Space

Creating a vibrant destination lifestyle center or entertainment district requires building a sufficient critical mass of space. Most successful projects support a minimum of 150,000 square feet of retail space. For example, Country Club Plaza houses approximately 900,000 square feet of retail space, Kansas City Power & Light District totals approximately 450,000 square feet, Town Center is 610,287 square feet and Zona Rosa is 882,834 square feet. The preliminary master plan for the Project District calls for 374,252 square feet of retail space that is sufficient to create a critical mass of restaurant space, specialty shopping and entertainment venues.

Synergy with Major Attractions

The Project District’s primary attractions that will attract retail customers include the amphitheater, canal and lake system, open space network and 9-hole golf course. The Project District’s 750 hotel rooms, 3.9 million square feet of professional office space and 2,608 residential dwelling units will also generate considerable customer traffic and retail sales. The Project District will also benefit from close proximity to the Overland Park Convention Center and synergy with such Kansas City MSA attractions and cultural venues include Worlds of Fun/Oceans of Fun theme park, the Science City at Union Station, Kansas City Zoo, Nelson- Atkins Museum of Art and Priariefire Museum. The upscale retail centers in South Johnson County include Towne Center, Park Place, Prairiefire and Corbin Park.

Local Tourism Market

The unique tenant mix of lifestyle centers and entertainment districts contribute to an expanded retail trade area and cater heavily to out-of-town visitors. Canyon Research Southwest, Inc. 35 49183665.6

The Kansas City metropolitan area serves as a regional tourist destination. During 2012, the Kansas City MSA attracted an estimated 22.3 million out-of-visitors, of which 18.5 million were leisure travelers. The 9.0 million overnight leisure travelers spent an average of $122 daily per capita. These visitor counts to the Kansas City MSA and a population of approximately 8.9 million people within a 4-hour drive support a large number of upscale retailers, restaurants and entertainment venues.

Competition

Destination lifestyle centers and entertainment districts are occupied primarily by clothing and accessories, home furnishings, entertainment, and eating and drinking places. Most tenants are national or regional. Six destination lifestyle centers and entertainment districts operate in the Kansas City MSA, the closest being Town Center Plaza and Park Place (2.5 miles) and

Priariefire (5.5 miles). Despite the existing competition, a large number of national upscale clothing, accessories, specialty retailers and restaurant chains are candidates for the Project

District.

Site Evaluation Conclusions

This report concludes that the Project District is a feasible destination lifestyle and entertainment center site, possessing access to a large tourism market and the necessary access, visibility, exposure and critical mass of retail space. The Project District’s attractions will supporting large visitor volumes and mixed-use design provide the opportunity to attract a sufficient number of upscale retailers, restaurant chains and entertainment venues to support feasible development. Synergy with existing lifestyle centers and entertainment districts in South Johnson County will create a shopping and entertainment destination catering to local residents and out-of-town visitors.

Conclusions

The Project District’s retail component is planned for 374,252 square feet of destination lifestyle and entertainment retail space. The project’s principal “destination attractions” will originate from its mixed-use design, including an amphitheater, canal and lake system, open space network and 9-hole golf course. The Project District’s 750 hotel rooms and conference space, 3.9 million square feet of professional office space and 2,608 residential dwelling units will also generate considerable customer traffic and retail sales.

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Destination lifestyle centers and entertainment districts offer a combination of entertainment, dining and retail – the “trinity of synergy” – within a pedestrian-oriented and multi-use environment. That these retail components act independently but in a complementary way, draw customers from a variety of overlapping markets, is what distinguishes destination lifestyle centers and entertainment districts from other shopping center formats. What sets the

Project District apart from most lifestyle centers/districts operating in the Kansas City MSA is the inclusion of a cultural venue as the destination attraction, complimented by an extensive waterway and open space network and a mix of office, hotel, conference center and residential uses. The Project District is most comparable to the Country Club Plaza in Kansas City,

Missouri which serves as the region’s premiere upscale shopping, dining and entertainment district.

To best capitalize on the market draw of the amphitheater and Johnson County’s high income levels, the Project District’s destination lifestyle and entertainment retail space is best suited to target high-end boutique retailers, upscale clothing and accessories stores, theme restaurants and entertainment venues such as a multi-screen movie theatre. Eating and drinking establishment will occupy an estimated 35 to 40 percent of the retail space. The goal is to create a unique dining, entertainment and shopping destination leveraging off of the crowds drawn by the attractions as well as on-site office, hotel, conference center and residential components.

Given the unique and complementary market positioning, coupled with the local retail market’s ability to support a high level of new retail sales, development of the Project District’s destination lifestyle and entertainment retail space is not anticipated to adversely impact Kansas City’s existing lifestyle and entertainment centers. In fact, development of the Project District is anticipated to heighten the status of the Kansas City MSA as a regional tourism destination by offering a unique attraction not found anywhere else in the Midwest. Canyon Research Southwest, Inc. 37 49183665.6

The Project District is a feasible destination lifestyle and entertainment retail site, possessing access to a large tourism market and the necessary access, visibility, exposure and critical mass of retail space. The Project District’s attractions will supporting large visitor volumes and mixed-use design provide the opportunity to attract a sufficient number of upscale retailers, restaurant chains and entertainment venues to support feasible development. Synergy with existing lifestyle centers and entertainment districts in South Johnson County will create a shopping and entertainment destination catering to local residents and out-of-town visitors.

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Lodging Market Analysis

The Project District master plan includes three full-service hotels totaling 750 guest rooms. Two hotels are planned along the south side of the main lake and will share a conference facility. This section of the report evaluates the feasibility of the planned lodging uses by gauging the competitive hotel market operating trends and preparing a site selection evaluation.

The full-service hotel segment is generally defined as “a hotel that provides a wide variety of facilities and amenities, including food and beverage outlets, meeting rooms, business center and recreational amenities”. Examples of full-service hotel chains include Hilton, Hyatt, Marriott, Sheraton and Westin.

Competitive Hotel Market Trends

The full-service hotels planned for the Project District are designed to capitalize on the lodging demand generated by the project’s entertainment, retail and conference center components. Given the market positioning of the proposed hotels, this section of the report identifies comparable full-service hotel properties operating in the Kansas City MSA, outlines historic hotel market trends for the Kansas City MSA and evaluates the viability of the Project District to facilitate hotel development. Competitive hotel market trends data was purchased from Smith Travel Research, an independent research firm that compiles data on the lodging industry.

FULL-SERVICE HOTEL PROPERTIES

The competitive market analysis includes a survey of full-service hotels operating in the Kansas City MSA. As identified in the table on the following page, according to Smith Travel Research, 19 full-service hotel properties operate within the Kansas City MSA totaling 6,949 guest rooms. The majority of the hotel properties are located within Country Club Plaza; downtown Kansas City, Missouri; the Kansas City International Airport; and Overland Park, Kansas. Most of the full-service hotels opened in the 1970s and 1980s and lack the level of amenities and services to be directly competitive to the 3- star and 4-star hotels planned for the Project District.

Four full-service hotel properties totaling 1,358 rooms operate in Overland Park, including the Doubletree by Hilton, Embassy Suites, Marriott Overland Park and Sheraton Hotel & Conference Center, all of which are in close proximity to the Overland Park Convention Center.

Built in 1982, 356-room Doubletree by Hilton is located on College Boulevard at U.S. Highway 69. Hotel amenities include the Trofi Restaurant & Bar, fitness center, business center, indoor pool and over 20,000 square feet of meeting space including a 9,000 square foot ballroom.

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The Embassy Suites is located on Metcalf Avenue just north of Interstate 435. The 199-room hotel was built in 1984 and features a restaurant and bar, business center, fitness center, indoor pool and three meeting rooms ranging in size from 384 to 999 square feet.

The Marriott Overland Park is located west of the Overland Park Convention Center on Metcalf Avenue just south of Interstate 435. Hotel amenities include 391 guest rooms, restaurant, business center, fitness center, pool and 18 meeting rooms totaling 14,150 square feet of space. The Sheraton Hotel & Conference Center is connected to the Overland Park Convention Center and offers an additional 20,000 square feet of meeting space. Amenities of the 412-room hotel include a restaurant and bar, indoor pool, fitness center and business center. The hotel was built in 2002 and renovated in 2013.

Kansas City MSA Full-Service Hotels

# of Date Hotel Property Rooms Opened November- Hotel Sorella at Country Club Plaza 132 13 Embassy Suites Kansas City Plaza 266 March-77 Intercontinental Kansas City @ The Plaza 366 June-72 Marriott Kansas City Country Club Plaza 295 February-87 Sheraton Hotel Suites Country Club Plaza 257 April-91 Hyatt Regency Crown Center 733 July-80 Westin Crown Center 724 June-73 Crown Plaza Kansas City Downtown 385 June-67 Hilton Kansas City President 213 June-26 Marriott Kansas City Downtown 983 April-85 The Q Hotel 122 June-86 September- Hilton Garden Downtown Kansas City, KS 147 02 Embassy Suites Kansas City Airport 237 Apr-89 Hilton Kansas City Airport 347 April-73 September- Marriott Kansas City Airport 384 74 Doubletree by Hilton - Overland Park, KS 356 February-82 Embassy Suites Overland Park, KS 199 May-84 Sheraton Hotel Overland Park & Conference December- Center 412 02 Marriott Overland Park 391 Total Guest R ooms 6, 949 Source: Smith Travel Research.

The full-service hotels planned for the Project District will support meeting space designed to host business meeting, wedding and other events. The Project District is located less than two miles northwest of the Overland Park Convention Center. Canyon Research Southwest, Inc. 38 49183665.6

The Overland Park Convention Center offers 237,000 total square feet of meeting space. The 58,494-square-foot Exhibit Hall can be used as one main hall or split into two smaller halls, while the 25,000-square-foot ballroom can also be divided into four column-free spaces. For especially large events, both the hall and ballroom can be combined to provide an impressive 86,000-square-foot venue. The Overland Park Convention Center also offers seven meeting rooms, a pre-function space and a 25,000-square-foot courtyard.

The amenities at the Overland Park Convention Center are just a comprehensive as its spaces. In- house audio-visual, catering and telecommunications services are available, as is equipment rental for goods such as dance floors and coat racks. Public areas feature Wi-Fi access. Complimentary parking is available at 1,400 spaces, 400 of which are covered.

METRO KANSAS CITY LODGING OPERATING TRENDS

A Market Report was purchased from Smith Travel Research identifying historical hotel operating trends for the Kansas City MSA. Smith Travel Research is a leading firm in the collection and publication of national lodging industry trends. The Market Report published supply and demand data from January 2008 to May 2014. Hotel operating data of particular importance includes total room supply, room night demand, average occupancy rate, average daily rate and hotel revenue.

The Smith Travel Research Market Report provided historical average occupancy rate trends for the Kansas City MSA hotel market. As of May 2014, 292 hotels properties totaling 32,221 guest rooms were included in the Kansas City Market Report , providing a comprehensive view of the local lodging market. According to the report, during 2008 the average occupancy rate for the Kansas City MSA was 57.2 percent. During 2009 as the national recession deepened the average annual occupancy rate declined considerably to 52.3 percent.

Fortunately the decline in occupancies was short lived. With the absence of new hotel supply and a healthier local economy, during 2010 hotel occupancies improved to 54.9 percent. Market conditions continued to improve over the next three years reaching a reported average occupancy rate of 58.5 percent by 2013. Through May 2014 the occupancy rate of 56.1 percent was a considerable improvement over the 53.1 percent reported over the same 5-month period in 2013. Occupancy levels are expected to continue to improve through the balance of 2014.

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Kansas City MSA Hotel Market Occupancy Rate Trends 59.0%

58.0%

57.0%

56.0%

55.0%

54.0%

53.0%

52.0%

51.0%

50.0%

49.0% 2008 2009 2010 2011 2012 2013

During 2013, the peak season for Kansas City area hotels ran during the fall and early winter months of September through December with monthly hotel occupancy rates averaging 57.8 to 58.5 percent. Throughout the remainder of the year average monthly occupancy rates remained relatively stable in the 56.9 to 57.5 percent range. These occupancy trends may have been influenced by the large volume of business travelers to the Kansas City area and the impact of the holiday season on travel.

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Kansas City Hotel Market Average Occupancies by Month, 2013 59.0%

58.5%

58.0%

57.5%

57.0%

56.5%

56.0% Jan Feb March April May June July Aug. Sept. Oct. Nov. Dec.

From June 2013 to May 2014, the days of the week capturing the highest room demand among hotels in the Kansas City MSA were Friday and Saturday averaging 65.5 to 70.6 percent, suggesting strong demand for weekend getaways by leisure travelers. Tuesday and Wednesday also reported strong room demand supported by business travel. Sunday has the lowest demand.

Kansas City MSA Hotel Market Average Occupancies by Day of the Week 80.0%

70.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0% Sunday Monday Tuesday Weds. Thurs. Friday Sat.

During 2009 and 2010, hotel properties operating within the Kansas City MSA reported declining average daily rates (“ADR”), reflecting declining occupancy levels. The ADR improved from 2011 to 2013 with annual gains of 0.94 to 3.52 percent. By 2013, the ADR of $87.13 eclipsed the re-recessionary level of 2008. After a decline of 6.62 percent in 2009, room demand increased by 14.5 percent through 2013 and is now well above pre-cessionary levels. In direct response to improving room demand and the ADR, revenue per available room (“RevPAR”) also improved steadily from 2010 to 2013. Canyon Research Southwest, Inc. 41 49183665.6

Kansas City MSA Hotel Market Operating Results; 2008 - 2014 YTD

% % Room % Total % Chang RevPA Chang Chang Chang Year ADR e R e Demand e Revenue e

$86.7 6,433,08 $558,218,9 2008 7 $49.65 7 29 - - $82.0 13.60 6,007,31 $492,781,0 11.72 2009 3 -5.46% $42.90 % 8 -6.62% 76 % $81.5 6,386,24 $520,774,5 2010 5 -0.59% $44.75 4.31% 0 6.31% 27 5.68% $82.3 6,548,54 $539,064,2 2011 2 0.94% $46.60 4.13% 7 2.54% 27 3.51% $85.2 6,616,32 $563,836,5 2012 2 3.52% $48.53 4.14% 4 1.14% 08 4.60% $87.1 6,876,90 $599,194,3 2013 3 2.24% $50.96 7.75% 6 3.94% 88 6.27% Mar- $87.5 2,805,20 $245,605,9 14 5 2.28% $50.48 5.01% 3 7.36% 86 9.81% Source: Smith Travel Research.

From 2010 to 2013 the significant gains in room demand and ADR levels among hotel properties in the Kansas City market produced improving lodging revenues. As illustrated by the bar chart below, total lodging revenues grew from a low of $492.8 million in 2009 to $599.2 million in 2013, an increase of 21.6 percent. Through May 2014, year-to-date lodging revenues increased by 9.81 percent over the same 5-month period in 2013.

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Kansas City MSA Lodging Revenue Trends

$700,000,000

$600,000,000

$500,000,000

$400,000,000

$300,000,000

$200,000,000

$100,000,000

$0 2008 2009 2010 2011 2012 2013

Due to the economic recession and soft hotel market conditions very little new lodging supply has been added to the Kansas City MSA inventory in recent years. According to Smith Travel Research, recent new construction has been limited to the 83-room Holiday Inn Express & Suites and 43-room Ambassador Hotel in 2012 and 132-room Hotel Sorella at Country Club Plaza in 2013. With improving lodging market condition in the past several years new development opportunities are expected to materialize.

There are just four nation chain full-service hotels totaling 1,358 guest rooms operating in Overland Park, Kansas which bodes well for the market entry of this hotel product at the Project District. Sources of on-site lodging demand include business and leisure travelers to the Kansas City area. In addition, the Project District is well positioned to capture room demand generated by the nearby Overland Park Convention Center and 10 million square feet of office space in South Johnson County.

Site Evaluation

The Project Plan includes two full-service hotels along the south shore of the major lake and a full-service hotel within the major retail component. This section of the report evaluates the potential of the property as an extended-stay hotel site.

A. Is the site accessible from major highways and arterial roadways? Canyon Research Southwest, Inc. 43 49183665.6

Freeway and/or major arterial street access is particularly important for budget, economy, limited-service and extended-stay hotels, providing for convenient access and visibility by guests and the ability to capture drive-by traffic. Access is less critical for full-service and luxury hotels as they tend to be destination locations. The Project District’s hotel sites benefit from excellent site access via the Antioch Avenue interchange at Interstate 435. Site access will also be provided via 103 rd Street.

B. Is the potential hotel site near and accessible to hotel room demand generators?

A feasible hotel site is located in close proximity to room demand generators. Potential room demand generators include freeways, employment centers, sporting venues, tourist destinations and recreational facilities. On-site lodging demand for the Project District site will originate from the conference center space and nearly 3.9 million square feet of office space. Additional sources of room demand include the nearby Overland Park Convention Center (339 events and 306,487 attendees in 2013) as well as business and leisure travelers to the Kansas City area.

C. Is the potential hotel site in close proximity to existing hotel properties?

The closest concentrations of hotel rooms to the Project District are located near the Overland Park Convention Center at the intersection of Interstate 435 and Metcalf Avenue. Eleven hotel properties operate at this intersection just one mile east of the Project District. A wide range of hotel products and price ranges are available including budget, limited-service, all-suites and full-service hotels. Major chains include Marriott, Embassy Suites, Homewood Suites by Hilton and Hampton Inn.

According to the Overland Park Convention & Visitors Bureau, 36 hotels operate in Overland Park maintaining a total inventory of approximately 5,200 guest rooms. Since 2009, total room nights sold increased by nearly 25 percent to 1,193,554 room nights sold during 2013.

D. Are the site’s physical characteristics suitable for hotel development?

The Project District is designed as a destination development featuring a vibrant mixed- use environment suitable for hotel uses. Location off Interstate 435 offers the needed access, visibility and exposure to facilitate hotel development. Two of the planned full-

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service hotels are positioned on the south shore of the main lake adjacent to the amphitheater, providing for a unique setting. The third full-service hotel will be located within the lifestyle and entertainment district retail allowing for a vibrant lodging setting.

The Project District possesses the necessary location and site requirements to support future development of full-service hotels. The site offers an established lodging location, access to room demand generators and tourism amenities, adequate access and exposure, and presence with a destination project designed for a mix of retail, entertainment and office uses. Presence of the lifestyle and entertainment retail, large inventory of Class A office space and such unique project elements as a canal, lake and open space network will establish the Project District as a major visitor destination. The bulk of full-service hotels in the Kansas City MSA are older properties that lack the level of amenities and services to be directly competitive to the 3-star and 4-star hotels planned for the Project District.

Conclusions

The Project District occupies a 194-acre site located ay the northeast corner of Interstate 435 and Antioch Avenue in Overland Park, Kansas. The Project Plan calls for approximately 8.0 million square feet of commercial and residential space along with structured parking for 16,350 vehicles. The commercial components includes 3.9 million square feet of office space, 374,252 square feet of retail space and three hotels totaling 750 guest rooms. Residential development includes 2,608 for-sale and rental attached dwelling units. Mixed-use buildings will include office and residential over ground floor commercial space.

The Project Plan incorporates several tourism-related components, including an amphitheater, lifestyle and entertainment retail, and full-service hotels. It is these project components that will generate retail sales tax revenues eligible for capture under STAR Bond

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legislation. The STAR Bond Feasibility Study evaluated the suitability of Project District to facilitate development of an amphitheater, lifestyle and entertainment retail and lodging uses.

The Project District is a feasible site for the operation of a mid-sized amphitheater, possessing a unique location within a major mixed-use urban center, access to a large metropolitan population and tourism market, and the necessary site access. There is a void in the Kansas City market for a venue with a seating capacity of approximately 3,000 seats capable of accommodating a wide range of events such as concerts, theatre groups and Broadway show companies, symphony orchestras, opera, ballet, comedians and lectures. Mid-sized event venues are limited to the 3,000-seat Midland Theatre and 2,402-seat Municipal Auditorium Music Hall, both of which are in downtown Kansas City, Missouri and were built in the 1920’s and 1930’s. While both venues have undergone considerable renovation, they lack the stage capabilities a new venue can provide. Also, Johnson County’s high income and white collar employment levels bode and the number of tourists well for supporting above average expenditures on entertainment.

Six destination lifestyle centers and entertainment districts operate in the Kansas City MSA, the closest being Town Center Plaza and Park Place (2.5 miles) and Priariefire (5.5 miles). Country

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clothing, accessories, specialty retailers and restaurant chains are candidates for the Project

District.

There are just four nation chain full-service hotels totaling 1,358 guest rooms operating in

Overland Park, Kansas which bodes well for the market entry of this hotel product at the

Project District. Sources of on-site lodging demand include business and leisure travelers to the Kansas City area. In addition, the Project District is well positioned to capture room demand generated by the nearby Overland Park Convention Center and 10 million square feet of office space in South Johnson County.

The Project District possesses the necessary location and site requirements to support future development of full-service hotels. The site offers an established lodging location, access to room demand generators and tourism amenities, adequate access and exposure, and presence with a destination project designed for a mix of retail, entertainment and office uses. Presence of the lifestyle and entertainment retail, large inventory of Class A office space and such unique project elements as a canal, lake and open space network will establish the Project District as a major visitor destination.

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To conclude, the Project District is a suitable development site for a mix of destination retail, hotel and cultural uses, possessing the necessary infrastructure, size, access, visibility, exposure, trade area demographics and tourism market. Kansas City’s status as a major tourism destination and business center and synergy with the nearby Overland Park Convention Center and Interstate 435 office corridor provides the opportunity to attract the necessary businesses and customers to support feasible development. The critical mass of cultural and retail attractions unique to the local market will create a regional destination catering to both local residents and out-of-town visitors. Therefore, this study concludes that the Project District qualifies as a major commercial entertainment and tourist area as defined by the Secretary of Commerce.

MARKET IMPACT STUDY

The Market Impact Study examined the impact the Project District will have on the local economy and tourism industry. Specific issues examined include:

Project Positioning and Unique Quality

The Project District development plan creates an integrated mixed-use urban center featuring retail, office, lodging, cultural, residential and recreational uses. The Project Plan calls for approximately 8.0 million square feet of commercial and residential space along with structured parking for 14,869 vehicles. The commercial components includes 3.9 million square feet of office space, 374,252 square feet of retail space and three full-service hotels totaling 750 guest rooms. Residential development includes 2,608 for-sale and rental attached dwelling units. Mixed-use buildings will include office and residential over ground floor commercial space. No mixed-use urban center at this scale exists on the Kansas side of the Kansas City MSA.

The Project District’s principal “destination attractions” will include an amphitheater, open space network featuring canals, two lakes and open space as well as lifestyle and

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entertainment retail space. The Project District’s retail component is designed as a destination lifestyle and entertainment district targeting theme restaurants, entertainment venues, high- end, specialty retailers, and upscale clothing and accessories stores. National chain eating and drinking establishments will anchor the retail, offering unique “concepts” not currently available in the Kansas City MSA, creating destination attractions and minimizing direct competition with existing area businesses.

The 3.9 million square feet of planned office space will serve as a major economic engine for the Project District and Johnson County. Johnson County supports a large office market due to freeway access and high income and educational levels of its residents. According to

Cassidy Turley, the Johnson County office market inventory totals 22.7 million square feet of space, or 45 percent of the metro total. However, much of the existing inventory is over 25 years and not considered Class A quality space. The Project District will offer corporate grade

Class A office space suitable for large local, regional and national companies. Office tenants will be attracted to the Project District because of the convenient access and visibility via

Interstate 435, ample on-site structured parking and presence within a prestigious, mixed-use urban center. These attributes will make the Project District a highly desirable business address. The large employment base will also generate on-site demand for goods and services.

residents including young professionals, couples and empty nesters. The residents will also generate demand for on-site goods and services.

To conclude, the Project District is positioned as a “one-of-a-kind” cultural, retail, entertainment and business center catering to a local, regional and national market. The project master plan assures a cohesive, integrated development while the architectural design will create an upscale urban environment. Together, the project’s uses, concepts and design will generate large visitor volumes, draw out-of-town travelers and enhance the Kansas City region’s status as a regional shopping, entertainment and business destination.

Synergy with other Area Attractions

Tourism and travel is according to the World Tourism Organization (WTO) the world’s largest industry and it is predicted to be one of a few industries that will continue to generate job growth in the future. Hence it is an important vehicle for regional and national economic development. Attractions are an extremely important part of the tourism industry and serve as a primary driver of tourism activity. According to Swarbrooke (1995, p. 3) tourist attractions are the most important component in the tourism industry. Without attractions there would be no need for other tourism services. Many tourist attractions possess strong entertainment connections, including sports venues, theatres and museums.

Much like business clusters, the clustering of destination attractions creates the critical mass necessary to generate and sustain increased visitation and expenditures. Most tourism clusters also have strong linkages to other closely related and supporting industries such as transportation, lodging, retail, food and beverage. Therefore, the larger cluster of attractions a tourist destination supports the greater the direct and indirect economic benefits.

The largest tourism attraction on the Kansas side of the metropolitan area is the Village West Tourism District located northwest of the Project District. Village West is now home to the Kansas Speedway, Community America Ballpark, Sporting Park home to Sporting KC, Nebraska Furniture Mart, Cabela’s and Legends Outlet Center. Together, Village West and the adjacent Schlitterbahn Kansas City (both STAR Bond financed tourism-based projects) have created a critical mass of destination attractions that enhance Kansas City’s status as a regional tourist and family destination as well as generate larger visitor volumes, out-of-town travelers and visitor expenditures. By offering differing attractions the Project District will compliment the Village West and Schlitterbahn tourism destination.

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campus of Johnson County Community College and such lifestyle centers as Town Center, Park Place and Prairiefire (a STAR Bond funded project). By offering differing attractions the Project District will compliment the existing visitor attractions operating in Johnson County.

The Project District’s principal destinations attractions of an amphitheater, 3- and 4-star hotels, lifestyle and entertainment retail and network of canals, lakes and open space offer cultural, retail, meeting space, entertainment and recreational facilities not currently available in the Kansas side of the Kansas City area. By virtue of differing content and market positioning the Project District will compliment and have a synergistic effect on Kansas City’s tourism industry and the heightened out-of-town visitation is expected to translate to increased attendance at existing entertainment, cultural, educational and historic attractions. As evident by the 22.3 million annual visitors to the Kansas City MSA and their corresponding $4.6 billion economic impact, the presence of a large cluster of entertainment, sporting, shopping, dining, art and cultural attractions creates a synergistic effect that strengthens the regional draw, visitation counts, expenditures and visitor’s length of stay.

Impact on Comparable Market Area Businesses

Retail businesses incorporated into the Project Plan addressed by this study include an amphitheater, lifestyle and entertainment retail and three full-service hotels. This section of the study examined the impact of these project components upon similar cultural, retail and lodging businesses in the Kansas City MSA (i.e., that the project will increase total sales in the surrounding area, not diminish sales from existing retailers in the surrounding area).

of these retail categories provides significant opportunities for capturing additional retail sales in the Kansas City MSA. Department stores are estimated to support an additional $825 million in annual sales in the Kansas City MSA. All segments of the clothing and accessories category are under retailed and forecast to support an additional $566 million in annual sales. Furniture and home furnishings are estimated to support an additional $298 million in annual sales. Annual sales of an estimated $608 million can be supported by eating and drinking places.

Annual retail sales leakage within the Kansas City MSA for such specialty retail categories as clothing and accessories, entertainment, and eating and drinking places is estimated at $1.19 billion. Lifestyle and entertainment space is estimated to garner approximately 30 percent of this retail sales leakage, or $358 million. The market positioning of the Project District’s retail component is well suited to capitalize on this retail sales leakage. Feasible development of Phase 1 will require the capture of less than 17 percent of the estimated retail sales leakage for lifestyle and entertainment space in the Kansas City MSA.

Existing upscale retailers and restaurants in the Kansas City MSA are concentrated within six lifestyle centers and entertainment districts, of which three are located in Kansas. These lifestyle centers cater to the metropolitan area’s 2.1 million residents and 22.3 million annual visitors. Reported retail sales among these lifestyle centers run above industry averages, suggesting healthy market conditions and the ability to support additional development. The anticipated retail tenant mix of the Project District will have little duplication to the nearby lifestyle centers of Town Center Plaza, Park Place and Prairiefire.

The hotels will be a key component in the project’s appeal to leisure, business and group travelers and is warranted based on the site’s location in Overland Park, excellent access, proximity to lodging demand generators, and presence with a mixed-use development designed for retail, dining, entertainment and employment uses. The hotels are designed to accommodate new lodging demand generated by the project’s cultural attraction and on-site professional office space.

Hotel development commonly follows a cluster pattern whereby a group of hotels concentrate near such lodging demand generators as employment centers, tourist attractions and entertainment venues. The Project District is located just one mile from the existing cluster of hotels at Interstate 435 and Metcalf Avenue that cater largely to business travelers to Johnson Canyon Research Southwest, Inc. 52 49183665.6

County and group travelers attending events at the Overland Park Convention Center. The on- site amphitheater, retail and office components will also be a source of lodging demand for the Project District. To cater to business, leisure and group travelers, the Project Plan incorporates three full-service hotels totaling 750 guest rooms. Lodging demand generated by out-of-town visitors to the Project District is expected to exceed the hotels’ capacity. Therefore, existing lodging properties in the area will benefit by capturing overflow lodging demand generated by the Project District.

To conclude, the Project District is positioned to capture entertainment, retail and lodging sales now eluding the Kansas City MSA and will further enhance the area’s competitive positioning as a regional tourist and business destination. The high percentage of new sales captured by the Project District and the potential of the Kansas City MSA to support additional retail sales suggests minimal cannibalization of current retail sales. Furthermore, the Project District’s amphitheater, meeting space and office space are expected to lure out-of-town visitors and generate increased lodging demand, not all of which will be satisfied by the planned on-site hotels. Development of the Project District will also benefit other related retail, entertainment and restaurant businesses in the Kansas City MSA by introducing new attractions and retail opportunities to the area and attracting additional out-of-town visitors and expenditures. Therefore, this report concludes that development of the Project District will not have an adverse impact on comparable market area entertainment, retail, dining and lodging businesses.

Estimated Customer/Visitor Counts

STAR bond financing is being sought to assist in the development of the Project District in Overland Park, Kansas. To assist in evaluating STAR bond applications the Kansas Secretary of Commerce has published guidelines regarding a proposed project’s economic impact. The following criteria were evaluated when considering the tourism potential of a project applying for STAR bond financing:

• Out-of-state visitation from multiple states should have a target of 20 percent of total annual visitation to be considered a major, unique, destination attraction;

• A target of 30 percent of total annual visitation should be drawn from greater than 100 miles distance from the attraction community; and

• Total annual visitation should compare very favorably to existing attractions in Kansas.

The Project District will support and host a critical mass of entertainment, recreational, shopping and dining attractions capable of serving as premiere visitor destination and draw from a local, regional and national geographic area. Annual visitation estimates for each of the Project District components were drawn from industry standards.

Attendance for the amphitheater was based on seating for 3,000 patrons, 160 event nights per year and average ticket sales for 80 percent of the seating capacity. Based on these assumptions, annual attendance for the amphitheater is estimated at 384,000 patrons.

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The 374,252 square feet lifestyle and entertainment retail is estimated to attract approximately 2,495,000 annual visitors based on sales of $500 per square foot and average sales of $75 per customer (according to a report published by the ICSC on average shoppers of lifestyle centers spent $75.70 per trip).

At build-out and stabilization, annual visitation to the Project District’s amphitheater, retail and lodging is estimated at approximately 3.0 million. These visitation estimates exclude employees and residents of the Project District. Based on unique and presently unavailable attractions in the Kansas City area, much of the visitation to Project District is expected to be new visitors to Overland Park, Kansas.

Project District Estimated Annual Visitation

Annual Attraction Visitation

Amphitheater 384,000 Lifestyle and Entertainment Retail 2,495,000 Full-Service Hotels 160,000

Total Annual Visitation 3,039 ,000

Visitation estimates for the Project District are segmented into three sources, including: 1) local residents residing within a 100-mile radius; 2) regional visitors residing outside of a 100-mile radius and 3) out-of-state visitors.

Local Residents Residing within a 100-Mile Radius

Annual attendance for the amphitheater is estimated at 384,000 patrons. The primary trade area for the amphitheater is a one hour drive time. Local residents within a 100-mile radius are forecast to account for 85 percent of total attendance to the amphitheater, or approximately 326,400 annual visitors.

The Project District’s lifestyle and entertainment retail is estimated to draw approximately 2.5 million visitors annually. Given the size of the local resident and visitor populations as well as the level of direct lifestyle center competition and visitation patterns at Country Club Plaza, local residents within a 100-mile radius are forecast to account for 65 percent of total visitation, or approximately 1.62 million annual visitors.

The Project District’s three hotels estimated to accommodate 160,000 annual guests. The presence of the amphitheater, meeting space and office space will draw a large number of

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visitors from outside of the Kansas City MSA. In 2012, an estimate 56 percent of leisure travelers to Kansas City stayed in a hotel. During 2012, Kansas City also hosted 1.4 million overnight business travelers. Local residents within a 100-mile radius are estimated to account for 35 percent of total hotel guests, or approximately 56,000 guests.

At build-out, local residents within a 100-mile radius are estimated to account for approximately 65 percent of the visitation to the Project District, or approximately 2.0 million annual visitors.

Regional Visitors Residing Outside of a 100-Mile Radius

Regional visitors traveling more than 100 miles are conservatively estimated to account for 35 percent of total visitation, or approximately 1.0 million annual visitors. Annual regional visitation by project component includes 56,700 visitors to the amphitheater; 873,250 visitors to the lifestyle and entertainment retail and 104,000 visitors to the hotels.

Out-of-State Visitors

During 2012, out-of-state (defined as living outside of Kansas and Missouri) and international visitors accounted for an estimated 56.5 percent of all visitors to the Kansas City area. Leading places of origin for visitors to the Kansas City MSA included Nebraska (5.7%); Iowa (5.5%); Oklahoma (4.9%) and Texas (3.6%). Overall, about one-third of overnight visitors originate between 200 and 300 miles away and over one-third travel more than 500 miles. Also, approximately 57 percent of the Kansas City MSA population resides in Missouri.

Given the Project District’s close proximity to the Kansas-Missouri border, out-of-state residents are conservatively forecast to account for approximately 54 percent of total visitation to the amphitheater, lifestyle and entertainment retail and hotels or 1.6 million annually.

Summary

Project District Estimated Visitation Patterns Canyon Research Southwest, Inc. 55 49183665.6

Out -of - Total State Market Visitor Origination Visitors Visitors Share

Within a 100-Mile Radius 2,004,150 801,660 40.0% Outside of a 100-Mile Radius 1,034,850 827,880 80.0% Totals 3,039 ,000 1, 629,540 53.6 % Source: Canyon Research Southwest, Inc.

Estimated Retail Sales Potential

Retail sales generators for the Project District include a performing art venue, 374,252 square feet of lifestyle and entertainment space and three full-service hotels totaling 750 guest rooms. These project components will be developed in phases. Phase 1 is scheduled to include the lifestyle and entertainment retail with Phase 2 including the amphitheater and 300-room 4-star hotel and conference center on the south shore of the main lake. Phase 3 encompasses a 200- room 3-star hotel incorporated into the mixed-use retail and office component inside the loop road. The final phase will be a 250-room 3-star hotel. For the purpose of this analysis each phase will be completed one year apart. Taxable retail and lodging sales were estimated for the Project District were based on several sources, including:

1. Dollars & Cents of Shopping Centers published by the Urban Land Institute;

2. Sales data published by the International Council of Shopping Centers;

3. Tourism spending characteristics published by the Travel Industry Association of America;

4. Competitive hotel operating results provided by Smith Travel Research;

5. Nation’s Restaurant News Top 100;

6. Ticket sales data published by Live Nation; and

7. Trade area demographics and visitor counts and expenditure patterns.

Total Retail Sales Estimates

The amphitheater is estimated to host 140 events per year drawing 378,000 patrons. According to Live Nation, during 2013 the average ticket price was $62.83 and concessions and merchandise averaged $18.44 per attendee. Based on these industry averages the amphitheater is estimated to generate annual revenues of $30.7 million.

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The Project District is designed to support 374,252 square feet of lifestyle and entertainment commercial space housing restaurants, entertainment venues and retail shops. According to data compiled by the International Council of Shopping Centers, lifestyle centers generate average sales of approximately $451 per square foot with some centers exceeding $500 per square foot. Retail sales at stabilization for such comparable Kansas City area lifestyle and entertainment centers as Country Club Plaza, Zona Rosa, Town Center and the Power & Light District range from the low $300s to in excess of $500 per square foot of retail shop space. Based on sales of comparable retail centers and restaurants occupying 35 to 40 percent of the retail space, annual retail sales for the Project District’s retail space are estimated to average $500 per square foot, or $187 million annually.

The Project District is planned for three full-service hotels totaling 750 guest rooms. A 300-room 4-star hotel and 250-room 3-star hotel are planned along the south shore of the main lake adjacent to the conference center and amphitheater with a 200-room, 3-star hotel planned as part of the lifestyle and entertainment retail component. Stabilized occupancy for each hotel is estimated to require three years from opening, averaging 60 percent in Year 1, 65 percent in Year 2 and 70 percent in Year 3. The first-year ADR for the 3-star hotels is estimated at $175, reaching $200 at stabilization while the 4-star hotel will garner an initial ADR of $275, stabilizing at $300. Food and beverage revenue is estimated to be equivalent to 25 percent of gross revenues. Gross revenues for the 200-room 3-star hotel are estimated at $10.22 million in Year 1, $12.0 million in Year 2, and $13.6 million at stabilization in Year 3. Gross revenues for the 250-room 3-star hotel are estimated at $12.8 million in Year 1, $15.0 million in Year 2, and $17.0 million at stabilization in Year 3. Gross revenues for the 300-room 4-star hotel are estimated at $24.1 million in Year 1, $27.5 million in Year 2, and $30.7 million at stabilization in Year 3.

The table on page 55 provides taxable amusement, retail and lodging sales at build-out of the Project District. Taxable sales are estimated at $187.1 million in Year 1, reaching $296.6 million at build-out and stabilization in Year 6.

From 1994 through 2013 the Consumer Price Index (“CPI”) rose at an average annual rate of approximately 2.425 percent. Through maturity of the STAR bonds amusement, retail and lodging sales volumes within the Project District are escalated at a conservative average annual rate of 1.5 percent.

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Estimated Amusement, Retail and Lodging Sales for the Project District

Building # of Sales Per Gross Sales Land Use Sq. Ft. Rooms Sq. Ft. ADR Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Phase 1 Lifestyle and Entertainment Retail 374,252 $500 $187,126,000 $189,932,890 $192,781,883 $195,673,612 $198,608,716 $201,587,847

Phase 2 Amphitheater $30,720,060 $31,180,861 $31, 648,574 $32,123,302 $32,605,152 4-Star Full-Service Hotel 300 Guest Rooms $275 $18,067,500 $20,640,750 $22,995,000 $23,339,925 $23,690,024 Food & Beverage $6,022,500 $6,880,250 $ 7,665,000 $7,779,975 $7,896,675

Phase 3 3-Star Full-Service Hotel 200 Guest Rooms $175 $7,665,000 $9,015,500 $10,220,000 $10,373,300 Food & Beverage $2,555,000 $3,005,167 $3,406,667 $3,457,767

Phase 4 3-Star Full-Service Hotel 250 Guest Rooms $175 $9,581,250 $11,269,2 80 $12,775,000 Food & Beverage $3,193,750 $3,756,4 27 $4,258,333

Totals Taxable Sales $187,126,000 $244,742,950 $261,703,744 $282,777,852 $290,504,292 $296,644,097 Source: Canyon Research Southwest, Inc.; November 2 014.

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Capture of Kansas City MSA Retail Sales Leakage

Retail trade areas are segmented into primary, secondary and tertiary geographic areas. The primary trade area is the geographical region that generates the largest share of sales, generally ranging from 70 to 80 percent. The primary trade area for the Project District’s lifestyle and entertainment retail is defined as the Kansas City MSA.

Lifestyle centers and entertainment districts are occupied primarily by department stores, clothing and accessories, and eating and drinking places. The RMP Opportunity Gap – Retail Stores Report estimated total retail sales leakage among these three retail categories in the Kansas City MSA at $2.0 billion. The critical mass of restaurants, entertainment venues and retailers exclusive to the Kansas City MSA will ideally position the Project District to capture and retain department store, clothing and accessories, and eating and drinking sales presently leaking outside the region. At capture rates of 2.5 to 3 percent, the Project District would capture new Kansas City MSA retail sales of $50 to $60 million annually.

Estimated Capture of Kansas City MSA Retail Sales Leakage

Lifestyle Center Related Retail Categories

Conservative Moderate Retail Category Scenario Scenario

Estimate d Retail Sales Leakage – Kansas City MSA Department Stores $825,766,887 $825,766,887 Clothing and Accessories $565,935,407 $565,935,407 Eating and Drinking Places $608,013,008 $608,013,008 $1,999,715,30 $1,999,715,30 Total Retail Sales Leakage 2 2

District Capture Rate 2.5% 3% Capture of Kans as City MSA Retail Sales Leakage $49,992,883 $59,991,459 Source: Claritas, Inc. and Canyon Research Southwest, Inc.

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Capture of Out-of-State Visitor Expenditures

At build-out and stabilized occupancy, the amphitheater, lifestyle and entertainment retail, and hotels planned for the Project District are estimated to generate annual retail sales of approximately $297 million. This section of the report estimates supportable retail sales originating from overnight, out-of-state visitors.

The Travel Industry Association of America reported 1.948 billion person trips in the U.S. during 2010, including 1.5 billion leisure trips and business trips. Direct travel expenditures totaled $758.7 billion, averaging $389 per person trip. Expenditures on retail, recreation and amusement, and food totaled $353.5 billion, averaging $182 per person trip.

According to the 2012 Economic Impact Study & Visitor Profile prepared by Tourism Economics, tourism has a profound impact on the Kansas City MSA generating direct expenditures of $2.8 billion. During 2012, over 18.5 million leisure travelers visited the Kansas City MSA. The daily spending by each overnight leisure traveler in 2012 averaged $122.43, with an average length of stay of 3.44 days. Day trip spending averaged approximately $60 per person. Overnight travelers accounted for approximately 49 percent of all leisure travelers with day trippers representing the remaining 51 percent. Therefore, of the 1.6 million annual out-of- state visitors to the Project District, an estimated 827,880 will be overnight visitors and 801,660 will be day trippers.

Assuming direct visitor expenditures averaging $413 per overnight visitor and $60 per day tripper, potential direct tourism expenditures by visitors to the Project District are estimated at $390 million annually. The presence of the amphitheater and lifestyle and entertainment retail’s critical mass of restaurants and retailers exclusive to the Kansas City MSA will ideally position the Project District to capture a large share of direct tourism expenditures from the estimated 1.7 million annual out-of-state visitors. Assuming capture rates of 35 to 40 percent of direct tourism expenditures overnight, out-of-state visitors would account for an estimated $137 to $156 million in sales. Give the presence of 3-star and 4-star hotels, along with the amphitheater and lifestyle

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and entertainment retail, the Project Area is anticipated to capture above average spending by overnight and day trip visitors.

Estimated Total New Sales

As outlined in the table on page 58, at build-out and stabilization the Project District is estimated to generate annual retail sales of approximately $297 million. Given the high level of retail sales leakage within the Kansas City MSA as well as the forecast growth in out-of-state visitation and spending an estimated 63 to 73 percent of the Project District’s gross sales will represent new spending, equating to approximately $187 to $216 million annually.

Estimated Retail Sales by Source I-435 Mixed-Use Project District

Conservative Moderate New Retail Sales Formula Scenario Scenario

Potential New Primary Trade Area Spending

Annual Retail Sales Leakage Department Store, Clothing & Dining $1,999,715,302 $1,999,715,302 Project District Capture Rate – Potential New Sales 2.5% 3.0% Kansas City MSA Leakage Sales Captured by Project District $49,992,883 $59,991,459 Project District Annual Gross Sales at Build-out $296,644,097 $296,644,097 % of Total Project District Gross Sales at Build-out 16.85% 20.22%

Expenditures by Out-of-State Visitors

Estimated Annual Out-of-State Visitors to Project District 1,629,540 1,629,540 Total Annual Visitor Expenditures on Shopping, Dining & Entertainment $390,014,040 $390,014,040 Project District Capture Rate of Visitor Expenditures 35% 40% Out-of-State Visitor Expenditures Captured by Project District $136,504,914 $156,005,616 Project District Annual Gross Sales at Build-out $296,644,097 $296,644,097 % of Total Project District Gross Sales at Build-out 46.02% 52.59%

District Retail Sales Capture

Project District Annual Gross Sales at Build-out $296,644,097 $296,644,097 Canyon Research Southwest, Inc. 58 49183665.6

Kansas City MSA Leakage Sales Captured by Project District $49,992,883 $59,991,459 Out-of-State Visitor Expenditures Captured by Project District $136,504,914 $156,005,616 Total Annual Leakage and Out-of-State Expenditures $186,497,797 $215,997,075 % of Project District Annual Gross Sales from Kansas City MSA & Visitors 62.87% 72.81% Source: Canyon Research Southwest, Inc.; November 2014.

Impact on Active STAR Bond Projects

As an economic development tool the State of Kansas adopted STAR bond legislation that affords bond financing for eligible development projects. STAR bonds provide Kansas municipalities the opportunity to issue bonds to finance the development of major commercial entertainment and tourism areas and use sales tax revenue generated by the development to pay off the bonds. In order to be considered a major commercial entertainment and tourism area, a proposed project must be capable of being characterized as a statewide and regional destination, and include a high quality innovative entertainment and tourism attraction, containing unique features which will increase tourism, generate significant positive and diverse economic and fiscal impacts and be capable of sustainable development over time.

STAR bond financing allows eligible projects to capture local and county portion of sales taxes generated within the established district for use in reimbursing such project costs as land acquisition, infrastructure improvements and certain soft costs. The state may also agree to contribute its portion of the sales tax revenue generated within the district.

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Prairiefire at LionsGate

The Department of Commerce approved a STAR bond project for a major museum project in Overland Park called Prairiefire. The project is designed for a 58-acre parcel located on the south side of 135 th Street bounded by Nall Avenue to the east and Lamar Avenue to the west. The planned development is located in affluent Johnson County adjacent to the private Nicklaus Golf Club at LionsGate. Prairiefire at LionsGate is planned as a unique entertainment and cultural destination anchored by a 35,000 square foot museum designed to host traveling exhibits by New York’s famed American Museum of Natural History. The museum will serve as a regional attraction drawing an estimated 400,000 visitors annually.

Prairiefire at LionsGate is designed as an integrated urban village featuring a mix of retail, museum, office, hotel and residential uses. The master plan features a cluster of 35, 1- to 5-story buildings designed to create a “Main Street” urban setting. Prairiefire at LionsGate is entitled for a total of approximately 1.45 million square feet of commercial and residential space accompanied by surface and structured parking. Eleven, multi-story buildings are designed with a mix of ground floor retail with office, hotel or residential space in floors above. Project components include 363,200 square feet of retail space, a 35,000 square foot museum, 279,500 square feet of office space, 89,350 square feet of hotel space and 596,654 square feet of residential space. Eighteen golf cottages are designed to back onto the Nicklaus Golf Club at LionsGate.

Prairiefire at LionsGate’s retail component is designed as a destination lifestyle and entertainment center targeting high-end boutique shops, fine dining and entertainment venues. What will set Prairiefire at LionsGate apart from existing lifestyle and entertainment centers operating in the Kansas City area is the inclusion of a cultural/educational facility as the destination attraction.

The Museum at Prairiefire will serve as the project’s principal attraction. The Museum at Prairiefire was established in 2010 based on a pioneering content partnership with the American Museum of Natural History and opened to the public on May 12, 2014. The American Museum of Natural History (“AMNH”) has agreed to provide 20 traveling exhibits over a 10-year period. The Museum at Prairiefire is the first with an exclusive agreement with the AMNH that grants it a 300-mile radius market area. The Museum is focused on enhancing public understanding of natural history and sciences and presents an ongoing flow of world-class traveling exhibitions organized by the American Museum of Natural History. The Museum includes a Discovery Room, which is an exciting gateway to science and natural history for children age 3 and older, as well as engaging permanent halls and experiences, education programs and science videos, among others.

Prairiefire at LionsGate is planned to be developed in two phases. Phase 1 project components include the museum, approximately 206,000 square feet of retail space, 397,000 square feet of residential space and development of a portion of the wetlands and interactive walk areas. Phase 2 will include 279,500 square feet of office space, a hotel, 157,200 square feet of additional retail space and 199,654 square feet of residential.

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Construction of Prairiefire formally began in early January 2013 with an official groundbreaking ceremony. The $160 million first phase opened in the spring of 2014 and includes the first retail spaces on the east and west sides of the development (Districts A & B). Prominent retailers open for business include REI, The Fresh Market, Cinetopia Theaters, Pinstripes Bowling, Rock & Brews, The Newport Grill and Wasabi Sushi Bar. Also open is The Residences at Prairiefire apartment community and The Prairiefire Villas. Custom homes on the Nicklaus Club at LionsGate Golf Course are under construction and priced from the mid-$800’s.

According to the STAR Bond Annual Report 2013 published by the Department of Commerce, STAR bonds up to $81 million have been authorized for Prairiefire at LionsGate. In December 2012 the City of Overland Park issued nearly $65 million in STAR bonds (Series 2012) to finance Phase 1 of the Prairiefire project. Through September 2013 a total of nearly $26.4 million had been expended and no sales tax revenue had been collected within the district. Sales tax collections were expected to begin on October 1, 2013 with the scheduled opening of REI and The Fresh Market. All sales tax revenues are pledged to the repayment of the bonds.

The project is expected to create more than 1,887 full-time equivalent jobs and up to 2,624 indirect and induced jobs. After completion, the project is forecast to bring 1.9 million new visitors to Overland Park and generate $154 million in annual sales.

Village West

Village West is a 400-acre mixed-use development at the intersection of Interstates 70 and 435 in Kansas City, Kansas located immediately west of the Project District. The Unified Government of Wyandotte County and Kansas City, Kansas is developing Village West which is designed as an entertainment and retail destination.

Village West’s principal entertainment attractions include the Kansas Speedway, Sporting Park, Community America Ballpark and Hollywood Casino. These destination attractions have a significant influence on retail sales at Village West by generating high attendance volumes and providing regional and national recognition.

Opened in August 2001, the $250 million Kansas Speedway features a 1.5-mile tri-oval NASCAR track and an 80,000-seat grandstand. The Kansas Speedway hosts several annual NASCAR, IRL and Craftsman Truck sponsored events.

Community America Ballpark, an open air stadium with a capacity of just under 7,200 which includes suites, fixed seats, picnic and grass seating, and standing areas and which is home to the Kansas City T-Bones minor league baseball team, that opened in May 2003.

The Sporting Park, a 18,467-seat soccer stadium, opened at Village West in June 2011. The facility is home to Sporting KC, a franchise of Major League Soccer (“MLS”). The seating

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capacity can be increased to 25,000 for concerts. In 2013, the stadium hosted the MLS All-Star Game, the United States men’s soccer team and the MLS Cup, three of the most prestigious matches in the United States, and is the only stadium to host all three in the same year.

Located along turn two of the Kansas Speedway, the Hollywood Casino opened in February 2012 features 2,000 slot machines, dining and entertainment. Future development includes a 250-room hotel. According to the Kansas Racing and Gaming Commission, gambling revenue at Hollywood Casino totaled $114 million in 2012. Figures for 2013 were not available. Hollywood Casino is a joint venture of International Speedway Corp. and Penn National Gaming, which operates casinos around the United States, including Argosy Casino in Riverside.

The experience with Village West demonstrates the value of STAR bonds as a development tool to attract unique, regional shopping and entertainment attractions to Kansas. The one-of-kind entertainment concepts and exceptional regional transportation access allows Village West to penetrate a trade area within a 4-hour drive time and host approximately 10 million visitors annually. Village West’s expanded regional draw has attracted such major retail entities Nebraska Furniture Mart, Cabela’s and Legends at Village West outlet center. The following retail projects are currently operating in Village West:

• Cabela’s is sporting goods retailer specializing in hunting, fishing, camping and related outdoor merchandise. Cabela’s was the first tenant to operate within Village West opening an 188,000 square foot large-format destination retail store in August 2002. The Village West store is Cabela’s only outlet in Kansas or Missouri and services a 250-mile trade area;

• Nebraska Furniture Mart Store, a retailer of furniture, floor coverings, appliances, and electronics products, opened in August 2003. The Village West store is Nebraska Furniture Mart’s first full-product-line extension location and services a trade area encompassing a 300-mile radius. Built on 80 acres, the 2-story superstore features over 1.0 million square feet of retail and distribution space;

• The Legends Outlets Kansas City is a 970,035 square foot destination outlet center. The 86,916 square foot Legends 14 Theatres opened in November 2005. Grand opening for the balance of the destination development occurred on April 22, 2006. Major retailers now open for business include Target, JC Penney, Dave & Busters, TJ Maxx, T-Rex, Off Broadway Shoes, Home Decorators Collection, and Old Navy. To date, 80 national and regional retailers are open for business; and

• Twenty-six restaurants now operate at Village West, including Applebee’s, Arthur Bryant’s Barbecue, Bob Evans, Cheeseburger in Paradise, Chili’s, Granite City, Hooters, Johnny Carino’s, Sonic Drive-in, Stix and Yard House.

Cerner has completed construction on two eight-story buildings on the 58-acre Village West campus at the southwest corner of Interstate 435 and State Avenue. The first tower opened in June 2013 and houses 1,000 employees. A total of 4,000 new jobs are expected to fill the 660,000-square-foot complex with an average annual salary of $65,000.

Prompted by the regional draw, special events and high visitor volumes nine hotels totaling 941 guest rooms now operate within the Village West Tourism District include the Great Wolf Canyon Research Southwest, Inc. 62 49183665.6

Lodge, Chateau Avalon, Best Western, Candlewood Suites, Comfort Inn, Country Inn & Suites, Hampton Inn and Holiday Inn Express.

According to the Unified Government, by year-end 2011 Village West had 114 businesses employing nearly 5,700 people. These businesses generated over $610 million in retail sales with local and state sales tax, use tax and transient guest tax collections of over $41 million. The 2009 real and personal property taxes levied on Village West was just over $11 million, which compares to $208,409 in the year prior to development of the 1,200-acre project.

Since its start in 2001, public and private development at Village West has totaled approximately $1.6 billion. According to the STAR Bond Annual Report 2013 published by the Department of Commerce, Village West continues to be the number one tourist attraction in Kansas with more than 10 million annual visitors from throughout the Midwest region and beyond. The Kansas Speedway completed its 13 th successful season of racing on October 21 st with the Sprint Cup Series Hollywood Casino 400, the third year with two Sprint Cup events in the same season. More than $340 million in local and state sales taxes have been generated by the Kansas Speedway and Village West. The current Village West STAR bonds are due to be paid off in 2017.

Together, Village West and Kansas Speedway create one of the Midwest’s most unique and highly visited shopping and entertainment destinations. Village West has attracted public and private investment that has translated into jobs, increased sales and property taxes and an economic development renaissance for western Kansas City. The eventual employment of 4,000 workers at Cerner will generate increased demand for housing and retail goods and serves in Wyandotte County.

Schlitterbahn Vacation Village

In 2005 the Kansas Department of Commerce approved the allocation of $225 million in STAR bonds for a 365-acre Project District located on the east side of Interstate 435 between the State Avenue and Parallel Parkway interchanges in Kansas City, Kansas. The Project District is designed for a large-scale, tourism-based development anchored by a Schlitterbahn water park. Schlitterbahn is a well-established brand operating two of the top eight North America water parks for attendance.

The initial phase involved acquisition of the entire 365-acre site and construction on 65 acres of the Schlitterbahn Kansas City water park which opened in summer 2009 with a full complement of water park entertainment. In 2012 the park expanded with new attractions including Kansas City’s only Boogie Bahn surf ride, three giant slides, the Midwest’s longest rapids river, a fast- flow tube chute, ride-up Aqua Veyer, private cabanas and additional guest amenities. In 2013 Schlitterbahn began the construction of what has become the most talked about attraction in water park history – the Verrückt. The waterslide, a 17-story tall mega-blaster, is revolutionizing what is possible with giant waterslides. Featuring a 4 person raft, Verrückt opens in summer 2014, having generated over $2 million in publicity before a single rider climbs aboard.

Schlitterbahn Kansas City is the fourth in a family of water parks, including locations in New Braunfels, Galveston and South Padre Island, Texas. Now in it’s fifth full season, the park

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features a Master Blaster™ uphill water coaster, a Boogie Bahn inland surfing ride, six tubing slides and chutes, four tubing rivers including the world’s longest tidal wave river, 13 mini slides for kids, three relaxing beaches and a giant hot tub with a swim-up refreshment bar.

Schlitterbahn Kansas City has a significant “drive market,” that is, guests who take a day trip to visit the park. During 2012, annual attendance to Schlitterbahn Kansas City totaled 229,045. The key markets outside the Kansas City, Kansas MSA include Omaha, Topeka, Wichita, Des Moines, and Western Missouri. Out of MSA guests run 52.98% and 52.8% come from outside the state of Kansas.

In August 2014, the Unified Government Board of Commissioners voted unanimously to approve and expanded and amended the Schlitterbahn Vacation Village STAR Bond district to include the U.S. Soccer National Training Center. The new Project Plan calls for Project Area 2 to consist of a 150-room extended-stay hotel, 17,000 square feet of restaurant and retail shop space, a 9-lot autoplex designed to be occupied by seven dealerships, two restaurants and a convenience store. Project Area 3 would include either 400,000 square feet of retail space or 275,000 square feet of retail space plus offices for a corporate headquarters.

The National Training Center & Coaching Development Center planned by Sporting KC and U.S. Soccer will be located within Project Area 4 at the southeast corner of 98 th Street and Parallel Parkway. The National Training Center & Coaching Development Center is designed with the intent of establishing a state-of-the-art campus that would be designed, developed and operated as a world-class training facility dedicated to the future of American soccer. The National Training Center & Coaching Development Center is anticipated to include an approximate 100,000 square foot state-of-the-art indoor facility with a practice area, hydrotherapy suites, biomechanics and training gyms, video analysis amenities, educational and coaching suites and medical and sports science facilities. In addition, the complex is envisioned to have eight regulation-sized soccer fields, including one indoor synthetic field and seven outdoor natural grass fields.

It is anticipated that the National Training Center & Coaching Development Center would serve as the premier destination in the United States for players, coaches and referees to train, develop and educate on a year round basis. The facility is envisioned to host national and local coaching courses, USSF staff meetings, player and referee focused events, NSCAA courses and U.S. National Team camps and practices. The facility will also offer a top-of-the-line training facility and centralized home base for premier international soccer clubs touring the United States. The $65 million National Training & Coaching Development Center is anticipated to open in 2015.

Conclusions

The Project District’s principal tourism attractions will be cultural, recreational, entertainment and retail oriented, highlighted by an amphitheater and an open space system including canals, lakes, a trail system and golf course. Complimentary uses will include retail, restaurants and lodging.

Prairiefire at LionsGate’s major tourism attraction is an educational museum complimented by dining and nightlife entertainment. Given this distinctive market positioning, the Project District

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is not anticipated to have a negative impact on tourism visitation and retail sales at Prairiefire at LionsGate. In fact, the proximity of Prairiefire at LionsGate affords the opportunity to leverage off of the success of the Project District. The inclusion of an AMNH attraction and lifestyle retail will enable Prairiefire at LionsGate to serve as an alternative tourism destination, complimenting the attractions offered by the Project District. Together, the two attractions can foster strong synergy and heighten the status of greater Kansas City as one of the Midwest’s primary tourism destinations, resulting in increased out-of-town visitation, average length of stay and spending.

The following economic impacts are forecast when considering the tourism potential of a project applying for STAR bond financing:

• Direct expenditures: Visitor spending that directly supports the jobs and incomes of people and firms that deal directly with visitors;

• Indirect expenditures: Changes in sales, income or jobs in regional sectors that supply goods and services in support of direct expenditure entities;

• Direct job creation: The total number of jobs (distinguished as full-time or part-time) supported by the target attraction; and

• Creation of overnight hotel stays.

The Economic Impact Assessment examines the economic implications of the retail, restaurants, lodging, entertainment, recreational and office space to be constructed within the Project District in terms of the direct and indirect growth in employment, income and consumption. The planned Canyon Research Southwest, Inc. 65 49183665.6

project’s economic impact has been measured in terms of both construction-phase and operational.

The Development Impact Assessment Handbook & Software published by the Urban Land Institute was used to complete the Economic Impact Assessment. As part of the Economic Impact Analysis, retail sales and hotel room demand estimates were also provided.

Direct impacts measure the spending and job creation that occurs as a direct result of the operations and activities that occur within the Project District. Indirect impacts consist of re- spending of the initial or direct expenditures, or the supply of goods or services resulting from the initial direct spending within the Project District.

Construction-Phase

Total capital investment for the Project District is estimated at approximately $2.4 billion. Infrastructure and building costs are estimated at $2.0 billion. Construction phase direct on-site employment associated with development of the Project District is estimated at 6,473 full-time equivalent jobs. Indirect job creation is forecast at 11,511 jobs, bringing the total construction- phase work force to 17,984 jobs.

The Occupational Employment and Wage Estimates 2013, published by the U.S. Department of Labor estimates annual median incomes in the Kansas City MSA of $23.02 per hour for construction occupations, $17.59 per hour for production and manufacturing occupations, $16.24 per hour for transportation and $16.89 per hour for other occupations. Total payroll originating from these construction-phase jobs is estimated at $688 million, resulting in total consumption expenditures of $443 million.

Construction-Phase Economic Impact Project District

Project Economic Indicator Totals

Capital Investment $2,389,267,482 Infrastructure, Site Work and Building Costs $2,009,861,418

Full-time Equivalent Employment On-Site 6,473 Off-Site 1,020 Manufacturing 5,477 Trade/Transportation/Services 3,715 Others 1,298 Total Full-time Equivalent Employment 17,984

Payroll $688,249,198 Disposable Income $481,774,439 Canyon Research Southwest, Inc. 66 49183665.6

Consumption Expenditures $443,232,484 Shopping Goods $75,792,755 Convenience Goods $102,829,936 Other Consumption (i.e., Housing, Health, etc.) $264,609,793 Source: Canyon Research Southwest, Inc.; November 2014.

Effective tax year 2013, the State of Kansas collapsed the current three-bracket structure for individual state income taxes (3.5%, 6.25% and 6.45%, respectively) into a two-bracket system using rates of 3.0 percent and 4.9 percent. A new series of individual income tax rate cuts will be provided beginning in tax year 2014, when the bottom bracket of 3.0 percent is reduced to 2.7 percent and the top bracket of 4.9 percent is reduced to 4.8 percent. This analysis applied tax rates of 2.7 percent for incomes up to $30,000 and 4.6 percent for taxable income in excess of $30,000. Kansas allows itemized deductions and tax payers can claim the same itemized deductions reported on the Federal return. Standard deductions under the Tax Reform Law are increased to $5,500 for singles or married filing separately and $7,500 for married couples filing jointly. Kansas has no personal exemption.

During the construction phase total employment is estimated at 17,984 supporting a total payroll of approximately $688 million. Accounting for a blended standard deduction for single and married couples of $6,500 and income tax rates of 2.7 and 4.6 percent tax of taxable income, the State of Kansas is estimated to collect approximately $20.8 million (average of $1,157 per job) in state income tax revenues resulting from construction-phase payroll.

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Operational-Phase

Full-time equivalent employment resulting from development and operation of these project components was estimated using employment rations stated in the number of jobs per 1,000 square feet of building area or per hotel room. This study applied full-time equivalent employment ratios of 0.50 jobs per full-service hotel room, 2.5 jobs per 1,000 square feet of retail space, 3.0 jobs per 1,000 square feet of restaurant space and 5.0 jobs per 1,000 square feet of office space.

Total payroll was estimated based on annual mean incomes pertinent occupations in the Kansas City MSA published by the U.S. Department of Labor’s Occupational Employment and Wage Estimates May 2013. A sample of annual mean incomes include $46,000 for all occupations, $49,240 for food service managers, $43,470 for cooks and head chefs, $29,780 for first-line food preparation supervisors, $20,460 for food preparation and serving related workers, $25,130 for retail sales, $19,820 for cashiers, $39,470 retail store supervisors, $58,380 for lodging managers, $19,990 for hotel clerks, $20,040 for maids and housekeeping, $67,220 for business and financial operations, $75,630 for computers and $35,100 for office and administrative.

Project District Operational-Phase Direct Employment & Payroll

Building # of FTE Annual Annual Room Project Component Area s Jobs Wage Payroll

Lifestyle & Entertainment District $25,00 Retail Shops 238,200 596 0 $14,887,500 $27,50 Restaurants 158,000 474 0 $13,035,000 $22,00 Full-Service Hotels 750 375 0 $8,250,000 3,861,57 18,34 $60,00 $1,100,549,16 Professional Office 6 2 0 0

19,78 $1,136,721,66 Grand Totals 7 0 Canyon Research Southwest, Inc. 67 49183665.6

Accounting for a blended standard deduction of $6,500 and a 2015 tax rate of 2.7 and 4.6 percent of taxable income, at build-out the Project District is estimated to generate individual income tax revenues of approximately $46 million per year for the State of Kansas resulting from direct operational-phase payroll.

The Project District is forecast to attract 827,880 annual out-of-state visitors from outside of 100 miles. Assuming 56 percent of travel parties will stay in hotels or motels (Kansas City MSA average for 2012); an average of 1.8 persons per guest room and an average length of stay of 3.0 nights, the Project District will generate an estimated 463,613 guests and total demand for overnight accommodations of approximately 772,700 room nights. At an average occupancy rate of 65 percent this level of lodging demand is sufficient to support approximately 3,250 hotel rooms. The Project District is planned for 750 hotel rooms. These lodging demand forecasts illustrate the significant impact the Project District will have on the Kansas City area hotel market and the potential to support additional hotel development.

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STAR BOND REVENUE PROJECTIONS

The STAR bond program provides Kansas municipalities the opportunity to issue bonds to finance the development of major commercial entertainment and tourism areas, and use sales tax revenue generated by the development to pay off the bonds. STAR bonds possess a 20-year term. An eligible area for the STAR bond program includes a historic theater, major tourism area, major motorsports complex, auto race track facility, river walk canal facility, major multi-sport athletic complex or a major commercial entertainment and tourism area.

This section of the report quantifies the ability of the Project District to support the necessary bond debt by preparing an amortization schedule using estimated STAR bond sales tax revenue streams generated through maturity of the 20-year term.

STAR Bond Revenues

The STAR Bond Act allows for the pledge of 100 percent of the tax increment revenue received by the State of Kansas, county and city from any local sales and use taxes, including the city’s share of any county sales tax, which are collected within the STAR bond project district. The STAR bond financing being sought for the Project District will be repaid by incremental retail sales taxes.

Taxable retail sales generated by businesses operating in the Project District are subject to a sales tax rate of 8.50 percent consisting of 6.15 percent for the State of Kansas, 1.225 percent for Johnson County and 1.125 percent for the City of Overland Park.

The City of Overland Park levels a 1.125 percent sales tax, of which 1.0 percent is dedicated to funding general operations and 0.125 percent for street improvements. The sales tax rate eligible for STAR Bond capture includes the General Fund rate of 1.0 percent.

City’s share of the County’s 0.5 percent General Tax is also eligible for STAR bond capture. The General Tax revenues are distributed to the County and each of the cities in the County according to a state-mandated formula based upon population and ad valorem taxing effort. In general, the County receives approximately 27 percent of these revenues, while cities receive approximately 73 percent. As depicted in the table on the following page, from 2009 to 2013, Johnson County has distributed annual sales tax revenues ranged from $12.8 million to $16.8 million to the City of Overland Park, amounting to approximately 12.2 percent to 13.1 percent of total countywide sales tax distributions. For the purpose of this report, an average 13.0 percent rate of sales tax distribution was applied to the Johnson County General tax of 0.5 percent to arrive at a STAR bond-eligible tax rate of 0.065 percent.

The City and County sales tax distribution rate of 1.065 percent (1.0% City and 0.065% County) is eligible for STAR Bond capture. Therefore, the effective sales tax rate eligible for STAR bond capture is 7.215 percent.

Under provisions of the Kansas Department of Revenue Regulation KS-1250, the sale of admissions to places providing amusement, entertainment or recreation is subject to Kansas sales tax.

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Countywide Sales Tax Distributions to City of Overland Park and Johnson County

2009 2010 2011 2012 2013 Totals OP Dist - Countywide $9,434,067 $8,572,896 $9,548,262 $10,644,894 $11,169,687 $49,369,806 OP Dist - Public Safety #1 $2,358,522 $2,120,670 $2,387,121 $2,661,230 $2,792,429 $12,319,972 OP Dist - Public Safety #2 $2,358,522 $2,120,670 $2,387,121 $2,661,230 $2,792,429 $12,319,972 Total OP Dist. $14,151,112 $12,814,236 $14,322,504 $15,967,354 $16,754,545 $7 4,009,750

Total Countywide Tax $110,366,291 $105,016,392 $117,446,575 $122,843,877 $127,824,559 $5 83,497,694

OP Countywide Allocation 12.8% 12.2% 12.2% 13.0% 13.1% 12.7 Source: Kansas Department of Revenue

According to the Kansas Department of Revenue, the City of Overland Park levies a transient guest tax on lodging revenues of 9.0 percent, with the State deducting a 2.0 percent administrative fee. Revenues received by the City from the transient guest tax are expended solely and only for the purpose of promoting activities relating to conventions and tourism. Two-thirds of the transient guest tax revenues shall be deposited into the Transient Guest Tax Fund and dedicated to funding principal and interest payments for the 412-room convention hotel and convention center. One-third (1/3) of the TGT revenues shall be deposited in the Transient Guest Tax Capital Project Fund. Therefore, for the purpose of this study transient guest tax revenues generated by the hotels planned for the Project District will not be eligible for capture.

The Project District will generate taxable retail sales, amusement and lodging revenue through development of the amphitheater, lifestyle and entertainment district, and hotels. The Market Impact Study section of the report estimated annual retail sales, amusement and lodging revenues at build-out and stabilization of the Project District.

From 1994 through 2013 the Consumer Price Index (CPI) rose at an average annual rate of 2.425 percent. Through maturity of the STAR bonds retail and lodging sales volumes within the Project District are escalated at a more conservative annual rate of 1.5 percent.

As depicted in the table on page 71, throughout the 20-year life of the STAR Bond district the eligible sales tax revenues associated with the Project Area is estimated at approximately $448 million.

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Project District STAR Bond Revenue Estimates

STAR Bond Revenue Total Amphitheater Retail Lodging Hotel Total State City/County Lodging STAR Bo Year Sales Sales Sales F & B Sales 6.15 % 1.0650% 0.00% Revenu

1 $187,126,000 $0 $187,126,000 $11,508,249 $1,992,892 $0 $13,501, 2 $30,720,060 $189,932,890 $18,067,500 $6,022,500 $244,742,950 $15,051,691 $2,606,512 $0 $17,658, 3 $31,180,861 $192,781,883 $28,305,750 $9,435,250 $261,703,744 $16,094,780 $2,787,145 $0 $18,881, 4 $31,648,574 $195,673,612 $41,591,750 $13,863,917 $282,777,852 $17,390,838 $3,011,584 $0 $20,402, 5 $32,123,302 $198,608,716 $44,829,205 $14,943,069 $290,504,292 $17,866,014 $3,093,871 $0 $20,959, 6 $32,605,152 $201,587,847 $46,838,324 $15,612,775 $296,644,097 $18,243,612 $3,159,260 $0 $21,402, 7 $33,094,229 $204,611,664 $47,540,899 $15,846,967 $301,093,759 $18,517,266 $3,206,649 $0 $21,723, 8 $33,590,643 $207,680,839 $48,254,012 $16,084,671 $305,610,165 $18,795,025 $3,254,748 $0 $22,049, 9 $34,094,502 $210,796,052 $48,977,823 $16,325,941 $310,194,318 $19,076,951 $3,303,569 $0 $22,380, 10 $34,605,920 $213,957,993 $49,712,490 $16,570,830 $314,847,233 $19,363,105 $3,353,123 $0 $22,716, 11 $35,125,009 $217,167,362 $50,458,177 $16,819,393 $319,569,941 $19,653,551 $3,403,420 $0 $23,056, 12 $35,651,884 $220,424,873 $51,215,050 $17,071,684 $324,363,490 $19,948,355 $3,454,471 $0 $23,402, 13 $36,186,662 $223,731,246 $51,983,276 $17,327,759 $329,228,943 $20,247,580 $3,506,288 $0 $23,753, 14 $36,729,462 $227,087,215 $52,763,025 $17,587,675 $334,167,377 $20,551,294 $3,558,883 $0 $24,110, 15 $37,280,404 $230,493,523 $53,554,470 $17,851,490 $339,179,887 $20,859,563 $3,612,266 $0 $24,471, 16 $37,839,610 $233,950,926 $54,357,787 $18,119,263 $344,267,586 $21,172,457 $3,666,450 $0 $24,838, 17 $38,407,204 $237,460,190 $55,173,154 $18,391,052 $349,431,599 $21,490,043 $3,721,447 $0 $25,211, 18 $38,983,312 $241,022,092 $56,000,751 $18,666,917 $354,673,073 $21,812,394 $3,777,268 $0 $25,589, 19 $39,568,062 $244,637,424 $56,840,763 $18,946,921 $359,993,169 $22,139,580 $3,833,927 $0 $25,973, 20 $40,161,583 $248,306,985 $57,693,374 $19,231,125 $365,393,067 $22,471,674 $3,891,436 $0 $26,363, Totals $382,254,021 $66,195,209 $0 $448,449, Source: Canyon Research Southwest, Inc.; November 2 014.

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Supportable Bond Debt Coverage

The STAR Bond funding capacity of the Project District was quantified through calculating the net present value of the annual Sales Tax Special Obligation Bond (“STAR”) revenues throughout the 20-year maturity of the district. This report assumed that all STAR bond revenue would be used to pay bond debt. The net present value was calculated using a debt coverage ratio of 1.35 and a discount (“yield”) rate of 6.0 percent.

Total development costs for the Project Area are estimated at approximately $2.4 billion. STAR Bond eligible project costs associated with the Project Area that include land acquisition, infrastructure and soft costs are estimated at approximately $360 million. Requested STAR Bond financing for the Project Area amounts to approximately $130 million.

As outlined by the table on page 73, throughout the statutory 20-year STAR bond maturity period the net Sales Tax Special Obligation Bond revenues estimated for the Project District of $448 million are sufficient to fully satisfy approximately $185 million in bond debt amortized over a 20-year term at a 6.0 percent yield with a debt coverage ratio of 1.35.

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Project District Supportable STAR Bond Debt Estimates

Estimated Debt Present Net STAR Bond Coverage Value Present Year Revenue 1.35 6.0% Value

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ADDENDA

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EXHIBIT A

Canyon Research Southwest, Inc., Client Roster

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Canyon Research Southwest, Inc. Client List

Canyon Research Southwest, Inc. has provided real estate consulting services for a number of leading organizations including:

American Furniture Warehouse (Englewood, CO) Arizona State Land Department Bain & Company, Inc. (Boston, Massachusetts) Bashas’ Markets Bayer Properties (Birmingham, Alabama) Belz-Burrow (Jonesboro, Arkansas) Bridgeview Bank Group Browning-Ferris Industries Burch & Cracchiolo PA Cameron Group (Syracuse, New York) Carrow Real Estate Services (Albany, New York) Cass County, Missouri Cavan Real Estate Investments D.J. Christie, Inc. (Overland Park, Kansas) Church of Jesus Christ of Latter Day Saints City of Belton, Missouri City of Dodge, Kansas City of Fenton, Missouri City of Glendale Economic Development Department City of Independence, Missouri City of Lee’s Summit, Missouri City of Liberty, Missouri City of Osage Beach, Missouri City of Mesa Economic Development Department City of Mesa Real Estate Services City of Norman, Oklahoma City of Overland Park, Kansas City of Phoenix Economic Development Department City of Phoenix Real Estate Department City of St. Charles, Missouri City of Tucson Community Services Department City of Warsaw, Missouri City of Wichita, Kansas DeRito Partners Development, Inc. Dial Realty (Omaha, Nebraska and Overland Park, Kansas) DMB Associates DMJM Arizona Inc. EDAW, Inc. (Denver, Colorado) Gilded Age (St. Louis, Missouri) W.M. Grace Development Greystone Group (Newport Beach, California) Hanford/Healy Advisory Company Heritage Bank (Louisville, Colorado) Canyon Research Southwest, Inc. 76 49183665.6

Highwoods Properties (Kansas City, MO) Holiday Hospitality Corporation (Atlanta, Georgia) Jorden & Bischoff, PLC JPI Development Kaiser Permanente (Oakland, California) Kessinger Hunter (Overland Park, Kansas) Landmark Organization (Austin, Texas) Lawrence Gtoup (St. Louis, MO) Lee’s Summit Economic Development Council (Lee’s Summit, Missouri) Lewis and Roca Lowe’s Companies, Inc. (West Bloomfield, MI) Lund Cadillac Marriott International, Inc. (Washington, D.C.) MCO Properties Meritage Homes Metropolitan Housing Corporation (Tucson, Arizona) Monterey Homes Mountain Funding (Charlotte, North Carolina) Navajo Nation Division of Economic Development Opus Northwest Corporation Opus West Corporation Pederson Group, Inc. Phelps Dodge Corporation Piper Jaffray (Kansas City, Missouri) Pivotal Group Pulte Home Corporation Pulte Homes of Greater Kansas City Pyramid Development (St. Louis, Missouri) Ralph J. Brekan & Company RED Development (Kansas City, Missouri) R.H. Johnson & Company (Kansas City, Missouri) Richmond American Homes River Run Development (Boise, Idaho) Royal Properties (Champaign, Illinois) Salt River Project Steiner + Associates, Inc. (Columbus, Ohio) Summit Development Group (St. Louis, Missouri) SWD Holdings (San Francisco, California) The Innova Group Tucson (Tucson, Arizona) The University of Arizona Department of Economic Development (Tucson, Arizona) The University of Arizona Medical Center (Tucson, Arizona) Trammell Crow Residential Union Homes (Salt Lake City, Utah) Unified Government of Wyandotte County and City of Kansas City, Kansas Wal-Mart, Inc. (Bentonville, Arkansas) Waste Management Wells Fargo Bank NA Widewaters (Syracuse, New York)

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Wolfswinkel Group

EXHIBIT B

Resume of Eric S. Lander, Principal Canyon Research Southwest, Inc.

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ERIC S. LANDER

EDUCATION In May, 1981, Mr. Lander received a B.S. in Marketing from the Arizona State University College of Business Administration. He attended Arizona State University from September 1977 to May 1981, and received honors status for his superior cumulative grade point average. During this time, he was an active member of the Marketing Club and National AMA as well as a participant in several research projects involving both local and national firms. In May, 1992, Mr. Lander received a Masters in Real Estate Development and Investment from New York University, graduating with honors.

BUSINESS EXPERIENCE Canyon Research Southwest, Inc. President (October 1984 to Present)

Established Canyon Research Southwest, Inc. as a multi-disciplined real estate consulting firm designed to provide comprehensive research and analysis to the development, financial, investment, and municipal communities. Responsibilities include direct marketing, project management, staffing, and client relations. The firm has performed in excess of 400 major consulting assignments with over 75 local and national clients. Fields of expertise include market and feasibility analysis of large-scale master planned communities, freeway oriented mixed-use projects, retail centers, office complexes, business parks, and hotels. Additional services include fiscal impact studies, property valuation, and development plan analysis.

Mountain West Research Associate (December 1988 to January 1990) Senior Consultant (October 1983 to October 1984)

Mr. Lander assisted in managing the Commercial Real Estate Services Division of Mountain West, Arizona's largest real estate and economic development consulting firm. Responsibilities included direct marketing, personnel management, client relations, and consulting on large-scale commercial, office, industrial, and hotel projects. Also contributed to several real estate publications and assisted in the management and marketing of the firm's commercial, office, and industrial (COI) data base.

Iliff, Thorn & Company Marketing Assistant (January 1982 to December 1983)

Joined Iliff, Thorn & Company during its infancy and became solely responsible for providing in- house marketing support services to its commercial real estate brokers. These services included demographic research, office/industrial/retail market studies, raw land sales packages, site selection analysis, client relations, and property research. Major accomplishments included establishing and implementing office and industrial absorption studies, devised central office market and available raw land files, and organized the development of an industrial/retail map. Canyon Research Southwest, Inc. 79 49183665.6

Also, during this time, Mr. Lander obtained a real estate sales license and became involved in commercial brokerage activities.

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ERIC S. LANDER Page 2 RANGE OF EXPERIENCE In 1987, Mr. Lander, in cooperation with the Drachman Institute of Regional Land Planning, published a working paper titled "Land Development as Value Added in the Development Process and Appropriate Criteria to Rank Sites for Selection of Master Planned Satellite Communities." Since the publication of this working paper, Mr. Lander has conducted numerous market feasibility studies on existing and proposed, large-scale, master planned communities in the Southwestern United States, totaling over 80,000 acres. The working paper was also evaluated and utilized by such prestigious universities as Harvard, M.I.T. and the University of North Carolina as part of their Masters program in Real Estate, City and Regional Planning, and Business. Mr. Lander is an instructor with the Commercial Real Estate Institute, teaching classes in Market Analysis, Commercial Property Valuation and Land Valuation. Developed a model designed to evaluate and rank the development potential of freeway interchanges. The methodology for ranking freeway properties is based on a list of 25 criteria which provide a framework to efficiently compare the strengths and weaknesses of various freeway sites. Seven (7) criteria have been established which apply to metropolitan area economic base and real estate market, five (5) criteria evaluate the region influenced by the presence of the freeway in question, and thirteen (13) interchange and site-specific criteria are aimed at determining future real estate development opportunities. This model has been utilized in evaluating freeway-oriented, mixed-use projects anchored by regional malls, business parks, office complexes, and hotels. Mr. Lander has provided consulting services on downtown redevelopment and historic preservation efforts. Recent examples include a heritage tourism study for the Erie Canal terminus in Buffalo, New York; evaluation of potential office, retail, hotel and arena development in the downtown areas of Glendale and Mesa, Arizona; retail market evaluation and redevelopment plan for downtown Warsaw, Missouri; a downtown master plan for downtown Lee’s Summit, Missouri; and a redevelopment plan for the 24 Highway Corridor in Independence, Missouri. Mr. Lander has conducted TIF and TDD Revenue Projections for a variety of large-scale retail projects in Missouri and Kansas. Tax Increment Financing and Transportation Development Districts are government-backed funding mechanisms designed to finance project-specific public infrastructure improvement. Funded is provided via the issue and sale of bonds. In the case of Tax Increment Financing the bonds are repaid with incremental increases in property tax and sales tax revenue generated by the designated redevelopment area. Transportation Development Districts involve the levy of an additional sales tax on businesses operating within the redevelopment area. Mr. Lander has conducted STAR Bond Feasibility and Market Studies on several proposed developments in Kansas, including the Kansas City Tourism District, Legends at Village West, Kansas City Research & Medical Campus, and Rosedale Station Shopping Center. The Market Study evaluates the market positioning, market demand, short-term development potential, and economic impact for the proposed Redevelopment District. Meanwhile, the Feasibility Study provides a STAR Bond revenue vs. costs comparison to determine the ability of the Redevelopment District to cover debt service for the projected STAR Bond obligations throughout the bond maturity period.

EXHIBIT D

STAR BOND ELIGIBILITY FINDING

See Attached

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