73580000 Midtown Miami Community Development

NEW ISSUE - BOOK-ENTRY-ONLY NOT RATED LIMITED OFFERING In the opinion of Bond Counsel, assuming continuing compliance with certain tax covenants, interest on the Series 2004A Bonds is excluded from gross income for federal income tax purposes under existing statutes, regulations, rulings and court decisions. Interest on the Series 2004A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, see “TAX MATTERS” herein for a description of the alternative minimum tax on corporations and certain other federal tax consequences of ownership of the Series 2004A Bonds. Bond Counsel is further of the opinion that the Series 2004A Bonds and income thereon, are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations as defined in Chapter 220. For a more complete discussion of tax aspects, see “TAX MATTERS” herein. $73,580,000 MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT (Miami-Dade County, Florida) Special Assessment and Revenue Bonds, Series 2004A (Parking Garage Project) Dated: Date of Delivery Due: May 1, as shown below The Midtown Miami Community Development District (Miami-Dade County, Florida) Special Assessment and Revenue Bonds, Series 2004A (Parking Garage Project) (the “Series 2004A Bonds”) are being issued by Midtown Miami Community Development District (the “District”) in fully registered form, without coupons, in denominations of $5,000 and integral multiples thereof; provided, however, that the Series 2004A Bonds will be deliverable to the initial purchasers thereof only in minimum amounts of $100,000 or integral multiples of $5,000 in excess of $100,000. The Series 2004A Bonds will bear interest at the rates set forth below, calculated on the basis of a 360-day year comprised of twelve thirty-day months, payable semi-annually on each May 1 and November 1, commencing November 1, 2004. The Series 2004A Bonds, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York. Purchases of beneficial interests in the Series 2004A Bonds will be made in book-entry-only form and purchasers of beneficial interests in the Series 2004A Bonds will not receive physical bond certificates. For so long as the book-entry only system is maintained, the principal of, premium, if any, and interest on the Series 2004A Bonds will be paid from the sources described herein by Wachovia Bank, National Association, as trustee (the “Trustee”), to DTC as the registered owner thereof. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the beneficial owners is the responsibility of the DTC Participants and Indirect Participants, as more fully described herein. Any purchaser, as a beneficial owner of a Series 2004A Bond, must maintain an account with a broker or dealer who is, or acts through, a DTC Participant in order to receive payment of the principal of, premium, if any, and interest on such Series 2004A Bond. See “BOOK-ENTRY ONLY SYSTEM” herein. Proceeds of the Series 2004A Bonds will be used to provide funds for (i) the payment of a portion of the costs of the construction of certain parking facilities, public open space and other public improvements within the District (as more particularly described herein, the “Series 2004A Project”), (ii) the payment of interest on the Series 2004A Bonds through November 1, 2007, (iii) the funding of the Series 2004A Debt Service Reserve Account and (iv) the payment of the costs of issuance of the Series 2004A Bonds. See “PLAN OF FINANCE,” “THE SERIES 2004A PROJECT” and “APPENDIX C – Form of Indenture” herein. The District is a special-purpose government of the State of Florida, created in accordance with the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the “Act”) and Section 1.10(A)(21) of the Miami-Dade Home Rule Charter, by Ordinance No. 03-271, enacted by the Board of County Commissioners of Miami-Dade County, Florida on December 16, 2003. The Series 2004A Bonds are being issued pursuant to the Act, and a Master Trust Indenture dated as of July 1, 2004, as supplemented by a First Supplemental Trust Indenture dated as of July 1, 2004 (collectively, the “Indenture”), both entered into by and between the District and the Trustee. Capitalized terms not otherwise defined herein will have the meaning assigned to them in the Interlocal Agreement (defined herein) or the Indenture. The Series 2004A Bonds are secured by a pledge of the Pledged Revenues. The Pledged Revenues consist of (a) all revenues received by the District under the Interlocal Agreement dated May 28, 2004 among the City of Miami, Florida (the “City”), Miami-Dade County, Florida (the “County”) and the District (the “Interlocal Agreement”) and deposited in the Series 2004A Subaccount within the Revenue Fund pursuant to the Indenture, as further described herein, (b) all revenues received by the District from Special Assessments levied and collected on all or a portion of the District Lands with respect to the Series 2004A Bonds, including, without limitation, amounts received from any foreclosure proceeding for the enforcement of collection of such Special Assessments or from the issuance and sale of tax certificates with respect to such Special Assessments, and (c) all moneys on deposit in the Funds and Accounts established under the Indenture for the Series 2004A Bonds; provided, however, that Pledged Revenues will not include (i) any moneys transferred to the Rebate Fund, or investment earnings thereon, and (ii) “special assessments” levied and collected by the District under Section 190.022, Florida Statutes, for maintenance purposes or “maintenance special assessments” levied and collected by the District under Section190.021(3), Florida Statutes. The lien on the Special Assessments will be on a parity with other debt of the District being issued contemporaneously with the Series 2004A Bonds, as described herein. See “PLAN OF FINANCE” and “SECURITY FOR THE SERIES 2004A BONDS,” herein. The Series 2004A Bonds are subject to optional, mandatory and extraordinary mandatory redemption at the times, in the amounts, and at the redemption prices more fully described herein under the caption “DESCRIPTION OF THE SERIES 2004A BONDS — Redemption Provisions.” The Series 2004A Bonds authorized under the Indenture and the obligation evidenced thereby will not constitute a lien upon any property of or within the District, including, without limitation, the Series 2004A Project or any portion thereof in respect of which any such bonds are being issued, or any part thereof, but will constitute a lien only on the Pledged Revenues as set forth in the Indenture. Nothing in the Series 2004A Bonds or in the Indenture will be construed as obligating the District to pay the Series 2004A Bonds or the redemption price thereof or the interest thereon except from the Pledged Revenues, or as pledging the faith and credit of the District, the City, the County, or the State of Florida or any political subdivision thereof, or as obligating the District, the City, the County, or the State of Florida or any of its political subdivisions, directly or indirectly or contingently, to levy or to pledge any form of taxation whatever therefor. The purchase of the Series 2004A Bonds involves a degree of risk (See “BONDHOLDERS’ RISKS” herein) and is not suitable for all investors (See “SUITABILITY FOR INVESTMENT” herein). The Underwriter is limiting this Offering to “Accredited Investors” within the meaning of Chapter 517, Florida Statutes, as amended and the rules of the Florida Department of Financial Services promulgated thereunder; the limitation of the initial offering to Accredited Investors does not denote restrictions of transfer in any secondary market for the Series 2004A Bonds. The Series 2004A Bonds are not credit enhanced or rated and no application has been made for a rating with respect to the Series 2004A Bonds. Amounts, Maturities, Interest Rates, Price or Yield and Initial Cusip Numbers $25,100,000, 6.00% Term Bonds Due May 1, 2024 Price 100% Initial Cusip Number 59807P AA3 $48,480,000, 6.25% Term Bonds Due May 1, 2037 Yield 6.30% Initial Cusip Number 59807P AB1 ______This cover page contains certain information for quick reference only. It is not a summary of the Series 2004A Bonds. Investors must read this entire Limited Offering Memorandum to obtain information essential to the making of an informed investment decision. ______The Series 2004A Bonds are offered for delivery when, as and if issued by the District and accepted by the Underwriter, subject to the receipt of the opinion of Greenberg Traurig, P.A., Miami, Florida, Bond Counsel, as to the validity of the Series 2004A Bonds and the excludability of interest thereon from gross income for federal income tax purposes. Certain legal matters will be passed upon for the Underwriter by its counsel, Squire, Sanders & Dempsey L.L.P., Miami, Florida, for the District by its counsel, Billing, Cochran, Heath, Lyles, Mauro & Anderson, P.A., Fort Lauderdale, Florida for Midtown Partners, LLC by its counsel, Greenberg Traurig, P.A., Miami, Florida, for DDR Miami Avenue LLC by its counsel, Broad and Cassel, Boca Raton, Florida and for the Trustee by its counsel, Holland & Knight LLP, Miami, Florida. Dunlap & Associates, Inc., Winter Park, Florida, and Fidelity Financial Services, L.C., Hollywood, Florida, serve as co-financial advisors to the City. It is expected that the Series 2004A Bonds will be delivered in book-entry form through the facilities of DTC on or about July 28, 2004.

July 16, 2004

MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT

BOARD OF SUPERVISORS

Deborah Samuel Michael Ullian Richard Forrest Linda Nickels Aaron Newman

DISTRICT MANAGER

Severn Trent Services, Inc. Coral Springs, Florida

COUNSEL TO THE DISTRICT

Billing, Cochran, Heath, Lyles, Mauro & Anderson, P.A. Fort Lauderdale, Florida

SPECIAL COUNSEL

Edwards and Carstarphen Miami, Florida

FINANCIAL ADVISOR

Fishkind and Associates, Inc. Orlando, Florida

CO-FINANCIAL ADVISOR TO CITY OF MIAMI

Dunlap and Associates, Inc. Winter Park, Florida

Fidelity Financial Services, L.C. Hollywood, Florida

CONSULTING ENGINEER

Kimley-Horn and Associates, Inc. Miami, Florida

BOND COUNSEL

Greenberg Traurig, P.A. Miami, Florida No dealer, broker, salesperson or other person has been authorized by the District or the Underwriter to give any information or make any representations, other than those contained in this Limited Offering Memorandum, and if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. This Limited Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy and there will be no offer, solicitation or sale of the Series 2004A Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale.

The Underwriter has reviewed the information in this Limited Offering Memorandum in accordance with, and as part of, its responsibilities to investors under the United States federal securities laws as applied to the facts and circumstances of this transaction. The information set forth herein has been furnished by the District and obtained from sources, including the Developers, which are believed by the District and the Underwriter to be reliable, but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation of the Underwriter. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Limited Offering Memorandum, nor any sale made hereunder, will, under any circumstances, create any implication that there has been no change in the affairs of the District or the Developers since the date hereof.

The Series 2004A Bonds have not been registered under the Securities Act of 1933, nor has the Indenture been qualified under the Trust Indenture Act of 1939, in reliance upon exemptions contained in such laws. The registration or qualification of the Series 2004A Bonds under the securities laws of any jurisdiction in which they may have been registered or qualified, if any, will not be regarded as a recommendation thereof. None of such jurisdictions, or any of their agencies, have passed upon the merits of the Series 2004A Bonds or the accuracy or completeness of this Limited Offering Memorandum. TABLE OF CONTENTS

Page

SUMMARY STATEMENT ...... iii INTRODUCTION ...... 1 PLAN OF FINANCE...... 3 General...... 3 Allocation of Series 2004 Project ...... 5 Levy of Special Assessments...... 6 Additional Security for the Parking Garage Project Bonds...... 6 Anticipated Structure of the Assessment Levy...... 9 DESCRIPTION OF THE SERIES 2004A BONDS...... 9 General Description ...... 9 Redemption Provisions ...... 10 BOOK-ENTRY ONLY SYSTEM...... 13 SECURITY FOR THE SERIES 2004A BONDS...... 15 General...... 15 Economic Incentive Payments...... 16 Tax Increment Revenues...... 20 Special Assessments ...... 25 Debt Service Reserve Fund...... 33 Application of Pledged Revenues under Indenture ...... 34 Investment of Funds...... 35 Additional Obligations...... 36 BONDHOLDERS’ RISKS ...... 36 SOURCES AND USES OF FUNDS...... 42 DEBT SERVICE REQUIREMENTS...... 43 THE DISTRICT...... 44 General...... 44 Governance ...... 44 Powers and Authority ...... 45 The District Manager and Other Consultants ...... 47 THE SERIES 2004A PROJECT...... 47 Overview...... 47 Series 2004A Project...... 47 THE DEVELOPMENTS AND DEVELOPERS...... 48 Overview...... 48 Development Area 1 – Midtown Miami...... 51 Development Area 2 – Shops at Midtown Miami ...... 58 i TABLE OF CONTENTS

Page

Infrastructure...... 66 Zoning...... 67 Environmental...... 68 Market...... 69 Appraised Value...... 70 Utilities...... 70 TAX MATTERS...... 70 General...... 70 Tax Treatment of Original Issue Discount...... 71 AGREEMENT BY THE STATE ...... 72 LEGALITY FOR INVESTMENT ...... 72 SUITABILITY FOR INVESTMENT ...... 72 ENFORCEABILITY OF REMEDIES ...... 72 FINANCIAL STATEMENTS...... 73 LITIGATION...... 73 NO RATING...... 73 CONTINUING DISCLOSURE...... 74 UNDERWRITING ...... 74 CONSULTANTS...... 74 VALIDATION...... 75 FORWARD-LOOKING STATEMENTS...... 75 LEGAL MATTERS...... 75 AUTHORIZATION AND APPROVAL...... 76

APPENDICES

APPENDIX A Engineer’s Report APPENDIX B Interlocal Agreement APPENDIX C Form of Indenture APPENDIX D Assessment Methodology APPENDIX E Tax Increment Report APPENDIX F Certain Information about the City APPENDIX G Certain Information about the County APPENDIX H Proposed Form of Opinion of Bond Counsel APPENDIX I Forms of Continuing Disclosure Agreements APPENDIX J Appraisal ii SUMMARY STATEMENT

This Summary Statement is part of this Limited Offering Memorandum, and is subject in all respects to the more complete information and definitions contained in or incorporated in this Limited Offering Memorandum. This Summary Statement should not be considered to be a complete statement of the facts material to making an investment decision. The offering by the Midtown Miami Community Development District (the “District”) of its Special Assessment and Revenue Bonds, Series 2004A (Parking Garage Project) (the “Series 2004A Bonds” or the “Parking Garage Project Bonds”) to potential investors is made only by means of this entire Limited Offering Memorandum. No person is authorized to detach this Summary Statement from this Limited Offering Memorandum or to otherwise use it without the entire Limited Offering Memorandum. Unless otherwise defined, all capitalized terms in this Summary Statement will be as defined herein, in the Interlocal Agreement (herein defined), the Indenture (herein defined).

Bondholders’ Risks; Limited Offering

An investment in the Series 2004A Bonds involves certain risks. The Series 2004A Bonds will be sold only to “Accredited Investors” within the meaning of Chapter 517, Florida Statutes, as amended, and the rules of the Florida Department of Financial Services promulgated thereunder, although there is no restriction upon resales of the Series 2004A Bonds. See “SECURITY FOR THE SERIES 2004A BONDS,” “BONDHOLDERS’ RISKS” and “SUITABILITY FOR INVESTMENT” herein.

The District

The District is a special-purpose government of the State of Florida created in accordance with the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the “Act”), Section 1.10(A)(21) of the Miami-Dade Home Rule Charter, by Ordinance No. 03-271 (the “Ordinance”) enacted by the Board of County Commissioners of Miami-Dade County, Florida on December 16, 2003. The land within the District (the “District Lands”) consists of approximately 56 acres of land located entirely within the City of Miami, Florida (the “City”), and within Miami-Dade County (the “County”). For more complete information about the District, see “THE DISTRICT” herein.

The Series 2004A Bonds

The Series 2004A Bonds are being issued pursuant to the Act and a Master Trust Indenture, dated as of July 1, 2004, as supplemented by a First Supplemental Trust Indenture dated as of July 1, 2004 (collectively, the “Indenture”), by and between the District and Wachovia Bank, National Association, as trustee (the “Trustee”). The Indenture is reproduced herein in “Appendix C – Form of Indenture.” The Series 2004A Bonds will be issued in fully registered form, in denominations of $5,000 and integral multiples thereof; provided, however, that the Series 2004A Bonds will be deliverable to the initial purchasers thereof only in minimum amounts of $100,000 or integral multiples of $5,000 in excess of $100,000. Interest on the Series 2004A Bonds is payable on May 1 and November 1 of each year, commencing

iii November 1, 2004, until maturity or prior redemption. The Series 2004A Bonds are subject to redemption prior to their stated dates of maturity, as provided herein. The Series 2004A Bonds are initially being issued in book-entry only form. See “DESCRIPTION OF THE SERIES 2004A BONDS” and “BOOK-ENTRY ONLY SYSTEM” herein.

Purpose of the Series 2004A Bonds

The Series 2004A Bonds are being issued in order to provide funds for (i) the payment of a portion of the costs of the Series 2004A Project, (ii) the payment of interest on the Series 2004A Bonds through November 1, 2007, (iii) the funding of the Series 2004A Debt Service Reserve Account and (iv) the payment of the costs of issuance of the Series 2004A Bonds. See “THE SERIES 2004A PROJECT” and “Appendix C – Form of Indenture” herein.

Plan of Finance

The District’s financing plan is the culmination of an agreement among the District, the City and the County, the terms of which are memorialized in the Interlocal Agreement among the District, the City and the County dated as of May 28, 2004 (the “Interlocal Agreement”). The District will issue two series of bonds under the Indenture. The Series 2004A Bonds will finance the construction of certain parking facilities, public open space and other public improvements. The District also expects to issue Special Assessment Bonds, Series 2004B (Infrastructure Project Bonds) (herein the “Series 2004B Bonds” or the “Infrastructure Project Bonds” and, collectively with the Series 2004A Bonds, the “Series 2004 Bonds”) to finance the construction of other infrastructure to support the Developments (defined herein), including utilities, landscaping, streetscapes and other public improvements. The bifurcation of the Series 2004 Bonds reflects the agreement of the City and the County to make certain payments to the District for the benefit of the Parking Garage Project Bonds (but not the Infrastructure Project Bonds) subject to certain development performance measures and other criteria as set forth in the Interlocal Agreement, as further discussed herein under the headings “PLAN OF FINANCE” and “SECURITY FOR THE SERIES 2004A BONDS.” The Series 2004B Bonds will not be secured by or payable from any portion of the payments from the City and the County to the District, or any other entity under the Interlocal Agreement but will be secured by a parity lien on the Special Assessments.

The Developers and the Developments

The lands within the District are expected to be developed as two distinct mixed-use projects, Midtown Miami and the Shops at Midtown (collectively, the “Developments”). Upon completion, it is currently expected that the Developments will contain a retail shopping center, residential condominium units with retail areas, an office tower with retail areas, public plazas, rental apartments, an entertainment facility with retail areas and a multi-use facility, and parking facilities. There are two primary developer groups associated with the Developments, each controlling distinct tracts (or portions thereof) within the District and, in some cases, the developable air rights (or certain levels of air rights) over other tracts. Each of the Developers is separately responsible for the development of their respective portions of the Developments. See “PLAN OF FINANCE” and “THE DEVELOPMENTS AND DEVELOPERS” herein for additional information regarding the Developers and the Developments.

iv Security for the Series 2004A Bonds

The Series 2004A Bonds are secured by a pledge of the Pledged Revenues under the Indenture. The Pledged Revenues consist of (a) all revenues received by the District under the Interlocal Agreement and deposited in the Series 2004A Account within the Revenue Fund pursuant to the Indenture, as further described herein, (b) all revenues received by the District from Special Assessments levied and collected on all or a portion of the District Lands with respect to the Series 2004A Bonds, including, without limitation, amounts received from any foreclosure proceeding for the enforcement of collection of such Special Assessments or from the issuance and sale of tax certificates with respect to such Special Assessments, and (c) all moneys on deposit in the Funds and Accounts established under the Indenture for the Series 2004A Bonds; provided, however, that Pledged Revenues will not include (i) any moneys transferred to the Rebate Fund, or investment earnings thereon, and (ii) “special assessments” levied and collected by the District under Section 190.022, Florida Statutes, for maintenance purposes or “maintenance special assessments” levied and collected by the District under Section190.021(3), Florida Statutes. The lien on and pledge of the Special Assessments is on a parity with the lien thereon in favor of the Series 2004B Bonds expected to be issued contemporaneously with the Series 2004A Bonds. See “PLAN OF FINANCE” and “SECURITY FOR THE SERIES 2004A BONDS” herein.

The Series 2004A Bonds authorized under the Indenture and the obligation evidenced thereby will not constitute a lien upon any property of or within the District, including, without limitation, the Series 2004A Project or any portion thereof in respect of which any such bonds are being issued, or any part thereof, but will constitute a lien only on the Pledged Revenues as set forth in the Indenture. Nothing in the Series 2004A Bonds or in the Indenture will be construed as obligating the District to pay the Series 2004A Bonds or the redemption price thereof or the interest thereon except from the Pledged Revenues, or as pledging the faith and credit of the District, the City, the County or the State of Florida or any political subdivision thereof, or as obligating the District, the City, the County, or the State of Florida or any of its political subdivisions, directly or indirectly or contingently, to levy or to pledge any form of taxation whatever therefor.

Debt Service Reserve Fund

A Series 2004A Debt Service Reserve Account will be created under the Indenture within the Debt Service Reserve Fund for the benefit of the Series 2004A Bonds. Pursuant to the Indenture, “Series 2004A Debt Service Reserve Requirement” will mean with respect to the Series 2004A Bonds, an amount equal to the least of (i) the maximum annual Debt Service Requirement for the Outstanding Series 2004A Bonds, (ii) 125% of the average annual Debt Service Requirement for the Outstanding Series 2004A Bonds, or (iii) 10% of the original proceeds (within the meaning of the Code) of the Series 2004A Bonds. See “SECURITY FOR THE SERIES 2004A BONDS – Debt Service Reserve Fund” herein.

Additional Obligations

As stated above, concurrently with the issuance of the Series 2004A Bonds, the District expects to issue the Series 2004B Bonds in an aggregate principal amount of $30,020,000,

v payable on a parity from the Special Assessments but not payable from the Interlocal Agreement Revenues. The District will not issue any obligations, other than the Series 2004 Bonds, payable from Pledged Revenues, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge, payable from Pledged Revenues, except in the ordinary course of business; provided, however, that the District may issue bonds to refund all or a portion of the Series 2004 Bonds. See “SECURITY FOR THE SERIES 2004A BONDS – Additional Obligations” herein.

vi LIMITED OFFERING MEMORANDUM

relating to

$73,580,000 MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT (MIAMI-DADE COUNTY, FLORIDA) SPECIAL ASSESSMENT AND REVENUE BONDS, SERIES 2004A (PARKING GARAGE PROJECT)

INTRODUCTION

The purpose of this Limited Offering Memorandum, including the cover page, summary statement and appendices hereto, is to provide certain information in connection with the issuance and sale by the Midtown Miami Community Development District (the “District”) of its $73,580,000 Special Assessment and Revenue Bonds, Series 2004A (Parking Garage Project) (the “Series 2004A Bonds”).

PROSPECTIVE INVESTORS SHOULD BE AWARE OF CERTAIN RISK FACTORS, ANY ONE OR MORE OF WHICH, IF MATERIALIZED TO A SUFFICIENT DEGREE, COULD DELAY OR PREVENT PAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, AND/OR INTEREST ON THE SERIES 2004A BONDS. THE SERIES 2004A BONDS ARE NOT A SUITABLE INVESTMENT FOR ALL INVESTORS. THE SERIES 2004A BONDS ARE BEING OFFERED INITIALLY ONLY TO “ACCREDITED INVESTORS” WITHIN THE MEANING OF CHAPTER 517, FLORIDA STATUTES, AS AMENDED, AND THE RULES OF THE FLORIDA DEPARTMENT OF FINANCIAL SERVICES PROMULGATED THEREUNDER. See “SUITABILITY FOR INVESTMENT” and “BONDHOLDERS’ RISKS” herein.

The District is a local unit of special-purpose government of the State of Florida (the “State”), created pursuant to the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the “Act”), Section 1.10(A)(21) of the Miami-Dade Home Rule Charter, by Ordinance No. 03-271 (the “Ordinance”) enacted by the Board of County Commissioners of Miami-Dade County, Florida on December 16, 2003. The District was established for the purpose of financing the acquisition and construction of and managing the maintenance and operation of the infrastructure necessary for development of the lands within the District. The Act authorizes the District to issue bonds for several purposes, including, but not limited to, financing the cost of acquisition and construction of parking facilities, roadways, water and sewer facilities, a stormwater management system, streetscape and landscape improvements.

The District encompasses approximately 56 gross acres of land (the “District Lands”) located entirely within the City of Miami, Florida (the “City”) and within Miami-Dade County, Florida (the “County”). For more complete information about the District, its Board of Supervisors and the District Manager, see “THE DISTRICT” herein.

1 The District Lands are expected to be developed as two distinct mixed-use projects: Midtown Miami and the Shops at Midtown (collectively, the “Developments”). Upon completion, it is currently expected that the Developments will contain a retail shopping center, residential condominium units with retail areas, rental apartments, an entertainment facility with retail areas, a multi-use facility, and parking facilities. There are two primary developer groups associated with the Developments, each controlling distinct tracts (or portions thereof) within the District and, in some instances, the developable air rights (or certain levels of air rights) over other tracts. Each of the Developers is separately responsible for the development of their respective portion of the Developments. See “PLAN OF FINANCE,” “THE DEVELOPMENTS AND DEVELOPERS” herein for additional information regarding the Developers and the Developments.

The Series 2004A Bonds are being issued pursuant to the Act, a Master Trust Indenture dated as of July 1, 2004, as supplemented by a First Supplemental Trust Indenture dated as of July 1, 2004 (collectively, the “Indenture”) both by and between the District and Wachovia Bank, National Association, as trustee (the “Trustee”). Reference is made to the Indenture for a full statement of the authority for, and the terms and provisions of, the Series 2004A Bonds. All capitalized terms used in this Limited Offering Memorandum that are not defined herein will have the respective meanings set forth in the Interlocal Agreement (defined below) or the Indenture. See “Appendix B – Interlocal Agreement” and “Appendix C – Form of Indenture” herein.

The District’s financing plan is the culmination of an agreement among the District, the City and the County, the terms of which are memorialized in the Interlocal Agreement among the District, the City and the County dated as of May 28, 2004 (the “Interlocal Agreement”). The District will issue two separate series of bonds under the Indenture. The Series 2004A Bonds (sometimes called the “Parking Garage Project Bonds” herein) will finance the construction of certain parking facilities and public open space (the “Series 2004A Project”). Concurrently with the issuance of the Series 2004A Bonds, the District expects to issue Special Assessment Bonds Series 2004B (Infrastructure Project Bonds) (herein the “Series 2004B Bonds” or the “Infrastructure Project Bonds” and, collectively with the Series 2004A Bonds, the “Series 2004 Bonds”) to finance the construction of other infrastructure to support the Developments, including utilities, landscaping, streetscapes and other public improvements (the “Series 2004B Project” and collectively, with the Series 2004A Project, the “Series 2004 Project”). The Series 2004B Bonds will be secured on a parity with the 2004A Bonds with respect to the Special Assessments. The bifurcation of the Series 2004 Bonds reflects the agreement of the City and the County to make certain payments for the benefit of the Parking Garage Project Bonds (but not the Infrastructure Project Bonds) subject to certain development performance measures and other criteria as set forth in the Interlocal Agreement, as further discussed herein under the headings “PLAN OF FINANCE” and “SECURITY FOR THE SERIES 2004A BONDS.” The Series 2004B Bonds will not be secured by or payable from any portion of the payments from the City and the County to the District or any other entity under the Interlocal Agreement.

The Series 2004A Bonds are being issued in order to provide funds for (i) the payment of the cost of the Series 2004A Project, (ii) the payment of interest on the Series 2004A Bonds through November 1, 2007, (iii) the funding of the Series 2004A Debt Service Reserve Account,

2 and (iv) the payment of the costs of issuance of the Series 2004A Bonds. See “THE SERIES 2004A PROJECT” and “Appendix C – Form of Indenture” herein.

The Series 2004A Bonds authorized under the Indenture and the obligation evidenced thereby will not constitute a lien upon any property of or within the District, including, without limitation, the Series 2004A Project or any portion thereof in respect of which any such bonds are being issued, or any part thereof, but will constitute a lien only on the Pledged Revenues as set forth in the Indenture and described herein. Nothing in the Series 2004A Bonds authorized under the Indenture or in the Indenture will be construed as obligating the District to pay the Series 2004A Bonds or the redemption price thereof or the interest thereon except from the Pledged Revenues, or as pledging the faith and credit of the District, the City, the County or the State or any political subdivision thereof, or as obligating the District, the City, the County or the State or any of its political subdivisions, directly or indirectly or contingently, to levy or to pledge any form of taxation whatever therefor.

Set forth herein are brief descriptions of the District, the Developments, the Developers and the Series 2004A Project, together with summaries of terms of the Series 2004A Bonds, the Interlocal Agreement, the Indenture and certain provisions of the Act. All references herein to the Interlocal Agreement, the Indenture and the Act are qualified in their entirety by reference to such documents and all references to the Series 2004A Bonds are qualified by reference to the definitive forms thereof and the information with respect thereto contained in the Indenture. Copies of those documents not attached hereto may be obtained during the period of the offering of the Series 2004A Bonds from the Underwriter at Banc of America Securities LLC, 250 South Park Avenue, Suite 400, Winter Park, Florida 32789, and thereafter from the District Manager at Severn Trent Services, Inc., 10300 N.W. 11th Manor, Coral Springs, Florida 33071 upon payment of any costs for reproduction and mailing. The full text of the Interlocal Agreement appears as Appendix B and the full text of the Indenture appears as Appendix C attached hereto.

PLAN OF FINANCE

General

The District Lands are planned for two distinct developments: the Shops at Midtown, primarily retail in nature with certain apartments and live/work units incorporated therein, and Midtown Miami, primarily residential in nature with some retail, as well as office, hotel and entertainment components. Upon completion, it is currently expected that the Developments will contain a retail shopping center, public plazas, residential condominium units with retail areas, rental apartments, a hotel, an entertainment facility with retail areas and a spa, and parking facilities. The District was established for the purpose of financing the acquisition and construction of and managing the maintenance and operation of the infrastructure necessary for development of the District Lands. The Act authorizes the District to issue bonds for purposes, among others, of financing the cost of acquisition and construction of parking facilities, roadways, water and sewer facilities, a stormwater management system and streetscape and landscape improvements.

3 The District’s financing plan is the culmination of an agreement between the District, the City and the County, the terms of which are memorialized in the Interlocal Agreement. The District expects to issue two separate series of bonds under the Indenture, the Series 2004A Bonds (the Parking Garage Project Bonds) to finance the Series 2004A Project and the Series 2004B Bonds (the Infrastructure Project Bonds) to finance the Series 2004B Project. The bifurcation of the Series 2004 Bonds reflects the agreement of the City and the County to make certain payments to the District for the benefit of the Parking Garage Project Bonds (but not the Infrastructure Project Bonds) subject to development performance measures and other criteria as set forth in the Interlocal Agreement, as further discussed below and herein under the heading “SECURITY FOR THE SERIES 2004A BONDS.” The Infrastructure Project Bonds will not be secured by or payable from any portion of the payments to the District from the City and County or any other entity under the Interlocal Agreement, but will be secured by a parity lien on the Special Assessments as further described herein.

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4 Allocation of Series 2004 Project

The purpose of the Series 2004 Bonds is to provide funds for a portion of the acquisition and construction costs of the Series 2004 Project, which includes both the Series 2004A Project and the Series 2004B Project. The Series 2004 Project consists of public improvements to be acquired or constructed by the District, all as described in the Amended Engineer’s Report dated April 21, 2004 (the “Engineer’s Report”) prepared for the District by Kimley-Horn and Associates, Inc. (the “District Engineer”). See Appendix A - “Engineer’s Report.” The table below sets forth the allocation of the Series 2004 Project costs and their source of funding. As shown below, a portion of the costs associated with the Parking Improvements and the Mid Block Plaza and Other Public Improvements will be funded from the sale of the Parking Garage Project Bonds. The balance of the Series 2004 Project will be funded by a combination of the sale of the Infrastructure Project Bonds and contribution by the Developers pursuant to the Completion Agreements which contribution may be offset by state or local grant moneys, as summarized herein.

Allocation of Project Cost by Source of Funding Parking Infrastructure Total (1) Project Project Summary of Project Costs (1) Roadway Improvements $5,597,737 $ $5,597,737 Water and Sewer Systems 2,290,822 - 2,290,822 Stormwater Management Systems 2,791,286 - 2,791,286 Landscaping and Streetscaping 6,387,668 - 6,387,668 Irrigation 510,013 - 510,013 Plaza at Entertainment Block 3,617,019 - 3,617,019 Miscellaneous Public Improvements 5,136,166 - 5,136,166 Parking Improvements 45,337,889 45,337,889 - Mid Block Plaza and Other Public Improvements 5,866,130 5,866,130 - Project Costs $77,534,730 $51,204,019 $26,330,711

Sources of Funds Parking Garage Project Bonds (2) $51,204,019 $51,204,019 Infrastructure Project Bonds (2) 20,600,000 - $20,600,000 Developers Completion Agreements (3) 5,730,711 - 5,730,711 Sources of Funds $77,534,730 $51,204,019 $26,330,711 Notes: (1) From the Engineer’s Report. See “Appendix A - Engineer’s Report” herein. (2) These amounts represent the total expected to be funded by the Series 2004 Bonds, both include projected interest earnings on the funds held by the District and invested assuming an earnings rate of 0.5%/year. (3) Pursuant to the Completion Agreements (herein defined), the Developers will be required to contribute these funds if necessary to complete the installation of the improvements for the Series 2004 Project. The Developers have applied for certain federal, state and local grants which, if received, would be contributed to the District, thereby reducing the Developers’ required contribution by a like dollar amount. There is no assurance that the Developers will be successful in their pursuit of this grant funding.

5 Levy of Special Assessments

The District will levy Special Assessments, as defined herein, in the principal amount of the Series 2004 Bonds on the District Lands benefiting from the Series 2004 Project. See “THE SECURITY FOR THE SERIES 2004A BONDS – Special Assessments” and “Appendix D - Assessment Methodology.” This assessment lien is a parity lien shared ratably between the Parking Garage Project Bonds and the Infrastructure Project Bonds. The District has the power, in each year for the full term of the Series 2004 Bonds, to collect annual installments against this assessment lien in an amount equal to the aggregate annual debt service on the Series 2004 Bonds. As further described herein, the District does not intend to collect the full amount of the Special Assessments with respect to the Series 2004A Project to the extent it receives Interlocal Agreement Revenues.

Additional Security for the Parking Garage Project Bonds

Generally. Pursuant to the Interlocal Agreement, the City and the County have agreed to make certain contributions to the District, subject to the completion of certain development performance thresholds. These contributions relate only to the Series 2004A Project and the District has pledged all amounts received under the Interlocal Agreement to the payment of debt service on the Parking Garage Project Bonds only and not with respect to the Infrastructure Project Bonds. It is the intent and expectation that when, and if, the Stage 1 and 2 performance thresholds under the Interlocal Agreement have been met, as summarized below, the City and the County will make contributions to the District that are expected to be equal to the debt service requirements for the Parking Garage Project Bonds and will, subject to their replacement with another contribution source, as described below under “Tax Increment Revenues,” remain payable and in effect for the full term of the Parking Garage Project Bonds.

The Developers expect that the Stage 1 performance threshold will be met by December 31, 2006, and that the Stage 2 performance threshold will be met by December 31, 2007; provided, however, no assurance can be given that there will be no delays in reaching either of such thresholds. Failure to meet either of such thresholds would result in a delay in the payment of certain Economic Incentive Payments (defined herein) and/or Tax Increment Revenues (defined herein) for a full year or more.

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6 Performance Thresholds. The conditions precedent to the County and City contributions as set forth in the Interlocal Agreement are generally broken down into two stages. Stage 1 sets forth the minimum level of development necessary to require the City and the County to begin making any contributions to the District under the Interlocal Agreement. Stage 2 sets forth the minimum level of development necessary to require the City and the County to increase the initial level of contribution to an amount anticipated to cover the annual debt service requirement on the Parking Garage Project Bonds. The following table sets forth the anticipated development and the performance thresholds for Stages 1 and 2.

Equivalent Development Anticipated Development Units (“DU”) Performance Thresholds

STAGE 1 “Stage 1 Performance Threshold” is defined to be: a. Retail – minimum 600,000 sq. ft. of retail 600.00 x Certificates of Occupancy, as space defined in the Interlocal b. Public Improvements – Parking and 258.56 Agreement (“COs”) must be issued Midtown Plaza, both as described in the for at least 90% of Stage 1 DUs Engineer’s Report (1,109.79 DUs); and c. Residential Condominium – The first x The above COs requirement must tower with residential and retail spaces – 374.50 include at least 600,000 sq. ft. of 374,500 sq. ft. retail space

Stage 1 DUs Subtotal 1,233.06

STAGE 2 “Stage 2 Performance Threshold” is defined to be: a. Hotel/Spa - 235,000 sq. ft. of planned 235.00 x Stage 1 performance measure met; hotel/spa development and b. Apartments - 292,000 sq. ft.. of improved 292.00 x COs must be issued for at least area 90% of Stage 1 & 2 cumulative c. Office - minimum 150,000 sq. ft. of DUs (2,075.01 DUs); and improved office space 150.00 x The above COs requirement must d. Residential Condominium – The second include at least 150,000 sq. ft. of tower with residential and retail spaces – 395.50 office space 395,500 sq. ft.

Stage 2 DUs Subtotal 1,072.50

Stage 1&2 Cumulative DUs Total 2,305.56

The Interlocal Agreement provides flexibility to substitute different product types from those set forth in Stage 1 and 2 so long as the cumulative DU totals at either stage are greater than or equal to 90% of the development units totals for each stage. However, two absolute requirements exist at each stage: (1) Stage 1 must include the issuance of a CO for the retail component; and (2) Stage 2 must include the issuance of a CO for the office (unless certain circumstances arise making the completion of the office impossible).

7 Economic Incentive Payments. Pursuant to the Interlocal Agreement, the City and the County have each agreed to make fixed annual payments (“Economic Incentive Payments” or “EIP”) each year beginning in the calendar year following the year in which the Stage 1 performance thresholds are met and continuing through the term of the Parking Garage Project Bonds. The City and the County have secured their separate commitments to make Economic Incentive Payments by a covenant of the respective governments to budget and appropriate legally available Non-Ad Valorem Revenues (as hereinafter defined) each year in an amount sufficient to pay that entity’s respective portion of the EIP. See “SECURITY FOR THE SERIES 2004A BONDS—Economic Incentive Payments,” herein. When Stage 1 performance thresholds have been met, the City’s and the County’s collective EIP level will equal $2,559,680 per year. When Stage 2 performance thresholds have been met, the City’s and the County’s collective EIP level will increase to the lesser of $5,999,360 per year or the annual debt service requirements of the Parking Garage Project Bonds. The County is responsible for the payment of 40.9% of the EIP and the City is responsible for the payment of 59.1% of the EIP. Under certain circumstances the County’s and City’s obligation to contribute EIP may be extinguished and replaced by Tax Increment Revenues, described below. See “SECURITY FOR THE SERIES 2004A BONDS—Economic Incentive Payments,” herein.

Tax Increment Revenues. The Interlocal Agreement also provides a method to replace the EIP with tax increment revenues to be derived from the implementation of a community redevelopment plan by a community redevelopment agency pursuant to Chapter 163, Florida Statutes, expected to be created by the County and the City and to provide for a community redevelopment area that has boundaries coterminous with those of the District (the “Midtown CRA Agency” and the “Midtown CRA,” respectively). Under the Interlocal Agreement, “Tax Increment Revenues” means the incremental increase in ad valorem tax revenues generated within the Midtown CRA as a result of the Developments. The Interlocal Agreement also sets forth the agreement that the County and the City (a) intend to create the Midtown CRA Agency and the Midtown CRA, (b) and once created, will cause the Midtown CRA to remain in effect and the Tax Increment Revenues to remain unencumbered (except as contemplated under the Interlocal Agreement) for so long as the Parking Garage Project Bonds are outstanding, and (c) will cause the Midtown CRA Agency, subject to the performance thresholds, to contribute the maximum legally available Tax Increment Revenues to the District annually (but in an amount not to exceed annual debt service on the Parking Garage Project Bonds). See “SECURITY FOR THE SERIES 2004A BONDS—Tax Increment Revenues,” herein.

Termination of EIP. Under the Interlocal Agreement, the obligation of the City and the County to contribute EIP will terminate under two scenarios. First, if the Midtown CRA and the Redevelopment Trust Fund (as defined in the Interlocal Agreement) is established no later than June 30, 2005 and (a) the Interlocal Agreement is amended to include the Midtown CRA Agency as a party, and (b) the District, the City and the County agree that the percentage of Tax Increment Revenues to be contributed by the County and the City in each calendar year while the Parking Garage Project Bonds are outstanding under the Indenture, will be equal to the lesser of (i) the maximum percentage authorized by Section 163.387, Florida Statutes, which currently is 95% (the “Maximum Percentage”), or (ii) a percentage less than the Maximum Percentage but sufficient to enable the Midtown CRA Agency to pay to the District in each calendar year Tax Increment Revenues equal to the debt service on the Parking Garage Project Bonds in each such year for the remaining term of the Parking Garage Project Bonds. If the Midtown CRA is 8 created prior to June 30, 2005, the base year value for calculating Tax Increment Revenues will be established based on the state of development reflected in the 2004/2005 tax roll established by the County Tax Appraiser’s office. The assessed value for the District Lands, as of January 1, 2004, is not yet available.

Second, in the event that the Midtown CRA and the Redevelopment Trust Fund (as defined in the Interlocal Agreement) is created after June 30, 2005, the obligation to contribute EIP will terminate, when and if, the following conditions are met (a) the County and the City are current on all EIP due under the Interlocal Agreement; (b) the Interlocal Agreement is amended to include the Midtown CRA Agency as a party, (c) the City, the County and the District agree that the percentage of Tax Increment Revenues to be contributed by the County and the City in each calendar year while the Parking Garage Project Bonds are outstanding under the Indenture, will be equal to the lesser of (i) the Maximum Percentage or (ii) a percentage less than the Maximum Percentage but sufficient to enable the Midtown CRA Agency to pay to the District in each calendar year Tax Increment Revenues equal to the debt service on the Parking Garage Project Bonds in each such year for the remaining term of the Parking Garage Project Bonds; and (d) an independent financial advisor certifies in writing to the District, the City, the County and the Trustee, that funds on deposit in the Midtown CRA redevelopment trust fund are at least equal to the Maximum Annual Debt Service on the Parking Garage Bonds.

The City and County have represented to the District that they have initiated the steps necessary to create the Midtown CRA. See “SECURITY FOR THE 2004A BONDS –Tax Increment Revenues,” herein.

Anticipated Structure of the Assessment Levy

The District has taken the appropriate legal steps to levy the full amount of the Special Assessments. In each year, prior to the certification of the District’s assessment roll, the District will determine what level of EIP and/or Tax Increment Revenues are expected to be available. The amount of the assessments to be collected in each year for the Parking Garage Project Bonds will be reduced and offset by an amount equal to the EIP and/or Tax Increment Revenues expected in that year. All EIP and Tax Increment Revenues received by the District will be held by the Trustee under the Indenture for the benefit of only the Parking Garage Project Bonds. The Special Assessments levied in each year will secure both the Parking Garage Project Bonds and the Infrastructure Project Bonds, ratably, measured by the requirements of each Series in that particular year, regardless of the level of EIP and/or Tax Increment Revenues received or to be received by the District.

DESCRIPTION OF THE SERIES 2004A BONDS

General Description

The Series 2004A Bonds will be dated, will bear interest at the rates per annum (computed on the basis of a 360-day year consisting of twelve thirty-day months) and, subject to the redemption provisions set forth below, will mature on the dates and in the amounts set forth on the cover page of this Limited Offering Memorandum. Interest on the Series 2004A Bonds will be payable semi-annually on each May 1 and November 1 commencing November 1, 2004

9 until maturity or prior redemption. Wachovia Bank, National Association, is the initial Trustee, Paying Agent and Registrar for the Series 2004A Bonds.

The Series 2004A Bonds will be issued in fully registered form, without coupons, in denominations of $5,000 and integral multiples thereof; provided, however, that the Series 2004A Bonds will be deliverable to the initial purchasers thereof only in minimum amounts of $100,000 or integral multiples of $5,000 in excess of $100,000. Upon initial issuance, the ownership of the Series 2004A Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), and purchases of beneficial interests in the Series 2004A Bonds will be made in book-entry only form. The Series 2004A Bonds will initially be offered and sold only to “Accredited Investors” within the meaning of Chapter 517, Florida Statutes, as amended, and the rules of the Florida Department of Financial Services promulgated thereunder, although there is no limitation on resales of the Series 2004A Bonds. See “BOOK-ENTRY ONLY SYSTEM” and “SUITABILITY FOR INVESTMENT” below.

Redemption Provisions

Optional Redemption. The Series 2004A Bonds may, at the option of the District, be called for redemption prior to maturity, in whole or in part, at any time on or after May 1, 2014 (less than all Series 2004A Bonds to be selected by lot), at a Redemption Price equal to 100% of the principal amount to be redeemed, plus accrued interest from the most recent Interest Payment Date to the redemption date.

Extraordinary Mandatory Redemption. The Series 2004A Bonds are subject to extraordinary mandatory redemption prior to maturity by the District in whole, on any date, or in part, on any Interest Payment Date, at an extraordinary mandatory redemption price equal to 100% of the principal amount of the Series 2004A Bonds to be redeemed, plus interest accrued to the redemption date, as follows:

(i) from prepayments of Special Assessments allocable to the Series 2004A Bonds, including any excess moneys in the Series 2004A Debt Service Reserve Account resulting from such Special Assessment prepayments.

(ii) from moneys on deposit in the Series 2004A Accounts and Subaccounts in the Series 2004 Funds and Accounts (other than the Rebate Fund) to the extent sufficient to pay and redeem all Outstanding Series 2004A Bonds (including accrued interest) and to pay all amounts owed to Persons under the Master Indenture.

(iii) on or after the Completion Date of the Series 2004A Project, from excess moneys remaining in the Series 2004A Acquisition and Construction Account of the Acquisition and Construction Fund; and on or after the later of November 1, 2007 or the Completion Date, from moneys remaining in the Series 2004A Capitalized Interest Subaccount.

(iv) on an annual basis, from excess moneys in the Series 2004A Revenue Subaccount not applied to the payment of regular debt service on the 10 Series 2004A Bonds or transferred to the Series 2004A Acquisition and Construction Account.

(v) from proceeds of any condemnation award (or sale proceeds if the sale was under threat of condemnation) in respect of all or any portion of the Series 2004A Project which are not to be used to rebuild, replace or restore the taken portion of the Series 2004 Project.

(vi) from amounts paid to the District following the damage or destruction of all or substantially all of the Series 2004A Project to such extent that, in the reasonable opinion of the District, the repair and restoration thereof would not be economical or would be impracticable; provided, however, that at least 45 days prior to such extraordinary mandatory redemption, the District is required to deliver to the Trustee (x) notice setting forth the redemption date and (y) a certificate of the Consulting Engineer confirming that the repair and restoration of the Series 2004A Project would not be economical or would be impracticable.

(vii) from amounts on deposit in the Series 2004A Debt Service Reserve Account in excess of the Series 2004A Debt Service Reserve Requirement.

See “Appendix C—Form of Indenture.”

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11 Mandatory Sinking Fund Redemption. The Series 2004A Bonds are subject to mandatory redemption in part by the District by lot prior to their scheduled maturity from moneys in the Series 2004A Sinking Fund Account established under the Indenture in satisfaction of applicable Amortization Installments at the Redemption Price of 100% of the principal amount thereof, without premium, together with accrued interest to the date of redemption on May 1 of the years and in the principal amounts set forth below:

2024 Term Bonds 2037 Term Bonds Year Principal Year Principal (May 1) Amount (May 1) Amount 2008 $ 250,000 2025 $2,495,000 2009 955,000 2026 2,655,000 2010 1,015,000 2027 2,825,000 2011 1,075,000 2028 3,010,000 2012 1,140,000 2029 3,200,000 2013 1,215,000 2030 3,410,000 2014 1,285,000 2031 3,630,000 2015 1,365,000 2032 3,865,000 2016 1,450,000 2033 4,110,000 2017 1,540,000 2034 4,380,000 2018 1,635,000 2035 4,660,000 2019 1,735,000 2036 4,960,000 2020 1,845,000 2037* 5,280,000 2021 1,960,000 2022 2,080,000 2023 2,210,000 2024* 2,345,000

______* Maturity.

Notice of Redemption. When required to redeem the Series 2004A Bonds under any provision of the Indenture or directed to do so by the District, the Trustee will cause notice of the redemption, either in whole or in part, to be mailed at least 30, but not more than 60, days prior to the redemption date to all Owners of Series 2004A Bonds to be redeemed (as such Owners appear on the Bond Register on the 5th day prior to such mailing), at their registered addresses, but failure to mail any such notice or defect in the notice or in the mailing thereof will not affect the validity of the redemption of the Series 2004A Bonds for which notice was duly mailed in accordance with the Indenture.

Effect of Notice of Redemption. Any Series 2004A Bonds duly called for redemption, for which funds have been deposited with the Trustee, will cease to bear interest from the specified redemption date, will no longer be secured by the Indenture and will be considered no longer Outstanding under the provisions of the Indenture.

12 BOOK-ENTRY ONLY SYSTEM

The Series 2004A Bonds will be available only in book-entry form initially in the principal amounts of $100,000 and integral multiples of $5,000 in excess thereof and thereafter in denominations of $5,000 and integral multiples thereof. Purchasers of the Series 2004A Bonds will not receive certificates representing their interests in the Series 2004A Bonds purchased. The District will enter into a letter of representations (the “Book-Entry Agreement”) with DTC providing for such book-entry system.

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Series 2004A Bonds. The Series 2004A Bonds will be issued as fully- registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for the Series 2004A Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of the Series 2004A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2004A Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to

13 receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2004A Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2004A Bonds, except in the event that use of the book-entry system for the Series 2004A Bonds is discontinued.

To facilitate subsequent transfers, all the Series 2004A Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Series 2004A Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2004A Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts the Series 2004A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Series 2004A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2004A Bonds, such as redemptions, tenders, defaults, and proposed amendments to the bond documents. For example, Beneficial Owners of the Series 2004A Bonds may wish to ascertain that the nominee holding the Series 2004A Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices will be sent to DTC. If less than all of the Series 2004A Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2004A Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Series 2004A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the Series 2004A Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or their Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary

14 practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, Agent, or the District, subject to any statutory or regulatory requirements as maybe in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Series 2004A Bonds at any time by giving reasonable notice to the District or Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.

The District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository); provided the District complies with the rules and regulations of DTC. In that event, Bond certificates will be printed and delivered.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof.

Neither the District nor the Trustee will have any responsibility or obligation to the Direct or Indirect Participants or the persons for whom they act as nominee with respect to the payments to or the providing of notice for the Direct Participants, the Indirect Participants or the Beneficial Owners of the Series 2004A Bonds. The District cannot and does not give any assurances that DTC, the DTC participants or others will distribute payments of principal of or interest on the Series 2004A Bonds paid to DTC or its nominee, as the registered owner, or provide any notices to the Beneficial Owners or that they will do so on a timely basis, or that DTC will act in the manner described in this Limited Offering Memorandum.

SECURITY FOR THE SERIES 2004A BONDS

General

The Series 2004A Bonds authorized under the Indenture and the obligation evidenced thereby will not constitute a lien upon any property of or within the District, including, without limitation, the Series 2004A Project or any portion thereof in respect of which any such bonds are being issued, or any part thereof, but will constitute a lien only on the Pledged Revenues as set forth in the Indenture. Nothing in the Series 2004A Bonds or in the Indenture will be construed as obligating the District to pay the bonds or the redemption price thereof or the interest thereon except from the Pledged Revenues, or as pledging the faith and credit of the District, the City, the County or the State or any political subdivision thereof, or as obligating the District, the City, the County or the State or any of its political subdivisions, directly or indirectly or contingently, to levy or to pledge any form of taxation whatever therefor.

15 The principal of, premium, if any, and interest on the Series 2004A Bonds are secured by a pledge of and a first lien upon the Pledged Revenues, as provided in the Indenture. As set forth in the Indenture, the Pledged Revenues consist of: (a) all Interlocal Agreement Revenues, as defined below (including Economic Incentive Payments and Tax Increment Revenues), (b) all revenues received by the District from Special Assessments levied and collected on all or a portion of the District Lands with respect to the Series 2004A Bonds, including, without limitation, amounts received from any foreclosure proceeding for the enforcement of collection of such Special Assessments or from the issuance and sale of tax certificates with respect to such Special Assessments, and (c) all moneys on deposit in the Funds and Accounts established under the Indenture for the Series 2004A Bonds; provided, however, that the Pledged Revenues will not include (i) any moneys transferred to the Rebate Fund, or investment earnings thereon, and (ii) “special assessments” levied and collected by the District under Section 190.022, Florida Statutes, for maintenance purposes or “maintenance special assessments” levied and collected by the District under Section 190.021(3), Florida Statutes. The lien on Special Assessments is on a parity with the lien thereon securing the Series 2004B Bonds expected to be issued contemporaneously with the Series 2004A Bonds. See “PLAN OF FINANCE” and “—Special Assessments,” herein.

Under the Interlocal Agreement, subject to certain conditions (including the performance thresholds discussed above under the heading “PLAN OF FINANCE—Additional Security for the Series 2004A Bonds”), the District will receive the Economic Incentive Payments from the City and the County and/or Tax Increment Revenues from the Midtown CRA Agency. The payment from the Midtown CRA Agency will be based upon the incremental increase in ad valorem taxes within the District as a result of the Developments (the “Tax Increment Revenues” and, collectively with the Economic Incentive Payments, the “Interlocal Agreement Revenues”). The receipt of these funds is subject to certain conditions, and the City’s and County’s obligation to contribute Economic Incentive Payments may terminate under certain circumstances. In no event will the Interlocal Agreement Revenues exceed either the Annual Debt Service Requirement on the Series 2004A Bonds or the specific amounts set forth in the Interlocal Agreement, whichever is less. See “PLAN OF FINANCE,” herein.

Additionally, the District has approved the levy of Special Assessments to provide for the payment of the Series 2004 Project (including both the Series 2004A Project and the Series 2004B Project). The amount of Special Assessments relating to the Series 2004A Project collected by the District in each year will be offset by the Interlocal Agreement Revenues to be received by the District. See “PLAN OF FINANCE,” herein.

For certain risks inherent in an investment in bonds secured by the Pledged Revenues, see “BONDHOLDERS’ RISKS” herein.

Economic Incentive Payments

General. As described above under the heading “PLAN OF FINANCE,” and subject to the provisions described below under “Covenant to Budget and Appropriate” and “Release of Economic Incentive Payments,” the City and the County have each agreed in the Interlocal Agreement to make the Economic Incentive Payments to the District for each completed performance threshold in the amounts set forth in the Interlocal Agreement, provided that such

16 Economic Incentive Payments do not exceed the corresponding Annual Debt Service requirements for the Series 2004A Bonds. These development components (or performance thresholds) are discussed above under the heading “PLAN OF FINANCE—Additional Security for Parking Garage Project Bonds—Performance Thresholds”

Payment of Economic Incentive Payments. No later than January 31st of each year during the term of the Interlocal Agreement, the Interlocal Agreement requires the District to submit a progress report to the City, the County and the Midtown CRA Agency setting forth the completed development components, if any, as of January 1 of that year (the “Progress Report”). For each completed development component identified in such Progress Report, the City will verify that a Certificate of Occupancy was issued for each. No later than December 31st of that same year, the City and the County are required to pay to the District the Economic Incentive Payments due for each completed development component described in the Progress Report, as well as for all completed development components described in all prior Progress Reports, through the term of the Series 2004A Bonds or until the EIP is released, as described below. The District will use the Economic Incentive Payments received from the City and the County solely to pay corresponding annual debt service requirement on the Series 2004A Bonds.

The Economic Incentive Payments for each completed development component as set forth in the Interlocal Agreement will become payable to the District annually as described below, commencing as follows: (i) Economic Incentive Payments for the completed development components for Stage 1 (referred to as Phase I in the Interlocal Agreement) will commence in the calendar year following the calendar year in which Certificates of Occupancy have been issued for at least ninety percent (90%) of the development components for Stage 1, which must include the retail component, continuing each and every year thereafter through the term of the Interlocal Agreement, subject to reduction and elimination under circumstances described in the Interlocal Agreement, (ii) Economic Incentive Payments for completed development components for Stage 2 (referred to as Phase II in the Interlocal Agreement) will commence in the calendar year following the calendar year in which Certificates of Occupancy have been issued for at least ninety percent (90%) of the development components for Stage 2, which must include the office component unless development of the office component is subject to the occurrence of an Event of Impossibility (as defined in the Interlocal Agreement), continuing each and every year thereafter through the term of the Interlocal Agreement, subject to reduction and elimination under circumstances described in the Interlocal Agreement.

Pursuant to the Interlocal Agreement, the aggregate amount of Economic Incentive Payments contributed by the County and the City to the District in each year will not exceed the Annual Debt Service requirement for that year.

Offset of Tax Increment Revenues Against Economic Incentive Payments. Until released, as described below, the amount of the Economic Incentive Payments payable by the City and the County in each year will be reduced or offset by the amount of Tax Increment Revenues paid to the District by the Midtown CRA Agency in such years, if established as described below. In no event, will the sum of the Tax Increment Revenues and the Economic Incentive Payments contributed to the District in any year exceed the total scheduled Economic Incentive Payments due to the District in that year pursuant to the Interlocal Agreement or the corresponding Annual Debt Service requirement on the Series 2004A Bonds, whichever is less.

17 Covenant to Budget and Appropriate. The City and the County have each covenanted and agreed in the Interlocal Agreement to appropriate in their respective annual budgets, by amendment, if necessary, from Non-Ad Valorem Revenues (defined below) lawfully available in each Fiscal Year, amounts sufficient to pay their respective portion of the Economic Incentive Payments when due pursuant to the Interlocal Agreement. Such covenant and agreement on the part of the City and the County to budget and appropriate Non-Ad Valorem Revenues will be cumulative to the extent Economic Incentive Payments pursuant to the Interlocal Agreement remain unpaid, and will continue until such Economic Incentive Payments are paid, provided, however, such covenant and agreement will terminate once the obligations of the County and the City to make Economic Incentive Payments are extinguished pursuant to the Interlocal Agreement.

Pursuant to the Interlocal Agreement, “Non-Ad Valorem Revenues” mean, with respect to the City and the County, as applicable, all revenues of the City and the County derived from any source whatsoever, other than ad valorem taxation on real or personal property, which is legally available to make the Economic Incentive Payments required in the Interlocal Agreement, but only after provision has been made by the City or the County to pay for services and programs which are necessary for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or the County or which are legally mandated by applicable law.

The City and the County have not covenanted to maintain any services or programs, now provided or maintained by either the City or the County, which generate Non-Ad Valorem Revenues.

Such covenant to budget and appropriate does not create any lien upon or pledge of Non- Ad Valorem Revenues, nor does it preclude the County or the City from pledging in the future their Non-Ad Valorem Revenues, nor does it require the City or the County to levy and collect any particular Non-Ad Valorem Revenues, nor does it give the District a prior claim on the Non- Ad Valorem Revenues of the City and the County as opposed to claims of general creditors of the City or the County. Such covenant of the City and the County to appropriate Non-Ad Valorem Revenues is subject in all respects to the payment of any obligations secured by a pledge of Non-Ad Valorem Revenues prior or subsequent to the date of the Interlocal Agreement (including the payment of debt service on bonds and other debt instruments of the City and/or County). However, the covenant to budget and appropriate in the City’s and the County’s general annual budget for the purposes and in the manner stated in the Interlocal Agreement shall have the effect of making available in the manner described in the Interlocal Agreement, Non-Ad Valorem Revenues and placing on the City and the County a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet their respective obligations of making the Economic Incentive Payments, to the extent required by the Interlocal Agreement, subject, however, in all respects to the restrictions of Section 166.241, Florida Statutes, and Section 129.07, Florida Statues, which provide, in part, that the governing body of each such municipality and county, respectively, make appropriations for each fiscal year which, in any one fiscal year, shall not exceed the amount to be received from taxation or other revenue sources, and subject further, to payments for services and programs which are essential public purposes affecting the health, welfare and safety of the inhabitants of the County and the City or which are legally mandated by applicable law.

18 Termination of Economic Incentive Payment Obligations. Pursuant to the Interlocal Agreement, the obligations of the County and City to contribute Economic Incentive Payments to the District will terminate and be extinguished and replaced by the Midtown CRA Agency’s obligation to contribute Tax Increment Revenues, if:

(A) Provided that the Midtown CRA and the Redevelopment Trust Fund (as hereinafter defined) are established no later than June 30, 2005, and each of the following conditions is satisfied:

(1) the Interlocal Agreement is amended to add the Midtown CRA Agency as a party; and

(2) the District, the County and the City agree that the percentage of Tax Increment Revenues to be contributed to the Redevelopment Trust Fund by the County and the City in each calendar year while the Series 2004A Bonds are outstanding under the Indenture, will be equal to the lesser of (i) the Maximum Percentage, which currently is 95%, or (ii) a percentage less than the Maximum Percentage but sufficient to enable the Midtown CRA Agency to pay to the District in each calendar year Tax Increment Revenues equal to the debt service on the Series 2004A Bonds in each such year for the remaining term of the Series 2004A Bonds; or

(B) Provided that the Midtown CRA and the Redevelopment Trust Fund are established after June 30, 2005, and each of the following conditions is satisfied:

(1) the County and the City are current on all Economic Incentive Payments due under the Interlocal Agreement;

(2) the Interlocal Agreement is amended to add the Midtown CRA as a party;

(3) the District, the County and the City agree that the percentage of Tax Increment Revenues to be contributed to the Redevelopment Trust Fund by the County and the City in each calendar year while the Bonds are outstanding under the Indenture, will be equal to the lesser of (i) the Maximum Percentage, or (ii) a percentage less than the Maximum Percentage but sufficient to enable the Midtown CRA Agency to pay to the District in each calendar year Tax Increment Revenues equal to the debt service on the Series 2004A Bonds in each such year for the remaining term of the Series 2004A Bonds; and

(4) the Financial Advisor (engaged by the District, the City and the County) certifies in writing to the District and the Trustee, that funds on deposit in the Redevelopment Trust Fund in the current calendar year are sufficient to enable the Agency to pay to the District Tax Increment Revenues equal to the Maximum Annual Debt Service on the Series 2004A Bonds.

19 Upon satisfaction of the conditions under paragraph (A) or (B) above (as the case may be), the County’s and the City’s obligations to contribute Economic Incentive Payments under the Interlocal Agreement will terminate.

Additional Information About the City and the County. Certain financial and other information about the City and the County is included in Appendices F and G, respectively.

Tax Increment Revenues

General. As previously discussed, the City and the County have agreed to create the Midtown CRA Agency for the purpose of assisting in the redevelopment of the area within the District. Under the Interlocal Agreement and Chapter 163, Part III, Florida Statutes, (the “Redevelopment Act”), the Midtown CRA Agency will be authorized to receive tax increment revenues each year, for as long as the Midtown CRA Agency’s redevelopment plan is in effect, from each non-exempt taxing authority having jurisdiction within the Midtown CRA and deposit such revenues into a redevelopment trust fund to be created under and pursuant to the Redevelopment Act (the “Redevelopment Trust Fund”). Pursuant to, and subject to the conditions contained in the Interlocal Agreement, the City and the County have agreed to require the Midtown CRA Agency to transfer Tax Increment Revenues to the Trustee for payment of principal and interest on the Series 2004A Bonds. If (i) the City and the County do not create the Midtown CRA Agency in accordance with the Interlocal Agreement or (ii) if the City and the County create the Midtown CRA Agency after June 30, 2005, and the amount of Tax Increment Revenues to be transferred to the Trustee is insufficient for the payment of principal and interest on the Series 2004A Bonds, Economic Incentive Payments will be deposited in the Revenue Fund to pay the principal and interest on the Series 2004A Bonds; provided the EIP has not already been released as discussed above. See “Economic Incentive Payments” and “Termination of Economic Incentive Payment Obligations,” above.

In the event the Midtown CRA Agency is created, the Interlocal Agreement requires that the City and the County cause the annual budget for the Midtown CRA Agency to require the payment of Tax Increment Revenues to the District annually in an amount not to exceed the Annual Debt Service Tax requirement on the Series 2004A Bonds. The City and the County will require the Midtown CRA Agency to transfer Tax Increment Revenues received by January 1 of each year to the District no later than January 15 of the same year.

Notwithstanding the foregoing, the Midtown CRA Agency will not be obligated to contribute Tax Increment Revenues to the District until such time as the Certificates of Occupancy have been issued for at least 90% of the DU’s for Stage 1, including the retail component. In the event that the issuance of Certificates of Occupancy for at least 90% of the total DU’s for Stage 2 of the Developments, as described above, is not achieved by December 31, 2007, the Midtown CRA Agency will contribute Tax Increment Revenues only for those development components for which a Certificate of Occupancy has been issued by December 31, 2006. Upon the issuance of Certificates of Occupancy for at least 90% of the total DU’s for Stage 2 (which must include the improved office space), the Midtown CRA Agency will contribute Tax Increment Revenues to the District in each and every year until the termination of the Interlocal Agreement.

20 After the termination of the City’s and County’s obligation to make Economic Incentive Payments, any deficiency in the Tax Increment Revenues to pay annual debt service on the Series 2004A Bonds would be made up through the collection of Special Assessments, as described below and under the heading “PLAN OF FINANCE.”

Tax Increment Revenue Report. Fishkind & Associates, Inc., Financial Advisor to the District, has prepared a Tax Increment Revenue Report updated as of June 25, 2004 (the “TIF Report”), a copy of which is included herein as Appendix F. The TIF Report includes assumptions and projections of the assessed value of the Developments at completion and the maximum tax increment based on those assumptions and projections. There is no guarantee that those projections will be realized. See Appendix F hereto.

Florida Law Requirements for Tax Increment. The Redevelopment Act sets forth the requirements and conditions for the establishment of a community redevelopment agency, such as the Midtown CRA Agency, and the calculation of the tax increment. In order for the Midtown CRA Agency to be established, the City, with the approval of the County, is required to, among other things, (1) designate the redevelopment area, (2) approve a redevelopment plan, and (3) agree with the County as to the percentage of tax increment to be deposited in the Redevelopment Trust Fund. The County will have to establish, by ordinance, the Redevelopment Trust Fund.

Under Section 163.387, Florida Statutes, as amended, the tax increment will be determined annually and will be the amount equal to 95 percent of the difference between:

(1) the amount of ad valorem taxes levied each year by each taxing authority, exclusive of any debt service levy, on taxable property within the boundaries of the redevelopment area; and

(2) the amount of ad valorem taxes that would have been produced by the rate upon which the tax is levied each year by or for each taxing authority, exclusive of any debt service millage, upon the total of the assessed value of the taxable property in the redevelopment area as shown upon the most recent assessment roll used prior to the effective date of the ordinance providing for the funding of the redevelopment trust fund (the “Base Year”).

The District, the City and the County have agreed to deposit less than the full tax increment into the Redevelopment Trust Fund. However, Florida law requires the deposit to be at least equal to 50 percent of the tax increment and the Interlocal Agreement requires the amount to be at least sufficient to pay debt service on the Series 2004A Bonds. Although the City and the County have advised the District they have initiated the process to create the Midtown CRA, no formal action by either of the elected governing bodies of the City or the County has been taken. If the creation of the Midtown CRA Agency and the authorization for the Redevelopment Trust Fund is delayed, for whatever reason, and the Series 2004A Project has proceeded with development, the Base Year to be utilized in calculating the tax increment may take into account completed portions of the Developments, thereby reducing the amount of the tax increment.

21 The incremental increase in ad valorem taxes previously described is used to measure the amount of the contribution which must be appropriated and contributed by each taxing authority which is required to make payments. The taxing authorities cannot be compelled to levy ad valorem taxes to make such payments. The statutory obligation of a taxing authority to make the required payments to a community redevelopment trust fund continues for so long as a community redevelopment agency has indebtedness pledging Tax Increment Revenues to the payment thereof outstanding, but not to exceed forty (40) years from the date the redevelopment plan is last amended. In the case of the Midtown CRA, this obligation is expected to continue until the Series 2004A Bonds have been paid.

To understand the method of measuring and calculating the contribution required to be made by the taxing authorities, the general method of fixing millage must be considered.

Florida law currently mandates the following procedures in fixing millage rates :

(a) January 1 of each year is the statutory measurement date used by the County Property Appraiser for establishing just value of real property within the County. Real property having improvements or portions not substantially completed on January 1 is deemed to have no value placed thereon and substantially completed property as of January 1 shall be assessed by the County Property Appraiser based on its just value.

(b) On or before July 1 of each year, the County Property Appraiser is required to complete the assessment of the value of all property located within the County (unless extended for good cause by the Florida Department of Revenue). Upon completion of this assessment the County Property Appraiser is required to certify to each taxing authority the taxable value within the jurisdiction of the taxing authority. This certification includes the just value of new construction, additions to structures, deletions, and property added due to geographic boundary changes substantially complete as of January 1 of such year.

(c) Each taxing authority is required to compute the millage known as the “rolled back rate.” That rate is the rate which, exclusive of (i) any increase in the assessed value of taxable real property by which a tax increment is measured for such taxing authority pursuant to Section 163.387, (ii) new construction, (iii) additions to structures, (iv) deletions, and (v) property added due to geographic boundary changes, will provide the same ad valorem tax revenue for each taxing authority as was levied during the prior year.

(d) Upon preparation of a tentative budget, but prior to adoption thereof, each taxing authority in addition to computing the “rolled back rate” is required to compute the proposed millage rate which would be necessary to fund the tentative budget, other than the portion of the budget to be funded from other than ad valorem taxes. In computing proposed millage rates, each taxing authority will utilize not less than 95% of the taxable

It should be noted that this synopsis of the procedure for establishing millage rates is for the purpose of providing a general overview of the procedure and that there may be exceptions, statutory appeals and extensions which are not set forth herein. For more specific detail, one should refer to Chapters 129, 193, 194, and 200 of Florida Statutes. 22 value certified by the County Property Appraiser. In establishing the tentative budget and proposed millage rate the taxing authority is not bound by the “rolled back rate” and in accordance with Florida law may exceed the “rolled back rate” or may even adopt a tentative budget and proposed millage rate which would be less than the “rolled back rate.”

(e) Within 30 days of the County Property Appraiser’s certification, each taxing authority is required to advise the County Property Appraiser of its proposed millage rate and the date and time at which a public hearing will be held to consider the proposed millage rate and the tentative budget. The County Property Appraiser utilizes this information in preparing the notice of proposed property taxes required to be mailed to property owners. Additionally, if this information is not provided in a timely fashion as required by statute, the taxing authority is prohibited from levying a millage rate greater than the “rolled back rate” for the upcoming fiscal year.

(f) Each taxing authority is statutorily required to hold a minimum of two public hearings on the proposed millage rate and tentative budget prior to adopting a final millage rate and a final budget. At the first public hearing the taxing authority may amend the tentative budget and proposed millage rate as it sees fit and adopt a tentative budget and proposed millage rate. At the second public hearing the taxing authority may adopt the final budget and final millage rate. The final budget and final millage rate adopted at the second hearing cannot exceed the tentative budget and tentative millage rate adopted at the first public hearing, unless a separate hearing is held after due notice. Except as otherwise provided by statute, no millage rate (exclusive of ad valorem debt service millage) for the County and the City can annually exceed 10 mills each without voter approval.

The final millage rate is that millage rate used to calculate the tax increment payments required to be made to the specific Redevelopment Trust Fund on or before January 1 of the next year. Final millage rates generally should have been adopted by October 1 of each year to allow sufficient time for taxing authorities to calculate the required payment to the specific Redevelopment Trust Fund and submit same on or before January 1. Pursuant to statute, unless otherwise permitted by law, final budgets must be adopted by taxing authorities prior to the beginning of a taxing authority’s fiscal year, which is October 1. Typically, property tax statements are mailed on or about November 1, with collection through November 30 providing a maximum discount of 4% and descending to 0% as of March 1 of the following year. Taxes are delinquent as of April 1. It should be noted that pursuant to the Redevelopment Act, tax increment payments are to be made to the Redevelopment Trust Fund in January of each year based on the statutory calculation without regard to the actual collections or adjustments made by the taxing authority.

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23 Millage Rates. The table below summarizes the historic millage rates levied.

Historic Millage Rates

Fiscal Year Ended Miami-Dade September 30 City of Miami(1) County(1)(2) 1994 11.8121 13.954 1995 11.7055 13.144 1996 11.7055 12.731 1997 11.7055 12.604 1998 11.5195 12.676 1999 11.7900 12.575 2000 10.9000 12.145 2001 10.2750 11.953 2002 10.2130 11.915 2003 10.0680 11.873

______Source: The respective Comprehensive Annual Financial Report for the City or the County for the Fiscal Year Ended September 30, 2003. (1) The Florida Constitution limits the City and County millage capacity (non-debt related) to 10.000 mills each. Millage rates shown include debt related levies.

(2) Includes operational levies for both county-wide operating expenses, as well as unincorporated area operating expenses and County Fire and Rescue and Library levies, as well as voter approved levies for debt service and, in 1994, a voter approved 2 year levy of .750 for Miami-Dade Community College.

Factors Affecting Tax Increment Revenues. Neither the City, the County nor any other taxing authority levying ad valorem taxes within the District has covenanted or pledged to levy ad valorem taxes on taxable real property within the District at a level sufficient to generate Tax Increment Revenues in any amount or at all. The payment of Tax Increment Revenues to the District does not constitute a pledge of the ad valorem taxing power of the City or the County.

Consequently, the amount of Tax Increment Revenues to be deposited in the Redevelopment Trust Fund (as defined in the Interlocal Agreement) and paid to the District is dependent upon, among other things, (i) the millage rates, if any, established by each taxing authority levying ad valorem taxes in the District and (ii) growth in the assessed valuation of taxable real property in the District, which increase will be affected by the annual appraisal at one hundred percent (100%) of the “just value” of taxable real property, including new construction completed, within the District.

On November 3, 1992, the voters of the State of Florida passed an amendment to Article VII, Section 4 of the Florida Constitution establishing a limitation of the lesser of 3% or the increase in the Consumer Price Index during the relevant year, on the annual increase in assessed valuation of homestead (primary residence) property, except in the event of a sale thereof during such year, and except as to improvements thereto during such year. The amendment became effective January 1, 1995. The amendment did not alter any caps on millage rates otherwise set

24 forth in the Florida Constitution. None of the real property in the District is currently homestead property. Property that is commercial in nature is not subject to the foregoing limitation on assessed valuation.

By Joint Resolution of the Florida Legislature in 1998, the State constitutional amendment was ratified, effective January 1, 1999, authorizing the Legislature to allow counties and municipalities to grant an additional homestead tax exemption to persons 65 years of age and older, with certain household income limitations. Section 196.075, Florida Statutes, gives the governing authority of any county or municipality the power to adopt an ordinance to allow an additional homestead exemption of up to $25,000 for any person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, who has attained age 65, and whose household income does not exceed $20,000 (a “qualified resident”).

From time to time there are various citizen petition drives within the State of Florida calling for constitutional amendments that may affect ad valorem assessment and tax collection procedures. One such drive currently underway would, if successful place on the November 2004 general election ballot a constitutional amendment to double the original homestead property exemption from $25,000 to $50,000.

Special Assessments

General. The District is authorized by the Act and other applicable law to finance the cost of the Series 2004 Project (including the Series 2004A Project and the Series 2004B Project) by levying the Special Assessments upon District Lands benefited thereby. As set forth in the Indenture, “Special Assessments” are (a) the net proceeds derived from the levy and collection of “special assessments,” as provided for in Sections 190.011(14) and 190.022 of the Act (except for any such special assessments levied and collected for maintenance purposes), against the lands located within the District that are subject to assessment as a result of the Series 2004 Project or any portion thereof, and (b) the net proceeds derived from the levy and collection of “benefit special assessments,” as provided for in Section 190.021(2) of the Act, against the lands within the District that are subject to assessment as a result of the Series 2004 Project or any portion thereof, and in the case of both “special assessments” and “benefit special assessments,” including the interest and penalties on such assessments, pursuant to all applicable provisions of the Act and Chapter 170, Florida Statutes, and Chapter 197, Florida Statutes (and any successor statutes thereto), including, without limitation, any amount received from any foreclosure proceeding for the enforcement of collection of such assessments or from the issuance and sale of tax certificates with respect to such assessments, less (to the extent applicable) the fees and costs of collection thereof payable to the Tax Collector and less certain administrative costs payable to the Property Appraiser pursuant to the Property Appraiser and Tax Collector Agreement. “Special Assessments” will not include “maintenance special assessments” levied and collected by the District under Section 190.021(3) of the Act.

The District will covenant in the Indenture to levy the Special Assessments, and evidence and certify to the Tax Collector or cause the Property Appraiser to certify on the tax roll of the Tax Collector for collection by the Tax Collector and enforcement by the Tax Collector or the District pursuant to the Act, Chapter 170 or Chapter 197, Florida Statutes, or any successor statutes, as applicable, and the Indenture, an amount equal to the amount of Special Assessments

25 relating to the Series 2004 Project. The Special Assessments for the Series 2004A Project and the Series 2004A Bonds to be collected by the District will take into account and be net of the amount of Economic Incentive Payments and/or Tax Increment Revenues received by the District and available for payment in such bond year. See “Special Assessment Collection Procedures” below.

The District will further covenant in the Indenture that if any Special Assessments are either in whole or in part annulled, vacated or set aside by the judgment of any court, or if the District is satisfied that any such Special Assessment is so irregular or defective that the same cannot be enforced or collected, or if the District has omitted to make such Special Assessment when it might have done so, the District will either (i) take all necessary steps to cause a new Special Assessment to be made for the whole or any part of said improvement or against any property benefited by said improvement, or (ii) in its sole discretion, make up the amount of such Special Assessment from legally available moneys, which moneys will be deposited into the applicable Series Account in the Reserve Fund.

Assessment Proceedings. As required by applicable law, when the Board of Supervisors of the District (the governing body of the District) determined to defray the cost of the Series 2004 Project through Special Assessments, it adopted a resolution generally describing the Series 2004 Project and the land to be subject to Special Assessments to pay the cost thereof. The District caused an assessment roll to be prepared, which showed the land to be assessed, the amount of the benefit to and the assessment against each lot or parcel of land and the number of annual installments in which the assessment was to be divided. Statutory notice was given to the owners of the property to be assessed and the Board of Supervisors conducted a public hearing to hear testimony from affected property owners as to the propriety and advisability of undertaking the Series 2004 Project and funding the same with Special Assessments. Following this hearing, the Board of Supervisors determined to proceed to levy the Special Assessments and thereafter the Special Assessments became legal, valid and binding liens upon the property against which the assessments were made.

The allocation of benefits and assessments to the benefited land within the District is presented in the Assessment Methodology, included herein as Appendix D, which should be read in its entirety. The Assessment Methodology allocates the Special Assessments to all lands within the District benefiting from the Series 2004 Project. These Special Assessments are then allocated between the Series 2004A Project and the Series 2004B Project for purposes of applying the credit for the Interlocal Agreement Revenues which only relates to the Series 2004A Project. See “Appendix D – Assessment Methodology” herein for additional information regarding the allocation of Special Assessments to the District Lands.

To ensure that there will always be sufficient development potential remaining in the property within the District to ensure payment of debt service after development of a platted tract occurs and a tax identification number has been assigned, the Assessment Methodology sets forth a “true-up mechanism” which provides that the debt per equivalent residential unit (ERU) remaining on the land within the District which has not yet been allocated its share of the total debt is never allowed to increase above its maximum debt per ERU level. If that happens, a reduction payment would be made by the Developers pursuant to a separate True Up Agreement by and among the Developers and the District so that the maximum debt per ERU level is not

26 breached. See “Appendix D – Special Assessment Methodology Report” herein for additional information regarding the “true-up mechanism.”

Other Tax Burdens to District Lands. The District Lands have been and are expected to be subject to taxes and assessments imposed by taxing authorities other than the District. Ad valorem taxes levied by other governmental entities upon the lands within the District during the year 2003 were approximately $788,180, when the District lands were in an undeveloped state. These taxes would be payable in addition to the Special Assessments and any other assessments levied by the District. The District has no control over the level of ad valorem taxes and/or special assessments levied by other taxing authorities. However, exclusive of voter approved millages levied for general obligation bonds, as to which no limit applies, the County and the School District of Miami-Dade County may each levy ad valorem taxes upon the land in the District. It is possible that in future years taxes levied by these other entities could be substantially higher than in 2003.

Prepayment of Special Assessments. Pursuant to the terms of the Act, the Indenture and the proceedings of the District relating to the levy of the Special Assessments (the “Assessment Proceedings”), the owner of property subject to Special Assessments may pay all or a portion of such Special Assessments remaining due at any time subsequent to thirty (30) days after completion and acceptance of the Series 2004A Project, if there is also paid an amount equal to the interest that would otherwise be due on such balance on the next succeeding Interest Payment Date for the Series 2004A Bonds, or, if prepaid during the forty-five (45) day period preceding such Interest Payment Date, on the second succeeding Interest Payment Date.

Also, pursuant to the terms of the Act and the Assessment Proceedings, the owner of property subject to the Special Assessments may pay all or a portion of the Special Assessments remaining due, without interest, within thirty (30) days after the Series 2004A Project has been completed and the Board of Supervisors has adopted a resolution accepting the Series 2004A Project as provided by Florida Statutes, Section 170.09. The Developers will covenant to waive this right in connection with the issuance of the Series 2004A Bonds pursuant to a “Declaration of Consent to Jurisdiction of Midtown Miami Community Development District and to Imposition of Special Assessments.” The “Declaration of Consent to Jurisdiction of Midtown Miami Community Development District and to Imposition of Special Assessments” will be recorded in the public records of Miami-Dade County, Florida, and the covenants contained therein will be binding on future landowners in the District.

The Series 2004A Bonds are subject to extraordinary mandatory redemption as indicated under “DESCRIPTION OF THE SERIES 2004A BONDS – Redemption Provisions – Extraordinary Mandatory Redemption” from optional prepayments of Special Assessments by property owners, and from true-up payments made by the Developers pursuant to the “true-up mechanism” described in the Assessment Methodology. See “Appendix D – Assessment Methodology” herein.

Covenant Against Sale or Encumbrance. In the Indenture, the District has covenanted that, (a) except for those improvements comprising the Series 2004A Project that are to be conveyed or dedicated by the District to the City, the County, the State Department of Transportation or another governmental entity and (b) except as otherwise permitted in the

27 Indenture, it will not sell, lease or otherwise dispose of or encumber the Series 2004A Project or any part thereof. See “Appendix C – Form of Indenture” herein.

Special Assessment Collection Procedures. The Indenture provides that the District will collect the Special Assessments in accordance with the provisions of the Act and Chapter 170 or Chapter 197, Florida Statutes, or any successor statute thereto. The District has covenanted in the Indenture to use its best efforts to adopt the uniform method for the levy, collection and enforcement of Special Assessments afforded by Sections 197.3631, 197.3632 and 197.3635, Florida Statutes, or any successor statutes thereto (the “Uniform Method”) as soon as practicable, or a comparable alternative method afforded by Section 197.3631, Florida Statutes. The District is required to use its best efforts to enter into one or more written agreements with the Property Appraiser and the Tax Collector, either individually or jointly (together, the “Property Appraiser and Tax Collector Agreement”) in order to effectuate the provisions of the Indenture. The District will covenant in the Indenture to use its best efforts to ensure that any such Property Appraiser and Tax Collector Agreement remains in effect for at least as long as the final maturity of the Series 2004A Bonds. As of the date of this Limited Offering Memorandum, the District has not entered into any such agreements. To the extent that the District is not able to collect Special Assessments pursuant to the Uniform Method, the District may elect to collect and enforce Special Assessments pursuant to any available method under the Act, Chapter 170, Florida Statutes, or Chapter 197, Florida Statutes, or any successor statutes thereto. The election to collect and enforce Special Assessments in any year pursuant to any one method will not, to the extent permitted by law, preclude the District from electing to collect and enforce Special Assessments pursuant to any other method permitted by law in any subsequent year.

The Uniform Method. The following discussion describes in more detail the procedures relevant to the Uniform Method. Under Florida law, counties, municipalities, school districts and various other special taxing districts are authorized to levy ad valorem taxes, subject to certain statutory and constitutional limitations. Ad valorem taxes are generally levied upon real and personal property located within the jurisdiction of the taxing authority. The rate of ad valorem taxation is generally uniform for all properties subject to taxation by a particular taxing entity, and is generally expressed in terms of a “millage” rate. The “millage” rate refers to the amount of ad valorem taxes expressed in terms of dollars of taxes per thousand dollars of assessed valuation of property subject to taxation (i.e., one “mill” is one dollar of taxes per thousand dollars of assessed value).

Within each county there is a property appraiser, one function of which is to determine the assessed valuation of all property within the county subject to ad valorem taxes. Each taxing authority imposing ad valorem taxes annually determines its millage rate, which is then multiplied by the assessed value of taxable property to determine the amount of taxes due. In general, each taxing entity provides the property appraiser with information concerning the rate of taxation being imposed by such taxing entity. The property appraiser then prepares a tax roll listing, for all property to be subject to taxation, the amount of taxes due to the various taxing entities. The property appraiser then provides this tax roll to the county tax collector who is charged with responsibility for collection of the taxes due.

Although the Special Assessments are not ad valorem taxes, under Florida law non-ad valorem assessments, such as the Special Assessments, may be collected in the same manner as 28 ad valorem taxes if certain statutory procedures are followed. In order for the Special Assessments to be collected in the same manner as ad valorem taxes, among other things, the District must no later than August 1 of each year provide to the Miami-Dade County Property Appraiser the assessment rate of the Special Assessments expressed in dollars and cents per unit of assessment, the associated assessment amount and the purpose of the assessment. Additionally, not later than September 15 of each year, the Board of Supervisors of the District must determine the annual amount of Special Assessments to be levied and certify such Special Assessments on compatible electronic medium to the Miami-Dade County Tax Collector. The Special Assessments will then be enforced and collected by the Tax Collector in the same manner and at the same time as ad valorem taxes.

Upon receipt of the certified tax roll, the Tax Collector is required to mail to each taxpayer appearing on the tax roll a tax notice stating, among other things, the amount of current taxes, including the Special Assessments, if applicable, due from the taxpayer. In general, each taxpayer is required to pay all taxes shown in the tax notice without preference in payment of any particular increment of the tax bill, such as any increment owing for Special Assessments. Upon receipt of the taxes, the Tax Collector is required to forward the portion of such taxes, if any, as is attributable to Special Assessments to the District. To the extent that a landowner fails to pay such taxes the successful implementation of tax collection procedures available to the Tax Collector and the District is essential to continued payment of principal of and interest on the Series 2004A Bonds. See “BONDHOLDERS’ RISKS” herein.

The requirement that each taxpayer pay all taxes shown in the tax notice can operate both as a benefit and a detriment to the collectibility of Special Assessments. For example, if a particular taxpayer in the District has a dispute with a taxing entity other than the District, but has no dispute with the District, that taxpayer is nevertheless precluded from paying the Special Assessments unless the taxpayer wishes to pay all taxes, including the taxes as to which the dispute exists. Alternatively, if the taxpayer has a dispute with the District, the taxpayer cannot pay other taxing entities to the exclusion of the District, and this may operate to compel the taxpayer to pay all taxes, including the Special Assessments.

The collection of delinquent taxes, including Special Assessments, upon real property is based upon the sale by the Tax Collector of “tax certificates” and remittance of the proceeds of such sale to the various governmental entities levying taxes for the payment of the taxes due. The demand for tax certificates is dependent upon various factors, including the interest which can be earned by ownership of such certificates and the value of the land which is the subject of such certificates and which, as described herein, may be subject to sale at the demand of the certificate holder. Therefore, the underlying market value of the land in the District may affect the demand for such certificates and therefore the successful collection of the Special Assessments which are the source of payment of the Series 2004A Bonds. See “BONDHOLDERS’ RISKS” herein.

A landowner cannot be sued personally for failure to pay Special Assessments, but Special Assessments are a lien on the property against which they are assessed from January 1 of the year of assessment until paid or barred by operation of law (Statute of Limitations). The lien of the Special Assessments is of equal dignity with the liens for State and county taxes and other

29 taxes which are of equal dignity upon land, and thus is a first lien, superior to all other liens including mortgages.

The statutes relating to the enforcement of ad valorem taxes (and also the Special Assessments) provide that such taxes become due and payable on November 1 of the year in which assessed or as soon thereafter as the certified tax roll is received by the Tax Collector. Depending upon the date of payment, taxpayers may receive a discount of up to 4% of the taxes levied by paying taxes prior to delinquency. In levying annual installments of Special Assessments, the District assumes that all taxpayers will pay in time to receive the full 4% discount.

State law provides a method for prepayment of estimated taxes by installment. If this method is used, all taxes are payable at varying times prior to delinquency (as discussed in the following paragraph) and the taxpayer receives discounts ranging from 6% to zero. Prepayments of taxes are required to be invested by the Tax Collector, and such prepaid taxes and interest earnings thereon are allocated among the various taxing authorities and paid to them at the same time as taxes which were not prepaid.

All taxes become delinquent on April 1 following the tax year in which they are assessed or immediately after sixty (60) days have expired from the mailing of the original tax notice, whichever is later. The Tax Collector is required to collect taxes prior to the date of delinquency and to institute statutory procedures upon delinquency to collect assessed taxes. Delay in the mailing of tax notices to taxpayers results in a delay throughout the process. See “BONDHOLDERS’ RISKS” herein.

In the event of a delinquency in the payment of taxes on real property, the Tax Collector is required to offer tax certificates on such property for sale to the person or entity who pays the delinquent taxes and interest and certain costs and charges relating thereto, and who accepts the lowest interest rate per annum to be borne by the certificates (which will in no event be more than eighteen percent (18%) per annum). Delinquent taxes may be paid by a taxpayer prior to the date of sale of a tax certificate by the payment of such taxes, together with interest and all costs and charges relating thereto. Tax certificates are sold by public bid, and in case there are no bidders, the certificate is issued to the county in which the assessed lands are located, and the county, in such event, does not pay any consideration for such tax certificate. Proceeds from the sale of tax certificates are required to be used to pay taxes (including the Special Assessments, if applicable), interest, costs and charges on the land described in the certificate.

In the event a tax certificate is sold on property with delinquent Special Assessments, proceeds from the sale of the tax certificate will be sufficient to pay the delinquent Special Assessments as to that parcel.

While, as described above, upon the sale of a tax certificate delinquent taxes, including Special Assessments, are paid, the willingness of persons to purchase tax certificates may be affected by the rights inherent of ownership of a tax certificate. For that reason, the following discussion of the rights associated with ownership of a tax certificate is provided.

30 County-held tax certificates may be purchased, and any tax certificate may be redeemed, in whole or in part, by any person or entity at any time before a tax deed is issued or the property is placed on the list of lands available for sale, at a price equal to the face amount of the certificate or portion thereof, together with all interest, costs, and charges due. The proceeds of such a redemption are paid to the Tax Collector who transmits to the holder of the certificate such proceeds less a service charge, and the certificate is cancelled.

After an initial period ending two (2) years from April 1 of the year of issuance of a certificate, the holder of a certificate may apply for a tax deed to the subject land. Any holder, other than the county, of a tax certificate which has not been redeemed has seven (7) years from the date of issuance of the tax certificate during which to act against the land that is the subject of the tax certificate. The applicant is required to pay to the Tax Collector all amounts required to redeem or purchase all outstanding tax certificates not held by the applicant covering the land, any omitted taxes or delinquent taxes, current taxes, and interest, if due, covering the land. If the county holds a tax certificate and has not succeeded in selling it, the county must apply for a tax deed two (2) years after April 1 of the year of issuance. The county pays costs and fees to the Tax Collector but not any amount to redeem any other outstanding certificates covering the land. Thereafter, the property is advertised for public sale. Any outstanding certificates will be satisfied from the proceeds received at such public sale.

In any such public sale, the private holder of the tax certificate who is seeking a tax deed is deemed to submit a minimum bid established by statute. The opening bid on a privately held certificate on non-homestead property includes, in addition to the amount of money paid to the Tax Collector by the certificate-holder at the time of application, the amount required to redeem the applicant’s tax certificate and all other costs and fees paid by the applicant. The opening bid on county-held certificates on non-homestead property is the sum of the value of all outstanding certificates against the land, plus omitted years’ taxes, delinquent taxes, interest, and all costs and fees paid by the county. The opening bid on property assessed on the latest tax roll as homestead property includes, in addition to the amount of money required for an opening bid on non- homestead property, an amount equal to one-half of the latest assessed value of the homestead. If there are no higher bidders, the holder receives title to the land and the amounts paid for the certificate and in applying for a tax deed are credited towards the purchase price. If there are higher bidders, the holder may enter the bidding. The highest bidder is awarded title to the land. The portion of proceeds of such sale needed to redeem the tax certificate (and all other amounts paid by such holder in applying for a tax deed), plus interest, are forwarded to the holder thereof or credited to such holder if such holder is the successful bidder. Excess proceeds are distributed first to satisfy governmental liens against the land and then to the former title holder of the property (less service charges), lienholders of record, mortgagees of record, vendees of recorded contracts of deeds, and other lienholders and any other person to whom the land was assessed on the tax roll for the year in which the land was assessed, all as their interests may appear.

If there are no bidders at the public sale, the county may, at any time within ninety (90) days from the date of offering for public sale, purchase the land for a statutorily prescribed minimum bid. After ninety (90) days have passed, any person or governmental unit may purchase the land by paying the amount of the minimum bid. Three (3) years from the date of offering for public sale, unsold lands escheat to the county, and all tax certificates and liens, including the lien of the Special Assessments, if applicable, against the property are cancelled.

31 The issuance of a tax deed, in general, has the effect of canceling liens against or upon the property that is the subject of the tax deed, except for certain liens in favor of municipal or county government, and except for certain restrictions and covenants limiting the use of property, the type, character and location of buildings, covenants against nuisances and the like. Issuance of a tax deed, therefore, has the effect of canceling mortgages upon the affected property. For this reason (to prevent cancellation of the mortgage), under certain circumstances mortgagees may pay delinquent taxes on property upon which they hold a mortgage, but there is no requirement that mortgagees do so. See “BONDHOLDERS’ RISKS” herein.

Pursuant to the Indenture, if the Uniform Method is not utilized by the District, and if any property is offered for sale for the nonpayment of any Special Assessments, and no person purchases the same for an amount at least equal to the full amount due on the Special Assessments (principal, interest, penalties and costs, plus attorneys’ fees, if any), the District may (but will not be required to) purchase the property for an amount equal to the balance due on the Special Assessments (principal, interest, penalties and costs, plus attorneys’ fees, if any). The District will thereupon receive title to the subject property for the benefit of the Registered Owners and, either through its own actions or the actions of the Trustee, will use its best efforts to lease or sell such property and deposit all of the net proceeds of any such sale or lease into the Revenue Fund created under the Indenture and applied in accordance therewith. It is unlikely the District would ever have sufficient funds to complete a significant number of purchases of property offered for sale for the nonpayment of Special Assessments.

Alternative Method. As an alternative to the Uniform Method, the District may directly levy and enforce the collection of the Special Assessments. State law provides that upon the failure of any property owner to pay all or any part of the principal of a Special Assessment or the interest thereon, when due, the Board of Supervisors of the District is authorized to commence legal proceedings for the enforcement of the payment thereof, including commencement of a foreclosure proceeding in the same manner as the foreclosure of a real estate mortgage or commencement of an action under Chapter 173, Florida Statutes, relating to foreclosure of municipal tax and special assessment liens. Any foreclosure proceedings to enforce payment of the Special Assessments may proceed under the provisions of Chapter 173, Florida Statutes, which provides that after the expiration of one year from the date any special assessment or installment thereof becomes due, the District may commence a foreclosure proceeding against the lands upon which the assessments are liens. Such a proceeding is in rem, meaning that it is brought against the land and not against the owner. After at least thirty (30) days’ written notice to any record land owner and at least four (4) weeks’ prior published notice, a judicial hearing will be conducted in which any interested party may appear and contest the foreclosure; however, any person contesting the assessment or the lien must deposit with the court the amount if any, which such contesting party claims is the amount of any such assessment which is due. Upon a judgment for delinquent assessments, a special master would be appointed to sell the property at public auction, at which sale the District may also bid. Proceeds of any such foreclosure sale are required by the statute to be shared for the payment of state, city, county or other taxes or assessments in the manner determined by the special master. There can be no assurance that any sale, particularly a bulk sale, of land subject to delinquent assessments will produce proceeds sufficient to pay the full amount of such delinquent special assessments plus other delinquent taxes and special assessments applicable thereto. Any such

32 deficiency could result in the inability of the District to pay, in full, the principal of and interest on the Bonds.

The following table shows tax levies and tax collections in the County for the last ten fiscal years.

PROPERTY TAX LEVIES AND TAX COLLECTIONS LAST TEN MIAMI-DADE COUNTY FISCAL YEARS (in thousands) Gross Fiscal Year Total Collections Net Collections Percent of Ended Adjusted Tax Before Discounts Other Taxing Miami-Dade Tax Roll Total September 30 Levy(1) Discounts Allowed Districts(2) County Collected Millage(3) 1994 $1,457,927 $1,432,906 $43,647 $ 661,897 $727,362 98.3 $13.954 1995 1,596,872 1,570,050 48,533 763,930 757,587 98.3 13.144 1996 1,647,403 1,621,437 50,806 807,179 763,452 98.4 12.731 1997 1,692,052 1,664,319 51,397 840,401 772,521 98.4 12.604 1998 1,769,736 1,749,639 53,967 895,430 800,242 98.9 12.676 1999 1,830,439 1,808,276 56,060 917,442 834,774 98.8 12.575 2000 1,855,743 1,818,600 56,346 916,826 845,429 98.0 12.145 2001 1,917,058 1,910,147 58,638 973,891 877,618 99.6 11.953 2002 2,058,787 2,039,313 63,243 1,032,630 943,440 99.1 11.915 2003 2,242,920 2,217,608 69,622 1,118,825 1,029,161 98.9 11.873 ______Source: Miami-Dade County Finance Department, Tax Collection Division. (1) Includes Miami-Dade County, the School Board of Miami-Dade County, South Florida Water Management District, Public Library District, and Special Benefit Districts, but excludes the municipalities in Miami-Dade County for which the County collects taxes. (2) Includes the School Board of Miami-Dade County, South Florida Water Management District, and Special Benefit Districts, but excludes the municipalities in Miami-Dade County for which the County collects taxes. (3) Includes the millage levy for Countywide operating expenses, County debt service on general obligation bonds, Unincorporated Area operating expenses, Fire District and the Public Library District.

Debt Service Reserve Fund

A Series 2004A Debt Service Reserve Account will be created under the Indenture within the Debt Service Reserve Fund for the sole benefit of the Series 2004A Bonds. Pursuant to the Indenture, “Series 2004A Debt Service Reserve Requirement” means an amount equal to the lesser of (i) the maximum annual Debt Service Requirement for the Outstanding Series 2004A Bonds, (ii) 125% of the average annual Debt Service Requirement for the Outstanding Series 2004A Bonds, and (iii) 10% of the original proceeds (within the meaning of the Code) of the Series 2004A Bonds. Amounts on deposit in the Series 2004A Debt Service Reserve Account will be used to cure any deficiency in the Interest, Principal and Sinking Fund Accounts for the Series 2004A Bonds.

As long as there exists no default under the Indenture and there is no deficiency in the Series 2004A Debt Service Reserve Account, earnings on investments in the Series 2004A Debt Service Reserve Account, will, prior to the completion of the Series 2004A Project be used to pay interest on the Series 2004A Bonds, and after the Completion Date, be transferred to the Series 2004A Account of the Revenue Fund. Excess moneys in the Series 2004A Debt Service Reserve Account due to a prepayment of the related Special Assessments and the resulting reduction in the Debt Service Requirement for the Series 2004A Bonds are required to be transferred to the Series 2004A Account within the Redemption Fund. Otherwise, earnings on investments in each Series Account of the Debt Service Reserve Fund will be retained therein until applied as set forth in the Indenture. 33 Application of Pledged Revenues under Indenture

Various Funds and Accounts are established under the Indenture, including separate accounts or subaccounts for both the Series 2004A Bonds and the Series 2004B Bonds. These Funds and Accounts include the Acquisition and Construction Fund (and the Series 2004A and Series 2004B Accounts within this Fund), the Revenue Fund, the Debt Service Fund (with Interest, Principal and Sinking Fund Accounts and a Capitalized Interest Subaccount within the Interest Account), the Debt Service Reserve Fund, the Bond Redemption Fund (with General and Prepayment Accounts), and the Rebate Fund.

Under the Indenture all Interlocal Agreement Revenues and Special Assessments are required to be deposited into the Revenue Fund. All Interlocal Agreement Revenues will be deposited into the Series 2004A Revenue Subaccount within the Reserve Fund. Additionally, all Special Assessments (other than Special Assessment prepayments) and any amounts received as the result of any foreclosure, sale of tax certificates or other remedial action for nonpayment of Special Assessments, in each case as allocable to the Series 2004A Bonds, will also be deposited to the Series 2004A Revenue Subaccount.

Under the Indenture, the Trustee is required to transfer funds from the Series 2004A Revenue Subaccount to the Funds and Accounts designated below, in the following amounts, at the following times and in the following order of priority:

FIRST, upon receipt but no later than the Business Day preceding the first May 1 for which there remains an insufficient amount from Series 2004A Bond proceeds (or investment earnings thereon) on deposit in the Series 2004A Capitalized Interest Subaccount to be applied to the payment of interest on the Series 2004A Bonds due on the next succeeding May 1, and no later than the Business Day next preceding each May 1 thereafter to the Series 2004A Interest Subaccount of the Debt Service Fund, an amount from the Series 2004A Revenue Subaccount equal to the interest on the Series 2004A Bonds becoming due on the next succeeding May 1, less any amounts on deposit in the Series 2004A Interest Subaccount not previously credited;

SECOND, no later than the Business Day next preceding May 1, 2024 and May 1, 2037 to the Series 2004A Principal Subaccount of the Debt Service Fund, an amount from the Series 2004A Revenue Subaccount equal to the principal amount of Series 2004A Bonds Outstanding maturing on such May 1, less any amounts on deposit in the Series 2004A Principal Subaccount not previously credited;

THIRD, no later than the Business Day next preceding each May 1, commencing May 1, 2008, to the Series 2004A Sinking Fund Account of the Debt Service Fund, an amount from the Series 2004A Revenue Subaccount equal to the principal amount of Series 2004A Bonds subject to sinking fund redemption on such May 1, less any amount on deposit in the Series 2004A Sinking Fund Account not previously credited,;

FOURTH, upon receipt but no later than the Business Day preceding the first November 1 for which there remains an insufficient amount from Series 2004A Bond proceeds (or investment earnings thereon) on deposit in the Series 2004A Capitalized

34 Interest Subaccount to be applied to the payment of interest on the Series 2004A Bonds due on the next succeeding November 1, and upon receipt but no later than the Business Day next preceding each November 1 thereafter to the Series 2004A Interest Subaccount of the Debt Service Fund, an amount from the Series 2004A Revenue Subaccount equal to the interest on the Series 2004A Bonds, less any amount on deposit in the Series 2004A Interest Subaccount not previously credited;

FIFTH, upon receipt but no later than the Business Day next preceding each Interest Payment Date while Series 2004A Bonds remain Outstanding, to the Series 2004A Debt Service Reserve Account, an amount from the Series 2004A Revenue Subaccount equal to the amount, if any, which is necessary to make the amount on deposit therein equal to the Series 2004A Debt Service Reserve Requirement for the Series 2004A Bonds; and

SIXTH, subject to the following paragraph the balance of any moneys remaining after making the foregoing deposits the balance shall remain in the Series 2004A Revenue Subaccount, unless pursuant to the Arbitrage Certificate it is necessary to make a deposit into the Rebate Fund, in which case the Issuer will direct the Trustee to make such deposit thereto.

The Trustee must, within 10 Business Days after the last Interest Payment Date in any calendar year, withdraw any moneys held for the credit of the Series 2004A Revenue Subaccount which are not otherwise required to be deposited pursuant to this Section and deposit such moneys as directed, prior to the Completion Date of the Series 2004A Project, to the credit of the Series 2004A Acquisition and Construction Account, and thereafter, to the credit of the Series 2004A General Account of the Bond Redemption Fund as determined by the Issuer in accordance with the provisions of the Indenture. Special Assessment prepayments allocable to the Series 2004A Bonds will be deposited directly into the Series 2004A Prepayment Account as provided in the Indenture.

Investment of Funds

The Trustee will, as directed by the District in writing, invest moneys held in the Debt Service Fund and the Bond Redemption Fund created under the Indenture only in Government Obligations and securities described in subparagraphs (d), (e), (h), (j) or (l) of the definition of Investment Securities. (See Appendix C hereto.) The Trustee will, as directed by the District in writing, invest moneys held in any other Fund or Account, including the Debt Service Reserve Fund in Investment Securities. All deposits in time accounts must be subject to withdrawal without penalty and all investments must mature or be subject to redemption by the holder without penalty, not later than the date when the amounts will foreseeably be needed for purposes set forth in the Indenture. All securities securing investments under the Indenture will be deposited with a Federal Reserve Bank, with the trust department of the Trustee, as authorized by law with respect to trust funds in the State, or with a bank or trust company having a combined net capital and surplus of not less than $50,000,000. The interest and income received upon such investments and any interest paid by the Trustee or any other depositary of any Fund or Account and any profit or loss resulting from the sale of securities will be added or charged to the Fund or Account for which such investments are made; provided, however, that if the amount

35 in any Fund or Account equals or exceeds the amount required to be on deposit therein, subject to the Indenture, any interest and other income so received will be deposited in the related Series Account of the Revenue Fund. Upon request of the District, or on its own initiative whenever payment is to be made out of any Fund or Account, the Trustee will sell such securities as may be requested to make the payment and restore the proceeds to the Fund or Account in which the securities were held. The Trustee will not be accountable for any depreciation in the value of any such security or for any loss resulting from the sale thereof, except as provided in the Indenture. If net proceeds from the sale of securities held in any Fund or Account will be less than the amount invested and, as a result, the amount on deposit in such Fund or Account is less than the amount required to be on deposit in such Fund or Account, the amount of such deficit will be transferred to such Fund or Account from the related Series Account of the Revenue Fund.

Absent specific instructions as aforesaid, all moneys in the Funds and Accounts established under the Indenture will be invested in investments of the nature described in subparagraph (l) of the definition of Investment Securities (certain money market funds), except with respect to moneys in the Debt Service Fund and in the Bond Redemption Fund which are restricted to other types of investments. Subject to the provisions of the Indenture, moneys in any of the Funds and Accounts established pursuant to the Indenture, when held by the Trustee, will be immediately invested by the Trustee subject to all written directions from the District. The Trustee will not be liable or responsible for any loss or entitled to any gain resulting from any investment or sale upon the investment instructions of the District or otherwise, including that set forth in the first sentence of this paragraph.

Additional Obligations

The District will not issue any obligations other than the Series 2004 Bonds (including the Series 2004B Bonds mentioned under “PLAN OF FINANCE” hereunder) payable from any portion of the Pledged Revenues, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge, payable from any portion of the Pledged Revenues, except in the ordinary course of business; provided, however, that the District may issue Additional Bonds to refund all or a portion of the Series 2004 Bonds.

BONDHOLDERS’ RISKS

There are certain risks inherent in an investment in bonds secured by the Pledged Revenues. Certain of these risks are described in other sections of this Limited Offering Memorandum, including, without limitation, “THE DEVELOPMENTS AND DEVELOPERS” and “LITIGATION.” Prospective investors in the Series 2004A Bonds should have such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of an investment in the Series 2004A Bonds and have the ability to bear the economic risks of such prospective investment, including a complete loss of such investment. This section does not purport to summarize all risks that may be associated with purchasing or owning the Series 2004A Bonds and prospective purchasers are advised to read this Limited Offering Memorandum in its entirety for a more complete description of investment considerations relating to the Series 2004A Bonds.

36 1. Concentration Of Land Ownership. The Developers described in the “DEVELOPMENTS AND DEVELOPERS” section control substantially all of the lands within the District (other than land owned by the District itself) subject to the total Special Assessments, and non-payment of Special Assessments by the Developers would have a substantial adverse impact upon the District’s ability to pay debt service on the Series 2004A Bonds. See “SECURITY FOR THE SERIES 2004A BONDS” herein.

2. Special Assessments Are Non-Recourse. The Series 2004A Bonds are payable from, among other sources, Special Assessments. Special Assessments are not a personal obligation of the owner of the land subject to the Special Assessments, but are instead an imposition upon the land subject to the Special Assessments. The ultimate, and only, recourse for payment of Special Assessments is an action against the land. If proceedings against the land, including the statutory tax collection procedures described herein, do not result in the collection of funds sufficient to pay delinquent Special Assessments, the landowner may not be compelled to pay the deficiency. Therefore the likelihood of collection of the Special Assessments may ultimately depend upon the market value of the land subject to taxation. While the ability of a landowner to pay Special Assessments is a relevant factor, the willingness of a landowner to pay the taxes, which may be affected by the value of the land subject to taxation, is also an important factor in the collection of Special Assessments.

3. Other Taxes. Under the Uniform Method of collection discussed herein, all County, City, school district, and special district taxes and non-ad valorem assessments (including Special Assessments levied by the District), are payable at one time. A taxpayer may not make incomplete payment of taxes or assessments. Therefore, any failure of a taxpayer to pay any tax (whether it be the District’s Special Assessments or other tax or assessment) would cause the Special Assessments to not be collected, which could have a significant impact on the District’s ability to pay the principal of and interest on the Series 2004A Bonds. The District has no control over the amount of taxes levied by entities other than the District.

The willingness and/or the ability of an owner of land within the District to pay the annual Special Assessments could be affected by the amount of other taxes and assessments imposed upon the property being assessed. The lien of the Special Assessments is, however, of equal dignity with the liens for State and County and certain other taxes upon land, and thus is a first lien, superior to all other liens including mortgages (except liens for State, County, City and other taxes which are of equal dignity). See “SECURITY FOR THE SERIES 2004A BONDS” herein.

4. Lack Of Market For Tax Certificates. Under the Uniform Method of collection, the Special Assessments become due and payable on November 1 of the year in which they are assessed (or as soon thereafter upon satisfaction of certain statutory requirements by the tax collector) and become delinquent on the following April 1 or following sixty (60) days after the mailing of the original notice, whichever is later. The collection of delinquent taxes or assessments on real property, including Special Assessments, is based to a large degree on the sale of “tax certificates.” Tax certificates are sold at public auction to the purchaser who pays the delinquent taxes or assessments, interest and certain costs and charges relating thereto, and who bids the lowest interest rate per annum which will not exceed eighteen percent (18%) per annum. Proceeds from the sale of tax certificates are required to be used to pay delinquent taxes

37 (including delinquent Special Assessments), interest, costs and other charges. Under State law, tax certificates may not be sold until at least 60 days after the taxes become delinquent. There can be no assurances given that there will be any future purchasers of tax certificates.

Under the Uniform Method, the collection of delinquent taxes, including Special Assessments, upon real property is based upon the sale by the tax collector of “tax certificates” and remittance of the proceeds of such sale to the various governmental entities levying taxes for the payment of the taxes due. The demand for tax certificates is dependent upon various factors, including the interest which can be earned by ownership of such certificates and the value of the land which is the subject of such certificates and which, as described herein, may be subject to sale at the demand of the certificate holder. Therefore, the underlying market value of the land in the District may affect the demand for such certificates and therefore the successful collection of the Special Assessments which are the source of payment of the Series 2004A Bonds.

In the event there are no bidders, tax certificates are issued to the County at the maximum rate of interest allowed (presently 18%). The tax collector does not collect any money from the County if the tax certificates are issued to the County. County-held tax certificates, which are not previously purchased or redeemed, must be held by the County for a period ending two (2) years from April 1 of the year of issuance. After the expiration of the two (2) year period, the property will be offered for sale, as described under “SECURITY FOR THE SERIES 2004A BONDS – Special Assessment Collection Procedures” herein. There are many procedures that must be followed by the tax collector before the property can be offered for sale. Such procedures include proper notices, collection of certain fees and charges, and establishing an opening bid for the property. Failure to comply with any of the procedures or receive the statutory (opening bid) could result in delays or a complete inability of the tax collector to collect the delinquent taxes. If the property is not sold within three (3) years from the date it was first offered for public sale, the land escheats to the County and all tax certificates and liens against the property are canceled. If a sufficient amount of land within the District were to escheat to the County, the District would be unable to pay debt service on the Series 2004A Bonds.

5. The District Could Fail To Levy Special Assessments. The District is required to comply with statutory procedures in levying Special Assessments. Failure of the District to follow these procedures could result in the Special Assessments not being levied. See “SECURITY FOR THE SERIES 2004A BONDS” herein.

6. There Are Bankruptcy Risks. The payment of the annual Special Assessments and the ability of the tax collector or the District to foreclose the lien of unpaid taxes, including Special Assessments, may be limited by bankruptcy, insolvency, or other laws generally affecting creditors’ rights or by the laws of the State relating to court foreclosure. Bankruptcy of a property owner could also result in a delay by the tax collector or the District in prosecuting court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of principal of and interest on the Series 2004A Bonds.

In addition, the remedies available to the holders of the Series 2004A Bonds upon an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, the remedies specified by federal, state and local law and in the Indenture and

38 the Series 2004A Bonds, including without limitation, enforcement of the obligation to pay Special Assessments, may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2004A Bonds (including the approving opinion of Bond Counsel) will be qualified as to the enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. The inability, either partially or fully, to enforce remedies available with respect to the Series 2004A Bonds could have a material adverse impact on the interest of the holders of the Series 2004A Bonds.

7. The Developments Might Not Succeed. A slowdown of the process of the Developments could adversely affect land values and reduce the ability or desire of the property owners to pay the annual Special Assessments. There can be no assurance that land development operations within the District will not be adversely affected by competition, a future deterioration of the real estate market and economic conditions or future local, state and federal governmental policies relating to real estate development, the income tax treatment of real property ownership or the national or global economies.

Land development operations, including the Developments, are subject to comprehensive federal, State and local regulations. Approvals for development of the Developments is required from various agencies. Failure to obtain any such approvals or to satisfy any applicable governmental requirements could adversely affect development of the Developments. Approvals that have been obtained for development of the Developments are subject to conditions that must be satisfied at various points in time. The failure to satisfy any such approvals could adversely affect the Developments. See “THE DEVELOPMENTS AND DEVELOPERS” herein.

8. The Debt Service Reserve Fund May Not Be Adequate. Some of the risk factors discussed herein, which, if materialized, would result in a delay in the collection of the Special Assessments, may not affect the timely payment of debt service on the Series 2004A Bonds because of the Debt Service Reserve Fund established by the District for the Series 2004A Bonds. The ability of the Debt Service Reserve Fund to fund deficiencies caused by delinquent Special Assessments is dependent on the amount, duration and frequency of such deficiencies. Moneys on deposit in the Debt Service Reserve Fund may be invested in certain obligations permitted under the Indenture. Fluctuations in interest rates and other market factors could affect the amount of moneys available in the Debt Service Reserve Fund to make up deficiencies.

9. There May Not Be A Resale Market For The Series 2004A Bonds. No assurance can be given that a market will exist for the resale of the Series 2004A Bonds. Because of general market conditions, or because of adverse or economic prospects connected with a particular bond issue, secondary marketing practices in connection with a particular issue may be suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

10. Tax Laws May Change. Various proposals are mentioned from time to time by members of the Congress of the United States of America and others concerning reform of the internal revenue (tax) laws of the United States. Certain of these proposals, if implemented,

39 could have the effect of diminishing the value of obligations of states and their political subdivisions, such as the Series 2004A Bonds, by eliminating or changing the tax-exempt status of interest on certain of such bonds. Whether any of such proposals will ultimately become law, and if so, what effect such proposals could have upon the value of bonds such as the Series 2004A Bonds cannot be predicted. However, it is possible that any such law could have a material and adverse effect upon the value of the Series 2004A Bonds. The Indenture does not provide for any adjustment to the interest rates borne by the Series 2004A Bonds in the event of a change in the tax-exempt status of the Series 2004A Bonds.

11. Lack Of Information Regarding The Developments. The District may have incomplete information concerning the Developments and the Developers. For example, the District has limited information concerning the condition of the land in the Developments, its suitability for future development and its value. Furthermore, except to the extent described in this Limited Offering Memorandum under the captions “THE DEVELOPMENTS AND DEVELOPERS,” the District has not been provided financial information regarding the Developers.

12. Environmental Issues. The value of the land within the District, the success of the Developments and the likelihood of timely payment of principal and interest on the Series 2004A Bonds could be affected by environmental factors with respect to the land in the District. Should the land be contaminated by hazardous materials in addition to any materials already known, this could materially and adversely affect the value of the land in the District, which could materially and adversely affect the success of the Developments and the likelihood of the timely payment of the Series 2004A Bonds. See “THE DEVELOPMENTS AND DEVELOPERS— Environmental,” herein.

13. The Developers May Not Have Sufficient Funds to Complete the Series 2004 Project. There can be no assurance, in the event the District does not have sufficient moneys on hand to complete the Series 2004 Project, that the District will be able to raise through the issuance of bonds, or otherwise, the moneys necessary to complete the Series 2004 Project. Although the Developers have agreed to complete (or provide funds for the completion of) the Series 2004 Project regardless of such insufficiency, and have entered into the Completion Agreements (defined herein) with the District as evidenced thereof, there can be no assurance that the Developers will have sufficient resources to do so. See “THE SERIES 2004A PROJECT – General” and “THE DEVELOPMENTS” herein.

14. Permitting Issues. Although the Consulting Engineer will certify that all permits necessary to complete the Developments have either been obtained or, in its expert opinion, will be obtained, and that there is no reason to believe that the necessary permits cannot be obtained for the entire Developments, in the event that those permits or approvals are not forthcoming or are significantly delayed, the ability of the Developers to complete the Developments would be significantly impaired or frustrated.

15. Competition. The growth strategy for the Developments is in competition with other communities located outside the District, whose growth will not generate Tax Increment Revenues for the payment of the Series 2004A Bonds. In the event that a large number of rental or commercial projects are constructed outside the District, the demand for residential housing

40 and commercial properties within the District could be reduced, thereby leading to a possible reduction in future development in the Developments and a reduction in collections of Tax Increment Revenues.

16. Economic Conditions. Certain economic or political developments, such as downturns in the State, national or international economy, increased national or international barriers to tourism or trade or international currency fluctuations could all adversely affect the continued development of the Developments, or its attraction to business and investors.

17. Special Considerations Concerning Interlocal Agreement Revenues. The following factors relate to risks associated with the Interlocal Agreement Revenues:

(a) Stagnated Property Values. Numerous events could occur that might reduce or cause stagnation in the value of real property within the District, including natural disasters, public acquisition of property within the District by the State or political subdivisions exercising their respective rights of eminent domain, or social, economic or demographic factors (or adverse public perceptions thereto) beyond the control of the District, the Midtown CRA, the City, the County or the taxpayers in the District. Any or all of such events could adversely affect the realization and collection of Tax Increment Revenues.

(b) Reduction in Millage Rates. The addition of significant numbers of new taxpayers or an increase of property values outside the District could result in an environment favorable to the reduction of the County and/or City millage rates that would, in turn, reduce the amount of Tax Increment Revenues.

(c) Assessment Disputes. State law allows taxpayers to dispute assessment valuations. Various state, local, national and international economic conditions may influence a taxpayer's willingness to make or forego such an appeal. The statutory method for determining Tax Increment Revenues payments uses a factor of 95%, due in part to an expectation of some such appeals. Any volume of appeals which are successful in reducing the overall assessed value of the District in excess of such a margin of error could result in reduced amounts of Tax Increment Revenues.

(d) Change in Law. State legislature, the courts or an administrative agency with jurisdiction in the matter could enact new laws or regulations or interpret, amend, alter, change or modify the laws or regulations governing the collection, distribution, definition or accumulation of ad valorem tax revenues generally, or Tax Increment Revenues payments specifically, in a fashion that could adversely affect the ability of the District to pay debt service on the Series 2004A Bonds.

(e) Covenant to Budget and Appropriate. The obligation of the City and the County to pay the EIP to the District is secured only the City’s and County’s covenant to budget and appropriate from legally available Non-Ad Valorem Revenues. This covenant does not create any lien upon or pledge of Non-Ad Valorem Revenues, nor does it preclude the County or the City from pledging in the future their Non-Ad Valorem Revenues, nor does it require the City or the County to levy and collect any particular

41 Non-Ad Valorem Revenues, nor does it give the District a prior claim on the Non-Ad Valorem Revenues of the City and the County as opposed to claims of general creditors of the City or the County. Such covenant of the City and the County to appropriate Non- Ad Valorem Revenues is subject in all respects to the payment of any obligations secured by a pledge of Non-Ad Valorem Revenues prior or subsequent to the date of the Interlocal Agreement (including the payment of debt service on bonds and other debt instruments of the City and/or County).

(f) Delay in Completion of Developments. The obligation of the City and the County to pay the EIP to the District and the obligation of the Midtown CRA Agency to pay the Tax Increment Revenues to the District is dependent upon the progress of the Developments. A substantial delay in the Developments, particularly for the early development components, may result in there being no Interlocal Agreement Revenues to support the payment of the Series 2004A Bonds. In such event, the Property will have to bear the burden of the full amount of the Special Assessments for both the Series 2004A Bonds and the Series 2004B Bonds.

SOURCES AND USES OF FUNDS

The table that follows summarizes the estimated sources and uses of proceeds of the Series 2004A Bonds. The table below does not address other available moneys including investment earnings and any amounts payable under the Completion Agreements.

Sources of Funds: Principal Amount of Series 2004A Bonds $73,580,000.00 (Less Original Issue Discount) (340,329.60) Total Sources $73,239,670.40

Use of Funds: Deposit to Series 2004A Acquisition and Construction Account $50,698,364.47 Deposit to Series 2004A Capitalized Interest Subaccount(1) 14,779,800.00 Deposit to Series 2004A Debt Service Reserve Account 5,448,450.00 Underwriter’s Discount 1,839,500.00 Cost of Issuance 473,555.93 Total Uses $73,239,670.40 ______(1) Represents interest on the Series 2004A Bonds for a period to and including November 1, 2007.

42 DEBT SERVICE REQUIREMENTS

The following table sets forth the approximate debt service requirements for the Series 2004A Bonds and the Series 2004B Bonds:

Aggregate Year Ending 2004A Bonds 2004A Bonds 2004A Bonds Series 2004B Debt * November 1 Principal* Interest Total Bonds Total Service

2004 $ 1,171,800.00 $ 1,171,800.00 $ 504,085.83 $ 1,675,885.83 2005 4,536,000.00 4,536,000.00 1,951,300.00 6,487,300.00 2006 4,536,000.00 4,536,000.00 1,951,300.00 6,487,300.00 2007 4,536,000.00 4,536,000.00 1,951,300.00 6,487,300.00 2008 $ 250,000 4,528,500.00 4,778,500.00 2,275,412.50 7,053,912.50 2009 955,000 4,492,350.00 5,447,350.00 2,272,987.50 7,720,337.50 2010 1,015,000 4,433,250.00 5,448,250.00 2,274,100.00 7,722,350.00 2011 1,075,000 4,370,550.00 5,445,550.00 2,273,587.50 7,719,137.50 2012 1,140,000 4,304,100.00 5,444,100.00 2,276,287.50 7,720,387.50 2013 1,215,000 4,233,450.00 5,448,450.00 2,277,037.50 7,725,487.50 2014 1,285,000 4,158,450.00 5,443,450.00 2,275,837.50 7,719,287.50 2015 1,365,000 4,078,950.00 5,443,950.00 2,272,687.50 7,716,637.50 2016 1,450,000 3,994,500.00 5,444,500.00 2,277,262.50 7,721,762.50 2017 1,540,000 3,904,800.00 5,444,800.00 2,274,400.00 7,719,200.00 2018 1,635,000 3,809,550.00 5,444,550.00 2,274,100.00 7,718,650.00 2019 1,735,000 3,708,450.00 5,443,450.00 2,276,037.50 7,719,487.50 2020 1,845,000 3,601,050.00 5,446,050.00 2,275,050.00 7,721,100.00 2021 1,960,000 3,486,900.00 5,446,900.00 2,275,975.00 7,722,875.00 2022 2,080,000 3,365,700.00 5,445,700.00 2,273,650.00 7,719,350.00 2023 2,210,000 3,237,000.00 5,447,000.00 2,272,912.50 7,719,912.50 2024 2,345,000 3,100,350.00 5,445,350.00 2,273,437.50 7,718,787.50 2025 2,495,000 2,952,031.25 5,447,031.25 2,274,900.00 7,721,931.25 2026 2,655,000 2,791,093.75 5,446,093.75 2,276,975.00 7,723,068.75 2027 2,825,000 2,619,843.75 5,444,843.75 2,274,500.00 7,719,343.75 2028 3,010,000 2,437,500.00 5,447,500.00 2,272,312.50 7,719,812.50 2029 3,200,000 2,243,437.50 5,443,437.50 2,274,925.00 7,718,362.50 2030 3,410,000 2,036,875.00 5,446,875.00 2,272,012.50 7,718,887.50 2031 3,630,000 1,816,875.00 5,446,875.00 2,273,250.00 7,720,125.00 2032 3,865,000 1,582,656.25 5,447,656.25 2,273,150.00 7,720,806.25 2033 4,110,000 1,333,437.50 5,443,437.50 2,276,225.00 7,719,662.50 2034 4,380,000 1,068,125.00 5,448,125.00 2,272,150.00 7,720,275.00 2035 4,660,000 785,625.00 5,445,625.00 2,275,437.50 7,721,062.50 2036 4,960,000 485,000.00 5,445,000.00 2,275,437.50 7,720,437.50 2037 5,280,000 165,000.00 5,445,000.00 2,276,662.50 7,721,662.50 Total $73,580,000 $103,905,200.00 $177,485,200.00 $74,596,685.83 $252,081,885.83 ______* Includes amortization installments.

43 THE DISTRICT

General

The District is an independent special district created in accordance with the Act by the Ordinance. The District encompasses approximately 56 gross acres of land located entirely within the City and the County.

Governance

The Act provides that a five-member Board of Supervisors (the “Board”) serves as the governing body of the District. Members of the Board (the “Supervisors”) must be residents of the State and citizens of the United States. Initially, the Supervisors were appointed in the Ordinance. Within 90 days after formation of the District, an election was held pursuant to which new Supervisors were elected on an at-large basis by the owners of the property within the District. Ownership of land within the District entitles the owner to one vote per acre (with fractions thereof rounded upward to the nearest whole number). A Supervisor serves until expiration of his or her term and until his or her successor is chosen and qualified. If, during a term of office, a vacancy occurs, the remaining Supervisors may fill the vacancy by an appointment of an interim Supervisor for the remainder of the unexpired term.

At the initial election by landowners, the landowners in the District elected two Supervisors to four-year terms and three Supervisors to two-year terms. Future elections will be held on a bi-annual basis. Six years after the initial appointment of Supervisors or in the year the District attains at least 250 qualified electors, whichever is later, Supervisors whose terms are expiring will begin to be elected (as their terms expire) by qualified electors of the District. A qualified elector is a registered voter who is at least eighteen years of age, a resident of the District and the State and a citizen of the United States. At the election where Supervisors are first elected by qualified electors, two Supervisors must be qualified electors and be elected by qualified electors, one to a four-year term and one to a two-year term. The other Supervisor will be elected by landowners for a four-year term. Thereafter, as terms expire, all Supervisors must be qualified electors and be elected by qualified electors to serve staggered terms. The District reasonably anticipates that qualified electors will begin electing Supervisors in 2009.

Notwithstanding the foregoing, if at any time the Board proposes to exercise its ad valorem taxing power, prior to the exercise of such power, it will call an election at which all Supervisors will be elected by qualified electors in the District. Elections subsequent to such decision will be held in a manner such that the Supervisors will serve four-year terms with staggered expiration dates in the manner set forth in the Act.

The Act provides that it will not be an impermissible conflict of interest under State law governing public officials for a Supervisor to be a stockholder, officer or employee of a owner of the land within the District.

44 The current members of the Board of Supervisors and the office and term of each member are set forth below:

Member of Name Title the Board Since Term Expires Deborah Samuel(1) Chairman 2003 November 2008 Michael Ullian Assistant Secretary 2003 November 2008 Richard Forrest(1) Vice Chairman 2003 November 2006 Linda Nickels(1) Assistant Secretary 2003 November 2006 Aaron Newman(1) Secretary 2003 November 2006 (1) Employees of the Developers or related entities.

A majority of the Supervisors constitutes a quorum for the purposes of conducting the business of the District and exercising its powers and for all other purposes. Action taken by the District will be upon a vote of the majority of the Supervisors present unless general law or a rule of the District requires a greater number. All meetings of the Board are open to the public under the State’s “sunshine” or open meetings law.

Powers and Authority

As a special district, the District has only those powers specifically delegated to it by the Act and the Ordinance, or necessarily implied from powers specifically delegated to it. The Act provides that the District has the power to issue general obligation, revenue and special assessment bonds in any combination to pay all or part of the cost of infrastructure improvements authorized under the Act. The Act further provides that the District has the power to levy and assess taxes on all taxable real and tangible personal property, and to levy special assessments on specially benefited lands, within its boundaries to pay the principal of and interest on bonds issued and to provide for any sinking or other funds established in connection with any such bond issues. The Act also authorizes the District to impose assessments to maintain assets of the District and to pay operating expenses of the District. The District may also impose user fees, rates and charges and may enter into agreements with property owner associations within and without the boundaries of the District in order to defray its administrative, maintenance and operating expenses.

Among other provisions, the Act gives the District the right (i) to hold, control, and acquire by donation, purchase, condemnation, or dispose of, any public easements, dedications to public use, platted reservations for public purposes, or any reservations for those purposes authorized by the Act and to make use of such easements, dedications, or reservations for any of the purposes authorized by the Act, (ii) to finance, fund, plan, establish, acquire, construct or reconstruct, enlarge or extend, equip, operate and maintain systems and facilities for various basic infrastructure, including District roads equal to or exceeding the specifications of the county in which such district roads are located, facilities for indoor and outdoor recreational, cultural and educational uses, and any other project within or without the boundaries of the District, when a local government has issued a development order approving or expressly requiring the construction or funding of the project by the District, or when the project is the subject of an agreement between the District and a governmental entity and is consistent with the

45 local government comprehensive plan of the local government within which the project is to be located, (iii) to borrow money and issue bonds of the District, and (iv) to exercise all other powers necessary, convenient, incidental, or proper in connection with any of the powers or duties of the District stated in the Act.

Also, pursuant to the Ordinance, the District has been granted special powers pursuant to Section 190.012(1), Florida Statutes, Sections 190.012(2)(d) and (f), Florida Statutes, (except for powers regarding waste disposal) and Section 190.012(3), Florida Statutes. These special powers include the right to (i) finance, fund, plan, establish, acquire, construct or reconstruct, enlarge or extend, equip, operate, and maintain systems, facilities, and basic infrastructure for (a) water management and control for the lands within the District and to connect some or any of such facilities with roads and bridges, (b) water supply, sewer, and wastewater management, reclamation, and reuse or any combination thereof, and to construct and operate connecting intercepting or outlet sewers and sewer mains and pipes and water mains, conduits or pipelines, in along, and under any street, alley, highway or other public place or ways, and to dispose of any effluent, residue, or other byproducts of such system or sewer system, (c) bridges or culverts that may be needed across any drain, ditch, canal, floodway, holding basin, excavation, public highway, tract, grade, fill, or cut and roadways over levees and embankments, and to construct any and all of such works and improvements across, through, or over any public right-of-way, highway, grade, fill or cut, (d) District roads equal to or exceeding the specifications of the county in which such District roads are located, and street lights, (e) buses, trolleys, transit shelters, ridesharing facilities and services, parking improvements, and related signage, (f) investigation and remediation costs associated with the cleanup of actual or perceived environmental contamination within the District under the supervision or direction of a competent governmental authority unless the covered costs benefit any person who is a landowner within the District and who caused or contributed to the contamination, (g) conservation areas, mitigation areas, and wildlife habitat, including the maintenance of any plant or animal species, and any related interest in real or personal property, and (h) any other project within or without the boundaries of the District when a local government issued a development order approving or expressly requiring the construction or funding of the project by the District, or when the project is the subject of an agreement between the District and a governmental entity and is consistent with the local government comprehensive plan of the local government within which the project is to be located, (ii) provide security, including, but not limited to, guardhouses, fences and gates, electronic intrusion detection systems, and patrol cars, and collection of commercial or industrial waste, (iii) provide for the collection of commercial or industrial waste, and (iv) adopt and enforce appropriate rules in connection with the provision of one or more services through the District’s systems and facilities.

The Act does not empower the District to adopt and enforce land use plans or zoning ordinances, and the Act does not empower the District to grant building permits; these functions are performed by the County, acting through its Board of County Commissioners and its departments of government.

The Act exempts all property of the District from levy and sale by virtue of an execution and from judgment liens, but does not limit the right of any owner of bonds of the District to pursue remedies for enforcement of any lien or pledge of the District in connection with such bonds, including the Series 2004A Bonds.

46 The District Manager and Other Consultants

The Act authorizes the Board to hire a district manager as the chief administrative official of the District. The Act provides that the district manager will have charge and supervision of the works of the District and will be responsible for (i) preserving and maintaining any improvement or facility constructed or erected pursuant to the provision of the Act, (ii) maintaining and operating the equipment owned by the District, and (iii) performing such other duties as may be prescribed by the Board.

The District has hired Severn Trent Services, Inc. to serve as district manager to the District (the “District Manager”). The District Manager is actively involved in the management of more than 130 special districts throughout the State of Florida, including community development districts, that have collectively issued in excess of $3 billion of bonds in more than 230 separate financings. The District Manager’s office is located at 10300 N.W. 11th Manor, Coral Springs, Florida 33071.

THE SERIES 2004A PROJECT

Overview

The infrastructure to be designed, constructed and/or acquired by the District consists of the acquisition, construction, installation and equipping of certain parking facility improvements and public open space and other improvements. According to the District Engineer, the total expected costs to complete the Series 2004A Project is expected to be approximately $51,204,019. See Appendix A hereto.

Series 2004A Project

Proceeds from the Series 2004A Bonds, together with other legally available moneys, including moneys which may be received by the District from the Developers under the Completion Agreements (defined below), will be used to finance the Series 2004A Project. The Developers will covenant that, in the event the costs of the Series 2004 Project are higher than those in the Engineer’s Report attached as “Appendix A – Engineer’s Report,” they will fund that portion of the Series 2004 Project not financed by the proceeds of the Series 2004 Bonds pursuant to (i) a Completion Agreement between the District and DDR with respect to the Series 2004 Project and (ii) a Completion Agreement by the District and the Developers with respect to the Series 2004B Project (collectively, the “Completion Agreements”). See “THE DEVELOPMENTS – Developments Finance Plan” below for additional information regarding the financing of the Developments.

47 Construction of the Series 2004A Project has already commenced and is estimated to be completed in April 2006. A summary of the estimated costs of the Series 2004A Project are set forth in the following table:

Description of Work Estimated Cost Parking Improvements $45,337,889 Public Open Space and Other Improvements 5,866,130 Total $51,204,019

All permits necessary to begin construction of the Series 2004A Project have been obtained. The District received Conceptual Environmental Resource Permit approval for the Developments from the Department of Environmental Resource Management on January 30, 2004. The District Engineer is of the opinion that all permits necessary to complete the infrastructure are reasonably obtainable. Table V of the Engineers’ Report (Appendix A) details the permits required for the Series 2004 Project and the status of such permits.

The District has entered into a Construction Management Agreement with Bovis Lend Lease, Inc. (“Bovis”), whereby Bovis will act as Construction Manager for the construction and installation of the infrastructure constituting the Series 2004 Project. The Construction Management Agreement provides for a guaranteed maximum price that is expected to be within the District Engineer’s cost estimate for the Series 2004 Project. See “THE DEVELOPMENTS AND DEVELOPERS—Infrastructure,” herein. Bovis has also contracted with DDR to serve as construction manager for certain portions of the development projects within Development Area No. 2.

THE DEVELOPMENTS AND DEVELOPERS

The respective Developer of each component of the planned developments has provided the following information regarding ownership and planned development. Such information is included because it may be relevant to an informed evaluation of the security for the Series 2004A Bonds. However, no assurance can be given that ownership of the property will not change, that the planned developments will occur at all, will occur in a timely manner, or will occur as presently anticipated and described below. The District makes no representation as to the accuracy or adequacy of such information, or as to the experience, abilities or financial resources of the Developers.

The Developers are not personally liable for payment of the Special Assessments or the Series 2004A Bonds, and the following information should not be construed to suggest that the Special Assessments or the Series 2004A Bonds are personal obligations or indebtedness of the Developers or any other landowners in the District.

Overview

The District Lands are comprised of a 56-acre site (“Property”) planned for two distinct planned developments: Midtown Miami and the Shops at Midtown Miami (collectively defined herein as the “Developments”). The Developments will create a mixed-use community with

48 residential, retail and commercial components. The Developments are within the boundaries of the District.

The District is located within the jurisdictional limits of the City and the County. The District is bordered by NE 36th Street to the North, Miami Avenue to the West, NE 29th Street to the South and the Florida East Coast Railroad right-of-way to the East. The District is located approximately one block to the West of Biscayne Boulevard. The aerial photograph on the inside cover of this Limited Offering Memorandum shows the general location of the District and its surroundings.

The Property was acquired by Biscayne Development Partners LLC, a Florida limited liability company (“Biscayne”) from Florida East Coast Railway, L.L.C. on December 5, 2002. At the time of such acquisition, the land use designations affecting the Property would not have allowed the Developments. The Property is one of the largest undeveloped land parcels in the City and was a former railroad-switching yard known as the “Buena Vista Yards.” The current zoning and other entitlements for the Property allow for the transformation of the Property from a 56-acre vacant land parcel to an urban neighborhood. The Developments are part of an overall effort by the City to revitalize its downtown area. See “Zoning” below.

The City and the County approved two final subdivision plats which encompass all of the Property; (i) the Midtown Miami East plat (“Midtown Miami East”) and (ii) the Buena Vista West plat (“Buena Vista West”). Tracts within the Midtown Miami East plat are depicted with “MME” herein and shown in the lighter shade in the depiction below. Tracts within the Buena Vista West plat are depicted with “BVW” herein and shown in the darker shade in the depiction below. The chart below graphically depicts all of the tracts created by the two plats, which are all within the District.

49 The developer of Midtown Miami, Midtown Partners, LLC, a Florida limited liability company (“Midtown Partners”) is an entity associated with the Midtown Group, and is a venture principally owned (directly or indirectly) and controlled by the Joseph Cayre family and Michael Samuel. See “Development Area 1 – The Property Owners”. The Midtown Group (“Midtown Group”) is a series of ventures principally between the Joseph Cayre family and Michael Samuel and is associated with Midtown Equities, LLC, a New York limited liability company (“Midtown Equities”), an entity owned and controlled by the Joseph Cayre family.

Midtown Partners will own and be responsible for the development of all of the tracts in the Midtown Miami East plat and Tract B of the Buena Vista West plat (this area is collectively referred to herein as “Development Area 1” or “Midtown Miami”). Development Area 1 encompasses approximately 26 acres (including roadways to be developed) and is zoned and planned for residential condominiums with ancillary retail on the ground levels, office, hotel, restaurant/bar and other uses.

The developer of the Shops at Midtown Miami is DDR Miami Avenue, LLC, a Delaware limited liability company (“DDR”). DDR is a wholly owned subsidiary of Developers Diversified Realty Corporation (“DDR Corp.”), a publicly traded real estate investment trust (NYSE: DDR) with a total enterprise value in excess of $5 billion. See “Development Area 2 – The Property Owners”.

DDR owns the majority of, and is responsible for the retail development on Tract A and Tracts C through F of the Buena Vista West plat (except for the retail development on the easterly portion of Tract D being developed by the Midtown West Partnership, as hereinafter defined), (this area is collectively referred to herein as “Development Area 2” or “Shops at Midtown Miami”). Development Area 2 is approximately 30 acres at ground level (including roadways to be developed) and is currently zoned and planned for retail development and rental residential products, all as further described below.

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50 The table below sets forth the current planned buildout for each Development Area. The specific components may change during the course of development.

Development Area 1 Development Area 2 Midtown Miami Shops at Midtown Miami x Eight (8) high-rise condominium towers x Shops at Midtown Miami representing planned with approximately 2,600 for sale approximately 600,000 square feet of retail condominium units and 71,750 square feet of space being developed by DDR. ground floor retail. All 8 towers are planned x Approximately 30,000 square feet of retail to include private reserved parking structures space being developed by the Midtown West (not part of the District’s parking Partnership on Tract D (BVW). infrastructure work) and other amenities. x 397 apartment and/or live/work units being x One (1) office tower planned for at least developed by the Midtown West Partnership. 150,000 square feet of gross leasable space. x Three (3) District owned and managed x One (1) mixed-use facility for at least 120,000 parking structures with 3,017 parking spaces. square feet. x A District owned and managed public plaza integrated within Tract C (BVW). Development Area 1 – Midtown Miami

The following information pertains to Development Area 1 property owners, their development plan, their financing plans, and other pertinent information.

Development Area 1 - Property Owners

Midtown Partners owns 100% of the member interests in nine (9) Florida limited liability companies that will own all of the platted tracts within Development Area 1. Each of the limited liability companies will own one or more tracts within Development Area 1. The member interests in Midtown Partners are owned by and in the following percentages: (a) Cayre Midtown Miami LLC, a Delaware limited liability (“Cayre Midtown”) owns 58.15%, (b) Samuel Midtown Miami LLC, a Florida limited liability company (“Samuel Midtown”) owns 36.85%, and (c) Buena Vista Alarga, LLC, a Delaware limited liability company (“BV Alarga”) owns a passive non-voting 5% interest. The majority of the member interests in Cayre Midtown are owned by the Joseph Cayre family, which collectively own 92.75%. The remaining member interests of 7.25% are collectively owned by various key members of the Midtown development team (including Daniel K. Pfeffer) and a passive investor. Michael Samuel owns, directly or indirectly, 100% of the member interests of Samuel Midtown. Viktoria Sater owns 100% of the member interests of BV Alarga.

In addition to Midtown Miami, the Midtown Group is also developing additional properties in Florida and Maryland. Just north of Midtown Miami, the Midtown Group has redeveloped a 15-acre property called Nirvana, fulfilling its commitment to the City and the County to provide affordable housing in the area. The Midtown Group is also responsible for another large scale infill development known as The Residences at The Ritz-Carlton Yacht Club & Spa, Inner Harbor in Baltimore, Maryland which broke ground on May 21, 2004. This is a $140 million project planned for 500,000 square foot buildout and represents the world’s first entirely multi-family Ritz-Carlton project.

51 Midtown Equities: Midtown Equities is a family owned and operated investment firm and was founded to manage the Cayre family real estate and entertainment assets. Joseph Cayre, the family patriarch and Chairman of Midtown Equities, built his New York-based empire in the entertainment business in the 1970s and 1980s. In addition, over the past 20 or so years, Joseph Cayre and later Midtown Equities have been active in the real estate business. Today, Midtown Equities oversees a portfolio of investment and development projects across the country. Notably, an entity principally owned by the Cayre family and operated under Midtown Equities, is the owner of approximately 25% of the partnership that owns the World Trade Center leasehold rights. Just three months before the attacks of September 11th, the World Trade Center partnership obtained a 99-year lease to control the World Trade Center. At the time of the original acquisition, the World Trade Center transaction represented the largest real estate transaction in New York City’s history valued at $3.2 billion. The company is currently actively involved in the rebuilding process of the World Trade Center. Midtown Equities has also developed and owns office buildings and retail properties in Washington, DC, New Jersey, and New York City.

Described below are the principal members of Midtown Partners involved in the development of the property within Development Area 1:

Joseph “Joe” Cayre: Mr. Cayre is Chairman of Midtown Equities. He is a recognized real estate investor and developer, with current real estate holdings that include retail, commercial and residential developments across the country. Joe Cayre built his fortune in the media and entertainment industry. In the 1970s, Cayre founded Salsoul Records, a company became the largest independent disco label in the world, at that time, and later, a record label. The company was sold to RCA for $125 million in 1979. One year later, Cayre bought it back for $1.5 million. He followed that with Good Times Entertainment in 1984, a movie licensing and production company that distributed video programs to all 50 states and every major developed country in the world. The company’s largest customer was Wal Mart and earned the distinction as Wal Mart’s “Vendor of the Year” in 1990. Mr. Cayre served as the president and CEO of Good Times Entertainment for 16 years. In 1996, Mr. Cayre also co-founded GT Interactive Software Corporation, a public company that developed and distributed entertainment and educational games and software that served as the exclusive supplier to Wal Mart, Target and K Mart. In 1996, GT Interactive was also honored with Wal Mart’s “Vendor of the Year” award. In four years, the company grew from a staff of two to over 1,000 employees with operations in over 40 countries. The Cayre interests in GT Interactive were sold in 2001. Mr. Cayre is also a leading New York philanthropist, serving on the board of several charitable institutions as well as his own, the Joe and Trina Cayre Foundation.

Daniel K. Pfeffer: In 1998, Daniel K. Pfeffer joined Midtown Equities as its President to structure all of Joe Cayre’s real estate and entertainment assets and several of his operating companies into a streamlined operating and investment firm. Mr. Pfeffer’s background includes real estate investment banking with Smith Barney Real Estate, an acquisitions specialist at GE Capital where he was responsible for acquiring in excess of $2 billion in various government properties from HUD and the Resolution Trust Corp (RTC) and was charged with the responsibility of overseeing the $2 billion acquisitions portfolio. Mr. Pfeffer, along with his partners is responsible for various aspects of the development process of all Midtown Equities (including Midtown Group) projects and is responsible for the operations as portfolio manager.

52 Mr. Pfeffer received a BA in economics from the University of Rochester and an MBA from New York University.

Michael Samuel: Michael Samuel is the founder and owner of Samuel & Co., founded in 1979, it is the umbrella organization that manages all of Michael Samuel’s real estate assets and investments. To date, in joint ventures with several prominent companies, Michael Samuel has developed close to 50 projects in New York, San Francisco, Virginia, Florida and New Orleans. His portfolio represents almost $2 billion in residential, retail, commercial, hotel, and industrial development. In 1983, Mr. Samuel acquired control of City Wide, a property management and full-service building maintenance firm based in Port Washington. His company was the first to pioneer a high-tech time management imprint recognition system which enhanced security and accountability for clients. Mr. Samuel began investing in residential real estate and maintained control over all aspects of the investments by serving as the property management company for each of his investments. Just prior to September 11, 2001 he sold City Wide to focus exclusively on real estate development. He has partnered with the Joseph Cayre family to develop several residential and mixed-used projects in Miami, Florida and is involved in all aspects of the Midtown Group’s acquisitions, planning and construction management process.

Development Area 1 - Development Plan

Midtown Partners is currently developing the property within Development Area 1 for a total of eight (8) high-rise condominium towers to be located on Tracts A through I of Midtown Miami East and two buildings on Tract B of Buena Vista West comprised of an office tower and a mixed-use facility. Midtown Partners anticipates that, at completion, Development Area 1 will encompass approximately 2,600 residential condominium units, an office tower encompassing at least 150,000 square feet gross leasable area, and a mixed-use facility of at least 120,000 sq. ft. The sizes of the condominium units will vary and will be modified over time to meet market demands. On May 6, 2004, Midtown Partners offered its first condominium tower with a wide range of product from studio to bi-level and tri-level live/work spaces. See “Development Area 1 Marketing Plan” below.

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53 The following pages outline the development plan for Development Area 1 – Midtown Miami. The upper area in the depiction below outlines the area defined as Development Area 1.

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54 Development Area 1 - Midtown Miami Development Plan Summary and Status Update % Imp. SF Tract Planned w/Contract Const. Land SF Development / Lease / Const. Start Finish Date Est. Const. Est. Finished ILA Stage Tract (2) Owner (3) (4) Component (5) Description and Status (5) Open (7) Date (6) (8) Costs (9) Value (10) Triggers (11)

A & B(12) Midtown Miami 88,446 Condominium Planned for approximately 325 units and 0% October February $60 Million $108 Million Not Applicable (MME) No. 8 LLC Tower 16,000 square feet of ground floor retail 2007 2010

C (MME) Midtown Miami 80,365 Condominium Planned for approximately 325 units and 0% October February $60 Million $108 Million Not Applicable No. 7 LLC Tower 16,000 square feet of ground floor retail 2007 2010

D (MME) Midtown Miami 93,140 Condominium Planned for approximately 325 units and 0% February February $60 Million $109 Million Not Applicable No. 6 LLC Tower 25,000 square feet of ground floor retail 2007 2009

E (MME) Midtown Miami 68,787 Condominium Planned for approximately 325 units and 0% October February $60 Million $108 Million Not Applicable No. 5 LLC Tower 16,000 square feet of ground floor retail 2005 2008

F (MME) Midtown Miami 83,246 Condominium Tower #2. Architectural design 80% 0% January December $78 million $175 million ILA Stage 2 No. 4 LLC Tower complete. Designed as 30-story tower 2005 2006 Performance with 402,000 square feet of improved Level re: Condo facilities - 387 condominium units, Tower #2 amenities, and approximately 10,000 square feet of ground floor retail. Marketing expected to begin in July 2004.

G (MME) Midtown Miami 66,972 Condominium Planned for approximately 325 units and 0% June 2005 June 2007 $58 million $102 million Not Applicable No. 3 LLC Tower 26,000 square feet of ground floor retail

H (MME) Midtown Miami 72,484 Condominium Tower #1. Architectural design 100% 100% August December $72 million $125 million ILA Stage 1 No. 2 LLC Tower complete. 28-story tower with 374,000 sf 2004 2006 Performance of improved facilities - 336 condominium Level re: Condo units, amenities, and 9,000 sq.ft. of ground Tower #1 floor retail.

I (MME) Midtown Miami 71,218 Condominium Planned for approximately 325 units and 0% February February $60 Million $109 Million Not Applicable No. 1 LLC Tower 20,750 square feet of ground floor retail. 2009 2011

B (BVW) Midtown Miami 155,252 Office Tower Planned for at least 150,000 sf of gross 0% December December $22,983,750 $22,983,750 ILA Stage 2 No. 9 LLC & Mixed-Used leasable area office space and a 120,000 sf 2005 2007 (office tower) (office tower) Performance Tower mixed-use facility. $24,000,000 $24,000,000 Level re: Office (mixed use) (mixed use) Tower & Hotel August February 624,658 2004 2011 $554,983,750 $990,983,750

55 NOTES: (1) To be updated by Midtown Partners pursuant to the Midtown Partners Continuing Disclosure Agreement – See “Appendix I – Forms of Continuing Disclosure Agreements.” (2) Tract designations as shown in the figure above pursuant to the Midtown Miami East (“MME”) plat or the Buena Vista West (“BVW”) plat. See “Entitlements” below. (3) 100% owned by Midtown Partners. See “Development Area 1 – Property Owners” above. (4) As shown in the MME and BVW Plats. (5) As currently planned by Midtown Partners. This is subject to change, including but not limited to the scope or timing of the development. (6) A percentage of the total usable improved land evidenced with either (a) signed contracts with condominium buyers or (b) executed leases pertaining to the office or neighborhood retail, or (c) a contract with a service provider for hotel. (7) As estimated by Midtown Partners. Any date noted with “actual” represents the date Midtown Partners received an approved building permit from the City of Miami. (8) As estimated by Midtown Partners. Any date noted with “actual” represents the date Midtown Partners received a certificate of occupancy, as defined under the Florida building code, from the City of Miami. (9) As estimated by Midtown Partners. This reflects the vertical construction costs only and excludes land costs. (10) Finished value represents Midtown Partners estimate of value for the planned improvements based on the proposed development. Any value noted with “actual” represents the sellout value represented by the aggregate value of closed condominium contracts and a reasonable market accepted approach for income producing property. Actual assessed value shall be an acceptable value in this column for any building that has received a certificate of occupancy, as defined under the Florida building code, from the City of Miami and the County Tax Assessor has adjusted the values to reflect the improved status of the tract. Any such value shall be noted with “Actual AV.” (11) This column monitors the development that Midtown Partners plans to use to meets its performance obligations under the ILA. See “THE FINANCING PLAN”, “SECURITY FOR THE BONDS – Interlocal Agreement” and “Appendix B - Interlocal Agreement.” (12) Midtown Partners currently plans to merge these two tracts to develop a condominium tower.

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56 Development Area 1 – Marketing Plan

Marketing and sales activities for Midtown Miami formally began on May 6, 2004. The marketing and sales efforts are run from Midtown’s recently completed Florida marketing headquarters and sales center located at 3110 N.E. 2nd Avenue, Miami, Florida 33137.

On May 6, 2004, Midtown Partners released for sale all 336 units of its first condominium tower (“Tower #1”) located on Tract H (MME). Tower #1 amenities include a rooftop pool and fitness center, covered parking, 24-hour security and other amenities. Units ranged in size from 565 square feet to 1,700 square feet with penthouse units exceeding 4,000 square feet. Tower #1 was segregated into three separate segments, as described below:

x “Mews” – 18 bi-level and tri-level live/work units – prices started in the high $600,000s; x “Midrise” – 62 units of studio, 1 to 2 bedroom, single or bi-level– prices ranged from high 100,000s to the $600,000s; x “Tower” – 256 units of studios to 4 bedrooms, single or bi-level – prices ranged from high 100,000s to $2,000,000

In a one-day period from the initiation of sales, all 336 units were under contract for sale at an average price of nearly $340 per square foot per of unit. This translates into a sellout value of approximately $125 million. All contracts required an upfront 10% deposit with additional deposits required during construction.

Based on the demand realized from the sales in Tower #1, Midtown Partners expects to initiate sales for its second condominium tower (“Tower #2”) on or before October 2004. The design for Tower #2 is substantially complete. The design calls for approximately 402,000 square feet of living and ground floor retail space, 30 floors and 387 condominium units.

Midtown Partners expects that Condominium Towers #1 and #2 will be complete and certificates of occupancy will be issued by December 31, 2006 with delivery of one to two additional towers each year thereafter. Midtown Partners plan to always have product available for sale to condominium purchasers. When demand warrants, Midtown Partners will initiate the construction of another condominium tower to meet such demand. In order to keep down delivery time, Midtown Partners expect to have the next condominium tower under design by its architect team. Based on this plan, Midtown Partners expect that all units would be completed and delivered to end users by 2010.

Midtown Partners has begun discussions with end users in order to begin the design development of the 150,000 square foot office building. Midtown Partners expects that construction will commence by December 31, 2005 and be completed no later than December 31, 2007.

Development Area 1 – Financing Plan

The Property comprising the Developments was acquired by Biscayne from Florida East Coast Railway, L.L.C. on December 5, 2002 for $34,000,000. At the time of such acquisition,

57 the land use designations affecting the Property would not have allowed the Developments. Biscayne’s ownership is substantially similar to the ownership of Midtown Partners, as described above in “Development Area 1 – Property Owners.”

A substantial portion of the property interests within the Buena Vista West plat were sold to DDR on April 29, 2004 for $38,500,000. Tracts G and H in Buena Vista West, which are small undevelopable tracts totaling .44 acres, have been transferred to G Tract Development, LLC and H Tract Development, LLC, respectively, both of which are entities owned by the Midtown West Partnership. See the “Development Area 2 – The Property Owners” below. To facilitate development of Midtown Miami, Biscayne is expected to transfer all of the tracts in Midtown Miami East and Tract B of Buena Vista West (all of which comprise Development Area 1) to nine (9) Florida limited liability companies which will be owned 100% by Midtown Partners. See the “Development Area 1 – The Property Owners” above.

Currently, Development Area 1 is encumbered by a mortgage loan in favor of Fremont Investment & Loan, a California industrial bank, in the approximate outstanding principal amount of $20,000,000. The mortgage loan matures on January 1, 2007.

Vertical construction for Tower #1 is expected to commence in August 2004 and be completed by December 2006. Miller & Solomon General Contractors, Inc. (“Miller Solomon”), a prominent general construction company based in Miami, Florida will act as construction manager for Tower #1. The approximate sellout value for Tower #1 is $125 million.

Vertical construction for the Tower #2 is expected to commence in January 2005 and be completed by December 2006. It is expected that Miller Solomon will act as construction manager for Tower #2. The approximate buildout value for Tower #2 is expected to be $175 million.

Midtown Partners will procure construction financing for each development project it undertakes within Development Area 1.

Development Area 2 – Shops at Midtown Miami

The following information pertains to Development Area 2 property owners, their development plan, their financing plans, and other pertinent information.

Development Area 2 - Property Owners

DDR: General. On April 29, 2004, DDR acquired from Biscayne substantially all of the property interests in Buena Vista West. DDR Corp. is in the business of acquiring, developing, redeveloping, owning, leasing and managing shopping centers and business centers. DDR Corp. currently owns and manages over 460 operating and development properties totaling approximately 101 million square feet of real estate in 44 states. Approximately 95% of the DDR Corp.’s portfolio is leased and occupied. Annual occupancy has not dropped below 94%. As of the date of this Limited Offering Memorandum, DDR Corp.’s total market capitalization is approximately $3.7 billion and its total enterprise value is in excess of $7.7 billion. As of March 31, 2004, DDR Corp.’s Total Debt to Undepreciated Assets was approximately 52% and Debt

58 Service Coverage Ratio was 3.35x. DDR Corp.’s corporate debt is rated Baa3 by Moody’s and BBB by Standard & Poor’s.

Forward-Looking Statements. DDR Corp. considers portions of the information contained in this Limited Offering Memorandum and attributable to it to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934, both as amended, with respect to DDR’s expectation for future periods. Although DDR Corp. believes that the expectations reflected in such forward- looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of DDR Corp. to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as oversupply of space or a reduction in demand for real estate in the area, competition from other available space, dependence on rental income from real property, the loss of a major tenant or inability to enter into definitive agreements with regard to DDR Corp.’s financing arrangements or DDR Corp.’s failure to satisfy conditions to the completion of these arrangements. For more details on risk factors relating to DDR Corp., reference is made to DDR Corp.’s Form 10-K as of December 31, 2003.

Midtown West Partnership: On April 29, 2004, Tracts G and H of Buena Vista West, as well as certain developable air rights within various tracts of Buena Vista West were acquired from Biscayne by several Florida limited liability companies, each of which is owned and controlled by Jack J. Cayre and Jonathan Samuel, (collectively, the “Midtown West Partnership”). The Midtown West Partnership will be responsible for the development of the apartment and live/work units contained within Development Area 2 as well as the retail component on the easterly portion of Tract D of Buena Vista West.

Jack J. Cayre: Jack J. Cayre serves as a principal of Midtown Equities. He is currently involved in the acquisition, design, development and daily operations of various properties around the United States. After studying business at the Wharton School of Business at the University of Pennsylvania, Jack J. Cayre joined the family’s media and entertainment business at the age of 19, taking on major corporate responsibilities full-time. Soon after, he founded Double J. Records, a new record label that was an offshoot of the family’s SalSoul records, ranked as the largest disco label in the world. In 1995, Jack Cayre co-founded with his father Joe Cayre GT Interactive Software Corporation, as described above. At GT Interactive, Jack J. Cayre was instrumental in the acquisition, construction and management of all of its US distribution, real estate and operational facilities.

Jonathan Samuel: Jonathan Samuel (son of Michael Samuel) has served as the Assistant Controller for the Midtown Group since September 2001. He has assisted in the negotiation of obtaining financing for the construction of condominium towers and the acquisition of raw land. He has assisted in the preparing of marketing studies and the review and preparation of residential condominium documents. He is expected to obtain his BA in Business Administration and Accounting from the University of Miami on August 2004.

59 Development Area 2 - Development Plan

DDR is currently developing the majority of the retail portion of the property within Development Area 2 (excluding the approximate 30,000 sq.ft. of retail being developed by the Midtown West Partnership on Tract D of BVW) as a retail facility to be known as The Shops at Midtown Miami (“DDR Retail Facility”).

The DDR Retail Facility will feature three distinct retail zones, the North Block, the Mid Block and the South Block.

The North Block will total approximately 323,000 square feet of retail space featuring five anchor tenants of sizes between 20,000 to 140,000 square feet. To the east, the North Block will be bound by Buena Vista Avenue and on the west by North Miami Avenue, which will feature an eclectic mix of neighborhood-serving specialty retailers and service providers.

The Mid Block West will feature a mix of anchor tenants. A pedestrian walkway will lead shoppers from North Miami Avenue to a landscaped courtyard, complete with park benches and a fountain as the focal point of this public space. Just across Buena Vista Boulevard is Mid Block East, a mix of up to 12 restaurants which will serve the needs of residents, shoppers, tourists, and near-by office workers.

The South Block North will potentially feature a large anchor store, as well as general retail stores.

In addition, the Midtown West Partnership is developing the apartment and live/work units in Development Area 2. The apartments and live/work units are scattered throughout Development Area 2 and are in a variety of configurations. They range from live/work spaces wrapping the perimeter of the District’s parking structures on Tracts A (BVW) and D (BVW) to mid-rise apartments on Tracts D (BVW) and F (BVW). Due to the complexity of coordinating construction of the spaces wrapping the District’s parking structures on Tracts A (BVW) and D (BVW), the Midtown West Partnership expects to contract with DDR to build the shell of these two components as more particularly set forth below in the “Financing” section. In total, the Midtown West Partnership expects 397 apartment units to be developed in Development Area 2. The Midtown West Partnership is in the planning stages for the two mid-rise apartments towers.

60 The following pages outline the development plan for Development Area 2 – Shops at Midtown Miami. The lower area in the depiction below outlines the area defined as Development Area 2.

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61 Development Area 2 - Shops at Midtown Miami Development Plan Summary and Status Update Tract Planned % Imp. SF Const. Land SF Development w/Contract / Const. Start Finish Est. Const. Costs Est. Finished Tract (2) Owner (3) (4) Component (5) Description and Status (5) Lease / Open (7) Date (7) Date (8) (9) Value (10) ILA Stage Triggers (11)

A (BVW) -- 393,908 -- North Block (“NB”) - A multi-elevation ------tract with different owners and planned development as summarized below.

DDR DDR Retail 323,946 square feet(GLA) planned. July 2004 October $50,000,000(12) $110,000,000(12) ILA Stage 1 Facility 2006 Performance Level re: Retail

NB Development Apartments 42 residential rental units that wraps the $3,641,400 $3,641,400 ILA Stage 2 LLC District parking (13) Performance Level re: Apartments

District Public Parking 3 level-parking garage consisting of 1,799 July 2004 April (14) (14) ILA Stage 1 Structure planned spaces on the second, third and 2006 Performance Level re: fourth levels above the ground floor retail District space.

C (BVW) -- 170,607 -- Mid-Block West (“MBW”) – A multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 82,849 square feet (GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

District Midblock Plaza Public Open Space July 2004 April (14) (14) ILA Stage 1 2006 Performance Level re: Public Plaza

D (BVW) -- 96,474 -- Mid-Block East (“MBE”) – A multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 31,920 square feet (GLA) planned. August May 2006 (12) (12) ILA Stage 1 Facility 2005 Performance Level re: Retail

CEB Retail 25,420 square feet (GLA) planned. January May 2006 $3,000,000 $3,000,000 ILA Stage 1 Development LLC 2005 Performance Level re: Retail

District Parking 331 planned Parking Spaces January May 2006 (14) (14) ILA Stage 1 Structure 2005 Performance Level re: Parking

62 Tract Planned % Imp. SF Const. Land SF Development w/Contract / Const. Start Finish Est. Const. Costs Est. Finished Tract (2) Owner (3) (4) Component (5) Description and Status (5) Lease / Open (7) Date (7) Date (8) (9) Value (10) ILA Stage Triggers (11)

EB Development Apartments 25 units wrapping the MBE Parking January May 2006 $2,167,500 $2,167,500 ILA Stage 2 LLC Garage (approximately 30,000 square feet) 2005 Performance Level re: Apartments 7-story tower planned for 167 units above the MBE Parking Garage $14,478,900 $14,478,900

E (BVW) -- 213,601 -- South Block North (“SBN”) – A Multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 27,007 square feet (GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

District Parking 1,066 planned Parking Spaces adjacent to February March (14) (14) ILA Stage 1 Structure (east) the SBN retail. 2005 2006 Performance Level re: Parking

SEB Development Apartments 163 units adjacent to (to the east) the SBN August December $14,132,100 $14,132,100 ILA Stage 2 LLC Parking Garage (12-15 stories) 2006 2007 Performance Level re: Apartments

F (BVW) -- 213,601 -- South Block South (“SBS”) – A Multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 134,819 square feet(GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

G DDR 12,048 N/A Not planned for development. Parcel ------N/A (BVW) deemed undevelopable in the assessment methodology.

H DDR 7,136 N/A Not planned for development. Parcel ------N/A (BVW) deemed undevelopable in the assessment methodology.

63 NOTES: (1) The portions of this Table which show DDR as “Owner” is to be updated by DDR pursuant to the DDR Continuing Disclosure Agreement – “See Appendix I - DDR Continuing Disclosure Agreement.” The portions of this Table which show the various Midtown West Partnership entities as “Owner” is to be updated by Midtown Partners pursuant to the Midtown Partners Continuing Disclosure Agreement – “See Appendix I - Midtown Miami Continuing Disclosure Agreement.” (2) Tract designations as shown in the figure above pursuant to the Buena Vista West (“BVW”) Plat. See “Entitlements” below. (3) See “Development Area 2 – Property Owners” above. (4) As shown on the BVW Plats. (5) As currently planned by either DDR, Midtown West Partnership or the District. This is subject to change, including but not limited to the scope or timing of the development. (6) A percentage of the total usable improved evidenced with either (a) executed leases pertaining to retail, or (b) executed leases for apartment units. (7) As estimated by DDR or Midtown West Partnership, respectively. Any date noted with “actual” represents the proposed development received an approved building permit from the City of Miami. See “Development Area 2 – Marketing Plan” herein. (8) As estimated by DDR or Midtown West Partnership, respectively. Any date noted with “actual” represents the date a certificate of occupancy, as defined under the Florida building code, was received from the City of Miami for the proposed development. (9) As estimated by DDR or Midtown West Partnership, respectively. In some cases, the estimate is based upon estimated value set forth in the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. This reflects the vertical construction costs only and excludes land costs. (10) Finished value represents DDR’s or Midtown West Partnership’s estimate of value for the planned improvements based on the proposed development. In some cases, the estimate is based upon estimated value set forth in the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. Any value noted with “actual” represents a reasonable market accepted approach for income producing property. Actual assessed value shall be an acceptable value in this column for any building that has received a certificate of occupancy, as defined under the Florida building code, from the City of Miami and the County Tax Assessor has adjusted the values to reflect the improved status of the tract. Any such value shall be noted with “Actual AV.” (11) This column monitors the development that DDR or Midtown West Partnership plan to meet their performance obligations under the ILA. See “THE FINANCING PLAN”, “SECURITY FOR THE BONDS – Interlocal Agreement” and “Appendix B - Interlocal Agreement.” (12) Amount for entire DDR Retail Facility is shown at Tract A. (13) $2,650,000 of the Construction Cost was credited against purchase price of land acquired by DDR from Biscayne. The estimated total cost and finished value is based upon the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. See “Development Area 2 – Development Plan,” under this heading. (14) See the “PLAN OF FINANCE,” herein.

64 Development Area 2 – Marketing Plan

Marketing for The Shops at Midtown Miami is being handled by DDR Corp.'s senior national leasing team who has established relationships with many leading national retailers. Tenant negotiations are being handled by a regional leasing team which is supported by senior DDR Corp. personnel. DDR Corp. is in the advanced stages of negotiation with potential tenants for more than 50% of the leasable space in The Shops at Midtown Miami. This includes 5 of approximately 9 potential anchor tenants (tenants leasing over 20,000 square feet). No public announcements of tenants has been made yet. The types of tenants are expected to include retailers and service providers including general merchandisers, men’s, women’s and children’s apparel, music and electronics, accessories, shoes, housewares, and a variety of themed restaurants. The Shops at Midtown Miami is expected to include a mix of tenants that will serve both the regional retail market as well as the neighborhood surrounding the Developments.

DDR Corp. expects to have the majority of The Shops at Midtown Miami leased in advance of the expected completion date in April 2006.

Development Area 2 – Finance Plan

DDR acquired substantially all of the property interests within the plat of Buena Vista West from Biscayne on April 29, 2004 for $38,500,000 with an equity contribution from DDR Corp. DDR’s land is not encumbered with a mortgage or any lender’s lien.

Vertical construction for DDR Retail Facility is expected to commence in July 2004 on Tract A and the total DDR Retail Facility is expected to be completed by December 31, 2006.

Due to the complexity of coordinating construction of the portion of the DDR Retail Facility to be located on Tract A (BVW), also known as “North Block” and the live/work units on Tract A (BVW) to be developed by the Midtown West Partnership, DDR expects to contract with Bovis Lend Lease, Inc. (“Bovis”) under a construction management agreement to oversee the construction of both the DDR Retail Facility on North Block and the “shell” of the live/work units wrapping the North Block parking garage to be developed by the District. The Midtown West Partnership is responsible for the design, permitting and completion of the live/work units after completion of the “shell” of same by DDR. At closing, DDR received a credit for the anticipated construction amount of the “shell” of the North Block live/work units. In the event the cost of constructing such “shell” exceeds the amount of the credit as a result of changes requested by the Midtown West Partnership to the approved plans, the Midtown West Partnership shall pay for such changes. The District will enter into a separate construction management agreement with Bovis for the construction of the North Block parking garage (See Section called “Infrastructure” below). Construction of the DDR Retail Facility, the live/work units and the parking garage, all of which are to be located on North Block, will occur simultaneously and will be coordinated by Bovis.

Due to the complexity of coordinating construction of the portion of the DDR Retail Facility to be located on Tract D (BVW), also known as “Midblock East” and the retail and live/work components to be located on Tract D (BVW) and to be developed by the Midtown West Partnership, DDR expects to contract with Bovis under a construction management agreement to oversee the construction of the DDR Retail Facility on Midblock East and the “shell” of the retail and live/work components on Midblock East. The Midtown West Partnership shall be responsible for the design, permitting and completion of the retail and live/work components on Midblock East after completion of their “shell” by DDR. On or before October 26, 2004, the Midtown Partnership shall obtain a financing commitment or other reasonable security for the estimated construction costs for the retail and live/work components of its development on Midblock East. If the Midtown West Partnership fails to obtain such financing commitment or other reasonable security within such time period, then the Midtown West Partnership shall convey to DDR the portion of the Property (including any air rights) which were conveyed to it for the construction of the retail and live/work units on Midblock East. The District will enter into a separate construction management agreement with Bovis for the construction of the Midblock East parking garage. (See Section called “Infrastructure” below). Construction of the DDR Retail Facility, the live/work units and the parking garage, all of which are to be located on Midblock East, will occur simultaneously and will be coordinated by Bovis.

DDR currently expects that all of its costs including acquisition, construction and related soft costs will be financed by capital made available by DDR Corp. See the “Development Area 2 – Property Owners” herein. DDR Corp. has a $650 million unsecured revolving credit facility which can be expanded to $1 billion at DDR Corp.’s option (“Credit Facility”) and other credit facilities (which total over $80 million) available for corporate purposes, including development. DDR Corp. has approximately $250 million available to borrow on its various credit facilities for such purposes. The providers of the Credit Facility are a syndicate of banks led by Bank One. The Credit Facility matures on May 30, 2006 and as of June 2, 2004 approximately $480 million of borrowings are outstanding on the Credit Facility and other facilities. It is also expected that DDR may seek construction loans from one or more of its credit partners to finance costs associated with a portion of the Shops at Midtown.

As of June 18, 2004, DDR has expended approximately $42 million for land acquisition, entitlement, permitting and infrastructure costs of a total estimated cost through completion of the project of $86 million including land acquisition.

Infrastructure

The proposed infrastructure to be installed is a network of roadways, stormwater management systems, sanitary sewer collection systems, and water distribution systems. In addition, three parking garages containing approximately 3,000 parking spaces are expected to be constructed. The infrastructure improvements, as well as certain public areas for the Developments will be constructed by the District, and collectively constitute the Series 2004 Project. The parking garages and certain public areas are part of the Series 2004A Project. The other infrastructure being constructed by the District constitutes the Series 2004B Project. According to the District Engineer, it is expected that the District’s proposed infrastructure, including both the Series 2004A Project and the Series 2004B Project, will be under construction from Summer 2004 to Spring 2007. The Engineer’s Report (attached as Appendix A hereto) details the expected timing of the costs associated with the Series 2004 Project.

66 All permits necessary to begin construction of the Series 2004 Project have been obtained. The District received Conceptual Environmental Resource Permit approval for the Developments from the Department of Environmental Resource Management on January 30, 2004. The District Engineer is of the opinion that all permits necessary to complete the infrastructure are reasonably obtainable. Table V of the Engineers’ Report details the permits required for the Series 2004 Project and the status of such permits.

The District has entered into a Construction Management Agreement with Bovis Lend Lease, Inc. (“Bovis”), whereby Bovis will act as Construction Manager for the installation of the infrastructure constituting the Series 2004 Project. The Construction Management Agreement sets forth a guaranteed maximum price that is within the District Engineer’s cost estimate for the Series 2004 Project. Pursuant to the Completion Agreements between the District and DDR, DDR has agreed to fund costs of the Series 2004 Project not funded by the Series 2004A Bonds and pursuant to the Completion Agreement among the District and the Developers, the Developers have agreed to fund costs of the Series 2004B Project not funded by the Series 2004B Bonds.

Bovis offers over 86 years of experience in the construction industry. Over the past decade, Bovis has provided construction services on over 2,500 projects for 1,100 clients nationwide. Bovis a full range of construction services including construction management, general contracting, program management, project management, design/build, and consulting services. Bovis has played a key role in some of the world’s landmark projects which include:

x Petronas Towers in Kuala Lumpur (currently the world’s tallest building) x Sapporo Dome Stadium in Japan x Bluewater, Europe’s largest retail and leisure development x Disneyland Paris x Time Warner Center in New York x Los Angeles City Hall x Four Seasons Hotel & Tower – Miami.

Bovis is part of Lend Lease Corp., Ltd. (“Lend Lease”), a leading global real estate services business, having developed, constructed and managed real estate assets around the world for over 45 years. Listed on the Australian Stock Exchange, the Lend Lease Group operates in 43 countries on six continents, with a significant presence in Australia, Asia, Europe, and the United States. As of June 3, 2004, the equity market capitalization of the Lend Lease Group was in excess of $4 billion (AUD). Lend Lease senior unsecured debt is BBB (Positive Watch) by Standard & Poor’s. Moody’s rates two wholly-owned subsidiaries backed by Lend Lease Baa2 (on watch for possible upgrade). Moody’s does rate Lend Lease.

Zoning

The land comprising the Developments was known as the Buena Vista Yards and prior to rezoning was vacant land zoned for “Industrial Use”. Certain governmental approvals, as described below, were obtained to allow for commercial and residential development:

67 - Pursuant to Ordinance No. 12444 the City Commission (the “Commission”) amended the Future Land Use Map of the City for the Developments, changing the designation for the land comprising the Developments from Industrial and General Commercial to Restricted Commercial, which change was approved by the State of Florida Department of Community Affairs (“DCA”).

- Pursuant to Ordinance No. 12445 the Commission amended the Future Land Use Element of the City to permit the designation of Regional Activity Centers within the City, which change was approved by DCA.

- Pursuant to Ordinance No. 12446 the Commission amended the Future Land Use Map of the City to designate the land comprising the Developments as a Regional Activity Center (“RAC”), which change was approved by DCA. The RAC designation effectively increases the permitted development thresholds. Under the RAC designation, each of Midtown Miami East and Buena Vista West may be developed with 600,000 square feet of retail development and 4,500 residential units. The City has limited the RAC designation for the Developments collectively to 1,200,000 square feet of retail development and 4,500 residential units.

- Pursuant to Ordinance Nos. 12448 and 12449 the Commission created the SD-27.1 sub-zoning district and the requirements for all of the tracts within Midtown Miami East and for Tract B of Buena Vista West and amended the zoning atlas. SD 27.1 permits residential high-rise development as well as other uses.

- Pursuant to Ordinance Nos. 12480 and 12481, the Commission created the SD-27.2 sub-zoning district and the requirements for all of the tracts within Buena Vista West (except Tract B thereof). SD 27.2 permits retail development, as well as other uses including residential.

The final subdivision plats for Midtown Miami East and Buena Vista West have been approved and were recorded on April 26, 2004 in Plat Book 161, Page 77 and Plat Book 161, Page 78, respectively, both of the public records of Miami-Dade County, Florida.

Environmental

From the late 1800s through the early 1970s, the land comprising the Developments was used principally as a railroad yard by the Florida East Coast Railway Company, and included the following ancillary uses: maintenance facilities, fuel oil plant, filling station, roundhouse, pump house, water tanks, gasoline service station, and various industrial structures used for cement, steel fabrication, tractor and oil sales, and lumberyard purposes. By 1978, most of the land had been cleared and from 1978 through 1988 the site was mostly undeveloped. From 1988 through the mid 1990s the land was used principally as a concrete batching plant. By 1994 the land had been cleared and from such time through the early 2000s was used primarily for the storage of shipping containers.

The soil and groundwater on or beneath the land comprising the Developments contains certain regulated constituents in concentrations above standards established by governmental entities under applicable Environmental Laws. The Development was designated as a 68 Brownfield area as defined in Section 376.79(4), Florida Statutes, by the City pursuant to Resolution Nos. 98-242 and 99-197. Biscayne Development LLC (“Biscayne”) has executed with the County, a document entitled Brownfield Site Rehabilitation Agreement pursuant to Section 376.80(5), Florida Statutes, dated December 18, 2003 (“BSRA”). Under the BSRA, Biscayne is designated as the Person Responsible For Brownfield Site Rehabilitation (“PRFBSR”). Pursuant to the requirements of the BSRA, Biscayne agreed to undertake and complete site rehabilitation, as defined in Section 376.79(17), Florida Statutes, for the land comprising the Development. In accordance with its obligations under the BSRA, Biscayne has submitted a soil management plan prepared by Kimley-Horn & Associates to the Department of Environmental Resource Management (DERM) within the County. In response to the soil management plan, in a letter dated April 12, 2004, DERM stated that no further assessment activities were required and that DERM had no objections to the commencement of construction. DERM also stated it would require Biscayne to submit a Ground Water Monitoring Plan and that it would require no less than one year of groundwater monitoring before it would issue its formal No Further Action determination. The monitoring wells have been put in place and no levels above governmental standards have been detected.

Any future obligations under the BSRA are expected to be transferred and assigned to the District. The District Engineer has estimated the remaining cost of implementing and completing site rehabilitation for the Development to be approximately $1,100,000 which cost estimate is included within the Series 2004 Project costs (insufficiencies of which are covered by Developers in accordance with the Completion Agreements) and part of GMP described below. Currently, the site is cleared and ready for development. The District has authority to commence the Series 2004 Project subject to permits required in the ordinary course of business.

Market

The Developments, located within the City’s boundaries, are bordered by NE 36th Street to the North, Miami Avenue to the West, NE 29th Street to the South and the Florida East Coast Railroad to the East. The Developments are located just South of I-195 and Miami’s Design District, midway between Miami International Airport and Miami Beach. Biscayne Boulevard is a major transportation artery through the City and it is located one block to the East of the Developments.

The surrounding neighborhood is predominantly developed with not much vacant land available for development. Uses in the surrounding neighborhood include retailers, hotels, offices, apartment buildings and restaurants. The neighborhood contains a number of multifamily developments that include large-mid-end high-rise condominiums as well as small low-end multifamily developments. Historically, the neighborhood has been plagued by crime and prostitution. However, due to the location of the neighborhood as well as the affordability of housing, an increasing number of young professionals have moved into the area. Moreover, the City has taken a proactive approach to the revitalization of the neighborhood. The City is in the process of finalizing a master plan for the revitalization of the area. It is anticipated that this master plan will be designed to attract and retain new businesses and development in the area. The Florida Department of Transportation is also expected to commence roadwork on Biscayne Boulevard with the intent to improve traffic flow and aesthetics in the area of the Developments. In addition to the Developments, several new development projects have been completed,

69 announced or are underway in the area surrounding the Developments. Among these new projects is the new performing arts center being constructed at the corner of I-395 and Biscayne Boulevard which will house the City’s opera, ballet and symphony.

Appraised Value

A Market Study & Appraisal Report (the “Appraisal Report”) was prepared by Joseph J. Blake and Associates, Inc. (the “Appraiser”). See Appendix J. Neither the District, the Developers nor the Underwriter makes any representation as to the accuracy or completeness of the Appraisal Report.

As of April 10, 2004, the Appraiser estimates that the fee simple value for Midtown Miami East and Buena Vista West as entitled with the infrastructure installed (and inclusive of the CDD) is $81,100,000 and $59,000,000, respectively. Please refer to Appendix J for the Appraisal.

Utilities

Water and sewer service for the Developments will be provided by Miami-Dade Water and Sewer Department. Fire Protection for the Developments is provided by the City of Miami Fire Department. Electric service for the Developments will be provided by Florida Power and Light. Gas service for the Developments will be provided by Peoples Gas.

TAX MATTERS

General

The Internal Revenue Code of 1986, as amended (the “Code”), includes requirements which the District must continue to meet after the issuance of the Series 2004A Bonds in order that interest on the Series 2004A Bonds not be included in gross income for federal income tax purposes. The District’s failure to meet these requirements may cause income on the Series 2004A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance. The District has covenanted in the Indenture to take the actions required by the Code in order to maintain the exclusion from federal gross income of interest on the Series 2004A Bonds.

In the opinion of Bond Counsel, rendered on the date of issuance of the Series 2004A Bonds, assuming continuing compliance by the District with the tax covenants referred to above, under existing statutes, regulations, rulings and court decisions, interest on the Series 2004A Bonds is excluded from gross income for federal income tax purposes. Interest on the Series 2004A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, however, interest on the Series 2004A Bonds is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations. Bond Counsel is further of the opinion upon the date of issuance of the Series 2004A Bonds that the Series 2004A Bonds and the interest thereon are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest income or profits on debt obligations owned by corporations as defined therein. 70 Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt of interest on, or disposition of the Series 2004A Bonds. Prospective purchasers of Series 2004A Bonds should be aware that the ownership of Series 2004A Bonds may result in other collateral federal tax consequences, including: (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry Series 2004A Bonds or, in the case of a financial institution, that portion of an owner’s interest expenses allocable to interest on a Series 2004A Bond; (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by fifteen percent (15%) of certain items, including the interest on the Series 2004A Bonds; (iii) the inclusion of interest on Series 2004A Bonds in the earnings of certain foreign corporations doing business in the United States for purposes of the branch profits tax; (iv) the inclusion of interest on the Series 2004A Bonds in passive investment income subject to federal income taxation of certain Subchapter S corporations with Subchapter C earnings and profits at the close of the taxable year; and (v) the inclusion in gross income of interest on Series 2004A Bonds by recipients of certain Social Security and Railroad Retirement benefits.

Bond Counsel will express no opinion regarding federal tax consequences arising with respect to the Series 2004A Bonds other than the exclusion from gross income of the interest thereon. The nature and extent of the other tax consequences described above will depend on the particular tax status and situation of an owner of the Series 2004A Bonds. Prospective purchasers of the Series 2004A Bonds should consult their own tax advisors as to the impact of these other consequences.

No assurance can be given that any future legislation or amendments to the Code, if enacted into law, will not contain proposals which could cause the interest on the Series 2004A Bonds to be subject directly or indirectly to federal income taxation, adversely affect the market price or marketability of the Series 2004A Bonds, or otherwise prevent the holders form realizing the full current benefit of the status of the interest thereon.

Tax Treatment of Original Issue Discount

The initial offering price of the Series 2004A Bonds (the “Discount Bonds”) may be less than the stated principal amounts thereof. Under the code, the difference between the principal amount of the Discount Bonds and the initial offering price to the public, excluding bond houses and brokers, at which price a substantial amount of such Discount Bonds of the same maturity was sold, is “original issue discount.” Original issue discount represents interest which is excluded from gross income; however, such interest is taken into account for purposes of determining the alternative minimum tax imposed on corporations and may result in collateral federal tax consequences. Original issue discount will accrue actuarially over the term of a Discount Bond at a constant interest rate. A purchaser who acquires a Discount Bond in the initial offering at a price equal to the initial offering price thereof as set forth on the cover page of this Limited Offering Memorandum will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period such purchaser holds such Discount Bond and will increase its adjusted basis in such Discount Bond by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or other disposition of such Discount Bond. The federal income tax consequences of the purchaser, ownership and sale or other disposition of

71 Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. Prospective purchasers of Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale or other disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of Discount Bonds.

AGREEMENT BY THE STATE

Under the Act, the State pledges to the holders of any bonds issued thereunder, including the Series 2004A Bonds, that it will not limit or alter the rights of the issuer of such bonds, including the District, to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects, including the Series 2004A Project, subject to the Act or to levy and collect taxes, assessments, rentals, rates, fees and other charges provided for in the Act and to fulfill the terms of any agreement made with the holders of such bonds and that it will not in any way impair the rights or remedies of such holders.

LEGALITY FOR INVESTMENT

The Act provides that bonds issued by community development districts are legal investments for savings banks, banks, trust companies, insurance companies, executors, administrators, trustees, guardians, and other fiduciaries, and for any board, body, agency, instrumentality, county, municipality or other political subdivision of the State, and constitute securities that may be deposited by banks or trust companies as security for deposits of state, county, municipal or other public funds, or by insurance companies as required or voluntary statutory deposits.

SUITABILITY FOR INVESTMENT

In accordance with applicable provisions of Florida law, the Series 2004A Bonds may be sold by the District only to “Accredited Investors” within the meaning of Chapter 517, Florida Statutes, and the rules of the Florida Department of Financial Services promulgated thereunder. Investment in the Series 2004A Bonds poses certain economic risks. No dealer, broker, salesman or other person has been authorized by the District or the Underwriter to give any information or make any representations, other than those contained in this Limited Offering Memorandum, and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. Additional information will be made available to each prospective investor, including the benefit of a site visit to the District and the opportunity to ask questions of the Developers, as such prospective investor deems necessary in order to make an informed decision with respect to the purchase of the Series 2004A Bonds. Requests for additional information should be directed to the District Manager at 10300 N.W. 11th Manor, Coral Springs, Florida, 33071

ENFORCEABILITY OF REMEDIES

The remedies available to the owners of the Series 2004A Bonds upon an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial 72 decisions, including the federal bankruptcy code, the remedies specified by the Indenture and the Series 2004A Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2004A Bonds will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors and enacted before or after such delivery.

FINANCIAL STATEMENTS

Since its creation in 2003, the limited expenses of the District have been funded entirely by voluntary contributions from the Developers. Therefore, as of the date of this Limited Offering Memorandum, the financial statements of the District would not contain any information material to an investment decision with respect to the Series 2004A Bonds.

Under State law, while the District is required to prepare annual financial statements for each fiscal year within twelve months after the end of the fiscal year, no audit of such records by an independent certified public accountant is required unless the District (i) has revenues, or the total of expenditures and expenses, in excess of $100,000 for such fiscal year, or (ii) has revenues, or the total of expenditures and expenses, of between $50,000 and $100,000 and has not been subject to a financial audit for the two preceding fiscal years.

The financial statements of the District are public records available to any party upon written request and upon the payment of the legally allowable cost of reproduction.

LITIGATION

The District. There is no litigation of any nature now pending or, to the knowledge of the District threatened, seeking to restrain or enjoin the issuance, sale, execution or delivery of the Series 2004A Bonds, or in any way contesting or affecting (i) the validity of the Series 2004A Bonds or any proceedings of the District taken with respect to the issuance or sale thereof, (ii) the pledge or application of any moneys or security provided for the payment of the Series 2004A Bonds, (iii) the existence or powers of the District or (iv) the validity of the Special Assessment Proceedings.

The Developers. The Developers have represented to the District that there is no litigation of any nature now pending or, to the knowledge of the Developers, threatened, which could reasonably be expected to have a material and adverse effect upon the ability of the Developers to complete the Developments as described herein, materially and adversely affect the ability of the Developers to pay the Special Assessments imposed against the land within the District owned by the Developers respectively or materially and adversely affect the ability of the Developers to perform its various obligations described in this Limited Offering Memorandum.

NO RATING

No application for a rating of the Series 2004A Bonds has been made to any rating agency, nor is there any reason to believe that the District would have been successful in obtaining an investment grade rating for the Series 2004A Bonds had application been made. 73 CONTINUING DISCLOSURE

Pursuant to Rule 15c2-12 of the Securities and Exchange Commission (the “Rule”), the District, Midtown Partners, DDR, the City and the County will enter into separate Continuing Disclosure Agreements (collectively the “Disclosure Agreements”) with Digital Assurance Certification, L.L.C., as Dissemination Agent, for the benefit of the Series 2004A Bondholders (including owners of beneficial interests in the Series 2004A Bonds), to provide certain financial information and operating data relating to the District, the City, the County, the Developments, Midtown Partners and DDR by certain dates prescribed in the respective Disclosure Agreement (the “Reports”). The specific nature of the information to be contained in the Reports is set forth in “Appendix I – Proposed Forms of Continuing Disclosure Agreements.” Under certain circumstances, the failure of the District, the City, the County, Midtown Partners or DDR to comply with its obligations under the Disclosure Agreement constitutes an event of default thereunder. Such a default will not constitute an event of default under the Indenture, but such event of default under the Disclosure Agreement would allow the Bondholders (including owners of beneficial interests in the Series 2004A Bonds) to bring an action for specific performance.

UNDERWRITING

Banc of America Securities LLC (the “Underwriter”) has agreed to purchase the Series 2004A Bonds from the District at a purchase price of $71,400,170.40 (the par amount of the Series 2004A Bonds, $73,580,000 less original issue discount of $340,329.60 and less underwriting discount of $1,839,500.00). The Underwriter’s obligations are subject to certain conditions precedent and if obligated to purchase any of the Series 2004A Bonds the Underwriter will be obligated to purchase all of the Series 2004 Bonds. The Series 2004A Bonds may be offered and sold by the Underwriter at prices lower than the initial offering prices stated on the cover hereof, and such initial offering prices may be changed from time to time by the Underwriter.

CONSULTANTS

The references herein to Kimley-Horn and Associates, Inc., as the Consulting Engineer, have been approved by said firm, and the Engineer’s Report included in Appendix A to this Limited Offering Memorandum, should be read in its entirety for complete information with respect to the subjects discussed therein.

Fishkind and Associates, Inc., the Financial Advisor, has prepared the Assessment Methodology included herein as Appendix D and the Tax Increment Report included herein as Appendix E, which reports should be read in their entirety.

Dunlap & Associates, Inc., Winter Park, Florida, and Fidelity Financial Services, L.C., Hollywood Florida, serve as co-financial advisors to the City.

The Financial Advisor, the District Manager, Bond Counsel, Counsel to the Underwriter, Counsel to the District and the City’s co-financial advisors will receive fees for services rendered in connection with the issuance of the Series 2004A Bonds, which fees are contingent upon such issuance. 74 VALIDATION

The Series 2004A Bonds were validated and confirmed by a Final Judgment of the Eleventh Judicial Circuit Court in and for Miami-Dade County, Florida, entered on May 3, 2004. The period of time during which an appeal can be taken from such judgment expired on June 3, 2004.

FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this Limited Offering Memorandum constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “anticipate,” “budget” or other similar words.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE DISTRICT DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ANY OF ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR, OTHER THAN AS DESCRIBED UNDER “CONTINUING DISCLOSURE” HEREIN.

LEGAL MATTERS

Certain legal matters related to the authorization, sale and delivery of the Series 2004A Bonds are subject to the approval of Greenberg Traurig, P.A., Miami, Florida, Bond Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel Squire, Sanders & Dempsey L.L.P., Miami, Florida. Certain legal matters will be passed upon for the District by its counsel, Billing, Cochran, Heath, Lyles, Mauro & Anderson, P.A., Fort Lauderdale, Florida. Certain legal matters will be passed upon for the Trustee by its counsel, Holland & Knight, Miami, Florida. Certain legal matters will be passed upon for the Midtown Partners by its counsel, Greenberg Traurig, P.A., Miami, Florida and for DDR by its counsel, Broad and Cassel, Boca Raton, Florida.

75 AUTHORIZATION AND APPROVAL

The execution and delivery of this Limited Offering Memorandum has been duly authorized by the Board of Supervisors of Midtown Miami Community Development District.

MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT

By:/s/ Deborah Samuel Deborah Samuel Chairman, Board of Supervisors

76 APPENDIX A

ENGINEER’S REPORT [THIS PAGE INTENTIONALLY LEFT BLANK]

[THIS PAGE INTENTIONALLY LEFT BLANK] Amended Engineer’s Report April 21, 2004

Midtown Miami Community Development District

Prepared for: Board of Supervisors Midtown Miami Community Development District

Prepared by: Aaron Buchler, PE #54606 Kimley-Horn and Associates, Inc. 420 Lincoln Rd., Suite 353 Miami Beach, FL 33139 Tele: 305-673-2025 Fax: 305-673-4882

Kimley-Horn and Associates, Inc. 2004 AMENDED ENGINEER’S REPORT For

Midtown Miami Community Development District

KHA Project No.: 042302000

April 21, 2004

Prepared By:

Kimley-Horn and Associates, Inc. TABLE OF CONTENTS

Page No. I. INTRODUCTION

1. OVERVIEW…………………………………………………….…………..…A-5

2. PURPOSE……………………………………………………..……………….A-6

3. DESCRIPTION OF THE PROPOSED DEVELOPMENT…..………………..A-6

II. DISTRICT BOUNDARY AND PROPERTY SERVED

1. DISTRICT BOUNDARY………………..….…………………………………A-7

2. PROPERTY SERVED……………………..…………………………………..A-7

3. EXISTING INFRASTRUCTURE……….…………………………….....……A-7

III. DESCRIPTION OF INFRASTRUCTURE

1. SUMMARY OF DISTRICT FACILITIES AND SERVICES………………….A-8

2. ROADWAY IMPROVEMENTS…………..…………………………………...A-8

3. PARKING IMPROVEMENTS……………………………………………...….A-10

4. WATER AND SANITARY SEWER SYSTEMS ………..….…………………A-10

5. STORMWATER MANAGEMENT SYSTEMS.……..………………………...A-11

6. LANDSCAPING AND STREETSCAPING…………………………….……...A-11

7. SECURITY FACILITIES……………………………………………………….A-11

8. MISCELLANEOUS PUBLIC IMPROVEMENTS…………………………….A-12

IV. OWNERSHIP AND MAINTENANCE...... A-12

V. PERMITTING…………………………………………………………...... ……...A-14

VI. OPINIONS OF PROBABLE CONSTRUCTION COST……...……….……...A-15

VII. PROBABLE SCHEDULE OF CAPITAL DISTRIBUTION….……………...A-20

VIII. SUMMARY AND CONCLUSION………………………………………………..A-20

IX. ENGINEER’S CERTIFICATION…………….………………………………….A-21 TABLE OF CONTENTS CONT’D

TABLES AND EXHIBITS

TABLES

TABLE 1 OPINIONS OF PROBABLE COST

TABLE 2 PARKING IMPROVEMENTS COST (GARAGE NO.’s 1, 2 AND 3)

TABLE 3 MID-BLOCK PLAZA AND OTHER PUBLIC IMPROVEMENT COSTS

EXHIBITS

EXHIBIT 1 LOCATION MAP

EXHIBIT 2 DISTRICT BOUNDARY

EXHIBIT 3 LEGAL DESCRIPTION AND TENTIVE PLAT

EXHIBIT 4 WATER DISTRIBUTION SYSTEM

EXHIBIT 5 SANITARY SEWER COLLECTION SYSTEM

EXHIBIT 6 CONCEPTUAL DRAINAGE PLAN

EXHIBIT 7 ROADWAY IMPROVEMENTS

EXHIBIT 8 EASEMENT RELATED TO WATER & SEWER SYSTEM

EXHIBIT 9 LAND DEDICATION RELATED TO ROADWAY

EXHIBIT 10 PROBABLE SCHEDULE FOR CONSTRUCTION OF IMPROVEMENTS

EXHIBIT 11 AIR RIGHTS TO PARKING GARAGES I. INTRODUCTION

1. Overview - The Midtown Miami Community Development District (hereinafter referred to as the ‘District’) consists of approximately 56± acres of land, located in the City of Miami, in Miami-Dade County, Florida. A description of the property is included in Section I.3 of this report. At this time, the projected maximum plan of development for the land within the District provides master infrastructure for approximately 2,800 condominiums, 500 residential apartment units, 350 hotel units, 25,000 s.f. of grocery store use, 35,000 s.f. of gym/spa, 150,000 s.f. of office space, 160,200 s.f. of restaurant and 733,000 s.f. of retail space.A total of 42 +/- acres of the property will be developed for mixed use. The development will be divided by the west right-of-way line of Midtown Blvd., and will be subdivided into two major plats generally described as follows:

Plat - Midtown Miami East Plat – Buena Vista West (Acres) (Acres)

Tracts (see Exhibit 3) A to I A to H

Gross Area 22.28 33.83

Road Right of Way 6.21 6.17

FEC Perimeter Rd. R/W 1.70 N/A

Net Developable Mixed Use Area 14.37 27.22

Currently not planned for Development (G & H) N/A 0 .44

Streetscape and landscape improvements planned for the District will include enhanced landscaping, linear parks, fountains and signage within public areas. Master transportation improvements will consist of 4-lane divided roadways along the northern, southern and western boundaries of the District, with 2-lane undivided and divided roadways within the District. The roadways will be constructed and financed by the District.

In order to serve the residents and property owners of the District, the District is developing a Capital Improvement Plan (hereinafter referred to as the ‘Plan’) for the financing, construction and maintenance of certain improvements and facilities within, and adjacent to, the District as described below. These improvements are required by, or are consistent with,

A-1 the requirements of Miami-Dade County, Florida, the City of Miami, the Florida Department of Transportation (FDOT) and other applicable, regulatory and jurisdictional entities. Brief descriptions of the improvements are included in the body of this report.

The Plan contained in this report reflects the present intentions of the District. The exact location of facilities may be modified during the course of approval and implementation, but these changes will not diminish or alter the benefits to be received by the land. The District retains the right to make reasonable adjustments in the Plan to meet the requirements of any governmental agency while providing the same or greater benefits to the land. Regulatory criteria will continue to evolve and future changes may affect the implementation of the Plan, as it may be changed from time to time. The implementation of any improvement outlined within the Plan requires the final approval of the District’s Board of Supervisors.

Costs contained in this report have been prepared based on opinions of costs using available information. It is possible that the probable costs could vary based on final engineering and ultimate construction bids.

A summary of the improvements to be funded and associated opinions of probable cost are included in Table 1.

2. Purpose - The purpose of this report is to describe the 56 +/- acre Midtown Miami Community and the District that will serve it. The report will also describe the capital improvements to be constructed and financed by the District and their probable construction cost.

3. General Description of the Proposed Development - The proposed mixed-use development is located north of NE 29th Street, east of North Miami Avenue, south of NE 36th Street and west of the existing FEC rail road right-of-way, in the City of Miami, in Miami-Dade County, Florida. The location of the proposed development is shown in Exhibit 1.

A-2 The development will include multi-family residential units, office space, retail, restaurant, parking garages, recreation spaces, parks and open space areas, storm water management systems, utility infrastructure, landscaped roadways, and security.

The District will encompass the entire 56± acres of the Midtown Miami Community shown in Exhibit 2. The boundary of the District is provided by the combination of the two plats referenced in Exhibit 3. The District will construct, operate, and maintain infrastructure to support the proposed development.

II. DISTRICT BOUNDARY AND PROPERTY SERVED

1. District Boundary - Exhibit 2 illustrates the boundaries of the District. North of the District, commercial, vacant land and institutional land uses border the site along NE 36th Street. Vacant land, single-family, low density multi-family, industrial and communication/utility land uses border the South side of the site along NE 29th Street. Railroad tracks and underground fiber-optic utilities exist within the FEC right-of-way along the eastern boundary of the property. Industrial, office, commercial and institutional land uses border the west side along North Miami Avenue.

2. Property Served - The site is currently undeveloped, and is primarily used for container storage by Seaboard Marine. The terrain elevations fall from North to South, with elevations ranging from approximately 14 to 17 National Geological Vertical Datum (NGVD). Construction of the proposed District infrastructure is scheduled to begin in the summer of 2004. The overall 56 +/- acre site is being platted to include streets and developable tracts of land. Please refer to Exhibit 3 for Tract information.

3. Existing Infrastructure - Currently, there is no existing infrastructure within the boundaries of the District, with the exception of minor aerial electrical services extending into the property. Roadways and utilities exist within the abutting rights-of-way. NE 36th Street runs along the northern edge of the site, NE 29th Street runs along the southern edge, North Miami Avenue runs along the western edge and the FEC right-of-way runs parallel to

A-3 the site on the eastern side. Gravity sewer mains exist within the rights-of-way of NE 29th Street, NE 36th Street and North Miami Avenue. Water mains exist within North Miami Avenue, NE 36th Street and NE 29th Street. Although these utilities exist within the abutting rights-of-way, water and sewer main upgrades are required within North Miami Avenue and NE 29th Street by the Miami-Dade Water and Sewer Department (MDWASD).

III. DESCRIPTION OF INFRASTRUCTURE

1. Summary of District Facilities and Services - The proposed infrastructure is a network of roadways, parking, stormwater management systems, sanitary sewer collection systems, and water distribution systems that will give access and service to the residential and commercial buildings, as well as parks, open space areas and public plazas within the District.

2. Roadway Improvements - All roads will be designed and will be constructed in accordance with applicable jurisdictional agency standards (i.e. Miami-Dade County, City of Miami and Florida Department of Transportation (FDOT)). Roadway construction will include sub-grade base, curbing, sidewalks, signage, striping, landscaping, irrigation and lighting.

Roadways outside the Boundary of the District (Off-site)

North Miami Avenue - The improvements consist of reconstructing approximately 2,350 ft. of an existing, 4-lane urban roadway. Proposed center medians will be located between NE 32nd Street and NE 34th Street. There will be sections of on-street public parallel parking on the East side of the right-of-way located between NE 32nd Street and NE 35th Street with a clearance of approximately 50 ft. from each respective intersection. There will be dedicated left turn lanes where feasible from NE 29th Street to NE 36th Street.

A-4 NE 36th Street - This is a state road. The improvements consist of reconstructing approximately 1,500 ft. of an existing 4-lane urban roadway. Proposed center medians will be located where feasible.

NE 29th Street (West of Railroad) - The improvements consist of reconstructing approximately 875 ft. of an existing 4-lane urban roadway. There will be public parallel parking on both sides of the street where feasible.

Roadways inside the Boundary of the District (On-site)

Buena Vista Avenue - The improvements consist of constructing approximately 1,400 ft. of a new 2-lane urban roadway. The roadway, which runs from NE 32nd Street to NE 36th Street, will have on-street public parallel parking on both sides where feasible. This is a proposed curb less street with planted medians and customer pick-up and drop-off.

Midtown Blvd / NE 1st Place - The improvements consist of constructing approximately 2,450 ft. of a new 2-lane urban roadway from NE 29th Street to NE 36th Street. The roadway will have on-street public parallel parking on both sides where feasible.

East Coast Avenue - The improvements consist of constructing approximately 1,800 ft. of a 2-lane urban roadway from NE 30th Street to NE 35th Street. The roadway will include on-street public loading and metered parallel parking on the West side only where feasible.

NE 30th Street - The improvements will consist of constructing approximately 350 ft. of a 2-lane urban roadway from Midtown Boulevard to East Coast Avenue. The roadway will include on-street public parallel parking on both its north and south sides where feasible.

NE 31st Street - The improvements will consist of constructing approximately 600 ft. of a 2-lane urban roadway from North Miami Avenue to Midtown Boulevard. The roadway will include on-street public parallel parking on both its north and south sides where feasible.

NE 35th Street - The improvements will consist of constructing approximately 375 ft. of a 2-lane urban roadway from Midtown Boulevard to East Coast Avenue. The roadway

A-5 will include on-street public parallel parking on both its north and south sides where feasible.

NE 32nd Street - The improvements will consist of constructing approximately 1,050 ft. of a 2-lane urban roadway from North Miami Avenue to East Coast Avenue. The roadway will include on-street public parallel parking on both its north and south sides where feasible.

NE 34th Street - The improvements will consist of constructing approximately 1,175 ft. of a 2-lane urban roadway from North Miami Avenue to East Coast Avenue. The roadway will include on-street public parallel parking on both its north and south sides along its length where feasible. In the center of the right-of-way there will be medians along the length of the roadway where feasible.

3. Parking Improvements - Parking improvements for the District will include phased construction of three garages to include a total of approximately 3,120 parking spaces (See Table 2 for more details). Up to 920 spaces will be available to the public for monthly parking. All the remaining parking spaces (approximately 2,200) will be available on a first-come first-serve basis. Parking rates for both will be subject to a schedule of fees to be established by the District. In addition, approximately 200 on-street public parking spaces will be located within or abutting the District. Please refer to Exhibit 10 for more details.

4. Water & Sanitary Sewer Systems - Water and wastewater facilities will be provided within the District. The water and sewer services, operation, and maintenance will be provided by the MDWASD. Miami-Dade County, Florida (the ‘County’) has sufficient capacity to serve the District’s water and sewer needs for the overall proposed development. Facilities will be designed and constructed in accordance with City of Miami, Miami-Dade Water and Sewer Department, and Florida Department of Environmental Protection standards.

Water Distribution System within the Boundary of the District (Off-site) - Connections to the municipal M-D WASD system will be made at the intersections of NE 36th Street and North Miami Avenue and Midtown Boulevard and NE 29th Street. Exhibit 4 illustrates the Master Water Distribution system.

A-6 Sewer System outside the Boundary of the District (Off-Site) - The proposed off-site gravity sewer main will be connected to the existing MDWASD system at Biscayne Boulevard and extended to the District. Refer to Exhibit 5 for additional details.

Water Distribution System within the Boundary of the District (On-site) - The domestic water supply facilities will include distribution mains with necessary valving, fire hydrants and water services to the rights-of-way lines. The planned Master Water Distribution system is shown in Exhibit 4.

Sewer System within the Boundary of the District (On-Site) - Wastewater facilities include proposed gravity sewer main with individual services connected to the existing MDWASD system. Connections will be made to the County’s system on NE 29th Street and NE 36th Street. The planned Master Sewer Collection system is shown in Exhibit 5.

5. Stormwater Management Systems - The Stormwater Management system will include drainage systems within and abutting the District. The stormwater management systems will be constructed in accordance with Miami Dade-County Department of Environmental Resource Management (DERM), Florida Department of Environmental Protection (FDEP) and South Florida Water Management District (SFWMD) standards for storm water quality treatment and flood control. The proposed conceptual drainage plan is referenced in Exhibit 6.

6. Landscaping & Streetscaping - Landscape and streetscape elements will be provided along all new roadways within and abutting the District on NE 36th Street, NE 29th Street and North Miami Avenue. Landscaping will include canopy trees, palm trees, shrubs and ground cover within the streets and public spaces. Streetscape features to be constructed within the District include decorative pavers at specific locations, decorative street lights, bollards, trash receptacles and benches.

7. Security Facilities - Security facilities in the public rights-of-way will consist of passive measures including pedestrian level lighting and public spaces designed according to industry

A-7 standards. Public garages will have gate-controlled access and CCTV. Directional and informational signage will be located throughout the District.

8. Miscellaneous Public Improvements – Miscellaneous Public Improvements will consist of parks, Mid-Block Public Plaza Improvements, and Entertainment Block Public Plaza Improvements. The Mid Block Public Plaza Improvements will include public parking, a landscape courtyard, a fountain and other public amenities. Approximately 1 acre of the Entertainment Block will be dedicated as public space. This space will include landscape, a fountain and other public improvements. Way-finding through out the District boundaries will be accomplished using environmental graphics within the public right-of-way and public plazas. Refer to Table 3 and Exhibit 10 for more details.

IV. OWNERSHIP AND MAINTENANCE

The District will finance the land acquisition and construction of the improvements. It will then transfer the land and improvements to the following agencies for ownership and maintenance:

Midtown Miami CDD Owner, Operation, & Maintenance Assignment

Own Operate Maintain NE 29th St. Roadway City City City W&S County County County Drainage City City City Streetscape/LA City District/ City District/ City Irrigation City District District/ City

NE 31st St., NE 32nd St., NE 34th St., & NE 35th St., and Buena Vista Ave. Roadway City City City W&S County County County Drainage City City City Streetscape/LA City District/ City District/ City Irrigation City District District/ City

A-8 N.Miami Ave. Roadway County County County W&S County County County Drainage County County County Streetscape/LA County District/ County District/ County Irrigation County District District/ County

NE 36th St. Roadway State State State W&S County County County Drainage State State State Sidewalk/Trees State District/State District Irrigation State District District

East Coast Ave. Roadway District District District W&S County County County Drainage District District District Streetscape/LA District District District Irrigation District District District

Other improvements within the District boundary, but not financed by the District, including, but not limited to private landscape areas, irrigation systems, parking lots and driveways, private drainage systems and backflow preventors will belong to, and be maintained by, either the owner of the tract or by an owner’s association. Easements not described above, and whose boundaries are not yet determined, will be required within East Coast Avenue for other utility companies to provide their services to the District. In association with typical maintenance of standard improvements to be performed by the City of Miami, restoration and maintenance of non- standard roadway improvements will be the responsibility of the District.

A-9 V. PERMITTING

The following is a list of Permit Applications to be submitted:

Estimated Estimated Permit Applications/ Approvals Department Submittal Approval Date Date 1. Conceptual Environmental Resource DERM --- Approved Permit (ERP) for the overall 56-acre site 01/30/04 2. Construction ERP for the roadways DERM Submitted May ‘04 03/04 3. FDEP Water & Sewer Applications for FDEP Submitted Approved improvements within the right-of-way 2/04/04 03/04 4. Sewer Allocation for the overall site DERM May ‘04 June ‘04

5. Water & Sewer Verification for overall MDWASD May ‘04 June ‘04 improvements 6. Water & Sewer Agreement MDWASD --- Executed January ‘04 7. Class II Permit for Drainage Wells – DERM / FDEP April ‘04 June ‘04 multiple public and private submittals

8. Florida Department of Health for water HRS Submitted Approved & sewer 02/06/04 02/20/04 9. City of Miami Fire Department for City of Miami Fire --- Approved Hydrant Locations and Fire Protection Dept. 02/6/04 10. Proposed public gravity sewer and water DERM Submitted Approved main extensions 02/20/04 03/3/04 11. Proposed At-Grade Railroad Crossing FEC Fall ‘04 Spring ‘06 Approval 12. Proposed Underground Utility Crossing FEC Summer ‘04 Winter ‘04 through Railroad right-of-way 13. Proposed City of Miami roadway City of Miami April ‘04 May ‘04 improvements Public Works 14. Proposed County roadway improvements M-D County April ‘04 May ‘04 Public Works 15. Utility Connections to NE 36th St. FDOT April ‘04 May ‘04

16. 1486 Rule Drainage Approval FDOT April ‘04 May ‘04

17. Driveway Connection Permit for FDOT April ‘04 May ‘04 connections to NE 36th St. 18. Signal Warrant Analysis Approval for Conceptually NE 36th St. FDOT --- Approved 02/05/04

A-10 19. Signal Plans Approval for NE 36th St. FDOT May ‘04 June ‘04

20. Signal Plans Approval for two on NE Miami-Dade April ‘04 June ‘04 34th St. County 21. Demolition Permit City of Miami Submitted April ‘04 4-02-04 22. Site Clearing & Grading Permit City of Miami Submitted April ‘04 4-02-04 23. Vacation of existing unimproved rights- City of Miami --- Complete of-way October ‘03 24. City of Miami Plat City of Miami --- Approved 02/26/04 25. Miami-Dade County Plat Miami-Dade --- April ‘04 County 26. Remedial Action Plan DERM Submitted May ‘04

27. Building Permit – North Block Parking April ‘04 June ‘04 Garage 28. Building Permit – Mid Block East June ‘04 August ‘04 Parking Garage

29. Building Permit – South Block Parking Sept. ‘04 Nov. ‘04 Garage

VI. OPINIONS OF PROBABLE CONSTRUCTION COST

Opinions of Probable Cost for the proposed improvements are provided in Tables 1 through 3. The opinions of cost are based on unit prices currently being experienced for ongoing and similar items of work in the County and quantities as represented on the construction plans. The labor market, future costs of equipment and materials, and the actual construction process are all beyond the Engineer’s control. Due to this inherent opportunity for fluctuation in cost, the total final cost may be more or less than this estimate.

The opinions of probable cost for the parking garages were prepared by Bovis Lend Lease, Inc., general contractors qualified in their field to estimate the cost of this work. Said opinions were prepared based on the design drawings developed by GSI Architects, Inc. and Walker Parking Consultants/Engineers, Inc.

A-11 1. Roadway Improvements - In general, the roadway improvement costs include the furnishing and installation of the following road components and construction services: Excavation/fill, sub-grade, road base, asphalt, curb, sidewalk, pedestrian light poles, decorative pavers, valley gutter, milling, lime-rock, fire hydrants, professional fees, contingency and mobilization.

On-Site Roads

NE 30 St (2 lanes, East Coast Ave to N.Miami Ave,60 ft Right of Way)

NE 31 St (2 lanes, Midtown Blvd. to N.Miami Ave,60 ft Right of Way)

NE 32 St (2 lanes, Midtown Blvd. to N.Miami Ave,60 ft Right of Way)

NE 34 St (2 lanes, East Coast Ave to N.Miami Ave,90 ft Right of Way)

NE 35 St (2 lanes, East Coast Ave to Midtown Blvd, 60 ft Right of Way)

Midtown Blvd. (2 lanes, East Cost Ave. to N.Miami Ave,80 ft Right of Way)

East Coast Ave (2 lanes, NE 36th St to NE 29th St,40 ft Right of Way)

Buena Vista Ave (2 lanes, East Cost Ave to Midtown Blvd,82 ft Right of Way)

Off-Site Roads

NE 29th St (4 lanes, N.Miami Ave to Biscayne Blvd,80 ft Right of Way)

North Miami Ave (4 lanes, NE 36th St to NE 29th St, 70 ft Right of Way)

NE 36 St (4 lanes, East Coast Ave to N. Miami Ave, 70 ft Right of Way)

Total Roadway Improvements………………………….……...………………$5,597,737

2. Water & Sewer Systems - In general, the water & sewer costs include: water mains and their relocation, tapping connections, gate valves, gravity sewers and PVC, fire hydrants, Jack and Bore Crossing, manholes, cleanout, meter assembly, backflow preventer and corporation stop. Professional fees, contingency and mobilization are also included as part of the costs.

A-12 Total Water and Sewer Systems.………………………………..……………...$2,290,822

3. Stormwater Management Systems - The estimated costs for the stormwater management system include allocations for manholes, HDPE , inlets, baffles, drainage wells, dry wells and well boxes, exfiltration trench and water quality treatment markup. Professional fees, contingency and mobilization are also taken into account.

Total Stormwater Management Systems………………………………..……...$2,791,286

4. Landscaping & Streetscaping - In general, the estimated costs for landscaping and streetscaping include: trees and pits, planting,uplighting, trash receptacles, planters, pavers, palms, coping stones, bicycle racks and benches. Professional fees, contingency and mobilization are also taken into account.

Total Landscaping & Streetscaping………………………….…………………$6,387,668

5. Irrigation - The estimated costs for the irrigation system include allocations for bubblers, main lines, spray heads, wiring, laterals, controllers and other miscellaneous appurtenances (i.e. Valves, rain sensors, bfp etc). Professional fees, contingency and mobilization are also included as part of the costs.

Total Irrigation …………..…..…………………………….……………………..$510,013

6. Entertainment Block Public Plaza- In general, the estimated costs for the Entertainment Block Plaza include allocations for the design and construction of improvements to create a 1 acre public plaza with a special fountain, landscape and hardscape features. Professional fees, contingency and mobilization are also taken into account.

Total Entertainment Block Plaza…...…………………………………...…...... $3,617,019

7. Miscellaneous Public Improvements – In addition to items 1 thorough 6, the following improvements will be constructed: utility under grounding, railroad crossing, environmental cleanup, signals (major and minor), on-site clearing and grubbing,

A-13 miscellaneous improvements to the offsite roadway at the intersection of NE 34 Street and NE 2nd Avenue, onsite water connections from the main to the meters, offsite sewer gravity main and allowances for utility conflicts, professional fees, contingency and mobilization.

Total Miscellaneous Public Improvements…………….……………………….$5,136,166

8. Parking Improvement Costs – The estimated costs for the overall parking improvements include elements of: building, earthwork, concrete, masonry, metals, carpentry, thermal and moisture, doors and windows, finishes, specialties, equipment, conveying, mechanical, electrical, exterior walls, special construction, general liability insurance, sub bonds, general conditions, contingency and fee. Parking garage plans were prepared by GSI Architects, Inc. and Walker Parking Consultants/Engineers, Inc., design consultants qualified to provide these services. Based on these plans dated January 22, 2004, Bovis Lend Lease, Inc. has prepared opinions of probable cost as summarized in Table 2. CDD Engineer has reviewed the plans and opinions of probable cost and they appear to be reasonable.

Parking Decks Cars Cost / Car Total Cost North Block 1,795 $16,143 $28,977,000 Mid Block* 333 $15,322 $5,102,147 South Block* 786 $14,324 $11,258,742 Parking Deck* 2,914 $45,337,889 Grand Totals *Parking deck totals do not include on-grade parking. On-grade parking totals for Mid Block and South Block are 37 and 169, respectively. Costs for the on-grade parking spaces are included in Table 3 of this report and are also to be funded by the District. The actual number of parking spaces to be constructed and costs for such may fluctuate as the design progresses. Parking space totals including on-grade parking is 3,120 spaces.

Total Parking Improvement Costs…………………………………………….$45,337,889

9. Mid-Block Plaza and Other Public Improvements – These improvements will include elements of: earthwork and demolition, drainage for parking garages, fire and sanitary sewer services from the main to right-of ways lines. Improvements for Mid-

A-14 Block Plaza are also included and more specifically described as follows: public parking, asphalt paving and striping, a fountain, sidewalks, hardscape, landscape, irrigation and furnishings. The Mid-Block parking garage and plaza will contain approximately 370 parking spaces with accesses from NE 32nd Street and Buena Vista Ave. Table 3 has been attached for your reference.

Total Mid-Block Plaza and Other Public Improvements……………………….$5,866,130

CUMULATIVE SUMMARY OF COSTS

ITEM ESTIMATED COST

Total Roadway Improvements………………………….……...……………...……$5,597,737 Total Water and Sewer Systems…………………………..…………..…………….$2,290,822 Total Stormwater Management Systems……………………………...………...…..$2,791,286 Total Landscaping & Streetscaping…………….…..………….………..…………..$6,387,668 Total Irrigation …………………..…………………….………………...……..…...$ 510,013 Total Plaza at Entertainment Block.……………………………...……………....…$3,617,019 Total Miscellaneous Public Improvements………………………………………$5,136,166 Total Parking Improvement Costs………………………………………………...$45,337,889 Total Mid Block Plaza and Other Public Improvements…………………………...$5,866,130 Grand Total $77,534,730

VII. PROBABLE SCHEDULE OF CAPITAL DISTRIBUTION

Within the District there are primarily streets, parking garages and public areas to construct. The roadway, drainage, and water and sewer utilities will be under construction between the summers of 2004 and 2006. The construction of the parking garages and public areas will range between the fall of 2004 and the spring of 2007. Please reference Exhibit 10 for a layout of construction dates.

Fiscal Year will be Fiscal Fiscal Year Fiscal Year Fiscal from Oct. 1st to Sept. Totals Year 2004 2005 2006 Year 2007 30th of the following year Roadway $1,399,435 $2,798,868 $1,399,434 --- $5,597,737 Improvements

Water and Sewer $572,706 $1,145,411 $572,705 --- $2,290,822 Systems

A-15 Stormwater $697,822 $1,395,643 $697,821 --- $2,791,286 Management Systems Landscaping and $1,596,917 $3,193,834 $1,596,917 --- $6,387,668 Streetscaping

Irrigation $127,503 $255,007 $127,503 --- $510,013

Entertainment ------$3,617,019 --- $3,617,019 Block Public Plaza

Miscellaneous Public $513,617 $2,054,467 $2,054,466 $513,616 $5,136,166 Improvements

North Block --- $14,488,500 $14,488,500 --- $28,977,000 Parking Garage

Mid Block Parking --- $2,551,074 $2,551,073 --- $5,102,147 Garage

South Block --- $5,629,371 $5,629,371 --- $11,258,742 Parking Garage

Mid Block Plaza and Other Public --- $1,466,533 $2,933,065 $1,466,532 $5,866,130 Improvements Fiscal Year Totals $4,908,000 $34,978,708$35,667,874 $1,980,148 $77,534,730

VIII. SUMMARY AND CONCLUSION

The infrastructure, as outlined above, is necessary for the functional development of the District as required by the applicable jurisdictional and governmental agencies. The planning and design of the infrastructure will be in accordance with current governmental regulatory requirements and industrial standards. The infrastructure will serve its intended function so long as the construction is in substantial compliance with the design, permits and local governing agencies. Items for construction in this report are based on current plan quantities for infrastructure construction and these infrastructure improvements will benefit and add value to the District.

A-16 IX. ENGINEER’S CERTIFICATION

It is our opinion that the extent of proposed improvements and probable costs are fair and reasonable. The impact of market conditions, increased regulatory actions, and other factors that may affect future costs cannot be completely assessed and may impact the project over time. Where necessary, information from other professionals and contractors has been used in the preparation of this report. Qualified professionals from these entities have provided design, permitting, and cost information for the purposes of this report. Assuming the construction occurs as scheduled, it is our opinion that the improvements can be permitted, constructed and installed at the costs described in this report.

I hereby certify that the foregoing is a true and correct copy of the Engineer’s Report for the Midtown Miami Community Development District.

______Aaron Buchler, P.E Kimley-Horn and Associates, Inc. Florida Registration No. 54606 April 21, 2004

A-17 TABLE 1

Opinions of Probable Cost

A-18 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

NE 29th ST - 80ft ROW ( 830 LF) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 1,600 LF $15 $24,000 Standard Gray concrete sidewalk (4" slab) 1,400 SY $25 $35,000 Subgrade 4,800 SY $2 $9,600 10" Limerock 4,800 SY $10 $48,000 1.5" Asphalt 4,800 SY $5 $21,600 Excavation/Fill 550 CY $7 $3,850 Pedestrian Light Poles (100 ft O.C. along both sides) 16 EA $5,000 $80,000 Fire Hydrant 3 EA $3,000 $9,000

Subtotal $231,050

WATER AND SEWER 12" water main DIP 800 LF $70 $56,000 8" Gravity sewer PVC 800 LF $45 $36,000 Valves (water) 2 EA $3,000 $6,000 Manholes (sewer) 2 EA $3,000 $6,000

Subtotal $104,000

DRAINAGE P5/ P6 Inlets 6 EA $3,000 $18,000 Manholes 2 EA $2,500 $5,000 18" RCP 120 LF $45 $5,400 24" RCP 800 LF $70 $56,000 Exfiltration Trench 500 LF $55 $30,000 Dry Well with Well Box 0 EA $30,000 $0

Subtotal $114,400

STREETSCAPE/ LANDSCAPE Trees 62 EA $1,000 $62,000 Large Palms (medians) 0 EA $1,000 $0 Tree Pits 62 EA $500 $31,000 Understory planting 4,030 SF $3 $12,090 Coping Stone (includes concrete base) 2000 LF $60 $120,000 Raised Planters (6") 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 124 EA $550 $68,200 Benches 6 EA $1,200 $7,200 Bicycle Racks 4 EA $600 $2,400 Trash Receptacles 8 EA $800 $6,400 10ft wide paver crosswalks 3200 SF $7 $22,400

Subtotal $331,690

IRRIGATION Bubblers (2 per tree)(wiring costs) 124 EA $25 $3,100 Spray Heads (wiring costs) 248 EA $35 $8,680 3" Main Line 200 LF $3 $600 2" Lateral 1600 LF $2 $3,200 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $22,080

SUBTOTAL $803,220 Mobilization (10%) $80,322 Contigency (10%) $88,354

NE 29th ST TOTAL COSTS $971,896

A-19 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

NE 30th ST - 60ft ROW (335 lf) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 670 LF $15 $10,050 Valley Gutter 670 LF $17 $11,390 Standard Gray concrete sidewalk (4" slab) 750 SY $20 $15,000 Subgrade 1,500 SY $2 $3,000 10" Limerock 1,500 SY $10 $15,000 1.5" Asphalt 1,400 SY $5 $6,300 Excavation/Fill 230 CY $7 $1,610 Pedestrian Light Poles (100 ft O.C. along both sides) 8 EA $5,000 $40,000

Subtotal $102,350

WATER AND SEWER 12" water main DIP 375 LF $70 $26,250 8" Gravity sewer PVC 375 LF $45 $16,875 Valves (water) 2 EA $3,000 $6,000 Manholes (sewer) 2 EA $3,000 $6,000 Fire Hydrant 1 EA $3,000 $3,000

Subtotal $58,125

DRAINAGE P5/ P6 Inlets 4 EA $3,000 $12,000 Manholes 2 EA $2,500 $5,000 18" RCP 60 LF $45 $2,700 24" RCP 375 LF $70 $26,250 Exfiltration Trench 200 LF $55 $30,000 Dry Well with Well Box 0 EA $30,000 $0

Subtotal $75,950

STREETSCAPE/ LANDSCAPE Trees 14 EA $1,000 $14,000 Palms 36 EA $1,000 $36,000 Tree Pits 50 EA $500 $25,000 Understory planting 2,000 SF $3 $6,000 Coping Stone (includes concrete base) - Palms 1000 LF $60 $60,000 Raised Planters (6") - Trees 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 100 EA $550 $55,000 Benches 4 EA $1,200 $4,800 Bicycle Racks 2 EA $600 $1,200 Trash Receptacles 6 EA $800 $4,800 10ft wide paver crosswalks 1200 SF $7 $8,400

Subtotal $215,200

IRRIGATION Bubblers (2 per tree)(wiring costs) 100 EA $25 $2,500 Spray Heads (wiring costs) 200 EA $35 $7,000 3" Main Line 100 LF $3 $300 2" Lateral 800 LF $2 $1,600 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $17,900

SUBTOTAL $469,525 Mobilization (10%) $46,953 Contigency (10%) $51,648

NE 30th ST TOTAL COSTS $568,125

A-20 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

NE 31st ST - 60ft ROW (530 lf) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 1,100 LF $15 $16,500 Valley Gutter 1,100 LF $17 $18,700 Standard Gray concrete sidewalk (4" slab) 1,200 SY $20 $24,000 Subgrade 2,300 SY $2 $4,600 10" Limerock 2,300 SY $10 $23,000 1.5" Asphalt 2,300 SY $5 $10,350 Excavation/Fill 500 CY $7 $3,500 Pedestrian Light Poles (100 ft O.C. along both sides) 21 EA $5,000 $105,000

Subtotal $205,650

WATER AND SEWER 12" water main DIP 530 LF $70 $37,100 8" Gravity sewer PVC 530 LF $45 $23,850 Valves (water) 3 EA $3,000 $9,000 Manholes (sewer) 3 EA $3,000 $9,000 Fire Hydrant 3 EA $3,000 $9,000

Subtotal $87,950

DRAINAGE P5/ P6 Inlets 4 EA $3,000 $12,000 Manholes 2 EA $2,500 $5,000 18" RCP 200 LF $45 $9,000 24" RCP 1100 LF $70 $77,000 Exfiltration Trench 200 LF $55 $11,000 Dry Well with Well Box 1 EA $30,000 $30,000

Subtotal $144,000

STREETSCAPE/ LANDSCAPE Trees 22 EA $1,000 $22,000 Palms 52 EA $1,000 $52,000 Tree Pits 74 EA $500 $37,000 Understory planting 3,000 SF $3 $9,000 Coping Stone (includes concrete base) - Palms 1500 LF $60 $90,000 Raised Planters (6") - Trees 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 148 EA $550 $81,400 Benches 6 EA $1,200 $7,200 Bicycle Racks 3 EA $600 $1,800 Trash Receptacles 8 EA $800 $6,400 10ft wide paver crosswalks 1200 SF $7 $8,400

Subtotal $315,200

IRRIGATION Bubblers (2 per tree)(wiring costs) 148 EA $25 $3,700 Spray Heads (wiring costs) 300 EA $35 $10,500 3" Main Line 200 LF $3 $600 2" Lateral 1200 LF $2 $2,400 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $23,700

SUBTOTAL $776,500 Mobilization (10%) $77,650 Contigency (10%) $85,415

NW 31st ST TOTAL COSTS $939,565

A-21 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

NE 32nd ST - 60ft ROW (950 LF) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 2,000 LF $15 $30,000 Valley Gutter 2,000 LF $17 $34,000 Standard Gray concrete sidewalk (4" slab) 2,600 SY $20 $52,000 Subgrade 4,000 SY $2 $8,000 10" Limerock 4,000 SY $10 $40,000 1.5" Asphalt 3,800 SY $5 $17,100 Excavation/Fill 1,000 CY $7 $7,000 Pedestrian Light Poles (100 ft O.C. along both sides) 18 EA $5,000 $90,000

Subtotal $278,100

WATER AND SEWER 12" water main DIP 1000 LF $70 $70,000 8" Gravity sewer PVC 1000 LF $45 $45,000 Valves (water) 4 EA $3,000 $12,000 Manholes (sewer) 4 EA $3,000 $12,000 Fire Hydrant 4 EA $3,000 $12,000

Subtotal $151,000

DRAINAGE P5/ P6 Inlets 8 EA $3,000 $24,000 Manholes 4 EA $2,500 $10,000 18" RCP 400 LF $45 $18,000 24" RCP 1000 LF $70 $70,000 Exfiltration Trench 400 LF $55 $22,000 Dry Well with Well Box 0 EA $30,000 $0

Subtotal $144,000

STREETSCAPE/ LANDSCAPE Trees 38 EA $1,000 $38,000 Palms 90 EA $1,000 $90,000 Tree Pits 128 EA $500 $64,000 Understory planting 5,000 SF $3 $15,000 Coping Stone (includes concrete base) 3600 LF $60 $216,000 Raised Planters (6") 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 256 EA $550 $140,800 Benches 6 EA $1,200 $7,200 Bicycle Racks 3 EA $600 $1,800 Trash Receptacles 8 EA $800 $6,400 10ft wide paver crosswalks 2400 SF $7 $16,800

Subtotal $596,000

IRRIGATION Bubblers (2 per tree)(wiring costs) 256 EA $25 $6,400 Spray Heads (wiring costs) 520 EA $35 $18,200 3" Main Line 200 LF $3 $600 2" Lateral 2200 LF $2 $4,400 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $36,100

SUBTOTAL $1,205,200 Mobilization (10%) $120,520 Contigency (10%) $132,572

NW 32nd ST TOTAL COSTS $1,458,292

A-22 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

NE 34th ST - 90ft ROW (1300 LF) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 5,200 LF $15 $78,000 Standard Gray concrete sidewalk (4" slab) 4,600 SY $25 $115,000 Subgrade 6,000 SY $2 $12,000 10" Limerock 6,000 SY $10 $60,000 1.5" Asphalt 6,000 SY $5 $27,000 Excavation/Fill 1,500 CY $7 $10,500 Pedestrian Light Poles (100 ft O.C. along both sides) 26 EA $5,000 $130,000

Subtotal $432,500

WATER AND SEWER 12" water main DIP 1300 LF $70 $91,000 8" Gravity sewer PVC 1300 LF $45 $58,500 Manholes (sewer) 4 EA $3,000 $12,000 Fire Hydrants 5 EA $3,000 $15,000

Subtotal $176,500

DRAINAGE P5/ P6 Inlets 10 EA $3,000 $30,000 Manholes 5 EA $2,500 $12,500 18" RCP 1000 LF $45 $45,000 24" RCP 1300 LF $70 $91,000 Exfiltration Trench 800 LF $55 $44,000 Dry Well with Well Box 2 EA $30,000 $60,000

Subtotal $282,500

STREETSCAPE/ LANDSCAPE Trees 50 EA $1,000 $50,000 Large Date Palms (medians) 25 EA $4,000 $100,000 Tree Pits 50 EA $500 $25,000 Understory planting ( Including Median) 15,000 SF $3 $45,000 Coping Stone (includes concrete base) 0 LF $60 $0 Raised Planters (6") 1800 LF $20 $36,000 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 150 EA $550 $82,500 Benches 10 EA $1,200 $12,000 Bicycle Racks 3 EA $600 $1,800 Trash Receptacles 14 EA $800 $11,200 10ft wide paver crosswalks 3600 SF $7 $25,200

Subtotal $388,700

IRRIGATION Bubblers (2 per tree)(wiring costs) 100 EA $25 $2,500 Spray Heads (wiring costs) 1000 EA $35 $35,000 3" Main Line 400 LF $3 $1,200 2" Lateral 5500 LF $2 $11,000 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $56,200

SUBTOTAL $1,336,400 Mobilization (10%) $133,640 Contigency (10%) $147,004

NW 34th ST TOTAL COSTS $1,617,044

A-23 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

NE 35th ST - 60ft ROW (335 LF) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 670 LF $15 $10,050 Valley Gutter 670 LF $17 $11,390 Standard Gray concrete sidewalk (4" slab) 750 SY $20 $15,000 Subgrade 1,500 SY $2 $3,000 10" Limerock 1,500 SY $10 $15,000 1.5" Asphalt 1,400 SY $5 $6,300 Excavation/Fill 230 CY $7 $1,610 Pedestrian Light Poles (100 ft O.C. along both sides) 8 EA $5,000 $40,000

Subtotal $102,350

WATER AND SEWER 12" water main DIP 375 LF $70 $26,250 8" Gravity sewer PVC 375 LF $45 $16,875 Manholes (sewer) 2 EA $3,000 $6,000 Fire Hydrant 2 EA $3,000 $3,000

Subtotal $52,125

DRAINAGE P5/ P6 Inlets 4 EA $3,000 $12,000 Manholes 2 EA $2,500 $5,000 18" RCP 60 LF $45 $2,700 24" RCP 375 LF $70 $26,250 Exfiltration Trench 200 LF $55 $11,000 Dry Well with Well Box 0 EA $30,000 $0

Subtotal $56,950

STREETSCAPE/ LANDSCAPE Trees 14 EA $1,000 $14,000 Palms 32 EA $1,000 $32,000 Tree Pits 46 EA $500 $23,000 Understory planting 1,900 SF $3 $5,700 Coping Stone (includes concrete base) 900 LF $60 $54,000 Raised Planters (6") 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 92 EA $550 $50,600 Benches 4 EA $1,200 $4,800 Bicycle Racks 2 EA $600 $1,200 Trash Receptacles 6 EA $800 $4,800 10ft wide paver crosswalks 1200 SF $7 $8,400

Subtotal $198,500

IRRIGATION Bubblers (2 per tree)(wiring costs) 92 EA $25 $2,300 Spray Heads (wiring costs) 200 EA $35 $7,000 3" Main Line 100 LF $3 $300 2" Lateral 800 LF $2 $1,600 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $17,700

SUBTOTAL $427,625 Mobilization (10%) $42,763 Contigency (10%) $47,039

NW 35th ST TOTAL COSTS $517,426

A-24 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

NE 36th ST - 70ft ROW 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 3,537 LF $15 $53,055 Standard Gray concrete sidewalk (4" slab) 982 SY $25 $24,550 Subgrade 8,000 SY $2 $16,000 10" Limerock 8,000 SY $10 $80,000 1.5" Asphalt 8,000 SY $5 $36,000 Excavation/Fill 2,000 CY $7 $14,000 Pedestrian Light Poles (100 ft O.C. along both sides) 14 EA $5,000 $70,000

Subtotal $293,605

WATER AND SEWER 12" water main DIP 1300 LF $70 $91,000 8" Gravity sewer PVC 1300 LF $45 $58,500 Manholes (sewer) 4 EA $3,000 $12,000 Fire Hydrants 5 EA $3,000 $15,000

Subtotal $176,500

DRAINAGE P5/ P6 Inlets 6 EA $3,000 $18,000 Manholes 4 EA $2,500 $10,000 18" RCP 0 LF $45 $0 24" RCP 1300 LF $70 $91,000 Exfiltration Trench 300 LF $55 $16,500 Dry Well with Well Box 2 EA $30,000 $60,000

Subtotal $195,500

STREETSCAPE/ LANDSCAPE Trees 0 EA $1,000 $0 Large Palms (medians & South Side) 80 EA $1,000 $80,000 Tree Pits 40 EA $500 $20,000 Understory planting ( Including Median) 11,560 SF $3 $34,680 Coping Stone (includes concrete base) 984 LF $60 $59,040 Up lighting (2 lights per tree) 158 EA $550 $86,900 Benches 10 EA $1,200 $12,000 Bicycle Racks 3 EA $600 $1,800 Trash Receptacles 15 EA $800 $12,000 10ft wide paver crosswalks 2800 SF $7 $19,600

Subtotal $326,020

IRRIGATION Bubblers (2 per tree)(wiring costs) 158 EA $25 $3,950 Spray Heads (wiring costs) 288 EA $35 $10,080 3" Main Line 100 LF $3 $300 2" Lateral 4500 LF $2 $9,000 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $29,830

SUBTOTAL $1,021,455 Mobilization (10%) $102,146 Contigency (10%) $112,360

NW 36th ST TOTAL COSTS $1,235,961

A-25 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

N MIAMI AVE (South of NE 34th St) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 5,773 LF $15 $86,595 Standard Gray concrete sidewalk (4" slab) 853 SY $25 $21,325 Milling of existing pavement 7,000 SY $2 $12,250 10" Limerock 7,000 SY $10 $70,000 1.5" Asphalt 7,000 SY $5 $31,500 Pedestrian Light Poles (100 ft O.C. along both sides) 30 EA $5,000 $150,000 Subtotal $371,670

WATER AND SEWER 12" water main DIP 2700 LF $70 $189,000 8" Gravity sewer PVC 0 LF $45 $0 Valves (water) 0 EA $3,000 $0 Manholes (sewer) 0 EA $3,000 $0 Fire Hydrant 10 EA $3,000 $30,000

Subtotal $219,000

DRAINAGE P5/ P6 Inlets 7 EA $3,000 $21,000 Manholes 3 EA $2,500 $7,500 18" RCP 140 LF $45 $6,300 24" RCP 0 LF $70 $0 Exfiltration Trench 1500 LF $55 $30,000 Dry Well with Well Box 0 EA $30,000 $0

Subtotal $64,800

STREETSCAPE/ LANDSCAPE Trees 0 EA $1,000 $0 Large Palms 90 EA $1,000 $90,000 Tree Pits 60 EA $500 $30,000 Understory planting 10,000 SF $3 $30,000 Coping Stone (includes concrete base) 0 LF $60 $0 Raised Planters (6") 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 180 EA $550 $99,000 Benches 10 EA $1,200 $12,000 Bicycle Racks 0 EA $600 $0 Trash Receptacles 16 EA $800 $12,800 10ft wide paver crosswalks 2100 SF $7 $14,700

Subtotal $288,500

IRRIGATION Bubblers (2 per tree)(wiring costs) 180 EA $25 $4,500 Spray Heads (wiring costs) 600 EA $35 $21,000 3" Main Line 100 LF $3 $300 2" Lateral 2300 LF $2 $4,600 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $36,900

SUBTOTAL $980,870 Mobilization (10%) $98,087 Contigency (10%) $107,896

N MIAMI AVE TOTAL COSTS $1,186,853

A-26 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

N MIAMI AVE (North of NE 34th St) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 3,057 LF $15 $45,855 Standard Gray concrete sidewalk (4" slab) 432 SY $25 $10,800 Subgrade 7,000 SY $3 $17,500 10" Limerock 7,000 SY $10 $70,000 1.5" Asphalt 7,000 SY $5 $31,500 Pedestrian Light Poles (100 ft O.C. along both sides) 8 EA $5,000 $40,000

Subtotal $215,655

WATER AND SEWER 12" water main DIP 850 LF $70 $59,500 8" Gravity sewer PVC 0 LF $45 $0 Valves (water) 2 EA $3,000 $6,000 Manholes (sewer) 0 EA $3,000 $0 Fire Hydrant 3 EA $3,000 $9,000

Subtotal $74,500

DRAINAGE P5/ P6 Inlets 7 EA $3,000 $21,000 Manholes 3 EA $2,500 $7,500 18" RCP 140 LF $45 $6,300 24" RCP 0 LF $70 $0 Exfiltration Trench 1500 LF $55 $30,000 Dry Well with Well Box 0 EA $30,000 $0

Subtotal $64,800

STREETSCAPE/ LANDSCAPE Trees 0 EA $1,000 $0 Large Palms 40 EA $1,000 $40,000 Tree Pits 40 EA $500 $20,000 Understory planting 7,000 SF $3 $21,000 Coping Stone (includes concrete base) 0 LF $60 $0 Raised Planters (6") 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 80 EA $550 $44,000 Benches 10 EA $1,200 $12,000 Bicycle Racks 0 EA $600 $0 Trash Receptacles 16 EA $800 $12,800 10ft wide paver crosswalks 1400 SF $7 $9,800

Subtotal $159,600

IRRIGATION Bubblers (2 per tree)(wiring costs) 80 EA $25 $2,000 Spray Heads (wiring costs) 300 EA $35 $10,500 3" Main Line 100 LF $3 $300 2" Lateral 2300 LF $2 $4,600 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $23,900

SUBTOTAL $538,455 Mobilization (10%) $53,846 Contigency (10%) $59,230

N MIAMI AVE TOTAL COSTS $651,531

A-27 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

BUENA VISTA AVE. - 82ft ROW (1,300 LF) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 0 LF $15 $0 Concrete paver sidewalk and roadways (4" slab) 12,000 SY $50 $600,000 Subgrade 8,200 SY $2 $16,400 10" Limerock 8,200 SY $10 $82,000 1.5" Asphalt 0 SY $5 $0 Excavation/Fill 1,000 CY $7 $7,000 Pedestrian Light Poles (100 ft O.C. along both sides) 26 EA $5,000 $130,000

Subtotal $835,400

WATER AND SEWER 12" water main DIP 1300 LF $70 $91,000 8" Gravity sewer PVC 1300 LF $45 $58,500 Valves (water) 4 EA $3,000 $12,000 Manholes (sewer) 4 EA $3,000 $12,000 Fire Hydrant 6 EA $3,000 $18,000

Subtotal $191,500

DRAINAGE P5/ P6 Inlets 12 EA $3,000 $36,000 Manholes 6 EA $2,500 $15,000 18" RCP 1000 LF $45 $45,000 24" RCP 1300 LF $70 $91,000 Exfiltration Trench 1000 LF $55 $30,000 Dry Well with Well Box 1 EA $30,000 $30,000

Subtotal $247,000

STREETSCAPE/ LANDSCAPE Trees 66 EA $1,000 $66,000 Large Palms 50 EA $1,000 $50,000 Tree Pits 116 EA $500 $58,000 Understory planting 9,000 SF $3 $27,000 Coping Stone (includes concrete base) - Side Trees 1400 LF $60 $84,000 Raised Planters (6") - Palms 1600 LF $20 $32,000 Raised Planter (18"x18") - Median Trees 1600 LF $45 $72,000 Up lighting (2 lights per tree) 232 EA $550 $127,600 Benches 20 EA $1,200 $24,000 Bicycle Racks 4 EA $600 $2,400 Trash Receptacles 24 EA $800 $19,200

Subtotal $562,200

IRRIGATION Bubblers (2 per tree)(wiring costs) 94 EA $25 $2,350 Spray Heads (wiring costs) 800 EA $35 $28,000 3" Main Line 400 LF $3 $1,200 2" Lateral 4000 LF $2 $8,000 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $46,050

SUBTOTAL $1,882,150 Mobilization (10%) $188,215 Contigency (10%) $207,037

NE 1st AVE TOTAL COSTS $2,277,402

A-28 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

MIDTOWN BOULEVARD - 80ft ROW (2400 LF) (Includes All Adjacent Parks) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 4,800 LF $15 $72,000 Standard Gray concrete sidewalk (4" slab) 8,600 SY $25 $215,000 Decorative pavers in park areas 2,000 SY $50 $100,000 Subgrade 11,000 SY $2 $22,000 10" Limerock 11,000 SY $10 $110,000 1.5" Asphalt 11,000 SY $5 $49,500 Excavation/Fill 2,500 CY $7 $17,500 Pedestrian Light Poles (100 ft O.C. along both sides) 48 EA $5,000 $240,000

Subtotal $826,000

WATER AND SEWER 12" water main DIP 2300 LF $70 $161,000 8" Gravity sewer PVC 2300 LF $45 $103,500 Manholes (sewer) 6 EA $3,000 $18,000 Fire Hydrants 9 EA $3,000 $27,000

Subtotal $309,500

DRAINAGE P5/ P6 Inlets 8 EA $5,000 $40,000 Manholes 6 EA $2,500 $15,000 18" RCP 420 LF $45 $18,900 24" RCP 2400 LF $70 $168,000 Exfiltration Trench 400 LF $55 $22,000 Dry Well with Well Box 6 EA $30,000 $180,000

Subtotal $443,900

STREETSCAPE/ LANDSCAPE Shade Trees 80 EA $1,000 $80,000 Palm Tree 160 EA $1,000 $160,000 Tree Pits 80 EA $500 $40,000 Coping Stone (includes concrete base) 6000 LF $60 $360,000 Raised Planters (6") 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Understory planting 17,000 SF $3 $51,000 Up lighting (2 lights per tree) 320 EA $550 $176,000 Benches 15 EA $1,200 $18,000 Bicycle Racks 4 EA $600 $2,400 Trash Receptacles 22 EA $800 $17,600 10ft wide paver crosswalks 5600 SF $7 $39,200

Subtotal $944,200

IRRIGATION Bubblers (2 per tree)(wiring costs) 0 EA $25 $0 Spray Heads (wiring costs) 640 EA $35 $22,400 3" Main Line 600 LF $3 $1,800 2" Lateral 6000 LF $2 $12,000 Controller 2 EA $1,500 $3,000 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $44,200

SUBTOTAL $2,567,800 Mobilization (10%) $256,780 Contigency (10%) $282,458

NE 1ST PLACE TOTAL COSTS $3,107,038 A-29 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

EAST COAST AVE. - 40 FT ROW (1800 LF) 01.07.04 Quantity Unit Unit Price Cost ROADWAY Curb 3,600 LF $15 $54,000 Standard Gray concrete - 10FT width 3,000 SY $25 $75,000 Subgrade 4,400 SY $2 $8,800 10" Limerock 4,400 SY $10 $44,000 1.5" Asphalt 4,400 SY $5 $19,800 Pedestrian Light Poles (100 ft O.C. along both sides) 32 EA $5,000 $160,000

Subtotal $361,600

WATER AND SEWER 12" water main DIP 1800 LF $70 $126,000 8" Gravity sewer PVC 0 LF $45 $0 Valves (water) 5 EA $3,000 $15,000 Manholes (sewer) 0 EA $3,000 $0

Subtotal $141,000

DRAINAGE P5/ P6 Inlets 6 EA $3,000 $18,000 Manholes 4 EA $2,500 $10,000 18" RCP 320 LF $45 $14,400 30" RCP 1800 LF $70 $126,000 Water Quality Treatment Markup 300 LF $55 $30,000 Well 3 EA $30,000 $90,000

Subtotal $288,400

STREETSCAPE/ LANDSCAPE Trees 140 EA $1,000 $140,000 Large Palms 0 EA $1,000 $0 Tree Pits 70 EA $500 $35,000 Understory planting 4,000 SF $3 $12,000 Coping Stone (includes concrete base) 2300 LF $60 $138,000 Raised Planters (6") 0 LF $20 $0 Raised Planter (18"x18") 0 LF $45 $0 Up lighting (2 lights per tree) 280 EA $550 $154,000 Benches 10 EA $1,200 $12,000 Bicycle Racks 4 EA $600 $2,400 Trash Receptacles 16 EA $800 $12,800 10ft wide paver crosswalks 3500 SF $7 $24,500

Subtotal $530,700

IRRIGATION Bubblers (2 per tree)(wiring costs) 280 EA $25 $7,000 Spray Heads (wiring costs) 300 EA $35 $10,500 3" Main Line 400 LF $3 $1,200 2" Lateral 4000 LF $2 $8,000 Controler 1 EA $1,500 $1,500 Miscelaneous (valves, bfp, rain sensor, etc) 1 Allow $5,000 $5,000

Subtotal $33,200

SUBTOTAL $1,354,900 Mobilization (10%) $135,490 Contigency (10%) $149,039

FEC ROW TOTAL COSTS $1,639,429

A-30 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

PUBLIC PLAZAS 01.07.04 Quantity Unit Unit Price Cost

Entertainment Block Public Plaza Special Fountain 1 Allow $2,000,000 $2,000,000 Site development 1 Allow $750,000 $750,000

MidBlock Public Plaza Lump Sum Cost 1 Allow $0 $0

SUBTOTAL $2,750,000 Mobilization (10%) $275,000 Contigency (10%) $302,500

PUBLIC PLAZAS TOTAL $3,327,500

A-31 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

MISCELLANEOUS PUBLIC IMPROVEMENTS 01.07.04 Quantity Unit Unit Price Cost

Water connections from mains to meterboxes 1 Allow 200,000 200,000 Roadway / Utility Undergrounding 1 Allow 725,000 725,000 Signal- major 2 Allow 120000 240,000 Signal- minor 1 Allow 30000 30,000 Clearing/ Grubbing (ON-SITE) 55 Acres 10,000 550,000 Environ cleanup 1 Allow 1100000 1,100,000 Railroad crossing 1 Allow $400,000 400,000 20" offsite sewer gravity main (est. 1100 ft) 1 allow $500,000 500,000 Allowance for Utility Conflicts for 20" sewer installation 1 Allow $160,000 160,000

SUBTOTAL $3,905,000 Mobilization (10%) $390,500 Contigency (10%) $429,550

MISCELLANEOUS PUBLIC IMPROVEMENTS TOTAL COSTS $4,725,050

1. Allowance for FP&L needs confirmation by the utility 2. Allowance for Bellsouth needs confirmation by the utility

A-32 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

SUMMARY OF COSTS 01.07.04

COMPLETE STREETSCAPE Includes- roadway, water, sewer, drainage, lighting, hardscape, landscape, irrigation, street furniture, mobilization, & contigency

NE 29th Street $971,896 NE 30th Street $568,125 NE 31st Street $939,565 NE 32nd Street $1,458,292 NE 34th Street $1,617,044 NE 35th Street $517,426 NE 36th Street $1,235,961 N Miami Avenue (North) $651,531 N Miami Avenue (South) $1,186,853 NE 1st Avenue (Market Street) $2,277,402 NE 1st Place $3,107,038 FEC Road $1,639,429

SUBTOTAL $16,170,561

PUBLIC PLAZAS Entertainment Block Public Plaza $3,327,500

MISCELLANEOUS PUBLIC IMPROVEMENTS $4,725,050 PROFESSIONAL FEES $2,107,600

TOTAL $26,330,711

A-33 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

SUMMARY OF COSTS 01.07.04

ROADWAYS NE 29th Street $ 279,571 NE 30th Street $ 123,844 NE 31st Street $ 248,837 NE 32nd Street $ 336,501 NE 34th Street $ 523,325 NE 35th Street $ 123,844 NE 36th Street $ 355,262 N Miami Avenue (North) $ 260,943 N Miami Avenue (South) $ 449,721 NE 1st Avenue (Market Street) $ 1,010,834 NE 1st Place $ 999,460 FEC Road $ 437,536

TOTAL ROADWAY $ 5,149,675

WATER AND SEWER NE 29th Street $ 125,840 NE 30th Street $ 70,331 NE 31st Street $ 106,420 NE 32nd Street $ 182,710 NE 34th Street $ 213,565 NE 35th Street $ 63,071 NE 36th Street $ 213,565 N Miami Avenue (North) $ 90,145 N Miami Avenue (South) $ 264,990 NE 1st Avenue (Market Street) $ 231,715 NE 1st Place $ 374,495 FEC Road $ 170,610

TOTAL WATER AND SEWER $ 2,107,457

A-34 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

DRAINAGE NE 29th Street $ 138,424 NE 30th Street $ 91,900 NE 31st Street (West) $ 174,240 NE 32nd Street (West) $ 174,240 NE 34th Street $ 341,825 NE 35th Street $ 68,910 NE 36th Street $ 236,555 N Miami Avenue (North) $ 78,408 N Miami Avenue (South) $ 78,408 NE 1st Avenue (Market Street) $ 298,870 NE 1st Place $ 537,119 FEC Road $ 348,964

TOTAL $ 2,567,862

STREETSCAPE/ LANDSCAPE NE 29th Street $ 401,345 NE 30th Street $ 260,392 NE 31st Street $ 381,392 NE 32nd Street $ 721,160 NE 34th Street $ 470,327 NE 35th Street $ 240,185 NE 36th Street $ 394,484 N Miami Avenue (North) $ 193,116 N Miami Avenue (South) $ 349,085 NE 1st Avenue (Market Street) $ 680,262 NE 1st Place $ 1,142,482 FEC Road $ 642,147

TOTAL STREETSCAPE $ 5,876,377

A-35 MIDTOWN MIAMI CDD Opinion of Probable Cost Kimley-Horn and Associates, Inc.

IRRIGATION NE 29th Street $ 26,717 NE 30th Street $ 21,659 NE 31st Street (West) $ 28,677 NE 32nd Street (West) $ 43,681 NE 34th Street $ 68,002 NE 35th Street $ 21,417 NE 36th Street $ 36,094 N Miami Avenue (North) $ 28,919 N Miami Avenue (South) $ 44,649 NE 1st Avenue (Market Street) $ 55,721 NE 1st Place $ 53,482 FEC Road $ 40,172 $ - TOTAL IRRIGATION $ 469,190

TOTALS Roadways $ 5,149,675 Water and Sewer $ 2,107,457 Drainage $ 2,567,862 Streetscape/ Landscape $ 5,876,377 Irrigation $ 469,190

SUBTOTAL $ 16,170,561

OTHER

Plaza at Entertainment Block $ 3,327,500 Miscellaneous Public Improvements $4,725,050 Professional Fees $2,107,600 TOTAL $ 26,330,711

A-36 TABLE 2

Parking Improvements Cost

A-37 Parking Improvements Cost MIDTOWN MIAMI CDD North Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - North Block SF: 686,000 Cars: 1,795 UNIT DESCRIPTION QUANTITY UNIT PRICE EXTENSION $/SF

DIVISION 20 - BUILDING EARTHWORK 18" Dia. Augercast Piles 18,300 LF $26.00 $ 475,800 14" Dia. Augercast Piles 3,870 LF $18.00 $ 69,660 Remove Spoils 1,232 CY $3.50 $ 4,312 Test Pile 2 EA $15,000.00 $ 30,000 Backfill Ramp Walls 1,730 CY $12.00 $ 20,760 Soil Poisoning at Ramps on Grade 7,750 SF $0.20 $ 1,550 $ - TOTAL DIVISION 2 $602,082 $ 0.88

DIVISION 30 - CONCRETE Pile Caps 1,380 CY $350.00 $ 483,000 Spread Footings at Low Rise Struct 620 CY $300.00 $ 186,000 Continuous Footings at Ext/Int Walls 800 CY $250.00 $ 200,000 Misc Foundations 686,000 SF $0.25 $ 171,500 Int Ramp Retaining Walls - Grnd-2 2,600 SF $20.00 $ 52,000 Int Ramp Retaining Walls - Grnd-1 1,810 SF $20.00 $ 36,200 Side Walls at Ramps - Grnd to Lvl 1 11,760 SF $18.00 $ 211,680 Elevator Pits 13 EA $3,500.00 $ 45,500 Elevator Pits for Future Elevators 3 EA $3,500.00 $ 10,500 SOG Stair / Elev Cores 6,950 SF $3.50 $ 24,325 Structure - Level 1 209,200 SF $19.00 $ 3,974,800 Premium - High Cols Grnd to Lvl 1 290 CY $550.00 $ 159,500 Structure - Level 2 201,500 SF $19.00 $ 3,828,500 Structure - Level 3 228,500 SF $19.00 $ 4,341,500 Ramp on Grade - Grnd to Lvl 2 4,500 SF $3.50 $ 15,750 Ramp on Grade - Grnd to Lvl1 3,250 SF $3.50 $ 11,375 Struct Ramp Slabs - Grnd to Lvl 2 19,800 SF $19.00 $ 376,200 Struct Ramp Slabs - Grnd to Lvl 1 10,250 SF $19.00 $ 194,750 Struct Ramp Slabs - Lvl 1 to Lvl 2 4,500 SF $19.00 $ 85,500 Struct Ramp Slabs - Lvl 2 to Lvl 3 4,500 SF $19.00 $ 85,500 Hoisting ( Incl in Struct Costs ) SF $ - $ - Roof Slabs - Elevators / Stairs 6,950 SF $15.00 $ 104,250 Raised Islands - Ramp Sides & Gates 6,000 SF $3.00 $ 18,000 Misc Concrete Items 686,000 SF $0.10 $ 68,600 3' 6" PC Spandrel - Level 1Perim 7,100 SF $26.50 $ 188,150 5' 0" PC Spandrel - Level 2 Perim 10,010 SF $26.50 $ 265,265 5' 0" PC Spandrel - Level 3 Perim 10,010 SF $26.50 $ 265,265 PC Walls - Stair / Elev Cores 10,200 SF $26.50 $ 270,300 $ - TOTAL DIVISION 3 $15,673,910 $ 22.85

A-38 Parking Improvements Cost MIDTOWN MIAMI CDD North Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - North Block DIVISION 40 - MASONRY CMU at Stairs / Elevator Shafts 60,800 SF $10.00 $ 608,000 CMU Walls at Ventilation Shafts 960 SF $9.00 $ 8,640 Glazed Block at Elevator Fronts 24,470 SF $12.00 $ 293,640 Brick 1,500 SF $21.00 $ 31,500 Precast Coping 120 LF $75.00 $ 9,000 $ - TOTAL DIVISION 4 $950,780 $ 1.39

DIVISION 50 - METALS Stairs & Landings - 9@4 Flts + 2@1Flt 38 FLTS$ 4,500.00 $ 171,000 Elevator Pit Ladders 13 EA $450.00 $ 5,850 Elevator Sump Grate 13 EA $250.00 $ 3,250 Elevator Separator Beams 30 EA $350.00 $ 10,500 Elevator Sill Angles 48 EA $50.00 $ 2,400 Elevator Hoist Beams 13 EA $500.00 $ 6,500 Trench Drains 120 LF $150.00 $ 18,000 Corner Guard Angles - Not Reqd 0 EA $ - $ - Pipe Bollards 24 EA $400.00 $ 9,600 11 Wire Cable Rails 3,820 LF $15.00 $ 57,300 Column Sleeves for Cable Rails 160 EA $50.00 $ 8,000 Cart Corrals 9 EA $1,080.00 $ 9,720 Misc Metals 686,000 SF $0.20 $ 137,200 $ - TOTAL DIVISION 5 $439,320 $ 0.64

DIVISION 60 - CARPENTRY Misc Carpentry 686,000 SF $0.10 $ 68,600 $ - TOTAL DIVISION 6 $68,600 $ 0.10

DIVISION 70 - THERMAL & MOISTURE Waterproof Elevator Pits 16 EA $1,800.00 $ 28,800 Waterproof Retaining Walls 4,410 SF $2.50 $ 11,025 Roofing at Elevators / Stairs 6,950 SF $10.00 $ 69,500 Expansion Joints 2,930 LF $100.00 $ 293,000 Traffic Coating 228,000 SF $3.00 $ 684,000 Misc Caulking 686,000 SF $0.05 $ 34,300 Caulk & Seal Precast 37,320 SF $0.65 $ 24,258 Stucco on Block 45,100 SF $4.00 $ 180,400 $ - TOTAL DIVISION 7 $1,325,283 $ 1.93

A-39 Parking Improvements Cost MIDTOWN MIAMI CDD North Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - North Block

DIVISION 80 - DOORS & WINDOWS Rated Stair Doors 40 EA $880.00 $ 35,200 Mechanical / Electrical Rm Doors 10 EA $800.00 $ 8,000 Rolling Security Grilles at Entrys 900 SF $35.00 $ 31,500 $ - TOTAL DIVISION 8 $74,700 $ 0.11

DIVISION 90 - FINISHES Paint CMU Partitions 96,440 SF $0.65 $ 62,686 Paint Doors & Frames 50 EA $45.00 $ 2,250 Misc Painting 686,000 SF $0.05 $ 34,300 Paint Underside of Decks - Add Alt. 430,000 SF $ - $ - Paint Columns 30,420 SF $0.65 $ 19,773 $ - TOTAL DIVISION 9 $119,009 $ 0.17

DIVISION 100 - SPECIALTIES Fire Extinguishers 38 EA $125.00 $ 4,750 Wayfinding Allowance 1,795 EA $60.00 $ 107,700 Louvers 1,500 SF $25.00 $ 37,500 Parking Stripes 1,795 EA $10.00 $ 17,950 Precast Parking Bumpers - Not Reqd 0 EA $ - $ - Decorative Screens at Public Cores 2,262 SF $75.00 $ 169,650 Decorative Grilles at Lvl One Perimeter 1,800 SF $50.00 $ 90,000 $ - TOTAL DIVISION 10 $427,550 $ 0.62

DIVISION 110 - EQUIPMENT Parking Control Equip Allowance 1 LS $45,000.00 $ 45,000 $ - TOTAL DIVISION 11 $45,000 $ 0.07

DIVISION 120 - FURNISHINGS $ - TOTAL DIVISION 12 $ - $ -

DIVISION 130 - SPECIAL CONSTRUCTION $ - TOTAL DIVISION 13 $ - $ -

DIVISION 140 - CONVEYING

A-40 Parking Improvements Cost MIDTOWN MIAMI CDD North Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - North Block Elevators $ 1,323,486 Traction Elevators 6 EA - 4 Stop Passenger 24 STP $ - 4 Ea - 4 Stop Passenger / Rear Opng 16 STP $ - 1 Ea - 4 Stop Service 4 STP $ - 2 Ea - 2 Stop Passenger 4 STP $ - $ - TOTAL DIVISION 14 $1,323,486 $ 1.93

DIVISION 150 - MECHANICAL Drainage 686,000 SF $0.75 $ 514,500 Ventilation - NIC 457,500 SF $ - $ - Fire Protection - Sprinklers 457,500 SF $1.10 $ 503,250 CO Monitoring - NIC 457,500 SF $ - $ - $ - TOTAL DIVISION 15 $1,017,750 $ 1.48

DIVISION 160 - ELECTRICAL Electrical 686,000 SF $1.55 $ 1,063,300 Upgrade for 5 Foot Candles / Ltng 686,000 SF $0.50 $ 343,000 Security / CCTV - Add Alt 686,000 SF $ - $ - $ - TOTAL DIVISION 16 $1,406,300 $ 2.05

Subtotal Cost $23,473,770 $ 23,473,770 $ 34.22

Contingency $1,173,689 $ 1.71 A & E Fees $785,000 $ 1.14 Overhead & Professional Fees $ 3,544,541 $ 5.17 $28,977,000 $ 42.24

A-41 Parking Improvements Cost MIDTOWN MIAMI CDD South Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - South Block SF: 317,610 ( 389,010 w/ On Grade Area ) Cars: 786 ( Excludes Surface Spaces )

UNIT DESCRIPTION QUANTITY UNIT PRICE EXTENSION $/SF

DIVISION 20 - BUILDING EARTHWORK 18" Dia. Augercast Piles 10,080 LF $18.00 $ 181,440 Remove Spoils 660 CY $3.50 $ 2,309 Test Pile 1 EA $15,000.00 $ 15,000 Backfill Ramp Walls 1,467 CY $12.00 $ 17,600 Soil Poisoning 71,400 SF $0.15 $ 10,710 $ - TOTAL DIVISION 2 $227,059 $ 0.71

DIVISION 30 - CONCRETE Pile Caps 653 CY $300.00 $ 196,000 Elevator Pits 8 EA $3,500.00 $ 28,000 Slab on Grade - Separate Price SF $ - Int Ramp Retaining Walls - Grnd-2 1,700 SF $20.00 $ 34,000 Elevator Pits EA $ 3,500.00 $ - Structure - Level 1 69,210 SF $17.50 $ 1,211,175 Premium - High Cols Grnd to Lvl 1 80 CY $550.00 $ 44,000 Structure - Level 2 67,500 SF $17.50 $ 1,181,250 Structure - Level 3 67,500 SF $17.50 $ 1,181,250 Structure - Level 4 67,500 SF $17.50 $ 1,181,250 Ramp on Grade - Grnd to Lvl1 6,600 SF $3.50 $ 23,100 Struct Ramp Slabs - Grnd to Lvl 1 7,800 SF $17.50 $ 136,500 Struct Ramp Slabs - Lvl 1 to Lvl 2 10,500 SF $17.50 $ 183,750 Struct Ramp Slabs - Lvl 2 to Lvl 3 10,500 SF $17.50 $ 183,750 Struct Ramp Slabs - Lvl 3 to Lvl 4 10,500 SF $17.50 $ 183,750 Hoisting ( Incl in Struct Costs ) SF $ - $ - Roof Slabs - Elevators 800 SF $15.00 $ 12,000 Roof Slabs - Stairs 400 SF $15.00 $ 6,000 Raised Islands - Lvls 1 - 4 12,800 SF $3.00 $ 38,400 Raised Islands - 2' W Ramp Sides 1,000 SF $3.00 $ 3,000 Misc Concrete Items 389,010 SF $0.10 $ 38,901 3' 6" PC Spandrel - Perim / GF 2,860 SF $26.50 $ 75,790 PC Walls - Stair / Elev Cores - GF 540 SF $ - 5' 0" PC Spandrel - Level 1 - Incl 5,900 SF $ - 5' 0" PC Spandrel - Level 2 - Incl 5,900 SF $ - 5' 0" PC Spandrel - Level 3 - Incl 5,900 SF $ - 5' 0" PC Spandrel - Level 4 - Incl 5,900 SF $ - PC Walls - Stair / Elev Cores 2,200 SF $ - $ - TOTAL DIVISION 3 $5,941,866 $ 18.71

A-42 Parking Improvements Cost MIDTOWN MIAMI CDD South Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - South Block

DIVISION 40 - MASONRY CMU at Stairs / Elevator Shafts 20,492 SF $6.50 $ 133,198 CMU at Stairs / Elevator Shafts 6,280 SF $6.50 $ 40,820 $ - TOTAL DIVISION 4 $174,018 $ 0.55

DIVISION 50 - METALS Stairs & Landings 10 FLTS$ 4,500.00 $ 45,000 Elevator Pit Ladders 8 EA $450.00 $ 3,600 Elevator Sump Grate 4 EA $250.00 $ 1,000 Elevator Separator Beams 20 EA $350.00 $ 7,000 Elevator Sill Angles 24 EA $50.00 $ 1,200 Elevator Hoist Beams 8 EA $500.00 $ 4,000 Trench Drains 240 LF $150.00 $ 36,000 Corner Guard Angles - Not Reqd 0 EA $ - $ - Pipe Bollards 72 EA $400.00 $ 28,800 11 Wire Cable Rails 1,980 LF $15.00 $ 29,700 Column Sleeves for Cable Rails 126 EA $50.00 $ 6,300 Misc Metals 389,010 SF $0.20 $ 77,802 $ - TOTAL DIVISION 5 $240,402 $ 0.76

DIVISION 60 - CARPENTRY Misc Carpentry 389,010 SF $0.05 $ 19,451 $ - TOTAL DIVISION 6 $19,451 $ 0.06

DIVISION 70 - THERMAL & MOISTURE Waterproof Retaining Walls 1,700 SF $2.50 $ 4,250 Waterproof Elevator Pits 8 EA $1,800.00 $ 14,400 Roofing at Elevators 800 SF $8.00 $ 6,400 Roofing at Stairs 400 SF $8.00 $ 3,200 Expansion Joints 960 LF $175.00 $ 168,000 Traffic Coating - Not Reqd 78,000 SF $ - $ - Misc Caulking 389,010 SF $0.02 $ 7,780 Caulk & Seal Precast 29,200 SF $0.65 $ 18,980 $ - TOTAL DIVISION 7 $223,010 $ 0.70

A-43 Parking Improvements Cost MIDTOWN MIAMI CDD South Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - South Block DIVISION 80 - DOORS & WINDOWS Rated Stair Doors 10 EA $880.00 $ 8,800 Mechanical / Electrical Rm Doors 2 EA $750.00 $ 1,500 Rolling Security Grilles at Entry - NIC 0 SF $ - $ - $ - TOTAL DIVISION 8 $10,300 $ 0.03

DIVISION 90 - FINISHES Paint CMU Partitions 20,492 SF $0.65 $ 13,320 Paint Doors & Frames 12 EA $45.00 $ 540 Misc Painting 389,010 SF $0.05 $ 19,451 Paint Underside of Decks - w/ Struct 271,710 SF $ - $ - Paint Columns 21,921 SF $0.65 $ 14,249 $ - TOTAL DIVISION 9 $47,559 $ 0.15

DIVISION 100 - SPECIALTIES Fire Extinguishers 10 EA $125.00 $ 1,250 Wayfinding Allowance 955 EA $60.00 $ 57,300 Parking Stripes 955 EA $10.00 $ 9,550 Precast Parking Bumpers - Not Reqd 955 EA $ - $ - $ - TOTAL DIVISION 10 $68,100 $ 0.21

DIVISION 110 - EQUIPMENT Parking Control Equip Allowance 1 LS $45,000.00 $ 45,000 $ - TOTAL DIVISION 11 $45,000 $ 0.14

DIVISION 120 - FURNISHINGS $ - TOTAL DIVISION 12 $ - $ -

DIVISION 130 - SPECIAL CONSTRUCTION $ - TOTAL DIVISION 13 $ - $ -

A-44 Parking Improvements Cost MIDTOWN MIAMI CDD South Block Parking Garage

Midtown Miami CDD

Area: Parking Deck - South Block DIVISION 140 - CONVEYING Elevators 25 STP $ 501,120 $ - TOTAL DIVISION 14 $501,120 $ 1.58

DIVISION 150 - MECHANICAL Drainage 389,010 SF $0.75 $ 291,758 Ventilation - Not Reqd 317,610 SF $ - $ - Fire Protection - Sprinklers 317,610 SF $1.20 $ 381,132 CO Monitoring - NIC 317,610 SF $ - $ - $ - TOTAL DIVISION 15 $672,890 $ 2.12

DIVISION 160 - ELECTRICAL Electrical 389,010 SF $1.55 $ 602,966 Upgrade for 5 Foot Candles / Ltng 389,010 SF $0.50 $ 194,505 Security / CCTV 389,010 SF $0.40 $ 155,604 $ - TOTAL DIVISION 16 $953,075 $ 3.00

Subtotal Cost $9,123,849 $ 9,123,849 $ 28.73

Contingency $456,192 $ 1.44 A & E Fees $301,000 $ 0.95 Overhead & Professional Fees $ 1,377,701 $ 4.34 $11,258,742 $ 35.45

A-45 TABLE 3

Mid Block Plaza and Other Public Improvements Cost

A-46 Mid Block Plaza and Other MIDTOWN MIAMI CDD Public Improvements Cost

1 of 2 3/10/2004 A-47 Mid Block Plaza and Other MIDTOWN MIAMI CDD Public Improvements Cost

2 of 2 3/10/2004 A-48 Parking Improvements Cost MIDTOWN MIAMI CDD Mid Block East Parking Garage

A-49 NORTH A-50

MIDTOWN MIAMI SCALE: 1" = 600'-0" FEB. 09, 2004

CITY OF MIAMI, FLORIDA A-51

MIDTOWN MIAMI SCALE: 1" = 200'-0" FEB. 09, 2004

CITY OF MIAMI, FLORIDA EXHIBIT 3

T-Plat (See the following 7 pages)

A-52

EXHIBIT 11

Air Rights to Parking Garages

A-67 A-68 A-69 A-70 A-71 A-72 APPENDIX B

INTERLOCAL AGREEMENT [THIS PAGE INTENTIONALLY LEFT BLANK] B-1 [THIS PAGE INTENTIONALLY LEFT BLANK] B-1 B-2 B-3 B-2 B-4 B-3 B-5 B-4 B-6 B-5 B-7 B-6 B-8 B-7 B-9 B-8 B-10 B-9 B-11 B-10 B-12 B-11 B-13 B-12 B-14 B-13 B-15 B-14 B-16 B-15 B-17 B-16 B-18 B-17 B-19 B-18 B-20 B-19 B-21 B-20 B-21 B-21 B-23 B-22 B-24 B-23 B-25

B-24 B-26 B-25 B-26 B-27 APPENDIX C

FORM OF INDENTURE [THIS PAGE INTENTIONALLY LEFT BLANK] TABLE OF CONTENTS PAGE

ARTICLE I MASTER TRUST INDENTURE DEFINITIONS

______ARTICLE II THE BONDS SECTION 2.01. Amounts and Terms of Bonds; Details of Bonds ...... 17 between SECTION 2.02. Execution ...... 18 SECTION 2.03. Authentication; Authenticating Agent ...... 18 SECTION 2.04. Registration and Registrar...... 19 SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Bonds...... 19 MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT SECTION 2.06. Temporary Bonds...... 20 SECTION 2.07. Cancellation and Destruction of Surrendered Bonds...... 20 and SECTION 2.08. Registration, Transfer and Exchange...... 20 SECTION 2.09. Persons Deemed Owners ...... 21 SECTION 2.10. Limitation on Incurrence of Certain Indebtedness...... 21 WACHOVIA BANK, NATIONAL ASSOCIATION SECTION 2.11. Qualification for The Depository Trust Company...... 21 as Trustee ARTICLE III ISSUE OF BONDS Dated as of July 1, 2004 SECTION 3.01. Issue of Bonds...... 23

C-1 ______ARTICLE IV ACQUISITION OF PROJECT relating to SECTION 4.01. Project to Conform to Plans and Specifications; Changes...... 26 SECTION 4.02. Compliance Requirements...... 26

MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT ARTICLE V SPECIAL ASSESSMENT BONDS ACQUISITION AND CONSTRUCTION FUND Section 5.01 Acquisition and Construction Fund ...... 27

ARTICLE VI SPECIAL ASSESSMENTS; APPLICATION THEREOF TO FUNDS AND ACCOUNTS SECTION 6.01. Special Assessments; Lien of Indenture on Pledged Revenues...... 29 SECTION 6.02. Funds and Accounts Relating to the Bonds ...... 29 SECTION 6.03. Revenue Fund ...... 30 SECTION 6.04. Debt Service Fund...... 31 SECTION 6.05. Debt Service Reserve Fund...... 32 SECTION 6.06. Bond Redemption Fund ...... 35 SECTION 9.19. Employment of Certified Public Accountant...... 51 SECTION 6.07. Drawings on Credit Facility...... 35 SECTION 9.20. Establishment of Fiscal Year, Annual Budget...... 51 SECTION 6.08. Procedure When Funds Are Sufficient to Pay All Bonds of SECTION 9.21. Employment of Consulting Engineer; Consulting a Series...... 35 Engineer’s Report ...... 51 SECTION 6.09. Certain Moneys to Be Held for Series Bondowners Only...... 36 SECTION 9.22. Audit Reports...... 52 SECTION 6.10. Unclaimed Moneys ...... 36 SECTION 9.23. Information to Be Filed with Trustee...... 52 SECTION 9.24. Covenant Against Sale or Encumbrance; Exceptions...... 52 ARTICLE VII SECTION 9.25. Fidelity Bonds...... 53 SECURITY FOR AND INVESTMENT OR DEPOSIT OF FUNDS SECTION 9.26. No Loss of Lien on Pledged Revenue...... 53 SECTION 9.27. Compliance With Other Contracts and Agreements...... 53 SECTION 7.01. Deposits and Security Therefor ...... 37 SECTION 9.28. Issuance of Additional Obligations...... 53 SECTION 7.02. Investment or Deposit of Funds...... 37 SECTION 9.29. Extension of Time for Payment of Interest Prohibited ...... 53 SECTION 7.03. Valuation of Funds...... 38 SECTION 9.30. Further Assurances...... 54 SECTION 9.31. Use of Bond Proceeds to Comply with Internal Revenue ARTICLE VIII Code ...... 54 REDEMPTION AND PURCHASE OF BONDS SECTION 9.32. Corporate Existence and Maintenance of Properties...... 54 SECTION 9.33. Continuing Disclosure ...... 54 SECTION 8.01. Redemption Dates and Prices...... 39 SECTION 8.02. Notice of Redemption and of Purchase ...... 40 SECTION 8.03. Payment of Redemption Price ...... 41 ARTICLE X SECTION 8.04. Partial Redemption of Bonds...... 42 EVENTS OF DEFAULT AND REMEDIES SECTION 10.01. Events of Default and Remedies...... 56 ARTICLE IX SECTION 10.02. Events of Default Defined ...... 56 COVENANTS OF THE ISSUER SECTION 10.03. No Acceleration ...... 57 SECTION 10.04. Legal Proceedings by Trustee...... 57 SECTION 9.01. Power to Issue Bonds and Create Lien ...... 43

C-2 SECTION 10.05. Discontinuance of Proceedings by Trustee...... 57 SECTION 9.02. Payment of Principal and Interest on Bonds...... 43 SECTION 10.06. Bondholders May Direct Proceedings ...... 57 SECTION 9.03. Special Assessments; Re-Assessments...... 44 SECTION 10.07. Limitations on Actions by Bondholders ...... 57 SECTION 9.04. Method of Collection ...... 44 SECTION 10.08. Trustee May Enforce Rights Without Possession of Bonds ...... 58 SECTION 9.05. Delinquent Special Assessments...... 44 SECTION 10.09. Remedies Not Exclusive...... 58 SECTION 9.06. Sale of Tax Certificates and Issuance of Tax Deeds; SECTION 10.10. Delays and Omissions Not to Impair Rights...... 58 Foreclosure of Special Assessment Liens...... 45 SECTION 10.11. Application of Moneys in Event of Default...... 58 SECTION 9.07. Books and Records with Respect to Special Assessments ...... 45 SECTION 10.12. Trustee’s Right to Receiver; Compliance with Act ...... 59 SECTION 9.08. Removal of Special Assessment Liens ...... 46 SECTION 10.13. Trustee and Bondholders Entitled to all Remedies under SECTION 9.09. Deposit of Special Assessments...... 46 Act...... 59 SECTION 9.10. Construction to be on Issuer Lands...... 46 SECTION 10.14. Credit Facility Issuer’s Rights Upon Events of Default ...... 59 SECTION 9.11. Operation, Use and Maintenance of Project ...... 47 SECTION 9.12. Observance of and Compliance with Valid Requirements...... 47 SECTION 9.13. Payment of Operating or Maintenance Costs by State or ARTICLE XI Others...... 47 THE TRUSTEE; THE PAYING AGENT AND REGISTRAR SECTION 9.14. Public Liability and Property Damage Insurance; SECTION 11.01. Acceptance of Trust ...... 61 Maintenance of Insurance; Use of Insurance and SECTION 11.02. No Responsibility for Recitals...... 61 Condemnation Proceeds...... 47 SECTION 11.03. Trustee May Act Through Agents; Answerable Only for SECTION 9.15. Collection of Insurance Proceeds...... 49 Willful Misconduct or Negligence...... 61 SECTION 9.16. Use of Revenues for Authorized Purposes Only ...... 50 SECTION 11.04. Compensation and Indemnity ...... 61 SECTION 9.17. Books, Records and Annual Reports ...... 50 SECTION 11.05. No Duty to Renew Insurance...... 61 SECTION 9.18. Observance of Accounting Standards...... 51 SECTION 11.06. Notice of Default; Right to Investigate...... 61 ii iii SECTION 11.07. Obligation to Act on Defaults...... 62 SECTION 15.04. Illegal Provisions Disregarded...... 72 SECTION 11.08. Reliance by Trustee...... 62 SECTION 15.05. Substitute Notice...... 72 SECTION 11.09. Trustee May Deal in Bonds ...... 62 SECTION 15.06. Notices ...... 72 SECTION 11.10. Construction of Ambiguous Provisions...... 62 SECTION 15.07. Controlling Law...... 73 SECTION 11.11. Resignation of Trustee ...... 62 SECTION 15.08. Successors and Assigns...... 73 SECTION 11.12. Removal of Trustee...... 63 SECTION 15.09. Headings for Convenience Only...... 73 SECTION 11.13. Appointment of Successor Trustee ...... 63 SECTION 15.10. Counterparts...... 73 SECTION 11.14. Qualification of Successor ...... 64 SECTION 15.11. Appendices and Exhibits...... 73 SECTION 11.15. Instruments of Succession...... 64 SECTION 11.16. Merger of Trustee ...... 64 EXHIBIT A - LEGAL DESCRIPTION OF DISTRICT ...... A-1 SECTION 11.17. Extension of Rights and Duties of Trustee to Paying Agent and Registrar ...... 64 EXHIBIT B - DESCRIPTION OF THE PROJECT...... B-1 SECTION 11.18. Resignation of Paying Agent or Registrar ...... 64 SECTION 11.19. Removal of Paying Agent or Registrar...... 65 EXHIBIT C - FORM OF BOND...... C-1 SECTION 11.20. Appointment of Successor Paying Agent or Registrar ...... 65 EXHIBIT D - FORM OF REQUISITION...... D-1 SECTION 11.21. Qualifications of Successor Paying Agent or Registrar...... 65 SECTION 11.22. Judicial Appointment of Successor Paying Agent or Registrar...... 65 SECTION 11.23. Acceptance of Duties by Successor Paying Agent or Registrar...... 66 SECTION 11.24. Successor by Merger or Consolidation...... 66

ARTICLE XII ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP OF BONDS

C-3 SECTION 12.01. Acts of Bondholders; Evidence of Ownership of Bonds...... 67

ARTICLE XIII AMENDMENTS AND SUPPLEMENTS SECTION 13.01. Amendments and Supplements Without Bondholders’ Consent ...... 68 SECTION 13.02. Amendments With Bondholders’ Consent ...... 68 SECTION 13.03. Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel...... 68

ARTICLE XIV DEFEASANCE SECTION 14.01. Defeasance ...... 70 SECTION 14.02. Deposit of Funds for Payment of Bonds...... 70

ARTICLE XV MISCELLANEOUS PROVISIONS SECTION 15.01. Limitations on Recourse ...... 72 SECTION 15.02. Payment Dates ...... 72 SECTION 15.03. No Rights Conferred on Others ...... 72 iv v THIS MASTER TRUST INDENTURE, dated as of July 1, 2004 (the “Master the terms of the corresponding Credit Facility Agreement, all in the manner hereinafter provided, Indenture”), by and between MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT and the Issuer further hereby agrees with and covenants unto the Trustee as follows: (the “Issuer”), a local unit of special-purpose government organized and existing under the laws of the State of Florida, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (together with any bank or trust company becoming successor trustee under the Master Indenture being hereinafter referred to as the “Trustee”);

W I T N E S S E T H:

WHEREAS, the Issuer is a local unit of special purpose government duly organized and existing under the provisions of the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended (the “Act”), by Ordinance No. 03-271 of the Board of County Commissioners of Miami-Dade County, Florida, effective on December 26, 2003, for the purpose, among other things, of financing and managing the acquisition and construction, maintenance, and operation of the major infrastructure within and without the boundaries of the premises to be governed by the Issuer; and

WHEREAS, the premises to be governed by the Issuer (as further described in Exhibit A hereto, the “District Lands”) consist of approximately 57 acres of land located entirely within The City of Miami, Florida (the “City”); and

WHEREAS, the Issuer has determined to undertake, in one or more stages, the acquisition and construction of certain master infrastructure consisting of roadways, water and sewer facilities, a stormwater management system, streetscape and landscape, and a parking garage pursuant to the Act for the special benefit of the District Lands (as further described in Exhibit B hereto, the “Project”); and C-4 WHEREAS, the Issuer proposes to finance the cost of acquisition and construction of the Project by the issuance of one or more series of bonds pursuant to this Master Indenture;

NOW, THEREFORE, THIS MASTER INDENTURE WITNESSETH, that to provide for the issuance of Bonds under this Master Indenture, as supplemented from time to time by one or more Supplemental Indentures, the security and payment of the principal, redemption or purchase price thereof (as the case may be) and interest thereon, any reimbursement due to a Credit Facility Issuer (hereinafter defined), if any, for any drawing on its Credit Facility (hereinafter defined), as required under the terms of the corresponding Credit Facility Agreement (hereinafter defined), the rights of the Owners of the Bonds of a Series and the performance and observance of all of the covenants contained herein and in said Bonds and in any Credit Facility Agreement for and in consideration of the mutual covenants herein contained and of the purchase and acceptance of the Bonds of a Series by the Owners thereof, from time to time, the issuance by any Credit Facility Issuer of its Credit Facility, from time to time, and of the acceptance by the Trustee of the trusts hereby created, and intending to be legally bound hereby, the Issuer hereby assigns, transfers, sets over and pledges to the Trustee and grants a lien on all of the right, title and interest of the Issuer in and to the Pledged Revenues (hereinafter defined) as security for the payment of the principal, redemption or purchase price of (as the case may be) and interest on Bonds of a Series issued hereunder and any reimbursement due to any Credit Facility Issuer for any drawing on its Credit Facility issued with respect to any such Bonds, as required under 2 ARTICLE I “Bond Counsel” shall mean Counsel of nationally recognized standing in matters pertaining to the exclusion from gross income for federal income tax purposes of interest on DEFINITIONS obligations issued by states and their political subdivisions.

In this Master Indenture and any indenture supplemental hereto (except as otherwise “Bondholder”, “Holder of Bonds”, “Holder” or “Owner” or any similar term shall mean expressly provided or unless the context otherwise requires) terms defined in the recitals hereto any Person or Persons who shall be the registered owner of any Outstanding Bond or Bonds, as shall have the same meaning throughout the Master Indenture, and in addition, the following evidenced on the Bond Register of the Issuer kept by the Registrar. terms shall have the meanings specified below: “Bond Redemption Fund” shall mean each Fund so designated which is established “Account” shall mean any account established pursuant to the Indenture. pursuant to Section 6.06 hereof.

“Acquisition Agreements” shall mean one or more Improvement Acquisition Agreements “Bond Register”, shall have the meaning specified in Section 2.04 of this Master among the Issuer and the Developer, pursuant to which the Developer agrees to provide, design, Indenture. construct and sell to the Issuer, and the Issuer agrees to purchase from the Developer, certain improvements comprising a portion of the Project. “Business Day” shall mean any day other than a Saturday or Sunday or legal holiday or a day on which the principal office of the Issuer, the Trustee, the Registrar or any Paying Agent is “Act” shall mean the Uniform Community Development District Act of 1980, Chapter closed. 190, Florida Statutes, as amended from time to time, and any successor statute thereto. “Certified Public Accountant” shall mean a Person, who shall be Independent, appointed “Annual Budget” shall mean the Issuer’s budget of current operating and maintenance by the Board, actively engaged in the business of public accounting and duly certified as a expenses for the Project for a Fiscal Year, adopted pursuant to the provisions of Section 9.20 of certified public accountant under the laws of the State. this Master Indenture, as the same may be amended from time to time. “Certified Resolution” or “Certified Resolution of the Issuer” shall mean a copy of one or “Authenticating Agent”, shall mean the agent so described in Section 2.03 hereof. more resolutions certified by the Secretary or an Assistant Secretary of the Issuer, under its seal, to have been duly adopted by the Board and to be in full force and effect as of the date of such “Authorized Denomination” shall mean, with respect to a series of Bonds, initially a certification.

C-5 denomination of $100,000 and integral multiples of $5,000 in excess thereof and thereafter a denomination of $5,000 and integral multiples thereof. “City” shall mean the City of Miami, Florida.

“Authorized Newspaper” shall mean a newspaper printed in English and customarily “Code” shall mean the Internal Revenue Code of 1986, as amended. published at least once a day at least five days a week and generally circulated in New York, New York, or such other cities as the Issuer from time to time may determine by written notice “Community Redevelopment Agency” shall mean a community redevelopment agency provided to the Trustee. When successive publications in an Authorized Newspaper are established by the City pursuant to the Redevelopment Act, with such powers delegated to it by required, they may be made in the same or different Authorized Newspapers. the County pursuant to the Redevelopment Act.

“Board” shall mean the board of supervisors of the Issuer. “Completion Date” shall have the meaning given to such term in Section 5.01 of this Master Indenture. “Bonds” shall mean the Midtown Miami Community Development District Special Assessment Bonds and the Midtown Miami Community Development District Special “Consultant” shall mean a Person, who shall be Independent, appointed by the Board, Assessment and Revenue Bonds, issued in one or more Series and delivered pursuant to the qualified to pass upon questions relating to municipal entities and having a favorable reputation provisions of this Master Indenture and Bonds subsequently issued to refund all or a portion of for skill and experience in the financial affairs of municipal entities. the Bonds or issued for the completion of a Project. “Bonds” may include obligations issued by the Issuer in repayment of loans from the County derived from the proceeds of a loan by the U.S. “Consultant’s Certificate” shall mean a certificate or a report prepared in accordance with Department of Housing and Urban Development to the County under Section 108 of the Housing then applicable professional standards duly executed by a Consultant. and Community Development Act of 1974. “Consulting Engineer” shall mean the Independent engineer or engineering firm or corporation at the time employed by the Issuer under the provisions of Section 9.21 of this 3 4 Master Indenture to perform and carry out duties imposed on the Consulting Engineer by the (m) the discount, if any, on the sale or exchange of Bonds; Indenture. The Independent engineer or engineering firm or corporation at the time serving as the engineer to the District may serve as Consulting Engineer under the Indenture. (n) amounts required to repay temporary or bond anticipation loans made to finance any costs permitted under the Act; “Continuing Disclosure Agreement” shall mean a Continuing Disclosure Agreement, by and between the Issuer, the Developer and Digital Assurance Certification, L.L.C., as (o) costs of prior improvements performed by the Issuer in anticipation of the dissemination agent in connection with the issuance of a Series of Bonds hereunder, pursuant to Project; the requirements of the Rule. (p) costs incurred to enforce remedies against contractors, subcontractors, any “Cost” or “Costs”, in connection with the Project or any portion thereof, shall mean all provider of labor, material, services, or any other Person, for a default or breach under the expenses which are properly chargeable thereto under Generally Accepted Accounting Principles corresponding contract, or in connection with any other dispute; or which are incidental to the planning, financing, acquisition, construction, reconstruction, equipping and installation thereof, including, without limiting the generality of the foregoing: (q) premiums for contract bonds and insurance during construction and costs on account of personal injuries and property damage in the course of construction and (a) expenses of determining the feasibility or practicability of acquisition, insurance against the same; construction, or reconstruction; (r) payments, contributions, dedications, and any other exactions required as a (b) cost of surveys, estimates, plans, and specifications; condition to receive any government approval or permit necessary to accomplish any District purpose; (c) cost of improvements; (s) administrative expenses; (d) engineering, architectural, fiscal, legal, accounting and other professional and advisory expenses and charges; (t) taxes, assessments and similar governmental charges during construction or reconstruction of the Project; (e) cost of all labor, materials, machinery, and equipment (including, without limitation, (i) amounts payable to contractors, builders and materialmen and costs (u) expenses of Project construction, management and supervision;

C-6 incident to the award of contracts and (ii) the cost of labor, facilities and services furnished by the Issuer and its employees, materials and supplies purchased by the Issuer (v) costs of effecting compliance with any and all governmental permits and permits and licenses obtained by the Issuer); relating to the Project;

(f) cost of all lands, properties, rights, easements, and franchises acquired; (w) such other expenses as may be necessary or incidental to the acquisition, construction, or reconstruction of the Project or to the financing thereof; and (g) financing charges; (x) any other “cost” or expense as provided by the Act. (h) creation of initial reserve and debt service funds; In connection with the refunding or redeeming of any Bonds, “Cost” includes, without limiting (i) working capital; the generality of the foregoing, the items listed in (d), (k), (l) and (m) above, and other expenses related to the redemption of the Bonds to be redeemed and the Redemption Price of such Bonds (j) interest charges incurred or estimated to be incurred on money borrowed (and the accrued interest payable on redemption to the extent not otherwise provided for). prior to and during construction and acquisition and for such reasonable period of time Whenever Costs are required to be itemized, such itemization shall, to the extent practicable, after completion of construction or acquisition as the Board may determine; correspond with the items listed above. Whenever Costs are to be paid hereunder, such payment may be made by way of reimbursement to the Issuer or any other Person who has paid the same (k) the cost of issuance of Bonds, including, without limitation, in addition to direct payment of Costs. advertisements and printing; “Counsel” shall mean an attorney-at-law or law firm (who may be counsel for the Issuer) (l) the cost of any election held pursuant to the Act and all other expenses of not unsatisfactory to the Trustee. issuance of bonds; 5 6 “County” shall mean Miami-Dade County, Florida. thereof in lieu of or in partial substitution for cash or securities on deposit therein, which letter or line of credit constitutes an unconditional senior obligation of the issuer thereof. The issuer of “Credit Facility” shall mean any credit enhancement mechanism such as an irrevocable such letter or line of credit shall be a banking association, bank or trust company or branch letter of credit, a surety bond, a policy of municipal bond insurance, a corporate or other thereof whose senior debt obligations ranking pari passu with its obligations under such letter or guaranty, a purchase agreement, a credit agreement or deficiency agreement or other similar line of credit are rated at the time of deposit of the letter or line of credit to the credit of the Debt facility applicable to the Bonds, as established pursuant to a Supplemental Indenture, pursuant to Service Reserve Fund or any account thereof in the highest rating category of both Moody’s and which the entity providing such facility agrees to provide funds to make payment of the principal S&P, unless otherwise approved by the Credit Facility Issuer who has issued a municipal bond of and interest on the Bonds. Notwithstanding anything to the contrary contained in the insurance policy with respect to the Bonds. Indenture, the Bonds may be issued without a Credit Facility; the decision to provide a Credit Facility in respect of any Bonds shall be within the absolute discretion of the Issuer. “Debt Service Reserve Requirement” shall mean, for each Series of Bonds, unless a different requirement shall be specified in a Supplemental Indenture, an amount equal to the “Credit Facility Agreement” shall mean any agreement pursuant to which a Credit lesser of (i) the maximum annual Debt Service Requirements (on an annual basis) for the Facility Issuer issues a Credit Facility. Outstanding Bonds of such Series, (ii) 125% of the average annual Debt Service Requirements for the Outstanding Bonds of such Series, and (iii) 10% of the original proceeds (within the “Credit Facility Issuer” shall mean the issuer or guarantor of any Credit Facility. meaning of the Code) of the Bonds of such Series.

“Debt Service Fund” shall mean the Fund so designated which is established pursuant to “Defeasance Securities” shall mean, to the extent permitted by law, (a) cash or (b) non- Section 6.04 hereof. callable Government Obligations.

“Debt Service Requirements”, with reference to a specified period, shall mean: “Developer” shall mean, collectively, Midtown Partners, LLC and DDR Miami Avenue, LLC, and any entity or entities which succeed to all or any part of the interests and assume any (a) interest payable on the Bonds during such period, subject to reduction for or all of the responsibilities of said entities. amounts held as capitalized interest in the Funds and Accounts established under the Indenture; and “District Lands” or “District” shall mean the premises governed by the Issuer, consisting of approximately 57 acres of land located entirely within the City, as more fully described in (b) amounts required to be paid into any mandatory sinking fund account with Exhibit A hereto. C-7 respect to the Bonds during such period; and “District Manager” shall mean the then District Manager or acting District Manager of (c) amounts required to pay the principal of the Bonds maturing during such the Issuer. period and not to be redeemed prior to or at maturity through any sinking fund account. “Economic Incentive Payments” shall mean the payments paid by the County and the “Debt Service Reserve Fund” shall mean the Fund so designated which is established City to the Issuer under the Interlocal Agreement and deposited in the Revenue Fund pursuant to pursuant to Section 6.05 hereof. Section 6.03 of this Indenture.

“Debt Service Reserve Insurance Policy” shall mean the insurance policy, surety bond or “Event of Default” shall mean any of the events described in Section 10.01 hereof. other evidence of insurance, if any, deposited to the credit of the Debt Service Reserve Fund or any account thereof in lieu of or in partial substitution for cash or securities on deposit therein, “Fiscal Year” shall mean the period of twelve (12) months beginning October 1 of each which policy, bond or the evidence of insurance constitutes an unconditional senior obligation of calendar year and ending on September 30 of the following calendar year, and also shall mean the issuer thereof. The issuer thereof shall be a municipal bond insurer whose obligations the period from actual execution hereof to and including the next succeeding September 30; or ranking pari passu with its obligations under such policy, bond or other evidence of insurance such other consecutive twelve-month period as may hereafter be established pursuant to a are rated at the time of deposit of such policy, bond or other evidence of insurance to the credit Certified Resolution as the fiscal year of the Issuer for budgeting and accounting purposes as of the Debt Service Reserve Fund or any account thereof in the highest rating category of both authorized by law. Moody’s and S&P, unless otherwise approved by the Credit Facility Issuer who has issued a municipal bond insurance policy with respect to the Bonds. “Fund” shall mean any fund established pursuant to this Master Indenture.

“Debt Service Reserve Letter of Credit” shall mean the irrevocable, transferable letter or “Generally Accepted Accounting Principles” shall mean those accounting principles line of credit, if any, deposited for the credit of the Debt Service Reserve Fund or any account applicable in the preparation of financial statements of municipalities. 7 8 “Government Obligations” shall mean direct obligations of, or obligations the timely Housing Administration; Federal Financing Bank; Resolution Funding Corporation payment of principal of and interest on which are unconditionally guaranteed by, the United (REFCORP) interest strips only; Agency for International Development; or the Overseas States of America. Private Investment Corporation.

“Indenture” shall mean, with respect to any Series of Bonds, this Master Indenture as (c) Direct and general obligations of any state of the United States, to the supplemented by the Supplemental Indenture pursuant to which such Series of Bonds is issued. payment of the principal of and interest on which the full faith and credit of such state is pledged, if at the time of their purchase such obligations are rated in either of the two “Independent” shall mean a Person who is not a member of the Issuer’s Board, an officer highest rating categories by either S&P or Moody’s; or employee of the Issuer or the Developer, or which is not a partnership, corporation or association having a partner, director, officer, member or substantial stockholder who is a (d) Negotiable or non-negotiable certificates of deposit, time deposits or other member of the Issuer’s Board, or an officer or employee of the Issuer; provided, however, that similar banking arrangements issued by any bank or trust company, including the the fact that such Person is retained regularly by or regularly transacts business with the Issuer or Trustee, or any federal savings and loan association, the deposits of which are insured by the Developer shall not make such Person an employee within the meaning of this definition. the Federal Deposit Insurance Corporation (including the FDIC’s Savings Association Insurance Fund), which securities, to the extent that the principal thereof exceeds the “Interest Account” shall mean each Account so designated, established as a separate maximum amount insurable by the Federal Deposit Insurance Corporation and, therefore, account within the Debt Service Fund pursuant to Section 6.04 hereof. are not so insured, shall be fully secured to the extent permitted by law as to principal and interest by the securities listed in subsections (a), (b) or (c) above; provided, however, “Interest Payment Date” shall mean each May 1 and November 1 commencing on the that with respect to securities used to secure securities hereunder, in addition to direct and date specified in the Certified Resolution of the Issuer or in the Supplemental Indenture pursuant general obligations of any state of the United States, Investment Securities shall include to which a Series of Bonds is issued. direct and general obligations of any political subdivision or instrumentality of any such state, to the payment of the principal of and interest on which the full faith and credit of “Interest Period” shall mean the period from and including any Interest Payment Date to such subdivision or instrumentality is pledged if such obligations are initially rated “A” and excluding the next succeeding Interest Payment Date; provided, however, that upon final or higher by either S&P or Moody’s; payment of any Bond at maturity or upon redemption or mandatory purchase, the Interest Period shall extend to, but not include, the date of such final payment, which shall always be a Business (e) Bank or broker repurchase agreements fully secured by securities Day. specified in (a) or (b) above, which may include repurchase agreements with the C-8 commercial banking department of the Trustee, provided that such securities are “Interlocal Agreement” shall mean one or more Interlocal Agreement(s) by and among deposited with the Trustee, with a Federal Reserve Bank or with a bank or trust company the City, the County and the Issuer, entered into pursuant to Section 163.01, Florida Statutes. (other than the seller of such securities) having a combined capital and surplus of not less than $100,000,000; “Interlocal Agreement Revenues” shall mean, collectively, the Economic Incentive Payments and the Tax Increment Revenues. (f) A promissory note of a bank holding company rated “AA” or better by either S&P or Moody’s; “Investment Securities” shall mean and include any of the following securities, if and to the extent the same are at the time legal investments for funds of the Issuer: (g) Investment agreements with a bank, insurance company or other financial institution, or the subsidiary of a bank, insurance company or other financial institution if (a) Government Obligations; the parent guarantees the investment agreement, which bank, insurance company, (b) Bonds, debentures, notes or other evidences of indebtedness issued by any financial institution or parent (i) has an unsecured, uninsured and unguaranteed obligation of the following agencies or such other government-sponsored agencies which may (or claims-paying ability) rated in the highest short-term rating category by Moody’s or presently exist or be hereafter created; provided that, such bonds, debentures, notes or S&P (if the term of such agreement does not exceed 365 days), or (ii) has an unsecured, other evidences of indebtedness are fully guaranteed as to both principal and interest by uninsured and unguaranteed obligation (or claims-paying ability) rated in one of the three the United States of America: Export-Import Bank; Farm Credit System Financial highest rating categories by Moody’s or S&P (provided that the term of such agreement Assistance Corporation; Rural Economic Community Development Administration is not less than 366 days nor more than twenty-four (24) months) or (iii) has an (formerly the Farmers Home Administration); General Services Administration; U.S. unsecured, uninsured and unguaranteed obligation (or claims paying ability) rated in one Maritime Administration; Small Business Administration; Government National of the two highest rating categories by Moody’s or S&P (if the term of such agreement is Mortgage Association; U.S. Department of Housing & Urban Development; Federal more than twenty-four (24) months) or is the lead bank of a parent bank holding company 9 10 with an uninsured, unsecured and unguaranteed obligation of the aforesaid ratings, “Major Non-Recurring Expense” shall mean the cost of major replacement or provided: reconstruction of the Project, or any part thereof, the cost of major repairs, renewals or replacements, the provision of a reserve for the payment of insurance premiums not due on an (A) interest is paid at least semiannually at a fixed rate (subject to adjustments annual or more frequent basis, and the cost of studies, surveys, estimates and investigations in for yield restrictions required by the Code) during the entire term of the connection with any of the foregoing. agreement, consistent with the Interest Payment Dates; “Master Indenture” shall mean, this Master Trust Indenture dated as of July 1, 2004, by (B) moneys invested thereunder may be withdrawn without penalty, premium, and between the Issuer and the Trustee, as supplemented from time to time in accordance with or charge upon not more than two days’ notice unless otherwise specified the provisions of Article XIII hereof. in a Supplemental Indenture; “Moody’s” shall mean Moody’s Investors Service, Inc., a corporation organized and (C) the same guaranteed interest rate will be paid on any future deposits made existing under the laws of the State of Delaware, its successors and their assigns, and, if such to restore the account to its required amount; and corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized (D) the Trustee receives an opinion of counsel that such agreement is an securities rating agency designated by the Issuer and acceptable to the Trustee. enforceable obligation of such insurance company, bank, financial institution or parent; “Officers’ Certificate” or “Officer’s Certificate” shall mean a certificate, duly executed by a Responsible Officer and delivered to the Trustee. (h) Any short term government fund whose assets consist of (a), (b) and (c) above; “Outstanding”, in connection with a Series of Bonds, shall mean, as of the time in question, all Bonds of such Series authenticated and delivered under the Indenture, except: (i) Commercial paper which at the time of purchase is rated in the highest rating category by either S&P or Moody’s; (a) all Bonds theretofore cancelled or required to be cancelled under Section 2.07 hereof; (j) (A) certificates evidencing a direct ownership interest in non-callable Government Obligations or in future interest or principal payments thereon held in a (b) Bonds for the payment, redemption or purchase of which moneys and/or

C-9 custody account by a custodian satisfactory to the Trustee, and (B) obligations of any Defeasance Securities, the principal of and interest on which, when due, will provide state of the United States of America or any political subdivision, public instrumentality sufficient moneys to fully pay such Bonds in accordance with Article XIV hereof, shall or public authority of any such state which are not subject to redemption prior to the date have been or shall concurrently be deposited with the Trustee; provided that, if such on which the proceeds attributable to the principal of such obligations are to be used and Bonds are being redeemed, the required notice of redemption shall have been given or which are fully secured by and payable solely from non-callable Government Obligations provision shall have been made therefor, and that if such Bonds are being purchased, held pursuant to an escrow agreement satisfactory to the Trustee, provided that such there shall be a firm commitment for the purchase and sale thereof; and obligations shall be rated in the highest rating category of either Moody’s or S&P; (c) Bonds in substitution for which other Bonds have been authenticated and (k) shares of an open-end, diversified investment company which is registered delivered pursuant to Article II hereof. under the Investment Company Act of 1940, as amended, and which invests its assets in any of the securities described in clauses (a), (b) or (c) hereof; In determining whether the Holders of a requisite aggregate principal amount of Bonds Outstanding have concurred in any request, demand, authorization, direction, notice, consent or (l) shares of any open-end, SEC-registered money market mutual funds waiver under the provisions of the Indenture, Bonds which are known by the Trustee to be held which fund invests its assets in any of the securities described in clauses (a), (b) or (c) on behalf of the Issuer shall be disregarded for the purpose of any such determination; provided, hereof; and however, this provision does not affect the right of the Trustee to deal in Bonds as set forth in Section 11.09 hereof. (m) any other lawful investment as provided in a Supplemental Indenture, for any particular series of Bonds. “Participating Underwriter” shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. “Issuer” shall mean Midtown Miami Community Development District.

11 12 “Paying Agent” shall mean initially, Wachovia Bank, National Association, and “Redemption Price” shall mean the principal amount of any Bond plus the applicable thereafter any successor thereto appointed in accordance with Section 11.20 of this Master premium, if any, payable upon redemption thereof pursuant to the Indenture. Indenture. “Redevelopment Act” shall mean Chapter 163, Part III, Florida Statutes, as amended . “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, governmental body, political subdivision, “Registrar” shall mean initially Wachovia Bank, National Association, which entity shall municipality, municipal authority or any other group or organization of individuals. have the responsibilities set forth in Section 2.04 of this Master Indenture, and thereafter any successor thereto appointed in accordance with Section 11.20 of this Master Indenture. “Pledged Revenues” shall mean, with respect to a particular Series of Bonds Outstanding, (a) all Interlocal Agreement Revenues received by the Issuer with respect to such Series of “Regular Record Date” shall mean the fifteenth day (whether or not a Business Day) of Bonds, (b) all revenues received by the Issuer from Special Assessments levied and collected on the calendar month next preceding each Interest Payment Date. all or a portion of the District Lands with respect to such Series of Bonds, including, without limitation, amounts received from any foreclosure proceeding for the enforcement of collection “Regulatory Body” shall mean and include (a) the United States of America and any of such Special Assessments or from the issuance and sale of tax certificates with respect to such department of or corporation, agency or instrumentality heretofore or hereafter created, Special Assessments, and (c) all moneys on deposit in the Funds and Accounts established under designated or established by the United States of America, (b) the State, any political subdivision the Indenture; provided, however, that Pledged Revenues shall not include (i) any moneys thereof and any department of or corporation, agency or instrumentality heretofore or hereafter transferred to the Rebate Fund, or investment earnings thereon and (ii) “special assessments” created, designated or established by the State, (c) the County and any department of or levied and collected by the Issuer under Section 190.022 of the Act for maintenance purposes or corporation, agency or instrumentality heretofore or hereafter created, designated or established “maintenance special assessments” levied and collected by the Issuer under Section 190.021(3) by the County, and (d) any other public body, whether federal, state or local or otherwise having of the Act (it being expressly understood that the lien and pledge of the Indenture shall not apply regulatory jurisdiction and authority over the Issuer. to any of the moneys described in the foregoing clauses (i) and (ii) of this proviso). “Responsible Officer” shall mean any member of the Board or any other officer of the “Principal Account” shall mean each Account so designated, established as a separate Issuer or other person designated by Certified Resolution of the Issuer, a copy of which shall be Account within the Debt Service Fund pursuant to Section 6.04 hereof. on file with the Trustee, to act for any of the foregoing, either generally or with respect to the execution of any particular document or other specific matter.

C-10 “Project” shall mean with respect to any Series of Bonds, the portion or portions of certain master infrastructure consisting of roadways, water and sewer facilities, a stormwater “Revenue Fund” shall mean the Fund so designated which is established pursuant to management system, streetscape and landscape, and a parking garage to be acquired and/or Section 6.03 hereof. constructed by the Issuer, whether within or outside the District Lands, all as more specifically described in the Supplemental Indenture relating to such Series of Bonds; provided that a Project “Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange shall specially benefit all of the District Lands on which Special Assessments to secure such Commission under the Securities Exchange Act of 1934, as the same may be amended from time Series of Bonds have been levied. to time.

“Property Appraiser” shall mean the property appraiser of the County. “S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, “Property Appraiser and Tax Collector Agreement” shall mean the Property Appraiser its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall and Tax Collector Agreement described in Section 9.04 hereof. no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer and acceptable “Rebate Fund” shall mean the Fund, if any, so designated, which is established pursuant to the Trustee. to an arbitrage rebate agreement, into which shall be deposited certain moneys in accordance with the provisions of said arbitrage rebate agreement. “Series” shall mean all of the Bonds authenticated and delivered at one time on original issuance and pursuant to any Certified Resolution of the Issuer authorizing such Bonds as a “Record Date” shall mean, as the case may be, the applicable Regular or Special Record separate Series of Bonds, or any Bonds thereafter authenticated and delivered in lieu of or in Date. substitution for such Bonds pursuant to Article II hereof and the applicable Supplemental Indenture, regardless of variations in maturity, interest rate or other provisions; provided, however, two or more Series of Bonds may be issued simultaneously under the same

13 14 Supplemental Indenture if designated as separate Series of Bonds by the Issuer upon original Vice Chairman and the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary issuance. Two or more Series of Bonds may be issued simultaneously under separate or Responsible Officer of the Issuer. Supplemental Indentures, but under this Master Indenture. All words and terms importing the singular number shall, where the context requires, “Sinking Fund Account” shall mean each Account so designated, established as a import the plural number and vice versa. separate account within the Debt Service Fund pursuant to Section 6.04 hereof. [END OF ARTICLE I] “Special Assessments” shall mean (a) the net proceeds derived from the levy and collection of “special assessments”, as provided for in Sections 190.011(14) and 190.022 of the Act (except for any such special assessments levied and collected for maintenance purposes), against the lands located within the District that are subject to assessment as a result of a particular Project or any portion thereof, and (b) the net proceeds derived from the levy and collection of “benefit special assessments”, as provided for in Section 190.021(2) of the Act, against the lands within the District that are subject to assessment as a result of a particular Project or any portion thereof, and in the case of both “special assessments” and “benefit special assessments”, including the interest and penalties on such assessments, pursuant to all applicable provisions of the Act and Chapter 170, Florida Statutes, and Chapter 197, Florida Statutes (and any successor statutes thereto), including, without limitation, any amount received from any foreclosure proceeding for the enforcement of collection of such assessments or from the issuance and sale of tax certificates with respect to such assessments, less (to the extent applicable) the fees and costs of collection thereof payable to the Tax Collector and less certain administrative costs payable to the Property Appraiser pursuant to the Property Appraiser and Tax Collector Agreement. “Special Assessments” shall not include “maintenance special assessments” levied and collected by the Issuer under Section 190.021(3) of the Act.

C-11 “Special Record Date” shall mean such date as shall be fixed for the payment of defaulted interest on the Bonds in accordance with Section 2.01 hereof.

“State” shall mean the State of Florida.

“Supplemental Indenture” and “indenture supplemental hereto” shall mean any indenture amending or supplementing this Master Indenture which may be entered into in accordance with the provisions of this Master Indenture.

“Tax Collector” shall mean the tax collector of the County.

“Tax Increment Revenues” shall mean the monies received by the Issuer from the Community Redevelopment Agency under the Interlocal Agreement and deposited in the Revenue Fund pursuant to Section 6.03 of this Indenture.

The words “hereof”, “herein”, “hereto”, “hereby”, and “hereunder” (except in the form of Bond), refer to the entire Master Indenture.

Every “request”, “requisition”, “order”, “demand”, “application”, “notice”, “statement”, “certificate”, “consent”, or similar action hereunder by the Issuer shall, unless the form or execution thereof is otherwise specifically provided, be in writing signed by the Chairman or a

15 16 ARTICLE II to the date of proposed payment. The Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class, postage- THE BONDS prepaid, to each Owner of record as of the fifth (5th) day prior to such mailing, at his address as it appears in the Bond Register not less than ten (10) days prior to such Special Record Date. SECTION 2.01. Amounts and Terms of Bonds; Details of Bonds. The Issuer is The foregoing notwithstanding, any Owner of Bonds of a Series in an aggregate principal hereby authorized to issue in one or more Series pursuant to the terms and conditions of this amount of at least $1,000,000 shall be entitled to have interest paid by wire transfer to such Master Indenture, its obligations to be known as “Midtown Miami Community Development Owner to the bank account number on file with the Trustee and Paying Agent, upon requesting District Special Assessment Bonds” and the “Midtown Miami Community Development District the same in a writing received by the Trustee and Paying Agent at least fifteen (15) days prior to Special Assessment and Revenue Bonds,” (collectively, the “Bonds”). The total principal the relevant Record Date, which writing shall specify the bank, which shall be a bank within the amount of Bonds that may be issued under this Master Indenture is expressly limited to United States, and bank account number to which interest payments are to be wired. Any such $110,000,000 (exclusive of any refunding bonds). The Bonds shall be issued in Authorized request for interest payments by wire transfer shall remain in effect until rescinded or changed, in Denominations and within each Series shall be numbered consecutively from R-1 and upwards a writing delivered by the Owner to the Trustee and Paying Agent, and any such rescission or and in substantially the form attached hereto as Exhibit C, with such appropriate variations, change of wire transfer instructions must be received by the Trustee and Paying Agent at least omissions and insertions as are permitted or required by this Master Indenture or as otherwise fifteen (15) days prior to the relevant Record Date. Interest on the Bonds will be computed on provided in a Supplemental Indenture. All Bonds shall be issued only upon satisfaction of the the basis of a 360-day year of twelve 30-day months. Interest on overdue principal and, to the conditions set forth in Article III hereof; and the Trustee shall, at the Issuer’s request, extent lawful, on overdue interest will be payable at the numerical rate of interest borne by such authenticate such Bonds and deliver them as specified in such request. Bonds on the day before the default occurred.

Each Bond shall be dated, shall have such Interest Payment Dates, shall bear interest The Trustee is hereby constituted and appointed as initial Paying Agent for the Bonds. from such date or dates and at such rate or rates until the maturity thereof, payable on such Interest Payment Dates, and shall be stated to mature (subject to the right of prior redemption), SECTION 2.02. Execution. The Bonds shall be executed by the manual or all as provided in, or pursuant to, a Supplemental Indenture. facsimile signature of the Chairman or Vice Chairman of the Issuer, and the corporate seal of the Issuer shall appear thereon (which may be in facsimile) and shall be attested by the manual or Both the principal of and the interest on the Bonds shall be payable in any coin or facsimile signature of its Secretary or Assistant Secretary. Bonds executed as above provided currency of the United States of America which is legal tender on the respective dates of may be issued and shall, upon request of the Issuer, be authenticated by the Trustee,

C-12 payment thereof for the payment of public and private debts. Unless otherwise provided in notwithstanding that one or both of the officers of the Issuer whose signatures appear on such Section 2.11 hereof or in a Supplemental Indenture, the principal of all Bonds shall be payable at Bonds shall have ceased to hold office at the time of issuance or authentication or shall not have the principal corporate trust office of the Paying Agent upon the presentation and surrender of held office at the date of the Bonds. such Bonds as the same shall become due and payable. SECTION 2.03. Authentication; Authenticating Agent. No Bond shall be valid Except to the extent otherwise provided in Section 2.11 hereof or in a Supplemental until the certificate of authentication shall have been duly executed by the Trustee, and such Indenture, interest on any Bond is payable on any Interest Payment Date by check or draft authentication shall be proof that the Bondholder is entitled to the benefit of the trust hereby mailed on the Interest Payment Date to the person in whose name that Bond is registered at the created. close of business on the Regular Record Date for such Interest Payment Date, at his address as it appears on the Bond Register. The Bonds shall bear interest from the Interest Payment Date next The Trustee shall be entitled to be reimbursed for payments made to any Authenticating preceding the date on which they are authenticated unless authenticated on an Interest Payment Agent as reasonable compensation for its services. Date in which event they shall bear interest from such Interest Payment Date, or unless authenticated before the first Interest Payment Date in which event they shall bear interest from Any corporation into which any Authenticating Agent may be merged or converted or their date; provided, however, that if a Bond is authenticated between a Record Date and the next with which it may be consolidated, or any corporation resulting from any merger, consolidation succeeding Interest Payment Date, such Bond shall bear interest from such succeeding Interest or conversion to which any Authenticating Agent shall be party, or any corporation succeeding Payment Date; provided further, however, that if at the time of authentication of any Bond to the corporate trust business of any Authenticating Agent, shall be the successor of the interest thereon is in default, such Bond shall bear interest from the date to which interest has Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this been paid. Any interest on any Bond which is payable, but is not punctually paid or provided for Section, without the execution or filing of any further act on the part of the parties hereto or the on any Interest Payment Date (hereinafter called “Defaulted Interest”) shall be paid to the Owner Authenticating Agent or such successor corporation. in whose name the Bond is registered at the close of business on a Special Record Date to be fixed by the Trustee, such date to be not more than fifteen (15) nor less than ten (10) days prior 17 18 Any Authenticating Agent may at any time resign by giving written notice of resignation Every substituted Bond issued pursuant to this Section 2.05 shall constitute an additional to the Trustee, the Issuer and any Paying Agent. The Trustee may at any time terminate the contractual obligation of the Issuer, whether or not the Bond alleged to have been destroyed, lost agency of any Authenticating Agent by giving written notice of termination to such or stolen shall be at any time enforceable by anyone, and shall be entitled to all the benefits of Authenticating Agent, the Issuer and any Paying Agent. Upon receiving such a notice of the Indenture equally and proportionately with any and all other Bonds duly issued hereunder. resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section, the Trustee shall promptly appoint a successor All Bonds shall be held and owned upon the express condition that the foregoing Authenticating Agent, shall give written notice of such appointment to the Issuer and the Paying provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost Agent, shall mail a notice of such appointment to all Holders of Bonds as the names and or stolen Bonds, and shall preclude any and all other rights or remedies with respect to the addresses of such Holders appear on the Bond Register. replacement or payment of negotiable instruments, investments or other securities without their surrender. SECTION 2.04. Registration and Registrar. The Trustee is hereby constituted and appointed as the initial Registrar for the Bonds. The Registrar shall act as registrar and transfer SECTION 2.06. Temporary Bonds. Pending preparation of definitive Bonds, or by agent for the Bonds. The Issuer shall cause to be kept at an office of the Registrar a register agreement with the original purchasers of all Bonds, the Issuer may issue and, upon its request, (herein sometimes referred to as the “Bond Register” or “Register”) in which, subject to the the Trustee shall authenticate in lieu of definitive Bonds one or more temporary printed or provisions set forth in Section 2.08 below and such other regulations as the Issuer and Registrar typewritten Bonds of substantially the tenor recited above. Upon request of the Issuer, the may prescribe, the Issuer shall provide for the registration of the Bonds and for the registration of Trustee shall authenticate definitive Bonds in exchange for and upon surrender of an equal transfers and exchanges of such Bonds. The Issuer shall cause the Registrar to designate, by a principal amount of temporary Bonds. Until so exchanged, temporary Bonds shall have the same written notification to the Trustee, a specific office location (which may be changed from time to rights, remedies and security hereunder as definitive Bonds. So long as Cede & Co., or any other time, upon similar notification) at which the Bond Register is kept. nominee of DTC is the registered Owner of the Bonds, the definitive Bonds shall be in typewritten form. The Registrar when it is not also the Trustee, forthwith following each Record Date and at any other time as reasonably requested by the Trustee, certify and furnish to the Trustee, and SECTION 2.07. Cancellation and Destruction of Surrendered Bonds. All Bonds to any Paying Agent as such Trustee shall specify, the names, addresses, and holdings of surrendered for payment or redemption and all Bonds surrendered for exchange shall, at the time Bondholders and any other relevant information reflected in the Bond Register, and the Trustee of such payment, redemption or exchange, be promptly transferred by the Registrar, Paying and any such Paying Agent shall for all purposes be entitled to rely upon the information so Agent or Authenticating Agent to, and cancelled and destroyed by, the Trustee. The Trustee

C-13 furnished to it and shall have no liability or responsibility in connection with the preparation shall deliver to the Issuer a certificate of destruction in respect of all Bonds destroyed in thereof. accordance with this Section.

SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Bonds. If any Bond shall SECTION 2.08. Registration, Transfer and Exchange. As provided in Section 2.04 become mutilated, the Issuer shall execute and the Trustee or Authenticating Agent, as the case hereof, the Issuer shall cause a Bond Register in respect of the Bonds to be kept at the designated may be, shall thereupon authenticate and deliver a new Bond of like Series, tenor and office of the Registrar. denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee or Authenticating Agent, as the case may be, of such mutilated Bond for cancellation, Upon surrender for requisition of transfer of any Bond at the designated office of the and the Issuer and the Trustee or Authenticating Agent, as the case may be, may require Registrar, and upon compliance with the conditions for the transfer of Bonds set forth in this reasonable indemnity therefor. If any Bond shall be reported lost, stolen or destroyed, evidence Section 2.08, the Issuer shall execute and the Trustee (or Registrar or Authenticating Agent as as to the ownership and the loss, theft or destruction thereof shall be submitted to the Issuer and described in Section 2.03 hereof) shall authenticate and deliver, in the name of the designated the Trustee or Authenticating Agent, as the case may be; and if such evidence shall be transferees, one or more new Bonds of a like aggregate principal amount and of the same Series satisfactory to both and indemnity satisfactory to both shall be given, the Issuer shall execute, and maturity. and thereupon the Trustee or Authenticating Agent, as the case may be, shall authenticate and deliver a new Bond of like Series, tenor and denomination. The cost of providing any substitute At the option of the Bondholder, Bonds may be exchanged for other Bonds of a like Bond under the provisions of this Section shall be borne by the Bondholder for whose benefit aggregate principal amount and of the same Series and maturity, upon surrender of the Bonds to such substitute Bond is provided. If any such mutilated, lost, stolen or destroyed Bond shall be exchanged at any such office or agency. Whenever any Bonds are so surrendered for have matured or be about to mature, the Issuer may, with the consent of the Trustee or exchange, the Issuer shall execute and the Trustee (or Registrar or Authenticating Agent as Authenticating Agent, as the case may be, pay to the Owner the principal amount of and accrued described in Section 2.03 hereof) shall authenticate and deliver the Bonds which the Bondholder interest on such Bond upon the maturity thereof and compliance with the aforesaid conditions by making the exchange is entitled to receive. such Owner, without the issuance of a substitute Bond therefor. 19 20 All Bonds issued upon any transfer or exchange of Bonds shall be valid obligations of the trust companies (or any of their designees identified to the Trustee) by overnight delivery, Issuer, evidencing the same debt and entitled to the same benefits under the Indenture as the courier service, telegram, telecopy or other similar means of communication. Bonds surrendered upon such transfer or exchange. So long as there shall be maintained a book-entry-only system with respect to a Series of Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or Bonds, the following provisions shall apply: accompanied by a written instrument of transfer in form satisfactory to the Trustee, Paying Agent or the Registrar, duly executed by the Bondholder or his attorney duly authorized in The Bonds shall initially be registered in the name of Cede & Co. as nominee for DTC, writing. which will act initially as securities depository for the Bonds and so long as the Bonds are held in book-entry-only form, Cede & Co. shall be considered the registered owner for all purposes Transfers and exchanges shall be made without charge to the Bondholder, except that the hereof. On original issue, the Bonds shall be deposited with DTC, which shall be responsible for Issuer or the Trustee may require payment of a sum sufficient to cover any tax or other maintaining a book-entry-only system for recording the ownership interest of its participants governmental charge that may be imposed in connection with any transfer or exchange of Bonds. (“DTC Participants”) and other institutions that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect Participants”). The DTC Neither the Issuer nor the Registrar on behalf of the Issuer shall be required (i) to issue, Participants and Indirect Participants will be responsible for maintaining records with respect to transfer or exchange any Bond during a period beginning at the opening of business fifteen (15) the beneficial ownership interests of individual purchasers of the Bonds (“Beneficial Owners”). days before the day of mailing of a notice of redemption of Bonds selected for redemption and ending at the close of business on the day of such mailing, or (ii) to transfer or exchange any Principal and interest on the Bonds prior to and at maturity shall be payable directly to Bond so selected for redemption in whole or in part. Cede & Co. in care of DTC. Disbursal of such amounts to DTC Participants shall be the responsibility of DTC. Payments by DTC Participants to Indirect Participants, and by DTC SECTION 2.09. Persons Deemed Owners. The Issuer, the Trustee, any Paying Participants and Indirect Participants to Beneficial Owners shall be the responsibility of DTC Agent, the Registrar, or the Authenticating Agent shall deem and treat the person in whose name Participants and Indirect Participants and not of DTC, the Trustee or the Issuer. any Bond is registered as the absolute Owner thereof (whether or not such Bond shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other The Bonds shall initially be issued in the form of one fully registered Bond for each than the Issuer, the Trustee, any Paying Agent, the Registrar or the Authenticating Agent) for the maturity of each Series and shall be held in such form until maturity. Individuals may purchase purpose of receiving payment of or on account of the principal or Redemption Price of and beneficial interests in Authorized Denominations in book-entry-only form, without certificated

C-14 interest on such Bond, and for all other purposes, and the Issuer, the Trustee, any Paying Agent, Bonds, through DTC Participants and Indirect Participants. the Registrar and the Authenticating Agent shall not be affected by any notice to the contrary. All such payments so made to any such Owner, or upon his order, shall be valid and, to the DURING THE PERIOD FOR WHICH CEDE & CO. IS REGISTERED OWNER OF extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys THE BONDS, ANY NOTICES TO BE PROVIDED TO ANY REGISTERED OWNER WILL payable upon any such Bond. BE PROVIDED TO CEDE & CO. DTC SHALL BE RESPONSIBLE FOR NOTICES TO DTC PARTICIPANTS AND DTC PARTICIPANTS SHALL BE RESPONSIBLE FOR NOTICES SECTION 2.10. Limitation on Incurrence of Certain Indebtedness. The Issuer will TO INDIRECT PARTICIPANTS, AND DTC PARTICIPANTS AND INDIRECT not issue Bonds, except upon the conditions and in the manner provided or as otherwise PARTICIPANTS SHALL BE RESPONSIBLE FOR NOTICES TO BENEFICIAL OWNERS. permitted in the Indenture, provided that the Issuer may enter into agreements with issuers of Credit Facilities which involve liens on Pledged Revenues on a parity with that of the Bonds or The Issuer and the Trustee shall enter into a blanket letter of representations with DTC portion thereof which is supported by such Credit Facilities. providing for such book-entry-only system. Such agreement may be terminated at any time by either DTC or the Issuer, in accordance with the DTC blanket letter of representations. In the SECTION 2.11. Qualification for The Depository Trust Company. To the extent event of such termination, the Issuer shall select another securities depository. If the Issuer does provided in a Supplemental Indenture or authorized and directed by a Resolution of the Issuer not replace DTC, the Trustee will register and deliver to the Beneficial Owners replacement authorizing the issuance of a Series of Bonds, the Trustee shall be authorized to enter into Bonds in the form of fully registered Bonds in accordance with the instructions from Cede & Co. agreements with The Depository Trust Company, New York, New York (“DTC”) and other depository trust companies, including, but not limited to, agreements necessary for wire transfers In the event DTC, any successor of DTC or the Issuer elects to discontinue the book- of interest and principal payments with respect to the Bonds, utilization of electronic book entry entry only system, the Trustee shall deliver bond certificates in accordance with the instructions data received from DTC, and other depository trust companies in place of actual delivery of from DTC or its successor and after such time Bonds may be exchanged for an equal aggregate Bonds and provision of notices with respect to Bonds registered by DTC and other depository principal amount of Bonds in other Authorized Denominations and of the same maturity and Series upon surrender thereof at the designated corporate trust office of the Trustee. 21 22 ARTICLE III Act to undertake the Project, subject to obtaining such licenses, orders or other authorizations as are, at the date of such opinion, required to be obtained from any ISSUE OF BONDS agency or regulatory body; (b) that the Special Assessment proceedings have been taken in accordance with Florida law and that the Issuer has taken all action necessary to levy SECTION 3.01. Issue of Bonds. Subject to the provisions of Section 2.01 hereof, and impose the Special Assessments; (c) that the Special Assessments are legal, valid, the Issuer may issue one or more Series of Bonds hereunder and under Supplemental Indentures and binding liens upon the property against which the Special Assessments are made, from time to time for the purpose of financing the Cost of acquisition, construction, and/or coequal with the lien of all state, county, Issuer and municipal ad valorem taxes and equipping of a Project, to refund all or a portion of a Series of Bonds or for the completion of a superior in priority to all other liens, titles and claims against said property then existing Project (and to pay the costs of the issuance of such Bonds and to pay the amounts required to be or thereafter created, until paid; (d) the related Indenture has been duly and validly deposited with respect to such Bonds in the Funds and Accounts established under the authorized, approved, and executed by the Issuer; (e) the issuance of the Series of Bonds Indenture). In connection with the issuance of a Series of Bonds the Trustee shall, at the request has been duly authorized and approved by the Board; and (f) the related Indenture of the Issuer, authenticate the Bonds and deliver or cause them to be authenticated and delivered, (assuming due authorization, execution and delivery by the Trustee) constitutes a binding as specified in the request, but only upon receipt of: obligation of the Issuer, enforceable against the Issuer in accordance with its terms except as enforcement thereof may be affected by bankruptcy, reorganization, insolvency, (1) a Certified Resolution of the Issuer (a) approving a Supplemental moratorium and other similar laws relating to creditors’ rights generally and subject to Indenture under which the Series of Bonds are to be issued; (b) providing the terms of the equitable principles, whether in a proceeding at law or in equity (clauses (c) and (d) shall Bonds and directing the payments to be made into the Funds and Accounts in respect not apply in the case of the issuance of a refunding Series of Bonds); thereof as provided in Article VI hereof; (c) authorizing the execution and delivery of the Series of Bonds to be issued; and (d) if the purpose is to effectuate a refunding, (4) a Consulting Engineer’s certificate addressed to the Issuer and the Trustee authorizing the redemption, if any, of the Bonds to be refunded and the defeasance setting forth the estimated cost of the Project, and in the case of an acquisition by the thereof, and the execution and delivery of an escrow agreement, if applicable, and other Issuer of all or a portion of the Project that has been completed, stating, in the signer’s matters contained in Section XIV hereof; opinion, (a) that the portion of the Project improvements to be acquired from the proceeds of such Bonds have been completed in accordance with the plans and (2) a written opinion or opinions of Counsel to the Issuer, addressed to the specifications therefor; (b) the Project improvements are constructed in a sound Trustee that (a) all conditions prescribed herein as precedent to the issuance of the Bonds workmanlike manner and in accordance with industry standards; (c) the purchase price to

C-15 have been fulfilled; (b) the Bonds have been validly authorized and executed and when be paid by the Issuer for the Project improvements is no more than the lesser of (i) the authenticated and delivered pursuant to the request of the Issuer will be valid obligations fair market value of such improvements and (ii) the actual Cost of construction of such of the Issuer entitled to the benefit of the trust created hereby and will be enforceable in improvements; and (d) the plans and specifications for the Project improvements have accordance with their terms except as enforcement thereof may be affected by been approved by all Regulatory Bodies required to approve them (specifying such bankruptcy, reorganization, insolvency, moratorium and other similar laws relating to Regulatory Bodies) or such approval can reasonably be expected to be obtained; creditors’ rights generally and subject to equitable principles, whether in a proceeding at provided, however, that in lieu of the information required in clause (a), there may be law or in equity; (c) any consents of any Regulatory Bodies required in connection with delivered to the Trustee satisfactory evidence of the acceptance of operational and the issuance of the Bonds or in connection with the acquisition of the improvements maintenance responsibility of each component of the Project by one or more included in the Project have been obtained or can be reasonably expected to be obtained; governmental entities (the foregoing shall not be applicable in the case of the issuance of and (d) if the acquisition of any real property or interest therein is included in the purpose a refunding Series of Bonds); of such issue, (i) the Issuer has or can acquire good and marketable title thereto free from all liens and encumbrances except such as will not materially interfere with the proposed (5) a copy of the Supplemental Indenture for such Bonds, certified by the use thereof or (ii) the Issuer has or can acquire a valid, subsisting and enforceable Secretary or Assistant Secretary of the Issuer as being a true and correct copy thereof; leasehold, easement, right-of-way or other interest in real property sufficient to effectuate the purpose of the issue (which opinion may be stated in reliance on the opinion of other (6) the proceeds of the sale of such Bonds; Counsel satisfactory to the signer or on a title insurance policy issued by a reputable title company) (clauses (c) and (d) shall not apply in the case of the issuance of a refunding (7) any Credit Facility authorized by the Issuer in respect to such Bonds; Series of Bonds); (8) one or more Certified Resolutions of the Issuer relating to the levy of (3) an opinion of counsel for the Issuer, which shall also be addressed to the Special Assessments in respect of the Project, and evidencing that the Issuer has Trustee, to the effect that: (a) the Issuer has good right and lawful authority under the undertaken and, to the extent then required under applicable law, completed all necessary 23 24 proceedings, including, without limitation, the approval of assessment rolls, the holding ARTICLE IV of public hearings, the adoption of resolutions and the establishment of all necessary collection procedures, in order to levy and collect Special Assessments upon the District ACQUISITION OF PROJECT Lands in an amount sufficient to pay the Debt Service Requirement on the Bonds to be issued (the foregoing shall not be applicable in the case of the issuance of a refunding SECTION 4.01. Project to Conform to Plans and Specifications; Changes. The Series of Bonds); Issuer will proceed to complete any Project or portion thereof for which any Series of Bonds is being issued in accordance with the plans and specifications therefor, as such plans and (9) an executed opinion of Bond Counsel; specifications may be amended from time to time, and subject to the specific requirements of the Supplemental Indenture for such Series of Bonds. (10) a written direction of the Issuer to the Trustee to authenticate and deliver such Bonds; SECTION 4.02. Compliance Requirements. The Issuer will comply with all present and future laws, acts, rules, regulations, orders and requirements lawfully made and (11) in the case of a Series of Bonds to be issued for the purpose of completing applicable in fact to any acquisition or construction hereby undertaken and shall obtain all a Project, a certificate of the Consulting Engineer stating the original estimated Cost of necessary approvals under federal, state and local laws, acts, rules and regulations necessary for the Project to be completed at the time of issuance of the Bonds originally issued to the completion and operation of any Project or portion thereof for which any Series of Bonds is finance such Project, that such estimated Cost will be exceeded, the Cost of completing being issued and shall complete any Project or portion thereof in conformity with such such Project, and that other funds available or reasonably expected to become available approvals, laws, rules and regulations. for such Cost of completion, together with the proceeds of such Series of Bonds, will be sufficient to pay such Cost of completion; and [END OF ARTICLE IV]

(12) a copy of a Final Judgment of validation and a Certificate of No Appeal with respect to the Bonds that are subject to validation;

(13) in the case of the issuance of a refunding Series of Bonds, an Officer’s Certificate of the Issuer stating (a) the intended use of the proceeds of the issue; (b) any other amounts available for the purpose; (c) that the proceeds of the issue plus the other C-16 amounts, if any, stated to be available for the purpose will be sufficient to refund the Bonds to be refunded in accordance with the refunding plan and in compliance with Article XIV of this Master Indenture, including, without limitation, to pay the Costs of issuance of such Bonds, and (d) that notice of redemption, if applicable, of the Bonds to be refunded has been duly given or that provision has been made therefor, as applicable;

(14) in the case of the issuance of a refunding Series of Bonds, a written opinion of Bond Counsel (except with respect to a series of Bonds, the interest on which is not intended to be excluded from gross income of the holders thereof) to the effect that the issuance of such Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any Bonds issued pursuant to the Indenture (to the extent that upon original issuance thereof such Bonds were issued as Bonds the interest on which is excludable from gross income for federal income tax purposes); and

(15) such other documents, certifications and opinions as shall be required by the Supplemental Indenture or by the Issuer or the Trustee upon advice of counsel.

At the option of the Issuer, any or all of the matters required to be stated in the Certified Resolution described in (1) above may instead be stated in a Supplemental Indenture, duly approved by a Certified Resolution of the Issuer.

25 26 ARTICLE V (b) Disbursements. All payments from the Acquisition and Construction Fund shall be paid in accordance with the provisions of this subsection. Moneys in the ACQUISITION AND CONSTRUCTION FUND Acquisition and Construction Fund shall be disbursed by check, voucher, order, draft, certificate or warrant signed by any one or more officers or employees of the Trustee legally authorized to SECTION 5.01 Acquisition and Construction Fund. The Trustee shall establish an sign such items or by wire transfer to an account specified by the payee upon satisfaction of the Acquisition and Construction Fund into which shall be deposited the proceeds from each Series conditions for disbursement set forth in this subsection (b). Before any such payment shall be of Bonds issued under the Indenture (unless otherwise specified herein or in the applicable made, the District shall file with the Trustee a fully executed requisition in the form of Exhibit D Supplemental Indenture for a Series of Bonds) and from which Costs may be paid as set forth attached hereto. Upon receipt of each such requisition and accompanying certificate, the Trustee herein and in the applicable Supplemental Indenture. Unless otherwise specified in the shall promptly withdraw from the Acquisition and Construction Fund and pay to the person, firm applicable Supplemental Indenture, a separate Series Account shall be established in the or corporation named in such requisition the amount designated in such requisition. All Acquisition and Construction Fund with respect to each Series of Bonds issued hereunder and requisitions and certificates received by the Trustee pursuant to this Section 5.01 shall be the proceeds of each Series of Bonds (other than Bonds issued to refund all or a portion of the retained in the possession of the Trustee, subject at all reasonable times to the inspection of the Bonds) shall be deposited into the corresponding Series Account in the Acquisition and District, the Consulting Engineer, the Owner of any Bonds, and the agents and representatives Construction Fund. The amounts in any account of the Acquisition and Construction Fund, until thereof. applied as hereinafter provided, shall be held for the security of the Series of Bonds hereunder in respect of which such Series Account was established. Separate subaccounts within any Series (c) Completion of Project. On the date of completion of the Project, as Account of the Acquisition and Construction Fund shall be maintained by the Trustee in respect evidenced by the delivery of a Certificate of the Consulting Engineer and adoption of a of each Series of Bonds upon request of the Issuer whenever, in the opinion of the Issuer, it is resolution by the Board accepting the Project as provided by Section 170.09 Florida Statutes, as appropriate to have a separate accounting in respect of the Costs of any designated portion of a amended (the “Completion Date”), the balance in the Acquisition and Construction Fund not Project. Payments shall be made from the appropriate Series Account of the Acquisition and reserved by the District for the payment of any remaining part of the Cost of the Project, shall be Construction Fund to pay any unpaid Costs of Issuance of the Series of Bonds in question, transferred by the Trustee to, and deposited in, the applicable Series Account of the Bond including without limitation, legal, engineering, and consultants’ fees and to pay amounts to be Redemption Fund and applied as provided in Section 6.06 hereof. reimbursed to the Issuer for Costs advanced, and thereafter to pay Costs of planning, financing, acquisition, construction, reconstruction, equipping and installation of the applicable Project or [END OF ARTICLE V] portion thereof. C-17 (a) Deposits. In addition to the deposit of amounts received by the Trustee on the date of issuance of each Series of Bonds, the Issuer shall pay or cause to be paid to the Trustee, for deposit into the Series Account of the Acquisition and Construction Fund, as promptly as practicable, subject to Section 9.14(c) hereof, the following amounts:

(i) Payments made to the Issuer from the sale, lease or other disposition of the Project or any portion thereof; and

(ii) The balance of insurance proceeds with respect to the loss or destruction of the Project or any portion thereof.

Amounts in the Series Account of the Acquisition and Construction Fund shall be applied to pay the Cost of a Project or a portion thereof, as applicable, pertaining to the Series of Bonds in question; provided, however, that if any amounts remain in the Series Account of the Acquisition and Construction Fund after the Completion Date of the Project or portion thereof pertaining to the Series of Bonds in question, and if such amounts are not reserved for payment of any remaining part of the Cost of such Project, such amounts shall be transferred to the applicable Series Bond Redemption Fund for application to the redemption of Bonds of the Series to which such proceeds relate, as set forth in Section 6.06 hereof or in the applicable Supplemental Indenture. 27 28 ARTICLE VI hereto. All moneys, including, without limitation, proceeds of a Series of Bonds, on deposit to the credit of the Funds and Accounts established hereunder and under a Supplemental Indenture SPECIAL ASSESSMENTS; (except for moneys transferred to the Rebate Fund) shall be pledged to the payment of the APPLICATION THEREOF TO FUNDS AND ACCOUNTS principal, redemption or purchase price of (as the case may be) and interest on the Series of Bonds issued hereunder and under such Supplemental Indenture, and any Series issued on a SECTION 6.01. Special Assessments; Lien of Indenture on Pledged Revenues. The parity therewith. Issuer hereby covenants that it shall levy Special Assessments to the extent and in the amount necessary to pay the Debt Service Requirement on Bonds issued and Outstanding hereunder. SECTION 6.03. Revenue Fund. The Trustee is hereby authorized and directed to The Issuer shall collect the Special Assessments in accordance with Section 9.04 hereof. establish a Revenue Fund and pursuant to a Supplemental Indenture a Series Account for each Series of Bonds issued hereunder, into which the Trustee shall immediately deposit any and all The Issuer shall, within 5 Business Days of receipt thereof, pay to the Trustee for deposit Interlocal Agreement Revenues and Special Assessments received from the levy thereof on the in the applicable Series Account of the Revenue Fund established under Section 6.03 hereof all District Lands or any portion thereof (other than Special Assessment prepayments) and any Interlocal Agreement Revenues and all Special Assessments received by the Issuer from the levy amounts received as the result of any foreclosure, sale of tax certificates or other remedial action thereof on the District Lands subject to assessments for the payment of the related Series of for nonpayment of Special Assessments for the payment of the related Series of Bonds and other Bonds; provided, however, that amounts received as prepayments of Special Assessments shall payments required hereunder or under the applicable Supplemental Indenture (unless such be deposited directly into the applicable series Bond Redemption Fund established hereunder or Interlocal Agreement Revenues, Special Assessments and/or other payments are specifically in any account thereof established pursuant to the applicable Supplemental Indenture. The Issuer designated by the Issuer pursuant to a Supplemental Indenture for deposit into the Rebate Fund shall notify the Trustee at the time of deposit of any amounts received as prepayments of Special or any other Fund or Account established hereunder or under a Supplemental Indenture) and Assessments and shall identify the related Series of Bonds. each Series Account therein shall be held by the Trustee separate and apart from all other Funds and Accounts held under the Indenture and from all other moneys of the Trustee. The Trustee There are hereby pledged for the payment of the principal or Redemption Price of and shall transfer from amounts on deposit in the Series Account in the Revenue Fund to the Funds interest on all Bonds of each Series issued and Outstanding under the Indenture and all and Accounts designated below, the following amounts, at the following times and in the reimbursements due to any Credit Facility Issuer for any drawing with respect to such Series of following order of priority: Bonds on its Credit Facility, including, without limitation, interest thereon, as required under the terms of the applicable Credit Facility Agreement, the Pledged Revenues; provided, however, FIRST, upon receipt but no later than the Business Day preceding the first May 1

C-18 that unless otherwise specifically provided herein or in a Supplemental Indenture relating to a for which there is an insufficient amount from Bond proceeds (or investment earnings Series of Bonds with respect to the Pledged Revenues securing such Series of Bonds, the thereon) on deposit in the applicable Series Interest Account to be applied to the payment Pledged Revenues securing a Series of Bonds shall secure only such Series of Bonds and Bonds of interest on the Bonds of a Series due on the next succeeding May 1, and no later than issued on a parity therewith and shall not secure any other Bonds or Series of Bonds. The the Business Day next preceding each May 1 thereafter while Bonds of a Series issued Pledged Revenues shall immediately be subject to the lien and pledge of the Indenture without under the Indenture remain Outstanding, to the applicable Series Interest Account of the any physical delivery hereof or further act; provided, however, that the lien and pledge of the Debt Service Fund, an amount equal to the interest on the related Series of Bonds Indenture shall not apply to any moneys transferred by the Trustee to the Rebate Fund. The becoming due on the next succeeding May 1, less any amount on deposit in such Interest foregoing notwithstanding, to the extent provided in the Supplemental Indenture authorizing the Account not previously credited; issuance of a Series of Bonds, such Series of Bonds may be made payable from and secured by less than all of the Pledged Revenues, and any one or more of the provisions of this Master SECOND, beginning on the date set forth in the related Supplemental Indenture, Indenture may be made inapplicable to such Series of Bonds, all as more specifically provided in and no later than the Business Day next preceding each May 1 thereafter while Bonds of the corresponding Supplemental Indenture; provided, however, that any such provisions shall a Series issued under the Indenture remain Outstanding, to the Principal Account of the apply only to the particular Series of Bonds authorized by such Supplemental Indenture and shall Debt Service Fund, an amount equal to the principal amount of Bonds of such Series not affect in any manner whatsoever any Outstanding Series of Bonds. maturing on the next succeeding principal payment date, less any amount on deposit in the applicable Series Principal Account not previously credited; SECTION 6.02. Funds and Accounts Relating to the Bonds. The Funds and Accounts specified in this Article VI shall be established under the Master Indenture and each THIRD, beginning on the date set forth in the related Supplemental Indenture, and Supplemental Indenture pursuant to which a Series of Bonds is issued for the benefit of the no later than the Business Day next preceding each May 1 thereafter while Bonds of a specific Series of Bonds issued pursuant to such Supplemental Indenture and any Series issued Series issued under the Indenture remain Outstanding, to the applicable Series Sinking on a parity therewith and, unless expressly otherwise provided in said Supplemental Indenture, Fund Account of the Debt Service Fund, an amount equal to the principal amount of shall not apply to Bonds Outstanding hereunder issued under any other indenture supplemental Bonds of such Series subject to mandatory sinking fund redemption on the next 29 30 succeeding principal payment date, less any amount on deposit in the applicable Series The Trustee shall apply moneys in the Series Sinking Fund Account in the Debt Service Sinking Fund Account not previously credited; Fund for purchase or redemption of the applicable Series of Bonds in amounts and maturities set forth in the Supplemental Indenture. Whenever Bonds of a Series are to be purchased out of FOURTH, upon receipt but no later than the Business Day preceding the first such Series Sinking Fund Account, if the Issuer shall notify the Trustee that the Issuer wishes to November 1 for which there remains an insufficient amount from Bond proceeds (or arrange for such purchase, the Trustee shall comply with the Issuer’s arrangements provided they investment earnings thereon) on deposit in the applicable Series Interest Account to be conform to the Indenture. applied to the payment of interest on the Bonds of a Series due on the next succeeding November 1, and no later than the Business Day next preceding each November 1 Except to the extent otherwise provided in a Supplemental Indenture, purchases and thereafter while Bonds of such Series issued under the Indenture remain Outstanding, to redemptions out of the Series Sinking Fund Account shall be made as follows: the applicable Series Interest Account of the Debt Service Fund, an amount equal to the interest on the Bonds of such Series becoming due on the next succeeding November 1, (a) The Trustee shall apply the amounts required to be transferred to the less any amount on deposit in the Interest Account not previously credited; Series Sinking Fund Account (less any moneys applied to the purchase of Bonds of the applicable Series pursuant to the next sentence hereof) on the principal payment date in each of FIFTH, upon receipt but no later than the Business Day next preceding each the years set forth in a Supplemental Indenture to the redemption of Bonds of a Series in the Interest Payment Date while Bonds of a Series issued under the Indenture remain amounts, manner and maturities and on the dates set forth in a Supplemental Indenture, at a Outstanding, to the applicable Series Account of the Debt Service Reserve Fund, an Redemption Price of 100% of the principal amount thereof. At the written direction of the amount equal to the amount, if any, which is necessary to make the amount on deposit Issuer, the Trustee shall apply moneys from time to time available in the Series Sinking Fund therein equal to the Debt Service Reserve Requirement; and Account to the purchase of Bonds of the applicable Series which mature in the aforesaid years, at prices not higher than the principal amount thereof, in lieu of redemption as aforesaid, provided SIXTH, subject to the following paragraph the balance of any moneys remaining that firm purchase commitments can be made before the notice of redemption would otherwise after making the foregoing deposits shall remain therein. be required to be given. In the event of purchases at less than the principal amount thereof, the difference between the amount in the Series Sinking Fund Account representing the principal The Trustee shall within ten (10) Business Days after the last Interest Payment Date in amount of the Bonds so purchased and the purchase price thereof (exclusive of accrued interest) any calendar year, at the direction of the Issuer, withdraw any moneys held for the credit of the shall be transferred to the related Series Interest Account of the Debt Service Fund. Revenue Fund which are not otherwise required to be deposited pursuant to this Section and

C-19 deposit such moneys as directed to the credit of the applicable Series Account of the Bond (b) Accrued interest on purchased Bonds of a Series shall be paid from the Redemption Fund in accordance with the provisions hereof. Special Assessment prepayments related Series Interest Account of the Debt Service Fund. pledged to a particular Series of Bonds shall be deposited directly into the applicable Series Bond Redemption Fund as provided herein. (c) In lieu of paying the Debt Service Requirements necessary to allow any mandatory redemption of Bonds of a Series from the related Series Sinking Fund Account, the SECTION 6.04. Debt Service Fund. The Trustee is hereby authorized and directed Issuer may present to the Trustee Bonds of a Series purchased by the Issuer pursuant to to establish a Debt Service Fund which shall consist of amounts deposited therein by the Trustee subparagraph (a) above and furnished for such purposes; provided, however, that no Bonds of and any other amounts the Issuer may pay to the Trustee for deposit therein with respect to the such Series so purchased shall be credited towards the Debt Service Requirements in respect of related Series of Bonds. The Debt Service Fund shall be held by the Trustee separate and apart the mandatory redemption of Bonds of such Series for which notice of redemption has been from all other Funds and Accounts held under the Indenture and from all other moneys of the given pursuant to Section 8.02 of this Master Indenture. Any Bond so purchased shall be Trustee. The Trustee shall establish within the Debt Service Fund pursuant to a Supplemental presented to the Trustee for cancellation. In such event, the Debt Service Requirements with Indenture, a Series Principal Account, a Series Interest Account and a Series Sinking Fund respect to the Bonds of a Series for the period in which the purchased Bonds are presented to the Account for each Series of Bonds, which accounts shall be separate and apart from all other Trustee shall, for all purposes hereunder, be reduced by an amount equal to the aggregate Funds and Accounts established under the Indenture and from all other moneys of the Trustee. principal amount of any such Bonds so presented.

The Trustee at all times shall make available to any Paying Agent the funds in the Series SECTION 6.05. Debt Service Reserve Fund. The Trustee is hereby authorized and Principal Account and the Series Interest Account of the Debt Service Fund to pay the principal directed to establish a Debt Service Reserve Fund and pursuant to a Supplemental Indenture a of the applicable Series of Bonds as they mature upon surrender thereof and the interest on the Series Account for each Series of Bonds issued hereunder. The Debt Service Reserve Fund and applicable Series of Bonds as it becomes payable, respectively. When a Series of Bonds is each Series Account therein shall be held by the Trustee for the benefit of each related Series of redeemed, the amount, if any, in the Debt Service Fund representing interest thereon shall be Bonds; provided, however, that notwithstanding anything to the contrary contained in this Master applied to the payment of accrued interest in connection with such redemption. Indenture, the Supplemental Indenture authorizing the issuance of a Series of Bonds may provide 31 32 that the Debt Service Reserve Fund is not applicable and no account therein shall secure such Notwithstanding the foregoing, the Issuer may cause to be deposited into the Series Series of Bonds. The Debt Service Reserve Fund and each Series Account therein shall Account of the Debt Service Reserve Fund a Debt Service Reserve Insurance Policy or Debt constitute an irrevocable trust fund to be applied solely as set forth herein and shall be held by Service Reserve Letter of Credit either in lieu of any cash amount required to be deposited the Trustee separate and apart from all other Funds and Accounts held under the Indenture and therein in connection with the issuance of any Series of Bonds or in substitution for all or a from all other moneys of the Trustee. Unless otherwise provided in the Supplemental Indenture portion of the amounts then on deposit therein or in an amount equal to the difference between authorizing the issuance of a Series of Bonds, on the date of issuance and delivery of a Series of the amount required to be deposited and the sum, if any, then on deposit in the Series Account of Bonds an amount of Bond proceeds equal to the Debt Service Reserve Requirement in respect of the Debt Service Reserve Fund, which Debt Service Reserve Insurance Policy or Debt Service such Series of Bonds, calculated as of the date of issuance and delivery of such Series of Bonds, Reserve Letter of Credit shall be payable (upon the giving of notice as required thereunder) on shall be deposited in the related Series Account of the Debt Service Reserve Fund. As long as any Interest Payment Date or principal payment date on which a deficiency exists which cannot there exists no default under the Indenture and the amount in the Series Account of the Debt be remedied by moneys in any other Fund or Account held pursuant to the Indenture and Service Reserve Fund is not reduced below the then applicable Debt Service Reserve available for such purpose. If any such Debt Service Reserve Insurance Policy or Debt Service Requirement with respect to such Series of Bonds, earnings on investments in the Series Account Reserve Letter of Credit is substituted for moneys on deposit in the Series Account of the Debt of the Debt Service Reserve Fund shall, prior to the Completion Date of a Project, be transferred Service Reserve Fund, or if at any time there are excess moneys in the Series Account of the to the Series Interest Account of the Debt Service Fund relating thereto, and after the Completion Debt Service Reserve Fund, the excess moneys in the Series Account of the Debt Service Date, be transferred to the related Series Account of the Revenue Fund. Otherwise, earnings on Reserve Fund shall be transferred to and deposited in the related Series Account of the Revenue investments in each Series Account of the Debt Service Reserve Fund shall be retained therein Fund. If a disbursement is made from a Debt Service Reserve Insurance Policy or Debt Service until applied as set forth herein. Unless otherwise provided in a Supplemental Indenture, in the Reserve Letter of Credit, the Issuer shall be obligated to either reinstate the maximum limits of event that the amount in a Series Account of the Debt Service Reserve Fund exceeds the Debt such Debt Service Reserve Insurance Policy or Debt Service Reserve Letter of Credit Service Reserve Requirement with respect to such Series of Bonds due to a decrease in the then immediately following such disbursement or to deposit into the Series Account of the Debt applicable Debt Service Reserve Requirement as a result of an optional prepayment by the owner Service Reserve Fund, as provided in the Indenture for restoration of withdrawals from the of a lot or parcel of land of a Special Assessment against such lot or parcel, which Special Series Account of the Debt Service Reserve Fund, funds in the amount of the disbursement made Assessment is pledged for the payment and security of such Series of Bonds, the excess amount under such Debt Service Reserve Insurance Policy or Debt Service Reserve Letter of Credit. shall be transferred from the Series Account of the Debt Service Reserve Fund to the Series Bond Redemption Fund established for such Series of Bonds, as a credit against the principal In the event that upon the occurrence of any deficiency in a Series Interest Account, a amount of the prepayment otherwise required to be made by the owner of such lot or parcel. Series Principal Account or a Series Sinking Fund Account, the Series Account of the Debt C-20 Unless otherwise provided in a Supplemental Indenture, in the event that the amount in a Series Service Reserve Fund is then funded with a Debt Service Reserve Letter of Credit or Debt Account of the Debt Service Reserve Fund exceeds the Debt Service Reserve Requirement with Service Reserve Insurance Policy, the Trustee shall, on an Interest or Principal Payment Date or respect to such Series of Bonds due to a decrease in the then applicable Series Account of the mandatory redemption date to which such deficiency relates, draw upon the Debt Service Debt Service Reserve Requirement for any other reason, the excess amount shall be transferred Reserve Letter of Credit or cause to be paid under the Debt Service Reserve Insurance Policy an from the Series Account of the Debt Service Reserve Fund to the related Series Account of the amount sufficient to remedy such deficiency, in accordance with the terms and provisions of the Revenue Fund. Debt Service Reserve Letter of Credit or Debt Service Reserve Insurance Policy as applicable, and any corresponding reimbursement or other agreement governing the Debt Service Reserve Whenever for any reason on an Interest or Principal Payment Date or mandatory Letter of Credit or Debt Service Reserve Insurance Policy; provided, however, that if at the time redemption date with respect to a related Series of Bonds secured by a Series Account of the of such deficiency the Series Account of the Debt Service Reserve Fund is only partially funded Debt Service Reserve Fund the amount in the related Series Interest Account, the related Series with a Debt Service Reserve Letter of Credit or Debt Service Reserve Insurance Policy, prior to Principal Account or the related Series Sinking Fund Account, as the case may be, is insufficient drawing on the Debt Service Reserve Letter of Credit or Debt Service Reserve Insurance Policy, to pay all amounts payable on such Series of Bonds therefrom on such payment dates, the as applicable, the Trustee shall first apply any cash and securities on deposit in the Series Trustee shall, without further instructions, transfer the amount of any such deficiency from the Account of the Debt Service Reserve Fund to remedy the deficiency in accordance with the related Series Account of the Debt Service Reserve Fund into the related Series Interest Account, second paragraph of this Section 6.05 and, if after such application a deficiency still exists, the the related Series Principal Account and the related Series Sinking Fund Account, as the case Trustee shall make up the balance of the deficiency by drawing on the Debt Service Reserve may be, with priority to the related Series Interest Account and then, proportionately according Letter of Credit or Debt Service Reserve Insurance Policy, as provided in this sentence. to the respective deficiencies therein, to the related Series Principal Account and the related Amounts drawn on the Debt Service Reserve Letter of Credit or Debt Service Reserve Insurance Series Sinking Fund Account, to be applied to pay the Series of Bonds secured by the Series Policy shall be applied as set forth in the second paragraph of this Section 6.05. Any amounts Account of the Debt Service Reserve Fund. drawn under a Debt Service Reserve Letter of Credit or Debt Service Reserve Insurance Policy shall be reimbursed to the issuer thereof in accordance with the terms and provisions of the

33 34 reimbursement or other agreement governing such Debt Service Reserve Letter of Credit or Debt under a Supplemental Indenture and available therefor are sufficient to pay the principal or Service Reserve Insurance Policy. Redemption Price of, as the case may be, and interest on all Bonds of a Series then Outstanding under such Indenture to maturity or prior redemption, together with any amounts due the Issuer SECTION 6.06. Bond Redemption Fund. The Trustee is hereby authorized and and the Trustee, Paying Agent, Registrar, Credit Facility Issuer, the Trustee, at the direction of directed to establish a Series Bond Redemption Fund for each Series of Bonds issued hereunder the Issuer, shall apply the amounts in the Series Funds and Series Accounts to the payment of the into which shall be deposited, moneys in the amounts and at the times provided in Sections 5.01, aforesaid obligations and the Issuer shall not be required to pay over any further Pledged 6.01, 6.03, 6.05, 9.08(c) and 9.14(c) of this Master Indenture. The Series Bond Redemption Revenues with respect to such Series of Bonds unless and until it shall appear that there is a Fund shall constitute an irrevocable trust fund to be applied solely as set forth in the applicable deficiency in the Funds and Accounts held by the Trustee. Indenture and shall be held by the Trustee separate and apart from all other Funds and Accounts held under such Indenture and from all other moneys of the Trustee. All earnings on investments SECTION 6.09. Certain Moneys to Be Held for Series Bondowners Only. Each held in the Series Bond Redemption Fund shall be retained therein and applied as set forth Series of Bonds issued pursuant to this Master Indenture and a Supplemental Indenture shall be below. secured by Pledged Revenues, as set forth herein, and otherwise may be secured by such additional Funds and Accounts and other security (including, but not limited to, Credit Facilities) Moneys in the Series Bond Redemption Fund (including all earnings on investments held established by the pertinent Supplemental Indenture. Moneys and investments in the various in the Series Bond Redemption Fund) shall be accumulated therein to be used in the following Funds and Accounts created under a Supplemental Indenture expressly and solely for the benefit order of priority, to the extent that the need therefor arises: of the Series of Bonds issued under such Supplemental Indenture shall be held in trust by the Trustee for the benefit of the Holders of, and Credit Facility Issuer with respect to, Bonds of that FIRST, to make such deposits into the Series Rebate Fund, if any, as the Issuer Series only. may direct in accordance with an arbitrage rebate agreement, such moneys thereupon to SECTION 6.10. Unclaimed Moneys In the event any Bond shall not be presented be used solely for the purposes specified in said arbitrage rebate agreement. Any moneys for payment when the principal of such Bond becomes due, either at maturity or at the date fixed so transferred from the Series Bond Redemption Fund to the Series Rebate Fund shall for redemption of such Bond or otherwise, if amounts sufficient to pay such Bond have been thereupon be free from the lien and pledge of the related Indenture; deposited with the Trustee for the benefit of the owner of the Bond and have remained unclaimed SECOND, to be used to call for redemption pursuant to clause (b) of Section 8.01 for three (3) years after the date payment thereof becomes due shall, upon request of the Issuer, if hereof an amount of Bonds of the applicable Series equal to the amount of money the Issuer is not at the time to the knowledge of the Trustee in default with respect to any transferred to the Series Bond Redemption Fund pursuant to the aforesaid clauses or covenant in the Indenture or the Bonds contained, be paid to the Issuer; and the Owners of the C-21 provisions, as appropriate, for the purpose of such extraordinary mandatory redemption Bonds for which the deposit was made shall thereafter be limited to a claim against the Issuer; on the dates and at the prices provided in such clauses or provisions, as appropriate; and provided, however, that the Trustee, before making payment to the Issuer, may, at the expense of the Issuer, cause a notice to be published in an Authorized Newspaper, stating that the money THIRD, the remainder to be utilized by the Trustee, at the direction of a remaining unclaimed will be returned to the Issuer after a specified date. Responsible Officer, to call for redemption on each Interest Payment Date on which Bonds of the applicable Series are subject to optional redemption pursuant to Section 8.01(a) hereof such amount of Bonds of the applicable Series as, with the redemption [END OF ARTICLE VI] premium, may be practicable; provided, however, that not less than Five Thousand Dollars ($5,000) principal amount of Bonds of the applicable Series shall be called for redemption at one time.

Any such redemption shall be made in accordance with the provisions of Article VIII of this Master Indenture. The Issuer shall pay all expenses in connection with such redemption.

SECTION 6.07. Drawings on Credit Facility. With respect to Bonds in respect of which there has been issued a Credit Facility, the Trustee shall draw on the Credit Facility, in accordance with the provisions for drawing under such Credit Facility, and within the requisite time period, all as set forth in the Credit Facility Agreement or the Supplemental Indenture.

SECTION 6.08. Procedure When Funds Are Sufficient to Pay All Bonds of a Series. If at any time the moneys held by the Trustee in the Funds and Accounts hereunder and 35 36 ARTICLE VII Section 6.05 of this Master Indenture and unless otherwise provided in a Supplemental Indenture with respect to a specific Series of Bonds, any interest and other income so received shall be SECURITY FOR AND INVESTMENT OR DEPOSIT OF FUNDS deposited in the related Series Account of the Revenue Fund. Upon request of the Issuer, or on its own initiative whenever payment is to be made out of any Fund or Account, the Trustee shall SECTION 7.01. Deposits and Security Therefor. All moneys received by the sell such securities as may be requested to make the payment and restore the proceeds to the Trustee under a Supplemental Indenture for deposit in any Fund or Account established under Fund or Account in which the securities were held. The Trustee shall not be accountable for any the Master Indenture or such Supplemental Indenture shall be considered trust funds, shall not be depreciation in the value of any such security or for any loss resulting from the sale thereof, subject to lien or attachment, except for the lien created by the Indenture, and shall be deposited except as provided hereinafter. If net proceeds from the sale of securities held in any Fund or in the commercial department of the Trustee, until or unless invested or deposited as provided in Account shall be less than the amount invested and, as a result, the amount on deposit in such Section 7.02 hereof. All deposits of moneys received by the Trustee under the Master Indenture Fund or Account is less than the amount required to be on deposit in such Fund or Account, the or such Supplemental Indenture in the commercial department of the Trustee (whether original amount of such deficit shall be transferred to such Fund or Account from the related Series deposits under this Section 7.01 or deposits or redeposits in time accounts under Section 7.02) Account of the Revenue Fund. shall, to the extent not insured, and to the extent permitted by law, be fully secured as to both principal and interest earned, by Investment Securities of the types set forth in subparagraphs (a), Absent specific instructions as aforesaid, all moneys in the Funds and Accounts (b), (c) or (d) of the definition of Investment Securities and the provisions thereof. If at any time established under the Indenture shall be invested in investments of the nature described in the commercial department of the Trustee is unwilling to accept such deposits or unable to subparagraph (l) of the definition of Investment Securities; provided, however, that whether or secure them as provided above, the Trustee may deposit such moneys with any other depositary not specific instructions as aforesaid have been received by the Trustee, moneys in the Debt which is authorized to receive them and the deposits of which are insured by the Federal Deposit Service Fund and in the Bond Redemption Fund shall be invested only in the types of obligations Insurance Corporation (including the FDIC’S Savings Association Insurance Fund). All deposits described in the two first sentences of this Section 7.02. Subject to the provisions of Section in any other depositary in excess of the amount covered by insurance (whether under this Section 9.31 of this Master Indenture, moneys in any of the Funds and Accounts established pursuant to 7.01 or Section 7.02 as aforesaid) shall, to the extent permitted by law, be fully secured as to the Indenture, when held by the Trustee, shall be immediately invested by the Trustee subject to both principal and interest earned, in the same manner as required herein for deposits with the all written directions from the Issuer. The Trustee shall not be liable or responsible for any loss Trustee. Such security shall be deposited with a Federal Reserve Bank, with the trust department or entitled to any gain resulting from any investment or sale upon the investment instructions of of the Trustee as authorized by law with respect to trust funds in the State, or with a bank or trust the Issuer or otherwise, including that set forth in the first sentence of this paragraph. company having a combined net capital and surplus of not less than $50,000,000.

C-22 SECTION 7.03. Valuation of Funds. The Trustee shall value the assets in each of SECTION 7.02. Investment or Deposit of Funds. Except to the extent otherwise the Funds and Accounts established hereunder or under any Supplemental Indenture on March provided in a Supplemental Indenture with respect to a specific Series of Bonds, the Trustee 15 and September 15 of each Fiscal Year, and as soon as practicable after each such valuation shall, as directed by the Issuer in writing, invest moneys held in the Debt Service Fund and any date (but no later than ten (10) days after each such valuation date) shall provide the Issuer a Series Bond Redemption Fund created under any Supplemental Indenture only in Government report of the status of each Fund and Account as of the valuation date. In computing the assets Obligations and securities described in subparagraphs (d), (e), (h), (j) or (l) of the definition of of any Fund or Account, investments and accrued interest thereon shall be deemed a part thereof, Investment Securities. Except to the extent otherwise provided in a Supplemental Indenture with subject to Section 7.02 hereof. For the purpose of determining the amount on deposit to the respect to a specific Series of Bonds, the Trustee shall, as directed by the Issuer in writing, invest credit of any Fund or Account established hereunder or under any Supplemental Indenture, moneys held in any other Fund or Account or Series Account of the Debt Service Reserve Fund obligations in which money in such Fund or Account shall have been invested shall be valued at in Investment Securities. All deposits in time accounts shall be subject to withdrawal without the market value or the amortized cost thereof, whichever is lower, or at the redemption price penalty and all investments shall mature or be subject to redemption by the holder without thereof, to the extent that any such obligation is then redeemable at the option of the holder. penalty, not later than the date when the amounts will foreseeably be needed for purposes set forth herein. All securities securing investments under this Section shall be deposited with a Federal Reserve Bank, with the trust department of the Trustee, as authorized by law with [END OF ARTICLE VII] respect to trust funds in the State, or with a bank or trust company having a combined net capital and surplus of not less than $50,000,000. The interest and income received upon such investments and any interest paid by the Trustee or any other depositary of any Fund or Account and any profit or loss resulting from the sale of securities shall be added or charged to the Fund or Account for which such investments are made; provided, however, that if the amount in any Fund or Account equals or exceeds the amount required to be on deposit therein, subject to

37 38 ARTICLE VIII thereof plus accrued interest to the redemption date, in the years and amounts set forth in a Supplemental Indenture. REDEMPTION AND PURCHASE OF BONDS In connection with such mandatory sinking fund redemption of Bonds, amounts shall be SECTION 8.01. Redemption Dates and Prices. The Bonds may be made transferred from the applicable Series Account of the Revenue Fund to the Series Sinking Fund subject to optional, mandatory and extraordinary redemption and purchase, either in whole or in Account of the Debt Service Fund, all as more particularly described in Section 6.03 hereof. part, by the Issuer, prior to maturity in the amounts, at the times and in the manner provided in this Article VIII and in a Supplemental Indenture. The principal amounts of scheduled Sinking Fund installments shall be reduced as specified by the Issuer or as provided in Section 8.04 hereof by any principal amounts of the (a) Optional Redemption. Bonds of a Series shall be subject to optional Bonds redeemed pursuant to Section 8.01(a) and (b) hereof or purchased pursuant to Section redemption at the direction of the Issuer, at the times and upon payment of the Redemption Price 6.04 hereof. as provided in a Supplemental Indenture. Upon any redemption of Bonds other than in accordance with scheduled Sinking Fund (b) Extraordinary Mandatory Redemption in Whole or in Part. Except as installments, the Issuer shall cause to be recalculated and delivered to the Trustee revised otherwise provided in a Supplemental Indenture with respect to Bonds of the related Series, Sinking Fund installments recalculated so as to amortize the Outstanding principal amount of Bonds of a Series are subject to extraordinary mandatory redemption prior to maturity by the Bonds of such Series in substantially equal annual installments of principal and interest (subject Issuer in whole, on any date, or in part, on any Interest Payment Date, at an extraordinary to rounding to Authorized Denominations of principal) over the remaining term of the Bonds of mandatory Redemption Price equal to 100% of the principal amount of the Bonds to be such Series. The Sinking Fund installments as so recalculated shall not result in an increase in redeemed, plus interest accrued to the redemption date, (i) from moneys deposited into the the aggregate of the Sinking Fund installments for all Bonds of such Series in any year. In the related Series Bond Redemption Fund following the payment in full of Special Assessments on event of a redemption or purchase occurring less than 45 days prior to a date on which a Sinking any portion of the District Lands in accordance with the provisions of Section 9.08(a) hereof; Fund installment is due, the foregoing recalculation shall not be made to Sinking Fund (ii) from moneys deposited into the related Series Bond Redemption Fund following the payment installments due in the year in which such redemption or purchase occurs, but shall be made to in full of Special Assessments on any portion of the District Lands as a result of any prepayment Sinking Fund installments for the immediately succeeding and subsequent years. of Special Assessments in accordance with Section 9.08(b) hereof; (iii) when sufficient moneys are on deposit in the related Series Funds and Accounts (other than the Rebate Fund) to pay and SECTION 8.02. Notice of Redemption and of Purchase. Except where otherwise

C-23 redeem all Outstanding Bonds of a Series and accrued interest thereon to the redemption date in required by a Supplemental Indenture, when required to redeem or purchase Bonds of a Series addition to all amounts owed to Persons under the Indenture; (iv) from moneys in excess of the under any provision of the Indenture or directed to do so by the Issuer, the Trustee shall cause Debt Service Reserve Requirement in the Series Account of the Debt Service Reserve Fund notice of the redemption or purchase, either in whole or in part, to be mailed at least thirty (30) transferred to the Bond Redemption Fund pursuant to Section 6.05 hereof; (v) from excess but not more than sixty (60) days prior to the redemption or purchase date to all Owners of moneys transferred from the Series Account of the Revenue Fund to the Bond Series Bonds to be redeemed or purchased (as such Owners appear on the Bond Register on the fifth Redemption Fund in accordance with Section 6.03 of this Master Indenture; (vi) from moneys, if (5th) day prior to such mailing), at their registered addresses and also to any Credit Facility any, on deposit in the Series Bond Redemption Fund pursuant to Section 9.14(c) hereof Issuer, but failure to mail any such notice or defect in the notice or in the mailing thereof shall following condemnation or the sale of any portion of the District Lands benefited by a Project to not affect the validity of the redemption or purchase of the Bonds of such Series for which notice a governmental entity under threat of condemnation by such governmental entity or the damage was duly mailed in accordance with this Section 8.02. Such notice shall be given in the name of or destruction of all or substantially all of the Project when such moneys are not to be used the Issuer, shall be dated, shall set forth the Bonds of such Series Outstanding which shall be pursuant to 9.14(c) to repair, replace or restore the Project; provided, however, that at least forty- called for redemption or purchase and shall include, without limitation, the following additional five (45) days prior to such extraordinary mandatory redemption, the Issuer shall cause to be information: delivered to the Trustee (x) notice setting forth the redemption date and (y) a certificate of the Consulting Engineer confirming that the repair and restoration of the Project would not be (a) the redemption or purchase date; economical or would be impracticable; or (vii) from amounts transferred to the Bond Redemption Fund from the Series Account of the Acquisition and Construction Fund in (b) the redemption or purchase price; accordance with Section 5.01(c) hereof. (c) CUSIP numbers, to the extent applicable, and any other distinctive (c) Mandatory Sinking Fund Redemption. Bonds of a Series shall be subject numbers and letters; to mandatory sinking fund redemption at a Redemption Price of 100% of the principal amount

39 40 (d) if less than all Outstanding Bonds of a Series to be redeemed or purchased, Payment of the Redemption Price, together with accrued interest, shall be made by the the identification (and, in the case of partial redemption, the respective principal amounts) of the Trustee or Paying Agent to or upon the order of the Owners of the Bonds called for redemption Bonds to be redeemed or purchased; upon surrender of such Bonds. The Redemption Price of the Bonds to be redeemed, the expenses of giving notice and any other expenses of redemption, shall be paid out of the Fund (e) that on the redemption or purchase date the redemption or purchase price from which redemption is to be made or by the Issuer, or as specified in a Supplemental will become due and payable upon surrender of each such Bond or portion thereof called for Indenture. redemption or purchase, and that interest thereon shall cease to accrue from and after said date; and SECTION 8.04. Partial Redemption of Bonds. Except to the extent otherwise provided in a Supplemental Indenture, if less than all of a Series of Bonds of a maturity are to be (f) the place where such Bonds are to be surrendered for payment of the redeemed, the Trustee shall select the particular Bonds or portions of the Bonds to be called for redemption or purchase price, which place of payment shall be a corporate trust office of the redemption by lot in such reasonable manner as the Trustee in its discretion may determine. In Trustee. the case of any partial redemption of Bonds of a Series pursuant to Section 8.01(a), such redemption shall be effectuated by redeeming Bonds of such Series of such maturities in such If at the time of mailing of notice of an optional redemption or purchase, the Issuer shall manner as shall be specified by the Issuer in writing, subject to the provisions of Section 8.01 not have deposited with the Trustee or Paying Agent moneys sufficient to redeem or purchase all hereof. In the case of any partial redemption of Bonds of a Series pursuant to Section 8.01(b), the Bonds called for redemption or purchase, such notice shall state that it is subject to the such redemption shall be effectuated by redeeming Bonds of such Series pro rata among the deposit of the redemption or purchase moneys with the Trustee or Paying Agent, as the case may maturities, treating each date on which a Sinking Fund Installment is due as a separate maturity be, not later than the opening of business on the redemption or purchase date, and such notice for such purpose, with the portion to be redeemed from each maturity being equal to the product shall be of no effect unless such moneys are so deposited. of the aggregate principal amount of Bonds of such Series to be redeemed multiplied times a fraction the numerator of which is the principal amount of the Series of Bonds of such maturity If the amount of funds deposited with the Trustee for such redemption, or otherwise outstanding immediately prior to the redemption date and the denominator of which is the available, is insufficient to pay the redemption price and accrued interest on the Bonds so called aggregate principal amount of all Bonds of such Series outstanding immediately prior to the for redemption on the redemption date, the Trustee shall redeem and pay on such date an amount redemption date. of such Bonds for which such funds are sufficient, selecting the Bonds to be redeemed by lot from among all such Bonds called for redemption on such date, and among different maturities [END OF ARTICLE VIII]

C-24 of Bonds in the same manner as the initial selection of Bonds to be redeemed, and from and after such redemption date, interest on the Bonds or portions thereof so paid shall cease to accrue and become payable; but interest on any Bonds or portions thereof not so paid shall continue to accrue until paid at the same rate as it would have had such Bonds not been called for redemption.

The notices required to be given by this Section 8.02 shall state that no representation is made as to correctness or accuracy of the CUSIP numbers listed in such notice or printed on the Bonds.

SECTION 8.03. Payment of Redemption Price. If any required (a) unconditional notice of redemption has been duly mailed or waived by the Owners of all Bonds called for redemption or (b) conditional notice of redemption has been so mailed or waived and the redemption moneys have been duly deposited with the Trustee or Paying Agent, then in either case, the Bonds called for redemption shall be payable on the redemption date at the applicable Redemption Price plus accrued interest, if any, to the redemption date. Bonds so called for redemption, for which moneys have been duly deposited with the Trustee, will cease to bear interest on the specified redemption date, shall no longer be secured by the Indenture and shall not be deemed to be Outstanding under the provisions of the Indenture.

41 42 ARTICLE IX SECTION 9.03. Special Assessments; Re-Assessments.

COVENANTS OF THE ISSUER (a) The Issuer shall levy Special Assessments, and evidence and certify to the Tax Collector or cause the Property Appraiser to certify on the tax roll to the Tax Collector for SECTION 9.01. Power to Issue Bonds and Create Lien. The Issuer is duly collection by the Tax Collector and enforcement by the Tax Collector or the Issuer pursuant to authorized under the Act and all applicable laws of the State to issue the Bonds, to adopt and the Act, Chapter 170 or Chapter 197, Florida Statutes, or any successor statutes, as applicable, execute the Master Indenture and to pledge the Pledged Revenues for the benefit of the Bonds of and Section 9.04 hereof, an amount equal to the amount of Special Assessments levied by the a Series and any Credit Facility Issuer. The Pledged Revenues are not and shall not be subject to Issuer less the amount of Interlocal Agreement Revenues expected to be on deposit in the any other lien senior to or on a parity with the lien created in favor of the Bonds of a Series and Revenue Fund as of April 1 in the following year. any Credit Facility Issuer with respect to such Series. The Bonds and the provisions of the Indenture are and will be valid and legally enforceable obligations of the Issuer in accordance (b) If any Special Assessment shall be either in whole or in part annulled, with their respective terms. The Issuer shall, at all times, to the extent permitted by law, defend, vacated or set aside by the judgment of any court, or if the Issuer shall be satisfied that any such preserve and protect the pledge created by the Indenture and all the rights of the Bondholders and Special Assessment is so irregular or defective that the same cannot be enforced or collected, or any Credit Facility Issuer under the Indenture against all claims and demands of all other Persons if the Issuer shall have omitted to make such Special Assessment when it might have done so, the whomsoever. Issuer shall either (i) take all necessary steps to cause a new Special Assessment to be made for the whole or any part of said improvement or against any property benefitted by said SECTION 9.02. Payment of Principal and Interest on Bonds. The payment of the improvement, or (ii) in its sole discretion, make up the amount of such Special Assessment from principal or Redemption Price of and interest on all of the Bonds of a Series issued under the legally available moneys, which moneys shall be deposited into the applicable Series Account in Indenture shall be secured forthwith equally and ratably by a first lien on and pledge of the the Revenue Fund. In case such second Special Assessment shall be annulled, the Issuer shall Pledged Revenues, except to the extent otherwise provided in a Supplemental Indenture; and obtain and make other Special Assessments until a valid Special Assessment shall be made. Pledged Revenues in an amount sufficient to pay the principal or Redemption Price of and interest on the Bonds of a Series authorized by the Indenture are hereby irrevocably pledged to SECTION 9.04. Method of Collection. Special Assessments shall be collected by the payment of the principal or Redemption Price of and interest on the Bonds of a Series the Issuer in accordance with the provisions of the Act and Chapter 170 or Chapter 197, Florida authorized under the Indenture, as the same become due and payable. The Issuer shall promptly Statutes, or any successor statutes thereto, as applicable, in accordance with the terms of this pay the interest on and the principal or Redemption Price of every Bond issued hereunder Section. The Issuer shall use its best efforts to adopt the uniform method for the levy, collection

C-25 according to the terms thereof, but shall be required to make such payment only out of the and enforcement of Special Assessments afforded by Sections 197.3631, 197.3632 and Pledged Revenues. The Issuer shall appoint one or more Paying Agents for such purpose, each 197.3635, Florida Statutes, or any successor statutes thereto, as soon as practicable, or a such agent to be a bank and trust company or a trust company or a national banking association comparable alternative method afforded by Section 197.3631, Florida Statutes. The Issuer shall having trust powers. use its best efforts to enter into one or more written agreements with the Property Appraiser and the Tax Collector, either individually or jointly (together, the “Property Appraiser and Tax THE BONDS AUTHORIZED UNDER THE INDENTURE AND THE OBLIGATION Collector Agreement”) in order to effectuate the provisions of this Section. The Issuer shall use EVIDENCED THEREBY SHALL NOT CONSTITUTE A LIEN UPON ANY PROPERTY OF its best efforts to ensure that any such Property Appraiser and Tax Collector Agreement remains THE ISSUER, INCLUDING, WITHOUT LIMITATION, THE PROJECT OR ANY PORTION in effect for at least as long as the final maturity of Bonds Outstanding under the Indenture. To THEREOF IN RESPECT OF WHICH ANY SUCH BONDS ARE BEING ISSUED, OR ANY the extent that the Issuer is not able to collect Special Assessments pursuant to the “uniform tax PART THEREOF, BUT SHALL CONSTITUTE A LIEN ONLY ON THE PLEDGED roll collection” method under Chapter 197, Florida Statutes, the Issuer may elect to collect and REVENUES AS SET FORTH IN THE INDENTURE. NOTHING IN THE BONDS enforce Special Assessments pursuant to any available method under the Act, Chapter 170, AUTHORIZED UNDER THE INDENTURE OR IN THE INDENTURE SHALL BE Florida Statutes, or Chapter 197, Florida Statutes, or any successor statutes thereto. The election CONSTRUED AS OBLIGATING THE ISSUER TO PAY THE BONDS OR THE to collect and enforce Special Assessments in any year pursuant to any one method shall not, to REDEMPTION PRICE THEREOF OR THE INTEREST THEREON EXCEPT FROM THE the extent permitted by law, preclude the Issuer from electing to collect and enforce Special PLEDGED REVENUES, OR AS PLEDGING THE FAITH AND CREDIT OF THE ISSUER, Assessments pursuant to any other method permitted by law in any subsequent year. THE COUNTY, THE CITY, OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF, OR AS OBLIGATING THE ISSUER, THE COUNTY, THE CITY, OR THE SECTION 9.05. Delinquent Special Assessments. Subject to the provisions of STATE OR ANY OF ITS POLITICAL SUBDIVISIONS, DIRECTLY OR INDIRECTLY OR Section 9.04 hereof, if the owner of any lot or parcel of land assessed for a particular Project CONTINGENTLY, TO LEVY OR TO PLEDGE ANY FORM OF TAXATION WHATEVER shall be delinquent in the payment of any Special Assessment, then such Special Assessment THEREFOR. shall be enforced pursuant to the provisions of Chapter 197, Florida Statutes, or any successor statute thereto, including but not limited to the sale of tax certificates and tax deeds as regards 43 44 such delinquent Special Assessment. In the event the provisions of Chapter 197, Florida conclusion of such legal proceedings. A signed copy of such audit shall be furnished to the Statutes, and any provisions of the Act with respect to such sale are inapplicable by operation of Trustee (solely as a repository of such information) as soon as practicable after such audit shall law, then upon the delinquency of any Special Assessment the Issuer shall, to the extent become available and shall, upon written request, be mailed to any Registered Owner. permitted by law, utilize any other method of enforcement as provided by Section 9.04 hereof, including, without limitation, declaring the entire unpaid balance of such Special Assessment to SECTION 9.08. Removal of Special Assessment Liens. Except as otherwise be in default and, at its own expense, cause such delinquent property to be foreclosed, pursuant provided in a Supplemental Indenture with respect to a related Series of Bonds the following to the provisions of Section 170.10, Florida Statutes, in the same method now or hereafter procedures shall apply in connection with the removal of Special Assessment liens. provided by law for the foreclosure of mortgages on real estate, or pursuant to the provisions of Chapter 173, Florida Statutes, and Sections 190.026 and 170.10, Florida Statutes, or otherwise as (a) At any time from the date of levy of Special Assessments on a parcel of provided by law. District Lands through the date that is thirty (30) days after the related Project has been completed and the Board has adopted a resolution accepting such Project as provided by Section SECTION 9.06. Sale of Tax Certificates and Issuance of Tax Deeds; Foreclosure of 170.09, Florida Statutes, as amended, any owner of property subject to the Special Assessments Special Assessment Liens. If the Special Assessments levied and collected under the uniform may, at its option, require the Issuer to release and extinguish the lien upon its property by virtue method described in Section 9.04 are delinquent, then the applicable procedures for issuance and of the levy of the Special Assessments that relate to a Series of Bonds by paying to the Issuer the sale of tax certificates and tax deeds for nonpayment shall be followed in accordance with entire amount of such Special Assessment on such property, without interest. Chapter 197, Florida Statutes and related statutes. Alternatively, if the uniform method of levy and collection is not utilized, and if any property shall be offered for sale for the nonpayment of (b) At any time subsequent to thirty (30) days after the related Project has any Special Assessment, and no person or persons shall purchase the same for an amount at least been completed and the Board has adopted a resolution accepting such Project as provided by equal to the full amount due on the Special Assessment (principal, interest, penalties and costs, Section 170.09, Florida Statutes, as amended, any owner of property subject to the Special plus attorneys fees, if any), the property may then be purchased by the Issuer for an amount Assessments may, at its option, require the Issuer to release and extinguish the lien upon its equal to the balance due on the Special Assessment (principal, interest, penalties and costs, plus property by virtue of the levy of the Special Assessments by paying to the Issuer the entire attorneys fees, if any), and the Issuer shall thereupon receive in its corporate name the title to the amount of the Special Assessment, plus accrued interest to the next succeeding Interest Payment property for the benefit of the Registered Owners. The Issuer, either through its own actions or Date (or the second succeeding Interest Payment Date if such prepayment is made within forty actions caused to be done through the Trustee, shall have the power and shall use its best efforts five (45) calendar days before an Interest Payment Date), attributable to the property subject to to lease or sell such property and deposit all of the net proceeds of any such lease or sale into the Special Assessment owned by such owner.

C-26 related Series Account of the Revenue Fund. Not less than ten (10) days prior to the filing of any foreclosure action or any sale of tax deed as herein provided, the Issuer shall cause written notice (c) Upon receipt of a prepayment as described in (a) or (b) above, the Issuer thereof to be mailed to the Registered Owners of the Series of Bonds secured by such delinquent shall immediately pay the amount so received to the Trustee, and the Issuer shall take such action Special Assessments. Not less than thirty (30) days prior to the proposed sale of any lot or tract as is necessary to record in the official records of the County an affidavit or affidavits, as the of land acquired by foreclosure by the Issuer, it shall give written notice thereof to such case may be, executed by an authorized officer of the Issuer, to the effect that the Special Registered Owners. The Issuer, either through its own actions or actions caused to be done Assessment has been paid and that such Special Assessment lien is thereby released and through the Trustee, agrees that it shall be required to take the measure provided by law for sale extinguished. Except as otherwise provided by a Supplemental Indenture, upon receipt of any of property acquired by it as trustee for the Registered Owners within thirty (30) days after the such moneys from the Issuer the Trustee shall immediately deposit the same into the applicable receipt of the request therefor signed by the Registered Owners of at least twenty-five percent Series Bond Redemption Fund to be applied to the redemption of Bonds in accordance with (25%) of the aggregate principal amount of all Outstanding Bonds of the Series payable from Section 8.01(b)(i) or (ii) hereof, as the case may be. Special Assessments assessed on such property. SECTION 9.09. Deposit of Special Assessments. The Issuer covenants to cause SECTION 9.07. Books and Records with Respect to Special Assessments. In any Special Assessments collected or otherwise received by it to be deposited with the Trustee addition to the books and records required to be kept by the Issuer pursuant to the provisions of within five (5) Business Days after receipt thereof for deposit into the appropriate account within Section 9.17 hereof, the Issuer shall keep books and records for the collection of the Special the Revenue Fund (except that amounts received as prepayments of Special Assessments shall be Assessments on the District Lands, which such books, records and accounts shall be kept designated by the Issuer as such upon delivery to the Trustee and shall be deposited directly into separate and apart from all other books, records and accounts of the Issuer. The District the related Series Bond Redemption Fund). Manager or the District Manager’s designee, at the end of each Fiscal Year, shall prepare a SECTION 9.10. Construction to be on Issuer Lands. Except for certain off site written report setting forth the collections received, the number and amount of delinquencies, the roadway improvements which are outside the District Lands and are required in order for the proceedings taken to enforce collections and cure delinquencies and an estimate of time for the District Lands to be developed, the Issuer covenants that no part of a Project will be constructed 45 46 on, over or under lands other than (i) lands good and marketable title to which is owned by the Project for such coverage, with such reasonable terms, conditions, provisions and costs as the Issuer or other appropriate public entity in fee simple, (ii) lands on, over or under which the District Manager determines will afford adequate protection against bodily injury and property Issuer or other appropriate entity shall have acquired perpetual easements for the purposes of the damage. Project, or (iii) lands, including public streets and highways, the right to the use and occupancy of which for such purposes shall be vested in the Issuer or other appropriate public entity by law All insurance policies of the Issuer relating to the Project shall be carried with companies or by valid franchises, licenses, easements or rights of way or other legally effective permissions authorized or eligible to do business in the State, with a Best rating of no less than “A” as to or approval. management and Class “V” as to financial strength; provided, however, that if, in the opinion of the District Manager, adequate insurance protection under reasonable terms, conditions, SECTION 9.11. Operation, Use and Maintenance of Project. The Issuer shall provisions and cost cannot be purchased from an insurance company with the above-designated establish and enforce reasonable rules and regulations governing the use of the Project owned by ratings, then the District Manager, on behalf of the Issuer, may secure such insurance protection the Issuer, and the operation thereof, such rules and regulations to be adopted in accordance with as the Issuer determines to be in its best interests and otherwise consistent with the Indenture; the Act, and the Issuer shall operate, use and maintain the Project owned by the Issuer in provided further, however, that the Issuer may act as a self-insurer in accordance with the accordance with the Act and all other applicable federal and State laws, rules and regulations, requirements of subsection (d) hereof. All policies providing the insurance coverages required including the Code; the Issuer shall maintain and operate the Project owned by the Issuer in an by this Section shall designate the Issuer as the loss-payee and shall be made payable to the efficient and economical manner, shall at all times maintain the same in good repair and in sound Issuer. operating condition and shall make all necessary repairs, renewals and replacements. (c) All proceeds received from property damage or destruction insurance and SECTION 9.12. Observance of and Compliance with Valid Requirements. The all proceeds received from the condemnation of a Project or any part thereof are hereby pledged Issuer shall pay all municipal or governmental charges lawfully levied or assessed upon the by the Issuer as security for the related Series of Bonds and shall be deposited at the option of the Project or any part thereof or upon any revenues when the same shall become due, and the Issuer Issuer, but subject to the limitations hereinafter described, either (i) into a separate fund to be shall duly observe and comply with all valid requirements of any municipal or governmental established by the Trustee for such purpose, and used to remedy the loss, damage or taking for authority relative to the Project. The Issuer shall not, except as otherwise permitted in Section which such proceeds are received, either by repairing the damaged property or replacing the 9.24 of this Article, create or suffer to be created any lien or charge upon the Project or upon destroyed or taken property, as soon as practicable after the receipt of such proceeds, or (ii) into Pledged Revenues, except the lien and charge of the Bonds on the Pledged Revenues. the related Series Bond Redemption Fund for the purpose of purchasing or redeeming Bonds according to the provisions set forth in Article VIII hereof. The Issuer shall not be entitled to

C-27 SECTION 9.13. Payment of Operating or Maintenance Costs by State or Others. deposit insurance proceeds or condemnation awards into the separate fund described above in The Issuer may permit the United States of America, the State, or any of their agencies, clause (i) of this paragraph (and such proceeds and awards shall be deposited directly into the departments or political subdivisions to pay all or any part of the cost of maintaining, repairing related Series Bond Redemption Fund pursuant to clause (ii) of this paragraph) unless there shall and operating the Project out of funds other than Pledged Revenues. have been filed with the Issuer within a reasonable time after the damage, destruction or condemnation (A) a certificate from the Consulting Engineer that the proceeds of the insurance SECTION 9.14. Public Liability and Property Damage Insurance; Maintenance of or condemnation awards deposited into such separate fund, together with other funds available Insurance; Use of Insurance and Condemnation Proceeds. for such purposes, will be sufficient to repair, rebuild, replace or restore such property to substantially the same condition as it was in prior to its damage, destruction or condemnation (a) Except as otherwise provided in subsection (d) of this Section, the Issuer (taking into consideration any changes, alterations and modifications that the Issuer may desire), will carry or cause to be carried, in respect of the Project, comprehensive general liability (B) an opinion from the Consulting Engineer that the Project can be repaired, rebuilt, replaced or insurance (covering bodily injury and property damage) issued by one or more insurance restored within two (2) years following the damage, destruction or condemnation thereof and companies authorized or eligible to do business under the laws of the State, in such amounts as is (C) an opinion of the Consulting Engineer that, in each of the three (3) Fiscal Years following customary for similar operations, or as is more specifically set forth hereinbelow. completion of such repair, rebuilding, replacement or restoration, the Issuer will be in compliance with its obligations hereunder. If the certificate described in clause (A) of this (b) At all times, to the extent commercially available, the Issuer shall maintain paragraph is not rendered because such proceeds or awards are insufficient for such purposes, the a practical insurance program, with reasonable terms, conditions, provisions and costs which the Issuer may deposit any other legally available funds in such separate fund in an amount required District Manager determines will afford adequate protection against loss caused by damage to or to enable the Consulting Engineer to render its certificate. If the insurance proceeds or destruction of any component of the Project owned by the Issuer. Limits for such coverage will condemnation awards deposited in such separate fund are more than sufficient to repair the be subject to the Consulting Engineer’s recommendations which are to be provided in an annual damaged property or to replace the destroyed or taken property, the balance thereof remaining report, as required by Section 9.21 hereof, establishing value. The Issuer shall also, at all times, shall be deposited to the credit of the related Series Account in the Revenue Fund. maintain a practical comprehensive general liability insurance program with respect to the 47 48 (d) The Issuer shall be entitled to provide all or a portion of the insurance insurance required under the Indenture, whether such policy is payable to the Issuer or to the coverage required by subsections (a) and (b) of this Section through Qualified Self Insurance, Trustee. The Trustee is hereby authorized in its own name to demand, collect, sue and receive provided that the requirements hereinafter set forth in this subsection (d) are satisfied. any insurance money which may become due and payable under any policies payable to it. “Qualified Self Insurance” means insurance maintained through a program of self insurance or insurance maintained with a company or association in which the Issuer has a material interest or Any appraisal or adjustment of any loss or damage under any policy of insurance of which the Issuer has control, either singly or with others. required under the Indenture, whether such policy is payable to the Issuer or to the Trustee, and any settlement or payment of indemnity under any such policy which may be agreed upon by the Prior to participation in any plan of Qualified Self Insurance not currently in effect, the Issuer and any insurer shall be evidenced by a certificate, signed by the District Manager Issuer shall deliver to the Trustee (i) a copy of the proposed plan, and (ii) from the District approved by the Consulting Engineer, and filed with the Trustee. The Trustee shall in no way be Manager, an evaluation of the proposed plan together with an opinion to the effect that (A) the liable or responsible for the collection of insurance moneys in case of any loss or damage. proposed Qualified Self Insurance plan will provide the coverage required by subsections (a) and (b) of this Section, and (B) the proposed Qualified Self Insurance plan provides for the creation SECTION 9.16. Use of Revenues for Authorized Purposes Only. None of the of actuarially sound reserves. Pledged Revenues shall be used for any purpose other than as provided in the Indenture and no contract or contracts shall be entered into or any action taken by the Issuer or the Trustee which Each plan of Qualified Self Insurance shall be in written form, shall provide that upon the will be inconsistent with the provisions of the Indenture. termination of such plan reserves will be established or insurance acquired in amounts adequate to cover any potential retained liability in respect of the period of self insurance, and shall be SECTION 9.17. Books, Records and Annual Reports. The Issuer shall keep proper reviewed annually by the District Manager or registered actuary who shall deliver to the Issuer a books of record and account in accordance with Generally Accepted Accounting Principles report on the adequacy of the reserves established thereunder in light of claims made. If the (separate from all other records and accounts) in which complete and correct entries shall be District Manager or registered actuary determines that such reserves are inadequate in light of the made of its transactions relating to the Project, and which, together with all other books and claims made, he shall make recommendations as to the amount of reserves that should be records of the Issuer, including, without limitation, insurance policies, relating to the Project, established and maintained, and the Issuer shall comply with such recommendations unless it can shall at all times be subject during regular business hours to the inspection of the Trustee. establish to the satisfaction of the Trustee that such recommendations are unreasonable in light of the nature of the claims or the history of recovery against the Issuer for similar claims. A copy The Issuer shall annually, within 180 days after the close of each Fiscal Year, file with of each Qualified Self Insurance plan and of each annual report thereon shall be delivered to the the Trustee, any rating agency that shall have then in effect a rating on any of the Bonds, any

C-28 Trustee. Bondholder that shall have, in writing, requested a copy thereof, and otherwise as provided by law, a copy of an annual report for such year, prepared in accordance with Generally Accepted (e) Copies of all recommendations and approvals made by the Consulting Accounting Principles by a Certified Public Accountant, relating to its operations and including, Engineer under the provisions of this Section shall be filed with the District Manager and the without limitation, statements in reasonable detail of financial condition as of the end of such Trustee. Fiscal Year and income and expenses for such Fiscal Year relating to the Project, and a summary, with respect to each Fund and Account established under the Indenture, of the receipts Within the first six (6) months of each Fiscal Year the District Manager shall file with the therein and disbursements therefrom during such Fiscal Year, and the amounts held therein at the Trustee a complete report of the status of the insurance coverages relating to all Projects, such end of such Fiscal Year. report to include, without being limited thereto, a schedule of all insurance policies required by the Indenture which are then in effect, stating with respect to each policy the name of the insurer, The Issuer shall file with the Trustee annually within 180 days after the close of each the amount, number and expiration date, and the hazards and the risks covered thereby. The Fiscal Year a certificate of a Responsible Officer setting forth (i) a description in reasonable Trustee shall hold such report solely as a repository for the holders of the Bonds, and shall have detail of the insurance then in effect pursuant to the requirements of Section 9.14 hereof and that no duty to require the filing of such report or to determine compliance by the Issuer with the the Issuer has complied in all respects with such requirements, (ii) whether during such year any requirements of this section. material part of the Project has been damaged or destroyed and, if so, the amount of insurance proceeds covering such loss or damage and specifying the Issuer’s reasonable and necessary SECTION 9.15. Collection of Insurance Proceeds. Copies of all insurance policies replacement costs, and (iii) whether or not to the knowledge of the signatory, the Issuer is in referred to in Section 9.14 of this Article shall be available at the offices of the Issuer at all default with respect to any of the covenants, agreements or conditions on its part contained in the reasonable times to the inspection of the Holders of $1,000,000 or more in aggregate principal Indenture, and if so, the nature of such default. amount of the related Series of Bonds and their agents and representatives duly authorized in writing. The Issuer covenants that it will take such action as may be necessary to demand, collect and sue for any insurance money which may become due and payable under any policy of 49 50 The report, statements and other documents required to be furnished by the Issuer to the findings as to whether such portions of the Project owned by the Issuer have been maintained in Trustee pursuant to any provisions of the Indenture shall be available for the inspection of good repair, working order and condition, and (ii) its recommendations as to: Bondholders at the office of the Trustee. (1) the proper maintenance, repair and operation of the Project owned by the SECTION 9.18. Observance of Accounting Standards. The Issuer covenants that Issuer during the ensuing Fiscal Year and an estimate of the amount of money necessary all the accounts and records of the Issuer relating to the Project will be kept according to for such purposes; and Generally Accepted Accounting Principles consistently applied and consistent with the provisions of the Master Indenture. (2) the insurance to be carried under the provisions of Section 9.14 hereof and the amount that should be set aside monthly for the purpose of paying insurance SECTION 9.19. Employment of Certified Public Accountant. The Issuer shall premiums which fall due less often than monthly. employ or cause to be employed as required a Certified Public Accountant to perform accounting and auditing functions and duties required by the Act and the Master Indenture. Promptly after the receipt of such reports by the Issuer, copies thereof shall be filed with the Trustee and mailed by the Issuer to all Bondholders who shall have filed their names and SECTION 9.20. Establishment of Fiscal Year, Annual Budget. The Issuer has addresses with the Secretary of the Board for such purpose. established a Fiscal Year beginning October 1 of each year and ending September 30 of the following year. The reports and budget of the Issuer shall relate to such Fiscal Year unless and SECTION 9.22. Audit Reports. The Issuer covenants that, no later than 180 days until, in accordance with applicable law, a different Fiscal Year is established by Certified after the end of each Fiscal Year, it will cause an audit to be made by a Certified Public Resolution of the Issuer and a copy of such Certified Resolution is filed with the Trustee. Accountant covering all receipts and moneys then on deposit with or in the name of the Trustee or the Issuer and any security held therefor and any investments thereof. Copies of such audit On or before the first day of each Fiscal Year the Issuer shall adopt a final Annual Budget reports shall be filed with the Trustee, the District Manager and the Secretary of the Board, and with respect to the Project for such Fiscal Year for the payment of anticipated operating and mailed by said Secretary to the Consulting Engineer and to all Bondholders who shall have filed maintenance expenses and shall supply a copy of such budget promptly upon the approval their names and addresses with him for such purpose. If the material required to be in such audit thereof to the Trustee and to any Bondholders who shall have so requested in writing and shall also appears in the annual report of the Issuer provided for in Section 9.17 hereof in a manner have filed their names and addresses with the Secretary of the Board for such purpose. If for any that can be readily identified, then the filing of a copy of such annual audit shall satisfy the reason the Issuer shall not have adopted the Annual Budget with respect to the Project on or requirement of this Section.

C-29 before the first day of any Fiscal Year, the Annual Budget for the preceding Fiscal Year shall, until the adoption of the new Annual Budget, be deemed in force for the ensuing Fiscal Year. SECTION 9.23. Information to Be Filed with Trustee. The Issuer shall cause to be The Issuer may at any time adopt an amended or supplemental Annual Budget for the remainder kept on file with the Trustee at all times copies of the schedules of Special Assessments levied of the current Fiscal Year, and when such amended or supplemental Annual Budget is approved on all District Lands in respect of the Project and a copy of the Interlocal Agreements. The it shall be treated as the official Annual Budget under the Master Indenture. Copies of such Issuer shall keep accurate records and books of account with respect to the Project, and shall amended or supplemental Annual Budget shall be filed with the Trustee and mailed by the Issuer have a complete audit of such records and accounts made annually by a Certified Public to any Bondholders who shall have so requested in writing and shall have filed their names and Accountant, as provided in Section 9.22 hereof. A signed copy of said audit shall be furnished to addresses with the Secretary of the Board for such purpose. the Trustee as soon as practicable after such audit shall become available.

SECTION 9.21. Employment of Consulting Engineer; Consulting Engineer’s SECTION 9.24. Covenant Against Sale or Encumbrance; Exceptions. Subject to Report. Section 9.28 hereof, the Issuer covenants that, (a) except for those improvements comprising the Project that are to be conveyed or dedicated by the Issuer to the County, the State Department of (a) The Issuer shall, for the purpose of performing and carrying out the duties Transportation or another governmental entity and (b) except as in this Section permitted, it will imposed on the Consulting Engineer by the Master Indenture, employ one or more Independent not sell, lease or otherwise dispose of or encumber the Project, or any part thereof. The Issuer engineers or engineering firms or corporations having a statewide and favorable repute for skill may, however, from time to time, sell any machinery, fixtures, apparatus, tools, instruments or and experience in such work. other movable property acquired by it from the proceeds of a Series of Bonds or from Pledged Revenues if the District Manager shall determine, with the approval of the Consulting Engineer, (b) The Issuer shall cause the Consulting Engineer to make an inspection of that such items are no longer needed or are no longer useful in connection with the construction, the portions of the Project owned by the Issuer at least once in each Fiscal Year and, on or before maintenance and operation of the Project, and the proceeds thereof shall be applied to the the first day of July in each Fiscal Year, to submit to the Board a report setting forth (i) its replacement of the properties so sold or disposed of or, at the written direction of the Issuer shall be deposited to the credit of the related Series Account in the Revenue Fund. 51 52 Upon any sale of property relating to the Project, the aggregate of which in any thirty shall be entitled, in case of a default hereunder, to any benefit or security under the Indenture (30) day period exceeds Fifty Thousand Dollars ($50,000) under the provisions of this Section, except after the prior payment in full of the principal of all Bonds and claims for interest the Issuer shall provide written notice to the Trustee of the property so sold and the amount and appertaining thereto not so transferred, pledged, kept alive or extended. disposition of the proceeds thereof. SECTION 9.30. Further Assurances. The Issuer shall not enter into any contract or The Issuer may lease or grant easements, franchises or concessions for the use of any part take any action by which the rights of the Trustee or the Bondholders may be impaired and shall, of the Project not incompatible with the maintenance and operation thereof, if the Consulting from time to time, execute and deliver such further instruments and take such further action as Engineer shall approve such lease, easement, franchise or concession in writing, and the net may be required to carry out the purposes of the Indenture. proceeds of any such lease, easement, franchise or concession (after the making of provision for payment from said proceeds of all costs incurred in financing, constructing, operating, SECTION 9.31. Use of Bond Proceeds to Comply with Internal Revenue Code. maintaining or repairing such leases, easements, franchises or concessions) shall be deposited as Except with respect to a Series of Bonds, the interest on which is not intended to be excluded received to the credit of related Series Account in the Revenue Fund. from gross income of the holders thereof, the Issuer covenants to the Holders of the Bonds that it will not make or direct the making of any investment or other use of the proceeds of any Bonds SECTION 9.25. Fidelity Bonds. Every officer, agent or employee of the Issuer issued hereunder which would cause such Bonds to be “arbitrage bonds” as that term is defined having custody or control of any of the Pledged Revenues shall be bonded by a responsible in Section 148 (or any successor provision thereto) of the Code and or “private activity bonds” or corporate surety in an amount not less than the greatest amount reasonably anticipated to be “private loan bonds” as that term is defined in Section 141 (or any successor provision thereto) within the custody or control of such officer, agent or employee at one time. The premiums on of the Code, and that it will comply with the requirements of such Code section and related such surety bonds shall be paid by the Issuer as an expense of operation and maintenance of the regulations throughout the term of such Bonds. Any contract entered into by the Issuer for the Project. operation or maintenance of any portion of the Project, including, without limitation, the parking garage, shall conform to the requirements of the Code and the regulations promulgated SECTION 9.26. No Loss of Lien on Pledged Revenues. The Issuer shall not do or thereunder so that the Bonds will not be “private activity bonds” or “private loan bonds” referred omit to do, or suffer to be done or omit to be done, any matter or thing whatsoever whereby the to above. The Issuer hereby further covenants and agrees to comply with the procedures and lien of the Bonds on the Pledged Revenues or any part thereof, or the priority thereof, would be covenants contained in any arbitrage rebate agreement executed in connection with the issuance lost or impaired; provided, however, that this Section shall not prohibit the Trustee from of each Series of Bonds for so long as compliance is necessary in order to maintain the exclusion transferring moneys to the Rebate Fund held by the Trustee under any arbitrage rebate from gross income for federal income tax purposes of interest on each Series of Bonds.

C-30 agreement. SECTION 9.32. Corporate Existence and Maintenance of Properties. For so long SECTION 9.27. Compliance With Other Contracts and Agreements. The Issuer as any Bonds are Outstanding hereunder, unless otherwise provided by the Act, the Issuer shall shall comply with and abide by all of the terms and conditions of any and all contracts and maintain its corporate existence as a local unit of special purpose government under the Act and agreements which the Issuer enters into in connection with the Project and the issuance of the shall provide for or otherwise require the Project, and all parts thereof owned by the Issuer to be Bonds, including, without limitation, the Interlocal Agreement. The Issuer shall not amend, or (a) continuously operated, repaired, improved and maintained as shall be necessary to provide consent to the amendment of, the Interlocal Agreement if such amendment shall impair the adequate service to the lands benefitted thereby; and (b) in compliance with all valid and security for the Bonds or adversely affect the rights and remedies of the Bondholders. applicable laws, acts, rules, regulations, permits, orders, requirements and directions of any competent public authority. SECTION 9.28. Issuance of Additional Obligations. The Issuer shall not issue any obligations other than the Bonds payable from Pledged Revenues, nor voluntarily create or cause SECTION 9.33. Continuing Disclosure. The Issuer hereby covenants and agrees to be created any debt, lien, pledge, assignment, encumbrance or other charge, payable from that it will comply with and carry out all of the provisions of the Continuing Disclosure Pledged Revenues, except in the ordinary course of business. Agreement. Notwithstanding any other provision of the Indenture, failure of the Issuer or the Developer (if obligated pursuant to the Continuing Disclosure Agreement) to comply with the SECTION 9.29. Extension of Time for Payment of Interest Prohibited. The Issuer Continuing Disclosure Agreement shall not be considered an Event of Default; however, the shall not directly or indirectly extend or assent to an extension of time for payment of any claim Trustee may (and, at the request of any Participating Underwriter or the Holders of at least 25% for interest on any of the Bonds and shall not directly or indirectly be a party to or approve any aggregate principal amount in Outstanding Bonds of a Series and receipt of indemnity to its arrangement therefor by purchasing or funding or in any manner keeping alive any such claim satisfaction, shall) or any Holder of the Bonds or Beneficial Owner may take such actions as may for interest; no claim for interest which in any way, at or after maturity, shall have been be necessary and appropriate, including seeking specific performance by court order, to cause the transferred or pledged apart from the Bonds to which it relates or which shall in any manner have Issuer to comply with its obligations under this Section 9.33. For purposes of this Section, been kept alive after maturity by extension or by purchase thereof by or on behalf of the Issuer, “Beneficial Owner” means any person which (a) has the power, directly or indirectly, to vote or 53 54 consent with respect to, or to dispose of ownership of, any Bonds (including persons holding ARTICLE X Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. EVENTS OF DEFAULT AND REMEDIES

SECTION 9.34. Interlocal Agreement Revenues. The Issuer shall comply with all SECTION 10.01. Events of Default and Remedies. Except to the extent otherwise provisions of the Interlocal Agreement and shall collect the Interlocal Agreement Revenues in provided in the Supplemental Indenture authorizing a Series of Bonds, events of default and accordance with the provisions of the Interlocal Agreement. In the event that either the City or remedies with respect to each Series of Bonds shall be as set forth in this Master Indenture. the County do not pay the Economic Incentive Payments or the Community Redeveloment Agency does not pay the Tax Increment Revenues in accordance with the Interlocal Agreement, SECTION 10.02. Events of Default Defined. Each of the following shall be an the Issuer shall take all necessary and appropriate actions, including proceedings in law or “Event of Default” under the Master Indenture, with respect to a Series of Bonds: equity, to collect the Interlocal Agreement Revenues as the same are due and payable under the provisions of the Interlocal Agreement. (a) if payment of any installment of interest on any Bond of such Series is not made when it becomes due and payable; or

(b) if payment of the principal or Redemption Price of any Bond of such [END OF ARTICLE IX] Series is not made when it becomes due and payable at maturity or upon call or presentation for redemption; or

(c) if the Issuer, for any reason, is rendered incapable of fulfilling its obligations under the Indenture or under the Act; or

(d) if the Issuer proposes or makes an assignment for the benefit of creditors or enters into a composition agreement with all or a material part of its creditors, or a trustee, receiver, executor, conservator, liquidator, sequestrator or other judicial representative, similar or dissimilar, is appointed for the Issuer or any of its assets or revenues, or there is commenced any proceeding in liquidation, bankruptcy, reorganization, arrangement of debts, debtor C-31 rehabilitation, creditor adjustment or insolvency, local, state or federal, by or against the Issuer and if such is not vacated, dismissed or stayed on appeal within ninety (90) days; or

(e) if the Issuer defaults in the due and punctual performance of any other covenant in the Indenture or in any Bond of such Series issued pursuant to the Indenture and such default continues for sixty (60) days after written notice requiring the same to be remedied shall have been given to the Issuer by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of the Holders of not less than a majority in aggregate principal amount of the Outstanding Bonds of such Series; provided, however, that if such performance requires work to be done, actions to be taken, or conditions to be remedied, which by their nature cannot reasonably be done, taken or remedied, as the case may be, within such sixty (60) day period, no Event of Default shall be deemed to have occurred or exist if, and so long as the Issuer shall commence such performance within such sixty (60) day period and shall diligently and continuously prosecute the same to completion; or

(f) written notice shall have been received by the Trustee from a Credit Facility Issuer securing Bonds of such Series that an event of default has occurred under the Credit Facility Agreement, or there shall have been a failure by said Credit Facility Issuer to make said Credit Facility available or to reinstate the interest component of said Credit Facility

55 56 in accordance with the terms of said Credit Facility, to the extent said notice or failure is their name or names, (c) the Trustee shall have been offered indemnity satisfactory to it against established as an event of default under the terms of a Supplemental Indenture. costs, expenses and liabilities, and (d) the Trustee shall have failed to comply with such request within a reasonable time. SECTION 10.03. No Acceleration. No Series of Bonds issued under this Master Indenture shall be subject to acceleration. SECTION 10.08. Trustee May Enforce Rights Without Possession of Bonds. All rights under the Master Indenture and a Series of Bonds may be enforced by the Trustee without SECTION 10.04. Legal Proceedings by Trustee. the possession of any of the Bonds of such Series or the production thereof at the trial or other proceedings relative thereto, and any proceeding instituted by the Trustee shall be brought in its If any Event of Default with respect to a Series of Bonds has occurred and is continuing, name for the ratable benefit of the Holders of the Bonds of such Series. the Trustee, in its discretion may, and upon the written request of the Holders of not less than a majority of the aggregate principal amount of the Outstanding Bonds of such Series and receipt SECTION 10.09. Remedies Not Exclusive. Except as limited under Section 15.01 of of indemnity to its satisfaction shall, in its own name: this Master Indenture, no remedy contained in the Master Indenture is intended to be exclusive of any other remedy or remedies, and each remedy is in addition to every other remedy given (a) by mandamus, or other suit, action or proceeding at law or in equity, hereunder or now or hereafter existing at law or in equity or by statute. enforce all rights of the Holders of the Bonds of such Series, including, without limitation, the right to require the Issuer to carry out any agreements with, or for the benefit of, the Bondholders SECTION 10.10. Delays and Omissions Not to Impair Rights. No delay or omission of the Bonds of such Series and to perform its or their duties under the Act; in respect of exercising any right or power accruing upon any Event of Default shall impair such right or power or be a waiver of such Event of Default, and every remedy given by this Article X (b) bring suit upon the Series of Bonds; may be exercised from time to time and as often as may be deemed expedient.

(c) by action or suit in equity require the Issuer to account as if it were the SECTION 10.11. Application of Moneys in Event of Default. Any moneys received trustee of an express trust for the Holders of the Bonds of such Series; by the Trustee or the Paying Agent, as the case may be, in connection with any proceedings brought under this Article X with respect to a Series of Bonds shall be applied in the following (d) by action or suit in equity enjoin any acts or things which may be unlawful priority: or in violation of the rights of the Holders of the Bonds of such Series; and (a) to the payment of the costs of the Trustee and Paying Agent incurred in C-32 (e) by other proceeding in law or equity, exercise all rights and remedies connection with actions taken under this Article X with respect to such Series of Bonds, provided for by any other document or instrument securing such Series of Bonds. including counsel fees and any disbursements of the Trustee and the Paying Agent and payment of unpaid fees owed to the Trustee. SECTION 10.05. Discontinuance of Proceedings by Trustee. If any proceeding taken by the Trustee on account of any Event of Default is discontinued or is determined (b) unless the principal of all the Bonds of such Series shall have become due adversely to the Trustee, the Issuer, the Trustee, the Paying Agent and the Bondholders shall be and payable: restored to their former positions and rights hereunder as though no such proceeding had been taken. FIRST: to payment of all installments of interest then due on the Bonds of such Series in the order of maturity of such installments of interest, and, if the amount SECTION 10.06. Bondholders May Direct Proceedings. The Holders of a majority available shall not be sufficient to pay in full any particular installment, then to the in aggregate principal amount of the Outstanding Bonds of a Series then subject to remedial payment ratably, according to the amounts due on such installment, to the persons proceedings under this Article X shall have the right to direct the method and place of entitled thereto, without any preference or priority of one installment of interest over any conducting all remedial proceedings by the Trustee under the Master Indenture, provided that other installment; and such directions shall not be otherwise than in accordance with law or the provisions of the Master Indenture. SECOND: to payment to the persons entitled thereto of the unpaid principal or Redemption Price of any of the Bonds of such Series which shall have become due in the SECTION 10.07. Limitations on Actions by Bondholders. No Bondholder shall order of their due dates, with interest on such Bonds from the respective dates upon have any right to pursue any remedy hereunder unless (a) the Trustee shall have been given which they become due and, if the amount available shall not be sufficient to pay in full written notice of an Event of Default, (b) the Holders of at least a majority of the aggregate the principal or Redemption Price coming due on such Bonds on any particular date, principal amount of the Outstanding Bonds of the applicable Series shall have requested the together with such interest, then to the payment ratably, according to the amount of Trustee, in writing, to exercise the powers hereinabove granted or to pursue such remedy in its or 57 58 principal due on such date, to the persons entitled thereto without any preference or Facility Issuer shall be in default in the performance of its obligations under the Credit Facility, priority of one such Bond of a Series over another or of any installment of interest over said Credit Facility Issuer shall have no rights under this Section. another. [END OF ARTICLE X] (c) If the principal of all Bonds of a Series shall have become due and payable, to the payment of principal or Redemption Price (as the case may be) and interest then owing on the Bonds of such Series and in case such moneys shall be insufficient to pay the same in full, then to the payment of principal or Redemption Price and interest ratably, without preference or priority of one Bond of such Series over another or of any installment of interest over any other installment of interest.

Any surplus remaining after the payments described above shall be paid to the Issuer or to the Person lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

For purposes of the application of moneys described above, to the extent payments of principal of and interest on a Series of Bonds shall have been made under a Credit Facility relating thereto, the Credit Facility Issuer shall be entitled to moneys in the related Series Accounts in the Debt Service Fund in accordance with the agreement pursuant to which such Credit Facility has been issued (but subject to subsection (a) hereof and Section 11.04 hereof) and the Certified Resolution of the Issuer authorizing the issuance of such Bonds to which such Credit Facility relates.

SECTION 10.12. Trustee’s Right to Receiver; Compliance with Act. The Trustee shall be entitled as of right to the appointment of a receiver and the Trustee, the Bondholders and

C-33 any receiver so appointed shall have such rights and powers and be subject to such limitations and restrictions as are contained in the Act and other applicable law of the State.

SECTION 10.13. Trustee and Bondholders Entitled to all Remedies under Act. It is the purpose of this Article to provide such remedies to the Trustee and Bondholders as may be lawfully granted under the provisions of the Act and other applicable laws of the State; if any remedy herein granted shall be held unlawful, the Trustee and the Bondholders shall nevertheless be entitled to every other remedy provided by the Act and other applicable laws of the State. It is further intended that, insofar as lawfully possible, the provisions of this Article X shall apply to and be binding upon any receiver appointed in accordance with Section 10.12 hereof.

SECTION 10.14. Credit Facility Issuer’s Rights Upon Events of Default. Anything in the Master Indenture to the contrary notwithstanding, if any Event of Default has occurred and is continuing while a Credit Facility securing all or a portion of such Bonds of a Series Outstanding is in effect, the Credit Facility Issuer shall have the right, in lieu of the Owners of the Series of Bonds (or portion thereof) secured by said Credit Facility, by an instrument in writing, executed and delivered to the Trustee, to direct the time, method and place of conducting all remedial proceedings available to the Trustee under the Master Indenture, or exercising any trust or power conferred on the Trustee by the Master Indenture. Said direction shall be controlling to the extent the direction of Owners of the Series of Bonds (or portion thereof) secured by said Credit Facility would have been controlling under this Article. If the Credit 59 60 ARTICLE XI Section and Section 11.07 being defined to include the events specified as “Events of Default” in Article X hereof, but not including any notice or periods of grace provided for therein); provided THE TRUSTEE; THE PAYING AGENT AND REGISTRAR that, except in the case of a default in payment of principal or interest or Redemption Price, the Trustee may withhold such notice so long as it in good faith determines that such withholding is SECTION 11.01. Acceptance of Trust. The Trustee accepts and agrees to execute in the interest of the Bondholders. The Trustee shall not be deemed to have notice of any default the trusts hereby created, but only upon the additional terms set forth in this Article XI, to all of other than a payment default under the Indenture or a notification by a Credit Facility Issuer of a which the parties hereto, the Bondholders and any Credit Facility Issuer agree. The Trustee shall default under its Credit Facility, unless notified in writing of such default by the Holders of at act as Trustee for the Bonds. Subject to the provisions of Section 11.03 hereof, the Trustee shall least a majority of the aggregate principal amount of the Outstanding Bonds of a Series. The have only such duties as are expressly set forth herein, and no duties shall be implied on the part Trustee may, however, at any time require of the Issuer full information as to the performance of of the Trustee. The Trustee further agrees to comply with the procedures and covenants, any covenant hereunder, and if information satisfactory to it is not forthcoming, the Trustee may applicable to it, contained in any arbitrage rebate agreement to which it is a party for so long as make or cause to be made, at the expense of the Issuer, an investigation into the affairs of the compliance is necessary in order to maintain the exclusion from gross income for federal income Issuer. tax purposes of interest on the Bonds, to the extent applicable. SECTION 11.07. Obligation to Act on Defaults. The Trustee shall be under no SECTION 11.02. No Responsibility for Recitals. The recitals, statements and obligation to take any action in respect of any default or otherwise, unless it is requested in representations in this Master Indenture or in the Bonds, save only the Trustee’s Certificate, if writing to do so by the Holders of at least a majority of the aggregate principal amount of the any, upon the Bonds, have been made by the Issuer and not by the Trustee and the Trustee shall Outstanding Bonds which are or would be, upon the taking of such action, subject to remedial be under no responsibility for the correctness thereof. proceedings under Article X of this Master Indenture if in its opinion such action may tend to involve expense or liability, and unless it is also furnished with indemnity satisfactory to it. SECTION 11.03. Trustee May Act Through Agents; Answerable Only for Willful Misconduct or Negligence. The Trustee may execute any powers hereunder and perform any SECTION 11.08. Reliance by Trustee. The Trustee may act on any requisition, duties required of it through attorneys, agents, officers or employees, and shall be entitled to resolution, notice, telegram, facsimile transmission, request, consent, waiver, certificate, advice of Counsel concerning all questions hereunder; the Trustee shall not be answerable for the statement, affidavit, voucher, bond, or other paper or document which it in good faith believes to default or misconduct of any attorney or agent selected and supervised by it with reasonable care. be genuine and to have been passed, signed or given by the persons purporting to be authorized The Trustee shall not be answerable for the exercise of any discretion or power under the Master (which in the case of the Issuer shall be a Responsible Officer) or to have been prepared and

C-34 Indenture nor for anything whatever in connection with the trust hereunder, except only its own furnished pursuant to any of the provisions of the Indenture; the Trustee shall be under no duty to negligence or willful misconduct or breach of its obligations hereunder. make any investigation as to any statement contained in any such instrument, but may accept the same as conclusive evidence of the accuracy of such statement. SECTION 11.04. Compensation and Indemnity. The Issuer shall pay the Trustee reasonable compensation for its services hereunder, and also all its reasonable expenses and SECTION 11.09. Trustee May Deal in Bonds. The Trustee may in good faith buy, disbursements, and shall indemnify and hold the Trustee harmless against any liabilities which it sell, own, hold and deal in any of the Bonds and may join in any action which any Bondholders may incur in the proper exercise and performance of its powers and duties hereunder, except may be entitled to take with like effect as if the Trustee were not a party to the Indenture. The with respect to its own willful misconduct, negligence or breach of its obligations hereunder. If Trustee may also engage in or be interested in any financial or other transaction with the Issuer; the Issuer defaults in respect of the foregoing obligations, the Trustee may deduct the amount provided, however, that if the Trustee determines that any such relation is in conflict with its owing to it from any moneys coming into its hands under the Indenture but exclusive of the duties under the Indenture, it shall eliminate the conflict or resign as Trustee. Rebate Fund and moneys from a drawing on any Credit Facility, which right of payment shall be prior to the right of the holders of the Bonds. This provision shall survive the termination of the SECTION 11.10. Construction of Ambiguous Provisions. The Trustee may construe Master Indenture and, as to any Trustee, its removal or resignation as Trustee. any ambiguous or inconsistent provisions of the Indenture, and except as otherwise provided in Article XIII of this Master Indenture, any construction by the Trustee shall be binding upon the SECTION 11.05. No Duty to Renew Insurance. The Trustee shall be under no duty Bondholders. The Trustee shall give prompt notice to the Issuer of any intention to make such to effect or to renew any insurance policy nor shall it incur any liability for the failure of the construction. Issuer to require or effect or renew insurance or to report or file claims of loss thereunder. SECTION 11.11. Resignation of Trustee. The Trustee may resign and be discharged SECTION 11.06. Notice of Default; Right to Investigate. The Trustee shall give of the trusts created by the Indenture by written resignation filed with the Secretary of the Issuer written notice by first-class mail to registered Holders of a Series of Bonds of all defaults known not less than sixty (60) days before the date when such resignation is to take effect; provided, to the Trustee, unless such defaults have been remedied (the term “defaults” for purposes of this however, that (i) if any Outstanding Bonds are not registered Bonds, notice of such resignation is 61 62 published at least once a week for three (3) consecutive calendar weeks in at least one SECTION 11.14. Qualification of Successor. A successor Trustee shall be a national Authorized Newspaper and at least once in The Bond Buyer, or its successor, if any, the first bank with trust powers or a bank or trust company with trust powers, having a combined net publication to appear not less than three (3) weeks prior to the date when the resignation is to capital and surplus of at least $50,000,000. take effect; and that (ii) if any Outstanding Bonds are registered Bonds, notice of such resignation shall be sent by first-class mail to each Bondholder as its name and address appears SECTION 11.15. Instruments of Succession. Any successor Trustee shall execute, on the Bond Register and to any Paying Agent, Registrar, Authenticating Agent and Credit acknowledge and deliver to the Issuer an instrument accepting such appointment hereunder and Facility Issuer, if any, at least sixty (60) days before the resignation is to take effect. Such thereupon, such successor Trustee, without any further act, deed, or conveyance, shall become resignation shall take effect on the day specified in the Trustee’s notice of resignation unless a fully vested with all the estates, properties, rights , powers, trusts, duties and obligations of its successor Trustee is previously appointed, in which event the resignation shall take effect predecessor in trust hereunder, with like effect as if originally named Trustee herein. The immediately on the appointment of such successor; provided, however, that notwithstanding the Trustee ceasing to act hereunder, after deducting all amounts owed to the Trustee, shall pay over foregoing, such resignation shall not take effect until a successor Trustee has been appointed. If to the successor Trustee all moneys held by it hereunder and, upon request of the successor a successor Trustee has not been appointed within ninety (90) days after the Trustee has given its Trustee, the Trustee ceasing to act and the Issuer shall execute and deliver an instrument or notice of resignation, the Trustee may petition any court of competent jurisdiction for the instruments prepared by the Issuer transferring to the successor Trustee all the estates, properties, appointment of a temporary successor Trustee to serve as Trustee until a successor Trustee has rights, powers and trusts hereunder of the predecessor Trustee, except for its rights under Section been duly appointed. Notice of such resignation shall also be given to any rating agency that 11.04 hereof. shall then have in effect a rating on any of the Bonds. SECTION 11.16. Merger of Trustee. Any corporation into which any Trustee SECTION 11.12. Removal of Trustee. The Trustee may be removed at any time by hereunder may be merged or with which it may be consolidated, or any corporation resulting either (a) the Issuer, if no default exists under the Indenture, or (b) an instrument or concurrent from any merger or consolidation to which any Trustee or its Corporate Trust Department instruments in writing, executed by the Owners of at least a majority of the aggregate principal hereunder shall be a party, shall be the successor Trustee under the Indenture, without the amount of the Bonds then Outstanding and filed with the Issuer. A photographic copy of any execution or filing of any paper or any further act on the part of the parties hereto, anything instrument or instruments filed with the Issuer under the provisions of this paragraph, duly herein to the contrary notwithstanding; provided, however, that any such successor corporation certified by a Responsible Officer, shall be delivered promptly by the Issuer to the Trustee and to continuing to act as Trustee hereunder shall meet the requirements of Section 11.14 hereof, and any Paying Agent, Registrar, Authenticating Agent and Credit Facility Issuer, if any. if such corporation does not meet the aforesaid requirements, a successor Trustee shall be appointed pursuant to this Article XI.

C-35 The Trustee may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provision of SECTION 11.17. Extension of Rights and Duties of Trustee to Paying Agent and the Indenture with respect to the duties and obligations of the Trustee by any court of competent Registrar. The provisions of Sections 11.02, 11.03, 11.04, 11.08, 11.09 and 11.10 hereof are jurisdiction upon the application of the Issuer or the Holders of not less than a majority of the hereby made applicable to the Paying Agent and the Registrar, as appropriate, and any Person aggregate principal amount of the Bonds then Outstanding. serving as Paying Agent and/or Registrar, hereby enters into and agrees to comply with the covenants and agreements of the Indenture applicable to the Paying Agent and Registrar, SECTION 11.13. Appointment of Successor Trustee. If the Trustee or any successor respectively. Trustee resigns or is removed or dissolved, or if its property or business is taken under the control of any state or federal court or administrative body, a vacancy shall forthwith exist in the SECTION 11.18. Resignation of Paying Agent or Registrar. The Paying Agent or office of the Trustee, and the Issuer shall appoint a successor and (i) if any Outstanding Bonds Registrar may resign and be discharged of the duties created by the Master Indenture by are not registered bonds, shall publish notice of such appointment in an Authorized Newspaper executing an instrument in writing resigning such duties and specifying the date when such and in The Bond Buyer, or its successor, if any, and (ii) if any Outstanding Bonds are registered resignation shall take effect, and filing the same with the Issuer, the Trustee, and any rating Bonds, shall mail notice of such appointment by first-class mail to each Bondholder as its name agency that shall then have in effect a rating on any of the Bonds, not less than forty-five (45) and address appear on the Bond Register, and to the Paying Agent, Registrar, Authenticating days before the date specified in such instrument when such resignation shall take effect, and by Agent, Credit Facility Issuer, if any, and any rating agency that shall then have in effect a rating giving written notice of such resignation not less than three (3) weeks prior to such resignation on any of the Bonds. If no appointment of a successor Trustee shall be made pursuant to the date to the Bondholders, mailed to their addresses as such appear in the Bond Register. Such foregoing provisions of this Master Indenture prior to the date specified in the notice of resignation shall take effect on the date specified in such instrument and notice, but only if a resignation or removal as the date when such resignation or removal was to take effect, the successor Paying Agent or Registrar shall have been appointed as hereinafter provided, in which Holders of a majority in aggregate principal amount of all Bonds then Outstanding may appoint a event such resignation shall take effect immediately upon the appointment of such successor successor Trustee. Paying Agent or Registrar. If the successor Paying Agent or Registrar shall not have been appointed within a period of ninety (90) days following the giving of notice, then the Paying 63 64 Agent or Registrar shall be authorized to petition any court of competent jurisdiction to appoint a SECTION 11.23. Acceptance of Duties by Successor Paying Agent or Registrar. successor Paying Agent or Registrar as provided in Section 11.22 hereof. Any successor Paying Agent or Registrar shall become duly vested with all the estates, property, rights, powers, duties and obligations of its predecessor hereunder, with like effect as if SECTION 11.19. Removal of Paying Agent or Registrar. The Paying Agent or originally named Paying Agent or Registrar herein. Upon request of such Paying Agent or Registrar may be removed at any time prior to any Event of Default by the Issuer by filing with Registrar, such predecessor Paying Agent or Registrar and the Issuer shall execute and deliver an the Paying Agent or Registrar to be removed, and with the Trustee, an instrument or instruments instrument transferring to such successor Paying Agent or Registrar all the estates, property, in writing executed by the Issuer appointing a successor, or an instrument or instruments in rights and powers hereunder of such predecessor Paying Agent or Registrar and such predecessor writing designating, and accompanied by an instrument or appointment by the Issuer of, such Paying Agent or Registrar shall pay over and deliver to the successor Paying Agent or Registrar successor. Such removal shall be effective thirty (30) days (or such longer period as may be set all moneys and other assets at the time held by it hereunder. forth in such instrument) after delivery of the instrument; provided, however, that no such removal shall be effective until the successor Paying Agent or Registrar appointed hereunder SECTION 11.24. Successor by Merger or Consolidation. Any corporation into shall execute, acknowledge and deliver to the Issuer an instrument accepting such appointment which any Paying Agent or Registrar hereunder may be merged or converted or with which it hereunder. may be consolidated, or any corporation resulting from any merger or consolidation to which any Paying Agent or Registrar hereunder shall be a party, shall be the successor Paying Agent or SECTION 11.20. Appointment of Successor Paying Agent or Registrar. In case at Registrar under the Indenture without the execution or filing of any paper or any further act on any time the Paying Agent or Registrar shall be removed, or be dissolved, or if its property or the part of the parties thereto, anything in the Indenture to the contrary notwithstanding. affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy, or for any other reason, then a vacancy shall forthwith and [END OF ARTICLE XI] ipso facto exist in the office of the Paying Agent or Registrar, as the case may be, and a successor shall be appointed by the Issuer; and in case at any time the Paying Agent or Registrar shall resign, then a successor shall be appointed by the Issuer. After any such appointment, notice of such appointment shall be given by the Issuer to the predecessor Paying Agent or Registrar, the successor Paying Agent or Registrar, the Trustee, any rating agency that shall then have in effect a rating on any of the Bonds, and all Bondholders. Any new Paying Agent or Registrar so appointed shall immediately, and without further act, supersede the predecessor

C-36 Paying Agent or Registrar.

SECTION 11.21. Qualifications of Successor Paying Agent or Registrar. Every successor Paying Agent or Registrar (a) shall be a commercial bank or trust company (i) duly organized under the laws of the United States or any state or territory thereof, (i) authorized by law to perform all the duties imposed upon it by the Indenture and (iii) capable of meeting its obligations hereunder, and (b) shall have a combined net capital and surplus of at least $50,000,000.

SECTION 11.22. Judicial Appointment of Successor Paying Agent or Registrar. In case at any time the Paying Agent or Registrar shall resign and no appointment of a successor Paying Agent or Registrar shall be made pursuant to the foregoing provisions of this Master Indenture prior to the date specified in the notice of resignation as the date when such resignation is to take effect, the retiring Paying Agent or Registrar may forthwith apply to a court of competent jurisdiction for the appointment of a successor Paying Agent or Registrar. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor Paying Agent or Registrar. Notice of such appointment shall be given by the Successor Registrar or Paying Agent to the Issuer, the Trustee, any rating agency that shall then have in effect a rating on any of the Bonds, and all Bondholders. In the absence of such an appointment, the Trustee shall become the Registrar or Paying Agent, or and shall so notify the Issuer, any rating agency that shall have issued a rating on the Bonds, and all Bondholders. 65 66 ARTICLE XII ARTICLE XIII

ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP OF BONDS AMENDMENTS AND SUPPLEMENTS

SECTION 12.01. Acts of Bondholders; Evidence of Ownership of Bonds. Any SECTION 13.01. Amendments and Supplements Without Bondholders’ Consent. action to be taken by Bondholders may be evidenced by one or more concurrent written This Master Indenture and any Supplemental Indenture may be amended or supplemented, from instruments of similar tenor signed or executed by such Bondholders in person or by an agent time to time, without the consent of the Bondholders, by a Supplemental Indenture authorized by appointed in writing. The fact and date of the execution by any person of any such instrument a Certified Resolution of the Issuer filed with the Trustee, for one or more of the following may be provided by acknowledgment before a notary public or other officer empowered to take purposes: acknowledgments or by an affidavit of a witness to such execution. Any action by the Owner of any Bond shall bind all future Owners of the same Bond in respect of anything done or suffered (a) to add additional covenants of the Issuer or to surrender any right or power by the Issuer, Trustee, Paying Agent or Registrar in pursuance thereof. herein conferred upon the Issuer;

[END OF ARTICLE XII] (b) for any purpose not inconsistent with the terms of the Indenture, or to cure any ambiguity or to cure, correct or supplement any defective provision (whether because of any inconsistency with any other provision hereof or otherwise) of the Indenture, in such manner as shall not impair the security hereof or thereof or adversely affect the rights and remedies of the Bondholders;

(c) to provide for the execution of any and all contracts and other documents as may be required in order to effectuate the conveyance of any Project to the State, the County or any department, agency or branch thereof, or any other unit of government of the State or the County; provided, however, that the Issuer shall have caused to be delivered to the Trustee an opinion of Bond Counsel stating that such conveyance shall not impair the security hereof or adversely affect the rights and remedies of the Bondholders; and C-37 (d) to make such changes as may be necessary in order to reflect amendments to Chapters 170, 190 and 197, F.S., so long as, in the opinion of counsel to the Issuer, such changes either: (i) do not have an adverse effect on the Holders of the Bonds; or (ii) if such changes do have an adverse effect, that they nevertheless are required to be made as a result of such amendments.

SECTION 13.02. Amendments With Bondholders’ Consent. Subject to the provisions of Section 13.03 hereof, this Master Indenture may be amended from time to time by a Supplemental Indenture and any Supplemental Indenture approved by the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding in the case of the Master Indenture, and of the Series of Bonds then outstanding and secured by such Supplemental Indenture in the case of amendment of a Supplemental Indenture; provided that with respect to (a) the interest payable upon any Bonds, (b) the dates of maturity or redemption provisions of any Bonds, (c) this Article XIII and (d) the security provisions hereunder or under any Supplemental Indenture, which may only be amended by approval of the Owners of all Bonds to be so amended.

SECTION 13.03. Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel. The Trustee is authorized to join in the execution and delivery of any supplemental indenture or amendment permitted by this Article XIII and in so doing may rely on 67 68 a written opinion of Counsel that such supplemental indenture or amendment is so permitted and ARTICLE XIV has been duly authorized by the Issuer and that all things necessary to make it a valid and binding agreement have been done. DEFEASANCE

[END OF ARTICLE XIII] SECTION 14.01. Defeasance. When interest on, and principal or Redemption Price (as the case may be) of, the Bonds of a Series or any portion thereof to be defeased have been paid, or there shall have been deposited with the Trustee or such other escrow agent designated in a Certified Resolution of the Issuer (the “Escrow Agent”) moneys sufficient, or Defeasance Securities, the principal of and interest on which, when due, together with any moneys, remaining uninvested, will provide sufficient moneys to fully pay (i) such Bonds of a Series or portion thereof to be defeased, and (ii) any other sums payable hereunder by the Issuer, the right, title and interest of the Trustee with respect to such Bonds of a Series or portion thereof to be defeased shall thereupon cease, the lien of the Indenture on the Pledged Revenues, and the Funds and Accounts established under the Indenture shall be defeased and discharged, and the Trustee, on demand of the Issuer, shall release the Indenture as to such Bonds of a Series or portion thereof to be so defeased and shall execute such documents to evidence such release as may be reasonably required by the Issuer and shall turn over to the Issuer or to such Person, body or authority as may be entitled to receive the same all balances remaining in any Series Funds and Accounts upon the defeasance in whole of all of the Bonds of a Series.

SECTION 14.02. Deposit of Funds for Payment of Bonds. If the Issuer deposits with the Escrow Agent moneys sufficient, or Defeasance Securities, the principal of and interest on which, when due, together with any moneys remaining uninvested, will provide sufficient moneys to pay the principal or Redemption Price of any Bonds of a Series becoming due, either at maturity or by redemption or otherwise, together with all interest accruing thereon to the date

C-38 of maturity or such prior redemption, and reimburses or causes to be reimbursed or pays or causes to be paid the other amounts required to be reimbursed or paid under Section 14.01 hereof, interest on such Bonds of a Series shall cease to accrue on such date of maturity or prior redemption and all liability of the Issuer with respect to such Bonds of a Series shall likewise cease, except as hereinafter provided; provided, however, that (a) if any Bonds are to be redeemed prior to the maturity thereof, notice of the redemption thereof shall have been duly given in accordance with the provisions of Section 8.02 hereof, or irrevocable provision satisfactory to the Trustee shall have been duly made for the giving of such notice, and (b) in the event that any Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days following a deposit of moneys with the Escrow Agent, in accordance with this Section, the Issuer shall have given the Escrow Agent, in form satisfactory to the Escrow Agent, irrevocable instructions to mail to the Owners of such Bonds at their addresses as they appear on the Bond Register, a notice stating that a deposit in accordance with this Section has been made with the Escrow Agent and that the Bonds to which such notice relates are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price (as the case may be) of, and interest on, said Bonds of a Series. Thereafter such Bonds shall be deemed not to be Outstanding hereunder and the Owners of such Bonds shall be restricted exclusively to the funds so deposited for any claim of whatsoever nature with respect to such Bonds, and the Escrow Agent shall hold such funds in trust for such Owners. At the time of the deposit referred to

69 70 above, there shall be delivered to the Escrow Agent a verification from a firm of independent ARTICLE XV certified public accountants stating that the principal of and interest on the Defeasance Securities, together with the stated amount of any cash remaining on deposit with the Escrow Agent, will MISCELLANEOUS PROVISIONS be sufficient without reinvestment to pay the remaining principal of, redemption premium, if any, and interest on such defeased Bonds. SECTION 15.01. Limitations on Recourse. No personal recourse shall be had for any claim based on the Indenture or the Bonds against any member of the Board of the Issuer, Money so deposited with the Escrow Agent which remains unclaimed three (3) years officer, employee or agent, past, present or future, of the Issuer or of any successor body as such, after the date payment thereof becomes due shall, upon request of the Issuer, if the Issuer is not either directly or through the Issuer or any such successor body, under any constitutional at the time to the knowledge of the Escrow Agent in default with respect to any covenant in the provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise. Indenture or the Bonds contained, be paid to the Issuer; and the Owners of the Bonds for which the deposit was made shall thereafter be limited to a claim against the Issuer; provided, however, The Bonds are payable solely from the Pledged Revenues, and any other moneys held by that the Escrow Agent, before making payment to the Issuer, may, at the expense of the Issuer, the Trustee under the Indenture for such purpose. There shall be no other recourse under the cause a notice to be published in an Authorized Newspaper, stating that the money remaining Bonds, the Indenture or otherwise, against the Issuer or any other property now or hereafter unclaimed will be returned to the Issuer after a specified date. owned by it.

[END OF ARTICLE XIV] SECTION 15.02. Payment Dates. In any case where an Interest Payment Date or the maturity date of the Bonds or the date fixed for the redemption of any Bonds shall be other than a Business Day, then payment of interest, principal or Redemption Price need not be made on such date but may be made on the next succeeding Business Day, with the same force and effect as if made on the due date, and no interest on such payment shall accrue for the period after such due date if payment is made on such next succeeding Business Day.

SECTION 15.03. No Rights Conferred on Others. Nothing herein contained shall confer any right upon any Person other than the parties hereto and the Holders of the Bonds.

SECTION 15.04. Illegal Provisions Disregarded. If any term of the Indenture or the C-39 Bonds or the application thereof for any reason or circumstances shall to any extent be held invalid or unenforceable, the remaining provisions or the application of such terms or provisions to Persons and situations other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each remaining term and provision hereof and thereof shall be valid and enforced to the fullest extent permitted by law.

SECTION 15.05. Substitute Notice. If for any reason it shall be impossible to make duplication of any notice required hereby in a newspaper or newspapers, then such publication in lieu thereof as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice.

SECTION 15.06. Notices. Any notice, demand, direction, request or other instrument authorized or required by the Indenture to be given to or filed with the Issuer or the Trustee shall be deemed to have been sufficiently given or filed for all purposes of the Indenture if and when personally delivered and receipted for, or sent by registered United States mail, return receipt requested, addressed as follows:

71 72 (a) As to the Issuer -

Midtown Miami Community Development District IN WITNESS WHEREOF, Midtown Miami Community Development District has c/o Severn Trent Services caused this Master Indenture to be executed by the Chairman of its Board and attested by the 210 N. University Drive, Suite 802 Secretary or Assistant Secretary of its Board and Wachovia Bank, National Association, has Coral Springs, Florida 33071 caused this Master Indenture to be executed by one of its Authorized Signatories, all as of the Attention: District Manager day and year first above written.

(b) As to the Trustee - MIDTOWN MIAMI COMMUNITY Wachovia Bank, National Association DEVELOPMENT DISTRICT 200 S. Biscayne Boulevard 14th Floor [SEAL] Miami, FL 33131 Attention: Corporate Trust Department Attest: By: Any of the foregoing may, by notice sent to each of the others, designate a different or Deborah Samuel, Chairman additional address to which notices under the Indenture are to be sent. Board of Supervisors ______All documents received by the Trustee under the provisions of the Indenture and not Aaron Newman, Secretary required to be redelivered shall be retained in its possession, subject at all reasonable times to the Board of Supervisors inspection of the Issuer, any Consultant, any Bondholder and the agents and representatives thereof as evidence in writing. WACHOVIA BANK, NATIONAL SECTION 15.07. Controlling Law. The Master Indenture shall be governed by and ASSOCIATION, as Trustee, Paying Agent C-40 construed in accordance with the laws of the State. and Registrar [SEAL] SECTION 15.08. Successors and Assigns. All the covenants, promises and agreements in the Master Indenture contained by or on behalf of the Issuer or by or on behalf of By: ______the Trustee shall bind and inure to the benefit of their respective successors and assigns, whether Vivian Cerecedo so expressed or not. Vice President

SECTION 15.09. Headings for Convenience Only. The table of contents and descriptive headings in this Master Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

SECTION 15.10. Counterparts. This Master Indenture may be executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument.

SECTION 15.11. Appendices and Exhibits. Any and all appendices or exhibits referred to in and attached to this Master Indenture are hereby incorporated herein and made a part hereof for all purposes.

73 S-1 STATE OF FLORIDA ) STATE OF FLORIDA ) ) SS: ) SS: COUNTY OF MIAMI-DADE ) COUNTY OF MIAMI-DADE )

On this ___ day of July, 2004, before me, a notary public in and for the State and County On this ___ day of July, 2004, before me, a notary public in and for the State and County aforesaid, personally appeared Deborah Samuel and Aaron Newman, Chairman and Secretary, aforesaid, personally appeared Vivian Cerecedo, a Vice President of Wachovia Bank, National respectively, of the Board of Supervisors of Midtown Miami Community Development District, Association, as Trustee, who acknowledged that he/she did sign said instrument as such officer who acknowledged that they did sign the foregoing instrument as such officers, respectively, for for and on behalf of said national banking association; that the same is his/her free act and deed and on behalf of Midtown Miami Community Development District; and that the same is their as such officer and the free act and deed of said national banking association; and that the seal free act and deed as such officers, respectively, and the free act and deed of Midtown Miami affixed to said instrument is the seal of said national banking association. Community Development District. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year in this certificate first above written. day and year in this certificate first above written.

NOTARY PUBLIC, STATE OF FLORIDA NOTARY PUBLIC, STATE OF FLORIDA

(Name of Notary Public, Print, Stamp or Type as Commissioned) (Name of Notary Public, Print, Stamp or Type as Commissioned) Personally known to me, or Produced identification:

C-41 Personally known to me, or Produced identification: (Type of Identification Produced)

(Type of Identification Produced) DID take an oath, or DID NOT take an oath.

S-2 S-3 EXHIBIT A EXHIBIT B

LEGAL DESCRIPTION OF DESCRIPTION OF THE PROJECT MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT The Project includes the following improvements:

The present boundaries of Midtown Miami Community Development District are as Component Estimated Cost follows: Roadways $5,597,737 Water/Sewer 2,290,822 Drainage 2,791,286 Streetscape/Landscape 6,387,668 Irrigation 510,013 Plaza #P1 3,617,019 Overall Improvements 5,136,166 Parking Garages 45,337,889 Midblock Plaza & Misc. Public Improvements 5,866,130 Total $77,534,730 C-42

A-1 B-1 EXHIBIT C of business on the fifteenth day of the calendar month preceding each interest payment date or the date on which the principal of a Bond is to be paid (the “Record Date”). Such interest shall [FORM OF BOND] be payable from the most recent interest payment date next preceding the date of authentication hereof to which interest has been paid, unless the date of authentication hereof is a May 1 or The following legend shall appear on the Bond only if the Bonds are privately placed: November 1 to which interest has been paid, in which case from the date of authentication hereof, or unless such date of authentication is prior to [______1, ____], in which case THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF from [______1, _____], or unless the date of authentication hereof is between a Record 1933, AS AMENDED, BASED UPON THE EXEMPTION FROM REGISTRATION Date and the next succeeding interest payment date, in which case from such interest payment AVAILABLE UNDER SECTION 3(a)(2) THEREOF, AND MAY BE SOLD OR date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be OTHERWISE TRANSFERRED ONLY TO AN “ACCREDITED INVESTOR”, AS SUCH payable to the registered owner on such Record Date and may be paid to the person in whose TERM IS DEFINED IN 17 C.F.R. SECTION 230.501(a), OR ANY SUCCESSOR name this Bond is registered at the close of business on a Special Record Date for the payment of PROVISION THERETO, IN ACCORDANCE WITH APPLICABLE FEDERAL AND such defaulted interest to be fixed by the Paying Agent, notice whereof shall be given to STATE SECURITIES LAWS AND OTHERWISE IN ACCORDANCE WITH THE Bondholders of record as of the fifth (5th) day prior to such mailing, at their registered addresses, PROVISIONS OF THE INDENTURE REFERRED TO BELOW. not less than ten (10) days prior to such Special Record Date, or may be paid, at any time in any other lawful manner, as more fully provided in the Indenture (defined below).

R-______$______REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS UNITED STATES OF AMERICA BOND SET FORTH ON THE REVERSE SIDE HEREOF AND SUCH FURTHER STATE OF FLORIDA PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT FORTH ON THE FRONT SIDE HEREOF. SPECIAL ASSESSMENT BOND SERIES _____ THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY OUT OF THE PLEDGED REVENUES PLEDGED THEREFOR UNDER THE INDENTURE AND NEITHER THE PROPERTY, THE FULL FAITH AND CREDIT, NOR THE TAXING Interest Rate Maturity Date Date of Original Issuance CUSIP POWER OF THE ISSUER, MIAMI-DADE COUNTY, FLORIDA, THE CITY OF MIAMI,

C-43 FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED AS SECURITY FOR THE PAYMENT OF THE BONDS, EXCEPT THAT THE ISSUER IS OBLIGATED UNDER THE INDENTURE TO LEVY AND TO EVIDENCE AND Registered Owner: CERTIFY, OR CAUSE TO BE CERTIFIED, FOR COLLECTION, SPECIAL ASSESSMENTS (AS DEFINED IN THE INDENTURE) TO SECURE AND PAY THE BONDS. THE BONDS Principal Amount: DO NOT CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, MIAMI-DADE COUNTY FLORIDA, THE CITY OF MIAMI, FLORIDA, THE STATE OF FLORIDA, OR ANY KNOW ALL PERSONS BY THESE PRESENTS that Midtown Miami Community POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY Development District (the “Issuer”), for value received, hereby promises to pay to the registered CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. owner shown above or registered assigns, on the date specified above, from the sources hereinafter mentioned, upon presentation and surrender hereof at the corporate trust office of This Bond shall not be valid or become obligatory for any purpose or be entitled to any Wachovia Bank, National Association, in Miami, Florida, as paying agent (said national banking benefit or security under the Indenture until it shall have been authenticated by execution of the association and/or any bank or trust company to become successor paying agent being herein Trustee, or such other authenticating agent as may be appointed by the Trustee under the called the “Paying Agent”), the Principal Amount set forth above with interest thereon at the Indenture, of the certificate of authentication endorsed hereon. Interest Rate per annum set forth above, computed on a 360-day year of 30-day months, payable on the first day of ______of each year. Principal of this Bond is payable at the corporate trust office of Wachovia Bank, National Association, located in Miami, Florida, in lawful money of the United States of America. Interest on this Bond is payable by check or draft of the Paying Agent made payable to the registered owner and mailed on each Interest Payment Date to the address of the registered owner as such name and address shall appear on the registry books of the Issuer maintained by Wachovia Bank, National Association, as Registrar (said national banking association and any successor Registrar being herein called the “Registrar”) at the close

C-1 C-2 IN WITNESS WHEREOF, Midtown Miami Community Development District has CERTIFICATE OF AUTHENTICATION caused this Bond to be signed by the facsimile signature of the Chairman of its Board of Supervisors, and attested by the facsimile signature of the Secretary of its Board of Supervisors, This Bond is one of the Bonds delivered pursuant to the within mentioned Indenture. as of the date hereof. Date of Authentication: ______MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT Wachovia Bank, National Association, as Trustee

By: Deborah Samuel, Chairman, By: Board of Supervisors Authorized Officer Attest:

By:______Aaron Newman, Secretary, Board of Supervisors C-44

C-3 C-4 [Back of Bond] for in the Indenture, except for Special Assessments to be assessed and levied by the Issuer as set forth in the Indenture. This Bond is one of an authorized issue of Bonds of Midtown Miami Community Development District, a community development district duly created, organized and existing By the acceptance of this Bond, the registered or beneficial owner hereof assents to all under Chapter 190, Florida Statutes (the Uniform Community Development District Act of the provisions of the Indenture. 1980), as amended (the “Act”) and by Ordinance No. 03-271 of the Board of County Commissioners of Miami-Dade County, Florida, effective on December 26, 2003, designated as This Bond is payable from and secured by Pledged Revenues, as such term is defined in Midtown Miami Community Development District, Special Assessment Bonds (the “Bonds”), in the Indenture, all in the manner provided in the Indenture. The Indenture provides for the levy the aggregate principal amount of ______Dollars and the evidencing and certifying, of non ad valorem assessments in the form of Special ($______) of like date, tenor and effect, except as to number. The Bonds are being issued Assessments together with Interlocal Agreement Revenues to secure and pay the Bonds. under authority of the laws and Constitution of the State of Florida, including particularly the Act, to pay a portion of the costs of the planning, financing, acquisition, construction of master The Bonds are subject to redemption prior to maturity in the amounts, at the times and in infrastructure consisting of roadways, water and sewer facilities, a stormwater management the manner provided below. All payments of the redemption price of the Bonds shall be made system, streetscape and landscape, and a parking garage for the special benefit of the District on the dates specified below. Upon any redemption of Bonds other than in accordance with Lands or portions thereof. The Bonds shall be issued as fully registered Bonds in authorized scheduled Sinking Fund Installments, the Issuer shall cause to be recalculated and delivered to denominations, as set forth in the Indenture. The Bonds are issued under and secured by a the Trustee revised Sinking Fund Installments recalculated so as to amortize the Outstanding Master Trust Indenture dated as of ______, 2004 (the “Master Indenture”), as amended and principal amount of Bonds in substantially equal annual installments of principal and interest supplemented by a First Supplemental Trust Indenture dated as of ______, 2004 (the (subject to rounding to Authorized Denominations of principal) over the remaining term of the “Supplemental Indenture” and together with the Master Indenture, the “Indenture”), each by and Bonds. The Sinking Fund Installments as so recalculated shall not result in an increase in the between the Issuer and the Trustee, executed counterparts of which are on file at the corporate aggregate of the Sinking Fund Installments for all Bonds in any year. In the event of a trust office of the Trustee in Miami, Florida. redemption or purchase occurring less than 45 days prior to a date on which a Sinking Fund Installment is due, the foregoing recalculation shall not be made to Sinking Fund Installments Reference is hereby made to the Indenture for the provisions, among others, with respect due in the year in which such redemption or purchase occurs, but shall be made to Sinking Fund to the custody and application of the proceeds of the Bonds issued under the Indenture, the Installments for the immediately succeeding and subsequent years. operation and application of the Debt Service Fund and other Funds and Accounts (each as

C-45 defined in the Indenture) charged with and pledged to the payment of the principal of, premium, Optional Redemption if any, and the interest on the Bonds, the levy and the evidencing and certifying for collection, of Special Assessments, the nature and extent of the security for the Bonds, the terms and The Bonds are subject to redemption at the option of the Issuer in whole or in part at any conditions on which the Bonds are issued, the rights, duties and obligations of the Issuer and of time on or after ______1, ____, at the redemption prices (expressed as percentages of the Trustee under the Indenture, the conditions under which such Indenture may be amended principal amount to be redeemed) set forth below, plus accrued interest to the redemption date, without the consent of the registered owners of Bonds, the conditions under which such upon notice from the Issuer to the Trustee as set forth in the Indenture. Indenture may be amended with the consent of the registered owners of a majority in aggregate Redemption Period principal amount of the Bonds outstanding, and as to other rights and remedies of the registered (Both Dates Inclusive) Redemption Price owners of the Bonds. ______1, ____ to ______31, ____ % The registered or beneficial owner of this Bond shall have no right to enforce the ______1, ____ to ______31, ____ provisions of the Indenture or to institute action to enforce the covenants therein, or to take any ______1, ____ and thereafter action with respect to any event of default under the Indenture or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. Mandatory Sinking Fund Redemption It is expressly agreed by the registered or beneficial owner of this Bond that such registered owner shall never have the right to require or compel the exercise of the ad valorem The Bonds are subject to mandatory sinking fund redemption on ______1 in the taxing power of the Issuer, Miami-Dade County, Florida, The City of Miami, Florida, the State years and in the principal amounts set forth below at a redemption price of 100% of their of Florida or any political subdivision thereof, or taxation in any form of any real or personal principal amount plus accrued interest to the date of redemption. Such principal amounts shall property of the Issuer, Miami-Dade County, Florida, The City of Miami, Florida, the State of be reduced as specified by the Issuer by the principal amount of any Bonds redeemed pursuant to Florida or any political subdivision thereof, for the payment of the principal of, premium, if any, optional or extraordinary mandatory redemption as set forth above or purchased and cancelled and interest on this Bond or the making of any other sinking fund and other payments provided pursuant to the provisions of the Indenture.

C-5 C-6 Principal Amount Principal Amount Indenture. If less than all of the Bonds shall be called for redemption, the notice of redemption of Bonds of Bonds shall specify the Bonds to be redeemed. On the redemption date, the Bonds called for Year to be Paid Year to be Paid redemption will be payable at the designated corporate trust office of the Paying Agent and on such date interest shall cease to accrue, such Bonds shall cease to be entitled to any benefit under the Indenture and such Bonds shall not be deemed to be outstanding under the provisions of the Indenture and the registered owners of such Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. If the amount of funds so deposited with the Trustee, or otherwise available, is insufficient to pay the redemption price and interest on all Bonds so called for redemption on such date, the Trustee shall redeem and pay on such date an amount of such Bonds for which such funds are sufficient, selecting the Bonds to be redeemed by lot from among all such Bonds called for redemption on such date, and interest on any Bonds Extraordinary Mandatory Redemption in Whole or in Part not paid shall continue to accrue, as provided in the Indenture.

The Bonds are subject to extraordinary mandatory redemption prior to maturity by the Partial Redemption of Bonds. If less than all the Bonds of a maturity are to be redeemed, Issuer in whole, on any date, or in part, on any interest payment date, at an extraordinary the Trustee shall select the particular Bonds or portions of Bonds to be redeemed by lot in such mandatory redemption price equal to 100% of the principal amount of the Bonds to be redeemed, reasonable manner as the Trustee in its discretion may determine. In the case of any partial plus interest accrued to the redemption date, (i) from moneys deposited into the Bond redemption of Bonds pursuant to an optional redemption, such redemption shall be effectuated Redemption Fund following the payment in full of Special Assessments on any portion of the by redeeming Bonds of such maturities in such manner as shall be specified by the Issuer in District Lands in accordance with the provisions of the Section 9.08(a) of the Indenture; (ii) from writing, subject to the provisions of the Indenture. In the case of any partial redemption of moneys deposited into the Bond Redemption Fund following the payment in full of Special Bonds pursuant to an extraordinary mandatory redemption, such redemption shall be effectuated Assessments on any portion of the District Lands as a result of any prepayment of Special by redeeming Bonds pro rata among the maturities, treating each date on which a Sinking Fund Assessments in accordance with the provisions of Section 9.08(b) of the Indenture; (iii) when Installment is due as a separate maturity for such purpose, with the portion to be redeemed from sufficient moneys are on deposit in the related Funds and Accounts (other than the Rebate Fund) each maturity being equal to the product of the aggregate principal amount of Bonds to be to pay and redeem all Outstanding Bonds and accrued interest thereon to the redemption date in redeemed multiplied times a fraction the numerator of which is the principal amount of Bonds of addition to all amounts owed to Persons under the Indenture; (iv) from moneys in excess of the such maturity outstanding immediately prior to the redemption date and the denominator of

C-46 Debt Service Reserve Requirement in the Debt Service Reserve Fund transferred to the Bond which is the aggregate principal amount of all Bonds outstanding immediately prior to the Redemption Fund pursuant to the Indenture; (v) from excess moneys transferred from the redemption date. Revenue Fund to the Bond Redemption Fund in accordance with the Indenture; or (vi) from moneys, if any, on deposit in the Bond Redemption Fund following condemnation or the sale of The Issuer shall keep books for the registration of the Bonds at the corporate trust office any portion of the District Lands benefitted by the Project to a governmental entity under threat of the Registrar in Miami, Florida. Subject to the restrictions contained in the Indenture, the of condemnation by such governmental entity or the damage or destruction of all or substantially Bonds may be transferred or exchanged by the registered owner thereof in person or by his all of the Project when such moneys are not to be used pursuant to the Indenture to repair, attorney duly authorized in writing only upon the books of the Issuer kept by the Registrar and replace or restore the Project; provided, however, that at least forty-five (45) days prior to such only upon surrender thereof together with a written instrument of transfer satisfactory to the extraordinary mandatory redemption, the Issuer shall cause to be delivered to the Trustee Registrar duly executed by the registered owner or his duly authorized attorney. In all cases in (x) notice setting forth the redemption date and (y) a certificate of the Consulting Engineer which the privilege of transferring or exchanging Bonds is exercised, the Issuer shall execute and confirming that the repair and restoration of the Project would not be economical or would be the Trustee or such other authenticating agent as may be appointed by the Trustee under the impracticable; or (vii) from amounts transferred to the Series Account of the Bond Redemption Indenture shall authenticate and deliver a new Bond or Bonds in authorized form and in like Fund from the Series Account of the Acquisition and Construction Fund. aggregate principal amount in accordance with the provisions of the Indenture. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or accompanied by a Notice of Redemption written instrument of transfer in form satisfactory to the Trustee, Paying Agent or the Registrar, duly executed by the Bondholder or his attorney duly authorized in writing. Transfers and The Trustee shall cause notice of redemption to be mailed at least thirty but not more than exchanges shall be made without charge to the Bondholder, except that the Issuer or the Trustee sixty days prior to the date of redemption to all registered owners of Bonds to be redeemed (as may require payment of a sum sufficient to cover any tax or other governmental charge that may such owners appear on the books of the Registrar on the fifth (5th) day prior to such mailing) and be imposed in connection with any transfer or exchange of Bonds. Neither the Issuer nor the to certain additional parties as set forth in the Indenture; provided, however, that failure to mail Registrar on behalf of the Issuer shall be required (i) to issue, transfer or exchange any Bond any such notice or any defect in the notice or the mailing thereof shall not affect the validity of during a period beginning at the opening of business fifteen (15) days before the day of mailing the redemption of the Bonds for which such notice was duly mailed in accordance with the of a notice of redemption of Bonds selected for redemption and ending at the close of business

C-7 C-8 on the day of such mailing, or (ii) to transfer or exchange any Bond so selected for redemption in STATEMENT OF VALIDATION whole or in part. This Bond is one of a series of Bonds which were validated by judgment of the Circuit The Issuer, the Trustee, the Paying Agent and the Registrar may deem and treat the Court of the Eleventh Judicial Circuit of Florida, in and for Miami-Dade County, Florida, person in whose name any Bond shall be registered upon the books kept by the Registrar as the rendered on the 3rd day of May, 2004. absolute owner thereof (whether or not such Bond shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other than the Issuer, the Trustee, the Paying Agent or the Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and interest on such Bond as the same becomes due, and for all other purposes. All such payments so made to any such registered owner or upon his order shall ______be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the Chairman sum or sums so paid, and neither the Issuer, the Trustee, the Paying Agent, nor the Registrar shall be affected by any notice to the contrary. ______It is hereby certified and recited that all acts, conditions and things required to exist, to Secretary happen, and to be performed, precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and ABBREVIATIONS Constitution of the State of Florida applicable thereto, including particularly the Act, and that the issuance of this Bond, and of the issue of the Bonds of which this Bond is one, is in full The following abbreviations, when used in the inscription on the face of the within Bond, compliance with all constitutional and statutory limitations or provisions. shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in common TEN ENT - as tenants by the entireties C-47 JT TEN - as joint tenants with rights of survivorship and not as tenants in common

UNIFORM GIFT MIN ACT - ______Custodian ______(Cust) (Minor)

Under Uniform Gifts to Minors

Act______(State)

Additional abbreviations may also be used though not in the above list.

C-9 C-10 ASSIGNMENT AND TRANSFER EXHIBIT D

FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto FORM OF REQUISITION

______MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT ______SPECIAL ASSESSMENT BONDS (please print or typewrite name and address of assignee) SERIES ____

______The undersigned, a Responsible Officer of Midtown Miami Community Development District (the “District”) hereby submits the following requisition for disbursement under and the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints pursuant to the terms of the Trust Indenture from the District to Wachovia Bank, National Association, as trustee (the “Trustee”), dated as of July 1, 2004 (the “Indenture”), (all capitalized ______terms used herein shall have the meaning ascribed to such term in the Indenture):

______(A) Requisition Number:

Attorney to transfer the within Bond on the books kept for registration thereof, with full power of (B) Name of Payee: substitution in the premises.

Signature Guarantee: (C) Amount Payable:

(D) Purpose for which paid or incurred (refer also to specific contract if amount is due and payable pursuant to a contract involving progress

C-48 payments, or, state Costs of Issuance, if applicable): NOTICE: Signature(s) must be guaranteed NOTICE: The signature to this assignment by a member firm of the New York Stock must correspond with the name of the Exchange or a commercial bank or trust registered owner as it appears upon the face (E) Fund or Account from which disbursement to be made: company of the within Bond in every particular, without alteration or enlargement or any The undersigned hereby certifies that: change whatsoever. 1. obligations in the stated amount set forth above have been incurred by the District, or Please insert social security or other identifying number of Assignee. this requisition is for Costs of Issuance payable from the Acquisition and Construction Fund that have not previously been paid;

2. each disbursement set forth above is a proper charge against the Acquisition and Construction Fund;

3. each disbursement set forth above was incurred in connection with the acquisition and/or construction of the Project;

4. each disbursement represents a Cost of the Project which has not previously been paid.

C-11 D-1 The undersigned hereby further certifies that there has not been filed with or served upon CONSULTING ENGINEER’S APPROVAL FOR the District notice of any lien, right to lien, or attachment upon, or claim affecting the right to NON-COST OF ISSUANCE REQUESTS ONLY receive payment of, any of the moneys payable to the Payee set forth above, which has not been released or will not be released simultaneously with the payment hereof. If this requisition is for a disbursement from other than Costs of Issuance, the undersigned Consulting Engineer hereby certifies that this disbursement is for a Cost of the Project and is The undersigned hereby further certifies that such requisition contains no item consistent with: (i) the applicable acquisition or construction contract; (ii) the plans and representing payment on account of any retained percentage which the District is at the date of specifications for the portion of the Project with respect to which such disbursement is being such certificate entitled to retain. made; and (iii) the report of the Consulting Engineer, as such report shall have been amended or modified on the date hereof. Attached hereto are originals of the invoice(s) from the vendor of the property acquired or the services rendered with respect to which disbursement is hereby requested.

MIDTOWN MIAMI COMMUNITY Consulting Engineer DEVELOPMENT DISTRICT

By: Responsible Officer

DEVELOPERS’ APPROVAL FOR NON-COST OF ISSUANCE REQUESTS ONLY

If this requisition is for a disbursement from other than Costs of Issuance, the undersigned Developers hereby approve of this disbursement for a Cost of the Project.

MIDTOWN PARTNERS, LLC, a Florida limited

C-49 liability company

By: ______Print Name: ______Title: Member Representative

DDR MIAMI AVENUE, LLC, a Delaware limited liability company

By: Developers Diversified Realty Corporation, an Ohio corporation, Its sole member

By: ______Name: ______Title:______

D-2 D-3

TABLE OF CONTENTS

Page ARTICLE I DEFINITIONS ...... 4

ARTICLE II THE SERIES 2004 BONDS ...... 10 ______SECTION 2.01. Amounts and Terms of Series 2004 Bonds; Issue of Series FIRST SUPPLEMENTAL TRUST INDENTURE 2004 Bonds ...... 10 ______SECTION 2.02. Execution ...... 10 SECTION 2.03. Authentication...... 10 BETWEEN SECTION 2.04. Purpose, Designation and Denominations of, and Interest Accruals on, the Series 2004 Bonds ...... 10 SECTION 2.05. Debt Service on the Series 2004 Bonds...... 12 MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT SECTION 2.06. Disposition of Series 2004 Bond Proceeds...... 12 SECTION 2.07. Book-Entry Form of Series 2004 Bonds...... 13 SECTION 2.08. Appointment of Registrar and Paying Agent...... 13 AND ARTICLE III REDEMPTION OF SERIES 2004 BONDS ...... 14

WACHOVIA BANK, NATIONAL ASSOCIATION SECTION 3.01. Redemption Dates and Prices ...... 14 As Trustee SECTION 3.02. Notice of Redemption...... 18 ARTICLE IV ESTABLISHMENT OF CERTAIN FUNDS AND ACCOUNTS; PREPAYMENTS; REMOVAL OF SPECIAL ASSESSMENT LIENS .....19 ______

C-50 SECTION 4.01. Establishment of Certain Funds and Accounts ...... 19 Dated as of July 1, 2004 SECTION 4.02. Series 2004 Revenue Account ...... 22 ______SECTION 4.03. Power to Issue Series 2004 Bonds and Create Lien ...... 24 SECTION 4.04. Series 2004 Project to Conform to Plans and Specifications; Changes...... 24 Authorizing and Securing SECTION 4.05. Prepayments; Removal of Special Assessment Liens ...... 25 MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT ARTICLE V MISCELLANEOUS PROVISIONS...... 26 (MIAMI-DADE COUNTY, FLORIDA) SECTION 5.01. Interpretation of Supplemental Indenture ...... 26 $73,580,000 SPECIAL ASSESSMENT AND REVENUE BONDS, SERIES 2004A SECTION 5.02. Amendments ...... 26 SECTION 5.03. Counterparts...... 26 $30,020,000 SPECIAL ASSESSMENT BONDS, SERIES 2004B SECTION 5.04. Appendices and Exhibits...... 26 SECTION 5.05. Payment Dates ...... 26 SECTION 5.06. No Rights Conferred on Others ...... 26 SECTION 5.07. Collection of Assessments ...... 26

EXHIBIT A DESCRIPTION OF SERIES 2004 PROJECT EXHIBIT B FORM OF SERIES 2004A BOND EXHIBIT C FORM OF SERIES 2004B BOND

i THIS FIRST SUPPLEMENTAL TRUST INDENTURE (the “First Supplemental WHEREAS, the proceeds of the Series 2004B Bonds will be used to provide funds for (i) Indenture”), dated as of July 1, 2004 between MIDTOWN MIAMI COMMUNITY the payment of a portion of the costs of the Series 2004B Project, (ii) the payment of interest on DEVELOPMENT DISTRICT (the “Issuer” or the “District”), a local unit of special-purpose the Series 2004B Bonds through November 1, 2007, (iii) the funding of the Series 2004B Debt government organized and existing under the laws of the State of Florida, and Wachovia Bank, Service Reserve Account, and (iv) payment of the costs of issuance of the Series 2004B Bonds; National Association (said banking association and any bank or trust company becoming and successor trustee under this First Supplemental Indenture being hereinafter referred to as the “Trustee”); WHEREAS, the Series 2004A Bonds and the Series 2004B Bonds will be secured on a parity by a pledge of Special Assessments levied on the District Lands (as hereinafter defined) to W I T N E S S E T H: the extent provided herein; and

WHEREAS, the Issuer is a local unit of special purpose government duly organized and WHEREAS, the Series 2004A Bonds will be additionally secured by a pledge of the existing under the provisions of the Uniform Community Development District Act of 1980, Interlocal Agreement Revenues (defined in the Master Trust Indenture) to the extent provided Chapter 190, Florida Statutes, as amended (the “Act”), by Ordinance No. 03-271 of the Board of herein; and County Commissioners of Miami-Dade County, Florida, effective on December 26, 2003; and NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH, WHEREAS, the premises to be governed by the Issuer are described more fully in that to provide for the issuance of the Series 2004 Bonds, the security and payment of the Exhibit A to the Master Trust Indenture, dated as of July 1, 2004 between the District and the principal or redemption price thereof (as the case may be) and interest thereon, the rights of the Trustee (the “Master Indenture”), referred to as the “District Lands” and consist of Bondholders and the performance and observance of all of the covenants contained herein and in approximately 57 acres of land located entirely within the City of Miami, Florida (the “City”) in said Series 2004 Bonds, and for and in consideration of the mutual covenants herein contained Miami-Dade County, Florida (the “County”); and and of the purchase and acceptance of the Series 2004 Bonds by the Owners thereof, from time to time, and of the acceptance by the Trustee of the trusts hereby created, and intending to be WHEREAS, the Issuer has been created for the purpose of delivering certain community legally bound hereby, the Issuer does hereby assign, transfer, set over and pledge to Wachovia development services and facilities for the benefit of the District Lands; and Bank, National Association, as Trustee, its successors in trust and its assigns forever, and grants a lien on all of the right, title and interest of the Issuer in and to the Pledged Revenues WHEREAS, the Issuer has determined to undertake, in one or more stages, the (hereinafter defined) as security for the payment of the principal, redemption or purchase price of acquisition and construction of certain master infrastructure consisting of parking garages, and a (as the case may be) and interest on the Series 2004 Bonds issued hereunder, all in the manner public plaza (the “Series 2004A Project”), and roadways, water and sewer facilities, a hereinafter provided, and the Issuer further hereby agrees with and covenants unto the Trustee as C-51 stormwater management system, streetscape and landscape (the “Series 2004B Project” and follows: collectively with the Series 2004A Project, the “Series 2004 Project”) pursuant to the Act for the special benefit of the District Lands (as further described in Exhibit A hereto), as set forth in the TO HAVE AND TO HOLD the same and any other revenues, property, contracts or Midtown Miami Community Development District, Assessment Methodology Report, dated contract rights, accounts receivable, chattel paper, instruments, general intangibles or other rights March 3, 2004, as supplemented by a Supplemental Assessment Methodology Report, dated and the proceeds thereof, which may, by delivery, assignment or otherwise, be subject to the lien June 18, 2004, prepared by Fishkind & Associates, Inc. (the “Assessment Methodology”) and created by the Indenture with respect to the Series 2004 Bonds. Resolution 2004-17 adopted by the Board of Supervisors of the Issuer on March 2, 2004; and IN TRUST NEVERTHELESS, for the equal and ratable benefit and security of all WHEREAS, pursuant to the Master Indenture and this First Supplemental Indenture present and future Owners of the Series 2004 Bonds issued and to be issued under this First (hereinafter sometimes collectively referred to as the “Indenture”), the Issuer has determined to Supplemental Indenture, without preference, priority or distinction as to lien or otherwise (except issue $73,580,000 aggregate principal amount of Midtown Miami Community Development as otherwise specifically provided in this First Supplemental Indenture) of any one Series 2004 District (Miami-Dade County, Florida) Special Assessment and Revenue Bonds, Series 2004A Bond over any other Series 2004 Bond, all as provided in the Indenture. (the “Series 2004A Bonds”) and $30,020,000 aggregate principal amount of Midtown Miami Community Development District (Miami-Dade County, Florida) Special Assessment Bonds, PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly Series 2004B (the “Series 2004B Bonds” and together with the Series 2004A Bonds, the “Series pay, or cause to be paid, or make due provision for the payment of the principal or redemption 2004 Bonds”); and price of the Series 2004 Bonds issued, secured and Outstanding hereunder and the interest due or to become due thereon, at the times and in the manner mentioned in such Series 2004 Bonds and WHEREAS, the proceeds of the Series 2004A Bonds will be used to provide funds for (i) the Indenture, according to the true intent and meaning thereof and hereof, and the Issuer shall the payment of a portion of the costs of the Series 2004A Project, (ii) the payment of interest on well and truly keep, perform and observe all the covenants and conditions pursuant to the terms the Series 2004A Bonds through November 1, 2007, (iii) the funding of the Series 2004A Debt of the Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Service Reserve Account, and (iv) payment of the costs of issuance of the Series 2004A Bonds; Trustee all sums of money due or to become due to it in accordance with the terms and and provisions hereof, then upon such final payments this First Supplemental Indenture and the rights

2 hereby granted shall cease and terminate, otherwise this First Supplemental Indenture to be and ARTICLE I remain in full force and effect. DEFINITIONS

In this First Supplemental Indenture capitalized terms used without definition shall have the meanings ascribed thereto in the Master Indenture and, in addition, the following terms shall have the meanings specified below, unless otherwise expressly provided or unless the context otherwise requires:

“Acquisition Agreement” shall mean one or more improvement acquisition agreements relating to the Series 2004 Project, between the Developers and the Issuer.

“Arbitrage Certificate” shall mean that certain Arbitrage Certificate, including arbitrage rebate covenants, of the Issuer, dated as of July 28, 2004, relating to certain restrictions on arbitrage under the Code.

“Assessment Resolutions” shall mean Resolutions 2004-17, 2004-18, and 2004-21 of the Issuer dated March 2, 2004, April 7, 2004 and April 7, 2004, as amended and supplemented from time to time.

“Authorized Denomination” shall mean, with respect to the Series 2004 Bonds, initially minimum denominations of $100,000 and any integral multiple of $5,000 in excess thereof, and thereafter, denominations of $5,000 and any integral multiple thereof.

“Capitalized Interest” shall mean interest due or to become due on the Series 2004A Bonds and the Series 2004B Bonds, which will be paid, or is expected to be paid, from the proceeds of the Series 2004A Bonds and the Series 2004B Bonds, respectively. C-52 “Continuing Disclosure Agreement” shall mean one or more continuing disclosure agreements for the benefit of the owners of the Series 2004A Bonds and the Series 2004B Bonds, to be entered into between the Issuer, the Developers, the City, the County, and Digital Assurance Certification, L.L.C., as dissemination agent, each dated as of July 28, 2004, in connection with the issuance of the Series 2004 Bonds.

“Defeasance Securities” shall mean, with respect to the Series 2004 Bonds, to the extent permitted by law, (a) cash deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in clause (b) hereof), and (b) direct obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of Treasury), which are non-callable and non- prepayable.

“Developers” shall mean, collectively, Midtown Partners, LLC, and DDR Miami Avenue, LLC, and any entities which succeed to all or any part of the interests and assumes any or all of the responsibilities of said entities, as the master developers of the District Lands.

“Indenture” shall mean collectively, the Master Indenture and this First Supplemental Indenture.

“Interest Payment Date” shall mean May 1 and November 1 of each year, commencing November 1, 2004.

3 4 “Master Indenture” shall mean the Master Trust Indenture, dated as of July 1, 2004 by “Series 2004 Bonds” shall mean the Series 2004A Bonds and the Series 2004B Bonds. and between the Issuer and the Trustee, as supplemented and amended with respect to matters pertaining solely to the Master Indenture or the Series 2004 Bonds (as opposed to supplements or “Series 2004 Interest Account” shall mean the Account so designated, established as a amendments relating to Series of Bonds other than the Series 2004 Bonds as specifically defined separate account within the Debt Service Fund pursuant to Section 4.01(d) of this First in this First Supplemental Indenture). Supplemental Indenture.

“Paying Agent” shall mean Wachovia Bank, National Association, and its successors and “Series 2004 Principal Account” shall mean the Account so designated, established as a assigns as Paying Agent hereunder. separate account within the Debt Service Fund pursuant to Section 4.01(c) of this First Supplemental Indenture. “Pledged Revenues” shall mean (i) with respect to the Series 2004 Bonds, (a) all revenues received by the Issuer from Special Assessments levied and collected on the District “Series 2004 Revenue Account” shall mean the Account so designated, established as a Lands benefited by the Series 2004 Project, including, without limitation, amounts received from separate account within the Revenue Fund pursuant to Section 4.01(b) of this First Supplemental any foreclosure proceeding for the enforcement of collection of such Special Assessments or Indenture. from the issuance and sale of tax certificates with respect to such Special Assessments, and (b) all moneys on deposit in the Funds and Accounts established under the Indenture; provided, “Series 2004A Acquisition and Construction Account” shall mean the Account so however, that Pledged Revenues shall not include (A) any moneys transferred to the Rebate designated, established as a separate account within the Acquisition and Construction Fund Fund, or investment earnings thereon and (B) “special assessments” levied and collected by the pursuant to Section 4.01(a) of this First Supplemental Indenture. Issuer under Section 190.022 of the Act for maintenance purposes or “maintenance special assessments” levied and collected by the Issuer under Section 190.021(3) of the Act (it being “Series 2004A Bonds” shall mean the $73,580,000 aggregate principal amount of expressly understood that the lien and pledge of the Indenture shall not apply to any of the Midtown Miami Community Development District (Miami-Dade County, Florida) Special moneys described in the foregoing clauses (A) and (B) of this proviso), and (ii) with respect to Assessment and Revenue Bonds, Series 2004A, to be issued as fully registered Bonds in the Series 2004A Bonds only, in addition to the revenues described in (i) above, all Interlocal accordance with the provisions of the Master Indenture and this First Supplemental Indenture, Agreement Revenues (as defined in the Master Indenture) received by the Issuer pursuant to the and secured and authorized by the Master Indenture and this First Supplemental Indenture. Interlocal Agreement (as defined in the Master Indenture) and deposited in the Revenue Fund “Series 2004A Capitalized Interest Subaccount” shall mean the subaccount so designated, hereunder. established as a separate subaccount within the Series 2004 Interest Account of the Debt Service “Prepayment” shall mean the payment by any owner of property of the amount of Special Fund pursuant to Section 4.01(d) of this First Supplemental Indenture. C-53 Assessments encumbering its property, in whole or in part, prior to its scheduled due date, “Series 2004A Debt Service Reserve Account” shall mean the Account so designated, including optional prepayments and prepayments which become due pursuant to the “true-up” established as a separate account within the Debt Service Reserve Fund pursuant to Section mechanism contained in the Assessment Resolutions. “Prepayments” shall include, without 4.01(f) of this First Supplemental Indenture. limitation, Series 2004A Prepayment Principal and Series 2004B Prepayment Principal. “Series 2004A Debt Service Reserve Requirement” shall mean, with respect to the Series “Registrar” shall mean Wachovia Bank, National Association, and its successors and 2004A Bonds, an amount equal to the lesser of (i) the maximum annual Debt Service assigns as Registrar hereunder. Requirement (on a calendar year basis) for the Outstanding Series 2004A Bonds, (ii) 125% of the “Regular Record Date” shall mean the fifteenth day (whether or not a Business Day) of average annual Debt Service Requirement for Outstanding Series 2004A Bonds, and (iii) 10% of the calendar month next preceding each Interest Payment Date. the original stated principal amount (within the meaning of the Code) of the Series 2004A Bonds. “Resolution” shall mean, collectively, (i) Resolution 2004-13 of the Issuer dated January 7, 2004, pursuant to which the Issuer authorized the issuance of not exceeding $110,000,000 “Series 2004A General Account” shall mean the account so designated, established as a aggregate principal amount of its special assessment bonds to finance the acquisition and separate account under the Series 2004 Bond Redemption Fund pursuant to Section 4.01(g) of construction of a certain master infrastructure consisting of roadways, water and sewer facilities, this First Supplemental Indenture. a stormwater management system, streetscape and landscape, and parking garages for the special “Series 2004A Interest Subaccount” shall mean the account so designated, established as benefit of the District Lands or portions thereof, and (ii) Resolution 2004-24 of the Issuer dated a separate subaccount under the Series 2004 Interest Account pursuant to section 4.01(d) of this June 22, 2004, pursuant to which the Issuer authorized the issuance of the Series 2004A Bonds First Supplemental Indenture. and the Series 2004B Bonds in an aggregate principal amount not exceeding $110,000,000, to finance the Series 2004 Project, specifying the details of the Series 2004 Bonds and delegating “Series 2004A Prepayment Account” shall mean the account so designated, established authority to the Chairman to award and sell the Series 2004 Bonds. as a separate account under the Series 2004 Bond Redemption Fund pursuant to Section 4.01(g) of this First Supplemental Indenture. “Series 2004 Bond Redemption Fund” shall mean the Series 2004 Bond Redemption Fund established pursuant to Section 4.01(g) of this First Supplemental Indenture. 5 6 “Series 2004A Prepayment Principal” shall mean the portion of a Prepayment “Series 2004B Prepayment Account” shall mean the account so designated, established as corresponding to the principal amount of Series 2004A Special Assessments being prepaid. a separate account under the Series 2004 Bond Redemption Fund pursuant to section 4.01(g) of this First Supplemental Indenture. “Series 2004A Principal Subaccount” shall mean the subaccount so designated, established as a separate subaccount under the Series 2004 Principal Account pursuant to Section “Series 2004B Prepayment Principal” shall mean the portion of a Prepayment 4.01(d) of the First Supplemental Indenture. corresponding to the principal amount of Series 2004B Special Assessments being prepaid.

“Series 2004A Revenue Subaccount” shall mean the subaccount so designated, “Series 2004B Principal Subaccount” shall mean the Account so designated, established established as a separate subaccount within the Series 2004 Revenue Account pursuant to as a separate subaccount under the Series 2004 Principal Account pursuant to section 4.01(d) of Section 4.01(b) of this First Supplemental Indenture. this First Supplemental Indenture.

“Series 2004A Sinking Fund Account” shall mean the Account so designated, established “Series 2004B Revenue Subaccount” shall mean the subaccount so designated, as a separate account within the Debt Service Fund pursuant to Section 4.01(e) of this First established as a separate subaccount within the Series 2004 Revenue Account pursuant to Supplemental Indenture. Section 4.01(b) of this First Supplemental Indenture.

“Series 2004A Special Assessments” shall mean a portion of the Special Assessments “Series 2004B Sinking Fund Account” shall mean the Account so designated, established levied, corresponding in amount to the debt service on the Series 2004A Bonds. as a separate account within the Debt Service Fund pursuant to Section 4.01(e) of this First Supplemental Indenture. “Series 2004B Acquisition and Construction Account” shall mean the Account so designated, established as a separate account within the Acquisition and Construction Fund “Series 2004B Special Assessments” shall mean a portion of the Special Assessments pursuant to Section 4.01(a) of this First Supplemental Indenture. levied, corresponding in amount to the debt service on the Series 2004B Bonds.

“Series 2004B Bonds” shall mean the $30,020,000 aggregate principal amount of “Special Assessments” shall mean (a) the net proceeds derived from the levy and Midtown Miami Community Development District (Miami-Dade County, Florida) Special collection of “special assessments”, as provided for in Sections 190.011(14) and 190.022 of the Assessment Bonds, Series 2004B, to be issued as fully registered Bonds in accordance with the Act (except for any such special assessments levied and collected for maintenance purposes), provisions of the Master Indenture and this First Supplemental Indenture, and secured and against the District Lands or any portion thereof, and (b) the net proceeds derived from the levy authorized by the Master Indenture and this First Supplemental Indenture. and collection of “benefit special assessments”, as provided for in Section 190.021(2) of the Act,

C-54 against the District Lands or any portion thereof, and in the case of both “special assessments” “Series 2004B Capitalized Interest Subaccount” shall mean the subaccount so designated, and “benefit special assessments”, including the interest and penalties on such assessments, established as a separate subaccount within the Series 2004 Interest Account of the Debt Service pursuant to all applicable provisions of the Act and Chapter 170, Florida Statutes, and Chapter Fund pursuant to Section 4.01(d) of this First Supplemental Indenture. 197, Florida Statutes (and any successor statutes thereto), including, without limitation, any amount received from any foreclosure proceeding for the enforcement of collection of such “Series 2004B Debt Service Reserve Account” shall mean the account so designated, assessments or from the issuance and sale of tax certificates with respect to such assessments, established as a separate account within the Debt Service Reserve Fund pursuant to Section less (to the extent applicable) the fees and costs of collection thereof payable to the Tax Collector 4.01(f) of this First Supplemental Indenture. and less certain administrative costs payable to the Property Appraiser pursuant to the Property Appraiser and Tax Collector Agreement. “Special Assessments” shall include the Series 2004A “Series 2004B Debt Service Reserve Requirement” shall mean, with respect to the Series Special Assessments and the Series 2004B Special Assessments, but shall not include 2004B Bonds, an amount equal to the lesser of (i) the maximum annual Debt Service “maintenance special assessments” levied and collected by the Issuer under Section 190.021(3) Requirement (on a calendar year basis) for the Outstanding Series 2004B Bonds, (ii) 125% of the of the Act. average annual Debt Service Requirement for Outstanding Series 2004B Bonds, and (iii) 10% of the original stated principal amount (within the meaning of the Code) of the Series 2004B Bonds. The words “hereof”, “herein”, “hereto”, “hereby”, and “hereunder” (except in the forms of Series 2004 Bonds), refer to the entire Indenture. “Series 2004B General Account” shall mean the Account so designated, established as a separate account within the Series 2004 Bond Redemption Fund pursuant to Section 4.01(g) of Every “request”, “requisition”, “order”, “demand”, “application”, “notice”, “statement”, this First Supplemental Indenture. “certificate”, “consent”, or similar action hereunder by the Issuer shall, unless the form or execution thereof is otherwise specifically provided, be in writing signed by the Chairman or “Series 2004B Interest Subaccount” shall mean the subaccount so designated, established Vice Chairman and the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary as a separate subaccount within the Series 2004 Interest Account pursuant to Section 4.01(d) of or Responsible Officer of the Issuer. the First Supplemental Indenture.

7 8 All words and terms importing the singular number shall, where the context requires, ARTICLE II import the plural number and vice versa. THE SERIES 2004 BONDS [End of Article I] SECTION 2.01. Amounts and Terms of Series 2004 Bonds; Issue of Series 2004 Bonds. No Series 2004 Bonds may be issued under this First Supplemental Indenture except in accordance with the provisions of this Article and Articles II and III of the Master Indenture.

(a) The total principal amount of Series 2004 Bonds that may be issued under this First Supplemental Indenture is expressly limited to $103,600,000. The Series 2004A Bonds shall be numbered consecutively from AR-1 and upwards. The Series 2004B Bonds shall be numbered consecutively from BR-1 and upwards.

(b) Any and all Series 2004 Bonds shall be issued substantially in the forms attached hereto as Exhibit B and Exhibit C, as the case may be, with such appropriate variations, omissions and insertions as are permitted or required by the Indenture and with such additional changes as may be necessary or appropriate to conform to the provisions of the Resolution. The Issuer shall issue the Series 2004 Bonds upon execution of this First Supplemental Indenture and satisfaction of the requirements of Section 3.01 of the Master Indenture; and the Trustee shall, at the Issuer’s request, authenticate such Series 2004 Bonds and deliver them as specified in the request.

SECTION 2.02. Execution. The Series 2004 Bonds shall be executed by the Issuer as set forth in the Master Indenture.

SECTION 2.03. Authentication. The Series 2004 Bonds shall be authenticated as set forth in the Master Indenture. No Series 2004 Bond shall be valid until the certificate of

C-55 authentication shall have been duly executed by the Trustee, as provided in the Master Indenture.

SECTION 2.04. Purpose, Designation and Denominations of, and Interest Accruals on, the Series 2004 Bonds.

(a) The Series 2004A Bonds are being issued hereunder in order to provide funds (i) for the payment of a portion of the costs of the Series 2004A Project, (ii) for the payment of interest on the Series 2004A Bonds through November 1, 2007, (iii) to fund the Series 2004A Debt Service Reserve Account, and (iv) to pay a portion of the costs of issuance of the Series 2004A Bonds. The Series 2004A Bonds shall be designated “Midtown Miami Community Development District (Miami-Dade County, Florida) Special Assessment and Revenue Bonds, Series 2004A”, and shall be issued as fully registered bonds without coupons in Authorized Denominations.

(b) The Series 2004B Bonds are being issued hereunder in order to provide funds (i) for the payment of a portion of the costs of the Series 2004B Project, (ii) for the payment of interest on the Series 2004B Bonds through November 1, 2007, (iii) to fund the Series 2004B Debt Service Reserve Account, and (iv) to pay a portion of the costs of issuance of the Series 2004B Bonds. The Series 2004B Bonds shall be designated “Midtown Miami Community Development District (Miami-Dade County, Florida) Special Assessment Bonds, Series 2004B”, and shall be issued as fully registered bonds without coupons in Authorized Denominations.

(c) The Series 2004 Bonds shall be dated July 28, 2004. Interest on the Series 2004 Bonds shall be payable on each Interest Payment Date to maturity or prior redemption. Interest 9 10 on the Series 2004 Bonds shall be payable from the most recent Interest Payment Date next preceding the date of authentication thereof to which interest has been paid, unless the date of authentication thereof is a May 1 or November 1 to which interest has been paid, in which case SECTION 2.05. Debt Service on the Series 2004 Bonds. from such date of authentication, or unless the date of authentication thereof is prior to November 1, 2004, in which case from July 28, 2004 or unless the date of authentication thereof (a) The Series 2004A Bonds will mature on May 1, 2024 and May 1, 2037, and bear is between a Record Date and the next succeeding Interest Payment Date, in which case from interest at the rate of 6.000% per annum and 6.250% per annum, respectively, subject to the right such Interest Payment Date. of prior redemption in accordance with their terms.

(d) Except as otherwise provided in Section 2.07 of this First Supplemental Indenture (b) The Series 2004B Bonds will mature on May 1, 2037, and bear interest at the rate in connection with a book entry only system of registration of the Series 2004 Bonds, the of 6.500% per annum, subject to the right of prior redemption in accordance with their terms. principal or Redemption Price of the Series 2004 Bonds shall be payable in lawful money of the United States of America at the designated corporate trust office of the Paying Agent upon (c) Interest on the Series 2004 Bonds will be computed in all cases on the basis of a presentation of such Series 2004 Bonds. Except as otherwise provided in Section 2.07 of this 360 day year of twelve 30 day months. Interest on overdue principal and, to the extent lawful, First Supplemental Indenture in connection with a book entry only system of registration of the on overdue interest will be payable at the numerical rate of interest borne by the Series 2004 Series 2004 Bonds, the payment of interest on the Series 2004 Bonds shall be made on each Bonds on the day before the default occurred. Interest Payment Date to the Owners of the Series 2004 Bonds by check or draft drawn on the SECTION 2.06. Disposition of Series 2004 Bond Proceeds. Paying Agent and mailed on the applicable Interest Payment Date to each Owner as such Owner appears on the Bond Register maintained by the Registrar as of the close of business on the (a) From the proceeds of the Series 2004A Bonds received by the Regular Record Date, at his address as it appears on the Bond Register. Any interest on any Trustee, Series 2004 Bond which is payable, but is not punctually paid or provided for on any Interest Payment Date (hereinafter called “Defaulted Interest”) shall be paid to the Owner in whose name (i) $14,779,800.00 representing Capitalized Interest shall be the Series 2004 Bond is registered at the close of business on a Special Record Date to be fixed deposited in the Series 2004A Capitalized Interest Subaccount of the Series 2004 by the Trustee, such date to be not more than fifteen (15) nor less than ten (10) days prior to the Interest Account of the Debt Service Fund, date of proposed payment. The Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class, postage-prepaid, (ii) $5,448,450.00 (which is an amount equal to the Series to each Owner of record as of the fifth (5th) day prior to such mailing, at his address as it appears 2004A Debt Service Reserve Requirement) shall be deposited in the Series 2004A in the Bond Register not less than ten (10) days prior to such Special Record Date. The Debt Service Reserve Account of the Debt Service Reserve Fund, and C-56 foregoing notwithstanding, any Owner of Series 2004 Bonds in an aggregate principal amount of at least $1,000,000 shall be entitled to have interest paid by wire transfer to such Owner to the (iii) $53,011,420.40 constituting all remaining proceeds of the bank account number on file with the Paying Agent, upon requesting the same in a writing Series 2004A Bonds, shall be deposited in the Series 2004A Acquisition and received by the Paying Agent at least fifteen (15) days prior to the relevant Interest Payment Construction Account of the Acquisition and Construction Fund to be applied in Date, which writing shall specify the bank, which shall be a bank within the continental United accordance with Article V of the Master Indenture. States, and bank account number to which interest payments are to be wired. Any such request for interest payments by wire transfer shall remain in effect until rescinded or changed, in a (b) From the proceeds of the Series 2004B Bonds received by the writing delivered by the Owner to the Paying Agent, and any such rescission or change of wire Trustee, transfer instructions must be received by the Paying Agent at least fifteen (15) days prior to the relevant Interest Payment Date. (i) $6,357,985.83 representing Capitalized Interest shall be deposited in the Series 2004B Capitalized Interest Subaccount of the Series 2004 Interest Account of the Debt Service Fund,

(ii) $2,277,262.50 (which is an amount equal to the Series 2004B Debt Service Reserve Requirement) shall be deposited in the Series 2004B Debt Service Reserve Account of the Debt Service Reserve Fund, and

(iii) $21,384,751.67 constituting all remaining proceeds of the Series 2004B Bonds, shall be deposited in the Series 2004B Acquisition and Construction Account of the Acquisition and Construction Fund to be applied in accordance with Article V of the Master Indenture.

11 12 The Trustee is hereby authorized and directed to accept additional funds ARTICLE III from the District for the construction and completion of the Series 2004 Project, including funds paid by the Developers under one or more completion REDEMPTION OF SERIES 2004 BONDS agreements, and to deposit such in such account or fund as directed by the District. SECTION 3.01. Redemption Dates and Prices. The Series 2004 Bonds shall be subject to redemption at the times and in the manner provided in Article VIII of the Master Indenture and in this Article III. All payments of the Redemption Price of the Series 2004 Bonds SECTION 2.07. Book-Entry Form of Series 2004 Bonds. The Series 2004 Bonds shall be made on the dates hereinafter required. If less than all the Series 2004 Bonds are to be shall be issued as one fully registered bond per maturity of each series and deposited with The redeemed pursuant to an Extraordinary Mandatory Redemption, the Trustee shall select the Depository Trust Company, New York, New York (“DTC”), which is responsible for Series 2004 Bonds or portions of the Series 2004 Bonds to be redeemed as provided in this establishing and maintaining records of ownership for its participants. Section 3.01. Partial redemptions of Series 2004 Bonds shall be made in such a manner that the remaining Series 2004 Bonds held by each Bondholder shall be in Authorized Denominations, The Issuer and the Trustee shall enter into a letter of representations with DTC providing except for the last remaining Series 2004 Bond of each series. for such book-entry-only system, in accordance with the provisions of Section 2.11 of the Master Indenture. Such agreement may be terminated at any time by either DTC or the Issuer. In the (a) Optional Redemption. event of such termination, the Issuer shall select another securities depository. If the Issuer does not replace DTC, the Trustee will register and deliver to the Beneficial Owners replacement (i) Series 2004A Bonds. The Series 2004A Bonds may, at the option of the Series 2004 Bonds in the form of fully registered Series 2004 Bonds in accordance with the Issuer, be called for redemption prior to maturity as a whole or in part at any time on or after instructions from Cede & Co. May 1, 2014 (less than all Series 2004A Bonds to be selected by lot), at a Redemption Price equal to 100% of the principal amount to be redeemed, plus accrued interest from the most SECTION 2.08. Appointment of Registrar and Paying Agent. The Issuer shall keep, recent Interest Payment Date to the redemption date. at the designated corporate trust office of the Registrar, books (the “Bond Register”) for the registration, transfer and exchange of the Series 2004 Bonds, and hereby appoints Wachovia (ii) Series 2004B Bonds. The Series 2004B Bonds may, at the option of the Bank, National Association, as its Registrar to keep such books and make such registrations, Issuer, be called for redemption prior to maturity as a whole or in part at any time on or after transfers, and exchanges as required hereby. Wachovia Bank, National Association, hereby May 1, 2014 (less than all Series 2004B Bonds to be selected by lot), at a Redemption Price accepts its appointment as Registrar and its duties and responsibilities as Registrar hereunder. equal to the principal amount to be redeemed, plus accrued interest from the most recent Interest

C-57 Registrations, transfers and exchanges shall be without charge to the Bondholder requesting such Payment Date to the redemption date. registration, transfer or exchange, but such Bondholder shall pay any taxes or other governmental charges on all registrations, transfers and exchanges. (b) Extraordinary Mandatory Redemption in Whole or in Part. The Series 2004 Bonds are subject to extraordinary mandatory redemption prior to maturity by the Issuer in The Issuer hereby appoints Wachovia Bank, National Association, as Paying Agent for whole, on any date, or in part, on any Interest Payment Date, at an extraordinary mandatory the Series 2004 Bonds. Wachovia Bank, National Association, hereby accepts its appointment as redemption price equal to 100% of the principal amount of the Series 2004 Bonds to be Paying Agent and its duties and responsibilities as Paying Agent hereunder. redeemed, plus interest accrued to the redemption date, as follows:

(i) from Series 2004A Prepayment Principal deposited into the Series 2004A Prepayment Account or from Series 2004B Prepayment Principal deposited into the Series 2004B Prepayment Account of the Series 2004 Bond Redemption Fund following the payment in whole or in part of Special Assessments on any portion of the District Lands specially benefitted by the Series 2004 Project in accordance with the provisions of Section 4.05(a) of this First Supplemental Indenture, including excess moneys transferred from the Series 2004A Debt Service Reserve Account to the Series 2004A Prepayment Account of the Series 2004 Redemption Fund, or from the Series 2004B Debt Service Reserve Account to the Series 2004B Prepayment Account of the Series 2004 Bond Redemption Fund resulting from such Special Assessment prepayments pursuant to Section 4.01(g)(ii) of this First Supplemental Indenture.

(ii) from moneys, if any, on deposit in the Series 2004A Accounts and Subaccounts or Series 2004B Accounts and Subaccounts in the Series 2004 Funds and Accounts (other than the Rebate Fund) sufficient to pay and redeem all Series

13 14 2004A Outstanding Bonds or all Series 2004B Outstanding Bonds, as the case deposit to the Series 2004A General Account or the Series 2004B General may be, and accrued interest thereon to the redemption date or dates in addition to Account of the Series 2004 Bond Redemption Fund which moneys shall be all amounts owed to Persons under the Master Indenture. applied by the Issuer to redeem Series 2004A Bonds or Series 2004B Bonds in accordance with the manner it has credited such moneys toward extinguishment (iii) on or after the Completion Date of the Series 2004 Project, by of Series 2004A Special Assessments and/or Series 2004B Special Assessments application of moneys remaining in the Series 2004A Acquisition and which the Issuer shall describe to the Trustee in writing; provided, however, that Construction Account or the Series 2004B Acquisition and Construction Account at least forty-five (45) days prior to such extraordinary mandatory redemption, the not reserved by the Issuer for the payment of any remaining part of the Cost of the Issuer shall cause to be delivered to the Trustee (x) notice setting forth the Series 2004 Project, all of which shall be transferred to the Series 2004A General redemption date and (y) a certificate of the Consulting Engineer confirming that Account and the Series 2004B General Account of the Series 2004 Bond the repair and restoration of the Series 2004 Project would not be economical or Redemption Fund, credited toward extinguishment of the Special Assessments would be impracticable. and applied toward the redemption of the Series 2004A Bonds and/or the Series 2004B Bonds, as appropriate; and on or after November 1, 2007 by application of (vii) from amounts on deposit in the Series 2004A Debt Service Reserve any moneys remaining in the Series 2004A Capitalized Interest Subaccount and Account or the Series 2004B Debt Service Reserve Account in excess of the the Series 2004B Capitalized Interest Subaccount representing Capitalized Series 2004A Debt Service Reserve Requirement or the Series 2004B Debt Interest in excess of the amount required to pay interest on the Series 2004A Service Reserve Requirement, respectively, and transferred to the Series 2004A Bonds and the Series 2004B Bonds through November 1, 2007, all of which shall Prepayment Account or the Series 2004B Prepayment Account of the Series 2004 be transferred first, prior to the Completion Date of the Series 2004 Project, to the Bond Redemption Fund in accordance with Section 6.05 of the Master Indenture Series 2004A Acquisition and Construction Account or the Series 2004B and Section 4.01(f) hereof to be used, together with any Special Assessment Acquisition and Construction Account, as appropriate, and thereafter to the Series prepayments on deposit in the Series 2004A Prepayment Account or the Series 2004A General Account and the Series 2004B General Account of the Series 2004B Prepayment Account of the Series 2004 Bond Redemption Fund, as the 2004 Bond Redemption Fund pursuant to Section 5.01(c) of the Master Indenture case may be, for the Extraordinary Mandatory Redemption of the Series 2004A and Section 4.01(d) of this First Supplemental Indenture, and applied by the Bonds or the Series 2004B Bonds. Issuer toward the redemption of the Series 2004A Bonds and/or the Series 2004B Bonds in accordance with the manner it has credited such excess moneys toward extinguishment of Series 2004A Special Assessments and/or Series 2004B Special Assessments which the Issuer shall describe to the Trustee in writing. [The Remainder of this Page is Intentionally Left Blank] C-58

(iv) from excess moneys transferred from the Series 2004A Revenue Subaccount and the Series 2004B Revenue Subaccount to the Series 2004A and Series 2004B General Accounts of the Series 2004 Bond Redemption Fund, respectively, in accordance with Section 6.03 of the Master Indenture and Section 4.02 of this First Supplemental Indenture.

(v) following condemnation or the sale of any portion of the Series 2004 Project to a governmental entity under threat of condemnation by such governmental entity and the payment of moneys which are not to be used to rebuild, replace or restore the taken portion of the Series 2004 Project to the Trustee by or on behalf of the Issuer for deposit into the Series 2004A General Account or the Series 2004B General Account of the Series 2004 Bond Redemption Fund in order to effectuate such redemption and, which moneys shall be applied by the Issuer to redeem Series 2004A Bonds or Series 2004B Bonds in accordance with the manner it has credited such moneys toward extinguishment of Series 2004A Special Assessments and/or Series 2004B Special Assessments which the Issuer shall describe to the Trustee in writing.

(vi) following the damage or destruction of all or substantially all of the Series 2004 Project to such extent that, in the reasonable opinion of the Issuer, the repair and restoration thereof would not be economical or would be impracticable, to the extent of amounts paid by the Issuer to the Trustee for 15 16 The Series 2004B Bonds are subject to mandatory redemption in part by the Issuer by lot prior to their scheduled maturity from moneys in the Series 2004B Sinking Fund (c) Mandatory Sinking Fund Redemption. The Series 2004A Bonds are subject to Account established under the Indenture in satisfaction of applicable Amortization Installments mandatory redemption in part by the Issuer by lot prior to their scheduled maturity from moneys at the Redemption Price of 100% of the principal amount thereof, without premium, together in the Series 2004A Sinking Fund Account established under the Indenture in satisfaction of with accrued interest to the date of redemption on May 1 of the years and in the principal applicable Amortization Installments at the Redemption Price of 100% of the principal amount amounts set forth below: thereof, without premium, together with accrued interest to the date of redemption on May 1 of the years and in the principal amounts set forth below: Year Principal Year Principal (May 1) Amount (May 1) Amount Series 2004A Term Bond Series 2004A Term Bond Maturing 2008 $335,000 2023 $885,000 Maturing May 1, 2024 May 1, 2037 2009 355,000 2024 945,000 Year Principal Year Principal 2010 380,000 2025 1,010,000 (May 1) Amount (May 1) Amount 2011 405,000 2026 1,080,000 2008 $250,000 2025 $2,495,000 2012 435,000 2027 1,150,000 2009 955,000 2026 2,655,000 2013 465,000 2028 1,225,000 2010 1,015,000 2027 2,825,000 2014 495,000 2029 1,310,000 2011 1,075,000 2028 3,010,000 2015 525,000 2030 1,395,000 2012 1,140,000 2029 3,200,000 2016 565,000 2031 1,490,000 2013 1,215,000 2030 3,410,000 2017 600,000 2032 1,590,000 2014 1,285,000 2031 3,630,000 2018 640,000 2033 1,700,000 2015 1,365,000 2032 3,865,000 2019 685,000 2034 1,810,000 2016 1,450,000 2033 4,110,000 2020 730,000 2035 1,935,000 2017 1,540,000 2034 4,380,000 2021 780,000 2036 2,065,000 2018 1,635,000 2035 4,660,000 2022 830,000 2037* 2,205,000 2019 1,735,000 2036 4,960,000 ______2020 1,845,000 2037* 5,280,000 * Maturity. 2021 1,960,000 2022 2,080,000 SECTION 3.02. Notice of Redemption. When required to redeem Series 2004

C-59 2023 2,210,000 Bonds under any provision of this First Supplemental Indenture or directed to redeem Series 2024* 2,345,000 2004 Bonds by the Issuer, the Trustee shall give or cause to be given to Owners of the Series 2004 Bonds to be redeemed notice of the redemption, as set forth in Section 8.02 of the Master ______Indenture. * Maturity. [End of Article III] [The Remainder of this Page is Intentionally Left Blank]

17 18 ARTICLE IV pursuant to the Master Indenture and Section 4.02 of this First Supplemental Indenture, shall be applied for the purposes provided therein and as provided in this Section 4.01(d). ESTABLISHMENT OF CERTAIN FUNDS AND ACCOUNTS; ADDITIONAL COVENANTS OF THE ISSUER; PREPAYMENTS; REMOVAL OF In the event that on November 1, 2007, the amount of proceeds of the Series 2004A SPECIAL ASSESSMENT LIENS Bonds or the Series 2004B Bonds representing Capitalized Interest on deposit in the Series 2004A Capitalized Interest Subaccount or the Series 2004B Capitalized Interest Subaccount SECTION 4.01. Establishment of Certain Funds and Accounts. exceeds the amount needed for Capitalized Interest with respect to the Series 2004A Bonds or the Series 2004B Bonds, as the case may be, such excess shall be transferred at the written (a) The Trustee shall establish two separate accounts within the Acquisition and direction of the District Manager from the Series 2004A Capitalized Interest Subaccount or the Construction Fund designated as the “Series 2004A Acquisition and Construction Account” and Series 2004B Capitalized Interest Subaccount first, prior to the Completion Date of the Series the “Series 2004B Acquisition and Construction Account.” Proceeds of the Series 2004A Bonds 2004 Project, to the Series 2004A Acquisition and Construction Account or the Series 2004B shall be deposited into the Series 2004A Acquisition and Construction Account in the amount set Acquisition and Construction Account, as appropriate, and thereafter to the Series 2004A forth in Section 2.06 of this First Supplemental Indenture, together with any excess moneys General Account and the Series 2004B General Account of the Series 2004 Bond Redemption transferred to the Series 2004A Acquisition and Construction Account, and such moneys in the Fund, in such manner as the District Manager shall determine to apply such excess as a credit Series 2004A Acquisition and Construction Account shall be applied as set forth in Article V of against Special Assessments, and applied, together with excess moneys transferred to the Series the Master Indenture and Section 3.01(b)(iii) of this First Supplemental Indenture. Proceeds of 2004A General Account and the Series 2004B General Account from the Series 2004A the Series 2004B Bonds shall be deposited into the Series 2004B Acquisition and Construction Acquisition and Construction Account and the Series 2004B Acquisition and Construction Account in the amount set forth in Section 2.06 of this First Supplemental Indenture, together Account, respectively, pursuant to the Master Indenture and Section 3.01(b)(iii) hereof, toward with any excess moneys transferred to the Series 2004B Acquisition and Construction Account, the Extraordinary Mandatory Redemption of the Series 2004A Bonds and the Series 2004B and such moneys in the Series 2004B Acquisition and Construction Account shall be applied as Bonds. set forth in Article V of the Master Indenture and Section 3.01(b)(iii) of this First Supplemental Indenture. (e) Pursuant to Section 6.04 of the Master Indenture, the Trustee shall establish two separate accounts within the Debt Service Fund designated as the “Series 2004A Sinking Fund (b) Pursuant to Section 6.03 of the Master Indenture, the Trustee shall establish a Account” and the Series 2004B Sinking Fund Account.” Moneys shall be deposited into the separate account within the Revenue Fund designated as the “Series 2004 Revenue Account”, Series 2004A Sinking Fund Account and the Series 2004B Sinking Fund Account as provided in and within such account the “Series 2004A Revenue Subaccount” and the “Series 2004B Article VI of the Master Indenture and applied for the purposes provided therein and in Section Revenue Subaccount”. Series 2004A Special Assessments (except for Prepayments of Series 3.01(c) of this First Supplemental Indenture. C-60 2004A Special Assessments which shall be deposited in the Series 2004A Prepayment Account) shall be deposited by the Trustee into the Series 2004A Revenue Subaccount and Series 2004B (f) Pursuant to Section 6.05 of the Master Indenture, the Trustee shall establish two Special Assessments (except for Prepayments of Series 2004B Special Assessments which shall separate accounts within the Debt Service Reserve Fund designated as the “Series 2004A Debt be deposited in the Series 2004B Prepayment Account) shall be deposited by the Trustee into the Service Reserve Account” and the “Series 2004B Debt Service Reserve Account”. As long as Series 2004B Revenue Subaccount, both of which shall be applied as set forth in Article VI of there exists no default under the Indenture and the amounts in the Series 2004A Debt Service the Master Indenture and Section 4.02 of this First Supplemental Indenture. Interlocal Reserve Account and the Series 2004B Debt Service Reserve Account, as applicable, are not Agreement Revenues shall be deposited by the Trustee in the Series 2004A Revenue Subaccount reduced below the Series 2004A Debt Service Reserve Requirement or the Series 2004B Debt and applied in accordance with Article VI of the Master Indenture and Section 4.02 of this First Service Reserve Requirement, respectively, earnings on investments in the Series 2004A Debt Supplemental Indenture. Service Reserve Account and the Series 2004B Debt Service Reserve Account, as applicable, shall be transferred to the applicable Capitalized Interest Subaccount of the Series 2004 Interest (c) Pursuant to Section 6.04 of the Master Indenture, the Trustee shall establish a Account through November 1, 2007 and be transferred to the Series 2004A Revenue Subaccount separate account within the Debt Service Fund designated as the “Series 2004 Principal and the Series 2004B Revenue Subaccount, as applicable, thereafter. Account”, and within such account the “Series 2004A Principal Subaccount” and the “Series 2004B Principal Subaccount”. Moneys shall be deposited into the Series 2004 Principal Account (i) Proceeds of the Series 2004A Bonds shall be deposited into the Series as provided in Article VI of the Master Indenture and Section 4.02 of this First Supplemental 2004A Debt Service Reserve Account in the amount set forth in Section 2.06(a) of this First Indenture, and applied for the purposes provided therein. Supplemental Indenture, and such moneys, together with any other moneys deposited into the Series 2004A Debt Service Reserve Account pursuant to the Master Indenture, shall be applied (d) Pursuant to Section 6.04 of the Master Indenture, the Trustee shall establish a for the purposes provided therein and in this Section 4.01(f)(i). On each March 15 and separate account within the Debt Service Fund designated as the “Series 2004 Interest Account” September 15 (or, if such date is not a Business Day, on the Business Day next preceding such and within such Account, the “Series 2004A Interest Subaccount”, the “Series 2004A day), the Trustee shall determine the amount on deposit in the Series 2004A Debt Service Capitalized Interest Subaccount”, the “Series 2004B Interest Subaccount” and the “Series 2004B Reserve Account and transfer any excess therein above the Series 2004A Debt Service Reserve Capitalized Interest Subaccount”. Moneys deposited into the Series 2004 Interest Account Requirement for the Series 2004A Bonds caused by Series 2004A Special Assessment prepayments to be deposited to the Series 2004A Prepayment Account of the Series 2004 Bond 19 20 Redemption Fund to be used, together with any Series 2004A Prepayment Principal on deposit in (i) Moneys in the Series 2004A or Series 2004B General Account of the the Series 2004A Prepayment Account of the Series 2004 Bond Redemption Fund, for the Series 2004 Bond Redemption Fund (including all earnings on investments held therein) Extraordinary Mandatory Redemption of Series 2004A Bonds in accordance with Section shall be accumulated therein to be used in the following order of priority, to the extent 3.01(b)(vii). that the need therefor arises:

In the event that the amount of proceeds of the Series 2004A Bonds on deposit in FIRST, to make such deposits into the Rebate Fund, if any, as the Issuer may the Series 2004A Debt Service Reserve Account exceeds the Series 2004A Debt Service Reserve direct in accordance with the Arbitrage Certificate, such moneys thereupon to be used Requirement with respect to the Series 2004A Bonds due to a decrease in the amount of Series solely for the purposes specified in the Arbitrage Certificate. Any moneys so transferred 2004A Bonds that will be outstanding as a result of an optional prepayment by the owner of a lot from the Series 2004A or Series 2004B General Account of the Series 2004 Bond or parcel of land of a Series 2004A Special Assessment against such lot or parcel as provided in Redemption Fund to the Rebate Fund shall thereupon be free from the lien and pledge of Section 4.05(a) of this First Supplemental Indenture, the amount to be released shall be the Indenture; transferred from the Series 2004A Debt Service Reserve Account to the Series 2004A SECOND, to be used to call for redemption pursuant to Section 3.01(b)(ii), (iii), Prepayment Account of the Series 2004 Bond Redemption Fund, as a credit against the Series (iv), (v) and (vi) hereof an amount of the applicable series of Series 2004 Bonds equal to 2004A Prepayment Principal otherwise required to be made by the owner of such lot or parcel. the amount of money transferred to the Series 2004A and Series 2004B General Accounts of the Series 2004 Bond Redemption Fund, respectively, pursuant to the (ii) Proceeds of the Series 2004B Bonds shall be deposited into the Series aforesaid clauses or provisions, as appropriate, for the purpose of such extraordinary 2004B Debt Service Reserve Account in the amount set forth in Section 2.06(b) of this First mandatory redemption on the dates and at the prices provided in such clauses or Supplemental Indenture, and such moneys, together with any other moneys deposited into the provisions, as appropriate; and Series 2004B Debt Service Reserve Account pursuant to the Master Indenture, shall be applied for the purposes provided therein and in this Section 4.01(f)(ii). On each March 15 and THIRD, the remainder to be utilized by the Trustee, at the direction of a September 15 (or, if such date is not a Business Day, on the Business Day next preceding such Responsible Officer or call for redemption on each Interest Payment Date on which day), the Trustee shall determine the amount on deposit in the Series 2004B Debt Service Series 2004 Bonds are subject to optional redemption pursuant to Section 3.01(a) hereof Reserve Account and transfer any excess therein above the Series 2004B Debt Service Reserve such amount of Series 2004 Bonds as, with the redemption premium, may be practicable; Requirement for the Series 2004B Bonds caused by Series 2004B Special Assessment provided, however, that not less than $5,000 principal amount of Series 2004 Bonds shall prepayments to be deposited to the Series 2004B Prepayment Account of the Series 2004 Bond be called for redemption at one time. Redemption Fund to be used, together with any Series 2004B Prepayment Principal on deposit in the Series 2004B Prepayment Account of the Series 2004 Bond Redemption Fund, for the (ii) Moneys in the Series 2004A Prepayment Account or the Series 2004B C-61 Extraordinary Mandatory Redemption of Series 2004B Bonds in accordance with Section Prepayment Account of the Series 2004 Bond Redemption Fund (including all earnings 3.01(b)(vii). on investments held in either such Prepayment Account of the Series 2004 Bond Redemption Fund) shall be accumulated therein to be used as follows, to the extent that In the event that the amount of proceeds of the Series 2004B Bonds on deposit in the the need therefor arises: Series 2004B Debt Service Reserve Account exceeds the Series 2004B Debt Service Reserve Requirement with respect to the Series 2004B Bonds due to a decrease in the amount of Series To be used to call for redemption pursuant to Section 3.01(b)(i) and (vii) hereof 2004B Bonds that will be outstanding as a result of an optional prepayment by the owner of a lot an amount of Series 2004B Bonds equal to the amount of money transferred to the Series or parcel of land of a Series 2004B Special Assessment against such lot or parcel as provided in 2004B Prepayment Account of the Series 2004 Bond Redemption Fund pursuant to the Section 4.05(a) of this First Supplemental Indenture, the amount to be released shall be aforesaid clauses or provisions, as appropriate, and as directed by the Issuer pursuant to transferred from the Series 2004B Debt Service Reserve Account to the Series 2004B the Assessment Methodology, for the purpose of such extraordinary mandatory Prepayment Account of the Series 2004 Bond Redemption Fund, as a credit against the Series redemption on the dates and at the prices provided in such clauses or provisions, as 2004B Prepayment Principal otherwise required to be made by the owner of such lot or parcel. appropriate; and

(g) Pursuant to Section 6.06 of the Master Indenture, the Trustee shall establish a To be used to call for redemption pursuant to Section 3.01(b)(i) and (vii) hereof separate Series Bond Redemption Fund designated as the “Series 2004 Bond Redemption Fund” an amount of Series 2004A Bonds equal to the amount of money transferred to the Series and within such Fund, a “Series 2004A General Account”, a “Series 2004B General Account”, a 2004A Prepayment Account of the Series 2004 Bond Redemption Fund pursuant to the “Series 2004A Prepayment Account” and a “Series 2004B Prepayment Account”. Except as aforesaid clauses or provisions, as appropriate, and as directed by the Issuer pursuant to otherwise provided in this First Supplemental Indenture, moneys to be deposited into the Series the Assessment Methodology, for the purpose of such extraordinary mandatory 2004 Bond Redemption Fund as provided in Article VI of the Master Indenture shall be redemption on the dates and at the prices provided in such clauses or provisions, as deposited to the Series 2004A or Series 2004B General Account of the Series 2004 Bond appropriate. Redemption Fund. SECTION 4.02. Series 2004 Revenue Account. The Trustee shall transfer from amounts on deposit in the Series 2004A Revenue Subaccount and the Series 2004B Revenue

21 22 Subaccount, respectively, of the Series 2004 Revenue Account to the Funds and Accounts the Series 2004B Interest Subaccount, respectively, of the Debt Service Fund, an amount designated below, the following amounts, at the following times and in the following order of from the Series 2004A Revenue Subaccount equal to the interest on the Series 2004A priority: Bonds and an amount from the Series 2004B Revenue Subaccount equal to the interest on the Series 2004B Bonds becoming due on the next succeeding November 1, less any FIRST, upon receipt but no later than the Business Day preceding the first May 1 amount on deposit in the Series 2004A Interest Subaccount or the Series 2004B Interest for which there remains an insufficient amount (A) from Series 2004A Bond proceeds (or Subaccount not previously credited; investment earnings thereon) on deposit in the Series 2004A Capitalized Interest Subaccount to be applied to the payment of interest on the Series 2004A Bonds due on FIFTH, upon receipt but no later than the Business Day next preceding each the next succeeding May 1, and (B) from Series 2004B Bond proceeds (or investment Interest Payment Date (A) while Series 2004A Bonds remain Outstanding, to the Series earnings thereon) on deposit in the Series 2004B Capitalized Interest Subaccount to be 2004A Debt Service Reserve Account, an amount from the Series 2004A Revenue applied to the payment of interest on the Series 2004B Bonds due on the next succeeding Subaccount equal to the amount, if any, which is necessary to make the amount on May 1, and no later than the Business Day next preceding each May 1 thereafter to the deposit therein equal to the Series 2004A Debt Service Reserve Requirement and (B) Series 2004A Interest Subaccount and the Series 2004B Interest Subaccount, while Series 2004B Bonds remain Outstanding, to the Series 2004B Debt Service respectively, of the Debt Service Fund, an amount from the Series 2004A Revenue Reserve Account, an amount from the Series 2004B Revenue Subaccount equal to the Subaccount equal to the interest on the Series 2004A Bonds and an amount from the amount, if any, which is necessary to make the amount on deposit therein equal to the Series 2004B Revenue Subaccount equal to the interest on the Series 2004B Bonds Series 2004B Debt Service Reserve Requirement; and becoming due on the next succeeding May 1, less any amounts on deposit in the Series 2004A Interest Subaccount or the Series 2004B Interest Subaccount not previously SIXTH, subject to the following paragraph the balance of any moneys remaining credited; after making the foregoing deposits the balance shall remain in the Series 2004 Revenue Account, unless pursuant to the Arbitrage Certificate it is necessary to make a deposit SECOND, no later than the Business Day next preceding each May 1, into the Rebate Fund, in which case the Issuer shall direct the Trustee to make such commencing May 1, 2024 to the Series 2004A Principal Subaccount and commencing deposit thereto. May 1, 2037 to the Series 2004B Principal Subaccount, respectively, of the Debt Service Fund, an amount from the Series 2004A Revenue Subaccount equal to the principal The Trustee shall, within ten (10) Business Days after the last Interest Payment Date in amount of Series 2004A Bonds Outstanding maturing on such May 1, if any, and an any calendar year, withdraw any moneys held for the credit of the Series 2004 Revenue Account amount from the Series 2004B Revenue Subaccount equal to the principal amount of which are not otherwise required to be deposited pursuant to this Section and deposit such Series 2004B Bonds Outstanding maturing on such May 1, if any, less any amounts on moneys as directed, prior to the Completion Date of the Series 2004 Project, to the credit of the C-62 deposit in the Series 2004A Principal Subaccount or the Series 2004B Principal Series 2004A Acquisition and Construction Account or the Series 2004B Acquisition and Subaccount not previously credited; Construction Account, as appropriate, and thereafter, to the credit of the Series 2004A General Account or the Series 2004B General Account of the Series 2004 Bond Redemption Fund as THIRD, no later than the Business Day next preceding each May 1, commencing determined by the Issuer in accordance with the provisions of this First Supplemental Indenture. May 1, 2008, to the Series 2004A Sinking Fund Account of the Debt Service Fund, an Special Assessment prepayments shall be deposited directly into the Series 2004A Prepayment amount from the Series 2004A Revenue Subaccount equal to the principal amount of Account or the Series 2004B Prepayment Account of the Series 2004 Bond Redemption Fund as Series 2004A Bonds subject to sinking fund redemption on such May 1, less any amount provided in the Indenture. on deposit in the Series 2004A Sinking Fund Account not previously credited, and no later than the Business Day next preceding each May 1, commencing May 1, 2008, to the SECTION 4.03. Power to Issue Series 2004 Bonds and Create Lien. The Issuer is Series 2004B Sinking Fund Account of the Debt Service Fund, an amount from the duly authorized under the Act and all applicable laws of the State to issue the Series 2004 Bonds, Series 2004B Revenue Subaccount equal to the principal amount of Series 2004B Bonds to execute and deliver the Indenture and to pledge the Pledged Revenues for the benefit of the subject to sinking fund redemption on such May 1, less any amount on deposit in the Series 2004 Bonds to the extent set forth herein. The Pledged Revenues are not and shall not be Series 2004B Sinking Fund Account not previously credited; subject to any other lien senior to or on a parity with the lien created in favor of the Series 2004 Bonds, except as otherwise permitted under the Master Indenture. The Series 2004 Bonds and FOURTH, upon receipt but no later than the Business Day preceding the first the provisions of the Indenture are and will be valid and legally enforceable obligations of the November 1 for which there remains an insufficient amount (A) from Series 2004A Bond Issuer in accordance with their respective terms. The Issuer shall, at all times, to the extent proceeds (or investment earnings thereon) on deposit in the Series 2004A Capitalized permitted by law, defend, preserve and protect the pledge created by the Indenture and all the Interest Subaccount to be applied to the payment of interest on the Series 2004A Bonds rights of the Owners of the Series 2004 Bonds under the Indenture against all claims and due on the next succeeding November 1, and (B) from Series 2004B Bond proceeds (or demands of all persons whomsoever. investment earnings thereon) on deposit in the Series 2004B Capitalized Interest Subaccount to be applied to the payment of interest on the Series 2004B Bonds due on SECTION 4.04. Series 2004 Project to Conform to Plans and Specifications; the next succeeding November 1, and upon receipt but no later than the Business Day Changes. The Issuer will proceed to complete the Series 2004 Project, as described in Exhibit A next preceding each November 1 thereafter to the Series 2004A Interest Subaccount and hereto, in accordance with the plans and specifications therefor, as such plans and specifications 23 24 may be amended by the Issuer from time to time; provided that prior to any such amendment of ARTICLE V the plans and specifications for the Series 2004 Project, the Consulting Engineer shall have delivered its certificate approving the proposed amendment to such plans and specifications. MISCELLANEOUS PROVISIONS

SECTION 4.05. Prepayments; Removal of Special Assessment Liens. SECTION 5.01. Interpretation of Supplemental Indenture. This First Supplemental At any time any owner of property subject to the Special Assessments may, at its option, Indenture amends and supplements the Master Indenture with respect to the Series 2004 Bonds, or under certain circumstances described in the Assessment Resolutions in connection with and all of the provisions of the Master Indenture, to the extent not inconsistent herewith, are Prepayments derived from application of the “true-up” mechanism therein, shall, require the incorporated in this First Supplemental Indenture by reference. To the maximum extent Issuer to reduce or release and extinguish the lien upon its property by virtue of the levy of the possible, the Master Indenture and the Supplemental Indenture shall be read and construed as Special Assessments by paying to the Issuer all or a portion of the Special Assessment, which one document. shall constitute Series 2004A Prepayment Principal or Series 2004B Prepayment Principal, as directed by the Issuer pursuant to the provisions of Section 4.01(g)(ii) of this First Supplemental SECTION 5.02. Amendments. Any amendments to this First Supplemental Indenture, plus accrued interest to the next succeeding Interest Payment Date (or the second Indenture shall be made pursuant to the provisions for amendment contained in the Master succeeding Interest Payment Date if such prepayment is made within 45 calendar days before an Indenture. Interest Payment Date), attributable to the property subject to Special Assessment owned by such owner; provided, however, to the extent that such payments are to be used to redeem Series 2004 SECTION 5.03. Counterparts. This First Supplemental Indenture may be executed Bonds, in the event the amount in the Series 2004A Debt Service Reserve Account or the Series in any number of counterparts, each of which when so executed and delivered shall be an 2004B Debt Service Reserve Account, as the case may be, will exceed the Series 2004A Debt original; but such counterparts shall together constitute but one and the same instrument. Service Reserve Requirement or the Series 2004B Debt Service Reserve Requirement, respectively, as a result of a Prepayment in accordance with this Section 4.05(a) and the resulting SECTION 5.04. Appendices and Exhibits. Any and all schedules, appendices or redemption in accordance with Section 3.01(b)(i) of this First Supplemental Indenture of Series exhibits referred to in and attached to this First Supplemental Indenture are hereby incorporated 2004 Bonds, the excess amount shall be transferred from the Series 2004A Debt Service Reserve herein and made a part of this First Supplemental Indenture for all purposes. Account or the Series 2004B Debt Service Reserve Account, as the case may be, to the Series SECTION 5.05. Payment Dates. In any case in which an Interest Payment Date or 2004A Prepayment Account or the Series 2004B Prepayment Account, respectively, as a credit the maturity date of the Series 2004 Bonds or the date fixed for the redemption of any Series against the Series 2004A Prepayment Principal or the Series 2004B Prepayment Principal 2004 Bonds shall be other than a Business Day, then payment of interest, principal or otherwise required to be paid by the owner of such lot or parcel. Redemption Price need not be made on such date but may be made on the next succeeding C-63 (a) Upon receipt of Series 2004A Prepayment Principal or Series 2004B Prepayment Business Day, with the same force and effect as if made on the due date, and no interest on such Principal as described in paragraph (a) above, subject to satisfaction of the conditions set forth payment shall accrue for the period after such due date if payment is made on such next therein, the Issuer shall immediately pay the amount so received to the Trustee, and the Issuer succeeding Business Day. shall take such action as is necessary to record in the official records of the County an affidavit SECTION 5.06. No Rights Conferred on Others. Nothing herein contained shall or affidavits, as the case may be, executed by the District Manager, to the effect that the Special confer any right upon any Person other than the parties hereto and the Holders of the Series 2004 Assessment has been paid in whole or in part and that such Special Assessment lien is thereby Bonds. reduced, or released and extinguished, as the case may be. Upon receipt of any such moneys from the Issuer the Trustee shall immediately deposit the same into the Series 2004A SECTION 5.07. Collection of Assessments. Pursuant to Section 9.04 of the Prepayment Account or the Series 2004B Prepayment Account of the Series 2004 Bond Master Trust Indenture and subject to the Issuer entering into a Property Appraiser and Tax Redemption Fund to be applied in accordance with clause (i) of Section 3.01(b) of this First Collector Agreement, Special Assessments levied on platted lots and pledged hereunder to Supplemental Indenture, to the redemption of Series 2004A Bonds or Series 2004B Bonds in secure the Series 2004 Bonds will be collected pursuant to the uniform method for the levy, accordance with Section 4.01(g)(ii) of this First Supplemental Indenture. collection and enforcement of Special Assessments afforded by Sections 197.3631, 197.3632 and 197.3635, Florida Statutes. [End of Article IV]

25 26 STATE OF FLORIDA ) ) SS: IN WITNESS WHEREOF, Midtown Miami Community Development District has COUNTY OF MIAMI-DADE ) caused this First Supplemental Trust Indenture to be executed by the Chairman of its Board of Supervisors and its corporate seal to be hereunto affixed and attested by the Secretary of its On this ____ day of July, 2004, before me, a notary public in and for the State and Board of Supervisors and Wachovia Bank, National Association, has caused this First County aforesaid, personally appeared Deborah Samuel and Aaron Newman, Chairman and Supplemental Trust Indenture to be executed by one of its Vice Presidents and its seal to be Secretary, respectively, of MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT hereunto affixed and attested by an authorized officer, all as of the day and year first above (the “Issuer”), who acknowledged that they did so sign the foregoing instrument as such officers, written. respectively, for and on behalf of said Issuer; that the same is their free act and deed as such officers, respectively, and the free act and deed of said Issuer; and that the seal affixed to said instrument is the seal of said Issuer; that they respectively appeared before me this day in person MIDTOWN MIAMI COMMUNITY and severally acknowledged that they, being thereunto duly authorized, signed, sealed with the DEVELOPMENT DISTRICT seal of said District, for the uses and purposes therein set forth. [SEAL] IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the Attest: By: ______day and year in this certificate first above written. Deborah Samuel Chairman, Board of Supervisors ______Aaron Newman NOTARY PUBLIC, STATE OF FLORIDA Secretary, Board of Supervisors

WACHOVIA BANK, NATIONAL (Name of Notary Public, Print, Stamp or ASSOCIATION, as Trustee, Paying Agent Type as Commissioned) and Registrar 1 Personally known to me, or C-64 [SEAL] 2 Produced identification: By: Vivian Cerecedo Vice President (Type of Identification Produced)

S- 1 S - 2 STATE OF FLORIDA ) EXHIBIT A ) SS: COUNTY OF MIAMI-DADE ) DESCRIPTION OF SERIES 2004 PROJECT

On this ___ day of July, 2004, before me, a notary public in and for the State and County aforesaid, personally appeared Vivian Cerecedo of Wachovia Bank, National Association, as The following table lists the components and the estimated cost of the Series 2004 Trustee, who acknowledged that she did so sign said instrument as such officer for and on behalf Project: of said corporation; that the same is her free act and deed as such officer, respectively, and the free act and deed of said corporation; and that the seal affixed to said instrument is the seal of Component Estimated Cost said corporation; that she appeared before me on this day in person and acknowledged that she, Roadways $5,597,737 being thereunto duly authorized, signed, sealed with the seal of said corporation for the uses and Water/Sewer 2,290,822 purposes therein set forth. Drainage 2,791,286 Streetscape/Landscape 6,387,668 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the Irrigation 510,013 day and year in this certificate first above written. Plaza #P1 3,617,019 Overall Improvements 5,136,166 Parking Garages 45,337,889 NOTARY PUBLIC, STATE OF FLORIDA Midblock Plaza & Misc. Public Improvements 5,866,130 Total $77,534,730

The following table lists the components and the estimated cost of the Series 2004A (Name of Notary Public, Print, Stamp or Project: Type as Commissioned)

1 Personally known to me, or Component Estimated Cost 2 Produced identification: Parking Garages $45,337,889 Midblock Plaza & Misc. Public Improvements 5,866,130

C-65 Total $51,204,019 (Type of Identification Produced) The following table lists the components and the estimated cost of the Series 2004B Project:

Component Estimated Cost Roadways $5,597,737 Water/Sewer 2,290,822 Drainage 2,791,286 Streetscape/Landscape 6,387,668 Irrigation 510,013 Plaza #P1 3,617,019 Overall Improvements 5,136,166 Total $26,330,711

S - 3 A-1 EXHIBIT B provided in the Indenture (defined below). The foregoing notwithstanding, any Owner of Bonds in an aggregate principal amount of at least $1,000,000 shall be entitled to have interest paid by [FORM OF SERIES 2004A BOND] wire transfer to such Owner to the bank account number on file with the Paying Agent, upon R-___ $______requesting the same in a writing received by the Paying Agent at least fifteen (15) days prior to UNITED STATES OF AMERICA the relevant Interest Payment Date, which writing shall specify the bank, which shall be a bank within the United States, and bank account number to which interest payments are to be wired. STATE OF FLORIDA Any such request for interest payments by wire transfer shall remain in effect until rescinded or changed, in a writing delivered by the Owner to the Paying Agent, and any such rescission or MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT change of wire transfer instructions must be received by the Paying Agent at least fifteen (15) (MIAMI-DADE COUNTY, FLORIDA) days prior to the relevant Interest Payment Date. SPECIAL ASSESSMENT AND REVENUE BOND, SERIES 2004A THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY Interest Maturity OUT OF THE PLEDGED REVENUES PLEDGED THEREFOR UNDER THE INDENTURE Rate Date Dated Date CUSIP AND NEITHER THE PROPERTY, THE FULL FAITH AND CREDIT, NOR THE TAXING POWER OF THE ISSUER, THE CITY OF MIAMI, FLORIDA, MIAMI-DADE COUNTY, ___% May 1, 20__ July 28, 2004 FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED AS SECURITY FOR THE PAYMENT OF THE BONDS, EXCEPT THAT THE REGISTERED OWNER: CEDE & CO. ISSUER IS OBLIGATED UNDER THE INDENTURE TO LEVY, AND TO EVIDENCE AND CERTIFY, OR CAUSE TO BE CERTIFIED, FOR COLLECTION, SPECIAL ASSESSMENTS PRINCIPAL AMOUNT: DOLLARS (AS DEFINED IN THE INDENTURE) AND TO COLLECT INTERLOCAL AGREEMENT KNOW ALL PERSONS BY THESE PRESENTS that Midtown Miami Community REVENUES PURSUANT TO THE INTERLOCAL AGREEMENT (BOTH AS DEFINED IN Development District (the “Issuer”), for value received, hereby promises to pay to the registered THE INDENTURE) TO SECURE AND PAY THE BONDS. THE BONDS DO NOT owner shown above or registered assigns, on the date specified above, from the sources CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, MIAMI-DADE COUNTY, hereinafter mentioned, upon presentation and surrender hereof at the designated corporate trust FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF office of Wachovia Bank, National Association, located in Miami, Florida, as paying agent (said WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR bank and/or any bank or trust company to become successor paying agent being herein called the LIMITATION.

C-66 “Paying Agent”), the principal amount set forth above with interest thereon at the rate per annum This Bond shall not be valid or become obligatory for any purpose or be entitled to any set forth above, payable on the first day of May and November of each year, commencing benefit or security under the Indenture until it shall have been authenticated by execution of the November 1, 2004. Principal of this Bond is payable at the designated corporate trust office of Trustee, or such other authenticating agent as may be appointed by the Trustee under the Wachovia Bank, National Association, located in Miami, Florida in lawful money of the United Indenture, of the certificate of authentication endorsed hereon. States of America. Except when registration of this Bond is being maintained pursuant to a book-entry-only system, interest on this Bond is payable by check or draft of the Paying Agent made payable to the registered owner and mailed to the address of the registered owner as such name and address shall appear on the registry books of the Issuer maintained by Wachovia Bank, National Association, as Registrar (said Registrar and any successor Registrar being herein called the “Registrar”) at the close of business on the fifteenth day of the calendar month preceding each interest payment date or the date on which the principal of this Bond is to be paid (the “Record Date”). Such interest shall be payable from the most recent interest payment date next preceding the date of authentication hereof to which interest has been paid, unless the date of authentication hereof is a May 1 or November 1 to which interest has been paid, in which case from such date of authentication, or November 1, 2004, in which case from July 28, 2004, or unless the date of authentication hereof is between a Record Date and the next succeeding interest payment date, in which case from such interest payment date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered owner on such Record Date and may be paid to the person in whose name this Bond is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Paying Agent, notice whereof shall be given to Bondholders of record as of the fifth (5th) day prior to such mailing, at their registered addresses, not less than ten (10) days prior to such Special Record Date, or may be paid, at any time in any other lawful manner, as more fully

B-1 B-2 CERTIFICATE OF AUTHENTICATION

IN WITNESS WHEREOF, Midtown Miami Community Development District has This Bond is one of the Bonds delivered pursuant to the within mentioned Indenture. caused this Bond to be signed by the manual signature of the Chairman of its Board of Supervisors and a facsimile of its seal to be imprinted hereon, and attested by the manual signature of the Secretary of its Board of Supervisors, all as of the date hereof. Date of Authentication: July 28, 2004 Wachovia Bank, National Association, as MIDTOWN MIAMI COMMUNITY Trustee DEVELOPMENT DISTRICT By: Authorized Officer By: Chairman, Board of Supervisors (SEAL)

Attest:

By:______Secretary Board of Supervisors C-67

B-3 B-4 [Back of Series 2004A Bond] Florida, the State of Florida or any political subdivision thereof, for the payment of the principal of, premium, if any, and interest on this Bond or the making of any other sinking fund and other This Bond is one of an authorized series of Bonds of Midtown Miami Community payments provided for in the Indenture, except for Special Assessments to be assessed and Development District (the “District”), a community development district duly created, organized levied by the Issuer as set forth in the Indenture. and existing under Chapter 190, Florida Statutes (the Uniform Community Development District Act of 1980), as amended (the “Act”) designated as “Midtown Miami Community Development By the acceptance of this Bond, the owner hereof assents to all the provisions of the District (Miami-Dade County, Florida) Special Assessment and Revenue Bonds, Series 2004A Indenture. (the “Series 2004A Bonds”), in the aggregate principal amount of $73,580,000 of like date, tenor and effect, except as to number. Simultaneously with the issuance of the Series 2004A Bonds, This Bond is payable from and secured by Pledged Revenues, as such term is defined in the District is issuing on a parity with the Series 2004A Bonds its Midtown Miami Community the Indenture, all in the manner provided in the Indenture. The Indenture provides for the levy, Development District (Miami-Dade County, Florida) Special Assessment Bonds, Series 2004B and the evidencing and certifying, of non ad valorem assessments in the form of Special in the aggregate principal amount of $30,020,000 (the “Series 2004B Bonds” and, together with Assessments, and the collection of Interlocal Agreement Revenues to secure and pay the Series the Series 2004A Bonds, the “Series 2004 Bonds” or the “Bonds”). The Series 2004 Bonds are 2004A Bonds. being issued under authority of the laws and Constitution of the State of Florida, including particularly the Act. Proceeds of the Series 2004A Bonds shall be used (i) to pay a portion of the The Series 2004A Bonds are subject to redemption prior to maturity in the amounts, at costs of the Series 2004A Project (ii) to pay interest on the 2004A Bonds through November 1, the times and in the manner provided below. All payments of the redemption price of the Series 2007, (iii) to fund the Series 2004A Debt Service Reserve Requirement and (iv) to pay a portion 2004A Bonds shall be made on the dates specified below. Except as otherwise provided in the of the costs of issuance of the Series 2004A Bonds. The Series 2004 Bonds shall be issued as Indenture, if less than all the Series 2004 Bonds are to be redeemed pursuant to an Extraordinary fully registered Bonds in authorized denominations, as set forth in the Indenture. The Series Mandatory Redemption, the Trustee shall select the Series 2004 Bonds or portions of the Series 2004 Bonds are issued under, and are secured and governed by, a Master Trust Indenture dated 2004 Bonds to be redeemed pro rata between the Series 2004A Bonds and the Series 2004B as of July 1, 2004 (the “Master Indenture”), by and between the Issuer and the Trustee and a First Bonds based on the original principal amount Outstanding and within each Series, by lot. Partial Supplemental Trust Indenture dated as of July 1, 2004 (the “First Supplemental Indenture”), by redemption of Series 2004A Bonds shall be made in such a manner that the remaining 2004A and between the Issuer and the Trustee (the Master Indenture and the First Supplemental Bonds held by each Bondholder shall be in Authorized Denominations. Indenture together are referred to herein as the “Indenture”), executed counterparts of which are on file at the designated corporate trust office of the Trustee in Miami, Florida. Optional Redemption

Reference is hereby made to the Indenture for the provisions, among others, with respect The Series 2004A Bonds may, at the option of the District, be called for redemption prior C-68 to the custody and application of the proceeds of the Series 2004 Bonds issued under the to maturity as a whole or in part at any time on or after May 1, 2014 (less than all Series 2004A Indenture, the operation and application of the Series 2004A Debt Service Reserve Account and Bonds to be selected by lot), at a Redemption Price equal to 100% of the principal amount to be other Funds and Accounts (each as defined in the Indenture) charged with and pledged to the redeemed, plus accrued interest from the most recent Interest Payment Date to the redemption payment of the principal of and interest on the Series 2004A Bonds, the levy, and the evidencing date. and certifying for collection, of Special Assessments, the nature and extent of the security for the Series 2004A Bonds, the terms and conditions on which the Series 2004A Bonds are issued Extraordinary Mandatory Redemption and on which Additional Bonds and Refunding Bonds (all as defined in the Indenture) may be The Series 2004 Bonds are subject to extraordinary mandatory redemption prior to issued on a parity herewith, the rights, duties and obligations of the Issuer and of the Trustee maturity by the Issuer in whole, on any date, or in part, on any Interest Payment Date, at an under the Indenture, the conditions under which such Indenture may be amended without the extraordinary mandatory redemption price equal to 100% of the principal amount of the Series consent of the registered owners of Bonds, the conditions under which such Indenture may be 2004 Bonds to be redeemed, plus interest accrued to the redemption date, as follows: amended with the consent of the registered owners of a majority in aggregate principal amount of the Series 2004 Bonds outstanding, and as to other rights and remedies of the registered (i) from Series 2004A Prepayment Principal deposited into the Series owners of the Series 2004A Bonds. 2004A Prepayment Account or from Series 2004B Prepayment Principal deposited into the Series 2004B Prepayment Account of the Series 2004 Bond The owner of this Bond shall have no right to enforce the provisions of the Indenture or Redemption Fund following the payment in whole or in part of Special to institute action to enforce the covenants therein, or to take any action with respect to any event Assessments on any portion of the District Lands specially benefited by the Series of default under the Indenture or to institute, appear in or defend any suit or other proceeding 2004 Project in accordance with the provisions of Section 4.05(a) of the First with respect thereto, except as provided in the Indenture. Supplemental Indenture, including excess moneys transferred from the Series It is expressly agreed by the owner of this Bond that such owner shall never have the 2004B Debt Service Reserve Account to the Series 2004B Prepayment Account right to require or compel the exercise of the ad valorem taxing power of the Issuer, the City of of the Series 2004 Bond Redemption Fund resulting from such Special Miami, Florida, the State of Florida or any political subdivision thereof, or taxation in any form Assessment prepayments pursuant to Section 4.01(g)(ii) of the First Supplemental of any real or personal property of the Issuer, the City of Miami, Florida, Miami-Dade County, Indenture. B-5 B-6 (ii) from moneys, if any, on deposit in the Series 2004A Accounts and redemption date and (y) a certificate of the Consulting Engineer confirming that Subaccounts or Series 2004B Accounts and Subaccounts in the Series 2004 Funds the repair and restoration of the Series 2004 Project would not be economical or and Accounts (other than the Rebate Fund) sufficient to pay and redeem all Series would be impracticable. 2004A Outstanding Bonds or all Series 2004B Outstanding Bonds, as the case may be, and accrued interest thereon to the redemption date or dates in addition to (vii) from amounts on deposit in the Series 2004A Debt Service all amounts owed to Persons under the Master Indenture. Reserve Account or the Series 2004B Debt Service Reserve Account in excess of the Series 2004A Debt Service Reserve Requirement or the Series 2004B Debt (iii) on or after the Completion Date of the Series 2004 Project, by Service Reserve Requirement, respectively, and transferred to the Series 2004A application of moneys remaining in the Series 2004A Acquisition and Prepayment Account or the Series 2004B Prepayment Account of the Series 2004 Construction Account or the Series 2004B Acquisition and Construction Account Bond Redemption Fund in accordance with Section 4.01(f) the First Supplemental not reserved by the Issuer for the payment of any remaining part of the Cost of the Indenture to be used, together with any Special Assessment prepayments on Series 2004 Project, all of which shall be transferred to the Series 2004A General deposit in the Series 2004A Prepayment Account or the Series 2004B Prepayment Account of the Series 2004 Bond Redemption Fund credited toward Account of the Series 2004 Bond extinguishment of the Special Assessments and applied toward the redemption of the Series 2004A Bonds; and on or after November 1, 2007 by application of any Redemption Fund, as the case may be, for the Extraordinary Mandatory moneys remaining in the Series 2004A Capitalized Interest Subaccount Redemption of the Series 2004A Bonds or the Series 2004B Bonds. representing Capitalized Interest in excess of the amount required to pay interest on the Series 2004A Bonds through November 1, 2007, all of which shall be Mandatory Sinking Fund Redemption. transferred first, prior to the Completion Date of the Series 2004 Project, to the Series 2004A Acquisition and Construction Account or the Series 2004B The Series 2004A Bonds are subject to mandatory redemption in part by the District by Acquisition and Construction Account, as appropriate, and thereafter to the Series lot prior to their scheduled maturity from moneys in the Series 2004A Sinking Fund Account 2004A General Account of the Series 2004 Bond Redemption Fund pursuant to established under the Indenture in satisfaction of applicable Amortization Installments at the Section 5.01(c) of the Master Indenture and Section 4.01(d) of the First Redemption Price of 100% of the principal amount thereof, without premium, together with Supplemental Indenture, and applied by the Issuer toward the redemption of the accrued interest to the date of redemption on May 1 of the years and in the principal amounts set Series 2004A Bonds in accordance with the manner it has credited such excess forth below: moneys toward extinguishment of Special Assessments which the Issuer shall Series 2004A Term Bond Series 2004A Term Bond Maturing describe to the Trustee in writing. C-69 Maturing May 1, 2024 May 1, 2037 Year Principal Year Principal (iv) from excess moneys transferred from the Series 2004A Revenue (May 1) Amount (May 1) Amount Subaccount and the Series 2004B Revenue Subaccount to the Series 2004A and 2008 $250,000 2025 $2,495,000 Series 2004B General Accounts of the Series 2004 Bond Redemption Fund, 2009 955,000 2026 2,655,000 respectively, in accordance with Section 6.03 of the Master Indenture and Section 2010 1,015,000 2027 2,825,000 4.02 of the First Supplemental Indenture. 2011 1,075,000 2028 3,010,000 2012 1,140,000 2029 3,200,000 (v) following condemnation or the sale of any portion of the Series 2013 1,215,000 2030 3,410,000 2004 Project to a governmental entity under threat of condemnation by such 2014 1,285,000 2031 3,630,000 governmental entity and the payment of moneys by such governmental entity to 2015 1,365,000 2032 3,865,000 the Trustee for deposit into the Series 2004A General Account or the Series 2016 1,450,000 2033 4,110,000 2004B General Account of the Series 2004 Bond Redemption Fund in order to 2017 1,540,000 2034 4,380,000 effectuate such redemption and which are not to be used to rebuild, replace or 2018 1,635,000 2035 4,660,000 restore the taken portion of the Series 2004 Project. 2019 1,735,000 2036 4,960,000 2020 1,845,000 2037* 5,280,000 (vi) following the damage or destruction of all or substantially all of 2021 1,960,000 2022 2,080,000 the Series 2004 Project to such extent that, in the reasonable opinion of the Issuer, 2023 2,210,000 the repair and restoration thereof would not be economical or would be 2024* 2,345,000 impracticable, to the extent of amounts paid by the Issuer to the Trustee for deposit to the Series 2004A General Account or the Series 2004B General ______Account of the Series 2004 Bond Redemption Fund; provided, however, that at * Maturity. least forty-five (45) days prior to such extraordinary mandatory redemption, the Issuer shall cause to be delivered to the Trustee (x) notice setting forth the B-7 B-8 Notice of Redemption the Indenture. There shall be no charge for any such exchange or transfer of Bonds, but the Issuer may require payment of a sum sufficient to pay any tax, fee or other governmental charge The Trustee shall cause notice of redemption to be mailed at least thirty but not more than imposed. Neither the Issuer nor the Registrar shall be required (a) to transfer or exchange Bonds sixty days prior to the date of redemption to all registered owners of Bonds to be redeemed (as for a period of 15 days next preceding any selection of Bonds to be redeemed or thereafter until such owners appear on the books of the Registrar on the fifth (5th) day prior to such mailing) and after the mailing of any notice of redemption; or (b) to transfer or exchange any Bond called for to certain additional parties as set forth in the Indenture; provided, however, that failure to mail redemption in whole or in part. any such notice or any defect in the notice or the mailing thereof shall not affect the validity of the redemption of the Bonds for which such notice was duly mailed in accordance with the The Issuer, the Trustee, the Paying Agent and the Registrar may deem and treat the Indenture. If less than all of the Bonds shall be called for redemption, the notice of redemption person in whose name any Bond shall be registered upon the books kept by the Registrar as the shall specify the Bonds to be redeemed. On the redemption date, the Bonds called for absolute owner thereof (whether or not such Bond shall be overdue and notwithstanding any redemption will be payable at the designated corporate trust office of the Paying Agent and on notation of ownership or other writing thereon made by anyone other than the Issuer, the Trustee, such date interest shall cease to accrue, such Bonds shall cease to be entitled to any benefit under the Paying Agent or the Registrar) for the purpose of receiving payment of or on account of the the Indenture and such Bonds shall not be deemed to be outstanding under the provisions of the principal of, premium, if any, and interest on such Bond as the same becomes due, and for all Indenture and the owners of such Bonds shall have no rights in respect thereof except to receive other purposes. All such payments so made to any such registered owner or upon his order shall payment of the redemption price thereof. If the amount of funds so deposited with the Trustee, be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the or otherwise available, is insufficient to pay the redemption price and interest on all Bonds so sum or sums so paid, and neither the Issuer, the Trustee, the Paying Agent, nor the Registrar called for redemption on such date, the Trustee shall redeem and pay on such date an amount of shall be affected by any notice to the contrary. such Bonds for which such funds are sufficient, selecting the Bonds to be redeemed by lot from among all such Bonds called for redemption on such date, and interest on any Bonds not paid It is hereby certified and recited that all acts, conditions and things required to exist, to shall continue to accrue, as provided in the Indenture. happen, and to be performed, precedent to and in the issuance of this Bond exist, have happened and have been performed in regular and due form and time as required by the laws and This Bond shall be issued initially pursuant to a book-entry-only system administered by Constitution of the State of Florida applicable thereto, including particularly the Act, and that the The Depository Trust Company, New York, New York (“DTC”), which shall act as securities issuance of this Bond, and of the issue of the Bonds of which this Bond is one, is in full depository for the Bonds, with no physical distribution of Bonds to be made. Any provisions of compliance with all constitutional and statutory limitations or provisions. the Indenture or this Bond requiring physical delivery of Bonds shall, under the book-entry-only system, be deemed to be satisfied by a notation on the records maintained by DTC of ownership interests of its participants (“DTC Participants”) and other institutions that clear through or C-70 maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect Participants”). DTC Participants and Indirect Participants will be responsible for maintaining records with respect to the beneficial ownership interests of individual purchasers of the Bonds (“Beneficial Owners”).

This Bond shall initially be issued in the name of Cede & Co. as nominee for DTC, and so long as this Bond is held in book-entry-only form Cede & Co. shall be considered the registered owner for all purposes hereof, including the payment of the principal of and interest on this Bond. Payment to DTC Participants shall be the responsibility of DTC. Payments by DTC Participants to Indirect Participants, and by DTC Participants and Indirect Participants to individual Beneficial Owners shall be the responsibility of DTC Participants and Indirect Participants and not of DTC, the Issuer or the Trustee.

The Issuer shall keep books for the registration of the Bonds at the designated corporate trust office of the Registrar in Miami, Florida. Except when registration of the Bonds is being maintained pursuant to a book-entry-only system, the Bonds may be transferred or exchanged by the registered owner thereof in person or by his attorney duly authorized in writing only upon the books of the Issuer kept by the Registrar and only upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Issuer shall execute and the Trustee or such other authenticating agent as may be appointed by the Trustee under the Indenture shall authenticate and deliver a new Bond or Bonds in authorized form and in like aggregate principal amount in accordance with the provisions of B-9 B-10 STATEMENT OF VALIDATION EXHIBIT C

This Bond is one of a series of Bonds which were validated by judgment of the Circuit [FORM OF SERIES 2004B BOND] Court of the Eleventh Judicial Circuit of Florida, in and for Miami-Dade County, Florida, R-___ $______rd rendered on the 3 day of May, 2004. UNITED STATES OF AMERICA

STATE OF FLORIDA ______Chairman MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT (MIAMI-DADE COUNTY, FLORIDA) SPECIAL ASSESSMENT BOND, SERIES 2004B ______Secretary Interest Maturity Rate Date Dated Date CUSIP ABBREVIATIONS 6.500% May 1, 2037 July 28, 2004

The following abbreviations, when used in the inscription on the face of the within Bond, shall REGISTERED OWNER: CEDE & CO. be construed as though they were written out in full according to applicable laws or regulations. PRINCIPAL AMOUNT: DOLLARS TEN COM as tenants in common TEN ENT as tenants by the entireties KNOW ALL PERSONS BY THESE PRESENTS that Midtown Miami Community JT TEN as joint tenants with the right of survivorship and not as tenants in common Development District (the “Issuer”), for value received, hereby promises to pay to the registered owner shown above or registered assigns, on the date specified above, from the sources UNIFORM GIFT MIN ACT - Custodian hereinafter mentioned, upon presentation and surrender hereof at the designated corporate trust (Cust) (Minor) office of Wachovia Bank, National Association, located in Miami, Florida, as paying agent (said under Uniform Gifts to Minors Act bank and/or any bank or trust company to become successor paying agent being herein called the (State) C-71 “Paying Agent”), the principal amount set forth above with interest thereon at the rate per annum Additional abbreviations may also be used though not in the above list. set forth above, payable on the first day of May and November of each year, commencing May **************************** 1, 2004. Principal of this Bond is payable at the designated corporate trust office of Wachovia ASSIGNMENT Bank, National Association, located in Miami, Florida in lawful money of the United States of America. Except when registration of this Bond is being maintained pursuant to a book-entry- For value received, the undersigned hereby sells, assigns and transfers unto only system, interest on this Bond is payable by check or draft of the Paying Agent made payable ______the within Bond and all rights thereunder, and to the registered owner and mailed to the address of the registered owner as such name and hereby irrevocably constitutes and appoints ______, attorney to address shall appear on the registry books of the Issuer maintained by Wachovia Bank, National transfer the said Bond on the books of the Issuer, with full power of substitution in the premises. Association, as Registrar (said Registrar and any successor Registrar being herein called the Dated: “Registrar”) at the close of business on the fifteenth day of the calendar month preceding each interest payment date or the date on which the principal of this Bond is to be paid (the “Record Social Security Number or Date”). Such interest shall be payable from the most recent interest payment date next preceding Employer Identification the date of authentication hereof to which interest has been paid, unless the date of authentication Number of Transferee: hereof is a May 1 or November 1 to which interest has been paid, in which case from such date of authentication, or unless the date hereof is prior to November 1, 2004 in which case from July Signature guaranteed: 28, 2004, or unless the date of authentication hereof is between a Record Date and the next succeeding interest payment date, in which case from such interest payment date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the NOTICE: The assignor’s signature to this Assignment must correspond with the name as it registered owner on such Record Date and may be paid to the person in whose name this Bond is appears on the face of the within Bond in every particular without alteration or registered at the close of business on a Special Record Date for the payment of such defaulted any change whatever. interest to be fixed by the Paying Agent, notice whereof shall be given to Bondholders of record as of the fifth (5th) day prior to such mailing, at their registered addresses, not less than ten (10) days prior to such Special Record Date, or may be paid, at any time in any other lawful manner,

B-11 C-1 as more fully provided in the Indenture (defined below). The foregoing notwithstanding, any Owner of Bonds in an aggregate principal amount of at least $1,000,000 shall be entitled to have interest paid by wire transfer to such Owner to the bank account number on file with the Paying IN WITNESS WHEREOF, Midtown Miami Community Development District has Agent, upon requesting the same in a writing received by the Paying Agent at least fifteen (15) caused this Bond to be signed by the manual signature of the Chairman of its Board of days prior to the relevant Interest Payment Date, which writing shall specify the bank, which Supervisors and a facsimile of its seal to be imprinted hereon, and attested by the manual shall be a bank within the United States, and bank account number to which interest payments signature of an Assistant Secretary of its Board of Supervisors, all as of the date hereof. are to be wired. Any such request for interest payments by wire transfer shall remain in effect until rescinded or changed, in a writing delivered by the Owner to the Paying Agent, and any such rescission or change of wire transfer instructions must be received by the Paying Agent at MIDTOWN MIAMI COMMUNITY least fifteen (15) days prior to the relevant Interest Payment Date. DEVELOPMENT DISTRICT

THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY By: OUT OF THE PLEDGED REVENUES PLEDGED THEREFOR UNDER THE INDENTURE Chairman, Board of Supervisors AND NEITHER THE PROPERTY, THE FULL FAITH AND CREDIT, NOR THE TAXING (SEAL) POWER OF THE ISSUER, THE CITY OF MIAMI, FLORIDA, MIAMI-DADE COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, IS Attest: PLEDGED AS SECURITY FOR THE PAYMENT OF THE BONDS, EXCEPT THAT THE By:______ISSUER IS OBLIGATED UNDER THE INDENTURE TO LEVY, AND TO EVIDENCE AND Secretary CERTIFY, OR CAUSE TO BE CERTIFIED, FOR COLLECTION, SPECIAL ASSESSMENTS Board of Supervisors (AS DEFINED IN THE INDENTURE) AND TO COLLECT INTERLOCAL AGREEMENT REVENUES PURSUANT TO THE INTERLOCAL AGREEMENT (BOTH AS DEFINED IN THE INDENTURE) TO SECURE AND PAY THE BONDS. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, MIAMI-DADE COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION.

C-72 This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Indenture until it shall have been authenticated by execution of the Trustee, or such other authenticating agent as may be appointed by the Trustee under the Indenture, of the certificate of authentication endorsed hereon.

C-2 C-3 CERTIFICATE OF AUTHENTICATION [Back of Series 2004B Bond]

This Bond is one of the Bonds delivered pursuant to the within mentioned Indenture. This Bond is one of an authorized series of Bonds of Midtown Miami Community Development District (the “District”), a community development district duly created, organized and existing under Chapter 190, Florida Statutes (the Uniform Community Development District Date of Authentication: July 28, 2004 Act of 1980), as amended (the “Act”) designated as “Midtown Miami Community Development District (Miami-Dade County, Florida) Special Assessment Bonds, Series 2004B (the “Series Wachovia Bank, National Association, as 2004B Bonds”), in the aggregate principal amount of $30,020,000 of like date, tenor and effect, Trustee except as to number. Simultaneously with the issuance of the Series 2004B Bonds, the District is issuing on a parity with the Series 2004B Bonds its Midtown Miami Community Development By: District (Miami-Dade County, Florida) Special Assessment and Revenue Bonds, Series 2004A in Authorized Officer the aggregate principal amount of $73,580,000 (the “Series 2004A Bonds” and, together with the Series 2004B Bonds, the “Series 2004 Bonds” or the “Bonds”). The Series 2004 Bonds are being issued under authority of the laws and Constitution of the State of Florida, including particularly the Act. Proceeds of the Series 2004B Bonds shall be used (i) to pay a portion of the costs of the Series 2004B Project (ii) to pay interest on the 2004B Bonds through November 1, 2007 (iii) to fund the Series 2004B Debt Service Reserve Requirement and (iv) to pay a portion of the costs of issuance of the Series 2004B Bonds. The Series 2004 Bonds shall be issued as fully registered Bonds in authorized denominations, as set forth in the Indenture. The Series 2004 Bonds are issued under, and are secured and governed by, a Master Trust Indenture dated as of July 1, 2004 (the “Master Indenture”), by and between the Issuer and the Trustee and a First Supplemental Trust Indenture dated as of July 1, 2004 (the “First Supplemental Indenture”), by and between the Issuer and the Trustee (the Master Indenture and the First Supplemental Indenture together are referred to herein as the “Indenture”), executed counterparts of which are on file at the designated corporate trust office of the Trustee in Miami, Florida.

Reference is hereby made to the Indenture for the provisions, among others, with respect C-73 to the custody and application of the proceeds of the Series 2004 Bonds issued under the Indenture, the operation and application of the Series 2004B Debt Service Reserve Account and other Funds and Accounts (each as defined in the Indenture) charged with and pledged to the payment of the principal of and interest on the Series 2004B Bonds, the levy, and the evidencing and certifying for collection, of Special Assessments, the nature and extent of the security for the Series 2004B Bonds, the terms and conditions on which the Series 2004B Bonds are issued and on which Additional Bonds and Refunding Bonds (all as defined in the Indenture) may be issued on a parity herewith, the rights, duties and obligations of the Issuer and of the Trustee under the Indenture, the conditions under which such Indenture may be amended without the consent of the registered owners of Bonds, the conditions under which such Indenture may be amended with the consent of the registered owners of a majority in aggregate principal amount of the Series 2004 Bonds outstanding, and as to other rights and remedies of the registered owners of the Series 2004B Bonds.

The owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture.

It is expressly agreed by the owner of this Bond that such owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer, the City of Miami, Florida, Miami-Dade County, Florida, the State of Florida or any political subdivision thereof, or taxation in any form of any real or personal property of the Issuer, the City of Miami, C-4 C-5 Florida, Miami-Dade County, Florida, the State of Florida or any political subdivision thereof, (ii) from moneys, if any, on deposit in the Series 2004A Accounts and for the payment of the principal of, premium, if any, and interest on this Bond or the making of Subaccounts or Series 2004B Accounts and Subaccounts in the Series 2004 Funds any other sinking fund and other payments provided for in the Indenture, except for Special and Accounts (other that the Rebate Fund) sufficient to pay and redeem all Series Assessments to be assessed and levied by the Issuer as set forth in the Indenture. 2004A Outstanding Bonds or all Series 2004B Outstanding Bonds, as the case may be, and accrued interest thereon to the redemption date or dates in addition to By the acceptance of this Bond, the owner hereof assents to all the provisions of the all amounts owed to Persons under the Master Indenture. Indenture. (iii) on or after the Completion Date of the Series 2004 Project, by This Bond is payable from and secured by Pledged Revenues, as such term is defined in application of moneys remaining in the Series 2004A Acquisition and the Indenture, all in the manner provided in the Indenture. The Indenture provides for the levy, Construction Account or the Series 2004B Acquisition and Construction Account and the evidencing and certifying, of non ad valorem assessments in the form of Special not reserved by the Issuer for the payment of any remaining part of the Cost of the Assessments to secure and pay the Series 2004 Bonds. Series 2004 Project, which shall be transferred to the Series 2004B General Account of the Series 2004 Bond Redemption Fund credited toward The Series 2004B Bonds are subject to redemption prior to maturity in the amounts, at extinguishment of the Special Assessments and applied toward the redemption of the times and in the manner provided below. All payments of the redemption price of the Series the Series 2004B Bonds; and on or after November 1, 2007 by application of any 2004B Bonds shall be made on the dates specified below. Except as otherwise provided in the moneys remaining in the Series 2004B Capitalized Interest Subaccount Indenture, if less than all the Series 2004 Bonds are to be redeemed pursuant to an Extraordinary representing Capitalized Interest in excess of the amount required to pay interest Mandatory Redemption, the Trustee shall select the Series 2004 Bonds or portions of the Series on the Series 2004B Bonds through November 1, 2007, all of which shall be 2004 Bonds to be redeemed pro rata between the Series 2004A Bonds and the Series 2004B transferred first, prior to the Completion Date of the Series 2004 Project, to the Bonds based on the original principal amount Outstanding and within each Series, by lot. Partial Series 2004A Acquisition and Construction Account or the Series 2004B redemption of Series 2004B Bonds shall be made in such a manner that the remaining 2004B Acquisition and Construction Account, as appropriate, and thereafter to the Series Bonds held by each Bondholder shall be in Authorized Denominations. 2004B General Account of the Series 2004 Bond Redemption Fund pursuant to Section 5.01(c) of the Master Indenture and Section 4.01(d) of the First Optional Redemption Supplemental Indenture, and applied by the Issuer toward the redemption of the Series 2004B Bonds in accordance with the manner it has credited such excess The Series 2004B Bonds may, at the option of the District, be called for redemption prior moneys toward extinguishment of Special Assessments which the Issuer shall to maturity as a whole or in part at any time on or after May 1, 2014 (less than all Series 2004B describe to the Trustee in writing. C-74 Bonds to be selected by lot), at a Redemption Price equal to 100% of the principal amount to be redeemed, plus accrued interest from the most recent Interest Payment Date to the redemption (iv) from excess moneys transferred from the Series 2004A Revenue date. Subaccount and the Series 2004B Revenue Subaccount to the Series 2004A and Series 2004B General Accounts of the Series 2004 Bond Redemption Fund, Extraordinary Mandatory Redemption respectively, in accordance with Section 6.03 of the Master Indenture and Section 4.02 of the First Supplemental Indenture. The Series 2004 Bonds are subject to extraordinary mandatory redemption prior to maturity by the Issuer in whole, on any date, or in part, on any Interest Payment Date, at an (v) following condemnation or the sale of any portion of the Series extraordinary mandatory redemption price equal to 100% of the principal amount of the Series 2004 Project to a governmental entity under threat of condemnation by such 2004 Bonds to be redeemed, plus interest accrued to the redemption date, as follows: governmental entity and the payment of moneys by such governmental entity to the Trustee for deposit into the Series 2004A General Account or the Series (i) from Series 2004A Prepayment Principal deposited into the Series 2004B General Account of the Series 2004 Bond Redemption Fund in order to 2004A Prepayment Account or from Series 2004B Prepayment Principal effectuate such redemption and which are not to be used to rebuild, replace or deposited into the Series 2004B Prepayment Account of the Series 2004 Bond restore the taken portion of the Series 2004 Project. Redemption Fund following the payment in whole or in part of Special Assessments on any portion of the District Lands specially benefited by the Series (vi) following the damage or destruction of all or substantially all of 2004 Project in accordance with the provisions of Section 4.05(a) of the First the Series 2004 Project to such extent that, in the reasonable opinion of the Issuer, Supplemental Indenture, including excess moneys transferred from the Series the repair and restoration thereof would not be economical or would be 2004B Debt Service Reserve Account to the Series 2004B Prepayment Account impracticable, to the extent of amounts paid by the Issuer to the Trustee for of the Series 2004 Bond Redemption Fund resulting from such Special deposit to the Series 2004A General Account or the Series 2004B General Assessment prepayments pursuant to Section 4.01(g)(ii) of the First Supplemental Account of the Series 2004 Bond Redemption Fund; provided, however, that at Indenture. least forty-five (45) days prior to such extraordinary mandatory redemption, the Issuer shall cause to be delivered to the Trustee (x) notice setting forth the C-6 C-7 redemption date and (y) a certificate of the Consulting Engineer confirming that to certain additional parties as set forth in the Indenture; provided, however, that failure to mail the repair and restoration of the Series 2004 Project would not be economical or any such notice or any defect in the notice or the mailing thereof shall not affect the validity of would be impracticable. the redemption of the Bonds for which such notice was duly mailed in accordance with the Indenture. If less than all of the Bonds shall be called for redemption, the notice of redemption (vii) from amounts on deposit in the Series 2004A Debt Service shall specify the Bonds to be redeemed. On the redemption date, the Bonds called for Reserve Account or the Series 2004B Debt Service Reserve Account in excess of redemption will be payable at the designated corporate trust office of the Paying Agent and on the Series 2004A Debt Service Reserve Requirement or the Series 2004B Debt such date interest shall cease to accrue, such Bonds shall cease to be entitled to any benefit under Service Reserve Requirement, respectively, and transferred to the Series 2004A the Indenture and such Bonds shall not be deemed to be outstanding under the provisions of the Prepayment Account or the Series 2004B Prepayment Account of the Series 2004 Indenture and the registered owners of such Bonds shall have no rights in respect thereof except Bond Redemption Fund in accordance with Section 4.01(f) of the First to receive payment of the redemption price thereof. If the amount of funds so deposited with the Supplemental Indenture to be used, together with any Special Assessment Trustee, or otherwise available, is insufficient to pay the redemption price and interest on all prepayments on deposit in the Series 2004A Prepayment Account or the Series Bonds so called for redemption on such date, the Trustee shall redeem and pay on such date an 2004B Prepayment Account of the Series 2004 Bond Redemption Fund, as the amount of such Bonds for which such funds are sufficient, selecting the Bonds to be redeemed case may be, for the Extraordinary Mandatory Redemption of the Series 2004A by lot from among all such Bonds called for redemption on such date, and interest on any Bonds Bonds or the Series 2004B Bonds. not paid shall continue to accrue, as provided in the Indenture.

Mandatory Sinking Fund Redemption. This Bond shall be issued initially pursuant to a book-entry-only system administered by The Depository Trust Company, New York, New York (“DTC”), which shall act as securities The Series 2004B Bonds maturing are subject to mandatory redemption in part by the depository for the Bonds, with no physical distribution of Bonds to be made. Any provisions of District by lot prior to their scheduled maturity from moneys in the Series 2004B Sinking Fund the Indenture or this Bond requiring physical delivery of Bonds shall, under the book-entry-only Account established under the Indenture in satisfaction of applicable Amortization Installments system, be deemed to be satisfied by a notation on the records maintained by DTC of ownership at the Redemption Price of 100% of the principal amount thereof, without premium, together interests of its participants (“DTC Participants”) and other institutions that clear through or with accrued interest to the date of redemption on May 1 of the years and in the principal maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect amounts set forth below: Participants”). DTC Participants and Indirect Participants will be responsible for maintaining records with respect to the beneficial ownership interests of individual purchasers of the Bonds (“Beneficial Owners”). Year Principal Year Principal C-75 (May 1) Amount (May 1) Amount This Bond shall initially be issued in the name of Cede & Co. as nominee for DTC, and 2008 $335,000 2023 $885,000 so long as this Bond is held in book-entry-only form Cede & Co. shall be considered the 2009 355,000 2024 945,000 registered owner for all purposes hereof, including the payment of the principal of and interest on 2010 380,000 2025 1,010,000 2011 405,000 2026 1,080,000 this Bond. Payment to DTC Participants shall be the responsibility of DTC. Payments by DTC 2012 435,000 2027 1,150,000 Participants to Indirect Participants, and by DTC Participants and Indirect Participants to 2013 465,000 2028 1,225,000 individual Beneficial Owners shall be the responsibility of DTC Participants and Indirect 2014 495,000 2029 1,310,000 Participants and not of DTC, the Issuer or the Trustee. 2015 525,000 2030 1,395,000 2016 565,000 2031 1,490,000 The Issuer shall keep books for the registration of the Bonds at the designated corporate 2017 600,000 2032 1,590,000 trust office of the Registrar in Miami, Florida. Except when registration of the Bonds is being 2018 640,000 2033 1,700,000 maintained pursuant to a book-entry-only system, the Bonds may be transferred or exchanged by 2019 685,000 2034 1,810,000 the registered owner thereof in person or by his attorney duly authorized in writing only upon the 2020 730,000 2035 1,935,000 books of the Issuer kept by the Registrar and only upon surrender thereof together with a written 2021 780,000 2036 2,065,000 instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his 2022 830,000 2037* 2,205,000 duly authorized attorney. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Issuer shall execute and the Trustee or such other authenticating agent as may be ______appointed by the Trustee under the Indenture shall authenticate and deliver a new Bond or Bonds * Maturity. in authorized form and in like aggregate principal amount in accordance with the provisions of the Indenture. There shall be no charge for any such exchange or transfer of Bonds, but the Notice of Redemption Issuer may require payment of a sum sufficient to pay any tax, fee or other governmental charge The Trustee shall cause notice of redemption to be mailed at least thirty but not more than imposed. Neither the Issuer nor the Registrar shall be required (a) to transfer or exchange Bonds sixty days prior to the date of redemption to all registered owners of Bonds to be redeemed (as for a period of 15 days next preceding any selection of Bonds to be redeemed or thereafter until such owners appear on the books of the Registrar on the fifth (5th) day prior to such mailing) and C-8 C-9 after the mailing of any notice of redemption; or (b) to transfer or exchange any Bond called for redemption in whole or in part. STATEMENT OF VALIDATION The Issuer, the Trustee, the Paying Agent and the Registrar may deem and treat the person in whose name any Bond shall be registered upon the books kept by the Registrar as the This Bond is one of a series of Bonds which were validated by judgment of the Circuit absolute owner thereof (whether or not such Bond shall be overdue and notwithstanding any Court of the Eleventh Judicial Circuit of Florida, in and for Miami-Dade County, Florida, rd notation of ownership or other writing thereon made by anyone other than the Issuer, the Trustee, rendered on the 3 day of May, 2004. the Paying Agent or the Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and interest on such Bond as the same becomes due, and for all other purposes. All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer, the Trustee, the Paying Agent, nor the Registrar ______shall be affected by any notice to the contrary. Chairman

It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happened ______and have been performed in regular and due form and time as required by the laws and Secretary Constitution of the State of Florida applicable thereto, including particularly the Act, and that the issuance of this Bond, and of the issue of the Bonds of which this Bond is one, is in full compliance with all constitutional and statutory limitations or provisions. C-76

C-10 C-11 ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM as tenants in common TEN ENT as tenants by the entireties JT TEN as joint tenants with the right of survivorship and not as tenants in common

UNIFORM GIFT MIN ACT - Custodian (Cust) (Minor) under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not in the above list. **************************** ASSIGNMENT

For value received, the undersigned hereby sells, assigns and transfers unto ______the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ______, attorney to transfer the said Bond on the books of the Issuer, with full power of substitution in the premises.

Dated: [THIS PAGE INTENTIONALLY LEFT BLANK] Social Security Number or Employer Identification

C-77 Number of Transferee:

Signature guaranteed:

NOTICE: The assignor’s signature to this Assignment must correspond with the name as it appears on the face of the within Bond in every particular without alteration or any change whatever.

C-12 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX D

ASSESSMENT METHODOLOGY [THIS PAGE INTENTIONALLY LEFT BLANK] SUPPLEMENTAL ASSESSMENT REPORT MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT

Updated July 20, 2004

Prepared for

Board of Supervisors Midtown Miami Community Development District

Prepared by

Fishkind & Associates, Inc. 11869 High Tech Avenue Orlando, Florida 32817 407-382-3256

______[THIS PAGE INTENTIONALLY LEFT BLANK] SUPPLEMENTAL ASSESSMENT REPORT MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT

Updated July 20, 2004 ______

1.0 Introduction

1.1 Purpose

This report supplements our previous reports to the Board of June 25, 2004, “Supplemental Assessment Report Midtown Miami Community Development District,” March 3, 2004 titled “Assessment Methodology Midtown Miami Community Development District” and June 24, 2004 entitled “Supplemental Assessment Methodology Report” collectively the “previous reports”. The previous reports provided the methodology adopted by the Board for allocating the debt incurred by the Midtown Miami Community Development District (“District”) to provide infrastructure improvements to properties in the District. This supplement builds upon the previous reports and describes how the general allocation methodology described in the previous report is applied in the context of the District’s proposed Series 2004 Bond issue given that the Series 2004 Bonds are sold. Therefore, the parameters of the Series 2004 Bonds are now known with certainty.

As noted in the June 25, 2004 report, the District has determined that it will not utilize a HUD Section 108 Loan (“Loan”) to fund a portion of its infrastructure. Instead, the District will issue bonds to fund a portion its capital improvement program (“CIP”) that was previously to be funded by the Loan. In addition, the Financial Advisor has been informed that a portion of the development program scheduled for Tract “B”, specifically the hotel, office tower and spa, are indeed on Tract “B”. However, these uses are planned for Tract “B” of Buena Vista West and not Midtown Miami East as indicated in the March 3, 2004 report. Additionally, the Financial Advisor has been informed that Tracts “G” and “H” of Buena Vista West are not developable parcels. Finally, Biscayne (as hereinafter defined) has conveyed 71,814 square feet of land in Buena Vista West Tract “C” for use as a public plaza. The methodology adopted by the Board on March 3, 2004 is sufficiently flexible to accommodate all of these changes.

` D-11 As noted in the previous reports, it is the District’s debt-funded infrastructure improvements that will allow the development of property in the District. By making development of property within the District possible, the District creates benefits to these properties.

Finally, DDR (as defined below) has notified the District that it now plans to reduce the size of its retail center from 625,000 square feet to 600,000 square feet.

1.2 Background

The Board of County Commissioners of Miami-Dade County created the District pursuant Ordinance No. 03-271 adopted on December 16, 2003 and effective on December 26, 2003. The District was established to provide infrastructure, including, but not necessarily limited to, roadways (within and without the District), water and sewer facilities, a stormwater management system, streetscape and landscape, and parking garages.

The District is a 56 acre site planned for two distinct mixed-use projects: Midtown Miami being developed by Midtown Partners, LLC (“Midtown Partners”) and the Shops at Midtown Miami being developed by DDR Miami Avenue LLC (“DDR”) (collectively, the “Developments”). Midtown Partners and DDR are collectively referred to herein as “Developers” and each one a “Developer”. Midtown Partners owns 100% of the member interests in nine (9) Florida limited liability companies which are expected to acquire their respective interests in the proposed Developments from Biscayne Development Partners LLC (“Biscayne”).

The Developments are planned to include a +/-600,000 square foot shopping center; 2,600 condominiums; 71,750 square feet of additional retail space on the ground floors of the condominium towers; 397 apartments; 100,250 square feet of entertainment-oriented commercial space; a 120,000 square foot mixed-use building, 150,000 square foot office complex, and parking garages sufficient to accommodate 3,017 vehicles. Table 1 summarizes the development program currently planned for the Development.

[The balance of this page is left blank intentionally]

D-22 TABLE 1. Development Plan for Midtown Miami and the Shops at Midtown Miami

Category Total

Buena Vista West Retail Shopping Center (square feet) 600,000 Apartments (units) 397 Offices (square feet) 150,000 Mixed-Use Building (square feet) 120,000

Midtown Miami East Other Retail or Grocery (square feet) 71,750 Restaurant, Bar, Entertainment (square feet) 100,250 Condominiums Over 1,750 square feet (units) 480 Condominiums 1,750 square feet or Less (units) 2,120

Source: Developers

The development plan shown above is somewhat smaller than the program described in the Engineer’s Report.1 The Engineer’s Report provided an analysis based on the maximum potential development possible at the site. This scaling was needed to assure that the proper amount of infrastructure is available to support development of the lands within the District. However, presently the Developers anticipate a smaller development plan than the maximum. The assessment methodology provided below uses the current development plan as per Table 1 for the numerical examples provided below. If the development plan expands beyond Table 1, there will be sufficient infrastructure to serve the expanded plan. Furthermore, the assessment levels per unit shown here would be lower.

On May 28, 2004 The City of Miami, Miami-Dade County, and the District entered into an Interlocal Agreement (“ILA”) pursuant to which the City and the County (collectively the “Local Governments”) agreed to make certain financial contributions to defray a portion of the District’s debt service costs associated with a portion of the CIP, provided certain performance thresholds are met. This is described in more detail below.

1 Amended District Engineer’s Report Midtown Miami Community Development District (April 21, 2004), Page 5.

` D-33 1.3 Requirements of a Valid Assessment Methodology

Valid special assessments under Florida law require two things. First, the properties assessed must receive a special benefit from the improvements paid for via the assessments. Second, the assessments must be fairly and reasonably allocated to the properties being assessed.

If these two characteristics of valid special assessments are adhered to, Florida law provides wide latitude to local governmental bodies, such as the District, in approving special assessments. Indeed, Florida courts have found that mathematical perfection is probably impossible, but if reasonable people disagree the assessment will be upheld. Only if the District Board was to act in an arbitrary, capricious or grossly unfair fashion would its assessment methods be overturned.

1.4 Special Benefits and General Benefits

Improvements undertaken by the District create both: (1) special benefits to properties within its borders and (2) general benefits to properties outside the District. However, as discussed below, these general benefits are incidental in nature and are readily distinguishable from the special benefits which accrue to property within the District.

The infrastructure program of the District enables properties within its boundaries to be developed in that without the District’s CIP there would be no infrastructure to support development of land in the District. Furthermore, the development approval for the Developments requires many of these improvements, without which development of property in the District would be prohibited by law.

There is no doubt that the general public, and property owners outside the District, will benefit from the provision of District infrastructure. However, these benefits are incidental to the District’s CIP, which is designed solely to meet the needs of property within the District. Properties outside the District do not depend upon the District’s improvement program to obtain, or to maintain, their development entitlements. This fact alone clearly distinguishes the special benefits which District properties receive compared to those lying outside of the District’s boundaries, which may be expanded from time to time.

D-44 1.5 Special Benefits Exceed the Costs Allocated to Pay for Them

In the case of the District, the value of the special benefits provided by the CIP are far greater than the costs associated with providing these same benefits. The cost of the CIP necessary to support full development of property within the District is $103,600,000, including financing expenses, capitalized interest, and debt service reserves (as described below). The Financial Advisor estimates that the net market value of the land within the District will exceed significantly the cost of the raw land, after the improvements are put in place. It is the CIP, among other things, that makes it possible to develop and sell the land within the District’s boundaries.

2.0 Assessment Methodology

2.1 Overview

As noted above, the assessment methodology is a process by which the District will allocate the costs associated with its CIP to properties within the District benefiting from the improvements. The allocation is based upon the benefits that each property receives. At the outset, the District has based its CIP on the land uses the Developers plan for the Developments as outlined above in Table 1.

The Local Governments approved the two subdivision plats for the land contained within the District. The two plats recorded in the public records of Miami-Dade County are:

(1) The Midtown Miami East Plat recorded April 26, 2004 in Plat Book 161, Page 77 (“Midtown Miami East”) and (2) The Buena Vista West Plat recorded April 26, 2004 in Plat Book 161, Page 78 (“Buena Vista West”)

The District initially will impose assessments on each tract identified in the plat based upon the general land uses shown in Table 1 expected for each tract and the acreage in each tract in Midtown Miami East and Buena Vista West as described more fully below. As the actual land uses are constructed on each tract, the debt assigned to the tract will be more finely determined based on equivalent residential units (“ERU”) as described below. In other words, as actual development occurs, the debt that was initially allocated by acreage will be reallocated based on the specific land uses that are constructed. This represents a refinement of the allocation process based on benefits received by specific development as it occurs.

` D-55 The numerical analysis provided below is illustrative of the assessment methodology. Since actual costs may vary from the estimates, the actual figures may change as additional information becomes available. Furthermore, the development plan may also vary from the plan outlined in Table 1 above. Therefore, the District may adjust the assessment levels on each particular land use accordingly. However, the information provided here is the best available at this time.

There is one important proviso. The debt per ERU on any parcel of the land that remains undeveloped is not allowed to increase above its ceiling level set after the retail shopping center is developed and a tax identification number is assigned. This requirement will be tested at four intervals based upon the percentage of ERUs that are developed. The intervals are at 25%, 50%, 75% and 90% planned ERUs developed.

The test works as follows. Assume that the ceiling debt level per ERU is $100. When a tax identification number (“Tax ID”) is assigned to a parcel of property in the District brings the total number of ERUs to their threshold levels outlined above, the debt on the ERUs remaining after the assignment of the Tax ID is at or below $100 per ERU. If not, then the District will require a density reduction payment from the Developers so that the $100 per ERU is not exceeded.

2.2 The District’s Capital Improvement Plan and the District Engineer’s Estimate of Cost

Based upon the development plan currently intended by the Developers (summarized in Table 1), the District Engineer has generated the CIP for the infrastructure needed to support the Developments. The cost estimates are summarized in Table 2 below. The District Engineer estimates a total project cost of $77,537,730. This excludes financing costs and interest expenses.

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D-66 Table 2. District Engineer’s Estimated Costs for The District’s Capital Improvement Program

Sitework Amount Roadways $5,597,737 Water/Sewer $2,290,822 Drainage $2,791,286 Streetscape/Landscape $6,387,668 Irrigation $510,013 Plaza #P1 $3,617,019 Overall Improvements $5,136,166 ======Sitework $26,330,711

Garages $45,337,889

Midblock Plaza & Other $5,866,130 ======Grand Total $77,537,730

Source: Amended District Engineer’s Report of April 21, 2004, Page 19

2.3 Financing Plan

The District will finance its CIP from three sources. First, the District will issue its Special Assessment and Revenue Bonds, Series 2004A to fund the portion of the CIP that will be supported in part from the ILA revenues (“Series 2004A Bonds”). Second, the District plans to issue its Special Assessment Bonds, Series 2004B that will be supported solely from assessments (“Series 2004B Bonds”, and collectively with the Series A Bonds, the “Series 2004 Bonds”). Third, grant monies from the State of Florida and from the Local Governments, or contributions from the Developers are also expected. Table 3 summarizes the financing program. None of these costs have changed since the June 25, 2004 Report, nor has the financing plan.

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` D-77 Table 3. Midtown Miami Community Development District Financing Program

Grants/ COMPONENT Series 2004B Developers Series 2004A Total

Infrastructure $16,982,981 $5,730,711 $0 $22,713,692 Public Plaza $3,617,019 $0 $3,617,019 Midblock Plaza & Other $5,866,130 $5,866,130 Parking Structures $45,337,889 $45,337,889 ======Total $20,600,000 $5,730,711 $51,204,019 $77,537,730

To fund its portion of the CIP the District has sold it Series 2004 Bonds in the aggregate amount of $103,600,000. This is considerably lower than the previous estimate in the June 25, 2004 Report. Table 4 displays the bond sizing calculations. The District’s portion of the CIP is $71,807,019. From the proceeds of the Series 2004 Bonds $71,125,467 will be deposited into the construction fund. The balance of the needed funding will be generated from interest earnings on the construction funds and from the grants or developer contributions.

The Series 2004 Bonds also will fund the debt service reserve, capitalized interest, and the costs of issuance. The debt service reserve is required by prospective bond purchasers, and it is set initially for each series at the lesser of maximum annual debt service, 10% of the proceeds of the bonds of such series, or 125% of average annual debt service.

Bond proceeds are also expected to fund interest payable during the construction period as well as the period between the time that the project infrastructure is completed and portions of the Developments as outlined in Table 1 are finished and included on the tax rolls of the Local Governments (currently expected through November 1, 2007). Capitalized interest is estimated at an interest rate of 7% for 40 months.

The Financial Advisor has estimated the underwriter’s discount at 2.5%. This allowance pays the underwriter for taking the risks involved in purchasing the District’s Series 2004 Bonds. The cost of issuance pays for the trustee, financial advisor, district counsel, bond counsel, and other costs associated with issuing the District's Series 2004 Bonds.

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D-88 Table 4. Sizing of the Series 2004 Bonds

Category Series Series 2004B Total Bonds 2004A Construction $50,698,364 $20,427,103 $71,125,467 Debt Service Reserve $5,448,450 $2,277,263 $7,725,713 Capitalized Interest $14,779,800 $6,357,986 $21,137,786 Cost of Issuance $470,000 $205,000 $675,000 Underwriter's Discount $1,839,500 $750,500 $2,590,000 Original Issue Discount $340,330 $0 Rounding $3,556 $2,148 $5,704 ======Total CDD Debt $73,580,000 $30,020,000 $103,600,000

2.4 Allocation to Benefiting Properties – The Assessment Methodology

The discussion offered below illustrates the process by which the District will allocate debt incurred to support its CIP. This debt will be fully secured by special assessments levied on to properties in the District based on and proportional to the benefits that each receives from the CIP.

As described above, Midtown Miami East and Buena Vista West plats are already recorded, but the specific land uses in the District are indeterminable until construction is completed. Therefore, at the outset, the District’s debt will be allocated to each platted tract in the District based on the land uses expected on that tract as described in Table 1, and the acreage in each tract. As construction occurs, the District will more finely articulate the allocation of debt to benefiting properties in Midtown Miami East and Buena Vista West based on the land uses and the ERUs that result. However, in no case shall the total amount of allocated debt exceed the par amount of the Series 2004 Bonds.

As noted above, as long as two basic principles are adhered to, Florida law allows the District Board great latitude in determining the appropriate methodology to allocate the costs of its CIP to benefiting properties in the District. The two principles are: (1) the properties being assessed must receive a special benefit from the CIP and (2) the assessments allocated to each property must be fairly and reasonably apportioned among the benefiting properties. In allocating special assessment costs to benefiting property, Florida governments have used a variety of methods including, but not limited to, front footage, area, trip rates, equivalent residential units, dwelling units, acreage, and value.

` D-99 The issue of special benefit was discussed in detail in Sections 1.4 and 1.5 above. Thus, the focus in the remainder of this section is on fair and reasonable apportionment of the indebtedness the District plans to incur to fund its CIP.

In the particular circumstances of the District an equitable allocation of the debt must be based on the specific characteristics of the types of debt, even though both are fully secured by assessments on the benefiting properties. As noted above, the Local Governments have entered into the ILA with the District. Under the ILA the Local Governments will contribute funds to the District that will pay for some, or perhaps all, of the debt service incurred for the Series 2004A Bonds as shown in Table 4. The proceeds of the Series 2004A Bonds will be used to fund the parking garages and the mid-block and plaza improvements as shown in Table 3. The balance of the improvements are not part of or subject to the ILA. Therefore, the District must assess fully for this portion of the costs for the CIP.

Given these facts, an equitable apportionment of the costs associated with the CIP must recognize the differences between the two types of debt that fund the CIP and must allocate each separately. Considering first the Series 2004B Bonds which will fund most of the basic infrastructure contained in the CIP including, but not limited to, roadways (within and without the District), utilities, streetscape and landscape. The benefits flowing from these improvements are reasonably divided first on the net developable acreage. Approximately 60% of the developable acreage in the District is located on lands owned by DDR and located on Tracts “A”, “C”, “D”, “E” and “F” of Buena Vista West. The balance of 40% of the developable land in the District is located on lands to be developed by Midtown Partners which includes all of the Midtown Miami East plat and Tract “B” in Buena Vista West. Ultimately, each of the two portions of the site, East and West, are expected to be developed with the current plan shown in Table 1. A variety of methods can be used to subdivide the costs of the assessment bonds to these uses. In this application an equivalent residential unit (“ERU”) basis is the most equitable.

Table 5 presents the calculations for the ERU for each component of the Development. In this case, the standard for an ERU is one condominium unit of less than 1,750 square feet of heated and air conditioned space. The apartment units are approximately 50% of the size of the condominium units, therefore they are assigned an ERU per unit of 0.5. The larger condominiums are assigned an ERU of 1.5 to reflect their size relative to the standard condominium.

D-1010 The retail shopping center is assigned 1 ERU per 250 square feet of space in recognition of the substantial demands on District infrastructure that this commercial use will generate. The restaurant, bar, and entertainment uses also create significant impact on District infrastructure, but the intensity of impact based on the expected number of patrons per square foot of commercial space is somewhat lower than the retail shopping center. Therefore, this use is assigned 1-ERU per 750 square feet of space. The other retail space contained in the condominium towers will also create significant commercial activity. However, the intensity of this activity is somewhat lower than that for the shopping center. Therefore, this other retail use is calculated at a somewhat lower rate of 1,250 square feet per ERU.

The mixed-use facility, which is currently planned to include a hotel is counted as 1 ERU per 1,500 square feet since the mixed use space is designed to perform similarly to the office space. The office space is assigned 1-ERU per 1,500 square feet reflecting again intensity of use.

These relationships between the ERUs assigned to each land use are consistent with the relative amounts of “Economic Incentive Payments” as defined in the ILA that will be generated by each land use under the ILA.

Table 5. Calculation of Equivalent Residential Unit Midtown Miami Development Project

ERU/Unit Category Total ERU/sq.ft. ERU % ERU

Retail Shopping Center (square feet) 600,000 250.0 2,400 41.31%

Other Retail or Grocery (square feet) 71,750 1,250.0 57 0.99% Restaurant, Bar, Entertainment (square feet) 100,250 750.0 134 2.30%

Condominiums Over 1,750 square feet 480 1.5 720 12.39% Condominiums 1,750 square feet or Less 2,120 1.0 2,120 36.49%

Apartments (units) 397 0.5 199 3.42%

Offices (square feet) 150,000 1,500.0 100 1.72%

Mixed Use Building (square feet) 120,000 1,500.0 80 1.38% Parking Garage (spaces) 2,914 0 0 0.00% ======

Total 5,810 100.00%

` D-1111 Table 6 allocates the costs of the Series 2004B Bonds to benefiting properties in the District, based on the discussion above using a two step process. First, because of the nature of the infrastructure financed from the proceeds of the Series 2004B Bonds 60% of the costs are allocated to tracts owned by DDR. These tracts are all within the Buena Vista West plat and are comprised of Tracts A, C, D, E, and F. This is based on fact that these parcels constitute approximately 60% of the net developable land in the District.

Second, the balance of the debt associated with the Series 2004B Bonds is then distributed to the remaining 40% of the net developable land contained in the tracts owned by Biscayne. These include all of the tracts within the Midtown Miami East plat and Tract B in the Buena Vista West plat.

As construction occurs and the specific land uses are determined and located, the debt allocated to each acre will be further divided among the other land uses therein based on their ERUs. As noted above, the precise location of the various land uses is unknown at this time. Thus, the ultimate distribution of debt will occur when construction is completed on each platted tract and the ERUs are then known with certainty.

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D-1212 Table 6. Allocation of the Series 2004B Assessment Bonds to Benefiting Properties in the District

Category Square Footage ERUs % ERUs Allocation Midtown Partners

Midtown Miami East Tract A 47,510 231 7.18% $862,104 Tract B 40,936 199 6.19% $742,814 Tract C 80,365 390 12.14% $1,458,282 Tract D 93,140 452 14.07% $1,690,094 Tract E 68,787 334 10.39% $1,248,191 Tract F 83,246 404 12.58% $1,510,560 Tract G 66,972 325 10.12% $1,215,256 Tract H 72,484 352 10.95% $1,315,275 Tract I 71,218 346 10.76% $1,292,303

Buena Vista West Tract B 155,252 180 5.61% $673,122 ======Subtotal 624,658 3,211 100.00% $12,008,000

DDR Square Footage ERUs % ERUs Allocation

Buena Vista West Tract A 393,908 1,067 41.05% $7,393,487 Tract C 98,793 268 10.29% $1,854,303 Tract D 96,947 263 10.10% $1,819,654 Tract E 156,389 423 16.30% $2,935,355 Tract F 213,601 578 22.26% $4,009,201

======Subtotal 959,638 2,599 100.00% $18,012,000

======Total 1,584,296 5,810 $30,020,000

` D-1313 The costs associated with the District’s Series 2004A Bonds could also be allocated to benefiting properties in a variety of ways. The infrastructure financed from the proceeds of the Series 2004A Bonds is to be paid in part from the ILA revenues which are generated from the completion of components of the Development. Consequently, in this particular case the most equitable basis is to allocate benefit to completed Development components on the basis of ERUs which approximates completed Development components most closely. The calculation of ERUs was shown in Table 5. On this basis Table 7 presents the allocations for the Series 2004A Bonds.

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D-1414 Table 7. Allocation of the Series 2004A Bonds to Benefiting Properties in the District

Category Square Footage ERU % of Total Allocation Midtown Partners

Midtown Miami East Tract A 47,510 230.54 3.97% $2,919,808 Tract B 40,936 198.64 3.42% $2,515,791 Tract C 80,365 389.96 6.71% $4,938,968 Tract D 93,140 451.95 7.78% $5,724,077 Tract E 68,787 333.78 5.75% $4,227,422 Tract F 83,246 403.94 6.95% $5,116,024 Tract G 66,972 324.97 5.59% $4,115,878 Tract H 72,484 351.72 6.05% $4,454,627 Tract I 71,218 345.58 5.95% $4,376,823

Buena Vista West Tract B 155,252 180 3.10% $2,279,757 ======Subtotal 624,658 3,211 55.27% $40,669,175

DDR Square Footage ERUs % ERUs Allocation

Buena Vista West Tract A 393,908 1,067 18.36% $13,509,091 Tract C 98,793 268 4.60% $3,388,110 Tract D 96,947 263 4.52% $3,324,801 Tract E 156,389 423 7.29% $5,363,367 Tract F 213,601 578 9.96% $7,325,455 ======Subtotal 959,638 2,599 44.73% $32,910,825 ======Total 1,584,296 5,810 100.00% $73,580,000

` D-1515 Table 8 brings these allocation components together.

Table 8. Total Allocation of District Debt Incurred to Fund the CIP to Benefiting Properties in the District

Category Square Footage Total Allocation Midtown Miami East Tract A 47,510 $3,781,912 Tract B 40,936 $3,258,605 Tract C 80,365 $6,397,249 Tract D 93,140 $7,414,171 Tract E 68,787 $5,475,613 Tract F 83,246 $6,626,584 Tract G 66,972 $5,331,134 Tract H 72,484 $5,769,903 Tract I 71,218 $5,669,126

Buena Vista West Tract B 155,252 $2,952,879 ======Subtotal 779,910 $52,677,175

DDR Square Footage Total Allocation

Buena Vista West Tract A 393,908 $20,902,578 Tract C 98,793 $5,242,413 Tract D 96,947 $5,144,456 Tract E 156,389 $8,298,723 Tract F 213,601 $11,334,656 ======Subtotal 959,638 $50,922,825 ======Total 1,739,548 $103,600,000

D-1616 Table 9 translates the allocations from the various tracts to the land uses planned for the Developments according to Table 1. The allocations are based on the calculations shown above in Table 8 using the ERU method. It is important to point out that the total allocated debt per ERU varies depending upon whether the land is being developed by DDR or by Midtown Partners. This differentiation is the result of the first step in the allocation process as described above and shown in Table 6 for the Series 2004B Bonds. As each project component is actually constructed and the ERUs are know with certainty, the District will use the information in Table 9 to determine the allocations and assign them to the new Tax ID numbers as these are issued from time to time.

Table 9. Allocations to Properties

Category Total ERUAllocation/ERU Total Par

DDR Retail Shopping Center (square feet) 600,000 2,400 $19,597 $47,032,819

Biscayne Partners

Apartments (units) 397 199 $19,597 $3,890,006

Offices (square feet) 150,000 100 $16,405 $1,640,488

Mixed Use Building 120,000 80 $16,405 $1,312,391 Other Retail or Grocery (square feet) 71,750 57 $16,405 $941,640 Restaurant, Bar, Entertainment (square feet) 100,250 134 $16,405 $2,192,786 Condominiums Over 1,750 square feet 480 720 $16,405 $11,811,516 Condominiums 1,750 square feet or Less 2,120 2,120 $16,405 $34,778,354

Spa/gym (square feet) - - $16,405 $0 ======

Total 5,810 $103,600,000

As noted above, $103,600,000 in Series 2004 Bonds were sold. This is significantly below the previous estimate of $106,575,000. Therefore, the total amount of assessment has decreased for all land uses expected in the District.

` D-1717 2.5 Allocation of ILA Revenues to Benefiting Properties

Under the terms of the ILA the development of portions of the land use plan shown in Table 1 generate ILA payments from the Local Governments to the District to pay a portion of the debt service on the Series 2004A Bonds. Table 10 provides the relevant portion of the ILA that describes the contributions by the Local Governments as components of the development plan are completed.

Table 10. Schedule I from the ILA Describing the Contribution of Revenues1

Phase I Components must be issued a Certificate of Occupancy no later than December 31, E. I. P. per E.I.P. 2006 Devp. Devp. Unit Per C.O. Sq.Ft./ Units Unit Phase C.O. Devp.Component Debt Service Retail 600,000.00 600.00 Integrated and Surface Parking Spaces 2,914.00 258.56 Midtown Plaza (Public) Condo Twr #1 w/ Rest.-Bar (374,500sq. 374,500.00 374.50 Ft.) 1,233.06 $2,075.87 $2,559,680.00 $2,559,680.00 90% CO Issued* 1,109.76 $2,306.52 $2,559,680.00

Phase II Components must be issued a Certificate of Occupancy no later than December 31, 2007 Hotel/Spa (235,000 sq. ft.) 235,000.00 235.00 Apartments (292,000 Sq. Ft.) 292,000.00 292.00 Office 150,000.00 150.00 Condo Twr #2 w/ Rest.-Bar (395,500 sq. 395,500.00 395.50 ft.) Total Phase II 1,072.50 Cumulative Phase II 2,305.56 $2,602.12 $5,999,360.00 $5,999,360.00 90% CO Issued** 2,075.01 $2,891.25 $5,999,360.00

Source: Schedule I from the ILA

1. There are slight discrepancies between the descriptions of Phase I and II Components in the ILA and the descriptions in Table I. Such discrepancies are insignificant for purposes of this report.

D-1818 According to the ILA2 the Local Governments contribution of revenues (whether EIP or tax increment revenues) is limited and conditioned upon the provisions of Schedule I as summarized in Table 10 above. As Table 10 shows, the Local Governments will contribute revenues under the ILA commencing when 90% of the Phase 1 components are completed as evidenced by certificates of occupancy. Furthermore, the revenues contributed when this condition is satisfied are limited to $2,599,580. When the conditions described for Phase 2 are satisfied, that certificates of occupancy are issued for 90% of the Phase 2 project components, the level of contribution will rise to $5,999,360.

The ILA requires that one of the completed development components in Phase 1 be the retail center and in Phase 2 the offices.3 However, the ILA also provides flexibility with respect to the other project components as long as 90% of their aggregate square footage is completed.4 As various project components are completed, the Local Governments will contribute ILA revenues as described above. In general, the District will credit project components with ILA revenues that those components generate as an offset to their debt service obligation for the Series 2004A Bonds.

However, four additional factors must be considered in order to effect an equitable allocation of ILA revenues. First, ILA revenues are limited to $5,999,360 or the debt service on the Series 2004A Bonds, whichever is less. Second, this ceiling level of ILA revenues is achieved under the ILA after the Phase 2 project components are completed. Therefore, after the Phase 2 components are completed the expected debt service on the Series 2004A Bonds is essentially defeased benefiting all of the Phase 1 and Phase 2 components as well as future components not yet completed. Third, the parking garages generate revenue under the ILA, but since the garages are District property and not subject to assessment, no assessments are available to be directly offset by these revenues. So, the garages generate revenue that must be credited to other land uses. Finally, because the ILA revenues generated only related to the Series 2004A Bonds and not the Series 2004B Bonds, they do not have a direct relationship to the allocation of District debt under the assessment methodology outlined above.

2 See Sections 3.2 and 3.3 of the ILA 3 ILA Section 3.2.1. 4 Ibid.

` D-1919 In light of all of these facts an equitable distribution of the credits generated under the ILA is determined as follows. First, the availability of ILA revenues under Phase 1 is conditioned on the completion of the retail center of at least 600,000 square feet.5 Second, since the maximum ILA revenue is achieved after completion of the Phase 1 and Phase 2 components, and once Phase 1 and Phase 2 are completed the debt service requirements for the Series 2004A Bonds are expected to be satisfied, it is reasonable to pool the credits against the obligations for project components included in Phase 1 and Phase 2 to the extent that both phases are not completed at the dates scheduled in Table 10. For the Phase 1 and Phase 2 project components the credit per development unit under the ILA is $2,931. Table 11 shows how this process is designed to occur.

Table 11. Allocation of the ILA Revenues and Comparison to the Expected Debt Service on the Series 2004A Bonds by Component

Series 2004A Development Debt Service Component Units ILA Revenue Obligation Surplus/Deficit Retail Center 600 $1,758,484 $2,533,293 ($774,809) Condominium Tower #1 375 $1,097,587 $423,676 $673,911 Office 150 $439,621 $105,554 $334,067 Other Components 923 $2,703,669 $2,936,838 ($233,169) ======Total 2,047 $5,999,360 $5,999,360 ($0)

2.6 True Up Mechanism

Although the District does not process plats or distribute new Tax ID numbers when subdivisions are made, it does have an important role to play. Whenever a new Tax ID number is assigned to property in the District, the District must allocate a portion of its debt to the property identified by the Tax ID according to the methodology outlined above. In addition, the District must also prevent any additional buildup of debt on land not yet developed. Otherwise, the District property could be fully developed without all of the debt being allocated in proportion to the benefits conveyed by the Series 2004 Project.

5 ILA Sections 3.3.1 and 3.2.1

D-2020 To preclude this, a test is conducted at the thresholds of 25%, 50%, 75% and 90% based on estimated ERUs as per Table 5. Since the retail shopping center and apartments are to be developed initially, and given their levels of ERUs, the retail center and apartments are split out from the balance of the other land uses for the true up test. The test then applies at the 25% threshold for ERUs and assumes that the retail shopping center and apartments are contained in the first 25% of the ERU base. Table 12 illustrates these calculations.

Table 12. Thresholds for Measuring True - Up

Category 25% 50% 75% 90%

Cumulative ERUs 1,452 2,905 4,357 5,229 Retail Shopping Center & Apartments ERU 2,599 2,599 2,599 2,599 Allocation to Retail Center & Apartments $50,922,825 $50,922,825$50,922,825 $50,922,825 Remaining Debt $52,677,175 $47,652,633 $23,826,316 $9,530,527

Unallocated ERU 3,211 2,905 1,452 581 Debt per Unallocated ERU $16,405 $16,405 $16,405 $16,405

At the time of the tests the District will determine the debt per remaining ERU. The debt cannot exceed $16,505 per remaining ERU. As construction occurs and the debt on each parcel is subdivided among the new land uses and Tax ID numbers are assigned, the District will allocate a portion of the total debt based on the ERU for that parcel. Then the District will calculate the debt per remaining ERU as per Table 12.

Finally, if a portion of the benefiting property in the District is taken through eminent domain or sold to a governmental or other entity that is immune or exempt from the payment of ad valorem property taxes, any District lien for special assessments encumbering such property will have to be extinguished through the prepayment of the District's special assessments levied on such property. Any such prepayment will result in the reduction of the District debt (through redemption of a portion of the Series 2004 Bonds).

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` D-2121 3.0 Methodology for Allocating Operating and Maintenance Expenses

3.1 Introduction

In addition to planning and constructing the CIP as described in Table 2 above, the District will also operate and maintain its infrastructure. To fund its operations and maintenance activities the District will determine the budget for these activities each year and assess a portion of these costs to each benefiting property in the District. Table 13 provides the estimate for the District’s operations and maintenance budget for the fiscal year commencing October 2006. This estimated budget will change as better estimates become available. Therefore, the numerical examples of how the methodology for apportioning the costs for operations and maintenance provided below are only illustrative of the methodology.

Table 13. Estimated Costs for Operations and Maintenance Midtown Miami Community Development District

Category Amount Administration $60,000 Audit $20,000 Attorney $20,000 Trustee $7,500 Meeting fees $6,000 Insurance $20,000 Property Taxes on Garage $0 Project security $734,745 Project infrastructure maintenance @ 2.5% 658,268 Project garage maintenance in garage budget $0 Contingency @ 20% $305,303 ======Total $1,831,815

One important assumption is that the parking garages will be exempt from property taxes. The rationale supporting this assumption is that the District, a bona fide unit of local government, owns the garages and the parking facilities provided by the garages benefit and are for the use of the general public on a nonexclusive basis. Thus, the two prongs for exemption from property taxes (governmental ownership and public use) are expected to be satisfied.

D-2222 In addition, the District’s parking consultant projects that the operating revenues from the garages will support the operations and the maintenance of the garages. Therefore, no assessable costs are associated with the garages.

3.2 Methodology for Allocating District Operations and Maintenance Expenses

For the most part the costs associated with operating and maintaining District facilities and operating the District itself benefit all properties in the District equally. Therefore, it is reasonable to allocate these costs on the basis of ERUs as per Table 5 above.

There are a few exceptions to this rule. First, the District’s security operations confer most of their benefits on the retail shopping center. Therefore, 90% of these costs are allocated to the retail shopping center. Second, the costs to maintain the infrastructure are essentially related to the infrastructure funded by the Series 2004 B Bonds rather than the Series 2004A Bonds, because the operational revenue from the garages will fund the maintenance. Since the benefits from the infrastructure funded by the Series 2004B Bonds accrue 60% to the retail shopping center, it is reasonable to assign 60% of the maintenance costs for this component to the retail shopping center as well. This same principle also applies to the contingency budget. Finally, as noted above, the operating revenues from the parking garages are projected to provide sufficient revenue to fund their own maintenance. If there are surplus operating revenues generated by the parking garages, these funds will be used to pay a portion of the debt service on the Series 2004B Bonds.

Table 14 displays the calculations for operations and maintenance costs for the retail shopping center using this methodology. The operations and maintenance expense not assigned to the shopping center are borne by the other components of the Development.

` D-2323 Table 14. Allocation of Costs for Operations and Maintenance to The Retail Shopping Center

Category Amount Share AmountBalance Administration $60,000 41.31% $24,787$35,213 Audit $20,000 41.31% $8,262$11,738 Attorney $20,000 41.31% $8,262$11,738 Trustee $7,500 41.31% $3,098$4,402 Meeting fees $6,000 41.31% $2,479 $3,521 Insurance $20,000 41.31% $8,262$11,738 Property Taxes on Garage $0 90.00% $0 $0 Project security $734,745 90.00% $661,271 $73,475 Project infrastructure maintenance @ 2.5% 658,268 60.00% $394,961 $263,307 Project garage maintenance in garage budget $0 90.00% $0$0 Contingency @ 20% $305,303 90.00% $274,772 $30,530 ======Total $1,831,815 $1,386,154 $445,661

As noted above, the costs that are not allocated to the retail shopping center are apportioned to the other uses in the Developments based on their ERUs. Table 15 provides the allocations to the other properties planned for the District.

Table 15. Allocation of Costs for Operations and Maintenance to The Other Properties in the District

Category ERU Share Allocation Allocation/Unit Other Retail or Grocery (square feet) 57 1.68% $7,502.7 $0.10 Restaurant, Bar, Entertainment (square feet) 134 3.92% $17,471.5 $0.17 Condominiums Over 1,750 square feet 720 21.12% $94,110.6 $196.06 Condominiums 1,750 square feet or Less 2,120 62.18% $277,103.3 $130.71 Apartments (units) 199 5.82% $25,945.8 $65.35 Offices (square feet) 100 2.93% $13,070.9 $0.09 Mixed Use Building (square feet) 80 2.35% $10,456.7 $0.09 ======

Total 3,410 100.00% $445,661

D-2424 APPENDIX E

TAX INCREMENT REPORT [THIS PAGE INTENTIONALLY LEFT BLANK] TAX INCREMENT REVENUE REPORT FOR MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT

Updated June 25, 2004

Prepared for

Board of Supervisors Midtown Miami Community Development District

Prepared by

Fishkind & Associates, Inc. 11869 High Tech Avenue Orlando, Florida 32817 407-382-3256 [THIS PAGE INTENTIONALLY LEFT BLANK] ______

TAX INCREMENT REVENUE REPORT FOR MIDTOWN MIAMI COMMUNITY DEVELOPMENT DISTRICT Updated June 25, 2004 ______

1.0 Introduction

1.1 Purpose

This report provides projections for the incremental tax revenues (“TIF”) flowing from the development of the two distinct planned developments known as Midtown Miami and the Shops at Midtown Miami currently planned for the 56-acre site (“Property”) located within the District (collectively, the “Developments”). The Developments are a mixed-use project being developed by Midtown Partners, LLC (“Midtown Partners”) and DDR Miami Avenue, LLC (“DDR”). DDR is expected to develop a retail shopping center known as the Shops at Midtown Miami on its portion of the Property. Midtown Partners and DDR are collectively referred to herein as “Developers” and each one a “Developer”. The Developments planned include a +/- 600,000 square foot shopping center; 2,600 condominiums; 71,750 square feet of additional retail space on the ground floors of the condominium towers; 397 apartments; 100,250 square feet of entertainment-oriented commercial space; a 120,000 square foot mixed- use building, 150,000 square foot office complex, and parking garages sufficient to accommodate 3,017 vehicles. Table 1 summarizes the development program currently planned for the Developments.

TABLE 1. Development Plan for Midtown Miami

Category Total Buena Vista West Retail Shopping Center (square feet) 600,000 Apartments (units) 397 Offices (square feet) 150,000 Mixed-Use Building (square feet) 120,000

Midtown Miami East Other Retail or Grocery (square feet) 71,750 Restaurant, Bar, Entertainment (square feet) 100,250 Condominiums Over 1,750 square feet (units) 480 Condominiums 1,750 square feet or Less (units) 2,120 Source: Developers

E-1 1.2 Contribution of Revenues Under the Interlocal Agreement

The Board of County Commissioners of Miami-Dade County created the Midtown Miami Community Development District (“District”) pursuant to Ordinance No. 03-271 adopted on December 16, 2003 and effective on December 26, 2003. The District was established to provide infrastructure, including, but not necessarily limited to, roadways (within and without the District), water and sewer facilities, a stormwater management system, streetscape and landscape, and parking garages.

On May 28, 2004, the City of Miami (“City”), Miami-Dade County (“County”), and the District entered into an Interlocal agreement (“ILA”) whereby the City and the County (collectively the “Local Governments”) agreed to make contributions to defray a portion of the District’s debt service costs associated with a portion of the capital improvement program (“CIP”). This is described in more detail below.

Under the terms of the ILA the development of portions of the development plan shown in Table 1 generate ILA payments from the Local Governments to the District to pay a portion of the debt service on the Series 2004A Bonds. Table 2 provides the relevant portion of the ILA that describes the contributions by the Local Governments as components of the development plan are completed.

According to the ILA1 the Local Governments contribution of revenues (whether EIP or tax increment revenues) is limited and conditioned upon the provisions of Schedule I as summarized in Table 2 below. As Table 2 shows, the Local Governments will contribute revenues under the ILA commencing when 90% of the Phase 1 components are completed as evidenced by certificates of occupancy. Furthermore, the revenues contributed when this condition is satisfied are limited to $2,599,680. When the conditions described for Phase 2 are satisfied, that certificates of occupancy are issued for 90% of the Phase 2 project components, the level of contribution will rise to $5,999,360.

1 See Sections 3.2 and 3.3 of the ILA

E-2 Table 2. Schedule I from the ILA Describing the Contribution of Revenues

Phase I Components must be issued a Certificate of Occupancy no later than December 31, E. I. P. per E.I.P. 2006 Devp. Devp. Unit Per C.O. Sq.Ft./ Units Unit Phase C.O. Devp.Component Debt Service Retail 600,000.00 600.00 Integrated and Surface Parking Spaces 2,914.00 258.56 Midtown Plaza (Public) Condo Twr #1 w/ Rest.-Bar (374,500sq. 374,500.00 374.50 Ft.) 1,233.06 $2,075.87 $2,559,680.00 $2,559,680.00 90% CO Issued* 1,109.76 $2,306.52 $2,559,680.00

Phase II Components must be issued a Certificate of Occupancy no later than December 31, 2007 Hotel/Spa (235,000 sq. ft.) 235,000.00 235.00 Apartments (292,000 Sq. Ft.) 292,000.00 292.00 Office 150,000.00 150.00 Condo Twr #2 w/ Rest.-Bar (395,500 sq. 395,500.00 395.50 ft.) Total Phase II 1,072.50 Cumulative Phase II 2,305.56 $2,602.12 $5,999,360.00 $5,999,360.00 90% CO Issued** 2,075.01 $2,891.25 $5,999,360.00

Source: Schedule I from the ILA

The ILA requires that one of the completed development components in Phase 1 be the retail center and in Phase 2 the office tower.2 However, the ILA also provides flexibility with respect to the other project components as long as 90% of their aggregate square footage is completed.3 As various project components are completed, the Local Governments will contribute ILA revenues as described above.

Under the ILA the Local Governments have committed themselves to form a Community Redevelopment Agency (“CRA”) with boundaries coterminous with those of the District. When the CRA is established, the Local Governments will cause the CRA to be added as a party to the ILA substituting TIF from the Developments for any economic incentive payments (“EIP”) that would otherwise be required under the ILA.

2 ILA Section 3.2.1. 3 Ibid.

E-3 The balance of this report presents estimates for the TIF generated by the Developments.

2.0 Estimates for TIF Generated by the Developments

2.1 Estimated Value of the Developments

Table 3 provides estimates for the value of the development plan outlined in Table 1. The total estimated total value exceeds $1 Billion without allowance for inflation. These values are based on the construction costs for the retail, office, mixed use, apartments and garage facilities. The values for the condominiums are based on current sales prices.

Table 3. Estimated Value of the Developments

Cost per Sqft or Component Square feet or Units Unit Total Costs First Increment of Development Retail with Land 600,000 $133 $79,800,000 Retailers FF&E 600,000 $15 $9,000,000 Apartments 397 $86,700 $34,419,900 Parking Structures $48,000,000 1st Condo Tower (Building 2) 325 $324,769 $105,550,000 Restaurant/bar in 1st Condo Tower 16,000 $150 $2,400,000 Second Increment of Development 2nd Condo Tower (Building 4) 325 $324,769 $105,550,000 Offices (square feet) 150,000 $150 $22,500,000 Restaurant/bar in Office Building 20,250 $150 $3,037,500 Restaurant/bar in 2nd Condo Tower 16,000 $150 $2,400,000 Mixed Use Building (square feet) 120,000 $200 $24,000,000 Third Increment of Development 3rd Condo Tower (Building 1) 325 $324,769 $105,550,000 Retail in 3rd Condo Tower 26,000 $150 $3,900,000 4th Condo Tower (Building 3) 325 $324,769 $105,550,000 Restaurant/bar in 4th Condo Tower 16,000 $150 $2,400,000 Fourth Increment of Development 5th Condo Tower (Building 5) 325 $324,769 $105,550,000 Retail in 5th Condo Tower 25,000 $150 $3,750,000 Fifth Increment of Development 6th Condo Tower (Building 6) 325 $324,769 $105,550,000 Restaurant/bar in 6th Condo Tower 16,000 $150 $2,400,000 7th Condo Tower (Building 7) 325 $324,769 $105,550,000 Restaurant/bar in 7th Condo Tower 16,000 $150 $2,400,000 Sixth Increment of Development 8th Condo Tower (Building 8) 325 $324,769 $105,550,000 Retail in 8th Condo Tower 20,750 $150 $3,112,500 ======Total $1,087,919,900

E-4 2.2 Estimates of Taxable Value

Initial taxable values for real estate are generally based on either the sales price for the real estate asset or on the construction cost for income producing properties by Florida’s property appraisers (“PA”). However, there are two major adjustments to the sale price or construction cost to determine taxable value. First, Florida’s Constitution requires consideration (ie. deduction for) the cost of sale. This is generally set at 10% by PAs in Florida and is routinely applied against residential real estate only. Second, condominiums that are owner-occupied can qualify for Florida’s homestead exemption. The homestead exemption reduces the taxable value of the homesteaded property by $25,000. Table 4 presents the estimates for taxable value for the Developments.

Table 4. Estimated Taxable Value of the Development

Component Total Costs Homestead Assessment Taxable Value Exemption Ratio First Increment of Development Retail with Land $79,800,000 100% $ 79,800,000 Retailers FF&E $9,000,000 100% $ 9,000,000 Apartments $34,419,900 100% $ 34,419,900 Parking Structures $48,000,000 0% $ - 1st Condo Tower (Building 2) $105,550,000 $3,687,500 90% $ 91,676,250 Restaurant/bar in 1st Condo Tower $2,400,000 90% $ 2,160,000 Second Increment of Development 2nd Condo Tower (Building 4) $105,550,000 $3,687,500 90% $ 91,676,250 Offices (square feet) $22,500,000 90% $ 20,250,000 Restaurant/bar in Office Building $3,037,500 90% $ 2,733,750 Restaurant/bar in 2nd Condo Tower $2,400,000 90% $ 2,160,000 Mixed Use Building (square feet) $24,000,000 90% $ 21,600,000 Third Increment of Development 3rd Condo Tower (Building 1) $105,550,000 $3,687,500 90% $ 91,676,250 Retail in 3rd Condo Tower $3,900,000 90% $ 3,510,000 4th Condo Tower (Building 3) $105,550,000 $3,687,500 90% $ 91,676,250 Restaurant/bar in 4th Condo Tower $2,400,000 90% $ 2,160,000 Fourth Increment of Development 5th Condo Tower (Building 5) $105,550,000 $3,687,500 90% $ 91,676,250 Retail in 5th Condo Tower $3,750,000 90% $ 3,375,000 Fifth Increment of Development 6th Condo Tower (Building 6) $105,550,000 $3,687,500 90% $ 91,676,250 Restaurant/bar in 6th Condo Tower $2,400,000 90% $ 2,160,000 7th Condo Tower (Building 7) $105,550,000 $3,687,500 90% $ 91,676,250 Restaurant/bar in 7th Condo Tower $2,400,000 90% $ 2,160,000 Sixth Increment of Development 8th Condo Tower (Building 8) $105,550,000 $3,687,500 90% $ 91,676,250 Retail in 8th Condo Tower $3,112,500 90% $ 2,801,250 ======Total $1,091,457,900 $ 921,699,900

E-5 2.3 Timing of Taxable Value

The Developments will occur over an eight-year horizon with completion of construction projected for February 2011. Table 5 provides the schedule and the taxable values by increment without allowance for inflation.

Table 5. Development Schedule in Incremental Taxable Values

Project Increment Constructio Completio On Taxes Value by n Starts n Date Tax Receive Increment Roll d First Increment 4-Jun 6-Jun 7-Jan 8-Jan $217,056,150 Second Increment 5-Feb 7-Feb 8-Jan 9-Jan $138,420,000 Third Increment 5-Oct 8-Feb 9-Jan 10-Jan $189,022,500 Fourth Increment 7-Feb 9-Feb 10-Jan 11-Jan $95,051,250 Fifth Increment 7-Oct 10-Feb 11-Jan 12-Jan $187,672,500 Sixth Increment 9-Feb 11-Feb 12-Jan 13-Jan $94,477,500 ======Total $921,699,900

2.4 Estimated Incremental Tax Revenues

Table 6 below estimates the TIF revenues generated by the Developments to the Local Governments based on the following assumptions:

x Current millage rates for the City of Miami (8.85 mills) and Miami-Dade County (5.889 mills) x The increments of taxable value presented in Table 5. x A 3% per year rate of inflation/appreciation for property in the Development

Based on these considerations, the Developments will generate substantial surplus TIF in each year compared to the obligations of the Local Governments under the ILA. The lowest level of coverage comes in 2009 at 1.02 times the maximum amount allowed to be contributed by the Local Governments to the District under the ILA. The coverage increases dramatically as additional increments of development are completed. By 2013 when all of the development is on the tax rolls the coverage is almost 3 times the ILA obligation.

E-6 Table 6. Estimated TIF and Coverage Under the ILA

Year Incremental Value City of Miami Miami-Dade County Total ILA Maximum Coverage 2008 $244,298,609 $2,162,042.69 $1,438,674.51 $3,600,717.20 $2,559,680.00 1.41 2009 $412,094,285 $3,647,034.42 $2,426,823.24 $6,073,857.66 $5,999,360 1.01 2010 $650,159,863 $5,753,914.79 $3,828,791.44 $9,582,706.23 $5,999,360 1.60 2011 $786,565,708 $6,961,106.51 $4,632,085.45 $11,593,191.96 $5,999,360 1.93 2012 $1,047,900,587 $9,273,920.19 $6,171,086.56 $15,445,006.75 $5,999,360 2.57 2013 $1,202,609,313 $10,643,092.42 $7,082,166.24 $17,725,258.67 $5,999,360 2.95 2014 $1,238,687,592 $10,962,385.19 $7,294,631.23 $18,257,016.43 $5,999,360 3.04 2015 $1,275,848,220 $11,291,256.75 $7,513,470.17 $18,804,726.92 $5,999,360 3.13 2016 $1,314,123,667 $11,629,994.45 $7,738,874.27 $19,368,868.73 $5,999,360 3.23 2017 $1,353,547,377 $11,978,894.28 $7,971,040.50 $19,949,934.79 $5,999,360 3.33 2018 $1,394,153,798 $12,338,261.11 $8,210,171.72 $20,548,432.83 $5,999,360 3.43 2019 $1,435,978,412 $12,708,408.95 $8,456,476.87 $21,164,885.82 $5,999,360 3.53 2020 $1,479,057,764 $13,089,661.22 $8,710,171.17 $21,799,832.39 $5,999,360 3.63 2021 $1,523,429,497 $13,482,351.05 $8,971,476.31 $22,453,827.36 $5,999,360 3.74 2022 $1,569,132,382 $13,886,821.58 $9,240,620.60 $23,127,442.18 $5,999,360 3.85 2023 $1,616,206,354 $14,303,426.23 $9,517,839.22 $23,821,265.45 $5,999,360 3.97 2024 $1,664,692,544 $14,732,529.02 $9,803,374.39 $24,535,903.41 $5,999,360 4.09 2025 $1,714,633,321 $15,174,504.89 $10,097,475.63 $25,271,980.51 $5,999,360 4.21 2026 $1,766,072,320 $15,629,740.03 $10,400,399.89 $26,030,139.93 $5,999,360 4.34 2027 $1,819,054,490 $16,098,632.24 $10,712,411.89 $26,811,044.13 $5,999,360 4.47 2028 $1,873,626,125 $16,581,591.20 $11,033,784.25 $27,615,375.45 $5,999,360 4.60 2029 $1,929,834,908 $17,079,038.94 $11,364,797.78 $28,443,836.71 $5,999,360 4.74 2030 $1,987,729,956 $17,591,410.11 $11,705,741.71 $29,297,151.82 $5,999,360 4.88 2031 $2,047,361,854 $18,119,152.41 $12,056,913.96 $30,176,066.37 $5,999,360 5.03 2032 $2,108,782,710 $18,662,726.98 $12,418,621.38 $31,081,348.36 $5,999,360 5.18 2033 $2,172,046,191 $19,222,608.79 $12,791,180.02 $32,013,788.81 $5,999,360 5.34 2034 $2,237,207,577 $19,799,287.06 $13,174,915.42 $32,974,202.48 $5,999,360 5.50 2035 $2,304,323,804 $20,393,265.67 $13,570,162.88 $33,963,428.55 $5,999,360 5.66 2036 $2,373,453,518 $21,005,063.64 $13,977,267.77 $34,982,331.41 $5,999,360 5.83 2037 $2,444,657,124 $21,635,215.55 $14,396,585.80 $36,031,801.35 $5,999,360 6.01 2038 $2,517,996,838 $22,284,272.01 $14,828,483.38 $37,112,755.39 $5,999,360 6.19 2039 $2,593,536,743 $22,952,800.17 $15,273,337.88 $38,226,138.05 $5,999,360 6.37 2040 $2,671,342,845 $23,641,384.18 $15,731,538.01 $39,372,922.19 $5,999,360 6.56 ======Total $484,715,795 $322,541,392 $807,257,186 $194,539,200

E-7 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX F

CERTAIN INFORMATION ABOUT THE CITY [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX F

CERTAIN INFORMATION CONCERNING THE CITY OF MIAMI

INTRODUCTION Background

Now 107 years old, the City is part of the nation’s eleventh largest metropolitan area. Incorporated in 1896, the City is the only municipality conceived and founded by a woman – Julia Tuttle. According to the U.S. Census Bureau, the City’s population in 1900 was 1,700 people. Today it is a city rich in cultural and ethnic diversity with more than 362,000 residents, 60% of them foreign born. In physical size the City is not large, encompassing only 34.3 square miles. In population, the City is the largest of the 31 municipalities that comprise Miami-Dade County and is the county seat.

City Government

Since 1997, the City has been governed by a form of government known as the “Mayor- Commissioner plan.” There are five Commissioners elected from designated districts within the City. The Mayor is elected at large every four years. As official head of the City, the Mayor has veto authority over actions of the City Commission. The Mayor appoints the City Manager who functions as chief executive officer and is accountable to the Mayor and City Commission.

In October 2002, the Mayor reorganized the City’s administration, appointing a Chief Financial Officer, Chief Information Officer and a Chief of Neighborhood Services. These officers have taken over functions previously performed by Assistant City Managers and some functions have merged. Additionally, the Budget Office has become the Office of Strategic Planning, Budgeting and Performance.

Economy

The economic base of the City has diversified in recent years, shifting from reliance on the tourism industry to a combination of manufacturing, services industries and international trade. The area’s advantages in terms of climate, geography, low taxes and skilled labor have combined to make the Miami area a prime relocation area for major manufacturing firms and international corporate headquarters.

F-1 The following major companies have their Latin American headquarters located in the City:

The Gap, Inc. Caterpillar Americas Co. Les Must de Cartier International Federal Express Corporation Ericsson, Inc. Eastman Chemical Latin America Lucent Technologies Telefonica International USA, Inc. Polaroid Corporation Barclays Bank PLC IBM Corporation Epson Latin America Oracle Corporation Canon Latin America Credit Lyonnais ABN AMRO Bank Acer Latin America Telia Swedtel Sony Latin America Mercedes Benz Latina AIB Financial Group Eastman Chemical Latin America Sanofi Beaute Miami Nera Latin America Volkswagen Group Latin America, Inc. Olympus America

ISSUES RELATED TO FINANCIAL EMERGENCY

Background

For the period 1984 through 1995, the General Fund of the City had a small but positive fund equity. During the same twelve year period the enterprise funds were recording losses in each year. The internal service funds recorded losses in eight of the twelve fiscal years. The internal service funds and the enterprise funds are collectively referred to as the proprietary funds. While the General Fund equity was being supported by transfers from the proprietary funds, the retained earnings in the proprietary funds were becoming more negative each year. By 1995, the enterprise funds had negative retained earnings of over $65 million and the internal service funds had negative retained earnings of over $7 million. In the 1996 Comprehensive Annual Financial Statements, the City recognized that the General Fund was the guarantor of the “proprietary operations” and collapsed the proprietary funds into the General Fund since they were not being operated as proprietary funds. This resulted in a negative equity of $21.8 million in the General Fund.

Appointment of Financial Oversight Board

In 1996, both Standard and Poor’s Rating Group and Moody’s Investors Service, Inc. lowered the City’s bond rating to below investment grade. Unable to obtain credit, and projecting a cash deficit hampering the City’s ability to make payroll, or pay bills, the City requested that the Governor advance its State shared revenue payments to the City prior to the date they were due. Pursuant to Executive Order 96-318, the Governor advanced $22 million to the City. Although the City was not technically in a financial emergency, as defined by the Florida Statutes, the Executive Order required the City to adopt a plan to resolve the financial situation by November 17, 1996. Unable to establish a plan to resolve the situation, the City Commission declared the City to be in a financial emergency. Pursuant to the City’s request, the Governor issued Executive Order 96-391 effective December 11, 1996, creating the Financial Oversight Board (the “FOB”) to monitor the financial affairs of the City. The FOB was established as a five-member board, appointed by the Governor. Also, Executive Order 96-391 directed the FOB to enter into an Intergovernmental Cooperation Agreement (the “ICA”). The ICA was entered into between the City, the Governor and the FOB and it is through the ICA that

F-2 the FOB received its power and authority. Further, the ICA established a corrective action plan and outlined an approval process for all functions key to the financial recovery process.

Pursuant to the corrective action plan the City implemented the following: (1) A financial recovery plan for fiscal year 1997 was developed by the City and approved by the FOB to eliminate the $68 million deficit and structurally balance recurring revenues with recurring expenditures; (2) All budgets developed by the City for five fiscal years of balanced operations were approved by the FOB before final adoption; (3) Monthly financial reports were prepared by the City and submitted to the FOB, which monitored budget to actual revenues and expenditures and explained trends and variances; (4) A five year plan was developed by the City and approved by the FOB for fiscal year 1997 through fiscal year 2001, which included forecasts of revenues and expenditures (both recurring and non-recurring), addressed managerial, operational and other deficiencies and set forth how the City planned to balance its operations in each year (this plan was updated annually by the City and approved by the FOB); (5) The City was prohibited from expending funds on anything but debt service payments if it was not operating under an FOB approved budget; (6) An official Estimating Conference made up of professional staff including the FOB’s financial advisor, reviewed and approved all revenue and expenditure estimates used in the budgets and Five Year Plan (as defined herein) of the City; (7) A Fiscal Sufficiency Advisory Board was created to ensure the City establishes and maintains segregated debt service payment accounts and that appropriate balances in the debt service funds were kept, and timely payment of debt service on bonds was made by the City; (8) A Contract Review Committee was established and the City was required to submit any amendment, renewal, extension or new contract with a value of $4,500 or more to the Contract Review Committee for approval before the City could enter into the contract (the amount was later amended upward to $10,000 or more); and (9) A time frame was provided for all required actions in the ICA. See “CURRENT FINANCIAL STATUS OF THE CITY” for a description of City policies resulting from the ICA’s corrective plan.

Since 1997, the FOB met 46 times in fulfillment of its role and pursuant to the requirements set forth in the ICA. Pursuant to its terms, the ICA terminates once the City has ended each of five consecutive fiscal years with balanced operations. The City’s external auditors have audited the results of operations for each of the five fiscal years (fiscal years 1996 through 2000) and have issued unqualified opinions. No other financial emergency conditions pursuant to Section 218.503, Florida Statutes have arisen concluding the terms of the ICA. With the release of the fiscal year 2001 Audited Financial Statements, which were released March 7, 2002, the City has fulfilled all of its obligations pursuant to the ICA. Consequently, the Governor, by letter dated March 19, 2002, declared that the City is no longer in a state of financial emergency. Therefore, the FOB was officially dissolved.

Securities and Exchange Commission Actions

On September 22, 1999, the SEC instituted an Administrative Proceeding against the City of Miami, Florida, its former City Manager, Cesar Odio, and its former Finance Director, Manohar Surana, AP File No. 3-10022. The SEC’s Division of Enforcement (the “Division”) alleged that the City violated Sections 17(a)(1), 17(a)(2) and 17 (a)(3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10(b)(5) thereunder, in connection with the sale of three bond offerings (the “Bond Offerings”), all of which occurred in

F-3 1995. The Division also alleged that the City’s two former officials were a cause of these violations. Messrs. Odio and Surana each subsequently reached settlements with the SEC.

The Division alleged, among other things, that the Official Statements for the Bond Offerings and the City’s 1994 Comprehensive Annual Financial Report omitted to disclose that the City’s cash position had materially declined since the close of fiscal year 1994 and the Official Statements for the Bond Offerings failed to disclose that “Operation Right-Size” (a plan instituted by the City to reduce costs), would not have been sufficient to remedy the City’s immediate economic problems. The SEC did not seek to impose monetary fines or penalties against the City, nor has the City been requested to re-state any previously issued financial statements. The sole remedy sought against the City was the entry of a cease and desist order.

In March 2000, the Division and the City proceeded to trial. On June 22, 2001, the Administrative Law Judge (“ALJ”) issued an Initial Decision (“Initial Decision”), in which the ALJ concluded that the City violated the federal securities laws and ordered that the City cease and desist from further violations of Exchange Act Section 10(b) and Rule 10(b)(5) thereunder, and Section 17(a) of the Securities Act.

The City appealed the Initial Decision contending that the ALF’s Initial Decision was erroneous and should be reversed and set aside by the SEC. On March 21, 2003 the SEC rendered its decision and ordered the City to cease and desist from committing or causing any further violations or future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5.

In connection with the foregoing proceedings, the SEC instituted an action against Rauscher Pierce Refsnes, Inc., now known as RBC Dain Rauscher Inc. (“Rauscher”) alleging that as underwriter of the City’s $72 million Pension Bond Offering in 1995, Rauscher should have known certain material information regarding the City’s financial condition and that the official statement failed to disclose the City’s true financial condition to investors. On September 27, 2001, the SEC ordered Rauscher to (1) cease and desist from committing or causing any violation and any future violation of Sections (17(a)(2) and (3) of the Securities Act, Section 15B(c)(1) of the Exchange Act and MSRB Rule G-17; (2) pay a civil money penalty in the amount of $200,000 to the United States Treasury and (3) comply with all provisions of the SEC Order.

In 1997, the City filed a professional malpractice action against the City’s former external auditing firm. A counterclaim was filed against the City alleging abuse of process in which the compensatory damages being sought were not specified. Both parties have come to an agreement and the cases have been settled.

CURRENT FINANCIAL STATUS OF THE CITY

The City has made progress toward implementing the ICA’s corrective plan. The FOB provided leadership and guidance to the City when and where necessary. The City’s present management has been stable and its key senior management positions (those positions which report to the City Manager) are filled with trained professionals. The City has adopted several

F-4 policies, as outlined below, to help it to continue its long term growth and prevent significant problems from developing again.

Adoption of Financial Integrity and Anti-Deficiency Ordinances

The City’s Anti-Deficiency Ordinance was passed in fiscal year 1999. The Anti- Deficiency Ordinance includes several provisions aimed at financial accountability, including holding department heads personally responsible for departmental overruns. The Anti- Deficiency Ordinance provides that no contract or other agreement may be entered into for future payment of money in excess of those funds approved in the current year budget. Further, if it is reasonably believed or anticipated that the annual budget of an agency or department may exceed the sum appropriated in the approved budget, then written notice shall be provided to the Mayor, City Commission, City Manager, City Attorney, City Clerk and the Chief of Strategic Planning, Budget and Performance.

In January 2000, the FOB and the City’s staff developed a Financial Integrity Ordinance. The ordinance augments the City’s Anti-Deficiency Ordinance. The Financial Integrity Ordinance was enacted as a preventative measure setting forth financial practices that would prevent the recurrence of a financial emergency. It also includes a self-governing provision whereby the City Auditor is required to prepare an annual report on the City’s adherence to these principles. The Financial Integrity Ordinance addresses the following integrity principles: (i) Structurally Balanced Budget, (ii) Estimating Conference Process, (iii) Interfund Borrowing, (iv) Reserve Policies, (v) Multi-year Financial and Capital Plan, (vi) Financial Oversight and Reporting, (vii) Basic Financial Policies, (viii) Evaluation Committees, (ix) Full cost of Service and (x) Promoting Operating Efficiencies. The City has implemented this ordinance.

The City’s internal auditor issued its first report on July 3, 2001 for the period of February 1, 2000 through September 30, 2000 and a second report on July 1, 2002 for the period of October 1, 2000, through September 30, 2001. Although, the City’s internal auditor found some areas which the City needs to improve upon, such as the budgeting of non-recurring revenues, the budgeting of unanticipated expenditures for some departments and special revenue funds, filing for reimbursements on a timely basis and recording of reimbursements due to the City as accounts receivable, overall, the report was satisfactory. The City internal auditors noted in the 2002 report that the non-recurring revenues were not material and that the unanticipated expenditures not included in the budget were funded from available fund balances. The City continues to take steps to improve those areas identified in the reports.

Adoption of Investment Policy

The City adopted a detailed written investment policy on May 10, 2001, that applies to all cash and investments held or controlled by the City and identified as “general operating funds” of the City with the exception of the City’s Pension Funds, Deferred Compensation & Section 401(a) Plans, and such funds related to the issuance of debt where there are other existing policies or indentures in effect for such funds. Additionally, any future revenues, which have statutory investment requirements conflicting with the City’s Investment Policy and funds held by state agencies (e.g. Department of Revenue), are not subject to the provisions of the policy.

F-5 The foremost objective of the investment program is the safety of the principal of those funds within the portfolios. Investment transactions shall seek to keep capital losses at a minimum, whether they are from securities defaults or erosion of market value. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. The portfolios are required to be managed in such a manner that funds are available to meet reasonably anticipated cash flow requirements in an orderly manner. Investment portfolios are required to be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of least importance compared to the safety and liquidity objectives described in the policy. In accordance with the City’s Administrative Policies, the responsibility for providing oversight and direction in regard to the management of the investment program resides with the City’s Finance Director. The Finance Director has established written procedures for the operation of the investment portfolio and a system of internal accounting and administrative controls. Pursuant to the policy, the City may employ an investment advisor to assist in managing some of the City’s portfolios, but has not done so at this time. To the extent possible, an attempt shall be made to match investment securities with known cash needs and anticipated cash flow requirements.

The City’s investment policy may be modified from time to time by the City Commission.

Subject to the exceptions in the City’s investment policy, the City may invest in the following types of securities: (a) The Florida Local Government Surplus Funds Trust Fund, (b) United States Government Securities, (c) United States Government Agencies, (d) Federal Instrumentalities, (e) Interest Bearing Time Deposit or Savings Accounts, (f) Repurchase Agreements, (g) Commercial Paper, (h) Corporate Notes, (i) Bankers’ Acceptances, (j) State and/or Local Government Taxable and/or Tax-Exempt Debt, (k) Registered Investment Companies (Money Market Mutual Funds) and (l) Intergovernmental Investment Pool. Also, the City may invest in investment products that include the use of derivatives as long as the dollar amount invested by the investment product is minuscule to the total dollar amount invested by the investment product.

The City’s Finance Department strives to achieve maximum permissible financial return on available cash resources. Idle cash balances are invested on a daily basis within the constraints imposed by applicable law and City policies. Substantially all of the City’s investments are either insured, registered or physically held in the City’s name in order to safeguard its investments. For purposes of maximizing interest earnings, substantially all of the City’s cash and investments are pooled, except where separate cash and investments accounts are maintained in accordance with applicable legal requirements. The City’s cash equivalents and investments consist of demand deposits with banks, and money market fund investments with original maturities of three months or less and equity in the City’s cash management pool.

As of September 30, 2003, approximately 85.39% of the City’s investment portfolio was invested in United States Treasury Obligation and obligations of agencies of the United States Government. Approximately 1.73% of the City’s investment portfolio was invested in money market funds and 12.86% in commercial paper.

F-6 Non Ad Valorem Revenues

The following tables sets forth the sources and total amounts of non ad valorem revenues that have been available to the City for Fiscal Years Ended September 30, 2001 through September 30, 2003, as well as a schedule of principal and interest payments made from non ad valorem revenues. The information in the table is presented for comparative purposes only. For further information relating to non ad valorem revenues of the City, reference is made to the City’s Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2003 which is a public document and available from the City on its web site.

CITY OF MIAMI, FLORIDA NON AD VALOREM REVENUE FOR THE YEARS ENDING SEPTEMBER 30,

2003 2002 2001

Revenues: Franchise and utility taxes $ 31,556,387 $ 15,775,689 $ 19,081,242

Licenses and permits: Business licenses and permits 6,925,360 6,605,985 5,987,513 Construction permits 14,544,613 14,770,008 14,346,019 21,469,973 21,375,993 20,333,532

Intergovernmental: State and revenue sharing 9,217,247 8,172,375 8,008,077 Half cent sales tax 21,213,998 20,910,283 21,901,606 Fine and Forfeitures 5,049,412 4,051,483 4,818,554 Other 13,640,279 11,369,009 3,778,563 49,120,936

Charges for Services: Engineering services 45,392,136 11,639,867 14,061,255 Public Safety 11,366,612 10,906,517 7,309,338 Recreation 581,244 487,479 209,945 Other 28,842,835 72,545,573 62,753,739 86,182,827 95,579,436 84,334,277

Interest Income 7,280,372 10,102,103 15,909,309

Other 3,688,147 5,371,152 5,506,192

Operating transfers in component unit 51,282,877 47,366,515 39,959,469 transfers in proceeds from State of Florida 2,410,000 Land sale proceeds 51,282,877 47,366,515 42,369,469

$ 250,581,519 $ 240,074,038 $ 226,040,821

F-7 City of Miami, Florida Schedule of Principal and Interest for Special Obligation, Revenue Bonds and Loans For Fiscal Year Ended September 30, 2003

$72,000,000 Special $327,630,000 $3,500,000 Obligation Non- Sunshine State Sunshine State Ad Valorem $27,895,000 $13,170,000 $28,390,000 Governmental Governmental Taxable Special Special Special $65,271,325 Planning Financing $22,000,000 Special Revenue Obligation Obligation Obligation Special Commission Commission Obligation Non-Ad Pension Bonds Refunding Refunding Refunding Fiscal Year Revenue Loan 1998 Secondary Loan Valorem Reverse Series 1995 Series 2002A Series 2002B Series 2002C Grand Ending Refunding Bonds Total Principal 1995 Total Bonds Series 1995 Total Principal Total Total Principal Total Principal Central Loan Grand Total September Total Principal & & Principal & Total Principal & & Principal & & & Principal Grand Total Grand Total Principal & 30th Interest Interest Interest Interest Interest Interest Interest Interest & Interest Principal Interest Interest

2004 $5,900,000 $3,516,935 $ 556,750 $ 664,955 $5,810,646 $1,240,551 $2,109,338 $2,008,106 $ 7,809,464 $13,997,817 $21,807,281 2005 5,900,000 3,401,675 536,000 665,830 5,811,471 1,240,551 2,108,338 2,027,906 7,940,229 13,751,542 21,691,771 2006 5,900,000 3,280,715 518,750 664,935 5,810,590 1,240,551 2,106,788 2,691,656 8,770,771 13,443,214 22,213,985 2007 5,900,000 3,150,155 499,250 661,700 5,807,640 1,240,551 2,108,588 2,694,456 8,988,753 13,073,587 22,062,340 2008 5,895,000 3,014,545 472,500 661,173 5,808,165 1,805,551 1,543,588 2,695,606 $1,708,864 10,936,363 12,668,629 23,604,992 2009 5,896,205 2,867,685 454,250 658,420 5,811,794 3,350,776 2,693,256 9,480,759 12,251,628 21,732,387 2010 5,894,295 2,714,125 428,000 658,240 5,812,210 3,351,226 2,693,963 9,804,629 11,747,430 21,552,059 2011 5,896,668 2,550,665 399,500 5,810,435 3,353,539 2,693,043 9,491,810 11,212,039 20,703,849 2012 5,615,180 2,376,705 403,750 5,810,785 3,349,801 2,692,563 9,812,515 10,436,269 20,248,784 2013 5,620,336 5,810,985 3,349,801 2,693,250 7,681,229 9,793,143 17,474,372

F-8 2014 5,547,336 5,810,335 3,348,951 2,695,450 7,996,160 9,405,912 17,402,072 2015 5,165,000 5,808,135 1,593,239 2,694,050 6,509,407 8,751,017 15,260,424 2016 5,808,510 1,592,439 2,694,300 6,205,000 3,890,249 10,095,249 2017 5,812,300 1,588,689 2,692,875 6,555,000 3,538,864 10,093,864 2018 5,808,240 1,591,889 4,240,000 3,160,129 7,400,129 2019 5,807,980 1,586,476 4,520,000 2,874,456 7,394,456 2020 5,810,080 1,587,564 4,830,000 2,567,644 7,397,644 2021 5,808,280 1,585,444 5,155,000 2,238,724 7,393,724 2022 5,811,140 1,579,750 5,505,000 1,885,890 7,390,890 2023 5,812,040 1,579,750 5,885,000 1,506,790 7,391,790 2024 5,809,540 1,576,500 6,285,000 1,101,040 7,386,040 2025 5,811,840 1,575,000 6,720,000 666,840 7,386,840 2026 5,811,960 5,610,000 201,960 5,811,960

TOTAL $69,130,020 $ 26,873,205 $4,268,760 $4,635,253 $133,635,101 $44,308,589 $9,976,640 $36,360,480 $1,708,864 $166,732,089 $164,164,813 $330,896,900 INDEBTEDNESS OF THE CITY

Pursuant to the City’s Debt Management Policy, the City’s debt issuance is subject to the following constraints: (i) the Net Debt Per Capita and the Net Debt to Taxable Assessed Value percentages, which shall be determined by the finance committee by bench marking the City to current industry standards, and (ii) the maximum maturity shall be the earlier of (a) the estimated useful life of the capital improvements being financed or (b) thirty years or (c) in the event they issued to refinance outstanding debt obligations the final maturity of the debt obligations being refinanced, unless a longer term is recommended the finance committee.

Direct Debt

The City has met certain of its financial needs through debt financing. The table which follows is a schedule of the outstanding debt of the City as of September 30, 2003, including that which is payable from sources other than ad valorem taxes.

Amount Outstanding DESCRIPTION Issued Balance General Obligations: General Obligation Refunding Bonds, Series 1992 $ 70,100,000 $ 32,625,000 Homeland Defense/Neighborhood CIP, Series 2002A 153,186,406 154,741,389 General Obligation Refunding Bonds, Series 2002A 32,510,000 30,095,000 General Obligation Bonds (Other Issues) 39,075,000 2,460,000 General Obligation Refunding Bonds, Series 2003 18,680,000 18,680,000 Total General Obligation Bonds $313,551,406 $238,601,389

Special Obligation and Revenue Bonds: Special Revenue Refunding Bonds, Series 1987 $65,271,325 $46,125,757 Community Entitlement Rev. Bonds, Series 1990 11,500,000 2,615,000 Special Obligation Non-Ad Valorem , Series 1995 22,000,000 3,850,000 Special Obligation Non-Ad Val. Rev. Bonds, Series 1995 72,000,000 65,645,000 Special Revenue Refunding Bonds, Series 2002A 27,895,000 27,895,000 Special Revenue Refunding Bonds, Series 2002B 13,170,000 9,160,000 Special Revenue Refunding Bonds, Series 2002C 28,390,000 27,385,000 Total Special Obligation and Revenue Bonds $240,226,325 $182,675,757

Loans: Sunshine State Gov. Financing Commission Loans Revenue Bond Program $27,630,900 $14,856,900 Sunshine State Gov. Financing Section 108 HUD Loan 5,100,000 4,400,000 Section 108 HUD Loan – Citadel 2,500,000 700,000 Section 108 HUD Loan – Wynwood Foreign Trade Zone, Inc. 5,500,000 4,220,000 Sunshine State Gov. Financing Commission – Secondary Loan 3,500,000 2,345,000 Gran Central Corporation Loan 1,708,864 1,708,864 Total Loans $ 45,939,764 $ 28,230,764 Total Debt $559,717,495 $449,507,910 ______Source: City of Miami.

F-9 Overlapping Debt

The table set forth below summarizes the general obligation debt of the Miami-Dade County and the School Board of Miami-Dade County as of September 30, 2003. While the City believes the amount of debt of the School Board of Miami-Dade County and Miami-Dade County set forth below to be accurate, it should be understood that this amount was derived from source materials which were not complied and are not subject to verification by the City. Accordingly, no assurance can be given as to the absolute accuracy of these amounts.

Miami-Dade County Total net debt net of reserves $242,086,726 Percent applicable to the City – 19%(1) $45,996,478 Miami-Dade County School Board(2) Total net debt net of reserves $1,034,211,151 Percent applicable to the City – 19%(1) 196,500,119 $242,496,597 ______(1) Based upon the percentage of the County tax roll valuation comprised of real and personal property situated in the City of Miami. (2) The amounts provided by the school board are as of fiscal year ended June 30, 2003.

Debt Ratios

Net direct general obligation debt as a percentage of taxable assessed valuation 1.22% Combined net direct and overlapping general obligation debt as a percent of 2.47% taxable assessed valuation Net direct general obligation debt per capita $ 652.61 Combined net direct general and special obligation debt per capita $1,112.53 Combined net direct and overlapping general obligation debt per capita $1,321.62 Combined net direct and overlapping general and special obligation per capita $1,781.54

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F-10 Millage Rates

The following table shows millage rates for the City for fiscal years ending September 30, 1994 through September 30, 2003.

THE CITY OF MIAMI, FLORIDA PROPERTY TAX RATES

Fiscal Year City Operations Debt Service(1) Total 2003 8.8500 1.2180 10.0680 2002 8.9950 1.2180 10.2130 2001 8.9950 1.2800 10.2750 2000 9.5000 1.4000 10.9000 1999 10.0000 1.7900 11.7900 1998 9.5995 1.9200 11.5195 1997 9.5995 2.1060 11.7055 1996 9.5995 2.1060 11.7055 1995 9.5995 2.1060 11.7055 1994 9.5995 2.1060 11.7055 ______(1) Millage for voted debt service on general obligation bonds is excluded from the 10 mill cap set forth in Article VII, Section 9(b) of the Florida Constitution. Source: The City of Miami, Florida FY 2002 and FY 2003 Budgets

Assessed Valuations

The following table shows the assessed valuations for the City for fiscal years ended September 30, 1994 through September 30, 2003.

THE CITY OF MIAMI, FLORIDA ASSESSED VALUE OF TAXABLE PROPERTY

Fiscal Real Personal Homestead Net Assessed Year Property Property Total Exemptions Value 2003 18,849,243,365 1,804,153,107 20,653,396,472 1,225,787,898 19,427,608,574 2002 16,269,856,061 1,878,266,085 18,148,122,146 1,210,235,376 16,937,866,770 2001 13,282,693,560 1,657,551,519 14,940,245,079 1,168,878,720 13,771,366,359 2000 12,655,367,383 1,480,211,283 14,135,578,666 1,022,522,356 13,113,056,310 1999 12,054,384,369 1,334,992,653 13,389,377,022 1,013,367,239 12,376,009,783 1998 11,383,265,849 1,329,476,797 12,712,742,646 1,015,773,092 11,696,969,554 1997 11,039,083,007 1,323,876,600 12,362,959,607 1,013,566,813 11,349,392,794 1996 10,702,353,382 1,301,197,462 12,003,550,844 1,012,060,207 10,991,490,637 1995 10,232,545,197 1,264,806,533 11,497,351,730 1,007,531,594 10,489,820,136 1994 9,991,788,807 1,241,431,753 11,233,220,560 1,006,367,133 10,226,853,427 ______Source: Miami-Dade County Property Appraiser’s Office.

F-11 ADOPTION OF DEBT MANAGEMENT POLICY

The City adopted a Debt Management Policy on July 21, 1998 to provide guidance governing the issuance, management, continuing evaluation of and reporting on all debt obligations issued by the City and to provide for the preparation and implementation necessary to assure compliance and conformity with the policy. It is the responsibility of the City’s finance committee to review and make recommendations regarding the issuance of debt obligations and the management of outstanding debt. The finance committee consists of seven voting members – five members of the local business community which are appointed by the City Commission, the City Manager or his designee and the City’s Finance Director. The finance committee considers all issues related to outstanding and proposed debt obligations, votes on issues affecting or relating to the credit worthiness, security and repayment of such obligations, including but not limited to procurement of services, structure, repayment terms and covenants of the proposed debt obligation, and issues which may affect the security of the bonds and ongoing disclosure to bondholders and interested parties.

In the Debt Management Policy, the following policies concerning the issuance and management of debt were established: (a) the City will not issue debt obligations or use debt proceeds to finance current operations; (b) the City will utilize debt obligations only for acquisition, construction or remodeling of capital improvement projects that cannot be funded from current revenue sources or in such cases wherein it is more equitable to the users of the projects to finance the project over its useful life; and (c) the City will measure the impact of debt service requirements of outstanding and proposed debt obligations on single year, five, ten and twenty year periods. This analysis will consider debt service maturities and payment patterns as well as the City’s commitment to a pay as you go budgetary capital allocation.

LITIGATION

There is no pending or, to the knowledge of the City, any threatened litigation against the City of any nature whatsoever which in any way questions or affects the validity of the Interlocal Agreement or the City’s obligations thereunder, or any proceedings or transactions relating to the execution or delivery of the Interlocal Agreement. Neither the creation, organization or existence, nor the title of the present members of the City Commission, or other officers of the City is being contested.

The City experiences claims, litigation, and various legal proceedings which individually are not expected to have a material adverse effect on the operations or financial condition of the City, but may, in the aggregate, have a material impact thereon. In the opinion of the City Attorney, however, except as described below, the City will either successfully defend such actions or otherwise resolve such matters without any material adverse consequences to the financial condition of the City.

Parking Surcharge Ordinance Litigation. On July 13, 1999, the City Commission approved Ordinance No. 11813 (the “Parking Surcharge Ordinance”) pursuant to Section 218.503(5), Florida Statutes, which institutes a 20% surcharge for parking transactions at parking

F-12 facilities within the limits of the City. The effective date for the implementing of the surcharge was September 1, 1999. The surcharge is applicable to all parking facilities, public or private, where there is a charge, fee or exchange for parking. It also applies to parking associated with valet service, events and parking validations. Various parties sued the City challenging the Parking Surcharge Ordinance. The lawsuits involve a class action claim wherein invalidation of the City’s Parking Surcharge Ordinance is sought on the grounds that the enabling statute is a special, rather than general, law. The statute was upheld by the trial court, but invalidated by the Third District Court of Appeals in July 2001. The City appealed to the Supreme Court of Florida, oral argument was held in February 2002 and the Supreme Court ruled on July 11, 2002, that the statute was unconstitutional and the case was remanded to the Third District Court of Appeal for further proceedings. The statute was amended in November, 2001 and the legislature ratified the statute and all acts and proceedings taken in connection with the surcharge imposed. The City Commission approved a settlement for all class members on October 11, 2002, that resolved any challenges to both the original and amended Statute. The settlement requires the City to contribute no more than $8 million to a fund of $14 million, with the remaining money to be provided from parking surcharges retained by Miami-Dade County. However, the settlement has not yet been approved by the courts and there are motions to intervene pending that were filed by certain operators of parking facilities. Such motions to intervene have been denied by the trial court and are currently on appeal. If the court does not approve the settlement or if the intervenors are successful, the City could be required to return all amounts collected prior to the amendment which would be approximately $25 million, or could be required to return only the sums collected between July, 2001 and the date of the amendment, approximately $5 million. The City has reserved approximately $14 million for the payment of any refunds to date, a portion from its own funds and expects to receive the remaining funds from Miami-Dade County.

Fire Rescue Litigation. A class action suit was filed to challenge the City’s Fire Rescue Assessment (the “Assessment”). The plaintiffs contend that the Assessment is an unconstitutional tax on real property and, further, that it is not properly apportioned. The City’s motion for summary judgment is pending. However, a challenge to the City of North Lauderdale, Florida’s fire rescue assessment resulted in the Fourth District Court of Appeal concluding that the same was unconstitutional. That decision was appealed to the Supreme Court of Florida and the court held the assessment unconstitutional to the extent it included a charge for emergency medical services. Since the date of the decision of the Fourth District Court of Appeal, the City amended the Assessment to comply with the judgment of the Fourth District Court of Appeal in the North Lauderdale case. Due to the outcome in the City of North Lauderdale case, this case now concerns whether a refund will be required. The City could be required to return as much as $19 million. However, only a portion of the assessment collected was for emergency medical services, therefore it is likely that if the City is required to refund the assessment it could be for only that portion relating to emergency medical services.

F-13 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX G

CERTAIN INFORMATION ABOUT THE COUNTY [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX G

CERTAIN INFORMATION REGARDING MIAMI-DADE COUNTY, FLORIDA

HISTORY

Miami-Dade County, Florida (the “County”) is the largest county in the southeastern United States in terms of land area and population. The County currently covers 2,209 square miles located in the southeastern corner of the State of Florida (the “State”), and includes, among other municipalities, the cities of Miami, Miami Beach, Coral Gables and Hialeah. In 2003, the population of the County was estimated to have been 2,346,000.

The County was created on January 18, 1836 under the Territorial Act of the United States. It included the land area now contained in Palm Beach County and Broward County, together with the land area of the present County. In 1909, Palm Beach County was formed from the northern portion of what was then the County, and in 1915, Palm Beach County and the County contributed nearly equal portions of land to create what is now Broward County. There have been no significant boundary changes to the County since 1915.

COUNTY GOVERNMENT

The State Legislature in 1955 approved and submitted to a general election a constitutional amendment designed to give a new form of government to the County. The amendment was approved in a statewide general election in November, 1956. A Dade County Charter Board was constituted and, in April, 1957, it completed a draft of a charter for the County. The proposed charter was adopted in a County-wide election in May, 1957 and became effective on July 20, 1957 (the “Charter”). The electors of the County are granted power to revise and amend the Charter from time to time by County-wide vote. The most recent amendment was in March 2004. The County has home-rule powers, subject only to the limitations of the Constitution and general laws of the State. The County has, in effect, a county government with certain powers effective throughout the entire County, including 34 municipalities located within the County, and a municipal government for the unincorporated area of the County. The County has not displaced or replaced the cities, but supplements them. The County can take over particular activities of a city’s operations if the services fall below minimum standards set by the Board of County Commissioners of Miami-Dade County (the “Board”), or with the consent of the governing body of a particular city.

The County has a commission-executive mayor form of government. The Board, which consists of thirteen members elected from single member districts, is the legislative and governing body of the County and is responsible for the formation of all policies. The executive mayor, who is not a member of the Board, has veto authority over legislative acts, and has the power to appoint the County Manager. The executive mayor, first elected in October of 1996, is elected every four years in a County-wide election.

The County has assumed responsibility on a County-wide basis for an increasing number of functions and services, including the following:

G-1 (a) County-wide police services, complementing the municipal police services within the municipalities and providing full-service police protection for the unincorporated areas of the County, with direct access to the National Crime Information Center in Washington, D.C. and the Florida Crime Information Center;

(b) Uniform system of fire protection, complementing the municipal fire protection services within five municipalities and providing full-service fire protection for the Miami-Dade Fire and Rescue Service District, which includes the unincorporated area of the County and the 29 municipalities which have consolidated their fire departments within the Miami-Dade Fire and Rescue Department. The Miami-Dade Fire and Rescue Department also provides emergency medical services to respond to and provide on-site treatment to the seriously sick and injured;

(c) Consolidated two-tier court system, consisting of the higher Circuit Court that handles domestic relations, felonies, probate, civil cases where the amount in dispute is $15,000 or more, juvenile cases, and appeals from the lower, County Court. The County Court handles violations of municipal ordinances, misdemeanors and civil cases where the amount in dispute is less than $15,000;

(d) County-wide water and sewer system, is operated by the Water and Sewer Department;

(e) Jackson Memorial Hospital which is operated, maintained and governed by an independent governing body called the Public Health Trust (the “Trust”). The Board appoints members of the Board of Trustees for the Trust and also approves the budget of the Trust. The County continues to subsidize indigent patients on a contractual basis with the Trust;

(f) Unified transit system, consisting of various surface public transportation systems. In May, 1985, the 20.5 miles Phase I of the County’s rapid rail transit system was completed and placed into operation. An extension was opened on May 30, 2003, extending the service along the north section another 1.4 miles from Okeechobee to the Palmetto station. In April, 1986, the light rail component of the rapid rail transit system commenced operation, and two extensions have been constructed extending the service 1.4 miles south to the Brickell Avenue area and 1.1 miles north to the area known as Omni. These extensions were placed in service on May 26, 1994;

(g) Combined public library system, established by the County and 20 municipalities and consisting of the main library and 34 branches. Live programs are offered in education, information and entertainment throughout the system. Library members are encouraged to fulfill their “at home” needs with such material as books, articles, videotapes, audiotapes, and CD’s;

(h) Property appraisal and tax collection, performed by the County Tax Collector, with all collected taxes distributed directly to the respective governmental

G-2 entity, according to its respective tax levy and the amount of such taxes collected. The municipalities, Board of Public Instruction and several State agencies use data furnished to them by the County for the purpose of budget preparation and for their respective governmental operations;

(i) Minimum standards, enforceable throughout the County, in areas such as environmental resources management, building and zoning, consumer protection, health, housing and welfare;

(j) Garbage and trash collection and disposal services, consisting of garbage and trash collection services to approximately 300,000 households during 2003 within the unincorporated area and disposal services to public and private haulers County-wide;

(k) The Dante B. Fascell Port of Miami (the “Port”) is owned and operated by the County through the Seaport Department. The Port is the world’s largest cruise port in terms of cruise passengers, handling 3,960,614 passengers in Fiscal Year 2003. As of September 2003, the Port had the largest container cargo port in the State and, is within the top ten in the United States in total number of containers held;

(l) The County owns and operates, through the Miami-Dade County Aviation Department, the following facilities: (i) the Miami International Airport (the “Airport”), the principal commercial airport serving South Florida; (ii) the Opa-locka Airport, a 1,810-acre facility, (iii) the Opa-locka West Airport, a 420-acre facility, (iv) the Kendall- Tamiami Executive Airport, a 1,380-acre facility, (iv) the Homestead Airport, a 960-acre facility and (v) the Training and Transition Airport, a facility of approximately 24,300 acres located in Collier and Miami-Dade Counties; and

(m) Several miscellaneous services, including mosquito and animal control.

COUNTY INVESTMENT POLICY

Pursuant to Florida Statutes, Section 218.45, which requires a written investment policy by the Board, the County adopted an investment policy (the “Investment Policy”) which applies to all funds held by or for the benefit of the Board in excess of those required to meet short-term expenses, except for proceeds of bond issues which are deposited in escrow and debt service funds governed by their respective bond ordinances.

The primary objectives of the Investment Policy, listed in order of importance are:

(i) the safety of principal;

(ii) the liquidity of funds; and

(iii) the maximization of investment income.

The Investment Policy limits the securities eligible for inclusion in the County’s portfolio to a maximum maturity of three (3) years. The Investment Policy allows investment in

G-3 repurchase agreements with a maximum length to maturity of 14 days from the date of purchase; the collateral shall be “marked to market” as needed.

To enhance safety, the Investment Policy requires the diversification of the portfolio to reduce the risk of loss resulting from over-concentration of assets in a specific maturity, issuer or class of security. The Investment Policy also requires the monthly performance reports to be presented to the County Clerk and to the County’s Finance Director, quarterly performance reports to be submitted to the Investment Advisory Committee and an annual report to be presented to the Board within 90 days of the end of the Fiscal Year.

The Investment Policy may be modified by the Board as it deems appropriate to meet the needs of the County.

LITIGATION

There is no litigation pending or, to the knowledge of the County, threatened, seeking to restrain or enjoin the execution or delivery of the Interlocal Agreement or questioning or affecting the validity of any proceedings and authority under which the County entered into the Interlocal Agreement. Neither the creation, organization or existence, nor the title of the present members or other officers of the Board to their respective offices is being contested.

NON-AD VALOREM REVENUES

The following table sets forth the sources and total amounts of non ad valorem revenues that have been available to the County for Fiscal Years Ended September 30, 1999 through September 30, 2003. The information in the table is presented for comparative purposes only. For further information relating to non ad valorem revenues of the County, reference is made to the County Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2003 which is a public document and available from the County on its web site.

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G-4 Miami-Dade County, Florida Non Ad Valorem Revenues (*)(**) (Fiscal Years Ended September 30, 1999 through 2003) (In Thousands) Non Ad Valorem Revenues: 1999 2000 2001 2002 2003 Taxes: Utility Taxes $103,094 $106,415 $112,322 $ 74,517 $ 71,849 Communication Taxes(1) 62,277 51,489 Local Option Gas Tax 50,171 51,028 52,401 53,694 55,282 Franchise Taxes(2) 29,990 27,759 27,621 37,691 33,397 Total $183,255 $185,202 $192,344 $228,179 $212,017 Licenses and Permits Building and Zoning 41,291 42,797 49,400 52,421 53,943 Occupational(3) 17,412 17,047 17,277 19,996 9,518 Animal licenses(3) 3,718 4,679 5,087 0 0 Other Licenses(3) 0 0 0 14,785 14,785 Total $ 62,421 $ 64,523 $ 71,764 $ 76,671 $ 78,246 Intergovernmental Revenues State Sales Tax 84,561 90,762 99,509 101,523 111,386 State Revenue Sharing 73,733 71,183 65,454 69,769 66,252 Gasoline and Motor Fuel 11,241 12,052 12,132 12,310 12,707 Cigarette Taxes 1,225 990 0 0 0 Alcoholic Beverages License 882 933 958 970 920 State Crime Lab 952 997 0 0 0 Other 997 1,025 1,070 1,139 972 Total $173,591 $177,942 $179,123 $185,711 $ 192,237 Charges for Services Clerk of Circuit & County Court 19,359 18,885 19,294 19,633 19,821 Tax Collector Fees 18,614 18,756 20,460 20,944 20,840 Merchandise Sales & recreational fees 17,246 18,981 20,546 21,326 23,905 Sheriff and Police Services 2,748 2,858 2,894 8,185 8,568 Tolls - Venetian Causeway 34 687 863 0 0 Other(4) 48,552 46,548 49,390 84,434 95,197 Total $106,553 $106,715 $113,447 $154,522 $168,331 Fines and Forfeitures Clerk of Circuit and County Courts 26,450 29,261 28,990 29,582 33,401 Interest Income 22,139 25,599 29,103 11,914 6,949 Other Administrative 31,689 32,120 32,557 34,833 24,768 Rentals 3,172 2,945 2,783 2,860 3,122 Reimbursements and Other 13,714 13,004 15,576 22,580 15,502 Total $ 48,575 $ 48,069 $ 50,916 $ 60,273 $ 43,392 Total Revenues $622,984 $637,311 $665,687 $746,852 $734,573

See the following table for certain adjustments to the total non ad valorem revenues. Non ad valorem revenues are net of debt service requirements on all outstanding special obligation bonds to which a portion of such revenues are specifically pledged (i.e. sales tax, utility tax).

Footnotes: (1) Starting in Fiscal Year 2002, Communication Taxes previously recorded under Utility Taxes are required to be reported separately. (2) Increase in revenues in Fiscal Year 2002 reflective of additional surcharge imposed on fuel. (3) These amounts were reclassified in Fiscal Year 2002 pursuant to GASB 34. (4) Includes Stormwater Utility Revenues previously recorded under “Special Revenues Fund” changed in accordance with GASB 34. Source: Miami-Dade County Finance Department.

G-5 The following table shows Legally Available Non Ad Valorem Revenues of the County for the Fiscal Years Ended September 30, 1999 through September 30, 2003 after taking into account the aggregate amounts of debt service pledged against such Legally Available Non Ad Valorem Revenues and after certain adjustments for the indicated Fiscal Years. The information in the table is presented for comparative purposes only and should be read in conjunction with the related notes, which are an integral part of the table.

It should be noted that on April 27, 2004, the County issued its $50,000,000 Capital Asset Acquisition Floating Rate (MUNI-CPI) Special Obligation Bonds, Series 2004A, which are secured by the County’s covenant to budget and appropriate from Legally Available Non Ad Valorem Revenues.

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G-6 Miami-Dade County, Florida Historical Collections and Uses of Legally Available Non Ad Valorem Revenues (For Fiscal Years Ended September 30, 1999 through 2003) (In Thousands) Original Fiscal Fiscal Fiscal Fiscal Fiscal Principal Balance Year Year Year Year Year Amount 5/31/2004 1999 2000 2001 2002 2003 Total Unadjusted Non Ad Valorem Revenues(1) Plus: $622,984 $637,311 $665,687 $746,852 $734,573 Appropriable Fund Balance 125,153 121,224 95,103 82,259 63,730 Operating Transfers In Adjustments(2) 96,118 80,974 77,897 54,347 47,422 Total Adjusted Legally Available Non Ad Valorem Revenues $844,255 $839,509 $838,687 $883,458 $845,725 Less: Debt Service on Other “Covenant to Budget and Appropriate” Obligations: Bonds: Equipment Acquisition Floating/Fixed Rate Special Obligation Bonds, Series 1987A(3) $17,400 $ - $851 $883 $ - - - Capital Asset Acquisition Floating/Fixed Rate Special Obligation Bonds, Series 1988A(3) 26,300 - 1,673 401 - - - Capital Asset Acquisition Floating/Fixed Rate Special Obligation Bonds, Series 1990(3) 64,300 2,200 9,627 5,739 4,279 547 630 Miami-Dade Industrial Development Authority Revenue Bonds (BAC Funding Corporation Project) Series 2000A(9) 21,570 21,115 568 1,115 1,193 Miami-Dade Industrial Development Authority Revenue Bonds (BAC Funding Corporation Project) Taxable Series 2000B(9) 205 7 14 212 Capital Asset Acquisition Fixed Rate Special Obligation Bonds, Series 2002A (3) (6) 119,845 119,845 - - - - 2,826 Capital Asset Acquisition Auction Rate Special Obligation Bonds, Series 2002B (3) (6) 11,275 11,275 - - - - 133 Capital Asset Acquisition Floating Rate (MUNI CPI) Special Obligation Bonds, Series 2004A(3) (8) ------Loans: Seaport – Sunshine Loan – 1986(4) 50,000 44,150 1,482 1,966 1,519 831 2,036 Parks – Sunshine Loan – 1986 2,000 1,666 - 19 63 140 145 Seaport – Sunshine Loan – 1995(4) 41,390 41,390 1,428 1,698 1,587 792 587 Seaport – Sunshine Loan – 1998(4) 20,605 18,225 635 1,260 1,204 371 748 Seaport – Sunshine Loan – 1999(4) 36,000 32,545 - 1,385 2,151 660 1,321 Seaport – Sunshine Loan – 2001(4) 150,000 147,785 - - - 2,873 3,184 Various Projects – Sunshine Loan – 2001(5) 49,000 40,845 - - 87 937 4,635 Subtotal Other Obligations $ 59,890 $481,041 $ 15,696 $ 13,351 $ 11,455 $ 8,280 $ 17,650 Net Available Non-Ad Valorem Revenues (7) $828,559 $826,158 $827,232 $ 875,178 $828,075

Footnotes: (1) Non ad-valorem revenues are net of debt service requirements on all outstanding special obligation bonds to which a portion of such revenues are specifically pledged (i.e. sales tax, utility tax). (2) Includes appropriable fund balance (balance in General Fund reduced by any reserve for encumbrances, subsequent years’ budget and/or specified non-liquid assets therein) and Operating Transfers-In. See “Covenant to Budget and Appropriate” above. (3) These Bonds are serviced by the benefiting departments. (4) The Loans are being serviced by revenues of the Seaport. (5) Of the total loan amount, $34 million is being serviced by the County’s Transit Agency with Federal Grants. In Fiscal Year 2003, the total amount paid in debt service was $4.635 million, of which the Transit Agency paid $3.216 million. (6) These Bonds were issued on September 19, 2002. (7) These revenues are also used to pay operating expenses during the Fiscal Year. (8) Issued on April 27, 2004. (9) Contingent liability of the County securing lease payments by the County’s General Services Administration Department. Source: Miami-Dade County Finance Department.

G-7 The presentation of the information in the tables above should not be construed as a representation that the County will continue to have available to it Legally Available Non Ad Valorem Revenues in the historical amounts shown in the tables above.

ECONOMY

The County’s economy has been transitioning from mixed service and industrial in the 1970’s to one dominated by services in the late 1990’s. The shift to services is led by expansion within international trade, the tourism industry, and health services. Wholesale trade and retail trade have, and are projected to, become stronger economic forces in the local economy. This reflects the County’s position as a wholesale center in Southeast Florida, which is serving a large international market. The tourism industry remains one of the largest sectors in the local economy.

In an effort to further strengthen and diversify the County’s economic base, the County in 1984 commissioned a private consulting firm to identify goals and objectives for various public and private entities. The Beacon Council is a public private partnership established to promote these goals and objectives.

EMPLOYMENT

Trends and Forecasts, Population in Incorporated and Unincorporated Areas 1960 - 2010 Population in Population in Percentage Incorporated Unincorporated Growth in Year Areas Areas Total Population Trends: 1960 582,713 352,334 935,047 N/A 1970 730,425 537,367 1,267,792 36.5% 1980 829,881 795,900 1,625,781 28.2 1990 909,371 1,027,723 1,937,094 19.1 1995 973,912 1,110,293 2,084,205 7.6 2000 1,049,074 1,204,288 2,253,362 8.1 2001 1,078,455 1,204,864 2,283,319 1.3 2002 1,080,909 1,222,138 2,303,047 1.3 2003 1,100,442 1,242,297 2,342,739 1.3 Forecast: 2005 1,276,571 1,125,534 2,402,105 2.5 2010 1,331,318 1,219,966 2,551,284 6.2 ______Source: 1960 to 1990, and 2000 figures from U.S. Census Bureau, decennial census reports. Figures for 1995 and post - 2000 estimates by Miami-Dade County, Department of Planning and Zoning, December 2003.

G-8 UNEMPLOYMENT RATES 1999-2003 Area 1999 2000 2001 2002 2003 USA 4.2% 4.0% 4.8% 5.7% 6.0% * Florida 3.9 3.6 4.8 5.4 5.3 * Miami-Dade County 5.8 5.3 6.9 7.5 7.5 *

*Annual Avg. through September, 2003 ______Source: Florida Agency for Workplace Innovation, Office of Workforce Information Services, Labor Market Statistics and Miami-Dade County, Department of Planning and Zoning, Research Section.

PER CAPITA INCOME 1996 - 2001 Year USA Southeastern Florida Miami-Dade 1996 $24,651 $22,477 $24,616 $22,270 1997 25,874 23,517 25,721 23,020 1998 27,321 24,783 26,931 23,972 1999 28,546 25,743 27,781 24,733 2000 29,469 26,194 27,764 25,320 2001 30,413 27,169 29,048 26,594 ______Source: U.S. Department of Commerce, Economic and Statistic Administration Bureau of Economic Analysis/Regional Economic Information System. Miami-Dade County Department of Planning and Zoning, Research Section.

LITIGATION

There is no litigation pending or, to the knowledge of the County, threatened, seeking to restrain or enjoin the issuance or delivery of the Series 2004A Bonds or questioning or affecting the validity of the Interlocal Agreement or the County’s obligations thereunder or the proceedings and authority under which they are to be issued. Neither the creation, organization or existence, nor the title of the present members or other officers of the Board to their respective offices is being contested.

G-9 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX H

PROPOSED FORM OF BOND OPINION [THIS PAGE INTENTIONALLY LEFT BLANK] [FORM OF APPROVING OPINION OF BOND COUNSEL]

On the date of delivery of the Series 2004A Bonds, Greenberg Traurig, P.A., Bond Counsel, expects to deliver its approving opinion in substantially the following form:

July 28, 2004

Board of Supervisors Midtown Miami Community Development District Miami-Dade County, Florida

Re: $73,580,000 Midtown Miami Community Development District (Miami-Dade County, Florida) Special Assessment and Revenue Bonds, Series 2004A

Ladies and Gentlemen:

We have acted as Bond Counsel in connection with the issuance by the Midtown Miami Community Development District (the “Issuer”) of the above captioned bonds issued and delivered on this date (the “Series 2004A Bonds”) pursuant to the constitution and laws of the State of Florida, particularly, the Uniform Community Development District Act of 1980, Chapter 190, Florida Statutes, as amended, and other applicable provisions of law (collectively, the “Act”) and Resolution Nos. 2004-13 and 2004-24 duly adopted by the Board of Supervisors of the Issuer on January 7, 2004 and June 22, 2004, respectively (collectively, the “Bond Resolutions”). The Series 2004A Bonds are being further issued and secured by a Master Trust Indenture dated as of July 1, 2004, and supplemented by a First Supplemental Trust Indenture, dated as of July 1, 2004 (collectively, the “Indenture”), by and between the Issuer and Wachovia Bank, National Association (the “Trustee”). Capitalized terms used herein without definitions have the meanings ascribed thereto in the Indenture.

The Series 2004A Bonds are being issued for the purpose of providing funds for (i) the payment of a portion of the costs of the Series 2004A Project, (ii) the payment of capitalized interest on the Series 2004A Bonds, (iii) the funding of the Series 2004A Debt Service Reserve Account, and (iv) payment of the costs of issuance of the Series 2004A Bonds. The Series 2004A Bonds are issuable initially as fully registered Bonds in minimum denominations of $100,000 and integral multiples of $5,000 in excess thereof, and thereafter in denominations of $5,000 and integral multiples thereof.

In order to secure the payment of the Series 2004A Bonds, and subject to the terms of the Indenture, the Issuer has pledged to the holders of the Series 2004A Bonds, and granted a lien to the holders of the Series 2004A Bonds on the Pledged Revenues.

We have examined the Act, the Bond Resolutions, the Indenture and such certified copies of the proceedings of the Issuer and such other documents and opinions as we have deemed necessary to render this opinion. As to the questions of fact material to our opinion, we have

H-1 Board of Supervisors Midtown Miami Community Development District July 28, 2004 Page 2 ______

relied upon representations of the Issuer furnished to us, without undertaking to verify such representations by independent investigation.

Based on the foregoing, we are of the opinion that:

1. The Issuer has been duly created and is validly existing as a local unit of special- purpose government of the State of Florida created in accordance with the Act, with the power to execute the Indenture, to perform its obligations thereunder and to issue the Series 2004A Bonds.

2. The Indenture has been duly executed by the Issuer. The Indenture creates a valid pledge of the Pledged Revenues and constitutes a valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms.

3. The issuance and sale of the Series 2004A Bonds have been duly authorized by the Issuer. The Series 2004A Bonds have been duly executed by the Issuer and, assuming the due authentication thereof, the Series 2004A Bonds constitute valid and binding limited obligations of the Issuer, payable in accordance with, and as limited by, the terms of the Indenture.

4. The Internal Revenue Code of 1986, as amended (the “Code”) includes requirements which the Issuer must continue to meet after the issuance of the Series 2004A Bonds in order that interest on the Series 2004A Bonds not be included in gross income for federal income tax purposes. The failure of the Issuer to meet these requirements may cause interest on the Series 2004A Bonds to be included in gross income for federal income tax purposes retroactive to their date of issuance. The Issuer has covenanted in the Indenture to take the actions required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Series 2004A Bonds. The Issuer has full legal power and authority to comply with such covenants.

Under existing statutes, regulations, rulings and court decisions, subject to the assumption stated in the following paragraph, interest on the Series 2004A Bonds is excludable from the gross income of the owners thereof for federal income tax purposes. Furthermore, interest on the Series 2004A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2004A Bonds is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on certain corporations. We express no opinion regarding other federal tax consequences resulting from the ownership, receipt or accrual of interest on, or disposition of, the Series 2004A Bonds.

In rendering the opinion expressed above, we have assumed continuing compliance with the tax covenants referred to above that must be met after the issuance of the Series 2004A

H-2 Board of Supervisors Midtown Miami Community Development District July 28, 2004 Page 3 ______

Bonds in order that interest on the Series 2004A Bonds not be included in gross income for federal income tax purposes.

5. The Series 2004A Bonds and the interest thereon are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined therein.

In rendering the foregoing opinions we have assumed the accuracy and truthfulness of all public records and of all certifications, documents and other proceedings examined by us that have been executed or certified by public officials acting within the scope of their official capacities and have not verified the accuracy or truthfulness thereof. We have also assumed the genuineness of the signatures appearing upon such public records, certifications, documents and proceedings.

The opinions set forth in numbered paragraphs 2 and 3 above are subject to state and federal laws relating to bankruptcy, insolvency, reorganization, moratorium and similar laws, and to equitable principles, affecting the enforcement of creditors’ rights generally, and to the exercise of judicial discretion in appropriate cases.

We wish to call to your attention that the Series 2004A Bonds are limited obligations of the Issuer payable solely out of the Pledged Revenues as provided in the Indenture, and neither the full faith and credit nor the taxing power of the Issuer, the City of Miami, Florida, Miami- Dade County, Florida, the State of Florida or any political subdivision thereof is pledged as security for the payment of the Series 2004A Bonds. The Series 2004A Bonds do not constitute an indebtedness of the Issuer within the meaning of any constitutional or statutory provision or limitation.

We have not been engaged nor have we undertaken to review or verify and therefore express no opinion as to the accuracy, adequacy, fairness or completeness of any offering memorandum or other offering materials relating to the Series 2004A Bonds, except as may be otherwise set forth in our supplemental opinion delivered to the initial purchaser of the Series 2004A Bonds. In addition, we have not passed upon and therefore express no opinion as to the compliance by any party involved in this financing, or the necessity of such parties complying, with any federal or state registration requirements or security statutes, regulations or rulings with respect to the offer and sale of the Series 2004A Bonds.

Respectfully submitted,

GREENBERG TRAURIG, P.A.

H-3 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX I

FORM OF CONTINUING DISCLOSURE AGREEMENTS [THIS PAGE INTENTIONALLY LEFT BLANK] Issuer “Certification” means a written certification of compliance signed by the applicable Disclosure Representative stating that the Annual Report, Audited Financial Statements, CONTINUING DISCLOSURE AGREEMENT Voluntary Report or Notice Event notice, as the case may be, delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or Midtown Miami Community Development District Notice Event notice, as the case may be, required to be submitted to the Repositories under this (Miami-Dade County, Florida) Disclosure Agreement. A Certification shall accompany each such document submitted to the Special Assessment and Revenue Bonds, Series 2004A Disclosure Dissemination Agent and include the full name of the Bonds and the 9-digit CUSIP and numbers for all Bonds to which the document applies. Special Assessment Bonds, Series 2004B “City” means the City of Miami, Florida. This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and delivered as of July 28, 2004 by Midtown Miami Community Development District (the “City Undertaking” means the Continuing Disclosure Agreement entered into by the City “Issuer”) and Digital Assurance Certification, L.L.C. (the “Disclosure Dissemination Agent” or with respect to the Series 2004A Bonds. “DAC”) in connection with the issuance by the Issuer of its $73,580,000 aggregate principal amount of Special Assessment and Revenue Bonds, Series 2004A (the “Series 2004A Bonds”) “County” means Miami-Dade County, Florida. and $30,020,000 aggregate principal amount of Special Assessment Bonds, Series 2004B (the “Series 2004B Bonds”) (collectively, the “Bonds”). The Bonds are being issued pursuant to a “County Undertaking” means the Continuing Disclosure Agreement entered into by the Master Trust Indenture dated as of July 1, 2004, as supplemented by a First Supplemental Trust County with respect to the Series 2004A Bonds. Indenture dated as of July 1, 2004 (collectively, the “Indenture”) each between the Issuer and Wachovia Bank, National Association, as Trustee. “Developers” means, collectively, Midtown Partners, LLC and DDR Miami Avenue, L.L.C. This Disclosure Agreement is being executed and delivered in order to comply with the requirements of Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934 (the “Developers Undertaking” means the Continuing Disclosure Agreements entered into by “Rule”), and is for the benefit of the holders and Beneficial owners (as hereinafter defined) of the the Developers, respectively, with respect to the Bonds. Bonds. “Disclosure Representative” means, as to the Issuer, the Issuer's District Manager or its

I-1 SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure designee, or such other person as the Issuer shall designate in writing to the Disclosure Agreement shall have the meaning assigned in the rule or, to the extent not in conflict with the Dissemination Agent from time to time as the person responsible for providing Information to rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the the Disclosure Dissemination Agent. following meanings: “Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C., acting “Annual Report” means an Annual Report described in and consistent with Section 3 of in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure this Disclosure Agreement. Dissemination Agent designated in writing by the Issuer and the Developers pursuant to Section 9 hereof. “Annual Filing Date” means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the Repositories. “Holder” means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds “Annual Financial Information” means annual financial information as such term is used through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement. for federal income tax purposes.

“Audited Financial Statements” means the financial statements (if any) of the Issuer for “Information” means the Annual Financial Information, the Audited Financial Statements the prior fiscal year, certified by an independent auditor as prepared in accordance with generally (if any), the Notice Event notices, and the Voluntary Reports. accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement. “Notice Event” means an event listed in Sections 4(a) of this Disclosure Agreement.

“Bonds” means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP “MSRB” means the Municipal Securities Rulemaking Board established pursuant to numbers relating thereto. Section 15B(b)(1) of the Securities Exchange Act of 1934. “National Repository” means any Nationally Recognized Municipal Securities “Voluntary Report” means the information provided to the Disclosure Dissemination Information Repository for purposes of the Rule. The list of National Repositories maintained by Agent by the Issuer pursuant to Section 8. the United States Securities and Exchange Commission shall be conclusive for purposes of determining National Repositories. Currently, the following are National Repositories: SECTION 2. Provision of Annual Reports.

1. DPC Data Inc. (a) The Issuer shall provide, annually, an electronic copy of the Annual Report and One Executive Drive Certification to the Disclosure Dissemination Agent, not later than 30 days before the Annual Fort Lee, New Jersey 07024 Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the (201) 346-0701 (phone) Certification, the Disclosure Dissemination Agent shall provide an Annual Report to each (201) 947-0107 (fax) National Repository and the State Depository (if any) not later than 15 days after receipt of the Email: [email protected] Annual Report from the Issuer. The Annual Filing Date is June 30, 2005, and each anniversary thereof. The Annual Report may be submitted as a single document or as separate documents 2. Interactive Data comprising a package, and may cross-reference other information as provided in Section 3 of this Attn: Repository Disclosure Agreement. 100 Williams Street New York, New York 10038 (b) If on the fifteenth (15th) day before the Annual Filing Date, the Disclosure (212) 771-6999 (phone) Dissemination Agent has not received a copy of the Annual Report and Certification or the (212) 771-7390 (fax or secondary market information) respective information required under the City Undertaking, the County Undertaking or the (212) 771-7391 (fax for primary market information) Developers Undertaking, the Disclosure Dissemination Agent shall contact the Disclosure Email: [email protected] Representative by telephone and in writing (which may be by e-mail). Upon such reminder (if it relates to the Issuer’s Obligations hereunder), the Disclosure Representative shall either (i) 3. Bloomberg Municipal Repositories provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and 100 Business Park Drive the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) Skillman, New Jersey 08558 instruct the Disclosure Dissemination Agent in writing that the Issuer will not be able to file the (609) 279-3225 (phone) Annual Report within the time required under this Disclosure Agreement, state the date by which (609) 279-5962 (fax) the Annual Report for such year will be provided and instruct the Disclosure Dissemination I-2 Email: [email protected] Agent that a Notice Event as described in Section 4(a)(xii) has occurred and to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in 4. Standard & Poor’s J.J. Kenny Repository substantially the form attached as Exhibit B. 55 Water Street 45th Floor (c) If the Disclosure Dissemination Agent has not received an Annual Report and New York, New York 10041 Certification by 12:00 noon on the first business day following the Annual Filing Date for the (212) 438-4595 (phone) Annual Report, a Notice Event described in Section 4(a)(xii) shall have occurred and the Issuer (212) 438-3975 (fax) irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to each Email: [email protected] National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. “Official Statement” means that Limited Offering Memoranda dated July 16, 2004 prepared in connection with the issuance of the Bonds. (d) If Audited Financial Statements of the Issuer are prepared but not available prior to the Annual Filing Date, the Issuer shall, when the Audited Financial Statements are available, “Repository” means the MSRB, each National Repository and the State Depository (if provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, any). accompanied by a Certificate, for filing with each National Repository and the State Depository (if any). “State Depository” means any public or private depository or entity designated by the State of Florida as a state information depository (if any) for the purpose of the Rule. The list of (e) The Disclosure Dissemination Agent shall: state information depositories maintained by the United States Securities and Exchange Commission shall be conclusive as to the existence of a State Depository. (i) determine the name and address of each Repository each year prior to the Annual Filing Date; (ii) upon receipt, promptly file each Annual Report received under Section 9. with respect to the 2004A Bonds, the amount of Interlocal Agreement 2(a) or under the City Undertaking, the County Undertaking and the Developers Undertaking, Revenues received by the Issuer. with each National Repository, and the State Depository, (if any); (b) Audited Financial Statements prepared in accordance with generally accepted (iii) upon receipt, promptly file each Audited Financial Statement received accounting principals as applied to governmental entities (“GAAP”), as the same may be under Section 2(d) or under the City Undertaking or the County Undertaking with each National modified from time to time, as described in the Official Statement will be included in the Annual Repository, and the State Depository (if any); Report. However, if Audited Financial Statements are not available by the Annual Filing Date, unaudited financial statements, prepared in accordance with “GAAP” as the same may be (iv) upon receipt of notice of a Notice Event, promptly file the text of each modified from time to time, as described in the Official Statement will be included in the Annual disclosure to be made with each National Repository or the MSRB and the State Depository (if Report. Audited Financial Statements will be provided pursuant to Section 2(d). any) together with a completed copy of the MSRB Material Event Notice Cover Sheet in the form attached as Exhibit C, describing the event by checking the appropriate boxes. Any or all of the items listed above may be included by specific reference from other documents, including Official Statements of debt issues with respect to which the Issuer is an (v) provide the Issuer evidence of the filings of each of the above when made, “obligated person” (as defined by the Rule), which have been previously filed with each of the which shall be by means of the DAC system, for so long as DAC is the Disclosure Dissemination National Repositories or the Securities and Exchange Commission. If the document incorporated Agent under this Disclosure Agreement. by reference is a final Official Statement, it must be available from the MSRB. The Issuer will clearly identify each such document so incorporated by reference. (f) The Issuer may adjust the Annual Filing Date upon a change of its fiscal year by providing written notice of such change and the new Annual Filing Date to the Disclosure (c) Additionally, the Issuer agrees to provide, or cause to be provided, the following Dissemination Agent and the Repositories, provided that the period between the existing Annual information at the times indicated: Filing Date and new Annual Filing Date shall not exceed one year. (i) Copies of the annual Progress Report required to be prepared under the SECTION 3. Content of Annual Reports; Other Information. Interlocal Agreement, are to be provided to the Disclosure Dissemination Agent within 30 days of delivery of the same under the Interlocal Agreement. (a) Each Annual Report shall contain Annual Financial Information with respect to the Issuer, including: (ii) During construction of the Series 2004 Project, copies of periodic

I-3 construction progress reports, are to be provided to the Disclosure Dissemination Agent within 1. the balances in the funds and accounts under the Indenture; 30 days of receipt of same from the construction manager for the 2004 Project.

2. the assessed value of lands upon which the Special Assessments securing (iii) Written confirmation of the implementation of the uniform method of the Bonds are levied; provided, however, that the Issuer may rely upon the records of the collection of the Special Assessments, in the form of a letter from the Miami-Dade County Tax County Property Appraiser for such information; Collector or opinion of legal counsel, to be provided to the Disclosure Dissemination Agent as soon as practicable after the completion of the implementation procedures necessary under 3. the amount of Special Assessments certified by the Issuer to the Tax Florida law. Collector for the immediately preceding calendar year; SECTION 4. Reporting of Notice Events. 4. the amount of Special Assessments collected for the prior year; (a) The occurrence of any of the following events, if material with respect to the 5. the amount of delinquent Special Assessments; Bonds, constitutes a Notice Event:

6. the dollar amount of tax certificates sold; (i) Principal and interest payment delinquencies;

7. the debt service schedule for the remaining term of the Bonds; (ii) Non-payment related defaults;

8. an update of information contained in the Official Statement under the (iii) Unscheduled draws on debt service reserves reflecting financial caption “THE 2004 PROJECT”; and difficulties; (iv) Unscheduled draws on credit enhancements relating to the Bonds SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure reflecting financial difficulties; Dissemination Agent, including but not limited to annual reports, documents incorporated by reference to the annual reports, audited financial statements, notices of notice events, and (v) Substitution of credit or liquidity providers, or their failure to perform; voluntary reports filed pursuant to section 8(a), the Issuer shall indicate the full name of the bonds and the 9-digit CUSIP numbers for the bonds as to which the provided information relates. (vi) Adverse tax opinions or events affecting the tax-exempt status of the Bonds; SECTION 6. [Intentionally omitted.]

(vii) Modifications to rights of Bond holders; SECTION 7. Additional Disclosure Obligations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of (viii) Unscheduled Bond calls (other than pursuant to an extraordinary 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the redemption under the terms of the Indenture); Issuer, and that the failure of the Disclosure Dissemination Agent to so advise the Issuer shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and (ix) Defeasances; responsibilities under this Disclosure Agreement. The Issuer acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the (x) Release, substitution, or sale of property securing repayment of the Bonds; mechanical tasks of disseminating information as described in this Disclosure Agreement. (xi) Rating changes on the Bonds; SECTION 8. Voluntary Reports. (xii) Failure to provide annual financial information as required; (a) The Issuer may instruct the Disclosure Dissemination Agent to file information The Issuer shall, if the Issuer has determined that knowledge of the occurrence of a with the Repositories, from time to time pursuant to a Certification of the Disclosure Notice Event would be material under applicable federal securities laws, promptly notify the Representative accompanying such information (a “Voluntary Report”). Disclosure Dissemination Agent in writing upon the occurrence of a Notice Event. Such notice (b) Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer from shall be accompanied with the text of the disclosure that the Issuer desires to make, the written disseminating any other information through the Disclosure Dissemination Agent using the authorization of the Issuer for the Disclosure Dissemination Agent to disseminate such means of dissemination set forth in this Disclosure Agreement or including any other information, and the date the Issuer desires for the Disclosure Dissemination Agent to I-4 information in any Annual Report, Annual Financial Statement, Voluntary Report or Notice disseminate the information. Notwithstanding the foregoing, notice of the occurrence of Notice Event notice, in addition to that required by this Disclosure Agreement. If the Issuer chooses to Event described in clauses(viii) or (ix) need not be given any earlier than the notice (if any) of include any information in any Annual Report, Annual Financial Statement, Voluntary Report or the underlying event is given to Holders of affected Bonds pursuant to the Indenture. Notice Event notice in addition to that which is specifically required by this Disclosure (b) The Disclosure Dissemination Agent is under no obligation to notify the Issuer or Agreement, the Issuer shall not have any obligation under this Disclosure Agreement to update the Disclosure Representative of an event that may constitute a Notice Event. In the event the such information or include it in any future Annual Report, Annual Financial Statement, Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Voluntary Report or Notice Event notice. Representative will within five business days of receipt of such notice, instruct the Disclosure SECTION 9. Termination of Reporting Obligation. The obligations of the Issuer and Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a the Disclosure Dissemination Agent under this Disclosure Agreement shall terminate upon the Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence legal defeasance, prior redemption or payment in full of all of the Bonds, when the Issuer is no pursuant to Section 2(d) and subsection (c), together with the text of the disclosure that the Issuer longer an obligated person with respect to the Bonds, or upon delivery by the Disclosure desires to make, the written authorization of the Issuer for the Disclosure Dissemination Agent to Representative to the Disclosure Dissemination Agent of an opinion of nationally recognized disseminate such information, and the date the Issuer desires for the Disclosure Dissemination bond counsel to the effect that continuing disclosure is no longer required. Agent to disseminate the information. Any notification by the Issuer to the City, the County or the Developers shall also be made to the Issuer. SECTION 10. Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as Disclosure Dissemination Agent under this Disclosure (c) If the Disclosure Dissemination Agent has been instructed by the Issuer as Agreement. The Issuer or DAC may, upon thirty days written notice to the other, terminate this prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, Disclosure Agreement. Upon termination of DAC’s services as Disclosure Dissemination the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor State Depository (if any) and (i) each National Repository, or (ii) the MSRB. Disclosure Dissemination Agent or, alternatively, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders (b) The Disclosure Dissemination Agent may, from time to time, consult with legal of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall counsel (either in-house or external) of its own choosing in the event of any disagreement or remain liable until payment in full for any and all sums owed and payable to the Disclosure controversy, or question or doubt as to the construction of any of the provisions hereof or its Dissemination Agent hereunder. respective duties hereunder, and neither of them shall incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and SECTION 11. Remedies in Event of Default. In the event of a failure of the Issuer or expenses of such counsel shall be payable by the Issuer. the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Holders’ rights to enforce the provisions of this Agreement shall be limited solely to a right, SECTION 13. Amendment; Waiver. Notwithstanding any other provision of this by action in mandamus or for specific performance, to compel performance of the parties' Disclosure Agreement, the Issuer and the Disclosure Dissemination Agent may amend this obligation under this Disclosure Agreement. Any failure by a party to perform in accordance Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such with this Disclosure Agreement shall not constitute a default on the bonds or under any other amendment or waiver is supported by an opinion of counsel expert in federal securities laws document relating to the Bonds, and all rights and remedies shall be limited to those expressly acceptable to the Issuer and the Disclosure Dissemination Agent to the effect that such stated herein. amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the rule if such amendment or SECTION 12. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the rule. (a) The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have obligation to deliver the information at the times and with the contents described herein shall be the right to adopt amendments to this Disclosure Agreement necessary to comply with limited to the extent the Issuer has provided such information to the Disclosure Dissemination modifications to and interpretations of the provisions of the Rule as announced by the Securities Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall and Exchange Commission from time to time by giving not less than 20 days written notice of have no duty with respect to the content of any disclosures or notice made pursuant to the terms the intent to do so together with a copy of the proposed amendment to the Issuer and the hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify Developers. any Information or any other information, disclosures or notices provided to it by the Issuer and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the SECTION 14. No Personal Liability. No covenant, stipulation, obligation or agreement Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for of the Issuer contained in this Disclosure Agreement shall be deemed to be a covenant, I-5 the Issuer’s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to stipulation, obligation or agreement of any present or future officer, agent or employee of the determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to Issuer in other than that person’s official capacity. determine, or liability for failing to determine, whether the Issuer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon SECTION 15. Severability. In case any section or provision of this Disclosure certifications of the Issuer at all times. Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons THE ISSUER AGREES, TO THE EXTENT PERMITTED BY FLORIDA LAW, TO held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or INDEMNIFY AND SAVE THE DISCLOSURE DISSEMINATION AGENT AND ITS any other section or provision thereof or any other covenant, stipulation, obligation, agreement, RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, HARMLESS act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the AGAINST ANY LOSS, EXPENSE AND LIABILITIES WHICH THEY MAY INCUR extent that such remainder or section or provision or other covenant, stipulation, obligation, ARISING OUT OF OR IN THE EXERCISE OR PERFORMANCE OF THEIR POWERS AND agreement, act or action, or part thereof is wholly dependent for its operation on the provision DUTIES HEREUNDER, AS THE SAME RELATES TO THE ISSUER'S OBLIGATIONS determined to be invalid), which shall be construed and enforced as if such illegal or invalid HEREUNDER, INCLUDING THE COSTS AND EXPENSES (INCLUDING REASONABLE portion were not contained therein, nor shall such illegality or invalidity of any application ATTORNEYS’ FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT thereof affect any legal and valid application thereof, and each such section, provision, covenant, EXCLUDING LIABILITIES DUE TO THE DISCLOSURE DISSEMINATION AGENT’S stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, NEGLIGENCE OR MISCONDUCT. operative, made, entered into or taken in the manner and to the full extent permitted by law.

The obligations of the Issuer under this Section shall survive resignation or removal of SECTION 16. Sovereign Immunity. The Disclosure Dissemination Agent agrees that the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. nothing in this Disclosure Agreement shall constitute or be construed as a waiver of the Issuer’s limitations on liability contained in Section 768.28, Florida Statutes, or other statutes or law. SECTION 17. Beneficiaries. This Disclosure Agreement shall inure solely to the The Disclosure Dissemination Agent and the Issuer have caused this Continuing benefit of the Issuer, the City, the County, the Developers, the Disclosure Dissemination Agent, Disclosure Agreement to be executed, on the date first written above, by their respective officers the underwriter, and the Holders from time to time of the Bonds, and shall create no rights in any duly authorized. other person or entity.

SECTION 18. Governing Law. This Disclosure Agreement shall be governed by the DIGITAL ASSURANCE CERTIFICATION, MIDTOWN MIAMI COMMUNITY laws of the State of Florida. L.L.C, as Disclosure Dissemination Agent DEVELOPMENT DISTRICT, as Issuer

SECTION 19. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the By: By: same instrument. Title: Chairman I-6 EXHIBIT A EXHIBIT B

NAME AND CUSIP NUMBERS OF BONDS NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Midtown Miami Community Development District Name of Issuer: Midtown Miami Community Development District

Obligated Person(s): Midtown Miami Community Development District, Midtown Obligated Person(s): Midtown Miami Community Development District, Midtown Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Florida (Series 2004A Bonds only) and Miami-Dade County Florida (Series 2004A Bonds only) and Miami-Dade County (Series 2004A Bonds only) (Series 2004A Bonds only)

Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A and Special Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A and Special Assessment Bonds Series 2004B Assessment Bonds Series 2004B

Date of Issuance: July 28, 2004 Date of Issuance: July 28, 2004

Date of Limited Offering NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with Memoranda: July 16, 2004 respect to the above-named Bonds as required by the Disclosure Agreement, dated as of ______, 2004, between the Issuer and Digital Assurance Certification, L.L.C., CUSIP Number: as Disclosure Dissemination Agent. The Issuer has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by ______.

Dated: ______

Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the

I-7 Issuer

cc: Issuer Obligated Person EXHIBIT C East Developer This cover sheet and material event notice should be sent to the Municipal Securities Rulemaking Board or to all Nationally Recognized Municipal Securities Information Repositories, and the State CONTINUING DISCLOSURE AGREEMENT Information Depository, if applicable, pursuant to Securities and Exchange Commission Rule 15c2- 12(b)(5)(i)(C) and (D). Midtown Miami Community Development District (Miami-Dade County, Florida) Issuer’s and/or Other Obligated Person’s Name: ______Special Assessment and Revenue Bonds, Series 2004A Issuer’s Six-Digit CUSIP Number: ______and Special Assessment Bonds, Series 2004B or Nine-Digit CUSIP Number(s) of the bonds to which this material event notice relates: This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and Number of pages of attached material event notice: _____ delivered as of July 28, 2004 by Midtown Miami Community Development District (the Description of Material Events Notice (Check One): “Issuer”), Midtown Partners, LLC, a Florida limited liability company (the “East Developer”) and Digital Assurance Certification, L.L.C. (the “Disclosure Dissemination Agent” or “DAC”) in 1. ___ Principal and interest payment delinquencies connection with the issuance by the Issuer of its $73,580,000 aggregate principal amount of 2. ___ Non-Payment related defaults Special Assessment and Revenue Bonds, Series 2004A (the “Series 2004A Bonds”) and 3. ___ Unscheduled draws on debt service reserves reflecting financial difficulties $30,020,000 aggregate principal amount of Special Assessment Bonds, Series 2004B (the 4. ___ Unscheduled draws on credit enhancements reflecting financial difficulties “Series 2004B Bonds”) (collectively, the “Bonds”). The Bonds are being issued pursuant to a 5. ___ Substitution of credit or liquidity providers, or their failure to perform Master Trust Indenture dated as of July 1, 2004, as supplemented by a First Supplemental Trust 6. ___ Adverse tax opinions or events affecting the tax-exempt status of the security Indenture dated as of July 1, 2004 (collectively, the “Indenture”) each between the Issuer and 7. ___ Modifications to rights of securities holders Wachovia Bank, National Association, as Trustee. 8. ___ Bond calls 9. ___ Defeasances This Disclosure Agreement is being executed and delivered in order to comply with the 10. ___ Release, substitution, or sale of property securing repayment of the securities 11. ___ Rating changes requirements of Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934 (the 12. ___ Failure to provide annual financial information as required “Rule”), and is for the benefit of the holders and Beneficial owners (as hereinafter defined) of the 13. ___ Other material event notice (specify) ______Bonds. I-8 I hereby represent that I am authorized by the Issuer or its agent to distribute this SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure information publicly: Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the Signature: following meanings:

Name: “Bonds” means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto. Title: Employer: Digital Assurance Certification, L.L.C. “Certification” means a written certification of compliance signed by the applicable Disclosure Representative stating that the Annual Information, delivered to the Disclosure Address: Dissemination Agent is the Annual Information, required to be submitted to the Repositories under this Disclosure Agreement. A Certification shall accompany each such document City, State, Zip Code: submitted to the Disclosure Dissemination Agent and include the full name of the Bonds and the 9-digit CUSIP numbers for all Bonds to which the document applies. Voice Telephone Number: Please print the material event notice attached to this cover sheet in 10-point type or larger, “Developers” means, collectively, the East Developer and DDR Miami Avenue, L.L.C., a The cover sheet and notice may be faxed to the MSRB at (703) 683-1930 or sent to CDINet, Delaware limited liability company. Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, VA 22314. “Disclosure Representative” means as to the East Developer, such person(s) as the East Contact the MSRB at (703) 797-6600 with questions regarding this form or the dissemination Developer shall designate in writing to the Disclosure Dissemination Agent from time to time as of this notice. the person(s) responsible for providing Information to the Disclosure Dissemination Agent. “Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C., acting “Obligated Person(s)” means those persons or entities listed in Exhibit A attached hereto in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure and any other person or entity who may become an Obligated Person with respect to the Bonds Dissemination Agent designated in writing by the Issuer pursuant to Section 10 hereof. for purposes of the Rule.

“Holder” means any person (a) having the power, directly or indirectly, to vote or consent “Official Statement” means that Limited Offering Memoranda dated July 16, 2004 with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds prepared in connection with the issuance of the Bonds. through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. “Repository” means the MSRB, each National Repository and the State Depository (if any). “Information” means the information required to be provided under Section 6 hereof. “State Depository” means any public or private depository or entity designated by the “MSRB” means the Municipal Securities Rulemaking Board established pursuant to State of Florida as a state information depository (if any) for the purpose of the Rule. The list of Section 15B(b)(1) of the Securities Exchange Act of 1934. state information depositories maintained by the United States Securities and Exchange Commission shall be conclusive as to the existence of a State Depository. “National Repository” means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The list of National Repositories maintained by “Voluntary Report” means the information provided to the Disclosure Dissemination the United States Securities and Exchange Commission shall be conclusive for purposes of Agent by the Issuer pursuant to Section 8. determining National Repositories. Currently, the following are National Repositories: SECTION 2. [Intentionally omitted.] 1. DPC Data Inc. One Executive Drive SECTION 3. [Intentionally omitted.] Fort Lee, New Jersey 07024 (201) 346-0701 (phone) SECTION 4. [Intentionally omitted.] (201) 947-0107 (fax) Email: [email protected] SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Dissemination Agent, including but not limited to annual reports, documents incorporated by 2. FT Interactive Data

I-9 reference to the annual reports, audited financial statements, notices of notice events, and Attn: NRMSIR voluntary reports filed pursuant to Section 8(a), the East Developer shall indicate the full name 100 Williams Street of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information New York, New York 10038 relates. (212) 771-6999 (phone) (212) 771-7390 (fax or secondary market information) SECTION 6. Obligation to Provide Information. So long as the East Developer (or (212) 771-7391 (fax for primary market information) any related person or entity), is the owner of real property subject to the levy of 20% or more of Email: [email protected] the Special Assessments (as defined in the Official Statement), the East Developer shall provide 3. Bloomberg Municipal Repository the following information to the Disclosure Dissemination Agent, and to any bondholder that 100 Business Park Drive requests such information in writing, on or before each January 10, April 10, July 10, and Skillman, New Jersey 08558 October 10, commencing October 10, 2004, and the Disclosure Dissemination Agent shall, (609) 279-3225 (phone) within fifteen (15) days of its receipt thereof, provide such information to all of the National (609) 279-5962 (fax) Repositories or the MSRB and to any State Repository: Email: [email protected] (a) A status report setting forth the following information in each case with respect to 4. Standard & Poor’s Securities Evaluations, Inc. that portion of the Developments being developed by the East Developer or any related person or 55 Water Street entity (including, but not limited to, portions of the residential rental units and associated retail 45th Floor being developed in Development Area No. 2): New York, New York 10041 (212) 438-4595 (phone) (i) Total number of Development Units closed, (212) 438-3975 (fax) Email: [email protected] (ii) Total number of Development Units under construction and under contract that which is specifically required by this Disclosure Agreement, the East Developer shall not (purchase or lease), have any obligation under this Disclosure Agreement to update such information or include it in any report. (iii) Total number of Development Units under construction and not under contract (purchase or lease), SECTION 9. Termination of Reporting Obligation. The obligations of the East Developer and the Disclosure Dissemination Agent under this Disclosure Agreement shall (iv) Total number of Development Units not under construction and under terminate (i) upon the legal defeasance, prior redemption or payment in full of all of the Bonds, contract (purchase or lease), (ii) when the East Developer is no longer an Obligated Person with respect to the Bonds, or (iii) upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an (v) Total number of Development Units not under construction and not under opinion of nationally recognized bond counsel to the effect that the continuing disclosure contract (purchase or lease), and obligations of East Developer under Section 6 are no longer required.

(vi) Anticipated sellout or lease-up date, as the case may be. SECTION 10. Disclosure Dissemination Agent. The Issuer has appointed DAC as the initial Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer or DAC (b) Any significant zoning or land use entitlement changes or any other matter that may, upon thirty days written notice to the other, terminate DAC’s services and responsibilities would have a material adverse impact on land values, development potential or the likelihood of as the Disclosure Dissemination Agent under this Disclosure Agreement. Upon any such the timely payment of the Special Assessments. termination, the Issuer agrees to notify the East Developer of the successor Disclosure Dissemination Agent, which may be the Issuer.. (c) An update of the information, to the extent such information relates to the East Developer or such portions of the Developments for which the East Developer is responsible as SECTION 11. Remedies in Event of Default. In the event of a failure of the East set forth in detail in the Official Statement and included in the tables shown in the Official Developer or the Disclosure Dissemination Agent to comply with any provision of this Statement under the caption “THE DEVELOPMENTS AND DEVELOPERS,” copies of which Disclosure Agreement, the Holders’ rights to enforce the provisions of this Agreement shall be are included herein as Exhibit C. limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligations under this Disclosure Agreement. Any failure by a party (d) Construction progress reports for the portions of the Developments for which the to perform in accordance with this Disclosure Agreement shall not constitute a default on the East Developer (or any related person or entity) is responsible. Bonds or under any other document relating to the Bonds, and all rights and remedies shall be I-10 SECTION 7. Additional Disclosure Obligations. The East Developer acknowledges limited to those expressly stated herein. and understands that other state and federal laws, including but not limited to the Securities Act SECTION 12. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the East Developer, and that the failure of the Disclosure Dissemination Agent to so advise the (a) The Disclosure Dissemination Agent shall have only such duties as are East Developer shall not constitute a breach by the Disclosure Dissemination Agent of any of its specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s duties and responsibilities under this Disclosure Agreement. The East Developer acknowledges obligation to deliver the information at the times and with the contents described herein shall be and understands that the duties of the Disclosure Dissemination Agent relate exclusively to limited to the extent the East Developer has provided such information to the Disclosure execution of the mechanical tasks of disseminating information as described in this Disclosure Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agreement. Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to SECTION 8. Voluntary Reports. review or verify any Information or any other information, disclosures or notices provided to it (a) The East Developer may instruct the Disclosure Dissemination Agent to file by the East Developer and shall not be deemed to be acting in any fiduciary capacity for the East information with the Repositories, from time to time pursuant to a Certification of the Disclosure Developer, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent Representative accompanying such information (a “Voluntary Report”). shall have no responsibility for the East Developer’s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The (b) Nothing in this Disclosure Agreement shall be deemed to prevent the East Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to Developer from disseminating any other information through the Disclosure Dissemination determine, whether the East Developer has complied with this Disclosure Agreement. The Agent using the means of dissemination set forth in this Disclosure Agreement or including any Disclosure Dissemination Agent may conclusively rely upon certifications of the East Developer other information in any Information or Voluntary Report in addition to that required by this at all times. Disclosure Agreement. If the East Developer chooses to include any information in addition to THE EAST DEVELOPER AGREES TO INDEMNIFY AND SAVE THE stipulation, obligation or agreement of any present or future officer, agent or employee of the DISCLOSURE DISSEMINATION AGENT AND ITS RESPECTIVE OFFICERS, East Developer in other than that person’s official capacity. DIRECTORS, EMPLOYEES AND AGENTS, HARMLESS AGAINST ANY LOSS, EXPENSE AND LIABILITIES WHICH THEY MAY INCUR ARISING OUT OF OR IN THE SECTION 15. Severability. In case any section or provision of this Disclosure EXERCISE OR PERFORMANCE OF THEIR POWERS AND DUTIES HEREUNDER, AS Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof THE SAME RELATES SOLELY TO THE OBLIGATIONS OF THE EAST DEVELOPER made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons HEREUNDER, INCLUDING THE COSTS AND EXPENSES (INCLUDING REASONABLE held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or ATTORNEYS’ FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT any other section or provision thereof or any other covenant, stipulation, obligation, agreement, EXCLUDING ANY LOSS, EXPENSE OR LIABILITY DUE TO THE DISCLOSURE act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the DISSEMINATION AGENT’S NEGLIGENCE OR MISCONDUCT. extent that such remainder or section or provision or other covenant, stipulation, obligation, agreement, act or action, or part thereof is wholly dependent for its operation on the provision DAC HEREBY ACKNOWLEDGES THAT NEITHER THE ISSUER NOR THE determined to be invalid), which shall be construed and enforced as if such illegal or invalid DEVELOPERS HAVE WAIVED ANY ACTION AGAINST IT FOR ACTUAL DAMAGES portion were not contained therein, nor shall such illegality or invalidity of any application OR SPECIFIC PERFORMANCE IN THE EVENT THAT DAC SHALL HAVE PERFORMED thereof affect any legal and valid application thereof, and each such section, provision, covenant, ITS OBLIGATIONS HEREUNDER IN A NEGLIGENT FASHION OR WITH WILLFUL stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, MISCONDUCT, INCLUDING ACTIONS FOR INDEMNITY AND CONTRIBUTION. The operative, made, entered into or taken in the manner and to the full extent permitted by law. obligations of the East Developer and DAC under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the SECTION 16. Sovereign Immunity. The East Developer and the Disclosure Bonds. Dissemination Agent agree that nothing in this Disclosure Agreement shall constitute or be construed as a waiver of the Issuer’s limitations on liability contained in Section 768.28, Florida (b) The Disclosure Dissemination Agent may, from time to time, consult with legal Statutes, or other statutes or law. counsel (either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its SECTION 17. Beneficiaries. This Disclosure Agreement shall inure solely to the respective duties hereunder, and neither of them shall incur any liability and shall be fully benefit of the Issuer, the City, the County, the East Developer, the Disclosure Dissemination protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and Agent, the Underwriter, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. I-11 expenses of such counsel shall be payable by Disclosure Dissemination Agent.

SECTION 13. Amendment; Waiver. Notwithstanding any other provision of this SECTION 18. Governing Law. This Disclosure Agreement shall be governed by the Disclosure Agreement, the East Developer and the Disclosure Dissemination Agent may amend laws of the State of Florida. this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws SECTION 19. Counterparts. This Disclosure Agreement may be executed in several acceptable to the East Developer and the Disclosure Dissemination Agent to the effect that such counterparts, each of which shall be an original and all of which shall constitute but one and the amendment or waiver does not materially impair the interests of Holders of the Bonds and would same instrument. not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or [Remainder of Page Intentionally Left Blank] official interpretation of the Rule.

Notwithstanding the preceding paragraph, upon approval by the Issuer, which approval will not be unreasonably withheld, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less than 20 days written notice of the intent to do so together with a copy of the proposed amendment to the East Developer and the Developers.

SECTION 14. No Personal Liability. No covenant, stipulation, obligation or agreement of the East Developer contained in this Disclosure Agreement shall be deemed to be a covenant, The Disclosure Dissemination Agent, the Issuer and the East Developer have caused this EXHIBIT A Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. NAME AND CUSIP NUMBERS OF BONDS Name of Issuer: Midtown Miami Community Development District DIGITAL ASSURANCE CERTIFICATION, MIDTOWN MIAMI COMMUNITY L.L.C, as Disclosure Dissemination Agent DEVELOPMENT DISTRICT, as Issuer Obligated Person(s): Midtown Miami Community Development District, Midtown Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Florida (with respect to the Series 2004 A Bonds only) and Miami- By: By: Dade County (with respect to the Series 2004 A Bonds only) Title: Deborah Samuel, Chairman Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A and Special MIDTOWN PARTNERS, LLC, a Florida limited Assessment Bonds Series 2004B liability company, as East Developer Date of Issuance: July 28, 2004

Date of Limited Offering By: Memoranda: July 16, 2004 Daniel K. Pfeffer, Member Representative CUSIP Number:

By: Michael Samuel, Member Representative I-12 EXHIBIT B

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Midtown Miami Community Development District

Obligated Person(s): Midtown Miami Community Development District, Midtown Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Florida (with respect to the Series 2004 A Bonds only) and Miami-Dade County (with respect to the Series 2004 A Bonds only)

Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A and Special Assessment Bonds Series 2004B

Date of Issuance: July 28, 2004

NOTICE IS HEREBY GIVEN that Midtown Partners, LLC, a Florida limited liability company (the “East Developer”) has not provided Information with respect to the above-named Bonds as required by the Disclosure Agreement, dated as of ______, 2004, between the Issuer, the East Developer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The East Developer has notified the Disclosure Dissemination Agent that it anticipates that the Information will be filed by ______.

Dated: ______[THIS PAGE INTENTIONALLY LEFT BLANK] Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the Issuer I-13

cc: Issuer Obligated Persons EXHIBIT C

Development Area 1 - Midtown Miami Development Plan Summary and Status Update % Imp. SF Tract Planned w/Contract Const. Land SF Development / Lease / Const. Start Finish Date Est. Const. Est. Finished ILA Stage Tract (2) Owner (3) (4) Component (5) Description and Status (5) Open (7) Date (6) (8) Costs (9) Value (10) Triggers (11)

A & B(12) Midtown Miami 88,446 Condominium Planned for approximately 325 units and 0% October February $60 Million $108 Million Not Applicable (MME) No. 8 LLC Tower 16,000 square feet of ground floor retail 2007 2010

C (MME) Midtown Miami 80,365 Condominium Planned for approximately 325 units and 0% October February $60 Million $108 Million Not Applicable No. 7 LLC Tower 16,000 square feet of ground floor retail 2007 2010

D (MME) Midtown Miami 93,140 Condominium Planned for approximately 325 units and 0% February February $60 Million $109 Million Not Applicable No. 6 LLC Tower 25,000 square feet of ground floor retail 2007 2009

E (MME) Midtown Miami 68,787 Condominium Planned for approximately 325 units and 0% October February $60 Million $108 Million Not Applicable No. 5 LLC Tower 16,000 square feet of ground floor retail 2005 2008

F (MME) Midtown Miami 83,246 Condominium Tower #2. Architectural design 80% 0% January December $78 million $175 million ILA Stage 2 No. 4 LLC Tower complete. Designed as 30-story tower 2005 2006 Performance with 402,000 square feet of improved Level re: Condo facilities - 387 condominium units, Tower #2 amenities, and approximately 10,000 square feet of ground floor retail. Marketing expected to begin in July 2004.

G (MME) Midtown Miami 66,972 Condominium Planned for approximately 325 units and 0% June 2005 June 2007 $58 million $102 million Not Applicable No. 3 LLC Tower 26,000 square feet of ground floor retail

H (MME) Midtown Miami 72,484 Condominium Tower #1. Architectural design 100% 100% August December $72 million $125 million ILA Stage 1 No. 2 LLC Tower complete. 28-story tower with 374,000 sf 2004 2006 Performance of improved facilities - 336 condominium Level re: Condo units, amenities, and 9,000 sq.ft. of ground Tower #1 floor retail.

I (MME) Midtown Miami 71,218 Condominium Planned for approximately 325 units and 0% February February $60 Million $109 Million Not Applicable No. 1 LLC Tower 20,750 square feet of ground floor retail. 2009 2011

B (BVW) Midtown Miami 155,252 Office Tower Planned for at least 150,000 sf of gross 0% December December $22,983,750 $22,983,750 ILA Stage 2 No. 9 LLC & Mixed-Used leasable area office space and a 120,000 sf 2005 2007 (office tower) (office tower) Performance Tower mixed-use facility. $24,000,000 $24,000,000 Level re: Office (mixed use) (mixed use) Tower & Hotel August February 624,658 2004 2011 $554,983,750 $990,983,750

NOTES: (1) To be updated by Midtown Partners pursuant to the Midtown Partners Continuing Disclosure Agreement – See “Appendix I – Forms of Continuing Disclosure Agreements.” (2) Tract designations as shown in the figure above pursuant to the Midtown Miami East (“MME”) plat or the Buena Vista West (“BVW”) plat. See “Entitlements” below. (3) 100% owned by Midtown Partners. See “Development Area 1 – Property Owners” above. (4) As shown in the MME and BVW Plats. (5) As currently planned by Midtown Partners. This is subject to change, including but not limited to the scope or timing of the development. (6) A percentage of the total usable improved land evidenced with either (a) signed contracts with condominium buyers or (b) executed leases pertaining to the office or neighborhood retail, or (c) a contract with a service provider for hotel. (7) As estimated by Midtown Partners. Any date noted with “actual” represents the date Midtown Partners received an approved building permit from the City of Miami. (8) As estimated by Midtown Partners. Any date noted with “actual” represents the date Midtown Partners received a certificate of occupancy, as defined under the Florida building code, from the City of Miami. (9) As estimated by Midtown Partners. This reflects the vertical construction costs only and excludes land costs. (10) Finished value represents Midtown Partners estimate of value for the planned improvements based on the proposed development. Any value noted with “actual” represents the sellout value represented by the aggregate value of closed condominium contracts and a reasonable market accepted approach for income producing property. Actual assessed value shall be an acceptable value in this column for any building that has received a certificate of occupancy, as defined under the Florida building code, from the City of Miami and the County Tax Assessor has adjusted the values to reflect the improved status of the tract. Any such value shall be noted with “Actual AV.” (11) This column monitors the development that Midtown Partners plans to use to meets its performance obligations under the ILA. See “THE FINANCING PLAN”, “SECURITY FOR THE BONDS – Interlocal Agreement” and “Appendix B - Interlocal Agreement.” (12) Midtown Partners currently plans to merge these two tracts to develop a condominium tower.

I-14 Development Area 2 - Shops at Midtown Miami Development Plan Summary and Status Update Planned % Imp. SF Const. Tract Land Development w/Contract / Lease / Const. Start Finish Est. Const. Costs Est. Finished ILA Stage Triggers Tract (2) Owner (3) SF (4) Component (5) Description and Status (5) Open (7) Date (7) Date (8) (9) Value (10) (11)

A (BVW) -- 393,908 -- North Block (“NB”) - A multi-elevation ------tract with different owners and planned development as summarized below.

DDR DDR Retail 323,946 square feet(GLA) planned. July 2004 October $50,000,000(12) $110,000,000(12) ILA Stage 1 Facility 2006 Performance Level re: Retail

NB Apartments 42 residential rental units that wraps the $3,641,400 $3,641,400 ILA Stage 2 Development District parking (13) Performance Level LLC re: Apartments

District Public Parking 3 level-parking garage consisting of July 2004 April (14) (14) ILA Stage 1 Structure 1,799 planned spaces on the second, 2006 Performance Level third and fourth levels above the ground re: District floor retail space.

C (BVW) -- 170,607 -- Mid-Block West (“MBW”) – A multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 82,849 square feet (GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

District Midblock Plaza Public Open Space July 2004 April (14) (14) ILA Stage 1 2006 Performance Level re: Public Plaza

D (BVW) -- 96,474 -- Mid-Block East (“MBE”) – A multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 31,920 square feet (GLA) planned. August May 2006 (12) (12) ILA Stage 1 Facility 2005 Performance Level re: Retail

CEB Retail 25,420 square feet (GLA) planned. January May 2006 $3,000,000 $3,000,000 ILA Stage 1 Development 2005 Performance Level LLC re: Retail

District Parking 331 planned Parking Spaces January May 2006 (14) (14) ILA Stage 1 Structure 2005 Performance Level

[THIS PAGE INTENTIONALLY LEFT BLANK]

I-15 Planned % Imp. SF Const. Tract Land Development w/Contract / Lease / Const. Start Finish Est. Const. Costs Est. Finished ILA Stage Triggers Tract (2) Owner (3) SF (4) Component (5) Description and Status (5) Open (7) Date (7) Date (8) (9) Value (10) (11) re: Parking

EB Development Apartments 25 units wrapping the MBE Parking January May 2006 $2,167,500 $2,167,500 ILA Stage 2 LLC Garage (approximately 30,000 square 2005 Performance Level feet) re: Apartments

7-story tower planned for 167 units $14,478,900 $14,478,900 above the MBE Parking Garage

E (BVW) -- 213,601 -- South Block North (“SBN”) – A Multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 27,007 square feet (GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

District Parking 1,066 planned Parking Spaces adjacent February March (14) (14) ILA Stage 1 Structure to (east) the SBN retail. 2005 2006 Performance Level re: Parking

SEB Apartments 163 units adjacent to (to the east) the August December $14,132,100 $14,132,100 ILA Stage 2 Development SBN Parking Garage (12-15 stories) 2006 2007 Performance Level LLC re: Apartments

F (BVW) -- 213,601 -- South Block South (“SBS”) – A Multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 134,819 square feet(GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

G DDR 12,048 N/A Not planned for development. Parcel ------N/A (BVW) deemed undevelopable in the assessment methodology.

H DDR 7,136 N/A Not planned for development. Parcel ------N/A (BVW) deemed undevelopable in the assessment methodology.

NOTES: (1) The portions of this Table which show DDR as “Owner” is to be updated by DDR pursuant to the DDR Continuing Disclosure Agreement – “See Appendix I - DDR Continuing Disclosure Agreement.” The portions of this Table which show the various Midtown West Partnership entities as “Owner” is to be updated by Midtown Partners pursuant to the Midtown Partners Continuing Disclosure Agreement – “See Appendix I - Midtown Miami Continuing Disclosure Agreement.” (2) Tract designations as shown in the figure above pursuant to the Buena Vista West (“BVW”) Plat. See “Entitlements” below. (3) See “Development Area 2 – Property Owners” above. (4) As shown on the BVW Plats. (5) As currently planned by either DDR, Midtown West Partnership or the District. This is subject to change, including but not limited to the scope or timing of the development. (6) A percentage of the total usable improved evidenced with either (a) executed leases pertaining to retail, or (b) executed leases for apartment units. (7) As estimated by DDR or Midtown West Partnership, respectively. Any date noted with “actual” represents the proposed development received an approved building permit from the City of Miami. See “Development Area 2 – Marketing Plan” herein. (8) As estimated by DDR or Midtown West Partnership, respectively. Any date noted with “actual” represents the date a certificate of occupancy, as defined under the Florida building code, was received from the City of Miami for the proposed development. (9) As estimated by DDR or Midtown West Partnership, respectively. In some cases, the estimate is based upon estimated value set forth in the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. This reflects the vertical construction costs only and excludes land costs. (10) Finished value represents DDR’s or Midtown West Partnership’s estimate of value for the planned improvements based on the proposed development. In some cases, the estimate is based upon estimated value set forth in the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. Any value noted with “actual” represents a reasonable market accepted approach for income producing property. Actual assessed value shall be an acceptable value in this column for any building that has received a certificate of occupancy, as defined under the Florida building code, from the City of Miami and the County Tax Assessor has adjusted the values to reflect the improved status of the tract. Any such value shall be noted with “Actual AV.” (11) This column monitors the development that DDR or Midtown West Partnership plan to meet their performance obligations under the ILA. See “THE FINANCING PLAN”, “SECURITY FOR THE BONDS – Interlocal Agreement” and “Appendix B - Interlocal Agreement.” (12) Amount for entire DDR Retail Facility is shown at Tract A. (13) $2,650,000 of the Construction Cost was credited against purchase price of land acquired by DDR from Biscayne. The estimated total cost and finished value is based upon the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. See “Development Area 2 – Development Plan,” under this heading. (14) See the “PLAN OF FINANCE,” herein.

I-16 West Developer “Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C., acting in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure CONTINUING DISCLOSURE AGREEMENT Dissemination Agent designated in writing by the Issuer pursuant to Section 10 hereof.

Midtown Miami Community Development District “Holder” means any person (a) having the power, directly or indirectly, to vote or consent (Miami-Dade County, Florida) with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds Special Assessment and Revenue Bonds, Series 2004A through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds and for federal income tax purposes. Special Assessment Bonds, Series 2004B “Information” means the information required to be provided under Section 6 hereof. This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and delivered as of July 28, 2004 by Midtown Miami Community Development District (the “MSRB” means the Municipal Securities Rulemaking Board established pursuant to “Issuer”), DDR Miami Avenue, L.L.C., a Delaware limited liability company (the “West Section 15B(b)(1) of the Securities Exchange Act of 1934. Developer”) and Digital Assurance Certification, L.L.C. (the “Disclosure Dissemination Agent” or “DAC”) in connection with the issuance by the Issuer of its $73,580,000 aggregate principal “National Repository” means any Nationally Recognized Municipal Securities amount of Special Assessment and Revenue Bonds, Series 2004A (the “Series 2004A Bonds”) Information Repository for purposes of the Rule. The list of National Repositories maintained by and $30,020,000 aggregate principal amount of Special Assessment Bonds, Series 2004B (the the United States Securities and Exchange Commission shall be conclusive for purposes of “Series 2004B Bonds”) (collectively, the “Bonds”). The Bonds are being issued pursuant to a determining National Repositories. Currently, the following are National Repositories: Master Trust Indenture dated as of July 1, 2004, as supplemented by a First Supplemental Trust Indenture dated as of July 1, 2004 (collectively, the “Indenture”) each between the Issuer and 1. DPC Data Inc. Wachovia Bank, National Association, as Trustee. One Executive Drive Fort Lee, New Jersey 07024 This Disclosure Agreement is being executed and delivered in order to comply with the (201) 346-0701 (phone) requirements of Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934 (the (201) 947-0107 (fax) “Rule”), and is for the benefit of the holders and Beneficial owners (as hereinafter defined) of the Email: [email protected] Bonds. I-17 2. FT Interactive Data Attn: NRMSIR SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure 100 Williams Street Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the New York, New York 10038 Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the (212) 771-6999 (phone) following meanings: (212) 771-7390 (fax or secondary market information) (212) 771-7391 (fax for primary market information) “Bonds” means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP Email: [email protected] numbers relating thereto. 3. Bloomberg Municipal Repository “Certification” means a written certification of compliance signed by the applicable 100 Business Park Drive Disclosure Representative stating that the Annual Information, delivered to the Disclosure Skillman, New Jersey 08558 Dissemination Agent is the Annual Information, required to be submitted to the Repositories (609) 279-3225 (phone) under this Disclosure Agreement. A Certification shall accompany each such document (609) 279-5962 (fax) submitted to the Disclosure Dissemination Agent and include the full name of the Bonds and the Email: [email protected] 9-digit CUSIP numbers for all Bonds to which the document applies. 4. Standard & Poor’s Securities Evaluations, Inc. “Developers” means, collectively, the West Developer and Midtown Partners, LLC, a 55 Water Street Florida limited liability company. 45th Floor New York, New York 10041 “Disclosure Representative” means as to the West Developer, such person(s) as the West (212) 438-4595 (phone) Developer shall designate in writing to the Disclosure Dissemination Agent from time to time as (212) 438-3975 (fax) the person(s) responsible for providing Information to the Disclosure Dissemination Agent. Email: [email protected] “Obligated Person(s)” means those persons or entities listed in Exhibit A attached hereto (ii) Total GLA under construction, and any other person or entity who may become an Obligated Person with respect to the Bonds for purposes of the Rule. (iii) Total GLA under contract pursuant to executed Leases ,

“Official Statement” means that Limited Offering Memoranda dated July 16, 2004 (iv) Total GLA under contract pursuant to executed Letter of Intent, and prepared in connection with the issuance of the Bonds. (v) A list of the executed Leases for the West Developer’s portion of the “Repository” means the MSRB, each National Repository and the State Depository (if Developments including for each lease the following: (A) identification of the tenant, and (B) any). square footage leased to that tenant.

“State Depository” means any public or private depository or entity designated by the (b) During the construction of the West Developer’s portion of the Developments, to State of Florida as a state information depository (if any) for the purpose of the Rule. The list of the extent known by the West Developer, any significant zoning or land use entitlement changes state information depositories maintained by the United States Securities and Exchange that would have a material adverse impact on land values, development potential or the Commission shall be conclusive as to the existence of a State Depository. likelihood of the timely payment of the Special Assessments.

“Voluntary Report” means the information provided to the Disclosure Dissemination (c) An update of the information, to the extent such information relates to the West Agent by the Issuer pursuant to Section 8. Developer or such portions of the Developments for which the West Developer is responsible as set forth in detail in the Official Statement and included in the Official Statement under the SECTION 2. [Intentionally omitted.] caption “THE DEVELOPMENTS AND DEVELOPERS,” a copy of which is included herein as Exhibit C. SECTION 3. [Intentionally omitted.] (d) Additionally, the West Developer agrees to provide to the Disclosure SECTION 4. [Intentionally omitted.] Dissemination Agent copies of all Securities and Exchange Commission filings of Developers Diversified Realty Corporation (“DDR Corp.”) made since the last report submitted under this SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Section 6, to the extent such filings relate to the West Developer’s portion of the Development. Dissemination Agent, including but not limited to annual reports, documents incorporated by

I-18 reference to the annual reports, audited financial statements, notices of notice events, and SECTION 7. Additional Disclosure Obligations. The West Developer acknowledges voluntary reports filed pursuant to Section 8(a), the West Developer shall indicate the full name and understands that other state and federal laws, including but not limited to the Securities Act of the Bonds and the 9-digit CUSIP numbers for the Bonds as to which the provided information of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to relates. the West Developer, and that the failure of the Disclosure Dissemination Agent to so advise the West Developer shall not constitute a breach by the Disclosure Dissemination Agent of any of its SECTION 6. Obligation to Provide Information. So long as the West Developer or duties and responsibilities under this Disclosure Agreement. The West Developer any related person, or entity is the owner of real property subject to the levy of 20% or more of acknowledges and understands that the duties of the Disclosure Dissemination Agent relate the Special Assessments (as defined in the Official Statement), the West Developer shall provide exclusively to execution of the mechanical tasks of disseminating information as described in the following information to the Disclosure Dissemination Agent, and to any bondholder that this Disclosure Agreement. requests such information in writing, on or before each January 10, April 10, July 10, and October 10, commencing October 10, 2004, and the Disclosure Dissemination Agent shall, SECTION 8. Voluntary Reports. within fifteen (15) days of its receipt thereof, provide such information to all of the National Repositories or the MSRB and to any State Repository: (a) The West Developer may instruct the Disclosure Dissemination Agent to file information with the Repositories, from time to time pursuant to a Certification of the Disclosure (a) A status report setting forth the following information in each case with respect to Representative accompanying such information (a “Voluntary Report”). that portion of the Development being developed by the West Developer or any related person or entity and also only to the extent not included in the information being provided under paragraph (b) Nothing in this Disclosure Agreement shall be deemed to prevent the East (c) or (d) below: Developer from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Agreement or including any (i) Total amount of gross leasable area (GLA) for which a Certificate of Occupancy other information in any Information or Voluntary Report in addition to that required by this or a temporary Certificate of Occupancy has been received, Disclosure Agreement. If the West Developer chooses to include any information in addition to that which is specifically required by this Disclosure Agreement, the West Developer shall not have any obligation under this Disclosure Agreement to update such information or include it in THE WEST DEVELOPER AGREES TO INDEMNIFY AND SAVE THE any report. DISCLOSURE DISSEMINATION AGENT AND ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, HARMLESS AGAINST ANY LOSS, SECTION 9. Termination of Reporting Obligation. The obligations of the West EXPENSE AND LIABILITIES WHICH THEY MAY INCUR ARISING OUT OF OR IN THE Developer and the Disclosure Dissemination Agent under this Disclosure Agreement shall EXERCISE OR PERFORMANCE OF THEIR POWERS AND DUTIES HEREUNDER, AS terminate (i) upon the legal defeasance, prior redemption or payment in full of all of the Bonds, THE SAME RELATES SOLELY TO THE OBLIGATIONS OF THE WEST DEVELOPER (ii) when the West Developer is no longer an Obligated Person with respect to the Bonds, or (iii) HEREUNDER, INCLUDING THE COSTS AND EXPENSES (INCLUDING REASONABLE upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an ATTORNEYS’ FEES) OF DEFENDING AGAINST ANY CLAIM OF LIABILITY, BUT opinion of nationally recognized bond counsel to the effect that the continuing disclosure EXCLUDING ANY LOSS, EXPENSE OR LIABILITY DUE TO THE DISCLOSURE obligations of West Developer under Section 6 are no longer required. DISSEMINATION AGENT’S NEGLIGENCE OR MISCONDUCT.

SECTION 10. Disclosure Dissemination Agent. The Issuer has appointed DAC as the DAC HEREBY ACKNOWLEDGES THAT NEITHER THE ISSUER NOR THE initial Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer or DAC DEVELOPERS HAVE WAIVED ANY ACTION AGAINST IT FOR ACTUAL DAMAGES may, upon thirty days written notice to the other, terminate DAC’s services and responsibilities OR SPECIFIC PERFORMANCE IN THE EVENT THAT DAC SHALL HAVE PERFORMED as the Disclosure Dissemination Agent under this Disclosure Agreement. Upon any such ITS OBLIGATIONS HEREUNDER IN A NEGLIGENT FASHION OR WITH WILLFUL termination, the Issuer agrees to notify the West Developer of the successor Disclosure MISCONDUCT, INCLUDING ACTIONS FOR INDEMNITY AND CONTRIBUTION. The Dissemination Agent, which may be the Issuer.. obligations of the West Developer under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. SECTION 11. Remedies. In the event of a failure of the West Developer or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the (b) The Disclosure Dissemination Agent may, from time to time, consult with legal Holders’ rights to enforce the provisions of this Agreement shall be limited solely to a right, by counsel (either in-house or external) of its own choosing in the event of any disagreement or action in mandamus or for specific performance, to compel performance of the parties' controversy, or question or doubt as to the construction of any of the provisions hereof or its obligations under this Disclosure Agreement. Any failure by a party to perform in accordance respective duties hereunder, and neither of them shall incur any liability and shall be fully with this Disclosure Agreement shall not constitute a default on the Bonds or under any other protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and document relating to the Bonds, and all rights and remedies shall be limited to those expressly expenses of such counsel shall be payable by the Disclosure Dissemination Agent. stated herein. I-19 SECTION 13. Amendment; Waiver. Notwithstanding any other provision of this SECTION 12. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. Disclosure Agreement, the West Developer and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if (a) The Disclosure Dissemination Agent shall have only such duties as are such amendment or waiver is supported by an opinion of counsel expert in federal securities laws specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s acceptable to the West Developer and the Disclosure Dissemination Agent to the effect that such obligation to deliver the information at the times and with the contents described herein shall be amendment or waiver does not materially impair the interests of Holders of the Bonds and would limited to the extent the West Developer has provided such information to the Disclosure not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or Dissemination Agent as required by this Disclosure Agreement. The Disclosure Dissemination waiver had been effective on the date hereof but taking into account any subsequent change in or Agent shall have no duty with respect to the content of any disclosures or notice made pursuant official interpretation of the Rule. to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any Information or any other information, disclosures or notices provided to it Notwithstanding the preceding paragraph, upon approval by the Issuer, which approval by the West Developer and shall not be deemed to be acting in any fiduciary capacity for the will not be unreasonably withheld, the Disclosure Dissemination Agent shall have the right to West Developer, the Holders of the Bonds or any other party. The Disclosure Dissemination adopt amendments to this Disclosure Agreement necessary to comply with modifications to and Agent shall have no responsibility for the West Developer’s failure to report to the Disclosure interpretations of the provisions of the Rule as announced by the Securities and Exchange Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Commission from time to time by giving not less than 20 days written notice of the intent to do Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to so together with a copy of the proposed amendment to the West Developer. determine, whether the West Developer has complied with this Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the West SECTION 14. No Personal Liability. No covenant, stipulation, obligation or agreement Developer at all times. of the West Developer contained in this Disclosure Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future officer, agent or employee of the West Developer in other than that person’s official capacity. SECTION 15. Severability. In case any section or provision of this Disclosure The Disclosure Dissemination Agent, the Issuer and the West Developer have caused this Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof Continuing Disclosure Agreement to be executed, on the date first written above, by their made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons respective officers duly authorized. held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or any other section or provision thereof or any other covenant, stipulation, obligation, agreement, act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the DIGITAL ASSURANCE CERTIFICATION, MIDTOWN MIAMI COMMUNITY extent that such remainder or section or provision or other covenant, stipulation, obligation, L.L.C, as Disclosure Dissemination Agent DEVELOPMENT DISTRICT, as Issuer agreement, act or action, or part thereof is wholly dependent for its operation on the provision determined to be invalid), which shall be construed and enforced as if such illegal or invalid portion were not contained therein, nor shall such illegality or invalidity of any application By: By: thereof affect any legal and valid application thereof, and each such section, provision, covenant, Title: Deborah Samuel, Chairman stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. DDR MIAMI AVENUE, L.L.C., a Delaware limited liability company, as West Developer SECTION 16. Sovereign Immunity. The West Developer and the Disclosure Dissemination Agent agree that nothing in this Disclosure Agreement shall constitute or be construed as a waiver of the Issuer’s limitations on liability contained in Section 768.28, Florida By: Statutes, or other statutes or law. Title:

SECTION 17. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the City, the County, the West Developer, the Disclosure Dissemination Agent, the Underwriter, and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 18. Governing Law. This Disclosure Agreement shall be governed by the laws of the State of Florida. I-20

SECTION 19. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank] EXHIBIT A EXHIBIT B

NAME AND CUSIP NUMBERS OF BONDS NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Midtown Miami Community Development District Name of Issuer: Midtown Miami Community Development District

Obligated Person(s): Midtown Miami Community Development District, Midtown Obligated Person(s): Midtown Miami Community Development District, Midtown Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Florida (with respect to the Series 2004 A Bonds only) and Miami- Florida (with respect to the Series 2004 A Bonds only) and Miami- Dade County (with respect to the Series 2004 A Bonds only) Dade County (with respect to the Series 2004 A Bonds only)

Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A and Special Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A and Special Assessment Bonds Series 2004B Assessment Bonds Series 2004B

Date of Issuance: July 28, 2004 Date of Issuance: ______, 2004

Date of Limited Offering NOTICE IS HEREBY GIVEN that the West Developer has not provided Information Memoranda: July 16, 2004 with respect to the above-named Bonds as required by the Disclosure Agreement, dated as of ______, 2004, between the Issuer and Digital Assurance Certification, L.L.C., CUSIP Number: as Disclosure Dissemination Agent. The West Developer has notified the Disclosure Dissemination Agent that it anticipates that the Information will be filed by ______.

Dated: ______

Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the

I-21 Issuer

cc: Issuer Obligated Person EXHIBIT C

Development Area 2 - Shops at Midtown Miami Development Plan Summary and Status Update Tract Planned % Imp. SF Const. Land SF Development w/Contract / Const. Start Finish Est. Const. Costs Est. Finished ILA Stage Tract (2) Owner (3) (4) Component (5) Description and Status (5) Lease / Open (7) Date (7) Date (8) (9) Value (10) Triggers (11)

A (BVW) -- 393,908 -- North Block (“NB”) - A multi-elevation ------tract with different owners and planned development as summarized below.

DDR DDR Retail 323,946 square feet(GLA) planned. July 2004 October $50,000,000(12) $110,000,000(12) ILA Stage 1 Facility 2006 Performance Level re: Retail

NB Development Apartments 42 residential rental units that wraps the $3,641,400 $3,641,400 ILA Stage 2 LLC District parking (13) Performance Level re: Apartments

District Public Parking 3 level-parking garage consisting of 1,799 July 2004 April (14) (14) ILA Stage 1 Structure planned spaces on the second, third and 2006 Performance fourth levels above the ground floor retail Level re: District space.

C (BVW) -- 170,607 -- Mid-Block West (“MBW”) – A multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 82,849 square feet (GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

District Midblock Plaza Public Open Space July 2004 April (14) (14) ILA Stage 1 2006 Performance Level re: Public Plaza

D (BVW) -- 96,474 -- Mid-Block East (“MBE”) – A multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 31,920 square feet (GLA) planned. August May 2006 (12) (12) ILA Stage 1 Facility 2005 Performance Level re: Retail

CEB Retail 25,420 square feet (GLA) planned. January May 2006 $3,000,000 $3,000,000 ILA Stage 1 Development LLC 2005 Performance Level re: Retail

Tract Planned % Imp. SF Const. Land SF Development w/Contract / Const. Start Finish Est. Const. Costs Est. Finished ILA Stage Tract (2) Owner (3) (4) Component (5) Description and Status (5) Lease / Open (7) Date (7) Date (8) (9) Value (10) Triggers (11)

District Parking 331 planned Parking Spaces January May 2006 (14) (14) ILA Stage 1 Structure 2005 Performance Level re: Parking

EB Development Apartments 25 units wrapping the MBE Parking January May 2006 $2,167,500 $2,167,500 ILA Stage 2 LLC Garage (approximately 30,000 square feet) 2005 Performance Level re: 7-story tower planned for 167 units above Apartments the MBE Parking Garage $14,478,900 $14,478,900

E (BVW) -- 213,601 -- South Block North (“SBN”) – A Multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 27,007 square feet (GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

District Parking 1,066 planned Parking Spaces adjacent to February March (14) (14) ILA Stage 1 Structure (east) the SBN retail. 2005 2006 Performance Level re: Parking

SEB Development Apartments 163 units adjacent to (to the east) the SBN August December $14,132,100 $14,132,100 ILA Stage 2 LLC Parking Garage (12-15 stories) 2006 2007 Performance Level re: Apartments

F (BVW) -- 213,601 -- South Block South (“SBS”) – A Multi------elevation tract with different owners and planned development as summarized below.

DDR DDR Retail 134,819 square feet(GLA) planned. March 2005 March (12) (12) ILA Stage 1 Facility 2006 Performance Level re: Retail

G DDR 12,048 N/A Not planned for development. Parcel ------N/A (BVW) deemed undevelopable in the assessment methodology.

H DDR 7,136 N/A Not planned for development. Parcel ------N/A (BVW) deemed undevelopable in the assessment methodology.

I-22 City

NOTES: (1) The portions of this Table which show DDR as “Owner” is to be updated by DDR pursuant to the DDR Continuing Disclosure Agreement – “See Appendix I - CONTINUING DISCLOSURE AGREEMENT DDR Continuing Disclosure Agreement.” The portions of this Table which show the various Midtown West Partnership entities as “Owner” is to be updated by Midtown Partners pursuant to the Midtown Partners Continuing Disclosure Agreement – “See Appendix I - Midtown Miami Continuing Disclosure Agreement.” Midtown Miami Community Development District (2) Tract designations as shown in the figure above pursuant to the Buena Vista West (“BVW”) Plat. See “Entitlements” below. (3) See “Development Area 2 – Property Owners” above. (Miami-Dade County, Florida) (4) As shown on the BVW Plats. Special Assessment and Revenue Bonds, Series 2004A (5) As currently planned by either DDR, Midtown West Partnership or the District. This is subject to change, including but not limited to the scope or timing of the development. (6) A percentage of the total usable improved evidenced with either (a) executed leases pertaining to retail, or (b) executed leases for apartment units. This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and (7) As estimated by DDR or Midtown West Partnership, respectively. Any date noted with “actual” represents the proposed development received an approved building permit from the City of Miami. See “Development Area 2 – Marketing Plan” herein. delivered as of July 28, 2004 by Midtown Miami Community Development District (the (8) As estimated by DDR or Midtown West Partnership, respectively. Any date noted with “actual” represents the date a certificate of occupancy, as defined “Issuer”), The City of Miami, Florida (the “City”) and Digital Assurance Certification, L.L.C. under the Florida building code, was received from the City of Miami for the proposed development. (9) As estimated by DDR or Midtown West Partnership, respectively. In some cases, the estimate is based upon estimated value set forth in the Tax Increment (the “Disclosure Dissemination Agent” or “DAC”) in connection with the issuance by the Issuer Revenue Report prepared in connection with the Series 2004A Bonds. This reflects the vertical construction costs only and excludes land costs. (10) Finished value represents DDR’s or Midtown West Partnership’s estimate of value for the planned improvements based on the proposed development. In of its $73,580,000 aggregate principal amount of Special Assessment and Revenue Bonds, Series some cases, the estimate is based upon estimated value set forth in the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. 2004A (the “Bonds”). The Bonds are being issued pursuant to a Master Trust Indenture dated as Any value noted with “actual” represents a reasonable market accepted approach for income producing property. Actual assessed value shall be an acceptable value in this column for any building that has received a certificate of occupancy, as defined under the Florida building code, from the City of Miami and the of July 1, 2004, as supplemented by a First Supplemental Trust Indenture dated as of July 1, County Tax Assessor has adjusted the values to reflect the improved status of the tract. Any such value shall be noted with “Actual AV.” 2004 (collectively, the “Indenture”) each between the Issuer and Wachovia Bank, National (11) This column monitors the development that DDR or Midtown West Partnership plan to meet their performance obligations under the ILA. See “THE FINANCING PLAN”, “SECURITY FOR THE BONDS – Interlocal Agreement” and “Appendix B - Interlocal Agreement.” Association, as Trustee. (12) Amount for entire DDR Retail Facility is shown at Tract A. (13) $2,650,000 of the Construction Cost was credited against purchase price of land acquired by DDR from Biscayne. The estimated total cost and finished value is based upon the Tax Increment Revenue Report prepared in connection with the Series 2004A Bonds. See “Development Area 2 – Development Plan,” This Disclosure Agreement is being executed and delivered in order to comply with the under this heading. (14) See the “PLAN OF FINANCE,” herein. requirements of Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934 (the “Rule”), and is for the benefit of the holders and Beneficial owners (as hereinafter defined) of the Bonds.

SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure

I-23 Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the following meanings:

“Annual Report” means an Annual Report described in and consistent with Section 3 of this Disclosure Agreement.

“Annual Filing Date” means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the Repositories.

“Annual Financial Information” means annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement.

“Audited Financial Statements” means the financial statements (if any) of the City for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement.

“Bonds” means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto.

“Certification” means a written certification of compliance signed by the applicable Disclosure Representative stating that the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice, as the case may be, delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or 2. FT Interactive Data Notice Event notice, as the case may be, required to be submitted to the Repositories under this Attn: NRMSIR Disclosure Agreement. A Certification shall accompany each such document submitted to the 100 Williams Street Disclosure Dissemination Agent and include the full name of the Bonds and the 9-digit CUSIP New York, New York 10038 numbers for all Bonds to which the document applies. (212) 771-6999 (phone) (212) 771-7390 (fax or secondary market information) “Developers” means, collectively, Midtown Partners, LLC and DDR Miami Avenue, (212) 771-7391 (fax for primary market information) L.L.C. Email: [email protected]

“Disclosure Representative” means as to the City, such person(s) as the City shall 3. Bloomberg Municipal Repository designate in writing to the Disclosure Dissemination Agent from time to time as the person(s) 100 Business Park Drive responsible for providing Information to the Disclosure Dissemination Agent. Skillman, New Jersey 08558 (609) 279-3225 (phone) “Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C., acting (609) 279-5962 (fax) in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Email: [email protected] Dissemination Agent designated in writing by the Issuer pursuant to Section 10 hereof. 4. Standard & Poor’s Securities Evaluations, Inc. “Holder” means any person (a) having the power, directly or indirectly, to vote or consent 55 Water Street with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds 45th Floor through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds New York, New York 10041 for federal income tax purposes. (212) 438-4595 (phone) (212) 438-3975 (fax) “Information” means the Annual Financial Information, the Audited Financial Statements Email: [email protected] (if any), the Notice Event notices, and the Voluntary Reports. “Official Statement” means that Limited Offering Memorandum dated July 16, 2004 “Material Event Notice” means a notice required to be filed by the City under paragraph prepared in connection with the issuance of the Bonds. I-24 (b)(5)(i)(C) of the Rule. “Repository” means the MSRB, each National Repository and the State Depository (if “MSRB” means the Municipal Securities Rulemaking Board established pursuant to any). Section 15B(b)(1) of the Securities Exchange Act of 1934. “State Depository” means any public or private depository or entity designated by the “National Repository” means any Nationally Recognized Municipal Securities State of Florida as a state information depository (if any) for the purpose of the Rule. The list of Information Repository for purposes of the Rule. The list of National Repositories maintained by state information depositories maintained by the United States Securities and Exchange the United States Securities and Exchange Commission shall be conclusive for purposes of Commission shall be conclusive as to the existence of a State Depository. determining National Repositories. Currently, the following are National Repositories: “Voluntary Report” means the information provided to the Disclosure Dissemination 1. DPC Data Inc. Agent by the Issuer pursuant to Section 8. One Executive Drive Fort Lee, New Jersey 07024 SECTION 2. Provision of Annual Reports. (201) 346-0701 (phone) (201) 947-0107 (fax) (a) The City shall provide, annually, an electronic copy of the Annual Report and Email: [email protected] Certification to the Disclosure Dissemination Agent, not later than 30 days before the Annual Filing Date. The Annual Filing Date is June 30, 2005, and each anniversary thereof. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Agreement. (b) If on the fifteenth (15th) day before the Annual Filing Date, the Disclosure Any or all of the items listed above may be included by specific reference from other Dissemination Agent has not received a copy of the Annual Report and Certification, the documents, including official statements of debt issues with respect to which the City is an Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in “obligated person” (as defined by the Rule), which have been previously filed with each of the writing (which may be by e-mail) to remind the City of its undertaking to provide the Annual National Repositories or the Securities and Exchange Commission. If the document incorporated Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either by reference is a final official statement, it must be available from the MSRB. The City will (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and clearly identify each such document so incorporated by reference. the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the City will not be able to file the SECTION 4. Reporting of Notice Events. The City shall provide the Issuer and the Annual Report within the time required under this Disclosure Agreement, state the date by which Disclosure Dissemination Agent a copy of any Material Event Notice filed with respect to any the Annual Report for such year will be provided and instruct the Disclosure Dissemination debt of the City. Agent that a Notice Event as described in Section 4(a)(xii) has occurred and to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure substantially the form attached as Exhibit B. Dissemination Agent, including but not limited to annual reports, documents incorporated by reference to the annual reports, audited financial statements, and voluntary reports filed pursuant (c) If the Disclosure Dissemination Agent has not received an Annual Report and to Section 8(a), the City shall indicate the full name of the bonds and the 9-digit CUSIP numbers Certification by 12:00 noon on the first business day following the Annual Filing Date for the for the bonds as to which the provided information relates. Annual Report, a Notice Event described in Section 4(a)(xii) shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to each SECTION 6. [Intentionally omitted.] National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. SECTION 7. [Intentionally omitted.]

(d) If Audited Financial Statements of the City are prepared but not available prior to SECTION 8. Voluntary Reports. the Annual Filing Date, the City shall, when the Audited Financial Statements are available, (a) The City may instruct the Disclosure Dissemination Agent to file information provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, with the Repositories, from time to time pursuant to a Certification of the Disclosure accompanied by a Certificate, for filing with each National Repository and the State Depository Representative accompanying such information (a “Voluntary Report”).

I-25 (if any). (b) Nothing in this Disclosure Agreement shall be deemed to prevent the City from (e) The City may adjust the Annual Filing Date upon a change of its fiscal year by disseminating any other information through the Disclosure Dissemination Agent using the providing written notice of such change and the new Annual Filing Date to the Disclosure means of dissemination set forth in this Disclosure Agreement or including any other Dissemination Agent and the Repositories, provided that the period between the existing Annual information in any Annual Report, Annual Financial Statement, or Voluntary Report, in addition Filing Date and new Annual Filing Date shall not exceed one year. to that required by this Disclosure Agreement. If the City chooses to include any information in SECTION 3. Content of Annual Reports. any Annual Report, Annual Financial Statement, or Voluntary Report in addition to that which is specifically required by this Disclosure Agreement, the City shall not have any obligation under (a) Each Annual Report shall contain Annual Financial Information with respect to this Disclosure Agreement to update such information or include it in any future Annual Report, the City’s non ad valorem tax revenues including an update of information contained in the Annual Financial Statement or Voluntary Report. Official Statement in Appendix F under the caption “CURRENT FINANCIAL STATUS OF THE CITY – Non Ad Valorem Revenues.” SECTION 9. Termination of Reporting Obligation. The obligations of the City and/or the Disclosure Dissemination Agent, as applicable, under this Disclosure Agreement shall (b) Audited Financial Statements prepared in accordance with generally accepted terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds, accounting principals (“GAAP”), as the same may be modified from time to time, as described in when the City is no longer an obligated person with respect to the Bonds, or upon delivery by the the Official Statement will be included in the Annual Report. However, if Audited Financial Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally Statements are not available by the Annual Filing Date, unaudited financial statements, prepared recognized bond counsel to the effect that continuing disclosure is no longer required. in accordance with “GAAP” as the same may be modified from time to time, as described in the Official Statement will be included in the Annual Report. Audited Financial Statements will be SECTION 10. Disclosure Dissemination Agent. The City has appointed Digital provided pursuant to Section 2(d). Assurance Certification, L.L.C. as Disclosure Dissemination Agent under this Disclosure Agreement. The City or DAC may, upon thirty days written notice to the other, terminate this Disclosure Agreement. Upon termination of DAC’s services as Disclosure Dissemination Agent, whether by notice of the City or DAC, the City agrees to appoint a successor Disclosure of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been Dissemination Agent or, alternatively, agrees to assume all responsibilities of Disclosure effective on the date hereof but taking into account any subsequent change in or official Dissemination Agent under this Disclosure Agreement for the benefit of the Holders of the interpretation of the Rule. Bonds. Notwithstanding any replacement or appointment of a successor, the City shall remain liable until payment in full for any and all sums owed and payable to the Disclosure Notwithstanding the preceding paragraph, upon approval by the Issuer, which approval Dissemination Agent hereunder. will not be unreasonably withheld, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and SECTION 11. Remedies in Event of Default. In the event of a failure of the City or the interpretations of the provisions of the Rule as announced by the Securities and Exchange Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, the Commission from time to time by giving not less than 20 days written notice of the intent to do Holders’ rights to enforce the provisions of this Agreement shall be limited solely to a right, by so together with a copy of the proposed amendment to the Issuer and the Developers. action in mandamus or for specific performance, to compel performance of the applicable party’s obligation under this Disclosure Agreement. Any failure by a party to perform in accordance SECTION 14. No Personal Liability. No covenant, stipulation, obligation or agreement with this Disclosure Agreement shall not constitute a default on the Bonds or under any other of the Issuer contained in this Disclosure Agreement shall be deemed to be a covenant, document relating to the Bonds, and all rights and remedies shall be limited to those expressly stipulation, obligation or agreement of any present or future officer, agent or employee of the stated herein. Issuer in other than that person’s official capacity.

SECTION 12. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. SECTION 15. Severability. In case any section or provision of this Disclosure Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof (a) The Disclosure Dissemination Agent shall have only such duties as are made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or obligation to deliver the information at the times and with the contents described herein shall be any other section or provision thereof or any other covenant, stipulation, obligation, agreement, limited to the extent the Issuer has provided such information to the Disclosure Dissemination act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall extent that such remainder or section or provision or other covenant, stipulation, obligation, have no duty with respect to the content of any disclosures or notice made pursuant to the terms agreement, act or action, or part thereof is wholly dependent for its operation on the provision hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify determined to be invalid), which shall be construed and enforced as if such illegal or invalid any Information or any other information, disclosures or notices provided to it by the Issuer and portion were not contained therein, nor shall such illegality or invalidity of any application I-26 shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the thereof affect any legal and valid application thereof, and each such section, provision, covenant, Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, the Issuer’s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to operative, made, entered into or taken in the manner and to the full extent permitted by law. determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this SECTION 16. Sovereign Immunity. The Disclosure Dissemination Agent agrees that Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon nothing in this Disclosure Agreement shall constitute or be construed as a waiver of the Issuer’s certifications of the Issuer at all times. or the City’s limitations on liability contained in Section 768.28, Florida Statutes, or other statutes or law. (b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or SECTION 17. Beneficiaries. This Disclosure Agreement shall inure solely to the controversy, or question or doubt as to the construction of any of the provisions hereof or its benefit of the Issuer, the City, the Developers, the Disclosure Dissemination Agent, the respective duties hereunder, and neither of them shall incur any liability and shall be fully underwriter, and the Holders from time to time of the Bonds, and shall create no rights in any protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and other person or entity. expenses of such counsel shall be payable by the Disclosure Dissemination Agent. SECTION 18. Governing Law. This Disclosure Agreement shall be governed by the SECTION 13. Amendment; Waiver. Notwithstanding any other provision of this laws of the State of Florida. Disclosure Agreement, the City and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such SECTION 19. Counterparts. This Disclosure Agreement may be executed in several amendment or waiver is supported by an opinion of counsel expert in federal securities laws counterparts, each of which shall be an original and all of which shall constitute but one and the acceptable to the City and the Disclosure Dissemination Agent to the effect that such amendment same instrument. or waiver does not materially impair the interests of Holders of the Bonds and would not, in and EXHIBIT A

The Disclosure Dissemination Agent, the City and the Issuer have caused this Continuing NAME AND CUSIP NUMBERS OF BONDS Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. Name of Issuer: Midtown Miami Community Development District Obligated Person(s): Midtown Miami Community Development District, Midtown DIGITAL ASSURANCE CERTIFICATION, MIDTOWN MIAMI COMMUNITY Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, L.L.C, as Disclosure Dissemination Agent DEVELOPMENT DISTRICT, as Issuer Florida and Miami-Dade County Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A By: By: Date of Issuance: July 28, 2004 Title: Chairman Date of Limited Offering CITY OF MIAMI, FLORIDA Memorandum: July 16, 2004

CUSIP Number: By: Title: I-27 EXHIBIT B County NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT CONTINUING DISCLOSURE AGREEMENT Name of Issuer: Midtown Miami Community Development District Midtown Miami Community Development District Obligated Person(s): Midtown Miami Community Development District, Midtown (Miami-Dade County, Florida) Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Florida Special Assessment and Revenue Bonds, Series 2004A and Miami-Dade County This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A delivered as of July 28, 2004 by Midtown Miami Community Development District (the “Issuer”), Miami-Dade County, Florida (the “County”) and Digital Assurance Certification, Date of Issuance: July 28, 2004 L.L.C. (the “Disclosure Dissemination Agent” or “DAC”) in connection with the issuance by the Issuer of its $73,580,000 aggregate principal amount of Special Assessment and Revenue Bonds, NOTICE IS HEREBY GIVEN that the City has not provided its Annual Report with respect Series 2004A (the “Bonds”). The Bonds are being issued pursuant to a Master Trust Indenture to the above-named Bonds as required by the Disclosure Agreement, dated as of dated as of July 1, 2004, as supplemented by a First Supplemental Trust Indenture dated as of ______, 2004, between the Issuer and Digital Assurance Certification, L.L.C., as July 1, 2004 (collectively, the “Indenture”) each between the Issuer and Wachovia Bank, Disclosure Dissemination Agent. The City has notified the Disclosure Dissemination Agent that it National Association, as Trustee. anticipates that the Annual Report will be filed by ______. This Disclosure Agreement is being executed and delivered in order to comply with the Dated: ______requirements of Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934 (the Digital Assurance Certification, L.L.C., as Disclosure “Rule”), and is for the benefit of the holders and Beneficial owners (as hereinafter defined) of the Dissemination Agent, on behalf of the Issuer Bonds. SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure Agreement shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terms shall have the

I-28 cc: Issuer Obligated Person following meanings: “Annual Report” means an Annual Report described in and consistent with Section 3 of this Disclosure Agreement.

“Annual Filing Date” means the date, set in Sections 2(a) and 2(f), by which the Annual Report is to be filed with the Repositories.

“Annual Financial Information” means annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Agreement.

“Audited Financial Statements” means the financial statements (if any) of the County for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Agreement.

“Bonds” means the bonds as listed on the attached Exhibit A, with the 9-digit CUSIP numbers relating thereto.

“Certification” means a written certification of compliance signed by the applicable Disclosure Representative stating that the Annual Report, Audited Financial Statements, Voluntary Report or Notice Event notice, as the case may be, delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Voluntary Report or 2. FT Interactive Data Notice Event notice, as the case may be, required to be submitted to the Repositories under this Attn: NRMSIR Disclosure Agreement. A Certification shall accompany each such document submitted to the 100 Williams Street Disclosure Dissemination Agent and include the full name of the Bonds and the 9-digit CUSIP New York, New York 10038 numbers for all Bonds to which the document applies. (212) 771-6999 (phone) (212) 771-7390 (fax or secondary market information) “Developers” means, collectively, Midtown Partners, LLC and DDR Miami Avenue, (212) 771-7391 (fax for primary market information) L.L.C. Email: [email protected]

“Disclosure Representative” means as to the County, such person(s) as the County shall 3. Bloomberg Municipal Repository designate in writing to the Disclosure Dissemination Agent from time to time as the person(s) 100 Business Park Drive responsible for providing Information to the Disclosure Dissemination Agent. Skillman, New Jersey 08558 (609) 279-3225 (phone) “Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C., acting (609) 279-5962 (fax) in its capacity as Disclosure Dissemination Agent hereunder, or any successor Disclosure Email: [email protected] Dissemination Agent designated in writing by the Issuer pursuant to Section 10 hereof. 4. Standard & Poor’s Securities Evaluations, Inc. “Holder” means any person (a) having the power, directly or indirectly, to vote or consent 55 Water Street with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds 45th Floor through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds New York, New York 10041 for federal income tax purposes. (212) 438-4595 (phone) (212) 438-3975 (fax) “Information” means the Annual Financial Information, the Audited Financial Statements Email: [email protected] (if any), the Notice Event notices, and the Voluntary Reports. “Official Statement” means that Limited Offering Memorandum dated July 16, 2004 “Material Event Notice” means a notice required to be filed by the City under paragraph prepared in connection with the issuance of the Bonds. I-29 (b)(5)(i)(C) of the Rule. “Repository” means the MSRB, each National Repository and the State Depository (if “MSRB” means the Municipal Securities Rulemaking Board established pursuant to any). Section 15B(b)(1) of the Securities Exchange Act of 1934. “State Depository” means any public or private depository or entity designated by the “National Repository” means any Nationally Recognized Municipal Securities State of Florida as a state information depository (if any) for the purpose of the Rule. The list of Information Repository for purposes of the Rule. The list of National Repositories maintained by state information depositories maintained by the United States Securities and Exchange the United States Securities and Exchange Commission shall be conclusive for purposes of Commission shall be conclusive as to the existence of a State Depository. determining National Repositories. Currently, the following are National Repositories: “Voluntary Report” means the information provided to the Disclosure Dissemination 1. DPC Data Inc. Agent by the Issuer pursuant to Section 8. One Executive Drive Fort Lee, New Jersey 07024 SECTION 2. Provision of Annual Reports. (201) 346-0701 (phone) (201) 947-0107 (fax) (a) The County shall provide, annually, an electronic copy of the Annual Report and Email: [email protected] Certification to the Disclosure Dissemination Agent, not later than 30 days before the Annual Filing Date. The Annual Filing Date is June 30, 2005, and each anniversary thereof. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Agreement. (b) If on the fifteenth (15th) day before the Annual Filing Date, the Disclosure Any or all of the items listed above may be included by specific reference from other Dissemination Agent has not received a copy of the Annual Report and Certification, the documents, including official statements of debt issues with respect to which the County is an Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in “obligated person” (as defined by the Rule), which have been previously filed with each of the writing (which may be by e-mail) to remind the County of its undertaking to provide the Annual National Repositories or the Securities and Exchange Commission. If the document incorporated Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either by reference is a final official statement, it must be available from the MSRB. The County will (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and clearly identify each such document so incorporated by reference. the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the County will not be able to file the SECTION 4. Reporting of Notice Events. The City shall provide the Issuer and the Annual Report within the time required under this Disclosure Agreement, state the date by which Disclosure Dissemination Agent a copy of any Material Event Notice filed with respect to any the Annual Report for such year will be provided and instruct the Disclosure Dissemination debt of the City. Agent that a Notice Event as described in Section 4(a)(xii) has occurred and to immediately send a notice to each National Repository or the MSRB and the State Depository (if any) in SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure substantially the form attached as Exhibit B. Dissemination Agent, including but not limited to annual reports, documents incorporated by reference to the annual reports, audited financial statements, and voluntary reports filed pursuant (c) If the Disclosure Dissemination Agent has not received an Annual Report and to Section 8(a), the County shall indicate the full name of the bonds and the 9-digit CUSIP Certification by 12:00 noon on the first business day following the Annual Filing Date for the numbers for the bonds as to which the provided information relates. Annual Report, a Notice Event described in Section 4(a)(xii) shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to each SECTION 6. [Intentionally omitted.] National Repository or the MSRB and the State Depository (if any) in substantially the form attached as Exhibit B. SECTION 7. [Intentionally omitted.]

(d) If Audited Financial Statements of the County are prepared but not available prior SECTION 8. Voluntary Reports. to the Annual Filing Date, the County shall, when the Audited Financial Statements are (a) The County may instruct the Disclosure Dissemination Agent to file information available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, with the Repositories, from time to time pursuant to a Certification of the Disclosure accompanied by a Certificate, for filing with each National Repository and the State Depository Representative accompanying such information (a “Voluntary Report”).

I-30 (if any). (b) Nothing in this Disclosure Agreement shall be deemed to prevent the County (e) The County may adjust the Annual Filing Date upon a change of its fiscal year by from disseminating any other information through the Disclosure Dissemination Agent using the providing written notice of such change and the new Annual Filing Date to the Disclosure means of dissemination set forth in this Disclosure Agreement or including any other Dissemination Agent and the Repositories, provided that the period between the existing Annual information in any Annual Report, Annual Financial Statement, or Voluntary Report, in addition Filing Date and new Annual Filing Date shall not exceed one year. to that required by this Disclosure Agreement. If the County chooses to include any information SECTION 3. Content of Annual Reports. in any Annual Report, Annual Financial Statement, or Voluntary Report, in addition to that which is specifically required by this Disclosure Agreement, the County shall not have any (a) Each Annual Report shall contain Annual Financial Information with respect to obligation under this Disclosure Agreement to update such information or include it in any future the County’s non ad valorem tax revenues including an update of information contained in the Annual Report, Annual Financial Statement or Voluntary Report. Official Statement in Appendix G under the caption “NON AD VALOREM REVENUES.” SECTION 9. Termination of Reporting Obligation. The obligations of the County (b) Audited Financial Statements prepared in accordance with generally accepted and/or the Disclosure Dissemination Agent, as applicable, under this Disclosure Agreement shall accounting principals (“GAAP”), as the same may be modified from time to time, as described in terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds, the Official Statement will be included in the Annual Report. However, if Audited Financial when the County is no longer an obligated person with respect to the Bonds, or upon delivery by Statements are not available by the Annual Filing Date, unaudited financial statements, prepared the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally in accordance with “GAAP” as the same may be modified from time to time, as described in the recognized bond counsel to the effect that continuing disclosure is no longer required. Official Statement will be included in the Annual Report. Audited Financial Statements will be provided pursuant to Section 2(d). SECTION 10. Disclosure Dissemination Agent. The Issuer has appointed Digital Assurance Certification, L.L.C. as Disclosure Dissemination Agent under this Disclosure Agreement. The Issuer or DAC may, upon thirty days written notice to the other, terminate this Disclosure Agreement. Upon termination of DAC’s services as Disclosure Dissemination Agent, whether by notice of the Issuer or DAC, the Issuer agrees to appoint a successor not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or Disclosure Dissemination Agent or, alternatively, agrees to assume all responsibilities of waiver had been effective on the date hereof but taking into account any subsequent change in or Disclosure Dissemination Agent under this Disclosure Agreement for the benefit of the Holders official interpretation of the Rule. of the Bonds. Notwithstanding any replacement or appointment of a successor, the Issuer shall remain liable until payment in full for any and all sums owed and payable to the Disclosure Notwithstanding the preceding paragraph, upon approval by the Issuer, which approval Dissemination Agent hereunder. will not be unreasonably withheld, the Disclosure Dissemination Agent shall have the right to adopt amendments to this Disclosure Agreement necessary to comply with modifications to and SECTION 11. Remedies in Event of Default. In the event of a failure of the County or interpretations of the provisions of the Rule as announced by the Securities and Exchange the Disclosure Dissemination Agent to comply with any provision of this Disclosure Agreement, Commission from time to time by giving not less than 20 days written notice of the intent to do the Holders’ rights to enforce the provisions of this Agreement shall be limited solely to a right, so together with a copy of the proposed amendment to the Issuer and the Developers. by action in mandamus or for specific performance, to compel performance of the applicable party’s obligation under this Disclosure Agreement. Any failure by a party to perform in SECTION 14. No Personal Liability. No covenant, stipulation, obligation or agreement accordance with this Disclosure Agreement shall not constitute a default on the Bonds or under of the Issuer contained in this Disclosure Agreement shall be deemed to be a covenant, any other document relating to the Bonds, and all rights and remedies shall be limited to those stipulation, obligation or agreement of any present or future officer, agent or employee of the expressly stated herein. Issuer in other than that person’s official capacity.

SECTION 12. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. SECTION 15. Severability. In case any section or provision of this Disclosure Agreement, or any covenant, stipulation, obligation, agreement, act or action, or part thereof (a) The Disclosure Dissemination Agent shall have only such duties as are made, assumed, entered into, or taken thereunder or any application thereof, is for any reasons specifically set forth in this Disclosure Agreement. The Disclosure Dissemination Agent’s held to be illegal or invalid, such illegality or invalidity shall not affect the remainder thereof or obligation to deliver the information at the times and with the contents described herein shall be any other section or provision thereof or any other covenant, stipulation, obligation, agreement, limited to the extent the Issuer has provided such information to the Disclosure Dissemination act or action, or part thereof made, assumed, entered into, or taken thereunder (except to the Agent as required by this Disclosure Agreement. The Disclosure Dissemination Agent shall extent that such remainder or section or provision or other covenant, stipulation, obligation, have no duty with respect to the content of any disclosures or notice made pursuant to the terms agreement, act or action, or part thereof is wholly dependent for its operation on the provision hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify determined to be invalid), which shall be construed and enforced as if such illegal or invalid any Information or any other information, disclosures or notices provided to it by the Issuer and portion were not contained therein, nor shall such illegality or invalidity of any application I-31 shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Holders of the thereof affect any legal and valid application thereof, and each such section, provision, covenant, Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for stipulation, obligation, agreement, act or action, or part thereof shall be deemed to be effective, the Issuer’s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to operative, made, entered into or taken in the manner and to the full extent permitted by law. determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Issuer has complied with this SECTION 16. Sovereign Immunity. The Disclosure Dissemination Agent agrees that Disclosure Agreement. The Disclosure Dissemination Agent may conclusively rely upon nothing in this Disclosure Agreement shall constitute or be construed as a waiver of the Issuer’s certifications of the Issuer at all times. or the County’s limitations on liability contained in Section 768.28, Florida Statutes, or other statutes or law. (b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or SECTION 17. Beneficiaries. This Disclosure Agreement shall inure solely to the controversy, or question or doubt as to the construction of any of the provisions hereof or its benefit of the Issuer, the Developers, the Disclosure Dissemination Agent, the underwriter, and respective duties hereunder, and neither of them shall incur any liability and shall be fully the Holders from time to time of the Bonds, and shall create no rights in any other person or protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and entity. expenses of such counsel shall be payable by the Disclosure Dissemination Agent. SECTION 18. Governing Law. This Disclosure Agreement shall be governed by the SECTION 13. Amendment; Waiver. Notwithstanding any other provision of this laws of the State of Florida. Disclosure Agreement, the County and the Disclosure Dissemination Agent may amend this Disclosure Agreement and any provision of this Disclosure Agreement may be waived, if such SECTION 19. Counterparts. This Disclosure Agreement may be executed in several amendment or waiver is supported by an opinion of counsel expert in federal securities laws counterparts, each of which shall be an original and all of which shall constitute but one and the acceptable to the County and the Disclosure Dissemination Agent to the effect that such same instrument. amendment or waiver does not materially impair the interests of Holders of the Bonds and would The Disclosure Dissemination Agent, the County and the Issuer have caused this EXHIBIT A Continuing Disclosure Agreement to be executed, on the date first written above, by their respective officers duly authorized. NAME AND CUSIP NUMBERS OF BONDS Name of Issuer: Midtown Miami Community Development District DIGITAL ASSURANCE CERTIFICATION, MIDTOWN MIAMI COMMUNITY L.L.C, as Disclosure Dissemination Agent DEVELOPMENT DISTRICT, as Issuer Obligated Person(s): Midtown Miami Community Development District, Midtown Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Florida and Miami-Dade County By: By: Title: Chairman Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A Date of Issuance: July 28, 2004 MIAMI-DADE COUNTY, FLORIDA Date of Limited Offering Memorandum: July 16, 2004 By: Title: CUSIP Number: I-32 EXHIBIT B

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT

Name of Issuer: Midtown Miami Community Development District

Obligated Person(s): Midtown Miami Community Development District, Midtown Partners, LLC, DDR Miami Avenue, LLC, the City of Miami, Florida and Miami-Dade County

Name of Bond Issue: Special Assessment and Revenue Bonds, Series 2004A

Date of Issuance: July 28, 2004

NOTICE IS HEREBY GIVEN that the County has not provided an Annual Report with respect to the above-named Bonds as required by the Disclosure Agreement, dated as of ______, 2004, between the Issuer and Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent. The County has notified the Disclosure Dissemination Agent that it anticipates that the Annual Report will be filed by ______.

Dated: ______

Digital Assurance Certification, L.L.C., as Disclosure Dissemination Agent, on behalf of the Issuer [THIS PAGE INTENTIONALLY LEFT BLANK]

I-33 cc: Issuer Obligated Person [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX J

APPRAISAL [THIS PAGE INTENTIONALLY LEFT BLANK] Joseph J. Blake and Associates, Inc. Real Estate Appraisers and Consultants 255 Alhambra Circle, Suite 800 Miami, Florida 33134 305-448-1663 305-448-7077 Fax

May 17, 2004

Mr. Robert Burch MARKET STUDY & APPRAISAL REPORT Bank of America Securities, LLC FOR BUENA VISTA YARDS TH 250 South park Avenue, Suite 400 LOCATED AT NE 36 STREET & Winter Park, FL 32789 NORTH MIAMI AVENUE, MIAMI, MIAMI-DADE COUNTY, FLORIDA RE: Market Study and Appraisal report of Buena Vista Yards located at NE 36th Street and North Miami Avenue Miami, Miami-Dade County, Florida

Dear Mr. Burch: At your request, we performed a market study and appraisal report for the above-referenced property as of April 10, 2004. This report and our conclusions have been based upon an inspection of the property and on research into various factors that tend to influence the market within the area as well as values within the area. FOR: The site is known as the Buena Vista Yards, and is bordered by NE 36th Street to the north, Miami J-1 th Mr. Robert Burch Avenue to the west, NE 29 Street to the south and the Florida East Coast Railroad (FEC) to the Bank of America Securities, LLC east. 250 South Park Avenue, Suite 400 Winter Park Avenue, Suite 400 FEC's Buena Vista Yards is one of the largest undeveloped land parcels in the City of Miami. The property is located just south of I-195 and Miami's Design District, midway between Miami Winter Park, FL 32789 International Airport and Miami Beach. It is bordered by North Miami Avenue, NE 29th Street, NE 36th Street and the FEC Rail right-of-way.

The site is currently used for the storage of containers and has been reviewed for hazardous materials. The site can be considered vacant and ready for redevelopment.

The subject is the focus of a development that would transform it from a vacant parcel of land to an urban neighborhood. Main entrances are to be created at NE 1st Avenue on NE 36th Street, NE 1st BY: Place on NE 36th Street, NE 1st Place on NE 29th Street, at NE 34th Street on both the east and west edges, at NE 31st Street on Miami Avenue as well as at NE 32nd Street on Miami Avenue. A major Joseph J. Blake and Associates, Inc. new landscaped boulevard is to link the NE 1st Place entrance on NE 29th Street to the one on NE 255 Alhambra Circle, Suite 800 36th Street, as well as NE 31st Street, NE 32nd Street and NE 34th Street. This boulevard is to be the Miami, Florida 33134 centerpiece of the development and form the major entrance face for a series of residential parcels that will be located along the eastern edge of the site. Residential uses are to be located on the east half of the property fronting the FEC Rail Right-of-way. This area will be known as “Midtown East”. The west side of the property fronting Miami Avenue is proposed for mixed-use commercial development. This area will be known as “Buena Vista West”.

Corporate Headquarters: 100 Jericho Quadrangle, Suite 327, Jericho, New York 11753 (516) 827-0222 Regional Headquarters: Boston, Chicago, Dallas, Los Angeles, Miami, New York City, San Francisco, Washington D.C. May 17, 2004 May 17, 2004 Mr. Robert Burch Mr. Robert Burch Page Two of Three Page Two of Three

The subject consists of 56.12 gross acres or 2,444,496 SF. Excluding roadways which are to be Condominium - Based on the most recently released projects to come on-line an average sale price dedicated for public roadways, the Buena Vista Yards contains approximately 42.04 net acres. The of $313.85 to $349.96 per SF is indicated for projects within the subject’s market. In consideration property is located 2 miles north of Miami’s central business district, 5 miles east of Miami’s of the presented data we believe the subject would have an average asking price of $300 to $350 per International Airport, 1/8 mile west of Biscayne Boulevard (US-1) and 2 miles west of Miami SF. We have also estimated an absorption range of 20 to 30 units per month for product within the Beach. The site is zoned SD 27.1 Buena Vista East and SD 27.2 Buena Vista West under the development. Given the conditions of the market and the demand for product we believe that upon jurisdiction of the City of Miami. the release of the units a higher rate of absorption will be reflected. Despite this fact we have assumed an absorption range of 20 to 30 units per month. Based on this assumption and taking into The residential parcels to be located within Midtown East are to range in size from 0.94± acres to consideration the average period of construction for a multifamily building within Miami-Dade 2.14± acres. The mixed use commercial parcels to be located within Buena Vista West are to range County of 18 to 24 months we believe that upon construction completion the proposed building in size from 0.17± acres to 9.04± acres. would be substantially sold. The purpose of this report is to provide an overview and analysis of the residential (rental and Retail - In-Line/Local Space rental rates of within $20.00 to $30.00 per SF; anchor rates at $11.00 condominium), office, retail, and hotel market’s within Miami-Dade County and specifically within to $20.00 per SF; ancillary retail space located within multifamily or office buildings is estimated to the area of the subject. Additionally, we have determined the fee simple value as entitled and yield a rental rate of $20.00 to $30.00 per SF. All of the aforementioned leases are projected to be a inclusive of CDD, and grant funds and with infrastructure for the Midtown Miami East tract as well net basis with CPI or stepped increases in rent. as that of the Buena Vista West tract as of April 10, 2004. According to information provided by the subject’s developer they intend to construct 2,800 The analyses, opinions and conclusions were developed, and this report has been prepared in condominium units on the site. Additionally, 700 rental units are to be constructed within the conformity with the Uniform Standards of Professional Practice (USPAP), and the requirements of development. Between the subject’s area, downtown Miami and the Brickell corridor 9,000 units, the State of Florida for State Certified Real Estate Appraisers. inclusive of the subject’s product are anticipated to be constructed over the course of the next 3 to 10 years. In consideration of the residential growth within the area we anticipate a strong demand The reported analyses, opinions and conclusions were developed and this report has been prepared for retail space within the neighborhood. As such, we anticipate a healthy absorption level of the J-2 in conformity with the requirements of the Code of Professional Ethics and the Standards of property’s retail space. Professional Appraisal Practice of the Appraisal Institute. Office - The subject’s proposed office space will represent the most recently constructed buildings Attached is the market study and appraisal report that describes the investigation and analysis, together within the area. In consideration of the aforementioned we believe a rental rate within the range of with the Certification and Limiting Conditions upon which we have based our opinions: $20.00 to $28.00 per SF for space is appropriate. The developers for the subject have stated that they have been approached by several office users who have expressed an interest in office space Multifamily Rental - We believe the subject’s units will be able to command a rental rate on a per within the area. In consideration of the aforementioned, an opportunity for office development on SF basis of between $1.40 to $1.70 based on the size of the units. Given historical trends we project the subject’s pods exists given a built to suit situation in which case the absorption of space is not that rental rates within the market will increase based on CPI or at a rate of approximately 3% per considered to be an issue despite vacancy levels within the market. year barring any unforeseen economic downturns.

Based on the comparables we believe an appropriate unit size for the subject’s units would be 725 Hotel - We concluded to an ADR of $90 to $110 per room for any hotels which would be SF to 750 SF for 1-bedroom units, 925 SF to 975 SF for 2-bedroom units and 1,250 SF for 3- constructed on the subject site with an initial stabilized occupancy rate of 65%. to 70%. As such, a bedroom units. RevPAR of $58.50 to $77.00 per room would be indicated for any hotels which may be constructed on the site. Demand for rental housing within Miami-Dade County is projected at approximately 5,174 rental units per year, or 431 units per month. The need for additional rental housing is documented within our report. We are of the opinion that the units within the subject’s development would experience an absorption level within the range of 9 to 44 units per month. An absorption level toward the lower end of the range appears appropriate for a property containing a relatively low rental pool while a larger building would tend to have an absorption rate toward the higher end of the range. TABLE OF CONTENTS

May 17, 2004 Title Page Mr. Robert Burch Transmittal Letter Page Two of Three Table of Contents Executive Summary ...... 1 As a result of our analysis the fee simple value of Midtown Miami East as entitled with and Photographs of the Subject...... 6 inclusive of CDD and grant funds and with infrastructure as of April 10, 2004, is: Certificate of Value ...... 8 General Assumptions and Limiting Conditions ...... 10 EIGHTY ONE MILLION ONE HUNDRED THOUSAND DOLLARS Appraisal Reporting and Development Process ...... 11 $81,100,000 Identification of the Subject ...... 12 Intended User and Use of the Report ...... 13 As a result of our analysis the fee simple value of Buena Vista West as entitled with and inclusive Purpose of the Appraisal ...... 13 of CDD and grant funds and with infrastructure as of April 10, 2004, is: Date of Analysis and Inspection ...... 13 History of the Property ...... 14 FIFTY NINE MILLION DOLLARS Definition of Market Study ...... 14 $59,000,000 Property Rights Appraised ...... 14 Definition of Market Value...... 15 Exposure and Marketing Time ...... 16 Miami-Dade County Area Analysis...... 17 Neighborhood Analysis ...... 26 Florida Housing Market ...... 31 Respectfully submitted, Miami-Dade County Housing Market ...... 36 Rental Apartment Overview ...... 42 JOSEPH J. BLAKE AND ASSOCIATES, INC. Condominium Market Overview ...... 62 Miami-Dade County Condominium Market Overview ...... 64 Retail Market Overview...... 84 ______Office Market Overview...... 96 J-3 Ted Allen, MAI, Principal Hotel Market Overview...... 114 State-Certified General Real Estate Appraiser Description of the Site...... 135 No. RZ0000426 Zoning...... 139 Assessment and Taxes...... 139 Highest and Best Use Analysis ...... 140 ______Appraisal Process...... 143 Alexandra D. Londono, MAI, Vice President Subdivision Sellout Analysis ...... 144 State-Certified General Real Estate Appraiser The Final Reconciliation ...... 175 No. RZ0002249 ADDENDA Legal Description Site Plan Zoning Qualifications of the Appraiser

______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants EXECUTIVE SUMMARY EXECUTIVE SUMMARY

Name: Buena Vista Yards Site Data & Zoning: The subject consists of 56.12 gross acres or 2,444,496 SF. Excluding roadways which are to be dedicated for Location: The site is bordered by NE 36th Street to the north, public roadways, the Buena Vista Yards contains Miami Avenue to the west, NE 29th Street to the south approximately 42.04 net acres. The property is located and the Florida East Coast Railroad (FEC) to the east. 2 miles north of Miami’s central business district, 5 miles east of Miami’s International Airport, 1/8 mile Property Summary: FEC's Buena Vista Yards is one of the largest west of Biscayne Boulevard (US-1) and 2 miles west undeveloped land parcels in the city of Miami. The of Miami Beach. The site is zoned SD 27.1 Buena property is located just south of I-195 and Miami's Vista East and SD 27.2 Buena Vista West under the Design District, midway between Miami International jurisdiction of the City of Miami. Airport and Miami Beach. It is bordered by North Miami Avenue, NE 29th Street, NE 36th Street and the Buena Vista West Midtown Miami East FEC Rail right-of-way. Tract A 9.04 Tract A 1.1 The site is currently used for the storage of containers Tract B 3.56 Tract B 0.94 and has been reviewed for hazardous materials. The Tract C 3.92 Tract C 1.84 site can be considered vacant and ready for Tract D 2.21 Tract D 2.14 redevelopment. Tract E 3.59 Tract E 1.58 The subject is the focus of a development that would Tract F 4.9 Tract F 1.91 transform it from a vacant parcel of land to an urban Tract G 0.28 Tract G 1.54 neighborhood. Main entrances are to be created at NE Tract H 0.17 Tract H 1.66 1st Avenue on NE 36th Street, NE 1st Place on NE 36th Street, NE 1st Place on NE 29th Street, at NE 34th Street N/A 0 Tract I 1.66 on both the east and west edges, at NE 31st Street on Total 27.67 Total 14.37 nd

J-4 Miami Avenue as well as at NE 32 Street on Miami Avenue. A major new landscaped boulevard is to link th Reserved* the NE 1st Place entrance on NE 29 Street to the one on NE 36th Street, as well as NE 31st Street, NE 32nd Total Street and NE 34th Street. This boulevard is to be the Tract J 0.46 centerpiece of the development and form the major Tract K 0.08 entrance face for a series of residential parcels that will be located along the eastern edge of the site. Tract L 1.16 Residential uses are to be located on the east half of the Total 1.70 property fronting the FEC Rail Right-of-way. This area * Reserved Area is for Emergency & public vehicular will be known as “Midtown East”. The west side of the access as well as for installation & maintenance of property fronting Miami Avenue is proposed for mixed-use commercial development. This area will be public utilities known as “Buena Vista West”. The residential parcels to be located within Midtown East are to range in size from 0.94± acres to 2.14± acres. The mixed use commercial parcels to be located within Buena Vista West are to range in size from 0.17± acres to 9.04± acres.

1 2 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants EXECUTIVE SUMMARY EXECUTIVE SUMMARY

Improvement Data: Currently, the site is vacant. Demand for rental housing within Miami-Dade County is projected at approximately 5,174 rental units per Purpose of the Report: The purpose of this report is to provide an overview year, or 431 units per month. The need for additional and analysis of the residential (rental and rental housing is documented within our report. We are condominium), office, retail, and hotel market’s within of the opinion that the units within the subject’s Miami-Dade County and specifically within the area of development would experience an absorption level the subject. Additionally, we have determined the fee within the range of 9 to 44 units per month. An simple value as entitled and inclusive of CDD and absorption level toward the lower end of the range grant funds and with infrastructure for the Midtown appears appropriate for a property containing a Miami East tract as well as that of the Buena Vista relatively low rental pool while a larger building would West tract as of April 10, 2004. tend to have an absorption rate toward the higher end of the range.

Date of Inspection: April 10, 2004 Condominium - Based on the most recently released projects to come on-line an average sale price of $313.85 to $349.96 per Date of Market Analysis & Value: April 10, 2004 SF is indicated for projects within the subject’s market. In consideration of the presented data we believe the Highest and Best Use subject would have an average asking price of $300 to As Vacant: Development of the parcel to the maximum allowable $350 per SF. We have also estimated an absorption density as approved under the property’s zoning code range of 20 to 30 units per month for product within the development. Given the conditions of the market As Improved: Demolition of any existing improvements on the site and the demand for product we believe that upon the and the redevelopment of the parcel with high density release of the units a higher rate of absorption will be residential and commercial uses reflected. Despite this fact we have assumed an absorption range of 20 to 30 units per month. Based on Market Analysis Conclusions this assumption and taking into consideration the average period of construction for a multifamily

J-5 Multifamily Rental- We believe the subject’s units will be able to command building within Miami-Dade County of 18 to 24 a rental rate on a per SF basis of between $1.40 to months we believe that upon construction completion $1.70 based on the size of the units. Given historical the proposed building would be substantially sold. trends we project that rental rates within the market will increase based on CPI or at a rate of Retail - In-Line/Local Space rental rates of within $20.00 to approximately 3% per year barring any unforeseen $30.00 per SF; anchor rates at $11.00 to $20.00 per SF; economic downturns. ancillary retail space located within multifamily or office buildings is estimated to yield a rental rate of Based on the comparables we believe an appropriate $20.00 to $30.00 per SF. All of the aforementioned unit size for the subject’s units would be 725 SF to 750 leases are projected to be a net basis with CPI or SF for 1-bedroom units, 925 SF to 975 SF for 2- stepped increases in rent. bedroom units and 1,250 SF for 3-bedroom units.

3 4 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants EXECUTIVE SUMMARY PHOTOGRAPHS OF THE SUBJECT

According to information provided by the subject’s developer they intend to construct 2,800 condominium units on the various pads within the site. Additionally, 700 rental units are to be constructed within the development. Between the subject’s area, downtown Miami and the Brickell corridor 9,000 units, inclusive of the subject’s product are anticipated to be constructed over the course of the next 3 to 10 years. In consideration of the residential growth within the area we anticipate a strong demand for retail space within the neighborhood. As such, we anticipate a healthy absorption level of the property’s retail space.

Office - The subject’s proposed office space will represent the most recently constructed buildings within the area. In consideration of the aforementioned we believe a rental rate within the range of $20.00 to $28.00 per SF for space is appropriate. The developers for the subject have stated that they have been approached by several office users who have expressed an interest in office space within the area. In consideration of the aforementioned, an opportunity for office development View of Site from Eastern Elevation on the subject’s pods exists given a built to suit situation in which case the absorption of space is not considered to be an issue despite vacancy levels within the market. J-6

Hotel - We concluded to an ADR of $90 to $110 per room for any hotels which would be constructed on the subject site with an initial stabilized occupancy rate of 65%. to 70%. As such, a RevPAR of $58.50 to $77.00 per room would be indicated for any hotels which may be constructed on the site. Value Conclusions Value as entitled and inclusive of CDD and Grant Funds and with Infrastructure (Midtown Miami East) The Subdivision Sellout Analysis: $81,100,000 Value as entitled and inclusive of CDD and Grant Funds and with Infrastructure (Buena Vista West)

The Subdivision Sellout Analysis: $59,000,000 View of Site from Northern Elevation

5 6 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants PHOTOGRAPHS OF THE SUBJECT CERTIFICATE

I, Alexandra D. Londono, certify that:

I have made a personal inspection of the property that is the subject of this report. I, Ted Allen, certify that: I have made a personal inspection of the property that is the subject of this report. “The Appraisal Institute conducts a program of continuing education for its designated members. MAIs who meet the minimum standards of this program are awarded periodic educational certification.” “As of the date of this report we, Ted Allen and Alexandra Londono, have completed the requirements of the continuing education program of the Appraisal Institute.” We certify that: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions attached herewith, and are our personal, impartial, and unbiased professional analyses, opinions and conclusions. View of Site from Western Elevation We have no present or prospective interest in the property that is the subject of this report and we have no personal interest with respect to the parties involved. We have no bias with respect to the property that is the subject of this report or to the parties

J-7 involved in this assignment. Our engagement on this assignment was not contingent upon developing or reporting predetermined results. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined information that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this report. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP). The reported analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which includes the Uniform Standards of Professional Appraisal Practice. (USPAP). No one provided significant assistance to the persons signing this certificate. View of Site from Southern Elevation

7 8 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants CERTIFICATE GENERAL ASSUMPTIONS AND LIMITING CONDITIONS

The use of this report is subject to the requirements of the State of Florida relating to review This market report is subject to the underlying assumptions and limiting conditions qualifying the by the Real Estate Appraisal Subcommittee of the Florida Real Estate Commission. information contained in the report as follows: The use of this report is subject to the requirements of the Appraisal Institute relating to The market conclusions apply only to the area specifically identified and described in the review by its duly authorized representatives. ensuing report. Information and data contained in the report, although obtained from public record and other As a result of our analysis the fee simple value of Midtown Miami East as entitled with and reliable sources and where possible, checked by the consultants, are accepted as satisfactory inclusive of CDD and grant funds and with infrastructure, as of April 10, 2004, is: evidence upon which rests our overview of the market under study. EIGHTY ONE MILLION ONE HUNDRED THOUSAND DOLLARS The consultants have made no legal survey nor have they commissioned one to be prepared. $81,100,000 Therefore, reference to a sketch, plat, diagram or previous survey appearing in the report is only for the purpose of assisting the reader to visualize the study area. As a result of our analysis the fee simple value of Buena Vista West as entitled with and inclusive It is assumed that all information known to the client and relative to the market study has been of CDD and grant funds and with infrastructure, as of April 10, 2004, is: accurately furnished. FIFTY NINE MILLION DOLLARS Information identified as being furnished or prepared by others is believed to be reliable, but $59,000,000 no responsibility for its accuracy is assumed. The consultants, by reason of the report, will not be required to give testimony as an Expert Witness in any legal hearing or before any court of law unless justly and fairly compensated Respectfully submitted, for such services. By reason of the purpose of this market report herein set forth, the conclusions reported are JOSEPH J. BLAKE AND ASSOCIATES, INC. only applicable to the study area and the market report should not be used for any other purpose. ______Disclosure of the contents of the market report is governed by the By-Laws and Regulations Ted Allen, MAI, Principal Alexandra D. Londono, MAI, Vice President of the Appraisal Institute. State-Certified General Real Estate Appraiser State-Certified General Real Estate Appraiser

J-8 The consultants are not engineers, and any reference to physical property characteristics in No. RZ0000426 No. RZ0002249 terms of quality, condition, cost, suitability, soil conditions, flood risk, obsolescence, etc., are strictly related to their economic impact on the property. No liability is assumed for any engineering-related issues. Neither all nor part of the contents of the report (especially any conclusions, the identity of the consultant, or the Appraisal Institute, or the MAI or RM designations), shall be reproduced for dissemination to the public through advertising media, public relations media, news media, sales media, or any other public means of communication without the prior consent and written approval of the consultants. In the absence of soil boring tests it has been assumed that there are no unusual subsoil conditions or if any do exist, they can be or will be corrected through the use of modern construction techniques at a reasonable cost. This market study is based on the condition of local and national economies, purchasing power of money and financing rates prevailing at the effective date of report. Possession of this report or a copy there of does not imply right of publication, nor use for any purpose by any other than the person to whom it is addressed, without the written consent of the authors.

9 10 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants APPRAISAL REPORTING AND DEVELOPMENT PROCESS APPRAISAL REPORTING AND DEVELOPMENT PROCESS

The purpose of this report is to provide an overview and analysis of the residential (rental and There is a significant number of residential developments within the Biscayne corridor from I-395 condominium), office, retail, and hotel market’s within Miami-Dade County and specifically within running north to I-195, which we present. The majority of the residential activity is located to the the area of the subject. Additionally, we have determined the fee simple value as entitled and east of Biscayne Boulevard. There are a significant number of residential buildings in the area, inclusive of CDD and grant funds and with infrastructure for the Midtown Miami East tract as well which primarily are located along and to the east of Biscayne Boulevard. We present rental as that of the Buena Vista West tract as of April 10, 2004. The scope of this assignment entails the information on a sampling of rental apartment complexes in the area. Furthermore, we present case collection, verification and analysis of market characteristics and statistics for the multifamily studies on various proposed high-rise condominium developments which are being constructed residential market (rental and condominium), as well as for such commercial sectors as office, retail within the area. and hotels within the subject’s area as well as within Miami-Dade County. Additionally, sales of residential and commercial tracts were included within the report. Commercial Analysis (Office, Retail and Hotel) The subject consists of one of the only vacant tracts of land in eastern Miami-Dade County. The site We have presented general market information pertaining to the office, retail and hotel markets in has been used as railroad yard and therefore was never developed. The surrounding neighborhood Miami, Miami-Dade County, as well as the subject’s immediate area. There are a few retail and has been developed for years. There are no parcels of land that are of similar size within the office buildings located along Biscayne Boulevard. Information pertaining to some of the individual subject’s neighborhood. We searched within the Southeast Florida market for sales of similar tracts retail and office buildings is included, giving an indication of the rental rates in the area for these of land, in infill locations, but were not able to find any that proved to have a meaningful correlation property types. Based on the limited retail and office space within the subject’s immediate area we to the subject, in terms of value. Therefore, it was not possible to value the subject using the Sales expanded our analysis to include retail and office properties located in areas which will be Comparison Approach. considered comparable to the subject’s area. These comparables are used to indicate a potential upper range for retail and office properties within the subject’s area. The subject site is to be subdivided into smaller parcels, after the proper infrastructure has been put in place. The subdivided parcels will have an average size of approximately 2.47 acres. There have It is noted that currently there are no hotels within the immediate area of the subject (See been many sales of smaller parcels of land, which are similar in size and shape to the parcels that Neighborhood Analysis). As such, we included economy and moderate priced hotel properties will be created once the subject is subdivided. located further south of the subject’s area. We have used the Subdivision Sellout Analysis to value the subject. The process for estimating the value of a parcel land using the Subdivision Sellout Analysis is as follows. First, sales within the IDENTIFICATION OF THE PROPERTY area, which are deemed similar to the subject’s individual lots, are researched. From the sales data, the appraisers estimate the appropriate pricing schedule for the subject's product. Then a sellout The subject is the Florida East Coast (FEC) Buena Vista Yards located in Miami, Florida. FEC's J-9 time period is estimated along with the anticipated expenses. These revenues less the associated sales expenses less a profit to the developer (entrepreneurial profit) result in a net income, which is Buena Vista Yards is one of the largest undeveloped land parcels in the city of Miami. The property is located just south of I-195 and Miami's Design District, midway between Miami International discounted to a present worth using appropriate yield assumptions. th Airport and Miami Beach. It is bordered by North Miami Avenue, NE 29th Street, NE 36 Street The data compiled for this study was gathered from public records, data services, market and the FEC Rail right-of-way. Since the subject is such a large parcel of land, it does not have a participants, news periodicals, public agencies and in-house files. Additionally, information specific specific street address. The subject is located within the 33137 zip code. to comparables used within the analysis was verified via public records, via brokers, state agencies, The subject is the focus of a development that would transform it from a vacant parcel of land to an market participants or other reliable sources. st th st urban neighborhood. Main entrances are to be created at NE 1 Avenue on NE 36 Street, NE 1 Place on NE 36th Street, NE 1st Place on NE 29th Street, at NE 34th Street on both the east and west The analysis performed for the various property types to be included within the development is st nd edges, at NE 31 Street on Miami Avenue as well as at NE 32 Street on Miami Avenue. A major detailed below. th new landscaped boulevard is to link the NE 1st Place entrance on NE 29 Street to the one on NE th st nd th Multifamily Residential Analysis (Condominium and Rental) 36 Street, as well as NE 31 Street, NE 32 Street and NE 34 Street. This boulevard is to be the centerpiece of the development and form the major entrance face for a series of residential parcels We have presented general market information pertaining to the rental apartment market in Miami, that will be located along the eastern edge of the site. Residential uses are to be located on the east Miami-Dade County, as well as the subject’s immediate area. We also present information half of the property fronting the FEC Rail Right-of-way. This area will be known as “Midtown pertaining to the condominium market in Miami, Miami-Dade County, based on the level of East”. The west side of the property fronting Miami Avenue is proposed for mixed-use commercial condominium development occurring in the neighborhood. development. This area will be known as “Buena Vista West”.

11 12 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants IDENTIFICATION OF THE PROPERTY HISTORY OF THE PROPERTY

The subject consists of 56.12 gross acres or 2,444,496 SF. Excluding roadways which are to be The subject is the site of the former Florida East Coast Railway switching yard. Since 1992 it has dedicated for public roadways, the Buena Vista Yards contains approximately 42.04 net acres. The been leased to the Port of Miami, which in turn subleased it to trucking and shipping companies that property is located 2 miles north of Miami’s central business district, 5 miles east of Miami’s used it to store shipping containers. The port lease expired in September 2001, since then the port International Airport, 1/8 mile west of Biscayne Boulevard (US-1) and 2 miles west of Miami has been leasing the parcel on a month-to-month basis. Beach. The site zoned SD 27.1 Midtown Miami East and SD 27.2 Buena Vista West under the jurisdiction of the City of Miami. The residential parcels to be located within Midtown East are to The site was purchased by Biscayne Development Partners, LLC from FEC in December 2002 for range in size from 0.94± acres to 2.14± acres. The mixed use commercial parcels to be located $34,500,000. Approximately 27.67 acres are under contract to be sold at a minimum price of within Buena Vista West are to range in size from 0.17± acres to 9.04± acres. $38,500,000 with the final purchase price to be determined based on the achievable net operating income for this portion of the site. To the best of our knowledge, no other contracts have been signed for the sale of any other parcels at the property. In November 21, 2002 we appraised the site for our INTENDED USER AND USE OF THE REPORT client, Fremont Investment and Loan, under a bulk value for $40,400,000 with an as completed value for the site of $57,700,000. Since that time the property was rezoned and will be receiving over The intended user of this report is our client, Banc of America Securities, LLC (BAS). The intended $77,500,000 in bonds which will provide for the property’s infrastructure and a parking garage. The use of this appraisal is to assist our client with determining a market value for the property for loan subject’s developer is not responsible for the aforementioned cost as the property will be located within underwriting purposes. a Community Development District (CDD). The CDD will absorb the majority of the aforementioned cost. In consideration of the aforementioned the subject’s value has increased substantially. We are not aware of any other real property transactions pertaining to the subject in the three-year period prior to PURPOSE OF THE APPRAISAL the date of value. The purpose of this report is to provide an overview and analysis of the residential (rental and condominium), office, retail, and hotel market’s within Miami-Dade County and specifically within DEFINTION OF MARKET STUDY the area of the subject. Additionally, we have determined the fee simple value as entitled and inclusive of CDD and grant funds and with infrastructure for the Midtown Miami East tract as well as that of the Buena Vista West tract as of April 10, 2004. “A macroeconomic analysis that examines the general market conditions of supply, demand and pricing or the demographics demand for a specific area or property type. A market study may also include analyses of construction and absorption trends.”1 DATE OF ANALYSIS AND INSPECTION J-10 This appraisal is prepared as of April 10, 2004 with the research and analysis of the market and an PROPERTY RIGHTS APPRAISED inspection of the subject as of April 10, 2004. The subject is appraised on the basis of a fee simple estate. A fee simple estate may be defined as “Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.” 2

1 Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th edition (Chicago, Illinois), page 176 2 Ibid, page 140.

13 14 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants DEFINITION OF MARKET VALUE EXPOSURE AND MARKETING TIME

“Market value means the probable price which a property should bring in a competitive and open DEFINITIONS market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition Exposure Time is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: "The estimated length of time the property interest being appraised would have been offered on the 1) buyer and seller are typically motivated; market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based upon an analysis of past events assuming a competitive 3 2) both parties are well informed or well advised, and acting in what they consider their own best and open market." interests; Marketing Time 3) a reasonable time is allowed for exposure in the open market; "Reasonable marketing time is an estimate of the amount of time it might take to sell an interest in 4) payment is made in terms of cash in US dollars or in terms of financial arrangements real property at its estimated market value during the period immediately after the effective date of comparable thereto; and the appraisal; the anticipated time required to expose the property to a pool of prospective purchasers and to allow appropriate time for negotiation, the exercise of due diligence, and the 5) the price represents the normal consideration for the property sold unaffected by special or consummation of a sale at a price supportable by current market conditions." 4 creative financing or sales concessions granted by anyone associated with the sale.”2 In order to make estimates of exposure and marketing times, we contacted real estate companies active in Southeast Florida. Each broker was asked to estimate the marketing time of a parcel of land in an infill location in Miami. The brokers noted the numerous sales that have taken place in locations that are close to the downtown section of Miami-Dade County. Many parcels have transferred two and three times over the last few years, as developers combine parcels, and then sell them to end users for the construction of multifamily apartments and or retail properties. Currently, there is little land available for development, especially larger parcels that could accommodate a modern retailer such as a grocery store, a home improvement store, or a discount retailer.

J-11 These brokers were also asked about exposure times on current sales. They indicated that the market was not changing rapidly enough to suggest a significant difference between marketing and exposure time. Therefore, we believe that the exposure and marketing time for the subject are the same. When the subject was first offered for sale, there were numerous offers made on the parcel. The company that placed the site under contract, has been approached by numerous parties about purchasing all or a part of the site. Considering the aforementioned information, we are of the opinion that an appropriate exposure and marketing time for the subject in bulk (one parcel) within 12 months is reasonable. Individual parcels that will be created in the process of subdividing the parcel would also likely sell within 12 months of being offered to the market, assuming they were priced reasonably, and appropriately marketed. It should be noted that the current value estimate is just that. It is a current value that presumes that the reasonable exposure time (marketing period) is past and ended on the date of value.

3 Appraisal Institute, The Dictionary of Real Estate Appraisal, 3rd Edition (Chicago, Illinois: Appraisal Institute, 1993), 2 Federal Reserve System, 12 CFR Parts 208 and 225, Appraisal Standards for Federally Related Transactions, Section Page 126. 225.62, Page 29 4 Ibid, Page 221. 15 16 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY AREA ANALYSIS

The subject is located in Miami-Dade County, Florida. Miami-Dade County is located in the southeast portion of Florida's east coast and is the southernmost county situated on Florida's mainland. Miami is the county seat of Miami-Dade County, which includes many other incorporated areas such as Miami Beach, Key Biscayne, Coral Gables, South Miami, Pinecrest, Aventura, Hialeah, and Homestead etc. The major portion of the county is on the west side of Biscayne Bay, the entryway of all docking facilities in the city. The Atlantic Ocean is the eastern boundary of the county and is accessible via four causeways in the city proper. Miami-Dade County is Florida's largest county with an estimated 2003 population of 2,342,739 persons (Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, May 2003) living in this 1,955 square mile area. Miami-Dade County enjoys an excellent geographic location in that it is the gateway to the Caribbean and Latin America. Furthermore, it is situated along several heavily traveled tourist routes and is within a day's drive of some of Florida's major tourist destination cities, as shown in the following table: City Miles From Miami Fort Lauderdale 25 West Palm Beach 74 Key West 160 Orlando 232 Daytona Beach 259

J-12 Clearwater 286 Tampa 309 Tallahassee 484

Source: Rand McNally Florida Mileage Chart

In the past, development and growth in Miami-Dade County were largely attributed to the climate, which drew the northern United States tourist trade during the winter months. In recent years, Miami-Dade County has also become recognized as a center for international business, especially with Latin America, the Caribbean and increasingly with Europe and Asia. Tourism, construction and trade are the area's economic mainstays, with international commerce and finance becoming rapidly growing segments in the economy. Area development can be characterized as light industrial/commercial in the western and northern sectors of the city. The southern and southwestern sectors consist of residential and light industrial/commercial activity. The growth in business relations between Latin America and Miami-Dade County has been accompanied by a major increase in tourism from Latin America. Latin American tourists who enjoy shopping in the United States represent a major demand segment in Miami-Dade County's lodging and retail markets.

17 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants MIAMI-DADE COUNTY AREA ANALYSIS MIAMI-DADE COUNTY AREA ANALYSIS

The following points evidence the area’s emergence as an international center: Births and Deaths • More than 100 of the nation's leading multinational corporations have Latin American Miami-Dade County 1971-2000 headquarters in Miami-Dade County. • Average There are more Edge Act Banks in Miami-Dade County than in any other county in the Year Births/Year Births per 1,000 Average Deaths/Year Deaths per 1,000 country. These banks are established primarily for the purpose of enabling foreign transactions. 1971-1980 18,311 12.6 14,536 10.0 • Large retail malls, located throughout Miami-Dade County, have been developed partially to 1981-1990 28,404 14.3 17,368 9.7 meet the desires of the international tourists. 1991-1999 32,287 15.6 18,554 8.9 2000 32,300 14.4 18,466 8.3 POPULATION Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, published May 2003 Miami-Dade County officials project that the local economy's future outlook is one of growth. Annual population increases are projected to continue through the year 2010 when Miami-Dade's 2000 Miami-Dade County Population by Age population is forecast to reach 2,551,284. This growth may be attributed to Miami-Dade County's continued emergence as an international business center, which has the effect of broadening the Age Group Number Percent area's economic base and reducing the impact of cyclical variations on the nation's economy. 00-04 145,752 6.5% Miami-Dade County’s population for the year 2003 is estimated to be 2,342,739. 05-09 157,871 7.0% 10-14 160,754 7.1% Miami-Dade County Population Trends 15-19 154,989 6.9% 20-24 144,721 6.4% Year Population Percent Change 25-34 337,433 15.0% 1900 4,955 --- 35-44 361,966 16.1% 1910 11,933 9.2 45-54 282,766 12.5% 1920 42,753 13.6 55-59 109,141 4.8% 1930 142,955 12.8 60-64 97,417 4.3% 1940 267,739 6.5 65-74 162,257 7.2% 1950 495,084 6.3 75+ 138,295 6.1% J-13 1960 935,047 6.5 Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, published May 2003 1970 1,267,792 3.1 1980 1,625,781 2.5 EMPLOYMENT 1990 1,967,094 3.2 1991 2,001,032 1.7 As of July 2003, the county's civilian labor force totaled approximately 1,114,400, by far the largest 1992 2,022,862 1.1 in the State of Florida. Detailed below is the non-agricultural employment by industry for Miami- 1993 1,995,292 -1.4 Dade County for 2002: 1994 2,037,315 2.1 1995 2,084,205 2.2 Category Employment 1996 2,124,885 1.9 Construction 40,300 1997 2,157,208 1.5 Manufacturing 57,100 1998 2,189,719 1.5 Transportation, Communication and Public Utilities 99,000 1999 2,221,630 1.4 Wholesale Trade 191,000 2000 2,253,362 1.4 Finance, Insurance & Real Estate 66,200 2001 2,283,319 1.3 Services and Mining 414,800 2002 2,313,047 1.3 Government 149,800 2003 2,347,739 1.3 Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, published May 2003 2005 (projected) 2,402,105 2.5 2010 (projected) 2,551,284 6.2 The county’s rate of unemployment currently stands at 7.4% as of August 2003, as compared to the State of Florida as a whole, with a rate of 5.3%. Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, published May 2003 18 19 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY AREA ANALYSIS MIAMI-DADE COUNTY AREA ANALYSIS

The following charts list Miami-Dade County's largest public, private and industrial employers: Largest Industrial Firms 2003

Largest Public Employers 2003 Number of Rank Company Name Employees Number of Rank Organization Name Employees 1 Beckman Coulter Electronics, Inc. 2,000 2 Miami Herald Publishing Company 1,800 1 Miami-Dade County Public Schools 37,500 3 Cordis Corporation 1,800 2 Miami-Dade County 30,000 4 Goodwill Industries of South Florida 1,320 3 State of Florida 19,958 5 STS Apparel Corp. of Miami 700 4 Federal Government 18,416 6 Gator Industries 500 5 Jackson Memorial Hospital 10,000 7 Perko, Inc. 500 6 City of Miami 3,400 8 Trends Clothing Corp. 450 7 Florida International University 2,591 9 Avanti/Case-Hoyt 400 8 Miami-Dade Community College 2,400 10 Joy Athletic Corporation 400 9 Miami VA Medical Center 2,000 10 City of Miami Beach 1,702 Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, published May 2003

Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, published May 2003 INCOME

Largest Private Employers 2003 Total personal income in Miami-Dade County was $53,810,771,000 in 1999 and $57,355,934,000 in 2000, for an annual rate of increase of 6.1% (Source: Research Section Department of Planning Number of and Zoning, Miami-Dade County Facts – 2003, May 2003). Rank Company Name Employees Per Capital Personal Income 1 American Airlines 9,000 2 University of Miami 7,800 County 2004 2002 ’02-’03 Change J-14 3 Baptist Health Systems of South Florida 7,500 Broward $32,925 $32,491 1.3% 4 Precision Response Corporation 4,346 Miami-Dade 28,461 28,294 0.6% 5 BellSouth 4,240 Monroe 40,507 38,965 4.0% 6 Publix Supermarkets, Inc. 4,000 Palm Beach 45,614 45,312 0.7% 7 MasTec 4,000 Florida $31,242 $30,654 1.9% 8 Royal Caribbean International/Celebrity Cruises 4,000 9 Florida Power & Light Company 3,823 Source: Florida Trend, Economic Yearbook 2004, April 2004 10 Mount Sinai Medical Center of Greater Miami 2,300 A breakdown of the percentage of Miami-Dade County families whose income levels are lower Source: Research Section Department of Planning and Zoning, Miami-Dade County Facts – 2003, published May 2003 than specific dollar amounts is shown in the chart that follows: % Distribution of Households Family Income below Income Level

$10,000 9.1% 14,999 6.7% 24,499 14.4% 34,999 13.4% 49,999 16.5% Above 50,000 39.9%

20 21 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY AREA ANALYSIS MIAMI-DADE COUNTY AREA ANALYSIS

HOUSING TRANSPORTATION

According to the U.S. Census Bureau, Census 2000, the total number of occupied households Due to its strategic location and design, Miami International Airport (MIA) has exceeded JFK and throughout Miami-Dade County in 2000 was 776,774. This represents a total increase of 166,974 is now the number one airport in the country in terms of handling international cargo. In 2000, households or 27% over the 1980 estimate of 609,800. These units can be broken down into single passenger traffic totaled 33.6 million. Airport officials stated that over 40,822 people work at the and multifamily housing of approximately 57.8% and 42.2% respectively. The percentage of airport for approximately 83 air carriers. These airlines have an average of 1,418 take-offs/landings housing that is multifamily is also a reflection of the density of Miami-Dade County’s population per day, to and from destinations in the United States, Canada, Latin America, Europe and the and the county’s development. Caribbean. The Airport administration has embarked on a $5.4 billion capital improvements that includes an extensive ground transportation component to be constructed within the next five to six Increases in the number of households can be largely attributed to substantial immigration of years. Travelers will see the broadening to Central Boulevard (the airport’s main access road); refugees during the 1980s. In the Miami metropolitan area specifically, the average household size wider upper and lower vehicular drives for arrivals and departures, a new bus station; a new 1,523- was 2.84 persons. space parking garage; a central collection plaza for improved revenue control and traffic flow. Miami-Dade County Households and Average Household Size A Federal Aviation Administration study showed MIA would grow faster than nearly any other airport in the nation by 2010, with nearly 70 million passengers, as traffic between the United States Average and Latin America outpaces that of nearly every other region. To meet this demand, the airport is Year Households Household Size currently undergoing a massive expansion of its facilities, including adding a fourth runway. 1970 428,100 2.91 1975 509,800 2.80 Also, $1.3 billion are earmarked to build a four-story transit hub and new roads east of the airport. 1980 609,800 2.63 Most businesses along this corridor have already been bought by the Department of Transportation 1982 645,500 2.69 and demolished. The 25-acre hub is to be completed by 2005 and, once built, passengers will shuttle 1984 648,200 2.69 between the terminal and the hub aboard automated trains. The hub, called the Miami Intermodal 1986 669,200 2.61 Center, will be a central destination and departure point for Amtrak, Tri-Rail, Metrorail, 1987 685,365 2.59 Greyhound, county buses, and rental cars. The hub is to connect to the port of Miami, so that cruise 1989 720,305 2.56 passengers arriving by plane will be able to hop onto a train that will take them to the port. The idea 1990 692,355 2.75 is to augment mass transportation access to and from the airport to alleviate congestion around the 1992 711,416 2.74 airport. J-15 1995 712,421 2.82 1997 731,460 2.78 The Port of Miami accommodated 3,642,990 passengers during the fiscal year 2001-2002. The 2000 776,774 2.84 Port's 40 steamship lines offer more cargo sailings to more destinations in the Western Hemisphere than any other port and have access to virtually every port in the world. Approximately 8.7 million The total stock of housing in Miami-Dade County was 771,288 units in 1990, 834,520 units in tons of cargo moved through the Port during the fiscal year 2001-2002. There are currently 1999, and 852,278 units in 2000. Of this total, approximately 91.1% are occupied. Prior to 1979, proposals in process to increase the capacity of the Port of Miami through its expansion. Looking Miami-Dade’s housing market was single family oriented. Then, from 1980 to 1989, the ahead, the Port is poised to stay a leader in the maritime industry as it upgrades and enhances its multifamily product became heavily dominant in Miami-Dade County. From 1989 to the present, infrastructure. single-family product is becoming more prevalent. Metrorail, which opened in 1985, is a 21-mile rapid transit system on an elevated railway providing access to downtown Miami from portions of both south and north Miami-Dade County. It connects with Metromover, the first urban people mover in the Country. Metromover, a 30 station 5-mile system, loops through the center of downtown Miami's Community Business District and connects to some of the major structures. Metrobus provides the feeder system to Metrorail and bus service to all other parts of Miami-Dade County. A network of 5,640 miles of roadway serves Miami-Dade County of which I-95, I-75, the Florida Turnpike and the Palmetto Expressway (SR-826) are the most utilized north/south highways while SR-112, SR-826 and SR-836 are the most utilized east/west expressways. US-1 and SR-A1A are also components of this network. Other primary thoroughfares include I-395 (east/west), I-195 (east/west), SR-9, SR-94, SR-874, US-27, US-41 and US-441. 22 23 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY AREA ANALYSIS MIAMI-DADE COUNTY AREA ANALYSIS

EDUCATION FINANCE

The educational opportunities in Miami-Dade County are numerous. The county is served by over Miami-Dade County is a recognized banking and finance center with 120 financial institutions 600 public and private secondary and elementary schools and 28 vocational/technical institutes featuring a growing community of international banks serving Latin America. The number of which combine to care for the educational needs of 300,000 students. foreign bank agencies has more than doubled in the last two years. At present, there are 28 foreign banks and 32 Edge Corporations (American banks engaged in foreign lending). This international Seven colleges and universities are located in the county and operate a total of 13 campuses. Miami- activity has emerged due to the more than 150 multinational firms that have established their offices Miami-Dade Community College, which is the largest comprehensive community college in the in order to direct their Latin American, Caribbean and in some cases, worldwide operations. United States, currently offers over 175 programs and 1,500 courses, with enrollment of approximately 57,000. The University of Miami, in Coral Gables, has over 14,000 degree seeking UTILITIES students and offers 140 undergraduate and 200 graduate degree programs. Four-year degree programs are also available at Florida International University, Barry University, St. Thomas The following utility companies serve Miami-Dade County: University, Florida Memorial College and Miami Christian College. Telephone BellSouth MEDICAL Electric Florida Power and Light Gas Florida Gas Transmission Company Miami-Dade County has a total of 32 hospitals with a total of 9,310 beds (Source: Research Section Water and Sewer Miami-Miami-Dade Water & Sewer Authority Department of Planning and Zoning, Miami-Dade County Facts – 2003, May 2003), three of these hospitals are located in Coral Gables. The largest group of medical services in the Southeastern COMMUNICATIONS United States is assembled in a medical complex just west of downtown Miami. At its hub is the University of Miami School of Medicine/Jackson Memorial Medical Center ranked in the top ten of Superior communication facilities are available in the area. Telephone service is consistently fast over 8,000 hospitals in the nation and situated in the city limits of Miami. In Miami-Dade County and efficient on local, out-of-town, and international calls. Multilingual telephone operators are alone, there are approximately 6,100 medical doctors (Source: Research Section Department of available for assistance on foreign calls, an important factor for businesses with Latin American Planning and Zoning, Miami-Dade County Facts – 2003, May 2003). operations in Miami-Dade County rather than in South America. There are 12 television stations, 3 cable systems, 28 radio stations, 4 daily newspapers, 7 weekly newspapers, 3 monthly magazines CULTURAL and an assortment of other periodicals servicing Miami-Dade County. CONCURRENCY J-16 Miami-Dade County is the home of the Florida Philharmonic Orchestra and the Miami Beach Symphony Orchestra. The Greater Miami Opera Association also operates in Miami-Dade County. The concurrency provision in the 1985 Growth Management Act requires that all water, sewer, roads, schools, parks and storm water facilities necessary to support existing improvements be in Miami-Dade County has become a recognized center for the fine arts and the performing arts, place before new construction is permitted. Thus, if a location is deficient in one or more categories, offering an array of cultural activities. These include area museums, Broadway plays, the Repertory the affected infrastructure component must be expanded to support any new construction. A Theater, the Philharmonic, the Opera Guild, as well as a large number of historical attractions and developer may choose to provide the various facilities and or services necessary to support their exhibits. The Metropolitan Museum and Art Centers are filled with collections and exhibitions from project. However, in some cases the expense associated with off site improvements may render a all parts of the world. project economically unfeasible. CONCLUSION CLIMATE Miami-Dade County remains a strong growth area due to a relatively high level of in-migration, and The subtropical marine climate of the Miami-Dade County area offers an average annual natural population growth. Population growth, which has remained in the range of 1.5% per year, temperature of 75.5 degrees with an average annual low and high of 68.7 and 82.6 degrees has added approximately 30,000 residents per year. This trend is projected to continue into the respectively. The normal annual precipitation is 57.6 inches. foreseeable future. With an average household size of just under 3 persons, there is the need for more than 10,000 additional housing units per year. Miami-Dade County remains a strong growth area in spite of indications that future growth will not be as bullish as experienced in the past. Household growth should remain strong through the remainder of the year and average household income should be substantially above the national average. In conclusion, we are of the opinion that based on current and past trends the outlook for Miami-Dade County is positive.

24 25 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants NEIGHBORHOOD ANALYSIS

A property is an integral part of its surroundings and must not be treated as an entity separate and apart from its surroundings. The value of a property is not found exclusively in its physical characteristics. Physical, economic, political and sociological forces in the area interact to give value to a property. In order to determine the degree of influence exerted by these forces on a property, their past and probably future trends must be analyzed in depth. Therefore, in order to determine the value of a property, a careful and thorough analysis must be made of the area in which is found the property under study. This area is commonly referred to as a neighborhood.

A neighborhood is a group of complementary land uses. Neighborhood boundaries identify the physical area that influences the value of the subject. "These boundaries may coincide with changes in prevailing land use, occupant characteristics, or physical characteristics such as structures, street patterns, terrain, vegetation and lot sizes."5 Often changes in land use coincide with the natural or physical features such as transportation arteries, bodies of water, and changes in elevation, which represent significant boundaries.

Neighborhood/district boundaries can be distinguished by predominant land uses. The subject is located between the FEC railroad tracks and North Miami Avenue, and between NE 29th Street and NE 36th Street within the City of Miami. A mixture of commercial and residential development characterizes the immediate area surrounding the site.

We primarily relied on physical boundaries and land use changes for the boundaries of the subject’s neighborhood. There are some changes in income characteristics or real estate values, which distinguish the neighborhood. The subject is delineated on a map on the previous page. Utilizing

J-17 physical boundaries, as well as the change in complimentary uses, the northern boundary of the neighborhood is I-195, the eastern boundary is Biscayne Bay, the southern boundary is I-395 and the western boundary is NW 2nd Avenue. Main arterials within the subject’s neighborhood include Biscayne Boulevard, NE 2nd Avenue, I- 195, I-395 and I-95. Biscayne Boulevard and NE 2nd Avenue are the primary north/south surface arterials in the neighborhood while various Avenues are the primary east/west surface arterials. I-95 is an 8-lane limited access highway, which provides access to the neighborhood from various areas of Miami-Dade County. Access from I-95 to the neighborhood is achieved via both I-195 and I-395. Biscayne Boulevard, also known as US-1, is a major 4-lane arterial within the neighborhood as well as within the eastern region of the county. This arterial commences within the downtown region of the city and traverses the county in a northern direction. Uses along Biscayne Boulevard are commercial in nature. Commercial uses consist of mom and pop retailers, mom and pop hotels, small office users, small apartment buildings, restaurants and gas stations. The City of Miami has imposed a ruling on hotels located along Biscayne Boulevard, which states that any hotel, which is closed for a period of 6 months, may not re-open as a hotel. This ruling was implemented to curtail prostitution within the neighborhood. Therefore, many of the small hotel properties in the area are being demolished or converted to other uses.

5 Appraisal Institute, "The Appraisal of Real Estate", 11th Edition (Chicago: Appraisal Institute, 1996), Page 190-191. 26 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants NEIGHBORHOOD ANALYSIS NEIGHBORHOOD ANALYSIS

Residential property values within this area range from $50,000 to over $500,000. The higher end Within the past several years new commercial users have begun to locate within the neighborhood. of the residential range is represented by those houses located along the inter-coastal waterway as Such new users have consisted of full-service restaurants, antique stores, as well as specialty mom well as within condominium buildings located along the bay. One new rental tower opened in the and pop retailers. Additionally, local and regional investors have begun to acquire small run down neighborhood within the last year and the leasing agents at the building noted a quick lease-up. multifamily properties in the neighborhood. These investors have renovated the existing Condominium buildings in the neighborhood also tend to be popular. It is noted that residential improvements in order to lease the structures as office facilities or rental units. Other such structures properties are located primarily on secondary arterials. The majority of the homes within the area are being torn down and replaced with more modern facilities. There is a trend toward mixed-use were built between the 1920s and 1970s. Some of the homes have been divided into apartments, development, with three of the most recent projects noting a preference for residential development, while others have been maintained as single-family residences. A trend in the area is for the with a retail and office component on the first and second floors. purchase and renovation of existing structures, to bring them back to single-family residences, or possibly to use them for small offices. A major boost to the area will be the new performing arts center that is being constructed at the corner of I-195 and Biscayne Boulevard. The building is to house the local opera, ballet and The neighborhood is approximately 95% developed with little vacant land available for commercial symphony, and will be in structures on both sides of the boulevard. Construction is under way at or residential development. The land that is available is the result of the previous improvements that site. The development of the performing arts center placed a spotlight on the neighborhood, and being demolished on the site. The subject, a former railroad-switching yard, is an example of such has spawned a wave of new development. Continued population growth, and longer commute times demolition for re-use. Roughly 50% of the development within the neighborhood is residential with are also encouraging residents to live in locations that are closer to areas of higher density 50% being commercial. development. The development in the subject’s neighborhood is also benefiting from these trends. As noted, the neighborhood contains a number of multifamily developments. Multifamily Other developments in the neighborhood include: developments include large mid-end high-rise condominiums located along Biscayne Bay as well as small low-end multifamily developments. The low-end multifamily development is located along • The 39-story Bay Park Plaza apartments, which opened within the last two years, are fully Biscayne Boulevard as well as along tertiary arterials within the area. leased, and have a waiting list. Opera Tower, a 57-story rental or condominium building, with 561-units planned to be constructed in the next year. Preliminary plans have already A neighborhood's life cycle usually consists of four stages. "The typical but not necessarily been approved by the city, and construction is scheduled to begin in the next 12 months. universal four-stage cycle that describes the life pattern of neighborhoods and districts; the stages include growth, stability, decline and revitalization".6 • Biscayne Bay Tower, to be located at 501 NE 36th Street is being developed into a 359-unit high-rise apartment building. The building is located just south of I-195, overlooking The subject’s neighborhood has been in a period of decline stemming from a number of factors Biscayne Bay. Currently cranes are on the site. J-18 inclusive of crime and active prostitution within the area. However, due to the location of the neighborhood as well as the affordability of housing in the area an increasing number of young • Sky Residence, located at NE 34th Street and Biscayne Boulevard has been submitted for professionals have chosen to reside within this portion of Miami. These new residents to the area city approval, The developer plans a 25-story condominium building on the site. have taken a proactive stance toward the revitalization of the neighborhood. • Bay 25 is planned, located at NE 25th Street and Biscayne Boulevard, which would have 61 The City of Miami has also taken a proactive approach to the revitalization of the neighborhood. units on 19 floors, with ground floor retail. The City is in the process of finalizing a master plan for the revitalization of the area. Based on this document the City intends to enhance retail opportunities, attract and retain new businesses as well • Biscayne Plaza Apartments, located at 1800 Biscayne Boulevard, will have 195-units within as streamline planning, preservation, zoning and design procedures for the area. Also the Florida a high-rise building. Additionally, the property will contain 19,548 SF of retail space. Department of Transportation will commence roadwork on Biscayne Boulevard in the near future. This roadwork will improve traffic flow and the aesthetics within the immediate area of the subject. • Another developer has purchased land at 1800 North Bayshore Drive. This series of low-rise apartment buildings have been demolished for a 35 to 37-story tower with 450 residential units, restaurants and almost 37,000± SF of retail space on the ground level. The City of Miami commissioners approved the plans for the project, which will include 27,604± SF of office space and 4,872± SF of retail space. The 1.4± acre parcel will have a 9-floor parking garage for 670 cars. The ground floor will have room for indoor and outdoor restaurants, and retail. The next two levels would accommodate office and the 4th floor would have townhome units. The remaining floors would be for 1 to 3 bedroom units, with rents ranging from $1,100 to $2,200 per month. Construction, is projected to cost approximately $150 6 Appraisal Institute, The Dictionary of Real Estate Appraisal, 3rd Edition (Chicago: Appraisal Institute, 1993), Page million. 242. 27 28 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants NEIGHBORHOOD ANALYSIS NEIGHBORHOOD ANALYSIS

• North Bayshore Drive is to be straightened out at 19th Street and run north along Biscayne • A new art school has leased a large storefront location in downtown's Omni Center, Bay to NE 21st Street to help create a “walking promenade”. This is also scheduled to becoming the first tenant in three years to sign with the cavernous, abandoned mall. The Art improve vehicular circulation in the area. Institute of Miami, part of a national chain, plans to put its students on display at the southwest corner of the Omni, where glass walls will reveal exhibits, gallery space and • 1770 Biscayne Boulevard Project, this Morrocco Enterprises recently purchased this site for classrooms at work. The Art Institute will lease 100,000 square feet of space in the Omni, the development of multifamily project. However, as of the date of this report no additional just a tenth of the 1.2 million square feet available. Drawings of the project show an Art information regarding this development was available. Deco redo of the drab Omni facade, with multicolored spotlights illuminating new glass and a finned marquee entrance. • The proposed Tuttle Street project to be developed by Dacra which will consist of four modern-art motif buildings that will create the gateway to Miami's Design District. Based on an inspection of the neighborhood the area appears to be in the process of re- Architects to the project include John Keenen and Museum of Modern Art curator Terence gentrification. Given the continued proactive stance of the City as well as area residents the Riley of Keenen/Riley; Ali Tayar of Parallel Design Partnership, Craig Konyk of Konyk neighborhood should continue its revitalization trend. Architecture; Walter Chatham of New York; and Enrique Norten of Enrique Norten Arquitectos of Mexico City. The $100 million complex is to consist of retail, showroom and office space. Keenen/Riley is designing the two-story, 15,000-square-foot glass building that will face Biscayne Boulevard and 39th Street (to be renamed Tuttle Street). Another two- story building on NE 2nd Street and 39th Street will feature brick walls with distinctive sharp angles and glass. Across 39th Street, Dacra plans to build an office tower with showroom and retail space on the first two floors, Mr. Gretenstein said. The group still has to decide how many floors of office space they will build. "The amount of office space will be driven by the demand," he said. The entire project will add about 200,000 square feet of retail and showroom space and 100,000 square feet of office space to the market, Mr. Gretenstein said. The group is starting to draw construction plans to apply for a building permit and work on securing the project's financing, he said. • Margaret Pace Park, a 6.3± acre park located along Biscayne Bay got a $1.2 million renovation, that includes soccer fields, cricket fields, volleyball courts, tennis courts, mosaic J-19 walkways, new lighting, a tot lot and other amenities. • Another project, to be constructed by The Finger Company, began construction on a 4.5± acre parcel that runs from Biscayne Boulevard to Biscayne Bay, and from 19th Street to 20th Terrace. The structures, to be named Biscayne Village, include a 5-story building on Biscayne Boulevard, a 6 story building overlooking 20th Terrace and a 15-story tower facing the bay. Plans for the development include more than 180 loft units, with 12-foot interiors featuring exposed ductwork to complement traditional one- two- and three-bedroom units. Rents are to range from $750 to $2,500 monthly. The development will include 701 parking spaces in a four story concealed garage and 19,000± SF of retail on the ground floor. Construction is projected to take 12 months. The project is projected to cost $97 million.

29 30 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants FLORIDA HOUSING MARKET FLORIDA HOUSING MARKET

POPULATION Florida Population Distribution According to information from the 2000 Census, Florida's population, currently at 15,982,378, grew 65+ by 3,044,452 during the 90's. This represents a growth rate of 23.5% whereas over the same time 18% period, the US population grew by 10.17%. 40-64 0-14 Florida's growth continues to be dominated by net migration. During the period from 1990 to 1999, 31% it is estimated that 17.6% of Florida's growth was due to natural increase (the excess of births over 19% deaths) and 82.4% was due to net migration. Florida is the nation's fourth most populous state behind California with 33.1 million persons, Texas with 20.0 million, and New York with 18.2 million. The Census Bureau projects that Florida will become the nation's third largest state between 2015 and 2020. 15-19 Broward County added the most residents between 1990 and 2000 (367,530; 29.3% growth) and 20-39 6% Flagler County experienced the highest rate of growth during the period (73.6 percent). Growth in 26% five Florida counties exceeded 50% between 1990 and 2000 (Flagler, Sumter, Collier, Wakulla, and Source: Florida Trend Magazine, Economic Yearbook, April 2001 Osceola) and was between 40% and 50% in another five (Gilchrist, St. Johns, Walton, Santa Rosa, and Hendry). ECONOMY Over the next three decades, Florida's total population is expected to increase 6.5 million people. Florida is not immune from a recession, economists say, but a slowdown is not likely to hit the state Florida is expected to gain 1.9 million people through international migration between 1995 and as hard as the rest of the US economy. So far, the national slump is concentrated in manufacturing, 2025, placing it 3rd largest among the net international migration gains among the 50 states and and Florida has only half the national average of manufacturing plants. Still, Florida has not escaped District of Columbia. the downturn. The state has felt the impact in its high-tech sector, which has seen layoffs, and cutbacks at call centers. The number and proportion of Florida's population that is aged 18 and over is expected to increase from 10.8 million or 76.2 percent in 1995 to 11.7 million or 77 percent in 2000. This population is The state's unemployment rate increased to 3.8% in January 2004, and economists predict it will J-20 expected to increase to 16.7 million or 80.8 percent in 2025. rise slightly higher before year's end. Skilled workers, however, are still in big demand. The number of jobs created this year will be between 128,600 and 131,000, the smallest increase in Florida since All states and the District of Columbia are projected to show a decline in the proportion of youth 1992. (under 20 years old) in their populations. The percentage of Florida's population classified as youth is projected to decrease from 25% percent in 2000 to 21.4% in 2025. One important question is how much the lagging stock market will affect spending by wealthy retirees. While Americans overall earn 65.4% of income from the workplace, Floridians take home only 55.7% As the Baby Boomer generation (those born between 1946 and 1964) reaches retirement age, the from work, with 25.5% coming from investments (vs. 18.1% nationally). growth of the elderly population (65 and over) is expected to accelerate rapidly. The size of the elderly population is projected to increase in all states and the District of Columbia over the 30-year period. The proportion of Florida's population classified as elderly is expected to increase from 18.4 percent in 2000 to 26.3 percent in 2025. Among the 50 states and the District of Columbia, the state of Florida is projected to have the highest proportion of elderly in 2025. The following chart displays the age distribution of the population of Florida.

31 32 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants FLORIDA HOUSING MARKET FLORIDA HOUSING MARKET

FLORIDA REAL ESTATE Bonnie Mott, president-elect of the Gainesville-Alachua County Association of Realtors and broker-owner of Prudential Preferred Properties of Gainesville, agrees that historically low Low mortgage interest rates and out-of-state residents spurred strong Florida home sales in mortgage rates are fueling the area's strong housing market. “It's a combination of factors: the February2004. A total of 16,127 single-family existing homes changed hands statewide in February interest rates are still low and have dropped from what they were at the first of the year," she says. for an 18 percent increase over the 13,642 homes sold a year ago, according to the Florida "We also are experiencing a lot of new development in the Gainesville area and the prices of new Association of Realtors®. homes are increasing, which is encouraging people to look at existing homes.” The statewide median sales price rose 13 percent to $162,300 in January; a year ago, it was Other smaller markets reporting increases in last month’s resales activity include: Fort Walton $143,400. In 1999, the statewide median sales price was $100,200, which shows an increase of 62 Beach, where 300 homes changed hands for a 33 percent increase; and Naples, where 373 homes percent over the five-year period, according to FAR records. The median is a typical market price sold for a 28 percent gain. The median sales price in those markets also rose: in Naples, 42 percent where half the homes sold for more, half for less. to $389,000 (the highest in the state); and in Fort Walton Beach, 16 percent to $157,700. Florida’s median sales price compares favorably to the national median sales price for existing The following chart displays the relationship between Florida and the United States in terms of single-family homes, which was $168,700 in January 2004, up 5.4 percent from the previous population, and home building activity: January. In California, the statewide median resales price was $405,720 in January; in New York, it was $239,900; in North Carolina, the average resales price was $181,477; in Illinois, the median price was $166,200; and in Ohio, the average price for an existing home last month was $137,297. Florida In Comparison To The United States 11.00% Mortgage interest rates that remained near record lows in February prompted buyers in markets across the state to become homeowners. Last month, interest rates for a 30-year fixed-rate mortgage averaged 5.64 percent compared to the 5.84 percent average rate in February 2003. FAR’s sales 10.00% figures reflect closings, which typically occur 30 to 90 days after sales contracts are written. 9.00% Among the state’s larger markets, the Tampa-St. Petersburg-Clearwater Metropolitan Statistical Area (MSA) reported increased resales activity and a boost in the median sales price in February. A 8.00% total of 2,561 homes sold in the area last month compared to 1,993 homes a year ago for a 28 percent gain. The median sales price rose 9 percent to $147,100; a year ago, it was $135,100.

J-21 7.00% Alan Riley, chairman of the Pinellas Suncoast Association of Realtors and broker-owner of RE/MAX Affiliates in Seminole, says low mortgage rates are attracting buyers, who are drawn to 6.00% the Tampa Bay area's quality of life. “We have a nice mix of bedroom communities in the Tampa Bay area, which means there is a wide range of inventory for people to choose from when it comes 5.00% to finding the home that's right for them,” he says. “All the economic indicators here remain very positive, which is good for business and for home sales.” 4.00% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Other large MSAs reporting higher home sales last month compared to a year ago include: Orlando, where 2,577 homes changed hands for a 29 percent jump; and West Palm Beach-Boca Raton, where Florida Populaton as % of US Population 1,074 homes sold for a 7 percent increase. The median sales price also rose in those markets over Florida Single Family Permits as % of US Single Family Permits the same time period: in West Palm Beach-Boca Raton, 16 percent to $261,000; and in Orlando, 9 Florida All Home Permits as % of US All Home Permits percent to $148,100. Source: US Census and National Association of Home Builders As for smaller markets in Florida, February was a good month for Gainesville, with a total of 203 homes sold compared to 155 homes a year ago for a 31 percent boost. The area's median sales price In 2003, Florida’s population was 5.74% of the entire United States, but in terms of single family rose 13 percent to $148,100; a year ago, it was $131,500. home permits, Florida represented 10.74% of the entire United States and in terms of all home permits, Florida represented 11.33% of the entire United States. Therefore, Florida is receiving approximately 187% of its fair share in terms of single-family home permits and approximately 197% of its fair share in terms of all home permits, indicating a strong housing market. As can be seen in the previous chart, this has been a consistent occurrence. 33 34 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants FLORIDA HOUSING MARKET MIAMI-DADE COUNTY HOUSING MARKET

CONCLUSION PROJECTED HOUSING NEEDS The current market for residential housing in Florida is considered strong. In many regions of the State, residential homebuilding plays an important role in the economic vitality of the region. The Future housing needs can be projected by population growth and housing trends. The following subject’s market is unique as its lack land for development. As stated the neighborhood is 95% information analyzes these aspects of Miami-Dade County. developed with a number of tracts being redeveloped. Based on the lack of land within the area as well as within Miami-Dade County the market is seeing and experiencing denser levels of Population Growth development with new construction focused on mid-rise and high-rise projects. It is in this manner that Miami-Dade County is finding a way to accommodate the increasing demand by new residents Overall, tourism, business and the quality of life in Miami-Dade County has helped the population to the area, as well as individuals who own second or third homes in Florida. The factors noted here increase by 1,015,526 people or 82% from 1970 to 2001. These catalysts are also the mainstay for point toward the ultimate success of the subject. the expected population increase of 736,466 people or 32% by 2025 (projected by Miami-Dade County Department of Planning and Zoning). This projected population increase is accompanied by a related increase in housing needs. The following charts displays the historical and projected population growth within Miami-Dade County:

Historical Population Growth and Projection

2,500,000

2,000,000

1,500,000

J-22 1,000,000

500,000

0

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Miami-Dade County Source: Florida Research & Economic Database (FRED) reflects most current data available

Average Annual Growth 1970 to 2001 1975 to 2001 1980 to 2001 1990 to 2001 1.93% 2.01% 1.79% 1.57% 32,841 35,378 33,318 32,272

35 36 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY HOUSING MARKET MIAMI-DADE COUNTY HOUSING MARKET

Since 1970, the population in Miami-Dade County has increased an average of 1.93% per year, Births are derived by applying a crude birth rate to the mid-year population. The rate used in these which equates to 32,841 new residents per year. While the average annual growth as a percentage of projections shows a slow decline over time from 14.6 births per 100,000 population to 13.2 by the total population has slowed over the years, the actual population increase has remained stable at year 2020. This is a somewhat faster rate of decline than that used in the previous projections and is approximately 33,000 persons per year. in line with recent trends. Deaths are derived by applying a death rate to the mid-year population. The rate used in these projections shows a slow decline over time from 8.6 deaths per 100,000 Miami-Dade County Department of Planning and Zoning is projecting an average population population to 8.0 by the year 2020. increase of 30,642 persons per year from 2001 to 2025, which is just under the county’s historical population increase since 1970. These projections by Miami-Dade County, which are a combination Internal Revenue Service (IRS) data is the primary source of information about domestic migration of natural increase and net migration, are displayed in the following chart: flows. IRS data on personal exemptions on matched income tax returns was used to estimate the flow of migrants from one county to another. The Census Bureau and the University of Florida Resident Resident Natural Forgein Domestic Net Natural Net Population Bureau of Economic and Business Research use an IRS-based rate of migration that is applied to the total population. The second part deals with immigration from other countries. This is primarily Year Births - Deaths = Increase Migration + Migration = Migration Increase + Migration = Change a review of census estimates of immigration. 2001 31,868 - 19,036 = 12,832 35,572 + (18,570) = 17,002 12,832 + 17,002 = 29,834 2002 32,033 - 19,220 = 12,813 37,031 + (20,117) = 16,914 12,813 + 16,914 = 29,727 Overall, based on Miami-Dade County’s historical population increase, (32,814 persons per year 2003 32,229 - 19,409 = 12,820 37,537 + (20,664) = 16,873 12,820 + 16,873 = 29,693 from 1970 to 2001), the projected population increase (30,642 persons per year from 2001 to 2025) 2004 32,440 - 19,598 = 12,842 38,048 + (21,211) = 16,837 12,842 + 16,837 = 29,679 by the Miami-Dade County Department of Planning and Zoning appears appropriate. 2005 32,667 - 19,785 = 12,882 38,564 + (21,759) = 16,805 12,882 + 16,805 = 29,687 2006 32,908 - 19,971 = 12,937 39,083 + (22,306) = 16,777 12,937 + 16,777 = 29,714 Housing Trends 2007 33,162 - 20,156 = 13,006 39,604 + (22,853) = 16,751 13,006 + 16,751 = 29,757 Between 1975 and 2001, there has been 160,236 single-family and 184,276 multi-family building 2008 33,429 - 20,340 = 13,089 40,130 + (23,399) = 16,731 13,089 + 16,731 = 29,820 permits issued in Miami-Dade County for a total of 344,512 residential building permits. This 2009 33,707 - 20,524 = 13,183 40,661 + (23,947) = 16,714 13,183 + 16,714 = 29,897 information is graphically displayed in the chart below: 2010 33,995 - 20,706 = 13,289 41,194 + (24,493) = 16,701 13,289 + 16,701 = 29,990 2011 34,294 - 20,889 = 13,405 41,732 + (25,041) = 16,691 13,405 + 16,691 = 30,096 Housing Permits 2012 34,603 - 21,071 = 13,532 42,276 + (25,588) = 16,688 13,532 + 16,688 = 30,220 Miami-Dade County 2013 34,921 - 21,253 = 13,668 42,820 + (26,136) = 16,684 13,668 + 16,684 = 30,352 2014 35,274 - 21,434 = 43,370 + (26,682) = 13,840 + 16,688 = J-23 13,840 16,688 30,528 14,000 2015 35,581 - 21,616 = 13,965 43,924 + (27,229) = 16,695 13,965 + 16,695 = 30,660 2016 35,923 - 21,797 = 14,126 44,480 + (27,776) = 16,704 14,126 + 16,704 = 30,830 12,000 2017 36,273 - 21,979 = 14,294 45,043 + (28,324) = 16,719 14,294 + 16,719 = 31,013 2018 36,629 - 22,161 = 14,468 45,609 + (28,871) = 16,738 14,468 + 16,738 = 31,206 10,000 2019 36,993 - 22,343 = 14,650 45,177 + (29,418) = 15,759 14,650 + 15,759 = 30,409 2020 37,343 - 22,514 = 14,829 46,750 + (29,965) = 16,785 14,829 + 16,785 = 31,614 8,000 2021 37,726 - 22,701 = 15,025 47,333 + (30,512) = 16,821 15,025 + 16,821 = 31,846 2022 38,109 - 22,885 = 15,224 47,912 + (31,059) = 16,853 15,224 + 16,853 = 32,077 6,000 2023 38,498 - 23,069 = 15,429 48,491 + (31,606) = 16,885 15,429 + 16,885 = 32,314 4,000 2024 38,892 - 23,523 = 15,369 49,071 + (32,153) = 16,918 15,369 + 16,918 = 32,287 2025 39,292 - 23,439 = 15,853 49,653 + (32,700) = 16,953 15,853 + 16,953 = 32,806 2,000 Average 35,152 - 21,257 = 13,895 42,843 + (26,095) = 16,747 13,895 + 16,747 = 30,642

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Source: Miami-Dade County Department of Planning and Zoning Single Family Permits Multi Family Permits Miami-Dade County is still an immigrant community with a large immigrant inflow somewhat offset by a net outflow of population to neighboring counties. Natural increase, the excess of births over deaths, still contributes more than 40 percent of the growth. Source: Florida Research & Economic Database (FRED) reflects most current data available

37 38 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY HOUSING MARKET MIAMI-DADE COUNTY HOUSING MARKET

Average Annual Building Permits 1975-2001 1990-2001 1995-2001 1998-2001 Housing Types Single Family Permits 5,935 5,630 5,837 6,135 Multi Family Permits 6,825 5,068 5,785 6,465 According to the 2000 US Census, approximately 45% of all the housing units in Miami-Dade Total 12,760 10,699 11,622 12,600 County, were renter occupied and 55% were owner occupied. Since 1960, this percentage has fluctuated by only 4.1 percentage points from a low of 44.6% in the 1960 Census to a high of 48.7% Source: Florida Research & Economic Database (FRED) reflects most current data available in the 1990 Census. This information can be seen in the chart below:

Since 1975, Miami-Dade County has issued an average of 12,760 building permits per year. Over that same time, Miami-Dade County has had an average population growth of 35,081 persons per Year 1960 1970 1980 1990 2000 year. This results in an average household size of 2.75 persons (35,081 / 12,760 = 2.75) or 0.36 Total Housing Stock 348,946 453,908 665,382 771,288 852,278 housing permits issued per person moving into Miami-Dade County. This trend has been consistent, Occupied Units 308,325 428,026 609,830 692,355 776,774 as can be seen in the chart below: Vacant Units 40,621 25,882 55,552 78,933 75,504 Owner Occupied Units 183,171 231,529 332,527 375,912 449,325 As % of Total Occupied Units 59.41% 54.09% 54.53% 54.29% 57.85% 1975-2001 1985-2001 1990-2001 Renter Occupied Units 125,154 196,497 277,303 316,443 327,449 Average Annual Population Growth 35,081 31,383 32,272 As % of Total Occupied Units 40.59% 45.91% 45.47% 45.71% 42.15% Average Annual Housing Permits 12,760 12,439 10,699 Housing Permits Per Person 0.36 0.40 0.33 Owned Units Source: Florida Research & Economic Database (FRED) reflects most current data available Vacant Owned Units @ 25% * 10,155 6,471 13,888 19,733 18,876 Total Owned Units 193,326 238,000 346,415 395,645 468,201 Based on the Miami-Dade County historical housing trends, we have estimated that future population growth will generate approximately 0.35 housing permits per person that moves into the As % of Total Housing Stock 55.40% 52.43% 52.06% 51.30% 54.94% county. Therefore, based on an average annual population increase of 30,642 from 2001 to 2025,

J-24 Miami-Dade County will need approximately 10,725 housing units per year (30,642 x 0.35 = Rental Units 10,725). Vacant Renter Units @ 75% * 30,466 19,412 41,664 59,200 56,628 Total Renter Units 155,620 215,909 318,967 375,643 384,077 As % of Total Housing Stock 44.60% 47.57% 47.94% 48.70% 45.06%

Source: US Census Bureau (reflects most current data available) *According to the 2000 Census, of all vacant housing stock approximately 25% can be attributed to owned units and 75% can be attributed to renter occupied units. Based on Miami-Dade County’s historical housing trends, we have concluded that of all future housing units, approximately 55% will be owned units and 45% will be rental units. These projections include an allowance for vacancy.

39 40 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY HOUSING MARKET RENTAL APARTMENT OVERVIEW

Housing Projections NATIONAL TRENDS

To recap, we have come to the following conclusions for Miami-Dade County’s future population According to the Korpacz real estate investor survey, First Quarter, 2004, according to the Korpaz and housing growth. Real Estate Investor Survey, first quarter - 2004, as a result of incessant additions to supply and Owner Occupied Units dormant rental demand, the underlying fundamentals of the national apartment market continue to weaken. In fact, the number of vacant apartment units in the top 50 U.S. markets has more than Average Annual Population Increase - 30,642 Persons Per Year Through 2025 doubled in the past three years, according to Reis, Inc. Unfortunately, this trend is not expected to New Housing Construction - 0.35 Housing Units Per New Person reverse itself anytime soon. Reis predicts that the national apartment vacancy rate will rise to 7.0% Average Annual Housing Need - 10,725 Units - (30,642 x 0.35) by the end of 2004, up from 6.8% at the end of 2003. Percentage That Will Be Owner Units - 55% Average Annual Owner Housing Need - 5,899 Units - (10,725 x 55%) Although apartment construction levels have declined significantly over the past five years, they are still too high when compared to the recent decline in demand. Job losses and low interest rates have Rental Units reduced the number of would-be renters. The result is an oversupply of space that has depressed rental rates and has made concessions commonplace throughout most of this market. Tenants that Average Annual Population Increase - 30,642 Persons Per Year Through 2025 New Housing Construction - 0.35 Housing Units Per New Person sign a one-year lease can receive as much as three months of free rent in many markets. The average amount of free rent for a one-year lease is nearly 1.5 months. Average Annual Housing Need - 10,725 Units - (30,642 x 0.35) Percentage That Will Be Rental Units - 45% Disappointingly, concessions may likely disappear later rather than sooner. Despite current Average Annual Rental Housing Need - 4,826 Units - (10,725 x 45%) oversupply problems, nearly 107,000 units are expected to be added to an already saturated market in 2004, according to Reis. However, many developers and owners plan to increase development Based on the previous analysis, we have estimated that Miami-Dade County will require activity in select markets in 2004, Those developers believe that the favorable long-term aspects of approximately 10,725 new housing units per year over the next 20 years, of which 55% will be the industry far outweigh its current short-term troubles. owner occupied units and 45% will be rental units. Specifically, the number of households lead by 25- to 34-year-old individuals, considered the prime OVERALL CONCLUSION rental target, is forecast to increase by 584,000 between 2006 and 2010, according to Property & Portfolio Research. Furthermore, many investors expect the apartment sector to be the first property The driving economic forces behind the current and future success of the Miami-Dade County sector to fully rebound.

J-25 economy are tourism, business and quality of life. All these factors are strong and expected to contribute to future population growth within Miami-Dade County. Due to the strength of the Many investors believe the apartment sector will come back quicker than any other property type. Miami-Dade County economy, we have projected a average annual population increase of 30,642 Such expectations are likely the reasons that apartment properties also continue to sell at a feverish residents, which will be accompanied by an average annual increase 10,725 housing units (55% pace. In fact, sales volume of significant apartment assets surged to $8.0 billion in the fourth quarter owned occupied and 45% rental units). Overall, the future population growth and subsequent of 2003, a total 10.0% higher than any other quarter on record, according to Real Capital Analytics, housing growth and supporting retail for the Miami-Dade County market are projected to be strong. Inc. In addition, a significant percentage of the purchasers of these properties are often from such Moreover, for all of 2003, sales in the apartment sector outpaced all other property types and posted diverse locations as the Northern United States, South America, Canada and Europe. Buyers often over a 20.0% increase in activity by both volume and number of transactions. Strong investment flock to a particular market because they perceive value in relation to other global locations. Often demand, however, also continues to push sale prices up and overall capitalization rates (OARs) units in the market are inhabited only a few months of the year. Housing growth in this market down. This quarter, the average OAR for the national apartment market declined 20 basis points to segment often has less to do with the area’s median income and projected population growth than it reach 7.25%, the lowest rate ever posted for this property segment in our Survey. Just 12 months does with the value of the dollar versus foreign currency and the social trends within the local earlier, the average OAR was 8.14%. community. The average internal rate of return (IRRs) for this market also continues to decline and reached 9.95% this quarter, 93 basis points below the average just one year ago.

41 42 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

MIAMI-DADE COUNTY APARTMENT MARKET A total of 625 new apartment units were completed in Miami-Dade County during the fourth quarter of 2003 and 2,168 units were started under construction. The subject is located in the Miami-Dade County apartment market. According to the Reinhold P. Wolff Economic Research, First Quarter 2004, Miami-Dade County Quarterly Housing Report, the Apartment construction starts during 2003 totaled 4,372 units, up 23.4% over the 3,544 units started vacancy rate in mature (18 + months old) rental apartment complexes in Miami-Dade County during 2002. New unit completions totaled 2,392, a 6.1% drop from the 2,548 units completed increased slightly from 4.7% in November 2003 to 5.1% in February 2004. The February 2004 during 2002. vacancy rate is slightly higher than the 4.7% level of February 2003. For the six-month period ending with December 2003 an average of 243 new rental units were The vacancy rate in Miami-Dade County was found to be the highest in the Southwest absorbed each month. A total of 779 new units were available at the end of December 2003, which Dade/Homestead area at 6.9%. The Central and North Miami Beach area and the Northeast Miami represented 3.2 months of supply at the pace of absorption over the past six months. During the six area (subject’s submarket) had the third highest level of vacancies at 6.7%. The lowest vacancy rate month period an average of 120 units were being completed each month while 472 units were was found in the Hialeah area at 0.8% and the Sunset/East Sunset/West Sunset area at 1.4%. started each month. The Miami-Dade County apartment market is broken into 17 submarkets. The occupancy by About 4,724 apartment units are under construction in Miami-Dade County. New rental apartment submarket is broken down as follows: building activity remains below the estimated demand level for 6,747 units per year. Apartment vacancy rates should remain relatively low in Miami-Dade County on an overall basis for the near- Feb Aug Feb Aug Nov May term future as new supply remains under the indicated demand for additional apartments. In some Occupancy By Sector 2004 2003 2003 2002 2001 2001 submarkets, however, the vacancy rate is moderately excessive even through they have declined in N Miami Beach 94.1% 95.3% 91.6% 93.2% 94.5% 95.7% recent months. N Miami 95.7% 94.6% 93.0% 94.7% 96.5% 94.9% Carol City 96.0% 96.7% 97.5% 96.4% 98.7% 97.4% RENTAL RATES Miami Lakes 95.7% 95.1% 94.8% 96.4% 95.5% 96.4% NE Miami * 93.3% 95.6% 97.2% 95.0% 98.8% 99.2% The overall average monthly rent for apartments in mature rental developments in Miami-Dade NW Miami 94.1% 94.1% 92.1% 92.9% 96.8% 98.5% County increased by $2 to a total of $993 from November 2003 to February 2004. The February Hialeah 99.9% 99.3% 96.5% 99.2% 98.5% 99.5% 2004 overall average rent of $993 is 3.4% higher than the $960 average rent found one year earlier. Miami Springs/Flagler North 93.6% 96.0% 95.6% 96.3% 98.4% 98.8% During the most recent three-month period one-bedroom rents declined by $12 to $863, two- Bayshore 94.1% 92.2% 93.5% 91.7% 92.0% 96.2% bedroom rents increase by $5 to $1,093, and three-bedroom rents increased by $52 to $1,334.

J-26 Old SW/N Gables/S Miami 98.2% 97.7% 97.2% 98.2% 98.6% 99.6% Efficiency unit rents declined by $8 to $722. Changes in projects participating in the surveys from Sunset/E Sunset/W Sunset 98.6% 98.8% 97.7% 99.4% 99.7% 100% one period to another can result in considerable fluctuations for efficiency and three bedroom units East Kendall 96.6% 97.0% 96.9% 98.3% 98.3% 99.8% where the supply is more limited. Kendall West 96.0% 96.9% 96.8% 98.3% 97.3% 99.6% Howard/Tamiami/West Dade/ Perrine/Cutler Ridge 93.9% 95.6% 94.3% 95.4% 97.5% 99.0% SW Dade/Homestead 93.1% 97.9% 99.0% 98.3% 97.8% 99.4% South Beach 93.1% 92.5% 94.4% 89.8% 94.8% 97.0% Central Beach/N Beach/Surfside/ Beach Areas North 93.3% 93.0% 93.0% 94.3% 94.9% 96.8% Miami-Dade County 94.9% 95.3% 96.0% 96.9% 98.0% 97.9% *Subject's Submarket Source: Reinhold P. Wolff Economic Research, Inc., Third Quarter 2003

ABSORPTION OF NEW RENTALS During the fourth quarter of 2003 a total of 624 new rental apartment units were absorbed in Miami- Dade County. This is 25.0% less than the 832 absorbed in the preceding quarter but 51.8% more than the 411 absorbed in the fourth quarter of 2002. The 3,202 new apartments absorbed through February 2004 is 52.9% greater than the 2,094 absorbed during the same period of 2002. 43 44 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

Average Rents as of August 2003 Unit Type Monthly Rent Average Rents as of August 2003 Unit Type Monthly Rent N Miami Beach 1BD $928 South Beach 1BD 1,324 2BD 1,256 2BD 1,963 3BD 1,531 3BD 2,917 N Miami 1BD 770 Central Beach/N Beach/Surfside/ 1BD 1,107 2BD 1,003 Beach Areas N 2BD 1,488 3BD ----- 3BD 2,222 Carol City 1BD 664 * Subject's market 2BD 817 3BD 922 Source: Reinhold P. Wolff Economic Research, Inc. Fourth Quarter 2004 Miami Lakes 1BD 793 2BD 964 The overall average rent per square foot of livable area in apartments throughout Miami-Dade 3BD 1,181 County is 113.4¢. Efficiency units rent for an average of 146.0¢/SF foot while one-bedroom NE Miami * 1BD 1,029 apartments rent for an average of 118.0¢. Two-bedroom apartments rent for an average of 2BD 1,273 109.3¢/SF of livable area and three bedroom units rent for an average of 109.8¢ per square foot. 3BD --- The few four-bedroom apartments offered have an average rent of 98.7¢/SF. NW Miami 1BD 816 2BD 919 The subject's apartment submarket had an occupancy rate of 93.3% as of February 2004. The sub- 3BD 1,100 market’s occupancy rate has ranged from 95.0% to 99.2% over the last few years. The long-term Hialeah 1BD 619 outlook for the Miami-Dade County apartment market is for continued steady demand for rental 2BD 810 housing, which should keep occupancy levels stable with annual rental rates increasing. 3BD 789 Miami Springs/Flagler North 1BD 895 Comparable Rental Properties 2BD 1,134 3BD 1,270 Detailed on the following pages are rental properties located within the subject’s market which Bayshore 1BD 1,701 would compete with any rental product development on the subject site. It is noted that there are 2BD 2,516 several proposed projects to be developed within the subject’s area. These proposed developments J-27 3BD 3,506 are discussed within the Neighborhood Analysis section of this report. Old SW/N Gables/S Gables/S Miami 1BD 776 2BD 1,265 3BD 2,127 Sunset/East Sunset/West Sunset 1BD 605 2BD 831 3BD 935 East Kendall 1BD 778 2BD 961 3BD 1,094 Kendall West 1BD 762 2BD 926 3BD 1,018 Howard/Tamiami/West Dade/ 1BD 815 Perrine/Cutler Ridge 2BD 1,009 3BD 1,160 SW Dade/Homestead 1BD 639 2BD 782 3BD 754

45 46 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW

Multifamily Rent Comparable 1

Name: 22 Biscayne Bay Location: 615 NE 22 Street, Miami, Miami-Dade County, FL Building Design: Concrete/Steel J-28 Complex Amenities: The building has covered parking, fitness center and swimming pool Unit Amenities: The units have standard kitchen, dishwasher, cable tv, granite counters, microwave and full size washer/dryer Year Built: 2003 Dwelling Type: High-rise No of Buildings: 1 No of Stories: 16 No. Of Units: 104 Reported Occupancy: 86.00% Utilities: Landlord pays water/sewer and trash removal Source: Leasing Agent Rent Concessions: None Comments: This property started leasing in October 2003 for an absorption of 13.5 unit per month.

Rent Schedule: Unit Type Size (SF) Rent/Unit/Month Rent/SF/Month 1BD/1BA 643 $950.00 - $1,100.00 $1.48 - $1.71 2BD/2BA 965 $1,325.00 - $1,475.00 $1.37 - $1.53 2BD/2BA 977 $1,350.00 - $1,500.00 $1.38 - $1.54 2BD/2BA 1,007 $1,300.00 - $1,450.00 $1.29 - $1.44

47 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

Multifamily Rent Comparable 2 Multifamily Rent Comparable 2

Bay Parc Plaza Apartments 1756 North Bayshore Drive, Miami, Miami-Dade County, FL

Rent Schedule: Unit Type Size (SF) Rent/Unit/Month Rent/SF/Month 1BD/1.5BA 643 $1,422.00 $2.21 1BD/1.5BA 771 $1,434.00 $1.86 1BD/1BA 541 $1,234.00 - $1,295.00 $2.28 - $2.39 1BD/1BA 598 $1,482.00 - $1,688.00 $2.48 - $2.82 1BD/1BA 634 $1,264.00 - $1,537.00 $1.99 - $2.42 1BD/1BA 649 $1,264.00 - $1,537.00 $1.95 - $2.37 1BD/1BA 670 $1,234.00 - $1,326.00 $1.84 - $1.98 1BD/1BA 696 $1,264.00 - $1,450.00 $1.82 - $2.08 1BD/1BA with Den 1,035 $1,850.00 $1.79 1BD/1BA with Den 1,048 $1,860.00 $1.77 Name: Bay Parc Plaza Apartments 2BD/2BA 820 $1,997.00 - $2,396.00 $2.44 - $2.92 Location: 1756 North Bayshore Drive, Miami, Miami-Dade 2BD/2BA 874 $1,736.00 - $2,099.00 $1.99 - $2.40 County, FL 2BD/2BA 996 $1,906.00 - $2,200.00 $1.91 - $2.21 Building Design: Concrete/Steel 2BD/2BA 1,284 $2,240.00 $1.74 Complex Amenities: Covered parking, swimming pool, hot tub, fitness Studio 351 $962.00 $2.74 center, sauna, gym and housekeeping services Studio 368 $1,059.00 $2.88

J-29 Unit Amenities: Range, refrigerator, ice maker, garbage disposal, dishwasher, washer/dryer, cable TV, private terrace, miniblinds, vertical blinds and microwave Year Built: 2000 Dwelling Type: High-rise No of Buildings: 1 No of Stories: 20 No. Of Units: 471 Reported Occupancy: 98.00% Utilities: Tenant pays electric, landlord pays water and sewer, garbage, pest control and cable TV Source: Leasing Agent Rent Concessions: None noted Comments: The range in rental rates equates to $10.00/unit per floor. Some units also have view premiums.

48 49 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

Multifamily Rent Comparable 3 Multifamily Rent Comparable 3

The Towers at Park West (formerly Bayview Towers) 800 North Miami Avenue, Miami, Miami-Dade County, FL

Rent Schedule: Unit Type Size (SF) Rent/Unit/Month Rent/SF/Month 1BD/1BA 678 $785.00 - $850.00 $1.16 - $1.25 1BD/1BA 678 $785.00 - $850.00 $1.16 - $1.25 1BD/1BA 678 $785.00 - $850.00 $1.16 - $1.25 1BD/1BA 678 $785.00 - $850.00 $1.16 - $1.25 1BD/1BA 793 $850.00 - $895.00 $1.07 - $1.13 1BD/1BA 793 $850.00 - $895.00 $1.07 - $1.13 2BD/2BA 997 $950.00 - $995.00 $0.95 - $1.00 2BD/2BA 997 $950.00 - $995.00 $0.95 - $1.00 2BD/2BA 1,037 $980.00 - $1,075.00 $0.95 - $1.04 2BD/2BA 1,037 $980.00 - $1,075.00 $0.95 - $1.04 Name: The Towers at Park West (formerly Bayview Towers) Location: 800 North Miami Avenue, Miami, Miami-Dade County, FL 33136 Building Design: Concrete/Steel the East Tower has 16 stories, and the West Tower has 21 stories. Complex Amenities: Swimming pool, hot tub, volleyball, tennis, basketball,

J-30 and rooftop jogging trail, picnic areas with grills, fitness center, covered parking garage and laundry facilities in each tower Unit Amenities: Kitchens equipped with dishwasher, frost free refrigerator, garbage disposal, range and oven, balconies in some units, vertical blinds, and carpeting Year Built: 1988 Dwelling Type: High-rise No of Buildings: 2 No of Stories: 21 No. Of Units: 355 Reported Occupancy: 90.00% Utilities: Water, sewer, trash collection is included in rent Source: Leasing Agent Rent Concessions: None noted

50 51 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

Multifamily Rent Comparable 4 Multifamily Rent Comparable 4

Park Place by the Bay 915 Northwest 1st Avenue, Miami, Miami-Dade County, FL

Rent Schedule: Unit Type Size (SF) Rent/Unit/Month Rent/SF/Month 1BD/1BA 597 $760.00 - $810.00 $1.27 - $1.36 1BD/1BA 620 $710.00 $1.15 1BD/1BA 665 $745.00 - $795.00 $1.12 - $1.20 1BD/1BA 709 $795.00 - $895.00 $1.12 - $1.26 1BD/1BA 712 $725.00 $1.02 1BD/1BA 805 $765.00 $0.95 1BD/1BA 831 $805.00 - $935.00 $0.97 - $1.13 1BD/1BA 1,150 $775.00 - $885.00 $0.67 - $0.77 2BD/2BA 817 $800.00 - $890.00 $0.98 - $1.09 2BD/2BA 830 $855.00 - $925.00 $1.03 - $1.11 3BD/2BA 1,164 $1,270.00 $1.09 Name: Park Place by the Bay 3BD/2BA 1,189 $1,270.00 $1.07 Location: 915 Northwest 1st Avenue, Miami, Miami-Dade 3BD/2BA 1,337 $1,270.00 $0.95 County, FL Building Design: Concrete Block with Stucco Complex Amenities: 24-hour concierge, laundry facilities, controlled access to building, penthouse exercise facilities, 5-level J-31 covered garage, oversized balconies with city and water views, Olympic size pool with hot tub Unit Amenities: Clubhouse, gated access, fitness center, laundry facility, access to public transportation, swimming pool, hot tub Year Built: 1995 Dwelling Type: High-rise No of Buildings: 1 No of Stories: 31 No. Of Units: 463 Reported Occupancy: 95.00% Utilities: water, sewer, garbage and cable television Source: Leasing Agent Rent Concessions: None

52 53 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

Multifamily Rent Comparable 5 Multifamily Rent Comparable 4

Porta di Oro 479 NE 30th Street, Miami, Miami-Dade County, FL

Rent Schedule: Unit Type Size (SF) Rent/Unit/Month Rent/SF/Month 1BD/1BA 560 $810.00 $1.45 1BD/1BA 629 $910.00 $1.45 1BD/1BA 746 $1,010.00 $1.35 2BD/2BA 755 $1,325.00 $1.75 2BD/2BA 880 $1,250.00 $1.42 2BD/2BA 893 $1,250.00 $1.40 2BD/2BA with Den 1,184 $1,480.00 $1.25

Name: Porta di Oro Location: 479 NE 30 Street, Miami, Miami-Dade County, FL Building Design: Concrete/Steel Complex Amenities: The building has a clubroom, fitness center, extra storage, parking garage and swimming pool Unit Amenities: Each unit has standard kitchen, dishwasher, cable tv, J-32 microwave and washer/dryer. Year Built: 2003 Dwelling Type: high-rise No of Buildings: 1 No of Stories: 9 No. Of Units: 89 Reported Occupancy: 90.00% Utilities: Landlord pays water/sewer and trash removal Source: Leasing Agent Rent Concessions: None noted Comments: This property started leasing in May 2003, for an absorption of 11.43 unit per month.

54 55 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

Multifamily Rent Comparable 6 Summary of Multifamily Rent Comparables

The following chart summarizes each of the comparables surveyed:

Property Name Unit Type Size Rent/Month Rent/SF 22 Biscayne Bay 1BD/1BA 643 $950.00 - $1,100.00 $1.48 - $1.71 2BD/2BA 965 $1,325.00 - $1,475.00 $1.37 - $1.53 2BD/2BA 977 $1,350.00 - $1,500.00 $1.38 - $1.54 2BD/2BA 1,007 $1,300.00 - $1,450.00 $1.29 - $1.44

Bay Parc Plaza Studio 351 $962.00 $2.74 Studio 368 $1,059.00 $2.88 1BD/1BA 541 $1,234.00 - $1,295.00 $2.28 - $2.39 1BD/1BA 598 $1,482.00 - $1,688.00 $2.48 - $2.82 1BD/1BA 634 $1,264.00 - $1,537.00 $1.99 - $2.42 1BD/1.5BA 643 $1,422.00 $2.21 1BD/1BA 649 $1,264.00 - $1,537.00 $1.95 - $2.37 1BD/1BA 670 $1,234.00 - $1,326.00 $1.84 - $1.98 1BD/1BA 696 $1,264.00 - $1,450.00 $1.82 - $2.08 1BD/1.5BA 771 $1,434.00 $1.86 2BD/2BA 820 $1,997.00 - $2,396.00 $2.44 - $2.92 Name: Hamilton on the Bay 2BD/2BA 874 $1,736.00 - $2,099.00 $1.99 - $2.40 Location: 555 NE 34th Street, Miami, Miami-Dade County, FL 33137 2BD/2BA 996 $1,906.00 - $2,200.00 $1.91 - $2.21 Building Design: Conc/steel 1BD/1BA with Den 1,035 $1,850.00 $1.79 Complex Amenities: Building has fitness center, gated access garage, swimming pool, spa and 1BD/1BA with Den 1,048 $1,860.00 $1.77 tennis court 2BD/2BA 1,284 $2,240.00 $1.74

J-33 Unit Amenities: Each unit has standard kitchen, dishwasher, microwave, cable tv, balcony and washer/dryer The Towers at Park West 1BD/1BA 678 $785.00 - $850.00 $1.16 - $1.25 Year Built: 1984 1BD/1BA 793 $850.00 - $895.00 $1.07 - $1.13 Dwelling Type: high-rise 2BD/2BA 997 $950.00 - $995.00 $0.95 - $1.00 No of Buildings: 1 2BD/2BA 1,037 $980.00 - $1,075.00 $0.95 - $1.04 No of Stories: 28 No. Of Units: 262 Park Place by the Bay 1BD/1BA 597 $760.00 - $810.00 $1.27 - $1.36 Reported Occupancy: 95.00% 1BD/1BA 620 $710.00 $1.15 Utilities: water, sewer and trash included in rent 1BD/1BA 665 $745.00 - $795.00 $1.12 - $1.20 Source: Leasing Agent 1BD/1BA 709 $795.00 - $895.00 $1.12 - $1.26 Rent Concessions: None 1BD/1BA 712 $725.00 $1.02 1BD/1BA 805 $765.00 $0.95 Rent Schedule: 2BD/2BA 817 $800.00 - $890.00 $0.98 - $1.09 2BD/2BA 830 $855.00 - $925.00 $1.03 - $1.11 Unit Type Size (SF) Rent/Unit/Month Rent/SF/Month 1BD/1BA 831 $805.00 - $935.00 $0.97 - $1.13 1BD/1.5BA 1,035 $950.00 - $1,150.00 $0.92 - $1.11 1BD/1BA 1,150 $775.00 - $885.00 $0.67 - $0.77 1BD/1.5BA 1,107 $950.00 - $1,150.00 $0.86 - $1.04 3BD/2BA 1,164 $1,270.00 $1.09 1BD/2BA with Den 1,288 $1,055.00 - $1,295.00 $0.82 - $1.01 3BD/2BA 1,189 $1,270.00 $1.07 2BD/2BA 1,398 $1,310.00 - $1,755.00 $0.94 - $1.26 3BD/2BA 1,337 $1,270.00 $0.95 2BD/2BA 1,404 $1,310.00 - $1,755.00 $0.93 - $1.25 3BD/3BA 2,029 $2,075.00 - $2,450.00 $1.02 - $1.21

56 57 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RENTAL APARTMENT OVERVIEW RENTAL APARTMENT OVERVIEW

Property Name Unit Type Size Rent/Month Rent/SF With respect to size the comparables are indicating a square footage range of 541 SF to 1,288 SF Porta di Oro 1BD/1BA 560 $810.00 $1.45 with an average of 772 SF for 1-bedroom units and 755 SF to 1,404 SF with an average of 1,006 SF 1BD/1BA 629 $910.00 $1.45 for 2-bedroom units. The unit sizes for 3-bedroom apartments ranged from 1,164 SF to 2,029 SF 1BD/1BA 746 $1,010.00 $1.35 with an average of 1,430 SF. Excluding units located within Hamilton on the Bay the average size 2BD/2BA 755 $1,325.00 $1.75 of the units decreased to 726 SF for 1-bedroom units, 954 SF for 2-bedroom units and 1,230 SF for 2BD/2BA 880 $1,250.00 $1.42 3-bedroom units. Based on the comparables we believe an appropriate unit size for the subject’s 2BD/2BA 893 $1,250.00 $1.40 units would be 725 SF to 750 SF for 1-bedroom units, 925 SF to 975 SF for 2-bedroom units and 2BD/2BA with Den 1,184 $1,480.00 $1.25 1,250 SF for 3-bedroom units.

Hamilton on the Bay 1BD/1.5BA 1,035 $950.00 - $1,150.00 $0.92 - $1.11 FUTURE RENTAL DEMAND 1BD/1.5BA 1,107 $950.00 - $1,150.00 $0.86 - $1.04 1BD/2BA with Den 1,288 $1,055.00 - $1,295.00 $0.82 - $1.01 Typically, historical absorption rates do not adequately define the need for new rental housing 2BD/2BA 1,398 $1,310.00 - $1,755.00 $0.94 - $1.26 within the market. This is do primarily to the fact that historical absorption levels do not incorporate 2BD/2BA 1,404 $1,310.00 - $1,755.00 $0.93 - $1.25 such future variables as population growth. Analysis of population growth is pivotal to the 3BD/3BA 2,029 $2,075.00 - $2,450.00 $1.02 - $1.21 determination of future housing needs for both single, and multifamily units.

The comparables are indicating a wide range of rental rates on a per unit and per SF basis. For 1- The current Miami-Dade County population is estimated to be 2,342,739. By the year 2005, the bedroom units the properties are indicating a rental rate range of $710 to $1,860 with a per SF range County’s population is anticipated to increase by 59,366, or to 2,402,105. Furthermore, it is noted of $0.67 to $2.82. For 2-bedroom units the properties are indicating a rental rate range of $800 to that as of 2000, Miami-Dade County has approximately 852,278 housing units in the form of single, $2,396 with a per SF range of $0.93 to $2.92. For 3-bedroom units the properties are indicating a and multifamily dwellings. The overall vacancy level for Miami-Dade County is 8.8%, or rental rate range of $1,270 to $2,450 with a per SF range of $0.95 to $1.21. approximately 75,504 dwelling units. Regardless of the existing vacancy level within the County, the area does not possess a sufficient degree of housing to satisfy future demand. Currently, the comparables which will be the strongest competition for the subject are 22 Biscayne Bay, Porta di Oro and Hamilton on the Bay. These properties are indicating rental rates of between Within Miami-Dade County, the average household size is calculated to be 2.84. Based on current $810 and $1,295 on a per unit basis ($0.82 to $1.71 on a per SF basis) for their 1-bedroom units. population projections, Miami-Dade County will need to increase its housing inventory by Two bedroom units range from $1,250 to $1,755 per unit with a rental rate per SF of $0.93 to $1.75. approximately 20,904 (59,366/2.84) dwelling units. However, the projected demand for dwelling

J-34 Three bedroom units range from $2,075 to $2,450 per unit with a rent rate per SF of $1.02 to $1.21. units does not incorporate a vacancy factor. Typically, the market will experience some level of It is noted that all of the comparables are located on the east side of Biscayne Boulevard. Currently, vacancy due to such factors as relocation. Therefore, the projected demand for housing is somewhat 22 Biscayne Bay is a waterfront site. However, there is a new multifamily building which will be understated. We determined that in order to sustain a 10% vacancy level over the projected period, constructed directly in front of the building thereby partially obstructing the existing water views of approximately 2,090 additional dwelling units will be needed. Thus, incorporating a vacancy factor the property. Porta di Oro contains waterviews, however, the site is not located on the water. of 10% a total of 22,994 housing units, or 11,497 units per year will be needed to satisfy demand. Hamilton on the Bay while located directly on the water was constructed in 1984 and represents the oldest property included within the survey. The property contains excellent water views and is able Within the market, housing units are broken down into 2 categories that of owner-occupied, and to garner some of the highest rental rates on a per unit basis while conversely receiving the lowest renter-occupied dwellings. Through the classification and division of housing types, future demand rental rates on a per SF basis. This is due to the size of the units which are larger than those at potential for each category can be calculated. Owner-occupied units within Miami-Dade County are competing properties. estimated to account for approximately 55% of the housing stock, while renter-occupied units account for approximately 45% of the housing stock. In consideration of the presented comparables and an analysis of the existing rental rates at these properties we believe the subject’s units will be able to command a rental rate on a per SF basis of In order to accommodate future growth by the year 2005, Miami-Dade County will need to increase between $1.40 to $1.70 based on the size of the units. Based on historical trends we project that its housing inventory by 22,994 units, or by 11,497 units per year. Utilizing the estimated 55% for rental rates within the market will increase based on CPI or at a rate of approximately 3% per year the number of owner-occupied units, yields approximately 6,323 units per year or 527 units per barring any unforeseen economic downturns. month will be needed to meet demand. Renter-occupied units total 45% of the housing stock; therefore, utilizing this figure yields approximately 5,174 units per year or 431 units per month will be needed to satisfy the projected demand for dwelling units.

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ABSORPTION CONCLUSION

We surveyed new apartments within Miami-Dade County which offer some comparability to the There are numerous planned or proposed rental and condominium units for the Miami market. The subject market for rates of absorption. The historical acceptance of projects within the market is subject development is well located within a remerging neighborhood in the County. Furthermore, also considered. The details regarding absorption of these properties is detailed below: the subject’s development is located within close proximity to Brickell Avenue, Downtown Miami, South Beach as well as the airport. Property Name Total Units Monthly Absorption 22 Biscayne 104 14 It has been estimated that 10% to 20% of condominium units in the market are eventually leased. Porta di Oro 89 9 Based on the current price of new condominiums in the market, the monthly payment, including Summit Brickell 405 41 mortgage, insurance, taxes and association fees of a condominium is significantly higher than the Courvoisier Courts 272 23 rental rates at competing new luxury apartment complexes. Therefore, it is very unlikely that The Floridian 219 44 individuals would purchase a new condominium with the intent of leasing it as an investment. Oakwood (Yacht Club at Brickell) 357 27 Bay Parc 471 27 As a result of increases in population, the need for housing within Miami-Dade County continues to Montserrat 120 23 increase. Therefore, it is reasonable to project that sufficient levels of demand are exhibited for Average 255 26 luxury rental apartment product within the submarket.

There is a slight correlation between a property’s size and its rate of absorption. Other complexes, completed within the past year, had similar absorption rates as the properties shown above.

The newest rental project to be completed within the Brickell area is Summit at Brickell. This property had absorption of 41± units per month.

Oakwood, formerly (Yacht Club at Brickell) located at 1111 Brickell Bay Drive is a recently completed 357-unit high-rise apartment complex. This building had an absorption of 26.8± units per month. J-35 Montserrat Apartments located at 3000 SW 3rd Avenue is a 120-unit, 10-story apartment building, completed in December 1999. According to the owner, there were 180 reservations made 4 months prior to December 1999. This property was fully leased as of February 2000. This equates to an absorption of 22.5± units per month.

Rent Comparable 1, 22 Biscayne Bay, opened in October 2003 and leased 83 units in six months. This equates to an absorption of 13.83 units per month. Rent Comparable 5, Porta di Oro opened in May 2003 and is currently 95% leased. This equates to an absorption of 9 units per month. Demand for rental housing within Miami-Dade County is projected at approximately 5,174 rental units per year, or 431 units per month. The need for additional rental housing was previously documented. We are of the opinion that the units within the subject’s development would experience an absorption level within the range of 9 to 44 units per month. An absorption level toward the lower end of the range appears appropriate for a property containing a relatively low rental pool while a larger building would tend to have an absorption rate toward the higher end of the range.

60 61 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants CONDOMINIUM MARKET OVERVIEW CONDOMINIUM MARKET OVERVIEW

Florida Real Estate - Condominiums Existing condo and co-op sales in the Midwest eased by 2.6 percent from the third quarter to a level of 112,000 units in the fourth quarter, but were 10.9 percent higher than a year earlier. The median Sales of existing condominiums and cooperatives surged to another annual record in 2003, while the resale condo price in the Midwest was $173,400, up 7.2 percent from the fourth quarter of 2002. pace of sales activity in the fourth quarter was the second highest on record, according to the National Association of Realtors®. There was a total of 898,000 existing condo and co-op sales last year, up 9.5 percent from the previous record of 820,000 units in 2002. In the South, condo/co-op resale activity dropped 6.3 percent in the fourth quarter to a 417,000-unit pace; however, this was 6.6 percent higher than the same quarter in 2002. The median price in the South was $136,100, which was 11.7 percent higher than a year ago. The sales pace dropped 5.8 percent in the fourth quarter to a seasonally adjusted annual rate of 914,000 units from a record 970,000-unit pace in the third quarter. Sales remained 10.3 percent In the West, the sales pace of condos and co-ops dropped 9.7 percent from the third quarter to an above the 829,000-unit level of sales activity in the fourth quarter of 2002. annual rate of 233,000 units in the fourth quarter, but was 12.6 percent above the sales rate during the same period in 2002. The median price in the West was $220,000, up 21.9 percent from a year David Lereah, NAR's chief economist, said this marks the eighth consecutive annual record for the earlier. condo and co-op market. "The growth of condo sales since 1995 is unprecedented and reflects a new level of demand in the market," he said. "The easing we saw in the fourth quarter was expected after a record spike in the third quarter, but sales remains exceptionally high. There is a tremendous *The seasonally adjusted annual rate for a particular quarter represents what the tot al number of actual sales for a year would be if the momentum that will be driving the condo market again this year." relative resale pace for that quarter were maintained for four consecutive quarters. Seasonally adjusted sales rates are used in reporting quarterly data to factor out seasonal variations in resale activity to account for difference in weather and household buying patterns. NAR In the fourth quarter, the median existing condo/co-op price was $174,700, which is 14.9 percent began tracking the condo/co-op market in 1981; prior to the late 1970s, condos were not an important segment of the nation's housing higher than a year ago. The median is a typical market price where half of the units sold for more market. and half sold for less. By comparison, the typical single-family home cost $171,600 in the fourth quarter, 6.6 percent higher than a year earlier. "This is the first time the typical condo cost more than the median-priced house," Lereah said.

For all of 2003, the median existing condo price was $163,800, up 15.2 percent from a median of $142,200 in 2002. At the same time, the typical single-family resale home price rose 7.5 percent to $169,900. NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said there are two reasons the median condo price has been rising faster than J-36 single-family homes. "A shortage of units available for sale has been putting pressure on prices, but we're also continuing to see a greater mix of more expensive condos that appeal to empty-nesters and other higher-income segments of the market."

Lereah said low mortgage interest rates, an improving economy and growing demand will fuel future condo sales. "We've had low mortgage interest rates for some time, but a strong demographic demand will be a significant factor for years to come. There is a growing number of households entering the years in which people typically buy a first home, while at the same time many baby boomers are trading down to easier-to-maintain properties," he said. According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed- rate mortgage was 5.92 percent in the fourth quarter, down from 6.01 percent in the third quarter; it was 6.08 percent in the fourth quarter of 2002. The fourth-quarter average interest rate was the third lowest since the Freddie Mac series began in 1971; the lowest averages were in the second and first quarters of 2003. In the Northeast, condo/co-op resales slipped 0.7 percent between the third and fourth quarters to a 151,000-unit pace; however, they were 16.2 percent above the fourth quarter of 2002. The median price in the Northeast was $194,400, up 24.4 percent from a year ago.

62 63 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

While national, regional and local trends are important factors, which must be considered in terms New Condominium Sales of new residential development we must also analyze those properties, which would compete with the subject. Year Number of Sales 1990 3,791 Sales Activity 1991 2,440 1992 1,853 A total of 1,917 new condominium units were sold (deeded) in Miami-Dade County during the 1993 2,340 fourth quarter of 2003. The fourth quarter sales are 37.2% greater than the 1,397 sold in the third 1994 2,861 quarter of 2003 and 70.6% greater than the 1,124 sold in the fourth quarter of 2002. New 1995 4,377 condominium sales during 2003 totaled 5,881 units, up 23.7% over the 4,753 sold during 2002. 1996 4,358 1997 3,906 During the fourth quarter of 2003 sales increased in eight of the eleven areas by which the data is 1998 3,459 examined, declined in two areas and was unchanged in one area. The highest level of sales, 362 1999 2,848 units, was recorded in the Central Miami Beach/Surfside area followed by the Hialeah/Miami 2000 3,079 Springs area at 329 units. 2001 3,730 2002 4,753 During the fourth quarter of 2003 the $450,000 plus price group had the greatest number of units 2003 5,881

sold with 376 sales. During the fourth quarter, sales increased in six of the nine price groups st examined, declined in two groups and was unchanged in one. Source: Reinhold P. Wolff Economic Research, Inc., Miami-Dade County Quarterly Housing Report, 1 Quarter 2004 Pricing Trends The median price of a new condominium unit sold during the fourth quarter of 2003 was $167,453, North Miami down 17.8% from the $203,763 median of the third quarter of 2003 but 22.6% greater than the Central Beach 13% 14% $136,593 median of the third quarter of 2002. The highest median price over $450,000, was recorded in four areas of the County. The lowest price, $97,312, was found in the Miami Shores/Northwest Miami area. Miami Lakes

J-37 8% North Miami Beach/North 243 Over $450,000 Miami Lakes 149 $144,170

Key Biscayne/S. Beach Miami Shores/NW Miami 191 $97,312 12% Hialeah/Miami Springs 329 $134,491 Coral Gables/Bayshore/South Miami 148 $200,811 Miami Shores/NW Miami 10% Sunset/West Miami/Kendall 205 $128,593 Howard/West Miami 0 Over $450,000 Perrine/Cutler Ridge 42 $122,726 Perrine Key Biscayne/South Beach 223 Over $450,000 2% Central Beach/Surfside 362 $195,776 North Beach 25 $231,249

Sunset/West Kendall Hialeah/Miami Springs 11% 17% Permit Activity

Coral Gables/Bayshore During the fourth quarter of 2003 a total of 3,786 new housing units were authorized by building permits in Miami-Dade County, down 16.9% from the 4,554 units permitted in the third quarter of Source: Reinhold P. Wolff Economic Research, Inc., Miami-Dade County Quarterly Housing Report, 1st Quarter 2004 2003 but 6.4% greater than the 3,557 of the fourth quarter of 2002. The total housing permitted during 2003 was 14,178, up 7.8% over the 13,150 permitted during 2002.

64 65 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

A total of 1,714 multiple family housing units were permitted during the fourth quarter of 2003, Permit Activity by Quarter down 24.2% from the 2,262 units permitted in the third quarter of 2003 and 24.4% less than the 2,268 permitted in the fourth quarter of 2002. The 6,520 multiple family units permitted during 2003 was 12.2% less than the 7,423 permitted during the same period of 2002. 16000

New single family homes authorized during the fourth quarter of 2003 totaled 2,072 units, down 14000 9.6% from the 2,292 permitted during the third quarter of 2003 but 60.7% greater than the 1,289 permitted in the fourth quarter of 2002. The 7,658 single family homes permitted during 2003 was 12000 20.3% greater than the 6,366 authorized during the same period of 2002. 10000 A total of 14,178 housing units were started in Miami-Dade County during 2003 representing a 7.8% increase over the 13,150 started during 2002. It is forecast that starts will total 13,780 units in 8000 2004 representing a 2.8% decline from the level of 2003. 6000 Multiple family housing starts totaled 6,520 units during 2003 representing a 0.5% decline from the 6,550 for 2002. It is forecast that a total of 6,615 multiple family housing units will be started in 4000 2004, up 1.5% over 2003. 2000 A total of 7,658 single family homes were started in Miami-Dade County during 2003 representing a 16.0% increase over the 6,600 for 2002. It is forecast that about 7,165 single family homes will be 0 started in 2004, down 6.4% from the 2003 total. Q1/1998 Q2/1998 Q3/1998 Q4/1998 Q1/1999 Q2/1999 Q3/1999 Q4/1999 Q1/2000 Q2/2000 Q3/2000 Q4/2000 Q1/2001 Q2/2001 Q3/2001 Q4/2001 Q1/2002 Q2/2002 Q3/2002 Q4/2002 Q1/2003 Q2/2003 Q3/2003 Q4/2003

Quarterly 12-Month J-38 Source: Reinhold P. Wolff Economic Research, Inc., Miami-Dade County Quarterly Housing Report, 1st Quarter 2004 Absorption

New condominium unit sales increased notably in the fourth quarter of 2003 as the 1,917 units deeded were 37.2% greater than the 1,397 sold in the third quarter of 2003 and 70.6% more than the 1,124 sold in the fourth quarter of 2002. The 5,881 new condominium units sold during 2003 was 23.7% greater than the 4,753 sold during 2002. During the fourth quarter of 2003 sales increased in eight of the eleven geographic submarket areas by which the data was examined, declined in two areas and was unchanged in one. New condominium developments experienced an average of 5.6 sales per month per project during the fourth quarter of 2003 and the overall median price of a new unit sold was $167,453, down 17.8% from the $206,763 median of the third quarter of 2003.

Within Miami-Dade County, during the 4th quarter of 2003, there were 114 active projects. Active projects are defined as a project, which has one, or more completed units. The chart on the following page indicates the average monthly sales rates of new condominium developments by submarket during the 4th quarter of 2003.

66 67 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

Average Monthly Sales Rates of A newer trend for buildings in established residential areas like Coconut Grove, Coral Gables and New Condominium Developments by Sub-Market 4th Q 2003 Miami Beach, is for “empty nesters” to purchase condominium units, after selling their local residence. Due to a lack of available land for single family residential construction, prices for homes # of Active Average Sales Per in Miami-Dade County has increased dramatically over the last few years. Many retirees who have Price Level # of Sales Projects Project/Month owned their homes for years are able to sell and purchase a luxury condominium, often at a price Under $ 50,000 0 0 0.0 that is equal to the value of their single family home. The quick sales of the units in the existing $ 50,000 - $ 74,999 0 7 0.0 buildings at Deering Bay, located in the East Kendall submarket s a perfect example of this. $ 75,000 - $ 99,999 246 21 3.9 $100,000 - $124,999 210 18 3.9 Some of the top condominium developments in Miami-Dade County are as follows: $125,000 - $149,999 314 13 8.1 $150,000 - $174,999 270 7 12.9 Property Sales Dollar Volume Average Price $175,000 - $249,999 320 13 8.2 Fisher Island- Miami 16 $33,800,000 $2,100,000 $250,000 - $449,999 168 22 2.5 Hidden Bay – Aventura 47 20,100,000 429,487 $450,000 Plus 389 13 10.0 Blue & Green Diamonds- Miami Beach 54 18,900,000 350,520 Average/Total 1,917 114 5.6 Ocean Point – Sunny Isles 143 46,300,000 323,900

th Source: Reinhold P. Wolff Economic Research, Inc., Miami-Dade County Quarterly Housing Report, 4 Quarter 2003 Source: County Records As indicated on the previous chart, new condominium developments in Miami-Dade County experienced an average monthly sales rate of 5.6 units per project during the 4th quarter of 2003, Market Comparables somewhat higher than the 3.9 rate of sales of the preceding quarter. The strongest rate of sales, 17.1 units, was found in the Sunset/West Miami/Kendall submarket. This section will first summarize all completed, under construction, and proposed construction projects which are considered market competition for the subject; analyze the demand and pricing Forecast Supply for those projects; and then project a most likely demand scenario based on a market oriented pricing schedule for the subject’s proposed improvements. Demand is good for new and used condominiums in South Florida, with most of the supply located in Miami-Dade County. According to Integra/AREAA, nearly 80% of new condos sold in Miami- Comparable Properties J-39 Dade, Broward, and Palm Beach Counties are located in Miami-Dade County. Overall, sales levels have remained relatively steady since 1996, with sales levels closely tied to the number of units The following represent the condominium projects in the Miami-Dade County market, which are coming on line. either proposed and partially sold and properties which are partially completed and will represent competition in the form of resale’s for the completion of the sellout of the remaining units which Looking ahead, modest decreases in the number of overall sales are expected because larger, higher were not sold during the presale or construction phase. In terms of these properties, we analyzed the priced units are being developed, and in many areas land is increasingly scarce for new average rate of absorption of the units over the course of presale, construction and sell out phases, development. Beginning in 1996, new units introduced into the market were mostly luxury units, as well as the average prices per unit. with fewer garden condominium complexes being developed. One area of clear demand is from foreign investors, particularly from Europe and South America. It is estimated that up to half of new The building presented are all within a short drive of the Miami CBD, or are located within the condominiums are sold to foreign investors. While the countries which foreign investment comes Miami CBD. These comparables represent the building the typical condominium shopper would be from has changed over the years, the amount has remained fairly consistent. At one point in time the looking at, if they were also interested in a unit at the subject property. While some of these majority of foreign investment was from South America, however, this has shifted slightly to comparables offer a superior level of amenities, or benefit from superior views or locations, they European investors. represent the bulk of the market for “more affordable” condominiums aimed at residents who work in the Downtown, Brickell and Miami Beach markets.

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Comparable Condominium 1

Name: Uptown Lofts

Location: 2299 Biscayne Boulevard, Miami, Miami-Dade County, Florida

Property Description: This will be a 64-unit, 12-story loft condominium project. The building will contain 4,800 SF of ancillary space which will be used for retail, and administrative office space. Additionally, the project will contain a recreational deck with a gym, hot tub and a community room. Each unit will have a European kitchen, with standard appliances and washers/dryers.

Pricing Schedule Unit Type Size (SF) Price Range Price/SF 1BD/1BA 775± $179,900 - $209,840 $232.13 - $270.76 1BD/1BA 865± $195,990 - $221,840 $226.58 - $256.46 1BD/1BA 985± $259,000 - $261,000 $262.94 - $256.46 2BD/2BA 1,065± $241,900 - $267,840 $227.14 - $251.49 2BD/2BA 1,265± $312,900 - $332,850 $247.35 - $263.12 2BD/2BA 1,270± $319,000 - $325,860 $251.18 - $256.58 2BD/2BA 1,280± $289,900 - $315,840 $226.48 - $246.75 3BD/3BA 1,965± $462,950 $235.60 J-40 3BD/2BA 1,975± $463,000 $234.43

Number of Sales: 48

Average Price/Unit: $257,834 Average Unit Size: 1,055± SF Average Price/SF: $244.32 Project History: Sales Commenced - Presales commenced November 2003 Number of Units Sold - 48 units Number of Months of Sales - 5 months Average Monthly Absorption - 9.60 units/month

70 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

Comparable Condominium 2 Comparable Condominium 3

Name: Star Lofts Name: New Wave Condominiums

Location: 704-712 NE 25th Street, Miami, Miami-Dade County, Location: 725 NE 22nd Street, Miami, Miami-Dade County, Florida Florida

Property Description: This will be a 48-unit, 22-story high-rise condominium Property Description: This will be a 78-unit, 17-story high-rise condominium project. Each unit will have high ceilings, European project. This project will have a residence lounge, café, kitchens, and washers/dryers. fitness center, meditation garden as well as a swimming pool. Each unit will have 10 to 12-foot Pricing Schedule ceilings, European kitchens, and washers/dryers. Unit Type Size (SF) Price Range Price/SF Pricing Schedule 2BD/2BA 1,287± $450,450 $350.00 2BD/2BA 1,514± $529,900 $350.00 Unit Type Size (SF) Price Range Price/SF 2BD/2BA 1,692± $592,200 $350.00 1BD/1BA 850± $255,000 - $350,000 $300.00 - $411.76 2BD/2BA w/ Den 2,060± $721,000 $350.00 1BD/2BA w/ Den 950± $275,000 - $350,000 $289.47 - $368.42 2BD/2BA w/ Den 2,225± $778,750 $350.00 2BD/2BA w/ Den 1,400± $434,000 - $520,000 $310.00 - $371.43 2BD/2BA w/ Den 2,372± $830,200 $350.00 3BD/2BA 2,435± $852,250 $350.00 Number of Sales: 70 3BD/2BA 4,989± $1,746,150 $350.00 Average Price/Unit: $364,000 Average Unit Size: 1,067± SF Number of Sales: 24 Average Price/SF: $341.14 Average Price/Unit: $812,613 Project History: Average Unit Size: 2,322± SF Sales Commenced - Sales commenced November 2003 Average Price/SF: $349.96 Number of Units Sold - 70 units J-41 Project History: Number of Months of Sales - 5 months Sales Commenced - Presales commenced December 2003 Average Monthly Absorption - 14.00 units/month Number of Units Sold - 24 units Number of Months of Sales - 4 months Average Monthly Absorption - 6.00 units/month

71 72 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

Comparable Condominium 4 Comparable Condominium 5

Name: Aria Condominiums Name: Miami-One

Location: 90 NE 41st Street, Miami, Miami-Dade County, Location: 205 South Biscayne Boulevard, Miami, Miami-Dade Florida County, Florida

Property Description: This will be a 78-unit, 18-story high-rise condominium Property Description: This will be a 892-unit, 45-story high-rise project which will contain lofts. This project will have condominium project. This project will have valet a fitness center and a swimming pool in addition to parking, tennis court, 24-hour concierge, residence various common areas for residences. Each unit will cafe, fitness center, party room, swimming pool and have high ceilings, European kitchens, and spa. Each unit will have 9-foot ceilings, internet washers/dryers. access, European kitchens, granite countertops, and washers/dryers. Pricing Schedule Pricing Schedule Unit Type Size (SF) Price Range Price/SF 1BD/1BA 720± $226,800 $315.00 Unit Type Size (SF) Price Range Price/SF 2BD/2BA 1,100± $352,000 $320.00 Studio 507± $150,000 - $350,000 $296 - $690 PH 2,500± $850,000 $340.00 1BD/1BA 846± $150,000 - $350,000 $177 - $414 1BD/1BA 868± $160,000 - $360,000 $184 - $415 Number of Sales: 50 1BD/1BA 1,215± $300,000 - $320,000 $247 - $263 Average Price/Unit: $325,000 2BD/2BA 1,105± $220,000 - $420,000 $199 - $380 Average Unit Size: 1,000± SF 2BD/2BA 1,145± $220,000 - $420,000 $192 - $367 Average Price/SF: $325.00 2BD/2BA 1,169± $180,000 - $380,000 $154 - $325 Project History: 2BD/2BA 1,203± $230,000 - $430,000 $191 - $357 ± J-42 Sales Commenced - Sales commenced September 2003 2BD/2BA 1,227 $230,000 - $430,000 $187 - $350 Number of Units Sold - 50 units 3BD/2BA 1,416± $420,000 - $620,000 $297 - $438 Number of Months of Sales - 7 months 3BD/2BA 1,792± $500,000 - $700,000 $279 - $391 Average Monthly Absorption - 7.14 units/month Number of Sales: 535 Average Price/Unit: $330,000 Average Unit Size: 1,074± SF Average Price/SF: $307.26 Project History: Sales Commenced - Sales commenced July 2002 Number of Units Sold - 535 units Number of Months of Sales - 21 months Average Monthly Absorption - 25.48 units/month

73 74 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

Comparable Condominium 6 Comparable Condominium 7

Name: Quantum Condominiums Name: Ice Lofts

Location: 1900 North Bayshore Drive, Miami, Miami-Dade Location: NE 31st Street and Biscayne Bay, Miami, Miami-Dade County, Florida County, Florida

Property Description: The first tower will contain 466-units in a 51-story Property Description: This will be a 100-unit, 18-story high-rise high-rise loft/condominium building with the second condominium project. This project will have valet tower containing 284-units in a 48-story building. This parking, 24-hour concierge, sauna and fitness center, project will have a 2-story spa, team and sauna rooms, swimming pool and spa. Each unit will have 18-foot fitness center, swimming pool, Feng Shui garden, ceilings, internet access, European kitchens, granite billiard room with large screen plasma, residences countertops, and washers/dryers. lounge, as well as an events center with catering. Each unit will have high ceiling, European kitchens, granite and washers/dryers. Pricing Schedule

Pricing Schedule Unit Type Size (SF) Price Range Price/SF 2BD/2BA 1,467± $400,000 $272.67 Unit Type Size (SF) Price Range Price/SF 2BD/2BA 1,502± $420,000 $279.63 Studio 594± $174,000 $212 - $282 2BD/2BA 1,531± $450,000 $293.93 1BD/1.5BA 780± $235,000 - $278,500 $227 - $347 2BD/2BA 1,804± $755,000 $418.51 1BD/1BA 794± $235,000 - $278,500 $229 - $296 3BD/2BA PH 4,100± $1,695,000 $413.41 1BD/1.5BA 838± $242,000 - $256,000 $209 - $405 2BD/2BA 1,180± $312,000 - $342,000 $248 - $425 Number of Sales: 93 2BD/2BA+Den 1,378± $469,000 - $484,000 $218 - $389 Average Price/Unit: $500,000 ± J-43 2BD/2.5BA 1,400 $470,000 - $503,000 $220 - $308 Average Unit Size: 1,500± SF Unit K Average Price/SF: $333.33 Project History: Number of Sales: 428 Sales Commenced - Sales commenced February 2003 Average Price/Unit: $318,071 Number of Units Sold - 93 units Average Unit Size: 995± SF Number of Months of Sales - 14 months Average Price/SF: $319.72 Average Monthly Absorption - 6.64 units/month Project History: Sales Commenced - Sales commenced April 2003 Number of Units Sold - 428 units Number of Months of Sales - 11 months Average Monthly Absorption - 38.91 units/month

75 76 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

Comparable Condominium 8 Comparable Condominium 9

Name: Baylofts Name: Platinum at Biscayne Bay

Location: 459 NE 25th Street, Miami, Miami-Dade County, Location: 480 NE 30th Street, Miami, Miami-Dade County, Florida Florida

Property Description: This will be a 58-unit, 9-story high-rise condominium Property Description: This will be a 119-unit, 22-story high-rise project. This project will have parking, fitness center, condominium project. This project will have valet swimming pool and spa and storage. Each unit will parking, 24-hour concierge, sauna/steam room and have 10-foot ceilings, internet access, European fitness center, swimming pool and spa. Each unit will kitchens, granite countertops, and washers/dryers. have 9-foot ceilings, internet access, European kitchens, granite countertops, and washers/dryers. Pricing Schedule Pricing Schedule Unit Type Size (SF) Price Range Price/SF 2BD/2BA 833± $180,000 - $250,000 $216 - $300 Unit Type Size (SF) Price Range Price/SF 2BD/2BA 838± $180,000 - $250,000 $215 - $298 1BD/1.5BA 828± $232,000 - $287,000 $280 - $347 2BD/2BA 983± $240,000 - $319,000 $244 - $325 1BD/1.5BA 887± $260,000 $293 2BD/2BA 1,065± $229,000 - $300,000 $215 - $281 1BD/1.5BA 1,280± $390,000 - $395,000 $305 - $309 2BD/2BA 1,005± $292,000 - $328,000 $291 - $326 Number of Sales: 54 2BD/2BA 1,007± $314,000 - $339,000 $312 - $337 Average Price/Unit: $233,000 2BD/Den/2BA 1,363± $432,000 - $482,000 $317 - $354 Average Unit Size: 887± SF 2BD/Den/2BA 1,380± $387,000 - $442,000 $280 - $320 Average Price/SF: $262.68 3BD/Den/3BA 1,692± $515,000 - $525,000 $304 - $310

J-44 Project History: Sales Commenced - Sales commenced December 2002 Number of Sales: 95 Number of Units Sold - 54 units Average Price/Unit: $330,800 Number of Months of Sales - 16 months Average Unit Size: 1,054± SF Average Monthly Absorption - 3.38 units/month Average Price/SF: $313.85 Project History: Sales Commenced - Sales commenced May 2003 Number of Units Sold - 95 units Number of Months of Sales - 11 months Average Monthly Absorption - 8.64 units/month

77 78 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

Comparable Condominium 10 COMPARABLE CONDOMINIUM SUMMARY

Name: The Yorker Lofts Condominium Name Average Unit Price Average SF Average $/SF Absorption per month Uptown Lofts $257,834 1,055± $244.32 9.60± Location: South Side of NE 30th Street, East of NE 4th Avenue, Star Lofts $812,613 2,322± $349.96 6.00± Miami, Miami-Dade County, Florida New Wave Condo. $364,000 1,067± $341.14 14.00± Aria Condominiums $325,000 1,000± $325.00 7.14± Property Description: This will be a 55-unit, 11-story high-rise condominium Miami-One $330,000 1,074± $307.26 25.48± project. This project will have a swimming pool, Quantum $318,071 995± $319.72 38.91± recreation room, hot tub, secured parking and a fitness Ice Lofts $500,000 1,500± $333.33 6.64± center. Each unit will have 10 to 12-foot ceilings, Baylofts $233,000 887± $262.68 3.38± exposed ductwork, European style kitchens, and Platinum $330,800 1,054± $313.85 8.64± marble vanities. The Yorker Lofts $247,330 989± $250.08 3.46± Pricing Schedule Pricing Unit Type Size (SF) Price Range Price/SF The condominium developments within the subject’s market range in average price from $233,000 1BD/1BA 650± $135,000 - $199,000 $208 - $306 to $812,613. It can be seen that there is a wide variety of unit sizes available in the market. Units 2BD/2BA 960± $235,000 - $285,000 $245 - $297 range in size from 507± SF to 4,898± SF, with average unit sizes ranging from 887± SF to 2,322± 3BD/2BA 1,356± $304,980 - $325,000 $225 - $240 SF. While unit prices tend to vary widely, the price per SF tends to fall within a tighter range. Average prices for the surveyed comparables range from $244.32/SF to $349.96/SF. The weighted Number of Sales: 45 average price per SF for the comparables is $311.37/SF. Average Price/Unit: $247,330 Average Unit Size: 989± SF We summarized pertinent information for the projects in the subject’s market currently under Average Price/SF: $250.08 construction in the following table: Project History: J-45 Sales Commenced - Presales commenced March 2003, sales office is to Comparable Projects open in October of 2003. Number of Units Sold - 45 units Percentage Number of Months of Sales - 13 months Total Absorption Absorbed Average Average Price Per Average Monthly Absorption - 3.46 units/month Comparables Units Per Month Per Month Unit Size SF Unit Price SF 1 64 9.60± 15.00% 1,055± $257,834 $244.32 2 48 6.00± 12.50% 2,322± $812,613 $349.96 3 78 14.00± 17.95% 1,067± $364,000 $341.14 4 78 7.14± 9.15% 1,000± $325,000 $325.00 5 892 25.48± 2.85% 1,074± $330,000 $307.26 6 466 38.91± 8.35% 995± $318,071 $319.72 7 100 6.64± 6.64% 1,500± $500,000 $333.33 8 58 3.38± 5.83% 887± $233,000 $262.68 9 119 8.64± 7.26% 1,054± $330,800 $313.85 10 55 3.46± 6.29% 989± $247,330 $250.08 Total/Wght. Avg. 1,958 12.33± 9.18% 1,107± $371,865 $311.37

79 80 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW

The market comparables previously surveyed demonstrated the following average sale prices: Based on historical sales of condominiums in Miami-Dade County, an average of 1,100 units have sold each year with prices in excess of $175,000. The proposed supply appears to represent a Average Unit Price portion of the condominium inventory that will be available. It is difficult to determine the level of Comparable Average Unit Price Per SF demand for condominium units in Miami-Dade County due to the abundance of foreign buyers in 1 $257,834 $244.32 the market. These purchasers are generally seasonal or part time residents and do not appear in any 2 $812,613 $349.96 population statistics. Therefore, sales appear to be controlled by the strength of a project’s 3 $364,000 $341.14 popularity, name recognition and the widespread marketing efforts of the sales people. 4 $325,000 $325.00 5 $330,000 $307.26 The demand for product within Miami is relatively strong. Based on the demand displayed by the 6 $318,071 $319.72 market competition, and the anticipated supply of condominiums in its area, we consider the 7 $500,000 $333.33 prospects for success of the subject property to be good. 8 $233,000 $262.68 9 $330,800 $313.85 Completed & Percentage 10 $247,330 $250.08 Under Construction Total Absorption Absorbed Comparable Units Per Month Per Month Overall, the subject’s market has product which is priced toward the upper end of condominium 1 64 9.60± 15.00% products in Miami-Dade County. The units on higher floors have higher sales prices, which is 2 48 6.00± 12.50% typical to what other condominium properties within the market charge. According to the market, 3 78 14.00± 17.95% prices increase approximately $3,000 to $5,000 as the floor level increases. 4 78 7.14± 9.15% 5 892 25.48± 2.85% The price per unit of the condominium comparables surveyed range from $233,000 to $812,613, 6 466 38.91± 8.35% with a weighted average price of $371,865 or $311.37/SF for an average unit size of 1,194± SF. 7 100 6.64± 6.64% 8 58 3.38± 5.83% The most recently released projects to come on-line include Star Lofts, New Wave Condominiums, 9 119 8.64± 7.26% Aria, and Ice Lofts. The projects are indicating average sale prices of $313.85 to $$349.96 per SF. 10 55 3.46± 6.29% Projects which were released prior to the aforementioned condominiums tend to have a lower price Total/Wght. Avg. 1,958 12.33± 9.18% J-46 per SF range. Aria, with an average price of $325.00/SF is the closest to the subject site. Based on the presented data we believe the subject would have an average asking price of $300 to $350 per In determining the absorption rate to be applied to the subject, we placed most consideration on the SF. percentage absorbed on a monthly basis. The comparables ranged from 3.38 units per month to 38.91 units per month or from 2.85% to 15.00% of the inventory per month. The overall average Demand Projection equates to 12.33 units per month of 9.18% of the inventory per month.

Total Remaining Assuming the subject’s product is reasonably priced and market oriented we estimate units selling Project Units Sales Contracts Inventory at an average of 20 to 30 units per month from initial date of announcement. However, given the Uptown Lofts 64 0 48 16 conditions of the market and the demand for product we believe that upon the release of the units a Star Lofts 48 0 24 24 higher rate of absorption will be reflected. Despite this fact we have assumed an absorption rate of New Wave Condo. 78 0 70 8 20 to 30 units per month. Based on this assumption and taking into consideration the average period Aria Condominiums 78 0 50 28 of construction for a multifamily building within Miami-Dade County of 18 to 24 months we Miami-One 892 0 535 357 believe that upon construction completion proposed building will be substantially sold. Quantum 466 0 428 38 Ice Lofts 100 0 93 7 Baylofts 58 0 54 4 Platinum 119 0 95 24 The Yorker Lofts 55 0 45 10 Totals 1,958 0 1,442 516

81 82 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants MIAMI-DADE COUNTY CONDOMINIUM MARKET OVERVIEW RETAIL MARKET OVERVIEW

CONCLUSION NATIONAL RETAIL MARKET ANALYSIS

The subject is to offer condominiums, to be located in an urban neighborhood that is increasing in In the National Strip Shopping Center Market, according to the Korpacz Real Estate Investor popularity and population. There are numerous condominium projects under construction or Survey, First Quarter 2004, the frenzy to acquire strip shopping centers, particularly those anchored planned in the neighborhood, and by driving through the neighborhood, one gets the impression that by leading grocery stores, hasn’t shown any signs of slowing down. “Grocery-anchored centers there is a significant amount of investment taking place in the area. The neighborhood benefits from remain the little darlings of the industry,” exclaims a participant. Even though such strong being within close proximity to Biscayne Bay, offering interesting views, and off shore breezes. The investment demand continues to push up sale prices for the best assets, the number of properties area is also within a short drive or transit commute from the Miami CBD and Brickell Avenue, two sold in 2003 is nearly twice that of those sold just two years earlier. According to Real Capital areas with high concentrations of office employees. The neighborhood is also within a 10 minute Analytics, Inc. (RCA), a total of 970 significant strip shopping center sales occurred in 2003, well drive of Miami Beach and the Miami International Airport, two places where a high concentration above the 596 properties that sold in 2001. of the neighborhood’s residents work. Based on an analysis of the subject , the neighborhood and the market in which it is to compete, we are of the opinion that the prospects for the successful Sale prices have also continued to increase for strip shopping centers over the past three years. development of condominium units and their sellout is good. According to RCA, the average sale price for strip centers was $98.00 per square foot in 2001, $120.00 per square foot in 2002, and $116.00 per square foot in 2003. As prices have risen, overall capitalization rates (OARs) have declined. It appears, however, that the rate of decline has slowed down. This quarter, the average OAR for this market slipped only 8 basis points to reach 8.76%, the lowest average ever reported for this market since it debuted over 13 years ago. By comparison, the average fell 31 basis points in the first quarter of 2003.

While aggressive cap rates and lofty prices may dissuade some investors from currently acquiring strip shopping center assets, others seem undeterred by them. In one recent portfolio deal, for example, four suburban centers located in the Atlanta metropolitan area sold for a combined price of $39 million or roughly $195.00 per square foot. The properties in this transaction were anchored by Publix supermarkets and included the Shops at Laurel Springs located in Suwanee, which sold for $214.00 per square foot, Publix at Centerville located in Lithonia, which sold for $203.00 per square foot, Publix at Mt. Zion located in Morrow, which sold for $196.00 per square foot, and

J-47 Publix at Old Peachtree located in Lawrenceville, which sold for $168.00 per square foot. Reportedly, the overall cap rate for the entire acquisition was in the low 7.0% range.

While this overall cap rate is at the low end of our range for this property sector, it reflects the superior location of the properties in what many consider a top retail market, as well as the intense investment demand for such assets. Although the buyer of these four centers is a private investment company, a variety of investors including 1031-exchange buyers, REITs, and pension funds have also been acquiring strip shopping centers. In fact, New Plan Excel Realty Trust recently formed a $150-million joint venture with JPMorgan Fleming Asset Management to acquire neighborhood and community centers. A quarterly comparison of average OARs is shown below:

Average Overall Capitalization Rates 4Q02 – 4Q03 Quarter Average Change (bpts) 1Q04 8.76% -8 4Q03 8.84% -22 3Q03 9.06% -27 2Q03 9.33% -25 1Q03 9.58% -31

83 84 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RETAIL MARKET OVERVIEW RETAIL MARKET OVERVIEW

Persistent consumer spending at big box, discount, and wholesale clubs continues to heighten Vacancy investor interest in the national power center market. In fact, power centers have moved up considerably in their ranking by investors in terms of investment potential over the past year. There is 27+ million square feet of retail space in Miami-Dade County, consisting of properties that Specifically, of the ten commercial property types reported in Emerging Trends in Real Estate, are over 25,000. Miami-Dade County had approximately 1,621,589 million square feet vacant or 2004, published by Pricewaterhouse-Coopers and the Urban Land Institute, power centers placed 5.98% vacancy rate during the fourth quarter 2003. That's a .12 percentage point decrease from a fifth in terms of investment potential, scoring a 4.4 on a scale of 0 (poor) to 10 (excellent). By year ago. The submarkets of Cutler Ridge, Miami Shores and Homestead (subject’s market) posted comparison, this property type was ranked ninth last year, scoring a 3.8. Within this market the highest vacancies of 14.40%, 10.10%, and 9.50%, respectively. The increase in vacancy for the investors remain drawn to power centers that are located near fortress malls and/or leased long term Cutler Ridge-Homestead submarkets is due to K-Mart closing their 100,000 SF store and Old Time to dominant big-box retailers that consistently outperform the industry as a whole. “The key to Pottery vacating their box of 135,000 SF. The Miami Beach submarket had the lowest vacancy rate success in this market is to keep a close eye on both competition and credit,” attests a participant. at 0.40%.

Although the best-performing discount retailer in this category has recently been Wal-Mart, which Comparable Store Sales posted a 6.0% gain in year-over-year comparable-store sales in September 2003, another stellar performer has been Target, which reported a 5.4% increase over that time period, according to the Industry chain-store sales were up 4.2 percent for December 2003, according to International Bank of Tokyo-Mitsubishi. While the growth of these two retail powerhouses has been Council of Shopping Centers. The largest retail increases were experienced by the luxury retail enthusiastically embraced by consumers, who relish each store’s size, product diversity, and stores such as: Tiffany and Co., Inc. followed by Nordstrom, Inc., and Neiman Marcus Group, Inc. reduced pricing, it has created much frustration throughout the retail industry. “Traditional retailers Retailers in the market, although posting higher sales were affected by the deep discounts that and mom-and-pop stores are becoming extinct,” explains a participant. As a result, certain areas, erased all expected profits. It is noted that the increase in sales in the luxury market is attributed to such as Oakland, California, have passed legislation that bans Wal-Mart Supercenters, their retail an improving stock market, job market and an increase in consumer confidence, associated to the format that sells grocery items and reportedly averages 187,000 square feet or nearly twice the size more affluent consumer. of their typical store. Even though several other cities in California have approved of similar ordinances, Wal-Mart plans to open 40 Supercenters in that state over the next four years. Lease Rates

MIAMI-DADE COUNTY RETAIL ANALYSIS The triple net lease rates decreased $0.72/SF from $18.92/SF last year to $18.20/SF at the end of 2003. The Coral Gables submarket posted the highest asking rental rate of $30.49/SF. Miami Beach The following information is from the Market Index Brief, Year-End 2003, produced by CB and Downtown follow with an asking rental rate of $27.50/SF and $26.34/SF on a triple net basis. The Homestead and Carol City submarkets continued to have the lowest rental rates in the county J-48 Richard Ellis. According to this publication the average lease rates for properties is $18.20/SF, the vacancy rate is estimated at 5.98%. Under construction are 3 centers for a total of 383,994 SF. since mid-year with $10.000/SF and $12.14/SF respectively. Under proposal are 2 centers totaling 300,000 SF and the retail square footage within Miami-Dade County is approximately 27,116,879 million square feet (this total only includes centers which are Construction Activity 25,000 SF or greater). There are currently three projects under development totaling 382,994 SF of which is 30 percent Economic Conditions committed. There are 2 projects under proposal for a total of 300,000 SF. The projects underway are the Bed, Bath & Beyond Center, Downtown Dadeland and Mary Brickell Village. Currently under The Bureau of Labor and Statistics reports that Florida experienced a reduction in unemployment to construction is the mixed use Mary Brickell Village, a 200,000 SF center to be built in 5.7 acres (to 4.8 percent from the 5.3 percent reported at the end of last quarter. The South Florida region also be located at 900 S. Miami Avenue) is expected to be completed by the Spring of 2005. experienced a decline with Miami-Dade’s unemployment rate of 6.7percent which is a 0.6 percentage point decrease from last quarter. Palm Beach County reported a drop of 0.9 percentage points to 5.4 percent. Broward County’s unemployment rate also decreased by 0.6 percentage points to 5.3 percent. The seasonal tourism is credited with the improvements in the retail markets. It is expected that recovery will remain modest for these markets; however, economic forecasts expect to see growth in the employment sector around mid-year 2004.

85 86 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RETAIL MARKET OVERVIEW

The following chart displays Miami-Dade County’s retail submarkets. Gross Leaseable Under Avg Lease Rate Submarket Area Vacancy Construction NNN/SF/YR Aventura/NMB 4,683,693 7.70% 0 $20.57 Carol City/Opa Locka 695,614 4.20% 0 $12.41 Coral Gables/S. Miami 2,890,886 2.30% 0 $30.49 Cutler Ridge 1,044,242 14.40% 0 $14.76 Downtown* 650,798 5.80% 169,000 $26.34 East Kendall 2,223,654 4.20% 0 $24.98 Hialeah/Miami Lakes 3,615,667 7.90% 214,994 $14.13 Homestead 779,904 9.50% 0 $10.00 Little Havana 197,889 5.60% 0 ------Miami Beach 331,673 0.40% 0 $27.50 Miami Shores/N. Miami* 1,494,102 10.10% 0 $14.52 West Central Dade 5,206,776 4.60% 0 $19.55 West Kendall 3,301,981 3.70% 0 $21.28 Market Total 27,116,879 5.98% 383,994 $18.20 Source: Market Index Brief, Year-End 2003, produced by CB Richard Ellis *SUBJECT’S MARKET

Comparable Retail Properties

A portion of the subject’s development will be dedicated to retail use. Based on the level of multifamily units which are being constructed within the development as well as within the area there will be a need and demand for retail services such as grocery stores, discount departments J-49 stores, restaurants as well as small in-line retail space. The level of retail space within the subject’s neighborhood is considered to be minimal based on the age of the retail space and the need to upgrade and modernize the existing improvements. As such, these spaces are considered to be interim uses. Within the analysis we have included retail comparables located within the neighborhood in order to determine potential in-line/local tenant rental rates. In the estimation of appropriate anchor rental rates for the area we expanded our search to include areas within South Florida.

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Retail Comparable 1 Retail Comparable 2

Name: Starbucks Building Name: Retail Building

J-50 Location: 6825 Biscayne Boulevard Location: 7281 7295 Biscayne Boulevard Miami, Miami-Dade County, Florida Miami, Miami-Dade County, Florida

Building Description: Building Description:

Year Built - 2003 Year Built - 1969 # of Stories - 1 # of Stories - 1 Net Rentable Area - 6,300± SF Net Rentable Area - 5,000± SF Construction Type - CBS Construction Type - CBS Occupancy - 50% Occupancy - 100% Rental Information: Rental Information: Asking Rental Rate - $22.00/SF Asking Rental Rate - $20.00/SF Lease Type - Net, CAM $5.00/SF Lease Type - Net, CAM $5.00/SF Average Term - 3-5 years Average Term - 3-5 years Escalation - Annual CPI Escalation - Annual CPI Concessions - None Concessions - None Tenant Improvement Allowance - Negotiable Tenant Improvement Allowance - Negotiable

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Retail Comparable 3 Retail Comparable 4

Name: Retail Building Name: Retail Building

J-51 Location: 5120 5142 Biscayne Boulevard Location: 4029 NE Miami Avenue Miami, Miami-Dade County, Florida Miami, Miami-Dade County, Florida

Building Description: Building Description:

Year Built - 1950 Year Built - 2003 Renovated # of Stories - 1 # of Stories - 1 Net Rentable Area - 12,000± SF Net Rentable Area - 4,325± SF Construction Type - CBS Construction Type - CBS Occupancy - 100% Occupancy - 100% Rental Information: Rental Information: Asking Rental Rate - $15.00/SF Asking Rental Rate - $15.00/SF Lease Type - Net, CAM $3.50/SF Lease Type - Net Average Term - 3-5 years Average Term - 3-5 years Escalation - Annual CPI Escalation - Annual CPI Concessions - None Concessions - None Tenant Improvement Allowance - Negotiable Tenant Improvement Allowance - Negotiable 90 91 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants RETAIL MARKET OVERVIEW RETAIL MARKET OVERVIEW

Retail Comparable 5 Summary of Retail Comparables

The following chart summarizes each of the comparables surveyed:

Comp Size-SF Year Built Lease Type Rate per SF Occupancy 1 6,300± 2003 Net $22.00 50.0% 2 5,000± 1969 Net $20.00 100.0% 3 12,000± 1950 Net $15.00 100.0% 4 4,325± 2003 Renov Net $15.00 100.0% 5 7,500± 1980 Net $18.00 - $20.00 50.0%

The comparables are indicating a rental rate range of $15.00 to $22.00 per SF. The lower end of the range is represented by an older building located along Biscayne Boulevard while the higher end of the range is represented by a newly constructed building on Biscayne Boulevard. While the retail space within the subject’s development will not be located along Biscayne Boulevard it will be situated within an area which will contain high residential density levels. A factor which numerous retailers will find highly appealing. Additionally, the retail space will represent the most recently constructed retail development in the area. In consideration of the aforementioned we believe a rental rate within the range of $20.00 to $22.00 per SF for local space is appropriate. All of the comparable within this section of the analysis indicated a net lease structure with a 3 to 5 year term and CPI increases. As such, the concluded rental rates are based on a similar lease structure. The estimated rental rates is as of the date of analysis and as such we project that this rate will increase by a CPI of 3% per year into the foreseeable future. Name: Retail Building Comparable Anchor Retail Properties Location: 763 W. 41st Street, Miami Beach,

J-52 Miami-Dade County, Florida Based on the size of the subject property and the level of multifamily units which can be constructed on the site in addition to local tenant space the property will likely contain anchor Building Description: tenant space which will be available for lease. In consideration of the aforementioned we gathered information on appropriate rental rates for anchor tenant space. Detailed below is the pertinent Year Built - 1980 information regarding these comparables: # of Stories - 2 ± Net Rentable Area - 7,500 SF Tenant Location Size-SF Year Built Lease Type Rate per SF Construction Type - CBS ± Occupancy - 50% Publix Miami 44,480 Proposed Net $11.00 Publix Miami 44,271± Proposed Net $13.24 ± Rental Information: Publix Davie 27,887 Proposed Net $14.75 Confidential Miami 30,900± Proposed Net $26.00 ± Asking Rental Rate - $18.00/SF to $20.00/SF TJ Maxx Royal Palm Bch 30,000 2001 Net $10.10 Michael’s Royal Palm Bch 23,800± 2001 Net $11.50 Lease Type - Net Average Term - 3-5 years Escalation - Annual CPI Concessions - None Tenant Improvement Allowance - Negotiable

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As illustrated the comparables are indicating a rental rate range of $12.00 to $40.00 per SF. The The comparables are indicating anchor rental rates within the range of $10.10 to $26.00 per SF. lower end of the range is represented by space located within Park Place by the Bay. The higher end Anchor rental rates within the Miami-Dade County market ranged from $11.00 to $26.00 per SF. of the range is represented by retail space within office buildings within Miami Beach. Comparable Based on the cost of land within the community anchor rental rates tend to be higher within the 3, Bay Park Plaza, was indicating a rental rate range of $25.00 to $30.00 for its retail space. This county than within other parts of the state of Florida. Based on the presented information rental property is located within the subject’s neighborhood but within closer proximity to the CBD. rates for anchor space within the subject’s development should range from $11.00 to $20.00 per SF. Based on the presented comparables we believe the subject’s retail space located within multifamily It is noted that all of the rental rates presented were on a net basis with the tenant responsible for structures should be able to achieve a rental rate within the range of $20.00 to $30.00 per SF. It is their pro rata share of expenses. Lease terms for anchor space generally range from 10 to 20 years. noted that all of the rental rates presented were on a net basis with the tenant responsible for their Rental rates may be flat or may have increases every 5th year of the lease. While the anchor rental pro rata share of expenses. Lease terms were for 3 to 5 years with CPI increases on rent. All of the rate is estimated as of the date of this analysis we project this rate will increase at a rate slightly comparables indicated that the above referenced rental rates were based on the tenant receiving their below CPI. space in vanilla shell condition with the tenant responsible for any additional build out of their space. The estimated rental rates is as of the date of analysis and as such we project that this rate Comparable Retail Properties within Multifamily and Office Product will increase by a CPI of 3% per year into the foreseeable future.

The subject’s development will contain multifamily and office properties which will also include a Absorption minimal degree of retail space within their structures. As such, we have surveyed several properties which also lease retail space within their building. Detailed below is the pertinent information According to information provided by the subject’s developer they intend to construct 3,200 regarding these comparables: condominium units on the various pads on the site. Additionally, 343 rental units are to be constructed within the development. Between the subject’s area, downtown Miami and the Brickell Multifamily/Off. corridor 9,000 units, inclusive of the subject’s product are anticipated to be constructed over the Retail Comps Building Location Size Rent/SF course of the next 3 to 10 years. In consideration of the residential growth within the area we anticipate a strong demand for retail space within the neighborhood. As such, we anticipate a 1 Summit Brickell 50 SW 10th Street 14,541 $35.00 healthy absorption level of the property’s retail space. 2 Park Place by the Bay 915 NW 1st Avenue 20,000 $12.00 - $15.00 3 Bay Park Plaza 1756 North Bayshore Dr. 7,998 $25.00 - $30.00 As previously mentioned, there are nearly 9,000 condo and rental units estimated to be constructed 4 Sheridan Center 400 Arthur Godfrey Rd. N/A $20.00 - $25.00 over the course of the next 3 to 10 years. According to the 2000 Census, Miami-Dade County had

J-53 5 HSBC Building 301 Arthur Godfrey Rd. N/A $40.00 an average household size of 2.84 persons. Therefore, 9,000 new units will account for 25,560 new 6 Midtown Center 333 Arthur Godfrey Rd. N/A $40.00 people (9,000 units x 2.84 persons = 25,560). According to the 2002 National Research Bureau Shopping Center Census, Florida has 460,678,020± SF or retail space and with a 2002 population of 16,689,002, this accounts for 27.6± SF of retail space per person. With a population increase of 25,560 people, Brickell area will need approximately 705,456± SF of retail space (25,560 x 27.6± SF = 705,456± SF).

Conclusion Overall, the Miami-Dade County retail market has historically been one of the top performers in the Florida retail market, with significant growth potential based on the demographics of its population. All signs presently indicate a period of steady growth as the county continues to be favored by national retailers. Based on Miami-Dade County’s shortage of land for the development of prime retail sites, upward pressure on retail rental rates should continue into the future. The subject should only prosper under the current retail conditions within the market as well as within its submarket.

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NATIONAL OFFICE MARKET SOUTHEAST FLORIDA OFFICE MARKET

According to the first quarter 2004, Korpacz Real Estate Investor Survey despite weak underlying According to the Korpacz Real Estate Investor Survey, first quarter 2004, the Southeast Florida fundamentals, sale transactions remained strong in the national suburban office market in 2003. office market, which impressed investors with its ability to perform quite well during the recent Specifically, a total of 1,261 significant suburban assets traded in 2003 at an average price of downturn, continues to demonstrate resiliency against a slow moving economic recovery. Unlike $134.00 per square foot, according to Real Capital Analytics, Inc. By comparison, a total of 925 other major office markets across the country, this market has limited exposure to Corporate properties were sold in 2001 at an average price of $133.00 per square foot, while 1,092 assets were America, which has been a main driver behind the current sluggish economy. “We didn’t transferred in 2002 at an average sale price of $137.00 per square foot. One market participant experience the rash of job cuts and layoffs that other large markets did during the recession,” confirms, “Market conditions are still very soft, but an abundance of capital is still chasing the best explains a participant. As a result, much of this office market is already demonstrating signs of deals.” rebounding.

Some of the most expensive suburban office assets to trade over the past year have been located in Relatively small in inventory, the Southeast Florida office market stretches over three counties – various Los Angeles submarkets, such as Beverly Hills, Santa Clara, Santa Monica, and Burbank. In from the middle of Palm Beach County, through Broward County, to the end of Miami-Dade one sale, for example, Pinnacle at Burbank sold for approximately $365.00 per square foot. In County. The major office markets include West Palm Beach, Boca Raton, Fort Lauderdale, and another sale, Mission Towers II located in Santa Clara, sold for about $362.00 per square foot. On Miami. Of these, Miami in Miami-Dade County contains the majority of institutional grade office the East Coast, sale prices of this magnitude have occurred in several suburban areas surrounding properties. Washington, DC. “We’ve been selling assets in Northern Virginia recently and are happy with the investor interest and pricing,” shares a participant. Virginia Square Plaza located in Arlington, for Of the three main areas that comprise this market, Palm Beach County has shown the greatest example, sold for $324.00 per square foot last year. improvement in the past year. At the end of 2003, its overall vacancy rate reached 16.5%, according to CB Richard Ellis (CBRE). By comparison, this figure was 17.4% in the first quarter of 2003. The Unfortunately for buyers, the number of quality assets available for sale in these top performing decline is due to a tremendous amount of leasing activity that occurred at the end of last year. markets has reportedly declined creating a highly competitive environment among bidders. “Several Specific deals included Lydian Bank’s 40,000 square foot agreement in Boca Raton, Tenant offers get submitted on quality deals,” comments a participant. The end result has been a rise in sale Healthcare Corporation’s 97,133 square foot deal in Boca Raton, and Stayin’ Alive Fitness Center’s prices and a decline in overall capitalization rates. In fact, this quarter, the average overall rate 25,000 square foot lease in North Palm Beach. declined 16 basis points to reach 9.34%, a 62 basis point decline from one year ago. In addition, the low end of the range for this key assumption declined 25 basis points to reach 7.00%, the lowest When combined with a multitude of other leases, these deals caused Palm Beach County to post a

J-54 low-end point ever recorded for this property sector. net absorption of just over 312,000 square feet in the fourth quarter of 2003, according to CBRE. Within Palm Beach County, the top corporate location remains Boca Raton, where consistent Despite aggressive sale prices and cap rates, some participants do not expect this market to return to leasing activity over the past year helped to push overall vacancy down from 20.1% in the first a structural vacancy level for another five years. The average length of time is slightly over two quarter of 2003 to 16.5% in the fourth quarter of that year. “Small and mid-sized companies love years. Like its CBD counterpart, the main problem impeding this market’s recovery is a lack of job the Boca Raton area,” exclaims a participant. Although fundamentals are weaker in neighboring growth. “Until companies start spending money and hiring people, absorption will remain very Palm Beach Gardens, the relocation of the Scripps Research Institute to that office submarket slow,” states a participant, who wonders if occupancy levels will ever return to prerecession levels. should help to increase leasing activity and to decrease vacancy. “We may see some permanent shifts in what the industry considers stabilized occupancy,” adds the participant. Due to Southeast Florida’s displays of stability, it continues to attract the attention of investors. “Everything in Southeast Florida has traded and the properties that haven’t been sold will be offered One reason for the change is that technological advancements have enabled many employers to be soon,” quips a participant. As would be expected, much of the recent sales activity has occurred in more productive, thereby reducing space needs. Another reason is that more individuals work from Palm Beach County. Specifically, more than 2.1 million square feet of office space (almost 30 home now either part time or full time than they did ten years ago. “We are a much more mobile buildings) were sold in 2003, according to Cushman & Wakefield. The highest priced asset to trade society,” continues the participant. And on top of this, the outsourcing of jobs to foreign countries last year was the Philips Point office tower in West Palm Beach’s CBD. It sold for $327.00 per will reduce office space requirements in the United States. square foot, believed to be the highest price ever paid for a major office tower in this market.

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MIAMI-DADE COUNTY OFFICE MARKET Existing Office Space – Historical Trends

During the third quarter, brokers, employers, county officials and investors continued to have diverging viewpoints on the direction of the Miami Dade county office market. On one hand, some pessimists predict a further dip in the job market, citing security concerns, offshore job migration, and corporate belt tightening.

On the other hand, optimists point out projections that Miami will be one of the ten best metropolitan areas in terms of future job prospects and personal income growth. Furthermore, it appears that a lot of the available sublease space is drying up, a decrease from 732,894 square feet to 426,816 square feet, indicating a move towards a healthier market.

Urban space has maintained higher occupancy rates than the suburban markets, which remain in the low 80's. Overall Class A rental rates have declined, but occupancies have remained the same for the similar period in 2002. Class B has also declined somewhat as well. Source: Real Data Information Systems, Inc. – 3rd Quarter - 2003 In general, the Miami-Dade office market appears to be heading toward a recovery, with positive net sublease absorption of 161,292 square feet, though a million square feet of space under If the economy proceeds as currently expected, the office market should begin to rebound in 2004 construction will come online within the next few quarters. until then tenants will have the upper hand. In some instances landlords are offering concessions such as free rent. For tenants with a long-term view, now is a good time to secure office space at Weakness still exists in some segments, such as the Airport/West Dade submarket. In the third favorable terms. quarter, this submarket had an occupancy rate of 77.12%. The current average rental rate is $24.10 per SF, which is a 0.66% decrease from the 3rd quarter of The market is also affected by a significant amount of sublease space. As much as 571,816 SF of 2002. Rental rates have increased from $20.94 per SF in 1997 to $24.10 per SF today, an average sublease space has been identified as currently available. When combined with direct availability, increase of 2.37% per year. an overall occupancy rate of 81.91% is indicated.

J-55 Currently, more than 991,569± SF of office space is under construction with approximately 21.34% Given the current slowdown in the economy, demand for office space is likely to be slow for much pre-leased. Most of the new construction is in the Brickell, and Coral Gables markets. Based on of 2003. At this point most economists expect the economy to pick-up by late-2004. Office leasing direct availability, the tightest markets are South Miami/Sunset, Miami Lakes, Brickell and South may lag somewhat as employers add workers cautiously at first and then gain confidence. Dade/Kendall with occupancy rates of 92.64%, 89.67%, 86.55% and 86.39%, respectively.

Existing Office Space – Current Condition An area of concern is Airport/West Dade. The Airport market has a direct vacancy of 20.70%. With available sublease space included the overall vacancy rate is 22.88%. It has also been announced Class Total Rentable Total Vacant Occupancy Average Change since 3Q 2002 that Ryder will be relocating from their 435,000 SF building to a facility containing approximately SF SF Rental 250,000 square feet. The company is reportedly evaluating locations in Miami-Dade and Broward A 13,642,770 2,329,606 82.92% $29.10 -1.05% Counties. B 17,378,035 2,795,716 83.91% $21.69 -0.55% C 4,309,643 695,890 83.85% $18.03 1.16% Coral Gables is also a market to watch. On the surface it appears to be in good shape with a direct Totals 35,330,448 5,821,118 83.52% $24.10 -0.66% occupancy rate of 83.6%. However, the overall occupancy rate is 83.46% and includes 104,293 SF rd of available sublease space. Another 40,000 SF plus or minus may be added if Delta Airlines Source: Real Data Information Systems, Inc. – 3 Quarter - 2003 relocates from Ponce de Leon Plaza. Miami Beach is an emerging market with very unique characteristics that have appealed to entertainment and fashion businesses as well as others. However, its luster appears to have dimmed somewhat, recently. At present, supply appears to be exceeding demand. For the time being attractive terms are very likely for tenants seeking a South Beach address.

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The Lincoln, a 120,000± SF office building on Miami Beach was delivered in the first quarter of Over the past 12 months, net absorption totaled 154,223 SF. The average rental rate for the Class A 2003 and is 94% vacant. This building substantially affected the Miami Beach overall occupancy market has remained stable at $29.16 per SF versus the previous year’s rate of $29.35 per SF. Recent level due to the small relative size of the submarket. The Miami CBD with the Network Access leasing activity has been as follows: Point (NAP) and the future Performing Arts Center appears to have substantial potential for future growth. Leasing Activity

Urban Market Current Quarter Past 12 Months Absorption 233,095 1,283,868 The urban area consists of the CBD and Brickell sub-markets, which are separated by the Miami Move-Outs -212,072 -760,334 River. The two areas combine for a total of 11,888,555 SF of urban office space and represent Net Absorption 21,023 523,534 33.65% of Miami-Dade County’s office inventory. Over the past 12 months, net absorption totaled 87,985 SF. The current quarter registered negative absorption of 74,810 SF. Recent leasing activity has been as follows: Meanwhile rental rates increased at an average of 1.32% per year from $27.02 per SF in 1998 to $29.10 per SF today. As a result of the slowdown in the market, rental rates decreased by 0.85% Leasing Activity over the same period last year.

Current Quarter Past 12 Months Absorption 186,069 647,890 Move-Outs -98,669 -653,491 Net Absorption 87,400 -5,601

The urban occupancy rate has decreased slightly from 88.7% in 2002 to 88.3% as of the third quarter of 2003. With sublease space, included the overall occupancy rate for the urban market is 86.32%. Over the past year, rental rates decreased from $26.31 to $26.11.

J-56 Suburban Market

Over the past 12 months, the suburban markets absorbed 447,103 SF. During the previous quarter, absorption was 73,892 SF. Recent leasing activity in the suburbs has been as follows: Class B Leasing Activity Class “B” space totals 17,378,035 square feet. After move-outs and relocations are considered, the net absorption totaled a negative 192,997 SF. Recent leasing activity in the suburbs has been as Current Quarter Past 12 Months follows: Absorption 495,185 2,089,551 Move-Outs -421,293 -1,642,448 Leasing Activity Net Absorption 73,892 447,103 Current Quarter Past 12 Months The suburban market has remained fairly stable with an occupancy rate of 81.1% as of the third Absorption 353,906 1,149,509 quarter of 2003. Rental rates have also remained fairly stable at $23.05 per SF, a slight decrease Move-Outs -266,722 -1,342,506 from the previous year’s average of $23.22 per SF. Net Absorption 87,184 -192,997

Class A The average rental rate for Class B space is currently $21.69 per SF and represents a slight decline from the previous year’s average of $21.87 per SF. The Class “A” segment contains 13,642,770 SF which represents 38.61% of the market’s inventory. The current average occupancy rate is 82.9%.

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Miami-Dade County Office Market Summary

Sub-Market Inventory Occupancy Average Rental Rate Airport/West Dade 7,413,396 79.30% $21.86 Brickell 5,224,774 86.55% $28.00 Coconut Grove 1,031,261 85.16% $27.17 Coral Gables 4,829,740 83.46% $26.09 Coral Way 1,092,404 64.92% $20.87 Miami Beach 1,518,588 67.71% $27.59 Miami CBD 6,663,781 89.67% $24.73 Miami Lakes 1,273,601 84.80% $19.00 J-57 North Miami 2,473,440 82.90% $22.18 South Dade/Kendall 2,771,163 86.39% $21.06 South Miami 1,038,280 92.64% $21.46 Total 35,330,448 83.52% $24.10 Source: Real Data Information Systems, Inc. – 3rd Quarter 2003

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Office Comparable 1 Office Comparable 2

Name: 7100 Building Name: Atrium Building Location: 7100 Biscayne Boulevard

J-58 Location: 4500 Biscayne Boulevard Miami, Miami-Dade County, Florida Miami, Miami-Dade County, Florida

Building Description: Building Description:

Year Built - 1953 Year Built - 1973 # of Stories - 3 # of Stories - 4 Net Rentable Area - 15,000± SF Net Rentable Area - 65,000± SF Construction Type - CBS Construction Type - CBS Occupancy - 90% Occupancy - 84% Rental Information: Rental Information: Asking Rental Rate - $17.00/SF to $18.00/SF Asking Rental Rate - $17.50/SF to $22.00/SF Lease Type - Full Service Lease Type - Full Service Average Term - 1 to 3 years Average Term - 3 years Escalation - Annual CPI Escalation - Annual CPI Concessions - None Concessions - None Tenant Improvement Allowance - Negotiable Tenant Improvement Allowance - Negotiable

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Office Comparable 3 Office Comparable 4

Name: Union Planters Building Name: 3510 Building Location: 3550 Biscayne Boulevard Location: 3510 Biscayne Boulevard J-59 Miami, Miami-Dade County, Florida Miami, Miami-Dade County, Florida

Building Description: Building Description:

Year Built - 1975 Year Built - 1965 # of Stories - 7 # of Stories - 3 Net Rentable Area - 47,000± SF Net Rentable Area - 32,024± SF Construction Type - CBS Construction Type - CBS Occupancy - 91.5% Occupancy - 65.7% Rental Information: Rental Information: Asking Rental Rate - $18.00/SF to $24.00/SF Asking Rental Rate - $18.00/SF - $22.00/SF Lease Type - Full Service Lease Type - Full Service Average Term - 3 years Average Term - 3 years Escalation - Annual CPI Escalation - Annual CPI Concessions - None Concessions - None Tenant Improvement Allowance - Negotiable Tenant Improvement Allowance - Negotiable

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Office Comparable 5 Office Comparable 6

Name: Sheridan Center Name: SouthTrust Executive Building Location: 400 Arthur Godfrey Road, Miami Beach,

J-60 Location: 3050 Biscayne Boulevard Miami, Miami-Dade County, Florida Miami-Dade County, Florida

Building Description: Building Description:

Year Built - 1973 Year Built - 1986 # of Stories - 5 # of Stories - 10 ± Net Rentable Area - 81,063± SF Net Rentable Area - 67,300 SF of office space Construction Type - CBS Construction Type - Concrete columns with glass Occupancy- 86.3% Occupancy - 100% Rental Information: Rental Information: Asking Rental Rate - $17.50/SF to $19.50/SF Asking Rental Rate - $22.00/SF Lease Type - Full Service Lease Type - Full Service Average Term - 3 years Average Term - 5 to 10 years Escalation - Annual CPI Escalation - Annual Steps of 5% Concessions - None Concessions - None Tenant Improvement Allowance - Negotiable Tenant Improvement Allowance - Negotiable

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Office Comparable 7 Office Comparable 8

Name: Yale Mortgage Building Name: Lincoln Place

J-61 Location: 777 Arthur Godfrey Road, Miami Beach Miami-Dade County, Florida Location: 1601 Washington Avenue, Miami Beach, Miami-Dade County, Florida Building Description: Building Description: Year Built - 1985 # of Stories - 4 Year Built - 2002 Net Rentable Area - 20,000± SF of office space # of Stories - 8 Construction Type - Concrete columns with reflective glass Net Rentable Area - 140,000± SF Occupancy - 85% Construction Type - Concrete and steel Occupancy - 76.1% Rental Information: Rental Information: Asking Rental Rate - $23.00/SF for office space Lease Type - Full Service Asking Rental Rate - $28.00/SF Average Term - 3 to 5 years Lease Type - Full Service Escalation’s - Annual Steps of 3% to 4% Average Term - 5 years Concessions - None Escalation’s - Annual Steps or CPI Tenant Improvement Allowance - Negotiable Concessions - None Tenant Improvement Allowance - Negotiable

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Office Comparable 9 Summary of Office Comparables

# Size-SF Year Built Lease Type Rate per SF Occupancy 1 15,000± 1953 FS $17.00 to $18.00 90.0% 2 65,000± 1973 FS $17.50 to $22.00 84.0% 3 47,000± 1975 FS $18.00 to $24.00 91.5% 4 32,024± 1965 FS $18.00 to $22.00 65.7% 5 81,063± 1973 FS $17.50 to $19.50 86.3% 6 67,300± 1986 FS $22.00 100% 7 20,000± 1985 FS $23.00 85.0% 8 140,000± 2002 FS $28.00 76.1% 9 158,500± 2003 FS $28.00 23.0%

The comparables are indicating a rental rate range of $17.00 to $28.00 per SF. The lower end of the range is represented by older buildings located along Biscayne Boulevard while the higher end of the range is represented by newly constructed buildings within the Miami Beach area. While the office space within the subject’s development will not be located along Biscayne Boulevard or on Miami Beach it will be situated within an area which will contain high residential density levels. The subject’s proposed office space will represent the most recently constructed buildings within the area. In consideration of the aforementioned we believe a rental rate within the range of $20.00 to $28.00 per SF for space is appropriate. All of the comparable within this section of the analysis indicated a full service structure with a 3 to 5 year term and CPI increases. As such, the concluded rental rates are based on a similar lease structure. The estimated rental rate is as of the date of analysis and as such we project that this rate will increase by a CPI of 3% per year into the foreseeable future.

J-62 Name: The Lincoln Absorption

Location: 940 17th Street, Miami Beach, Currently the occupancy rate for office space within Miami-Dade County is 83.50%. According to Miami-Dade County, Florida the CB Richard Ellis, Miami Market Overview, 4th Quarter, 2003, the “Miami-Dade office market remained soft during third quarter. Although vacancy, overall available space, and rental rates Building Description: appear to have stabilized, a stagnant economic recovery continues to keep businesses from hiring and expanding. New leasing activity for the quarter was modest as demand just outpaced supply, Year Built - 2003 helping absorption remain positive. # of Stories - 4 Net Rentable Area - 158,500± SF It remains a tenant market and landlords have seen an increased demand for short-term leases with Construction Type - Concrete and steel three to five year deals being more common. Tenants prefer to have flexibility instead of extensive Occupancy - 23% (Lease-up) tenant improvements while the direction of the economy remains unpredictable. Landlords continue to offer higher rent concessions and lower annual escalations in order to entice prospective tenants. Rental Information: Free rent is being offered, typically at modest levels of one to three months on five-year terms.” Asking Rental Rate - $28.00/SF The subject is located in a market that is currently experiencing slightly depressed conditions, due Lease Type - Full Service to a slow down on the national and regional economy. The South Florida office market in general, Average Term - 5 years and the Miami office market in particular is also highly reactive to the events that occur in Latin Escalation’s - Annual Steps or CPI American economies, since a large percentages of the local businesses work with other businesses Concessions - None in those markets. Tenant Improvement Allowance - Negotiable

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NATIONAL LODGING MARKET OVERVIEW We estimate that it will be a number of months before a recovery begins in the market, and once the recovery does start to take place, we anticipate approximately 24 months before equilibrium is The following information is presented, from the PricewaterhouseCoopers Korpacz, Real Estate reached. Given the condition of the market and the lack of financial feasibility for the construction Investor Survey, as of the Third Quarter 2003, which is supported with data from the leader in hotel of office product within Miami-Dade County we have not made any estimates or projections with industry information, Smith Travel Research. regards to the absorption of office space. The developers for the subject have stated that they have been approached by several office users who have expressed an interest in office space within the During the first six months of 2003, the national lodging industry continued to experience area. In consideration of the aforementioned, an opportunity for office development on the subject’s declines in both occupancy and average daily room rates. It’s been an extremely disappointing pods is possible given a built to suit situation in which case the absorption of space would not be year so far, for most hotel owners. Occupancies, which have declined since the latter part of considered to be an issue. 2001 due to travel safety concerns, convenience of air travel, and reduced corporate travel budgets, were eroded further at the start of this year by heightened terrorist alert levels, the war in Iraq, the outbreak of severe acute respiratory syndrome (SARS), and an anemic economic recovery. The hotel industry has been battered by one thing after another since September 11th.

Although major combat in Iraq has ended and the fear of SARS has subsided, signs of a dramatic increase in lodging demand have yet to materialize. Some participants note that at least two of the three lodging demand components (leisure and business) have failed to make a substantial comeback.

Both leisure and business demand have evaporated to the point where revenues continue to decline in most markets. On the other hand, some investors believe that group travel, especially in larger gateway cities that attract that component such as San Francisco and New York, remains relatively sound. Nevertheless, group business has suffered from lower attendance and higher attrition.

Unfortunately, with the travel habits of both leisure and business travelers closely tied to the economy, few investors expect hotel demand to rebound dramatically until the economy starts J-63 to show signs of a sustained recovery. Although leisure-travel volumes have reportedly been increasing over the past months, uncertainty relating to where to go, when to go, and how much to spend continues to impede leisure trips.

A survey conducted jointly by Runzheimer International and the Association of Corporate Travel Executives suggests that on the business side, 40.0% of U.S. businesses decreased their travel budgets this year compared to 2002, while 34.0% kept them the same. As an alternative to the travel time and costs of face-to-face meetings, some companies are increasing their use of both videoconferencing and teleconferencing. While it is inevitable that both the economy and business profits will rebound and cause a pick up in lodging demand, many investors believe that the industry’s fundamentals, particularly demand, have been permanently altered by the cumulative effect of so many negative events. The degree to which this shift has occurred, however, continues to be highly debated. On one hand, there are those investors who feel that the “hyper” travel activity of the late 1990s will never return. Corporate America has not left the travel market forever, but there have been permanent changes. Many companies have realized that they don’t need to travel so much. In addition, it is likely that few companies will be too quick to dissolve cost-conscious travel policies that have been positive to their bottom lines. On the other hand, when the economy is good and businesses feel good about their profits and future, the need to go out and meet new and existing clients will return.

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Until demand rebounds, many hotel owners will continue to boost profits by closely monitoring While occupancy levels decreased in all lodging segments over this time period, the luxury operating expenses associated with variable items, such as payroll, marketing, and amenities. segment experienced the smallest decline, slipping only 1.0%. One reason for this occurrence is Some will also look to increase revenues in a variety of ways. One way is by either limiting or that sharp declines in luxury room rates have enabled many travelers to upgrade their eliminating their use of third-party hotel reservation sites. Many hotel owners believe these accommodations at either little or no added extra cost. With so much high-end product being websites are eating into hotels’ bottom lines. offered at substantially reduced rates, many customers are upgrading their accommodations and still saving money. By comparison, the economy segment incurred the largest loss in occupancy While cost-cutting measures and marketing campaigns are likely to keep many hotel owners (2.0%) in the first half of 2003. operating soundly, the impact of rising nonvariable fixed costs, coupled with declining ADRs and occupancy levels, will undoubtedly force others to sell either some or a portion of their Although many economy and budget hotels, which are already affordably priced, are not able to portfolios in order to pay down debt and remain “out of the red.” Although the instance of drop room rates as dramatically as upper-end ones, many of them have been offering perks, such outright foreclosure remains rare, approximately 5.5% of hotel loans were reportedly delinquent as free meals, daily sweepstakes, and gas vouchers, to attract customers and boost occupancy at the end of the second quarter of 2003, according to Pricewaterhouse- Coopers (PwC) rates. While some owners of economy/limited-service hotels report that such promotions have Hospitality & Leisure. By comparison, this rate was 5.1% in 2002 and 15.0% in 1992. mitigated occupancy declines, the budget segment overall posted a 1.6% decline in occupancy in the first half of 2003, according to STR. In the other lodging sectors, occupancy declined INDUSTRY PERFORMANCE 1.8% in the upscale segment and 1.9% in the midprice segment during that time period.

Occupancy Average Daily Rate (ADR)

Overall occupancy for the lodging industry for the first half of 2003 was 58.3%, 1.5% below the With room rate discounting still widespread, the average daily rate for the lodging industry same period in 2002 (59.2%), according to Smith Travel Research (STR). declined in the first half of 2003 to $83.59, a 0.9% decline from the same period in 2002 ($84.35), according to STR. J-64

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Unlike the industry’s occupancy performance, not all of the lodging segments experienced While the decline in room starts is primarily a result of tighter requirements on behalf of declines in ADRs during this time period. The budget segment, for example, recorded a 0.5% lenders, the postponement and cancellation of projects by developers has also helped lower new increase in ADR to $40.91. By comparison, the luxury segment recorded the largest decline in room starts. After all, with demand so far below long-term trends, new room starts need to ADR over this period, falling 2.1% to $142.79. The upscale segment posted the second largest remain at low levels once a recovery takes hold in order to have an enduring impact on the decline in ADR at 1.4%, while the midprice and economy segments dipped 1.0% and 0.3%, industry. respectively. “Over the past two years, rates at some of the best hotels have dropped 10.0% to 15.0%,”affirms a participant. Unfortunately, many investors expect ADRs to continue to decline Within the lodging industry, the two segments that have been experiencing the fastest supply from prior-year levels over the next several months. “Until consistent gains in occupancy are growth include upscale and midscale without food and beverage. Specifically, end-of- year made, ADRs will continue to soften,” predicts another. room supply in these two segments increased an average of 6.8% and 6.2%, respectively, between 2001 and 2002. By comparison, this figure was 1.8% for the industry. Revenue Per Available Room (RevPAR)

Declines in both occupancy rates and ADR combined to produce another drop in RevPAR, a key indicator of the industry’s underlying health and performance. Specifically, RevPAR declined 2.4% for the industry during the first half of 2003 compared to the same period in 2002, according to STR (see Figure 1).

Although demand has started to recover in the luxury and upscale segments, ADR remains weak due to the low occupancies. Between the first half of 2003 and the same period last year, the upscale and luxury segments incurred RevPAR losses of 3.3% and 3.1%, respectively, according to STR. By comparison, RevPAR declined 3.0% in the midprice segment, 2.4% in the economy segment, and 1.2% in the budget segment. Even though RevPAR for the industry as a whole is expected to turn positive for the first time in four years in 2004, cumulative improvements through the end of 2005 will bring RevPAR back to 1995 levels only. Specifically, RevPAR is projected to increase 4.5% for the industry, 5.5% for the upper-upscale segment, 5.4% for the upscale segment, 4.0% for the midscale without food and beverage segment, 3.2% for the midscale-with-food-and-beverage segment, and 2.9% for the economy J-65 segment, according to PwC Hospitality & Leisure Consulting.

Room Starts

After declining annually over the past four years, new room starts have increased recently and are expected to trend upward over the next two years. Actual and estimated room starts from PwC Hospitality & Leisure Consulting research are shown below:

Year Total Room Starts Change OUTLOOK Year Total Room Starts Change 1999 Actual 140,900 11.9% A slowly growing economy, continued restraints on corporate travel spending, and the 2000 Actual 121,200 14.0% uncertainty of war will all combine to make 2003 another overall disappointing year for the 2001 Actual 92,000 -24.1% lodging industry. 2002 Actual 68,000 -25.3% 2003 Estimate 76,600 +12.6% Overall, occupancy is forecast to increase just 1.1% over 2002’s rate to 60.0%, according to 2004 Estimate 88,100 +15.0% PwC Hospitality & Leisure Consulting. ADR for the industry is also expected to increase only slightly in 2003, rising just 0.9% to reach $83.92.

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FLORIDA HOTEL MARKET A thinner new supply pipeline, however, bodes well for lodging fundamentals in the short to midterm. Markets such as Miami and Orlando are still anticipating major increases in supply in The past year will most likely be regarded as one for the industry to forget; after years of steadily 2003 given the completion of projects planned and funded pre-9/11. While this may continue to improving performance, the lodging industry came to a virtual standstill following the terrorist place downward pressure on occupancies, average daily rates should increase due to the primarily attacks of 9/11. An economic slowdown in the US, already occurring before but exacerbated by the upscale positioning of these new additions, except if the competitive situation should overheat. terrorist events, forced workforce reductions and curtailed corporate travel expenditures. These projects are anticipated to meet a need from incentive, convention and high-end leisure Furthermore, increasing stock market volatility and increasing consumer debt loads coupled with segment travel. Given the economic slowdown and weaker lodging demand across the state, many domestic terrorism warning, caused many Americans to postpone their 2002 vacation plans. hoteliers will continue to undertake capital improvements projects and upgrade their lodging product during 2003 to minimize the opportunity costs associated with such renovations and be % Change % Change % Change well-positioned once demand fundamentals improve. 2000 2001 (’00-’01) 2002E (’01-’02) 2003E (’02-’03) Occ 66.3% 61.9% -4.4 pts 60.8% -1.1 pts 62.2% 1.4 pts ADR $90 $90 0.4% $89 $89 $90 1.4% Ft. Lauderdale 7% RevPAR $59 $56 -6.2% $54 $54 $56 3.8% Miami Source: Smith Travel Research 7%

As the second most visited state in the nation, there is no doubt that Florida, which is highly Miami Beach dependent on the tourism industry and is susceptible to the effects of reduced business and leisure 5% travel, suffered profound and incalculable losses from these domestic events. Doubly difficult for the State were the economic crises being experienced by its neighbors to the south, Brazil and Argentina, which experienced significant devaluations to their currencies and ensuing political Other Markets uncertainties. Markets such as Miami and Orlando, which receive substantial demand from these 40% visitors, experienced marked declines in visitation from these points of origin.

Orlando $116 $120 31%

J-66 $110

$100 $94 $91 $90 $90 $85 Tampa 10% $80 $68 $70 $62 $58 $60 $56 $54 $50 Ft. Lauderdale Miami Miami Beach Orlando Tampa Source: Smith Travel Research

ADR RevPAR Overall, 2003 should be a turning point for the State’s lodging industry. Capital investment declines of approximately 5% by major corporations, a rise in unemployment, and concerns over the war with Iraq may weaken an already slow economy. These issues continue to be major concerns among business and leisure travelers, thus creating further uncertainty among hoteliers relative to the Source: Smith Travel Research industry’s rebound. Military action notwithstanding, improving lodging fundamentals are anticipated to result in an occupancy increasing to 62.2% and average rate growth of 1.4% to $90 in 2003.

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Historical and Estimated Occupancy Performance Historical and Estimated RevPAR Performance Selected Florida Markets Selected Florida Markets

80.00% $90.00 72% 72% 70% $79 66% 67% $77 70.00% 66% 66% 65% 65% $80.00 64% 63% 64% 64% 63% 62% 62% 62% 61% 60% $69 $69 59% $70.00 $67 60.00% $59 $63 $64 $60 $62 $56 $59 $58 $60.00 $55 $56 $56 50.00% $53 $53 $54 $50 40.00% $50.00 30.00% $40.00 20.00% $30.00 10.00% $20.00 0.00% $10.00 Ft Lauderdale Miami Miami Beach Orlando Tampa $- Ft Lauderdale Miami Miami Beach Orlando Tampa 2000 2001 2002 2003

Source: Smith Travel Research 2000 2001 2002 2003

Historical and Estimated ADR Performance Selected Florida Markets Source: Smith Travel Research

$140.00 To increase profits in a period of slow growth, hotel owners and operators are continuing to

$122 intensify their efforts to manage expenses more efficiently and leverage more value from marketing $119 $115 $116 strategies and management structures.

J-67 $120.00

$88 $91 $96 $95 MIAMI HOTEL MARKET $100.00 $92 $94 $89 $89 $90 $86 $87 $87 $85 $85 $83 $82 $80.00 The Miami hotel market is one of the larger hotel markets in the nation, with approximately 377 hotel properties in the county. $60.00 According to the Greater Miami Convention and Visitors Bureau, there are four primary hotel $40.00 submarkets in Miami-Dade County, Florida: Downtown/North Miami-Dade, Miami Beach, South Miami-Dade and Airport/Civic Center. $20.00 The Downtown Miami submarket, is similar to the Miami Beach market in that it attracts business $- travelers, conventioneers and overnight guests associated with the cruise ship industry. However, unlike the Miami Beach market, the Downtown Miami market mainly caters to businessmen instead Ft Lauderdale Miami Miami Beach Orlando Tampa of the tourist trade. The premier hotels in this market include the JW Marriott, the Inter-Continental, the Hyatt Regency, the Mandarin Oriental, the Omni and the Marriott. Joining this list are the newly 2000 2001 2002 2003 completed Four Seasons, and the soon-to be completed Conrad Hotel. Mid-priced full service hotels in the market include the Courtyard Marriott, Doubletree, The Sheraton, Holiday Inn and the Radisson. Source: Smith Travel Research

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The North Miami-Dade hotel submarket is primarily derived from business travelers, groups, Over the period 1998 to the present (including under construction rooms) the county has seen 9,008 transient guests and some tourists. The majority of the hotels in this submarket are limited service new hotel rooms. Some hotels have closed over the same period, so the actual increase in rooms has properties or mid-priced full service properties which offer food and beverage services. There are a been less than this amount. limited number of upscale, full service hotels within this submarket. Prior to 1998, there were very few, if any high quality hotels in the Miami market. Since the Loews The Miami Beach market consists primarily of business travelers, conventioneers, tourists and some Hotel with 950 rooms opened in December of 1998, there have been a number of high-end hotels overnight guests associated with the cruise ship industry. The Miami Beach Convention Center is a who have decided to open for business in Miami. These include three Ritz Carlton hotels, (Key renovated and expanded facility that now provides more than one million SF of meeting and exhibit Biscayne, Coconut Grove and Miami Beach), the Four Seasons, the Setai, the Bentley Beach Hotel, space. To support this new facility, the City of Miami Beach continues to seek new hotel the Conrad by Hilton, the Mandarin Oriental, the JW Marriott, the Shore Club, the Trump Ocean development. Older properties, especially in the Art Deco District, continue to be renovated by Grand among other less luxurious brands. investors. The premier hotels on Miami Beach are the Fountainbleau Hilton and the new Loews convention hotel. More recent additions to the Miami Beach market are the Royal Palm Crowne Despite this, the Miami market has noted relatively strong performance, in light of the overall woes Plaza, The Shore Club, The Ritz Carlton DiLido, The W Hotel, and the soon to be completed Setai. in the hospitality market over the last few years. The current overall county wide occupancy is currently at 64.7%, one of the highest in the nation. The county-wide average daily rate is currently The South Miami-Dade submarket is comprised mainly of business travelers and vacationers. Coral at $101.69, and the resulting revenue per available room, or RevPAR is currently one of the highest Gables and Coconut Grove represent a major office corridor within Miami-Dade County, which in the nation. attracts numerous business travelers. Additionally, this submarket encompasses a number of the county’s premier lodging facilities such as: The Biltmore, The Grand Bay, The Hyatt, The Omni, The entire South Florida region has seen an increase in tourism, over the last few years. Broward The Mayfair, the Ritz Carlton Key Biscayne and the Sonnesta Beach Resort. Key Biscayne attracts and Miami-Dade have seen increases in hotel occupancy and room rates while national numbers a number of tourists each year who come to relax along the Key’s white sandy beaches. The Ritz have declined so far this year, according to recent statistics from Smith Travel Research. If trends Carlton Coconut Grove joined these hotels in the first quarter of 2002. hold, Florida could have nearly 77.7 million visitors this year, topping last year's record 75.6 million, Visit Florida numbers show. In 2001, the state was on its way to a banner year but ended The Airport/Civic Center market is the market within Miami-Dade County. This market boasts the with 69.4 million, compared to 72.8 million in 2000. newest and most competitive inventory, as well as the widest variety of quality type hotels. The airport market caters primarily to overnight stays for businessmen and overnight stays for tourists The City of Miami Beach has seen a surge in its resort tax dollars as tourists have returned in record waiting for plane or ship transfers. This market consists of a mixture of high end, middle of the road numbers. The post-9/11 tourism slump seems to have ended, with the city collecting $24 million so and budget properties. At the high end, the market includes the Intercontinental, Marriott, Hilton, far in 2003, which is $3.3 million more than 2002 and $1 million more than amount collected in J-68 Hotel Sofitel, Embassy Suites and Radisson Mart Plaza Hotel. The middle of the market consists of 2001. several Holiday Inn's, Marriott Courtyard and Ramada Hotel. The budget, or lower, end of the market is comprised of the Howard Johnson motel, Quality Inn, Fairfield Inn and Days Inn. Occupancy in the county was at its highest in 2001, prior to the September 11th attacks. However, as According to the Miami Convention and Visitors Bureau, the county has 2,040 recently constructed can be seen on the chart that follows, 2003 figures are beginning to come close to the pre 9/11 and under construction hotel rooms. The new construction is summarized on the chart that follows: occupancies, and are far better than the occupancy seen in the county in 2002. The following graph summarizes the average level of occupancy in Miami over the last three years: New Miami-Dade Hotels Name Opening # Rooms SubMarket Trump Ocean Grande Resort Hotel April-03 379 Sunny Isles Four Seasons October-03 222 Brickell (Downtown) Bentley Beach Hotel November-03 103 Miami Beach Ritz Carlton, Miami Beach Dec.03/Feb.04 380 Miami Beach Conrad by Hilton January-03 203 Brickell (Downtown) Brickell Premier Hotel Spring-2004 120 Brickell (Downtown) Courtyard by Marriott Fourth Qtr -04 132 Bay Harbor Spring Hill Suites Fourth Qtr -04 174 Miami Lakes Setai Hotel December-03 90 South Beach Rosewood Dec.04/ Feb.05 117 Aventura Courtyard By Marriott Second Qtr-05 120 Dadeland 2,040 123 124 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants HOTEL MARKET OVERVIEW HOTEL MARKET OVERVIEW

The multiplication of the average daily rate and the average occupancy is called the RevPAR, or the 90.00% revenue per available room. As noted, the Miami market has one of the highest RevPARs in the 80.00% nation. The county wide 3-year historical RevPAR is shown on the graph that follows: 70.00% 60.00% $140.00 50.00% $120.00 40.00% 30.00% $100.00 20.00% $80.00 10.00% 0.00% $60.00

$40.00 April May June July March August January February October September November December $20.00

$0.00 2001 2002 2003

April May June July March January August February October While occupancies have begun to increase, the overall daily rates seen county wide have also begun November December to recover. In some months in 2003, the monthly average daily rate has approached or surpassed the September pre 9/11 averages. The three-year history for the countywide average daily rate is shown on the chart that follows: 2001 2002 2003 The historical occupancy and ADR within Miami-Dade County are shown in following chart. J-69 $160.00 Year Occupancy ADR RevPAR $140.00 1998 69.2% $ 99.57 $68.90 1999 68.8% 107.12 73.70 $120.00 2000 69.7% 110.47 77.00 $100.00 2001 64.4% 106.34 68.48 2002 62.2% 101.20 62.95 $80.00 10 Months 2003 64.5% 105.87 69.29 $60.00 Source: Greater Miami Convention and Visitors Bureau and Smith Travel Research $40.00 It can be seen from the chart above that the Miami market is beginning to recover from the declines $20.00 that were seen in late 2001. $0.00 Local Market Competition

April May June July March A portion of the subject’s development will be dedicated to hotel use. Based on the level of January August February October NovemberDecember multifamily units which are being constructed within the development as well as within the area and September the lack of hotel within the neighborhood there will be a need and demand for this product type. Within the analysis we have included hotel comparables located to the south of the neighborhood in 2001 2002 2003 order to determine potential room rates for a hotel on the subject site. The following pages summarize the comparables. 125 126 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants HOTEL MARKET OVERVIEW

Hotel Comparable 1

Name: Sheraton Biscayne Hotel Property Type: Full service hotel Location: 500 Brickell Key Drive J-70 Miami, Florida 33131 # of Guest Rooms: 598 rooms including 20 suites Quoted Room Rates: $129 to $199 (Non-Season) $179 to $309 (Season) Amenities: Restaurants/Bars: Yes Meeting Facilities: Multiple meeting rooms with the largest space containing 5,000 SF Spa/Gym: Yes

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Hotel Comparable 2 Hotel Comparable 3

Name: Radisson Downtown Name: Doubletree Hotel Property Type: Full service hotel Property Type: Full service hotel Location: 1605 Biscayne Boulevard Location: 1717 Bayshore Drive J-71 Miami, Florida 33132 Miami, Florida 33132 # of Guest Rooms: 528 rooms including 32 suites # of Guest Rooms: 150 rooms including 13 suites Quoted Room Rates: $103 to $172 (Non-Season) Quoted Room Rates: $149 to $209 (Non-Season) $149 to $238 (Season) $189 to $249 (Season) Amenities: Amenities: Restaurants/Bars: Yes Restaurants/Bars: Yes Meeting Facilities: Multiple meeting rooms with the largest space Meeting Facilities: Multiple meeting rooms containing 43,000 SF Spa/Gym: Yes Spa/Gym: Yes

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Hotel Comparable 4 Hotel Comparable 5

Name: Marriott Courtyard Name: Holiday Inn Hotel Property Type: Full service hotel Property Type: Full service hotel Location: 200 SE 2nd Avenue Location: 340 Biscayne Boulevard J-72 Miami, Florida 33131 Miami, Florida 33132 # of Guest Rooms: 231 rooms # of Guest Rooms: 200 rooms including 8 suites Quoted Room Rates: $79 to $109 (Non-Season) Quoted Room Rates: $76 to $134 (Non-Season) $169 to $219 (Season) $106 to $150 (Season) Amenities: Amenities: Restaurants/Bars: Yes Restaurants/Bars: Yes Meeting Facilities: Multiple meeting rooms with the largest space Meeting Facilities: Yes containing 2,500 SF Spa/Gym: Yes Spa/Gym: Yes

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Summary of Hotel Comparables According to STR, the average daily rate over the previous 24 months is shown on the chart that follows. The average daily rate has increased by just under 3% per year for the period analyzed. # Rooms Non-Season Rates Season Rates Rest. Meeting Facilities

1 598 $129 - $199 $179 - $309 Yes Yes Room Rate 2 528 $103 - $172 $149 - $238 Yes Yes $218.00 3 150 $149 - $209 $189 - $249 Yes Yes $216.00 4 231 $79 - $109 $169 - $219 Yes Yes $215.15 5 200 $76 - $134 $106 - $150 Yes Yes $214.00 $212.00 $210.00 The comparables noted would represent the primary competition to any new hotel development that $209.68 would be constructed within the subject’s neighborhood or more specifically on the subject site. $208.00 $206.00 We inquired as to the average daily rate and occupancies of the competing hotels, and as expected, $204.00 the local managers were not willing to provide such sensitive information. Therefore, we ordered a $203.73 Trend Report from Smith Travel Research, a company that compiles this information, and produces $202.00 reports using audited numbers from each hotel. $200.00 Hotels within the sample included Mandarin Oriental, JW Marriott, Ritz Carlton Coconut Grove, $198.00 Wyndham Hotel, Coconut Grove and the Hyatt Regency, Coral Gables, However, we note that none 11/00-10/01 11/01-10/02 11/02-10/03 of these hotels would necessarily represent direct competition to the subject.

According to STR, the average occupancy over the previous 24 months is shown on the chart that follows. It can be seen that the hotels, as a group have seen a dramatic rise in occupancy, despite the The resulting RevPAR is shown on the following chart. RevPAR increased by just fewer than 21% lackluster performance seen within the hospitality market over the last 2 years. from 10/1 to 10/02, and further increased by just fewer than 11% from 10/02 through 10/03. J-73 RevPAR Occupancy

$160.00 70.00% $140.00 60.00% $135.76 63.10% 58.50% $120.00 50.00% $122.66 49.80% $100.00 $101.46 40.00% $80.00

30.00% $60.00

20.00% $40.00

10.00% $20.00

$0.00 0.00% 11/00-10/01 11/01-10/02 11/02-10/03 11/00-10/01 11/01-10/02 11/02-10/03

132 133 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants HOTEL MARKET OVERVIEW DESCRIPTION OF THE SITE

The presented charts detail occupancy rates, room rates as well as the RevPar for upper end hotels within the market. Based on the location of the subject site it is likely that a lower end product Existing Site would located within the area like those presented by the hotel comparables within this section of the report. The comparables surveyed indicated hotel rates of $106 to $309 per room within season FEC's Buena Vista Yards is one of the largest undeveloped land parcels in the city of Miami. The and lower rate of $76 to $209 per room during non-season. Detailed below are the historical subject consists of 56.12 gross acres or 2,444,496 SF. Excluding roadways which are to be occupancy and ADR’s within the downtown market of Miami-Dade County: dedicated for public roadways, the Buena Vista Yards contains approximately 42.04 net acres. The property is located 2 miles north of Miami's CBD, 5 miles east of Miami's International Airport, 1/8 mile west of Biscayne Boulevard and 2 west of Miami Beach. The site is bordered by NE 36th Street Year Occupancy ADR RevPAR to the north, Miami Avenue to the west, NE 29th Street to the south, and the FEC railroad to the 2001 60.33% $105.30 $65.76 east. 2002 58.91% 99.35 59.59 10 Months 2003 61.61% 95.19 59.69 The site is essentially flat. A comprehensive environmental report has been completed (Phase I, Phase II, and Phase II). Sewer capacity is available at the perimeter of the site. Potable water mains Source: Greater Miami Convention and Visitors Bureau and Smith Travel Research exist within the abutting rights-of-way, however, some sections of the existing water distribution Based on the presented comparables, as well as market statistics for the downtown Miami-Dade system must be upgraded. County market we conclude to an ADR of $90 to $110 per room for any hotels which would be constructed on the subject site. The FEC Rail right-of-way, which forms the eastern edge of the property, accommodates two to three evening trains per week. The City and County have planned to add a trolley service on the In terms of occupancy, the Miami-Dade County market is indicating improving levels. The overall right of- way in the future (or extend the service of the people mover). occupancy rate within the County was 64.4% in 2001, 62.2% in 2002 and 64.5% for the 10 month period surveyed for 2003. Within the downtown market the rates were 60.3% in 2001, 58.9% in The site is currently undeveloped and is used for container storage. Access to the site can be 2002 and 61.6% for the 10 month period surveyed for 2003. As detailed occupancy rates decreased achieved on all four sides. New signalized intersections are possible on NE 36th Street at NE 1st after 9/11 but are rebounding. The current overall county wide occupancy is currently at 64.7%, one Avenue, at NE 34th Street and NE 31st Street on North Miami Avenue, and NE 29th Street. of the highest in the nation. The county-wide average daily rate is currently at $101.69, and the resulting revenue per available room, or RevPAR is currently one of the highest in the nation. In Two exits from I-195 serve the site: at Miami Avenue at the northwest corner and at Biscayne consideration of the presented information we have concluded to an overall occupancy level of 65% Boulevard, just east of the northeast corner. The site is very visible from 195 as well as the major to 70%, thereby indicating a RevPAR range of $58.50 to $77.00 per room for any hotels which may streets that border the site. J-74 be constructed on the site. Furthermore, we project the stabilization of the product to occur within the third year of operation barring any unforeseen complications or economic downturns. This Proposed Development assumption is based on the demand of hotel rooms within Miami-Dade County and the proximity of site to the Miami Beach Convention Center as well as Downtown Miami. The proposed redevelopment plan accommodates approximately four million square feet of mixed- use development. Over one million square feet of this development creates a commercial border Conclusion along the northern, western, and southern edges. The commercial parcels are designed to accommodate a variety of tenants. Nationally, the hotel market is expected to remain generally stable to moderately increasing, with slowly increasing occupancy rates and moderate increases in room rates. The Miami hotel market is A wide variety of national retailers with space needs ranging from 25,000 SF to 200,000 SF have quite large, with numerous properties servicing a wide range of travelers. Overall, the outlook for expressed interest in the site and the design is flexible enough to accommodate all of them. The hotels in Miami is generally favorable. Although new development will put pressure on occupancy northern edge of the site, which will have over 70 percent of the commercial floor area, is very and room rates, moderate increases in demand should allow the market to remain stable. visible from I-195. Another 15 percent is located on the existing commercial east-west street, NE 29th Street. The remainder is located on the western edge of Miami Avenue.

The site is to be entered via major entrances at NE 1st Place, NE 1st Avenue and NE 36th Street on the north, and NE 34th Street, NE 32nd Street and NE 31st Street on the east and west. The internal circulation is built around a diagonal north-south boulevard that links all of the roadways via NW 1st place.

134 135 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants DESCRIPTION OF THE SITE DESCRIPTION OF THE SITE

The multifamily housing units are to be built along the boulevard and most also front on the Potable water mains exist within the abutting rights-of- greenway planned adjacent to the FEC Rail right-of-way. This right-of-way is planned to way. However, based on the feedback from the accommodate a linear park and a future trolley system. Above the fifth floor, the majority of the representatives of the Miami-Dade Water & Sewer units will have very attractive views of the Miami skyline and/or Biscayne Bay. The team's Department (MDWASD), some sections of the engineers have determined that the necessary utilities with appropriate capacity for this existing water distribution system must be upgraded. development exist near the property. No major off-site improvements are expected to be required. More specifically, the existing 6-inch water main located on N. Miami Ave. must be upgraded to a 12- All necessary land-use approvals have been received with the development of the site slated to inch main from NE 36th Street south to NE 28th commence within the next several months. Street, where it will be connected to an existing 36- inch main. Also, the existing 6-inch main on NE 29th Site Location and Description: The proposed project site is situated along the F.E.C. Street must be upgraded to a 12-inch main from N. railroad and is bound by NE 36th Street to the north, Miami Avenue east to the existing railroad tracks. NE 29th Avenue to the south, North Miami Avenue to There is an existing 16-inch water main on NE 36th the west and the F.E.C. railroad to the east, in the City Street within the Florida Department of Transportation of Miami, Miami-Dade County, Florida. (FDOT) right-of-way, which does not need to be upgraded. According to MDWASD, no upgrades or Permits Required: Permits for site work, demolition, building, and work improvements will be required on NE 2nd Avenue within the right-of-way must be obtained from the City because the referenced property abuts the existing FEC of Miami. Stormwater Management permitting will railroad right-of-way and not NE 2nd Avenue. require approval from the City of Miami Public Works MDWASD forces will install all utility services and Department, Miami-Dade County Department of meters from the main to the property line. The site Environmental Resources Management (DERM) contractor will install the required water main Water Control Section, and the Florida Department of extensions, the utility lines from the property line to Transportation District Six (FDOT-6). Utility plans the proposed building including the meter boxes, and will have to be submitted to the Miami-Dade Water fire hydrants connecting from the main. and Sewer Department, the FDOT, the City of Miami

J-75 Building Department & Public Works for their According to a Civil Engineer’s report, provided to us, approval. existing gravity sanitary sewer mains exist within the abutting public rights-of-way. Along N. Miami Utilities and Services: Public water, sewer, storm drainage, electric and Avenue and NE 36th Street, 10-inch and 12-inch telephone utilities are reported to exist within the gravity sewer mains exist, to which connections can be surrounding streets. Water and sewer is provided by proposed. On NE 29th Street a 24-inch sanitary sewer the Miami-Dade Water and Sewer Department; Fire interceptor exists, to which MDWASD will not allow protection is provided by the City of Miami Fire any connection. Department; Storm water is handled by the City of Miami Public Works Department; Electric service is Improvement Data: Currently, no building improvements are located on provided by Florida Power and Light; Telephone the site, the only improvements currently in place on service is provided by BellSouth Telecommunications, the site include fencing Inc; Gas is provided by Peoples Gas. Topography: The site is generally level and slightly above street grade.

136 137 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants DESCRIPTION OF THE SITE ZONING

Subsoil Conditions: We know of no engineering study made to determine The site is zoned SD 27.1 Buena Vista East and SD 27.2 Buena Vista West. A copy of the zoning the subsoil conditions. Upon inspection of the subject description from the city's codebook can be found in the addenda section of this report. and surrounding improvements, conditions appear adequate to support the subject structure. From an inspection of the property, drainage also appears to be ASSESSMENT AND TAXES adequate. The subject is assessed and taxed under the jurisdiction of Miami-Dade County, Florida. Property Flood Zone: The property lies within Flood Zone “X.” Areas taxes in Florida are paid in arrears, with the assessments presented to property owners in November determined to be outside 500-year floodplain and the due date payable before April 1st of the following year. This allows property owners the determined to be outside the 1% and 0.2% annual opportunity to contest the value assessments before having to pay the tax burden. Additionally, the chance floodplains. This information was obtained county provides a 4% discount for early payment if the bill is paid in full by November. The from the National Flood Insurance Rate Map assessments and actual taxes applicable to the subject are detailed below. We acquired the tax #1206500183J, map Revised March 2, 1994. information from the Miami-Dade County Tax Assessor's Office.

Site Improvements: These improvements include paving, fencing and Parcel ID Number Assessment gates, exterior lighting, drainage and landscaping. 01-3125-071-0010 $29,280,790.00 Gross Tax Amount $788,216.31 Street Improvements: All roadways abutting the site are paved with asphalt and have curbs, gutters and culverts for storm water According to County records, there are no outstanding taxes on the subject property. runoff.

Ingress and Egress: Two exits from I-195 serve the site: at Miami Avenue at the northwest corner and at Biscayne Boulevard, just east of the northeast corner. The site is very visible from I-195 as well as the major streets that border the J-76 site.

Easements and Encroachments: We did not perform a title search or review of title for the subject. In the performance of this study, we did not find any nor were we made aware of any easements or encroachments (other than standard utility easements), which would have an adverse effect on the property. We would suggest that legal opinion be obtained to insure no adverse easements or encroachments exist. Environmental Hazards: Upon inspection of the property, we did not discover any visible environmental hazards associated with the subject such as oil drums, aboveground fuel tanks, et cetera. We suggest that a qualified environmental firm be employed to detect any environmental problems that might exist, as we are not qualified in this area of expertise. Site Plan: Located within the addenda to this report is the proposed subdivision site plan for the property. 138 139 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants HIGHEST AND BEST USE ANALYSIS HIGHEST AND BEST USE ANALYSIS

Highest and best use may be defined as: “The reasonably probable and legal use of vacant land or Physically Possible an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria that the highest and best use must meet are FEC's Buena Vista Yards is one of the largest undeveloped land parcels in the city of Miami. The legal permissibility, physical possibility, financial feasibility, and maximum profitability.”7 56-acre property is located just south of I-195 and Miami's Design District, midway between Miami International Airport and Miami Beach. It is bordered by North Miami Avenue, NE 29th Street, Implied in this definition is that the determination of highest and best use takes into account the 36th Street and the FEC right-of-way. contribution of a specific use to the community and community development goals as well as the benefits of that use to individual property owners. Hence, in certain situations the highest and best The subject is generally rectangular in shape. The configuration of the parcel does not appear to use of land may be for parks, greenbelts, preservation, conservation, wildlife habitats, and the like. impose any apparent development restrictions, nor does it limit the type of use. In terms of subsoil conditions, no engineering study has been commissioned or made by us, however, in researching Further consideration must then be given to the dynamic attributes of the subject site, as well as the surrounding improvements, the site appears to be well suited for any type of development. past, present, and future market conditions in order to determine the subject's highest and best use, as vacant. Accessibility and visibility to the site are considered average. The subject’s area can be accessed via numerous major highways and thoroughfares. Considering the above information, we are of the CRITERIA opinion that the physical attributes of the site would not hinder any type of development. Physically, the site appears well suited to nearly any type of use. Physically Possible - The size, shape, location, utility, availability and terrain impose physical constraints upon the type of uses possible for the subject. Any use incompatible with the utility Legally Permissible capacity or constraints imposed by the size, shape and terrain would not be considered physically possible. The site is zoned SD 27.1 Buena Vista East and SD 27.2 Buena Vista West under the jurisdiction of the City of Miami. The subject’s zoning allows for a variety of uses which includes multifamily Legally Permissible - The site is currently zoned SD 27.1 Buena Vista East and SD 27.2 Buena residential as well as commercial development. Vista West under the jurisdiction of the City of Miami. The subject’s zoning allows for a variety of uses which includes multifamily residential as well as commercial development. The proposed plan would allow for the development of 918,000± SF of retail space and 3,359± residential units interspersed with parks and public areas. As such, based on the legally permissible Financially Feasible - Any use of the site which provides a financial return to the land in excess of uses for the site a mixed used development consisting of multifamily residential and commercial

J-77 that required to satisfy operating, financial expenses, and capital amortization is considered development appears appropriate for the property. financially feasible. Financially Feasible Maximally Productive - The use, among financially feasible ones, which provides the highest rates of return or value for the subject. The cost of land and its development limits the highest and best use of the subject to only those uses that are financially feasible. The site is to be developed with a mix of commercial and retail space. Highest and best use of land or a site as though vacant may be defined as: "Among all reasonable, As was demonstrated within the Market Analysis section of this report, there is a need for housing alternative uses, the use that yields the highest present land value, after payments are made for units in the City of Miami. There is also a need for commercial space within the area, due to a lack labor, capital, and coordination. The use of a property based on the assumption that the parcel of of “big box” retailers in the area. It is proposed that a drug store, a discount retailer, and a home land is vacant or can be made vacant by demolishing any improvements."8 improvement store will occupy buildings on the site. The retailers would serve existing needs within the immediate community, but also serve the needs of the many residential buildings that are ANALYSIS planned for the site, as well as other sites along Biscayne Boulevard. In order to arrive at a highest and best use of the site, as if vacant, it is necessary to examine the area Within the Neighborhood Analysis section of this report, we summarized some of the residential in which the subject is located with regard to the previous criteria. buildings that are planned for the neighborhood. It is projected that additional buildings will be added to the area in the future, as it is one of the last available neighborhoods where high density, apartment development can take place. Based on the market for vacant land within the neighborhood, we are of the opinion that there is 7 Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th Edition (Chicago, Illinois: Appraisal Institute; 2002), ample demand for residential and commercial development. Page 135. 8 Ibid, Page 135. 140 141 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants HIGHEST AND BEST USE ANALYSIS APPRAISAL PROCESS

Maximally Productive In estimating the value of real property, there are available three recognized approaches or techniques that, when applicable, can be used to process the data considered significant to each of The maximally productive use is considered to be the use among all financial feasible uses that the three approaches into separate value indications. In all instances, the experience of the would bring the greatest return to the land. We already determined what type of development would appraisers, coupled with their objective judgment, plays a major role in arriving at the conclusion of satisfy the respective requirements and/or restrictions. Maximizing the utility of the site would bring indicated value from which the final estimate of value is made. the greatest return to the land. The three approaches are commonly known as: The basis for this reasoning is several fold. First, the site is near places of employment and other types of support facilities. The residential and commercial developments in the area suggest that the 1. The Cost Approach - wherein the value of the land, as vacant, is estimated to which is added area is homogeneous in nature. Additionally, the area is receptive to such property types as the depreciated value of the improvements; evidenced by the high occupancies in the area. It should further be noted that the demographics of the area also warrant this type of development. 2. The Sales Comparison Approach - wherein we researched the market for sales data considered to be highly comparable and significant to the property under appraisal from which, As Vacant by comparison of differences, one arrives at an indicated value most commonly used in the appraisal of vacant land and certain types of improved properties; and, Therefore, the highest and best use of the site, as vacant, is for the development of commercial and residential properties, developed to the maximum density allowable under the applicable zoning. 3. The Income Capitalization Approach - wherein the net income imputable to the subject is capitalized into a value using an overall capitalization rate considered to be representative of the As Improved market.

We must also determine the highest and best use of the subject, as improved. The highest and best The subject consists of one of the only vacant tracts of land in eastern Miami-Dade County. As use of the subject, as improved, pertains to; “The use that should be made of a property as it exists. such, the Cost Approach and Income Capitalization Approach are not used within the our analysis. An existing property should be renovated or retained as is so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than The subject site has been used as railroad yard and therefore was never developed. The surrounding offset the cost of demolishing the existing building and constructing a new one.”9 neighborhood has been developed for years. There are no parcels of land that are of similar size within the subject’s neighborhood. We searched within the Southeast Florida market for sales of

J-78 The subject site has only minor improvements, which consist primarily of site improvements that similar tracts of land, in infill locations, but were not able to find any that proved to have a are specific to the storage of cargo containers. To determine the highest and best use of the subject, meaningful correlation to the subject, in terms of value. Therefore, it was not possible to value the as improved, we examined the impact of the current apartment market, the needs in the general area, subject using the Sales Comparison Approach. the physical characteristics of the subject property (land and improvements), and have concluded that there is economic justification for removal of the existing improvements, to make way for In the valuation of some properties, such as condominiums and subdivisions, a fourth method of future development. valuation is available, called the Subdivision Sellout Analysis.

We have used the Subdivision Sellout Analysis to value the subject. The process for estimating the value of a parcel land using the Subdivision Sellout Analysis is as follows. First, sales within the area, which are deemed similar to the subject, were researched. From the sales data, the appraisers estimate the appropriate pricing schedule for the subject's product. Then a sellout time period is estimated along with the anticipated expenses. These revenues less the associated sales expenses less a profit to the developer (entrepreneurial profit) result in a net income, which is discounted to a present worth using appropriate yield assumptions.

9 Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th Edition (Chicago, Illinois: Appraisal Institute; 2002), Page 134. 142 143 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS

LAND VALUE, AS VACANT There are six methods that can be used to value land. These methods are allocation, extraction, subdivision analysis, land residual, ground rent comparables, and the use of sale comparables. The subject consists of a large tract of land that will be subdivided into smaller parcels, which will then, after the property infrastructure has been put in place, be sold to developers. The subject’s plans are for a mix of retail and residential land uses. Due to a lack of information needed to accomplish the first five methods, we considered the sales subdivision analysis to be most appropriate in the valuation of the subject's land. The subject consists of one of the only vacant tracts of land in eastern Miami-Dade County. The site has been used as railroad yard and therefore was never developed. The surrounding neighborhood has been developed for years. There are no parcels of land that are of similar size within the subject’s neighborhood. We searched within the Southeast Florida market for sales of similar tracts of land, in infill locations, but were not able to find any that proved to have a meaningful correlation to the subject, in terms of value. Therefore, it was not possible to value the subject using the Sales Comparison Approach. The subject site is to be subdivided into smaller parcels, after the proper infrastructure has been put in place. The subdivided parcels will have an average size of approximately 1.3 acres. There have been many sales of smaller parcels of land, which are similar in size and shape to the parcels that will be created once the subject is subdivided.

J-79 The data used for this report was collected from public records. Each sale was verified by sources familiar with the sale. Typically, these sources include buyers and sellers, or their representatives. Comparable land sales were researched that transpired before the date of the appraisal, in the area surrounding the subject. Since the subject will be developed with both residential and commercial uses, we have provided two groups of land sales. The first group was used for the construction of residential buildings, while the second group was purchased for commercial uses. Some parcels were purchased for mixed use development, and have been used in the valuation of both the residential and retail portions.

144 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Residential Land Sale 1 Residential Land Sale 2 Location: Between NE 24th Street and NE 25th Street, east of Location: 2990 Biscayne Boulevard, Miami, Miami-Dade Biscayne Boulevard, Miami, Miami-Dade County, County, Florida Florida Grantor: Tixe Designs, Inc. Grantor: Cameo Apartments Ltd. Grantee: GustavoR. Castanon Grantee: Gallery Art Condo, LLC Date of Sale: December 2003 Date of Sale: January 2004 Recordation: 21932/1522 Recordation: 21987/4152 Parcel Size: 0.376± Acres or 16,380± SF Parcel Size: 1.149± Acres or 50,050± SF Zoning: “C-1” Commercial Zoning: “R-4” Multifamily Utilities Available: All available Utilities Available: All available Topography: Level and at street grade Topography: Level and at street grade Required Site Work: Typical Required Site Work: Typical Consideration: $1,900,000 Consideration: $4,400,000 Real Property Rights Conveyed: Fee Simple Estate Real Property Rights Conveyed: Fee Simple Estate Financing: Cash to seller Financing: Cash to seller Verification: Grantee Verification: Grantee Appraisal Indicators: Appraisal Indicators: # of Units - 50 # of Units - 150 Density/Acre - 134± Density/Acre - 131± Floor Area - 43,912 Floor Area - 104,791± SF FAR - 2.68± FAR - 2.09± Price/Floor Area - $43.27 Price/Floor Area - $41.99 Price/Acre - $5,053,191 J-80 Price/Acre - $3,829,417 Price/Unit - $38,000 Price/Unit - $29,333 Price/SF - $116.00 Price/SF - $87.91 Comments: The grantor purchased this property in July 2003 for $3,600,000.

145 146 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Residential Land Sale 3 Residential Land Sale 4 Location: 665-721 NE 25th Street and 720 NE 26th Street, Miami, Location: 8000 West Drive, North Bay Village, Miami-Dade Miami-Dade County, Florida County, Florida Grantor: Urban Land Group LLC Grantor: Casa Marina, LLC Grantee: Biscayne Bay Lofts LLC Grantee: Oppenheim R.E. Ventures LLC Date of Sale: October 2003 Date of Sale: May 2003 Recordation: 21773/3810 Recordation: 21269/4920 Parcel Size: 0.930± Acres or 40,521± SF Parcel Size: 4.51± Acres or 196,456± SF Zoning: “R-4” Multifamily Zoning: “RM-70” Residential Utilities Available: All available Utilities Available: All available Topography: Level and at street grade Topography: Level and at street grade Required Site Work: Typical Required Site Work: Typical Consideration: $5,700,000 Consideration: $14,487,762 (see comments) Real Property Rights Conveyed: Fee Simple Estate Real Property Rights Conveyed: Fee Simple Estate Financing: Cash to seller Financing: Cash to seller Verification: Grantor Verification: Broker Appraisal Indicators: Appraisal Indicators: # of Units - 118 # of Units - 415 Density/Acre - 127± Density/Acre - 92± Floor Area - 112,000 Floor Area - 540,376 FAR - 2.76± FAR - 2.75± Price/Floor Area - $50.89 Price/Floor Area - $26.81 Price/Acre - $6,129,032 Price/Acre - $3,212,364 J-81 Price/Unit - $48,305 Price/Unit - $34,910 Price/SF - $140.67 Price/SF - $73.75 Comments: This is the purchase of the Casa Marina Apartments for $14,000,000. According to the information obtained, plans are to demolish the current improvements; therefore, we have included these costs ($487,762) in the subject’s purchase price. Proposed for the site are 415 units; however, final approvals and variances have not been finalized. The units that are proposed range in size from 900 SF to 1,800 SF, with a retail space of 2,200 SF. Total net livable area equates to 540,376± SF. Included in the proposed unit total will be 36 townhouse units. The site reflects a water front tract.

147 148 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Residential Land Sale 5 Residential Land Sale 6 Location: Northeast corner of Biscayne Boulevard and NE 39th Location: 700 NE 22nd Terrace, Miami, Miami-Dade County, Street, Miami, Miami-Dade County, Florida Florida Grantor: Hamilton Risk Management; IDM Jr. Investments, Inc. Grantor: Edgewater on the Bay, Inc. Michael Levine; Mario and MMRS Investment Corp. Ramirez; Miguel Gutierrez; Carmen Schiavone; Jose Grantee: Nelton HL Investors Corp. Gutierrez and Omar Espino Date of Sale: May 2003 Grantee: BE 22 LLC Recordation: 21149/1396; 21149/1392 and 21149/1394 Date of Sale: February 2003 Parcel Size: 2.979± Acres or 129,765± SF Recordation: 20983/3301; 21001/1350; 1354, 1358 and 1362 Zoning: “C-1” Commercial Parcel Size: 0.58± Acres or 25,180± SF Utilities Available: All available Zoning: “R-4” Multifamily Residential Topography: Level and at street grade Utilities Available: All available Required Site Work: Typical Topography: Level and at street grade Consideration: $6,564,000 Required Site Work: Typical Real Property Rights Conveyed: Fee Simple Estate Consideration: $2,897,700 Financing: Cash to seller Real Property Rights Conveyed: Fee Simple Estate Verification: Knowledgeable Third Party Financing: Cash to seller Verification: Broker Appraisal Indicators: Appraisal Indicators: # of Units - 186 Density/Acre - 62± # of Units - 60 Floor Area - N/A Density/Acre - 103± FAR - N/A Floor Area - 86,943 Price/Floor Area - N/A FAR - 3.45± J-82 Price/Acre - $2,203,424 Price/Floor Area - $33.33 Price/Unit - $35,290 Price/Acre - $5,012,885 Price/SF - $50.58 Price/Unit - $48,295 Price/SF - $115.08 Comments: Comments: This site was purchased under three separate deeds. The main purchase was from Hamilton Risk for $4,794,000 with the IDM Investments, Inc. tract purchased for $850,000 and the MMRS This was an assemblage of a vacant parcel and an 8-unit condominium project. There were a total of Investments Corp. tract purchased for $920,000. This site reflects a non-water front tract of land. 8 transactions for the above stated purchase price. No plans have been set for this site. The FAR was based upon a gross lot area of 50,548 SF and a FAR of 1.72. The tract reflects a water front parcel of land.

149 150 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Land Sale 7 RESIDENTIAL LAND SALES SUMMARY Location: 420 - 444 NE 30th Street, Miami, Miami-Dade County, Sale # Sale Date Size-SF Zoning Density/Acre Price/Unit Price/SF Florida 1 01/04 50,050± R-4 131 $29,333 $ 87.91 ± Grantor: Tecno LLC 2 12/03 16,380 C-1 134 38,000 116.00 3 10/03 40,521± R-4 127 48,305 140.67 Grantee: Yorker LTD. ± Date of Sale: February 2003 4 05/03 196,456 RM-70 92 34,910 73.75 Recordation: 21063/1667 5 05/03 129,765± C-1 62 35,290 50.58 ± ± 6 02/03 25,180± R-4 103 48,295 115.08 Parcel Size: 0.505 Acres or 22,000 SF ± Zoning: “R-4” 7 02/03 22,000 R-4 123 30,484 85.91 Utilities Available: All Topography: Level LAND SALES ANALYSIS Required Site Work: Typical clear and grade Consideration: $1,890,000 In order to derive an estimate of value for the subject site, as if vacant, the previous land sales were Real Property Rights Conveyed: Fee Simple Estate analyzed. From a general examination of the land sales, it was determined that the location and Financing: Cash to Seller intensity of use are the most dominating factors in determining the sales price. The comparable land Verification: Selling broker and representative of grantee sales will be analyzed for the following factors: Property Rights Conveyed Appraisal Indicators: Conditions of Sale Financing Terms # of Units - 62 ± Market Conditions Density/Acre - 123 Location Floor Area - 59,770 ± Water Frontage FAR - 2.72 Density and Zoning Price/Floor Area - $31.62 Price/Acre - $3,742,574 J-83 Therefore, based on the preceding sales, the following adjustments are made to each sale. Price/Unit - $30,484 Price/SF - $85.91 Property Rights Conveyed Comments: All the sales were sold on the basis of a fee simple estate. The subject, as if vacant, is also valued on the basis of a fee simple estate, therefore, all the property rights conveyed are identical. No This reflects the sale of a non-water front lot adjustments are made to the sales for this factor. Conditions of Sale All the sales noted in this section were reported to be arm's length transactions, sold after appropriate marketing endeavors, and all parties were knowledgeable about the marketplace. Therefore, no adjustment is made for conditions of sale. Financing Terms The comparable sales were noted as being sold for cash or on a cash equivalent basis. Therefore, no adjustments are made to any of the sales for financing terms.

151 152 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Market Conditions Community Development District (CDD) The land sales that are used in this report sold in the time frame of February 2003 to January 2004. As per an agreement with the City of Miami and various other public agencies a Community Land prices have been rising significantly within the area. Rental rates in the area have increased Development District is being created in which the subject will be located. THE CDD allows for the over this time frame and there has been development activity in this area. There has been a sale of bonds to cover the property’s infrastructure cost. In addition the property will benefit from the significant increase in land values in the subject’s area over the past months. Therefore, upward development of a $45,355,518 within the CDD. The aforementioned factors enhance the value of the adjustments are made to all of the sales. property above that of the comparables. In consideration of the aforementioned upward adjustments are applied to all of the sales for this factor. Location The adjustment for location realizes that properties in areas of active growth and development, as Land Sale Adjustment Grid well as those easily accessible and highly visible usually sell for more per unit than properties in areas that do not offer these attributes. The subject’s residential parcels are located between NE 29th Sale Number 1 2 3 4 5 6 7 and 36th Streets, west of Biscayne Boulevard in Miami, Miami-Dade County, Florida. Sale Price/Unit $29,333 $38,000 $48,305 $34,910 $35,290 $48,295 $30,484 All of the sales are located between NE 18th Street to the south, NE 36th Street to the north, Property Rights ======Biscayne Boulevard to the west and Biscayne Bay to the east. The subject is located to the west of Conditions of Sale ======Biscayne Boulevard, however once the subject’s subdivision is completed, the sites will all be Financing Terms ======located within a planned subdivision, with a common identity, complete with parks, entrance Market Conditions + + + + + + + features and new structures. While currently, a location west of Biscayne Boulevard is considered Net Adjustment + + + + + + + less attractive than one to the east of Biscayne Boulevard, we consider the newness of the subject’s neighborhood will offset this factor. As such, no adjustment for location is applied to the sales. Location ======Water Frontage Water Frontage = = - - = - = Density & Zoning ------The subject does not have water frontage, while some of the sales used do have water frontage. CDD +++++++ Typically, residential apartments sell for greater amounts if they front the water, with unobstructed Net Adjustment - Price/Unit + + - + + - + views. Therefore, waterfront sites typically sell for greater amounts, on a per unit basis. J-84 Like the subject. Sales 1, 2, 5 and 7 are non-water front tracts of land. No adjustments are applied to LAND SALES CONCLUSION these comparables. Sales 3, 4 and 6 are all water front sites. As such, these tracts are superior to the subject’s and downward adjustments are applied to the sales. Based on the adjustments made to the comparable sales, we are of the opinion that the subject’s subdivided residential sites should have a value in the range of $29,333 to $48,305. Typically, Density and Zoning within Southeast Florida, a condominium’s land value accounts for approximately 12% to 15% of the end unit product. This equates to an end unit product of $195,553 to $402,542. This falls in line In terms of density and zoning, it is generally ascertained that the fewer number of units permitted with non-waterfront residential units in the subject’s neighborhood. Therefore, we conclude to a per acre, the higher the price/unit with all other factors held constant. On a Price/SF basis, the value of $42,500 per unit for the subject’s residential parcels. reverse is generally true; the greater the allowable number of units per acre, the greater the price/SF. The subject is to have a density of 238 units per net acre. Density Adjustment Sale Units/Acre Per Unit 1 113± Downward 2 150± Downward 392± Downward 462± Downward 5 103± Downward 6 123± Downward

153 154 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS

Commercial Land Sale 1 Location: 7195 NW 30th Street, Miami, Miami-Dade County, Florida Grantor: Banner Supply Co. Grantee: Buena Vista Group Date of Sale: November 2003 Consideration: $6,325,000 Real Property Rights Conveyed: Fee Simple Estate Financing: Cash to seller Size: 3.07± Acres or 133,729± SF Zoning: Industrial Verification: Grantee Recordation: N/A J-85 Utilities Available: All available Topography: Level and at street grade Required Site Work: Demolition of existing structure at $25,000 Appraisal Indicator: $47.30/SF, after addition of demolition costs

155 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Commercial Land Sale 2 Commercial Land Sale 3

Location: 2728 NE 2nd Avenue, Miami, Miami-Dade County, Location: 3800 NE 1st Avenue, Miami, Miami-Dade County, Florida Florida Grantor: Baymar Hotel & Properties, Inc. Grantor: Rockefeller Plaza, Inc. Grantee: Deco Village Grantee: Department of Off-Street Parking of Miami Date of Sale: August 2003 Date of Sale: April 2003 Consideration: $250,000 Consideration: $1,015,000 Real Property Real Property Rights Conveyed: Fee Simple Estate Rights Conveyed: Fee Simple Estate Financing: Cash to seller Financing: Cash to seller Size: 0.24± Acres or 10,454± SF Size: 0.724± Acres or 31,537± SF Zoning: Commercial Zoning: SD-8 Verification: Broker to Grantee Verification: Grantee Recordation: 21622/3913 Recordation: 21215/1039

J-86 Utilities Available: All available Utilities Available: All available Topography: Level and at street grade Topography: Level and at street grade Required Site Work: None Required Site Work: None Appraisal Indicator: $81.31/SF Appraisal Indicator: $32.18/SF

156 157 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Commercial Land Sale 4 Commercial Land Sale 5

Location: 3601 North Miami Avenue, Miami, Miami-Dade Location: 246 NE 26 Terrace between NE 26th Terrace and NE County, Florida 26 Street, Miami, Miami-Dade County, Florida Grantor: 3 DD LLC Grantor: Amazona VN Gran Grantee: Hollywood Beach Gate Resort Grantee: Mecca LLC Date of Sale: January 2002 Date of Sale: March 2001 Consideration: $970,000 Consideration: $2,120,800 Real Property Real Property Rights Conveyed: Fee Simple Estate Rights Conveyed: Fee Simple Estate Financing: Cash to seller Financing: Cash to seller Size: 0.904± Acres or 39,367± SF Size: 0.97± Acres or 42,415± SF Zoning: C-1 Zoning: C-1 Commercial with an SD overlay Verification: Knowledgeable Third Party Verification: Knowledgeable third party Recordation: 30151/3895 Recordation: 19556-4144

J-87 Utilities Available: All available Utilities Available: All available Topography: Level and at street grade Topography: Level and at street grade Required Site Work: Demolition of small building at $25,000 Required Site Work: Typical Appraisal Indicator: $25.27/SF, after addition of demolition costs Appraisal Indicator: $50.00/SF Comments: This is the sale of a vacant site on Biscayne Boulevard. The site was purchased by an investor, and had been listed for two and a half months at $50.00/SF.

158 159 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

COMMERCIAL LAND SALES SUMMARY Market Conditions The land sales that are used in this report sold in the time frame of March 2001 to November 2003. Sale Sale Date Size – SF Zoning Price/SF Land prices have been rising significantly within the area. Land values have been increasing in the 1 11/03 133,729± Industrial $47.30 subject’s market, especially after the start of construction of the Miami Performing Arts Center. The 2 08/03 10,454± Commercial 81.31 start of construction, for many, marked the official rebirth of the neighborhood. This set off a 3 04/03 31,537± SD-8 32.18 number of development announcements, which were summarized earlier within this report. 4 01/02 39,367± C-1 25.27 Furthermore, the subject’s development was caused additional interest amongst market participants. 5 03/01 42,415± C-1/SD 50.00 Therefore, we have adjusted the land sales that occurred prior to June 2003 upward, to account for the change in market conditions. LAND SALES ANALYSIS Location In order to derive an estimate of value for the subject site, as if vacant, the previous land sales were The subject is located on the east side of Miami Avenue between NE 29th and 36th Streets. This analyzed. From a general examination of the land sales, it was determined that the location and area has been the focus of renewed investment and development, however not to the extent of the intensity of use are the most dominating factors in determining the sales price. The comparable land area along and to the east of Biscayne Boulevard. Therefore, parcels which sold along Biscayne sales will be analyzed for the following factors: Boulevard are adjusted downward to account for this factor. Property Rights Conveyed Sale Frontage Adjustment Conditions of Sale 1 7195 NW 30th Street Upward Financing Terms 2 2728 NE 2nd Avenue None Market Conditions 3 3800 NE 1st Avenue Upward Location 4 3601 N. Miami Avenue None Density and Zoning 5 246 NE 26th Terrace Downward Size Density and Zoning Therefore, based on the preceding sales, the following adjustments are made to each sale.

J-88 The subject is currently in the process of having the zoning changed, through the implementation of Property Rights Conveyed an Special District (SD) Overlay. This process is common in the area, and sets specific development All the sales were sold on the basis of a fee simple estate. The subject, as if vacant, is also valued on guidelines for a specific area, neighborhood, or corridor. The subject overlay district has already the basis of a fee simple estate; therefore, all the property rights conveyed are identical. No been drafted and approved in principal. According to the City of Miami’s representatives, this adjustments are made to the sales for this factor. zoning change is imminent, and most if not all market participants are acting as if the zoning is already in place. The subject is currently zoned Industrial, which allows for commercial use, so, Conditions of Sale even if the overlay district were not approved, the sites would still be used for commercial purposes. All of the sales were sold under an industrial (allows for commercial use) or commercial zoning, All the sales noted in this section were reported to be arm's length transactions, sold after and no adjustments are required for this factor. appropriate marketing endeavors, and all parties were knowledgeable about the marketplace. However, Sale 2 reflects the sale of a property under a tax deferred exchange. Generally, a buyer is Size willing to pay a higher purchase price under this situation. Therefore, a downward adjustment is applied to this sale. No adjustment are applied to the remaining sales. The subject’s commercial parcels are to be of varying sizes. None of the sales utilized were so large or so small as to require adjustments, therefore, none were made. Financing Terms The comparable sales were noted as being sold for cash or on a cash equivalent basis. Therefore, no adjustments are made to any of the sales for financing terms.

160 161 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS

Community Development District (CDD) As per an agreement with the City of Miami and various other public agencies a Community Development District is being created in which the subject will be located. THE CDD allows for the sale of bonds to cover the property’s infrastructure cost. In addition the property will benefit from the development of a $45,355,518 within the CDD. The aforementioned factors enhance the value of the property above that of the comparables. In consideration of the aforementioned upward adjustments are SUBDIVISION SELLOUT ANALYSIS applied to all of the sales for this factor. Land Sale Adjustment Grid

Midtown East 43560 Allowable Value/ Value/ Market Value Market Value Sale Number 1 2 3 4 5 Location Parcel Number Land Use Net SF Net Acres Retail FAR Units Unit SF Residential Retail Sale Price/SF $47.30 $81.31 $32.18 $25.27 $50.00 Midtown E. Tract A Residential m 47,916 1.10 377 $42,500 $16,022,500 Midtown E. Tract B Residential n 40,946 0.94 377 $42,500 $16,022,500 Property Rights = = = = = Midtown E. Tract C Residential n 80,150 1.84 377 $42,500 $16,022,500 Midtown E. Tract D Residential n 93,218 2.14 319,000$ 65.00 $ 6,059,170 Conditions of Sale = - = = = Midtown E. Tract E Residential n 68,825 1.58 377 $42,500 $16,022,500 Financing Terms = = = = = Midtown E. Tract F Residential n 68,825 1.91 377 $42,500 $16,022,500 Midtown E. Tract G Residential m 67,082 1.54 377 $42,500 $16,022,500 Market Conditions = = + + + Midtown E. Tract H Residential 72,310 1.66 377 $42,500 $16,022,500 Midtown E. Tract I Residential 72,310 1.66 377 $42,500 $16,022,500 Net Adjustment = - + + + Midtown E. Tract J Reserved Tracts* 20,038 0.46 $0.00 $0 Midtown E. Tract K Reserved Tracts* 3,485 0.08 $0.00 $0 Midtown E. Tract L Reserved Tracts* 50,530 1.16 $0.00 $0 Location + = + = - * Reserved for Emergency and Public Vehicular Density & Zoning = = = = = Traffic as well as installation of Public Utilities 685,634 15.74 319,000 3,016 $128,180,000 $6,059,170 171.87 Value/SF: $247.28 $65.00 Size = = = = = Residential SF 518,364 11.90 518,364.00 CDD + + + + + Retail SF 93,218 2.14 Total: $134,239,170 611,582 14.04 Reserved Tracts 74,052 1.70 Net Adjustment – Price/Unit + - + + + Total 685,634 15.74 J-89

LAND SALES CONCLUSION Based on the adjustments made to the comparable sales, we are of the opinion that the subject’s subdivided commercial sites should have a value in the range of $50.00/SF to $80.00/SF. We conclude to $65.00/SF. This figure will be used within the discounted cash flow. The following page details the various parcels that will be created once the subject is subdivided. A 163 pricing matrix is also shown on this page. It is noted that the concluded market values have been ______Joseph J. Blake and Associates, Inc. ______input for the residential and commercial parcels. In reality, it is possible that individual parcels may Real Estate Appraisers and Consultants sell for slightly more or slightly less than these amounts, based on their location in the subdivision, and the time at which they sell.

162 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS

Aggregate Retail Value The aggregate retail value for Midtown Miami East assuming the sale of the property as individual parcel to developers is $134,239,170 or $134,200,000 (rounded). The aggregate retail value for Buena Vista West assuming the sale of the property as individual parcel to developers is $860,664,944 or $86,700,000 (rounded). It is noted that this is a hypothetical value estimate, and makes no deductions for the cost of construction, the time required to sell the units or the costs SUBDIVISION SELLOUT ANALYSIS associated with the sale of condominium units. This value conclusion does not consider potential price escalations between the date of value and the time the subdivision is completed. Therefore, the aggregate retail value is simply the sum of the individual parcel values as calculated on the chart on the previous page.

Buena Vista West 43560 Residential Allowable Value/ Value/ Market Value Market Value Location Parcel Number Land Use Net SF Net Acres Retail FAR Units Unit SF Residential Retail Absorption Buena Vista W. Tract A Retail 393,782 9.04 85,571 $65.00 $25,595,856 Buena Vista W. Tract B Retail 155,074 3.56 85,571 $65.00 $10,079,784 Buena Vista W. Tract C Retail 170,755 3.92 85,571 $65.00 $11,099,088 Residential Absorption Buena Vista W. Tract D Retail/Resid. 96,268 2.21 343$ 42,500 $ 14,577,500 Buena Vista W. Tract E Retail 156,380 3.59 85,571 $65.00 $10,164,726 Buena Vista W. Tract F Retail 213,444 4.90 85,571 $65.00 $13,873,860 Within the market analysis section of this report, we summarized the markets for residential parcels. Buena Vista W. Tract G Retail 12,197 0.28 85,571 $65.00 $792,792 We noted that there is a marked demand for residential properties, and this demand is projected into Buena Vista W. Tract H Retail 7,405 0.17 86,574 $65.00 $481,338 the foreseeable future, based on projected population growth. There have been numerous residential 1,205,305 27.67 600,000 343 $ 14,577,500 $72,087,444 buildings proposed for the subject’s neighborhood. Those that have been constructed have met 0.54 280.66 Value/SF: $151.43 $65.00 Residential SF 96,268 2.21 324,605.77 96,267.60 strong demand. Similar high density neighborhoods such as Miami Beach and Coral Way are noting Retail SF 1,109,038 25.46 Total: $86,664,944 similar results after the completion of a rental or condominium tower. 1,205,305 27.67 The subject’s residential buildings are to target middle-income individuals and families, especially those that work in the downtown area or on Miami Beach. Most new residential product that has been constructed in the Brickell and Miami Beach markets has targeted only very wealthy

J-90 individuals. Buildings that offer more reasonably priced units have met very strong demand. Based on the type of buildings that have been proposed for the subject, we estimate that the land for the construction of the residential units will sell at a rate of approximately 800 units per year, for the first four years, and then the remaining units will sell in the fifth year. Within Miami-Dade County, the average household size is calculated to be 2.84. Based on current population projections, Miami-Dade County will need to increase its housing inventory by approximately 20,904 (59,366/2.84) dwelling units. However, the projected demand for dwelling 164 units does not incorporate a vacancy factor. Typically, the market will experience some level of ______Joseph J. Blake and Associates, Inc. ______vacancy due to such factors as relocation. Therefore, the projected demand for housing is somewhat Real Estate Appraisers and Consultants understated. We determined that in order to sustain a 10% vacancy level over the projected period, approximately 2,090 additional dwelling units will be needed. Thus, incorporating a vacancy factor of 10% a total of 22,994 housing units, or 11,497 units per year will be needed to satisfy demand. We are assuming the Midtown Miami East and Buena Vista West will supply 800 units per year, or just fewer than 7% of the annual demand. The absorption of the residential parcels is projected to begin in 2004.

165 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

Commercial Absorption Marketing Typically, commercial developments and residential developments go hand in hand. As was clearly The subject will incur marketing costs throughout its pre-selling and sell-out period. These costs are stated, there is a large demand for residential housing, and the subject site is poised to provide 3,359 a result of the cost to sell the parcels and the related advertising costs. The marketing charges also housing units over the next half decade. These units will house approximately 9,540 persons, consider the public relations that are undertaken, when lobbying local governments for zoning assuming a typical household size. Other residential developments are proposed, under construction approvals, as well as costs associated with bringing prospective developers to the site, for purchase or have been built in the neighborhood, as well. There is little land available for planned consideration. We assume a 1% marking charge within the cash flow. commercial development. Many existing sites have been subdivided and the construction of a modern store would require assembling many smaller sites, demolishing existing improvements, Administrative Costs and then starting construction. This category includes the cost of payroll expenditures for the sales support staff, payroll taxes and The subject is situated just south of the Julia Tuttle Causeway, which leads to Miami Beach. The benefits, supplies, telephone, and utilities and similar costs associated with the sales effort. drive time from the subject site to Miami Beach is approximately 5 minutes. Shoppers from Miami Administration charges also can account for the costs of providing title insurance, doing title Beach, who currently have to drive upwards of 30 minutes to get to a discount retailer such as searches, and or recording deeds. We assume an administration charge of 4% within the cash flow. Target or Home Depot, would likely shop at this location. Therefore, we estimate that the commercial parcels at the subject will prove to be quite popular. We estimate the commercial Sales Commissions parcels will sell over a four-year period beginning within the first year of the cash flow. Commissions to commercial brokers typically are in the range of 6% for land, and we have used CLOSINGS this figure in the cash flow. Closings are projected to take place as the sales progress. The first closings are projected to occur in Total Expenses 2004. The final closing is projected to take place in 2008. Total expenses represents the sum of the above noted expenses. EXPENSES Net Proceeds We assume the subject’s total inventory is to be sold over the period 2004 through 2008. During

J-91 that time frame various costs will be incurred which must be deducted from the retail values, to Net proceeds are calculated by subtracting total expenses from the total sales revenue. calculate the net proceeds that will go to the owner. Infrastructure Costs Expenses are grouped into the following categories: Typically, a deduction is made for the cost of the infrastructure that must be put in place at the • Real Estate Taxes subject, in order to determine the value for the tracts. According to the developer, the cost of the • Marketing Costs required infrastructure for property is $77,534,730 of which $45,355,518 is allocated to a parking • Administrative Costs structure which will be erected on the western portion of the site. As per an agreement with the City • Sales Commissions of Miami and various other public agencies a Community Development District is being created which will allow for the sale of bonds to cover the majority of the property’s infrastructure cost. As Real Estate Taxes such, the subject’s developer will only incur $1,382,805 and $115,408 of infrastructure costs on the east and west tract respectively. Based on the infrastructure cost on the east tract this expense has Within the cash flow, we have assumed the subject’s owners will be responsible for the payment of been evenly spread out during the duration of the cash flow. The infrastructure cost for the western taxes at a rate of $18,705 per acre, growing at CPI, which is assumed to be 3% annually. As the portion of the tract is considered to be minimal with this expense incurred within the first 2 years of subject’s parcels are sold off, the resultant tax liability will be reduced. By the end of the sell-out this cash flow. period, the tax liability will be reduced to zero.

166 167 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

DISCOUNTED CASH FLOW MODEL Participants in the survey do not deduct a separate line item for entrepreneurial profit, and then make a separate assumption for a cost of funds factor. Rather, they prefer to discount the projected In order to quantify the income potential of the subject, a discounted cash flow analysis is proceeds at one rate, to a present value. This one rate incorporates factors such as entrepreneurial employed. The appraisers utilized a discounted cash flow model to assess the economic potential of risk, capital risk, and the cost of funds. For this reason, we valued the subject by using one yield rate the subject. This analytical method estimated the present worth of future cash flow expectancies by that incorporates these factors. individually discounting each anticipated collection at an appropriate discount rate. The analysis is typically applied to annual equity cash flow projections and is used to solve for the rate of return on EQUITY YIELD RATE (IRR) ANALYSIS invested capital that is generated or is capable of being generated in an investment during the period of ownership. An equity yield rate differs from an income rate such as cash-on-cash (equity dividend after debt service cash flow), in that is takes into consideration all equity benefits including the equity In the analysis of the subject, a year-by-year breakdown of the effective gross income is processed reversion at time of resale, in addition to annual cash flows. The yield rate is the single rate (internal against projected operating expenses. The series of cash flows are then discounted back to a total rate of return or IRR) that discounts all of the future equity benefits (cash flows and equity present worth at a market derived yield rate. reversion) to the original equity investment. The yield rate currently accepted by investors in the market can be applied to a projected cash flow in order to estimate the value of the cash flow and, The appraisers analyzed the components of the yield factor, or internal rate of return. The yield rate therefore, the value of the subject. represents the components of ownership risk, liquidity risk, and management risk. A vacant parcel of land that will be developed at some time in the future experiences a greater degree of risk than a The yield rate utilized to discount the projected cash flows and eventual property reversion was completed property. based on an analysis of anticipatory yield rates of several investors dealing in similar quality investments. These rates are not actual or historical rates based on prior purchases and actual cash Ownership is increased since the vacant land is not capable in most instances of giving income, and flows since what might have been considered acceptable under market conditions existing 5 to 10 therefore, all costs associated with holding the parcel must be borne by the owner. Liquidity risk is years ago may not be appropriate today. The rates instead reflect acceptable expectations of yields increased because the vacant parcel of land can not be easily converted into cash, as the property to be achieved by investors currently dealing in the marketplace. has no cash generating capability. Liquidity risk is also increased as a result of competition of other commercial parcels in the market. In the case of a large scale development, the management risk is Since the use of this method of analysis attempts to replicate the overall performance of the also increased since this type of development is subject to changes in zoning, water management investment from its inception to its termination, the rate utilized as a discount factor must reflect the policies, environmental issues, and social trends. total yield to the equity position. J-92 In order to account for the added risk associated with speculative land purchases, an investor will By definition, this yield rate is also known as the Internal Rate of Return (IRR). expect to earn a greater return on the investment than a less speculative investment. This added risk can be account for via two methods: "The annualized yield rate or rate of return on capital that is generated or capable of being generated within an investment or portfolio over a period of ownership. 1. by subtracting out a separate expense category for profit from the cash flows, before The IRR is the rate of discount that makes the net present value of the investment capitalizing the income at a lower yield rate that does not consider the added risk. This lower equal to zero. The IRR discounts all returns from the investment, including returns rate essentially covers the cost of funds needed to purchase the property. from its termination, to equal the original capital outlay. This rate is similar to the equity yield rate. As a measure of investment performance, the IRR is the rate of 2. by increasing the yield rate used in the discounted cash flow. discount that produces a profitability index of one and a net present value of zero. It is often used to measure profitability after income taxes, i.e., the after-tax equity The appraisers surveyed land developers that are active within the Florida market to see what yield rate." 10 method is typically used in the market. We surveyed representatives of Lennar, Avatar, and Atlantic Gulf Communities. We also consulted publications including The Appraisal Journal, by the The discount rate utilized herein is essentially an anticipated IRR for the subject, as estimated from Appraisal Institute. investment performance realized by market participants. Although the investment vehicle being analyzed herein is real property, competition for investment dollars in other investment media is All the developers surveyed indicated that they use the Internal Rate of Return (IRR) or yield rate keen, and the prudent investment manager must carefully consider all alternatives. analysis to evaluate land developments. This also was the consensus in the article Rethinking Speculative Subdivision Valuation for Loan Purposes, in The Appraisal Journal July, 1996.

10 Appraisal Institute, The Dictionary of Real Estate Appraisal, 3rd Edition (Chicago: Appraisal Institute; 1993), Page 188. 168 169 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS SUBDIVISION SELLOUT ANALYSIS

In order to properly estimate an appropriate yield rate for the subject, we investigated the yield rates GROWTH RATE that are being required by land developers on a nationwide basis. Each year, Price Waterhouse Coopers conducts a semi-annual nationwide survey of residential, office, retail, industrial, hotel In order to estimate the appropriate rate of growth for the subject’s parcels, we have researched the entertainment and mixed use land developers. According to their survey, “With the economy still Consumer Price Index, as estimated by the US Department of Commerce. The consumer price recovering, certain segments of the development land market remain on shaky ground, namely index has increased by the following amounts for the last 10 years. retail, office, and to some extent, apartment. Those active in these markets are proceeding cautiously and will likely continue to do so throughout the remainder of the year. On the other 1994 2.6% hand, the residential side, namely single-family, is enjoying a healthy year so far and will likely 1995 2.8% continue to do so with slowdowns evident in select markets nationwide.” 1996 3.0% 1997 2.3% “While many of our participants project that they may see an uptick in land prices over the 1998 1.8% remainder of the year, the average expected increase, 6.55%, remains unchanged from fourth 1999 2.2% quarter 2001, an indication that the market is stabilizing and investors are gearing up for a brighter 2000 3.4% 2003” 2001 2.9% 2002 1.3% The following chart shows the results of a survey conducted by Price Waterhouse Coopers. 2003 2.3% Average 2.5% Range Median Source: US Department of Commerce DCF Analysis We also consulted the Korpacz Investor Survey to determine what investors are projecting for Free and Clear IRR 11.00% - 35.00% 20.04% increases in expenses. The ranges and averages for the reported expense growth rates are shown IRR Subject to Financing 15.00% - 20.00% 19.00% below. YIELD RATE CONCLUSION Therefore, based on the market information that is available, we concluded that the most J-93 appropriate yield rate for the subject would be in the range of 15% to 20%. We have made this estimate giving consideration to the fact that the subject consists of sell-out of land only (no vertical improvements), the sell-out is projected to be relatively quick, there is government backing to the development, and there appears to be a large audience of potential purchasers in the market, who wish to construct residential or commercial properties. Based on this analysis, we conclude that an appropriate rate of return for the subject’s cash flows is 17%. The above yield rate is for the sale of the subject’s lots only. Overall, this yield rate is deemed appropriate for the subject based on the current market.

170 171 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants SUBDIVISION SELLOUT ANALYSIS

Average Annual Growth Rates For Development Expenses Second Quarter 2003

2nd Quarter 2003 2nd Quarter 2002

Infrastructure 2.00% -5.00% 2.50% -5.00% Average 3.39% 3.50% SUBDIVISION SELLOUT ANALYSIS Amenities 2.00% -5.00% 3.00% -5.00% Buena Vista Yards East Average 3.39% 3.50% Miami, Miami-Dade County, Florida Annual Revenue Growth Rate: 3.00% Advertising 2.00% -4.00% 2.50% -4.00% Annual Expense Growth Rate: 3.00% Marketing: 1.00% Average 3.19% 3.10% Administration (Closing Costs, Promos): 4.00% Real Estate Taxes 0.00% -4.00% 0.00% -4.00% Sales Commissions 6.00%

Average 2.81% 2.94% Inventory: 2004 2005 2006 2007 2008 Residential Units In Inventory 3,016 3,016 2,559 1,759 959 159 Administrative 0.00% -10.00% 0.00% -10.00% Residential Units Sold in Period 457 800 800 800 159 Residential Units Remaining 2,559 1,759 959 159 - Average 3.69% 3.10% Residential Land SF (Net) Remaining 439,819 302,322 164,825 27,328 - Contingency 0.00% -5.00% 0.00% -5.00% Residential Sales Price/Unit $42,500 $43,775 $45,088 $46,441 $47,834 Retail Land in Inventory 93,218 93,218 93,218 - - - Average 2.81% 2.94% Retail Land (Net) Sold in Period -93,218 - - - Retail Land SF (Net) Remaining 93,218 - - - - Other 2.00% -3.50% 2.50% -4.00% Retail Land Sales Price/SF $65.00 $66.95 $68.96 $71.03 $73.16

Average 2.90% 3.10% Total SF Land (Net) Remaining 533,037 302,322 164,825 27,328 - Total Acres Land (Net) Remaining 12.24 6.94 3.78 0.63 -

Revenue Source: Korpacz Real Estate Investor Survey, Second Quarter 2003 Residential Land Sales Revenue $19,422,500 $35,020,000 $36,070,600 $37,152,718 $7,605,626 Commerical/Retail Land Sales Revenue $0 $6,240,945 $ 0 $ 0 $0 Total Sales Revenue $19,422,500 $41,260,945 $36,070,600 $37,152,718 $7,605,626

Expenses: Taxes: $228,887 $137,606 $79,524 $13,976 $0 Based on the historical trends, we estimate that the subject’s land values will increase along with the Marketing: 1.00% $194,225 $412,609 $360,706 $371,527 $76,056 Administration: 4.00% $776,900 $1,650,438 $1,442,824 $1,486,109 $304,225 CPI. Over the last 10 years the increase in the CPI has ranged from 1.8% to 3.4%. The average for Sales Commissions: 6.00% $1,165,350 $2,475,657 $2,164,236 $2,229,163 $456,338 the ten-year period is 2.7%. Therefore, we have projected a growth rate of 3.0% annually for the Total Expenses $2,365,362 $4,676,310 $4,047,290 $4,100,775 $836,619 Net Proceeds $17,057,138 $36,584,635 $32,023,310 $33,051,943 $6,769,007 J-94 subject’s sales prices, as well as for the costs of taxes, marketing, administration, and sales Infrastructure Costs: $26,330,711 $6,582,678 $6,582,678 $6,582,678 $6,582,678 $0 commissions. Gross CDD Revenue (Includes ILA) ($6,582,678) ($6,582,678) ($6,582,678) ($6,582,678) $0 Less Net CDD Burden $276,561 $276,561 $276,561 $276,561 $276,561 The following cash flows are used in the valuation of Midtown Miami East and Buena Vista West. Net Proceeds $16,780,577 $36,308,074 $31,746,749 $32,775,382 $6,492,446 The value conclusion from Midtown Miami East is $82,000,000 while the value conclusion for $16,780,577 Discount Rate - Per Year 17.00% Buena Vista West is $59,100,000. We used Microsoft Excel, in the completion of all cash flows in Discounted Revenues $81,139,511 Value Conclusion $81,139,511 this report. Rounded $81,100,000 Value Per Net Acre $5,776,353

173 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants

172 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants FINAL CONCLUSIONS

The purpose of this report is to provide an overview and analysis of the residential (rental and condominium), office, retail, and hotel market’s within Miami-Dade County and specifically within the area of the subject. Additionally, we have determined the fee simple value as entitled and inclusive of CDD and grant funds and with infrastructure for the Midtown Miami East tract as well as that of the Buena Vista West tract as of April 10, 2004.

The subject consists of one of the only vacant tracts of land in eastern Miami-Dade County. The site has been used as railroad yard and therefore was never developed. The surrounding neighborhood SUBDIVISION SELLOUT ANALYSIS has been developed for years. There are no parcels of land that are of similar size within the

Buena Vista Yards West subject’s neighborhood. We searched within the Southeast Florida market for sales of similar tracts Miami, Miami-Dade County, Florida Annual Revenue Growth Rate: 3.00% of land, in infill locations, but were not able to find any that proved to have a meaningful correlation Annual Expense Growth Rate: 3.00% Marketing: 1.00% to the subject, in terms of value. Therefore, it was not possible to value the subject using the Sales Administration (Closing Costs, Promos): 4.00% Sales Commissions 6.00% Comparison Approach.

Inventory: 2004 2005 2006 Residential Units In Inventory 343 343 - - The subject site is to be subdivided into smaller parcels, after the proper infrastructure has been put Residential Units Sold in Period 343 - - Residential Units Remaining --- in place. The subdivided parcels will have an average size of approximately 1.3 acres. There have Residential Land SF (Net) Remaining --- Residential Sales Price/Unit $42,500 $43,775 $45,088 been many sales of smaller parcels of land, which are similar in size and shape to the parcels that

Retail Land in Inventory 1,109,038 1,109,038 739,359 369,680 will be created once the subject is subdivided. Retail Land (Net) Sold in Period 369,679 369,679 369,680 Retail Land SF (Net) Remaining 739,359 369,680 (0) Retail Land Sales Price/SF $65.00 $66.95 $68.96 We have used the Subdivision Sellout Analysis to value the subject. The process for estimating the Total SF Land (Net) Remaining 739,359 369,680 (0) value of a parcel land using the Subdivision Sellout Analysis is as follows. First, sales within the Total Acres Land (Net) Remaining 16.97 8.49 (0.00)

Revenue area, which are deemed similar to the subject, were researched. From the sales data, the appraisers Residential Land Sales Revenue $14,577,500 $0 $0 Commerical/Retail Land Sales Revenue $24,029,135 $24,750,009 $25,492,578 estimate the appropriate pricing schedule for the subject's product. Then a sellout time period is Total Sales Revenue $38,606,635 $24,750,009 $25,492,578 estimated along with the anticipated expenses. These revenues less the associated sales expenses Expenses: Taxes: $317,481 $252,398 $89,180 less a profit to the developer (entrepreneurial profit) result in a net income, which is discounted to a Marketing: 1.00% $386,066 $247,500 $254,926 Administration: 4.00% $1,544,265 $990,000 $1,019,703 present worth using appropriate yield assumptions.

J-95 Sales Commissions: 6.00% $2,316,398 $1,485,001 $1,529,555 Total Expenses $4,564,211 $2,974,899 $2,893,364

Net Proceeds $34,042,424 $21,775,110 $22,599,214 Assumptions made in the Subdivision Sellout Analysis were based on market conditions that were

Infrastructure Costs: $51,204,019 $17,068,006 $17,068,006 $17,068,006 summarized within the Market Analysis sections of this report. We provided a separate market Gross CDD Revenue (Includes ILA) ($17,068,006) ($17,068,006) ($17,068,006) Less Net CDD Burden $57,133 $58,275 $0 analysis for rental apartments, condominiums and commercial properties. The expenses that were

Net Proceeds $33,985,291 $21,716,835 $22,599,214 projected in the Subdivision Sellout Analysis were determined by typical market practices.

$33,985,291

Discount Rate - Per Year 17.00% As a result of our analysis the following conclusions regarding the property were made: Discounted Revenues $59,021,984 Less Negative Year $0 Value Conclusion $59,021,984 Rounded $59,000,000 As a result of our analysis specific conclusion regarding the site were developed. These conclusions Value Per Acre $2,132,273 are detailed below: Multifamily Rental - We believe the subject’s units will be able to command a rental rate on a per SF basis of between $1.40 to $1.70 based on the size of the units. Given historical trends we project 174 ______Joseph J. Blake and Associates, Inc. ______that rental rates within the market will increase based on CPI or at a rate of approximately 3% per Real Estate Appraisers and Consultants year barring any unforeseen economic downturns. Based on the comparables we believe an appropriate unit size for the subject’s units would be 725 SF to 750 SF for 1-bedroom units, 925 SF to 975 SF for 2-bedroom units and 1,250 SF for 3- bedroom units.

175 ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants FINAL CONCLUSIONS FINAL CONCLUSIONS

Demand for rental housing within Miami-Dade County is projected at approximately 5,174 rental As a result of our analysis the fee simple value of Midtown Miami East as entitled with and units per year, or 431 units per month. The need for additional rental housing is documented within inclusive of CDD and grant funds and with infrastructure as of April 10, 2004, is: our report. We are of the opinion that the units within the subject’s development would experience an absorption level within the range of 9 to 44 units per month. An absorption level toward the EIGHTY ONE MILLION ONE HUNDRED THOUSAND DOLLARS lower end of the range appears appropriate for a property containing a relatively low rental pool $81,100,000 while a larger building would tend to have an absorption rate toward the higher end of the range. As a result of our analysis the fee simple value of Buena Vista West as entitled with and inclusive Condominium - Based on the most recently released projects to come on-line an average sale price of CDD and grant funds and with infrastructure as of April 10, 2004, is: of $313.85 to $349.96 per SF is indicated for projects within the subject’s market. In consideration of the presented data we believe the subject would have an average asking price of $300 to $350 per FIFTY NINE MILLION DOLLARS SF. We have also estimated an absorption range of 20 to 30 units per month for product within the $59,000,000 development. Given the conditions of the market and the demand for product we believe that upon the release of the units a higher rate of absorption will be reflected. Despite this fact we have assumed an absorption range of 20 to 30 units per month. Based on this assumption and taking into consideration the average period of construction for a multifamily building within Miami-Dade County of 18 to 24 months we believe that upon construction completion the proposed building would be substantially sold.

Retail - In-Line/Local Space rental rates of within $20.00 to $30.00 per SF; anchor rates at $11.00 to $20.00 per SF; ancillary retail space located within multifamily or office buildings is estimated to yield a rental rate of $20.00 to $30.00 per SF. All of the aforementioned leases are projected to be a net basis with CPI or stepped increases in rent. According to information provided by the subject’s developer they intend to construct 2,800 condominium units on the site. Additionally, 700 rental units are to be constructed within the development. Between the subject’s area, downtown Miami and the Brickell corridor 9,000 units,

J-96 inclusive of the subject’s product are anticipated to be constructed over the course of the next 3 to 10 years. In consideration of the residential growth within the area we anticipate a strong demand for retail space within the neighborhood. As such, we anticipate a healthy absorption level of the property’s retail space.

Office - The subject’s proposed office space will represent the most recently constructed buildings within the area. In consideration of the aforementioned we believe a rental rate within the range of $20.00 to $28.00 per SF for space is appropriate. The developers for the subject have stated that they have been approached by several office users who have expressed an interest in office space within the area. In consideration of the aforementioned, an opportunity for office development on the subject’s pods exists given a built to suit situation in which case the absorption of space is not considered to be an issue despite vacancy levels within the market.

Hotel - We concluded to an ADR of $90 to $110 per room for any hotels which would be constructed on the subject site with an initial stabilized occupancy rate of 65%. to 70%. As such, a RevPAR of $58.50 to $77.00 per room would be indicated for any hotels which may be constructed on the site.

176 177 ______Joseph J. Blake and Associates, Inc. ______Joseph J. Blake and Associates, Inc. ______Real Estate Appraisers and Consultants Real Estate Appraisers and Consultants J-97 J-98 J-99 J-100 J-101 J-102 J-103 J-104 J-105 J-106 J-107 J-108 J-109 [THIS PAGE INTENTIONALLY LEFT BLANK] J-110

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