Request for financing package for The West End Project in Edwards, CO. *Facts and figures are outdated and no longer relevant to current market conditions.

1.
Commercial Mixed‐Use Development
Edwards, CO (In the Vail Valley)
Request for Financing or JV Equity
Fully Entitled and Approved Project including Water Rights
Phase 1 – Building 3 Phase 2 – Building 1 Phase 3 – Building 2
26,000 SF Retail 18,000 SF Retail 14,000 SF Retail
26,000 SF Office 20 Workforce Units 58 Market Rate Units
52 Workforce Units 55 Market Rate Units
www.TheWestEndEdwards.com
V 3.0 ‐ 12/1/08

2. Table of Contents
I. Executive Overview
II. Economics
III. Site Plan and Architecture
IV. Market
V. Articles and Press Releases

3. Midtown Group, LLC
I. Executive Overview

4.
The West End, Edwards, CO
Project Overview‐
The West End is a fully designed and
entitled (zoned and platted) vertical mixed B2‐ PHASE 3 B 1‐ PHASE 2
use development on 5.3 acres in the
commercial core of Edwards, CO. The site
is located in the heart of the Vail Valley just
14 miles west of Vail and 4 miles west of
Beaver Creek along the I‐70 corridor. We
have spent the last 3 years assembling the
land, securing the entitlements as well as
B3‐ PHASE 1
the raw water for the project. All of this is
complete and we are poised to pull a
building permit and start construction. We
have agreed to an Initial Guaranteed
Maximum Price (IGMP) with our contractor
and 54% of the construction costs have been hard bid with the sub contractors. With a tentative 2009
start of construction, we anticipate
further savings when the job is
bought out. Below is an overview
of the project including a program
summary and total cost by phase
as well as information about the
workforce housing component of
the project.
Program Summary‐
Phase Building Residential Retail Office Cost
1 3 52 units‐100% workforce 26,000 SF 26,000 SF $37,700,000
2 1 75 units‐20 workforce, 55 market rate 18,000 SF n/a $38,500,000
3 2 58 units‐100% market rate 14,000 SF n/a $32,900,000
Total 1, 2, 3 185 Units 58,000 SF 26,000 SF $109,100,000
A Midtown Group Development 1 12/08

5.
Workforce Housing‐ It is important to note that Eagle County is very motivated to see this project
succeed. The West End conforms to Eagle County’s 2008 Workforce Housing Guidelines that require
40% affordable/workforce housing for new projects in unincorporated Eagle County. Not only has there
been significant demand for the units, but over 25% of the units were purchased by institutional buyers
(I.E. School District, Fire Department, etc.) for their employees. The County is committed to help finance
the project and has stated they will backstop all remaining unsold workforce units upon receipt of
certificate of occupancy. This is significant and the details still need to be finalized with the Housing
Director and Eagle County.
Project Financing‐
Current Debt‐ We currently have a low leverage $6.4M land & entitlement loan on the property. The
loan is 46% loan to value based on a revised appraisal by National Valuation Consultants dated
November 2008. The loan matures on March 19, 2009.
Current Equity‐ The total cost incurred to date is $17.0M with just over $10M of cash invested in the
deal from the ownership group.
New Financing – We are seeking two types of financing:
1. Land & Entitlement Loan‐ This loan will replace the existing bank of America loan that matures
in March 2009. We are requesting a 12 month term with one 6 month extension and an interest
reserve. With the current appraised value the loan should be at approximately 50% loan to
value.
2. Construction Loan‐ This loan will be used to complete Phase 1 of the development. Depending
on the loan to value the construction loan would be in the $25 ‐ $30 million dollar range.
Pre‐sales & Pre‐leasing‐
Residential‐ In January 2008 we started the residential pre‐sales in earnest with a series of kick‐off
events, press releases, parties and gatherings. Due to the high demand for workforce housing in the Vail
Valley, 75% of the workforce housing units were pre‐sold in the first 90 days of offering them to the
public. Many of the units were purchased by institutional buyers such as the School District, Fire
Department, Cordillera, local businesses, etc. Late in the summer, we experienced a fall‐out of a
portion of our workforce housing buyers due to re‐contracting requirements by HUD and the fact we did
not start construction in June as originally communicated.
In February 2008 we released the first group of market rate residential units to the marketplace. These
units were also well received and we pre‐sold over 35% of the units by early summer. Similar to the
situation with the workforce units and HUD, a portion of the buyers fell out of contract in September.
All of the workforce and market rate buyers were given the opportunity to convert their contracts to
reservations ($5,000 refundable) and many of them have done so. Once we gain visibility to the start of
construction we will re‐launch our marketing efforts and believe the buyers will return.
A Midtown Group Development 2 12/08

6.
Commercial‐ We have seen strong demand for the commercial space since early this year. Vacancy is
still low in Edwards for retail and there is a lack of quality Class A office space in the Vail Valley in
general. As of September 2008, we had over 40% of the project committed for retail and office space.
We have seen some of these tenants slow down the process until they see a strong indication that we
are starting construction. The majority of the tenants are local or regional business with sound credit
and many have multiple locations in the Vail Valley.
Exit Strategy‐
Scenario 1 Land Sale‐ Sell the land “as is” in 12‐18 months upon the return of normal values in the Vail
Valley. There are no other projects like The West End in the pipeline and we expect the value of the
entitled land to return to $18M‐$20M or more once the credit markets improve. In July 2007, the land
was appraised for $17,250,000 including entitlements and recently adjusted down by 20% due to
current economic conditions.
Scenario 2 Vertical Construction‐ If the ownership group decides to go vertical, the best way to do this is
in phases. By phase the residential units, whether they are built for sale or for rent, will be sold or
leased up respectively, and the residential and commercial will be sold or refinanced upon stabilization.
Repayment of the construction loan will occur through the sale or refinance of the residential units and
any remaining balance will be retired through the sale or refinance of the commercial space.
For more information about the project please visit the project website at
www.thewestendedwards.com.
A Midtown Group Development 3 12/08

7. Midtown Group, LLC
II. Economics

8. The West End ‐ Edwards, CO
Phased Project Return Analysis
PHASE 1 ‐ PHASE 2 ‐ PHASE 3 ‐ TOTAL PROJECT
Develompment Cost BUILDING 3 BUILDING 1 BUILDING 2 PHASED
Land Acquisition $ 4,683,357 $ 3,269,911 $ 3,206,623 $ 11,159,891
Design & Consultants 957,817 1,207,559 929,624 3,095,000
Construction Costs 23,030,872 28,352,121 23,075,551 74,458,543
Soft Costs 3,485,082 3,440,669 2,720,080 9,645,831
Overhead & Accounting/Reimbursables 1,375,048 1,523,431 1,261,535 4,160,014
Financing Costs 896,333 554,529 459,199 1,910,061
Interest Expense 1,322,728 1,260,992 1,147,303 3,731,023
Mezzanine Financing Cost 1,175,111 ‐ ‐ 1,175,111
Total Cost $ 36,926,348 $ 39,609,213 $ 32,799,914 $ 109,335,475
Value Analysis
Net Sales Proceeds
Residential ‐ Workforce Housing Sales Proceeds $ 14,077,044 $ 7,508,041 $ ‐ $ 21,585,084
Residential ‐ Market Rate Housing Sales Proceeds ‐ 36,853,820 42,051,041 78,904,861
Commercial Sales Proceeds & Cashflow 35,527,584 11,917,085 9,825,644 57,270,313
Total Sales Proceeds
49,604,627
56,278,946
51,876,684 157,760,258
Net Profit $ 12,678,279 $ 16,669,734 $ 19,076,770 $ 48,424,783
Return on Cost 34.3% 42.1% 58.2% 44.3%
Unlevered Project IRR 40.5% 52.8% 38.2%
Senior Interest Rate 8.00% 8.00% 8.00% 8.00%
Mezzanine Interest Rate 10.00% N/A N/A 10.00%
Notes:
1. Land is shown at original basis and has not been discounted
2. Development Cost ‐ 54% of the construction cost has recently been hard bid
3. Development Cost ‐ Design/Consultants, Site Construction Cost, & Soft Costs are allocated per Building GSF
4. Equity ‐ There is currently $10MM of Equity in the project related to all 3 phases
5. Approximately $3.5MM of Phase 2 and 3 infrastructure cost will be built and paid for in Phase 1, and are not included in the costs above.
Assumptions
PHASE 1 ‐ PHASE 2 ‐ PHASE 3 ‐ TOTAL PROJECT
Project Size BUILDING 3 BUILDING 1 BUILDING 2 PHASED
Site Size ‐ Acres 2.22 1.55 1.52 5.29
Site Size ‐ Square Feet 96,703 67,518 66,211 230,432
Building Gross Square Footage 103,958 131,064 100,898 335,920
Commercial
Gross Square Feet 52,000 18,000 14,000 84,000
Blended Lease Rate (NNN) $40.11 $ 42.00 $ 44.00
Vacancy 5.0% 5.0% 5.0%
Cap Rate 6.0% 6.0% 6.0%
Residential
Workforce Housing
Number of Units 52 20 ‐ 72
Avg Price / SF $341.61 $ 346.66 N/A
Market Rate Housing
Number of Units ‐ 55 58 113
Avg Price / SF N/A $ 565.00 $ 625.00
Midtown Group ‐ CONFIDENTIAL Version 3.0 12/10/08

9. Midtown Group, LLC
III. Site Plan & Architecture
(All entitlements are approved
and vested rights have been granted)

10. Section III : Site Plan and Architecture
Site Plan:
PHASE 3 – BLDG 2 PHASE 2 – BLDG 1
PHASE 1 – BLDG 3
Building Summary:
Residential Commercial
Workforce Market Rate Retail Space Office Space
Phase 1 - Building 3 52 Units - 26,000 SF 26,000 SF
Phase 2 - Building 1 20 Units 55 Units 18,000 SF -
Phase 3 - Building 2 - 58 Units 14,000 SF -
Subtotal 72 Units 113 Units 58,000 SF 26,000 SF
TOTAL 185 Units 84,000 SF
V 3.0 – 12/1/08

11. Renderings of Edwards:
The view from Highway 6, this will be the main entrance to The West End
The view from across the street at Edwards Plaza
V 3.0 – 12/1/08

12. Rendering of the shopping plaza inside The West End
Property Photograph:
V 3.0 – 12/1/08

13. Midtown Group, LLC
IV. Market Information

14. Section IV : Market
Location: The West End Development is located in the central submarket of the Colorado office and
retail market. Edwards is considered the most desirable community in the Vail Valley
based on the county commissioned housing needs assessment and is less than 15 miles to
Vail, 5 miles to Beaver Creek, 20 miles to the regional Vail-Eagle Airport and 110 miles to
downtown Denver.
Geographic Barriers to Entry
Land available for development in Eagle County is very limited as the federal government
owns 84% of the land in the county. Of the 16% of the county that is in private ownership,
approximately 80% is encumbered by steep slopes, flood plains or various other
development constraints. As a result, only 3 to 4% of the total land area in Eagle County is
actually available for development, and much of this land has already been developed.
Market Studies: Numerous studies have been commissioned in the Vail Valley and for the West End
specifically. These studies are available at your request and consist of the following:
• RRC Associates: Eagle County Needs Assessment 2007
• ULI: Eagle County Colorado, A Regional Approach to Affordable Housing 2006
• Prior & Associates: Housing Market Study for the West End Development
For Sale Market / Based on the most recently completed Housing Needs Assessment (commissioned by
Work Force Eagle County), there is an immediate need for approximately 2,300 residential units.
Housing: Using the metrics of the average Eagle County household size of 2.74 persons, at least
11,500 new housing units will be needed over the next two decades. This increase
represents a demand for 500 to 600 new housing units per year to service year-round Eagle
County residents over this period, excluding any additional housing demand created by the
second-home housing market. The community of Edwards is considered the most
desirable location to live in Eagle County and the RRC Needs Assessment established that
“the additional amounts they are willing to pay for homes in their first choice community
are significant – averages $193,000 for homeowners……”. In addition, the RRC Needs
Assessment determined that “Edwards is the community most preferred by residents who
would like to buy, ….with Vail ranking third among first choice locations.”
The influx of wealthy out-of-town buyers has significantly increased the median Eagle
County home price. According to the Eagle County Housing Department (ECHD), the
county has an estimated shortfall of 3,500 affordable-housing units. The 2002 Eagle
County Needs Assessment, conducted by RRC Associates, a Boulder-based market
research firm, identified 4,100 households paying more than 30 percent of their household
income for housing. RRC Associates adjusted that figure to 4,200 to account for sampling
error. Since that needs assessment, 700 affordable units have been built at Miller Ranch,
Middle Creek, and Buffalo Ridge. Thus, the identified need of 3,500 affordable units is the
difference between the 4,200 households identified in 2002 and the 700 affordable units
built since then.
Office / Retail Several factors drive Colorado’s residential, retail and office market; including improved
Market: job and population growth that have under pinned the recovery process and resulted in
decreased vacancy and substantial positive absorption.
Over the last several years the Eagle County retail market has been thriving, with high
absorption rates, decreased vacancy, and relatively low amounts of new supply. As new
V 3.0 – 12/1/08

15. housing developments emerge, retail developments follow to provide ancillary services,
driving the market and resulting in positive absorption and rising rental rates. Nearly all of
the square footage being built comes online as occupied.
The Eagle County retail market is benefiting from a higher than average income percentage
as Colorado ranks in the top ten in the country for highest per capita personal income.
Incomes in Colorado for 2005 rose 5.1%, which was higher than the national average of a
4.6% increase.
The Edwards retail market in the second quarter of 2007 recorded a 3.2% vacancy rate, one
of the lowest seen in several years. The Edwards retail market continues to boast a
significantly lower vacancy percentage than the national average, which falls between 7
and 8% for all class and product types.
Asking lease rates in the Edwards retail market are increasing year after year. Current
average asking rents in the Edwards market have already surpassed $38.00 NNN.
General Community Base Statistics
Demographics / Eagle County (Vail Valley) Population 52,236
Supply & Demand 2015 Projected Eagle County Population 66,113
Data: 2007 Eagle County Households 18,924
2007 Percentage of Owner Units 70%
2007 Edwards Population (per 2000 consensus) 8,257
Unincorporated 24,024
Number of Housing Units 29,774
Average Eagle County Household Size 2.74
2007 Demand for Residences 4,446
2007 Supply of Condo/Townhome/Triplex Residences Available 1086
under $400,000 108
$400,000 - $1,000,000 378
$1,000,000 + 600
2007 Undersupply 3,398
Out-of-State Owner Units 49%
Out-of-State Condo Owner Units 64%
Eagle County Median Household Income $81,100
Eagle County Median Household Income for Owner Residents $90,000
Eagle County Average Household Income $100,000
Condos as a Percentage of Housing Stock 45%
Median Sale Price for Residences in Eagle County – 2006 (p. 13) $519,300
Median Sales Price for a Condo in Eagle County 4/07 (p. 89 RNA) $1,050,000
Number of Condo Units sold in 2006 487
Condos as a % of construction between 2000 and 2005 25%
Housing Stock valued over $350,000 78.6%
Households earning greater than 120% AMI 43%
Households that earn over $100,000/yr 47%
Eagle County households that earn greater than 140% of AMI and 32%
can afford a home costing greater than $334,741
As prices increase the % of out-of-area ownership increases
V 3.0 – 12/1/08

16. Condo Sales as % of Total Sales 40%
From 2000-2005, the % of sales above $400,000 has increased to 68%
West End Related Statistics
2007 Median Household Income – Edwards $125,832
Residential Condos/Townhomes/Triplexes in the Vail Valley 1,086
Residential Condos/Townhomes/Triplexes in Edwards 478
Number of Condos sold in Valley over past 36 months 1,660
Number of Condos sold in Edwards over past 36 months 154
Number of Condos currently for sale in Valley 592
Number of Condos currently for sale in Edwards 19
Number of condos sold in $350,000 to $650,000 price range 578
Number of units anticipated to come on line in next 24 months 0
Average Sale Price per Square Foot for Condos in Eagle – 2006 $422
Average Sale Price per Square Foot for Condos in Edwards – 2007 $449
Average Sale Price per Square Foot for Deed Restricted Condos in $375
Edwards – 2007
Edwards had the majority of the sales in Eagle County greater than $800,000 in 2006 (30%
of sales in Eagle County) (p. 54 of needs study).
The Colorado Department of Local Affairs, the state agency responsible for demographic
projections, and the ECHD project that over the next two decades the county’s year-round
resident population will grow significantly:
• The county’s population is projected to grow by 15,700 year-round residents in the next
decade from an estimated 49,300 to 65,000 in 2015.
• The county’s population is projected to grow by an additional 15,700 year-round
residents to 80,700 by 2025.
The Colorado Department of Local Affairs, the ECHD, and RRC Associates have
projected significant employment growth over the next two decades as well:
• The county’s employment is projected to grow by 18,265 jobs by 2015.
• The county’s employment is projected to grow by an additional 18,283 jobs by 2025.
Although some of these new employees will continue to live outside the county and
commute from surrounding areas, competitive pressures from surrounding ski resort areas
in Summit County (Keystone and Breckenridge), Vail and the restarted oil and gas industry
in nearby Garfield County are likely to create more pressure on Eagle County to provide
for the housing needs of its future workforce.
According to the County Needs Assessment and interviews with local realtors, “..it is
estimated that 50 percent of purchasers are second homebuyers. Second homebuyers are
starting to create competition down valley, especially in Avon and Edwards.” 30-40% of
these buyers are from the Front Range (Denver area).
V 3.0 – 12/1/08

17. Commercial Type Gross
Property Rental Rate Notes
Comparables: SF
Leasing Riverwalk Retail 801 $32.00 NNN
Edwards Village 2 Retail 1,405 $36.00 NNN Village Center 2 built 1997
As of Dec. 2007 Riverwalk - Diamond Retail 733 $32.00 NNN
Riverwalk - Quartz Retail 959 $37.50 NNN
Edwards Village Center Retail 1,600 $39.00 NNN Built 1997
Sales Type Gross Notes
Property Price $/SF
SF
As of Dec. 2007 Riverwalk – Diamond Office 572 $290,000 $506.99 Under Contract
Riverwalk – Garnet Office 895 $400,00 $446.93 Under Contract
Riverwalk – Opal Office 1,431 $599,500 $418.94 Under Contract
Riverwalk – Quartz Retail 923 $498,000 $539.54 Sold June 07
Edwards Village Center Retail 2,733 $1,463,490 $535.49 Sold Sept 07
Riverwalk – Garnet Retail 1,320 $700,000 $530.30 Sold Oct 06
Riverwalk – Quartz Retail 959 $500,000 $521.38 Sold Aug 07
Riverwalk – Crystal Retail 1,549 $685,000 $442.22 Sold June 06
Riverwalk – Opal Retail 787 $485,000 $616.26 Sold Nov 06
Sales Comparables:
Market Rate Sq. Price Price
Condo Complex Unit # Bed List Price Sold Price
Ft. PSF PSF
As of Dec. 2007 Gates @ Beaver Crk N/A 2b/2b 1,300 $1,140,000 $877 N/A N/A
Gates @ Beaver Crk N/A 3b/3b 1,900 $1,700,000 $895 N/A N/A
Emerald N/A N/A 1,900 N/A N/A $1,100,000 $579
Topaz R204 2b/1.5b 870 $349,000 $401 $391,954 $451
Quartz N/A N/A 1,537 N/A N/A $680,000 $442
Ruby N/A N/A 1,167 $500,000 $429 N/A N/A
Ruby 204 1b/1b 1,167 $489,868 $420 $489,868 $420
Amber R319 2b/1.5b 890 $347,000 $390 $347,000 $390
Amber R311 2b/1.5b 924 $369,000 $399 $360,000 $390
Amber R303 2b/1.5b 924 $355,000 $384 $355,000 $384
Red Tail B3 3b/2.5b 1,523 $549,900 $361 $530,000 $348
Stonegate Village 111 2b/2.5b 1,232 $427,000 $347 $427,000 $347
Deed Restricted
Sq. Price Price
Condo Complex Unit # Bed List Price Sold Price
Ft. PSF PSF
As of Dec. 2007
Amber R319 2b/1.5b 890 $347,000 $390 $347,000 $390
Amber R204 2b/1.5b 924 $355,000 $384 $355,000 $384
Amber 311 2b/1.5b 924 $369,000 $399 $369,000 $399
Amber 317 2b/2.5b 1196 $425,000 $355 $425,000 $355
Crystal R208 2b/1.5b 830 $335,000 $404 $335,000 $404
Topaz R204 2b/1.5b 870 $349,000 $401 $349,000 $401
V 3.0 – 12/1/08

18. Compelling • Internationally renowned, the Vail Valley has been insulated from the significant
Characteristics deterioration of residential values experienced by many communities across the United
States and remains one of the few U. S. locations with development opportunity.
• Real estate sales through the end of 2007 show an 7.5% increase over 2006, with a
total dollar volume of $2.96 billion and nearly 2700 transactions.
• Significant pent-up demand resulting in growing local, national and international
demand in a small geographically constrained community.
• Based on numerous housing needs studies and economic reports, Edwards has been
identified as the most desirable community to live in the Vail Valley (page 63 of Needs
Assessment).
• The geographically constrained and environmentally sensitive market limits the
potential for over-development and limits the potential for future competing projects.
• Vail is currently experiencing a redevelopment renaissance with over $1 Billion of new
investment.
• The residential component of the West End is designed and priced to meet the highest
demand segment of the undersupplied local market
• The market has an immediate need for 2,300 residential units
• Edwards has the highest median household income in the Vail Valley at $125,000.
V 3.0 – 12/1/08

19. Midtown Group, LLC
V. Articles & Press Releases