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03/17/2008 COMMUNITY REDEVELOPMENT AGENCY AGENDA Location: Council Chambers - City Hall Date: 3/17/2008- 1 :30 PM 1. Call to Order 2. Approval of Minutes 2.1 Approve the minutes of the March 3, 2008 CRA meeting as submitted in written summation by the City Clerk. ~ Attachments 3. CRA Items 3.1 Pursuant to CRA RFP 10-08, and the recommendation of the Selection Committee, award a contract for Retail Recruitment and Marketing Services for Downtown Clearwater to ERA/Downtown Works of Washington, D.C. in the amount of $ 145,000, plus out-of-pocket expenses not to exceed $20,000, and authorize the Executive Director to execute the Contract for Services on behalf of the CRA. ~ Attachments 4. Other Business 5. Adjourn Meeting Date: 3/17/2008 Community Redevelopment Agency Agenda Council Chambers - City Hall SUBJECT / RECOMMENDATION: Approve the minutes of the March 3, 2008 CRA meeting as submitted in written summation by the City Clerk. SUMMARY: Review Approval: 1) Clerk Cover Memo Item # 1 Attachment number 1 Page 1 of 4 COMMUNITY REDEVELOPMENT AGENCY MEETING MINUTES CITY OF CLEARWATER March 3, 2008 unapproved Present: Frank Hibbard Carlen Petersen John Doran George N. Cretekos Paul Gibson Also present: William B. Horne II Jill S. Silverboard Rod Irwin Pamela K. Akin Cynthia E. Goudeau Patricia O. Sullivan Chair/CRA Trustee CRA Trustee CRA Trustee CRA Trustee CRA Trustee City Manager Assistant City Ma Assistant City Man City Attorney City Clerk Board Reporter The Chair called the meeting to order at 1 :00 To provide continuity for research, ite necessarily discussed in that order. 2 - Approval of Minutes 2.1 A rove the minutes of the Fe summation bv the City Clerk. ty Redevelopment ritten summation by the rried unanimously. Timetable and Develo t Process. Material mmunity Redevelopment Agency) meeting the CRA tive Director discussed the Agency development priorities nt of determining the Board's priorities and establishing . Items considered were: 1) Harborview Center elopment; 3) Coachman Park redevelopment; 4) At t t discussion, the Board determined that commencement of a process for th ent of the Harborview Center should be the first priority, and instructed staff t for Board consideration, in the 1 st quarter of 2008, a proposed redevelopment pro s, timetable and materials. Additionally, Board instruction to staff was to prepare a recommended redevelopment process/strategy that reflected a "significant degree of market reality," including direct "front-end" input from the development community to assess Community Redevelopment Agency 2008-03-03 1 Item # 1 Attachment number 1 Page 2 of 4 what type of development program would be required to attract the requisite private development and heighten the likelihood that an RFP (Request for Proposals) would lead to successful redevelopment. The Board also expressed the desire that the process be timely, efficient, and move forward the effort as expeditiously as practical. Public input processes should be focused and informed around the development realities of the 'te and redevelopment objectives of the CRA. The redevelopment process and timetable as well as d designed to meet Board expectations and maximize the City' successful public referendum approval, meet public policy a downtown, and attract the requisite private investment to ma In preparing the materials for this project, however, seve where staff requires policy Board direction in order to complete t proceed with the process. CRA Executive Director Rod Irwin r 1) The Downtown Redevelopment Plan does not allow redevelopment program for the Harborview Cente for the Harborview Center site suggests reside that will create the best redevelopment progr be amended to include residential as an all The City Attorney said a referendum or a government facility is constructe the rise replacement structure that co ts it redevelopment. nt use continues ade for a low- talyst for nearby Consensus was to n Ha desc (Option Avenue to development site s the Harborview Center cent, shared parking lot between Harborview for use by Main Library patrons. This shared 'ng spaces and is used predominately by Stein s some overflow library parking and jacent parking lot would provide greater for parking nd/or a project component that could support he Downtown Plan. Because the 28-foot contour distinct Charter provisions to the respective parts - there development site: a) Option 1 includes the whole of the acres) and b) Option 2 includes only that portion lying f 2.8 acres). Question: Should the offering for the ent site include all or a portion of the shared parking area redevelopment site include the full extent of the parking area es) OR be limited to the parking area extending from Osceola ntour line (Option 2, totaling 2.8 acres)? Consensus s that the redevelopment site should comprise Option 1, which squares off the parcel (total 3.18 acres). Community Redevelopment Agency 2008-03-03 2 Item # 1 Attachment number 1 Page 3 of 4 3) There are 37 parking spaces (including three handicapped spaces) in the Main Library parking lot. The staff report for the library development order application stated that libraries do not generate the same demand for parking as other administrative, government offices because of the significant amount of space devoted to book storage and other non-demand generating uses. Therefore, the Code standard of three to five parkin spaces per 1,000 square-feet of gross floor area was not applied to the 89,416 square-t ibrary. The staff report also stated the availability of 252 shared parking space th 10 the south and west of the library and accessibility by a PSTA (P.' Su Authority) bus route as mitigating factors. The developm r applic library parking spaces was approved on March 19, 2002. stion: Sh needs of the library be accommodated as part the prefer borv' redevelopment project? The Library Director has indicate spaces, plus three handicapped spaces to accommodate "0 It was stated that library traffic would increase if branch said the Library Director had requested 90 additional parking spa es. S parking arrangements. Consensus was to increase parking on the 4) The City is leaseholder to three active Ie adjacent parking. Terms for two of the thr through September 2009. Pickles Plus ha original six years and three-month conceptual planning and refere site would extend to March 201 County). Assuming a posi . continue to accommodat approachin expiration of t Rec ent be au er 2010 gh December 2010. as recomm ded that focus groups and a large public up of developers to clarify what types of developments s would be attractive. erm lease of the Harborview Center site and opposed market-based lease, long enough for a developer to earn a I report to the City Council periodically throughout the process. oran moved to approve the Harborview Redevelopment Process, timetable, and deve er query material and authorize CRA staff to initiate the redevelopment process. The motion was duly seconded and carried unanimously. Community Redevelopment Agency 2008-03-03 3 Item # 1 Attachment number 1 Page 4 of 4 Staff efforts on the property brochure were complimented. Consensus was for the brochure to also feature downtown boat slips and sail boats, along with a disclaimer indicating that project is in the planning stages. 4 - Other Business Downtown Manager Courtney Orr was introduced. 5 - Adjourn The meeting adjourned at 2:07 p.m. Chair Community Attest: City Clerk Community Redevelopment Agency 2008-03-03 4 Item # 1 Meeting Date: 3/17/2008 Community Redevelopment Agency Agenda Council Chambers - City Hall SUBJECT / RECOMMENDATION: Pursuant to CRA RFP 10-08, and the recommendation of the Selection Committee, award a contract for Retail Recruitment and Marketing Services for Downtown Clearwater to ERA/Downtown Works of Washington, D.C. in the amount of $ 145,000, plus out-of- pocket expenses not to exceed $20,000, and authorize the Executive Director to execute the Contract for Services on behalf of the CRA. SUMMARY: On January 14,2008, the Clearwater Community Redevelopment Agency (CRA) approved the release of a Request for Proposals (RFP) for retail recruitment and marketing services for the Cleveland Street District. The objective of these services is to support and enhance the existing retail base within the Cleveland Street District. Specifically, the RFP delineates the following services to be provided by the consultant: 1) Develop a Strategy for Retail Recruitment and Repopulation of the retail spaces in the Cleveland Street District, consistent with the "Cafe Society" vision and market characteristics. 2) Develop a marketing and leasing plan to implement the retail strategy. 3) Assist and counsel the CRA with retail contacts and negotiations with property owners/retail prospects. These services will support the overall strategy for downtown revitalization, which is: 1) implement infrastructure improvements; 2) attract residential development; and 3) create a "destination". The RFP marks the next step in the CRA's program for downtown revitalization which to-date has included the Downtown Market Study; Fa<.;ade Design Analysis creating the "Cafe Society"; revised Fa<.;ade Improvement Program and Sidewalk Furniture Grant Program; and, Downtown Branding. Proposals were sought from qualified firms with relevant expertise within downtown/urban revitalization districts. Approximately 20 such firms were mailed the RFP, as well as the RFP being posted on the International Downtown Association's Web site on 1/23/08 and the City of Clearwater's Web site on 1/15/08. In addition, the RFP was advertised in the St. Petersburg Times on January 21,2008. By the February 13,2008 RFP deadline, seven firms responded: Thomas Point Associates, Inc. (Annapolis, Maryland), Urban Marketing Collaborative (Toronto, Ontario), ERA/Downtown Works (Washington, D.C.), Strategonomic Global Network (Frederick, MD); H. Blount Hunter (Norfolk, VA); Buxton Community ID (Fort Worth, TX); and Talbot (Toronto, Ontario). On February 22, 2008, a Selection Committee met to assess the written proposals to select the firms that most closely met the objectives of the CRA as delineated in the RFP. The selection criteria used were the following: 1) Understanding of issues and approach sought in the Cleveland Street engagement; 2) Directly related qualifications and experience in the type ofretail services delineated in the RFP, and particularly, in urban redevelopment environments. The Selection Committee consisted of: Rod Irwin, CRA Executive Director Geraldine Campos Lopez, Director, Economic Development and Housing Courtney Orr, Downtown Manager Carol Warren, Director, Commercial Sales, Colliers Arnold Cover Memo The Selection Committee short-listed three proposals, which best met the selection criteria, based upon response to th9~f1Il'# 2 The selected firms were invited for oral presentations on March 6, 2008, to further demonstrate their qualifications to the Selection Committee. The firms invited included: Economics Research AssociatesfUrbanWorks, Washington, D. C. Thomas Point Associates, Inc., Annapolis, Md. Urban Marketing Collaborative, Toronto, Ontario, Canada Subsequent to the interviews, and after further due diligence and clarification, the Selection Committee Recommended that the CRA award a contract to ERAfUrban Works, subject to successful negotiation of a contract for services consistent with their proposal. The major determinants of the decision were: 1) Strong, current and successful experience with the type of downtown retail strategy and recruitment effort envisioned for the Cleveland Street District; 2) A practical, "hands on" approach to the engagement that minimizes duplication of work already completed by the CRA; 3) A strong emphasis on developing in-house capacity for the client to facilitate continuation of a successful recruitment effort after the conclusion of the consultant engagement. Staff recommends the CRA approve the recommendation of the Selection Committee. The current CRA budget includes $100,000 for retail attraction and recruitment in project code 0388-94852 "Retail Attraction/Assistance". The balance of the contract will be provided by a budget amendment transferring $65,000 from project 0388- 94714 "Downtown Redevelopment" to fund the balance of the contract. Type: Current Year Budget?: Other No Budget Adjustment: Yes Budget Adjustment Comments: The current CRA budget includes $100,000 for retail attraction and recruitment in project code 0388-94851 "Retail Attraction/Assistance". The balance of the contract will be provided by a budget amendment transferring $65,000 from project code 0388-94714 "Downtown Redevelopment" to fund the balance of the contract. Current Year Cost: Not to Exceed: For Fiscal Year: 165,000 $165,000 2007 to 2009 Annual Operating Cost: Total Cost: $165,000 Appropration Code 0388-94852 Amount $165,000 Appropriation Comment Review Approval: 1) Office of Management and Budget 2) Legal 3) Clerk 4) City Manager 5) Clerk 6) City Manager 7) Clerk Cover Memo Item # 2 From: 95624257 Page: 1/3 Date 3/10/20089:46:05 AM Attachment number 1 Page 1 of 3 Downtown St. Louis THE RETAIL REVITALIZATION PROJECT 2003 - 2006 BACKGROUND Downtown St. Louis is enjoying a remarkable renaissance. In just six years, over $3.5 billion dollars have been invested within the 2.9 square miles of downtown. Like cities throughout the country, a major focus for 81. Louis' downtown revitalization was a commitment to dramatically expand residential population. In 1999, adoption of the Downtown Development Action Plan established a blueprint for revival. In turn, passage of the Missouri State Historic Tax Credit provided a mechanism for funding the restoration and conversion of dozens of historic buildings located within downtown St. Louis By 2002, sufficient progress was evident in the initial residential development efforts that downtown stakeholders were reaqy to foCus attention on bringing street level retail back to downtown. Virtually all of the new and planned residential properties were setting aside large, first floor, converted warehouse or manufacturing spaces for retail. These spaces needed to be filled to create a more active and attractive environment and to provide needed services and amenities for new and potential residents. At the time, there was very little quality street level retail remaining within downtown. Much of downtown's potential retail space was vacant and what was occupied was scattered, badly outdated and poorly merchandised. There were a reasonable number of quality restaurants and cafes, but these too were somewhat scattered and offered little that was new or exciting. PROJECT DESCRIPTION In mid-Z002, the Downtown S1. Louis Partnership (DSLP) and Downtown St. Louis Community Improvement District (CID), working in conjunction with the City of 81. Louis (the City), the St. Louis Development Corporation (SLDC) and Downtown Now, with additional support from the Regional Commerce and Growth Association and 8t. Louis 2004, hired Downtown Works, an urban retail specialist. The charge was to develop a retail strategy for bringing quality retail, restaurants and services to the downtown area. The consultant was retained for twelve months with the responsibility of evaluating the market, developing a leasing and implementation strategy and supporting initial execution of those strategies. The consultant's evaluation and plan were developed over a six month period and presented to the client/stakeholders in November 2002 and to downtown developers, brokers, retailers and media in December 2002. Key elements of the retail strategy were to: . Focus on local and regional prospects · Concentrate leasing in small, defined geographic areas where/as new investment occurs. "... . ~.:rafg0t'f6&tauFantsand-eluster-h+ghly-eemf),atible-fetail-tlSes'fflem€-f.umi-sfli.ngs-F€lat-€aj, that could quickly establish a destination/district with a relatively small number of tenants . Provide direct leasing support to developers by funding a leasing associate who would actively prospect for potential tenants . Develop meaningful financial assistance/incentives that would attract prospective merchants and accelerate deals. This has been the basis for downtown St. Louis retail leasing from January 2003 through today. Item # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 2/3 Date 3/10/20089:46:06 AM Attachment number 1 Page 2 of 3 DSLP Action Steps . Consistently communicate retail strategy to developers, brokers and prospective tenants . Work with developers to ensure that they properly budget first floor space with flexibility in rents and tenant improvement budgets that support risk taking by "pioneer" retailers . Fund the salary of dedicated staff for retail prospecting and coordination of leasing efforts with all stakeholders . Support marketing efforts with appropriate market data / marketing materials as needed . In partnership with SLDC and the City, develop and administer a Forgivable Loan Program, funded through Block Grants, that specifically supports the targeted districts and uses identified by the Retail Strategy The Downtown St. Louis Forgivable Loan Program provides principal and interest-free loans (up to $50,000 in the first round of funding and up to $25,000 in the second round offunding) that are forgiven over a five year period. A committee made up of staff from the DSLP, SLDC, the City and Downtown Now review applications for strategic criteria (location, use, district needs and impact on other leasing) and recommend for specific funding amounts. SLDC staff and Boards review application for financial and legal criteria and approve funding. Results . Over 50 new retail stores, restaurants and services have opened (or are committed) since May 2003. This represents over 182,000 square feet of new retail businesses. The Retail Revitalization Project was directly involved in recruiting or funding 19 deals representing 66,000 sq. ft. This includes a grocery store, two restaurants, nine home furnishings related stores and seven fashion stores. Many, if not most of the other lease deals were impacted by the success of the program. . 7 businesses were funded in Round One of Forgivable Loan funding ($250,000). This success led to a second round of funding ($150,000) where an additional 10 businesses have been funded so far. As of 6/1/06, 14 of the 15 funded retailers who have already opened remain in business and $60,000 remains available for future loans which will support an estimated three to six additional deals. . By consistently working and communicating with developers, we have successfully brought them prospects, convinced them to turn down deals that were not consistent with the retail strategy and helped to finance deals that they recruited on their own. Impact . Street level activity has increased dramatically, improving the vitality and viability of non-retail development. Restaurants, in particular, are attracting suburban customers, creating a buzz that is generating positive media and greater awareness about downtown's overall revival. . _,..__ .,,~ new generation of. entr~reneurs is establishing Q!l_~o(:a-kind Qusinesses downt~YY.!l~_ . The Forgivable Loan Program created an effective, new model for public/private partnership that has enhanced and expanded the relationship between the City and DSLP in other areas including office retention and recruitment · Though funding amounts were relatively small, the Forgivable Loan Program had a substantial impact on attracting some tenants, helping to finance first time entrepreneurs and guiding appropriate merchants to the "right" locations within downtown Item # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 3/3 Date 3/10/20089:46:06 AM Attachment number 1 Page 3 of 3 . The quantity and quality of retail deals has been sufficient to address short term needs for services and amenities and generate positive image until the market matures and is able to attract and support more established regional and national retail tenants. . The results to date have also been cited by current and prospective office tenants as an important amenity and a factor in retention and recruitment ParticipantslFundine: . The Downtown St. Louis Partnership Provided partial funding for consultant, serves on Forgivable Loan review paneL . The Downtown St. Louis Community Improvement District Provided partial funding for consultant, serves on Forgivable Loan review panel, provide and fund dedicated staff for retail recruitment, program coordination and general administration. . The City of St. Louis! St. Louis Development Corporation Provided partial funding for consultant, serve on Forgivable Loan review panel, fund 100% of the Forgivable Loans through Block Grants, administer Forgivable Loans through staff and Boards. . Downtown Now Provided partial funding for consultant, serves on Forgivable Loan review paneL · Regional Commerce and Growth Association Provided partial funding for consultant. . St. Louis 2004 Provided partial funding for consultant. . Downtown Works Provided consulting services including market review, leasing strategy and implantation plan The total cost for the four year program is $ 746,000. This includes consultant fees ($93,000), dedicated staff ($253,000) and forgivable loan fund ($400,000). The City/ SLDC also provided staff for administration of the Forgivable Loan at no cost to the program. Replicabilitv and Conclusion There were numerous challenges to the eventual success of this program. When we began, we were starting virtually from scratch. Very few of downtown's planned/proposed developments had opened. There was little or no co-tenancy to draw on. Considerable construction in our targeted areas was physically and visually disruptive. As a result, it took over a year of prospecting to get the first deal done. There was (and is) a constant need to "manage" retail inventory that is not in our control and to urge developers to pursue leasing that is consistent with the leasing strategy. Nevertheless, this program can be easily replicated and has been a model in other downtowns. The cost, through not small, is relatively low for the return received. The city, despite considerable financial hardship, was able to find an existing source to fund the loan program. Other downtown stakeholders were willing to share the cost of consultant's fees. DSLP and the "'CIDWere'al'51elofe=prr6filize'exiStliig15Uoge"fsto-ffiiidsTaIraIlocaliori~ .-. ...... '" '-- -", ,.-. - ---'---'.--- ,-. The key to success is a focused, straight forward retail strategy with reasonable expectations for results, strong public/private partnership and a commitment to maintain dedicated personnel and sufficient financial resources. For us, the innovative component was the public/private partnership that funded and administered the program, the leveraging of a relatively small pool of dollars for strong results, and the cooperative spirit ofthe developers in supporting the overall strategy. Item # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 1/51 Date 3/10/2008 10:21 :34 AM ,,'"-~, ERA downtown' "works Proposal for Retail Recruitment and Marketing Services Submitted to Clearwater Community Redevelopment Agency Clearwater. Florida Submitted by Economics Research Associates February 13, 2008 ERA Proposal No. 49487 t" 1101 Connecticut Avenue, NW Suite 750 Washington. DC 20036 202.496.9870 FAX 202.496.9877 www.econr'l's.cont, Los Angeles San Francisco San Diego IIem ff 2 Chicago Washington DC london New York This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW,gfi,com From: 95624257 Page: 2/51 Date 3/10/2008 10:21 :35 AM ERA downtown works February 12, 2008 Mr. George McKibben Finance Department, City of Clearwater PO Box 4748 Clearwater, FL 33758-4748 RE: Request for Proposal for Retail Recruitment and Marketing Services ERA No: 49487 Dear Mr. McKibben ERAIDowntown Works is pleased to have the opportunity to respond to the City of Clearwater's Request for Proposals for Retail Recruitment and Marketing Services for Downtown Clearwater. The special practice group of Downtown Works has created many downtown merchandiSE! mix plans and implementation strategies that have proven successful not only in small towns, but.also in large cities. Our approach to retail revitalization is very hands on and results oriented. Since our approach is very unique, we encourage prospective clients to talk with our references to learn how ERAIDowntown Works' approach has worked for them. The trend for retailers to return to downtown, one that we applaud and encourage, is occurring nationally, and it is a trend that we believe is here to stay. Consumers are weary of the same choices of retailers in their malls close to home and far away. They are looking for a unique mix of stores and experiences. That is what we create and facilitate. If you have any questions or need clarification, please do not hesitate to contact me. Sincerely yours Sincerely ~~Ol~ Midge McCauley Principal i' 1101 Connecticut Avenue. NW Suite 750 Washington. DC 20036 202.496.9870 FAX 202.496.9871 www.econres.com Item # 2 Los Angeles San Francisco San Diego Chicago Washington DC New York London This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 3/51 Date 3/10/2008 10:21 :35 AM ERA I downtown I works ; Approach or Scope of Services Downtown Works (ERAIDW), a special practice group of Economics Research Associates understands that Clearwater Community Redevelopment Agency (CRA) is interested in maintaining and improving the retail environment in downtown Clearwater, specifically the Cleveland Street District. This can be done by retaining downtown retailers, enhancing existing retail operations, and recruiting new retailers. Downtown Clearwater has many elements in-place for a successful downtown. These include private investment in downtown developments and growing residential and tourism markets. Retaining existing desirable retailers is important to maintaining downtown's identity, momentum, and long term livelihood. In addition, expanding the retail offerings in downtown to serve underserved markets (i.e. new residents) and to attract new customers is integral for the continued growth and success of downtown Clearwater. Downtowns are complex and dynamic places that are differentiated from other areas by offering unique mixes of retail, entertainment, living, and working opportunities. With over 30 years of experience. ERAjDW has refjned a hands-on and results-oriented approach to urban retail recruitment that builds upon and embellishes this inherent quality in downtowns. ERAIDW identifies two key elements that are necessary for successful retail recruitment [and retention] and growth in a dynamic downtown environment. These two primary objectives are described below. · Retail Strategy - First, a well-researched Retail Strategy must be developed that includes Merchandise Mix Plans for targeted areas. ERAIDW will develop a Retail Strategy to inform and guide retail recruitment, retention, and redesign efforts in downtown Clearwater. Merchandise Mix Plans will outline the proper mix and location of uses that will ultimately contribute to a healthy and vibrant retail cluster or district. · Implementation Program - Second. a realistic and enduring Implementation Program that makes the Retail Strategy a reality is imperative. It will involve the support of downtown stakeholders. ERAIDW will develop and commence an Implementation Program for the Retail Strategy. We will work closely with the CRA to identify and train a Retail Coordinator. The Coordinator will, with guidance from ERAIDW, continue to implement the Retail Strategy recommendations over the long term. ERA/DW proposes to act as a consultant to the Clearwater CRA to develop a Retail Strategy and Implementation Program that best suits downtown Clearwater and the Cleveland Street District. t 1101 Connecticut Avenue, NW Suite 750 Washington, DC 20036 202.496.9870 FAX 202.496.9877 www.econres.com Los Angeles San Francisco San Diego Cnicago Washington DC New York London Item # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://VIIVIIW.gfi.com From: 95624257 Page: 4/51 Date 3/10/2008 10:21 :35 AM ERA I downtown . , works Scope of Services , ERAIDW will be primarily responsible for the development of a Retail Strategy that includes a market profile and a Merchandise Mix Plan as well as an Implementation Program that addresses retail recruitment and marketing. The following Scope of Services further defines the tasks associated with both the Retail Strategy and Implementation Program. Retail Strategy Developing a strong retail strategy is the first step towards ensuring successful downtown retail over time. ERAjDW will thoroughly research the market as it relates to downtown retail, specifically Cleveland Street District, and develop appropriate Merchandise Mix Plans for the primary retail streets in downtown. After a review of downtown, ERAIDW will determine which streets are primary retail streets (those with greatest potential) and confirm findings with the CRA. Downtown Overview and Market Profile Our team will collect and analyze all pertinent data necessary to understand the current and potential market conditions surrounding downtown Clearwater. We will define target market areas (i.e. where ClealWater retailers should expect to draw customers) and target customer groups (i.e. residents, employees, visitors. etc). ERAIDW will assess and provide key demographic information including: household income. consumer spending patterns, population characteristics. psychographies (lifestyle patterns), etc. ERA/OW will review all pertinent studies and documents that may inform the identification of market areas. The Market Profile and Downtown Overview will: · Determine the primary and secondary trade areas and define various customer markets to be targeted. · Review the area's history, existing and future downtown plans, previous studies and retail strategy work, available retail data, improvement initiatives, zoning and design guidelines. and relative significant local, regional, and national trends. · Research information relevant to creating a Merchandise Mix Plan and Implementation Program. ERAIDW will research demographic and psychographic data for the determined primary and secondary trade areas, such as spending patterns, lifestyle preferences, income levels. etc. ERAIDW will determine if data in the 2005 Downtown Market Study needs to be updated or supplemented for this project. ... ..~' .=,-~"-"--=,,,.-=,,,"_.,,,,,,,,.,-_.,, ,..,,=-"-."'""-.~ -- "Assess the current commercial, CIV'Cs recreational, and cu~turat uses in the downtown; if necessary, comment on appropriateness and balance of the mix. · Condu(!t stakeholder interviews with merchants, property owners, real estate representatives, civic leaders, developers and others that the City deems pertinent. The stakeholder interviews are a key component to understand "on-the-ground" insights and perspectives af the local economy and retail development trends. The stakeholder outreach Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 5/51 Date 3/10/2008 10:21 :36 AM R A downto\vn works component is crucial in engaging certain stakeholders for future buy-in into an implementation strategy. · Identify issues that make it difficult for retailers to locate and thrive in downtown Clearwater. Strategic Assessment ERAIDW will conduct site visits to assess (first-hand) and thoroughly understand the existing retail conditions in downtown Clearwater and the Cleveland Street District. ERAIDW will perform an in- depth assessment of primary retail streets. ERAIDW will also evaluate existing and potential competitive retail centers. This helps to inform a Merchandise Mix Plan that is unique and differentiated from surrounding retail centers. Tasks include: · Assess the existing retail in the Cleveland Street District. Identify key vacancies or infill locations. · Perform a detailed Qualitative Analysis of retail uses that are visible and accessible from the street on the primary retail streets. The Qualitative Analysis will include: Ranking of fa~ade, maintenance, display, signage, and interior merchandising Evaluation notes Documentation of use and address Photo inventory · Inventory and prioritize key opportunity sites on primary retail streets based on available leasable space and a site's potential to positively or negatively influence downtown retail. · Evaluate competitive areas, which may contribute to a leakage of retail sales from other downtown areas. This includes existing and proposed downtown projects or retail centers. Merchandise Mix Plan Downtown Clearwater should ultimately seek to differentiate Cleveland Street District, its downtown retail district, from retail clusters/centers surrounding the downtown. ERAIDW believes this can be achieved in Clearwater through three distinguishing features: 1} Interesting and appealing physical environrnents; 2) Convenience for residents. downtown employees, and visitors; 3) Quality and appeal of the selection of stores. The latter, the Merchandise Mix, will ultimately define the identity of downtown's retail districts. It will also continue to shape the identity of downtown Clearwater as a whole. ERAjDW is well-qualified to formulate the most market-appropriate and appealing Merchandise Mix Plans for the primary retail streets and encompassing districts. The Merchandise . _M.~ Plans.d~_~.~~.~,.~.,~.~_.~~~..~~~~~,~..~,"",~,~,~"",~~ .~..~ ~._ ~,~~,_"~_~"_._.,_.,"~.~__~._'~~._~_.~~.~~"._ _~_.'_.._..'~_~.~. _~.". ._. · Identify retail categories that are: 1} underserved and should be filled or 2) successful and shouldfe expanded. ERAIDW will consider how retail categories will serve specific market sectors, such as employees, residents, and visitors. · Outline retail categories that should not be pursued. · Document the critical existing retailers that should be retained. Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Paqe 3 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 6/51 Date 3/10/2008 10:21 :36 AM ERA J downtown j I works · Recommend appropriate streets, blocks, or comers on the primary retail streets where specific retail categories should be located. · Identify sites in downtown that standout as ideal for a specific use based on their location and configuration (if applicable). · Comment on general space and configuration needs for types of retail recommended in the Merchandise Mix Plan. (' Economics Research Associates. Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 4 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 7/51 Date 3/10/2008 10:21 :36 AM ERA downtown w'orks Implementation Program , Retail Strategies and Merchandise Mix Plans are excellent and necessary tools for downtown retail recruitment; however implementation is the key to success. ERAIDW believes in not only outlining a clear Implementation Program, but also commencing and participating in the implementation of our Retail Strategies. ERA/DW's Implementation Programs delineate when and how the recruitment objectives will be achieved. We will prioritize recommendations and outline step-by-step processes where necessary. ERAIDW will focus on the following tasks as part of the Implementation Program. · Outline immediate (short-term) and long term objectives for CRA with regards to key opportunity sites on the primary retail streets in the Cleveland Street District. · Meet with key property owners to present the new vision for downtown retail and discuss their properties' opportunities. · Prepare general recommendations for policy actions, financial assistance, incentives, and zoning changes that are critical for retail development in downtown. · Assist in hiring and training a Retail Coordinator . Collaborate with the Clearwater CRA and their graphic designers to create a marketing piece geared specifically towards prospective downtown retailers. ~ Retail Coordinator A Retail Coordinator is the most valuable and effective tool for retail retention and recruitment efforts. It is anticipated that eRA, by itself or in concert with other entities involved in downtown development. will hire a Retail Coordinator. This individual will continue to implement the retail strategy once the proposed contract with ERAIDW has expired. A Retail Coordinator is not a broker, but serves as a matchmaker between brokers/landlords and retail prospects. Typically, retailers who are pioneers in emerging (jowntown retail scenes are independent and not connected into the brokerage networks. If retail in downtown Clearwater is to thrive, a Coordinator must be in place to ensure the Merchandise Mix Plan is fuetifled and retail standards are maintained overtime. Downtown retail is constantly evolving as trends change and leases turnover. Furthermore. retail recruitment and deal making is a time consuming p,-ocess. ERAIDW will be actively involved in the identification and hiring of the Retail Coordinator. We will also train the Retail Coordinator to successfully communicate with and retain desirable existing retailers. as well as prospect for tenants on behalf of the CRA. Specifically, we will provide the fallowing advice and assistance related! to recruiting, hiring, and training a Retail Coordinator:. __~.~,,_~~~''',._''=~_~__~.~_~, Create job description that states: - rvfajor responsibilities of the position; - Oualifications, skills, and experience required to successfully handle the job; - Market-competitive salary range and work space requirements; Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 5 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 8/51 Date 3/10/2008 10:21 :36 AM ERA I downtown I works , - Where to advertise the position and networking sources that could provide leads. · Participate in the final interviews and assist in selecting the best candidate, · Train the new hire so that he/she can successfully recruit appropriate tenants. · Prospect with the Retail Coordinator for new potential retailers. · Utilize existing networks in the retail industry to make direct contact with selected retailers when necessary. · Assist the Retail Coordinator with any challenging meetings with property owners and/or their real estate representative, prospective retailers, and current merchants throughout the duration of the contract and upon request thereafter. Retail Action Items ERA/DW will provide recommendations regarding specific retail action items. ERAIDW will focus on the following tasks as part of the Implementation Program. · Outline short term and long term. objectives for the CRA with regards to key opportunity sites and general recruitment efforts, · Prepare general recommendations for policy actions, financial assistance, incentives, and zoning changes, if applicable, that are critical for retail development in downtown and specifically address identified threats. · Identify necessary changes in retail space that must occur for the space to attract retailers. · As recruitment proceeds generate a list of specific retailers that are potential prospects for the Cleveland Street District_ ERA will develop the database or recommend alternate software for tracking retail leads, Marketing/Recruitment Package ERAIDW will work closely with the eRA and graphic designers to create a marketing piece geared towards prospective downtown retailers. ERA/OW will not produce the marketing piece, but based j on in-depth knowledge and background of the retail industry, we will provide design and content direction. The end goal is to create a marketing piece that will attract potential retailers to downtown Clearwater. landlord I Community Relations Maintaining and enhancing the retail environment is not an easy task, and it requires constant monitoring and guidance. Unlike shopping centers and privately held properties, a single owner does not control the ~erchandise Mix. In downtowns. landlords, real estate representatives. and businesses must buy-in to the Merchandise Mix Plan and understand the value of adhering to it. This process takes time and patience. Initially, there is often resistance. ERAIDW is well-equipped to sell and promote the merChandising vision and work with landlords or their real estate representatives on a one-to-one basis. ERAIOW will: Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 6 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 9/51 Date 3/10/2008 10:21 :37 AM ERA downtown I works · Meet with key property owners to present the new vision for downtown retail and discuss their properties' opportunities. If applicable, promote a specific prospective retailer. , · Present findings and plans to community and/or stakeholder groups. · Provide list of suggestions for the contents of a lease. designed for use by landlords. ERAIDW will supply samples of clauses that illustrate what landlords should incorporate in their leases to foster and retain successful businesses, including recommended days and hours of operation, reporting of sales, and commitment to maintenance standards. (' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 7 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 10/51 Date: 3/10/2008 10:21 :37 AM I ERA downtown works Summary of Deliverables ERAjDW will provide the following deliverables. Most of the deliverables will be included in an Executive Summary document. We also anticipate a progress meeting or discussion with the City of Clearwater every two months. Executive Summary: Retail Analysis and Strategy The Retail Analysis and Strategy deliverable will be presented in a PowerPoint format with explanatory text. Downtown Overview .. Strategic Assessment .. Merchandise Mix Plan Implementation Program In order to fully accomplish the deliverables below and ensure implementation occurs, ERAIDW staff will be in Clearwater at least once a month for a year. .. Retail Actions .. Retail Coordinator Training .. Marketing I Recruitment Package .. Landlord f Community Relations Presentations ERA/OW will be in Clearwater frequently to update CRA staff on progress. In the first six months, ERAIDW will present an update of findings and then the final Retail Strategy. ERAIDW will factor in a total of four presentations over the course of a year. .. Month 3 - Update Presentation (Downtown Overview, Strategic Assessment) .. Month 6 - Finalized Retail Strategy and Implementation Program (including Retail Demand Analysis, Merchandise Mix Plan) .. Month 6-12 - One or two additional presentations of findings and strategy to other stakeholder groups I' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 8 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 11/51 Date: 3/10/2008 10:21 :37 AM E RAldowntown works Price or Cost Proposal Schedule Duration of the contracted services would be for one year following the notice to proceed. The bulk of the work will be completed during months one through six. Months six through twelve will focus on actual implementation, including training the Retail Coordinator and monitoring his/her retention and recruitment process, meeting with key property owners, brokers, and prospective retailers when necessary, and any additional follow-up services. A kick-off meeting attended by ERAIDW for representatives of the City of Clearwater and other designated organizations would start the process. Time Progress/Deliverables Months 1-3 . Downtown Overview . Data collection . Stakeholder Interviews . Strategic Assessment Months 4-6 . Executive Summary PowerPoint . Retail Demand Analysis . Retail Strategy . Implementation Program . Identification/hire of Retail Coordinator Months 7-12 . Training of Retail Coordinator . Retail Recruitment and marketing materials . Meetings with key property owners . Prospecting for potential retailers . Negotiation assistance (tenants, brokers, property owners) . General support and participation of Implementation process f Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 9 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 12/51 Date: 3/10/2008 10:21 :38 AM ERA f downtown Iworks Budget The total cost for the project is $150,000, plus expenses. A majority of the research and production will occur during the first six months. A monthly fee of $15,000 would be required for the first six months of the contract, with a monthly fee of $10,000 for the latter six months. Table 1: ERA Hourly Rates Position Principal Senior Associate Associate Senior Analyst Ana Iyst Hourly Rate $ 294 $ 227 $ 129 $ 108 $ 93 Table 2: Project Cost by Task Task Retail Strategy and Analysis Downtown Overview Strategic Assessment Retail Demand Analysis Merchandise Mix Plan Fee $ 95,000 $ 15,000 $ 30,000 $ 25,000 $ 25,000 $ 55,000 $ 15,000 $ 25.000 $ 5.000 $ 10,000 $ 150,000 Implementation Program Strategy Development (Retail Actions) Retail Coordinator - Hiring & Training Marketing Recruitment Package landlord Community Relations TOTAL Expenses will also be billed on a monthly basis and are expected not to exceed a total of $20,000. Expenses would include: travel (car rental, airfare, taxi), paper costs (printing, copying), and any other graphics/presentation/report-related expenses. All expenses are billed at cost. When possible. travel -.--...."-.---......-wittbe arrarrgett-rrnmNi'ffiize melengtn ofStay to minimize trip costs. In the event additional meetings. other than those scheduled during regular monthly visits. are requested, then the City of Clearwater will be responsible for paying any additional travel related costs. CHent and ERAIDW will agree on additional costs before incurred. Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 1 0 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 13/51 Date: 3/10/2008 10:21 :38 AM ERA I downtown works For The City of Clearwater eRA PROPOSED BY: l~:t- Yll)l..l~ DATE: ACCEPTED BY: DATE: Please also sign the Standard Contractual Agreement enclosed at the end of the document t Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 11 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 14/51 Date: 3/10/2008 10:21 :38 AM ERA I downtown r 'works Firm Overview Economics Research Associates (ERA) was founded in Los Angeles in 1958. Headquarters are in Los Angeles, California, with offices in Chicago, San Francisco, San Diego, New York. London, and Washington, D,C. There are about 130 members of the staff; professional consultant tenure with the firm averages 11 years. In domestic and international projects, ERA has completed nearly 17,000 research and consulting assignments for both public and private clients. Fusing talents of a multl- disciplined staff, the firm's experience has concentrated in five interrelated fields: (1) recreation, tourism, and leisure tIme; (2) real estate and land use; (3) economic development and planning; (4) transportation systems; and (5) management and marketing services. Economic Research Associates I Downtown Works Downtown Works, a special practice group of Economic Research Associates (ERA), specializes in retail revitalization and implementation strategies for downtown districts, as well as merchandise mix plans and recruitment strategies for urban development projects. Whether a major metropolis or the business center of a small town, Dawntown Works has the depth of experience to handle all aspects of downtown retail revitalization. Careful and creative revitalization strategies could mean the I difference between urban decay and urban rebirth. All of Downtown Works' consulting projects are results-oriented. Not only do we provide recommendations regarding retail recruitment, retention, and merchandising, but we also work with the client to implement these recommendations and achieve tangible results. Downtown Works, originally based in Philadelphia, PA, joined forces with ERA, an international consulting firm, in January of 2005 to form a downtown special practice group. The Downtown Works and ERA union created a team of experts positioned to provide a comprehensive array of downtown services, from market analysis and real estate development, to feasibility studies and fiscal. impact analyses, to merchandising mix plans and retaIl recruitment strategies. By focusing on implementation and merchandising recommendations at the local level, Downtown Works is a critical tool for Business Improvement Districts (BIDs), city governments, civic and downtown management organizations, developers, and property owners, seeking to revitalize their downtown districts or develop property. Whether beginning a new plan or redefining existing programs, Downtown Works' services can be packaged to meet the specific needs of local markets and clients. ERA's Downtown Works practice brings real world experiences to consulting assignments to generate real results. i' Economics Research Associates RetaiJ Recruitment and Marketing Services Project No. 49487 Item # 2 Page 1 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 15/51 Date: 3/10/2008 10:21 :38 AM ERA downtown works Staffing Margaret "Midge" McCauley will be the Principal-In-Charge and will lead all components of the development and implementation of the merchandise, retail recruitment and retention plans and the execution of all other services. Michelle Bowen, Associate, will assist in analysis and development of strategies and manage day to day project tasks. Ms. McCauley will direct the training of the Retail Coordinator, Ms. Bowen. and other ERAIDW staff will provide Shlpport. Other ERAIDW team members may assist when and where appropriate; their resumes are included. The Merchandise Mix Plan will require significant on-site evaluation and the Implementation Program will require much personal interaction with key stakeholders. Members of the ERAIDW team, therefore, will travel to Clearwater on a regular basis; travel will be more frequent during the first six months when a majority of the work will be completed. Project and company-wide organization is depicted by the chans below. ERA Principal-In-Charge Midge McCauley "d~~QIY Pri!1Cj~~l TQm MQ!fp,IJW>: Project Manager: Associate Michelle Bowen Research Analyst Research Analyst ~ --- Practice Groups CFO coo Entertain- ment r Resort .,- -lReal Estate I Staff Staff Staff Staff Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 ~~~~ f 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 16/51 Date: 3/10/2008 10:21 :39 AM ERA I downtown , works Resumes of Key Personnel Margaret M. McCauley, Principal As a Principal at ERA and Director of the firm's Downtown Works practice group, specializing in urban initiatives and downtown retail environments, Ms. McCauley brings her clients over twenty- five years of experience as a specialist in retail consulting for shopping center and mixed use developers, as well as urban and suburban retail districts. Ms. McCauley has achieved wide recognition among leading national, regional and local retailers for her comprehensive retail consulting projects. As an expert on repositioning, leasing and merchandising retail centers and districts, she enjoys a national reputation among developers, owners and municipalities for successful concept developments, leasing strategies and creative tenant mixes. Skilled in all phases of consulting for large urban markets, smaller business- improvement districts and private developers, her broad experience extends to strategies and concepts in close collaboration with developers. civic groups, urban planners and design professionals. Ms. McCauley began her career with The Rouse Company (TRC) in Columbia, Maryland as a retail leasing specialist. She was charged with finding the unique stores that would set TRC shopping centers apart from other retail developments. In 1988, Ms. McCauley and Elizabeth Rodgers co- founded Rodgers & McCauley. Inc., a consulting firm focused on retail development and leasing, with an emphasis on urban initiatives. They were retail consultants to four Manhattan business improvement districts: Times Square, Bryant Park, The Grand Central Partnership, and 34th Street. In 2003, Ms. McCauley completed a Retail Merchandising and Leasing Strategy for the city of St. Louis where subsequent development has been met with great success - more than 78 new restaurants and retailers opened since the completion of the strategy. Upon completion of a Retail Merchandise Mix Plan for Haddonfield, NJ. the borough was named Best Revived Shopping District in the August 2004 issue of Philadelphia Magazine. Over the past three years, Ms. McCauley has worked for the Downtown Austin Alliance to create retail strategies for both Congress Avenue and Sixth Street, which are the two major spines and most famous streets in downtown. New retailers consistent WIth the strategy have already moved to both Congress Avenue and 6th Street. A major new anchor for 6th Street, the Alamo Draft House has opened with two new movie screens in November of 2007. In the spring of 2006, Ms. McCauley completed a Retail Market Analysis and Tenanting Strategy for a mixed use project containing 120,000 square feet of retail near the Square in downtown Santa Fe, NM. Included in this report were implementation recommendations that will soon be underway. Since this time Ms. McCauley has been busy working on Retail Merchandising Mix Plans and Implementation Strategies for: Minneapolis, MN; Nashville and Memphis. TN; Columbia. SC; Carlisle, PA; Ardmore. Bryn Mawr, Bala Avenue,and Merion-Cynwyd in Montgomery County, PA; and San Diego, CA. Other private clients have included Pyramid Companies in St. Louis, MO and Vail Resorts in Vail. CO. Time is proving that these merchandise mix plans and implementation strategies are successful and sustainable. Ms. McCauley sits on the Board of Directors of the International Downtown Association (IDA), the Delaware Valley Smart Growth Alliance (DVSGA), and the Woodrow Wilson House, Washington DC's only presidenti~ museum. In addition, she serves on the Advisory Group to the American Institute of Architects (AlA) Retail and Entertainment Knowledge Community. Other active professional memberships include the International Council of Shopping Centers (ICSC) and the Urban Land Institute (ULI). where she participated as one of a select group of experts brought together to develop the "Ten Principles for Reb4ilding Neighborhood Retail". Ms. McCauley is a graduate of the Pennsylvania State University, and holds a Masters Degree from Temple University. Economics Research Associates Retail Recruitment and Marketing SelVices Project No. 49487 Item # 2 Page 14 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 17/51 Date: 3/10/2008 10:21 :39 AM ERA downtown ! works Tom Moriarity, Vice President & Principal Since joining ERA as a Principal in 1993, Tom Moriarity's practice has focused on urban development and mixed-use, retail development economics and planning and specialty practice ilreas such as airport and transportation centers, museums, historic preservation development policy and corporate visitor centers. Mr. Moriarity has over thirty years experience in downtown and commercial district revitalization, and as a Vice President in the Washington DC office, he directs ERA's retail practice area. He has completed projects in 42 states and fifteen countries from South and Central America, to Europe and Asia. His public sector clients have included cities and states, Business Improvement Districts (BID's). regional transportation authorities (more than 40 projects for the Port Authority of New York & New Jersey), urban counties and public university systems. Private sector clients have included: Hines, Goldman Sachs, Urban Properties Group, General Motors, Morgan Stanley, Samsung Corporation, Princeton University, Newland Communities and the Banco Hipotecario de Uruguay. He has managed and directed studies for: redevelopment of the World Trade Center in New York City {1993 and 2002-2006); a new land-use policy for the City of Miami; planning and privatization of the Pittsburgh International Airport concessions program; corporate visitor centers for Ben & Jerry's lee Cream; Miller Brewing Company; Beringer Wineries and the Coca Cola Company; transit station development planning for the Miami Intermodal Center and Austin's Capital Metro; and the Florida East Coast Railroad Corridor. He also managed redevelopment of all concessions at the Atlanta Hartsfield-Jackson International Airport prior to the 1996 Olympics. Since 2003, he has been involved in planning a number of New Urbanist development projects in Florida, California, Texas and Panama, and has advised leading urban design firms in the field on development programming, retail and mixed-use economics. Mr. Moriarity also developed the methodology for a city-wide retail strategy for the District of Columbia, initially incorporating twenty neighborhood and regional-destination commercial districts. Mr. Moriarity holds two degrees in Architecture from the University of Texas at Austin, He was a founder of the Main Street Program and was downtown manager in one of the original three demonstration communities, as well as of the National Trust's Main Street Center. In 2005, he received an Honor Award from the National Trust for Historic Preservation. He is a frequent speaker on downtown development, historic preservation, specialized retail projects and transportation-related development issues, and has been a guest lecturer at numerous universities inclUding Johns Hopkins, the University of Maryland, New York University and others. His professional affiliations include: the International DowntownAssociation, the National Restaurant Association, the International Council of Shoppin~ Centers, the National Trust for Historic Preservation, and the Congress for the New Urbanism. He is a Board member and past chairman of Preservation Action and the Historic Preservation Education Foundation. Mr. Moriarity was also a member and Vice-Chairman of the Arlington County, Virginia Historic Affairs and Landmark Review Board. (' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 ~t~m r 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 18/51 Date: 3/10/2008 10:21 :39 AM ERA downtown ., works Michelle Bowen. Associate Ms. Bowen joined ERA in May of 2005. She received her undergraduate degree from Vanderbilt University (cum /aude) in Community Development and Social Policy. Ms. Bowen's experiences and work represent a balance of retail revitalization, urban design. historic preservation: and economic analysis. As part of the ERA's Downtown Works special practice group, Ms. Bowen concentrates on the creation of tenanting strategies and merchandise mix plans and implementation programs. Projects include: Retail Analyses and Merchandising Strategies for Downtown Commercial Districts · Merchandising Mix Plans & Implementation Strategies - Township of Lower Merion, PA: Ms. Bowen created Merchandise Mix Plans that identified key retail recruitment targets and developed Implementation Programs to achieve merchandising goals for each of four separate commercial districts. Ms. Bowen conducted demographic research, interviewed stakeholders. researched existing policies, and assessed storefronts in the four commercial districts. Ms. Bowen assisted in training a Retail Coordinator to recruit appropriate retail, and advised the design and content of recruitment/marketing materials. Congress Avenue Merchandising Mix Plan & Retail Recruitment Strategy - Austin. TX: Ms. Bowen outlined a Merchandise Mix Plan and Recruitment Strategy based on demographic and psychographic information, retail demand. the existing retail mix, and the physical characteristics of buildings and uses along Congress Avenue. Ms. Bowen performed a Qualitative Assessment of storefronts, evaluated the surrounding retail environment. aided in the selection and training of a Recruiter. · 6'" Street Urban Entertainment and Retail Strategy - Austin, Texas: Ms. Bowen participated in a complex strategy to salvage and strengthen identity and culture of Austin's live music entertainment district. This included a comprehensive assessment of existing conditions. Merchandise Mix Plan, and multi-faceted Implementation Program. · Bryn Mawr Master Plan - Bryn Mawr, PA: As part of a master plan. Ms. Bowen conducted a retail demand analysis and market overview. · Downtown Market Analysis - Nampa, 10: Ms. Bowen quantified potential retail demand based on residential growth and existing sales leakage out of downtown into surrounding retail centers. Prior to ERA, Ms. Bowen worked with the Raleigh Urban Design Center (city planning department) and the Nashville Civic Design Center in efforts to revitalize their downtown districts. At the Raleigh Urban Design, Ms. Bowen implemented parts of the City Council's downtown revitalization plan, specifically urban design improvements, economic development initiatives, and regulatory reform strategies. At the Nashville Civic Design Center Ms. Bowen assisted in the development of the "Plan of Nashville." a community-based vision. derived after 18-months of community outreach, to guide growth, development. and planning efforts in Nashville's rnetropolitan region. (' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 1~~g~lf 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 19/51 Date: 3/10/2008 10:21 :40 AM ERA downtown works David C. Madej. Analyst Mr. Madej joined the Washington, D.C. office of Economics Research Associates as an Analyst in June 2007. He specializes in the use IOf geographic information systems (GIS) analysis and mapping on economic and real estate development projects. Since joining ERA, Mr. Madej 'has worked on a wide range projects at a variety of geographic levels, including: · A market analysis of residential, office. retail, and hotel demand for a mixed-use development in the San Antonio metropolitan area_ Mr. Madej developed projections of demand based on demographic trends, population movements, and current and pipeline supply. Relocation of military personnel under Base Realignment and Closure was analyzed. · An analysis leading to the expansion of the Georgetown Business Improvement District in Washington, D.C. Mr. Madej mapped properties in the proposed district and determined the amount of potential tax revenue generated. · A study of retail opportunities in the Washington, D.C. metropolitan area and twenty neighborhood submarkets in support of a comprehensive retail strategy. Mr. Madej performed a GIS analysis of submarket trade areas to determine sections of overlap and highlight critical submarkets, An analysis of a proposed Tax Increment Financing (TIF) District in Pittsburgh, Pennsylvania which is intended to support a transit-oriented development project. Mr. Madej determined the potential tax base for the site and prepared a series of maps depicting nearby parcels of land. · An assessment of the use of commercial revenue streams by non-profit and public groups to determine the suitability of proposed activities at a Pennsylvania historic site. Mr. Madej analyzed guidelines for the use of supporting activities and researched commercial activities undertaken at comparable sites. · An analysis of opportunities for residential. mixed-use, and master planned development in the Washington, D.C, metropolitan area. Mr. Madej mapped and analyzed demographic characteristics of residents of five counties to determine areas with potential for future development. Mr. Madej graduated magna cum laudefrom the University of Maryland, College Park in May 2007 with a Bachelor of Arts degree in Ecooomics and a Bachelor of Science degree in Geography. He also earned a citation in Geographic Information Systems. Mr. Madej joined ERA as an intern in September 2006 while completing his undergraduate studies. As an intern, Mr. Madej provided assistancewith GIS mapping, demographic data collection, and site comparisons_ {' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 1 7 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 20/51 Date: 3/10/2008 10:21 :40 AM ERA I downtown works Michael Mahn, Analyst Michael Mahn's professional Interests focus on Downtown revitalization and urban real estate and the economic feasibility of city development plans. He joined Economics Research Associates in September 2007, after receiving his Bachelor of Science Degree in Business Administration. Since joining ERA, Mr. Mahn has begun work on an urban revitalization project in downtown Columbia, South Carolina as well as a development plan on the Rockville Pike Corridor in Rockville PIke, Maryland. Mr. Mahn's previous experience includes a university consulting project focusing on industry, market, and internal analysis of the tailoring industry of Columbia. South Carolina. Leading a cross- functional business team, Mr. Mahn created a proposal for a new strategic business plan for his client based on the industry and internal analysis. His experience includes: Nicks Tailoring Co · Conducted a comprehensive industry analysis, competitor analysis, and internal analysis and identified key strategic issues and recommendations. · Identified a differentiation strategy approach and produced a full marketing plan including all advertising and solicitation materials, a redesigned logo to Increase brand awareness. and co- marketing tactics to increase the percent of design accounts. · Benchmarked against competitors' practices and detected accounting and financial inefficiencies; devised program to increase number of customer referrals generated for design side of tailoring business. Mr. Mahn has also previously researched the economic effects of the growth of the Mexican Immigrant population on the state of South Carolina. He researched and analyzed empirical data related to the size of the Mexican immigrant population. their purchasing power, education level, wages and the costs of this population influx. He forecasted the short-term arid long-term effects of this population growth through cost-benefit analysis and economic modeling and he determined an appropriate recommendation for policy makers to reduce costs and ensure a sustainable competitive advantage for South Carolina. Mr. Mahn received a Bachelor of Science Degree in Business Administration with a major in Economics from the Daria Moore School of Business at the University of South Carolina. DurIng his senior year he was inducted into the International Honor Society for Economics based an his performance in both his economics courses as welt as his overall university studies. t' Economics Research Associates Retail Recruitment and Marketing Services Project No_ 49487 Item # 2 Page 18 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 21/51 Date: 3/10/2008 10:21 :40 AM ERA I downtown works Ongoing ContractS/Projects Minneapolis, MN Downtown Retail Strategy: Demand Analysis. Merchandise Mix Plan and Implementation Program Project End: March 2008 ERA Downtown Works was retained by the Minneapolis Downtown Council in January 2007 to develop a holistic and comprehensive approach to retail in downtown Minneapolis. ERA determined two retail focus areas with the greatest potential for retail success. ERA developed two unique and . differentiated Merchandise Mix Plans. One retail area, Hennepin Avenue, is defined with urban entertainment and cultural attractions from art galleries to live theaters. It is poised to be the cultural spine of Minneapolis, but at present, this potential is not yet achieved. The other. Nicollet Mall, is the retail corridor for the Central Business District. Unlike many downtown areas, Nicollet Mall has a mixture of national chains and independent retailers. The challenge on Nicollet is retaining and growing retail that fits the Merchandise Mix Plan. Memphis, TN Downtown Merchandise Mix Plan and Implementation Guidance Project End: April 2008 ERA Downtown works was retained by The Center City Commission in Memphis in October of 2007 to create a Merchandise Mix Plan for dawntown and provide training to the Commission's Retail Recruiter. Currently, ERA is finalizing the Merchandise Mix Plan and will commence training sessions with a newly hired Retail Recruiter. San Diego, CA C-Street: Retail Potential Project End: ApTit 2008 ERA was retained by the San Diego Centre City Development Corporation to research demographic and market conditions and projections, ERA Downtown Works was specifically charged with evaluating retail potential for the major transit corridor in the larger context of downtown. Downtown Works conducted a thorough site visit assessment and prepared a detailed memo highlighting the challenges, necessary improvements and retail potential, including specific types of retailers and lacations. Nashville, TN Downtown Itetail Strategy: Merchandise Mix Plan and Implementation Program Project End: June 2008 ERA's Downtown Works special practice group was retained by the Nashville Downtown Partnership in July of 2007 to create a Retail Strategy for the downtown area. The Retail Strategy includes the Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 1 9 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 22/51 Date: 3/10/2008 10:21:41 AM ERA I downtown works development of a Merchandise Mix Plan, which is based on market research, for retail focus areas as well as a comprehensive Implementation Program. The scope included phasing and retail recommendation for three sub-districts within downtown. ERAIDW is mid-way through the year long project, recently finalizing the Merchandise Mix Plan and Implementation Program objectives. Over the next six months. ERAIDW staff will commence retail recruitment and other Implementation tasks with the Nashville Downtown Partnership. Columbia, SC Retail Demand Analyses. Merchandise Mix Plan, and Implementation Program Project End: August 2008 ERA was retained by Columbia's Center City Partnership organization in fall of 2007 to conduct retail demand analyses for six different retail clusters, all having a wide range of characteristics. ERA is conducting four retail demand analyses for commercial corridors with high traffic volume and low residential density. ERA will make recommendations for short-term and long-term retail opportunities. ERA is also assessing retail demand and potential for a student-<iriven retail cluster near the University of South Carolina. ERA is making recommendations on how to broaden the customer base. For the Downtown Core, ERA is both conducting a retail demand analysis and developing a Retail Strategy. The Strategy will define a market appropriate Merchandise Mix Plan and commence and Retail Recruitment Program. {' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 20 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 ERA downtown works Page: 23/51 References: Current Clients Matt Kennell City Center Partnership President and CEO 1201 Main Street, Suite 150 Columbia, SC 29201 Matt@citycentercolumbia,sc 803.233.0620 Sam Grabarski President and CEO Minneapolis Downtown Council 81 South 9th Street, Suite 260 Minneapolis. MN 55402 sama@downtownminneaoolis.com 612.338.3807 Tom Turner President and CEO Nashville Downtown Partnership 150 4th Avenue North, Suite G-150 Nashville, TN 37219 tturner@nashviHedowntown.com 615.743.3090 I' Date: 3/10/2008 10:21:41 AM Economics Research Associates Retail Recruitment and Marketing Services Item # 2 Page 21 Project No. 49487 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 24/51 Date: 3/10/2008 10:21:41 AM ERA I downtown I works Relevant Experience (reference list follows) The following case studies summarize a range of Downtown Works projects over several years. Downtown revitalization is often a slow and gradual process that requires constant nurturing and maintenance. Each of the cities described is in a different phase of its retail revitalization process. Philadelphia, Pennsylvania Projects' ranged from six months to one and a half years. Originally based in Philadelphia, Downtown Works active involvement, retail recruitment, and hands- on consulting had a definitive impact on downtown Philadelphia and its retail revival over the past decade. Downtown Works' consulted to clients in both the public and private sector, from the Center City District, a business improvement district, to individual property owners. During consultation with the Center City District, Downtown Works was commissioned to provide a comprehensive retail analysis for an important two-block area on Chestnut Street and adjacent to the city's Avenue of the Arts. Working closely with property owners and Center City District staff, Downtown Works provided recommendations on the quality and mix of retail and the overall physical appearance of the buildings and storefronts. Downtown Works created a merchandising and preliminary retail-marketing plan that gave the District a core plan for improvement and implementation. Downtown Works continued to consult for the Center City District and coordinated the retail leasing for these critical blocks. Downtown Works also successfully leased Liberty Place Mall for its opening on Chestnut Street. In the late 1980's, Chestnut Street property owners were having trouble securing rents between $20 and $25 per square foot; now they are renting space upwards of $60 per square foot. Rent increases as sales per square foot increases; higher sales and rents are an indication of a thriving active retail district, D.owntown Works was also an integral part of the retail turn-around on Walnut Street, which is parallel to Chestnut Street. Over the years, successful retail has expanded east of the prime intersection (Walnut & 18th Street). Since the 1980's. retail rents on Walnut Street have increased from $18 - $34 per square foot to approximately $95 per square foot. Downtown Works successfully leased the former Nan Duskin Building on Walnut Street, as well as other. After a series of projects, all geared towards retail renewal in downtown Philadelphia, Downtown Works became committed to the concept that a concerted effort to assemble the right merchandising mix is the key, but not sole, component for retail revitalization. Despite the challenges of working with multiple properties owners, collaboration amongst them is critical and achievable. Most recently, West Elm. Anthropologie, Zara, and Sephora all signed leases in downtown Ph"'iraClelphla. LJowntown Works IS dedicated to selling the vision of the Retail Strategy and Merchandising Plan to property and business owners; their buy-in is crucial. In addition, the brokerage community must commit to bring quality retail prospects to landlords. Through hard work, determination, 'nd creative strategies, Downtown Works sawall of these elements come together in Center City Philadelphia. Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 22 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 25/51 Date: 3/10/2008 10:21:41 AM E RA!downtown . I works St. Louis, Missouri - 2002 One year contract Downtown Works consulted to the S1. Louis Downtown Partnership in 2002 to create and implement a Retail Merchandising Plan and Leasing Strategy. Once a thriving center of commerce, trade, and industry, St. Louis' downtown suffered from high vacancies, a small (though growing) residential population, and a severe lack of retail and recreational amenities. The project area was large and Downtown Works recommended concentrating revitalization efforts in order to achieve a critical mass of activity. Downtown Works prioritized three "Zones of Opportunity" based on a logical and ideal timeline for revitalization efforts to begin: short-term, mid- term, long-term. Downtown Works not only addressed the current retail mix and high vacancy rate (50%1, but also evaluated the physical conditions of existing buildings, major impediments to downtown development, and urban design and streetscape factors. The client hired a Retail Coordinator. Which Downtown Works trained and continues to advise. Since Downtown Works' involvement in downtown S1. Louis, which includes the training of a Retail Recruiter, numerous vacancies have been filled and sales per square foot are at an all time high. Between 2003 and the end of 2004, eight new restaurants and ten new retailers opened. Since the beginning 6f 2005 and through the end of 2006, 30 new retailers and 13 new restaurants opened. By fall of 2007, 90 new stores and restaurants had opened. Spaces that were originally renting for $1 0- 12 per square foot are now beginning between $2G-22 per square foot. Public and private partnership projects are beginning to take root in the mid-term and long term nodes, as well as additional service uses and restaurants. Estimated sales per square foot for retail range from $100 to $400; restaurants' sales are between $350 and $400 per square foot. f Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 23 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 26/51 Date: 3/10/2008 10:21 :42 AM ERA downtown works Haddonfield, New Jersey - 2003 One year contract The downtown of Haddonfield, New Jersey, a borough of 11,500 people, is urban and walkable, with beautiful colonial-style buildings and 200 shops and restaurants. Despite its longstanding reputation as a destination for high-end retail, the merchandising mix in Haddonfjeld declined. Haddonfield's situation was similar to that of many towns and was due to competition from malls and shopping centers, as well as a growing reliance on the automobile and a failure to keep the tenant mix fresh and exciting. Downtown Works identified Haddonfield's core retail problems and developed a Retail Merchandising Mix Plan for the downtown area, which identified appropriate retail categories for the downtown and ensured a stable and successful commercial district. To implement the Plan, Downtown Works trained a Retail Coordinator who deals with existing and prospective retailers, and serves as a liaison between the Borough, landlords, prospective retailers, and existing retailers. Downtown Works continues to work with the Retail Coordinator on an as-needed consultant basis. Since Downtown Works intervention three years ago, rental rates in Haddonfield have risen from $17-19 per square foot to $24-26 per square foot Moreover, the new stores represent a range of local, regional, and national retailers. f Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 24 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 27/51 Date: 3/10/2008 10:21 :42 AM ERA downtown works Township 0' Lower Merion, Pennsylvania - 2003 Six month to one year contract over two years ERA Downtown Works was retained by the Township of Lower Merionto conduct a year long Retail Strategy and Implementation Program for Ardmore, one of the original larger commercial districts in the Township. Following, work in Ardmore, Downtown Works was retained to conduct similar strategies for other parts of the Township, Bryn Mawr, Merion-Cynwyd, and Bryn Mawr. Ardmore ERA's Downtown Works practice group was retained in February 2005 to develop retail recruitment and retention plans and also a strategy for implementation for the downtown core area. The goals of the project were to: Create a Merchandising Mix Plan for downtown Ardmore that identifies which categories should and should not be expanded. · Recommend a strategy for implementing the Merchandising Mix Plan by recruiting new retailers, retaining existing retailers, and coordinating with landlords. · Identify existing impediments to achieving a successful retail corridor and suggest modifications to promote revitalization. · Hire and train a Downtown Retail Coordinator to proactively recruit retailers to Ardmore that adhere to the Merchandising Mix Plan ERA then advised the Township on how expand their Retail Strategy and recruitment resources to other commercial district. Bryn Mawr ERA Downtown Works was retained by Sasaki (prime consultant to the Township of Lower Merion) to develop a Merchandise Mix Plan as part of a larger master plan. Bryn Mawr is a town of 4,000 residents located along the densely populated Main Line of Pennsylvania, the areas first suburbs. It is a suburban downtown with a broad spectrum of retail, ranging from a hip and trendy clothing boutique, to a small violin repair shop. While there are a handful of stores that were re doing well in Bryn Mawr, the majority of the stores were not. Downtown Bryn Mawr experienced steady decline in the quality of retail in the area, which can be attributed to competition from other area shopping districts, failure to keep the tenant mix current, lack of building maintenance, and also a national disinterest in downtown retail during the 1980's and 90's. Based upon careful inspection and i:I::;::;I;;l::>::jllll:ml, Downtown-Works developecralV1erchandlse MIX Plan strategy to address the current issues in Bryn Mawr. Downtown Works also worked with and trained the Township's retail recruiter. In addition, ERA conducted economic demand analyses for various land uses (retail, residential, and office) to inforrA""the Sasaki master plan. Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 25 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 28/51 Date: 3/10/2008 10:21 :42 AM ERA downtown .works Merion-CYnwyd ERA Downtown Works was retained by The Township of Lower Merion in March of 2006 to create a Merchandise Mix Plan for Merion Cynwyd. The town is a gateway to the historic Main Line of Philadelphia. While historically a center of retail activity, recent competition from other area shopping centers and a weak merchandising mix has contributed to a downturn in the area's retail. Downtown Works has identified the core issues in downtown, and developed a Merchandising Mix Plan, which outlines appropriate retail categories for the street, as well as how to create a stronger identity and presence in the Main Line area. Downtown Works made recommendations to help resolve some of the problems with the existing retail structures, such as fac;ade improvement programs and storefront and signage guidelines. The creation of more character in the overly-homogenized signage and facades will benefit the retail. Downtown Works worked with the Township to strategize the best way to commence implementation and begin retail recruitment. Bala Cynwyd Bala Cynwyd is a small town along the Main Line of Philadelphia. While part of a dense suburban area, Bala Avenue, the commercial main street is suffering. Bala Avenue is two long blocks of small retail services and shops, and an old movie theatre. Both the building stock and the merchandising mix on the street are in decline. Most of the businesses along the street were not retail uses, but rather services. Downtown Works identified the core issues with the current mix, and developed a Merchandising Mix Plan that is tailored to the primary and secondary trade areas and differentiated from nearby commercial districts. Downtown Works also recommend measures to help resolve some of the problems with existing retail structures. Downtown Works outlined appropriate retail categories for the street, as well as methods to create a stronger identity and presence in the Main Line area. t' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 26 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 29/51 Date: 3/10/2008 10:21 :43 AM ERA downtown ., works Austin, Texas - 2005 - 2007 Congress Avenue: Six month contract Downtown Works was hired by the Downtown Austin Alliance (DAA), with city funds, to develop a Retail Strategy, which included a Merchandising Mix Plan, Recruitment Plan, and Implementation Strategy for Congress Avenue. Congress Avenue is the traditional "Main Street" in downtown Austin that leads to the State Capitol. It is also the original commercial and ceremonial corridor for both the city and state. Over the years, retail uses in downtown Austin moved away and offices became a dominant commercial use. Now, however, there is a revived interest in downtown retail with new residential and public improvement projects underway. Downtown Works completed a Retail Strategy in 2005 to bring retail back to Congress Avenue. Using various research methods, ERAIDowntown Works projected the retail demand for downtown. Downtown Works also researched lifestyle and spending patterns of potential customers and interviewed stakeholders. Next, Downtown Warks formulated both a Merchandising Mix Plan that describes retail categories that will best cater to potential customers in the market and a Recruitment Plan that outlines how to attain those desired uses. Additionally, Downtown Works commenced the Implementation by identifying and training a Retail Recruiter and prospecting retailers. It typically takes several years to see significant results from a Retail Strategy. During the two years of the program, Austin's Retail Recruiter called upon 600 retailers, with guidance and oversight from Downtown Works. Of those retailers, 125 are "qualified", indicating that they meet the ideal retail categories and standards outlined in the Merchandising Mix Plan. Of the 125 "qualified" leads, 20 are active prospects for downtown Austin. Since the Plan was created, five new retailers have opened. Currently, downtown landlords are in negotiation with four new retailers, of which two are nationals. These numbers are successful results for the two years of Implementation. Downtown Works believes in and is committed to this interactive and hands-on approach for retail revitalization in downtown. 6th Street: Six month contract Upon completion of a Retail Strategy for Congress Avenue, Downtown Works was hired again by the DAA to evaluate 6th Street, the City's entertainment district. Downtown Works created a Merchandise Mix Plan and Recruitment and Retention Strategy. Downtown Works provided the DAA with strategies to ensure that 6th Street maintains its identity and live-rnusic culture, but also improves the quality of uses. This is a delicate and challenging transition that will require a complex approach and careful consideration of existing and potential businesses and property owners. Recently, an independent and artistic movie theater relocated to 6th Street; it serves as an excellent anchor and balances the night-lifA f'lntArtainment Vl'mljf'l~ ThE'! nAA retained ERAIDW witb..a..r.r::loothly retainer fee to provide training sessions and continued guidance regarding leasing and negotiation. (' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 27 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VVW.gfi.com From: 95624257 Page: 30/51 Date: 3/10/2008 10:21 :43 AM ERA downtown works References Previous Clients Kevin Farrell Senior Director Economic Housing & Develapment $t. Louis Downtown Partnership 906 Olive Street, Suite 200 $1. Louis. MO 63101-1425 kfarrell@downtownstlouis.orq 314.436.6500 ext 239 Molly Alexander Associate Director Downtown Austin Alliance 211 East 7/J1 Street Suite 100-L Austin, TX 78701 molly@downtownaustin.com 512.469.1766 Mayor Tish Colombi Haddonfield. New Jersey Haddonfield Borough Hall 242 Kings Highway East Haddonfield, NJ 08033 tcolombi@comcast.net 856.428.0348 Angela Murray Assistant Director Township of Lower Marion: Building and Planning Department 75 East Lancaster Avenue Ardmore, PA 19003-2376 amurray@lowermerion.org 610.645.6117 {' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 28 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 31/51 Date: 3/10/2008 10:21 :43 AM ERA I downtown I works Work Samples As a corporate policy, Economics Research Associates (ERA) does not furnish prior reports along with responses to Request for Proposals. Each ERA report is unique. We use very little "boilerplate" - information that is used over and over. While methods and types of analysis are standard. the way we use thern changes based on the distinctive characteristics of each project. ERA's finished product - the report, is the property of our client, and is distributed at their discretion only. You are more than welcome to request report documents through our references; some post reports on their website. We will treat the report we hope to generate for you with the same discretion. We appreciate your understanding. Insurance If Economics Research Associates (ERA) is selected for the project, ERA will provide the City with a certificate or certificates of insurance showing the existence of the coverage required by the RFP. When specifically requested by the City in writing, ERA will provide the City with certified copies of all policies of insurance as requested by the RFP. . f' Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 29 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 32/51 Date: 3/10/2008 10:21 :43 AM ERA downtown works STANDARD PROPOSAL ADDENDUM It is understood by the client that Economics Research Associates (ERA) can make no guarantees concerning the recommendations which will result from the proposed assignment. since these recommendations must be based upon facts discovered by ERA during the course of the study and those conditions existing as of the date of the report. To protect you and other clients. and to ensure that the research results of ERA's work will continue to be accepted as objective and impartial by the business community, it is understood that our fee for the undertaking of this project is in no way dependent upon the specific conclusions reached or the nature of the advice given by us in our report to you. It is agreed by the client that the repart is not to be used in conjunction with any public or private offering of debt or equity securities without prior written consent. It is further agreed that the client will indemnify ERA against any losses. claims, damages and liabilities under federal and state securities laws which may arise as a result of statements or omissions in public or private offerings of securities. It is agreed by the client that payment for the services of ERA is due upon receipt of the invoice; that full payment is due upon receipt of the completed report; and that ERA has the right to withhold delivery of the final report pending receipt of any overdue payments. In the event any invoice is not paid within 30 days after rendering of the invoice it shall commence bearing interest on the date the invoice was rendered at the rate of 18 percent per annum (or such lesser rate as may be the maximum interest permissible under applicable law) and the client agrees to pay all accrued interest, together with the charges for services rendered as provided for in this agreement. In addition, should an unpaid invoice be referred to our attorneys for collection, the client agrees to pay their reasonable fee for such work, as well as any costs of suit that may be incurred. It is further agreed by the client that the report is not to be relied upon by third parties and that no abstracting of the report will be made without first obtaining the permission of ERA. It is understood by ERA that the findings of this report are the proprietary property of the client and they will not be made available to any other organization or individual without the consent of the client. This proposal will remain in force for a period of 60 days from the date shown hereon. f Economics Research Associates Retail Recruitment and Marketing Services Project No. 49487 Item # 2 Page 30 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 ERA I downtown . r works Appendix: ERA Annual Report Page: 33/51 Date: 3/10/2008 10:21 :44 AM t Economics Research Associates Retail Recruitment and Marketing Services Item # 2 Page 31 Project No. 49487 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 34/51 Date: 3/10/2008 10:21 :44 AM .......... "...- __....' ._.....n L........ . ......... _. ........ ........ '.....00 :.... ". .... . . .~."'." ." " - _": .:.:: '" '. '. ~ ~ -: -.: : :". .". :", ',: ': : '.' 0.' ...... . '. : ...". . .': . . .... ..,. -. - . ....- -:'" . .'. . . . . . . . . . . .. . ,.... ."r . _ . . ~ -.- - .'. '.- ..: '. - '". . . .-. . ,',... '-: .." . . -. . '.' . . . .' . . - . . . . T ". ; " ~ . .'. "':.:,' '.'<' , '.' .... .,".'"': :..-.-: ..:.....- ".: . T' . . .:. .. ~. '. '.. .... : :: :". _ _,' .:. '., . . ::. L . .: ~. \ . - ...- . . . . . -:.: : ':. :'.~..;. . - . :-: .... :'::'T' c. . ." - .. .. .~ :.:.... --:. '. .. ......,'...::..:..":: -.;: . . '.:\..:._:._'~...:}-_...:.-...,:..~~ ""', :........ ..~........~~... ~ :::: "'":. .~'::_"f Economics Re's:earcli:"::-::'. ':(/'::.'1 As~6a:ii(tiji'\,,;)~;;,: · . .-.".. .. : ... :.: . T ." :'~: .": ::.':'. :.. ~: ," , ~ T'. "._-"~ :. :..: '. ~ -::' ':.': '-.: -:"~ ..: " . ..'co :'.r : '_,'. '. '.--_." '." '.. "'. ":: : . .. .. .. - '.' " .' ....., I Consolidated Financial Statements For the Years Ended June 30,2006 and 2005 f IBDQ BDO SeIdman. LLP Accountants and Consultants Item # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 35/51 Date: 3/10/2008 10:21 :44 AM Economics A Consolidated Financial Statements For the Years Ended June 3D. 2006 and 2005 t Item # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 36/51 Date: 3/10/2008 10:21 :44 AM Economics Research Ass Report of Independent Certified Public Accountants 3 Consolidated Financial Statements Consolidated Balance Sheets 4 Consolidated Statements of Operations and Comprehensive Income 5 Consolidated Statements of Shareholders' Equity 6 Consolidated Statements of Cash Flows 7 Notes to Consolidated Financial Statements 8-17 f . Item! 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 37/51 Date: 3/10/2008 10:21 :45 AM IBDQ BOO SeIdman, LLP Accountants and Consultants 1900 Avenue or the Stars, I Uh Floor Los Angeles. CalUornfa 90067 Telephone: 13101551-0300 Fax: 13101 557-ln7 Report of Independent Certified Public Accountants Economics Research Associates Los Angeles, California We have audited the accompanying consolidated balance sheets of Economics Research Associates and subsidiaries as of June 30,2006 and 2005, and the related statements of operations, comprehensive income, shareholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with- auditing standards generally accepted in the United States of America Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circUmstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over finauciaI reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, . evidence supporting the amOlmts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our andits provide a reasonable basis for our opinion. In our opinio~ the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Economics Research Associates and subsidiaries as of June 30, 2006 and 2005, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. ~ 15JJO~~ C- L-P Los Angeles,t'" California September 5, 2006 Item # 2 3 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 38/51 Date: 3/10/2008 10:21 :45 AM Consolidated Balan Economics Research Ass June 3D, 2006 200S Assets Current Bssets Cash and cash equivalents $ 686.000 $ 595,000 Professional fees receivable. less allowance for dDubtful accounts of$349.000 and $230,000 (Note 3) 6,195,000 5,318.000 Employee advances receivable 43.000 16,000 Prepaid expenses 129,000 148,000 Income taxes receivable 7.000 H,OOO Total cutrent assets 7,060,000 6.088,000 Furniture and equipment, net (Note 4) 1.490,000 864,000 Deposits 116,000 116,000 Total assets S 8,666,000 $ 7,068.000 Liabilities and Shareholders' Equity Current liabilities Line of credit (Note S) S $ Accounts payable and accrued expenses 3,328,000 2,512.000 Income taxfls payable 58,000 64.000 Due to related parties (Note 10) 63,000 46,000 Billings in ex.cess of professional fees earned on contracts in progress 522,000 392.000 Deferred tax liability ~ote 8) 1,011,000 1,040,000 Note pa)'Rble to former employee (Note 6) 75,000 Current portion oflong-term debt (Note 5) 210,000 160~00O Current portion of deferred rent 41,000 22,000 Total current liabilities 5,318,000 4,236.000 Long-term debt (Note S) 353,000 120,000 Deferred rent 276,000 234.000 Total liabilities 5,947,000 4,590.000 Commitments (Note 1) Shareholders' equity (Note 9) Common stock, $.10 par value: Common shares - 660,000 shares authorized, 162.731 and 164,655 shares issued and outstanding 16,000 17,000 Capital in excess of par value 113,000 141,000 Accumu1ated other comprenensIVe Income 176.000 176,000 Retained earnings 2,473,000 2,194.000 Less: Notes receivable tram sale of stock (Note 9) 2,778,000 2.528,000 (59.000) (SO.OOO ) Total shareholders' equity 2,719,000 2,478.000 S 8,666.000 $ 7,068.000 See accompanying notes to consolidated financial statements. IterllJ# 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 39/51 Date: 3/10/2008 10:21 :45 AM Consolidated Statements of 0 and Comprehensiv Economics Research Ass See accompanying notes to consolidated fmancial statements. f Itemt 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 40/51 Date: 3/10/2008 10:21 :46 AM .... .... ~ CD S CI 0 0 0 0 0 0 0 0 :5 0 Iii Q co <:I 0 c CI 0 0 00 <=> f. o. ~ c. ~ i 0 ~ 0 c. q 0 0Cl N l2\ eO II'> r-: '<r ~ or ~ ... "" t"- - 0Cl .., - ;:;r .... - "':. .... - r-;. ... ..... "" ..... '" .5! Ool - iI't iI't .9 u .... .... ...... .... 6 soS! co g c c 0 co :f "CI CI 0 C CI 0 ~ ~il ~ CI ~ ~ ~ CI - ~ a; ... m 0 ! s ~ :!to OWl i ..r: .c f ~ ~ cu loOt M "Q .c ~ a:s en 'a 0 8 co 0 :3 ~1 ~ co c (I) 0 0 0 CI S II- N "t. ~ ...; fn 0 ~~ ~ ~ - ~ l! & ~ .... r-f "" a t: ~ Ii'} ~ U) Q) .~ E """ ... .. ~ co 0 8 U 0 0 St s tf~'io CI CI 0 I- S u .u ...; ~ l5 E 9 toS t"- l"- S .... .... .... ij 0 U) -< E lU a r'J C "C u 0 .; '" ~ U W "tJ ..... ..... .S i ~ 0 0 Q C Q 0 :5 .- <:I 0 C> C> C> "'" - s It ... co. ~ ;:. Q. ~ C> 0 .- &5 a ~ ..... .... ...; en ~ ::=; on ~ .... r:r .... .... C u .... 0 ~ 0 ~ 10'1 ... ~ ..... ..... Ilo il ... 0 00 c I:) c co 0 ~ CI co co :5 .... ~ 0 c o_ M ~ '" d; ..: .... ~ ~ .... .... S ~ ICI In Ii'} 0 ~ ..... ..... ....... "" <::> ... on <:> -e- .... 8 ::: ~ s .... t"- ~ C ~ a l'}. t"- In u.= ..; r- 0; ~ c cl 1f1l :.'J - .... .... .... .... ::I ;0:: ... .. ii ~ .e: .. e .!.d e .;.! g !i u !! ..!d ~ ~ g ~ u S ~ ... 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For more information, visit: http://W'VIIW.gfi.com From: 95624257 Page: 41/51 Date: 3/10/2008 10:21 :46 AM Consolidated Statements of Ca Economics Research Ass For the yelll'S ended June 30. 2006 2005 Cash flows from operating activities Net income S 279~OOO $ 262,000 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful accounts 250,000 (22,000) Depreciation and amortization 237,000 162.000 Defcmld income taxes (19,000 ) 90,000 Loss on disposal of equipment 2,000 Deferred rent 61,000 256.000 Changes in assets and liabilities: Increase in trade accounts receivable (1,127,000) (236,000) Increase in employee advances (27,000) (l,eOa) Dem-ease (increase) in prepaid expenses 1',000 (16.000) Decrease in income taxes rec.eivable 4.000 2,000 Increase in deposits 1,000 Increa5Cl in accounts payable and accrued expenses 816,000 360,000 (Decrease) increase in income taxes payable (6,000) 64.000 Increase (Decrease) in amounts due to related parties 17,000 (6,000) Increase in billings in excess of work- in-process 130.000 153,000 Net cash provided by opemting activities 636.000 1,069,000 Cash flows from investing activities Acquisition ofpmperty and equipment (864,000) (594,000) Cash flows from fmancing activities Receipt of payment on common stock notes receivable 25,000 9,000 Payment fur repurchase of common stock (77,000) (121.000) Proceeds from issuance of common stack 115.000 180.000 Proceeds from revolving line of credit 1.600,000 2,200.000 Re-payments on revolving line of credit (1,600.000 ) (2,300.000 ) Payments on note payable to former employee (26,000 ) Proceeds from long-term loan 450,000 Payments on long-term loans (168.000) (160.000) Net cash provided by (used) in financing activiti~ 319.000 (192.000 ) Net increase in cash and cash equivalents 91,000 283,000 Cash and t:ash equivalents. beginning of year 595.000 312,000 Cash and cash equivalents, end of year $ 686,000 $ 595,000 Supplemental disclosures of t:Bsb Bow informatioD Cash paid during the year: . Interest paid S 25.000 $ 46.000 Income taxes paid i' S 1l0~OOO $ 20,000 Non-cash activity: Notes receivable from sale of stock $ 43,000 $ 59,000 Note payable to fOrmer employee for company stock repurchased (net of note receivable of$9.000) $ 101,000 $: See accompcmyillg nores to consolidated financial statements. Item # 2 7 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com 1. The Company 2. Summary of Significant Accounting Policies From: 95624257 Page: 42/51 Date: 3/10/2008 10:21 :46 AM -Economics Research Ass Notes to Consolidated Financial St Economics Research Associates (the '~ompany") is a diversified consulting :firm that provides a wide range of analytical services in economics, finance, marketing, planning and management to public and private clientele. The Company mlllnt9;n~ offices and provides the majority of its services to clients in and around the following cities: Los Angeles (corporate headquarters), San Francisco, San Diego, Chicago, Washington D.C., New York, and London (United Kingdom). Revenues are derived from projects in the following specialties: real estate and land use~ recreation and entertainment, resorts and hotels, public facilities, and economic planning and policy. The Company has three wholly-owned subsidiaries, all of which are inactive. Generally, the Company's services are provided to its clients based on fixed price contracts, which vary in duration from several weeks up to a year. Basis of Accounting The financial statements are prepared on the accrual basis of accounting. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its three wholly-owned subsidiariest all of which are inactive. All material intercompany items have been eliminated. Foreign Currency Translation t' Assets and liubilities of fureign operations are translated into U.S. dollars at current exchange rates at the end of the period. Income and expenses are translated into U.S. dollars at the average rate of exchange prevailing during the period. Foreign currency gains and losses as a result of foreign currency transactions are recorded in the statement of operations. Changes in balance sheet items as a result of a change in.the exchange rate used by the Company during the fiscal year are recorded as foreign currency translation adjustments in the statement of comprehensive income. ItEli # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com 2. Summary of Significant Accounting PolicieS (Continued) From: 95624257 Page: 43/51 Date: 3/10/2008 10:21:47 AM Economics Research Ass Notes to Consolidated Financial Sf Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported results of operations during the reporting period. Actual results could differ from those estimates. Professional Fees Receivable f' Professional fees receivable recorded by the Company are customer obligations due under Dormal trade terms. The Company performs continuing credit evaluations of its customers' financial condition and generally does not require collateral. Management reviews professional fees receivable on a routine basis, at least semi-monthly, to determine if any receivables will potentially be uncollectible. Any professional fees balances that are deemed to be uncollectible,. along with a general reserve based on known collection problems and a reserve based on the Compan.y~ s experience for unknown potential uncollectible accounts receivable, are included in the overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, management believes the allowance for doubtful accounts at June 3D, 2006 and June 30, 2005, respectively~ is adequate. However! it is possible that actual write- offs may exceed the recorded allowance. Recognition of Revenue Contract revenue is recognized utilizing the percentage of completion method based upon costs incurred as. a percentage of total anticipated costs, net of amounts not expected to be billable. Under this method, the timing of revenue recognition does not necessarily coincide with. the timing of billings to customers. When a billing is made in advance of revenue recognitio~ it is classified as billings in excess of work-in-process. Conversely, when revenue is recognized in advance of a billing, it is classified as professional fees eamed in excess of billings on contracts in progress (Note 3). Iteng # 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com 2. Summary of Significant Accounting Policies (Continued) From: 95624257 Page: 44/51 Date: 3/10/2008 10:21:47 AM Notes to Consolidated Financial S Economics Research Ass Furniture and Equipment Furniture and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the asset. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset Expenditures for maintenance and repairs are charged to operations as incurred, while renewals and betterments are capitalized. The estimated useful lives of the mEYor classification of furniture and equipment are as follows: Office furniture and equipment Computer equipment Leasehold improvements 5-10 years 3- 5 years Shorter of lease term QI estimated useful life of asset Income Taxes The Company utilizes an asset and liability approach in its accounting for income. taxes. This approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities by applying enacted statutory tax rates to these differences. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include investments with maturities of three months or less from the original dates of purchase. (' The Company has professional fees receivable and accounts payable for which the carrying value approximates fair value due to the short-term nature of these instruments. The fair value of long-term debt is estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers .with similar credit risks with the same remaining,maturities. The carrying value of the Company's long-term debt approximates its fair value. Itelfh# 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 45/51 Date: 3/10/2008 10:21:47 AM Notes to Consolidated Financial 5 Economics Research Ass 2. Summary of Significant Accounting Policies (Continued) Recent Accounting Pronouncements In May 2005~ the FASB issued SFAS No. 154~ "Accounting Changes and Error Corrections" ("SFAS 154j. SFAS 154 replaces APB No. 20. ~'Accounting Changes" and SF AS No. 3~ ('Reporting Accounting Changes in Interim Financial Statements" and establishes, retrospective application as the required method for reporting a change in accounting principle. SF AS 154 provides guidance for determining whether retrospective application of a change in acco"Ullting principle is impracticable and for reporting a change when retrospective application is impracticable. The reporting of a correction of an error by restating previously issued financial statements is also addressed. SF AS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15~ 2005. The adoption of SFAS 154 did not have a material impact on its financial statements. In June 2006, the FASBissued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of F ASB Statement No_ 109" (UFIN 48"') which presences a recognition threshold and measUrement attribute, as well as criteria for subsequently recognizing~ derecognizing and measuring uncertain tax Jlositions for financial statement purposes. FIN 48 also requires expanded disclosure with respect to the uncertainty in income tax assets and liabilities. FIN 48 is effective for fiscal years begjnning after December 15~ 2006, which will be the Company's fiscal year ended 2008,. and is required to be recognized as: a change in accounting principle through a cumu1ative-e:ffect adjustment to retained earnings as of the "ginning oftIH ~ gf ad9pti~~at the adoption of FIN 48 will not have a material impact on its consolidated results of operations or financial position. I' Item # 2 11 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 46/51 Date: 3/10/2008 10:21 :48 AM Economics Research Ass Notes to Consolidated Financial 5t 3. Professional Fees Professional fees receivable are comprised of the following: Receivable JW16 30. 2006 2005 Amounts billed to customers S 4;148,000 $ 3,077,000 Allowance for doubtful accounts (34',000) (230,000) 3,899,000 2,847,000 Professional fees earned in excess of . billings on contracts in progress 3,707,000 3,745,000 Deposits received Hom customers (1,411,000) (1,274,000) 2,196,000 2.471,000 Total professional fees receivable S 6,195,000 $ 5,318,000 4. Furniture and Equipment 5. Line of Credit and Lon -Term Debt i' Furniture and equipment are comprised of the following: Jzme 30. 2006 2005 Office furniture and equipment $ 690,000 $ 547,000 Computer software and equipment 1,116,000 736,000 Leasehold improvements 702,000 644,000 2,508,000 1,921,000 Accumulated depreciation and amortization (1,818,000) (1,063,000) Total furniture and equipment, net S 1,490,000 $ 864,000 The Company has four lending agreements with. its banks - two term loan a eements and two revolvin . e f The Company renewed its Union Bank of California revolving line of credit agreement in December 2005. The amount of credit was increased from $1,000:0000 to $1,250,000. The interest rate on borrowings under the revolving line of credit is prime rate plus 1 %. The prime rate at Jtme 30, 2006 was 8.25%. This line of credit expires on December 12, 2006. There were no outstanding borrowings. tmder this revolving line of credit agreement at either June 30, 2006 or 2005. Itelf2# 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com 5. Line of Credit and Long-Term Debt (Continued) From: 95624257 Page: 47/51 Date: 3/10/2008 10:21 :48 AM Notes.to Consolidated Financial S Economics Research Ass A second line of credit agreement was established-with Royal Bank of Scotland on August I, 2005 for f,100,OOO. The interest rate on borrowings. is the Bank. base rate plus 1.5%. The Bank base rate at June 3D, 2006 was 4.78%. This line of credit expires on February 15, 2007. There were no outstanding borrowings under this line of credit at June 3D, 2006. Long-term debt consists of the following: June 30. 2006 2005 Tenn loan payable in monthly principal installments of$13.000 plus interest at 7.71% per annum. final payment due April 2007. $ 120,000 9: 280,000 Term loan payable in monthly principal installments of$7,500 plus interest at 8.09% per annum, final payment due May 2011. 443,000 Total 563,000 280,000 Less current maturities 210,000 160,000 Long-term debt, less current maturities S 353,000 $ 120,000 The aggregate maturities of the term loan agreements are as follows: Year ending June 3D, Amowlt !' 2007 $ 210,000 2008 90,000 2009 90,000 2010 90,000 2011 . 83,000 Total $ 563,000 Item # 2 13 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com 5. Line of Credit and Long-Term Debt (Continued) 6. Note Payable Due to Former Employee 7. Commitments and Contingenties From: 95624257 Page: 48/51 Date: 3/10/2008 10:21 :48 AM Notes to Consolidated Financial S Economics Research Ass The term loan agreements. call for certain financial covenants and" restrictions, which include, among other things.. minimum net worth and profitability. As of June 30, 2006, the Company was in compliance with all of these covenants. Both loans are secwed by the assets of the Company. The note payable to former employee relates to the repurchase of common stock and was issued in May 2006. The interest rate on the note payable is 8.0% per annum, with the final payment due March 2007. The Company leases its offices and certain automobiles under operating leases. Certain operating leases provide for escalation adjustments in accordance with consumer price indices. Future minimum. payments under all the Company leases are as follows: Year ending June 30, 2007 2008 2009 2010 2011 Thereafter Minimum lease payments Amoullt $ 1,540,000 1,350,000 Is277,000 1,215,000 ls244,000 Is795,000 $ 8,421,000 Rent expense for all operating leases was $lA48,OOO and $1,245,000 for the years ended June 30, 2006 and 2005, respectively. During the year ended June 30, 2005, the Company entered into new office space lease agreements. These lease agreements t" required the landlord to provide up to $184,000 in office space improvements which the Company has recorded as leasehold improvements and deferred rent. These leasehold improvements are amortized over the term of the respective leases to which they apply. It~#2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com From: 95624257 Page: 49/51 Date: 3/10/2008 10:21 :48 AM Economics Research ..Ass Notes to Consolidated Financial St 7. Commitments Bnd Contingencies (Continued) In addition., total payments required under the leases will be- recognized as rent expense on a straight line basis over the term of the lease. The straight line rent expense was $83,000 and $72,000 more than the actual cash payments made for the years ended June 30,2006 and 2005, respectively. The Company, from time to time, is a party to legal proceedings incidental to its business. Management believes that there are no proceedings that could have a material . adverse effect on its financial position or the results of operations other than as discussed below. Under its governing documents, the Company has agreed to indp.mnify its officers and directors for certain events or occmrences arising as a result of the officer or director's serving in such capacity. The term of the indemnification period is for the officer1 s or director's lifetime. The Company has a separate indemnification agreement with one of its directors that requires it, subject to certain exceptions, to indemnify him to the fullest emnt authorized or permitted by its governing documents. 8. Income Taxes The components oftbe provision for income taxes are as follows: June 30, 2006 2005 Current $ 289,000 .$ 862000 Deferred (18,000 ) 902000 Provision for income taxes $ 271,000 $ 1762000 Net-el.m'ent deferred tax-Habiiityis-ccmprised of tht: fullowiug. June 30, 2006 2005 . t Accrual to cash conversion $ 1,124,000 $ 1,046,000 Net operating loss carryforward (251000 ) (84,000) Net current deferred tax liability $ 1,021,000 $1,040,000 Ite'f5# 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://vvvvw.gfi.com 8. Income Taxes (Continued) 9. Common Stock 10. Related Party Transactions From: 95624257 Page: 50/51 Date: 3/10/2008 10:21 :49 AM Notes to Consolidated Financial S Economics Research Ass The provision for income taxes differs from that which would- result from applying the statutory federal rate to corporate net earnings. The difference arises from state income taxes and the portion of travel and entertainment and officer's life insurance expenses, which are not deductible for tax pUlJlOses. At June 30, 2006, the state operating loss (NOL) carryforwaI'd for income tmt purposes totaled $254,000 and resulted primarily from the change to cash basis accounting for income tax purposes. The State NOL can be canied forward and applied against future taxable income until 2014. All of the shareholders are employees of the Company. In the event that a shareholder's employment with the Company terminates, the shares are offered for sale to the Company, then to the remaining shareholders. Any shares repmchased by the Company are cancelled and not held as treasury stock. During the years ended June 30, 2006 and 2005. the company repurchased 12,424 and 8.773 shares. respectively. from terminated employees. The Company has received notes. from several of its employee shareholders in exchange for shares of stock. The notes receivable are recorded as an offset to shareholders' equity. The notes are due on various dates through December 2007. with interest rates of 7% to 8%. At June 30, 2006 and 2005, the outstanding balances . were $59~000 and $50~OOO~ respectively. At June 30. 2006 and 2005, the amounts due to related parties include the unpaid portion due employees of the Company for reimbursement of expenses paid on behalf of the Company and the ance of advances to tli:e Company. t Iteqa# 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com 11. Employee Benefit Plans 12. Concentration of Credit Risk I' From: 95624257 Page: 51/51 Date: 3/10/2008 10:21 :49 AM Notes to Consolidated Financial S Economics Research Ass All employees of the Company who have completed six months of employment are eligible to participate in the Company's Stock Bonus Plan (the "Plan"). Vesting in the Plan occurs at the rate of 20 percent per year begjnni~g in the employee's third year of service with 100 percent vesting occuning in the seventh year. Con1ributions to the Plan are at the discretion of the Board of Directors. The Company did not contribute shares of its stock to the Plan during the years ended June 30~ 2006 and 2005. The Company has a second profit sharing plan (the "Second Plan") which is qualified under Section 401(k) of the Internal Revenue Code. Eligibility requirements~ vesting and Company contributions under the Second Plan are the same as under the Company's Stock Bonus Plan. At the beginning of each fiscal year, the Board of Directors approves the rate at which the Company matches employee contnbutioDS. During fiscal 2006 and 2005~ the Company made annual matching contributions to the Second Plan of $278,000 and $236,000, respectively. The net assets of the Second Plan are $12,063,000 and $10,155,000 at June 30,2006 and 2005~ respectively. The Company maintains its cash balances in three financial institutions located in Los Angeles and the United Kingdom. One of these institutions is insured by the Federal Deposit Insurance Corporation up to $100.000. Uninsured amounts held at these financial institutions totaled approximately $1~063,OOO and $648,000 at June 30, 2006 and 2005, respectively. Itefilj# 2 This fax was received by GFI FAXmaker fax server. For more information, visit: http://W'V\IW.gfi.com