List of Appendices

List of Appendices
A. Letter of Engagement
B. 30 Yr. Historical Rates of Change (Hotel)
C. Hotel 15 Year Cash Flow Pro Forma (Realistic Scenario)
D. Hotel 15 Year Cash Flow Pro Forma (Optimistic Scenario)
E. Hotel 15 Year Cash Flow Pro Forma (Pessimistic Scenario)
F. Occupancies & ADRs All MA Hotels '05 - '07
G. Hotel Sensitivity Analysis: ADRs/ Development Costs (Realistic Scenario)
H. Hotel Sensitivity Analysis: ADRs/ Development Costs (Optimistic Scenario)
I. Hotel Sensitivity Analysis: ADRs/ Development Costs (Pessimistic Scenario)
J. Financial Assumptions Made by HII (Hotel)
K. HVS Hotel Development Cost Forecasted Per-Room Averages (2007)
L. HVS Hotel Development Cost Actual Per-Room Cost Ranges (2004-2006)
M. Hotel Discounted Cash Flow Analysis: Operating Cash Flow (Realistic Scenario)
N. Hotel Discounted Cash Flow Analysis: Operating Cash Flow (Optimistic Scenario)
O. Hotel Discounted Cash Flow Analysis: Operating Cash Flow (Pessimistic Scenario)
P. Hotel Break-Even (Realistic Scenario)
Q. Hotel Break-Even (Optimistic Scenario)
R. Hotel Break-Even (Pessimistic Scenario)
S. Hotel Development Costs at Various Grade Levels
T. HII Hotel 10-Year Cash Flow Pro Forma
U. HII Hotel Cash Flow, Supportable Debt/Equity Projections
V. HII Hotel Capital Costs / Financial Summary
W. LIFESTYLE MARKET ANALYST®
W-1 LMA® All Target DMAs
W-2 LMA® Boston (Manchester, NH) DMA
W-3 LMA® Hartford & New Haven, CT DMA
W-4 LMA® Providence, RI-New Bedford, MA DMA
W-5 LMA® Springfield-Holyoke, MA DMA
W-6 LMA® New York, NY DMA (Fairfield County, CT Subset)
X. MOTT / Strategic Market Research Findings
Y. Vacation Spa Locations & Area Resorts
Z. Pioneer Valley Real Estate Properties
AA. Former MA State School Property Redevelopments
BB. Alternative Development Suggestions
CC. Potential Development Partners
DD. BSS SWOT
EE. Expert Interview Notes
FF. Bibliography
A-1
Appendix A
Letter of Engagement
University of Massachusetts
Isenberg School of Management
Letter of Engagement
February 21, 2008
William Terry
Belchertown Economic Development Industrial Corporation
P.O. Box 670
Belchertown, MA 01007
Dear Mr. Terry:
The purpose of this letter is to verify that we intend to pursue the Isenberg School of
Management Practicum Project that we discussed with you on our recent visit. We also want to
reiterate our understanding of the project we are to undertake and the major tasks related to
successful completion of this assignment. Finally, we would like to outline the initial information
and material that we expect will be needed to complete the project assignment. We would also
like to bring to your attention the following statement concerning the nature of the student
consulting project that we are undertaking.
This consulting project is possible through an agreement with your company and the Isenberg
School of Management at the University
of Massachusetts at Amherst. The final presentation and report that will be presented to you in
no way reflects the views or opinions of any faculty member affiliated with the Isenberg school
of Management. Rather, it will contain the analysis, observations, research, and
recommendations of the student team fro the Isenberg School of Management MBA program
that has been assigned to your company. Our faculty advisor’s role is that of an administrator and
grader of our work and is not a member of the consulting team.
1. Below is the project as the Isenberg MBA team understands it:
The team will review the existing development plan for a mixed-use complex on the former
Belchertown State School Property and provide an analysis of its general feasibility. This may
result in one of three recommendations:
a. The plan as is, after minor changes and updates, should be considered a ―go‖ and the process of
pursuing a master developer should resume shortly.
b. The plan should be considered a ―go,‖ but only after significant changes to the plan. This may
entail a phased implementation approach, a revised combination of building elements, or some
other alternative.
A-2
c. The plan as is should be considered a ―no go‖ and alternative uses for the land should be
explored.
The team will offer supporting evidence for whichever of the recommendations it ultimately
provides. It will strongly consider the plan’s feasibility in the eyes of master developers and
investors.
2. Based on our discussions with you on February 11, 2008 and February 20, 2008, we intend to
accomplish the following tasks while completing the consulting assignment:
a. Review the existing feasibility study prepared by Hunter Interests to identify areas of potential
infeasibility, as judged by the team. Explore these sections of the study in greater detail and draw
conclusions as to whether they affect the feasibility of the overall plan.
b. Grow aware of significant changes (i.e. new hotel development)—and likely impending changes
(i.e. casino)—to the surrounding area and determine if they significantly affect the feasibility of
the existing plan.
c. Engage relevant experts and stakeholders to judge overall concept feasibility. Experts and
stakeholders may include any of: developers, investors, architects, hotel and spa owners or staff,
state agencies, UMass educators with relevant knowledge, EDIC board members, outspoken
critics of the existing plan and other parties with useful insight.
In performing each of these tasks, the University of Massachusetts Isenberg MBA team will
consider each of the three possible recommendations identified in the project objective. If areas
of infeasibility are identified, the team will seek to determine alternative solutions, as time
permits.
We expect to generate useful recommendations as a result of completing the above tasks. Most
importantly we hope that you find these recommendations to be actionable and to contribute to
the continued performance of the Belchertown Economic Development Industrial Corporation
(EDIC). Our goal is to provide you with a final written report by May 8, 2008, and to have a
formal presentation of these results and recommendations by May 16, 2008.
Finally, thank you for providing us with this experience. We look forward to working with you
on the successful completion of this assignment.
Sincerely,
William Terry ____________________
Katherine Bloor ____________________
Pianpian Huang ____________________
Kevin Price ____________________
Ielyzaveta Zhuravska ___________________
A-3
Appendix B
30 Yr. Historical Rates of Change (Hotel)
Historical Rates of Change, 1978 – 2007
Source: Smith Travel Research; Bureau of Labor Statistics
Source: http://www.hospitalitynet.org/news/154000320/4035296.html
A-4
Appendix C
Hotel 15 Year Cash Flow Pro Forma (Realistic Scenario)
Hotel 15 Year Cash Flow Pro Forma Realistic Scenario

Net Operating Income Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 Yr10 Yr11 Yr12 Yr13 Yr14 Yr15
Revenues:
Number of Rooms 150 150 150 150 150 150 150 150 150 150 150 150 150 150 150
Average Occupancy 0.4 0.45 0.5 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55
Annual Occupied Room Nights 21,900 24,638 27,375 30,113 30,113 30,113 30,113 30,113 30,113 30,113 30,113 30,113 30,113 30,113 30,113
Average Room Rate $155 $163 $171 $179 $188 $197 $207 $217 $227 $238 $250 $262 $275 $289 $303 4.90%
Average Room Revenue $3,394,500 $4,005,934 $4,669,139 $5,387,719 $5,651,718 $5,928,652 $6,219,156 $6,523,894 $6,843,565 $7,178,900 $7,530,666 $7,899,669 $8,286,753 $8,692,803 $9,118,751
Other Revenue:
Food & Beverage $2,420,266 $2,856,217 $3,329,079 $3,841,425 $4,029,654 $4,227,107 $4,434,236 $4,651,513 $4,879,437 $5,118,530 $5,369,338 $5,632,435 $5,908,425 $6,197,937 $6,501,636 39.50%
Telephone & Other $312,490 $368,777 $429,830 $495,981 $520,284 $545,778 $572,522 $600,575 $630,003 $660,873 $693,256 $727,226 $762,860 $800,240 $839,452 5.10%
Total Gross Revenue $6,127,256 $7,230,928 $8,428,049 $9,725,125 $10,201,657 $10,701,538 $11,225,913 $11,775,983 $12,353,006 $12,958,303 $13,593,260 $14,259,330 $14,958,037 $15,690,981 $16,459,839
Annual Expenses
Departmental Expenses:
Rooms $1,145,797 $1,352,184 $1,576,045 $1,818,598 $1,907,710 $2,001,188 $2,099,246 $2,202,109 $2,310,012 $2,423,203 $2,541,940 $2,666,495 $2,797,153 $2,934,213 $3,077,990 18.70%
Food & Beverage $1,415,396 $1,670,344 $1,946,879 $2,246,504 $2,356,583 $2,472,055 $2,593,186 $2,720,252 $2,853,544 $2,993,368 $3,140,043 $3,293,905 $3,455,307 $3,624,617 $3,802,223 23.10%
Telephone & Other $238,963 $282,006 $328,694 $379,280 $397,865 $417,360 $437,811 $459,263 $481,767 $505,374 $530,137 $556,114 $583,363 $611,948 $641,934 3.90%
Total Dept. Expenses $2,800,156 $3,304,534 $3,851,618 $4,444,382 $4,662,157 $4,890,603 $5,130,242 $5,381,624 $5,645,324 $5,921,945 $6,212,120 $6,516,514 $6,835,823 $7,170,778 $7,522,146 45.70%
Other Expenses:
General & Admin. $533,071 $608,362 $733,240 $846,086 $887,544 $931,034 $976,654 $1,024,511 $1,074,712 $1,127,372 $1,182,614 $1,240,562 $1,301,349 $1,365,115 $1,432,006 8.70%
Sales & Marketing $471,799 $556,781 $648,960 $748,835 $785,528 $824,018 $864,395 $906,751 $951,181 $997,789 $1,046,681 $1,097,968 $1,151,769 $1,208,206 $1,267,408 7.70%
Repairs & Maintenance $453,417 $535,089 $623,676 $719,659 $754,923 $791,914 $830,718 $871,423 $914,122 $958,914 $1,005,901 $1,055,190 $1,106,895 $1,161,133 $1,218,028 7.40%
Utilities $349,254 $412,163 $480,399 $554,332 $581,494 $609,988 $639,877 $671,231 $704,121 $738,623 $774,816 $812,782 $852,608 $894,386 $938,211 5.70%
Fees & Services $214,454 $253,082 $294,982 $340,379 $357,058 $374,554 $392,907 $412,159 $432,355 $453,541 $475,764 $499,077 $523,531 $549,184 $576,094 3.50%
Insurance $85,782 $101,233 $117,993 $136,152 $142,823 $149,822 $157,163 $164,864 $172,942 $181,416 $190,306 $199,631 $209,413 $219,674 $230,438 1.40%
Total Other Expenses $2,107,776 $2,466,710 $2,899,249 $3,345,443 $3,509,370 $3,681,329 $3,861,714 $4,050,938 $4,249,434 $4,457,656 $4,676,081 $4,905,209 $5,145,565 $5,397,697 $5,662,185 34.40%
Replacement Reserve $- $- $- $- $- $- $- $- $- $- $- $- $- $- $-
Real Estate/ Property Tax $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 $424,969 1.51%
Total Expenses $5,332,901 $6,196,213 $7,175,836 $8,214,794 $8,596,496 $8,996,900 $9,416,925 $9,857,531 $10,319,727 $10,804,570 $11,313,170 $11,846,692 $12,406,356 $12,993,444 $13,609,300
Net Operating Income
Total Annual Revenues $6,127,256 $7,230,928 $8,428,049 $9,725,125 $10,201,657 $10,701,538 $11,225,913 $11,775,983 $12,353,006 $12,958,303 $13,593,260 $14,259,330 $14,958,037 $15,690,981 $16,459,839
Total Annual Expenses $5,332,901 $6,196,213 $7,175,836 $8,214,794 $8,596,496 $8,996,900 $9,416,925 $9,857,531 $10,319,727 $10,804,570 $11,313,170 $11,846,692 $12,406,356 $12,993,444 $13,609,300
Net Operating Income $794,355 $1,034,715 $1,252,213 $1,510,331 $1,605,161 $1,704,637 $1,808,988 $1,918,452 $2,033,279 $2,153,734 $2,280,090 $2,412,638 $2,551,681 $2,697,536 $2,850,539
* Other expenses are treated as 50% variable and 50% fixed (fixed costs taken from Year 4, first year of stabilized occupancy).
** Inflation was disregarded in this pro forma as most of the projected numbers are linked to gross revenue, which incorporates ADR growth at 4.9% CAGR
A-5
Appendix C (continued)
Hotel 15 Year Cash Flow Pro Forma (Realistic Scenario)
Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 Yr10 Yr11 Yr12 Yr13 Yr14 Yr15 $28,125,000
Net Operating Income $794,355 $1,034,715 $1,252,213 $1,510,331 $1,605,161 $1,704,637 $1,808,988 $1,918,452 $2,033,279 $2,153,734 $2,280,090 $2,412,638 $2,551,681 $2,697,536 $2,850,539
Annual Debt Service $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066 $2,054,066
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
Taxable Income $(2,197,211) $(1,956,851) $(1,739,353) $(1,481,235) $(1,386,406) $(1,286,929) $(1,182,578) $(1,073,115) $(958,287) $(837,833) $(711,476) $(578,929) $(439,886) $(294,030) $(141,027)
Net Income After Taxes $(2,197,211) $(1,956,851) $(1,739,353) $(1,481,235) $(1,386,406) $(1,286,929) $(1,182,578) $(1,073,115) $(958,287) $(837,833) $(711,476) $(578,929) $(439,886) $(294,030) $(141,027)
Profit Margin -35.86% -27.06% -20.64% -15.23% -13.59% -12.03% -10.53% -9.11% -7.76% -6.47% -5.23% -4.06% -2.94% -1.87% -0.86%
Net Income After Taxes $(2,197,211) $(1,956,851) $(1,739,353) $(1,481,235) $(1,386,406) $(1,286,929) $(1,182,578) $(1,073,115) $(958,287) $(837,833) $(711,476) $(578,929) $(439,886) $(294,030) $(141,027)
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
Annual Cash Flow $(1,259,711) $(1,019,351) $(801,853) $(543,735) $(448,906) $(349,429) $(245,078) $(135,615) $(20,787) $99,667 $226,024 $358,571 $497,614 $643,470 $796,473
* Depreciation is calculated as 30 year straight-line.

** Income tax was ignored in this model as it is unknown what type of an entity will own and manage the hotel and what tax bracket would be applicable. Income tax can also be ignored because of negative net income through the analyzed period.
A-6
Appendix D
Hotel 15 Year Cash Flow Pro Forma (Optimistic Scenario)
Hotel 15 Year Cash Flow Pro Forma Optimistic Scenario
Revenues:
Number of Rooms 150 150 150 150 150 150 150 150 150 150 150 150 150 150 150
Other Revenue:
Food & Beverage $3,025,333 $3,490,932 $3,994,895 $4,539,865 $4,762,319 $4,995,672 $5,240,460 $5,497,243 $5,766,608 $6,049,172 $6,345,581 $6,656,514 $6,982,684 $7,324,835 $7,683,752 39.50%
Telephone & Other $390,613 $450,728 $515,797 $586,160 $614,882 $645,011 $676,616 $709,771 $744,549 $781,032 $819,303 $859,449 $901,562 $945,738 $992,079 5.10%
Annual Expenses
Rooms $1,432,246 $1,652,669 $1,891,254 $2,149,253 $2,254,566 $2,365,040 $2,480,927 $2,602,492 $2,730,014 $2,863,785 $3,004,110 $3,151,312 $3,305,726 $3,467,707 $3,637,624 18.70%
Food & Beverage $1,769,245 $2,041,532 $2,336,255 $2,654,959 $2,785,052 $2,921,520 $3,064,674 $3,214,843 $3,372,371 $3,537,617 $3,710,960 $3,892,797 $4,083,544 $4,283,638 $4,493,536 23.10%
Telephone & Other $298,704 $344,674 $394,433 $448,240 $470,204 $493,244 $517,413 $542,766 $569,361 $597,260 $626,526 $657,225 $689,430 $723,212 $758,649 3.90%
Other Expenses:
General & Admin. $666,339 $744,391 $879,888 $999,920 $1,048,916 $1,100,313 $1,154,228 $1,210,785 $1,270,114 $1,332,349 $1,397,634 $1,466,118 $1,537,958 $1,613,318 $1,692,371 8.70%
Sales & Marketing $589,748 $680,511 $778,752 $884,986 $928,351 $973,840 $1,021,558 $1,071,614 $1,124,124 $1,179,206 $1,236,987 $1,297,599 $1,361,181 $1,427,879 $1,497,845 7.70%
Repairs & Maintenance $566,771 $653,997 $748,411 $850,506 $892,181 $935,898 $981,757 $1,029,863 $1,080,327 $1,133,263 $1,188,792 $1,247,043 $1,308,148 $1,372,248 $1,439,488 7.40%
Utilities $436,567 $503,755 $576,479 $655,120 $687,221 $720,894 $756,218 $793,273 $832,143 $872,918 $915,691 $960,560 $1,007,628 $1,057,002 $1,108,795 5.70%
Fees & Services $268,067 $309,323 $353,978 $402,267 $421,978 $442,655 $464,345 $487,097 $510,965 $536,003 $562,267 $589,818 $618,719 $649,036 $680,839 3.50%
Insurance $107,227 $123,729 $141,591 $160,907 $168,791 $177,062 $185,738 $194,839 $204,386 $214,401 $224,907 $235,927 $247,488 $259,614 $272,336 1.40%
Total Expenses $6,559,884 $7,479,550 $8,526,009 $9,631,126 $10,082,228 $10,555,434 $11,051,826 $11,572,542 $12,118,773 $12,691,770 $13,292,843 $13,923,369 $14,584,791 $15,278,622 $16,006,451
Net Operating Income $1,099,186 $1,358,252 $1,587,649 $1,862,204 $1,974,275 $2,091,838 $2,215,162 $2,344,528 $2,480,234 $2,622,589 $2,771,919 $2,928,566 $3,092,890 $3,265,265 $3,446,086
** Inflation was disregarded in this pro forma as most of the projected numbers are linked to gross revenue, which incorporates ADR growth at 4.9% CAGR.
A-7
Appendix D (continued)
Hotel 15 Year Cash Flow Pro Forma (Optimistic Scenario)
Net Operating Income $1,099,186 $1,358,252 $1,587,649 $1,862,204 $1,974,275 $2,091,838 $2,215,162 $2,344,528 $2,480,234 $2,622,589 $2,771,919 $2,928,566 $3,092,890 $3,265,265 $3,446,086
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
Taxable Income $(1,892,380) $(1,633,315) $(1,403,917) $(1,129,363) $(1,017,291) $(899,728) $(776,405) $(647,038) $(511,333) $(368,978) $(219,648) $(63,000) $101,323 $273,698 $454,520
Net Income After Taxes $(1,892,380) $(1,633,315) $(1,403,917) $(1,129,363) $(1,017,291) $(899,728) $(776,405) $(647,038) $(511,333) $(368,978) $(219,648) $(63,000) $101,323 $273,698 $454,520
Profit Margin -24.71% -18.48% -13.88% -9.83% -8.44% -7.11% -5.85% -4.65% -3.50% -2.41% -1.37% -0.37% 0.57% 1.48% 2.34%
Net Income After Taxes $(1,892,380) $(1,633,315) $(1,403,917) $(1,129,363) $(1,017,291) $(899,728) $(776,405) $(647,038) $(511,333) $(368,978) $(219,648) $(63,000) $101,323 $273,698 $454,520
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
Annual Cash Flow $(954,880) $(695,815) $(466,417) $(191,863) $(79,791) $37,772 $161,095 $290,462 $426,167 $568,522 $717,852 $874,500 $1,038,823 $1,211,198 $1,392,020

** Income tax was ignored in this model as it is unknown what type of an entity will own and manage the hotel and what tax bracket would be applicable. Income tax can also be ignored because of negative net income through most of the analyzed period.
A-8
Appendix E
Hotel 15 Year Cash Flow Pro Forma (Pessimistic Scenario)
Hotel 15 Year Cash Flow Pro Forma Pessimistic Scenario

Revenues:
Number of Rooms 150 150 150 150 150 150 150 150 150 150 150 150 150 150 150
Other Revenue:
Food & Beverage $1,815,200 $2,221,502 $2,663,263 $3,142,984 $3,296,990 $3,458,542 $3,628,011 $3,805,784 $3,992,267 $4,187,888 $4,393,095 $4,608,356 $4,834,166 $5,071,040 $5,319,521 39.50%
Telephone & Other $234,368 $286,827 $343,864 $405,803 $425,687 $446,546 $468,427 $491,380 $515,457 $540,715 $567,210 $595,003 $624,158 $654,742 $686,824 5.10%
Annual Expenses
Rooms $859,348 $1,051,698 $1,260,836 $1,487,944 $1,560,853 $1,637,335 $1,717,565 $1,801,725 $1,890,010 $1,982,620 $2,079,769 $2,181,677 $2,288,580 $2,400,720 $2,518,355 18.70%
Food & Beverage $1,061,547 $1,299,157 $1,557,503 $1,838,049 $1,928,113 $2,022,591 $2,121,698 $2,225,661 $2,334,718 $2,449,119 $2,569,126 $2,695,013 $2,827,069 $2,965,595 $3,110,910 23.10%
Telephone & Other $179,222 $219,338 $262,955 $310,320 $325,526 $341,476 $358,209 $375,761 $394,173 $413,488 $433,749 $455,002 $477,297 $500,685 $525,218 3.90%
Other Expenses:
General & Admin. $399,803 $472,333 $586,592 $692,252 $726,172 $761,755 $799,081 $838,236 $879,309 $922,396 $967,593 $1,015,005 $1,064,740 $1,116,913 $1,171,641 8.70%
Sales & Marketing $353,849 $433,052 $519,168 $612,683 $642,704 $674,197 $707,233 $741,887 $778,239 $816,373 $856,375 $898,338 $942,356 $988,532 $1,036,970 7.70%
Repairs & Maintenance $340,063 $416,180 $498,940 $588,812 $617,664 $647,929 $679,678 $712,982 $747,918 $784,566 $823,010 $863,338 $905,641 $950,018 $996,568 7.40%
Utilities $261,940 $320,571 $384,319 $453,544 $475,768 $499,081 $523,536 $549,189 $576,099 $604,328 $633,940 $665,003 $697,588 $731,770 $767,627 5.70%
Fees & Services $160,840 $196,842 $235,985 $278,492 $292,138 $306,453 $321,469 $337,221 $353,745 $371,079 $389,262 $408,335 $428,344 $449,333 $471,350 3.50%
Insurance $64,336 $78,737 $94,394 $111,397 $116,855 $122,581 $128,588 $134,889 $141,498 $148,431 $155,705 $163,334 $171,338 $179,733 $188,540 1.40%
Total Expenses $4,105,918 $4,912,877 $5,825,662 $6,798,462 $7,110,763 $7,438,367 $7,782,024 $8,142,520 $8,520,680 $8,917,370 $9,333,497 $9,770,015 $10,227,922 $10,708,267 $11,212,149
Net Operating Income $489,524 $711,178 $916,777 $1,158,458 $1,236,046 $1,317,436 $1,402,814 $1,492,375 $1,586,325 $1,684,879 $1,788,261 $1,896,709 $2,010,472 $2,129,808 $2,254,992
** Inflation was disregarded in this pro forma as most of the projected numbers are linked to gross revenue, which incorporates ADR growth at 4.9% CAGR.
A-9
Appendix E (Continued)
Hotel 15 Year Cash Flow Pro Forma (Pessimistic Scenario)
Net Operating Income $489,524 $711,178 $916,777 $1,158,458 $1,236,046 $1,317,436 $1,402,814 $1,492,375 $1,586,325 $1,684,879 $1,788,261 $1,896,709 $2,010,472 $2,129,808 $2,254,992
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
Taxable Income $(2,502,042) $(2,280,388) $(2,074,790) $(1,833,108) $(1,755,520) $(1,674,130) $(1,588,752) $(1,499,191) $(1,405,241) $(1,306,688) $(1,203,305) $(1,094,857) $(981,095) $(861,758) $(736,574)
Net Income After Taxes $(2,502,042) $(2,280,388) $(2,074,790) $(1,833,108) $(1,755,520) $(1,674,130) $(1,588,752) $(1,499,191) $(1,405,241) $(1,306,688) $(1,203,305) $(1,094,857) $(981,095) $(861,758) $(736,574)
Profit Margin -54.45% -40.55% -30.77% -23.04% -21.03% -19.12% -17.30% -15.56% -13.90% -12.32% -10.82% -9.38% -8.02% -6.71% -5.47%
Net Income After Taxes $(2,502,042) $(2,280,388) $(2,074,790) $(1,833,108) $(1,755,520) $(1,674,130) $(1,588,752) $(1,499,191) $(1,405,241) $(1,306,688) $(1,203,305) $(1,094,857) $(981,095) $(861,758) $(736,574)
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
Annual Cash Flow $(1,564,542) $(1,342,888) $(1,137,290) $(895,608) $(818,020) $(736,630) $(651,252) $(561,691) $(467,741) $(369,188) $(265,805) $(157,357) $(43,595) $75,742 $200,926

** Income tax was ignored in this model as it is unknown what type of an entity will own and manage the hotel and what tax bracket would be applicable. Income tax can also be ignored because of negative net income through the analyzed period.
A-10
Appendix F
Occupancies & ADRs All MA Hotels '05 - '07
Occupancies & Daily Rates All MA Hotels '05 - '07
$180.00 90
$158.85
$160.00 77.0% 80
72.9%
73.1%
$143.48
$140.00 70
$131.94
$120.00 60
Occupancy Rate (in %)

$102.48 $119.80
Average Daily Rate
$112.7
$100.00 $108.10 50
Af 44.1%
$80.00 43.4% 43.9% 42.3% 40
$60.00 30
$40.00 20
$20.00 10
$0.00 0
Nov 05
Nov 06
Nov 07
Jan 05
Jun 05
Jul 05
Jan 06
Jun 06
Jul 06
Jan 07
Jun 07
Jul 07
Feb 05
Mar 05
Apr 05
Aug 05
Sep 05
Dec 05
Feb 06
Feb 07
May 05
Oct 05
Mar 06
Apr 06
Aug 06
Sep 06
Dec 06
May 06
Oct 06
Mar 07
Apr 07
Aug 07
Sep 07
Dec 07
May 07
Oct 07
ADR OCC
A-11
Appendix G
Hotel Sensitivity Analysis: ADRs/ Development Costs (Realistic Scenario)
SENSITIVITY ANALYSIS Realistic Scenario

Effect of Change in Yr 1 ADRs & Estimated Development Costs on Projected NPV
150 # Rooms
Year 1 Average Daily Rates
$ (18,498,735) 150.00 200.00 250.00 300.00 350.00 400.00 450.00 500.00 550.00 600.00 650.00 700.00 750.00 800.00 850.00 900.00
Lowest End $9,195,000 $4,410,722 $10,061,783 $15,712,844 $21,363,906 $27,014,967 $32,666,028 $38,317,089 $43,968,151 $49,619,212 $55,270,273 $60,921,335 $66,572,396 $72,223,457 $77,874,518 $83,525,580 $89,176,641
40% Mean $11,430,000 $1,639,161 $7,290,222 $12,941,283 $18,592,345 $24,243,406 $29,894,467 $35,545,529 $41,196,590 $46,847,651 $52,498,712 $58,149,774 $63,800,835 $69,451,896 $75,102,957 $80,754,019 $86,405,080
70% Mean $19,777,500 $(8,712,340) $(3,061,279) $2,589,783 $8,240,844 $13,891,905 $19,542,966 $25,194,028 $30,845,089 $36,496,150 $42,147,211 $47,798,273 $53,449,334 $59,100,395 $64,751,456 $70,402,518 $76,053,579
Median
End $24,120,000 $(14,097,353) $(8,446,291) $(2,795,230) $2,855,831 $8,506,892 $14,157,954 $19,809,015 $25,460,076 $31,111,138 $36,762,199 $42,413,260 $48,064,321 $53,715,383 $59,366,444 $65,017,505 $70,668,566
∆ Development Costs
Mean End $28,125,000 $(19,063,841) $(13,412,780) $(7,761,718) $(2,110,657) $3,540,404 $9,191,465 $14,842,527 $20,493,588 $26,144,649 $31,795,710 $37,446,772 $43,097,833 $48,748,894 $54,399,956 $60,051,017 $65,702,078
105%
Mean $29,516,250 $(20,789,091) $(15,138,030) $(9,486,969) $(3,835,907) $1,815,154 $7,466,215 $13,117,277 $18,768,338 $24,419,399 $30,070,460 $35,721,522 $41,372,583 $47,023,644 $52,674,705 $58,325,767 $63,976,828
110%
Mean $30,907,500 $(22,514,341) $(16,863,280) $(11,212,219) $(5,561,157) $89,904 $5,740,965 $11,392,026 $17,043,088 $22,694,149 $28,345,210 $33,996,271 $39,647,333 $45,298,394 $50,949,455 $56,600,517 $62,251,578
120%
Mean $33,690,000 $(25,964,842) $(20,313,780) $(14,662,719) $(9,011,658) $(3,360,596) $2,290,465 $7,941,526 $13,592,587 $19,243,649 $24,894,710 $30,545,771 $36,196,832 $41,847,894 $47,498,955 $53,150,016 $58,801,077
130%
Mean $36,472,500 $(29,415,342) $(23,764,281) $(18,113,219) $(12,462,158) $(6,811,097) $(1,160,035) $4,491,026 $10,142,087 $15,793,148 $21,444,210 $27,095,271 $32,746,332 $38,397,393 $44,048,455 $49,699,516 $55,350,577
140%
Mean $39,255,000 $(32,865,842) $(27,214,781) $(21,563,720) $(15,912,658) $(10,261,597) $(4,610,536) $1,040,525 $6,691,587 $12,342,648 $17,993,709 $23,644,771 $29,295,832 $34,946,893 $40,597,954 $46,249,016 $51,900,077
150%
Mean $42,037,500 $(36,316,342) $(30,665,281) $(25,014,220) $(19,363,159) $(13,712,097) $(8,061,036) $(2,409,975) $3,241,086 $8,892,148 $14,543,209 $20,194,270 $25,845,331 $31,496,393 $37,147,454 $42,798,515 $48,449,577
175%
Mean $48,993,750 $(44,942,593) $(39,291,532) $(33,640,471) $(27,989,409) $(22,338,348) $(16,687,287) $(11,036,226) $(5,385,164) $265,897 $5,916,958 $11,568,019 $17,219,081 $22,870,142 $28,521,203 $34,172,265 $39,823,326
200%
Mean $55,950,000 $(53,568,844) $(47,917,783) $(42,266,721) $(36,615,660) $(30,964,599) $(25,313,538) $(19,662,476) $(14,011,415) $(8,360,354) $(2,709,293) $2,941,769 $8,592,830 $14,243,891 $19,894,952 $25,546,014 $31,197,075
Highest
End $80,895,000 $(84,502,440) $(78,851,378) $(73,200,317) $(67,549,256) $(61,898,195) $(56,247,133) $(50,596,072) $(44,945,011) $(39,293,950) $(33,642,888) $(27,991,827) $(22,340,766) $(16,689,705) $(11,038,643) $(5,387,582) $263,479
A-12
Appendix H
Hotel Sensitivity Analysis: ADRs/ Development Costs (Optimistic Scenario)
SENSITIVITY ANALYSIS Optimistic Scenario

150 # Rooms

$(15,169,972) 150.00 200.00 250.00 300.00 350.00 400.00 450.00 500.00 550.00 600.00 650.00 700.00 750.00 800.00 850.00 900.00
Lowest End $9,195,000 $7,632,105 $14,356,961 $21,081,817 $27,806,673 $34,531,528 $41,256,384 $47,981,240 $54,706,096 $61,430,951 $68,155,807 $74,880,663 $81,605,519 $88,330,374 $95,055,230 $101,780,086 $108,504,942
40% Mean $11,430,000 $4,860,544 $11,585,400 $18,310,256 $25,035,112 $31,759,967 $38,484,823 $45,209,679 $51,934,535 $58,659,390 $65,384,246 $72,109,102 $78,833,958 $85,558,813 $92,283,669 $99,008,525 $105,733,381
70% Mean $19,777,500 $(5,490,957) $1,233,899 $7,958,755 $14,683,611 $21,408,466 $28,133,322 $34,858,178 $41,583,034 $48,307,889 $55,032,745 $61,757,601 $68,482,457 $75,207,312 $81,932,168 $88,657,024 $95,381,880
Median End $24,120,000 $(10,875,969) $(4,151,113) $2,573,742 $9,298,598 $16,023,454 $22,748,310 $29,473,165 $36,198,021 $42,922,877 $49,647,733 $56,372,588 $63,097,444 $69,822,300 $76,547,156 $83,272,011 $89,996,867
Mean End $28,125,000 $(15,842,457) $(9,117,602) $(2,392,746) $4,332,110 $11,056,966 $17,781,821 $24,506,677 $31,231,533 $37,956,389 $44,681,244 $51,406,100 $58,130,956 $64,855,812 $71,580,667 $78,305,523 $85,030,379
105% Mean $29,516,250 $(17,567,708) $(10,842,852) $(4,117,996) $2,606,860 $9,331,715 $16,056,571 $22,781,427 $29,506,283 $36,231,138 $42,955,994 $49,680,850 $56,405,706 $63,130,561 $69,855,417 $76,580,273 $83,305,129
110% Mean $30,907,500 $(19,292,958) $(12,568,102) $(5,843,246) $881,610 $7,606,465 $14,331,321 $21,056,177 $27,781,033 $34,505,888 $41,230,744 $47,955,600 $54,680,456 $61,405,311 $68,130,167 $74,855,023 $81,579,879
120% Mean $33,690,000 $(22,743,458) $(16,018,602) $(9,293,747) $(2,568,891) $4,155,965 $10,880,821 $17,605,676 $24,330,532 $31,055,388 $37,780,244 $44,505,099 $51,229,955 $57,954,811 $64,679,667 $71,404,522 $78,129,378
130% Mean $36,472,500 $(26,193,958) $(19,469,103) $(12,744,247) $(6,019,391) $705,465 $7,430,320 $14,155,176 $20,880,032 $27,604,888 $34,329,743 $41,054,599 $47,779,455 $54,504,311 $61,229,166 $67,954,022 $74,678,878
140% Mean $39,255,000 $(29,644,459) $(22,919,603) $(16,194,747) $(9,469,891) $(2,745,036) $3,979,820 $10,704,676 $17,429,532 $24,154,387 $30,879,243 $37,604,099 $44,328,955 $51,053,810 $57,778,666 $64,503,522 $71,228,378
150% Mean $42,037,500 $(33,094,959) $(26,370,103) $(19,645,247) $(12,920,392) $(6,195,536) $529,320 $7,254,176 $13,979,031 $20,703,887 $27,428,743 $34,153,599 $40,878,454 $47,603,310 $54,328,166 $61,053,022 $67,777,877
175% Mean $48,993,750 $(41,721,210) $(34,996,354) $(28,271,498) $(21,546,643) $(14,821,787) $(8,096,931) $(1,372,075) $5,352,780 $12,077,636 $18,802,492 $25,527,348 $32,252,204 $38,977,059 $45,701,915 $52,426,771 $59,151,627
200% Mean $55,950,000 $(50,347,461) $(43,622,605) $(36,897,749) $(30,172,893) $(23,448,038) $(16,723,182) $(9,998,326) $(3,273,470) $3,451,385 $10,176,241 $16,901,097 $23,625,953 $30,350,808 $37,075,664 $43,800,520 $50,525,376
Highest End $80,895,000 $(81,281,056) $(74,556,201) $(67,831,345) $(61,106,489) $(54,381,633) $(47,656,778) $(40,931,922) $(34,207,066) $(27,482,210) $(20,757,355) $(14,032,499) $(7,307,643) $(582,787) $6,142,068 $12,866,924 $19,591,780
A-13
Appendix I
Hotel Sensitivity Analysis: ADRs/ Development Costs (Pessimistic Scenario)
SENSITIVITY ANALYSIS Pessimistic Scenario

150 # Rooms
$(21,827,498) 150.00 200.00 250.00 300.00 350.00 400.00 450.00 500.00 550.00 600.00 650.00 700.00 750.00 800.00 850.00 900.00
Lowest End $9,195,000 $1,189,338 $5,766,605 $10,343,872 $14,921,139 $19,498,406 $24,075,672 $28,652,939 $33,230,206 $37,807,473 $42,384,739 $46,962,006 $51,539,273 $56,116,540 $60,693,807 $65,271,073 $69,848,340
40% Mean $11,430,000 $(1,582,222) $2,995,044 $7,572,311 $12,149,578 $16,726,845 $21,304,111 $25,881,378 $30,458,645 $35,035,912 $39,613,179 $44,190,445 $48,767,712 $53,344,979 $57,922,246 $62,499,512 $67,076,779
70% Mean $19,777,500 $(11,933,723) $(7,356,457) $(2,779,190) $1,798,077 $6,375,344 $10,952,610 $15,529,877 $20,107,144 $24,684,411 $29,261,678 $33,838,944 $38,416,211 $42,993,478 $47,570,745 $52,148,011 $56,725,278
Median End $24,120,000 $(17,318,736) $(12,741,469) $(8,164,202) $(3,586,936) $990,331 $5,567,598 $10,144,865 $14,722,131 $19,299,398 $23,876,665 $28,453,932 $33,031,199 $37,608,465 $42,185,732 $46,762,999 $51,340,266
Mean End $28,125,000 $(22,285,224) $(17,707,958) $(13,130,691) $(8,553,424) $(3,976,157) $601,110 $5,178,376 $9,755,643 $14,332,910 $18,910,177 $23,487,443 $28,064,710 $32,641,977 $37,219,244 $41,796,511 $46,373,777
105% Mean $29,516,250 $(24,010,475) $(19,433,208) $(14,855,941) $(10,278,674) $(5,701,407) $(1,124,141) $3,453,126 $8,030,393 $12,607,660 $17,184,927 $21,762,193 $26,339,460 $30,916,727 $35,493,994 $40,071,260 $44,648,527
110% Mean $30,907,500 $(25,735,725) $(21,158,458) $(16,581,191) $(12,003,924) $(7,426,658) $(2,849,391) $1,727,876 $6,305,143 $10,882,410 $15,459,676 $20,036,943 $24,614,210 $29,191,477 $33,768,743 $38,346,010 $42,923,277
120% Mean $33,690,000 $(29,186,225) $(24,608,958) $(20,031,691) $(15,454,425) $(10,877,158) $(6,299,891) $(1,722,624) $2,854,642 $7,431,909 $12,009,176 $16,586,443 $21,163,710 $25,740,976 $30,318,243 $34,895,510 $39,472,777
130% Mean $36,472,500 $(32,636,725) $(28,059,458) $(23,482,192) $(18,904,925) $(14,327,658) $(9,750,391) $(5,173,125) $(595,858) $3,981,409 $8,558,676 $13,135,943 $17,713,209 $22,290,476 $26,867,743 $31,445,010 $36,022,276
140% Mean $39,255,000 $(36,087,226) $(31,509,959) $(26,932,692) $(22,355,425) $(17,778,158) $(13,200,892) $(8,623,625) $(4,046,358) $530,909 $5,108,175 $9,685,442 $14,262,709 $18,839,976 $23,417,243 $27,994,509 $32,571,776
150% Mean $42,037,500 $(39,537,726) $(34,960,459) $(30,383,192) $(25,805,926) $(21,228,659) $(16,651,392) $(12,074,125) $(7,496,858) $(2,919,592) $1,657,675 $6,234,942 $10,812,209 $15,389,475 $19,966,742 $24,544,009 $29,121,276
175% Mean $48,993,750 $(48,163,977) $(43,586,710) $(39,009,443) $(34,432,176) $(29,854,910) $(25,277,643) $(20,700,376) $(16,123,109) $(11,545,842) $(6,968,576) $(2,391,309) $2,185,958 $6,763,225 $11,340,491 $15,917,758 $20,495,025
200% Mean $55,950,000 $(56,790,227) $(52,212,961) $(47,635,694) $(43,058,427) $(38,481,160) $(33,903,894) $(29,326,627) $(24,749,360) $(20,172,093) $(15,594,826) $(11,017,560) $(6,440,293) $(1,863,026) $2,714,241 $7,291,507 $11,868,774
Highest
End $80,895,000 $(87,723,823) $(83,146,556) $(78,569,290) $(73,992,023) $(69,414,756) $(64,837,489) $(60,260,223) $(55,682,956) $(51,105,689) $(46,528,422) $(41,951,155) $(37,373,889) $(32,796,622) $(28,219,355) $(23,642,088) $(19,064,822)
A-14
Appendix J
Financial Assumptions Made by HII (Hotel)
A-15
Appendix K
HVS Hotel Development Cost Forecasted Per-Room Averages (2007)
A-16
Appendix L
HVS Hotel Development Cost Actual Per-Room Cost Ranges (2004-2006)
http://www.hospitalitynet.org/file/152003166.pdf
A-17
Appendix M
Hotel Discounted Cash Flow Analysis: Operating Cash Flow (Realistic Scenario)
Discounted Cash Flow Analysis (Operating Cash Flow) Realistic Scenario

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Capital Expenditure $(28,125,000)
Gross Revenue $6,127,256 $7,230,928 $8,428,049 $9,725,125 $10,201,657 $10,701,538 $11,225,913 $11,775,983 $12,353,006 $12,958,303 $13,593,260 $14,259,330 $14,958,037 $15,690,981 $16,459,839
Costs $(5,332,901) $(6,196,213) $(7,175,836) $(8,214,794) $(8,596,496) $(8,996,900) $(9,416,925) $(9,857,531) $(10,319,727) $(10,804,570) $(11,313,170) $(11,846,692) $(12,406,356) $(12,993,444) $(13,609,300)
Depreciation $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500)
EBIT $(143,145) $97,215 $314,713 $572,831 $667,661 $767,137 $871,488 $980,952 $1,095,779 $1,216,234 $1,342,590 $1,475,138 $1,614,181 $1,760,036 $1,913,039
Property Tax $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969)
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
After Tax Cash Flow $369,387 $609,746 $827,244 $1,085,362 $1,180,192 $1,279,669 $1,384,019 $1,493,483 $1,608,311 $1,728,765 $1,855,121 $1,987,669 $2,126,712 $2,272,568 $2,425,570
Working Capital $(1,140,000)
Terminal Project Value $2,168,285
Incremental Cash Flow $(27,096,715) $369,387 $609,746 $827,244 $1,085,362 $1,180,192 $1,279,669 $1,384,019 $1,493,483 $1,608,311 $1,728,765 $1,855,121 $1,987,669 $2,126,712 $2,272,568 $2,425,570
PV $(27,096,715) $331,705 $491,689 $599,027 $705,761 $689,139 $670,999 $651,685 $631,490 $610,671 $589,446 $568,003 $546,504 $525,084 $503,857 $482,920
* The model does not include periodic renovation expenses.

** Terminal project value is estimated as incremental cash flow in Year 15 multiplied by 5 and discounted at WACC.
A-18
Appendix N
Hotel Discounted Cash Flow Analysis: Operating Cash Flow (Optimistic Scenario)
Discounted Cash Flow Analysis (Operating Cash Flow) Optimistic Scenario

Gross Revenue $7,659,070 $8,837,801 $10,113,658 $11,493,330 $12,056,503 $12,647,272 $13,266,988 $13,917,071 $14,599,007 $15,314,358 $16,064,762 $16,851,935 $17,677,680 $18,543,886 $19,452,537
Costs $(6,559,884) $(7,479,550) $(8,526,009) $(9,631,126) $(10,082,228) $(10,555,434) $(11,051,826) $(11,572,542) $(12,118,773) $(12,691,770) $(13,292,843) $(13,923,369) $(14,584,791) $(15,278,622) $(16,006,451)
Depreciation $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500)
EBIT $161,686 $420,752 $650,149 $924,704 $1,036,775 $1,154,338 $1,277,662 $1,407,028 $1,542,734 $1,685,089 $1,834,419 $1,991,066 $2,155,390 $2,327,765 $2,508,586
Property Tax $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969)
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
After Tax Cash Flow $674,218 $933,283 $1,162,681 $1,437,235 $1,549,307 $1,666,870 $1,790,193 $1,919,560 $2,055,265 $2,197,620 $2,346,950 $2,503,598 $2,667,921 $2,840,296 $3,021,117
Incremental Cash Flow $(26,564,339) $674,218 $933,283 $1,162,681 $1,437,235 $1,549,307 $1,666,870 $1,790,193 $1,919,560 $2,055,265 $2,197,620 $2,346,950 $2,503,598 $2,667,921 $2,840,296 $3,021,117
PV $(26,564,339) $605,440 $752,584 $841,924 $934,568 $904,672 $874,030 $842,937 $811,648 $780,378 $749,308 $718,592 $688,357 $658,708 $629,730 $601,491

A-19
Appendix O
Hotel Discounted Cash Flow Analysis: Operating Cash Flow (Pessimistic Scenario)
Discounted Cash Flow Analysis (Operating Cash Flow) Pessimistic Scenario

Gross Revenue $4,595,442 $5,624,055 $6,742,439 $7,956,921 $8,346,810 $8,755,804 $9,184,838 $9,634,895 $10,107,005 $10,602,248 $11,121,758 $11,666,724 $12,238,394 $12,838,075 $13,467,141
Costs $(4,105,918) $(4,912,877) $(5,825,662) $(6,798,462) $(7,110,763) $(7,438,367) $(7,782,024) $(8,142,520) $(8,520,680) $(8,917,370) $(9,333,497) $(9,770,015) $(10,227,922) $(10,708,267) $(11,212,149)
Depreciation $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500) $(937,500)
EBIT $(447,976) $(226,322) $(20,723) $220,958 $298,546 $379,936 $465,314 $554,875 $648,825 $747,379 $850,761 $959,209 $1,072,972 $1,192,308 $1,317,492
Property Tax $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969) $(424,969)
Depreciation $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500 $937,500
After Tax Cash Flow $64,556 $286,210 $491,808 $733,490 $811,078 $892,467 $977,845 $1,067,407 $1,161,356 $1,259,910 $1,363,292 $1,471,741 $1,585,503 $1,704,839 $1,830,024
Incremental Cash Flow $(27,629,091) $64,556 $286,210 $491,808 $733,490 $811,078 $892,467 $977,845 $1,067,407 $1,161,356 $1,259,910 $1,363,292 $1,471,741 $1,585,503 $1,704,839 $1,830,024
PV $(27,629,091) $57,970 $230,795 $356,129 $476,955 $473,605 $467,969 $460,432 $451,332 $440,963 $429,583 $417,415 $404,651 $391,460 $377,985 $364,350

A-20
Appendix P
Hotel Break-even (Realistic Scenario)
Break-even Analysis
Year 1
Revenue $6,127,256
Variable Expenses $3,559,057.41

Contribution Margin 2,568,199
Fixed Costs $2,097,690

Depreciation $937,500
Fixed Costs and
Depreciation $3,035,190
CM Ratio 41.91%
Total Revenue Required to
Break-even $7,241,413.06
Break-even occupancy rate
assuming ADR $150 118.18%
Break-even Analysis
Year 5
Revenue $10,201,657


Fixed Costs and
CM Ratio 36.30%
Break-even $8,362,196.42
A-21
Appendix Q
Hotel Break-even (Optimistic Scenario)
Break-even Analysis Optimistic Scenario

Year 1
Revenue $7,659,070


Fixed Costs and Depreciation $3,339,322
CM Ratio 40.71%
Break-even $8,201,989.40
Break-even Analysis Optimistic Scenario

Year 5
Revenue $12,056,503


Fixed Costs and Depreciation $3,339,322
CM Ratio 36.30%
Break-even $9,200,102.62
A-22
Appendix R
Hotel Break-even (Pessimistic Scenario)
Break-even Analysis Pessimistic Scenario

Year 1
Revenue $4,595,442


Fixed Costs and
CM Ratio 43.92%
Break-even $6,218,875.69
Break-even Analysis Pessimistic Scenario

Year 5
Revenue $8,346,810


Fixed Costs and
CM Ratio 36.30%
Break-even $7,524,290.22
A-23
Appendix S
Hotel Development Costs at Various Grade Levels
Development Costs Budget/Economy Hotels Development Costs

(per room) Number of Rooms 150
Mean High Low Median Construction $7,500,000
$50,000 $ 83,800 $ 27,300 $ 45,500 Building Soft Costs $690,000
$4,600 $ 13,200 $ 600 $ 2,400 FFE $1,365,000
$9,100 $ 16,900 $ 4,500 $ 9,100 Parking $300,000
Total Development Costs $9,855,000
Development Costs Midscale Hotels w/o F&B Development Costs

$78,100 $ 165,300 $ 47,100 $ 69,000 Building Soft Costs $1,905,000
$12,700 $ 60,400 $ 2,200 $ 9,200 FFE $1,605,000
$10,700 $ 25,000 $ 5,500 $ 10,400 Parking $300,000
Development Costs Extended Stay Hotels Development Costs

$13,300 $ 87,300 $ 2,200 $ 11,500 FFE $2,190,000
$14,600 $ 23,100 $ 3,500 $ 15,000 Parking $300,000
Development Costs Midscale Hotels w/F&B Development Costs

$15,000 $ 61,200 $ 3,300 $ 11,800 FFE $2,115,000
$14,100 $ 34,700 $ 6,600 $ 13,300 Parking $300,000
Development Costs Full-Service Hotels Development Costs

$26,300 $ 122,700 $ 2,300 $ 16,500 FFE $3,795,000
$25,300 $ 51,200 $ 8,300 $ 20,700 Parking $300,000
Development Costs Luxury Hotels and Resorts Development Costs


$386,900 $ 1,369,100 $ 188,700 $ 335,600 Building Soft Costs $18,480,000
$123,200 $ 238,000 $ 26,000 $ 106,000 FFE $9,195,000
$61,300 $ 116,400 $ 33,900 $ 65,400 Parking $300,000
**Based on HVS 2007 estimates**
A-24
Appendix T
HII Hotel 10-Year Cash Flow Pro Forma
A-25
Appendix U
HII Hotel Cash Flow, Supportable Debt/Equity Projections
A-26
Appendix V
HII Hotel Capital Costs / Financial Summary
A-27
Appendix W
LIFESTYLE MARKET ANALYST®
The Lifestyle Market Analyst (LMA) is a consumer market analysis tool that
provides a market potential guide at the local, regional and national levels. The inputs for
the 2007 LMA edition included a sample of 7.3 million households for national data and
13.9 million households for county data. The LMA is a joint venture of SRDS Media
Solutions and Equifax.
The LMA provides a score, centered on the number 100, which measures how
residents in a given geographic area spend their time and money, as compared to the U.S.
population at large. If a given Designated Market Area (DMA) receives a score of 110 in
―Attend Cultural/ Arts Events,‖ this can be interpreted as the rate of household
participation in Attend Cultural Arts/ Events within ______ is 10 percent higher than the
U.S. household rate of participation (110/100 = 10 percent). Similar scores are
generated to measure demographic trends at the local and regional levels.
The U.S. is divided into 210 DMAs, as defined by Nielsen Research. Essentially,
four DMAs lie within the two-hour drive radius of the BSS site.1 The largest of these—
by far—is the Boston, MA (Manchester, NH) DMA. In Appendix W-1, The Team offers
results of aggregate data from the four DMAs, as well as Fairfield County, CT. As data
in W-1 is weighted by DMA populations, consumer lifestyle habits in the Boston, MA
DMA will have a heavy impact on the overall market feasibility analysis. Based on the
way the LMA data is structured, the populations defined as within the two-hour radius
can not exactly match a two-hour radius as defined in the HII study. Nevertheless, the
1
Fairfield County, CT is included within the New York, NY DMA, is within approximately two hours and
is included in The Team’s data sample. All other counties included within the New York, NY DMA lie
outside the two hour radius.
A-28
populations are mostly identical, and the differences between the two populations should
not meaningfully impact the assigned lifestyle and demographic scores.
In performing this analysis, The Team sought to determine if there is an unusually
high market potential centered on the BSS site. It tracked the indicators that seemed most
relevant to the Cold Spring project as presented. These included ―Dieting/ Weight
Control,‖ ―Health/ Natural Foods,‖ ―Improving Your Health,‖ ―Attend Cultural/ Arts
Events‖ and ―Horseback Riding.‖ Additionally, The Team measured ―Real Estate
Investments‖ as a gauge for how easy it might be to attract investors in the area.2
The target area measured below-average for every lifestyle indicator excepting
―Attend Cultural/ Arts events.‖ This strongly damages the assertion that there is unusual
demand for health and wellness services in the region. Area residents do have an affinity
for culture and the arts, and it may make sense to include such components in a plan.
Surprisingly, ―Horseback riding‖ came up well below-average. The target DMAs include
some of the lowest market potential scores for the indicator in the nation.3
The demographic trends are much more encouraging. There is a plethora of high-
income ($75,000-plus), age 45-64 residents within the two-hour radius. This strongly
supports the use of the land towards providing services aimed at those who fit the defined
target demographic characteristics.
The Team believes that Appendix W-5, which measures lifestyle indicators in the
Springfield-Holyoke, MA region, can be particularly useful to the BEDIC.
2
Investment, of course, can stem from anywhere in the world, but The Team believed that if the site or
town itself has a unique and compelling draw to it, local investors would recognize this and, perhaps, be
more inclined to invest. This may not be critical, but The Team figured it could not hurt to measure real
estate investment market potential in the area.
3
The Springfield-Holyoke DMA, where Belchertown is located, ranks 209th out of 210 overall.
A-29
Appendix W-1
LMA® All Target DMAs
Appendix W-1--Lifestyle Market Analyst
ALL TARGET DMAs
Area Population 9,304,860
Top Area Indicators
# Top Ten
Finishes
Snow Skiing Frequently 5 Own an Apple/Mac PC 2
Wines 5 Own a Blackberry 2
Gourmet Cooking/ Fine Foods 4 Frequent Flyer 2
Boating/ Sailing 4 Wildlife/Environmental 1
Casino Gambling 3 Flower Gardening 1
Foreign Travel 3 Vegetable Gardening 1
Attend Cultural/ Arts Events 3 Use a Wireless Internet 1
Tennis Frequently 3 Cruise Ship Vacations 1
Own a Cat 2 Fashion Clothing 1
Shop by Catalog Mail 2 Own an HDTV 1
Needlework/ Knitting 2 Walking for Health 1
50
Key Indicators
Index Nation Avg.

Attend Cultural/ Arts Events 115.47237 100
Real Estate Investments 92.80596 100
Dieting/ Weight Control 98.188055 100
Health/ Natural Foods 97.849085 100
Improving Your Health 98.855277 100
Horseback Riding 67.083832 100
Target Demographic
Index Nation Avg.

45-64, Income $50,000-$74,999 98.797289 100
45-64, Income $75,000+ 130.85616 100
A-30
Appendix W-2
LMA® Boston (Manchester, NH) DMA
DMA: Boston (Manchester, NH)

Encompasses Essex, Middlesex, Norfolk, Plymouth, Suffolk, Worcester, Hillsborough, Rockingham &
Stafford Counties
Top 10 Area Indicators
Index
Snow Skiing Frequently 176
Own an Apple/ Mac PC 136
Foreign Travel 129
Own a Blackberry 124
Frequent Flyer 122
Wines 122
Boating/ Sailing 121
Use a Wireless Internet 120
Attend Cultural/ Arts Events 118
Tennis Frequently 118
Key Indicators
Index Rank (of 210)

Attend Cultural/ Arts Events 118 18
Real Estate Investments 95 83
Dieting/ Weight Control 96 180
Health/ Natural Foods 95 119
Improving Your Health 98 118
Horseback Riding 67 199
Target Demographic
Index
45-64, Income $50,000-$74,999 98
45-64, Income $75,000+ 135
A-31
Appendix W-3
LMA® Hartford & New Haven, CT DMA
DMA: Hartford & New Haven, CT
Encompasses Hartford, Litchfield, Middlesex, New Haven, New London, Tolland & Windham Counties
Index
Wines 124
Gourmet Cooking/ Fine Foods 120
Shop by Catalog/ Mail 113
Casino Gambling 112
Foreign Travel 111
Own a Cat 109
Key Indicators
Index Rank (of 210)

Target Demographic
Index
45-64, Income $50,000-$74,999 102
45-64, Income $75,000+ 133
A-32
Appendix W-4
LMA® Providence, RI – New Bedford, MA DMA
DMA: Providence, RI - New Bedford, MA

Encompasses Bristol, Kent, Newport, Providence & Washington Counties
Index
Casino Gambling 116
Wines 114
Cruise Ship Vacations 113
Fashion Clothing 111
Own an HDTV 110
Needlework/ Knitting 109
Walking for Health 108
Key Indicators
Index Rank (of 210)

Target Demographic
Index
45-64, Income $50,000-$74,999 102
45-64, Income $75,000+ 104
A-33
Appendix W-5
LMA® Springfield-Holyoke, MA DMA
DMA: Springfield-Holyoke, MA
Encompasses Franklin, Hampden & Hampshire Counties
Area Population 539,034
Index
Wildlife/Environmental 116
Own a Cat 114
Casino Gambling 110
Shop by Catalog Mail 109
Wines 108
Flower Gardening 107
Needlework/ Knitting 107
Vegetable Gardening 106
Key Indicators
Index Rank (of 210)

Target Demographic
Index
45-64, Income $50,000-$74,999 110
45-64, Income $75,000+ 99
A-34
Appendix W-6
LMA® New York, NY DMA (Fairfield County, CT Subset)
Fairfield County, CT
Subset of New York, NY DMA
Area Population 679,389
Index
Own a Blackberry 165
Foreign Travel 156
Frequent Flyer 151
Own an Apple/ Mac PC 146
Wines 144
Key Indicators
Index Rank (of 210)

Attend Cultural/ Arts Events 130 --
Real Estate Investments 121 --
Dieting/ Weight Control 94 --
Health/ Natural Foods 105 --
Improving Your Health 110 --
Horseback Riding 82 --
Target Demographic
Index
45-64, Income $50,000-$74,999 80
45-64, Income $75,000+ 171
A-35
Appendix X
MOTT / Strategic MA Market Research Findings
A-36
A-37
Appendix Y
Vacation Spa Locations & Area Resorts
Name Price No. of Hotel classification and on- Market served Area Infrastructure
rooms site activities
Topnotch $195-$595 for deluxe room. 108 Luxury destination resort spa. NYC, Boston, Washington, Stowe, VT
Resort & Spa $245-$645 for executive Weddings, tennis academy (one of D.C., Philadelphia, Green Mountains, Smugglers’ Notch State Park,
room. ―Top 25 Tennis Camps in Chicago, Burlington, Stowe Village, Vermont Ski Museum, Spruce Peak
America‖), skiing, dining, and other Montreal, Toronto, Mountain, Von Trapp Family Lodge, Ben & Jerry’s
outdoor activities. Hartford, Portland, ME Factory, restaurants, shops, outdoor activities.
Stoweflake $122-$264 accommodation 164 Resort & spa. Boston, Hartford, NYC, Stowe, VT
Mountain and breakfast Golf, weddings, outdoor activities, Albany, New Jersey, PA
Resort & Spa skiing, hot air balloon festival.
Equinox $399-$499 Peak 195 Luxury Hotel resort Albany, Hartford, Boston, Manchester Village, VT
Resort $289-$389 Off-season Meeting & event space, golf, school NYC, Brattleboro, Mansions, golf course, art center, resort town (the
(Room only) of falconry, fly fishing, skeet Montreal, Portland, ME Equinox), nearby outlet stores, Green Mountains,
shooting, restaurants, skiing. Emerald Lake State Park
Canyon Ranch $830-$1320 per night, all- 126 Destination resort & spa Lenox, MA
Lenox inclusive, deluxe room. Outdoor, fitness, and healthcare Berkshires, Tanglewood, Norman Rockwell
$757-$1247 per night, spa programs. Museum, Edith Wharton Estate, theaters, shops,
sampler, deluxe room. restaurants, Jacob’s Pillow, Mass MoCA.
Cranwell Resort $195-445 Fall/Winter 114 Resort, Spa, Golf Club NYC, Hartford, Boston, Lenox, MA
$295-565 Spring/Summer 3 restaurants, weddings, Albany, Central NJ,
(single/doubles & suites) meetings/retreats, Providence
Deerfield Spa $360-$595 per night. $850- 33 All inclusive destination spa. New York, East Stroudsburg, PA
$1420 weekly. Some with Was classified as one of best cheap Washington/Baltimore, Located in the Pocono Mountains. Farmers
shared bath. Weekly spas, as well as included in the list New England, Philadelphia, markets, wineries, shopping, restaurants, golf, and
packages include $70 of top 10 destination spas. Pittsburgh outdoor activities throughout the Pocono area.
massage or $150 personal
services.
Mayflower Inn Room rates $450-$700 28 Luxury Inn and spa. Tennis courts, New York City, Albany, Washington, CT
& Spa Suite rates $700-$1,400 putting green, outdoor activities. Boston, Millbrook, New Located in Litchfield County. Attractions include
Was in the list of 10 top destination Jersey, CT, Philadelphia, antiquing, art galleries, restaurants, and theaters.
spas. Stamford, Norwalk, Westport
Kripalu Center $152-437 ―Renewal & Yoga Albany, Boston, Montreal, Lenox, MA
for Yoga Retreat‖ (meals, Focus on women Hartford, NYC, Providence
And Health accommodation, program
activities) Single, double,
dorms (6-22 beds)
A-38
Name Price No. of Hotel classification and on- Market served Area Infrastructure
rooms site activities
Mountain View Single/Double: $129 - $309 145 Resort & Spa Boston, Montreal, Hartford, Whitefield, NH
Grand Suites/Specialty: $409 - $679 Weddings, meetings, golf, outdoor NY, Concord, Burlington, White Mountains and Mt. Washington nearby,
Resort & Spa activities, skiing, movie theater, four Portland, ME Forest Lake State Park, Franconia Notch State Park,
restaurants. resorts.
The Spa at $275 - $375 per night. 44 Destination Spa NYC, NJ, Boston, Lebanon, CT
Grand Lake (Includes 30 min massage, 3 Providence, Hartford Golf; casino gambling (15.4 mi Mohegan; 19.8 mi
meals, fitness classes and full Foxwoods), antiquing, theaters; wineries, flea
use of facilities) markets, farms & state parks; Revolutionary War
Office
Gideon Putnam $129 - $303 per night. 120 Resort & Spa Albany, Buffalo, NYC, Saratoga Springs, NY
Hotel & Spa Golf, located in the center of Boston Roosevelt Mineral Baths and Spa, Saratoga Gaming
Saratoga Spa State Park, outdoor & Raceway, museums, Hall of Springs, Little
activities Theatre, Saratoga Performing Arts Center®.
Copperhood Inn $325 off-peak and $350 peak 16 Inn and spa. Dining, weddings, New York City, Albany Shandaken, NY
& Spa* per person based on double meetings, tennis court, cross country Copperhood is located in the Catskills, which is a
occupancy. Includes skiing, hiking, massage. Was listed huge tourist destination.
accommodations, meals, as a best cheap spa. Rich in restaurants, lodging, outdoor activities, and
meditation and fitness shopping.
programs.
Buttermilk Falls $225-$450 per night. 13 Inn and spa. Weddings, business New York City, Boston, Milton, NY
Inn & Spa retreats, meetings, afternoon tea, Connecticut, Albany In the Hudson Valley. Plenty of museums, theaters,
organic garden and farm. outdoor activities, and restaurants. Major draws
include West Point, Vanderbilt family historical
sites, and FDR.
Mirbeau Inn $359-$410 peak season 34 Inn & Spa NY (all directions NY) Skaneateles, NY
& Spa $265 off-season Award-winning restaurant, boutique, NY's Finger Lakes Wine Country, Golf, summer
(room only) outdoor activities, weddings, day music festival, Christmas festival. boat excursions,
spa groups, meetings inns, restaurants, shopping.
Mirror Lake Inn $305 peak 128 Resort & Spa Albany, Boston, Buffalo, Lake Placid, NY
Resort $250 off-season Family reunions, meetings, three Hartford, Montreal, NJ, Lake Placid was the site of the 1980 Olympics,
& Spa (standard room only) restaurants, fitness center, private NYC, Ottawa, Plattsburgh, Adirondack Mountains, vineyards, golf, shops,
beach, golf, outdoor activities Rochester, Springfield, theater, Adirondack Museum.
Syracuse, Toronto, Utica,
VT
*A review of this destination spa was done because of its designation as one of the ―Best Cheap Destination Spas‖ taken from ―Best Cheap Destination Spas‖ by Anitra Brown,
located at http://spas.about.com/od/destinationspas/a/cheapdestspa.htm.
A-39
Price per Sq. Ft.
0
50
100
150
200
250
300
350
400
Pelham
Amherst
Belchertown
Belchertown
Amherst
Hadley
Belchertown
Hadley
Amherst
Wendell
Amherst
Belchertown
S. Hadley
Amherst
S. Hadley
Pelham
Amherst
Amherst
Amherst
4/14/08
Amherst
Town
Amherst
Amherst
Amherst
Amherst
Amherst
Amherst
Amherst
Leverett
Leverett
Hadley
Amherst
Amherst
New Salem
Leverett
Amherst
List $ per Square Foot, Prudential Sawicki Real Estate Properties
Amherst
Amherst
Amherst
Pelham
A-40
Pioneer Valley Real Estate Properties
Appendix Z
Appendix AA
Former MA State School Property Redevelopments
Specters of old state hospitals vanish as new uses take shape

By Robert Preer, Globe Correspondent | July 8, 2007
Scattered across Massachusetts are imposing brick and stone buildings that resemble
castles, set on hundreds of acres of meadows, fields, and woods -- places once thought to be
ideal for the care of the mentally ill and disabled.
Nearly all of the sprawling state hospitals and schools, once called insane asylums
and other names that sound cruel today, were closed in the 1970s and 1980s as mental health
treatment and residential facilities switched to smaller, group settings. After several decades
of neglect, most of these unusual properties finally are now finally being redeveloped.
Now, from new municipal facilities to retail complexes to sprawling residential

developments, the abandoned hospitals and their grounds are undergoing renovation for an
extraordinary range of uses. One property alone, the former Boston State Hospital in
Dorchester and Mattapan, is host to multiple developments. It already has a new nature
center, state laboratory, and dozens of suburban-style homes, with hundreds more
condominiums and apartments, a fitness center, nursing home, and community garden to
come.
Grafton State Hospital houses a veterinary school. Restaurants and stores are coming
to former state hospitals in Lakeville and Foxborough. Danvers will have an out patient
medical center.
"Each one is its own story," said Peter Norstrand, deputy commissioner of the state
Division of Capital Asset Management, the state agency overseeing the properties. "They are
mostly mixed uses with a preponderance of housing."
Each of the sales took years to accomplish and required legislative votes to transfer
ownership of the properties. Danvers State Hospital sold for $19 million and Metropolitan
State Hospital for $10.6 million; a 50-acre slice of the 1,000-acre Grafton State Hospital
recently sold for nearly $2 million.
"We've certainly generated proceeds, but when you factor in costs of maintaining the
properties over the years, it's hard to say we've made money," said Norstrand.
Among the hospitals being redeveloped:
Boston State Hospital.

At the far end Boston's Emerald Necklace, near Forest Hills Cemetery and Franklin Park, this
250-acre campus was closed in 1979. A light-filled Nature Center for the Massachusetts
Audubon Society, the Massachusetts Medical School biological laboratory, and
A-41
approximately 100 one- and two-family homes are completed. The two residential projects
are a 99-unit mix of single-family housing and duplexes, called Harvard Commons, by Cruz
Development Corp., and Olmsted Green, a 500-unit condominium and apartment complex,
co developed by Lena Park Community Development Corp. and New Boston Fund. The
development also will have a community center, nursing home, and community gardens.
Danvers State Hospital.

This Victorian-era campus was one of the most notorious state mental institutions before its
closure in 1992, and its Gothic setting played host to the shooting of a horror movie in 2001.
AvalonBay Communities Inc. is now building a neighborhood on around 75 acres of the
grounds, including 433 luxury apartments and 64 condominiums. Some are already occupied
but construction on others was delayed when a fire swept through several buildings in May.
Portions of the historic Kirkbride building, with its steeply pitched slate roofs and spires, will
be preserved.
Foxboro State Hospital.

A new public safety building for Foxborough's police and fire departments is already under
construction on this 160-acre property. And site work has begun for Chestnut Green, a 93-
acre community with playing fields, 60,000 square feet of retail space, five office buildings,
and 203 residences, a mix of condominiums, apartments, and single-family. The developers
are VinCo Properties, Intoccia Construction Co., and Douglas A. King Builders Inc.
Grafton State Hospital.

This 1,000-acre property in the central Massachusetts hills near Worcester already has Tufts
Veterinary School on half of it. Also on the property are the Federal Job Corps offices and
residential facilities run by the state Department of Youth Services and state Department of
Mental Retardation. A business park is being developed on 121 acres, and housing is planned
for a 50-acre parcel. The Massachusetts Bay Transportation Authority has a commuter rail
station there, too.
Lakeville State Hospital.

Closed in 1992, this 72-acre property near the Lakeville-Middleborough town line and a
commuter rail station sold for $2.4 million at auction in 2002 to the Newton real estate firm
National Development, with proceeds to fund the state Clean Elections program. The existing
structures are scheduled to be demolished later this year, and National Development is
planning to build a supermarket, department store, restaurant, two office buildings, and 100
units of senior housing.
Metropolitan State Hospital.

AvalonBay won the rights in December 2003 to redevelop a 23-acre portion of this 490-acre
campus near Route 2 in Lexington, Belmont, and Waltham. The company is building 387
apartments on the Lexington land, and about 250 more acres are preserved for open space
and recreation.
Northampton State Hospital.

This 126-acre campus was closed in 1996. Non profit developer Community Builders Inc.
and state agency Mass Development plan to build 100 single-family homes, 107 apartments,
A-42
an assisted-living facility, child-care center, open space, and 476,000 square feet of office,
light industrial, and retail space. Demolition of existing buildings began this year.
Robert Preer can be reached at preer@globe.com.
© Copyright 2007 Globe Newspaper Company.

http://www.boston.com/realestate/news/articles/2007/07/08/specters_of_old_state_hospitals_vanish_as_new_uses_take_shap
A-43
Appendix BB
Alternative Development Suggestions
Note: The Team heard several suggestions for possible land use along the way, and it offers
this list here. The Team in no way endorses any of these specific suggestions; the list is
simply being made available as the BEDIC has asked for such feedback.
 Consider country clubs with residential component.
 Budget private school – look at Northfield, Mt. Herman, Eaglewood, Deerfield

Academy. People send their kids to these schools b/c they’re safe. Some dorm, some
not. Housing for bodyguards. It’s as accessible as the other schools for parents
dropping their kids off.
 Could have a school that fills a niche. Deaf, behavioral, learning disabilities, obesity.
Could also couple it with wellness, psychologists. Could have a summer camp.
 There is very little light manufacturing in Western MA. Industrial/ light industrial/
office park could be a way to go.
 If you’re looking at housing, best way to go is ―non-kid related housing‖ (i.e. condos
with have .3 kids as opposed to .7 kids in single family homes).
 Retail – there is a trend for on-line stores.
 Professional buildings – may be a possibility
 Senior housing – good opportunity
 Town may be better off offering zones and not the whole thing for development.
 The best way thing to build at the BSS site would be commercial – businesses that
bring people and other businesses to the town.
 Believes that there needs to be a diverse business base at the BSS site as it would
bring in the most tax revenue and be the most sustainable. There should be a
residential component, different locally owned businesses, civic component. Possibly
in conjunction with UMass or Bay State Medical (entities that are going to be around
for a long time). Good examples of this are the garden shop and Humes
Transportation (these are business located on the state school site that were sold off
earlier).
 Shopping malls as an alternative: Holyoke mall is very powerful because of little

competition. It serves a very large area.
A-44
Appendix CC
Potential Development Partners
Massachusetts Development Organizations
MassDevelopment
160 Federal Street
Boston, MA 02110
Phone: (800) 445-8030
Services offered to clients include: consensus building, project management, contract
negotiation, site planning oversight, environmental assessment oversight, funding
identification, consultant management, market feasibility, financial analysis, marketing
services, site assemblage management, public/private partnerships, permitting, brownfields
redevelopment.
Westmass Area Development Corporation

255 Padgette Street
Suite One
Chicopee, MA 01022
Phone: (413) 593-6421 * Toll Free: (888) 593-6421
Fax: (413) 593-5126
www.westmassdevelopment.com
The Westmass Area Development Corporation (Westmass) is an experienced regional,
private not-for-profit industrial and business development corporation created to promote and
assist business growth in western Massachusetts. Westmass accomplishes these goals by
developing properly zoned and fully permitted industrial park land resources at the cross
roads of New England in the Knowledge Corridor.
Pioneer Valley Planning Commission

26 Central Street, Suite 34
West Springfield, MA 01089-2787
Phone: (413) 781-6045
Fax: (413) 732-2593
info@pvpc.org
PVPC’s principal responsibilities include:
 Bringing a regional and inter-regional perspective to the region’s transportation,
housing, economic development, historic preservation, pollution control, and resource
management and protection planning.
 Promoting the region’s interests at the state and federal levels.
 Assisting municipalities with technical aid, grant writing assistance, and grant
administration.
 Fostering cooperative efforts among municipalities to achieve better land
development, public service, and financial efficiency.
 Enhancing collaboration between the public and private sectors in the Pioneer Valley
region.
A-45
 Gathering, maintaining, and making available planning-related data.
Massachusetts Office of Business Development

Mike Vedovelli, Regional Director for Pioneer Valley
53 Court St., Suite 203
Westfield, MA 01085
Phone: (413) 562-8780
Fax: (413) 562-2578
The Massachusetts Office of Business Development (MOBD) is committed to assisting
companies who want to locate, expand, grow, or maintain a presence in Massachusetts.
Through nine offices and five industry specialists, MOBD works with companies and
municipalities to help them take advantage of available economic incentive programs.
MOBD also assists companies in navigating and accessing the technical, human, financial,
training, educational and site-finding resources necessary to expand or locate in
Massachusetts.
Retirement communities
Loomis Communities
246 North Main Street, South Hadley MA 01075
Applewood in Amherst
Loomis House at the foot of Mt. Tom
Loomis Village in South Hadley
Phone: (800) 865-7655
Phone: (413) 532-5325
Kendal Corporation
The Kendal Corporation development services staff provides a high level of expertise and
service to not-for-profit organizations interested in developing retirement communities that
will become a part of the not-for-profit Kendal system.
David Jones, Project Director
(610) 335-1245
info@kcorp.kendal.org
The following state hospitals were developed and/or aided by the organizations listed
below: Boston State Hospital, Danvers State Hospital, Foxboro State Hospital, Grafton
State Hospital, Lakeville State Hospital, Metropolitan State Hospital, Northampton
State Hospital
Division of Capital Asset Management

One Ashburton Place
Boston, MA 02108
Phone: (617) 727-4050
Fax: (617) 727-5363
Email:INFO.DCAM@state.ma.us
DCAM’s services include: Planning • Design • Construction • Capital Repairs &
Improvements • Asset Management
A-46
Contractor Certification and Compliance • Leasing • Acquisition and Disposition •
Maintenance
John B. Cruz Construction Inc.

Cruz Management Co, Inc.
Cruz Development Corporation.
John B. Cruz III
President
One John Eliot Square
Roxbury, MA 02119
Phone: (617) 445-6901
Fax: (617) 442-2496
info@cruzcompanies.com
Cruz Development has developed over 1500 units of housing and proudly specializes in
Build-To-Suit projects. Once a location is identified the Cruz Development team negotiates
with the proper financiers, lenders, and government agencies to obtain funding, building
permits, and environmental approvals. Then the Cruz team works with architects and
engineers to orchestrate schedules and construction details.
Avalon Bay Communities

Boston, MA
51 Sleeper Street Suite 750
Boston, MA 02210
Phone: (617) 654-9500
Fax: (617) 426-1610
Award-winning AvalonBay Communities, Inc. is in the business of developing,
redeveloping, acquiring and managing luxury rental communities. Our apartments are located
in high barrier-to-entry markets across the country, including the Northeast, Mid-Atlantic,
Midwest, Pacific Northwest and Northern and Southern California regions.
VinCo Properties, Inc.

434 Massachusetts Avenue, Suite 401
Boston, MA 02118
Phone: (617) 859-5900
Fax: (617) 424-9623
Email: info@vincoproperties.com
VinCo Properties, Inc. is a Boston-based real estate development company which targets the
acquisition of undervalued real estate assets and undeveloped land. VinCo Properties, Inc.
generates value through the repositioning of existing buildings, land entitlement,
development opportunities, and quality construction.
National Development
2310 Washington Street
Newton Lower Falls, MA 02462
Phone: (617) 527-9800
Phone: (617) 965-7361
contactus1@natdev.com
A-47
Since 1983 National Development has been one of New England’s leading development and
investment firms. Our staff of 150 includes experienced individuals with backgrounds in
design, engineering, construction, finance, legal, and brokerage. Our unique culture is both
creative and collaborative. Our "out of the box" thinking is what makes us a leader in the
New England real estate market.
Community Builders
95 Berkeley Street, Suite 500
Boston, MA 02116-6240
Phone: (617) 695-9595
Fax: (857) 221-8618
The mission of The Community Builders, Inc. is to build strong communities where people
of all incomes can achieve their full potential. We do this by developing, financing, and
operating high quality affordable, mixed-income housing, by coordinating access to support
services, and by planning and implementing other community and economic initiatives
critical to the communities we serve. We focus primarily on meeting the needs of lower
income people not effectively served by market forces. We favor a multi-disciplinary
approach and engagements of significant scale that can have a lasting impact. We specialize
in large-scale public and assisted housing redevelopment projects, transforming distressed
housing projects into anchors for multifaceted revitalization efforts.
A-48
Appendix DD
BSS SWOT
BSS Property SWOT
Strengths Weaknesses Opportunities Threats

Land available at ―below …but dirty, perhaps rendering Potential nearby casino could Remediation (who pays?) could
market value‖… it a liability instead. be a positive if phased, flexible stall development.
implementation is followed.
Quabbin Reservoir; onsite Traffic counts/ visibility poor; Perhaps salvage a few Credit markets rough.
water. accessibility arguably poor. buildings; a couple are unique.
Safe environment; good people. Town name. Partnership with UMass, More delay = more decay.
hospital, area business
Some infrastructure already in Minimal infrastructure (in Strong older, richer population. Remediation costs could be
place (broadband, water, terms of attractions). greater than believed.
sewage).
Belchertown fastest growing Travelers to small towns most Brownfield funding Development already
town in Western MA. enjoy dining and shopping completed could limit who
…not much of either here. would be interested in placing
on-site.
Entranceways to site in place, Marketing funds under Ch 42d
as well as pass through
property.
A-49
Appendix EE
Expert Interview Notes
Note: The unattributed notes below represent feedback received during expert interviews.
 Use developers as the main source of information. They should know customers.
Understand their thinking. They might have a checklist of the most critical items that
make such places successful.
 Think about similar resort. E.g. Canyon Ranch – there are only two of them. Why?
They pick locations where rich people live. Rich people go to Berkshires and AZ. It’s
―known.‖
 Probably not particularly useful to spend too much time updating data that is two
years old, unless we have reason to believe there’s significant error. Investors make
go/ no-go decisions based on huge cushions.
 There should be a brand name. Brand name can add up 10% of the cost.
 The Btown property is difficult to evaluate because there is nothing else like it in
Btown.
 A demand will need to be created b/c there currently is no demand.
 How will guests get from Bradley Airport to the resort? Shuttle? Will they want to
travel that far?
 There’s a reason they put the state school where it is – it’s not near anything else.
 Other wellness centers are built in places where people already go.
 The critical point in this project is the ―location‖ issue.
 Contact Hunter Interests and ask them where the numbers come from. Contact the
developer and understand his background.
 Properties to consider: Canyon Ranch in Lenox, Stoweflake because both have the
same general population base and same ease of access.
 Even though Btown has connections with the Quabbin and the 5 school area, it
doesn’t have what the Berkshires have (comparative study).
 The casino is only a potential attraction that’s being considered, but it most likely will
have a different type of clientele.
A-50
 The complex needs to be ―cohesive.‖ It needs to be recognizable and marketable, but
right now it’s trying to be all things to all people and this doesn’t work.
 They do have the strength of the Quabbin and it would be good if they could get
people to do bird watching tours, hunting, etc.
 Belchertown has boomed, and still is. Property is immense.
 15 mins to Pike is good.
 Typically, you look at some combination of retail, residential, office and light
industrial. Residential is easiest to build, followed by retail.
 Health & Wellness is growing…look at people over 85…but you need cache. MA has
a greater older population than most places.
 Need a catch. As a developer, spa could intrigue me.
 Might consider ―ground truthing‖...bring in 3 people to see the site, review the plan
and tell you if you’re crazy.
 Doesn’t like conference facility idea. UMass has its own. Agreed that it would be
tough to draw Springfield businesses. If I tell my wife, let’s come out here to
Belchertown, she’ll say no.
 Business…build from within. Very difficult to attract.
 Luxury casino would be a real competitor, and that seems to be what they’re talking
about. Would need to build flexibility into phasing plan, to allow opportunity to
complement casino offerings. Again, phase over 20-30 years.
 Look at State Mental Hospitals. Were they demolished or revitalized? What did they
do?
 Any developer taking this on would need to ―be in it for the long haul‖ 12-13 years to
break even. Would require TIF, which is against the EDIC’s objective.
 Staffing in a wellness center could be a huge challenge. My daughter is a massage

therapist, makes $15/hr. Can’t afford to live in Belchertown at that wage.
 As a destination, you’d have to recreate the Berkshires. That would be challenging. If

you can do this, you can draw from 6-8 states. Otherwise, your draw is less. Don’t
even bother if you’re below 3 states. Hotel brand could have a huge effect on this. For
5-star, you’ll draw from several states. Holiday Inn, you’ll draw from Western Mass.
Motel Six, forget about it.
A-51
 Why not bring a developer and ask him what he wants to do to create jobs and
generate taxes? Developers are hungry now. Developers may come up with ideas and
evaluate them. Specialization for a developer is important. Do not look for one
developer.
 Economy is different today. Check current economic conditions. A lot of things have
changed.
 Hunter – provided only one solution. There should be alternatives.
 Check where 5-star hotels are located in Massachusetts. Are there any in Springfield?
If no, why? If no, it may be not a good idea to build a 5-star hotel in Belchertown.
 Price is not the issue if you go to a luxury spa. You want to tell your friends that you
were in the Berkshires.
 Name of Belchertown – bad.
 Who dictates a decision about this project? Belchertown put too many restrictions. It
shrinks the number of opportunities and the number of interested developers.
 Occupancy of 70% – this is too high.
 Financial: optimistic, pessimistic and realistic (average). Do a SWOT. Accept

occupancy 50%.
 Risk premium – will be enormous for this project.
 Debt service coverage ratio – take 1.2.
 Lumber treatment plants bring in a fair amount of tax revenue.
 Does not think an industrial park would ever work at the site b/c it’s not near an
interstate. Used a development in Bondsville (a town near Btown) as an example and
said that it took 30 years to get a business in there.
 Currently applying for funds under Chapter 42d state law. If granted, they would be
given $100,000 state funding for project costs and the site will be marketed (could
help attract developers) by the state.
 Something that failed: Tampax HQ was in Three Rivers (also nearby). Tampax was
bought by Johnson and Johnson, the plant was closed, and lot of people were out of
work.
 Look at Community Development Block Grants, Brownsfield Funding.
 Look at MassDevelopment (quasi-state agency).
A-52
 Usually you examine the feasibility of several concepts, then compare A, B, C and D.
 Look at the Lifestyle Market Analyst.
 Investment will be tough, but could look at international investors.
 Look for comparables of similar size…150 rooms in New England.
 Office, retail and restaurant components seem small.
 Operating through a consulting firm is appropriate.
 As a developer, would be great to have an aerial view of the property.
 65% debt is conservative.
 Interest rate maybe 10-11%; will vary with D/E.
 (In regards to Residual Land Value Technique): No lender is going to say this land is
worth _____.
 No one is knocking down their doors.
 T-Bills could be a fair opportunity cost measure.
 Build in moving penalties.
 Give land away/ incentivize.
 Noho is different/ look for break-even proposition between jobs and housing.
 Noho also went through multiple plans…one for a jail, one for a ―transition house,‖
multiple environmental impact studies.
 Noho is two-phased, includes (or at least was intended to include) retail, industrial,
housing (including affordable rate), assisted living, child care, office, light industrial.
 Connections go a long way.
 ¾ of Noho land was set aside for agricultural preservation purposes.
 Noho opened a bid process to developers.
 EPA controls assessment and cleanup dollars. Look to gain these.
 In a developer, consider goals, quality, experience and capability.
A-53
 Development is public-owned (MassDevelopment). I would recommend them.
 Follow up with developers to ensure they’ve done the things they say they’ve done.
 Same tax rate in Noho for all property types…look at square footage.
 TIF = Tax breaks on new growth value.
 Recommend Western Massachusetts Development Corporation. They would

probably look at the land.
 Seek professional assistance…very hard to accomplish goals volunteer-wise.
 Major consideration: profit. Will this work? No. Spa won't generate enough traffic.
This will be a destination project. Must generate immense amount of traffic from a
large trading area.
 Return - as great as possible. Sounds greedy but developers usually set a minimum
return, a hurdle rate and work to exceed it. Equity partners often dictate that rate.
Long term institutional investors accept lower returns. There is no standard but 15-
20% is a good start.
 The town would be better served by letting developers submit their own proposals for
the site. Let the market determine the scope and value of the project, not consultants.
They have no skin in the game.
 I wouldn’t touch this without a thoroughly researched and proven concept that would
draw from a large trading area cutting across many demographics. The capture rate
will be fairly low.
A-54
Appendix FF
Bibliography
Bloomberg.com. Rates & Bonds. Retrieved March 18, 2008, from

http://www.bloomberg.com/markets/rates/index.html
Hotel Finance. Loan Terms. Retrieved April 10, 2008, from http://www.hotelfinance.com
Hunter Interests Inc. in association with Carol R. Johnson Associates, and Ms. Elizabeth Taras.
Master Plan and Development Strategy for the Belchertown State School Property, September 15,
2005.
Lesser, Daniel H., Rubin, Karen, Rates of return on hotel investments. Cornell Hotel & Restaurant
Administration Quarterly, June 1 1993.
Lodging Econometrics Industry, Outlook for 2008 Reports a Record Construction Pipeline of 5,438
Projects with 718,387 Rooms, January 28, 2008.
Lloyd-Jones, Anne, The Prognosis For Occupancy And Average Rate In A Slowing Economy. HVS,
March 28, 2008.
Massachusetts Office of Travel & Tourism, In-State Market Research Findings, November 2004.
Mintel Oxygen, Spa Tourism - International – June, 2007.
Rappaport, Liz, Bond, Loan Markets Remain Wary, The Wall Street Journal March 27, 2008.
PKF Consulting, PKF Hospitality Research. Trends in the Hotel Industry. Singapore: Continental
Press Pte. Ltd., 2006.
PKF Hospitality Research, Not As Great in 2008 for U.S. Hotels, December 10, 2007.
Ross, Westerfield, Jordan. Fundamentals of Corporate Finance. 7th Edition. Boston: The McGraw-
Hill/Irwin, 2006.
Sahlins, Elaine. HVS Hotel Development Cost Survey 2007. HVS San Francisco, October 28, 2007.
Schwanke, Dean, et al. Mixed-Use Development Handbook. Second Edition. Washington, D.C.: ULI-
the Urban Land Institute, 2003.
"Taking Root: A Robust Residential Market and Controlled Commercial Growth Redefine
Belchertown," Business West, Vol. 24, No. 14, November 12, 2007.
A-55
Websites consulted:
http://www.SpaFinder.com
http://www.canyonranch.com
http://www.cranwell.com
http://maps.google.com
http://www.gostowe.com
http://www.mass.gov
http://www.city-data.com
http://www.massdevelopment.com
A-56

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Dear Mr. Terry:

1. Below is the project as the Isenberg MBA team understands it:

William Terry ____________________

Katherine Bloor ____________________

Pianpian Huang ____________________

Kevin Price ____________________

Ielyzaveta Zhuravska ___________________

Historical Rates of Change, 1978 – 2007

Source: Smith Travel Research; Bureau of Labor Statistics

Hotel 15 Year Cash Flow Pro Forma Realistic Scenario

Net Operating Income

* Depreciation is calculated as 30 year straight-line.

Net Operating Income

* Depreciation is calculated as 30 year straight-line.

Hotel 15 Year Cash Flow Pro Forma Pessimistic Scenario

Net Operating Income

* Depreciation is calculated as 30 year straight-line.

Occupancies & Daily Rates All MA Hotels '05 - '07

Occupancy Rate (in %)

SENSITIVITY ANALYSIS Realistic Scenario

SENSITIVITY ANALYSIS Optimistic Scenario

Year 1 Average Daily Rates

SENSITIVITY ANALYSIS Pessimistic Scenario

Discounted Cash Flow Analysis (Operating Cash Flow) Realistic Scenario

Capital Expenditure $(28,125,000)

* The model does not include periodic renovation expenses.

Discounted Cash Flow Analysis (Operating Cash Flow) Optimistic Scenario

Capital Expenditure $(28,125,000)

* The model does not include periodic renovation expenses.

Discounted Cash Flow Analysis (Operating Cash Flow) Pessimistic Scenario

Capital Expenditure $(28,125,000)

* The model does not include periodic renovation expenses.

Variable Expenses $3,559,057.41

Fixed Costs $2,097,690

Variable Expenses $6,498,805.34

Fixed Costs $2,097,690

Break-even Analysis Optimistic Scenario

Variable Expenses $4,540,790.51

Fixed Costs $2,401,822

Break-even Analysis Optimistic Scenario

Variable Expenses $7,680,406.31

Fixed Costs $2,401,822

Break-even Analysis Pessimistic Scenario

Variable Expenses $2,577,324.32

Fixed Costs $1,793,559

Break-even Analysis Pessimistic Scenario

Variable Expenses $5,317,204.37

Fixed Costs $1,793,559

Development Costs Budget/Economy Hotels Development Costs

Development Costs Midscale Hotels w/o F&B Development Costs

Development Costs Extended Stay Hotels Development Costs

Development Costs Midscale Hotels w/F&B Development Costs

Development Costs Full-Service Hotels Development Costs

Development Costs Luxury Hotels and Resorts Development Costs

Mean High Low Median Construction $58,035,000

**Based on HVS 2007 estimates**

Solutions and Equifax.

Based on HVS 2007 estimates