Direct Investment Opportunity March, 2014

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Bernard Carson
5 years ago
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1 Direct Investment Opportunity March, 2014

2 Coast to Coast Linens Key Partners Greg Denton: years of hotel and resort development/ownership experience - Has built and/or asset managed over 110 hotels across the U.S. - B.S. and M.S. degrees from Cornell University (Hotel Administration) John Patrick, M.D.: - Board Certified Cardiac Anesthesiologist - successful entrepreneur and real estate developer Owner: Patrick and Associates anesthesiology practice Owner: Patrick Construction (2000 single-family homes) Owner: Parrot Pointe Land Development, Ltd, Costa Rica - B.S. degree from University of Richmond - M.D. degree from Virginia Commonwealth University Ralph Stayer: Chairman and Owner: Johnsonville Sausages - most popular brand of sausage in the United States ($700m/yr sales) Board Member: Brunswick Corporation, Boston College, Marian College B.S. degree from Notre Dame University

3 The Opportunity: The U.S. hotel industry is in a stage of deconsolidation, with hotels and resorts across the country looking to outsource the cleaning of dirty towels and sheets due to the high costs of labor, equipment, and utilities that hotels pay relative to industrial users; Few laundry operators specialize in serving hotels, and even fewer utilize modern equipment and technology or have the proper service mentality to satisfy hotels and hotel guests; The commercial laundry business is very capital-intensive, and most laundry companies don t have the financial resources necessary to operate at maximum effectiveness; Water usage and water rights are expected to become significantly more prohibitive in many markets (primarily in the western United States), which will provide a valuable long-term competitive protection; Coast to Coast Linens is an investment partnership created to build a portfolio of commercial laundries across the United States (in partnership with high-quality management companies wherever possible) in order to serve major hotels and resorts.

4 Business Plan Coast to Coast intends to develop laundries between 2014 and 2020 Each laundry will cost $2.0M to $3.0M to build and will be located in markets with large numbers of first-class hotels and resorts Coast to Coast will invest between 20% and 50% of required equity and will seek equity partners (EB-5 and conventional) to co-invest on each project Coast to Coast will either manage the properties or will partner with a local management company (if available) Laundries are an excellent Direct EB-5 investment option because they are very labor-intensive and are typically located in Targeted Employment Areas each laundry will employ between 30 and 70 full-time workers

5 Partnership Terms EB-5 Investors join LLC that directly owns the property and are appointed to the Board of Directors; Funds not invested until I-526 is approved (held in escrow) and business is open; EB-5 Investors are paid a 4% Preferred Return, and their Investment matures and is repaid 6 months after approval of the I-829 petition; Each EB-5 Investor invests and matures separately not contingent upon what happens with other investors If EB-5 Investors are not repaid within 6 months of I-829 approval OR if the project doesn t create at least 10 direct jobs per investor, the EB-5 Members take full control over the company and can hire more employees, liquidate the company, etc; EB-5 Investors have the option to convert their investment into pro-rata common equity in the venture.

6 Seattle, WA Portland, OR Targeted Locations Lake Tahoe, NV San Francisco, CA Las Vegas, NV Denver, CO New York, NY Philadelphia, PA Washington, DC Santa Barbara, CA Palm Springs, CA Phoenix, AZ San Diego, CA Santa Fe, NM Atlanta, GA Charlotte, NC Maui, HI Honolulu, HI Austin, TX New Orleans, LA San Antonio, TX Houston, TX Orlando, FL Palm Beach, FL Naples, FL Miami, FL San Juan, PR

7 Immediate Opportunities Palm Springs, CA Atlanta, GA Palm Beach, FL

8 Coast to Coast Palm Springs/Indio Palm Springs/Indio is 100 miles east of Los Angeles and contains 600,000 residents, 210 hotels, and over 150 golf courses/country clubs. Coast to Coast Linens already leases linens to the Fantasy Springs Resort and Casino ($600,000 per year of revenues)

Palm Springs/Indio, CA Located in Coachella

220 hotels, 150 golf courses Playground of the

9 Palm Springs/Indio, CA Located in Coachella Valley/Riverside County, approximately 100 miles east of Los Angeles Arid (desert) climate with abundant sunshine and clean air. 220 hotels, 150 golf courses Playground of the Stars resort area for Hollywood actors and other celebrities

10 83855 Market Street, Indio 18,709 square foot building for lease, ideally suited for commercial laundry $3.0M development cost, projected $4.8M Revenues, $900K Profit

11 Phase I: Coast to Coast Indio Projected Investment Costs $1,500,000 (Coast to Coast Equity) Initial washers, dryers, ironers, folders, sorting equipment, utilities, boilers, installation, legal fees, permits, start-up costs Phase II: $1,500,000 (EB-5 Investment) Additional washers, dryers, ironers, tunnel washer, dry cleaning/uniform equipment

12 Coast to Coast Indio Proposed Structure: $1.5m Equity from Coast to Coast (Phase I: 2014) $1.5m EB-5 Investment (Phase II: 2015) Three EB-5 Investors at $500,000 each Money not invested until I-526 approval EB-5 funds repaid within 6 months of I-829 approval OR Investor has option to convert to pro-rata Equity CTC Indio expected to generate 48 full-time jobs, or 16 Direct jobs per investor

and re-equip and re-open the plant at a significant discount to replacement

13 Coast to Coast West Palm Beach, FL Coast to Coast Linens has the opportunity to sublease a building that was formerly operated as a commercial laundry and re-equip and re-open the plant at a significant discount to replacement cost. WPB can service the entire South Florida market, from Palm Beach to Miami

Palm Beach, FL Highly affluent resort community located in South Florida Populated by wealthy and older Americans Median Family Income $138,000 53% of residents are 65 yrs+ Located

14 Palm Beach, FL Highly affluent resort community located in South Florida Populated by wealthy and older Americans Median Family Income $138,000 53% of residents are 65 yrs+ Located 70 miles north of Miami, 170 miles southeast of Orlando 97 hotels and resorts in Palm Beach, including The Breakers, PGA National Resort, Trump National, Ritz Residences, Four Seasons

1321 53 rd Street, West Palm Beach, FL 14,000 square foot building for lease formerly operated as laundry and mat cleaning plant with compatible

15 rd Street, West Palm Beach, FL 14,000 square foot building for lease formerly operated as laundry and mat cleaning plant with compatible improvements and equipment for commercial laundry, and $1.3M of water rights are already in-place $2.5M development cost, projected $3M revenues, $500K profit

16 Coast to Coast Palm Beach Projected Investment Costs Phase I: $1,500,000 (Coast to Coast Equity) Initial washers, dryers, ironers, folders, sorting equipment, utilities, boilers, installation, legal fees, permits, start-up costs Phase II: $1,000,000 (EB-5 Investment) Additional washers, dryers, ironers, tunnel washer

17 Coast to Coast Palm Beach Proposed Structure: $1.5m Equity from Coast to Coast (Phase I: 2014) $1.0m EB-5 Investment (Phase II: 2015) Two EB-5 Investors at $500,000 each Money not invested until I-526 approval EB-5 funds repaid within 6 months of I-829 approval OR Investor has option to convert to pro-rata Equity CTC Palm Beach expected to generate 30+ full-time jobs, or 15+ Direct jobs per investor

Coast to Coast Atlanta Coast to Coast Linens has the opportunity to acquire an existing 30,000 square foot laundry facility located in Lawrenceville,

18 Coast to Coast Atlanta Coast to Coast Linens has the opportunity to acquire an existing 30,000 square foot laundry facility located in Lawrenceville, Georgia, a suburb of Atlanta. The property is fully equipped and operational but needs capital investment and improved management in order to become profitable.

19 Atlanta, GA 9 th largest Metro Area in the U.S. (5.5m population) Third largest concentration of Fortune 500 companies (Coca Cola, Home Depot, Delta, UPS, AT&T, CNN, Turner Broadcasting) Diverse economy logistics, services, finance, media, information technology Education hub with 30 universities (Georgia Tech, Georgia State, Emory University, Morehouse) Over 35 million visitors/year

20 2402 Tech Center Pkwy, Lawrenceville, GA 30,000 square foot building for lease, currently operated as laundry $3.0M acquisition/renovation cost, projected $6M revenues, $1.0M profit

21 Coast to Coast Atlanta Projected Investment Costs Acquisition of Existing Business: $1,500,000 Rail/Conveyer System: $ 500,000 Additional Equipment: $ 200,000 Water Reclamation System: $ 300,000 Trucks and Delivery Vehicles: $ 150,000 Working Capital: $ 350,000 Total Investment: $3,000,000

22 Coast to Coast Atlanta Proposed Structure: $500k Equity from Coast to Coast $1.5m Equity from Partner(s) (NOT an EB-5 opportunity, as the company already exists) $1.0m Debt 8% Preferred Return to Partner 50/50 distributions thereafter

Lower Income Journey to Work Market Share From American Community Survey

Lower Income Journey to Work Market Share From American Community Survey 2006-2010 Table 1: Overall National Data Table 2: Car, Truck or Van Table 3: Transit Table 4: Metrics Table 1 Work Trip Market Share: