03-05-07 Special Called Joint Meeting of the La Porte Development Corporation Board of Directors and the La Porte City Council Minutes

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PKF Consulting 1:010 Linlldl Sh~et SUite 400 Houston T X March 12,2007 Tf:iepi;Ofle I! ~ 1} 62' -S:lS2 Tcicfi:1X r 71 :)} 621 -91.9': Mr. John Joerns City of La Porte 604 West Fairmont Parkway La Porte, Texas 77571 Dear Mr. Joerns: In accordance with our engagement letter dated October 18, 2006 with Consultivo LLP, we have completed a market study and estimates of prospective financial performance for the proposed 250-room Sylvan Beach Hotel, located on Galveston Bay in La Porte, Texas. The conclusions reached are based upon our present knowledge of the competitive market resulting from our fieldwork completed February 14, 2007. As in all studies of this type, the estimated results are based upon competent and efficient management and presume no significant change in the competitive position of the project from that as set forth in this report. The terms of our engagement are such that we have no obligation to revise this report to reflect events or conditions that occur subsequent to the date of the completion of our fieldwork. However, we are available to discuss the necessity for revision in view of changes in the economic or market factors affecting the proposed project. Although they have been conscientiously prepared using information obtained during the course of this study and our experience in the industry, the proposed property's future performance is based on estimates and assumptions, which are subject to uncertainty and variation, and we do not represent them as results that will actually be achieved. We would be pleased to hear from you if we may be of further assistance in the interpretation and application of our findings and conclusions. We express our appreciation to you and your associates for the cooperation extended to us during the course of this assignment. Respectfully submitted, PKF Consulting ~R~ m<-~ G. Randle McCaslin Vice President