Ovation Development

Ovation Development
 
M E M O R A N D U M
 
October 7, 2005
 
 
To: Friends of the Brexton Hotel
 
From: Lou Steadwell
 
Subject: Brexton project update
 
Well, I'm back from Key West in one piece and learning how to wear shoes again.  I've had a couple of conversations this week with Steve Mowbray, the owner and real estate broker for the Brexton. He reports that although the property is officially "off the market", he has decided NOT to do it himself and will sell it. At this time, however, he is having more detailed plans drawn for the exit stairway and is updating the historic preservation documents for the building. In his eyes, this is an investment that "adds value" to the building, which of course will be reflected in the sales price when he puts it back on the market. The bad news is the further inflation of the sales price, the good is that it will eventually be sold to somebody.
 
I also met with a real estate attorney, Lex Ruygrok, in Baltimore to discuss the idea of the purchase of the existing LLC and its assets (to avoid transfer tax) and the plan for structuring the financing of the project to allow for different levels of financial commitment within the LLC on the part of the investors -- more benefit for higher risk, and finally, the rules for private offerings that affect our proposed financing plan. He was aware of the project and is eager to work with us if we get the building.
 
I spoke with Paul Littman, of Southway Builders, referred to me by my architect, Saskia Van Groningan, a Baltimore contractor who is very familiar with the building. I sent him the preliminary plans for the project and talked to him about our construction estimates. He is willing to help refine our estimates IF we get "site control".
 
Finally, I proposed, in writing, that the owner give us an option on the building (at the "value added" price) during the interval while the stairway plans are being redrawn.
 
We'll see what happens.

LS