ltc 191-2003 (1)

8/15/2019 LTC 191-2003 (1)

1/13

CITY

OF

MIAMI

BEACH

Office

of

the

City

Manager

Letter

to Commission

No.

If/ ..

a?

m

To:

Mayor

David

Dermer

and

Members

of

the

Cty

Commission

Date:

August

15

2003

F r o m :

Jorge

M

onzalez

Cty

M a n a g e r

Subject:

RDP

O Y A L

PALM

D

t t a c h e d

pease

ind

c o r r e s p o n d e n c e

from

non

P l a n t e r s

n o t i f y i n g

RDP

Royal

Pam

Hoe

i m i t e d

P a r t n e r s h i p

that

their

oan

as

m a t u r e d a n d

is

n

efault.

d d i t i o n a l l y ,

a t t a c h e d

you

w i l l

fnd

e s p o n s e

to

aid

notice

from

RDP

Royal

P a l m

Hotel,

LP

The

letter

from

Unon

l a n t e r s

i n d i c a t e s

the

oan

m a t u r e d

Juy

7

003

and

emains

u n p a i d ,

plus

default

i n t e r e s t and

unpaid

attorney'

s

fees

Roya

Palm'

s

e s p o n s e

i n d i c a t e s

they

continue

to

debt

service.

d d i t i o n a l l y ,

ave

attached

the

o s t

recent

r e n t a l

p a y m e n tfo

A u g u s t

2 0 0 3

in

the

mount

of $

41,

91.

52

for

he

m o n t h l y

base

and

additional

ren,

lus sales

tax

A

ollow-

up

e g o t i a t i n g

session

wth

on

P e e b l e s

a s

been

scheduled

S e p t e m b e r

4

00 3

r e g a r d i n g

the

LO.

In

the

m e a n t i m e ,I

wll

provide

you

with

an y

updated

i n f o r m a t i o n

as

it

is

e c e i v e d .

JMG

8/15/2019 LTC 191-2003 (1)

2/13

r

UNION

PLANTERS

BANK

I

J

August

8003

Va

Certified

Ma-

Return

R e c e i p t R e q u e s t e d

U

S

Mail

RDPRoyal

Pam

Hote

L i m i t e d P a r t n e r s h i p

c/

o

P

DC

Hospitality

C o r p o r a t i o n

1

550

Bltmore

Way,

Suite

9 7 0

CoraGables,

Forida

3 3 1 3 4 Attn.:

R

o n a h u e

P e e b l e s , P r e s i d e n t

Re:

Union

P l a n t e r s

B a n k ,N

A (

he ank )

oan

to

D P RoyalPam

Hote

L i m i t e d

Partnership,

alor ida

limted

p a r t n e r s h i p ( the

o r r o w e r ) (

t he " Loan )

e n t l e m e n :

This

l e t t e r

isto

d v i s e

you

that

the

oan

m a t u r e d

on

u ly

7,

2003

bu

r e m a i n s

u n p a i d

and,

t h e r e f o r e ,

isin

efau l t

s i n c e

Ju ly

7

2003

The

mount

owingto

the

Bank

is

as

follows:

Principal

Default

Interest

from

and

a f t e r

July

7

2 0 0 3

toAugust

8,

003

U n p a i d

A t t o r n e y s '

Fees

o t a l :

53

24 , 999

99

er

D i e m @18%

fter

Au gu s t

8

2003

6 1 ,

200.

00

,

50 .

00

54,

92,449

9

26

1 2 .

50In

he

event

o

rror,

the

ank

e s e r v e s

to

c o l l e c t

alums

p a y a b l e

to

it

n d e r

the

oan

D o c u m e n t s .

A c c e p t a n c e

of

p a r t i a l

8/15/2019 LTC 191-2003 (1)

3/13

Unless

payment

in

cleared

funds

is

received

by

August

18,

2 0 0 3

a

he

Bank

at

2800

Ponce

de

eon

B o u l e v a r d ,

M i a m i

F l o r i d a

3 3 1 3 4 by

200

.

wll

av e

no

l t e r n a t i v e

bu

to

orward

this

maer

to

ou

t t o r n e y s .

P l e a s e

m a k e

a r r a n g e m e n t s

for

p a y m e n t

in

ul

of the

o a n

by

tha

date.

By

opy

of

ths

e t t e r ,

we

h e r e b y a d v i s e

the

guarantors

of

the

L o a n

o

such d e f a u l t

and

e m n

fo r

p a y m e n t .

Very

truy

ours,

i~

y

j;

ans

Senor

Vce

P r e s i d e n t

ra::-

onahue

P e e b l e s ,

Guarantor

HCF

Group,

Inc

u a r a n t o r

Jo

enero.

Ocean

Bank

Miami

Beach

R e d e v e l o p m e n t

Agency,

Exe cu t i ve

Director

M i a m i

B e a c h


Agency,

G e n e r a l Counsel

City

of

Miami

Beach,

City

Manager

Cty

o

M i a m i

Beach,

Cty

t t o r n e y

Bloom &

Minsker

Six

C o n t i n e n t s

H o t e l s ,

LLCtuart

Hoffman,Esq

80 0

P o n c e

de

8/15/2019 LTC 191-2003 (1)

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2003

14:

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PEEBLES

A T L A N T I C

DEVELOP

III

002

05

RDP

R O YA L

PALM

HOTEL,

LP

550

Bil lmore

Way ,

Sute

970 Coral

G a b l e s .

F l o r i d a

3 3 1 3 4

Te: (

30542-

4341

Fax: (

305

42

4345

A u g u s t

12

2003

Vaacsimi le &US

Mail

Mr.

Roy

D

anis S e n i o r

Vce

P r e s i d e n t

Union

Planters Bank

2800

P o n c e

de

eon

o u l e v a r d

Co ra l Gables,

Florida

3 3 1 3 4

Dear

M.

Tanis:

We

ae

in

receipt

of you

letter

dated

A u g u s t

a

which

arr ived

inour

offices

today. The

a c t i o n

tha

ou

have

t a k e n b y

issuing

a

efault

noice

reaive

to

ou

m o r t g a g e

l o a n

on

the

oyal

P a l m

He

is

n r e a s o n a b l e

and

n j u s t i f i e d .Itis

a p p a r e n t

that

U n i o n

P l a n t e r s ,

w h a t e v e r

its

motives

m ay

be

aso m p f e t e l y

i g n o r e d

the

i r c u m s t a n c e s

s u r r o u n d i n g

this

project

and

the

oan

A

the

risk

of

s t a t i n g

the

obvious,

the

91

terrorist

attacks

h ad

a

e v a s t a t i n g

effect

onhe

hospital ity

and

t o u r i s m

industries,

and

h e y

have

y e t

to

fully

r e c o v e r .

Miami

Beach

was

p a r t j c u l a r l y

hard

hit.

h e n ,

ash i n g s

s t a r t e d

to

come

back our

country

went

to

a

n

Iraq

and

the

ourism

industr ial w a s

ht

g a i n .

A

a

result

o

ths

w

avehad

to

n d u r e

an

c o n o m i c

r e c e s s i o n

tha

a u s e d

n e a r l y

every

major

airline

to

p r o c e e d

to

a n k r u p t c y

filings

despite

m a s s i v e

g o v e r n m e n t

s u b s i d i e s .

T h e s e

actions have

also

had

a

drect

impact

on

the

rave l

and t o u r i s m

i n d u s t r y .

The

Royal

Pam

ote

o p e n e din

May

o

002,

eight

o n t h s after

the

ttacks.

Itp ened

despte

n o r m o u s

chal lenges

that

w

not

only

faced,

bu

o v e r c a m e

r e l a t i v e

to

nviron-m e n t a l

p r o b l e m s .

structural

defects

inthe

r i g i n a l

Royal

Palm

Hoe

s t r u c t u r e

and

d ispu tes

w i t h

c o n t r a c t o r s .

Ding

h e

c o n s t r u c t i o n period,

as

t

w as

e x t e n d e d

d u etoh e s e

problems,

we

o n t i n u e d

to

ay

deb

ervice.

The

Hoe

opened

athe

c o m m e n c e m e n t

o

he

slowest

por t ion

o

he

year

f o r

t o u r i s m

o n Miami

Beach.

Once

o p e n e d ,

we

experienced

s i g n i f i c a n t

and

substantial

p r o b l e m s

wthh e

Hote

operator, T o w n Pak

Hotel

Corporation (

T o w n

Pak

d

arowne

P l a z a ) .

You

ae

fully

f a m i l i a r

with those

prob lems.

The

Hotel'

sookings

w e r e

well

be lo w

the

8/15/2019 LTC 191-2003 (1)

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2003

0

1

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15

P E E B L E S

A T L A N T I C

DE

t L O P

003

005

M.

oy

D

ans

A u g u s t 12,

003

Page

2 R a t h e r

than

h y away from

dealing

w i t h hese

issues,

we

have

one e v e r y t h i n g

in

ur p o w e r

to

make

this

Hotel

a

u c c e s s

despite

the

h a l l e n g e s t h a t w e

facedAs

a

esult ,

C r o w n e

Plaza

has

r e m o v e d

and

r e p l a c e d s u b s t a n t i a l l y

alo

ts

a n a g e m e n t p e r s o n n e l such

tha

he

Hotel

has

inaly

begun

to

meet

and

x c e e d Crowne

Plaza'

s

f o r e c a s t e d

numbers.

W e

have

pursued

r e m e d i e s against the

g e n e r a l

contractor

to

n f o r c e

our

rights

in

elation

to

c o n s t r u c t i o n

problems.

We

ave

been

in

continuous

n e g o t i a t i o n

with

the

g r o u n d

lessor relative

to

ou

claims

aganst

th e

g r o u n d

lessor

including,

among

o t h e r

t h i n g s ,

a

laim

under

an

e n v i r o n m e n t a l i n d e m n i t y c o n t a i n e d

in

the

ground

lease.

h r o u g h

al

o

his

and

de sp i t e

all

of

this,

wehavepaid U n i o n

Planters

its

debt

s e r v i c e

and the H o t e l

is

and

has

b e e n

curent

on

ts

p a y m e n t s .

N o t ony

that,

t h i s

Hotel

is

a

from

e i n g

ai s t r e s s e d

p r o p e r t y " ,

The

loan

toalue

raio

fo

h is loan

and

r o p e r t y

is

a p p r o x i m a t e l y

sixty-

five

percent (

5%)

with

a p p r o x i m a t e l y Twenty

M i l li o n (

20,

000

0 0 )

Dolas

oash

equ i t y

in

h e

p r o p e r t y .

A n d ,

we

continue

to

p a y deb

s e r v i c e .

We

r e

m a i n t a i n i n g

reserve

a c c o u n t

wth

youn s t i t u t i o n

in

ash,

in

an

a m o u n t

sufficien

to

ove r four (

4

months '

of

debt

service

p a y m e n t s .

And,e continue

to

aydebt s e r v i c e .

Then ly

reason

that

we

ae

ven

dealing

with

and

i s c u s s i n g

t h e s e

i s s u e s

is

ecause

C r o w n e

Plaza failed

to

c h i e v e

a

o d e s t debt

service

coverage

raio

ur ing the

height

of

the

as

o u r i s t

s e a s o n .

The

Hotel,

had

Crowne

P l a z a achieved

s a i d

d e b t service

c o v e r a g e ,

would

have

b e e n

granted

an

a u t o m a t i c

e x t e n s i o n

of

the

oan.Thea t a s t r o p h i c effect

on tourism

by

he

terrorist

attacks

and p r o b l e m s

wth

m a n a g e m e n t

of

theo t e l

by

r o w n e

Plaza

c o m b i n e d

to

uch

an

x t e n t

tha

th e

required

coverage was

ot

a c h i e v e d .

Bue

continued

to

ay

e bt

service.

We

av e

entered

into

a

e r ies

o

leter

a g r e e m e n t s

providng

for

short

extensions and

which

c o n t e m p l a t e

e x t e n s i o n s to

e b r u a r y ,

2006

r o v i d e d

that

a c c e p t a b l e

l e v e l so

e b t

service

c o v e r a g e ae

c h i e v e d .

We

t r o n g l y

believe

that those

levels

can

ow

bec h i e v e d

in

ie w of

the

manner

in

which

the

Hoe

is

u r r e n t l y

b e i n g

managed.

W e

have

been

negotiating

wth

Town

Park

over

the

las

severa

w e e k s

toinalize

an

a g r e e m e n t tha

w i l l

bec c e p t a b l e toUnion

P l a n t e r s

w h e r e b y Town

Park

wll

r o v i d e

the

guaranty

p e r f o r m a n c eo

he

o t e l

tha

ou e q u i r e

in

r d e r

for

the

o a n to

b e

extended.

W e

u n d e r s t a n d that

y o u r

r e q u i r e m e n t

for

Town

Pak

s

u a r a n t e e

was

he

r e s u l t

o

h e Bank

oss

oo n f i d e n c e

in

Town

P a r k '

sb i l i t y to

accurately

f o r e c a s t

its

future

per formance

ots

b i l i t y

to

c h i e v e

operating

r e s u l t s

consistent

wi th

s u c h

p r o j e c t i o n s .

In

ie w

o

he

a m o u n t

of

the

a s h c o l l a t e r a l

account

t h a t

is

l ready

b e i n g

maintained

as

ecurity

for

the

oan,

the net

amount

tha

youre

s e e k i n g

to

be

u a r a n t i e d

by

own

Park

is

a p p r o x i m a t e l y

Seven

H u n d r e d

One T h o u s a n d ( $

701,

0 0 0 )

D o l l a r s . We h a v e

p r o v i d e d

f inancial

s t a t e m e n t s

to

ou from

Town P a r k

w h i c h

evidence (and

o u

have confirmed)

that

Town

PaI<

as

a

et

worth

o

ifty

S e v e n

Mllion($

7 ,

000, 000)o l l a r s .

This

neorth

is

ery

8/15/2019 LTC 191-2003 (1)

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P E E B L E S

A T L A N T I C

DEVELOP

O O V 0 0 5

M.

Roy

D

anis

A u g u s t

12,

2003

Page

3

evertheless,

you

have

r e j e c t e d

Town

Pak

s

a

u a r a n t o r

under

t h e s e

c i r c u m s t a n c e s .

T h a t r eje c ti on is

c l e a r l y

u n r e a s o n a b l e

and

n j u s t i f i e d

in

vew

f the

ne

w o r t h

of

ther o p o s e d

g u a r a n t o r

and

the

amount

to

e

u a r a n t i e d .

And

we

ontinue

to

ay

debt

s e r v i c e .

D e s p i t e

Town

Park s

Fifty

Seven

illion ($

57

00,

000

o l l a r s net

worth,

o u

are

i n s i s t i n g

tha

tsp a r e n t ,

I n t e r c o n t i n e n t a l

H o t e l s ,

guaranty

the

amount.

We

have

e x p l a i n e d

to

ou

tha


wllo t

give

any

g u a r a n t i e s .

We h a v e

been

a t t e m p t i n g d u r i n g

the

ase e k

to

c h e d u l ea

al

b e t w e e n

you

nd a

senior

offrcer

o

n t e r c o n t i n e n t a l

Haters

in

o n d o n . b ut

w

a v e b e e n

u n s u c c e s s f u l

due

o

your

being

u n a v a i l a b l e .

W

i n a l l y

were

abeto

c h e d u l e

a

al

fo r

t o m o r r o w ,

bu

you

h a v e

now

a n c e l e d

t.

You

stated

last

week

t h a t

sucha

al

w o u l d

no

be

p r o d u c t i v e

and

t h a t

you

e re

not

going

to

h a n g e

your p o s i t i o n .

We

are

nos k i n g

fo

r e d u c t i o n

in

he

oan

a m o u n t .

We

are

n o t

a s k i n g

for

deferral

or

a b a t e m e n t

o

any

payments.

What

w

re

a s k i n g

fo

s

or

Union

Planters to

act

reasona-

by

n d e r

the

c i r c u m s t a n c e s

and :

0

ct

r e s p o n s i b l y

as

an

m p o r t a n t

member

o

this

c o m m u n i t y

wh i ch

is

so

e p e n d e n t

on

o u r i s m .

We

re

asking

thaUnion

Planters

comply

w i t h

ou

a s t

letter

a g r e e m e n t

a nd

accept

as

security

for

Seven

H u n d r e d

O ne

T h o u s a n d 701

0 0 )

D o l l a r s

the

uaranty

o

ow n

Park,

a

i g n i f i c a n t

hotel

operator

and

o w n e r

havng

et

worth of

i f t y

S e v e n

Million ($

57,000,

000)

D o l l a r s .

We

are

onlys)( (

e e k s

away

fromhe

c o m m e n c e m e n t of

the

busy

p a r t

o

he year

tha

wll

m i n i m i z e

any

risk

hat

the

Sank

wll

h a v e

and

i n i m i z e

the

h a n c e s

o

e v e r

having

to

ra w

onthe

guaranty.

B a s e d

upon

c u r r e n t

b o o k i n g s ,

we

expect

C r o w n e

Plaza

to

x c e e d

its

o r e c a s t and

budget

for

October.

W e

ask

that

you

r e c o n s i d e r

theosit ion

tha

you

h a v e

taken.

And,whe

o u

ae

oing

soe b t

service

wll

continue

to

be

pad

incerely,

RDP

ROYAL

P A L M

HOTEL.

LP

y:

ADC H o s p i t a l it y


r

eneral

Partner

Richard

A

Mao

Vce

Presidentcc

R

onahue

Peebes

HCF

Group,

Inc

8/15/2019 LTC 191-2003 (1)

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08'

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305-

1

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3.

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14l00l/

0 5

RDP

Royal

Palm

Hotel,

LP

A X

To

unay

Dubin

F r o m :

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August

12,

2003Va

F a c s i m i le &

US

Mal

M.oyD

Tanis Senior

V i c e

P r e s i d e n t

U n i o n

P l a n t e r s

Bank

2800

Ponce

de

Leono u l e v a r d Coral

Gables.

Florida

33134

Dear

M.

Tanis:

W

ae

in

receipt

of

youletter

dated

A u g u s t8

which

arrived inour

offices

today.

The

a c t i o n

thaou

have

t a k e n

b y

issuing

a

efault

noice

reaive

to

ou

m o r t g a g e

l o a n

on

theoyal

P a l m

Hoe

is

n r e a s o n a b l e

and

n j u s t i f i e d .

It

is

a p p a r e n t

that

U n i o n

P l a n t e r s ,

w h a t e v e r

its

motives may

beas

o m p l e t e l y

i g n o r e d

the

i r c u m s t a n c e s s u r r o u n d i n g this

project

and

the

oan

A

the

risk

of

t a t i n g

the

obvious,

the

9

1

terrorist

attacks

h ad

ae v a s t a t i n g

effect

onh e hosptality

and tourism

industries,

and

h e y

have

y e t

to

fully r e c o v e r .

Miami Beach

was p a r t i c u l a r l y

hard

hit.

h e n ,

as

h i n g s s t a r t e d

to

come

b a c k ,

o u r

country

w e n t

toa

n

Iraq

andthe

ourism

industrial w a s

ht

g a i n .

Aa

result

o

ths

w

ave

had

to

ndure

an

c o n o m i c

r e c e s s i o n

tha

a u s e d

n e a r l y every

major

arline

to

p r o c e e d

to

a n k r u p t c y

filings

despite

m a s s i v e

g o v e r n m e n t

s u b s i d i e s .

T h es e

actions

have

also had

a

drect

impact

on

the

ra v e l and

t o u r i s m

i n d u s t r y .

The R o y a l

Pam

ote

o p e n e din

May

o

002eight

m o n t h s

after

thettacks.

It

pened

despte

n o r m o u s

challenges

that

w

not

only

faced,

bu

o v e r c a m e

r e l a t i v e

to

nviron-

m e n t a l p r o b l e m s .

s t r u c t u r a l

defects

in

ther i g i n a l

Royal

Palm

Hoe

s t r u c t u r e

and

d i s p u t es

w i t h

c o n t r a c t o r s .

Dng

h e

c o n s t r u c t i o n

period,

as

twas

e x t e n d e d

dueto

h e s e

problems,

we

o n t i n u e d

to

ay

deb

service.

The Hoe

opened

ahe


o

he

l o w e s t por t ion

o

he

year

fo r t o u r i s m

on

Miami Beach.

Once

o p e n e d .

we

e x p e r i e n c e d


and

substantial

p r o b l e m s

wth

h e

Hote

operator ,

T o w n

Pak

Hote l

Corporation (

Town Pak

d

arowne

P l a z a ) .

Youae

fully

f a m i l i a r

with

those

problems.

The

Hotel'

s

ookings

w e r e

well

be low

the

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Mr.

Roy

D

ans

A u g u s t

12,

2003

Page

2

at h e r

han

h y

a wa y

from

e a l i n g

wth

these

Issues,

w e

have

done

e v e r y t h i n g

in

ur

p o w e r

to

a k e

t h i s

Hotel

a

ucce ss

d e s p i t e

the

h a l l e n g e s

tha

w

a c e d .

A S

a

resut,

rowne

Plaza

has

r e m o v e d

and

r e p l a c e d

s u b s t a n t i a l l y al

of

its

a n a g e m e n t

personnel

such

tha

h e

Hoe

has

i n a l l y

b e g u n

to

eet

and

x c e e d

C r o w n e

Paza

s

orecasted

n u m b e r s .

We

h a v e

pursued

r e m e d i e s aganst

the

e n e r a l

c o n t r a c t o r

to

n f o r c e

ou

ights

in

e l a t i o n

to

o n s t r u c t i o n

problems.

W e

have been

in

o n t i n u o u s

n e g o t i a t i o n

wth

the

round

lessor

relat ive

to

ou

claims

a g a i n s t

the

round

lessor

i n c l u d i n g , a m o n g

other

things,

a

l a i m

u n d e r

an

n v i r o n m e n t a l

indemnity

c o n t a i n e d

in

the

g r o u n d

lease.

T h r o u g h

al

o

h is

and

despite

al

of

this, e

h a v e

paid

Union

Planters

its

d e b t

service

and

the

Hot e l

is

and

h a s

b e e n current

on

ts

payments.

No

only

that,

hi s

Hotel is

ar

from

be ing

a

istressed

p r o p e r t y .

The

oan

to

value

ratio

fo

hs

oan

and

r o p e r t y

is

p p r o x i m a t e l y

s i x t y -

five

percent (

65%

th

approximately

T w e n t y

M i ll io n (

20,

000,

000)

Dollars

o

a sh equty

in

he

p r o p e r t y .

And,

e

c o n t i n u e

to

pay

deb

service.

We ae

a i n t a i n i n g

a

e s e r v e a c c o u n t

wth

you

i n s t i t u t i o n ,

incash

n

an

mount

sufficient

to

o v e r

fou (

4

o n t h s ' of

deb

service

p a y m e n t s .

And,

w

ontinue

to

a y

deb

service.

The

ony

e a s o n tha

e

ae

ven

dealing

wth

nd

d i s c u s s i n g

t h e s e

issues

is

b e c a u s e

C r o w n e

Plaza

faled

to

ch ieve

a

odest

deb service

c o v e r a g e

ratio

during

the

eight

o

he

las

o u r i s t season.

The

o t e l .

had

C r o w n e

Plaza

achieved

sad

d e b t

service

c o v e r a g e

w o u l d have

been

r a n t e d

an

u t o m a t i c

extension

of

the

oan

T h e

catastrophic

effect

on

o u r i s m

by

he

terrorist

a t t a c k s

and

prob lems

wth

a n a g e m e n t

ofthe

Hotel

by

Crowne

P l a z a

c o m b i n e d

to

uch

an

extent

tha

the

r e q u i r e d

coverage

w as

not

achieved.

Bu,

e

c o n t i n u e d

to

ay

deb

service.

W

a v e

entered

ino

a

eries

o

e t t e r

a g r e e m e n t s

providing

fo

hort

extensions

and

which

c o n t e m p l a t e

e x t e n s i o n s

to

ebruary,

2006

provided

that

acceptable

l e v e l so

e b t

s e r v i c e

coverage

a re achieved.

We

strongly

b e l i e v e

tha

those leves

can

now

be

achieved

in

iew

o

he a n n e r

inwhich

the

o t e l

is

u r r e n t l y

being

a n a g e d .

We

h a v e

been

e g o t i a t i n g

wth

Town

Pak

over

the

last

several

w e e k s

to

inaize

an

a g r e e m e n t

thawill

be

a c c e p t a b l e

to

Union

P l a n t e r s

w h e r e b y

T o w n

P a r k

will provide

the

guaranty

p e r f o r m a n c e

of

the

o t e l

tha

youe q u i r e

in

rder

for

the

o a n

to

be

x t e n d e d . We

u n d e r s t a n d

tha

o u r

r e q u i r e m e n t

for

o w n

Park'

s

guarantee

was

h e

result

o

he

B a n k '

s

o sso

conf idence

in

own

ark'

s

ablity

to

a c c u r a t e l y

f o r e c a s t

its

fuue

p e r f o r m a n c e

or

itsblity

to

c h i e v e

o p e r a t i n g

results

c o n s i s t e n t

wth

uc h

projections.

In

view

o

he

a m o u n t

o

he

cash

c o l l a t e r a l

account

t h a t

is

already

b e i n g

m a i n t a i n e d

as

s e c u r i t y

fo

he

oan,

he

ne

amount

that

you

ae

eekingto

e

g u a r a n t i e d

by

Town

Park

is

pproximately

Seven

H u n d r e d

One

Thousand ($

701,

000

ollars.

We

h a v e p r o v i d e d

financial

s t a t e m e n t s

to

you

from

Town

Park

which

evidence (

a n d

you

have

onfirmed)

t h a t

T o w n Pak

has

a

e

worth

o

i f t y

Seven

Million ($

57.

000,

000)

o l l a r s .

T h i s

ne

o r t h

is

ery

u b s t a n t i a l

reaive

to

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M.

oy

D.

Tans

August

12

2003

Page

3

e v e r t h e l e s s ,

you

have

e j e c t e d

Town

a rk

as

a

u a r a n t o r

under

these

c i r c u m s t a n c e s . T ha t

rejection

is

l e a r l y

u n r e a s o n a b l e

and

n j u s t i f i e d

in

vew

of

he

ne

o r t h

of

the

p roposed

guarantor

and

the

m o u n t

to

be

u a r a n t i e d .

And

we

continue

to

ay

deb

s e r v i c e .

D e s p i t e

Town

Pak

s

Ffty

e v e n Mllion($

57,

000.

000)

o l l a r s

net

worth,

you

re

i n s i s t i n g

that

itspaen.


Hotels,

g u a r a n t y

the

mount.

We

h av e

e x p l a i n e d

to

you

h a t I n t e r c o n t i n e n t a l

wll

ot

give

a n y

g u a r a n t i e s .

We

a v e

been

ttempting

d u r i n g

the

ast

w e e k

to

c h e d u l e

a

all

b e t w e e n

you

and

a

e n i o r

of f i ce r

o

n t e r c o n t i n e n t a l

H o t e l sin

o n d o n , but

we have

ee n

u n s u c c e s s f u l

due

to

ou

e i n g u n a v a i l a b l e . We

finally were

able

to

c h e d u l ea

al

for

t o m o r r o w ,

bu

ou h a v e

now

cance led

it.

ou

s t a t e d

las

week

tha

s u c h

a

all

would

not

b e

productive

a n d

that

you

were

not

going

to

hange

your

position.

W e

ae

o t

a s k i n gfo

a

e d u c t i o n

in

the

oan

a m o u n t .

We

ae

no

s k i n g

for

deferra

or

a b a t e m e n t

of

any

a y m e n t s .

W h a t

we

ae

s k i n g

for

is

o

n i o n

P l a n t e r s

to

c

r e a s o n a -

bly

under

the c i r c u m s t a n c e s

and to

ac

e s p o n s i b l yas

an

mportant

m e m b e r

of

this

c o m m u n i t y

which

is

so

e p e n d e n t

on

o u r i s m .

We

ae

sking

tha

Unon

P l a n t e r s

comply

w i t h

ou

last l e t t e r

a g r e e m e n t

and

accept

as

security

for

e v e n

H u n d r e d

One

T h o u s a n d

701,

000

ollars

the

u a r a n t y

of

Town

P a r k ,

a


hotel

o p e r a t o r

and

w n e r

h a v i n g

a

et

w o r t h of

Ffty

Seven

M i ll io n (

57

00,

000)

o l l a r s .

We

ae

only

sx (

6

eeks

a w a y from

h e


o

h e

busy

part

of

the

yea

tha

wll

minimize

any

risk

tha

the

a n k

wll

a v e

and

i n i m i z e

the

c h a n c e so

ever

h a v i n g

to

ra w

onhe

guaranty.

Based

upon

cur rent bookings,

we

e x p e c t

G r o w n e

Plaza

to

x c e e d its

orecast

and

budget

for

O c t o b e r .

We

ask

that

you

e c o n s i d e r

the

o s i t i o n

t h a t

you

have

taken

while

you

are

d o i n gso

eb

service

wll

c o n t i n u e

to

be

ad.

Sincerely,

RDP

R O Y A L

PALM

HOTEL.

LP

By:

ADC

Hospitality


I

eneral

Partner

cc

R

onahue

Peebles

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