Northern Riverfront Marina and Hotel LLLP

BUSIESS PLA AD FIACIAL PRO-FORMA

Business Plan

orthern Riverfront Marina and Hotel Limited Liability Limited

Partnership
Northern Riverfront Marina and Hotel Limited Liability Limited Partnership is
commencing a new Project on the Cape Fear River in downtown Wilmington, North
Carolina. This Project represents the cornerstone of an overall master-planned
redevelopment. A summary of that overall development follows herein. The starting
point of all good developments is the foundation. The portion of this overall riverfront
project being undertaken by this Limited Partnership is the Marina and Hotel component.

On October 8, 2009, the Partnership (Buyer) entered into a Purchase and Sale Agreement
with City Marina Wilmington, LLC and Riverfront Holdings II, LLC (Sellers) to acquire
a total of 566,280 square feet (13+/- acres) of real property located at 1 Hanover Street
and 10 Harnett Street, Wilmington, NC.

The first component is the construction of a new full service Marina along the Cape Fear
River in historic downtown Wilmington. The site is 11.75 acres +/- and will have up to
204 slips ranging in size from 40 to 100 feet. The Marina portion of the project
encompasses a 14 wide River Walk, several kiosk retail shops on the existing concrete
docking facility, as well as a diesel fuel depot and parking.

Marina construction is expected to take 7 months for excavation and an additional 4 to 6

months to complete the first phase of slips. The engineering and construction drawings
are complete. Bids for construction are finalized. Permits for dredging, demolition and
construction have all been secured with all local, state and federal agencies. The
developer has been released for construction by required governmental agencies. Final
agreements have been executed and recorded between the Developer and the City of
Wilmington to share the cost of the marinas bulkhead, as well as reimbursement of
construction costs for a River Walk connecting the property to the Citys new Convention
Center and the historic downtown district to the south.

The marina will be operated by a full time professional staff. Initial operations of the
marina will produce income from transient rental and short term leases. The marina
income will be further enhanced by fuel and retail sales. The General Partner will
determine, based on market conditions, to either commence slip sales, or maintain leasing
program until initial investment period is complete. This determination will be made with
priority placed on preservation of capital and maximizing profit to the Limited
Partnership. Return of investment capital shall be achieved through sales of marina slips,

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or by selling the entire marina asset once income stabilization and EB-5 program
requirements have been met. Current appraisals show a 39 Million ($39,000,000) Dollar
value for the marina when completed.

The second component of this Project is the construction and operation of a hotel, located
on a 1.26 acre site, adjacent to the Marina and the City of Wilmingtons new Convention
Center. The 105,000 square foot Convention Center is fully funded and under
construction, with opening scheduled for spring 2010. Our Projects hotel, the closest to
the Citys Convention Center, will be located diagonally across the intersection from the
Convention Center, allowing it to capture a majority of convention business. The hotel
will include a minimum of 120 rooms, hotel amenities, and an additional 30,000 square
feet of retail space, (to include dining and family entertainment components) and parking.
The hotel will host a well-known and respected brand-name flag and provide quality
service and hospitality at competitive rates.

Hotel construction is expected to take approximately 17-20 months. The anticipated

schedule is 5 months to complete final engineering, approval, and permitting. Actual
construction is anticipated to take an additional 12-15 months.

The Project will be positioned to sell in 3-5 years when income stabilization is achieved
& EB-5 program requirements have been met. Based on historic market valuation
models, at full stabilization, anticipated hotel value should be between Sixteen Million
($16,000,000) and Twenty Million ($20,000,000) Dollars.

The General Partner estimates the total cost of the Project to be Forty-two Million Dollars
($42,000,000), consisting of Twenty-four Million Dollars ($24,000,000) from direct
developer investment, reimbursements from the City of Wilmington, and existing debt.
The remaining Eighteen Million dollars ($18,000,000) is being raised in accordance with
terms of the Offering Circular and Subscription Agreement.

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Marina and Hotel: The cornerstone of the overall master-planned redevelopment

The overall master plan is a 39+ acre site located in the central business district of
downtown Wilmington, North Carolina. The entire riverfront redevelopment project is
estimated to be over 750 Million dollars. The project stretches nearly one mile along the
Cape Fear River and is the only remaining undeveloped river frontage in downtown
Wilmington. The property has historical significance dating back to the late 1700s as a
central shipping port for the region.

The site is situated minutes from Interstate 40 and US Routes 17 & 421, and is within 5
miles of the Wilmington International Airport to the north and within 10 miles of the
Atlantic Ocean to the east. The project lies immediately south of US Route 133 and
serves as the northern entrance to historic downtown Wilmington. The entire project is
zoned Central Business District (CBD), allowing for high-density vertical development.
The City of Wilmingtons new Convention Center borders the Marina property. The site
also shares a boundary with Cape Fear Community College and the new 400,000-square
foot corporate headquarters of global pharmaceutical research company PPD, with 1800
employees.

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The entire master plan site is comprised of several components, as follows:

The City Marina/Hotel (the Limited Partnership Investment Project)
o As described above
Baseball Stadium (FUTURE DEVELOPMENT)
o Professional baseball team (A or AA level)
o Concerts, events
o 5,000 seat capacity
Mixed use commercial space (FUTURE DEVELOPMENT)
o office/retail/hotels
o Over 450,000 Square Feet
Residential (FUTURE DEVELOPMENT)
o Waterfront and urban style condominiums
o Over 600 units

This project assemblage and development plan completes a vision and a milestone for the
City of Wilmington and is a great opportunity for the developers to create a high-profile,
marketable and profitable landmark mixed-use development. The development team has
worked closely with the City to achieve a plan that corresponds with the City of
Wilmingtons Vision 2020: A Waterfront Downtown. The plan focuses on revitalizing the

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downtown historic center by reclaiming the Cape Fear waterfront. The team has
diligently worked toward creating strategic alliances with various stakeholders, including
PPD, Cape Fear Community College, University of North Carolina-Wilmington, adjacent
property owners, and regional builders/developers to create a compelling vision.

Photo of PPD global headquarters and project site

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Government Support and Incentives.

The developer has completed and executed a development agreement with the City of
Wilmington focusing on the Marina/Hotel portion of the project. Elements of
agreement include (1) joint construction of the bulkhead connecting the marina with the
Citys Convention Center; (2) a cost recovery mechanism for public river walk and park
improvements; (3) zoning flexibility and expedited approvals processes. The property is
within a qualified New Market Tax Credits area, which will allow for additional
development incentives and returns

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Environmental Summary

The developer has completed and recorded a Brownfields Agreement (BFA) with the
State of North Carolina Department of Environment and Natural Resources (DENR). The
BFA allows for all proposed uses, and a five-year real estate property tax abatement.

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Development Team

Owner/Developer: Wilmington Riverfront Development, LLC

Land Planner/Architect: Cline Design
In-house Planner: Jerry Haire
Marine Consultant Design and Economic: Moffatt & Nichol
Environmental Counsel: Kurt Olson, Esq.
Environmental Engineer: Rick Catlin (Catlin Engineering)
Project Manager: Zephyr Development
General Contractor: Plantation Builders
Parking Consultant: Steve McLaurin, McLaurin Parking

Experience

The individuals comprising the General Partnership have over 80 years combined
experience in real estate development and management. This experience demonstrates a
proven track record in acquisition, entitlement, development, managing and sales.
Accomplishments span all segments of real estate development, including commercial,
mixed-use, and residential master-planned communities. The general partners have raised
over 100 million dollars in equity for past projects. The members have developed over
15,000 single family and multi-family lots, and substantial commercial square footage.
Past projects have been located in Colorado, Florida, California, North Carolina,
Oklahoma, and Texas.

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Market Overview

This Project is in a premier location in historic downtown Wilmington, NC, located in the
rapidly developing Northern portion of downtown, on the banks of the Cape Fear River.

In the past decade, a renaissance has occurred in the

Greater Wilmington area, reaffirming the storied
history of the region when Wilmington was the largest
city in North Carolina. People of all ages and
backgrounds have beenand continue to bedrawn to
the mild climate, beautiful shoreline, historic
attractions, inviting business atmosphere and
hometown feel of the Cape Fear Coast. In 1998,
accolades about Wilmington from national magazines,
newspapers and surveys began in earnest. One of the
first named our city one of the 100 Best Small Art
Towns in America. Since that time, Wilmington has
garnered praise as one of Americas 100 Best
Retirement Towns (Where to Retire magazine), the
12th best place to set up a medical practice (Modern
Physician magazine), as number 36 on a Forbes
magazine list of the 200 Best Places for Business and
Careers, and in Oct 2006 Wilmington was listed as one
of the top ten cities in the US for projected real estate
appreciation in the next five years by CNN Money/Business.

One of Wilmington's greatest resources is its location nestled between the Cape Fear
River and the Atlantic Ocean. It has an enduring relationship with the water that is
interwoven through its history. Just as colonists relied on the water for transportation of
goods to build the region, so does 21st-century Wilmington rely on it to attract visitors
and businesses, and to import and export materials from and to the world through the
North Carolina State Ports.

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This is also a region where the past is honored through painstaking preservation of North
Carolina's largest collection of historic buildings and homes downtown. The historic
character of the National Historic Register District offers a lively streetscape of
restaurants, outdoor cafes, coffee shops, banks, and retail stores all framed against the
backdrop of the Cape Fear River. But Wilmington is also a place where the building of a
modern art museum in the suburbsdesigned by the architect of the addition to the
world-famous Guggenheimelicits enthusiastic community support. Even the beaches
contrast with each other, from quiet residential neighborhoods, to lively areas of play, to
undeveloped barrier islands.

These unique characteristics helped draw the film industry to the city in 1983. Since that
time, Wilmington has grown into the third most active film location, behind only Los
Angeles and New York. The NBC series Surface and the hit WB series Dawson's Creek
and One Tree Hill have been filmed in Wilmington, among others, as well as hundreds of
films such as Divine Secrets of the Ya Ya Sisterhood, Domestic Disturbance, and I Know
What You Did Last Summer.

Waterfront Living

Wilmington is a city with a strong boating community, and one of the regions most
appealing aspects is the lifestyle of waterfront dining and recreation that this entails.
Waterfront development is strictly regulated by local, state, and federal governments, so
there continues to be demand for boat slips, marinas, and related waterfront businesses,
including restaurants and hotels.

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Additional facts and information as of August, 2009

The Cape Fear Community College received approval for a 164 million dollar
bond for campus expansion, adjacent to the project, and construction has begun
on a variety of new buildings.

PPD now occupies its world headquarters building on a site adjacent to our
project. The building is 400,000 square feet and houses 1800+ employees

Screen Gems Studios recently constructed a $120 million expansion to give it one
of the largest stages and special effects water tanks in North America. The studios
in Wilmington have completed over 350 film, television and commercial projects,
earning Wilmington the nickname Hollywood East.

The Developer is in negotiations with league ownership to provide an A or

AA baseball franchise on its site, at a new stadium to be built.

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Purchase Terms

Wilmington Riverfront Development LLC formed the Limited Liability Limited

Partnership to purchase the Property for Twelve Million Seven Hundred Thousand
Dollars ($12,700,000). Closing is projected to occur in October 2009. The Partnership
plans to be capitalized at Eighteen Million Dollars ($18,000,000) to purchase and develop
the Property. The Partnership estimates construction and soft costs for the Project to be
approximately Forty-Two Million Dollars ($42,000,000).

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Financial Pro-Forma

Marina & Hotel Development Costs Total

Marina Site Purchase Price $9,700,000
Hotel Site Purchase Price $3,000,000
Demolition $2,700,000
Engineering and Survey $470,000
Permits $125,000
Marina Docks and Piers $2,100,000
Excavation and Disposal of dredge material $2,000,000
Marina Accessories (fuel depot, parking) $1,500,000
Bulkhead $2,050,000
River Walk $4,200,000
Environmental oversight $125,000
Hotel/retail space Construction $8,600,000
General & Administrative $1,028,750
Contingency $617,250
Project Management Fee $1,028,750
Debt Service $2,660,000

Total Projected Development Cost $41,904,750

Sales and Income Gross Profit

Marina Slip Sales $45,000,000
Marina Mgmt, transient & operations sale $7,000,000
Sales Commissions / Closing Costs -$2,700,000

Hotel Sale $16,750,000

Retail Lease Income $700,000
Hotel Income $2,300,000
Marina Income 500,000
City Reimbursements $5,050,000
Investor Interest Payment -$1,907,000
Total Projected Income $72,693,000

Total Projected Development $41,904,750

Projected Gross Profit $30,788,250

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Other Due Diligence

As part of the Partnerships due diligence, the following information has been reviewed:
1. Title commitment
2. Survey
3. Phase 1 Environmental Site Assessment and Brownfields Agreement (BFA)
4. Soils Information
5. Project site survey
6. Appraisal
7. Master Plan
8. Marina Permits
9. Marina Construction Plans
10. City development agreement

Exit Strategy

Northern Riverfront Marina and Hotel LLLP focuses, first and foremost, on preservation
and protection of investor capital. The General Partners in this Limited Partnership have
personally invested over 9 million dollars in the overall master plan. This Project is the
culmination of over 4 years of vision and perseverance.

In summary, the Partnerships goal is the construction and operation of the marina, hotel,
and auxiliary businesses to generate revenues for the Partnership.

Once job creation requirements, as stipulated by the EB-5 Immigrant Investor program,
have been met, the Partnership will attempt to effect a sale of the stabilized assets.
Throughout the Project life cycle, the Partnership may conduct ongoing individual sales
of boat slips in the marina. The General Partner will maintain the following priorities, in
order of importance, throughout the Project:

1. Preservation of investment and compliance with EB-5 Immigrant Investor

Program
2. Maximizing Return on Investment (ROI) for all investors

For additional information please contact:

Chuck Schoninger:
910.251.6160
719.499.5533
chucks@zephyrdevelopment.com

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