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* Pinnacle agrees to maintain strict confidentiality with respect to records, documents,
findings, or recommendations associated with the engagement.

* Pinnacle’s work hereunder shall not be construed as offering any advice or opinions on
whether to invest, lend or otherwise financially participate in the Project. Any business
decisions made regarding whether to invest, lend or otherwise financially participate in the
Project shall be the sole decision of the person so lending, investing or financially
participating.

® Pinnacle prohibits the use of its work product, or the name of Pinnacle Advisory Group in any
financing document, investment or offering materials without its prior written consent. No
work of Pinnacle may be used to solicit investors in the Project.

*® Pinnacle Advisory Group regularly performs consulting engagements for a wide range of
hospitality industry clients, including both owners and managers of hotels. From time to time
Pinnacle Advisory Group may be engaged to represent clients whose interests are engaged in
the same market as the Project or whose interests may be adverse to Client. By signing this
agreement, you agree to waive any past, present or future conflicts related to Pinnacle’s
work for other hotels in competition with the Project or whose interests may be adverse to
Owner

* Pinnacle Advisory Group will not use your name, trademarks or logo for any purpose without
your prior written consent.

It is important to note that our findings and written report are for your internal use only. Our report may
not be used by prospective developers to obtain financing or investment. It is assumed that any
prospective developer would complete their own due diligence.

Pinnacle Advisory Group
Boston NewYork NewportBeach Portland Tampa Washington DC

Hospitality Consulting
Asset Management

Real Estate Appraisal Rachel J. Roginsky, ISHC

Litigation Support

July 23, 2018

Tim Cummings

Director of Economic Development
City of Nashua,

229 Main Street

Nashua, NH 03061-2019

Sent via email: cummingst@nashuanh.gov

Dear Mr. Cummings:

Thank you for the opportunity to provide consulting services to the City of Nashua (“Client”). At your
request, Pinnacle Advisory Group (“Pinnacle”) has prepared this brief proposal summarizing the
scope of work and engagement terms with respect to assisting you with an analysis of the Nashua
lodging market which will lead to the understanding of the general feasibility for developing a new
hotel (“Project”). More specifically, you have indicated that the City owns two sites in Nashua, and
you are considering selling or leasing one site to a hotel developer. Before moving forward, you have
asked Pinnacle to undertake a “high level’ analysis on the lodging market so that we can provide you
with advice regarding hotel feasibility. This proposal presents a summary of the scope of services, our
fees, and timing to assist you with this engagement.

It is important to note that our findings and written report are for your internal use only. Our report may
not be used by prospective developers to obtain financing or investment. It is assumed that any
prospective developer would complete their own due diligence.

SCOPE OF SERVICES
The tasks that we will complete include:
e Inspect both sites and the surrounding area.

e Meet with you to discuss the attributes of the Nashua market including a discussion of the
planned developments and growth opportunities within the City. We will review all relevant
data that you provide to us.

e Conduct a market supply and demand analysis of the Nashua lodging market which will
include interviews with competitive hotel managers, collection of data on proposed hotels,
and an analysis of current and future lodging demand generators.

e Based on our research, we will prepare projections of occupancy and average room rate, and
financial projections for a proposed hotel on one of the subject sites. Per your direction, we
will assume that the proposed hotel would contain approximately 125 guest rooms and
would be developed as a nationally branded, select service hotel.

e Gather industry data on the construction costs to develop a 125 room, select service hotel,
along with market based financing terms.

Principal

www.pinnacle-advisory.com
98 North Washington Street, Suite 403, Boston MA 02114 phone 617-722-9916 fax 617-722-9917

Tim Cummings
July 23, 2018

e Based on the projected income stream for the Project, coupled with general development
costs and financing terms, coupled with required returns on investment, we will determine
the feasibility for hotel development. For the purpose of this analysis, we will ascribe no
value to the land assuming that the land is leased for $1.

® Upon completion of our market research and analysis, we will prepare a brief memo (6-8
pages) that that addresses the following:

1. Market conditions. We will describe current and projected market supply and
demand factors that are relevant to the Project.

2. Project projections. We will present financial projections for the proposed Project
noting that the projections are subject to change based on more specific facility
assumptions and management structure.

3. Project feasibility. We will describe the financial feasibility of the Project, and
quantify Project shortfalls (the investment needed by the City for the Project to be
feasible).

Our brief report will be for your internal use only. The report, and our findings, may not be relied
upon by prospective developers to obtain financing or investment.

ENGAGEMENT SCHEDULE
Based on our current schedules, we will require four weeks to complete the assignment.
PROFESSIONAL FEES

Our professional fees to complete the engagement described herein will be $15,000. In addition to
our professional fee, we expect to be reimbursed for reasonable out-of-pocket expenses including
the purchase of any STR Trend Reports and travel expenses. We will submit our final bill when we
submit the draft report. Payment will be due 14 days after receipt. Payment should be forwarded to
our administrative office in Boston for processing at the following address: Pinnacle Advisory Group,
98 North Washington Street, Suite 403, Boston, MA 02114. Wire transfer instructions can be
provided at your request.

Should the engagement be canceled at any time during the course of our work, we expect to be
reimbursed for our time, at our regular per diem rates, plus all reasonable out-of-pocket expenses
actually incurred through the date of termination.

LIMITATIONS OF THE STUDY
Our findings are subject to the following limitations:

e {tis expressly understood and agreed that Pinnacle’s study and reports do not include any
opinions or analysis regarding environmental, zoning, land use, licensing and/or other legal
and regulatory requirements for the project. Rather, such legal and regulatory issues are
beyond the scope of Pinnacle’s work and should be dealt with by the Client separately
through appropriate experts.

® Pinnacle offers no opinions that are legal in nature and expressly disclaims any responsibility
for same. The Client, and not Pinnacle, is responsible to ensure that the Project has all
necessary legal requirements to operate its business in accordance with the assumptions

made by Pinnacle in its reports.

Pinnacle Advisory Group

Tim Cummings
July 23, 2018

e Pinnacle shall not be required to give testimony or appear in court or at a deposition by
reason of this assignment, with reference to the property in question unless arrangements
have been made previously therefore.

e Pinnacle shall not have responsibility to update its findings or analysis regarding the Project
to take into account changes in market or other conditions that occur subsequent to the
completion of its fieldwork. Rather, Pinnacle’s work shall be deemed completed as of the
date of its last report.

e Client shall indemnify, defend and hold harmless Pinnacle from and against all claims,
liabilities, damages, costs and expenses of any nature suffered or incurred by Pinnacle
(including, without limitation, reasonable attorneys’ fees) arising out of or in connection with
Pinnacle’s work under this Agreement. This provision shall survive termination or expiration
of this Agreement.

e Pinnacle shall use its expertise and best efforts in order to analyze the viability of the
proposed Project. However, it is understood and agreed that there are many factors that
may impact the success or failure of a business including those that are beyond the control of
any party such as general economic conditions, force majeure, acts of war or terrorism,
weather events, work stoppages, etc. As such, it is understood and agreed that nothing
contained in any work prepared by Pinnacle should be construed or considered as a
guarantee of actual performance of the Project and Pinnacle expressly disclaims any liability
therefore.

e Pinnacle agrees to maintain strict confidentiality with respect to records, documents,
findings, or recommendations associated with the engagement.

® Pinnacle’s work hereunder shall not be construed as offering any advice or opinions on
whether to invest, lend or otherwise financially participate in the Project. Any business
decisions made regarding whether to invest, lend or otherwise financially participate in the
Project shall be the sole decision of the person so lending, investing or financially
participating.

e Pinnacle prohibits the use of its work product, or the name of Pinnacle Advisory Group in any
financing document, investment or offering materials without its prior written consent. No
work of Pinnacle may be used to solicit investors in the Project.

e Pinnacle Advisory Group regularly performs consulting engagements for a wide range of
hospitality industry clients, including both owners and managers of hotels. From time to time
Pinnacle Advisory Group may be engaged to represent clients whose interests are engaged in
the same market as the Project or whose interests may be adverse to Client. By signing this
agreement, you agree to waive any past, present or future conflicts related to Pinnacle’s
work for other hotels in competition with the Project or whose interests may be adverse to
Owner

@ Pinnacle Advisory Group will not use your name, trademarks or logo for any purpose without
your prior written consent.

Pinnacle Advisory Group

Discount Rate

The discount rate used to measure the total pension liability was 6.75%. The projection of
cash flows used to determine the discount rate assumed that the plan member contributions
will be made at the current contribution rate and that employer contributions will be made
at rates equal to the difference between actuarially determined contribution rates and the
member rate. For purposes of the projection, member contributions and employer service
cost contributions are projected based on the expected payroll of current members only.
Employer contributions are determined based on the pension plan’s actuarial funding policy
and as required by RSA 100-A:16. Based on those assumptions, the pension plan’s fiduciary
net position was projected to be available to make all projected future benefit payments to
current plan members. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total
pension liability.

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate

The following presents the City’s proportionate share of the net pension liability calculated
using the discount rate of 6.75%, as well as what the City’s proportionate share of the net
pension liability would be if it were calculated using a discount rate that is one percentage-
point lower or one percentage-point higher than the current rate:

1% Current 1%
Decrease Discount Rate Increase

$414,272,949 $320,002,458 $242,970,985

Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the
separately issued NHRS financial report.

Public Works Employees’ Retirement System

The City follows the provisions of GASB Statement No. 67, Financial Reporting for
Pension Plans and GASB Statement No. 68 Accounting and Financial Reporting for
Pension, with respect to the employees’ retirement funds.

The following pension disclosures for the Public Works Employee’s Retirement System
pension plan are based upon an actuarial valuation performed as of July 1, 2020, using a
measurement date of June 30, 2021.

Plan Description

All Public Works employees of the City are members of the Public Works Employees’
Retirement System (the System), a single-employer, defined benefit PERS. Eligible
employees must participate in the System. The pension plan provides pension benefits and
death and disability benefits to employees reaching age 60, provided they have
accumulated 10 years of service. A City ordinance passed in 1947 established the System
which is administered by a five-member Board of Trustees. Amendments to benefit

8]

Tim Cummings
July 23, 2018

ACCEPTANCE

If the foregoing proposal details the nature of the work you wish undertaken at this time and
arrangements are satisfactory, please sign the enclosed copy of this proposal and return it to us as
our authorization to schedule the assignment. If, on the other hand, you have any questions, please
feel free to contact us. We look forward to working with you on this interesting assignment.

Respectfully submitted,

Rachel J. Roginsky, ISHC

Principal

APPROVED AND ACCEPTED
By:
Title:

Date:

Pinnacle Advisory Group Libm,

| THE CITY OF NASHUA “The Cate City’

Financial Services

Purchasing Department

August 30, 2018
Memo #19-056

TO: MAYOR DONCHESS
FINANCE COMMITTEE

SUBJECT: CONTRACT FOR RESIDENTIAL REAL ESTATE BROKERAGE & MARKETING
SERVICES (VALUE: $0)
DEPARTMENT: 183 ECONOMIC DEVELOPMENT; FUND: NONE

Please see attached communication from Tim Cummings, Director of Economic Development dated
August/2018 for the information related to this purchase.

Pursuant to NRO § 5-83 Professional Services (A) In the purchase of accounting, architectural, auditing,
engineering, legal, medical and ambulance services and purchases of independent professional
consultant services for personnel, data processing, actuarial, planning, management and other
comparable purchases competitive bidding shall not be required.

The Director of Economic Development and the Purchasing Department recommend approval of this
contract in an amount of $0 to Brocku Realty Group of KW Realty Metropolitan of Bedford, NH.

Purchasing Manager

Cc: T Cummings J Graziano

229 Main Street e Nashua, New Hampshire 03061 © Phone (603) 589~3330 e Fax (603) 589-3233

"The Gate City"

4s THE CITY OF NASHUA

Economic Development Division

To: Mayor Donchess, City of Nashua

From: Tim Cummings, Economic Development Division Director
Ce: Janet Graziano, Financial Manager

Date: August/2018

Re: Real Estate Broker Contract

Request
The Office of Economic Development requests the approval of the contract before you in the amount of
30,00 with Brochu Realty Group of KW Realty Metropolitan of Bedford, New Hampshire.

Background on Procurement

This contract is with a reputable real estate brokerage group. In May of 2018, the City of Nashua Office of
Economic Development issued a Request for Proposals seeking responses from professional real estate
brokers and agents to assist in the marketing and disposition of residential property obtained either for
related infrastructure projects and now deemed surplus or tax deeded property.

While following required Purchasing Department protocol for public notification of brokerage/marketing
services, staff took additional steps to identify the most capable companies in Nashua. Notices of the
availability to pursue this work were sent directly to five (5) firms. The City received one (1) response.

The following is the current list of property that city will be selling:

* 11 Baldwin Street - Nashua
* 9 Hillcrest Avenue - Nashua
® 38 % West Hollis Street - Nashua

Enclosure
Please see the enclosed RFP and Respondent.

Enclosure

RFP0019-060418
Real Estate Brokerage & Marketing Services

Response From
Brochu Realty Group
Of Keller Williams Metropolitan Realty

THE CITY OF NASHUA

Miecamectel Seemicen

“The Gate City"

Purchasing Qefairtesest

Vay 25, 2018

Reguest for Proposals

RFPOOLS-060448
Real Estate Brokerage & Marketing Services

The City of Nashua, NH seeks a real estate firm specializing in residential real estate to provide
brokerage and marketing services for property owned by the City of Nashua. itis the intent of
this RFP to have the successful broker/firm enter into a Professional Services Contract with the

City to supply real estate services as outlined herein.

Real estate business opportunities include the marketing/sale of surplus property, negotiation
of ground and facility leases, property management, and acquisition/assembly/trade of real
property. A non- exhaustive list of City owned properties and their potential business
opportunity is attached as Exhibit “A.”

INSTRUCTIONS TO VENDORS:

The City is now accepting bids electronically via Bid Express. Please review the attachments,
Bid Express Vendor Guide and Vendor Set-up Guide for more information. A Digital 1D is not
required for this RFP. If you choose to submit a paper proposal it must be submitted in sealed
envelope with one (1) original and two (2) copies clearly marked “RFP9019-60418 Real Estate
Brokerage & Marketing Services” c/e Central Purchasing Office, City Hall, Room 128, 229 Main
Street, Nashua NH, 03061. The names of those agencies that submit a proposal will be posted
on the website, under Services: Bid Opportunities; Bid Results and on Bid Express, within three
(3) hours of opening.

Regardless of the method of submission, proposals must be submitted no later than 3:00 PM
EST on Monday, June 4. Proposats must be submitted in the format provided and address the
items specified, Postmarks or other timestamps will not be accepted In lieu of actual delivery.
The firm can use whatever delivery mechanism it chooses as long as it remains clear that the
firm is responsibie for submissions prior te the date and time,

The City of Nashua assumes neo liability for the payment of costs and expenses incurred by any
bidder in responding to this request for proposals. All proposals become the sole property of

IRFPOOLS-0604.18 Real Estate Brokerage & Marketing Services &