Hill AFB Falcon Hill EUL Project Overview Sunset Ridge Development Partners

1. Hill AFBFalcon Hill EULProject OverviewSunset Ridge Development Partners

2. What is EUL? Enhanced Use Lease (EUL) 50-yr Lease of Govt. Land for Private Development AF Owns Land; Developer Owns Commercial Bldgs AF Receives Payment In-kind Through Profit Sharing Agreement The Hill AFB Falcon Hill project is based on changes in the law that occurred in 2002 to allow DoD to take underutilized property and lease it to a developer for 50 years in exchange for value back to the AF in the form of in-kind consideration. Development concept includes “National Aerospace Research” component and fits into the aerospace/aviation economic cluster, which was one of Governor Jon Huntsman’s 8 economic cluster initiatives that are spear headed by the Governor’s Office of Economic Development” (GOED). AF to Own and Operate Govt. space Upon Construction Completion. AF Receives Value in the Form of New Infrastructure, Gates and AF Buildings Does Not Require any AF Funding – Value From Profit Sharing and State Aid. Replacement of AF Infra-structure Without Federal Tax Dollars. Developer Finances, Constructs, Leases & Operates Commercial Buildings. The Hill AFB Falcon Hill project is based on changes in the law that occurred in 2002 to allow DoD to take underutilized property and lease it to a developer for 50 years in exchange for value back to the AF in the form of in-kind consideration. Development concept includes “National Aerospace Research” component and fits into the aerospace/aviation economic cluster, which was one of Governor Jon Huntsman’s 8 economic cluster initiatives that are spear headed by the Governor’s Office of Economic Development” (GOED). AF to Own and Operate Govt. space Upon Construction Completion. AF Receives Value in the Form of New Infrastructure, Gates and AF Buildings Does Not Require any AF Funding – Value From Profit Sharing and State Aid. Replacement of AF Infra-structure Without Federal Tax Dollars. Developer Finances, Constructs, Leases & Operates Commercial Buildings.

3. Hill AFB 70 yr old WW II Warehouses Turned into Office Space for Employees 130+ Buildings Need Replacement Military Construction Costs Exceed $350M Why EUL at Hill AFB? 3 Conversion took some ingenuity in and of itself, however facilities outdated at this point. Renovation of Existing Facilities not Economical. There are just under 6,000 personnel that currently occupy these converted facilities. The 134 building are deteriorating quickly and the cost to maintain them increases every year. Renovation of these existing building would require roughly $220M in MILCON funding. Renovation of these buildings would not solve all of the problems that result from the age of the buildings (poor energy efficiency etc) and lack of adequate AT/FP and parking. MILCON construction funds are limited and difficult to obtain for administrative office space relative to other weapon system related projects. Conversion took some ingenuity in and of itself, however facilities outdated at this point. Renovation of Existing Facilities not Economical. There are just under 6,000 personnel that currently occupy these converted facilities. The 134 building are deteriorating quickly and the cost to maintain them increases every year. Renovation of these existing building would require roughly $220M in MILCON funding. Renovation of these buildings would not solve all of the problems that result from the age of the buildings (poor energy efficiency etc) and lack of adequate AT/FP and parking. MILCON construction funds are limited and difficult to obtain for administrative office space relative to other weapon system related projects.

4. State & Community Support Military Installation Development Authority (MIDA) Facilitate Bonding and Tax Increment Financing (TIF), Manage In-kind Consideration Accounts (ICA), Grant Development Urban Planning, Zoning, Taxes, Service Agreements Davis and Weber Counties and all 4 Local Cities (Clearfield, Riverdale, Roy and Sunset) Provided Resolutions of Support Involves an agreement between the USAF, a commercial developer, the Military Installation Development Authority (“MIDA”) chartered by the State of Utah in May 2007. 7 member Board: 3 Mayors on board (Clearfield: Don Wood, Riverdale: Bruce Burrows, Roy: Joe Ritchie), 2-4 year terms, Stuart Adams (Chairman & UDOT Commissioner), Jerry Stevenson (Former Layton Mayor, Layton Nursery owner), Mike Ostermiller (Local Attorney). Provides large tax revenue stream to state and local communities. Creates new aerospace related jobs in one of the largest and highest paid sectors in the state. The developer is working to attract aerospace related industries from out of state that will bring additional opportunities to local communities. All of the commercial properties constructed in the development will generate property tax revenue available to MIDA (25% goes towards municipal revenue fund and 75% of county and city portions go towards TIF and/or Public Treasury investment fund – PTIF until turned into bond. 75% of Fire, School and Mosquito Abatement District – MAD goes back to them). MIDA also receives telecommunications tax 3%, Utility tax (energy tax) 6% (gas & electric), Hotel tax 1%, Point of Sale (Sales tax): local govt. 1% of State 7%. These taxes go into MIDA “Municipal Revenue Fund” for Police, Fire, Roadwork with access returned to cities and counties. There will also be new personnel & corporate income taxes, payroll taxes generated from the project. The taxes will benefit the participating cities (Riverdale, Roy, Sunset & Clearfield), Counties (Weber & Davis) and State of Utah. Involves an agreement between the USAF, a commercial developer, the Military Installation Development Authority (“MIDA”) chartered by the State of Utah in May 2007. 7 member Board: 3 Mayors on board (Clearfield: Don Wood, Riverdale: Bruce Burrows, Roy: Joe Ritchie), 2-4 year terms, Stuart Adams (Chairman & UDOT Commissioner), Jerry Stevenson (Former Layton Mayor, Layton Nursery owner), Mike Ostermiller (Local Attorney). Provides large tax revenue stream to state and local communities. Creates new aerospace related jobs in one of the largest and highest paid sectors in the state. The developer is working to attract aerospace related industries from out of state that will bring additional opportunities to local communities. All of the commercial properties constructed in the development will generate property tax revenue available to MIDA (25% goes towards municipal revenue fund and 75% of county and city portions go towards TIF and/or Public Treasury investment fund – PTIF until turned into bond. 75% of Fire, School and Mosquito Abatement District – MAD goes back to them). MIDA also receives telecommunications tax 3%, Utility tax (energy tax) 6% (gas & electric), Hotel tax 1%, Point of Sale (Sales tax): local govt. 1% of State 7%. These taxes go into MIDA “Municipal Revenue Fund” for Police, Fire, Roadwork with access returned to cities and counties. There will also be new personnel & corporate income taxes, payroll taxes generated from the project. The taxes will benefit the participating cities (Riverdale, Roy, Sunset & Clearfield), Counties (Weber & Davis) and State of Utah.

5. Falcon Hill Overview The AF signed a Master lease with the Sunset Ridge Development Partners LLC (SRDP) last year August (13 Aug 2008), allowing them to move forward with the development plan. 550 acres and 3.5 miles of Prime commercial real estate frontage along I-15, extending from the Defense Reutilization and Marketing Office (DRMO) on the south to the Hill AFB Museum further north. Some areas have been carved out due to historical value or mission related reasons (DISA, Senior Officer Housing, Medical Supply Facility etc). Largest & Most Financially Successful Project in DoD History. - Up to 8 Million SF of Commercial and AF Facilities in Total Build-out. - Approximate Build-out in 20+ Years For Up To 550 Acres. - Projected $2 Billion Development Tax Value to Davis and Weber Counties. - Creates More Than 15,000 Potential High Paying Jobs Over Life of Lease. The AF signed a Master lease with the Sunset Ridge Development Partners LLC (SRDP) last year August (13 Aug 2008), allowing them to move forward with the development plan. 550 acres and 3.5 miles of Prime commercial real estate frontage along I-15, extending from the Defense Reutilization and Marketing Office (DRMO) on the south to the Hill AFB Museum further north. Some areas have been carved out due to historical value or mission related reasons (DISA, Senior Officer Housing, Medical Supply Facility etc). Largest & Most Financially Successful Project in DoD History. - Up to 8 Million SF of Commercial and AF Facilities in Total Build-out. - Approximate Build-out in 20+ Years For Up To 550 Acres. - Projected $2 Billion Development Tax Value to Davis and Weber Counties. - Creates More Than 15,000 Potential High Paying Jobs Over Life of Lease.

6. Falcon Hill Master Plan -AF Transfer of Roads and Utilities Easements to the Military Installations Development Authority (MIDA). -Storm and Sanitary Sewer -Natural Gas -New Comm. Lines East of Wardleigh Rd -Reroute Some Electrical Underground -Weber Basin Water - AF Currently Reviewing Roads and Easements Transfer Letter For Approval. - MIDA Responsible For Off Base Road Maintenance and Services Through Local City Agreements. - AF Responsible For On Base Road Maintenance and Services. - On Base Facilities to Have Separate Meters (Water, Power, Gas, Sewer). - Public Transportation will be available for EUL area outside base fence line. - Planning for Front Runner shuttles from New North and West Gates. - 14 Bus & 2 Trax Stops. - Line runs into Sunset City Storm Water outfall. Exploring MIDA having own MS4. - Sewer lines range From 6” – 15” Wide and connect to Central Davis Sewer District with use of some existing lines. - Questar Gas to Provide Gas For Off Base Portions of Site. Includes Underground and Overhead Power Lines, Rocky Mountain Power Standards For Off Base. - New Roads Throughout Development. - Utilities Reroute Major Component. -AF Transfer of Roads and Utilities Easements to the Military Installations Development Authority (MIDA). -Storm and Sanitary Sewer -Natural Gas -New Comm. Lines East of Wardleigh Rd -Reroute Some Electrical Underground -Weber Basin Water - AF Currently Reviewing Roads and Easements Transfer Letter For Approval. - MIDA Responsible For Off Base Road Maintenance and Services Through Local City Agreements. - AF Responsible For On Base Road Maintenance and Services. - On Base Facilities to Have Separate Meters (Water, Power, Gas, Sewer). - Public Transportation will be available for EUL area outside base fence line. - Planning for Front Runner shuttles from New North and West Gates. - 14 Bus & 2 Trax Stops. - Line runs into Sunset City Storm Water outfall. Exploring MIDA having own MS4. - Sewer lines range From 6” – 15” Wide and connect to Central Davis Sewer District with use of some existing lines. - Questar Gas to Provide Gas For Off Base Portions of Site. Includes Underground and Overhead Power Lines, Rocky Mountain Power Standards For Off Base. - New Roads Throughout Development. - Utilities Reroute Major Component.

7. Northern Construction - Green area in far left map represents total EUL area with orange line boxes indicating areas of initial increment construction. - Red line in far right maps is fence line. - New Roy Gate at 30% design, location allows longer queue off freeway, earliest construction start date May 2011. - Carved Out of EUL Area & Remain, Will Be Incorporated As Part Of EUL. - Museum Parking Will Move To Shared Location Near Retail/Restaurant Portion. - Relocation of Historic Chapel and Barracks To Current Museum Parking Area . - Construction in Northern Portion of EUL Will Occur Based on Market Demand. - Just Over 1 Million SF of Construction. - Roy Gate Move Approx. 200 Yards South. - Green area in far left map represents total EUL area with orange line boxes indicating areas of initial increment construction. - Red line in far right maps is fence line. - New Roy Gate at 30% design, location allows longer queue off freeway, earliest construction start date May 2011. - Carved Out of EUL Area & Remain, Will Be Incorporated As Part Of EUL. - Museum Parking Will Move To Shared Location Near Retail/Restaurant Portion. - Relocation of Historic Chapel and Barracks To Current Museum Parking Area . - Construction in Northern Portion of EUL Will Occur Based on Market Demand. - Just Over 1 Million SF of Construction. - Roy Gate Move Approx. 200 Yards South.

8. Outside the Fence - Outside the fence commercial office & retail buildings built based on market demand.- Outside the fence commercial office & retail buildings built based on market demand.

9. Initial Construction BE AMERICA’S BEST 9

10. First inside-the-fence commercial building construction across AAFES Popeyes Station. First inside-the-fence commercial building construction across AAFES Popeyes Station.

11. 11 BE AMERICA’S BEST The new 5-story, 150,000 sq ft commercial office building will be the north west facility located within the first on base office complex. It will be operated and maintained by the developer and will be occupied by about 700 ICBM program contractors who will be able to work more effectively with their AF counterparts. The 3-story 100,000 sq ft facility creates the co-location with the ICBM contractor as the AF ICBM group will eventually occupy the facility which is the south/west building in the new office complex allowing greater synergy and effectiveness within the ICBM mission. This and the other 2 office buildings for AF use will be constructed when sufficient funding is obtained through revenue sharing or state aid. On base AF facilities as funding allows. Original ICBM contract govt. agreed to pay facilities costs, initially on base govt. owned buildings. 1999, BRAC workload came to base moved ICBM contractor off base. Contract modified to include AF paid “missionizing” of off-base facilities along with lease and maintenance costs paid as part of ICBM support contract. 10 years since been off-base. Base has looked for ways to move ICBM contractor back on base. Cost to high to amortized missionizing cost to end of current ICBM support contract since ends in 2012 with NG (recompete). Upfront contract cost goal. Being worked at Chief of Staff Level – (SAF/GCN) involved now. (NWC/CC) (AFMC/CC) The new 5-story, 150,000 sq ft commercial office building will be the north west facility located within the first on base office complex. It will be operated and maintained by the developer and will be occupied by about 700 ICBM program contractors who will be able to work more effectively with their AF counterparts. The 3-story 100,000 sq ft facility creates the co-location with the ICBM contractor as the AF ICBM group will eventually occupy the facility which is the south/west building in the new office complex allowing greater synergy and effectiveness within the ICBM mission. This and the other 2 office buildings for AF use will be constructed when sufficient funding is obtained through revenue sharing or state aid. On base AF facilities as funding allows. Original ICBM contract govt. agreed to pay facilities costs, initially on base govt. owned buildings. 1999, BRAC workload came to base moved ICBM contractor off base. Contract modified to include AF paid “missionizing” of off-base facilities along with lease and maintenance costs paid as part of ICBM support contract. 10 years since been off-base. Base has looked for ways to move ICBM contractor back on base. Cost to high to amortized missionizing cost to end of current ICBM support contract since ends in 2012 with NG (recompete). Upfront contract cost goal. Being worked at Chief of Staff Level – (SAF/GCN) involved now. (NWC/CC) (AFMC/CC)

12. 12 BE AMERICA’S BEST Sliced building showing core. Large conference room, secured storage, server rooms in basement, open areas for cubicles with some private offices, atrium and smaller conference rooms. Sliced building showing core. Large conference room, secured storage, server rooms in basement, open areas for cubicles with some private offices, atrium and smaller conference rooms.

13. West Gate & SFS Bldg The first outside the fence commercial office buildings will be constructed in the open space to the south of the existing Clearfield gate. As these facilities are being constructed the installation boundary fence will be drawn back to the east allowing open public access. - Rerouting of Utilities in a Manner That Does Not Disturb Service, Sensitivity of Existing 891 Power & Comm Lines Good news: AF Participating in Review of Plans and Developer Aware of Sensitivities. - (Current West Gate location designated by dark blue star). - West Gate will be moved farther back on the current road, aligning with Fir Ave (1230s). This will create a longer cueing section between the interstate and gate, so traffic does not back up along off-ramp or Main Street Along that cueing road, there will be commercial office buildings (they will be outside the new West Gate, but that property currently resides inside the fence) - We’ll also add some office space across the street from the gas station/shoppette, and a parking lot with 460+ spaces. - We’ll eventually tear down all the buildings in the 1200 block. The first outside the fence commercial office buildings will be constructed in the open space to the south of the existing Clearfield gate. As these facilities are being constructed the installation boundary fence will be drawn back to the east allowing open public access. - Rerouting of Utilities in a Manner That Does Not Disturb Service, Sensitivity of Existing 891 Power & Comm Lines Good news: AF Participating in Review of Plans and Developer Aware of Sensitivities. - (Current West Gate location designated by dark blue star). - West Gate will be moved farther back on the current road, aligning with Fir Ave (1230s). This will create a longer cueing section between the interstate and gate, so traffic does not back up along off-ramp or Main Street Along that cueing road, there will be commercial office buildings (they will be outside the new West Gate, but that property currently resides inside the fence) - We’ll also add some office space across the street from the gas station/shoppette, and a parking lot with 460+ spaces. - We’ll eventually tear down all the buildings in the 1200 block.

14. BE AMERICA’S BEST 14 New West Gate - The new West Gate allows the fence line to move closer to Wardleigh Rd for a publically accessible commercial development and will provide new security guard & visitor’s pass buildings (waiting room, offices, restrooms). The new gate will provide increased queuing distance from freeway and hopefully relieve some of the current traffic congestion. The new West Gate will include a pedestrian badge access entrance (manned based on threat levels – green [low], blue [guarded], yellow [elevated], orange [high], red [severe]), reinforced concrete curbing, steel pickets and posts, Boulders, Active wedge vehicle barriers, and bollards. Approximately $9.8M to build Gate Buildings and UDOT roads. Approx $5M in State Grants towards construction of Gate and UDOT roads. - The new West Gate allows the fence line to move closer to Wardleigh Rd for a publically accessible commercial development and will provide new security guard & visitor’s pass buildings (waiting room, offices, restrooms). The new gate will provide increased queuing distance from freeway and hopefully relieve some of the current traffic congestion. The new West Gate will include a pedestrian badge access entrance (manned based on threat levels – green [low], blue [guarded], yellow [elevated], orange [high], red [severe]), reinforced concrete curbing, steel pickets and posts, Boulders, Active wedge vehicle barriers, and bollards. Approximately $9.8M to build Gate Buildings and UDOT roads. Approx $5M in State Grants towards construction of Gate and UDOT roads.

15. BE AMERICA’S BEST 15 New West Gate cont. - Current Gate only has two functioning lanes - 3 Lanes Every Direction Except 2 Lanes Coming Out On West Side Of Gate - Increased Queuing Distance From Off Base - Security Guard Building: Office, Restroom - Visitor Badge Office: Visitor Processing, Waiting Room, Restroom - Current Gate only has two functioning lanes - 3 Lanes Every Direction Except 2 Lanes Coming Out On West Side Of Gate - Increased Queuing Distance From Off Base - Security Guard Building: Office, Restroom - Visitor Badge Office: Visitor Processing, Waiting Room, Restroom

16. SFS/OSI Facility BE AMERICA’S BEST 16 - New Security Forces Bldg, Interior of Hill AFB. - The new 37,000 sq ft SFS/OSI facility will be located just north of the base exchange and will include a state of the art joint control center and provides office space for the current West Gate badge and ID office which will be moved to the facility. Conference room, Warehouse area, forensic storage, SCIF, interrogation rooms, joint command center. $7.3M to construction Security Forces Building. Approx. $6M in State Grants towards construction of SF Facility. - New Security Forces Bldg, Interior of Hill AFB. - The new 37,000 sq ft SFS/OSI facility will be located just north of the base exchange and will include a state of the art joint control center and provides office space for the current West Gate badge and ID office which will be moved to the facility. Conference room, Warehouse area, forensic storage, SCIF, interrogation rooms, joint command center. $7.3M to construction Security Forces Building. Approx. $6M in State Grants towards construction of SF Facility.

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18. 3 major interstates. 2 major rail lines. SLC Intl’ Airport. 1-day to 2-day delivery to western U.S. Reference: U.S. Census Bureau American Community Survey. 3 major interstates. 2 major rail lines. SLC Intl’ Airport. 1-day to 2-day delivery to western U.S. Reference: U.S. Census Bureau American Community Survey.

19. - 13 World-class Alpine Ski Resorts. Largest number of golf courses per capita. 6th largest amount of surface-areas of water for recreational use. Year-round fishing, 1,000+fishable lakes. Tulip Festival (Thanksgiving Point), Shakespearean Festival (Cedar City), Oktoberfest (Snowbird), Sundance Film Festival (Park City), Utah Festival Opera (Logan), Moab Music Festival. Annual Bison Roundup (Antelope Island). Utah Jazz (NBA), Utah Starzz (WNBA), Utah Grizzlies (Professional Hockey), Salt Lake Bees (Miner League Baseball), Real Salt Lake (Major League Soccer).- 13 World-class Alpine Ski Resorts. Largest number of golf courses per capita. 6th largest amount of surface-areas of water for recreational use. Year-round fishing, 1,000+fishable lakes. Tulip Festival (Thanksgiving Point), Shakespearean Festival (Cedar City), Oktoberfest (Snowbird), Sundance Film Festival (Park City), Utah Festival Opera (Logan), Moab Music Festival. Annual Bison Roundup (Antelope Island). Utah Jazz (NBA), Utah Starzz (WNBA), Utah Grizzlies (Professional Hockey), Salt Lake Bees (Miner League Baseball), Real Salt Lake (Major League Soccer).

20. Utah University, Brigham Young University, Utah State, Utah Valley University, Webber State, Dixie College, Snow College, Salt Lake Community College, Utah College of Applied Technology, Eastern Utah College, Westminster College, LDS Business College, University of Phoenix, Stevens-Henager. 75% Native & 43% Non-native College Grad Retention Utah University, Brigham Young University, Utah State, Utah Valley University, Webber State, Dixie College, Snow College, Salt Lake Community College, Utah College of Applied Technology, Eastern Utah College, Westminster College, LDS Business College, University of Phoenix, Stevens-Henager. 75% Native & 43% Non-native College Grad Retention

21. Reference (May 2008 wage data): Bureau of Labor Statistics. Reference (utility rates): Edison Electric Institute’s 2005 Winter Report. Reference (cost of labor): Business Facilities Magazine’s 2006 Report. 3rd Lowest Avg. Utility Rates in Western U.S. Property Tax – 1.5% average (55% appraised value for residential – 100% appraised value for commercial). Personal Income Tax – 5.35% flat tax, Corporate Income Tax – 5%. Sales Tax – 4.75% state + 1% to 2% local. Average home cost in Utah roughly $250K beginning 2008 (minus Park City) – Reference: Utah Association of Realtors, 3rd Quarter 2008 Market Report Public Transit System Expansions. FrontRunner & TRAX Light Rail Expansion New Legacy Highway to Air port Reference (May 2008 wage data): Bureau of Labor Statistics. Reference (utility rates): Edison Electric Institute’s 2005 Winter Report. Reference (cost of labor): Business Facilities Magazine’s 2006 Report. 3rd Lowest Avg. Utility Rates in Western U.S. Property Tax – 1.5% average (55% appraised value for residential – 100% appraised value for commercial). Personal Income Tax – 5.35% flat tax, Corporate Income Tax – 5%. Sales Tax – 4.75% state + 1% to 2% local. Average home cost in Utah roughly $250K beginning 2008 (minus Park City) – Reference: Utah Association of Realtors, 3rd Quarter 2008 Market Report Public Transit System Expansions. FrontRunner & TRAX Light Rail Expansion New Legacy Highway to Air port