Business Plan for
Arrowhead Springs Resort, LLC
”Bring Magic into Your Life”
Business name:
Arrowhead Springs Resort, LLC
Property Address:
24600 Arrowhead Springs Road San Bernardino, California 92414
Business Address:
31882 Del Obispo Street, Suite 158 San Juan Capistrano, CA 92675
Telephone: (800) 386-3929
E-mail: [email protected]
Contact: Dr. Ross
Fax: (949) 661-7536
Web: www.drrossdc.com
Table of Contents
Table of Contents ............................................................................................................. 1 Executive Summary ......................................................................................................... 2 Resort Structure................................................................................................................ 6 Resort Methodologies...................................................................................................... 7 Location ............................................................................................................................. 7 Special Unique Features .................................................................................................. 7 Resort Services and Products ....................................................................................... 18 Advertising and Promotion goals ............................................................................... 25 Resort Management Team ............................................................................................ 29 Staff Expenditures & License Permits ......................................................................... 30 Financial Analysis – five years ..................................................................................... 31 Executive Summary
Come play, live, work, or invest in the World Famous Historic Arrowhead Springs Resort Hotel & Enchanted
Hot Springs Spa Destination Healing Resort coined the “Hollywood Hang-out” in the early 1940’s. This resort is
all nestled in 1,860 acres of pristine mountain oasis within a sustainable go green community surrounded on
three sides by 8,000 areas of National Forest Preserve with extensive natural spring water rights.
Our development and management team has 724 years of combined business experience all approved for
development with a new International Airport just ten minutes from the resort.
Present Features
Approved Specific Site Plan
1939 Historic Hotel under the Arrowhead
New 300 Room Corporate Hotel
5 Story Hotel, 135 Rooms, 154,000 sq. ft
New 115 room annex
2,300 Seat Outdoor Amphitheater
14 Area Conference Center
10.000 sq. ft. Meeting & 23,000 sq. ft. Office Space
1,044,646 sq. ft. of Commercial and office space
Enchanted Spa, including Mineral Hot Springs Pool,
Steam Caves & Natural Mud Baths
Expansion of Enchanted Spa run by BodyBesttm
Doctors all trained in holistic natural medicine
130 Seat Cinema Theatre
1,350 single-family detached and multi-family units
Page 3 of 3 10 Celebrity Bungalows
1,980 Acres, with Lakes, Steam caves & Hot &
Cold Springs and Bubbling Mountain Streams
199 Acre 18-Hole Championship Public Golf
Course
Specific Site Plan Development – Ready for Development – City Approved
The approved specific plan for the future of the site includes a new 115-room annex to the existing 135room hotel; a new 300-room lakefront hotel; new reservoirs and a reconfiguration of the 5-acre Lake
Vonette; new vineyards, along with the Windy Point restaurant and wine-tasting restaurant; a new 18-hole
championship public golf course; 36 new custom estates on fairway-adjacent lots; 200,000 square feet of
commercial space, 34 apartment suites built to condominium standards, and 266 condominiums,
townhomes, and single-family attached homes in the new Village Walk mixed-use lifestyle center; 300 new
condominiums, townhomes, and/or senior apartments in an upscale retirement village; a new 8,600-squarefoot spa resort; 429 condominiums, townhomes, and single-family detached homes located adjacent to the
golf course; commercial stables at a new polo club and equestrian center; extensive multi-purpose trails and
watercourses; a 13.9-acre public botanical garden; 7.1 acres of private parks; a new 250,000-square-foot
office complex; a new 25,000-square-foot conference center; and, 8,000 square feet of commercial space
and 285 condominiums, townhomes, and single-family attached homes in the Hill town development with
panoramic views.
Brief History
Paleo-Indian sites dating from c. 10,000 BC show that the Arrowhead Springs area has been inhabited
for at least 12,000 years. For the past three thousand years various Indian tribes flourished in the area and the hot springs used as sacred Native American Healing Site. Its first modern Spa started in 1864. From
Native Americans, prophetic settlers, and the movie stars of Hollywood’s Golden Age of the 1940’s was
used Existing facilities on the grounds include: a cinema; ten private bungalows previously-owned by
such people as Eleanor Roosevelt, Lucille Ball, the Marx Brothers, Judy Garland, Elizabeth Taylor,
and Humphrey Bogart; an outdoor amphitheater; a wedding chapel; the Esther Williams Pool and
Cabanas; the Hill Auditorium; several ballrooms; a guard house; tennis courts; and, the Hacienda.
The famous Arrowhead Springs sits under the historical landmark1 called “The Arrowhead” on the face of
Arrowhead Mountain, a State Historical Landmark above the city of San Bernardino in southern California.
The crowning jewel on this sacred site is now the fourth hotel, Hollywood’s Arrowhead Springs Hotel,
originally opened December 12, 1939 designed by Hollywood’s Paul Williams, architect of the landmark
Beverly Hills Hotel and the décor by famed Dorothy Draper.2 It was coined the “Hollywood Hang-out.”
1
California Historical Landmark #977, April 1, 1988.
2 Famed Interior Designer. http://en.wikipedia.org/wiki/Dorothy_Draper
3 Page 4 of 4 The Hotel’s luxurious 135 rooms, huge dinning room overlooking the south garden, original furniture,
fixtures, and ambiance of the era are preserved to this day. Elizabeth Taylor and Nicky Hilton celebrated
their honeymoon here.
This property has one of the most precious resources in the world, more valuable than gold, silver, or
diamonds. Yes, two steady perpetual streams of cold Fresh Mountain spring water3 and hot springs from
the core of Mother Earth, producing the rarest “magmatic” 4 healing waters5 in the world all to bring magic
into your life.
This 1,860-acre real estate acquisition includes 508 areas under a planned developed by the approved
Arrowhead Springs Site Plan6 to be destined into a world famous historical Sacred Healing Destination
Resort, surrounded by a premiere sustainable go green community7 of the future, TODAY!
Arrowhead Springs Destination Resort and go green community is an ancient historical site to come visit
for a spell, rejuvenate the mind and body, relax, live or work. Enjoy the esthetics of playing a Certified
Audubon Sanctuary 18-Hole Championship Golf Course, surrounded with inspiring Residential Estates,
two bubbling crystal-clear year-round mountain springs. Majestic Hill-town homes, with panoramic views,
Village Walk around Arrowhead Hot Springs Lake, with spectacular views of the historical landmark “The
Arrowhead” a site one commits to memory. All surrounded by 676,600 acres of the San Bernardino
National Forest, located in the largest county in the continental U.S., and in the heart of the number one
tourist capital in America all available for your lifetime exploration and pure enjoyment.
The extraordinary historic Enchanted Spa features a beautiful therapeutic magmatic water geothermal
therapeutic swimming pool, accompanied with natural mud baths and healing magmatic steam caves inside
mother earth beneath the Historic Hotel and Conference Center. The new Spa features BodyBesttm Doctors
all trained in holistic natural medicine administering rejuvenating therapies, special BodyBestTM weight
loss, BodyBestTM detoxification programs for the healing of any sick among you,8 all preserved as a pristine
mountain oasis as the future community of peace, commerce, and healing, to all who come from nations
around the world.
3
Total annual production of water equals an average of 8,226 acre-feet or 2,681,886,000 gallons per year, or an average flow of
7,347,425 gallons per day. Come live at The Arrowhead Springs Resort.
4
Water formed within molten igneous rock or magma deep within the earth and brought to the surface through intrusive rock.
This “Magmatic water” has very high therapeutic qualities because it contains trace minerals, sulfites, and ziolites from the
hot springs water.
5
Lieutenant Wheeler’s report, U.S.A. in 1876.
6
http://www.ci.san-bernardino.ca.us/pdf/DevSvcs/Arrowhead%20Springs%20SP%2011-05.pdf
7
A “sustainable development” was created by the Brundlandt Commission, United Nations World Summit, in 1987, and in
1992, at the UN World Summit in Rio de Janeiro, the 21 principles, known as Agenda 21, were adopted by the world community
of over 120 nations:
8
James 5:14.
4 Page 5 of 5 This business investment opportunity accompanied this legendary historic site as planned as a go green
sustainable community with an exceptional living environment for all walks of life to enjoy using a blend
of high-quality and national historic value with an estimated 600 million dollar stimulus to the region.
Arrowhead Springs Resort will feature state-of-the-art telecommunication systems, including energy and
water conserving appliances, healthy indoor heating, cooling and ventilation systems, recreational variety,
fresh pure spring water, lush colorful landscapes, with spectacular natural vistas. Electric carts, bicycles,
equestrian trails, and walkways for your enjoyment immersed in this quite sacred healing oasis, all to
“Bring Magic into Your Life.”
Following re-genesis of this famed Resort, an additional new 300-Room Business Hotel and Corporate
Office Complex is planned overlooking the Village Walk surrounding Arrowhead Hot Springs, a fine
dining restaurant, a-top Windy Point featuring panoramic views, spectacular sunsets overlooking the vast
Inland Empire of southern California below offering an integration of science, history, commerce, and
ecology.
The re-genesis of Arrowhead Springs Resort in the heart of the number one tourist capital of America will
achieve a permanent place in the minds of the 25 million residents living in Southern California, the
majority have never even seen this historical site in addition to expanding into international markets from
around the world. The San Bernardino International Airport is soon to open.
The present demand for 1-star hotel room occupancy is presently up 21%, just where The Arrowhead
Springs Resort will begin its assent to become a 5-star resort. Hotels in cities have benefited from the
demand for modestly priced luxury accommodations in our present economy. The present market is perfect
timing for this unique resort and planned community for sustainable future development available today.
The tourism industry in the United States is among the nation’s largest service export industries, and one of
America’s largest employers ranking as one of the top 10 largest industries in 48 states plus the District of
Columbia.
Resort Mission statement
The Arrowhead Springs Resort management team’s intension, purpose, and hospitality “Bring Magic
Into Your Life” commitment to create a treasured lifetime experience in all guests minds and hearts who
discover this magnificence natural treasure and future community, today. Create a state-of-the-art natural
destination healing resort & hot springs spa experience for all patrons seeking health, happiness, and
enjoyment in this natural “go green” community in North America and throughout the world.
Initial Objectives
1. Resort acquisition and re-genesis of this sacred site.
5 Page 6 of 6 2. Open the world famous Arrowhead Springs Historic Hotel and Resort featuring Natural Anti-Aging
Medicine.
3. Open the famous Enchanted Spa and Natural Healing Hospital9
4. Exceed all patrons’ expectations in experiencing convenient affordable luxury accommodations.
5. Develop the Arrowhead Springs Water and Power Utility Company.
6. Establish a Native American Educational and Cultural Center.
7. Promote the natural BodyBesttm Doctors signature natural medicine products, with the “Magmatic
Magic” Hot Mineral Healing Water, Steam Caves, Natural Herbal Medicine Detox and Cleansing
Programs, BodyBesttm Holistic natural medicine prescriptions as products for the Enchanted Spa.
8. Diversification of this premier property includes catering to business conferences and meetings,
catered parties, receptions, weddings, a religious conference retreat, hosting musical groups at the
outdoor amphitheatre, tennis meets, corporate executive team building utilizing the executive
challenge course, golf tournaments, soccer training, and water aerobic classes.
9. Assemble a trained, experienced management team with incentives.
10. Open our Audubon Certified Sanctuary 18-hole championship public golf course
11. Begin infrastructure of the roads, bridges, and builds the Arrowhead Water and Power Utility Co.
Financial objectives
1.
2.
3.
4.
5.
6.
Raise capital through special high yield security offerings.
Acquisition of the Property
Increase profit margin to 26%
Maintain an average 56% hotel occupancy rate while maintaining significant sustainable profits.
Maintain a 90% hotel occupancy rate during the peak periods and holidays.
Demonstrate a minimum of 48% occupancy average throughout the first year.
Marketing objectives
1. Start an Online Reservation System
2. Expand the marketing from regional, to national, and international with electronic media.
3. Become established as a renowned Destination Healing resort for local day and weekend spa
business including weeklong health camps, weight-loss programs, and anti-aging training.
4. Increase exposure by direct advertising to local California residents and capture the market share
along with Internet marketing to other regions of the United States, including Canada and Mexico.
Resort Structure
The Arrowhead Springs Resort, LLC is a California corporation to become registered R.E.I.T raising
seed, early-start-up acquisition capital, development, and expansion capital to capitalize the management
9
A hospital is a health facility where patients receive treatment
6 Page 7 of 7 Company to raise the series of capital through securities offerings as outlined in the first five-year
projections herein.
Resort Methodologies
The Arrowhead Springs Resort trains qualified, skilled and exceptional hospitality staff that deliver an
extraordinary satisfying experience beyond all expectations of our patrons’ by actually creating “Magic in
their life” the Arrowhead Springs Signature.
Location
The historic resort is a pristine 1,860 acres oasis located on a plateau at the base of Arrowhead Peak along
State Route (SR) 18 at the northeast end of the City of San Bernardino, the county seat in the largest county
in the U.S. the 19th largest city in California, and 99th largest city in the U.S. with a population of 208,000.
The resort is approximately 1.5 hours between Los Angeles and San Diego, just 30 minutes from Ontario
International Airport all at the heart of 20+ million residents of Southern California. Access is off SR-18
and Waterman Avenue or SR-30, which connects to I-215 and I-10 to the South, East and West,
conveniently minutes off these Interstate freeways and San Bernardino International Airport at the heart of
the Inland Empire, the fastest growing region of Southern California.
Distance from Arrowhead Springs
Miles Driving Time
San Bernardino International Airport 5
Los Angeles (LA)
60
Lake Arrowhead
18
Palm Springs
50
Newport Beach
57
San Diego
107
Las Vegas
225
L.A. International Airport (LAX)
75
10 minutes
1 hour
30 minutes
1 hour
1 hour
90 minutes
3 hrs. - 30 min.
90 minutes
Special Unique Features
“The Arrowhead” 10 a National Historical Landmark on Arrowhead Peak points directly to the
healing springs below.
The Legendary “Hollywood Hangout,”11
Easy freeway access by road, rail, air, bike, horse, or on foot
The Arrowhead Springs Water & Power Utility Company manages water to the community for
perpetual income.
10
A seven and half acre archeological stone monolith, a California Historical Landmark #977, above The Arrowhead Springs
Resort, where multiple springs flow freely over the land for thousands of years sustaining life in a pristine natural environment.
11
As coined in the 1940’s
7 Page 8 of 8 The BodyBesttm Magmatic Magic Bottled Water will be a perpetual income flowing from the
Arrowhead mineral hot springs for generations.
This sacred healing oasis is a living testimony of the indigenous legacy of the American Indian
Nations expanding 10,000 years.
The historic legendary of the Arrowhead pointing to the world famous “Magmatic Healing
Waters,”12 boasting of some of the hottest mineral springs in the world at 202 degrees, flowing for
humankind for 10,000 years at Arrowhead Springs.
Pure magmatic healing water flowing everywhere featuring natural mud baths, misty steamy lakes
from six magmatic mineral hot springs, underground natural magmatic healing steam caves beneath
the famous historic Hotel.
A legendary world famous Arrowhead Springs historic Hotel,13 a Hollywood Historic Landmark14
with a huge luxurious dinning room overlooking the South garden.
A large beautiful geothermal “Esther Williams” filmed onsite15 with her swimming pool16 where her
movie “The Million-dollar Mermaid”
The legendary mystical Enchanted Spa, a powerful prescription of immersion into raw energy of
Mother Nature’s Magnificence
The legendary pristine healing place of peace is for all to come, partake, and experience these
special magic gifts treasures to creating marvelous healings from the ancient of days to the present
as you will “Bring Magic into Your Life.”
Market
The resort market is designed for the seventy-two million (72,000,000) baby boomers, the largest
demographic marketing goldmine of recorded history. Yes, these longevity health seekers are coming for
inspiration and rejuvenation. They are huge in numbers, wealth, and disposable income seeking ‘ageless’
living as a never-ending cycle in and out of education, work, and leisure with life revolving around the
family all run by the power of the purse.17
Present Description
The Native Americans described the Arrowhead Springs Site description in its “raw” state as “Living in the
cupped hand of God.” The white man claimed it to be the lost “Garden of Eden.” Yes, the fact is the
Arrowhead on the mountain pointing to the famous Arrowhead Springs existed since the beginning of time.
12
13
A sacred place of healings waters bubbling from Mother Earth.
http://www.arrowheadspringsresort.com/index.html Web site link.
14
The distinctive original Art Deco elements of the Arrowhead Springs Historic Hotel are closely reminiscent of the legendary
Beverly Hills Hotel, another Hollywood Legendary Landmark.
15
The Million Dollar Mermaid.
16
http://www.arrowheadspringsresort.com/historic_pool.html Web link.
17 The Power of the Purse: How Smart Businesses Are Adapting to the World's Most Important Consumers-Women by Fara
Warner.
8 Page 9 of 9 The modern Arrowhead Hot Springs Resort was first established in 1868, just eighteen (18) years after
California became the 31st state in the union and today the Arrowhead Springs Resort is grandfathered into
the new Arrowhead Springs Specific Site Plan in 2007 as a hot springs healing resort.
The Arrowhead Springs Resort is 1,860 acres with 508 acres for planned development of pristine mountain
oasis, all surrounded on three sides by 8,000 acres of National Forest Preserves. A true escape, just 1 hour
from approximately 25 million residences of S. California positioned just minutes off 3 major local
Interstate Freeways.
One of the Resorts key features for a high volume enterprise and continued repeat patrons location. It is in
complete seclusion, privacy, and space to yourself, yet have the convenience next to the 18th largest city in
California, and the 99th largest city in the United States. Experience the feeling of a far away secluded geta-way with conveniences right in the back yard.
The present Resort features the famous 1939 Historic “Hollywood Hang-out” Hotel designed by Paul
Williams18 the Architect of the Legendary Beverly Hills Hotel, Décor’ by famed Dorothy Draper19 with Six
Stories including a full basement, the hotel features 135 luxury rooms, which include dinning rooms, ball
rooms, a business conference center, executive challenge course, meeting rooms, retail shops, cinema
theatre, an outdoor amphitheater, soccer field, basketball and championship tennis courts, a Wedding
Chapel, the Hill Auditorium; a guard house, and the Hacienda.
Arrowhead Springs Resort has ten (10) private Celebrity Bungalows, previously-owned by such people as
Eleanor Roosevelt, Lucille Ball, the Marx Brothers, Judy Garland, Elizabeth Taylor, and Humphrey Bogart,
the Esther Williams Pool and Cabanas, the famous Enchanted Spa, a Natural Medicine BodyBestTM
Hospital, with natural therapeutic mineral hot springs pool, steam caves, natural mud baths all affordable,
high-end, luxury accommodations.
The Arrowhead Sprints Resort is a preserved pristine mountain oasis to live, visit, work, invest, or play,
enjoying the year-round comforts of Southern California catering to international tourists, national
travelers, health seekers, and 25 million local residents.
The Arrowhead Springs Resort features 3 million gallons of pure mountain spring water a day, six natural
geothermal hot springs boasting the hottest in the entire world,20 along with multiple cold springs.
Approved Development
The Arrowhead Springs approved specific site plan includes a new 115-room annex to the existing 135room hotel; a new 300-room lakefront hotel corporate plaza; overlooking botanical gardens, Arrowhead
18 http://en.wikipedia.org/wiki/Paul_Williams_(architect) 19 http://en.wikipedia.org/wiki/Dorothy_Draper One Hot Spring measured at 202 degrees.
20
9 Page 10 of 10 Hot Springs Lake; vineyards. Panoramic views from the new Windy Point restaurant and wine-tasting site
on State Highway 18 overseeing a Audubon Sanctuary 18-hole championship golf course surrounded by
429 condominiums, townhomes, single-family detached homes, and 36 custom estates on fairway adjacent
lots.
The Arrowhead Springs Resort new Village Walk is 200,000 square feet commercial space, apartment
suites built to condominium standards, 266 condominiums, townhomes, and single-family attached homes
in the new Resort Village Walk mixed-use lifestyle center.
The Arrowhead Springs Resort new upscale Retirement Village with 300 new condominiums, townhomes,
and/or senior apartments.
The Arrowhead Springs Resorts new Hilltown Village festures Panoramic Views with 285
condominiums, townhomes, and single-family attached homes.
The Arrowhead Springs new polo club, equestrian center, dude ranch, commercial stables with extensive
multi-purpose trails and watercourses; a 14-acre public botanical garden; 7 acres of private parks; a new
250,000-square-foot office complex; a new 25,000-square-foot conference center; and, 8,000 square feet of
commercial space
Business travelers receive a wide range of extra facilities such as beautiful conference and meeting rooms,
exhibition space, including all the necessary conferencing equipment and security. The natural
surroundings as well as the landscaped gardens ensure that our patrons, their guests, and our residents enjoy
the activity, entertainment, adventure, and tranquility they desire. All accommodations and residential
communities are children and pet friendly in a planned sustainable “go green” community of the future,
now!
Resort Ownership
Campus Crusades for Christ21 (CCC) a California non-profit sole corporation is the present owner since
1962 that used the resort as their International headquarters until 1992 when they relocated to Orlando
Florida. This resort has been in private ownership and out of the public eye for over fifty years.
Realize the majority of the twenty-five million southern California residents have never seen, heard, or
even know about this extraordinary healing historic site located right in their own backyard.
Dr. Calvin B. Ross, D.C., B.E.C.O. is President and Chief Executive Officer of Arrowhead Springs Resort,
LLC, a California corporation is positioned for the acquisition and operation of the property located at
24600 Arrowhead Springs Road San Bernardino, California 92414.
Arrowhead Springs Resort, LLC, is a California-based; Limited Liability Company formed on July 14,
2010 and located at 31882 Del Obispo Street, Suite 158, San Juan Capistrano, California 92675-3225, 800-
21 a California Sole Corporation #C027708 formed 08/28/1953.
10 Page 11 of 11 386-3929. Arrowhead Springs Resort, LLC (the Firm) operates as a real estate holding company with asset
values estimated by Management following acquisition of the Restored Historic Arrowhead Springs Resort at
approximately $60,000,000, including water rights on site.
Historical Details
The ancient Legends come from the Native Americans who claimed an arrow from heaven burned the
arrowhead formation on the mountainside showing all tribal nations this ancient sacred healing site22
and the ancient “Arrowhead” points directly to the famous Arrowhead Springs now called “The
Arrowhead Springs Resort.”
Brigham Young tagged, The Modern Moses of the West, the Mormon Prophet saw in vision a symbol on the
mountainside, which he said marked a fertile valley below for a new settlement. In 1851, 150 wagons
rolled into the Valley below the Arrowhead and these 500 Mormon pioneers found the water and opened
the settlement of one of California’s historic cities, San Bernardino. The Arrowhead Springs Resort is the
newest addition to the famous city since February 22. 2010.
The modern resorts history development began in 1863. By 1893, the Arrowhead depot brought tourists to
the famed Arrowhead Hot Springs on the Pacific Electric Railway Company’s, famous “Red” cars.
The Arrowhead post office was built in October of 1895.
The famous glass-lined water rail road cars called the “water train” shipped the famous mountain spring
water from Arrowhead Springs to Los Angeles in 1909,
The site history proclaims 4 distinctive hotels including:
22
Sacred Site described as, “Living in the valley of the cupped hand of God.”
11 Page 12 of 12 1. David Noble Smith’s Infirmary, 1863-1883
The modern history began in 1863 when David Noble Smith23 an Ohioan saw in vision at his father’s death
bead, a saint-like being proclaimed a far-off land with exceptional climate and curative waters, marked by a
gigantic arrowhead. Smith’s search for the unique arrowhead eventually ended at Arrowhead Springs and
the now self-proclaimed “Dr. Smith” opened the first modern hot springs sanitarium. The Arrowhead
Springs Resort healing resort now “grandfathered”24 into the Arrowhead Springs Specific Plan of the
city.25
Following the Mormon’s building the road up Waterman canyon to the top of the mountain, Smith cleared
a road from Waterman Canyon to the spa and constructed the first spa building—a “long shack” according
to some accounts—which he opened to the public. The following year, Smith built additional bathing
rooms and reservoirs to collect the hot water and opened his “Hot Springs Hygienic Infirmary” for the
treatment of consumption. Smith continued to expand his fledgling operation with the construction of a
larger treatment house and a 100 by 75 foot bathing lake on the 320-acre property. The business continued
over the next two decades, while Southern California’s population grew steadily around it. The Southern
Pacific Railroad extended east from Los Angeles to San Bernardino in 1876, connecting with the
transcontinental system in 1881. Just as the region stood on the brink of a major boom period, Smith’s
infirmary ended in financial failure.
2. The Boom Hotel, 1883-1895
The Boom was a three-story, 40-room hotel with a veranda on every floor. In response to the booming
tourism spawned by the arrival of the transcontinental railroad in 1883, the owners tripled the size of the
hotel over the course of the next three years to 120 rooms by adding two more wings. The Arrowhead Hot
Springs Company incorporated in 1886.
3. Marshall’s Hotel, 1904-1938
In 1904, Seth Marshall right after the hotel opened he began bottling and selling Arrowhead Springs water
in the basement of the hotel shortly after it was completed. Hotel guests encouraged this new venture by
wanting to be able to have the “crystal clear” water shipped to their homes after having first enjoyed it at
the hotel. With the completion of the railroad, water came from Waterman Canyon to a reservoir at
Arrowhead Springs and then loaded onto special glass-lined railroad cars and shipped to Los Angeles,
where a bottling plant established in 1915.
Arrowhead Springs bottling plants spread to Ventura, San Bernardino, Colton, Santa Barbara, San Diego
and Phoenix in the 1920’s. Railroad tanker cars continued to transport Arrowhead Mountain Spring Water
from their terminal at the end of the old Pacific Electric line until 1960, when tanker trucks took over and
the rail line removed.
23
David Noble Smith’s memorial is on the property.
24
A portion of a statute that provides that the law is not applicable in certain circumstances due to preexisting facts
25
http://www.ci.san-bernardino.ca.us/pdf/DevSvcs/Arrowhead%20Springs%20SP%2011-05.pdf
12 Page 13 of 13 Forest fires destroyed the first three hotels that graced this distinctive site.
4. Hollywood’s Arrowhead Springs Hotel, 1939-1962
Directors of the operations were: Joseph M. Schenck, Jay Paley (President), Darryl Zanuck (Vice
President), Edgar J. Mannix, William Goetz (Vice President), Constance Bennett, Lou Anger, J.B. Anger,
Claudette Colbert, Al Jolson, and J.B. Codd (Secretary-Treasurer). The ambitious new owners also
purchased Snow Valley, a local mountain estate, for use as a ski area, as well as securing an option on the
San Bernardino Valley Country Club. (Los Angeles Times 10-8-1941)
The new owners planned a modern Georgian-style hotel building, designed by renowned Southern
California architects, Gordon B. Kaufmann and Paul R. Williams. 26 The architects were natural choices
for the project. Both well known in Hollywood circles as “architects to the stars,” and Williams designed
the legendary Beverly Hills Hotel and had recently designed Jay Paley’s private Bel Air residence.27
The main hotel building included 150 rooms and suites, shops and a movie theater. A Cure House,
connected to the main building by elevator, housed “steam caves, mud baths, radio active waters, and
massage rooms.” New bungalows designed to augment those spared by the fire. Additional construction
was to include a new recreation center, cabanas, and swimming pool.
Edward Huntsman-Trout, another a Los Angeles landscape architect28 well known in entertainment
industry circles, designed the grounds.
Local contractors for the project included: George L. Black, electrical engineer; W. T. Burrows, painter;
George Herz Co., landscaping and roadwork.29
Hollywood’s Arrowhead Springs Hotel, the fourth and currently the world famous historic hotel
originally opened December 12, 1939 designed by the famed black Hollywood architect Paul Williams and
the décor by famed Dorothy Draper.30 The famed Hotel coined the “Hollywood Hang-out.”
The extraordinary natural historic landmark31 called “The Arrowhead,”32 seen33 from twenty miles away
on Arrowhead mountain points directly to the natural pure mountain spring water creating a sacred healing
26 Designed LAX and the Beverly Hills Hotel in Hollywood California.
27
Barron Hilton purchased it for his personal residence.
28
http://ccdl.libraries.claremont.edu/cdm4/item_viewer.php?CISOROOT=/gmc&CISOPTR=46#series1
29
Architect and Engineer, June 1940: 20; Los Angeles Times, 7-25-1941.
30 Dorothy Draper, famed Interior Designer. http://en.wikipedia.org/wiki/Dorothy_Draper
31
The Arrowhead historical landmark # 977 April 1, 1988.
13 Page 14 of 14 oasis with “hot” and “cold” springs running everywhere, and “The Arrowhead” featured as San Bernardino
County’s logo in 1873.
The health fame of Arrowhead Springs spread quickly regarding the famous mountain oasis underneath
The Arrowhead with the healing waters below. The mountain spring water was shipped from Arrowhead
Springs to Los Angeles by the famous “water train” in 1905.
Water wars are presently raging throughout the South West and investors have the unique opportunity to
hold securities including a perpetual water & power utility. The new Arrowhead Springs Resort, LLC is
calling it the actual real “Fountain Head” of the West. Yes, it could even be claim the covenanted fountain
of youth right here at the famed “Arrowhead Springs Resort,”34 in the heart of America’s tourist capital,
Southern California.
Presently Ten (10) Elite Super Stars of “Hollywood’s Golden Age” grace the property by leaving their
Legacy’s, along “Celebrity Lane” nestled next to the Reflection Pools in the shadow of Hollywood’s
Arrowhead Springs Resort Hotel. Each celebrity bungalow interior is styled and featured with memorabilia
for the Super Stars of Hollywood’s Golden Age. Many of the Hollywood Stars would stay in these
exceptional bungalows during their visits to the “Hollywood Hangout” at Arrowhead Springs. Some of the
most famous stars in all film history have signature bungalows, including Lucille Ball, Marilyn Monroe,
Marx Brothers, Jerry Lewis, Judy Garland, Humphrey Bogart, Jane Powell, Esther Williams, and
Elizabeth Taylor.
Following capitalization and acquisition of the site the grand re-opening of the Arrowhead Springs Resort,
is set for Saturday November 17, 2012 and the property will be crowned ”a diamond in the rough” and
investor’s realism.
The Resorts Exceptional Advantages
The world famous Arrowhead Springs Resort is a documented sacred historic healing site. The new
Arrowhead Springs Resort at the famed Arrowhead Springs will arise again to its deserved position as a
premiere world famous healing destination resort for the following exceptional reasons:
The Legacy of the ancient sacred American Indian healing Site over 12,000 years
The Legendary “Hollywood Hangout,”35 world famous historic Arrowhead Springs Hotel,36 a
Hollywood Historic Landmark37
32
A seven and half acre archeological Arrowhead monolith points to The Arrowhead Springs Resort, where multiple
springs flow freely over the land for thousands of years sustaining life in a pristine natural environment. It is the San
Bernardino County’s Symbol since 1852.
33
Save America Treasures a 1.6 million dollar grant being secured by Dr. Ross to restore and light the Arrowhead with lasers.
34
The Arrowhead Springs Resort concept lives on as a metaphor for anything that potentially increases longevity. This
is actually the real healing waters flow abundantly everywhere.
35
36
As coined in the 1940’s
http://www.arrowheadspringsresort.com/index.html Web site link.
14 Page 15 of 15 The history of Super Stars of Hollywood’s Golden Age
Some of the most famous stars in all film history have signature bungalows, including Lucille Ball,
Marilyn Monroe, Marx Brothers, Jerry Lewis, Judy Garland, Humphrey Bogart, Jane
Powell, Esther Williams, and Elizabeth Taylor.
130 seat Cinema Theatre
Eleanor Roosevelt named the Arrowhead Hot Springs Pool the “Esther Williams Pool” where she
filmed onsite38 her movie “The Million-dollar Mermaid”
Natural healing magmatic steam caves beneath the famous historic Hotel
“The Arrowhead” 39 is a California Historical Landmark
The legendary mystical Enchanted Spa
1,350 Planned Residences
Legendary world famous “Magmatic Healing Waters”
Rare “magmatic40” water containing “zeolites41” detoxification in healing of all dis-eases of
humankind
Natural Medicine BodyBestTM Hospital
The BodyBesttm Magmatic Magic Bottled Water
Documented hottest mineral springs in the world at 202 degrees
The Arrowhead Hot Springs Misty Lake at the heart of Arrowhead Village Walk
Natural mud baths
2,300 Seat Outdoor Amphitheater
Native American Cultural Center
An approved Arrowhead Springs specific site development plan featuring a future go green
sustainable community of the future
The Arrowhead Springs Water & Power Utility Company for perpetual income A 1,860 acre property
8,000 acres of National Forest Preserves surrounds the site on three sides
Audubon Sanctuary 18-hole championship golf course
The Arrowhead Springs Resort & Hotel is a proposed California & nationally registered historic site
Easy access from 3 major Interstate freeways
A well known name from, Arrowhead Mountain Springs Water
A senior management team with significant destination resort spa planning and community
development experience
600 million economic stimulus
An exquisite pristine preserved mountain oasis
Our guaranteed hospitality signature to “Bring Magic into Your Life.”
37
The distinctive original Art Deco elements of the Arrowhead Springs Historic Hotel are closely reminiscent of the legendary
Beverly Hills Hotel, another Hollywood Legendary Landmark.
38
The Million Dollar Mermaid.
39
A seven and half acre archeological stone monolith, a California Historical Landmark #977, above The Arrowhead Springs
Resort, where multiple springs flow freely over the land for thousands of years sustaining life in a pristine natural environment.
40 Water derived from or existing in molten igneous rock or magma. Also known as juvenile water.
41Magmatic water formed from water derived from molten rock or magna.
15 Page 16 of 16 All these extraordinary exceptional features are already planned following the Firms real estate acquisition
of Arrowhead Springs Resort. The Firm is now attracting investors worldwide to raise capital to seize this
outstanding investment opportunity to bring this ancient sacred healing site into a world renowned
destination resort and community to visit often, stay a long time, come play in all seasons, arrive to live for
a life time. Yes, “Bring Magic into Your Life.”
Initial Start-up Funds required
Estimated Start-up Expenses:
Real Estate Estimated Purchase Price
$31 ,000,000
Legal
$6,000
Stationery, etc.
$2,000
Brochures
$6,000
Hotel Re-model
Insurance
Management
Estimated Total Start-up Expense
$6,060,000
$6,000
$20,000
$37,000,000
Start-up Assets Needed
Cash Balance on Starting Date
Long-term Asset (Historic Hotel)
Long-term Asset (Land)
$806,000
$31,000,000
$6,999,194
Total Assets
$37,000,000
Initial Requirements
$37,000,000
Total Initial Investment
$37,000,000
Two Phase Resort Developments
16 Page 17 of 17 Phase I
Acres Unîtes Parcels 1- 6
March 2011 - July
2014
Parcel 1
25
Historic Hotel Renovation, New Conference Center, New Annex
Parcel 2
22
Arrowhead Springs Spa & Health Resort
Parcel 3
47
Parcel 4
199
Parcel 5
79
24/429 Golf Course Residential North
Parcel 6
30.8
12/300 Golf Course Residential South
285
Residential Hill-Town
18-Hole Public Golf Course
Parcels 7-10
Phase II
March 2015 and
completed by June
2019
Parcel 7
17
New 300-Room Hotel
Parcel 8
14
New Corporate Office Complex
Parcel 9
67
34/266 Village Walk - Commercial & Residential
Parcel 10
5
Sub-total
505.8
Open
space/Watershed
1,400
Metropolitan Water
District
10.2
TOTAL
1,916
Water & Power
Utilities
Windy Point Restaurant - Commercial
1,350
Existing utilities are natural gas, electricity, both geothermal and
Irrigation water. Arrowhead Water & Power, LLC, will provide
all utilities, wastewater treatment plant, and telecommunication
cable, fiber optics.
The Arrowhead approved Specific site plan expires at sunset February 1, 2025.
17 Page 18 of 18 Resort Services and Products
Food & Beverage service
Off-site catering services
Specialty Dinning
Buffet Dinning
Delicatessen
Wine Tasting
Fine Dinning
All Day Dinning
In Room Dinning Service Full Service Bar & Lounge Service
Room Service & Hot Springs Pool Service
The Arrowhead Springs Astrology of the Stars University
Meetings, Conferences, Banquets, and Wedding, other event services
Private Hollywood Movie Star Bungalows Hospitality Services
Musical Concerts & Entertainment Center Discothèque/Night Club Entertainment
Cinema Theatre Service
Tourist Service Center
Gift Shops & Retail Shops
Bicycle Shop, rentals, and service
Natural food courts from the gardens, vineyards, and orchards
Golf shop, golf course, rentals, lessons, and tournaments services
Tennis shop, tournaments and tennis lessons
18 Page 19 of 19 BodyBestTM Natural Medicine and Physio-therapy Hospital Services
BodyBestTM Natural Magmatic Mineral & Mountain Spring Bottled Water
Enchanted Spa Services, with Estheticians including signature products for natural skin care & natural safe
hair coloring, and natural organic nails
Executive Corporate Team Building Challenge Course
BodyBestTM Doctors Nutrition Weight-loss Programs
Human Potential Symposiums
BodyBestTM Doctors Wellness in a Week
BodyBestTM Doctors Anti-Aging Seminars
BodyBestTM Doctors Mystery Diagnosis Wellness TV Show
Natural healing medicine programs directed by the Arrowhead Springs Resort BodyBesttm Doctors utilizing
natural medicine for natural, safe, and effective treatments
Therapeutic Signature Hot Stone Trigger Point Sports Massage Therapy
BodyBestTM Doctors Natural Medicine Services including signature natural nutrition programs, natural
permanent fat loss programs, herbs, natural vitamins, minerals, and homeopathy products.
Tissue Mineral Analysis, detoxification, bio-identical hormone therapy, and natural pain control
Hot Mineral Springs Pool Services, including water aerobic classes, mommy & me swimming classes,
Watsu water therapy classes, physical therapy pool rehabilitation services, and therapeutic mineral pool
therapy.
Real Estate Brokerage Services
Real Estate planning and development services for 1,350 residential property sites
Natural BodyBesttm signature health products found nowhere else in the world, including “Magmatic
Magic” Healing Water, natural Herbal Medicine Detox and Cleansing Programs, BodyBesttm Nutrition
Programs, Doctors Choice multi-mineral, multi-vitamin, antioxidant, and herbal supplement, and many
other unique natural healing products for The Enchanted Spa.
The Enchanted Hot Springs Spa
The “Enchanted Hot Springs Spa” within the world famous at Arrowhead Springs Resort is unique in the
world among other world class spa’s run by the team of BodyBesttm Doctors with forty years of experience,
19 Page 20 of 20 including Dr. Calvin B. Ross, D.C., B.E.C.O. CSL, The BodyBesttm Holographic Harmonic Healing
System utilizes state-of-the-art diagnosis and treatment standards by the CDC where finding the
underlining root cause of dis-ease determines proven scientific healing techniques for all chronic diseases. This famous healing resort features the rare “magmatic” healing waters found at Arrowhead
Springs, which flows from steam caves beneath the historic hotel, natural magmatic large geothermal
therapeutic swimming pool and real natural mud baths. Our famous spa treatments include special
therapeutic massage with penetrating natural heat called infra-red delivered through special stones.
Visit the healing Spa for a day or enroll in weekend or weeklong natural detoxification and permanent
weight-loss programs all administered by the team of BodyBesttm Doctors for healing any sick among you.
Arrowhead Springs Resort features the gorgeous world famous “Esther Williams” therapeutic swimming
pool, with unique Mommy & Me baby swim classes, Watsu Bodywork swim classes, therapeutic hot water
aerobic classes, and swimming instruction for all ages, in our beautiful plush geothermal therapeutic pool.
We also provide a wide selection of stretching, yoga, Qigong, resistance training, stress management, as
well as walking, swimming, hiking, bicycling, tennis, soccer, horseback riding, and other outdoor activities
for children and those in their golden years.
Scientific methodologies include complete STRESS testing, including, digital postural analysis,
comprehensive Tissue Mineral Analysis42 to uncover heavy metal toxicity underlying chronic degenerative
and autoimmune dis-eases.
Natural, safe, effective health programs included for chronic pain, chronic fatigue syndrome, fibromyalgia,
menopause, andropause, ADD, ADHD, food sensitivities, permanent weight-loss, hypertension, heart
arrhythmias, diabetes are all treated safely and naturally. These state-of-the-art healing methodologies are
the basis of the team of BodyBesttm Doctors all with natural healing techniques setting the standard for
doctors as the new healthcare standard for America and throughout the world.
The Resort offer biking for the whole family. Visitors can use their own bikes or rent a quality bike. The
developed trails will include pristine forests, lakes, waterfalls, rivers, and wildlife.
The Resort is 1,860 acres surrounded on three sides by the San Bernardino Nation Forest approximately
8,000 acres in preserves, with towering mountains, lush meadows, steamy hot lakes, bubbling clear
mountain streams. Outdoor activities include, hiking, camping, fishing, horseback riding, and mountain
biking.
Accommodations
The Arrowhead Springs Resort features the world famous historic five-story Arrowhead Springs historic
hotel with 135 luxurious rooms, including a presidential or honeymoon deluxe penthouse suite, huge
dinning room overlooking the south garden, 130-seat cinema. All enthroned in the original 1940’s Dorothy
Draper ambiance of the original furniture, fixtures, and decor of the of Hollywood’s Arrowhead Springs
Hotel from the “golden age.”
42
Tissue Mineral Analysis is the Gold Standard by the EPA for both humans and animals and recommended by the CDC.
20 Page 21 of 21 Luxurious Dinning
The huge luxurious dinning room overlooks the south garden ready to serve delicious and nutritious snacks,
meals catering to business, breakfast, lunch and dinner to resort patrons, and catering business to outside
guests.
As a famous destination, health resort where “Food is Your most Powerful Medicine” and you receive
delicious balanced meals and snacks, for permanent FAT loss, health, and longevity of life.
Recreation
The Arrowhead Springs Resort offers several health and recreational facilities on the grounds. Facilities
available include our large geothermal therapeutic swimming pool, steam caves, mud baths, cinema, outside amphitheater, championship tennis courts, soccer field, and challenge course.
Amenities available within the immediate area include: disco, walking, hiking, bicycling, snow skiing,
water skiing, para-gliding, hang gliding, fishing and other water sports, mountain climbing, forest trails,
guided historical tours of the resort and surrounding historical local community, and much more.
Conference Facilities
The Arrowhead Springs Resort has 10,000 square feet of conference space and meeting rooms, which used
throughout the year for meetings, seminars, workshops, wedding parties, special holiday or seasonal
celebrations, trade shows and business conferences, with state-of-the-art audiovisual equipment.
Families Welcome
We offer “a child’s playground paradise.” Complete day care center, including our therapeutic geothermal
swimming pool and surrounding natural playground.
Business Travelers
Business travelers make up 40% of the hotel patrons. ASR gives business travelers a complete range of
business conference facilities complete with, fax, printer and secretarial services and broadband wireless
Internet connections. Meeting rooms are fully equipped for conferences up to 550 people with service to
and from the San Bernardino International Airport, Railroad and city public transportation.
Future development will be an additional 15,000 square feet of conference center for excellent meeting
space. The facilities will offer all telecommunications, multimedia amenities required by Fortune 1000
21 Page 22 of 22 companies, the entertainment community, foreign dignitaries, and others whom high technology in gracious
surroundings is a requisite.
Non-Business Travelers - Couples without children, Single and group travelers
Non-business travelers make up 60% of the hotel patrons. For couples, singles, and group travelers we have
a large variety of amenities catering to the young and old such as disco and dance evenings with live bands,
a full program of recreational activities, dinner dance evenings, guided tours and organized coach travel to
areas of interest in the region. All group travel accompanied by a resident resort guide and the resort can
handle any in-house catering for groups up to six hundred (600) guests.
Pricing Strategy
Arrowhead Springs Resort provides services priced at a slight premium over competitive offerings. We do
not lower prices, but add benefits far and above our competition. Extensive promotional activity regarding
our superior benefits, one-day packages, holiday packages, health packages, will ensure our patrons receive
our BodyBesttm Doctors signature products, exceptional service in exchange for the slight premium in price.
Hotel room prices average around $116.00, revenue per available room (RevPar) at $54.00, and occupancy
rate at 60%. Statistics are according to the American Hotel and Lodging Association (AHLA).
Local Market Targets
California is the most visited state in America, and accounts for 11.5 percent of all domestic travel in
America.
Los Angeles County receives the most domestic tourism in the state with approximately 53 million person
trips.
New conveniently located local San Bernardino International Airport opening soon.
Californians themselves are the mainstay of the state's travel and tourism industry, comprising 86 % of
domestic travel, or 265 million person-trips. Out-of-state visitors account for 44 million person-trips.
California annually generates more than $75 billion in direct travel spending into the economy. Tourism is
California's third largest employer and fifth largest contributor to the gross state product.
Tourism Industry
In the United States, travel and tourism is among the nation’s largest services export industries, and one of
America’s largest employers. In fact, it ranks as one of the top 10 largest industries in 48 states plus the
District of Columbia. The tourism industry includes a number of interrelated businesses – lodging
properties, airlines, restaurants, cruise lines, car rental firms, travel agents, and tour operators, among
others.
Resort Competition
22 Page 23 of 23 There is no known direct local competition. Glen Ivy Hot Springs Day Spa is thirty-three miles to the
South. Arrowhead Springs Resort will compete for their Day Spa business.
Table 1: Competitive Analysis
FACTOR
Arrowhead
Springs
Resort
Natural
nutritional
products,
cleanses,
detoxification
Products
Therapeutic
Massages
Directed by
Doctors
Room
$116
Price
Quality
BodyBesttm
Doctors
Strength
Weakness
Doctor based
signature
health
products with
existing 135
A New
room hotel
Development
close to
International
Airport and 5
Interstate
Highways
Doctor
directed
Not well
Known
BodyBesttm
Doctors
Prescribed
Therapeutic
No current
Reputation
Glen Ivy Day Spa
7 signature skin
products and
Massages as a Day
Spa only
No over-night
Accommodations
Swedish massage
Massages
Service
Company
135 Room
Hotel 10
Celebrity
Bungalows,
natural
steam caves,
A world class
natural mud
destination
New
baths,
healing resort
magmatic
geothermal
springs
elegant
dinning,
tennis, soccer
Unknown for Great
Higher
No overnight
accommodations
Only a local day
spa
Established on
23 Page 24 of 24 FACTOR
Arrowhead
Springs
Resort
reputation
Since 1863
Location
Close to 4
Interstate
freeways
Secluded
Pristine
Appearance
Mountain
Oasis
Major
magazines,
Advertising internet,
direct mail,
radio, TV
Image
Presently
Unknown
Strength
Weakness
Glen Ivy Day Spa
potential for
growth
initial
Marketing
cost
going business
Easy, access,
A little out of the
New re-open
high visibility
way
Some
sacrifice for
preserving
All natural
Rustic Desert
historic sites
surroundings
Oasis
to a more
modern
facility
Increased
initial cost
Time to
build the
brand
Selling packages
at Christmas is
their major
marketing
Time to
New, exciting,
Day Spa of the
establish the
adventure
Year
brand
The Niche
Baby-boomer women within a pristine natural oasis healing resort and new family go green sustainable
community with easy access for 25 million people and patrons who will arrive as if in an exotic ancient fara-way Hollywood get-a-way destination healing resort site right in their own back yard. Natural geothermal
healing magmatic waters, natural steam caves located underneath the hotel beneath the mystical Arrowhead
majestically on the mountainside above, all prescribed by The Enchanted Spa BodyBesttm Doctors to
promote permanent health solutions to any sick among you. A national historic site for healing body, mind,
and spirit, rejuvenation all to “Bring Magic into Your Life”
Marketing Strategy
Direct mail
Direct mailing to travel agents, travel magazines, and organizations will include full-color post-card and
agent/editor/member special invitations. The travel agent is the front line of sales, and we plan to offer
24 Page 25 of 25 higher commissions up to 15% during our first year of operation. Some direct mailing campaigns will be
targeted worldwide, while one mailing (1) per year will be to Nevada, Arizona, Texas, Washington, and
Oregon. The accompanying post-card for worldwide campaigns translated into German, Spanish, Japanese,
and Korean.
Advertising and Promotion goals
Increase sales from $67 million to $127 million by the end of the fifth year with an increase in initial visits,
increased repeat guest visits, and establish the Arrowhead Springs destination resort name by executing a
special media mix:
The printed media mix will be magazines, TV, radio, and direct mail including Travel & Leisure
Magazine, Travel 50 & Beyond, Travel America, and Travel & Leisure, National Geographic Traveler,
Town & Country Travel, Travel & Leisure Golf, and Vacations magazine, Pedal Pioneers, and Highway
Radio.
Expenditures
p/year
Frequency
of ad
Advertisement
size
$100,000
1 X Year
Full Page
$180,636 (2012)
12
1/3 Sq. / Coupon,
with coupon and
Web Site Link
VACATIONS Magazine
Travel & Leisure
Travel 50 & Beyond
$12,470
$38,000 (2012)
$5,620
1X
1X
1X
Full Page
Front Cover
Full Page
National Geographic
Traveller Magazine
Town & Country Travel
$92,000 (2012)
1X
Front Cover
$104,000 (2012)
1X
Front Cover
daily
Highway Radio
Media
Newspaper
A full page in Los
Angeles Times and San
Diego Union Tribune,
Half-page black and
white ad in the Wall
Street Journal National
Edition.
Sub-TOTAL
Consumer
Magazines
Southwest Airlines Spirit
Magazine
Radio
$96,900 (2012)
$12,000
25 Page 26 of 26 Television
72,000
Direct mail
$19,845
12 spots/mo for
12 months
1X
30 second
commercials
Post Card
Resort promotional expenditures:
Total advertising expenditures as 8.8% of the total sales
Total advertising expenditures as 93% of the total marketing budget
26 Page 27 of 27 Resort Sales Forecast
Summary of Strengths and Weaknesses
Strengths
Business climate
Available qualified
Employees.
Weaknesses
Business economy down
Cost of building materials
low.
Internal organization
Fresh New Sacred Historic
Hot Springs Resort
New Business Start-up and
early stage development
Political factors
The City of San Bernardino
has taken significant steps to
create the Arrowhead
Specific Site Plan
Low consumer expenditure.
State Government financial
issues.
Located in the Tourist
Capital of America
Low gasoline prices for
traveling
Social factors
More people are spending
their holiday in local regions
and we can accommodate
the social changes.
In a recession, people are
looking for a special
destination at a reasonable
price. Long distance travel
down.
Workforce
Easy to find qualified help
in the large unemployed
market.
During a recession,
Employees can be unstable.
Economic
California’s local residents
are 80% of our business.
During a recession, people
only spend money when
high value perceived for
their money.
Operational Plan
The Board of Directors will consist of members of the management team; together, they will have the
principal responsibility for fulfillment of the resort's mission and the legal accountability for its operations
and prevent perceived, potential mitigation issues, or actual conflict of interest. They will accomplish these
functions through regular scheduled board meetings on the first Wednesday of the month in the South
dining room at 11:30 am.
27 Page 28 of 28 Arrowhead Springs Resort Planning, Development & Management Team:
724 Years of Experience, Skill, and Knowledge in Planning, Development, and Management.
Management Specialty
Team Experience
Location
City of San Bernardino
Economic Development
San Bernardino, 200 Year
California
Draper & Company
Interior & Color Design
New York
187 Years
Layne Christian
Water
Irvine, California
128 Years
WATG
Planning & Designing Irvine 60 Years
Destination Resorts & Spas
California
Golf Course Architects
Tustin Rainville & Bye
Years in Business
40 Years
California
Tim Owens 33 Years
V.P. of Finance
Investment risk, taxation, packaged Laguna Niguel, securities, retirement plans, and account California
management.
Brian F. Faulkner
Securities Attorney
San Juan Capistrano, California
30 Years
BodyBestTM Doctors
Natural Holistic Medicine
San Juan Capistrano, California
30 Years
HMG
Resort Management
San Diego, California
25 Years
TransTech
Real Estate Development, Construction Management, Water Resource Engineering, Civil engineering
Walnut 21 Years
TOTAL
California
724 Years
28 Page 29 of 29 Resort Management Team
The CEO and General Manager, Calvin Belnap Ross, D.C., B.E.C.O. C.S.L. for The Arrowhead Springs
Resort, LLC comes from a family of doctors. Dr. Ross’s extensive clinical experience over the past thirty
years in managing six professional private practices, seeing of 160,000 patients over in Orange County and
San Diego County California. Past Owner and assistant manager of the families Gelande Inn restaurant, ski
shop, and lodge resort business at the at Snow Basin in the Wasatch National Forest East of Ogden, Utah,
host of the XIX 2002 World Winter Olympic Games.
The Hotel Management Group (HMG) from San Diego, California will administer all areas of Hotel
operations to position The Arrowhead Springs Resort as a state-of-the-art corporate complex Destination
Health Resort, Spa & Convention Center in Southern California. Our trained and seasoned management
team has direct knowledge of the hospitality industry and possesses the necessary professional
administration skills to make it all happen. Buyers may request the general manager take competitive bids
for these services before deciding which company will best serve the resorts 5-Star destination. The
proposed management team includes:
JOEL BIGGS, C.H.A.
Joel Biggs is President, Co founder and CEO of Hotel Managers Group. With 35 years experience Joel, is a
seasoned hotelier experience in the industry and recognized as a leading professional from serving as
President and Board Member of numerous Hospitality Associations and Convention and Visitors Bureaus.
CHARLES W. “JACK” GIACOMINI. C. H. A.
Jack Giacomini is a Founding member and principal of Hotel Managers Group, LLC (HMG), a veteran
third generation hotelier with extensive experience and a strong national reputation as a successful hotel
operator. Jack mainly focuses on new projects, development and hotel performance matters for HMG. He
currently serves on the Boards of San Diego Convention and Visitors Bureau, Lodging Industry
Association.
MICHELE DEMAYO, C.H.A
Michele DeMayo, Executive Vice President of Hotel Managers Group is listed in the “Who's Who” in the
Hospitality Industry and spends her free time researching travel trends and exotic vacations including
archaeological and culinary vacations.
ALAN BOWLES, II
Alan Bowles is Senior Vice President of Development and Principal of Hotel Managers Group. He was
responsible for the development of all the Hilton Family of Brands including Hilton, Doubletree, Embassy
Suites, Hilton Garden Inn, Homewood Suites, Hampton Inn and Hampton Inn & Suites. Alan was
successful in executing almost 200-franchise license agreement for the company. Alan works in the Los
Angeles Development office where he is responsible for new business and execution of the expansion
HMG Hotels throughout North America.
JERRY GRUBER
Jerry Gruber, Vice President of Operations has successfully managed and/or operated Full-Service
Convention Hotels and Destination Resorts for more than two decades. Jerry Gruber’s expertise as a
hotelier has taken him from Hawaii to Missouri and then back again from Utah to California. Jerry Gruber
29 Page 30 of 30 is an energetic innovator with a passion for affecting growth in revenue from sales, food, beverage, and
convention service departments with extensive experience in sales, food and beverages.
Staff Expenditures & License Permits
Our real estate attorney along with our development team will assist in administering licenses and permits
according the Arrowhead Springs Specific Site Plan submitted February of 2007 and final approval
February 11, 2010.
The resort will obtain the following required business licenses:
Hotel business licenses from the city of San Bernardino, including all permits from local, regional, state
and federal regulatory agencies.
State ABC liquor licenses
Restaurant and food handling licenses
Arrowhead Springs Water permit from the Federal Government
And other licenses, permits according to the Arrowhead Springs Specific Site Plan.
Total number of staff
Total number of kitchen staff
Total number of housekeeping staff
Total number of maintenance staff
Total number of administrational staff
Total number of security staff
Total number of sports and recreational staff
101
68
12
6
7
4
4
$915,840
$261,120
$184,320
$92,160
$201,600
$61,440
$115,200
Hotel Cash Flow
Total Sales 3 Years
Year 1
Year 2
Year 3
$2,156,000 $4,365,436 11,826,649
30 Page 31 of 31 Financial Analysis – five years
Revenue Assumptions:
01/01/2011
01/01/2012
01/01/2013
01/01/2014
01/01/2015
ASR – Income Fund
$94,000,000
$94,000,000
$94,000,000
$94,000,000
$94,000,000
Beginning Fund Cash
$134,232,000 $5,376,179
$1,376,710
$12,229,320
$14,263,149
Annual Acquisitions Inventory
$20,134,860
$202,007
$1,834,396
$2,139,472
Annual Acquisitions –
$107,385,600 $4,300,943
$1,077,638
$9,783,456
$11,410,519
Invest Activities:
$$806,427
Capital Assets:
Net Valuation of Annual
Acquisitions Cumulative
$133,131,298 $132,289,630 $122,289,630 $122,289,940 $118,897,095
Ending Fund Cash
$9,399,379
Estimated Value of
Existing Funds Net Asset:
$143,530,677 $155,146,536 $165,789,536 $177,467,937 $187,077,120
$4,967,590
$15,488,112
$17,196,062
$22,286,025
Interest Income on Average $144,036
Cash Balance.
$215,505
$306,836
$490,263
$592,231
Net Sale price(s) of
Property Sold
-
-
$14,428,937
$15,386,014
$23,729,918
Total Gross Revenue
$11,723,459
$13,636,262
$32,170.737
$34,467,709
$43,437,916
Percentage of total
Property Sold
0
0
10%
10%
10%
Cost basis(s) of Property Sold Inventory
-
-
$1,834,344
$1,834,349
$2,675,185
Cost basis of Property Sold
– Capital Assets
-
-
$9,783,170
$9,783,195
$14,267,651
Total Cost basis of
Property Sold
-
-
$11,617,515,
$11,617,544
$16,943,938
31 Page 32 of 32 Realized Profit Lost
-
-
$2,811,422
$3,768,469
$6,787,082
Estimated Annual Percent
of Operations
1.2%
1.2%
1.2%
1.2%
1.2%
Total Cost of Operations
$1,597,576
$1,803,147
$1,803,617
$1,923,252
$1,977,493
Total Gross Profit
$10,125,883
$15,834,115
$18,290,605
$20,926,913
$24,517,587
Total Gross Margin
86.4%
89.8%
58%
60.7%
56%
Cost of Operations
General and Administration Expenses
Annual Management Fee
Percent
1.5%
1.5%
1.5%
1.5%
1.5%
Management Fees
$1,603,470
$2,327,198
$2,486,243
$2,662,000
$2,805,157
Sales Commissions from
Portfolio Properties
-
-
$281,142
$376,847
$988,747
Profit Sharing Management $461,219
Co. – Income Properties
$1,464,234
$1,564,323
$1,710,521
$1,810,881
Profit Sharing Management Co. – Capital Gaines
-
$281,142
$376,847
$678,708
Estimated Annual Property
Taxes & Insurance
$998,485
$1,123,342
$1,127,261
$1,202,032
$1,239,933
Total General
Administration Expenses
$3,063,173
$4,917,774
$6,060,774
$6,692,490
$7,520,426
EBITA43
$7,062,710
$10,916,341
$12,688,831
$14,334,324
$16,997,661
$2,580,556
$646,421
$5,870,073
$6,846,312
Capitalized Assets
Organization Costs
$350,000
Capitalized Assets
Primary Capital Assets
43
$64,430,360
EBITA – Earnings before Interest, Taxes & Amortization. 32 Page 33 of 33 Secondary Capital Assets
$42,954,240
Total Capital Assets:
$1,720,377
$430,947
$3,913,382
$4,564,208
$107,735,600 $4,300,943
$1,077,368
$9,783,456
$11,410,519
Loans/Mortgages on
Properties – Interest
$3,419,720
$3,419,720
$3,077,748
$2,769,973
$$2,492,796
Start-up Loan due to
Management Co. – Loan
Interest
$56,000
$28,000
$28,000
$28,000
$28,000
Interest Expense
$3,419,720
$3,477,720
$3,105,748
$2,797,973
$2,520,976
Total Income before Taxes,
Depreciation &
Amortization
$3,586,990
$7,468,621
$9,583,083
$11,536,451
$14,746,185
Loss: Profit Sharing
-
-
-
-
-
Depreciation &
Amortization
$4,585,702
$,766,562
$4,400,472
$4,400,482
$4,280,337
Net Income before Taxes
($998,712)
$2,702,059
$5,180,687
$7,135,968
$10,195,848
Federal & State Income
Taxes
-
-
-
-
-
Loss Carry Forward for
Tax Calculations only
-
($998,712)
-
-
-
Estimated Net Income after
Taxes
($998,712)
$2,702,059
$5,182,611
$7,135,968
$10,195,848
Unrelated Gain (loss) on
Acquired Properties
$5,610,898
$11,940,278
$10,460,618
$9,969,242
$7,712,964
Estimated Net Income
(loss) after non operation
Income (Expenses)
$4,612,185
$14,642,338
$15,643,229
$17,105,209
$18,108,812
Estimated Net Operation
Margins
-8.52%
15.32%
16.11%
20.70%
23.47%
Estimated Cash Flow from
Operations
$3,586,990
$5,036,078
$4,918,733
$5,114,080
$5,299,922
Estimated Net Earnings per
Common Unit
$ (0.10)
$ 0.27
$ 0.52
$ 0.71
$ 1.02
33 Page 34 of 34 Estimated Cash Flow from
Operations
$3,586,990
$746,862
$9,483,083
$11,536,451
$14,476,185
Estimated Cash
Distribution to Common
Unit holders
-
($2,431,853)
($4,664,350)
($6,422,371)
($9,176,263)
Estimated Cash
Distribution per Unit
-
$ 0.24
$ 0.47
$ 0.64
$ 0.92
Estimated Net Cash flow
from Operations
$3,586,990
$5,036,768
$4,918,733
$5,114,080
$5,299,922
Loans/Mortgages on
Property
$40,232,000
-
-
-
-
Repayment of
Loans/Mortgages
-
($4,023,300)
($3,462,880)
($3,258,792)
($2,932,913)
Start-up loan from Mgmt.
Co.
$350,000
-
-
-
-
Start-up loan Reduction
($350,000)
Traditional Debt
Net Loan Mortgage Balance
Fund Valuation – Private Held
Est. Net asset Value per
Common Unit
$10.33
$11.89
$13.32
$14.81
$16.07
Est. Valuation per Unit –
Private Held
$9.92
$11.54
$12.92
$14.37
$15.59
Fund Valuation Private
Held
$99,229,716
$115,369,604 $129,205,567 $143,693,772 $155,860,477
Fund Valuation – Public traded
Est. Public Value per
Common Unit
$10.13
Fund Valuation – Public
traded
$101,275,690 $117,748,359 $131,869,600 $146,656,530 $159,074,095
$11.77
$12.92
$14.81
$16.07
Est. Internal rates of return
34 Page 35 of 35 Est. IRR on newly issued
Equity – Private held
16.25%
Est. IRR on newly issued
Equity – Public held
$16.78%
Appendix:
Current Arrowhead Springs Resort, LLC Security Offerings
Securities Offerings
Capitalization
Type of Securities
Pre-Seed
$100 to $500k
Bridge Notes
Seed Capital
$500k to $1MM
Common Equity
1st Stage Dev. Capital
$1MM to $5MM
Series A Preferred Units
2nd Stage Dev. Capital
5MM to 10MM
Series B Preferred Units
3rd Stage Expansion Capital 10MM to 100MM
Public Offering
Series C Preferred Units
4th Stage Expansion Capital $100MM to 500MM Common Units/Stock
IPO
Board of Directors assimilated as approved by Arrowhead Springs Resort, LLC.
Present Advisory Staff:
o Attorney:
Kevin Sherry - (Real Estate)
o Attorney:
Brian F. Faulkner - (Securities)
o Accountant:
Jerald Frazier
35 Page 36 of 36 o Insurance:
Jerry Smith44
o Banker:
Farmers & Merchants Bank
44
http://www.gen-ins.com/
36