Table of ContentsConfidentiality StatementI. Executive Summary Offering Summary Offering Terms Site PlanII. Project Overview Project Overview Area Map Aerial Map Mixed-Use Community Site PlanIII. Site Improvements On-Site Improvements Common Off-Site Improvements and Cost Sharing Brubacher Bid Extension Deposit AgreementIV. Market Overview Market Overview Demographic Report New Housing Study New Housing Starts MapV. Appendix Resolution of Final Approval NPDES Permit PNDI Search Results Zoning Ordinance – List of Permitted Uses
Confidentiality StatementThe material contained in this Offering Memorandum is confidential, furnished solelyfor the purpose of considering the acquisition of New Hanover Crossing (the “Project”)and is not to be used for any other purpose or made available to any other personwithout the express written consent of Heritage Building Group (“Seller”) or itssubsidiaries. The material is based in part upon information supplied by Seller fromsources it deems to be reliable. No warranty or representation, express or implied, ismade by Seller or any of their affiliates and/or assignees, as to the accuracy orcompleteness of the information contained herein.
EXECUTIVE SUMMARY New Hanover Crossing will feature 275,000 square feet of prime retail space on approximately 36 acres.Offering SummaryHeritage Building Group is pleased to present for sale New Hanover Crossing, a primeshopping center development tract located at the to-be-signalized intersection of Route 73 andRoute 663 in New Hanover Township, Montgomery County, Pennsylvania (the “Township”).This project will be sold fully-approved with all entitlements in place.Situated on approximately 36 acres, New Hanover Crossing features 275,000 square feet ofretail space designed to accommodate a new supermarket, Big Box Retailer, five pad sites, andin-line tenant spaces. Users will benefit from the sites highly-visible corner location with over2,100 feet of frontage and ample parking.The New Hanover Township market is experiencing a tremendous amount of residential andcommercial growth, with population totaling 195,000 within a 10-mile radius (projected todouble by 2015). Approximately 6,000 housing units have been recently developed or are in theapprovals process. This rapid growth is being driven by the market’s excellent location and therecent completion of a sewer plant expansion that has unleashed pent-up demand.
Offering TermsThe project is being sold on a fully approved basis. The purchase price of Ten Million FiveHundred Thousand Dollars ($10,500,000.00) will include the following: The approved value of the shopping center. Seller anticipates that all permits and approvals necessary to start the project will be obtained by October 2008. The value of two adjacent out parcels located along the projects Route 663 frontage obtained during the approvals process and not currently incorporated into the center. The cost of previously constructed offsite water improvements totaling $185,000. In addition to the purchase price, at closing the Buyer shall reimburse Seller for the following: The cost of 113 sanitary sewer EDUs previously purchased for $514,715.A comprehensive site-improvement bid supplied by Brubacher Excavating Inc., has beenincluded herein for on-site construction costs. Prospective buyers are encouraged to conducttheir own site improvement estimate.See Description of Common Off-Site Improvements and Cost Sharing Arrangement hereafterfor explanation of potential cost contributions and/or reimbursements for common off-siteimprovements required for New Hanover Crossing and two contiguous projects.At the time the final plans are recorded, Buyer shall be responsible for paying Traffic ImpactFees in the amount of $921,258 and fees-in-lieu of recreation space totaling $206,981.New Hanover Crossing is expected to be fully approved and permitted by October 2008. TheProject already has Final Approval from New Hanover Township. There are currently twooutstanding permits: PennDOT HOP and DEP Joint 105, which are anticipated to be receivedwithin the next two-to-three months. The PennDOT HOP is a single permit covering roadwayimprovements for New Hanover Crossing and two adjacent residential projects beingdeveloped by Seller. Seller may elect to split the PennDOT HOP into three individual permits,which may take an additional four-to-six months for approval.
PROJECT OVERVIEW New Hanover Crossing Route 73 & Route 63 New Hanover Township, Montgomery County, PAStreet Address: 3141 N. Charlotte Street Gilbertsville, PA 19525Lot Size: Approximately 35.9 Net AcresApproved SF: Approximately 275,000 SF Retail SpaceZoning: CB-1, Commercial BusinessAllowable/ProposedBuilding Coverage: Max Bldg. Coverage: 25% allowable (17.6% proposed) Max Impervious Coverage: 75% allowable (66.17% proposed)Parking Ratio: 4.6 spaces per 1,000 SF (1,260 spaces provided)Wetlands: The current plans place storm water basins in the two wetland areas to maximize total site coverage for the remainder of the site.Status of Approvals: Final Land Development Approval received from the Township. Two permits are currently being sought, PennDOT HOP and DEP Joint 105, which should both be received within the next two-to-three months. In the event Seller decides to split the PennDOT HOP, which covers the roadway improvements for New Hanover Crossing and two adjacent residential projects being developed by Seller, into 3 individual permits, then the PennDOT HOP approval may take an additional four- to-six months., PAPennDOT Approvals: Road improvement and traffic signal approvals are in process. HOP expected by Oct. 2008.Traffic Light StatusApproval: Currently working on traffic light improvements with Township and PennDOT. Signal permit expected by Oct. 2008.Utilities Status: Project is served by Public Sewer and Public Water; 113 sewer EDUs have been purchased for this project by Seller.Permitted Uses: Most Retail Uses permitted. See attached zoning ordinance.Housing Pipeline: Approximately 6,000 new housing units within New Hanover Crossing’s trade area have been developed or are in the approvals process. Pent-up housing demand is being absorbed rapidly due largely to the recent completion of a new Sewer Treatment Plant expansion.
SITE IMPROVEMENTSOn-Site ImprovementsThe attached site improvement bid, prepared by Brubacher Excavating, Inc., ("Brubacher Bid")is based on the land development plan set dated 10-23-02 last revised 1-25-06 by BohlerEngineering, Inc. The Brubacher Bid is also based on revised grading incorporated by Sellerinto the land development plan set dated 10-23-02 last revised 4-07-07 by Bohler Engineering,Inc., ("Final Plan") and further assumes a benchmark adjustment of five-tenths of one foot tobalance the earthwork on the site. An electronic copy of the Final Plan is included in thisOffering Memorandum.The Final Plan, with minor revisions, has received Final Approval from New HanoverTownship. Although the Brubacher Bid is comprehensive, prospective buyers should notassume that the Brubacher Bid includes all costs necessary to construct the project. Prospectivebuyers should therefore verify all quantities and unit costs, as well as perform their own duediligence for the project.Finally, the Brubacher Bid does not include the $172,908 cost for the New Hanover Crossingwater main, which shall be constructed by Superior Water Company. A draft Extension DepositAgreement with Superior is included in this Offering Memorandum.
Description of Common Off-site Improvements and Cost Sharing ArrangementIn addition to New Hanover Crossing, Heritage Building Group is developing two adjacentprojects: Hanover Glen - a 40 lot detached single family home community; and HanoverMeadows - an 870 unit age restricted community. The development of these projects willrequire the construction of certain common off-site improvements which include highwayimprovements along Routes 73 and 663, off-site sewer lines, the extension of Miles Road, and agas line approach.With respect to the Highway Improvements, in the event Seller decides to split the singlePennDOT HOP, which covers the roadway improvements for all three projects, into threeindividual permits, then the three individual permits will have overlapping scope of work.Heritage has developed cost estimates for these common off-site improvements and hasassigned contributions and reimbursements for each respective project to facilitate and insurethe necessary funding for the construction of the off-site improvements. The builder of NewHanover Crossing will be responsible for the scope of work required by its respective PennDOT permit including posting required financial security and will receive a reimbursement forthe overlap work in the event New Hanover Crossing starts before either or both of thecontiguous projects. Likewise, in the event one or both of the contiguous projects starts beforeNew Hanover Crossing then the builder of New Hanover Crossing will make a contributionfor the cost of common off-site improvements constructed by the other builder(s).For the New Hanover Crossing project, the assigned reimbursements and contributions forcommon off-site improvements are as follows:If New Hanover Crossing Starts First - The builder of New Hanover Crossing will receive atotal reimbursement of $842,500 consisting of $507,500 for the off-site sewer line, theextension of Miles Road, and the gas line approach plus $335,000 for the HighwayImprovements. These reimbursements will be secured by a cash escrow to be posted by theSeller at the closing of the sale of New Hanover Crossing. Each component of thereimbursement will be paid in two stages, 50% will be funded when the work is 50% completeand the balance of the reimbursement when the work is substantially complete.If One or Both of the Other Contiguous Projects Starts Before New Hanover Crossing – Thebuilder of New Hanover Crossing will be responsible for a total potential contribution of$1,469,000 for common off-site improvements or both of the other projects start prior to NewHanover Crossing. The components of the $1,469,000 are $154,000 for the gas line approachif either of the other projects starts first; $438,000 to the builder of Hanover Glen if HanoverGlen starts prior to New Hanover Crossing for the construction of the off-site sewer line andthe extension of Miles Road; and up to $877,000 to the builders of Hanover Meadows($335,000) and Hanover Glen ($542,000) if these projects start prior to New Hanover Crossingfor the overlap costs of Highway Improvements.The purchaser of New Hanover Crossing will have to secure its total potential contribution of$1,469,000 by providing acceptable financial security. Contribution amounts will be due onlyin the event construction of common off-site improvements are commenced by anotherbuilder(s) prior to the start of construction of New Hanover Crossing. The $1,469,000contribution may be reduced depending on the order of each project starting.
In the event New Hanover Crossing starts before one or both of the other projects and thebuyer of New Hanover Crossing undertakes construction of the common off-site improvementsthen the contribution/financial security amount will be modified or cancelled.The contribution for each component of the common off-site improvements will be payable intwo stages, 50% will be funded when the work is 50% complete and the balance of thereimbursement when the work is substantially complete.The amounts of reimbursements and contributions are fixed amounts. The builder of eachproject will be responsible for estimating the costs for off-site improvements which may berequired to be constructed at the start of each project but the reimbursement and contributionamounts set forth above will be fixed amounts.
MARKET OVERVIEW The New Hanover Township market is experiencing a tremendous amount of residential and commercial growth, with population projected to double by 2015Please see the following documents: A. Market Profile B. Demographic Report C. New Housing Study D. New Housing Starts Map
MARKET OVERVIEW Almost 900 new homes have been constructed in New Hanover Township since 2000.Market ProfileNew Hanover Township is a growing residential community located in Western MontgomeryCounty. The township is bisected by Route 73-Skippack Pike (also called Big Road), a majoreast-west route through Montgomery County. Swamp Pike, Route 663, is the major north-southroad through the municipality. New Hanover is also a short distance from the crossroads ofRoute 422, a major east-west U.S. Route, and Route 100, a major north-south State Route.While the northern and central parts of New Hanover are under-developed, the township hasbeen in the path of suburban growth as new development has expanded outward from the inner-ring Philadelphia suburbs. New Hanover is a desirable area for new residential constructionbecause of the availability of undeveloped land and easy access to the Montgomery and ChesterCounty employment and commercial centers such as King of Prussia, Exton, Pottstown andCollegeville.PopulationNew Hanover experienced a 20% increase in population from 2000-2005 to over 8,800residents, with an expectation that the population will double by 2015. The U.S. Census Bureauestimates demonstrate the projected growth of New Hanover and the surroundingmunicipalities in Western Montgomery County.Municipality 2000 2005 2010 2015 % Change 2000 -2015Douglass Township 9,104 10,217 11,300 12,120 33%New Hanover Township 7,369 8,853 9,230 10,390 41%Lower Pottsgrove Township 11,213 12,047 13,880 14,540 30%Pottsgrove Borough 21,859 21,551 21,150 20,880 -4%Upper Pottsgrove Township 4,102 4,926 4,900 5,750 40%West Pottsgrove Township 3,815 3,833 3,820 3,760 -1%Region Total 57,462 61,427 64,280 67,440 17%
Residential ConstructionBetween the years 2000 and 2007, an estimated 863 new homes were constructed. New homepermits (all single-family) peaked in 2003, but are anticipated to increase over the next year asa result of several new projects currently in the approval pipeline. With the recent completionof the Sewer Treatment Plant Expansion, many new residential projects finally have the meansto treat effluent, and therefore being construction. This has resulted in a dramatic increase innew residential communities in the market, and a sharp increase in the number of new homesbeing constructed. Annual Authorized Housing Permits Year Units 2000 43 2001 64 2002 131 2003 180 2004 148 2005 98 2006 64 2007 135 Total 863 Soruce: U.S. Census BureauCurrently there are approximately 47 residential communities (totaling an estimated 4,167residential units) that are either proposed, or under construction, or recently completed withinNew Hanover Township (see Housing Study included herein).Three of the most notable planned projects involve the redevelopment of the former NewHanover airport site, the Hickory Valley Golf Course, and the 216 Acre property assembledimmediately adjacent to New Hanover Crossing. Upon their completion, these threecommunities alone will provide an additional 1,766 new units into the New Hanover market.The Village at Wynstone, currently under construction, is a mixed-use retail and residentialdevelopment by TH Properties on the site of the former New Hanover airport and adjacent landbordering Douglass Township. Sales began in May 2008, with an astonishing 35 homes soldwithin the first two months.The Bart Golf Club Subdivision is a 134-home development planned for a portion of theHickory Valley Golf Course.Hanover Meadows, immediately adjacent to New Hanover Crossing, is an approved 870-unitActive Adult Retirement Community and Continuing Care Retirement Campus that is beingmarketed by Heritage Building Group. This large-scale senior project, when fully completed, isexpected to bring up to 1,000 new residents to New Hanover Township and will result intremendous demand for the retail and commercial services at New Hanover Crossing.
EmploymentThe New Hanover area employment base is a diverse mix of manufacturing and service sectorcompanies and institutions. The regions large school districts account for the most significantnumber of jobs. Regionally, there are several major developments that will enhance theemployment base over the next few years.The Philadelphia Outlet Center at Limerick is a 430,000 square foot, 110-store complex underdevelopment by Simon/Chelsea Property Group. This project was completed in Fall 2007; thecenter provides 800 to 1,000 jobs.Employer Location EmployeesWyeth Pharmaceuticals Collegeville 4,700SEI Investment Oaks 1,600Knoll, Inc. East Greenville 1,400Pottstown Memorial Medical Center Pottstown 1,300State Correctional Institution of Graterford Graterford 1,300Boyertown Area School District Boyertown 1,219Spring-Ford Area School District Collegeville 828Brown Printing Company Collegeville 825Montgomery County Geriatrics & Rehabilitation Royersford 725Exelon Limerick Generating Station Sanatoga 720National Penn Bank Boyertown 706Owen J. Roberts School District Pottstown 650Pottstown School District Pottstown 510Perkiomen Valley School District Collegeville 478Dana Corporation Pottstown 460Cabot Supermetals Boyertown 450Upper Perkioment School District East Greenville 391Daniel Boone Area School District Boyertown 388Pottsgrove School District Pottstown 381Neapco, Inc. Pottstown 325Wal-Mart #2263 Pottstown 315Federal Mogul Boyertown 308Superior Tube Company Collegeville 300Source: Tri-County Chamber of Commerce
TOWNSHIP / PROJECT UNITS UNIT TYPE(S) BUILDER / DEVELOPER STATUS OF APPROVALNew Hanover Township2032 Hoffmansville Rd 4 Single Family Detached Trim Development N/A2546 Swamp Pike 11 Single Family Detached RE/Max Achievers N/AAutumn Brook 71 Single Family Detached Ryan Homes Sold OutBart Golf Club 135 Single Family Detached Bart Golf Club Preliminary Plan ApprovedBella Vista 213 Single Family Detached Sal Lapio Currently SellingBriar Ridge Plan 56 Single Family Detached N/A N/AChris Yothers 4 Single Family Detached Chris Yothers Sketch PlanCovered Bridge Estates 70 Single Family Detached N/A Sold OutFlint Subdivision 6 Single Family Detached N/A N/AGreiner Property 37 Single Family Detached Rouse Chamberlin Preliminary Plan ApprovedHanover Glen 40 Single Family Detached Heritage Building Group, Inc. Preliminary Plan ApprovedHanover Greene 8 Single Family Detached Heritage Building Group, Inc. Currently SellingHanover Meadows 617 SFD, Towns, Twins, Apts/Condos Heritage Building Group, Inc. Final Plan ApprovedHanover Meadows (Assisted Living) 254 Individual Care, Full Care Units Heritage Building Group, Inc. Conditional Use ApprovedHanover Ridge 18 Single Family Detached Heritage Building Group, Inc. Final Plan SubmittedHanover Woods 47 Single Family Detached Heritage Building Group, Inc. Final Plan ApprovedHawthorne Estates 41 Single Family Detached TH Properties Currently SellingHeather Estates 25 Single Family Detached Rotelle Builders Sold OutJames Carroll Subdivision 6 Single Family Detached N/A N/AKingston Hill 269 Single Family Detached TH Properties Sold OutKingston Hill (Phase 2) 61 Single Family Detached TH Properties Currently SellingLookout Point III 5 Single Family Detached N/A N/AMann Tract 9 Single Family Detached N/A N/AMcGee 40 Single Family Detached Gambone Sketch PlanMikelen LLC 33 Single Family Detached Michael Clemente, Esq. Preliminary Plan ApprovedMinister Creek 81 Village Homes, Twins Kane Core Preliminary Plan ApprovedOrff Subdivision 2 Single Family Detached N/A N/ARenninger Property 71 Single Family Detached Gambone Sketch PlanRMG Properties 12 Single Family Detached Rhoads Property, LLC Currently SellingRMG Properties 2 4 Single Family Detached Rhoads Property, LLC Currently SellingRolling Meadows 68 Single Family Detached Stewart & Conti Sketch PlanRosenberry Ridge 15 Single Family Detached N/A N/AShaner Tract 12 Single Family Detached Clemens N/AShannon Rose Estates 33 Single Family Detached David Erb Preliminary Plan ApprovedSpring Meadow 8 Single Family Detached Sturbridge Builders Currently SellingSpring Ridge 54 Single Family Detached Gambone Currently SellingSterling Tract 10 Single Family Detached N/A Preliminary Plan ApprovedStone Acre Ridge 78 Single Family Detached TH Properties N/AStone Hill 39 Single Family Detached Heritage Building Group, Inc. Final Plan ApprovedTrotters Gait 54 Townhouse Sapphire Development Preliminary Plan ApprovedVillage of Wynstone 760 SFD, Towns, Atrium, Multiplex TH Properties Currently SellingViola Tract 2 Single Family Detached Viola N/AWassmer 181 N/A Gambone Sketch PlanWillow Woods 42 Single Family Detached Stewart & Conti Sold OutWindlestrae 384 SFD, Towns Gambone Currently SellingWindy Creek 50 Single Family Detached Beazer Homes Sold OutYerk Subdivision 2 Single Family Detached N/A N/AZavitsanos 122 Single Family Detached Heritage Building Group, Inc. Preliminary Plan Approved Total Units: New Hanover Township 4164Douglass TownshipBerwind II/THP 59 Single Family Detached TH Properties Sketch PlanBerwind Estates (Phase I) 57 Single Family Detached TH Properties Sold OutCleaver Road Tract 19 Townhouse A&B Development Sketch PlanClover Hill 12 Single Family Detached N/A Sold OutCobblestone Commons 19 Single Family Detached Stewart & Conti Sketch PlanCobblestone Crossing (Phase I & II) 165 Single Family Detached Stewart & Conti Currently SellingDienno Tract 24 Single Family Detached Kane Core Sketch PlanDonnelly Tract 40 Single Family Detached Gambone Preliminary Plan SubmittedEstates of Warwick 99 Single Family Detached TH Properties Sold OutHallowell Tract 95 Single Family Detached Danny Jake Sketch PlanSummer Hill 148 Single Family Detached Gambone Currently Selling Total Units: Douglass Township 737Upper Frederick TownshipEdge Hill 300 Townhouse TH Properties Preliminary Plan SubmittedBuckman Subdivision 6 Single Family Detached Richard Buckman Sketch PlanClover Meadows 45 Single Family Detached Regent Valley Builders Sold OutForest Tract 8 Single Family Detached N/A Sketch PlanPerkiomen Crossing 241 Townhouse Ryan Homes Sold OutScioto Village 94 Trim Development Preliminary Plan Approved Total Units: Upper Frederick Township 694N/A = Not ApplicableTownship UnitsNew Hanover Township 3,294Douglass Township 737Upper Frederick Township 694 Total: 4,725
AppendixPlease see the following documents: A. Resolution of Final Approval B. NPDES Permit C. PNDI Search Results D. Zoning Ordinance – List of Permitted Uses