You are on page 1of 2

Ref: BIR/SVP-2019/ROCH/2018-02-07

Bloom International Realty LLC
c/o Oxford Management
206 South Broadway, Suite 400
Rochester, MN 55904

City of Rochester
c/o Mr. Terry A Spaeth
201 4th Street SE,
Rochester, MN 55904 7 February 2019

Dear Sirs and Mesdames,

We write to humbly apologize for our delay in submitting a formal request for approval to proceed with
a reconfiguration of the Rochester Riverfront Development Project. We are not abandoning this project.
Bloom has invested heavily in the project and remain serious about seeing it to fruition.

The City is aware that the hotel element of our project was intended to address the present shortage of
luxury hotel accommodation in Rochester. The demand is largely driven by affluent medical patients
being treated at the nearby Mayo Clinic. Bloom was blindsided by the Mayo Clinic's announcement that
it intends to develop an upscale hotel, directly on its site, in partnership with the Pontiac Group. The
location of that hotel and its connection with the Mayo Clinic create a considerable competitive
disadvantage for our project. Whether demand over the next few decades would support two upscale
hotels in such close proximity has not yet been determined.

Bloom is reluctant to request the City to expend resources to push the Rochester Riverfront Development
Project forward until it has greater clarity. Bloom also recognizes that it cannot stand in the way of the
City offering the site to other developers. If this occurs, Bloom intends to compete with those other
developers. Before the Mayo Clinic announcement, Bloom and the City were only a few details away from
concluding the agreements.

Because of the magnitude of the investment involved, it is incumbent upon Bloom to exercise caution and
perform adequate due diligence before taking its final investment decision. As previously communicated
to the City, we are working with specialist consultants to address feasibility concerns flowing from this
setback. Our consultants are helping to provide clarity on the impact of the Mayo Clinic's hotel
development plan. They are assessing what, if any, modifications could be incorporated into the project
to mitigate the impact of these market changes. With a project of this scale and complexity, the
consultant's analysis and recommendations take time.

In seeking solutions, we have also reached out to the Pontiac Group in Singapore to enquire about the
possibility of partnering for the development of a single hotel, located on the project site.
We expect to deliver a revised proposal to the City for consideration in due course. Please advise if it
would be helpful for our senior management to attend a City Council meeting later this month to discuss
this matter.

Yours faithfully,

Sameh Muhtadi
Senior Vice President
Bloom International Realty LLC

Related Interests