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Investment Summary

EQUITY INVESTMENT

Fairmont Breakers Investco, LLC

Pass-through Equity Vehicle

Up to $50,000,000

14% Convertible Preferred Units

  • Premier Long Beach, CA Hotel & Spa (185 rooms)

  • Complete Renovation of 1926 Landmark

  • April 2024 projected completion, June 2024 projected open

  • No Comparable Hotel Property in Area

  • Conventions Now Booking (24 to Date)

  • Growing Local Economy ($3.5bn in Development)

  • Strong Local Support – See Video

INVESTMENT SUMMARY

  • The Fairmont Breakers Long Beach, a luxury AAA 4-Diamond Historical Hotel and Spa located in Long Beach, California (the “Breakers”), is in the final stages of a complete renovation with a projected construction completion in April 2024 and opening in June 2024.

  • The hotel’s cost of $243.39M will be fully capitalized by 6Founders (“6Founders”, a local sponsor) with $133.44M of cash equity investment, lenders ($106.25M), and “Key Money” from Fairmont Hotels ($3.70M).

  • Fairmont Breakers Investco, LLC (“Investco”) is a single purpose company created to enable up to $50,000,000 of 14% convertible preferred equity investment (the “Investco Preferred”) in 6Founders, which currently owns 94% of the Fairmont Breakers Long Beach.

  • Proceeds from this offering to be used to return a portion of previously invested 6Founders cash equity capital ($ for $, with no promote). 6Founders will retain at least $50,000,000 cash investment and no less than 50% equity holding in the project.

  • Investco Preferred investors will receive a pro-rata portion of all future distributions resulting from the hotel’s operations.

  • Upon a sale or refinancing of the project (a “Future Liquidity Event”), Each Investco Preferred investor may elect to either (i) receive a 14% cumulative preferred return and all their invested capital (the “Preferences”), or (ii) to convert to a pro-rata common equity position and participate in distributions to common equity holders.

  • If a Future Liquidity Event has not happened by October 31, 2028, Each Investco Preferred investor must choose between either (i) converting to a “Super Preferred” class of equity which continues to accrue a 14% preferred return and is entitled to all distributions until all their Preferences are returned, but doesn’t participate in any distributions thereafter, or (ii) converting to common equity and participating in all common equity distributions for so long as such common equity is outstanding.

Investment Strength

INVESTMENT STRENGTH

6Founders is developing the Fairmont Breakers Long Beach in Long Beach, California to return this historical hotel to its former purpose and glory. The strength of the investment is enhanced by exceptionally favorable conditions and product strength:

  • Extremely high barrier to entry.

    The Long Beach Downtown market has very limited opportunities for additional hotels to come to market. Any potential hotel development would take 10 to 20 years to come to fruition.

  • Irreplaceability of the asset.

    Fairmont Breakers Long Beach is the only historic hotel in Long Beach. The hotel is listed in the national register of historic building and its illustrious past is treasured by the local residents and historical societies nationwide. With its beloved history, art deco architecture espoused with brand new MEP system and modern amenities, this truly unique asset can never be replaced.

  • Luxury positioning

    The Fairmont Breakers Long Beach is the only luxury hotel in Long Beach, the only hotel with a luxury Spa, the only hotel with a comprehensive, diverse and exceptional food & beverage program, the only hotel with a rooftop terrace and bar, the only hotel with a live music venue. The Fairmont Breakers Long Beach is the answer to the long-awaited demand for a luxury hotel in Long Beach and will utterly dominate the luxury market.

  • Exceptional Hotel Brand and Hotel Management Company

    The Fairmont Brand consists of more than 80 extraordinary hotels, with several more in the pipeline. Its portfolio includes destinations–places such as The Plaza in New York City, The Savoy in London, Fairmont San Francisco, Fairmont Banff Springs in Canada, Fairmont Peace Hotel in Shanghai, and Fairmont The Palm in Dubai.

    Accor Hotels acquired Fairmont in 2016. Accor has over 40 hotel brands, managing 5,300 hotels and 10,000+ restaurant & bars in 110 countries, with 230,000+ team members. Accor is a remarkably strong management company, exceptionally dedicated to the well being of its employees.

INVESTMENT STRENGTH - continued

  • Strength of the product and each of its revenue generating centers - particularly in relation to demand generators

    The renovation of the hotel was carefully crafted to create several additional unique revenue generating outlets, to ensure that the hotel would become an experiential travel destination. Our guest will actively and meaningfully engage with the hotel and the city’s history, people, culture, food and entertainment. The same experience is also a welcome addition for Long Beach resident who we expect to be fully engaged with everything the hotel has to offer.

  • Unwavering city official support

    From the moment we acquired the hotel to now, city officials and local citizens have provided unwavering support to the Fairmont Breakers hotel development. To underline their support, the city granted the hotel $13M in Transient Occupancy Taxes rebates for the first 9 years of operations, further securing the successful opening of the hotel

  • Exceptional relations with Long Beach outstanding Convention and Visitor Bureau and Convention Center

    The bureau and center have once again been honored as the “Best in the West” in Northstar Meetings’ Stella Awards, a nationwide recognition of excellence in the event industry. This marks the sixth consecutive year Long Beach has won the award—more than any other bureau or center.

    Convention business is already at pre-covid level and booking for 2024 and beyond are at record breaking levels. Long Beach CVB has been the strongest supporter for our hotel. Two of 6Founders’ members currently serve on its board of directors. The hotel has already secured over 12 contracts in future convention business and has been designated a headquarter hotel for LA28 Olympic and Paralympic games.

  • The on-going revitalization of the city of Long Beach

    Long Beach is quickly becoming one of the hottest places to live in Southern California, thanks to the commitment of city officials over the last decade to the ongoing improvement of the quality of life in the city. The city backed its commitment with massive investments in new infrastructures and public services.

  • The city’s strong economic outlook

    Long Beach continues to grow. It is projected that the city will need 25,000+ additional residential units before the end of the decade and its population is expected to exceed 500,000 ppl. The favorable economic outlook is underlined by over $6 Bn in current development and has attracted high end industries and employers to the city. Long Beach is now considered one of the most important Space Industry hubs in the country, with several space companies either headquartered or represented in the city.

A UNIQUE, URBAN RESORT EXPERIENCE

Renovation is currently underway to transform the Fairmont Breakers Long Beach into an upscale, boutique hotel & spa, returning the historical landmark to its former purpose and glory. We’re infusing elegant, classic styling with contemporary, modern amenities to attract visitors seeking something extraordinary.

We are elevating the standard of Long Beach hospitality by providing guests with exceptional experiences and a quality of service that will make the Fairmont Breakers Long Beach a uniquely desirable destination. hotel details

THEY DON'T BUILD HOTELS LIKE THIS ANYMORE

The Fairmont Breakers Long Beach is a timeless feature of the Long Beach skyline, an irresistible historic landmark with a character and soul of its own. Built in 1926, the hotel was a symbol of prosperity, exemplifying the lavish and luxurious lifestyle that characterized the Long Beach waterfront in the jazz age of the roaring twenties. Once the most sought-after destination for celebrities and dignitaries, the hotel hosted the likes of Elizabeth Taylor, Cary Grant, Rita Hayworth, Clark Gable, and countless other famous guests. It was the place to be… and be seen.

It has since stood witness as Long Beach evolved into the international city we know today.
Now, the hotel is being lovingly restored to serve as an emblematic symbol of a glorious past - ready to meet the demands of an exciting future and ensure its legacy for generations to come. anymore

Overview

AN IDEAL SETTING

setting program assumptions S&D s&u2 projections mkt seg growth lb

Management Team and Partners

jm pic

John, with his father and family, built Molina Healthcare, Inc, from a fledgling start-up into a Fortune 200 company, serving nearly five million members and employing over 25,000 people nationwide.

As Chief Financial Officer, John oversaw all financial activity including corporate finance, investor relations, accounting, treasury, and actuarial functions - and was responsible for executing the expansion efforts of Molina Healthcare's business development, mergers and acquisition program.

John's business and philanthropic connections to Long Beach are numerous and well-known. He actively serves on the boards of the Long Beach Community Foundation, Long Beach Convention & Visitors Bureau, the California State University Foundation, and the Aquarium of the Pacific. He has helped develop many forward -thinking enterprises and successful commercial properties in the city.

Those projects include the reimagining and historic renovation of two rundown 1920s era buildings In Long Beach - the Press Telegram and Mocker Baker buildings - converted to an extended medical office complex as part of the city/s downtown revival along North Pine Avenue. Ents project was the heart of a major redevelopment effort in the state's seventh largest city which adopted new zoning egulations to speed development in the historic downtown. The project created over 200,000 sq. ft. f new office space, brought approximately 1,000 employees into the area to shop, work, and eat, and an estimated 52 billion over 10 years to the community. It also spurred new housing and retail. projects close to the office complex as development continues to edge into the city's historic core.

jm buildings

renato pic Renato is a results-oriented leader with a strong track record of performance in turnaround and high-paced organizations, and a strong advocate for ethical and motivational leadership. He brings 30 years of managerial experience in hotels, cruise ships and senior housing environment, with strong emphasis in luxury markets. This includes working for prestigious brands such as Cunard Cruise Line, Four Seasons Hotels & Resorts and Hilton Hotels.

Born and raised in Rome, Italy, Renato graduated from the National Institute of Tourism in Rome before joining the Italian Artillery Officer Academy, serving with the rank of 2nd Lieutenant until the end of his term. After getting his start in the hotel business in Rome, he was recruited by Princess Cruises and then Cunard Cruise Lines - working his way to the position of Chief Purser by the young age of 29.

Moving to San Diego with his wife, Renato refocused his career in hotel management, part of the opening management team of Four Season's Aviara, and involved in the ground-up development of the newly built Hilton Garden Inn Carlsbad Beach, which he later managed for four years.

In 2004 he was recruited by Aegis Senior Living, a luxury senior housing company based in Seattle Washington, working, his way to Vice President of Operations and a member of the company's Strategic Development and Acquisition team - supervising several ground-up construction and renovation projects.

In March 2011, Renato founded Wave Crest Hotels & Resorts and became its CEO. Wave Crest assumed management of the Hilton Garden Inn Carlsbad Beach and the ground up development of the Hilton Carlsbad Oceanfront Resort & Spa (now Cape Rey), which opened in June 2012.

Renato successfully operated both hotels for six years until 2017 when he joined the McKinney Capital Group as a partner in the hotel and real estate division, overseeing vetting and acquisition of Hospitality Assets, including hotels, resorts, casino, multifamily. Student housing and senior living facilities.

In March of 2018, Renato joined Pacific Six Enterprises as Director of Real Estate Development. He is heading the company's venture in the Hotel and multifamily acquisition and development. Currently is primarily focused on the renovation and repurposing of the Historic Breakers Hotel & Spa Long Beach, a AAA 4 Diamond full service Urban Resort, and the renovation and repurposing of the Historic Ocean Center Luxury Apartment Building, also located in Long Beach, Renato is also a key member of Pacific Six Financial Committee.

ARCHITECTURE

NADEL

Nadel Inc., founded in 1973, ranks amongst the top architectural firms in the United States. Their success is based not only on innovative design and execution of urban developments, but on the long-term relationships built with clients. From initial concept design through construction administration, Nadel’s strategic design and planning services are employed to best serve the business needs of clients while advancing a forward-thinking, highly memorable design aesthetic.

For over four decades, Nadel, Inc. has designed a diverse array of innovative, award-winning projects. The company’s reputation for architectural excellence is built on creativity, service, and integrity, all while incorporating cost-effective solutions.

Nadel specializes in a wide variety of retail, multi-family housing, office, hospitality, public sector, master planning, industrial and interior projects that successfully integrate community with aesthetically innovative and memorable design concepts.

Nadel’s leadership in the areas of retail, mixed-use, multi-family housing, office, sports complexes, hospitality, the public sector and interiors enable them to offer smart, dynamic solutions for a wide range of projects. Aesthetics play a fundamental role, but best-in- class, inspired design must also provide functionality, efficiency and the flexibility to accommodate both the current and long- term needs of the project. Nadel is committed to identifying and integrating conscientious resource management, energy-saving strategies and sustainability, including LEED, BREEAM and CHPS standards, into Nadel plans.

Ultimately, architectural excellence is the result of a synergistic developmental process involving everyone touched by the design process — a collaborative effort of the entire project team, client, and user groups, to produce innovative, functional, contextual solutions. Nadel is committed to adhering to the practical issues of program, budget and schedule throughout the entire design process to ensure the most successful results.

nadel pic

CONSTRUCTION

ARCO

Founded in 1992 on the principle that construction should be an enjoyable and beneficial process for associates and customers, ARCO has grown to become a leader in the design/build industry with offices in 17 major markets and hundreds of employees nationwide. As the 15th largest design/build general contractor in the United States, ARCO offers the strength and presence of a national builder with the personalized attention of a small company. ARCO offers complete, turnkey project delivery from site selection to building turnover.

ARCO’s professional, qualified team of engineers, project managers, superintendents and architects are capable of designing and building the most demanding projects anywhere in the country. They pride themselves in offering the best, most cost effective, single source solutions and adding value to every project.

ARCO has experience building all types of facilities. Having constructed more than 4,000 projects in more than 46 states and Canada, they have developed a wealth of knowledge and industry specific expertise to provide innovative design, creative solutions and uncompromising quality. More than 75% of ARCO’s annual revenue comes from repeat clients. This is attributed to the excellence of staff, the ability to fully comprehend project scope and a steadfast dedication to safety, quality, value and schedule.

ARCO’s approach results in reduced risk and exposure. The streamlined nature of the design/build process means a direct relationship with one company, solely responsible for the success of the project. Clear lines of communication and an ability to take total ownership of the task at hand allow focus on doing what they do best, managing their business. Experience

Because ARCO’s approach is comprehensive, each project is addressed with the maximum combination of experience, technical knowledge and management skills. This results in turkey project delivery with optimum outcomes.

arco pic

INTERIOR DESIGN

ROD PIC

Born in Chicago and raised in Mexico City, Rodrigo Vargas’ international and bi-cultural background has been an invaluable asset in his over 20 years experience managing the design and construction of large scale hospitality, retail and corporate developments in the US and abroad. Rodrigo’s passion for bold and timeless, yet unexpected design is reflected in the interiors he has created for international brands worldwide.

Services Interior Design

Specializing in 5-Star luxury hotels and resorts, multi-family commercial real estate projects as well as high-end residential work, RVD’s expertise and wealth of experience spans all sectors of the international world of Interior Design. Working closely with Clients, Brand Partners, Architects, Landscape Architects and other vendors designated by Clients, RVD’s unique, collaborative approach to Interior Design ensures all projects are exquisitely rendered and delivered, on- time and on-budget.

Interior Architecture

With a Degree in Architecture from prestigious MIT (Massachusetts Institute of Technology), Principal Rodrigo Vargas brings a unique perspective and highly qualified skillset, rarely found at other interior design firms, enabling him to seamlessly collaborate with the Project’s Architect through all phases of the Interior Design process including Concept, Construction and Completion.

Space Planning

RVD recognizes that thoughtful and strategic Space Planning is key to the overall success of every Project. RVD listens to the Client because the needs of each Project are uniquely different. From a high-end tropical resort with a multitude of honeymoon suites, to an urban high- rise tower targeting business and vacation travelers, to a multifamily project with an emphasis on delivering luxurious amenities, to a single family home, the specific needs of each Client enables RVD to create the most effective and economical approach to Space Planning.

Food and Beverage Design

From New York City sophisticated urban chic to Carmel Valley Farm-to- Table warm and rustic, RVD approaches each restaurant or bar design as a unique Destination which compliments not only the Property but the surroundings as well.

Furniture Design

Individuality is important to Clients and creating furniture that speaks to this is equally important to RVD. Creating individually styled pieces designed for each Project, and value-engineered to fit the Client’s budget, is a critical part of RVD’s design process.

Art and Accessory Consultation

Artwork and accessories can make or break a Project and RVD intimately understands this. Whether it’s sourcing dozens of sculptured surf boards for a huge tropical resort, or finding the perfect, one of a kind rustic lamp for a high-end ranch, selecting the right art and accessories is just another part of what is offered that will make the end product picture perfect.

Investment Terms

Issuer

Fairmont Breakers Investco, LLC (“Investco”), a single purpose North Carolina limited liability company created to acquire up to $50,000,000 of 14% preferred equity investment in 6Founders, LLC (“6Founders”) which currently owns, through project companies, 94% of the common equity of the Fairmont Breakers Long Beach, a luxury AAA 4-Diamond Historical Hotel and Spa located in Long Beach, California (the “Breakers”).

Securities Description

14% redeemable convertible preferred units of Investco. (the "Securities" or “Investco Preferred”), the senior equity of Investco. The Investco Preferred is senior in liquidation preference to all other equity interest in Investco and entitled, upon a sale or refinancing of the Fairmont Breakers Long Beach to either (i) a 14% cumulative annualized distribution and a return of invested capital, (together the “Preferences”) or (ii) the distributions such Investco Preferred investors would receive on an as-converted basis. The Investco Preferred is also accompanied by a redemption option.

Investment Objective

To generate both current income and capital gains for the Investco Preferred investors through the ownership of the Underlying Equity.

Offering Amount

Up to $50,000,000 of Investco Preferred issued on a continuous basis with a $50,000 minimum investment (the “Offering”).

Use of Proceeds

Proceeds from this Offering shall acquire 14% Convertible Preferred Equity of 6Founders (the “Underlying Equity”). 6Founders will, in turn, use funds it receives to return a portion of previously invested cash equity capital ($ for $, with no promote) to its investors. Upon completion of this Offering, 6Founders will retain $50,000,000 or more cash investment and greater than 50% beneficial equity holding in the project .

Operating Distributions

Operating distributions from the Fairmont Breakers Long Beach will me made to all equity owners of 6Founders (including Investco) pro-rata to their membership interest and on a pari passu basis, with any distributions received by Investco members reducing the amount of accrued Preferences.

Liquidity Distributions

Upon a sale or refinancing of the hotel (a “Future Liquidity Event”), each Investco Preferred investor may elect to either (i) receive their Preferences, or (ii) to convert to Investco common equity and receive a proportionate share of 6Founders distributions to its common equity holders. Investco Preferred investors electing to receive their full Preferences will not receive common equity of Investco.

Redemption Option

Between November 1st, 2028 and December 1st, 2028 (the “Redemption Notice Period”) each holder of Investco Preferred shall choose between either (i) having their Investco Preferred, and in turn their proportionate share of the Underlying Equity, redeemed by 6Founders on or before January 31, 2029, provided that funds are legally available, or (ii) having their Investco Preferred, and in turn, their proportionate share of the Underlying Equity, converted into common equity of Investco Preferred and 6Founders, respectively.

In the event an Investco Preferred holder chooses to have their preferred equity redeemed but 6Founders does not have funds legally available, such preferred equity shall be converted into a new class of preferred equity (the “Super Preferred”) which (i) continues to entitle the holder to cumulative preferred return accruing, but not compounding, at 14% per annum, and (ii) requires that all Preferences of the Super Preferred are reduced to zero before any distributions may be made to common equity holders of Investco Preferred, and in turn, 6Founders. Investors converting to the Super Preferred shall have no participation rights following the return of their Preferences.

Information Rights

Holders of the Investco Preferred shall be entitled to the following information prepared by the Board of Managers of 6Founders:

  • Within 120 days of the end of the Company’s fiscal year, a reviewed annual balance sheet, income statement, and statement of cash flows.
  • Within 30 days of the end of each of the Company’s fiscal quarters, an unaudited balance sheet, income statement, and statement of cash flows.
  • An annual budget and a report comparing the prior annual budget to the financial statements for the prior fiscal year.
Fees and Expenses

6Founders will pay Carolina Financial Securities, LLC a cash placement fee equal to 5% of the gross proceeds raised from this Offering. Carolina Financial Group, LLC shall act as the Manager of Investco and receive (i) a yearly “Management Fee” equal to 1% of the funds received by 6Founders as part of the Offering, payable solely by 6Founders, and (ii) 10% the distributions following the satisfaction of all Preferences in the form of a “Management Carry”. Sunstone Advisors, LLC shall act as the Investment Adviser to Investco and receive (i) an “Advisory Fee” equal to 1% of funds received by 6Founders as part of the Offering, payable solely by 6Founders, and (ii) 10% of the distributions following the satisfaction of all Preferences in the form of an “Adviser Carry”.

In the event Investco Preferred members convert their Investco Preferred to common equity, The Management and Adviser Carry shall be payable after such common equity holders receive aggregate distributions which would have satisfied the outstanding Preferences at the time of conversion.

Risk Factors

Speculative Investment

The Securities being offered should be considered a speculative investment. The ability of the Company to achieve its objectives may be determined by factors beyond its control that cannot be predicted at this time. Anyone investing in the Securities should do so only if they are financially able to sustain the loss of their entire investment and should recognize that such a possibility exists.

Project Cost and Completion Risks

Construction delays or cost overruns, including those due to general market conditions, shortages or increased costs of skilled labor and/materials, lender financial defaults, or so-called “Acts of God” may increase project costs

Lack of Market Comparable

While the Fairmont Breakers Long Beach is likely to be the single luxury hotel in Long Beach, such unique standing presents difficulties in identifying adequate comparable for the project’s forecasted financial metrics.

Unregistered Securities

These securities are offered pursuant to an exemption from registration under the Securities Act of 1933 and have not been reviewed or endorsed by the Securities and Exchange Commission or any other federal or state regulator.

No Secondary Market

Given their lack of registration, these Securities lack a liquid secondary market and an Investor should expect to hold these securities for the remainder of the Securities’ life.

Governance Risk

While investors in Investco will hold the majority equity of the issuer, such holdings will represent a minority equity position in the project’s overall ownership structure, with 6Founders founding members continuing to hold a majority of the project’s equity .

Redemption Subject to Funds Being Legally Available

Any redemption rights of investors holding Investco Preferred and in turn 6Founders, are dependent on Investco and 6Founders having the cash legally available on its balance sheet to effect such redemption.

Purchases by Parties with a Financial Interest in the Offering

Affiliates of the Issuer, 6Founders and other parties with a financial interest in the Offering may subscribe for the securities and such bona-fide subscriptions will be counted towards the Minimum Offering Amount.