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High Falls Dream Factory LLC
The Dream Factory
Mill Renovation
A Real Estate Development Opportunity
Hannah Kirby – hhkirby@hhkirby.com
Dean Jones – jonesmovie@aol.com
Brad Mills – bmills@supremecontractors.net
Mac Jordan – macj@rivermillvillage.com
The Dream Factory Mill Renovation
High Falls Dream Factory
1. Executive Summary
The High Falls Dream Factory project is the adaptive reuse of a former cotton mill in Burlington,
North Carolina. Development of the site will add entertainment and hospitality venues designed to
create a family entertainment destination located on a spectacular stretch of the Haw River just
north of the city of Burlington, NC.
The development includes:
Nine sound stages, administrative offices, studio support services managed by Atlantic &
Pacific Studios.
Water sports complex including kayaking, paddle boats, docks, and riverbank
boardwalk.
70mm, 1000 seat Movie Theater with a live performance stage.
35,000 square feet of performing arts and event space
Restaurants, cafes, pop-up retail, and public space
The former mill consists of 30 parcels on 20 acres and is located on the convergence of Stoney Creek
with the Haw River. The Stoney Creek reservoir is the smallest of the reservoirs that supply water to
the city of Burlington. The site also provides access to the Haw River Trail which provides over 20
miles of hiking trails as well as paddling through Alamance County, North Carolina.
High Falls Dream Factory LLC was created, in part, to bring investment capital, jobs, and
development to an underserved area of Burlington, NC. The company believes that creating a long
term venture that encompasses multiple entertainment, trade, service, and technical skill sets, to
east Burlington will enhance the community and provide avenues for further economic growth and
quality of life for the residents.
The 2017 Tax Cuts and Jobs Act established the Opportunity Zone tax incentive program. Under the
program, a Qualified Opportunity Fund (QOF) is certified as an investment vehicle, structured as a
corporation or a partnership which is organized for the purpose of investing in qualified Opportunity
Zone Property. The program provides powerful tax incentives to channel investment in low-income
communities, thus spurring job creation and economic development.
High Falls Dream Factory, in conjunction with Atlantic & Pacific Studios, plans to collaborate with
Alamance Community College to enhance that facility’s vocational training in film and television as
well as the skills that support the entertainment industry. As part of the program, Atlantic & Pacific
Studio will provide on-site training during the active, shooting and editing of motion pictures and
television projects in that company’s pipeline. It is estimated that the studio, dining, event and
entertainment center – The Dream Factory – will generate over 200 full time jobs and another 250
production specific jobs.
Copyright High Falls Dream Factory LLC – All rights reserved. Page 1
The Dream Factory Mill Renovation
High Falls Dream Factory mill renovation is fostered, in part, by the success of another mill
development project located about an hour south in the Town of Saxapahaw, NC. The adage of
“build it and they will come” has never been truer than with the transformation of this obscure little
town into a thriving center for food, live entertainment, the arts, and quality of life residences.
Nearly 48% of North Carolinians participate in outdoor recreation and rank opportunities for
hospitality such as restaurants and live entertainment important to the leisure time experience.
The following is an estimated timeline for completing the renovations to the mill and stabilizing
rents.
Lease / Purchase Option Execution 08/15/2019
Rough Site Plan 10/15/2019
Finalize Contractor Bids 10/30/2019
Secure Permits 12/01/2019
Complete Renovation minimal build out 03/01/2020
Stabilize Leases 08/15/2021
The High Falls Dream Factory project brings together seasoned professionals with the skills to bring
the project to fruition and success.
Jordan Properties – Mac Jordan
Jordan Properties started managing and developing real estate in 1978 with the development of the
historic mill village of Saxapahaw, N.C. Experienced in every aspect of design, development,
management, sales and construction, Mac has successfully completed over 200 residential, land,
and commercial projects
Studio Operations – Dean Jones
Dean Jones is a North Carolina native with over thirty years of experience in film and television.
Jones has worked on more than ninety (90) feature films and more than one hundred (100)
television episodes. Dean’s inspiration comes from his own artistic and entrepreneurial vision as
well as being ignited by the many Oscar award-winning Directors he has worked with over the
years. For his work on “Star Trek – Deep Space Nine,” Jones won two Emmy’s and earned seven
nominations.
Physical Operations – Brad Mills
Brad Mills is a native of Graham, NC, along with his wife of over twenty-five years, Karen, and their
two teenage children. Brad joined his family’s business, United Sprinkler Company, Inc. in 1983.
United Sprinkler Company was established in 1967 and has designed and installed Automatic Fire
Protection Systems throughout the eastern seaboard for over 50 years. Brad has been involved in
commercial construction for over 35 years.
HHKirby Real Estate Ventures – Hannah Kirby
Hannah Kirby defines her career by one simple principle - anything that can be conceived, can be
achieved. HHKirby Real Estate Ventures specializes in structuring investment strategies for real
estate development and, very recently, Opportunity Zone projects throughout the North Carolina
Piedmont region. With a background in technology, finance, and real estate, Ms. Kirby has been
Copyright High Falls Dream Factory LLC – All rights reserved. Page 2The Dream Factory Mill Renovation
recognized by the Council of Economic Advisors, Executive Office of the President, as an expert on
Opportunity Zone and Opportunity Fund investment.
Financials
Current project estimates for the renovation of the mill are $14,870,000. That budget will provide
for over 300,000 square feet of leasable studio, event, dining, theatrical, classroom, and office
space with a stabilized NOI of $1,800,000 after 4 years. The capital stack is expected to include
$5,000,000 in leverage, or 30% of the costs and results in an IRR of 19.7% after 10 years.
Equity Investment
High Falls Dream Factory plans to raise equity capital through a Joint Venture Agreement with
Carolina Opportunity Fund II. The qualified Opportunity Fund has been created specifically for
investment in the High Falls Dream Factory project.
Carolina Opportunity Fund II, LLC (the “Fund”) is the corporate name of the Fund. The Fund is
organized as a North Carolina Limited Liability Company organized in accordance with the North
Carolina Limited Liability Company Act (the “North Carolina Act”). Class B Units in the Fund will be
offered by means of a Confidential Private Placement Memorandum (“PPM”). The operation and
management of the Fund will be governed by a Limited Liability Company Operating Agreement.
Under the guidelines for Qualified Opportunity Fund investment, equity investors in Carolina
Opportunity Fund II will be required to hold their equity stake in High Falls Dream Factory in order to
receive exclusion from capital gains taxes resulting in the disposition of the asset.
The Joint Venture Agreement between High Falls Dream Factory and Carolina Opportunity Fund II
outlines provisions for the disposition of the asset.
2. Business Objective
2.1. Project Overview
The High Falls Dream Factory
project is the adaptive reuse
of a former cotton mill in
Burlington, North Carolina.
Unlike many projects of this
nature, the former Copland
Fabrics ceased operating in
2018 making this site one of
the best preserved old mills
in the region. The plan for the
mill involves turning over
500,000 sf of former factory
and corporate offices into
film and television sound
stages and studio support
services. Development of the site will add entertainment and hospitality venues designed to
create a family entertainment destination located on a spectacular stretch of the Haw River just
Copyright High Falls Dream Factory LLC – All rights reserved. Page 3The Dream Factory Mill Renovation
north of the city of Burlington, NC. High Falls Dream Factory and Atlantic & Pacific Studios have
executed a co-management agreement in which A&P will manage the studio space and Dream
Factory will renovate, develop and manage the entertainment and hospitality venues.
The development includes:
Nine sound stages, administrative offices, studio support services managed by Atlantic &
Pacific Studios.
Water sports complex including kayaking, paddle boats, docks, and riverbank
boardwalk.
70mm, 1000 seat Movie Theater with a live performance stage.
35,000 square feet of performing arts and event space
Restaurants, cafes, pop-up retail, and public space
2.2 Site Plan Overview
The former mill consists of 30 parcels on 20 acres and is located on the convergence of Stoney
Creek with the Haw River. The Stoney Creek reservoir is the smallest of the reservoirs that
supply water to the city of Burlington. The site also provides access to the Haw River Trail which
provides over 20 miles of hiking trails as well as paddling through Alamance County, North
Carolina.
The southernmost mill building rises nearly 60 feet above the river convergence with
spectacular views of the river. The lower mill buildings run northwest to southeast along the
banks of the Haw River which provides amble opportunities for outdoor space including kayak
and paddle boat launch docks, a boardwalk, cafes and pubs. The northwest entrance to the
lower mill space will also serve as the marquee entrance to Atlantic & Pacific Studios. The upper
mill also runs northwest to southeast with frontage on two sides on Carolina Mills Road and
Carolina Road. With over 150,000 sf of space, the upper mill is leasable “as is” for film,
television, music, and/or video production.
3. Business Premise
High Falls Dream Factory LLC was created, in part, to bring investment capital, jobs, and development to
an underserved area of Burlington, NC. The company believes that creating a long term venture that
encompasses multiple entertainment, trade, service, and technical skill sets, to east Burlington will
enhance the community and provide avenues for further economic growth and quality of life for the
residents.
3.1. Opportunity Zones
The 2017 Tax Cuts and Jobs Act established the Opportunity Zone tax incentive program. Under
the program, a Qualified Opportunity Fund (QOF) is certified as an investment vehicle,
structured as a corporation or a partnership which is organized for the purpose of investing in
qualified Opportunity Zone Property. The program provides powerful tax incentives to channel
investment in low-income communities, thus spurring job creation and economic development.
More information on Opportunity Zones can be found at:
Copyright High Falls Dream Factory LLC – All rights reserved. Page 4The Dream Factory Mill Renovation
https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions
3.2. Key Drivers
One of the major drivers in any real estate development project is the demographics of the
region. Burlington is centrally located between Raleigh and Greensboro. The Burlington
Metropolitan Statistical Area changed from 151,581 in 2010 to 156,357 in 2015, a change of
6,695 (4.4%). This metro is projected to have a total population in 2020 of 167,549. The
projected population change from 2010 to 2020 is 15,998 (10.6%).
The city is within the larger Combined MSA encompassing Greensboro, Winston-Salem, High
Point which has over 1.6 Million people and within one hour of the Raleigh, Durham, Chapel Hill
MSA of 2.1 Million people. Burlington is home to LabCorp and Honda Aero which are the city’s
largest private employers. The area is also home to Elon University, ranked number one in 2019
by Regional Universities South. The region has generated nearly $1 Billion in distribution center
business creating over 2000 new jobs.
Workforce Development
Among the most significant questions a company new to North Carolina or expanding in the
state must address is how to attract and retain a qualified workforce. No state has greater long-
term experience with successful workforce solutions than North Carolina. Its world-class
educational system of colleges and universities ensures a robust pipeline of candidates in fields
ranging from finance to nanotechnology. Its award-winning community college system provides
state-of-the-art training customized to meet an employer’s specific needs. North Carolina’s
workforce development system—one of the most comprehensive in the nation—brings
employer and employees together by managing recruiting, screening and other necessary pre-
employment assessments.
High Falls Dream Factory, in conjunction with Atlantic & Pacific Studios, plans to collaborate with
Alamance Community College to enhance that facility’s vocational training in film and television
as well as the skills that support the entertainment industry. As part of the program, Atlantic &
Copyright High Falls Dream Factory LLC – All rights reserved. Page 5The Dream Factory Mill Renovation
Pacific Studio will provide on-site training during the active, shooting and editing of motion
pictures and television projects in that company’s pipeline.
North Carolina’s Piedmont - Endless Opportunities
North Carolina's Business Friendly Climate boasts the lowest corporate tax rate (3%) in the country
Colleges & Professional Fortune 500
Infrastructure
Universities Athletics Companies
UNC - Greensboro FOOTBALL The region is Known as North
headquarters to these Carolina's
High Point University Carolina Panthers
Fortune 500 companies: Transportation Corridor,
UNC - School of the BASKETBALL Interstate's 40 &
VF Corporation
Arts 85 move
Charlotte Hornets billions of dollars’ worth
Laboratory Corp. of
NC A&T University of goods from the region
HOCKEY America
Wake Forest University and through the region
Carolina Hurricanes BB&T Corp each year
Elon University School
GOLF Hanes Brands
of Law
Wyndham Lowes Home to Piedmont Triad
Winston Salem State International Airport and
Championship
The Piedmont is also within an hour of
Guilford College
MINOR LEAGUE home to these Raleigh/Durham
An hour or less from BASEBALL businesses: or Charlotte
UNC - Chapel Hill Durham Bulls Lincoln Financial
Duke University Greensboro Honda Aero High Speed Rail
Grasshoppers Corridor
Highly educated Prescient between Washington
workforce punctuated DC
Walmart Distribution
by comprehensive and Atlanta
And Don't Even Get Us Center
workforce development
Started About
LIDL Distribution
Collegiate Sports Fiber Optic Spine
FedEx Mid Atlantic Hub between Washington
Amazon Fulfillment DC
and Atlanta
Job Creation
It is estimated that the studio, dining, event and entertainment center – The Dream Factory –
will generate over 200 full time jobs and another 250 production specific jobs. Recent estimate
indicate that for every skilled job created within a community, 5 additional service levels jobs
Copyright High Falls Dream Factory LLC – All rights reserved. Page 6The Dream Factory Mill Renovation
are generated. Given the multiplier effect of job creation, High Falls Dream Factory can and will
make a difference for the Opportunity Zone encompassing eastern Burlington.
Family Entertainment
High Falls Dream Factory mill renovation is fostered, in part, by the success of another mill
development project located about an hour south in the Town of Saxapahaw, NC. The adage of
“build it and they will come” has never been truer than with the transformation of this obscure
little town into a thriving center for food, live entertainment, the arts, and quality of life
residences. Nearly 48% of North Carolinians participate in outdoor recreation and rank
opportunities for hospitality such as restaurants and live entertainment important to the leisure
time experience.
https://www.nytimes.com/2012/01/22/travel/saxapahaw-nc-middle-of-somewhere-becomes-a-
draw.html
https://www.sissipahawlofts.com/gallery
Studio Drivers
Soundstage occupancy in LA is at 96% and the high cost of development coupled with
the lack of available sites has hampered the ability of the major studios to increase
capacity.
The State of Georgia had 455 movie and television projects in 2018 and is at capacity
with over 1.1 M sf of purpose built soundstages and 1.2 M sf of buildings retrofitted as
soundstages
The city of Toronto is also out of space with its 900,000 sf of soundstage at capacity.
Copyright High Falls Dream Factory LLC – All rights reserved. Page 7The Dream Factory Mill Renovation
4. Target Assets
4.1. Acquisition Strategy
High Falls Dream Factory is currently pursuing a Commercial Lease with an Option to Purchase
the former Copland Mill for $3,500,000. The option will be exercised within the next 12
months. The company will finalize the Lease in August of 2019.
4.2. Preliminary Planning
Pre-planning involved two distinct action plans for maximizing revenue generation of the asset;
the studio and office facility which is leasable as is and the entertainment, dining, and event
facilities which require renovation and build out. Planning process is as follows:
Production Ready – can lease today
• Office / Classroom space w/ conference
• Multiple warehouses for production, set building, lighting and services
• Space for simultaneous production and classroom activities
Planning
• Partition warehouses to contain ancillary production facilities (wardrobe, dressing rooms,
makeup)
• Determine space / cost requirements for Services Rentals (lighting, props, rigging, grips,
set building, cameras)
• Determine space / cost requirements for facility enhancements (standing sets, green /
white cyclorama walls, editing suites, post production)
• Determine budget for wide scale advertising
Implementation
• Build out Services Rentals facilities
• Build out Facilities Enhancements
• Determine space / costs for
Outdoor amphitheater and park
Landscaping
Back lot capability
Facility Potential
• Prepare site analysis to determine best use
• Identify site locations for:
Restaurant and Catering Facilities
Large Scale Event Center
Performing Arts Center
Large Screen Movie Theatre
Copyright High Falls Dream Factory LLC – All rights reserved. Page 8The Dream Factory Mill Renovation
Pre Development
• Determine corporate structure to take full advantage of O Zone business, O Zone funding,
and Historic Tax Credits
• Determine renovation scope and timeline
• Prepare Proforma for renovation / build out of spaces
• Secure zoning and permits
• Develop pre-leasing options
Phase One
• Determine project management team
• Determine budget for wide scale advertising campaign
• Bring in third party theater operator
• Bring in third party restaurant / catering operator
4.3. Implementation / Stabilization
The following is an estimated timeline for completing the renovations to the mill and stabilizing
rents.
Lease / Purchase Option Execution 08/15/2019
Rough Site Plan 10/15/2019
Finalize Contractor Bids 10/30/2019
Secure Permits 12/01/2019
Complete Renovation minimal build out 03/01/2020
Stabilize Leases 08/15/2021
5. Management Team
The High Falls Dream Factory project brings together seasoned professionals with the skills to bring
the project to fruition and success.
Jordan Properties – Mac Jordan
Jordan Properties started managing and developing real
estate in 1978 with the development of the historic mill
village of Saxapahaw, N.C. In 1983 John M. “Mac” Jordan
Jr. joined the firm and has worked has a licensed real
estate agent, property manager, licensed general
contractor, and developer for over thirty years. A graduate
of Duke University and North Carolina State, Mac
concentrated his studies in historic preservation and
community revitalization receiving a B.A. degree in public
Copyright High Falls Dream Factory LLC – All rights reserved. Page 9The Dream Factory Mill Renovation
policy and a Master’s degree in architecture. Experienced in every aspect of design, development,
management, sales and construction, Mac has successfully completed over 200 residential, land,
and commercial projects including:
Renovation and redevelopment of the textile mill villages of Saxapahaw (Alamance Co.) and
Cedar Falls (Randolph Co.), NC.
Redevelopment of the former Dixie Yarns Dye Plant into Rivermill Village, a multi-use complex
featuring an event center, coffee shop, charter school, café, retail strip and 29 high end
residential lofts in Saxapahaw, N.C.
Adaptive reuse of the Historic Saxapahaw Cotton Mill into Rivermill Apartments.
Renovations of the James Pharmacy and 115 Churton Office Buildings in historic downtown
Hillsborough, NC.
Conversion of Fowlers Store into Fowlers Bend Mountain Retreat, Hot Springs, NC.
Renovation of Webbwood Apartments, a married student housing building in Montreat, NC,
https://www.rivermillvillage.com
Studio Operations – Dean Jones
Dean Jones is a North Carolina native with over thirty years of experience in film and television.
Director David Lynch first discovered Jones while creating makeup effects on the Oscar Nominated
film “Blue Velvet”. Jones has since worked on more than ninety (90) feature films and more than
one hundred (100) television episodes. Dean’s inspiration comes
from his own artistic and entrepreneurial vision as well as being
ignited by the many Oscar award-winning Directors he has worked
with over the years. For his work on “Star Trek – Deep Space Nine,”
Jones won two Emmy’s and earned seven nominations.
Jones is a graduate from UNC Greensboro with a BFA in Acting and
Directing. Staying true to his North Carolina roots, he is a local
Rotary Club member, a member of the Boy Scouts of America Eagle
Scout Association, Brotherhood member of the “Order of The
Arrow”, Lodge 70 and committee member for Boy Scout troop 411
in Snow Camp, NC. Dean and his brother, Starr Jones produce the
annual North Carolina “Original Hollywood Horror Show” now in its
29th season and remains one of the largest haunted attractions in
the United States.
Atlantic & Pacific Studios and Global Genesis Group have entered into an agreement to produce
and distribute 8 films over the next two years. Subsequently, Atlantic & Pacific Studios will become
the first tenant for The Dream Factory and has committed to 10,000 sf of studio office space in
2019. Through their professional reach, A&P plans to actively market the facility to studio support
services such as camera, lighting and grip companies.
Copyright High Falls Dream Factory LLC – All rights reserved. Page 10The Dream Factory Mill Renovation
Physical Operations – Brad Mills
Brad Mills is a native of Graham, NC, along with his wife of over twenty-five years, Karen, and their
two teenage children. Brad joined his family’s business, United Sprinkler Company, Inc. in 1983.
United Sprinkler Company was established in 1967 and has designed and installed Automatic Fire
Protection Systems throughout the eastern seaboard for over 50 years. Brad has been involved in
commercial construction for over 35 years. Brad holds multiple industry licenses which include an
Unlimited Commercial General Contractor’s license and an Automatic Fire Sprinkler Contractors
license and is a certified tester of Water Back Flow Preventer assemblies. He is the Founder and
President of Supreme Contractors, Inc. and Vice President of United Sprinkler, Co. Inc. Brad has
extensive experience in all facets of commercial construction including State, Federal and Private
Contracts for Clearing and Grading, Water and Sewer, Paving, Heavy Highway, International Airport
Runways and Taxiways, Demolition, Commercial, Industrial, Retail, and Institutional construction.
Brad’s community service includes ten years with Alamance County Rescue Unit as a Certified IV
Technician and over fifteen years as a Sworn Law Enforcement Officer. Brad received the Paul Harris
Fellow award as a Member of Rotary International and is a 32 nd degree Master Mason in the
Masonic Lodge.
HHKirby Real Estate Ventures – Hannah Kirby
Hannah Kirby defines her career by one simple principle - anything that can be conceived, can be
achieved. HHKirby Real Estate Ventures is located in Hillsborough North Carolina. The firm
specializes in structuring investment strategies for real estate development and, very recently,
Opportunity Zone projects throughout the North Carolina Piedmont region. With a background in
technology, finance, and real estate, Ms. Kirby has been recognized by the Council of Economic
Advisors, Executive Office of the President, as an expert on Opportunity Zone and Opportunity Fund
investment. As such, Hannah Kirby serves as a User Advocate with The Opportunity Project - tackling
the issue of better utilizing and consolidating public and
non-public data to help investors, entrepreneurs, and
community leaders discover opportunities for economic
development in Opportunity Zones.
Historic preservation, adaptive reuse, and urban infill
projects provide a natural extension to management and
financial skills that Hannah has refined over the forty-
year span of her career. Driven by Fintech financial
specialization, HHKirby Real Estate Ventures is able to
take on complex commercial projects without the
burden of a large bureaucratic structure. While traditional mechanisms still exist, communicating
the significance of technological advances in capital structuring provides value to builders and
commercial buyers through alternatives that streamline process, balance risk, and clarify exit
strategies. Hannah is an active equestrian and together with her Andalusian partner, competes in
Dressage shows throughout the southeast. She is also an avid golfer, but often wishes that she was a
better avid golfer. Hannah volunteers her time with the First Tee of the Triangle, an organization
that teaches life skills through golf. Down time is spent with her best friend and husband, Jamey,
and their two incredibly spoiled dogs, Lily and Marty.
https://www.carolinaopportunityzones.com
Copyright High Falls Dream Factory LLC – All rights reserved. Page 11The Dream Factory Mill Renovation
6. Financial Projections
6.1. Development Costs
Costs include the renovation costs for the proposed leasable space to be completed for
Implementation / Stabilization in 2021.
Square Reno Cost / Renovation
Building Name Footage Sq Ft Costs
Office Complex 20000 20 $ 400,000
Sound Stage
120000 7 $ 840,000
Complex
Outdoor Complex 20000 75 $1,500,000
Theater Complex 38000 75 $4,500,000
Event Complex 34000 55 $1,870,000
Renovation Costs $9,110,000
Property Costs $3,000,000
Soft Costs
Architect & Design Fees $200,000
Site Improvements $1,000,000
Inspections / Permits $100,000
Entitlement $180,000
Equipment $80,000
Legal & Accounting Fees $80,000
Project Management $200,000
Insurance / Bonds $100,000
Advertising / Sales $200,000
Survey, Environmental, Geotechnical $120,000
Total Soft Costs $2,260,000
Total Development Costs = $14,470,000
Copyright High Falls Dream Factory LLC – All rights reserved. Page 12The Dream Factory Mill Renovation
The following table outlines the planned leasable space available. Note that the $3.00/sf rate is
being estimating for Atlantic & Pacific Studios who is also an owner of the project.
Description Leasable SF $/SF/Year Annual Rent
Office 1994 Addition Second Floor 3,360 18.00 60,480
Office 1948 Second Floor 2,280 18.00 41,040
Office - 3 small combined Second Floor 2,109 18.00 37,962
Office Addition - 2 small combined Second Floor 1,416 18.00 25,488
Office 1994 Addition Studio Ofcs 3,360 3.00 10,080
Office 1948 Studio Ofcs 2,280 3.00 6,840
Office - 3 small combined Studio Ofcs 2,109 3.00 6,327
Office Addition - 2 small combined Studio Ofcs 1,416 3.00 4,248
Camera / Lighting / Grip & Electric 5,514 3.00 16,542
Special Effects / Machine Shop 9,504 3.00 28,512
Rehearsal Hall Second Floor 28,327 3.00 84,981
Cast Dressing Rooms Second Floor 9,504 3.00 28,512
Movie Theatre Entertainment 21,853 15.00 327,795
Medical & Rescue Studio Svcs 1,960 3.00 5,880
Commissary & Catering Studio Svcs 8,085 15.00 121,275
Restaurant Entertainment 12,720 15.00 190,800
Shops Retail 5,280 21.00 110,880
Event Center 33,600 12.00 403,200
Stage One 9,139 20.00 182,780
Stage Two 19188 20.00 190,080
Stage Three 9504 20.00 566,540
Stage Four 20704 20.00 190,080
Stage Five 10351 20.00 437,060
Stage Six 16632 20.00 39,200
Stage Seven 11680 20.00 161,700
Stage Eight 8613 20.00 254,400
Stage Nine 10900 20.00 105,600
6.2. Unlevered / Levered Pre-tax Cash Flow
See Microsoft Excel Addendum
HFDF Cash Flow.xlsx
6.3. Unlevered / Levered Returns
The following table demonstrates the project return differences of borrowing a portion of the
capital stack vs financing entirely with equity.
Copyright High Falls Dream Factory LLC – All rights reserved. Page 13The Dream Factory Mill Renovation
Unlevered Levered
Lease Rate (Blended Average) $19.00sf $19.00sf
Stabilized NOI $1.8M $1.8M
Total Equity $15M $10M
Yield on Cost 12% 18%
Sale Cap Rate 8% 8%
Gross Sale Proceeds @ Cap Rate $30.5M $30.5M
Net Return on Equity $15.5M $21.5M
Equity Multiple 2.0x 3.2x
Project IRR 15.2% 19.7%
7. Investor Participation
High Falls Dream Factory plans to raise equity capital through a Joint Venture Agreement with
Carolina Opportunity Fund II. The qualified Opportunity Fund has been created specifically for
investment in the High Falls Dream Factory project.
Carolina Opportunity Fund II, LLC (the “Fund”) is the corporate name of the Fund. The Fund is
organized as a North Carolina Limited Liability Company organized in accordance with the North
Carolina Limited Liability Company Act (the “North Carolina Act”). Class B Units in the Fund will be
offered by means of a Confidential Private Placement Memorandum (“PPM”). The operation and
management of the Fund will be governed by a Limited Liability Company Operating Agreement (the
“Operating Agreement”) and the North Carolina Act. The principal place of business of the Fund will
initially be located at 111.5 N Churton St., Hillsborough, NC 27278 and its telephone number is 919-
448-7752.
The Fund is intended to qualify as Qualified Opportunity Fund for the purpose of providing equity
funding to a selected Opportunity Zone projects. The Fund will be treated as a closed end Qualified
Opportunity Fund under guidelines created by the Tax Cuts and Jobs Act of 2017 and will file Form
8996 to certify that it is organized to invest in Qualified Opportunity Zone property.
The Fund shall be owned by investors purchasing equity interests or membership shares (“Class B
Membership Units” or “Class B Units”) in the Fund, and who shall be called “Investor Members.”
Investor Members shall own 100% of the Class B Units in the Fund, each in a percentage equal to
their outstanding Class B Units divided by the total Class B Units outstanding (the “Ownership
Interest”). The Manager will be issued all of the Class A Units of the Fund.
The targeted annualized returns to Members will be between 12% and 18%. The Manager has
done extensive financial modeling based on what it believes are reasonable assumptions and
projections.
The Preferred Return is 8%. Subject to the performance of the Fund and after paying Fund
Expenses and the Management Fee to the Manager, Members will receive a Preferred Return of
8%, paid at intervals determined by the Manager and the receipt of operating or capital proceeds
from the real estate projects invested in by the Fund. The Preferred Return shall be cumulative
and any shortfall will carry forward to the next distribution interval (further defined in the PPM).
While the Fund’s objective is between 12% and 18%, an investment in the Fund is inherently
Copyright High Falls Dream Factory LLC – All rights reserved. Page 14The Dream Factory Mill Renovation
speculative and no specific return on invested capital or even return of invested capital is
promised or guaranteed.
The Fund will seek to raise the Maximum Offering of up to $9,000,000 in equity capital. The
Manager may or may not raise the full amount during the life of the Fund.
The price of each Unit shall be $50,000. Each member in the Fund agrees to purchase Five (5)
Class B Units of the Fund totaling at least $250,000 per unique Investor, which amount may be
adjusted in the sole discretion of the Manager.
Once the Fund has received a minimum of $5,000,000, raised capital will be released to the Fund’s
operating account and will be permitted to make investments with said capital, including release
funds to the developer/sponsor of the Project identified below.
See Dream Factory Term Sheet for more information on Carolina Opportunity Fund II
8. Disposition / Exit Strategy
Under the guidelines for Qualified Opportunity Fund investment, equity investors in Carolina
Opportunity Fund II will be required to hold their equity stake in High Falls Dream Factory in order to
receive exclusion from capital gains taxes resulting in the disposition of the asset.
The Joint Venture Agreement between High Falls Dream Factory and Carolina Opportunity Fund II
outlines provisions for the disposition of the asset.
This Brochure, Business Plan or Presentation (“Business Plan”) is not intended to be relied upon as the basis for any investment
decision, and is not, and should not be assumed to be, complete. The contents herein are not to be construed as legal, business,
or tax advice and each party that receives this Business Plan should consult its own attorney, business advisor, and tax advisor
as to legal, business, and tax advice. Certain information contained in this presentation is still in draft form and the contents of
this Business Plan have not been legally verified. In particular, it should be noted that the financial information (if any) contained
herein has not been audited. This Business Plan is qualified in its entirety by the more complete information appearing in the
PPM, and is subject to the detailed provisions of the Operating Agreement to be attached thereto as Exhibit A and the
Subscription Agreement and Signature Page from the Subscription Booklet accompanying the PPM. This offering is subject to
modification and withdrawal. Any capitalized terms not defined herein have the meanings ascribed to them in the PPM.
In considering any performance information contained herein, parties should bear in mind that past performance is not
necessarily indicative of future results. Information contained herein may include information respecting prior investment
performance of one or more Carolina Opportunity Funds (“COF”) strategies. Information respecting prior performance, while a
useful tool in evaluating an investment, is not necessarily indicative of actual results to be achieved for unrealized investments,
the realization of which is dependent upon many factors, many of which are beyond the control of COF.
No representation or warranty, express or implied, is given by or on behalf of COF, its affiliates or any of such persons' directors,
officers or employees or any other person as to (a) the accuracy or completeness of the information or (b) the opinions
contained in this document and no liability is accepted for any such information or opinions. The information and opinions
contained in this Summary are provided as at the date of this document and are subject to change without notice.
This Business Plan does not constitute an offer or solicitation to subscribe for or purchase any security. Recipients of this
Business Plan agree that COF, its affiliates and their respective partners, members, employees, officers, directors, agents, and
representatives shall have no liability for any misstatement or omission of fact or any opinion expressed herein. The Business
Plan is not intended for any general distribution or publication and is strictly confidential. This Business Plan and the information
Copyright High Falls Dream Factory LLC – All rights reserved. Page 15The Dream Factory Mill Renovation contained herein consist of confidential proprietary information and is the sole property of COF. Each recipient further agrees that it will (i) not copy, reproduce, or distribute this Summary, in whole or in part, to any person or party (including any employee of the recipient other than an employee directly involved in evaluating an investment in the Fund) without the prior written consent of COF; and (ii) keep permanently confidential all information contained herein that is not already public. Copyright High Falls Dream Factory LLC – All rights reserved. Page 16
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