From: shangrilaresort@shangrilaok.com [mailto:shangrilaresort@shangrilaok.com]

Sent: Wednesday, May 31, 2006 3:27 PM

To: rustyfleming@wavelinx.net

Subject: Update on Shangri-La Economic Development Legislation & Letter from Keith Bailey Chairman of

Shangri-La Advisory Board

Dear Members,

We hope everyone had a great Memorial Day weekend. We received a lot of questions from members over the holiday weekend about our pending economic development legislation. As a result, we decided to provide you with this brief update. As most of you know, the legislative session ended last Friday with no budget agreement. Fortunately, Gov. Henry called a special session that will allow lawmakers to pass a budget and consider economic development incentives similar to what we are pursuing for Shangri-La Resort. Thanks to all of you that have contacted your elected officials to voice support for this important project. We have worked very hard in a bipartisan way with the house, senate, and Governor Henry to get this legislation passed. The Tulsa World, Oklahoman, and Grand River Chronicle have provided good coverage on the project.

Our project/legislation has recently been unfairly attacked by the Delgiorino talk radio show in Tulsa. Dr. Cox went on the show last week to set the record straight regarding the facts, taxpayer protections, etc…about the legislation and did an excellent job.

If you support this legislation sponsored by Dr. Cox with bipartisan support from Senator Wyrick, we would greatly appreciate you voicing your support to any members of the Oklahoma House of Representatives or the Oklahoma Senate. A complete list of each can be found at www.okhouse.gov or www.oksenate.gov Each member’s phone number and email are listed on these websites. Additionally, key leaders that will be negotiating the budget compromise between the Governor, Senate and the House are:

Gov. Brad Henry - Janny.Cooper@gov.ok.gov

Speaker Todd Hiett - toddhiett@okhouse.gov

Representative Kevin Calvey - kevincalvey@okhouse.gov

President Pro Tem - Mike Morgan - bard@oksenate.gov

Senator Ted Fisher - wheeler@oksenate.gov

State Treasurer Scott Meacham - scott.meacham@treasurer.ok.gov

Representative Chris Benge – chrisbenge@okhouse.gov

With rising construction costs and interest rates, the economic development incentives are more important than ever for the successful redevelopment of Shangri-La Resort. At the request of Dr. Cox and other elected officials we have agreed to some first ever protections that strike a good and fair balance for all taxpayers. The Oklahoma Commerce Department has prepared an economic impact analysis on the project that is very favorable for the State of Oklahoma and they support this legislation.

Thanks again for your valuable time and consideration. Terry Frost the owner of Cherokee Yacht Club and others are hosting a fundraiser for Gov. Henry at the yacht club this Friday night at 7PM. Many area residents and leaders plan to directly voice their support at this event on June 2nd at the lake. Terry has been a strong supporter of this economic development legislation for Grand Lake and Oklahoma. Attached below please find a letter from Keith Bailey the Chairman of the Shangri-La Advisory Board to fellow members regarding this important project and legislation.

Sincerely,

Peter C. Boylan III

-----Original Message-----

From: Bailey, Keith

Sent: Wednesday, May 31, 2006 9:08 AM

To: Stephanie Gragg

Cc: Peter C. Boylan III

Subject: Email to members

I visited with Peter Boylan and he agreed that it would be appropriate for you to forward this email to the members.

I have been following Pete’s efforts to gain support from the legislature that would facilitate bringing in a high end hotel developer for Shangri-la. Having been involved at Shangri-la both corporately and personally virtually since its inception it is pretty clear to me that we need that type of catalyst to reinvigorate the resort. At its peak Shangri-la derived much of its economic vitality from the hotel and its associated amenities. At the time Oklahoma’s liquor laws contributed to the resorts “uniqueness” but there was no question it was the most elegant place to be on any of Oklahoma’s resort lakes. While the liquor laws have changed there is no question that the opportunity still exists for the right sort of hotel property to allow Shangri-la to regain that sense of uniqueness. That end result has great benefit, in my judgment, for all of us. It would enhance our own property values but even more importantly it would both increase the entertainment options available to us in our own backyards and it would eliminate the anxiety we have all felt as we have watched owner follow owner with a steady erosion of the resort property and the attendant uncertainty that creates for us as members. I understand that Pete is going to be emailing each of us with contact information for the Governor and key legislators and I encourage each of you to join me in supporting the efforts to achieve the sort of legislation needed to bring this needed development to pass.