HAND DELIVERED August 7, 2012 One Civic Plaza One Civic Plaza 400 Marquette, NW 400 Marquette, NW Albuquerque,

New Mexico Albuquerque, New Mexico 87102 87102 Mayor Richard Berry Albuquerque City Council City of Albuquerque City of Albuquerque 11th Floor 9th Floor RE: City Lease Agreement International Balloon Fiesta, Inc. With Albuquerque

Dear Mayor Berry and Members of the Albuquerque City Council: On October 31, 2012, the lease agreement expires with the City of Albuquerque (City) and the Albuquerque International Balloon Fiesta (AIBF) for the exclusive license to use the City's Balloon Fiesta Park (Complex). Under the current lease agreement, AIBF has the exclusive license to use the City's Balloon Fiesta Park during the period of August 1 to October 31. It is our understanding that under the lease, AIBF is not required to expend more than $50,000 a year for permanent improvements on the City Complex as a license fee for the exclusive use of the City Complex. The City is required to maintain the Complex and make improvements during the entire year. The City is also planning to construct a permanent "vendors row" at the complex contingent on bond approval by voters. On behalf of the food venders who elected this year not to enter into their contracts with the AIBF for the 2012 Balloon Fiesta, this letter is to formally request that the City negotiate new terms of the lease with the AIBF for the use of the City's Balloon Fiesta Park for future years that would be more beneficial to the City and taxpayers as a whole.

Specifically, the food vendors request that the new lease contain terms and conditions whereby the City assumes responsibility for the awarding and selecting contracts for food vending at the Complex during the Balloon Fiesta. It is proposed that the City assume responsibility for setting parking charges and collecting parking fees during the Balloon Fiesta. Under the above proposals, the City would contract directly with the food vendors under a competitive award basis, set and collect booth rentals as revenues to the City and continue to be responsible for policing or monitoring food quality through its Environmental Health Department as it has always done over the years. Further, the City's Parking Division would assume responsibility to establish and collect parking fees for the event and retain the proceeds as revenues to the City. All monies collected by the City from the rental of vendor booths and parking fees would be committed to maintaining and making improvement to the City owned complex. The above request is being made after AIBF rejected good faith offers and requests to change proposed food vending contracts that placed unreasonable demands and financial burdens only on the food vendors for this year's Balloon Fiesta. Further, AIBF has retained the services of a private concessions manager to manage the food vendors. At least 12 and as many as 19 local food vendors with 15 to 28 years experience each at the Balloon Fiesta have elected not to participate in this year's Balloon Fiesta. The decision by the vendors not to participate was highly emotional and difficult with many concluding AIBF was not interested in preserving the long term business relationships with the local, small business vendors. The food vendors that have decided not to participate in this year's Fiesta recognize full well the importance of the yearly Balloon Fiesta to Albuquerque, the state of New Mexico and the economy. However, the City needs to make sure that the best interests of taxpayers and local businesses are protected and that Albuquerque's

premier event does not lose its distinctive local character and become just another generic event in the United States. Respectfully yours, Pete Dinelli Steve R. Chavez Attorney at Law Chavez New Mexico Foods 1309 Dakota, NE 10127 Guadalupe Trail, NW Albuquerque, New Mexico 87110 Albuquerque, New Mexico 87114 Phone: 280-1471 Phone: 897-2322