This Work Statement outlines the
Scope of Work, a Schedule, the Project Team, and Fees and Expenses for the
contract between the Town of
I. Scope of
Work
The Scope of Work
allows SPPRE to work closely with the
Town Council (“Council”), the Council Committee on Lots 2 and 5 (“Council
Committee”), the public and Town Staff to structure and manage the public/private
finance and development of Town Parking Lots Number 2 and 5. The Scope of Work of services to be provided
by SPPRE includes the following parts:
·
Part
One: Pre-Developer Solicitation Process
o
Part
1A: Completion of Market Analysis
o
Part 1B:
Development of Master Plans for the Two Sites
o
Part 1C:
Cost Estimation and Financial Analysis
·
Part
Two: Developer Solicitation Process
·
Part
Three: Negotiation of the Development Agreement
·
Part
Four: Serve as the Committee’s Owners Representative During Construction
Part
One: Pre-Developer Solicitation Process
Preface for Part-One
In order to place the Town
Council in a position of strength during the developer solicitation process and
during negotiation of the Development Agreement, the Council/SPPRE Team will
complete the tasks outlined in Part 1A, Part 1B and Part 1C. The driving force
behind this proactive approach is for the Council/SPPRE Team to know whether
the proposed development opportunities are market-driven and financially
feasible prior to issuing the developer solicitation. This approach provides a basis for the
Council not to rely solely on the developer for items such as: market demand,
financial measurements, ability to obtain equity and debt financing, etc. Equally important, the Council/SPPRE Team
will know whether any private developer actually needs for any public partner
to provide a capital and/or non-capital investment in the proposed
development projects on Lots 2 and 5.
Part 1A: Market Demand Study
Task 1.1: Prepare
Draft Scope of Work for Market Demand Study
SPPRE will develop a draft Scope
of Work for a Market Demand Study. The draft Scope of Work will recommend an
approach examining demand for housing (condominiums and townhouses), retail and
office as they pertain to development of Parking Lots 2 and 5. SPPRE also will recommend
any additional uses for the Council Committee to consider including in the
study. SPPRE will recommend an approach for studying demand for parking
associated with the development of the sites.
SPPRE will provide an estimate of
the total fee for a study of housing, retail and office components of the study
as well as a schedule of fees for providing analysis of other potential uses
that the Council Committee may add to the study.
Task 1.2: Complete a Work Session with Potential Key
Public Partners
SPPRE will complete a work
session with representatives from potential public partners to discuss the
development of Parking Lots #2 and #5, and to provide them with the opportunity
to ask SPPRE questions about structuring public/private real estate
partnerships, public/private finance and the current requirements of the
capital market. Some of the entities
represented in this initial work session may include:
·
The
·
·
·
Orange
·
Chapel Hill/Carrboro Chamber of Commerce
In addition to these potential
public partners, it could be worthwhile to meet with key property owners and owners
of vacant buildings and/or vacant lots in strategic downtown locations.
Task 1.3: Complete a Work
Session with Committee on Market Demand Study
After the work session with potential key public
partners, SPPRE will complete a work session with the Council Committee on the
Market Demand Study and the draft Scope of Work completed as part of Task 1.1.
The work session will provide the Committee the opportunity to review the Scope
of Work for Market Demand Study and include any additional uses to the study.
Task 1.4: Revise Market Study Scope
of Work; Execute and Manage the Market Demand Study Contract
SPPRE will subcontract with
Economic Research Associates (ERA), a consulting firm based in
SPPRE will be responsible for negotiating this subcontract;
administration of the subcontract; and will review and approve all deliverables
produced by Economic Research Associates.
Task 1.5: Conduct Public Forum on Market Study Results
After
completion of the Market Demand Study, the Council will conduct a Public Forum
on the results of the Study to explain the opportunities and challenges related
to the development of Parking Lots 2 and 5. SPPRE will attend to answer
questions and present findings.
Task 1.6: Conduct Review Session with Council
Committee
SPPRE
and the Council Committee will discuss the Market Demand Study findings, Forum
comments, and how to proceed with the Land, Building and Infrastructure Program.
SPPRE will attend the meeting.
Task 1.7: Present Market Demand Study Findings
and Recommendations to Town Council
SPPRE
will present to the Town Council the Market Demand Study findings and its
recommendations on whether to proceed based on the study’s results. The Council
will decide at the meeting whether to proceed with the next phase (Part 1B) of
this Scope of Work and, if so, decide on the uses to include in the Land,
Building and Infrastructure Program (Task 1.8).
AT THIS POINT THE COUNCIL WILL DECIDE WHETHER TO PROCEED WITH PART 1B,
DEVELOPMENT OF MASTER PLANS FOR THE TWO SITES, OR CLOSE OUT THE CONTRACT
Part 1B: Development of Master Plans for Both Sites
Task 1.8: Prepare a Land,
Building and Infrastructure Program for Lots 2 and 5 Based
on Council Direction
Based on direction from the Town Council, SPPRE will develop a building
program for Lots 2 and 5. This building program will include land uses, square
footage, number of units, parking requirements, etc.
SPPRE also will determine whether the existing infrastructure could accommodate
the proposed building program.
The results of this task will be sent to the Council Committee for their review.
Task 1.9: Prepare
a Scope of Work for an Urban Designer/Architect and Subcontract with Firm
SPPRE will prepare a scope of work and subcontract with HKS Architects of
Dallas, Texas, at a cost not to exceed $32,000 plus project-related expenses to
prepare a master plan for each property.
HKS will complete master plans for Lots 2 and 5, as well as three
illustrative sketches. HKS will develop color sketches illustrating the desired
character and environment of the proposed developments. The HKS Scope of Work will call for the
development of an initial draft for Council Committee review, more detailed
drawings incorporating Council Committee comments, and revised final drawings reflecting
direction provided by the Town Council. In addition, the Scope of Work will
call for HKS to provide the Town a CD-ROM with digital images of the drawings
produced and stipulate that the Town has the right to use the images as needed.
Task 1.10: Design Review
Session with HKS, Council Committee
During the course of preparing a Master Plan for
both Lots 2 and 5, the Council Committee will complete a review session with
the HKS Team and SPPRE. HKS will send the initial drawings to the Town and
SPPRE prior to the meeting. SPPRE and HKS will attend the meeting.
Task 1.11: Select and Manage a
Local Construction Company to Provide a Cost Estimate of the Proposed
Development of Lots 2 and 5
In order to provide the Council Committee with an objective third-party
estimate of the “hard” cost to construct the proposed developments, SPPRE will
hire a local construction company to provide “pre-construction services” for
one to two months. The fee shall not
exceed $5,000. SPPRE will complete the
analysis to select the most appropriate local construction company for this
assignment. SPPRE will prepare the Scope
of Work and negotiate the contract.
Task 1.12: Conduct Public Forum, Second Design Review Session with HKS, Council Committee
The Council Committee will conduct
a forum to receive public comment on the draft master plans produced by HKS.
The forum will be followed by a Council Committee meeting to consider
recommendations. SPPRE and HKS will attend the forum and Committee meeting.
Task 1.13: Present Master Plans to Council
SPPRE will present the Draft
Master Plans to the Town Council and describe the next steps. Council will
review the Master Plans and consider any changes and whether to continue with Part
1C. SPPRE will attend the meeting.
AT THIS POINT THE COUNCIL WILL DECIDE WHETHER TO PROCEED WITH PART 1C,
COST ESTIMATION AND FINANCIAL ANALYSIS, OR CLOSE OUT THE CONTRACT
Part 1C: Cost Estimation
and Financial Analysis
Task 1.14: Subcontract with DesignVision
for Producing 3D Computer Renderings of Project for Lots 2 and/or 5 Based on Final Urban Design Plan
After Council authorization to
proceed with the next phase (Part 1C), SPPRE will subcontract with DesignVision, Inc. of
Task 1.15: Prepare “Total
Development Budgets” for the Development of Lots 2 and/or 5
The Total Development Budget will
provide the Council with all of the major “hard” and “soft” costs required to
finance, design, develop and construct the proposed development or developments. Soft costs include costs such as: architect
and engineers fees, developer fees, interest during construction, finance
transaction fees, etc.
SPPRE will also provide assumptions regarding Loan-to-Value ratio for each type
of building use to determine the current required balance of debt to equity
investment for each building type.
Task 1.16: Complete a Finance
Model for Development of Lots 2 and/or 5
SPPRE will complete a 10-year Pro-forma for each development. The Pro-forma will include all sources of
income, operating expenses, Net Operating Income (NOI), debt service, land
lease payments to the Town and the Cash Flow Before Taxes and Depreciation.
The Finance Model for each property will allow the Council/Consultant Team to
determine key financial measurements such as: 1) Leveraged and Unleveraged Internal Rate of Return (IRR), 2) Return on
Cost (ROC), Debt Coverage Ratio (DCR), etc.
These calculations will determine whether the proposed developments are
financially feasible using only private equity and debt. If the project(s)
cannot be financed 100 percent with private equity and debt, SPPRE will
determine the cash flow shortfall. If
there is a cash flow shortfall, SPPRE will develop alternative finance plans to
solve the shortfall in Task 1.19 (“Develop Up to Five Alternative Public/Private Finance Plans”).
Each Finance Model will also include comprehensive footnotes describing
assumptions and sources of financial input.
Part of the Finance Model for each property will also include a Reversion Value
Analysis. This analysis will provide the
Committee the Net Sales Proceeds, if the developments are sold in any year from
years 1 through 10. In the Development
Agreement, SPPRE will incorporate the requirement that when the selected
developer sells the building(s), the developer must share a negotiated
percentage of the net sales proceeds to the Town of
Task 1.17: Complete a Financial
Sensitivity Analysis Including Five Variables for Each Development of Lots 2 and 5
SPPRE will complete a Financial Sensitivity Analysis to provide insights
into how a project’s cash flow is impacted by an increase or decrease in
selected financial and development features. Factors used in this analysis
include; interest rates, rental rates, development cost, etc. The results of this analysis will provide the
Council/SPPRE Team with information to better assess the risk of ownership
and/or investment by either the public or private partner. The Council/SPPRE Team will jointly select
which variables to test, and will also want to test the impact on returns from
some combination of variables.
Task 1.18: Complete
a Review Session with the Council Committee
SPPRE will present the results of the Finance Model Analysis and Financial
Sensitivity Analysis (Tasks 1.16 and 1.17) to the Council Committee at a
meeting in
Task 1.19: Develop Up to Five
Alternative Public/Private Finance Plans
Once the pro-forma for each project has been
completed, the Council/Consultant Team will know whether the projects are
financially feasible. Most projects,
especially those with underground parking, do not “cash-flow”; as a result,
alternative public/private finance plans, which are acceptable to the equity
and debt capital markets, will be needed.
SPPRE will develop up to five (5)
plans, each of which will include general sources of equity and debt and
techniques to enhance cash flow and/or reduce development costs.
Task 1.20: Develop Up to Five
Alternative Ownership, Investment, Development and Operational Scenarios
Concurrently with the development of
Alternative Public/Private Finance Plans (Task 1.19), SPPRE will develop up to
five (5) scenarios describing alternative roles and responsibilities for the
Town, other public partners and the selected private developer(s). Each scenario will, at a minimum, address the
role of the “primary public and private partners” for owning, investing,
developing and operating the proposed development. The results of Finance Model Analysis and
Financial Sensitivity Analysis (Tasks 1.16 and 1.17)will
be incorporated into the evaluation of the five scenarios.
Task 1.21: Complete a Review
Session with the Council Committee
The results of the development of Alternative Public/Private Finance
Plans (Task 1.19) and the Alternative Ownership, Investment, Development and
Operational Scenarios (Task 1.20) are critically important to implementing the
public/private development of Lots 2 and 5; consequently SPPRE will complete a
work session with the Committee. SPPRE will attend the Review Session.
Task 1.22: Complete Work Session,
Forum with the Town Council
SPPRE will present the results of
Tasks 1.20 and 1.21 to the Town Council and be available for questions on the
Council Committee’s recommended developer solicitation process. SPPRE will
attend the meeting.
Task 1.23: Attend Town Council
Meeting on Whether to Proceed
SPPRE will attend the Town Council
meeting at which the Council will consider whether to proceed with Part 2,
Developer Solicitation and Selection.
AT THIS POINT THE COUNCIL WILL HAVE DECIDED WHETHER TO PROCEED WITH PART
2, THE DEVELOPER SOLICITATION AND SELECTION PROCESS, OR CLOSE OUT THE CONTRACT
Task 1.24: Revise Recommended Public/Private Finance Plan and
Ownership Scenario to Incorporate Council’s Changes
If the Council elects to
continue with Part 2, SPPRE will incorporate the results of the meetings
into SPPRE’s recommended public/private finance plan
and ownership scenario. SPPRE will use a
bullet format and PowerPoint software to summarize the results of Tasks completed
to date.
Task 2.1: Complete an Initial
Draft of the Developer Request for Qualifications
The developer Request for Qualifications and Request for Proposals will
incorporate the conclusions of work completed to date and especially the
“Principles and Priorities for Use of Parking Lots 2 and 5 for the Town of
The draft Request for Qualifications prepared by SPPRE also will include
recommended graphics in support of the text and as a means to better “sell” the
proposed development opportunities.
Task 2.2: Draft Potential
Evaluation Criteria for the Developer Request for Qualifications Submittals
SPPRE will recommend for the
Council Committee’s consideration the most appropriate format to evaluate the
developer Request for Qualifications submittals. Major categories of criteria may include:
Proposed Development Manager assigned to the project, level of experience with
mixed-use developments at a similar scale, financial backing on projects
developed in the last five years, etc.
Task 2.3: Review Draft Request
for Qualifications and Evaluation Criteria with the Council Committee
SPPRE will attend a work session with
the Council Committee to provide the Committee an opportunity to review the
Draft Request for Qualifications and to discuss with SPPRE a number of
important items, such as:
·
Developing and prioritizing the developer
evaluation criteria.
·
Identifying the important issues in order to
make sure that these items are included in the Request for Qualifications.
SPPRE will provide guidance, but the Town will decide which criteria are the
most important, which in turn will be emphasized in the drafting of the Request
for Qualifications and possibly the development of a weighting system for the
criteria.
·
In conjunction with SPPRE, the Town needs to
decide what type of developer they want to attract.
Task 2.4: Revise Request for
Qualifications to Incorporate the Council Committee’s Changes
SPPRE will revise the Request for Qualifications to include changes made
by the Council Committee at the review session (Task 2.3).
Task 2.5: Develop a List of
Potential Developers and Other Real Estate-Related Companies to Receive the
Developer Request for Qualifications.
SPPRE will use its national network of development-related companies and any
other information provided by the Town to optimize the quality and number of
private companies receiving the Request for Qualifications.
SPPRE also will complete the research required to identify the most qualified
developers in the State of
Task 2.6: Prepare an
Advertisement for the Request for Qualifications
SPPRE will prepare an advertisement of the developer Request for
Qualifications to be placed in regional and/or national real estate
magazines. SPPRE will provide a list of
potential media contacts for use by the Town.
Task 2.7: Present Draft Request
for Qualifications to Town Council for Consideration
SPPRE will present the revised Request for Qualifications to the Town
Council for its consideration.
Task 2.8: Prepare for and
Execute a Pre-Proposal Conference
The Town will host a one-to-two hour pre-proposal conference for developers
and related companies so that they may better understand the development
opportunity and ask questions about the opportunity and the requirements of the
Request for Qualifications, as well as see the project site.
Task 2.9: Evaluate Up to 15 Developer Request for Qualifications Submittals;
Recommend Developer
“Short-List”
SPPRE will complete an Evaluation Matrix for responses received, which will apply
the evaluation criteria to each of the developer candidates in tabular format. In addition, SPPRE will prepare a memo
summarizing the basis for our recommended “short-list” of five (5) developers.
If the Committee receives more than 15 proposals, SPPRE would need to increase its
fee for this task accordingly.
Task 2.10: Prepare a Draft of the Developer Request for Proposals
Once the Request for Qualifications step has been completed and five qualified
developers have been identified, SPPRE will prepare a draft of the Developer
Request for Proposal (Request for Proposals).
The draft including recommended graphics (“the mock-up” copy) will be
submitted to the Council Committee for their review.
The Request for Proposals is a highly technical document, which must be written
to generate creative solutions from the developers, yet maximize conformance of
the requested information. SPPRE will make
every effort to obtain comparisons that are based on consistent parameters, but
not to the point of inhibiting creative solutions by the five developers.
Task 2.11: Draft Evaluation
Criteria for the Developer Request for Proposals
The criteria for evaluating developer responses to the Request for Proposals will
be primarily focused on proposed deal structure, financial measurements,
requested capital and non-capital investment from the Town, and possibly by
other public partners, sources of debt and equity, etc.
Task 2.12: Review SPPRE’s Recommended Short-List of Developers; and
Review Draft Evaluation
Criteria and Request for Proposals with the Council Committee
SPPRE will present to the Council
Committee its recommended short-list of developers. SPPRE also will review the
draft Request for Proposals and Evaluation Criteria developed by SPPRE. SPPRE
will attend meeting.
Task 2.13: Revise Draft Request
for Proposals, Evaluation Criteria to Incorporate Council Committee’s Changes
SPPRE will revise the Draft Request
for Proposals and Evaluation Criteria to incorporate the Council Committee’s
suggested changes.
Task 2.14: Present Recommended Request for Qualifications Short-List;
Present Draft Request for Proposals and Evaluation Criteria to Town
Council
SPPRE will present the Request for
Qualifications Short-List, Draft Request for Proposals and Evaluation Criteria
will be presented to the Town Council for consideration.
Task 2.15: Revise Request for Proposals, Evaluation
Criteria to Incorporate Council Changes
SPPRE will revise the Request for
Proposals and Evaluation Criteria to incorporate changes made by the Town
Council.
The Town will produce the final
Request for Proposals document and distribute it to the developers on the
short-list. SPPRE will review the “master copy” before the Town sends it to a
printer for production.
Task 2.16: Complete a
Comprehensive Evaluation of the Developer Request for Proposals
SPPRE will use a consistent matrix format to evaluate each of the technical
proposals submitted by the five developers.
SPPRE will complete the financial analysis of each developer’s proposal
required to calculate the following financial measurements:
-
Internal Rate of Return, Leveraged and Unleveraged
-
Return on Cost
-
Debt Service Coverage Ratio
-
Maximum Loan Amount
-
Total Project Value
-
Development Profit
-
Loan-to Value
These financial measurements provide the Council Committee with information on
how potential equity investors and construction lenders will view the
developers pro forma. SPPRE will use this information to determine whether the
developers actually need capital and non-capital assistance requested from the
Town and/or other public partners.
SPPRE will also analyze the assumptions used by the five developers to
determine whether these inputs to the pro forma are in line with the current
capital market for equity and debt.
In addition, SPPRE will analyze the terms of the proposed deal structure
between the developer and the Town. SPPRE
will pay particular attention to whether the various types of land lease
payments from the developer to the Town are contingent and non-contingent
income and whether the proposed payments to the Town are subordinated or
non-subordinated to the debt service and/or returns on equity.
Task 2.17: Develop Questions
for Each Developer
After evaluating each developer proposal, SPPRE will
prepare a series of questions for each developer to answer during their
respective interviews.
Task 2.18: Complete a
Presentation Summarizing SPPRE’s Pre-Interview
Ranking of the Developers
SPPRE will incorporate all of its analyses, developer questions, and
pre-interview rankings into a brief report using a PowerPoint format. This format will allow SPPRE to use this
deliverable as an efficient method to also make a presentation to the Council Committee,
or the full Town Council, prior to completing the interviews of each
developer.
Task 2.19: Complete an
Interview of Each of the Five Developers
The evaluation of each developer and the final
selection will be based both on objective and subjective criteria, as well as
the subjective assessment of their “real” desire to be selected. Being creative, demonstrating enthusiasm and
having a strong sense of integrity are all extremely important to ranking the
developers.
Task 2.20: Prepare a Draft Memo Providing a Detailed Explanation of SPPRE’s Suggested Ranking of the
Five Developers
SPPRE will submit a detailed report to the Council Committee explaining the
basis of SPPRE’s ranking of three to five developers. The Request for Qualifications and Request
for Proposals evaluation matrices will be included in the report, as well as
the evaluation of the developer interviews.
SPPRE and the Council Committee will jointly rank at least the top three
developers; after this step, the Committee will recommend a developer to the
Council.
Task 2.21: Review Final Summary
Report with the Council Committee and Include Changes
SPPRE will attend a meeting with the Council Committee to review the draft
summary report with the Committee and incorporate all changes.
Task 2.22: Present Report to
the Town Council
SPPRE will present its report to
the Town Council. The Council will consider selecting a developer for negotiating
a land lease agreement and/or a development agreement.
AT THIS POINT THE COUNCIL WILL DECIDE WHETHER TO PROCEED WITH PART 3,
NEGOTIATION OF LAND LEASE AND/OR DEVELOMENT AGREEMENTS OR CLOSE OUT THE
CONTRACT
Task 2.23: Complete Summary
Report; Produce Final Copies
Upon authorization by the Council
to proceed with negotiations, SPPRE will finish the Final Summary Report
developed during Part 2 and, in conjunction with a printing house, produce 25
bound hard copies. In addition SPPRE
will provide an electronic copy for use by the Town.
Part Three: The
Negotiation of the Land Lease and/or Development Agreements with Selected
Developer
Preface
If both the public and private
partner make every effort to negotiate a Development
Agreement in a timely manner, negotiations usually require about 60 to 90
days. In order to achieve that fairly fast time schedule, SPPRE, the
attorneys and the developer must act like deal makers not deal breakers.
Both the public and private partner must be flexible in negotiations-not hung
up on one relatively unimportant deal point. Both partners may also have
to be creative to solve the typical “gap” financing. Solving the gap in
the cash flow and/or reducing the development budget are where the consultant
plays an important role.
Description of Part 3 Tasks
The tasks described below are
subject to greater specificity to be provided by amendment to this Work
Statement at the time this phase is begun. Throughout the negotiations stage,
SPPRE will report to the Council Committee and the Town Council as necessary.
Task 3.1: Negotiating the
Ground Lease.
[Note: Omit Task 3.1 and skip
to Task 3.2, Negotiation of Development Agreement, if the Council decides
during the Developer Solicitation and
Selection Process (Part 2) not to
pursue the Ground Lease option]
If the Town decides to use a
Ground Lease, the following six land lease payments to the Town will be
considered:
·
Construction Period Rent: Developer payments to
the Town prior to the opening of a building
·
Base Rent: Annual payment to the Town based on
land value and maximum percentage of Gross Income
·
Indexed Rent: Payments adjusted periodically
based on change in the Consumer Price Index, to avoid negative impact on income
to the Town from inflation.
·
·
Percentage Rent: After debt service, required
return to developer, and other key expenses, the Town could receive a
negotiated percentage of the cash flow before taxes and depreciation
·
Net Sales Proceeds: When a private owner decides
to sell a building the Town would receive a negotiated percentage of the net proceeds
from the sale or refinancing.
Task 3.2: Negotiating the
Development Agreement.
The negotiations process requires following a process that fosters
effective communication between parties; it is difficult at this point to
predict how the negotiations discussions will occur. Generally, the process
likely will begin with an outline of a Development Agreement, proceeding into
discussions between the Council/SPPRE team and the developer on each point. The
agreed-upon draft agreement will be sent to attorneys for drafting the final,
binding legal documents.
During the negotiations process, SPPRE will assess the financial impact
of proposed changes to the draft development agreement and work to solve cash
flow shortfalls (see Task 3.3).
Overview of Potential Development Agreement
Typically there are 20 to 35 sections included in most Development Agreements.
Some of the more important sections include:
- Description of the Proposed
Development
- Approvals and Development Program
- Development Covenants, Easements and Restrictions
- Developer Obligations
- Insurance, Indemnifications and
Financing
- Requirements of Public Partner(s)
- Operation
Approval Rights for the Town of Chapel
Hill
Using Approval Rights, SPPRE will optimize the Town’s control over the
following:
- Team Members
- Legal Structure of Development
Entity
- Final Public/Private Finance Plan
- Source of Debt and Equity
- Design (Schematic Design (SD) and
design Development (DD))
- Quality of Materials (Outline
Building Specifications)
- Operation of the Building
Task
3.3: Complete Financial Analysis
Throughout the negotiations SPPRE will complete any financial analyses and
develop additional public/private finance plans, if required. If there is a cash flow shortfall, SPPRE will use five
key approaches to solve a cash flow shortfall:
·
Part 1: Leverage government-owned real estate
·
Part 2: Creative public and private sources of
financing
·
Part 3: Creative public/private finance and
credit-enhancement techniques
·
Part 4: Ways to enhance cash flow and reduce
development costs
·
Part 5: Federal, state and local government
development, investment and operational incentives.
AT SOME POINT DURING PART 3, THE COUNCIL MAY ELECT TO END NEGOTIATIONS
AND EITHER SELECT ANOTHER DEVELOPER TO NEGOTIATE WITH OR CLOSE OUT THE CONTRACT
Generally, subject to greater specificity to be provided by
amendment to this Work Statement at the time this phase is begun, SPPRE will
serve as the Town’s representative during the construction of Lots 2 and
5. The primary objective of the Part
Four scope of services is to monitor the developer’s progress on three fronts:
time, quality and budget. In this role,
the primary responsibilities of SPPRE will be to:
·
Review developer contracts with architect and
contractor.
·
Assure the Committee that the developer adheres
to the proposed development budget.
·
Represent the Committee at major project
management meetings.
·
Monitor the Program, Evaluation and Review
Technique (PERT) or Critical Path Method (CPM) prepared by the contractor.
·
Assure the Committee that key building materials
approved by the Committee are used during construction.
·
Monitor developer “draws” on the construction
loan.
·
Periodically monitor the relationships between the
developer, construction lender, permanent lender and equity investors.
·
Review the developer’s various types of
insurance policies for the project.
·
Review cash controls established by
developer.
·
Monitor major inspections/approvals by Town
building officials.
·
Monitor pre-leasing of space.
Preface
SPPRE will commit the
necessary resources to complete the tasks on a timely basis. Achieving the anticipated timeframe will
require the cooperation of the Council Committee, the Town Council, other Town
officials and staff and any other participating governments, including availability
of meetings and availability of data and internal information, etc. throughout
the course of the engagement.
The following is an estimate of the time required to
complete the balance of the pre-development process, the time required for the
developer to obtain financing and to complete construction of a $40 to $50
million development. The dates are included for illustrative purposes only.
A more detailed proposed schedule is attached as Exhibit B.
·
Part 1A: Four Months (November 2003-March 2004)
·
Part 1B: Two Months (March 2004 – April 2004)
·
Part 1C: Two Months (May 2004 – June 2004)
·
Part Two: Nine Months (July 2004 to March 2005)
·
Part Three: Three to Four Months (April 2005 to July
2005)
·
Developer Obtains Financing: (August to November
2005)
·
Completion of Design Drawings: (January 2006 to August
2006)
·
Part Four: Fifteen to Eighteen Months (2006 to
2008)
IV. Fees
Parts 1A, 1B, 1C and 2
The schedule of fees for
each task to be completed by SPPRE and its subcontractors in Parts 1A, 1B, 1C
and Part 2 is attached as Exhibit C. The fee for each task specified in this
Work Statement for Parts 1A, 1B, 1C and Part 2 is fixed; fees for additional
tasks added by amendment to this Work Statement will be calculated based on the
following hourly rates:
·
John Stainback,
Managing Partner: $270 per hour.
·
John Infantino,
Partner: $240 per hour.
·
Will Reed, Finance Analyst: $155 per hour.
In addition to professional fees, the Direct Expenses (e.g., airfare, lodging,
ground transportation, mileage, parking, purchase of materials, if any, etc.)
for SPPRE, HKS Architects and ERA will be billed at cost. The invoice amount for
SPPRE will include Allocated Expenses calculated at nine and one-half percent
(9˝ %) of the professional fee, to cover telephone, facsimile, and overnight
mail expenses, secretarial and accounting support, and other indirect costs.
Part Three: Manage Negotiation with the Developer
Fees for Part Three of the consulting contract is based on the number of hours
required to negotiate the Ground Lease and/or Development Agreement.
For Part Three of the consulting contract, SPPRE’s fees will not exceed $50,000 without prior written
authorization from the Town of
In addition to professional fees, the Direct Expenses (e.g., airfare, lodging,
ground transportation, mileage, parking, purchase of materials, if any, etc.)
will be billed at cost. The invoice
amount will include Allocated Expenses calculated at nine and one-half percent
(9˝ %) of the professional fee, to cover telephone, facsimile, and overnight
mail expenses, secretarial and accounting support, and other indirect costs.
Part Four: Serve as Owner’s Representative During Construction
The fee structure to review
the design and construction drawings and to assure the Town that the selected
developer delivers what was promised in the Development Agreement is one-and
one-quarter (1.25%) of the Total Development Budget required to finance, design
and construct the development of Lots 2 and 5.
Summary of Fees
Following is a summary of fees for SPPRE and
subcontractors to SPPRE for completion of all tasks specified in this Work
Statement. The SPPRE fees include allocated costs calculated at 9.5 percent of
the total professional fees for each part. Direct Expenses are not included.
PART 1
Part 1A
·
Market Demand Analysis Consultant: $35,000 plus
Direct Expenses.
·
SPPRE: $16,250, plus Direct Expenses.
Total – Part 1A: $51,250, plus Direct Expenses
Part 1B
·
Architect: $32,000, plus Direct Expenses.
·
Third-Part Cost-Estimating Firm: $5,000
·
SPPRE: $14,600, plus Direct Expenses.
Total – Part 1B: $51,600, plus Direct Expenses
Part 1C
·
Computer Modeling Firm: $8,000
·
SPPRE: $66,700, plus Direct Expenses.
Total – Part 1C: $74,700, plus Direct Expenses
PART TWO
·
SPPRE: $99,350 plus Direct Expenses.
PART THREE
·
SPPRE: Hourly Rate Basis with a $50,000 cap not
to be exceeded without written permission from the Council Committee, plus
Direct and Allocated Expenses.
PART FOUR
·
SPPRE: 1.25% of the Total Development Budget
required to finance, design and construct the
development of Lots 2. Payments.
[ph1]Check accuracy of acronym translation