AGENDA #10

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            W. Calvin Horton, Town Manager

SUBJECT:       Downtown Economic Development Initiative: Consideration of Request for Proposals and Contract Authorization for Consulting Services

DATE:             March 7, 2005

Attached is a Request for Proposals document for the Council’s consideration, seeking proposals for development at Town Parking Lot Number 5 and the Wallace Parking Deck (please see Attachment 1).  Resolution A would authorize issuance of the Request for Proposals.

Resolution B would authorize the Town’s consultant, Stainback Public/Private Real Estate, to proceed with steps to complete the Request for Proposals developer selection process as outlined in the Town’s contract with the consultant.

BACKGROUND

Since November 2003, the Council and the Council Committee on Lots 2 and 5 have been working on a process to potentially develop the sites.  The process has included the development of a market demand study, preliminary conceptual master plans and a preliminary public-private finance plan.

On November 8, 2004, the Council authorized the Town’s consultant, Stainback Public/Private Real Estate, to draft the Request for Qualifications and an initial draft Request for Proposals.  The Request for Qualifications was distributed the week of December 13 to more than 300 firms from the area and across the country.

By the deadline of January 31, 2005, six firms submitted statements of qualifications in response to the Request for Qualifications.  A seventh firm was disqualified because an insufficient number of copies was provided, as specified in submittal requirements described in the Request for Qualifications.

On February 23, 2005, the Council Committee on Lots 2 and 5 discussed the consultant’s analysis of the Request for Qualifications responses.  The Committee recommended issuing a Request for Proposals to five developers.

On February 28, 2005, the Council approved the Committee’s recommendations on the developers selected to receive a Request for Proposals, and on allowing the developers to change members of their design teams. The Committee decided that developers should be allowed to change the architect, urban designer, and Leadership in Energy and Environmental Design professional listed in the Statements of Qualifications to address concerns raised by the Committee or in the consultant evaluations.

PROJECT OVERVIEW

Town Parking Lot #5, at West Franklin, Church and West Rosemary Streets, and the Wallace Deck and adjacent property at Henderson and East Rosemary Streets, are included in a Request for Qualifications/Request for Proposals developer selection process.  The Town Council has the option to award the proposed second phase – development of Town Parking Lot #2 and the RBC-Centura property at Rosemary and Columbia Streets – to the selected developer.

The Request seeks proposals to develop Phase 1 of the project – development of Parking Lot #5 and the Wallace Parking Deck sites.  While the project is organized into two phases, the Request for Proposals states that the Council is willing to consider award of Phase Two to the developer selected for Phase One.

Phase 1 includes the development of three to four levels of housing atop the Wallace Parking Deck, the extension of the deck to Henderson Street, and construction of retail and housing above the expanded deck.  The proposed Parking Lot #5 project includes a mix of street-level retail space with housing above and a substantial amount of public space. The development would be built atop an underground parking deck which would contain public and private parking spaces.

The preliminary concept plan for Phase 2 includes the construction of housing above street-level retail on Town Parking Lot #2.  A bus transfer center would be built below the Lot #2 development, accessible from West Rosemary Street.  The transfer center concept is dependent on the availability of the RBC Centura site.  The plan calls for the Town to build a Town parking garage at the RBC site, with the bank moving to a new building on Town Parking Lot 5. If negotiations between the Phase 1 developer and the bank are not successful, the space under the Lot 2 development would be devoted to parking and no garage would be built at the RBC site.

Request for Proposals

The attached draft Request for Proposals (Attachment 1) was developed by Stainback Public/Private Real Estate with input from the Council Committee on Lots 2 and 5.

The Council’s action on February 28 authorized proceeding with the issuance of a Request for Proposals, but did not include approval of a specific Request for Proposals document.  The attached draft Request for Proposals, if approved by the Council tonight, would be issued to the selected developers, following any changes requested by the Council and any minor corrections as needed.

The purpose of issuing the Request for Proposals is to receive detailed technical proposals for financing and designing the development of the Phase 1 projects.  The Request for Proposals describes the Council’s financial and design objectives for the project, describes evaluation criteria and submittal requirements that the developers must meet.

The following developers will receive the Request for Proposals, as approved by the Council on February 28:

· East-West Partners Management Company, Inc. of Chapel Hill and Stonebridge Associates of Bethesda, MD

· Grubb Properties of Charlotte, NC and Leyland Alliance, LLC of Tuxedo, NY

· Opus South Corporation of Alpharetta, GA

· The Pizzuti Companies of Columbus, OH

· Ram Development Company of Palm Beach Gardens, FL

Overview of Request for Proposals

Design Objectives

Section 2 of the Request for Proposals (pages 3 to 4) describes general design principles for the sites, including the following language:

• Ground-level uses should be devoted, as much as possible, to retail and restaurant establishments.
• Public plazas should be designed to accommodate regular daily use for passage, sitting, talking in small groups, and dining, while also accommodating regular periodic events such as street fairs, performances, and meetings.
• Lighting for public areas should provide, in accordance with the Town’s Streetscape Plan, for nighttime visibility and security, while minimizing spillover lighting into adjacent residential areas.
• Public art should be integrated into the overall project design, for both buildings and plazas.
• All public spaces must be accessible to persons with physical disabilities.
• The Council is a strong advocate of high performance, sustainable buildings, often referred to as “green buildings.”
• Plans should seek to achieve a Leadership in Energy and Environmental Design "Silver" rating certified by the U.S. Green Building Council.

The Request states that the Council will require that the selected developer’s proposal be subject to the Town’s development review process, including issuance of a Special Use Permit. It also stresses that the Council will be involved throughout the design process, including in the following stages:

· Review of design proposals submitted in response to the Request for Proposals.

· Council Committee interview sessions with development teams on May 23 and 24, 2005.

· Development Agreement negotiations, should the development team revise the urban design and architectural design during this 60- to 90-day period.

· The schematic design phase.

· The design development phase.

· Early stages of the construction documents stage.

Financial Objectives

Section 3 of the Request for Proposals (pages 5 to 10) requires developers to submit a finance plan that addresses the following objectives:

• Optimize private investment
• Minimize Town investment
• Eliminate Town-issued debt not supported 100% by the proposed projects
• Eliminate or minimize the need for Tax-Increment Finance (TIF) related financing
• Reduce Town market, finance and construction risk
• Accelerate the development schedule

Submittal Requirements

The Request requires that one original proposal and 25 copies be submitted to the Planning Department by noon Monday, May 2, 2005 (see Section 4, pages 11 to 18). Developers must provide the files on CD-ROM, including illustrations.

Developer responses, at a minimum, must contain information organized in the following eight sections:

• Final Development Entity and Team
• Building Program and Preliminary Design
• Financial Analysis
• Proposed Public/Private Finance Plan
• Preliminary Approval Rights for the Town
• Preliminary Financial and Development Safeguards for the Town
• Preliminary Development and Construction Schedule
• Required Developer Statements and Forms

Evaluation Criteria

Section 5 (pages 19 to 20) lists the following as criteria the Council will use to evaluate proposals.

• The Ability, Experience and Past Performance of the Developer and Architect
• Financial Capacity of the Developer
• Development and Design Concept
• Financial Proposal
• Approval Rights and Safeguards for the Town

NEXT STEPS

Development teams have until noon May 2, 2005, to submit detailed technical proposals to the Town. Stainback Public/Private Real Estate then will evaluate the responses and submit a report to the Council by May 23. Developer interviews are scheduled to take place in the Council Chamber on May 23,,and May 24, 2005.

Council selection of a developer and up to two potential alternate development teams are scheduled to take place in June, followed by developer negotiations this summer and Council consideration of a development agreement in October 2005. If negotiations are unsuccessful with the selected developer, the Council would have the option to negotiate with one of the alternate development teams.

DEVELOPER INTERVIEWS

We recommend that the interviews scheduled for May 23 and 24 be structured in three parts: opening statements, presentations of proposals, and closing statements. Council questions would be scheduled during the presentation period.  Development teams would draw lots for each part to determine at random the order of presentations. If four or five firms submit proposals, the interviews would need to take place over two days.  If three or fewer firms respond, only one day would be needed.

CONTRACT AUTHORIZATION

On December 6, 2004, the Council authorized completion of tasks in the contract with Stainback Public/Private Real Estate through the completion of the Request for Proposals document.  The attached Resolution B would authorize completion of the developer solicitation and selection phase as described in the consultant contract scope of work, including evaluation of developer proposals and recommendation on the ranking of developers.

RECOMMENDATION

That the Council approve Resolution A authorizing issuance of the attached Request for Proposals to the five development teams selected by the Council on February 28, 2005, and Resolution B authorizing the Town’s consultant, Stainback Public/Private Real Estate, to complete the Request for Proposals developer selection process (Tasks 2.16 to 2.23 in Part 2 of the consultant contract).

ATTACHMENT

1. Draft Request for Proposals (begin new page 1).

RESOLUTION A

A RESOLUTION APPROVING ISSUANCE OF A REQUEST FOR PROPOSALS TO DEVELOP TOWN PARKING LOT 5 AND WALLACE PARKING DECK SITES (2005-03-07/R-9a)

WHEREAS, the Comprehensive Plan and Downtown Small Area Plan identify key downtown redevelopment sites, including Town Parking Lots 2 and 5; and

WHEREAS, the Town Council has established principles and priorities for development of Town Parking Lots 2 and 5; and

WHEREAS, since November 2003, the Council and the Council Committee on Lots 2 and 5 have been working on a process to develop key Town-owned downtown sites including Town Parking Lots Number 2 and 5 and the Wallace Parking Deck; and

WHEREAS, on December 6, 2004, the Council approved issuance of the developer Request for Qualifications, which the Town’s consultant subsequently distributed to more than 300 firms from the area and across the country; and

WHEREAS, the Town accepted statements of qualifications from six firms that responded to the Request for Qualifications by the January 31, 2005 deadline; and

WHEREAS, on February 23, 2005, the Council Committee on Lots 2 and 5 discussed the consultant’s evaluation of the developers’ statements of qualifications and recommended inviting five firms to respond to a Request for Proposals; and

WHEREAS, on February 28, 2005, the Council authorized issuance of a Request for Proposals to the five developers recommended by the Committee;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes issuance of the attached Request for Proposals to the five firms selected by the Council on February 28, 2005.

BE IT FURTHER RESOLVED that the Council authorizes the Town Manager to revise the attached Request for Proposals as needed to make minor corrections in style and format and to reflect Council discussion if needed prior to issuance of the document to developers.

This the 7^th day of March, 2005.

RESOLUTION B

A RESOLUTION AUTHORIZING CONSULTANT TO COMPLETE REQUEST FOR PROPOSALS PHASE FOR THE Downtown Economic development initiative (2005-03-07/R-9b)

WHEREAS, on December 6, 2004, the Council authorized consultant Stainback Public/Private Real Estate, Inc. to commence work on the Request for Qualifications solicitation process and complete the draft Request for Proposals and evaluation criteria for the Council’s consideration; and

WHEREAS, on February 28, 2005, the Council authorized issuance of a Request for Proposals to five development teams which responded to the Request for Qualifications; and

WHEREAS, on March 7, 2005, the Council is considering issuing the attached Request for Proposals to the selected developers;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to complete Phase 2 of the Town’s contract with Stainback Public/Private Real Estate, the Developer Solicitation and Selection Process, based substantially on the terms in the Contract for Consultant Services authorized by the Council on October 27, 2003, and subsequently amended by the Council.

This the 7^th day of March, 2005.