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Home My WebLink AboutRDA OLD TOWN PROJECT 05-01-95AGEI, DA RDA NO. 3 _,ATE: May 1, 1995 Inter-Com TO: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJECT: SELECTION OF DEVELOPERS FOR OLD TOWN GATEWAY PROJECT RECOMMENDATION Staff recommends the Redevelopment Agency invite Lowe Development Company, W/H Tustin Limited Partnership and Carlson Development Services to prepare and submit a proposal for the development of the Old Town Gateway Project. FISCAL IMPACT Inviting proposals from these developers will not have any fiscal impact on the Agency. The Agency may ultimately incur costs for the redevelopment of the property. Any such costs would be identified after selection of a developer and the negotiation of a Disposition and Development Agreement, subject to the final approval of the Agency. BACKGROUND AND DISCUSSION At its meeting of February 6, 1995, the Redevelopment Agency authorized the staff to issue a Request for Qualifications (RFQ) to solicit a developer for the Old Town Gateway Project, incorporating the commercial property on the south and west side of E1 Camino Real, between Sixth Street and Newport Avenue. This is one of the most important projects in Old Town and had been delayed because of the impact of the recession on the commercial development market in Orange County. Staff issued copies of the RFQ to over 300 potential developers and users. Five Statements of Qualifications were received. .These statements included background information on the potential developers, as well as their experience with similar projects, their financial capability, and their relationships with ultimate users, lenders and other government agencies in similar projects. The proposals to be requested of the selected developers will be expensive for them to prepare. The proposals will be required to include full site plans, elevations and floor plans, identification of major users, preparation of development and operating proformas William A. Huston Old Town Gateway Project May 1, 1995 Page 2 as well as a detailed discussion of the anticipated assistance from the Agency, if any. By selecting only three firms, each developer is assured a strong possibility of selection so that it is worthwhile for them to expend the time and resources needed for Phase 2. A staff committee was created to review the submitted Statements of Qualifications. In addition, Finance Department staff 'reviewed financial statements to identify any potential problems in the financial records of each firm. No issues were identified by the Finance Department or 'in a review of the references of the firms. Based upon this review, staff are recommending that the Agency invite the following three firms to submit a complete proposal as part of Phase 2 of the developer selection process: · W/H Tustin Limited partnership Carlson Development Services, Development Company representing Vestar · Lowe Development Corporation Additional information on each of these firms is attached as Attachment 1. Upon issuance of the invitations to submit proposals, the selected developers would be expected to have until August 18, 1995 to prepare and submit their proposals. Upon completion of review of these proposals, staff would anticipate recommending to the Agency an Exclusive Right to Negotiate with a single developer at an Agency meeting sometime in late September or early October. Negotiations will then commence on a Disposition and Development Agreement to be presented to the Agency for approval in early 1996. Attachment 2 is the Selection Timetable as presented.in the Request for Qualifications Proposals. Attachment 3 is also from the Request for Qualifications/Proposals and details the submission requirements for the proposals to be prepared by the selected developers. Christine 2] S~gletS'n Assistant Cit~anager Copies of all RFQ responses are av,~n_klable in the Community Development Department. /? gram ManagerRlR~ ~deve n~~ opme ATTACHMENT 1 RECOMMENDED FIRMS W/H TUSTIN LIMITED PARTNERSHIP Legal Entity: A California Limited Partnership composed of a Watt General Partner, a number of limited partners, members of the Ray Watt family and key employees of Watt Family Properties, Inc. Similar Public/ Private Partnerships: Anaheim Center, Anaheim Corner of Lincoln and Anaheim Blvd. Brea Gateway, Brea Corner of Brea Blvd and Imperial Highway North Lake Square Pasadena Financial Capability: Strong Government and Financial References: Ail positive Comment: Watt Family properties and its subsidiaries are leading.developers and managers of retail shopping centers in the Los Angeles/Orange County market. CARLSON DEVELOPMENT SERVICES REPRESENTING VESTAR DEVELOPMENT COMPANY Legal Entity: A General partnership between Vestar Development Company and Ameritech Pension Fund. Similar Public/ Private Partnerships: Redondo Beach Center, Redondo Beach SR 91 Freeway and Inglewood Avenue Cerritos Town Center, Cerritos SR 91 Freeway and Bloomfield Paramount Center, Paramount Rosecrans Ave and Lakewood Boulevard Financial Capability: Strong; Wholly owned subsidiary of Ameritech (Illinois Bell); Pension fund for Ameritech is the financing arm for all of Vestar's projects. Government and Financial References: Ail positive Limitation on Proposal: Carlson Development/Vestar Development included in their Statement the inclusion of property outside of the proposed site. The Staff does not endorse this expansion and will limit the proposal to the specific site identified by the Agency. At the same time, Staff does not believe a strong development candidate should be excluded because of a desire to do more than the Agency requested. Comment: In 1994, named one of the top 50 "Shopping Center Development Leaders" by Monitor Magazine; ranked 37th in 1994 of Top 100 Open Air Shopping Centers by Shopping World Magazine. LOW]E DEVELOPMENT CORPOP~ATION Legal Entity: California General partnership between Lowe Development and a pension fund or institutional financing source. Lowe Development will be the managing partner. Similar Public/ Private Partnerships: Brea Place, Brea Birch Street and State College Boulevard Desert Crossing, Palm Desert Fred Waring Avenue and Highway 111 The Quad, Whittier Painter Avenue and Whittier Boulevard Financial Capability: Strong Goverrnnent and Financial References: Ail positive Comment: Lowe has developed over $750,000,000 in mixed use retail, office, residential, industrial and resort properties. Lowe also manages over 10,000,000 square feet of "work out" properties for lending institutions. It also manages approximately $1 Billion in US and off-shore pension funds. It's public/private partnership development in Brea the national 1990 California Association for Local Economic Development (CALED) Award of Merit for public/private partnerships. It also received national recognition by the Privatization Council for its innovative combination of public/private resources used for a public purpose. rzimmer\sixthst \ccinvite · mem ATTACHMENT 2 TUSTIN COMMUNITY REDEVELOPMENT AGENCY · . SELECTION TIMETABLE The Agency reserves the right to' extend or otherwise modify this timetable. February 13, 1995 10:30 AM February 27, 1995 5:00 PM March 23, 1995 March 23 - May 1, 1995 · May 1, 1995 May 4, 1995 May 16, 1995 August 18, 1995 August 18, 1995 August 18 - September 18, 1995 September 18, 1995 September 18, - December 18, 1995 January 2, 1996 PHASE 1 QUALI~CATIONS PHASE Issuance of Solicitation Pre,submittal meeting on RFQ (Attendance at this meeting is strongly recommended, but not mandatory) Submittal of Statements of Qualifications Agency review of Statements of Qualifications Selection of Proposers PHASE 2 PROPOSAL PHASE Invitations for Proposals Issued Presubmittal.Meeting on Proposals (Attendance at this meeting is mandatory) Submittal of Proposals Completion of Draft Exclusive Right to Negotiate Staff Review of Proposals Agency Selection of Developer and Approval of Exclusive Right to Negotiate Negotiation of Disposition and Development Agreement .. Agency Approval of Disposition and Development Agreement Page 15 ATTACHMENT 3 TUSTIN COMMUNI~, Y REDEVELOPMENT AGENCY SUBMISSION REQUIREMENTS PHASE 2: REQUEST FOR PROPOSALS Following a written invitation by the Agency, selected developers/users will be given three months to prepare and submit a completed development proposal. A mandatory pre-submittal meeting will be held at 2:00 PM on Thursday, May 16, t995. The meeting will be held in the Clifton C. Miller Community Center, adjacent to the Tustin City Hall, 300 Centennial Way, Tustin CA. Any questions concerning the proposal requirements should be directed to Mr. Richard Zimmer, Redevelopment Program Manager. His telephone number is (714) 573-3121. Each developer invited to submit a proptosal shall submit ten copies of the following: . . . ISentification of the complete development team, including each members role and qualifications. A complete narrative description of the design concept and building program. Preliminary site plans, circulation plans elevations and floor plans. A statement of development costs including the following: a. Land acquisition costs bo A breakdown of hard costs for building construction, on-site improvements, off-site improvements, tenant improvements (if any) and other similar costs. A breakdown of soft costs including professional fees, permit fees, insurance, legal fees, overhead, project management and similar costs. d. A breakdown of financing costs . including pointL fees, construction loan rates, terms and drawdown schedule, and the permanent loan rates, fees, terms and schedule. e. Identification of sources of money for construction and permanent loans, including the amount of equity and the amount of debt to be placed on the property. If the development is to be phased, a development proforma for each phase shall be provided as well as a combined development proforma for the total project. In the format to be provided at the Pre- Proposal Conference, an operating pro- forma for the first five years of the project, and the tenth year, identifying the values and assumptions for: b. Lease rates, both gross and triple net, where applicable. Other 'l~otential income, such as common area maintenance assessments, common marketing assessments, etc. Page 18 TUST1N COMMUNITY REDEVELOPMENT AGENCY Co d. e. Estimated vacancy factor. Estimated operating expenses, including common area maintenance costs, marketing costs, leasing commissions, utility costs (if applicable), property taxes (if applicable), as well as any reserve funds to be established. Debt service Proposed distribution, if any, of net income among the partners and the developer. . . Letters of preliminary interest by financial institutions for providing construction and/or permanent financing. Letters of preliminary interest by primary, anchor tenants. If City and/or Agency assistance is to be requested, an estim~)te of the nature and level of such assistance. If assistance is to be requested, the proposal will include justification 'for the request and an explanation of how the City and/or Agency shall realize a return for its assistance. The Agency will completely review and analyze all proposals and may request that developers/users modify, clarify or supplement their proposals with additional information. Interviews with those submitting the proposals is expected. ~ The Agency, after receiving advice and information from whatever sources it deems advantageous, expects to select a single developer with whom to negotiate. The selection will be made at the sole discretion of the Agency based on the criteria outlined in this solicitation or upon any other criteria the Agency deems important and wishes to consider. The Agency is under no obligation to select one of the proposals and reserves the right to reject any or all proposals at its sole discretion and with no recourse, financial or otherwise, to those submitting proposals. Page 19