Gavilan Joint Community College District Governing Board Agenda August 10, 2004 Consent Agenda Item No. Information/Staff Reports No. Discussion Item No. Old Business Agenda Item No. New Business Agenda Item No. Office of the President SUBJECT: Contract Agreement Public Private Ventures, Inc. Resolution: BE IT RESOLVED, Information Only X Action Item Proposal: That the Board of Trustees authorize a professional services contract with Public Private Ventures, Inc. (PPV) to obtain real estate acquisition and development services with the following terms and conditions: 1. Public Private Ventures, Inc. will be the District’s exclusive representative on real estate acquisition and development services during the period August 11, 2004 through August 31, 2007 unless mutual agreement results in a change in the date. 2. PPV will provide the scope of services shown in Attachment A. 3. PPV will be paid fees and reimbursable expenses on a monthly basis consistent with Attachment B. Any real estate commission negotiated between the seller’s broker and PPV will be used to offset the District’s fees paid for monthly services. 4. PPV will be offered an incentive fee based on the difference between actual price paid and the Fair Market Value (FMV) of property and entitlements received using the following schedule: a. 2% on the first $10 million of the difference between the actual price paid and FMV. b. 4% on the second $10 million of the difference between the actual price paid and FMV. c. 6% on any excess FMV over $20 million up to a maximum incentive fee of $1 million. C:/Board/Forms/533574995 3/6/16 sb Background: A Request for Qualifications (RFQ) and Fee Proposal was advertised through newspapers of general circulation. The RFQ was distributed to firms that responded to the advertisement as well as to firms that had previously contacted the District seeking an opportunity to compete for this contract. RFQ were distributed to 12 firms. Three responses were received by the closing date of July 26, 2004. The following firms provided a response to the RFQ and Fee Proposal: MAAS Companies, Inc and Douglas E. Barnhart, Inc. (North Fork, CA) Williams-Kuebelbeck & Associates, Inc. in association with The SWA Group (Sausalito, CA) Public Private Ventures, Inc. in association with Spencer/Hoskins Associates and Allan Peterson Associates (Pasadena, CA) The Board of Trustees Facilities Committee, and ad hoc committee of the Board, reviewed the responses to the RFQ and Fee Proposal. College staff including the Superintendent/President and Vice President of Administrative Services assisted with the review of the proposals. The following criteria were used in recommending a firm to the Board of Trustees for award of a contract: 1. California community college experience. Any planner hired must have a thorough knowledge of the State guidelines applicable to the community college system. The College will need to pursue State funding to the maximum extent possible. 2. Good references from California community colleges 3. The firm should have experience with the same types of projects that will be completed at Gavilan: a. Coyote Valley/Greater Morgan Hill area site development b. Gilroy Campus analysis and land use options c. San Benito County site development 4. Ability to provide the full range of services that will be necessary to complete the project. Upon review of the responses to the RFQ and Fee Proposal and a check of selected references, the respondent considered best suited for receipt of a professional services contract is Public Private Ventures, Inc. The RFQ and Fee Proposal from PPV listed Spencer/Hoskins as a subcontractor. PPV’s proposal indicates that subcontractor fees are subject to a 5% administrative fee assessment. The District can avoid an administrative fee of 5% of billed services by contracting directly with Spencer/Hoskins Associates. This arrangement has been discussed and approved by PPV. A separate contract is therefore being recommended for approval. Budgetary Implications: The cost of the services for PPV will be paid for out of the proceeds from Measure E bond funds. C:/Board/Forms/533574995 3/6/16 sb Follow Up/Outcome: The contract between PPV, Inc. and the District is in draft form. All major conditions of the agreement have been negotiated. The final document will be submitted to the District’s general counsel for a review prior to signature. Copies of the signed agreement with PPV will be provided to members of the Gavilan College Bond Oversight Committee. Recommended By: Dr. Steven M. Kinsella, Superintendent/President Prepared By: ________________________________________ Dr. Steven M. Kinsella, Superintendent/President Agenda Approval: _________________________________________ Dr. Steven M. Kinsella, Superintendent/President C:/Board/Forms/533574995 3/6/16 sb ATTACHMENT A: SCOPE OF SERVICES TO ASSIST GAVILAN JOINT COMMUNITY COLLEGE DISTRICT FOR IDENTIFICATION, EVALUATION AND ACQUISITION OF PROPERTY FOR NEW CAMPUS FACILITIES 4 August, 2004 I. PROJECT DESCRIPTION The Gavilan Joint Community College District (District) seeks to establish a new full service campus in the Coyote Valley area. Public Private Ventures ["PPV"] has been engaged to assist the District with the identification, evaluation and acquisition of land for this purpose (Project). The acquisition of large acreage in rapidly urbanizing areas is typically difficult due to the challenges of infrastructure constraints, environmental habitat preservation and scarcity of large undeveloped parcels. Consequently, the Coyote Valley planning area presents an important opportunity to integrate a college campus into the fabric of a new planned community. The approach and scope of services outlined below describes the process of identifying, evaluating and acquiring a campus property. II. APPROACH This engagement will be undertaken in two phases: Phase 1: Identification and assessment of candidate properties Phase 2: Acquisition services for preferred property. Phase 1: Property Identification And Assessment Phase 1 will begin with the identification of potential sites within the Coyote Valley area. Potential sites will initially be screened to assess possible “fatal flaws”, (Level 1 analysis), in a manner to quickly identify any issues that may be substantial enough to render the site infeasible. Upon completion of the Level 1 analysis, one site will be selected by the District for further analysis, (Level 2 analysis), to establish the basic viability of the property, and to provide the basis for developing an offer to purchase, should the District decide to pursue the acquisition. Phase 1 will be concluded with the issuance of a report summarizing the assessment of the recommended site and course of action. C:/Board/Forms/533574995 3/6/16 sb Phase 2: Property acquisition If the District decides to proceed with the acquisition of a property, PPV will provide services to acquire this property. PPV will serve as the District’s agent to manage the acquisition of the selected property, and will initiate negotiations with property owner(s), and formulate purchase offer(s) and/or option agreement(s). The terms of any such offer(s) and agreement(s) will be subject to the District’s approval. III. SCOPE OF SERVICES PHASE 1: Level 1: Site Identification and Evaluation Property identification The initial step will be to identify potential campus sites within the Coyote Valley planning area northern and southern areas. Between __ and __ properties of 80 to 100 acres will be identified for Level 1 analysis. Level 1 “fatal flaw” analysis PPV will undertake a preliminary evaluation of identified properties in an effort to eliminate sites from consideration due to “fatal flaw” characteristics, and to narrow the evaluation to one preferred property, on which a Level 2 analysis will be performed. A Level 1 analysis will as necessary involve visual inspection, discussions with owners and others familiar with the property, (e.g. planners, engineers, environmental consultants, government officials, etc.), and preliminary review of readily available existing reports. This phase of work is estimated to require approximately 60 days to complete. Level 1 analysis will, at a minimum, address the following factors: Site size and buildable area Site access Environmental characteristics, e.g., endangered species, traffic, hazardous substance conditions Buildability, e.g., basic soil characteristics, wetlands, seismic, archeological, topographical, floodplain conditions Availability of public utilities and services Community compatibility and political considerations Long-term development issues The District will determine which site will be considered for Level 2 analysis. PHASE 1: Level 2: Preliminary Due Diligence PPV will undertake a higher level of analysis to further assess the viability of the selected property for campus use. This site evaluation will seek to identify and describe the relevant parameters of project feasibility, including the following: C:/Board/Forms/533574995 3/6/16 sb Holding capacity for projected core campus functions, working with the District’s master plan architect. Physical site characteristics, e.g., structures, vegetation, topography Political subdivisions and agencies having jurisdiction over the site and use Compliance with applicable requirements imposed by California Education Code Sections 81003 through 84207; and the Board of Governors of the California Community Colleges; Applicable improvement and service districts Community relations and political considerations Zoning, vested rights, and entitlements Rezoning and subdivision procedures Site access issues, e.g., transportation access, utility easements, storm drainage easements, etc. Site encumbrances, e.g., recorded easements, rights-of-way, covenants and restrictions, development agreements, conservation and mitigation encumbrances, financial obligations, development impact fees or assessments, etc. Environmental status, e.g. hazardous material contamination, surface water resources, ground water resources, threatened and endangered species, archeological, paleontologic, and historic resources Topography and topographical features Geologic and geotechnical characteristics Site drainage characteristics Public utilities and services, e.g., water, sewer, storm water, electricity, gas, telecommunications, police, fire and paramedic services, etc. Character of current and future surrounding development Extraordinary construction costs, e.g., site work, utilities Land management issues, e.g., security, maintenance Land value, price, terms and conditions Additional issues that are relevant to the long-term viability of the college campus will be identified and assessed as they become apparent. Level 2 analysis will rely on existing and readily available information, interviews and correspondence with appropriate agencies and knowledgeable individuals. In-depth due diligence will take place at such time as the District proceeds to acquisition. PPV will meet with property owners as necessary to explore their interest in selling, desired terms and conditions, and obtain available site information. A working report will be prepared summarizing the findings of the Level 2 analysis. This report will describe the steps and budget requirements for property control, in-depth due diligence and property acquisition. The information developed in this phase of work will be adequate to meet the site information standards set forth in the State Capital Outlay Handbook, Part E, Acquisitions. C:/Board/Forms/533574995 3/6/16 sb PHASE 2: Property Acquisition Services If District decides to proceed with acquisition of a property, PPV will provide the District with a full range of real estate services, including program management, advisory and acquisition services. PPV services relating to acquisition of two properties will each be undertaken in two stages: Stage 1: Negotiations to purchase agreement(s). Stage 2: After execution of purchase agreement(s) to close of escrow. PHASE 2: Stage 1: Negotiations to Purchase Agreement(s) Program Management and Advisory Services PPV will also serve as the District’s program manager and owner’s representative in managing the day-to-day work of as well as program management/owner representation services to provide support to the District staff in the day-to-day coordination of the acquisition program. With the District, prepare a program management system and prepare progress reports and participate in management meetings, as appropriate Prepare and update master program schedule Prepare and maintain program budgets Assist the District with entitlement, environmental, site or site-related issues needing resolution. Advise owner and assist in preparing contracts and coordinate the work of related third party consultants Manage and coordinate program team activities, including legal, engineering, environmental and valuation services performed by third parties Strategic planning and support Informal review of the properties with the Chancellor’s Office and CPEC Managing the District’s due diligence efforts for each property Financial planning related to the acquisition program Assist the District in formulating and implementing its community outreach program related to property acquisition Assist the District participation in the Coyote Valley planning process to achieve a plan most favorable plan for a campus Continue to seek out and respond to new opportunities as and when they arise Acquisition Services PPV will represent the District as its exclusive agent for purposes of acquiring the properties as directed by the District. PPV will seek to negotiate and document purchase offers and option agreements to acquire the designated parcels. These negotiations will be closely coordinated with the District’s management and legal counsel. The terms of such offers and agreements will be subject to the District’s prior approval. C:/Board/Forms/533574995 3/6/16 sb During the course of Phase 2, Stage 1, PPV may negotiate non-binding memoranda of understanding or letters of intent if appropriate, all subject to District review and approval. Phase 2, Stage 1 activities will be completed upon the mutual agreement by the District and seller, and execution of the appropriate option/purchase and sale agreement(s). These agreements are likely to be contingent on a number of conditions, including but not limited to the following: Completion of due diligence Formal clearance by the Chancellor’s Office and CPEC regarding site acquisition of the subject properties Compliance with applicable requirements imposed by California Education Code Sections 81003 through 84207; and the Board of Governors of the California Community Colleges; Approval of bond measure to provide funds for acquisition PHASE 2: Stage 2: Development Management to Close of Escrow Once the District has entered into a contract to purchase a specific property, PPV will undertake a range of services to assist in resolving and removing the conditions related to the close of escrow and completion of the purchase transaction(s). These will include, but are not limited to the following: Performance of Due Diligence PPV will undertake a higher level of analysis as necessary to comply with the due diligence requirements mandated by state regulation. The fundamental purpose of this due diligence effort would be focused on evaluating the suitability and feasibility of the property for community college use. Chancellor’s Office and CPEC Approval Process PPV, working with the District staff and consultants, will assist in preparation of the formal Letter of Intent to acquire property for new campus’ and/or centers consistent with Chancellor’s Office guidelines as set forth in Part E of the Facilities Planning Manual, Chapter 10, Site Acquisition for New College and Center Development. This application sets forth the rationale for the proposed acquisition and includes at a minimum the following information: Preliminary five year enrollment projections Location of the proposed campus/center(s) Five year capital construction plan Prioritization of proposed campuses Time schedule C:/Board/Forms/533574995 3/6/16 sb Ten year capital outlay budget Trustee resolution Area maps PPV may serve as liaison on behalf of the District to insure that the application(s) are processed expeditiously, and that Chancellor Office and CPEC issues and concerns are addressed in a timely manner. Program Management and Advisory Services As necessary to close escrow, PPV will continue program management activities related to the acquisition of property for a community college campus. IV. PROJECT TEAM It is essential that the team include professional resources to collect, analyze and interpret critical technical information, e.g., engineering, environmental, legal, and make informed judgments as part of the Phase 2 property acquisition efforts. PPV will identify qualified consultants and assist in preparing proposals and negotiating agreements. These consultants would be retained directly by the District, and subject to District discretion and approval. PPV will manage the day-to-day performance of their work, and provide the District with reports on their progress. It will be important to work with the District’s master plan architects to assist in evaluating the site in relation to program, site and master planning issues. V. PROGRAM COORDINATION The process of identifying and evaluating properties of this size could be a challenging and open-ended assignment. PPV will work closely with the District administration while conducting this work to establish an effective communication and reporting protocol to insure timely exchange of information and day-to-day decision-making. PPV recommends that an advisory group, comprised of key members of the District administration, and board representation be formed to direct this work process. VI. BUDGET PPV will perform the Phase 1 services as described above on an hourly rate for services performed basis in accordance with the fee schedule and expense reimbursement structure set forth in "Attachment B" below. This budget assumes the following scoping parameters: The approximate allocation of time and fees is as follows: Site identification C:/Board/Forms/533574995 3/6/16 sb 60 hours Level 1 analysis (three sites) Level 2 analysis (1 site) 100 hours 110 hours The payment for Phase 2 acquisition services as described herein will be on an hourly rate for services performed basis in accordance with the fee schedule and expense reimbursement structure set forth in "Attachment B" below. Additionally, PPV may be entitled to commissions and incentive fees as provided in the attached Agreement for Real Estate Services, Sections 4 and 5. Reimbursable costs are estimated at $5,000 for Phase 1 and $5,000 for Phase 2. PPV will obtain approval from Client for reimbursable costs in excess of these approved amounts. Separate contracts will be executed between the District and any additional projectrelated professional service companies the District decides to use for Project. A scope of services total time estimate for Phase 2 acquisition services as described herein shall be developed by PPV and provided to District no later than 15 days after the conclusion of Phase 1. C:/Board/Forms/533574995 3/6/16 sb ATTACHMENT B Public Private Ventures Fee Schedule 2004 Services will be billed at the following rates: Principals $175/hr. Senior Associate $125/hr. Associate $80 - 110/hr. Technician/Clerical $40 - 60/hr. Reimbursable expenses shall include but not be limited to the following: Telephone conference calls, facsimile transmissions, reproduction costs, messenger and delivery services, and travel expenditures (including air travel, rental automobiles, taxis, hotels, meals, and other customary travel expenses). Project-related reimbursables and subcontractors will be invoiced directly with no markup. Reimbursables in excess of the $5,000 estimate for Phase 1 and $5,000 for Phase 2 will need to be approved by District. C:/Board/Forms/533574995 3/6/16 sb