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.
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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.
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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
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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.
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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:
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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:
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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.
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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:
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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.
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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.
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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:
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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:
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Preliminary five year enrollment projections
Location of the proposed campus/center(s)
Five year capital construction plan
Prioritization of proposed campuses
Time schedule
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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:
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Site identification
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60 hours
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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.
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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.
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