Millwork District Energy PlanT®: The Honorable Mayor and City Council Members
FR®IVI: Michael C. Van Milligan, City Manager
SlJ JECT: Approval to Hire a Consultant for a District Energy Analsyis for the
Dubuque Historic Millwork
®~,TE: April 17, 2009
Economic Development Director Dave Heiar is recommending selection of 1=VB Energy,
Inc. as the consultant to provide a district energy analysis for the redevelopment of the
Historic Millwork District. The purposed price with reimbursables is $64,965, which is
within the City's budget of $65,000.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
~ - ---~ .
Michael C. Van Milligan
MCV'M/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
INTRQDl1CTl®hl
The purpose of this memorandum is to request City Council approval of hiring a
consultant to provide a district Energy Analysis for the redevelopment of the Dubuque
Historic Millwork District.
Bi4Cl°CGR®l1N®
As an outgrowth of the Envision 2010 process, members of the committee saw the
need to define the Warehouse District through a master plan process. Both the public
and private partners have sensed the need to define the long range plan for the district,
to anticipate and guide future investment and to ensure quality development.
The committee, property owners and City staff also prepared the Warehouse ®istrict
Revitalization Strategy that was approved by the Dubuque City Council on August 6,
2007. The first goal of that strategy was to develop a Master Plan for the Warehouse
District.
The City Council authorized a contract with the Cunningham Group of Minneapolis to
prepare a Master Plan for Warehouse District. The Cuningham Group work began with
a two day (June 25-27) visit to the community where several focus groups were
conducted to quickly learn about the Historic Millwork District and to get community
input. The consultants met with the business community, city staff, the City Council,
property owners, the Envision 2010 committee, Dubuque Main Street, a general public
meeting inviting the entire community and other stakeholders for their input.
Cuningham then gave a presentation to the steering committee to outline what they had
learned from the visit and gave a rough design of what they considered to be the next
steps to developing the plan.
City staff then provided direction over the next few months to prepare for the second
input trip held October 7-8, 2008. The same focus groups met again with the
consultants to be exposed to the work to date and a preliminary development summary
for the district.
A draft of the Master Plan was delivered to City Staff and the Steering committee for
their review at the end of December 2008. The committee met and gave their
comments on the plan to the consultants and those comments have been incorporated
into the plan.
The City Council held a worksession on February 2, 2009, to discuss the plan. Andrew
Dresdner of the Cuningham Group, and Chris Brewer of ERA gave a presentation of the
key components of the plan. Comments were received and changes were made to the
document reflecting those comments. The Council adopted the Master Plan on
February 16, 2009.
One of the recommendations of the Historic Millwork Master Plan was to analyze the
district for the potential development of a district wide energy system, defined by 12t"
Street on the north to 5t" Street on the south, White Street on the west and the Hwy 61-
151 corridor on the east.
On March 16, 2009 the City Council authorized an RFP seeking a consultant or two
consultants that have experience in several disciplines. The study is broken into two
major elements as follows:
A. Technical Assessment
® Demand Forecast
® Business as Usual Analysis
® Potential Heat Source
® Energy Distribution System
® Metering Technology
B. Business and Economic Analysis
® Ownership and Operating Model
® Project Financing
® Pricing Structure, Developer Participation and Flexibility Mechanisms
® Financial Projections
Lega! and Regu!ato ,~ Issues
® Risk Management Plan
® Work Plan for Phase I of Energy System
® Assessment of Sustainable Benefits
A committee was established to review the RFP's, and interview the consultants. The
committee consisted of the following members;
Aaron DeJong, Economic Development
David Heiar, Economic Development
Cindy Steinhauser, City Manager's Office
® Laura Carstens, Planning Services
® Paul Schultz, Resource Management Coordinator
® Steve Brown, Engineering, Project Manager
® Sheila Samuelson, Sustainability Coordinator
® Jill Connors, Property Owner Representative
®ISCtJSSI®IV
The city received four proposals from the following consultants:
Sebesta Blomberg/Alliant, Cedar Rapids
Hammel, Green, and Abrahamson, Inc. (HGA), Minneapolis
FVB Energy, Inc./Kandiyohi Development Partners (KDP), Minneapolis
Durrant Group, Inc., Dubuque
All four firms were interviewed. Following the interviews, review of the proposed costs,
and reference checks, the committee unanimously selected FVB Energy, Inc. and KDP
as the firms to recommend to the City Council. Two of the firms, including this proposal,
established fees just below the $65,000 allowance in the City's budget for this service.
(see attached sheet detailing costs)
FVB Energy Inc. is an engineering firm specializing in district energy and combined heat
and power (CHP) systems, with offices in Minneapolis (USA), Toronto and Edmonton
(Canada), Manama (Bahrain) and Stockholm, Vasteras and other cities in Sweden. This
firm has the breadth and depths of experience needed to help the City of Dubuque
develop a prudent and sustainable energy system for the Historic Millwork District.
FVB Energy, Inc. has a leading reputation in district energy and is based on years of
specialized experience in district energy business analysis, engineering, management,
marketing and energy and environmental policy. The firm brings the benefits of
European experience and expertise in district energy systems, particularly hot water
district heating and CHP, together with North American business, financial and
marketing expertise to assist clients in energy system planning, development and
implementation.
Extensive experience in district energy will enable the firm to provide ahigh-quality and
timely analyses that will help the City of Dubuque develop a prudent and sustainable
energy system for the Historic Millwork District. As experienced professionals in
sustainable development, the firm believes in the potential of district energy as a key
component for driving high quality redevelopment strategies. Property structured and
implemented, district energy can leverage further private and public investment to
create an urban showcase that is environmentally advanced while respecting the
historic character of the area.
FVB Energy is coordinating this proposal with Kandiyohi Development Partners (KDP),
who will focus on the Business and Economic Analysis component of the Initial
Analysis. The coordinated team can deliver ahigh-quality, well-integrated and timely
Initial Analysis. Kandiyohi Development Partners, LLC and FVB have a history of
working together on the technical aspects and development of the financial and
business case for district energy systems and combined heat and power facilities. The
two firms have experience that is directly relevant to the goals of this project in Dubuque
and have offices three blocks apart from each other in downtown Minneapolis. This
team has successfully submitted grant and loan requests for federal and state funding
sources and assembled project financing.
KDP is a development and consulting firm that focuses on renewable energy and
sustainable development. KDP's principals have more than 50 years of combined
experience in sustainable community development and the firm's strength is its ability to
align the requirements of private capital and the market place with the interests and
goals of policy makers and the community. KDP has been a developer of smaller-scale
biomass energy facilities that include a district energy component. KDP has also been
involved in more than a dozen development projects in which green building and land
use strategies, generally certification in Leadership in Energy and Environmental Design
(LEER), have been primary goals of the project.
KDP is an excellent choice as the business development and financial consultant for the
project because of their diverse background and experience. KDP focuses on creative,
entrepreneurial solutions to energy and environmental challenges. From ideas and
answers that can be applied to an individual project or a single community to issues that
face the entire planet, they bring innovation, a global network of best practices and a
deep level of understanding about sustainability to our project.
KDP has experience with creating balanced solutions that meet the needs of private
capital investments as well as the goals of policy makers and local communities. The
firm brings creativity as well as practicality to the project team and can enhance the
quality, marketability and success of the Millwork District Energy Project.
FVB Energy and KDP understand the City's interest in responding quickly to the
opportunities presented by IBM's decision to establish a new service center in
downtown Dubuque with 1,300 employees. Both firms also recognizes the need to
prepare some critical information for the City to consider in submitting a grant to the
Iowa Power Fund and other funding sources that may be available very shortly through
several federal and state initiatives.
A quote from the cover letter submitted by FVB Energy summarizes why this firm's
proposal stood head and shoulders above the others.
"A great deal of high-quality planning and thinking has already been
done regarding the future of the Millwork District and we intend to use
these goals and innovative plans as a foundation for our analysis of
district energy. As a community, Dubuque has clearly embraced the
principles of sustainability and our team's experience will respond to
those principles and is, in fact, one of the greatest strengths of our
proposal."
RECMMEN®~-°TIN
®n behalf of the committee, we recommend approval to hire FVB Energy, Inc. as the
consultants to analyze the Historic Millwork district energy opportunities.
e4C1°I®IV STEP
The City Council is requested to approve a contract with FVB Energy, Inc. and authorize
the Mayor to sign the contract
F:\USERS\DHeiar\Warehouse District\Approval of RFP for District Energy Analysis memo2.docx
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