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Garage Redevelopment RFP October 28, 2005 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: RFP for Former City Garage Economic Development Director David Heiar recommends City Council approval to distribute a Request for Proposals for redevelopment of the former City Operations and Maintenance Garage offices located at 925 Kerper Boulevard. I concur with the recommendation and respectfully request Mayor and City Council approval. ____________________________________ Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director MEMORANDUM November 4, 2005 TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Director SUBJECT: RFP for Former City Garage Introduction Attached is an RFP for redevelopment of the former Operations and Maintenance Garage and offices located at 925 Kerper Blvd. Background Now that the Public Works department has relocated to their new facility at 925 Kerper Court, it is in the City’s interest to prevent the site from sitting idle. The site is approximately 5.65 acres with a 41,432 square foot building. As we review potential lease options our goals are to: a. To create an attractive environment by improving the physical appearance of the building and the site. b. To achieve the restoration and occupancy of the building with appropriate tenants as soon as possible. A recent appraisal of the property (May 2005) indicates that the market value of the property is $1,265,000. Based on this value, the RFP and proposed annual lease price of $158,000 (12.5% of appraised value) triple net. The site does have underground contamination and is part of a CERCLA (Superfund) site. Approximately $28 million of remediation has taken place at this Property and surrounding properties under the supervision of the United States Environmental Protection Agency. The City plans to maintain ownership to insure control of any development activities on the site which might impose liability on the City of Dubuque. At this time, there are continuing environmental investigations and remediation measures underway on the site at the expense of the previous owner MidAmerican Energy, formerly Midwest Gas. Due to environmental concerns and our goals in redevelopment of this site, the following restrictions would be placed on the lessee: 1. There can be no substantial change in the use of the property without the approval of the Iowa Department of Natural Resources. The City will seek approval of the change of use with the lessee as appropriate. Approval of the United States Environmental Protection Agency may also be required by the City as a prerequisite to commencement of the lease. 2. There shall be no disturbance or excavation at a depth of six or more feet without appropriate employee safety and health training. Any activity on the Property involving soil disturbance or excavation at depths of six feet or more, lessee must first contact MidAmerican Energy for guidance on employee safety, health and matters relating to the environmental condition of the Property. Disturbance or excavation at a depth of six or more feet can only be authorized if the activity does not release or threaten release of hazardous substances. 3. No water supply wells or private well installation shall be allowed on the site. 4. The Property can only be used for industrial or commercial purposes. 5. The site cannot be used by the general public or for residential use. 6. The lessee must allow access to MidAmerican Energy for potential future work, the scope of which work is yet to be determined. 7. All operations and activities (other than during construction) on the property shall be conducted or maintained within completely enclosed buildings, except for off-street parking and loading facilities. 8. No exterior storage shall be permitted on the Property other than exterior trash collection areas that meet strict containment standards. 9. Parking areas shall be paved. 10. The lessee will be required to begin the project within 12 months of closing and to achieve initial occupancy of the building in accordance with a plan as submitted by the lessee and approved by the City. This condition will be included in the lease agreement for the property which will provide for a right of termination of the lease should the lessee fail to achieve occupancy as planned. The proposed time frame for the solicitation, receipt, evaluation of proposals and selection process is as follows: November 7, 2005 Invite Proposals January 10, 2006 Responses due February 6, 2006 Recommendation to City Council to select a lessee March, 2006 Lease negotiated/approved Recommended Action The recommended action is for the City Council to authorize the City Manager to proceed with seeking RFP’s for the redevelopment of the former City Operations and Maintenance Garage/offices. November 7, 2005 Request for Proposals: Redevelopment of the Former City of Dubuque Operations and Maintenance Garage and Offices Dubuque, Iowa I NTRODUCTION The City of Dubuque, Iowa issues this Request for Proposals (RFP) for the redevelopment and lease of the former City of Dubuque Operations and Maintenance Garage and Offices and site (“Property”) to solicit qualified tenants. The RFP requests the submittal of sufficient information regarding the development concept and financial capability of the tenant to enable the City to select a preferred tenant to negotiate with for a long-term lease and redevelopment of the property. The Property located at 925 Kerper Boulevard includes a 41,432 square foot garage building located on an irregularly shaped site measuring 246,168 square feet (or 5.65 acres). The Property was occupied by the City for use as the Operations and Maintenance Garage and Offices. The site is currently zoned HI (Heavy Industrial). The City will consider rezoning for commercial use as a condition to the lease. The annual triple net lease price is $158,000. The City’s goals are as follows: a. To create an attractive environment by improving the physical appearance of the building and the site. b. To achieve the restoration and occupancy of the building with appropriate tenants as soon as possible. Redevelopment should begin immediately and proceed through occupancy. The building should not sit vacant for any extended period of time. In 2009, the City intends to replace the building roof ($240,000) and repair building walls ($191,000) as part of ongoing maintenance. The Property has underground contamination and is part of a CERCLA (Superfund) site. Approximately $28 million of remediation has taken place at this Property and surrounding properties under the supervision of the United States Environmental Protection Agency. The City plans to maintain ownership to insure control of any development activities on the site which might impose liability on the City of Dubuque. At this time, there are continuing environmental investigations and remediation measures underway on the site at the expense of the previous owner MidAmerican Energy, formerly Midwest Gas. I NCENTIVES The property is eligible for financial assistance from the City of Dubuque Commercial/Industrial Building Rehabilitation Loan Program. This program provides low-interest (3%) loans for exterior and code compliance building rehabilitation. RPD ESTRICTIONS ON ROPERTY AND EVELOPMENT 1. There can be no substantial change in the use of the property without the approval of the Iowa Department of Natural Resources. The City will seek approval of the change of use with the lessee as appropriate. Approval of the United States Environmental Protection Agency may also be required by the City as a prerequisite to commencement of the lease. 2. There shall be no disturbance or excavation at a depth of six or more feet without appropriate employee safety and health training. Any activity on the Property involving soil disturbance or excavation at depths of six feet or more, lessee must first contact MidAmerican Energy for guidance on employee safety, health and matters relating to the environmental condition of the Property. Disturbance or excavation at a depth of six or more feet can only be authorized if the activity does not release or threaten release of hazardous substances. 3. No water supply wells or private well installation shall be allowed on the site. 4. The Property can only be used for industrial or commercial purposes. 5. The site cannot be used by the general public or for residential use. 6. The lessee must allow access to MidAmerican Energy for potential future work, the scope of which work is yet to be determined. 7. All operations and activities (other than during construction) on the property shall be conducted or maintained within completely enclosed buildings, except for off-street parking and loading facilities. 8. No exterior storage shall be permitted on the Property other than exterior trash collection areas that meet strict containment standards. 9. Parking areas shall be paved. 10. The lessee will be required to begin the project within 12 months of closing and to achieve initial occupancy of the building in accordance with a plan as submitted by the lessee and approved by the City. This condition will be included in the lease agreement for the property which will provide for a right of termination of the lease should the lessee fail to achieve occupancy as planned. SR UBMITTAL EQUIREMENTS To assist the City in selecting the best development proposal, lease proposals shall be written and presented in the following format, utilizing the headings presented below for organization. Lessee Indicate the name, address and telephone number of the proposed lessee of the project. Provide the name of one contact person authorized to represent the lessee. Overview of Proposal Present a statement of the proposed lease that provides a clear identification of the project and indicates a clear understanding of the desired results and proposed occupancy and ability to meet restrictions on use. Timeline Describe the anticipated timing of improvements, intended date of occupancy, and proposed length of lease. Development Costs Provide estimated development costs for the proposed lease. Financing of Project Identify the type and method of financing, sources of funds and amounts from each source. Provide evidence of financial commitments. If the City’s financial participation is expected, describe what level of participation is anticipated and the proposed terms. Impact of Proposal Describe the probable economic impact of the proposal including the following: the number of construction and permanent jobs to be created or retained; tax revenue to be generated by the proposal; and the regional economic impact of the proposal if any. Describe the probable impact of the proposal upon the environment, including, what, if any, subsurface activity is expected as part of the construction and operation under the lease. A site plan for the property and or elevation drawings if changes to the building are proposed is encouraged. SC ELECTION RITERIA The City will use the following information to evaluate the proposals: Lessee Expertise ? Demonstrated ability to develop commercial/industrial projects. ? Qualifications of the key individuals proposed for involvement in the development. Site Improvements and Planned Reuse ? Proposed reuse of the building site. ? Type and scope of proposed building/site improvements. ? Compatibility with surrounding land uses, restrictions, vistas, vehicular activities and future development of adjacent property. ? The functional design of the site and structure. ? The overall aesthetic improvement of the site quality of the development. ? Proposed length of the lease. Financial Resources ? Firm financial commitments to undertake the project. ? Ability to provide funding resources, including current relationships with major lenders, past funding experience, and the knowledge of other funding sources or mechanisms for the project. SP ELECTION ROCESS The selection committee will review all responses to the RFP. The selection committee may meet with any or all of the proposed lessees. The City reserves the right to request additional information from applicants prior to making a recommendation; however, special care must be taken to prepare and submit the best response as the City may not permit additional information to be submitted after the submittal deadline. The City reserves the right to reject any and all offers or to negotiate in any manner necessary to serve the best interests of the City of Dubuque. The recommendation of the selection committee will be forwarded to the City Manager who will make a recommendation to the City Council for consideration and final selection of the lessee. A Lease Agreement will subsequently be negotiated with the selected lessee. Under the terms of the Lease Agreement, the lessee will be required to submit the following: ? detailed financial and development cost information relating to the lease proposal; ? project site plan, exterior elevations, and interior floor plans, if changes are proposed. ? site landscaping plan; and ? site parking plan. ? The Lease Agreement will provide for the final scope and design of development, schedule for development, terms of the lease and terms and conditions for any public financial participation in the project. A lease is subject to final approval by the City Council following a public hearing. PS ROPOSED CHEDULE The time frame for the solicitation, receipt, evaluation of proposals and selection process is as follows: November 7, 2005 Invite Proposals January 10, 2006 Responses due February 6, 2006 Recommendation to City Council to select a lessee March, 2006 Lease negotiated/approved AI DDITIONAL NFORMATION Interested lessees are encouraged to explore this unique opportunity by requesting a tour of the site and existing building. Additional Information may be requested by calling the Economic Development Department at 563/589-4393 or emailing the Point of Contact listed below. CDS LOSING ATE FOR UBMITTALS Seven (7) copies of the RFP response, plus an unbound original for copying purposes, Tuesday, January 10, must be received by the City no later than 12:00 p.m. noon on th 2006 . All proposals shall be delivered to the City of Dubuque, City Hall, 50 W. 13 Street, Dubuque, Iowa 52001, Attention: Dave Heiar, Economic Development Director. Responses arriving later than 12:00 p.m. noon or at a different location will not be considered. PC OINT OF ONTACT Dave Heiar is the sole point of contact for this solicitation. Questions regarding the RFP should be submitted in writing to the address above or via email at dheiar@cityofdubuque.org. F:\USERS\Dheiar\RFP City Operations.doc