Proposal Content and Submittal Requirements
Proposers shall prepare preliminary proposals for the master plan and development of each Project, including conceptual plan, representative elevations and typical unit types for each Project, and a pro forma financial analysis including both development cost estimates and the estimated operating income and expenses for each proposed Project.
A. Submittal Instructions
Proposals shall be submitted in accordance with the following procedures:
The Proposal shall be formatted on 8.5” by 11” paper, preferably in portrait orientation, printed double-sided and spiral bound (no three ring binders, please) and submitted as an electronic document in an unsecured Adobe Acrobat (.pdf) format (except that the financial pro formas and sensitivity analyses required in subsection D. below shall be submitted in an unsecured Excel format) via flash drive. 11” x 17” paper is acceptable for schedules and spreadsheets to make them easier to read. All page limitations identify single-sided pages of content (i.e. one double sided page equals two pages of content).
2. CONTENTS AND ORGANIZATION
Stage 2 RFP Proposal materials shall be tabbed, with sequentially numbered pages and organized as follows:
- Administrative Submittals, as outlined in Section III.B., below;
- Section 1: Technical Proposal, as outlined in Section III. C., below; and
- Section 2: Financial Proposal, as outlined in Section III. D., below.
3. SUBMISSION OF PROPOSALS
Submit fifteen (15) copies for each Project of your Stage 2 RFP Proposal and an electronic version of the complete Proposal in the unsecured formats noted above via flash drive. Please note that these materials will not be returned. To be considered, all Stage 2 RFP Proposals must be submitted by August 31, 2017 at 3:00 p.m. Pacific Daylight Time (PDT) to:
Mary Goodell Hayakawa
Executive Director, Real Estate Services
University of California, Davis
255 Cousteau Place
Davis, CA 95618
It is the Proposers’ responsibility to ensure that their submission is received by the Campus before the deadline and they are responsible for any potential delay by their delivery service.
4. GENERAL CONDITIONS
Each Stage 2 RFP Proposal shall be submitted without reservations, qualifications, conditions or assumptions. Any failure to provide all of the information and completed forms may result in the Campus’s rejection of the Stage 2 RFP Proposal or a lower score, depending on the nature of the omission.
B. Administrative Submittals
The Proposer shall provide the following Administrative Submittals:
- Letter of Interest – a brief introductory letter signed by an authorized Principal of the Proposer;
- Confirmation that the Key Personnel listed in the Proposer’s Stage 1 submission have not changed since submission. Or, if any changes have been made, please identify these changes and provide resumes for any replacement; and,
- Confirmation that the Proposer (including each of its Equity Members) continues to have the financial capacity to develop, design, construct, own, operate, and maintain the Project or Projects.
C. Technical Proposal
1. EXECUTIVE SUMMARY OF TECHNICAL PROPOSAL
Proposers shall provide a brief written narrative to concisely describe their overall proposed approach to each Project. The narrative should provide a summary of key elements of the Proposal and describe how the elements will be integrated, managed, and implemented to achieve a successful outcome for each Project. The Executive Summary for each Project shall not exceed ten (10) pages and shall summarize the following elements:
- Narrative overview of development approach;
- Master planning approach and concepts narrative;
- Project schedule (including phasing plan, as applicable);
- Construction logistics and sequencing plan;
- Project management approach;
- Operations and maintenance approach;
- Stakeholder outreach and engagement plan; and
- Sustainability approach.
2. PROJECT SCHEDULE
Proposers shall submit a detailed Project Schedule for each Project in Gantt chart format detailing major project milestones for each Project including the following elements:
- Programming and stakeholder engagement;
- Schematic design milestones (50% and 100% schematic design);
- Design development milestones (50% and 100% design development);
- Construction documents milestones (50%, 95%, and 100% construction documents);
- Ground Lease negotiation schedule (for approval by The Regents in May 2018 and transaction closing in June 2018);
- CEQA process (for approval by The Regents in May 2018);
- Financing schedule; and
- Construction schedule, include the following:
- Commencement of construction (July 2018);
- Building permits;
- On-site and off-site infrastructure;
- Coordination of building systems;
- Commissioning of major equipment and systems;
- Punch list;
- Substantial completion;
- Certificate of Occupancy; and
- Notice of Completion.
In addition to the Gantt chart for each Project, Proposers shall submit a written narrative not to exceed eight (8) pages for each Project, detailing your approach to organizing the design and construction work for each Project, broken down by major component, to achieve the milestone dates of each proposed Project schedule.
Note: The Campus desires to have both the Orchard Park Redevelopment and the West Village Transfer Student Housing Projects ready for occupancy by August 2020. To the extent that a Proposer would like to suggest a phased delivery of the Projects extending later than August 2020, please plan on delivering the entirety of the Orchard Park Redevelopment Project in 2020 and suggest a phasing of the West Village Transfer Student Housing Project. Please include in your narrative the pros and cons of a phased delivery, especially as it affects the affordability of the Projects for the students. Additional Gantt charts may be included to reflect alternative schedules.
3. CONSTRUCTION LOGISTICS/SEQUENCING NARRATIVE
Provide a narrative not to exceed six (6) pages for each Project that addresses each phase of the construction and highlights the Proposer’s approach to the following:
- Management of traffic circulation (vehicular, bicycle, and pedestrian) in and around each Project site throughout the construction period of each Project;
- Coordination of site access to construction trades, supervisory and delivery personnel, materials and equipment delivery personnel, visitors, staging of equipment and materials, and contractor and subcontractor parking;
- Management and procurement of available trades to maintain schedule and budget. Also, for the West Village Transfer Student Housing Project, compliance with the requirements of the Memorandum of Agreement Re: University of California, Davis –West Village, Department of Industrial Relations Coverage Determination Public Works Case No. 2010-024, December 20, 2013 dated January 15, 2016 (See, Appendix 20); and
- Site control for each Project site that addresses how security and safety will be managed.
If the Proposer has chosen to submit two (2) Master Plan and Phasing Plan alternatives for the West Village Transfer Student Housing Project, it must submit a Construction Logistics/Sequencing plan for each alternative. In such case, each alternative described is limited to six (6) pages of narrative.
4. PROJECT MANAGEMENT APPROACH
Proposers shall submit a written narrative not exceed five (5) pages for each Project that provides an overview of the management structure and key roles and responsibilities for each Project.
In addition, Proposers shall submit an organizational chart that diagrams responsibilities, communication lines (including communications with the Campus and campus stakeholders), and utilization of key personnel highlighting the following activities:
- Master planning and design;
- Ground Lease negotiations;
- Construction; and
- Operations and maintenance services.
5. OPERATIONS AND MAINTENANCE APPROACH
Proposers shall provide a written narrative not to exceed six (6) pages for each Project that describes their approach to operations and maintenance (“O&M”) of each Project, including, at a minimum, the following elements:
- Quality management during each Project’s operating period, including a description of the proposed:
- Quality Assurance/Quality Control program for O&M services; and
- Inspection of facilities and corresponding system elements.
- Customer service approach for each Project – how do these differ depending on the student demographic residing in each Project? A proposed plan of for operations of a customer service center, including 24/7 maintenance work order submissions, incorporating industry best practices;
- Development of a communication plan for ongoing interactions with Campus staff including UC Davis Student Housing and Dining Services and Real Estate Services;
- Development and implementation of a preliminary response and corrective action plan for incidents;
- Capital asset and lifecycle cost management and routine maintenance during the operating period;
- Capital repair and renewal during the operating period; and
- A Computerized Maintenance Management System that will integrate the management of the customer service processes with the O&M services, data mining and development of all required reports.
6. STAKEHOLDER ENGAGEMENT
While the Campus will take the lead in developing a plan for ongoing stakeholder engagement throughout the design, construction and operations of each Project, it is important to understand Proposers’ experience and general approach to communications and outreach on similar projects. Accordingly, Proposers shall provide a written narrative not to exceed three (3) pages for each Project describing their approach to engaging with the Campus community, Campus leadership, the surrounding community and other stakeholders.
7. SUSTAINABILITY APPROACH
Proposers shall provide a narrative not exceed eight (8) pages setting forth an overall approach to sustainability for each Project. The West Village Transfer Student Housing Project shall be designed to be all electric and zero net energy from the grid on an annual basis. At a minimum, the Orchard Park Redevelopment Project shall be designed to meet the UC Sustainable Practices Policy (See, Appendix 2) and take into account the UC Carbon Neutrality Initiative (See, Appendix 3). The Orchard Park Redevelopment Project shall be designed to be all electric.
8. DESIGN SUBMITTAL
- Illustrative Conceptual Site Plans;
- Representative Sections to Illustrate Key Site Features;
- 3d Massing Model/Perspectives Illustrating Key Relationships between Building and Open Space;
- Floor Plans for Typical Unit Types;
- Landscaping and Open Space Master Plan and Narrative; and
- Multi-modal Circulation and Access Plan and Narrative (indicate bicycle, pedestrian and vehicular circulation routes; identify main entry points for building residents; identify “back of building” entry points for service; locate areas for bicycle and vehicular parking).
D. Financial Proposal
1. SUBMITTAL REQUIRMENTS
The University requires Proposers to submit the following as part of their financial proposals:
- Baseline pro formas for the Orchard Park Redevelopment Project based on (i) the tax-exempt bond transaction structure and (ii) the commercial debt/private equity transaction structure, reflecting the standardized assumptions set forth in subsection D.2 below and the Proposer’s compensation proposal submitted in accordance with subsection D.4 below.
- Baseline pro formas for the West Village Transfer Student Housing Project based on (i) the tax-exempt bond transaction structure and (ii) the commercial debt/private equity transaction structure, reflecting the standardized assumptions set forth in subsection D.2 below and the Proposer’s compensation proposal submitted in accordance with subsection D.4 below.
- Pro forma interest rate sensitivity analyses for the Orchard Park Redevelopment Project, for both the pro forma based on the tax-exempt bond transaction structure and the commercial debt/private equity transaction structure, reflecting the standardized assumptions set forth in subsection D.2 below, the interest rate assumptions set forth in subsection D.3 below, and the Proposer’s compensation proposal submitted in accordance with subsection D.4 below.
- Pro forma interest rate sensitivity analyses for the West Village Transfer Student Housing Project, for both the pro forma based on the tax-exempt bond transaction structure and the commercial debt/private equity transaction structure, reflecting the standardized assumptions set forth in subsection D.2 below, the interest rate assumptions set forth in subsection D.3 below, and the Proposer’s compensation proposal submitted in accordance with subsection D.4 below.
- Proposer’s proposed compensation for (i) the development and (ii) the management and operation of the Orchard Park Redevelopment Project, in accordance with subsection D.4 below.
- Proposer’s proposed compensation for (i) the development and (ii) the management and operation of the West Village Transfer Student Housing Project, in accordance with subsection D.4 below.
The tax-exempt bond transaction structure is generally described as follows: the selected Developer will earn a fee to develop and operate the Project under contract with a qualified non-profit entity that will be selected by the University, and the non-profit entity will enter into ground leases for the Project sites and own the completed Projects. The commercial debt/private equity transaction structure is generally described as follows: the selected Developer will provide equity and secure private commercial financing under long term ground leases with the University for the Project sites and the Developer will own, operate, and maintain the Projects.
All financial pro formas and sensitivity analyses shall be developed, and submitted as part of the proposal, using Microsoft Excel Software that is unlocked and shall contain the following worksheets which may be found in Appendices 9 and 19:
- Operating Pro Forma
- Construction Budget
- Soft Costs and Financing Costs
- Operation and Maintenance Expenses
- Debt Schedule
All worksheets shall be linked to all other worksheets within the pro forma to allow for manipulation of the assumptions (variables) to provide varying results during the evaluation of submittals. All cells that have assumptions that can be manipulated shall have a light blue background.
2. STANDARDIZED ASSUMPTIONS IN BASELINE FINANCIAL PRO FORMAS
Proposers shall include the following standardized assumptions in their Baseline pro formas:
Fees are to be paid to the Campus on an annual basis for the provision of the following services to the projects: Fire Protection, Fire Prevention, and Police services. The estimated fee for FY2020/2021 (July-June), for all three services combined, is $1.0832 per gross square foot of building area, and will escalate annually at 3%.
Bed Rental Rates
The Proposer’s Baseline pro forma must be engineered to sustainably achieve, without subsidy from the University, the rental rate targets contained in the table below.
2017 Rental Rates:
- Rent Escalation: For the Orchard Park baseline financial pro formas, Proposers are to use an annual rent escalation of no more than 2% for the two-bedroom units for students with families, and an annual rent escalation of no more than 3% for the market rate units. For the West Village baseline financial pro formas, Proposers are to use an annual rent escalation of no more than 2%.
- Market-rate Apartments: Proposers are to provide a narrative not to exceed three (3) pages explaining their analyses of the market-rate apartment stock in order to justify the rent assumptions utilized in their pro formas for market-rate apartments at Orchard Park. All supporting data used in the Proposer’s analysis shall accompany the narrative for this section and be properly labeled and notated for purposes of clarity and understanding of Proposer’s approach to defining the rent structure(s).
- Financing Assumptions: The Baseline project pro forma for tax-exempt bond financing shall include and reflect the following financing assumptions for the Project:
The Baseline project pro forma for debt/equity financing shall include and reflect the following financing assumptions for the Project:
3. SENSITIVITY ANALYSIS AND ALTERNATIVE FINANCIAL ASSUMPTIONS
Proposers shall include interest rate sensitivity analyses for their Baseline pro formas for each of the projects. Each sensitivity analysis shall be detailed in a separate worksheet and shall show the corresponding adjustments to rental rates that would be required to maintain the same degree of financial feasibility as the Baseline pro forma. The sensitivity analyses shall incorporate the assumptions described above in Section IV.D.2, except that the sensitivity analyses shall evaluate the following interest rates:
- The interest rate is 5.0%;
- The interest rate is 5.5%; and
- The interest rate is 6.0%.
- The interest rate is plus 0.5%;
- The interest rate is plus 1.0%; and
- The interest rate is plus 1.5%.
At the Proposers’ option, additional financial scenarios may be submitted if it is believed that additional value can be created for the University. Each alternative financial structure shall be submitted in a separate unlocked version of a Microsoft Excel workbook in accordance with the requirements outlined above. The limitations of the alternative financial structures are outlined below:
- Proposers may present an option that extends the tax-exempt bond financing term (and the ground lease term) up to a maximum limit of 35 years;
- Proposers may present an option that extends the ground lease term for the debt/equity transaction structure up to a maximum limit of 65 years.
4. COMPENSATION PROPOSAL REQUIREMENTS
The University desires that the compensation paid the selected developer for its services in developing each Project be dependent upon the completion of construction of each Project on time and on budget and in conformance with approved plans and specifications. Similarly, the University desires that the compensation paid the selected property manager for its services in operating and managing each Project be dependent upon each Project meeting mutually-agreed performance thresholds.
The Proposer’s compensation proposal should include the following:
- Its proposed compensation for the development of the projects and the performance measures by which by which such compensation would be judged or adjusted, and should include the following to the extent they are relevant to the proposal: development fee; construction management fee; participation in construction savings; any other form of compensation for Project development.
- Its proposed compensation for the management and operation of the Projects and the performance measures by which such compensation would be judged or adjusted, and should include the following to the extent they are relevant to the proposal: compensation paid as an operating expense; compensation paid subject to the Project maintaining specified bond financing covenants (if the Project is undertaken in a tax-exempt bond structure); any other form of compensation for Project operation and management.
- If the Project is undertaken in a commercial debt/private equity transaction structure, the Proposer’s minimum required internal rate of return for the Project, and the Respondent’s minimum required yield requirement in the first year of stabilized operation.
The University will consider the Proposer’s compensation proposal solely as a basis of evaluating and comparing proposals; the University reserves the right to further negotiate the compensation with the selected Proposer.
E. General Provisions
Each Proposer must submit its Proposals by the Submittal due date and time. Any failure to provide all of the information required herein may result in the rejection or reduced evaluation of the Proposal, depending on the nature of the omission. To the extent a form is attached to the Stage 2 RFP, no substantive changes shall be made to such forms.