How does the developer agreement between the City and the Maritime Park Developers answer the concerns that City Manager Al Coby expressed to the Pensacola City Council?
Should MPDP assume [all roles] it brings into question the future role of the CMPA.
* CMPA has active management, advisory, coordinating, and facilitating roles.
* These roles will be particularly important as the initial public improvements are
planned and implemented.
* The $38,000,000 budget anticipates CMPA will secure technical support to fulfill, in part, the body’s oversight function.
* Outside technical assistance or support was envisioned from the beginning of the negotiations although the budget has been adjusted to allow additional funding or this activity.
MPDP’s proposal deviates from the RFQ
* City appears satisfied that this is not the case.
* The RFP did not exclude multiple roles
* The budgeting procedures assure that CMPA has adequate technical expertise to fulfill a role that may have been achieved were MPDP acting only as the developer.
The development fee should be specifically established in the Agreement.
* Fee is 4% and terms of calculating it are clear.
* Costs that must be absorbed within this budget are clearly articulated.
* In part, these stipulations express the concerns and priorities of CMPA.
The development fee is front-loaded
* Fees are paid only in accordance with progress on public improvements. That is, they will be expended at the pace of development and construction.
* Some initial technical costs will be reimbursed with documentation.
Allowing MPDP to function as both the Developer and …Contractor requires additional management
* As noted above, some professional expertise was always contemplated within the management budget. Staff technical capacity has been enhanced.
* The development budget has been specifically adjusted to include financial capacity for an owner’s rep which should be secured soon.
as general contractor, [allowable fees] should be specified … the ultimate disposition of any contingencies should be established.
* Fees (overhead and profit) are capped at 3%.
* All cost savings, if any, are returned to the City.
* The agreement allows for a 4% construction contingency if a corresponding owner’s contingency of 4% is also budgeted. These combined fees compare to 7% originally outlined.
* The general contractor’s part of the contingency has been reduced necessitating greater care in budgeting and execution.
* The budget for general conditions is effectively set at cost with some stipulations on line items.
The decision should be made … under which …. CMPA and City are willing toaccept an advance [from MPDP which would] increase the cost of the project
* City’s obligations capped at an absolute $38,000,000.
* MPDP can still seek grant assistance and the developer fees would apply.
* It should be clear that CMPA and MPDP are working toward a complete package that generally includes the improvements shown in the design criteria with the likely exception of the conference center which may have to be moved to the future should cost savings prove inadequate to accommodate the building.
* It should also be clear that the process identified in the agreement is a process of discovery and confirmation. As the process unfolds, it will become evident what can be achieved for the currently allocated budget.
* When, and if, there are needs to change or reallocate priorities within the adopted budget, these responsibilities vest with CMPA and the City.
Design changes … should rest solely with the CMPA and the City.
* They do and have always vested with these bodies.
* The expectation is that the adopted design criteria represent the controlling set of design guidelines for initial planning and budgeting but these may be modified with agreement as necessary.
* The comments, just above, describing the adopted budget have relevance to this points well.
Should MPDP … manage the Public Improvements, an initial term of five years is reasonable [as is] an annually approved operating budget
* The arrangement calls for one five year term and a renewal.
* CMPA approves all budgets.
* MPDP can be removed for non-performance but the language has been tightened and further limits risks to CMPA for any budget shortfalls.
if a third party manager is proposed for the multi-use stadium, why should the CMPA not contract directly with that firm?
* The developer is motivated to insure the protection of all assets, more so than a third party not allied to the project. In effect, the form of agreement now contemplated aligns the interest of CMPA, the City and the developer almost perfectly.
* Through CMPA’s review and approval powers, the public still maintains control of
all functions.
The Lease Agreement should have provisions for extending the lease term on any parcel approved by the City for development as residential.
* The City has offered more advantageous terms for parcels that are substantively comprised of residential development (20%)
* Commercial leases will remain at 60 years.
* The City has acknowledged there may be some reasons to extend a lease term to engage the financial markets and to achieve project objectives.
* MPDP can seek can seek an 80 year lease for hotel uses under the outlined terms
* The pricing of land will reflect a market based process with periodic adjustments
in any underlying lease keyed to CPI.
* The agreement calls for a staged pace of development or the loss of rights.
MPDP Contractual roles should be clearly defined and a provision for termination incorporated into the Agreement.
* Terminations are expressly laid out.
* MPDP would retain some fees for demobilization but these are below those incorporated in the initial draft agreement.
any consideration of phasing the project should include all of the Site Preparation and [address] those that would support the public and private construction contemplated but not initially incorporated.
* The agreement anticipates that.
* It should again be understood that the CMPA, the City and the developers are advancing through a process to determine and confirm exactly what can be constructed for the allocated budget and what, if any, changes in priorities will be necessary.
* The City and CMPA control these decisions.
