CMPA consultant Owen Beitsch sent an email to the CMPA board listing these open items on the master developer agreement with Maritime Park Development Partners (MPDP):
• Development fees: These are generally identified in the proposal already but they can be explained with greater clarity. Part of the determination about suitable fees hinges on
a detailed understanding of MPDP’s costs, staffing, and obligations as the entity assumes multiple roles.
• Scheduled payment of developer fees: Various options are being explored. No
immediate solutions identified.
• Maximum budget: The City has affirmed a maximum budget obligation $38,000,000. Although other funds might be forthcoming from grants or similar sources, these are not assumed at the moment and do not affect the City’s contributions. Adjustments in MPDP’s fees could free more capital to enhance the project.
• Developer loans: The City has affirmed it does not want to make or to use any developer loans or advances to the project that exceed the stated $38,000,000 commitment. The current agreement addressed this matter already but the specificity of the City’s financial obligation indicate any reference to this option be deleted.
• Park operations and management: This is not a new issue. We have discussed a contracting commitment of five years. Extensions beyond that term are being discussed in terms of provisions under which extensions may or may not be granted. The idea is to
detail very specific measurement or performance criteria under which the contact could be voided. Many issues are bundled together here and MPDP has agreed to issue a more detailed budget, explanation of various items therein, and staffing schedule. These matters are being explored.
• Contracting and related fees for construction: This is not a new issue. More favorable terms on these fees could reduce the construction budget enhancing project improvements within the same stipulated budget. The combined roles of developer and general contractor make it important that we fully understand potential staffing and cost overlaps. A staffing schedule and detailed explanation provide the basis for further evaluation.
• Shared savings relative to GMP: This item is closely related to the one above and the procedures for establishing the GMP. To the degree there are opportunities to realize any cost savings, there has been discussion about how these should be allocated to project enhancements. Whatever the savings might be, there is an expectation that a substantial percentage should be assigned to the project, especially given the potential for MPDP to earn higher fees overall.
• Land valuations: This clearly is not a new issue. The City and CMPA do not want to enable a development timetable that has no relatively fixed period for performance, nor
do they only want to collect rent on undeveloped property(ies). Achieving the proper balance among land values, developer flexibility, the applicable period, and termination is difficult. The draft document allows for termination but given the many possible ways to value the underlying land, more specificity is appropriate. MPDP has suggested an approach which is still being explored.
• Lease term: Primarily a City issue. Sixty years is adequate for most non-residential improvements.
• Contract termination and penalties: MPDP is asking seeking its full development fee should the City or CMPA default for any reason. The City is steadfast regarding its
opposition to this point. MPDP has been asked to outline what costs might be incurred over the initial period of the approved agreement but prior to receipt of actual construction proceeds when risk may be greatest.
• Project oversight: The budget currently contemplates some executive would interact between CMPA and MPDP to mange changes or adjustments expediently, reporting to
CMPA where necessary and appropriate. There seems to be a concern that this level of oversight may not be sufficient.
• CMPA continuing role: CMPA has a policy making role to address and approve all of the above on an ongoing basis CMPA will have to be satisfied that the proposed agreement maintains the board’s standing according to its wishes and its abilities.