Item 11 - Developer Selection Process for RDA Affordable Capital Program
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r(): Honorable Chairman and Members of the Redevelopment Agency INn4
FROM: James L. Bowersox, Executive Dire~
INITIATED BY: John D. Fitch, Assistant Executive Director /:;j
Warren H. Shafer, Director of Redevelopment Services~
Pamela R. Colby, Redevelopment Project Administrator~
DATE: July 11, 1995
SlJBJECT: Developer Selection Process for Redevelopment Agency Affordable Housing
Capital Program
ABSTRACT
The Redevelopment Agency has acquired three sites for the development of affordable
housing. Over the past several months, staff and David Rosen have been evaluating
methods for developer selection. The Redevelopment and Housing Advisory Committee has
evaluated these methods for selecting developers and is recommending the process
outlined in Attachment C to this report. The recommended process would be open to all
interested parties through a Request for Qualifications, followed by a more detailed
Request for Proposal of pre-screened developers. The Committee would participate in
this process through the appointment of subcommittees to serve on a developer selection
team. Final developer approval would be made by the Redevelopment Agency Board.
-- Authorization to proceed with developer selection for the Bowron Road and Brookview
sites is being requested at this time.
ENVIRONMENTAL REVIEW
This item is not subject to CEQA review.
FISCAL IMPACT
There is no fiscal impact resulting from the recommended action.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
Copies of this report were forwarded to the members of the Redevelopment and Housing
Advisory Committee.
RECOMMENDATION
It is recommended that the Redevelopment Agency approve the developer selection process
outlined in Attachment C, authorize staff to initiate the developer selection process
for the Bowron Road and Brookview sites, charge the Redevelopment and Housing Advisory
Committee to participate in the process as noted in this report, and if deemed
appropriate, appoint 1 to 2 Agency Board members to directly participate in the
selection of the development team.
_ ACTION
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- AGENDA REPOR.L
CITY OF POW A Y
TO: Honorable Chairman and Members of~edevelopment Agency
FROM: James L. Bowersox, Executive Dire
INITIATED BY: John D. Fitch, Assistant Executive Director ~
Warren H. Shafer, Director of Redevelopment Services'
Pamela R. Colby, Redevelopment Project Administrator~
DATE: July 11, 1995
SUBJECT: Developer Selection Process for the Redevelopment Agency's
Affordable Housing Capital Program
BACKGROUND
Since approval of the Comprehensive Affordable Housing Strategy in June 1993,
the Redevelopment Agency has primarily focused its attention on site
acquisition with respect to its affordable housing program. With the
acquisition of three significant sites completed (Bowron, Brookview, Breihan),
the focus has changed to evaluating the options for developing these sites.
In anticipation of this activity, the Agency approved a contract with the
consulting firm of David Paul Rosen & Associates (DRA) to provide technical
assistance with this complex work. Since approval of this contract with DRA,
City/Agency and DRA staff have been working with the Redevelopment and Housing
Advisory Committee on devising an appropriate process for selecting qualified
developers to participate in the development of Agency owned affordable
housing sites.
FINDINGS
On February 13, 1995, ORA presented a report to the Redevelopment and Housing
Advisory Committee, Developer Selection Criteria and Selection Process Options
(Attachment A) which reviewed: the role of the developer, developer selection
criteria, and process options for selecting a developer. This was the
Committee's first introduction to the options for pursuing developer
selection, and no formal decision was requested or made at that time. The
Committee did concur, however, that the process should be competitive and open
to all interested participants. On June 12, 1995, DRA presented its
recommendation (Attachment B) for a specific process for developer selection
which incorporated DRA's understanding of the Committee input from the
February 13, 1995 meeting. This process is summarized on Attachment 1, "Steps
in a Recommended Development Process," to Attachment B of this report.
ACTION:
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As recommended, the process would begin with a Request for Qualifications
(RFQ) being developed and made available to all interested parties to respond
to. The RFQ would require developers outline their experience as it relates
to a specific Agency site/project. An emphasis would be placed on developers'
experience and track record with developing affordable housing (senior and/or
family) and securing appropriate sources of financing to "leverage" the
Agency's Housing Fund assistance.
A team would be formed to select a developer, comprised of Agency/City staff,
David Rosen, and 2 to 3 members of the Redevelopment and Housing Advisory
Committee. This developer selection team would review the RFQ responses and
invite 3 to 5 developers to participate in a Request for Proposal (RFP)
process. The RFP would require much more detailed information specific to the
project, and would involve an interview with the selection team. The
recommendation of the developer selection team would then be forwarded to the
Redevelopment Agency for approval.
This process would be repeated for the selection of the architect/civil
engineer and management entity with one notable exception. The Agency's
agreement to develop the site would be with the developer, most likely in the
form of a Disposition and Development Agreement. The architect, general
contractor and management company, while selected jointly by the Agency and
develaper, would actually be under contract with the developer.
With regards to the selection of a general contract, David Rosen expressed his
preference for the "negotiated bid" process, but explained that he had
included the competitive bid process due to his understanding of the
Committee's strong preference for this option. The negotiated bid involves
the selection of a general contractor immediately following the selection of
the developer. The developer and Agency would identify general contractor
candidate(s), conduct due diligence /reference checks and interview(s). The
developer and Agency would jointly select the general contractor and negotiate
the development fee. There are a number of methods for structuring a
negotiated bid contract. The developer may enter into a agreement with a
general contractor to work on a flat fee or a cost plus basis.
Mr. Rosen indicated that in his experience, the negotiated bid process more
often results in lower construction costs than those experienced with
competitive bids. Change orders can drive project costs considerably higher
than those agreed to under the original bid. In addition, the competitive bid
process necessitates that the architectural drawings are completed before
selection of the general contractor. This removes the general contractor, and
their experience with estimating and containin9 construction costs, from the
design process. Further, the selection of the general contractor and
employing the negotiated bid can help create a true development team, where
the competitive bid process can result in efforts to assign blame between the
architect and the general contractor if problems occur during construction.
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Agenda Report
July 11, 1995
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After considerable discussion and deliberation, the Committee unanimously
approved the developer selection process which included the negotiated bid
process for general contractor as outlined on Attachment C.
In order to involve the community in the process, the architect would hold a
community design workshop to allow all interested members of the public to
provide input regarding project design. The developer and City/Agency staff
would then work together to prepare the Specific Plan required pursuant to the
AH Overlay Zone, and to structure project financing. Once the financing and
Specific Plan are in place, the balance of the project would proceed much like
a private development. Various permits and City approvals would be obtained
and construction would be undertaken.
A separate developer selection process is being recommended for each of the
Agency sites/projects for a number of reasons. First, different types of
housing (senior/family) require different expertise and experience. Second,
the developer must demonstrate that they have the financial and staff capacity
to undertake each project. This may preclude one developer from undertaking
any more than one Agency project at anyone time. At this point in time, it
would probably not be prudent for the Agency to commit to one developer for
more than one project.
In addition to evaluating the developer selection process, the Committee
considered their role in this process. The Committee is recommending the
establishment of several subcommittees that would participate directly in the
selection process. It was felt that separate subcommittees should be
established for the various selection decisions to be made (developer,
architect, general contractor), allowing individual Committee members to
participate in areas where they may have special interest or expertise. Mr.
Rosen recommended that a maximum of 2-3 members of the Committee serve on each
subcommittee to be formed. As recommended, the developer selection team would
be comprised of Agency staff, the designated subcommittee, and Mr. Rosen.
The Redevelopment Agency Board may participate in this process through the
appointment of 1 or 2 members to the developer selection team. Alternatively,
the Agency Board may consider the matter after the developer selection team
has made its recommendations. Under either scenario, the recommendation for
project developer would be taken to the full Redevelopment Agency for final
approval.
The timing and sequencing of the development of the Agency owned sites is
driven by different issues. The timing of the development of the Brookview
site is likely to be dependent upon the regulatory review process involving
the creek and other environmental resources. Alternatively, the timing of the
Bowron Road site development is likely to revolve around the applications
process for the highly competitive "9%" tax credits. It is anticipated that
the unique aspects of each site will result in the "phasing" of the actual
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development process. This phasing will be necessary to ensure that the in-
house project management capacity is adequate at all times. With the
information currently available and the number of variables outside the
Agency's control, it is not possible to know which project, the Brookview or
the Bowron Road site, will be under construction and completed first.
At this time, it is recommended that the Redevelopment Agency authorize staff
to initiate the developer selection process, following the process outlined in
Attachment C. The Agency is also being asked to charge the Redevelopment and
Housing Advisory Committee with participating in this process through the
appointment of subcommittees to participate in the selection of the
development team members. If deemed appropriate, the Agency may elect to
appoint Board members to serve on the developer selection team. Under either
scenario, the developer selection team will bring their recommendation
regarding developer selection to the full Redevelopment Agency Board for
approval.
ENVIRONMENTAL REVIEW
This item is not subject to CEQA review.
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FISCAL IMPACT
There is no fiscal impact resulting from the recommended action.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
Copies of this report were provided to the members of the Redevelopment and
Housing Advisory Committee.
RECOMMENDATION
It is recommended that the Redevelopment Agency approve the developer
selection process outlined in Attachment C, authorize staff to initiate the
developer selection process for the Bowron Road and Brookview sites, charge
the Redevelopment and Housing Advisory Committee to participate in the process
as noted in this report, and if deemed appropriate, appoint 1 to 2 Agency
Board members ta directly participate in the selection of the development
team.
Attachment:
"A" - "Developer Selection Criteria and Selection Process Options" by
David Paul Rosen & Associates.
"B" - Memo fr~m David Paul Rosen & Associates dated June 6, 1995.
"C" - Revised Developer Selection Process Recommended by the
Redevelopment and Housing Advisory Committee.
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ATTACHMENT A
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'-' D A V I D P AU L R 0 S E N & ASS 0 C I ATE S HOUSING, COMMUNITY
ECONOMIC DEVELOPMEN,.
3941 HENDRIX STREET
IRVINE. CALIFORNIA 92~1':.6537
TEL 714/559.5650
FAX: 714/559-5706
DEVELOPER SELECTION CRITERIA AND
SELECTION PROCESS OPTIONS
POW A Y REDEVELOPMENT AGENCY
February 13, 1995
Prepared For:
Poway Redevelopment Agency
13325 Civic Center Dr.
Poway, California 92064
Prepared By:
David Paul Rosen & Associates
1330 Broadway, Suite 1035 3941 Hendrix St.
Oakland, California 94612 Irvine, California 92714
(510) 451-2552 Tel (714) 559-5650 Tel
(510) 451-2554 Fax (714) 559-5706 Fax
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TABLE OF CONTENTS
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INTRODUCTION..................................................................................................................1
A. AGENCY ROLE ..........................................................................................................1
B. DEVELOPER ROLE(S) ................................................................................................2
1. Develorer .......................................................................................................2
2. Genera Contractor ........................................................................................2
3. Property Management ...................................................................................3
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C. DEVELOPER SELECTION CRITERIA........................................................................5
1. Track Record ..................................................................................................5
2. Capacity..........................................................................................................5
3. References.......................................................................................................6
4. Expense ...........................................................................................................6
5. Willingness to Abide by City Priorities.........................................................7
6. Construction Management Services.............................................................7
7. Comfort Level.................................................................... ..............................7
D. DEVELOPER SELECTION PROCESS OPTIONS.....................................................8
1. Sole Source Candidate...................................................................................8
2. Request for Qualifications, Pre-Screened Candidates................................8
3. Two-Stage RFQ/RFP Process ........................................................................8
4. Desigrv'Build Competition.............................................................................9
5. Provision for Potential Transfer of Managemern/Ownership
to a Future City-Sponsored Nonprofit.........................................................9
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E. CONSULTANT RECOMMENDATION AND TIMELlNE..................................11
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LIST OF TABLES
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l. Alternative Developer Roles .........................................................................4
2. Developer Selection Process Options ...................................................... 1 0
3. Estimated Timeline for Two-Stage Developer RFQ/RFP
Selection Process......................................................................................... 1 2
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INTRODUCTION
The purpose of this report is to describe and evaluate selection criteria and process
options for selecting developers for affordable housing sites in the City of poway. We
begin our discussion with the roles of the Poway Redevelopment Agency and the
developer, including the potential for the developer also to serve as general contractor
and/or property manager. Next, we outline recommended criteria for developer selection.
Finally, we outline several process options for selecting an affordable housing developer,
and present our recommendation and suggested timeline for affordable housing developer
selection.
A. AGENCY ROLE
The Powd; Redevelopment Agency's role in the affordable housing development process
will inclu e the following activities:
. determine development program including number of units, income
targeting, tenure (renter or owner), bedroom count and distribution, term of
affordability, general product type, and amenities;
. select developer and/or assemble development team;
. serve as lender and/or funder;
. underwrite development (evaluating the reasonableness of projected rental
income, vacancy rates, construction costs, operating costs, debt coverage
ratios, financing terms and other factors to determine financial feasibility);
. . ensure maximum costlbenefjt leverage of the Agency's investment;
. assist the developer in securing project financing;
. assist and facilitate the project permitting and approval process;
. monitor the Agenf7c's investment in the project, and ensure ongoing
compliance with a ordability restrictions and quality maintenance of the
project.
The Agency may assemble or assist in assembling the development team, including the
developer, architect and general contractor. To achieve maximum "buy in" on the part of
the developer, we recommend that the Agency select the developer first and then the
developer and the Agency jointly select the architect, general contractor and other
development partners (or the developer does so with Agency approval).
Developer Selection Criteria and Selection Process Options
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B. DEVELOPER ROLE(S)
The role of the developer in the affordable housing develohment process is outlined
below. In addition, we have discussed the additional roles if t e developer also serves as
general contractor and/or property manager. Table 1 summarizes alternative developer
roles.
1. Developer
The primary roles of the developer include the following:
. assembling the development team (architect, engineer, general contractor,
property manager, construction manager, project attorney, lenders,
. investors);
. obtaining City and other regulatory approvals in conjunction with the
project architect;
. securing financing and providing construction loan guarantees as required;
. selecting the general contractor;
. serving as the owner's representative in construction management and
oversight of the general contractor and architect.
For these activities, the developer is compensated through the developer fee and/or
icarticipation in cash flow and sales proceeds from the project. Some developers require a
ong-term ownership interest in the project, possibly in joint venture with a second general
partner. Other developers may be willing to transfer ownership (e.g. to a local nonprofit)
once the project is stabilized and such transfer is approved by lenders/investors. Still
others work under contract on a fee basis where they have no ownership interest.
Affordable housin~ funding and financing sources will require at least a short-term
ownership interest y an experienced affordable housing developer.
.2. General Contractor
In some cases, the developer may also serve as the general contractor for the project. The
general contractor is responsible for construction of the project, including:
. providing completion guarantees through a bond, letter of credit, escrow
deposit or personal guarantee;
. evaluating subcontractor bids, hiring and supervising subcontractors;
. ensuring the project is built per plans and specifications;
Developer Selection Criteria and Selection Process Options
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. completing construction within the time frame and budget specified in the
construction contract;
. managing inspections during construction by lenders, the City/Agency, and
the construction manager;
. maintaining all construction financial records and preparing draw requests.
The general contractor is compensated through the payment of contractor profit and
overhead, as well as the "general requirements" budget line which typically reimburses
certain staffing costs and direct expenses related both to actual construction costs.
3. Property Management
Some development firms also have in-house property management divisions. In these
instances, the developer may view the development process as serving the added function
of creating new properties to be managed. The primary advantage of a developer/
property manager is that the developer has the incentive and experience to develop the
project with long-term property management and maintenance in mind. However, the
number of developers, particularly nonprofit developers, with the capacity to both develop
and manage a property in Poway needs to be carefully evaluated.
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February 13, 1995
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Table 1
AL TERNA TIVE DEVELOPER ROLES
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Developer Role Advanta2es Disadvanta2es
1. Development on a Fee · May be preferable if · Developer has less long
Basis landowner wants to term interest in project
maintain ownership and quality and
control of project. maintenance.
· Affordable housing
lenderslfunding sources
will require ownership
by experienced
developer.
2. Long-Term Ownership · Developer has long-term · Less local control than
Interest interest in project quality ownership by a local
and maintenance. entity.
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3. Future Transfer of . May increase · Capable ownership
Ownership to Another capacity/assets of local entity may not be
Entity nonprofit entity. available.
4. Developer Serves as · Saves time and effort in · Eliminates "creative
General Contractor selecting separate tension" among
general contractor. developer, contractor
and architect.
· Greater potential for
local joint-venture · May be less incentive for
partner to share in cost control, depending
contractor overhead and on the structure of
profit. construction contract.
5. Developer Serves as · Developer has ongoing · May be difficult to find a
Property Manager interest in property developer/property
management and manager with capacity to
. maintenance and will be manage properties in
more concerned about Poway.
developing a project that
is efficient to maintain.
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C. DEVELOPER SELECTION CRITERIA
Developer selection should be based on the following criteria:
1. Track Record
. The developer should have a demonstrated track record in affordable
rental housing development and experience with the financing sources
proposed.
The review of the developer's track should include the number of projects completed, size
of projects completed (number of units), type of product/construction, and financing
sources used. Prior experience with proposed fundin~ sources is one of the criteria
considered in the allocation process for many non-local undin~ sources (i.e. tax credits,
HUD 202). The developer's track record and experience shou d be compared with and
matched as closely as possible to the characteristics of the project to be developed.
If the developer is being considered also as general contractor for the project, the A~ency
should review the candidate's track record as a general contractor, including qua ity of
construction, cost on a Jer square foot basis for comparable product type, ability to stay
on time and budget, an whether they have worked as owner/contractor before. Capable
developers are not always capable general contractors. Qualifications for the two
functions should be evaluated separately.
If the developer candidate is being considered also to manage the property, the Agen~
should review the quality and expense of property management services provided, as we I
as experience with affordability restrictions, marketing, fair housing, lease-up, resident
associations and reporting requirements associated with proposed financing source(s)
Capable developers are not always capable property managers. Qualifications for the two
functions should be evaluated separately.
2. Capacity
The developer should have both the financial and staff capacity to develop
the project.
Financial capacity refers to the amount of developer's net worth and the developer's ability
to use this net worth to provide personal construction financing guarantees for the project.
This means the developer must have sufficient net worth that is not otherwise committed
for the two to three year period, or longer, that the developer will need to remain available
to provide financial guarantees. The developer's pipeline of projects should also be
evaluated to determine the near-term availability of net worth.
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If the project is financed with Low Income Housing Tax Credits, the developer must meet a
net worth requirement equal to 10% of equity raised. If the developer does not stay as
general partner or the long term, a replacement sponsor must be found that meets the 10%
net worth lest. Alternatively, the Agency could provide a letter of credit to satisfy the net
worth requirement, although we would consider this a less desirable option.
The developer's capacity to adequatelh staff the project also should be evaluated,
including the number of projects on whic the developer is currently working, the percent
of the principal(s)' time that will be spent on the project, and the experience and
availability of other staff to assist during development.
3. References
. The developer should provide references corroborating track record,
capacity and character.
The Agency should closely review the developers' references through personal and/or
telephone interviews. The reference list should include previous project owners and
general partners, City plannineuilding staff and Redevelopment Agency staff in locations
where the developer has wor ed, subcontractors, architects, attorneys and bank/financial
references. Reference checks provide invaluable information on past performance,
reflecting the developer's ability to perform on-budget, on-time and to complete a quality
project without liens or judgements. References may also provide information on the
developer's character, integrity and ability to be a "team" player and resolve disputes
efficiently and expeditiously. Agency staff may want to visit prior projects to get a first-
hand view of development quality and how well the projects have aged.
4. Expense
The developer should demonstrate ability to provide a quality project at a
reasonable cost.
The developer candidates should be asked to provide actual cost data on recently
completed comparable projects. In addition, the Afency can ask for preliminary estimates
of hard costs per square foot, based on a genera description of the project's size and
construction type, soft costs, and the percentage basis and dollar cah, if any, for the
developer fee. Proposed cost-containment measures should also be eva uated.
If the developer md' also serve as the general contractor, pr10sed costs for contractor
overhead, profit an general requirements should be evaluate as well. If the developer
may also serve as property manager, current management fees should be reviewed in
comparison with industry standards.
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5. Willingness to Abide by City Priorities
The developer should be willing to agree to City and Agency requirements
and priorities.
These include willingness to comply with local design standards, management structures
ensuring long-term quality maintenance of the project and affordability restrictions which
go beyond the requirements of the funding sources used (e.g. permanent affordability).
Other examples of hotential local priorities include the the developer's willingness to
transfer the owners ip and/or management of the development to another entity in the
future.
6. Construction Management Services
The developer should be willing to accept responsibility for delivering the
product on time and on budget.
The Agency and developer should discuss the type of construction and cost control
management processes to be used. "Value engineering" during construction can identify
areas where costs can be saved while maintaining project quality. Some developers have
- adequate in-house construction management and value e1ineering capacity. In other
cases, the 1ency may require the developer to hire a thir party construction manager
responsible or value engineering and ensuring that the contractor builds the projects per
plans and specifications. The Agency should explore incentives for cost savings and
penalties for time overruns, while providng for the quality and long-term maintenance of
project .
7. Comfort Level
The Agency should feel comfortable with the developer.
Since the Agency will be working closely with the developer for several years, the client's
level of comfort and trust in the developer is important. This comfort level is best
determined through personal interviews and reference checks.
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D. DEVELOPER SELECTION PROCESS OPTIONS
Below we describe several optional processes for selecting a developer for affordable
housing sites in Poway. The primary advantages and disadvantages of these options are
summarized in Table 2.
1. Sole Source Candidate
The first process option involves identifying a single experienced developer and
conducting due diligence to evaluate their track record, capacity and references. The
prime advantage of this method is that it is quick, efficient and requires less Agency time
and expense than other options. A potential disadvantage is that the Agency md; wonder
whether it is getting the best possible candidate and deal. In addition, if eveloper
candidates know they are in competition with others, they may be more responsive to
cost. However, these disadvantages may be mitigated by consultant review of the
developer's qualifications and cost proposal in comparison with industry standards.
2. Request for Qualifications, Pre-Screened Experienced Developers
In the second option, Agency staff pre-screen a list of potential developer candidates and
select five or six highly qualified candidates to receive a Request for Qualifications. The
RFQ asks developers to provide information relating to each of the developer selection
criteria listed above. Typically, the written submissions are evaluated and then the top
candidates are interviewed before a final selection is made.
The primary advantage of the RFQ approach is that it widens the range of candidates
under consideration, while pre-screening assures that all of the candidates are
fundamentally qualified. The competition created through the RFQ process may also
make the developer candidates more responsive to cost than they would be if approached
on a sole-source basis.
3. Two-Stage RFQ/RFP Process
In a two stage Request for Qualifications/Request for Proposals process, an open RFQ is
issued requesting general statements of qualifications from firms and or~anizations wishing
to apply. Responses are then evaluated to select a smaller list of qua ified candidates to
receive the RFP. The RFP then requests a more detailed response addressin~ the
developer selection criteria discussed above. Then, as in Option 2, the proposa s are
evaluated and the top candidates are interviewed before a final selection is made.
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The rimary advantage of the two-stage RFQ/RFP approach is that it opens the process up
to al developers wishing to apply. At the same time, limiting the number of firms receiving
the RFP focuses the more intensive due diligence effort on the most qualified firms.
Disadvantages of this option are an increase in the amount of effort required to review a
lar&er number of responses and in the amount of time required to complete the two-step
review process.
4. Design/Build Competition
In a des1n competition, the architect for a project is selected through an evaluation of
propose designs. A designlbuild competition goes a step further and selects both the
architect and the development team to build the project.
Design and designlbuild competitions are useful in communities where the competitive
process can be used to generate needed community support for affordable housin~
Disadvantages include the high cost of assembling a team and preparing submittals whic
prohibits many develo~ers from entering, therefore limiting the response. The nature of
the competition also imits the interaction between the Agency, developer, architect,
general contractor and property manaJer during the design process and may result in
projects that are more costly to build an maintain.
- 5. Experienced Developer Candidate in Joint Venture with Local Nonprofit
The fourth option involves selection of an e~erienced developer candidate through
Options 1 through 4 above to joint venture wi a less experienced local nonprofit also
selected through Options 1, 2 or 3. Advantages include the potential to build local
nonprofit capacity and experience while keeping a portion of the developer fee in the local
economy for use on future affordable housing projects in the area. Primary disadvantages
include the added time and expense required to select the two development partners,
negotiate the terms of the joint venture agreement, and complete added document
requirements. In addition, the joint venture must be carefully structured to ensure that the
local nonprofit partner adequately benefits from the relationship, both financially and in
terms of increasing the local nonprofit's capacity to develop future projects on their own.
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Table 2
DEVELOPER SELECTION PROCESS OPTIONS
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Developer Selection Advantal!es
Ootion Disadvanta2es
1. Due Diligence on Sole Fast; efficient; less Client may feel they're not
Source Developer expensive in terms of getting the best possible
Candidate Agency time required. candidate/deal. With
competition, developer
may be more sensitive to
cost.
2. Request for Provides wider range of Requires more time and
Qualifications to Pre- candidates for client expense than sole source;
Screened Developer consideration and pre-screening may
Candidates comparison; competition overlook possible
may increase developer candidates
responsiveness to cost.
.
3. Two-Stage Request for Opens process up to all Two-step process requires
Qualifications/Request developers wishing to more time and expense
for Proposals apply than sole source or RFQ to
pre-screened candidates
4. Design/Build Can be useful in High cost to prepare
Competition generating support for submittals may limit
affordable housing response; resulting project
may be more costly, or
infeasible, to build
5. Joint Venture Between Has the potential to build Generally more expensive
Experienced Developer local capacity and keep and time consuming. In
Candidate and local developer fee revenues in some cases, the capacity
Nonprofit the local area. of the local nonprofit is not
substantially increased.
. May be difficult in locating
local nonprofit with
capacity to joint venture.
10
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E. CONSULTANT RECOMMENDATION AND TIMELlNE
The consultant recommends the Agency use a two-stage RFQ/RFP process to select an
affordable housing developer for the Bowron Road site. The two-stage format opens the
process to all interested developers while allowing the Agency to focus detailed due
dil~ence efforts on the most qualified candidates selected to receive the RFP. We consider
wi ening the range of candidates worth the additional time and effort to evaluate the two
sets of responses.
We recommend that a subcommittee of two to three members of the Redevelopment and
Housing Advisory Committee be established to assist in the review of qualificationsl
proposals and to participate in interviewing finalists. This approach will ensure Committee
involvement while maintaining a time-efficient process.
For subsequent sites, the Agency may choose not to repeat the first-stage RFQ, rather
selecting a list of candidates to receive an RFP from prior submittals.
.
We estimate the recommended two-stage RFQ/RFP selection process can be completed
in approximately six to seven months, according to the draft timeline presented in Table 3.
.
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Developer Selection Criteria and Selection Process Options
February 13, 1995 Page 11
19 of 23 JUL 11 1995 ITEM 11 4
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'-. DAVID PAUL ROSEN & ASSOCIATES
Table 3
.
ESTIMATED TIMELlNE FOR TWO-STAGE
DEVELOPER RFQ/RFP SELECTION PROCESS
Cumulative TIme
TIme to Complete Task to Con,plete Process
Prepare RFQ 2 weeks 2 weeks
Developers Respond to RFQ 3 weeks 5 weeks
Review Qualifications!
Select Developers to Receive RFP/
Prepare RFP 5 weeks 10 weeks
Developers Respond to RFP 3 weeks 1 3 weeks
Perform Due Diligence
and Reference Checks 4 weeks 1 7 weeks
Review Proposals/
Select Finalists for Interviews 3 weeks 20 weeks
Conduct InterviewslSite Visits 4 weeks 24 weeks
Prepare Staff Report
Agency/Council Action 4 weeks About 7 months
.
Developer Selection Criteria and Selection Process Options
February 13, 1995 Page 1 2
20 of 23 JUL 11 1995 ITEM 11 1
.- ~ACHMENT B -
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June 6, 1995
To: Mr. Warren Shafer, Ms. Pamela Colby
From: Mr. David Rosen, Ms. Nora Lake-Brown
Subject: June 12, 1995 Redevelopment and Housing Advisory Committee Meeting
Affordable Housing Development Process and Advisory Committee Role
Agenda Item 4
One agenda topic for the June 12, 1995 meeting is a review of the development process
and the Committee's role in affordable housing site development.
Attachment 1 summarizes the steps of the development process. This process
incorporates the recommendations of staff and the Committee for a two-stage developer
- selection process involving an open RFQ followed by a limited RFP to selected developer
candidates. Developer selection process options were discussed at the February 13, 1995
Committee meeting and are described in DRA's report to the Redevelopment Agency of
the same date. Subsequent to developer selection, the architect/civil engineer and
property manager would be selected in conjunction with the developer through similar
two-step processes. Selection of the architect/civil engineer and property manager could
occur concurrently.
The process in Attachment 1 assumes a competitive bid process for selecting the general
contractor, conducted after completion of the architectural (working) drawings for the
project. An alternative to the competitive bid is the negotiated bid. One advantage of the
negotiated bid is that the contractor can be selected earlier in the process (e.g. along with
the architect and property manager) and the design and cost of the project can benefit from
the contractor's experience. In DRA's experience, the negotiated bid is also less expensive
than the competitive bid.
DRA recommends the Committee's role in the development process be focused at the
following key decision points:
. one to three representatives of the Committee on interview panels to select
developer finalists for each site;
. one to three Committee members on interview panels to select architect
finalists for each site;
. Committee as a whole participates in community design workshops
- required of architects for developments on each site.
JUll11995 ITEM 11 I
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Attachment 1
STEPS IN A A RECOMMENDED DEVelOPMENT PROCESS
1. Select Developer/Financial Partner
a. Issue Developer RFQ (Open)
b. Issue Developer RFP (3 to 5 Participants)
c. Interview Selected Developer Candidates
d. Select Developer/Negotiate Development Agreement
2. Select Architect/Civil Engineer
a. Issue Architect RFQ (Open)
b. Issue Architect RFP (3 to 5 Participants)
c. Interview Selected Architect Candidates
d. Select Architect/Negotiate Contract
3. Select Property Manager
a. Issue Property Manager RFQ (Open)
b. Issue Property Manager RFP (3 to 5 Participants)
c. Interview Selected Property Manager Candidates
d. Select Prof:'erty Manager/Negotiate Contract
4. Conduct Community Design Workshops
5. Prepare Specific Plan
6. Analyze Financial Feasibility/Structure Financing
7. Secure Financing
8. Complete Working Drawings
9. Select Contractor (Competitive Bid)
10. Secure Permits and Approvals
11. Construction
12. Lease-Up
13. Manage and Operate
JUL11 1995 ITEM 11 .
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ATTACHMENT C
STEPS IN THE RECOMMENDED DEVELOPMENT PROCESS
1. Select Developer/Financial Partner
a. Issue Developer RFQ (Open process)
b. Issue Developer RFP (limited to 3 - 5 Participants)
c. Interview Selected Developer Candidates
d. Select Developer/Negotiate Development Agreement
e. Select General Contractor
1) Identify General Contractor(s)
2) Interview General Contractor(s)
3) Select General Contractor/Negotiate Agreement
f. Redevelopment Agency approval of Developer/General Contractor
2. Select Architect/Civil Engineer
a. Issue Architect RFQ (Open process)
b. Issue Architect RFP (3 to 5 Participants)
c. Interview Selected Architect Candidates
- d. Select Architect/Negotiate Contract
e. Redevelopment Agency approval of Architect/Civil/Engineer
3. Select Property Manager
a. Issue Property Manager RFQ (Open Process)
b. Issue Property Manager RFP (3 to 5 Participants)
c. Interview Selected Property Manager Candidates
d. Select Property Manager/Negotiate Contract
e. Redevelopment Agency approval of Property Manager
4. Conduct Community Design Workshops
5. Prepare Specific Plan
6. Analyze Financial Feasibility/Structure Financing
7. Secure Financing
8. Complete Working Drawings
9. Secure Permits and Approvals
10. Construction
11. Lease-Up
12. Manage and Operate
JUL 11 1995 ITEM 11
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