Defining, Developing and Delivering the Vision Strategic Educational Facilities Development

Defining, Developing and Delivering the Vision

Strategic Educational Facilities

Development

Developer led Turnkey Lease-Purchase Project Delivery Program

TAX EXEMPT turnkey lease purchase project delivery is the best way for School Districts, Colleges and Universities to acquire critical education, recreation and administration facilities.

Developer Led Turnkey Lease-Purchase Project Delivery Program

BETTER THAN Pay as you go General Obligation Bond Financing Private (taxable) lease-lease back Design-Bid-Build Construction Manager at-risk Design-Build

What You Will Learn in this Presentation

The advantages of the developer-led tax exempt lease purchase project delivery process

How the process works Case studies of successful projects Overview of enabling legislation

Swisher Garfield Traub Development

Stephen Swisher, AIA- Principal, Las Vegas Office 30 years of industry experience architecture & development Educational facilities and sustainable design expertise Leads Programming, Planning and Design consultant team

Raymond Garfield Jr.- Principal, Dallas Office 30 years of experience in development, finance and asset

management of all property types Extensive Wall Street background, focusing on working with

investment banking partners to create innovative financing structures.

Jill K. Sweeney- Principal of Brownstein/ Hyatt/ Farber/Schreck Leads the Public Finance Group of B/H/F/S Focused practice on government finance law, economic

development and state tax incentive law, government relations and securities law

Serves as bond counsel for the New Mexico Finance Authority, New Mexico Board of Finance, the University of New Mexico and the City of Albuquerque

Swisher Garfield Traub Development

National Developer of essential facilities for PUBLIC SECTOR clients

Specializes in TAX-EXEMPT turnkey lease-purchase project delivery

Over $2 billion tax-exempt public/private lease-purchase developments in progress or recently completed

More than 30 years, $11 billion and 27 million square feet of development and finance experience with all property types

Tax Exempt Turnkey Lease Purchase Project Delivery Program Benefits

Fastest Project Delivery Lowest cost of ownership Maximum owner control Highest degree of

collaboration

Tax-Exempt Turnkey Lease Purchase Project Delivery Program Benefits

Fastest Project Delivery No Public Referendum required Developer led team can establish GMAX and

break ground 1 year sooner No separate selection process for architect or

“bridging” architect Concurrent contractor pricing eliminates time

and expense for re-bidding Allows for faster “fast track” delivery and

close-out Alignment of interests speeds completion Eliminates delay claims, RFI games and

change orders

Project Delivery Methods


Lowest Cost of Ownership Financing costs competitive with general

obligation bond rates Earlier start saves construction inflation Earlier completion saves on modular costs Minimizes owner facility staffing (owner

doesn’t have to “referee”) Lease can include maintenance or capital

replacement reserve

Impact Delay of Costs

Project Financing

Total Occupancy Cost Comparison

But if you start 1 year sooner….

*Includes 8% cost escalation and modular unit rental cost


Maximum Owner Control Non-profit beneficial “owner” is the

government entity, school district, college or university

Open book transparent process Review competitive pricing of

construction line items Real time pricing and life cycle cost

analysis Single source of responsibility

Financing/Ownership and Flow of Funds


Highest degree of Collaboration Fully integrated team Single source of responsibility Project-type and “industry”

expertise LEED experience Alignment of interests

Developer-Led Turnkey Project Delivery: Integrated Team

Owner holds single contract for Developer, A/E and Construction

Highest Degree of Teamwork

Qualifications based selection; negotiated fee

Subcontractors typically are competitively bid

Enables fast-track construction

GMP early in the design process

OW NER

M A STER DEVELOPER

A RCHITECT/ENGINEER CONSTRUCTION

s

s

s

s

OW NER

M A STER DEVELOPER

A RCHITECT/ENGINEER CONSTRUCTION

s

s

s

s

Development Process

Part I- Strategic Development Vision Plan Define scope, program, LEED goals, budget

and schedule Identify, engage and activate consultant and

contractor team, executive working group and stakeholders.

Site analysis and investigation, acquisition plan, survey and title report

Plan of Finance Masterplan and conceptual design Implementation plan Owner approval- GO/ NO-GO

Development Process

Part II- Pre-Development Phase Establish non-profit SPE as a master

ground lessee and borrower Specific physical design to establish

G.M.P Perfect entitlements and agency

approvals Complete financing and site acquisiton Mobilization

Development Process

Part III- Construction Phase Services

Owners representative during construction

Manage commissioning and start up Manage project close-out

Part IV- Post Construction Services Asset Management

Los Angeles Unified School District Primary Centers

- Los Angeles, California

Garfield Traub developed 7 primary schools and a recreation center for the Los Angeles Unified School District at a total cost of $64,576,479, averaging $7 million per school

All eight projects were completed by using an innovative development structure that substantially shorten the delivery time for these essential facilities

The district will make progress payments over the course of construction and will own the schools upon completion

This primary school development program enhances the concept of neighborhood schools for economically challenged areas in the center city and helps to foster family involvement

College of Southern NevadaNorthwest Campus- Las Vegas, Nevada

60-acre mixed-use academic urban village.

Ground floor retail and private uses to support classroom and administrative space on upper levels

Tax-exempt lease-purchase financing and design-build project delivery

1.8 million SF of mixed-use space to include Classroom Laboratory space Support Services Faculty Housing Lifestyle Retail Hotel and Conference

Center Training environments

for students

Durham Performing Arts Center with Duke University

Durham, NC $44.3 million, 2,800-seat

performing arts center Public/private partnership

sponsored by the City of Durham with support from Duke University

Capital structure includes COPs financing secured by an installment purchase agreement

City will make annually appropriated payments supported by a portion of Citywide hotel occupancy tax receipts in addition to naming rights revenue and other sources

To be operated by Professional Facilities Management in partnership with Nederlander Producing Company of America, the number one operator/producer of Broadway entertainment

Operator will guarantee a minimum of 100 event performances per year, will take risk of operating deficits and will split annual operating surpluses with the City

Delivery pursuant to GMAX contract

City will own facility at end of financing term

New York State DOT Region 1 HeadquartersSchenectady, NY

Essential $21M, 125,000 SF facility for State

Part of City revitalization program Delivery method streamlined public

procurement process while still taking advantage of low-cost tax-exempt financing

One tax-exempt variable-rate certificate was placed with one investor (initial rate of 2.35% at funding)

Annual appropriation from State for rent

Garfield Traub Development served as developer

Design-build delivery pursuant to GMAX contract

Delivered on time and under budget State will own facility at end of lease

term

Hotel and Conference Center at Texas Tech University

Lubbock, Texas

$66.2 M first class, full-service hotel conference center

Public/Private Partnership with the City of Lubbock

Adjacent to Texas Tech University/ Jones Stadium

Exclusive agreement with Texas Tech Hospitality Program (RHIM) for laboratory experience and intern program 304 rooms 236,000 SF excluding parking 3-meal restaurant and

adjacent bar Fitness center and outdoor

pool 24-hour business center 17,250 net SF for function

space

Washoe County Public Safety Training Facility

Reno, Nevada

Essential $17M Facility for County County needed existing funds for flood

control County needed ability to occupy and

control space without incurring additional debt

Creative turnkey approach allowed County to keep control of the facility under lease-purchase delivery

Funded through non-recourse lease-revenue bonds

Rent payments are offset to the extent that space is leased to other municipal entities with space needs

Project was delivered ahead of schedule and under budget by Garfield Traub Development

100% of budget savings were returned to County to purchase additional burn props

County will own facility at end of lease term

Master Developer Turnkey Delivery Summary

TAX EXEMPT Owner controls project through tax-exempt entity

Interest cost 35% lower than conventional financing

FEE ONLY developer

NO sales or property tax

Open book/ GMAX contract/design-build process

School District receives beneficial ownership of project from day one and NO BUYOUT at end

Developer provides single source of responsibility

Fastest start and delivery - no bridging documents phase required

Enabling Legislation Overview

Background Article IX, Section 11 of the New Mexico

Constitution New Mexico Supreme Court decision:

Montaño v. Gaboldon, 108 N.M. 94, 76 P.2d 1328 (1989)

November 2006 Amendment to Article IX, Section 11 of the New Mexico Constitution

2007 Legislature enacts the Public School Lease Purchase Act, Sections 22-26A-1 through 22-26A-20 NMSA 1978


Public School Lease Purchase Act Lease Purchase Arrangements

Definition of a lease purchase arrangement Mandatory and permissive lease purchase

arrangement terms Sources of repayment for lease purchase

arrangements Required local school board actions


Public School Capital Outlay Council Assistance

Lease purchase payment grant assistance Purchases of privately owned school facilities

by public school districts

Contact Information

Swisher Garfield Traub DevelopmentStephen Swisher, AIA

2821 W. Horizon Ridge ParkwaySuite 221

Henderson, NV 89052702-241-8352

702-227-7191 [email protected]

Brownstein/Hyatt/Farber/SchreckJill K. Sweeney

201 Third Street NWSuite 1700

Albuquerque, New Mexico 87102-4386505-244-0770

505-244-9266 [email protected]

mailto:[email protected]

Documents

Defining, Developing and Delivering the Vision Strategic Educational Facilities Development