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Defining, Developing and Delivering the Vision Strategic Educational Facilities Development.

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Presentation on theme: "Defining, Developing and Delivering the Vision Strategic Educational Facilities Development."— Presentation transcript:

1 Defining, Developing and Delivering the Vision Strategic Educational Facilities Development

2 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.

3 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

4 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

5 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

6 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

7 Tax Exempt Turnkey Lease Purchase Project Delivery Program Benefits Fastest Project Delivery Lowest cost of ownership Maximum owner control Highest degree of collaboration

8 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

9 Project Delivery Methods

10 Tax-Exempt Turnkey Lease Purchase Project Delivery Program Benefits 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 doesnt have to referee) Lease can include maintenance or capital replacement reserve

11 Impact Delay of Costs

12 Project Financing

13 Total Occupancy Cost Comparison

14 But if you start 1 year sooner…. *Includes 8% cost escalation and modular unit rental cost

15 Tax-Exempt Turnkey Lease Purchase Project Delivery Program Benefits 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

16 Financing/Ownership and Flow of Funds

17 Tax-Exempt Turnkey Lease Purchase Project Delivery Program Benefits Highest degree of Collaboration Fully integrated team Single source of responsibility Project-type and industry expertise LEED experience Alignment of interests

18 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

19 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

20 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

21 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

22 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

23 College of Southern Nevada Northwest 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

24 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

25 New York State DOT Region 1 Headquarters Schenectady, 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

26 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

27 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

28 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

29 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

30 Enabling Legislation Overview 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

31 Enabling Legislation Overview Public School Capital Outlay Council Assistance Lease purchase payment grant assistance Purchases of privately owned school facilities by public school districts

32 Contact Information Swisher Garfield Traub Development Stephen Swisher, AIA 2821 W. Horizon Ridge Parkway Suite 221 Henderson, NV 89052 702-241-8352 702-227-7191 Fax Brownstein/Hyatt/Farber/Schreck Jill K. Sweeney 201 Third Street NW Suite 1700 Albuquerque, New Mexico 87102-4386 505-244-0770 505-244-9266 Fax

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