HomeMy WebLinkAbout1998-10-21 Business Park Advisory Committee MinutesREADING BUSINESS PARK ADVISORY COMMITTEE MINUTES
October 21, 1998; 7:15 p.m., Town Hall Conference Room
Committee members present:: Bob Lelacheur, Don Stroeble, George
Hines, Dick McDonald, Bob Nordstrand, David Nugent, Neil Sullivan,
John Coote.
Absent: Mike Flammia.
Staff present: Lisa Smith (Grubb 8s Ellis), Jack Kerrigan (Grubb & Ellis),
Mike McGonigle (Grubb 8, Ellis), Assistant Town Manager Russell Dean,
Town Manager Peter Hechenbleikner.
The meeting was called to order by George Hines at 7:15 p.m.
It was confirmed that the next
Wednesday, October 28, 1998,
Department AV Room at 7:30 p.m.
meeting of the RBPAC would be
at the Reading Municipal Light
The Committee next reviewed the evaluation process. Chairman Hines
indicated the Assistant Town Manager had put together an evaluation
sheet to evaluate each proposal. The Committee now has information
compiled by staff and interviews in order to do their ratings. These
should be finished and returned to Russell Dean no later than Monday,
October 26, 1998. The criteria were reviewed which were the same
criteria used in the RFP, however regrouped to eliminate redundancies
into five factors: Financial, Financial-Developer, Regulatory, Experience,
Maintenance, and Personnel. It was noted that the Committee would
assign a rating to each criteria of "Highly Advantageous,"
"Advantageous," "Not Advantageous," and "Unacceptable." The staff
analysis and Grubb & Ellis commentary would be used as a guide, as
well as the proposals themselves and additional information gleaned
from the interview process and question and answer.
The Assistant Town Manager will compile the information.
Committee member
Nugent
asked if this
evaluation would be
"unchangeable." It
was noted
that this was
not the case, that the
Committee members
would go
through the ex
ercise and then meet to
discuss the results.
Perhaps
one committee
member could convince
another to change his rating.
Some criteria a
re subjective, which will
require a group cons
ensus on which proposal
is most advantageous to
the Town.
The evening's interviews then commenced.
Lincoln Properties, Inc.
Bob McCullough from Lincoln Properties was present and introduced the
Lincoln team: Chris Todd from GZA, environmental consultant, was
present.
McCullough indicated he thought Lincoln's proposal was most
advantageous for the following reasons:
• EQR - REIT funding and low cost of capital;
• If the Town was looking for return on investment, this proposal would
minimize traffic impacts;
• As a revenue generator, commercial group at LPC is interested in the
hotel component.
• Negligible impacts on the school system;
• Catering to the "preference tenant," i.e., one who can afford to buy but
chooses not to because of the amenities of luxury apartment living.
• McCullough cited two developments: one in Quincy and Lincoln
Heights. Both had extremely low percentages of school aged children
compared to the overall population of the complex. In some instances
numbers were quoted as less than 1%.
• McCullough noted the importance of his proposal which "spread risk."
Also, high rents and high occupancy rates were noted.
• Starwood Hotel: would serve business travelers, not a "sit down"
restaurant. Geared toward IT professionals who would stay 2-5 days.
• Discussion of landfill particulars.
Question and Answer
Q: What would be the size and mix of units?
A: 660 sq ft to 1250 sq ft. All would be 2BR, 2BA units to maximize
privacy and ensure professional occupancy. Guestimate of the Boston
market would be renting at 1.40 to 1.60 per square foot. In Virginia,
rents at about 1.10 per square foot. High income use would offset high
cost of construction. Tenants would live at LPC complex for services -
luxury apartments. There would be no sharing in the 2BR, 2BA units.
Residential will lead the project then hotel, then office. Design of the cap
will be consistent with the design of the foundation.
Q: Does product conflict with what is being developed in Woburn?
A: Star-wood has expressed in interest in the site. Familiar, knows site,
LPC feels good about level of interest. Word from the commercial and
office group was that they did not want to go with 600,000 square feet of
development. Lincoln has been charged with implementing 1.2billion of
new development.
Q: Is there 'a commitment from equity? A commitment from Starwood?
A: Investment committee process has to be followed; has to be a joint
venture on any project.
. ' ~Q: Assuming closing on property, when would town receive its money?
A: 1/20/00 is the date of the 7.65million
A discussion ensued on closure and capping. It was noted Lincoln had
made a change and Chairman Hines advised that this was not permitted;
that the committee could only evaluate Lincoln on the original proposal,
which maintained the Town would close and cap the landfill.
Q: Town of Reading mandates 10% affordable housing. Would the
Lincoln proposal meet this requirement?
A: In Maryland, mandates are 12%, in Virginia, 10%. Incomes are high
enough in Boston that Lincoln can make money with their affordable
units. Does not believe this will be a problem.
Q: What are Lincoln's assumptions for off-site mitigation?
A: This was addressed in the proposal - what was required by the due
diligence report would be met by Lincoln and is included in the proposal
price.
Q: Is Lincoln stuck with a 1-1-1 approach or could it re-evaluate to
develop in a different order?
A: There is some adaptability but not on the office/hotel component -
these would have to -built in separate phases.
Leach Family Holdings
60 year old company; went over Stratford, CT superfund site developed
as a primarily retail site.
- Reference made to Beacon Mutual Insurance building where Leach
was selected as developer.
- Bob. Hoffman gave overview of team approach to landfill closure and
capping. Discussion about engineering solution. Site stabilization;
cap design; talk about grading, parking lot issues, design of building
piles, etc..
- Storm septic type units instead of detention ponds.
- Bob Fairbanks from Parr Engineering. Reading site has similar issues
to Stratford site - "deep dynamic compaction" methodology discussed.
- Cap contouring etc.
- Reference made to Burlington Woods office park; number of "large"
tenants.
- Finard 8v Company will assist in development. Haven't yet picked a
flag hotel - perhaps Marriott.
- Single user retail, not strip.
Q: Development is "nebulous." What is it?
A: Can narrow it down for the committee if they would like. 240/250
{ rooms for the hotel. No reason to get a flag (hotel) - "anyone can do
\ that." Not concerned about finding users.
Q: Surface or structured parking?
A: Primarily surface with green space.
Q: Elaborate on type of retail development?
A: 130,000 square foot retailers consist of WalMart, Kmart, Target, BJs,
Loews Home Improvement. Have had working relationships with all of
these retailers.
Q: Describe a similar project developed by Leach.
A: Danbury, CT has office/retail component due to open on December
15, 1998.
Q: Procedure?
A: Capping would be done first, then each building would be built.
Phases are bulk of the project first, then office last.
Q: Clarify cost.
A: 10 million is the price. Town pays for the capping (4m) estimate. Cost
of capping borne by Town, according to Leach estimates, is 3.5m.
Q: How much budgeted in off site improvements?
A: 3 million on site, 3 million off site.
Q: How would landfill closure/capping be done?
A: Established budget as we did with EPA. EPA approved budget.
Interface of Leach and Town consultants. Turnkey approach with EPA.
Q: What are off site improvements?
A: Traffic/roads/ stormwater management.
Q: What happens if a walkaway occurs at 6 to 9 months?
A: 1St 6 or 9 months spent designing cap. At 6 month, 2 million would be
invested. After close on property, idea is to escrow money - design cap
and do capping "right way."
Q: Office market? Absorption rates?
A: Cites market, should absorb - expecting a mild recession but believes
tenancy will be maximized.
Q: What are office expectations?
A: Could get 3 commitments today for tenants for office building.
Q: On retail component, will "big box" be a guarantee?
A: Home Depot at 175,000 square feet, Loews, Kmart at 145,000, Wal
Mart at 150,000.
Q: Hotel component?
A: Leach would secure financing, Finard would operate. Example cited is
Marriott in Woburn.
Leach indicated he was vice chairman of the Providence planning
commission, and his familiarity with projects like the Providence Civic
Center plaza will assist him in the regulatory process regarding the
landfill.
Ed Callan
Explanation of process by George Hines.
Video presentation given by Callan on Edgewater. Video on Inwood
Office Park, Wakefield.
Market - landscaping and world class buildings; .
Callan builds quality because it will attract major clients;
MEPA report - cannot change because it creates legal problems.
Permitting/ Financing
Can do construction in 6 weeks once permitting is secured.
- Investment is $175 per square foot;
- Taxes created are of high significance;
- Has been successful;
- 15-20% less than Unicorn Park (rates)
- TRC has done 100 - plus landfills in New England and will partner
with Callan on the project.
- Callan has guaranteed the cost of capping at 3 million.
Q: How much lst class office space?
A: 600,000 plus and/or 500,000 square feet plus a hotel. Inwood will be
fully leased in 9-12 months. $17 per square foot versus $42 per square
foot in Boston.
Q: When will Inwood be complete?
A: If economy holds up, could absorb 280 - 300,000 square feet by end
of year. Buildings are custom designed for clients. Reading Business
Park would be designed in similar fashion.
Q: When would Town receive
A: Need 6 months to complete documentation - 90 days to closing.
Q: Off site improvements?
A: $200,000 plus TRC estimate of 3-4 million. Balance of 7 million
would revert to Town.
Inwood problems - have committed phase funding for remainder of
project.
Custom designing way to go.
Hotel: 4-5 star hotel
5-10% less than Burlington Marriott.
Flatley spent millions to pump up. Would give low land to hotel in order
to "subsidize" rest of project.
On standard questions due October 15, 1998:
Traffic flows - too tough to call.
Put all energies into financing and landfill study.
Has $185,000,000 in new development under construction.
Plan landfill closure - then build "pads."
AMRESCO will fund Callan on spec.
Land development on spec - but not building.
$7,000,000 for landfill;
Closure of landfill 3.5m to 4m could go to 5m
Between 3.5m and 5m
Off sites part of building costs.
Q: What is transition plan between town and developer?
A: TRC will take design that is created by the Town? Engineers will
mediate. TRC will work with Camp Dresser McKee.
Integrated design?
Flexible - Estimate includes permitting and design costs?
Q: How can foundations be laid prior to knowing what clients want?
15-20 acre "amenity"
- Greenbelt? Not like Inwood - natural beauty missing.
- Like Homart plan.
Will achieve 1.25 FAR based upon prior experience.
500,000 square feet will use 10 acres.
Bob Nordstrand motioned to adjourn at 10:30 p.m. Dave Nugent second.
Motion carried 8-0-0.