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Home My WebLink About1998-10-15 Business Park Advisory Committee MinutesREADING BUSINESS PARK ADVISORY COMMITTEE MINUTES October 15, 1998; 7:15 p.m., Reading Municipal Light Department Conference Room Committee members present: Bob Lelacheur, Don Stroeble, George Hines, Dick McDonald, Bob Nordstrand, David Nugent, Neil Sullivan, Mike Flammia, John Coote. Staff present: Lisa Smith (Grubb & Ellis), Jack Kerrigan (Grubb & Ellis), Mike McGonigle (Grubb & Ellis), Assistant Town Manager Russell Dean, Town Manager Peter Hechenbleikner. Others present: Sharon Wilke, Mark Dickinson, Michael Hass, James Gray, Bill O'Brien, Bill Roache, John Kelley, Ed Shaw, Fred Van Magness, Carl Pendexter, Paul Feely, Camille Anthony, Anthony Tambone, William Butler, Bill Blackham, Doug Walker, Mark Zaruillo, Brian Lawler, Raymond Talkington, John Amato, Frederick Zell, David Valletta, Kevin MacNeill, Christopher Murray, Joseph Nigro, Dan Goodenow, Nick Mucci, Alan Perrault, Brandon J. Fagan, Pete Pederson, Bill Locke. The meeting was called to order by George Hines at 7:15 p.m. Chairman Hines outlined the meeting. There would be four interviews with four developers: Dickinson Development, Corporex, 3JMA LLC, and Locke/Cashman /Thurmo. Interviews were to be 20 minutes for presentation, 25 minutes for question and answer for a total of 45 minutes per interview. Interviewees, as had been prior practice, were asked to respect the other developers by not sitting in on their interviews. Dickinson Development Mark Dickinson presented principals associated with the project. Dickinson noted the following: there is an 80% commitment from tenants, 18 million in revenue to be realized by Town (over 10 year period), comparatively low water use, over 1000 jobs of mixed wages, and the project is extremely viable. Closure and capping to be done by August 1999. Committee Questions Q: Assuming permits are issued, how soon can Dickinson "close deal?" A: As soon as negotiations are completed with Town. Q: Why does Dickinson feel a Notice of Project Change filing with DEP is necessary? A: The hotel is permitted, however mixed use constitutes enough change to warrant a signoff from MEPA. Q: What will ownership structure be? A: For Staybridge piece, Staybridge would own. For Applebee's piece, Dickinson would own. Office building may be a few months behind. A concern was expressed regarding whether the office piece of the project would get built. Dickinson said foundation of the office building would be in place during construction. Q: Are there examples of similar mixed uses? A: Dedham, South Shore Plaza. Assembly Square in Somerville (Sony Theatres). Q: What type of tenants would be sought for office building? A: High tech start up computer companies, Developer (main offices), service units, goal to be competitive on office space. Premium on foundation; will build foundation with intent to build office park. Q: Cinema size? Is this maximum parking for Showcase? A: Calculated at 1 parking space per 3 seats - ideal is 1,100 parking spaces. Dickinson mentioned that materials to be delivered to site came straight out of the due diligence report but were not absolutely required. Once permits are firmed up closing can be done in two weeks. Cash flow - 2 million once l s' COO is given, 1 million once COO given on office building Town can impose deadlines to ensure payment. Cinema will be similar to Randolph - state of the art "stadium" seating. Q: Is 1 million the cap on site improvements? A: This is the estimate. Concern expressed about Town not receiving the 2 million payment if 1,000,000 is exceeded in site improvement costs. Concern about office building - commitment on 1,000,000 payment contingent upon COO issued for office building. Q: What is transition process on landfill closure and capping? A: Will be some transition on agreements, minimal additional costs wrapping up the transition. Corporexx • Represented that Corporex could do the three projects at once; • Two internal hotel management companies ("Do it Yourself.") • Concept of "high touch." • 3/4/5,000 initiation fee on sports club, dues are lower. • Traditional developer - "Own and Operate." • Ground lease - annual rent of $100,000 • Q: Will lease be subordinated? A: No. • No tax concessions have been requested - owner leasing will pay taxes on the property. • Q: Does "old fashioned" approach limit ability to build? Answer yes. Investment in product. • Sell industrial portfolios - leaving industrial development market for 5 Seasons/Hotel area • Represented "Very Large" asset capitalization • Amesbury landfill - residential experience • Lynn Classical High School - on construction landfill • Many persons have engineering disciplines - cites San Francisco example • Office building would be two towers; can do both at one time or one at a time - function of market conditions • Problems siting on landfill? A: No. No different than other public buildings. Cannot penetrate cover - do not anticipate any problems. • Commit to 2/3 plus office building. Every building commenced concurrently. • Last project was Four Seasons/ Exchange Place • Northeast experience: 1988, 1989 office buildings • Billerica - Homewood Suites development of 150 rooms • Sports Club: 80% of members come from 5 mile radius • Q: Schedule. How soon closing? How soon revenues realized from project? A: Revenues controlled by permitting on property. Town controlling permitting. Do we control closure process? Intent is to close and cap but work closely with the Town. 3JMA LLC CBA - Financial, Environmental Senior Housing - PRD - eliminate hazardous waste Eliminate risk and liability Mixed use commercial/ residential Heavy emphasis on quality of life Dan Goodenow - Cape Ann Design 110 units - townhomes "Greenbelt" plus office space on approach toward town By removing landfill, no concern of monitoring or monitoring of groundwater. Beautify Town; environmental benefits. Take away site versus capping Buffers, greenspace, community friendly Project of this magnitude that has been completed. Valletta - Swamp Pond project in Walpole. Revere Airport, etc., Weston. Maynard, MA - Old Digital building Financing Private equity (principals) Pension Fund Investments Typical investor is "university." When is commercial portion due? Q: Landfill mining - How much would be removed? A: 50 - 70% is dirt; the rest is MSW; 30% to other landfill (total 50% removed) Q: More costly than capping? A: Slightly, but benefit is landfill is gone. Q: Timing of mining? A: 1100 to 2000 yards per day; 300,000/2-4,000, 6 to 8 months to completely remove landfill; 3 year sellout period on development. Bulk of refuse in back of site - perform site preparation in front - move things (ash) to the back. Will build commercial component if economy is strong. Office building a function of the economy Serious investment in property - timeline of movement - surety bond. Approach to landfill/ transition Town finishing CSA - in closure analysis will put in place alternatives (such as landfill mining) in final reports to DEP. Get rid of environmental "time bomb." Office component a question. Q:(Intention?) l/ 1/99 - What do we do with our consultants? 3JMA LLC will take over permitting process from Town and deal with the DEP. Locke/ Cashman/ Thurmo Committee Questions Q: Why office? A: Long term with visibility of site - benefit to go office. Site will attract users. Office buildings get built when tenants are found. Q: Why only offering $1 for landfill? A: Market value. Burlington - Newton corridor paying $35/40 per square foot range for office space. Zuckerman paid $50 per square foot. Locke/Cashman /Thurmo believes to make project work need to operate and offer in the $25 per square foot range. Cap for $5 million and then sell to Marriott for 2 to 2.5 million. All off-site improvements will be borne by Locke/Cashman /Thurmo per the due diligence report. July '99 relieving Town of capping process - "shovel in ground." 2003 - Selling Transition Plan Transfer Site investigation - assumption of contracts may be explored Lending - direct connections to consultants 2 - 3 months for design. Consultants are released - Locke/Cashman /Thurmo Meet at 7:15 p.m. on 10/21/1998 Hour blocks October 28, 1998 as next date. Meeting adjourned at 11:15 p.m. Russell J. Dean, Asst. Town Manager