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HomeMy WebLinkAbout(4) EDC 501 PROCTER STREET, INC. REDEVELOPMENT PROJECT G E RM E R AUSTIN BEAUMONT HOUSTON www.germer.com A T T O R N E Y S AT LAW GUY N. GOODSON Principal Direct Dial: (409) 654 -6730 ggoodson @germer.com January 15, 2014 Members of City Council City of Port Arthur P.O. Box 1089 Port Arthur, Texas 77641 -1089 Re: City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC ") — 501 Procter Street, Inc. Dear Council Members: Enclosed for your review is the Guaranteed Maximum Price Amendment ( "Amendment ") from SpawGlass for the 501 Procter Street Redevelopment Project. The Guaranteed Maximum Price ( "GMP ") is $3,355,000.00. In the packet, SpawGlass provides a breakdown of the GMP, a line item break down of the cost of work, and a detailed timeline. As you remember, the City Council, per Resolution No. 13 -443, authorized PAEDC to enter into a Guaranteed Maximum Price Agreement with SpawGlass for the renovation of 501 Procter Street at a price not to exceed $3,355,000.00. Then, on October 4, 2013, PAEDC conveyed the building located at 501 Procter Street and assigned the Guaranteed Maximum Price Agreement to 501 Procter Street, Inc. as a part of the New Market Tax Credit Financing Transaction and on January 14, 2014, the Board of Directors of 501 Procter Street, Inc., approved the Guaranteed Maximum Price Amendment in the amount of $3,355,000.00. In the Amendment, SpawGlass specified items that were not included in the cost. Below is an explanation for some of the exclusions and other items you will see in the Amendment: 1. SpawGlass excluded Builders Risk Insurance from the Amendment because 501 Procter Street, Inc. through the Texas Municipal League is providing Builders Risk Insurance. This was a condition that 501 Procter Street, Inc. had to comply with as a part of the financing; 2. This is not a wage scale project because this project is not considered to be a public project. Although PAEDC will be the master tenant, the building is owned by 501 Procter Street, Inc., a non - public entity; GERMER PLLC 550 FANNIN SUITE 400 BEAUMONT, TX 77701 Or P.O. BOX 4915 BEAUMONT, TX 77704 PHONE: 409.654.6700 • FAX: 409.835.21 15 Members of City Council City of Port Arthur January 15, 2014 Page 2 3. Improvements for the second floor are not included in the attached GMP Amendment. You will notice in the Amendment that it provides there is "no ceiling on the second floor" and the "second floor is to receive no floor coverings." To clarify, the atrium ceiling goes up to the second floor and is being restored. That cost is in the GMP. However, the ceiling over the leasable space will not be finished. Also, the floor on the second floor will remain concrete. When a tenant is found for the second floor, they will be able to specify and customize what flooring and ceiling covering they would like; 4. SpawGlass has listed that over 7.5% of the Direct Cost of Work will come from Port Arthur subcontractors. Four Port Arthur companies bid on the project: (1) Southeast Texas Drywall; (2) Automatic Door Services; (3) NVT Construction; and (4) Lange Brothers Construction. Southeast Texas Drywall and Automatic Door Services were awarded the project (and will execute contracts after the GMP Amendment is signed). NVT will most likely be awarded the project for the fire alarm piece once insurance requirements are worked out. SpawGlass did not recommend using Lange Brothers Construction for plastering of the interior ceiling and restoring the decorative plaster and murals. Instead, SpawGlass recommended using Historical Source out of Galveston because they are more qualified to restore the historical murals on the second floor ceiling; and 5. The Amendment does not include the cost for furniture, fixtures, equipment, and a security system. The funds for those items are allotted for in the overall project budget. The notice to proceed should be given by February 1, 2014 after Chase NMTC PAEDC Investment Fund, LLC, approves the project to proceed and so authorizes 501 Procter, Inc. to give the notice. 501 Procter Street, Inc. and PAEDC are very excited about this project and wanted to make you aware of the progress. Yours very truly, GERMER PLLC B 1/ La Guy N. Goodson GNG/kg Enclosure cc: Mr. Floyd Batiste City of Port Arthur EDC P.O. Box 3934 Port Arthur, Texas 77642 1 Members of City Council City of Port Arthur January 15, 2014 Page 3 Ms. Valecia R. Tizeno City of Port Arthur - Legal Dept. P.O. Box 1089 Port Arthur, Texas 77641 -1089 Members of the Board of Directors City of Port Arthur Section 4A Economic Development Corporation Members of the Board of Directors 501 Procter Street, Inc.