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Home My WebLink AboutPR 18527: AUTHORIZING THE EDC TO FINANCE IMPROVEMENTS FOR THE SECOND FL AND ADDITIONAL IMPROVEMENTS 501 PROCTER interoffice MEMORANDUM To : Mayor, City Council, and City Manager al plAXIC) From: Valecia R. Tizeno, City Attorney Date : September 15, 2014 Subject: P. R. No. 18527; September 16, 2014 Council Meeting Please find attached Proposed Resolution Number 18527 . As you are aware, the PAEDC previously authorized that the PAEDC utilize the New Markets Tax Credit Program to redevelop the building owned by it at 501 Procter. Resolution No. 13-348 authorized PAEDC to utilize $3, 741, 100 of the Chase PAEDC Investment Fund, LLC to execute a Leverage Loan Agreement for the renovation of the building (Loan A) . This transaction was authorized pursuant to the New Markets Tax Credit Program (NMTC Program) which was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities. The Investor, Chase Community Equity, LLC made an investment of $1, 511, 400 (Loan B) . Both Loan A & B total $5, 252, 500, which make up the NDC New Markets Tax Credit Development Fund. All funds for the renovation of the building derive from the Development fund. Pursuant to Resolution No. 13-443, the City Council authorized a contract with Spaw Glass for the retrofitting of the building in an amount not to exceed $3, 355, 000 . This proposed resolution is a request for an expenditure of $390, 386. 00 related to the building. Approval of said invoices will require change orders for the items listed in Exhibits A & B. The Chase New Market Tax Credit Fund included a construction contingency of $336, 447 . Chase has authorized that $155, 594 . 50 of the contingency funds be utilized. The PAEDC proposes to utilize $234, 791 . 50 of its funds to fund these change orders to the contract. Exhibit A represents changes for improvements to the second floor of the building in the amount of $282, 886. However, the exhibit does not provide detail as to the nature of those improvements . Exhibit B represents additional costs related to improvements that are being requested for the building. s.pr18527 memo I recommend that a description of the second floor improvements be provided, so that the City Council will have knowledge of the extent of the construction listed in the Conceptual Budget attached as Exhibit "A" to the resolution. Additionally, it was stated that the costs related to the second floor would be charged to the tenant that leased that portion of the building. Therefore, in light of the proposed changes in Exhibit "A", it is necessary to clarify what costs will be required of a lessee. I am also requesting further information regarding the manner in which the $234, 791 . 50 payment can be paid directly by the PAEDC, in light of the parameters set forth in Resolution Nos . 13-348 and 13-443 . The PAEDC has indicated that its attorney will be present to discuss any issues or concerns related to this proposal at the September 16, 2014 meeting. s.pr18527 memo P.R. No. 18527 9/12/14 gg/vt RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION TO FINANCE NECESSARY IMPROVEMENTS INCLUDING ROUGH-IN BUILD-OUT OF THE SECOND FLOOR AND ADDITIONAL IMPROVEMENTS FOR THE BUILDING LOCATED AT 501 PROCTER IN AN AMOUNT NOT TO EXCEED $390,386.00 ($234,791.50 PAEDC FUND, ACCOUNT NUMBER 120-1429-582.59-01 AND THE REMAINING BALANCE TO BE PAID BY THE CHASE NMTC PAEDC INVESTMENT FUND). WHEREAS, it is deemed in the best interest of the citizens of Port Arthur to enhance the appearance of the downtown area and to create an environment that promotes business and entertainment activities for the community; and WHEREAS, per Resolution No. 12-641, the City Council authorized the City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC") to pursue the building development plan to retrofit the building located at 501 Procter Street (the "Building"); and WHEREAS, the City Council authorized PAEDC to make a loan to CHASE NMTC PAEDC Investment Fund, LLC of Three Million Seven Hundred Forty-One Thousand One Hundred Dollars and 00/100 Dollars ($3,741,100.00) necessary to proceed with the redevelopment, improvement and financing of the Building through New Market Tax Credit Financing (the "CHASE Loan"); and WHEREAS, the CHASE Loan included a construction contingency of$336,447 which was not a part of the Construction Manager Guaranteed Maximum Price Agreement (the "Agreement") between PAEDC and SpawGlass Construction Corporation("Spaw"); and WHEREAS, per Resolution No. 13-443, the City Council authorized PAEDC to enter into the Agreement with Spaw for the retrofitting of the Building at a price to complete the work not to exceed $3,554,000; and WHEREAS, the second floor rough-in build-out in the amount of$282,886 as specified on Exhibit "A" was not included in the Agreement with Spaw; and WHEREAS, the additional improvements in the estimated amount of$107,500 specified on Exhibit "B" also were not included in the Agreement with Spaw; and WHEREAS, at a special Board Meeting on August 28, 2014, the PAEDC Board of Directors approved the second floor rough-in build-out and the additional improvements as shown in Exhibits "A" and "B" (collectively the "Improvements") in the amount of $390,386.00 to be funded through the release of construction contingency with the balance from PAEDC Funds; and WHEREAS, approximately seventy percent (70%) of the construction of the Building is complete, and PAEDC requested a partial release of the construction contingency funds from CHASE from the NMTC PAEDC Investment Fund to be applied to the to the costs of the rough- in build-out of the second floor; and WHEREAS, CHASE has agreed to release $155,594.50 from the construction contingency for the rough-in of the second floor build-out; and WHEREAS, the City Council of the City of Port Arthur approves PAEDC's use of PAEDC Funds in an amount not to exceed $234,791.50 for the remaining costs of the Improvements, subject to the approval of pay requests and change orders for the improvements that are listed in Exhibits "A" and `B" by the PAEDC Board and the City Council of the City of Port Arthur; and #1107488 Page 2 WHEREAS, PAEDC further commits to reimburse the Development Fund from any remaining funds in the construction contingency upon completion of the Building and the authorization by CHASE to release said funds from construction contingency. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the PAEDC is herein authorized to contract for $390,386.00 for the Improvements as shown in Exhibits "A" and "B". Section 3. That the PAEDC is herein authorized to use PAEDC Funds in the amount of $234,791.50 for such Improvements with remaining funds used from CHASE from the NMTC PAEDC Investment Fund in the amount $155,594.50. Section 4. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2014, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor Councilmembers NOES: Deloris "Bobbie" Prince, Mayor #1107488 Page 3 ATTEST: Sherri Bellard, City Secretary APPROVED: Floyd Batiste, PAEDC CEO APPROVED AS TO FORM: Guy N. Goodson, PAEDC Attorney APPROVED AS TO FORM: see memo Valecia R. Tizeno, City Attorney #1107488 Page 4 EXHIBIT "B" Improvements Amount Movie Screen $32,000 Interior Blinds 12,000 Monument Sign 5,000 Dedication Plaque 4,000 Eco-Mesh 5,000 Media Wall 27,000 Atrium Ceiling Fixtures 22,500 107,500 #1107488 Page 5 „V„ 11c1R-Ix1 Renovation of the Port Arthur Savings Buildingt2nd Floor Buildoutt-Port Arthur,Texas CONCEPTUAL BUDGET Project:Renovation of the Port Arthur Saving Building Estimate No: Location:501 Procter Street Sheet No: 1 Architect:Haddon&Cowan Architects Collaborative Date: 5-Aug-14 RECAP Total Unit • Description Cost Quantity Units Price DIVISION 01 $ - 6,200 SF $ - DIVISION 02 $ - 6,200 SF $ - DIVISION 03 $ - 6,200 SF $ - DIVISION 04 $ - 6,200 SF $ - DIVISION 05 $ - 6,200 SF $ - DIVISION 06 $ - 6,200 SF $ - DIVISION 07 $ - 6,200 SF $ - DIVISION 08 $ 87,550 6,200 SF $ 14.12, DIVISION 09 $ 20,000 6,200 SF $ 3.23 DIVISION 10 $ 2,480 6,200 SF $ 0.40 DIVISION 11 $ - 6,200 SF $ - DIVISION 12 -- $ - 6,200 SF $ - DIVISION 14 $ - 6,200 SF $ - DIVISIONs 21,22,&23 $ 15,250 6,200 SF $ 2.46 DIVISION 26 $ 83,350 6,200 SF $ 13.44 DIVISION 31&32 $ - 6,200 SF $ - DIRECT TOTAL COST $ 208,630 6,200 SF $ 33.65 GENERAL CONDITIONS 9.50% $ 26,874 6,200 SF $ 4.33 CD COMPLETION CONTINGENCY 8.00% . $ 22,629 6,200 SF $ 3.65 BONDS I INSURANCE I WARRANTY $ 5,658 6,200 SF $ 0.91 Builders Risk by Owner Cost of Work Subtotal $ 263,791 FEE 6.75% $ 19,095 6,200 SF $ 3.08 TAX - exempt $ - $ - PERMITS by owner $ - ' $ - I TOTAL ESTIMATED CONSTRUCTION COST II$ 282,886 II 6,200 II SF,11$ 45.63 9/10/2014 1 of 10 Renovation of the Port Arthur Savings Buildinq(2nd Floor Buildout)-Port Arthur,Texas DIVISION 01 Total Unit Description Cost Quantity Units Price GENERAL REQUIREMENTS Not Applicable DIVISION 02 Existing Conditions/Demolition Not Applicable Total Division 02 $ - II 9/10/2014 2 of 10 Renovation of the Port Arthur Savings Buildinq(2nd Floor Buildout)-Port Arthur,Texas DIVISION 03 Total Unit Description Cost Quantity Units Price CONCRETE WORK Not Applicable Total Division 03 II$ - II II II$ - I Renovation of the Port Arthur Savings Buildinq(2nd Floor Buildout)-Port Arthur,Texas DIVISION 04 Total Unit Description Cost Quantity Units Price MASONRY -Not Applicable Total Division 04 II$ - II II II 9/10/2014 3 of 10 Renovation of the Port Arthur Savings Buildinq(2nd Floor Buildoutl-Port Arthur,Texas DIVISION 05 Total Unit Description Cost Quantity Units Price METALS Not Applicable �� If II II DIVISION 08 MILLWORK $ - Total Division 06 $ - II II II 9/10/2014 4 of 10 Renovation of the Port Arthur Savings Buildinq(2nd Floor Buildout)-Port Arthur,Texas DIVISION 07 Total Unit Description Cost Quantity Units Price • THERMAL AND MOISTURE PROTECTION Not Applicable Total Division 07 ii$ - II II II 9/10/2014 5 of 10 Renovation of the Port Arthur Savings Buildina(2nd Floor Buildout)-Port Arthur.Texas DIVISION 08 Total Unit Description Cost Quantity Units Price DOORS AND WINDOWS Door-Pro Doors,Hardware wl Installation $ 3,900 Tri-Star Glass Interior Glass Walls $ 29,000 Glass{M Elevator lobby $ 5,400 Gulf Coast Railing Glass Handrails $ 49,250 Total Division 08 II$ 87,550 II II 11 9/10/2014 6 0110 Renovation of the Port Arthur Savings Building/2nd Floor Buildout)-Port Arthur,Texas • DIVISION 9 Total J Unit Description Cost Quantity Units Price FINISHES Southeast Texas Drywall Frame,Drywall and Paint $ - Porters Flooring Flooring-Tile $ 7,000 Custom Flooring Flooring-Carpet $ 13,000 Total Division 9 II$ 20,000 Il Il II Renovation of the Port Arthur Savings Buitdingl2nd Floor Buildout)-Port Arthur,Texas DIVISION 10 Total Unit Description Cost Quantity Units Price SPECIALTIES Griesenbeck Toilet Partitions and Accessories $ 1,980 Kaiser Graphics Signage $ 500 Total Division 10 $ 2,480 II II II 9/10/2014 7 0110 Renovation of the Port Arthur Savinqs Buildinq(2nd Floor Buildout)-Port Arthur,Texas DIVISION 11 Total Unit Description Cost Quantity Units Price EQUIPMENT Not Applicable Total Division 11 $ • Il II lI Renovation of the Port Arthur Savings Building(2nd Floor Buildout)-Port Arthur,Texas DIVISION 12 Total Unit Description Cost Quantity Units Price FURNISHINGS Not Applicable Total Division 12 0$ II �I Ii Renovation of the Port Arthur Savings Buildinq(2nd Floor Buildout)-Port Arthur,Texas DIVISION 14 Total Unit Description Cost Quantity Units Price _ - Conveying Equipment Not Applicable Total Division 14 $ - U P II I 9/10/2014 8 of 10 Renovation of the Port Arthur Savings Bulldinq(2nd Floor Buildout)-Port Arthur.Texas DIVISIONs 21,22,&23 Total Unit Description Cost Quantity Units Price DIV.21 FIRE SUPRESSION Coastal Sprinkler Fire Sprinkler $ 1,750 DIV.22 PLUMBING Hinote Plumbing Plumbing Fixtures and Piping $ 11,000 DIV.23 HEATING,VENTILATING,AND AIR CONDITIONING Associated Mech. HVAC Installation $ 2,500 Total Divisions 21,22,&23 II$ 15,250 II II II Renovation of the Port Arthur Savings Buildlnq(2nd Floor Buildout)-Port Arthur.Texas DIVISION 26 Total Unit Description Cost Quantity Units Price ELECTRICAL GulfCcast Electric Electrical $ 75,000 Maverick Comm. Data $ 8,350 Texas Fire Alarm Fire Alarm(Included in Electrical) $ - I Total Division 26 II$ 83,350 II II II 9/10/2014 9 of 10 Renovation of the Port Arthur Savings Buildinq(2nd Floor Buildout)•Port Arthur,Texas DIVISIONS 31,32,8 33 Total Unit Description Cost Quantity Units Price DIV.31 EARTHWORK Not Applicable DIV.32 EXTERIOR IMPROVEMENTS Not Applicable DIV.33 SITE UTILITIES Not Applicable Total Divisions 31 32 II$ - II II II 9/10/2014 10 of 10 EXHIBIT "B" Improvements Amount Movie Screen $32,000 Interior Blinds 12,000 Monument Sign 5,000 Dedication Plaque 4,000 Eco-Mesh 5,000 Media Wall 27,000 Atrium Ceiling Fixtures 22,500 107,500 #1107488 Page 5