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5. PUBLIC-PRIVATE PARTNERSHIP FOR
ORLÉANS ARTS CENTRE - SHORTLIST of Qualified
Respondents for the Request for Proposal
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That council authorize staff to request proposals for the provision of
the orléans arts centre and the
development of the town centre from the shortlist of qualified respondents
identified in this report.
Que le conseil municipal permet au personnel de demander des propositions
pour l'amenagement du centre des arts et du quartier central d'orleans a partir
de la liste des candidats qualifies indiques dans le present rapport.
Documentation
1. Planning and Growth Management
Branch, Deputy City Manager’s report dated 26 September 2005
(ACS2005-PGM-ECO-0018).
2. Extract of Draft
Minute, 18 October 2005.
Report
to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels et du
développement économique
and Council / et au Conseil
26 Septembre 2005 / le 26 septembre 2005
Submitted by/Soumis par : Ned Lathrop, Deputy City Manager/Directeur municipal
adjoint,
Planning and Growth Management/Urbanisme
et Gestion de la croissance
Contact Person/Personne
ressource : Rob Mackay, Manager, Strategic Projects
Economic Development and Strategic
Projects/Développement économique et Projets stratégiques
(613) 580-2424 x 22632, rob.mackay@ottawa.ca
REPORT RECOMMENDATION
That the Corporate Services and Economic Development Committee
recommend that Council authorize staff to request proposals for the provision
of the Orléans Arts Centre and the
development of the Town Centre from the shortlist of qualified respondents identified
in this report.
RECOMMANDATION DU RAPPORT
Que le Comité des services organisationnels et du développement économique
recommande au Conseil de permettre au personnel de demander des propositions
pour l'aménagement du centre des arts et du quartier central d'Orléans à partir
de la liste des candidats qualifiés indiqués dans le présent rapport.
BACKGROUND
On October 12, 2004 Council supported staff's recommendation to proceed with a P3 strategy in order to advance the development of the Orléans Arts Centre and the Town Centre. On June 22nd, 2005 staff provided Council members with an update on the various initiatives which had been undertaken and presented the proposed partnership framework to be issued as part of a Request for Qualifications (RFQ). A request for funds to purchase the Hydro One property and the completion of the required Phase 2 Environmental Site Assessment associated with a nearby landfill site was also approved.
The RFQ was subsequently posted on MERX on 14 July 2005 and closed on 13 September 2005.
This report provides an update on the issues identified in the June report, provides the results of the evaluation for the submissions received for the RFQ and outlines the RFP framework for a successful partnership.
DISCUSSION
Over the last several months, staff have continued to advance the P3 Strategy. The following is an update on the issues identified in the June report:
a) Status of tenants
The P3 strategy identified that staff would aggregate tenants for the Arts Centre project and would require that part of this benefit be used by the P3 partner to lower the cost of the Arts Centre facility. To date the Orléans-Cumberland Resource Centre and the Provincial 211 Call Centre have expressed an interest in locating in the commercial development area of the Orléans Town Centre and are currently awaiting the outcome of the P3 process.
The Ministry of Consumer and Business Services has filed a letter with the City expressing their interest, subject to funding approval, of a second CommonCounter in the Ottawa area. An evaluation of potential locations for a second CommonCounter commissioned by the Province suggests that the counter be located in the Orléans Town Centre. Staff are pursuing this matter with the Ministry.
Staff are also continuing to seek other potential tenants for this project and will incorporate these expressions of interest in the RFP when it is released.
b) Hydro One Property
The June report directed staff to secure a former Hydro One substation property so that it could be included in the RFP and subsequently transferred to the P3 partner to lower the cost of the Arts Centre facility. As part of the acquisition process, a Phase 2 Environmental Site Assessment was also to be completed to ensure any remediation issues were addressed prior to the transfer of the property. Staff have entered into negotiations with Hydro One which are expected to be completed prior to the release of the RFP.
c) Soil Stability & Environmental Scan
Phase 1 and 2 of a Class Environmental Assessment process is currently underway and is being completed in conjunction with a full Serviceability Study for the Town Centre. The assessment will deal with servicing, soils and transportation. In fulfillment of the EA requirements, a Public Open House was held on 8 September 2005. The conclusions of the Phase 1 and 2 Class Environmental Assessment will be included in the Request for Proposals to be released upon Council's approval of this report.
Public-Private Partnership (P3) Process
In the Request for Qualifications (RFQ) staff identified two main objectives. The Primary objective was the development of the Orléans Arts Centre. The Secondary objective was to use the construction of the Orléans Arts Centre to trigger additional development in the Town Centre in conformity with Ottawa's 20/20 plans particularly the Official Plan. In order to meet these objectives and to enter into a final partnership arrangement, a three (3) stage procurement process is being followed:
Stage 1- Request for Qualifications (RFQ)
Stage 2- Request for Proposals (RFP) - only shortlisted Respondents will be invited to respond
Stage 3- Negotiations and Final Arrangement
Results of Request for Qualifications (RFQ)
As in previous P3 projects, the Evaluation Session was led by a Purchasing Officer from the Supply Management Division. An external Fairness Commissioner was appointed to scrutinize the evaluation and ensure that the process was followed as set out in the Request for Qualifications document.
Five submissions were received in response to the RFQ. These were evaluated based on the criteria included in the RFQ document. The evaluation team consisted of representatives from Community and Protective Services, Design and Construction Division, Financial Services Branch and the Planning and Growth Management Department. A private sector representative with P3 experience was also retained as part of the evaluation team.
The prescribed criteria for the evaluation of the submissions consisted of a number of mandated and rated criteria. In order to be considered for receipt of the RFP invitation, Respondents had to first meet all of the Mandatory Criteria then obtain a minimum passing grade of 65% of the Criteria Subject to Point Rating. Submissions were rated by consensus and the rating was based solely on the material provided in the submission.
Based on this process, the following qualified respondents are being recommended to be shortlisted for Stage 2- RFP:
Forum Leasehold Partners Inc.
GWL Realty Advisors
Giffels Partnership Solutions Inc.
Morguard Plenary Consortium
Each consortia includes a principal respondent as well as a series of suppliers who specialize in various disciplines that the project will require, i.e. theatre design, acoustics, leasing and property management, civil engineering, etc. The lead respondent in the consortium is either a local or national developer who has partnered with a contractor and an architectural firm. Some of the builders are tier-one contractors and together with other consortia members have prestigous credentials who have completed award winning projects throughout North America.
Framework for the Development of Stage 2- RFP
Through the partnership approach, it is the City's intention to use its assets and initiatives in the Orléans Town Centre to lower the cost of the Arts Centre facility and in turn trigger additional development in the Town Centre. It is anticipated that the P3 partner will assume responsibility for all aspects of the Town Centre development and deliver in Phase 1 the Arts Centre Facility as a turnkey project and some initial development for the Town Centre.
As approved by Council on June 22nd, 2005 the framework for the RFP is being developed in accordance with the following:
1. The Arts Centre facility will be developed by the P3 partner in the Orléans Town Centre in accordance with the City's building program.
2. The Arts Centre facility will be programmed by the City and used by the arts and cultural community. The maintenance and life cycle requirements of the Centre will be the responsibility of the P3 partner.
3. The design and construction of the Arts Centre facility will be in accordance with the City's specific performance specifications and its construction is to start in 2007 and be completed by the fall of 2008.
4. The preferred partner will have the capability and capacity to finance the project and enter into a long term relationship with the City. The terms and conditions of the relationship will be captured in a P3 agreement. At the end of the term, the ownership of the Arts Centre facility will revert to the City with all life cycle requirements addressed by the partner.
5. The P3 partner will use its design/build expertise to lower the cost of the development and ensure the building can operate with efficiency and minimize long-term environmental impacts. All legislative requirements related to the construction and operations are to be maintained.
6. The City will enter into a lease agreement for the Arts Centre facility that will compensate the P3 partner for the development and maintenance of the Centre over the life of the P3 agreement.
7. To ensure the City is paying the lowest net cost for the Arts Centre facility, the partner will be required to maximize the value of the City's assets and initiatives ("off-sets") offered through the RFP and apply a percentage of this value to the construction cost of the Arts Centre facility.
8. The off-sets that will be offered include:
a. The City will transfer ownership of the existing Client Service Center and enter into a long term lease with the P3 partner for the building. The partner will own the facility in perpetuity, maintain, operate and address all life cycle requirements for the building.
b. The City will transfer its vacant land holdings in the Town Centre to the partner subject to performance requirements that will specify when and how much development is to occur in this area. This development is to comply with the Official Plan and the P3 partner is to assume all the development related responsibilities.
c. Expressions of interest that have been secured by staff will be provided to the P3 partner who in turn will negotiate separate leases with these parties and provision their space requirements within the Town Centre.
d. By developing all of the City's lands comprehensively, the P3 partner will achieve efficiencies part of which can form an off-set to the costs of the Arts Centre facility. This off-set as well as all other off-sets are to be credited towards the construction of the Arts Centre facility prior to its construction.
9. The Orléans Arts Centre will be constructed in a manner that satisfies, at a minimum, the program and policy requirements of the City, including the 1% public art dedication.
In order to ensure that the City is paying the lowest possible cost for the Arts Centre facility and is receiving maximum value for its offsets, the RFP respondents will be required to provide the following:
1. Business Plan
a) Capital cost of Arts Centre Facility
b) Value assigned to off-sets
c) Financing Strategy
d) Proposed lease rate/term for Arts Centre and Client Service Centre
2. Design, Development and Construction Plans
a) Detailed concept plan for the Town Centre
b) Site Plan Proposal for the Arts Centre
c) Construction schedule for the Arts Centre
d) Phasing plan for Town Centre Land Development
3. Operation and Management Plans
a) Service and Program Plan
b) Operating Structure and Management Approach
c) Marketing and Leasing Strategies
d) Building Systems Maintenance and Life-Cycle Management Approach
e) Quality Assurances in Customer Service and Community Relations
The evaluation of the proposals will be benchmarked against the City's recently completed Public Sector Comparator (PSC) for the Arts Centre facility. The PSC is a detailed analysis of the City's cost to provide and deliver the capital program as well as the on-going operating, maintenance and life cycle renewal costs for the Arts Centre facility. Other sources of information such as land and building appraisals, industry standards, servicing studies, etc commissioned by the City will be used to ensure the RFP submissions are assigning maximum value to the City's offsets.
Next Steps and Timelines
The Strategic Project Branch in conjunction with Supply Management Division have initiated the RFP preparation. Subject to Council's approval of this report, the RFP will be finalized and released to the shortlisted respondents by the end of October.
The results of the RFP will be reported on prior to the next step of negotiations. It is expected that this report will come forward in the Spring 2006. The Orléans Arts Centre is expected to be opened in the fall of 2008.
CONSULTATION
A public meeting will be held in the community of Orléans with the preferred partner prior to completion of the final negotiations stage.
FINANCIAL IMPLICATIONS
To date $730,000 has been approved for this project. No additional funds are required at this time. The total impact on the future operating budgets is in accordance with the report to Committee and Council on June 22nd and will be subject to information provided by the Respondents at the RFP stage and the final negotiations.
DISPOSITION
Staff will initiate the RFP process and report back to Council with the results before proceeding to the negotiating stage.
PUBLIC-PRIVATE
PARTNERSHIP FOR ORLÉANS ARTS CENTRE - SHORTLIST of Qualified Respondents for the Request
for Proposal
PARTENARIAT PUBLIC-PRIVÉ POUR LE CENTRE DES ARTS
D'ORLÉANS - LISTE DES CANDIDATS QUALIFIÉS POUR LA DEMANDE DE PROPOSITION
ACS2005-PGM-ECO-0018
Councillor Cullen noted an
evaluation for the capital investment proposed, was missing from the
report. He said when P3 proposals are
evaluated the cost of capital is looked at as a consideration because it is
clearly cheaper for the City to raise capital, than the private sector. He questioned how the capital portion of
this process would work.
Réjean Chartrand, Director, Economic
Development and Strategic Projects, agreed that in some cases the cost of
borrowing by a private sector partner may be higher than for the City but it is
not the case every time. He further
explained any one element of a project might be different than what would
happen if the City undertook this in a traditional approach, but the
recommendations presented to Committee and Council have been based on the total
package, which in all cases have been better than what the City could offer on
an equivalent basis.
Councillor Cullen sought
confirmation that the report back to Committee and Council on the Request for
Proposals would contain information and staff comment on these factors (e.g.
the cost of borrowing for the private sector partners and for the City will be
identified). Mr. Chartrand confirmed
this would be the case, as has been done in all previous P3 reports presented
to Committee and Council.
The Committee then considered the
staff recommendation.
That the Corporate Services and
Economic Development Committee recommend that Council authorize staff to
request proposals for the provision of the Orléans Arts Centre and the development of the Town Centre from
the shortlist of qualified respondents identified in this report.
CARRIED with Councillor A. Cullen dissenting