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5. results of The Request for Proposal (rfp) for public-private
partnership (P3) - construction of petrie island beach pavilion RÉSULTATS DE LA DEMANDE DE
PROPOSITIONS POUR LA CONSTRUCTION D'UN PAVILLON DE PLAGE À L'ÎLE PETRIE SELON
UNe formule de PARTENARIAT PUBLIC-PRIVÉ (p3) |
Committee Recommendation
That Council direct staff to undertake the
construction of a basic beach pavilion using available municipal capital
funding, in light of the results produced from the P3 Request for Proposal.
Recommandation du comité
Que le Conseil donne instruction au
personnel d'entreprendre la construction d'un pavillon de plage élémentaire en
utilisant les fonds d'immobilisation municipaux disponibles, compte tenu des
résultats de la demande de propositions pour la construction du pavillon selon
une formule de partenariat public-privé (P3).
Documentation
1. Deputy City Manager's report (Planning,
Transit and the Environment) dated
12 February 2008 (ACS2008-PTE-ECO-0009).
Corporate Services and Economic Development
Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
12 February 2008 / le 12 février 2008
Submitted by/Soumis par : Nancy Schepers, Deputy City Manager/Directrice
municipale adjointe, Planning, Transit and the Environment/Urbanisme, Transport en commun et
Environnement
Contact Person/Personne ressource : Rob Mackay, Acting Director/Directeur
par intérim, Economic and Environmental SustainabilityBranch/ /Direction de la
viabilité économique et de la durabilité de l’environnement
(613)
580-2424 x 22632, rob.mackay@ottawa.ca
Aaron
Burry, Director/Directeur, Parks and Recreation Branch/Direction des parcs et
loisirs
Aaron
Burry 580-2424 x 23666 aaron.burry@ottawa.ca
SUBJECT:
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OBJET :
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RÉSULTATS DE LA DEMANDE DE PROPOSITIONS POUR LA
CONSTRUCTION D'UN PAVILLON DE PLAGE À L'ÎLE PETRIE SELON UNe formule de
PARTENARIAT PUBLIC-PRIVÉ (p3) |
That the Corporate Services and Economic
Development Committee recommend Council direct staff to undertake the
construction of a basic beach pavilion using available municipal capital
funding, in light of the results produced from the P3 Request for Proposal.
Que le Comité des services organisationnels
et du développement économique recommande au Conseil de donner instruction au
personnel d'entreprendre la construction d'un pavillon de plage élémentaire en
utilisant les fonds d'immobilisation municipaux disponibles, compte tenu des
résultats de la demande de propositions pour la construction du pavillon selon
une formule de partenariat public-privé (P3).
In 1998, the former Municipality of Cumberland identified Petrie Island as a potential major outdoor destination. Over the next several years, utilization of the park increased substantially, necessitating a demand and desire for park amenities and services. In 2006, the City retained Robertson Martin Architect to develop a tender document for a beach pavilion that would have the potential for expansion later on. This design was inclusive of a first aid and lifeguard station, a canteen space and services and washrooms for the public.
Upon subsequent consultation with the community on
the park and the pavilion, Council gave direction to Parks and Recreation staff
in April 2007 to advance the pavilion and its expansion elements by way of a
public private partnership. The Request
for Proposal document called for the Design/ Build/ Finance and Operation of a
beach pavilion at Petrie Island. This process was recommended in order to
provide enhanced public spaces beyond the basic building elements such as a
cafe and community space. These additional building elements were identified
through the consultation process. As part of this partnership, the City would
provide $900,000 towards the construction cost as well as a long term operating
contract.
On June 26, 2007 a Letter of Interest was issued on
MERX to notify the private sector of the City's intent in regards to this project. As a result of this notification, staff
received three calls from interested parties. All were advised that a RFP would
be forthcoming which would outline in more detail the procurement process and
requirements.
In June 2007, the following site services were
completed:
a) the installation of a three-inch
water service line and three-inch sewer force main,
b) a dry pipe fire-hydrant, a lifeguard
(large equipment) storage building,
c) a water service line to the
lifegurad storage building, and
d) hydro upgrade to operate pumping
station.
The cost of this investment was approximately
$1,000,000.
During the summer, staff worked in tandem with the
project architect to develop a more complete building design and detailed
design brief. This work integrated the additional building elements such as the
cafe and community space into the project and was designed to provide both
direction and flexibility for the private sector in responding to the City's
subsequent RFP.
On October 3, 2007 the RFP was issued on MERX. The three interested parties who had made inquiries during the release of the Letter of Interest were also advised of its posting on Merx.
The RFP required the private sector to deliver a City owned all-season day-use beach pavilion which would be developed in a compatible manner with the significant natural qualities of the surrounding wetlands. The RFP identified a two-step procurement process, 1- Issuance of the RFP and 2- Negotiation and Final Agreement.
Prior to formalizing the RFP document, staff consulted with the current beach managers, visited various beach operations including the Westboro beach and the Aylmer beach and marina, met with RVCA representatives and planning staff to ensure activities being considered were in-line with the new zoning bylaw and to get a better understanding of the business case potential.
Staff also obtained a precise cost estimate by a licensed Quantity Surveyor for the beach pavilion that was designed by the project architect. As per Council's report in April this estimate included a café and the community space. With this additional space the Class A estimate for the pavilion now came in at $2.9M. As well staff estimated that to provision the café and community space and other functional areas such as the first aid station, etc., the proponent might need to spend an additional $200,000 to $400,000 depending on their ultimate design and business plan requirements. Included in this estimate were the costs of acquiring beach and other related programming equipment that could be rented to cause off-setting revenues.
Request For Proposal Process:
On October 3, 2007 the RFP was released on Merx. In order to meet the ideal timeline of having the beach pavilion available for the summer of 2008, Proponents were given until November 1, 2007 to respond. During the procurement period, Proponents were offered the opportunity to submit any inquiries or seek clarification from the Contract Authority. An offer to hold a Commercially Confidential Meeting with any potential respondent regarding questions related to the RFP and their proposal was also provided. At the close of the RFP no inquiries were received nor were there any requests to meet with the Project team to discuss the procurement.
As part of the RFP documentation, a letter from the RVCA was also included indicating their support for the community space and the café. The letter however did caution Proponents on the possibility the pavilion may need to close due to seasonal flooding events on the Ottawa River.
The RFP also spoke to potential revenue opportunities for the private sector that staff investigated and considered viable for the project. These included a) café revenues b) beach equipment rental c) tuck shop revenues d) parking revenues and e) property management fees. The private sector could propose other revenue generating ideas for the site.
RFP Deliverables:
Proponents were expected to deliver a turnkey operation which included the installation and purchase of all equipment to support the operation and programs anticipated for the facility. The anticipated capital investment in the building based on the Class A estimate from the Private Sector was $2.9M plus the fit up and programming related equipment costs. Staff anticipated these costs could be upwards of $.4M. When this estimated total cost ($2.9M plus est. $.4M = est.$3.3M) was netted out against the City's $900K budget for the project, the private sector investment was now estimated at $2.4M. The building was to be constructed at Petrie Island on a site that was pre-services by the City at a cost of $1M.
While this investment ($2.4M from the Private Sector) was disproportionate to the City's remaining project budget ($900K), staff chose to proceed with the procurement with the understanding that the private sector could propose different solutions and innovative methods to lower costs and provide offsetting revenues that would achieve Council's objectives.
In the RFP, Proponents were asked to provide the following information as part of their proposals:
1. Outline the experience and qualification of the team and the financial capacity to deliver the full project.
2. Provide a business plan, which included a 5-year pro forma and the anticipated method of financing. Proponents were also encouraged to present any innovative ideas that would assist in supporting their Business Plan by either reducing capital and operating costs or increasing revenues.
3. Building on the work staff undertook in the summer on the design of the beach pavilion, the RFP outlined a few design option scenario's that could be utilized in the proponent's response. These scenarios were designed to provide direction and flexibility and allow the proponent to come up with innovative ways to address the City's building program requirements. It was expected that Proponents would chose a design scenario which would best support their business case. In submitting their final design, the proponent's submission would need to respect the site servicing, zoning and the various site constraints on the Island.
4. Submit an operation and maintenance plan inclusive of the methodology that would be used to operate, maintain and serve the public. Within this section, proponents were asked to outline the anticipated hours of operation, brief description of how quality assurance approach would be achieved, monitored and maintained. Costs, life cycle contributions and a Customer and Community Relations plan were also to be provided. This plan would include a response mechanism and a quality assurance program.
Site Challenges Specified in the RFP:
Currently Petrie Island holds a Major Open Space designation within the Official Plan. This designation permits small-scale commercial activities that contribute to or are ancillary to water oriented facilities and activities along the shorelines. In developing the building program and business plan, the proposal needed to consider the following issues:
1. Protection of the Provincially significant wetlands adjacent to the Island
2. Respect that this site is located in an environmental sensitive area which imposes restrictions on the location and types of uses that can occur on the Island
3. Access to the Island is restricted to one causeway
4. Acknowledgment that the causeway varies in elevation from 42.9 metres to as high as 43.40 metres which is below the 100-year flood elevation of 45.1 metres (above sea level). This causes potential risk that the facility and park might need to be closed due to potential seasonal flooding conditions.
RFP Results
By the submission deadline of November 1, 2007 for the RFP, no proposals were received for the pavilion. It is staff's opinion that the financial requirements, constraints and risks associated with developing and managing a pavilion on Petrie Island coupled with the compressed timeline to achieve a result for the 2008 swimming season, may have dissuaded the private sector from responding to this procurement.
Proposed Next Steps
As outlined in the April 2007 report, if the procurement process via a P3 Project proved to be unsuccessful in attracting an appropriate private partner, staff would then proceed with the construction of the Pavilion with the base building requirements of a first aid and lifeguard stations including washrooms for the public.
The community space and café will be postponed, with a basic building construction advanced by way of a tender utilizing the City's existing budget. It is proposed that the initiation of the building commence immediately with an anticipated completion date of November 2008.
Parks and Recreation will also initiate in mid-year, a master plan for Petrie in order to determine appropriate future requirements and additions to the site, while being cognisant of the site's constraints and natural setting. The plan will also address service delivery issues including the provision of food and drink, sports equipment rentals, special events allocations etc.
Staff met and consulted with the Friends of Petrie Island, Petrie Island Advisory Committee, the RVCA and the local councillor prior to the release of the RFP.
There are no additional financial implications associated with this report, as existing capital funds in Parks and Recreation Branch's account will be used to construct the pavilion.
Upon Council’s direction staff from Community and Protective Services and RPAM will proceed with a City-built structure.