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Home My WebLink About2011-10 Authorizing Town Manager to Sign Agreement with Triumph for Redevelopment of TOV Municipal Site RESOLUTION NO. 10 Series of 2011 A RESOLUTION AUTHORIZING THE TOWN MANAGER TO SIGN A CONTRACTUAL AGREEMENT FOR PRE - DEVELOPMENT SERVICES WITH TRIUMPH DEVLOPMENT LLC, TO FORMULATE POTENTIAL COST AND FINANCIAL ALTERNATIVES AND CREATE A CONCEPTUAL DEVELOPMENT PROGRAM FOR THE REDEVELOPMENT OF THE TOWN OF VAIL MUNICIPAL OFFICE SITE, LOCATED AT 75 SOUTH FRONTAGE ROAD, IN COOPERATION WITH THE VAIL VALLEY MEDICAL CENTER, THE STEADMAN - PHILIPPON RESEARCH INSTITUTE AND THE STEADMAN CLINIC; AND SETTING FORTH DETAILS IN REGARD THERETO. WHEREAS, the Town of Vail (the "Town "), in the County of Eagle and State of Colorado is a home rule municipal corporation duly organized and existing under the laws of the State of Colorado and the Town Charter (the "Charter "); WHEREAS, the members of the Town Council of the Town (the "Council ") have been duly elected and qualified; WHEREAS, the Town, in cooperation with the Vail Valley Medical Center and The Steadman Clinic, wish to enter into a contractual agreement (the "Agreement ") for pre - development services; WHEREAS, according to the Agreement the scope of services includes confirming space requires, investigating physical constraints of the site, formulate cost and financial alternatives of the project, and formulate a development program and business deal for all parties, WHEREAS, this Resolution authorizes the Town Manager to sign the Agreement for said services with Triumph Development, LLC; WHEREAS, the Agreement only authorizes the Town to spend up to $33,000 for its share of the pre - development services, and WHEREAS, approval of Resolution No. 10, Series 2011, is required to enter into the Agreement. NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO THAT: Section 1. The Council hereby approves and authorizes the Town Manager to enter into the Agreement with the Triumph Development, LLC., for pre - development services for the redevelopment of the Town of Vail Municipal Office Site, located at 75 South Frontage Road in substantially the same form as attached hereto as Exhibit A and in a form approved by the Town Attorney. Resolution No. 10, Series 2011 Section 2. This Resolution shall take effect immediately upon its passage. INTRODUCED, PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Vail held this 17` day of May, 2011. Richard Cleve an. Town Mayor --.:& O F 1;%%, i ' ` O .,'' ATTE ....••► t • Arid i : .��► L� �' �� • V Ieibonaldso , i • SEA n Clerk I tt C *•••• Resolution No. 10, Series 2011 EXHIBIT "A" 86/29/2811 16:21 728733'6427 F)Ql CASTS R3C< =AOE 02110 TRIUMPH D EVLLOPMF.NT, LLC April 29, 2011 Ms Doris Kirchner Vail Valley Medical Center 18: W. Meadow Drive Vail, CO 81657 Mr. Lyon Steadman The Steadman Clinic 181 W. Meadow Drive Vail, CU 81657 Mr. Stan Zernler Town of Vail 75 S. Frontage Road Vail, CO 81657 Re: Consulting Agreement for Predevelopmeut Services Vail Valley Medical Center & Steadman Clinic Medical Office Complex Dear Team, Thank you fcr your time and insight ever the past three wee:c Into the Vail Valley Medical Center's (VVMC), Steadman Climes, and Steadman Phillppon Research Institute's (SPRI) need fora new medical office complex. Our initial conversations with VVMC executives and Town of Vail Stan' have us convinced that all parties are excited to bud a new world -class medical facility in the heart of Vail. Any successful pubic- private partnership begins with the recognition that only by working together can we collectively reach a common goaL Ther are many steeps along the path of turning this vision into a reality and there are many stakeholders that will need to be satsfied along the way. But with an experienced real estate company 'Ike Triumph Development taking the lead and coordinating these many moving parts, VI/MC, Steadman Clinic, SPRI and the Town of Vail maximize their chance of success. In the pages that foliow, please find a brief description of Triumph. the initial concept for a new medical office complex, as weal as our proposal to provide due dingenee and predevtilopment consulting services to conceive and outline a development project for formal consideration by each of the stakeholders outlined above. 292 East Meaoow Drive • Suite 101 • Va& CO 81657 8120 Woodrnorn Avenue - 3tate 800 • bethesca. mat y14, Ni ?031 • Tei: 301.557.1112 • Fax 301.657.5948 Resolution No. 10, Series 2011 214/29/2e11 16:21 722733642 F40 CAS ROG< P a3 /le Triumph Preelevelopment Consulting .Agreement Vail Valley Medical Complcs Page 2 of 9 Triumph Development Triumph is a fu]-service real estate company ircludJitt development, architectural design, construction management, brokerage. and property management. Our approach to development focuses on lolnt ventures and building strong relationships wi-:'a partners such as VVMC ar.d the Town of :ra:l This focus begins with us is :nit to the needs of our fature partners and being flexible and creative to strtcrarng business deals that address these reeds. We be,ieve it is our commitment to this consent :s -build rg approach that has won the respect of our business partners and municipal jursdlctions alike. Over the course o( our careers we have developed several million square feet acr oss alt major categories of commercial real estate including office, multifamily, and industrial buildings. The majority of the protects have been design -build commercial buildings. We also tend to build commercial protects with the objective of ovming there for the long -term. Our mentality of having the fell spectrim cf real estate expertise In -house - everything from architectural design. to development to property management once completed is a direct result of this commitment to lorg -term ownership. We design, yui :d, and manage properties the right way For a protect of this complexity with muitple stakeholders we believe a real estate company like. Triumph is hest suited to assist you in the upfront determination of the options for pursuing the project Vall Valley M edlcul Center Expansion Over the past three weeks we have begun to understand VVSIC's, Steadman Clinic's, and SPRI t:uir'ns for a new world -class medical facility that can attract patients. doctors and researchers from all over the world ideally this facility will he in close proximity to to currant VVMC, and It will house new offices for VV MC administrators, the Steadman Clinic operations in :heir entre:y (with the excep::on of operating rooms), and the Steadman Philippon Research institute. We have also heard from Towr. Staff that the Town Council is eager to keep both VVMC and Steadman in Vail. To help ctckoff this exercise, the Town of Vail has commissioned a master Manning study to nvestigate if the current site of the Town.lumdpal Car.ter located at 7i South Frontage Road can accommodate the Town's 30,000 square feet for offices and council chambers, plus an $6,000 square foot VVN,C comp :ex, plus the parking associated with each. The initial study sugge<u this site can work. Resolution No. 10, Series 2011 04/29/2e11 16:21 7207336427 PAZ CASTLE ROCK PAGE 04/12 Triumph Fredevclopment Consulting Agreement Vail Valley Medical Complex Page 3 of 9 Scope of Consulting Services Phase 1 of iuvestigatirg this public•prIvate partnership hetweer. WMC and the Town of Vail can be summed up in four major activities that happen concurrently: 1) confirming the space requirements of each of the above outlined groups, (2) investigating the physical ant: zoning constraints of the selected site, (3) anderstandIng the cost and Prancing alternatives for the project, and (4) using this information to come up with a realistic development program and business ueal netween VVMC's group and the Town of Vati. Triumph will take the lead in assembling the development team to investigate these many details and synthesize them into a reasonable, affordable development program. We will establish and manage the predevelopment schedule, and act as the mediator between each group - coordinating their input and keeping each up to date on progress and required decisions. Said simply - it will be our job to create a development program and get that program approved by each of the major stakeholders including the Town of Vail within the next five months. Our suggested development steps are outline below and are gi ouped into general activities. While rhe.se activities are presided in the order execution, we will be pursuing many pf these activities in tandem. 1. Assemble Core Members of the Development Team - This will include several outside consu:tants and industry experts. as well as representatives from each of the major stakeholders: • Interview and select an architect, civil engineer, and a heatthcare design specialist to assist with master planning the new medical complex and Town Municipal Center. • Identify the WMC executives and personnel responsible for preAnvelnprnent input, project scoping and communicating /coordinating with thc rest of WMC personnel. • Identify the Steadman Clinic and SP 4I executives and personnel responsible for predevelopment input, project scoring and communicating! coordinating with the rest of Steadman personnel. Work with Steadman personnel to understand the current programming work performed by Boulder Associates on Steadman's behalf. • identity the Town of Vail Staff tor predevelopment flout, project scoping and communicating /coordinating with the rest of Town of Vail resources. 2. EnfJtlement Research Del ernr :ne the planning, and zoning reccrmr entIntions for the Municipal Center at 75 South Frontage Road. • Research current Town of Vail Land Use Plan and zcning documents. Resolution No. 10, Series 2011 04/29/2311 16:21 72a7336427 Fx0 CASTLE foo< PA: asile Triumph Pre4evelopnrent Consulting .agreement Vail Valley Medical Complex Page 4of. • Meet with Town of Vail Planning and Community Development Staff to determine zoning and master plan building constraints including building height, setbacks, and parking requirements. • Meet with Town of Vail Public Works Staff to determine their concerns /requirements for redevelopment. • Determine the best entitlement path and timeline with Town Staff. • Present to Town Council an outline of process, timeline and goals fur this prodeveloprnont effort in an Execution Session. 3 Schematic Design for the New VVMC Complex and New Town ofVall Municipal Buildings- Working with the above outlined team and design professionals, we will scope out each users' space requirements to devise the best development program for the project. • Meet with each of the Medical Complex's future tenants inc"ading VVMC. Steadman Clinic, and SPRI to determine their Individual space needs. Tour each group's current facilities. • Meet with Town of Vail Public Works and Commonly Development personnel to determine and plan the displaced town departnien:s' new space needs. Tour each group's current facilities. • 1etermine each user's individual parking requirements and opportunities for .hared parking arrangements. • Procure a civil survey of the Town rot located at 75 South rrontage Road (or obtain from the Town). This survey will locate property lives, uUltties, topography, and surrounding buildings and physical structures. • Procure geological testing with outside consultant (or obtain from the Town) to assist in seeping the cost of a new underground garage. • Locate and review building plans of the cuncut Town of Vail Municipal Center buildings to coordinate between the new and existing 'Pawn facilities. • Tour the Andrews Institute in Gulf Breeze, FL and University of Pittsburg Department of Orthopedic Surgery with our architect and Steadman personnel to determine unique programming needs for their new space (facilities to be confirmed by Steadman). • Aggregate the user information and work wlta the architect to devise several master plan and massing alternatives, • Generate budget observations for each ott he schematic design alternatives. • Select best massing plan and complete schematic design of this plan. • Present final schematc plan to the decision makers forVVMC. Steadman Clinic, Resolution No. 10, Series 2011 • 04/29/2011 16:21 72e7336427 FMI CASTLE R=OC PAGE 06/:a Triumph Precicvcinpment Consulting Agreement Vail Valley Medical Complex Page 5of and SPRJ for approval. • Present schematic design to Town of Vail Staff and Councilor their review. 4. Development !Judger, Schedule and Construction Estimates - Concurrent with schematic design, Triumph will develop an overall development budget and timeline. • Develop preliminary development budget based upon the design program outlined above. • Develop preliminary development schedule based upon the design program above. • Understand the decision making process and decision makers within each stakeholder group for inclusion in tho overall schedule. • Continually refine and detail the development budget and schedule as the project's scope evolves. • Survey the future tenants to determine what they consider an affordable rental rate based upon their design criteria and relative costs of chase criteria. • Breakdown the development budget to estimated cost of the project attributable to each Individual tenant to assist In determining each tenants approximate rent. S. fnvcstlgate Financing Alternatives - There are many financingpossibilities for a project of this type and scale. These alternatives cover the spectrum from charitable donations, to partial public funding, to standard debt and equity financing from large nat onal financial institutions. • Facilitate VVMC or Steadman's initial investigation of private fundraising options. • Identify the currently active lenders for built-tu suit medical office buildings. • investigate the terms and approximate cost of a construction loan. • Use tae Schematic Design Development Budget and financing research to estimate the cost of financing the ertire project. • Propose long-term lease structure and pricing for each of the tenants taking into account all capital costs. Resolution No. 10. Series 2011 64/29/2e11 16 :21 7 2e7336.27 FXD CASTLE ROCK PAGE 07/10 Triumph Predevelopmcnt Consulting Agreement Vail Valley Medical Complex Page 6 of 9 6. Outline the Terms of Land Acquisitien'from the Town of Vafl - I nvestigate the Town's preferences and requirements to make this municipal land available for this public - private partnership. • Determine Town's preferred legal structure for `self :ng the land to the project. (e.g. long -term ground least. outright sale, sale of land /buyback for the new municipal offices). • Work with Town ro determine appraised value of the land as a component of a medical office complex. • Determine cosr /value of the uew municipal office building and parking that we will be rebuilding for the Town. 7. Communicution - A project of this scale and complexity will require constant communicator. and updates between all groups. 'Surprises' throw the process oil track. While the development steps outlined above appear very linear, In realty Triumph will be juggling all activities at :he same dm*. Success will require constant communication, updates. feedback, and verification of commitment from each of the Important stakeholders all along the way. To accomplish this we anticipate: • Buildinga development team that includes a liaison from VVMC, Steadman Clinic. SPR1, and the Town to act as the initial point-of-contract for questions /comments from that group. • Regular bl•weekly meetings of the development team incluctngTriumph personnel, master plan architects, designated Town Staff and stakeholder liaisons. • Monthly pmgress reports via email updating the entire group as to the overall status of the predevn(npment process. • Triumph's Open - Door Policy - open for question and continents from each group member at any time. • Interim updates and a final presentation of findings, design program, preliminary budget and recommendations to the Town of Vail Council, VVMC Board of Directors and Steadman Board of Directors. Resolution No. 10, Series 2011 04/29/2011 11:21 7207336427 FXO CASTLE ROCK ;SSE 08/10 Triumph Prcdcvelopmcut Consulting Agreement Vail Valley Medical Complex Page 7 of 9 Predevelopment St hedulr Outlined below is our usual estimate of the Reconstruction saccade for this project. We believe that fora public - private parmership to wink bast, we will need to build and sustain mom nturn and enthusiasm for 'be pro :ect. This general principal is co ur tt red by the fact that there will be .veal differen: groups with multiple decision makers within each group involved in the process. Nevertheless, we think that it is important to be in front of the To en of Vail Council for tea approval of a Development Program and process by September 30, 2011. We acknowledge that this schedule is aggressive, but are confident that wo can make it aappen it• the entire teatn remains dedicated to the process and makes decisions quickly. Development Team Selection and Kickoff Meetings Early May 203! Triumph Project & Entitlertaent Due Diligence Early May 2011 Stakeholder Facility Inters ews Q. Tours Iatc May 2011 Na Orthop dic Medical Facility Tows Late May 2011 ToV Planning, Public Works & Fae:lity Staff Meetings Late May 2011 Muter Plan Design Chvrene and Plan Selection Jane 2011 to Early July 2011 Refine Developtuetn Budget and Schedule Lute July 201 ; to Early August 201i Development Financing Rescrrch June 2011 to Early August 2011 ToV ;and Acquisition Research and Planning Lune 2011 :o Early August 20:1 Development Team Review and Commentary Late August 2111 Presentation /Approval by VVMC and Steadman Early September 20;1 Presentation /Approval by To of Vail Late September 2011 Development Dudget After the first three weeks of due diligence, Trbmph will prepare a preliminary development budget Lased upon the above ottlined design concept This budget will outline total estimated costs fnr the project including upfront consulting and out -of- pocket costs for this first phase of work. As noted above, this budget will continue to be refined throughout this predcvcloprnent process. Propoarrd Development Team Steve Virostek Principal (Principal -In- Charge): Steve Virostek provides Triumph's Muldo- on development expertise including deal saurdng, deal structuring, management of project design, entitlements, lease negoriatons and construction management. He runs the firm's Resolution No. 10, Series 2011 04/29/20:1 1S:21 7207335427 7'AC CASTE GCC" .AGE 09/10 Triumph Predcvelopmcnl Consulting Aerccorcui Vail Valley Medical Complex Page 8of9 Vail, CO development teams. Ile Is integral is finding new leads and manages many of Triumph's relationships throughout the industry, James Fangmever - Pnnripai: In addition to overseeing the Triumph `amity of companies, James fills the rote that many would describe as Triumph's Chief Financial Officer. He provides the firm's financial, legal and tax oversight, as well as leads a..cquisitior, due diligence, valuation. financing, and legal oversight. He manages the firm's relationships with lenders and financial pagers. In addition, he oversees the asset management and leasing of the firm's portfolio properties. Michael O'Connor - Chief Operating Officer. Michael has three primary roles at Triumph: overseeing the day -to -day mountain operations, running the upfront due- diligence and proposal effort or. new opportunities, and managing the predevelopment effort of new Triumph projects. For consulting agreements such as this, he plays a hands -on role in dcve:oping the budget, legal structure. procuring entitlements, interface with the public, establishing the master schedule, investor relations and overall lob s atus updates. He will manage the Joh Ai ongsIde Mike Foster, with particular focus on the upfront portions of the development Mike Foster - Architect, Development Director Mike came to real estate development after seventeen years in the architecture world, where he designed some of the most notable residential and hovel projects in Vail. hake oversees the day -to -day design and construction of all projects in the Mountain West. As a development director, Mike coordinates and leads the design team of project architects, engineers, interior designers and general contractors. lie is also in charge of managing buc:gets, schedules, ensuring execution of die design, changes and customer satisfaction. In addition to management of the ongoing protects, Mike is actively involved on the due diligence of new projects including leading schematic end sketch design, His upfront involvement helps ensure that design details don't slip through the cracks early on, and the original project Intent and budget are carried all the way through construction and execution. Fees ti Consulting Agreement 'Tenn For thLs initial scope of work, we propose that you select Triumph Development as your exclusive representative and consultant to lead this predevelopment effort tVe will perform this entire scope of services for a monthly fee of 515.000 per month, plus reimbursement for all out -of- pocket expenses and third -party consuitsnts. The term of this consulting agreement will not exceed five month for $7S,000), and $130,000 in to tai including outside consultants without the approval of all parties. We will separately invoice VVMC, the Steadman Clinic and the Town of Vail each a one- third share of these costs on a monthly basis throughout the duration of this consulting Resolution No. 10, Series 2011 I 84/29/2811 16:21 1207336427 FXC CASTLE RACK PAGE 10/1 Triumph !redevelopment Consulting Agreement Vail VaUey Medical Complex Page 9of9 arrangement. This consulting agreement will continue through the formal presentation and approval of the development concept to the Town of Vail Council. It is cancellable by any party with 30 days written notice. Conclusion In closing. let us reiterate how excited car am about this opportunity. Projects that help solve problems and have a direct pubic benefit strike a chord with Triumph. We look forward to working together to turn this idea into a reality in the months and year to COMP- If you are in agreement with these terns, pleasa countersign this proposal and return it to us with the first month consulting service fee of 515,000 for 55,000 each) to our Vail address. If you have questions, please do not hesitate to calf. Best Regards, -St' - - )F - Steve Virostek James Fangmeyer Principal Principal Countersigned: (:::// ...."--- ' ',"1": /, t,.... 1 ..yoTSteadman Stan Zemler Vail Valley M,edi ter The Steadman Clinic Town of Vail �/' 7iij f/� 1,( Resolution No. 10, Series 2011