As part of the Town’s ongoing efforts to create a transit oriented development based on the vision established in the Addison Circle Special Area Study, the next step is the selection of a real estate broker to provide the Town with real estate advisory services and represent the Town in an upcoming master developer solicitation for the properties around the future Silver Line Rail Station.
Cushman and Wakefield (C&W) was selected through a Request for Proposals process to provide these services for the Town. C&W and their local team have extensive experience representing may government organizations locally and throughout Texas, including recently representing DART on the 11-acre Mockingbird Station East development. C&W’s scope will include:
- Strategic Planning and Project Underwriting – C&W will work with Town staff to develop the appropriate background material and a decision matrix that will guide the solicitation strategy, evaluation criteria and developer selection process. This will include outreach to adjacent property owners to potentially coordinate their involvement in the solicitation.
- Create & Approve Marketing Materials – C&W will develop a detailed Request for Proposals (RFP) and associated marketing collateral.
- Phase 1 Solicitation of Initial Proposals & Pre-Bid Conference – C&W will promote the offering by sending a brochure to qualified developers/investors, posting marketing materials on public marketing channels, contacting prospective applicants, coordinating site visits, and organizing a pre-bid conference with Town staff and prospective developers.
- Initial Proposal Analysis & Phase 2 Solicitation of Formal Proposals – C&W will review initial proposals and present them to Town staff and assist the Town with narrowing down the proposals to a smaller group that will then be requested to submit formal proposals.
- Formal Proposal Evaluation & Master Developer Selection – C&W will review formal proposals and present them to Town staff and assist the Town with selecting a preferred developer.
- Contract Negotiation & Execution – C&W and Town staff will determine appropriate transaction structure and negotiate on the Town’s behalf. C&W will assist the Town to finalize and execute the appropriate agreements to finalize the developer selection. This could include a ground lease, land purchase and sale agreement and/or a development agreement.
The estimated completion date of Cushman and Wakefield's contract would be December 31, 2021, but could be extended with four additional one-year terms. Cushman and Wakefield would be compensated based on the following:
- Monthly Consulting Fee – A monthly consultant fee of $10,000 per month will be accrued beginning on the effective date of the agreement and would be due at the end of the contract. This consulting fee would be credited towards any transaction fee at the end of the process.
- Marketing Expenses – C&W will have a marketing budget not to exceed $25,000. This will be used for signage, aerial and ground photography, printing materials, renderings, etc. The marketing expenses will also be credited towards any transaction fee at the end of the process.
- Transaction Fee - If the solicitation results in a ground lease structure, then C&W will be paid 4% of the ground lease rent for the first 10 years of the lease. If the properties are sold, then C&W will be paid a tiered commission for each transaction based on the gross sale price of each property based on the amounts below:
On the First $2,999,999 million - 3.00%
On the next $3 million to $5,999,999 million – 2.75%
On the Next $6 million to $8,999,999 million – 2.5%
On the Next $9 million to $11,999,999 million – 2.25%
On the Next $12 million to $14,999,999 million – 2.00%
On the Next $15 million to $17,999,999 million – 1.00%
On the Next $18 million to $20,999,999 million – 0.50%
On the greater than $21 Million - 0.25%
- Success Fee – To further incentivize C&W to push developers to achieve the highest and best use of the property in accordance with the adopted vision, a success fee is being proposed. The success fee would kick in if the proposed certified construction costs of the project exceeds an agreed upon baseline improvement value. The base line improvement value assumes a development with a value of $216,000,000 could easily be constructed. The success fee will be based on 30 basis points of the value created above the baseline improvement value.
The attached table shows various scenarios for how the transaction fee and success fee would be calculated based on different types of development proposals. |