Friday, January 9, 2009
Benfield housing developer choice examined
The Carlisle Housing Authority Selection Committee used criteria established months earlier when it reviewed the three proposals submitted by developers interested in constructing and maintaining senior affordable rental housing on the Benfield Land.
Each firm was scored as “Highly Advantageous”, “Advantageous” or “Less Advantageous” in each area of the criteria published in the Request for Proposals (RFP), which included: construction experience and capacity, financial experience and capacity, feasibility of the development plan, quality of proposed design and product, cost-control ability and current capacity and ability to work with government.
One firm, the Neighborhood of Affordable Housing (NOAH) was ranked consistently in the “Highly Advantageous” category for all the criteria and was the first choice of the committee. The other firms under consideration were Common Ground Development Corporation and JNJUHL and Associates, LLC.
Specifics of the selection criteria and how the three firms were evaluated is summarized below. See also, (“Housing Authority picks Benfield developer,”page 1.) The selection committee consisted of Housing Authority Chair Alan Lehotsky, members Susan Stamps, Steven Perlman and James Bohn, and Administrative Coordinator Elizabeth Barnett.
Construction experience and capacity
According to the explanation given in the RFP, developers were evaluated for construction experience and capacity “as to the extent and type of the construction experience, including the number, size and scale of projects, the quality of workmanship, inclusion of green-building practices, and the timeliness of completion. Greater weight was given to residential projects, especially new multi-unit developments.”
A firm was ranked as “Highly Advantageous” if the majority of the development team had more than five years experience in housing development including new multi-family housing and the team had a significant role in at least ten housing developments. At least three of these projects had to have some affordable units. To be ranked “Advantageous,” half the development team had to have five years experience and the team had significant roles in at least five housing developments and at least one had affordable units. To be ranked “Less Advantageous,” the development team would have had no experience in affordable housing.
During the discussion on this criteria, all of the selection committee agreed that Common Ground and NOAH were ranked as Highly Advantageous. JNJUHL was ranked as advantageous.
For financial experience and capacity, “developers were evaluated on the extent of their financial strength to support the most favorable terms from a construction lender, their demonstrated capacity to absorb losses or cost overruns, the extent to which financial references verified financial capacity of the developer, and prior history of completing projects within budget and time constraints. Developers are responsible for securing construction financing and are required to submit a Letter of Interest from an established financial institution that indicates willingness to fund the Project,” states the RFP.
For a firm to be ranked as “Highly Advantageous,” the RFP spells out, “The developer has to have a good credit history, including no bankruptcy within the past seven years and no pending litigation. The developer has a demonstrated capacity to secure the necessary financial resources to complete the development, absorb losses or overruns and have a borrowing capacity of at least $3 million.”
To be ranked “Advantageous,” “The developer needs an acceptable credit history with no bankruptcy in the last seven years and no pending litigation that would impact his/her ability to complete the development. References indicate that the developer has access to the financial resource to complete the development and a borrowing capacity of at least $2 million.” The developer has to be able to secure financing for a project the size of the Benfield project.
To be ranked “Less Advantageous,” the RFP states, “The developer has a questionable credit history that might potentially jeopardize access to necessary financing. The developer has not undertaken a project of the same size or scope as the Benfield Development and does not have a track record thus far to secure financing at a level… necessary to complete the Project.”
There was some discussion about how to rank the three firms for this criteria. Bohn said, “#1 [Common Ground] was in a sound financial state…I was not that impressed looking at their balance sheet but they have other strengths. This would be one of their larger projects; I’m not sure about securing financing.” Chair Alan Lehotsky commented, “They have done a $3.5 million project,” and felt the firm should be ranked Advantageous.
The selection committee referred to the firms by idenification numbers 1, 2 and 3 instead of by name. Lehotsky then added his concerns, “Firm #2 [JNJUHL] is stretched with three large projects in the works, [but] they can get big projects funded.” He ranked Firm #2 between Advantageous and Highly Advantageous. Bohn felt Firm #2 was Less Advantageous, but the rest of the committee did not agree. Barnett said Firm #2 doesn’t have seven years of records because it hasn’t been around that long. Pearlman thought Firm #2 should be ranked Advantageous, and three agreed, so the group ranked it as Advantageous.
There was little discussion about the last firm. Firm #3 [NOAH] had done far larger projects. The committee all agreed that it should be ranked Highly Advantageous.
The next criteria was feasibility of the development plan. The RFP defined this as: “The ability of the development team to understand the complexities of affordable housing development and the challenges posed by the Benfield Property is key to the success of the Development. All development and construction costs must be reasonable and consistent with similar type projects. Developers will be assessed according to how the proposal strikes a balance between project quality and cost.” Firms had to submit a budget for the project. To be ranked “Highly Advantageous,” the firm had to have a clear plan with a reasonable budget as well as an understanding of the project requirements. An “Advantageous” mark would be given to the firm with a clear plan and a reasonable budget and some understanding of the project requirements. A “Less Advantageous” score would be given to a firm that does not present a clear plan and an acceptable budget and also lacks understanding of requirements.
Several of the committee worried that Common Ground would not get funding in time and would have to wait a year to the next funding cycle. Barnett said, “There are stronger teams in this area. Other runners fleshed this out more.” The committee agreed to rank Firm #1 [Common Ground] as Advantageous.
For JNJUHL, several committee members noted their reliance on the infrastructure fund that has been set aside by the Town in case it was needed in the development of the Benfield Property. Bohn said he was torn between ranking the firm as Less Advantageous or Advantageous. After some discussion, JNJUHL was ranked at Less Advantageous.
Committee members were much more enthused about NOAH. Bohn said, “Firm #3 [NOAH] had a very clear plan.” Lehotsky added, “They are conservative with their numbers.” Barnett commented on the higher square footage and flexibility of their design. “They thought about Tax Credits.” Stamps was happy to see “Green Building” aspects in the design and that NOAH expects funding sources for this. Pearlman questioned the financing assumptions. Except for Pearlman, the committee agreed on a Highly Advantageous score for NOAH.
Design quality and adherence to Project Guidelines
The quality of the proposed design was evaluated along with its compatibility with the Project Guidelines. Developers were required to provide preliminary schematic designs of elevations, floor plans and site plans and information on construction materials, where appropriate.
Pearlman was disappointed with Common Ground’s design, which had only one-bedroom units. “I wanted a mix of units.” Pearlman and Barnett felt the design did not make the best use of the site. Lehotsky said, “It isn’t as Carlisle-like as we had wanted.” He ranked it at the low end of “Advantageous.” The group agreed to rank Common Ground as Advantageous.
Lehotsky said JNJUHL had more common spaces than Common Ground. Pearlman did not think the design was appropriate for the space. After a short discussion, the group ranked JNJUHL as Advantageous.
Again, the committee liked the design from NOAH. Bohn said, “They did a very good job. It sits well on the property. It blends in well with the buildings in town.” Pearlman thought the design was well thought through. Stamps liked the common space. Barnett pointed out the 30-plus year reputation of the architect. All agreed to rank NOAH as Highly Advantageous.
Performance and cost control
Firms were ranked on cost control ability and current capacity. Developers were evaluated on their ability to start the project within two months after the contract was awarded and complete the project quickly and within budget as evidenced by past performance, current commitments and the adequacy of procedures devoted to cost control. A developer with a proven track record in beginning and completing projects on time and within budget would be ranked “Highly Advantageous.” A developer that has been able to do this for many of its projects would be ranked “Advantageous.” A developer who has had difficulties accomplishing this would be ranked “Less Advantageous.” Common Ground and NOAH were ranked Highly Advantageous, while JNJULH was ranked Advantageous.
Experience with government
Lastly, the firms were ranked on ability to work with government. Developers were evaluated according to the extent of successful experience working with government-assisted programs. All three firms were ranked Highly Advantageous in this area.
In the end, Firm #3, NOAH, had six “Highly Advantageous” marks. Firm #1, Common Ground, had three “Highly Advantageous” marks and three “Advantageous” marks. Firm #2, JNJUHL, had a score of one “Highly Advantageous,” four “Advantageous” and one “Less Advantageous.”
Each member of the Selection Committee will be handing over a file containing notes of every interview and site visit they participated in while gathering data to make this decision. After all negotiations have ended, these notes will become public. ∆
© 2009 The