RFP Issued for Lehigh County Speculative Industrial Flex Buildings

By LVEDC Staff on November 22, 2016

Responses Due by December 30, 2016


 Lehigh’s Economic Advancement Project, Inc. (LEAP), in partnership with the Lehigh County Department of Community and Economic Development (LCDCED) and the Lehigh County Industrial Development Authority (LCIDA), collectively known as the Lehigh County Development Partnership (LCDP) are seeking innovative proposals from for-profit and non-profit developers to form a partnership that will result in the speculative development of industrial flex building(s) in the 30,000 SF to 60,000 SF range in the Lehigh County area.

Background / Problem:

Recent research conducted by LVEDC has identified that the vacancy rate for industrial properties in the range of 30,000 SF – 80,000 SF in the Lehigh Valley is approximately 4.5%.  This research also determined that if the net absorption rates remain static over the next five years the vacancy rate will fall to close to 3%.  This may present a significant problem for our business attraction and expansion efforts as we try to promote continued growth in our small manufacturing base which, following the decline of Bethlehem Steel, helped to promote a strong diversified Lehigh Valley economy.    The fact is, even at the current vacancy rate, the majority of the space that is available for purchase or lease to small industrial firms is in need of renovation, inaccessible, functionally obsolete or, in the instance of desirable space, priced beyond what the market will bear.  This lack of available, cost-effective, appropriately-sized space is forcing our growing local industrial and manufacturing firms and our similarly-sized attraction prospects to consider locating or expanding elsewhere.

The lack of development of smaller foot print industrial structures comes as a result of many economic factors.  Static Industrial lease rates and the cost of land, resulting in downward pressure on ROI, has created apathy in the development community towards constructing smaller industrial buildings “on spec.”  Furthermore, the limited amount of subdivided land that lends itself to structures of this size further complicates the problem.

The fact that little speculative construction of flex-industrial space is occurring creates a conundrum.  It is widely known that our permitting and approval process, in many areas of the Lehigh Valley, is taking longer than ever.  This has removed the significant “time-to-market” advantages our area once held over our neighboring states to the East and North.  With LVEDC’s recruitment efforts ramping up and the continued demand from New Jersey & New York-based industrial and manufacturing companies seeking new locations in our region, we must be able to provide readily available product for these companies to be competitive in our attraction efforts.  Furthermore, our growing existing industrial and manufacturing companies, that are so important to the creation of new jobs in our economy, are struggling to find options in the Lehigh Valley that will allow for their expansion, forcing them to consider other locations for their operations.

Proposal Requirements and Additional Information:

The LCDP is seeking proposals from regional and local developers experienced in working with small industrial and manufacturing companies in providing cost effective building solutions.   It is the intention of the LCDP to incent the development of single-tenant buildings that would cater to small manufacturing concerns or multi-tenant buildings that would provide accommodations for manufacturers, post-incubator and/or emerging growth companies.  The responsive proposal should provide a strategy whereby an entity or entities of the LCDP would partner with the proposer to promote speculative development of a shell-building in the 30,000 SF to 60,000 SF range in Lehigh County.   An eligible shell building project can include the redevelopment of an existing structure, so long as the building can be cost-effectively delivered for flexible industrial use.

Possible scenarios may include, but not be limited to providing funds for the following:

  1. to offset the carrying costs of the resulting property for a period of time following completion;
  2. to offset interest expense during construction;
  3. to provide low-interest rate (potentially subordinated, allowing for higher LTV) source of financing for the project; and
  4. in the form of a direct equity injection into the project.

Proposals should include a prospective site for the shell building project and the developer should be able to provide verification of site control.   The specifications for the facility should focus on providing functionality and value to the end-user.  Any shell building that is developed as a result of this program should be able to be fully completed for use by an industrial tenant or owner/occupant within 90 days following the completion of internal design.  It is expected that the amount directly contributed, to any one project, by LCDP will not exceed $500,000.

It is important to note, that the LCDP will be seeking not only a real financial return on this investment, but an economic development one as well.  The understanding of both, in the context of the proposal, will be critical to its success.

Finally, LCDP is seeking to add additional, like-minded, non-profit organizations to this partnership.  This may increase the amount of funds available for a single investment substantially.  It is also possible that one or more of the organizations in LCDP may be able to assist in financing the project using certain Pennsylvania low-interest economic development loan programs.


All submissions, including attachments, should be provided electronically using a flash drive or similar storage device.


As a minimum, please provide the following:

  • A narrative on the proposed project including a description of the proposed shell-building, the economic development considerations of the project, the status of site control and an overview of the relationship that is being contemplated with LCDP.
  • A map or plans showing the proposed site location with a description outlining the availability of required infrastructure and access to major roads and highways.
  • A pro-forma detailing project sources and uses (including a preliminary description of all proposed financing methods for the project), revenues and expenses and proposed returns to LCDP.
  • A tentative development schedule (including estimated start and completion dates and the timing of all phases of the project).


Please provide the following:

  • The Name of developer and legal status (i.e. sole proprietorship, corporation, partnership, non-profit corporation, etc.).
  • A list of all principals and key individuals of the development team, as well as their qualifications, background, and experience.
  • A description of the developer’s previous experience with similar projects, including a list of recent completed projects including type, location, size, cost, date of completion, and the firm’s/team’s role within the project.
  • Proof of good standing with all local, state, and federal taxing bodies.

NOTE:   Financial records of the developer may need to be reviewed as verification of capacity to follow through with the project.   All financial information that is provided, in this context, will be confidential and will not be released to any other source without Developer’s prior written permission.



Interested developers are invited to submit a detailed proposal in the format described herein. Proposals must be received by the Lehigh Valley Economic Development Corporation, 2158 Avenue C, Suite 200, Bethlehem PA 18017, no later by 5 pm on Friday December 30, 2016.  Proposals received after this time may not be considered.

Proposals will be reviewed by the LCDP at meetings to be scheduled following the deadline.

Depending on the number of submittals, the organizations may establish a shortlist for interviews

in order to select a “preferred developer”.    The LCDP and its individual partners reserve the right to reject or not to proceed with any/or all proposals, at their sole discretion.  Furthermore, it is the intention of the LCDP, following selection of a preferred developer, to negotiate the final terms and conditions of an agreement.  The conditions of the agreement will include that the successful developer will need to follow all applicable laws, including any public bidding and/or minimum wage requirements that may be applicable to the project.


The criteria used to evaluate the submissions will include, but not be limited to:

  • The quality and functionality of the building proposed.
  • The sufficiency of development experience of individual (s) and/or firms (s))
  • Experience in working with economic development organizations.
  • The economic development impact of the proposed project.
  • The strength of the financial proposal.
  • The location of the proposed site and the level of site control established.
  • Project readiness.
  • Risk level to the partnership and/or individual entity participating.
  • The ability to scale the relationship to additional projects.
  • “Pay-back” / Return-on-Investment Timeline.

In order to ensure a fair review and selection process, firms submitting proposals are specifically requested not to make contact with staff of the member organizations of the LCDP or members of their respective boards or committees regarding this RFP.  Failure to comply with this request may result in disqualification of the proposal.


Lehigh Valley Economic Development Corporation

John Kingsley, Vice President, Finance


2158 Avenue C, Suite 200

Bethlehem, PA 18017

Phone: 610-216-0937

Important Dates:

Proposal Due Date: Friday, December 30, 2016 – No later than 5 pm.

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