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Request for Proposals Issued for Development of Speculative Industrial Flex Buildings

By Colin McEvoy on July 21, 2016

A formal request for proposals (RFP) has been issued seeking innovative proposals from developers to form a partnership resulting in the speculative development of industrial flex buildings in the 30,000 to 60,000 square-foot range in Northampton County.

The Northampton County Department of Community and Economic Development, along with other industry partners, is seeking bids in response to a lack of functional, cost-effective, and appropriately-sized space for small manufacturers.

The full text of the RFP can be found below. It has been publicly advertised in The Morning Call. For-profit and non-profit developers seeking to submit a proposal must register through publicpurchase.com.

 

NORTHAMPTON COUNTY DEVELOPMENT PARTNERSHIP

REQUEST FOR PROPOSALS

SPECULATIVE SHELL BUILDING PROGRAM

RFP NCDP-1645

Introduction:

Northampton County’s Department of Community and Economic Development (NCDCED) in partnership with Northampton County General Purpose Authority( NCGPA), Northampton County Industrial Development Authority (NCIDA) and the Northampton County New Jobs Corp. (NCNJC), collectively known as the Northampton County Development Partnership (NCDP) 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 Northampton County area.

Information and specifications can be downloaded at www.publicpurchase.com. The County will no longer distribute bid specifications from the Courthouse office.  At the initial stage, you will be asked to register (which is free), for both the general website and then with Northampton County as the “Agency”, and will have access to the documents.

AUTHORITY TO DISTRIBUTE BID PACKAGES:

The Public Purchase website is the sole entity authorized to provide this RFP package to interested companies or individuals for the County of Northampton.  If you are working from a RFP package obtained from any other source, you may have an incomplete set of documents.  The County assumes no responsibility for any error, omission, or misinterpretation resulting from the use of an incomplete RFP package.

If you have received the RFP package from a source other than the Public Purchase website, you are advised to register on www.publicpurchase.com to obtain an official bid document.  This will ensure that you receive all RFP related communications and documents, including addenda.

 

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 NCDP 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 NCDP 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 NCDP would partner with the proposer to promote speculative development of a shell-building in the 30,000 SF to 60,000 SF range in Northampton 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 NCDP will not exceed $500,000.

It is important to note, that these organizations 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, NCDP 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 these organizations may be able to assist in financing the project using certain Pennsylvania low-interest economic development loan programs.

 

REQUIRED FORMAT FOR PRELIMINARY PROPOSAL

Sealed envelopes clearly marked “NORTHAMPTON COUNTY DEVELOPMENT PARTNERSHIP

SPECULATIVE SHELL BUILDING PROGRAM RFP Response” containing the proposal must be submitted no later than 2:00 p.m. on August 18, 2016. Proposals received after this time will not be considered. Proposals will be publically opened at 2:30 p.m. the same day.  The proposal opening will consist only of the name and address of recording respondents.  As this is an RFP requiring evaluation, no pricing information will be read aloud at the time of the opening.

Mail or deliver your original response along with four (4) complete copies and one (1) electronic submission using a flash drive or similar storage device to:

Mrs. Kathryn Anderson, C.P.M.
Purchasing Manager
Northampton County
669 Washington Street, Room 2101
Easton, PA  18042-7465

I. PROJECT PLAN AND FEASIBILITY:

 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 NCDP.
  • 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 NCDP.
  • A tentative development schedule (including estimated start and completion dates and the timing of all phases of the project).

 

II. DEVELOPER INFORMATION:

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.

 

DEVELOPMENT PROCESS

Schedule

Interested developers are invited to submit a detailed proposal in the format described herein.

Proposals will be reviewed by the NCDP 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 NCDP reserves the right to reject any and all proposals, at their sole discretion.  Furthermore, it is the intention of the NCDP, following selection of a preferred developer, to negotiate the final terms and conditions of an agreement.

 

EVALUATION CRITERIA

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 NCDP or members of their respective boards or committees regarding this RFP.  Failure to comply with this request may result in disqualification of the proposal.

 

 

QUESTIONS REGARDING THIS RFP

All pre-award communications relating to this RFP shall be directed through the Public Purchase Platform. 

http://www.publicpurchase.com

Responses will be communicated to all utilizing the same Public Purchase Platform.  No communications received with fewer than six (6) working days until the date the responses are due will be answered. Last day for questions is August 11, 2016.

No verbal responses by any representatives of the staff of the member organizations of the NCDP or members of their respective boards or committees will have any bearing on the RFP responses nor be incorporated into any subsequent award.

Any addendum will be issued to all firms via Public Purchase Platform should one be required.

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