At least what they were willing to divulge in open session in about a half hour. I was surprised they did anything in open session, since it was noticed for closed session.
“Staff” Overview of Where we are at
George Austin starts off by updating them as to where they are. He says when they met on July 7th they authorized the preliminary agreement, on July 15th it was executed by the parties and sent to the council that evening. He says on May 19th they set up a two step process to bring a preliminary development agreement on July 29th to the Board of Estimates and July 7th to the council, a preliminary development agreement. They did that, it was signed and that was followed by a final agreement, which is now called an amended and restated agreement. That will come to them on August 24, “if they are able to complete it” and to the council on September 1st.
There were a number of issues, they “punted” on a number of items, because of the amount of time they had and they have deal points that need additional negotiation priority to August 24 BOE meeting, some of them may need to be discussed in closed session.
– Cost of parking to be paid by EXAS employees
– Definition of parking income (from CDA owned ramp leased to the developer)
– Di sposition of interim revenue from the unused EXAS and hotel parking stalls (they are all built in phase 1)
– Parking Lease Term Sheet
– Reporting and oversight mechanism for ensuring compliance with Jobs-TIF terms
– Parking ramp design and hotel room count
– Project labor agreement
– Labor peace agreement
– Targeted business participation
– Reacquisition of property prior and post commencement and the impact on the TIF Guaranty
– Insurance
Austin says that the parking is taking a tremendous amount of time. He says there is a lot of work to do on the hotel before the final closing in December.
There are items to be provided by JDS Development/EXAS prior to August 24 Board of Estimates meeting.
– Completed TIF Application (should be in by July 31st and they expect it sooner)
– Preparation of a mutually acceptable Purchase Agreement by August 15
– Preparation of a mutually acceptable interim city ground lease
– Debt and Equity commitments and the amount of construction loan proceeds to be disbursed at closing by the lender(s)
– EXAS lease agreement
Those have to be provided by JDS and Exact Sciences to move to the final stage of this agreement.
Analyses/information to be provided to BOE by Negotiating Team by August 24
– Tif Gap Analysis with the Financial Term Sheet
– Analysis of potential impacts on the parking utility of 650 additional parking stalls if public parking is allowed in leased area during “off hours”
– Analysis and impact on parking utility and city budget from 17-month loss of revenue from Government East parking structure
– Evidence of the viability of a 1:4 or 1:5 car/room ratio for the proposed hotel as used in other “shared parking” environments
– Clarification of the type of financial instrument and terms of the city’s $12M investment in jobs TIF
– Clarification of the type of financial instrument for the $12/12 year guarantee offered by Exact Science
– Clarification of reporting and oversight mechanism for ensuring compliance with jobs TIF terms
– Clarification on whether or not Exact Sciences will guarantee the lease of the entire space, and if so, what type of financial instrument will be used for the guarantee
– Report by real estate attorney consulting with teh city on how optimal protections of the city’s interests in the 1031 tax credit land swap
CALENDAR
Week of July 20
– Hold 2 negotiation sessions
– Focus on
– – Parking issues with EXAS and parking lease term sheet
– – TIF Application submittal
– – PLA/Labor peace
Week of July 27
– Board of Estimates Check-in – July 27
– Hold two negotiation sessions
– Focus on
– – Reacquisition issues
– – Parking design and hotel room count
– – Reporting and oversight mechanism for Jobs-TIF terms
Week of August 3
– Hold 2 negotiation sessions
– TIF Gap Analysis
– Insurance
– Targeted Business Participation
Week of August 10
– Hold final negotiation session
– Complete final draft of the Amended Agreement
Week of August 17
– Complete Negotiating Team Report, Amended Agreement and Draft Council Resolution
– Send documents to BOE – By August 20
Week of August 24
– Board of Estimates presentation on amended agreement – August 24
Week of August 31
– Common council consideration of Amended Agreement – September 1
Week of September 7
Week of September 14
– Execute Amended and Restate Development Agreement, Purchase Agreement, Assignment Agreement, City Ground Lease
They have targeted a closing on September 15.
Deliverables from the Project Agreement
Prior to Project commencement Closing – December 4, 2015
– Hiring Diversity MOU
– EXAS TDM plan
– Land Use Approvals
– Construction Administration Agreement
– Council approval of hotel plans (i.e. style, size, location, room count, brand, operator, room block agreement, targeted business participation, labor agreements.)
At Project commencement closing – December 4, 2015
– Conveyance of public units
– Master lease to developers
– Condo declaration recording
– Disbursing Agreement
– Exact Jobs TIF Guaranty
– JDS Relocation Guaranty
– Parking TIF Guaranty
– Collateral Assignment Guaranty
– Developer’s Corporate Parking Guarnty
Post Project Commencement Closing
– Parking Structure Construction Contracts
He says this is just an overview to show them the project pace if they choose to go forward in September.
Bob Dunn Testimony
He says the outline gives you a good sense of the issues and timing and pace to get this to closing. He says that on parking they have some ideas that they will try to resolve this week, they should have a draft of the TDM by the time they have the amended agreement. Some of the issues with the leases, they are looking to push that back to make it smoother. They are also submitting letters for equity and debt a month ahead of schedule so they have time to work on that. He is trying to pick up pace on issues most important to the city so they don’t have the pressure of time. Some of the other things are more manageable, like the project labor agreement. They are working on documents to be ready for this schedule. He says the TIF application will be submitted tomorrow (i.e. today). He says there is a lot of activity and they are working on the things that are most critical so they don’t have the pressure of time.
Alder Mo Cheeks asks Dunn about the labor peace agreements, he says that they reference the Hilton Hotel in this, but that is not up to the standards that people expect. Dunn says that the PLA for construction is something they are very comfortable with, they have an excellent relationship with them. For the hotel, the labor peace agreement, they have always looked to the Hilton agreement as the one reference point that we have in the market, they got language to them, he says that language did not sound monotonous, he thinks they can work through that.
Alder Barbara McKinney asks about the Hiring Diversity MOU and where the Urban League fits into this. He says that Mr. Conroy can answer that, it is an agreement between them and the Urban League.
Kevin Conroy says he is on the board of the Urban League and has been for 4 years so there is a commitment by the company to long before this project. Anna Hooker, the head of the laboratory, came to him two years ago to increase diversity especially in the labs and they have been working on a program and hope to expand on it, this is not new it has been important for a long time. He didn’t know about the MOU, but it has been a part of what they have been doing for a long time. McKinney asks if there has been a recent conversation about putting the pieces together to show the full package with strong commitments and how we can measure the goals. He says he will go back and find out how robust it is. He will do this in writing and tellt hem what the program is and what it will be in the future.
Alder Denise DeMarb says this is not part of the contract, it is something your company is supporting, but not part of this negotiation. He says he will check, they have been doing it. DeMarb says that this is a separate company initiative.
Alder Marsha Rummel asks since this is a jobs TIF- how do we get reporting. Seems like they should get reports on this.
The Mayor says the development agreement says “preparation of a mutually acceptable hiring diversity MOU” to be executed at the project closing. Rummel says that they could have reporting and it is part of the contract. Conroy says that this might not be limited to the Urban League, the company is really committed to having a diverse workforce.
Closed Session?
The mayor asks if they want to go into closed session or if they want to discuss more in open session.
Conroy says that before they go into closed session, he says he knows there has been discussion around parking and he says he wants them to hear from him their perspective on parking. There are 370 parking spots to the company, their goal is to have more than required in the contract of 300 employees, he expects it to be well north of that and he would expect to not have enough parking for all the employees on day 1. He says they are committed to having a proactive program, either incentives not to drive or disincentives to drive and want to use their feet, bicycles and public transportation. He says he can ride his bike to work. If they end up with 600 – 800 employees, they only have 400 – 500 parking spots and we need to encourage other ways for people to get to work.
Alder Mark Clear says he appreciates the statements but they fly in the face of what Mr. Aurora (sp?) said at the last council meeting where he kind of insisted on free parking being available to at least some of the employees. He says when you charge for parking that is a disincentive and that free parking isn’t a disincentive. Can you explain that. Conroy says that with time you get wisdom and we are really trying to focus on the business and he didn’t have a chance to speak with him. The overall economic package is critical, somewhere else parking will be free (Clear says to the employees). He says that it is more expensive to be downtown and no everyone will get a parking spot and simple math dictates that not everyone will get a parking spot, much less a free one. This is one of the attractive things about being downtown, a lot of people will walk to work and many of the younger workforce already live around the square and take the bus now and would rather walk a shorter distance. If we have 900 employees there will be half that many parking spaces.
They move into closed session. I understand the need, I just hope they can be as transparent as possible and give information to the public as it can become available, as this is being rammed down our throats. Motion passes unanimously. Mayor says they are in closed session. DeMarb says “shut the doors” and the mayor says “disconnect”.
