REQUEST FOR PROPOSALS RFP # 16D-1. Development of Lot D. RE-ISSUE DATE: March 24, PROPOSALS DUE April 29, 2016 SUBMIT TO

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1 REQUEST FOR PROPOSALS RFP # 16D-1 Development of Lot D RE-ISSUE DATE: March 24, 2016 PROPOSALS DUE April 29, 2016 SUBMIT TO Duluth Economic Development Authority ATTN: Heather Rand, Executive Director DULUTH CITY HALL, ROOM WEST 1ST STREET DULUTH, MN 55802

2 2 TABLE OF CONTENTS BACKGROUND INFORMATION Page 3 SECTION I- PROPERTY INFORMATION Page 7 SECTION II- PROCESS INFORMATION Page 10 SECTION III- PROPOSAL REQUIREMENTS & EVALUATION Page 12 APPENDIX A- PROPOSAL COVER SHEET Page 14 APPENDIX B- FIGURES Page 15

3 3 BACKGROUND INFORMATION About Duluth, Minnesota The city of Duluth stretches 26 miles long, from the mouth of the Saint Louis River estuary, along the river and up the western shore of Lake Superior, the world s largest freshwater lake. The Duluth metropolitan area consists of approximately 280,000 people; the city of Duluth has a population of over 86,000. Duluth hosts over 3.5 million tourists each year who travel from around the world to experience the history, captivating beauty and growing sense of energy and optimism the city exudes. Once the fastest growing city in the United States, Duluth has a rich history that is a source of pride for residents and helps create the city s strong sense of place. Today, Duluth is a driving economic engine, serving as a regional-hub for health care, retail, professional services, tourism, aviation and natural resources. These various industries benefit from Duluth s multi-modal transit networks, accessible by air, water, rail and interstate highways to supply chains and international markets. Along with driving the region s economy, the Duluth metro-area champions the region s postsecondary education. Supporting over 24,000 college, university and technical students attending the University of Minnesota-Duluth, College of Saint Scholastica, MNSCU Lake Superior College, and Duluth Business University, offer an educated workforce with a variety of skills and training to accommodate the growing needs of employers. Duluth enjoys a nationally renowned array of recreational opportunities; in 2014 Duluth was voted the Best Town in America by Outside Magazine [ With over 6,800 acres of City-parkland, 178 miles of trails for hikers, bicyclists, and cross country skiers, and the construction of the Duluth Travers, soon to be one of the world s largest urban mountain biking systems, Duluth offers enthusiasts a variety of outdoor-recreation opportunities for every season. Spirit Mountain Recreation Area

4 4 About the Waterfront Duluth s waterfront has been the impetus for economic growth and industry in the area for over 150 years. In the 1890 s, Duluth was the 5 th largest seaport in the U.S. and through the early 1900 s, it handled more shipping tonnage than New York City. As a result of the booming shipping industry, former shallow-water swamps that lined the harbor were filled and transformed into solid land with adjoining slips, spurring the development of industrial and commercial waterfront facilities. As the economy slowed and industrial use of Duluth s harbor declined in the 1960 s, the landscape began to change. In 1966 the Duluth Arena Auditorium, now known as the DECC, was built to host college-hockey along with a variety of other sporting and entertainment events. [For information about future DECC-events, visit This deviation from historically industrial and commercial use continued over the decades, eventually resulting in a 1985 Duluth Downtown Waterfront Plan, which called for greater infrastructure and landscape investments and focused on creating more recreational and pedestrian-accessible opportunities. In the 1990 s the Duluth Economic Development Authority, or DEDA, purchased a series of property along the bay to encourage this vision of development. Lot D, the subject of this RFP, was among those properties. View of the Bayfront and Park Point- photo with permission from Pier B Resort Investment from both the public and private sectors continues to change the face and nature of Duluth s harbor: Canal Park has developed into an amenity-rich destination for tourists, and the Bayfront, with the DECC, Amsoil Arena and Bayfront Festival Park, has become the region s epicenter for nationally renowned entertainment and sporting events. The energy and evolution of the waterfront has also created a burgeoning tourist industry that generates over $780 million in annual economic impact.

5 5 Tall Ships on the Bayfront Each year visitors line the piers and shoreline to watch as ships slowly pass under the iconic Aerial Lift Bridge, and events in Canal Park and along the Bayfront, such as Tall Ships, Grandma s Marathon and the Bentleyville Tour of Lights, continue to attract visitors by the hundreds of thousands. Bayfront Blues Festival- photo with permission from VisitDuluth.com

6 Though the use and the nature of the harbor has evolved in recent decades, Duluth continues to host an active, working-waterfront; one that encourages and compliments its growing tourist industry. Today, Duluth is ranked among the top 20 ports in the U.S. (by tonnage). Vessels leave Duluth s shores carrying iron ore, coal, grain, salt, wind energy systems, and other commodities, transporting them across the Great Lakes, to the Atlantic Ocean and around the world. What s Happening Now Over the past several years Duluth has witnessed incredible investment into the community. A number of significant business expansions including maurice s/ Ascena Retail Group [ AAR Aircraft Services [ Cirrus Aircraft [ and Ikonics Corp [ as well as a burgeoning craft-spirits industry including local breweries Bent Paddle [ Lake Superior Brewing Company [ and Blacklist Artisan Ales [ as well as Vikre Distillery [ resulting in a total of around 2,700 new jobs in the Duluth metro area over the next few years. Additionally, experts anticipate a relative boom in residential building construction to accommodate new workers to the area with a projected 33% increase in construction jobs. This expansion in residential development is evidenced by the over-400 units of market-rate housing currently under construction throughout the city. Further, almost $200 million of investments in development projects downtown and two future housing developments are fueling a surge in the construction industry. In support of this development, and to accommodate future growth and sustainability of the downtown/waterfront region, the City of Duluth is preparing to roll out the reconstruction of Superior street, Duluth s downtown main street, and the underlying steam-system, a massive undertaking that will create a more efficient, affordable and sustainable citycenter. There is an enormous amount of optimism regarding Duluth as an investment, as is evident by both the work that has been done, and the projects currently in development. What Others Are Saying About Duluth: 6 One of The Best Places For Business And Careers 2013 (Forbes Magazine) Top Port City by Railway Industrial Clearance Association (RICA) Top 10 Dream Town (Outside Magazine) Duluth has Cleanest Air as surveyed by the American Lung Association Top 10 Places to Raise an Outdoor Kid (Backpacker Magazine) Top 16 Places to Live in the U.S. by Outside Magazine;

7 7 In summary, Duluth is home to abundant natural resources and recreation, robust industry clusters, top-notch educational campuses, and some of the most breathtaking natural scenery in the country qualities that make the city an unrivaled place to live, work and play. Explore more of what Duluth has to offer via the links below: - Visit Duluth: - Duluth Entertainment Convention Center: - Duluth Area Chamber of Commerce: - City of Duluth Parks and Recreation: I PROPERTY INFORMATION I-1. Purpose & Project Overview. The purpose of this two-part request for proposals (RFP) to invite developers to submit proposals for the development of Duluth Economic Development Authority ( DEDA )-owned property, Lot D, located northeast of Compass Minerals and southwest of the Pier B development (see Figures 1 & 2, Appendix B). The process is discussed in greater detail in section II-1 below. I-2. Property Attributes and Conditions. Lot D consists of approximately 12 acres of flat land; much of the site is gravel and hard-packed soil, with segments of brush and grasses following the perimeter of the lot. The site offers the following features: - Approximately 1,550 total feet of waterfront, including frontage on the adjacent slip and on the Lake Superior harbor - Premium views of the iconic Aerial Lift Bridge and Duluth s Park Point - Access to the robust maritime activity of the world s furthest-inland freshwaterport - Approximately 675 feet of road frontage on Railroad Street - Status as one of the last remaining, undeveloped properties on the bay A raised concrete foundation of approximately one (1) acre in size is located on site, as shown in Figure-3 (Appendix B). According to preliminary structural testing, this foundation was constructed in the 1970 s and consists of a steel-reinforced concrete slab that is supported by steel reinforced concrete beams and steel pipe piles. Preliminary investigations found the foundation system to be in good condition. The report suggests that the design loads are common for industrial buildings and future building projects could explore opportunities for the reuse of the foundation for multi-story complexes and commercial ventures. Upon request, the preliminary report will be made available to Proposers who are invited to participate in Part Two of the RFP process.

8 There are known environmental conditions present in the property including necessary seawall-repair and soil-contaminant remediation. Known details and documentation will be provided upon request for those proposals selected to participate in Part Two. 8 Photo with permission from Pier B Resort A January 8, 2016 formal appraisal established a value of $2,100,000 for the property. This valuation assumes the ability to restore the site at reasonable costs that are consistent with nearby remediation work. I-3. Property Zoning & Uses. Lot D is currently zoned as Mixed Use Waterfront (MU-W) (see Figure-2, Appendix B). The following definition is provided by the City of Duluth s Unified Development Chapter and is intended to provide a framework for potential best-uses in developing the property: The MU-W district is intended to provide for waterfront-dependent commercial uses and medium to high density residential development. Intended non-residential uses include visitor-related retail and services, lodging, recreational facilities and maritime uses, as well as retail and service uses that take advantage of the waterfront setting. Development may include horizontal or vertical mixed use, and should facilitate transit and pedestrian connections between developments and the surrounding areas and community. The two neighboring properties of Compass Minerals and Pier B provide Lot D with the opportunity to serve as a transitional property between the industrial uses of the workingharbor, and the entertainment, dining and hospitality uses present on the Bayfront.

9 I-4. Compass Minerals neighbors Lot D to the Southwest (see Figure-2, Appendix B). Declared one of America s Most Trustworthy Companies, 2015 by Forbes, Compass Minerals is the top producer of salt in North America and the United Kingdom. Formerly North American Salt Company, this facility started in the 1880 s, making it one of the oldest operations in the Twin Ports. For more information about Compass Minerals operation in Duluth, visit 9 Photo with permission from DuluthShippingNews.com It has been determined that a fence will be erected at the southeastern edge of the property, along the Compass Minerals property line and extending along a small portion of Lot-D property (see Figures-4 & 5, Appendix B). The purpose of the fencing is to promote safety and security while ships dock at Compass Minerals, about 6 to 8 times per year (for lake-freighter offload) for a duration of 2 to 3 days per offload-event. The proposed fencing-area would include utilizing bollards to tie down lake freighters to shore as they deliver salt to our existing operation, utilization of airspace above the fencing-area by the unloading arm of the lake-freighter that transfers salt from vessels to Compass Minerals property, and integration of setbacks from tie-downs and offload activities. Along with maintaining compliance with the Coast Guard and Homeland Security, the fence-area will encourage a more effective transition between land-uses. I-5. Pier B Resort and Hotel, Northeast and across from Lot D (see Figure-2, Appendix B), is the newest addition to the Bayfront area and represents new energy and opportunity that Duluth s vibrant waterfront affords. Originally constructed in 1890 to store limestone for shipping, the Pier B site has a long working history on the harbor; until 2008 the site was owned and operated by the Lafarge Cement Company. Today, construction of the new development is well underway. Pier B Resort and Hotel, featuring 140 rooms, indoor and outdoor event space, and the first truly-waterfront restaurant in Duluth, is set to open June of 2016.

10 10 For more information on Pier B visit Architectural Rendition Photo with permission from Pier B Resort II PROCESS INFORMATION II-1. Process Overview. Due to the high-profile nature of this site and its extraordinary potential, the DEDA has decided on a two-part RFP process. Part One of the RFPprocess provides developers the opportunity to submit development concepts and initial project designs ( Proposals ) for Lot D. The DEDA has assembled a review panel (Panel) for this RFP process. The Panel will review all Part One Proposals and will select those that best fulfill the requirements discussed in Section III of this document. Those Proposals will then be invited to participate in Part Two of the RFP process. Part Two Proposals will require further documentation that provides greater depth and specificity. The RFP-Part Two will be posted by the DEDA in accordance with the schedule outlined in I-2 below. Based upon the results of the RFP-Part Two review, the DEDA will consider an Option Agreement with the developer of the highest-rated Proposal.

11 11 II-2. Revised Calendar of Events. The DEDA will make every effort to adhere to the following schedule: Tentative Dates: RFP-I Revised Release Date March 24, 2016 Submit Intent to Propose (optional) April 8, 2016 Deadline to Submit Questions (see II-5) April 15, 2016 RFP-I Submissions Due 4 p.m. April 29, 2016 Review Panel Selection of Finalists May 13, 2016 RFP-II Release Date May 16, 2016 RFP-II Submissions Due 4 p.m. June 24, 2016 Review Panel Selection June 30, 2016 DEDA Consideration of Option Agreement July 27 or August 24, 2016 II-3. Type of Contract. Should this RFP process result in the sale of the Lot D property, all terms and conditions of the property conveyance will be outlined in, and governed by, a Development Agreement as approved by the DEDA. II-4. Rejection of Proposals. DEDA reserves the right, in its sole and complete discretion, to reject any and all proposals or cancel the request for proposals, at any time prior to the time an Option agreement is fully executed, when it is in its best interests. The DEDA is not liable for any costs the Proposer incurs in preparation and submission of its proposal, in participating in the RFP process or in anticipation of execution of the Option agreement. II-5. Questions & Answers. Any questions regarding this RFP-Part One must be submitted by to the DEDA Office at deda@duluthmn.gov no later than the date indicated on the Calendar of Events. Answers to the questions will be posted as an Addendum to the RFP as found on II-6. Addenda to the RFP. If the DEDA deems it necessary to revise any of this RFP before the proposal response date, the DEDA will post an addendum to its website ( It is the Proposer s responsibility to periodically check the website for any new information. II-7. Intent to Propose. Interested parties are encouraged to send an to deda@duluthmn.gov indicating their intent to submit a Proposal by April 8th. Indicating an intent to propose does not obligate the interested parties, however it will ensure that they will be notified when any addenda or other notices are posted pertaining to the RFP Part One. II-8. Proposal & Response Date. To be considered for review, five (5) hard copies of the Proposal, using the format provided in Section III, must arrive at the DEDA office on

12 or before the time and date specified in the RFP Calendar of Events. DEDA will not accept proposals via or facsimile transmission. No late Proposals will be considered. Each proposal page should be numbered for ease of reference. All materials submitted in response to this RFP will become property of the DEDA and will become public record after the evaluation process is completed and a Development Agreement is executed with the selected Developer. II-9. Signatures. An official authorized to bind the Proposal to its provisions must sign the Proposal. If the official signs the Proposal Cover Sheet (Appendix A to this RFP) and the Proposal Cover Sheet is attached to the Proposal, this requirement will be met. For this RFP, the proposal must remain valid until an Option is fully executed. II-10. Conflict of Interest. A conflict of interest exists if a proposer has any interest that would actually conflict, or has the appearance of conflicting, in any manner or degree with the performance of work on the project. Either certify: (i) that your company is unaware of any potential conflict of interest, or (ii) indicate the potential conflict(s) and the nature of such conflict. If there are potential conflicts, identify the municipalities, developers, and other public or private entities with whom your company is currently, or have been, employed and which may be affected. II-11. Notification of Selection. Entities whose Proposals are not selected to participate in the RFP Part Two will be notified in writing. 12 III PROPOSAL REQUIREMENTS & EVALUATION III-1. Documentation. Part One Proposals must include the following detail and documentation: a) Site Plan i. Conceptual-level architectural renditions of the proposed project, including design/location of any improvements within a site plan. ii. Evidence showing how Proposer will maximize the value of the site s waterfront location. iii. Clear depiction of how the proposed project will create an effective transition between industrial and mixed-use properties. b) Projected Economic Impact Estimates for the following items: i. Total job creation ii. Total increase in tax base

13 13 iii. Total capital investment into the project c) Qualifications & Experience a. Specific examples of prior projects that are similar in nature to the proposed development. b. Resumes of Proposal team-members, including any members of firms that Proposer plans to partner with for this project. III-2. Evaluation. The Panel will evaluate submittals based on the following factors: 1. Creative and Effective Use of Property (i) Maximization of its waterfront location (ii) Demonstration of a successful transition between neighboring property uses (iii) Creative, thoughtful and effective use of entire site, including possible reuse of the existing foundation 1 2. Projected Economic Impact [see III-1(b) above] 3. Developer s Qualifications and Experience [see III-1(c) above] 1 The 12-acre size of the site offers the potential for several structures and/or businesses to be developed and operate simultaneously, making more efficient use of the property. Respondents are encouraged to incorporate multiple businesses in their proposals if their development project will not make use of the entire property.

14 14 APPENDIX A - PROPOSAL COVER SHEET CITY OF DULUTH RFP# 16D-1 Proposer Information: Company Name Mailing Address Website Principal Contact Person Contact Person s Phone Number Contact Person s Address Federal ID Number Submittals Enclosed and Separately Sealed: Technical Submittal Cost Submittal Signature Signature of authorized official. Signatory consents and agrees to adhere to the terms outlined in this proposal: Printed Name Title FAILURE TO COMPLETE, SIGN AND RETURN THIS FORM MAY RESULT IN THE REJECTION OF THE PROPOSAL

15 15 APPENDIX B Figure-1 Property- Relative Location Downtown Lot D

16 16 Figure-2 Property- Aerial, Zoning MU-W MU-W I-G

17 Figure-3 Location of Concrete Foundation 17

18 Figures-4, 5 Location of Future Fencing for Compass Minerals Operation 18