Request for Proposals (RFP) for Acquisition and Redevelopment of the GROVE HOTEL PROPERTY Issued: FEBRUARY 5, 2014 Pre-submission meeting and tour: FEBRUARY 19, 2014: 1:00 PM 4:00 PM Photo by Katherine Krajnak Proposals due: MARCH 10, 2014 BY 5:00 PM (PACIFIC TIME)
1. Executive Summary The Grove Hotel property is located at the gateway to Old Town/ Chinatown in downtown Portland on West Burnside Street between Fourth and Fifth Avenues. The Grove Hotel is a vacant three-story building that was most recently occupied as a 70-room Single Room Occupant (SRO) hotel serving low-income residents. Through this Request for Proposals (RFP), the Portland Development Commission (PDC), the economic development and urban renewal agency for the city of Portland, Oregon (City) is seeking proposals from developers to acquire and redevelop the 11,000 square foot (SF) parcel which includes the 27,400 Grove Hotel building (the Property). The Property is owned by PDC, and is located at 401-439 West Burnside Street in Portland s central city, Old Town/Chinatown neighborhood, and the River District (RD) Urban Renewal Area (URA). GROVE HOTEL Those interested in submitting a proposal in response to the RFP should, at a minimum, address the general requirements outlined in this RFP. Responses by mail or email are due at the PDC offices no later than the day and time listed on the cover sheet and addressed to: Eric Jacobson Portland Development Commission 222 NW Fifth Avenue Portland, Oregon 97209-3859 Phone: 503-823-3306 E-mail: jacobsone@pdc.us PDC anticipates entering into agreements with the selected respondent outlining in detail the terms and conditions for conveyance and redevelopment of the Property. Google Maps RFP: Grove Hotel Property Page 2 of 14
2. About the Portland Development Commission Created by Portland voters in 1958, PDC has been a driving force in Portland s reputation for vibrancy and livability. As Portland s urban renewal and economic development agency, PDC focuses on investing in the job creation, innovation, and economic opportunity that will transform Portland into one of the world s most desirable and equitable cities. In neighborhoods throughout the city, PDC has revitalized main streets and increased the capacity of businesses to expand and provide employment opportunities to Portland area residents. In carrying out our mission over the years, PDC has played a key role in some of Portland s most important landmarks, including Pioneer Courthouse Square, Pioneer Place, the Lan Su Chinese Garden, Gov. Tom McCall Waterfront Park, the Eastbank Esplanade, and Airport, Interstate and Transit Mall-Clackamas MAX Light Rail. Recent PDC accomplishments within Old Town/Chinatown include: renovation of the White Stag Building, now home to the University of Oregon; renovation of the Skidmore Building and construction of a new building for Mercy Corps global headquarters; renovation of the Globe Hotel, now home to the Oregon College of Oriental Medicine; relocation of the Saturday Market to the Tom McCall Waterfront Park. White Stag building The City of Portland s adopted Economic Development Strategy, a Five- Year Plan for Promoting Job Creation and Economic Growth (Strategy) establishes a set of priorities to guide the city s job creation work. One component of the Strategy focuses on maintaining a leadership position in sustainability by driving urban innovation through investments in physical place-making. Oregon College of Oriental Medicine RFP: Grove Hotel Property Page 3 of 14
3. Old Town/Chinatown Old Town/Chinatown is Portland s oldest neighborhood and is home to major destinations and institutional anchors including Portland Saturday Market, Lan Su Chinese Garden, Waterfront Park, the University of Oregon in Portland, Oregon College of Oriental Medicine, and Mercy Corps. The neighborhood is highly diverse, featuring an affordable building stock that attracts entrepreneurial companies, a high concentration of social service agencies serving the low-income and homeless population, and an active nightlife scene featuring a wide range of restaurants, bars, and entertainment venues. The neighborhood is highly walkable and linked to the surrounding region by Tri-Met s light rail lines as well as Amtrak passenger train and intercity bus service at Union Station. Economic and development activity in the neighborhood is guided by a number of policies and plans, including: Portland Development Commission Revised Strategic Plan 2010-2014 (January 2012) (Appendix 1); Portland Economic Development Strategy (2009) (Appendix 2); Ankeny/Burnside Development Framework December 13, 2006 (Appendix 3); Old Town/Chinatown Vision Development Plan Update January 2003 (Appendix 4); New Chinatown/Japantown Historic District and Skidmore/Old Town Historic District designations (Appendix 5); River District Urban Renewal Area Plan; and Downtown Waterfront Urban Renewal Area Plan. The Portland Bureau of Planning and Sustainability (BPS) is currently examining Old Town/Chinatown as a focus area as part of the broader Central City 2035 update of the 1988 Central City Plan. As part of that effort, a Discussion Draft listing of District Goals, Policies and Actions has been prepared (Appendix 6). PDC is in the process of developing a 5-Year Action Plan for Old Town/ Chinatown which defines a comprehensive approach to strategic actions by public-sector and private partners (Appendix 7). Efforts currently underway to implement the Action Plan include: PDC has selected Gerding Edlen Development to redevelop Block 8L, located at 60 NW Davis Street, for a mixed-use building planned to include about 50,000 square feet of creative office space and about 100 apartments; PDC is working with the Pacific Northwest College of Arts (PNCA) to renovate the historic 511 Building to serve as PNCA s Arlene and Harold Schnitzer Center for Art and Design http://pnca.edu/about/ expansion/c/nwbroadway511. As part of the annual Startup PDX Challenge, PDC is seeking real estate partners within Portland s Central City, including Old Town/Chinatown, to better connect startup companies with Portland s growing entrepreneurial ecosystem: www.startuppdxchallenge.com RFP: Grove Hotel Property Page 4 of 14
4. About the Property Located in downtown Portland on West Burnside Street between NW Fourth and NW Fifth Avenues, the Grove Hotel is a three-story building with a full basement located at the gateway to Old Town/Chinatown. Constructed in 1906, the Grove Hotel has operated as a privately-owned lowincome residential hotel from its inception. In 2007, in an effort to reverse years of deferred maintenance and resulting building code violations, the City of Portland requested the Housing Authority of Portland (HAP) (now Home Forward) to purchase and rehabilitate the building with funding from PDC. Responding to this request, HAP took possession in November 2007 and completed minor renovations of the residential portion of the building correcting the required code violations to continue the allowed use of the residential portion of the building on a short-term basis. RFP: Grove Hotel Property Page 5 of 14
4. About the Property (cont d) A. Street Address: 401-439 West Burnside Street and 11 NW 4th Avenue, Portland, OR 97209 B. Property Identification: i. Property ID: R140421 ii. State ID: 1N1E34CA 11000 iii. Legal Description: Lots 1 and 2, EXCEPT the Southerly 20 feet in Burnside Street, and Lot 4, Block 32, COUCH S ADDITION TO THE CITY OF PORTLAND, in the City of Portland, Multnomah County, Oregon C. Parcel Size: 11,000 Square Feet (0.25 acres) D. Building Size i. Basement: 6,262 SF ii. Ground Floor: 10,962 SF iii. Level 02: 5,173 SF iv. Level 03: 5,173 SF v. Total: 27,570 SF E. Existing Structures and Uses: Vacant commercial/-residential, mixed-use building originally constructed in 1906. The building is three stories with a one story wing and contains 21,308 square feet on three floors and a 6,262 square foot basement. The building was most recently operated as a Single Resident Occupancy (SRO) hotel with 70 rooms and ground floor retail. The residential portion of the building has been vacant since July 2010, while the ground-floor retail portion has been vacant since March 2011. F. Comprehensive Plan Designation: The Property is designated Central Commercial (CX) in Portland s Comprehensive Plan and within the Central City Plan District. G. Zoning Designation: The Property is zoned Central Commercial with design review overlay (CXd) and is located in the Central City Plan District and River District Subdistrict. H. Historic Designation: The building is a Primary Contributing Resource to the New Chinatown/ Japantown Historic District (Appendix 5). This status makes the building eligible for the Federal Tax Credit program and Oregon s Special Assessment of Historic Properties. Any proposals to demolish the existing structure submitted in response to this RFP will be subject to Demolition Review (Portland Zoning Code Chapter Title 33 Chapter 846.080). RFP: Grove Hotel Property Page 6 of 14
4. About the Property (cont d) I. Topography: The Property is flat and is below 50 feet in elevation. J. Flood Plain Status: The Property is located in a Zone X other flood area of 0.2% annual chance of flood (Flood Insurance Rate Map dated October 19, 2004). K. Utilities: The building has electric, natural gas, and water service, as well as connections to the City of Portland s combined sewer and storm lines. The building s primary heating source is radiant heat provided by a boiler in the basement. L. Transportation and Access: The Property is located in Portland s central business district and fronts on West Burnside Street. Light rail stops for Tri-Met s MAX Yellow and Green Lines are located adjacent to the Property while stops for the MAX Red and Blue Lines are located four blocks away at NW 2nd Avenue and NW Davis Street. Bus stops are located immediately adjacent to the Property. The following building upgrades were completed in 2008 and 2009: Compliant fire alarm system installed Automatic fire sprinkler system installed in the first floor lobby and second- and third floors, and extended into a portion of the first floor retail space; and Windows replaced on the second and third floors. The building will remain vacant per a Stipulated Agreement with the City of Portland Bureau of Development Services (BDS) as a waiver to not being required to correct substantial code violations until the building title is transferred to a private developer for adaptive reuse and renovation. M. Environmental Conditions: A Phase I Environmental Site Assessment (ESA) has been prepared (Appendix 9) and PDC has completed a targeted abatement of exposed friable asbestos in a boiler (Appendix 10) and has removed all hazardous paint and chemicals. A prior Asbestos Survey Report indicates there is remaining asbestos in floors and walls that, if disturbed, will need to be abated by future development (Appendix 11). It is possible the building contains polychlorinated biphenyl (PCB) light ballasts in the fluorescent lights and mercury light switches. There are no outstanding soil or groundwater recognized environmental conditions that need to be examined further by a Phase II ESA or other environmental analysis. N. Building Condition and Code Violations. The building is constructed of reinforced concrete with secondary wood framing (Type III-B). The building may require seismic upgrading depending upon the use. The roof is in poor condition and is in need of full tear-off and replacement. RFP: Grove Hotel Property Page 7 of 14 Photo by Alison Wicks
5. Development Objectives In making the Property available for redevelopment, PDC anticipates advancing the following development objectives Gateway: Make advantageous use of the prominent location along West Burnside Street adjacent to the Chinese Gate and provide active ground-floor uses. District Uses and Identity: Provide primary uses that enhance the neighborhood s 24/7 vitality and contribute to the diversity that makes the neighborhood desirable and attractive. Safety and Connections: Enhance the real and perceived safety of the neighborhood through street-level uses that generate positive economic activity and enhance vibrancy between destinations. Financial Terms: Minimize the need for PDC financial assistance and maximize PDC s financial return. Photo by Pasqual Contreras Photo by SERA Architects RFP: Grove Hotel Property Page 8 of 14
6. Compliance with PDC Policies A. Social Equity. PDC is committed to increasing economic opportunity and income for all Portland residents and historically disadvantaged Portlanders in particular as described in PDC s Equity Policy (Appendices 12 and 13). The selected Developer must strive to advance, and as applicable comply with, the following PDC programs: Business Equity Program. The Business Equity Program (BEP) is designed to maximize participation of small businesses that have been historically underutilized and encourages the participation of businesses owned by veterans. The BEP applies to PDC sponsored projects receiving more than $300,000 of PDC resources to finance a project with hard construction costs greater than $200,000. The utilization goal for Certified Firms on applicable projects is twenty percent (20%) of the project s hard construction costs. Workforce Equity Program. The Workforce Equity Program (WEP) aims to maximize apprenticeship opportunities in the construction trades, ensure employment opportunities for People of Color and women, and encourage the employment of people with disabilities and veterans. The WEP applies to PDC sponsored construction projects if the project receives $300,000 or more of PDC resources to finance a project with a hard construction cost greater than $1 million and shall apply to the prime contractor and any subcontract(s) greater than $100,000. Photo by Lisa Norwood B. Green Building Policy. PDC is committed to promoting sustainable, energy efficient buildings. Depending upon the level of financial assistance sought from PDC, if any, the selected Developer may be required to comply with PDC s Green Building Policy to advance this goal (Appendix 14). RFP: Grove Hotel Property Page 9 of 14
7. Pre-Submission Meeting and Tour Interested parties are invited to participate in a presubmission meeting and tour of the property conducted by PDC staff. During the meeting and tour, participants will be provided the opportunity to walk through and inspect the condition of the building and ask questions of PDC staff. The pre-submission meeting will take place at the following time and location: Date: Tuesday February 19, 2014 Time: 1:00 p.m. 4:00 p.m. Location: Portland Development Commission 222 NW Fifth Avenue Portland, OR 97209 After an initial orientation at PDC s office, the group of participants will walk the three blocks to the Grove Hotel for the on-site tour. RFP: Grove Hotel Property Page 10 of 14
8. Submission Requirements The following should be included in the response: A. Proposed project Proposed use(s) by type/units/size Description of the project including vision, goals, major design elements, and urban design approach Narrative describing how the proposed use(s) advances the Development Objectives described above and is consistent with zoning regulations Preliminary concept plan Identified constraints or challenges. B. Summary of Development Team Capability and Financial Capacity, including completion of the Statement of Developer Qualifications and Financial Capability (Appendix 14). C. Preliminary project development budget, financial structure, and financial return pro forma, including project sources and uses, proposed terms for acquiring the Property, anticipated PDC financial assistance (if any), and projected value of completed project. D. Description of project s ownership and financial structure. Submittal Instructions, Requests for Clarification and Changes to this RFP In an effort to reduce the amount of paper used as part of this RFI, all responses must be submitted either by email or mailed on a compact disk or flash drive. Responses should be in either Adobe Acrobat (.pdf) or Microsoft Word (.doc) format and submitted to: Eric Jacobson Portland Development Commission 222 NW Fifth Avenue Portland, Oregon 97209-3859 Phone: 503-823-3306 E-mail: jacobsone@pdc.us PDC has not set a specified page limit for responses; however, we expect to receive responses that are thorough, but also concise and to the point without unnecessary content. Questions about any matter contained in this RFP should be emailed to Eric Jacobson (mail to: jacobsone@pdc.us) no later than ten (10) business days prior to the deadline of this RFP. All material changes or clarification of any matter contained in this RFP will be posted to the PDC website and sent directly to the pool of potential respondents who have registered to receive such updates. E. Identification of pre-development needs and costs and an understanding of due diligence needs. F. Preliminary project schedule and key milestones including closing, commencement of construction, and project completion. G. Approach to advancing social equity in contracting and sustainable, energy efficient design, including PDC s Equity Policy and Green Building Policy if applicable. RFP: Grove Hotel Property Page 11 of 14 Photo by p medved
9. Evaluation Criteria and Selection All complete and responsive proposals will be evaluated by an evaluation committee. The evaluation will be based on the information submitted as well as any related information that PDC may discover or request in analyzing or verifying information submitted in the proposal. The following Evaluation Criteria will be used to evaluate the proposals: A. Development Program and Design 1. Proposed development advances the PDC Development Objectives. 2. Proposed use is consistent with zoning regulations and River District URA goals. 3. Proposed development advances sustainability goals and meets or exceeds PDC s Green Building Policy. B. Development Team Capability 1. Demonstrated successful experience on projects similar in scope and type to proposed project, including projects with public/private development relationship. 2. Completeness of concept plan, budget, and schedule demonstrates a high level of interest in the Property. D. Equity 1. Demonstrated ability to maximize diversity in its past projects or business practices. 2. Commitment to strive to advance or, if applicable, meet or exceed the PDC Equity Policy and Part 3 of PDC s Equity Administrative Procedures. This RFP may lead to one of the following outcomes: Direct negotiations for sale and redevelopment of the Property through a MOU, PSA, or DDA with a Developer selected as part of this RFP. A request for additional information from one or more RFP respondents, including potential interviews. Cancellation of this RFP without the selection of a development team. PDC expects the evaluation of submittals will be completed by the end of March 2013. C. Business Terms 1. Proposed project is financially feasible and minimizes PDC financial assistance. 2. Proposed purchase price and schedule for property conveyance and project completion. 3. Proposed terms maximize the long-term value and public benefits derived from redevelopment of the Property. RFP: Grove Hotel Property Page 12 of 14
10. Terms of this RFP This RFP is not a request for competitive proposals and is not subject to the Oregon Public Contracting Code (ORS 279). This RFP in no way obligates PDC to enter into a relationship with any entity that responds to this RFP or limits or restricts PDC s right to enter into a relationship with an entity that does not respond to this RFP. In its sole discretion, PDC may pursue discussions with one or more entities responding to this RFP or none at all. PDC further reserves the right, in its sole discretion, to cancel this RFP at any time for any reason. To the extent that PDC elects to enter into a relationship with an entity regarding a development proposal, such entity shall be required to comply with PDC s policies, including its Business and Workforce Equity Policy in connection any work undertaken on such proposal. Information provided to PDC in response to this RFP will become the property of PDC and will be subject to public inspection in accordance with the Oregon Public Records Law, ORS 192.410, et seq. If an entity responding to this RFP believes that a specific portion of its response constitutes a trade secret under Oregon Public Records Law (ORS 192.501.2) and is, therefore, exempt from disclosure, the entity must clearly identify that specific information as a trade secret. Identification of information as a trade secret does not necessarily mean that the information will be exempt from disclosure. PDC will make that determination based on the nature of the information and the requirements of the Oregon Public Records Law. PDC is self-represented for this transaction and will not be paying any third party brokerage fees. Photo by Travel Portland RFP: Grove Hotel Property Page 13 of 14
11. Appendix: Supplemental Information Available 1. Portland Development Commission Revised Strategic Plan 2010-2014 (January 2012). 2. Portland Economic Development Strategy (2009). 3. Ankeny/Burnside Development Framework (December 13, 2006). 4. Old Town/Chinatown Vision Development Plan Update (January 2003). 5. New Chinatown/Japantown Historic District/Old Town Historic District designations (September 1, 1989). 6. West Quadrant Discussion Drafts Goals, Policies and Actions, Portland Bureau of Planning and Sustainability, January 10, 2014. 7. Old Town/Chinatown 5-Year Action Plan (Draft), Portland Development Commission, January 2014. 8. American Land Title Association (ALTA)/American Congress on Surveying and Mapping (ACSM) Land Title Survey, Westlake Consultants Inc. 9. Phase I Environmental Site Assessment, Landau Associates, August 18, 2011. 10. Summary of Hazardous Material Removal, Portland Development Commission, November 19, 2010. 11. Asbestos Survey Report, The Grove Hotel, PBS, January 2008. 12. PDC Equity Policy, January 9, 2013 13. Equity Administrative Procedures, Part 3, April 1, 2013. 14. PDC Green Building Policy, June 22, 2005. 15. Statement of Developer Qualifications and Financial Capability. Photo by Lisa Norwood RFP: Grove Hotel Property Page 14 of 14