WARNER AND SWASEY REDEVELOPMENT 5701 CARNEGIE AVENUE REQUEST FOR PROPOSALS
1. OVERVIEW AND INTRODUCTION The City of Cleveland s Department of Economic Development, is issuing a Request for Proposals (RFP) to select a real estate development firm to redevelop the Warner and Swasey complex at 5701 Carnegie Avenue. The deadline for RFP responses is 5 pm on Friday, March 23rd, 2018. Department of Economic Development A P P E T I Z E R The Department of Economic Development works with business and community leaders, small business owners, entrepreneurs, developers, real Farmhouse Garden Salad a blend of fresh greens, estate brokers and community stakeholders. We provide assistance to cucumbers, red onions, grape tomatoes, cheddar cheese businesses expanding within or relocating to the City of Cleveland and croutons. Served with your choice of dressing. including financing, workforce solutions, and technical assistance. MidTown Neighborhood Since 2008, MidTown has seen over $180 million of completed real estate development projects and has attracted scores of non-profit organizations, businesses, and residents to locate and live in the district. Investment has accelerated over the last two years, with an additional eighteen proposed or in progress development projects totaling $140 million in further investment, much of it within ½ mile of the Warner and Swasey complex. A P P E T I Z E R
Recent and upcoming investments in MidTown include: MidTown Tech Park (office/lab) ($37M) Link59 office and lab ($16M) Victory Building / Dealer Tire HQ ($48M) Cleveland Children s Museum ($10M) Agora Theatre renovation ($2M) Masonic Auditorium renovation ($12M) One Midtown Townhomes ($8M) Phoenix Bldg office and lab ($6M) DigitalC MidTown Tech Hive ($1M) University Hospitals Rainbow Ctr ($24M) Dave s Supermarket ($21M) TRU by Hilton Hotel ($12M) (See appendix for recent development map and additional information)
Health-Tech Corridor The development site sits in the middle of one of the fastest growing jobs hubs in Northeast Ohio, the Cleveland Health-Tech Corridor (HTC). The Health-Tech Corridor is a 1,600 acre area spanning the heart of Cleveland s east side, connecting Cleveland s vibrant Downtown to its cultural hub of University Circle. Because of the immense health, technology, and educational capital that Cleveland s hospitals and universities provide, the HTC has taken off as the place in the region to develop business synergies and partnerships in the health and technology sector. Much of this growth was spurred by the $200 million RTA Healthline bus rapid transit system that was completed in 2008. Since the project was completed, employment in the Health-Tech Corridor has doubled from 36,850 to 72,080 and over 180 health-tech and high-tech companies have located in the Corridor. The new economic activity in the district had led to 500,000 square feet of new or renovated office and lab space, and over $4 billion of investment since 2008.
REQUEST FOR PROPOSALS City of Cleveland 601 Lakeside Avenue, Room 210 Cleveland, Ohio 44114 2. SITE The site is a vacant, City of Cleveland-owned property located at 5701 Carnegie Avenue in Cleveland, Ohio. It is made up of various one to five story structures with a total building area of 221,727 SF. History: The former Warner and Swasey Facility began operation in the late 1880 s, with a focus on manufacturing machine tools. The five-story building made of reddish-brown stone was constructed over a six-year period from 1904 to 1910. It replaced the original Warner & Swasey building that had been erected on the site in the early 1880s. Warner & Swasey built telescopes and machine lathes in the new, as well as the old, building on Carnegie Avenue. During wartime, when the company built armament parts that helped win two world wars, thousands of Website Development Projects foramerica Flight Magazine Clevelanders worked there building parts for tommy guns in World War I and parts for planes, ships and tanks in World War II. The company occupied the building until 1991, when they ceased operations and the facility was acquired by the City of Cleveland. The western portion of the facility, facing E 55th Street was demolished, and the site has been utilized by the city as a garage, while the eastern portion (the site of the proposed redevelopment and highlighted above) has remained vacant since the City s acquisition.
Acreage: 3.1099 Zoning: MMUD, Midtown Mixed-Use District Traffic Counts: Carnegie Ave. s average daily traffic volume at the site is 30,207 vehicles (NOACA), while East 55th St. has an average daily traffic volume of 15,800 vehicles (NOACA) at the site. Additional Parcels: The City of Cleveland owns the parcels immediately west and northwest of the Warner and Swasey site, currently operating as a vehicle storage garage and parking lot. Proposals incorporating use of parcels may be considered, however proposals must identify a functional replacement strategy that provides for no negative impact on operations. The City makes no indication as to the acceptability of, or opportunity for, any proposal incorporating this site.
3. DEVELOPMENT GOALS The redevelopment of the Warner and Swasey site is critical to the growth of MidTown into a vibrant, connected, and inclusive neighborhood. The site sits at an important crossroads connecting major east-west and north-south routes through Cleveland s east side, and is adjacent to new and renovated office, lab, health care, and entertainment facilities. The City of Cleveland seeks proposals that meet the following guidelines: 1) Reuse some or all of the historic structures on the property; although this RFP is open to proposals that would seek to demolish some or all of the buildings. 2) Complement existing and proposed development in the neighborhood to create a dense and connected mixed-use neighborhood. Uses that maximize employment and/or residents at the site will be given preference to lower density uses. 3) Adhere to the existing zoning, Midtown Mixed-Use which seeks to: Encourage a pedestrian-oriented mix of uses including retail, residential, offices and light industrial Expand the available economic development options while strengthening the existing uses found in the Midtown District Encourage a compact land development pattern that increases resident and employment densities to support the GCRTA s HealthLine and facilitates transit usage to/from the Midtown area Establish design criteria for new development or redevelopment to ensure that an aesthetically pleasing and pedestrian friendly environment is provided Incorporate sustainable and innovative development principles, including stormwater management and green building practices like LEED Certification. 4) Consideration for the surrounding neighborhood context in regards to design and use(s). Ensure that the site plan addresses the north-south connection between MidTown and the Central neighborhood.
4. SUBMISSION REQUIREMENTS AND DEADLINE Interested firms are invited to submit their qualifications and interest in the site in the manner outlined below. Responses should be no more than twentyfive (25) pages in length, including attachments. Responses must include the following information at a minimum: Proposed purchase price. Price to be offered for the site along with the assumptions supporting the offer price. Proposed pricing for the Additional Parcels should be separately identified Conceptual Site and Massing Plans: Illustrate how you would propose to develop the site, including building footprint(s), massing, circulation and access. Identify which (if any) structures you would propose demolishing Development Program: Detail the use by square footage per floor and target market for each use. Project Sources & Uses Development Pro Forma Project Team: Briefly highlight the firm profiles and experience of lead project team members, including design firm and general contractor. Relevant Experience: Submit 2-5 examples of recently completed projects of similar program and scale to the Warner and Swasey site. Include overall budget, program, financing information, and timing, from design to completion, and highlight how the projects demonstrate the team s ability to achieve the Development Goals, where applicable. Statement of purpose: Submit an example of recently completed projects that takes into consideration the principles of racial equity and inclusion with respect to the surrounding neighborhood context and/or neighborhood wealth-building initiatives. MBE/FBE/CSB Opportunities: Identify opportunities for the use of MBE/FBE/CSB Subcontractors and City of Cleveland Residents for the project. Indicate past performance on City of Cleveland projects (if applicable), efforts to identify and engage potential subcontractors, and proposed outreach efforts to include Cleveland residents.
Questions regarding the RFP process should be submitted to Richard Barga at rbarga@city.cleveland.oh.us by February 23rd. RFP responses are due by Friday, March 23rd, 2018 at 5 pm. Six bound copied should be sent to the following address along with an electronic copy to debersole@city.cleveland.us.oh: City of Cleveland 601 Lakeside Ave, Room 210 Cleveland, Ohio 44114 Attn: David Ebersole Building Tour: A Tour of the Warner and Swasey property will be offered on or about February 21st at 1 pm. To participate, RSVP to Richard Barga at 216-664-4274 or rbarga@city.cleveland.oh.us. RSVPs are required.
5. SELECTION PROCESS AND EVALUATION CRITERIA The proposals considered in the selection process will be evaluated by a committee made up of representatives from the City of Cleveland, community members, and stakeholders. The Department of Economic Development will select one or more proposals for an in-person interview which will be held between April 2nd through April 12th, 2018. Following the selection, Economic Development will initiate a development agreement with the selected developer. The final decision on sale will be taken to the Board of Control and City Council. Evaluation Criteria. The following evaluation criteria will be used by the selection committee: Overall Qualifications of Project Team - 30 Points Demonstrated ability of Project Team to execute projects of this scale and complexity Track record of meeting deadlines and project milestones Ability of team to navigate environmental, technical, political, or financial obstacles that may arise during the development process Qualifications and experience of the individual project team members Conceptual Site Massing and Plan - 20 Points Extent to which the proposal preserves and restores the historic structure on the property Adherence with Midtown Mixed-Use Zoning at the site to create a dense, pedestrian friendly development that matches Midtown s urban forms and aesthetic
End Use 20 Points Demonstration of how the proposal will complement existing neighborhood uses and further MidTown Cleveland Inc. s vision to create a dense, connected, and inclusive mixed-use neighborhood For office uses, how the project will build upon the momentum of the Health- Tech Corridor to help attract high-tech and health-tech businesses to the neighborhood For Housing, does the target market promote inclusive growth in the neighborhood? Project Financing - 20 Points Proposed purchase price of property with assumptions and justifications Proposed Sources & Uses statement with indications of whether any of the sources are already secured, and if available, accompanying term sheets or letters of interest. Detailed development pro forma forecasting future revenue from tenants, operating expenses, and debt repayments. Indications and evidence that market can support proposed uses at the site Employment of Certified MBE/FBE/CSB Subcontractors and Cleveland Residents and consideration of racial equity principles - (10 points) Development team s previous experience hiring MBE/FBE/CSB subcontractors and Cleveland Residents Plan for incorporating Cleveland certified MBE, FBE and CSB subcontractors into the demolition/construction aspects of this project Plan for incorporating Cleveland residents into the remediation/demolition/construction aspects of this project
6. PUBLIC ASSISTANCE The redevelopment of this property is a high priority for City of Cleveland. The City is committed to working with the selected developer to help align appropriate public incentives to make a project financially feasible. Multiple options may be considered for use with this project including but not limited to: Purchase Price: The total proposed purchase price ( Purchase Price ) for the Property shall be market value based on a property appraisal. Discounts from fair market value may be negotiated based on environmental or structural barriers. City Economic Development Loan Program - This program offers long term, fixed rate financing. For business financing, the minimum interest rate is currently under three percent, or 75% of the prime rate listed in the Wall Street Journal. The maximum city participation is 33.3% of total project cost. Eligible activities are property acquisition, equipment purchase, new construction and related soft costs City Vacant Property Initiative is designed to overcome barriers of the full reuse of abandoned, idled or underutilized commercial and industrial properties within Cleveland. For projects over $2 million the maximum is a $720,000 Loan, with up to $180,000 forgivable which would require the creation of 25 jobs and a five year subordinate lien to ensure those jobs are created and retained. Eligible Activities include property acquisition, environmental remediation costs, site clearance State of Ohio Demo Loan Funding - This program may be offered to assist with demolition of up to 90% of allowable demo costs for the project. The term of the loan is for 10 years, with 4% interest.
City Neighborhood Retail Assistance Program - This program provides financial assistance to neighborhood retail businesses, restaurants and merchants in Cleveland. Locally-owned businesses that will upgrade the exterior and interior appearance of their storefronts can benefit from the program. Eligible activities are exterior and interior building improvements. New Markets Tax Credit (NMTC) - This federal program incentivizes business and real estate investment in low-income communities of the United States via a federal tax credit. Three MidTown projects have been successful in attracting New Markets Tax Credits allocations in the past year. Ohio Historic Preservation Tax Credits - This program provides a tax credit in order to leverage the private redevelopment of historic buildings. The program is highly competitive and receives applications bi-annually in March and September. The Ohio Historic Preservation Tax Credit Program provides a state tax credit up to 25 percent of qualified rehabilitation expenditures incurred during a rehabilitation projects. Federal Rehabilitation Tax Credit (Historic Tax Credit) - Recognizing the cost associated with rehabilitating historic buildings, the Historic Tax Credit provides a 20% income tax credit to developers of income producing properties such as office buildings, retail establishments, rental apartments, and others. Tax Incremental Financing (TIF) - This is powerful tool available for development projects that allows the non-school portion of real estate taxes to be redirected back to the development to pay for project costs. These PILOT payments can be monetized for up-front capital or bonds. This RFP does not represent a commitment of funding by the City or any entity under any of the programs listed above; they are representative of the programs and tools that may be applicable to the Project.
7. EXHIBITS AND PREVIOUSLY COMMISSIONED REPORTS The City has previously contracted with private firms a variety of reports. The following are included as Exhibits to this RFP: Phase I environmental site assessment Completed in September 2010 Phase II environmental site assessment Completed in July 2011 Asbestos Survey Completed in November 2010, the asbestos survey identified significant friable asbestos throughout the building that required removal prior to construction. The City of Cleveland was able to secure just over $1.3 million to fund the asbestos removal, which was completed in December of 2012. Asbestos Closure Report Structural Report Completed by Thorson, Baker + Associates in July 2016. Site and Area Maps Recent photos of the site Information about MidTown, the Health-Tech Corridor, and area development All exhibits are available via Dropbox. Contact Richard Barga at 216-664- 4274 or rbarga@city.cleveland.oh.us for access.