Report to the Strategic Development Committee

Transcription

1 Report to the Strategic Development Committee Pre-Solicitation Terms for Commercial Real Estate Brokerage Services at Washington Dulles International Airport March 2017

2 Purpose Staff requests that the Strategic Development Committee concur with the issuance of a full and open competitively negotiated solicitation for the procurement of a Commercial Real Estate Brokerage Services firm to assist the Airports Authority in marketing identified land parcels located at Washington Dulles International Airport and to advise the Airports Authority on other real estate matters. The proposed contract includes five base years and five oneyear option periods, for a total contract term of 10 years.

3 Background The Airports Authority has identified three parcels of land that are not required for airport operations and would be suitable for commercial development. Engagement of a Commercial Real Estate Brokerage Services firm would allow the Airports Authority to fully expose these land parcels to the regional, national and international real estate markets over a multiple-year period and thereby maximize the financial returns. Consulting services would provide additional support for marketing the identified parcels and for other Airports Authority real estate matters on an as-needed basis.

4 Background (continued) The three parcels of land that will be marketed are: Western Lands Area is a 416-acre parcel located at the western extreme of Washington Dulles International Airport on State Route 606 (Old Ox Road). Metro-606 site consists of approximately acres adjacent to the future Loudoun Gateway Metro Station. 606-Frontage site is a 45-acre site fronting State Route 606 located approximately one-half mile north of State Route 50 (Lee Jackson Memorial Highway).

5 Background (continued)

6 Background (continued) The broker will be responsible for advertising and marketing the three parcels of land and will assist with land development analysis, transaction structuring, strategic planning, market analysis and transaction negotiations. Consulting services may consist of specific property and market analyses, study of real estate trends, study of select property types and other real estate matters of interest to the Airports Authority.

7 Background (continued) The broker will be compensated via commission upon consummation of each transaction. Offerors will be asked to propose commission structures for ground lease transactions on all three parcels and for sales transactions on Western Lands Area (only).

8 Procurement Method Full and open competition will be achieved through a competitively-negotiated Best Value procurement. Under the Best Value procurement method, award is made to the responsible Offeror whose proposal provides the best overall value to the Airports Authority. This method takes into consideration non-price factors and price, which are separately evaluated and rated, and the proposal that is found to represent the best overall value to the Airports Authority forms the basis of the award.

9 Evaluation The Technical Evaluation Committee review will be based on the following criteria, listed in descending order of importance: Qualifications and Experience of Assigned Brokers Qualifications, Experience and Resources of the Firm including the Firm s policies regarding the attainment and/or presence of diversity within the Firm s workforce, the actions of the Firm to implement and achieve these policies, and the Firm s performance under these policies Management and Marketing Plan Evaluation of the cost proposal will be based on the commission percentages and hourly consulting fees proposed by Offerors.

10 Recommendation Staff requests that the Strategic Development Committee concur with the issuance of a solicitation for the procurement of a Commercial Real Estate Brokerage Services firm to assist the Airports Authority in marketing identified land parcels located at Washington Dulles International Airport and to advise the Airports Authority on other real estate matters.

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12 PURPOSE REPORT TO STRATEGIC DEVELOPMENT COMMITTEE PRE-SOLICITATION TERMS FOR COMMERCIAL REAL ESTATE BROKERAGE SERVICES AT WASHINGTON DULLES INTERNATIONAL AIRPORT MARCH 2017 Staff requests that the Strategic Development Committee concur with the issuance of a full and open competitively-negotiated solicitation for the procurement of a Commercial Real Estate Brokerage Services firm to assist the Airports Authority in marketing identified land parcels located at Washington Dulles International Airport (Dulles International) and to advise the Airports Authority on other real estate matters. The proposed contract includes five base years and five one-year option periods, for a total contract term of 10 years. BACKGROUND The Airports Authority has identified three parcels of land that are not required for Airport operations and would be suitable for commercial development. The Airports Authority would benefit from the revenue generated by long-term ground leases with real estate developers on these parcels and potentially enhance aviation activity at Dulles International. Engagement of a Commercial Real Estate Brokerage Services firm would allow the Airports Authority to fully expose these land parcels to the regional, national and international real estate markets over a multiple-year period, and thereby maximize the financial returns. Consulting services would provide additional support for marketing the identified parcels and for other Airports Authority real estate matters on an as-needed basis. The three parcels of land that will be marketed are shown on Exhibit A, and include the following: 1. Western Lands Area (WLA) is a 416-acre parcel located at the western extreme of Dulles International on State Route 606, also known as Old Ox Road. The surrounding area is characterized by commercial real estate, including distribution warehouse, data center and industrial flex space. It is a well-established commercial real estate market serviced by a mature commercial brokerage community. Given the large parcel sizes available in the WLA, staff anticipates significant interest in the WLA. The Airports Authority has been processing the necessary Federal Aviation Administration (FAA)

13 approvals, including a National Environmental Policy Act (NEPA) approval, to position the WLA to be marketed as early as 3Q17. The Airports Authority is the fee owner of the WLA; therefore, the WLA could be sold outright. Although the current strategy is to market the WLA as a ground lease program, the scope of services and the pricing structure for this contract will also include WLA land sales, to allow for additional transaction flexibility. 2. Metro-606 site consists of approximately acres and is located adjacent to the future Loudoun Gateway Metro Station. The Silver Line Metrorail is anticipated to be operational in 2020, bringing commercial activity to this area. Currently, a 56-acre site is not being used, while a 12-acre parcel is being used by Virginia Department of Transportation as a Park & Ride Lot, under a cancellable Deed of Easement. Development of this site requires various FAA approvals, including NEPA. Staff has not pursued FAA or NEPA approvals on either parcel because of the uncertainty as to the ultimate use of the site, which will be determined by the ground lessee. This combined 68-acre site is a part of the Airports Authority s federal lease; therefore, the Airports Authority does not have the authority to sell the property. As such, the site will be marketed as a ground lease program Frontage site is a 45-acre site, potentially as large as 160 acres, fronting State Route 606 (Old Ox Road/Loudoun County Parkway) located approximately one-half mile north of State Route 50 (Lee Jackson Memorial Highway). The site is located at an existing signalized intersection at West Dulles Boulevard across Loudoun County Parkway from a 490,000 square foot Walmart-anchored shopping center. A 70-acre parcel to the north of the site and a 45-acre parcel to the south may present future development opportunity. FAA approvals, including NEPA, will be required in order to develop this site, but as with the Metro-606 site, staff has not yet pursued these approvals. The site is also a part of the Airports Authority s federal lease and will only be marketed as a ground lease program. The broker will be responsible for advertising and marketing the three parcels of land and will assist with land development analysis, transaction structuring, strategic planning, market analysis and transaction negotiations. Consulting services (included in this contract) may consist of specific property and market analyses, study of real estate trends, study of select property types and other real estate matters of interest to the Airports Authority. The broker will be compensated via commission upon consummation of each transaction. Offerors will be asked to propose commission structures for ground lease transactions on all three parcels and for sales transactions on Western Lands Area (only). On the ground lease transactions, the brokerage commission would be paid to the broker i) as lease

14 payments are realized by the Airports Authority or ii) from Airports Authority funds. Staff would pursue a payment structure sourced from the lease payments to avoid capital injections from the Airports Authority. EVALUATION Full and open competition will be achieved through the issuance of a solicitation using the best value procurement method. Under the best value procurement method, award is made to the responsible Offeror whose proposal provides the best overall value to the Airports Authority. In the determination of best value, technical factors and cost factors are separately evaluated and rated, but it is the proposal that is found to represent the best overall value to the Airports Authority that will be awarded the contract. For best value evaluation purposes, as proposals become more technically equivalent, cost becomes more important. Evaluation of the technical proposals will be based on the following criteria, listed in descending order of importance: 1. Qualifications and Experience of Assigned Brokers; 2. Qualifications, Experience and Resources of the Firm including the Firm s policies regarding the attainment and/or presence of diversity within the Firm s workforce, the actions of the Firm to implement and achieve these policies, and the Firm s performance under these policies; and 3. Management and Marketing Plan. Evaluation of the cost proposal will be based on the commission percentages and hourly consulting fees proposed by Offerors. RECOMMENDATION Staff requests that the Strategic Development Committee concur with the issuance of a solicitation for the procurement of a Commercial Real Estate Brokerage Services firm to assist the Airports Authority in marketing identified land parcels located at Washington Dulles International Airport and to advise the Airports Authority on other real estate matters. Prepared by: Office of Revenue Department of Real Estate March 2017

15 EXHIBIT A