HomeMy WebLinkAboutIR 8603 INFORMAL REPORT TO CITE' COUNCIL MEMBERS No., 8603
To Mayod Mmbers of the City Council' Da
the r an e
te:: 06/08/04
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SUBJECT: DEVELOPMENT AGREEMENT FOR THE ESI'GN
147% CONSTRUCTION AND LEASE OF A NEW SERVICE
CENTER AT THE FEDERAL DEPOT,
On September 23, 2 o (M&C C-19766) Council authorized staff to enter into a Memorandum of
Understanding (MOO) with the United States Postal Service (USPS)l to cause the development of a
schematic design and firm price quoite for a new service center to be constructed at the Federal Depot
site as a replacement for the Harley Avenue Service Center. On October 07, 2003 (M&C G-14121)
Council authorized the creation of a Local Government Corporation (LGC) to, purchase, the site from the
US,PS, and contract with a development entity to be formed by the USPS, for the construction of the new
service center. On April 13, 2004 (M&C C-2002,6) Council authorized staff to include a repilacement
for the Downtown Service Center in the new service center for a maximum estimated total project cost
of$21,400,000, and a maximum estimated annual lease rate, of$1,x"00,000.
The schematic design for the new service center has been completed and the Developer's, proposed
guaranteed maximum price (GMP) is $21,323,10310. To accommodate some miscellaneous items not
accounted for in the proposed GMP staff plans to recommend to the LGC a G of $121,400,000. The
City's financial advisors, currently estimate the annual lease payment for the new service center will be
approximately $1,600,000.
Staff and the City 7s bond counsel are currently working with Concho, Development L.L.C., the USPS
developer-agent, to finalize the terms of the development agreement. Upon complet n of that process
the next action will be the LGC's authorization for the sale of lease revenue bonds to finance the
project. The LGC will make progress payments, throughout the design and construction process to
Concho from the bond proceeds and upon project completion will own the new service center. The City
will lease the new service center from the LGC for 30 years and, at the end of that term, the faeflity will
be conveyea to the City. The first lease payment from the City will be due in FY 2005/06. The
development agreement will include an MW BE participation goal. It is expected that construction will
begin in August/September 2004 and be completed approximately one (1) year later.
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Questions about this IR can be directed to Greg Simmons, racilities, Manager, T/PW at 817-392-7862.
A
7ar4y, 4,Jac 40 �
City Manager
ISSUED BY THE CITY MANAGER FORT ORT"H, TEXAS