05-13-2020 Council Packet - Laserfiche WebLink

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A-8 Contractor’s work will be completed at or below the GMP, it is possible that the cost of construction for the 2020 Project could be adjusted to a level in excess of the GMP, for instance, the GMP may be increased or decreased by written change orders authorized by the Corporation, or the Contractor could be entitled to an increase in the GMP under certain circumstances, such as unexpected emergencies or delays. [ITEMS IN THIS PARAGRAPH BEING NEGOTIATED] Under the contract terms, any savings achieved on the GMP will be split equally between the Contractor and the Borrower. Also, a $1,000.00 per day liquidated damage fee will be assessed in the event there is a delay in receipt of the certificate of occupancy for the Project, or any portion thereof which is delivered later than stipulated in the Construction Contract. Retainage on the labor portion of the Construction Contract will be equal to 5% for both the Contractor and the sub-contractors. Any work not substantially complete at the time of turnover of the building will be subject to a hold back of 150% of the value of the incomplete work. Upon completion of construction of the 2020 Project, the Developer shall assist the Borrower in final resolution of any deficiencies or “punch list” items in construction, in obtaining occupancy permits from local and state government officials, and in determining and making final pay outs to contractors and vendors. Approvals and Permits The Borrower has applied for all material construction permits for the 2020 Project and has received all necessary zoning approvals. The Borrower expects to receive the additional building permits required for the 2020 Project by May 15, 2020. The Borrower believes that all required permits will be obtained in sufficient time to permit construction of the 2020 Project to proceed in accordance with the construction schedule. Water, sewer and electric utilities are currently available at the site of the Project. Interior Design and Furnishings The Borrower expects to enter into an Interior Design Agreement (the “Design Agreement”) with Senior Lifestyle Design, LLC (“SLD”), a limited liability company and a wholly owned subsidiary of PHHAL. The principal office and place of business of SLD is 2823 Hamline Avenue North, Roseville, MN 55113. The scope of the Design Agreement will be to provide consulting services for furnishing, fixtures and equipment in common areas. Total compensation payable to SLD under the Design Agreement is $75,000. Marketing To market the Campus, the Borrower has entered into a Marketing Agreement with SHP. As marketing agent, SHP will advise the Borrower and provide services related to the Project including but not limited to development and implementation of a marketing plan, provision of an SHP staff member to train and supervise a dedicated marketing staff person for the Borrower and planning and direction of promotional activities. The total marketing contract will be $456,500. Of this amount, $228,000 will be for direct marketing expense such as advertising and collateral materials; the balance will be paid to SHP as apartments are rented. Market Area and Competition Included as “APPENDIX B – FINANCIAL FEASIBILITY STUDY” to this Official Statement is a Financial Feasibility Study (the “Feasibility Study”) performed by CliftonLarsonAllen (“CLA”) The Feasibility Study includes information as to the population, senior population and income of the areas that the Borrower considers its primary market area. The Feasibility Study also includes information about competitors in the market including those own by affiliates of PHS.