# Presentation: 495545

## General Services Administration 

**Site Selection, Acquisition & Relocation**

## Site Selection Process

**Not affected by CICA**
**Go - No Go Criteria**
**Size and Shape**
**Agency mission**
**Delineated area**
**Ownership or control**
**Flood Plain (100 or 500 year)**
**E.O.  11988    **

## Site Selection Process

**“****Best Location****” **
**Agency input – Requirements “Dove-tailing”**
**Infrastructure, zoning and local ordinances**
**GSA Standards**
**Location policy**
**Rural Development Act (42 USC 3122)**
**E.O. 12072 – CBD **
**E.O. 13006 - Historic preferences**
**NEPA – Section 106 process - EA,EIS, and CATEX**
**Uniform Relocation Act**

## & Option 

**Range**
**Of**
**Values**

**Pre-Selection Phase**

**Selection Phase**

**NEW LEASE CONSTRUCTION**

**& Option**

**Exercised**

**Confirm**

**Readiness**

**Review**

**Feasibility**

**Study**

**Confirm Project**

**Approvals**

**&**

**Funding**

**Develop**

**Work**

**Plan**

**Select**

**Team**

**Develop**

**Work**

**Plan**

**Review**

**General,**

**Technical**

**& Financial**

**Site**

**Criteria**

**Develop**

**Communication**

**Plan**

**Evaluate**

**Long List**

**Select**

**Short List**

**of Sites**

**Notify**

**Offerors**

**Communicate**

**Site Decision**

**Validated**

**Site Need**

**Team/Plans**

**Selection**

**Criteria**

**Long List**

**Of Sites**

**Evaluate **
**Short**

**List & Select**

**Site**

**Short**

**List**

**Analyze**

**Environmental**

**Condition of**

**Sites**

**Analyze**

**Historical**

**Conditions **
**of**

**Sites**

**Analyze **
**Cultural**

**Conditions **
** ****of**

**Sites**

**Discussions**

**with Customer **
**&**

**Community**

**Finalize**

**Delineated **
**Area**

**& Evaluation**

**Factors**

**Seek**

**Expressions of**

**Interest for Sites**

**thru Local**

**Newspapers**

**Conduct **
**Site Tours**

**& Site**

**Searches**

**Compile **
**Offers**

**Yes**

**Site**

**Selected**

**SITE**

**SELECTION**

**Title**
**Work**

## Elements needed to Secure an Option

**Right of Entry**
**Survey**
**Title work**
**Range of value**
**NEPA **
**Option Documents**

## New Lease Construction 

**Three methods:**
**Single site assignable option**
**Offeror provided site (allows offerors to bring their sites to the procurement)**
**Hybrid procurement (GSA has assignable option, but will allow other sites to be offered)**

## GSA Site Issues

**We and/or the offerors may be outsiders - understanding the local community needs**
**GSA’s “good neighbor” program **
**Produces “Good-Will”**
**Saves time, money, and averts risk**
**Codes and zoning**
**Proffers, Community Impact Fees, development upgrades, or TIF (Tax Increment Financing)**
**New development issues**
**State Historic Preservation Offices (SHPO’s)**
**Not just historic buildings, but historic districts and Area of Potential Effect (APE)**

## GSA Site Issues (con’t)

**Time**
**Agencies**
**Developers**
**Execution of Option Timing **
**Political conditions**
**The Government makes no warranties or representations as to the constructability of the site **
**Optional Actions **
**May extend timing of project**

## Questions for Developers 

**What is the developers preference, GSA to select a site or for the developers to bring the site?  Better price?  Best Location? **
**What does GSA/developer need to do to foster better communications in the community?**
**What are the biggest bottlenecks in our site selection process?**
**How can we foster better give and take at pre-bid or other pre award conferences?**

## General Services Administration 

**CREDIT TENANT LEASE**

## GSA Public Buildings Service

**CREDIT TENANT LEASE**
**What is a Credit Tenant Lease?**
**CTL is an exchange of limited risk, yielding better financing and more competitive rental rates.**
**If risk is properly assessed and managed through use of standardized modifications to the General Clauses, GSA can access increased benefits through lower rent.**
**Financial institutions can better collateralize the base rent at our high credit rating**

## How does it work?

CTL is a financial instrument with bond-like features (principal and interest obligations)

By defining the default provisions more thoroughly, the competitive results should demonstrate lower rent

Rent payments service the financial obligations along with operating, insurance, repair & maintenance responsibilities

**CTL is a financial instrument with bond-like features (principal and interest obligations)**
**By defining the default provisions more thoroughly, the competitive results should demonstrate lower rent**
**Rent payments service the financial obligations along with operating, insurance, repair & maintenance responsibilities**

**GSA Public Buildings Service**

## Credit Tenant Lease components:

**GSA Public Buildings Service**

## Characteristics:

Creates Bond-like quality cash flow
Complies with OMB Circular A-11 (operating lease)
Creates a standardized modified clause approach 
Level playing field when properly competed, upfront
Protects against performance risks while defining the base rent cash flow

**Creates Bond-like quality cash flow**
**Complies with OMB Circular A-11 (operating lease)**
**Creates a standardized modified clause approach **
**Level playing field when properly competed, upfront**
**Protects against performance risks while defining the base rent cash flow**

**GSA Public Buildings Service**

## Candidates

Lease Construction Projects
Lease Term 10 + Years Firm
Dominant Building Uses (occupancy  > 80%)
Typically seasoned real estate markets
Loan values in excess of $50 million
Fully competitive, multiple proposals

**Lease Construction Projects**
**Lease Term 10 + Years Firm**
**Dominant Building Uses (occupancy  > 80%)**
**Typically seasoned real estate markets**
**Loan values in excess of $50 million**
**Fully competitive, multiple proposals**

**GSA Public Buildings Service**

## How does the lessor benefit?

Tenant’s credit is source of collateral – GSA’s AAA rating enhances borrowing power
Greater LTV ratios and lower interest rates

Emphasis on debt financing rather than equity -  equity typically demands a higher return than debt financing
Lower cost of debt and lower cost of return

**Tenant’s credit is source of collateral – GSA’s AAA rating enhances borrowing power**
**Greater LTV ratios and lower interest rates**
**Emphasis on debt financing rather than equity -  equity typically demands a higher return than debt financing**
**Lower cost of debt and lower cost of return**

**GSA Public Buildings Service**

## How does GSA benefit?

If properly competed, debt financed lessors should demonstrate and share a savings in their proposals based upon lower costs of capital through base rent reductions and reductions in their tenant improvement allowance amortization

**If properly competed, debt financed lessors should demonstrate and share a savings in their proposals based upon lower costs of capital through base rent reductions and reductions in their tenant improvement allowance amortization**

**GSA Public Buildings Service**

## What makes GSA’s CTL appealing?

Base rent, as defined, is more secure and appealing to financial institutions and capital markets

In addition, the right for GSA to assign the lease is relinquished – therefore, our AAA rating is not compromised (GSA still retains the right to sub-let)

**Base rent, as defined, is more secure and appealing to financial institutions and capital markets**
**In addition, the right for GSA to assign the lease is relinquished – therefore, our AAA rating is not compromised (GSA still retains the right to sub-let)**

**GSA Public Buildings Service**

## How is base rent more secure?  Transference of some risk to GSA.

**GSA Public Buildings Service**

## Points to Consider:
In your opinion, how do you see concessions that the Government will be asked to make for a CTL benefiting the Government?  Explain and illustrate.
In view of changing financial market conditions, do you see a CTL being mutually beneficial to both parties to the transaction?  Please describe the benefits to both parties (the Government and the Developer).
3.	Is the Government's non-standard CTL language still financable?  Are there any changes that you would recommend the Government make to its CTL language that would improve a developer's ability to obtain financing?  If any, what benefits would ensue to the Government?
How would you recommend that the Government and the development community leverage the financial market conditions to our mutual benefit?

***In your opinion, how do you see concessions that the Government will be asked to make for a CTL benefiting the Government?  Explain and illustrate.***
***In view of changing financial market conditions, do you see a CTL being mutually beneficial to both parties to the transaction?  Please describe the benefits to both parties (the Government and the Developer).***
***3.******	******Is the Government's non-standard CTL language still financable?  ******Are there any changes that you would recommend the Government make to its CTL language that would improve a developer's ability to obtain financing?  If any, what benefits would ensue to the Government?***
***How would you recommend that the Government and the development community leverage the financial market conditions to our mutual benefit?***

**GSA Public Buildings Service**

## General Services Administration 

**Lease Construction Procurement Process**

## Lease Construction Procurement Process

**Site Considerations – 3 Options**
**SFO Development**
**Influenced by CICA, Market, Customer Need**
**Criteria:**
**Minimum Requirements**
**Go/No-Go - Unique Requirements**
**Award Factors**
**3. Multiple Procurement Methodologies **

## Procurement Methodologies

**Lowest Priced, Technically Acceptable**
** ****Single Phase Procurement**
**  ****A/E Firm, Lead Designer, and Completed****  Design Concept Required Before Award**
**2.****	****Best Value Tradeoff  **
**Can be Single Phase or Two Phase Procurement**
**A/E Firm, Lead Designer, and Completed****Design Concept Required Before Award**

## Procurement Methodologies

**3.  Two-Phase Design-Build  (Pre-Award Detailed Design)**
**Phase I—Experience and Past Performance of Team**
**Phase II—Technical Evaluation Factors and Price**
**Completed Design Concept Completed Before Award**
**4.  Two-Phase Design-Build  (Post-Award Detailed Design)**
**Phase I—Experience and Past Performance of Team**
**Phase II—Technical Evaluation Factors and Price**
**Massing and Early Schematics Completed Before Award**
**Complete Design Concept Completed After Award**

## Source Selection Award Factors

**Types:**
**Project Team: A/E Firm – Lead Designer, GC....  Qualifications**
**Experience **
**Past Performance**
**Design Philosophy**
**Design  Concept**
**Proximity to Public Transportation**
**Project Management/Delivery Plan**

## Always Room For Improvement

**What type of factors do your private sector clients look for?  How do our factors differ?**
**What type of factors are you used to seeing?**
**Which factors do you find most useful?**
**Which ones make you cringe and why?**
**What problems do you encounter in responding to our award factors?**

## Always Room For Improvement

**Are we asking for the right information? Too much? Too little?**
**How do LEED or Design Excellence requirements influence your decision to offer?**

## General Services Administration 

**Construction and Project Management Excellence**

## Design Excellence

**Emphasize and improve quality of architecture and functionality—from beginning of process**
**Emphasize GSA’s commitment to client services and high quality – early scope definition/concurrence from client**
**Encourage creativity and innovation in design and delivery**
**“****Green” Leases—LEED NC-Silver**

## Construction Excellence

**Offerors identify a Quality Control Program in their offer – addition to SFO**
**Offerors identify Testing Protocols in their offer – addition to SFO**
**Oversight by Developer and Developer’s Architect during Construction – GSA acts as liaison between Federal clients and Developer**
**General Contractor an                                                    important part of the                                                 Developer’s team**
**Adherence to Schedule**
**Experience and Past Performance**

## Philosophical Issues

**Design Excellence**
**GSA has no contract with the Architect and General Contractor – GSA must be engaged with schedule and milestones to ensure smooth occupancy**
**Sustainable Design / LEED Requirements – Public Law 110-140, December 19, 2007 Energy Independence and Security Act of 2007 includes Leased Federal buildings**
**Escalation of Construction Materials and reconciliation with preparation of proposals**
**Authority Having Jurisdiction – reconciling local codes with GSA and agency requirements**

## Feedback – Lease Construction

**Prescriptive (Design-Bid-Build) or Performance (Design/Build) Standards ?**
**How to improve upon Quality Control during construction ? Roadblocks?**
**How to improve upon meeting schedules ?**
**Impacts on Developer ?**
**Bidding Climate (Increases in                                   materials, Davis-Bacon wages, etc...)**
**Bidding smaller Lease Construct                                   projects?**
**Other Issues ?**

## QUESTIONS ???

**Eric R. Janovsky, Realty Support Services Branch Chief, GSA Region 7, Fort Worth, Texas**
**eric.janovsky@gsa.gov**
**(817) 978-7124**