Loading...
HomeMy WebLinkAboutItem 07 Authorization to Proceed with a Final Contract with Fortress Secured LLC for the Construction of a New Fire Station #38 City of Ocoee ▪ 1 N. Bluford Avenue ▪ Ocoee, Florida 34761 Phone: (407) 905-3100 ▪ www.ocoee.org STAFF REPORT Meeting Date: April 2, 2024 Item #: 7 Contact Name: Rebecca Roberts Department Director: Rebecca Roberts Contact Number: Ext. 1520 City Manager: Robert Frank Subject: Authorization to Proceed with a Final Contract with Fortress Secured LLC for the Construction of a New Fire Station #38. (Finance Director Roberts) Background Summary: Pursuant to Section 255. 065, Florida Statutes (hereafter the " P3 Law"), public-private partnerships are permissible when pursued in accordance with Florida law so as to allow for greater private sector participation in the delivery and financing of public buildings and infrastructure projects. The City Manager received an unsolicited proposal dated July 7, 2023, from Fortress Secured LLC to construct a new Fire Station by creating a public-private partnership. Since the proposal is for a new Public Safety facility (and thus a qualifying project under the P3 Law), the City may proceed with consideration of the Fortress Secured proposal as long as the procedural elements of the P3 Law are met. If, after evaluating the proposal, the City decides that it wants to move forward with a comprehensive agreement to complete the project offered in the proposal, the City must publish a public notice in the Florida Administrative Register and the local newspaper stating that the City has received the proposal and will accept other proposals for the same project. This publication will run for two consecutive weeks. In order to ensure that quality, competing proposals are prepared and submitted, the P3 Law requires that adequate time be allowed for preparation and receipt of competing proposals (not less than 21 days or more than 120 days). Before entering into a comprehensive agreement for the project, the City must determine that the proposed project does the following: 1. It is in the public' s best interest; 2. It is for a facility that is owned by the City or will be conveyed to the City; 3. Has adequate safeguards in place to ensure that additional costs or service disruptions are not imposed on the public in the event of material default or cancelation of the comprehensive agreement by the City; 4. Has adequate safeguards in place to ensure that the City or private entity has the opportunity to add capacity to the proposed project or other facilities serving similar predominantly public purposes; and 5. Will be owned by the City upon completion, expiration, or termination of the comprehensive agreement and upon payment of the amounts financed. On August 13 and August 23, 2023, the City Commission authorized staff to advertise and hire a professional firm to evaluate the unsolicited proposal provided by Fortress Secured LLC. This proposal was advertised for 45 days and no other proposals were received. Based on the Commission approval, the City contracted with ZHA consultants to evaluate the proposal for conformance with Florida Statutes and, in comparison with the City designing and constructing the project on its own. The evaluation determined the proposal does meet a public need pursuant to state law, and it can provide an appropriately designed facility for a reasonable cost in a timely manner. The next step is to negotiate an amenable contract with Fortress Secured that will result in the design and City of Ocoee ▪ 1 N. Bluford Avenue ▪ Ocoee, Florida 34761 Phone: (407) 905-3100 ▪ www.ocoee.org construction of the facility. The contract will be brought back to the City Commission for approval. The ZHA evaluation report is attached. Issue: Should the Honorable Mayor and City Commissioners authorize staff to negotiate a contract with Fortress Secured LLC for the design and construction of a new Fire Station? Recommendations: Staff recommends that the Honorable Mayor and City Commissioners authorize staff to negotiate a contract with Fortress Secured LLC for the design and construction of a new Fire Station. Attachments: 1. Evaluation of P3 Station #38 Proposal - March 5, 2024 Financial Impacts: The City currently has $5,400,000 allocated towards this project. Once a final contract has been negotiated, staff will propose a funding strategy should additional funding be required. Type of Item: Consent City of Ocoee Evaluation of P3 Fire Station #38 Proposal March 5, 2024 INTRODUCTION The City of Ocoee received an unsolicited proposal on 7/27/23 to deliver a fire station for the City via a Public Private Partnership from Fortress Secured, LLC (Fortress). This Public Private Partnership proposal is to enter into a partnership with the City to build a turn-key Fire Station #38. Fortress proposes to “take all development, construction, and construction financing risks and will deliver to the City of Ocoee a fully functional fire station.” PUBLIC PRIVATE PARTNERSHIPS Florida Statutes 255.065, (P3 Law) authorizes and governs public-private partnerships (P3) and solicitations. Public-Private Partnerships Defined: A Public-Private Partnership (P3) is a contractual arrangement between a public agency (federal, state, or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility. The law allows political entities to utilize P3s to develop governmental buildings, roads, and other public and social infrastructural items, including fire stations. The Florida P3 Law provides clear steps and directives which must be followed to allow for a fair and public process of proposal evaluation and acceptance. The process includes the following steps: Once an unsolicited proposal is received by a municipality or Responsible Public Entity (RPE), the RPE must determine if the proposal is of interest and meets the initial benchmarks for advancement. •Is there is a public need for or benefit derived from a project of the type that the private entity proposes as the qualifying project? •Is the estimated cost of the qualifying project reasonable in relation to similar facilities? •Will the private entity's plans result in the timely acquisition, design, construction, improvement, renovation, expansion, equipping, maintenance, and/or operation of the qualifying project? Once the RPE determines the submitted unsolicited offer meets the initial qualifications, the RPE is required to solicit competing proposals for a similar project. In order to accept an unsolicited proposal, the RPE must contract with an architect or engineer to review/evaluate the proposal(s) as well as oversee the design and construction process. A professional review and evaluation of the design and construction proposed is conducted to assure material quality standards, interior space utilization, budget estimates, design and construction schedules, and sustainable design and construction standards are consistent with public projects. Before approving a comprehensive agreement, the responsible public entity must determine that the proposed project: •Is in the public's best interest. •Is for a facility that is owned by the responsible public entity or for a facility for which ownership will be conveyed to the responsible public entity. •Has adequate safeguards in place to ensure that additional costs or service disruptions are not imposed on the public in the event of material default or cancellation of the comprehensive agreement by the responsible public entity. •Has adequate safeguards in place to ensure that the responsible public entity or private entity has the opportunity to add capacity to the proposed project or other facilities serving similar predominantly public purposes. •Will be owned by the responsible public entity upon completion, expiration, or termination of the comprehensive agreement and upon payment of the amounts financed. FORTRESS PROPOSAL The Fortress proposal includes Team Qualifications, a Project Approach, a conceptual Floor Plan, Project Costs, a Project Schedule, and Financing Options. It also includes the Florida Statutes related to P3 contracting and various agreements utilized for different contracting options. The Fortress proposal identifies the following attributes of their proposal as benefits to the City: •Project risk is transferred to Fortress for scheduling, design, and construction (including cost overruns and construction delays). •Cost savings realized due to the use of a prototype fire station design. Significantly reduced architectural/engineering costs if the prototype is utilized. •Fire stations are considered specialized real estate projects. Considerable time and resources have been spent developing the fire station prototype that encompasses industry "best practices" and lessons learned that will benefit the City. •Accelerated project delivery. The City can forego the time-consuming process of issuing two separate RFPs for design and construction services. •Innovative, long-term custom lease financing can be provided. This financing structure is not considered statutory debt and should not impact the City's bonding capacity. •The project will be completed in accordance with the latest edition of all applicable federal, state, and local regulatory requirements and codes. •Initial capital costs including construction interest can be paid for by Fortress. Lease payments are deferred until the fire station is successfully delivered. •Optional furniture and equipment packages will be offered to the City for additional value and convenience. •Third-party project review and oversight will be provided by an architect or engineer selected by the City through a competitive RFP process. Conceptual Site Plan Conceptual Floor Plan Rendering Project Discovery: Under project discovery, the complete Fortress team including finance, design, and construction members will meet with City staff to develop a full understanding of program needs, which will help establish reasonable and achievable goals early in the development process. This will provide a collective understanding of all prototype modifications, site requirements, specialized equipment requirements, furniture fixture and equipment requirements, and special features to be included in the fire station. Site Selection: Fortress can provide a thorough evaluation of potential sites if desired. This study would include a demographic analysis of population density/growth, accessibility, drive times related to ISO scores, construction feasibility, and cost. 3rd Party A/E Advisor: This partnership will include a third-party state-certified architect, landscape architect, or engineer to review the building plans, site plans, and construction process for adherence to construction documents. Final Plan: At the completion of the Project Discovery and site selection stage, Fortress will develop the final site and building plan to finalize project costs; this will regularly be reviewed throughout the design process with input from City stakeholders. Financing: Fortress can arrange competitive financing options, which would enable the City to finance 100% of the design/construction cost, land purchase, third-party architect/engineering fees, and other costs. Details of financing options were provided in the proposal, along with a forecasted cost analysis for discussion with City stakeholders. Construction: Once site plans, building, and financing are finalized, the construction sequence will commence. Fortress and its affiliates will perform the site improvements and construct the fire station. Fortress included a portfolio of similar, highly relevant project experience and references. Post-Construction Follow-up and Close-out: Fortress highlighted a strong commitment to the post- construction process, which is critically important once the facility is operational. Fortress will provide extensive training and education sessions with Fire Station users and stakeholders – as well as detailed, station-specific maintenance and operational guides to provide the City with a documented close-out package on the operation and maintenance of the facility. Proposed Timeline Fortress provided an aggressive project schedule that overlaps different pre-development activities to shorten the pre-development phase to 6 months culminating with the completion of the Construction Documents. Permitting is estimated to be completed in 3 months and construction completion in 11 months, resulting in a 20-month development schedule. If the City wanted to modify one of the prototypes, we would assume an additional 1 to 1. 5 months to accommodate changes. If the City developed the fire station, we estimate it would take much longer to complete the project. Considerations include soliciting and contracting an A/E firm and a contractor. It is estimated these linear solicitations would add 5 – 6 months to the project. If the permitting and construction were the same as Fortress’s proposal, the total duration would be 25 - 26 months. FORTRESS TEAM Fortress team members have extensive experience focused on public safety facilities, fire stations, fire training facilities, law enforcement facilities, campus hardening, and other relevant project types. Public Facility Development services for Fortress are handled by Fortress Group (Fortress). The Fortress and Fortress executive and project management teams have worked together on many similar projects and have strong synergies that will benefit the delivery of this project. Together they have a broad understanding of the P3 delivery model, the nuances of working with public sector clients and the importance of insurance, bonding, and financial considerations. The team has a solid financial position and can bond up to $60M. The team makeup includes companies that are recognized as industry leaders experienced in delivering public sector, Public Safety related P3 projects in the state of Florida. A summary description for each team member firm is included below: Founded in 2010 by two long-term partners in the commercial development industry, Fortress offers a full array of services including site selection, due diligence, entitlement, design, and turn-key construction. Fortress's executive team has completed more than 15 million square feet of Class A self-storage facilities, 52 charter school projects equaling 3.1 million square feet, and 29 hotels, marinas, medical offices, and retail projects. jl2 Architecture is an Architectural firm that brings together 22 years of strong relationships and experience throughout the entire state of Florida. Founded with strong ethics and a desire to take care of our clients with a personal dedicated approach, our focus is on public safety, municipal, and civic-oriented projects that enhance the environments of our local communities. Johnnie Lohrum Jr., President, has actively managed nearly 5 million square feet of municipal, community, and public safety projects including dozens of Fire Stations that closely mirror your project requirements. Halff is an employee-owned full-service engineering and architecture firm headquartered in Richardson, Texas. The firm provides services throughout the Southeast from 31 offices in Texas, Arkansas, Oklahoma, Louisiana, and Florida. The firm's staff of 1,400 includes engineers, architects, planners, scientists, and surveyors. Halff is ranked #85 in Engineering News-Record magazine's list of the top 500 design firms in the United States. Halff employees are members of a company built on integrity, technical knowledge, and commitment to client service. These factors will contribute to a successful project that meets your needs, goals, milestones, budget, and schedule. Nelson Mullins is comprised of experienced lawyers specializing in a wide spectrum of industries including P3s, public finance, project finance, tax, and government contracting, procurement, and construction. This experience enables the Nelson Mullins legal team to navigate the transactional, financial, and regulatory elements of P3 projects, tailor specialized solutions to fit the parties' needs, and facilitate successful project deliveries. Greenberg Traurig LLP assists clients interested in seeking state appropriations funding for their P3 facilities. This includes lobbying the Florida Executive and Legislative branches, and various state agencies. These services are provided to our clients with no initial fee. Fortress Secured LLC and Greenberg Traurig LLP cannot give any assurance or guarantee concerning the success or outcome of this additional service. An organizational chart showing the team structure was included in the proposal and is shown below: A summary of individual team member qualifications was included and is highlighted below: Shannon Everett President - Fortress Before transitioning to Fortress as President, Mrs. Everett previously held an instrumental role at Fortress Construction Group as Business Development strategy and implementation director overseeing new projects from development through activation. Through this role, Mrs. Everett identified a need for a dedicated public project development firm utilizing the Florida Public Private Partnership project delivery methods combined with creative financing. She now leads Fortress with a team of public safety, development, construction, and finance professionals ensuring a cost-effective, best-practices approach with timely delivery for each project. John O’Grady Director of Public Projects – Fortress Mr. O’Grady is a 33-year Public Safety Professional and started his Law Enforcement career in 1986 with the Orlando Police Department. During his 26-year run with OPD, Mr. O’Grady developed a reputation as a servant leader and professional with extensive experience in leading operations, administration, projects/programs, and staff. He was responsible for overseeing numerous public safety construction projects that included a 40,000-square-foot state-of-the-art gun range, multiple Fire Stations, and Police Evidence facilities and Sub-stations. Mr. O’Grady moved up to the rank of Captain before retiring in 2013 and subsequently became Chief of Police for the City of Mount Dora; he later became Director of Public Safety, where he led the operation and administration of Police and Fire services. Mr. O’Grady was part of a finance team that was successful in obtaining a $22M bond for three new fire stations. Under his leadership, the Police Department received the highest accreditation level “Excelsior” status and the Fire Department went from an ISO rating of 3 to 2. Mr. O’Grady joined the Fortress team in 2019. Charles Cordes President – Fortress Group A pioneer vendor in the self-storage industry since 1989, Mr. Cordes was co-founder and vice-president of U.S. Door & Building Components ("U.S. Door") before co-founding Fortress and Fortress. While navigating U.S. Door to a leadership position within the metal building and self-storage component industry, Mr. Cordes actively developed class "A" commercial projects in Central Florida with local investors. Specializing in manufacturing processes, steel consumption, operational administration, and global sales management, Mr. Cordes is a notable figure in the global self-storage industry. He was a founding vendor member of the Florida Self Storage Association (FSSA) and served as one of its Presidents. Mr. Cordes has been a featured speaker at industry trade shows and has authored or been quoted in numerous trade publications. Personally holding a General Contractor license in several states nationwide, Mr. Cordes maintained close supervision of projects developed in all markets throughout America, Europe, Mexico, and South America. Departing in 2009 from U.S. Door after 25 years in the manufacturing, commercial development, and self-storage industries, Mr. Cordes fixated on additional development and construction in the new emerging market of charter schools, an industry that was still very active during the downturn in the economy – and became a pioneer in the concepts of P3 delivery for public sector projects. Heather Botha Senior Project Manager, Fortress Group Mrs. Botha is a licensed State of Florida Certified General Contractor and was formerly the President of a General Contracting firm specializing in mixed-use public sector projects; she has experience at all levels of project management, including due diligence, entitlement management, design, budget, schedule, and construction management. Johnny Lohrum, Jr. President, jl2 Architecture Mr. Lohrum is President of jl2 Architecture and has 22 years of experience managing more than 3 million square feet of public safety projects. He has spent the last 15 years focusing on growing his experience in the public safety market and a passion for creating efficient and healthy fire stations and training centers. Mr. Lohrum is highly client-stakeholder-focused, providing attention to detail that ensures the program for the facilities is complete and meets the needs and expectations of the users. Chuck Hiott, PE Director of Land Development, Halff engineering/architecture Mr. Hiott brings experience in the design and layout of municipal sites including all grading, drainage, and geometry. He also has extensive experience with project management including preliminary and final design, permitting through relevant agencies, cost management, bidding, and construction management. Sherri French, PLA Vice President, Deputy Practice Leader Planning and Landscape Architecture, Halff engineering/architecture Sherri French is a 15-year industry veteran and leads resilience planning and landscape architecture for Halff in four states. She will be involved from early concepts to project completion and will work closely with City stakeholders to execute the landscape standards and plan for the project. Drew Sanders Environmental, Halff engineering/architecture Drew has extensive experience with environmental permitting for public sector projects; this expertise includes project management, environmental permitting, ecological assessments, and habitat mapping of terrestrial and aquatic systems, plant and wildlife surveys, listed species surveys, and many other environmental aspects. Mark Llewellyn, Jr., PE Signage, Halff engineering/architecture Mr. Llewellyn has 19 years of experience in various areas of civil engineering including site feasibility, regulatory permitting, traffic engineering and modeling, signalization design, intelligent transportation systems design, and roundabout feasibility and design. Mark is involved in the production of construction documents, coordination of work efforts, and working closely with all project stakeholders. Suzanne Osborne, PSM Survey Project Manager, Halff engineering/architecture Suzanne has extensive experience in surveys including boundary, right-of-way, topographic, and sectional. She has a strong grasp of the surveying process, writing of legal documents, field data collection, layout and control, QA/QC processes, and project management. Project Approach Fortress has an integrated approach throughout the project lifecycle, from design through completion and post-construction closeout. Each member of the team reports to Fortress, who will report to City project leadership. Monthly progress reporting meetings will provide full transparency for the entire team to ensure all project targets are achieved in a timely manner. Cost Control Fortress will assume all project risk that will be captured in the contract. A final guaranteed cost will be included in the contract along with a comprehensive pro forma that describes all relevant aspects of the project. Fortress has a project management platform with industry-standard software that will provide a seamless reporting platform with full transparency and access for all project stakeholders. Risks that will require the most attention were identified in the proposal, which will require a team effort, including the City project management team, to fully mitigate: •Site logistics and development •Procurement •Scheduling These challenges will be addressed during the preconstruction period. Fortress has all the most updated industry best practices as part of its disciplined risk management process. Fortress does implement a structured subcontractor bidding process with detailed debriefs with the trades on their bids to ensure full scopes are covered and decisions can be made based on the total value of bids, including comprehensiveness of scope interpretation, schedule, and talent provided on-site. Safety Fortress Safety program follows all OSHA standards and is regularly updated. There will be a formal Safety Kickoff program with the City and all project stakeholders before the site is mobilized. Quality Assurance / Quality Control Fortress initiates this process early in development and activates a detailed workflow for each phase from design to construction. Aspects include value management during the design process, qualifications during bidding, and contractor and EOR review of submittals during preconstruction. The process includes design reviews and page turns of the design documents with user stakeholders to confirm the completeness of the program and scope. The program is structured, detailed, and milestone-driven to ensure quality at each critical phase of the project design and construction. Schedule Management Fortress has all the updated industry-standard software to manage all aspects of the schedule, beginning with the Master Schedule, which will be developed with input from project stakeholders, monitored, and updated bi-monthly. Each schedule component is broken down by architect/engineer, contributor, duration, and completion date. Team Past Performance Fortress provided examples of 10 comparable projects. Three of the projects appear to be developed by Fortress. The other 7 projects were designed by their architect, Johnnie Lohrum with jl2 Architecture. The Ft. Myers Shores Fire District Station 82 is a new state-of-the-art Fire Station capable of withstanding a category 5 Hurricane. Fortress Secured worked with Fire Department leadership and the community to ensure the new station facade seamlessly fits into the community landscape. The design included standing seam roof, CMU block with stucco, and distressed red brick. The 11,812-square-foot station includes three drive-thru apparatus bays, 6 bunk rooms, Officer's bunk, office space, indoor and outdoor kitchen, day room, treatment room, fitness room, conference and training room, and the required Hot Zone area. With the 2-acre parcel. we were able to incorporate a 3-story training tower designed for rappelling and laddering, search and rescue, hose advancement, and confined space activities. Fire Station 81 is located in the middle of the City's historic downtown adjacent to both the City Hall and Police Station. The new 22,000-square-foot, $6.1 million, 2-story fire station is one of the busiest fire stations in all of Volusia County and will also provide Emergency Medical Services. Tilt wall construction with brick in-lays, appropriate proportions, arches and large 4-fold bay doors were a few of the design aesthetics utilized to establish an "old school" Chicago fire station look. Training is incredibly important for today's modem firefighter. Several built-in training elements were included within the design to provide the City with cost-effective ways of naturally introducing training using the building itself such as: 3-story training tower with functional fire risers, locations for training on the roof, repelling, fire pole, mezzanine, ladder training, confined space training within the structure, and a second floor man hole for tri-pod/repelling. The facility contains health & safety features such as pressurized air locks, concrete floors, decontamination rooms, chemical storage, visible fitness & control rooms, exhaust capture/filtration in apparatus bays, zoned lighting & alerting and other measures for controlling carcinogens. -*Project Architect, Johnnie Lohrum Jr., performed this work with a previous firm. The 19,200-square-foot, $6.5 million fire complex is located within a growing community of Estero located on Corkscrew Road. The project is also surrounded by a protected nature preserve which was utilized as inspiration for the interior and exterior design aesthetics. A wrap-around porch, standing seam metal roof and exposed timber beams help to ground the new complex within the surrounding community. Also, located on the five-acre site is a training complex comprised of training scenarios that mimic the real-world conditions fire fighters will come across in the Estero community. Training scenarios for trailers, single-story homes, multi-story homes and multi-family homes were designed. 96 shipping containers were stacked and utilized to create the multi-story training scenarios. The facility also contains health & safety features such as pressurized airlocks, concrete floors, decontamination rooms, visible fitness & control rooms, exhaust capture/filtration in apparatus bays, zoned lighting & alerting and other measures for controlling carcinogens. Every occupied space utilizes · large windows providing natural daylight and views of the preserve, which assists with the mental health of the building users. Other features provided for the complex include a running/walking trail for training, a 7,000-square-foot fleet maintenance facility and helicopter landing pad. -*Project Architect, Johnnie Lohrum Jr., performed this work with a previous firm. The 11,200-square-foot, $6.7 million hardened essential fire station was developed as a prototype for the Parrish Fire District to re-use in other upcoming locations. The 7-acre site was donated by a local developer and the Fire District in tum will provide emergency services to the new surrounding community. Elements such as wood, standing seam metal roofs, clerestories and front porch were utilized to ensure the design aesthetic fits well with-in the community. The facility contains health & safety features such as pressurized air locks, concrete floors, decontamination rooms, chemical storage, visible fitness & control rooms, exhaust capture/filtration in apparatus bays, zoned lighting & alerting and other measures for controlling carcinogens. A large training/classroom/community room sits adjacent to the public entry and also serves as an emergency operations center during activations. The center spine of the station is washed with natural light from the clerestory above, illuminating a series of images & graphics (history wall) educating viewers on the history of the area. A 4-story separate training tower was designed and constructed on the same site. The tower includes, HVAC props, sloped roof props, training rooms, storage, sprinkler training, Denver drill training, evolutions training and open balcony rails for repelling. -*Project Architect, Johnnie Lohrum Jr., performed this work with a previous firm. The 23,000-square-foot, $12 million, two-story hardened essential facility will serve as the administration headquarters for Sarasota County's Fire, EMS, Inspections and Fire Marshall. The county's existing Emergency Operations Center has an adjacent site previously set aside for this new essential fire services facility. The new fire administration facility will operate as a mini-EOC allowing for seamless and separate operations by both County organizations. The facility is fully survivable and self-sustaining utilizing fully redundant systems and utilities for 7 days. Parking for public day-to-day operations as well as parking for crew, families and upper management is provided behind a secured perimeter fence. The building's front door is highlighted with a two-story lobby space and lots of glass bringing natural lighting deep into the back of the building while also displaying a 1940's Mack fire truck. This truck is steeped in County history and will be parked within the museum adjacent to the history wall displaying the department's growth over the past 40 years. Several building options were developed in collaboration with the County ultimately landing on an L-shape facility that wraps around 3,200 plus year old historic oak trees which will provide shade for a newly design courtyard. The shared break room is located within the center of the building and has roll-up doors helping to bring this outdoor courtyard space into the facility providing needed decompression space. This courtyard space along with several other sustainable strategies were utilized in support of the LEED Silver design requirements. -*Project Architect, Johnnie Lohrum Jr., performed this work with a previous firm. The 13,356-square-foot, $8 million hardened essential is a new fire station needed to help improve the Fire District's response times in the growing Sanford community. Seminole County has utilized the same prototype fire station design for multiple facilities over the past several years, but wanted it updated to meet the most current standards for a modem state-of-the-art, healthy fire station. Some modifications were the addition of a fourth apparatus bay, additional bunk space for crew, additional day spaces, a more efficient HVAC system, 4-fold efficient bay doors, decontamination spaces, better alerting systems, exhaust control in the apparatus bays and other carcinogen control strategies. The design aesthetic utilizes a new civic front door, standing seam roofs, metal panels, wood look metal siding and properly proportioned windows to integrate the new building into an existing residential community. The station is also situated adjacent to the Wekiva community trail allowing ATV emergency services vehicles to provide emergency protection to additional parts of the community. This prototype station is currently being re-used (with different exterior designs) for fire station 25 and other facilities. -*Project Architect, Johnnie Lohrum Jr., performed this work with a previous firm. The new 14,440-square-foot, $6.1 million, hardened essential facility functions as a fire station for the County of Volusia and a full Aircraft Rescue and Fire Fighting Facility (ARFF) for the Daytona Beach International Airport. The two entities share responsibilities to better serve the Daytona Beach Community. An initial building assessment was performed on the 30-year-old ARFF facility to determine functionality of the existing building and its systems. Several months were spent master planning and studying the existing airfield to determine the appropriate location for the new station. Several design studies and collaborative meetings were held with the County, Airport staff, FAA, and other county representatives. Ultimately, it was determined that the most appropriate location was the current site. A temporary station was designed and utilized by the fire crew while the old station was demolished and the new facility was constructed. The facility contains health & safety features such as pressurized airlocks, concrete floors, decontamination rooms, chemical storage, and other measures for controlling carcinogens. The project contains a large training/classroom outfitted with state-of-the-art technology & A/V and flexible furniture allowing it to be converted into an emergency operations center during an activation event. In 2019, the project was awarded the 2019 Commercial Service Airport "Project of the Year". -*Project Architect, Johnnie Lohrum Jr., performed this work with a previous firm. Fortress has completed the newest CubeSmart facility in St. Petersburg, FL. This state-of-the-art four- story facility features indoor drive-through access for guests to load and unload out of the weather, upgraded security amenities, and over 82,000 square feet of rentable space. The facility utilizes an insulated metal panel facade for increased energy efficiency, low maintenance, and prolonged life cycle. Fortress worked with local community leaders to redevelop a blighted motel site and bring much needed modern retail and storage asset to local residents. This new storage center has been well received in the community, with excellent performance achieving over 14 % occupancy shortly after opening. Fortress functions as an off-balance sheet facility developer for many of the premier storage brands across Florida. Fortress worked with the City of Jacksonville and Jacksonville Classical Academy to place this campus on an unused 10-acre city-owned parcel near downtown. The school was positioned to provide public access to the nearby creek while providing secured access to the campus. The school consists of tilt- wall construction, an open cafetorium with second floor mezzanine observation area, walk-out garden kindergarten classrooms, and full science and art specialty rooms. Jacksonville Classical Academy was built for the Vestcor Family Foundation for Ambassador John D. Rood (Ret.). A large training/classroom/community room sits adjacent to the public entry and also serves as an emergency operations center during activations. The center spine of the station is washed with natural light from the clerestory above, illuminating a series of images & graphics (history wall) educating viewers on the history of the area. A 4-story separate training tower was designed and constructed on the same site. The tower includes HVAC props, sloped roof props, training rooms, storage, sprinkler training, Denver drill training, evolutions training, and open balcony rails for repelling. -*Project Architect, Johnnie Lohrum Jr., performed this work with a previous firm. FINANCING Fortress has an in-house municipal lease financing group that will assist in organizing favorable financing structures for the City. Fortress provided three financing options: Option 1 – Tax-exempt District (City) Lease Purchase Agreement Option 2 – Bank Bond Loan with Non-Ad Valorem Revenue Pledge Option 3 – Bonds Issued on the Open Market with Non-Ad Valorem Revenue Pledge The basic principles and differences of these options are summarized below from an excerpt of the Fortress proposal. Financing Approach While general obligation debt structures and revenue bonds are the most common form of financing infrastructure projects, alternative lease financing structures are becoming increasingly utilized to finance real property over long periods. The Fortress team includes a municipal lease finance expert who is dedicated to providing the City with the most appropriate and competitive financing option for Fire Station #38. Fortress has a strong network of relationships with financing institutions both on a regional and national level – and has secured over $400M in development financing. Fortress will work closely with the City and bond counsel to review financing options and facilitate a single-investor financing structure that will bring the most benefit to the City. Fortress can also solicit financing proposals on the City’s behalf through a formal RFP process. Fortress does not separately profit from any of the financing scenarios. A forecasted cost overview was provided for full review by City stakeholders. Financing Structure Option 1: Tax-exempt District (City) Lease Purchase Agreement Tax-exempt leases are structured as a series of one-year renewable obligations that are subject to the municipal entity's ability to appropriate funds for the continuation of lease payments. Payments constitute a current expense of the City and, if sufficient funds are not available for payment, the agreement is terminated. In a City lease involving equipment, the City is required to return the equipment in the event of the lease being terminated. However, in real property financing returning a building is not an option. Therefore, as additional investor security, in a real property lease financing an additional ground lease is entered into between the City and the lender for a term greater than the municipal lease term. In the event of non-appropriation, the lender has the right to re-lease the property to recover its investment. At the end of the ground lease term, the building is turned over to the municipality free and clear. Some advantages to using a tax-exempt lease to finance your fire station: •Avoids constitutional or statutory limitations on issuing public debt. •Voter approval is not necessary •Low, fixed tax-exempt rate for the life of the financing •Flexible payment structures and terms (annual, semi-annual, quarterly, or monthly payments are available) •Up to 20-year financing available •Lease may be prepaid •Low issuance costs; no ongoing disclosure requirements •Payments can be delayed until project construction is complete •Through a Master Lease structure, the City has the option to finance the fire station as well as necessary equipment including a new fire truck •Spreads out the cost of an asset over the useful life of that asset or project •Faster and more efficient financing than bond or other public debt issues A tax-exempt City Lease Purchase Agreement with a Covenant to Budget and Appropriate (CBA) may be considered more secure by investors than a standard lease and is the most common form of bank financing for equipment purchases with Florida cities. Florida is unique in that it does not allow investors to take a security interest or title in equipment or real property when providing financing to cities, counties, or districts. A long-term unsecured financing that is subject to annual appropriation of funds creates increased investor risk. In a CBA structure, the City provides an affirmative covenant that it will budget and appropriate funds for the lease payments. If funds are not appropriated for lease payments in a given year, the lease is not terminated. It continues in place and the process of budgeting and appropriating payments continues the next year and after until the lease is paid in full. Because investors consider this structure less risky than a traditional lease, a lower interest rate may be obtained. Option 2: Bank Bond Loan with Non-Ad Valorem Revenue Pledge This structure is a tax-exempt loan directly between the city entity and the lending institution. It involves a pledge of available non-ad valorem revenues such as sales tax, franchise fees, special fire assessment revenue, etc. as security for financing. This structure is common for special fire districts or could be attractive for a city that has instituted a special fire assessment fee for services. Depending on the type/history of the revenues pledged, lenders would typically consider this structure the safest, most secure non-ad valorem financing and provide a competitive interest rate. Advantages of this structure: •Interest rates may be lower than taxable loans with otherwise similar terms and since the underwriting and compliance terms are established directly with the lending institution, the initial costs and the ongoing compliance costs are much less than bonds issued on the open market. Option 3: Bonds issued on the Open Market with Non-Ad Valorem Revenue Pledge This structure is the issuance of bonds for purchase by institutional and other investors and involves significant underwriting fees and ongoing compliance costs. It involves a pledge of available non-ad valorem revenues such as sales tax, franchise fees, special fire assessment revenue, etc. as security for financing. The interest rate and terms are dependent on the credit rating of the borrowing City entity. The initial issuance costs and ongoing compliance costs typically make this structure cost-prohibitive for smaller loans. Financing Terms: •20-year financing: 4.75%* for city Lease or Tax Exempt Bond Loan from Bank; 6% for AA-rated district Bond issued to the open market. (As of February, 2024) •Option 1 assumes a standard city lease structure with annual lease payments in arrears, due 12 months from the funding date. Option 2 assumes a Bank Bond Loan with interest capitalized during the construction period. Option 3 assumes no deferral of payment during the construction period and the repayment period begins immediately. •Longer-term interest rate locks are available between 60-120 days before financial closing (dependent on the selected investor). •Lower rates may be available under lease with CBA language or revenue pledge (Option 1). *Interest Rate – Estimated Term: Up to 20-year maximum financing is available, shorter terms available. Payment Structure: A variety of payment structures are available including monthly, quarterly, semi-annual, and annual payments, skipped payments, and escalating payments. Finance Fees: There is no obligation, legal, or other fees of any kind charged by the bank or Fortress with option 1 above. Option 2 will involve some fees and Option 3 will include substantial fees. Lease Payment Estimation: Annual lease payment could start as low as $446,630 assuming the following: (see forecast) •Interest rate of 4.75% for lease. •20-year lease term; annual payments in arrears. •Building base cost including architectural and engineering: $5,883,062 •Site improvements, including demolition (estimate, due diligence to determine final costs): $750,000 •Specialized equipment and off-site improvements are reflected as an allowance and NOT included in the estimate. Forecasted Cost Overview – Station #38 The forecasted cost overview below details estimated costs should the City choose to proceed with the estimated 7,500-square-foot Fire Station. The bottom of the table shows allowances that may be included and financed as part of the project if the City chooses to proceed. Square footage may be adjusted based on any changes desired by the City. PROPOSAL EVALUATION When the City received the unsolicited proposal from Fortress for the development of Fire Station #38, they engaged ZHA to assist with complying with Florida’s P3 statutes. Accordingly, ZHA reviewed the proposal to determine if it met the baseline requirements for further evaluation. A Notice of Bid/Request for Proposals was issued on August 13, 2023. As of the published proposal due date of September 27, 2023, no competing proposals were received. Subsequently, ZHA requested additional clarification information from Fortress to more fully understand the proposal to allow for a thorough evaluation as required by Florida Statutes. The evaluation included review and evaluation of the design and construction proposed to ensure the material quality and standards, interior space utilization, budget estimates, design and construction schedules, and sustainable design and construction standards were consistent with public projects. Additionally, a financial analysis of the financing and ongoing lease obligations was performed to determine if the proposal was fair, reasonable, and cost-feasible. Design & Materials Fortress proposed a 7,500-square-foot, 3-bay design configuration designed by their architect (jl2 Architecture) as a prototype fire station for municipal use. The design floor plan demonstrates appropriate knowledge of the spaces and adjacency requirements included in fire stations. Additionally, the proposed materials, while not specified in extensive detail, were described as materials and systems appropriate for this type of facility. ZHA consulted with the City regarding the adequacy of the prototype floor plan for their use. Through discussions with fire department leadership, it was determined that the Prototype generally meets the City’s requirements and needs, but some modifications will be needed to accommodate their projected staffing and equipment requirements. Utilizing the proposed prototype design as the baseline, there appear to be opportunities to modify the plan without wholesale changes, therefore providing the quickest schedule to complete the design and construction process. Fortress can accommodate modifications to the prototype, but the extent of any modifications would affect the cost and schedule. It is assumed the modifications would have proportional impacts on the project costs. This is discussed further in the schedule and cost evaluations. Project Schedule Fortress prepared a development schedule from the initial P3 submission to the completion of the building construction totaling 24 months. Based on where the City is in the process, if Fortress was approved, it would be 17 months to completion of the construction. If the City were to develop the project, it would take an additional 4 to 6 months to complete construction. This additional time would come from the solicitation for an architect and bidding on the construction contract. Project Development Costs Fortress provided a project cost estimate for the Prototype for Fire Station #38. The project cost is estimated at $4,819,684 which includes: building construction costs and soft costs of third-party review fees, issuance costs, capitalized interest, and payment reserve fund. The project cost also includes a site development allowance but no offsite improvements (such as signalization if required). Optional Allowances are identified for: Fixtures, Furnishing or Equipment: $ 400,000 Specialized equipment: $ 400,000 Offsite Improvements: $ 220,000 Performance & Payment Bond: $ 43,377 ZHA reviewed the building construction costs of 26 fire station projects completed between 2008 and 2024 and adjusted the construction costs to 2024 dollars. ZHA’s experience with fire stations is that they can be incredibly lean or very expensive. This disparity becomes evident when the building construction square foot costs range (in 2024 dollars) from a low of $150.37/SF to a high of $900/SF. The average cost of the aggregate 26 fire stations is $405/sf. The average of the 15 fire stations built since 2010 is $453/SF. The Fortress proposal appears to be a good building grade that will hold up to its intended use. It doesn’t include excesses in space or materials. Following is a comparison of the estimated total project cost if developed by the City versus the Fortress For this evaluation, we assumed a mid-range cost of $425/SF for the building construction. ZHA estimated costs the soft costs and compared them to Fortress’ soft costs. Site development cost is assumed to be a pass-thru cost of $750,000 in both cases. Third-party oversight is required by the P3 legislation and is estimated at $60,000 in the Fortress proposal. The extent of the oversight third-party for the project development is assumed higher than Fortress’ estimate due to staffing limitations in assisting with the oversight of the design and construction. The estimated oversight cost is assumed to be $160,000. The total costs of the Fortress proposal and the estimated cost for the City to develop the project are comparable. The City’s total development cost is slightly higher than Fortress’ cost. However, Fortress’ third-party oversight costs will likely be higher than estimated, presumably equalizing the two estimates. Based on our cost evaluation, the Fortress proposed development cost is a reasonable market cost. Project Costs Building Costs Building Costs & Soft Costs (AE,soils testing, survey, conting.)3,885,000$ 518.00$ /SF 3,187,500$ 425.00$ /SF Soft Costs -$ In Building Costs 318,750$ 10.0% Specialized Equipt. (Generator/SCBA/etc.)Allowance 400,000$ LS 400,000$ LS Site Development 2.09 ac.750,000$ Allowance 750,000$ Allowance Contingency -$ In Building Costs 318,750$ 10%% Contingency Site Acquisition Costs -$ -$ Off-site Improvements Allowance 220,000$ Allowance 220,000$ Allowance 3rd Party Oversight*60,000$ Est.160,000$ Est. P&P Bond 43,377$ LS 48,763$ 1% Square Feet 7,500 714.45$ $/SF 720.50 $/SF Total Project Costs 5,358,377$ 5,403,763$ Fortress Developed Ocoee Developed Ocoee P3 FS 38 Evaluation Project Development Costs 5-Mar-24 Project Financing and Operating Costs Fortress identified three primary financing options, which were summarized in the Proposal section: Option 1 – Tax-exempt District (City) Lease Purchase Agreement Option 2 – Bank Bond Loan with Non-Ad Valorem Revenue Pledge Option 3 – Bonds Issued on the Open Market with Non-Ad Valorem Revenue Pledge Financing terms for fixed Tax-exempt interest rate for a 20-year term would be 5% or less. Debt would be fully funded at closing, and the unused proceeds would be held in an interest-bearing escrow account (around 2.0 / 2.5% or so). The interest would be charged on the full debt from the date of funding, with a partial offset from the escrow account interest on the unused funds). Legal fees for lease and debt would be approximately $15,000. The Fortress proposal did not make a specific financing recommendation. The city Finance director identified the City’s bond rate for a 20-year, $5,000,000 bond to be 4.4% with $55,000 in financing costs. ZHA prepared the Project Financing Costs comparison of the Fortress proposal versus the City developing a fire station conventionally. An FFE package of $400,000 was included in all scenarios to identify a total project cost and annual cost. The City is currently able to get better financing terms. With all the costs above considered, the development cost is $79,299 less with City financing and the annual cost of the debt service is $24,908 lower using City financing. The annual cost does not include operating costs such as utilities, insurance, maintenance, etc. The lease samples provided by Fortress passed through all costs of operating the building including major capital repairs during the term of the 20-year lease. Financing and Agreements Fortress provided three financing options as well as several sample leases and agreements. Each financing option requires differing commitments from the City. The financing illustrated has the least amount of commitment from the City in terms of the obligation of future lease payments. Numerous legal considerations need to be discussed with the City's legal counsel to finalize a recommendation regarding which option to pursue if the City wants to move forward with this proposal. Total Project Costs 5,358,377$ 5,403,763$ Financing Closing Costs - Issuance & Capitalized Interest/Reserve 124,684$ add to Total Project Costs 55,000$ add to Total Project Costs Interest Rate 5.00%4.40% Term 20 yrs.yrs.20 yrs. Annual Payment 434,229$ 410,890$ Building Cost/SF 7,500 SF 57.90$ /SF 54.79$ /SF FFE Costs FFE Costs 400,000$ 400,000$ Annual Payment 31,678$ 30,109$ FFE Cost/SF 4.22$ /SF 4.01$ /SF TOTAL PROJECT COSTS Total Building & FFE 5,883,061$ 5,803,763$ Total Annual Payment 465,907$ 440,999$ Total Cost/SF 62.12$ /SF 58.80$ /SF Additional Project Cost (79,299)$ Additional Annual Lease Cost (24,908)$ /yr. CONCLUSION & NEXT STEPS Based on the evaluation of the proposed design, materials costs, schedule, and financing options, the proposal represents a reasonable option for developing a new fire station. The project development costs are in line with what the City could develop the project for. The financing cost through Fortress’ options is currently higher than City financing. Fortress can deliver the project 4 to 6 months sooner than the City. If it is decided to move forward with the Fortress proposal, the next steps are to: •Meet with Fortress to evaluate financing options. •Meet with City legal counsel to discuss legal considerations of the financing structures. •Determine what, if any changes need to be made to the building floor plan.