JBCHS_ExchangeNorth_Final_RFQ_022015.doc

RFQ Number AFCEC-15-R-0002

Joint Base Charleston Enhanced Use Lease Project - Exchange North

United States Department of the Air Force

Air Mobility Command (AMC)

Air Force Civil Engineer Center (AFCEC)

Enhanced Use Leasing Project - Exchange North Joint Base Charleston

Request for Qualifications (RFQ)

RFQ No. AFCEC-15-R-0002

PROPOSALS ARE DUE NO LATER THAN 3:00 P.M. ET

17 March 2015 attn: kevin culp

AFCEC/CIUE

3515 S. General mcmullen San antonio, TX 78226-2018 Voice: 210-395-9516

Email: kevin.culp.3@us.af.mil Table of Contents

2Section 1.0

EXECUTIVE SUMMARY

21.1

AUTHORITY

21.2

PROJECT

21.3

EUL GOALS

31.3.1 Project Concept

31.3.2 Lease Term

31.4 Proposal Submittals and Selection of OFFEROR

41.5 Small Business

41.6 Project Documents

5Section 2.0

EXISTING CONDITIONS

52.1 Existing Conditions

52.2

LEASED PREMISES

52.2.1 Leased Land

62.2.2 Existing Improvements

62.2.3 Natural Infrastructure

62.2.4 Transportation and Access

72.2.5 Infrastructure and Utilities

82.2.6 Community Services

82.2.7 Development Considerations

10Section 3.0

PROJECT REQUIREMENTS

103.1

GOVERNMENT LEASE CONSIDERATION

103.2

TRANSACTION EXPENSES

113.3

LEASE TERM

113.4

LEASE EXPIRATION

113.5

TAXES

113.6

COMMUNITY SUPPORT FACILITIES AND SERVICES

113.7

INSURANCE REQUIREMENTS

113.8

PAYMENT AND PERFORMANCE BONDS

123.9

LAND USE RESTRICTIONS

123.10

ACCESSIBILITY

123.11

MUNICIPAL SERVICES TO BE PROVIDED BY THE GOVERNMENT

123.12

GOVERNMENT SUPPLIED UTILITIES

133.13

DEVELOPMENT

133.14

FINANCING AT LEASE EXECUTION

133.15

LESSEE EQUITY CONTRIBUTION

133.16

CROSS COLLATERALIZATION AND CROSS DEFAULT

133.17

PROJECT FINANCIAL VIABILITY AND SUSTAINABILITY

133.18

DEMOLITION RESERVE ACCOUNT

143.19

RELATED PARTY FEES

143.20

ANTI-TERRORISM/FORCE PROTECTION AND DAVIS BACON ACT

143.21

CONSTRUCTION CONSULTANT

143.22

CODES STANDARDS AND REGULATIONS

143.23

PERMITS

143.24

CERTIFICATE OF COMPLIANCE

153.25

PROFESSIONAL CERTIFICATION

153.26

CONSTRUCTION CONFERENCES

153.27

RELOCATION PLAN

153.28

ACCESS AND FENCING

153.29

HISTORIC PRESERVATION PLAN

163.30

DEMOLITION PLAN

163.31

DISPOSAL SITE

163.32

PROPERTY OPERATIONS

163.33

RESTRICTIONS ON FOREIGN PARTICIPATION

163.34

ENVIRONMENTAL COMPLIANCE

173.34.1 Environmental Due Diligence

173.34.2 Asbestos Containing Material (ACM)

173.34.3 Lead-Based Paint (LBP)/Lead-Based Paint Hazards (LBPH)

183.34.4 Radon

183.34.5 Underground Storage Tanks (USTs) and Oil Water Separators (OWS)

183.34.6 Soil

183.34.7 Environmental Planning and Consultation Laws, Regulations, and Presidential Executive Orders

193.35

PORTFOLIO MANAGEMENT REPORTING REQUIREMENTS

193.35.1 Quarterly Reports to Government

193.35.2 Annual Reports To Government

193.35.3 Development / In-Kind Project Reports

193.35.4 Mortgage And Financing Reports

20section 4.0

INSTRUCTIONS TO OFFERORS

204.1

GENERAL

204.1.2 Cancellation of the RFQ by the Government

204.1.3 Hold Harmless

204.1.4 Amendments to RFQ

204.2

ESTABLISHING EVALUATION RANGE

214.3

DISCUSSIONS

214.4

ORAL PRESENTATIONS

214.5

RESTRICTION ON DISCLOSURE AND USE OF DATA

214.6

CONFLICT OF INTEREST

224.7

SUBMISSION OF OFFERS

224.7.1 Electronic, Telegraphic, or Facsimile Offers

224.7.2 Submittal Due Dates

224.7.3 Proposal Packaging

224.8

SUBMITTAL REQUIREMENTS

224.8.1 Mandatory Clauses

224.8.2 Proposal Presentation

234.8.3 RFQ Number

234.8.4 Volume Sections

234.8.5 Incomplete Submittals

234.9

EXECUTION OF PROPOSAL

234.10

LATE SUBMISSIONS, MODIFICATIONS, AND WITHDRAWALS OF PROPOSALS

234.10.1 Late Submissions

244.10.2 Withdrawals of Proposals

244.11

EVIDENCE OF DATES AND TIMES OF MAILING RECEIPTS

244.12

ELECTRONIC COPIES

254.13

FINANCIAL PRO FORMA

264.14

SUBMITTAL REQUIREMENTS FOR ALL OFFERORS

274.14.1 Material Changes

274.15

VOLUME I: PROJECT CONCEPT SUBMITTAL REQUIREMENTS

274.15.1 Part A: Factor 1 – Concept

284.15.2 Part B: Factor 2 - Return to the Government

294.16

VOLUME II: CAPABILITY AND EXPERIENCE SUBMITTAL REQUIREMENTS

294.16.1 Part A: Factor 3 – Capability and Experience

304.16.2 Part B: Factor 3 – Past Performance

304.16.3 Part C: Factor 3 – Financial Capability

314.17 VOLUME III: POST-SELECTION SUBMITTAL REQUIREMENTS

314.17.1 Factor 4 - Exclusive Negotiations Integrated Master Plan and Schedule

32SECTION 5.0

BASIS OF SELECTION

325.1

STRATEGY

325.2

EVALUATION FACTORS AND SUBFACTORS AND THEIR RELATIVE ORDER OF IMPORTANCE

325.3

PROJECT PROPOSAL RATINGS

335.4

PAST PERFORMANCE

355.5

FACTOR 1: CONCEPT

355.5.1 Subfactor 1.1: Market Analysis

355.5.2 Subfactor 1.2: Land Development Plan

355.5.3 Subfactor 1.3: Marketing and Leasing Strategy

355.5.4 Subfactor 1.4: Property and Asset Management

355.6

FACTOR 2: RETURN TO THE GOVERNMENT

355.6.1 Subfactor 2.1: Value

365.6.2 Subfactor 2.2: Risk Mitigation

365.7

FACTOR 3: CAPABILITY AND EXPERIENCE

365.7.1 Subfactor 3.1: Project Team Experience and Capability

365.7.2 Subfactor 3.2: Past Performance

365.7.3 Subfactor 3.3: Financial Capability

365.8

FACTOR 4: POST-SELECTION NEGOTIATIONS

36section 6.0 HIGhEST ranked offeror Exclusive negotiations

366.1

STRATEGY

376.2

LEGAL DOCUMENTATION

37SECTION 7.0 Conressional notification and reporting requirements

377.1

DOCUMENTATION

387.2

CLARIFICATIONS

List of Appendices

Appendix A – Depiction of the Land Appendix B – Third Party Property Interest

Appendix C – Environmental Baseline Survey

Appendix D – Insurance Requirements

Appendix E – Non-Disclosure Agreement

Appendix F – Mandatory Clauses

Appendix G – Offerors Cover Page

Appendix H – Potential Projects for In-Kind Consideration

List of Tables

3Table 1 – Existing Improvements by Area

3Table 2 – Acreage of the Leased Land

6Table 3 – Existing Improvements

26Table 4 – Volume Submittals for All Offerors

32Table 5 – Evaluation Factors and Subfactors – Order of Importance

33Table 6 – Ratings

35Table 7 – Subfactor 3.2 Ratings

38Table 8 – Contact(s) for Clarifications

Section 1.0 EXECUTIVE SUMMARY 1.1

AUTHORITY

Enhanced Used Leasing (“EUL”) is authorized under Title 10 U.S.C. Section 2667 (the “Enabling Statute”), as amended. This authority allows military installations to lease land and facilities to private or public entities in exchange for cash or in-kind consideration in an amount not less than the fair market value of the leasehold interest in the Leased Premises (as defined in Section 1.2 below).

Pursuant to this authority, the Department of the Air Force (the “Government”) is issuing a Request for Qualifications (the “RFQ”) to solicit proposals from qualified entities (“Offeror(s)”) interested in entering into an EUL with the Government by means of a site development lease (the “Lease”).

1.2

PROJECT

The Government has identified certain real property on Joint Base Charleston (JB CHS) available for leasing, in whole or in part, consisting of an approximately 76 acre parcel as more approximately depicted in the attached Appendix A (the “Land”). The Land contains certain Government-owned improvements and personal property more expressly described in Section 1.3.1.1 (collectively, the “Existing Improvements”) that will, unless otherwise provided in this RFQ, be leased to the Highest Ranked Offeror (the “HRO”) upon execution of the Lease. The Land and Existing Improvements are hereinafter collectively referred to as, the “Leased Premises”. Any additional improvements and personal property to be constructed and/or placed on the Leased Premises by the HRO (collectively, the “EUL Improvements”) shall be owned, operated, and maintained by the HRO in accordance with the Lease.

The Government is looking to the Offerors to determine a means of maximizing the value of the Leased Premises by constructing and/or placing EUL Improvements on, developing and operating all of the Leased Premises for commercial/light industrial office park or aerospace industry-related uses in conformance with the requirements set forth in Section 3 (collectively, the “Project”).

Upon selection, the Offeror will finalize plans for development and operation of the Project in a manner that is acceptable to the Government. As used herein the term “HRO” shall include any successors or assigns of the HRO approved by the Government or, in the event that the Government terminates negotiations with an HRO as set forth herein, then the term “HRO” shall mean the new or subsequent HRO the Government may select (if any).

1.3

EUL GOALS

The goals of the Project are to identify the Offeror who can best:

· Develop a successful, long-term, mutually beneficial business relationship with the Government;

· Maximize the value of the Project to the Government within the constraints and restrictions identified by the RFQ;

· Design and develop the Project in a manner that is compatible with Government uses on land located adjacent to the Leased Premises;

· Design, construct, finance, own, operate, maintain and manage the Project consistent with best commercial practices as determined by the Government;

· Deliver consideration to the Government in an amount not less than the fair market value of the leasehold interest in the Leased Premises; and

· Maintain positive relations with local governmental authorities and the communities adjacent to the Project.

· Execute a Project timeline, acceptable to the Government.

1.3.1 Project Concept The Project involves a non-Federal Acquisition Regulation (FAR) real estate transaction with the HRO, under which the Government proposes to lease the Leased Premises as described in Sections 1.3.1.1 and 1.3.1.2 to the HRO ‘AS IS’/'WHERE IS' for the Lease Term as described in Section 1.3.2. The HRO shall obtain any necessary financing, and design, construct, operate, maintain and manage the Project for the Lease Term (as hereinafter defined). The HRO shall provide the Government cash and/or in-kind consideration in an amount that is not less than the fair market value of the leasehold interest in the Leased Premises.

1.3.1.1 Existing Improvements At the Lease execution, the Government will lease the Leased Premises, described in this Section and Section 1.3.1.2. Any restrictions specific to individual facilities are identified in Sections 2.0 and 3.0.

Table 1 below provides a list of the facilities to be leased to the HRO.

Table 1 – Existing Improvements by Area

Exchange North consists of vacant land

1.3.1.2 Leased Land At Lease execution, the Government will lease approximately 76 contiguous acres of land to the HRO consisting of one parcel as identified in the following table:

Table 2 – Acreage of the Leased Land

1.3.2 Lease Term The term of the Lease (the “Lease Term”) shall be for a period of time the HRO demonstrates, and the Government agrees, is reasonably necessary for the Project and is advantageous to the Government, but in no event shall exceed fifty (50) years.

1.4 Proposal Submittals and Selection of OFFEROR Existing conditions, Project requirements and additional information are included in Sections 2.0 and 3.0. Offerors should use this information when developing their proposals. Specific proposal submittal and evaluation requirements are outlined in Sections 4.0 and 5.0. After evaluating all Offerors’ proposals, the Government will determine the proposal most advantageous to the Government and identify the HRO using the factors and sub-factors described in Sections 4.0 and 5.0. After identification of the HRO, the Government will enter into exclusive negotiations with the HRO to address all of the requirements set forth in Sections 3.0 and 6.0.

In the event the Government determines that exclusive negotiations are not progressing in a timely or productive manner, the Government may terminate exclusive negotiations with the HRO without any recourse or liability. The Government may, but is not obligated to, elect to enter into exclusive negotiations with the next Highest Ranked Offeror.

1.5 Small Business The EUL is not an acquisition of goods or services and as such, is not governed by Federal Acquisition Regulations (FAR). It is a real estate transaction granting temporary use of Air Force controlled property which employs a competitive process to identify a lessee as required by the Enabling Statute. While no evaluation credit will be provided for small business participation, small business concerns are encouraged to participate and compete in the Air Force Enhanced Use Lease Program competitive solicitation processes.

1.6 Project Documents The Air Force Real Property Agency (ARFPA) EUL Website (http://www.afcec.af.mil/eul/) contains template legal documents that reflect terms and conditions essential to the Government. Offerors are encouraged to familiarize themselves with those templates to gain an understanding of these essential terms and conditions. Absent Government agreement to the contrary during negotiations with the HRO, (i) such terms and conditions will be included in the final Project Documents, as defined below, and (ii) the format of the final Project Documents will be substantially similar to the template legal documents. The Project Documents necessary to implement the Project may include, but are not necessarily limited to, the following:

· Lease, including, but not limited to, the following plans and agreements:

· Land Plan;

· Organization Plan;

· Financial Pro Forma;

· Marketing and Leasing Plan;

· Property and Asset Management Plan;

· Risk Mitigation Plan;

· Construction management Plan;

· In-kind Consideration Plan;

· Survey of Exchange North;

· Site Plan

· Police and Fire Plan;

· Utilities Plan;

· Demolition Plan;

· Landscaping Plan;

· Development Permit from the city or county;

· UCC-1 Financing Statement(s) and other security agreements;

· Demolition Reserve Agreement; and

· Legal Opinion Letters (Government and HRO).

Section 2.0 EXISTING CONDITIONS 2.1 Existing Conditions To the best of the Government's Actual Knowledge (defined below), the Government is not aware of any existing conditions that would prevent development on the Leased Land, except as can be reasonably inferred from the information on the environmental conditions and constraints as disclosed or made available to the Offerors. The Government will provide Offerors with access to all relevant environmental documentation concerning the Leased Premises known, to the best of the Government’s Actual Knowledge, to be in the Government’s possession. Prior to executing a lease, the Government will complete an Environmental Baseline Survey (EBS) of the Leased Premises in accordance with Air Force Instruction (AFI) 32-7066, and deliver a copy of the EBS to the HRO. The EBS sets forth, in a manner consistent with relevant American Society for Testing and Materials (ASTM) due diligence standards, those environmental conditions and matters known, to the best of the Government’s Actual Knowledge, to be on and affecting the Leased Premises as determined from the records and analyses reflected therein, and existing as of the date stated in the EBS. As used in this RFQ, the term "Actual Knowledge" means the knowledge actually known to the installation's environmental office or that could be reasonably inferred to have been known to the installation's environmental office after commercially reasonable investigation.

The HRO shall be responsible, at its own expense, for preparing an environmental analysis to the satisfaction of the Government of the reasonably foreseeable environmental impacts associated with the Project, as required by the National Environmental Policy Act, regulations published by the Council on Environmental Quality at 40 C.F.R. Parts 1500 to 1508, and regulations published by the Government at 32 C.F.R. Part 989. The HRO must complete the environmental analysis prior to Lease execution.

The Leased Premises will be leased to the HRO “AS-IS/WHERE-IS” without any warranties, representations or guarantees, either expressed or implied, of any kind, nature or type whatsoever, from or on behalf of the Government. The Government is leasing the Leased Land subject to both recorded and unrecorded third party property interests in the Project. To the best of the Government's Actual Knowledge, a list of third party property interests in the Project is attached hereto as Appendix B.

2.2

LEASED PREMISES

2.2.1 Leased Land The Leased Land is generally shown on Appendix A. Refer to Table(s) 1 and 2 in Section 1.0 for summaries of the Existing Improvements and Leased Land.

The Leased Land consists of approximately 76 acres and is located along Dorchester Road on the perimeter of the Installation. The Leased Land is generally bounded on the west by Dorchester Road, on the north by the installation boundary, on the east by a utility corridor separating the site from a family housing area and on the south by the Base Commissary and BX. The Leased Land is the former site of military family housing and contains no buildings.

The description of the Leased Land set forth in 2.2.1 is only intended to be a general description of the Leased Land and the HRO shall, at its sole cost and expense, complete and deliver to the Government a boundary survey and metes and bounds legal description of the Leased Land certified to the Government and prepared in accordance with the requirements of the American Land Title Association and satisfactory to the Government. The legal description set forth in the approved boundary survey shall become Exhibit A to the Lease.

2.2.2 Existing Improvements The Leased Land is improved with the Existing Improvements described in Table 3 below. The table describes the Existing Improvements on the Leased Land, including, to the best of the Government's Actual Knowledge, approximate square feet, type of construction, year constructed, current tenants, date of last major renovations, and whether or not any facilities are designated as listed or eligible for listing in the National Register of Historic Places. The description of the Existing Improvements set forth in Table 3 is only intended to be a general description of the Existing Improvements and it shall be the responsibility of the HRO to perform any due diligence investigations necessary to ascertain a more accurate description of the Existing Improvements.

Table 3 – Existing Improvements

Renovation Historic

Exchange North consists of vacant land

2.2.3 Natural Infrastructure To the Government’s Actual Knowledge, there are no water rights, air credits, and timber or wetland bank credits. The description of the appurtenances and natural features set forth in 2.2.3 is only intended to be a general description and it shall be the responsibility of the HRO to perform any due diligence investigations necessary to ascertain a more accurate identification and description of the appurtenances and natural features associated with the Leased Land.

2.2.4 Transportation and Access The following is a general description of the permitted transportation means and ingress and egress to and from the Leased Premises:

The Leased Land contains more than 1,000 feet of frontage along Dorchester Road, a public street and major thoroughfare in the area. Access to the site could be provided via the Commissary Gate located on Dorchester Road at Lawson Drive, the southern boundary of the Leased Land. Although inactive most of the time, the Commissary Gate is activated by the base in times of emergency and is served by an existing stop light.

Heavy traffic along Dorchester Road is common according to the city, and the requirement for a traffic study is triggered for sites of five acres or more. Dorchester Road is classified as a state highway and any requirements would be coordinated with the South Carolina Department of Transportation. Traffic volume may require the addition of turn lanes and upgrades to existing infrastructure in accordance with the needs of the HRO and the City of North Charleston.

2.2.5 Infrastructure and Utilities The developer shall, at its own expense, acquire or otherwise provide the infrastructure and utilities (including but not limited to electricity, gas, water, sewer, storm water drainage, telecommunications, cable and transportation, and parking) needed or desired to develop and operate the Project throughout the Lease Term.

The following is a general description of the infrastructure and utility systems, (e.g., roads, water, sewer, electric, natural gas, and steam) associated with the Leased Premises. Utility systems as they currently exist may not be capable of supporting Project development. The description of the infrastructure and utility systems set forth in 2.2.5 is only intended to be a general description of such infrastructure and utility systems and it shall be the responsibility of the HRO, at its sole cost and expense, to construct, expand or otherwise upgrade or alter utility systems necessary to support Project development, and obtain any necessary community services. The Government does not make any representations or warranties of any kind, express or implied, relating to the condition, merchantability or fitness for a particular purpose of such infrastructure and utility systems, including, without limitation, their suitability for the HRO's development of the Leased Premises or the status of such infrastructure's and utility systems' maintenance or operation.

2.2.5.1 Electrical Power is supplied to Exchange North by Santee Cooper. The existing electric utility system is shown in Appendix A.

2.2.5.2 Natural Gas The Leased land has access to natural gas lines. South Carolina Electric & Gas is the natural gas provider in the area.

2.2.5.3 Steam/Chilled Water Not Applicable 2.2.5.4 Water Water is provided by Charleston Water Services. The existing water utility system is shown in Appendix A.

2.2.5.5 Sewer Sewer services are provided by North Charleston Sewer District. The existing wastewater utility system is shown in Appendix A.

2.2.5.6 Storm Drainage Storm drainage is provided through the City of Charleston Department of Public Service.

2.2.5.7 Telephone Not Applicable 2.2.5.8 Computer Network Lines Not Applicable 2.2.5.9 Cable TV Cable TV is available through Comcast.

2.2.5.10 Pavements

Paved streets from the prior military family housing development remain on the Leased Land.

2.2.6 Community Services The HRO shall (at its sole costs and expense) acquire or otherwise provide the services needed to maintain, operate, protect, and secure the Project throughout the term of the Lease (including, but not limited to, police, fire and emergency services, security, recycling, refuse disposal, and ground maintenance.

2.2.6.1 Police and Fire Protection Services JB CHS is currently the first responder for fire and medical emergencies.

2.2.6.2 Security Services Not applicable.

2.2.6.3 Refuse and Recycling The HRO will need to arrange for these services with private providers.

2.2.6.4 Snow and Ice Removal The HRO will need to arrange for these services with private providers.

2.2.6.5 Grounds Maintenance The HRO will need to arrange for these services with private providers.

2.2.6.6 Other Contracts Not applicable.

2.2.7 Development Considerations 2.2.7.1 Security The following is a general description of the security and force protection considerations associated with the Project.

The HRO shall (at its sole cost and expense) acquire or otherwise provide the services needed or desired to maintain, operate, protect and secure the Project throughout the term of the Lease (including, but not limited to, police, fire and emergency services, security, recycling, refuse disposal, and ground maintenance.

The Leased Land is located near the main gate on Dorchester Road and the Commissary Gate on Lawson Drive, and is easily severable by relocating the perimeter fence. The site would be accessible without entering the installation boundary after the relocation of the perimeter fences and during times of heightened threat conditions the parcel should not be affected. The HRO would be expected to move the fence line so the site would be situated outside of the installation perimeter. The movement of any fence lines must be coordinated with installation Security Forces and the base civil engineer and also adhere to AT/FP requirements.

2.2.7.2 Environmental Considerations An Environmental Baseline Survey (EBS) was completed in 2009, see Appendix C.

The EBS reports a small area of wetlands was found to be present on the Leased Land, in the vicinity of Golf Course Creek.

2.2.7.3 Historical, Cultural, and Archeological Resources To the Government’s Actual Knowledge, there are no cultural or archeological resources located upon the Leased Premises.

The EBS reports the National Park Service conducted a cultural resources survey of the Main Base housing areas (including the Exchange North area) in 1984. The National Park Service survey concluded that no archaeological sites or architectural structures eligible for listing in the National Register of Historic Places exist in the Main Base housing areas.

2.2.7.4 Regulatory and Environmental Planning Issues The Leased Premises is subject to all applicable federal and state environmental laws and regulations, including but not limited to, the National Environmental Policy Act, Executive Order 11990 Protection of Wetlands, and Executive Order 11988 Floodplain Protection. The HRO shall be responsible for ensuring compliance with all applicable federal and state environmental laws and regulations. The HRO shall also comply with the JB CHS’s Integrated Natural Resource Management Plan (INRMP) and JB CHS’s AFB Cultural Resource Management Plan (CRMP). The Government will provide the HRO a reasonable opportunity to review and comment on any proposed revisions to the INRMP or CRMP that may affect the Leased Land.

Development must comply with airfield clearance criteria established in Unified Facilities Criteria (“UFC”) 3-260-01, Airfield and Heliport Planning and Design, as well as to provisions outlined in Federal Aviation Regulations (“FAR”) Part 77, Objects Affecting Navigable Airspace. The criterion includes certain height and construction restrictions on site improvements located adjacent to airports.

2.2.7.5 Zoning It is the Government's intent that any EUL development be compatible with the adjacent zoning classifications and land uses as is commercially practicable. Plans inconsistent with adjacent zoning classifications and municipal master land use plans, including, but not limited to, reasonable transition and buffer zones, must be approved by the Government.

To the best of the Government's Actual Knowledge, the City of North Charleston’s zoning classification for the Leased Land is M-1, Light Industrial. The provisions of this district are intended to provide areas for commercial, warehousing, transportation, and certain light manufacturing activities within the city.

Additionally, there is an applicable zoning overlay titled “Dorchester Road Corridor II (Middle)” that contain additional requirements for buffers and screening, signage, building material requirements, and utilities and lighting.

After discussions with City officials, the Government believes the HRO(s) may be able to negotiate appropriate re-zoning to permit any reasonable development of the parcels.

2.2.7.6 Legislative Jurisdiction The legislative jurisdiction of the Leased Land is Concurrent Legislative Jurisdiction. The Government reserves the right to seek changes in the jurisdiction over the Leased Land. By proceeding with negotiations with the Government, the HRO(s) acknowledges and agrees that any such change in jurisdiction, including but not limited to retrocession of jurisdiction, may not be a basis for any claim by the HRO(s) against the Air Force pertaining to property taxes or other costs.

2.2.7.7 Municipality The Project is within the City of North Charleston municipal limits.

Section 3.0 PROJECT REQUIREMENTS This Section 3.0 addresses Project requirements. Although Offerors shall use this information when developing their proposals, not all items specified in this Section 3.0 are submittal requirements. Offerors should expect these Project requirements to be reflected in the Project Documents. Specific proposal submittal requirements and evaluation standards are outlined in Sections 4.0 and 5.0.

3.1

GOVERNMENT LEASE CONSIDERATION

The Government shall receive consideration in a total amount not less than the fair market value of the leasehold interest in the Leased Premises.

The HRO’s payment of consideration to the Government may be in cash and/or in-kind. Any percentage rent/revenue sharing Offerors propose shall be clearly distinguished from guaranteed base rent amounts. The preferred type of consideration for this project, should Offerors desire to propose it is cash rent. Should Offerors wish to propose in-kind consideration, Appendix H lists potential projects or category of projects acceptable to the Government. The Government reserves the right to request any of the forms of consideration authorized by the Enabling Statute.

During exclusive negotiations, the Government and the HRO will develop and agree to the processes by which the HRO will deliver deliver cash and/or in-kind consideration to the Government.

3.2

TRANSACTION EXPENSES

Transaction expenses may be required to reimburse government expenses due at lease signing.

3.3

LEASE TERM

See Section 1.3.2.

3.4

LEASE EXPIRATION

Upon the expiration or earlier termination of the Lease, the HRO shall, at no cost to the Government and to the reasonable satisfaction of the Government, demolish or remove all or a portion of, as designated by the Government, the Existing Improvements, EUL Improvements and/or other structures or improvements located on the Leased Land; abandon, vacate or remove utilities from the Leased Land; restore the Leased Land; and surrender and deliver exclusive possession of the Leased Premises to the Government. Alternatively, the Government, in its sole discretion, may elect to exercise either of the following two options:

· The parties may negotiate an extension of the Lease, provided that all of the following conditions are true: (i) the Project has been and is being properly maintained and managed in accordance with Project Documents; (ii) the HRO is not then in default of any of its obligations under the Project Documents; and (iii) the Government determines, in its sole discretion, that extension of the Lease is in the best interest of the Government; or

· The Government may, subject to applicable law, elect to retain all or a portion of the EUL Improvements located on the Leased Land, without compensation to the HRO, in lieu of requiring the demolition or removal of all or a portion of such improvements.

· The Government may, subject to applicable law, elect to dispose of the Leased Premises, offering the successful Offeror the first right to purchase the Leased Premises for fair market value.

3.5

TAXES

The HRO shall be solely responsible for the payment of any property taxes, personal property taxes and assessments, including special assessments, utility rents, any charges imposed in lieu of ad valorem taxes, and all other taxes or charges levied against the Project (including the costs of contesting such taxes), or assessments levied against the HRO’s leasehold interest or against its activities or operations on the Leased Premises.

3.6

COMMUNITY SUPPORT FACILITIES AND SERVICES

The Project shall comply with the requirements of 10 USC 2667(b) (6). If the proposed development activities on the Leased Premises will, as determined by the Government, provide merchandise or services in direct competition with “covered entities” (as such term is defined in 10 USC 2667), the HRO must either provide covered entities with (i) the right to operate a community support facility or provide community support services, or (ii) equitable compensation in lieu of the operation of such a facility or the provision of such services.

3.7

INSURANCE REQUIREMENTS

The HRO shall ensure that insurance policies are obtained and maintained for the Project in accordance with the requirements set forth in Appendix D.

3.8

PAYMENT AND PERFORMANCE BONDS

Prior to the commencement of any phase of construction, the HRO shall deliver to the Government payment and performance bonds in amounts and subject to conditions deemed acceptable to the Government. At a minimum, all payment and performance bonds must: (i) be issued by a Qualified Surety; (ii) be in a form satisfactory to the Government and run in favor of the Government as a Dual Obligee; (iii) be in the amount of the total cost of construction per phase of development and/or construction; and (iv) guarantee the performance of the construction. The HRO may propose the use of alternative forms of surety instruments, such as irrevocable letters of credit, to secure its payment and performance obligations for construction of commercial portions of the Project. Any proposed alternative to payment and performance bonds shall only be acceptable if the Government determines it provides better protections of the Government’s interests than payment and performance bonds.

3.9

LAND USE RESTRICTIONS

The following uses are prohibited on the Leased Premises due to security and operational incompatibility:

· Any use that adversely affects the health, safety, morals, welfare, morale, or discipline of the Armed Forces.

· Any ultra-hazardous activities involving the storage, treatment, transportation, disposal or manufacture of hazardous materials, hazardous substances or hazardous wastes.

· Any Residential use the Government determines would adversely affect or otherwise conflict with the Military Housing Privatization Initiative existing or planned at JB CHS.

· Any use that is incompatible with environmental, operational or land use constraints.

· Any JB CHS specific restrictions.

· Gambling or gaming use.

3.10

ACCESSIBILITY

Common areas such as walks, streets, parking and play areas, and common entrances to facilities must be designed and built to be accessible. “Accessible” means the common areas can be approached, entered, and used by physically handicapped people and comply with the accessibility standards set forth in Section 4 of the Americans with Disabilities Act Accessibility Guidelines (ADAAG) for Buildings and Facilities, the relevant provisions of the Uniform Federal Accessibility Standards (UFAS) dealing with accessibility, as well as any other applicable laws and regulations pertaining to accessibility

3.11

MUNICIPAL SERVICES TO BE PROVIDED BY THE GOVERNMENT

The Government may provide fire, law enforcement services, and other emergency services to facilities located within the JB CHS boundaries, unless the Project is severable from the remainder of the JB CHS and a state or local government is available to provide such services. These costs shall be reflected in the operating budget. The HRO will reimburse the Government for all actual costs incurred for these services. The Government's current annual estimate for the aforementioned services is $XXX. The Government will invoice for the actual costs when requesting reimbursement. The Government requires payment to be made by electronic funds transfer.

3.12

GOVERNMENT SUPPLIED UTILITIES

The Government will not provide utilities or utility services to the Project. The HRO shall be solely responsible for obtaining said utilities and utility services and for all costs and expenses incurred therefore.

3.13

DEVELOPMENT

An Offeror’s ability to properly organize, market, finance, design, construct and operate the proposed Project is critical to the long-term Project viability. The HRO’s final plans, as described in Section 4.15 (and in this Section 3.0), shall be incorporated into the Lease. These plans shall, among other things, describe the anticipated Project business arrangements with the Government, and govern the development activities.

Prior to execution of the Lease, for additional consideration, the Government may consider entering into a temporary access agreement which will grant the HRO sufficient access over the Leased Land to permit development planning by the HRO, and facilitate access for the due diligence and/or infrastructure development activities associated with the Project, subject to terms and conditions required by the Government.

3.14

FINANCING AT LEASE EXECUTION

The Government requires that all debt financing be in place for a simultaneous financial closing and Lease execution.

3.15

LESSEE EQUITY CONTRIBUTION

The lessee equity contribution shall be explicitly delineated in the financial documents required in Section 4.

3.16

CROSS COLLATERALIZATION AND CROSS DEFAULT

This Project is expected to “stand alone;” thus the HRO will be prohibited from cross collateralization and cross default of the Project with any other assets. Moreover, the HRO will be prohibited from assigning, pledging, hypothecating or otherwise transferring its interest in the net cash flows or ownership of the Project in part, or in its entirety, without prior written approval of the Government, which will not be unreasonably withheld.

3.17

PROJECT FINANCIAL VIABILITY AND SUSTAINABILITY

The Offeror must disclose its proposed fee structure, including related party fees. The Offeror must have a clear approach to: 1) balancing initial development costs and long-term asset preservation; 2) ensuring a fair and reasonable financial return while minimizing Project risk; and 3) ensuring that the Government receives consideration in an amount not less than the fair market value of the leasehold interest, to be paid in priority to debt service, any and all related party fees, and any investment returns to equity contributors.

Offerors must have a quantifiable approach to capital repair and replacement over the entire Lease Term, and to ensuring that all structures and improvements located on the Leased Premises are preserved and that end-user service levels are maintained in accordance with commercially reasonable standards over the entire Lease Term.

3.18

DEMOLITION RESERVE ACCOUNT

The HRO shall establish and maintain a Demolition Reserve Account to fund the demolition of all facilities, Existing Improvements, EUL Improvements on the Leased Land and to restore the Leased Land to the reasonable satisfaction of the Government upon the expiration of the Lease and any extensions thereof.

3.19

RELATED PARTY FEES

Offerors shall disclose all construction management, development management, property management, and any other fees that are accrued or paid to the Offeror or related parties during the life of this Project.

3.20

ANTI-TERRORISM/FORCE PROTECTION AND DAVIS BACON ACT

If the Offeror proposes to provide construction as the in-kind consideration, that construction of any Government building(s) or structures must comply with Anti-terrorism/Force Protection and Davis Bacon Act requirements in addition to other Governmental construction requirements.

3.21

CONSTRUCTION CONSULTANT

Upon the completion of exclusive negotiations, the HRO shall retain, at no cost to the Government, an independent construction consultant (“Construction Consultant”) to provide certain professional consulting services, including, but not limited to, construction supervision and quality assurance, for the benefit of the Government. The Construction Consultant shall be approved in advance by the Government. The Construction Consultant shall, among other things, conduct reviews of construction plans and specifications, conduct basic and engineering site reviews, independently verify all processes, procedures, cover up inspections and material tests that are carried out under the HRO’s quality control program, review and approve as-built plans, and certify to the Government that each phase of the Project has been completed in accordance with the requirements of the final Project Documents and applicable Federal, State, City and County codes, standards and regulations. The Construction Consultant shall provide the Government with written evidence that it maintains malpractice insurance coverage for the benefit of the Government under terms and in an amount reasonably satisfactory to the Government.

3.22

CODES STANDARDS AND REGULATIONS

All development activities shall be in accordance with City of North Charleston building codes, standards, regulations and applicable federal laws and regulations, as they may be amended from time to time, that would apply to similar development activities outside JB CHS and within the city or county in which JB CHS is situated. The Government desires that local authorities provide approvals on issues involving local building and use requirements. If local authorities are unable or unwilling to provide such services, such services shall be provided by the Construction Consultant.

3.23

PERMITS

The HRO shall, at its sole expense, obtain all required permits and approvals that would apply to similar development activities outside JB CHS and within the city or county in which JB CHS is situated and pay all required fees in connection with its development of the Project.

3.24

CERTIFICATE OF COMPLIANCE

The HRO will provide the Government a Certificate of Compliance once the HRO has completed construction of the Project in compliance with the final design and construction plans previously approved by the City of North Charleston and consented to by the Government (“Final Plans”) to the Government’s satisfaction.

3.25

PROFESSIONAL CERTIFICATION

All drawings, specifications and engineering calculations shall be certified by a licensed architect or professional engineer currently licensed by the State of South Carolina. Any facilities received as in-kind consideration must be LEED certified.

3.26

CONSTRUCTION CONFERENCES

The Government may require HRO participation in periodic conferences, both before and after construction commencement. Topics for discussion may include, among other topics, the following:

· Phasing of demolition and construction

· Provision of and location of field offices and fenced material and/or storage yards

· Utility cutovers and extensions, including storm water drainage

· Location for Project signage

· Coordination and approval of haul routes

· Leased Premises security and access

· Construction schedules

· Landscaping plans

· Required Easements, if any

3.27

RELOCATION PLAN

Not Applicable. Prior to Lease execution, JB CHS will provide space elsewhere on the installation for the Civil Air Patrol which currently occupies Building 2035.

3.28

ACCESS AND FENCING

The HRO is responsible for ensuring the Leased Premises can be accessed under elevated security levels consistent with Government security requirements. The HRO is responsible for any construction of fencing and roadways needed for the HRO to implement this requirement. The Government will have no responsibility for any costs associated with implementation of alternative access or relocation of fencing.

The Leased Land is located near the main gate on Dorchester Road and the Commissary Gate on Lawson Drive, and is easily severable by relocating the perimeter fence. The site would be accessible without entering the installation boundary after the relocation of the perimeter fences and during times of heightened threat conditions the parcel should not be affected. The HRO would be expected to move the fence line so the site would be situated outside of the installation perimeter. The movement of any fence lines must be coordinated with installation Security Forces and the base civil engineer and also adhere to AT/FP requirements.

If the proposed use requires access from the secure portion of the installation, the HRO would need to enter into an agreement with JB CHS to define its proposed development and use of the installation. Individuals with access to the secure installation must have adequate security credentials, and the HRO must provide security protection measures to prevent unauthorized entry into the installation.

3.29

HISTORIC PRESERVATION PLAN

To the best of the Government’s Actual Knowledge, there are no historical, cultural or archeological resources on the Exchange North site.

3.30

DEMOLITION PLAN

The Offeror shall establish and implement a Demolition Plan for any Existing Improvements to be demolished in connection with Project development. The Demolition Plan shall clearly establish the approach to demolition of existing facilities and infrastructure.

3.31

DISPOSAL SITE

All debris must be hauled to approved off-base disposal sites. The Offeror must submit all proposed off-base disposal sites and haul routes to the Government for approval prior to the commencement of any demolition activities.

3.32

PROPERTY OPERATIONS

The HRO must maintain the infrastructure, EUL Improvements and grounds in a commercially reasonable manner and, at a minimum, in a manner comparable to surrounding Government facilities throughout the Lease Term.

3.33

RESTRICTIONS ON FOREIGN PARTICIPATION

Unless a waiver is granted by the Secretary of Defense, should the government of a terrorist country have a significant interest in an Offeror (or a subsidiary of the Offeror), then such Offeror or subsidiary of Offeror: (a) shall not be selected for the Project; and (b) shall not participate in connection with the Project. This restriction is in accordance with Government policies and 10 U.S.C. § 2327.

3.34

ENVIRONMENTAL COMPLIANCE

Offerors shall be responsible for complying with all applicable laws and regulations, including environmental laws and regulations, compliance orders, and interagency agreements between the Government and environmental regulatory agencies with respect to the Leased Premises. Offerors shall also comply with any environmentally-related land use restrictions deemed necessary by the Government to protect human health and the environment. Offerors shall be responsible for the payment of any fines and assessments by regulators resulting from the failure of the Offerors, contractors and guests to comply with applicable law and regulations. Offerors shall either pay upfront or reimburse the Government for any civil or criminal fines or penalties levied against the Government for any environmental, safety, and occupational health infractions caused by activities of Offerors and/or parties associated with Offerors. Additionally, Offerors shall pay upfront or reimburse the Government for the cost of any environmental restoration undertaken by the Government to respond to releases caused by the activities of Offerors and/or any parties associated with Offerors. The Government shall have the discretion on whether to require Offerors to provide upfront payment or reimbursement after the necessary actions or payments by the Government have been taken. Offerors shall notify the Government if any parties associated with the Offerors’ proposal receive a fine or enforcement action from any local, state, or federal environmental agency. If fines or enforcement actions are received, Offerors shall provide copies of official notices, descriptions of corrective actions taken, and proof of payment, waiver, or withdrawal of fine and satisfactory compliance. Offerors shall not communicate with the enforcement agency without prior consultation with and consent of the Government if the enforcement action includes the Government as a named respondent party to the enforcement action.

The Generic Site Development Lease sets out terms and conditions regarding the HRO’s environmental liabilities and responsibilities. Offerors must review the Generic Site Development Lease prior to submitting a proposal. The Generic Site Development Lease is available for downloading at http://www.afcec.af.mil/eul/eul/information/index.asp.

3.34.1 Environmental Due Diligence The Government will provide Offerors with access to all relevant environmental documentation concerning the Leased Premises known, to the best of the Government’s Actual Knowledge, to be in the Government’s possession. The Government makes no representation or warranty, whether express or implied, of the accuracy or completeness of information contained in such environmental documentation. The HRO shall be responsible for conducting its own independent environmental due diligence prior to entering into a lease of the Leased Premises.

3.34.2 Asbestos Containing Material (ACM)

Offerors are warned that the Leased Premises may contain Existing Improvements, such as buildings, facilities, equipment, and pipelines, above and below the ground that may contain ACM. Offerors are responsible for inquiring as to whether the Government has records of the location, type, quantity, and characteristics of asbestos in any leased improvements prior to renovation, maintenance, repairs, or construction that may disturb suspect materials. If the Government does not have adequate records to substantiate the status or presence of ACM, Offerors will be required to obtain the necessary confirmatory samples and obtain analysis by a State of South Carolina certified laboratory for the analysis of bulk materials for asbestos. The Government shall not be responsible for any handling, removal or containment of asbestos or ACM (to include any ACM found on subsurface utility lines on the Leased Premises), or to the extent consistent with applicable law, for any liability related thereto. Offerors will perform any and all asbestos work in accordance with all applicable laws and regulations. Offeror personnel will be trained and certified as required in accordance with the State of South Carolina’s asbestos regulations and policies. Upon selection, the HRO will be responsible for removal and disposal of all ACM on the Leased Premises and will incorporate an asbestos disposal plan in the plans for demolition of the improvements to be submitted to the Government. The asbestos disposal plan will identify the proposed disposal site for the asbestos. Removal and disposal of ACM must be carried out in compliance with all applicable federal, state, and local laws, rules, regulations, and standards.

3.34.3 Lead-Based Paint (LBP)/Lead-Based Paint Hazards (LBPH)

3.34.3.1 Inquiry

Offerors are responsible for inquiring as to whether the Government has records of the location of LBP in any leased structures or soil in the Leased Premises prior to undertaking any work that might disturb or uncover such LBP.