Client: State of California, Department of General Services, Real Estate Services Division
After conducting the market assessment that identified the highest and best uses and scale of supportable development for the site, Gruen Gruen + Associates (GG+A) assisted with the preparation of a solicitation package for the development and long-term ground-leasing of a portion of the California Institution for Men in Chino, California, and assisted the State of California Department of General Services Real Estate Services Division with the evaluation of the offers/proposers for the revenue-generating enhancement of the present use of the property.
GG+A evaluated the offers/proposers and recommended the selection of one proposer with which to negotiate the ground lease based on that proposer being most likely to provide the State with the highest and most certain return for the property and have the capacity to develop it to preserve and enhance the long-term value of the property. To complete the evaluation and selection, GG+A reviewed and summarized the proposals and compared them in a matrix report format covering criteria and information such as (a) Financial capability to undertake the entitlement, development, leasing and operation of the project; (b) Qualifications to obtain entitlements for a value-maximizing development; (c) Leases terms, including price per acre and square foot of land and per square foot of building space; (d) Amounts and terms of deposits and other fees; (e) Intended uses; (f) Schedule of performance; (g) Conformity with local planning criteria; (h) Other terms and conditions; and (i) Other issues, including identifiable risks.
GG+A also completed a market analysis for industrial uses and an assessment of the relative advantages and market opportunities associated with the site and prepared a report that put in context the proposers plans for development and pro-formas, including an assessment of reasonableness of development, lease-up, operating, and return assumptions and projections included in the offers. GG+A identified additional information needed to evaluate the offers, select a proposer with which to negotiate, and set the stage for the negotiation with the selected proposer.
In addition to conferring with the State representatives throughout the process, GG+A prepared a report that summarized the evaluation and identified the proposal/proposer, which will most likely to provide the State of California with the highest and most certain return. The report recommending the selection identified the factors, including economic and risk considerations that led to our identification of the recommended proposal/proposer. The report included consideration of the proposed lease terms and return to the State and the identifiable risks associated with the lease terms and potential return.
GG+A then assisted with the preparation and negotiation of the development agreement, ground lease and other transaction documents for the development of 3.1 million square feet of retail and industrial space with the selected developer, Majestic Realty.