District of Columbia Office of the Deputy Mayor for Planning and Economic Development
1350 Pennsylvania Avenue NW Suite 317 Washington, DC 20004
(202) 727-6365
(202) 727-6703 Fax
www.dcbiz.dc.gov
Adrian M. Fenty Mayor
David Jannarone Director of Development, Office of the Deputy Mayor for Planning & Economic Development
NOTICE OF FUNDING AVAILABILITY
GREAT STREETS Neighborhood Retail Tax Increment Finance
Introduction
The District of Columbia Office of the Deputy Mayor for Planning and Economic Development ("ODMPED" or "Deputy Mayor's Office") requests applications for development assistance for the development of mixed use and/or retail development projects within specific sub-districts along the city's Great Streets corridors. On July 10, 2007, the DC Council approved the "Great Streets Neighborhood Retail Priority Areas Approval Resolution of 2007" (R17-0257) and authorized up to $95 million of maximum aggregate principal amounts of bonds that may be issued to support projects within the following "Retail Priority Areas" (RPA):
(A) Martin Luther King, Jr. Avenue SE / South Capitol Street: $10 million;
(B) H Street NE: $25 million;
(C) 7th Street/Georgia Avenue NW: $25 million;
(D) Petworth: $10 million;
(E) Minnesota-Benning: $15 million; and
(F) Pennsylvania Avenue SE: $10 million.
A map of each RPA is provided in the Attachments.
Tax Increment Financing (TIF) is a tool in which the government pledges a portion of the anticipated increase in real property and sales tax revenue from a new development project and/or area as repayment for bonds used in financing the project. TIF promotes revitalization by financing capital improvements to infrastructure, utilities, and other hard costs that will serve and enhance the new private development while benefiting the public good.
Through this Notice of Funding Availability (NOFA), ODMPED is soliciting applications for TIF as gap funding to projects that will help the District fulfill its goals to:
- Anchor and stabilize neighborhood commercial districts on the Great Streets corridors by generating new and/or improving existing retail space which attract local and non-local, unique and anchoring retailers that provide higher quality and more diverse neighborhood goods and services;
- Strategically and catalytically leverage public assistance within specific targeted sections of the 22 ½ miles of Great Streets corridors;
- Begin to plug the retail spending leakage from District neighborhoods to surrounding jurisdictions; and
- Transform under-invested corridors into lively mixed use commercial districts with a variety of uses.
Proposals for funding may be submitted to ODMPED for a specific funding amount. However, ODMPED reserves the right to verify the "true need" and to determine the specific amount of reduction or increase to be offered, if an application is selected, in order to maximize the public benefit and to achieve greater neighborhood and corridor impact.
In order to submit a fully competitive proposal, all application filing requirements must be closely followed and all information requested in the application must be provided. Applications must be received at ODMPED on or before 3:00 pm Eastern Standard Time, Friday, April 18, 2008. Applications must be delivered to:
GREAT STREETS TIF APPLICATION
Attn: Derrick Lanardo Woody
Coordinator – Great Streets Initiative
Office of the Deputy Mayor for Planning & Economic Development
1350 Pennsylvania Avenue NW
Suite 317
Washington, DC 20004
ODMPED will mark the time and date of receipt of Applications submitted in response to this NOFA.
No Applications will be accepted after the filing deadline.
Application and Project Considerations
Eligible Applicants. The Applicant must meet the following minimum requirements in order to apply to this NOFA:
A. Applicant must have site control either through fee simple ownership of the site or through an executed contract with the property owner(s).
B. Applicant must be planning to construct new or rehabilitated retail space as a stand alone building or as part of a mixed use development project.
C. The Applicant's project must contain not less than 10,000 square feet of retail total and not less than 5,000 square feet should be set aside for an anchor retail use per the description below.
D. Applicant's project must be within an RPA and must have direct frontage onto the Great Streets corridor within that RPA.
E. Applicant's project and request for public financing assistance must comply with all applicable laws.
F. As retail TIF funds are intended to fill a funding gap for a project, Applicant must demonstrate a financial shortfall without which the project would not be completed.
G. The Applicant's project must generate enough new real property and sales taxes to cover the debt service of the amount of TIF requested.
In accordance with the Resolution, the latest date at which bonds may be issued with respect to any of the RPA's is December 31, 2012. However, ODMPED is specifically interested in working now with Applicants with development projects that are slated to break ground within 24 months of issuance of this NOFA and whose construction will be completed within 30 months of groundbreaking. Applicants with development proposals that are more advanced through the site acquisition, development approvals and financing process are strongly encouraged. Others may apply also, but preference will be given to those who are "most ready" to proceed sooner. Applicant must have documented site control.
Development projects must at a minimum contain neighborhood retail that is "unique" to that specific neighborhood market and anchoring regional and/or national retail at a minimum and are strongly encouraged to include other uses such as office, affordable housing or for profit leasable or ownership space above. Development projects which maximize zoning allowances, either through matter of right or through the Planned Unit Development (PUD) processes, are strongly encouraged. Projects including adaptive re-use of an existing structure that will contain retail are also eligible.
"Uniqueness" of the retail within a specific RPA will be determined by the relationship of the proposed and intended retail in the Applicant's proposed project to the percentage of existing supply of similar goods and services provided in that RPA. Sit down restaurants and cafes may be considered as "unique" retail for the purposes of this solicitation as most of the RPA's are devoid of such establishments. Fast food restaurants, liquor stores, hair and beauty salons, nails salons, and check cashing facilities are not eligible.
"Anchoring" retail will be evaluated by the size, type, product line and credit worthiness of the proposed retail tenant. Throughout the District, grocery stores are considered "anchoring" uses and are encouraged by this solicitation. The District is interested in employing retail amenities to improve the quality of life for residents, particularly in terms of health and wellness. As such, the District seeks to increase access to fresh produce and healthy food within convenient walking distance for residents. Since many neighborhoods are underserved in this regard, this initiative presents a significant opportunity for additional grocery retail development on a small or large scale.
Applicants are also strongly encouraged to also seek other anchors in the General Merchandise, Apparel, Furniture and Other (GAFO) retail category including:
- General merchandise stores
- Clothing and clothing accessories stores
- Furniture and home furnishings stores
- Electronics and appliances stores
- Sporting goods, hobby, book and music stores
- Office supplies, stationery and gift stores
Applicants are strongly advised to familiarize themselves with the neighborhood sub-market where their project will be located.
Collaborations: The District is changing dramatically and there are concerns that existing and long term RPA merchants may not be able to stay in their current locations as these areas improve. Collaborations or partnerships between the Applicant and existing property and business owners located on blocks adjacent to the proposed project that will bring about broader RPA improvements and investments are strongly encouraged. This collaboration must be formally executed through a contract or other binding affidavit with the consent of the property owner and participation of any existing business owner, as evidenced by submission of the executed document with the NOFA response. The District is specifically interested in improving unattractive storefronts, removing vacancies, and in realizing dramatic improvements to interior and exterior merchandising layouts within existing storefronts around the Applicant's development project.
Eligible Costs: Financing may be used for retail development costs defined in the "Retail Incentive Act of 2004" (A15-0435; approved September 8, 2004) including, but not limited to:
- Retail interior and exterior construction gap financing
- Utilities upgrades related to retail servicing needs
- Structured, shared parking
- Permanent equipment and fixtures
Financing may not be used for:
- Rental assistance to tenants
- Operating and maintenance expenses
- Non permanent or fixed equipment and fixtures
Applicants are allowed to submit more than one Application if they have control of more than one development site within one or more RPAs.
Development Plan Application
In addition to the information requested in Section 4, applications shall include an Executive Summary that briefly discusses the proposed project and detailed Exhibits that address the following:
A. Applicant Name and Contact Information – Provide full contact information for the Property Owner and/or Development Team in Exhibit A in accordance with Section 4 below. (If collaboration with adjacent, existing property and business owners is proposed, please include this and all other information requested below about their properties as well. The Applicant should highlight this information separately from that of the primary Project.)
B. Retail Tenant Name(s) and Contact Information – Provide full contact information for the Authorized Agent(s) of the Retail Tenant. Provide a copy of Annual Reports and/or other Certified Financial Statements as well as all retail and commercial tenant leases or Letters of Intent as Exhibit B. Preferences will be given to Applicants with documents that are binding and executed.
C. Legal and Street Address of Property or Properties – Evidence of Site Control – In Exhibit C, include Street Address and Square and Lot Numbers for all Properties included in the Application. Include evidence of site control in the form of a current deed demonstrating fee simple ownership,executed lease option (lease term must be equal or greater than the proposed financing term), or an executed contract of sale. Provide photographic images of properties including aerial images of the area with the Applicant's properties clearly outlined and exterior elevation and interior images of any existing structures included within the Application.
D. Land Area of Property – Include a survey of the property or properties as Exhibit D.
E. Proposed Redevelopment Project and Timeline – Provide a detailed description of the development project scope, program, and schedule including design drawings that are sufficient in detail to be evaluated by the Selection Panel as Exhibit E. Additionally, the applicant must demonstrate that the proposed development is matter of right, or that approval from the Zoning Commission or Board of Zoning Adjustment has been obtained or is likely. Include a timeline from selection through construction to completion of the project.
F. Development Costs and Sources and Uses of Funding – Provide as Exhibit F the detailed development proformas in hardcopy as well as electronically; include the specific sources and uses of funding for the entire project with the retail component specifically highlighted. The Applicant should include Letter of Intent for equity and debt commitments in the project, including New Market and Low-Income Housing Tax Credits. The Applicant should include documentation validating that the proposed source of funds is committed for this project and timing for when those funds will be contributed. Applicants should assume that District funds will be put into the deal only after the applicant has a significant amount of money "at-risk". The Applicant should document a clear need for project funds.
G. Tax Analysis – Provide an Estimate of Real Property Tax and Sales Tax Revenues to be generated by the project and include as Exhibit G.
H. Requested TIF Amount – Indicate the amount of TIF assistance being requested and how the revenues would be used within your development project in Exhibit H. The Applicant's project must generate enough new real property and sales taxes to cover the debt service for the amount of TIF requested.
I. Certificates of Occupancy and Clean Hands Certificates – Where possible, provide a copy of any Certificates of Occupancy for any new and existing retail and commercial tenants and Clean Hands Certificates for property owners which will be included within any development project as Exhibit I.
J. Certified Business Enterprise Participation – In Exhibit J and in accordance with Section 4.2 below, the applicant will be required to execute an agreement with the District's Department of Small and Local Business Development (DSLBD) for inclusion of local businesses within your development project as development, equity and contracting partners. Preference will be given to applicants who include significant amounts of LSDBE participation as part of their submission.
K. First Source Agreement – In Exhibit K and in accordance with Section 4.2 below, provide an agreement or letter of intent to enter into an agreement with the District's Department of Employment Services (DOES) to provide job hiring preference to District residents. Applicant shall also submit a detailed Apprenticeship and community engagement program in accordance with Section 4.2.
L. Certificate of Good Standing – The Applicant must demonstrate good standing by providing a Certificate of Good Standing from the Department of Consumer and Regulatory Affairs (DCRA) as Exhibit L and in accordance with Section 4.3 below.
M. Creditworthiness – In Exhibit M, Applicant should submit evidence of satisfactory credit or Dun & Bradstreet report. No member of the development team acting in the role of sponsor, developer, guarantor, or owner may have or had chronic past due accounts, substantial liens or judgments, foreclosures or bankruptcies within the past five years; nor have defaulted on any obligation to the District of Columbia within the past 10 years.
N. Non-Discrimination and Equal Employment Opportunity – Provide as Exhibit N the Applicant's Non-Discrimination Certification; the Applicant's Equal Employment Policy Statement; and Applicant's Assurance of Compliance with Equal Employment Opportunities Requirements.
O. Tax Certification Affidavit – In Exhibit O, provide the Applicant's Tax Certification Affidavit issued by the District Department of Finance and Revenue, Office of Tax and Revenue. Be sure to include the same for any collaborative partners.
P. Council and Community Letters of Support for the Project – Include in Exhibit P, letters of support or endorsement from the impacted Council member, Advisory Neighborhood Commission, Main Streets or business association, and/or neighborhood or civic association for the development project and proposed retail and any collaborations with adjacent property owners.
Q. Community and Economic Benefits Summary – In Exhibit Q, provide a detailed summary of the full benefits estimated to be generated by the Project. Benefits can include number of net new construction and permanent full-time equivalent jobs, real property and sales taxes over a 30 year horizon, income taxes, and others.
Applicant Information
4.1 The Applicant must submit the following information, in standard letter-sized format. Applicants are asked to keep text concise. Include the following information:
A. Team Members. The Applicant shall identify the following key team members of the development team: master developer (firm or joint venture partners), Local Small Disadvantaged Business Enterprise ("LSDBE") equity and development participants as provided in Section 4.2, master plan architect, financing team (proposed construction and permanent lenders, major investors, and other key consultants, if any related to the financing plan), and legal counsel. For each team member, Applicant shall identify:
- Name, address, telephone number, and fax number of each team member, including the identity of each principal, partner, or entity that composes such team member, and such team member's roles or titles within the entity comprising the Applicant;
- Name, address, telephone number, fax number, and e-mail address of the representative authorized to act on behalf of the Applicant, who will be available to respond to questions or requests for additional information;
- Identification of any affiliation or other relationship between any of the members of the Applicant and any development company, parent company, or subsidiary;
- Identification of any personal or professional relationship among or between any members of the Applicant and any person working for, appointed to a position in, or elected to an office of the District or any entity for which there may be a conflict of interest or the appearance of a conflict. The District, in its sole discretion, reserves the right to determine a conflict of interest or the appearance thereof;
- Summary of experience of Applicant or its team members in partnering with community groups and institutions during the planning and redevelopment of a project, including a description of the project, the community partnerships and the actions taken to include the community's input.
B. Qualifications and Experience. Applicant shall identify:
1. Five (5) relevant projects, with which Applicant and/or its team members have had primary involvement that demonstrate success in large-scale, urban, mixed-use, mixed-income development projects and public-private development partnerships. Applicant should include projects completed in Washington, D.C. Applicant should include the name and address of each project, a detailed description of the project, the names and telephone numbers of persons familiar with the development who will respond to any inquiries from the District regarding the team member's capabilities and role in each project.
2. Projects, with which Applicant or its team members have had primary involvement, that involve CBE/Local Small Disadvantage Business Enterprise ("LSDBE") joint ventures, partnerships, and/or CBE/LSDBE equity participation, including details of the levels of participation and deal structure.
3. An organization chart and a summary of qualifications of team member's senior-level staff who will be working on this project, including a description of their roles and relevant experience.
4. Status of the Applicant organization (whether a corporation, a non-profit or charitable institution, a partnership, a limited liability corporation, a business association, or a joint venture) indicating under which laws it is organized and operating, and a brief history of the organization and its principals.
5. A copy of any written agreement or document creating any entity responding to this NOFA. The principals, partners, or joint-venture partners who are part of the Applicant team must be eligible to transact business with the District of Columbia and in the District of Columbia.
6. References for the Applicant and its team members, including names, addresses and telephone numbers, and a letter authorizing each reference to respond to inquiries regarding the design, financing, and development of prior projects.
7. Audited financial statements for the previous three years for the developer and equity providers.
8. Such other information Applicant believes will assist the District in evaluating the capabilities of the Applicant, the design architect, and any other team member who will be participating in the development. The District may request additional information from the authorized representatives, if deemed necessary, to facilitate the consideration of the Applicant's submissions.
4.2 Certified Business Enterprise (CBE) Participation and First Source Hiring.
The Applicant shall include the following:
4.2.1 A description of LSDBE equity and development participation in the project sufficient to demonstrate Applicant's firm commitment to meet or exceed a 20% LSDBE equity participation and 20% LSDBE development participation requirement. The Applicant must submit with its offer a Letter of Intent, Memorandum of Understanding or other binding agreement with the 20% LSDBE equity and development partner(s) that at a minimum:
a. identifies the LSDBE equity and development partner(s);
b. states the percentage of equity and development participation in detail of each LSDBE partner;
c. describes the role and scope of work in detail of each LSDBE partner; and
d. includes anti-dilution language regarding equity and development participation for the benefit of the LSDBE partner(s) and to be applied at all stages of the project.
Any Application that fails to contain a Letter of Intent, Memorandum of Understanding or other binding agreement with the 20% LSDBE equity and development partner(s) will be deemed a non-responsive Application. Selected Applicants will be required to sign a Certified Business Enterprise Utilization and Participation Agreement ("CBE Agreement") with the DC Department of Small and Local Business Development ("DSLBD") that outlines the specific equity and development participation requirements and the specific efforts the selected Applicant must make to fulfill these requirements. Prior to executing the CBE Agreement, the Applicant must demonstrate to DSLBD that it satisfies the following general principles related to equity and development participation:
a. Minimum LSDBE Participation Requirements. Applicant(s) acknowledge and agree that businesses certified as local, small and disadvantaged business enterprises ("LSDBEs"), shall receive no less than twenty percent (20%) in equity participation and no less than twenty percent (20%) in development participation in the Project, in accordance with Section 2349a of the Small, Local and Disadvantaged Business Enterprise Development and Assistance Act, D.C. Official Code § 2-218.49a.;
b. Pari Passu Returns for LSDBE Equity Partner(s). Applicant(s) agree that all LSDBE equity partners shall receive a return on investment in the Project that is pari passu with all other sources of sponsor developer equity;
c. Preservation of LSDBE Financial Interest. The LSDBE partner(s)' equity interests shall not be diluted over the course of the Project, including for failure to contribute additional capital;
d. LSDBE Risk Commensurate With Equity Position. No LSDBE firm shall be expected to bear financial or execution requirements that are out of proportion with the LSDBE firm's equity position in Applicant and/or the Project;
e. Management Control and Approval Rights. LSDBE partner(s) should have management control and approval rights in line with their equity position(s), and certain major decisions should require consent of one or more LSDBE partners or require a supermajority vote;
f. Inclusion and Recognition. The Applicant should consistently represent and include LSDBE firms as team members (e.g., through joint naming, advertising, branding, etc.).
4.2.2 A description of CBE contracting participation in the project sufficient to demonstrate Applicant's commitment to meet or exceed a 40% CBE contracting and procurement requirement. The selected Applicant will be required to sign a Certified Business Enterprise Utilization and Participation Agreement with the D.C. Department of Small and Local Business Development that outlines the specific contracting requirements and the specific efforts the selected Applicant must make to fulfill these requirements.
4.2.3 Preference will be given to Applicants that include local, neighborhood based businesses as part of the Application. Evidence of the inclusion of such businesses shall be by written confirmation which shall include the scope and details of the involvement by the business in the project if the Applicant is selected.
4.2.4 Preference will be given to offers that include copies of binding Letters of Intent (LOI) between the Developer, LSDBE equity partner, LSDBE development partner, LSDBE contractors, and LSDBE lead architect.
4.2.5 Preference will be given to Applicants who maximize LSDBE participation on the project as committed to and evidenced in the Application.
4.2.6 Preference will be given to Applications who have a partnership with local, community based organizations from the impacted ward.
4.2.7 A description of what specific efforts will be made to recruit District of Columbia residents for newly created jobs. The selected Applicant will be required to sign a First Source Hiring Agreement with the D.C. Department of Employment Services.
4.2.8 Preference will be given to Applicants that submit a detailed apprenticeship program that facilitates placing existing neighborhood residents from the Ward of the Applicant's project into employment opportunities for the project. Bidders are encouraged to explain in detail how existing residents will be included in the program and describe how this goal will be accomplished. The commitment and strategy to develop and implement a local apprenticeship program shall be in accordance under D.C. Official Code §§ 32-1401 et seq. For more information on the District of Columbia's Department of Employment Services (DOES) apprenticeship program, please visit the agency's website http://www.does.dc.gov or contact the agency's Office of Apprenticeship Information and Training.
4.3 Good standing
At time of application, the Applicant must demonstrate good standing by providing a Certificate of Good Standing from the Department of Consumer and Regulatory Affairs (DCRA). Further, and without exception, the applicant and members of the development team may not:
a. be delinquent on city obligations, including, but not limited to, income taxes, real estate taxes and water and sewer charges; lease payments or defaulted grant(s) from the District or other loan obligations. (If it is determined during any stage of the review, underwriting or funding process, that the applicant or any business affiliate has any outstanding indebtedness to the District, the applicant shall be removed from further consideration in this funding round);
b. in the past five years, have been a party to chronic housing code violations, excessive tenant complaints, or substantial judgments;
c. be barred by the District or affiliated federal agencies; nor,
d. be suspended, voluntarily or involuntarily excluded from participation in any federal or District Programs.
5 Submission Requirements and Selection Procedures
5. 1 Application Submission
5.1.1 An Applicant must submit five (5) printed and bound copies of its Application and five electronic copies of its full application and electronic spreadsheets (editable as Microsoft Excel documents) to:
GREAT STREETS TIF APPLICATION
Attn: Derrick Lanardo Woody Coordinator – Great Streets Initiative Office of the Deputy Mayor for Planning & Economic Development 1350 Pennsylvania Avenue NW Suite 317 Washington, DC 20004
by 3:00 PM on Friday, April 18, 2008
5.1.2 The District reserves the right to reject any offer it deems incomplete or unresponsive to the submission requirements, to amend this NOFA or to reject all offers and re-issue a Solicitation at a later date at its sole discretion.
5.1.3 After review, the District may request submission of additional information from some or all of the Applicants, within the District's sole discretion.
5.1.4 Applicant or Development Team members may participate in submissions for more than one Application. If an Applicant wishes to change the composition of the proposed development team or development program at any time in the selection process after it has submitted its Application to the District, the Applicant must notify the District in writing. The District reserves the right to evaluate the proposed change to the development team and determine whether the proposed change satisfies the goals of this NOFA. All information requested about team members required by this NOFA must be provided to the District. The District will require similar notification and approval rights of any change to the development team following award.
5. 2 Selection Process and Evaluation Team
5.2.1 The ODMPED will determine in its sole discretion whether each offer received in response to this NOFA is Responsive. For any Application that is considered to be nonresponsive, the Applicant will be notified in writing within ten business days after the submission deadline. The decision of ODMPED in this regard is final and will be explained to the Applicant upon request.
5.2.2 A community meeting may be conducted, if needed, during which the Applicant will present their Applications to the public and the public may provide feedback to the Selection Panel for its consideration.
5.2.3 A Selection Panel will be established to review and evaluate the Applications. The Selection Panel will consist of at least five (5) members from each of the following agencies:
- Office of the Deputy Mayor for Planning & Economic Development,
- Office of Planning,
- Department of Small and Local Business Development,
- Washington, DC Economic Partnership,
- Office of the Chief Financial Officer.
In addition, the Selection Panel may consult with DMPED consultants for technical assistance.
5.2.4 Evaluation Criteria
The Selection Panel will evaluate responses to this NOFA for:
A. Financial feasibility of overall project and financial strength of the developer and equity providers;
B. Commitment and diversity of retail tenants;
C. Demonstration of financial need to complete the project as proposed;
D. Feasibility of project to generate real property and sales taxes to pay off requested bond proceeds;
E. CBE / LSDBE equity and development participation;
F. Scope, scale and inclusiveness of adjacent owners;
G. Economic and community impact;
H. Consistency with the Comprehensive Plan and any approved or pending approvals of Small Area Plans;
I. Applicant team capacity, track record and qualifications;
J. Readiness to proceed; and
K. Support of the impact Council members, ANCs and business / neighborhood groups.
Preference will be given to those who exceed expectations of this NOFA.
5.2.5.1 Project Review. Required design review meetings will be scheduled after Selection between the ODMPED, Office of Planning and the selected Applicant(s) and its consultants. In addition, the selected Applicant(s) must arrange and participate in at least one community forum held in the vicinity of the project site prior to Applicant's preparations of final building permit drawings.
5.2.5.2 Community Engagement. During the duration of the redevelopment, the Applicant will also be expected to participate in periodic meetings with the community to provide updates on the progress of the development, to solicit input and to respond to questions from the community.
5.2.6 Inquiries. Questions about or related to this NOFA should be directed in writing only via fax or email to Derrick Lanardo Woody, derrick.woody@dc.gov or 202.727.6703.
ATTACHMENTS
RETAIL PRIORITY AREAS (RPA) MAPS
(A) Martin Luther King, Jr. Avenue SE / South Capitol Street: $10 million;
Martin Luther King, Jr. Avenue SE / South Capitol Street (continued)
(B) H Street NE: $25 million
(C) 7th Street/Georgia Avenue NW: $25 million
(D) Petworth: $10 million
(E) Minnesota-Benning: $15 million
(F) Pennsylvania Avenue SE: $10 million
