HomeMy WebLinkAboutR21481 - Award - REASCO - Financial Real Estate AnalysisContract No. R2148 -C,-
PALM DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: AUTHORIZE AWARD OF A FINANCIAL REAL ESTATE ANALYSIS
CONSULTING CONTRACT
SUBMITTED BY: DENNIS M. COLEMAN, REDEVELOPMENT FINANCE MANAGER
CONSULTANT:
DATE:
CONTENTS:
Recommendation:
REASCO
P. O. BOX 2809
PALM DESERT,
J U LY 8, 2004
CA 92261-2809
CONSULTANT AGREEMENT
By Minute Motion, that the Agency Board authorize the award of a contract
to Real Estate Analysis Services Co. (REASCO) for Fiscal Year 2004-2005,
not to exceed $50,000.
Executive Summarv:
This agenda item is to procure the services of REASCO for financial real estate analysis.
This consultant provides staff with analysis services which assist staff in making decisions
for redevelopment and housing projects.
Discussion:
The Agency Board awarded a consulting contract to provide financial real estate analysis
to REASCO on July 22, 1999. The Agency Board awarded this contract based upon a
Request for Proposals (RFP) process that was conducted in June1999 to provide such
services.
REASCO was awarded the contract based upon the firm's experience, quality of work, and
their fee structure. The firm submitted a proposal that had regressive pricing based upon
the hourly usage per month. REASCO pricing was substantially lower than the other firms
from the Southern California area.
This year REASCO has proposed charging an increase of $7 per hour from last year. The
proposed rate structure is $125 per hour for the first 25 hours in a month; $115 per hour
for the next 15 hours per month; $107 per hour for the next 10 hours per month; and $97
G:IRDMDennis ColemanlDATA1WPIREPORTS1070804.REASCO.wpd
Staff Report
Award of a Financial Real Estate Analysis Consulting Contract
July 8, 2004
Page 2
per hour for all hours in excess of 50 hours per month. REASCO's proposal is still
substantially lower than the competition.
The firm that was REASCO's closest competitor in 1999 now charges $160 per hour for
a Principal; $130 for a Senior Associate; $110 per hour for an Associate; and $90 an hour
for a Senior Analyst.
REASCO's blended rate for billings to date is $110.00 per hour. Further, as a local firm,
REASCO has the ability to rapidly react to the City's needs.
As a practice, the Agency generally uses a consulting firm selected through an RFP
process for three years. Staff is recommending that we don't conduct an RFP for these
services and continue using REASCO for these services. Staff is recommending that the
Agency Board award a contract to REASCO for Fiscal Year 2004-2005, not -to -exceed
$50,000
Submitted by: Department Head:
knis Coleman -. avid Yrigo
Redevelopment Finance Manager Director of development
DMC:mh
Approval:
6
Ju . cCarthy, ACM/ velopment Paul S. Gibson, Director of Finance
Carlos L. Ortega, ecutive Director
G:1RDA1Dennis CofemanlDATA1WPIREPORTS1070804.REASCO.wpd
contract NO. R21481
IREASCO1
REAL ESTATE ANALYSIS SERVICES CO.
POST OFFICE BOX 2809, PALM DESERT, CALIFORNIA 92261-2809
TEL: (760) 340-1429; FAX: (760) 340-2041;
EMAIL: LRW REASCO@AOL.COM
June 18, 2004
Mr. Justin McCarthy, ACM
Redevelopment
CITY OF PALM DESERT
73-510 Fred Waring Drive
Palm Desert, CA 92260
SUBJECT: CONSULTING PROPOSAL
Dear Mr. McCarthy,
Coov to: Mr. Dennis M. Coleman
Thank you for asking my firm to submit this Proposal to provide consulting services to the
Palm Desert Redevelopment Agency (the "Agency"). I feel that my firm is exceedingly
qualified to provide a large range of consulting services to the Agency, including, but not
limited to: (1). Real estate financial analysis; (2). Financial feasibility studies of commercial
projects and (3). Preparing reports pursuant to Section 33433 of the California Health and
Safety Code. We have been successfully providing consulting services such as these, since
1983, to a diverse group of clients in Southern California, including government entities,
entrepreneurs, fund providers, real estate developers and investors.
My firm is an unincorporated single proprietorship and I perform all the functions. We are
located in south Palm Desert, ten minutes away from City Hall, so we can respond very
quickly to the Agency's requirements for face-to-face meetings and to deliver and discuss
completed reports and analyses. We are completely computerized so we can correspond
with our clients by email, including down -loading and uploading proformas and completed
reports and analyses.
Since 1994, we have devoted most of our time to performing a wide variety of consulting
services to the Agency, such as analyzing and creating financial models of developers'
proformas and preparing comprehensive reports (with exhibits) on our conclusions.
We have also reviewed the business points of proposed agreements and prepared our
recommendations for revising some terms to better protect the Agency's interests.
CONSULTING FOR PALM DESERT/"PROPOSAL 2004"/LETTER 6-18-04 23-Jun-04 3:40 PM
REAL ESTATE ANALYSIS SERVICES COMPANY
- PAGE 2 - Contract NO. R21481
June 18, 2004
LETTER TO: Mr. Justin McCarthv
SUBJECT: CONSULTING PROPOSAL
Some of our most recent consultina assianments for the Aaencv have been:
Reviewing the financial proformas for PDCC, LLC's proposal to renovate the Palm
Desert Country Club golf course property and to improve 95 lots to sell to a home
builder; and preparing a financial model of the proformas to determine the economic
viability of the project.
2. Preparing a financial analysis of the RPM project to develop an apartment project with
an affordable component in the City, and recommending how the Agency could provide
financial assistance to the project.
3. Preparing a 33433 report, as required by the Health and Safety Code, for the proposed
property swap with Desert Wells 237, LLC.
4. Reviewing the Columbia Center proforma and preparing a financial model of the project
including the projected financial returns to the Developer and to the City.
5. Reviewing the proposed Sares-Regis multi -family housing development proformas and
preparing a financial model of the project.
6. Reviewing proposals from several companies desiring to sell energy conservation
equipment and services to the City, and preparing my recommendations as to the
viability of, the proposals.
In addition to the consulting services we have provided to the Agency, the
following is a partial list of clients (and projects) for whom we have provided
consulting services:
(1). We prepared an analysis of the positive economic impact of the McCallum Theater on
the cities of the Coachella Valley for Mr. Ted Giatis, Executive Director/CEO of the McCallum
Theater; (2). We prepared a financial feasibility study and financial analysis of the proposed
conversion of the Autry Hotel in Palm Springs to the Givenchy Spa Resort for Ms Rose Narva,
the Developer/Proprietor;
CONSULTING FOR PALM DESERT/"PROPOSAL 2004'YLETTER 6-18-04 23-Jun-04 3:40 PM
REAL ESTATE ANALYSIS SERVICES COMPANY
Contract No. R21481
- PAGE 3-
June 18, 2004
LETTER TO: Mr. Justin McCarthv
SUBJECT: CONSULTING PROPOSAL
Other client list. continued:
(3). We prepared a financial feasibility study and financial analysis of the proposed Date Palm
Freeway Oasis project, a multiple -use commercial project to be developed on a 35 acre site
in Cathedral City, for Mr. Clemente Troncoso, President of the development company; 4). We
prepared a financial feasibility study and financial analysis of the proposed hotel and golf
course project, to be developed on land adjacent to the Fantasy Springs Casino, for the
developers, Indian Wells Resort Investments; and (5). We prepared a financial analysis of a
proposed LNG plant development project for Sunline Transit Agency.
Our monthly fee for providing the decribed consulting services to the Agency, on an
as -needed basis, will be the following: (1). for the first 25 hours of consulting services
provided by my firm to the Agency in a month, the fee will be calculated at $125.00 for each
billable hour; (2). for the next 15 hours, the rate will be $115.00; (3). for the next 10 hours,
the rate will be $107.00; (4). for each subsequent hour billed in the same month, the rate will
be $97.00. For a 50 billing -hour month, the average hourly rate would be $118.41.
At the beginning of each month, we will provide the Agency with an invoice of the amount due
for consulting services we provided to the Agency in the previous month; the invoice will be
accompanied by a complete description of the consulting hours.
There will be no charge for computer time or travel expenses except that for auto travel
required outside the Coachella Valley to complete a project assigned by the Agency, the
mileage charge will be $0.35 per mile. There will be no other billable expenses.
Once again, thank you for asking my firm to submit this proposal. I strongly believe that my
firm is eminently qualified to provide the consulting services you require, in a most timely
manner and at a reasonable cost.
Sincerely,
Leonard R. Wolk
Leonard R. Wolk, President
Real Estate Analysis Services Company (REASCO)
CONS
ULTING FOR PALM DESERT/"PROPOSAL 2004"/LETTER 6-18-04 23-Jun-04 3:40 PM
Contract No. R21481
W
W
�I
4
a F-
m m
O x
LL W
J
LU
V
U)
LU
ui
LL
O
U
UY
w
LL
Z
O
in
FE —
Oct
_
O
Q
m
a
-
o
v
Cl)
W
W
O
O O
CD
00
O
O
0
c
o
N
�
Cl)CD
Q LL
'-
�- —O K?
0
r
L
a
�
W
0
0 0 0
0
C
d
v
0
6s�r�
,n
vs,v
w
O
=
O Q.
0
\
E
a
0
0 0 0
0
�v
0
C:t
0
w
EW.
NO
LL
LL
N
m 0O0
PPS
0
0
d
�3
ca
�
N
<a
�
N
V�
Cto
J
+�+
Cm
o
0 0 0
o
\
Q
Q
v
Iq
c
C y
LL°CTr�6sNo"
,0
t
6s
�
u,
'Ge-
tm
w
i
W
W
O
O
W
O
O
O
d
0
C:
>
0d
v
cc
0
rn
m 0
F,
0
a
�
��
O
a.
44
0
.3
i
C
o
CO
W
O
O
O O
O
O�
\
o
a. w,
-
- Z
m
a
ao
ao
O o
o
.-
`-
ego �
D
LL
�
0
N V
ZO
L
7
U1
LO
LO
O O
LO
m
CV
r
l r LO
�
+�+
O
a)
°
N
v —
i
w
aca :�
a
�.
.Qi
J
C
U
m
a
O pTp
N
O.
0
0
LO
> c
M
a)
�.
C4
as
Cz
am
>
N
>
a
¢
CL
CV
C6
�f