The URL can be used to link to this page

Home My WebLink About5.h. Reconsideration of Scope of Services Agreement Submitted by Chase Brackett for Motel Feasibility StudyMEMO TO: Port Authority Chairperson Dunn Commissioners Anderson, Carroll, Edwards, McMenomy, Sinnwell, Wippermann FROM: John Miller, Economic Development Coordinator DATE: February 25, 1993 RE: Review of Chase Brackett Scope of Services Agreement BACKGROUND - On February 2 the Port Authority approved a scope of services agreement submitted by Chase Brackett Company to complete a motel market feasibility study for a location at C.R. 42 and T.H. 3. On February 18 I met with the Chase Brackett people, representatives from Americinn and Holiday Express, and with Rick Berens. We discussed the scope of services agreement that the Port Authority had approved on February 2 and the . information Chase Brackett would need -from each of them. - In addition, we discussed adding a second site to the study, the land immediately east of the armory. Berens has expressed an interest in a motel at this site and several board members have had - continued interest in the location. It would also provide aernative-to the Lund and Thorsen site if the price of that land escalated. In addition, "optional tasks were discussed which wou d -Tuve Chase Brackett review proposals from then developers - regarding financial feasibility: _. V� o The cost of studying the armory site in the c $2;100 to $2,950. The _ optional tasks would increase costs om $100 to $5,000. - ANALYSIS - At the goal setting retreat there was discussion about the importance of a thorough analysis of all projects considered by the Port Authority. Expanding the scope of services agreement will: • Give analysis of a second site. • Provide the Port Authority with the option of more detailed financial analysis on an as needed basis. In these regards the proposal has merit. Page 2 OPTIONS 1 Do not approve the expanded scope of services agreement. Stick with the original agreement approved February 2. Approve only a maximum additional cost of $2,950 to study the marketability 2. )y of the second site (armory location). This would: Ca. Provide market information for Rick Berens. b. Provide an option to the Lund -Thorsen land. C. Answer the questions of some Port Authority members about the viability of the site for commercial development. 3. Approve the additional cost of $2,950 and authorize the executive director to use the resources of Chase Brackett -to complete the "optional tasks" on an as___ needed basis. FINAL COMMENT The action of the Port Authority to spend money to have this work done has drawn praise from both ' the Holiday Express and Americinn people. In brief, they have stated that it shows them the Port Authority is serious about pursuing the development. In addition, the February 18 meeting provided an opportunity for all of the interested - developers to meet each other. They could each see that someone else was interested in the project. __ This should buoy their interest in Rosemount even more. a I ��- CHASE • BRACKETT COMPANY REAL E 6 T A T E A P P R A i• 9 R 6 C O N S U L T A N T S PHONE 8 3 5- 5 6 0 0 RI FAX 835.2076 February 23, 1993 Mr. John Miller, Economic Development Coordinator City of Rosemount 2875 145th Street West P.O. Box 510 Rosemount, Minnesota 55068-5510 RE: Proposed Limited Service Hotel Rosemount, Minnesota Dear John: As discussed, outlined you will find a revised Scope of Services for the proposed hotel. We believe the meeting went well and several issues were resolved. Primarily that of the concept of the proposed project Although a wide range of prototypes were mentioned (everything from Motel Six to a full service property with a full complement of meeting and banquet space), we believe that all of the individuals involved agree upon the concept of a limited service hotel with ancillary meeting space and recreational facilities. It is also our understanding that each of the participants agree on the need for a restaurant within range of the proposed project. Furthermore, it is our understanding that this may involve additional meetings and consulting services due to the specific needs of each of the developers. Accordingly, we have refined our Scope of Services to include more than one site, additional analysis for each prototype involving both operating and financial analysis, as well as cost analysis and overall feasibility analysis. The attached proposal is similar to that of the original, with changes in the Scope of Services, Fees and Timing. We continue to look forward to working with you. Sincerely, CHASE-BRACKETT COMPANY Janene McBride,; ` Appraiser A. D. Kline, MAI, SRA Senior Vice President PENTAGON PARK TOWER, 4940 VIKING DRIVE • MINNEAPOLIS. MINNESOTA 55435 CONTRACT FOR PROFESSIONAL SERVICES PAGE 2 7. In the event the Employer desires to cancel this contract, written notice thereof must be delivered to the Appraiser, and it is agreed that the Appraiser shall receive compensation from the Employer for all expenses and all services rendered prior to.cancellation at the following rates: Albin D. Kline, MAI, SRA, $100.00 per hour; Janene McBride, $75.00 per hour; Research Assistants, $30.00 per hour; and office staff at $18.00 per hour. CITY OF ROSEMOUNT Employer CHASE-BRACKETT Accepted: A. D. Kline, MAI, SRA Senior Vice President (-- McBride 'Appraiser Date Date 1z3 r' Date MARKET STUDY AND FINANCIAL ANALYSIS PROPOSAL of Proposed Limited Service Hotel Rosemount, Minnesota - Prepared for Mr. John Miller Economic Development Coordinator City -of Rosemount -- 2875 145th Street West Rosemount, Minnesota CHASE • BRACKETT COMPANY 0 February 23, 1993 Mr. John Miller, Economic Development Coordinator City of Rosemount 2875 145th Street West P.O. Box 510 Rosemount, Minnesota 55068-5510 RE: Proposed Limited Service Hotel Rosemount, Minnesota Dear Mr. Miller: REAL ESTATE APPRAISIER 6 C O N S U L TA N T S PH ONE 8 3 5. 56 00 FAX 835-20." 6 Please find enclosed our proposal for valuation services on the above referenced property. This proposal includes an overview of Chase -Brackett Company and our Qualifications as well. Itis broken down into the following sections: I Overview of Chase Brackett Company, Qualifications of Appraisers and Scope of Services- to be provided regarding the engagement. 2. Professional Fees and Timing 3. Contract for Professional Services We appreciate the opportunity to make this proposal to you and look forward to discussing this in greater detail with you. As stated in our proposal, we propose to provide these consulting services to you for a fee of $4,000 to $4,500 for the original proposal, plus $2,100 to $2,950 for the additional work and general consulting on an "as needed" basis. Please advise us of any questions which you may have regarding the proposal. ti Best Regards, CHASE-BRACKETT COMPANY Janene McBride Appraiser /. 1 6�L ( A. D. Kline, MAI, SRA Senior Vice President PENTAGON PARK TOWER. 4940 VIKING DRIVE • M I NNEAPOLI S. MINNESOTA 55435 TABLE OF CONTENTS 1. Overview of Chase -Brackett Company 2. Professional Qualifications 3. Scope of Services 4. Professional Fees and Timing 5. Contract for Professional Services ti OVERVIEW OF CHASE-BRACKETT The CHASE-BRACKETT COMPANY is in its 33rd year of appraising residential and all types of commercial property in the Twin City Metropolitan area. In the beginning, most of our business was mortgage appraising for the First Banks. Land acquisition for the Interstate Highway System was in its early stages so appraising for ,the Minnesota State Highway Department was an important part of our client base too. Relocation appraising for clients such as Honeywell and 3M also became a part of our client base in the early years, and has now evolved into the third party transfer companies. Today, CHASE-BRACKETT COMPANY has a diverse clientele, which includes: 1) Local and outstate mortgage companies, savings and loan associations, and commercial banks. -- - 2) Numerous municipal and government related authorities (i.e. Minneapolis - - Community Development Agency (MCDA), Hennepin Parks System, Minneapolis Park Board, various City and County Housing Authorities). 3) Resolution Trust Corporation (RTC). 4) Attorneys representing clients. 5) Insurance Companies. 6) Relocation Companies. 7) Prospective sellers, buyers, and other entities dealing with significant real property decisions. As noted above, homeowners, municipalities, and attorneys are all part of our clientele which has required our testifying in district court and in City and County condemnation hearings. Both commercial and residential reports are prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) and in accordance with the regulations developed by the Lender's, Federal Regulatory Agency as required by FIRREA. These reports are all created on our new network of computers. Our appraisers each keyboard their own reports to maximize accuracy and completeness. We pride ourselves in our new system which ultimately will be adapted to electronic mail. Our sources of information include, but are not limited to: 1) Company files (i.e. Appraisal Data Network member) 2) Residential and Commercial/Industrial Multiple Listing Services 3) City and County Assessors 4) BOMA and NAIOP 5) Market participants (i.e. Management agents, brokers, buyers and sellers) Bill Chase and Russ Brackett initiated the company in 1959. Bill retired from the business in the fall of 1989 after serving as president for 30 years. Currently, the staff includes nine appraisers. The four principals are Russ Brackett, President; Al Kline, Senior Vice President; Steve Gergen, Vice President; and Paul Grace, Secretary - Treasurer. Five of the staff appraisers have the SRA designation, which denotes excellence in appraisal expertise by the Appraisal Institute, while Al Kline holds the MAI, and SRA designations. The locale we cover includes the entire seven county metro area. Appraisals are assigned to an appraiser who is well versed with the particular location of the property, and has the expertise to complete the assignment. Appraising is not an exact science. However, the reason CHASM-BRACKETT COMPANY has been in business over 30 years is its philosophy that quality, accuracy and timeliness are of utmost importance to the client. We have in place, a quality control division headed by Al Kline to ensure a "State of the Art" product that effectively meets the clients needs. PROFESSIONAL QUALIFICATIONS ALBIN D. KLINE, MAI, SRA Senior Vice President Education Graduated from the University of Minnesota in June 1977 with a Bachelor of Science Degree (B.S.B.) - School of Business Administration. Appraising Residential Property - Course 101 - Society of Real Estate Appraisers (SREA), 1978; Applied Appraisal Techniques - American Institute of Real Estate Appraisers (AIREA), 1979, Single Family Residential Appraisal - Course VIII (AIREA), 1980; Principles of Income Property Appraising, Course 102 (SREA), 1980; Residential Housing Inspection, University of Minnesota, 1981; Narrative Report Writing Seminar (SREA), 1982; Energy Conservation Seminar: Application in New and Existing Homes, University of Minnesota, 1982; Building Construction - McGraw-Hill Continuing Education, 1983; Computer Applications in Appraising (SREA), 1984; Adjusting for Financial Differences (SREA), 1985; Uniform Residential Appraisal Seminar (AIREA), 1987, Capitalization Theory and Techniques, Part A and B, 1987 and 1988 (AIREA); Professional Practice and the Society of Real Estate, 1989 (SREA); Discounted Cash Flow Analysis, 1990 _(AIREA). Applied Income Property Valuation Course 202 (SREA), 1990. Appraising Troubled Properties, 1991 (Appraisal Institute); Comprehensive Appraisal Workshop, 1992 (Appraisal Institute). Appraisal Experience Since 1983 as Vice President of CHASE-BRACKETT COMPANY, Real Estate Appraisers and Consultants; 1981-1983 - Staff Appraiser, City of Brooklyn Park, Minnesota; 1978-1981 - Staff Appraiser, CHASE-BRACKETT COMPANY, 1977-1978 - Staff Appraiser, Minnesota Federal Savings and Loan. Appraisals For Aid Insurance Company, Bank of St. Louis, Burlington Northern Railroad, Cargill Inc., Chicago & Northwestern Railroad, Citicorp Mortgage, Citizens State Bank, Coldwell Banker, Community State Bank, Corporate Transfer Service, Dunn and Bradstreet, Dupont Company, Eastman Kodak, Edina Financial Services, Employee Transfer Corp., Equitable Relocation Services, Executrans, FBS Mortgage Corp., Glen Condo's, Holiday Inns, Investors Mortgage Corp., Josten's Inc., Knutson Mortgage Corp., Maenner Relocation Co., Marquette Bank, North American Life Insurance, Norwest Mortgage, Norwest Trust, Prime Mortgage Corp., Prudential Relocation Services, Relocation Realty Service, Relocation Resources, Republic Bank of Dallas, Sperry Co., Transamerica Relocation, Transequity, TCF Mortgage Corp., Worldwide Relocation Services, LTD. PROFESSIONAL QUALIFICATIONS ALBIN D. KLINE, MAI, SRA PAGE 2 Government and Municipalities Bloomington Housing Authority, FNMA (Federal National Mortgage Association), Hennepin Parks, Minneapolis Community Development Agency (MCDA), Minneapolis Park Board, Richfield Housing Authority, Scott County Housing Authority, Attorneys representing clients, prospective sellers, buyers and others. Types of Appraisals - Single family and multi -family residences, townhouses, condominiums, commercial and industrial properties, vacant land, and special purpose properties. Qualified expert witness in City and County condemnation actions. Professional Memberships Appraisal Institute, MAI (Member Appraisal Institute), Senior Residential Appraiser (SRA); Certified State Assessor; Affiliate member of the Minneapolis Area Board of Realtors; the St. Paul Board of Realtors; Dakota County Board of Realtors; the Anoka County Board of Realtors; Minneapolis Builders Association (MBA). State of Minnesota Appraisers License ##4000923 (Certified Federal General). PROFESSIONAL QUALIFICATIONS JANENE L. McBRIDE Senior Commercial Appraiser Education Graduated from St. Cloud State University in 1982 with a Bachelors Degree in Economics. Completed coursework for a Masters Degree from University of Wisconsin -Stout, 1983. Appraisal Experience Since 1992 as an appraiser for CHASE-BRACKETT COMPANY, Real Estate Appraisers and Consultants; 1989-1991 appraiser for Marquette Partners (formerly Robert Boblett Associates); 1987-1989 Senior Consultant, Management Consulting Department - Real Estate Division, KPMG Peat Marwick; 1983-1987 Associate, Management Advisory Services Department - Real Estate and Leisure Time Industry Divisions, Laventhol & Horwath. Appraisals For Briggs & Morgan, Citi -Corp, Days Inn, Development Plus - Fargo, Dorsey & Whitney, Dotronix, Eastlund, Solstad & Hutchinson, First Bank, First Bank Eden Prairie; First Bank Properties; First National Bank of Hudson; First Trust Co.; First Trust - St. Paul; Gehl Company; Gordon McDonald Corporation; Group Health, Inc.; Heitman Advisory; Integrated Lodging Services; InvestEast; Manufacturer's Hanover; Massachusetts Mutual Life; Mdewakanton Sioux Community; Mellon Bank; Michelin Tire Corporation; Michigan National Corporation; Midwest Saving Assoc.; National City Bank; Norwest Bank; Openheimer, Wolff, & Donnelly; Our Own Hardware; Port Authority of St. Paul; Provident Mutual; Prudential; Resolution Trust Corporation; St. Francis Regional Medical; Trizec; Twin City Federal; and, Welsh Companies. Consulting assignments for Days Inn, Embassy Suites, Holiday Inns Inc., Hilton, Hyatt, Quality Inns, Ramada Inns, Super 8, Vista Hotels and individual developers. Government and Municipalities Consulting Assignments for the State of Minnesota, State of California, State of South Dakota, City of New Orleans, and local city and county offices. Types of Appraisals Commercial and industrial properties including: Single and Multi -Tenant Office Buildings; Regional, Community and Neighborhood Shopping Centers; Hotels, Motels and Resorts; Office - Warehouse and High Tech Buildings; Apartments; and Condominiums. Special purpose consulting assignments including Race Tracks, Theme Parks, and Super Regional Shopping Centers, among others. PROFESSIONAL QUALIFICATIONS JANENE L. McBRIDE PAGE 2 Professional Memberships American Institute of Real Estate Appraisers Candidate. State of Minnesota Appraiser License X14001889 Certified Federal General. Proposed Scope of Services Original Expanded Optional Tasks Comments Proposal Scope (per additional property) Phase I Site Analysis $500 $500 Separate Analysis for each site, resulting in a recommendation as to the better of the two sites. Area Review 500 This would be the same for both projects Primary Research 500 The same work would be for both Supply & Demand The same work would be included for both Market Share 500-750 500-750 Two separate penetration analysis would be done Alternative Sizes 100-200 Identify rates and occupancies for hotels ranging in size between 40 and 100 units Impact of a ✓✓ Evaluate the impact of a Restaurant restaurant on motel occupancies. Draft Letter ✓✓ Internal document for preliminary discussions Summary Letter (Included) Letter summarizing our conclusions (for general use) Phase II Financial Projections 500 500 Our initial proposal included financial projections for a generic hotel Draft Letter ✓✓ You may wish to receive a draft letter outlining our assumptions and the differences between the various financials Revised Financials ✓✓ Based on additional input from the potential hotel developer's we will revise our financial accordingly Project Cost Review ✓✓ Review the individual developer's project cost estimates and provide to you a realistic estimate of the total project cost Additional Financial ✓✓ Should your choose we will Analysis provide additional financial analysis involving the "financial feasibility" of each of the projects Meeting ✓✓ Meet with you detailing the results of the project cost on the financial feasibility of the property(ies) Final Letter (Included) Prepare a letter outlining our findings for you to be used in - your decision making process Phase III Final Report $1,000 500 Prepare one report summarizing our findings on each hotel Separate Reports 500* f Prepare a separate report for each property which we have mutually agreed upon Total r$4,000-4,500 $2,100-2,950 $1001-" 71 ✓✓ Optional tasks would be billed on an hourly basis as follows: A. D. Kline, MAI, SRA $100, per hour; Janene McBride, $75.00 per hour, Research Assistants, $30.00 per hour; and office staff at $18.00 per hour. It should also be noted that these Tasks are not necessarily recommendedhowever may be needed do to the potential exposure of the Port Authority. PROFESSIONAL FEES AND TIMING Our professional fee for the market study and financial analysis is estimated to be $4,000 to $4,500 for the original work plus $2,100 to $2,950 for each additional property. Additional consulting would be provided on an hourly basis. We will be reimbursed for any out-of-pocket expenses incurred in the performance of the assignment, such as mileage, long distance phone calls, computer costs, photocopying and report reproduction. Three (3) copies of the final report will be delivered upon completion of the assignment. If more copies are needed, they will be available at an additional charge. Our receipt of an accepted copy of this proposal constitutes our authorization to proceed. CONTRACT FOR PROFESSIONAL SERVICES 1. The Employment Agreement is binding upon Chase -Brackett Company, hereinafter referred to as the "Consultant," and the City of Rosemount, hereinafter referred to as the "Employer." 2. The appraiser agrees to provide the Employer with 3 (three) copies of a narrative report on a proposed limited service hotel located in the Rosemount, Minnesota area. 3. It is understood that the report will be used to estimate the prospective occupancy, average rate and result cash flow available for debt service and income tax to attract a potential developer. It is understood and agreed that the report, or any information contained within, shall not be relied upon or utilized in any of the matters pertaining to any syndication nor any State or Federal Securities and Exchange Commission registrations. 4 After your authorization for completion, said Phase I conclusion will be verbally communicated within three to four (3-4) weeks after signing this contract. The full narrative report is to be delivered within two (2) weeks. Unavoidable delays may extend the delivery date. _ 5. In return for service, the Employer agrees to pay Appraiser a fee not to exceed a range as outlined, plus hard costs, including mileage, production costs, photo costs, etc., payable upon delivery of the final report. 6. All outstanding fees and expenses are to be paid on the date the report is delivered. It is further understood and agreed that if any portion of the compensation or costs due to the Appraiser become delinquent, the Employer will pay interest thereon at the rate of 1.5 % per month on the unpaid balance and will pay all collection costs thereof, including reasonable attorney's fees and expenses, court costs, et cetera. CONTRACT FOR PROFESSIONAL SERVICES PAGE 2 7. In the event the Employer desires to cancel this contract, written notice thereof must be delivered to the Appraiser, and it is agreed that the Appraiser shall receive compensation from the Employer for all expenses and all services rendered prior to cancellation at the following rates: Albin D. Kline, MAI, SRA, $100.00 per hour; Janene McBride, $75.00 per hour; Research Assistants, $30.00 per hour; and office staff at $18.00 per hour. CITY OF ROSEMOUNT Employer CHASE-BRACKETT Accepted: A. D. Kline, MAI, SRA Senior Vice President _`'Janene McBride f Appraiser Date Date f Date