Information
Maple Street Lofts is a mixed-use transit-oriented development on a six-acre downtown site. It is a Planned Unit Development (PUD) that features 14,000 SF of retail/restaurant/entertainment uses and includes a mix of 257 luxury apartments and 56 single-family attached rowhomes.
The development will also include 268 parking spaces in a Village-owned public parking garage. This garage is intended to support commuter and general-use public parking. The mixed-use apartment and retail structures will construct separate parking structures for their residents and patrons.
Three components of the project include Building A: 6-story, 192 unit Mixed-Use building with retail space, Building D: 7-story, 65 unit apartment building, public parking deck (C), and 56 rowhomes (E). Attached is conceptual plan depicting the proposed layout of streets and structures. It is poignant to note the proximity and shared foundation wall for the privately-owned mixed-use Building A and Village-owned public parking garage.
On April 9, 2019, the Village Board approved a redevelopment agreement (RDA) with Maple Street Lofts, LLC to construct the Maple Street Lofts PUD. The scope of work included construction of Building A, Building D, and rowhomes along with requisite streets, sidewalks, utilities, and other public improvements. Notably, the scope of work did not include design or construction of the Village-owned parking structure.
Due to the fact that the public parking deck will be a long-lived Village asset, and an integral component of downtown redevelopment efforts, staff elected to retain separate and distinct control over its design and project development. To this end, the Village Board awarded a contract to Walker Consultants on April 16, 2019. Walker Consultants is an architectural engineering firm that specializes in the design and construction of parking structures.
However, the close physical proximity of the buildings, and compact, sequential timeline for development of the site, suggest the project could benefit if all work was awarded to a single contractor. To facilitate this option, Section 6E of the redevelopment agreement (RDA) between the Village and Maple Street Lofts, LLC (the developer) included provisions to negotiate a separate, written agreement for the developer to construct the Village-designed parking deck.
Guaranteed Maximum Price (GMP)
On October 18, 2019, Nicholas & Associates submitted a Guaranteed Maximum Price (GMP) to construct the 268-stall Maple Street Parking Deck. A GMP is associated with a construction project delivery method known as construction manager at risk (CMAR).
CMAR is a method of project delivery that compares to more commonly encountered methods of project delivery such as design-bid-build. It differs from the norm by reallocating some risk from the owner to the construction manager.
CMAR with GMP is an "open book" type contract where the construction manager is compensated for actual costs incurred plus a fixed fee subject to a ceiling price. The construction manager is responsible for cost overruns unless the GMP has been modified by a formal change order (only as a result of additional scope from the client, not price overruns, errors, or omissions).
Savings resulting from lower than anticipated costs are returned to the owner. This arrangement is different from a more conventional design-bid-build contract where the low bidder is awarded a lump sum "build" contract and cost savings are retained by the contractor; essentially becoming additional profits.
The CMAR with GMP project delivery method has been utilized with success by the Village to construct a number of buildings in the past including Village Hall, Emergency Operations Center, and Fire Station 14. It is also being successfully utilized in current adaptive re-use projects for the new Police Department Headquarters building and the new Fire Department Headquarters / Station 13 building.
Nicholas & Associates submitted a GMP of $6,879,569. This not-to-exceed fee was submitted to construct a 268-space parking deck on the Maple Street Lofts PUD site pursuant to 95% construction plans and specifications prepared by Walker Consultants. A GMP cost summary by Nicholas and Associates and 95% construction plans by Walker Consultants are attached.
Salient features of the design include lighted interior, one elevator, fire suppression, emergency electrical generator, as well as rough-in electric and communication for electric vehicle charging stations and closed-circuit television cameras.
Notably, the design, and GMP, do not include interior concrete staining or painting (with exception of the stairwell), the exterior "blade" signs, or an interior parking notification system - be that for a basic system or one that identifies the availability of each individual stall. Other specific items not included but may be desirable are interior staining/painting of the interior of the garage itself, a 2nd elevator car (a shaft is being provided), the closed-circuit cameras and charging equipment for the electric vehicle stations.
Discussion
To evaluate the GMP submitted by Nicholas & Associates, staff solicited cost estimates from third party construction professionals. These estimates included an architect's opinion of probable construction cost from the parking deck designer, Walker Consultants, as well as a cost estimate prepared by Construction Cost Systems, Inc. of Oakbrook Terrace, Illinois (CCS). CCS is a professional consulting firm that specializes in cost estimates for construction projects, budget preparation, and project management. All the estimates are based on the 95% construction plans and specifications.
For reference, each estimate is attached separately and summarized in the enclosed Maple Street Parking Deck Guaranteed Maximum Price for Construction Manager at Risk Analysis spreadsheet. In addition, the estimates are summarized and contrasted in Table 1 below:
Table 1 | CMAR with GMP Summary
| CCS | Walker | Nicholas | Average |
Total Cost |
$8,270,273.84 |
$6,683,865.33 |
$6,879,569.00
|
$7,277,902.77 |
Cost/Stall |
$30,859.23 |
$24,939.80 |
$25,670.03
|
$27,156.35 |
The GMP submitted by Nicholas & Associates is $1,390,705 (16.82%) less expensive than the estimate rendered by the professional construction cost estimating firm CCS. It is $195,704 (2.93%) more expensive than the estimate tabulated by the project architect, Walker Consultants. Based on these results, it is the opinion of staff that Nicholas & Associate's GMP is reasonable and constructable.
Staff further opines that the difference between the CCS estimate and Nicholas & Associates' GMP fairly approximates the marketplace. More succinctly, the CCS estimate likely represents anticipated bid results if the project were let for public bidding.
CCS' estimate was developed utilizing a robust database of construction costs applied to fairly detailed, near-final (95%) construction documents. However, CCS lacks intimate familiarity with the design, project development, and site constraints. As a consequence, CCS' estimate seems to coalesce higher unit costs drawn from expansive knowledge of the construction industry with risk borne from third-party uncertainty about the project, designer, owner, and site conditions. It seems likely that heretofore disinterested, third-party builders invited to bid at this juncture would mirror this perspective.
Conversely, Walker Consultants' estimate is more closely aligned with Nicholas & Associates' GMP suggesting a shared, equivalent understanding of the design, site conditions, and overall PUD implications; the costs vary by less than 3%.
It is also relevant to note that a substantial portion of Nicholas & Associates' GMP is based on actual competitive bid results. Specifically, in an effort to develop their GMP, Nicholas & Associates solicited competitive bids for the concrete and excavation portions of the project. This portion, $4,496,584, comprises 65% of Nicholas & Associates' GMP.
In addition, it is significant to highlight that Nicholas & Associate's GMP requests remuneration for general conditions aspects of the project including project management, administration, escalation, bonds, insurance, and construction manager fee are 55% lower than the norm indicated by the CCS estimate and 28% lower than the benchmark anticipated for general conditions in the Walker Consultants estimate.
Staff also recognizes that awarding a CMAR with GMP contract to Nicholas & Associates affords an opportunity to simplify coordination of multiple site improvements associated with the Maple Street Lofts PUD including mixed-use buildings, rowhomes, private streets, underground utilities, and stormwater improvements. A sole construction manager responsible for improving the entire site improves the probability that disparate portions of the project will be developed on time and in appropriate sequence to generate anticipated value, avoid risks, and minimize costs. For example, construction of the parking deck is a prerequisite for transferring the existing parking field on the southwest portion of the PUD site. Relocating the parking field is a prerequisite for constructing mandated below grade stormwater detention and volume control for the site. These improvements are required prior to occupancy of the mixed-use building commercial or residential spaces. Literally, one things leads to another.
Most importantly, awarding construction of the parking deck to Nicholas & Associates mitigates coordination, risk, and cost allocation associated with the shared foundation and footings between the north wall of the proposed parking deck and the south wall of the planned mixed-use building. The close, physical proximity of these buildings and tight constraints of the site suggest that a shared foundation is the most cost effective means to construct both structures.
To facilitate this proposed award, the existing Maple Street Lofts Redevelopment Agreement (RDA) requires amendment to increase the Funding Cap for the Parking Garage Project from the placeholder figure of $6,000,000 to Nicholas & Associates' GMP ($6,879,569). A proposed ordinance amending the RDA as indicated and authorizing the mayor to execute a construction manager at risk with guaranteed maximum price of $6,879,569 agreement for the construction of the Maple Street Parking Deck is attached. For reference, a copy of the proposed agreement (contract, exhibit and general conditions) between the Village and Nicholas & Associates is also enclosed.
Alternatives
1. Pass an ordinance amending the Maple Street Lofts redevelopment agreement and authorizing the mayor to execute a construction manager at risk with guaranteed maximum price contract with Nicholas & Associates, Inc. to construct the Maple Street Parking Deck.
2. Action at discretion of Village Board.
Staff Recommendation
Staff recommends that the Village Board approve an ordinance amending the existing Maple Street Lofts Redevelopment Agreement to increase the Parking Garage Project Funding Cap to $6,879,569 and authorize the mayor to execute a construction manager at risk with guaranteed maximum price agreement with Nicholas & Associates, Inc. of Mount Prospect, Illinois for construction of the Maple Street Parking Deck.