Post on 23-Mar-2016
description
Partnership Proposal to Tarleton State University
January 9, 2013
Framework of Our Partnership Values
What Makes Us Different?• Integration
– A single seamless solution
– Collaborative Culture…..Working in the best interest of our clients everyone has a seat at the table
– Aligned values with Texas A&M System HUB participation
• Flexibility– Our program doesn’t come in a box
– University can maintain operations/residence life
• Creativity– Multiple financing strategies tailored to a “Program” not “Project” solution
• Resources– Leveraging capabilities of sister companies (capital, development, construction, operations,
infrastructure)
What Makes Us DifferentIntegrationFlexibilityCreativityResources
Finance Options
Project FundingBalfour Beatty
CapitalEquity/Debt
Project FundingBalfour Beatty
CapitalBond Purchase
501 (c) 3Bonds
Ground Lease Ground Lease
Architect
Architect
Equity Structure Foundation Structure
OptionalOptional
Florida Atlantic University
Background on FAU Financing
FAU had a clear vision and goal for Innovation Village
We provided the solution• Multiple phases of housing• Athletic and recreational facilities• Retail and other amenities• Maximize financing opportunity using housing “horsepower”
Legal Structure
FAU ground lease of “Innovation Village” land to Direct Support Organization (DSO, not-for-profit) – FAU received ground lease payment in form of Capital Contribution for other
Innovation Village improvements DSO owns housing, and master lease to FAU’s Housing Enterprise
Fund (HEF)– Excess cash generated by HEF’s existing housing used to support debt
obligations for new housing– Collectively, revenues will be applied to operating costs, existing and new debt
obligations, and other subordinate bonds
Background on FAU Financing
FAU Innovation Village Apartments
• FAU creates non-profit
• FAU leases the existing housing and ground for new housing to the non-profit
• The non-profit sells bonds based on net revenue of the existing housing and the projected net revenue of the new housing
• The non-profit provides bond proceeds to the Developer to build the new project
• The non-profit has $12m left over for the university to use for campus improvements Relevant Experience
FAU(University)
RBC Capital Markets(Underwriter)
U.S. Bank National Association
(Trustee)
FAU Finance Corporation(DSO)
PGAL(Arch/Eng)
Balfour Beatty Construction(Contractor)
Series A Bondholders
Balfour Beatty
Balfour Beatty/ Capstone(Developer)
Balfour Beatty/ Capstone(Manager)
Ground Lease (New & Existing)
$12 m Ground Lease payment
TrustIndenture
Development Agreement
Construction Contract A&EContract
Property MgmtAgreement
Series B Bonds
Series A Bonds
$124.3 m
Operations Structure
• Assumed operation of existing inventory in addition to Innovation Village
• “Shared Governance” with University
– BB/Capstone responsible for Operations and Maintenance
– FAU responsible for Residence Life Programs
– BB/Capstone working with FAU to set annual rents and establish housing policies
• BB/Capstone manages Capital Repair/Replacement program through project term
Goal Achieved• Financing benefited from the “A” rating of FAU’s existing housing system –
the FAU Housing Enterprise Fund
• Subordinate Bonds privately placed by Balfour Beatty
• These bonds provided important “gap” financing• Debt service fully subordinate – paid last in the “waterfall”
• Amortization Term on Senior Bonds -- 30 years
• Bond sale yielded a Total Fixed Interest Cost of 4.78% – Structure allowed for an “up-front” ground lease payment of $12
Million – fulfilling a key FAU goal to fund Innovation Village improvements
University of Iowa
University of Iowa Project Details:
• 40 year ground lease to Balfour Beatty
• Project financed with 100% Balfour Beatty Equity/Debt
• Operations/Residence Life by Balfour Beatty Communities
• University manages billing/collections and assists in marketing
• Annual sharing of cash flows after 95% occupancy met
• University first right of refusal to purchase
Relevant ExperienceUniversity of Iowa
DeveloperBalfour Beatty Campus
SolutionsCapital
Balfour Beatty Investments
Architect/Engineers SCB
Operations / Res LifeBB Communities
Ground Lease
Debt Service
Investment
Base Rent
General ContractorBalfour Beatty Construction
Development Costs
What Makes Us DifferentIntegrationFlexibilityCreativityResources
Management Options
Flexible Management Options
Duty University Managed Developer Managed Jointly Managed
Operations Director of University Housing Community Manager Committee
Maintenance University BBC TBD
Billing University BBC TBD
Residence Life University University University
Marketing University Both Both
HomePlus®
Community Management ApproachA World Class, Fully Integrated and Comprehensive approach to property management honed over 20 years of experience.
BBC Management Philosophy
•Peace of Mind
•Success
•Happiness
Seven Focus Areas
• Community Service• Mind Building• Life Management• Personal Safety• Physical Health• Social Activity• Environmental Awareness
What Makes Us DifferentIntegrationFlexibilityCreativityResources
Project Specifics
Keys to Success: • Establish Lines of
Communication Between Parties
• Identify approval process with University and BOR
• Create Framework for Meeting All Milestones
• Financing• Development• Design• Construction
• Start the Due Diligence and Conceptual Design
• Market Study • Refine Program• Site Analysis• Financial Analysis
MilestonesKickoff Meeting 2/1/13
Negotiate Predevelopment Agreement, Business Terms
2/1 /13– 3/23/13
Site Analysis (Geotech, Topography, Survey, Environmental, Zoning and Permit)
2/1/13-3/23/13
Ground Lease Negotiations, Schematic Design /CM Budget Estimate
2/1/13-2/21/13
Design Development/CM Budget Estimate 2/21/13-3/21/13
Design Review by TAMU System 3/23/13
GMP/Permit Set (85%) 3/25/13-4/19/13
Approval by BOR/Construction Set Approval by FPC 5/2/13
Issue Construction Set (100%) 5/7/13
Financial Closing 5/31/13
Site work 6/18/13-7/1/13
Begin Construction 7/13
Project Delivery August 2014
Potential Project Scope• Design of a new, three-story, 142,000 SF residence hall for 500 students
• Construction of the new residence hall, including site work and utility infrastructure
• Procurement and installation of FF&E
22
Gross Square Footage 142,000
Semi-Suite Double and Single Units 325
Resident Assistant Units (Singles) 10
Total Beds 500
Community Lounge Included
Large Multipurpose Rooms (Ground Floor) 4
Offices for Management Staff Included
Laundry Room Included
Staff Apartment Included
Financial Model
Program vs Project Solution
Potential Sites
Potential Sites
Potential Unit Types
What Makes Us DifferentIntegrationFlexibilityCreativityResources
Other Relevant Experience
George Mason University
Football Stadium Renovation and Expansion Experience
The Cotton Bowl Daryl K Royal Texas Memorial Stadium
Ohio State University-Woody Hayes Athletics Center
What Makes Us DifferentIntegrationFlexibilityCreativityResources
Questions/Discussion