AN 10-17-656 - McMaster Graduate Student Residence

McMaster intends to enter into a public-private partnership with a professional developer to jointly develop the Project Lands by creation of a limited partnership entity jointly and equally owned, which will construct a 590 bed graduate student residence, including commercial and underground parking space on premises subleased from McMaster under a head lease. Further, the limited partnership will engage McMaster to maintain and operate said premises including sub-leasing to students (the “Residence”) for a coterminous period of the project land sub-lease.
 
The purpose of this RFP is to select a Proponent who will assume the roles of Developer and Partner. McMaster intends to enter into a series of agreements to enable the project structure. Agreements and term sheets are included in this proposal package for Proponents to assess in the preparation of a complete response. Finally, McMaster intends to assign architect and construction agreements to the Developer, which will be wholly available following attendance and confidentiality agreement sign-off at the mandatory proponents meeting on Friday, April 27, 2018 at 14:00 at the David Braley Health Sciences Centre, in the Bayview Room, 5th floor, located at 100 Main Street West, Hamilton, Ontario.
The Head lease between McMaster University and Leggat Limited Investments allows for lands sufficient for two projects. First, a multi-storey parking garage wholly owned by McMaster University occupying 48% of the leased property. Second, a graduate student residence to be developed with a Developer and Partner whereby McMaster will enter into a sub-lease for 52% of the Head lease lands with a General Partner (GP). McMaster will work with the selected Proponent to coordinate the two projects optimally, which may involve some sub-contractor work supporting both projects.
 
The project governance and the post-construction operating governance will draw upon the above business structure and use stakeholder committees to progress the project and its operations on a routine and timely basis. The committees include a Design and Construction Committee and a post-construction Operations Committee. The constituency and terms associated with these committees will be included in a Limited Partnership Agreement. The Operations Committee will also be included in the Management Agreement.
 
The Project financing approach considers a long term debenture to be issued to the LP, whereby both McMaster University and the Proponent are Sponsors of the debenture. The debenture will be wholly reflected on the books of account for the LP. McMaster University will not guarantee occupancy as part of this financing structure. A third party market demand study has been completed to substantiate the project and support the residence proformas included in this RFP. The debenture will be non-recourse to McMaster. The Proponent may present an alternative financing approach such as, construction loan and mortgage, however the terms of the financing must remain non-recourse to McMaster and must not involve any occupancy guarantee.
 
The Proponent will be required to establish the GP and the LP, maintain its records, support the bond offering information requirements as co-Sponsor, and provide the 50% equity contribution to the project when due. The project stabilization profit will be shared 50:50 with McMaster University and the Proponent. An annual administrative fee has been included in the construction budget and post-construction operating expenses of the LP.
 
McMaster University has already begun work on the design of the project, with Phase 1 drawings complete. The project architect and project construction entity have been identified, costs for which are included in the proforma model. McMaster has engaged the following entities to perform preconstruction work but the Proponent will be required to enter, via assignment, into direct contracts with the entities on terms and in a form as set out in the appendices to be made available following the Mandatory Proponents Meeting.
 
Project Architect/Prime Consultant:             SRM Architects
Project Construction:                                     Stuart Olsen