07-200 Resolution No. 07-200
RESOLUTION
AUTHORIZING EXECUTION OF AN AGREEMENT WITH
ECONOMIC RESEARCH ASSOCIATES
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that
Olufemi Folarin,City Manager,and Diane Robertson,City Clerk,be and are hereby authorized and
directed to execute an agreement on behalf of the City of Elgin with Economic Research Associates
for professional services in connection with an engineering and land management plan for
development between Grove Avenue and the Fox River,a copy of which is attached hereto and made
a part hereof by reference.
s/Ed Schock
Ed Schock, Mayor
Presented: August 8, 2007
Adopted: August 8, 2007
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/Diane Robertson
Diane Robertson, City Clerk
AGREEMENT
THIS AGREEMENT is made and entered into this 1'4 day of ,
2007, by and between the CITY OF ELGIN, an Illinois m icipal
corporation (hereinafter referred to as "CITY" ) and ECONOMICS
RESEARCH ASSOCIATES, a/k/a ERA, a corporation authorized to do
business in the State of Illinois (hereinafter referred to as
"CONSULTANT" ) .
WHEREAS, the CITY desires to engage the CONSULTANT to furnish
certain professional services in connection with a real estate
market, financial, and fiscal impact assessment related to the
potential residential redevelopment located west of Grove Avenue,
north of Ann Street, east of the Fox River and south of Jefferson,
in Elgin, Illinois (hereinafter referred to as the PROJECT) ; and
WHEREAS, the CONSULTANT represents that it is in compliance with
Illinois Statutes relating to professional registration of
individuals and has the necessary expertise and experience to
furnish such services upon the terms and conditions set forth
herein below.
NOW, THEREFORE, it is hereby agreed by and between the CITY and the
CONSULTANT that the CITY does hereby retain the CONSULTANT for and
in consideration of the mutual promises and covenants contained
herein, the sufficiency of which is hereby acknowledged to provide
the services to the CITY in the matters involved in the PROJECT as
described herein, subject to the following terms and conditions and
stipulations, to-wit :
1. SCOPE OF SERVICES
A. All work hereunder shall be performed under the direction
of the Assistant City Manager of the CITY, herein after
referred to as the "DIRECTOR" .
B . CONSULTANT shall provide to the CITY a real estate
market, financial and fiscal impact assessment related to
the PROJECT. A detailed Scope of Services being
CONSULTANT' s proposal for downtown market and financial
assessment dated July 6, 2007, ERA Proposal No. 48293 is
attached hereto as Attachment "A" .
2 . SCHEDULE
The order of the tasks for the PROJECT to be completed by the
CONSULTANT is set forth in Attachment "A" under the Timing and
Budget section. CONSULTANT shall commence the services to be
provided pursuant to this Agreement upon the entry and
execution of this Agreement and shall proceed to complete such
services in as timely a fashion as is reasonably practicable.
3 . WORK PRODUCTS
All work products prepared by the CONSULTANT pursuant hereto
including, but not limited to, reports, designs, calculations,
work drawings, studies, photographs, models and
recommendations shall be the property of the CITY and shall be
delivered to the CITY upon request of the DIRECTOR provided,
however, that the CONSULTANT may retain copies of such work
products for its records . Such work products are not intended
or represented to be suitable for reuse by the CITY on any
extension to the PROJECT or on any other project, and such
reuse shall be at the sole risk of the CITY without liability
or legal exposure to the CONSULTANT.
4 . PAYMENTS TO THE CONSULTANT
A. The CITY shall reimburse the CONSULTANT for services
under this Agreement the total amount of Forty-Eight
Thousand Dollars ($48, 000) regardless of the actual costs
incurred by the CONSULTANT unless substantial
modifications to the PROJECT are authorized in writing
and approved by way of amendment to this Agreement by the
City Council .
B. The CITY shall make periodic payments to the CONSULTANT
based upon actual progress within thirty (30) days after
receipt and approval of an invoice . Said periodic
payments to the CONSULTANT shall not exceed the amount
shown for the various tasks in the Timing and Budget
section of Attachment "A" , and full payment for each task
shall not be made until the task is completed and
accepted by the Director.
C. For outside services provided by other firms or
consultants, if any, the CITY shall pay the CONSULTANT
the invoice fee to the CONSULTANT, which such invoice
fees shall constitute and be construed as inclusive with
and a portion of the aforementioned $48, 000 not-to-exceed
fee .
D. All reimbursable expenses shall be itemized and
reimbursed to the CONSULTANT; provided, however, that
such reimbursable expenses shall not exceed $2 , 000 .
Reimbursable expenses shall be those expenses reasonably
arising out of or in connection with CONSULTANT' s work on
the PROJECT which are not fees and include such matters
as travel costs, report reproduction costs, express
delivery charges, research data and other customary
expenses related to the completion of the work. All
expenses will be billed at cost, with no mark-ups . Such
reimbursable expenses not to exceed the total amount of
$2, 000 shall be in addition to the aforementioned $48, 000
not-to-exceed fee .
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5. INVOICES
A. The CONSULTANT shall submit invoices in a format approved
by the CITY. Progress reports will be included with all
payment requests .
B. The CONSULTANT shall maintain records showing actual time
devoted and cost incurred. The CONSULTANT shall permit
the authorized representative of the CITY to inspect and
audit all data and records of the CONSULTANT for work
done under this Agreement . The CONSULTANT shall make
these records available at reasonable times during the
Agreement period, and for a year after termination of
this Agreement .
6 . TERMINATION OF AGREEMENT
Notwithstanding any other provision hereof, the CITY may
terminate this Agreement at any time upon fifteen (15) days
prior written notice to the CONSULTANT. In the event that this
Agreement is so terminated, the CONSULTANT shall be paid for
services actually performed and reimbursable expenses actually
incurred prior to termination, except that reimbursement shall
not exceed the task amounts set forth under Paragraph 4 above.
7 . TERM
This Agreement shall, unless terminated for cause or pursuant
to Section 6 , be deemed concluded on the date the CITY
determines that all of the CONSULTANT' s work under this
agreement is completed. A determination of completion shall
not constitute a waiver of any rights or claims which the CITY
may have or thereafter acquire with respect to any term or
provision of the Agreement .
8 . NOTICE OF CLAIM
If the CONSULTANT wishes to make a claim for additional
compensation as a result of action taken by the CITY, the
CONSULTANT shall give written notice of his claim within 15
days after occurrence of such action. No claim for additional
compensation shall be valid unless so made . Any changes in
the CONSULTANT ' s fee shall be valid only to the extent that
such changes are included in writing signed by the CITY and
the CONSULTANT. Regardless of the decision of the DIRECTOR
relative to a claim submitted by the CONSULTANT, all work
required under this Agreement as determined by the DIRECTOR
shall proceed without interruption.
9. BREACH OF CONTRACT
If either party violates or breaches any term of this
Agreement, such violation or breach shall be deemed to
constitute a default, and the other party has the right to
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seek such administrative, contractual or legal remedies as may
be suitable to the violation or breach; and, in addition, if
either party, by reason of any default, fails within fifteen
(15) days after notice thereof by the other party to comply
with the conditions of the Agreement, the other party may
terminate this Agreement .
10. INDEMNIFICATION
To the fullest extent permitted by law, CONSULTANT agrees to
and shall indemnify, defend and hold harmless the CITY, its
officers, employees, agents, boards and commissions from and
against any and all claims, suits, judgments, costs, attorneys
fees, damages or other relief, including but not limited to
workers compensation claims, in any way resulting from or
arising out of negligent actions or omissions of the
CONSULTANT in connection herewith, including negligence or
omissions of employees or agents of the CONSULTANT arising out
of the performance of this Agreement . In the event of any
action against the CITY, its officers, employees, agents,
boards or commissions, covered by the foregoing duty to
indemnify, defend and hold harmless such action shall be
defended by legal counsel of the CITY ' s choosing. The
provisions of this paragraph shall survive any expiration
and/or termination of this agreement .
11. NO PERSONAL LIABILITY
No official, director, officer, agent or employee of the CITY
shall be charged personally or held contractually liable under
any term or provision of this Agreement or because of their
execution, approval or attempted execution of this Agreement .
12 . INSURANCE
A. Comprehensive Liability. The CONSULTANT shall provide,
pay for and maintain in effect, during the term of this
Agreement, a policy of comprehensive general liability
insurance with limits of at least $1, 000, 000 aggregate
for bodily injury and $1, 000, 000 aggregate for property
damage.
The CONSULTANT shall deliver to the DIRECTOR a
Certification of Insurance naming the CITY as additional
insured. The policy shall not be modified or terminated
without thirty (30) days prior written notice to the
DIRECTOR.
The Certificate of Insurance which shall include
Contractual obligation assumed by the CONSULTANT under
Article 10 entitled "Indemnification" shall be provided.
This insurance shall apply as primary insurance with
respect to any other insurance or self-insurance programs
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afforded to the CITY. There shall be no endorsement or
modification of this insurance to make it excess over
other available insurance, alternatively, if the
insurance states that it is excess or prorated, it shall
be endorsed to be primary with respect to the CITY.
B. Comprehensive Automobile Liability. Comprehensive
Automobile Liability Insurance covering all owned, non-
owned and hired motor vehicles with limits of not less
than $500 , 000 per occurrence for damage to property.
C. Combined Single Limit Policy. The requirements for
insurance coverage for the general liability and auto
exposures may be met with a combined single limit of
$1, 000, 000 per occurrence subject to a $1, 000, 000
aggregate.
D. Professional Liability. The CONSULTANT shall carry
CONSULTANTS ' Professional Liability Insurance Covering
claims resulting from error, omissions or negligent acts
with a combined single limit of not less than $1, 000, 000
per occurrence . A Certificate of Insurance shall be
submitted to the DIRECTOR as evidence of insurance
protection. The policy shall not be modified or
terminated without thirty (30) days prior written notice
to the DIRECTOR.
13 . CONSTRUCTION MEANS, METHODS, TECHNIQUES, SEQUENCES, PROCEDURES
AND SAFETY
The CONSULTANT shall not have control over or charge of and
shall not be responsible for construction means, methods,
techniques, sequences or procedures, or for safety precautions
and programs in connection with the construction, unless
specifically identified in the Scope of Services .
14 . NONDISCRIMINATION
In all hiring or employment made possible or resulting from
this Agreement, there shall be no discrimination against any
employee or applicant for employment because of sex, age,
race, color, creed, national origin, marital status, of the
presence of any sensory, mental or physical handicap, unless
based upon a bona fide occupational qualification, and this
requirement shall apply to, but not be limited to, the
following: employment advertising, layoff or termination,
rates of pay or other forms of compensation and selection for
training, including apprenticeship .
No person shall be denied or subjected to discrimination in
receipt of the benefit of any services or activities made
possible by or resulting from this Agreement on the grounds of
sex, race, color, creed, national origin, age except minimum
age and retirement provisions, marital status or the presence
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of any sensory, mental or physical handicap. Any violation of
this provision shall be considered a violation of a material
provision of this Agreement and shall be grounds for
cancellation, termination or suspension, in whole or in part,
of the Agreement by the CITY.
15 . ASSIGNMENT AND SUCCESSORS
This Agreement and each and every portion thereof shall be
binding upon the successors and the assigns of the parties
hereto; provided, however, that no assignment shall be made
without the prior written consent of the CITY.
16 . DELEGATIONS AND SUBCONTRACTORS
Any assignment, delegation or subcontracting shall be subject
to all the terms, conditions and other provisions of this
Agreement and the CONSULTANT shall remain liable to the CITY
with respect to each and every item, condition and other
provision hereof to the same extent that the CONSULTANT would
have been obligated if it had done the work itself and no
assignment, delegation or subcontract had been made . Any
proposed subcontractor shall require the CITY' s advanced
written approval .
17 . NO CO-PARTNERSHIP OR AGENCY
This agreement shall not be construed so as to create a
partnership, joint venture, employment or other agency
relationship between the parties hereto.
18 . SEVERABILITY
The parties intend and agreed that, if any paragraph, sub-
paragraph, phrase, clause or other provision of this
Agreement, or any portion thereof, shall be held to be void or
otherwise unenforceable, all other portions of this Agreement
shall remain in full force and effect .
19 . HEADINGS
The headings of the several paragraphs of this Agreement are
inserted only as a matter of convenience and for reference and
in no way are they intended to define, limit or describe the
scope of intent of any provision of this Agreement, nor shall
they be construed to affect in any manner the terms and
provisions hereof or the interpretation or construction
thereof .
20. MODIFICATION OR AMENDMENT
This Agreement and its attachments constitutes the entire
Agreement of the parties on the subject matter hereof and may
not be changed, modified, discharged or extended except by
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written amendment duly executed by the parties . Each party
agrees that no representations or warranties shall be binding
upon the other party unless expressed in writing herein or in
a duly executed amendment hereof, or change order as herein
provided.
21. APPLICABLE LAW
This Agreement shall be deemed to have been made in, and shall
be construed in accordance with the laws of the State of
Illinois . Venue for the resolution of any disputes or the
enforcement of any rights pursuant to this agreement shall be
in the Circuit Court of Kane County, Illinois .
22 . NEWS RELEASES
The CONSULTANT may not issue any news releases without prior
approval from the DIRECTOR, nor will the CONSULTANT make
public proposals developed under this Agreement without prior
written approval from the DIRECTOR prior to said documentation
becoming matters of public record.
23 . COOPERATION WITH OTHER CONSULTANTS
The CONSULTANT shall cooperate with any other consultants in
the CITY' s employ or any work associated with the PROJECT.
24 . INTERFERENCE WITH PUBLIC CONTRACTING
The CONSULTANT certifies hereby that it is not barred from
bidding on this contract as a result of a violation of 720
ILCS 5/33E et seq. or any similar state or federal statute
regarding bid rigging.
25 . SEXUAL HARASSMENT
As a condition of this contract, the CONSULTANT shall have
written sexual harassment policies that include, at a minimum,
the following information:
A. the illegality of sexual harassment ;
B. the definition of sexual harassment under state law;
C. a description of sexual harassment , utilizing examples;
D. the vendor' s internal complaint process including
penalties;
E. the legal recourse, investigative and complaint process
available through the Illinois Department of Human
Rights, and the Illinois Human Rights Commission;
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F. directions on how to contact the department and
commission;
G. protection against retaliation as provided by Section 6-
101 of the Human Rights Act .
A copy of the policies shall be provided by CONSULTANT to the
Department of Human Rights upon request 775 ILCS 5/2-105 .
26 . WRITTEN COMMUNICATIONS
All recommendations and other communications by the CONSULTANT
to the DIRECTOR and to other participants which may affect
cost or time of completion, shall be made or confirmed in
writing. The DIRECTOR may also require other recommendations
and communications by the CONSULTANT be made or confirmed in
writing.
27 . NOTICES
All notices, reports and documents required under this
Agreement shall be in writing and shall be mailed by First
Class Mail, postage prepaid, addressed as follows :
A. As to CITY:
Sean R. Stegall
Assistant City Manager
City of Elgin
150 Dexter Court
Elgin, Illinois 60120-5555
B. As to CONSULTANT:
Christopher D. Brewer, Principal
Economics Research Associates
20 E . Jackson Boulevard
Suite 1200
Chicago, Illinois 60604
28 . COMPLIANCE WITH LAWS
Notwithstanding any other provision of this CONTRACT it is
expressly agreed and understood that in connection with the
performance of this AGREEMENT that the CONSULTANT shall comply
with all applicable Federal , State, City and other
requirements of law, including, but not limited to, any
applicable requirements regarding prevailing wages, minimum
wage, workplace safety and legal status of employees .
CONSULTANT shall also at its expense secure all permits and
licenses, pay all charges and fees and give all notices
necessary and incident to the due and lawful prosecution of
the work, and/or the products and/or services to be provided
for in this AGREEMENT. "
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IN WITNESS WHEREOF, the undersigned have placed their hands and
seals upon and executed this Agreement in triplicate as though each
copy hereof was an original and that there are no other oral
agreements that have not been reduced to writing in this statement .
FOR THE CITY: FOR TH NSU
Ah
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By �.► By
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Attest :
City Clerk
F:\Legal Dept\Agreement\Engineering Agreement-Economics Research Associates.doe
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ERA
Economics Research Associates
Proposal for:
Downtown Market and Financial
Assessment
Submitted to:
City of Elgin
Submitted by:
Economics Research Associates
July 6, 2007
ERA Proposal No. 48293
20 East Jackson Boulevard, Suite 1200
Chicago, Illinois 60604
312.427.3855 FAX 312.427.3660 www.econres.com
Los Angeles San Francisco San Diego
Chicago Washington DC London New York
= 4
ERA
July 6,2007
Mr. Sean Stegall
Assistant City Manager
City of Elgin
,
Mr. Stegall,
Economics Research Associates (ERA) is pleased respond to your request for a proposal
for real estate market, financial, and fiscal impact assessment related to the potential
development of several infill parcels in and around downtown Elgin. The attached scope
of services describes ERA's proposed approach to this complex assignment, along with
related credentials highlighting similar work around the country in complex urban
environments. In considering ERA for this assignment,you should note the following:
• Since 1958, ERA has become one of the preeminent real estate consulting firms in the
country, supporting offices in six US cities (and London), with annual sales
approaching $20 million. The firm's extensive experience in real estate development
allows it to be a non-biased intermediary between public and private sector players in a
real estate transaction.
• ERA has been involved in many high profile market and financial studies for public
and private clients in Chicago and across the country. Our attached qualifications
highlight local project work in Tinley Park, Wilmette, and Oak Park, as well as
national projects completed in Atlanta, Washington, D.C., New York, and other
locations.
• ERA's staffing commitment for this project will include Patrick Phillips, ERA's
president. Since joining ERA in 1991, He has been involved in several significant
urban infill mixed use projects across the country, including redevelopment of the
Hudson Yards and the World Trade Center in New York City, and Atlantic Station in
Atlanta. Mr. Phillips will provide oversight of the financial analysis.
The attached proposal summarizes ERA's approach to this assignment, along with our
qualifications and resumes for key staff. We thank you for permitting ERA to propose on
this potential project and look forward to having an opportunity to review it with you in
more detail at your convenience.
Sincerely,
Chris Brewer
Principal
Economics Research Associates
20 East Jackson Boulevard, Suite 1200 Chicago, Illinois 60604
312.427.3855 FAX 312.427.3660 www.econres.com
Los Angeles San Francisco San Diego Chicago Washington DC New York London
a �
ERA
,
Proposed Scope of Services
Task 1: Downtown Market Perspective
ERA will evaluate the real estate market and demographic context for downtown Elgin, focusing on
trends relating to downtown residential development, as well as retail and office development. The
market analysis approach is intended to identify and develop core assumptions that will shape the
project financial and fiscal impact analysis. Work efforts will include:
• Planning: Interviews with city planning and development staff to understand specific details
about redevelopment parcels under study, including parcel size, zoning, allowable densities,
parking requirements,and related considerations. ERA
• Demographics: Analysis of trade area demographics and lifestyle trends for Elgin, focusing on
core demographic segments that have a predisposition to favor downtown housing options.
Specific demographic benchmarks will be identified and compared with other proximate
competitive downtown areas to place Elgin in a proper context. Broader comparative factors will
include overall population, household, and income growth, lifestyle segments, educational
attainment,and age factors.
• Residential Market—Evaluation of current urban housing options in the community,noting unit
counts, sales prices, amenities, and market share in relation to overall housing unit inventories.
The approach will include a survey of competitive downtown housing projects in comparable
suburban downtown markets around Chicago, to confirm growth factors for unit sizes, sales
prices, amenities,parking requirements, and related considerations.
• Retail / Entertainment Market — Analysis of current downtown retail, restaurant, and
entertainment inventories and vacancy levels, lease rates, and tenants, linkage with land values,
and demand implications. The approach will link with existing city efforts to evaluate the
downtown retail market, with the goal of identifying incremental demand for retail space in the
downtown area.
In all cases, the goal will be to identify core benchmarks for real estate market performance that will
be applied to the project pro forma assessment in the next phase. Key benchmarks to be identified
will include:
• Residential unit mix and sales prices, absorption implications, unit amenities, and linkage with
land values
• Retail market lease rates and demand implications
Part II — Project Financial Assessment
The financial analysis will seek to understand achievable land values for identified sites in the
downtown area. The land valuation exercise, otherwise known as a discounted cash flow (DCF)
analysis, will be used to evaluate the relationship between several key elements of a real estate
development program:
• Development density,mix of uses,and parking provision
• Development phasing,dictated by site and environmental remediation factors
Economics Research Associates Page 1
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• Development absorption,dictated by broader market forces
Es
• Development investment requirements(horizontal infrastructure,and vertical construction)
• Annual development revenue(sales of residential dwelling units/lease income)
• Developer expectations holding period and un-leveraged return on investment.
The DCF model incorporates assumptions for phasing, timing, investment costs, and revenues,
solving for the level of investment that a developer would be prepared to commit to acquire the site,
given a defined un-leveraged rate of return goal, otherwise known as a hurdle rate. In the event that
the project is not internally feasible, the approach can incorporate the financial impact of incentives,
to judge an appropriate level of public investment in the project. The approach will rely on key
assumptions relating to:
• Likely developer asset holding periods and expected rates of return in relation to national
benchmarks,such as Korpacz Real Estate Investment Surveys.
• Assumptions for horizontal infrastructure costs(roads,sewer/water,etc.)
• Assumptions for development timing and phasing.
While ERA experience will be applied to shape several of these assumptions, additional interviews
with local officials will also be conducted to understand downtown planning, zoning, and parking
factors. As the financial model is being created, ERA will work with city officials and Land Vision
to develop core assumptions that will drive the model,and allow for noted sensitivity analysis:
• Unit Mix and Absorption — Absorption of residential and commercial real estate. Specifics in
terms of square feet of space, residential units, and related property specific variables will be
tested.
• Income Assumptions — For rental space (retail and office), lease rates will be evaluated with
respect to current market benchmarks. For fee simple property sales (primarily condominiums)
ERA will examine price points and amenities, in perspective with regional market expectations.
• Operating Expenses — ERA will evaluate national standards (Building Owners and Managers
Association, the Institute of Real Estate Management, and the Urban Land Institute) and related
in-house sources to develop assumptions for project operating expenses.
• Development Costs — Team efforts will lead to estimates for horizontal infrastructure costs and
vertical construction costs on a unit basis.
ERA will construct a DCF model to test the aforementioned revenue and expense inputs, with the
output being anticipated developer returns on private investment as well as public returns on
investment, based on noted conclusions from the fiscal impact review. ERA anticipates working
closely with city financial staff to discuss key assumptions and aspects of the discounted cash flow
model.
Part Ill - Project Fiscal Impact
Outputs from the pro forma analysis will then be evaluated in terms of their fiscal impact on local
taxing jurisdictions. ERA expects that calculations for property taxes and sales taxes will be
necessary. Additional economic impacts, possibly relating to project employment, income tax, and
related factors can also be estimated. Fiscal impacts will be evaluated over a 10 to 20-year time
horizon, to highlight the overall value of the project in relation to possible expectations for public
support. The approach builds in time for a final briefing and presentation to city leadership.
Economics Research Associates Page 2
ERA
Final report
ERA will prepare a memorandum report that summarizes the research efforts taken to arrive at noted
conclusions. Initial draft copies of the document will be produced in Adobe Acrobat format; a
reasonable number of hard copies of the final report will be produced, along with a digital version for
publication on web sites,if necessary.
. k
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ERA
Timing, Budget, and Management
Timing and Budget
The following table summarizes ERA's initial estimate of timing and budget for the proposed work
effort. The budget can be adjusted based on conversations with the client. The team is prepared to
initiate the project without delay.
Task Element Budget
Task 1 Downtown Market Perspective $25,000
• Task 2 Financial Analysis $16,000
Task 3 Fiscal Impact Analysis $5,000
Task 4 Final Presentation $2,000
Total $48,000
• The above table does not include reimbursable expenses associated with the proposed approach.
Reimbursable expenses will be capped at$2,000. We will endeavor to keep reimbursable expenses as
low as possible. Expenses include travel costs, report reproduction costs, express delivery charges,
research data and other customary expenses related to the completion of work. All expenses will be
billed at cost,with no markups.
Management
This assignment will be managed by Christopher Brewer, Principal. He will be supported by Patrick
Phillips, President. Key Chicago office project managers include Christian Vetter, Senior Associate,
and Melissa Mayer,Associate. Resumes are attached.
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ERA
Firm Experience
Introduction
ERA is an internationally-recognized consulting firm specializing in all aspects of real estate and land
use economics,urban planning and development,commercial recreation feasibility, strategic planning
for communities and corporations, and management and marketing services. Since 1958, the firm has
completed more than 16,000 assignments for a wide-range of public- and private-sector clients in all
50 states and in 90 foreign countries. Since 1981, ERA has been owned as a California Corporation
by its principal consultants. The firm is unique in its distribution of responsibility and ownership.
- . Twenty-four of the senior professionals in all offices are shareholders; professional consultant tenure
with the firm averages ten years. The firm's portfolio of national and international clients is served
from offices in strategic locations, including Los Angeles, San Diego, San Francisco, Chicago,
Washington,D.C.,New York City,and London.
• Current Local Assignments
• Village of Tinley Park—ERA has been working with village officials since 2006 to analyze real
estate market conditions relating to the potential development of a significant infill site in the
community. As part of the research effort, ERA evaluated retail, office, and residential market
trends for Tinley Park and the Southland region,and developed a project financial analysis.
• Village of Park Forest—ERA has recently begun an assignment in Park Forest, working with a
Chicago-based planning firm to evaluate targeted infill sites in the community for redevelopment.
The approach will include assessment of market findings, as well as financial performance of
targeted infill projects.
• Illinois Medical District— ERA was contracted by the Illinois Medical District to research and
forecast market support and potential uses for a 16-acre site in the District. The site is part of a
larger District build-out of more than 20 million sq. ft. of space for various uses, and the project
team consists of legal, market (ERA), architectural, and engineering elements. The purpose of
the project is to identify feasible uses for the site given the District Stakeholders' criteria, solicit
proposals from developers for development of and investment in the concept, select a developer
team, and finalize negotiations for implementation of the development. This process is ongoing
and anticipated to be completed by the end of 2007.
Chicago Area Project Experience
ERA has worked on numerous high profile projects across the region for public sector clients facing
difficult and or expensive choices. The following project examples are noted for what happened (or
didn't happen)as a result of ERA's study recommendations.
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ERA
Colt Building Adaptive Reuse Assessment
Oak Park, Illinois
Client:City Of Oak Park/HPZS
In the summer of 2006, ERA was engaged by the City of Oak Park, through a contract with HPZS (a
Chicago-based architect), to assess market and financial aspects of restoring the 75,000-square-foot
Colt / Goldberg Building, located in downtown Oak Park, near the intersection of Lake Street and
Harlem Avenue. The building had been acquired by the City of Oak Park as part of downtown
historic preservation goals. ERA's role in this assessment was to evaluate the local real estate market
to understand demand potentials for office, retail, and residential condominium development, assess
the current financial performance of the building, and to develop a financial analysis to test the
implications of three restoration options for the building. The financial analysis tested three adaptive
reuse concepts, each with variations in retail, office, and residential components, with estimates for
supportable rents, operating expenses, and total development costs. The model then identified the
level of private sector investment that would be tolerated for a specified developer rate of return,with
identification of the gap that would require a public sector role to fill. In September of 2006, based
on team analysis of the options, city leaders in Oak Park released an RFP to identify developers who
could renovate,restore, or otherwise redevelop the Colt Building. The analysis process also clarified
city concerns about retail sales leakage to adjacent communities.
Mallinckrodt College Residential Adaptive Reuse Assessment
Wilmette, Illinois
Client:Village of Wilmette/HPZS
In March,2002,ERA was engaged as part of the HPZS Team to assess the adaptive reuse potential of
an existing 90-year-old educational / institutional building in the north suburban community of
Wilmette. The property became a source of serious contention in the community when Loyola
University proposed to sell the building and 20-acre site to a developer for redevelopment with high
value single family homes. The team assessed two alternative residential reuse options for the
building, one being a market rate condominium assessment, and the other being an affordable senior
housing project. ERA evaluated local demographics and competing market rate and senior housing
projects to provide the architects with key inputs for the adaptive reuse process. Research efforts
noted market strength for either market rate housing or affordable senior housing, along with
recommended unit sizes, amenities, and price points. As part of the effort, ERA explored existing
affordable housing programs in adjacent communities to identify benchmark programs and options.
These inputs were used by HPZS to estimate renovation costs for the building. In the final phase of
the assessment, ERA related estimated renovation costs to anticipated income from unit sales to
arrive at supportable conclusions regarding the feasibility of the project. Based on ERA/HPZS team
recommendations, the Village and Park District followed through on plans for a voter referendum, in
which the voters of Wilmette decided to acquire the building and related acreage at a cost of more
than $20 million from Loyola. Based on the team's analysis, the Village also identified a developer
to reuse the building; as of February 2007,this renovation is now in process.
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ERA
Downtown Cinema Market Assessment
Evanston, Illinois
Client:the City of Evanston and AHC Evanston LLC
ERA was retained by the City of Evanston and AHC Evanston LLC,to project the demand for art and
commercial cinemas in downtown Evanston. The impetus for this research was a proposed in
downtown Evanston that would include cinema, as well as retail, entertainment and restaurant
functions. ERA examined current and projected forecast populations and household income data,
divided by age levels, for the City of Evanston and the surrounding market areas. ERA selected
market areas for commercial and art theatres. These trade areas were determined by information on
prospective theatres from the client, population density and composition, access issues, and
competition from local theatres, including competition from other entertainment options. ERA
calculated demand using a visitation model that incorporated demographic information and
participation rates. ERA also used a gravity model to estimate relative market share based on location
to relative population and competition from current and proposed theatres. ERA's assessment was
used to help justify the eventual development of a new mixed-use theater and retail center in
downtown Evanston, which has now been operating successfully for more than five years. The
program anchor is a 12-screen first run multiplex and a 6-screen fine arts theater component run by
Century Theaters,along with supporting retail and restaurant uses.
Cinema Demand Estimate for Block 37
Chicago, Illinois
Client:The City Of Chicago
ERA was asked to evaluate demand potential for constructing theatres at Block 37 in downtown
Chicago. The analysis involved a cinema trends overview, a gravity model analysis, attendance
projections, and an office market demand analysis. ERA's conclusions, made in the mid-1990's
regarding the downtown market's ability to support additional screens, were borne out, with smaller
cinemas being forced to close or reposition, replaced by larger multiplex cinemas. The project also
highlighted a relevant limit to the downtown market in terms of supportable screens. Moving forward
to 2007, it is significant that while block 37 is now finally under construction, cinemas are still not
included in the project.
Retail Forecast Yorktown Mall
Lombard, Illinois
Client: Village of Lombard and Yorktown Mall
In 2005, ERA provided the owner of the Yorktown Mall with an updated sales and development
forecast for the Mall's redevelopment. The study was an update of a previous ERA report. The
development of a Lifestyle Center as a component of the larger mall was evaluated within the context
of area competition. ERA also reviewed the performance of comparable Lifestyle Centers nationally,
as well as the changes in sales performance experienced by the addition of a Lifestyle Center to a
traditional mall structure. A key finding was that a mall can achieve greater sales per sq. ft. with a
Lifestyle Center, but also that the effect of this addition also raises occupancy and sales throughout
the traditional mall structure as well. After estimating penetration rates and forecasting sales, ERA
estimated the fiscal impacts that would accrue to the local municipality through increased sales taxes
and property values. This information was then used by ERA to estimate the potential for supporting
a TIF district to enable the redevelopment efforts.
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Glenview Naval Air Station Reuse Planning
Glenview, Illinois
Client: Village Management and Board of Trustees
ERA provided advice on call to the Village management and Board of Trustees on specific issues
including: DoD / OEA grants programs, base reuse planning options, probable net property yields for
private reuses, and potential schedules for reuse planning and release of properties phases. ERA also
provided example Records-of-Decision defining land disposition decisions by DoD, and highlighted the
need for planning ordinance techniques to clearly define implementation responsibilities of the Village
and private developers. ERA's role helped the community begin a long term reuse process, which
culminated in the eventual redevelopment of the former naval air station into a new urbanist community
called the Glen.
National Project Examples
The following projects highlight ERA's national experience in dealing with infill redevelopment
opportunities in downtown markets, with many projects involving the redevelopment of former
brownfield sites.
Economics Research Associates Page 8
ERA
• World Trade Center Redevelopment
Client Reference
Mr. Robert Davidson
Former Chief Architect 1`3
PANYNJ
4itCurrent Senior Vice President
STV, Inc.
225 Park Avenue South
New York, NY 10003 ` Y
phone: 212. 777.4400 4 ,
Project Dates .
1992-present .
Project Fee
$850,000(total)
•Daniel Libeskind's World Trade Center Design Study,February 2003
Since 1992,the Port Authority of New York&New Jersey has retained Economics
Research Associates(ERA)for a series of retail consulting assignments for the
World Trade Center in New York City. In 1992, ERA was retail consultant for a
Redevelopment Master Plan for the project, including modification of the Plaza,re-
leasing of retail spaces in the Concourse and Plaza Levels,and significant capital
investment in the project as a means to retain Class A office status for the 10 million
square feet of office space at the WTC. Based on ERA's recommended plan and
ongoing tenant leasing advisory services,sales productivity at the WTC's retail
component almost doubled to$900 per square foot,the fifth most productive retail
center in the United States.
In November 2001,the PANYNJ brought ERA into a core consulting team for
redevelopment of the WTC site. As retail advisor to the Port Authority, ERA has
completed six assignments: Analysis of Corporate and Philanthropic Support for
Memorials and Monuments; Retail and Development Advisory Services;Lower
Manhattan Retail Market Analysis and WTC Memorial Attendance Projections; Pre-
Reconciliation Analysis of Architect Daniel Libeskind's Site Master Plan;
Coordination with Silverstein Properties/SOM on Office Development; and PANYNJ
Retail Programming for the Reconciliation Master Plan. ERA is currently advising
the PANYNJ on future retail implementation after Westfield's decision to withdraw
and sell back its leasehold interests to the Port Authority. In addition,ERA is
currently serving as a sub consultant to Jones Lang LaSalle to provide creative
financing and financial analysis for the World Trade Center.
ERA
Hudson Yards Redevelopment
Client Reference
Ms.Ann Weisbrod
x �
President *
Hudson Yards * n '
Development Corporation
225W. 34th Street
Suite 1402
New York, NY 10122
phone: 212.971.5611
Project Dates -
Start:June 2002 ?'
End:June 2005
Project Fee
$162,000
ERA, along with Cushman&Wakefield,worked with New York City's EDC to
assist in the development planning for the Hudson Yards,a 59-block area on the far
west side of Manhattan. The central barriers to the area's revitalization include la
lack of transit infrastructure and outmoded zoning. The strategy is a classic"value
capture"approach: use incremental public revenues generated by the new
development to back bonds issued to finance the required infrastructure investment.
ERA's role was to forecast the likely market demand for new offices,housing,hotels,
and retail as a result of strategic public investment in transit,open space, and other
amenities. ERA also evaluated the impact of various development alternatives on
area-wide property valuations and assessments, and projected incremental revenues
associated with property tax revenues,zoning-based development fees,and sale of
development rights by public transportation agencies.
ERA
Crystal City Redevelopment
Client Reference ;;F ,;;; „`°
Mr. Gordon Fraley �' z4°* `
Charles E. Smith, a Division of ,4
4i4i�,1h e"q
Vornado Realty Trust ,3 �• �
phone: 703.769.8200 4,- 411.4,'=
r Project Dates
Start: October, 2004 � �
Project Fee *4 ,..,,t- 4 _
First Project: $25,000 :
' S
ERA
West Village Phase II Financial Analysis
Durham, North Carolina
Client:City of Durham
In 2005, ERA was engaged by the City of Durham to analyze the adaptive reuse of a 900,000-sqaure
foot complex of former tobacco warehouses called West Village Phase II on the edge of downtown
Durham, North Carolina. ERA analyzed the developer's proforma, with the intent of estimating the
project's return on investment (internal rate of return or IRR) based on varying levels of public
incentive support. ERA's approach built in an overview of the local real estate market, along with
basic demographic analysis. In addition, ERA explored other downtown housing markets to
understand the competitiveness of downtown locations for housing development. These work efforts
fed into the financial analysis, which incorporated a review of developer financial assumptions,
interviews with downtown development officials to understand the local context, including current
and planned development at American Tobacco, as well as the Phase I component of West Village,
and expectations for new supply at other planned/proposed downtown developments, and collection
of collection of secondary data regarding market real estate performance, including vacancy, demand
drivers, operating expenses, lease rates, and market segments. The approach also reviewed ULI
development case studies for adaptive reuse projects,noting use of historic tax credits,with the intent
of placing West Village Phase II in a larger context, and assessed benchmark developer returns on
investment, assuming both 100% equity investment (un-leveraged) and a combination of debt and
equity investment (leveraged). The above steps were used to help develop a preliminary financial
analysis of the Phase II project. Based on ERA's analysis, the City moved to approve an agreement
with the developer to move the project forward.
Heritage Square Financial Analysis
Durham,North Carolina
Client:City of Durham
In 2006, ERA was engaged by the City of Durham to analyze the Heritage Square project developer
proforma, with the intent of estimating the project's return on investment (internal rate of return or
IRR)based on varying levels of public incentive support, as well as fiscal and economic impact. The
proposed mixed use project would cover more than 600,000 square feet of space, with retail, office,
and residential uses. ERA's approach built in an overview of the local real estate market, along with
basic demographic analysis. In addition, ERA explored other downtown housing markets to
understand the competitiveness of downtown locations for housing development. These work efforts
fed into the financial analysis, which incorporated a review of developer financial assumptions,
interviews with downtown development officials to understand the local context, and collection of
collection of secondary data regarding market real estate performance, including vacancy, demand
drivers, operating expenses, lease rates, and market segments. The financial analysis incorporated a
fiscal and economic impact element, to relate expected public incentive requirements with likely
public sector revenue streams, including property taxes and sales taxes. The City is using ERA's
analysis to help drive policy decisions regarding appropriate use of public incentives for private
development projects.
Economics Research Associates Page 12
S '
ERA
LTV Steel Site Redevelopment
Pittsburgh, Pennsylvania
Client: Regional Industrial Development Corporation
ERA and Urban Design Associates (UDA) helped create a master development strategy for this 77-
acre brownfield site on the Monongahela River. The project, a former steel mill site, is planned as a
mixed-use community emphasizing residential development at mixed densities, a waterfront park and
trail system, and appropriately scaled commercial development. ERA analyzed market potentials,
developed a public-private financing strategy,and assisted in the process of developer recruitment.
Reuse of the Atlantic Steel Site
Atlanta,Georgia
Client:CRB Realty Associates
For CRB Realty Associates, one of the two partners spearheading the redevelopment of the Atlantic
Steel site adjacent to downtown Atlanta, ERA prepared a plan for a tax increment finance district
needed to finance the necessary environmental remediation and infrastructure improvements for the
project. Atlantic Steel is a 140-acre, former steel mill located in Midtown Atlanta that has been
programmed for over 10 million square feet of office, retail, hotel, and residential development. At
the time of the research, the proposed TIF was only the second such district created in Georgia, and
the first created for a stand-alone development. As part of the TIF plan,ERA also undertook analyses
of the development's economic and fiscal benefits, as well as a review of nationwide best practices in
tax allocation/tax-increment financing. This project is now well under way, with over 5 million
square feet of space built.
http://www.atlanticstation.com/
Narragansett Landing Redevelopment Strategy
Providence,Rhode Island
Client:City Of Providence
ERA was engaged as part of a larger consultant team to examine redevelopment opportunities for
Narragansett Landing, a 500+ acre tract of land on the Providence waterfront which has historically
been used for a range of industrial, petrochemical, and bulk storage, and other harbor-oriented uses.
The ERA role was to develop market-driven redevelopment opportunities for the target area that will
create new higher wage employment and expand the local tax base. In the project, ERA identified
several market opportunities to support redevelopment, focusing primarily on recent growth of the
technology based economy in the Boston area,only 45 miles away from Providence. ERA noted how
the support of a research university (MIT in this case) has led to the formation of new businesses in
high technology fields, including biomedical research and software development. The research effort
has also noted the importance of proactive public policy, specifically in economic development, to
enhance redevelopment opportunities. The study highlighted long-term opportunities and vision for
the large assemblage of land, while dealing with on-going issues with port consolidation and
considerable brownfields remediation requirements. Although the study is about five years old, it
continues to serve as a key visioning document for how the waterfront area will evolve in the future.
Economics Research Associates Page 13
ERA
Additional ERA References
Alan DeLisle
Director of Economic& Employment Development
City of Durham
101 City Hall Plaza
919.560.4965
Village of Tinley Park
Scott Niehaus
Village Manager,
City of Tinley Park
708.444.5000
City of Evanston Cinema Analysis
Judy Aiello,Assistant City Manager
847.866.2936
Mallinckrodt College Adaptive Reuse
Michael Earl,
City Manager,Village of Wilmette
847.853.7501
Economics Research Associates Page 14
ERA
Resumes
Christopher Brewer, Principal
Mr. Brewer has more than 10 years of experience in the economic analysis of real estate and land use
issues. His consulting practice focuses on economic and feasibility analysis, strategic planning, and
economic planning services for developers, public agencies, financial institutions, and universities.
Recent project experience has focused on market and financial assessments for traditional
neighborhood developments, town centers, hotels, and related urban real estate categories. Recent
retail and commercial assignments include:
• For the Town of Ankeny, a market and financial assessment for the 1,000-acre Prairie Trails
Master Plan,noting demand potentials for a town center, as well as overall financial performance
of the planned traditional neighborhood development.
• A market assessment for an approximately 1,200-acre assemblage of public and private property
in the City of Lakeland, called Lakeland Green. Analysis efforts included evaluation of
residential,retail,office,and hotel demand,absorption,and market potential.
• For the Alabama Department of Mental Health / Mental Retardation, Mr. Brewer evaluated
highest and best use options for over 5,000 acres of property in Birmingham, Tuscaloosa, and
Mobile. The assessment was linked to efforts by the state agency to better manage their
resources.
• For the City of Providence, Rhode Island, Mr. Brewer conducted a market and financial
assessment to examine commercial and residential redevelopment opportunities for Narragansett
Landing, a 500+ acre tract of land on the waterfront which has historically been used for a range
of industrial,petrochemical and other industrial harbor-oriented uses.
• For Hendrix College, located in Conway Arkansas, the market and financial feasibility of an
ambitious, mixed-use development program for a 129-acre site adjacent to the existing campus
was evaluated. The approach included evaluation of the likely market support for the proposed
uses and to recommend pricing to optimize absorption and create long-term value for the
developer and the college.
• For the University of Oklahoma Foundation, highest and best use options for University North
Park, a roughly 500-acre parcel in Norman, Oklahoma were evaluated. The approach included a
full assessment of local retail / entertainment, residential, office, and industrial real estate
markets, and considered specific implications of revitalization efforts in downtown Oklahoma
City and in Norman.
• For the City of Sun Prairie, Wisconsin,the fiscal and economic benefits and costs associated with
a 1000+ acre development around a new highway interchange was explored. The approach
emphasized the impact of retail development, as well as new urbanist style residential
development.
Mr. Brewer received a Bachelor of Arts in International Relations, Economic Development, and
Political Science at Drake University (1991). Graduate studies at the University of New Hampshire
(1993) led to a Master of Science in Environmental Economics, Impact Assessment and Natural
Resource Monitoring. Prior to joining ERA, Mr. Brewer worked for Thome Consultants, a
Washington,D.C.based real estate consulting firm.
Economics Research Associates Page 15
t �
ERA
Christian Vetter, Senior Associate
Mr. Vetter is a Senior Associate in ERA's Chicago office. Since joining ERA in July 2003, Mr.
Vetter has completed assignments in the area of economic and fiscal impact, real estate market
analysis, downtown revitalization, transportation, brownfield redevelopment, recreation and tourism,
utilizing and analyzing a variety of data sources and socio-economic and demographic indices.
Recent projects include:
CUNA Mutual Group, Madison,Wisconsin - Developer Solicitation
ERA was retained by CUNA Mutual Group to find a joint venture partner to develop a 63-acre
mixed-use site adjacent to the U.W. Research Park and Oakwood Village West Retirement and
Health Care Community on the west side of Madison. Mr. Vetter's tasks in this process included the
preparation of the RFP Book, identification of RFP recipients, the RFP distribution and assistance to
submitters, evaluation of developer submittals, as well as attending meetings and interviews with the
finalists and assistance in choosing the final joint venture partner.
Plum Creek limber,Various Locations,Wisconsin- Highest and Best Use Assessment
ERA was retained by Plum Creek Timber Company to research market characteristics, and identify/
recommend future value driven land use options for multiple sites across Wisconsin. In the process,
Mr. Vetter assed demographic and migration trends, adjacent existing and proposed land uses,
recreational opportunities and amenities, tourism and visitation trends and analyzed the residential
primary and second home real estate market—demand, supply,housing types,prices, lot sizes.
State Source, LLC,Tulsa, Oklahoma- Lakefront Resort Development Concept
ERA was retained by State Source, L.L.C. for a lakefront residential and resort development. The
project site is located northeast of Tulsa, Oklahoma on Skiatook Lake. The mixed-use development
occupies 700 acres, including five miles of waterfront on Skiatook Lake. Mr. Vetter's assignment
included a market study for each of the development components to define initial priorities, functions,
appropriate market niches, and scale. Besides the residential development, the project includes
various proposed components, including conference facilities,a marina,a village with restaurants and
retail,a lodge with cottages, a championship golf course,and various recreational amenities.
YMCA, Des Moines, Iowa-Highest and Best Use Assessment
ERA was engaged by the YMCA Des Moines,to assess the highest and best use options for the reuse
of a 150,000-sf YMCA property located at the riverfront in downtown Des Moines. Given its
riverfront location and the recent increase in value through the ongoing downtown revitalization, Mr.
Vetter evaluated uses such as residential, office, hotel and potentially retail/entertainment in direct.
The evaluation approach included a demographic assessment of the Des Moines MSA, as well as the
analysis and assessment of the office, retail and entertainment, residential and hotel/conference
markets. The results were used to generate highest and best use and YMCA strategy conclusions
regarding a future redevelopment/use scenario for the site.
Education
Master's Degree
Master of Science Degree in Economic Geography,University Of Augsburg; Augsburg,Germany
Bachelor Degree
Economics,University Of Augsburg;Augsburg,Germany
Economics Research Associates Page 17