WORCESTER REDEVELOPMENT AUTHORITY Friday, January 15, 2021 9:00 A.M
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Worcester RedevelopmentReview Authority Vincent A. Pedone Peter Dunn Chairman Chief Executive Officer WORCESTER REDEVELOPMENT AUTHORITY Friday, January 15, 2021 9:00 A.M. City Hall, Levi Lincoln Chamber Worcester, MA 01608 Present: Worcester Redevelopment Authority Board Vincent Pedone, Chair David Minasian, Vice Chair Jennifer Gaskin Staff Peter Dunn, Chief Development Officer Michael Traynor, City Solicitor Jennifer Beaton, Deputy City Solicitor Timothy McGourthy, Chief Financial Officer Alexis Delgado, WRA Finance Manager John Odell, Energy & Asset Management Jane Bresnahan, Office of Economic Development Amanda Cornwall, Office of Economic Development Greg Ormsby, Office of Economic Development Robert Stearns, City Auditor Pursuant to a notice given (attached), a meeting of the Worcester Redevelopment Authority was held at 9:00 A.M. on Friday, January 15, 2021 Chair Pedone announced that all votes will be roll call. 1. Call to Order Mr. Dunn called the meeting to order at 9:05 A.M. 2. Roll Call Mr. Dunn called the roll – Mr. Pedone, Mr. Minasian, Ms. Gaskin 3. Approval of Minutes: December 11, 2020 Chair Pedone asked for a motion to approve the minutes. Mr. Minasian made a motion to approve the minutes, Ms. Gaskins seconded the motion. The minutes were approved 3-0 on a roll call. New Business – Amendment #4 to the Owner-CM Agreement with Gilbane-Hunt Joint Venture for a total contract value of $134,779,035, inclusive of the Polar Park Guaranteed Maximum Price (GMP) and Parking Garage. Chair Pedone requested Mr. Dunn to describe the items on the agenda and that Mr. Angelini and Mr. Tilton are not able to vote on the items due to conflict of interest. Mr. Dunn advised there is a quorum with Chair Pedone, Ms. Gaskin and Mr. Minasian the other two Board members Mr. Tilton and Mr. Angelini have conflict of interest with Ballpark items, the entire agenda is related to Ballpark items. Mr. Dunn referenced Amendment #4 to the Owner-CM Agreement with Gilbane-Hunt Joint Venture carrying out the construction of the Ballpark. This item was on the City Council Agenda on January 12, 2021 as an update to the overall construction costs of the Ballpark which included a loan order related to the financing of this contract amendment. The City Council on January 12, 2021 voted to advertise the loan order and will hold a meeting with the Economic Development Subcommittee of the City Council taking place on Tuesday, January 19, 2021. After the ED Subcommittee meeting, the item would return to City Council for the final vote on the loan order; if approved it would be accepted on Tuesday, January 26, 2021. The item also includes the agreement between the Joint Venture Gilbane-Hunt and the Worcester Redevelopment Authority and requires a vote of the Board to authorize the execution of that Amendment. If the vote were to be passed this morning the contract would not be signed until the funding authorization and the loan order goes through the City Council process because the financing is what’s needed to sign off on the Amendment. In terms of the dollar amount, the value of this contract with the Joint Venture will be $134,779,035. The contract with Gilbane-Hunt includes both Ballpark construction and non-Ballpark construction. The majority of the Amendment is for Ballpark construction but it is noted that there is additional detail in the supporting documentation that includes other funding authorizations to date for the non-Ballpark items including the parking garage and some other City related costs. Some folks may have seen the Ballpark costs stated at $117 million that is related to the shared costs of the City with the Team. The other overall costs for site preparations and site work that was City costs above and beyond the Ballpark itself is in excess of $117 million but the figure of $117 million is the ground up figure of construction that includes financial participation of the Worcester Red Sox. In the attachment there is an outline from the Joint Venture in terms of how the $134,779,035 is calculated and shows the $104.5 Million for the Ballpark construction under their contract. This is an explanation of the item. Ms. Gaskin requested a point of clarification for the public would you explain how the City is going to be reimbursed for the funds that are being allocated to the Ballpark project? Mr. Dunn replied as indicated in the City Council item, the current cost of the Ballpark is about $17 Million over what was the previous cost estimate, which was a year ago. That $17 Million is the responsibility of the Worcester Red Sox and was called for in the agreements to this date. Their financing plan for the $17 Million is two-fold, including additional equity contribution from the Team as well as municipal borrowing on their behalf which is the loan order pending before City Council. The total amount of that loan order is $14 Million and includes the net proceeds that would go to the cost overruns as well as the cost of issuance and capitalized interest. The Team is fully responsible for paying the debt service on that additional borrowing. That is captured through their lease payments. We have provided as a supplement and related to another item on the agenda, the final lease agreement between the Worcester Redevelopment Authority and Worcester Red Sox. Chair Pedone asked the members and Mr. Dunn to take the agenda items collectively to explain to the public how we are moving forward and what that means for the tax payers. Chair Pedone stated if there are no objections from the Board for legal issues and taking the rest of the items prior to the votes, so that there is a cohesive conversation of what is taking place on the agenda and after that, take individual motions on each item. Mr. Minasian agreed as we will be receiving a narrative of each item and discussion. Chair Pedone inquired of Mr. Traynor is there anything we need to be aware of from a legal perspective? Mr. Traynor advised the Board that it is fine to discuss items collectively and take the individual votes. Chair Pedone asked Mr. Dunn to discuss the remaining items for overruns. Mr. Dunn provided a brief discussion of Amendment #4 which is inclusive of the Guaranteed Maximum Price for Polar Park as well as authorized funding to date on non- Ballpark items and will continue in the same discussion. Mr. Dunn advised the Board that he received an email from a constituent about Item 2 regarding why we are doing a change order at the same time of the amendment for the Guaranteed Maximum Price document. He advised the GMP was done a few months ago and as we were working on additional negotiations and language relative to the contract amendment and language relative to that item there were additional changes and increases in costs through the project. At some point we had to freeze the Guaranteed Maximum Price as one cohesive document otherwise the document would continue to need updating – since the time of establishing the amount of Amendment #4, there’ve been $2,892,286 of approved changes, which is characterized as Change Order #1 to the Guaranteed Maximum Price. In addition, Item #3 on the Agenda is restated value for Amendment #9 for D’Agostino Izzo Quirk Architects, Inc. (DAIQ) the designer of the Ballpark. This was an item brought before the Board several months ago related to the cost of Amendment #9. At the time it was proposed for a not to exceed value of $998,060. As the project moved along we were able to reduce that number to $913,060. We wanted on the record that reduction as an agenda item for the restated value recognizing the final amount of the amendment with D’Agostino Izzo Quirk Architects, Inc. (DAIQ). Item #4 is the Lease Agreement, which was also provided to the City Council and attached as part of the packet. This is the final lease agreement between the Worcester Red Sox and the Worcester Redevelopment Authority. Up until now it has been letters of intent, starting with an initial letter of intent with a series of amendments that have progressed over the past two and a half years. This is the final draft lease agreement and requires a vote before execution with the Team. Items noted in the lease agreement relating to the city’s willingness to recommend the $14 Million loan order to the City Council. It includes extending the lease term; it was originally planned for thirty years and has changed to thirty-five years; it extended the covenant not to relocate from the original agreement with the Team, which was originally for fifteen years, and even then that would be only available to them if they paid off the remaining debt service obligations. That covenant not to relocate has been extended from fifteen years to twenty-five years. In addition it removes the City’s guarantee of corporate sponsorships for the first five years from 2021 to 2025. When the initial negotiations began with the Team they wanted to be sure that there was a level of corporate support for the sponsorships they need to be successful and the City provided a guarantee of that corporate support in an amount of $3 Million annually for the first five years until 2025. The corporate support has been very successful and exceeded their expectations for the first year. As a result of that and part of the negotiation we removed the City’s need to guarantee that level of corporate sponsorship for the first five years.