-
Austin School, 709 N. Clinton St., Albion
-
129 – 131 N. Superior St., Albion
-
3312 W. Michigan Ave., Battle Creek
-
625 Hamblin Ave., Battle Creek
-
950 N. Main St., Tekonsha
-
114 Bansill Dr., Bedford Twp.
Background
The Calhoun County Land Bank Authority (CCLBA) has commercial properties for purchase to rehabilitate. Part of our mission is to support business district revitalization through the management of distressed properties. Many of the buildings offered through the Transform This Commercial Property (TTCP) program are in need of significant rehabilitation; therefore, participation in this program will require a detailed rehabilitation plan, a business plan, a financial plan/pro-forma and will also require a project review by the Development Review Committee (DRC).
The CCLBA may initially market commercial sites through a formal Request for Proposal (RFP) process that will incorporate the TTCP program. This will allow all interested parties, e.g. the Applicant/Developer (“Applicant”), to submit a response under Phase 3 (see below) of this program to be reviewed by the DRC. The CCLBA’s realtor may assist with both the RFP and TTCP process. During the RFP period, the property will be made available for inspection by interested parties. If the CCLBA does not receive an acceptable response to the RFP, the property would then be listed with a realtor in the traditional manner and the participation in the TTCP program will still be required.
The goal of the TTCP program is to successfully redevelop distressed commercial and mixed used sites. Upon completion, the property returns not only to the tax roll, but also to productive use and becomes an asset to its neighborhood, community, and commercial district. This program is designed for those who want to purchase and restore the property for small business or mixed use development.
Process
Contact the CCLBA to find a Transform This Commercial Property.
Inspect the property
The Applicant is encouraged to bring professionals or others involved in the rehabilitation project to the property for the inspection and to develop their detailed rehab plan.
Make a general list of needed repairs
Please note that building code requirements may change based upon the end use; therefore, the list of repairs and improvements will likely need to be revised. The Applicant must prioritize the rehabilitation by giving priority to structural concerns and other repairs necessary to obtain a Certificate of Occupancy (e.g. roof or foundation, façade, mechanical systems).
Consider the cost
The Applicant should carefully consider the ability to afford the purchase of the property, the property taxes, any unknown or unanticipated conditions including environmental concerns, and the cost to complete rehabilitation, as well as the strength of the business plan. These considerations are the key to project approval; and must be considered carefully by the Applicant. Utilize the cost estimate checklist included with the application materials as a tool in determining the financial commitment. Applicant should contact the local assessor to get an estimate on future property tax responsibility. Be prepared to show the resources you have to meet the cost of the project, this includes confirmation of financing; see phases 3 and 4.
Option 1: RFP Process
Follow the process described in the published RFP for any properties offered under the bid process to obtain access to the property for inspection and to clarify information about the property. Because all properties are different, the CCLBA will specifically tailor the inspection and Q&A sections of the RFP to ensure that potential bidders can obtain the necessary information prior to submitting a proposal under Phase 3. Please note that in this process, the Application Worksheet becomes part of the submission for the RFP process.
Option 2: Traditional Listing
Follow the process described in the published RFP for any properties offered under the bid process to obtain access to the property for inspection and to clarify information about the property. Because all properties are different, the CCLBA will specifically tailor the inspection and Q&A sections of the RFP to ensure that potential bidders can obtain the necessary information prior to submitting a proposal under Phase 3. Please note that in this process, the Application Worksheet becomes part of the submission for the RFP process.
Prior to the meeting, you will need to provide completed TTCP Application Worksheet for review by CCLBA staff and municipal staff that will attend the meeting (15 copies). In addition, you should be ready to discuss preliminary information about the following:
- Identify developers and generally discuss past project experience, including projects similar in scale to the proposed project, and familiarity with incentives and environmental work.
- Identify professionals that may be involved in the project, including architects, engineers, environmental consultants and/or contractors.
- Discuss preliminary development proposal and scope of work, including type of project and proposed use (e.g mixed use, residential, commercial), financing, and project timeline.
- Discuss proposed business plan.
Next Steps
If the applicant is encouraged to move forward through via either pathway (traditional or RFP), they must create a Preliminary Development Proposal as discussed in Phase 3 below. Prior to the next meeting or review, Applicant should submit all forms and preliminary plans including a rehabilitation plan (for all phases of the project); a business plan; a project timeline; a financial plan; and all additional supporting materials as described in Phase 3.
Submit a preliminary development proposal for review and comment by CCLBA staff and the DRC; to be considered complete, proposal shall address all of the items listed below. There will be a 15 day review period for all proposals submitted for sites that are listed traditionally and a 20 day review period for submissions filed under an RFP process.
The CCLBA will engage the DRC to provide a preliminary review of and comment on the scope of the project and other information. It may also choose to discuss the project with representatives from the municipality (e.g. planning department, municipal manager, building inspector) in which the property is located. The CCLBA reserves the right to ask Applicant to make a presentation to the DRC explaining their project when determining which project will move on to Phase 4. The CCLBA will provide a written response to Applicant after the review that either encourages the Applicant to move forward in the process or expresses the CCLBA’s decision to forego the project. The following tools will be used to evaluate submissions submitted under Phase 3.
- Development Review Committee (DRC). The DRC will consist of representatives from the CCLBA, the local unit of government, the economic development agency, and, when appropriate, a representative of the banking industry or other specialists. The CCLBA works closely with cities, townships and villages on community planning as well as economic development and this process will help the CCLBA support local goals. The CCLBA will engage a DRC for commercial projects, unless it is deemed unnecessary by the CCLBA.
The DRC will provide input on development proposals and assist with the review process. When evaluating proposals, the DRC will consider the scope and sustainability of the project, quality of the business plan, the Applicant’s experience, whether the project diversifies the products/services offered in the area, and how the project supports local goals/plans. All proposals will be evaluated and scored. A minimum of sixty points (out of a possible one hundred points) is required for further consideration.
- Preliminary Evaluation and Scoring. All proposals submitted will be preliminarily evaluated as follows. A minimum score of 60 points or more is required for further consideration. For projects with more than one Applicant, the Applicant that scores the highest will move forward in the process.
- Completeness of application – 5 points
- Quality of Business Plan or Rehabilitation Pro-forma – 35 points
- Capacity for project – 35
- Diversification of Service/Product – 15 points
- Local government recommendations – 10 points
Necessary components of a preliminary development proposal: All of the proposal components are listed on the following page. Please note that ONLY Preliminary Development Proposals that include ALL of components listed will be reviewed by CCLBA staff.
Next Steps
A decision will be made regarding submissions by CCLBA staff and the DRC, and will be evaluated under the scoring matrix listed above. The CCLBA will provide a written response to Applicant after the review that either encourages the Applicant to move forward in the process or expresses the CCLBA’s decision to forego the project. All decisions of CCLBA will be considered final. Applicant is allowed to reapply with a revised scope of work for the project or for another property.
Components of Proposal
- Table of Contents: Include a list of all sections and appendices in the application and indicate corresponding page numbers.
- Executive Summary: One page (maximum) summary of the plan.
- Identify & Describe the Applicant/Developer: Include corporate or business name, address, phone number, email address, and name of primary contact.
- Identify Each Person or Entity Involved in the Project Team: Include bios and information on past projects.
- Developer or development partners
- Architects or engineers
- Environmental consulting firm
- Building tenants
- Proposed ownership structure
- Property management team
- Preliminary Rehab Plan & Financial Information:
- Preliminary construction budget with anticipated financial sources.
- Preliminary operating budget for proposed business.
- Proposed improvements.
- Proposed square footage breakdown of proposed uses/types of uses.
- If residential, please include number of rentals. If commercial, please indicate the number of proposed jobs that will be created from the end use. If a phased approach is proposed, indicate what will trigger executing subsequent phase and provide preliminary timeline for phasing.
- Proposed timeline for the project.
- Attached is a Project Cost Estimate Worksheet and a Project Timeline Worksheet, both can be used to assist with this section.
- Provide a Site Concept Plan: Describe the sites needed and sites secured. If private sites are included in the plan, letters demonstrating site control or ability to obtain site control over private parcels is required.
- Demonstration of Financial Capacity: Include the developer’s ability to finance the development and to obtain financing or grants. If seeking grants or incentives, please demonstrate past success with accessing grant funds and familiarity with the process.
- Developer’s Relevant Experience: Include developer’s experience for up to five recent projects. Projects should illustrate experience with construction projects similar in scope and size to the proposed projects. Photos and references are encouraged.
- Business Plan: Using the Business Plan Worksheet as a guide, create a plan for commercial, mixed use, or multi-family residential housing project.
- Financial Plan: Demonstrate how the project will be financed and documentation to verify financial capacity to complete the plan.
- Property List: List (with address and parcel ID) of all property owned in the State of Michigan by Applicant, or any legal entity that will have an ownership interest in the project. This should include properties under trusts, and those that are jointly or partially owned by Applicant. Include property tax status and violation info if any.
- Proposed Purchase Price: The CCLBA reserves the right negotiate final purchase price, if appropriate, and to select the proposal that best meets their objectives.
Applicant will be responsible for the following and has 60 days in which to complete the work:
- Secure an option to purchase the property by placing a non-refundable deposit with CCLBA for the property. The deposit will be $2,500 or 15% of the purchase price, whichever is greater, which will be held in an escrow account. The deposit will be applied to the purchase price for the property at a closing when the project comes to fruition. However, if the project does not come to fruition, the deposit will be retained to cover legal and administrative costs.
- Hire a professional engineer at their own expense to complete a formal code review of the building to ensure that it is suitable for the proposed project.
- Seek input from the municipal economic development agency, building and code officials, fire marshal, the planning and zoning agency, and any other party that might need to review proposals for compliance.
- Hire an environmental consultant at their own expense to conduct a Phase I environmental review. In some cases assistance for brownfield planning for environmental and non-environmental issues may be available, and would be discussed during Phase 4. The following is a brief summary of the environmental information:
- Commercial and industrial property may be contaminated, and buyers should protect themselves by conducting the appropriate environmental inquiries. Applicant shall be responsible for conducting All Appropriate Inquiries (AAI) to identify any environmental concerns and to receive liability protection.
The term “All Appropriate Inquiries” refers to three different stages of the environmental investigation process: the Phase I, Phase II and Baseline Environmental Assessment (BEA). The Phase I is a history review of the site, is only good for six months, is to determine if there are any “Recognized Environmental Conditions” (RECs) and whether further investigation is recommended. The Phase II involves additional testing and taking of samples to address recognized environmental conditions and determine if the property is considered a facility. The BEA is the most extensive study and is necessary if the property is considered a facility. A Due Care Plan may also be required. Applicant is strongly encouraged to engage an environmental consulting firm to coordinate the completion of the environmental due diligence process in a timely manner.
THE CCLBA WILL NOT ACCEPT ANY LIABILITY FOR THE ENVIRONMENTAL CONDITION OF THE PROPERTY
Revise the Preliminary Proposal submitted under Phase 3 to reflect new information found under during Phase 4 above so that the Applicant now has a Formal Development Proposal, which includes all information collected to date.
CCLBA Will Be Responsible for the Following:
- Execute an option to purchase the property in favor of the Applicant.
- Review the Formal Code Review results and provide any necessary comments within 7 business days.
- Review the Formal Development Proposal and provide preliminary comments within 15 business days prior to scheduling a formal review of the project with the DRC.
- Schedule a review of the Formal Development Proposal with the DRC within 20 days of receiving the proposal.
The Formal Review
The DRC may ask for clarification or additional information based on the review process and project scope. When necessary, the DRC may seek outside opinions to clarify the potential success of Applicant’s plan. CCLBA staff will serve as a liaison between the DRC and the Applicant as needed.
When providing a final recommendation, the DRC will consider the scope and sustainability of the project, quality of the business plan, the developer’s experience, whether the project diversifies the products/services offered in the area, and how the project supports local goals/plans.
During the final phase, the CCLBA and Applicant will finalize the purchase agreement and development agreement and will use input from the phases above, and from the DRC, to set appropriate benchmarks. The intent of the Purchase Agreement is to clarify what happens prior to the transfer of the property, and the intent of the Development Agreement is to clearly outline the necessary steps for completing the development. The Purchase Agreement and Development Agreement will be prepared by CCLBA and, aside from the specific deal terms, are not subject to negotiation.
- Sign a Purchase Agreement with the CCLBA. The approved Transform This Commercial Property application and materials will be incorporated into the purchase agreement. Documentation may periodically be requested to verify the progress such as receipts for services, materials or permits or other related items.
- Sign a Development Agreement with the CCLBA. The approved Transform This Commercial Property application and materials will be incorporated into the development agreement. Documentation may periodically be requested to verify the progress such as inspections, receipts for services, materials or permits or other related items.
- Meet all Necessary Requirements of the Purchase Agreement to proceed to the following steps:
- Schedule a Closing where the Applicant / Buyer will pay the purchase price and all closing costs, including but not limited to, Buyer’s share of pro-rated property taxes (when applicable), lender closing costs, recording fees, title closing costs and title insurance.
- Transfer of Property is a two-fold arrangement. First the Buyer, will receive a Warranty Deed (with clear title). Second, the Buyer will sign a Re-Conveyance Deed, which is further defined below. The Re-Conveyance Deed will be held by CCLBA.
- Compliance monitoring during the life of the Development Agreement will take place on a bi-monthly basis. Applicant will be responsible for filing bi-monthly reports with the CCLBA to demonstrate both compliance and progress. In cases of unforeseen circumstances, the CCLBA, with input from the DRC, may grant extensions so long as there is significant progress on the project. All extensions will be requested and approved in writing. Requests for multiple extensions may require support from the CCLBA Board if requested over an extended period time.
Upon receipt of the Final Inspection and/or Certificate of Occupancy by the CCLBA or completion of the specified benchmark included in the Development Agreement, the project will be considered complete. At this time the Re-Conveyance Deed will be destroyed and full ownership and interest will be solely held by the Buyer.
The CCLBA expects the Buyer to work toward project completion as outlined in the Purchase Agreement and the Development Agreement, and will work to support the Buyer as needed. Legitimate setbacks in completing the project will be taken into consideration on a case by case basis. If necessary, the Buyer may request an extension in writing; the CCLBA reserves the right to request additional information and supporting documentation before consideration of the request. In the event that the Buyer fails to meet the requirements of the program and contract (for example – misses project completion deadline or fails to pass a Final Inspection), and no agreement can be reached by the parties as determined solely by CCLBA, the CCLBA may elect to record the Re-Conveyance Deed. Upon recording the Re-Conveyance Deed, title to the property reverts back to the CCLBA and the Buyer forfeits the physical property and the improvements thereon as well as the purchase price, closing costs and the investments made in the property.