REQUEST FOR PROPOSALS Bond Underwriting Services Denver Urban Renewal Authority 9 th and Colorado TIF Broadway Station TIF Proposals Due February 24, 2017 Responses must be prepared according to this Request for Proposals and delivered by electronic mail only both to: Robbin Eldredge DURA reldredge@renewdenver.org and Jeff White Columbia Capital Management, LLC jwhite@columbiacapital.com
I. Background and Overview The Denver Urban Renewal Authority (DURA) was created by the City and County of Denver in 1958 to assist in the redevelopment of blighted property and help foster the sound growth and development of Denver. Working with residents, businesses, civic leaders, area developers, and financing institutions, DURA provides financial assistance to support redevelopment activities throughout the city. These include single-family home rehabilitation, emergency home repair, historic preservation, brownfield redevelopment, infill development, and neighborhood revitalization. DURA manages two tax-increment financing (TIF) projects where development has now progressed or is expected to progress in the near future to the point where the developers of each project will be entitled to request that DURA issue TIF bonds benefiting their projects. Both the 9 th and Colorado and Broadway Station projects are described below. Communication with any member of the DURA s Board members or any employees or representatives of DURA (except as provided herein) during the response and evaluation period concerning any matter related to this Request for Proposals is grounds for immediate disqualification. 2. RFP Purpose Through this RFP, DURA desires to appoint one or more lead managing underwriters for the financings. Respondents may respond to serve as underwriter on one or both projects. DURA s past practice has been to assign and to continue to use underwriters assigned to individual projects over each project s life cycle (so long as the underwriter s performance is high-quality). As such, either of the projects covered by this RFP could result in multiple financings over time. 3. The Projects 9 th AND COLORADO The 9 th and Colorado site was the former home of the University of Colorado Health Sciences Center. Redeveloper, Continuum Partners, is actively developing a $400 million mixed-use project, demolishing nearly all of the existing buildings on the site. In 2015 DURA staff began working with the redeveloper on a plan to include approximately: 1,000 residential units 250,000 square feet of retail, restaurant and theater space 80,000 square feet of office space 1,900 parking spaces DURA anticipates the TIF entitlement on the project will be approximately $50 million and that the required improvements will be facilitated through a combination of both TIF bonds issued by DURA and metropolitan district financing. BROADWAY STATION In 2014, the redeveloper (Broadway Station Partners LLC) acquired a majority of the undeveloped parcels within the former Gates Rubber Factor site (the Site) and began DURA (1) RFP: Underwriting Services (2017)
working with the City, RTD and DURA to redevelop the Site. The Site requires approximately $160 million of infrastructure improvements in order to prepare it for vertical development and make it accessible to residents, tenants, transit riders and the general public. In March 2016 DURA staff began working with the redeveloper and the City to establish a plan for redevelopment including approximately: 2,800 residential units 250,000 square feet of retail, flex and co-work space 1,300,000 square feet of office space 6,500 parking spaces DURA anticipates the TIF entitlement on the project will be approximately $120 million and that the required improvements will be facilitated through a combination of both TIF bonds issued by DURA and metropolitan district financing. This RFP covers TIF bonds only. 4. Work Description Any underwriter selected as part of this RFP would be responsible for services including but not limited to: Participating in the development of a calendar of events for the financing. Developing cashflow and debt payment models for the analysis of financing alternatives and preparation of appropriate cashflow schedules based upon the debt structure selected by DURA. Developing and presenting information to: DURA staff and board, DURA s advisors; rating agencies and bond insurers (if any); and, any other appropriate parties. Working closely with and assisting other transaction professionals, including bond counsel, disclosure counsel, financial advisor, and DURA staff in the preparation of documentation for the bonds. Undertaking detailed review of a preliminary official statement and official statement for the transaction and any other documentation necessary to market the bonds. Developing a marketing plan for the sale of the bonds and undertaking primary responsibility for implementing the marketing plan proposed with the approval of DURA. No later than three business days prior to pricing, providing to DURA s financial advisor pre-pricing scales and transaction comparables to support its proposed pricing scale. DURA (2) RFP: Underwriting Services (2017)
Marketing and selling the bonds with quality execution according to the expectations developed during pre-pricing discussions with DURA and its financial advisor. As a part of this process, DURA may require the underwriter to use the Ipreo order platform, or a similar electronic order platform, to maintain its book of orders and to provide real-time access to the full order information, including order details for each maturity, to DURA and its financial advisor. Assisting DURA, its advisors and counsel in any other matters related to the issuance and sale of the bonds as may be necessary to accomplish any of the foregoing or completing the marketing, sale, issuance and delivery of the bonds. Preparing a closing memorandum and closing the transaction on time in accordance with the bond purchase agreement. Preparing and delivering DURA a post-pricing analysis for the transaction. This analysis shall include an electronic version of raw order entry data compatible with Microsoft Excel in a format acceptable to DURA. 5. Basis of Evaluation DURA will review timely and responsive proposals on behalf of DURA. Proposals will be evaluated based on the following criteria: A. Quality of the responses to questions; B. Recent experience with comparable issuers and credits; C. Recommendations and approach to structuring and marketing the bonds; C. Underwriting compensation as quoted in the RFP responses. DURA reserves the right to: A. Interview or request additional information from any firm prior to its selection; or B. Consider information about any firm from other sources in addition to information submitted by the firm. Succinctness in presentation is appreciated. If additional information is necessary to interpret the requirements of this RFP, please direct your questions in writing to Robbin Eldredge at reldredge@renewdenver.org and Jeff White at jwhite@columbiacapital.com. Questions are due no later than February 17, 2017. DURA expects to provide responses to questions received not later than February 21, 2017. No telephone inquiries are permitted. All questions (less identification of the requestor) that have a material impact on the interpretation of the RFP and DURA s response to the request will be shared with all firms receiving the RFP. Communication with any member of DURA s staff or board during the response and evaluation period concerning any matter related to this Request for Proposals (except as provided herein) is grounds for immediate disqualification. DURA (3) RFP: Underwriting Services (2017)
6. Format of Proposals All responses to this RFP must follow substantially the outline presented below. Responses should be delivered electronically in Adobe PDF (or equivalent) format. A. Team Information. Provide a description of the team your firm will assign to execute this transaction. Specifically identify the bankers who will have day-to-day contact with DURA, its advisors and counsel. Please provide short bios for the day-to-day engagement leads, including the location of their primary office. B. Related Experience. Please describe your team and your firm s experience underwriting TIF bonds and bonds for metropolitan districts, particularly for large, complex mixed-use developments where the underlying projects are not completed or stabilized (i.e., have construction and leaseup risk remaining) and are very likely non-investment grade. Where possible, please provide this information in case study format, detailing your team s and your firm s role in bringing the transaction to successful conclusion. C. Market and Marketing Considerations. Please describe in depth your firm s perspective on the market for unrated development debt. What are the specific marketing considerations DURA and the developers should contemplate regarding these financings? Assuming some construction and lease-up risk will remain and assuming the bonds will not be able to attain an investment grade rating, please describe likely covenants, restrictions, prerequisites or other matters that would likely accompany such a financing in order to make it attractive to investors. D. Potential Conflicts of Interest. Please disclose and describe any potential conflicts of interest that might arise through your work on one or both of these financings. E. Underwriters Counsel. If an OS is required, DURA plans to engage disclosure counsel for this transaction to prepare the offering document and bond purchase agreement. Please indicate whether your firm will require the use of underwriters counsel and identify up to three firms acceptable to serve as underwriters counsel and provide a fee proposal for each. F. Fee Quotation. Please provide a firm quotation for all underwriting fees related to the execution of a capital markets financing or financings for the projects. Please note that the cost of underwriters counsel must be included in this quotation. DURA (4) RFP: Underwriting Services (2017)
FIXED RATE BONDS Sr. Manager with comanagers Maximum Designation 70% Average Takedown $ per $1,000 Plus Any Compensation Retained by Senior Manager(s) Only (e.g., structuring/management fee) Plus Expected Fees (including underwriters counsel; provide separate detail) $ per $1,000 $ per $1,000 Please feel free to adapt the fee grid for alternative proposals that do not fit into the format shown. 7. Governing Provisions and Limitations Violation of any of the following provisions may cause a proposal to be rejected. A. The purpose of the RFP is to ensure maximum, open, free competition in the solicitation of and procurement of services. This RFP is not to be construed as a purchase agreement or contract or as a commitment of any kind; nor does it obligate DURA to award any contract or to pay for costs incurred prior to the execution of a formal contract unless DURA specifically authorizes such costs in writing. B. DURA values diversity and encourages responses from qualified SBE, MBE and WBE firms. It is the policy of DURA to encourage and support equal opportunity in the purchase of goods and services. DURA shall comply with all Equal Opportunity requirements in the procurement of all goods and services. C. DURA reserves the right to accept or reject any or all proposals received, or to cancel or reissue this RFP in part or its entirety. D. DURA reserves the right to award a contract for any services or groups of services solicited via the RFP in any quantity DURA determines is in its best interest. It further reserves the right to make no award as a result of this solicitation for any services or group of services if in DURA s best interest. E. DURA reserves the right to correct any error(s) and/or make any changes to this solicitation as deemed necessary. DURA will provide notifications of such changes to all proposers recorded in the DURA office record (Distribution Log & Receipts Record) as having received or requested an RFP. F. DURA reserves the right to negotiate the final terms of any contract awarded as a result of this solicitation with the proposer selected and any such terms negotiated as a result of this RFP may be renegotiated and/or amended to successfully meet the needs of DURA. G. DURA reserves the right to contact any individual or entity listed in the proposal that may have knowledge of the proposer s experience, performance and qualifications. DURA (5) RFP: Underwriting Services (2017)
H. Proposers shall not offer or provide any gratuities, favors or anything of monetary value to any officer, member, employee or agent of DURA for the purpose of having an influencing effect toward their own proposal or any other proposal submitted hereunder. In addition, no employee, commissioner, officer, or agency of DURA shall participate in the selection, award or administration of contract supported by DURA funds if a conflict of interest, real or apparent, would be involved. I. Proposers shall not engage in any activity that is intended to restrict or eliminate competition. Violation of this provision may cause a proposal to be rejected. This does not preclude joint ventures. J. The contents of a successful proposal may become a contractual obligation if selected for award. Failure of the proposer to accept this obligation may result in cancellation of the award. No plea of error or mistake shall be available to successful proposer as a basis for release of proposed services at stated price/cost. K. DURA reserves the right to request clarification or, explanation for, or verify any aspect of a response to this RFP, and to require the submission of any price, technical, or other revision to the RFP that results from negotiations conducted. L. DURA reserves the right to award to other than the lowest cost proposer. M. DURA reserves the right to award without discussion. N. DURA reserves the right to reject any proposal that fails to conform to the requirements of this RFP. O. DURA reserves the right to extend, shorten, increase or decrease any contract awarded as a result of this RFP. 8. Delivery of Proposals All responses to this RFP must be delivered via electronic mail no later than February 24, 2017, at 1:00 P.M. Denver Time. Proposals should be delivered to: Robbin Eldredge DURA reldredge@renewdenver.org and Jeff White Columbia Capital Management, LLC jwhite@columbiacapital.com DURA (6) RFP: Underwriting Services (2017)