Travis County Commissioners Court
April 1, 2008
Item 9
9. Consider and take appropriate action regarding the need for real estate broker services for Travis County downtown redevelopment project. Do we have everybody that we need?
>>
>> [indiscernible]
>> okay. This was posted as a follow-up to our discussion last week about -- about needing broker services at some point. So we posted this to discuss when and what kind and how to proceed with it.
>> good morning, I知 belinda powell from the planning and budget office. You have a packet that came from the purchasing office as backup for this item. We have -- on the redevelopment committee has spent a number of weeks not only listening to the Commissioners court talk about downtown realms transactions but -- real estate transactions but also looking at how can we bring the need for an additional resource for this endeavor to match the planning effort that's going to go on. For the downtown area to the Commissioners court. And what was developed is really an extension. There are actually I think two very similar scopes of work attached that may need to be merged. But -- but became an initiative that we thought to support facilities management you would -- we would request that you would -- engage in broker services to monitor the downtown area and we defined that as -- as kind of the planning perimeter as the primary area that you have already set out and a secondary area which is usually called the area of influence around your properties that -- that this -- that this contract would also monitor activity. It would be the areas that you are most likely to need to lease space in. In the next, you know, two to five years while you are under construction downtown. So on attachment 3 you have a description of those areas. The proposal has been discussed as -- as -- to -- in order to provide the monitoring service and kind of document the -- the ownership information for the downtown. That -- that perhaps this -- not perhaps, but this would be an exclusive agreement. And that has value to that, so that would be part of your negotiating leverage moving forward. On the contract there is some question about how far the exclusivity should -- should be conveyed, whether it should only be in the primary planning area, or whether it should also include the secondary project area. I think that may be an issue for the negotiation process as you move forward. The other thing that was of concern, we did go out, purchasing and facilities went out for a pool broke rang services. Attachment -- brearj services, attachment 1 shows you that, August 22nd, 2005 when you went out to a brokerage pool. In looking at this we do believe there are some folks already within this pool that could be utilized for this particular project contract. One of the things that we did discuss would be to go out and solicit a little bit of additional information initially from the pool. If that's the route that you choose to take. I知 going to let marvin go ahead and talk about the procurement stuff.
>> good morning, judge, economics marvin brice with the purchasing office. As belinda said we do have a pool of brokerage firms, the court approved that contract in November of '05. We feel that there are a minimum of three firms within that pool that we think they are qualified to meet our requirements. As belinda said, we do have an attachment in your package with additional selection criteria. This additional information would be provided to those three firms. Gather that additional information, take a look at it, evaluate it and then determine the top ranked firm and bring that back to the court for permission to negotiate. Should the court so decide to go that route.
>> so would this give us the information that we need to -- to deal with the downtown folks? I mean the downtown issue?
>> it would set up a liaison for you for facilities management in looking at the -- at the downtown area. Kind of take a proactive approach on monitoring what's going on down here and bringing the properties to you. In a strategic fashion that matches what you'll be doing with your downtown planning process as opposed to kind of ad hoc process that you have now is when a property hits the market. This is to engage more proactively.
>> so my question is do we feel comfortable that this group, if we pick from this group, that they will give us -- someone will give us the information that we are looking for specifically on the downtown issue?
>> I think that we are in agreement that there are at least three firms within this pool that we should at least go through a solicitation to look at financial criteria that we added, but we believe that yes they are qualified and capable of providing that type of service.
>> specifically let me ask you a question. Commissioner Gomez first I知 sorry. Go ahead.
>> I was going to fry to try to follow up Commissioners, leslie strict land. Will these services give you answers to the downtown issues? These services will not tell you how to use these properties. They will just tell you what properties either are coming on the market for sale or if you request more proactive engagement by the -- by the broker, to -- to knock on doors and ask people are you interested in potentially coulding a transaction -- doing a trans southwest conference to look -- transaction to look for things in the wings to actually prod the market I suppose would be a way to say it. That won't tell you how those properties could fit into your master plan or how they might be used. That would still be work to be done in the needs analysis planning work by the consultant that we're working on the -- the old map and scope of services for.
>> but the -- I知 sorry, go ahead.
>> I guess my question was and is, I don't want to try to get ahead, I知 trying to run a parallel thinking process with what you are bringing forth. I do mean parallel. My concern is -- is -- as we have been talking about yet is the need. I知 trying -- looking at the need, finding out what we actually need downtown, I mean, who is going to be, who is going to leave, how we do this, how we do that, that need analysis that has not really come forth yet to the court. My question it would this be something ahead of the needs analysis, looking at properties that would be available. Would this be behind the need analysis as far as looking at the availability of these particular brokers that can maybe look at -- at the available properties to fit the need.
>> I think that -- one of the issues that we discussed as a group and one of the things that we have seen is that in looking at the downtown market, real estate moves at a different pace. And it's much -- it's moving much more quickly right now because of redevelopments going on in the downtown. The answer is really that it would be parallel with your needs analysis that you have going on right now. In order for you to be positioned appropriately at the time that you know that you want to acquire that you have some base information that the initial contacts have been made, and that you can strategically with this assistance from this service be able to target the acquisitions that you would like first. Because they also have to respond to -- to the market. So it really is in -- in parallel with -- with what you would be doing in establishing your need and your long-range plan. This doesn't presume that you are going to go out and buy something tomorrow. It is to position you in the market in your immediate area.
>> all right.
>> is what it is.
>> even if --
>> Commissioner.
>> even if it run parallel, what's available today? May not be available tomorrow. Based on -- if we are going to base our -- our premise on need, again what's available today may not be available tomorrow based on need. I知 still trying to make sure that the need and availability of property fit in the same shoe. That's what I知 trying to do here. Now, like I said, I don't want to get ahead of anything then to return a parallel course is something that I think we're trying to do. I think that's what you all mentioned. Again I知 trying to fit it in the same shoe whereby what's available fits the need and like I say property around here probably sells like hot cakes, there may be a downturn in the economy. I don't know really know what's going to happen the way the state of the economy is going right now. But at the end of the day I知 still trying to put that -- that need and -- in the same shoe with the availability of -- of the property. Okay. Anybody want to respond to that?
>> good morning, I知 roger el khoury, director of the facilities management department. Commissioner to answer your question on that. You are right on that first must come a need first.
>> speak up a little louder.
>> yeah. What we want first, you know, rather than -- second, it comes to find first what we need. But come from the need analysis we are tasked to do so. Then after that, you know, you will find a -- a place on -- based on the need you will find a piece of land or something then due a site analysis. This is a typical way of doing things. And this is the right way to do so from project management. During the parallel track, you know, in some area does not hurt. But I don't want to move toward, you know, push forward with other tasks, where the need hasn't been approved yet. What I知 trying to say is monitored -- monitoring the property around us, it's a good thing to know what's going on, you know, on that front. But what if you find something and you don't have any -- need analysis yet. What would you do at that time? Real estate is a -- is a dynamic. You have to jump on opportunity. You have to buy or you have to -- you have to move forward and get that property today not -- not next year. All that I知 trying to say here is I don't want to overlook the issue here until about -- about this wonderful project that we have in the redevelopment of downtown area. First let get ours in the right direction, get the needs analysis first, from there we can see what's going on.
>> okay.
>> and -- right here, to decide between -- if you decide that you need to have a broker, if you decide to -- we support either way. If you want to do it within the pool, we have brokers that are very -- very qualified to do so. I work with most of them. If you want folks that know exactly the downtown area brokers, big named brokers in the downtown area, that would be fine, too. All that I知 trying to say is we support getting the task of monitoring what's going on and the -- and the -- in downtown area. But I want to stress to you all, you know, what I知 saying about the parallel track that first has to come the needs analysis to know what we want what we're going to do. This is a very important step. I don't want to put things ahead of other things in the -- project management, convoluting the issues, go on the right track. Facility management really -- really would like to -- to go on a -- on a road map step by step process, you know, to make things happen and -- and we'll do it right.
>> and I would just like to -- to follow with one thing. The part of this is a suggestion that -- that specifically for your downtown campus, because you've already made some strategic decisions about what services will stay here, that you need to match your real estate philosophy to that same strategic objective. We wouldn't necessarily suggest this approach for every project. Or every particular site. Because some of those things we're talking about not having the ability right now to -- to master plan our downtown campus because you don't own significant pieces of what you might choose to own at a later date. This positions you with strategic information to begin to consider your acquisitions. You may find that something comes available that's in the secondary area, that it really is not your primary focus and you choose not to pursue that right now because your interest really needs to be focused in on your primary area. That is the strategic approach to real estate that we think that you need to be taking, p.b.o. Believes that you need to be taking with the downtown specifically. This doesn't necessarily translate to all of your real estate perspectives. But particularly for the downtown area we think that it is -- it should be looked at from a strategic perspective as well as from the project orientation perspective.
>> but that doesn't take into account the -- whoever these folks are, the brokers are. That does not take into account that we -- we already own property down here.
>> uh-huh.
>> where does is that come into the -- does that come into the mix as far as the property that we already own. It should, you know --, you know, we already own property down here. We may end up using it.
>> right.
>> all right. So -- so I知 -- that's -- and that may be sufficient to -- to -- to provide for our needs. That's still an unknown. That's why I知 having trouble a little bit. I own property, we don't look at it -- we are going to look at other --
>> I知 not suggest thank.
>> I知 not -- that.
>> I知 not saying that you were. It almost appeared that way. It's almost like taking a property that we own, putting it in the mix, the broker to retain them for additional properties that -- whereby the needs have been associated with the property that we do own. So that's where I知 having a little gray area.
>> may I suggest that -- hypothetical. We do own some property downtown. Some of it we are not currently -- we haven't currently program, a new acquisition for instance the rusk building. The value that I see in this expertise that we would be purchasing on spec basically, working on commission, is that there is a possibility out there that there are other properties within the primary or secondary acquisition area that we don't yet know about -- about that aren't on the market yet that could be bundled that may be preferably for instance to the rusk and the adjoining parking lot. And from a strategic perspective we might want to -- to purchase that and -- and sell something that we currently own but haven't yet programed. But we won't know unless we -- unless we get that kind of expertise. We don't have that kind of expertise in house because we don't need it all the time. And we won't need it after this reprogramming of the central business district. It's not something that we want to bring in house because we don't have the -- there's not utility in it being in house after -- after this -- after this effort.
>> susan?
>> you know, when we started talking about -- about needs, as you recall, it almost sounds like we don't know if we need more space. Oh, we know that we need more space. We just don't know how big that need is. We know we feed more than we have now or can be built on the property that we have now if you do not want to get the view corridor set aside. We know that because we hired broaddus to look at the properties that we have. We are called that -- we all agreed that mike
>> [indiscernible] from my office would do an analysis. He did a weighted average, a very sophisticated analysis of -- of the civil district courts. We bought a software package. Not only did he look at every kind of case, actions filed, backlog. Once he developed the model, he want back two years, ran the model to see if it predicted and it did. That's what we know as best you can estimate owe just for the civil district court and that's after tort reform. And that showed that we will need a total of 22 civil district courts. We know that. Now, you are going to hire someone else that's going to do that for the county courts at law. The j.p.'s, the probate court. The district courts. You want to do a comprehensive needs analysis. I absolutely agree with that. But -- but we are not sticking our neck out thinking that -- that we have enough property here to even start with the needs that we need. That's not even looking at this building which is absolutely full. The county attorney has come to me to see if they can put their servers in with the chief -- with the big financial system because they have no place to put lawyers that you have already approved. I have no space to bring people on to bring up the new financial system. So I don't think that you are taking a risk that the nervousness with real estate is that it doesn't operate like anything else. You can't have it when you want it. You kind of have to either be looking or -- or go without or condemn. Like for instance, it would be ideal if we owned this whole block. But we don't because other opportunities came up with two different properties on this block and we weren't actively looking and they moved on. I any the reason to get a realtor out there looking lookig first of all, it is a professional that understands the Austin real estate market. We don't have anyone on staff that knows that. They need to keep an ear out for what's going on, once something happens, this little building here was tore down and rebuilt that was no longer an option. It would have been a good option, it isn't anymore. We kind of have to keep looking. It may not be perfect, but the issue today really is -- in looking at first do you want
>> [indiscernible] but secondly which of the two processes do you think from a procurement viewpoint it is fair to use the people that we have -- that we have that we -- that we kind of went out for in 2005 if you think that's fair or -- or do you think that the nature of this project is different enough that you would prefer a new procurement process to look at all.
>> [one moment please for change in captioners]
>> it's where you want to go with the realtor. My advice, for what it's worth, is that we need to start looking at a professional realtor to look at these properties so that we know when they are available and can make a reasoned decision whether that fits in the plan. Mean while, this major needs assessment is going to go on and going to give you a whole lot of information. I知 guessing, just sitting where I sit, going to need a whole lot more space than you thought or we'd all like. And then you'll be working with trying to figure that out, how that the going to work out, where you want so-and-so. I don't think there's, I think there's more danger to wait for a broker rather than proceed down here. For what my opinion is worth.
>> susan, the reason this thing got brought back today is because we determined that we needed a broker.
>> yeah.
>> that's what we have before us today. Y'all are simply asking which one of these options do you want to go. There's not a question as to whether or not we need a broker. We've need a broker. You have nothing to lose by having a broker. The broker understands, will understand immediately that the needs assessment is the thing that has to take place before they are going to do anything. Mean while, any of these folks worth their salt, and they are probably all qualified to do this, I do think that you make a good point, the committee needs to go back and ask these certain questions and determine which one is going to be able to do the job. Quite frankly, you're plobal going to have three of them going to be able to do the job, some of them will be able to answer certain questions where you find it more comfortable with that. Think we need to move on. You have nothing to lose. There's monies being expeppeded on this process. You quite frankly are asking somebody to say get ready to follow our needs assessment. That, quite frankly, will trigger those people to do their job. I知 sure that they will start walking the neighborhood and the confined blocks to just get ideas about what might be available in the event that there is the needs assessment shows that.
>> which question will enable us to determine expertise in the downtown area?
>> judge, I just had a follow-up point.
>> can I guess my questions answered first though?
>> yes, sir.
>> if the point of these questions is for us to determine of the three that we think are qualified which one possesses the most expertise downtown, why wouldn't we ask that question point blank?
>> we could.
>> I don't see it down here.
>> it is not down there.
>> yeah. Seems to me that would be the most important question.
>> that's one of the reece to discuss this criteria. I think that's a good question to pow here. The two questions that we're also very concerned about is that they have, that knowing that we may not procure anything, that we might not actually purchase anything and pay them any proceeds for some period of time, that they have the financial wherewithal to extend themselves for the account for some period of time. It could be years. So that's the purpose of the transaction value question that's here. The second from the bottom. The last question really is to give a perspective on whether they have been in the business of had managing and assembling portfolios for people. Because although you are not going to specifically ask him to manage your real estate portfolio, you have facilities management to do that, you want to know that they think strategically in that way so when they look at what it is that we think we want, they are looking at acquisitions for you as if the they would be assembling a larger real estate portfolio for you. That was kind of the thinking. That is also likely to say they have done business in the downtown as well. Not necessarily but likely. I don't why we wouldn't just add what the transactions in the downtown market in the last year were.
>> I thought 2.5 in attachment number 4 was a night way to put it and perhaps it could be added to the selection criteria chart.
>> sure.
>> if the court decides to approve, I know we talked about earlier, I had mentioned, when would these persons be, whoever is chosen here, when will they be retained?
>> once the court makes a decision as to a procurement process, Commissioner, we can put together a package of this different criteria and get it out to them immediately. There's a review and negotiation process that will have to take place. Once that is done we'll bring it back, our results back to the court. The court gives us direction on contract award. We can put a broker under contract but not necessarily have to issue notes to proceed to turn them on to work for however long. For example, the brokers in our pool now have been in for close to four or five years.
>> okay.
>> it's on a requirements type basis. As needed basis. When the county has a need, facilities management or tnr will send the need to purchasing, send out a scep and negotiate. Just because we put them under contract doesn't mean we need to use them immediately.
>> I guess the judge asked a real good key point, and that is choosing, of these persons we look at, who knows the downtown area. I mean, I really don't know the answer. Seems like no one else does right now because the question hasn't been asked.
>> go ahead.
>> I知 sorry.
>> our new, additional, evaluation criteria, as belinda said, can include that additional information if the court so desires of the these are specific questions we want you to ask the firms within the brokerage pool or specific questions we want in the scope of work should we determine to solicit a new broker that the not in the pool. That all can be included in the solicitation document.
>> okay.
>> I cut ut off a minute ago.
>> thank you, judge. We took a look at how ut handles this type of quem. Ut published a master plan for their Austin campus a number of years ago. And on their master plan they show proposed buildings on property that they don't own. It's published and on the internet. They also have in their master plan a statement about their real estate acquisition philosophy. They have targeted an eight block area east of the baseball stadium.
>> east Austin resident may want to cover their ears.
>> it's public information. It's out there. They list the boundaries and they say the board of regents has authorized ut, standing hort--authority to purchase property in that specific area. There's a pick you're of how they might build out oh that. They also say that ut investigate purchase of other suitable property as it comes on the market. This is a large property owner that is an institution that knows it needs to grow. Their mass the ter plan goes on to say they intend to infull their campus to build up buildings on their parking lot, turn parking lots into buildings and develop garages around the perimeter as opposed to continuing to expand at the same density. But I thought it was interesting that they went ahead and developed a master plan identifying potential use of property that they don't own. I know that's been a periodic topic in our committee about the appropriateness of doing that, and that's something that we would want to continue to revisit with the court for directions on how those two issues tie together as we move forward with the needs analysis and planning for downtown.
>> before we get into trouble, I move that we authorize staff to put together the selection criteria where we revise it, include the points made today, send the questionnaire to the three firms that you've identified, and then evaluate their responses, back with us at appropriate time in the future. We fast track this you're looking at, what a month and a half to report back?
>> possibly two months.
>> second that.
>> month and a half to two months.
>> yes, sir.
>> and we'll determine how to proceed after we get the report back. Second by Commissioner Gomez. Anymore discussion. Our commitment now is really to conduct a look-see, then do the follow-up evaluation. Our intention is to use one of the brokers on the list the if we find one that we think is qualified, capable of doing this downtown work.
>> when I say two months, that's to bring the findings back to the court.
>> right.
>> okay.
>> discussion? All in favor. That passes by unanimous vote d.. Thank you all very much.
>> thank you.
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Last Modified:
Wednesday, April 2, 2008 8:51 PM