Version 18.104.22.168: Comments by Finance and Administrative Committee added after 6/2/2011meeting.To: Lake County Forest Preserve District Board of CommissionersFrom: Tom Hahn, Executive DirectorDate: May 31, 2011Re: Fort Sheridan request for proposals (RFP)consideration and issues – Fort Sheridan plan2B – 9-hole golf coursecc: Matt Norton, General CounselAt the Special Call meeting on June 14, the board will consider the recommendation from theFort Sheridan Advisory Committee to issue a Request For Proposal for development,construction and operation of a proposed 9 hole golf course at the Fort Sheridan Preserve.Since the District has not issued an RFP for this type of use in the past, I anticipate that therewill be questions from Board members related to the terms and specifications that would bepart of the RFP document. Therefore, I felt it was appropriate to prepare the following memooutlining the issues that staff recommends be considered during the RFP process, if the boarddirects staff in June to begin its preparation. A discussion regarding these RFP issues will beon the Finance Committee agenda for Thursday, June 2nd at 8:30 and Planning andRestoration Committee agenda for Monday, June 6th at 1:00 p.m. Both of these meetings willbe held at the new General Offices at 1899 West Winchester Road. The purpose of thisdiscussion will be to provide the commissioners with an understanding of the RFP process,items to be considered, anticipated schedule and estimated costs.If the Board of Commissioners directs staff to prepare a RFP at the June 14th meeting, it isrecommended that staff prepare the RFP (with the advice of a consultant) and bring it back tothe Finance and Administrative Committee for final approval prior to its release.As noted above, if the District issues an RFP, there are many issues and questions to beconsidered as part of the RFP process. A few of the issues are "givens" -- provisions that mustbe included in a final agreement because they are required by law. In addition to these"givens," there are many other questions and issues upon which staff needs direction from theBoard of Commissioners (with the advice of appropriate consultants) so it can prepare anRFP that is as complete, accurate, and informative as possible. These include "big picture"issues that probably should be addressed first, financial issues, and other issues that must beaddressed to "flesh out" the substantive provisions of the RFP related to construction,operation, and maintenance obligations.I. "Givens"1) The golf course must be a public course. Generally, that means it must be open to allmembers of the publicon the same terms, with no memberships and no preferential treatment.2) The golf course improvements will be owned by the District.2
3) The District has the statutory authority to license its land for activities reasonablyconnected to forest preserve purposes (such as a golf course). The District generally does nothave the statutory authority to lease its land for golf course purposes. Generally speaking,with a license, the property owner retains more control over the land than it does with a lease.Thus, in its agreement, the District must retain sufficient control over the golf course, so thatthe agreement is a valid license, not a lease.4) The golf course improvements will be a public works project. Therefore, in conjunctionwith construction of the improvements, the Licensee must (i) post performance security (tosecure construction of the golf course) and a labor and material payment bond (to securepayment to subcontractors) and (ii) comply with the Prevailing Wage Act.II. "Big Picture" Issues1) Is this RFP only for this proposed golf course or would the District consider a largermanagement proposal of all the District courses? No2) Will the RFP be issued before or after the District makes any request to the Armyconcerning the covenants in the deeds? The District will vote to issue the RFP prior tocontacting the Army.3) Will there be a public comment period for the RFP prior to its release and approval by theFinance and Administrative Committee? The public is invited to attend all meetings wherethis is discussed. We will have a 15 day comment period before the final version is released.III. Financial Issues4) What role will the District take in financing the golf course improvements, if any? a. Will the District put in any cash either at the front end or at some percentage of thecompletion? No b. Will the District provide public financing? No5) If the District provides public financing, will it do so only as a conduit, requiring Licenseeto make all debt service payments for financing and to provide a credit facility to secure debtservice payments? What type of bonding will be required to allow the District to complete theconstruction or continued operation should the proposer default. Not applicable since theDistrict will not finance any of the golf course improvements.6) Will Licensee be required to construct and operate the course at no cost to District? Yes7) Will the District set a maximum rate per round? Will discounts for Lake County residentsbe required? How much detail will the District provide in the RFP regarding rates? Whatabout future price increases? The District will provide some guidance on rates in the RFP, butfurther discussion with the RFP consultant will be necessary to provide appropriate language.3
8) Will the District expect some type of financial return? A percentage of net profits (afteroperating expenses and debt service is paid.)9) Will the District be required to pay for the value of the improvements at the end of thelicense term? How will those improvements be valued, including the value of any futurecapital improvement replacements or modifications? District will rely on RFP consultant forguidance on this issue.10) Will Licensee be required to provide a capital replacement schedule and fund it? Yes11) What type of financial transparency will the District require (e.g., will the District requireaudits during the license period)? Detailed financial reports/audits will be required.12) Will the Licensee assume all legal risks if it is determined that the arrangement betweenthe Licensee and District is a lease rather than a license -- a determination that could create ataxable leasehold and that could affect the overall validity of the agreement. Yes13) What other financial criteria will be in the RFP? District will rely on RFP consultant forguidance on this issue.IV. Other Substantive Provisions of RFPA. Fundamental RFP Terms14) What is the proposed time period for the license? Is there a minimum or maximum timeperiod that should be specified in the RFP? District will rely on RFP consultant for guidanceon this issue.15) When must construction of the golf course commence and be completed? District willrely on RFP consultant and staff for guidance on this issue.16) What level of experience does the Licensee need in terms of years of performance, typesand number of golf courses built and operated, and other factors? What type of business planwill be required as part of the RFP to demonstrate that the proposer has the resources forinitial development and long-term operation? District will rely on RFP consultant forguidance on this issue.17) Will the District reserve the right to terminate the license agreement if certain operationalor financial performance standards are not satisfied? If so, what are those standards? Yes andDistrict will rely on RFP consultant for guidance on this issue.B. Construction of Golf Course Improvements18) Will the District allow potential Licensees, in their proposals, to make changes from theplan recommended by the Fort Sheridan Advisory Committee and if so to what extent? Forexample, will the potential Licensees be allowed to propose a totally different plan andconcept or do they have to work within the concept of Plan 2-B? If changes are allowed,should the RFP and/or the proposals address the following issues:
a. Can more of the bluff be used for golf? For open space?b. How will the proposed trail be integrated within the overall site and in particular, as ittraverses through and near the golf course? Will changes to the trail location be allowed?c. How will the remainder of the Parade Grounds be used? Will golf holes be required on theParade Ground?For all of Item 18: There will be an overall mission/preamble describing the District’sphilosophy regarding the use and development of the site. The “2B preferred plan” will bepart of the RFP, but minor modifications may be acceptable if the revised plan meets with theoverall goal and use philosophy for the site.19) Can a permanent clubhouse be constructed? If so:a. Will the District allow the clubhouse to be used only for golf and not general public use iflicensee requests? District would require a minimum of rest room sharing.20) How will the management of the clubhouse function? District will rely on RFP consultantfor guidance on this issue.a. Will a banquet facility within the clubhouse be allowed as part of the license agreement?How will the profits from this venture be allocated? No21) Will the Licensee be required to construct the public access portions of the plan at thetime it constructs the golf course? If so, how will these costs be shared and allocated?District will rely on RFP consultant for guidance on whether this is a reasonable request.22) What will be the minimum golf course design, materials, and maintenance standards andquality requirements that the District will accept, such as Audubon design and maintenancestandards, length of course and holes with double tees, condensing area of course, bringing intopsoil for quality turf, irrigation? Audubon design and maintenance standards; and Districtwill rely on RFP consultant for guidance on the remainder of these issuesC. Operations and Maintenance Rights and Obligations23) Will licensee be required to maintain the entire preserve? Or only those portions that areintegral to the golf course that should be under one management entity (parking lots,buildings, portions of the trail?) Will a joint use maintenance facility be incorporated if theDistrict has to maintain part of the preserve? To be determined; district will rely on RFPconsultant and staff for guidance on this issue.24) How will the clubhouse be used outside the golf season and who will operate and pay forits maintenance? How will the course be used during the offseason? To be determined;district will rely on RFP consultant and staff for guidance on this issue.5
25) Will turf management be consistent with District’s specifications used on other golfcourses? Yes and per Audubon standards.26) How will security on the golf course be accomplished? Will District Ranger Police patrolthe area? Will security calls go to the District, Highland Park, or Lake Forest? To bedetermined by Operations and Public Safety Division27) What are the proper amounts of liability insurance and indemnification protections for theDistrict? To be determined by the District Insurance Carrier, PDRMAD. Control Reserved to District28) What control will the District have on the quality of customer service? To be determined;district will rely on RFP consultant and staff for guidance on this issue.29) What is the approval process for any further changes to the plans, after the licenseagreement has approved? Will the District have final say in any changes or will the Licensee?To be determined during the RFP drafting process.30) Will the District have any say in marketing (e.g., strategy, type, quantity and content)?Will the District have any responsibility to assist in marketing through the District’s website,e-newletters and publications, or are these services charged back to the golf course? To bedetermined; district will rely on RFP consultant and staff for guidance on this issue.31) How will the District’s name and logo be displayed and integrated on the golf coursemarketing materials and signage? To be determined; district will rely on RFP consultant andstaff for guidance on this issue.32) Will the Licensee have the right to close down all or part of the preserve (e.g., theintegrated trail area in between the golf holes) from public use for special events? To bedetermined in consultation with District’s Operation and Public Safety Department.33) Who will be responsible for handling complaints from Fort Sheridan home owners orPreserve users related to the golf course or any other portions of the preserve under themanagement of the Licensee? To be determined; district will rely on RFP consultant and stafffor guidance on this issue.34) Are there legal hurdles if the District agrees to contribute all or a portion of the remainingfunds allocated to the golf course currently held by the District? Not applicable.35) Will this course be integrated with the reservation system used for the District’s othergolf courses? To be determined; district will rely on RFP consultant and staff for guidance onthis issue.36) Will the District’s standard construction documents be used for construction of the golfimprovements? To be determined; district will rely on RFP consultant and staff for guidanceon this issue.
Potential Time Frame for issuance of RFP: 6Board determines to issue a RFP – June 2011District retains consultant to undertake RFP draft – June 2011Consultant works with staff to draft RFP – July/August 2011Draft RFP reviewed by District Finance Committee – September 2011RFP issued – October 2011RFP informational meeting for interested parties – November 2011RFP’s response due back to District – December 2011District staff review and clarification of proposals and preparation for Board review –January 2012Committee and Board review – February 2012Consultants to be retained.Golf management professional with experience in drafting RFP privatization documents.Holland and Knight to review the RFP and potential license agreement.Chapman and Cutler regarding public financing options for the golf course (if any)AECOM (Golf marketing division) to assist in review of the financial aspects of submittedRFP’s.The cost to retain these consultants is difficult to predict. Most likely, it would be in the rangeof $30,000 to $70,000, however, that could change depending upon the complexity of theRFP and/or the license agreement