city center ii — parkside project

7/29/2019 City Center II Parkside Project

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A Historic Opportunity

We come to the City of East Lansing with a bold proposal: to combine strong community input withworld-class development credentials to transform the Park District post City Center II into a source of

pride and desirable use. We believe that such collaboration is the logical approach to not only address

the financial issues that now face East Lansing residents, but also the best way to develop something

meaningful from the present collection of empty and underutilized buildings scattered across multiple

parcels.

A major, nationally reputed developer known for transformative mixed use projects has taken an active

interest in the MSU market. This interest was piqued through the Capital Gateway/Red Cedar Golf

Course project, but there is potential for additional development in downtown East Lansing. No

promises are made, but the interest and intentions are genuine.

However, as any developer with an honest interest in the Park District would acknowledge, the RFQ/P is

lacking much of the necessary information to make a detailed proposal, and the situation is in too much

flux to determine at this time exactly what development components would be both financially feasible

for the developer and attractive for the community.

Developing the Park District in the aftermath of City Center II is a historic opportunity, but it is also

challenging on multiple fronts. The parcels of land in questionboth publicly and privately ownedare

arguably as strategic to the future of East Lansing as any in the entire city. However, its not clear at the

present time which parcels will ultimately be available for developmentthe only certainty is that there

will likely be numerous changes in the scope of any project in the future. Successful development will

require patience, proven access to institutional capital and the capital markets, and the ability to work in

partnership with the citizens of East Lansing and with East Lansing government.

Our proposal takes a two-step approach: Step One creates an ongoing process of rebuilding trust,

building consensus and community support; Step Two looks to leverage the expertise and financial

capabilities of this world-class developer with extensive experience in complex mixed-use projects

often in academic settings.

Our road map for the East Lansing RFQ/P mirrors that of the Capital Gateway project in Lansing, where

grassroots input has been integral to the development process, and where this involvement was

rewarded with approval in a public vote.

We believe that the citizens of East Lansing deserve their own collaborative community/developer

venture, one which uniquely reflects the specific options that ultimately present themselves. We

strongly believe East Lansing is as desirable a place for a highly reputable national developer to invest as

any university community in the country, given the opportunity and encouragement. Unlike many other

university towns, East Lansing residents, including those who opposed City Center II, want development


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and progress. They just want it to be smart, successful development that respects the values of all the

stakeholders in, and is not a financial drain on, the community.

With its strong neighborhoods, East Lansing proudly retains something of a small town feel much valued

by its permanent residents. But, there is no reason East Lansing cannot capture the elegant balance

that make other university communities, such as Chapel Hill, Austin, and Palo Alto, magnets for people

of all ages and economic backgrounds. We sincerely believe the community is poised to take the next

step in the evolution of downtown, and that it can attract something more than the usual housing and

businesses targeting the undergraduate demographic. But for this to really happen, not just be hoped

for, involvement by a developer with substantial and patient capital is needed, along with the

experience to deal with real world, often changing, market complexities, all the while not losing sight of

what the community wants.

The East Lansing RFQ/P should be more than just a costly salvage operation of the wreckage of an

abandoned project. The right path forward, even though it will take time, should be around a new

visionone that brings together the wisdom, experience, and desires of East Lansing stakeholders, who

know their community best, and world-class developers with proven expertise and ample access to

institutional capital.

The Parkside Project is that project.

Christopher Jerome


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Proposed Process

1. Continue the process of seeking community input and support begun in creating the RFQ/P. Organize forums mirroring the Red Cedar Community Conversation held in Lansing. Forums run by citizen groups, with participation from the business community and MSU. Candid discussion of realistic options under market conditions Create Summary Report of options reflecting goals of community and financial realities. Engage in an iterative process of ongoing discussions based on evolution of Project.

2. Engage owners of adjacent private parcels. Explore acquisition of air rights to historic East Lansing Post Office Building (Dublin Square). Acquisition of empty adjacent parcels.

3. Create conceptual rendering and project pro forma. Public discussion of initial project acceptability and financial feasibility. Extensive public discussion on financial model Evaluation of sources and uses of capital Clear plan to address outstanding debt tied to city-owned parcels

4. Coordinated process with City for public vote on sale of properties (per charter). As with the Red Cedar Golf Course sale, this would legitimize the project with the public.

5. Negotiation of Development Agreement between City & Developer.

6. Formal approval by East Lansing City Council


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The Parkside Project Vision: Preliminary Concept Summary

Mid-rise or high-rise mixed use development Distinguished design that respects community businesses and neighborhoods. Multiple structures likely Ability to build in stages Competitive bidding opportunities for local firms Construction reflecting environmentally friendly practices

Financially Sound and Low-Risk for the City

Respect for Valley Court Park Green Space Protect and enhance the charm of Valley Court Park

Respect for quality of life in adjacent residential neighborhoods Emphasis on potential noise, traffic, sunlight, and parking issues Pedestrian and bike friendly design

Respect for MSU Enhance downtown East Lansing in manner that positively impacts MSU Create new options for faculty, staff, and alumni, in addition to permanent residents Create new options to enhance recruiting faculty to East Lansing

Respect for historic buildings and their architectural status in Community Peoples Church Historic East Lansing Post Office Building (Dublin Square)

Connect Valley Court Green Space with Downtown Business District Project should connect these areas via design and mixed use elements

Patience and Sufficient Financial Resources A potentially lengthy process

Community seeks thorough and ongoing discussion of options Options will likely evolve over time

Ability to fund acquisition of other parcels Ability to potentially underwrite public infrastructure costs Demonstrated ability to execute complex projects crucial to success


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Development Entity

Legal name: The Parkside Project LLC

Address: 1919 S. Creyts Road. Lansing, MI 48917

Intended Members: Carpenter & Company (corporation)

Scott Vermilya

Christopher Jerome

Authorized Agent for Developer: Christopher Jerome

Contact Information: 517-351-0400 (office)

517-712-2889 (mobile)

[email protected]

Authorized Agent for Carpenter: Scott Vermilya

Contact Information: 617-999-7949

[email protected]
mailto:[email protected]:[email protected]


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REQUEST FOR QUALIFICATIONS AND PROPOSALS

Park District Planning AreaEast Lansing, Michigan USA

THE CITY OF EAST LANSINGEAST LANSING DOWNTOWN DEVELOPMENT AUTHORITY

Lori Mullins, LLA, CTACommunity and Economic Development Administrator

City of East Lansing410 Abbot Road

East Lansing, MI [email protected]

PROPOSAL CREATED BY:

Heneage Consulting Group907 Massachusetts AvenueCambridge, MA 02139

Carpenter & CompanyCharles Square20 University RoadCambridge, MA 02138

PROPOSAL CREATED IN COOPERATION WITH:

Mr. Christopher Jeromec/o Preferred Automotive Corporation1919 South Creyts RoadLansing, MI 48917


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I. Firm Name and Contact InformationCarpenter & CompanyCharles Square20 University RoadCambridge, MA 02138Telephone: (617) 876-9800Fax: (617) 864-5990Web: www.capenterandcompanyinc.com

Authorized Agents:

Richard L. Friedman, President and Chief Operating OfficerPeter Diana, Vice President and General Counsel

II. Firm OverviewIn existence since 1898, Carpenter & Company is a highly respected and experiencedfirm involved in real estate development, ownership and management. Incorporated in1973 by Richard Friedman, Carpenter has devoted its resources to the development ofhotels, mixed-use projects and retail properties. We have a long and successful historyas a developer of hotels and complicated, large-scale urban projects and areparticularly adept at working closely with governmental, community, union,neighborhood and political groups to create an inclusive development process thathelps ensure the successful completion of a project. Our projects become part of thefabric of the communities in which they sit and serve as gathering points for all

members of the community. From nationally renowned restaurants to criticallyacclaimed jazz clubs, our developments and associated amenities are a focal point notonly for our on site guests but the surrounding communities as well.

III. Project ContactDarren MessinaVice President Design and ConstructionCarpenter and CompanyCharles Square

20 University RoadCambridge, MA 02138Telephone: (617) 876-9800E-Mail: dmessina@carpenterholdings,com


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IV. Corporate Organizational Chart

V. Development Team BiosRichard L. Friedman, President and Chief Executive OfficerMr. Friedman is an entrepreneur and real estate developer. Mr. Friedman begandeveloping hotels and mixed-use projects in the early 1970s. As President ofCarpenter, he developed Charles Square and the 293-guestroom Charles Hotel, the

Liberty Hotel in Boston, the St. Regis San Francisco, the Brookline Marriott Courtyard,and Hyatt hotels in Cambridge, Massachusetts and Princeton, New Jersey.Carpenters St. Regis project was the recipient of the 2005 Development of the YearAward from the Americas Lodging Investment Summit, and Carpenters Liberty Hotelproject was a finalist for that same prestigious award three years later. Mr. Friedmanhas also developed numerous other projects, including office buildings and shoppingcenters. Mr. Friedman was the founder of the Interagency Security Task Force forWashington, which works with the U.S. Secret Service, the Department of HomelandSecurity, and others to improve security in Washington while preserving democraticand urban values. He remains active with the Task Force. Mr. Friedman is also theformer Chairman of the National Capital Planning Commission, the Federal

governments urban planning agency in charge of all master planning, monuments,and parklands in the Metro D.C. area. Mr. Friedman serves on numerous boards ofdirectors including the NYSE-listed Gatehouse Media, and the SteppingstoneFoundation, which assists low-income students in reaching higher education goals.Mr. Friedman received a B.A. degree from Dartmouth College in 1963.

Richard(Friedman(-(President(and(COO(

Peter(Diana((

Vice(President(&(General(Counsel((

Darren(Messina((

Vice(President,(Design(and(Construction(

Kathryn(Burns(

Strategic(Advisor(Project(Support(Staff(

Phillip(C.(Vitali(

Vice(President(and(Chief(Financial(Oficer(


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Development Team Bios (Continued)

Peter Diana Vice President and General Counsel

Mr. Diana joined Carpenter in 1992. While at Carpenter, Mr. Diana has worked on anumber of hotel projects, including the Liberty Hotel, the St. Regis San Francisco, andthe Westin Boston Waterfront. Before joining Carpenter, Mr. Diana was a JuniorPartner at the Boston law firm of Hale and Dorr where he worked on a number of largemixed-use projects. Mr. Diana also served as an adjunct professor at Cornell LawSchool, where he taught a course in real estate development and finance for threeyears, and as a lecturer at the MIT Center for Real Estate where he taught a course onreal estate law. Before becoming a lawyer, Mr. Diana worked as a regional planner atthe Philadelphia-based architecture and planning firm of Wallace, Roberts and Todd.Mr. Diana received a B.A. from Middlebury College, a Master of Regional Planningdegree from the University of Pennsylvania, and a J.D. from Cornell Law School.

Darren D. Messina, Vice President Design and Construction

Mr. Messina joined Carpenter in 1987. While at Carpenter, Mr. Messina has served asproject manager for the construction of the Liberty Hotel, the St. Regis San Francisco,the Brookline Marriott Courtyard, and the Logan Airport Hilton, and worked on design

and construction issues relating to the Westin Boston Waterfront. Mr. Messina alsoserved as project manager on a number of Carpenters retail projects. Mr. Messinareceived a B.A. degree in marketing and management from Boston University in 1987.

Phillip C. Vitali, Vice President and Chief Financial Officer

Mr. Vitali joined Carpenter in 2001. While at Carpenter, Mr. Vitali has beenresponsible for the financing and refinancing of a number of Carpenters projects,including the Liberty Hotel, and Charles Square and the Charles Hotel. Prior to joiningCarpenter, Mr. Vitali was Executive Vice President and Chief Financial Officer of MGIProperties, a New York Stock Exchange real estate investment trust. At MGI, Mr.Vitali had responsibility for financial and treasury management, property management,

information technology, human resources and investor relations. During his 20 yearsat MGI, Mr. Vitali was extensively involved in complex debt and equity financings, aswell as numerous property acquisitions and dispositions. Mr. Vitali received a M.B.A.degree from Yale University, a M.A. degree from the University of Chicago, and a B.A.degree from Boston College.

VI. Representative ProjectsSt. Regis Hotel and Residences San Francisco, California

Carpenter & Company developed the five-star St. Regis Hotel at the corner of Third

and Mission Streets in San Francisco. The St. Regis, which opened in 2005, isadjacent to the San Francisco Museum of Modern Art and across the street from theMoscone Convention Center. The St. Regis includes 270 guestrooms, extensivemeeting facilities, a ballroom, two restaurants, a spa and a health club. The luxuriousguestrooms all include flat screen TVs in the bedrooms and bathrooms, separateshowers and tubs, twice daily housekeeping, and butler service.

Carpenter was selected as the developer of the St. Regis site by the San FranciscoRedevelopment Agency. Nine teams, including the team led by Carpenter, submittedproposals for the site. Among the respondents were Raddison, Wyndham, Penninsula,


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Promus and Tishman International. Based on an independent review of the proposalsprepared by KPMG Peat Marwick (which recommended Carpenter), Carpenter wasdesignated as developer of the site.

The St. Regis occupies the first 20 floors of a 42-story tower developed by Carpenterthat also contains 102 residential condominium units and a 20,000 square footmuseum.

A portion of the St. Regis site is occupied by the historic Williams Building, which wasbuilt in 1907 and incurred extensive structural damage in a 1989 earthquake.Carpenter was widely praised for its close work with governmental regulators andarchitects that led to a plan to save the historic building and successfully incorporate itinto the project.


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St. Regis Hotel and Residences San Francisco, California (Continued)

Charles Square Cambridge, Massachusetts

Carpenter & Company was the developer of Charles Square, a mixed-use projectlocated between the Charles River and Harvard Square in Cambridge, Massachusetts.Charles Square is situated on a four-acre site that at one time was proposed as thelocation for the John F. Kennedy Presidential Library.

Concerned about the traffic that the Presidential Library might generate, the localcommunity objected to the development, and the library proposal was withdrawn. TheMassachusetts Bay Transportation Authority, which owned the site, then issued aRequest for Proposals for the development of what by that time had become a highly


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controversial location. Carpenter was selected as developer after proposing a sensitivedesign that provided for the site to be developed for a mix of uses compatible with theexisting Harvard Square environment.

In designing and building Charles Square, Carpenter worked carefully with the City ofCambridge, Harvard University and the local community. The project has been anenormous success in large part because of Carpenters willingness to creativelyrespond to the desires of the City, the University and their various constituencies.Charles Square is a model of successful public, private, and institutional cooperation.

Charles Square is an 800,000 square-foot project that includes the 293-guestroomCharles Hotel, as well as 86 residential condominium units, 110,000 square feet ofoffice space, a retail component, and a below grade 700-space parking garage.

The Charles Hotel is an independent full-service luxury hotel. In addition to itsguestrooms, the Charles contains a 4,000 square foot ballroom, five conference rooms,three executive boardrooms, two award-winning restaurants, a jazz club, a bar, and ThePavilion, an 11,000 square-foot conference facility. Rialto Restaurant at the Charleswas named one of the top 25 restaurants in the world by Travel & Leisure Magazine.

The Charles Square project, of which the Charles Hotel is a part, also includesresidential condominium units, an office building, a retail component and a below gradeparking garage.


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Charles Square Cambridge, Massachusetts (Continued)


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Princeton MarketFair, Princeton, NJ

Carpenter and Company was brought in to spearhead the redevelopment of 240,000 sfPrinceton MarketFair specialty retail center. MarketFair is a 240,000 square foot retaildestination located in Princeton, New Jersey. The unique center was features bothinterior and exterior-facing retail space that many regard as the precursor to todaysmodern outdoor lifestyle centers. MarketFair is anchored by Barnes & Noble, UnitedArtists Theatres and many of the nations most desirable retailers, includingAnthropologie, Pottery Barn, White House Black Market and Williams-Sonoma


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The Hanover Inn Hanover, NH

After a review of a number of proposals from competing entities, Dartmouth College,the Owner of the Hanover Inn, turned to Carpenter & Company to renovate,reprogram and reposition its 121-year-old downtown landmark inn. In working withthe College and the Town of Hanover Carpenter was able to successfully renovatethe existing hotel to current luxury standards as well as develop additional meetingand conference space which was needed by the college to ensure the Inns futurefinancial stability.


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The Liberty Hotel Boston, MA

Carpenter & Company redeveloped Bostons historic Charles Street Jail into the four-star Liberty Hotel. The Liberty sits at the foot of Beacon Hill, Bostons most affluent and

charming neighborhood. The Liberty opened following a complete renovation of thelandmark jail that was originally constructed in 1851. In addition to the adaptive re-useof the Jail building, the project included the construction of a new 16-story guestroomwing. The Liberty contains a total of 298 guestrooms, two restaurants, two bars, aballroom and meeting space.

Carpenters Liberty Hotel project involved the conversion of a National Registerbuilding into a hotel. The Liberty, which includes 298 guestrooms, extensivemeeting space, two restaurants and two bars, is located on land owned byMassachusetts General Hospital and ground leased to an affiliate of Carpenter.Mass General selected Carpenter to develop the Liberty following a competition thatattracted a large number of respondents. The Liberty project required carefulcoordination with the Federal, State and local historical regulators, who wereconsulted regularly during the development of the project, and approved the projectplans. The Liberty was awarded more than $19 million in Federal and State historictax credits, which were instrumental in its financing.

Finally, this project required careful coordination with the City of Boston and theneighborhoods surrounding the site. Boston is a challenging city in which to obtainpermits and approvals for development projects, in large part because theneighborhoods care passionately about development and its impacts. Carpenter wassuccessful in these efforts and prides itself on its ability to work cooperatively withgovernmental agencies and neighborhood groups to create projects of lasting value thatwin the endorsement of the municipalities and neighborhoods in which they are located.


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VII. Additional InformationOver the years, Carpenter has successfully developed long-lasting relationships with numerousjoint venture partners, lenders, inst itutions, retailers, unions, community groups, cities, andtowns. Among Carpenters business partners and lenders are Cascade Investment, BaynorthCapital, Bentall Kennedy, Starwood Hotels, Marriott Hotels, Hyatt Hotels, Hilton Hotels,Citibank, Deutsche Bank, and Banco Santandar.

We are committed to these relationships, and to the projects that we develop and manage. Asan established developer and manager of real estate, Carpenters philosophy is long term, soas to create environments that are stable additions to the communities in which they arelocated. As a result of our expertise and the development of these relationships, in the past 10years Carpenter & Company has successfully developed projects valued today at morethan $1 billion.

See attached for project comments and references.

city center ii — parkside project

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