Transcript Lease/Leaseback Definition

Construction Project Delivery Methods
Calistoga Joint Unified School District
Presenters
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Scott Gaudineer, Program Executive
Caldwell Flores Winters
Kurt Evans, Vice President
Lusardi Construction
Juan Barroso, Vice President
Blach Construction
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Facilities Mission
Calistoga School facilities shall support
diverse, innovative, interactive learning
experiences, promote academic excellence,
and instill a passion for life-long learning. The
facilities shall be safe, clean, and
accommodate the present and future needs
of the entire community.
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What is Lease/Leaseback?
Lease/Leaseback refers to a legal contract where:
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A School District leases a building or a whole school site to a
General Contractor or Construction Manager giving them rights
to build out the Architect’s design
The General Contractor/Construction Manager then sub-leases
the building and site back to the District to allow them to
continue school operations
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Lease/Leaseback Definition
The L/LB Method is a project delivery method that enables a school
district to act like a private entity.
It is defined and approved under the Education Code Section
17406(a) and reads:
“The governing board of a school district, without advertising for bids,
may let, for a minimum rental of one dollar ($1) per year, to any person,
firm or corporation any real property that belongs to the district if the
instrument by which such property is let requires the lessee therein to
construct on the demised premises, or provide for the construction thereon,
a building or buildings for the use of the school district during the term
thereof, and provides that title to that building shall vest in the school
district at the expiration of that term…”.
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How is Lease-Leaseback Different?
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The District can hand select a
financially sound, qualified,
reputable Contractor
The Contractor is part of the
Team from project start
The Contractor is utilized for
pre-construction services
One Team, One Direction!
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Methods of Project Delivery
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Design/Bid/Build (traditional public bid)
Lease/Leaseback Design Assist
Lease/Leaseback Design Build
CM Multi-prime
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Design/Bid/Build (traditional public bid)
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The Design/Bid/Build process is one in
which the District and the Architect work
together to define project scope. The
Architect (with the design team) complete
the project plans which are sent out to
General Contractors for public bid. The
low bid General Contractor is selected.
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Design/Bid/Build (traditional public bid)
Pros:
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Competitive bid process
Defined project prior to bid
Cons:
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No design input prior to bid, design is not budget based
Largest exposure for change orders
Adversarial relationship
Time and cost overruns
Stuck with low bid
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Lease/Leaseback Design Assist
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The L/LB Design Assist process is one in
which the District hires an Architect and
General Contractor separately to work
together to define project scope with a
target budget. The Architect, District,
and GC collaborate on design. The GC
updates the project budget as plans
progress.
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Lease/Leaseback Design Assist
Pros:
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The District can choose their Contractor & Architect
The Contractor is part of the design process
Project is designed to a budget
District, Architect, Contractor work as a Team!
Cons:
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There is not single source responsibility
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Lease/Leaseback Design Build
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The L/LB Design Build process is similar to
the L/LB Design Assist except that in a
Design Build, the Architect works for the
General Contractor. The General
Contractor becomes the single source
responsibility to the District.
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Lease/Leaseback Design Build
Pros:
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The District can choose their Contractor & Architect
The Contractor is part of the design process
Project is designed to a budget
There is single source responsibility
District, Architect, Contractor work as a Team!
Cons:
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District has less control over design & quality
Architect works for Contractor, not District
There can be perception of no 3rd party representation
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CM Multi-prime
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The CM Multi-prime process is one in which the
District hires an Architect and Construction
Manager separately. The CM acts as the
District’s agent in all pre-construction and
construction activities. The CM bids out the
project on behalf of the District to the various
trades (carpenters, electricians, etc). The
District contracts with all of the trade contractors
separately and has liability for these contractors.
CM manages schedule and subs.
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CM Multi-Prime
Pros:
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The District can choose their CM
Public competitive bid process is used for subs
The CM is involved with pre-construction and
construction
General Contractor mark-up is saved
Cons:
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The District is most at risk (holds all low bid contracts)
Creates the most administrative difficulty
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Advantages of Having the GC Involved Early
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Team collaborates to identify
District goals & budget
Contractor assists designers to
help maximize value
Contractor assists with
construction means and methods,
sustainability, & long term
durability
Project is kept on track with
updated budgets and schedules
Contractor accountability due to
design involvement
Proper planning minimizes
surprises and changes
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