BREAKING: Three Corners Committee Ranks First the Proposal Without Financial Backing
City’s expert advisors call Clearpath’s financial capacity “weak or not demonstrated."
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At the March 4th meeting of the Three Corners Selection Committee, enough could not be said about Clearpath’s presentation of their designs. Compared to The Blue at Vero Beach which is the team of Edward Jones, SuDa, Madison Marquette and The Continental Companies, Clearpath was “thorough,” “detailed” and “excellent” according to committee members. However, while Clearpath’s proposal overwhelmed the committee from an engineering standpoint, the financial analysis did the opposite. Committee member and Vero Beach Planning and Zoning Director, Jason Jeffries, remarked, “If you don’t have the money at this point, then, all of it is just fluff.”
However, the Selection Committee voted 4-1 to rank Clearpath first, despite the severe reservations of Jeffries and the City’s financial audit firm. Jeffries gave 5 of a possible 25 points to Clearpath concerning their financial presentation. As a result of the low scoring, he ultimately ranked Clearpath 2nd though he said their design was “refined” and was closer to the original Master Plan for Three Corners.
The City had two firms conducting independent evaluations using a points-based system. Stantec analyzed the engineering and design portions of each proposal. PFM, who analyzes all financial proposals for the City, conducted independent reviews of the bid submissions. Also, each of the committee members rated the two proposals on a points system divided across the two categories. Clearpath won every design and engineering category. The Blue at Vero Beach won every financial metric measured by the audit. PFM remarked in their review of the financial capacity for each proposal that, “PFM scores the Clearpath financial capacity as weak or not demonstrated … PFM scores The Blue at Vero Group proposal as strong.”
PFM remarked that Clearpath’s forecast for business success was “overly optimistic” noting Clearpath didn’t even have a restaurant and retail operator in place — a requirement of the City. PFM also verified that they reached out to Clearpath’s listed financial advisor in their Three Corners proposal. The firm, Westminster Capital, who was presented as managing their investment capital and financing, had “indicated to us that they were not participating,” said PFM’s representative. PFM’s advisor commented in an answer to questions, “You could see that as a potential risk to the City if a developer does not have those relationships and financial capacities already demonstrated.”
PFM described the other three managing firms on the Clearpath team, capable, which is why they issued the financial plan 4 of a possible 15 points. However, they did note the Clearpath team had not ever done a development of this magnitude on a waterfront. Committee member, Vicki Gould loved Clearpath’s design. She said, “As I said earlier, it really threw a wrench in it, to me. To get the report of the financial side of things, made me go back to square one and look at it all again.”
The committee applauded The Blue of Vero Beach’s numbers. PFM lauded that they brought with them easily recognizable institutional investors and a more conservative forecast for business at Three Corners. PFM noted that the managing partner, Madison Marquette, is a well-experienced retail and restaurant operator. “The firm has completed exceptionally large projects similar and size and scope across the country,” said PFM’s representatives. Projects include The Wharf in Washington, DC located on the Potomac River in Georgetown, an exclusive area of the city.
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The Blue at Vero Beach had their own struggles with the committee. The members felt it was really light on engineering and design details. Committee member and Water and Sewer Director, Rob Bolton, said they did the absolute minimum and did not refine their submission at all, even though they had time to do so. Planning and Zoning Committee Chairman, Jeb Bittner, who recommended Clearpath last May in the first selection process, said, “It’s hard to compare the two because they weren’t on equal footing of design and detail.”
Bittner went on to explain his comments anticipating the financial discussion that was coming later in the meeting. He said, “You can have all the financial plans in the world, but if you’re not enticing enough to draw the public in, you are going to put your project at risk…”
Yet, regarding the essential aspect of financing, Bolton cautioned later in the meeting. He asked for clarification from PFM, who emphasized the risk involved to the City that Clearpath did not demonstrate financial backing in their proposal. Bolton remarked, “Yeah, I agree. We see that now with a development to the south of us that hasn’t started in 5 years because there is no financial backing. And then, a development to the north in Melbourne where the prices went up and there’s not finance and nothing is happening.”
PFM reached out to the firms for clarifying information and questions about each proposal. However, Stantec did not reach out to Clearpath or The Blue at Vero Beach to inform their analysis of engineering and design. Stantec’s representative said, “We relied on what they submitted in their proposals, We did not have a back and forth with them.”
The next phase of the process is scheduled for March 31st, when Clearpath and The Blue at Vero Beach will go through a lengthy interview process with the committee. After the morning interviews, there will be a public meeting at 2:45 PM to make formal recommendations to the City Council. Afterward, there will be the final interviews with Clearpath and The Blue at Vero Beach on April 22nd, conducted by the City Council. At that time, they will cast their final vote.
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Ye gads! Very concerning. Are local investors involved? What or who is PFM? Did I miss something.?