HomeMy WebLinkAbout961356.tiff RESOLUTION
RE: APPROVE FEASIBILITY ASSESSMENT AGREEMENT BETWEEN WELD COUNTY
AREA AGENCY ON AGING AND NCB DEVELOPMENT CORPORATION AND
AUTHORIZE CHAIR TO SIGN
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, the Board has been presented with a Feasibility Assessment Agreement
between the County of Weld, State of Colorado, by and through the Board of County
Commissioners of Weld County, on behalf of the Weld County Area Agency on Aging and NCB
Development Corporation, commencing July 19, 1996, and ending September 30, 1996, with
further terms and conditions being as stated in said agreement, and
WHEREAS, after review, the Board deems it advisable to approve said agreement, a
copy of which is attached hereto and incorporated herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of
Weld County, Colorado, that the Feasibility Assessment Agreement between the County of
Weld, State of Colorado, by and through the Board of County Commissioners of Weld County,
on behalf of the Weld County Area Agency on Aging and NCB Development Corporation, be,
and hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the Chair be, and hereby is, authorized
to sign said agreement.
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 5th day of August, A.D., 1996, nunc pro tunc July 19, 1996.
BOARD OF COUNTY COMMISSIONERS
, /�i WELD COUNTY, COLORADO
/ ,n0A ST/ � � /' /� //l- FXCI1sFl]
Barbara J. Kirkmeyer, Chair
W CadMtylerk to e oar
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'l n C. orge E. Baxter, ro-Tem
BY: ...--‘,00-4,
Deputy er to the Board
Dale K. Hall
APP D AS TO FO �1»s-ax�t�X9 .7
Constance L. Hrbert /�
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961356
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NCB Development Corporation
FEASIBILITY ASSESSMENT AGREEMENT
This Feasibility Assessment Agreement(the "Agreement") is made and entered into this
19th day of July, 1996 by and between NCB Development Corporation, a District of Columbia
corporation("NCBDC") and the Board of County Commissioners of the County of Weld, State
of Colorage, on behalf of the Weld County Area Agency on Aging (the "Sponsor").
WHEREAS, NCBDC is a nonprofit corporation duly formed, validly existing, and in
good standing under the laws of the District of Columbia and qualified to transact business in the
State of California and otherwise where and as required by its operation.
WHEREAS,NCBDC is undertaking a program for the development of community-based
systems of care for the frail elderly in rural communities throughout the United States called the
Coming Home Program.
WHEREAS, under the Coming Home Program,NCBDC works with local community
organizations to contribute to a sponsor's development and management of a Coming Home
Program project through capital and technical services.
WHEREAS, NCBDC, through the Coming Home Program, provides technical and
financial assistance to community-based project sponsors to assist project sponsors in the design
and implementation of systems of care that coordinate and integrate health, social and personal
care services and housing for the elderly residing in the sponsor's community.
WHEREAS, to be selected as a Coming Home Program project sponsor, the project
sponsor, among other things, must meet various site selection criteria developed by NCBDC.
WHEREAS,NCBDC has identified the Sponsor as a potential Coming Home Program
project sponsor.
WHEREAS,NCBDC and the Sponsor wish to undertake a feasibility assessment to
determine whether the necessary financial and management capability are present to allow the
Sponsor to meet the Coming Home Program's goals and the Sponsor's community contains a
viable project site.
-14 Montgomery Street. Suite ti 10 A national progr:on suhponcd I)\
San Francisco, CA 94104 The Robert Wood Johnson Found.tuon
(415) 834-6980 with direction and techni(:al assist incc
Fax (415) 834-6985 provided be NCR Development C rpotation
961356
WHEREAS,NCBDC and the Sponsor agree that NCBDC shall retain a consultant or
consultants (the "Consultant") to perform the feasibility assessment and that the Sponsor shall
reimburse NCBDC for twenty percent(20%) of the Consultant's costs and shall cooperate with
and assist the Consultant during the feasibility assessment.
WHEREAS, based on the Consultant's feasibility assessment and NCBDC's continued
experience with the Coming Home Program, NCBDC may or may not decide to proceed with
implementing the Coming Home Program in the Sponsor's community.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement,NCBDC and the Sponsor agree as follows:
1. TERM OF AGREEMENT. The term of this Agreement is for three (3) months
and shall commence on the date of this Agreement written above. This Agreement shall
terminate on September 30, 1996 unless terminated earlier pursuant to Section 3, below.
2. CONSULTANT. NCBDC and the Sponsor agree that:
a. NCBDC shall retain Moore Diversified Services, Inc. of Fort Worth,
Texas as the Consultant to perform the feasibility assessment to determine the financial and
management capability available to the Sponsor and to determine whether the Sponsor's
community contains a viable project site for the Coming Home Program. NCBDC shall be
responsible for determining the scope of services to be performed by the Consultant and shall
supervise the Consultant during the feasibility assessment. The Consultant shall submit all
reports and related materials to NCBDC for its review and approval. NCBDC shall submit the
draft and final Consultant report to the Sponsor.
b. The Consultant shall be paid a total of Twelve Thousand Six Hundred
Dollars ($12,600) for conducting the feasibility assessment as described in Exhibit A. NCBDC
shall pay the Consultant directly for services rendered.
c. The Sponsor will reimburse NCBDC for twenty (20%) of the costs for a
total reimbursement by the Sponsor of Two Thousand Five Hundred Twenty Dollars ($2,520)
for the feasibility assessment, unless reimbursement is increased as provided for under paragraph
4 below. Any Consultant costs which exceed the total Consultant contract amount specified
above shall be the responsibility of NCBDC and the Sponsor shall have no obligation to
reimburse NCBDC for any of those costs.
d. The Sponsor will reimburse NCBDC twenty percent (20%) of each
payment to Consultant within ten(10) working days after NCBDC provides written
documentation to the Sponsor of NCBDC's payment to Consultant.
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e. The Sponsor agrees to cooperate with the Consultant in conducting the
feasibility assessment. The Sponsor shall provide the Consultant with information requested by
the Consultant regarding the Sponsor's organization and shall assist the Consultant, where
possible, in the consultant's collection of the necessary financial and market information to
determine the viability and the scope of the proposed project and any project site or sites.
£ Should the feasibility assessment show that a project is feasible and that
project proceeds to construction, the cost of the feasibility assessment shall become a capitalized
cost of the Project and both Sponsor and NCBDC shall be reimbursed from the construction loan
according to their payments as stated in Section 2(b) and 2(c) above.
3. TERMINATION OF AGREEMENT. NCBDC or the Sponsor may terminate
this Agreement without cause upon fifteen (15) days written notice to the other party stating the
date of termination. Such termination notice shall be made in accordance with the Notice section
of this Agreement. Upon termination of this Agreement, the Sponsor shall reimburse NCBDC
twenty percent(20%) for all work performed by the Consultant which is paid or payable as of the
date of termination.
4. NO OBLIGATION BEYOND FEASIBILITY ASSESSMENT. NCBDC and
the Sponsor agree that NCBDC has no obligation to select the Sponsor as a project sponsor in the
Coming Home Program and that any decision to select a Coming Home Program project sponsor
shall be made in NCBDC's sole discretion. NCBDC and the Sponsor agree that the Sponsor
shall not have any obligation to participate in the Coming Home Program beyond the feasibility
assessment period. However, if the Sponsor elects not to participate in the Coming Home
Program following completion of the feasibility assessment, and assuming a project is otherwise
viable based on the Consultant's analysis and Coming Home Program guidelines, then the
Sponsor may be obligated to reimburse NCBDC for 100% of the amount paid to the Consultant
as described in Section 2(b) above.
5. NOTICES. Any notice to be given pursuant to this Agreement by either party
may be accomplished by first class certified mail, return receipt requested or express delivery
with receipt. Notices shall be addressed as set forth below, and each party may change its
address by written notice in accordance with this Section 5.
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To NCBDC: NCB Development Corporation
44 Montgomery Street
Suite 610
San Francisco, CA 94104
Attn: John Rimbach
To Sponsor: Board of County Commissioners of the County of Weld, State
of Colorado, on behalf of the Weld County Area Agency on Aging
1557 North 17th Ave.
P.O. Box 1805
Greeley, CO 80632
ATTN: Barbara J. Kirkmeyer, Chair
Notice shall be deemed received on the date shown on the delivery receipt as the date of
delivery, the date delivery was refused or the date the notice was returned as undeliverable.
6. RIGHT OF FIRST REFUSAL TO EXTEND CREDIT. The Sponsor shall
extend to NCBDC the right of first refusal to extend credit or financial advisory services
necessary to meet financing requirements that arise during implementation of the Coming Home
Program. NCBDC will be able to exercise this right in its sole discretion. The Sponsor may
deny NCBDC's right to provide such financing only in the event that the Sponsor is able to
secure financing elsewhere on terms and conditions more favorable than those offered by
NCBDC.
7. ARBITRATION. All disputes arising out of this Agreement shall be submitted
to the American Arbitration Association and finally determined by arbitration in accordance with
the commercial arbitration rules of the American Arbitration Association then in effect. The
arbitration award shall be final and the judgment may be entered pursuant to the award by any
court with appropriate jurisdiction. A party may submit a request for arbitration by submitting a
written request to the other party as specified by this Agreement.
8. ASSIGNMENT. Neither NCBDC nor the Sponsor shall assign this Agreement
or any portion of this Agreement or to delegate any duties or obligations arising under this
Agreement without the express written consent of the other party.
9. WAIVER. Any waiver by a party of any obligation in this Agreement must be in
writing. No waiver will be implied from any delay or failure by a party to take action on any
breach or default of the other party. Consent by a party to any act or omission by the other party
shall not be construed to be a consent to any other or subsequent act or omission or to waive the
requirement for written consent to future waivers.
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10. AMENDMENTS AND MODIFICATIONS. Any amendments or modifications
to this Agreement must be in writing, and shall be made only if executed by both NCBDC and
the Sponsor.
11. ATTORNEYS' FEES. In the event of any action between the parties to this
Agreement to enforce any of the provisions of this Agreement,the unsuccessful party to such
action agrees to pay to the successful party all costs and expenses, including reasonable
attorneys' fees incurred by the successful party, all of which may be included as part of the
judgment rendered in such action.
12. SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable the remaining provisions shall not be affected thereby, and every provision hereof
shall be valid and enforceable to the fullest extent permitted by law.
13. HEADINGS. The title and headings of the various sections of this Agreement
are intended for means of reference and are not intended to place any construction on the
provisions of this Agreement.
14. ENTIRE AGREEMENT. The terms of this Agreement are intended by NCBDC
and the Sponsor as a final expression of their agreement and supersede any prior or
contemporaneous agreement. NCBDC and the Sponsor further intend that this Agreement
constitutes the exclusive statement of its terms and that no extrinsic evidence whatsoever may be
introduced in any proceedings involving this Agreement.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
17. NO THIRD PARTY BENEFICIARY ENFORCEMENT. It is expressly
understood and agreed that enforcement of the terms and conditions of this Agreement, and all
rights of action relative to such enforcement, shall be strictly reserved to NCBDC and the
Sponsor, and nothing contained in this Agreement shall give or allow any claim or right of action
whatsoever by any other person on this Agreement. It is the express intention of NCBDC and
the Sponsor that any entity other than NCBDC or the Sponsor receiving services or benefits or
who is otherwise affected by the performance of the terms of this Agreement shall be deemed an
incidental beneficiary only.
18. NO WAIVER OF IMMUNITIES. No portion of this Agreement shall be
deemed to constitute a waiver of any immunities the parties or their officers or employees may
possess, nor shall any portion of this Agreement be deemed to have created a duty of care with
respect to any persons not a party to this Agreement.
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The parties have executed this Agreement on or as of the date first above written.
NCBDC: SPONSOR:
NCB Development Corporation Board of County Commissioners of the County of
Weld, State of Colorado, on behalf of the Weld
��•. Area Agency on Aging
q: D dNolan •
�` Hal, Tem orar �Ch 96
Chair
Its: Vice President WI AC r
V117 ir
961356
MARKET FEASIBILITY STUDY
DACONA, COLORADO
• WORK SCOPE
• SCHEDULE
• PROFESSIONAL FEES
June 18, 1996
NIOSMoore Diversified Services, Inc.
Market Research/Business Consulting
817-731-4266 • Fax 817-738-2O31
3001 Halloran Street - Suite C • Fort Worth, Texas 76107
961356
EXHIBIT 1
SCHEDULE FOR THE DACONA, COLORADO PROJECT
Assume
June 28th
Go-Ahead
I. Project Authorization 6/28
II. Preliminary Data Work-Up, Site Area Inspection To be
and Field Research Trip: Scheduled
• Project Go/No-Go Decision'
III. Complete Technical Exhibits 7/29
IV. Submit Final Report: 8/5
• Client and National Cooperative Bank Briefing
MDS can modify these schedule milestones to
accommodate specific sponsor and National
Cooperative Bank needs.
'Project can be stopped/terminated at this point should evidence and research findings
point to a project of questionable feasibility. A go/no-go decision will be made before
costs of not more than $5,000 are incurred.
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EXHIBIT 2
CONSOLIDATED PROFESSIONAL FEES FOR
MARKET FEASIBILITY STUDY IN
DACONA, COLORADO
I. MDS' Firm-Fixed Consulting Fee
• Typical Market Feasibility Study
Professional Fee $14,800
• Fee Reduction for Small Market
Consideration -- 15% (2,220)
• Additional Fee Reduction for Conducting
Multiple Studies Concurrently -- 10% 1 4�
Subtotal $11,100
• Plus Fee for Additional Work Scope as
Outlined in Memo Dated January 4, 1996
and Included as Attachment B 1,500
TOTAL COST $12,600
Plus Expenses'
II. Progress Payment Schedule
Total Cost $12,600'
• Project Initiation Fee 50% $ 6,300
• Delivery of Preliminary Draft of
Report for Review by Client 40 5,040
• Delivery/Acceptance of Final Report 10 1,260
'This firm-fixed consulting fee would not include travel and lodging expenses incurred with
field trips to the area, long distance telephone charges and Federal Express and other
courier methods authorized by the client. These out-of-pocket expenses will be billed at
direct cost to the client -- with no markup.
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ATTACHMENT A
MARKET FEASIBILITY STUDY
WORK SCOPE
MOSMoore Diversified Services, Inc.
Market Research/Business Consulting
817-731-4266 • Fax 817-738-2O31
3001 Halloran Street - Suite C • Fort Worth, Texas 76107
961356
GENERAL MARKET FEASIBILITY OBJECTIVES
AND EXPECTED OUTCOMES
1. Overall Market Feasibility -- Establish the overall market feasibility for the project.
2. Risk-Bearing Decisions -- Assist the Development/Sponsor Team in making the right
internal risk-bearing decisions.
3. Business Mission -- Provide a clear understanding of the Business Mission -- the
products and services which can be provided and the specific markets that these
products will serve at the subject site.
4. Market Penetration Rates -- Determine the required penetration rates or size and
depth of the age and income qualified market for each of the products/services to be
provided.
5. Absorption Rate -- Develop realistic and achievable unit absorption projections to
reach stabilized project occupancy.
6. Project Phasing -- Where relevant, determine how phasing can be implemented and
risks hedged in order to optimize the overall development of the project.
7. Strengths and Weaknesses -- Evaluate the project's strengths and weaknesses within
the market area and with respect to the existing and announced competition.
8. Executive Summary Report -- Provide detailed technical analysis, Executive Summary
information, professional opinions, and implied strategies for consideration by the
Development/Sponsor Team and other interests.
9. Communications Recap -- Provide an objective and professional communication
package for professional staff, board members and lenders. It may also be necessary
to submit the study results to planning and zoning panels and bond inducement
committees.
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MARKET FEASIBILITY STUDY OUTLINE
I. Conduct Economic Base Study
• Determine Total Number of Age & Income Qualified Households
• Conduct Age Cohort Segmentation/Projections
• Establish Qualifying Income Criteria
• Determine Impact of Home Equity on Affordability
• Identify Forecasting Safety Margins -- Utilizing Conservative Assumptions
II. Determine Relevant Market Areas
• Definition/Philosophy for PMA vs. SMA1
• Impact of Population Mobility Trends on Seniors
• Determine Impact of Decision Influencers (Children)
III. Conduct Specific Site Analysis
• Existing Site/Development Description
• Surrounding Development
• Supporting Amenities
• Evaluate Alternative Sites -- Where Applicable
IV. Analysis of Maior Competition
• Independent Living/Congregate Care
• Assisted Living/Personal Care
• Nursing Homes
• Other Senior Housing Products/Services
• Hospital/Acute Care/Managed Care Impacts -- Where Relevant
V. Estimate Overall Project Penetration Rates
• By Age Cohort
• By Qualifying Income Criteria
• PMA vs. SMA
• Considering Competition
• Considering Resident Turnover
1Primary and Secondary Market Areas
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Market Feasibility Study Outline
VI. Conduct Unit Absorption Scenarios
• Estimate Time to Stabilized Occupancy
VII. Product/Project Definition and Market Positioning
• Establish Product Mix:
- Independent Living
- Assisted Living
- Other Products
• Specific Living Unit Characteristics:
- Mix
- Sizes/Living Areas
- Pricing Structure
• Recommend Services and Amenities
VIII. Prepare Final Report
• Technical Exhibits
• Narratives
• Professional Opinion of Project Feasibility
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MARKET FEASIBILITY STUDY TASK DESCRIPTIONS
I. Economic Base Study
The economic base study consists of a complete analysis of past population and
housing trends, along with projections for the future -- with special emphasis on
Senior market segments. It will include an evaluation of the mix of the market
area population and households by age cohorts, income cohorts, owner vs. renter
mix and other key demographics. The end result of this task will provide the basis
for determining the relative size, depth and quality of the potential market for the
proposed retirement living products and services. In addition to the Senior
market, MDS will also evaluate and express a professional opinion regarding the
potential impact of the very important decision influencer market or adult children
of Seniors.
MDS will obtain current demographics for the project's Primary and Secondary
Market Areas from Claritas/NPDC, a national provider of demographics based in
Ithaca, New York. Claritas/NPDC is one of the leading demographic suppliers
which has a report targeted specifically toward the Senior segment of the
population. MDS will utilize the data from these demographic reports in the MDS
computer demand model in order to determine the required penetration
rates/demand for independent, assisted living and health care products and
services.
II. Market Area Determination
This effort specifically determines where the majority of the unit absorption will
come from for the subject project. By properly defining the Primary, Secondary,
and, in some cases, Tertiary Market Areas, MDS establishes clearly and succinctly
where project absorption or fill will originate.
This evaluation will be conducted in part during MDS' field trip to the market
area. Migration propensities, natural/man-made geographic barriers and
psychological or other types of barriers will be considered in this analysis. The
evaluation will also include a historical/current resident origin analysis for the
major independent and assisted living competitors in the market area.
III. Site Location Analysis
A detailed analysis of the physical and qualitative characteristics of the site --
clearly defining both superior advantages and competitive market challenges. An
analysis will be conducted of the overall compatibility/suitability of the site with
respect to the immediate surrounding neighborhoods and overall Primary Market
Area.
This detailed analysis will be conducted during MDS' field trip to the area.
A-4 961356
Market Feasibility Study Task Descriptions
IV. Analysis of Competition
Having a clear definition of the competition in terms of number of units, as well
as size, design, pricing characteristics and services and amenities, is necessary in
order to develop a unique and effective market positioning strategy for the project
being contemplated.
A comprehensive evaluation of the competition will be conducted using a number
of approaches/techniques:
• Analysis of MDS internal database
• Review of data provided by the client
• Comprehensive telephone survey of market area competitors
• "Mystery Shopping"/Visit to key competition during MDS'
field trip to the market area
It is MDS' policy to contact major competitors multiple times in order to obtain
all relevant data and to ensure the accuracy of the data collected.
V. Estimate Project Penetration Rates
MDS will estimate the required project penetration rates for the subject project
-- giving consideration to net available age and income qualified households, both
existing and announced competition and unit turnover or natural attrition which
will occur at existing communities. The estimate of these penetration rates will
also give consideration to the expected absorption to be realized from each key
age cohort, as well as the units estimated to be absorbed from the PMA, SMA,
and, in some cases, Tertiary Market Areas.
MDS has developed a computer demand model which utilizes a combination of
accepted industry factors/ratios and specific market area data such as number of
households and income screening percentages by age cohort. MDS will run
several scenarios which show the impact of changing one or more of the factors
(such as qualifying income criteria or number of units to be absorbed) and
quantify the impacts of forecasting safety margins -- such as home equity impact
or the potential impact of the adult children decision influencers.
VI. Conduct Unit Absorption Scenarios
The economic base study and competitive analysis will establish supply and
demand trends. MDS will recommend three unit absorption scenarios -- a
pessimistic, an expected, and an achievable or optimistic schedule of unit
absorption over time. This will allow the project team complete visibility as to
realistic prospects for the project in terms of construction phasing and relative
risks during the fill-up period.
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Market Feasibility Study Task Descriptions
VI. Conduct Unit Absorption Scenarios (Continued)
The absorption rate analysis will be influenced by the following:
• Absorption rates of existing major competitors
• Our industry experience with state-of-the-art independent
and assisted living absorption in similar markets across the
nation.
Obviously, there will be other qualitative factors that will surface during the
feasibility analysis. These factors will be given consideration in determining the
most realistic absorption scenarios.
VII. EL Prnin
Where appropriate, MDS will offer complete product mix recommendations,
including the types of products to be offered at a particular site, specific design
and pricing details and services/amenities to be provided by these products. In
addition, MDS will offer recommendations regarding how to strategically position
such products in the competitive marketplace and when to appropriately sequence
their development and introduction into the marketplace.
VIII. Final Report
Results of all of the above research tasks will be documented in a Final Report.
This report will summarize market feasibility and provide supporting data with
both clarity and comprehensiveness. One of the purposes of the report should be
to communicate with other external interests, such as lenders and joint venture
partners. The report will be written in that context.
Special Strategic Consulting Tasks
As part of the normal scope applied to MDS feasibility studies, we also include certain
strategic consulting efforts that are of high value to the client. These include, but are not
necessarily limited to, the following:
1. Special Emphasis on Affordability and Pricing Models
In today's complex marketplace, Senior consumer affordability and willingness to
pay must be carefully integrated with project cost analysis to insure that the
market research results are consistent and realistic. Each market area has unique
responses and propensities to accept the variety of pricing models that exist in the
industry. MDS will determine affordability versus size and depth of the market
by applying the Sponsor/Development Team's cost estimates to appropriate
pricing analysis models. MDS will also suggest alternative pricing models --
consistent with both the market and the Sponsor/Development Team's objectives.
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961.356
Market Feasibility Study Task Descriptions
2. Design Concept Critique
MDS will perform a design concept critique for the project -- based on available
design concepts that will exist and are provided to MDS during the market
feasibility period. While we do not practice architecture, our significant experience
allows us to help the team evaluate design concepts in order to clearly show what
works and what does not in this very selective market sector.
3. The Provision of Miscellaneous Resources
MDS retains a complete file of hundreds of beneficial items to an emerging
congregate project. These items include:
• Design and campus "footprints" & building elevations
• Innovative living unit design configuration
• Typical common area amenities and features
• Sales aids and marketing brochures
• Typical advertising campaigns
• Sample residency contracts
• Key industry financial factors/ratios
• Lists of qualified architects, interior designers and marketing/
management firms.
MDS will make these resources available as part of our consulting engagement
involvement.
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ATTACHMENT B
SUMMARY OF EXPANDED
WORK SCOPE/REPORT
ENHANCEMENTS
mosMoore Diversified Sces, Inc.
Market Research/Busineerviss Consulting
817-731-4266 • Fax 817-738-2031
3001 Halloran Street - Suite C • Fort Worth, Texas 76107
961356
EXHIBIT 1
SUMMARY/CHECKLIST OF MDS'
ADDED SCOPE REPORT ENHANCEMENTS
I. Sharpen the Focus of the Demographic Analysis
1. Add more qualifying income thresholds:
• $10,000+
• $15,0000+
• $20,000+
• $15,000-$20,000 ?
or
• $15,000-$25,000 ?
2. Expand affordability thresholds:
• See Exhibit 2 for an example
3. If necessary/appropriate, make compatible with special state/local
entitlement programs
II. Competitive Analysis
1. Same approach/scope as in the past
plus
2. Expanded inventory, survey and definition of:
• Existing home and community-based services
• Available Senior services and health care system resources
• Identify potential gaps, overlaps, duplication and synergy in
service delivery to Seniors
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Exhibit 1
Summary/Checklist of MDS'
Added Scope Report Enhancements
3. Identify areas where availability of existing services can/may lower
operating costs at proposed facility
4. Are we truly addressing an unmet need?
• One entity more viable than others?
• One entity more likely to succeed -- long run?
• One part of continuum while other is isolated/stand-alone?
III. Site/Market Area Analysis
1. If site "given" for a project -- MDS to express specific professional
opinion as to its appropriateness
2. In some cases, MDS to evaluate multiple sites using:
• Pragmatic site ranking and scoring criteria
• Evaluation of ultimate cost in relation to overall project
financials (and project affordability):
- Acquisition cost When available -- provided
- Site development cost by client/NCB
IV. Facilitate Cost-Effective Project"No-Go"Recommendation--When Necessary
1. It is normal MDS policy to stop project if problems are obvious
2. MDS will now include an appropriate clause/requirement in each
contract/engagement letter:
• Go/no-go decision to be made before costs of not more
than $5,000/study are incurred
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Exhibit 1
Summary/Checklist of MDS'
Added Scope Report Enhancements
V. Expand Licensing. Regulation and Entitlement Analysis
1. State regulations impacting the project
2. Local licensing/codes impacting the project
3. Comment on overall regulatory environment
4. Identify state and local monetary entitlements/supplements in the
following major categories:
• Standard/existing
• "Sleeper opportunities"
• Non-existing, but possible potential for beneficial solicitation
by NCB
• Formal and informal waivers
• Are there existing "task forces?"
VI. Evaluate the Adequacy/Potential of the Sponsor Organization
1. Systems and procedures
2. Organizational structure
3. Human resources; talent and experience
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EXHIBIT 2
(SAMPLE OF MDS APPROACH)
Summary of Price Vs. Value Positioning of Three Fountains
In summary, it is MDS' opinion that Three Fountains is a well-conceived project that
can compete very effectively with the existing competition -- as long as there is an
appropriate price versus value offset from new projects such as Classic Residence by Hyatt,
The Forum and, in some cases, Chambrel. Simply stated, Three Fountains offers a more
moderate pricing alternative to other competing projects in the area. This is very important
as a large number of Seniors on moderate -- but affordable -- incomes have been and will
continue to be attracted to Three Fountains. For example, the qualifying incomes for a one-
bedroom unit at the major competitors differs significantly from the qualifying incomes at
Three Fountains if one assumes the industry ratio that indicates that 65% of a Senior's
household cash flow income can be spent for a retirement community's monthly service fee.
As can be seen by Exhibit C-2 in Appendix C of this report, the minimum qualifying
cash flow income requirement for Three Fountains ranges from $21,068 for the efficiency
unit to $33,990 for the two-bedroom unit. For comparison purposes, the following table
outlines the minimum qualifying income criteria for each of the competitive projects:
Minimum
Qualifying Income
• Classic Residence by Hyatt $40,720 - $78,190
• Forum at Park Lane $41,260 - $84,700
• Chambrel $29,320 - $40,180
• Monticello West $26,060 - $37,900
• Treemont $21,710 - $36,920
• Presbyterian Village North $17,590 - $28,080
• Three Fountains $21,060 - $33,990
B-4 961356
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