Consideration and Approval of the award of Construction Contract: Innovation Mesa Business Accelerator and Alternate/Secondary Emergency Operations Center.

1) Approve the award of Construction Contract to FCI Constructors, Inc., and approve the Construction Contract with FCI Constructors Inc. in the amount of $5,938,338.00, and a 340 calendar-day contract period;  and
2) Approve Change Order Authority to the City Manager in the amount of $297,000 (5% of contract amount excluding allowance) for unanticipated or additional items of work; and
3) Authorize the City Manager to execute the necessary documents.

• Provide construction phase services for the Innovation Mesa Business Accelerator and Alternate/Secondary Emergency Operations Center project

• The total available funding is estimated to be $8,262,500 of which $6,519,452 is available for construction.

• Funding is broken down as follows:
  • $4,000,000 – Federal Economic Development Administration (EDA) Grant
  • $3,162,500 – City match via Bond Capacity
  • $1,100,000 – Northern Arizona University

• Retain, expand and diversify economic base.
• Effective governance

• Voters approved bonds to be repaid by facility leases on May 18, 2004, for construction of a Science and Technology Park on McMillan Mesa and/or renovation of USGS Campuses.
• Council approved an EDA grant on November 6,  2012, for the Innovation Mesa Business Accelerator and Alternate/Secondary Emergency Operations Center.
• Council approved the award of the design contract on July 16, 2013.
• Council approved the acceptance of the Intergovernmental Agreement with NAU for financial contribution from the Arizona Commerce Authority on July 16, 2013.

• Approve the award as recommended.
• Reject approval of the award, redesign the project and re-advertise for bids.  This option would have the effect of delaying the project by approximately nine months and could jeopardize the grant funding.

The Innovation Mesa Business Accelerator and Alternate/Secondary Emergency Operations Center (EOC), is intended to be the first of three buildings located adjacent to the USGS Campus and the Business Incubator, and will include a 28,000 square foot building featuring wet and dry labs/office space (80%) and light manufacturing space (20%), a conference room or alternate/secondary EOC, and server facilities. The primary purpose of the Business Accelerator is to provide space for Tier 2 companies and graduates of Northern Arizona Center for Entrepreneurship and Technology (NACET), as well as grow business startups and advance entrepreneurship and economic gardening programs within the region, and to retain and expand existing businesses through the creation of 300 jobs.  The building will feature an alternate/secondary EOC (as part of the conference room) should disaster related circumstances arise and warrant the need by either City and/or County personnel. 
 
The bid solicitation for the construction contract was published four times: April 27, May 4, May 11 and May 18,  2014.  Eight bids were received on May 28, 2014, at the office of the City Purchasing Agent.  A summary of bids received is shown below:
 
Architect's Estimate              $6,400,253.00
FCI Constructors Inc.              $5,938,338.00
TSG Constructors, LLC           $6,079,000.00
Loven Contracting                   $6,100,776.99
BEC Southwest                       $6,113,500.00
Sletten Companies                  $6,609,649.13
Roche Constructors                 $6,662,697.00
Concord General Contracting  $6,992,730.00
SDB Contracting Services       $7,015,116.00

The bid includes 18 deductive alternates. The EDA grant requires that the deductive alternates be evaluated for all bids in the order presented. Each deductive alternate is then subtracted from the base bid in the order listed until the total bid amount meets the project budget. The deductive alternates are sequenced to eliminate the lowest project priority first, and the highest priorities shown last, as follows:
 

ALTERNATIVE NO.	DESCRIPTION
18	Monument Sign Base
17	Feature Wall
16	Native Grass Irrigation
15	Ceilings in Hallway
14	Folding Partition in EOC
13	Northeast Patio
12	Operable Windows
11	Window Coverings
10	Automatic Doors
9	LED Lighting
8	Casework/Fumehood Lab 130
7	Casework/Fumehood Lab 131
6	Casework/Fumehood Lab 132
5	Carpet in offices
4	Insulation in Corridor Walls
3	Insulation in Dimising Walls
2	Eliminate One Chiller
1	Eliminate One Boiler

Upon completion of the bid evaluation, FCI Constructors Inc. is recommended as the responsive and responsible bidder.  FCI's base bid of $5,938,338.00 includes all 18 of the project elements listed above as deductive alternates.  Because the base bid includes the project elements, and the bid amount is within the project construction budget, no deductive alternates were required.
 
The contract period is 340 calendar days with anticipated construction completion by mid-June 2015.

Project expenditures will be funded as follows:
- EDA Grant share of $4,000,000
- City Bond Capacity of $3,162,500 repaid through tenant leases in the facility
- Northern Arizona University contribution of $1,100,000
 
The estimated budget for the project is currently funded in FY14 in the amount of $1,074,000 in account No. 404-09-422-3274-4.   Staff is requesting $7,353,467 in FY15 to cover the remaining design, construction and project administration.

The Innovation Mesa Business Accelerator and Alternate/Secondary Emergency Operations Center project will provide "soft landing" space for Tier 2 companies and graduates exiting NACET’s incubation program, and allows new companies wishing to enter the program to have space within the facilities at Innovation Mesa. This project is intended to create over 300 jobs and $20 million in private investment within the first three years of operation. The addition of wet and dry laboratories in this phase is critical to expand and grow existing companies in the region as there is currently no known existing lab space for them to operate. This project will allow our community to retain local businesses that may otherwise leave the region to seek these types of services and facilities.
 
Specifically, this project will benefit four groups:

• High technology and bioscience startups will result from technology transfer and commercialization of research conducted by NAU faculty and students
• Local entrepreneurs will become more competitive in the global market through the technical and business advice from NACET staff and their statewide mentors group.
• Existing firms and new firms will locate facilities in northern Arizona to take advantage of the Innovation Mesa’s facilities and to be near growing industry clusters. This facility is unlikely to compete with existing commercial facilities due to small lease areas, non-traditional finance terms, and lack of available lab space.
• Native American culturally specific businesses will be encouraged to expand their service areas through guidance from and access to NACET staff and business leaders serving on NACET's Advisory Committee.

 
Lastly, the purpose of the project is twofold: It will enable the City of Flagstaff to create an environment to recapture job losses resulting from emergency disasters by providing a facility should businesses be displaced; and, for Tier 2 companies and incubator graduates to expand and grow their businesses.  It also provides other agencies an alternate/secondary emergency operations center for first responders to efficiently deliver vital services to communities and tribal nations during natural disasters. The facility helps build economic resiliency through long term economic stability in the community.

Collaborate - This project is a shared vision with state, local, and private entities. This collaborative partnership involves the City of Flagstaff, Arizona Commerce Authority, Northern Arizona University, Economic Collaborative of Northern Arizona, Northern Arizona Council of Governments, and Northern Arizona Center for Entrepreneurship and Technology. This collaborative partnership has already shown a proven ability to work together to advance the economic needs of the region.
 
Staff presented the project to the Northern Arizona Council of Governments in the spring of 2012 and received full support of the project. On June 12, 2012, staff presented the project to Council outlining the EDA grant and business pro forma.  In addition, on August 30, 2012, staff conducted a public meeting as part of the Public Participation Plan associated with a Rezoning Application for Innovation Mesa - Phase 2.  On July 16, 2013, Council awarded the design phase services contract to APMI Inc. for the preparation of the design documents and the acceptance of the IGA with NAU for the financial assistance contribution from ACA.

1.         Approve the award as recommended.
2.         Reject approval of the award, redesign the project and re-advertise for bids.  This option would have the affect of delaying the start of construction by approximately nine months and could jeopardize the grant funding.