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touchstone PORTMAN HoLDINGs RESPONDENT: Touchstone LC & Portman Holdings LLC
RFPDste October, 2018
Touchstone ic
‘yas Fourth Avene, Suite 200
Seat, Washington stron
‘Attention: Joseph Poto
Teephone: (206) 57-2306,
Ema polto@touchstonencom
Portman Hldings LLC
1303 Peachtree Center Avenue, ute 575
‘ine, GA 30303
‘tention: Jsnua Gately
“Telephone (404) 64-5052
Ena jgateyeportmanneldngscom
Lads and Gentlemen:
Inresponseto the Request for Proposal sued by JUL on behalf ofthe Cay of Seat (he “City” forthe
spostion of the Mercer Mega Sock te Project) the undersigned ("Developer") submits this
response (he “Response”. aly copalzed terms ot otherwise defined herln shal have the
‘meanings set forth nthe RFP.
closed, and by this reference incorporated herein and made apart ofthis Responses the tabbed
response to the RFP.
Developer acknonledges access tall materials posted onthe following webste with respect tothe
Project: icpsimyrermicomanerirtaldealoom as of the Submittal Due Date forthe RFP incdng
allsddende and questions and answers matrices sued in connection with this RF,
Developer represents and warrants tat lt has read and understands the RP and agrees to abide bythe
content and terms of the RFP.
Developer understands that JUL not bound to shortlist ary Developer and may eect each Response
that JLL may receive
Developer further understands that al costs and expenses incurred by tin preparing this Response and
particpating inthe process willbe borne solely by Developer.
Developer agrees tha JL or the City wl not be responsible foray eros, omisions, accuracies oF
incomplete statements inthe REP
‘This Response shall be governedby and construed inal respects acorcng to the laws ofthe State of
‘washington ‘Authored representative of Developer Pack Calan = CEO Touchstone LLC
by executing this form each Team Member conrms that he representative named above authorized
toact as agent on behalf ofthe Developer and the prncgal contact for the Developer In dealings with the
iy.
Developers business adress:
a5, Fourth Avenue Suite 200
oy ‘Gzret) ‘Foor or suit)
Sestte wa 92101 usa
oo me or Prewnes) por Posal Cady Country)
To be formed Joint Venere between Touchstone LLC & Portman Holdings LLC
‘State o Country of Incorporation Formation/Oxganzation: TED
Ae
Prine Name: ati Calahan
Tl: Authorized Signatory
co 7
Print Name: Ambrih Balswal
Tele CEO Executive Summary
Touchstone and Portman Holdings have teamed up to present a
compelling financial offer and comprehensive development plan for
the Mercer Mega Block parcels.
ith over 00 years of combined development
experience anda ten-year track ecord of over $26
baa of ew devine, partners brings ew
wel-capitaized and espected developers together,
‘establishing an experienced tar wth a reputation for
‘forward-thinking and performance driven development
(ur group provides the Cit of Seattle witha surety
‘of exection, and the best possibe partnership for
‘thelong-term succes ofthis projec. The enterprise
ormed by these two seasoned teams delves a
unique combination focal expertise and national and
interational experience
Touchstone sone ofthe most prolfic commercial
illon SF of mixed use developments and several
‘major urban lindmarks across North America, Asa,
and Erope. Today Portman Holdings ian efficient,
hight-2iled and wet-rounded realestate development
‘eam wth a speci focus on hospital, offi, and
rmised-se projects in urban nfilsettirgs. The vertically
inegrated ear command a substantia ba network
and hasa proven rack record with the works top
Francia stttions.
Ination to our strong balance sheets the team has
tremendous access to debt and equty capital rakes,
as evidence in the eters of nerestIncided we this
Proposal This as resulted ineffective capitalization
of complxstructures associated wih projects of
ths scale There are few fms who bring the fancia
security, reputation, and relay accompanying our
bid. Accordingly, we can approach these opportunities
with nimblenes ha wil llow us to adapt tothe
varying market conditions associated with ry expected
or unexpected changesin the economic ye PROGRAM
“The Mercer Meg lok provides the unique opporuity
te develop mere han one milion square fet Fin
‘the wbyant South Lake Union submaret. Our ton,
Mercer Square, to develop a world-class proc that
transforms the atv enironmen of South Lake Union
by proviing educational commercal and comeruity
Inrastcture accessible to allages and demographics.
"Mercer Square wil be ut hat communty square
whic captalesonthelocaton by providing ting
public ervircrment wih enhanced accesso employment
nodes education transit eta and entertain.
(ur development plan ncudes of, school resident,
theatre, and ret uses spread across the thee parcels
‘The Daxter parcel wil inlude 235,000 SF of affordabie
Cor market-rate resident units or 230.000 SF of office
space and 3.29000 square fot theatre. We have
recoved numerouslettrsofsupport and interest in
theater from local artists and insttions, nud
‘the Seattle Shakespeare Company, Cornish Colege of
DEVELOPMENT PLAN
a
‘the Ars, Whim W'Him, Spectrum Dance Theatre Kara
‘Stevens Dance, ARC Dance anothers. The Mercer East
and West ster ae enviionedtoincide over 75.000 SF
of ofc, 42000 SF of real nda 4.000 square foot
schooleducaton city,
“Through informal dcussions with neighborhood
employers and residents we have found that here is
strong deste for education and daycare faites.
the immediace neighborhood. A new downtown Seattle
School has been a discussion topic for mary years
Sengthening the presence of downtown schools wal
hop Seattle etn and attract more residents seeking
to rase fais cuding fails in our urban core
Is incredibly important in raining a verse mix of
residents downtown,
Wie pant include ul-ervice privately operated
eek daycare We are ale canidring the incision
lof es elementary schoo! that en acommodste
mnepeAae de
Cfce Space Education Reser
enertanment
etal Publi Spaces Transit cess spprosenatel 250 total students which could bein
partnership with Seattle Puble Schoals ara priate
Schoo operator.
‘The ast community benefe wehave ined in our
propolis an affordable housing development on
the Dexter Block We have partnered with ellwether
Housing to provide the best option fora succesful
sffordable housing developmen, Gelvether has
deeoped ove 1,000 affordable units since 580,
serving ove 3,200 individual annually, Ther missions
teres thle communities and access 0 0
tteough affordable housing,
SORE PS EE
unity
DESIGN
World renowned architecture frm Joh
‘Assocates created the bophil design of Mercer
Square to connect people and rature to the bul
emironmen. The corporation of geen elements and
‘the organic shape of the design is intended increase
‘the overal heath anc productivity ofthe inhabitants of
the baleng
By designing strong entrances and gateways tothe te,
\we envsion the ground floor of Mercer Square tobe
an extension of Lake Union are, proving gamer
spaces and peogrameing that wlinlude events and
‘experiences during altimes of ay. The ground floor
experiences intended to cultvate openness, provide
intrigue and generate curiosity. The landscape design
is imeended to provide connections tothe maura
‘word and we wl ntegrate retail ures and open space
programming vith comfortable paces tos and ue
stratege placement of interactive and Kinetic arto
provide a thriving pubic evronment that wil ve
access to msc, performances at shows fests and
mers market, OFFER
‘We have provided four diferent offers forthe
committee's review Fee Simple 2) Ground Lease
5) Fee Simple Mfocdable Housing 4 Ground Lease
‘Nfordable Housing Wehave done our bes to provide
multiple clear options, which respond to many ofthe
cbjectves outlined inthe RP, including ational
community Bnei, such asa schoo and a performing
arts space, and have partnered with Blivether Housing
to ensure that we can succesfully delver the requiste
affordable housing if desired. These options provide
the Gy of Seattle with maximum fexbilty nealing
revenue fom the sale ofthe Mercer Mega Block. Our
team has arranged numerous ransactons under both
structures andar confident in ou abity to coptaze
‘OFFER 1 (FEE SIMPLE)
$140,000,000 fee simple purchase.
‘OFFER 2 (GROUND LEASE)
and execute on this ecing opportunity. A deals
term sheet fr each offer hasbeen provided Francal
Cer section oft proposal,
Addionaly, we understand a parton of the fundsfrom
this ransaction may be used to repay an interfund
loan that was sed to fund construction projects
along Mercer Seo. the Cy of Seas asa neeé
For immediate cash proceeds to pay of thislean, anda
preference fora log term cwnership underground
ease, wecancreacea structure wena paca, prepa
{ground ese, Under ti etructure we would offer
a portion ofthe valve upfront ash proceeds and
morte the remaining value over 3 9. yergroundeae,
99-year groundlease at aland valuation of 140,000,200 with ss rent payments equating to an il anual
{ground rentof$:700,000, Rul ground rent escales 10% every 5 years with revahations every 25 years.
OFFER 3 (FEE SIMPLE AFFORDABLE HOUSING)
$85,000,000 fe simple purchase. This offer includes 24 afordable housing units at 60% of AMI on the
Deter Block. A detated summary ofthe land valve adjustments an pricing of the affordable housing
‘option() has been prowded in the Affordable Housing section of ths proposal
‘OFFER 4 (GROUND LEASE AFFORDABLE HOUSING)
‘9-year ground lease tala valuation of $85000,000 for the Merce locks (Deter Blckto be conveyed
{ee simple) with 558 ren payment equating to an itl annua round rent of $4,675,000. Awa ground
‘et esclates 10% every 5 years with revaluation every 25 years. This offer incudes 1 affordable housing,
units a 6096 of AMI on the Dester Block. & detailed summary ofthe and value adjustments and pricing of the
affordable housing option) has been provided in the affordable Housing section ofthis propos Project Concept and Public Benefits
Our vision is to ¢
multiple uses, spaces a
p a world-class project that consists of
\d experiences that promote equity and
community engagement, encourage innovation, and allow for
multiple activities,
Morro Square wil faster cenmity, eat and
inovaton by creating an environment where people
cof diverse backgrounds incomes and industries can
allcome to trve in the community together wile
working, ing leering and playing
“The locaton of Mercer Square includes procmiy to
several employers, menses and transit options. We
lant capitalize on ths location ad create a thriving
pubic enironmet by enhancing access to retail
experiences, outdoor gathering paces, daycare, Schoo!
and performing arts theater.
Per the City of Seattle's recently adopted 2035 plan,
South Lake Union one ofthe y's 6 “Urban
ents, and experiences.
‘entare Tha Cy deegnatsUrhan Contere ne ini
areas of concentrated employment and housing with
rec access to high-capacity transit anda wide range
of supportive land uses such as etal recreation, ube
feces, parks, and open space”
Consistent with this designation ad the fas growth of
South Lake Union our project contributes tothe area's
‘olution ntoan 18-hour neighborhood abuze with
sors, employees and residents supporting a valety
‘oF economic and public wses. This vison rounded
inthe cretion of atu mixed-se development
a busting, dense urban node fortify off,
residential and retal buldings Creating arta maze of office space is imperative
‘achieving our vison and we prioritized and
‘maximized office inthis proposal With its neresible
employment gronth, nd now recognized a word
cass employment center, Seattle hs experienced
tremendous amount office development inthe
current economic cyl. The employment growth and
new development have resued in robust absorption
rates, going rental ates, and have earned Seat the
reputation asthe strongest ofce market onthe West
Coast. Ths office gromth has been largely supported
by technology tenants. We bee this groth
continue and the demand should be accommadsted in
the areas the Cy has designated as Urban Centers
Mercer Blocks willbe ven by office and/or fe
Science REO uses and complemented by expertiy
curated retal gathering spaces, access to tant
and freeways. These buldngs ae intended to
accommodate the eypected employment grwth from
reward esting rajor employers. Our proposed
development for this site highlights vews of water,
‘mountains nd the cy styling ad cade maple
outdoor decks further supporting the bulléngs’
connection tothe natural Word
\Weh es advantageous lation in Seat arid
decadeslong growth, we view South ale Unianas one
ofthe country’ major his of nnovaton Asthe tract
ptlons continue 0 expan partly wth the arial of
Ightrallin2as, the neghiborhed wile exception
access tothe surrounding region Cental to major
“employment and wth aces to parks ike anes, the
Sleron Sente Center anc mass trans, Mercer Square
'sprine fora development ofthe sale andsgnficnce PROGRAMMING
MERCER WEST AND MERCER EAST
‘The Mercer East & West blocks il const of
approsimately 600,000 SF of total space, nding
‘ofc, etal, and tw educational components located
atthe Mezzanine level and level two.
Mercer West consists of ve floors of pour level
cofce with an average foc plate of 4,000 SF. The
large floor plates provid lenibeofce space ac were
designed to atact large technology tenants. Above the
psn inte Mars wil a aenage ete 2g
SF riseto an elevation of 18 feet above sea lve,
“The Mercer ast office tomer lsimiarin sign to
its counterpart onthe West;howeveritincudes two
‘educational components. Apre-Kldayeare and ks
facity occupy the mezzanine eve long ath Avenue
witha covered outdoor area atthe southeast corner of
the site The outdoor areas shed to get dct sunlight
inthe morning hours when the cidren wl beeft
‘mast from the experience Ks chacl ie placed at
level we, Both schools have unique ground-floor
lobbies with vertical ulation separate from the office
ulin 2 parking, o avoid any ross ceaton
between the diferent users.
Levels thre through sicontitute the podium ofthe
‘Mercer East block Similar tothe podium ofthe western
block the design provides large flexible floor plates
reachingan average of 3,000 SF per floor. The tower
above the podium s formed by rine addtional floors,
stan average #22 of 24,000 SF, reaching aheght of 10
feet above 2 eve
DEXTER BLOCK: RESIDENTIAL AND
PERFORMANCE THEATER
‘The Dexter block wil consist of ether 24 affordable
housing reside unt (wth retal and a 320 seat
performance thats), market rate apartments,
tional conmmeri ofc. Te residential design
Includes a pockum wth sieves of 17.800 SF floor plates
and a tower of 286 SF floor plates sng to hog of
152 fet above grace, whch accommodates the South
ake Union Seaport Fight Corridor
‘The ground floor othe affordable housing option
includes the residential lbby theater and etal. Once
the guests enter the theater rom the north east comer
ofthe block they can linger nthe re, double hight
re-function bby area ong oy street The nent
to showcase activity along the sidewalk asa election of
the ativty occuring within the space. The enty tothe
halls placed along the north where the audience can
cel enter to find ther eat. The min als centrally
located on the block right underneath he tower. The
ancl functions ofthe thete ar organize along the
parneter of thst al around the main hal.
‘Wie have received tremendous support from lca
community advocates as evidenced bythe ters of
support and interes tachedin the spend. We
blew that the theaer component of this project has
‘the pote to increase the nightie activ ofthe se,
bringing captive patrons to ery the retail and providing
an amenity that is misng fom this neighborhood.
m4f00 aR
Denar Foret 2.60 208
Meer West 68 gece sne00 020
Mecrtat 4067 wise ons még ta
Tt 4395 tasoo ge TSS Joost soto PARKING
Duero the uty tunnel running underneath Mercer Troughthe coordination ofthe design withthe
‘ies, we think it would be most efficient to design the esting tes and tunnl, the Mercer ast bloc ste
parking garage a shared garage. Our goal sto buld can accommodate five bacement lvl of poking wile
theminimum amount of parking that financially Mercer West can accommodate upto two level of
feasible and marketable, below rade parting, These parkinglevels are shared
between the two towers, The loading dock ares and
‘the shut elevators are tolated for each tower. rovides a unique d
eet a
er on
ld PUBLIC BENEFITS
(Our vain and proposalincide several community
benefits we feel are very mach needed inthe South
Lake Union neighborhood
scHooL
+ 35000 SF of space nthe Mercer East bulking
+ Our primary galinincuding this space isto
rovdeafacity within the South Lake Union
neighborhood that can serve a school for upto
20 Ks students
+ Large neighborhood employers an residents
Frequently state that an education and dayeare
faceless the need in South Lake Union.
+ Anew downtown Seattle schoo hae beena deczxon
topic for mary years as gronth indowntcnn
‘employment and residences has shyrocketd.
+ stengthening the presence of downtown schools
help Seale retain and atrat mare residents
seeking to rae fame.
+ This school could bein partnership with este
Public Schools ora private school operator
LOCAL BUSINESS MICRO RETAIL
++ Theretal and amenities of tis project il ot coy
bight ts location na thriving neighborhood, but
villas promote communal gathering and support
‘the needs ofthe fat growing residential population.
++ “Mcroxetalt space such 35 food hallwth shred
amen wil serve slr bsiezzes testing
new concepts o those hat prefer to have amore
‘rximate, bourque experience
+ Aholtie approach wth a pedestrian oriented etal
strategy wl complements the builing() uses and
eighborhood environment
++ Ongoing development ia SLU willenhance the
curreat ret experience inthe neighborhood and
bring an abundance of new residents and workers.
ie ervson many mere breweries, independent
cafes, restaurants and ungue reales. PERFORMING ARTS SPACE
+ The proposed thester is intended forthe many
non-profit performing arts groups that aren ied
of space in accessible and dense urban areas. Not
only wil che venue provide cultural and artistic
experiences inthe neighborhood, bu wil ao serve
asa practic acy and educational centr forthe
performing and visa arts
+ Foster collaboration among mutiple artiste and
‘utr groups, 35 wel as broad public accesso
performances, communty eases, educational
tranny and programming
++ Mutisunctionl space which canbe used sa
preseeain cece fr local empleyers rcv events
+ Create a place that supports the employment
of performing artists =a real component of a
balanced urban community
++ Weve receved numerous eters of interest and
support by performingarsergaizatonsin need
of space auch as Seat Shakespeare, ARC Dance
Productions, and Spectrum Dance Theater. These
eters are provide inthe append
PRESCHOOL / DAYCARE
+ Uke Touchstone’ West th project, we woul ook
toincorporatea daycare faity nour project atthe
Mercer East bung
+ Adacen othe proposed school and accessed wth
separate stairs and elevators, the daycare villain
‘the operator to have both interior and entero space
+ With the exterior space located on te second oor,
facing such, this space willbe safe, secure and
exposed to natural ight during most ofthe dy.
(Our vison inctudes public benefits that casa wide net
to bulking occupants, employees, community members,
residents ad vtors, Our thoughtful mio pube
benefits and overall design shold provide sorting for
everybody atalltimes othe day nd durngal seasons.
Collectively, he bulls ad uses within cur proposed