A comprehensive Q&A regarding the proposed BJCC stadium project
There have been a lot of questions surrounding the proposed stadium project at the Birmingham-Jefferson Civic Center.
On Tuesday, the Birmingham City Council will vote on a “Resolution of Intent” to make efforts to financially support the construction of a new multi-purpose facility on property owned and operated by the BJCC, following the satisfaction of certain conditions.
In anticipation of last week’s Committee of the Whole meeting — at which Mayor Randall Woodfin spoke to the City Councilors about the City of Birmingham’s potential involvement with a new stadium project (as well as additional improvements to Legacy Arena) — Councilor Steven Hoyt submitted questions to the mayor and his team.
Below are the unabridged responses from Mayor Woodfin and BJCC officials.
Project Financing
Q: Does the BJCC intend to be the issuer of bonds to fund the stadium project?
A: Yes
Q: If so, does it plan to competitively bid, negotiate, or do a private placement of bonds to fund the project?
A: The pattern and practice of the BJCC Board has been to seek Requests for Proposals (RFP) for underwriters in all financing, with a specific requirement for minority firm participation in the underwriting team.
Q: What proactive provisions have been made to include diverse firms in every role and aspect of the project finance plan?
A: Provisions will be stipulated in every RFP to be developed and issued.
Q: Has anyone been selected for financial adviser role?
A: Porter, White & Company and Rice Advisory are MRSB registered Municipal Financial Advisors (with Series 50 qualified representatives) consistent with section 15B of the Securities Exchange Act, to the BJCC Authority for several years. They will continue to represent the BJCC Authority in this potential financing.
Q: Has anyone been selected for the underwriter role?
A: Not selected. RFPs have not been developed or issued
Q: Has anyone been selected for a trustee role?
A: Not selected. RFPs have not been developed or issued
Q: Has anyone been selected for bond counsel role?
A: Hobby Presley, now with Maynard Cooper, is the retained Bond Counsel for this transaction to the BJCC Authority. Mr. Presley has extensive experience with financial affairs of the Civic Center Authority.
Q: Does the BJCC have a certification process for diverse firms? If so, please provide a list of all the firms. If not, how will the BJCC ensure that minority-owned firms are hired to do work?
A: The BJCC collects vender registrations via its website and open house events to familiarize firms on doing business with the BJCC. The registration forms require the firm to identify any 51 percent ownership or active management by MBE (minority business enterprise)/HUB (historically underutilized business) classification. The BJCC does not ‘certify,’ however, many firms provide their own certification paperwork. We do not exclude firms for lack of ‘certification.’ Whether it is construction, financing or other services needed in the project, we will make it a priority to utilize companies that have a strong presence in the local area that are qualified and competitive to maximize the positive impact of this project on the local economy and business sector.
Q: There are diverse firms that do not have minority certification due to their level or revenue. Yet, these firms are minority-owned and should not be penalized due to their size. What provisions, if any, will you make in this instance?
A: We do not exclude for lack of ‘certification’ for the reason we do not want to limit opportunity.
Q: The funding for the project will come from what sources? (Example: city, state, county) What specific tax revenue sources will allocate funding to support debt service?
A: The BJCC Authority, via Acts of Alabama Legislature, receives allocations of the Jefferson County beverage tax, lodging tax, tobacco tax, sales and use tax, and onsite self-generated BJCC transactional taxes known as PILOTS (Payments in Lieu of Taxes). Additionally, ACT 2001–550 of the State of Alabama passed a levy of 3 percent on short-term automobile rentals. An amendment of this act allows for collections to begin upon a contractual commitment to construct a stadium. Additional sources from Jefferson County and the request of the City of Birmingham would be provided by each entity. Further, there will be sources involving the corporate community pledges, naming rights, and other sponsorship revenues in addition to a package of revenue from UAB.
Q: Are all funding partners providing the same amount of dollars to the project? If not, why?
A: The mix of contributions by funding partners vary. The Civic Center Authority will pledge $20.4 million with a coverage requirement yielding $10.7 million in annual debt service. ACT 2001–500 (car rental tax levy) is anticipated to yield $3.5 million toward annual debt service. Jefferson County has approved, by resolution, $1 million toward annual debt service and a 10-year taxable private placement secured by naming rights, sponsorships, and corporate community contributions. UAB will provide $4 million per year for the first 10 years of operation. The City of Birmingham is considering $3 million toward annual debt service. Total annual debt services is projected to be $21.5 million.
Construction Phase
Q: What firms has been engaged to be the lead designer for the stadium? Has this firm engaged local diverse firms as part of their team? If so, what firms and what percentage of the overall project will they be involved with?
A: A lead design firm has not been engaged to design the stadium. The BJCC Authority has worked with Populous, a world-renown global architectural design firm specializing in stadium, arena, and convention center design. Engagement with the firm is for the purpose of a master plan update and conceptual exercises and budgeting on the projects being discussed. They have not been retained for a full design engagement. At the time that is appropriate, there will be local participation with diversity in the design team.
Q: What civil engineering firm has been hired to lead the civil work on the project? Has this engineering firm engaged local diverse firms as part of their team?
A: A lead civil engineering firm has not been engaged for the full scope of work relative to either project. A local civic engineering firm has performed initial due diligence work for the purpose of arriving at a conceptual estimate, but engagement relative to ultimate construction has not occurred. As in all professional services, local diverse firms will be part of the team.
Q: What geotechnical firm has been hired to lead the sub-surface investigation work on the project? Has this geotechnical firm engaged local, diverse firms as part of their team? If so, what firms and in what roles?
A: No additional geotechnical work has been engaged since the 2010 effort under former Mayor Larry Langford, which provided a thorough initial study of the proposed site. At the appropriate time any geotechnical engagement will certainly include local and diverse firms as part of the team.
Q: How does the BJCC plan to procure a construction team for this project? (Example: Design, Bid, Build / Design-Build / Construction Manager (CM) at Risk / CM Agency / Integrated Project Delivery)
A: A final determination has not been made, but with the BJCC Authority, subject to Alabama Competitive Bid and Public Work laws, at least one delivery method, CM at Risk, is not available. There have been some initial discussions around CM Agency delivery, but that decision has not been made.
Q: What proactive provisions have been made to include diverse firms in every role and aspect of this the construction project?
A: Following models from other cities, as well as recent successful models on projects within the city, it’s critical to develop or adopt a plan that consists of defined activities and reporting in the Pre-Construction Phase (Recruitment and Partnering), Bidding Phase (Procurement and Partnering) and the Construction Phase (Reporting, Tracking and Partnering). The Board of Directors of the BJCC Authority, in the course of its February 2007 Strategic Planning Retreat, unanimously adopted a goal of 30 percent HUB (historically underutilized businesses) participation in expansion and capital projects. The Board of Directors with the BJCC Authority is committed to ensuring professional services and public works contracts entered into as part of the planned upcoming expansion. Further, renovation activities contain appropriate language to communicate the importance and expectation in working diligently toward the established 30 percent HUB participation goal. Ongoing monitoring and reporting to the Board, relative to achievement through expansion and renovation activities, will be required language in the contracts for any professional services and public works/competitive bid law agreements to the extent allowed by law.
These provisions and plans will apply to all the following disciplines listed in this document, and any that may not be specifically referenced: Design, engineering, program manager role, construction role, safety role, insurance role.
Q: Will the BJCC enter into a guaranteed maximum price contract for construction on the project?
A: Under Alabama Competitive Bid and Public Works laws, a guaranteed maximum price contract for construction is not possible. Public competitive bidding of work will be required under any delivery method selected by the BJCC Authority.
Q: Who will be responsible for cost overruns associated with the project?
A: The BJCC Authority.
Concession Operation/Other Goods and Services
Q: What is the plan to involve diverse firms in the concession contracts for the new facility?
A: The BJCC Authority, via public RFP process, selects a concession provider every three to five years. Local diverse inclusion in the team is part of each RFP process. Our current provider did involve local diversity in their team for the entire duration of their engagement with the BJCC.
Q: Will concessions be tied or linked to the existing contract?
A: That business point has not been determined, as the BJCC is just transitioning to a new provider selected as a result of a formal RFP process last fall. The new company, Centerplate, [has just begun operating in the BJCC as of last week]. Centerplate is committed to a strong local diverse partner and is in the final stages of selecting their partner for our account.
Q: Does the existing concession contract have diverse participants? If so, who are they?
A: Yes. Chef Clayton Sharrod is the current local participant.
Q: Does the BJCC plan to engage an Equity Officer over the course of this project, to manage and monitor diverse participation, and ensure that diverse firms are hired, paid in a timely manner, and treated fairly by prime contractors, and BJCC, etc.?
A: The BJCC agrees that managing all of these activities is of high importance for any project and specifically for such a highly visible project. How they are tracked and monitored has not yet been determined.
Ongoing Operations
Q: Does the BJCC envision hiring new FTEs (full-time equivalent/employee) to market and manage the new facility?
A: It is projected that 32 new FTEs will be added to manage the new facility. It is projected that indirectly the impacts of the new facility will generate 147 new FTE positions within the community.
Q: In this regard, will diverse candidates be considered for key/senior positions?
A: In keeping with all the BJCC’s hiring practices, which are by polity non-discriminatory and geared toward a diverse professional workforce, diverse candidates will be considered for all positions associated with the project.
Q: What is the plan for additional parking since parking is limited? Who will build the additional parking and will our Parking Authority operate it?
A: The BJCC Authority has, for some time, identified property for an additional parking deck. A comprehensive parking plan will be one of the first deliverables as the project moves forward. There have been preliminary parking plans developed throughout the history of the BJCC expansion initiatives by parking and traffic professionals. These plans provide a sound basis from which to start up-to-date planning. The impacts of the rebuilding of I-59/20 and changes to ramps, ingress and egress to the area will be a new consideration.
Who will build and who will operate have yet to be determined. Should the BJCC Authority construct the parking, it would likely be managed by its current operator. If built by another entity, the management decision would lie with the entity constructing the parking.
(There was also an exchange at the meeting, where Hoyt asked about the city committing to pay for the stadium for 30 years, and UAB committing to 10 years.)
Q: Does any part of this proposed project preclude UAB from building their own stadium at some point? I hardly think 10 years is really a great commitment. I’d hate for us to build this stadium and for some reason UAB decides they want to build their own stadium on campus as they continue to expand. We need to have a clause in there that precludes them from doing so.
A: [Woodfin] Let me partially answer that and [Tad Snider, executive director of BJCC] can give you way more detail than I can. Let me start by saying I agree with you. Part of this is a contractual relationship. I wouldn’t think that would be smart for them to do, but they are contractually obligated. I’ll let Tad tell you why its structured 10 years, as opposed to 30.
[Snider] To the mayor’s credit this is something we haven’t covered yet. It’s structured as 10 years because that is usually what naming rights and sponsorship agreements are structured as.
But any agreement between the BJCC and UAB is going to be a minimum of 20 years. The Memorandum of Understanding is being drawn up now. That’s a very astute point you’re making Councilor. No one wants to see us go through these exercises and build a new stadium on behalf of the community but obviously with UAB being a primary user, and not have it be used for that purpose. The agreement with UAB will be much longer than 10 years. There’s been no pushback or lack of willingness from UAB to want to participate.
