Zeidel & Associates Facilitates Efficient Contract Approach for Complex Ground Up Development

Situation

Our client, who had previously developed multi-use properties in Arizona and throughout the country, was the successful bidder with a partner for the purchase of over 2,000 acres of land in Arizona near a manufacturing plant development expected to create thousands of jobs. Our client intends to use the acreage to build a multi-use development community of residential and commercial properties to support the plant.

The client needed to start the process of retaining initial vendors for project services, such as master planning, economic analysis, branding, procurement engineering and architecture, but recognized that its partner had certain approval rights over these contracts that it needed our help to manage.

Approach

While Zeidel & Associates had represented this client for many years and had created contract forms to use in Arizona and elsewhere for these types of vendors, the client’s partner had negotiated approval rights over many vendor contracts in order to protect the partner’s interests and concerns.  In particular, the client was mindful of the fee thresholds that would trigger these approval rights and was concerned about potential delays to the project due to these approvals. Accordingly, it wished to find ways to expedite its partner’s approval process, which it had already found to be time-consuming prior to our involvement.

In order to address these concerns, the firm decided to seek the input of the partner’s counsel early on, so as to address any concerns up front. First, the firm created a multi-purpose form contract which could be adapted to engage a range of both consulting and construction services. The firm then provided this form to the client’s partner for review. As expected, the partner’s counsel expressed concerns with provisions such as indemnification, default, payment terms, insurance requirements and assignment terms.  Of particular importance to the partner were notice provisions and requirements for compliance with federal laws, for which it required specific language. The firm was able to quickly and efficiently collaborate with the partner’s counsel to finalize language for the contract form and gain its signoff on the contract form for use going forward. As the form was designed to retain many different kinds of service providers, the firm was then able to quickly implement the form for the beginning of development work, generally without the need to return to the partner for approval on a case by case basis.   

Result

The firm’s ability to work quickly and effectively with our client’s partner allowed us to create a template that our client can use for most vendor agreements in the early stages of development. Our client was very pleased with our ability to satisfy its partner’s counsel and minimize the need for future internal negotiations, thereby maintaining the project schedule.