Zeidel & Associates Retained by Longtime Client to Draft Agreements for $600 Million Project
Situation
A prominent national commercial real estate company – a longtime client of Zeidel & Associates – is developing a multi-phased project in the Dix Park area of Raleigh, NC, with four multi-family residential buildings, an office building, and common open space, estimated to cost a total of $600 million. The developer, the majority stakeholder in the project, is a developer, operator, investor, and lender with offices and projects throughout the United States.
Zeidel & Associates was retained to draft architect, engineering, pre-construction, and construction agreements.
Approach
The multiple construction and design professionals being hired for this project, coupled with its phasing, complicated the agreements’ structuring. For the first phase, our client retained two architects to design two of the mixed-use buildings and the common area between them and one contractor for the site work and the first two multi-use buildings.
The number of parties and changing terms of the project with different leverage positions and a client under tight scheduling deadlines made the coordination unwieldy. We needed to keep our client and the stable of design professionals focused on the endgame and agree on acceptable compromises. There was also concern about the limited partner who had additional issues at the 11th hour.
Result
To protect the different owner entities – distributing liability between the LLCs – and to craft a coordinated payment structure, we drafted separate construction agreements for the site work and buildings in the first phase rather than drafting one agreement. After nearly a year of negotiations, we completed the architect, engineering and construction agreements and had them fully executed with the complex framework for the first phase of this multi-year project.