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|From: Rowena Conkling (rowenacworldnet.att.net)|
|Date: Mon, 9 Sep 1996 14:28:42 -0500|
You asked how much developer's are getting paid and what they are doing. You will find that the responses are all over the lot. I asked the same question last spring when we were first getting going and couldn't make a lot of sense of it. We ended up paying a development consultant a modest fee to review our agreement with the developer to see if it was reasonable; he made some minor suggestions but thought we had an OK deal. Anyway, here is a brief summary of the statement of work. Our Agreement breaks the work down into five phases. The first Phase ended when a purchase and sale agreement was signed on the property. Up to that time, our developer did not receive any payment! They searched for sites and developed preliminary schemes for three of them to show how the development might work, negotiated with the owners, developed preliminary budgets, etc. and did preliminary investigation of such matters as environmental problems. We did not use a realtor since one of the developers is also a realtor with extensive knowledge of the area, thereby saving a 5-6% fee. When the first phase was complete the developer received their first payment. The 2d Phase consisted of schematic design and review, working with the group to develop the master plan and common house requirements; meeting with groups of households wanting similar sized units to establish a "standard" size and layout; talking with individual households where necessary. All this preliminary design work was done "in-house." They assisted with marketing; investigated financing; obtained surveys and soils analysis; prepared documents and plans for application for a Special Permit and acted as liaisons with the city planning department. They discussed energy and environmental issues and efficiencies with the group. They investigated financing possibilities and obtained several rough construction estimates from contractors. They assisted in presentations to the neighbors. We are close to the end of phase two, which will be over when we pass papers at the end of the month (God willin' and the crik don't rise). The 3d Phase includes preparation of documentation for financing, finalizing permits and zoning approvals; updating business plans and cost estimates including operating budgets; assembling and coordinating the project team (architect, engineers, designers etc.); assisting in negotiating contracts between the cohousing group and the professional team; finalizing agreements for the affordability components. If environmental matters had been an issue (always a possibility in a developed area) this phase would include preparation of an environmental impact statement, etc. This phase will be complete when permits are obtained and when financing commitments for construction are secured. Phase 4 consists of design development and documentation. The final working drawings will be completed, design of units ("standard" and "upgrade" versions) and the common areas refined; finishes decided upon, etc. They will assist in preparing the construction contract, reviewing energy efficiency standards, and value engineering efforts. This phase will end when the building construction permit is obtained and the construction loan closed. Phase V will consist of construction oversight, with all the coordination that involves, including keeping peace with the neighbors. They will also assist in preparation of condo/coop documents and arrange management services if required. Phase five will end when the City issues a Certificate of Occupancy. What is Not Included: Fees of a third-party architect to complete working drawings, etc in phase 4; fees of other professionals - engineers, lawyers, etc. All these bills are paid directly by the Cohousing group - our Development Oversight Committee meets weekly with the Developers to go over everything that is planned and approve expenditures, etc. These fees are not included in the Project Cost on which the Developer's fees are based. In addition to all this, they attend most of our multitude of meetings and act as the first catch point for phone calls in response to flyers and brochures we circulate. We pay fee as follows: Phase 1 - 0%; Phase 2 - 25%; Phase 3 - 15%; Phase 4 - 10%; Phase 5 - 25%; Holdback 25% - payable upon issuance of the Certificate of Occupancy. I hope this helps. Rowenac [at] worldnet.att.net Cambridge Cohousing
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