Noteworthy changes that would be incorporated with the adoption of the proposed amendment include the following items.

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1 ITEM PH5a OFFICE OF THE CITY ATTORNEY (910) FAX (910) TDD (910) /15/2017 City Council City Hall Wilmington, North Carolina Dear Mayor and Councilmembers: Attached for your consideration are two items associated with the City s Purchase and Development Agreement (PDA) with Water Street Ventures, LLC. The first, which requires a public hearing, is a resolution that would authorize the Mayor to enter into an amendment to the PDA for the construction of a public parking deck in association with the Riverplace development. The second is an ordinance associated with allocating funding sufficient to cover the additional costs should Council choose to pass the proposed PDA amendment. Proposed PDA Amendment: This resolution authorizes the Mayor, on the behalf of the City, to enter into an amendment to the existing PDA with Water Street Ventures, LLC. The amendment is necessary because guaranteed maximum prices, as provided by the general contractor for the project, have exceeded the City s maximum investment limitation set forth in the current PDA. The initial PDA included preliminary estimates that are no longer valid for the following reasons. 1. Rapidly rising construction costs in a thriving economic environment. 2. Cost allocations realignment to more appropriately reflect public and private improvements. 3. Errors in preliminary estimates and allocations. 4. Design changes. 5. Inclusion of some items previously developed as separate projects. As a result of these factors, the proposed PDA budget for the construction of Riverplace has risen from $75.6 million to approximately $83.6 million. City PDA construction costs have increased by approximately $3.8 million from $19,753,158 to $23,555,793. If the proposed amendment is adopted by Council, the City's PDA prescribed maximum allowable investment in the project would rise approximately $3.5m from $20,740,816 to $24,252,204. Noteworthy changes that would be incorporated with the adoption of the proposed amendment include the following items. A design change to accommodate the placement of an electrical transformer resulted in the loss of six parking spaces. The total number of spaces would now be 403, 235 of which will be leased to the developer. PH5a1

2 Value engineering measures are anticipated and have been shown in the Final Budget, but have not yet been included in final pricing. As a result, ultimate final costs could be decreased. Bijou Park extension (through the project) will be City constructed, owned and maintained. Aesthetic changes do not rise to the level of requiring Council approval. Contingency funds for the project are wholly contained in the delta between the Final Budget and the maximum allowable investment as prescribed in the PDA. That amount is equal to approximately three percent of construction costs. The developer must close on the purchase of the air rights within 45 days of Council adoption of this amendment. All development benchmarks key off of that closing date, leading to an anticipated completion of the project in February of Failure to pass this resolution will leave the existing terms if the PDA in place. Since the project costs, as set forth in the Final Budget, are projected to exceed the City s existing maximum PDA cost limitations, the City will have the option of walking away from the project. Based upon negotiations with the developer, it appears as though the project cannot be completed within the initial PDA limitation on City costs. Proposed Project Budget Ordinance: Should Council approve the aboveoutlined PDA amendment, it will be necessary to allocate sufficient proceeds to cover the City s additional costs. This proposed Budget Ordinance allocates approximately $3m to additional construction costs and $344,000 to interim financing costs. The proceeds are made available for this use as a result of capacity gained in the City s debt model created by an additional year of delay in the construction of this facility. Failure to pass this ordinance would result in insufficient funds being available for the amended costs of the project. Passage of the attached Resolution and Ordinance is recommended. Respectfully submitted, John D. Joye, City Attorney PH5a2

3 Resolution Introduced By: John D. Joye, City Attorney City Council City of Wilmington North Carolina Date: 8/15/2017 Resolution To Enter Into An Amendment To The Purchase And Development Agreement By And Between The City Of Wilmington And Water Street Ventures, LLC For The Redevelopment Of The Water Street Parking Facility LEGISLATIVE INTENT/PURPOSE: WHEREAS, the Wilmington City Council did, on June 21, 2016, pass a resolution authorizing a Purchase and Development Agreement (hereinafter PDA ) between the City and Water Street Ventures for the redevelopment of the Water Street Parking Facility; and, WHEREAS, the Mayor, on behalf of the City, executed the PDA on July 20, 2016; and, WHEREAS, the PDA contained a Preliminary Budget that outlined anticipated costs and cost sharing for the construction of a mixed use facility that included a public parking deck, retail uses and residential units; and, WHEREAS, in the year since entering into the PDA the parties have been engaged in further design and cost estimation that has led to the development of a Final Budget; and, WHEREAS, the current draft of the Final Budget contains costs for construction that exceed both previously anticipated total project costs as well as the previously designated Not to Exceed costs as set forth in the PDA; and, WHEREAS, both the City of Wilmington and Water Street Ventures believe that the proposed project is still in the best interest of both the public and private entities that are parties to the Purchase and Development Agreement. THEREFORE IT BE RESOLVED: THAT, the Wilmington City Council hereby approves and adopts, contingent upon the adoption of the appropriation ordinance, the Amendment to the Purchase and Development Agreement executed on July 20, 2016 and does hereby authorize the Mayor to execute and deliver the Amendment to the Purchase and Development Agreement with Water Street Ventures. Adopted at a meeting on 2017 Bill Saffo, Mayor ATTEST: Penelope SpicerSidbury, City Clerk APPROVED AS TO FORM: City Attorney PH5a3

4 STATE OF NORTH CAROLINA COUNTY OF NEW HANOVER AMENDMENT TO PURCHASE AND DEVELOPMENT AGREEMENT THIS AMENDMENT TO DEVELOPMENT AGREEMENT (the Amendment ) is made and entered into this day of, 2017 by and between WATER STREET VENTURES, LLC ( Water Street ), a North Carolina limited liability company, and the CITY OF WILMINGTON, a municipal corporation organized and existing under the laws of the State of North Carolina ( Wilmington or City ). I. BACKGROUND The City and Water Street previously entered into a Purchase and Development Agreement dated June 21, 2016 (the PDA ). Pursuant to Section 7.20 of the PDA, the PDA may be amended by written agreement duly executed by both parties; and WHEREAS, as provided by N.C.G.S. 160A457 and 160A458.3, the Wilmington City Council conducted a public hearing on August 15, 2017 to consider the approval and execution of this Amendment; and WHEREAS, pursuant to N.C.G.S. 160A457, a notice of public hearing was made, specifying the location of the property subject to the agreement and this Amendment, the development uses proposed on the property, a place where a copy of the proposed Amendment can be obtained; and WHEREAS, the Wilmington City Council has approved this Amendment along with the City s execution of the same. NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained, and for other good and valuable consideration the sufficiency and receipt of which is hereby acknowledged, the parties hereto agree as follows: Page 1 of 7 PH5a4

5 II. MODIFICATIONS OF AGREEMENT A. RECITALS Section 1.5(iii) is modified as follows: 1.5(iii) construct or cause to be constructed a public parking facility containing approximately parking spaces with a minimum of spaces to be reserved for public use (the Parking Facility ) (and the Parking Facility shall be wrapped in residential dwelling units along the Water Street side of the Project) to be located above and adjacent to the Commercial Space; B. TERMS a. Schedule and Costs Section 3.3 e) is modified by adding the underlined as follows: Developer shall finally complete all remaining work to be performed by Developer and shall cause certificates of occupancy to be issued for the Project no later than thirtysix (36) months following the Commencement of Construction ( Completion of Construction ), provided that the City may, through its City Manager, extend the date for the Completion of Construction up to six (6) additional months after Developer s written request and supporting documentation evidencing the need for such delay, such extension not to be unreasonably withheld, conditioned or delayed. Thereafter, any such written request by Developer for a further extension of the date for Completion of Construction and the supporting documentation must be approved by the City Council. The Developer shall not obtain a certificate of occupancy for any other part of the Project until the Parking Facility has received a certificate of occupancy and at least fifty percent (50 %) of the public spaces are available for use by the public. Section 3.3 is modified by adding a Subsection i) that shall read as follows: In no case shall the portions of the Final Budget for which the City is responsible be exceeded by the Developer or the Contractor without express prior permission as evidenced by the proper execution of a Change Order in accord with the City s standing policies and procedures. Section 3.3 is modified by adding Subsection j) that shall read as follows: All City Final Budget cost amounts based upon allowance pricing shall be billed according to the unit pricing with full recognition that if the number of units exceed current estimates, the City will be responsible for paying the additional amount; however, quantities not reaching the anticipated unit pricing allowances shall accrue to the City as cost savings on the Project. Page 2 of 7 PH5a5

6 Section 3.3 is modified by adding Subsection k) that shall read as follows: Should the Developer receive cost reimbursement, including but not limited to liquidated damages, from any contractor or subcontractor involved in the Project, the Developer shall share in any net reimbursement with the City in accordance with the City s proportional share of the associated Project Costs. Section 3.3 is modified by adding Subsection l) that shall read as follows: The Developer is encouraged to develop, prepare, and submit value engineering change proposals (VECPs) voluntarily. The Developer shall share in any net acquisition savings realized from accepted VECPs, in accordance with City s proportional share of the associated Project Costs or in accordance with the attached Exhibit. The Exhibits to this Amendment are attached and incorporated by reference as if fully set forth herein and, as such, shall represent the Final Schedule and Final Budget as specified in Section 3.3 of the PDA. b. Payments to Developer Section 3.6 is modified to increase the total cost of the Parking Facility which shall not exceed Twenty Five Million Two Hundred FiftyTwo Thousand Two Hundred Four ($25,252,204) dollars. This amount remains at less than fifty percent (50%) of the total costs of the Project. D. CLOSINGS a. Closing Article 5 is modified by deleting 5.1 and inserting the following 5.1 in lieu thereof: 5.1 Closing. The date for the purchase of the Air Rights Tract and the leasehold interest in the Leasehold Commercial Space ( Closing ) shall be no later than fortyfive (45) days after the Date of Modification Approval. The Closing shall be held in escrow through the offices of the City Attorney. At the Closing, the Parties agree as follows: Subsections 5.1 ac shall remain as stated in the PDA. b. Deadline Extensions The extension of this Closing Date shall also extend all other deadlines set forth in the PDA or the documentation to be entered into pursuant to the PDA in accordance with those provisions. Page 3 of 7 PH5a6

7 III. MISCELLANEOUS A. Public Hearing The City Council conducted a public hearing on August 15, 2017 to consider approval and execution of this Amendment. The City Council approved this Amendment and the City s execution of the same. B. Incorporation of Purchase and Development Agreement The PDA is incorporated by reference as if fully set forth herein. Except as modified by this Amendment, the PDA remains in full force and effect in accordance with its terms; however, this Amendment shall control in the event of any inconsistency between this Amendment and the PDA. Any terms capitalized in this Amendment but not defined in this Amendment shall have the meaning set forth in the PDA, as applicable. C. No Pledge of Taxing Power or Governmental Authority No provision of this Amendment shall be construed or interpreted as (1) creating a pledge of the faith and credit of the City within the meaning of any constitutional debt limitation, (2) delegating governmental powers, or (3) a donation or a lending of the credit of the City within the meaning of the Constitution of the State of North Carolina. No provision of this Amendment shall be construed to pledge or to create a lien on any class or source of City monies, or operate beyond its intended scope so as to restrict, to any extent prohibited by law, any future action or right of action on the part of the Wilmington City Council. The City has had this Amendment, and the obligations contemplated hereunder, preaudited to ensure compliance with the budgetary accounting requirements (if any) that apply. This Amendment is conditioned upon, and shall not become operative until, any required preaudited certification is supplied. D. Definitions All capitalized terms contained herein which are not otherwise defined within this Amendment shall have the meaning provided for such term in the PDA. 1. Change Order. A change order is a written instrument signed by the Parties stating their agreement upon change in the work; the amount of the adjustment, if any, in the Final Budget and Final Schedule. 2. Date of Modification Adoption. The date of modification adoption shall be the date that Water Street has signified its acceptance of the terms approved by the City of Wilmington in this Amendment through its execution. 3. Date of Modification Approval. The date of modification approval shall be that original date that the City of Wilmington votes to approve this Amendment. Page 4 of 7 PH5a7

8 E. Counterparts This Amendment may be executed in several counterparts, each of which shall be deemed an original, and such counterparts shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereby set their hands and seals, effective the date first above written. [SIGNATURE PAGES TO FOLLOW.] Page 5 of 7 PH5a8

9 Adopted by the City of Wilmington City Council, CITY OF WILMINGTON ATTEST: Penelope SpicerSidbury, City Clerk Bill Saffo, Mayor [SEAL] Approved as to form: John D. Joye, City Attorney STATE OF NORTH CAROLINA COUNTY OF NEW HANOVER I,, a Notary Public of County, North Carolina, certify that Penelope SpicerSidbury personally came before me this day and acknowledged that she is City Clerk of the City of Wilmington, and that by authority duly given and as the act of the Council, the foregoing instrument was signed in its name by its Mayor, sealed with its corporate seal and attested by herself as its City Clerk. WITNESS my hand and official seal, this day of, My commission expires: Notary Public CERTIFICATION This instrument has been preaudited in the manner required by The Local Government Budget and Fiscal Control Act. This day of, Jennifer Maready, City Finance Officer Project Number: (if applicable) Account Number: Amount of Contract: $ Federal ID Number: Page 6 of 7 PH5a9

10 WATER STREET VENTURES, LLC By: East West Water Street, LLC, its Manager By: East West Partners Management Company, Inc., its Manager By: Name: Title: ================================================================== State of North Carolina County of I, the undersigned, a Notary Public of the County and State aforesaid, do hereby certify that personally came before me this day and acknowledged that he or she is of East West Partners Management Company, Inc.,, Manager of East West Water Street, LLC, which is Manager of Water Street Ventures, LLC, and acknowledged, on behalf of Water Street Ventures, LLC, the due execution of the foregoing instrument. Witness my hand and official stamp or seal, this the day of, My Commission Expires: Notary Public Page 7 of 7 PH5a10

11 PDA Amendment #1 Final Schedule Project Schedule River Place Wilmington, NC Start Finish Duration Months Duration Days Days From Closing Closing 10/1/2017 Foundation Permit 11/01/ /16/ Parking Deck Demo/Site Preparation 11/01/ /16/ Foundation Construction 12/20/ /05/ Building Permit 01/06/ /22/ Final Plan 02/23/ City Approval Final Plan 02/23/ /25/ Building Construction 04/04/ /05/ Parking Deck Certificate of Occupancy 07/28/2019 Water Street Tower Certificate of Occupancy 10/24/2019 South Tower Certificate of Occupancy 12/08/2019 North Tower Certificate of Occupancy 02/05/2020 As Built Drawings 03/04/2020 PH5a11

12 PDA Amendment #1 Final Budget River Place, Water Street Redevelopment Wilmington, NC Developer City of Wilmington Item Total % Cost % Cost I Land Existing Improvments Cost Parking Garage $ 1,015, % $ 1,015,338 0% $ II. Site Costs Parking Deck* $ 21,782,308 0% $ 100% $ 21,782,308 Misc. Temporary Construction $ 89,352 72% $ 64,333 28% $ 25,019 III. Hard Costs Residential* $ 48,042, % $ 48,042,288 0% $ Retail* $ 3,111, % $ 3,111,977 0% $ *see Construction Costs IV. Soft Costs Professional Fees Appraisal Fee $ 5, % $ 5,000 0% $ Survey ALTA $ 15,000 72% $ 10,800 28% $ 4,200 Phase I ESA $ 5, % $ 5,000 0% $ Architectural $ 1,715,000 72% $ 1,234,800 28% $ 480,200 MEP/Structural $ 885,400 72% $ 637,488 28% $ 247,912 Civil Engineering $ 171,806 0% $ 100% $ 171,806 Misc. Design $ 83,621 72% $ 60,207 28% $ 23,414 Landscape Design $ 0% $ 100% $ Predevelopment Consulting $ 68, % $ 68,000 0% $ Market Study $ 15, % $ 15,270 0% $ Signage $ 90% $ 10% $ Interior Design $ 60, % $ 60,000 0% $ LEED Consulting & USGBC Fees $ 16,944 72% $ 12,200 28% $ 4,744 Water intrusion Consulting $ 20, % $ 20,000 0% $ Soils Rep, Additional Boring $ 8,000 0% $ 100% $ 8,000 Special Inspections (3rd Party) $ 378,923 72% $ 272,825 28% $ 106,099 Security System $ 72% $ 28% $ Fees & Permits All Government Fees $ 350,000 72% $ 252,000 28% $ 98,000 Marketing, Leasing, Brokerage, and Development Fees Marketing/LeaseUp $ 650, % $ 650,000 0% $ Leasing Fees: Retail/Office $ 249, % $ 249,804 0% $ Opening Deficit $ 200, % $ 200,000 0% $ DFI Predevelopment Fee $ 680, % $ 680,000 0% $ Development Fees $ 1,954,269 72% $ 1,407,074 28% $ 547,195 Closing/Project Costs Lender's Legal $ 125, % $ 125,000 0% $ Borrower's Legal $ 75, % $ 75,000 0% $ General Legal $ 50, % $ 50,000 0% $ Travel $ 72% $ 28% $ Audt Expense $ 20, % $ 20,000 0% $ Tax Preparation $ 15, % $ 15,000 0% $ Developer Insurance $ 25,000 72% $ 18,000 28% $ 7,000 Real Estate Taxes $ 50, % $ 50,000 0% $ Miscelaneous G&A $ 20,000 72% $ 14,400 28% $ 5,600 Title Insurance $ 35, % $ 35,000 0% $ *Site Access & Easements $ 158,200 72% $ 113,904 28% $ 44,296 Financing Costs Construction Interest $ 1,081, % $ 1,081,820 0% $ Mezzanine Interest $ 0% $ 100% $ Mortgage Brokerage Fee $ 200, % $ 200,000 0% $ Construction Loan Bank Fee $ 163, % $ 163,543 0% $ Total Costs $ 83,591,863 $ 60,036,071 $ 23,555,793 Page 1 of 1 PH5a12

13 PDA Amendment #1 Construction Budget River Place, Water Street Redevelopment Wilmington, NC Cost of the Work Residential Retail Parking Deck Total BP100 GENERAL TRADES $ 228,138 $ 25,349 $ 253,487 $ 506,974 BP102 TEMPORARY & PERMANENT FENCING $ 10,900 $ $ 15,500 $ 26,400 BP106 MATERIAL AND PERSONNEL HOIST $ 699,040 $ $ $ 699,040 BP107 TOWER CRANE $ 525,672 $ $ 525,672 $ 1,051,344 BP200 EARTHWORK & STORM DRAINAGE $ 393,104 $ 88,111 $ 2,752,924 $ 3,234,139 BP210 AUGER CAST PILES $ 774,876 $ $ 1,162,315 $ 1,937,191 BP215 DEMOLITION $ $ $ 370,215 $ 370,215 BP225 CONCRETE PAVING & SIDEWALKS $ 46,293 $ 81,818 $ 57,043 $ 185,154 BP226 UNIT PAVERS $ $ $ $ BP230 ASPHALT PAVING, STONE BASE & CURBS $ $ $ $ BP231 GRANITE CURBS $ $ $ $ BP232 STRIPING AND SITE SIGNS $ $ $ 49,354 $ 49,354 BP235 CONCRETE VAULT $ 179,801 $ $ 88,559 $ 268,360 BP236 VAULT ELECTRICAL $ 505,725 $ $ 249,088 $ 754,813 BP255 DUCTBANK UTILITIES $ $ 208,677 $ $ 208,677 BP290 LANDSCAPING & IRRIGATION $ $ $ $ BP292 FOUNTAIN $ $ $ 75,270 $ 75,270 BP293 SITE FURNISHINGS $ $ $ 4,421 $ 4,421 BP295 TERMITE TREATMENT $ $ $ $ BP305 CONCRETE SLAB ON METAL DECK $ 1,224,790 $ $ 71,505 $ 1,296,295 BP390 TURNKEY CONCRETE FRAME $ 4,103,335 $ 435,445 $ 8,640,919 $ 13,179,699 BP396 ARCHITECTURAL PRECAST CONCRETE $ 12,006 $ 114,475 $ 412,911 $ 539,392 BP400 TURNKEY MASONRY $ 3,238,125 $ 362,772 $ 971,402 $ 4,572,299 BP500 DESIGN/BUILD TURNKEY STRUCTURAL STEEL $ 4,081,203 $ 178,949 $ 370,518 $ 4,630,670 BP550 STEEL RAILS $ 357,503 $ 55,342 $ $ 412,845 BP555 EXPANSION JOINT COVERS $ 83,807 $ $ 20,041 $ 103,848 BP560 CABLE BARRIERS $ $ $ 144,900 $ 144,900 BP640 MILLWORK AND FINISH CARPENTRY $ 467,359 $ $ $ 467,359 BP710 WATERPOOFING $ 99,130 $ 37,921 $ 457,419 $ 594,470 BP720 BUILDING INSULATION $ 193,500 $ 64,500 $ $ 258,000 BP724 EXTERIOR INSULATION AND FINISH SYSTEMS (E.I.F.S.) $ 303,397 $ 20,378 $ $ 323,775 BP725 FIREPROOFING $ 340,760 $ $ $ 340,760 BP740 ROOFING $ 514,617 $ $ 13,347 $ 527,964 BP741 ROOF PEDASTEL PAVERS $ 123,651 $ $ $ 123,651 BP750 METAL WALL PANELS $ $ $ 149,554 $ 149,554 BP790 CAULKING $ 232,260 $ 7,450 $ 49,200 $ 288,910 BP800 COMMERCIAL DOORS/FRAMES/HARDWARE $ 432,900 $ 17,279 $ 28,091 $ 478,270 BP805 RESIDENTIAL DOORS/FRAMES/HARDWARE $ 485,085 $ $ $ 485,085 BP810 DOORS/FRAMES/HARDWARE INSTALLATION $ 63,778 $ 1,161 $ 1,161 $ 66,100 BP833 SMOKE DOORS $ $ $ 95,000 $ 95,000 BP836 OVERHEAD DOORS $ $ 10,995 $ $ 10,995 BP840 CURTAINWALL / STOREFRONT / GLASS & GLAZING $ 157,660 $ 420,565 $ 130,175 $ 708,400 BP841 RESIDENTIAL WINDOWS $ 1,322,525 $ $ $ 1,322,525 BP842 GLASS SHOWER DOORS $ 104,400 $ $ $ 104,400 BP843 MIRRORS AND MISC GLASS $ 91,080 $ $ $ 91,080 BP845 FLOOD PANEL BARRIERS $ 17,546 $ 114,009 $ 23,333 $ 154,888 BP900 FINISH ALLOWANCES $ 622,000 $ $ $ 622,000 BP925 METAL STUDS/DRYWALL/INSULATION $ 5,263,374 $ 23,836 $ 690 $ 5,287,900 BP930 CERAMIC TILE $ 664,337 $ $ 157,193 $ 821,530 BP960 RESILIENT FLOORING $ 247,111 $ $ 1,480 $ 248,591 BP961 CARPET $ 257,669 $ $ $ 257,669 BP965 WOOD FLOORING $ 420,226 $ $ $ 420,226 BP990 PAINTING AND WALLCOVERINGS $ 745,737 $ $ 5,138 $ 750,875 BP1005 TOILET SPECIALTIES $ 91,080 $ $ $ 91,080 BP1010 IDENTIFICATION DEVICES $ 30,223 $ 1,379 $ 68,010 $ 99,612 Page 1 of 2 PH5a13

14 PDA Amendment #1 Construction Budget BP1025 DIVISION 10 ACCESSORIES $ 92,366 $ $ $ 92,366 BP1027 CLOSET ACCESSORIES $ 48,742 $ $ $ 48,742 BP1115 PARKING EQUIPMENT $ $ $ 218,795 $ 218,795 BP1116 COMMERCIAL LAUNDRY EQUIPMENT $ 58,425 $ $ $ 58,425 BP1145 RESIDENTIAL APPLIANCES $ 1,026,379 $ $ $ 1,026,379 BP1230 CABINETS AND COUNTERTOPS $ 1,597,143 $ $ $ 1,597,143 BP1250 WINDOW TREATMENTS $ 75,769 $ $ $ 75,769 BP1350 SWIMMING POOL $ 360,108 $ $ $ 360,108 BP1400 ELEVATORS $ 912,989 $ $ 389,011 $ 1,302,000 BP1530 FIRE PROTECTION $ 385,860 $ 137,516 $ 415,844 $ 939,220 BP1540 PLUMBING $ 2,959,977 $ 152,024 $ 199,999 $ 3,312,000 BP1550 HVAC SYSTEMS $ 2,276,727 $ 163,508 $ 67,565 $ 2,507,800 BP1600 ELECTRICAL $ 4,700,289 $ 141,997 $ 1,062,714 $ 5,905,000 SUBTOTAL $ 44,250,498 $ 2,865,456 $ 19,769,762 $ 66,885,716 SUBCONTRACTOR BONDS $ 473,158 $ 31,564 $ 215,189 $ 719,911 CONSTRUCTION CONTINGENCY $ 442,504 $ 28,654 $ 98,849 $ 570,007 DESIGN/ESTIMATE CONTINGENCY $ $ $ $ ESCALATION $ $ $ $ COST OF WORK SUBTOTAL $ 45,166,161 $ 2,925,674 $ 20,083,800 $ 68,175,635 GENERAL CONDITIONS $ 1,656,640 $ 107,310 $ 975,492 $ 2,739,442 CONTRACTOR P&P BOND $ CONTRACTOR FEE $ 1,219,486 $ 78,993 $ 723,017 $ 2,021,496 CONSTRUCTION TOTAL $ 48,042,288 $ 3,111,977 $ 21,782,308 $ 72,936,573 Page 2 of 2 PH5a14

15 PDA Amendment #1 VE Savings Item # Value Engineering Savings Description Developer City Total Structural Waterproofing S04 Waterproofing admixture $ $ $ Foundation Modifications S06 Modify auger cast pile load test $ (1,760) $ (2,640) $ (4,400) S07 Modify auger cast test piles $ (3,981) $ (5,971) $ (9,952) S08 Modify reaction test load pile $ (3,981) $ (5,971) $ (9,952) S11 Alternate underslab fill $ (5,783) $ (42,406) $ (48,188) Vertical Structure Modifications S14 Alternate wall on column line A $ (9,011) $ (17,492) $ (26,504) S15 Alternate elevator penthouse construction $ (1,894) $ $ (1,894) S16.3 Alternate pour strip method $ $ $ S17.2 Alternate open air bridge design $ (54,086) $ $ (54,086) Exterior Envelope Brick Façade Modifications EX02 Alternate brick specification $ (4,965) $ (1,320) $ (6,285) EX03 Alternate anchor tie specificatioin $ (64,138) $ (17,049) $ (81,187) EX04 Alternate seismic anchor/tie requirement $ (22,096) $ (5,874) $ (27,970) EX05 Alternate insulation specification $ (165,097) $ $ (165,097) EX07 Alternate parking deck architectural detail $ $ (434,915) $ (434,915) EX08 Alternate brick lintel $ (41,379) $ (11,000) $ (52,379) Railings and Balconies Modifications EX9.3 Alternate railing package $ (42,615) $ (2,243) $ (44,858) EX35 EIFS modification $ (35,247) $ $ (35,247) Roofing, Coping, and Flashing Modifications EX13 Alternate coping $ (4,337) $ $ (4,337) EX14.1 Modified installation for copings $ (7,123) $ $ (7,123) EX18 Roof door alternate $ (838) $ $ (838) EX19 Add safety railing on roof hatches $ 7,453 $ $ 7,453 EX20 Alternate roof covering package $ (19,362) $ (496) $ (19,859) EX21 HVAC mounting modifications $ (67,045) $ $ (67,045) Windows and Storefront Modifications EX23.2 Alternate window package A $ (164,392) $ $ (164,392) EX34 Alternate window package B $ (37,713) $ $ (37,713) EX27.1 Modified paint specification $ (82,465) $ (18,102) $ (100,567) Slabs and Decks Modifications EX29 Alternate topping slab specification $ (59,485) $ $ (59,485) EX30 Alternate stair topping specification $ $ (164,671) $ (164,671) EX31 Modified insulated area specification $ (63,116) $ $ (63,116) Interiors Interior Finishes (CJMW) INT01 Alternate carpet specification A $ (20,847) $ $ (20,847) INT02 Alternate carpet specificatioin B $ (19,249) $ $ (19,249) INT03 Alternate toilet accessorites $ (20,951) $ $ (20,951) Interior Finishes (DMA) INT04 Modified framing specification $ (26,189) $ $ (26,189) INT05 Alternate door hardware package A $ (9,852) $ $ (9,852) INT06 Alternate door hardware package B $ (19,904) $ $ (19,904) INT10.2 Alternate storage space dividers $ (35,185) $ $ (35,185) INT11 Alternate acoustic ceiling specification $ (2,095) $ $ (2,095) INT12 Modified refuse room specificatioin $ (14,666) $ $ (14,666) INT13 Modified rated partition specificatioin $ (10,476) $ $ (10,476) Systems M.E.P. Plumbing River Place, Water Street Redevelopment Wilmington, NC Page 1 of 2 PH5a15

16 PDA Amendment #1 VE Savings MEP01 Alternate plumbing fixture package $ (63,797) $ $ (63,797) MEP02 Alternate riser specification $ (15,714) $ $ (15,714) MEP03 Modified meter package $ (49,262) $ $ (49,262) HVAC MEP09 Add grease duct & outside air ventilation $ 25,142 $ $ 25,142 MEP10 Alternate HVAC package $ (52,379) $ $ (52,379) Electrical MEP11 Alternate 350KW diesel generator $ (43,981) $ (9,654) $ (53,636) MEP12 Alternate lighting fixture package $ (246,923) $ (7,637) $ (254,560) MEP15 Add type 'F1' floor boxes $ 40,889 $ 8,976 $ 49,864 MEP16 Modified fire alarm control specification $ (40,227) $ $ (40,227) MEP18 Alternate fire alarm package $ (54,977) $ (12,068) $ (67,045) MEP19 Modified vehicle charging station package $ (42,427) $ $ (42,427) Elevator MEP20 Modified elevator specification A $ (19,694) $ $ (19,694) MEP21 Modified elevator specification B $ (113,976) $ $ (113,976) MEP22 Modified elevator control package $ (15,401) $ $ (15,401) Programmatic / Other PRG01 Align foundation start with deep utility work $ $ $ PRG02 Relocate DEP Transformer Vault $ (186,641) $ (91,928) $ (278,569) PRG06 Alternate crane package $ (50,016) $ (50,016) $ (100,032) PRG07 Delete Hoist on Chestnut $ (324,582) $ (324,582) TOTAL SAVINGS $ (2,387,837) $ (892,476) $ (3,274,239) Page 2 of 2 PH5a16