A. Request for Qualifications (RFQ)

Statements of Qualification (SOQ) are requested in RFQs for the purpose of shortlisting development teams that demonstrate the technical, financial and management capacity required to deliver the proposed project. The campus or auxiliary organization should include Chancellor's Office (CO) staff from Capital Planning, Design and Construction (CPDC) and Financing, Treasury & Risk Management (FTRM) on the selection committee and seek input on the draft RFQs from these CO staff before they are issued. The careful evaluation of these SOQs by the campus or auxiliary organization or their consultants and Chancellor's Office staff is critical to ensuring a successful project.

The RFQ is typically issued as part of a two‐phase selection procedure. In some cases, a combined RFQ/RFP will be issued. The campus or auxiliary organization will typically hold meetings and interviews and conduct discussions and correspondence with one or more of the respondents to seek an improved understanding of any information contained in an SOQ. Shortlisted respondents subsequently will be invited to submit proposals.​

B. Request for Proposals (RFP)

After issuing the RFQ and receiving Statements of Qualifications submittals from interested development teams and identifying a shortlist, the campus or auxiliary organization will invite the shortlisted candidates to participate in the RFP process for the development, financing, construction and operation of the proposed development project. 

The campus or auxiliary should include Chancellor’s Office (CO) staff from Capital Planning, Design and Construction (CPDC) and Financing, Treasury & Risk Management (FTRM) on the selection committee and seek input from these CO staff on the draft RFPs before they are issued.

Proposals will be evaluated for completeness and may be discarded if incomplete and thus non-responsive to the RFP. The campus or auxiliary may seek additional information from proposers and may also wish to conduct interviews and/or site visits as part of the selection process. If the evaluation team elects to hold interviews, they may request additional written material regarding qualifications or proposals from the respondents selected for such interviews at any time prior to or following interviews. 

The criteria included in the RFQ will be utilized as part of the selection process, including the responsiveness of the development concept, development team qualifications, financial capacity, and project schedule, as well as references. The careful evaluation of proposals by the campus or auxiliary organization, their consultants and Chancellor’s Office staff is critical to ensuring a successful project.

C. Financial Pro forma

This is the heart of the feasibility study report. All of the financial analysis with various performance indicator reports is done here. The information may include the following:

• Estimated Required Investment (land cost, development cost, financing cost, etc.)
• Revenue and Expense Forecast
• Net Operating Income (NOI)
  
• Debt Service Payments (if applicable)
• Replacement Reserve Calculations
• Participation Payments
• Unleveraged IRR or Project IRR
• Leveraged IRR and Funding Strategy
• Various Financial Performance Indicators
• Scenario Analysis
• Sensitivity Analysis
  

The development part of the financial pro forma includes the proceeds and costs of the project. Direct costs, also known as hard costs, are those costs that result from building construction and improvement costs. Indirect costs, or soft costs, include the architectural and engineering costs, permitting, all financing costs, and those costs not directly related to the construction of the improvements.

The operating part of the financial pro forma is a calculation of revenues and expenses over the entire term of the proposed ground lease. The objective of these calculations is to find the net operating income (NOI). The NOI will provide the developer with a number for calculating potential value of the projected cash flows of the development. To calculate cash flows, the following are subtracted from the NOI depending on the financial structure used: debt service, return of equity and participation payments.

On revenue generating projects, the financial structure may include some or all of the following income streams to CSU or the auxiliary:

• Upfront ground lease payment
• Unsubordinated base ground rent
• Participation (profit-sharing) payment after debt service and reserves

Key metrics depend on the type of project, funding strategy and legal structure. The most common metrics include Net Present Value (NPV), Internal Rate of Return (IRR), Developer's Margin and Return on Equity (ROE).

D. California Environmental Quality Act (CEQA)

The CEQA process starts before there is a commitment to the project by decision makers. The Trustees are responsible for ensuring compliance with the requirements of the California Environmental Quality Act (CEQA) on CSU property. 

The developer will be responsible for the cost of CEQA compliance documents (e.g., Mitigated Negative Declaration or Environmental Impact Report) in consultation with the campus and the Chancellor's Office using CEQA firms that have executed master enabling agreements in place with the CSU.

Completed final CEQA documentation will be submitted to the Chancellor's Office prior to Board of Trustee meetings according to the timelines in the Board of Trustees Meeting Dates and Due Dates for Agenda Items for the Committees on Finance and Campus Planning, Buildings and Grounds letter issued annually ​by the Executive Vice Chancellor and Chief Financial Officer. 

As stated therein, this documentation will summarize and estimate the cost of required off-site improvements, including CEQA mitigations and other commitments (i.e., those contained in MOUs or other agreements) to which a campus or developer has agreed. Campuses should ensure that negotiations with their local juridictions or other public agencies (e.g., municipal departments of transportation or public works, Caltrans) concerning these commitments are concluded as early as feasibly during environmental review, prior to Draft EIR circulation or, latest, before a Final EIR or other CEQA documentation is completed and submitted to the Chancellor's Office.

The cost of off-site mitigations and any other obligatory costs for off-site improvements shall be paid by the developer. 

E. Public Outreach

The campus and/or the auxiliary organization will develop and implement a public outreach plan for the proposed project. In addition, the California Environmental Quality Act (CEQA) process provides for public review and comment on CEQA compliance documents. The CSU CEQA Handbook provides a guide for conducting the environmental review of the project.

F. Negotiation of Agreements

The CSU has a template for the Access and Option Agreement (see Templates below), which provides the developer with a limited-term option for due diligence studies along with the responsibility for the development of a final plan, schematic drawings, and necessary environmental analyses during the option period. The CSU Ground Lease Agreement template (also shown below) is typically used for single-phase projects and is included in the RFP.

For complex multiphase projects, the forms of agreement may include Exclusive Negotiation Agreements; Disposition and Development Agreements; and/or Master Subleases. Terms and conditions for indemnification, right of first offer, dispute resolution, etc. should be consistent the same terms and conditions in the CSU Ground Lease Agreement template.

Chancellor’s Office staff from Office of General Counsel (OGC), Capital Planning, Design and Construction (CPDC) and Financing, Treasury & Risk Management (FTRM) should be consulted to assist in the review of all agreements drafted for a Real Property Partnership project. The campus or auxiliary will need to retain outside counsel for help on negotiating agreements with real property partners and should discuss with OGC staff the process for selecting outside counsel.

G. Detailed Schedule

Usually prepared by the developer, a detailed schedule includes all stages of the project, including RFQ and RFP, CSU approvals, regulatory approvals and permits, design and construction. For multiphase projects, start and completion of each phase would be included on this schedule as well.

H. Design and Engineering

Campus projects and auxiliary organization projects with state presence will comply with the following, including but not limited to:

• CSU seismic requirements
• Construction code requirements
• California Code of Regulations, Title 24
  
• Inspection by CSU and the State Fire Marshal​ for fire code compliance
  
• CSU coordination
  

I. Schematic Design Review by CPDC

The review by CPDC of the developer's project design takes place when it has reached the 75 percent schematic design stage. Submittals to CPDC should include the following:

• CDPC Form P3 2-7​ signed by the campus Executive Facilities Officer (EFO)
  
• Detailed Cost Estimate, including alternatives, and/or allowances 
  
• Graphic elements for Board of Trustees​
  
• Plan Drawings
  

J. Housing Proposal Review Committee

Campuses or auxiliary organizations who want to obtain approval from the Board of Trustees for a student housing project funded by the CSU​ Dormitory Revenue Fund or other non-state sources must have the project reviewed by the Housing Proposal Review Committee. This includes Real Property Partnership student and faculty/staff housing projects.

The office of Financing, Treasury & Risk Management provides a liaison to the committee. Campuses who want to proceed with projects should contact this office at (562) 951-4570.

Resources/Forms/Templates:​​​

• Letter of Intent Template