When market conditions do not allow for these properties to be acquired by private developers and repurposed without significant community input or investment, issuing a request for qualifications (RFQ) is typically the route chosen to generate interest among real estate developers.

Often the opportunities presented by RFQs have economic, social, or physical impediments that make them less attractive than other locations. In the most challenging circumstances, the community invites developer interest because it finds itself with one or more properties without market interest, redevelopment ideas, or feasible real estate development strategies.

The RFQ is essentially a request for help and a request for developers to provide ideas, capital, and leadership to transform dilapidated properties into economically productive assets.

MAKE A MORE APPEALING OFFER

Communities can enlist several strategies to take an average RFQ and make it especially appealing to prospects. A more developed opportunity can increase the number of developers responding to the opportunity, raise the caliber of candidates expressing interest, and increase a developer’s level of investment spent in pursuing the project and producing results.

This article is based on the successful Knowledge Park RFQ effort completed in Rock Hill, South Carolina. The developer solicitation took shape over the course of 2012 and 2013. Knowledge Park is an economic development initiative focused on the redevelopment of a one-square-mile area in downtown Rock Hill.

Responses to the RFQ were received in April 2013. A master developer was selected and started work on the Knowledge Park in September 2013.

Knowledge Park is an urban business park targeting the growth of knowledge economy businesses and talent. The RFQ generated responses from 10 real estate development firms, several with a national presence. The quality, diversity, and enthusiasm expressed by the responding developers exceeded the community’s expectations and launched the redevelopment effort solidly in the right direction.

There are areas in which the Knowledge Park RFQ brought more value than the average developer solicitation. These components, or strategies, can likely be applied to redevelopment projects in other communities.

RFQ format. A simple paper or PDF file simply will not cut it in today’s environment. To attract quality developers and present the opportunity in its best light, the RFQ needs to be modern and dynamic. Knowledge Park’s RFQ was entirely delivered via a dedicated website.

Potential reuse of a former textile mill power plant as office space.

Development projects. The most compelling and unique addition made to the Knowledge Park RFQ was the presentation of 18 development opportunities awaiting developer implementation. After all, during an initial review of a community, what developer would not like to see various development projects queued up that have potential locations, market demand, and sponsors?

The 18 projects varied in terms of their level of urgency, type, and size. Potential projects ranged from student housing to new office space to a new library. They were each profiled, including the project’s size, potential locations, sponsor, and potential incentives.

Vision and consensus. Having public-private cooperation and consensus already in place when the opportunity is unveiled is key. Rather than leaving it to the selected developer to bring the community’s leadership together, do it in advance. Having a unified set of goals, the business leadership pulling in one direction, and the commitment of resources organized and ready for the developer to tap into builds developer confidence and can expedite the selection and development agreement processes.

In Rock Hill’s case, a leadership group was formed to lead the development of Knowledge Park. Twenty-two public and private leaders came together to direct the transformation of Rock Hill’s urban core into Knowledge Park.

Proactively do your homework. Be ready before approaching the development community. Developers don’t have magic wands and can’t solve problems that the community hasn’t taken the time to address itself.

Proactive preparation of product, policies, and processes can expedite the redevelopment opportunity for the developer. This idea can mean acquiring properties and dealing with environmental issues, organizing financial resources, or completing infrastructure and market plans.

Rock Hill secured National Register of Historic Places status for multiple buildings ahead of its RFQ launch to allow prospective developers access to valuable state and federal tax credits. A project team involving public works, utilities, legal, financial, and management professionals was also established to expedite the development of the project, providing the developer with a one-stop source for many public sector resources.

Redevelopment of the real estate itself was advanced through the creation of an infrastructure master plan and the completion of voluntary cleanup contracts to provide clean sites to developers. A streetcar feasibility study was completed providing a proposed route, financing plan, and development plan.

Enlarge the project scope. Making the project larger, incorporating more partners, and creating more synergistic opportunities can increase the attractiveness of the project. Expanding a project to include multiple sites and buildings with different owners committed to one vision increases the developer’s ability to make meaningful change, blend uses together, access financial and other resources, and enhance the firm’s financial returns.

A conceptual site redevelopment plan for the Knowledge Park in Rock Hill, South Carolina, shows the massing of buildings, parking, transportation, and green space. Drawings were produced by Tunnell-Spangler-Walsh & Associates, Atlanta, Georgia.

Rock Hill brought together 13 sites and buildings under the Knowledge Park RFQ with the city, a telecommunications provider, and Winthrop University all participating cooperatively.

Include unique advantages and assets. Incorporating compelling and unique advantages and investments into a project at an early stage can make the project stand out and increase developer interest. Perhaps a large tenant commitment, an aggressive infrastructure plan, financial investment, or policy action can tilt the playing field in favor of the development project succeeding amongst the competition.

An aggressive tax incentive targeting a certain industry or a major investment commitment announced by a national corporation are more specific examples. In Rock Hill, it is expected that the Knowledge Park will have a streetcar operating within it to attract development and move people between downtown and Winthrop University.

Advanced infrastructure—extraordinary broadband connectivity and robust, dependable power services—is also planned to serve the needs of information technology-focused businesses and talent. The advanced technology services are anticipated to be a competitive advantage to exploit through effective marketing to tenants and talent.

LEARNING FROM OUR MISTAKES

Rock Hill’s successful RFQ effort in 2013 can be contrasted with an unsuccessful effort conducted in 2005. Without the proactive preparation, development portfolio, and community engagement in place, among other things, a comparable effort to attract a master developer for a similar geography yielded only two responses. The selected developer withdrew from the project within months of selection in part because the project lacked all of the strengths discussed above.

National developers who responded to the Knowledge Park RFQ, however, indicated they were impressed with our package of product, people, infrastructure, and opportunities presented in Rock Hill. The original Knowledge Park RFQ can be accessed at knowledgeparkrockhill.info. The main Knowledge Park website at knowledgeparkrockhill.com has been transitioned into a general marketing vehicle.

A real estate development RFQ can be made more powerful and more enticing to potential developers by broadening the project scope, providing significant development opportunities, securing local business leadership in advance to drive the project, and proactively adding compelling advantages and unique assets to the project at the time the solicitation is launched.