District, owned a 10,000-square-foot building on Tucson’s north side that it wanted to convert into a cosmetology education center, now known as the Master Pieces campus near River Road and Shannon Road. JTED Superintendent Alan Storm said BFL was the low bidder on the project and worked with JTED to get it done within the financial parameters of the bid. Within a year after the construction was completed, BFL was on the campus doing some follow-up, Storm said, when he struck up a conversation about needing an eastside campus for its programs. Word reached Brav, who said he owned a piece of land that might work for the new campus. The next steps were a typical instance of a design/build model known as EPC – engineering, procurement, construction – in which a construction company like BFL will work with a client to develop the scope of a project, then manage the process through completion, often including the land acquisition and the financing. BFL reached a lease-purchase agreement with JTED to put up the land, finance the project and build it. The

www.BizTucson.com

agreement called for BFL to lease it back to JTED for a defined period of time, at which point JTED would assume ownership. Such a process allows an organization to develop new facilities without all the administration that it takes when a taxpayer or nonprofit initiates a project on its own. “We pay for things in cash. We hadn’t established credit,” Storm said. The lease-purchase agreement meant “we didn’t have to go and get a construction loan. We took it as a lease-purchase and paid it off in three years, and we became the owners of the property.” There were adjustments in the middle of the project, another aspect where construction expertise can adjust a project to fit the needs of the client. The initial plan was for five buildings on the campus. Three were built in the initial construction. When the time came to build the last two, JTED and BFL changed course and built one large building instead of two smaller ones. That construction was completed last year. “It was huge for us,” Storm said. “It was such a pleasure. I really didn’t have to worry about anything.”

In 2011, BFL took a similar approach with the Flowing Wells Unified School District. Aerie Development, a frequent partner in BFL development projects, owned a property that was suitable for a much-needed new high school for the district. Under an agreement with the school district and Aerie, BFL managed the design and construction of Sentinel Peak High School, an alternative learning facility for students with special needs. The district then leased the property for a designated amount of time, before assuming ownership. The cliché of a “win-win” applies as the nonprofits – in these cases, JTED and FWUSD – were able to quickly obtain the right kind of facility with an affordable financing arrangement and fewer planning and design headaches. At the same time, BFL made a profit while also giving its client peace of mind throughout the project. “These nonprofits are kind of like retirees in that they have a nest egg,” Larson said. “They have certain responsibilities for their nest egg and they hold it as very valuable. This is such a value to them.”

Biz

Summer 2018

>>>

BizTucson 177