§ 115C-532. (Repealed effective July 1, 2011) Additional provisions applicable to build-to-suit capital leases.
§ 115C‑532. (Repealedeffective July 1, 2011) Additional provisions applicable to build‑to‑suitcapital leases.
(a) Definitions. Thedefinitions of G.S. 115C‑531 apply in this section. In addition, for thepurposes of this section, the following definitions apply:
(1) Build‑to‑suitcapital lease. A capital lease that provides for the construction of newfacilities or the renovation of existing facilities by the private developer,the cost of which is estimated to be greater than three hundred thousand dollars($300,000).
(2) Prime contractor. Acontractor who contracts directly with the private developer or the privatedeveloper's construction manager at risk, if any, for construction, repair, orrenovation work under this section.
(b) Contract Provisions. A build‑to‑suit capital lease may include contractual provisionsby the private developer regarding the provision of products, services, andguaranties related to a facility that is the subject of a capital lease. Alocal board of education may also enter into a separate agreement or series ofrelated agreements regarding the provision of products, services, andguaranties related to a facility that is the subject of a capital lease;provided all agreements are approved by the board of county commissioners inconnection with the approval of the build‑to‑suit capital lease.
(c) Approval by LocalBoard of Education. Before entering into a build‑to‑suit capitallease pursuant to this section, the local board of education shall adopt aresolution as provided in this subsection. Before adopting the resolutionrequired by this subsection, the local board of education shall publish anotice of its intent to enter into a build‑to‑suit capital lease atleast 10 days in advance of the date of the meeting at which the action iscontemplated and in a newspaper having general circulation within thegeographic area served by the local board of education. The notice shallinclude, at a minimum, the date, time, and place of the meeting, a descriptionin brief and general terms of the subject of the lease, the name of the otherparty to the lease, and an indication of the board's intent to take action toauthorize the lease at the indicated meeting. The resolution shall provide thefollowing:
(1) That entering intothe build‑to‑suit capital lease for one or more specified buildingsor facilities is in the unit's best interests under all the circumstances. Inmaking this evaluation, the local board of education may consider the time,cost, and quality of design, engineering, and construction, including the timerequired to begin and the time required to complete a particular activity;occupancy costs, including lease payments, life‑cycle maintenance,repair, and energy costs; and any other factors the board deems relevant.
(2) That the privatedeveloper is qualified to provide, either alone or in conjunction with otheridentified and associated persons, the products and services called for underthe proposed capital lease and any related agreements. The local board of educationshall make this determination taking into account any factors the local boarddeems relevant, including the knowledge, skill, and reputation of the providerand its associated persons, the goals and plans of providers for utilization ofminority business enterprises, and the costs to be incurred by the local boardof education.
(d) AdditionalRequirements Regarding Design Services. All architectural, engineering, andsurvey services shall be procured in accordance with the provisions of Article3D of Chapter 143 of the General Statutes. Required design and engineeringservices shall be performed by an engineer or a licensed architect, to theextent permitted under G.S. 83A‑13(b). Specifications for any new schoolbuilding shall be consistent with the requirements of G.S. 143‑128(a).All applicable requirements for the review or approval of design andspecifications for school buildings by the Department of Public Instruction andthe Department of Insurance apply to school buildings constructed, repaired, orrenovated under a capital lease authorized under this section.
(e) AdditionalRequirements Regarding Construction Services. A private developer is requiredto seek competition and minority business participation in connection with allconstruction work under this section in accordance with the followingprovisions:
(1) A private developershall either (i) solicit bids from prime contractors for all construction workunder this section or (ii) select a construction manager at risk through aqualification based process in which case the selected construction manager atrisk shall solicit bids from all of its prime contractors for all constructionwork under this section.
(2) The privatedeveloper or its construction manager at risk may prequalify contractors. Theprequalification criteria, if any, shall be determined by the local board ofeducation and the private developer to address quality, performance, the timespecified in the bids for performance of the contract, the cost of constructionoversight, time for completion, capacity to perform, and other factors deemedappropriate by the private developer and the local board of education.
(3) A private developerand its construction manager at risk, if any, shall comply with therequirements applicable to a public entity pursuant to G.S. 143‑128.2,and prime contractors shall comply with the provisions of G.S. 143‑128.2applicable to contractors, except the private developer and its constructionmanager shall adopt the local board of education's minority participation goal.The local board of education shall require the private developer to submit itsplan for compliance with G.S. 143‑128.2 for approval by the local boardof education prior to the private developer soliciting bids under thissubsection.
(4) A private developeror its construction manager at risk shall publicly advertise at least 30 daysin advance of the bid date in a newspaper having general circulation within thegeographic areas served by the local board of education, shall open bids publicly,and shall award each contract to the lowest responsible, responsive, andprequalified bidder, taking into consideration quality, performance, the timespecified in the bids for performance of the contract, the cost of constructionoversight, time for completion, compliance with G.S. 143‑128.2, and anyother factors deemed appropriate by the private developer and the local boardof education and included in the bid solicitation. A private developer or itsconstruction manager at risk shall enter into the construction contractsdirectly with the successful bidder. After the award of a contract orcontracts, the private developer or its construction manager at risk and anycontractor may negotiate and reach agreement with the successful bidder on modificationsto all aspects of the contract, including the time for performance, the scopeof the work, and the price to be paid.
(5) The local board ofeducation, in its discretion, may require the private developer to provide aperformance and payment bond for construction work in accordance with theprovisions of Article 3 of Chapter 44A of the General Statutes and may requirethe private developer to provide a bond or other appropriate guarantee to coverany other guarantees, products, or services to be provided by the privatedeveloper.
(f) PredevelopmentAgreements with Private Developer Authorized. Local boards of education mayenter into predevelopment agreements with a private developer in advance ofentering into a build‑to‑suit capital lease. Predevelopmentagreements with private developers shall be approved by the board of countycommissioners. Predevelopment agreements may include provisions for each of thefollowing:
(1) Site selection, landacquisition, and site preparation, including such services as wetlandsdelineation, archaeological review, and State and local government land‑usepermitting.
(2) Building programmingand design, including both architectural and engineering services pursuant tosubsection (d) of this section.
(g) Real Estate TransferAuthorized. Notwithstanding any contrary provisions of law, a city, county,or local board of education may, pursuant to the procedures in G.S. 160A‑267,sell, lease, or otherwise transfer real or personal property to any privatedeveloper for construction, repair, or renovation of a school facility under abuild‑to‑suit capital lease entered into pursuant to this section.The conveying unit may subject the property to any covenants, conditions, orrestrictions as the unit deems to be necessary to carry out the purposes ofthis section. The disposition of property pursuant to this subsection is notsubject to the requirements of G.S. 115C‑518. No transfer by a localboard of education under this subsection shall occur unless it is approved bythe board of county commissioners.
(h) AdditionalPermitted Lease Terms. In recognition of the potential economic and technicalutility of build‑to‑suit capital leases, which include in theirscope combinations of design, construction, operation, management, andmaintenance responsibilities over prolonged periods of time, and the potentialdesirability of a single point of responsibility for these matters inconnection with build‑to‑suit capital leases, any build‑to‑suitcapital lease may include provisions imposing responsibility on the privatedeveloper or any identified affiliated entity for any of the following matters:
(1) Site selection, landacquisition, and site preparation, including wetlands delineation,archaeological review, and State and local government land‑usepermitting.
(2) Facilityprogramming, planning, and design, including both architectural and engineeringservices.
(3) Qualification andprequalification of contractors and subcontractors.
(4) Construction andconstruction management.
(5) Financing.
(6) Facility maintenanceand repairs.
(7) Energy usageguarantees.
(8) Transfer ofownership of the leased property to a local government entity at the end of thelease term.
(9) Any otherguaranties, products, and services as the local board of education maydetermine.
(i) Letter of Credit. A private developer shall provide an irrevocable letter of credit for thebenefit of laborers and materialmen in an amount not less than five percent(5%) of the total cost of the improvements which are the subject of the build‑to‑suitcapital lease and shall maintain the letter of credit throughout theconstruction of the project and for the succeeding six‑month period. (2006‑232, s. 1; 2006‑259,s. 54(b).)