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Green consulting firm has ties to Catellus, Forest City

Thursday, May 29, 2008 by Austin Monitor

Economic & Planning Systems, Inc., the company performing financial evaluations of the five proposals for redevelopment of the Green Water Treatment Plant site, has a long list of clients, ranging from cities and counties to non-profit organizations to some of the nation’s largest developers.

 

The list includes firms leading two of the teams that want to win the right to redevelop Green—Catellus and Forest City. Both the City of Austin and EPS say the firm did not help any of the bidders with their proposals and a spokesman for EPS says city staff had the facts when they decided they needed the firm’s help in evaluating the proposals.

 

Darren Smith, the principal in the Berkeley office of EPS who works with the City of Austin said, “EPS has not worked for any of the developers on any of the proposals on the Green,” redevelopment. “When I was first asked about performing some financial analysis …I brought to the attention of city staff the potential appearance of a conflict and I can’t speak to how they came to a determination… (but) I feel we are not conflicted in any way.”

 

EPS helped the staff evaluate the site’s potential before the Request for Proposals was issued. The company has done work for the city for 10 to 12 years, including work with Catellus on the redevelopment of Mueller. Smith said he personally has been working with the City of Austin since 2000.

 

He said the Denver office of his firm is working for Forest City on a project called Mesa del Sol, outside of Albuquerque.

 

Rodney Gonzales, acting director of the Economic Growth and Redevelopment Services Department, emailed the following in response to questions from In Fact Daily: “The City has hired EPS as a consultant before and has an ongoing working relationship with the firm. EPS will not be evaluating the proposals and is not part of the proposal review team. EPS’ scope is limited to a review of factual financial terms provided by the proposers. EPS’ assistance will be to apply a standardized net present value analysis of the financial terms of each proposal for transparency and objectivity.”

 

Gonzales said EPS “does not stand to benefit by the selection of the successful proposer. It is not unusual for a national firm such as EPS to take part of a number of other transactions.” 

 

Still, Council Member Mike Martinez was surprised by the news. He said, “It’s very probable there may not be any cross-hatching of interests but it certainly has the appearance of being questionable.”

 

Council Member Brewster McCracken said he was not concerned, pointing out that EPS worked for the city on the Mueller development, beginning eight years ago. EPS is “so big in public/private partnerships,” McCracken said, so he would not be surprised that the company had done work for some of the competitors for the Green project.

 

Smith said EPS has about 70 employees and has been in business for 25 years, so a list on the company’s web site “may not be entirely our current clients.” He pointed out that the firm has also worked for Capitol Metro.

 

EPS is taking the financial information presented to the city by the five groups of proposers and trying to put them into a format that provides an “apples to apples” kind of approach so that both staff and the City Council will be able to judge the financial consequences of choosing one proposal over another. Smith said he is currently working on the analysis and would deliver it to the city at or before next Thursday’s City Council meeting.

 

The Council is scheduled to select one of the teams on June 18. In addition to Catellus and Forest City, the teams include Simmons-Vedder, Stratus, and USAA/Trammell Crow.

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