Construction Management Agreement

Exhibit 10.5


CONSTRUCTION MANAGEMENT AGREEMENT


BETWEEN


THE NEW YORK TIMES BUILDING, LLC,


OWNER,


and


AMEC CONSTRUCTION MANAGEMENT, INC.,


CONSTRUCTION MANAGER


TABLE OF CONTENTS


ARTICLE 1 DEFINITIONS


ARTICLE 2 GENERAL PROVISIONS


2.1


RELATIONSHIP OF THE PARTIES


2.2


CONTRACT DOCUMENTS


2.3


CONSTRUCTION MANAGER' S GENERAL OBLIGATIONS


2.4


ETHICAL OBLIGATIONS


2.5


EQUAL OPPORTUNITY


2.6


COOPERATION WITH INTERIOR CONSTRUCTION MANAGER, TRADE CONTRACTORS AND ARCHITECT


ARTICLE 3 PRE-CONSTRUCTION PHASE


3.1


PRE-CONSTRUCTION PHASE SERVICES


ARTICLE 4 CONSTRUCTION PHASE


4.1


PERFORMANCE OF THE WORK


4.2


COORDINATION WITH INTERIORS WORK


4.3


BIDDING PROCESS


4.4


TRADE CONTRACTS


4.5


CONSTRUCTION PHASE SCOPE OF WORK


4.6


WARRANTIES


4.7


COMPLIANCE WITH AFFIRMATIVE ACTION REQUIREMENTS


ARTICLE 5 MANAGEMENT OF THE WORK


5.1


KEY EMPLOYEES


5.2


SUPPORT STAFF


5.3


AUTHORIZED REPRESENTATIVES


ARTICLE 6 PAYMENT


6.1


PHASES


6.2


PAYMENTS


6.3


PAYMENT DOES NOT CONSTITUTE ACCEPTANCE


6.4


INCENTIVE BONUSES


ARTICLE 7 GUARANTEED MAXIMUM PRICE


7.1


GMP


7.2


TRADE CONTRACT COSTS


7.3


GENERAL CONDITIONS COSTS


7.4


CONSTRUCTION CONTINGENCY


7.5


CONSTRUCTION MANAGER ACKNOWLEDGMENT OF INCOMPLETE DESIGN DOCUMENTS


ARTICLE 8 COSTS OF THE WORK


8.1


LIMITATION ON COSTS OF THE WORK


8.2


TRADE CONTRACT COSTS


8.3


GENERAL CONDITIONS COSTS


8.4


BACK-UP DOCUMENTATION


8.5


CONTROL OF COSTS OF THE WORK


ii


ARTICLE 9 NON-REIMBURSABLE COSTS


9.1


NON-REIMBURSABLE COSTS


ARTICLE 10 CHANGES IN THE WORK


10.1


CHANGE ORDERS


10.2


MATERIAL CHANGE


10.3


FIELD DIRECTIVE


10.4


EMERGENCY CHANGE ORDER


10.5


FULL PAYMENT FOR CHANGE ORDERS


10.6


BACKCHARGES


10.7


CHANGE ORDER-RELATED TIME EXTENSIONS


ARTICLE 11 SCHEDULE OF THE WORK AND OCCUPANCY


11.1


PROJECT SCHEDULE


11.2


CPM SCHEDULE


11.3


UPDATES TO CPM SCHEDULE


11.4


TIME OF THE ESSENCE


11.5


REQUIREMENTS FOR SUBSTANTIAL COMPLETION


11.6


REQUIREMENTS FOR FINAL COMPLETION


11.7


TIME EXTENSIONS


11.8


COMPENSATION FOR DELAY


11.9


ACCELERATION OF THE WORK


11.10


MODIFICATIONS TO PROJECT SCHEDULE


ARTICLE 12 SEPARATE CONTRACTORS


12.1


OWNER' S RIGHT TO ENGAGE SEPARATE CONTRACTORS


12.2


COOPERATION AND COORDINATION WITH SEPARATE CONTRACTORS


12.3


SEPARATE CONTRACTOR-RELATED SUSPENSIONS


12.4


DAMAGE TO WORK


ARTICLE 13 ACCOUNTING RECORDS


13.1


PROJECT ACCOUNTING RECORDS


13.2


MAINTENANCE OF PROJECT ACCOUNTING BOOKS AND RECORDS


13.3


AUDITS


13.4


PRESERVATION OF PROJECT RECORDS


ARTICLE 14 BONDS AND INSURANCE


14.1


BOND REQUIREMENTS


14.2


INSURANCE REQUIREMENTS


ARTICLE 15 HAZARDOUS MATERIALS


15.1


GENERAL REQUIREMENTS


15.2


HAZARDOUS MATERIALS BROUGHT TO SITE OR GENERATED BY CONSTRUCTION MANAGER AND/OR TRADE CONTRACTORS


15.3


HAZARDOUS MATERIALS IDENTIFIED IN CONTRACT DOCUMENTS


15.4


UNIDENTIFIED HAZARDOUS MATERIALS


ARTICLE 16 TERMINATION AND SUSPENSION


16.1


TERMINATION FOR DEFAULT


16.2


TERMINATION FOR CONVENIENCE


16.3


SUSPENSION


16.4


TERMINATION OF OWNER BY CONSTRUCTION MANAGER


iii


ARTICLE 17 DISPUTE RESOLUTION


17.1


LITIGATION


17.2


CONTINUATION OF WORK


17.3


PREVAILING PARTY AT TRIAL


ARTICLE 18 MISCELLANEOUS PROVISIONS


18.1


PRACTICE OF ARCHITECTURE AND/OR ENGINEERING


18.2


EFFECTIVENESS OF AGREEMENT


18.3


SURVIVAL OF OBLIGATIONS


18.4


ASSIGNMENT


18.5


CONFIDENTIALITY


18.6


TRUST ACCOUNT


18.7


NOTICES


18.8


CONSTRUCTION OF LANGUAGE


18.9


CAPTIONS AND TITLES


18.10


NO WAIVER


18.11


INDEMNIFICATION


18.12


SEVERABILITY


18.13


ARCHITECT AND OWNER CONSULTANTS


18.14


RIGHTS AND REMEDIES


18.15


GOVERNING LAW AND CONSENT TO JURISDICTION


18.16


INTERPRETATIONS IN WRITING


18.17


INDEPENDENT CONTRACTOR


18.18


LIMITED RECOURSE


iv


EXHIBIT A

Project Description


EXHIBIT B

Trade Contract Form


EXHIBIT C

Preliminary Schedule


EXHIBIT D

General Conditions Items


EXHIBIT E

Not Used


EXHIBIT F

Preliminary List of Drawings and Specifications


EXHIBIT G

Affirmative Action Requirements


EXHIBIT H

Waiver of Lien and Release Forms


EXHIBIT I

Consultants


EXHIBIT J

OCIP Manual


EXHIBIT K

Project Website Guidelines


EXHIBIT L

Key Employee Affidavit


EXHIBIT M

Key Employees


EXHIBIT N

Not Used


EXHIBIT O

Qualifications and Assumptions


EXHIBIT P

Not Used


EXHIBIT Q

Early Access Guidelines and Turnover Protocol


EXHIBIT R

Cost Allocation Guidelines


EXHIBIT S

Guaranteed Maximum Price


EXHIBIT T

Hoisting and Logistics Plan


EXHIBIT U

Allowances


EXHIBIT V

Guarantee


v


CONSTRUCTION MANAGEMENT AGREEMENT


AGREEMENT, made this 22nd day of January, 2004, by and between The New York Times Building, LLC, having its offices located at 1 Metrotech Center North, Brooklyn, New York 11201 (" Owner" ); and AMEC Construction Management, Inc., having its offices located at 1633 Broadway, New York, NY 10019-6708 (" Construction Manager" ).


WITNESSETH


WHEREAS, The New York Times Building LLC, as Owner, intends to construct a Base Building of approximately 1,540,000 gross square feet on a site located on Eighth Avenue between 40th and 41st Streets in New York, New York (the " Project" ), which shall consist of three primary condominium units: (1) retail space; (2) commercial office space; and (3) headquarters for The New York Times Company, including its newspaper division; and


WHEREAS, the Owner has retained Renzo Piano Building Workshop, S.E.L.A.F.A., in association with Fox & Fowle Architects, P.C., as the Base Building Architect to prepare preliminary and final plans, specification, working drawings and other construction documents for the building core and shell design (the final versions of which are hereinafter collectively referred to as the " Construction Documents" ); and


WHEREAS, NYT Real Estate Company, LLC, as Interiors Project Owner, intends to buildout an Interiors Project totaling approximately 845,000 gross square feet of space within the Base Building; and


WHEREAS, the Interiors Project Owner has retained Gensler & Partners as the Interiors Architect for The New York Times Headquarters portion of the Interiors Project; and


WHEREAS, the Interiors Project Owner has retained the Architect as the architect for The Times Center portion of the Interiors Project; and


WHEREAS, the Interiors Project Owner has retained Turner Construction Company as Interiors Construction Manager for the Interiors Project; and


WHEREAS, the Architect and the Interiors Architect shall collaborate on the design of cafeteria and conference room portions of the Project; and


WHEREAS, FC Lion, LLC, as Commercial Office Project Owner, intends to buildout an Office Interior Project totaling approximately 600,000 gross square feet of space within the Base Building and, in connection therewith, anticipates that there may be an architect or architects and a construction manager or construction managers retained (referred to as Commercial Office Architect and Commercial Office Construction Manager, respectively); and


WHEREAS, FC Lion, LLC, as Retail Project Owner, intends to buildout an Retail Project totaling approximately 20,000 gross square feet of space within the Base Building and, in connection therewith, anticipates that there may be an architect or architects and a construction manager or construction managers retained (referred to as Retail Architect and Retail Construction Manager, respectively); and


1


WHEREAS, Owner may separately retain the services of such other design professionals, consultants and construction managers as Owner may deem necessary and in the best interest of the Project; and


WHEREAS, Owner intends to retain the services of Construction Manager to: (1) perform Pre-construction Phase services; (2) construct the Project, including but not limited to, arranging for, monitoring, supervising and administering Trade Contracts for the construction of any and all portions of the Project; and (3) coordinate with the Interiors Architect, the Interiors Construction Manager, Interiors Trade Contractors, Office Architect, Office Construction Manager, Retail Architect, Retail Construction Manager and Separate Contractors working on the Base Building and the Project; and


WHEREAS, Construction Manager desires to be retained by Owner to perform, the Work pursuant to the terms and conditions of this Agreement; and


WHEREAS, in order to induce Owner to award this Agreement to Construction Manager, AMEC p.l.c. has executed the Guarantee attached hereto as Exhibit V ;


NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, Owner and Construction Manager do hereby agree as follows:


ARTICLE 1


DEFINITIONS


The terms used in this Agreement, any amendment hereto and all Exhibits attached hereto, shall have the following meanings:


" Acceleration" shall mean the process by which Construction Manager increases the speed of the Work in order to regain lost time and maintain the Project Schedule.


" Affiliated Entity" shall mean, with respect to any entity, directly or indirectly controlling or controlled by, or under the direct or indirect common control with, such entity. For the purposes of this Agreement, the term " control" as used with respect to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management of such entity, whether through ownership of voting securities or by contract or otherwise.


" Affirmative Action Requirements" shall mean those requirements set forth in Exhibit G hereto.


" Applicable Law" shall mean all applicable Federal, State and local laws, statutes, codes, rules, regulations and ordinances, which are in effect or pending at the time of execution of this Agreement.


" Application for Payment" shall mean Construction Manager' s monthly requisition which shall be submitted on AIA Document G-702, G-703 or such other form as may be agreed upon by Owner and Construction Manager.


2


" Architect" shall mean Renzo Piano Building Workshop, S.E.L.A.F.A., in association with Fox & Fowle Architects, P.C., or its successor designated in writing by Owner. For the purposes of this Agreement, " Architect" includes the Architect' s Consultants identified in Exhibit I and any other Architect' s Consultants approved by Owner.


" Architect' s Consultants" shall mean engineers and specialty consultants retained directly by Architect including, but not limited to, the firms and individuals identified in Exhibit I .


" As-Built Drawings" shall mean red-lined Construction Documents showing the Work as constructed, prepared by Trade Contractors and indicating actual locations of utilities and all changes and alterations made to the Work during construction.


" Authorized Representative" shall mean an individual, designated in writing by each party, who shall be authorized to bind that party under the terms of this Agreement.


" Backcharge" shall mean a credit assessed against one Trade Contractor, by means of a deductive Change Order, for damage done to or extra Work performed by Construction Manager, another Trade Contractor or Owner.


" Base Building" shall mean the Core & Shell of the building to be constructed on Eighth Avenue between 40th and 41st Streets in New York, New York, of which the Project is a part.


" Bid Documents" shall mean the procedural documents and Bid Packages submitted to prospective Trade Contractors in connection with the competitive bidding process.


" Bidder' s List" shall mean a list of pre-qualified prospective Trade Contractors prepared by Construction Manager and approved by Owner.


" Bid Package" shall mean the collection of pertinent portions of the Construction Documents into a package suitable for bidding by prospective Trade Contractors working in a specific Trade.


" Buy Saves" shall mean the differential between the cost of any Trade Contract included in the GMP (Exhibit S) and the buyout of that Trade Contract at less than such GMP cost.


" Change" shall mean an agreed-upon modification to Construction Manager' s scope of Work which affects the price and/or the timing of the Work.


" Change Order" shall mean a written instrument prepared by Construction Manager, and signed by Owner and Construction Manager, describing a Change, and specifying any accompanying adjustment in the GMP or the Construction Contingency, and/or a Time Extension.


" Change Order Log" shall mean a list of all pending and approved Change Orders maintained by Construction Manager.


" Change Order Proposal" shall mean a written proposal by Construction Manager covering proposed Change Order Work submitted in response to a PCO issued by Owner.


" Change Order Work" shall mean Work undertaken by Construction Manager (through its Trade Contractors) under a signed Change Order.


" Claim" shall mean a formal request for additional compensation and/or a Time Extension by the Construction Manager.


3


" Codes" shall mean building codes applicable to the Project.


" Commissioning Plan" shall mean a written plan agreed upon by Owner and Construction Manager covering the initial startup, testing and operation of all systems comprising any portion of the Work.


" Confidential Information" shall mean all information (whether or not specifically labeled or identified as confidential), in any form or medium, which is disclosed to or learned by Construction Manager in the performance of this Agreement, or acquired directly or indirectly such as in the course of discussions or investigations by Construction Manager, and which relates to the Owner' s business, products, services, research or development, suppliers, distributors, clients, or customers, or which relates to similar information of a third party who has entrusted such information to the Owner including, without limitation, any specialized know-how, technical or non-technical data, formula, pattern, compilation, program, device, method, technique, drawing, process, financial or business information, models, list of actual or potential customers or suppliers, novel analysis, work papers, studies or other documents that contain, reflect, or are based on such information.


" Construction Contingency" shall mean an amount available for use by Construction Manager, subject to Owner' s prior written approval, to cover certain unanticipated costs as more fully described in Section 10.4.


" Construction Documents" shall mean the final Drawings and Specifications from which the Work is actually constructed.


" Construction Documents Phase" shall mean that Phase during which the Construction Documents are prepared by the Architect.


" Construction Manager" shall mean AMEC Construction Management, Inc.


" Construction Manager-Caused Delay" shall mean any delay or interruption in the progress of the Work which is caused by the Construction Manager, any Trade Contractor or any party for whom either of them is responsible.


" Construction Phase" shall mean that Phase during which the Work is actually being constructed by Trade Contractors and the Construction Manager performs the tasks described in Article 4.


" Contract Documents" shall mean the documents identified in Section 2.2 of this Agreement.


" Contract Time" shall mean the period of time for performance of the Work as indicated in the approved Project Schedule, and any subsequent revisions thereto approved by Owner pursuant to this Agreement.


" Controlled Inspection" shall mean an inspection of the Work or some portion thereof by an independent third party.


" Coordination Drawings" shall mean drawings prepared by Trade Contractors detailing the Work and the coordination of Work items among the various Trade Contractors.


4


" Core & Shell" shall mean those portions of the Project that are identified to be performed by Construction Manager pursuant to this Agreement.


" Costs of the Work" shall mean those costs actually expended by Construction Manager in performance of the Work that will be reimbursed by Owner as set forth in this Agreement including, but not limited to, Trade Contract Costs and General Conditions Costs, subject to the GMP.


" CPM" shall mean a critical path method format to be used for the Project Schedule.


" Critical Path" shall mean those Work activities identified on the Project Schedule which, if delayed, will cause a corresponding Delay in the Substantial Completion Date.


" Day" shall mean a calendar day.


" Daily Report" shall mean written reports provided on a daily basis by the Construction Manager that set forth the information described in Section 4.5.9.1.


" Delay" shall mean any delay or interruption in the progress of the Work as anticipated on the approved Project Schedule.


" Design Development Documents" shall mean the Design Documents prepared by Architect during the Design Development Phase.


" Design Development Phase" shall mean that Phase in the development of the Design Documents during which Architect prepares Documents that fix and describe the size and character of the Project as to architectural, structural, mechanical, electrical systems, materials and other elements as appropriate.


" Design Documents" shall mean preliminary Drawings and Specifications prepared by Architect prior to final approval by Owner of the Construction Documents.


" Design Team" shall mean Architect, Architect' s Consultants and Owner' s Consultants as identified in Exhibit I .


" Development Agreement" shall mean the agreement among The New York Times Building LLC, NYT Real Estate Company LLC and FC Lion LLC, dated December 12, 2001. The requirements of the Development Agreement relating to early access and turnover protocol are attached hereto as Exhibit Q , and incorporated herein by reference as applicable to the terms of this Agreement.


" Drawings" shall mean graphic or pictorial portions of the Contract Documents, wherever located and whenever issued, which are proposed by Architect or any Vendor, and which show, among other things, the location and dimensions of the Work, generally including, but not limited to, plans, elevations, sections, details, schedules and diagrams. A preliminary list of Drawings is attached hereto as Exhibit F .


" Emergency Change Order" shall mean a Change which is required in the case of an emergency imminently threatening the safety of persons or the Work and which, in the interest of such safety, Construction Manager determines must be made without obtaining the prior written approval of Owner.


5


" Event of Default" shall mean actions and/or inactions on the part of Construction Manager as described in Section 16.1 that justify termination of Construction Manager by Owner for default.


" Excusable Delay" shall mean a delay, disruption, acceleration or hindrance that is: (1) reasonably unforeseeable; (2) beyond the control of Construction Manager; (3) not caused or contributed to by Construction Manager, any Trade Contractor or Lower Tier Contractor, and (4) caused by one of the causes described in Article 11 of this Agreement.


" Fee" shall mean the fixed fee that is Construction Manager' s compensation for management of the Pre-Construction Phase and of the Construction Phase of the Project as set forth as part of Exhibit S .


" Fees-and-Costs" shall mean, in the context of dispute resolution, all actual expenses of any legal proceeding borne by a party to this Agreement, including, but not limited to, fees and expenses of all attorneys (including both inside and outside counsel); architects; engineers; expert witnesses; contractors; consultants; third party witnesses (and their separate attorneys' fees, where borne by a party to this Agreement); and other persons providing any services relating to any legal proceeding; court fees and charges; all costs of transcripts; printing of briefs and records on appeal; copying; trial graphics; jury consultants; trial presentation expenses; and all other reimbursable costs and expenses charged by any of the foregoing.


" FF&E" shall mean, collectively, furniture, furnishings, fixtures, accessories and similar items relating to the Project.


" Field Directive" shall mean a written directive to perform Work that is issued solely by Owner.


" Final Completion" shall mean that Construction Manager has satisfactorily completed all of the Work in strict conformity with the requirements of the Contract Documents, and the Work has been finally accepted by the Owner.


" Final Completion Date" shall mean the date determined by Owner when the Work has been completed and accepted by Owner.


" Final Payment" shall mean the last payment to Construction Manager, including Retainage, in connection with the Project.


" Force Majeure Event" shall mean acts of God and similar casualties beyond the reasonable control of Construction Manager, as described in Article 11.


" General Conditions Cap" shall mean a percentage or fixed amount which shall serve as a cap on the amount of General Conditions Costs that will be reimbursed by Owner in connection with the Work, as will be set forth in Exhibit D to the Agreement.


" General Conditions Costs" shall mean those costs identified in Section 7.3 of this Agreement which relate to Construction Manager' s management of the Project and operations at the Project Site.


" GMP" shall mean the guaranteed maximum price for the Work set forth in Exhibit S .


6


" Governmental Authorities" shall mean all Federal, State, local and quasi-governmental agencies having jurisdiction over the Project, including but not limited to the New York City Building Department.


" Hazardous Materials" shall mean: (1) any " hazardous waste" as defined by the Resource, Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et seq .), as amended, and regulations promulgated thereunder, (2) any " hazardous, toxic or dangerous waste, substance or material" specifically defined as such in (or for the purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601, et seq .), as amended, and regulations promulgated thereunder; (3) any " hazardous waste" or " hazardous substance" as defined by applicable New York State laws and regulations), as amended, and regulations promulgated thereunder; and (4) any hazardous, toxic or dangerous waste, substance, or material as defined in any so-called " superfund" or " superlien" law or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning such waste, substance or material.


" Indemnitees" shall mean Owner, Developer, INGREDUS Site 8 South LLC, Architect, Interiors Project Owner, Interiors Construction Manager, Lender and their respective members, partners, principals, shareholders, directors, agents, employees, successors and assigns.


" In-Scope Change Order" shall mean a Change Order that is funded within the GMP including, but not limited to, from the Construction Contingency.


" Interiors Project" shall mean the buildout within Base Building of The New York Times headquarters and The Times Center.


" Interiors Architect" shall mean, with reference to The New York Times Headquarters portion of the Interiors Project, Gensler and Partners, or its successor designated in writing by the Interiors Project Owner, and with reference to The Times Center, shall mean Architect, or its successor designated in writing by the Interiors Project Owner.


" Interiors Construction Manager" shall mean the construction manager retained by the Interiors Project Owner for the fitout of the Interiors.


" Interiors Project Owner" shall mean NYT Real Estate Company, LLC.


" Job Progress Report" shall mean the monthly report that Construction Manager is required to submit in accordance with Section 4.5.10.


" Key Employees" shall mean those employees of the Construction Manager identified in Exhibit M , who will have primary responsibility for implementing the Construction Manager' s obligations under this Agreement.


" Last Settlement Offer Before Trial" shall mean, in the context of dispute resolution, either: (1) the final amount in immediately available funds offered in complete resolution of the dispute delivered in writing by one party to the other party no later than twenty (20) days prior to the first witness being sworn to give testimony in any trial of the legal proceeding; or (2) where no offer was made in accordance with the preceding subclause (1), the amount of zero (0).


7


" Lease Agreement" shall mean the Agreement of Lease between 42nd St. Development Project, Inc., as Landlord, and The New York Times Building LLC, as Tenant, dated December 12, 2001.


" Lender" shall mean any entity or institution that provides financing to ...