Lotte Lieb Dula – Featured Projects:
Lotte Lieb Dula has provided capital project financial management expertise on the following capital projects and programs:
Denver Museum of Nature and Science
The Denver Museum of Nature and Science’s Education and Collection Facility, designed by Denver architecture firm klipp, is under construction and set to open in early 2014. Located on the south side of the existing museum building, the $56.5M addition will house state-of-the art education facilities giving students live access to scientists as they work in the field. The facility will also house the Museum’s ever-growing collection of fossils and other objects of interest.
The expansion is funded with municipal bond funds, privately raised funds and the issuance of variable rate demand obligation bonds. Financial elements are complex on this project. Through use of Lotte Lieb Dula’s financial modeling techniques, the development team was able to show donors exactly how much the museum could save in financing costs if donors were able to speed up there pledge payments. In addition, the development team was also able to reduce donor payment trajectory on new pledges, thus reducing financing needs from an estimated $25M to under $7M. Lotte trained the project team staff to monitor construction contingencies, pending change orders and budget exposure risk. Armed with this knowledge, the project team has been able to deftly monitor risk on the project, ultimately facilitating increased vigilance regarding cost issues.
Better Denver Bond Program
The $550M Better Denver Bond Program is one of the largest municipal bond programs in U.S. History. Authorized by Denver voters in 2007, more than 250 separate projects have been completed to-date. The program is comprehensive and includes improvements to health and human services facilities, parks, streets and infrastructure, libraries, cultural facilities and public safety facilities.
Collaborating with Denver’s Department of Finance and bond program manager CH2MHill, Lotte developed a financial modeling system that allowed the City to issue debt “just in time.” Schedule and cash flow were analyzed for each project; commercial paper was issued to cover costs on a quarterly basis, with general obligation bonds being issued annually in arrears to pay off the commercial paper. This technique saved taxpayers millions of dollars in interest over the traditional method of issuing G.O. bonds in advance.
Clyfford Still Museum
The Clyfford Still Museum, designed by Brad Cloepfil of Allied Architecture, was constructed for $27.6M and opened in 2011. The museum was designed specifically to complement the works of abstract expressionist Clyfford Still, and features a unique ceiling grid that allows natural light to enter the gallery spaces – visitors can actually sense when clouds pass by as the light subtly changes.
The result of many years of planning, the Clyfford still Museum might have been an easy project. Costing just $27.6M, the innovative but relatively straight-forward design promised an easy construction phase. However, the financial meltdown of 2008 created havoc in the bond market – just as the museum was issuing its bonds for construction. As the country reeled from the ensuing recession, the capital campaign flagged, forcing a major redesign. The project team and architect were forced to redesign not once, but four times to match the shrinking budget. Through the exemplary diligence of the project management team, executive director and board, and rigorous attention to risk data revealed in Lotte’s project financial models, the museum was constructed, two years delayed, but exactly on budget.
Denver Justice Center
The Denver Justice Center, a $440M complex in downtown Denver completed in 2010, includes court house and detention facilities, a public plaza and a mixed-use garage. It provides the public with much needed new judicial space, replacing outdated courtroom facilities at the City and County Building and augmenting the overcrowded detention facilities at the county jail.
Financial elements were complex on this six-phase general obligation bond-funded project. Lotte built a custom financial model for this project to estimate exactly how much funding would be available to support the construction cost – including interest earnings and premiums on multiple tranches of general obligation bonds, over a six year period – no easy task. Lotte’s projections revealed the need to value engineer the design in order to meet budget requirements. During construction, Lotte’s financial model’s risk quantification feature ensured that the buildings were completed within the bounds of fluctuating project resources. Accuracy of the project financial metrics allowed both the program manager, Jacobs Engineering and the City Engineer enough time to make mission-critical decisions without losing money – or sleep.
Denver Art Museum
The Denver Art Museum’s Hamilton Building, designed by Daniel Libeskind, was constructed for $110M and opened in 2006 to great fanfare. The museum represents a technical “first” as no exterior walls were constructed at the standard 90 degree angles. Instead the walls jut out from all angles, in a manner reminiscent of the angular peaks of the Rocky Mountains.
The Hamilton Building project was financially complex. Built with $62.5M of municipal bond funds, the remaining $47.5M was raised privately, with $16M of variable rate demand obligation bond financing. Fundraising continued through the design and construction phases; in order to reduce project risk and not exceed pledge revenues, the building was constructed by contracting for the shell of the building and adding finishes and amenities as funds were raised. This method is not for the faint of heart! Lotte’s project financial model allowed tracking the weekly status of fundraising versus the addition of new project scope. Each week, construction deadlines neared and the decision would be made: will we have wood block gallery floors – or peanut shells? At each juncture, Lotte worked with the project team to quantify the need, raised the bar and the development team came through, netting exactly what was needed to add each element. Data from Lotte’s financial allowed the trustees, museum director, and the bank to make critical decisions just in time and fully cognizant of risk factors.
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