Melvin Mark- Project Management Agreement

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company to ascertain the plethora of ailments this project was suffering in this 45-minute question and answer session, particularly since not even you were aware of these problems at the time. It is unreasonable to expect that our group could have anticipated involvement in the complex environmental and dewatering issues, in depth financing modeling and analysis, comprehensive value engineering, runaway consultant costs, GMP cost verification, etc. when we prepared our original fee because these items were not addressed in the RFP. Perhaps the most disappointing inference in your correspondence is your comparison between the previous developer and MMDC. The fees charged by, and paid to, Dan Berrey are entirely irrelevant to our fee negotiations. We should be paid for the services we provide to the project, without deduction of fees paid to anyone else. I am uncertain how you can draw any parallels between the services we have been providing over the last five months and Dan Berrey's contributions to the project. To co-mingle your settlement with Dan Berrey with what you feel you can afford to pay for our development services makes absolutely no sense. Frankly, we have not seen any evidence of services rendered by Mr. Berrey that will be of value to complete this project, as it has been revised and improved. You must surely realize the position you would have been in had you proceeded with the original program. At a minimum this program clearly led to unnecessary architectural and engineering fees as well costly project delays, which we do not believe would have been incurred had we been involved from the beginning. From our perspective, this project has proven to be far more challenging, and time consuming, than as described in the RFP. The value we have added to this project far outweighs the relatively modest fee increase we are proposing. While you may be correct that a construction manager generally charges between 1'h% to 2'/Z% of hard costs, a bona fide real estate developer charges between 4% and 5% of the total project cost. Our original fee of $437,000 ($517,000 with building commissioning) plus reimbursables of $25,000 was to provide those services consistent with a construction manager. In light of the distinction between a construction manager and developer, even our revised proposal of $775,000 is far below our standard fee percentage, and, in fact, is the lowest fee our company has ever proposed on any project. We are hoping that this project proves to be successful for all those involved. Our request for an equitable fee is not unreasonable or undeserved. I hope we can make progress in our negotiations, as we are interested in participating in this project. Please give me a call at your earliest opportunity so we can set a time to meet. Sincerely, MEL~ftl~cl MARK DEVEC MENT COMPANY ,' £' } ~, . , __._. . ,..- : ~t,..--,~; ~ %V,, % (_,. ~.,,,~, ~::. E-,~'~- ~, Daniel J. Petrusich President DJ P/rec cc: R.G. Andersen-Wyckoff