He should probably be involved in the design process as he'll know what can be tied into in specific areas. When the build physically starts, he could be quality control/inspector to make sure all components of the project are being done right.

Why isn't he your G.C. in the first place? If it aint broke don't fix it. When you find someone reputable, it's a good idea to stick with them.

Design build firms are about a third more expensive for the same job as a regular contractor, and the job you are describing is already going to be close to being cheaper to teardown and rebuild than remodel. Add in a design build, and you may be pricing yourself out of the project completely.

It is perfectly fine to engage architectural design services separate from the construction portion. have the project designed and then have your GC friend do the build portion. You will save a lot of money.