HomeMy WebLinkAbout09 CONSULTANT SERVICES AGMT WITH CONCORD GROUP FOR THE TUSTIN LEGACY PROJECTe Agenda Item 9
AGENDA REPORT Reviewed.'
City Manager
Finance Director
MEETING DATE: NOVEMBER 2, 2010
TO: DAVID C. BIGGS, EXECUTIVE DIRECTOR
FROM: REDEVELOPMENT AGENCY
SUBJECT: CONSULTANT SERVICES AGREEMENT WITH THE CONCORD
GROUP FOR PROFESSIONAL CONSULTING SERVICES FOR THE
TUSTIN LEGACY PROJECT
SUMMARY
Approval is requested of a Consultant Services Agreement (CSA) with The Concord
Group to provide services intended to assist the Agency in determining the market
demand for non-residential uses in the future within the Tustin Legacy Project as part of
the Agency's refinement and revision of the City's disposition and business strategy for
the former Master Developer footprint.
RECOMMENDATION
It is recommended that the Tustin Community Redevelopment Agency:
Authorize the City Manager or Assistant City Manager to execute the attached CSA
with The Concord Group, subject to any non-substantive modifications as may be
deemed necessary by the City Attorney prior to execution of the Agreements.
2. Appropriate $42,000 from un-appropriated funds in the MCAS Tustin Redevelop-
ment fund (555) to MCAS Tustin Redevelopment Account No. 555-35-00-6010.
FISCAL IMPACT
As indicated in the City Council Agenda Report of June 15, 2010, it was expected that
the Redevelopment Agency would incur expenses for activities associated with revision
of the City's disposition and business strategy for the Tustin Legacy Project including,
but not limited to, necessary financial analysis, legal consultation, real estate surveys,
subdivision mapping and engineering services, land use planning and design and other
expenses. Support for refinement of the disposition and business strategy for the Tustin
Legacy Project is an acceptable use of MCAS Tustin Redevelopment funds.
City Council /Agency Report
Consultant Services Agreement -The Concord Group
November 2, 2010
Page 2
As currently proposed, the proposed services with The Concord Group are proposed
not to exceed $42,000.
BACKGROUND
At the City Council meeting on September 7, 2010, staff identified the need to obtain
additional consultant support for the development of the revised disposition and
business plan strategy for the former Master Developer footprint at Tustin Legacy.
Given the highly complex nature of the project and recent economic and real estate
market conditions, the engagement of a number of outside consultant firms with specific
expertise in a variety of development, design, and real estate related disciplines will
assist the Agency in preparation a viable business strategy. The anticipated need for
outside consultant advice, particularly on market conditions (including update of various
market demand studies previously completed for the project), was identified to the City
Council in the September 7t" City Council Agenda Report.
Given its experience in previously completing market demand analysis for the Tustin
Legacy Project and knowledge of the Master Plan, the Agency has requested that The
Concord Group support its efforts in updating market demand and pricing information
for the project. The Concord Group is a real estate consulting firm that maximizes the
value of its clients' land use opportunities. Concord relies on incisive research,
accurate interpretation of market trends, and creative problem-solving based on
decades of experience.
Procuring the services of The Concord Group will benefit the Legacy Project in time and
cost savings and be more cost efficient given that it will not have to be re-educated
regarding the project. While there are certainly many qualified experts and firms in the
industry that could support the Agency's efforts, going out through a formal solicitation
process would result in the Agency largely having to pay to re-educate new firms
regarding the complexities of the Tustin Legacy Project.
Should you have any questions, staff will be available to respond.
Christine A. Shingle
Assistant City Man er
Attachment: Consultant Services Agreement
CONSULTANT SERVICES AGREEMENT
This Agreement for Consultant Services (herein "Agreement"), is made and
entered into by and between the TUSTIN COMMUNITY REDEVELOPMENT
AGENCY, a public body, corporate and politic, ("Agency"), and The Concord Group
("Consultant").
WHEREAS, Consultant is qualified to provide the necessary services and
has agreed to provide such services; and
WHEREAS, City has identified a Scope of Services, a copy of which is
attached hereto as Exhibit "A", and is by this reference incorporated herein as
though set forth in full hereto (the "Scope of Services").
WHEREAS, Consultant is qualified to provide the necessary services, and
has been selected because of its extensive related experience and familiarization
with the Tustin Legacy Project and has agreed to provide services to the Agency.
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, Agency agrees to employ and does hereby employ
Consultant and Consultant agrees to provide consulting services as follows:
1. SERVICES OF CONSULTANT
1.1 Scope of Services. In compliance with all terms and
conditions of this Agreement, Consultant shall provide those services specified in
the "Proposal and Scope of Services" attached hereto as Exhibit "A" and
incorporated herein by this reference, (the "services" or the "work"). Consultant
warrants that all services shall be performed in a competent, professional and
satisfactory manner in accordance with all standards prevalent in the industry. In
the event of any inconsistency between the terms contained in Exhibit "A" and the
terms set forth in the main body of this Agreement, the terms set forth in the main
body of this Agreement shall govern.
1.2 Compliance with Law. All services rendered hereunder shall
be provided in accordance with all laws, ordinances, resolutions, statutes, rules,
and regulations of the City of Tustin and Tustin Community Redevelopment Agency
and of any federal, state or local governmental agency of competent jurisdiction.
1.3 Licenses and Permits. Consultant shall obtain at its sole cost
and expense such licenses, permits and approvals as may be required by law for
the performance of the services required by this Agreement.
1.4 Familiarity with Work. By executing this Contract, Consultant
warrants that Consultant (a) has thoroughly investigated and considered the work
to be performed, (b) has investigated the site of the work and become fully
acquainted with the conditions there existing, (c) has carefully considered how the
work should be performed, and (d) fully understands the facilities, difficulties and
restrictions attending performance of the work under this Agreement. Should the
Consultant discover any latent or unknown conditions materially differing from those
inherent in the work or as represented by the Agency, Consultant shall immediately
inform Agency of such fact and shall not proceed with any work except at
Consultant's risk until written instructions are received from the Contract Officer.
1.5 Care of Work. Consultant shall adopt and follow reasonable
procedures and methods during the term of the Agreement to prevent loss or
damage to materials, papers or other components of the work, and shall be
responsible for all such damage until acceptance of the work by Agency, except
such loss or damages as may be caused by Agency's own negligence.
1.6 Additional Services. Consultant shall perform services in
addition to those specified in the Proposal when directed to do so in writing by the
Contract Officer, provided that Consultant shall not be required to perform any
additional services without compensation. Any additional compensation not
exceeding $10,000 must be approved in writing by the Contract Officer. Any
greater increase must be approved in writing by the Executive Director.
1.7 Special Requirements. Any additional terms and conditions of
this Agreement are set forth in Exhibits "B", "C" and "D" and are incorporated herein
by this reference. In the event of a conflict between the provisions of Exhibit "B",
"C" and "D" and any other provision or provisions of this Agreement, the provisions
of Exhibit A shall govern.
2. COMPENSATION
2.1 Compensation of Consultant. For the services rendered
pursuant to this Agreement, the Consultant shall be compensated and reimbursed
only such amount as are prescribed in Exhibit C, in an amount not to exceed Forty
Two Thousand Dollars ($42,000).
2.2 Method of Payment. In any month in which Consultant wishes
to receive payment, Consultant shall no later than the first working day of such
month, submit to Agency in the form approved by Agency's Director of Finance, an
invoice for services rendered prior to the date of the invoice. Agency shall pay
Consultant for all expenses stated thereon which are approved by Agency
consistent with this Agreement, no later than the last working day of said month.
2.3 Changes. In the event any change or changes in the work is
requested by Agency, the parties hereto shall execute an addendum to this
Agreement, setting forth with particularity all terms of such addendum, including,
but not limited to, any additional Consultant's fees. Addenda may be entered into:
A. To provide for revisions or modifications to documents
or other work product or work when documents or other work product or work is
required by the enactment or revision of law subsequent to the preparation of any
documents, other work product or work;
B. To provide for additional services not included in this
Agreement or not customarily furnished in accordance with generally accepted
practice in Consultant's profession.
2.4 Payment for Changes. Changes approved pursuant to an
Addendum shall be compensated based on a time and materials amount and at the
personnel hourly rates included as Attachment 1 of Exhibit "C", or a not to exceed
amount as determined in writing by the parties.
3. PERFORMANCE SCHEDULE
3.1 Time of Essence. Time is of the essence in the performance
of this Agreement.
3.2 Schedule of Performance. All services rendered pursuant to
this Agreement shall be performed within any time periods prescribed in any
Schedule of Performance attached hereto as Exhibit "D". The extension of any
time period specified in or pursuant to Exhibit "D" must be approved in writing by
the Contract Officer.
3.3 Force Maieure. The time for performance of services to be
rendered pursuant to this Agreement may be extended because of any delays due
to unforeseeable causes beyond the control and without the fault or negligence of
the Consultant, including, but not restricted to, acts of God or of a public enemy,
acts of the government, fires, earthquakes, floods, epidemic, quarantine
restrictions, riots, strikes, freight embargoes, and unusually severe weather if the
Consultant shall within ten (10) days of the commencement of such condition notify
the Contract Officer who shall thereupon ascertain the facts and the extent of any
necessary delay, and extend the time for performing the services for the period of
the enforced delay when and if in the Contract Officer's judgment such delay is
justified, and the Contract Officer's determination shall be final and conclusive upon
the parties to this Agreement.
3.4 Term. Unless earlier terminated in accordance with Section
7.7 of this Agreement, this Agreement shall continue in full force and effect until
satisfactory completion of the services but not exceeding one (1) year from the date
hereof, unless extended by mutual written agreement of the parties.
4. COORDINATION OF WORK
4.1 Representative of Consultant. The following Principal of the
Consultant is hereby designated as being the principal and representative of
Consultant authorized to act in its behalf with respect to the work specified herein
and make all decisions in connection therewith:
Richard M. Gollis, Principal
The Concord Group
130 Newport Center Drive
Suite 230
Newport Beach, CA 92660
Phone: (949) 717-6450
It is expressly understood that the experience, knowledge,
capability and reputation of the foregoing Principal is a substantial inducement for
Agency to enter into this Agreement. Therefore, the foregoing Principal shall be
responsible during the term of this Agreement for directing all activities of
Consultant and devoting sufficient time to personally supervise the services
hereunder. The foregoing Principal may not be changed by Consultant without the
express written approval of Agency.
4.2 Contract Officer. The Contract Officer shall be the Assistant
City Manager of the City of Tustin unless otherwise designated in writing by the
Executive Director of Agency. It shall be the Consultant's responsibility to keep the
Contract Officer fully informed of the progress of the performance of the services
and Consultant shall refer any decisions which must be made by Agency to the
Contract Officer. Unless otherwise specified herein, any approval of Agency
required hereunder shall mean the approval of the Contract Officer.
4.3 Prohibition Against Subcontracting or Assignment. The
experience, knowledge, capability and reputation of Consultant, its principals and
employees were a substantial inducement for the Agency to enter into this
Agreement. Therefore, Consultant shall not contract with any other entity to
perform in whole or in part the services required hereunder without the express
written approval of the Agency. In addition, neither this Agreement nor any interest
herein may be assigned or transferred, voluntarily or by operation of law, without
the prior written approval of Agency.
4.4 Independent Contractor. Neither the Agency nor any of its
employees shall have any control over the manner, mode or means by which
Consultant, its agents or employees perform the services required herein, except
as otherwise set forth herein. Consultant shall perform all services required herein
as an independent contractor of Agency and shall remain at all times as to Agency
a wholly independent contractor with only such obligations as are consistent with
that role. Consultant shall not at any time or in any manner represent that it or any
of its agents or employees are agents or employees of Agency. Consultant shall be
solely responsible for compliance with State and Federal Law with respect to the
wages, hours, benefits, and working conditions of its employees, including
requirement for payroll deductions for taxes. Employees or independent
contractors of Consultant are not Agency employees.
5. INSURANCE /INDEMNIFICATION
5.1 Insurance.
A. Consultant shall maintain in full force and effect during
the term of these Agreement policies of commercial general liability and automobile
liability insurance (each of which shall include property damage and bodily injury)
and each with limits of at least $1,000,000 combined single limit coverage per
occurrence.
B. Consultant shall maintain in full force and effect during
the term of this Agreement a policy of professional liability insurance coverage with
limits of at least $1,000,000 combined single limit coverage per claim or per
occurrence. If Consultant provides claims made professional liability insurance,
Consultant shall also agree in writing either (1) to purchase tail insurance in the
amount required by this Agreement or to cover claims made within five (5) years of
the completion of Consultant's service under this Agreement, or (2) to maintain
professional liability insurance coverage with the same carrier in the amount
required by this Agreement for at least five (5) years after completion of
Consultant's services under this Agreement. Consultant shall also provide evidence
to the Agency of the purchase of the required tail insurance or continuation of the
professional liability policy by executing the attached Letter Agreement on
Consultant's letterhead.
C. Consultant shall carry and pay for such workers'
compensation insurance as is required fully protect Consultant and its employees
under California Worker's Compensation Insurance Law. The insurance company
shall agree to waive all rights of subrogation against the Agency for losses paid
under the policy, which losses arose from the work performed by the named
insured.
D. Other applicable insurance requirements are: (1)
Name the Agency, its officials and employees as an additional insured on the
commercial, general and automobile policies. (2) The insurance shall be issued by
a company authorized by the Insurance Department of the State of California and
rated A, VII or better (if an admitted carrier) or A-, X (if offered, by a surplus line
broker), by the latest edition of Best's Key Rating Guide, except that the Agency will
accept workers' compensation insurance rated B-VIII or better or from the State
Compensation Fund. (3) The Insurance shall not be cancelled, except after thirty
(30) days written prior notice to the Agency; and (4) The commercial general and
automobile liability insurance shall each be primary as respects the Agency, and
any other insurance maintained by the Agency shall be in excess of this insurance
and not contribute to it.
E. Upon execution of this Agreement, Consultant shall
provide to Agency certificates of insurance and insurer endorsements evidencing
the required insurance. Insurer endorsements (or a copy of the policy binder if
applicable) shall be provided as evidence of meeting the requirements of
Subsections (1 ), (3) and (4) of Section D above and the waiver of subrogation
requirement in Section C above. If self-insured for worker's compensation,
Consultant shall submit to Agency a copy of its certification of self-insurance issued
by the Department of Industrial Relations.
5.2 Indemnification. The Consultant shall defend, indemnify and
hold harmless the Agency, its officers and employees, from and against any and all
actions, suits, proceedings, claims, demands, losses, costs, and expenses,
including legal costs and attorneys' fees, for injury to or death of person or persons,
for damage to property, including property owned by Agency, arising from errors
and omissions of Consultant, its officers, employees and agents, and arising out of
or related to Consultant's performance under this Agreement, except for such loss
as may be caused by Agency's sole negligence or that of its officers or employees.
The Consultant shall also defend, indemnify and hold the
Agency harmless from any claims or liability for Agency health and welfare,
retirement benefits, or any other benefits of part-time or fulltime City employment
sought by Consultant's officers, employees, or independent contractors, whether
legal action ,administrative proceeding or pursuant to State statue.
6. RECORDS AND REPORTS
6.1 Reports. Consultant shall periodically prepare and submit to
the Contract Officer such reports concerning the performance of the services
required by this Agreement as the Contract Officer shall require.
6.2 Records. Consultant shall keep such books and records as
shall be necessary to properly perform the services required by this Agreement and
enable the Contract Officer to evaluate the performance of such services. The
Contract Officer shall have full and free access to such books and records at all
reasonable times, including the right to inspect, copy, audit and make records and
transcripts from such records.
6.3 Ownership of Documents. All drawings, specifications,
reports, records, documents and other materials prepared by Consultant in the
performance of this Agreement shall be the property of Agency and shall be
delivered to Agency upon request of the Contract Officer or upon the termination of
this Agreement, and Consultant shall have no claim for further employment or
additional compensation as a result of the exercise by Agency of its full rights or
ownership of the documents and materials hereunder. Consultant may retain
copies of such documents for its own use. Consultant shall have an unrestricted
right to use the concepts embodied therein.
6.4 Release of Documents. All drawings, specifications, reports,
records, documents and other materials prepared by Consultant in the performance
of services under this Agreement shall not be released publicly without the prior
written approval of the Contract Officer.
7. ENFORCEMENT OF AGREEMENT
7.1 California .Law. This Agreement shall be construed and
interpreted both as to validity and to performance of the parties in accordance with
the laws of the State of Califomia. Legal actions concerning any dispute, claim or
matter arising out of or in relation to this Agreement shall be instituted in the
Superior Court of the County of Orange, State of California, or any other
appropriate court in such county, and Consultant covenants and agrees to submit
to the personal jurisdiction of such court in the event of such action.
7.2 Disputes. In the event of any dispute arising under this
Agreement, the injured party shall notify the injuring party in writing of its
contentions by submitting a claim therefore. The injured party shall continue
performing its obligations hereunder so long as the injuring party cures any default
within ninety (90) days after service of the notice, or if the cure of the default is
commenced within thirty (30) days after service of said notice and is cured within a
reasonable time after commencement; provided that if the default is an immediate
danger to the health, safety and general welfare, the Agency may take immediate
action under Section 7.6 of this Agreement. Compliance with the provisions of this
Section shall be a condition precedent to any legal action, and such compliance
shall not be a waiver of any party's right to take legal action in the event that the
dispute is not cured.
7.3 Waiver. No delay or omission in the exercise of any right or
remedy of anon-defaulting party on any default shall impair such right or remedy or
be construed as a waiver. No consent or approval of Agency shall be deemed to
waive or render unnecessary Agency's consent to or approval of any subsequent
act of Consultant. Any waiver by either party of any default must be in writing and
shall not be a waiver of any other default conceming the same or any other
provision of this Agreement.
7.4 Rights and Remedies are Cumulative. Except with respect to
rights and remedies expressly declared to be exclusive in this Agreement, the rights
and remedies of the parties are cumulative and the exercise by either party of one
or more of such rights or remedies shall not preclude the exercise by it, at the same
or different times, of any other rights or remedies for the same default or any other
default by the other party.
7.5 Legal Action. In addition to any other rights or remedies,
either party may take legal action, in law or in equity, to cure, correct or remedy any
default, to recover damages for any default, to compel specific performance of this
Agreement, to obtain injunctive relief, a declaratory judgment or any other remedy
consistent with the purposes of this Agreement.
7.6 Termination Prior to Expiration of Term. The Agency reserves
the right to terminate this Agreement at any time, with or without cause, upon thirty
(30) days written notice to Consultant, except that where termination is due to the
fault of the Consultant and constitutes an immediate danger to health, safety and
general welfare, the period of notice shall be such shorter time as may be
appropriate. Upon receipt of the notice of termination, Consultant shall immediately
cease all services hereunder except such as may be specifically approved by the
Contract Officer. Consultant shall be entitled to compensation for all services
rendered prior to receipt of the notice of termination and for any services authorized
by the Contract Officer thereafter.
7.7 Termination for Default of Consultant. If termination is due to
the failure of the Consultant to fulfill its obligations under this Agreement, Agency
may take over the work and prosecute the same to completion by contract or
otherwise, and the Consultant shall be liable to the extent that the total cost for
completion of the services required hereunder exceeds the compensation herein
stipulated, provided that the Agency shall use reasonable efforts to mitigate
damages, and Agency may withhold any payments to the Consultant for the
purpose of set-off or partial payment of the amounts owed to Agency.
7.8 Attorneys Fees. If either party commences an action against
the other party arising out of or in connection with this Agreement or it subject
matter, the prevailing party shall be entitled to recover reasonable attorneys' fees
and costs of suit from the losing party.
8. AGENCY AND CITY OFFICERS AND EMPLOYEES; NON-
DISCRIMINATION
8.1 Non-Liability of City Officers and Employees. No officer or
employee of Agency or City shall be personally liable to the Consultant, or any
successor-in-interest, in the event of any default or breach by the Agency or for any
amount which may become due to the Consultant or its successor, or for breach of
any obligation of the terms of this Agreement.
8.2 Covenant Against Discrimination. Consultant covenants that,
by and for itself, its heirs, executors, assigns, and all persons claiming under or
through them, that there shall be no discrimination or segregation in the
performance of or in connection with this Agreement regarding any person or group
of persons on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry. Consultant shall take affirmative action to insure that applicants
and employees are treated without regard to their race, color, creed, religion, sex,
marital status, national origin, or ancestry.
9. MISCELLANEOUS PROVISIONS
9.1 Notice. Any notice, demand, request, consent, approval, or
communication either party desires or is required to give to the other party or any
other person shall be in writing and either served personally or sent by pre-paid,
first-class mail to the address set forth below. Either party may change its address
by notifying the other party of the change of address in writing. Notice shall be
deemed communicated forty-eight (48) hours from the time of mailing if mailed as
provided in this Section.
To City:
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
300 Centennial Way
Tustin, CA 92780
Attention: Assistant City Manager
(Contract Officer)
To Consultant:
The Concord Group
130 Newport Center Drive
Newport Beach, CA 92660
Attention: Richard M. Gollis
(Principal)
9.2 Integrated Agreement. This Agreement contains all of the
agreements of the parties and cannot be amended or modified except by written
agreement.
9.3 Amendment. This Agreement may be amended at any time
by the mutual consent of the parties by an instrument in writing.
9.4 Severability. In the event that any one or more of the phrases,
sentences, clauses, paragraphs, or sections contained in this Agreement shall be
declared invalid or unenforceable by valid judgment or decree of a court of
competent jurisdiction, such invalidity or unenforceability shall not affect any of the
remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement,
which shall be interpreted to carry out the intent of the parties hereunder.
9.5 Corporate Authority. The persons executing this Agreement
on behalf of the parties hereto warrant that they are duly authorized to execute this
Agreement on behalf of said parties and that by so executing this Agreement the
parties hereto are formally bound to the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the dates stated below.
"Agency"
Dated:
TUSTIN COMMUNITY
REDEVELOPMENT AGENCY
By:
APPROVED AS TO FORM:
Doug Holland
City Attorney
David C. Biggs
Executive Director
"Consultant"
The Concord Group
By:
Richard M. Gollis
By:
RDA\Consultants at Legacy\The Concord Group.docx
EXHIBIT "A"
"Scope Services"
<See Attached October 26, 2006 Letter>
~~-II~ C~C~~~~~~ ~~.~L! ~'
CONFIDENTIAL
October 26, 2010
Ms. Christine Shingleton
Assistant City Manager
CITY OF TUSTIN
300 Centennial Way
Tustin, CA 92780
RE: MARKET DEMAND AND PRICING RECOMMENDATIONS FOR
COMMERCIAL DEVELOPMENT AT TUSTIN LEGACY IN TUSTIN,
CALIFORNIA
Dear Ms. Shingleton:
03316.07
Per your request, we are pleased to present this proposal-agreement for professional
services relative to the above subject. We consider the following scope of work and
resulting time and fee schedule appropriate for the completion of the assignment.
BACKGROUND AND OBJECTIVES
The City of Tustin is moving forward with the planning of the 820-acre mixed-use
Legacy Park urban master planned community in Tustin, California. The most recent
planning includes the development of more than 2,105 residential units (1,790 for-sale
units and 315 rental units), 6.7 million square feet of commercial space and significant
open space. The Concord Group has completed multiple analyses relative to the
development, most recently in May 2008.
At this time, the City is seeking market support relative to the commercial (neighborhood
retail, entertainment/theater, office/flex and hospitality) development opportunity at
Legacy Park. Given the above, the City requires The Concord Group to conduct relevant
market analyses and come to conclusions regarding the overall demand and land value
for the non-residential components of the project.
Specifically, we will:
1. Assess the property in its local and regional context of competitive alternatives;
2. Evaluate current and projected commercial supply conditions in the market and
apply them to the subject site;
130 Newport Center Drive Suite 230 Newport Beach California 92660 Phone 949.717.6450 Fax 949.717.6444
Newport Beach ~ San Francisco ~ Boston
CITY OF TUSTIN
03316.07
October 26, 2010
Page 2 of 4
Provide market-driven price positioning recommendations for the current land
plan, including achievable price/rent levels, absorption potential, land values, etc.;
and
4. Communicate the study results in a working session with your team.
SCOPE OF WORK
To meet the above objectives, we will complete the scope of work outlined in the City's
October 22, 2010 letter (attached as Exhibit A), which specified the following three
major steps of work:
1. Survey of current and future key competition;
2. Demand analyses for the proposed commercial land uses identified in the master
plan; and
3. Land pricing and positioning recommendations.
STEP III: ONGOING STRATEGIC INPUT
In addition to the strategic market and land residual analyses above and outlined in
Exhibit A, our firm is capable of providing additional advisory services throughout the
development process. We are available to participate in work sessions and to provide
input and analysis for ongoing iterations of the master development plan, business plan
assumptions, the planning process, including future product development, strategic
alternatives for the product mix, phasing, etc., to maximize the long-term potential value
of the project.
TIME AND FEE SCHEDULE
The scope of work defined above can be completed in approximately four-weeks from
your authorization date to the working session. The professional fee required is $42,000,
which includes all expenses, as well as one (1) meeting to kick-off the engagement with
the City's team; and two (2) meetings with the City to discuss our findings. Five hard
copies of the draft report, ten bound hard copies of the final report and an electronic PDF
of both the draft and final reports will also be delivered.
CITY OF TUSTIN
03316.07
October 26, 2010
Page 3 of 4
We look forward to the opportunity to work with you and your associates on this project.
Should you have any questions, please call.
Best regards,
A~/~
Richard M. Gollis
THE CONCORD GROUP. LLC
AGREED AND APPROVED:
Entity:
By:
Title:
Signature:
Sent via: Email Date:
/AKB
CITY OF TUSTIN
03316.07
October 26, 2010
Page 4 of 4
EXHIBIT A
Office of the City Manager
October 22, 2010
Richard Gollis
The Concord Group
130 Newport Center Drive, Suite 230
Newport Beach, CA 92660
Re: Tustin Legacy Non-Residential Market Demand Information
Dear Richard:
The City of Tustin is requesting a proposal from The Concord Group for a condensed
and focused confidential non-residential market demand study for future development of
the master planned footprint of the Tustin Legacy Project.
The objective of this study is to forecast absorption of non-residential products using a
conservative approach and a moderately aggressive approach based on permitted non-
residential uses and products within the Tustin Legacy Master Plan. The final product
will need to show present value land pricing for each non-residential use including the
product type. The study needs to address the current timeframe and expand to the year
2020, or longer as necessary to accommodate the projected maximum build-out
permitted by the Plan. Understanding how the Project can best position its non-
residential uses within the Orange County market and the submarket is critical.
National and regional economic conditions factors effecting demand are important,
however, any assumptions you utilize should be incorporated into the study without an
extended narrative. We have several reports speaking to these economic conditions
already. Key tables that you feel are critical to understanding the logic behind
assumptions and recommendations should be included. We are open to suggestions on
how to most efficiently meet our objectives with this study. Work that you feel may also
be beneficial should be presented separately as an option.
Community Assumptions: Assume that the Tustin Legacy project will be a well defined
820-acre master planned community with a dynamic urban activity center. The Plan for
the unimproved portion of Tustin Legacy includes 2,105 new homes, a maximum of 6.7
million square feet of non-residential space, new roadways and infrastructure and
300 Centennial Way, Tustin, CA 92780 P: (714) 573-3010 F: (714) 838-1602 www. Tustinca.org
significant parkland and open spaces, including a 2 mile long linear park. Any analysis
must take into consideration that the non-residential development, although varied by
use, will be across several neighborhoods.
The current Master Plan envisions the following non-residential uses/products:
Neighborhood Commercial, General Office, Office park, Light Industrial/Research &
Development (flex-space), Industrial Park, Special Uses including 4 Hotels, a Theater of
1,000 seats, and health club. A summary of the land area and square footages
associated with each of these land use types within each Neighborhood is included in
the attachment. Please note that the environmental document does not confine us to
the location by each phase but we do have to meet certain environmental mitigation to
move onto Phase 2, 3,and future phases. The reference in the chart to the master block
is Neighborhood D (Community Core) proposed for vertical mixed uses as noted by type
of land use for individual parcels. I'm also attaching a black and white and color map of
the master plan which corresponds with the land use exhibit.
You have also asked that I identify the residential development that is still envisioned
with the project. This information is included in the attached land us chart. However, the
following provides a narrative summary of the information. In Neighborhood G, a total
of 1,214 units are authorized, of which 640 must be at the Low Density range of 0-7
dwelling units per acre, 382 units at the Medium Density range of 8-15 dwelling units per
acre, and 192 units at the Medium High Density range of 16-25 dwelling units per acre.
Restrictions in the Plan and environmental documents also limit the development by
phase as follows: Phase 1 limits are 382 dwelling units in the Low Density range, 220 in
the Medium Density range, and 192 in the Medium-High Density Range. Of the 1,214
units in Neighborhood G, a total of 257 units (represents 21.2% of the units) must be
Affordable Units, with a minimum of 73 Very Low Income Units, 42 Low Income Units
and 142 Moderate Income Units. Residential Development in Neighborhood G are
limited to 192 apartments. However, this an area that minor amendments to the plan
may be possible, if there is stronger market support for some minor increases in the
number of apartments permitted based on current and near term market conditions.
In Neighborhood D, a total of 891 units are authorized, of which all may be in the
Medium High Density Range. However, density calculations in Neighborhood D permit
utilizing the total gross acres throughout the neighborhood to determine density not just
an individual residential development site. This has the affect of permitting densities that
could be significantly higher and denser in this neighborhood on any one site as long as
the total number of units permitted in the Neighborhood is not exceeded. Restrictions in
the Plan and environmental documents also limit the development by phase in this
neighborhood as follows: Phase 1 limits are 862 units and Phase 2 limits are 29 units.
300 Centennial Way, Tustin, CA 92780 P: (714) 573-3010 F: (714) 838-1602 www. Tustinca.org
Of the 891 units authorized in Neighborhood D, 196 units (represents 22% of the units)
must be Affordable Units, with a minimum of 53 Very Low Income Units, 53 Low Income
Units and 90 Moderate Income Units. .Residential Development in Neighborhood D is
also currently limited to 123 apartments. However, this an area that minor amendments
to the plan may be possible and which have already been discussed with elected
officials, if there is stronger market support for some minor increases in the number of
apartments permitted based on current and near term market conditions. Up to
additional 192 apartment units instead of ownership units have been discussed. The
City has also previously discussed the potential for allowing a density bonus under State
law based on AB 2280.
The current Plan would also permit a transfer of up to 10% of the residential units
between any one of the neighborhoods above.
One of the most exciting components of the new development will be a vibrant "Urban
Community Core", a pedestrian oriented, mixed use district that integrates a variety of
uses and activities including retail, restaurant and entertainment uses, hotels, for-sale
and apartment homes and offices. This mixed use district is intended to be eclectic,
diverse, and urban in nature.
SCOPE OF WORK
1. Current and Future Key Competition. Identify major non-residential
developments in Orange County and the submarkets with projected timing for
development by land use. Strengths and weaknesses of market competitors
should be shown in comparison to Tustin Legacy.
This should be limited to larger projects and master planned communities that
are projected to be active in the marketplace from 2011 - 2020. We would also
like you to review and comment on key major projects in Orange County that will
be coming on line in the next several years such as Heritage Fields, Irvine
Company properties, and other major projects in the County.
2. Demand for Proposed Land Uses Identified in Master Plan. Project
absorption for non-residential uses in Orange County and within the Tustin
Legacy submarket, defined and broken out separately. Identify new market
niches that may or should be considered as an adaptation of any of the proposed
land uses identified in the Plan, or any concerns regarding the ability to
financially support such uses (e.g., the 1,000 seat theater or entertainment
venue, four hotels, non-BTS office products ). Assumption notes and other
300 Centennial Way, Tustin, CA 92780 P: (714) 573-3010 F: (714) 838-1602 www. Tustinca.org
necessary components should be included. Include historical data where
appropriate to provide anticipated trend context.
3. Land Pricing and Positioning. Based on the findings under tasks 1 and 2 and
identify, potential project absorption for non-residential uses by use and product.
We would like two sets of land pricing and absorption projections that represent a
conservative and an aggressive absorption strategy for this Tustin Legacy
community. Pricing should be presented with both present value and future
value estimates. Exhibits should highlight current non-residential sales activity
and how the proposed uses in the Plan/product array would be positioned in the
market.
Time Frame for Completion
The City has been tasked with preparing and completing a revised disposition
strategy for the Tustin Legacy project over the next 4 months. Since the market
study is a critical piece of information in progressing to any more detailed financial
feasibility assessment, a quick and timely draft product will need to be produced in
the next 4-5 weeks. Upon receipt of the draft document, the City would expect the
consultant to meet with the City and respond to one round of questions, report
modifications, or corrections so that we can have a final report completed as soon as
possible.
Deliverables
Five hard copies of the draft scope of work product identified above, with an
electronic copy of the original draft report to be provided to the City. After any
discussion with the draft, Consultant shall prepare 10 hard copies of the final scope
of work product, with an electronic copy of the original final report to be provided to
the City.
Cost for Scope of Work
Compensation for the Scope of Work requested shall be based on Consultant fee
proposal which shall be snot-to-exceed fee for the basic Scope of Work (by task or
scope item noted above), with a breakdown of labor hours by employee and billing
classification together with the cost of any non-labor services (reimbursables,etc)
and a not to exceed fee for any Consultant recommended Optional tasks, which the
City would need to first approve.
300 Centennial Way, Tustin, CA 92780 P: (714) 573-3010 F: (714) 838-1602 www. Tustinca.org
Meetings with the client shall be taken into consideration as part of the proposal.
If you have any questions, please do not hesitate to contact me at 714. 573-3107
Sincerely,
'~~n.-2~
Christine Shingleton ,.
Assistant City Manager
cc: John Buchanan
300 Centennial Way, Tustin, CA 92780 P: (714) 573-3010 F: (714) 838-1602 www. Tustinca.org
EXHIBIT "B"
"Special Requirements"
1. Consultant shall not release to the public or the press information on this
project without prior authorization by Contract Officer.
2. Conflict of Interest and Confidentiality.
In order to assure City that Consultant is not subject to any conflict of
interest, Consultant affirms that while services continue to be required
neither Consultant nor any of its offices or employees will accept work
from or provide services for any company related to the Tustin Legacy
project.
Consultant agrees that during the term of Agreement, unless other
modified by mutual agreement in writing by the parties, it shall not
challenge, comment on, or oppose, nor shall it fund or in any way assist
any other person or entity (other than the City of Tustin) to challenge or
oppose, to or before any local, regional, state or federal agency or assist
in party in any actions or proceedings to set aside, enjoin, challenge,
appeal, or other pursue any legal, equitable or administrative remedies
regarding the approval or implementation of any proposals, applications,
approvals, or permits related to the Tustin Legacy project. In addition,
Consultant agrees that during the term of Agreement for all other tasks
identified in the Scope of Services, neither Consultant nor its officers or
employees will accept work from or provide services to other development
interests at Tustin Legacy without a written request to the City and written
release granted by the City.
Consultant understands and agrees that all work it undertakes for the City
of Tustin shall be considered confidential and shall not be shared by
Consultant with any other party without a written release from the City of
Tustin.
In the event of uncertainty about whether a potential conflict of interest
exists, Consultant shall advise Contract Officer whose decision to review
and consider a conflict waiver shall be final.
3. A no-fee business license shall be provided by the City to Consultant.
4. Consultant shall present to the Agency certificates of insurance and
endorsement forms pursuant to Agreement requirements verifying that the
Consultant has the insurance as required by this agreement.
5. If Contract Officer determines that a product deliverable is unacceptable,
either before or after a draft or final draft is issued, because it does not
conform to the requirements of this agreement, the Consultant shall
submit a revised report or product at Consultant's expense.
6. The Consultant shall review and replace project personnel assigned to
project who do not perform assigned work in a manner satisfactory to
Contract Officer.
7. Consultant's principal, or City-approved designee, assigned to this
Agreement shall be available to meet with Contract Officer as required at
designated dates and times to coordinate scope of services required by
the Agreement, to resolve problems, to discuss progress on scope of work
at Contract Officer's direction and to discuss assumptions developed
during task levels.
8. Field investigations necessary. The Consultant shall obtain necessary
field data and make site investigations and studies necessary to the
proper accomplishment of the work required under this contract.
EXHIBIT "C"
"Schedule of Compensation"
1. City shall compensate the Consultant up to a total compensation not to exceed
$ 42,000, unless modified in writing pursuant to Section 2.1 and 2.3 of the
Agreement, based on the following:
2. Direct Expense Reimbursement
The Consultant shall be entitled to reimbursement for reasonable direct
expenses such as and including reproduction, blueprinting, postage, and
telephone charges approved in writing by the City. Unless otherwise agreed to in
writing by the City, the following expenses shall not be an authorized
reimbursement: Consultant travel to and from the City and or regulatory agency
offices for meetings mileage by automobile, toll road fees, and meals and
lodging. Such reimbursement requests shall not be considered part of the
charges identified in Paragraph 1 above, and shall be subject to the following
restrictions:
a. Itemized payment statements shall set forth in detail all actual direct
reimbursement expenses during the preceding month by Scope of Work Task
and specific task work order.
b. No overhead charges on top of direct expenses will be authorized.
3. Payments for Compensation and Direct Expense Reimbursements
As a condition precedent to any payment to Consultant for Compensation and
Direct Expense Reimbursements under the Agreement, the Consultant shall
submit monthly invoices to the City which clearly sets forth the specific Scope of
Work Tasks and task work orders being billed against, the actual hours spent on
a tasks, the hourly billing rate if applicable, the personnel classification or
individual performing the task, the fees being billed for all Consultant personnel
as well as direct reimbursement expenses for which compensation is submitted.
a. The City shall review the Consultant's monthly invoices and pay the
Consultant for services rendered and costs incurred at their rates and in amounts
and/or under terms provided herein or as agreed to in writing by specific work
task orders approved by both parties.
b. Services shall only be compensation to the extent that the Contract Officer has
authorized in writing such tasks and their appropriate costs.
c. Consultant acknowledges that the work effort of Consultant may vary at
different points in time for tasks depend on tasks specifically assigned by City
and the complexity of the assignments under such work task orders. Therefore,
when requested by the City Consultant agrees to work with the City to project
monthly and quarterly budgets.
EXHIBIT "D"
"Schedule of Performance"
The scope of work shall be completed in approximately four weeks from the
City's authorization and approval of this Consultant Services Agreement