HomeMy WebLinkAbout08 AUTHORIZE AWARD OF CONTRACT FOR THE TUSTIN LEGACY NEIGHBORHOOD “D” SOUTH PHASE 1 INFRASTRUCTURE B DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 8 AGENDA REPORT Reviewed: ItemDS City Manager os Finance Director �a MEETING DATE: NOVEMBER 17, 2020 TO: MATTHEW S. WEST, CITY MANAGER FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER SUBJECT: AUTHORIZE AWARD OF CONTRACT FOR THE TUSTIN LEGACY NEIGHBORHOOD "D" SOUTH PHASE 1 INFRASTRUCTURE BACKBONE (CIP NO. 70246) AND NON-BACKBONE (CIP NO. 70250) CONSTRUCTION PROJECT AND ADOPT A RESOLUTION TO PRESERVE THE CITY'S ABILITY TO BE REIMBURSED AT A LATER DATE FROM PROCEEDS OF A TAX- EXEMPT OBLIGATION SUMMARY Staff is requesting the City Council to authorize award of a construction contract to the lowest responsive/responsible bidder for the Tustin-Legacy Neighborhood "D" South Phase 1 Infrastructure Backbone (CIP No. 70246) and Non-Backbone (CIP No. 70250) Construction Project, R. J. Noble Company. Actual award of the contract would be contingent upon deposit into escrow of the "Additional Purchase Price Deposit" as required by the October 19, 2020 side letter agreement described below between the City and Brookfield Homes Southern California, LLC. It is also requested that the City Council consider adopting a Resolution to preserve the City's ability to be reimbursed at a later date from the proceeds of a tax-exempt obligation. RECOMMENDATION It is recommended that the City Council: 1. Conditional upon the deposit of the "Additional Purchase Price Deposit" as required by the October 19, 2020 side letter agreement between the City and Brookfield Homes Southern California, LLC, authorize award of a construction contract to the lowest responsive/responsible bidder, R. J. Noble Company in the amount of is $11,392,825.71,for the Tustin-Legacy Neighborhood "D"South Phase 1 Infrastructure Backbone (CIP No. 70246) and Non-Backbone (CIP No. 70250) Construction Project and authorize the Mayor and the City Clerk to execute the contract documents on behalf of the City; and 2. Amend the Capital Improvement Program budget to reflect the following: Neighborhood D South Backbone Infrastructure (CIP 70246) Community Facility District 06-1 (Fund 434) $2,700,000 Community Facility District 14-1 (Fund 443) $4,475,000 General Fund-Capital Improvement Program (Fund 200) $250,000* *Irvine Ranch Water District Capital Reimbursable Neighborhood D South Non-Backbone Infrastructure (CIP 70250) Land Sale Proceeds (Fund 189) $6,075,000 and DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 Award for Neighborhood D Phase 1, CIP Nos. 70246 & 70250) Construction November 17, 2020 Page 2 3. Adopt Resolution No. 20-72 (Attachment B) entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN EXPRESSING OFFICIAL INTENT REGARDING CERTAIN CAPITAL EXPENDITURES TO BE REIMBURSED FROM PROCEEDS OF A TAX-EXEMPT OBLIGATION FISCAL IMPACT Funding in the amount of $13,500,000 has been budgeted and appropriated in the Fiscal Year 2020-2021 Capital Improvement Program Budget for the Tustin-Legacy Neighborhood "D" South Phase 1 Infrastructure Backbone (CIP No. 70246) and Non-Backbone (CIP No. 70250) Construction Project. While the overall project budget is still needed, staff is requesting the City Council update the funding sources as indicated in the recommendation above. Approximately $250,000 is estimated to be reimbursable from the Irvine Ranch Water District for installation of their capital facilities and materials testing. Project expenditures include: • Construction Contract for CIP No. 70246 .................................................$ 6,024,827.34 • Geotechnical Engineering and Materials Testing for CIP No. 70246 ......$ 180,000.00 • Construction Engineering/Support for CIP No. 70246..............................$ 60,000.00 • Estimated Expenditures for CIP No. 70246..........................................$ 6,264,827.34 • Construction Contract for CIP No. 70250 .................................................$ 5,367,998.37 • Geotechnical Engineering and Materials Testing for CIP No. 70250 ......$ 100,000.00 • Construction Engineering/Support for CIP No. 70250..............................$ 60,000.00 • Estimated Expenditures for CIP No. 70250..........................................$ 5,527,998.37 The remaining budgetary appropriation will be set aside as project contingency for potential unforeseen conditions that may arise to complete the work within the approved project scope and budget. Awarding this contract has been delayed. As a result, there is potential for increases for some cost items. There are sufficient funds available to fund this project. However, it is recommended that the City Council adopt a resolution to preserve the City's ability to be reimbursed at a later date from the proceeds of future bond sales. For example, the City may issue bonds to fund the portion of non- backbone costs associated with this project and to finance other capital improvements at Tustin Legacy. Capital financing ensures intergenerational equity since the cost of the capital project is spread over the life of the asset in the form of debt service payments and is therefore paid by all citizens who will use and benefit from the capital asset. In addition, capital financing would allow the City to leverage cash resources in order to further development in Tustin Legacy. However, it is important to note that the City Council is not being asked to approve any bond sales at this time, and, if the City Council adopts this resolution, it does not obligate the City to any action nor authorize any bonds in the future. CORRELATION TO THE STRATEGIC PLAN The construction of Tustin-Legacy Neighborhood "D"South Phase 1 Infrastructure Backbone(CIP No. 70246)and Non-Backbone (CIP No. 70250)Construction Project contributes to the fulfillment DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 Award for Neighborhood D Phase 1, CIP Nos. 70246 & 70250) Construction November 17, 2020 Page 3 of the City's Strategic Plan Goal A: Economic and Neighborhood Development. Specifically, the project implementation of Strategy 1, which among other items, is to develop critical phases of Tustin Legacy. DISCUSSION The infrastructure construction of Neighborhood "D" South in the area generally bounded by Tustin Ranch Road, Warner Avenue, Barranca Parkway and Armstrong Avenue, consists of clearing and grubbing, grading, construction of storm drain, water, reclaimed water, sanitary sewer, dry utility work, roadway improvements and traffic signals installation. The City Council adopted Resolution No. 20-03 approving the plans and specifications and authorized and directed the City Clerk to advertise for Project bids on January 21, 2020. The Project was advertised and the bids were opened on March 10, 2020 and evaluated. Twelve (12) bids were received by the noticed deadline and are summarized as follows: • R. J. Noble Co. .............................................................................$ 11,392,825.71 • KEC Engineering ..........................................................................$ 11,497,067.82 • Boudreau Pipeline Construction ...................................................$ 12,697,691.83 • Sukut Construction, LLC ...............................................................$ 12,726,336.30 • Los Angeles Engineering, Inc. .................................................$ 13,544,400.00 (*) • Mamco, Inc. dba Alabbasi .......................................................$ 13,976,277.00 (*) • Big Ben Engineering .....................................................................$ 14,726,803.87 • Beador Construction Co., Inc. .......................................................$ 14,745,300.00 • Kana Pipeline, Inc. ...................................................................$ 15,396,400.00 (*) • Lonerock, Inc. ...............................................................................$ 15,514,748.35 • PALP, Inc. dba Excel Paving ........................................................$ 15,935,577.00 • M. S. Construction Management Group ..................................$ 18,711,603.73 (*) (*) Corrected total bid amount based upon correctly multiplying the number of units by the unit price bid. Staff has reviewed the references and the State Contractor's License for R. J. Noble Company and has determined that they are appropriate for the subject project. Pursuant to the Amended DDA' with Brookfield Homes Southern California LLC (Brookfield), Brookfield is required to deliver a $5 million earnest money deposit into escrow on or before ' The City previously approved: (i)the Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C and 8 dated December 17, 2019, as amended by (ii) the First Amendment to Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C and 8 dated June 2, 2020, as further amended by (iii) the October 19, 2020 side letter re "Modification to Timing of Brookfield Payment of Additional Purchase Price Deposit and Other Provisions of the Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C and 8 (Attachment C) (collectively the"Amended DDA") entered into by the City and Brookfield. DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 Award for Neighborhood D Phase 1, CIP Nos. 70246 & 70250) Construction November 17, 2020 Page 4 November 20, 2020, referred to in Attachment C as the "Additional Purchase Price Deposit". Because those funds may be deposited after the City Council takes action on this item, it is recommended that the Council condition its approval of the award of the construction contract with R.J. Noble on the deposit into escrow of the Additional Purchase Price Deposit. It is recommended that, conditioned upon the deposit of the "Additional Purchase Price Deposit", the City Council award the construction contract to the lowest responsive/responsible bidder, R. J. Noble Company, for the Tustin-Legacy Neighborhood "D" South Phase 1 Infrastructure Backbone (CIP No. 70246) and Non-Backbone (CIP No. 70250) Construction Project and authorize the Mayor and the City Clerk to execute the contract documents on behalf of the City. It is also recommended that the City Council adopt the attached Resolution to preserve the City's ability to be reimbursed at a later date from the proceeds of a tax-exempt obligation. FP DocuSigned by: b+S S. S f a& Dou las to g tac , P.E. Director of Public Works/City Engineer Attachments: A) Location Map B) Resolution No. 20-72 C) October 19, 2020 Side Letter DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 ATTACHMENT A LOCATION MAP Tustin Legacy Neighborhood D South Phase 1 Infrastructure I Backbone and Non-Backbone Construction Project � g K� I! s TUSTIN RANCH 'p 4 ivrraw c � ti TUSTIN LEGACY NO SCALE P PROJECT E T L OC O ATI N AGF P� Tustin Legacy Neighborhood D South Phase 1 Infrastructure Backbone (CIP No. 70246) PROJECTBAR" and Non-Backbone LOCATION FR A`�N"f (CIP No. 70250) Construction Project oz QO �O 99 Lo 9 A9 9�. TUSTIN RANCH �o ROAD 0 P PgRK AUE FILE: Neighborhood D South 70246 & 70250.dwg DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 ;HMENT B Resolution 20-72 RESOLUTION NO. 20-72 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN PRESERVING A FUTURE FINANCIAL OPTION BY EXPRESSING OFFICIAL INTENT REGARDING CERTAIN CAPITAL EXPENDITURES TO BE REIMBURSED FROM PROCEEDS OF A TAX-EXEMPT OBLIGATION IT IS HEREBY RESOLVED, by the City Council of the City of Tustin (the "City") as follows: WHEREAS, the City has developed a list of capital projects (the "Projects") described in Exhibit A hereto; WHEREAS, all or a portion of the expenditures relating to the Projects (the "Expenditures") (i) have been paid within the sixty days prior to the passage of this Resolution or (ii) will be paid on or after the passage of this Resolution; WHEREAS, to preserve this financial option, the City reasonably expects to reimburse itself for the Expenditures with the proceeds of an obligation the interest on which will be excluded from the gross income of the owner or owners of such obligation; and WHEREAS, in connection with the financing of the Project, it is necessary and desirable for the City to retain special legal counsel; NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: Section 1. The City reasonably expects to reimburse the Expenditures with proceeds of one or more obligations if issued by or on behalf of the City. Section 2. The maximum principal amount of the obligations expected to be issued for the Projects is $20,000,000. Section 3. This Resolution preserves this financial option and is a declaration of official intent to reimburse expenditures pursuant to Treasury Regulations Section 1.150- 2. Section 4. All actions of the officers, agents and employees of the City that are in conformity with the purposes and intent of this Resolution, whether taken before or after the adoption hereof, are hereby ratified and confirmed. Section 5. This Resolution shall be in full force and effect immediately upon its adoption. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 17th day of November 2020. DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 Resolution 20-72 DR. ALLAN BERNSTEIN Mayor ATTEST: ERICA N. YASUDA City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 20-72 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 17th day of November 2020, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: ERICA N. YASUDA City Clerk DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 Resolution 20-72 EXHIBIT A DESCRIPTION OF THE PROJECTS Infrastructure and other capital improvements at, or serving, Tustin Legacy or portions thereof. "Infrastructure" and other "capital improvements" means by way of examples only, and without limiting the ordinary meaning of the terms: clearing and grubbing, grading work, construction of storm drains, water service facilities, reclaimed water improvements, sanitary sewer, dry utility work, roadway improvements, and/or installation of traffic signals. DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 i ATTACHMENT C I Brookfield Homes Southern Calfornia LLC 3200 Park Center Drive,Suite 100 Costa Mesa, CA 926.26 i 1 i 3 October 19,2020 Matthew West City Manager City of Tustin 300 Centennial Way City of Tustin, CA 9 SUBJECT: Modification To Timing Of Brookfield Payment of Additional Purchase Price Deposit And Other Provisions of the Tustin Legacy Disposition and Development Ap,reement for Portions of Disposition Parcels 2C and 8 Dear Mr. West: This_"letter agreement is entered into with reference to that certain Tustin Legacy Disposition. and Development Agreement for Portions of Disposition Parcels 2C and 8 dated December 17, 2019 ("Original DDA") as amended by that certain First Amendment to Tustin Legacy Disposition and Development Agreement for Portions of Disposition Parcels 2C and & dated June 2, 2020 (as amended, the ."DDA") entered into by City of Tustin ("City") and Brookfield Hames Southern California LLC ("Developer"). Initially capitalized terms used and not defined in this letter agreement shall have the meanings set forth in the DDA. Section 4.3.1 of the DDA provides that Developer shall deliver an additional earnest money deposit of Five.Million Dollars (referred to in the DDA as the Additional Purchase.Price Deposit) immediately following notification to Developer that the City has executed a construction contract for the City Improvements and prior and as a condition precedent for the benefit of the City to both execution and delivery by the City of the Horizontal Improvements License Agreement and the Close of Escrow. The DDA also provides that the City would not execute the construction contract until the City's Director of Public Works certified the Flight Way Component of the License Area Grading Work as complete. The-Parties have determined that it is in their mutual interest for the City to enter into the construction.contract for the City Improvements at an earlier date than is currently contemplated by the DDAsand prior to completion by Developer of the Flight Way Component as this will allow the City to achieve certainty with respect to the contract price and Developer to achieve certainty that execution of a construction contract will occur. The City has determined that it will only execute the construction contract at an earlier date if Developer agrees to the terms set forth in this letter agreement, including, without limitation, Developer's agreement to pay the Additional i DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 I i Purchase Price Deposit at an earlier date than is otherwise required by the DDA and to post with the City the Performance Bonds for the completion of the License Area Grading Work within the City Streets Grading Area. Accordingly, and notwithstanding any other provision of the DDA to the contrary, Developer hereby agrees as follows: 1, Developer shall deliver this signed letter agreement no later than October 23,2020, 2. Subject to the prior execution and delivery of this letter agreement by the City,Developer shall deposit the Additional.Purchase Price Deposit into Escrow no later than November 20,2020. 3, The City shall have no obligation to take the construction contract before the City Council or to use good faith efforts to construct the City Improvements unless and until Developer has satisfied the following conditions on or before November 20, 2020 (collectively, the "Side Letter Conditions'): a. Developer has deposited the Additional Purchase Price Deposit in Escrow; b. The Grading Work Initial Satisfaction Date shall have occurred; c. City and Developer shall have executed and delivered the Grading License Agreement; and d. Developer shall have commenced construction of the Flight Way Component of the City Streets Grading Area. 4. In the event Developer timely deposits the Additional Purchase Price Deposit into Escrow as provide in Section 2 above and the City does not thereafter approve the construction contract at its City Council. hearing on December 1, 2020 or thereafter execute the construction contract if approved by the City Council, upon delivery of written notice thereof to Escrow by Developer and the City, Escrow shall immediately return the Additional Purchase Price Deposit to Developer. Thereafter, Developer shall re-deposit the Additional Purchase Price Deposit into Escrow within five (5)Business Days prior to the date set by the City to tape the construction contract.back before the City Council for approval. If the City Council again fails to approve the construction contract or if the City thereafter fails to execute the construction contract as approved the Additional Purchase Price Deposit shall again be released.by Escrow to Developer as provided herein and this process shall be repeated until the City Council approves and enters into the construction contract. 5. Notwithstanding the text of Section 4.3.1 of the DDA or any other provision of the DDA, the following shall not be conditions precedent to Developer's delivery of the Additional Purchase Price Deposit to Escrow: (a)approval by the City Council of the construction contract, (b) execution of the construction contract by the City, or (c) notification to Developer of approval of the construction contract by the City. All other provisions of Section 4,3,1 and all other provisions of the DDA relating to the Additional Purchase Price Deposit shall remain in full force and effect in accordance with their terms, I I DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 I I I i i E i E 6, Nothing in this letter agreement shall modify the obligations of Developer with respect to the design and construction of the Horizontal Improvements or the timing of the performance thereof by Developer, including, without limitation, the commencement and construction of the Grading Work within the City Streets Grading Area, or the good faith obligations of the City with respect to the commencement of City Improvements or,, thereafter, the timing of the performance by the City of the City Improvements, Accordingly, notwithstanding the execution and delivery of this letter agreement and the City's early execution of the construction contract, the City shall have no good faith obligations with respect to construction of the City Improvements until the conditions thereto set forth in Sections 8.10 and 8.17.5 of the DDA and other relevant provisions of the DDA are satisfied and the terms of the DDA including Sections 8.10, 8,17.5 thereof and the Schedule of Performance attached thereto shall continue in full force and effect without modification. 7. Subject to the execution and delivery of this letter agreement by the City on or before October 28,2020,if Developer shall fail to satisfy the Side Letter Conditions on or before November 20,2020(which date shall not be subject to extension for any reason,including without limitation, Force Majeure Delay), such failure shall be a Material Default of Developer under the DDA that is deemed to be a Material Default under the control of Developer and is not a Deposit Return.Event. In.such event, (a)the City shall be relieved of all of its obligations under the DDA with respect to entry into the construction contract for the City Improvements and construction the City Improvements, (b)the provisions of Section 15.2 of the Original DDA shall apply,regardless of whether the City does or does not enter into the construction contract and does or does not perform the City Improvements, and (c) any License Agreements then in effect shall be immediately terminable by the City upon delivery of written notice to Developer. 8. Time is of the essence with respect to the terms of this letter agreement. 9. Except as specifically set forth in this letter agreement,the terms of the DDA shall remain in full force and effect. I ' � t I i I DocuSign Envelope ID:2510CE04-FEBB-4A9A-90E8-2492DD3CDE15 Provided you agree with these terms,please countersign this letter agreement in the space provided and return a copy to my attention. r Sincerely, Ms.Nicole Bur ette President Brookfield Homes Southern California LLC The Above is acknowledged, consented to and agreed to by: The City of Tustin By: ��ilY ,� Name: Matthew S. West Title: City Manager CC (Via Emai. : Timothy L.Randall Esq.,5ongstad Randall Coffee&Humphrey LLP David Kendig,Esq.,Woodruff, Spradlin&Smart Amy Freilich,Esq.,Armbruster Goldsmith&Delvac LLP Christopher Koster, Director of Economic Development i