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Home My WebLink About10 SELECTION OF A REAL ESTATE BROKER FOR MARKETING AND SOLICITATION SERVICES FOR APPROXIMATELY 21 ACDocusign Envelope ID: 78C8468B-4294-4673-A5E3-DDB71DE1A2D0 MEETING DATE TO FROM Agenda Item 10 imriar AGENDA REPORT Reviewed: a`V� City Manager „a Finance Director JULY 15, 2025 ALDO E. SCHINDLER, CITY MANAGER BRIAN MONCRIEF, DEPUTY CITY MANAGER — REAL PROPERTY SUBJECT: SELECTION OF A REAL ESTATE BROKER FOR MARKETING AND SOLICITATION SERVICES FOR APPROXIMATELY 21 ACRES OF CITY -OWNED PROPERTY WITHIN NEIGHBORHOOD E OF THE TUSTIN LEGACY SPECIFIC PLAN SUMMARY: Request for selection of a real estate broker to provide marketing and solicitation services for approximately 21 acres of City -owned real property within Neighborhood E (Planning Areas 9-12) of the Tustin Legacy Specific Plan. RECOMMENDATION: Authorize the City Manager to negotiate and execute a Listing Agreement with Cushman & Wakefield, subject to non -substantive additions or modifications as may be deemed necessary and/or recommended by the City Attorney. FISCAL IMPACT: There will be no impact to the General Fund given that commission to a commercial real estate broker is paid at close of escrow on a land sale or execution of a ground lease. The City and Cushman & Wakefield have negotiated the following commission: Land Sale: 3.0% of gross purchase price up to the first $10,000,000.00 2.0% of gross purchase price between $10,000,000.00 to $20,000,000.00 1.0% of gross purchase price exceeding $20,000,000.00 Ground Lease: 3.0% of the total lease payments for Years 1-10 *Commission to be capped at first 10 years of ground lease payments. The final compensation amount to be paid will depend on the success of a future conveyance. It is undetermined at this time whether conveyance will occur under a sale or ground lease. Docusign Envelope ID: 78C8468B-4294-4673-A5E3-DDB71DE1A21D0 City Council Agenda Report Selection of Real Estate Broker July 15, 2025 Page 2 CORRELATION TO THE STRATEGIC PLAN: Execution of a Listing Agreement for real estate brokerage services contributes to the fulfillment of the City's Strategic Plan Goal A: Economic and Neighborhood Development. Specifically, this item implements Strategy 1, which is to develop critical phases of Tustin Legacy. BACKGROUND AND DISCUSSION: On May 20, 2025, the City Council authorized staff to release a competitive offering for approximately 21 acres of City -owned real property (Site) within a portion of Neighborhood E (Planning Areas 9-12) of the Tustin Legacy Specific Plan (TLSP) pursuant to City Council Resolution 25-10. Staff recommends engaging a real estate brokerage firm to support the City in preparing the marketing and solicitation for a future Request for Proposals (RFP) or offering for the Site. The use of real estate brokerage firms for City real property solicitations has proven to be useful in conducting marketing research, drafting offering documents, targeting, interviewing, and negotiating with potential developers, managing the offering process, and assisting in recommending prospective developers, buyers and/or lessees to the City Council for consideration. Staff is requesting authorization for the City Manager to enter into a Listing Agreement with Cushman & Wakefield for the Site. Cushman & Wakefield is a full -service global commercial real estate company with over 100 years of experience, 52,000 professionals and 400 offices worldwide. Cushman & Wakefield has a market -leading full -service investment sales team located in Orange County, which has a diverse background in multiple product types, extensive developer/buyer relationships, and market and analytical expertise to assist the City in the future sale and disposition of the Site. The Cushman & Wakefield team will be led by Jeffrey Cole (Executive Vice Chairman, Capital Markets) and Nico Napolitano (Senior Director, Capital Markets). Following the negotiation and execution of a Listing Agreement, Cushman & Wakefield will assist the City as follows over the next several months before an RFP or offering is issued: - Identify strengths and weaknesses of the property; - Research and recommendations on buyers, developers and/or tenants to pursue; - Develop selection criteria for the developer selection process; - Prepare sample underwriting, graphics, market research with comparable analysis on the subject property/City/region market for inclusion in the RFP or offering and prepare a Broker's Opinion of Value; Docusign Envelope ID: 78C8468B-4294-4673-A5E3-DDB71DE1A21D0 City Council Agenda Report Selection of Real Estate Broker July 15, 2025 Page 3 - Evaluate project feasibility and suggest potential solutions to achieve desired transaction and development goals of the City; - Provide appropriate software to enable initial developer document disclosure, execution, developer submittals, and developer questions; and, - Prepare, distribute, and administer the RFP or offering for the subject property in accordance with the City's vision and City standard terms and conditions. Following the RFP release, Cushman & Wakefield will assist the City by reviewing proposals, negotiating price and terms, and assisting with recommending a buyer or lessee for City Council consideration. Staff estimates that the RFP or offering for the Site will be released in the third quarter of 2025, with a developer recommendation to the City Council likely to occur in the first quarter of 2026. If approved by the City Council, the City will execute a Listing Agreement with Cushman & Wakefield. The Listing Agreement with Cushman & Wakefield is proposed as a sole -source contract due to their extensive knowledge of the Orange County market, strong track record, and experience across a broad spectrum of land use types — residential, mixed -use, office, commercial, and industrial. Cushman & Wakefield also offers integrated services — including brokerage, land use advisory, and appraisal and valuation assistance, which makes them particularly well -suited to assist the City in evaluating strategic options for the Site. Cushman & Wakefield's comprehensive alignment of experience and qualifications allows them to provide a high standard of service and effectively advance the City's real estate objectives for the Site in a timely manner. Signed by: Brian Moncrief Deputy City Manager — Real Property Signed by: Kennet Iguee Real Property Manager