March 16, 2004
SUBJECT: Amendment of Existing Contract for Outside Counsel Services for Redevelopment of the Town Center Mall Site and Budget Modification No. 30
REPORT IN BRIEF
This report requests supplemental funding in the amount of $40,000 for an outside counsel services agreement with the law firm of Goldfarb & Lipman to complete legal documents associated with the redevelopment of the Town Center Mall site. Budget Modification No. 30 will provide the funding necessary for this contract amendment.
BACKGROUND
Customarily, outside legal services are procured through the City Attorney/General Counsel’s office and funded through that department’s program budget. Occasionally, staff will seek an alternative method if significant legal assistance is required in a particular matter. On December 18, 2003, City Council approved a special project to fund outside counsel services for the Downtown Redevelopment Project, and appropriated $86,000 for a contract with Goldfarb & Lipman.
DISCUSSION
A representative of Goldfarb & Lipman has been present at all negotiation sessions with developers for redevelopment of the Town Center Mall site, and has advised the City negotiating team and the City Attorney/General Counsel. The firm has prepared a preliminary draft of a Disposition and Development Agreement (DDA), and has provided legal services for the reinstitution of the power of eminent domain by the Redevelopment Authority. In order to complete the redevelopment process for Town Center Mall, the firm must prepare final drafts of the DDA, the Public Area Operation Agreement, and the Parking Facilities Sublease Agreement, and negotiate the wording of said documents with attorneys representing Forum development Group and Lehman, ALI. In addition, the firm must review and negotiate on behalf of the Agency the Operation and Easement Agreement being drafted by the attorneys for Lehman, ALI.
It is estimated that these services will require an amendment to the professional services contract in the amount of $40,000. This cost estimate is based on the hourly rate for partners at $245 and 163 hours of legal services. Staff finds this rate to be competitive with other legal firms providing similar services. Staff also believes that the Agency is best served to continue with Goldfarb & Lipman, since this firm has successfully participated in the negotiation process to date, and can most effectively complete this effort.
FISCAL IMPACT
The FY 2003/04 Adopted Financial Plan for the Redevelopment Agency Fund (RDA) projects that the fund would have approximately $320K remaining in the Resource Allocation Plan Reserve at the end of the fiscal year above the scheduled loan repayment to the City. By City policy, any remaining funds in the RDA at the end of the fiscal year would normally go to the General Fund as repayment for the outstanding City loan. Staff is recommending that $40,000 of the anticipated RDA Resource Allocation Plan Reserve be appropriated to the Outside Counsel Services for RDA project as supplemental funding to complete legal documents associated with the redevelopment of the Town Center Mall site. If Council appropriates $40,000 of the anticipated RDA Resource Allocation Plan Reserve to this project, these funds would not be available as additional General Fund loan repayment at the end of the fiscal year.
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BUDGET MODIFICATION No. 30
FY 2003/2004
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Current |
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Increase/
(Decrease) |
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Revised |
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Redevelopment Agency Fund
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Expenditures: |
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824570 Outside Counsel Services for RDA
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$86,000 |
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$40,000 |
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$126,000 |
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Reserves: |
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20 Year Resource Allocation Plan Reserve |
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$320,348 |
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($40,000) |
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$280,348 |
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PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City's official notice bulletin board, posting of the agenda and report on the City's web page, and the availability of the report in the Library and the City Clerk's Office.
ALTERNATIVES
1. Approve an amendment to the contract with the law firm of Goldfarb & Lipman to increase the amount by $40,000, and approve Budget Modification No. 30.
2. Do not approve an amendment to the contract with Goldfarb & Lipman and Budget Modification No. 30.
RECOMMENDATION
Staff recommends Alternative 1.
Prepared by:
Robert Paternoster
Secretary, Redevelopment Agency
Reviewed by:
Mary Bradley
Treasurer, Redevelopment Agency
Approved by:
Amy Chan
Executive Director, Redevelopment Agency