March 1, 2005
SUBJECT: Amendment of Existing Contract with Keyser Marston Associates for Downtown Development Economic Analysis
REPORT IN BRIEF
Approval is requested for the amendment of an existing contract with Keyser Marston Associates, Inc., of San Francisco for downtown development economic analysis services related to the redevelopment of downtown Sunnyvale. The requested amendment extends the contract through June 2006 and provides for fees not to exceed $50,000.
BACKGROUND
In August 2003, the City entered into a contract with Keyser Marston Associates, Inc., for downtown development economic analysis. This original contract fell within the City Manager’s award authority, and the scope of services included analyzing developer proformas and devising financing strategies for the redevelopment of the City's Downtown area.
The City Council has three times authorized increases to this contract: on October 21, 2003, from $49,000 to $99,000 (RTC 03-365); on April 20, 2004 from $99,000 to $134,000 (RTC 04-135); and on September 21, 2004 from $134,000 to $159,000 (RTC 04-331). Of this amount, $33,290 was paid by Fourth Quarter Properties XLVIII, LLC, based upon the Exclusive Negotiating Rights Agreement dated April 27, 2004. Project Budget 824450 provided $102,709 for these economic analysis services. Since Fourth Quarter Properties has paid for this service since the Exclusive Negotiating Rights Agreement was executed, $97,702.40 remains in 824450 to support this contract amendment.
DISCUSSION
With the negotiations with Fourth Quarter Properties essentially complete, Keyser Marston has completed a major phase of its work for the City. However, staff continues to call upon Keyser Marston for advice on land development economics relative to the Downtown Redevelopment Project. Jerry Keyser will participate extensively in the staff evaluation of potential new developers, including review and verification of their initial proformas. If a new developer requests an amendment to the DDOPA, Keyser will evaluate the fiscal implications to the Agency based upon present and projected market conditions. In addition to this foreseen need for services, staff anticipates, based on experience, unforeseen needs for services related to the Mall and to other potential projects in the Downtown Redevelopment Project Area, including redevelopment of Town and Country Village.
It is estimated that these services will require an amendment to the professional services contract in the amount of $50,000 to cover the services through June 2006. This cost estimate is based on the hourly rate for partners at $245 and 204 hours of services. Staff finds this rate to be competitive with other firms providing similar services.
FISCAL IMPACT
The adopted budget for FY 2004/2005 appropriates $75,000 to Project Number 824450, Downtown Development Economic Analysis – Keyser Marston Associates. The proposed contract amendment of $50,000 is within the amount appropriated.
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
- Approve an amendment to extend the contract with Keyser Marston in an amount not to exceed $50,000.
- Do not approve an amendment to the contract with Keyser Marston.
ReCOMMENDATION
Staff recommends Alterative 1.
A representative of Keyser Marston has been present at all negotiation sessions with developers for redevelopment of the Town Center Mall site. Keyser Marston has worked extensively with staff on the analysis of the proformas of the Forum Development Group and has participated in most of the Closed Sessions and Public Hearings of the Redevelopment Agency on this matter. Staff believes that the Agency is best served to continue with Keyser Marston, since this firm has
successfully participated in the negotiation process to date, and can most effectively complete this effort.
Prepared by:
Robert Paternoster
Director, Community Development
Reviewed by:
Mary J. Bradley
Director, Finance
Approved by:
Amy Chan
City Manager
Attachments
A. Draft Fourth Amendment to Consultant Services Agreement
B. Third Amendment to Consultant Services Agreement
C. Second Amendment to Consultant Services Agreement
D. Amendment to Consultant Services Agreement
E. Consultant Services Agreement
.