March 8, 2005
SUBJECT:
Amendment of Existing Contract With Goldfarb and Lipman for Legal Services for the Redevelopment Agency
REPORT IN BRIEF
Approval is requested for a second amendment to a contract with the law firm of Goldfarb & Lipman to assist the Redevelopment Agency with legal matters pertaining to the redevelopment of downtown Sunnyvale. The requested amendment extends the contract through June 2006 and provides for fees not to exceed $138,000.
The Agency’s outside legal services are procured through the City Attorney/General Counsel’s office and funded through the Agency’s special project budget. 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. The contract was amended on March 16, 2004 in the amount of $40,000, for a total contract amount of $126,000. Of this amount, $46,784 was paid by Fourth Quarter Properties XLVIII, LLC, based upon the Exclusive Negotiating Rights Agreement dated April 27, 2004. Project Budget 824570 provided $138,596 for these legal services. Because Fourth Quarter Properties has paid for these services since the Exclusive Negotiating Rights Agreement was executed, only $318 has been spent from 824570, leaving a balance of $138,278 to support this contract amendment.
Although the bulk of negotiations for the redevelopment of Town Center Mall appear to be completed, legal services in the specialized area of redevelopment law are required to draft and amend the documents necessary to complete the transaction, and to review and comment on documents being drafted by the developer. Key among these is the Operation and Reciprocal Easement Agreement which has yet to be presented to the Redevelopment Agency. Lee Rosenthal will also be asked to draft amendments to the DDOPA in order to extend time limits, and meet whatever other changes are agreed upon between the new developer and the Agency. Legal advice and preparation of legal documents will be required with regard to the increase in the tax increment cap. Lee will also review, on behalf of the Agency, all developer organizational and financing documents. He will prepare and review documents related to the real estate closing, including the land swap between the developer and the Agency, and will review developer construction agreements to assume compliance with the approved DDOPA. In addition to these foreseen legal service needs related to redevelopment of Town Center Mall, staff anticipates, based on experience, unforeseen needs for legal services related to the Mall and to other potential projects in the Downtown Redevelopment Area, including redevelopment of Town & Country Village.
It is estimated that these services will require an amendment to the professional services contract in the amount of $138,000 to cover the services through June 2006. This cost estimate is based on the hourly rate for partners at $245 and 563 hours of legal services. Staff finds this rate to be competitive with other legal firms providing similar services.
Total cost for the extension of this contract for legal services will not exceed $138,000. Funds are available from Project Budget 824570.
Public contact was made through posting of the 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.
1. Approve an amendment to extend the contract with the law firm of Goldfarb & Lipman in an amount not to exceed $138,000.
2. Do not approve an amendment to the contract with Goldfarb & Lipman.
Staff recommends Alternative 1.
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 final Disposition Development Agreement and Owner Participation Agreement (DDOPA), and has provided legal services for the reinstitution of eminent domain authority for the Agency. Staff 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.
Reviewed by:
Mary Bradley
Treasurer, Redevelopment Agency
Approved by:
Amy Chan
Executive Director, Redevelopment Agency
Attachments
A. Draft Second Amendment to Counsel Services Agreement
B. First Amendment to Counsel Services Agreement
C. Outside Counsel Services Agreement