AGENDA REPORT
Meeting Date:
Item Number:
To:
From:
Subject:
November 19, 2024
Honorable Mayor & City Council
Logan Phillippo, Real Property Development Manager
Jessica Garcia, Management Analyst
APPROVAL OF AMENDMENT NO. 1 TO THE BROKER
AGREEMENT BY AND BETWEEN THE CITY OF BEVERLY
HILLS AND THE SCHAFFEL GROUP, INC. FOR THE
ACQUISITION OF REAL PROPERTY
Attachments: 1. Amendment No. 1
RECOMMENDATION
Staff recommends City Council approve Amendment No. 4 to the Broker Agreement by and between the City of Beverly Hills and The Schaffel Group, Inc. for the Acquisition of Real Property along S. La Cienega Blvd. in Los Angeles.
INTRODUCTION
The City continues to seek an opportunity to acquire property for the development of future water wells in the La Brea Subarea of the Central Groundwater Basin. The Schaffel Groups, Inc. (Broker), has been engaged by the City to perform services in furtherance of such acquisition efforts by targeting commercial properties along S. La Cienega Blvd. The broker has been successful in identifying off-market opportunities, and would continue to be engaged by Amendment No. 1 for such services as it has performed in the past such as providing pricing recommendations, and assisting with negotiating terms of any future purchase and sale agreements.
DISCUSSION
The City entered into the original broker agreement with the Schaffel Group with respect to these acquisition efforts in May 2023 to assist the City in a targeted approach for potential water well acquisition sites along S. La Cienega Boulevard. Previously, the broker assisted the City in the acquisition of 327-335 S. Robertson Boulevard and completed an analysis of S. La Cienega properties to strategize acquisition efforts.
Meeting Date: November 19, 2024
The market activity within the La Brea Subarea of the Central Groundwater Basin continues to remain limited, especially when considering the necessary site conditions (land area, access points, nearby overhead utilities, distance from existing/planned water infrastructure, estimated water yield, etc.) that must be present at a particular property to support the construction of water infrastructure. The City continues to seek opportunities and The Schaffel Group has furthered these efforts by targeting both on and off-market opportunities. Currently, The Schaffel Group is in negotiations for a potential acquisition of an assembly of three parcels. If negotiations are successful and the site is suitable for water use as determined by staff, staff will return to Council for a recommendation to undertake such an acquisition at that time.
Staff recommends an amendment to the original broker agreement to continue the City’s efforts of acquiring real property to meet its goals of construction of water infrastructure.
Key terms of the broker agreement, as would be effective if amended, include:
An initial term of 1 year, which may be extended for up to two (2) additional terms of six (6) months each; and
Commission of 2.5% of a negotiated purchase price; and The Schaffel Group represents and warrants that they hold a valid real estate broker’s license from the State of California; and
The Schaffel Group is required to have insurance in effect.
FISCAL IMPACT
There is no fiscal impact directly associated with approval of this agreement at this particular time and no appropriations are requested.
Often, sellers pay for the cost of brokerage commissions, but payment of the commission is ultimately negotiated in the purchase and sale agreement for a particular property. A seller’s expectations will depend on factors such as whether the property is on the market and whether they have already engaged a seller’s broker.
Acquisition of real property for water wells will require future appropriations from the Water Fund. In addition to the cost of the property, the City may be required to relocate any existing tenants, demolish buildings/structures, construct a monitoring well, and collect samples, before fully knowing whether a permanent well is feasible. All fiscal impacts and necessary budget actions will be presented to City Council concurrently with any recommended purchase and sale agreement in the future.
Ryan Gohlich,
Assistant City Manager
Approved By
Attachment 1
-1-
B0785-0001\3034748v1.doc
AMENDMENT TO BROKER AGREEMENT
This AMENDMENT TO BROKER AGREEMENT (“Fourth Amendment”) is executed as of ______________ ___, 2024 and is entered into by and between THE SCHAFFEL GROUP, INC., a California corporation (“Broker”) and the CITY OF BEVERLY HILLS, a California municipal corporation (“City”).
RECITALS
A. City and Broker entered into a Broker Agreement dated May 2, 2023 with respect to negotiating the terms of the City’s potential purchase of properties along or in the vicinity of S. La Cienega Blvd between Olympic Blvd. and the I-10 Freeway in Los Angeles, California 90035 selected by the City Manager (the “Properties”) and currently owned by various owners (the “Negotiation Services”).
B. Broker and City desire to extend the term of the Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and other consideration, the sufficiency of which is hereby acknowledged, City and Broker hereby agree as follows:
1. Term. The first sentence of Section 2 of the Agreement is hereby deleted and the following sentence is hereby substituted in lieu thereof:
“Broker shall diligently perform the Negotiation Services from the date hereof until the earlier of: (i) the approval and execution by the City (in its sole and absolute discretion) and the owners of the Properties of purchase and sale agreements for the Properties; or (ii) November 3, 2025. However, such period/term may be extended by the City Manager in writing twice, for up to six (6) months for each extension.”
2. Effect of Amendment. Except as expressly amended by this Amendment, the terms of the Agreement shall remain in effect.
3. Counterparts. This Amendment may be executed in counterparts, all of which shall be considered one and the same agreement.
4. Entire Agreement. This Amendment constitutes the entire agreement between City and Broker with respect to the subject matter hereof.
5. Time of Essence. Time is of the essence of every provision of this Amendment in which time is a factor.
6. DocuSign. This Amendment may be executed by using DocuSign.
Docusign Envelope ID: A2CE0727-19DD-44F5-A725-3D4008E21971 -2-
B0785-0001\3034748v1.doc
CITY:
CITY OF BEVERLY HILLS
By: __________________________
Lester J. Friedman,
Mayor
ATTEST:
Huma Ahmed, City Clerk
APPROVED AS TO FORM
Laurence S. Wiener,
City Attorney
APPROVED AS TO CONTENT
______________________________
Nancy Hunt-Coffey,
City Manager
BROKER:
THE SCHAFFEL GROUP, INC.
By: ___________________________
Sy Schaffel, Chairman
Docusign Envelope ID: A2CE0727-19DD-44F5-A725-3D4008E21971 Certificate Of Completion
Envelope Id: A2CE072719DD44F5A7253D4008E21971 Status: Sent Subject: Complete with Docusign: 2024.11.19 - Amend_Shaffel Brok. Agt.docx Source Envelope:
Document Pages: 2 Signatures: 2 Envelope Originator:
Certificate Pages: 2 Initials: 0 Jessica Garcia
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
455 N. Rexford Drive
Beverly Hills, CA 90210
[email protected]
IP Address: 198.245.189.166
Record Tracking
Status: Original
11/6/2024 1:57:09 PM
Holder: Jessica Garcia
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Sy Schaffel
[email protected]
The Schaffel Group
Security Level: Email, Account Authentication
(None) Signature Adoption: Drawn on Device
Using IP Address: 172.58.118.74
Signed using mobile
Sent: 11/6/2024 2:14:35 PM
Resent: 11/12/2024 8:28:31 AM
Viewed: 11/12/2024 9:57:05 AM
Signed: 11/12/2024 9:57:46 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Bruce W Galloway for
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 208.87.233.201
Sent: 11/12/2024 9:57:47 AM
Viewed: 11/12/2024 10:15:30 AM
Signed: 11/12/2024 10:15:48 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Logan Phillippo
[email protected]
Real Property Development Manager
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 11/12/2024 10:15:49 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Nancy Hunt-Coffey
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Lester J. Friedman
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Signer Events Signature Timestamp
Huma Ahmed
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Witness Events Signature Timestamp
Notary Events Signature Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 11/6/2024 2:14:35 PM
Payment Events Status Timestamps