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February 15, 2022
ITEM TITLE
Agreement and Appropriation: Approving a Legal Services Agreement with Stradling, Yocca, Carlson & Rauth Regarding a Proposed University/Innovation District Master Development Agreement with HomeFed Corporation, and Appropriating Funds for that Purpose
Report Number: 22-0080
Location: University/Innovation District
Department: City Attorney
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt the proposed resolution waiving the consultant selection process, approving a legal services agreement between the City and Stradling, Yocca, Carlson and Rauth for assistance with negotiations and documentation of a Master Development Agreement with HomeFed Corporation and related University - Innovation District matters, and appropriating funds therefor. (4/5 Vote Required)
SUMMARY
Consistent with previous direction from the University Subcommittee, the City is poised to commence focused negotiations with HomeFed Corporation on terms for a Master Development Agreement designed to accelerate development of the City’s University/Innovation District project. To assist with these negotiations, and the development and documentation of agreed upon terms, the City desires to engage the assistance of both real estate and legal professionals. A companion item presents the proposed terms for engagement of CBRE Group, Inc. to provide real estate expertise. This item presents the terms for engagement of outside legal counsel, Stradling, Yocca, Carlson and Rauth, to provide legal expertise. The legal services agreement is presented on the City Attorney’s office standard form, with a current proposed budget of $150,000.
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ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore , pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not Applicable.
DISCUSSION
The City desires to attract and locate a m ulti-institutional, bi-national university in Eastern Chula Vista on 383.7 acres of City -owned land (“University-Innovation District”) which is located adjacent to 432.9 gross acres of land that comprise Villages 9 and 10 under the ownership of HomeFed Dev elopment Corporation (“HomeFed”). HomeFed is the uniquely qualified developer with which City is evaluating a development partnership with to facilitate the development of the University -Innovation District on the City owned land and potentially on the combined-ownership area of approximately 560 developable acres (“Project”) On June 8, 2020, The University Subcommittee authorized staff to draft a Master Development Agreement (“MDA”) with HomeFed for City Council consideration to continue to make tangible and expeditious progress towards reaching an amicable term sheet and subsequent resulting agreements for the development of the Project. To continue to make progress towards this goal, the assistance of a professional real estate advice and substantial legal support have become necessary. Due to limited resources, and the time and expertise that it will take to negotiate, structure and draft an MDA for the Project, the City Attorney’s Office is requesting additional legal resources in the form of outside legal counsel assistance.
Back in 2014, when the City and HomeFed were working together to negotiate the terms for a similar form of agreement for the development of the Project, the City Attorney’s Office went through an extensive Request for Qualificat ions/Proposals (“RFQP”) process for legal assistance, resulting in proposals from eleven (11) attorneys/law firms from around the state. At that time, the City’s selection committee chose, and the City hired, the law firm of Stradling, Rocca, Carlson & Ra uth (“Stradling”) to perform the required legal services. Although that transaction did not proceed, the Stradling firm provided exemplary services and developed a substantial in-house knowledge of the Project.
The Stradling firm continues to have the hig h-quality expertise and experience necessary to advise the City with respect to the Project, including substantial familiarity with the Project and the workings of City government. Based upon the above-described qualifications, performance capabilities and experience, and the substantial work that Stradling has already performed for City under a separate but related contract regarding the Project, City staff has determined that Stradling is uniquely qualified to perform the required services pursuant to Chula Vista Municipal Code Section 2.56.070(B)(3) (City’s interests are better served by an alternative procurement mechanism) and 2.56.070.B(4) (sole source exemption).
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The Legal Services Agreement presented for your consideration was prepared on the City ’s standard form.
The highest hourly rate for the lead attorney, Tom Clark, is set at $575. Other proposed rates range from $145/hour for law clerks, to $375/hour for associates. These rates are reasonable and consistent with market standards for attorneys with the required high level of experience and expertise.
Pursuant to Municipal Code section 2.56.110(F), City Council approval is required for the proposed Legal Services Agreements because it is expected to exceed the $50,000 threshold. The contract provides for a not to exceed amount of $150,000. If circumstances require, the City Attorney would come back to Council for an additional authorization and appropriate above this amount.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Councilmembers and has found no property holdings within 500 feet of the boundaries of the property which is subject to this action. Staff is not independently aware, nor has staff been informed by any City Councilmember, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current year fiscal impact to the General Fund related to these agreements. The costs for compensating Stradling up to the current proposed $150,000 not to exceed amount currently exist in the available General Fund balance allocated for this purpose.
ONGOING FISCAL IMPACT
If funds on deposit are exhausted prior to completion of the work associated with the subject Legal Services Agreements, staff will return to the City Council for appropriation requests and/or alternative funding sources.
ATTACHMENTS
Legal Services Agreement for the Transactional Work