Fremont City Council Meeting: 12/06/22 07:00 PM
3300 Capitol Avenue Div/Dept: Landscape Architecture
Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
STAFF REPORT (ID # 4750) DOC ID: 4750
Updated: 11/30/2022 2:21 PM by Alberto Quintanilla Page 1
AGREEMENT FOR COMMERCIAL REAL ESTATE CONSULTING AND
BROKERAGE SERVICES - Authorize City Manager or Designee to Execute an Agreement for Commercial Real Estate Consulting and Brokerage Services in the Amount Not to Exceed $30,300 Plus Brokerage Commission Not to Exceed $1,400,000
Contact Persons:
Name: Tara Bhuthimethee Suzanne Wolf
Title: Senior Landscape Architect Community Services Director Div/Dept: Landscape Architecture Community Services
Phone: 510-494-4738 510-494-4329
E-Mail: [email protected] [email protected]
Executive Summary: On March 15, 2022, the Fremont City Council unanimously adopted a new Parks and Recreation Master Plan (Master Plan). The Master Plan’s Strategic Action Plan identified a short term goal to “Acquire and develop land for neighborhood parks in underserved areas based on Equity maps.” In pursuit of this goal, the City issued a Request for Proposals to contract with a real estate professional to assist with acquiring new parkland.
DCG Strategies, Inc. proposes to assist the Community Services Department in analyzing the Fremont real estate market to locate potential properties to purchase for the purpose of parkland expansion in areas of the City identified for priority parkland investment. DCG Strategies further proposes to assist the City with contract negotiations and all necessary brokerage services to purchase parkland if the City Council so chooses.
Staff recommends authorizing the City Manager or designee to execute an agreement with DCG Strategies, Inc. (“DCG”) to perform commercial real estate analysis and to provide real estate brokerage services as necessary to purchase parkland for future development in the amount of $25,250, plus a 20% contingency of $5,050 for unforeseen work that may be required during the real estate analysis period, for a total not-to-exceed amount of $30,300.
In addition, the agreement includes a brokerage commission of 2.5% of the purchase price for potential parkland acquired, not to exceed an estimated $1,400,000.
BACKGROUND: On March 15, 2022, the Fremont City Council unanimously adopted a new Parks and Recreation Master Plan (Master Plan). The Master Plan provides guidance on how to meet the demands for future recreational, programming, environmental, and maintenance needs, as well as to establish priorities and funding strategies for facility improvements, future park and trail development, and land acquisition.
One short-term goal identified in the Master Plan’s Strategic Action Plan was to “Acquire and develop land for neighborhood parks in underserved areas based on Equity maps.” The City has also expressed interest in providing a 10 minute walk to a park for all residents by the year 2050, a pledge made by Mayor Mei as part of the 10-Minute Walk Campaign promulgated by the Trust for Public Land, a national non-profit whose mission it is to ensure that everyone has access to a public park.
Staff Report (ID # 4750) Meeting of December 6, 2022
Updated: 11/30/2022 2:21 PM by Alberto Quintanilla Page 2
DISCUSSION/ANALYSIS: The City issued a Request for Proposals (RFP) in search of a consultant to provide real estate brokerage and analysis services. The RFP was released on July 28, 2022, and the proposals were opened four weeks later on August 25. Three proposals were received, including submissions from Orchard Commercial, Cushman and Wakefield, and DCG Strategies, Inc.
A four-person panel, including representatives from Community Services and the City Attorney’s Office, reviewed the proposals based on the following criteria as outlined in the RFP: qualifications, feasibility of proposal based on methodology, hourly billing rate s, understanding of work to be completed, and proposer’s proposed language for the service agreement. Each criterion was equally weighted at 20%.
After evaluation, the panel unanimously selected to interview Cushman and Wakefield and DCG Strategies. The panel selected DCG Strategies, Inc. as the top firm with the most relevant experience specifically with non-profit entities and public agencies and the best understanding of the City’s needs.
The real estate analysis services will include meetings with City staff; analysis of maps from the Master Plan; identification of parcels within identified target radii; research, data collection, and analysis of commercial real estate and market conditions; presentation of findings, key points of decision-making and recommendations; and proposed options and strategies within realistic timelines.
The proposed brokerage services will include negotiations with property owners and all brokerage services necessary to purchase properties for the City. This includes prepa ring documents in conjunction with the City Attorney’s Office, contract negotiations and contract preparation, buyer due diligence, and the title and escrow processes.
The real estate analysis is projected to take approximately 60 days, with the brokerage services possibly lasting several months to 5 years, depending upon the availability of land for purchase.
FISCAL IMPACT: Funding for parkland acquisition and related activities, such as real estate consultant services, is provided by development impact fees through Fund 542, Parkland Impact after 7/15. The 2019/20 – 2023/24 Capital Improvement Plan allocated $200,000 to PWC9070 to provide administrative support for acquiring parkland, which would fund the $30,300 for the real estate analysis.
No fiscal impact is immediately being proposed for payment of the brokerage fees at this time. Any proposed land acquisitions will come before the Council for consideration, at which time a fiscal impact will be presented. Fund 542 currently holds an estimated $56 M fund balance for parkland purchase. If the balance of Fund 542 were used to purchase parkland, the consultant’s fees would not exceed a brokerage fee of $1,400,000, which is
2.5% of $56M.
ENVIRONMENTAL REVIEW: The proposed agreement is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) in that the activity is covered by the general rule that CEQA applies only to projects which have the Staff Report (ID # 4750) Meeting of December 6, 2022
Updated: 11/30/2022 2:21 PM by Alberto Quintanilla Page 3 potential for causing a significant effect on the environment. Where it can be seen with certainty that the there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. The procurement of real estate brokerage services to evaluate and identify potential land purchases will clearly not have a significant effect on the environment and, thus, CEQA does not apply, and no further environmental review is necessary. Any future land purchase will be analyzed under CEQA separately from this contract.
ATTACHMENTS: None.
RECOMMENDATIONS:
1. Authorize City Manager or designee to execute an agreement with DCG Strategies, Inc. to perform commercial real estate analysis and real estate brokerage services as necessary to purchase parkland for future development for the amount of $25,250, plus a 20% contingency of $5,050, for a total not-to-exceed amount of $30,300 and brokerage commission of 2.5% of the purchase price for potential parkland acquired, not to exceed an estimated $1,400,000.
2. Find that the award of the proposed agreement is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that the there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
The procurement of real estate brokerage services to evaluate and identify potential land purchases will clearly not have a significant effect on the environment and, thus, CEQA does not apply, and no further environmental review is necessary. Any future land purchase will be analyzed under CEQA separately from this contract.