STAFF REPORT
Meeting Date:
January 13, 2026
BUSINESS
11 SUBJECT: AWARD OF CONSTRUCTION CONTRACT FOR THE FOREST PROMENADE
PERMANENT CONVERSION
RECOMMENDATION: It is recommended that the City Council:
1. Award and authorize the City Manager to execute a contract with Superb Engineering, in the amount of $5,549,964.85, for construction of the Forest Promenade Permanent Conversion project;
2. Award and authorize the City Manager to execute a contract with Nexgen Design Builders Inc, in the amount of $340,950, to provide construction management and inspection services and approve project-related expenses and change orders for additional construction management and inspection services that may be required in an amount not-to-exceed $34,000, and direct the City Manager to execute the required documents as approved by the City Attorney;
3. Authorize the City Manager to approve project-related expenses and contract change orders for unforeseen circumstances in an amount not to exceed $1,100,000;
4. Approve the transfer of $4,409,629 in existing appropriations from other Capital Improvement Projects that are inactive or not proceeding into construction during the current fiscal year, to fully fund the Forest Promenade Permanent Conversion Project; and
5. Find the proposed action statutorily exempt under the California Environmental Quality Act pursuant to Senate Bill (SB) 922/Public Resources Code Section 21080.25(b)(1), as the action implements the previously approved Promenade on Forest project, which the City Council found to be statutorily exempt pursuant to Public Resources Code section 21080.25(b), as amended by Senate Bill 922 (SB 922), on March 25, 2025.
SUMMARY OF THE MATTER
This report recommends that the City Council award a construction contract to Superb Engineering in the amount of $5,549,964.85 for the Forest Promenade Permanent Conversion Project. In addition, staff recommends awarding a contract to Nexgen Design Builders Inc. for construction management and inspection services, authorizing contingency funding for unforeseen conditions, and approving the transfer of $4,409,629 from inactive or delayed Capital Improvement Projects not proceeding to construction this fiscal year, in order to fully fund the project.
On June 11, 2025, the City Council sustained the Planning Commission's conditional approval of Design Review 25-0319 and Coastal Development Permit 25-0318, and the Community Development Director's conditional approval of Coastal Development Permit 25-0587 and found Design Review 25-0319 and Coastal Development Permits 25-0318 and 25-05 87 statutorily exempt from the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.25(b). On August 15, 2025, the California Coastal Commission found no “Substantial Issue” that would cause the Commission to review it on appeal via the Commission’s denial of Coastal Appeal A-5-LGB-25-0018 filed by Village Laguna and Friends of Forest Avenue.
AWARD OF CONSTRUCTION CONTRACT FOR THE FOREST PROMENADE PERMANENT
CONVERSION
January 13, 2026
Construction has a 100-working day period, and is anticipated to begin in February 2026 and be completed by June 2026.
DISCUSSION
Background and Project Need
On April 23, 2024, the City Council expressed its desire to proceed with the Promenade on Forest Project to convert the temporary pedestrian plaza occupying the street into a more permanent pedestrian plaza. At the February 4, 2025, joint meeting between the City Council and Planning Commission, the City Council reaffirmed its desire to proceed with the more permanent pedestrian plaza, which involves two separate components: (1) closure of the street; and (2) the design and construction of the improvements to create the more permanent pedestrian plaza (the "Project").
On June 11, 2025, the City Council sustained the Planning Commission's conditional approval of Design Review 25-0319 and Coastal Development Permit 25-0318, and the Community Development Director's conditional approval of Coastal Development Permit 25-0587 and found Design Review 25-0319 and Coastal Development Permits 25-0318 and 25-05 87 statutorily exempt from the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.25(b). On August 15, 2025, the California Coastal Commission found no substantial issue with Coastal Appeal A-5-LGB-25-0018 filed by Village Laguna and Friends of Forest Avenue.
Floodplain Analysis
The initial Hydrology and Hydraulics Report prepared in accordance with the Orange County Hydrology Manual (which focuses on 25-year flood events) determined the existing infrastructure is sufficient to handle stormwater efficiently, and that the proposed Project would slightly improve the current condition by adding more permeable surfaces and by improving drainage systems overall.
However, because the proposed project is located within a FEMA Zone AE Floodplain, with a portion of the improvements being located within a designated FEMA Floodway, Planning Commission Resolution No. 25-0319 included Condition # 14 which reads as follows: “A right-of-way work permit shall not be issued and construction shall not commence until the Floodplain Administrator has issued a Floodplain Development Building Permit, demonstrating compliance with Federal Emergency Management Agency (FEMA) and City floodplain regulations (LBMC Chapter 25.38)”.
More specifically, Laguna Beach Municipal Code 25.38.056(B) requires certification by a registered civil engineer demonstrating that the proposed encroachment into the floodway shall not result in any increase in flood levels during the occurrence of the base flood discharge. Further, LBMC 25.38.053(D) provides that development “shall provide adequate drainage to reduce exposure to flood hazards.” No mention is made of the “base flood discharge” in 25.38.053(D) such that reducing exposure to “flood hazards” is somewhat more holistic standard.
To satisfy Condition #14, the City’s consultant Psomas prepared a “no-rise analysis” to determine whether the proposed improvements impact the floodplain elevation. Psomas obtained the effective hydraulic
AWARD OF CONSTRUCTION CONTRACT FOR THE FOREST PROMENADE PERMANENT
CONVERSION
January 13, 2026
models from FEMA and created a duplicate effective model using actual topographic elevations obtained from a land survey to serve as the existing conditions. Psomas then created a proposed conditions surface for the proposed improvements. Results from Psomas’ modeling show “no rise” to the 100-year base flood water surface elevation as a result of the Project, with all impacts showing zero or, in some instances, small reductions. This “no-rise” result occurs due to a combination of the overall large active conveyance area along Lower Forest Avenue and the Promenade project’s proposed drainage improvements and increase in permeable surface.
This Psomas study will be reviewed by the City’s Floodplain Administrator during the City’s standard course of reviewing projects (both public and private) in floodways and in light of LBMC 25.38.053(D).
While this formal process has not yet been finalized as it occurs late on in the project’s schedule - and will be finalized before any construction begins - the City believes it is on track to fulfill and comply with all conditions of Planning Commission Resolution No. 25-0319, including Condition #14.
Bid Process and Contractor Selection
Staff completed a public bid process for the project in accordance with California Public Contract Code requirements. On December 23, 2025, four (4) bids were received. The following is a summary of the bids sorted by bid amount:
Table of Bid Results
Bidder Bid Amount
1. Superb Engineering $5,549,964.85
2. GMZ Engineering Inc $ 6,763,290
3. Griffith Company $ 9,732,379
4. Green Building Corporation $ 10,943,590
Following a review of the bids, staff determined that the low bidder, Superb Engineering, is qualified, properly licensed, and their bid was determined to be responsive and responsible. Staff recommend that the contract be awarded to Superb Engineering in the amount of $5,549,964.85 (Attachment 1). It is recommended that funding be provided to cover change orders due to unforeseen conditions. These costs are not expected to exceed $1,100,000; therefore, it is also recommended that the City Manager be authorized to approve change orders for unforeseen circumstances in the amount not to exceed $1,100,000.
Construction Management and Monitoring Services
The project will require construction management and inspection services to ensure contract compliance and public safety throughout construction. A request for proposals for Construction Management & Inspection Services for Promenade on Forest Permanent Conversion was posted on the PlanetBids site on November 25, 2025. Thirteen proposals were received on December 24, 2025. The proposals were reviewed and scored based on qualifications. Following the qualifications review, four firms (CREDE Construction Advisory, HW Lochner, Nexgen Design Builders Inc, and Willdan Engineering) were invited to interview with staff. Based on the proposal review and interview, staff identified Nexgen Design Builders Inc. as the highest rated firm. Their proposed not-to-exceed fee of $340,950 was reviewed and determined to be reasonable for the scope of work. It is recommended that a professional services contract (Attachment 2)
AWARD OF CONSTRUCTION CONTRACT FOR THE FOREST PROMENADE PERMANENT
CONVERSION
January 13, 2026
be awarded to Nexgen Design Builders Inc. for construction management and inspection services, and the City Manager be authorized to approve additional construction management and inspection services that may be required in an amount not-to-exceed $34,000.
Next Steps
If the City Council adopts the recommended actions, a Notice of Award and limited Notice to Proceed will be issued to Superb Engineering. This will initiate the process of executing a construction contract, obtaining the required bonds and insurance, and will allow Superb Engineering to begin working on their subcontracts and to place material orders with vendors. This process typically takes about a month to complete. As such, it is anticipated that construction will begin at the end of February and last through June 2026, generally a period of 100 working days.
What Businesses and Residents Can Expect
The Construction Manager will be the critical contact between the Project and businesses. Nexgen will coordinate closely with the contractor and businesses to ensure business access, customer access, and to provide as welcoming an environment as possible to customers. The Public Works team, as well as Promenade Ad Hoc Committee members Kempf and Orgill will also assist with communications and troubleshooting, including onsite meetings, contact sharing, and FAQ updates.
To prepare for construction, outdoor dining on the Promenade will be suspended prior to the start of construction and may resume within the new Promenade’s arrangement once construction is completed.
During construction, the contractor is required to maintain pedestrian access through the Promenade and into businesses. To accomplish this, it is anticipated that there will be some night work as needed in addition to regular daily construction activities. The construction will result in impacts to pedestrian and vehicular circulation in the area; however, the contractor will be required to provide adequate signage to keep the public informed and safe throughout construction.
FINANCIAL ANALYSIS
There is earmarked funding of $2,855,286 for the Forest Promenade Permanent Conversion. This was a rough amount earmarked in the early days of planning for the Promenade, well before full scoping and design was further developed (and obviously before the project was put out to bid). Supplemental funding in the amount of $4,409,629 is needed to cover costs for construction, construction management, inspection services, geotechnical engineering services, arborist services, construction staking, engineering support, and contingencies. Below is a breakdown of the project costs.
Table of Project Costs
Description Expenditures
Construction Contract $5,549,965
Construction Contingency $1,100,000
Construction Mgmt & Inspection $340,950
Const. Mgmt. & Insp. Contingency $34,000
AWARD OF CONSTRUCTION CONTRACT FOR THE FOREST PROMENADE PERMANENT
CONVERSION
January 13, 2026
Geotechnical/Materials Testing $40,000
Arborist Services $50,000
Construction Staking $75,000
Engineering Support $75,000
TOTAL EXPENDITURES $7,264,915
FUNDING EARMARKED $2,855,286
FUNDING NEEDED ($4,409,629)
To fully fund the Forest Promenade Permanent Conversion Project, staff recommends transferring $4,409,629 in existing appropriations from inactive or delayed Capital Improvement Projects not proceeding to construction during the current fiscal year. These project accounts will be considered for replenishment in future CIP budget cycles, as necessary. The proposed funding transfers are summarized below:
Fund Account Amount Description
CIP Fund 6163130-81000-CPY18 ($1,746,740) Parks Rehab-Moulton, Alta, Lang CIP Fund 6163130-81000-CPY16 ($923,001) Decorative Fencing Channel CIP Fund 6163130-81000-C2115 ($759,888) Downtown Action Plan Improvements CIP Fund 6163130-81000-C2404 ($980,000) Bluebird Cyn Storm Drain Repair CIP Fund 6163130C-81000-C2317 $4,409,629 Forest Promenade Permanent Conv.
In June 2025, the City’s consultant, Cary Stump Cost Consulting LLC, prepared a conceptual cost estimate for the Forest Promenade project. The estimate projected a construction cost of approximately $6.9 million, with an additional $1.1 million in soft costs, for a total of $8.0 million. Mr. Stump included a four-month delay before construction would start as well as the expected costs of federal tariffs in his estimate. The current estimated total project cost of $7.26 million is within the range of this prior estimate and reflects updated bidding results.
ENVIRONMENTAL ANALYSIS
AWARD OF CONSTRUCTION CONTRACT FOR THE FOREST PROMENADE PERMANENT
CONVERSION
January 13, 2026
The City Council finds that these awards are a part of the Promenade on Forest project (hereinafter referred to as "Project"), which proposes to convert a temporary pedestrian plaza occupying a portion of Forest Avenue into the development of a permanent pedestrian plaza within the existing City right-of-way. On March 25, 2025, the City Council approved the Project, and as part of the approvals, found the Project to be statutorily exempt from the California Environmental Quality Act ("CEQA") (Public Resources Code §21000 et seq.; 14 CCR§ 15000 et seq.) pursuant to Public Resources Code section 21080.25(b), as amended by Senate Bill 922 (SB 922), which exempts "pedestrian and bicycle facilities that improve safety, access, or mobility, including new facilities, within the public right-of-way," and as set forth in the CEQA Notice of Exemption (NOE) that was filed within five working days after the March 25, 2025 approval. (Pub. Resources Code, §21080.25(b)(l).) Amongst other things, part of the Project approvals includes design review, which was approved by the City Council on June 11, 2025. The approval of the abovereferenced contracts further implements the Project by permitting the construction of the Project. Thus, these actions are statutorily exempt under Senate Bill (SB) 922/Public Resources Code Section 21080.25(b)(l), for the same reasons set forth in the CEQA Notice of Exemption (NOE) that was filed within five working days after the March 25, 2025, City Council approval. There have been no changes to the Project, no changed circumstances, and no new information that could not previously have been known, that would trigger the need for subsequent CEQA review.
ATTACHMENTS
1. Construction Contract with Superb Engineering (Pgs. 7-11)
2. Professional Service Agreement with Nexgen Design Builders Inc (Pgs. 12-69)
3. April 23, 2024
Staff Report:
https://lagunabeachcity.granicus.com/MetaViewer.php?view_id=3&clip_id=2331&meta_id=192008 Minutes:
https://lagunabeachcity.granicus.com/DocumentViewer.php?file=lagunabeachcity_b4c9f1f0d75bd02e be96f423c615a006.pdf&view=1
4. February 3, 2025 Staff Report and Minutes
Staff Report:
https://lagunabeachcity.granicus.com/DocumentViewer.php?file=lagunabeachcity_d138379fa2c6fc8b 7db2c4d2551917ee.pdf&view=1
Minutes:
https://lagunabeachcity.granicus.com/DocumentViewer.php?file=lagunabeachcity_77057c964b93f55c 3f2c0a95bb0b649d.pdf&view=1
5. June 11, 2025 Staff Report and Recap:
Staff Reports:
https://lagunabeachcity.granicus.com/MetaViewer.php?view_id=3&clip_id=2694&meta_id=226859 https://lagunabeachcity.granicus.com/MetaViewer.php?view_id=3&clip_id=2694&meta_id=226872 Recap:
https://lagunabeachcity.granicus.com/DocumentViewer.php?file=lagunabeachcity_08de1bc86df2ef74 01ac505782e684a0.pdf&view=1
AWARD OF CONSTRUCTION CONTRACT FOR THE FOREST PROMENADE PERMANENT
CONVERSION
January 13, 2026
Submitted By: Mark McAvoy Approved: .David A Kiff
Mark McAvoy, Director of Public
Works & Utilities Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Thomas Perez, City Engineer Michelle Bannigan, Finance Director Patrick Donegan, Assistant City Attorney