September 8, 2026
Agenda Item No. 14
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Seimone Jurjis, City Manager - 949-644-3001, [email protected] PREPARED BY:
Lauren Wooding Whitlinger, Real Property Manager - 949-644-3236, [email protected] TITLE:
Professional Services Agreement with Lincoln Property Company for Property Management Services at 1201 Dove Street ABSTRACT:
The City of Newport Beach (City) acquired the office building located at 1201 Dove Street, Newport Beach (Property) in May 2023. The building is professionally managed by a third-party property management firm, Lincoln Property Company (LPC), under an agreement assigned to the City by the previous owner of the Property. Following a formal procurement process, LPC was selected as the most qualified and responsive proposer to continue to provide property management services at the property. For the City Council’s consideration is a new five-year professional services agreement (Agreement) with LPC, for property management services of the City-owned property at 1201 Dove Street.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Authorize the Mayor and City Clerk to execute the Professional Services Agreement with LPC West LP for Property Management Services for leasing, operations, and management of City property, an office building located at 1201 Dove Street, in a form substantially similar to the agreement attached to the staff report.
DISCUSSION:
In May 2023, the City purchased the 3.59-acre Property, which is currently developed with an 82,868 square foot, six-story office building with gated surface parking. The office building was originally constructed in 1973 and underwent a major renovation in 1989 with various system upgrades and maintenance and tenant improvements completed since that time. Given its construction, location, and amenities, the building is considered “Class A” or a top-tier commercial property.
The Property was originally purchased by the City as an option for possibly developing a future headquarters for the Newport Beach Police Department (NBPD). This early acquisition has allowed the City to continue leasing the office spaces at the Property and recoup a portion of the purchase price with the pre-existing net income stream.
Occupancy rates at the building have fluctuated since the City acquired the Property due to tenants “right sizing” their office space at expiration of their lease, softening market conditions, and changes in the local office submarket. The building is currently 67%leased, with 27,074 square feet available for rent, comprised of 10 tenant spaces ranging in size from 1,114 to 4,842 square feet. Terms are being negotiated for several of the available spaces, and leases will be presented to City Council for consideration when the agreements are ready. The 18 current tenants include finance, healthcare, real estate, legal, and other users in spaces ranging from approximately 952 to 6,465 square feet and have leases expiring in 2026 to 2031.
Since the City’s acquisition, the Property has been managed by LPC under an agreement that was assigned to the City when the purchase transaction was completed in 2023 (Existing Agreement). Under the Existing Agreement, the management fee is set at the greater of $7,500 per month or 2% of the gross monthly revenues of the Property. The City has consistently paid $7,500 per month since acquisition. Additional fees for asset management, staffing and overhead expenses have also been paid under the terms of the Existing Agreement, which will be terminated upon 30 days’ written notice should this item be approved.
Request for Proposals
Consistent with City Council Policy F-14 (Contract Procurement and Authority to Contract) and following the expiration of the initial term of the Existing Agreement in 2023, the City published Request for Proposals No. 24-14 (RFP) in September 2023, to solicit proposals for management of the Property. The RFP was distributed through PlanetBids, the City’s web-based procurement portal, and was also emailed to over a dozen property management companies with a presence in Southern California.
A mandatory pre-bid site walk was held on October 5, 2023, and proposals were due to the City by October 26, 2023.
The purpose of the RFP was to solicit from qualified firms interested in providing full-service property management of the Property, on behalf of the City. The scope of the work includes managing the tenants as well as marketing, leasing, operation, maintenance, and selection, contracting and oversight of third-party vendors such as janitorial, parking management, landscaping services, and tenant improvement design and construction.
The City received three proposals to manage the Property. The proposals were reviewed by a staff panel and scored based on the following criteria:
Qualifications and Experience of the firm;
Demonstrated Experience and Subject Matter Expertise in Providing the Requested Services; Ability to Deploy and Provide the Services Requested in the RFP; and Project Costs.
Proposers were required to have managed and/or maintained an office building of similar size, quality, and number of tenants, and experience providing a similar slate of property management services. Experience with and processes in-place for accounting and finance functions, including certain audited processes or the ability to obtain those audits, were also minimum standards required under the scope of the RFP.
City staff conducted a thorough review of the proposals and interviewed the top two candidates. Following evaluation of the proposals and the in-person interviews, LPC stood out in the rankings as the best overall candidate and able to meet all of the minimum qualifications and requirements under the RFP.
Lincoln Property Company
LPC West LP, doing business as LPC, is one of the largest full-service real estate firms in the United States with office, industrial, retail, mixed-use, and specialty properties. The West Coast business unit leases and manages a portfolio of over 35 million square feet from eight offices in four states, and with support from its corporate offices in Dallas, Texas. As a property owner and developer, LPC is uniquely positioned to additionally provide its expertise as a third-party service provider. Because of its size, LPC can leverage its existing staffing, accounting systems and procedures, leasing teams, and engineering and maintenance practices to provide professional services rather than having to procure all new contracts or subcontractors. Additionally, LPC can meet the City’s stringent financial reporting and internal controls requirements and provide a systems and organization controls (SOC) reporting, which is imperative for the City’s own audit requirements.
Professional Services Agreement
While not an exhaustive list, key terms of the proposed Agreement are summarized below:
The term shall be for a period of five years;
The monthly property management fee shall be set at the greater of $2,500 per month or 3% of gross revenues for the immediately preceding fiscal year. Additionally, a $1,000 monthly accounting fee shall be paid by the City; Property management and engineering staffing expenses will continue to be proportionally shared with other properties in LPC’s portfolio and shall not escalate more than 3% per year; Construction management fees shall continue to be billed on a per project basis at a rate of 5% of the hard costs related to the project; LPC shall continue to provide the daily management of the Property and communication with tenants and the City, including enforcing the terms of all related agreements; LPC will provide accounting, leasing, and asset management services, oversight and procurement of all third-party services provided to the Property, maintenance, repair, and improvements of the Property; In addition to its on-site obligations, LPC will provide extensive reporting and compliance with a set of standard operating procedures developed for the Property as outlined in Exhibit A – Scope of Services to the Agreement; and LPC shall continue to provide certificates of insurance to the satisfaction of the City’s risk manager, naming the City as additional insured.
The Agreement has been reviewed by the City Attorney’s Office, has been approved as to form, and LPC has reviewed and approved the terms of the Agreement.
FISCAL IMPACT:
The adopted budget includes sufficient funding for this Agreement. It will continue to be expensed to the 1201 Dove Street Property Management Expense account in the City Manager’s Office, 01020205-871075-RPDOV.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A – Professional Services Agreement
Professional Services Agreement with Lincoln Property Company for Property Management Services at 1201 Dove Street September 8, 2026
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