Administrative
Report
H.16., File # 23-6622 Meeting Date: 8/15/2023
To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATERFRONT & ECONOMIC DEVELOPMENT DIRECTOR TITLE
APPROVE THE THIRD AMENDMENT TO THE MANAGEMENT SERVICES AGREEMENT BETWEEN THE CITY OF REDONDO BEACH AND LEONARDO MARINA MANAGEMENT, INC.
CONSENTING TO THE ASSIGNMENT OF THE AGREEMENT TO CONCORD PROPERTY
MANAGEMENT GROUP, LLC
EXECUTIVE SUMMARY
Under an agreement approved by City Council on February 21, 2012, Landmark Acquisition Company, operating as Leonardo Property Management (“Leonardo”), began performing property management services for the City’s commercial properties at the Waterfront, including Pier Plaza, International Boardwalk, and 200-250 Fisherman’s Wharf. On May 6, 2014, the Agreement was amended to expand the provision of services to the Redondo Beach Marina. On January 5, 2016, the City Council approved a second Amendment to the Management Services Agreement, which assigned the Agreement from Landmark Acquisition Property to Leonardo Marina Management, Inc. to manage the City’s Waterfront properties. The proposed third Amendment will assign the Agreement from Leonardo Marina Management, Inc. to Concord Property Management Group, LLC.
BACKGROUND
In following the vision established by the Council’s adopted Harbor Enterprise Business Plan and Asset Management Plan, the City purchased the former Pier Plaza and International Boardwalk leaseholds in 2012 and the Redondo Beach Marina leasehold in 2014. Through a competitive Request for Proposal process, the City selected Landmark Acquisition Company, dba Leonardo Management, to provide oversight responsibilities which includes property management, billing and collections, and leasing services.
Landmark’s initial Agreement to manage Pier Plaza, International Boardwalk, and 200-250 Fisherman’s Wharf was executed on February 21, 2012, with a term of one (1) year and rolling threemonth extensions that can be terminated by the City with a 90-day notice. On August 7, 2012 the City Council approved a Consent to Contract with Third Parties Agreement to allow Landmark to enter into contracts for maintenance and repair services of up to $50,000. This consent enabled Landmark to adequately manage the property and complete repairs and maintenance as needed in a more timely and efficient manner. On May 6, 2014, the Agreement was amended to expand the provision of services to the Redondo Beach Marina.
On January 5, 2016, the City Council approved a Second Amendment to the Management Services Agreement, which assigned the agreement from Landmark Acquisition Property to Leonardo Marina Management, Inc., to perform oversight responsibilities of property management, billing and
H.16., File # 23-6622 Meeting Date: 8/15/2023
Management, Inc., to perform oversight responsibilities of property management, billing and collections, and leasing services. There were no material changes to the existing policies and procedures as a result of this ownership change.
The proposed Third Amendment effectively transitions oversight of the property management services from Leonardo Marina Management, Inc. to Concord Property Management Group, LLC.
Property management operations would continue in the on-site office at Pier Plaza and the remittance of monthly payments of net income to the City for each property would proceed as they have in the past. Current rates for services remain as follows: payment of 2.9% of gross rent and fee collections for property management services and 3% of gross lease amount as a commission on any new leases that are successfully negotiated. During FY 2022, the property management firm earned approximately $157,000 in fees. The costs for these fees are not drawn from the General Fund but rather are an expense that is passed-through the direct payments made by the commercial leaseholder to the property manager. Concord takes their share of service fees from the collected rents and transfers the balance to the City. The accounting of these fees is provided to the Waterfront and Economic Development Department and reviewed on a regular basis.
COORDINATION
The Waterfront & Economic Development Department coordinated with the City Attorney’s Office on the preparation of the property management agreement.
FISCAL IMPACT
The Amendment to the Property Management Agreement will have no fiscal impact. All service fees remain the same.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Original Management Services Agreement Between the City of Redondo Beach and Landmark Acquisition Company
· Consent to Contract with Third Parties Agreement Between the City of Redondo Beach and Landmark Acquisition Company
· First Amendment to Management Services Agreement Between the City of Redondo Beach and Landmark Acquisition Company to expand services to RB Marina · Second Amendment to Management Services Agreement Between the City of Redondo Beach and Leonardo Marina Management, Inc.
· Proposed Third Amendment to Management Services Agreement Between the City of Redondo Beach and Concord Property Management Group, LLC · Concord Property Management Group, LLC Certificate of Insurance