FIRST AMENDMENT TO
PROFESSIONAL CONSULTANT SERVICES AGREEMENT
HR&A ADVISORS, INC.
Lease/Leaseback Public-Private Partnership Transactions
THIS FIRST AMENDMENT TO PROFESSIONAL CONSULTANT SERVICES AGREEMENT ("First Amendment") is made and entered into this _ 2022, by and between the CITY OF RIVERSIDE, a California charter city and municipal corporation ("City"), and HR&A ADVISORS, INC., a New York corporation authorized to do business in California ("Consultant"), with respect to the following:
RECITALS
A. The City and Consultant entered into that certain Professional Consultant Services Agreement dated May 10, 2021 ("Agreement"), for Lease/Leaseback Public-Private Partnership Transactions.
B. The Agreement is set to expire May 10, 2022.
C. The City and Consultant desire to extend the term of the Agreement until December 31, 2022, to have Consultant provide additional services and add increased compensation of Thirty-Five Thousand Dollars ($35,000.00) during the extended term of the Agreement.
NOW, THEREFORE, incorporating the recitals set out above, the parties hereto mutually agree to the following amendment to the Agreement.
1. Section 2, , "Term," is hereby amended to extend the term of the Agreement until December 31, 2022
2. Section 2, "Scope of Services," is amended by adding the additional services set forth in Exhibit "A-1," attached hereto and incorporated herein by this reference.
Section 3, "Compensation/Payment," is hereby amended to increase the compensation by Thirty-Five Thousand Dollars ($35,000.00) during the extended term of the Agreement, pursuant to the fee schedule set forth in Exhibit "B-1," attached hereto and
4. All other terms and conditions of the Agreement between the parties, which are not inconsistent with the terms of this First Amendment, shall remain in full force and effect as if fully set forth herein.
[SIGNATURES ON FOLLOWING PAGE.]
1 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Professional Consultant Services Agreement to be duly executed the day and year first above written.
CITY OF RIVERSIDE, HR&A ADVISORS, INC.,
a California charter city and municipal A New York corporation authorized to do corporation business in California
By:
City Manager Its: Vice President
Attest: By: You t
City Clerk Its: Chief Operating Officer and Assistant Secretary Certified as to Availability of Funds:
Chief Financial Officer
Approved as to Form:
By: wer
Assistant City Attorney
liRc-citylawicycom:WPDocs|D001\P031\00637505.DOC
19-1624.1 SDW 03/01/22
2 EXHIBIT "A-1"
SCOPE OF SERVICES
HRAR
Analyze. Advise. Act.
700 South Flower Street, Suite 2995, Los Angeles, CA 90017 T: 310-581-0900 | F: 310-581-0910 | www.hraadvisors.com January 25, 2022
Edward Enriquez, Chief Financial Officer
City of Riverside
3900 Main St.
Riverside, CA 92522
Dear Edward:
Following conversations with your office at the end of last year, and as requested, HR&A Advisors, Inc. ("HR&A") has prepared the following scope of work to support the City of Riverside (the "City" to advance discussions with Live Nation Worldwide Inc. ("Live Nation) regarding a new agreement to lease and operate HR&A is pleased to continue to provide the City with strategic support as it seeks favorable public-private partnerships that meet its economic development goals while aligning with its fiscal principles. HR&A is a leading economic development and real estate consulting firm with more than 40 years of national and local experience supporting complex public-private projects, including from our office in Los Angeles. Our deep experience analyzing and advising on public-private partnerships for municipal governments and public agencies in California and across the nation will allow us to provide actionable and timely to advance the City's goals and interests as it considers options for operating these two municipal venues.
PROPOSED SCOPE OF WORK
We have begun reviewing materials your office sent and proposed propose three immediate-term tasks to assist the City in advancing conversations with the operator regarding the Fox Theater and Riverside Municipal Auditorium (RMA) agreements.
Task 1. Review of Venue Performance and Characteristics: Building on our initial review, we would discuss further the venues' characteristics and performance with you and other stakeholders, as appropriate to better understand revenue drivers, market position, event types, seating and capacity flexibility, and technology.
Task 2. Industry Benchmarking: Armed with a greater understanding of the venues performance characteristics, HR&A would review current and proposed deals for the Fox Theater and RMA against comparable venues and related agreements.
Deal specifics on other venues are very uneven and vary widely by market conditions and type of venue.
Moreover, these agreements are difficult to come by and operators often seek to keep their details concealed. Still identifying comps is critical to this analysis, and we will seek to find these comps and make any appropriate adjustments for the City's venues and context. Based on our understanding - confirmed by our industry contacts - most of this information will be collected by public document review followed by interviews with key stakeholders in precedent municipalities. We understand the City has already collected some comparable agreements and that should give us a head start.
Task 3. Summary of Findings and Recommended Next Steps: HR&A will summarize the venues' existing conditions, synthesize findings from our benchmarking analysis, and identify relevant terms across key deal points such as rent structure, roles and responsibilities of public owners and private operators covering areas New York | Dallas | Los Angeles | Raleigh | Washingion DC such as capital investments, replacement costs, maintenance and operations, other risk sharing approaches, renewal options. We will also summarize key questions and information that the City should request from the operator to gain clarity on its proposal.
HR&A will put these summarized findings and recommended next steps in a memo format.
FUTURE OPTIONAL TASKS
In addition to the three outlined tasks above, HR&A is available to subsequently assist the City with financial evaluation of any detailed financial offer and term sheet negotiations/drafting as needed. We are also able to perform a preliminary market sounding to gauge whether there are other potential operators who nay wish to lease the Fox Theater, RMA, or both, and support any further exploration of a solicitatior through a Request for Proposals. These tasks have not been budgeted as part of this proposal.
PROPOSED FEE AND SCHEDULE
HR&A expects the three immediate-term tasks described in this letter will require $35,000 in total fee and take about eight weeks to complete. As with our previous work, we would continue to bill the City on a time and materials basis not to exceed authorized levels. HR&A's updated discounted public sector rates, effective January 1, 2022 and guaranteed through December 31, 2022 are shown below.
Personnel Hourly Rate
Chair / Vice Chair $ 550
Senfor Advisor $430 - $535
Partner $ 450
Principol 395
Director :345
Senior Ancilyst $ 255
Analyst 200
Research Analyst S 160
Acimin 105
With your notice to proceed, HR&A can begin this work.
Please let me know if I can answer any questions about our proposed tasks and approach.
Sincerely,
Alithate
Amitabh Barthakur
Partner
HR&A Advisors, Inc.
HR&A Advisors, Inc. Document Title Here | 2
EXHIBIT "B-1"
COMPENSATION
HRA
Analyze. Advise. Act.
700 South Flower Street, Suite 2995, Los Angeles, CA 90017 T: 310-581-0900 | F: 310-581-0910 | www.hraadvisors.com March 7, 2022
Edward Enriquez, Chief Financial Officer
City of Riverside
3900 Main St.
Riverside, CA 92522
Dear Edward:
Following conversations with your team last week about the status of the Riverside Convention Center expansion and parking facility public-private partnership (P3) HR&A Advisors, Inc. ("HR&A") has prepared the following scope of work to support the City of Riverside (the "City") evaluate the revised development proposal and best approach to procuring the public facilities.
We understand that following last year's decision by City Council to delay the commencement of a P3 agreement with Greens Group ("Greens") and Griffin Swinerton (GS) two significant changes to the multifamily development. Given the analysis HR&A provided to the City last year, these changes alter the projected financial outcome of the project to the City by reducing expected fiscal revenues.
Second, in response to feedback from City Council, GS has proposed a 100,000 SF expansion to the existing Riverside Convention Center (RCC) and the construction of an outdoor amphitheater adjacent the RCC consistent with the initial Riverside Alive proposal. This expanded construction program is in addition to the construction of a parking facility across Orange Street. As part of this proposal and to advance this project, GS has proposed a Pre-Development Agreement (PDA) for a 'progressive design-build' procurement of the public facilities, which will be followed by executing a Development Agreement at a later time. The City is seeking HR&A's advice in reviewing this document and the proposed procurement method.
HR&A is pleased to continue to provide the City with strategic support as it seeks favorable public-private partnerships that meet its economic development goals while aligning with its fiscal principles. HR&A is a leading economic development and real estate consulting firm with more than 40 years of national and local advance the City's goals and interests as it considers options for the RCC expansion, related parking facility, and mixed-use development on the block.
PROPOSED SCOPE OF WORK
HR&A would propose splitting this scope of work into three tasks.
Task 1. Review of Revised Development Program: HR&A will analyze the revised development program for the P3 agreement with Greens and GS to provide a high-level sources and uses analysis for the proposed public facilities. This may entail a review of existing market conditions to the extent any changes since HR&A's previous work.
Task 1.1 High-level Review of Sources from Mixed-use Development and Parking Operations New York | Dallas | Los Angeles | Raleigh | Washington DC HR&A will review Greens updated mixed-use development program and phasing plan to understand the implications for the sources of funding for the RCC expansion and related parking structure. This will include reviewing the magnitude and timing of related fiscal impacts of private development. We will also update - to the extent possible - demand inputs for the proposed parking facility based on the changes to the mixed-use development program and timing and RCC expansion. Lastly, we will work with the City to identify the potential qualitative impacts of the loss of Garages 1 and 2 on downtown parking demand and how that may affect the proposed parking facility.
Task 1.2 High-level Review of Uses from RCC Expansion and Parking Facility Construction and Operations HR&A will confirm assumptions regarding the size and cost of the RCC expansion with GS, as well as the size and cost of the parking facility planned, if that is expected to change with the advent of the RCC expansion and potential loss of Garages 1 and 2. In addition, we will consider any revisions to the operating expenses for the parking facility based on changes to the mixed-use development program and RCC expansion.
Deliverable: HR&A will update the sources and uses model for the revised development program and share high level findings with the City team in a brief memo within three weeks of receipt of a revised development program assumptions from Greens and GS.
Task 2. Identify Appropriate Procurement Method for RCC Expansion and Parking Facility: This task comprises two pieces of analysis. First, HR&A will undergo an initial review of the PDA and identify key considerations and risks to discuss with the City team. Following this initial review, we will review alternative procurement approaches and their relative risks and benefits in the context of this project.
Task 2.1 - Review of PDA Key Considerations and Risks
HR&A will examine and evaluate the latest version of the PDA presented by GS to understand the details of the agreement and identify key considerations and risks to the City, as well as how these risks align with City goals. This will build on HR&A's previous discussion with the City team about the PDA.
Task 2.2 - Scan of Alternative Procurement Approaches
Following a review of the GS PDA and categorization of its key considerations and risks, HR&A will perform a scan of other PDAs in the region and nationally to review and inventory alternative approaches that may be appropriate for this project. This will include review of other PDA documents and, potentially, conversations with other municipalities or market stakeholders to help understand the context around these PDAs and their rationale. This scan will inform a matrix of potential pros and cons to a selected number of approaches.
Deliverables: HR&A will prepare and walk through a PowerPoint presentation with the City team of key considerations and risks for the PDA upon the completion of Task 2.1. At the end of Task 2.2 HR&A will author a memo that summarizes the findings from Task 2.1, synthesizes key takeaways from our scan o alternative procurement agreements, and itemizes the relative risks and benefits of these alternativ approaches in the context of the Riverside P3 project. HR&A will complete Task 2 within six weeks of notice Task 3. Ongoing Support for RCC Expansion and Parking Facility Procurement: Based on recommendations included in the Task 2 memo, HR&A will assist the City in determining the appropriate path and next steps for advancing procurement of the RCC expansion and related parking facility, HR&A will support the City - as needed - as it negotiates with GS (and potentially Greens) to procure the public infrastructure. This may include incorporating takeaways from the high-level sources and uses analysis in Task 1 and best practice gathered as part of Task 2.
HR&A Advisors, Inc. Riverside Alive P3 Support | 2
As part Task 3, HR&A would not be able to provide careful review and consideration of budgeted line items in any type of procurement. Rather, we would need to engage technical experts to evaluate those aspects of a negotiation, including potentially but limited to civil engineers, architects, and additional legal counsel.
PROPOSED FEE & SCHEDULE
HR&A proposes to bill all projects on a time and materials basis, invoicing the City monthly. We anticipate Task 1 will require 40 hours of work, or approximately $12,000 and finish within three weeks of receipt of a revised development program assumptions from Greens and GS. HR&A expects Task 2 will require 75 hours of work, or approximately $23,000, and be completed within 6 weeks of notice to proceed. If the City engages HR&A to provide ongoing support through Task 3, we will work with the City staff to establish milestones and expectations for ongoing support on a time and materials basis, excluding any subconsultant fees for technical experts that the City may ask us to engage to support this effort. HR&A's updated discounted public sector rates, effective January 1, 2022 and guaranteed through December 31, 2022 are shown below.
Personnel. Hourly Rate
Chair / Vice Chair 550
Senior Advisor $430 - $535
Partner $ 450
Principal 395
Director 345
Sontor Ancilyst 255
Analyst 200
Research Analyst S -160
Admin 105
With your notice to proceed, HR&A can begin this work.
Please let me know if I can answer any questions about our proposed tasks and approach.
Sincerely,
Albarthat.
Amitabh Barthakur
Partner
HR&A Advisors, Inc.
HR&A Advisors, Inc. Riverside Alive P3 Support | 3