SECOND AMENDMENT TO
PROFESSIONAL CONSULTANT SERVICES AGREEMENT
HR&A ADVISORS, INC.
Lease/Leaseback Public-Private Partnership Transactions
THIS SECOND AMENDMENT TO PROFESSIONAL CONSULTANT SERVICES AGREEMENT ("Second Amendment") is made and entered into this day of , 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
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 City and Consultant entered into that certain First Amendment to Professional Consultant Services Agreement dated May 3, 2022 ("First Amendment").
C. The Agreement is set to expire December 31, 2022.
The City and Consultant desire to extend the term of the Agreement until June 30, 2023, to have Consultant provide additional services and add increased compensation of Two Hundred Thousand Dollars ($200,000.00) 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 June 30, 2023.
2. Section 2, "Scope of Services," is amended by adding the additional services set forth in Exhibit "A-2," attached hereto and incorporated herein by this reference.
Section 3, "Compensation/Payment," is hereby amended to increase the compensation by Two Hundred Thousand Dollars ($200,000.00) during the extended term of the Agreement, pursuant to the fee schedule set forth in Exhibit "B-2," attached hereto and incorporated herein by this reference.
4. All other terms and conditions of the Agreement between the parties, which are not inconsistent with the terms of this Second Amendment, shall remain in full force and effect as if fully set forth herein.
1 IN WITNESS WHEREOF, the parties hereto have caused this Second 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: By: finitabt Bustaker
City Manager Print Name: Amitabh Barthakur
Its: Vice President
(Signature of Board Chair, President, or
Vice President)
Attest:
City Clerk
and
Certified as to Availability of Funds: By:7
Print Name: Jamie Dang
Its: Assistant Secretary and Chief Operating Officer
By: 377 (Signature of Secretary, Assistant
Chief Financial Officer Secretary, CFO, Treasurer, or Assistant Treasurer)
Approved as to Form:
By: Bloo
Senior Deputy City Attorney
19-1624.6 RBK 6/27/22
2 EXHIBIT "A-2"
SCOPE OF SERVICES
[CONTINUES ON FOLLOWING PAGE]
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 May 16, 2022
Edward Enriquez, Assistant City Manager
City of Riverside
3900 Main St.
Riverside, CA 92522
Dear Edward:
Following our conversation last week about the status of the Riverside Alive P3 project (the "Project"), HR&A Advisors, Inc. ("HR&A") has prepared the following scope of work to support the City of Riverside (the "City") advance the delivery of the Project, leading the negotiation with Griffin Swinerton for the public infrastructure components, inclusive of the Convention Center expansion ("C") and the new Parking Structure ("PS"'), and coordinating with the City on the parallel efforts and negotiations around the mixed-use component of the Project.
HR&A submitted a memorandum in early April 2022 where we provided findings and recommendations on how to advance the delivery of the CC and PS, after 1) updating the financial sources and uses analysis to understand the overall financial rationale of the Projects, 2) reviewing the two pre-development agreements submitted by Griffin Swinerton ("GS") and 3) holding an initial conversation with them about the Project background and delivery model proposed.
HR&A is pleased to continue to provide the City with strategic support as it seeks the most optimal public- private partnerships that meet its economic development goals while aligning with its fiscal requirements.
HR&A is a leading economic development and real estate consulting firm with more than 45 years of national and local experience supporting complex public-private projects ("P3s"), 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 guidance to advance the City's goals and interests as it considers options for the CC expansion, related parking facility, and mixed-use development on the block.
PROJECT GOALS AND PRINCIPLES
HR&A goals are aligned with those of the City 1) to advance the development of the Riverside Alive P3 with a program consistent with the vision set forth in the initial solicitation from 2019 and to 2) seek a delivery model and development agreement that has tolerable risk levels, is effective and efficient, and protects the interests of the City. In pursuing this goal, HR&A will be guided by the following principles:
• Objectivity: HR&A is an independent advisory firm with no brokerage, investment, or parallel business models that could present a conflict of interest or limit our ability to provide the City with the best of our services and staff.
• Integration: HR&A has worked in complex public-private development projects across the country and can seamlessly integrate their teams within those of the City, supplementing and expanding, where there is a needed in a collegial and collaborative manner. • Rigor: HR&A praises itself in having robust in-house analytical and financial modeling skills that complement our strategic advisory services, allowing for the required accuracy and detailed in our findings and recommendations.
New York | Dallas | Los Angeles | Raleigh | Washington DC • Flexibility: HR&A embarks this new phase of work with the City with the understanding that negotiation and implementation of complex P3s like this one, require nimbleness and flexibility, and understands that the City's guidance around our services and role on the Project may quickly change.
We are committed to be responsive and amenable to the needs of the City as they evolve.
PROPOSED SCOPE OF WORK
In support of the City, HR&A expects to perform tasks and services under the following workstreams. These workstreams are, in our experience, typical in P3 and real estate procurements and negotiations. However, given the open-ended nature of these processes, not all tasks and services described below may be necessary, while others not included may be required as work and engagement with the developers continue.
HR&A will seek the City's approval before initiating any activity not contemplated in the workstreams below.
The project negotiation and implementation roadmap that we will build in collaboration with the City at the beginning of the assignment, as part of Workstream B, will help further define which of the services and tasks outline below to prioritize.
Workstream A | Overall Project Management and Coordination: HR&A will manage the day-to-day of all activities regarding the public infrastructure component (CC and PS) and remain in close coordination with the City team leading the mixed-use component of the Riverside Alive P3 project. HR&A schedule and facilitate internal and external meetings, manage key documents and establish information sharing protocols and platforms, and support the City identifying, procuring, and managing any third-party consultant or service providers necessary to advance the Project.
Workstream B | Project Negotiation and Implementation Roadmap: At the onset of this contract, HR&A will develop a master project schedule, from current project status to breaking ground, inclusive of both the public infrastructure components (CC and PS) as well as the mixed-use component of the Project. The master project schedule will help identify required activities needed to advance the Projects from their current state to breaking ground. The master project schedule will serve as roadmap to define a critical path, track progress, identify challenges, and provide accurate reporting to the City. We will update this master schedule regularly to reflect the most recent Project developments.
Workstream C | Market and Financial Due Diligence: To date, HR&A has already been providing services to the City under this workstream. Moving forward, we will leverage our current Project and market understanding and financial model to continue to evolve and update various analyses that can support the advancement of the Project and negotiation. These include, but are not limited to, continuing to iterate and leverage our interactive master financial model, perform any additional real estate or economic market analysis to source inputs and assumptions, and perform value for money analyses, if necessary.
Workstream D | Management and Coordination of Non-Financial Due Diligence: HR&A will help the City identify the need for any other consultants or third-party advisors required to perform accurate due diligence of the Project and to advance the negotiation with the developers, among their current bench or otherwise, as needed. HR&A can act as point of contact with these other parties, if the City wishes, and can help with the management of their scope of services and integrating their services and deliverables into the full project due diligence, financial model, term sheets, and development agreements. Service providers may include technical experts, including cost estimators, parking revenue and market experts, convention center revenue and market experts, legal advisors, environmental experts, and municipal finance advisors.
Workstream E | Draft Agreement and Negotiation: In collaboration with the City Attorney, and any legal advisors that may become part of the Project team, HR&A can support in the development of various pre- contractual and contractual documents that are typical in development projects of this nature, including ENAs, term sheets, pre-development agreements (PDAs), and development agreements (DAs).
HR&A will also support the City preparing negotiation strategies and will lead in discussing and presenting project parameters, key terms, concerns, and requirements from the City to GS, including issues such as HR&A Advisors, Inc. Riverside Alive P3 Support | 2
expected project implementation timelines, financing, risk minimization, and compensation. HR&A believes that this may require frequent meetings with GS, and other team members, and we are available to participate in both virtual and in-person negotiations as necessary. To support the ongoing negotiation, HR&A will leverage analyses completed in other workstreams, particularly the due diligence and interactive financial model developed in Workstreams C and D.
Workstream F | Internal and External Stakeholder Engagement: HR&A can lead various internal and external stakeholder engagement processes as necessary, including briefing and presenting to City members outside the core project team and to the City Council in matters related to the Project status and recommendations, as well as presenting to external parties such as other government bodies, members of the community, or business leaders with an interest in the Project.
Deliverables: During the course of the assignment, HR&A expects to produce various memorandums outlining the Project status, the City's positions, and summarizing interim and final agreements reached with GS. We will also produce presentations to facilitate discussions and negotiations and to brief any internal or external stakeholders, as needed.
Meetings: HR&A anticipates participating in regular meetings with the City and GS, including weekly core project team meetings, which can include members of the Economic Development team, City Counsel, and the Assistant City Managers, by-weekly or monthly executive team briefings with the City Manager, weekly or bi-weekly meetings with GS, and coordination meetings with the Greens City team. We will confirm the cadence and attendees for each of these standing meetings with you as we start our engagement.
PROJECT STAFFING AND ORGANIZATION
Amitabh Barthakur will serve as Partner in Charge, supported by Partner Shuprotim Bhaumik, as Collaborating Partner. Together they will direct the engagement and provide strategic direction for HR&A's work and overseeing all methodology and deliverables. Amitabh and Shuprotim each bring over 30 years of experience advising on real estate, economic development, and public-private partnerships in California and across the country.
Ignacio Montojo will serve as Project Manager, overseeing regular contact with the client team and ensuring effective performance of HR&A's analytic staff. Jamison Dague will serve as Deputy Project Manager and Analytical Lead. They will be supported by over 75+ diverse and talented analysts across our offices, as Together, HR&A will: a) provide overall project management and coordination, b) lead on the negotiation with GS, c) lead the market and financial due diligence, d) coordinate other technical or legal advisors supporting the due diligence, and e) provide input and help develop agreements. We will engage technical and legal subconsultants for the delivery of work as needed. Our approach to project management will include regular calls with the City team and other relevant stakeholders, as well as written bi-weekly progress updates.
PROPOSED FEE & SCHEDULE
HR&A proposes to bill all projects on a time and materials basis, invoicing the City monthly. We anticipate the process to reach a mutually acceptable PDA may take at least 2-4 months from now, but we recognize the exact timeline is beyond our control and these negotiations can take longer. The Project will present several milestones and opportunities for the City to re-assess our level of involvement and role at critical points, including agreement on a term sheet, approval of a PDA, completion of the pre-development services, and execution of a DA, etc. We will work with the City 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.
HR&A Advisors, Inc. Riversicle Alive P3 Support | 3
Personnel Hourly Rate
Chair / Vice Chair S 550
Senior Advisor $430 - $535
Partner 450
Principal 395
Director S 345
Senior Analyst 255
Analyst 200
Research Analyst 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,
elsauthate
Amitabh Barthakur
Partner
HR&A Advisors, Inc.
HR&A Advisors, Inc. Riversicle Alive P3 Support | 4
XHIBIT -2"
COMPENSATION
PROPOSED FEE & SCHEDULE
HR&A proposes to bill all projects on a time and materials basis, invoicing the City monthly. We anticipate the process to reach a mutually acceptable PDA may take at least 2-4 months from now, but we recognize the exact timeline is beyond our control and these negotiations can take longer. The Project will present several milestones and opportunities for the City to re-assess our level of involvement and role at critical points, including agreement on a term sheet, approval of a PDA, completion of the pre-development services, and execution of a DA, etc. We will work with the City 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 Choir $ 550
Senior Advisor $430 - $535
Partner 450
Principal S 395
Director $ 345
Senior Analyst S 255
Analyst 200
Research Analyst S 160
Admin S 105