Contract No. 10713 (CCS)
CONTRACTUAL SERVICES AGREEMENT
This Contractual Services Agreement ("Contract"), entered into this _ 18 day of Sepx:, 2018 ("Execution Date"), by and between the CITY OF SANTA MONICA, a municipal corporation ("City"), and Corporate Realty Group ("CRG"), is made with reference to the following:
RECITALS:
A. The City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City.
B. CRG is qualified to do business, and is doing business, in the State of California.
CRG represents it has the background, knowledge, experience and expertise necessary to provide the services set forth in this Contract.
C. The City and CRG desire to enter into an agreement for the CRG to provide contractual services to the City as set forth herein, upon the terms and conditions set forth below.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows:
TERMS AND CONDITIONS
1. Term. This Agreement begins on the Execution Date and terminates on August 31, 2021 with two one-year term options to renew at the sole discretion of the City, unless sooner terminated in accordance with Section 14.
2. CRG Services. CRG will perform all of the services ("Services") described in Exhibit A, Scope of Services. CRG will complete the Services in accordance with Exhibit B, Budget.
3. City Services. The City agrees to:
3.1 Make available to CRG any currently existing documents, data or information required for the performance of the Services.
3.2 ] Designate a representative authorized to act on behalf of City.
3.3 Promptly examine and render findings on all documents submitted for staff review by CRG.
4. Compensation. The City will compensate CRG for the Services performed in an amount not to exceed $391,465 in years one through three of the term of the Agreement. The renewal option years of the Agreement, if exercised by the City, shall be for $581,486 for year four, the first renewal option, and $67,994 for year five, the second renewal option. The total compensation paid to CRG under this Agreement if - 1-
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the City exercised all of its renewal options for a full five-year term shall not exceed $1,040,945 as set forth in Exhibit B.
5. Invoices. CRG will invoice the City for the Services in accordance with Exhibit B and the City will pay any undisputed amount within 30 days of receipt.
6. Notices. All notices, demands, requests or approvals to be given under this Agreement, must be in writing and will be deemed served when delivered personally, by email, or on the third business day after deposit in the United States mail, postage prepaid, registered or certified, addressed as follows:
6.1 All notices, demands, requests or approvals to the City:
Public Works/ Santa Monica Municipal Airport
City of Santa Monica
3223 Donald Douglas Loop South
Santa Monica, California 90405
Attention: Stelios Makrides, Airport Director
Re: Contract No. 10713
with a copy to:
Santa Monica City Attorney's Office
1685 Main Street, Third Floor
Santa Monica, California 90401
Attention: City Attorney
Re: Contract No. 10713
6.2 All notices, demands, requests or approvals to CRG:
Corporate Realty Group
1526 14th Street Suite 108
Santa Monica, CA 90404
Attention: Craig Zund
Telephone: (310) 570-5011
Fax: (310) 999-6588
[email protected]
Re: Contract No. 10713
7. Independent Parties. Both parties to this Agreement will be acting in an independent capacity and not as agents, employees, partners, or joint venturers of one another.
Neither the City nor its officers or employees will have any control over the conduct of CRG or any of CRG's agents, employees, or subconsultants, except as otherwise provided in this Agreement.
8. Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties. Any preliminary negotiations and agreements of any kind or nature are merged into this Agreement. No oral - 2-
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agreement or implied covenant may be held to vary the provisions of this Agreement.
This Agreement may be modified only by written agreement signed by City and CRG, and approved as to form by the City Attorney.
9. Insurance. Prior to commencing work, CRG must procure, maintain and pay for insurance against claims for injuries to persons or damage to property that may arise from or in connection with the performance of the Services by CRG or CRG's agents, representatives, employees or subconsultants for the duration of this Agreement. CRG must obtain insurance that, at a minimum, meets the requirements for insurance set forth in Exhibit C, Insurance Requirements and Verifications.
10. Defense and Indemnification.
10.1 CRG agrees to defend, indemnify, protect, and hold harmless the City, its agents, officers, boards and commissions, and employees (collectively, "City") from and against any and all liability, claims, demands, damages, or costs, including but not limited to attorney's fees, or payments for injury to any person or property (collectively, "Losses") caused or claimed to be caused by the act, errors, and/or omissions of CRG, or CRG's employees, agents, officers, and subconsultants. CRG's responsibilities under this Section 10.1 include liability arising from, connected with, caused by, or claimed to be caused by the active or passive negligent acts or omissions of the City, which may be in combination with the acts or omissions of CRG, its employees, agents or officers, or subconsultants; provided, however, that CRG's duty to defend, indemnify, protect and hold harmless shall not include any Losses arising from the sole negligence or willful misconduct of the City. Notwithstanding CRG's obligation to defend City hereunder, City has the right to conduct its own defense and seek reimbursement for reasonable costs of defense from CRG, if City chooses to do so.
10.2 Enforcement Costs. CRG agrees to pay any and all costs the City incurs enforcing the indemnity, defense and hold harmless provisions set forth in Section 10.1.
11. Prohibition Against Transfers.
11.1 CRG may not assign, hypothecate, or transfer this Agreement or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any attempt to do so without the City's consent will be null and void, and any assignee, hypothecatee or transferee acquires no right or interest by reason of such attempted assignment, hypothecation or transfer.
11.2 The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of CRG or of any general partner or joint venturer or syndicate member of CRG, if a partnership or joint venture or syndicate exists, which results in changing the control of CRG, will be construed as an - 3 -
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assignment of this Agreement. Control means 50% or more of the voting power of the corporation.
12. Permits and Licenses. CRG, at its sole expense, must obtain and maintain during the term of this Agreement all required business and professional permits, licenses and certificates.
13. Waiver. A waiver of any breach of this Agreement may not be deemed a waiver of any subsequent breach of the same or any other term, covenant, or condition of this Agreement.
14. Default and Termination.
14.1 If CRG fails or refuses to perform any of the provisions of this Agreement, and if the default is not cured within a period of five days after the City's written notice of default specifying the nature of the default, City may immediately terminate this Agreement by written notice to CRG.
14.2 The City has the option, at its sole discretion and without cause, of terminating this Agreement by giving ten days' written notice to CRG. If either party terminates the Agreement, and if CRG is not default, the City shall pay CRG any earned and unpaid compensation through the effective date of termination.
Notwithstanding, The City shall pay CRG a reasonable pro-ration of its standard commission for any lease negotiations that were active prior to the termination of the Agreement, and where following the termination of the Agreement the City and the party CRG had been negotiating with execute a lease agreement. The reasonable pro-ration of the commission paid to CRG shall be based on the time CRG spent negotiating with the other party relative to the time from when the Agreement is terminated and the time it takes for the City to execute a lease with the other party. CRG shall be responsible for providing the City with reasonable documentation of the time it spent negotiating a lease in order to receive unpaid compensation under this Section. •15. Compliance with Law. CRG must comply with all laws of the State of California and the United States, and all ordinances, rules and regulations enacted or issued by City.
16. Discrimination. CRG may not discriminate in the provision of services hereunder because of race, color, religion, national origin, ancestry, sex, age, sexual orientation, marital status, AIDS or disability.
17. Nuisance. CRG may not maintain, commit, or permit the maintenance or commission of any nuisance in connection with the performance of services under this Agreement.
18. Records.
18.1 CRG must maintain complete and accurate records with respect to costs, expenses, receipts and other such information required by the City for any services provided where compensation is on the basis of hourly rates, - 4-
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subconsultant costs, or other direct costs. CRG must keep the records, together with supporting documents, separate from other documents and records and maintain them for a period of three years after receipt of final payment.
18.2 CRG must maintain records in sufficient detail to permit an evaluation of the Services and in accordance with generally accepted accounting principles. CRG must clearly identify all records and make them readily accessible to the City. At the City's request, CRG must provide records in an electronic format and, if necessary, access to any proprietary software to view such electronic records.
18.3 CRG must allow the City to have free access to CRG's books and records and to inspect all work, data, documents, proceedings and activities related to this Agreement. The City has the right to examine or audit CRG's records, and CRG agrees to cooperate with any examination or audit of its records. If a City audit discloses an error of 5% or more in information reported by CRG, CRG agrees to pay the cost of the City's audit computed on the basis of four times the direct payroll of the audit staff completing the audit and audit report.
19. Work Product; Reports.
19.1 Any work product prepared or caused to be prepared by CRG or any subconsultant for this Agreement will be the exclusive property of City. No work product given to or prepared by CRG or any subconsultant pursuant to this Agreement may be made available to any individual or organization by CRG without prior written approval by City.
19.2 At the City's request, CRG must furnish reports concerning the status of the Services.
20. Standard of Care. CRG agrees to provide all Services, including services performed by any subconsultant, in a manner consistent with the level of care and skill ordinarily exercised by members of CRG's profession currently practicing in the same locality under similar conditions.
21. Subconsultants.
21.1 If CRG proposes to have any subconsultant perform any part of the Services, CRG must submit a request for approval in writing, describing the scope of work to be subcontracted, the name of the proposed subconsultant, and the total price or hourly rates used in preparing an estimated cost for the subconsultant's services. The City, in its sole discretion, may grant or deny the request.
21.2 CRG will be responsible for the quality of any subconsultant's work. Every subcontract or agreement of any kind entered into between CRG and any subconsultant (or between any subconsultant and others) must contain the - 5-
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following provision:
This agreement is consistent with all terms and conditions of the Agreement No. 10713 (CCS) entered into between the City of Santa Monica and CRG on
22. Governing Law. The laws of the State of California, without regard to any choice of law provisions, will govern this Agreement.
23. Venue and Jurisdiction. The City and CRG agree that the Services will take place in Los Angeles County. Any litigation arising out of this Agreement may only be brought in either the United States District Court, Central District of California, or the Superior Court of California, County of Los Angeles, West District, as appropriate.
The parties agree that venue exists in either court, and each party expressly waives any right to transfer to another venue. The parties further agree that either court will have personal jurisdiction over the parties to this Agreement.
24. Survival of Provisions and Obligations. Any provision of this Agreement, which by its nature must be exercised after termination of this Agreement, will survive termination and remain effective for a reasonable time. Any obligation that accrued prior to termination of this Agreement will survive termination of this Agreement. - 6 -
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25. Exhibits. The following exhibits are incorporated by reference into this Contract as though fully set forth herein.
Exhibit A Scope of Services
Exhibit B Budget
Exhibit C Insurance Requirements
In witness whereof, the parties have caused this Agreement to be executed the day and year first above written.
CITY OF SANTA MONICA,
ATTEST:
denise Anderam Marue - Kick Ol
DENISE ANDERSON-WARREN
City Clerk City Manager
APPROVED AS TO FORM:
ANE DILO
City Attorney COrPORATE REALTy GrOUP
CRG Corporation-
By: _
Name: 2416- • Zund
Title: PRiNCiPAL
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Exhibit A
Scope of Services
The scope of the services provided by Corporate Realty Group (CRG) to the City under this Agreement shall include, but not be limited to, the following:
CRG will assist City staff with commercial real estate broker and consulting services for vacancies, expansions, or renewals that might arise within the contract period. The City- owned facilities relevant to this Agreement are located at the Santa Monica Airport. The goal of the parties is for the services provided to the City by CRG will optimize the marketing of available space at the Airport and will facilitate negotiations with prospective and current tenants in order to yield appropriate rental revenues for the City. Additionally, CRG will provide consulting services to staff during other lease negotiations that might arise during the term of the contract.
The commercial real estate broker services provided by CRG under this Agreement for Airpir hal indude man til the properties, negotiating eir el aco melton 02e, leasing transactions.
During the first year of this Agreement, CRG will, at no cost to the City, provide the following:
• Participate in meetings with City staff to understand the City's goals and objectives for the management of Airport properties;
• Physically inspect the Airport properties to be rented and determine their suitability for the rental market and their condition relative to same; • Develop an understanding of the available inventory at the Airport, including a determination of what spaces are coming available as well as existing lease expiration dates, tenants, critical dates, milestones and other terms and conditions; Additionally, at the City's discretion, CRG is able to provide the following services at a cost to be negotiated but shall not exceed rate schedule provided for in Exhibit B:
• Use this data to create an online database for all internal City stakeholders and CRG team members to share and collaborate;
• Develop reporting tools and create a communication plan to effectively manage the City's reporting requirements and foster continuous communication; • Interpret market conditions and create a customized strategy / project plan (submitted to city approval) for the purposes of generating the most value / revenue from the Airport real estate assets, while achieving the City's goals; • Monitor all lease expirations and lease renewal dates to ensure that all critical dates are addressed on a go forward basis, subject to the City's approval of this direction.
Exhibit B
Budget
The Agreement to be awarded to Corporate Realty Group (CRG) is for $391,465 in years one through three of the term of the Agreement, with two one-year options to renew at $581,486 and $67,994 respectively. Total contract payment if exercised for five (5) full years is not to exceed $1,040,945. Future year funding is contingent on Council budget approval.
CRG Commission Fee Schedule
Reimbursements Percentage or Flat Fee With Tenant
Representative / Outside
Broker / Additional
Broker
New Lease month-to- 1 Month's rent or by N/A
month agreements using hourly rates
described below in the
following section,
whichever is greater.
New Leases longer term Years 1-5: 3% of aggregate Years 1-5: An additional 3 lease value % of aggregate lease value
Years 6-10: 1.5% of Years 6-10: An additional
aggregate lease value 2% of aggregate lease
Lease Renewals Years 1-5: 2% of aggregate Years 1-5: An additional lease value 2% to 4% of aggregate
lease renewal value
Years 6-10: 1% of
aggregate lease value Years 6-10: An additional
1% to 2% of aggregate
lease renewal value
Lease Expansions Years 1-5: 2% of aggregate Years 1-5: An additional lease value 2% to 4% of aggregate
lease value.
Years 6-10: 1% of
aggregate lease value Years 6-10: An additional
1% to 2% of aggregate
lease value.
CRG Hourly Rate Schedule
Personnel Hourly Rates Percentage of Scope of
Work
Craig Zund/Principal $195.00 per hour 90%
Associate Brokers $150.00 per hour 10%
Project Manager $125.00 per hour On Demand
Craig Zund, Principal Broker for CRG, may provide services under this Agreement at an hourly rate that will include special reports and consulting services. and which shall not be charged back to the City.
Exhibit C
Insurance Requirements
Professional Services Agreement Insurance Requirements
Professional Liability Insurance Required
Consultant shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees or subcontractors.
Minimum Scope and Limits of Insurance
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal and advertising injury, with limits of no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (Insurance Services Office Form CG 25 04) or the general aggregate limit shall be twice the required occurrence limit.
Automobile Liability: Insurance Services Office Form CA 00 01 covering Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and Code 9 (non-owned), with limits of no less than $1,000,000 per accident for bodily injury and property damage.
3. Workers' Compensation: Workers' Compensation insurance as required by the State of California, with Statutory Limits and Employers' Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease (see footnote #1).
4. Professional Liability: Insurance appropriate to the Consultant's profession with limits of no less than $1,000,000 per occurrence or claim/$2,000,000 in the annual aggregate.
If the Consultant maintains broader coverage or higher limits than the minimums shown above, the City of Santa Monica requires and shall be entitled to any broader coverage and higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Santa Monica.
Other Insurance Provisions
1. The insurance policies are to contain, or be endorsed to contain, the following provisions:
a. Additional Insured Status: The City of Santa Monica, its officers, officials, employees and volunteers are to be covered as additional insureds on the CL policy with respect to liability arising out of work or operations performed by or on behalf of Consultant including materials, parts, or equipment furnished in connection with such work or operations. CL coverage can be provided in the form of an endorsement to the Consultant's insurance (at least as broad as Insurance Services Office Form CG 20 10 11 85, or if not available, through the addition of a combination of (1) CG 20 10, CG 20 26, CG 20 33, or CG 20 38 and (2) CG 20 37).
b. Primary Coverage: For any claims related to this Agreement, the Consultant's insurance shall be primary coverage at least as broad as Insurance Services Offices Form CG 20 01 04 13 as respects the City of Santa Monica, its officers, officials, employees and volunteers. Any insurance or self-insurance maintained by the City of Santa Monica, its officers, officials, employees or volunteers shall be in excess of the Consultant's insurance and shall not contribute with it. c. Notice of Cancellation: Each insurance policy required herein shall state that coverage shall not be cancelled except after notice has been given to the City of Santa Monica.
d. Waiver of Subrogation: Consultant hereby grants to the City of Santa Monica a waiver of any right of subrogation which any insurer of said Consultant may acquire against the City of Santa Monica by virtue of payment of any loss. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City of Santa Monica has received a waiver of subrogation endorsement from the insurer.
Self Insured Retentions
Self-insured retentions must be declared to and approved by the City of Santa Monica. The City of Santa Monica may require the Consultant to purchase coverage with a lower retention or provide satisfactory proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City of Santa Monica.
Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in California with a current A.M. Best rating of no less than A:VII, unless otherwise acceptable to the City of Santa Monica.
Claims Made Policies
1. If the Professional Liability policy provides "claims made" coverage:
a. The Retroactive Date must be shown and must be before the date of this Agreement or the start of work.
b. The insurance must be maintained, and evidence of insurance must be provided for at least 5 years after completion of work.
. If the policy is cancelled or not renewed, and not replaced with another "claims made" policy form with a Retroactive Date prior to the effective Agreement date, the Consultant must purchase "extended reporting" coverage for a minimum of 5 years after completion of work.
Verification of Coverage
Consultant shall furnish the City of Santa Monica with original certificates and amendatory endorsements (or copies of the applicable policy language effecting coverage provided by this clause). All certificates and endorsements are to be received and approved by the City of Santa Monica before work commences. However, failure to obtain required documents prior to the work beginning shall not waive the Consultant's obligation to provide them.
The City of Santa Monica reserves the right to require complete, certified copies of all required insurance policies, including the endorsements required herein, at any time.
Failure to Maintain Insurance Coverage
1. If Consultant, for any reason, fails to maintain insurance coverage which is required pursuant to this Agreement, the same shall be deemed a material breach of contract. The City of Santa Monica, at its sole option, may terminate this Agreement and obtain damages from the Consultant resulting from said breach.
2. Subcontractors
Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein. All exceptions must be approved in writing by the Risk Manager.
Footnotes
# 1: Workers' Compensation insurance coverage is not required if the Consultant does not have employees. The Consultant must, however, execute the City's Workers' Compensation Coverage Exemption Declaration Form.