City Council
Report
City Council Meeting: June 25, 2024
Agenda Item: 5.D
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of Professional Services Agreement with Allan D. Kotin & Associates for Real Estate Advisory Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) guidelines; and
2. Authorize the City Manager to execute a sixth modification to reinstate and extend Agreement #9543 with Allan D. Kotin & Associates for real estate advisory services for the Community Development Department. This will result in a 14-year modified agreement not to exceed $340,000 with future year funding contingent on Council budget approval.
Summary
The City has an extensive real estate portfolio with prominent assets such as the Santa Monica Pier, Civic Auditorium, and Bergamot Station Arts Center, as well as other commercial properties. As a best practice, the City retains advisory services specializing in economic and real estate analyses to inform and assist the City with valuations and negotiations. Allan D. Kotin & Associates (Consultant) was retained by the City with Council approval for such services through a 2011 Request for Qualifications (RFQ).
The City uses Consultant services to evaluate the feasibility and business terms associated with leases and licenses of several City-owned properties. To ensure continuity with existing negotiations, staff recommends extending the Professional Services Agreement (Agreement) with Consultant for two additional years. 2 of 4
Discussion
For complex projects, the City, through its Economic Development Division, engages highly specialized real estate advisory services. The City contracted with the Consultant following a 2011 RFQ process and Council direction on January 24, 2012. The Consultant was selected based on its qualifications and extensive financial and development advisory experience consulting for public agencies throughout the state.
Due to the complexity and duration of significant real estate transactions which can take several years to evaluate and negotiate, Consultant’s Agreement has been modified to extend its original term and increase its original budget as summarized in the Past Council Actions table below. On-going and complex lease negotiations, such as the City and Rooftop Cinema Club negotiations for City-owned Parking Structure 6, have been conducted with the support of the Consultant. To ensure continuity with these on-going, complex negotiations for which Consultant has the background and knowledge as City has previously retained Consultant for these negotiations, staff recommends extending the term by two additional years resulting in a 14-year modified agreement with no increase to the current authorized amount of $340,000. Future year funding would be contingent on Council budget approval.
The proposed modification would also permit the City to retain the Consultant to provide the City with economic analyses necessary for lease negotiations concerning, for example, proposed assignments, subleases, and other proposed real estate transactions provided that the lessee, proposed transferee, or other third party that is proposing the real transaction agrees to pay the Consultant upfront for the cost of these additional Consultant services. City leases require that lessees pay for the costs to review proposed transfers, including consultant and attorney fees. This would allow the City to retain Consultant for such proposed real estate transactions without using City funds.
Past Council Actions
Meeting Date Description
01/24/2012 Council authorized an Agreement for Consultant to provide real 3 of 4
estate economic and financial advisory services through June 30, 2014, in an amount not to exceed $70,000. A first modification was executed on June 26, 2014, to extend the term to
June 30, 2016.
06/23/2015 Council authorized a second modification to the extend the term through December 31, 2019, and increase the Agreement by $130,000 for a total amount not-to-exceed $200,000.
06/27/2017 Council authorized a third modification to increase Agreement authority by $100,000 for a total amount not to exceed $300,000 11/12/2019 Council authorized a fourth modification to extend the term by three one-year options and to increase Agreement authority by $40,000 for a total amount not to exceed $340,000.
10/25/2022 Council authorized a fifth modification to extend the term by one year to December 31, 2023.
Environmental Review
The Agreement is exempt from CEQA pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) guidelines, which states that CEQA does not apply “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The Agreement would provide real estate economic and financial advisory services and would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action warranted as a result of the recommended actions to extend the Agreement.
Agreement Modification Request
Agreement #
Current Authorized
Amount
FY 2023-24
Modified Request
Amount
Dept/CIP Account # Total Contract
Amount
9543 $340,000 $0 01700015.552010 $340,000
Future year funding is contingent on Council budget approval. 4 of 4
Prepared By: Ava Lee, Senior Development Analyst
Approved Forwarded to Council
Attachments:
A. Attachment A staff report 01-24-2012 3P
B. Attachment B staff report 06-23-2015 3G
C. Attachment C staff report 06-27-2017 3F
D. Attachment D staff report 11-12-2019 3H
E. Attachment E staff report 10-25-2022 5K
F. 0 CCS No. 9543 - Kotin CT 9543 01-2012
G. Kotin-Oaks 202405
H. Kotin-Levine 202405