City Council
Report
City Council Meeting: October 25, 2022
Agenda Item: 5.K
1 of 4
To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of Fifth Modification to Allan D. Kotin & Associates Professional Services Agreement for Real Estate Advisory Services
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and execute a fifth modification to Professional Services Agreement (PSA) #9543 (CCS) with Allan D. Kotin & Associates for continuation of real estate advisory services related to the Santa Monica Pier and other City projects. This modification will extend the term by one year. This will result in a 12-year amended agreement with no increase to the current authorized amount of $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 at the beach and in the downtown area. As a best practice, the City retains advisory services specializing in economic and real estate analysis to inform and assist the City with valuations and negotiations. Allan D. Kotin & Associates is a consultant used by the City for such services. The City uses the firm’s consulting services to evaluate the feasibility and business terms associated with leases and licenses of several City-owned properties such as Pacific Park, the Civic Auditorium, beach concessions and other public-private partnerships. To ensure continuity, staff recommends modifying the existing professional services agreement with Allan D. Kotin & Associates (Kotin & Associates), who are supporting the City in current negotiations.
In some instances, requiring outside consultant services, the City has been able to be reimbursed for its consultant fees. Recently, the City has been in lease negotiations with 2 of 4
the operators of Pacific Park and is being reimbursed for Kotin & Associates’ consultant fees through the reimbursement agreement with SM Park Holdings, LLC d/b/a Pacific Park.
Discussion
For complex projects, the City, through its Economic Development Division, engages highly specialized real estate advisory services. One of the consultants that the City currently contracts with, Kotin & Associates, was selected following a Request for Qualifications (RFQ) process in 2011 and Council approved on January 24, 2012 (Attachment A). Due to the complexity and duration of significant real estate transactions which can take many years to evaluate and negotiate, Kotin & Associates’ contract has been modified to extend the original term and increase the original budget as summarized in the Past Council Actions table below. Lease negotiations between the Santa Monica Pier tenant, Pacific Park, and the City have been ongoing; the complex lease negotiations have been conducted with the support of Kotin & Associates. To ensure continuity, staff recommends extending the term by one-year. The costs associated with the Pacific Park lease negotiations are being reimbursed through a cost reimbursement agreement with the subtenant operators of Pacific Park, the amusement park on the Santa Monica Pier. The Economic Development Division is in the process of finalizing a RFQ and expects to have a list of qualified consultants within Fiscal Year 2022-23.
Vendor/Consultant Selection
The services of Kotin & Associates were procured through a RFQ process in 2011. This firm was selected based on its qualifications and extensive financial and development advisory experience consulting for public agencies throughout the state. The City will be issuing a new RFQ for professional services in Fiscal Year 2022-23 to help identify additional professional service providers to assist the City with real estate needs.
However, due to potential ongoing requirements associated with Pacific Park, staff wanted to ensure Kotin was still under contract to provide continuity with this project.
Due to the COVID-19 pandemic, the shutdown of the Pier, and staff workload, the 3 of 4
negotiations with Pacific Park and the solicitation for additional consultants were delayed.
Past Council Actions
Meeting Date Description
01/24/12 (attachment A) Original award of PSA # 9543 (CCS) authorizing Allan D. Kotin & Associates to provide real estate economic and financial advisory services 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. At its June 23, 2015 meeting, Council authorized a second modification to the extend the term through December 31, 2019 and increase the contract by $130,000 for a total amount not-toexceed $200,000. 06/27/17 (attachment B) Council authorized a third modification to increase contract authority by $100,000 for a total amount not to exceed $300,000 11/12/19 (attachment C) Council authorized a fourth modification to increase contract authority by $40,000 for a total amount not to exceed $340,000 and to extend the term by three one-year options.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action. Staff will return to Council if specific budget actions are required in the future. Funding for the agreement has been budgeted for the 2022-23 fiscal year and the City is reimbursed for the consultant costs associated with the Pacific Park lease negotiations by SM Park Holdings, LLC. The remaining contract authority is $60,330 and is sufficient to complete the project.
Prepared By: Erika Cavicante, Senior Development Analyst Approved Forwarded to Council
Attachments:
A. 2012. 01.24 Kotin Council Report
4 of 4
B. 2017. 06.27 Kotin Council Report
C. 2019. 11-12 Kotin Council Report
D. Kotin OAKS INITIATIVE 2021-2022