City Council
Report
City Council Meeting: August 27, 2024
Agenda Item: 5.J
1 of 5
To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Architecture Services Subject: Approval of Second Modification to Agreement with Olympos Construction Inc. for 2800 Airport Avenue Renovation Project
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities), of the California Environmental Quality Act (CEQA) Guidelines;
2. Authorize the City Manager to negotiate and execute a second modification to agreement #11449 (CCS) in an amount not to exceed $2,500,000 (including contingency) with Olympos Construction Inc. (Olympos) for costs associated with additional scope related to the building at 2800 Airport Ave for the Public Works Department. This will result in an amended agreement with a new total amount not to exceed $7,558,350 with future year funding contingent on Council budget approval; and
3. Authorize the Director of Public Works to issue any necessary change orders to complete additional work within contract authority.
Summary
The original 2800 Airport Avenue Renovation Project consisted of infrastructure repairs necessary to comply with current code regulations, addressing deferred maintenance issues, minimizing ongoing maintenance costs, and increasing revenue potential through the establishment of new artist studios, creative office space for small local businesses, and the new home of the Ruskin Theater. During construction, a number of unforeseen conditions were encountered within the building that required Council approval of additional funds to address properly. These repairs, however, also presented opportunities for additional artist studios in the building and the adjacent classroom trailer facilities left behind by Santa Monica College (SMC). Public Works 2 of 5
Department (PWD) and Recreation and Arts Department (RAD) staff worked collaboratively to envision a plan that expands these cultural uses of the building.
Through this work, staff identified that with further investment, the basement of the building could also be adapted to become an additional 5,000 square feet of usable artist studio spaces. The proposed additional work compliments the original project’s goals for 2800 Airport Avenue by making necessary repairs while also investing in the adaptive reuse of existing buildings for cultural uses. Staff recommends executing a second amendment to the construction contract with Olympos in the amount of $2,500,000 for a new total amount not to exceed $7,558,350.
Discussion
Originally built in 1953, the main building at 2800 Airport Avenue is a concrete cast-inplace one story above-grade building with a partial basement of approximately 5,000 sq. ft. This building is located adjacent to the other artist studio buildings at the Airport.
The original contract scope was to provide improvements to the building that had been vacated by SMC and to create artist studios and office suites. Since the award of the original contract, lease negotiations with the Ruskin Theater concluded where Ruskin will utilize one third of the main building’s first floor as their new theater and auxiliary offices.
Due to the age of the building and past renovations, the concrete basement walls and floor have many cracks and pipe penetrations that were previously unknown due to tenant occupancy. The extensive work required to waterproof the basement offers an opportunity to make the improvements necessary to convert the space into an additional 5,000 square feet of artist studios that would augment the existing inventory of the City’s arts studios’ portfolio. The proposed modified scope of work includes repair of water intrusion issues, structural modifications to create open loft-style studio spaces, installation of appropriate lighting, installation of HVAC systems and ventilation to ensure a conducive working environment, necessary upgrades to meet compliance with 3 of 5
all relevant building codes/accessibility standards, and the enhancement of the existing infrastructure to support the specific needs of artists, such as soundproofing and specialized storage.
As prompt resolution of the water intrusion issues is essential to preventing further structural damage, staff highly recommends awarding the additional scope to Olympos construction Inc. to expedite the work prior to next year’s rainy season. As Olympos is already mobilized and familiar with the project, they can ensure timely and efficient completion, protecting the building’s integrity and avoiding costly delays. Maintaining a single contractor simplifies project management and communication, reduces administrative burdens and potential conflicts, and ensures consistent quality and clear accountability. Delaying this scope of work would result in construction inside an occupied building. This would increase construction costs, noise complaints and rent credit requests from tenants.
Dividing the scope would require additional time to bid and award a new contract, which would extend mobilization timeframes for a new contractor, add 5 to 10% in remobilization costs, resulting in increased project expenses. Additionally, splitting the task could lead to integration challenges, inefficiencies, and potential rework, escalating project costs and timelines.
Continuation with Olympos avoids these unnecessary cost increases and optimizes the use of public funds. Awarding the additional scope to Olympos is the most effective approach for timely, cost efficient, and high-quality completion of the 2800 Airport Avenue Renovation Project. This strategy aligns with the City’s goals of fiscal responsibility and operational efficiency.
Environmental Review
This project is categorically exempt from CEQA pursuant to Section 15301 of the CEQA Guidelines. Section 15301 exempts Class 1 (Existing Facilities) projects from CEQA, which include the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or 4 of 5
topographical features, involving negligible or no expansion of existing or former use.
The project would renovate the existing city facilities at 2800 Airport Avenue, and therefore, it has been determined that the project would fall within the Class 1 categorical exemption. Furthermore, none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, section 15300.2 would preclude the use of this exemption.
Past Council Actions
Meeting Date Description
07/25/23
(Attachment A)
Original bid and award of agreement with Olympos Construction Inc, for construction of the 2800 Airport Avenue Renovation.
Approved amount $3,312,100 (including a $301,100 contingency). 03/19/24
(Attachment B)
First Modification to Agreement with Olympos Construction Inc. for 2800 Airport Avenue Renovation Project. Approved amount $1,746,250 (including contingency) for a new total authorization of $5,058,350.
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from the Airport Fund to increase the amount of the contract with Olympos Construction Inc. for construction services for the 2800 Airport Avenue Renovation Project.
Agreement Modification Request
Agreement
#
Current
Authorized
Amount
FY2024/25
Modified Request
Amount
Budget CIP
Account #
Total Revised
Contract
Amount
11449 $5,058,350 $2,500,000 C5704690.689000 $7,558,350
Prepared By: Alex Parry, Senior Design Manager
Approved Forwarded to Council
5 of 5
Attachments:
A. Award Construction Contract for the 2800 Airport Avenue Renovation Project (Web Link)
B. Approval of First Modification to Agreement with Olympos Construction Inc. for 2800 Airport Avenue Renovation Project (Web Link)
C. Oaks Initiative Form - Olympos Construction
D. Levine Act Disclosure - Olympos Construction
E. Executed contract for the 2800 Airport Avenue Reno