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Agreement No. 11419 (CCS)
PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (“Agreement”), entered into as of _______________ (“Execution Date”), by and between the CITY OF SANTA MONICA (“City”), a California municipal corporation, and CORPORATE REALTY GROUP, INC. (“CRG”), a California corporation, 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 represents that it is qualified to do business in the State of California. CRG further represents it has the background, knowledge, experience and expertise to provide the professional services set forth in this Agreement.
C. On or about^ September 18, 2018, the City and CRG entered into Agreement No. 10713 (“Original Agreement”) for CRG to provide commercial real estate brokerage and consulting services. On or about June 20, 2023, the City and CRG amended the Original Agreement to extend the agreement term and to increase the compensation authorized under the Original Agreement to be paid to CRG.
Agreement No. 10713 is set to expire by its own terms on December 31, 2024.
D. On March 10, 2023, in compliance with its own competitive bidding requirements, the City issued a Request for Proposals (“RFP”) for commercial real estate brokerage and related consulting services and sought bids from companies qualified to provide these services to the City. On April 14, 2023, GRG submitted a proposal (“Proposal”) in response to the City’s RFP. On June 27, 2023, the Santa Monica City Council accepted CRG’s Proposal and awarded the contract to CRG.
E. The City and CRG now desire to enter into a new agreement for CRG to provide commercial real estate brokerage and consulting services to the City as provided in the Proposal and upon the terms and conditions set forth below. This Agreement, upon its execution, shall supersede and replace the Original Agreement (CRG Contract No. 10713) and the First Modification to that Agreement.
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NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows:
TERMS AND CONDITIONS
1. Term. The initial term (“Initial Term”) of this Agreement shall commence on the Execution Date and shall run for a period of three (3) years, unless terminated earlier in accordance with Section 14 or extended as provided herein.
Notwithstanding, the City shall have at its sole discretion the option to extend the initial term of this Agreement for two additional one-year periods (each an “Option Term”), to be exercised, if at all, consecutively and prior to the expiration of the Initial Term or preceding Option Term. The City shall send CRG written notice of its intent to extend the term of the Agreement no less than 30 days prior to the expiration of the Initial Term or preceding Option Term.
2. CRG Services. CRG shall perform and provide to City all of the services (“Services”) described in Exhibit A (Scope of Services). CRG shall complete the Services in accordance with Exhibit B (Budget).
3. City Responsibilities. The City agrees to:
3.1 Make available to CRG any documents or information reasonably required for CRG’s performance of the Services.
3.2 Designate a representative authorized to act on behalf of City.
3.3 Promptly review all documents submitted by CRG and provide a response within a reasonably prompt amount of time.
4. Compensation. The City shall compensate CRG for the Services performed by it and provided to City in accordance with the commission and consulting fee schedules set forth in Exhibit B. The total amount of compensation paid to CRG under this Agreement shall at no time exceed $1,164,803.
5. Invoices. CRG shall invoice the City for the Services in accordance with Exhibit B and the City shall remit payment for any undisputed amount within 30 days of receipt of an invoice.
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/Airport
City of Santa Monica
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3223 Donald Douglas Loop South
Santa Monica, California 90401
Attention: Stelios Makrides
Re: Agreement No. 11419
with a copy to:
Santa Monica City Attorney’s Office
1685 Main Street, Third Floor
Santa Monica, California 90401
Attention: Ivan Campbell, Deputy City Attorney
Re: Agreement No. 11419
6.2 All notices, demands, requests or approvals to CRG:
Craig Zund
Corporate Realty Group
3223-B Donald Douglas Loop South
Santa Monica, CA 90405
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 Agreement. 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 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).
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10. Defense and Indemnification.
10.1 Indemnification. CRG agrees to defend, indemnify, protect, and hold harmless the City, its agents, officers, boards and commissions, and employees 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 acts, 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 may conduct its own defense and seek reimbursement for reasonable costs of defense from CRG.
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 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 or transferee acquires no right or interest by reason of such attempted assignment 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 of CRG, if a partnership or joint venture exists, which results in changing the control of CRG, will be construed as an 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.
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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 (5) 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 (10) days written notice of termination to CRG. If either party terminates the Agreement, and if CRG is not in 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, subconsultant costs, or other direct costs. CRG must keep the records, DocuSign Envelope ID: 0D473DE0-0EE1-4B90-9AF5-0AB5B751EC25 - 6 -
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 inspect all work, data, documents, and materials 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 DocuSign Envelope ID: 0D473DE0-0EE1-4B90-9AF5-0AB5B751EC25 - 7 -
subconsultant (or between any subconsultant and others) must contain the following provision:
This agreement is consistent with all terms and conditions of the Agreement No. 11419 (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.
25. Execution in Counterparts. This Agreement may be executed in counterparts with the same effect as if both parties hereto had executed the same document. All counterparts shall be construed together and shall constitute a single agreement.
Any signature to this Agreement transmitted electronically through DocuSign or PDF shall be deemed an original signature and be binding upon the parties hereto (it being agreed that such electronic signature shall have the same force and effect as an original signature).
26. Exhibits. The following exhibits are incorporated by reference into this Agreement as though fully set forth herein.
Exhibit A Scope of Services
Exhibit B Budget
Exhibit C Insurance Requirements
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In witness whereof, the parties have caused this Agreement to be executed the day and year first above written.
ATTEST:
______________________________
DENISE ANDERSON-WARREN
City Clerk
APPROVED AS TO FORM:
______________________________
LANE DILG
City Attorney
CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________
David White
City Manager
CRG Corporation
#VENDOR
By:
________________________________
DocuSign Envelope ID: 0D473DE0-0EE1-4B90-9AF5-0AB5B751EC25 City Attorney
9/19/2023
DOUGLAS SLOAN
Principal
Craig Zund
CZ
9/19/2023
9/26/2023
David White
City Manager Denise Anderson-Warren
9/27/2023
City Clerk
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.
City owned facilities relevant to this Agreement are located at the Santa Monica Airport. The goal of the parties is for the service 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. This is a nonexclusive agreement.
Commercial real estate broker services include marketing commercial office space, restaurants, creative space, educational use space, and artist studios. CRG will market, advertise and show space to prospective tenants and assist City staff in negotiating single tenancy leased properties at Santa Monica Airport. Services include coordinating document collection and the execution of all attendant documents, project management expertise from the initial lease negotiation process through lease execution of new and renewal leases and for simple and complex transactions facilitating the completion of the leasing transactions. Leaseholds include both land and improved properties.
CRG will 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.
DocuSign Envelope ID: 0D473DE0-0EE1-4B90-9AF5-0AB5B751EC25 Additionally, at the City’s discretion CRG will provide the following consulting services at a cost to be negotiated by the parties but shall not exceed the fee schedule provided for in Exhibit B:
Determine comparable leasing rates and valuation using financial analytics to present competitive market rates;
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;
Provide specific recommendations while achieving the City’s goals.
DocuSign Envelope ID: 0D473DE0-0EE1-4B90-9AF5-0AB5B751EC25 Exhibit B
Budget
Compensation. The City shall compensate CRG for its performance of the professional services set forth in Exhibit A in an amount not to exceed $738,586 for the Initial Term of the Agreement. If the City exercises its option to extend the Agreement an additional year, then the compensation paid to CRG during the first Option Term shall not exceed $122,615. If the City chooses to further extend the Agreement, then the compensation paid to CRG during the second Option Term shall not exceed $303,602. The total amount of compensation paid to CRG under this Agreement shall at no time exceed $1,164,803.
Any commissions paid to CRG under this Agreement shall be based on the following terms:
CRG Commission Fee Schedule
Reimbursements Percentage or Flat Fee With Tenant’s Representative Outside Broker
New Term Leases Years 1-5: 3% of aggregate
lease value
Years 6-10: 1.5% of aggregate
lease value
Years 1-5: An additional 3% of
aggregate lease value
Years 6-10: An additional 2%
of aggregate lease value
New Month-toMonth Leases Equal to one month’s rent. An additional 6% or the value of 1 month’s rent, whichever is
greater.
Term Lease
Renewals
Years 1-5: 2% of aggregate
lease value Years 6-10: 1% of
aggregate lease value
Years 1-5: Additional 2%-4%
Years 6-10: Additional 1%-2%
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Expansions
Years 1-5: 2% of aggregate
lease value
Years 6-10: 1% of aggregate
lease value
Years 1-5: An additional 2%-
4% of aggregate lease value.
Years 6-10: An additional 1%-
2% of aggregate lease value.
Consulting Service Fees
CRG shall provide to City five (5) hours of consulting services at no cost for projects that require no outside expertise. CRG shall provide the City with a proposal and scope of services for consulting projects that exceed five hours. CRG consulting fees shall be based on the following schedule:
CRG Hourly Consulting Fee Schedule
Personnel Hourly Rates Percentage of Scope of
Work
Craig Zund/Principal $225.00 Per Hour 90%
Associates $150.00 Per Hour 10%
Project Manager $125.00 Per Hour On Demand
DocuSign Envelope ID: 0D473DE0-0EE1-4B90-9AF5-0AB5B751EC25 Exhibit C
Professional Services Agreement Insurance Requirements – Template 1 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 CGL 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.
2. 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.
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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 CGL 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. CGL 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.
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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. c. 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
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.
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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.
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