13-0716_CBRE, INC._Agenda Report_D9cue
City of San Juan Capistrano
ReportAgenda
Honorable Mayor and Mepb,xect
Karen P. Brust, City anaPrepared by: Cathy alce
July 16, 2013
ity Council
Services Manageq
7/16/2013
SUBJECT: Consideration of Amendment to the Personal Services Agreement for
Provision of Real Estate Broker Services (CBRE, Inc.)
RECOMMENDATION:
By motion, approve the Second Amendment to the Personal Services Agreement for
Provision of Real Estate Broker Services with CBRE, Inc.
EXECUTIVE SUMMARY:
The City currently has an Agreement (Attachment 1) in force with CBRE to conduct the
sale of City owned property Lot 217 (Parcel No.'s 650-592-01 and 650-592-02)
consisting of approximately 1.41 acres and 3.34 acres respectively, located along the
west side of Rancho Viejo Road, between Rancho Viejo Road and Interstate 5 and
northwest of the intersection of Rancho Viejo Road and Golf Club Drive. The term of the
Agreement expired on June 30, 2013. Due to the potential length of the escrow, an
Amendment to extend the term a period of six months to December 31, 2013, is
recommended (Attachment 2).
DISCUSSION/ANALYSIS:
On August 21, 2012, the City Council approved a Personal Services Agreement with
CBRE, Inc. for brokerage services for a period of six months. Due to the length of the
escrow, an Amendment was approved on February 5, 2013, to extend the term of the
current agreement for four additional months. The contract termination date was June
30, 2013. Due to the length of time required for this escrow, it has become necessary to
amend the Agreement a period of six months to reflect a termination date of December
31, 2013.
FISCAL IMPACT:
Not applicable.
City Council Agenda Report
July 16, 2013
Page 2 of 2
ENVIRONMENTAL IMPACT:
Not applicable.
PRIOR CITY COUNCIL REVIEW:
City Council Meeting — August 21, 2012: City Council approved a Personal
Services Agreement with CBRE, Inc. for Real Estate Broker Services
City Council Meeting — February 5, 2013: City Council approved a First
Amendment to the Personal Services Agreement with CBRE, Inc.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
Not applicable.
NOTIFICATION:
Jim Penner, CBRE, Inc,
ATTACHMENT(S):
Attachment 1 — Personal Services Agreement with First Amendment
Attachment 2 — Draft Second Amendment to Personal Services Agreement
PERSONAL SERVICES AGREEMENT
THIS AGREEMENT is made, entered into, and shall become effective this 21St
day of August, 2012, by and between the City of San Juan Capistrano (hereinafter
referred to as the "City") and CBRE, Inc. (hereinafter referred to as the "Consultant").
RECITALS:
WHEREAS, City desires to retain the services of Consultant regarding the City's
proposal to retain Real Estate Broker Services; and
WHEREAS, Consultant is qualified by virtue of experience, training, education
and expertise to accomplish such services.
NOW, THEREFORE, City and Consultant mutually agree as follows:
Section 1. Scope of Work.
The scope of work to be performed by CBRE, Inc. as exclusive broker shall
consist of those tasks as set forth in Consultant's proposal, Exhibit "A," attached and
incorporated herein by reference. To the extent that there are any conflicts between the
provisions described in Exhibit "A" and those provisions contained within this
Agreement, the provisions in this Agreement shall control.
Section 2. Term.
This Agreement shall commence on the effective date and shall terminate, and
all services required hereunder shall be completed, no later than February 21, 2013,
subject to Section 15.
Section 3. Compensation.
3.1 Amount.
Total compensation for the services hereunder shall not exceed as set
forth in Exhibit "A."
3.2 Method of Payment.
Subject to Section 3.1, Fees shall be paid from sale proceeds, as set forth
in Exhibit "A."
Section 4. Independent Contractor.
It is agreed that Consultant shall act and be an independent contractor and not
an agent or employee of the City, and shall obtain no rights to any benefits which
1
ATTACHMENT 1
accrue to Agency's employees.
Section 5. Limitations Upon Subcontracting and Assignment.
The experience, knowledge, capability and reputation of Consultant, its principals
and employees were a substantial inducement for the City to enter into this Agreement.
Consultant shall not contract with any other entity to perform the services required
without written approval of the City. This Agreement may not be assigned, voluntarily or
by operation of law, without the prior written approval of the City. If Consultant is
permitted to subcontract any part of this Agreement by City, Consultant shall be
responsible to the City for the acts and omissions of its subcontractor as it is for persons
directly employed. Nothing contained in this Agreement shall create any contractual
relationships between any subcontractor and City. All persons engaged in the work will
be considered employees of Consultant. City will deal directly with and will make all
payments to Consultant.
Section 6. Changes to Scope of Work.
For extra work not part of this Agreement, a written authorization from City is
required prior to Consultant undertaking any extra work. In the event of a change in the
Scope of Work provided for in the contract documents as requested by the City, the
Parties hereto shall execute an addendum to this Agreement setting forth with
particularity all terms of the new agreement, including but not limited to any additional
Consultant's fees.
Section 7. Familiarity with Work and/or Construction Site.
By executing this Agreement, Consultant warrants that: (1) it has investigated
the work to be performed; (2) if applicable, it has investigated the work site(s), and is
aware of all conditions there; and (3) it understands the facilities, difficulties and
restrictions of the work to be performed under this Agreement. Should Consultant
discover any latent or unknown conditions materially differing from those inherent in the
work or as represented by City, it shall immediately inform the City of this and shall not
proceed with further work under this Agreement until written instructions are received
from the City.
Section 8. Time of Essence.
Time is of the essence in the performance of this Agreement.
Section 9. Compliance with Law.
Consultant shall comply with all applicable laws, ordinances, codes and
regulations of federal, state and local government.
2
Section 10. Conflicts of Interest.
Consultant covenants that it presently has no interest and shall not acquire any
interest, direct or indirect, which would conflict in any manner or degree with the
performance of the services contemplated by this Agreement. No person having such
interest shall be employed by or associated with Consultant.
Section 11. Reserved.
Section 12. Reserved.
Section 13. Indemnity,.
To the fullest extent permitted by law, Consultant agrees to protect, defend, and
hold harmless the City and its elective and appointive boards, officers, agents, and
employees from any and all claims, liabilities, expenses, or damages of any nature,
including attorneys' fees, for injury or death of any person, or damages of any nature,
including interference with use of property, arising out of, or in any way connected with
the gross negligence, recklessness and/or intentional wrongful conduct of Consultant,
Consultant's agents, officers, employees, subcontractors, or independent contractors
hired by Consultant in the performance of the Agreement. The only exception to
Consultant's responsibility to protect, defend, and hold harmless the City, is due to the
gross negligence, recklessness and/or wrongful conduct of the City, or any of its
elective or appointive boards, officers, agents, or employees.
This hold harmless agreement shall apply to all liability regardless of whether any
insurance policies are applicable. The policy limits do not act as a limitation upon the
amount of indemnification to be provided by Consultant.
Section 14. Insurance.
On or before beginning any of the services or work called for by any term of this
Agreement, Consultant, at its own cost and expense, shall carry, maintain for the
duration of the agreement, and provide proof thereof that is acceptable to the City, the
insurance specified below with insurers and under forms of insurance satisfactory in all
respects to the City. Consultant shall not allow any subcontractor to commence work
on any subcontract until all insurance required of the Consultant has also been obtained
for the subcontractor. Insurance required herein shall be provided by Insurers in good
standing with the State of California and having a minimum Best's Guide Rating of A -
Class VII or better.
14.1 Comprehensive General Liability.
Throughout the term of this Agreement, Consultant shall maintain in full
force and effect Comprehensive General Liability coverage in an amount not less than
one million dollars per occurrence ($1,000,000.00), combined single limit coverage for
3
risks associated with the work contemplated by this agreement. If a Commercial
General Liability Insurance form or other form with a general aggregate limit is used,
either the general aggregate limit shall apply separately to the work to be performed
under this agreement or the general aggregate limit shall be at least twice the required
occurrence limit.
14.2 Comprehensive Automobile Liability.
Throughout the term of this Agreement, Consultant shall maintain in full
force and effect Comprehensive Automobile Liability coverage, including owned, hired
and non -owned vehicles in an amount not less than one million dollars per occurrence
($1,000,000.00).
14.3 Workers' Compensation.
If Consultant intends to employ employees to perform services under this
Agreement, Consultant shall obtain and maintain, during the term of this Agreement,
Workers' Compensation Employer's Liability Insurance in the statutory amount as
required by state law.
14.4 Proof of Insurance Requirements/Endorsement.
Prior to beginning any work under this Agreement, Consultant shall submit
the insurance certificates, including the deductible or self -retention amount, and an
additional insured endorsement naming City, its officers, employees, agents, and
volunteers as additional insured as respects each of the following: Liability arising out of
activities performed by or on behalf of Consultant, including the insured's general
supervision of Consultant; products and completed operations of Consultant; premises
owned, occupied or used by Consultant; or automobiles owned, leased, hired, or
borrowed by Consultant. The coverage shall contain no special limitations on the scope
of protection afforded City, its officers, employees, agents, or volunteers.
14.5 Reserved
14.6 Notice of Cancellation/Termination of Insurance.
The above policy/policies shall not terminate, nor shall they be cancelled,
nor the coverages reduced, until after thirty (30) days' written notice is given to City,
except that ten (10) days' notice shall be given if there is a cancellation due to failure to
pay a premium.
14.7 Terms of Compensation.
Consultant shall not receive any compensation until all insurance
provisions have been satisfied.
4
14.8 Notice to Proceed.
Consultant shall not proceed with any work under this Agreement until the
City has issued a written "Notice to Proceed" verifying that Consultant has complied
with all insurance requirements of this Agreement.
Section 15. Termination.
City shall have the right to terminate this Agreement without cause by giving
fifteen (15) days' advance written notice of termination to Consultant.
In addition, this Agreement may be terminated by any party for cause by
providing ten (10) days' notice to the other party of a material breach of contract. If the
other party does not cure the breach of contract, then the agreement may be terminated
subsequent to the ten (10) day cure period.
Section 16. Notice.
All notices shall be personally delivered or mailed to the below listed addresses,
or to such other addresses as may be designated by written notice. These addresses
shall be used for delivery of service of process:
To City: City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn.: City Manager
To Consultant: Jeff Moore
CBRE, Inc.
3501 Jamboree Road, Suite 100
Newport Beach, CA 92660
Section 17. Attorneys' Fees,
If any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs
and necessary disbursements in addition to any other relief to which he may be entitled.
Section 18. Dispute Resolution.
In the event of a dispute arising between the parties regarding performance or
interpretation of this Agreement, the dispute shall be resolved by binding arbitration
under the auspices of the Judicial Arbitration and Mediation Service ("JAMS").
5
Section 19. Entire Agreement.
This Agreement constitutes the entire understanding and agreement between the
parties and supersedes all previous negotiations between them pertaining to the subject
matter thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
ATTEST -
Maria Morris, City Clerk
APPROVED AS TO FORM:
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m� vat Cit Attorne
Y Y
CITY OF �S�N JUAN CAPI TRANO
Sy:`
Larry Krairn&, Mayor
F
CONSULTANT
By:
A
CBRE I PROPOSAL TO CITY OF SAN JUAN CAPISTRANO FOR REAL ESTATE BROKER SERVICES
Qualifications References, and
Compensation
City of Reno
In June of 2011, we presented a strategic plan to the City Council in Reno, Nevada involving 1 million
square feet of properties. The plan was immediately adopted by the Council after 7 months of data
collection and analysis by the CBRE team led by Mr. McSha, The City is currently beginning the
implementation process. The strategic plan addressed lor-own of city services, space utilization, facilities
management processes and costs, cost allocation, leasing processes, internal organizational structure and
reporting processes. Currently, CBRE is representing the City in multiple disposition assignments that were
recommended in the Strategic Plan — most recently, CBRE marketed a unique asset to 1800 developers,
investors, and end users across the Western LISA. As a result, 35 developers attended the pre-bid
conference and we are anticipating a number of feasible, competitive proposals in August of 2012.
Reference:
John Flansberg - Director of Public Works - P.O. Box 1900 - Reno, NV 89505 - 775-334-2211
PUBLIC SECTOR EXPERIENCE
CBRE is the national leader in representing public sector entities. CBRE's Public Institutions and Education
Solutions group (PIES) is a national division of the company with that works to formulate and implement
real estate strategies on behalf of federal, state, county, city and educational institutions. PIES is comprised
of professionals with specialized government expertise who deliver the full spectrum of our real estate
services. We have been nationally recognized for our creative solutions that satisfy the many stakeholders
with interests in public -sector real estate. Our specialty practice areas include alternative financing for
public projects, strategic planning and portfolio optimization and public-private partnerships.
TEAM'S LOCAL DEVELOPMENT COMMUNITY CONNECTIVITY:
CBRE's proposed Team has a strong relationship with the following developers in the region through prior
experience on projects.
• Panattoni
•
Kilr^
• Crown Realty
•
Milan Properties
• WCB - �...._
EOP
., .�
• Hillman Properties
•Hutton
Associates
• UBS•
Mass Mutual
• Hudson Capital.
.Arden..
_
• LBA
'
._.
Abbey Co
M w ....,.
• RREEF
Maguire Development
_
• Catellus
•
CBREI
• Davis Develooment I • ING
• Birtcher Development _
• Transpacific Development Company
• Spieker Prover lies
•Greenlaw Development Corporation
• Cornerstona Real Estate Advisers
• TA Associates
• Lincoln Properties
• LNR
Leg•_a X_artners ._._.-,.--. -.
• Birtcher Anderson Realtv
COMPENSATION - DISPOSITION OF CITY PROPERTY BY LEASE AND/OR SALE
CBRE proposes the following fee structure for disposition services. $0 to 5 million in total sales price:
Broker's commission shall be 3% of the gross sales price, and increased by 2% (for a total of 5%) in the
event the Buyer is represented by a broker other than the listing team, which includes other CBRE brokers.
$5 million or more in total sales price: Broker's commission shall be 2% of the gross sales price, and
increased by 2% (4% in total) in the event the Buyer is represented by a broker other than the listing team,
which includes other CBRE brokers. Fees shall be paid by third -parties with whom the City may conclude a
transaction, or funded through the transaction (sale proceeds), so as to eliminate the City's out-of-pocket
costs.
11 CBRE
CORE I PROPOSAL TO CITY OF SAN JUAN CAPISIRANO FOR REAL ESTATE BROKER SERVICES
Qualifications,
Compensation
City of Reno
References, and
In June of 2011, we presented a strategic plan to the City Council in Reno, Nevada involving 1 million
square feet of properties. The plan was immediately adopted by the Council after 7 months of data
collection and analysis by the CBRE team led by Mr. McShea. The City is currently beginning the
implementation process. The strategic plan addressed location of city services, space utilization, facilities
management processes and costs, cost allocation, leasing processes, internal organizational structure and
reporting processes. Currently, CBRE is representing the City in multiple disposition assignments that were
recommended in the Strategic Plan — most recently, CBRE marketed a unique asset to 1800 developers,
investors, and end users across the Western USA. As a result, 35 developers attended the pre-bid
conference and we are anticipating a number of feasible, competitive proposals in August of 2012.
Reference:
John Flansberg - Director of Public Works - P.O. Box 1900 - Reno, NV 89505 - 775-334-2211
PUBLIC SECTOR EXPERIENCE
CBRE is the national leader in representing public sector entities. CBRE's Public Institutions and Education
Solutions group (PIES) is a national division of the company with that works to formulate and implement
real estate strategies on behalf of federal, state, county, city and educational institutions. PIES is comprised
of professionals with specialized government expertise who deliver the full spectrum of our real estate
services, We have been nationally recognized for our creative solutions that satisfy the many stakeholders
with interests in public -sector real estate. Our specialty practice areas include alternative financing for
public projects, strategic planning and portfolio optimization and public-private partnerships.
TEAM'S LOCAL DEVELOPMENT COMMUNITY CONNECTIVITY:
CBRE's proposed Team has a strong relationship with the following developers in the region through prior
experience on projects.
• Ponattoni
Kilro�r
• Crown Rea
•
m
Milan Properties„
• WCB
.
µFOP
• Hillman Properties
•
Hutton Associates
• UBS
•
Mass Mutual
• Hudson Co
•
Arden
• LBA _ _
v„
Abbey Co
_
• RREEF_
•
.. _.._.. _ ...._
MaOuire Development
• Catellus
CBREI M
• Davis Development I • ING
• Birtcher Development
• Transpacific Development Comp
• Seeker ,Properties
_Greenlaw Development Corpora
• Cornerstone Real Estate Advisers
• TA Associates
• Lincoln Properties
• LNR
• Lucy Partners W� M
• Birtcher Anderson Rea
COMPENSATION - DISPOSITION OF CITY PROPERTY BY LEASE AND/OR SALE
CBRE proposes the following fee structure for disposition services. $0 to 5 million in total sales price:
Broker's commission shall be 3% of the gross sales price, and increased by 2% (for a total of 5%) in the
event the Buyer is represented by a broker other than the listing team, which includes other CBRE brokers.
$5 million or more in total sales price: Broker's commission shall be 2% of the gross sales price, and
increased by 2% (4% in total) in the event the Buyer is represented by a broker other than the listing team,
which includes other CBRE brokers. Fees shall be paid by third -parties with whom the City may conclude a
transaction, or funded through the transaction (sale proceeds), so as to eliminate the City's out-of-pocket
costs.
CBRE
FIRST AMENDMENT TO
PERSONAL, SERVICES AGREEMENT
THIS FIRST AMENDMENT TO THE PERSONAL SERVICES AGREEMENT between
the CITY OF .SAN JUAN CAPISTRANO ("City") and CBRE, Inc. ("Consultant") is made and
entered into, to be effective the 5`" day of February, 2013, as follows:
RECITALS
WHEREAS, the City and Consultant have entered into that Personal Services
Agreement approved August 21, 2012, for Deal Estate Braker services (the "°Agreement"), and
WHEREAS, the City and Consultant desire to amend the terms of the Agreement as
provided hereunder,
NOW, THEREFORE, in consideration of the promises and mutual covenants contained
therein, City and Consultant agree to amend the Agreement as follows:
Sects Term.
This agreement shall commence on the effective date and shall terminate, and all
services required hereunder shall be completed, no later than June 30, 2013, subject to
Section 15.
All other provisions of the Agreement not amended hereunder shall remain in full force
and effect.
Cl OF SAN JUAN CAPISTRANO
yr I
o n Tayl%r, Ma� ltor,
ATTEST:
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4 y.
Maria Morrisl City Clerk
APPROVED TO FORM:
BY:,
Hans a tl§Ten"`ityAttcrme—w.-.
CONSULTANT
By:
540028.8
SECOND AMENDMENT TO
PERSONAL SERVICES AGREEMENT
THIS SECOND AMENDMENT TO THE PERSONAL SERVICES AGREEMENT
between the CITY OF SAN JUAN CAPISTRANO ("City") and CBRE, Inc. ("Consultant") is
made and entered into, to be effective the 1st day of July, 2013, as follows:
RECITALS
WHEREAS, the City and Consultant have entered into that Personal Services
Agreement approved August 21, 2012, for Real Estate Broker services (the "Agreement");
and
WHEREAS, the City and Consultant desire to amend the terms of the Agreement as
provided hereunder.
AMENDMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants contained
therein, City and Consultant agree to amend the Agreement as follows:
Section 2. Term.
This agreement shall commence on the effective date and shall terminate, and all
services required hereunder shall be completed, no later than December 31, 2013, subject to
Section 15.
All other provisions of the Agreement not amended hereunder shall remain in full force
and effect.
ATTEST:
-51
Maria Morris, City Clerk
APPR VE AS TO FORM:
B
Hans Ka
n L en, City Attorney
CITY OF SAN JUAN CAPISTRANO
John Taylor, Mayor
CONSULTANT
By: --
-1-
ATTACHMENT 2