HomeMy WebLinkAboutC-6203 - PSA for Study of all Overnight Accommodations in the City of Newport Beach C4
PROFESSIONAL SERVICES AGREEMENT
V WITH CBRE, INC. DBA PKF CONSULTING USA FOR
STUDY OF ALL OVERNIGHT ACCOMMODATIONS IN THE CITY OF NEWPORT
BEACH
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 15th day of April, 2015 ("Effective Date'), by and between the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("City"), and CBRE, INC. DBA PKF CONSULTING USA, a Delaware limited liability
company ("Consultant'), whose address is 400 S. Hope Street, 25th Floor, Los Angeles,
California 90071, and is made with reference to the following:
RECITALS
A. 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 City.
B. City desires to engage Consultant to study, analyze and describe: overnight
accommodations within the City and Crystal Cove State Park, the range of
approved short-term vacation rentals, and impact of high-cost accommodation
additions on low-cost accommodations (`Project').
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on June 30, 2015, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services and Schedule of Billing Rates attached hereto as Exhibit A and incorporated
herein by reference ("Services" or "Work"). City may elect to delete certain Services
within the Scope of Services at its sole discretion.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this
Agreement and Consultant shall perform the Services in accordance with the schedule
included in Exhibit A. In the absence of a specific schedule, the Services shall be
performed to completion in a diligent and timely manner. The failure by Consultant to
strictly adhere to the schedule set forth in Exhibit A, if any, or perform the Services in a
diligent and timely manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand-delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not-to-
exceed basis in accordance with the provisions of this Section Exhibit A and
incorporated herein by reference. Consultant's compensation for all Work performed in
accordance with this Agreement, including all reimbursable items and subconsultant
fees, shall not exceed Thirteen Thousand Dollars and 001100 ($13,000.00), without
prior written authorization from City. No billing rate changes shall be made during the
term of this Agreement without the prior written approval of City.
4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the
specific task in the Scope of Services to which it relates, the date the Services were
performed, the number of hours spent on all Work billed on an hourly basis, and a
description of any reimbursable expenditures. City shall pay Consultant no later than
thirty (30) calendar days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses
specifically identified in Exhibit A to this Agreement or specifically approved in writing in
advance by City.
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4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the
Project, but which is not included within the Scope of Services and which the parties did
not reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit A.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Bruce Baltin to be its
Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non-key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project
any of its personnel assigned to the performance of Services upon written request of
City. Consultant warrants that it will continuously furnish the necessary personnel to
complete the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project
Manager and any other assigned staff shall be equipped with a cellular phone to
communicate with City staff. The Project Manager's cellular phone number shall be
provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Community Development
Department — Planning Division. City's Principal Planner or designee shall be the
Project Administrator and shall have the authority to act for City under this Agreement.
The Project Administrator shall represent City in all matters pertaining to the Services to
be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all
existing relevant information on file at City. City will provide all such materials in a
timely manner so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
CBRE, Inc. dba PKF Consulting USA Page 3
perform all Services in a manner commensurate with the highest professional
standards. For purposes of this Agreement, the phrase "highest professional
standards" shall mean those standards of practice recognized by one (1) or more first-
class firms performing similar work under similar circumstances.
8.2 All Services shall be performed by qualified and experienced personnel
who are not employed by City. By delivery of completed Work, Consultant certifies that
the Work conforms to the requirements of this Agreement, all applicable federal, state
and local laws, and the highest professional standard.
8.3 Consultant represents and warrants to City that it has, shall obtain, and
shall keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.4 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers and employees (collectively, the "Indemnified Parties") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner
relate (directly or indirectly) to any breach of the terms and conditions of this
Agreement, any Work performed or Services provided under this Agreement including,
without limitation, defects in workmanship or materials or Consultant's presence or
activities conducted on the Project (including the negligent, reckless, and/or willful acts,
errors and/or omissions of Consultant, its principals, officers, agents, employees,
vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly
by any of them or for whose acts they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to
require Consultant to indemnify the Indemnified Parties from any Claim arising from the
sole negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorneys' fees in any action
on or to enforce the terms of this Agreement. This indemnity shall apply to all claims
and liability regardless of whether any insurance policies are applicable. The policy
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limits do not act as a limitation upon the amount of indemnification to be provided by
Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No
civil service status or other right of employment shall accrue to Consultant or its
employees. Nothing in this Agreement shall be deemed to constitute approval for
Consultant or any of Consultant's employees or agents, to be the agents or employees
of City. Consultant shall have the responsibility for and control over the means of
performing the Work, provided that Consultant is in compliance with the terms of this
Agreement. Anything in this Agreement that may appear to give City the right to direct
Consultant as to the details of the performance of the Work or to exercise a measure of
control over Consultant shall mean only that Consultant shall follow the desires of City
with respect to the results of the Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in
order to ensure the Project proceeds in a manner consistent with City goals and
policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the
term of this Agreement or for other periods as specified in this Agreement, policies of
insurance of the type, amounts, terms and conditions described in the Insurance
Requirements attached hereto as Exhibit B, and incorporated herein by reference.
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15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall
be construed as an assignment: The sale, assignment, transfer or other disposition of
any of the issued and outstanding capital stock of Consultant, or of the interest of any
general partner or joint venturer or syndicate member or cotenant if Consultant is a
partnership or joint-venture or syndicate or co-tenancy, which shall result in changing
the control of Consultant. Control means fifty percent (50%) or more of the voting
power or twenty-five percent (25%) or more of the assets of the corporation, partnership
or joint-venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such
subcontractor other than as otherwise required by law. City is an intended beneficiary
of any Work performed by the subcontractor for purposes of establishing a duty of care
between the subcontractor and City. Except as specifically authorized herein, the
Services to be provided under this Agreement shall not be otherwise assigned,
transferred, contracted or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other
writing produced, including but not limited to, websites, blogs, social media accounts
and applications (hereinafter "Documents"), prepared or caused to be prepared by
Consultant, its officers, employees, agents and subcontractors, in the course of
implementing this Agreement, shall become the exclusive property of City, and City
shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Additionally, all material posted in
cyberspace by Consultant, its officers, employees, agents and subcontractors, in the
course of implementing this Agreement, shall become the exclusive property of City,
and City shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Consultant shall, at Consultant's
expense, provide such Documents, including all logins and password information to City
upon prior written request.
17.2 Documents, including drawings and specifications, prepared by
Consultant pursuant to this Agreement are not intended or represented to be suitable
for reuse by City or others on any other project. Any use of completed Documents for
other projects and any use of incomplete Documents without specific written
authorization from Consultant will be at City's sole risk and without liability to
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Consultant. Further, any and all liability arising out of changes made to Consultant's
deliverables under this Agreement by City or persons other than Consultant is waived
against Consultant, and City assumes full responsibility for such changes unless City
has given Consultant prior notice and has received from Consultant written consent for
such changes.
17.3 All written documents shall be transmitted to City in formats compatible
with Microsoft Office and/or viewable with Adobe Acrobat.
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept
confidential unless City expressly authorizes in writing the release of information.
19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including
costs, contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3)
years, or for any longer period required by law, from the date of final payment to
Consultant under this Agreement. All such records and invoices shall be clearly
identifiable. Consultant shall allow a representative of City to examine, audit and make
transcripts or copies of such records and invoices during regular business hours.
Consultant shall allow inspection of all Work, data, Documents, proceedings and
activities related to the Agreement for a period of three (3) years from the date of final
payment to Consultant under this Agreement.
21. WITHHOLDINGS
City may withhold payment to Consultant of any disputed sums until satisfaction
of the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall
not discontinue Work as a result of such withholding. Consultant shall have an
immediate right to appeal to the City Manager or designee with respect to such disputed
sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of
return that City earned on its investments during the time period, from the date of
withholding of any amounts found to have been improperly withheld.
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22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would
have resulted if there were not errors or omissions in the Work accomplished by
Consultant, the additional design, construction and/or restoration expense shall be
borne by Consultant. Nothing in this Section is intended to limit City's rights under the
law or any other sections of this Agreement.
23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the
Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act"), which (1) requires such persons to
disclose any financial interest that may foreseeably be materially affected by the Work
performed under this Agreement, and (2) prohibits such persons from making, or
participating in making, decisions that will foreseeably financially affect such interest.
24.2 If subject to the Act, Consultant shall conform to all requirements of the
Act. Failure to do so constitutes a material breach and is grounds for immediate
termination of this Agreement by City. Consultant shall indemnify and hold harmless
City for any and all claims for damages resulting from Consultant's violation of this
Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: James Campbell, Principal Planner
Community Development Department— Planning Division
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
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25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Bruce Baltin, Senior Vice President
CBRE, Inc. dba PKF Consulting USA
400 S. Hope Street, 25th Floor
Los Angeles, CA 90071
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in
writing, all claims for compensation under or arising out of this Agreement.
Consultant's acceptance of the final payment shall constitute a waiver of all claims for
compensation under or arising out of this Agreement except those previously made in
writing and identified by Consultant in writing as unsettled at the time of its final request
for payment. Consultant and City expressly agree that in addition to any claims filing
requirements set forth in the Agreement, Consultant shall be required to file any claim
Consultant may have against City in strict conformance with the Government Claims Act
(Government Code sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the
provisions of this Agreement at the time and in the manner required, that party shall be
deemed in default in the performance of this Agreement. If such default is not cured
within a period of two (2) calendar days, or if more than two (2) calendar days are
reasonably required to cure the default and the defaulting party fails to give adequate
assurance of due performance within two (2) calendar days after receipt of written
notice of default, specifying the nature of such default and the steps necessary to cure
such default, and thereafter diligently take steps to cure the default, the non-defaulting
party may terminate the Agreement forthwith by giving to the defaulting party written
notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for
which Consultant has not been previously paid. On the effective date of termination,
Consultant shall deliver to City all reports, Documents and other information developed
or accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are
true and correct and are hereby incorporated by reference into this Agreement.
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28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be
subject to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition contained herein, whether
of the same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged
herein. No verbal agreement or implied covenant shall be held to vary the provisions
herein.
28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall
govern this Agreement and all matters relating to it and any action brought relating to
this Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because of race, religion, color, national origin, handicap,
ancestry, sex, age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising
under this Agreement, the prevailing party shall not be entitled to attorneys' fees.
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28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S FFICE
Date: 9
By:
Aaron C. Harp (AM o�loali�
City Attorney
ATTEST:
Date: 7.21
By: CW I v�
Leilani I. Brown
City Clerk
�EWpo
CITY OF NEWPORT BEACH,
a California municipal corporation
Date: is -/,�) -/ S
Kimberly Brandt, AIC
Community Development Director
CONSULTANT: CBRE, Inc. dba PKF
Consulting USA, a Delaware limited
liability compl�y
Date: 7/x-1
M,Y'
..
ltin
Senior Vice President
Date: 7 A 3 / I �g-
By:
aA""Ih-
Johonderson
Controller
[END OF SIGNATURES]
Attachments: Exhibit A - Scope of Services and Schedule of Billing Rates
Exhibit B - Insurance Requirements
CBRE, Inc. dba PKF Consulting USA Page 12
EXHIBIT A
SCOPE OF SERVICES AND
SCHEDULE OF BILLING RATES
CBRE, Inc. dba PKF Consulting USA Page A-1
Sent via email:jcampbell@newportbeachca.gov PKF
March 26, 2015 CONSULTING
USA
A CBRE COMPANY
Mr. Jim Campbell
Principal Planner
Newport Beach Community Development Department
100 Civic Center Drive
Newport Beach, California 92660
Dear Mr. Campbell:
In accordance with our discussions, we are pleased to submit this proposal to provide consulting
services relative to low cost accommodations in the City of Newport Beach, California.
PKF CONSULTING USA
As a point of background, we would like to provide you with a brief overview of our Firm. PKF
Consulting USA ("PKF USA") is part of CBRE, the World's largest real estate services
company. PKF USA is authorized to provide the services outlined in this proposal through its
affiliates. PKF USA is a national firm of management consultants, appraisers, real estate brokers
and industry specialists who provide a full range of services to the hospitality and tourism
industries. Headquartered in San Francisco, the Firm has offices in Boston, New York,
Philadelphia, Portland, ME, Atlanta, Miami, Washington, D.C., Houston, Dallas, Indianapolis,
Los Angeles, Seattle, Sacramento, and Bozeman with nearly 100 professionals and support staff.
Our Firm is comprised of two integrated divisions which provide consulting and research
services to the hospitality industry.
Consulting
Our consulting group provides advisory services and industry expertise to help our private and
public sector clients in planning, developing, managing, financing, problem-solving, improving
operations, and valuing hotels and other hospitality assets, as well as destinations. Our
engagements range from market and financial feasibility studies to investment structuring, and
from appraisals to asset management.
Our consulting group is constantly providing clients both large and small with the most
constructive and valuable advice in the industry, performing feasibility and market studies,
acquisition due diligence and valuations involving hotels, resorts, restaurants, golf courses, and a
variety of mixed-use developments and other hospitality products. We have the distinct
advantage of being the only hospitality consulting firm with its own,proprietary database of U.S.
hotel financial statistics.
Research
PKF Hospitality Research owns the database for Trends® in the Hotel Industry, the statistical
review of U.S. hotel operations which first appeared in 1935 and has been published every year
since. PKF's professionals use the Trends® database to assist their clients in making informed
PKF Consulting USA,a Subsidiary of CBRE,Inc-1400 S.Hope Street,2e Floor I Los Angeles,CA 90071
TEL: 213-680-09001 FAX 213-613-30051 w .Pkfc.com
Mr.Jim Campbell
Community Development Department,Newport Beach, California ii
decisions. In addition, the Trends® data is used to produce custom financial reports for clients
that enable them to benchmark hotel revenues, expenses, and profits.
Beginning in 2007, PKF unveiled its powerful Hotel Horizons®, an economics-based hotel
forecasting model that projects five years of supply, demand, occupancy, ADR, and RevPAR for
the U.S. lodging industry. Hotel Horizons reports are published on a quarterly basis for 50
markets and six national chain-scales.
With a long-standing tradition of tracking and forecasting the lodging industry, our Research
Group has the technical capacity to conduct custom research, the analytical skills to interpret the
data, and the access necessary to gather confidential performance information from the industry.
PKF Consulting USA Services include:
• Asset Management and Management Company Selection
■ Real Estate Appraisals and Business Valuation
• Market and Financial Feasibility Studies
• Litigation Support and Expert Testimony
• Acquisition Due Diligence
• Operational Studies
• Tourism and Recreational Studies
■ Resort and Recreation Services
• Conference, Convention, and Public Assembly Facilities
• Financial Benchmarking
• Econometric Forecasting
• Custom Research
Local Market Knowledge
Our Firm has conducted numerous appraisals and market demand studies for existing and
proposed hotels in the local market area. Given the historical role of PKF Consulting in the
hospitality and real estate industries, and our knowledge of the local market, we are of the
opinion that there is no firm that can provide the services available through us. More background
and information on our Firm can be obtained from our web site at www.pkfc.com.
SCOPE OF SERVICES
We understand that you would like us to provide the following services:
1. Assist in the study of overnight accommodations within the City of Newport Beach
and Crystal Cove State Park by analyzing and describing all overnight accom-
modations including hotels,motels, campsites, and recreational vehicle spaces;
2. Analyze and describe the range and usage of approved short-term vacation rentals
available in the City of Newport Beach; and
3. Analyze the impact of high-cost accommodation additions on low-cost accom-
modations in a market.
Mr.Jim Campbell
Community Development Department,Newport Beach, California ii
REPORT
All reports and communications to you will be designed for your internal use in facilitating the
study of low cost accommodations within Newport Beach.
PROFESSIONAL FEES
Our professional fees for such services will be based on the hourly billing rates of the personnel
performing the assignment and the hours expended. We estimate that they will not exceed
$13,000. As is customary in assignments of this nature, we request a retainer of$6,000 at the
start of the assignment.
In addition to our professional fees,we will be reimbursed for out-of-pocket expenses incurred in
connection with the assignment. The balance of our professional fees and expenses will be billed
and payable on a progress basis.
The current hourly billing rates of our personnel are as follows:
Per Hour
Senior Vice President $400 - $450
Vice President 250 - 350
Senior Consultant 220 - 250
Consultant 150 - 200
STUDY TIMETABLE
Based on our present scheduling, we could commence the assignment immediately upon
receiving your authorization for the assignment and anticipate having our report to you by
April 30, 2015.
ACCEPTANCE AND APPROVAL
If the foregoing correctly states your understanding of the work to be performed, and the
arrangements are satisfactory, please indicate your approval of the foregoing by signing a copy
of this letter where indicated and return it to us, together with the requested retainer, as our
authorization to commence the assignment.
Sincerely,
PKF Consulting USA
a Subsidiary of CBRE, Inc.
By Bruce Baltin
Senior Vice President
STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
This report is made with the following assumptions and limiting conditions:
Economic and Social Trends - The consultant assumes no responsibility for economic, physical or demographic
factors which may affect or alter the opinions in this report if said economic,physical or demographic factors were not present as
of the date of the letter of transmittal accompanying this report_ The consultant is not obligated to predict future political,
economic or social trends.
Information Furnished by Others - In preparing this report, the consultant was required to rely on information
furnished by other individuals or found in previously existing records and/or documents. Unless otherwise indicated, such
information is presumed to be reliable. However, no warranty, either express or implied, is given by the consultant for the
accuracy of such information and the consultant assumes no responsibility for information relied upon later found to have been
inaccurate. The consultant reserves the right to make such adjustments to the analyses,opinions and conclusions set forth in this
report as may be required by consideration of additional data or more reliable data that may become available.
Hidden Conditions - The consultant assumes no responsibility for hidden or unapparent conditions of the property,
subsoil, ground water or structures that render the subject property more or less valuable. No responsibility is assumed for
arranging for engineering, geologic or environmental studies that may be required to discover such hidden or unapparent
conditions.
Hazardous Materials-The consultant has not been provided any information regarding the presence of any material or
substance on or in any portion of the subject property or improvements thereon,which material or substance possesses or may
possess toxic, hazardous and/or other harmful and/or dangerous characteristics. Unless otherwise stated in the report, the
consultant did not become aware of the presence of any such material or substance during the consultant's inspection of the
subject property. However,the consultant is not qualified to investigate or test for the presence of such materials or substances.
The presence of such materials or substances may adversely affect the value of the subject property. The value estimated in this
report is predicated on the assumption that no such material or substance is present on or in the subject property or in such
proximity thereto that it would cause a loss in value. The consultant assumes no responsibility for the presence of any such
substance or material on or in the subject property, nor for any expertise or engineering knowledge required to discover the
presence of such substance or material. Unless otherwise stated,this report assumes the subject property is in compliance with
all federal,state and local environmental laws,regulations and rules.
Zoning and Land Use - Unless otherwise stated, the projections were formulated assuming the hotel to be in full
compliance with all applicable zoning and land use regulations and restrictions.
Licenses and Permits - Unless otherwise stated, the property is assumed to have all required licenses, permits,
certificates,consents or other legislative and/or administrative authority from any local,state or national government or private
entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is
based.
Engineering Survey-No engineering survey has been made by the consultant. Except as specifically stated,data relative
to size and area of the subject property was taken from sources considered reliable and no encroachment of the subject property is
considered to exist.
Subsurface Rights - No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the
property is subject to surface entry for the exploration or removal of such materials,except as is expressly stated.
Maps, Plats and Exhibits-Maps,plats and exhibits included in this report are for illustration only to serve as an aid in
visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose,
nor should they be removed from,reproduced or used apart from the report.
Legal Matters - No opinion is intended to be expressed for matters which require legal expertise or specialized
investigation or knowledge beyond that customarily employed by real estate consultants.
STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
(continued)
Testimony in Court-Testimony or attendance in court or at any other hearing is not required by reason of rendering this
appraisal,unless such arrangements are made a reasonable time in advance of said hearing. Further,unless otherwise indicated,
separate arrangements shall be made concerning compensation for the consultant's time to prepare for and attend any such
hearing.
Archeolo¢ical .Siflnificance-No investigation has been made by the consultant and no information has been provided
to the consultant regarding potential archeological significance of the subject property or any portion thereof This report
assumes no portion of the subject property has archeological significance.
Compliance with the American Disabilities Act - The Americans with Disabilities Act ("ADA") became
effective January 26, 1992. We assumed that the property will be in direct compliance with the various detailed requirements of
the ADA.
Definitions and Assumptions-The definitions and assumptions upon which our analyses,opinions and conclusions
are based are set forth in appropriate sections of this report and are to be part of these general assumptions as if included here in
their entirety.
Distribution and Liability to Third Parties-The party for whom this report was prepared may distribute copies
of this appraisal report only in its entirety to such third parties as may be selected by the party for whom this report was prepared;
however,portions of this report shall not be given to third parties without our written consent Liability to third parties will not
be accepted.
Use in Offering Materials-This report,including all cash flow forecasts,market surveys and related data,conclusions,
exhibits and supporting documentation,may not be reproduced or references made to the report or to PKF Consulting in any sale
offering, prospectus, public or private placement memorandum, proxy statement or other document ("Offering Material") in
connection with a merger, liquidation or other corporate transaction unless PKF Consulting has approved in writing the text of
any such reference or reproduction prior to the distribution and filing thereof.
EXHIBIT B
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury
by disease in accordance with the laws of the State of California, Section
3700 of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its officers, agents,
employees and volunteers.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The
policy shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract
(including the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non-owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
CBRE, Inc. dba PKF Consulting USA Page B-1
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,000,000) per claim and two million dollars
($2,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement
and Consultant agrees to maintain continuous coverage through a period
no less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation
against City, its elected or appointed officers, agents, officials, employees
and volunteers or shall specifically allow Consultant or others providing
insurance evidence in compliance with these requirements to waive their
right of recovery prior to a loss. Consultant hereby waives its own right of
recovery against City, and shall require similar written express waivers
from each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but
not including professional liability, shall provide or be endorsed to provide
that City and its officers, officials, employees, and agents shall be included
as insureds under such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a
primary basis and shall not require contribution from any insurance or self-
insurance maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days notice of cancellation (except for nonpayment for which ten
(10) calendar days notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. Consultant shall provide certificates of insurance
to City as evidence of the insurance coverage required herein, along with
a waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance
certificates and endorsement must be approved by City's Risk Manager
prior to commencement of performance. Current certification of insurance
shall be kept on file with City at all times during the term of this
Agreement. City reserves the right to require complete, certified copies of
all required insurance policies, at any time.
CBRE, Inc. dba PKF Consulting USA Page B-2
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
D. Requirements not Limiting. Requirements of specific coverage features
or limits contained in this Section are not intended as a limitation on
coverage, limits or other requirements, or a waiver of any coverage
normally provided by any insurance. Specific reference to a given
coverage feature is for purposes of clarification only as it pertains to a
given issue and is not intended by any party or insured to be all inclusive,
or to the exclusion of other coverage, or a waiver of any type. If the
Consultant maintains higher limits than the minimums shown above, the
City requires and shall be entitled to coverage for higher limits maintained
by the Consultant. Any available insurance proceeds in excess of the
specified minimum limits of insurance and coverage shall be available to
the City.
E. Self-insured Retentions. Any self-insured retentions must be declared to
and approved by City. City reserves the right to require that self-insured
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
F. City Remedies for Non-Compliance. If Consultant or any subconsultant
fails to provide and maintain insurance as required herein, then City shall
have the right but not the obligation, to purchase such insurance, to
terminate this Agreement, or to suspend Consultant's right to proceed until
proper evidence of insurance is provided. Any amounts paid by City shall,
at City's sole option, be deducted from amounts payable to Consultant or
reimbursed by Consultant upon demand.
G. Timely Notice of Claims. Contractor shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from
Contractor's performance under this Contract, and that involve or may
involve coverage under any of the required liability policies. City assumes
no obligation or liability by such notice, but has the right (but not the duty)
to monitor the handling of any such claim or claims if they are likely to
involve City.
H. Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
CBRE, Inc. dba PKF Consulting USA Page B-3
judgment may be necessary for its proper protection and prosecution of
the Work.
CBRE, Inc. dba PKF Consulting USA Page B-4
CERTIFICATE OF INSURANCE
CHECKLIST
City of Newport Beach
This checklist is comprised of requirements as outlined by the City of Newport Beach.
Date Received: 6/10/15 Dept./Contact Received From: Terresa
Date Completed: 7/1/15 Sent to: Terresa By: Chris/Alicia
Company/Person required to have certificate: PKF Consulting USA
Type of contract: All Others
I. GENERAL LIABILITY
EFFECTIVE/EXPIRATION DATE: 3/01/15 to 3/01/16
A. INSURANCE COMPANY: Zurich American Insurance Cc
B. AM BEST RATING(A- :VII or greater): A+;XV
C. ADMITTED Company(Must be California Admitted):
Is Company admitted in California? ® Yes ❑ No
D. LIMITS(Must be$1M or greater): What is limit provided? 2,000,000/2,000,000
E. ADDITIONAL INSURED ENDORSEMENT—please attach ®Yes ❑ No
F. PRODUCTS AND COMPLETED OPERATIONS(Must
include): Is it included? (completed Operations status does
not apply to Waste Haulers or Recreation) ® Yes ❑ No
G. ADDITIONAL INSURED FOR PRODUCTS AND
COMPLETED OPERATIONS ENDORSEMENT(completed
Operations status does not apply to Waste Haulers) ® Yes ❑ No
H. ADDITIONAL INSURED WORDING TO INCLUDE (The City
its officers, officials, employees and volunteers): Is it
included? ® Yes ❑ No
!. PRIMARY&NON-CONTRIBUTORY WORDING(Must be
included): Is it included? ® Yes ❑ No
J. CAUTION! (Confirm that loss or liability of the named insured
is not limited solely by their negligence) Does endorsement
include"solely by negligence"wording? ❑Yes ® No
K. ELECTED SCMAF COVERAGE(RECREATION ONLY): ® N/A ❑Yes ❑ No
L. NOTICE OF CANCELLATION: ❑ N/A ® Yes ❑ No
II. AUTOMOBILE LIABILITY
EFFECTIVE/EXPIRATION DATE: 3101/15 to 3/01/16
A. INSURANCE COMPANY: Zurich American Insurance Co
B. AM BEST RATING(A- :VII or greater) A+;XV
C. ADMITTED COMPANY(Must be California Admitted):
Is Company admitted in California? ® Yes ❑ No
D. LIMITS- If Employees (Must be$1 M min. BI & PD and $500,000
UM, $2M min for Waste Haulers): What is limits provided? 2,000,000
E LIMITS Waiver of Auto Insurance/Proof of coverage(if individual)
(What is limits provided?) N/A
F. PRIMARY&NON-CONTRIBUTORY WORDING (For Waste
Haulers only): ® N/A ❑ Yes ❑ No
G. HIRED AND NON-OWNED AUTO ONLY: ❑ N/A ❑ Yes ® No
H. NOTICE OF CANCELLATION: ❑ N/A ® Yes ❑ No
III. WORKERS' COMPENSATION
EFFECTIVE/EXPIRATION DATE: 3/1/15 to 3/1/16
A. INSURANCE COMPANY: American Zurich Ins Co
B. AM BEST RATING(A- :VII or greater): A+;XV
C. ADMITTED Company(Must be California Admitted): ® Yes ❑ No
D. WORKERS' COMPENSATION LIMIT: Statutory ® Yes ❑ No
E. EMPLOYERS' LIABILITY LIMIT(Must be $1 M or greater) 1,000,000
F. WAIVER OF SUBROGATION (To include): Is it included? ® Yes ❑ No
G. SIGNED WORKERS' COMPENSATION EXEMPTION FORM: ® N/A ❑ Yes ❑ No
H. NOTICE OF CANCELLATION: ❑ N/A ® Yes ❑ No
ADDITIONAL COVERAGE'S THAT MAYBE REQUIRED
IV. PROFESSIONAL LIABILITY 12/1/14-12/1/15
❑ N/A ® Yes ❑ No
V POLLUTION LIABILITY
® N/A ❑ Yes ❑ No
V BUILDERS RISK
® N/A ❑ Yes ❑ No
HAVE ALL ABOVE REQUIREMENTS BEEN MET? ® Yes ❑ No
IF NO,WHICH ITEMS NEED TO BE COMPLETED?
Approved:
(2 -
7/1/15
Agent of Alliant Insurance Services Date
Broker of record for the City of Newport Beach
RISK MANAGEMENT APPROVAL REQUIRED (Non-admitted carrier rated less than
Self Insured Retention or Deductible greater than$ ) ❑ N/A ❑ Yes ❑ No
Reason for Risk Management approval/exception/waiver:
Approved:
Risk Management Date
* Subject to the terms of the contract.