HomeMy WebLinkAboutC-5194 - PSA for City Hall Site Market Feasibility StudyPROFESSIONAL SERVICES AGREEMENT
Q WITH PKF CONSULTING USA, LLC FOR
J� CITY HALL SITE MARKET FEASIBILITY STUDY
I\ THIS AGREEMENT FOR PROFESSIONAL SERVICES ( "Agreement') is made
and entered into as of this Y� day of July, 2012 ( "Effective Date ") by and between the
CITY OF NEWPORT BEACH, a California Municipal Corporation ( "City "), and PKF
CONSULTING USA, LLC, a Delaware limited liability company ( "Consultant'), whose
address is 865 S. Figueroa Street, Suite 3500, Los Angeles, CA 90017 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 wants to determine the demand for and market feasibility of a proposed hotel
and desires to engage Consultant to provide a study of potential market demand;
prepare statements of estimated annual operating revenues; and provide general
development consulting services relating to a proposed hotel located on the
current City Hall site ('Project').
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. The principal member of Consultant for purposes of Project shall be Bruce Baltin,
Senior Vice President.
E. 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 February 28, 2013 unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
City and Consultant acknowledge that the above Recitals are true and correct
and are hereby incorporated by reference into this Agreement. Consultant shall
diligently perform all the services described in the Scope of Services attached hereto as
Exhibit A and incorporated herein by reference ( "Services" or "Work "). The 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.
3.1.1 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) days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.2 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator (as defined in Section 6 below) 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.
3.3 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
fax, 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 and the Schedule of
Billing Rates or Progress Payments Schedule attached hereto as Exhibit B 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 Twenty Three Thousand Dollars and 00/100 ($23,000.00)
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) 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 B to this Agreement, or specifically approved in writing in
advance by City.
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
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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 B.
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 the City.
6. ADMINISTRATION
This Agreement will be administered by the Community Development
Department. Kimberly Brandt, Community Development Department Director or
her designee, shall be the Project Administrator and shall have the authority to act for
City under this Agreement. The Project Administrator or her designee 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
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.
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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 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, attorney's
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 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 attorney's 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
limits do not act as a limitation upon the amount of indemnification to be provided by the
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
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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 Contractor 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 and /or his /her
duly authorized designee 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 C, and incorporated herein by reference.
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 cotenancy, which shall result in changing the
control of Consultant. Control means fifty percent (50 %) or more of the voting power, or
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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. The City is an intended
beneficiary of any Work performed by the subcontractor for purposes of establishing a
duty of care between the subcontractor and the 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 (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. Consultant shall, at Consultant's
expense, provide such Documents 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
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.
18. COMPUTER DELIVERABLES
All written documents shall be transmitted to City in formats compatible with
Microsoft Office and /or viewable with Adobe Acrobat.
19. 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.
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20. INTELLECTUAL PROPERTY INDEMNITY
The 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.
21. 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.
22. UNITHHOLDINGS
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 his /her 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.
f' 21 N: 101 IoZ63 it1 I1,- yN7.6'i
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.
24. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the
Project.
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25. CONFLICTS OF INTEREST
25.1 The 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.
25.2 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.
26. NOTICES
26.1 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. All notices, demands, requests or
approvals from Consultant to City shall be addressed to City at:
Attn: Kimberly Brandt, Director
Community Development Department
City of Newport Beach
3300 Newport Boulevard
PO Box 1768
Newport Beach, CA 92658
Phone: (949) 644 -3226
26.2 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Bruce Baltin, Senior Vice President
PKF CONSULTING USA, LLC
865 S. Figueroa Street, Suite 3500
Los Angeles, CA 90017
Phone: (213) 680 -0900
27. 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. The Consultant and the City expressly agree that in addition to any claims
filing requirements set forth in the Agreement, the Consultant shall be required to file
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any claim the Consultant may have against the City in strict conformance with the Tort
Claims Act (Government Code sections 900 et seq.).
28. TERMINATION
28.1 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.
28.2 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.
29. STANDARD PROVISIONS
29.1 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.
29.2 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.
29.3 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.
29.4 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.
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29.5 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.
29.6 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.
29.7 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.
29.8 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.
29.9 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.
29.10 No Attorney's Fees. In the event of any dispute or legal action arising
under this Agreement, the prevailing party shall not be entitled to attorney's fees.
29.11 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 ATT RN Y'S OFFICE
%
Date: 11ill%
ftr,efn C. Harp
City Attorney
ATTEST:
Date:
By:
CITY OF NEWPORT BEACH,
A California municipal corporation
Date:
By: a -�"I AejWA
Kimberly Brandt, I P
Community Deve pment Department
Director
CONSULTANT: PKF CONSULTING
USA, LLC, a Delaware limited liability
company
Date:
truce tialtin
Senior Vice President
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
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PKF CONSULTING USA, LLC Page 11
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE A California municipal corporation
Date: Date:
By: By:
Aaron C. Harp Kimberly Brandt, AICP
City Attorney Community Development Department
Director
ATTEST: CONSULTANT: PKF CONSULTING
Date: USA, LLC, a Del are limited liability
company
Date: 3 J
By: By: �----�
Leilani I. Brown Brud6 Baltin
City Clerk Senior Vice President
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
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PKF CONSULTING USA, LLC Page 11
EXHIBIT A
SCOPE OF SERVICES
METHODOLOGY
The study will be conducted in phases and the work program will be concerned with the
determination of current and potential future lodging demand in the market area, the assessment
of existing and potential future supply and the share of the market that could reasonably be
attained by the proposed project, and the analyses described in this scope of work. Our work plan
for the study will be as set forth in this scope of services.
ANALYSIS OF THE SITE LOCATION
This part of the study is designed to evaluate the site in terms of its opportunities and constraints
for development. Some of the factors to be examined include:
❑ Access
0 Visibility
❑ Ambiance
❑ Present utilization
❑ Topography
❑ Relationship to demand generators
❑ Relationship to area amenities
❑ Advantages /disadvantages of the site versus the major competitors
We will also consider a potential site at Lido Marina Village.
AREA REVIEW
We will gather and analyze relevant economic data regarding the market area to determine
whether the overall economic environment in the area appears to be suitable for hotel
development. We will examine correlations between key economic factors and the demand for
lodging and will utilize any available forecasts of these indicators in our evaluation of potential
future demand.
We will perform primary market research in the site area, consisting of interviews with key
demand generators, inspection and evaluation of competition and discussions with persons
familiar with development patterns and the local hotel market. Among those with whom we will
conduct such interviews are:
❑ Managers of tourist attractions
❑ Owners and managers of potentially competitive lodging facilities
❑ Government officials in zoning, development and transportation
❑ Major employers in the area
❑ Convention and Visitors Bureau representatives
On the basis of the foregoing research, we will prepare estimates of future growth in
demand for, and the supply of lodging facilities in the market area.
We will analyze historical economic growth in the area and the characteristics of each of the
principal segments of demand for hotels. Then, using the information gathered in our research,
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we will estimate growth in demand for each market segment and project demand for each of the
next five years, expressed in terms of room nights.
FACILITIES RECOMMENDATIONS
As part of our analysis, we will review plans provided by the City for the proposed project and
analyze alternative configurations as directed by you. We will then make additional
recommendations as to:
❑ Type, and mix of guest rooms
0 Restaurant and lounge facilities, if appropriate
❑ Banquet and meeting space requirements
❑ Other facilities and amenities
These recommendations are intended to provide you with the basis for a design program for the
proposed hotel.
MARKET SHARE ESTIMATES
The focus here will be on estimated demand for the subject hotel under each scenario. Upon
completion of the estimate of market area supply and demand for the future, we will estimate the
share of the market that the proposed facilities should reasonably be expected to capture for the
hotel's first five years of operation.
Based upon an analysis of the sources of demand available to the subject property and its
estimated competitive position, we will estimate the average daily room rate that could
potentially be achieved in a representative year, in current value dollars, and over the first five
years of operation of the subject hotel.
STATEMENTS OF ESTIMATED ANNUAL OPERATING RESULTS
Based upon the analysis of market demand, we will estimate occupancy, average daily room rate,
revenues and operating expenses for the subject hotel under each of the four scenarios for its first
five years of operation. These estimates will result in a "bottom line" of income before fixed
charges of interest, depreciation, amortization and income taxes.
Based upon discussions with your staff and outside consultants, we will also address the specific
study tasks outlined in this scope of services.
Since the estimated operating results will be based on estimates and assumptions that are subject
to uncertainty and variation, we will not represent them as results that will actually be achieved.
REPORT
We will prepare our conclusions in a draft report for discussion purposes. Following review, we
will prepare a final report.
LIMITATIONS OF THE STUDY
Our final report will be subject to the statement of Assumptions and Limiting Conditions.
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STUDY TIMETABLE
We will commence the assignment within one to two weeks of receiving your authorization to
proceed. We anticipate providing you with a draft of our full report within four to five weeks of
commencement.
SPECIFIC CONDITIONS AND STUDY TASKS
Review Lido Marina Village Concept plan and associated studies
2. Review Neighborhood Revitalization Committee ( "NRC ") economic study by Keyser
Marsten & Associates dated March 29, 2012.
3. Meet with Lido Marina Village stake holders to obtain community perspective and opinions
4. Site Configuration Analysis.
a. Existing configuration.
i. With Fire Station.
b. Benefits of Lot Line adjustment.
i. With Fire Station.
ii. Without Fire Station.
5. Financial Feasibility Analysis of a Boutique Hotel on 4.2 Acre City Hall Site under current
market conditions and normal market conditions. Consider uses surrounding the hotel in
determining the amount of restaurant and function space and amenities in the hotel
including:.
a. 75 room hotel.
b. 75 room hotel condominium.
c. 100 room hotel.
d. 150 room hotel.
6. Type of structure needed for each hotel type to fit on site including:
a. Parking; open, above ground structure or underground.
b. Height.
c. Square footage.
d. Building footprint.
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e. Public open space per Lido Marina Village Concept Plan
f Building type /visual character
7. Analyze potential for Lido Marina Village to support one or two hotels. One on the Lido
Manna Village site and one on the City Hall site.
a. Consider level of difficulty of each site.
b. Consider site location of each site.
c. Determine if market can support two hotels and if so how many rooms.
d. Consider the stimulus value to overall area of a subsidy through
i. Land rent reduction.
ii. Transient Occupancy Tax rebate.
8. Financial Feasibility Analysis of mixed use on 4.2 Acre City Hall Site.
a. Analyze Keyser Marsten & Associates report dated January 18, 2012 and analysis to
apply conclusions to 99 luxury residential rental units,
b. Incorporate analysis re supportable amount of limited commercial square footage
c. Option of public parking structure on ground level with residential parking and residential
units on top of public parking level.
d. Public parking structure option is intended to provide support to any commercial
entitlement on site or in Lido Marina Village area and not necessarily beach access.
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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 Professional Services Agreement. 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.
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STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
(continued)
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.
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.
Archeological Significance - 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.
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 die 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.
Limits to Liability - PKF Consulting cannot be held liable in any cause of action resulting in litigation for any
dollar amount which exceeds the total fees collected from this individual engagement.
PKF CONSULTING USA, LLC Page A -6
EXHIBIT B
SCHEDULE OF BILLING RATES
Our professional fees for the assignment will be based on our current hourly
billing rates the hours required and shall not exceed $22,000.
Per Hour
$400-$450
Senior Vice President
$250-350
Vice President
$220-250
Associates
$150-200
Consultants
$400-$450
In addition to our fees, we will be reimbursed for any out of pocket expenses
incurred in performance of the assignment such as travel of our representatives while in
the field, long distance telephone, computer costs and photocopying. We estimate that
our expenses will not exceed $1,000.
If, at any time during the course of the study we form an initial opinion that there
is insufficient demand for the proposed facilities, we will suspend the assignment at that
point and discuss our findings with you. If you desire that we terminate the assignment
at this point, we will write you a brief letter summarizing our findings and charge you
only for that time actually incurred to date at our regular per diem rates, plus expenses.
Our professional fees and expenses will be billed and payable on a progress
basis.
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EXHIBIT C
1. INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1.1 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.
1.2 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.
1.3 Coverage Requirements.
1.3.1 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.
1.3.1.1 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.
1.3.2 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, products - completed operations, personal and advertising injury, and liability
assumed under an insured contract (including the tort liability of another assumed in a
business contract) with no endorsement or modification limiting the scope of coverage
for liability assumed under a contract.
1.3.3 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 the 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.
PKF CONSULTING USA, LLC Page C -1
1.3.4 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 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.
1.4 Other Insurance Requirements. The policies are to contain, or be
endorsed to contain, the following provisions:
1.4.1 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.
1.4.2 Additional Insured Status. All liability policies including general
liability, excess liability, pollution liability, and automobile liability, 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.
1.4.3 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.
1.4.4 Notice of Cancellation. All policies shall provide City with thirty (30)
days notice of cancellation (except for nonpayment for which ten (10) days notice is
required) or nonrenewal of coverage for each required coverage.
1.5 Additional Agreements Between the Parties. The parties hereby agree to
the following:
1.5.1 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.
1.5.2 City's Right to Revise Requirements. The City reserves the right at
any time during the term of the Agreement to change the amounts and types of
insurance required by giving the Consultant sixty (60) days advance written notice of
PKF CONSULTING USA, LLC Page C -2
such change. If such change results in substantial additional cost to the Consultant, the
City and Consultant may renegotiate Consultant's compensation.
1.5.3 Enforcement of Agreement Provisions. Consultant acknowledges
and agrees that any actual or alleged failure on the part of the City to inform Consultant
of non - compliance with any requirement imposes no additional obligations on the City
nor does it waive any rights hereunder.
1.5.4 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.
1.5.5 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.
1.5.6 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.
1.5.7 Timely Notice of Claims. Consultant shall give City prompt and
timely notice of claims made or suits instituted that arise out of or result from
Consultant's performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies.
1.5.8 Consultant's Insurance. Consultant shall also procure and
maintain, at its own cost and expense, any additional kinds of insurance, which in its
own judgment may be necessary for its proper protection and prosecution of the Work.
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