Title
Recommendation to Authorize the City Manager to Approve the First Amendment to the Sub-Management Agreement with Cerda Zein Real Estate, for an Additional One-Year Term, for Residential Property Management Services at Alameda Point in an Amount Not-to-Exceed $200,000. (Base Reuse and Economic Development 29061821)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Cerda Zein Real Estate (CZRE), provides residential property management services for 67 City-owned market rate residential units at Alameda Point, located between Main Street and Pan Am Way, and north of West Midway Avenue, under an existing Sub-Management Agreement (Agreement), overseen by the City’s primary property management team, RiverRock Real Estate Group (RiverRock, now Lincoln Property Company or “LPC”). The CZRE Agreement expires on April 30, 2025 (Exhibit 1).
Staff recommends that the City of Alameda (City) extend the existing agreement for one additional year with no changes to the compensation structure. Within the next year, staff will solicit bids for a multi-year sub-property management agreement for residential property management services.
BACKGROUND
LPC is currently the City’s primary commercial property manager. In addition to commercial property management, LPC issues RFPs, negotiates contracts, oversees various sub-contracts on behalf of the City, including the supervision of the residential property management provider. CZRE, the current residential property management company, has depth of knowledge of the Alameda residential rental market, and specialization in rental and housing laws, and residential property management procedures.
In early 2022, the City, with the help of LPC, issued a competitive request for proposals (RFP) for a new residential property manager. CZRE was selected through that process. On March 28, 2022, the City entered into a sub-management agreement with CZRE, supervised by LPC. The term of the agreement extended through April 30, 2024, at which point the agreement automatically renewed for one (1) year, terminating April 30, 2025.
Compensation for residential property management services is calculated based upon a percentage-fee of gross rental income, commission, and hourly rates, including:
• Property Management: 8% of gross rental income or $100 per unit, whichever is greater.
• Regular Maintenance: $65 per hour during regular business hours (9 AM to 5 PM Monday through Friday); $97.60 per hour overtime, plus materials.
• Leasing Commission Fee: 30% of one month’s rent.
• Project Management Coordination: 10% of final invoice for project management coordination beyond regular routine maintenance.
• Other reimbursements or ongoing expenses, as agreed to.
Historic annual compensation for CZRE is as follows:
• Fiscal Year 2022-23: $145,775.69
• Fiscal Year 2023-24: $166,522.43
• Fiscal Year 2024-25: As of February 28, CZRE’s fees to date are $150,152. CZRE has provided all aspects of residential property management, including the collection of $1,223,654 in residential lease revenues on the City’s behalf, the completion of 350 work orders for routine maintenance, the turnover and leasing of multiple vacant units, and the management of $396,000 in physical improvement projects beyond standard operating expenses.
DISCUSSION
At its April 15, 2025 meeting, City Council will determine the next steps to continue primary property management. The purpose of the one-year extension of the CZRE SMA is to provide time to work with the primary property management team, once confirmed by City Council, and take the appropriate public procurement steps to secure a longer term contract for residential property sub-management services.
In early 2026, before the expiration of the proposed first amendment, staff, with support of the primary property management team, will issue an RFP for residential property management services at Alameda Point. Extending the existing agreement with CZRE maintains continuity of service until such time that the RFP process is complete.
Staff recommends extending the existing agreement for one additional year, with no change to compensation and minor modifications to the scope and new standard Walk Through Inspection List (see Exhibit A-1 and Attachment A of Exhibit 1).
ALTERNATIVES
• Authorize the City Manager to approve the First Amendment to the Service Provider Agreement with CZRE for an additional one-year term.
• Direct staff to negotiate different terms and authorize the City Manager to execute an agreement that includes such terms, if acceptable to CZRE.
• Do not authorize a First Amendment to the Service Provider Agreement for residential property management services at Alameda Point. This will cause a disruption in residential property management services.
FINANCIAL IMPACT
The proposed First Amendment would be paid out of budgeted funds from the Base Reuse and Economic Development Department Alameda Point Rental - Residential for Fiscal Years 2024-5 and 2025-6 (29061821). This proposal would have no impact on the General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code, and the City’s Strategic Plan Priorities to attract and retain Alameda Point businesses. This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required. Additionally, in accordance with CEQA, this action is categorically exempt from further environmental review pursuant to CEQA Guidelines Section 15061 (Common Sense).
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Authorize the City Manager to approve the First Amendment to the Sub-Management Agreement with Cerda-Zein Real Estate (CZRE), for an additional one-year term, for residential property management services at Alameda Point in an amount not-to-exceed $200,000.
Respectfully submitted,
Abby Thorne-Lyman, Base Reuse and Economic Development Director
By,
Annie Cox, Management Analyst
Financial Impact section reviewed,
Ross McCarthy, Acting Finance Director
Exhibits:
1. Sub-Management Agreement
2. Proposed First Amendment