Title
Recommendation to Authorize the City Manager to Execute an Agreement with Keyser Marston Associates, Inc. for Economic and Financial Consulting Services for an Initial Term of One Year for a Total Not-to-Exceed Cost of $200,000, with the Option of Four One-Year Extensions at $150,000 Per Year, in an Amount Not-to-Exceed $800,000. (Base Reuse and Economic Development 29061822)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Staff recommends the City Council authorize the City Manager to enter into an agreement with Keyser Marston Associates, Inc. (KMA) for specialized economic and financial consulting services related to development projects, property dispositions, and lease negotiations and other real estate and land economic priorities at Alameda Point and other City of Alameda (City) initiatives. The agreement is for an initial term of one (1) year for a budget not-to-exceed $200,000, with the option for four (4) one-year extensions with an annual budget of $150,000 per year, for a total contract amount not-to-exceed $800,000 over five (5) years.
BACKGROUND
The Base Reuse and Economic Development Department oversees complex real estate and development projects requiring specialized economic and financial analysis. On-call consultant service agreements are used for services requiring expertise that City staff does not have and/or to supplement City staff during peak work demand.
In December 2019, the City issued a Request for Qualification (RFQ) for on-call consulting services for economic and financial consulting. As a result of that process, City Council approved an agreement with KMA to provide these on-call services based on their expertise and proven ability to deliver successful project outcomes.
KMA's prior and ongoing work includes financial feasibility assessments for Alameda Point, fiscal impact analyses, and structuring public-private partnership agreements. Its specialized expertise, institutional knowledge of Alameda’s development priorities, and integrated advisory role during real estate negotiations make it uniquely qualified to continue performing this work.
While KMA's current contract remains in effect until March 2025, the allocated budget for the agreement has been fully expended, necessitating a new agreement to ensure continuity of services.
DISCUSSION
KMA is a leading real estate advisory firm with extensive expertise in public/private partnerships, financial feasibility assessments, and disposition strategies for publicly-owned sites. Its specialized knowledge in supporting Alameda’s development projects make it uniquely suited to continue assisting with the City’s complex real estate initiatives.
Under the proposed agreement, KMA will provide the following services:
1. Conduct financial analyses for ongoing and new projects such as Site A, RESHAP, West Midway, and the Enterprise District. This includes preparing real estate pro forma analyses, fiscal impact assessments, market research, and third-party reviews, as well as supporting the developer solicitation process for portions of the Main Street Neighborhood and the Adaptive Reuse Area at Alameda Point.
2. Assist in formulating and evaluating business terms for negotiations with developers and other stakeholders.
3. Assess the financial strength of prospective tenants, buyers, or development partners for property sales, leases, and Development and Distribution Agreement (DDA) obligations.
4. Provide technical support for the West Midway project’s community facilities district formation/annexation and exploration and implementation of other public financing options for Alameda Point.
5. Prepare supporting materials such as memorandums, summaries, exhibits, and presentations to communicate financial analyses and proposed business terms.
6. Participate in regular communications with City staff, developers, and stakeholders, including team meetings and City Council presentations.
These services are critical to advancing the City’s strategic initiatives at Alameda Point and beyond, ensuring informed decision-making and effective implementation. The agreement ensures continuity in service delivery and leverages KMA’s institutional knowledge, avoiding delays associated with onboarding a new provider.
ALTERNATIVES
• Direct the City Manager to execute the Service Provider Agreement with Keyser Marston Associates, Inc. (KMA) for one year at $200,000, with four one-year extensions at $150,000 per year, for a total not-to-exceed amount of $800,000 over five years.
• Direct the City Manager to negotiate and execute the Service Provider Agreement with KMA with alternative terms, pending KMA’s acceptance of those terms.
• Do not direct the City Manager to execute the Service Provider Agreement with KMA and provide staff with alternative direction regarding the procurement of economic and financial consulting services. This action will likely result in the expiration of KMA's current contract and a gap in these critical services.
FINANCIAL IMPACT
The total cost of the KMA contract is $800,000 over a five-year term. This includes $200,000 for the initial year and $150,000 for each of the four one-year extensions. Funding for the first year is available in the Base Reuse Fund (Fund 290) for Fiscal Year 2025 with future years requiring appropriation by City Council through the budget approval process. This agreement will have no financial impact on the General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the City’s Strategic Plan priorities to support economic development and ensure sound financial management. This action does not affect the Alameda Municipal Code. This action is subject to the Levine Act.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined by the California Environmental Quality Act (CEQA) Guidelines Section 15378 and is therefore not subject to further CEQA review.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with this action.
RECOMMENDATION
Authorize the City Manager to execute an agreement with Keyser Marston Associates, Inc. for economic and financial consulting services for an initial term of one year in an amount not to exceed $200,000, with four one-year options to extend for a Total Possible Duration of Five Years and for a total not-to-exceed amount of $800,000.
Respectfully submitted,
Abby Thorne-Lyman, Base Reuse and Economic Development Director
By,
Nicole Franklin, Base Reuse Manager
Financial Impact Section Reviewed By,
Margaret O'Brien, Finance Director
Exhibit:
1. Service Provider Agreement