Title
Recommendation to Authorize the City Manager to Execute a Third Amendment to the Listing Agreement for the Sale and Lease of City-Owned Properties at Alameda Point and Other City Properties with Cushman & Wakefield California, Inc., Extending the Term of the Agreement through December 31, 2025. (Base Reuse and Economic Development 29061822)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Staff is seeking authorization from City Council for the execution of the Third Amendment to the Listing Agreement for the sale and lease of City-owned properties at Alameda Point and other City properties (Third Amendment) with the brokerage firm Cushman and Wakefield California, Inc. (C&W). The Third Amendment extends the term of the leasing agreement for an additional two years to December 31, 2025, which will provide continuity of brokerage services while staff conducts a Request for Proposals (RFP) for a new Listing Agreement for all City-owned real assets. The additional two-year term also allows C&W brokers to share their local knowledge and experience with new Base Reuse and Economic Development staff and maintains momentum of current and near-term leasing activities.
BACKGROUND
In May 2013, an RFP was released for leasing and sales of all City-controlled assets. In November 2013, after being presented with proposals from qualified brokers, City Council directed staff to negotiate a Listing Agreement for the sale and lease of City-owned properties at Alameda Point and other City properties (Agreement) with C&W.
In June 2015, the Agreement (Exhibit 1) was executed with C&W for the City’s real estate portfolio comprised of eight cell tower leases; 62 commercial, marina industrial and residential tidelands leases; two Alameda Beltline and miscellaneous City leases; two Fleet Industrial Supply Center (FISC) leases; and 156 Alameda Point leases. The Alameda Point leases represented 2.3 million square feet for both the “turnkey” leasable spaces and development opportunities with buildings needing significant capital improvements.
A First Amendment (Exhibit 2), extending the term of the agreement by three years, was executed in October 2018, and a Second Amendment (Exhibit 3), extending the term by an additional two- and one-half years, was executed in March 2021.
DISCUSSION
The proposed Third Amendment (Exhibit 4) extends the term of the agreement by an additional two years, terminating December 31, 2025. The Agreement covers listing, marketing, and sale and lease negotiations for the City’s real estate portfolio, including commercial leases, marina industrial and residential tidelands leases, cell tower leases, and other miscellaneous City leases.
The 5% commission fees in the Agreement are equivalent with typical brokerage fees. The sales and leases increase revenues for the City, help to maintain and occupy assets, and provide funding towards infrastructure improvements.
The C&W team has extensive knowledge of the unique opportunities and challenges for each property in the City’s real estate portfolio, such as those requiring extensive electrical repairs, roof repairs, seismic safety upgrades and/or those located in the historic corridor, requiring substantial investment in Secretary of the Interior-compliant renovations.
C&W is bringing critical expertise to the Alameda Point team at this juncture given the recent turnover of Base Reuse staff. Additionally, Base Reuse and Economic Development staff are currently updating departmental procedures to ensure they are in line with the City’s procurement policies. For this reason, staff have elected to bring a Third Amendment to the City Council at this time. Prior to completion of this amendment period, staff intend to complete a competitive RFP process for these services.
ALTERNATIVES
• Authorize City Manager to execute the Third Amendment, allowing continuity of brokerage services during the RFP process.
• Direct staff to issue an RFP now instead of authorizing the City Manager to execute the Third Amendment. This alternate action will stop any current leasing and sale efforts of the City-owned real estate assets until a new RFP can be drafted, awarded, and a new agreement negotiated.
FINANCIAL IMPACT
There is no fiscal impact to the General Fund (Fund 100) related to this action. However, as leases or purchase and sale agreements are executed, the brokerage fee impacts the various City funds receiving lease and sale revenue, pursuant to the terms of the original agreement (Tidelands, Alameda Point, City Revenue).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with Alameda Municipal Code. 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.
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 execute a Third Amendment to the Listing Agreement for the sale and lease of City-owned properties at Alameda Point and other City properties with C&W, extending the term of the Agreement through December 31, 2025.
Respectfully submitted,
Abigail Thorne-Lyman, Base Reuse and Economic Development Director
By,
Annie Cox, Management Analyst
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Listing Agreement
2. First Amendment
3. Second Amendment
4. Third Amendment