Share to Facebook Share to Twitter Bookmark and Share
File #: 2016-3405   
Type: Consent Calendar Item
Body: City Council
On agenda: 10/18/2016
Title: Recommendation to Award a Five-Year Contract for City of Alameda Property Management Services to RiverRock Real Estate Group for Management of Commercial and Residential Properties at Alameda Point, Fleet Industrial Supply Center, Tidelands, Alameda Beltline, and Other City-Owned Commercial Properties. (Base Reuse 858, 256, 216)
Attachments: 1. Exhibit 1 - Contract

Title

 

Recommendation to Award a Five-Year Contract for City of Alameda Property Management Services to RiverRock Real Estate Group for Management of Commercial and Residential Properties at Alameda Point, Fleet Industrial Supply Center, Tidelands, Alameda Beltline, and Other City-Owned Commercial Properties. (Base Reuse 858, 256, 216)

Body

 

To: Honorable Mayor and Members of the City Council

 

From: Jill Keimach, City Manager

 

Re: Award a Five-Year Contract for City of Alameda Property Management Services to RiverRock Real Estate Group for Management of Commercial and Residential Properties at Alameda Point, Fleet Industrial Supply Center, Tidelands, Alameda Beltline, and Other City-Owned Commercial Properties

 

BACKGROUND

 

 PM Realty Group has served as the City’s property manager for the past 14 years.  They were originally brought to the City by Alameda Point’s first master developer group, Alameda Point Community Partners (APCP).  When APCP left, it was decided that the City would continue to use PM Realty Group to provide property oversight and management services for Alameda Point.  PM Realty Group also started providing property management services for the former Fleet Industrial Supply Center (FISC) and other City-owned properties, such as the retail spaces in the Alameda Theater and leases for marinas. PM Realty Group’s final 3 year contract was awarded in November 2013 and will expire on January 02, 2017. 

 

In keeping with best practices for ensuring services are being provided at the best market rate, the City opted to issue a Request for Proposals (RFP) for property management services on August 11, 2016.  Proposals were due September 8, 2016.  The City received six proposals from:

 

1.                     Cushman & Wakefield Property Management

2.                     Jones Lang & LaSalle Property Management

3.                     Kennedy Wilson

4.                     Next Play Realty Company

5.                     PM Realty Group

6.                     RiverRock Real Estate Group

 

A panel of representatives of City departments and outside property management experts reviewed and scored the proposals and selected the top candidates for interviews:  Cushman & Wakefield, Kennedy Wilson, PM Realty Group and RiverRock Real Estate Group.  Based on the proposals and interviews, the panel unanimously recommended RiverRock Real Estate Group (RiverRock). As a result, staff is recommending a contract with RiverRock for City of Alameda property management services.

 

DISCUSSION

 

To solicit the maximum number of responses and most competitive price, the RFP was sent out to all the contractors from the 2013 property management selection list with the addition of those who requested to be added, was published in the Alameda Journal, and was placed on the City's website.  Nineteen participants, representing eight firms attended the non-mandatory bidder’s conference on August 25, 2016.  All of the firms had extensive experience managing commercial and industrial properties.  Four of the six applicants had base reuse experience.  While each team’s proposed commercial industrial property management approach were similar in industry standard, the approach to managing the residential properties varied.  The bid summary, including each team’s proposed approach to managing the residential properties, is summarized below:   

 

Bidder

Approach to Housing

Total Commercial/Residential Bid

Cushman & Wakefield

 Retain 3rd Party Manager

$29, 167/month

Jones Lang LaSalle

 Retain 3rd Party Manager

The greater of $25,000/mo vs 2.5% gross monthly collections

Kennedy Wilson

 In-house On Site Manager

$19,900/mo + $7,300/mo for residential property manager position

Next Play Realty

 Retain 3rd Party Manager

$23,120 + residential > of $5,000 or 6% gross monthly collection

PM Realty Group

 Retain 3rd Party Manager

$24,750/mo + residential > of $5,000 or 6% gross monthly collection

RiverRock Real Estate Group

 Retain 3rd Party Manager

$15,000/mo + residential > of $5,000 or 6% gross monthly collection

 

After careful review of the proposals submitted and the interviews, the panel unanimously scored RiverRock higher than the other applicants. 

 

RiverRock is a privately held California corporation incorporated in 2003.  It is based in Newport Beach, and the firm manages in excess of 26 million square feet of office, industrial and retail assets throughout California and Arizona.   Projects that RiverRock currently manages, that helped convince the panel of its qualifications, include The Presidio in San Francisco (which includes 150 commercial leases) and Liberty Station (formerly the Naval Training Center Point Loma) in San Diego.  Liberty Station has 125 tenants on a 435 acre mixed use environment.   The level of expertise required to successfully manage these properties convinced the panel that RiverRock is the best choice for these services.  They are familiar with former military properties with aging infrastructures, as well as managing a diverse tenant portfolio. 

 

RiverRock has experience helping clients establish business associations and implementing Covenants, Conditions and Restrictions (CC&Rs) for properties.  As tenants exercise purchase options and the development of Site A, the City will need to implement and enforce CC&Rs to ensure maintenance and standards on the property.  It will be important to have a property management partner familiar with these practices and procedures. 

 

In addition to the property management fee, the City funds the staffing, maintenance and operations of all of the property management functions.  The selected company will annually bid out the vendor services, such as landscaping, security, and property maintenance, as well as will include the cost for the additional insurance required by the City.  Staff will work closely with the recommended property management company to ensure that the expenditures remain within the current approved budget appropriation, so no modification of the existing budget will need to occur.  If any budget modifications will occur, these will be detailed as part of the new 2017-2019 budget process beginning early in 2017. Finally, RiverRock is reviewing the current residential property manager arrangement and will make a recommendation to the City on whether or not to retain Gallagher and Lindsey’s services or replacing them with another firm.

 

Staff recommends awarding the contract to RiverRock, the best qualified proposer, for a monthly flat fee of $15,000 ($180,000 annually) plus a $10,000 set up fee and a continuation of the current existing rate associated with residential property management.  A copy of the contract is attached as Exhibit 1.

 

FINANCIAL IMPACT

 

Because the residential property management company’s management fee is not a flat rate, staff is unable to recommend a “not to exceed” amount.  However, the current property management agreement has a monthly commercial fee of $24,750 or $297,750 annually.  RiverRock’s monthly commercial fee will be $15,000, or $180,000 annually, resulting in $117,750 annual savings. There is no change in the residential management fee of $5,000 per month OR 6% of gross monthly collection of residential rents, whichever is greater. Over the past three (3) years the annual average fee for residential management has been $80,000.  The funds for this project are budgeted in the following Special Revenue Funds: Base Reuse (Fund 858), FISC (Fund 256), and Tidelands (Fund 216). There is no impact to the General Fund.

 

MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE

 

This action does not affect the Alameda Municipal Code.

 

ENVIRONMENTAL REVIEW

 

N/A

 

RECOMMENDATION

 

Award a Five-Year Contract for City of Alameda Property Management Services to RiverRock Real Estate Group for Management of Commercial and Residential Properties at Alameda Point, Fleet Industrial Supply Center, Tidelands, Alameda Beltline, and Other City-owned Commercial Properties. (Base Reuse 858, FISC 256, Tidelands 216)

 

Respectfully submitted,

Debbie Potter, Community Development Director

Jennifer Ott, Base Reuse and Transportation Planning Director

 

By,

Nanette Mocanu, Assistant Community Development Director

 

Financial Impact section reviewed,

Elena Adair, Finance Director

 

Exhibit:

1.      Contract - RiverRock Real Estate Group