Title
Recommendation to Approve Property Management Agreement with RiverRock Real Estate Group for an Additional Three (3) Years in an Amount Not to Exceed $1,209,374.19 and
Adoption of Resolution Amending the Base Reuse Budget to Increase Expenditure Appropriations by $100,000 to Establish a Liability Reserve Account for Third-Party Claims. (Community Development 29061590)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
RiverRock Real Estate Group (RiverRock) has served as the City of Alameda’s (City) property manager since 2017, managing certain real estate assets of the City including the Fleet Industrial Supply Center (FISC), Tidelands Properties, Alameda Beltline, Alameda Point, properties downtown including the Alameda Theater and adjacent businesses, Carnegie Library, Grand Pavilion and cell towers. In 2021, RiverRock played an important role in operationalizing and tracking Covid rent relief approved by the City Council for certain tenants. The existing agreement with RiverRock is expiring, and staff is recommending that the City enter into a new three-year agreement with RiverRock.
BACKGROUND
RiverRock was selected as the City’s property manager in response to a Request for Proposals (RFP) that was issued in 2016. Since January 2017, RiverRock has provided Alameda Point with exceptional service including supporting tenants during the water contamination crisis, assisting in addressing car show activities, helping address issues related to the unhoused, and implementing Council-approved Covid support programs.
DISCUSSION
To ensure continuity for the City’s tenants, staff negotiated with RiverRock for a new three-year property management agreement. While many of the terms from the existing agreement will carry forward, RiverRock requested changes in the new property management agreement to reflect a different liability allocation for third party claims between RiverRock and the City. RiverRock had expressed concern about its continued financial ability to assume all liability for its managed properties and had requested that the City assume more of the liability for its properties, particularly with respect to property conditions that existed before RiverRock became property manager. Staff researched other public agencies with property management companies and discovered that it would be reasonable for the City to assume a greater proportion of the liability than it has borne historically.
Based on this information, in addition to approval of the new management agreement, staff is recommending appropriation of $100,000 from the Base Reuse unappropriated fund balance for the initial deposit into the Liability Fund to be reserved for the purposeto address third-party claims against the City related to RiverRock-managed properties. In subsequent fiscal years, the fund will set aside $50,000 annually to build up the reserve. In addition, as properties are sold, developed or leased for longer terms, staff will evaluate the annual set aside and liability fund balance to determine need and appropriate balance levels.
ALTERNATIVES
• Approve a property management agreement with RiverRock for an additional three (3) years not to exceed $1,209,374.19 and approve a resolution designating $100,000 from the Alameda Point/Base Reuse unappropriated fund balance to be reserved in the Liability Fund.
• Solicit proposals from other property managers that are willing to assume the City’s liability and do not establish a liability reserve.
FINANCIAL IMPACT
The property management agreement and the proposed liability reserve will be funded from the Alameda Point/Base Reuse Fund (290).
These expenditures will be funded from Alameda Point/Base Reuse lease activity (29061590), which is consistent with the permitted uses under the Economic Development Conveyance Memorandum of Agreement with the United States Navy.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment. This action is not a project pursuant to Public Resources Code section 21065 and CEQA Guidelines section 15378.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Approve a three-year property management agreement with RiverRock in an amount not to exceed $1,209,374.19 and approve reallocating $100,000 from the Base Resuse Fund to the Liability Fund and be reserved for specific 3rd party liability claims.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of the contract and reserving $100,000 in the Liability Fund.
Respectfully submitted,
Lisa Maxwell, Community Development Director
By,
Nanette Mocanu, Assistant Community Development Director
Financial Impact section reviewed,
Gerry Beaudin, Assistant City Manager/Interim Finance Director
Exhibit:
1. Property Management Agreement
cc: Eric Levitt, City Manager