DATE: June 15, 2021
SUBJECT:
Title
RESOLUTION SELECTING AND AUTHORIZING AGREEMENTS TO PROVIDE AS-NEEDED REAL ESTATE CONSULTING SERVICES WITH THE SERVICE PROVIDERS LISTED BELOW AND AS SPECIFIED IN EACH INDIVIDUAL AGREEMENT FOR A TOTAL AGGREGATE AMOUNT NOT TO EXCEED $5,000,000 FOR A PERIOD OF FIVE YEARS FROM JULY 1, 2021 TO JUNE 30, 2026. THESE AS-NEEDED SERVICES WILL SUPPORT DISTRICT OPERATIONAL OR STRATEGIC PRIORITIES. EXPENDITURES FOR THE FIRST YEAR ARE BUDGETED IN FISCAL YEAR (FY) 2022. FUNDS REQUIRED FOR FUTURE YEARS WILL BE BUDGETED IN THE APPROPRIATE FISCAL YEAR SUBJECT TO BOARD APPROVAL UPON ADOPTION OF EACH FISCAL YEAR'S BUDGET.
A) CBRE, INC.
B) KEYSER MARSTON ASSOCIATES, INC.
C) PRO FORMA ADVISORS, LLC.
D) JONES LANG LASALLE AMERICAS, INC.
E) AECOM TECHNICAL SERVICES, INC.
F) ERNST & YOUNG, LLP.
G) TS WORLDWIDE, LLC. DBA HVS
H) LONDON MOEDER ADVISORS
I) MAURICE ROBINSON & ASSOCIATES LLC.
J) RSG, INC.
K) BAE URBAN ECONOMICS, INC.
L) CIVITAS, INC.
M) KPMG, LLP.
N) HR&A ADVISORS, INC.
O) THE DORE GROUP
P) ZENITH CONSULTANTS
Q) PARAGON PARTNERS, LTD.
R) OVERLAND, PACIFIC AND CUTLER, LLC.
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EXECUTIVE SUMMARY:
BPC Policy No. 110 establishes the San Diego Unified Port District’s (District) procedure for processing and administering agreements with consultants for services rendered to the District. The District’s Real Estate Department, in recent years, has utilized as-needed consultants' agreements spanning multiple years to allow for a more efficient and expedited method of obtaining real estate consulting services. In doing so, staff has been able to expedite processing times for Real Estate consulting services and obtain professional consulting services quickly and efficiently at a competitive rate. It has also enabled staff to work with qualified consultants on several projects and tasks concurrently within the following disciplines: financial and feasibility analysis (including appraisals), market and economic analysis, real estate development negotiation services and new business development services. The current as-needed agreements commenced on July 1, 2018 and expires June 30, 2021; therefore, staff is recommending the Board’s consideration of a new group of as-needed real estate consultants to ensure continued efficiency in processing current and anticipated Real Estate Department work efforts and tasks.
Pursuant to BPC Policy No. 110, District staff issued Request for Qualifications (RFQ) 20-26MA for As-Needed Real Estate Consulting Services on January 26, 2021. The District received 24 responsive proposals. Based on the review of the written proposals, the panel selected the 18 highest-ranked firms. Staff recommends that the Board select and authorize as-needed agreements in substantial form and compliance with the attached agreements with the 18 selected firms to provide as-needed real estate consulting services for a total aggregate amount payable under the agreements not to exceed $5,000,000 for a period of five years (Attachments A thru R).
RECOMMENDATION:
Recommendation
Adopt a resolution selecting and authorizing agreements with: CBRE, Inc.; Keyser Marston Associates, Inc.; Pro Forma Advisors, LLC.; Jones Lang LaSalle Americas, Inc.; AECOM Technical Services, Inc.; Ernst & Young, LLP.; TS Worldwide, LLC. dba HVS.; London Moeder Advisors.; Maurice Robinson & Associates, LLC.; RSG, Inc.; BAE Urban Economics, Inc.; Civitas, Inc.; KPMG, LLP.; HR&A Advisors, Inc.; The Dore Group, Inc.; Zenith Consultants.; Paragon Partners, Ltd.; and Overland, Pacific & Cutler, LLC. for as-needed real estate consulting services for a total aggregate amount payable under the agreements not to exceed $5,000,000 for a period of five years beginning July 1, 2021 and ending June 30, 2026.
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FISCAL IMPACT:
Funds for FY 2022 expenditures are budgeted in the Real Estate Professional Services expense budget. Funds required for future fiscal years will be budgeted for in the appropriate fiscal years, subject to Board approval upon adoption of each fiscal year’s budget.
Compass Strategic Goals:
The Board’s authorization for the As-Needed Real Estate Consulting Services agreements will streamline the solicitation process for retaining consultants to assist the District with its various real estate efforts. This agenda item supports the following Strategic Goal(s).
• A Port that the public understands and trusts.
• A thriving and modern maritime seaport.
• A vibrant waterfront destination where residents and visitors converge.
DISCUSSION:
Over the years, the District’s Real Estate Department has entered into contracts with consultants on an as-needed basis to meet lease and project requirements as they arise. The use of as-needed consultants has enabled Real Estate staff to streamline the solicitation process for engaging consultants through an on-call list, rather than go through a separate procurement process each time consulting assistance is needed. Due to the numerous work efforts anticipated and the variety of tasks that may be needed, retaining several as-needed consultants will establish a greater capacity to work on multiple projects concurrently. Furthermore, staff has found that retaining as-needed consultants ensures a prompt response and competitive pricing for the requested services. Based on past experience, staff anticipates this approach will save approximately six to eight weeks of time that would otherwise be spent to solicit and engage consultants in a standalone agreement. Notwithstanding this approach, the District may still choose to conduct a separate consultant procurement process for certain special projects or tasks, rather than use the proposed as-needed consultants, if necessary.
The current as-needed agreement commenced on July 1, 2018 and expires June 30, 2021; therefore, staff is recommending the Board’s approval of a new group of as-needed real estate consultants to support on-going and future real estate projects. Pursuant to BPC Policy No. 110, the District completed an RFQ process and selected 18 firms to recommend to the Board for as-needed agreements, as further described below.
The Board’s approval of the recommended agreements would allow Real Estate staff to continue to enlist consultant services for the following tasks: financial and feasibility analysis (including appraisals), market and economic analysis, real estate development negotiation services, and new business development services for the next five years, as funds will allow. Thereafter, barring any conflicts of interest, as a project arises; staff may select an as-needed consultant for specific services. In order to ensure the most competitive rates, staff may solicit specific scopes of work and fee proposals within the approved as-needed consultant list on an expedited basis.
For the tasks noted above, staff proposes that the District enter into 18 separate as-needed consultant agreements with the selected firms for a total aggregate amount payable under the agreements not to exceed $5,000,000 for a period of five years. Of these 18 firms, 7 would be newly available firms to the District compared to the current as-needed agreement. In addition, 4 are certified as Small Business Enterprises (SBE) and another 3 identified SBEs as part of their team.
Request for Qualifications and Consultant Selection
Pursuant to BPC Policy No. 110, on January 26, 2021, District staff issued RFQ 20-26MA seeking As-Needed Real Estate Consulting Services to provide financial and feasibility analysis (including appraisals), market and economic analysis, real estate development negotiation services, and new business development services. The RFQ described the consulting services required by the District, the agreement terms and conditions and the competitive process by which the District procures consulting services.
An Information Exchange Meeting was held February 2, 2021. In total, 24 responsive proposals to the RFQ were received by the deadline of February 25, 2021, from the following firms: CBRE, Inc.; Keyser Marston Associates, Inc.; Pro Forma Advisors, LLC.; Jones Lang LaSalle Americas, Inc.; AECOM Technical Services, Inc.; Ernst & Young, LLP.; TS Worldwide, LLC. dba HVS.; London Moeder Advisors.; Maurice Robinson & Associates, LLC.; RSG, Inc.; BAE Urban Economics, Inc.; Civitas, Inc.; KPMG, LLP.; HR&A Advisors, Inc.; The Dore Group, Inc.; Zenith Consultants.; Paragon Partners, Ltd.; Overland, Pacific & Cutler, LLC.; The Bernard Johnson Group, Inc.; Meissner Jacquet Real Estate Management Group, Inc.; Williamson Real Estate.; The Vertex Companies, Inc.; Hatch Associates Consultants, Inc.; and Kimberon, Inc. The 24 proposals were evaluated by a panel of District staff and were evaluated on the following weighted criteria in descending order: experience of the proposed staff (greatest weight), the firm’s approach to the project, the firm’s capability to perform, the firm’s relevant experience, and the firm’s fair and reasonable cost (least weight), among other bonus considerations such being certified as an SBE. Based on the review of the written proposals, the panel selected the following 18 highest-ranked firms:
CBRE, Inc. (CBRE) - CBRE is a full-service real estate and investment firm founded over 100 years ago. Trusted by 90% of the Fortune 100, with over 100 public sector clients, the Ports of Miami, Tampa Bay, and Pensacola, and San Diego’s leading organizations, CBRE would put the District in the company of clients shaping the region such as the US Navy, the North County Transit District, the City of San Diego, City of Chula Vista, among others. Their services would include research, financial consulting, valuations, and project analysis. CBRE also proposes Range Partners as a sub-consultant who is also an SBE.
Keyser Marston Associates, Inc. (KMA) - KMA has over 45 years of experience providing creative, pragmatic solutions on complex in-fill and community revitalization developments. KMA has expertise in working with public agencies to develop complex financial analyses and cash flows, along with fiscal and economic studies and assisting in real estate negotiations and lease structuring. KMA’s relevant experience includes performing and communicating complex financial analyses and is currently assisting the District with the Chula Vista Bayfront project. KMA is a SBE and proposes the use of sub-consultant Cumming Management Group for cost estimating.
Pro Forma Advisors, LLC, (Pro Forma) - Pro Forma, founded in 2008, provides a wide range of research services in economics, finance, market analysis, and appraisals. Pro Forma’s clients include municipalities, other public agencies, public/private joint ventures, private developers, and financial institutions. Their services include market evaluations, highest and best use analyses, financial analyses, rent review analyses, appraisals, and evaluations of facility lease arrangements. Pro Forma’s experience includes conducting the most recent commercial ground lease “benchmark percentage rent” analysis for the District as well as the analysis of BPC Policy No. 355 to recommend policy revisions, numerous lease extension fee assignments, analysis of District policies regarding participation in the assignment/sale or refinancing of District leaseholds, rent review analyses, inventory and site analysis for lower cost overnight accommodation policy, and market support evaluations for District-owned properties.
Jones Lang LaSalle Americas, Inc. (JLL) - JLL is an international financial and professional services firm that specializes in commercial real estate services. They have expertise in public sector real estate and providing technical real estate services to ports across a number of asset classes. These engagements include development and transaction advisory for specific projects, highest and best use valuation analyses on multiple sites and large-scale financial impact analyses encompassing the District’s real estate portfolio. In addition, JLL has provided development advisory, financial feasibility analysis, market research, and negotiation support for the County of San Diego, Cities of Napa, Seattle, and Los Angeles; and the New York and New Jersey Port Authorities.
AECOM Technical Services, Inc. (AECOM) - AECOM, established in 1990, is a global professional services firm providing consulting services to a broad range of markets that includes providing various ports with intermodal infrastructure essentials for the facilitation of efficient maritime trade, and economic analysis for land and water use as well as real estate strategies. AECOM has experience working with the District and other ports, such as the Ports of Los Angeles, Long Beach, Oakland, and Hueneme.
Ernst & Young, LLP. (EY) - Ernst & Young, LLP is a multinational professional services firm founded in 1989. Prior experience includes consulting on the marine terminal redevelopment with Philadelphia Regional Port Authority and acting as a trusted financial advisor to the Port Authority of New York and New Jersey on multiple redevelopment and master planning projects. Recent San Diego experience includes recently awarded work with SANDAG, ongoing projects at San Diego State University and regular engagements for private clients, local convention hotels and residential developers in the area. Ernst & Young proposes Carpenter/Robbins Real Estate, Inc., an SBE for real estate advisory consulting services.
TS Worldwide, LLC. (HVS) - HVS is a global consulting firm focused exclusively on the hospitality industry. Their services include consulting and appraisal. Relevant experience includes consulting for the Port of San Diego on Fifth Avenue Landing and other proposed projects, the Port of San Francisco on proposed hotel projects, valuation consulting and expert testimony for Los Angeles County and Santa Barbara County, and consulting for the City of Rancho Palos Verdes on a proposed resort.
London Moeder Advisors (LMA) - LMA is a San Diego based firm with 30 years’ experience providing real estate advisory services such as market analysis; financial feasibility studies; litigation support and expert witness services; investment studies for acquiring or disposing of real estate; and fiscal impact, job generation and economic multiplier effect reports. LMA has worked with the Otay Water District to conduct economic studies, market analysis, financial feasibility analysis, and master plan development negotiations with tenants; working with the City of San Marcos to conduct market and feasibility analysis of the Creek District, which included owned land, to determine uses, density and values and guide re-planning process; assisting the Rancho California Water District where they conducted a strategic plan analysis of a 6,600-acre site including various market studies; feasibility studies for an RFP package to prospective developers and vendors; and the City of Carlsbad to conduct a hotel market and valuation analysis and assist in negotiations for e a long term hotel lease.
Maurice Robinson & Associates, LLC (MRA) - MRA, owned by Maurice Robinson, has over 40 years of experience providing real estate services to public agencies in California, specifically related to the hospitality industry. MRA has expertise in ground lease negotiations, hotel brand selection and management contract negotiation, and performing financial analyses on potential ground lease rent structures. Since 2006, MRA has been retained by the District for a dozen assignments that include performing economic and financial feasibility analysis for National City Marine Terminal, Spinnaker Hotel, Sunroad Hotel, Wyndham Bayside redevelopment; real estate negotiations for Lane Field South, Hilton Bayfront expansion and Chula Vista; developer selection for Lane Field North; expert witness services for San Diego Marriott Marquis; market research and analysis for Harbor Island timeshare and hostels; and providing findings of opinion for the District. MRA proposes the use of sub-consultant Jason Bass for data gathering and excel modeling.
RSG, Inc. (RSG) - RSG’s is a trusted advisor to over 90 public agencies in California. Their real estate services include market analysis, pro forma financial and hurdle rate analysis, P3 financing, cost and feasibility studies, and fiscal and economic impact reports. RSG has advised and structured a variety of transactions, including cell tower and billboard leases, building leases, ground leases, and fee interest sales.
BAE Urban Economics, Inc. (BAE) - BAE, established in 1986, is a national urban economics and real estate consultancy firm that has provided services to public agencies, non-profit organizations, financial institutions as well as real estate investors and developers. BAE has a “triple bottom-line” approach and incorporates sustainable economics, equity, and the environment into their services. BAE displayed an understanding of the needs of the District as well as a wealth of relevant experience in providing similar services to the District as well as other ports and government agencies. BAE’s experience includes providing market and feasibility analysis, development feasibility analysis, and hotel demand projections for the Port of San Francisco, Long Beach Civic Center, LA Metro, and the City and County of San Diego.
Civitas, Inc. (Civitas) - For the past 37 years, Civitas has worked with numerous private organizations and a myriad of multi-agency organizations across the country to realize-world class planning and design. Civitas, located in Denver, Colorado, has a deep portfolio of waterfront and planning work involving complex and diverse client groups and governing agencies. Civitas has a team of landscape architects, architects, urban designers and planners which have led large-scale, complex projects in some of the most contentious areas of the country, including extensive work in the greater San Diego region. District project experience includes: North Embarcadero Visionary Plan Phase 1, Broadway Pier Surface Enhancements, Lane Field Park, and is currently working with the District on the landscape architecture design for the Imperial Beach Pier. Additional experience includes: Stapleton Parks and Open Space Master Plan, Balboa Park Central Mesa Projects, Central Platte Valley Project, Belmar Development, and Los Angeles River Revitalization Master Plan.
KPMG, LLP. (KPMG) - KPMG, LLP is a multinational professional services firm founded in 1987. Prior experience includes advising the San Diego Association of Governments (SANDAG) on commercial development opportunities and the Department of the Navy’s redevelopment of the Old Town Center site.
HR&A Advisors, Inc. (HR&A) - HR&A, founded in 1976, is a real estate, economic development and energy efficiency consulting firm. They have experience performing financial and feasibility analyses; fiscal, market and economic analyses for prospective port and tenant projects; and assisting with real estate negotiations. HR&A proposed a clear approach to providing real estate consulting services. HR&A’s experience includes working for the San Diego Association of Governments (SANDAG), San Diego County Regional Airport Authority, Cities of San Diego and Oceanside.
The Dore Group, Inc. (Dore) - Dore, an SBE founded in 2010, performs appraisals and property valuation services exclusively for private/public uses in California as well as fair market rent studies, lease analysis, comparable port studies, and highest and best use studies with specializations in submerged land, complex valuation assignments, government agencies' fair market rent studies and valuation on improved and ground leases, as well as right-of-way and complex traditional land. Dore’s relevant experience includes analyzing percentage lease rates for District tidelands; fair market rent determination for rent negotiations on Pacific Maritime Services Container Terminal - Pier J, SSA Terminals Container Terminal - Pier C, and the lease for the LNG fueling station and valuation of underlying land and depreciated value of the existing improvements for the Port of Long Beach; market rent survey for the west coast terminal rents where they conducted a survey of all major ports on the west coast of North America for the Port of Vancouver; provided a market rent survey for the Port of Seattle; analyzed the fair market value and rent for cargo berths at the Port of Oakland to determine assessed value basis; valuation of percentage lease rates for Old Fisherman’s Wharf I and II boatyards, yacht club, fish processing, food and beverage, including submerged lands for the City of Monterey; valuation of tidelands for the San Diego County Regional Airport Authority; and valuation services for the US Department of the Navy.
Zenith Consultants (Zenith) - Zenith Consultants is a small local company and SBE focused on real estate and development. Their comprehensive experience includes conducting real estate studies, performing value engineering & cost verification studies, and preparing written reports and recommendations to staff and policy makers. Zenith is currently assisting the District in advancing the Chula Vista Bayfront Resort Hotel and Convention Center project from planning into design and implementation.
Paragon Partners Ltd. (Paragon) - Paragon is a full-service real estate consulting firm with over 25 years of experience providing real estate, asset management and related services in Southern California. Paragon proposes to partner with Beacon Economics; CBRE; Cumming; Colliers International of San Diego; Hendrickson Appraisal Company, Inc. (Hendrickson); KMEA; and Santolucito Dore Group to provide appraisal, market analysis, fiscal impact analysis, as well as hotel appraisal and consulting services. Paragon outlined a clear and concise approach to their proposed services. Paragon’s extensive relevant experience includes easements, leases, licenses, utility agreements, as well as purchase and disposition agreements and has provided property management services to both the Ports of Long Beach and Los Angeles. In addition, Paragon is an SBE and the sub-consultants proposed by Paragon have experience providing services to the District and other public agencies.
Overland, Pacific & Cutler, LLC. (OPC) - OPC has helped numerous public agencies and private entities reach their project goals with a variety of real estate services and has worked on local San Diego projects since 1980. OPC’s relevant experience includes supporting port projects throughout Southern California, most recently working with the Port of Los Angeles and the Port of Long Beach on jointly owned property and assisting the Port of Long Beach on the Gerald Desmond Bridge Replacement project. OPC proposes SBE certified subconsultants such as Integra Realty Resources and Hennessey & Hennessey, LLC. for appraisal services as well as Izor & Associates for ADA compliance.
Firms Not Recommended
The six remaining responsive firms, The Bernard Johnson Group, Inc., Meissner Jacquet Real Estate Management Group, Inc., Williamson Real Estate, The Vertex Companies, Inc., Hatch Associates Consultants, Inc., and Kimberon, Inc., were not selected by the panel because they did not demonstrate that their proposed staff has substantial relevant or similar experience providing relevant real estate consulting services. More specifically, the proposed teams did not demonstrate a clear understanding of the services requested by the District and lacked an organized, clear, and concise approach to providing such services. In addition, these firms were not recommended by the selection panel for one or more of the following reasons: the proposed staff did not demonstrate that the Project Manager and/or project team have relevant or similar experience managing District or other port or similar agency projects; the firms did not demonstrate an understanding of the District’s issues and needs as identified in the RFQ; they did not identify a clear quality control process; and/or they did not propose a fair and reasonable cost.
Conclusion
The recommended firms ranked in the top 18 due to the firms’ demonstration of the most relevant staff experience, thorough and well-thought-out approach, understanding of the District’s real estate projects as well as a fair and reasonable cost structure. As-needed consultants' agreements with these firms will continue to allow for a more efficient and expedited method of obtaining real estate consulting services which the District has relied on for many years. Staff will be able to continue to expedite processing times for these services and obtain them at a competitive rate. District staff recommends that the Board select and authorize as-needed agreements with CBRE, Inc.; Keyser Marston Associates, Inc.; Pro Forma Advisors, LLC.; Jones Lang LaSalle Americas, Inc.; AECOM Technical Services, Inc.; Ernst & Young, LLP.; TS Worldwide, LLC. dba HVS.; London Moeder Advisors.; Maurice Robinson & Associates, LLC.; RSG, Inc.; BAE Urban Economics, Inc.; Civitas, Inc.; KPMG, LLP.; HR&A Advisors, Inc.; The Dore Group, Inc.; Zenith Consultants.; Paragon Partners, Ltd.; Overland, Pacific & Cutler, LLC. to provide real estate consulting services for a total aggregate amount payable under the agreements not to exceed $5,000,000 for a period of five years (Attachments A thru R).
General Counsel’s Comments:
The General Counsel’s Office has reviewed the agenda sheet and attachments, as presented to it, and approves them as to form and legality.
Environmental Review:
The proposed Board actions, including without limitation, resolutions selecting and authorizing agreements for as-needed real estate consulting services, do not constitute an “approval” or a “project” under the definitions set forth in California Environmental Quality Act (CEQA) Guidelines Sections 15352 and 15378 because no direct or indirect changes to the physical environment would occur. CEQA requires that the District adequately assess the environmental impacts of projects and reasonably foreseeable activities that may result from projects prior to the approval of the same. Any project developed as a result of the Board’s actions that requires the District or the Board’s discretionary approval resulting in a physical change to the environment will be analyzed in accordance with CEQA prior to such approval. CEQA review may result in the District, in its sole and absolute discretion, requiring implementation of mitigation measures, adopting an alternative, including without limitation, a “no project alternative” or adopting a Statement of Overriding Consideration, if required. The current Board actions in no way limit the exercise of this discretion. Therefore, no further CEQA review is required.
The proposed Board actions comply with Section 81 of the Port Act which allows for the use of funds for necessary expenses of conducting the District. The Port Act was enacted by the California Legislature and is consistent with the Public Trust Doctrine. Consequently, the proposed Board actions are consistent with the Public Trust Doctrine.
The proposed Board actions do not allow for “development,” as defined in Section 30106 of the California Coastal Act, or “new development,” pursuant to Section 1.a. of the District’s Coastal Development Permit (CDP) Regulations because they will not result in, without limitation, a physical change, change in use or increase the intensity of uses. Therefore, issuance of a Coastal Development Permit or exclusion is not required. However, development within the District requires processing under the District’s CDP Regulations. Future development, as defined in Section 30106 of the Coastal Act, will remain subject to its own independent review pursuant to the District’s certified CDP Regulations, PMP, and Chapters 3 and 8 of the Coastal Act. The Board’s actions in no way limit the exercise of the District’s discretion under the District’s CDP Regulations. Therefore, issuance of a CDP or exclusion is not required at this time.
Equal Opportunity Program:
Due to limited known sub opportunities, no SBE goal was established for this opportunity. Seven of the recommended firms are SBEs or plan to utilize an SBE as part of their team.
PREPARED BY:
Matthew Ostlund
Asset Manager, Real Estate
Attachment(s):
Attachment A: Agreement with CBRE, Inc.
Attachment B: Agreement with Keyser Marston Associates, Inc.
Attachment C: Agreement with Pro Forma Advisors, LLC.
Attachment D: Agreement with Jones Lang LaSalle Americas, Inc.
Attachment E: Agreement with AECOM Technical Services, Inc.
Attachment F: Agreement with Ernst & Young, LLP.
Attachment G: Agreement with TS Worldwide LLC., dba HVS
Attachment H: Agreement with London Moeder Advisors
Attachment I: Agreement with Maurice Robinson & Associates, LLC.
Attachment J: Agreement with RSG, Inc.
Attachment K: Agreement with BAE Urban Economics, Inc.
Attachment L: Agreement with Civitas, Inc.
Attachment M: Agreement with KPMG, LLP.
Attachment N: Agreement with HR&A Advisors, Inc.
Attachment O: Agreement with The Dore Group, Inc.
Attachment P: Agreement with Zenith Consultants
Attachment Q: Agreement with Paragon Partners Ltd.
Attachment R: Agreement with Overland, Pacific & Cutler LLC.