CC 10-16-18 Item #13 Budget adjustment RFP for a new City HallPUBLIC WORKS DEPARTMENT
CITY HALL
10 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3354 www.cupertino.org
CITY COUNCIL STAFF REPORT
Meeting: October 16, 2018
Subject
Budget Adjustment to proceed with a Request for Proposals for architectural services
for a New City Hall, an Interim City Hall, and to add one 3‐Year Limited Term Project
Manager
Recommended Action
Staff recommends Council adopt Resolution No. 18‐XXX amending FY 18/19 Operating
Budget to appropriate $6,175,000 $6,087,500 to Public Works, as follows:
1. $5,500,000 for architectural design services for a New City Hall, funded by the
Capital Reserve, and;
2. $500,000 for architectural design and other services as needed for the Interim City
Hall, funded by the Capital Reserve, and;
3. $87,500 to add one 3‐year Limited Term Project Manager in the Department of
Public Works, funded by the General Fund
Vallco Town Center Background
On September 19, 2018, the Cupertino City Council adopted the Vallco Town Center
Specific Plan including resolutions to certify the Environmental Impact Report and
associated General Plan Amendments. In addition, the City Council introduced and
conducted the first reading to adopt a Development Agreement (DA) between the City
and Vallco Property Owner LLC (Developer), as well as introduced and conducted the
first reading for ordinances to amend the Municipal Code and the Zoning Map. On
October 2, 2018, the Cupertino City Council conducted the second readings and adopted
the DA and amended the Municipal Code and the Zoning Map. Although the DA will
not be effective until November 2, the schedule for the New City Hall and Interim City
Hall designs are on a very aggressive schedule and by proceeding at this time, Requests
for Proposals for both efforts will be able to be issued in November.
The DA includes a number of community benefits for the City if the Developer chooses
to construct a project on the site that conforms to the Tier 2 option established in the
Specific Plan. One of the community benefits included in the Development Agreement is
a one‐time payment of $30,000,000 from the Developer to the City (In‐Lieu Payment), or
for the Developer to construct a core and warm shell building for a New City Hall,
conforming to the preferred alternative from the Civic Center Master Plan (a background
of the Civic Center Master Plan, and a chronology of related actions is provided as
Attachment A). The City may accept the In‐Lieu Payment at its discretion at any time
CC 10/16/18 Item #13
prior to the Developer’s contracting with a general contractor for the work or
commencement of construction of the New City Hall. If the City elects to receive the In‐
Lieu Payment, the Developer would pay the full amount prior to issuance of occupancy
for the first office building. The core and warm shell will be for a 40,000 square foot, two
story building, built to Essential Facility standards, including approximately 118 parking
stalls one‐level underground garage, and associated site work in the construction area.
Although the Developer’s obligation under the DA for the New City Hall is to construct
a core and warm shell building that has been fully designed and permitted by the City,
this budget request includes a scope for the full design of the project, including the design
of tenant improvements that are the City’s financial and construction obligation.
Timing of Developer’s Commitment to New City Hall Construction
If Developer commences construction or installation of “Project Specific Work” for the SB
35 Project, then Developer shall pay City within 30 days following City’s demand therefor
an amount equal to 50% of the reasonable out‐of‐pocket costs and expenses incurred by
City in connection with the design and planning for the New City Hall, not to exceed
Three Million Dollars ($3,000,000).
“Project Specific Work” is defined as work that is specific to either the SB 35 Project, a
Tier 1 development project, or the Tier 2 Project under the Development Agreement,
contemplated to be work beyond the Project Neutral Work. This would most notably be
work associated with a building permit, such as a foundation permit or other construction
associated with vertical infrastructure.
“Project Neutral Work”, as defined in the DA, includes demolition, rough grading, make‐
ready utility work, offsite work, excavation and shoring, and such other work as the
parties may mutually agree is Project Neutral Work.
Developer’s Scope of Work for Core and Warm Shell Building
As part of the core and warm shell construction to be delivered by the Developer, the
following items will be included:
Concrete one level parking garage with shotcrete walls included and furnished
with code minimum fire sprinkler system, fire alarm system and lighting.
The New City Hall building will be core and shell (warm shell box) where the box
will consist of building envelope and roof.
Mechanical units will be provided on the roof and will be stubbed into the building
for distribution under tenant improvement scope performed by City.
All utilities, including fire stand pipes, will be stubbed in to the building and will
be distributed as part of the tenant improvement work.
Electrical panels will be provided and electrical services will be brought from the
existing transformer connection location point into the building to a location to be
shown in the construction drawings.
The exterior envelope will be either wood frame with stucco and glass windows
or metal stud framing with stucco and glass windows.
The building will be designed to Essential Facility seismic codes.
Store front doors will be provided. All exterior doors and hardware will be
provided.
All utility connections from the existing connection points to be brought into the
building to a location to be shown in the construction drawings.
The site work in the construction zone is included to have standard landscaping
with irrigation and the parking lot to be asphalt, and concrete sidewalks
commensurate with existing improvements. Any damage will be restored to
original state.
The civil and structural portions of the building will be designed by the City to
LEED Silver.
Roofing will be an industry standard roofing material.
Roof will be designed and built to allow for solar panels to be installed by the City.
The City’s obligations for the New City Hall project, as identified in the DA are the
following:
City will be responsible for designing, preparing construction documents and
obtaining all necessary discretionary approvals and building permits for the New
City Hall.
The target budget (not including Design Deviations) for the work to be completed
by the Developer for the core and warm shell New City Hall, consistent with the
criteria established in the Civic Center Master Plan, assuming commencement of
construction within 24 months, is Thirty One Million Dollars ($31,000,000)
City will commence design work within 30 days following the effective date of the
Development Agreement for the Tier 2 Vallco Town Center Specific Plan (Effective
Date). Thereafter, City will diligently proceed with any discretionary and
ministerial approvals for the New City Hall, including any required architectural
approvals, preparation of construction documents and permitting, including
demolition, tree removal, make‐ready utilities, excavation and building permits.
The City shall complete all approvals and acquire permits for the New City Hall
within 21 months of the Effective Date, subject to extensions that may occur per
the DA.
In order to allow for Developer’s timely construction of the New City Hall, City
shall vacate the Existing City Hall and deliver possession of the Existing City Hall
site to Developer for construction within 24 months of the Effective Date, subject
to extensions that may occur per the DA.
If the City does not meet the above scheduled deadline, the Developer has the
option to provide the In‐Lieu Payment to the City instead of constructing the New
City Hall.
If Developer elects to proceed with development of the Tier 2 of the Vallco Town Center
Specific Plan, the Developer shall complete the New City Hall core and shell construction
and deliver a Warm Shell New City Hall to the City within thirty six (36) months after
the date that the City provided the approved building permits and relinquished the site
to the Developer.
If the City’s construction plans, specifications and drawings for the New City Hall deviate
from the New City Hall Criteria and the deviations increase the cost to construct the New
City Hall, the Developer will pay the cost of the design deviations not to exceed Four
Million Dollars ($4,000,000). Any design deviations that increase the New City Hall costs
above the deviation cost allowance will be the responsibility of the City.
Interim City Hall
Staff will begin to monitor and assess the potential and likely cost to acquire sufficient
building lease space for City Hall staff relocation for the potential 4‐5 year period that the
warm shell and tenant improvements are being constructed. Possibilities of moving City
Hall staff to two or more lease spaces will also be considered. However, in the event that
sufficient lease space will not be available when the relocation is to occur, staff will need
to begin to design and estimate the cost of locating portable buildings, providing
temporary utilities, and constructing parking on the Library Field. This design will need
to begin early in order to be able to implement the relocation of City without delay if
necessary, but the effort would be abandoned if offsite lease space is able to be acquired
and the City Council directs staff to do so. More information and a cost comparison will
be brought to the City Council by early spring, 2019.
City Financial Obligations for New City Hall Delivery
Along with the budget adjustments recommended in this report, the City will be
responsible for either the construction of the Interim City Hall in portables on Library
Field, very roughly estimated at $5 million, and the operations and maintenance of those
facilities for approximately five years, or the lease cost for five years if the City is able to
secure sufficient space at the needed time. For example, if 24,000 square feet of lease space
is secured at the current market rate of about $4.60/sf, then the lease will cost the City
approximately $6,600,000 over the five years. Additionally for either option, the cost for
staff and equipment relocations to the Interim City Hall would be necessary, as would
the cost to relocate back into the New City Hall.
The City will also be responsible for tenant improvements once the Developer has
completed the core and warm shell structure. Assuming $400‐$500 per square foot for
tenant improvements (based on approximate rates for similar improvements in
comparable buildings) to the 40,000 square foot building, the tenant improvement costs
could be in the range of $16‐$20 million.
Although without any plans to estimate at this time, the total cost for the project, from
beginning of design until move‐in, would be:
Design of New City Hall $ 5,500,000
Design of Interim City Hall $ 500,000
Construction of Interim City Hall $ 5,000,000
Construction of Tenant Improvements $15‐20,000,000
City Cost Subtotal $26‐31 million
Developer’s core and warm shell $ 31 million
Total Project Cost $57‐62 million
Total, all‐inclusive estimate with contingencies, as presented to the City Council in
February 2018, was $69,150,000. So roughly, the Developer’s construction of the core and
warm shell has reduced the estimate by $8‐13 million, on top of the $31 million
construction that will be funded and constructed by the Developer.
There are also savings that can be expected to offset some of this cost. A study session to
discuss the Citywide building condition assessment project is scheduled for November
5th. At this study session, City Hall will be described as requiring up to $13 million of
expenditures over the next 10 years. These expenditures will be necessary to keep the
building from failing. These expenditures would not be required upon the decision to
proceed with the New City Hall project.
Although the proposed New City Hall is approximately 50% larger than the current
building, future operating and maintenance cost of the building will likely be roughly
similar due to many energy and water‐use efficiencies, modern technologies, and an
overall LEED rating of at least Silver.
Add One 3‐Year Limited Term Project Manager
In order to manage this effort and ensure that schedules are met and that the designs of
the Interim City Hall and the New City Hall meet the needs of the City, additional
resources are necessary. One additional Project Manager is recommended to be added to
the Public Works Department for a term of three years. This Project Manager may work
on the City Hall projects, or they may work on more routine CIP projects to allow more
experienced staff to work on the City Hall projects. The total estimate cost for this position
is $525,000 for the full three years. As an alternative, staff considered bringing on a Project
Manager consultant, which for one person for three years billed at approximately
$250/hour would cost $1,560,000.
Schedule
Below is the schedule that would be necessary in order to meet deadlines in the DA:
Date Activity
October 16, 2018 Council approves budget appropriation to conduct RFP for Design Services
November 2, 2018 Effective Date of the Development Agreement
November 5, 2018
Request for Proposals for Design Services for the Interim City Hall project
utilizing On‐Call consultant list
November 27, 2018 Issue Design RFQ for New City Hall
December 4, 2018 Council Approval of Design Services Agreement ‐ Interim City Hall
January 7, 2019 Start Design Interim City Hall
April 2, 2019
Council Approval of Design Consultant and Study Session Review of City Hall
Concepts from Civic Center Master Plan and review of Interim City Hall
Options
June 5, 2019 Community Meeting No. 1
June 30, 2019 Conceptual Design Complete
July 12, 2019 Construction Documents Complete ‐ Interim City Hall Project
July 26, 2019 Building Permit Approval Interim City Hall
August 21, 2019 Advertise Interim City Hall Project
September 17, 2019 Bid Opening ‐ Interim City Hall project
September 30, 2019 Schematic Design Complete
October 15, 2019 Award Interim City Hall project and Study Session on Schematic Design
November 15, 2019 Contract Executed ‐ Interim City Hall project
December 4, 2019 Community Meeting No. 2
December 30, 2019 Design Development Complete for City Council Review
January 2, 2020 Start Construction ‐ Interim City Hall project
January 7, 2020 City Council Review of Design Development – Study Session
April 30, 2020 Construction Documents Complete
June 30, 2020 Building Permit Approval anticipated
August 2, 2020 City Hall Approval Deadline (ie Building Permit approvals)
September 1, 2020 Interim City Complete, receive Occupancy permit
September 15 ‐
October 15, 2020 Transition staff to Interim City Hall
November 2, 2020 Current City Hall is completely vacated
April 1, 2023 Award City Hall T.I. project
August 9, 2023 City begins Tenant Improvements
May 1, 2025 City Hall Complete, Opening Ceremony
LEGEND
Interim City Hall
Deadlines identified in the Development Agreement
New City Hall
Bold City Council Approvals/Actions
In addition to the above schedule, there will be at least monthly progress reports
provided to the City Council and the public.
Sustainability
The New City Hall, per the Civic Center Master Plan and the Vallco Town Center DA,
will be at least LEED Silver rated facility.
Fiscal Impact
Costs related to the approval of this item total $6.175 million dollars$6,087,500. The City’s
Capital Reserve Fund 429 currently has an available fund balance of approximately $10
million dollars and is expected to end fiscal year 2018‐19 with an additional $6 million
dollars for a total available fund balance of $16 million dollars. As part of another Item
on this agenda, Staff is also recommending to de‐fund approximately $4.425 million from
the approved 2018‐19 Capital Improvement Program (CIP) Budget. If approved, this
would make the fund balance approximately $20.4 million. Staff recommends using the
Capital Reserve to fund architectural services of $6 million dollars, leaving either $10
million dollars in available fund balance, or $14.4 million if the CIP deferrals are
approved on this agenda.
The fiscal impact to add one 3‐Year Limited Term Project Manager position for FY 18/19
will be $87,500. Ongoing costs will be $175,000 in FY 19/20 and FY 20/21 and $87,500 in
FY 21/22, to be funded by the General Fund.
_____________________________________
Prepared by: Timm Borden, Director of Public Works Department
Approved for Submission by: Amy Chan, Interim City Manager
Attachments:
Attachment A ‐ Civic Center Master Plan Background
Attachment B – Draft Resolution