23-094 Service Order #1 dated 9-12-23 Cumming_TCG RE Strategy - PO 2024-196Consultant:
Contact: Name: Katie Bipes Email:
Phone: 415.982.9130
Project:
Scope of Work:
City Project Management
Fiscal/Budget
Master Agreement Amount: 170,000.00
0.00
This Service Order: 76,000.00
0.00
94,000.00
Approvals
Appropriation Certification: I hereby certify that an unexpended appropriation is available in the above fund
for the above contract as estimated and that fund are available as of this date of signature.
City Finance:Date:
Management Analyst
Department Head: Date:
Total Liquidated Encumbrance:
Master Agreement Unencumbered Amount:
Consultant:Date:
Total Previously Encumbered:
Evaluation of the redevelopment opportunities initially for the City Hall, Civic Center, Sports Center, and
subsequently other target sites (Golf Course, Service Center and City Hall Annex).
•iden8fy the menu of residen8al product types (market-rate and BMR) compa8ble with civic uses that are
marketable with accompanying top line product positioning and value estimates.
•Iden8fy housing development op8ons based on market demand, rent levels (market and BMR), unit types and
mix, and the City’s program and services required on each parcel.
•Prepare preliminary financial analyses to determine revenues and value generated by private uses that can be
used to offset development and operating costs associated with public uses.
•Iden8fy a menu of public/private partnership and project delivery approaches (i.e., financial tools and
structures) that can be used in the projects.
•Deliverables: Briefing Book of key exhibits in a format suitable for inclusion in a Staff Report to Council.
Account No.: 420-99-250 900-905
Project Number: CIV 001.01.01
(1787) Cumming Management Group, 475 Sansome St, Suite 700, SF, CA 94111
kbipes@cumming-group.com
Managing Department: Public Works Project Manager: Susan Michael
City Hall Improvements (420-99-250) - Strategic Advisory Services
City of Cupertino
MASTER AGREEMENT
SERVICE ORDER NO. 1
Master Agreement # : 2023-031
Master Agreement Amount: $170,000.00
Effective Date: 8/29/2023
Agreement End Date: 12/31/2026
City of Cupertino - Cumming Group, Inc.
Master Agreement Page 1 of 1 Service Order No. `1
John Olsson Sep 12, 2023
Sep 12, 2023
Sep 12, 2023
Project Understanding
We understand that the City of Cupertino (“City”) is seeking a consultant to aid the City in their evaluation
of the redevelopment opportunities initially for the City Hall, Civic Center, and subsequently other target
sites, identified as:
IMMEDIATE SITES
A.City Hall and Future Annex
•Address: 10300 / 10455 Torres Avenue
•Flexible use as future City Hall, combined
public/private use such as City Hall and housing, or all
private use as housing or BMR housing.
B.Sports Center
•21111 Stevens Creek Boulevard
•Flexible use with some public amenities retained.
Potential redevelopment with residential and/or
commercial with existing uses.
OTHER SITES
C.Senior Center
•21251 Stevens Creek Boulevard
•Potential for ground floor public facility with above
being senior independent, assisted living, or
residential.
D.Golf Course
•22100 Stevens Creek Boulevard
•Continued open space or golf use.
E. Service Center
•10555 Mary Avenue
•Redevelopment opportunity to consider.
A key objective is to create an economically sustainable project that may incorporate revenue generating
uses in addition to required City functions. The Concord Group, as a consultant to Cumming, can
provide an array of services to facilitate optimization of the properties and the fulfillment of the projects
economic and community service goals.
The initial focus will be a “go\no-go” scope leading to preliminary recommendation for the City Hall and
Sports Center sites. We will determine in the “go\no-go” phase of work if there are market and
financially viable opportunities for public/private development.
Subsequently, City Council may authorize more detailed programming and financing plans on these and
the other sites identified above.
Our proposed phases reflect our scope of work based on our understanding of the City’s prioritized needs:
1. Cost neutral solution
2. Renovated/replaced City Hall with incorporated public space
3. Renovate/replace aging public facilities
4. Public service elements on all properties currently providing public services
5. BMR housing
Therefore, the proposed scope of work is anticipated to include the following phases and services that proceeds
from analysis through implementation.
Scope of Work
GO/NO-GO ASSESSMENT FOR CITY HALL AND SPORTS CENTER SITES
A.Initial Market Reconnaissance and Program Opportunities
•identify the menu of residential product types (market-rate and BMR) compatible with civic uses that
are marketable with accompanying top line product positioning and value estimates.
•Identify housing development options based on market demand, rent levels (market and BMR), unit
types and mix, and the City’s program and services required on each parcel.
•Prepare preliminary financial analyses to determine revenues and value generated by private uses that
can be used to offset development and operating costs associated with public uses.
•Identify a menu of public/private partnership and project delivery approaches (i.e., financial tools and
structures) that can be used in the projects.
•Deliverables:
•Briefing Book of key exhibits in a format suitable for inclusion in a Staff Report to Council.
•Reimbursables – $3000 Total (Including all air fair, hotel expenses, gas, meals, etc., for one two-person
site visit by The Concord Group.)
ADDITIONAL WORK SCOPE
B. Scenario Programming: City Hall
Focus
•Refine the programing menu to best fit the
economic objectives for the site.
•Prepare “analogue case studies” to define the
master plan vision.
•Perform built product values, net operating
income and land value guidance for the various
product types and densities considered, leading
to alternative development scenarios.
•Provide estimates of proposed alternatives
•Work with City Officials and an
architect/planning firm to create initial yield
studies to determine “best fit” and three
potential development site plan options for the
Cupertino Civic Center Property, leading to a City
Preferred option. Develop and/or confirm
preliminary space needs for City Hall and other
public/private uses desired and/or needed in the
short term and long-term. This information will
effectively serve as the new Master Plan for the
City’s Civic Center.
•Meet with stakeholders to discuss findings and
build consensus
•Work with City staff to coordinate efforts
•Present findings to City Council
•Deliverables:
•Summary document of findings,
conclusions, and recommended actions
•City Council Presentation
•Conceptual estimates for programming
options
•Reimbursables – $3000 Total (Including all air fair,
hotel expenses, gas, meals, etc., for one in-
person working session by The Concord Group.)
C. Stakeholder Engagement (Optional)
•Identify a stakeholder strategy to successfully
bring about consensus to support the preferred
alternative(s).
•Meet with stakeholders to discuss findings and
build consensus
•Work with City staff to coordinate efforts and
make presentations to the City Council.
•Deliverables:
•Focus Group and Public Open House
meeting agendas
•Reimbursables – TBD based on approved scope.
Scope of Work
D. Implementation Strategies &
Development
•Implementation strategies and their execution
are the heart of successful redevelopments
plans. We are specialists in designing
implementation strategies that achieve results,
guide the next era of investment, activate
underutilized properties and public spaces, and
provide the energy and soul to communities,
creating value for property owners and
merchants and sustainable revenues for the local
governments and agencies.
•We will provide specific actionable strategies
based on the information and plans
•completed as part of this proposal. We will seek
out public-private partnerships and project
delivery approaches to develop new public
facilities at lower costs than otherwise
achievable under traditional project delivery
methods. We will use and access our extensive
network of developers in Northern California for
this project.
•Deliverables:
•Due Diligence Checklist
•Development RFQ/RFP for the City Hall
site
•Draft Project Development Schedule
•Draft Term Sheet
E. Developer Negotiation/Transaction
Closing
•We will negotiate preliminary deal terms (Letter
of Intent or Memorandum of Understanding)
and final purchase and sale/lease/development
agreement or other P3 agreement with the
preferred developer/tenants.
•Assist with any closing conditions leading to
construction.
•Continue to meet with the City staff and City
Council.
F. Architect Procurement and
Management (Optional)
•Prepare an RFP for Architectural services; receive
proposals, level bids, and conduct interviews
with Architect finalists; recommend award of
contract and, in conjunction with City’s legal
counsel, negotiate form of agreement.
•Manage the Architectural team through
completion of Phase 1 Master Plan for the Civic
Center
•Work with City staff and make presentations to
the City Council
•Provide Design Management and Estimating for
budget development
•Deliverables:
•Architectural Services RFP
G. Future Services
•Provide GC and Consultant Procurement
Management, Design Management,
Construction Management & Closeout services
for the properties listed, as required by the City
of Cupertino.
The phased work scope is outlined in
greater detail on the following pages
and will be conducted sequentially
through the planning process.
1.Participate in a in-person kickoff-planning
meeting with the City’s team to confirm
objectives, the scope of the engagement and to
debrief on the City’s required programming per
each site, and to walk the sites in the field.
2.Analyze the properties with a specific focus on
the market potential for creating private
development opportunities that will assist in
paying for a new City Hall, other facilities and
other identified civic uses.
3.Define the Site's Primary Market Area (“PMA”),
the area from which the majority of the
demand will emanate for new development.
a.Building on previous experience in the
market area, gather selected
socioeconomic trends for the above
defined PMA, and analyze relative to
demand for housing..
4.Identify the Competitive Market Area (“CMA”),
the area in which the proposed land uses will
compete with other projects on a more or less
equal basis.
a.Survey selected competitive and
comparable projects within the CMA
and SMAs.
5.Analyze the findings of the research in Steps 1
through 4, above, and provide a preliminary
menu of housing types (BMR, workforce, market
rate) with supportable market scale/absorption
and top-line price/rate/rent positioning, and
estimated construction cost.
a.Identify a menu of potential delivery
methods that can be utilized for the
project (including a range of Design-
Build, and other available delivery
approaches).
b.Provide an initial “go/no-go” assessment
for the utilization of a public-private
partnership to finance new development
on the sites, supported by high-level
assessment of costs and revenues.
6.Conduct Working Session 1 (via web), supported
by a Briefing Book of key exhibits to present our
findings form this scope of work to the City’s
team in format suitable for inclusion in a Staff
Report to Council.
Scope of Work
Go/No-go Assessment For City Hall And Sports Center Sites
A.Initial Market Reconnaissance and Program Opportunities
Scope of Work
1.Supplement the reconnaissance from Section A
above with additional information as required to
enhance product specific conclusions.
2.Identify a panel of three (3) development
"analogues" of Civic and private redevelopment
concepts designed to achieve the City’s civic uses
and vision for the site and analyze relative to their
planning, development, and marketing, including:
mix of land uses and densities, amenity profiles,
price/rent positioning relative to the regional
competitive market, marketing programs and
user/tenant/resident profiles.
a.Evaluate the critical success factors from
the case studies and assess the lessons
learned at these analogues for
applicability to the property.
b.Utilize the results of the analogues
analysis to support the three proposed
development site plan options for the
Civic Center property.
3.Perform land residual analyses and provide
guidance as to resulting finished pad and built-
product values for each of the development
alternatives considered for the Site, characterized
by:
a.Market-driven top-line revenue
assumptions generated above;
b.Vertical construction costs (from our
knowledge base as well as the team’s local
contacts);
c.Projected operating cost metrics based on
assessed local/regional conditions.
4.Prepare development programming options &
preferred option for the Site, relative to:
a.Supportable land uses, including mixed-
use and product densities (FAR);
b.Target user/tenant/resident profiles
c.Associated price/rent/lease points and
market positioning;
d.Absorption projections;
e.Potential phasing;
f.Underlying land values (at “finished pad”)
and built values per product type;
g.Prepare three (3) development scenarios
for the development program, leading to
a preferred Site Plan Option of the
property based on the City’s established
objectives, buildout timing and intensity.
5.Select, contract, and coordinate with
architectural/design firm to prepare test-fit yield
studies for the development scenarios and site
plan options prepared above.
a.The yield studies will incorporate analysis
of property opportunities and constraints,
and how the market-driven land use
program(s) can be accommodated and/or
refined as needed.
6.Work with City officials to identify preliminary
space needs for City Hall and other public/private
uses desired and/or needed in the short term and
long-term.
Additional Work Scope
B. Scenario Programming: City Hall Focus
Scope of Work
7.Create preliminary City Hall Site Plan by
evaluating potential parcels/lots identified on
the site not needed to support civic uses that
can be sold, offered for long-term lease for
private revenue producing uses and
placemaking opportunities that can: (i) create a
source of funds to offset costs associated with
new public facilities. further catalyze desired
commercial or mixed-use development nearby;
and (ii) further catalyze desired commercial or
mixed-use development nearby;
8.In this Phase, we will participate in Working
Session 2 to debrief on modifications to Phase 1
conclusions and present the analytical results
from Phase 2.
9.Following the working session, and
incorporating its discussions, we will present our
findings, conclusions, and recommended
actions in a summary document suitable for
internal use, as well as for presentation to third
parties, such as public stakeholders, potential
investors, etc.
B. Scenario Programming: City Hall Focus (Continued)
We will work with City officials to develop a specific Stakeholder Strategy tailored to meet the project’s
needs. For purposes of our scope, we have included three of the six potential activities to inform, engage,
and gather input from the identified stakeholders throughout the development of redevelopment option:
a.Stakeholder Interviews - We can conduct interviews with key stakeholders in the community to gather
input on assets in the area and potential opportunities to create catalytic development opportunities
that support needed civic uses.
b.Focus Groups - We can lead focus group meetings to get targeted input on the development plan effort
or as a way to collect feedback on the draft vision particularly with individuals that may not participate in
the stakeholder interviews or other meetings along with the real estate development community.
c.Public Open Houses - We can hold public meetings that allow the community to stop- by during a
defined time period and ask questions about development options and the process.
d.Charrette/Community Workshop - We could conduct a half to full day workshop focused on the
development plan vision and establishment of values. This workshop could include: an evening event;
small group workshop exercises; open studio hours for the consultant team to work and the public is
invited to stop by and provide input; and a presentation by the consultant team on the outcomes of the
workshop.
e.Pop-Up Events - We could conduct pop-up events that bring activities and information to engage the
community where they are. Such events would be staged in busy locations. Pop-up events could be
conducted to gather input on the development vision.
f.Web -based Outreach - We can develop a project-specific web page for use on the City website to project
updates, meeting notifications, and collect any desired survey data to help guide the planning process.
C. Stakeholder Engagement (Optional)
Scope of Work
1.Evaluate various project delivery approaches to achieve schedule, quality of construction, and reduced costs
for public facilities (City Hall, fire station), including Design-Bid-Build, Design-Build, Progressive Design-Build,
GC/CM, 63-30 financing, and other available delivery approaches authorized by State law.
2.Identify potential philanthropic contributions toward civic facilities and for any below market housing that
may be included on the site (e.g., Apple Affordable Housing Fund)
3.Recommend project delivery and funding strategy approach for new City Hall along with catalyst
development projects.
4.Provide the following marketing, recruitment, and development agreement negotiation services:
a.Due Diligence Check List. We will identify a list of due diligence that should be completed as part of
the proposed public and private development. We can also contract directly and manage these
services for an additional fee as needed or desired. The reports identified by the checklist would
ideally be prepared prior to the issuance of a Development Offering or Developer RFQ/RFP for the
City Hall site.
I.This list may include survey, title report, environmental report (Phase 1 and/or 2),
geotechnical studies, environmental checklist, appraisal, and traffic impact analysis. Often
such documents are provided to developers who register as interested parties during the
Development Offering, RFQ/RFP process.
b.Draft Project Development Schedule. A dynamic document (excel, Microsoft Project, or other
common file type) that shows the expected major phases extending from any City development plan
for its Civic Center property to groundbreaking for multiple phases of development.
I.This will be a conceptual schedule since the timing and duration of future events is by
nature uncertain. While actual timing will almost certainly differ from forecast timing, this is
a valuable tool that can help stakeholders understand a reasonable schedule of events.
c.Draft Term Sheet. A draft term sheet will be prepared including the proposed/ recommended terms
of the development transaction for the available public land proposed to be sold or leased, including
transaction/purchase price, developer requirements (e.g., construction of public facilities, certain
commercial or mix-use development, shared parking, etc.), and expected roles and responsibilities
for all parties.
I.The purpose of a draft term sheet is to support future discussions and negotiations with
potential developers, and to ensure expectations are achieved. Some or many expected
deal points may also be included in Development Offering or RFQ/RFP documents.
D. Implementation Strategies & Development Recruitment
Scope of Work
d.Development Recruitment. All marketing and solicitation materials will be prepared to recruit the
desired development. We will use either a Development Offering process or a two-step process
of a Request for Qualifications (RFQ) and Request for Proposal (RFP) to recruit and create a highly
competitive selection process. A scoring and evaluation system will also be created to assist in the
selection of a preferred development and team. Below are some key Development Recruitment
elements:
I.Contact potential developers, brokers, and other and create buzz around the
development opportunity;
II.Manage review and developer submittal ranking process
III.Manage stakeholder meetings to discuss and/or rank submittals
IV.Manage interviews with short-list of developers
V.Manage meeting(s) to discuss and select preferred development team
D. Implementation Strategies & Development Recruitment
(continued)
1.Negotiate preliminary deal terms (Letter of Intent or Memorandum of Understanding) with preferred
developer/tenants(s) and negotiate and manage execution of purchase and sale/lease/development
agreement or other P3 agreement with the preferred developer. Assist with any closing conditions
leading to construction.
a.Every purchase and sale or lease and development agreement of public property is an
opportunity to develop a public-private partnership achieving far greater results than what can
organically occur in the marketplace
E. Developer Negotiation/Transaction Closing
Scope of Work
1.Provide GC and Consultant Procurement Management, Design Management, Construction Management
& Closeout services for the properties listed, as required by the City of Cupertino.
G. Future Services
1.We will work with City officials to develop an
RFP for Architectural Services that is tailored to
meet the Phase 1 Architectural needs. For
purposes of our scope, we have included
potential activities:
1.Architect Procurement:
2.We will leverage our industry
connections to engage potential
Architectural firms with similar industry
experience for City governments
3.Develop a Scope of Services for City
review and confirmation
4.Develop Evaluation Criteria for City
review and confirmation
5.Receive and level proposals
6.Facilitate interviews with Architect
finalists
7.Recommend award of contract
8.Negotiate form of agreement with City
and Architect’s legal counsel
2.Architect Management:
1.Oversee Architect during all Phases
F. Architect Procurement and Management (Optional)
Fee Proposal
Time and Fee Schedule
The following timing and professional fees are required to complete the work scope:
Cumming’s standard billing practice is based on time and materials, in which invoices are submitted
monthly for hours expended on work performed the month prior. Utilizing this philosophy, we have
found that Cumming’s fee approach traditionally provides our clients with the most flexibility and
cost effectiveness, as costs are only incurred based on the current needs of the owner.
Phase Duration Proposed Fee
A – Go/No-Go Market Opportunity Assessment
Covering City Hall and Sports Center Sites
4 weeks $30,000
Phase A Reimbursables -$3,000
B - Scenario Programming
•Covering City Hall/Civic Center
•Other properties to be determined as needed
6 – 8 weeks $40,000*
Phase B Reimbursable -$3,000
Sub-total (Excluding Optional Work)$76,000
Market Opportunity for Additional Sites 4-5 weeks $48,000
C – Stakeholder Engagement (optional)TBD TBD
D – Implementation Strategies & Development Recruitment -$30,000 - $48,000**
E – Developer Negotiation / Transaction TBD $40,000-$85,000*
F – Architect Procurement (Optional)TBD TBD
G – Future Services (Optional)TBD TBD
Reimbursable expenses
Any reimbursable expenses incurred during Cumming’s performance of services, including, without
limitation, all costs for personnel, travel within twenty-five (25) miles of the City’s geographic limits, per
diem expenses, printing and/or shipping of deliverables will be billed at actual costs with 0% mark-up.
*Note: Fee in Phase 1 excludes Design Services subconsultant, typically $30,000-$40,000.
**Note: Fees will be specified prior to initiating steps 2 and 3
Our proposed fees are valid for thirty (30) days from the date of this proposal. The rates are subject to
change on a yearly basis starting on January 1, 2024.
SO_01 Cumming_TCG RE Strategy
Final Audit Report 2023-09-12
Created:2023-09-12
By:Julia Kinst (juliak@cupertino.org)
Status:Signed
Transaction ID:CBJCHBCAABAAbunOOKaHIVhQ0SnfUTrQauILYfkQMS1L
"SO_01 Cumming_TCG RE Strategy" History
Document created by Julia Kinst (juliak@cupertino.org)
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Agreement completed.
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