SR-904-006 (2)
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J City of
Santa Monica"
City Council Report
City Council Meeting: March 13, 2007
Agenda Item: 8-B
To:
Mayor and City Council
From:
Gordon Anderson, Assistant City Manager
Subject:
Professional Services Agreement with Natoma Architects, Inc. for a
Temporary Office Building East of City Hall
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a professional services agreement with Natoma Architects, Inc. in an amount
not to exceed $75,000 for preliminary design services for a temporary office building
east of City Hall. With this agreement, the total amount authorized for these services
would be $130,000.
Executive Summary
On February 13, staff presented a report to Council (attached) that proposed to develop
a temporary building that would provide more efficient customer service by providing
additional office space in the Civic Center area. During that meeting, Council expressed
concern related to authorizing the total amount needed for design services, given that it
was not yet determined whether there should be a project. Council also asked staff to
present the concept to Landmarks Commission and a public meeting to receive input on
the proposed project. A Purchase Order in the amount of $55,000 was previously
issued to identify the feasibility of proposing a temporary office project. This report
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presents an agreement amo~nt of $75,000 for a total amount not to exceed $130,000 to
define a project to assess necessary California Environmental Quality Act (CEQA)
analysis and to take the project through a preliminary public and commission process
before returning to Council to seek approval to proceed further. During this period staff
would also determine if an amendment to the Civic Center Specific Plan is required.
Also on February 13, staff provided a conservative analysis that indicated the payback
for the temporary building could be twenty years. During the discussion, it was
emphasized that the payback could be much shorter given the increase in office rents in
Santa Monica. Additionally, greater efficiencies could be achieved through the
integration of operations in City Hall, elimination of travel to offsite offices and improved
customer service.
This report also elaborates on the potential return on the investment of a temporary
building from a financial standpoint.
It should be noted, that if Council approves this item and the item related to the design
of space in the old jail portion of City Hall, the total amount authorized for Natoma
Architects, Inc. would be $215,000.
Discussion
As detailed, in the attached staff report from February 13, 2007, the City currently
leases approximately 46,000 square feet in eleven locations throughout the City for
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various departments and divisions at an annual cost of $1.4 million. This space houses
various functions that were moved from City Hall to meet the space needs of a growing
City.
The Civic Center Master Plan identified the need for a 40,000 square foot Municipal
Services Building to meet the current and long-term needs of the City. Funding for the
permanent building has not been identified and, once identified, the planning and
construction needs of a permanent building make its completion years away. In order to
address immediate needs and to improve customer service in the short term, staff
explored the possibility of constructing a temporary building at various sites in the Civic
Center including the former RAND property, the north side of City Hall (the site identified
in the Civic Center Master Plan) and to the east of City Hall. Due to construction
challenges associated with the sloped site north of City Hall and the desire to complete
the public park at the former RAND site, staff recommends proceeding with a temporary
building to the east of City Hall.
Previous Commission/Council Action
On February 13, 2007, staff presented Council with a recommendation to direct staff to
proceed with the development of a temporary office building east of City Hall at the site
of the former Police Department and to authorize an agreement with Natoma Architects,
Inc., in an amount of $885,500 for design services through completion of the building. At
that time, following Council discussion, staff indicated it would return with a smaller
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contract to allow for design services through the Landmarks Commission process, at
which time Council will have the opportunity to review the project.
Additional Analysis
At the February 13, 2007 meeting, Council discussed the discount rate of 5% with 3%
annual increase in lease payments to determine the approximate payback time.
However, as Council noted, variations in rates could affect the pay back over the life of
the building. Additionally, if the office market continues to be tight, lease rates could
continue to rapidly rise, resulting in a reduced payback time.
Contractor/Consultant Selection
On May 3, 2006, a Request for Proposals for design services was posted on the City
website. The RFP was requested by 13 firms, including some local firms. Six proposals
were submitted on May 18, 2006. The proposals were reviewed by a selection
committee including staff from Environmental & Public Works Management, Planning &
Community Development and City Manager's Office. The selection committee
unanimously recommends Natoma Architects, Inc. based on the firm's project
manager's extensive experience in design of temporary buildings, infill buildings, design
of buildings using unique and sustainable materials and municipal projects including
designing other public service buildings.
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Environmental Analysis
During the preliminary design process, as the scope of the project is defined, staff will
determine the necessary level of California Environmental Quality Act (CEQA) analysis
that needs to be completed prior to formal consideration of the project and will ensure
that proper actions and approvals are obtained in a timely manner.
Next Steps
If Council approves the agreement with Natoma Architects, Inc. the next steps will be:
1) Proceed with developing a detailed project scope and identify the necessary level
of environmental analysis.
2) Initiate a design process to produce preliminary concept plans and drawings that
can be used in a public process.
3) Present the preliminary conceptual plans to Landmarks Commission for
feedback.
4) Present the project to a stakeholder's group meeting open to the public.
5) Return to Council with conceptual design, feedback received and funding options.
BudaeUFinancial Impacts
Funds in the amount of $75,000 are available in account C010361.589000. The total
estimated cost of this project is $7,904,741. Currently $2,000,000 is budgeted for this
project. Funds to complete construction of the project will be included in the fiscal year
2007 -2008 Capital Improvement Program. Staff will return to Council with preliminary
design for review, direction and approval of additional funds required to implement
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design, construction documents and construction administration services. At that time,
Council could re-consider whether to move forward with the project, prior to expending
all funds awarded as part of this agreement.
Prepared by: Donald P Patterson, Assistant to the City Manager-Management Services
Forwarded to Council:
Gor n Anderson
As stant City Manager
Attachments:
February 13, 2007 Staff Report
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City Council Report
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City Council Meeting: December 5, 2 6_
Agenda Item: ~ <B-A-
To:
Mayor and City Council
From:
Gordon R. Anderson, Assistant City Manager
Subject:
Direction to Proceed with a Temporary Office Building east of City Hall and
Authorize the City Manager to Negotiate and Execute a Professional
Services Agreement with Natoma Architects, Inc.
Recommended Action
Staff recommends that the City Council:
1) direct staff to proceed with steps necessary to develop a temporary office building
east of City Hall and provide any initial design direction; and
2) authorize the City Manager to negotiate and execute a professional services
agreement with Natoma Architects, Inc. in an amount not to exceed $885,500 for
design services for the building and tenant improvements.
Executive Summary
City offices are currently in City Hall and at various leased space located throughout the
City. This decentralization results in operational inefficiency as well as creates decreased
level of customer service by having staff not located at City Hall. The compacted space
within City Hall also contributes to the challenge in customer service areas for those that
visit City Hall, as wells as having many employees in substandard work space. The
current first floor permit center is inadequate to provide good service to the high volume
of daily customers. Within City Hall, there are many locations where 2-3 staff work in
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areas that were originally designed to house one staff member and in some cases
hallways are used for work surfaces and storage. The lack of space also has prevented
the development of improved office space for the Mayor and Council to meet with the
public. Staff has evaluated different options to best meet the office space needs at City
Hall in the shortest time frame and cost effective approach, including construction of
temporary and permanent buildings of various sizes at the location of the former Police
Building and in the location identified for the City Services Building in the Civic Center
Specific Plan. Temporary buildings are used as an interim solution to provide services for
periods of five to fifteen years while permanent solutions are developed. The temporary
building being considered by staff could last for 20 years or more and can be
deconstructed and relocated. At this time, staff recommends the construction of a 16,000
square foot steel frame temporary building, with 5,500 square feet of remodeled City Hall
space as the most cost efficient option.
Following a competitive procedure, staff executed a $55,000 Purchase Order with
Natoma Architects, Inc. to prepare schematic designs of a temporary office building to
illustrate how this could function within the Civic Center area. City Council approval of the
proposed Professional Services Agreement in the amount of $885,500 is recommended
for design development, construction drawings and construction monitoring of the
temporary office building as well as for the adaptive reuse of any potentially vacated
portion of City Hall.
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The total estimated cost of this project is $7,904,741. Currently $2,000,000 is budgeted
for this project. The remainder of the funds will be considered as part of the fiscal year
2006-2007 Capital Improvement Program budget.
Discussion
The City currently leases approximately 46,000 square feet in eleven locations
throughout the City for various department and division offices at an annual cost in
excess of $1.4 million. The largest leased spaces are on Lincoln Boulevard (BBB and
City Clerk), Fourth Street (Finance Department), Main Street (Civil Engineering &
Architecture Division), Broadway (City TV, RCD, and ISO) and Cloverfield Boulevard
(Housing Division). Additional offsite office space exists at the Airport and at small spaces
throughout downtown. The scattered location of staff throughout the City is an inefficient
way to deliver services. The Civic Center Specific Plan addressed the need for staff to
be centrally located by identifying a 100,000 square foot City Services Building and on
June 28, 2005, Council adopted an updated Civic Center Specific Plan that identifies a
40,000 square foot City Services Building in the area north of City Hall.
Staff has analyzed the financial feasibility of funding a permanent 40,000 square foot
building, as identified, as well as several other alternatives to meet short and long term
needs. Staff also analyzed the cost of constructing temporary and permanent buildings of
various sizes to meet the short and long term needs of the City. The estimated cost
includes the building and all necessary furnishings and finishes to occupy the building.
Below is the comparison of cost of all alternatives staff explored:
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ANALYSIS OF TEMPORARY VS. PERMANENT BUILDING CONSTRUCTION
(ADDITIONAL CITY OFFICES IN CIVIC CENTER)
Temporary Construction
Permanent Construction
Remodeled Space*
Subterranean Parking**
Owner's Costs $770,000
FF&E $102 $1,938000
TOTAL COST: $7,048,000
.. Anticipated 5,500 square foot City Hall Remodel.
** Not required for temporary building, required for permanent.
Estimated
CostlS .Ft.
$240
$486
$200
Temporary Building Options
13,500 s. ft. 16,000 s. ft.
$3,240,000 $3,840,000
Permanent Building Options
40,000 s. ft. 60,000 s. ft.
$1,100,000
$1,100,000
$19,440,000
$1,100,000
$16,284,000
$2,777,500
$4,641,000
$44,242,500
$29,160,000
$1,100,000
$16,284,000
$2,920,500
$6681,000
$56,145,500
$770,000
$2,193,000
$7,903,000
An option to construct a new permanent building would require a much longer project
timeline (five to seven years for design and construction) and debt financing, either Lease
Revenue or General Obligation Bonds. At this time, staff recommends proceeding with
the 16,000 square foot temporary building due to the funding level needed and due to the
short term benefits of constructing a temporary structure. The building would include a
two story portion roughly along the footprint as the former Police building and a three
story portion to match the old jail wing (see attached site plan). It should be noted that
prior to the demolition of the former Police building, staff considered the adaptive reuse of
the building for staff office space prior to its demolition but found this prohibitive in terms
of cost and reuse possibilities, which would have necessitated seismic retrofitting,
accessibility upgrades and bringing the building up to current building codes, including
electrical and heating, ventilation and air conditioning. On December 16, 2003, Council
authorized its demolition due to the cost and constraints of the adaptive reuse.
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Temporary Building
Staff executed a $55,000 Purchase Order with Natoma Architects Inc. to develop a
conceptual drawing of a temporary office building behind City Hall and to analyze the
feasibility of this type of construction versus a permanent structure (Attachments 2-3). In
order to test the feasibility of the temporary building, staff considered what type of use
may be assigned to the new space. Development of the space presents an opportunity to
design and develop a one-stop center for development and permit services and to
implement additional recommendations of the Matrix Study, a report prepared in 2004
which identified improvements to the permitting, building and safety and inspection
processes in the Planning & Community Development Department. The proposed
temporary office building provides sufficient space to include counter space for all permit
and development functions, customer self-service and waiting areas and space for staff
supporting these functions, including all of Planning and Community Development.
A temporary office building in the location of the former Police building is recommended
as the most cost effective solution to meet the short term needs of the City because of its
versatility, relatively low cost and ease and timing of construction. The temporary building
would be a steel building system that is able to be assembled quickly and dismantled and
reused at another location at the end of its use. Since a temporary building has a useful
life of twenty or more years, the City would have ample time to identify the financing
mechanism and to design, approve and construct a permanent City Services building.
Other advantages to proceeding at this time include:
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. A temporary steel building system is environmentally sustainable In that its
components may be dismantled and reused at the end of its use.
· The centrally located office space at City Hall provides services more efficiently
and effectively, while being more accessible to the public.
· Coordination of the completion of the temporary office building with the City Hall
Seismic Retrofit project, scheduled for construction in 2007 and 2008, will facilitate
both projects by allowing larger portions of City Hall to be retrofitted at one time
while minimizing impact to staff and the public from the disruption of relocating
multiple times.
· Facilitate interdepartmental coordination of projects by bringing staff and
management closer together.
· Provide an opportunity to re-design some space inside City Hall, bringing space to
current industry standards for workspace.
· Eliminate some offsite leases, creating cost savings. Staff estimates approximately
12,500 square feet of offsite leases could be eliminated.
Primary disadvantages that Council should consider include:
· The funds could be used for other uses or reserved for financing the construction
of the permanent City Services Building identified in the Civic Center Specific Plan.
· Although a portion of the recently completed City Hall courtyard will be preserved,
an area roughly equal to where the grassy area is will be used as the site for this
building.
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Staff has completed a Net Present Value analysis for the completion of the
recommended building. Assuming elimination of 12,500 square feet of leased space, a
3% annual lease payment increase and a 5% present value discount rate, the costs are
as follows:
Estimated Net Present
Lease Value of Lease Construction Unrecovered
Years Payments Payments Cost Cost
10 Yrs 5,674,620 4,330,060 7,903,000 3,572,940
15 Yrs 9,206,462 6,202,128 7,903,000 1,700,872
20 Yrs 13,300,835 7,902,568 7,903,000 Breakeven
Commission Considerations
Because City Hall is a designated City Landmark, the Landmarks Commission will be
required to review and approve a Certificate of Appropriateness application for any
proposed exterior modifications or additions to the building. The proposed project
concept has been informally reviewed by the City Planning Division's Liaison to the
Landmarks Commission. One potential concern identified is related to the Landmarks
Commission's 2005 approval of the demolition of the former 1950s Police Station wing
addition to City Hall and the temporary courtyard landscaping plan. The Commission
expressed support for the project, in part, because it re-established the historic u-shaped
configuration of City Hall and the public courtyard area. The current proposal would again
alter these features of the City Hall facility.
Planning staffs informal review also included preliminary comments on the project
design. Based on this review, the schematic design was revised so that there is a clear
differentiation between the new building and the historic structure. The new building will
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be constructed of modern materials so as to not mimic the aesthetics of the historic
structure, be detailed so as to visually delineate the separation between the new building
and the historic structure, and will be a different height then the historic structure. The
Liaison also made suggestions that the new permanent exterior elevator and entry door
to the existing Jail area follow the same design guidelines. The new permanent elevator
and entry door to the existing Jail area are required to provide code required accessibility
for the new tenant of the converted Jail area. Upon approval to proceed with the
development of the building, staff will bring the project to the Landmarks Commission for
formal comments prior to further development of project plans.
Contractor/Consultant Selection
On May 3, 2006, a Request for Proposals for design services was posted on the City
website. The RFP was requested by 13 firms, including some local firms. Six proposals
were submitted on May 18, 2006. The proposals were reviewed by a selection committee
including staff from Environmental & Public Works Management, Planning & Community
Development and City Manager's Office. The selection committee unanimously
recommends Natoma Architects, Inc. based on the firm's project manager's extensive
experience in design of temporary buildings, infill buildings, design of buildings using
unique and sustainable materials, and experience with municipal projects including
designing other public service buildings.
Staff recommends that Council direct staff to proceed with the development of the 16,000
square foot temporary building and authorize the City Manager to negotiate and execute
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a pro.fessional services agreement with Natoma Architects Inc. in an amount not to
exceed $885,500 fer design services thrcugh co.nstructicn o.f the tempcrary building,
including design of all interior spaces, space planning, design of the old jail space and
design of selective areas of City Hall re-used as a result o.f this project.
BudoetlFinancial Impact
Funds in the amcunt cf $885,500 are available in account C010361.589000. The tctal
estimated Co.st of this project is $7,904,741. Currently $2,000,000 is budgeted for this
pro.ject. Funds to complete constructio.n of the project will be included in the fiscal year
2007 -2008 Capital Improvement Program. Staff will return to Council prior to. start of
construction. At that time, Council co.uld re-co.nsider whether to. move forward with the
project, prier to. expending all funds awarded as part cf this agreement.
Prepared by:
Donald Patterson, Assistant to the City Manager for Management Services
Forwarded to Council:
Gordo. R. Anderson
Assis'fant City Manager
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