sr-012412-3o (2)Yo City Council Report
Santa Mouiea°
City Council Meeting: January 24, 2012
Agenda Item: 3-10
To: Mayor and City Council
From: Martin Pastucha, Director of Public Works
Subject: Guaranteed Maximum Price Amendment for Construction for Palisades
Garden Walk and Town Square Project
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a Guaranteed Maximum
Price amendment to Design -Build Contract No. 9395 (CCS) in an amount not to
exceed $47,014,773 (includes an approximate 5% contractor contingency, 10%
owner contingency and allowances) with W. E. O'Neil Construction Company, a
California -based company, for construction services for the Palisades Garden
Walk and Town Square. This will result in a new contract in the amount of
$47,090,523.
2. Appropriate the budget increases and authorize the budget changes as outlined
in the Financial Impacts and Budget Actions section of this report.
3. Authorize the Director of Public Works to issue any necessary change orders to
complete additional work within budget authority.
Executive Summary
On June 28, 2011, Council approved a contract with W. E. O'Neil Construction
Company as the design - builder for the construction of the Palisades Garden Walk and
Town Square Project. The design -build team also includes James Corner Field
Operations as the landscape architect. Staff recommends an amendment to the
design -build contract with W. E. O'Neil Construction Company for construction services
of Palisades Garden Walk and Town Square for a Guaranteed Maximum Price of
$47,014,773. This amount includes $305,000 in added construction services and
$7,866,619 in owner contingency and contract allowances as outlined in the Discussion
section of this report. The revised total contract amount, including this Guaranteed
Maximum Price amendment, is $47,090,523, inclusive of the previously approved
preconstruction fee of $75,750.
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Background
On June 28, 2005, Council adopted an update to the 1993 Civic Center Specific Plan
(CCSP), setting forth planning policies and land use and development regulations for a
67 -acre area bounded by Pico Boulevard on the south, Fourth Street on the east,
Ocean Avenue on the west, and Colorado Avenue on the north.
An important element of the CCSP is the creation of new parks and open space. This
includes creating Palisades Garden Walk, a new six -acre park north of Olympic Drive,
west of Main Street, south of the Interstate -10 Freeway, and east of Ocean Avenue,
with an additional one -acre Town Square in front of City Hall that is oriented to civic and
community activities. Additionally, improvements to the surrounding streetscapes and
freeway capping are an integral part of the CCSP. During the CCSP community input
process, participants articulated their vision for Palisades Garden Walk, seeing this
project as possibly the last opportunity to create a new public open space in Santa
Monica that rivaled other renowned gathering places nationally and internationally.
On June 9, 2009, Council approved a list of Redevelopment Agency funding priorities
that included a partial allocation of $25,000,000 specifically for design and construction
of Palisades Garden Walk and Town Square and their surrounding streetscapes. In
addition, $2,000,000 for capping the 1 -10 Freeway at the adjacent McClure Tunnel was
approved. Subsequently, on June 23, 2009, Council adopted the FY2009 -10 Budget
including these capital improvement projects. On May 24, 2011, Council amended their
funding priorities and allocated the full development cost for the project, totaling
$46,098,276 (includes $2,000,000 for capping the 1 -10 Freeway).
On April 13, 2010, Council awarded a design contract to James Corner Field Operations
(JCFO) to design the park and town square described in the CCSP. A key factor in the
selection of JCFO was their creative design approach and commitment to engaging the
public in the planning and design of public open spaces.
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Following a comprehensive community engagement and design process, Council
approved the design development direction for the park on June 14, 2011, and for town
square on October 25, 2011; and directed staff to move forward with construction
documents.
On June 28, 2011, Council approved Design -Build Contract No. 9395 (CCS) with W. E.
O'Neil Construction Company (W. E. O'Neil) in the amount of $75,750, to provide
preconstruction services with a contract price not to exceed $39,000,000 for the entire
Palisades Garden Walk and Town Square Project. Included in that June 28th report to
Council was a mention of future needs for encumbrances of third party contracts, in an
amount not to exceed $7,000,000, for direct owner cost project related services
including testing /inspection and construction management services.
Discussion
Guaranteed Maximum Price for Construction — This design -build contract is for a
modified design -build delivery system, where the previously retained designer's
contract, JCFO, is assigned to the design - builder, W. E. O'Neil. W. E. O'Neil proposed
an initial fixed preconstruction fee of $75,750 (including contingency) for an expedited
preconstruction phase that included assessing the relevant programming documents,
tests, reports, and preliminary concepts in order to give the City a concise, accurate
Guaranteed Maximum Price (GMP) for the construction phase. W. E. O'Neil's bid also
locked in a percentage mark -up for the design and preconstruction GMP and for the
construction GMP amendment, thereby providing a fixed profit margin for the project
duration. Staff recommends a GMP amendment to the existing Design -Build Contract
No. 9395 (CCS) for construction of the Palisades Garden Walk and Town Square
Project in the amount of $38,843,154.
Added Scope — Staff is also recommending that Council increase the budget to Design -
Build Contract No. 9395 (CCS) with W. E. O'Neil by $305,000 for added services
including construction of the foundation for the Public Art piece in the park ($200,000)
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and tree relocation services ($105,000). Funds for these uses were previously
budgeted in separate accounts, to be performed by separate contractors. Upon further
assessment of the scope of work, staff has determined that it would be more effective to
have W. E. O'Neil do this work since they will be providing the lighting and surrounding
landscaping for the Public Art piece, as well as tree relocation services, as part of the
project.
City Project Cost — On August 10, 2010, by adopting Resolution Nos. 10519 (CCS) and
527 (RAS), the City Council and Redevelopment Agency authorized the execution of
that the Cooperation Agreement for Payment of Costs Associated with Certain RDA
Funded Capital Improvement and Affordable Housing Projects ( "Master Cooperation
Agreement" or "MCA ") pertaining to the construction and /or implementation of
numerous Capital Improvement Projects and Affordable Housing Projects (referenced
therein as "Tier One" and "Tier Two" improvements). Section II of the MCA obligates
the Agency to pay the City an amount equal to the cost for the City to carry out the Tier
One and Tier Two Capital Improvement Projects, including costs for planning, financing,
development, permitting, design, site testing, bidding, construction, and construction
management. Section IV of the MCA contains an equivalent provision for the Tier One
and Tier Two Affordable Housing Projects.
The Palisades Garden Walk and Town Square Project was listed as a Tier One Capital
Improvement Project. Staff has determined that the City's cost of implementing this
project during the construction phase is approximately seven percent (7 %) of the
project's total cost, which is $2,740,371 (7% of $38,843,154 plus $305,000 ), which
amount will be deemed as owner's contingency, to be drawn down by the City as
project costs are incurred during the course of construction. This cost was not included
in the original budget appropriation for the project. Therefore, staff proposes to add
these costs, along with the aforementioned contract adjustments, to the budget
appropriations for this project and include these costs in the City's design -build contract
for this project. Additionally, allowances will be added for testing and inspection
services, hazardous material monitoring and abatement, geotechnical services, utility
connections, and WiFi connections. These allowances will not exceed $5,126,248.
In summary, the total GMP amendment to Design -Build Contract No. 9395 (CCS) for
construction services with W. E. O'Neil is as follows:
GMP for construction: $ 38,843,154
Added scope for construction: $ 305,000
Added owner contingency (7 %) $ 2,740,371
Allowances $ 5,126,248
Previously approved precon fee: $ 75,750
TOTAL CONTRACT AMOUNT: $47,090,523
Upon Council approval of this GMP amendment, construction is scheduled to begin in
spring 2012 and be completed by the end of 2013.
Financial Impacts & Budget Actions
The GMP amendment to be awarded to W.E. O'Neil Construction Company is
$47,014,773 (including a 5% contractor contingency, a 10% total owner contingency,
and allowances), for a new contract total not to exceed $47,090,523. Funds totaling
$46,098,276 are available in the FY2011 -12 budget in account R01207117.589000,
Palisades Garden Walk and Town Square. Award of contract amendment requires an
additional appropriation of $687,247 to account R01207117.589000, as well as the
transfer of $200,000 from account R01008117.589000, Percent for Arts, and the
transfer of $105,000 from account R01095517.589000, Community Forest Renewal, to
the Palisades Garden Walk and Town Square account to fund the City's cost of
implementing this project during the construction phase.
Prepared by: Jean Bellman, Architect
Approved:
Forwarded to Council:
A
Reference Amended
Contract No. 9395 (CCS).