SR 11-22-2016 3C
Ci ty Council
Report
City Council Meeting : November 22, 2016
Agenda It em: 3.C
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To: Mayor and City Council
From: Susan Cline, Director , Public Works, Airport
Subject: Approval of Third Modification to Agreement with Aeroplex Group Partners,
LLC. for Santa Monica Airport Management
Recommended Action
Staff recommends that the City C ouncil:
1. Authorize the City Manager to negotiate and execute a third modification to
P rofessional S ervices A greement No. 10262 (CCS) in the amount of $223,025
with Aeroplex Group Partners, LLC (“Aeroplex”), a California -based corporation,
to provide add itional property management and consulting services for the Santa
Monica Air port. This will result in a two -year amended agreement expiring on
June 30, 2017 , in the amount of $844,115 , including a 10% contingency with a
one -year option to renew in the amou nt of $433,900 , including a 10%
contingency in FY 2017 -18 , at the sole discretion of the City for a total
contractual amount not to exceed $1,278,015 , with future year funding contingent
on Council budget appro val; and
2. Authorize budget changes as outlin ed in the Financial Impacts & Budget Actions
section of the report.
Executive Summary
The City currently contracts with Aeroplex to provide assistance to City staff with
commercial real estate leasing, property management and consulting services for
aviat ion properties at Santa Monica Airport as well as City owned properties at 3100
Donald Douglas Loop North. Staff recommends that Council approve a third
modification in the amount of $223,025 to increase the amended agreement expiring on
June 30, 2017 to $844,115 with a one -year option to renew in the amount of $433,900
in FY 2017 -18 at the sole discretion of the City for a total not to exceed amount of
$1,278,015 with future year funding contingent on Council budget approval. The
modification is requested for Aeroplex to also assume responsibility for minor repairs
and maintenance of the City owned properties , using its own employee and contracted
resources; and to assist the City in developing a business plan for a City owned and
operated Fixed Based Opera tion (FBO) at Santa Monica Airport (SMO).
Background
On March 24, 2015 (Attachment A), Council directed staff to contract for real estate
brokerage services and property management firms to assist C ity staff with commercial
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real estate leasing and prop erty management services for City -owned properties at the
Santa Monica Airport. On July 13, 2015, the City entered into Professional Services
Agreement No. 3022 (CCS) with Aeroplex for an amount not to exceed $79,990 to
provide assistance to City staff in negotiating leases for City -owned properties located
at Santa Monica Airport, including brokerage services for vacancies that might arise
within the contract period, and to provide property management and consulting services
for those properties.
Due to t he acquisition of additional properties that required property management
services, o n March 1, 2016, (Attachment B) Council approved a first modification to the
Agreement increasing the amount to $404,990 for year one with two one -year options to
renew in the amount of $325,000 in FY 2016 -17 and $325,000 in FY 2017 -18 at the
sole discretion of the City for a total amount not to exceed $1,054,990 with future year
funding contingent on Council budget approval.
On Sept 26, 2016, under his authority , the Cit y Manager approved a second
modification to Agreement No. 10262 (CCS), increasing the minimum monthly property
management fee paid to Aeroplex from $4,000 to $15,000. The modification did not
require additional funds, and had no budget ary impact .
On Aug ust 23, 2016 (Attachment C), Council a dopted a policy for establishing exclusive
public proprietary Fixed Based Operation (FBO) services with City proprietor services
and direct ed the City Manager to implement all steps necessary or advisable to
implement that policy. Aeroplex ’s professional expertise would expedite the process of
establishing the City’s FBO.
Discussion
Although City Council voted to close the Santa Monica Airport by June 2018 or as soon
as legally feasible, the City will continue to opera te its City owned assets until that time
or the time it closes. Staff anticipates that the need for additional commercial property
management and consulting services for City -owned real estate assets in the current
and future fiscal years will exceed the current agreement amount of $1,054,990.
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Maintenance
On April 1, 2016, Aeroplex assumed property management responsibilities for the
facility located at 3100 Donald Douglas Loop North. The property consists of 18,941
square feet of office space, 145,560 square feet of hangars, and 306,000 square feet of
land area used for parking and aircraft ramp area. Since that time, maintenance and
repair needs have been addressed on a case -by -case basis using City resources at the
request of Aeroplex property manage ment staff.
This is a newly acquired facility . T he City’s Facilities Management Division does not
have the necessary resources to respond to the needs of the tenants in an expeditious
manner . Staff recommends contracting with Aeroplex for the minor mai ntenance needs
for this facility which would include , but are not limited to minor roof repairs, flooring,
painting, addressing mold issues, fire extinguisher annual maintenance, hangar door
repairs, pest control, minor plumbing repairs, and minor electric al service s . In order to
provide more efficient service to tenants, Aeroplex would assume responsibility for
these minor repairs and maintenance needs using their own employees and/or
contracted resources , consistent with City procurement policy and proce dures . The City
would continue to provide for regularly scheduled maintenance services, such as HVAC
system upkeep, and janitorial and landscape services, including capital expenditures ,
using funds already authorized in the FY2016 -17 Operating Budget. T he additional cost
of using Aeroplex services for this scope of work is estimated at $81,675 including a
10% contingency for FY 2016 -17 (prorated for nine months of service), and $108,900
including a 10% contingency for FY 2017 -18. The proposed costs are similar to the
City’s costs if the services were to be performed by City staff.
FBO Business Plan
Staff requested that Aeroplex provide consulting services to assist staff to prepare a
business plan for a City operated Fixed Based Operation (FBO) at Sant a Monica Airport
(SMO). This business plan at a minimum w ould include training manual s for
employees, equipment and fleet mix, all regulatory requirements and processes, and a
c ost analysis for the FBO .
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These additional consulting services would add $32,4 50 including a 10% contingency to
the current agreement in FY 20 16 -17.
Consultant Selection
On April 1, 2015, the City published a Request for Proposals for commercial real estate
firms to act as a leasing and property management agent. The RFP was poste d on the
City’s on -line bidding site, and notices were advertised in the Santa Monica Daily Press
in accordance with City Charter and Municipal Code provisions. One hundred and thirty
four (134) vendors were notified, and 21 vendors downloaded the RFP. Fiv e firms
(Aeroplex Group Partners, CBRE Group Inc., Corporate Realty Group, PAR
Commercial Brokerage, and Property Management Associates) responded. Responses
to the RFP were received and publicly opened on May 11, 2015.
The Airport Division of the Publi c Works Department and Housing and Economic
Development staff evaluated proposals based on the criteria in SMMC 2.24.073 and
listed in the RFP . Based on these criteria, s taff recommended Aeroplex as the best
qualified firm to assist City staff in negotiat ing Airport lease s at the Santa Monica
Airport, including broker and property management services for vacancies that might
arise within the contract period.
Financial Impacts and Budget Actions
The agreement modification to be awarded to Aeroplex is $223,025 for an amended
agreement total not to exceed $1,278,015.
Award of the agreement modification requires the following FY2016 -17 appropriations :
33431.555060 $32,450
33457.533260 $65,340
33457.533280 $16,335
Total $114,125
Future year funding is con tingent on Council budget approval.
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Prepared By: Kate Schlesinger, Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. March 24, 2015 St aff Report
B. March 01, 2016 Staff Report
C. August 23, 2016 Staff Report
Reference:
Agreement No. 10262
(CCS)