2024-25 Keyser Marston Assoc (KMA) - Economic Consulting ServicesMEMORANDUM
DATE: 07-17-2024
Cu0"&V
CALIFORNIA
TO: Jon McMillen, City Manager
FROM: Doug Kinley, Management Analyst
RE: Keyser Marston Associates - Economic Consulting - Proposed hotel development FY 24/25
Please list the Contracting Party / Vendor Name, any change orders or amendments, and the type of services to be provided. Make
sure to list any related Project No. and Project Name.
Authority to execute this agreement is based upon:
❑ Approved by City Council on
❑✓ City Manager's signing authority provided under the City's Purchasing & Contracting Policy
[Resolution No. 2023-008] for budget expenditures of $50,000 or less.
❑ City Manager's signing authority provided under the City's Personnel Policy Section 3.2 for
temporary employment positions.
❑ Department Director's or Manager's signing authority provided under the City's Purchasing Policy
[Resolution No. 2023-0081 for budget expenditures of $15,000 and $5,000, respectively, or less.
Procurement Method (one must apply):
❑ Bid ❑ RFP ❑ RFQ ❑ 3 written informal bids
7 Sole Source ❑ Select Source ❑ Cooperative Procurement
Requesting department shall check and attach the items below as appropriate,
0 Agreement payment will be charged to Account No.: 101-1002-60103 Professional Services
0 Agreement term: Start Date 07/01/2024 End Date 06/30/2025
7 Amount of Agreement, Amendment, Change Order, etc.: $ 20,000
REMINDER: Signing authorities listed above are applicable on the aggregate Agreement amount, not individual
Amendments or Change Orders!
❑✓ Insurance certificates as required by the Agreement for Risk Manager approval
Approved by: Oscar Mojica Date: 7/19/2024
❑ Bonds (originals) as required by the Agreement (Performance, Payment, etc.)
❑ Conflict of Interest Form 700 Statement of Economic Interests from Consultant(s)
NOTE: Review the "Form 700 Disclosure for Consultants" guidance to determine if a Form 700 is required pursuant
FPPC regulation 18701(2)
❑
Business License No.
Expires:
Requisition for a Purchase Order has been prepared (Agreements over $5,000)
t(VQ0 �r�
GEM of the DESERT
CITY OF LA QUINTA
SHORT -FORM SERVICES AGREEMENT
($25,000 OR LESS)
1. PARTIES AND DATE. This Agreement is made and entered into this 1 st day of July, 2024, ("Effective
Date") by and between the City of La Quinta, a Municipal Corporation and Charter City organized under
the Constitution and laws of the State of California with its principal place of business at 78495 Calle
Tampico, La Quinta, CA ("City") and Keyser Marston Associates, Inc., a California Corporation with
its principal place of business at 777 S. Figueroa St, Suite 2555 Los Angeles, CA 90017 ("Vendor").
City and Vendor are sometimes individually referred to as "Party" and collectively as "Parties" in this
Agreement.
2. TERMS AND CONDITIONS. The Parties shall comply with the terms and conditions in the attached
Exhibit "A."
3. SCOPE AND SCHEDULE OF SERVICES. Vendor shall provide to City the services pursuant to the
date(s) and schedule(s) described in accordance with the schedule set forth in Exhibit "B."
4. TERM. The term of this Agreement shall be from July 1, 2024 to June 30, 2025, unless earlier
terminated as set forth in the attached Terms and Conditions. This Agreement may not extend beyond a
period of five (5) years, unless under the City's Fiscal Policies and Procedures this Agreement is exempt
from the five (5) year limitation.
5. COMPENSATION. Vendor shall receive compensation for services rendered under this Agreement
at the rates and schedule set forth in the attached Exhibit "C" but in no event shall Vendor's
compensation exceed Twenty Thousand Dollars ($20,000) per fiscal year (July 1 to June 30) without
written amendment.
6. FORCE MAJEURE. The time period specified for performance of the services rendered pursuant to
this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control
and without the fault or negligence of Vendor including, but not restricted to, acts of God or of the public
enemy, fires, earthquakes, floods, epidemic, quarantine restrictions, riots, strikes, freight embargoes, acts
of any governmental agency other than City, and unusually severe weather, if Vendor shall within ten (10)
days of the commencement of such delay notify the City in writing of the causes of the delay. The City
shall ascertain the facts and the extent of delay and extend the time for performing the Services for the
period of the forced delay when and if in their judgment such delay is justified, and the City's determination
shall be final and conclusive upon the parties to this Agreement. Extensions to time periods for
performance of services, which are determined by the City to be justified pursuant to this Section, shall not
entitle the Vendor to additional compensation unless City expressly agrees to an increase in writing.
7. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed
to be an original, and such counterparts shall constitute one and the same instrument.
8. INSURANCE. In accordance with Section 4 of Exhibit 'A" Vendor shall, at its expense, procure and
maintain for the duration of the Agreement such insurance policies as checked below and provide proof of
such insurance policies to the City. Vendor shall obtain policy endorsements on Commercial General
Liability Insurance that name Additional Insureds as follows: The City of La Quinta, its officers,
officials, employees and agents.
Commercial General Liability Insurance:
® $1,000,000 per occurrence/$2,000,000 aggregate OR
❑ $2,000,000 per occurrence/$4,000,000 aggregate
® Additional Insured Endorsement naming City of La Quinta
® Primary and Non -Contributory Endorsement
Automobile Liability:
® $1,000,000 combined single limit for bodily injury and property damage
❑ Auto Liability Additional Insured
Workers' Compensation:
® Statutory Limits / Employer's Liability $1,000,000 per accident or disease
® Workers' Compensation Endorsement with Waiver of Subrogation
Professional Liability (Errors and Omissions):
® Errors and Omissions liability insurance with a limit of not less than $1,000,000 per claim
4
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the
day and year first above written.
CITY OF LA QUINTA
a California Municipal Corporation,
and Charter City
GILBERT VILLALPANDO
DIRECTOR, BUSINESS UNIT
Required for over $5,000:
JON
ER
ATTEST:
MONIKA RADEVA, bfy Clerk
City of La Quinta, California
APPROVED AS TO FORM:
WILLIAM H. IHRKE, City Attorney
City of La Quinta, California
KEYSER MARSTON ASSOCIATES, INC.
a California Corporation
3
KEVIN ENGSTROM
VICE PRESIDENT
JLJOE ROMEY
ASSISTANT SECRETARY
EXHIBIT "A"
TERMS AND CONDITIONS
1. Compensation. Vendor shall be paid on a time and
materials or lump sum basis, as may be set forth in
Exhibit "C", within 30 days of completion of the Work
and approval by the City.
2. Compliance with Law. Vendor shall comply with all
applicable laws and regulations of the federal, state
and local government. Vendor shall assist the City, as
requested, in obtaining and maintaining all permits
required of Vendor by Federal, State and local
regulatory agencies. Vendor is responsible for all costs
of clean up and/or removal of hazardous and toxic
substances spilled as a result of his or her Work. In
explanation of the forgoing and not by way of limitation,
Vendor shall comply with any Federal, State, and local
laws, regulations, orders, and guidelines related to the
work provided by the Vendor during the COVID-19
state of emergency declared by the Governor of
California and City of La Quinta. Such Federal, State,
and local laws, regulations, orders, and guidelines
include but are not limited to: Executive Orders from
the Governor of California and orders and guidance
issued from the California Department of Public Health
(DPH); Orders from the Riverside County Public Health
Officer; and Emergency Resolutions and Executive
Orders from the City Council and City Manager,
respectively, for the City of La Quinta.
3. Standard of Care. The Vendor shall perform the
Work in accordance with generally accepted
professional practices and principles and in a manner
consistent with the level of care and skill ordinarily
exercised by members of the profession practicing
under similar conditions.
4. Insurance. The Vendor shall take out and maintain,
during the performance of all work under this
Agreement: A. Commercial General Liability Insurance
in the amounts specified in Section 8 of the Agreement
for bodily injury, personal injury and property damage,
at least as broad as Insurance Services Office
Commercial General Liability coverage (Occurrence
Form CG 0001), and if no amount is selected in Section
8 of the Agreement, the amounts shall be $1,000,000
per occurrence/$2,000,000 aggregate; B. Automobile
Liability Insurance for bodily injury and property
damage including coverage for owned, non -owned and
hired vehicles, of at least $1,000,000 per accident for
bodily injury and property damage, at least as broad as
Insurance Services Office Form Number CA 0001 (ed.
6/92) covering automobile liability, Code 1 (any auto);
C. Workers' Compensation in compliance with
applicable statutory requirements and Employer's
Liability Coverage of at least $1,000,000 per accident
or disease. Vendor shall also submit to City a waiver of
A-1
subrogation endorsement in favor of city, and D.
Professional Liability (Errors and Omissions) coverage,
if checked in section 6 of the Agreement, with a limit
not less than $1,000,000 per claim and which shall be
endorsed to include contractual liability. Insurance
carriers shall be authorized by the Department of
Insurance, State of California, to do business in
California and maintain an agent for process within the
state. Such insurance carrier shall have not less than
an "A"; "Class VII" according to the latest Best Key
Rating unless otherwise approved by the City.
5. Indemnification. The Vendor shall indemnify and
hold harmless the City, its Council, members of the
Council, agents and employees of the City, against any
and all claims, liabilities, (including liability related to
exposure to communicable diseases, illnesses, or
viruses), expenses or damages, including responsible
attorneys' fees, for injury or death of any person, or
damage to property, or interference with use of
property, or any claim of the Vendor or subcontractor
for wages or benefits which arise in connection with the
performance of this Agreement, except to the extent
caused or resulting from the active negligence or willful
misconduct of the City, its Council, members of the
Council, agents and employees of the City. The
foregoing indemnity includes, but is not limited to, the
cost of prosecuting or defending such action with legal
counsel acceptable to the City and the City's attorneys'
fees incurred in such an action.
6. Laws and Venue. This Agreement shall be
interpreted in accordance with the laws of the State of
California. If any action is brought to interpret or
enforce any term of this Agreement, the action shall be
brought in a state or federal court situated in the County
of Riverside, State of California.
7. Termination. The City may terminate the services
procured under this Agreement by giving 10 calendar
days written notice to Vendor. In such event, the City
shall be immediately given title and possession to any
original field notes, drawings and specifications, written
reports and other documents produced or developed
for the services. The City shall pay Vendor the
reasonable value of services completed prior to
termination. The City shall not be liable for any costs
other than the charges or portions thereof which are
specified herein. Vendor shall not be entitled to
payment for unperformed services, and shall not be
entitled to damages or compensation for termination of
work. Vendor may terminate its obligation to provide
services under this Agreement upon 30 calendar days'
written notice to the City only in the event of City's
failure to perform in accordance with the terms of this
Agreement through no fault of Vendor.
8. Agreement Terms. Nothing herein shall be
construed to give any rights or benefits to anyone other
than the City and the Vendor. The unenforceability,
invalidity or illegality of any provision(s) of this
Agreement shall not render the other provisions
unenforceable, invalid or illegal. Notice may be given
or delivered by depositing the same in any United
States Post Office, certified mail, return receipt
requested, postage prepaid, addressed to the parties
to the addresses set forth in the Agreement. Vendor
shall not assign, sublet, or transfer this Agreement or
any rights under or interest in this Agreement without
A-2
the written consent of the City, which may be withheld
for any reason. Vendor is retained as an independent
contractor and is not an employee of the City. No
employee or agent of Vendor shall become an
employee of the City. The individuals signing this
Agreement represent that they have the authority to
sign on behalf of the parties and bind the parties to this
Agreement. This is an integrated Agreement
representing the entire understanding of the parties as
to those matters contained herein, and supersedes and
cancels any prior oral or written understanding or
representations with respect to matters covered
hereunder. This Agreement may not be modified or
altered except in writing signed by both parties hereto.
EXHIBIT "B"
SCOPE AND SCHEDULE OF SERVICES
SEE ATTACHED
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EXHIBIT B - SCOPE OF SERVICES
KEYSER MARSTON ASSOCIATES
April 11, 2024
ADVISORS IN:
Real Estate Gilbert Villalpando, Director
Affordable Housing Business Unit and Housing Development
Economic Development
BERKELEY City of La Quinta
Debbie M. Kern 78495 Calle Tampico
David Doezema
La Quinta, CA 92253
LOS ANGELES
Kathleen H. Head
Kevin E. Engstrom
Julie L.Romey Dear Mr. Villalpando:
Tim R. Bretz
SAN DIEGO Pursuant to your request, Keyser Marston Associates, Inc. (KMA) prepared the following
Paul C. Marra scope of services for the City of La Quinta (City). As KMA understands the situation, the
Linnie A. Gavino
City requires assistance evaluating the financial feasibility of a proposed hotel
EMERITUS
A. Jerry Keyser development. With this understanding, KMA is pleased to submit the following letter
Timothy C. Kelly proposal to the City. The proposal is organized as follows:
1. KMA's relevant qualifications are summarized;
2. The proposed scope of services is described; and
3. The proposed budget for the engagement is provided.
STATEMENT OF QUALIFICATIONS
Description of the Firm
KMA is a full-service real estate, financial, and economic consulting firm specializing in
real estate advisory and evaluation services. KMA is a privately held corporation that was
founded in 1973. We have one of the largest real estate advisory practices on the West
Coast, and the majority of KMA assignments involve long-standing client relationships.
KMA's services fall within the following general areas:
• Real Estate Evaluation and Transaction Services
777 SOUTH FIGUEROA STREET, SUITE 2555 LOS ANGELES, CALIFORNIA 90017 PHONE 213.622.8095
WWW.KEYSERMARSTON.COM
2404006: K MA: kee
99900.000.002
Gilbert Villalpando
City of La Quinta
• Strategic Planning and Economic Development Services
• Affordable Housing
• Valuation and Litigation Support
• Fiscal Impact Analyses
• Infrastructure and Public Finance Structuring
April 11, 2024
Page 2
The increased complexities of real estate transactions demand a strong technical understanding
of market opportunities and constraints. KMA can provide services that are grounded in a
fundamental understanding of the Orange County real estate market, valuations and
investment financing. Unique characteristics possessed by KMA include:
Experience
KMA has over 40 years of experience assisting clients throughout the West in real estate
market and evaluation services; negotiation services; structuring public/private transactions;
and project implementation services.
Cost Effectiveness
KMA can be cost effective for our clients given our ability to provide comprehensive services
relating to market and financial feasibility, economic analysis, direct implementation
experience and public finance without the need for multiple consultants.
Commitment
KMA offers the commitment of principals who are recognized leaders in real estate advisory
services throughout California. This philosophy and structure provides clients with maximum
direct contact with the firm's principals.
SCOPE OF WORK
KMA will review information provided by the Developer to determine whether the proposed
Project is feasible and estimate the potential City revenues generated by its development. To
evaluate the Project, KMA will undertake the following two tasks.
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99900.000.002
Gilbert Villalpando April 11, 2024
City of La Quinta Page 3
Task I — Project Feasibility Analysis
For this task, KMA will evaluate the feasibility of the proposed project and identify potential
mechanisms to promote viability.
• Review information supplied by the Developer and identify data required to prepare the
Project Feasibility Analysis.
• Work with the Developer to confirm our understanding of the Project.
• Review and evaluate the Project, including:
o Project quality and target market including brand and rating.
o Mix of rooms, event/conference space and parking for the Project.
o Developer supplied market data and independent research of market demand.
o Developer operating projections and development cost assumptions.
• Prepare a Project pro forma and financial analysis of the Project including:
o Review of Project costs compared to similar developments.
o Evaluate Project revenue projections.
o Evaluate Project operating parameters.
o Identify appropriate return requirements.
o Estimate Project feasibility.
• Prepare static and dynamic (25 years) transient occupancy tax projections.
• Identify City controlled mechanisms to promote Project viability.
• Summarize findings in a brief memorandum and series of tables.
Task II — As -Needed Negotiations Support
Based on the findings of the Task I evaluation, KMA will be available to answer questions and
provide updates to the analysis on an as needed basis. These services could include:
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99900.000.002
Gilbert Villalpando April 11, 2024
City of La Quinta Page 4
• Attend additional meetings with the City's negotiating team on an as -needed basis.
• Provide input on negotiating strategies to the City team.
• Prepare financial scenarios illustrating the ramifications of proposed agreement terms.
As part of this effort, KMA can prepare multiple scenarios, demonstrating the impact of
alternative market conditions and/or deal points.
• Assist the City's negotiating team to prepare and review the proposed agreement, and
provide appropriate language in support of the agreement.
INFORMATION NEEDS
To conduct this analysis, KMA will require the following information from the Developer:
• Site plan and elevations
• Third -party market study conducted for the project and any other related market
information.
• Detailed line -item construction budget, including a breakdown of direct, indirect and
financing costs.
• Operating projections including revenues disaggregated by department and a
breakdown of the distributed, undistributed and fixed operating expenses.
• Target returns and evaluation of Project feasibility. If a gap exists, a detailed proposal
for City assistance.
BUDGET & SCHEDULE
The total project budget is $20,000, with the budget by task summarized below:
• Task I - $15,000
• Task II - $5,000
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99900.000.002
Gilbert Villalpando
City of La Quinta
April 11, 2024
Page 5
The analysis will be billed based on the billing rate schedule shown below. The Task I budget
does not assume any in-person meetings; however, KMA will be available for two virtual
meetings to kick off the project and discuss the KMA findings. Any additional meetings would
be included in the Task II services. The Task I work effort can be completed in six weeks from
authorization to proceed and receipt of requested information from the Developer.
Billing Rate Schedule
Chairman, President, Managing Principals
$305.00
Senior Principals
$295.00
Principals
$275.00
Managers
$245.00
Senior Associates
$205.00
Associates
$185.00
Senior Analysts
$170.00
Analysts
$145.00
Technical Staff
$105.00
Administrative Staff
$90.00
The City will be billed monthly based on time expended and costs incurred. KMA appreciates
the opportunity to submit this proposal. Please do not hesitate to contact us if this proposal
can be modified to better meet your needs.
Sincerely,
Keyser Marston Associates, Inc.
Kevin Engstrom
Senior Principal
2404006: KM A: kee
99900.000.002
EXHIBIT "C
COMPENSATION FOR SERVICES
101-1002-60103 Professional Services: Not -To -Exceed $20,000 FY 24/25
C-1