HomeMy WebLinkAboutE-16 Staff Report - Reject Bids 890 The Promenade Tenant Improvements ProjectCONSENT ITEM
E-16
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: NICO DE ANDA-SCAIA, DEPUTY CITY MANAGER
DATE: JULY 18, 2022
SUBJECT: REJECTION OF ALL BIDS AND PROPOSALS FOR TENANT IMPROVEMENTS
OF CITY-OWNED FACILITY AT 890 THE PROMENADE FOR LA METRO
SYSTEM SECURITY AND LAW ENFORCEMENT OFFICES (PROMENADE AT
CITRUS PROJECT)
BACKGROUND:
The City of Azusa currently owns a ±8,206 square foot vacant commercial facility located at 890 The
Promenade. On February 1, 2022, the City of Azusa entered into a Lease Agreement with the Los
Angeles County Metropolitan Transportation Authority (LA Metro) for use of the city-owned facility as
System Security and Law Enforcement Offices with an initial term of ten (10) years. In order to
facilitate the intended use, LA Metro requested the City build-to-suit the premises per a mutually agreed
upon space plan.
On January 18, 2022, the City Council approved project plans and specifications for the Promenade at
Citrus Project (CIP Project #62519A), and authorized staff to advertise this project to solicit for formal
bids and a Request for Proposals associated with tenant improvements.
On March 1, 2022, the City Clerk’s office opened and announced the results of nine (9) bids received for
construction services, and one (1) proposal received for the purchase and installation of furniture,
fixtures and equipment (FF&E) associated with the Project. Construction bids received had cost
proposals above the estimated and approved budget for the Project. LA Metro staff subsequently
requested a project budget increase within their CEO’s administrative signing authority.
On July 13, 2022, LA Metro provided the City a letter confirming that they did not have CEO approval
to increase the Project budget by the necessary amount to cover cost increases, and directed the City to
rebid the Project.
The proposed action rejects all bids and proposals for the Project. Staff will reconvene with LA Metro to
reconfigure and confirm the desired scope of work and establish a timeline to re-bid tenant
improvements and purchase and installation of FF&E.
APPROVED
CITY COUNCIL
7/18/2022
Promenade at Citrus Project – Rejection of Bids
July 18, 2022
Page 2
RECOMMENDATIONS:
Staff recommends the City Council take the following actions:
1) Reject all bids for tenant improvement construction services for the Promenade at Citrus Project
(CIP Project #62519A); and
2) Reject all proposals for purchase and installation of furniture, fixtures and equipment for the
Promenade at Citrus Project (CIP Project #62519A).
ANALYSIS:
The total estimated costs for this project were $3,111,498 for tenant improvements, including labor,
materials, furniture, fixtures and equipment (FF&E), associated professional service costs, fees, and
built-in contingencies. The City of Azusa and LA Metro subsequently approved a project budget of this
amount in January, 2022, with both the City of Azusa and LA Metro agreeing to contribute toward costs
of the Project. Per the Lease Agreement, the City’s total [Landlord] contribution to project costs is
capped at $30/sf, for a total of $246,180 from the General Fund. Additionally, LA Metro is responsible
for any leasehold improvement costs that exceed the Landlord’s contribution limit. Over the long term,
the City will receive lease revenues of approximately $1,577,521 over the first 10 years of tenancy.
Following the pandemic and other major events impacting the U.S. and world economies, this year has
seen particular impacts associated with heightened inflation, demand, and economic shifts in the prices
of goods and services. Despite accounting for higher-than-usual price fluctuations, bids received
exceeded both agencies’ overall cost estimates for the Project. The lowest construction bid received was
$370,740 above tenant improvement hard cost estimates, and together with recalculated increases to
project contingencies, raised the Project’s total estimated budget by $491,303.
Per the Lease Agreement, the City may not authorize a budget increase nor award bid/proposal contracts
without LA Metro concurrence. Since the City does not yet have LA Metro approval and the received
bids will have expired, staff recommends the City reject all bids and proposals at this time. Staff will
reconvene with LA Metro to confirm desired scope of work and establish a timeline to re-bid tenant
improvements and purchase and installation of FF&E.
Sealed bids and proposals were received and publicly opened on March 1, 2022. The results are
tabulated below:
Table 1 – Construction Bid Results
Bidders Bid Amount CWS Systems, Inc. $2,595,000
Golden Gate Construction $2,733,824
Harik Construction, Inc. $2,747,000
Kazoni Inc. $2,833,769
IPI Construction $2,845,653
Edra Construction Corp. $2,901,033
MIK Construction, Inc. $3,035,899
Reyes Electrical Contractor $3,199,000
MCEC, Inc. $3,286,000
Promenade at Citrus Project – Rejection of Bids
July 18, 2022
Page 3
The lowest, responsive construction bid was submitted by CWS Systems, Inc. The recommended action
rejects all bid.
Table 2 – RFP Results for Purchase and Installation of FF&E
Company Bid Amount
M3 Office Inc. $219,640.77
The only responsive bid proposal for purchase and installation of FF&E was submitted by M3 Office,
Inc. The recommended action rejects this proposal.
FISCAL IMPACT:
There is no fiscal impact to the City for rejecting all bids and proposals at this time. By re-bidding the
Project in the future, construction and material costs may likely change from their initial bid amounts – a
cost that will ultimately be borne by LA Metro per the Lease Agreement. Additionally, project delays
equate to a delayed tenancy of the facility and rental revenues to the City, however Lease terms remain
unaffected with the initial 10-year lease term commencing upon Landlord’s substantial completion of
leasehold improvements. Due to these unforeseen delays, the City’s Fiscal Year 2022-23 budget
revenues shall be adjusted to account these changes.
Prepared by: Fiscal Impact Review by:
Nico De Anda-Scaia Talika M. Johnson
Deputy City Manager Director of Administrative Services
Reviewed and Approved by:
Sergio Gonzalez
City Manager