112-0109-002 Meeting of March 3, 2009
February 19, 2009
TO: Agency Commissioners
FROM: Fred Blackwell, Executive Director
SUBJECT: Intention to Issue a Request for Qualifications for Property Management Services for Yerba Buena Gardens; Yerba Buena Center Approved Redevelopment Project Area D-1
PURPOSE OF INFORMATION
To advise the Commission of staff’s intention to issue a Request for Qualifications (“RFQ”) seeking a Property Management Services Contractor (“Contractor”) for Yerba Buena Gardens in the Yerba Buena Center Approved Redevelopment Project Area D-1 (“Project Area). A copy of the RFQ is attached.
The Project Area and Yerba Buena Gardens
The Project Area is composed of approximately 87 acres in the South of Market area extending from Market Street to the James Lick Freeway (Interstate 80). More than $2 billion in private capital and $500 million in public funds have been invested in the Project Area since its inception, resulting in the development of 2,100 housing units, 3.7 million square feet of office space, 2,200 hotel rooms, a 63,000-square-foot community college, 1.2 million square feet of convention facilities, 300,000 square feet of cultural facilities, and ten acres of open space.
Yerba Buena Gardens (the “Gardens”), located within the three central blocks of the Project Area, contains nearly all of the public open space and many of the cultural facilities in the neighborhood, all in an urban park-like setting. The Gardens include cafes, fountains, performance venues, multiple children’s activities, artworks, and many other attractions. The Agency has made a substantial investment of public funds in the Gardens, which opened in the fall of 1993. The Gardens are a very popular public gathering place and serve a variety of functions that benefit the South of Market community and the City and County of San Francisco (“City”).
Current Gardens Management
In August 1993, the Commission authorized a three-year Gardens Management Contract with KTB Realty Partners, Inc. (KTB) for property management, maintenance, operations, and security services for the Gardens. The contract permitted extensions of the initial term provided that KTB’s performance continued at a high level of professional management. Accordingly, the contract was extended three times in 1996, 1999 and 2002. A new RFQ process was undertaken in 2003. After extensive outreach, the Agency received one Statement of Qualifications from KTB, which was complete and responsive. The Commission authorized a new contract with KTB, which subsequently became MJM Management Group in 2004. As provided in the RFQ, the MJM contract has been extended twice. It will expire on June 30, 2009. Therefore, staff has prepared a new RFQ for those services.
The Proposed RFQ
The RFQ for Property Management Services seeks statements of qualifications from experienced professional property management firms, together with appropriate subcontractors, to provide property management, landscape maintenance, janitorial, general maintenance, security, and other services related to the operations of the Gardens. Contracted services would be reimbursed at cost, together with a fixed management fee. Historically, lease revenues generated from the Yerba Buena Gardens project have been sufficient to fund the entire cost of the management contract. Contracting teams responding to the RFQ must reflect a commitment and ability to successfully adhere to Agency policies regarding nondiscrimination in contracts and benefits, minimum compensation, and health care accountability.
The Agency plans to issue the RFQ on March 9, 2009, with a submittal date of April 8, 2009. The RFQ will be advertised on the Agency’s website, the City’s “Bids and Contracts” weekly newsletter and website, and local publications reaching San Francisco’s many diverse populations. Additionally, RFQ announcements will be mailed to property management firms registered as Small Business Enterprises with both the Agency and the City. Staff will review the RFQ responses and anticipates recommending a contracting team and new Personal Services Contract before the end of the term of the current contract.
Proposed Personal Services Contract Term
A complex, multi-faceted property management responsibility of the magnitude of the Gardens requires overall continuous, uninterrupted operations. With over 1.5 million visitors per year, Gardens management is a 24-hour-a-day, seven-day-a-week undertaking. It takes approximately 40 to 50 workers/employees per day to manage and maintain the Gardens and associated facilities in its first-class condition and to provide appropriate security. Continual oversight and management of the Gardens long-term capital repair and replacement is a critical part of the property manager’s scope of services. Additionally, the property manager is responsible for overseeing and coordinating (together with Yerba Buena Arts and Events) approximately 200 annual events at the Gardens and maintaining cooperative relationships with adjacent users.
The Agency’s Purchasing Policy states “on-going services or multi-year contracts shall not normally exceed a three-year period without the purchasing process occurring again.” However, in similarly complex, multi-faceted developments that require continuous long-term, high-quality management, contract terms longer than three years are customary, because problematic transitions and long learning curves are often associated with frequent management turnover and can be detrimental to the operations of complex sites. As noted, prior Agency Personal Services Contracts have been extended to full terms of eleven years and six years.
Therefore, consistent with prior practice and based on the complexity of the Gardens’ overall management, the scope and magnitude of the project, its economic benefit to the area, the Agency’s considerable investment of public funds, and the benefits of consistent, high quality operations, staff recommends that the Personal Services Contract term with the selected contractor be for an initial term of three years, with an Agency option to extend the contract for two additional three-year terms, for a total contract term not to exceed nine years.
Originated by Catherine Pickering, Assistant Project Manager
Bc: Amy Lee
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