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12-11-2018 CC Rpt 18 COUNCIL AGENDA STAFF REPORT Chino !hi', TO: HONORABLE MAYOR AND CITY COUNCIL DATE: DECEMBER 11, 2018 MEMBERS FROM: CITY MANAGER ITEM NO: 18 SUBJECT:AMENDMENT NO. 1 TO AGREEMENT A2018-009 WITH CBRE, INC. RECOMMENDATION: Authorize the execution of Amendment No. 1 to Agreement No. A2018-009 with CBRE, Inc. to increase the not-to-exceed amount of $24,500 by $6,000 for a revised total of $30,500. BACKGROUND/ANALYSIS: On January 19, 2018, the City Manager of the City of Chino Hills, authorized the execution of an agreement with CBRE, Inc. to prepare a Hotel Market Impact Study for the Rincon project in the amount of $24,500. Eaton Lane Associates, LLC (the Applicant), proposed to modify the previously approved site plan to include a second 70,000-square foot, 119-room hotel (Holiday Inn Express). Staff determined that a Hotel Market Impact Study would be required as part of the review of the proposed modification. On November 6, 2018, staff presented the proposed Rincon modification to the Planning Commission. The Planning Commission requested additional analysis by CBRE, Inc. to consider additional hotels in nearby cities and to more clearly define the overall Chino Hills hotel market. The additional analysis resulted in a change to the scope of work and increased the not-to-exceed amount by $6,000 for a revised total of $30,500. ENVIRONMENTAL (CEQA) REVIEW: This action of approving is not a project within the meaning of the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.) Section 15378 and is therefore exempt from CEQA. It will not result in any direct or indirect physical change in the environment because it is only a preliminary action required in order to study the proposed project. FISCAL IMPACT: There is sufficient funding in the TDA Pass Thru Fund budget to cover the Fiscal Year 2018/19 cost of the CBRE, Inc. contract. Future contract costs will be budgeted for in the appropriate fiscal year. All costs for this contract will be reimbursed by the developer and there is no impact on the General Fund. 144/296 REVIEWED BY OTHERS: This item has been reviewed by Finance Director and City Clerk. Respectfully Submitted, Recommended By: _ A ill C-94/14 (01 C140 Konradt Bartlam Joann Lombardo City Manager Community Development Director Attachments Agreement Amendment 145/296 CITY OF CHINO HILLS AMENDMENT NO. 1 TO AGREEMENT NO. A2018-009 BETWEEN THE CITY OF CHINO HILLS AND CBRE. INC. THIS AMENDMENT NO. 1 to Agreement No. A2018-009 dated JANUARY 18, 2018, is entered into in the State of California by and between the CITY OF CHINO HILLS, a California general law municipal corporation, hereinafter called "City", and CBRE, INC. hereinafter called "Consultant." Amend Agreement No. A2018-009 as follows: 1 . Increase the total not-to-exceed amount from $24,500 to $30,500. 2. Add the "Additional Scope of Work" as Exhibit C. 3. Replace the original Exhibit B: Compensation with the attached Exhibit B: Compensation. All other provisions of the agreement remain in effect. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to Agreement No. A2018-009 to be executed on the day and year last written below: CITY OF CHINO HILLS CBRE, INC. Cynthia Moran (S jg<nbttre) Mayor vv ATTEST: (Printed name/Title) fi f 27 /7 ors Cheryl Balz (Date) City Clerk (Date) (Signature) APPROVED AS TO FORM: (Printed Name/Title) Mark D. Hensley (Date) City Attorney 146/296 EXHIBIT B COMPENSATION Compensation The fees for professional services will be based on the hourly billing rates of the personnel performing the assignment and the hours expended. The current hourly billing rates of CBREs personnel are as follows: Per Hour Managing Director $500 - $550 Director 350 - 450 Senior Consultant 300 - 350 Consultant 250 -- 300 The fees for the scope of the assignment, as outlined above, will be a total of $30,500 ($24,500 + $6,000). This lump sum cost is inclusive of any out-of-pocket expenses incurred in connection with the assignment. It should be noted that the fee quote presented herein includes the cost of one senior member of CBRE Hotels to attend one internal meeting with City staff and one public hearing. Additional meetings requested by the City will be billed at the abovementioned billing rates. Page I of I 147/296 EXHIBIT C ADDITIONAL SCOPE OF WORK COMMERCIAL REAL ESTATE SERVICES CBI:1E CBRE, Inc, Jeff Lugosi,MAI, CRE, FRCS, ISHC h 400 South Hope Street, 25 Floor Director Los Angeles, CA 90071 CBRE Hotels, Consulting +1 213 613 3375 Office J eff.l ugosi @c b re.com Sent Via Email: mhofflinger@chinohills.org www.cbrehotels.cam HARD COPIES TO FOLLOW November 14, 2018 Mr. Michael Hofflinger Senior Planner City of Chino Hills Community Development Department 14000 City Center Drive Chino Hills, California 91709 Dear Mr. Hofflinger: In light of recent developments and a request by members of the Planning Commission,we are pleased to submit this proposal for additional professional services in connection with a study of potential market demand, the preparation of statements of estimated annual operating results, and the feasibility of two proposed hotel developments to be located at"The Rincon at China Hills"generally bounded by Soquel Canyon Parkway, Pomona Rincon Road, and State Route 71, in Chino Hills, California. It should be noted that we provided you with a draft report of our initial findings on April 24, 2018 and that the primary purpose of this letter is expand the scope of our analysis. Based on comments and questions expressed by Commissioners of the City of Chino Hills at the recent November 6th Planning Commission, we are proposing to expand the scope of our original draft report to specifically study the impact of three additional hotel properties in Pomona that have either recently opened or are under construction. In doing so we will determine the likely level of competition that these three hotels will have on the local hotel market. As a part of our updated report, we will also more fully define and expound on our understanding of the local market and identify the level to which it is truly competitive with other municipalities in the general area. Based on our analysis we will provide an estimate of the impact that these new and planned hotels will have on the existing Chino Hills hotel market (as more fully defined in our prior report), if any. We will incorporate our current thoughts into our prior draft report and be prepared to answer any questions at an upcoming Planning Commission meeting. PROFESSIONAL FEES Our professional fees for such services will be based on the hourly billing rates of the personnel performing the assignment and the hours expended. The current hourly billing rates of our personnel are as follows: Page 1 of 2 148/296 November 14, 2018 Proposed Hotels,The Rincon at China Hills City of Chino Hills Page 2 Per Hour Managing Director $500 - $550 Director 350 - 450 Senior Consultant 300 - 350 Consultant 250 - 300 Our professional fees for the scope of the assignment, as outlined above, will be $6,000. This lump sum cost is inclusive of any out-of-pocket expenses incurred in connection with the assignment, It should be noted that the fee quote presented herein includes the cost of one senior member of CBRE Hotels to attend one internal meeting with City staff and one public hearing. Additional meetings requested by the City will be billed at the abovementioned billing rates. APPROVAL AND ACCEPTANCE If the foregoing correctly states the nature of the work you wish undertaken at this time, and arrangements are satisfactory, please sign a copy of this proposal and return it to us, as our authorization for the assignment. If, on the other hand, you have any questions, please do not hesitate to call on us. We appreciate having the opportunity to submit this proposal and look forward to working with you and your associates on this most interesting assignment. Sincerely, CBRE Hotels, Consulting APPROVED AND ACCEPTED: ;a2:41-7"14' Signed By Jeff Lugosi, MAI, CRE, FRICS, ISHC Managing Director Printed Name Title Date Page 2 of 2 149/296