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4\ CITY OF RIVERSIDE REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor & Agency Members Date: Item No.: July 24,2001 3 Subject: Request Approval of a First and Second Amendmeut to Agreements for Professional Facilities Management Services with Inland Pacific Advisors for California Tower - Merged Downtown/Airport Project Area Background In March 1996, the Agency approved an Agreement for Professional Management Services with Inland Pacific Advisors (IP A) for routine management services, including tenant and financial management of California Tower, through March 31, 1998. At the time the Agreement was executed, the State of California had an option to take over management of California Tower as of April I, 1998. However, the State of California informed Agency staff that they would be exercising their option to manage California Tower, with the exception of the ground floor and Suite 800, effective July I, 1998. Therefore, in March 1998, the Agency authorized an amendment to the Agreement with IP A to continue providing management services for these facilities under the existing contract, through June 30, 1998. Then, in August 1998, the Agency entered into two separate Agreements with IP A to continue management services of California Tower. The first Agreement was for management of the ground floor and Suite 800, and the second Agreement for management of the Annex, both commencing on July I, 1998 through June 30, 2000. On September 8, 1998, the Agency authorized an Amendment to the Agreement for management services of the ground floor and Suite 800. The Amendment was to increase the scope of the agreement to include supervision of the retail food court and increase the monthly fee. Subsequent to the June 25, 2001 Development Committee, clarification was made regarding the broker's commission, wherein IP A has agreed to take a 50 percent commission reduction on lease extensions; however IP A will continue to earn a full commission on new tenants. Additionally, IP A will share the commission when another broker is involved. S1affis recommending the approval of the aforementioned changes, which have been incorporated into the attached agreements. Furthermore, staff is recommending that both agreements be extended for a two-year period, commencing July I, 2000 through June 30, 2002. Finally, it should be noted that the management fees will remain the same for the ground floor and Suite 800 at $2,600 per month ($31 ,200/year) and the Annex at $350 per month ($4,200/year) for a total of $35,400. Fiscal Impact Funds are available for the management services in the California Tower Professional Services Account No. 2830831-421000, which has an available balance of approximately $260,000. Committee Action Staff presented this item to the Development Committee on June 25, 2001. Two Committee membe~s we~ present and concurred in the suggested recommendation and then moved this item forward for conSideration by the Agency Board. 3-1