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W A T E R E N E R G Y I L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L I T I E 5 BOARD OF PUBLIC UTILITIES DATE: DECEMBER 9,2019 ITEM NO: 8 SUBJECT: FIRST AMENDMENT TO PROPERTY MANAGEMENT AGREEMENT WITH G&E REAL ESTATE MANAGEMENT SERVICES, INC., dba NEWMARK KNIGHT FRANK FOR MISSION SQUARE PROPERTY LOCATED AT 3750 UNIVERSITY AVENUE FOR AMENDED COMPENSATION AND PROPERTY MANAGEMENT FEE ISSUE: Recommend that the City Council approve a First Amendment to Property Management Agreement with G&E Real Estate Management Services, Inc., dba Newmark Knight Frank, for property management services, amending the compensation and property management fee to include additional compensation to Newmark Knight Frank not to exceed 5% of the total project cost for performing project management oversight services for the Mission Square Office Building located at 3750 University Avenue. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1 . Approve the First Amendment to the Property Management Agreement with G&E Real Estate Management Services, Inc., dba Newmark Knight Frank, for property management services, amending the compensation and property management fee to include additional compensation to Newmark Knight Frank not to exceed 5% of the total project cost for performing project management oversight services for the Mission Square Office Building located at 3750 University Avenue; 2. Authorize the City Manager, or designee, to execute the First Amendment to the Property Management Agreement, including making minor, non -substantive changes, and to sign all documents and instruments necessary to complete the transaction; and 3. Authorize the City Manager, or designee, to negotiate the project management fee for projects in excess of $1,000,000 in an amount less than 3% of the total project cost pursuant to the terms and conditions outline in the First Amendment. BACKGROUND: On October 13, 2015, the City acquired the Mission Square Office Building at 3750 University Avenue (Property), which was funded by Riverside Public Utilities (RPU). As such, RPU is now the Landlord of the Property. The Property consists of approximately 127,533 square feet of rentable office and retail space in a six -story building, plus a basement level and a 490 -parking stall garage situated on approximately 2.5 acres of land. On January 26, 2016, the City Council approved an Exclusive Authorization of Lease Agreement with Newmark of Southern California, Inc., dba Newmark Knight Frank (NKF), to provide broker leasing services for the Property. RPU staff have been coordinating the leasing process for the Property with the Real Property Services Division of the Community & Economic Development Department and NKF as the broker