HomeMy WebLinkAboutCC Resolution 9031 (Economic Analysis)RESOLUTION NO. 9031
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL
APPROVING A CONTRACT NOT TO EXCEED $10,890.00 WITH ECONOMIC &
PLANNING SYSTEMS, INC. TO PREPARE AN ECONOMIC ANALYSIS FOR THE
DEVELOPMENT OF HOME DEPOT IN SAN RAFAEL
The City Council of the City of San Rafael finds and determines that:
WHEREAS, an application for the rezoning of 42+ acres to allow the development
of a business park (Shoreline Center including Home Depot) located at 1615 E.
Francisco Blvd. was deemed complete for processing in July 1991; and,
WHEREAS, an Environmental Impact Report (EIR) was prepared for the project;
and,
WHEREAS, during the City Council public hearings on the EIR, the Council
requested information on potential economic impacts of the development of a
Home Depot in San Rafael; and,
WHEREAS, City staff did not have economic expertise to respond to the City
Council's request and desired to retain a CONSULTANT to assist with providing
the requested information; and,
WHEREAS, the CONSULTANT comes highly recommended, has many years
experience in economic analyses, represents that their firm is qualified to perform
such services and is willing to perform such professional services as hereinafter
defined; and,
WHEREAS, the project applicant has agreed to pay the cost of the consultant.
NOW THEREFORE BE IT RESOLVED, the City Council hereby approves an
agreement with the Consultant, a copy of which is attached hereto and made a part
hereof by reference.
BE IT FURTHER RESOLVED that the City Council authorizes the City Manager and
City Clerk to execute said agreement on behalf of the City of San Rafael.
I, JEANNE M. LEONCINI, clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular
meeting of the City Council of the City of San Rafael on Monday, the 4th day of
October , 1993 by the following vote to wit:
AYES: COUNCILMEMBERS: Shippey, Thayer and Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: Brei ner and Cohen
���JE M. LEONC`INI, City Clerk
ORIGINA[ qa3,
PROFESSIONAL SERVICES AGREEMENT
This Agreement is made and entered into this 4th day of Oct. , , 1993, between the
CITY OF SAN RAFAEL, a Municipal Corporation (hereinafter referred to as CITY)
and Economic & Plannine Svstems (hereinafter called CONSULTANT).
A. RECITALS:
WHEREAS, an application for the rezoning of 42+ acres to allow the
development of a business park (Shoreline Center including Home Depot)
located at 1615 E. Francisco Blvd. was deemed complete for processing in July
1991; and,
WHEREAS, an Environmental Impact Report (EIR) was prepared for the
project; and,
WHEREAS, during the City Council public hearings on the EIR, the Council
requested information on potential economic impacts of the development of
a Home Depot in San Rafael; and,
WHEREAS, City staff did not have economic expertise to respond to the City
Council's request and desired to retain a CONSULTANT to assist with
providing the requested information; and,
WHEREAS, the CONSULTANT represented that their firm is qualified to
perform such services and is willing to perform such professional services as
hereinafter defined; and,
WHEREAS, the applicant has agreed to pay the cost of the consultant.
NOW, THEREFORE, it is agreed by and between the CITY and CONSULTANT as
follows:
B. AGREEMENT
1. DEFINITIONS: The following definitions shall apply to the following
terms, except where the context of this agreement otherwise requires:
(a) Commencement of Service: Consultant agrees to commence
work immediately after the date of signing of the Scope of Work
for Phase 1 (dated August 3, 1993) and the Scope of Work for
Phase 2 (dated August 24,1993) and attached as Exhibits "A" and
"B" respectively.
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(b) Completion of Services: Phase 1 - August 9, 1993
Phase 2 - August 27, 1993
2. CONSULTANT AGREES AS FOLLOWS:
(a) CONSULTANT shall undertake and perform an economic
analysis as identified in the attached August 3, 1993 and August
24, 1993 Scopes of Work.
(b) CONSULTANT shall supply copies of draft and final economic
analysis reports to Planning staff within the time frames specified.
(c) CONSULTANT shall attend two City Council public hearings to
present the final reports and respond to questions.
(d) CONSULTANT shall submit an invoice upon completion of
services.
3. CITY AGREES AS FOLLOWS:
(a) In consideration of CONSULTANT'S agreement to perform well
and sufficiently and in a skillful and professional manner the
services contemplated herein, CITY agrees to pay
CONSULTANT a lump sum not to exceed $10,890.00 within 15
days of receipt of invoice.
4. CITY AGREES TO PROVIDE TO CONSULTANT:
(a) All information identified in the August 3, 1993 and August 24,
1993 Scopes of Work, and other assistance as needed.
(b) Such other information as is generally available from CITY files
applicable to the project.
(c) Assistance, if necessary, in obtaining information from other
governmental agencies or private parties; however, it shall be
the CONSULTANT'S responsibility to make all initial contact
with respect to the gathering of such information.
5. OWNERSHIP OF DOCUMENTS:
All documents, originals, graphic exhibits and correspondence developed or
received during the course of the preparation of the final reports shall become
the property of the CITY.
-2-
6. STATUS:
CONSULTANT is an independent contractor and shall not be deemed,
directly or indirectly, to be an officer or employee of the CITY.
7. AFFILIATION:
During the length of the project application review, no member or affiliate of
the CONSULTANT or CONSULTANT team shall be an employee of the
property owner involved in the project.
8. TERMINATION:
(a) The CITY reserves the right to terminate this agreement at any
time by providing written notification to the CONSULTANT.
All work under this Agreement shall terminate, except for what
minor work is required to provide the CITY with a clear
understanding of work completed and work remaining.
(b) The CITY shall pay CONSULTANT all sums then due and
unpaid under this Agreement, including sums for work not
completed, but in preparation. Payment by the CITY of such
compensation shall be considered full and final settlement for
all work performed by the CONSULTANT under this
Agreement.
(c) Upon receipt of full payment, all materials and documents,
whether finished or not, shall become the property of and shall
be delivered to the CITY.
(d) It is mutually understood and agreed that this Agreement shall
be binding upon the CITY and upon the CONSULTANT, their
successors, executors, or administrators. Neither this Agreement
nor any part thereof, nor any monies due to become due under
this Agreement may be assigned by the CONSULTANT without
the written consent of the CITY.
9. NOTICES OF DESIGNATED REPRESENTATIVES:
Any and all notices, demands, invoices and written communications between
the parties hereto shall be addressed as set forth in this paragraph 9. The
below named individuals, furthermore, shall be those persons primarily
responsible for the performance by the parties under this Agreement:
-3-
CITY: Louise Patterson, Associate Planner
City of San Rafael
Planning Department
P.O. Box 151560
San Rafael, CA 94915-1560
Phone: 415-485-3085
CONSULTANT: Walter F. Kieser, Principal
Economic & Planning Systems, Inc.,
1815 Fourth Street, Suite B,
Berkeley, CA 94710-1910
Phone: 510-841-9190
Any such notices, demands, invoices and written communications, by mail,
shall be deemed to have been received by the addressee 48 hours after deposit
thereof in the United States mail, postage prepaid and property addressed as
set forth above.
10. INSURANCE:
With respect to performance of work under this Agreement, CONSULTANT
shall maintain insurance described below:
(a) General Liability Insurance: Commercial or Comprehensive
General Liability insurance covering bodily injury and property
damage utilizing an occurrence policy form, in an amount not
less than $1,000,000.00 combined single limit for each occurrence.
Said insurance shall include, but not be limited to: premises and
operations liability, property damage liability, and personal
injury liability.
(b) Automobile Liabilitv Insurance; Insurance covering bodily
injury and property damage in an amount not less than
$1,000,000.00 combined single limit for each occurrence. Said
insurance shall include coverage for owned, hires and non -
owned vehicles.
(c) Worker's Comvensation Insurance:. CONSULTANT shall be
required to maintain full Worker's Compensation Insurance for
all persons employed directly in carrying out the work specified
herein, in accordance with provisions of the State of California
Labor Code.
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11. INDEMNIFICATION:
CONSULTANT agrees to hold the CITY harmless from and against liability
arising out of CONSULTANT'S negligent performance of the work described
in the attached August 3, 1993 and August 24, 1993 Scopes of Work. It is
specifically understood and agreed that in no case shall CONSULTANT be
required to pay an amount disproportional to CONSULTANT'S culpability or
any share of any amount in excess of actual economic damages.
12. ASSIGNMENT:
No assignment of this Agreement or any part or obligation of performance
hereunder shall be made, either in whole or in part, by CONSULTANT
without prior written consent of the CITY.
13. GOVERNING LAW:
This Agreement shall be governed by and constructed in accordance with the
laws of the State of California.
14. ARBITRATION:
All claims or disputes between the CITY and the CONSULTANT relating to
this Agreement shall be decided by arbitration in accordance with the rules of
the American Arbitration Association, conducted in Marin County under the
laws of the State of California. The decision of the arbitrator shall be final and
binding on the parties. In interpreting the provisions of this Agreement, the
arbitrator may make an award of costs and fees, including attorney's fees
necessitated by arbitration.
15. ALTERATIONS:
This Agreement may be modified, as necessary, for the successful and timely
completion of the services to be provided. Any alteration shall be expressed
in writing, as an amendment to this Agreement and shall be approved by
both parties.
ENTIRE AGREEMENT:
This Agreement supersedes any and all other agreements, either oral or in
writing, between the parties with respect to the subject matter herein. Each
party to this Agreement acknowledges that no representation by any party
which is not embodied herein nor any other agreement, statement, or
promise not contained in this Agreement shall be valid and binding. Any
modification of this Agreement shall be effective only if it is in writing, and
signed by all parties.
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IN WITNESS WHEREOF, the parties hereto executed this Agreement as of the day
and year first set forth above:
ATTEST:
Clerk
11,17
C SULTANT
City Manager
APPROVED AS TO FORM
'6� 6
City Attorney
ECONOMIC & PLANNING SYSTEMS
■ Land Economics ■ Real Estate ■ Public Financc
August 3, 1993
Mr. Bob Pendoley
City of San Rafael Planning Department
1400 Fifth Avenue
San Rafael, CA 94915-1560
Subject: Home Depot Analysis; EPS #3126
Dear Bob:
RGCI=IVF_D
AUG 101993
CITY ATTORNEY
CITE' nF coni ^'FAEI
t=-)kt+l0IT .. h.
Per your conversation with Laura Fudge in our office yesterday, we have revised the Phase
1 scope of work, which analyzes the potential for physical blight in San Rafael as a result of
the opening of a Home Depot store. The purpose of the analysis is to provide information
as a part of the Response to Comments for the Shoreline Center Draft Final EIR. Phase 2 of
our work scope, to be finalized at a later date, will involve assessing the broader economic
and fiscal impacts generated as a result of the opening of a Horne Depot store in the City of
Clan Rafael. Our proposed Phase 1 scope of work, schedule and budget is outlined below.
SCOPE OF WORK
'T'ASK 1: REVIEW EXISTING DOCUMENTS,
Economic & Planning Systems (EPS) will review existing documents and information
pertaining to the potential economic impacts of the Home Depot project including portions
of the Shoreline Center Draft Final Environmental Impact Report, the Response to
Comments, existing analysis and other relevant information.
EPS will also review the Mt. Shasta case, which required that an economic and social impact
analysis of a proposed project be included in the EIR because the proposed project would
result in a physical change in the environment. EPS will compare the Mt. Shasta case with
the circumstances surrounding the Shoreline Center EIR/Home Depot project in order to
identify factors which may distinguish the Mt..Shasta case from the proposed Home Depot
project.
TASK 2: CRITICAL REVIEW OF PRIOR ECONOMIC ANALYSIS,
In this task, EPS will evaluate the work conducted by Sedway and Associates (submitted as
a comment on the Draft EIR), regarding the impact of a Home Depot in San Rafael on
existing hardware and home improvement stores. Because there is a lack of technical
documentation for the retail demand analysis that was undertaken, it will be difficult to
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11 1,"11 %In 1111' 1 1 1 -Ill, h1'1 '•1-0 I'.i" '11u 1.1" ill 111
Mr. Bob Pendoley
August 3, 1993
Page 2
respond to specific technical aspects of Sedway and Associates' work. However, EPS will
review available data regarding San Rafael retail sales volumes, capture of retail sales in the
hardware/home improvement category, and population growth rates in order to verify the
basic conclusions of Sedway and Associates' analysis. We will also identify any retail
trends which could potentially result in a modification of the analysis' conclusions.
TASK 3: BLIGHT ANALYSIS
Task 3.1: Overview of San Rafael Retail Market
EPS will summarize the current status of the San Rafael retail market, including the existing
retail base, vacancy rates, absorption rates, and demand for retail space. We will
supplement existing available data by conducting interviews with key local retail brokers in
order to identify trends in retail leasing and activity. EPS will also research the ability to re-
lease retail spaces in San Rafael in order to verify Sedway and Associates' conclusions
regarding the difficulty in leasing larger spaces as well as identify additional factors which
may be related to this issue.
Task 3.2: Locational Analysis
Utilizing a City base map provided by the staff, which identifies the location and
distribution of existing hardware and home improvement stores in San Rafael, EPS will
assess the impact of store closures on the physical characteristics of the City. This will
include an assessment of the stores' role in generating additional foot traffic to the area in
which they are located and other aspects that may induce blight.
Task 3.3: Evaluate Impacts of Store Closures/Re-Use
In this task, EPS will synthesize information obtained in the previous tasks in order to
assess the potential for physical blight in San Rafael as a result of potential store closures.
We will develop a "worst case" scenario in which we assume that a certain percentage of
existing hardware and home improvement stores close as a result of Home Depot's location
to San Rafael. We will then evaluate the potential for physical blight in the areas of store
closures.
TASK 4: MEETINGS AND PRESENTATIONS
EPS staff will attend and present findings at a public hearing, as appropriate. The budget
assumes one public hearing to be attended by an EPS principal, and includes preparation
and travel time.
TASK 5: REPORT PREPARATION
The research, analysis, and findings of our work will be summarized in a concise report
which will include supporting documentation and a list of sources and contacts.
AUGUET.DOC
Mr. Bob Pendoley
August 3, 1993
Page 3
SCHEDULE AND BUDGET
EPS is prepared to begin work upon acceptance of this proposal. The results of this analysis
will be presented at a public hearing tentatively scheduled for August 16, 1993; it is
understood that EPS will need to present a summary of the analysis to Planning staff by
August 9, 1993..
Charges for EPS staff time are based on the amount of time actually spent, billed at
standard hourly rates. Expenses, such as for copying, delivery and travel, are billed at their
cost to us. Invoices are submitted monthly and are payable upon receipt.
Please refer to the attached budget for an estimate of hours required to complete this work.
We estimate that the study effort can be completed for an amount not to exceed $5,960.
ACCEPTANCE
If would like us to proceed with the work along the lines described above, please sign both
copies of this proposal and return one copy to us for our files.
We look forward to working with you on this project.
Sincerely,
ECONOMIC & PLANNING SYSTEMS, INC.
Walter F. Kieser Les R. Musbach
Principal Principal
ACD FO C OF SAN RAFAEL BY:
Gary/T. Ragghi.anti
City Attorney
cc: Sheila Delimont
Gary Ragghiand
AUG.3LET.DOC
ECONOMIC & PLANNING SYSTEMS
■ Land Economics ■ Real Estate ■ Public Finance
STAFF BILLING RATES
for 1993
Staff Member Hourly Rate
PrinciLpals
Walter Kieser $125
James Musbach 125
Tim Youmans 125
Senior Associates
Richard Berkson 100
Russell Branson 90
Associates
Todd Bland
65
Nat Bottigheimer
55
Joanne Brion
70
Joe Chinn
65
Laura Fudge
70
Sonia Jacques
70
Susan Ng
70
Neal Parish
75
Allison Shaffer
65
Edward Sullivan
65
Chuck Teller
70
David Zehnder
55
Research Associates
Michele Licavoli 50
Elizabeth Mercer 50
Support Staff 30
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ECONOMIC & PLANNING SYSTEMS
■ Land Economics ■ Real Estate ■ Public Finance
August 24,1993
Mr. Bob Pendoley
City of San Rafael Planning Department
1400 Fifth Avenue
San Rafael, CA 94915-1560
Subject: Home Depot Analysis, Phase 2 Scope of Work; EPS #3126
Dear Mr. Pendoley:
This letter sets forth a scope of work for the second phase of our work effort analyzing the
potential economic impacts of opening a Home Depot store in San Rafael. The purpose of
the analysis is to provide the City with additional information which will help the City in
its decision-making process concerning the project. We assume this scope of work will be
considered Phase 2 of our current contract with the City.
Our proposed scope of work, schedule and budget are outlined below.
SCOPE OF WORK
TASK 1: POTENTIAL FISCAL AND ECONOMIC IMPACTS,
Task 1.1: Potential Impact in San Rafael
This task will involve analyzing the potential fiscal implications for the City of approving
the Home Depot store versus the potential economic impacts to other businesses in San
Rafael. To the extent possible, we will estimate the net impact on City sales tax revenues
and in particular, we will discuss the net loss in sales tax revenues should the Home Depot
store locate outside San Rafael. Net impact refers to the additional sales tax revenues from
Home Depot minus any loss of sales tax revenues from other hardware stores. For this task
we will interview representatives from Home Depot concerning their plans if they do not
locate in San Rafael and other related issues.
This task will also address the market or 'trade' areas of Home Depot versus local hardware
stores and how these differ, and how this may affect the amount of retail sales captured in
San Rafael. The market area will be defined geographically and a discussion of the
possibility of another Home Depot locating within the market area, i.e., between San Rafael
and Rohnert Park, will be provided.
Based on delivery data to be provided by Home Depot and City staff, we will also provide a
discussion of the current loss of Marin County hardware customers to stores in Rohnert
Park and El Cerrito.
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Mr. Bob Pendoley
August 24, 1993
Page 2
Task 1.2: Survey of Other Communities
Economic & Planning Systems (EPS) will conduct an informational survey in several Bay
Area communities in order to determine the effects of Home Depots on local hardware and
home improvement retailers and on the fiscal position of the communities. We will
interview local finance, planning or redevelopment officials in cities such as Concord, El
Cerrito, Fremont, Rohnert Park, San Carlos and Vallejo regarding retail sales characteristics
before and after the location of Home Depots in these communities.
Task 1.3: Interview Other Hardware Stores
EPS will interview the manager of the recently -opened Orchard Supply Hardware store
(CISH) in San Rafael. The purpose of the interview will be to identify CISH's opinions and
concerns regarding the location of a Home Depot store in the community and to gather
information on future market and sales trends in the hardware and home improvement
retail sector.
We will interview other hardware store owners, as relevant, to ascertain how they are
dealing with the increasing competition from 'big box discounters' such as Home Depot.
We will identify, to the extent possible, any emerging trends in the hardware and home
improvement retail sector, such as a change in market stratification to establish a new
market niche. We will also compile relevant information from recent real estate journal
articles concerning this issue.
TASK 2: MEETINGS AND PRESENTATIONS.
EPS will attend and present findings at a public hearing, as appropriate. The budget
assumes one public hearing to be attended by an EPS principal, and includes preparation
and travel time.
TASK 3: REPORT PREPARATION,
The research, analysis, and findings of our work will be summarized in a concise report
which will include supporting documentation and a list of sources and contacts. We will
provide the City with six copies of the report and one camera-ready version.
SCHEDULE AND BUDGET
Given the City's tight schedule, EPS is prepared to begin work upon verbal acceptance of
this proposal (assumed to occur Monday, August 23). We will send you a signed hard copy
of this letter on Tuesday, August 24. The results of this analysis will be presented at a
public hearing tentatively scheduled for September 8,1993; it is understood that EPS will
need to present a draft of the analysis to Planning staff by Friday, August 27, 1993.
AUG24 Fr.noc
Mr. Bob Pendoley
August 24, 1993
Page 3
Charges for EPS staff time are based on the amount of time actually spent, billed at
standard hourly rates. Expenses, such as for copying, delivery and travel, are billed at their
cost to us. Invoices are submitted monthly and are payable upon receipt.
Please refer to the attached budget for an estimate of hours required to complete this work.
We estimate that the study effort can be completed for an amount not to exceed $4,930.
ACCEPTANCE
If would like us to proceed with the work along the lines described above, please sign both
copies of this proposal and return one copy to us for our files.
We look forward to working with you on this project.
Sincerely,
ECONOMIC & PLANNING SYSTEMS, INC.
—7-
V.
Walter F. Kieser James R. Musbach
Principal Principal
ACCEPTED FOR THE CITY OF SAN RAFAEL BY:
cc: Sheila Delimont
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