HomeMy WebLinkAboutAGENDA REPORT 2003 1203 CC REG ITEM 10KMOORPARK CITY COUNCIL
AGENDA REPORT
ITEM 10' K•
C €E i R
TO: Honorable City Council
FROM: Barry K. Hogan, Community Development Director ��
Prepared By: David A. Bobardt, Planning Man e
DATE: November 24, 2003 (CC Meeting of 12/3/2003)
SUBJECT: Consider Authorizing the Initiation of a Study of
Demand for Commercial Land in the City of Moorpark
BACKGROUND /DISCUSSION
On March 19, 2003, the City Council directed the preparation of
a commercial demand study to evaluate the economic impact of
proposed development of residences on land planned for
commercial uses. Two applicants, Grand Moorpark, LLC and Shea
Homes, were both requesting such a General Plan Amendment. Both
applicants deposited funds with the City for this study and an
economic consultant was retained for a not -to exceed contract
totaling $18,400. The contract, however, was terminated before
any work was initiated due to a conflict of interest with the
economic consultant that arose while waiting for one of the
applicants to deposit their share of the study cost.
Staff evaluated several other economic consultants, but most
were disqualified due to existing contractual arrangements with
firms processing development projects in Moorpark. One firm,
Allan D. Kotin and Associates (ADK &A) , has strong qualifications
in preparing the kind of economic study the City is seeking.
ADK &A's background includes economic consulting work for both
private and public sector clients. A list of current developers
in the City did not reveal any conflict of interest.
A proposal solicited from ADK &A (attached) looks at both fiscal
impacts and long -term land requirements from the proposed
conversion of the commercially - planned land. A second phase to
the analysis was also offered by ADK &A to assess in greater
detail the type of retail demand that Moorpark would generate
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Honorable City Council
December 3, 2003
Page 2
over the next 20 years. Although such information may be useful
in the City's Land Use and Circulation Element update, it is not
needed at this time for the evaluation of these projects.
The proposed cost of the first phase, at $28,000, is higher than
the contract with the previous consultant and it exceeds the
limit under which a contract could be negotiated without the
approval of the City Council. The main reason for the higher
cost appears to be due to the use of additional specialists in
the preparation of the study. Staff has asked and received
commitments from two other project applicants, MGA Development
and Engineering, and North Park Village, LP, to participate in
the funding of this study. Both are proposing General Plan
Amendments in which the processing would benefit from the
results of the study. With their participation, Phase 1 of the
proposed study would be fully funded, including the City's
administrative costs.
STAFF RECOMONDATION
Authorize the City Manager to negotiate and enter into an
agreement with Allan D. Kotin and Associates for Phase 1 of the
proposed economic study referenced in the November 6, 2003
proposal at a cost not to exceed $28,000.00.
Attachment:
Economic Study Proposal (11/6/2003)
00012f:
310.820.0900
RDK&IN 213.623.3841
Fax 213.623.4231
Allan D. Kotin & Associates
Real Estate Consulting for Public Private Joint Ventures
949 S. Hope Street, Suite 200, Los Angeles, CA 90015 akotin @attglobal.net
November 6, 2003
Mr. David A. Bobardt
Planning Manager
City of Moorpark
7999 Moorpark Avenue
Moorpark, CA 93021
Re: Revised Proposal for Consulting Services
Dear Mr. Bobardt
At your request, Allan D. Kotin & Associates (ADK &A), in conjunction with CB Richard Ellis
Consulting (CBREC) and VSG Associates (VSG), is pleased to submit this revised proposal for an
examination of the adequacy of your available zoned land for commercial development and some of
the issues involved in the potential conversion of that land to residential use. This revised proposal
replaces and supersedes a similar initial proposal dated September 21, 2003.
Background and Overview
By way of background, we understand that your city currently has only about 50 acres of
undeveloped commercial land available and that several developers have made proposals for the
rezoning of a significant portion of that property for residential development.
As you expressed it to me in dealing with these and other longer -term issues "The main concern of
the processing of these projects is where this would leave the City in its attempt to balance
residential and commercial development. Related is the concern over hemorrhaging sales tax
revenues to surrounding larger cities that have been better positioned to attract new retail businesses
and restaurants. Although focused on the two proposed projects currently under consideration, it is
anticipated that this economic study will have great influence on an update to our land use element
map that ...should be starting later this fiscal year."
In terms of large -scale retail, your city already operates at a disadvantage with respect to your two
major neighbors, Simi Valley and Thousand Oaks. You are concerned that any further reduction in
the supply of commercial land will not only have potentially near -term adverse affects but also put
your city at a long -term disadvantage in capturing the growth in retail sales associated with the
substantial projected residential growth in your city which would, in turn, substantially exacerbate
the City's fiscal problems.
Accordingly, the proposed consulting study has both short term and long -term goals. The critical
short-term goals are addressed in the first two tasks which comprise Phase 1 of the analysis. The
second task does have major long -term implications as well but the full assessment of long -term
CC ATTACHMENT 000127
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David Bobardt
Revised Proposal for Consulting Services
November 6, 2003 Page 2 of 9
needs would also require the third task which is Phase 2. ADK &A understands that, at this time, the
City is prepared to authorize only Phase 1 at this time.
Overview of Major Tasks
Based on your email communication and our verbal conversations, ADK &A and its associated
consultants have identified three major tasks associated with this assignment:
1. A brief fiscal impact analysis of the near -term impact of commercial versus residential
development of currently zoned commercial property in which we would examine the
municipal service cost offset by the potential revenues of alternative forms of development.
2. An analysis of normative long -term needs for commercial land as your city grows, involving
establishment of an appropriate range of ratios of commercial space and commercial land to
residential population, employment, etc. and the projection of that into the future using your
best available population, household, and employment projections.
3. A systematic analysis of alternative patterns of retail development in which we would look at
what types of shopping centers might conceivably be developed in your city, in terms of
what developers and retail tenants are looking for, the availability of land to meet their needs
and the specific relevance of the 50 acres of currently commercial zoned land in question.
The last two objectives actually transcend the particular residential rezonings under consideration.
They address how should your city be positioned to accommodate retail development in the future,
in terms of both traditional land use ratios and specific site characteristics.
Consulting Team
To address these issues, ADK &A has assembled a very strong team representing strong analytic
capabilities, access to an extensive retail data basis, and a specific familiarity in considerations of
retail location and shopping center development.' The roles will be as follows:
Overall direction and strategic control will be exercised by ADK &A and core
presentations and documents will be prepared by ADK &A;
• CBREC and Tom Jirovsky will be responsible for the fiscal impact analysis of
analytic tasks and the projection of commercial land requirements in different
categories based on ratios, leakage analysis, and other traditional data sources; and
' ADK &A has attached to a previous version of this proposal, its own credentials as well as those of Tom Jirovsky and
CB Richard Ellis Consulting and those of Victor Grgas at VSG Associates.
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David Bobardt
Revised Proposal for Consulting Services
November 6, 2003 Page 3 of 9
• Victor Grgas of VSG will, in the future Phase 2 effort, provide a detailed assessment
of the types of shopping centers that might conceivably locate in Moorpark over time
and their land requirements and the suitability of existing or potential sites in
Moorpark for such development.
CB Richard Ellis Consulting, formerly known as the Sedway Group, combines a very strong
background in real estate economics and analysis with the large and very detailed data base
maintained by the CB Richard Ellis brokerage organization which will provide very good detail on
store locations, store patterns, etc. In this regard, CBREC and Victor Grgas will work very closely
together in the third and critical stage of this analysis which is to identify the types of centers that
may reasonably be expected to at least consider Moorpark over the next 20 years, what are their
competing locations, what are the types of sites they would require in Moorpark, do these sites exist,
can they be assembled and what will happen if there are no such sites in terms of what alternatives
will be selected.
Victor Grgas is clearly qualified to identify and assess specific sites having been the Director of
Planning for Forest City Development for a period of 12 years during which he has not only
processed successful development of more than 20 major shopping centers but has also been
intimately involved in investigating new sights for different kinds of centers throughout Forest
City's western region. Victor brings some specific familiarity to this project having evaluated on
several occasions in the recent past potential shopping center sites in the nearby community of Simi
Valley.
All three consultants have no problems with respect to your list of developers and there are no
conflicts of interest based on past, current or perspective work. Attached to this proposal is a
spreadsheet showing the different tasks, subtasks and associated budgets for this assignment. Each
of these is discussed in some general terms below.
PHASE 1— FISCAL IMPACT AND GENERALIZED LONG -TERM NEEDS
Task 1— Fiscal Impact Analysis
ADK &A understands from your discussion that some of the traditional negatives associated with
residential versus commercial development may not apply since your city has an established pattern
of asking most residential developments to absorb as much as possible of their own infrastructure
and operating costs through the sue of private streets, community facilities districts, etc.
Notwithstanding that, there exist significant differences between the fiscal impact of retail
development, and other forms of commercial development on one hand and residential development
on the other.
CBREC will analyze in detail the City budget to ascertain how the various expenditure and revenues
categories are differentially affected by residential and commercial development.
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David Bobardt
Revised Proposal for Consulting Services
November 6, 2003 Page 4 of 9
Following that analysis, CBREC staff will interview the affected City departments to establish what
incremental costs there would be with either kind of development and also determine prototypical
alternative types of commercial development for purposes of both establishing costs and potential
revenues.
A set of charts and illustrations will be prepared indicating the near -term and long -term impact on
City revenues of alternative forms of development of the specific acreage in question. The budget
and scope assumes that the residential developments that are proposed have been defined with
respect to number, type, and price of units with sufficient accuracy as to permit the generation of
fiscal impact. With respect to prototypical commercial development, CBREC will meet with the
City to establish prototypes that we think reasonably represent the market and will be accommodated
by the zoning in place.
Task 2 - Long -Term Land Requirements
The objective of this task is to establish on a normative basis the scale, character and timing of retail
supportable by the resident and employee populations projected for the City of Moorpark. The
output of this task will be to estimate how much of what kind of retail development your city could
reasonably be expected to support if land were available.
The analysis will start with a set a generalized growth projections and an inventory of existing retail
uses, both of which will be provided by the city and, except for review and comment, are not part of
the consulting scope. At this time, we do not contemplate any independent generation of growth
projections but will rely on those the city will provide.
Neighborhood, Community and Regional Retail Assessment
Sedway Group will examine the dynamics of the local market area, including residential, employment and
shopping patterns, traffic circulation, and location of competitive retail centers to determine a realistic
potential trade areas for the Moorpark regional and neighborhood retail opportunities. The demographic
analysis will provide information regarding the market area's retail spending potential, wealth and growth
potential. Current and projected employment in the area will also be assessed.
Competitive Retail Analysis
CBREC will review and examine major concentrations of competitive retailing that serve market area
residents. In addition to an examination of the retail inventory provided by the City, this assessment will be an
identification and inventory of competitive retailing areas, major regional retail centers, regional off -price or
power centers, concentrations of restaurants and entertainment, nearby local- or community- serving centers,
and other potentially competitive retailing, including center size, year opened, vacancy, rent, major tenants.
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David Bobardt
Revised Proposal for Consulting Services
November 6, 2003 Page 5 of 9
Identification of Undersupplied or Oversupplied Retail Categories
Based upon the examination of demographics and competitive retail opportunities, CBREC will
determine the extent to which specific types of retail goods are in potential undersupply or
oversupply within the market area.
CBREC performs the leakage and attraction analysis through application of an economic model that
estimates market area retail spending potential based upon population, income, and consumer
spending patterns, and determines the extent to which a market area is or is not capturing this sales
potential. Retail categories in which spending is not fully captured are called "leakage" categories,
while retail categories in which more sales are captured than are generated by residents are called
"attraction categories."
Supportable retail area will be estimated based on population sizes, spending characteristics, and
performance requirements of retail anchors in conjunction with supply factors. Supportable gross
leasable area will be determined using per square foot sales productivity factors. Timing will be
identified for various retail types to indicate when development would be supportable.
PHASE 2 — CRITICAL QUALITATIVE ASPECTS OF COMMERCIAL GROWH
Task 3 — Retail Center Planning for the City
Following up on the work completed in Task 2, CBREC will estimate in greater detail the impact of
the future population components (e.g., residents, workforce, and visitor populations). Sales
potential will be a product of resident population, overnight visitors, and spending patterns.
The consulting team will prepare one or more prototypical development scenarios indicating the
number of new centers of each type needed over the next 20 years to accommodate the projected in
population increases, not only in the City of Moorpark but in the adjacent cities as well. This
scenario development effort will be based, among other things, on the survey of present and planned
retailing in the local and regional markets that serve Moorpark described in Task 2, together with an
assessment of site desirability for different kinds of centers. This assessment will consider specific
considerations of site access and visibility as well as the more general benefit afforded by the central
location of Moorpark between the large markets represented by Thousand Oaks and Simi Valley will
form the basis
Each scenario generated would represent a certain number of additional power centers, street
oriented pedestrian development, regional centers, etc. This analysis will be deliberately somewhat
broader than what can be simply accommodated on the 50 acres because we want to provide to the
City a meaningful long -term profile of retail development as well as an answer of its near -term
questions on the 50 acres of currently available land. The result of this work will be a series of two
to three documented scenarios showing what kind of retail development may be expected, the extent
(; 00 13l
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David Bobardt
Revised Proposal for Consulting Services
November 6, 2003 Page 6 of 9
to which if sites were available it could occur in Moorpark, the extent to which it is unlikely to occur
in Moorpark independent of site availability and the projected sales volume /sales leakage that would
result from the different scenarios.
BUDGET
The estimated budget for Phase 1 of this assignment is $28,000 while the budget for Phase 2 is
currently estimated at $25,000. ADK &A understands that the City proposes to authorize only Phase
1 at this time and that Phase 2 may be authorized in the future as part of a general plan update. In
order to account for the passage of time and possible changes in circumstances or objectives, a firm
and binding budget will be prepared for Phase 1 only when and if the City wants to proceed with
that work.
The general allocation of the budget among tasks in Phase 1 is as follows:
Task 0 - A kickoff and briefing meeting $ 1,600
Task 1 - Fiscal impact analysis of current proposals $ 9,600
Task 2 — Long -terms retail land use analysis $10,800
Prepare and present final report $ 6,000
Please note that the task allocations are provided only for general illustration and that ADK &A
agrees only to complete the entire effort for the total fee and will not be bound by budgets for
individual tasks.
The work plan in the budget specifically provides for interim delivery of key conclusions and results
before write up of the final report. It also provides for attendance at both the kickoff meeting and
the presentation of the report to council for participation by the principals of both initially
participating firms.
The budget is an estimate that will not be exceeded without the prior written consent of the client.
If, however, the client requests changes in scope, the client requests alteration of the work based on
changes to underlying assumptions to which the client previously agreed, or other external and
unforeseen changes arise which materially increase the work required, ADK &A reserves the right to
meet with the client to explore how client consultant can mutually agree to either: (1) expand the
budget to permit full completion of the assignment as planned incorporating the new conditions; or
(2) selectively reduce the scope so that the consultants can still deliver a meaningful final product
within the original scope.
SCHEDULE
We anticipate that this analysis can be completed within approximately 10 -12 weeks of
authorization to proceed. This is based on the following assumptions with respect to City
participation and response,
otu,0132
RDI(&R
David Bobardt
Revised Proposal for Consulting Services
November 6, 200' ) Page 7 of 9
1. A kickoff meeting to review data requirements within one week of authorization to be
attended by all consultants and to include a tour.
2. All data requirements for inventory and projection data provided by the end of the second
week
3. Availability within the first two weeks of City department personnel for interviews on fiscal
(cost) impacts of residential vs commercial development
4. Delivery and discussion of draft results in quantitative terms without accompanying text
within 4 -6 weeks of receipt of data per 2 above
5. Response by the City staff with regard to needs for clarification or modification with one
week of the delivery date set in 4 above.
6. Delivery of a draft report one week after response per step 5 above with comments by the
City not less than one week later.
7. Delivery of the final report and single presentation to staff and council (or to staff only at the
City's discretion) within two weeks of the receipt of all City comments per step 6 above.
Delays in City responses beyond the times allotted above will result in corresponding delays in
succeeding steps and the final report.
The budget provides for preparation of a draft report, circulation to staff, one round of revisions of
that report and two presentations, one to staff in step 4 and one to the City Council in step 7.
Additional presentation will be billed on a time and materials basis.
ADDITIONAL CONTRACT PROVISIONS
This scope of services does not cover professional services necessary in the event of litigation. Any
services necessary in that regard, including but not limited to preparation and testimony, will be
billed at a higher rate, to be negotiated.
These fees quoted include the use of any subcontractors retained by ADK &A or CBREC to assist in
analysis or data collection and all normal expenses. The budget provides for delivery of five bound
copies of the report plus both an unbound reproducible original as well as a digital copy on disk.
Additional copies can be furnished at cost.
You may terminate the consultants' services at any time by giving 30 days written notice. In such
event, consultants will be paid by you on a cost incurred to date basis, and including reimbursement
for expenses advanced by me on your behalf within the budget.
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RDI(&R
David Bobardt
Revised Proposal for Consulting Services
November 6, 2003 Page 8 of 9
All bills are due and payable within 30 days and consultants are free to withhold services if you have
any bills that are unpaid after 45 days from receipt. You have up to 21 days from receipt of each bill
to question or challenge in writing any aspects of the billings. Beyond that time you agree not to
withhold payment based on any complaint or objection to the bill.
You agree that all information and data received from the consultants, whether the same is presented
orally or in writing, shall be solely for your use and is not to be relied upon by any third party or
parties without prior written approval. Consultants disclaim any and all responsibility to third
parties deriving from the use of said information or data.
ACCEPTANCE AND AUTHORIZATION
If this proposal meets with your approval, please sign a copy of this proposal and return it as
confirmation of the contract. If your city uses its own contract form, you may include the scope and
terms of this agreement by reference or attachment and forward your own document to me.
The analysis you have requested and which we have outline in this proposal extends well beyond the
issues raised by the current rezoning applications. It represents an organized effort to deal with
future considerations of balanced land use and fiscal health that are critical to your city's long -term
prosperity. I and my associates welcome the opportunity to work with you on this task.
Respectfully submitted,
Allan D. Kotin, Principal
Allan D. Kotin & Associates
ACCEPTED FOR:
(Name of contracting party);
BY:
Name:
Title:
Signature:
MpkRetailPropslREV . doc
Date:
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David Bobardt
Revised Proposal for Consulting Services
November 6, 2003 Page 9 of 9
BUDGET BY TASK AND RESPONSIBILITY FOR ANAYSIS OF NEAR TERM FISCAL IMPACT
AND LONGER TERM RETAIL LAND REQUIREMENTS FOR THE CITY OF MOORPARK
(Revised, November, 2003)
Prepared try: Kobs
Date 1116103
CONSULTANT TOTALS
22,385 f 22,385
ADKdA
C6REC
TASK
mn
cum
Project Consul
istre
Subtask
rasx
ear
TASK DESCRIPTION
KoUn
Jirovsky
Director tant
tive
Totals
TOTAL
HOURLY RATE
185
215
170
100
60
TASK 0
Kickoff
$ 1,600
Kickoff meeting, onsite data review and short city tour
4
4
-
-
-
1,640
TASK 1
Fiscal Impact
$ 9,600
1.1
Interviews with affected city department
2
8
4
2,790
12
Preparation of initial fiscal impact analysis
2
4
8
12
3,810
13
initial documentation - tables and bullet points, no text
2
4
4
8
4
2,970
TASK 2
Projection of Retail Land Requirements
$ 10,800
2.1
Review of City inventory and growth projections
2
4
1,250
2.2
Identification of trading areas and inventory of existing facilities
4
2
8
12
3,770
2.3
Leakage analysis and establishment of land use ratios
1
2
8
8
2,785
2.4
Initial documentation - tables and bullet points, no text
1
4
4
8
8
3,015
TASK 4
Report Preparation and Presentation
$ 6,000
4.1
Prepare Draft Report
4
4
8
2,440
4.2
Modifications as needed (allowance)
1
1
3
710
4.3
Presentation
6
6
4
2,860
TOTALS
29
43
36
63
12
$ 28,040
$ 28,000
CONSULTANT TOTALS
22,385 f 22,385