DEPARTMENT: Transportation & Capital Improvements
DEPARTMENT HEAD: Mike Frisbie, P.E.
COUNCIL DISTRICTS IMPACTED: City Wide
SUBJECT:
On-Call Commercial Real Estate Brokerage Services
SUMMARY:
An ordinance authorizing the execution of three (3) professional services agreements with Providence Commercial Real Estate Services, Inc., Peloton Real Estate Partners San Antonio, LLC and CBRE Inc. for real estate brokerage services related to the acquisition, disposition or leasing of real estate for City needs. Each contract will be for a period of two years, with the City holding the right to renew the contracts with any or all of the firms for two additional one year options.
BACKGROUND INFORMATION:
The City has an ongoing need to acquire, dispose of and lease real estate, both for the City’s use and for assets deemed surplus to the City. From time to time, the City real estate management strategy is enhanced if the services of an outside firm, knowledgeable in the local San Antonio market, are employed. Additionally, as provided by Chapter 253.014 of the Texas Local Government Code, the City may contract with a broker to directly sell real property instead of advertising for bids. The previous brokerage contract with Providence did not include this task as the contracts were awarded prior to the amendment of Chapter 253.014.
Services provided by the brokerage contracts may include:
1. Assisting City staff in locating and leasing building space for various City needs;
2. Identify purchase opportunities for land and building required for City needs; and
3. Providing marketing services for City owned property such as vacant land holdings in the downtown area, commercial and residential properties throughout the City.
Procurement of Services
A Request for Proposal (RFP) for On-Call Commercial Real Estate Brokerage Services was released November 18, 2015, with a Pre-Submittal conference held on December 4, 2015, with a submittal deadline of December 18, 2015. Three firms responded and submitted their Statement of Qualifications (SOQ). A selection committee, made up of City staff from TCI, Center City Development Office and Parks and Recreation, evaluated and scored the SOQs based on the published evaluation criteria, which included Background, Experience and Qualifications, Proposed Marketing Plan, Proposed Commission Fees and Team’s Experience with San Antonio Region issues and past experience with City of San Antonio contracts and participation in SBEDA Prime Contract Program.
This contract will be awarded in compliance with the Small Business Economic Development Advocacy (SBEDA) Program. The SBEDA Goal Setting Committee applied the Small and Minority/ Women-Owned Business Enterprise Prime Contract Program with twenty (20) evaluation preference points being awarded to Providence Commercial Real Estate Services, Inc. as they are certified SM/WBE firm located within the San Antonio Metropolitan Statistical Area.
The contracts were developed utilizing a formal request for proposal process as required by the Ethics Ordinance. Discretionary Contracts Disclosure Forms are included herein as attachments.
ISSUE:
This ordinance authorizes the execution of three on-call professional services agreements with Providence Commercial Real Estate Services, Inc., Peloton Real Estate Partners San Antonio, LLC and CBRE Inc. for real estate brokerage services related to the acquisition, disposition or leasing of real estate for City needs for a term of two years with the option to renew for two additional one year extensions.
All three firms are being recommended due to each firm having a specific expertise in one or more areas of services needed. These services include: acquisition, disposition and leasing of commercial and residential properties. Additionally, as provided by Chapter 253.014 of the Texas Local Government Code, the City may contract with a broker to directly sell real property instead of advertising for bids. Staff anticipates an increased workload for the brokers due to this statute, therefore, needing more firms to provide services.
ALTERNATIVES:
An alternative to not entering into agreements with these brokerage firms would be to reissue the RFP and attempt to identify firms other than the three that provided proposals through the prior RFP process.
FISCAL IMPACT:
There is not a fiscal impact at this time. Expenditures for these services are subject to available funding and City Council will authorize payment of commissions at the time transactions incurring a fee are presented for consideration. Fees and commissions for the various types of transactions which may occur under the contract are fixed with a cap of $300,000 per year, and a schedule of same is attached. For assigned projects which do not relate to commissionable work, the contract establishes an hourly rate of $150.00.
RECOMMENDATION:
Staff recommends approval of this ordinance authorizing the execution of three on-call professional services agreements with Providence Commercial Real Estate Services, Inc., Peloton Real Estate Partners San Antonio, LLC and CBRE Inc. for real estate brokerage services related to the acquisition, disposition or leasing of real estate for City needs for a term of two years with the option to renew for two additional one year extensions.