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PROFESSIONAL CONSULTATION SERVICES AGREEMENT FOR MARKET ASSESSMENT AND ABSORPTION STUDY BETWEEN CITY OF MOSCOW, IDAHO AND JOHNSON ECONOMICS L.L.C. THIS PROFESSIONAL CONSULTATION SERVICES AGREEMENT FOR MARKET ASSESSMENT AND ABSORPTION STUDY (hereinafter "Agreement") between the City of Moscow, Idaho, a municipal corporation of the State of Idaho, 206 East Third Street, Moscow, Idaho, 83843 (hereinafter "CITY"), and Johnson Economics L.L.C., a Limited Liability Corporation of the State of Oregon, 621 SW Alder, Suite 605, Portland, Oregon, 97205 (hereinafter "CONSULT ANT"). W I T N E S S E T H: WHEREAS, CITY and the University of Idaho (UNIVERSITY) wish to conduct a market assessment and absorption study (hereinafter "Study") for the Legacy Crossing Urban Renewal District (hereinafter " PROJECT"); and WHEREAS, CITY and UNIVERSITY have agreed to jointly fund said Study; and WHEREAS, it is CITY's intent to hire CONSULTANT to assist in the preparation of this Study; and WHEREAS, CITY has complied with applicable prov1s10ns of law regarding retaining professional services such as those contemplated; NOW, THEREFORE, be it agreed, for and in consideration of the mutual covenants and promises between the parties hereto, as follows: SECTION I: THE PROJECT CONSULT ANT shall provide professional services for PROJECT as outlined in this Agreement in accordance with the terms and conditions of this Agreement for the preparation and completion of a market assessment and absorption study. The final draft of the study shall be presented in written and graphical form based on CONSULTANT's experience to maximize the ease of reading and understanding by all parties. Both bound and electronic copies of the report shall be provided for easy reproduction and dissemination. SECTION II: SCOPE OF WORK The Scope of Work and level of effort for PROJECT is detailed in Exhibit attached hereto, and by this reference made a part of this Agreement. PROFESSIONAL SERVICES AGREEMENT- LEGACY CROSSING MARKET ASSESSMENT AND ABSORPTION STUDY PAGE 1 OF6 Z-Ol4- lo3 ---PAGE BREAK--- SECTION III: COMPENSATION A. Compensation and Term. For the services performed pursuant to this Agreement, CONSUL TANT shall be compensated in a stipulated sum not to exceed twenty three thousand dollars ($23,000) plus up to one thousand dollars ($1,000) for reimbursable expenses directly related to the PROJECT. The term of this Agreement shall not exceed six months from the date of its execution. B. Payment. Payment for services rendered by CONSULT ANT shall be m accordance with the following: CONSULT ANT shall submit invoices to CITY for proportional work completed within the billing period. CITY shall ensure that their respective funds are available and in an account designated for PROJECT prior to and for the duration of PROJECT. Payments for invoices prepared by CONSUL TANT shall be due and payable net thirty (30) days by CITY. SECTION IV: OTHER TERMS AND CONDITIONS A. Independent Contractor The contracting parties warrant by their signature that no employer/employee relationship is established between CONSULT ANT and CITY by the terms of this Agreement. It is understood by the parties hereto that CONSULT ANT is an independent contractor and as such neither it nor its employees, if any, are employees of CITY for purposes of tax, retirement system, social security (FICA) withholding. Any sub-consultant used in PROJECT are the sole responsibility of CONSUL TANT and are not considered to have an employer/employee relationship with either CITY by the terms of this Agreement. B. Termination of Agreement This Agreement may be terminated by CONSULTANT upon thirty (30) days' written notice, should CITY fail to substantially perform in accordance with its terms through no fault of CONSULTANT. CITY may terminate this Agreement upon thirty (30) days' written notice without cause and without further liability to CONSULT ANT except as designated by this Agreement. All working documents and drawings shall become the property of, and shall be surrendered to CITY. CONSUL TANT shall cease all work immediately upon receipt of notice of termination and shall not be entitled to payment for any work performed after receipt of notice of termination, absent an express written agreement from CITY. PROFESSIONAL SERVICES AGREEMENT- LEGACY CROSSING MARKET ASSESSMENT AND ABSORPTION STUDY PAGE20F6 ---PAGE BREAK--- C. Extent of Agreement This Agreement may be amended only by written instrument signed by all parties hereto. D. Data of Record CITY shall make available to CONSUL TANT all technical data of record in CITY possession required by CONSULTANT relating to the PROJECT. All reports, and other data, furnished to CONSULTANT by CITY shall be returned to CITY. All designs, drawings, specifications, documents, and other work product prepared by CONSULT ANT prior to completion or termination of this Agreement are instruments of service for PROJECT and are property of CITY which shall be delivered to CITY by CONSULT ANT upon completion of PROJECT. CONSULTANT shall be entitled to rely on the completeness and accuracy of all information provided to it by the CITY. E. Standards of Work CONSUL TANT agrees that the performance of work described in this Agreement including attachments and exhibits and pursuant to this Agreement shall be done in a professional manner and shall conform to professional standards and CONSUL TANT shall use that degree of care and skill ordinarily exercised under similar circumstances by members of the profession. CONSULT ANT shall perform services as expeditiously as possible as is consistent with professional skill and care and the orderly progress of the work. Unless approved by CITY, CONSULTANT shall not exceed the time limits established by the schedule, except for circumstances out of CONSULT ANT's control. F. Insurance CONSULTANT shall maintain through this Agreement the following insurances: 1. Worker's compensation and employer's liability insurance as required by the State of Idaho. 2. Comprehensive automobile and vehicle liability insurance covering claims for injuries to members of the public and/or damages to property of others arising from use of motor vehicles, including on-site and off-site operations, and owned, non owned, or hired vehicles, with one million dollars ($1,000,000) combined single limits; 3. Commercial general liability insurance covering claims for injuries to members of the public or damage to property of others arising out of any covered negligent act or omission of CONSULT ANT or of any of its employees, agents, or subcontractors, with one million dollars ($1,000,000) per occurrence and in the aggregate; G. Indemnity and Hold Harmless 1. CONSULT ANT waives any and all claims and recourse against CITY including rights of contribution for loss or damage to persons or property arising from, or PROFESSIONAL SERVICES AGREEMENT- LEGACY CROSSING MARKET ASSESSMENT AND ABSORPTION STUDY PAGE3 OF6 ---PAGE BREAK--- growing out of, or in any way connected with or incident to CONSULT ANT's performance of this Agreement, except for liability arising out of the negligence of CITY or its officers, agents or employees. 2. CONSUL TANT agrees to indemnify and hold harmless CITY and its officers, agents and employees against all losses and damages of any nature whatsoever resulting from any injury or damages sustained by any person(s) or property to the extent resulting from any negligent act, error or omission of CONSULT ANT or its agents, employees, subcontractors or consultants. This indemnity and hold harmless Agreement shall not be limited by reason of the specification of any particular insurance coverage required under the terms of this Agreement. 3. It is understood and agreed that this Agreement does not contemplate handling of, or design services including use of, asbestos or any hazardous material or any toxic substance. Therefore, CITY agrees to hold harmless, defend and indemnity CONSULT ANT for all claims, lawsuits, expenses or damages arising from or related to the handling, use, treatment, purchase, sale, storage or disposal of asbestos, asbestos products or any hazardous material or any toxic substance (or hazardous materials or toxic substances in general) other than for CONSULT ANT's sole negligence. H. Costs and Attorney Fees In the event either party incurs legal expenses to enforce the terms and conditions of this Agreement, the prevailing party is entitled to recover reasonable attorney's fees and other costs and expenses, as determined by a court or through alternate dispute resolution. I. Jurisdiction and Venue It is agreed that this Agreement shall be construed under and governed by the laws of the State of Idaho. In the event of litigation concerning it, it is agreed that proper venue shall be the District Court of the Second Judicial District of the State of Idaho, in and for the County of Latah. J. Binding of Successors CITY and CONSULT ANT each bind themselves, their partners, successors, assigns, and legal representatives to the other parties to this Agreement and to the partners, successors, assigns, and legal representatives of such other parties with respect to all covenants of this Agreement. K. CITY Representatives CITY shall name a representative for PROJECT to coordinate PROJECT. The authorized representatives shall examine the documents of the work as necessary, and shall render decisions related thereto in a timely manner so as to avoid unreasonable delays. PROFESSIONAL SERVICES AGREEMENT- LEGACY CROSSING MARKET ASSESSMENT AND ABSORPTION STUDY PAGE40F6 ---PAGE BREAK--- L. Conflict of Interest CONSULT ANT covenants that it presently has no interest and shall not acquire any interest, direct or indirect, in PROJECT, which would conflict in any manner or degree with the performance of its services hereunder. CONSUL TANT further covenants that, in performing this Agreement, it shall employ no person who has any such interest. M. Special Provisions 1. Ownership and Publication of Materials. All reports, information, data, and other materials prepared by CONSULT ANT pursuant to this Agreement shall be the property of CITY, which shall be the exclusive and unrestricted authority to release, publish, or otherwise use them, in whole or in part. All such materials developed under this Agreement shall not be subject to copyright or patent in the United States or in any other country without the prior written approval and express authorization of CITY. It is mutually understood that any alterations made to documents without CONSULT ANT's direction shall void CONSULT ANT's liability under this subsection. 2. Disclosure of Materials. It is expressly understood by CITY and CONSULTANT that all reports, information, data and other materials prepared by CONSULT ANT pursuant to this Agreement, may be subject to disclosure under Idaho Code Title 9, Chapter 3, commonly known as the Idaho Public Writings Law. 3. Americans With Disabilities Act. With specific respect to design requirements of the Americans with Disabilities Act of 1990 (ADA), CITY understand that legal interpretation of ADA is not a design professional issue to be addressed by CONSULTANT and, accordingly, CITY agree to waive any action against CONSULT ANT and agrees to indemnify and defend CONSULT ANT against any claim arising out of legal interpretation of the ADA other than for CONSUL TANT's sole negligence. N. PROJECT Confidentiality: Maintaining confidentiality of PROJECT information, including sensitive information about CITY. All PROJECT communications and reports for PROJECT shall be handled in a professional manner. After PROJECT, CONSULTANT shall return to CITY all documents obtained from CITY or generated during the course of this PROJECT. CITY may modify this approach prior to finalizing PROJECT contract documents, if so desired. 0. Modification and Assignability of Agreement This Agreement contains the entire agreement between the parties concerning PROJECT, and no statements, promises, or inducements made by either party, or agents of either party, are valid or binding unless contained herein. This Agreement may not be enlarged, modified, or altered except upon written agreement signed by the parties hereto. CONSULT ANT may not subcontract or assign its rights (including the right to · compensation) or duties arising hereunder without the prior written consent and express PROFESSIONAL SERVICES AGREEMENT- LEGACY CROSSING MARKET ASSESSMENT AND ABSORPTION STUDY PAGE50F6 ---PAGE BREAK--- authorization of CITY. Any such subcontractor or assignee shall be bound by all of the terms and conditions of this Agreement as if named specifically herein. P. Non-discrimination. CONSULT ANT shall not discriminate against any employee or applicant for employment on the basis of race, color, religion, creed, political ideals, sex, age, marital status, physical or mental handicap, or national origin. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date indicated above. CONSULTANT CITY Johnson Economics L.L.C. City of Moscow, Idaho B . By Bill Lambert, Mayor ACKNOWLEDGMENT STATE County of SS. PROFESSIONAL SERVICES AGREEMENT - LEGACY CROSSING MARKET ASSESSMENT AND ABSORPTION STUDY PAGE6 0F6 ---PAGE BREAK--- EXHIBIT SCOPE OF WORK A market study will be completed to obtain demographic and market for the outlined range of prospective land uses. Fulfillment of the market feasibility analysis will entail completion of the following analytical steps: 1. Conduct a kick-off meeting with CITY, which will allow for a tour of the study area as well as discussion of key opportunity parcels and public policy objectives in the area. 2. Physically inspect the study area and subareas to evaluate their and weaknesses with respect to the prospective program options. The evaluation will focus on the following physical and locational attributes: local and regional accessibility from the primary and secondary market areas, visibility, character and type of surrounding land uses, site configuration, nature of current physical improvements in the study area, and other factors that may become evident during the site analysis. 3. Evaluate residential development opportunities. a. Delineate the primary (supply) and competitive (demand) market areas and spheres of influence for the subject property as a residential location. Review relevant available materials, including previous work completed in the district that is publicly available. b. Identify and survey currently active and proposed competitive rental housing developments within the competitive market area. Provide information with respect to the following: • Location; • Date of development; • Unit sizes and mix; • Rent levels by type of unit; and • PROJECT amenities. c. Identify and survey currently active and proposed competitive ownership housing developments within the competitive market area. Provide information with respect to the following: PROFESSIONAL SERVICES CONSULTATION AGREEMENT EXHIBIT"A" PAGE 1 OF4 ---PAGE BREAK--- • Location; • Date of development; • Total units; • Unit sizes and mix; • Pricing; and • Sales history. d. Determine projected rental rates and achievable in the district. Pricing estimates will be based on the comparative position of the subject site in relation to other similar projects. e. In view of the preceding research and analysis, draw conclusions regarding market conditions and achievable pricing for rental and ownership residential projects in the district. f. Evaluate current and projected economic and demographic trends relating to housing demand with emphasis on the relevant market area. Specific socioeconomic variables that would be examined would include: population, preference for ownership versus rental housing, income, household composition and other pertinent factors. g. Project short- and mid-term rental and ownership housing demand in the primary market area. Considerations in this analysis will include the following: population and household characteristics stratified by income range and household size; preference for ownership versus rental housing; projected local employment trends; and other factors that may become evident during the course of our research. 4. Evaluate retail I commercial development opportunities. a. Delineate the competitive market area in which the subject PROJECT would compete b. Identify and survey a selected number of comparable buildings and developments in order to understand market conditions. Characterize these representative projects with respect to: PROJECT name, location, date of development, total rentable area, current occupancy, lease rate structure, tenant orientation and other pertinent information. c. Prepare a retail spending patterns analysis, evaluating retail leakage from the district and relevant trade areas for alternative retail formats. d. Interview local brokers to verify findings and assess the competitive position of the subject site vis-a-vis the remainder of the competitive market. e. Prepare an analysis of retail market leakage to assess prospective retail opportunities by category. PROFESSIONAL SERVICES CONSULTATION AGREEMENT EXHIBIT"A" PAGE20F4 ---PAGE BREAK--- 5. Evaluate office commercial development opportunities. a. Prepare an economic overview of the Moscow area, with an emphasis on the region's industrial composition. Prepare an overview of historical and projected employment trends in the metropolitan area as well the relevant trade area, both in terms of aggregate employment and employment by major industry classification. Summarize the region's general employment growth outlook using available secondary data sources. b. Delineate the primary (demand) and competitive (supply) market areas for the project. c. Analyze the area's office real estate markets. d. Using available secondary data sources, and working in close cooperation with selected brokerage firm(s), analyze the market area's existing supply of office space. Issues that will be explored, provided sufficient information is available, include: • Identification of the region's key office space concentrations and tenant compositions that characterize those markets; • Spec space occupancy rates and rent levels by product type and submarket; • Historical absorption by product type and submarket; • Correlation between types of firms (by industry) that occupy specific types of office space. e. Evaluate the competitive position of subareas within the study area as a locale for a range of prospective use types vis-a-vis other potentially competitive locations identified during our analysis. f. Analyze key regional macroeconomic variables, particularly sectoral employment growth patterns and projections, which have a bearing on the demand for office space. g. Develop office space demand forecasts for the study area based on the following: historical space absorption trends, regional development patterns, competitive advantages of the study area and other qualitative demand factors. The analysis will identify the magnitude of projected demand, as well as providing a breakdown of the profile of projected demand by sector and tenant size. h. Evaluate the market potential for office development in view of: the magnitude of demand in the market area as a whole, occupancy rates among existing comparable projects, projected competition from projects that are either under construction or proposed, and locational characteristics of the study area. Translate the preceding market research and analysis into development recommendations addressing the following: PROFESSIONAL SERVICES CONSULTATION AGREEMENT EXHIBIT"A" PAGE3 OF4 ---PAGE BREAK--- • Current and future strength and depth of market support for development at the site; • Current achievable asking/effective rents; • Types of users and where the demand is coming from; and • Anticipated net absorption in the area and the subject site. 6. Interview representatives of the University of Idaho to assess their anticipated future needs for space in the district. 7. Consolidate the findings of the market analysis (Study), summarizing current and projected market conditions, as well as projected market depth over the short- and mid-term for the full range of prospective use types. 8. Evaluate the likely redevelopment potential in the district through mapping of value per square foot ratios for properties within the study area, reconciled with current market land values by use type. This work would be supported by a financial analysis of the residual land values supported by alternative development formats. 9. Assemble baseline economic and market data for use in a workshop in Moscow to assess likely redevelopment scenarios. Participate in a workshop with CITY to present research and conclusions, as well as to develop scenarios and development forms for financial viability testing. 10. Prepare a conclusion-oriented report summarizing our conclusions. This report would be technical in nature, but also include supporting materials that would be appropriate for broader circulation. PROFESSIONAL SERVICES CONSULTATION AGREEMENT EXHIBIT"A" PAGE40F4