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HomeMy WebLinkAboutC15104 Mason & Mason, Inc. - Parkview Office ComplexCITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT REQUEST: Approve a two-year extension of the Property Management Agreement (Contract # C15104) with Mason & Mason Inc. for the management services of Parkview Office Complex. APPLICANT: Mason & Mason Inc. 2609 Honolulu Ave. #100 Montrose, CA 91020-1706 CASE NOS. DATE: August 26, 2004 CONTENTS: One (1) copy of the Contract No. C15104 - Property Management of Parkview Office Complex Recommendation: By Minute motion, approve a two-year extension of Contract C15104 for property management services for Parkview Office Complex. Contract Price will not Change; Contract price is $66,000 annually) Background: Since Mason & Mason Inc. began managing the Parkview Office Complex, occupancy has remained steady at 90% or above. The current occupancy rate is '100%, with 81 % of the tenants operating as governmental, quasi -governmental, or non-profit entities. During the 2003-2004 fiscal year Mason & Mason has negotiated a five- year lease agreement with the County of Riverside County Supervisor to lease office space at Parkview Office Complex, and facilitated the relocation of the Cove Commission in a timely manner. Staff Report Management Contract C15104- Property Management of Parkview Office Complex Page 2 of 2 Mason & Mason has a great working relationship with all the tenants at Parkview Office Complex. Mason & Mason's expert knowledge regarding the various property tax issues surrounding government owned commercial property allows them to continually assist the tenants with their property tax concerns. In addition, Mason and Mason provides exclusive management services to Parkview Office Complex and the City of Palm Desert; they do not operate or manage any other properties in the Coachella Valley. It is staffs recommendation to extend the management contract with Mason & Mason for an additional two years. Submitted By: Paul S. Gibson, Director of Finance Approval: Carlos L. Ortega y Manager PSG:AH:ah Attachments (1) CITY COUNCIL TION: APPROVED.,,., ✓ DENIED RECEIVED OTHER MEETI AYES: NOES: ABSENT: ABSTAIN: VERIFIED BY: i2/f Original on File wit i City Clerk's Office Contract No. C15104 PROPERTY MANAGEMENT AGREEMENT THE CITY OF PALM DESERT, a public body, corporate and politic (hereinafter "Owner") and MASON & MASON, INC. (hereinafter "Manager") agree as follows: 1. The Owner hereby hires Manager, and Manager accepts employment as the manager of the real property known as The Parkview Professional Building (Buildings 444 and 555) located at 73-710 and 73-720 Fred Waring Drive, Palm Desert (the "Property"), upon the terms hereinafter set forth, for the period of 2 years commencing on November 1, 2004; provided, however, that either party hereto may terminate this contract with or without cause during the term hereof. Owner and Manager acknowledge and agree that this Agreement establishes and constitutes only a management agreement between the parties, that the parties are not joint ventures or partners, and that Manager shall not be deemed to be an employee of Owner. Manager shall at all times be an independent contractor. 2. Manager shall: (a) direct, supervise, and manage the operation of the Property on the terms and conditions set forth herein. (b) Use best efforts and due diligence in the performance of this Agreement and to exercise the highest degree of professional competence in managing the Property so as to provide Owner with the maximum economic return consistent with proper management. (c) Assist The City of Palm Desert Finance Department in the rendering of statements of receipts, expenses and charges to Owner on monthly basis. (d) Abide by those standards and instructions that Owner may issue from time to time or other standards governing the management and operation of the Property, notwithstanding the authority granted in this Agreement. (e) Advertise the availability for rental of the herein described Property or any part thereof, and to display "for rent" signs thereof, provided the Manager first receives the Owner's approval of the maximum costs therefore; to promote collection of rents and other charges and expenses due or to become due and give receipts therefore, provided, however, all checks shall be made payable to the Owner; to sign, renew or cancel leases for the Property or any part thereof provided the Manager first receives the Owner's written approval of the lease; to terminate tenancies and to sign and serve in the name of the Owner such notices as are appropriate; to institute and prosecute actions to evict tenants and to recover possession of said Property in the name of the Owner and recover rents and other sums due, and when expedient, to settle, compromise, and release such actions or suits or reinstate such tenancies. H:\WPDOCS\INTEROFFICE MEMOS\PARKVIEW\PARKVIEW 2003-12004\PROPMGMT2004.DOC Contract No. C15104 Manager shall not decline to lease any space on the Property to a prospective tenant on the basis of the tenant's race, color, creed, national origin, sex, or any other classification then protected by law. Prior to executing any lease with a tenant, Manager shall investigate the financial ability and history of the tenant to pay rent, perform necessary credit checks, and obtain -references from employers and prior landlords, -to -the extent deemed necessary by Manager to protect Owner against financial loss and to protect the physical condition of the Property. All expenditures incurred by Manager for duties described in this Paragraph shall be considered operating expenses of the Property. (f) Hire, discharge and supervise all contracted labor required for the operation and maintenance of the Property. Manager shall not discriminate against any prospective contractor because of race, creed, color, national origin, or sex or any other classification then protected by law. To the extent Manager performs any of its duties through Owner's attorneys or agents, Manager shall not be responsible for their acts, defaults or negligence if reasonable care has been exercised in their appointment and retention. Notwithstanding the foregoing, the Manager shall not contract any labor without the Owner's prior written approval thereof, and no such contracts shall be for a term that cannot be terminated by the Owner at will, without cause. Any contracts entered into by the Manager without the Owner's prior written consent shall not be binding upon the Owner, and shall be solely the responsibility of the Manager unless and until ratified by the Owner. (g) Make contracts for electricity, gas, fuel, water, telephone, window cleaning, ash or rubbish hauling and other services or such of them as the Manager shall deem advisable. The Owner shall assume the obligations of any contract so entered into at the termination of this Agreement. (h) Manager shall receive, consider, and respond to all tenant complaints or problems in a professional and businesslike manner consistent with Manager's authority and duties as described in this Agreement. (i) Cause the Property to be maintained in a good, clean, and sanitary condition acceptable to Owner at all times, and to be repaired as necessary to maintain this condition. To this end, Manager shall: (i) Supervise the performance of the following, subject to any limitations imposed by Owner: all interior and exterior cleaning, painting, decorating, and carpentry; the maintenance and repair of plumbing, heating, and ventilation systems, and elevators; the maintenance of outdoor grounds and facilities; and any other normal maintenance and repair work that becomes necessary. (ii) Systematically and promptly receive and investigate all service requests from tenants, take any necessary action, and keep records of the action taken. Emergency requests shall be received and serviced on a 24-hour basis. Complaints of a serious nature shall be reported to Owner after investigation by Manager. H:\\VPDOCS\INTEROFFICE MEMOS\PARKVIEW\PARKVIEW 2003/004\PROPMGMT2004.DOC Contract No. C15104 (iii) Purchase materials, supplies, equipment, tools, appliances, and services that are necessary for the operation and maintenance of the Property. _-(iv) Supervise the continuing performance of preventative - maintenance for the Property as deemed necessary by Manager. (v) Contract with independent contractors, as deemed necessary by Manager, for the maintenance and repair of air conditioning and heating systems, elevators, and other items requiring special maintenance and repair skills not usually possessed by regular maintenance employees. The Manager agrees to secure the prior approval of the Owner on all expenditures in excess of $500 for any one item, except monthly or recurring operating charges and emergency repairs in excess of the maximum, if in the opinion of the Manager such repairs are necessary to protect the Property from damage or prevent damage to life or to the property of others or to avoid suspension of necessary services or to avoid penalties or fines or to maintain services to the tenants as called for in their leases, and the Manager has not been able to obtain the prior approval of the Owner in a timely manner. In any of these events, however, Manager shall notify Owner of all relevant facts as soon as possible after the occurrence of the event giving rise to the expenditure. (j) On or before the tenth day of each calendar month, Manager shall prepare and submit to Owner a tenant delinquency reportforthe Property. Avacancy report shall be prepared by Manager and submitted to Owner on a monthly basis. (k) Perform any other services, including the transition services, described in Exhibit B hereto. 3. (a) Manager shall use its best efforts to collect all rents and revenues from the Property. (b) Manager shall have no authority to write checks. Owner shall have the sole, exclusive check writing authority on such account. (c) Manager shall maintain the system of controls designed to insure the authenticity of bills, invoices, and statements charged and paid. In carrying out this responsibility, Manager shall authorize all purchasing and the hiring of services for the Property only by supervisory personnel at Manager's office. If Owner fails to provide Manager with a list of approved suppliers, Manager shall have the authority to select any appropriate supplier. (d) Manager shall abide by policy, procedures and formats established in the Policy & Procedure Manual provided November 1, 1998 unless changed in writing by Owner. H:\WPDOCS\INTEROFFICE MEMOS\PARKVIEW\PARKVIEW 2003S004\PROPMGMT2004.DOC Contract No. C15104 4. Any approvals or signatures required from the Owner shall be provided by the Owner by either the CITY OF PALM DESERT and/or Paul S. Gibson, Director of Finance or Jose Luis Espinoza, Finance Operations Manager of the City of Palm Desert Finance Department. No leases shall be executed, no actions to evict tenants shall be commenced or prosecuted, no contracts -shall be executed, and no checks shall be written; without the prior written approval of either the CITY OF PALM DESERT and/or Paul S. Gibson, Director of Finance or Jose Luis Espinoza, Finance Operations Manager of the City of Palm Desert Finance Department. Mason & Mason Property Management will not have the authority to sign checks or enter into contracts. 5. The Owner shall: (a) Indemnify and save the Manager harmless from any and all costs, expenses, attorney's fees, suits, liabilities, damages or claim for damages, including but not limited to those arising out of any injury or death to any person or persons or damage to any property of any kind whatsoever belonging, including Owner, in any way relating to the management of the Property by the Manager or the performance or exercise of any of the duties, obligations, powers or authorities herein or hereafter granted to the Manager, but only to the extent of the Manager's performance of the Agency's duties under this Agreement; to carry, at Owner's sole cost and expense, such public liability, property damage and worker's compensation insurance as shall be adequate to protect the interests of the Manager and Owner, the policies for which shall name the Manager as an additional insured. Notwithstanding the foregoing, the Owner shall not be liable to indemnify the Manager for losses attributable to the Manager's negligent or intentional acts or omissions. (b) To pay the Manager: (i) For Management: the sum of $5,500 per month. As stated above, all salaries, benefits, and costs for the on -site manager shall be paid by the Manager. (ii) For Leasing: no fees paid to MASON & MASON PROPERTY MANAGEMENT; commission to brokers not associated with the management company pursuant to a commission schedule approved by the Owner. (iii) The following is included in the scope of services: quarterly rent survey, quarterly and annual analysis of CAMs and all other expenses. In the event that the Owners shall request the Manager to undertake work exceeding that usual to normal management, then a fee shall be agreed upon for such services before the work begins. Normal management does not include modernization, refinancing, fire restoration, major rehabilitations, obtaining income tax advise, presenting petitions to planning or zoning committees, advising on proposed new construction or other counseling. (See scope of services for Mason & Mason Property Management, Exhibit A.) 6. If it shall become necessary for Manager or Owner to give notice of any kind, the same shall be written, and served, by sending such notice by certified mail to H:\WPDOCS\INTEROFFICE MEMOS\PARKVIEW\PARKVIEW 20034004\PROPMGMT2004.DOC Contract No. C15104 the address shown under their signature. 7. As stated above, either party hereto may terminate this Agreement prior to the scheduled termination date with or without cause during the term hereof. On termination of this Agreement, Owner -and -Manager agree as follows: (a) All of the records in Manager's possession pertaining to the operation of the Property, together with all supplies, equipment, or other items of property owned by Owner and in Manager's possession, shall be immediately delivered to Owner. (b) Manager's right to compensation shall immediately cease, except that Manager is entitled to compensation for services rendered before the termination date. In addition, if the termination is without cause, then the Owner shall pay up to 30 days reasonable compensation to Manager (provided, however, such compensation shall be adjusted pro-rata if less than 30 days remain on the term hereof). (c) The agency relationship created under this Agreement shall immediately cease, and Manager shall have no further right or authority to act for or on behalf of Owner. 8. This Agreement shall be binding upon the successors of the Manager, and the heirs, administrators, executors, successors and assigns of the Owner. 9. If any litigation is commenced between the parties to this Agreement concerning the Property, this Agreement, or the rights and duties of either party with respect to this Agreement, the party prevailing in the litigation shall be entitled, in addition to any other relief that may be granted in the litigation, to a reasonable sum as and for its attorneys' fees in the litigation that shall be determined by the court in the litigation or in a separate action brought for that purpose. 10. The provisions of this Agreement shall be binding on and shall inure to the benefit of both of the parties and to their respective heirs, executors, administrators, successors, and assigns, but nothing in this Paragraph shall be construed as a consent by Owner to any assignment of this Agreement or any interest in it by Manager. 11. This Agreement constitutes the sole agreement between the parties regarding the matters contained in it. This Agreement may not be changed or modified except by a writing executed by both of the parties. H:\WPDOCSVNTEROFFICE MEMOS\PARKVIEW\PARKVIEW 20035004\PROPMGMT2004.DOC Contract No. C15104 The parties acknowledge having read the foregoing prior to execution and receipt of a duplicate original dated this 26th day of August , 2004. - CITY OF PALM DESERT - MASON & MASON PROPERTY a public body, corporate and politic MANAGEMENT By: By: ROBERT A. SPIEGEL, MAYOR ATTEST: RACHELLE D. KLASSEN, CITY CLERK H:\WPDOCS\NTEROFFICE MEMOS\PARKVIEW\PARKVIEW 20036004\PROPMGMT2004.DOC Exhibit "A" PARKVIEW PROFESSIONAL BUILDINGS SCOPE OF MANAGEMENT SERVICES The flat $5,500 monthly fee covers the services generally outlined below: 1. All tenant relations, including but not limited to typical requests for repairs, services & inquiries; rent collection when necessary; supervise periodic suite maintenance. 2. Respond to all inquiries regarding space for lease; negotiate; lease subject to City approval; draft lease agreements and secure signatures. 3. Meet with designated city employee monthly to approve all invoices and review rent collections. 4. Be available for periodic City Council meetings to respond to the status of the buildings and/or leases currently being negotiated. 5. Supervise all maintenance contracts with the exception of landscaping. 6. Prepare an annual rent survey of competing space to be used to establish rent levels for new or renegotiated leases. Items not included in the flat fee are as follows: Construction related supervision including bid procurement. Small claims actions filed on behalf of the City. Tax appeal or tax assessments These items will be billed on an hourly basis at an hourly rate of $75 per hour for Jerry Schmitz' time and $300 per hour for Masons' time. Before undertaking any of the above tasks, we will review the specifications of the task and provide an estimate of the costs. All billings for hourly work will be submitted annually with supporting documentation. In addition to the flat fee, a telephone installed at the Schmitz residence will be paid for monthly by the City as landlord to avoid establishing a management office within the building. The City retains all accounting and collection authority which is outside the scope of the Mason & Mason assignment.