City Council Report


City Council Meeting: January 24, 2012

Agenda Item: 3-O


To: Mayor and City Council 

From: Martin Pastucha, Director of Public Works

Subject: Guaranteed Maximum Price Amendment for Construction for Palisades Garden Walk and Town Square Project


Recommended Action

Staff recommends that the City Council:

1.     Authorize the City Manager to negotiate and execute a Guaranteed Maximum Price amendment to Design-Build Contract No. 9395 (CCS) in an amount not to exceed $47,014,773 (includes an approximate 5% contractor contingency, 10% owner contingency and allowances) with W. E. O誰eil Construction Company, a California-based company, for construction services for the Palisades Garden Walk and Town Square. This will result in a new contract in the amount of $47,090,523.

2.     Appropriate the budget increases and authorize the budget changes as outlined in the Financial Impacts and Budget Actions section of this report.

3.     Authorize the Director of Public Works to issue any necessary change orders to complete additional work within budget authority.


Executive Summary

On June 28, 2011, Council approved a contract with W. E. O誰eil Construction Company as the design-builder for the construction of the Palisades Garden Walk and Town Square Project. The design-build team also includes James Corner Field Operations as the landscape architect. Staff recommends an amendment to the design-build contract with W. E. O誰eil Construction Company for construction services of Palisades Garden Walk and Town Square for a Guaranteed Maximum Price of $47,014,773. This amount includes $305,000 in added construction services and $7,866,619 in owner contingency and contract allowances as outlined in the Discussion section of this report. The revised total contract amount, including this Guaranteed Maximum Price amendment, is $47,090,523, inclusive of the previously approved preconstruction fee of $75,750.



On June 28, 2005, Council adopted an update to the 1993 Civic Center Specific Plan (CCSP), setting forth planning policies and land use and development regulations for a 67-acre area bounded by Pico Boulevard on the south, Fourth Street on the east, Ocean Avenue on the west, and Colorado Avenue on the north.


An important element of the CCSP is the creation of new parks and open space. This includes creating Palisades Garden Walk, a new six-acre park north of Olympic Drive, west of Main Street, south of the Interstate-10 Freeway, and east of Ocean Avenue, with an additional one-acre Town Square in front of City Hall that is oriented to civic and community activities. Additionally, improvements to the surrounding streetscapes and freeway capping are an integral part of the CCSP. During the CCSP community input process, participants articulated their vision for Palisades Garden Walk, seeing this project as possibly the last opportunity to create a new public open space in Santa Monica that rivaled other renowned gathering places nationally and internationally.


On June 9, 2009, Council approved a list of Redevelopment Agency funding priorities that included a partial allocation of $25,000,000 specifically for design and construction of Palisades Garden Walk and Town Square and their surrounding streetscapes. In addition, $2,000,000 for capping the I-10 Freeway at the adjacent McClure Tunnel was approved. Subsequently, on June 23, 2009, Council adopted the FY2009-10 Budget including these capital improvement projects. On May 24, 2011, Council amended their funding priorities and allocated the full development cost for the project, totaling $46,098,276 (includes $2,000,000 for capping the I-10 Freeway).


On April 13, 2010, Council awarded a design contract to James Corner Field Operations (JCFO) to design the park and town square described in the CCSP. A key factor in the selection of JCFO was their creative design approach and commitment to engaging the public in the planning and design of public open spaces.


Following a comprehensive community engagement and design process, Council approved the design development direction for the park on June 14, 2011, and for town square on October 25, 2011; and directed staff to move forward with construction documents.


On June 28, 2011, Council approved Design-Build Contract No. 9395 (CCS) with W. E. O誰eil Construction Company (W. E. O誰eil) in the amount of $75,750, to provide preconstruction services with a contract price not to exceed $39,000,000 for the entire Palisades Garden Walk and Town Square Project. Included in that June 28th report to Council was a mention of future needs for encumbrances of third party contracts, in an amount not to exceed $7,000,000, for direct owner cost project related services including testing/inspection and construction management services.



Guaranteed Maximum Price for Construction This design-build contract is for a modified design-build delivery system, where the previously retained designer痴 contract, JCFO, is assigned to the design-builder, W. E. O誰eil. W. E. O誰eil proposed an initial fixed preconstruction fee of $75,750 (including contingency) for an expedited preconstruction phase that included assessing the relevant programming documents, tests, reports, and preliminary concepts in order to give the City a concise, accurate Guaranteed Maximum Price (GMP) for the construction phase. W. E. O誰eil痴 bid also locked in a percentage mark-up for the design and preconstruction GMP and for the construction GMP amendment, thereby providing a fixed profit margin for the project duration. Staff recommends a GMP amendment to the existing Design-Build Contract No. 9395 (CCS) for construction of the Palisades Garden Walk and Town Square Project in the amount of $38,843,154.


Added Scope Staff is also recommending that Council increase the budget to Design-Build Contract No. 9395 (CCS) with W. E. O誰eil by $305,000 for added services including construction of the foundation for the Public Art piece in the park ($200,000) and tree relocation services ($105,000). Funds for these uses were previously budgeted in separate accounts, to be performed by separate contractors. Upon further assessment of the scope of work, staff has determined that it would be more effective to have W. E. O誰eil do this work since they will be providing the lighting and surrounding landscaping for the Public Art piece, as well as tree relocation services, as part of the project.


City Project Cost On August 10, 2010, by adopting Resolution Nos. 10519 (CCS) and 527 (RAS), the City Council and Redevelopment Agency authorized the execution of that the Cooperation Agreement for Payment of Costs Associated with Certain RDA Funded Capital Improvement and Affordable Housing Projects (溺aster Cooperation Agreement or 溺CA) pertaining to the construction and/or implementation of numerous Capital Improvement Projects and Affordable Housing Projects (referenced therein as 典ier One and 典ier Two improvements). Section II of the MCA obligates the Agency to pay the City an amount equal to the cost for the City to carry out the Tier One and Tier Two Capital Improvement Projects, including costs for planning, financing, development, permitting, design, site testing, bidding, construction, and construction management. Section IV of the MCA contains an equivalent provision for the Tier One and Tier Two Affordable Housing Projects.


The Palisades Garden Walk and Town Square Project was listed as a Tier One Capital Improvement Project. Staff has determined that the City痴 cost of implementing this project during the construction phase is approximately seven percent (7%) of the project痴 total cost, which is $2,740,371 (7% of $38,843,154 plus $305,000 ), which amount will be deemed as owner痴 contingency, to be drawn down by the City as project costs are incurred during the course of construction. This cost was not included in the original budget appropriation for the project. Therefore, staff proposes to add these costs, along with the aforementioned contract adjustments, to the budget appropriations for this project and include these costs in the City痴 design-build contract for this project. Additionally, allowances will be added for testing and inspection services, hazardous material monitoring and abatement, geotechnical services, utility connections, and WiFi connections. These allowances will not exceed $5,126,248.


In summary, the total GMP amendment to Design-Build Contract No. 9395 (CCS) for construction services with W. E. O誰eil is as follows:

GMP for construction:

$ 38,843,154

Added scope for construction:

Added owner contingency (7%)

$ 305,000

$ 2,740,371


$ 5,126,248

Previously approved precon fee:

$ 75,750




Upon Council approval of this GMP amendment, construction is scheduled to begin in spring 2012 and be completed by the end of 2013.



Financial Impacts & Budget Actions

The GMP amendment to be awarded to W.E. O誰eil Construction Company is $47,014,773 (including a 5% contractor contingency, a 10% total owner contingency, and allowances), for a new contract total not to exceed $47,090,523. Funds totaling $46,098,276 are available in the FY2011-12 budget in account R01207117.589000, Palisades Garden Walk and Town Square. Award of contract amendment requires an additional appropriation of $687,247 to account R01207117.589000, as well as the transfer of $200,000 from account R01008117.589000, Percent for Arts, and the transfer of $105,000 from account R01095517.589000, Community Forest Renewal, to the Palisades Garden Walk and Town Square account to fund the City痴 cost of implementing this project during the construction phase.


Prepared by: Jean Bellman, Architect




Forwarded to Council:







Martin Pastucha

Director of Public Works


Rod Gould

City Manager