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City Council Meeting: January 25, 2005

Santa Monica, California

TO: Mayor and City Council

Chairperson and Redevelopment Agency

FROM: City Staff

SUBJECT: Award of Contract for the Demolition of the Rear Portion of 1657 Ocean Avenue and Authorization for the City Council and Redevelopment Agency to Execute a Cooperation Agreement for the Project

Introduction

This report recommends that the City Council award a contract to Gonzalez Construction Company, the best bidder, in the amount of $149,996, plus a contingency of $15,000 (10%) for the demolition of the rear portion of 1657 Ocean Avenue, specifically the structure located behind the Chez Jay restaurant formerly used as a motel.

This report also recommends that the City Council and Redevelopment Agency authorize the City Manager and Executive Director to execute a Cooperation Agreement between the two entities for payment of the costs associated with the removal work.

Background

The City of Santa Monica Redevelopment Agency (Agency) acquired the building at 1657 Ocean Avenue on April 11, 2000, as part of the 11.3 acre acquisition of the RAND property. The front portion of the structure houses Chez Jay restaurant and four former motel units. The rear section, to be demolished, includes single and two story portions that housed six former motel units.

The Agency has a lease agreement with Chez Jay for the front portion of the building (the restaurant and four adjacent former motel units). The Chez Jay restaurant and four units attached to the restaurant, which Chez Jay currently leases and maintains, are not to be removed. In 1986 a Notice of Intent to Apply Restrictions Withdrawal No. 103W (a) was recorded, which removed the property from the rental housing market. There are no existing Rent Control restrictions preventing the alteration of structures on this property.

The rear portion of the building to be demolished is dry-rotted, water damaged and has lost some structural integrity. This dilapidated portion of the building is unsanitary, unsafe, a public health hazard, and dangerous for fire fighters to enter in case of a fire. The two story portion is unfit for human habitation. It can be demolished without disturbing the restaurant and related tenancies.

Discussion

A Notice Inviting Bids for the removal of the structure at 1657 Ocean Avenue was published in the Los Angeles Times on Thursday, August 26, and Saturday, August 28, 2004. The bid package was sent to eleven public plan rooms including five women/minority business enterprise associations. Four contractors and one potential subcontractor requested bid packages and the City Clerk’s office received one sealed bid, which was publicly opened and read aloud on September 20, 2004, by the Deputy City Clerk. The bid result was as follows:

CONTRACTOR	AMOUNT
Gonzales Construction	$149,996

The Engineer’s estimate for the project was $130,000 to $150,000.

Other contractors who purchased bid packages were contacted and indicated that they did not submit bids because the project was too small. One of the non-bidding contractors, who declined due to bonding details, reported that their estimate would have been $162,060, $12,064 higher than the bid submitted by Gonzalez Construction. As the scope of work will not be expanded, there is no evidence that re-bidding the project would result in more bids being submitted.

The best bidder, Gonzalez Construction, supplied the City with the names of previous similar projects. City staff contacted the agencies and companies representing these projects and all respondents reported that the Contractor's work quality was satisfactory and that work was completed in a timely and cost-efficient manner. Staff also contacted the Center for Contract Compliance and found Gonzalez Construction in good standing and capable of handling labor compliance issues. The California Contractors State License Board verified that the Contractor's license is active and in good standing.

The project will provide five parking spaces through paving and striping of the site following the demolition of the rear portion of the building.

Budget/Financial Impact

FUNDS REQUIRED:

Contract	$149,996
Contingency	$ 15,000
Total Required	$164,996

Funds in the amount of $164,996 are available from the Earthquake Recovery Redevelopment Fund in account H170743.589000.

Redevelopment Considerations

The Redevelopment Agency, as the owner of the property at 1657 Ocean Avenue, is authorized by Health and Safety Code Section 33400 to maintain, manage, operate, repair and clear such real property. The Cooperation Agreement delegates to the City the Agency’s authority to repair and alter structures on the property and provides for the Agency’s funding of these costs.

Recommendations

Staff recommends that the City Council:

1. Award a construction contract for the demolition of the rear portion of the structure at 1657 Ocean Avenue to the best bidder, Gonzalez Construction Company, in the amount of $149,996, plus $15,000 in contingency;

2. Authorize the City Engineer to issue any necessary change orders to complete additional work within budget authority; and

3. Authorize the City Manager to execute a Cooperation Agreement between the City and the Redevelopment Agency for payment of the costs associated with the alteration of the structure at 1657 Ocean Avenue.

Staff recommends that the Redevelopment Agency:

1. Authorize the Executive Director to execute a Cooperation Agreement between the City and the Redevelopment Agency for payment of the costs associated with the alteration of the structure at 1657 Ocean Avenue.

Prepared by:

Craig Perkins, Director, Environmental & Public Works Management Jeff Mathieu, Director, Resource Management Bob Moncrief, Housing and Redevelopment Manager Tina Rodriguez, Redevelopment Administrator Tony Antich, City Engineer Lauren Friedman, City Architect Alex Parry, Architecture Associate