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Keyser Marston Associates Inc; 2012-10-12;
AGREEMENT FOR THE PREPARATION OF AN AFFORDABLE HOUSING IMPACT FEE NEXUS STUDY KEYSER MARSTON ASSOCIATES, INC. THIS AGREEMENT is made and entered into as of the I3C^ day of Oc^TVber* 20^2,. by and between the CITY OF CARLSBAD, a municipal corporation, ("City"), and Keyser Marston Associates, Inc., ("Contractor"). RECITALS A. City requires the professional services of a consulting firm that is experienced in preparing an Affordable Housing Impact Fee Nexus Study. B. Contractor has the necessary experience in providing professional services and advice related to the preparation of an Affordable Housing Impact Fee Nexus Study. C. Contractor has submitted a proposal to City and has affirmed its willingness and ability to perform such work. NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein. City and Contractor agree as follows: 1. SCOPE OF WORK City retains Contractor to perform, and Contractor agrees to render, those services (the "Services") that are defined in attached Exhibit "A", which is incorporated by this reference in accordance with this Agreement's terms and conditions. 2. STANDARD OF PERFORMANCE While performing the Services, Contractor will exercise the reasonable professional care and skill customarily exercised by reputable members of Contractor's profession practicing in the Metropolitan Southern California Area, and will use reasonable diligence and best judgment while exercising its professional skill and expertise. 3. TERM The term of this Agreement will be effective for a period of one year from the date first above written. The City Manager may amend the Agreement to extend it for an additional one year period or parts thereof in an amount not to exceed Forty Two Thousand Five Hundred and Seventy-Five dollars ($42,575) per Agreement year. Extensions will be based upon a satisfactory review of Contractor's performance. City needs, and appropriation of funds by the City Council. The parties will prepare a written amendment indicating the effective date and length of the extended Agreement. 4. TIME IS OF THE ESSENCE Time is of the essence for each and every provision of this Agreement. 6 COMPENSATION The total fee payable for the Services to be performed during the initial Agreement term will be Forty Two Thousand Five Hundred and Seventy-Five dollars ($42,575). No other compensation for the Services will be allowed except for items covered by subsequent amendments to this Agreement. The City reserves the right to withhold a ten percent (10%) retention until City has accepted the work and/or Services specified in Exhibit "A". Incremental payments, if applicable, should be made as outlined in attached Exhibit "A". City Attorney Approved Version 2/17/12 6. STATUS OF CONTRACTOR Contractor will perform the Services in Contractor's own way as an independent contractor and in pursuit of Contractor's independent calling, and not as an employee of City. Contractor will be under control of City only as to the result to be accomplished, but will consult with City as necessary. The persons used by Contractor to provide services under this Agreement will not be considered employees of City for any purposes. The payment made to Contractor pursuant to the Agreement will be the full and complete compensation to which Contractor is entitled. City will not make any federal or state tax withholdings on behalf of Contractor or its agents, employees or subcontractors. City will not be required to pay any workers' compensation insurance or unemployment contributions on behalf of Contractor or its employees or subcontractors. Contractor agrees to indemnify City within thirty (30) days for any tax, retirement contribution, social security, overtime payment, unemployment payment or workers' compensation payment which City may be required to make on behalf of Contractor or any agent, employee, or subcontractor of Contractor for work done under this Agreement. At the City's election, City may deduct the indemnification amount from any balance owing to Contractor. 7. SUBCONTRACTING Contractor will not subcontract any portion of the Services without prior written approval of City. If Contractor subcontracts any of the Services, Contractor will be fully responsible to City for the acts and omissions of Contractor's subcontractor and of the persons either directly or indirectly employed by the subcontractor, as Contractor is for the acts and omissions of persons directly employed by Contractor. Nothing contained in this Agreement will create any contractual relationship between any subcontractor of Contractor and City. Contractor will be responsible for payment of subcontractors. Contractor will bind every subcontractor and every subcontractor of a subcontractor by the terms of this Agreement applicable to Contractor's work unless specifically noted to the contrary in the subcontract and approved in writing by City. 8. OTHER CONTRACTORS The City reserves the right to employ other Contractors in connection with the Services. 9. INDEMNIFICATION Contractor agrees to indemnify and hold harmless the City and its officers, officials, employees and volunteers from and against all claims, damages, losses and expenses including attorneys fees arising out of the performance of the work described herein caused by any negligence, recklessness, or willful misconduct of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable. The parties expressly agree that any payment, attorney's fee, costs or expense City incurs or makes to or on behalf of an injured employee under the City's self-administered workers' compensation is included as a loss, expense or cost for the purposes of this section, and that this section will survive the expiration or early termination of this Agreement. 10. INSURANCE Contractor will obtain and maintain for the duration of the Agreement and any and all amendments, insurance against claims for injuries to persons or damage to property which may arise out of or in connection with performance of the services by Contractor or Contractor's agents, representatives, employees or subcontractors. The insurance will be obtained from an insurance carrier admitted and authorized to do business in the State of California. The insurance carrier is required to have a current Best's Key Rating of not less than "A-:VH". OR City Attorney Approved Version 2/17/12 with a surplus line insurer on the State of California's List of Eligible Surplus Line Insurers (LESLI) with a rating in the latest Best's Key Rating Guide of at least "A:X". 10.1 Coverages and Limits. Contractor will maintain the types of coverages and minimum limits indicated below, unless Risk Manager or City Manager approves a lower amount. These minimum amounts of coverage will not constitute any limitations or cap on Contractor's indemnification obligations under this Agreement. City, its officers, agents and employees make no representation that the limits of the insurance specified to be carried by Contractor pursuant to this Agreement are adequate to protect Contractor. If Contractor believes that any required insurance coverage is inadequate. Contractor will obtain such additional insurance coverage, as Contractor deems adequate, at Contractor's sole expense. 10.1.1 Commercial General Liability Insurance. $1.000.000 combined single-limit per occurrence for bodily injury, personal injury and property damage. If the submitted policies contain aggregate limits, general aggregate limits will apply separately to the work under this Agreement or the general aggregate will be twice the required per occurrence limit. 10.1.2 Automobile Liability (if the use of an automobile is involved for Contractor's work for City). $1,000,000 combined single-limit per accident for bodily injury and property damage. 10.1.3 Workers' Compensation and Employer's Liability. Workers' Compensation limits as required by the California Labor Code. Workers' Compensation will not be required if Contractor has no employees and provides, to City's satisfaction, a declaration stating this. 10.1.4 Professional Liability. Errors and omissions liability appropriate to Contractor's profession with limits of not less than $1,000,000 per claim. Coverage must be maintained for a period of five years following the date of completion of the work. If box is checked. Professional Liability City's Initials Contractor's Initials Insurance requirement is waived. 10.2. Additional Provisions. Contractor will ensure that the policies of insurance required under this Agreement contain, or are endorsed to contain, the following provisions: 10.2.1 The City will be named as an additional insured on Commercial General Liability which shall provide primary coverage to the City. 10.2.2 Contractor will obtain occurrence coverage, excluding Professional Liability, which will be written as claims-made coverage. 10.2.3 This insurance will be in force during the life of the Agreement and any extensions of it and will not be canceled without thirty (30) days prior written notice to City sent by certified mail pursuant to the Notice provisions of this Agreement. 10.3 Providing Certificates of Insurance and Endorsements. Prior to City's execution of this Agreement, Contractor will furnish certificates of insurance and endorsements to City. 10.4 Failure to Maintain Coverage. If Contractor fails to maintain any of these insurance coverages, then City will have the option to declare Contractor in breach, or may purchase replacement insurance or pay the premiums that are due on existing policies in order to City Attorney Approved Version 2/17/12 maintain the required coverages. Contractor is responsible for any payments made by City to obtain or maintain insurance and City may collect these payments from Contractor or deduct the amount paid from any sums due Contractor under this Agreement. 10.5 Submission of Insurance Policies. City reserves the right to require, at anytime, complete and certified copies of any or all required insurance policies and endorsements. 11. BUSINESS LICENSE Contractor will obtain and maintain a City of Carlsbad Business License for the term of the Agreement, as may be amended from time-to-time. 12. ACCOUNTING RECORDS Contractor will maintain complete and accurate records with respect to costs incurred under this Agreement, All records will be clearly identifiable. Contractor will allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of records and any other documents created pursuant to this Agreement. Contractor will allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 13. OWNERSHIP OF DOCUMENTS All work product produced by Contractor or its agents, employees, and subcontractors pursuant to this Agreement is the property of City. In the event this Agreement is terminated, all work product produced by Contractor or its agents, employees and subcontractors pursuant to this Agreement will be delivered at once to City. Contractor will have the right to make one (1) copy of the work product for Contractor's records. 14. COPYRIGHTS Contractor agrees that all copyrights that arise from the services will be vested in City and Contractor relinquishes all claims to the copyrights in favor of City. 15. NOTICES The name of the persons who are authorized to give written notices or to receive written notice on behalf of City and on behalf of Contractor under this Agreement. For City For Contractor Name Scott Donnell Name Paul C. Marra Title Senior Planner Title Senior Principal Department CED Address 1660 Hotel Circle North, Ste. 716 City of Carlsbad San Diego, CA 92108 Address 1635 Faraday Avenue Phone No. 619-718-9500 Carlsbad, CA 92008 Email pmarra(5)kevsermarston.com Phone No. 760-602-4618 Each party will notify the other immediately of any changes of address that would require any notice or delivery to be directed to another address. City Attorney Approved Version 2/17/12 16. CONFLICT OF INTEREST Contractor shall file a Conflict of Interest Statement with the City Clerk in accordance with the requirements of the City of Carlsbad Conflict of Interest Code. The Contractor shall report investments or interests in all four categories. 17. GENERAL COMPLIANCE WITH LAWS Contractor will keep fully informed of federal, state and local laws and ordinances and regulations which in any manner affect those employed by Contractor, or in any way affect the performance of the Services by Contractor. Contractor will at all times observe and comply with these laws, ordinances, and regulations and will be responsible for the compliance of Contractor's services with all applicable laws, ordinances and regulations. Contractor will be aware of the requirements of the Immigration Reform and Control Act of 1986 and will comply with those requirements, including, but not limited to, verifying the eligibility for employment of all agents, employees, subcontractors and consultants whose services are required by this Agreement. 18. DISCRIMINATION AND HARASSMENT PROHIBITED Contractor will comply with all applicable local, state and federal laws and regulations prohibiting discrimination and harassment. 19. DISPUTE RESOLUTION If a dispute should arise regarding the performance of the Services the following procedure will be used to resolve any questions of fact or interpretation not otherwise settled by agreement between the parties. Representatives of Contractor or City will reduce such questions, and their respective views, to writing. A copy of such documented dispute will be fon^/arded to both parties involved along with recommended methods of resolution, which would be of benefit to both parties. The representative receiving the letter will reply to the letter along with a recommended method of resolution within ten (10) business days. If the resolution thus obtained is unsatisfactory to the aggrieved party, a letter outlining the disputes will be fonwarded to the City Manager. The City Manager will consider the facts and solutions recommended by each party and may then opt to direct a solution to the problem. In such cases, the action of the City Manager will be binding upon the parties involved, although nothing in this procedure will prohibit the parties from seeking remedies available to them at law. 20. TERMINATION In the event of the Contractor's failure to prosecute, deliver, or perform the Services, City may terminate this Agreement for nonperformance by notifying Contractor by certified mail of the termination. If City decides to abandon or indefinitely postpone the work or services contemplated by this Agreement, City may terminate this Agreement upon written notice to Contractor. Upon notification of termination. Contractor has five (5) business days to deliver any documents owned by City and all work in progress to City address contained in this Agreement. City will make a determination of fact based upon the work product delivered to City and of the percentage of work that Contractor has performed which is usable and of worth to City in having the Agreement completed. Based upon that finding City will determine the final payment of the Agreement. Either party upon tendering thirty (30) days written notice to the other party may terminate this Agreement. In this event and upon request of City, Contractor will assemble the work product and put it in order for proper filing and closing and deliver it to City. Contractor will be paid for work performed to the termination date; however, the total will not exceed the lump sum fee City Attorney Approved Version 2/17/12 payable under this Agreement. City will make the final determination as to the portions of tasks completed and the compensation to be made. 21. COVENANTS AGAINST CONTINGENT FEES Contractor warrants that Contractor has not employed or retained any company or person, other than a bona fide employee working for Contractor, to solicit or secure this Agreement, and that Contractor has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or any other consideration contingent upon, or resulting from, the award or making of this Agreement. For breach or violation of this warranty, City will have the right to annul this Agreement without liability, or, in its discretion, to deduct from the Agreement price or consideration, or otherwise recover, the full amount of the fee, commission, percentage, brokerage fees, gift, or contingent fee. 22. CLAIMS AND LAWSUITS By signing this Agreement, Contractor agrees that any Agreement claim submitted to City must be asserted as part of the Agreement process as set forth in this Agreement and not in anticipation of litigation or in conjunction with litigation. Contractor acknowledges that if a false claim is submitted to City, it may be considered fraud and Contractor may be subject to criminal prosecution. Contractor acknowledges that California Government Code sections 12650 et seg.. the False Claims Act applies to this Agreement and, provides for civil penalties where a person knowingly submits a false claim to a public entity. These provisions include false claims made with deliberate ignorance of the false information or in reckless disregard of the truth or falsity of information. If City seeks to recover penalties pursuant to the False Claims Act, it is entitled to recover its litigation costs, including attorney's fees. Contractor acknowledges that the filing of a false claim may subject Contractor to an administrative debarment proceeding as the result of which Contractor may be prevented to act as a Contractor on any public work or improvement for a period of up to five (5) years. Contractor acknowledges debarment by another jurisdiction is grounds for City to terminate this Agreement. 23. JURISDICTIONS AND VENUE Any action at law or in equity brought by either of the parties for the purpose of enforcing a right or rights provided for by this Agreement will be tried in a court of competent jurisdiction in the County of San Diego, State of California, and the parties waive all provisions of law providing for a change of venue in these proceedings to any other county. 24. SUCCESSORS AND ASSIGNS It is mutually understood and agreed that this Agreement will be binding upon City and Contractor and their respective successors. Neither this Agreement or any part of it nor any monies due or to become due under it may be assigned by Contractor without the prior consent of City, which shall not be unreasonably withheld. 25. ENTIRE AGREEMENT This Agreement, together with any other written document referred to or contemplated by it, along with the purchase order for this Agreement and its provisions, embody the entire Agreement and understanding between the parties relating to the subject matter of it. In case of conflict, the terms of the Agreement supersede the purchase order. Neither this Agreement nor any of its provisions may be amended, modified, waived or discharged except in a writing signed by both parties. City Attorney Approved Version 2/17/12 26. AUTHORITY The individuals executing this Agreement and the instruments referenced in it on behalf of Contractor each represent and warrant that they have the legal power, right and actual authority to bind Contractor to the terms and conditions of this Agreement. CONTRACTOR Keyser Marston Associates, Inc. (sign here) Paul C. Marra/Assistant Secretary (print name/title) CITY OF CARLSBAD, a municipal corporation of the State of California By: /tsS^City Manager or Mayor or Divioion Dii'^i?j|^j^Ao^^^>> §S.aiitfaorizQd by the City ManagjlS(J>''^7uX ATTEST: Gerald M. Trirable/Vice President (print name/title) LORRAINE M. WOOD City Clerk If required by City, proper notarial acknowledgment of execution by contractor must be attached. If a corporation. Agreement must be signed by one corporate officer from each of the following two groups. Group A Chairman, President, or Vice-President Group B Secretary, Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: RONALD R. BALL, City Attorney BY: sistant City Attorney City Attorney Approved Version 2/17/12 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California SAN DIEGO County of On } /or?/IQ before me. DOR'S KUGLER, NOTARY PUBLIC T (jatJ Here Insert Name and Title of the C personally appeared Name(s) of Signer{s) OFFICIAL SEAL DORIS KUGLER NOTARY PUBUC-CAUFORNIA g COMM. NO. 1976862 2 SAN DIEGO COUNTY MY^MM. EXP. MAY 21.2016 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) r^are subscribed to the within instrument and acknowledged to me that Wlh^/they executed the same in hls/h^r/their authorized caj)!aclty(ies), and that by hi^?h^r/thei^ signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 1 J I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Place Notary Seal Atwve OPTIONAL Though the information below is not required by law, it may prove valuable to persons rel^ng on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document.! Document Date: ( ( 1__ Number or Kages:..^^::^ ^ -AC^C^ C . Signer{s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) 's Name: igner's Name: Signer • Individual • Corporate Officer — Title(s): • Partner — • Limited • General • Attorney in Fact • Trustee C Guardian or Conservator Other: RIGHTTHUMBPRINT OF SIGNER Top of thumb here t u umer: . Signer Is Representing:. • Individual • Corporate Officer — Title(s): • Partner — • Limited • General • Attorney in Fact • Trustee • Guardian or Conservator • Other: . S) ^-f on f rPf^(r/ Signer Is Representing: /_ RIGHTTHUMBPRINT OF SIGNER ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotary.org Item #5907 Reorder; CaH Toll-Free 1 -800-876-6827 CERTIFICATE OF SECRETARY I, the undersigned, do hereby certify that: (1) I am the duly elected and acting Secretary of Keyser Marston Associates. Inc. a California Corporation; and (2) That Paul C. Marra, Vice President and Assistant Secretary of Keyser Marston Associates, Inc. and Gerald M. Trimble, Vice President, are authorized on behalf of the Corporation to sign the Agreement for Consulting Services between the City of Carlsbad and Keyser Marston Associates, Inc. (3) Further, ail corporate officers of Keyser Marston Associates, Inc. are authorized to enter into contracts and execute instruments in the name of the Corporation or on behalf of the Corporation, pursuant to the Corporation's Bylaws, adopted September 14, 1990. IN WITNESS WHEREOF. I have hereunto subscribed my name and affixed the seal of such corporation this 26th day of October, 2012. Diane M. Chambers, Secretary ^^^^^^^^^^ JTM KEYSER MARSTON ASSOCIATES Mi KEYSER MARSTON ASSOCIATES. AOG 15 2012 PLANNING DEPARTMENT Response to Request for Proposals: Affordable Housing Impact Fee Nexus Study Prepared for: City of Carlsbad Prepared by: Keyser Marston Associates, Inc. 1660 Hotel Circle North, Suite 716 San Diego, CA 92108 Principal-in-Charge: Paul 0. Marra August 15, 2012 I I I I I I I I ADVISORS IN: REAL ESTATE R-EDtVELOPMtNT AtionDABLt HOUSING ECONOMIC DtvttoPMtNT SAN FRANCISCO A. |£RRY tCEYSER TIMOTHY C. KELLY KATE EARLE FUNK DEBBIE M. KERN REED T. KAWAHARA DAVID DOEZEMA ICS ANGEIES KATHLEEN H. HEAD JAMES A. RARE GREGORY D. SOO-HCX> KEVIN E. ENGSTROM JUllE L RDMEY SAN DIEGO GERALD M. TRIMBLE PAUL C. MARRA KEYSER MARSTON ASSOCLATES ADVISORS IN PUBLIC/PRIVATE RIAL ESTATE DEVELOPMENT August 15, 2012 Ms. Michele Masterson Senior Management Analyst Community and Economic Development Department City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008 Re: Proposal for Consulting Services Affordable Housing Impact Fee Nexus Study Dear Ms. Masterson: Keyser Marston Associates, Inc. (KMA) is pleased to submit this proposal to the City of Carlsbad (City) to assist with the preparation of an Affordable Housing Impact Fee Nexus Study. This proposal represents an overview of KMA's qualifications and approach to provide the scope of services identified in your Request for Proposals (RFP). Bacl(ground I I In 1993, the City of Carlsbad established an inclusionary housing program requiring 15% of all residential units within a Master Plan/Specific Plan community or other qualified subdivision with seven units or more be affordable to lower-income households. Housing developments with fewer than seven units are allowed the payment of an in-lieu fee to fulfill their inclusionary housing obligations. The fee is based on the difference in cost to produce a market-rate rental unit versus a lower-income affordable unit. As of September 1, 2011, the In-lieu fee per market-rate unit was $4,515. The in-lieu fee is the single biggest contributor to the City's Housing Trust Fund, which is used to sponsor a range of affordable housing activities including new construction, rehabilitation, and preservation. Establishment of the City's inclusionary requirement has resulted in the creation of nearly 3,000 housing units affordable to low, very low, and extremely low households. Recent court rulings have questioned whether a city can impose an inclusionary ordinance on market-rate rental development (Palmer/Sixth Street Property vs. City of Los Angeles), the legitimacy of affordable housing in-lieu fees (Building Industry Association of Central 1660 HOTEL CIRCLE NORTH. SUITE 716 > SAN DIEGO. CALIFORNIA 92108 • PHONE 619 718 9500 • FAX 619 718 9508 12119ndh 99900.000.003 WWW.KEYSERMARSTONCOM Ms. Michele Masterson, Senior Management Analyst August 15, 2012 City of Carlsbad Page 2 California vs. City of Patterson), and the need to prove a causal link between new home construction and the need for affordable housing before imposing an affordable housing fee (California Building Industry Association vs. City of San Jose). The Palmer case suggests that rental programs will need to be restructured into impact fee- based programs. The Patterson case suggests that affordable housing fees must be calculated in a careful and rigorous manner. The San Jose case suggests that cities must provide a nexus analysis or other evidence showing that housing exactions and in-lieu fees are reasonably related to the increased need for affordable housing caused by the development of new market-rate housing. The City is seeking assistance with the preparation of an affordable housing fee nexus study analyzing the demand for affordable housing resulting from the development of market-rate housing. KMA has developed a model to analyze the nexus between new market-rate residential development and the demand for affordable housing. The KMA model is conducted in compliance with the Mitigation Fee Act, and is used to calculate a nexus-based housing impact fee for rental units and for-sale units. II. Keyser Marston Associates, Inc. Founded in 1973, KMA has one of the largest real estate advisory practices on the West Coast, with experience in all types of residential and commercial real estate. A unique strength of KMA is the depth and continuity of our principals who bring an average of more than 25 years of practical experience in working with business and government. Among KMA's many strengths are the following: • KMA has extensive experience in nexus analysis. KMA developed a methodology and computerized model quantifying the impacts of market-rate development on the need for affordable housing. KMA has prepared numerous nexus analyses, and has developed a refined computer model to conduct the analysis in a highly cost-effective manner. Our nexus work began with an assignment to assist the City/County of Sacramento in designing a comprehensive fee program for all types of non-residential construction. The City's ordinance was challenged by the local Building Industry Association and was tried in the Federal Court system through the Ninth Circuit Court of Appeals, which ruled in favor of the City. The BIA petitioned the U.S. Supreme Court, which reviewed the case and elected not to hear it, letting stand the lower court's decision. At all levels of the court, the sufficiency of the nexus was challenged, and upheld. 12119ndh 99900.000.003 Ms. Michele Masterson, Senior Management Analyst August 15, 2012 City of Carlsbad Page 3 • KMA is local. KMA's long presence in San Diego County enhances our familiarity with local and regional market conditions and their impact on market-rate and affordable housing development. KMA has assisted the cities of San Diego, San Marcos, Vista, Oceanside, and Solana Beach with inclusionary housing programs and impact fee studies. • KMA is i<nowledgeable in tiie analysis of affordable fiousing transactions. KMA is expert in analyzing a full range of residential product types from rental to for-sale, urban to suburban, and very low to moderate income. • KMA is efficient and responsive. A hallmark of KMA's service delivery is the direct and constant involvement of the firm's principals in all KMA assignments. KMA's methodology and approach will provide the City with the highest level of service in a responsive and cost-effective manner. If selected for this contract, Paul C. Marra will be the Principal-in-Charge and primary contact for the City. Mr. Marra is a Senior Principal in the San Diego office who specializes in affordable housing analysis. Key professional staff assigned to this project will also include Linnie A. Gavino, who will serve as project manager, and Consulting Principal, Kate Funk. Ms. Funk is a Senior Principal in KMA's San Francisco office who has specialized in nexus analyses for over 20 years. We believe that KMA offers the City an unparalleled combination of cost-effective technical analysis, a deep knowledge of local real estate development economics, and extensive understanding of best practices for designing appropriate affordable housing policies. KMA has reviewed the City's professional services agreement attached to the RFP. We are not requesting any modifications to the agreement. We appreciate your consideration of Keyser Marston Associates, Inc. for this study. Please feel free to contact us if you have any questions regarding our proposal. Sincerely, KEYSER MARSTON ASSOCIATES, INC. Paul C. Marra attachments 12119ndh 99900.000.003 TABLE OF CONTENTS SECTION FIRM EXPERIENCE 1 PROJECT TEAM 6 PROJECT APPROACH AND SCHEDULE 14 COST ESTIMATE 19 KEYSER MARSTON ASSOCIATES- c> •:> c> .=> L^> c> L^> L=> c> c> c» c> c:> c> c> c> c> FIRM EXPERIENCE KEYSER MARSTON ASSOCIATES. FIRM EXPERIENCE I. Statement of Qualifications KMA is a real estate advisory firm specializing in structuring public/private partnerships and designing effective development policies and strategies. Since 1973, KMA's three offices in San Diego, Los Angeles, and San Francisco have advised over 700 clients with more than 2,000 projects. Our staff of 33 employees serves a diverse client base throughout the western United States, including local cities and former redevelopment agencies, transit agencies, county and state governments, as well as large-scale institutional clients and property owners. For additional information on KMA, please refer to our website at: www.kevsermarston.com. KMA has been on the forefront of establishing inclusionary programs for numerous jurisdictions. Through our ongoing work with dozens of jurisdictions, we have developed a keen understanding of the issues surrounding the structure and administration of affordable housing programs. KMA has developed a methodology and model for preparing nexus analyses to support inclusionary programs and affordable housing impact fees. II. Residential Nexus Experience KMA has prepared residential nexus analyses for 11 jurisdictions in the states of California and Washington to support inclusionary housing programs and similar measures. The KMA residential nexus analysis can be used to support the percentage requirements in inclusionary programs, to substantiate affordable housing impact fees, or to quantify the housing impacts of special projects. KMA has prepared residential nexus analyses for the following jurisdictions: City of San Diego, California, adopted 2011 City of Solana Beach, California, adopted 2011 City of Walnut Creek, California, adopted 2011 County of Napa, California, adopted 2010 City of Fremont, California, adopted 2010 City of San Francisco, California, completed 2007, under discussion City of Seattle, Washington, adopted 2005 City of Concord, California, adoption pending City of Bainbridge Island, Washington, adoption pending City of Elk Grove, California, program not taken to Council City of Hayward, California, program not taken to Council City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 1 August 14, 2012 12119ndh 99900.000.003 In addition to the above list of experience specific to residential nexus analyses, KMA has been preparing nexus analyses for jobs/housing, child care, parks, and other impact fee programs for more than 20 years. KMA has been the lead consultant in most of the major jobs/housing linkage fee programs in California and has worked with over 20 jurisdictions in the design of fees on commercial and industrial construction, including the City of San Diego. III. Inclusionary Housing Experience KMA has assisted 30 cities and counties with inclusionary housing programs. KMA services range from limited tasks such as analyses that support in-lieu fees to the full design of a new inclusionary program with all of its ordinance and implementation provisions. KMA employs its real estate expertise to adapt new or revised programs to local market conditions and policy objectives. KMA avoids the "one size fits all" approach and works with communities to design programs that are appropriate for a particular jurisdiction. Since the Patterson and Palmer court decisions, KMA has been working with clients to modify programs and prepare support materials in light of the new legal environment. We have been working with attorneys on new programs and major updates, jointly analyzing the various ways the ruling could affect fee levels and other aspects of affordable housing requirements placed on new residential projects. Jurisdictions where KMA has worked on inclusionary housing analyses include the following: City of Alameda City of Los Angeles City of San Diego City of Burbank City of Marina City of San Francisco City of Campbell County of Monterey City of San Marcos City of Chula Vista City and County of Napa City of San Mateo City of Claremont City of Novate City of Santa Cruz City of Cupertino City of Oxnard City of Santa Paula City of Dana Point City of Palo Alto City of Solana Beach City of Duarte City of Pasadena City of Vista City of Glendale City of Rancho Cucamonga City of Walnut Creek City of Huntington Beach City of San Buenaventura City of Yorba Linda City of Lafayette City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 2 IV. Comparable Project Experience The following is a brief description of three recent KMA assignments with a similar scope to the requested Affordable Housing Impact Fee Nexus Study: Residential Nexus Analysis, City of San Diego KMA performed a residential nexus analysis to support amendments to the City's Inclusionary Affordable Housing Regulations. KMA completed a fully updated nexus analysis in January 2011 quantifying the linkages between new market-rate units and the demand for affordable housing in San Diego. The KMA analysis determined that the affordable housing fee currently imposed by the City of San Diego is significantly lower than the maximum supportable fees from a nexus perspective. The amendments to the Inclusionary Affordable Housing Regulations were adopted in October 2011. KMA Principal-ln-Cfiarge: Client Project Manager: Client Telepfione: Client E-mail: Paul C. Marra Wendy DeWitt, Director of Policy, San Diego Housing Commission 619.578.7590 wendvd&.sdtic. com Economic Study of Affordable Housing Need, City of Solana Beach KMA assisted the City in establishing a nexus-based impact fee for market- rate rental development and continuing inclusionary requirements (no in-lieu fee option) on market-rate for-sale housing. The City's Affordable Housing Impact Fee was adopted by the Council in March 2011. KMA Principal-ln-Charge: Client Project Manager: Client Teleptione: Client E-mail: Paul C. Marra Jotianna Can/as, City Attorney, City of Solana Beach 619.440.4444 (McDougal, Love, Eckis, Boehmer & Foley) icanlas0)mclex. com City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 3 Inclusionary Housing and Residential Nexus Analysis, City of Walnut Creek KMA assisted the City with the design and adoption of both an inclusionary housing and jobs/housing linkage program. The inclusionary program adopted required all projects of 10 or more units to build affordable units on-site. In 2010/2011 KMA prepared a nexus analysis to determine support for the program from a nexus perspective. KMA also performed other tasks to assist with the overall program revision and update. KMA Principal-ln-Charge: Client Project Manager: Client Telephone: Client E-mail: WALNUT CREEK Kate Funk Laura Simpson, Housing Program Manager, City of Walnut Creek 925.943.5899 ext 2236 Simpson©) walnut-creek, org City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 4 KEYSER MARSTON ASSOCIATES, INC, (KMA) has one of the largest real estate advisory practices on the West Coast, with experience in all types of commercial and residential real estate. Founded in 1973, the firm has served over 700 clients on more than 2,000 projects. Representative public sector clients include nearly every major municipality in California, cities, ports and military bases throughout the west, county and special districts, as well as public and private colleges and universities. While we are best known for our role as advisors to public sector and institutional clients, our extensive private sector practice includes major corporations, financial institutions, life insurance companies, law firms, landowners and developers. A unique strength of Keyser Marston is the depth, continuity and availability of our principals. Our principals bring an average of more than 20 years of practical experience in working with business and government, and provide convenient and personal service to our clients. KMA provides services through its three offices in California: San Francisco Los Angeles, and San Diego. San Francisco Ferry Building KMA's principals are frequent speakers to industry groups such as the Urban Land Institute, International Council of Shopping Centers, League of Cities, and other similar organizations. KMA's principals have served on the Governor's Task Force on Military Base Reuse and have advised the California Legislature's Committee on Economic Development. • REAL ESTATE Market Assessment Financial Feasibility Strategic Plans Public/Private Partnerships • AFFORDABL E HOUSING • ECONOMIC DEVELOPMENT Petco Part, San Diego SAN FRANCISCO Keyser Marston Associates, Inc. Golden Gateway Commons 55 Pacific Avenue Mall San Francisco, CA 94111 (415)398-3050 fax: (415) 397-5065 LOS ANGELES Keyser Marston Associates, Inc. 500 South Grand Avenue, Suite 1480 Los Angeles, CA 90071 (213)622-8095 fax: (213)622-5204 SAN DIEGO Keyser Marston Associates, Inc. 1660 Hotel Circle North, Suite 716 San Diego, CA 92108 (619) 718-9500 fax: (619) 718-9508 City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 5 c> c> c» L:> c> c> Li> c> c> L:> c> c> c>'=>'=> i=> PROJECT TEAM KEYSER MARSTON ASSOCIATES. PROJECT TEAM I. KMA Contact Information KMA has designated Paul C. Marra as Principal-in-Charge for contract coordination and the delivery of all services under this Request for Proposals (RFP). Contact information for Mr. Marra is as follows: Paul C. Marra, Senior Principal Keyser Marston Associates, Inc. 1660 Hotel Circle North, Suite 716 San Diego, CA 92108 Phone: (619)718-9500 Fax: (619)718-9508 e-mail: pmarra&.kevsermarston.com II. Proposed Staffing KMA has a staff group in each office that is dedicated to affordable housing activities. We have a long history of working cooperatively on assignments in order to draw upon the expertise of individuals within the firm wherever it exists. For this engagement, KMA is proposing to use the following team of professionals: • Paul C. Marra, Senior Principal - Mr. Marra is a Senior Principal in KMA's San Diego office. Mr. Marra has worked with San Diego area public agencies for over 20 years. He has extensive experience in affordable housing, including market and financial feasibility analyses, preparation of affordable housing strategies and implementation plans, and analysis of policy issues. He is President of Lambda Alpha International San Diego chapter, where he moderates the organization's forums on real estate issues impacting the San Diego region. • Linnie A. Gavino, Manager- Ms. Gavino has specialized in analyzing the market and financial feasibility of affordable housing transactions for 15 years. Based in KMA's San Diego office, Ms. Gavino devotes a significant amount of her time to affordable housing proposal evaluation and regularly attends workshops and conferences on affordable housing finance. Ms. Gavino currently serves on the San Diego Housing Commission Loan Committee and is a member of the San Diego Housing Federation. Ms. Gavino will serve as project manager on this assignment. City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 6 August 14, 2012 12119ndh 99900.000.003 Kate Funk, Senior Principal - Ms. Funk will act as Consulting Senior Principal on this assignment. Ms. Funk is a founder of KMA and has over 35 years experience in real estate and urban economics. Based in KMA's San Francisco office, she pioneered the development of nexus studies and has performed nexus studies in support of affordable housing policies, childcare, park/opens space, and the arts. Ms. Funk frequently speaks before trade organizations such as the California League of Cities, California Redevelopment Associafion, California Association for Local Economic Development (CALED), and California Association of Local Housing Finance Agencies (CAL-ALHFA). David Doezema, Principal - Mr. Doezema is a Principal in KMA's San Francisco office. Mr. Doezema joined KMA in 2002 and has worked extensively on economic nexus analyses, including residential and jobs/housing nexus analysis assignments. Mr. Doezema was involved in the development of KMA's residential nexus methodology and also was responsible for updating and restructuring KMA's proprietary jobs/housing nexus model. Mr. Doezema will serve as a Consulting Principal on this assignment and will also provide technical assistance on the use of the IMPLAN model and KMA jobs/housing nexus model. Reena M. Arvizu, Senior Analyst - Ms. Arvizu has been with KMA's San Diego office for 13 years and has assisted a number of public agencies with a wide range of projects including market studies, land use planning studies, developer selection and evaluation, economic benefit analyses, and strategic planning. Ms. Arvizu will provide technical assistance on KMA's survey of current market conditions and the development of residential prototypes. More detailed resumes can be found on the following pages. City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 7 August 14, 2012 12119ndh 99900.000.003 PAUL C. MARRA, SENIOR PRINCIPAL Mr. Marra is a Senior Principal with Keyser Marston Associates, Inc. in the San Diego office. He has over 25 years experience in real estate nnarket and financial evaluation, fiscal and economic impact assessments, and public/private partnerships. KEY ROLES Mr. Marra provides advisory services to public agencies and private clients in Southern California. His areas of concentration include: • Feasibility analyses for market-rate and affordable housing • Developer solicitation and negotiations • Assessment of development potential and revitalization strategies • Affordable housing policy and transactions SPECIFIC AREAS OF EXPERTISE Mixed-Use Development and Affordable Housing Mr. Marra analyzes feasibility for housing developments ranging from high-rise condominiums to in-fill and mixed-use developments. He has assisted cities and transit districts with developer selection and transaction structuring for multi-family and mixed-use developments at transit stations. He is currently preparing an assessment of student housing demand for Downtown San Antonio, TX. Mr. Marra structures Low Income Housing Tax Credit and tax-exempt bond transactions. He recently assisted the San Diego Housing Commission with a financing strategy for acquisition and development of over 850 affordable units. He has prepared nexus studies and economic analyses to support affordable housing fees in numerous jurisdictions. Retail/Entertainment and Hospitality Mr. Marra has assisted cities with implementation of "town center" retail/entertainment developments. He recently assisted the cities of Escondido and San Diego in structuring the terms for major repositionings of regional malls (Westfield North County and Westfield Horton Plaza), and he is currently preparing financial analyses of the University Village "main street" mixed- use development proposed in San Marcos. Mr. Marra prepared feasibility studies for the Seacoast Inn oceanfront hotel, currently under construction in Imperial Beach, as well as the Pier Resort Hotel planned for the Oceanside beachfront and Le Meridien Hotel planned in Downtown San Diego's Gaslamp Quarter. Economic Development Mr. Marra assists cities and urban planners in evaluating the potential for new in-fill and mixed-use development in older commercial districts, including preparation of implementation strategies and infrastructure financing plans. He recently assisted the City of Imperial Beach in updating zoning for its commercial corridors, and worked with Southwest Riverside County cities to identify mixed-use development opportunities along the Old Highway 395 Corridor. Fiscal and Economic Impact Mr. Marra analyzes fiscal impacts for large-scale developments. Specific Plans, and General Plan updates. He prepared the Public Facilities Financing Plan (PFFP)for Downtown San Diego and managed the formation of an Infrastructure Financing District (IFD) for Legoland Park in Carlsbad. He has also undertaken in-depth fiscal impact analyses for the 7,000-unit 101 Ranch Specific Plan in Imperial County and the Laguna Niguel Gateway Specific Plan. PROFESSIONAL CREDENTIALS Mr. Marra is the 2012 President of Lambda Alpha International San Diego chapter, and he is a member of the Urban Land Institute, American Planning Association, San Diego Housing Federation, and Citizens Coordinate for Century 3 (C3). Mr. Marra graduated Phi Beta Kappa from The Johns Hopkins University with a B.A. degree in sociology. He studied in Latin America as an exchange student and maintains his fluency in Spanish. m KEYSER MARSTON ASSOCIATES City of Carlsbad - August 14, 2012 12119ndti 99900.000.003 Affordable Housing Impact Fee Nexus Study RFP Page 8 LINNIE A. GAVINO, MANAGER Ms. Gavino is a Manager in the San Diego office of Keyser Marston Associates, Inc. (KMA). She joined KMA in 1997. KEY ROLES Ms. Gavino has worked primarily with public sector clients focusing on projects requiring financial, market, and demographic research and analysis. Specializing in affordable housing, Ms. Gavino has comprehensive experience working with projects subject to tax credit, tax- exempt financing, and other affordable housing guidelines. Her areas of concentration include: • Market and financial analyses for market-rate and affordable housing • Economic development strategies for cities and communities • Fiscal and economic impact analysis SPECIFIC AREAS OF EXPERTISE Affordable Housing Ms. Gavino has provided a range of housing-related services including market studies, formulation of development concepts, analysis of policy issues, disposition and implementation strategies, preparation of developer solicitations, financial pro forma analysis, developer negotiations, and transaction structuring. Ms. Gavino has assisted the San Diego Housing Commission (SDHC) with the preparation of a financing plan for the acquisition and development of new affordable housing units, leveraged by SDHC's existing portfolio of properties. In addition, Ms. Gavino has assisted a number of cities such as San Diego and the Solana Beach quantify the impact of market rate residential development on the need for affordable housing, in support of inclusionary housing and affordable housing impact fees programs implemented by these jurisdictions. Economic Development Ms. Gavino has prepared market demand analyses, economic profiles, and implementation strategies to assist cities in fulfilling their economic goals and objectives. In cities such as Riverside and Bakersfield, Ms. Gavino identified the existing physical conditions local services, and economic and financial factors that hinder or support economic development, as well as examined the community and regional assets impacting those communities. Fiscal and Economic Impacts Ms. Gavino has assisted, cities, counties, and developers with analysis of the fiscal impact resulting from updates or amendments to General Plans or Specific Plans in the cities of Chula Vista, Cathedral City, Laguna Niguel, San Diego, as well as Imperial County. Ms. Gavino also has also reviewed key demographic and economic trends in order to assess the development potential for private and public improvements. Ms. Gavino assisted with the update of the Downtown San Diego Community Plan, identifying downtown's key opportunities and challenges and providing a forecast of the timing and achievable build-out for a range of downtown land uses. PROFESSIONAL CREDENTIALS Ms. Gavino currently serves on the Board of Directors for Citizens Coordinate for Century 111 (C-3) as well as the San Diego Housing Commission Loan Committee. She is also a member of the San Diego Housing Federation and has conducted technical workshops for a number of professional groups. Ms. Gavino holds an M.A. in Urban Planning from the University of California, Los Angeles; and a B.A. in Public Administration and Urban Studies from San Diego State University. KEYSER MARSTON ASSOCIATES. City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14,2012 12119ndh 99900.000.003 Page 9 KATE EARLE FUNK, SENIOR PRINCIPAL Ms. Funk is a founder and Senior Principal in Keyser Marston's San Francisco office. Previously with Larry Smith and Company, she has over 30 years of experience in real estate and urban economics. KEY ROLES With her broad experience, Ms. Funk has managed projects involving market and financial analyses, and urban economic analyses for policy planning. SPECIFIC AREAS OF EXPERTISE Affordable Housing Nexus Studies Over the past 20 years, Ms. Funk has pioneered the development of nexus studies to support affordable housing policy programs. Initially she developed a methodology for job housing studies to support fee programs on commercial and industrial development. Under her direction, a model to perform the analysis was developed and over 20 jurisdictions were assisted in the design of linkage fee programs, most of them successfully adopted. In recent years Ms. Funk has developed and refined residential nexus studies to link market-rate housing development to the need for affordable housing. Thus far, eight analyses have been completed, often working with attorneys to tailor the analyses and programs to the ever changing legal environment. Other Nexus Work ; > In addition to the affordable housing nexus work, Ms. Funk has prepared other AB 1600 analyses, linking new development to demand for childcare, parks/open space, and the arts. Examples of cities that have adopted such programs are San Mateo, West Sacramento, Santa Monica, and Seattle. Hotel and Conference Centers Ms. Funk has focused on hotel and conference center market and financial feasibility analyses, particularly those involving an in-depth examination of demand generated by local firms and institutions. Assignments have been conducted for Santa Cruz and Mountain View where local firms were extensively interviewed to determine their role in supporting a new facility. She has also assisted numerous redevelopment agencies in hotel transactions negotiations including Santa Rosa, Sacramento, Oakland, Seaside, Fremont, and Milpitas. PROFESSIONAL CREDENTIALS In her professional career, Ms. Funk has been a speaker for organizations such as California League of Cities, CALED, CAL ALHFA, and classes at UC Berkeley and USC. She is a member of the Lambda Alpha Honorary Land Economics Society. Ms. Funk received her Bachelor of Arts degree from Smith College in Northampton, Massachusetts KEYSER MAR.STON ASSOCIATES City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 10 DAVID DOEZEMA, PRINCIPAL Mr. Doezema is a Principal in Keyser Marston Associates' San Francisco office. He joined KMA in 2002 and has participated in fiscal impact analysis, economic benefits assessment, and economic nexus analysis. KEY ROLES • Fiscal impact analyses • Economic benefits assessments • Economic nexus analyses SPECIFIC AREAS OF EXPERTISE Fiscal Impact Analysis Assessment of the general fund revenue and expense impacts of development projects that have included master planned residential communities, military base reuse plans, medical facilities, and mixed- use projects in jurisdictions including Los Angeles, Santa Fe Springs, Modesto, Santee, Alameda, Dublin, Santa Paula, Marina, and Monterey County. Recent fiscal analysis assignments have included military base reuse plans for the former Alameda Point Naval and the East Garrison and University Villages projects on the former Fort Ord. Each of these projects are large-scale mixed-use developments. Analyses were prepared in support of disposition and development agreement negotiations and for financial planning purposes. The resulting projection of fiscal impacts supported a financing plan for conversion of the base to civilian uses while satisfying the fiscal neutrality goals of our clients. Economic Benefits Assessments Analysis of economic benefits including economic output, employment, payroll have included analyses for a medical center expansion, fixed-base operator, two tech companies, several master planned communities, a ship builder, and a liquid natural gas shipping terminal and power plant. Economic Nexus Analysis Mr. Doezema completed an update and restructuring of KMA's proprietary jobs housing nexus model. The model calculates the nexus between commercial and residential development and affordable housing demand by merging local and national data on occupations and wages by land use. An assignment for the City of San Carlos involved application of the nexus model to the proposed Palo Alto Medical Foundation Hospital and East San Carlos Specific Plan to quantify demand for affordable housing generated by development of a 500,000 square foot hospital complex and 2.6 million square feet of commercial space. The analysis is currently being used by the City of San Carlos in support of entitlement negotiations. Recent assignments for the cities of Seattle and San Francisco involved calculating the nexus between market rate residential development and affordable housing demand by accounting for employment growth associated with consumer expenditures. The analyses will be used to support fee programs in both cities. Other Nexus assignments have included the cities of San Diego, St. Helena, Walnut Creek, and Napa County. PROFESSIONAL CREDENTIALS Mr. Doezema holds a master's degree in urban planning and a bachelor's degree in civil and environmental engineering from the University of Michigan, Ann Arbor. KEYStR MARSTON ASS^H (Alls City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14,2012 12119ndh 99900.000.003 Page 11 REENA M. ARVIZU, SENIOR ANALYST Ms. Arvizu is a Senior Analyst in the San Diego office of Keyser Marston Associates, Inc. (KMA). Ms. Arvizu joined KMA in 1999. KEY ROLES Ms. Arvizu has worked with public and private sector clients that require financial, market, and demographic research analysis, projects requiring developer solicitation, selection and evaluation, and strategic planning. Her areas of concentration include: • Financial feasibility analyses for market-rate residential, commercial, and mixed-use developments • Demographic and market analyses • Developer solicitation and evaluation • Real estate and economic development strategies SPECIFIC AREAS OF EXPERTISE Economic Development Ms. Arvizu recently completed a market assessment for the Jefferson Avenue Study Area in the City of Temecula. The Study Area is largely built out and encompasses a broad mix of commercial and industrial uses (office, industrial/business park, lodging, and specialty and service retail). The City was interested in determining the types of land uses that the Study Area could support based on prevailing market factors, trade area growth projections, and anticipated macroeconomic changes within each major land use category. Based on the market findings, Ms. Arvizu prepared an estimate of supportable demand over the next 10 years for each land use, outlined strengths and weaknesses, and identified near- and long-term development opportunities. The City plans to adopt a new Specific Plan to encourage new investment and private redevelopment in the Study Area. Transit-Oriented Development Ms. Arvizu worked as part of a multi- disciplinary team on a market and economic assessment for the Euclid Avenue and Market Street Plan Area in Southeastern San Diego. The goal of the Euclid + Market Land Use Mobility Plan is to encourage smart growth in a transit-oriented mixed-use format. The Plan Area is served by two trolley stations. Ms. Arvizu identified assets and constraints affecting development potential, itemized near-term and long-term development opportunities, and prepared financial feasibility analyses for a variety of development prototypes (residential, office, industrial, and retail/restaurant). Economic Impact Ms. Arvizu assisted in the preparation of an analysis to measure the potential economic impacts resulting from a proposed expansion of an existing Wal- Mart store in the City of Santee. Ms. Arvizu analyzed the demographic and market trends for existing and planned retail space. Ms. Arvizu analyzed existing retail sales productivity levels in the market area and estimated the supportable retail demand in the City. Ms. Arvizu estimated the benefits to the City's economy resulting from the Wal- Mart expansion, which included construction sales tax, total economic output, construction payroll, construction employment, and permits and fee revenues to be received by the City. PROFESSIONAL CREDENTIALS Ms. Arvizu is a member of the Citizens Coordinate for Century 3 (C3) and the California Redevelopment Association. KEYSER MARSTON ASSOCIATES City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndti 99900.000.003 Page 12 Organizational Structure The following organizational chart identifies KMA's proposed staffing along with each staff members' responsibilities. The proposed organization of KMA ensures fiexibility, fast response time, and access to the specialized knowledge of each member. m4'm CtTYOFCARUBAib Paul C. Marra, Senior Principal Principal-in-Charge Kate Funk, Senior Principal j Consulting Principal j—' J Linnie A. Gavino, Manager Project Manager Reena M. Arvizu, Senior Analyst Technical Analysis David Doezema, Principal Consulting Principal / Technical Analysis J City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 13 c> c> !::> c> c> ii> i=> c> c> c> !=> i=> c> c> => i=> PROJECT APPROACH AND SCHEDULE KEYSER MARSTON ASSOCIATES. PROJECT APPROACH AND SCHEDULE I. Proposed Scope of Services The following tasks will be undertaken to conduct a residential nexus analysis to examine the nexus between new residential development and the need for affordable housing in the City of Carlsbad. KMA will also evaluate the current in-lieu cost equivalents of the existing inclusionary program for comparison purposes. Task 1: Project Initiation / Current Market Conditions A. Kick-Off Meeting At the outset of the assignment, KMA will participate in a kick-off/information exchange meeting with City staff (Meeting #1) to discuss project background and identify available information pertaining to this assignment. KMA will also use the meeting to refine the parameters and assumptions for prototype development and the residential nexus analysis. B. Prototype Development, Market Survey, Market Prices and Rent Levels A market survey will be undertaken to establish market values for the various residential types or products subject to the City's inclusionary housing requirements. The rent levels and market values are the starting places of the nexus analysis and the key component of any in-lieu fee analysis. KMA will first review any materials provided by the City and then survey additional materials as necessary on recently developed and proposed rental and ownership housing to determine prototypical product types, including number of bedrooms, square footage, market-rate sales prices, rent levels, etc. KMA will be particularly interested in projects in the pipeline to ensure that the prototypes represent projects that are likely to occur in the City over the next several years. KMA will formulate up to four (4) illustrative development prototypes. For each prototype, KMA will survey market data to estimate market sales price per unit and per square foot of the prototypical units. C. Affordability Gaps and Current In-Lieu Equivalents KMA will use the City's calculations for current affordable sales price and rent levels by unit type and unit size. Alternatively, KMA will perform the calculations. City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 14 August 14, 2012 12119ndh 99900.000.003 KMA will confer with City staff to establish suitable affordable units and development costs for affordable projects typically assisted by the City. Examples would be any projects, recently developed or in the pipeline, that are assisted by the City. The affordability gaps will be computed based on the difference between the costs of development and the affordable unit values. KMA will evaluate the cost to comply with existing inclusionary requirements assuming inclusion of units within a project. The analysis yields the fee required to recover the full cost of producing affordable units equivalent to the on-site inclusionary requirement. The analysis will be based on the findings of the market survey and the affordability gaps. The results will be helpful in selecting fee levels from the nexus results, even if not used in any other context. KMA will participate in a meeting with City staff (Meeting #2) to review and discuss KMA's findings from Taskl. Task 2: Residential Nexus Analysis KMA will prepare a residential nexus analysis that demonstrates and quantifies the relationship between market-rate and affordable housing. The analysis links the addition of new market-rate units in the City to increased demand for affordable housing, and the cost of mitigating the new demand. The analysis will track and quantify a series of steps commencing with the rent/price/value of the new market-rate unit (as developed in Task IB), the income of the household that buys or rents it, the consumption of goods and services of the household, the new jobs generated by that consumption, and the fact that some of the jobs have lower paying compensation levels that result in new working households needing affordable housing. To conduct the analysis, KMA uses two models: the IMPLAN model, which is purchased, and KMA's proprietary jobs/housing nexus model. The IMPLAN model is a commercially available model that was developed over 30 years ago by the U.S. government and has been refined over the years. It is widely used in planning applications throughout the U.S. Starting with the price/rent level of the new unit, gross household income will be computed, the starting point of the IMPLAN model. The output of the IMPLAN model is the number of jobs in various industry categories in considerable detail that are associated with the consumer spending of new households. The next portion of the nexus analysis uses the KMA jobs/housing nexus model, developed over 20 years ago for jobs/housing impact fee programs and refined over the years. The model analyzes compensation levels using detailed local data by occupation for new jobs serving households in new market-rate residential units. All jobs serving these new residents from restaurants, to retail, to schools, to health care, etc. are included. Compensations levels for these jobs are then converted to a distribution of household income that accounts for multiple-earner households. The KMA model imports local wage and salary data from the California Employment Development Department (EDD). City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 15 August 14, 2012 12119ndh 99900.000.003 ^ The output of the KMA model is the number of employee households at various income affordability levels. mt «* The last step in the analysis establishes a mitigation cost, or cost to deliver housing to the lower income ^ affordability levels, using the affordability gaps, developed in Task 1C. The mitigation cost establishes the maximum affordable housing fee supported by the nexus analysis. m KMA will participate in a meeting with City staff (Meeting #3) to review and discuss KMA's findings from ** Tas^ 3: Recommended Impact Fee When considering fee levels there are several economic or real estate factors that may be taken into account in recommending and enacting affordable housing requirements. A primary concern is that fee «~ levels not be so onerous that they significantly constrain the development of new units. KMA will ,^ provide guidance to the City in understanding the economic impact of the existing linkage fee and/or proposed fee increases on real estate costs and rent levels. w KMA will provide the City with a recommended impact fee amount. The recommended amount will be supported by the nexus analysis and take into consideration the impact of the fee on the project economics of future developments. mm KMA will also explore various methods for updafing the fee in the future, including annual adjustments tied to a public index (and possible indices), adjustments based on changes to affordability gap, and others. We will discuss the advantages and disadvantages of each method, including ease of use, fees ^ collected by the City, and ability to maintain an appropriate fee level given current development economics. Tas^ 4: Draft Summary & Recommendations Report KMA will prepare a Draft Summary & Recommendations Report that will provide a summary of the nexus analysis, the market survey and affordability gap analysis, and the in-lieu fee analysis. In the report, KMA will draw conclusions from the analyses and provide recommendations based on discussions with City staff. City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 16 August 14, 2012 12119ndti 99900.000.003 The Draft Summary & Recommendations Report will have two main attachments as follows: (a) A Residential Nexus Analysis report suitable to serve as a support document for establishing an affordable housing fee for new residential development. The analysis methodology and all sources will be explained and presented, supported by the technical tables. The report will also incorporate findings language to meet the requirements of the Mitigation Fee Act sections of the California Code (66000 et seq.). (b) A detailed presentation of the market survey, affordability gap analysis, complete with the survey tables and other materials. The finding of the in-lieu fee cost equivalent analysis will also be included with descripfions of the methodology and all supporting tables. As requested in the RFP, KMA will provide the City with eight (8) bound copies of the Draft Summary ^ Report supported by tables, data, and other materials relevant to the Residential Nexus Analysis. KMA will also provide an electronic version of the Draft Summary Report in Adobe Portable Document p Format (PDF) only. 1 Task 5: Final Summary & Recommendations Report | Following the receipt of consolidated comments and feedback to KMA's draft report, KMA will issue a final version of the Summary & Recommendafions Report. As requested in the RFP, KMA will provide the City with eight (8) bound copies of the Final Summary Report. KMA will also provide an electronic version of the Final Summary Report in PDF. Task 6: Public Meetings ^ As requested in the RFP, KMA will assist in the process leading to program adoption including participation in three (3) public meetings, as follows: | • one (1) public meeting with the Housing Commission; • one (1) public meeting with the Planning Commission; and | • one (1) public meeting with the City Council. * City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 17 |j August 14, 2012 ^ 12119ndh • 99900.000.003 II. Schedule KMA proposes to complete the proposed scope on the following schedule, culminating in a final report within 10 weeks: Task Item Duration Estimated Completion Taskl: Meeting #1: Kick-off Meeting with City Staff — Weekl Taskl: Prototype Development and Affordability Gaps 2 weeks Week 2 Taskl: Meeting #2: Review Task 1 Findings with City Staff — Week 2 Task 2: Residential Nexus Analysis 2 weeks Week 4 Task 2: Meeting #3: Review Task 2 Findings with City Staff — Week 4 Task 3: Recommended Impact Fee 2 weeks Week 6 Task 4: Draft Report Preparation 2 weeks Week 8 Task 5: Final Report 2 weeks following receipt of comments Task 6: Housing Commission Meeting — as scheduled by City Task 6: Planning Commission Meeting — as scheduled by City Task 6: Council Meeting — as scheduled by City City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 18 C> C> C> C> C> C> C> L^> C> C> C> C> L4> C> C> C> COST ESTIMATE KEYSER MARSTON ASSOCLATES. COST ESTIMATE KMA proposes to undertake the services described above on a time-and-materials basis subject to the hourly billing rates in the attached schedule. The total KMA budget is $42,575, delineated as follows: •mm Task Meetings Deliverables Budget Estimate -Tasks 1-5 3 meetings with City staff 1 draft Report 1 final Report $35,195 mt Task 6 3 public meetings presentation materials $5,880 Expenses $1,500 Total, including all labor hours and reimbursables $42,575 The above budget estimate includes the following: • All labor hours • Reimbursables, such as third-party data and reports • One draft and one final version of the work product An itemized breakout of the proposed budget by task, including the hours and the percentage of each individual's time commitment by task, appears below: City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 19 Cost Estimate by Task and Percent of Time Paul C. Marra Kate Funk David Doezema Linnie Gavino Reena Arvizu Noel Mollis Total Task Item Senior Principal $270/hr Senior Principal $270/hr Principal $250/hr Manager $225/hr Senior Analyst $150/hr Admin. $80/hr Total Taskl: Project Initiation / Current Market Conditions 8.0 3.0 0.0 12.0 24.0 2.0 $9,430 % of Time* 10% 4% 0% 15% 30% 3% $9,430 Task 2: Residential Nexus Analysis 6.0 2.0 25.0 8.0 12.0 4.0 $12,330 % of Time* 8% 3% 31% 10% 15% 5% $12,330 Task 3: Recommended Impact Fee 4.0 0.0 4.0 5.0 0 3.0 $3,445 % of Time* 5% 0% 5% 6% 0% 4% $3,445 Task 4: Draft Report 3.0 3.0 3.0 12.0 4.0 4.0 $5,990 % of Time* 4% 4% 4% 15% 5% 5% $5,990 Task 5: Final Report 2.0 2.0 2.0 8.0 2.0 4.0 $4,000 % of Time* 3% 3% 3% 10% 3% 5% $4,000 Subtotal $6,210 $2,700 $8,500 $10,125 $6,600 $1,360 $35,195 Task 6: Public Meetings 12.0 0.0 0.0 8.0 4.0 3.0 $5,880 % of Time* N/A N/A N/A N/A N/A N/A $5,880 Subtotal $9,450 $2,700 $8,500 $11,925 $6,900 $1,600 $41,075 Expenses* * $1,500 Total $42,575 * Percent of each individual's time commitment assuming a 40-hour work week. ** Reimbursable expenses, including purchase of the IMPLAN data sets and market survey materials. Additional meetings, if requested, will be billed on a time-and-materials basis subject to KMA's standard hourly billing rates. City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP August 14, 2012 12119ndh 99900.000.003 Page 20 KEYSER MARSTON ASSOCIATES, INC. HOURLY FEE SCHEDULE 2012/2013 A. JERRY KEYSER* $280.00 MANAGING PRINCIPALS* $280.00 SENIOR PRINCIPALS* $270.00 PRINCIPALS* $250.00 MANAGERS* $225.00 SENIOR ASSOCIATES $187.50 ASSOCIATES $167.50 SENIOR ANALYSTS $150.00 ANALYSTS $130.00 TECHNICAL STAFF $95.00 ADMINISTRATIVE STAFF $80.00 Directly related job expenses not included in the above rates are: auto mileage, parking, air fares, hotels and motels, meals, car rentals, taxies, telephone calls, delivery, electronic data processing, graphics and printing. Directly related job expenses will be billed at 110% of cost. Monthly billings for staff time and expenses incurred during the period will be payable within thirty (30) days of invoice date. * Rates for individuals in these categories will be increased by 50% for time spent in court testimony. City of Carlsbad - Affordable Housing Impact Fee Nexus Study RFP Page 21 August 14, 2012 12119ndh 99900.000.003 SAN FRANCISCO OFFICE LOS ANGELES OFFICE SAN DIEGO OFFICE 55 PACIFIC AVENUE MALL 500 SOUTH GRAND AVENUE 1660 HOTEL CIRCLE NORTH GOLDEN GATEWAY COMMONS SUITE 1480 SUITE 716 SAN FRANCISCO, CA 94111 LOS ANGELES, CA 90071 SAN DIEGO, CA 92108 P: 415.398.3050 P: 213.622.8095 P: 619.718.9500 F: 415.397.5065 F: 213.622.5204 F: 619.718.9508 TKELLY@KEYSERMARSTON.COM KHEAD@KEYSERMARSTON.COM GTRIMBLE@KEYSERMARSTON.COM REAL ESTATE - ECONOMIC DEVELOPMENT - REDEVELOPMENT - AFFORDABLE HOUSING