Sierra Marrero,

Assistant Director of Engineering and Building Services

Brynt Johnson,

Issue Statement: On October 17, 2018, the City Commission approved a Development Agreement for the Sky Building Project with Integra Real Estate. On August 6, 2020, the City Commission approved the transfer of the Development Agreement to Oakland Park Dixie LLC (NR Investments), which included updates to the business terms of the lease agreement and was approved by the City Commission on November 4, 2020. On November 2, 2022, and January 18, 2023, the City Commission approved additional amendments to the Development, Purchase, and Sale and City Hall Lease Agreements.  The construction of the Sky Building has begun, under a contract between NR Investments and their General Contractor, Stiles Construction.

 Pursuant to the terms of the Development and Lease Agreements as amended, the City may contract with the developer’s General Contractor for the build-out of the Tenant Improvements. Although this provision is included in the Agreements approved by the City Commission, pursuant to the City’s purchasing regulations, the approval of this contract will require the waiver of a competitive procurement process by the majority of the City Commission. Before seeking a construction contract with the developer’s general contractor, staff requests to enter into an agreement with Stiles Construction to provide pre-construction CMAR services related to the tenant improvements for the Sky Project. This will allow the contractor to provide constructability reviews, value engineering options, cost estimating and scope management through the design phase.

 Recommended Action:  The City Commission adopt a resolution authorizing the proper City Officials to execute a Pre-Construction Services Agreement with Stiles Construction for the CMAR services related to the design of Sky Building Tenant improvements in an amount not to exceed $32,000; and approve the proposed budget amendment and waiver in competitive bidding for this contract.

 Background:  Under the Construction Manager at Risk (CMAR) delivery model, the City contracts with a design firm and also contracts separately with a CMAR who provides pre-construction review services during the design phase, such as constructability reviews, cost estimating and scope management.  The CMAR, using the budget of the City, provides suggestions for potential cost saving strategies and other alternatives for design, construction materials, and processes.

 Near or at the end of the design phase, the CMAR submits a Guaranteed Maximum Price (GMP) for consideration by the City. The CM warrants to the owner that the project will be built at a price not-to-exceed the GMP. If the cost is approved by the City, award of the construction phase contract to the CMAR would occur and the CMAR assumes the risk of meeting the GMP.

The construction of the Sky Building has begun under a contract between NR Investments and their general contractor, Stiles Construction. The City’s architect and engineers have been working on the design of the City's tenant spaces on the first and fifth floors of the Sky Building. Once the construction documents for the build-out have been completed, the City will submit the plans for permitting.

Pursuant to the terms of the Development and Lease Agreements, as amended, the City may utilize the City’s contractor for the build-out of the Tenant Improvements. Before entering into a construction contract with the developer’s general contractor, staff requests to enter into an agreement with Stiles Construction to provide pre-construction CMAR services related to the tenant improvements for the Sky Project. This will allow the contractor to provide constructability reviews, value engineering options, cost estimating and scope management through the design phase.

 The next step, which will occur at the end of the design phase, will be for the CMAR to submit a Guaranteed Maximum Price (GMP) for consideration by the City, which warrants that the project will be built at a price not-to-exceed the GMP. If the cost is approved by the City Commission for award of the construction phase, the CMAR contract will be executed, whereby the contractor assumes the risk of meeting the GMP.

This proposed CMAR pre-construction agreement with Stiles Construction will include design development services, constructability plan review, construction document development, and development of the GMP.  The full scope of activities is listed in Exhibit A of the agreement.

As shown in the attached Pre-Construction Services Agreement, the total estimated cost for the pre-construction CMAR services for the tenant improvements for the Sky Project is $32,000. Funds are available in the Adopted FY 23 CIP for the services agreement with Stiles Construction for the design of Sky Building Tenant improvements.  A budget amendment is required to provide funding for this item, which is attached as Exhibit B.

The proposed expenditure is as follows: