REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Stadium Manager’s Request to Approve a Third Amendment to the Agreement with ABM Industry Group, LLC for Janitorial Services at Levi’s Stadium for a Month-to-Month Extension Not to Exceed Six Months
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
As the Stadium Manager of Levi’s Stadium, Forty Niners Stadium Management Company LLC is responsible for maintaining “the Stadium in the Required Condition and operate the Stadium as a quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility” as required by the Stadium Management Agreement between the Stadium Authority, Forty Niners SC Stadium Company, LLC (StadCo), and Stadium Manager.
As described in an April 4, 2017 report to the Stadium Authority Board, the Stadium Manager conducted a Request for Proposal (RFP) process for janitorial services for pre-event, event, and post-event services as well as routine non-event day cleaning for the Stadium and invited six janitorial firms to participate. Two of the six companies attended a mandatory pre-proposal meeting, but one firm withdrew from the bidding process. As such, ABM Industry Group, LLC (ABM) was selected for being the only firm to complete the RFP process. ABM provided janitorial services for the Stadium for three years before the RFP process in 2017.
On April 4, 2017, the Stadium Authority Board adopted Resolution No. 17-1 that consented to a service agreement between the Stadium Manager and ABM for janitorial and building maintenance services at Levi’s Stadium (Agreement). The Agreement had an initial term of five (5) years that ended on March 31, 2022 and included an option to extend the agreement for an additional two years at the discretion of the Stadium Manager (Attachment 1). A First Amendment to the Agreement was also noted and filed on the same day to include the Stadium Authority in the Agreement’s Exhibit C - Insurance Requirements (Attachment 2). On December 10, 2021, the Stadium Manager exercised the option to extend the agreement with ABM for an additional two years through March 31, 2024 (Attachment 3).
On March 19, 2024, the Stadium Authority Board approved a Second Amendment to the Agreement with ABM to formally increase compensation rates and extend the term of the agreement on a month to month basis, beginning on April 1, 2024, for up to six months through September 30, 2024 or until the Stadium Manager enters into a new agreement for janitorial services, subject to the Stadium Authority Board’s approval (Attachment 4). The Second Amendment to the Agreement intended to provide the Stadium Manager sufficient time to work on the formal solicitation process for janitorial services.
The Stadium Manager issued a formal solicitation for a new multi-year contract for janitorial services on May 6, 2024 and, at the time of writing this report, is in the process of evaluating the proposal responses with the anticipation that the selection process will be completed in September 2024 and the recommendation for a new janitorial services agreement will be presented to the Stadium Authority Board for approval in October 2024.
In the meantime, the Stadium Manager is requesting approval to execute a Third Amendment to the Agreement with ABM (Attachment 5) to extend the agreement on a month-to-month basis, beginning October 1, 2024, for up to six months with thirty days advance notice to the vendor to terminate the agreement.
A Recommendation Memo was submitted by the Stadium Manager describing the request and status of the pending solicitation in more detail (Attachment 6).
DISCUSSION
Janitorial services are critical to the ongoing operation of Levi’s Stadium and are used year-round for daily cleaning services; annual deep cleaning; cleaning at seating bowl events and games which consists of pre-event, event, and post-event cleaning when the seating bowl is utilized for the event; cleaning at catered events such as proms, parties, and receptions; and for ancillary services such as parking lot cleaning, and window washing.
Per the Stadium Manager’s prior Recommendation Memo dated February 14, 2024 that recommended Board approval of the Second Amendment to the Agreement with ABM, the Stadium Manager began preparing for the formal solicitation in August 2023 by developing a list of prescriptive cleaning services required at the Stadium. Stadium Manager representatives began conducting extensive outreach and benchmarked with
other sports facilities around the United States including reviewing the janitorial services RFP issued by the City of Santa Clara. In October 2023, the Stadium Manager conducted a non-binding and non-committal open house and invited firms providing janitorial services to participate in an open dialog with the Stadium Manager about their needs, tour the Stadium, and learn about the marketplace to plan the development of the solicitation process. These discussions spanned over a period of two months through December 2023.
The Stadium Manager began developing the scope of work and requirements with a plan to issue the solicitation in January 2024. They originally anticipated completing the formal solicitation process and bringing a new recommendation for a multi-year contract for janitorial services to the Board for consideration in June of 2024. However, these efforts were slightly delayed due to the Forty Niners’ post-season success combined with the Stadium Manager completing the work required for the annual Stadium Authority budgeting process.
As noted above, the Stadium Manager issued a formal solicitation for a new multi-year contract for janitorial services on May 6, 2024 and is in the process of evaluating the proposal responses with the anticipation that the selection process will be completed in September 2024 and the recommendation for a new janitorial services agreement will be presented to the Stadium Authority Board for approval in October 2024. The proposed extension also includes the right to terminate the agreement with thirty days advance notice to the vendor, which will allow the Stadium Manager additional time to effectively manage the transition of services depending on the recommended vendor through the formal solicitation process.
The monthly expense for routine janitorial services is in the range of $110,000-$120,000 per month, with the Stadium Authority and StadCo respectively responsible for 50% of the cost. The agreement does not include a not to exceed amount due to the unknown number of Non-NFL events (including non-ticketed special events) for the remaining term that will require janitorial services; however, Non-NFL events will be subject to the rates outlined under Exhibit B in the agreement. Janitorial services for NFL and Non-NFL Events are respectively charged directly to the events. The rates will remain the same throughout the proposed extended term.
Overall, the services provided by ABM are critical for stadium operations and staff recommends approval of the Stadium Manager’s request to execute a Third Amendment to the Agreement with ABM to ensure the continuity of janitorial services until the Stadium Manager completes its janitorial services solicitation, brings forth a new agreement for Board approval and, if a different contractor is selected, transitions services to such new contractor.
The Stadium Authority Counsel’s Office has reviewed the proposed Third Amendment to the Agreement and is comfortable with the language.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
The Stadium Authority Fiscal Year (FY) 2024/25 Budget contains Shared Stadium Expenses such as Security, Stadium Operations, Engineering, Guest Services, and Groundskeeping. Shared Stadium Expenses are split 50/50 between the Stadium Authority and StadCo per the Stadium Lease. The monthly expense for routine ABM cleaning services performed in shared spaces in the Stadium used by both Stadium Authority and StadCo on non-event days is in the range of $110,000 - $120,000. The Stadium Authority’s portion is approximately $57,500 per month and is budgeted under the FY 2024/25 Shared Stadium Expenses, Engineering line item.
In addition to the Shared Stadium Expense cost described above, the Stadium Authority or event promoter is responsible for these janitorial costs related to services performed for Non-NFL Events. StadCo is responsible for all costs related to services performed for Tenant’s Exclusive Facilities and NFL events.
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Treasurer’s Offices.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>.
RECOMMENDATION
Recommendation
Approve the Stadium Manager’s request to execute a Third Amendment to the Agreement with ABM Industry Group to extend the term of the agreement on a month-to-month basis, beginning on October 1, 2024, for up to six months until the Stadium Manager enters into a new agreement for janitorial services at Levi’s Stadium, subject to the Stadium Authority Board’s approval, and completes the transition of services as needed depending on the recommended vendor through the formal solicitation process.
Staff
Reviewed by: Chuck Baker, Assistant Executive Director
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Agreement with ABM Industry Group, LLC
2. First Amendment to Agreement with ABM Industry Group, LLC
3. Stadium Manager’s Notice to ABM Industry Group, LLC to Exercise 2-Year Extension
4. Second Amendment to Agreement with ABM Industry Group, LLC
5. Proposed Third Amendment to Agreement with ABM Industry Group, LLC
6. Stadium Manager’s Recommendation Memo