REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on an Amendment No. 3 to the Agreement with Everon LLC for Fire Sprinkler Testing, Inspection, and Maintenance Services to Extend the Term by One Year, Increase the Total Agreement Amount, Update the Compensation and Fee Schedule, and Delegate Authority to the Executive Director for Future Amendments
Report
BACKGROUND
Pursuant to Section 2.9 of the Stadium Management Agreement between the Santa Clara Stadium Authority (Stadium Authority), Forty Niners SC Stadium Company LLC (StadCo), and Forty Niners Stadium Management Company LLC (Stadium Manager), the Stadium Manager is responsible for maintaining Levi’s Stadium (Stadium) “in the Required Condition and operate the Stadium as a quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility.…”
In 2023, the Stadium Manager completed a Request For Proposals (RFP) process for fire sprinkler testing, inspection, maintenance, and related services, which received three proposals. The Stadium Manager recommended an award to the highest-ranked proposer offering the best value, ADT Commercial LLC.
On March 21, 2023, the Stadium Authority Board approved the Stadium Manager’s request to establish a three-year agreement with ADT Commercial LLC to provide fire sprinkler testing, inspection, maintenance, and related services with an option to renew for two one-year periods (Agreement) (Attachment 1). The initial term of the agreement was from April 1, 2023 through March 31, 2026, with a not-to-exceed amount of $228,000 over the three-year period. The Stadium Authority Board also authorized the Executive Director to approve the Stadium Manager’s exercise of the option to extend the agreement with the same basic terms and conditions for two additional one-year periods, subject to budget appropriations.
After executing the three-year agreement, ADT Commercial was acquired by GTCR, a private equity firm, and rebranded to Everon, LLC. On September 17, 2025, the Stadium Manager and Everon, LLC entered into a Forty Niners Stadium Management Company LLC Consent to Assignment Agreement for the purpose of executing a separate Amendment No. 1 to the service agreement to expand the scope to include a fire sprinkler head installation, as required by the Santa Clara Fire Department through an annual inspection. The Stadium Manager executed Amendment No. 1, effective October 10, 2025, to include the additional services (Attachment 2).
On November 18, 2025, the Stadium Authority Board ratified the Amendment No. 1 to the Agreement with Everon, LLC that covered a necessary fire sprinkler installation; approved and authorized the Stadium Manager to execute Amendment No. 2 to the Agreement with Everon, LLC to increase the not to exceed amount by $24,000 for contract year three, for a total not to exceed amount of $252,000 over the initial three-year period (Attachment 3); and authorized the Executive Director to approve future amendments to the Agreement with Everon, LLC to exercise options to extend the term for two additional one year periods, and increase the not to exceed agreement amounts for contract years four and five in amounts determined by the Executive Director as necessary and appropriate to provide fire sprinkler testing, inspection, maintenance, and related services, subject to budget appropriations.
To ensure continuity of fire sprinkler testing, inspection, maintenance, and related services in advance of the initial three-year term expiring on March 31, 2026, the Stadium Manager is requesting approval the following actions related to the Agreement with Everon LLC:
1. Approve and authorize the Stadium Manager to execute an Amendment No. 3 to the Agreement with Everon LLC to increase the maximum compensation by $94,000 to cover services from April 1, 2026 to March 31, 2027 (Attachment 4);
2. Authorize the Executive Director to approve future amendments to the Agreement to exercise the final one-year option for the fifth contract year, increase the not-to-exceed amount by $98,700 to cover services from April 1, 2027 to March 31, 2028 and increase the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, all subject to the same basic terms and conditions and budget appropriations; and
3. Authorize the Executive Director to approve future amendment to the Agreement, under the same basic terms and conditions, for a period not to exceed six months beyond the fifth contract year through September 30, 2028 and increase the not-to-exceed amount by $49,862 to cover up to six months of services and increase the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, provided the Stadium Manager is engaged in an active competitive solicitation process and subject to budget appropriations. This extension is intended to support the transition to a recommended contractor and maintain continuity of business.
4. The total not-to-exceed maximum compensation for the Agreement, inclusive of all contract years and the six-month extension period, shall not exceed $494,562.
The Stadium Manager’s request for an Amendment No. 3 to the Agreement with Everon LLC to increase the agreement by $94,000 for contract year four to cover services from April 1, 2026 to March 31, 2027 is within the Executive Director’s delegated authority to approve. However, the requested Amendment No. 3 to the Agreement with Everon LLC also includes an updated compensation and fee schedule reflected in Exhibit B-2 and additional delegation of authority to the Executive Director for future amendments related to the contract year five and six-month extension require additional Stadium Authority Board action. As such, the requests are being presented to the Stadium Authority Board for approval.
A Recommendation Memo was submitted describing the Stadium Manager’s request in more detail (Attachment 5).
DISCUSSION
Stadium Manager has a continued need for comprehensive fire sprinkler testing, inspection, and maintenance services to support the day-to-day operations and maintenance of Levi’s Stadium. Regular testing of the fire sprinkler system is essential for the stadium's safe operation. The vendor performs routine inspections in accordance with the National Fire Protection Association (NFPA) standards, conducts corrective maintenance when issues are identified, and provides onsite response and emergency services as needed.
As noted above, the Executive Director has delegated authority to approve future amendments to the Agreement with Everon, LLC to exercise options to extend the term for two additional one-year periods and increase the not to exceed agreement amounts for contract years four and five in amounts determined by the Executive Director as necessary and appropriate, subject to budget appropriations. As the delegated authority did not cover updates to the compensation and fee schedule, the requested Amendment No. 3 is provided for approval.
In staff’s review, the rate increases for all routine services under Exhibit B-2 were reasonable and reflective of the regional Consumer Price Index (CPI). For additional services, the rate increased by 4.6%, which slightly exceeded the region’s CPI at 2.7%, and Stadium Authority staff followed up with the Stadium Manager for additional justification. The vendor proposed a significantly higher rate and the Stadium Manager negotiated a 4.6% increase. Stadium Authority staff calculated the impact of the additional services increase, which would increase by a total of approximately $1,200 a year. This is offset by the savings where there is no rate increase or the increase was lower than the CPI for the routine rates. As such, staff had no additional concerns with the increase.
To ensure efficiencies through administrative approval, which was intended through the original request for approval of the Agreement, the Stadium Manager is also requesting for additional delegation of authority to the Executive Director, specifically to: 1) approve future amendments to the Agreement to exercise the final one-year option for the fifth contract year, increase the not-to-exceed amount by $98,700 (reflective of a 5% increase) to cover services from April 1, 2027 to March 31, 2028 and increase the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases; and 2) approve a future amendment to the Agreement, under the same basic terms and conditions, for a period not to exceed six months beyond the fifth contract year through September 30, 2028 and increase the not-to-exceed amount by $49,862 (reflective of a 1% increase) to cover up to six months of services and increase the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, provided the Stadium Manager is engaged in an active competitive solicitation process and subject to budget appropriations. The extension is intended to support the transition to a recommended contractor and maintain continuity of business. The total not-to-exceed maximum compensation for the Agreement, inclusive of all contract years and the six-month extension period, shall not exceed $494,562.
Table 1 below provides a summary of the costs under the agreement.
Table 1 - Cost Summary
|
Description |
Amount |
|
Initial Three-Year Term (4/1/23 - 3/31/26) |
$252,000 |
|
Optional Year 4 (4/1/26 - 3/31/27) |
$94,000 |
|
Optional Year 5 (4/1/27 - 3/31/28) |
$98,700 |
|
6-Month As-Need Extension Period (4/1/28 - 9/30/28) |
$49,862 |
|
Total Not-to-Exceed Maximum Compensation |
$494,562 |
Optional Years 4 and 5 assume an annual increase of 5%. The Stadium Manager has provided the following reason for the increased agreement amounts that reflect a 5% increase and maximum 5% for rate increases, “This percentage is based on the potential rate increases exceeding the prior year fees given the overall lack of market certainty due to current economic and political factors.” The Stadium Manager or vendor is responsible for providing reasonable justification for any rate increases for future amendments. If the Stadium Manager’s requests are approved, the Executive Director will have delegated authority to approve such rate increases, up to 5%, and any higher rate will have to go to the Stadium Authority Board for additional approval. The Stadium Manager will be responsible for managing expenditures throughout the term of the agreement based on operational needs, provided the overall maximum compensation is not exceeded. This approach allows for continued Stadium Authority oversight, while streamlining the approval process for future amendments.
Based on the review of the Stadium Manager’s request, the agenda reports and Stadium Authority Board actions related to the approval of the original Agreement with ADT Commercial LLC and Amendments No. 1 and 2 to the Agreement with Everon LLC, the draft Amendment No. 3, and additional justification provided by the Stadium Manager, staff recommends approval of the Stadium Manager’s requests related to the Agreement with Everon LLC to continue fire sprinkler testing, inspection, maintenance, and related services at Levi’s Stadium with minor modifications - respect to the recommendation to approve Amendment No. 3, include reference of the updated compensation and fee schedule; and with respect to the recommendations related to the amendments for the fifth contract year and six-month extension period, update the word “increase” to “adjust” regarding the compensation and fee schedules. For clarity, the Executive Director will have delegated authority to approve rate increases of up to 5%, subject to the maximum compensation.
The Stadium Authority Counsel’s Office has reviewed the requested Amendment No. 3 for comparison to the Stadium Authority’s customary language. Nothing in the proposed Amendment No. 3 or Agreement changes the Stadium Authority’s rights under the Management Agreement and specifically with respect to any dispute that may arise from the Stadium Manager’s obligations under the Management Agreement.
The Stadium Authority reserves all rights to confirm and dispute charges by and payments to the Stadium Manager during a fiscal year-end reconciliation/true-up, including but not limited to changes based on improper allocation, calculation, lack of support, or failure to comply with the Parties’ contracts or California law. The Stadium Authority may raise related questions before the fiscal year-end reconciliation/true-up, which the Stadium Manager agrees to assess and respond to in good faith.
ENVIRONMENTAL REVIEW
The action being considered is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15301 “Existing Facilities” as the activity consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities mechanical equipment or topographical features involving negligible or no expansion of use beyond that existing at the time of the lead agencies determination. The proposed action does not constitute a “project” within the meaning of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(a), as it has no potential to result in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
Additionally, the action being considered is exempt from the CEQA pursuant to CEQA Guidelines section 15061(b)(3) as the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
FISCAL IMPACT
The requested Amendment No. 3 to the Agreement with Everon LLC will increase the agreement’s total not-to-exceed amount by $94,000 for contract year four, for a total aggregate amount of $346,000. Future amendments to the agreements, as requested through delegated authority to the Executive Director for approval, may increase the agreement’s total not-to-exceed amount to $494,562 through September 30, 2028.
The Stadium Authority Fiscal Year (FY) 2026/27 Budget includes Shared Stadium Expenses, such as Security, Stadium Operations, Engineering, Guest Services, and Groundskeeping. In accordance with the Stadium Lease, most Shared Stadium Expenses are allocated 50/50 between the Stadium Authority and StadCo.
There are sufficient funds in the FY 2026/27 Shared Stadium Expenses Engineering line item to cover the Stadium Authority’s fifty percent (50%) share of the agreement costs for the Amendment No. 3 with Everon LLC (up to $47,000). As the requested action for the fifth contract year and six-month extension period covers FY 2027/28 and FY 2028/29, those agreement amendments will be subject to future budget appropriations.
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Treasurer’s Office.
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 or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve and authorize the Stadium Manager to execute an Amendment No. 3 to the Agreement with Everon LLC for fire sprinkler testing, inspection, and maintenance services at Levi’s Stadium to increase the maximum compensation by $94,000 to cover services from April 1, 2026 to March 31, 2027 and update the compensation and fee schedule to Exhibit B-2;
2. Authorize the Executive Director to approve future amendments to the Agreement with Everon LLC to exercise the final one-year option for the fifth contract year, increase the not-to-exceed amount by $97,800 to cover services from April 1, 2027 to March 31, 2028, and adjust the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, all subject to the same basic terms and conditions and budget appropriations;
3. Authorize the Executive Director to approve future amendment to the Agreement with Everon LLC, under the same basic terms and conditions, for a period not to exceed six months beyond the fifth contract year through September 30, 2028, increase the total not-to-exceed amount by $49,862 to cover six months of services, and adjust the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, provided the Stadium Manager is engaged in an active competitive solicitation process and subject to budget appropriations; and
4. The total not-to-exceed maximum compensation for the Agreement with Everon LLC, inclusive of all contract years and the six-month extension period, shall not exceed $494,562.
Staff
Prepared by: Christine Jung, Deputy City Manager
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Agreement with ADT Commercial LLC
2. Amendment No. 1 to the Agreement with Everon LLC
3. Amendment No. 2 to the Agreement with Everon LLC
4. Draft Amendment No. 3 to the Agreement with Everon LLC
5. Stadium Manager’s Recommendation Memo