REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Stadium Manager’s Request to Approve a Purchase Order with Pivot Interiors, Inc. for the Replace Furniture for BNY Field Clubs, United, Levi’s 501, and Yahoo Clubs and Special Event Spaces CapEx Project and Related Budget Amendment
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 Management Agreement between the Stadium Authority, Forty Niners SC Stadium Company LLC (StadCo), and Stadium Manager.
The Stadium Authority Fiscal Year (FY) 2023/24 Capital Expense (CapEx) Budget includes a $1,503,000 line item for a Replace Furniture for BNY Field Clubs, United, Levi’s 501 and Yahoo Clubs and Special Events Spaces project. The project replaces the free-standing furniture, including stools, chairs, tables, and sofas, in some of the most utilized spaces in the Stadium. The current furniture has been in place since the Stadium opened in 2014 and has aged due to normal wear and tear over the years. The furniture is located in shared spaces and are used for numerous events throughout the year including both NFL and Non-NFL Events.
The Stadium Manager is requesting approval for the following actions related to the Replace Furniture for BNY Field Clubs, United, Levi’s 501 and Yahoo Clubs and Special Event Spaces CapEx Project (CapEx Project):
1. Approve a one-time purchase order to Pivot Interiors, Inc. in the amount of $1,738,204 to replace the free-standing furniture in the clubs and event spaces at Levi’s Stadium;
2. Approve a budget amendment to increase the total budget amount for the CapEx Project by $335,204, from $1,503,000 to $1,838,204; and
3. Authorize the Stadium Manager to execute any and all documents associated with, and necessary for the award, completion, and acceptance of the project.
If approved, the amended line item will cover the costs of the one-time purchase order inclusive of labor, delivery and taxes ($1,738,204), and an additional $100,000 to procure additional bar height tables to complete the CapEx Project. The CapEx Project was budgeted and initiated in FY 2022/23, when the Stadium Manager used an existing Board approved agreement with Populous, Inc. to develop design plans for the CapEx Project. The CapEx Project was carried forward to FY 2023/24 to complete.
A Recommendation for Award Memo was submitted describing the project, solicitation process, and the Stadium Manager’s request (Attachment 1). Photos of existing furniture in Levi’s Stadium clubs and special event spaces are attached to this report (Attachment 2).
DISCUSSION
Stadium Authority staff reviewed the Stadium Manager’s Recommendation for Award memo, supporting documentation, and draft purchase order for consistency against the City’s bidding practices (City Code Section 2.105.140(d) - Competitive requirements for purchases - formal request for bids). The Stadium Manager’s Request for Bids (RFB) received seven responses and the Stadium Manager is recommending award to the lowest responsive bidder, Pivot Interiors, Inc.
Based on the documentation and provided information, staff recommends approval of the Stadium Manager’s request related to the Replace Furniture for BNY Field Clubs, United, Levi’s 501, and Yahoo Clubs and Special Event Spaces CapEx Project.
The Stadium Authority Counsel’s Office has reviewed the requested purchase order for comparison to the Stadium Authority’s customary language. While there are some differences in the language, including portions covering compliance with laws such as prevailing wage and conflict of interest, the purchase order submitted for approval contains the necessary language which identifies these legal obligations to the vendor. The vendor expressly agrees to adhere to such obligations upon its execution of the agreement. Nothing in the proposed purchase order 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 is also evaluating whether there should be an allocation of some portion of the costs associated with the furniture replacement to StadCo. The Stadium Authority reserves all rights on these issues, and 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 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 for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
As noted above, the Stadium Authority FY 2022/23 CapEx Budget included $1,621,001 for the CapEx Project. Design services were performed by Populous, Inc. in FY 2022/23 and $1,503,000 was carried forward into FY 2023/24.
Approval of the Stadium Manager’s request will require a budget amendment to increase the line item by $335,204 to a total budget amount of $1,838,204 to ensure that the funds are in place for the purchase order amount and to procure the additional furniture. It is anticipated that the project will continue into FY 2024/25; therefore, a separate budget action to carryover these funds is included in the proposed FY 2024/25 CapEx Budget that is being considered by the Stadium Authority Board. The table below summarizes the budget amendment as discussed above:
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> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation:
1. Approve a budget amendment for the Replace Furniture for BNY Field Clubs, United, Levi’s 501, and Yahoo Clubs and Special Event Spaces line item in the Stadium Authority FY 2023/24 CapEx Budget to increase the budget by $335,204 from the Capital Budget Ending Fund Balance, for a total budget amount of $1,838,204;
2. Approve the Stadium Manager’s request to award a purchase order to Pivot Interiors, Inc. in the amount of $1,738,204 to replace the free-standing furniture in the described event spaces at Levi’s Stadium for the Replace Furniture for BNY Field Clubs, United, Levi’s 501, and Yahoo Clubs and Special Event Spaces CapEx Project, subject to a reservation of rights regarding possible allocations of costs to StadCo under the terms of the Stadium Lease; and
3. Authorize the Stadium Manager to execute any and all documents associated with, and necessary for the award, completion, and acceptance of the project.
Staff
Reviewed by: Chuck Baker, Assistant City Manager
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Stadium Manager’s Recommendation for Award Memo
2. Photos of Existing Furniture