REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on an Amendment No. 1 to the Agreement with West Coast Turf for the Supply, Delivery, and Installation of Sod for the Field at Levi’s Stadium 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 implemented a Request for Proposals (RFP) process and received one proposal from West Coast Turf. At the time, the Stadium Manager communicated that a number of potential suppliers were contacted; however, the type of sod and method to grow and maintain it prior to installation required by the Stadium Manager is generally not offered by many sod providers. The Stadium Manager determined West Coast Turf to be within the competitive range in each of the evaluation ranges after the initial evaluation and conducting business, legal, and cost clarification meetings with the vendor.
On April 4, 2023, the Stadium Authority Board approved the Stadium Manager’s request to execute an agreement with West Coast Turf to supply and deliver sod and related installation services at Levi’s Stadium for a three-year period beginning April 1, 2023 through March 31, 2026, in an amount not exceed $1,600,000 per contract year for a total not to exceed amount of $4,800,000 over the three-year period, subject to budget appropriations (Agreement) (Attachment 1). 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.
To ensure continuity of the delivery and supply of sod and related installation services in advance of the initial three-year term expiring on March 31, 2026, the Stadium Manager is requesting approval of the following actions related to the Agreement with West Coast Turf:
1. Approve and authorize the Stadium Manager to execute an Amendment No. 1 to the Agreement with West Coast Turf to increase the maximum compensation by $1,600,000 to cover services from April 1, 2026 to March 31, 2027.
2. Authorize the Executive Director to approve future amendments to the Agreement to exercise the final one-year option for the fifth contract year and increase the not-to-exceed amount by $1,680,000 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.
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 $840,000 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 $8,920,000.
The Stadium Manager’s request for an Amendment No. 1 to the Agreement with West Coast Turf to extend the agreement by one additional year 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. 1 includes an increase to the total agreement amount, an updated compensation and fee schedule as reflected in Exhibit B-2 and Schedule A-1, and additional delegation of authority to the Executive Director for future amendments related to contract year five and the six-month extension period require additional Stadium Authority Board action. As such, it is being presented to the Stadium Authority Board for approval.
A Recommendation Memo was submitted describing the Stadium Manager’s request in more detail (Attachment 3).
DISCUSSION
The Stadium Manager has a continued need for sod supply, delivery, and installation to maintain a safe, high-quality playing surface at Levi’s Stadium for both Non-NFL and NFL events. The vendor performs nearly five full field replacements per year. In their Recommendation Memo, the Stadium Manager noted it is critical that a single, experienced vendor provides all services, as they control sod cultivation and possess detailed knowledge of the stadium’s field system, ensuring consistency, performance, and accountability. By exercising the first of two one-year extension options, Stadium Manager will ensure continuity with West Coast Turf and maintain quality field surfaces.
As noted above, the Executive Director has delegated authority to approve the Stadium Manager’s exercise of its option to extend the agreement with the same basic terms and conditions for two additional one-year periods, subject to budget appropriations. As the delegated authority did not cover increases to the agreement amount, and updates to the compensation and fee schedule, the requested Amendment No. 1 and requested delegation to the Executive Director for the fifth contract year and six-month extension period are provided for approval.
The rate increases under Exhibit B-2 and Schedule A-1 were reasonable and reflective of the regional Consumer Price Index (CPI). Staff noticed the inclusion of a new line item for Ready Play Grass (Sod Grown on Plastic) and followed up with the Stadium Manager for more information. The Stadium Manager explained that Ready Play Grass is West Coast Turf’s proprietary name for the existing Sod Grown on Plastic service, which was already included in the agreement’s scope of work.
The Stadium Manager confirmed that the current pricing rate for contract year four will provide just under five full field replacements. Sod services are charged to the Stadium Authority for Non-NFL Events and split 30/70 between the Stadium Authority and StadCo, respectively, for Shared Stadium Expenses as a Groundskeeping expense per the Stadium Lease between the Stadium Authority and StadCo. The Stadium Manager currently does not anticipate any charges to FY 2026/27 Non-NFL Event expenses for field replacements; however, that may change as the Non-NFL Event calendar is updated. Additionally, the Stadium Manager has shared that the exact amount allocated to Shared Stadium Expenses for FY 2026/27 is currently unknown due to various factors, including installation days and grass age.
To ensure efficiencies through administrative approval, which was intended through the original request for approval of the Agreement with West Coast Turf, the Stadium Manager is also requesting the Stadium Authority Board to delegate authority to the Executive Director for future amendments, 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 $1,680,000 (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, all subject to the same basic terms and conditions and budget appropriations, and 2) 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 $88,200 (reflective of a 0% 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. This 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 $8,920,000.
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) |
$4,800,000 |
|
Optional Year 4 (4/1/26 - 3/31/27) |
$1,600,000 |
|
Optional Year 5 (4/1/27 - 3/31/28) |
$1,680,000 |
|
6-Month As-Need Extension Period (4/1/28 - 9/30/28) |
$840,000 |
|
Total Not-to-Exceed Maximum Compensation |
$8,920,000 |
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 West Coast Turf, and the draft Amendment No. 1, staff recommends approval of the Stadium Manager’s requests related to the Agreement with West Coast Turf to continue the supply, delivery, and installation of sod for the field at Levi’s Stadium with minor modifications - with respect to the recommendation to approve Amendment No. 1, 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 additional six month extension, 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. 1 for comparison to the Stadium Authority’s customary language. Nothing in the proposed Amendment No. 1 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.
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. 1 to the Agreement with West Coast Turf will increase the agreement’s total not-to-exceed amount by $1,600,000, from $4,800,000 to $6,400,000 over the four-year term. 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 $8,920,000 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 with the exception of Groundskeeping, which is allocated 30/70, respectively.
While the Stadium Manager has stated that the exact amount is currently unknown for Shared Stadium Expenses due to various factors, including installation days and grass age, there are sufficient funds in the FY 2026/27 Shared Stadium Expenses Groundskeeping line item to cover Stadium Authority’s thirty percent (30%) of the agreement costs for contract year four should the contract amount be used entirely for Shared Stadium Expenses (up to $480,000).
At this time, the Stadium Manager does not anticipate any charges to FY 2026/27 Non-NFL Event expenses for field replacements; however, that may change as the Non-NFL Event calendar is updated. The Stadium Authority FY 2026/27 Non-NFL Events Budget only contains a net profit line item so such costs, if field replacements are provided for any unanticipated major Non-NFL Events, will be built into the projected net revenues from Non-NFL Events for the fiscal year.
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. 1 with West Coast Turf for supply, delivery, and installation of sod services at Levi’s Stadium to increase the maximum compensation by $1,600,000 to cover services from April 1, 2026 to March 31, 2027 and update the compensation and fee schedule to reflect Exhibit B-2 and Schedule A-1;
2. Authorize the Executive Director to approve future amendment to the Agreement with West Coast Turf to exercise the final one-year option for the fifth contract year, increase the not-to-exceed amount by $1,680,000 to cover services from April 1, 2027 to March 31, 2028, and adjust the compensation fee schedule to reflect rate increases not to exceed 5% 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 West Coast Turf, 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 not-to-exceed amount by $840,000 to cover up to 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, inclusive of all contract years and the six-month extension period, shall not exceed $8,920,000.
Staff
Prepared by: Christine Jung, Deputy City Manager
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Agreement with West Coast Turf
2. Draft Amendment No. 1 to Agreement with West Coast Turf
3. Stadium Manager’s Recommendation Memo