REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Agreements with HKS Architects, Inc., Hellmuth, Obata & Kassabaum, Inc., and Populous Design Build, Inc. for As-Needed Architectural and Engineering Services at Levi’s Stadium, each with a Total Not-To-Exceed Amount of $7,500,000, and Limiting Stadium Manager’s Authorization to Spend to a Total Not-To-Exceed Amount of $15,000,000, Inclusive of All Contract and Option Years, Across All Three Agreements
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 it as a high-quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility…”
Due to the size, age, and complexity of Levi’s Stadium that requires ongoing capital investment across a wide range systems and components throughout its interior and exterior, the Stadium Manager has identified the need to maintain a pool of qualified architectural and engineering contractors to provide design services on an as-needed basis.
Levi’s Stadium requires ongoing capital investment to maintain, repair, and improve a wide range of building systems and components throughout the interior and exterior of the facility. These capital projects may involve renovations and upgrades; structural, mechanical, electrical, and plumbing (MEP) improvements; life safety systems; code compliance and Americans with Disabilities Act (ADA) enhancements; and general architectural planning and design. These projects often require specialized architectural and engineering services, including existing conditions assessments, site investigations, feasibility studies, conceptual development, design, cost estimating, permitting, procurement and bidding support, and construction administration. Services may also include coordination with Stadium operations and other project stakeholders, as well as timely technical support for urgent, unforeseen, or emerging facility needs.
The Stadium Manager’s current agreements for on-call architectural and engineering services expire on November 14, 2026. To ensure timely access to qualified professionals, the Stadium Manager proposes entering into new agreements with multiple firms that can provide services as needed.
Under this approach, the Stadium Manager would select the firm best suited for each project based on qualifications, experience, capacity, technical expertise, and availability. Maintaining agreements with multiple firms allows the Stadium Manager to match each project with the appropriate expertise and respond more quickly to routine, urgent, and specialized needs.
Services will be authorized through individual task orders. Each task order would define the project scope, schedule, and compensation. All task orders would be limited to projects included in the approved Santa Clara Stadium Authority (Stadium Authority) Capital Expense budget.
On April 22, 2026, the Stadium Manager issued a Request for Statement of Qualifications (RFSOQ) to select a pool of qualified firms for on-call architectural and engineering services at Levi’s Stadium. The RFSOQ was posted on Bonfire Interactive, the Stadium Manager’s electronic procurement portal. The Stadium Manager also directly invited firms to its established supplier list and suppliers registered in the portal under commodity codes related to architectural and engineering services.
Four proposals were received from the following firms on or before the RFSOQ due date and time.
1. Gordon Prill, Inc
2. HKS Architects, Inc (“HKS”)
3. Hellmuth, Obata & Kassabaum, Inc. (“HOK”)
4. Populous Design Build, Inc. (“Populous”)
An evaluation committee reviewed the proposals based on the criteria outlined in the RFSOQ. The Stadium Manager subsequently negotiated rates, annual rate increases, materials and subcontractor markups, and other fees with HKS, HOK, and Populous. The proposed agreements establish a prequalified pool of three firms that can receive task orders on an as-needed basis.
Accordingly, the Stadium Manager requests that the Stadium Authority Board (Board) approve the following actions related to three master service agreements for on-call, as-needed architectural and engineering services:
1. Approve and authorize the Stadium Manager to execute agreements with HKS Architects, Inc., HOK, and Populous Inc. (collectively, the “Agreements”) to provide as needed architectural and engineering services at Levi’s Stadium for an initial five (5) year term commencing November 15, 2026, and expiring November 14, 2031, with five (5) optional one-year extensions through November 14, 2036. The total aggregate amount payable under all agreements shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000) per contract year, Seven Million Five Hundred Thousand Dollars ($7,500,000) over the initial five-year period, and Fifteen Million Dollars ($15,000,000) over the maximum ten (10) year term. The term for each fiscal year is contingent on the SCSA approving the applicable fiscal year's budget, including amounts due under the Agreements.
2. Authorize the Stadium Authority Executive Director to approve future amendments as needed to: (a) exercise the option to extend the Agreements by five (5) one-year extension periods through November 14, 2036 and to increase the not-to-exceed amount for each extension period by One Million Five Hundred Thousand Dollars ($1,500,000) to cover services during each extension period; (b) increase labor rates and all other fees in contract years six through ten (November 15, 2031 - November 14, 2036) by no more than five percent (5%) over the previous year’s rates in accordance with the terms and conditions associated with labor rate increases in Exhibit B of the Agreements, subject to appropriation of funds.
3. Authorize the Stadium Manager to issue and execute task orders to the three contracting firms to perform Architectural and Engineering Services for any approved budget items as part of the SCSA’s annual budget process during the Agreement term and any extensions thereof up to the aggregate not-to-exceed amount for each contract year, subject to budget appropriations.
A Recommendation for Award Memo was submitted by the Stadium Manager describing the services, solicitation process, and the request in more detail (Attachment 4).
DISCUSSION
Stadium Authority staff reviewed the Stadium Manager’s Recommendation for Award (RFA) memorandum and supporting documents for consistency with the Stadium Authority Procurement Policy, Santa Clara City Code Chapter 2.105.140(c), and applicable State laws governing the procurement of architectural and engineering services.
The Stadium Manager conducted a qualifications-based solicitation and received four proposals. The proposals were evaluated based on the firm’s qualifications. The Stadium Manager then reviewed the proposed rates and determined they were fair and reasonable. Based on this process, the Stadium Manager recommends agreements with HKS Architects, Inc., HOK, and Populous Inc. to provide on-call, as-needed architectural and engineering services.
City staff requested clarification regarding proposed labor rates, subcontractor markups, and annual rate increases. In response, the Stadium Manager compared the proposed labor rates with rates submitted by other proposers, comparable public-agency architectural and engineering agreements, and Bureau of Labor Statistics wage data. Based on this analysis, the Stadium Manager concluded that the proposed rates are fair and reasonable.
HKS proposed the lowest labor rates, generally below the comparison benchmarks. HOK and Populous proposed higher rates for senior project manager and director-level positions, reflecting their specialized experience. These higher-level positions would be used only when warranted by a project’s scope, complexity, and service needs.
Populous proposed no subconsultant markup. HKS proposed a 10% markup, and HOK proposed an 8% markup. These markups are consistent with comparable public-agency agreements: the City of Santa Clara generally limits subcontractor markups to 10%, while the City of Pleasanton and Las Positas Community College District allow markups of up to 15%. For the initial five-year term, the Stadium Manager also negotiated annual rate increases of 3.25% or less.
Although three separate agreements are proposed, the combined annual not-to-exceed amount for all three agreements is $1,500,000. If approved, the agreements will be implemented through the Stadium Manager’s issuance of task orders for individual design projects in accordance with the agreement terms and applicable state law. The Stadium Manager will also ensure that the professional classifications assigned to each task order are appropriate for the project’s scope, complexity, and service needs.
Architectural and engineering services will be funded through the approved budgets for individual capital projects. Because the scope and cost of architectural and engineering services cannot be determined until individual projects are further defined, the Stadium Manager calculated the proposed annual not-to-exceed amount using an estimated cost of approximately 15% of total projected capital project costs.
The Stadium Authority has a significantly larger approved Capital Expense budget in Fiscal Years 2025/26 and 2026/27. For estimating anticipated architectural and engineering expenditures, the Stadium Manager used $10,000,000 as a conservative and representative annual capital-project cost base. Applying an estimated architectural and engineering cost of 15% results in the proposed combined annual not-to-exceed amount of $1,500,000.
The Stadium Manager anticipates an ongoing need for architectural and engineering services throughout the term of the Agreements and does not anticipate a reduction in the number of approved capital projects requiring these services. Accordingly, total expenditures across the three agreements will not exceed $1,500,000 annually, or $7,500,000 over the initial five-year term.
The Agreements also include five optional one-year renewal periods. If all five optional renewal periods are exercised, Stadium Manager’s authority to spend across all three Agreements will not exceed $15,000,000 over the maximum 10-year term. The Stadium Manager will monitor expenditures across the Agreements to ensure that the applicable annual and aggregate not-to-exceed amounts are not exceeded.
The chart below summarizes the projected costs over the ten-year term of the Agreements.
Table 1 - Cost Summary
|
Description |
Maximum Total Expenditures Across Three Agreements |
|
Year 1 |
$1,500,000 |
|
Year 2 |
$1,500,000 |
|
Year 3 |
$1,500,000 |
|
Year 4 |
$1,500,000 |
|
Year 5 |
$1,500,000 |
|
Initial Five-Year Term |
$7,500,000 |
|
Year 6 |
$1,500,000 |
|
Year 7 |
$1,500,000 |
|
Year 8 |
$1,500,000 |
|
Year 9 |
$1,500,000 |
|
Year 10 |
$1,500,000 |
|
Maximum Ten-Year Term |
$15,000,000 |
The Agreements establish provisions for labor rate adjustments during the initial five-year term, from Year One through Year Five. Consultant and subconsultant labor rates will remain fixed during the first two years of the Agreements. During contract Years Three through Five, consultant labor rates may increase annually as specified in Exhibit B, generally by 3%, except that HOK’s position-specific annual percentage increases will apply as identified in its rate schedule. Subconsultant labor rates may increase by up to 3% annually, or by a lower negotiated escalation rate if applicable.
Beginning with the first optional one-year extension period, all rates and charges will be subject to annual negotiation in accordance with Exhibit B. Any proposed adjustment must be submitted to the Stadium Manager at least 90 days before its requested effective date, identify the current and proposed rates, percentage change, and basis for the request, and be approved by written amendment before taking effect. Rates will remain unchanged unless and until such approval is provided.
Staff recommends delegation of authority to the Stadium Authority Executive Director to approve the proposed options to extend for Years Six through Ten, provided that: (1) any proposed rate increases do not exceed 5% over the prior contract year’s approved rates; (2) the adjustment complies with Exhibit B; and (3) sufficient funds have been appropriated in the applicable Stadium Authority budget. The annual aggregate not-to-exceed amount of $1,500,000 will remain unchanged unless separately authorized by the Stadium Authority Board. Therefore, any approved rate increase must be managed within the applicable annual aggregate not-to-exceed amount and approved project budgets.
These Agreements do not guarantee a minimum amount of work or funding to any individual firm. Services will be authorized on an as-needed basis through individual task orders issued by the Stadium Manager. Each task order will identify the specific scope of services and compensation and will be funded directly from the applicable project budget approved by the Santa Clara Stadium Authority Board.
The Stadium Authority Counsel’s Office has reviewed the Agreements for comparison to the Stadium Authority’s customary language. Nothing in the Agreements change 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 not a project under California Environmental Quality Act (“CEQA”) because the approval for on-call architectural, engineering, and specialty design services does not approve a specific physical project, authorize construction, or commit the Stadium Authority to a particular design.
FISCAL IMPACT
The total aggregate amount that the Stadium Manager is authorized to spend under all three Agreements will not exceed $7,500,000 over the initial five-year term. If all five optional one-year renewal periods are exercised, the total aggregate amount payable under all three Agreements will not exceed $15,000,000 over the maximum ten-year term.
Architectural and engineering services will be funded from applicable Capital Expense budget items approved by the Stadium Authority Board. The Stadium Manager is requesting an annual aggregate not-to-exceed amount of $1,500,000 across all three Agreements. Actual expenditures will be based on the architectural and engineering services required for individual projects and will be authorized on an as-needed basis through approved Task Orders.
There are sufficient funds in the Stadium Authority Fiscal Year (FY) 2026/27 Capital Expense Budget to cover the aggregate not-to-exceed amount of $1,500,000 for the first year of the Agreements. Funding for each Task Order will be charged directly to the applicable approved Capital Expense budget item associated with the project.
Funding for subsequent fiscal years is conditioned upon approval of the Stadium Authority budget for the applicable fiscal year that includes sufficient funding for architectural and engineering services as required under Santa Clara City Code Section 17.30.100. The Stadium Manager may expend up to $1,500,000 annually across all three Agreements, subject to available appropriations within the applicable approved Capital Expense budget items and the aggregate not-to-exceed amount of $7,500,000 for the initial five-year term. If the five optional one-year renewal periods are exercised, expenditures will remain subject to annual budget approval and will not exceed $15,000,000 in the aggregate over the maximum ten-year term.
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 agreements with HKS Architects, Inc., Hellmuth, Obata & Kassabaum, Inc., and Populous Design Build, Inc. (collectively, the “Agreements”) to provide as needed architectural and engineering services at Levi’s Stadium for an initial five (5) year term commencing November 15, 2026, and expiring November 14, 2031, with five (5) optional one-year extensions through November 14, 2036 in substantially the forms presented, with the total aggregate amount payable under all agreements not to exceed One Million Five Hundred Thousand Dollars ($1,500,000) per contract year, Seven Million Five Hundred Thousand Dollars ($7,500,000) over the initial five-year period, and Fifteen Million Dollars ($15,000,000) over the maximum ten (10) year term, subject to appropriation of funds;
2. Authorize the Stadium Authority Executive Director to approve future amendments as needed to: (a) exercise the option to extend the Agreements by five (5) one-year extension periods through November 14, 2036; and (b) increase labor rates and all other fees in contract years six through ten (November 15, 2031 - November 14, 2036) by no more than five percent (5%) over the previous year’s rates in accordance with the terms and conditions associated with labor rate increases in Exhibit B of the Agreements, subject to appropriation of funds; and
3. Authorize the Stadium Manager to issue and execute task orders in accordance with the terms of the Agreements to perform Architectural and Engineering Services for any approved capital improvement project as part of the SCSA’s annual budget process during the terms of the agreements and any extensions thereof up to the aggregate not-to-exceed amount for each contract year, subject to budget appropriations.
Staff
Reviewed by: Kenn Lee, Acting Assistant City Manager / Chief Financial Officer
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Draft Agreement with HKS Architects, Inc.
2. Draft Agreement with HOK
3. Draft Agreement with Populous, Inc.
4. Stadium Manager’s Recommendation Memo