HomeMy WebLinkAboutKenndy and Mohn PS m_0
CITY OF —�
RN
ANJU�8uu;
WASHINGTON
Agreement for Services
This Agreement is made effective as of ;6LMI&I 3 , 2012, by and between KENNDY & MORN, P.S.
("KENNEDY& MOHN")and the CITY OF AUBURN ("CITY"). The parties agree as follows:
1. DESCRIPTION OF SERVICES. KENNEDY & MOHN agrees to provide the consulting services set forth in
the Scope of Services attached hereto at Exhibit A, by this reference made a part hereof, for the purpose of
conducting hotel development and market feasibility services for the Downtown Auburn area, more specifically
referenced in the submitted proposal for services as Phase I (Market Feasibility Study) and Phase II(Performance
Projections).
2. PAYMENT. For services delivered under the Scope of Services, the CITY agrees to pay KENNEDY &
MOHN a fee of$8,020 plus any applicable sales tax for Phase I services as specified in Exhibit A. The CITY
shall pay an advance payment of$6,000, after the execution of this Agreement but prior to beginning of the study
following the CITY's receipt of an invoice for said retainer. Notwithstanding its rate and payment provisions
contained in its proposal for services, KENNEDY & MOHN understands and agrees that payments must go
through City Council authorization at a regularly scheduled Council meeting and as such, payment shall only
occur after this authorization has been received. Under no circumstances shall the total fee paid by the CITY to
KENNEDY & MOHN inclusive of any and all authorized reimbursable expenses, exceed $8,020 plus any
applicable sales tax„ unless the CITY requests in writing and as an addendum to this Agreement additional hourly
consulting or meetings beyond the scope of assignment.
Pursuant to the Scope of Services specified in Exhibit A, Phase lI of the proposed services can be completed for a
fee of$2,500 with no additional expenses plus any applicable sales tax, if contracted within twelve(12)months of
the completion of the Phase I services. KENNEDY & MOHN understands and agrees that the CITY is under no
obligation through participation in this Agreement to ask for the completion of Phase II services and pay any
associated costs for these services, unless an authorized representative of the CITY expressly requests in writing
the conduct of Phase II services as specified in the Scope of Services.
3. EXPENSE REIMBURSEMENT. KENNEDY & MORN shall pay all "out-of-pocket" expenses, and shall not
be entitled to reimbursement from the CITY except for specific services, items or activities listed in the Scope of
Services as reimbursable goods or services.
4.TERM/TERMINATION.
A. This Agreement is effective upon both parties' signatures, and expires at 11:59 p.m. on January 31,
2013 or upon completion of KENNEDY & MOHN's services, whichever is earlier, unless extended by mutual
agreement prior to the completion of all services.
B. Either party may terminate the Agreement by notifying the other party in writing within seven (7)
calendar days of the intent to terminate. If this Agreement is terminated, CITY shall pay KENNEDY & MOHN
for all work performed as of the date of termination.
5. RELATIONSHIP OF PARTIES. KENNEDY & MOHN is an independent contractor with respect to the
CITY, and not an employee of the CITY. The CITY will not provide fringe benefits, including health insurance
benefits, paid vacation, or any other employee benefit, for the benefit of KENNEDY &MOHN.
6. EMPLOYEES. The provisions of this Agreement shall also bind KENNEDY & MOHN employees who
perform services for the CITY under this Agreement.
Page 1 of 3
AUBURN * MORE THAN YOU IMAGINED
7. INDEMNIFICATION / HOLD HARMLESS. KENNEDY & MOHN shall defend, indemnify and hold the
CITY, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses
or suits including attorney fees, arising out of or resulting from the acts, errors or omissions of KENNEDY &
MOHN in performance of this Agreement, except for injuries and damages caused by the sole negligence of the
CITY.
8. INSURANCE. KENNEDY & MOHN shall procure and maintain for the duration of the Agreement, insurance
against claims for injuries to persons or damage to property which may arise from or in connection with the
performance of the work hereunder by KENNEDY &MOHN, its agents, representatives, or employees.
A. Minimum Scope of Insurance: KENNEDY & MOHN shall obtain and submit evidence of to the
CITY insurance of the types described below:
1. Professional Liability insurance appropriate to KENNEDY &MOHN's profession.
B. Minimum Amounts of Insurance: KENNEDY & MOHN shall maintain the following insurance
limits:
1. Professional Liability insurance shall be written with limits no less than $1,000,000 per claim
and $1,000,000 policy aggregate limit.
C. Other Insurance Provisions: The insurance policies are to contain, or be endorsed to contain, the
following provisions:
1. KENNEDY & MOHN'S insurance coverage shall be primary insurance as respect to the
CITY. Any insurance, self-insurance, or insurance pool coverage maintained by the CITY
shall be excess of KENNEDY &MOHN'S insurance and shall not contribute with it.
2. KENNEDY & MOHN's insurance shall be endorsed to state that coverage shall not be
cancelled by either party, except after thirty (30) days prior written notice by certified mail,
return receipt requested, has been given to the CITY.
D. Acceptability of Insurers: Insurance is to be placed with insurers with a current A.M. Best rating of
not less than A: VII.
E. Verification of Coverage: KENNEDY & MOHN shall furnish CITY with original certificates,
evidencing the insurance requirements of KENNEDY & MOHN before commencement of the work.
9.ASSIGNMENT. KENNEDY& MOHN's obligations under this Agreement may not be assigned or transferred
to any other person, firm, or corporation without the prior written consent of the CITY.
10. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deerned
delivered when delivered in person or deposited in the United States mail, postage prepaid,addressed as follows:
IF to KENNEDY& MOHN: IF to the CITY:
Thomas P. Kennedy, CHA Kevin H. Snyder, AICP
Kennedy&Mohn, P.S. Planning and Development Director
14108 SE 182nd City of Auburn
Renton, WA 98058 25 W. Main Street
Auburn, WA 98001
Such address may be changed from time to time by either party by providing written notice to the other in the
manner set forth above.
Page 2 of 3
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other
promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior
written or oral agreements between the parties.
12. AMENDMENT. This Agreement may be modified or amended if the amendment is made in writing and is
signed by both parties.
13. SEVERABILITY. If any provision of this Agreement shall be held to be invalid or unenforceable for any
reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of
this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and
enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
14. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this
Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and
compel strict compliance with every provision of this Agreement.
15. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Washington. Venue for
any court action shall be in King County, Washington. If any suit or action is filed by any party based on the
subject matter of this proposal,the prevailing party shall be entitled to recover reasonable attorney fees incurred in
preparation or in prosecution or defense of any suit or action as fixed by the trail court and, if any appeal is taken
from the decision of the trial court,reasonable attorney fees as fixed by the appellate court.
16. PUBLIC RECORDS ACT. Notwithstanding any provisions in KENNEDY & MOHN'S proposal to the
contrary, the parties agree that any reports prepared under this Agreement are subject to Washington's Public
Records Act, Chapter 42.56 RCW. If KENNEDY & MOHN indicate in writing that a specific portion of any
report provided to the CITY contains proprietary or trade secret information, the CITY will provide KENNEDY
& MOHN notice of any Public Records requests it receives for such reports. The CITY will give KENNEDY
AND MONN ten (10) calendar days to obtain a court order enjoining the CITY'S release of such records, before
it releases them.
The undersigned have read the above statements,understand them and agree to abide by their terms.
CITY OF AUBURN KENNEDY& MOHN,P.S.
Signed: c J Signed: `
Date: 8✓r. 2 Date: cc 4--�aw 3► Za Z
Address: 25 West Main Street Address: 14108 SE 182ndr�_
Auburn, WA 98001 Renton, WA 98058
Phone: 253-931-3041 Phone: (425)277-5755
Page 3 of 3
EXHIBIT g.
H Kennedy & Moh,n, P.S.
Inv Xt HoW Brokerage, CofiMtii�g, &Appraisals
' ,
< www.kotel,kcaityNw.com
Novemb.er'27,2012
Mt. Kevin S'n der,AICP
Planning&Development Director
c/0 City of Auburn
25 W Main Street
Auburn,-Washington 98001
Transmitted by email: .ksnyder @auburnwa.gov. dlein@aubutnwA.gov
Dear Mr. Snyder:
At the request of Mr. an
Byron K. Miller,the exclusive.listing agent for the City of Auburn d Ms
'y
Tiffany Cooper, the Senior Director of Development for the Western Region for StdrWood
Hotels & Resorts Worldwide, we are -pleased to provide this proposal to study the market
feasibility for hotel development on a site located in downtown Auburn, Washington.
my Based 60 discussion with Mr. Miller, we recommend our study be completed in two phases.
I � , m
Phase I of our.study will.include a review of the local lodging market to evaluate whether there is
sufficient demand to support more hotel rooms and, if so,make recommendations regarding the
type, si2te, affiliation, and quality level of property best suited for the market. The initial phase
will- -a.Iso-include commentary regarding the suitability of the proposed site. Phase II of our study
will incWde'the' 'p' repardtion of peffo
rrriance,prqjections Which include rate and occupancy and
net operating income projections that the proposed hotel could reasonably be expected toachieve
during its first five years of operation.
If at any ;stage of the assignment we conclude that the feasibility of the proposed hotel is
questionable, we will stop our work and report to you With out findings, At that 'point, you will
have the option of stopping the assignment and paying for that portion of the project that has
been com completed plus any out-of-pocket expenses incurred, or authorizing . 0
0 - g us to complete the
assignment.
QUALIFICATIONS OF KENNEDY&MOHN,P.S.
Kennedy & Molm is one of the leading ptofessio0al .services�fm.ns� in the Northwest and Upper
Rocky Mountain,states that'is devoted solely to the hospitality industry. The firm, which has
been in existence since 1988,'has two professionals with a combined total of more than 60 years
of experience in the'hospitality-industry.
ThPmas P.Kennedy,CqA Michael J.'Mokn,M Al
141085E 182rw"^-kenton,WA 98058 1970951sl-Ave.S'E-'Bothell,WA 98012
Tel:(4 V?-�5755,,-Fak:(425)277-5759 Tel:025)485-79'25!-"Fax:(425)48s-9114
tkftiledy6i4oletRealt'yN'W.coin mmohnOHoORealtyNW.com
�4
I:
1h•�
i
I
I
i
'Mr. Keyin.,Snydpr
November'27,201-2
.Page 2
,Kennedy&Mohn,P;S.provides services in three primary areas:
# Management consulting services, including market an economic feasibility analyses,
es d
strategic planning services, acquisitions due diligence, litigation support, and other
general consulting services.
♦ Appraisal services. Our firm has completed appraisals of hospitality properties located
throughout the West Coast and Alaska, ranging from small limited-service hotels to
$100+ million resorts. These appraisals have been completed for a Wide variety of
..p y
majorJending-institutions, and private developers for ouacquisiti
p on purposes,
property tax: appeals, or estate 'tax planning. Michael J. Mohn holds the MAI
designation from the Appraisal Institute and appraisal licenses in multiple states.
♦ Brokerage services. Thomas P. Kennedy and Michael J. Mohn are licensed real estate
brokers. Our 'vast. experience in the industry and wide range of contacts provides
invaluable assistance to buyers and sellers of hospitality properties. We have
successfully represented the interests of our clients as buyers and sellers offering
brokerage services in various transactions throughout 'the Pacific Northwest,
representing more than..$160 million in-asset value.
The following characteristics distinguish our firm from other hospitality consulting-firms:
♦ Kennedy & Mohn not only provides the benefit of many years of experience in
observing and analyzing what does and doesn't work in the hospitality itality industry, but we
also know what needs to be done to implement "consulting theory and
recommendations." We are not in the business of delivering reports that look good but
simply gather dust on the, shelf.
♦ Kennedy & Mohn has developed an excellent reputation for delivering insightful, Well-
researched, high quality work and for"telling it like it is" rather.than,simply telling the
Client what they want to hear.. Ve have purposely kept the firm small go the principals
can be directly involved with each client=thus ensuring high quality services. You may
learn more about our company, out philosophy, and our experience by visiting our web
site at www.H6te'lRealtyNW.com
KENNEDY MOHN,P.S.
Hotelbro_ker'age,Consulting,&Appraisals,
Mr. Kevin Snyder
November 27,.2012
Page,3
SCOPE OF WORK
Phase 1. Market feasibility Study
Our market research and analysis will includelhe following scope of work.
♦ At the outset of the study.we will meet with you to review your preliminary plans and/or
vision fof the project and to gather information that would be us,effil to our
,research and analysis.
♦ RevieWina the market suitability of the 4-block downtown urban center (DUC) which will
include:
• Proximity,to demand generators.
• Access and visibility.
• Surrounding neighborhood characteristics and how they affect the desirability
for lodging use (including a definition of the competitive market area in the
Auburn area).
4i Advantages and disadvantages of this location compared to the sites of prima'
competitors.
♦ Conducting interviews With state and local officials regardingeponoinic, tourism, and
development-conditions and trends in the area, and the impact of,any changes on the
demand for:hotel rooms. As considered appropriate, we will interview representatives
of the fbIlowing organizations:
• Economic development/area data and site information Will be provided by the Economic
Development Manager
• Community Development(Zoning/parking/proposed hotels)
io 'Port of Sedttle'(D'Omestic&International air passenger volume)
• Washington State Department of Transportation(traffic volumes/highway changes)
• Washington Employment Security Pepartrpent(employment trends)
• Other pertinent organizations as determined in the course of our fieldwork
♦ We will research the better quality hotels currently operating in the Auburn market that
might be competitive with a hotel located 'on your site to establish a baseline,of historical
performance in the market. In addition, as appropriate, we will interview owners;
managers, or corporate representatives tative's o''f th'e directly competitive hotels to gather
additional information concerning the local lodging market.. Based on information
.
gathered through these sources we.will complete a profile of existing and proposed ho I tels
KENNE1D'V,&MOHN,P.S.
Hotel Brokerage,Cofisultjnk,'&Appraisals
Mr. Kevin Snyder
November 27,2012
Page 4
in the area,that would be most directly competitive with"a' hotel if built on your site. We
will inspect the competitive hotels and gather information to ascertain the following:
• Physical characteristics of property(including_ food and beverage and banquet and
meeting.capacity).
• Management and franchise affiliations.
• Published room rates(including publishedbanquet and meeting space rates).
• Estimated occupancy,average room rate, and RevPAR.
• Competitive advantages and disadvantages of each property.
+ Status of proposed hotel projects.
• Outlook for the competitive hotel market:
Based on this research, we will project market occupancy rates.for the competitive market
through your proposed hotel's fifth year of operation, based 'on anticipated changes in the
supply and demand for hotel rooms, in order to determine the likely strength or weakness of
the market.
If development of a hotel is warranted, as appropriate, we will make recommendations
regarding the type and quality hotel best suited for the market, the number, mix, and
approximate size of<guestrooms, the number and approximate size of meetings and banquet
rooms and food and beverage outlets that should,be included in the hotel, and any additional
guest amenities that may enhance the performance of the hotel. We will also comment on
management alternatives,the suitability of the proposed hotel and its brand(if affiliated), and
the recommended market positioning of the hotel relative to its competition.
Phase II—Performance Projections
Once we Have reached agreement with you regarding: the type and quality of hotel and number
and mix of hotel guestrooms, affiliation, and amenities, and have your written authorization to
proceed,we will then:
♦ Project the occupancy rate and average room rate the proposed hotel could reasonably be
expected to achieve during its first five years of operation.
y Project the net operating income the proposed hotel could reasonably be expected to achieve
during its first five years of operation,based on industry averages and actual operating results
of comparable hotels. Net operating income is defined as income available for.debt service
before deducting depreciation,-interest,rent, amortization,and income taxes. Our projections
Will assume the hotel will be professionally managed and marketed. Our report,will include
supporting rationale for our projections.
KENNEDY-&MOHN,P.S.
Hotel Brokerage,Consulting,&Appraisals
,Mr-. Kevin Snyder
November 27;2012
Page 5
•COMMUNICATION OF STUDY RESULTS
At-,the,completion of Phase 1, we will prepare a summary letter reportoutlining our findings and
conclusions. If within the subsequent 12=ffionth period you,or a developer of your choice,notify
us in writing that you Wish to proceed With Phase II of the assignment, We Will provide an
amended prqposalAich authorizes us to pTqqeed with Phase II. At the conclusion of this phase,
we Will amend our Phase I report and issue ,a final report summarizing out findings .a'nd
conclusions tom both.phases of the engagement. If both phases of the study are completed
simultaneously; our findih2s and conclusions from both phases will
j pile.final report summarizing g,o
be provided following completion of the assignment. Our analysis and report(s) will be subject
:
to a number of assumptions and limiting-conditions,which are attached to this letter.
PROFESSIONAL FEES AND TIMETABLE
Our professional fee for completion of'our market feasibility-study and finatic.hil. projections will
be $7,500 for Phase I and $2j500 f6r-Phase 11. In additionto our fee for Phase I, we will be
reimbursed 'fdr the cost of a Smith Travel Research Report estimated at roundly $520 (includes
sales tax).
We will require receipt of a $6,000 retainer prior to beginning the stud y-
The balance of our
,professional fees and out-of-pocket expenses will be due upon delivery of our draft report. Phase
11 of the assignment can be completed for $2,500 (no additional expenses) if contracted within
12-months of completion of our Phase I report.
Given our present scheduling, we can begin the study on or about Decemb& 17;201.2,providing
we are in receipt of the requested retainer and your written authorization to proceed no later than
December 7, 2012; Commencement and completion dates are subject to change until We are in
receipt of the signed engagement letter and retainer and have confirmed the timing :for the.
assignment.!3§ignment. 13arfing unforeseen c ir(urInstancpsi We Will complete Phase. I of the study within:
approximately four weeks and Phase 11 within approximately three weeks. Once the report is
reviewed by you, three signed and bound copies and one signed and unbound copy of the final
report will be issued.
Additional hourly consulting,or meetings beyond the scope of this assignment Will be.billed at
our standard hourly rate of$300/hour.
If any suit or action is filed by any party based on the subject matter of this proposal, the
prevailing party shall be entitleld'to recover reasonable attorney fees incurred in preparation or in
prosecution or defense of any suit or actioh'as fixed by the trial court and, if any appeal is taken
from the decision of the"trial court',reasonable attorney fees as fixed.by I the app6llate court.
KENNEDY&M10HIN,P.S.
Hotel Btokerdge,Consulting, Appraisals
. l
Mr. Kevin Snyder
Nov6rnbet 27; 2012
'Page 6
ACCEPTANCE
.If this letter correctly states the nature of-the work you would like performed and the other
rni
arrafige ents are satisfactory,isfactory, please attach a copy of this proposal i,o th,el City .of Aubum-
Agrtelfient for Service's document and sign and that document via email or facsimile and mail
the required retainer as our authorization to begin the study. This proposal letter is valid for
fifte6nday§ from its issue,date.
Please, .call,, f yo have any questions after you have reviewed-this letter., We look forward to
working With you.
Sincerely,
t6mas'P.'Ke edy,
TPK:M-J*M
.KENNEDY&MIORN,P.S.
'Hotel Brbke.rage,,Cqnsu1fing,-&Appraisals
Mr. Kevin Snyder
November27;2012
Page 7
GENERAL ASSUMPTIONS
This feasibility study,report has been prepared under the following general assumptions:
No responsibility is assumed for matters of a legal nature.
* Responsible,ownership and competent property management are assumed.
* The information provided by others is believed to be "reliable. However,no warranty is given
for its accuracy.
* All engineering is assumed to be correct. The plot plans and illustrative material in this
report are included only to assist the reader in visualizing the property.
* It is assumed there-are no hidden or.unapparent conditions of the property, subsoil, or
structures that render"it more or less useful. No responsibility is assumed for such conditions
or for arranging for engineering studies that may be_required to discover them.
Full compliance with all applicable federal, state, and local environmental regulations and
laws is as
* Full compliance with all applicable zoning and use regulations and restrictions is assumed.
* It is assumed that all ,required licenses, certificates of occupancy, consents, or other
legislative or administrative authority'from any local,state,or national government or private
entity or organization have been or can be'obtained.
* It is assumed that the utilization of the land and itnproveinents is within the boundaries or
property lines of the property described and that there is no encroachment or trespass.
KENNEDY.&MOHN,P.S.
Hotel Brokei* Consulting,&Appraisals
Mr.r. KeVifi Snyder Snyde
Novdihber 27,2012
Page 8
LIMITING CONDITIONS
This feasibility study report has been prepared under'the following general limiting conditions:
♦ Possession of this report, or a copy thereof, does not carry With it the right of"publication. It
may not"be,used for Any purpose by any person other than the party to whom it is addressed
without the written consent of Kennedy & Mohn, P.S;, and in any event only with proper
written qualification and.only in its entirety.
♦ Kennedy & Mohn, P.9., is not required to give further consultation, testimony; or be in
attendance in court with ith xeference, to this report unless arrangemeiiis have,been previously
made.
♦ Projections of fututerevequ.e, expenses, net operating income, mortgage debt service, capital
outlays,;cash flow, or inflation represent our judgment of the assumptions likely to be used by
,informed persons in the marketplace. These estimates are intended solely for analytical
puipos6§and are not intended to accurately predict future results or events.,Actual performance
wi 41 di an
differ from these projections, d these differences may be significant.
I
♦ Estimates of project cost and -operating, performance are based on building, 'plans and
spedifications,proVided by-the client during the course of the study. Cost figures are intended as
approximations only, and should be verified by competent architectural and engineering firms.
In addition,to the ex I tent that the eventual design and construction of the project vary from"the
plans and specifications provided, the actual development costs and operating performance of
the project will differ from the estimates presentddherein.
♦ Oiles,s,otherwise-stated in this report, the existence'- of hazardous substances, including Without
limitation asbestos, polychlorinated biplienylsi petroleum leakage, or agricultural chemicals,
Which may or may not be present.oA the,pro pe rty, or other environmental conditions, were.not
called to the attention of nor did.the consultant become aware of such during the consultant's
inspection. The consultant has no knowledge of the existence of-such materials,on or in the
property unless otherwise stated. The consultant, however, is not qual.ified to test such
substances or conditions. The presence of such substances, such as asbestos urea formaldehyde
foam insulation, or other hazardous substances of 'environmental conditions, may affect the
feasibility of the ptoJe&t'. Our analysis jss'prediqated on the assumption that there is no such
condition on or in the property or in such proximity thereto. No responsibility is assumed for
any suchconditions,nor,for any"expertise orengindering knowledge ge'req-uired to'discover them.
KEN14,EDY&MOHN;P.S.
Hotel Brokerage,Consuldng,&.AppTaisals