~ J~2~~ TO: HONORABLE MAYOR AND CITYCOUNCn.. FROM: Ralph G. Tonseth Katy Allen SUBJECT: SEE BELOW DATE: Council District: Cit~ide

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1 CITY OF ~~~~'~~~l ~ J~2~~ CAPI'TAL OF SILICON VAlLEY TO: HONORABLE MAYOR AND CITYCOUNCn.. COUNCIL AGENDA: ITEM: 8.2 FROM: Ralph G. Tonseth Katy Allen SUBJECT: SEE BELOW DATE: Council District: Cit~ide SUBJECT: THIRD AMENDMENT TO THE AGREEMENT WITH M. ARTHUR GENSLER, JR. & ASSOCIATES, INCORPORATED FOR MASTER ARCHITECTURAL SERVICES FOR THE NORMAN Y. MINETA SAN JOSE INTERNATIONAL AIRPORT. RECOMMENDATION Adoption of a resolution to approve the third amendment to the agreement with M. Arthur Gensler, Jr. & Associates (Gensler) for master architectural services, increasing compensation by $13,590,363, from $25,060,000, for a total agreement amount not to exceed $38,650,363, and extending the term of the agreement from December 1, 2005 to December 1, BACKGROUND In August 2000, Council approved an agreement withm. Arthur Gensler, Jr. & Associates (Gensler) for Master Architectural services to initiate pre-engineering and planning studies for Terminal Area design, including optimizing land use, existing conditions analysis, utility distribution, and traffic and public transportation studies. Gensler was selected in accordance with the City's adopted qualifications based consultant selection process in place at the time. Examples of recent airport terminal projects completed by Gensler as the lead architect include John Wayne Airport, Austin Bergstrom International Airport, Chicago O'Hare International Airport New International Tefminal, and the Atlanta Hartsfield International Airport New International Terminal. In May of 2001, Council subsequently approved the first amendment to the agreement to provide design services associated with development of the Central Terminal.

2 Page 2 Gensler is teamed with the Steinberg Group, a local business. Gensler maintains an office in San Jose, and qualifies as a local business entity under the recently adopted small and local business preference ordinance. On March 4, 2003, the electorate of the City of San Jose approved the Airport Safety and Traffic Relief Act (" ASTRA"), allowing the City to proceed with construction of the terminal area' projects defined in the Master Plan upon meeting certain transportation related conditions. The first of these Terminal Area projects is construction of the North Concourse facility, which includes an inline baggage screening system and temporary ticketing and baggage claim facilities to meet federal security requirements. On April 22, 2003, Council approved the second amendment to the agreement with Gensler to provide design services related to the development of the north concourse facility. On March 16, 2004, Council made a finding that the ASTRA conditions have been met, allowing for construction of the North Concourse and ultimately the Central Terminal. On June 22, 2004, City Council approved the architectural concept for the North Concourse, providing key information needed to allow the design of the project to proceed. During the period from April 22, 2003 to the approval of the architectural concept on June 22, 2004, staff, with extensive assistance from Gensler, completed a comprehensive program of stakeholder input to develop the architectural concept that was ultimately approved by Council. Gensler has developed a detailed knowledge of the Airport and it's development program, and is currently the architect of record for the North Concourse building. Under the existing agreement Gensler has provided excellent services to the City. Their performance on the North Concourse project is reflected in the outcome of the architectural concept development, which was unanimously approved by Council last June. ANAL YSIS The programming and architectural concept for the North Concourse were in the development stages at the time the second amendment was negotiated with Gensler in April of Programming of the building includes defining the layout and sizing of the various parts of the building that determine its functionality. Much of this information is developed as a result of the process of working with stakeholders to shape the building to meet their needs. As a basis for negotiating the second amendment, staff assumed a simpler, more utilitarian building than the one that was ultimately approved by Council. The current programming of the building reflects the cumulative input received from stakeholders, and includes the architectural concept approved by Council in June A groundbreaking celebration was held on August 18, 2004, and excavation for the North Concourse has begun. These factors drive the need to amend the Gensler agreement to account for the increased scope, budget, and complexity of the building currently under design. In addition, the second amendment was predicated on a schedule that assumed that the ASTRA finding would be made sooner than actually occurred. As a result, Gensler incurred additional

3 Page 3 management costs associated with carrying their team longer than anticipated. Gensler has requested compensation for these costs, and has provided adequate documentation to justify them. These schedule elongation costs are included as additional services in the proposed third amendment. The process of extensive stakeholder input has resulted in a building that meets the needs of its stakeholders and reflects the cumulative input of the community. Gensler's intimate participation in the process was authorized based on the level of effort required to appropriately address Council and other stakeholder input, and is justified by the ultimate success of the design process itself. However, much of Gensler's work in this expanded process, including participation in community and stakeholder meetings, preparation of presentation materials, services associated with programming of the building, additional construction administration services, ~esign services associated with owner and contractor requested changes, and certain consultation services fell outside the basic services included in the existing agreement. This third amendment provides payment for these additional services already received in association with the North Concourse building. Lastly, the agreement provides for Master Architectural services for development of the Airport. These include services such as design input to projects in the Tenninal Zone to ensure architectural consistency, participation in architectural review of tenant projects, and consultation services associated with programming of the Tenninal Zone. Examples of these efforts include but are not limited to architectural review of the AMF building, development of conceptual designs of North Concourse roadway canopies, development of architectural standards for North Concourse concessions, review of North Concourse concessions proposals for compliance with standards, evaluation of architectural treatment of TSA implemented security modifications to existing facilities. The table on the next page provides a summary of the allocation of funds in the second amendment, and the allocation of funds in the proposed third amendment.

4 Page 4 Element Second Amendment Allocation!!!l!:Q Amendment AuQmentation Total Allocation North Concourse Basic Services (Design) Gate AI-C Relocation Central Plant Expansion Utility Master Plan Central Tenninal Planning TSA Security Coordination & Support Additional Services Schedule Elongation North Concourse Services Master Architect Services $10,541,000 $7,355,825 $17,896, , , ,000 1,000,000 1,500, , , , , ,000 1,000,000 1,800,000 1,500,000 1,500, , ,015 2,245,272 2,245,272 3,000,000 3,000,000 Total $15,560,000 $13,590,363 $29,150,363 The proposed amendment brings the total amount of the Gensler agreement to $29,150,363 to complete the building design, provide construction administration services, provide additional services related to the North Concourse, and to provide additional master architectural services as needed. The total negotiated cost of Gensler's services associated with the North Concourse is approximately 11 % of the estimated construction value of the scope of work for which they are responsible. This cost compares favorably to industry standards for a building of this complexity in an airport environment; design percentages for other major U.S. airport expansion programs range from 10% to 17%. An additional consideration is that this proposed amendment fits within the existing budget approved by Council, and does not require augmentation of the budget. This contract amendment provides for the completion of the project, through design documents and construction administration. Oversight of Gensler's design activities and this agreement will continue to be perfonned with a series of checks and balances in place to ensure the design of the North Concourse meets the City's goals and objectives. A steering committee comprised of staff from the City Manager's Office, Airport and Public Works departments meets regularly to coordinate and resolve critical issues related to the Master Plan Program.

5 Page 5 PUBLIC OUTREACH The Airport has conducted numerous citywide and neighborhood community meetings to receive input on the various transportation and terminal concepts under consideration. As these projects increase in number and complexity, additional community meetings will be held to exchange information essential to the design process. In addition, stakeholder input was sought as part of the programming efforts on the North Concourse to ensure that this facility reflects the unique nature of the City of San Jose and the region. This contract amendment provides for the completion of the project through design documents and construction administration oversight of Gensler's design activities and this agreement will continue to be performed with a series of checks and balances in place to ensure the design of the North Concourse meets the City's goals and objectives. AIRPORT MASTER PLAN CONSISTENCY The third amendment to the Gensler agreement provides for continued consultant design services related to projects identified in the Airport Master Plan, or components of such projects, and is consistent with the Master Plan pursuant to Section (B)(2) of the Municipal Code. COORDINATION This consultant agreement amendment and memorandum have been coordinated with the City Attorney's Office, the City Manager's Budget Office and the Department of Planning, Building and Code Enforcement. COST IMPLICATIONS 1. AMOUNT OF RECOMMENDATION: $13,590, COST OF PROJECT: Original Agreement Amendment No.1 Amendment No.2 Amendment No.3 TOTAL $4,500,000 5,000,000 15,560, $38,650, SOURCE OF FUNDING: 520 -Airport Capital Improvement Fund 526 -Airport Revenue Bond Improvement Fund

6 Page 6 4. FISCAL IMPACT: This project is consistent with the Council-approved Budget Strategy Economic Recovery section, as it will spur construction spending in our local economy. The project has been reviewed, and was determined to have no significant adverse impact on the General Fund operating budget. BUDGET REFERENCE Fund Appn41 Appn. Name RC# Total Appn Amt. for Contract North Concourse Building North Concourse Building $17,269,000 $1,100, Proposed Budget Page Last Budget Action (Date, Ord. No.) V-64 6/22/04 $212,258,000 $5,488,000 I I $12,128,450 $61,251 V-64 V-61 6/22/04 6/22/04 $1,285,000 $100,000 V-31 6/22/04 $1,587,000 $100,000 V-32 6/22/04 $1,435,000 $100,000 V-32 6/22/04 I Total $239,322,000 I $13,590,363 I Central Plant Expansion Baggage Screening Phase II Checkpoint Terminal A Checkpoint Terminal C CEOA Resolution Nos and 71451, PP , -~.e::6?~ e.. /t:::i;..~l.-'2..~ ) ~ RALPH G. TON SETH "0 --Director of Aviation ~ ~ A-lJl..J/\..- KA TY ALLEN Director, Public Works Department