To: Honorable Mayor and Members of City Council
From: Steve Potter, City Manager
Prepared By: Liz Habkirk, Assistant City Manager
TITLE:
Title
Real Estate Broker Services
LABEL
RECOMMENDED ACTION:
Recommendation
Approve and authorize the City Manager to execute on behalf of the City an agreement with Colliers Parish International (dba Colliers) to provide Real Estate Broker Services in an amount not to exceed $25,000 annually
Body
DISCUSSION:
In February 2025, the City of Napa issued a request for proposals (RFP) for real estate broker services to assist the City with lease negotiations, property purchase and/or sale negotiations, and providing real estate advisory services on a consulting fee basis or a commission basis for individual transactions.
The City has used various means to accomplish its real estate management goals in the past including a combination of internal staff services and one-time transaction-based agreements with licensed real estate brokers. The purpose of the RFP was to solicit the services of an experienced, knowledgeable real estate professional to provide advice to any department and serve as the City’s primary negotiator in complex real estate negotiations. Though there has been a general need for this more coordinated approach to real estate management, the issuance of the RFP was timed in anticipation of having a broker available to commence negotiations with the Napa Valley Unified School District for the Harvest Middle School property as soon as possible.
The RFP identified a scope of services that included:
• Assisting the City with leasing transactions including lease acquisitions, base lease, renewals, extensions, expansions, subleasing, completing needs assessment, market research, proposal solicitation, marketing, document/lease review, and negotiations.
• Assisting the City with the purchase or sale of real property, which would include:
o Providing analysis and recommendations on certain City-owned properties.
o Identifying or confirming encumbrances and/or constraints on properties utilizing official records and geographic information systems.
o Completing market comparable and availability analyses.
o Preparing and/or review documents, including but not limited to real estate documents, property documents, and legal notices.
o Assisting with marketing and sale of City-owned property according to applicable requirements of the California Government Code.
o Leading property sale and purchase negotiations, including assistance with due diligence requests.
• Providing consulting services related to real estate feasibility and marketing analysis, which may include opinions of value, preparation of legal documents, and participating in property inspections or assessments to make recommendations to the City.
The scope of services is intended to provide the City with a full complement of real estate broker services, including the ability to review and provide recommendations on development proposals from third parties that may impact City properties.
Proposers were required to be a licensed real estate broker, with knowledge of the local Napa real estate market, and have a minimum of three years of real estate experience working for a public agency in California. Examples of relevant transactions where the individual broker served as the lead negotiator for a public agency were weighted heavily as public agency property transactions are unique from general commercial real estate deals. There are significant legal requirements associated with public property transactions, so the review committee considered this in their scoring criteria. The experience of the proposer’s key personnel, pricing, and proposed approach to providing the City services were also reviewed.
The City received seven qualified responses to the RFP which were scored independently by staff from three departments. Colliers Parrish International (“Colliers”) was the highest scoring proposal by all reviewers and the consensus recommendation for real estate broker services. Colliers’ lead broker, Mr. Bill Kampton, has worked locally for over thirty years in the Napa Valley. He has been the lead on public agency transactions for the County of Napa, Napa Sanitation District, and in the past five years on several successful transactions for the City of Napa Housing Authority. He is currently representing the Housing Authority on the purchase of two apartment buildings. In checking with Mr. Kampton’s references, it was reported that he is collaborative in working across agency departments to learn about the collective needs, has a practical and common sense driven approach, was persistent in pursuing deals on behalf of the agencies, and was responsive to all requests.
All Proposers were notified of the City’s intention to recommend a contract with Colliers on February 28, 2025 and were provided five business days through March 7th to protest the decision to the City Manager. No protest was received.
The proposed contract would be not to exceed $25,000 annually for requested consultation services on an hourly fee basis. The contract is not a guarantee to engage with Colliers on every transaction. Earned commissions based on successful leasing or sale agreements, outside of the hourly consultation fee, would be subject to the payment terms outlined in the contract and paid through an exclusive authorization to sell/lease agreement executed by the City Manager for individual transactions. Commissions earned through the purchase or leasing of property on behalf and at the request of the City would typically be paid by the seller or landlord and would be negotiated as such; however, the contract outlines the terms of payment if that is not the final agreement and includes a sliding commission scale to reduce the impact to the City.
The City will prohibit Colliers from acting as a “dual agent” meaning they will not be allowed to represent both the City and another party on a single transaction. If a future transaction would result in a “dual agent” scenario, the City could return to the qualified respondents from the RFP and enter into an agreement for that transaction.
Staff is recommending that Council authorize the City Manager to enter a five-year contract with Colliers through June 2030. The City Manager or their designee would serve as the contract manager, but all departments would have access to Colliers to assist with projects or transactions specific to the department areas. A separate contract will be brought before the Housing Authority for similar services.
FINANCIAL IMPACTS:
The not to exceed amount of $25,000 will be covered through existing budgets of departments engaging Colliers in consultation services. Any commission based earnings would be budgeted with the specific transaction lease, purchase, or sale.
CEQA:
The City Manager has determined that the Recommended Action described in this Staff report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060 (c).
DOCUMENTS ATTACHED:
ATCH 1 - Proposed Contract
NOTIFICATION:
None.