Agenda Item AGENDA STAFF REPORT ASR Control 24-000430
MEETING DATE:	06/25/24
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	2
SUBMITTING Agency/Department:	County Executive Office (Approved)
Department contact person(s):	Michelle Aguirre (714) 834-4304
	Thomas A. Miller (714) 834-6019

Subject: Ordinance and Pre-Development Agreement for Workforce Reentry Center

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Ordinance to Form

Public Hearing

3 Votes Board Majority

Budgeted: N/A

Current Year Cost: N/A

Annual Cost: See Financial Impact Section

Staffing Impact:

# of Positions:

Sole Source: No

Current Fiscal Year Revenue: N/A

Funding Source: Fund 12M: 100%	County Audit in last 3 years: No
Levine Act Review Completed: Yes

Prior Board Action: 2/27/2024 #43

RECOMMENDED ACTION(S):

1.	Read the title of the Ordinance: An Ordinance of the County of Orange, California authorizing contracts with Griffin/Swinerton LLC, Medlin Workforce & Reentry Solutions LLC, and/or Hub for Integration, Reentry & Employment for development and operation of a Workforce Reentry Center.
2.	Waive further reading of the Ordinance.
3.	Conduct a Public Hearing.
4.	Consider the matter and adopt the Ordinance.
5.	Approve Pre-Development Agreement with Griffin/Swinerton LLC for Phase 1 services to be completed within 18-month term, upon execution of agreement, including refining site design and facility programming into a final site plan, schematic design, design development, approvals/entitlements, and a Guaranteed Maximum Price for the Workforce Reentry Center.

Authorize the Chief Real Estate Officer or designee to execute the Pre-Development Agreement with Griffin/Swinerton LLC in substantially the same form attached with minor modifications that do not change the obligations to the County with approval by County Counsel, and to take any action necessary to administer the Pre-Development Agreement within an amount not to exceed $5,378,794, including executing future amendment(s) to the Pre-Development Agreement provided those amendments would result in minor, non-substantive changes which do not create or increase financial obligations or liabilities on the part of the County by more than $75,000 annually, and return to the Board of Supervisors for approval of future Development Agreement, lease agreement, and/or management/operator agreement related to designing, entitling, constructing, operating, and maintaining the Workforce Reentry Center.

SUMMARY:

Adoption of an Ordinance will authorize contracts facilitating the development and operation of the Workforce Reentry Center and approval of a Pre-Development Agreement with Griffin/Swinerton LLC will provide preconstruction and design services for the development of the Workforce Reentry Center.

BACKGROUND INFORMATION:

On February 27, 2024, the Board of Supervisors (“Board”), pursuant to Government Code Sections 25515, et seq., adopted a Resolution that approved a request for proposals process and selected the team made up of Griffin/Swinerton LLC (Developer) and Medlin Workforce & Reentry Solutions LLC (Operator) as the Primary Respondent to the County’s competitive solicitation for development and operation of a Workforce Reentry Center (Project) at 561 The City Drive South in Orange (Property). The Resolution also found that the Workforce Reentry Center (WRC) will result in agency uses and is therefore not subject to the Surplus Land Act. On this same date, the Board also approved an Exclusive Negotiation Agreement (ENA) with Developer and Operator that provided a period for the County, Developer and Operator (collectively, the Parties) to develop programming and negotiate the form of a subsequent agreement for the Project.

Conceptual Program

Since execution of the ENA, the Parties have worked together to develop programming, a conceptual site design (attached), and a preliminary Project budget. The preliminary building program for the WRC is comprised of an approximately 36,000 square foot (SF), two-story vocational/operations building, an approximately 16,000 SF, one-story retail/culinary building, and an approximately 26,000 SF, two-story housing building. The vocational/operations building is anticipated to include a large training warehouse, multi-purpose room, classrooms, and offices for operations and management. The retail/culinary building is anticipated to include various kitchens for training and production, a grab-n-go style café, and other retail space where program participants will develop, produce, and provide goods and/or services to the public as part of the vocational training program. The housing building is anticipated to provide on-site housing for approximately 50 selected program participants. The site is also conceptually planned to include approximately 200 surface level parking spaces, an outdoor pet training/relief area, an outdoor activity/garden area for program participants, and a new security block wall between the Property and the adjacent Theo Lacy Facility.

Pre-Development Agreement, Estimated Costs and Future Contracts

The County and Developer have also negotiated a Pre-Development Agreement (PDA). The attached PDA with Developer will provide for preconstruction and design services including refinements to the site design and facility programming into a final site plan, schematic designs, design development, approvals/entitlements, and establishing a Guaranteed Maximum Price (GMP) for the development (Phase 1). Once Phase 1 is completed, a negotiated Development Agreement (DA) with final development plans and GMP will be presented to the Board for approval. The subsequent DA will provide for construction services including completion of construction drawings and vertical development of the WRC (Phase 2). Based upon early conceptual estimates, the overall estimated cost at this time for the development of the WRC is approximately $86.4 million, excluding an escalation allowance and any costs associated with County administration and County contingency. Phase 1 will cost approximately $5.4 million and Phase 2 is estimated to cost approximately $81 million. A tentative schedule estimates Phase 1 will be completed in May 2025 and Phase 2, if approved, will be completed in September 2027. Developer and Operator are part of a consortium also comprised of Hub for Integration, Reentry & Employment, LPA Design Studios, Swinerton Builders, and Kidder Mathews. Any lease or management/operator agreement with the Operator and/or Hub for Integration, Reentry & Employment, as appropriate, will also be presented for Board approval at a future date.

The PDA includes subcontractors and due to the nature of the services, could require additional subcontractors. In order to add subcontractors to the PDA, Developer must seek express written consent from County. Should the addition of a subcontractor impact the scope of work and/or contract amount, the item will be brought back to the Board for approval. See attached Contract Summary Form.

Contract Authorization and Ordinance

The solicitation process and the applicable agreements are authorized by Government Code Sections 25515, et seq., which finds that provisions for residential, commercial, industrial, and cultural development of public property owned by counties constitutes a valid public purpose. Government Code Section 25515.1 permits counties to sell or lease to, or enter into a joint venture with, a private entity any of its real property for these purposes. It also permits counties to participate as a principal party in the development of these uses under certain circumstances or to contract for management, operation, or leasing of its real property for these same purposes. Pursuant to Government Code Section 25515.2(a), any lease, development, or contract agreement entered into pursuant to Government Code Sections 25515, et seq., shall be authorized by an ordinance adopted by the Board. Additionally, Government Code Section 25515.2(b) requires the Board to hold a public hearing prior to adopting such an ordinance. The attached Ordinance makes certain findings pursuant to Government Code Sections 25515, et seq., and authorizes contracts facilitating development and operation of the WRC.

Compliance with CEQA: This action is not a project within the meaning of CEQA Guidelines Section 15378 and therefore not subject to CEQA, since it does not have the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The approval of this agenda item does not commit the County to a definite course of action in regard to a project since it includes adoption of an ordinance and approval of a Pre-Development Agreement to provide preconstruction and design services for a Workforce Reentry Center. This proposed activity is therefore not subject to CEQA. Any future action connected to this approval that constitutes a project will be reviewed for compliance with CEQA. During the design of the Project, a separate CEQA review will be completed.

General Plan: The WRC is consistent with the General Plan of City of Orange, pursuant to Government Code Section 65402(b).

FINANCIAL IMPACT:

Phase 1 costs shall not exceed $5,378,794 and will be paid as costs are incurred during the term of the PDA, which term shall not exceed 18 months, unless mutually extended by Developer and County via amendment. Appropriations for Phase 1 will be included in Countywide Capital Projects Non-General Fund 15D FY 2024-25 Budget, offset by equivalent transfers in from OC CARES, Fund 12M, and will be included in the budgeting process for future years, as applicable.

The PDA contains a provision that the County may at any time, and without cause, terminate the PDA in whole or in part, upon not less than 30 calendar days’ written notice to Developer, without penalty.

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Ordinance
Attachment B - Conceptual Site Plan
Attachment C - Pre-Development Agreement
Attachment D - Government Code Sections 25515, et seq.
Attachment E – Contract Summary Form