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Item 4LCITY OF SOUTHLAKE MEMORANDUM August 5, 2013 To: Shana K. Yelverton, City Manager From: Shannon Hamons, Director of Economic Development and Tourism Subject: Item 4L: Approve an addendum to the MXD Retail Saturation Study agreement for Phase II - Target Market Analysis Action Requested: Approve Item 4L. Background Information: As part of the FY 2014 budget the City Council approved funds to retain consulting services for a Retail Saturation Study, a Target Market Analysis and Hotel Market Study. To date, staff has engaged MXD Development Strategists (MXD) to complete the planned retail study. This item proposes continuing work with MXD to expand on their work by completing the target industry analysis. Staff also proposes that since two hotel plans have been approved by City Council since the budget approval, the funds allocated for the hotel market study be directed to engage MXD to conduct research and provide recommendations on the City's tourism industry. As you are aware, the Retail Saturation Study has been initiated and has identified several market cluster segments that appear to be well suited for increased public and private investment. These clusters include: a. Medical b. Culinary C. Performing Arts/Entertainment/Cultural As an extension of the original Retail Saturation Study, and to investigate market deviations that may have occurred since the completion of the February 2011 Economic Development & Tourism Strategy (component of the 2030 plan), it is recommended that an addendum to the agreement with MXD be approved to complete a Target Market Analysis. The intended outcome of Target Market Analysis is to increase private investment/development, tourism, resident benefits and City revenues. Honorable Mayor and City Council Addendum to existing MXD Development Strategists Contract Page 2 of 3 More specifically the plan will accomplish the following: i. Identify Southlake's competitive position related to the medical, culinary and performing arts / entertainment / cultural market clusters — more specifically in the areas of health & wellness, bio-life sciences, R&D, pharmaceutical, leading -edge and specialty foods, culinary education, visual and performing arts and creative / innovation hubs ii. Reveal which of the above market segments appear most supportable for the long-term and which should be a focus of business attraction and tourism efforts. iii. Provide recommendations for a reasonable strategy for attracting the most favorable, specific target market developers and users to create a sustainable commercial base. iv. Provide recommendations for opportunities to boost tourism and spending in the Southlake market with focus on clusters within the study. V. Provide recommendations for effective investment of the hotel occupancy tax (HOT). vi. Provide recommendations to refine the City's tourism/marketing message to match the identified cluster segments. vii. Analyze the potential economic impact of increased development and tourism related to the identified cluster segments. viii. Identify relevant new businesses and tourism partners that may be looking to expand to the Southlake sub - market. Once the study is completed, it will be presented to City Council for its consideration. Amendments to the adopted Southlake 2030 Economic Development and Tourism plan are possible based upon the recommendations of this study. MXD Development Strategists Ltd. is a full service commercial development consulting firm based in Vancouver, B.C. Canada and working in 42 countries around the globe on master planning, market analysis, economic development and land development projects. Honorable Mayor and City Council Addendum to existing MXD Development Strategists Contract Page 3of3 Next Steps: If the addendum is approved, staff will execute the contract extension and immediately begin working with the consultant on the development target market research. Financial Considerations: The proposed cost for Phase II is $30,000 which is within previously allocated FY 2014 budgeted funds; $20,000 from Economic Development and $10,000 from HOT. Strategic Link: CBO3 — Develop long-term strategies to address future financial uncertainties and challenges C3 — Provide attractive & unique spaces for enjoyment of personal interests C4 — Attract & keep top -tier businesses to drive a dynamic & sustainable economic environment 133 — Enhance resident quality of life & business vitality through tourism Citizen Input/ Board Review: N/A Legal Review: The City Attorney's Office has reviewed and approved the proposed contract Alternatives: Forgo or delay Phase II analysis which could hinder attraction of appropriate office users and tourism venues Supporting Documents: (1) Contract Staff Recommendation: Approval of addendum to contract with MXD for Target Market Analysis ADDENDUM TO THE MXD CONSULTING AGREEMENT Phase II — Economic Cluster Analysis This Consulting Agreement (the "Agreement") is entered into as an addendum to the March 31, 2014 agreement which outlined the completion of a "Retail Saturation Study". This addendum is for the continuation of that work to focus on specific findings of the original study. This Phase II portion is entered into as of the last date shown below by and between MXD Development Strategists ("Consultant"), and City of Southlake, Texas ("Client"). WHEREAS, the Client desires to retain Consultant for 'Phase II' of the previously completed "Retail Saturation Analysis Study," in which Phase II will encompass an "Economic Cluster Analysis". WHEREAS, the Consultant agrees to provide certain consulting services to the Client to assist with such endeavors. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the sufficiency of which are hereby acknowledged, the parties agree to the following: 1) Consultant agrees to provide the services and deliverables set forth in the Scope of Work attached hereto as Exhibit A. The estimated time frame for completion of the work shall be as tentatively outlined in Exhibit B. 2) Client agrees to pay a sum not to exceed USD $30,000 for the services as noted above to include travel and out-of-pocket expenses. Payments shall be by phase as noted in Exhibit B. The Consultant is available to provide additional services beyond those outlined in the scope for additional fees to be negotiated separately. 3) Payment: All invoices shall be paid and are due within thirty (30) calendar days of the date of invoice issuance. Overdue accounts will be charged interest by MXD Development Strategists Ltd. at a rate of 2% on all outstanding balances. Final reports and deliverables prepared by MXD Development Strategists Ltd. shall not be provided until all outstanding accounts are settled. 4) Either party may terminate this Agreement if: a. the non -terminating party shall be in default under any term, provision or condition of this Agreement and fails to cure such default within ten (10) calendar days of receipt of written notice sufficiently describing the default; or b. the parties become aware of a competing or conflicting interest and Client determines that the existence of such competing or conflicting interest makes it undesirable to continue the relationship; or c. either party shall file or have filed against it any proceeding under any bankruptcy, insolvency or other law affecting the enforceability of creditors' rights. Upon termination, Consultant shall immediately end Consultant's efforts, and Client shall be responsible for only that portion of the fee earned to the date of termination, based upon the work accomplished and presented to Client. 5) Client acknowledges that Consultant participates in, advises, and/or manages entities which may compete and conflict with the Client's economic and retail development interests. Notwithstanding such competing interests and potential conflicts, the Client acknowledges and agrees that such competition and conflicts are inherent and unavoidable, that the benefits which the Client receives by obtaining the services from Consultant outweigh the potential for such conflicts and that Consultant may continue to participate, advise, and/or manage such competing interests, provided, however, that if Client becomes aware of a competing or conflicting interest which Client believes materially and adversely affects Consultant's services to Client, Client may terminate this Agreement as provided below. 6) Consultant is an independent contractor and will be solely responsible for any claims of its employees or subcontractors for their actions. In the event litigation becomes necessary with respect to a breach or alleged breach of any of the agreements contained herein, the party in whose favor final judgment shall be entered shall be entitled to recover from the other party all costs and expenses of suit, including reasonable attorneys' fees. 7) Stopping of Work by Consultant: When any invoice is outstanding and unpaid thirty (30) days after the date of billing, the Consultant may, at its discretion, stop work on the project. In addition, when any invoice is outstanding and unpaid ninety (90) days after the date of billing, the Consultant may withdraw from any governmental agency review process any applications, drawings, submittals or other project documents reflecting the Consultant's services. No notice of the Consultant's intent to stop work or to withdraw from any governmental review process shall be required. The Client forever releases, discharges and holds the Consultant harmless from any and all liability arising out of the Consultant's withdrawal of any applications, drawings, submittals or other project documents for reasons of nonpayment. 8) Restarting of Work by Consultant: If the services are suspended or abandoned, in whole or in part, for a period of ninety (90) days or more, or upon instruction by the Client to the Consultant to suspend activity on the project by written notice of thirty (30) calendar days by the Client to the Consultant, the Consultant shall be compensated for all services performed together with all reimbursable expenses due and the Agreement shall be deemed terminated. If the services are resumed after such suspension, the Agreement between the Client and the Consultant shall be renegotiated prior to resumption of services by the Consultant. Such renegotiation shall include a fee for remobilization costs incurred by the Consultant. In the event that this Agreement is terminated due to the suspension or abandonment of the services, the Client shall make full payment to the Consultant for all compensation due hereunder upon receipt of a final invoice from the Consultant. For purposes of this Agreement, the term "suspension" or "abandonment" shall mean substantial discontinuance of labor, services, and expenses for a ninety (90) day period or written instruction by the Client to suspend substantially the services. 9) Intellectual Property Rights: Reports, plans, diagrams, drawings and specifications, including those in electronic form, prepared by the Consultant are the Instruments of Service for use solely with respect to the services and deliverables of this Agreement. The Consultant shall be deemed the author and owner of their Instruments of Service and shall retain all common law, statutory, and other rights, including copyrights, but the Consultant grants the Client a non- exclusive license to reproduce the Consultant's Instruments of Service, provided that the Client shall comply with all obligations, including prompt payment of all sums when due, under this Agreement. The Client shall be permitted to retain copies of reports, plans, diagrams, drawings and specifications, for information and reference in connection with the Client's use and development and/or occupancy of the plan area, and such use shall be an authorized use. Any authorized or unauthorized use of the Instruments of Service without the Consultant's consent shall be at the Client's sole risk and without liability to the Consultant. The Client shall indemnify and hold harmless the Consultant and its Sub -Consultants from and against claims, damages, losses and expenses, including, but not limited to payment of attorney's fees, arising out of unauthorized use of the Instruments of Service that are part of the services and deliverables of this Agreement. The Consultant shall not be responsible or liable for any direct, actual or consequential damages which occur as the result of its inability to produce the Instruments of Service by reason of the casualty, destruction or loss of documents that occurs through no fault of the Consultant. 10) Force Majeure: Neither the Consultant nor the Client shall be responsible for any loss, damages, delay, or failure in performing hereunder arising or resulting from circumstances or occurrences outside such Party's reasonable control including act of war or terrorism; strike or lockout or stoppage or restraint of labor from whatever cause; riot; act of civil or military authority; actions by Government and their respective officers, agents, invitees, and employees as they relate to on -site construction, or investigation and remediation of environmental conditions on the Project Site by the Government; fire; or other natural disaster. 11) If any term or provision of this Agreement shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each provision of this Agreement shall remain valid and enforceable to the fullest extent permitted by law. 12) All notices and/or payments required by this Agreement must be in writing and sent by fax, e- mailed, hand delivery, overnight mail service or certified mail, return receipt requested, to the addresses set forth below or such other address as either party may designate in writing as the address for such notices. 13) Each party represents to the other party that it has (a) fully read and understood the terms of this Agreement, (b) had the opportunity to seek the assistance of its own legal advisor regarding this Agreement and its terms, (c) full legal authority to enter into this Agreement and has taken all necessary legal steps to obtain such authority, (d) equally participated in the negotiation and drafting of this Agreement, and (e) not relied upon any statement, representation or warranty not contained in this Agreement and/or the exhibits attached hereto. 14) This Agreement, including the attached exhibits listed herein, constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified, amended or rescinded except by a written agreement signed by both parties. No oral agreements, representations or warranties have been made and/or relied upon. 15) Applicable Law and Venue. This agreement shall be interpreted in accordance with the laws of the State of Texas and the venue of any legal action relating to this Agreement shall lie in state district court in Tarrant County, Texas. Remainder of this page blank "CONSULTANT": MXD Development Strategists Signed: Name: Title: Dated: .2014 ADDRESS FOR NOTICE AND PAYMENT: MXD Development Strategists Ltd. Suite 200 —11120 Horseshoe Way Richmond, BC, Canada V7A 5H7 "CLIENT": CITY OF SOUTHLAKE Signed: Name: Title: Dated: .2014 ADDRESS FOR NOTICE: 1400 Main Street, Suite 310 Southlake, Texas 76092 PHASE II - EXHIBIT A Task A: Review & Synthesis Understanding that many of the below items have already been completed within the scope of the Retail Market Analysis, the objective of this task will be to highlight pertinent information from the previous study relative to chosen target clusters and to expanded research and verify the short and long-term potential of clusters under investigation. Project Understanding & Policy Analysis Participate in a Kickoff Workshop through an online web meeting such as Go -To Meeting with the Project Team to discuss the project vision and timeline, to gather all related background information, and to understand the City's characteristics and potential issues around certain economic clusters. Interact with City Staff, with focus towards the Economic Development Director and Planning Director to understand the overall visions of the City when it comes to its ability to attract users for the stated target clusters. Review the economic dynamics, population growth, employment change, patterns of community development as well as major economic initiatives in City and the region. As necessary, interview and reference local real estate professionals and government sources to gather additional market intelligence. Review, document, and analyze pertinent Municipal Policy and Plan Areas, adopted planning documents, and growth strategies such as the Southlake 2030 Plan to gauge compatibility with stated market clusters. Review previous studies and research that has been completed by / for the City of Southlake relative to performance arts, cultural facilities, and other tourism based activities. Economic Overview Document National, State and Regional economic factors as forecast over the next decade to identify trends and opportunities relative to market clusters. Identify major economic initiatives in the City as well as the Region's primary economic drivers, companies/employers and institutions related to market clusters. Document major transportation infrastructure in the City and any future projects in the pipeline that could impact the focus on market clusters. Refine a baseline of current employment lands in the City including the quantity, attributes, major sectors and general employment types using data from the City of Southlake and information gathered from field work that could support the stated market clusters. Tourism Overview Create a Southlake tourism profile that will include: A visitor profile to the City of Southlake (spending, number of visitors, origin, visitor nights, major attractions, visitor spending patterns, etc.) as data is provided / available. Identify tourism opportunities at a macro level taking into account the economic clusters identified and quality of life issues present in Southlake and the DFW Metroplex. Task B: Economic Cluster Analysis The objective of this task will be to document existing/emerging Economic Clusters that are already in the DFW Metroplex, and are positively trending nationally, and then to focus in on the three (3) Economic Clusters identified by the City of Southlake for study, and thus could be incorporated into the land uses planned for development to diversify the economy and cultural offerings in the City. This will be achieved by analytically documenting the strengths and weaknesses of the surrounding area, analyzing industry trends for sectors and companies that are growing, matching surrounding area strengths to the compatible growth industries, and then to develop a plan and strategy that could be used to be aimed at specific targeted companies or organizations (where necessary). Macro -Economic Cluster Identification Document the Economic Clusters and related trends already present and emerging nationally, in the DFW Region, or targeted by the various Economic Development organizations in municipalities surrounding the City of Southlake. Document the distribution of Economic Clusters of activity in the Region, and relate this to a summary table and map of relevant information and data for each major cluster. From the Macro level study, identify which economic clusters the City of Southlake could pursue, short and long term, aside from the three already identified clusters within the study. Target Cluster Analysis Introduce and highlight the three (3) target clusters under analysis and justify why they were chosen for study. Medical -> Culinary + Performance Art / Entertainment As part of the ongoing Stakeholder Engagement process from the previous study, conduct additional stakeholder interviews with businesses or organizations in the City of Southlake that relate to the three target clusters (ex. Children's Medical Center), to understand how these Economic Clusters are emerging in the DFW Metroplex and opportunities for future growth. For each Targeted Cluster, MXD will: Provide a minimum of 2 national or regional case studies to display innovative and successful implementation within a similar setting (comparable population, density patterns, etc). Document the supply and distribution of businesses / organizations of the economic cluster within the DFW Metroplex to understand the current spatial allocation within the region and areas that are potentially underserved. Prepare high-level narrative description of the state of the cluster in the DFW Metroplex Region and national trends. Prepare high-level narrative description of the cluster and its major constituent parts and typologies. Document the supply and distribution of the major businesses / organizations of the economic cluster within the City of Southlake. Prepare a SWOT analysis for the cluster. Identify voids in the regional market for the economic cluster. 4 Document the general amount of employees working within the cluster (as information is available). Determine the feasibility of the cluster within the City of Southlake from a market and/or economic perspective. Further explore appropriate locations within the City of Southlake where the applicable cluster could locate based on complimentary land uses and access to transportation. Existing zoning would be considered. Further explore the economic clusters typical Building, Complementary Land Uses, and Land Development characteristics. Employ the use of illustrative imagery to display typical architectural features, standards and development parameters. Identify relevant businesses (new & existing) that may be looking to expand/access to the DFW Metroplex market. Identify potential development partnership frameworks that the City of Southlake could employ (as necessary). Prepare recommendations for the economic cluster, prioritization schedule, and general implementation techniques. Analyze tourism impact of the economic clusters identified (as necessary depending on cluster) Prepare recommendations on opportunities that can be used to boost tourism visitors and spending in the Southlake market, with focus towards the economic clusters under study. Deliverables and meetings Participation in a GO -TO MEETING ONLINE KICKOFF WORKSHOP with City Staff. Participation in an INTERIM GO -TO MEETING ONLINE WORKSHOP with City Staff to present Task A & B Findings "Interim Research and Findings Summary". Participation in FINAL PRESENTATION WORKSHOP with the City of Southlake, in Southlake, to present Final Report findings, implications, and recommendations. FINAL REPORT Document with Executive Summary. The final report will provide recommendations for the economic cluster, prioritization schedule, and general implementation techniques. The report will also outline strategies that can be used to boost tourism visitors and spending in the Southlake market, with focus towards the economic clusters under study. Facilitate Final Presentation to City Staff and Council (as necessary), as well as any invited stakeholders. Submit Final Report to the Client with any supporting documents. MXD Development Strategists team members can be contacted throughout the assignment to provide consultation via telephone conference calls and/or online meetings. PHASE II - EXHIBIT B BENCHMARKS The general timeline of tasks and benchmarks are noted in the below Gantt Chart. The proposed chart can be changed as mutually agreed upon by MXD and the Client (The City of Southlake) either prior to work commencement or during the project stages: WEEK 1 2 3 4 S 6 7 8 9 10 Project Initiation - Go -To Kickoff Meeting TASK A - REVIEW & SYNTHESIS TASK B - ECONOMIC CLUSTER ANALYSIS INPUT FROM STAKEHOLDERS Interim Workshop- Go -To Meeting #1 REVISIONS & ADDITIONS TO FINAL PRESENTATION Final Presentation Workshop & Meetin& • REVISIONS TO FINAL REPORT Submittal of Final Document to the City of Southlake TIMING & PROJECT FEET Given our familiarity with the City of Southlake and the DFW Metroplex from already completing work for the City, as well as our interest in working again with the City of Southlake on this assignment, MXD would undertake the described MXD Tasks A, B, C & D work program for a Professional Fee budget of USD $30,000 (including taxes, disbursements and expenses). The proposed budget and scheduling is summarized as follows: A Review & Synthesis 2 Weeks $4,000 B Economic Cluster Analysis 6 Weeks $21,000 - Review by City Staff / Revisions by MXD / Final Report 2 Weeks $5,000 MXD has allocated one trip to the DFW Metroplex into the budget. The trip would be for the Final Presentation to Staff and Council. We would be happy to discuss refinements to our scope and fee to meet your budgetary requirements. In addition to the proposed in -person meeting, MXD Development Strategists would be available throughout the project via telephone conferencing and/or online meeting technology (such as GoToMeeting) to provide ongoing input on retail -related design options. Should this scope and fee be acceptable for the assignment, please indicate the approval to proceed on behalf of the City of Southlake by providing the signature of the signing authority representative for the City of Southlake in the space provided on the following page of this agreement, then please send one signed copy to us digitally and in hard copy. Should our Team be selected for this assignment and you accept our proposal, you also accept the Terms and Conditions that had been agreed upon between MXD and the City of Southlake for the previous Retail Market Analysis Study. These terms and conditions have been added as an Exhibit to this proposal.