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Approval of Program Management Agreement for City Property Renovations Between the City of Santa Ana and Grant General Contractors September 18, 2006 Page 2 DISCUSSION The Santa Ana Auto Mall was originally established by the Community Redevelopment Agency in 1984 to assist with the retention and expansion of local auto dealerships. The mall currently has 12 manufacturers within eight new car dealerships, generating approximately $3.9 million in annual sales tax revenue for the City. In May 2003, the Agency sold $20 million in tax allocation bonds for the expansion and enhancement of the mall. The expansion of the Auto Mall is well underway and includes the opening of the mall to Edinger Avenue along with various upgrades, such as new signage and landscaping, which are expected to benefit all the dealerships. Various improvements in the City's right of way have also been identified for overall enhancement of the mall. Some of these improvements consist of removal of the guard shack, new landscaping in the median island, directional signage, fence replacement and/or re- painting, and landscape and signage improvements to the Ritchey Street entrance. Grant Contractors is currently performing the improvements on the Crevier expansion, which will include (phase II) landscape improvements along Edinger and construction of a new right turn lane on Auto Mall Drive for the City. Due to economy of scale and to ensure coordination of improvements with least impact to the dealers, it is desirable to utilize this same contractor for the interior improvements of the mall under a Program Management Agreement. Grant Contractors is a very experienced and highly regarded general contractor and was the general contractor for Crevier BMW's original facility in the Auto Mall. The Program Manager would provide general administration of the Agreement, manage and supervise the consultants and design professionals, manage the bidding of all components of construction for the project. Grant would also serve as construction manager for this project. The contract will guarantee the cost of the project and Grant Contractors will assume all the risks. The projected cost of the project is a not to exceed amount of $260,000, assuming it runs concurrent with Crevier's phase II improvements (expected to commence January - March 2007).