Item 21 - Amendment to the Agreement with Bernards Bros, Inc.

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Construction Management at Risk Services for the State Building and Plaza Demolition Project and Property Transfer of Plaza of the Fountains Parcel from County of Orange May 5, 2026 Page 3 Background On May 2, 2023, the City accepted a $9 million grant award from the State of California to support modernization of the Civic Center area. The funding was intended to facilitate acquisition of the State Building located at 28 Civic Center Plaza, assist with demolition of the structure, and modernization of the surrounding area to support future development opportunities. On December 28, 2023, the City completed the purchase of the State Building property at a cost of$3,826,000 using grant funds. The project originally contemplated demolition of the building to prepare the site for redevelopment within the Civic Center area. The grant funds currently have an expenditure deadline of June 30, 2026. The State is processing the City's request to extend the expenditure deadline to March 31, 2028 to allow sufficient time to complete the project. The City's long-term objective remains the demolition of the State Building and preparation of the site to support future development opportunities that will modernize and revitalize the Civic Center area (Exhibit 1). Construction Manager at Risk Agreement On August 20, 2024, following completion of a competitive Request for Proposals process, the City Council approved an agreement with Bernards Bros., Inc. to provide Construction Manager at Risk (CMAR) services for the project in the amount of $850,000. The CMAR delivery method allows the construction manager to serve as a consultant during the design phase and subsequently transition into the role of general contractor during construction. This project delivery approach provides enhanced cost control, schedule certainty, and constructability review during design, while transferring certain project risks to the construction manager. At the conclusion of the design phase, the construction manager provides the City with a Guaranteed Maximum Price (GMP) for construction. If the City accepts the GMP, Council approval is sought to amend the contract to authorize the construction phase. The Scope of work included the preparation of engineering plans to remove portions of the surrounding Plaza of the Fountains (Plaza) to accommodate the demolition of the former State Building. As described in the August 2024 staff report, the scope of work would progress in phases allowing staff to control costs and City Council to approve subsequent work efforts. The initial phase scope included pre-demolition planning services associated with the State Building and the City-owned portion of the Plaza. These services included environmental analysis, preliminary site investigations, coordination with stakeholders, and development of preliminary project documentation leading toward preparation of a