Staff recommends City Council adopt a resolution authorizing the City Manager to execute a contract purchase agreement with JM Environmental Inc. in the amount of $2,137,500 for 401 Oak Remediation Services required to complete the demolition project at 401 Oak Street. 

Additionally, staff recommends City Council adopt an ordinance approving a budget adjustment in the amount of $2,214,045 which includes the costs of the known and anticipated asbestos remediation.

Located at 401 Oak Street, at the intersection of Royer Street and S. Grant Street, the project site is 1.39 acres and includes a 19,000 square foot building. The property was sold to the University Development Foundation in 2018 and then purchased back by the City in 2021. However, the existing building, a former City fire station, has remained vacant since the fire station relocated in 2018.

As contemplated in the Downtown Specific Plan, redevelopment of 401 Oak Street has been anticipated since the plan's inception. Several uses are principally permitted, including residential, offices, commercial, retail sales, and personal service. To help incentivize development, the City will prepare the site to provide a clean vacant property to a developer. The total project will include demolition of the building, remediating all contaminants, and raising the property out of the floodplain.

In July of 2021, a contract purchase agreement was established with Double B Demolition.  This demolition was scheduled to begin on December 6, 2021. However, because of additional unforeseen hazardous material remediation requirements, their start date is now unknown.

Around the same time as the contract with Double B Demolition, a contract purchase agreement was also established with WCE Environmental to remediate asbestos per reports from Adam Labs.  After investigation it was discovered that the amount of remediation required for a safe demolition of the building far exceeded the intended scope between WCE and the City.  Adam Labs was requested to take several new samples and concluded that there is a significant amount of asbestos behind walls in the stairwells, mechanical room, and ceiling spaces.  Because of the changed conditions, the project was rebid.   

A formal bid was issued with one comprehensive vendor response:

Bidder                                                                      Total

JM Environmental Inc.                                            $2,137,500

Granite Bay, CA

American Technologies, LLC. (ATI)                       $42.50/sq. ft. remediated

West Sacramento, CA

American Technologies, LLC. (ATI) was deemed non-responsive due to their incomplete proposal. 

The bid requested pricing for the following items: remediation cost per square foot of friable and non-friable asbestos and a not-to-exceed cost for known and anticipated asbestos removal. 

Only JM Environmental Inc. was responsive, and staff is recommending awarding the contract to them.

The existing project budget (500215 - 401 Oak Street Site Work) is $1,214,604.  With the addition of the recommended $2,214,045 budget adjustment, the total project budget will be $3,428,649.  Funding will pay for:

• $5000 - Adam Labs (Asbestos & Mold Testing)
• $1710 - ATI (Mold Containment)
• $950,000 Double B Demolition (Demolition, Contaminated Soil Hauling, Fill Dirt Hauling Not-to Exceed)
• $25,270 - Warren Engineering (Completed Site Survey, Grading Plan)
• $88,000 - ENGEO (Continuous Fill Material & Geotechnical Testing, Environmental Survey, SWPPP Monitoring)
• $19,170 - Williams & Paddon (Completed Plans)
• $9,500 - GW Demo (Fill Dirt Management)
• $204,251 - Staff Labor (6% Total Project Cost), Permitting, SWPPP, Bidding Expenses
• $120,000 - WCE Environmental
• $2,137,500 - JM Environmental (Not-to-Exceed Cost)   

There are adequate available resources in the Strategic Improvement Fund (SIF) to support this budget adjustment. The project is being funded by SIF as the ultimate development of the site will produce tax revenue to support General Fund services. 

The proposed project involves the minor alteration (asbestos remediation) of an existing facility.  This activity is categorically exempt from CEQA as a Class 1 Exemption (State CEQA Guidelines Section 15301).  The Exemption has been prepared and no further CEQA action is required.

Goal D - Enhance economic vitality

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Dominick Casey, City Manager