TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Scott Agajanian, Deputy City Manager/Economic Development Director
PREPARED BY: Martha Coleman, Management Analyst
SUBJECT:
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Murrieta Innovation Center Tenant Improvements Capital Improvement Project (CIP) 21029
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ABSTRACT
The Murrieta Innovation Center project is nearing completion; however, additional funding is requested to complete the remaining work
RECOMMENDATION
recommendation
Amend the Fiscal Year 2025/26 Capital Improvement Budget for CIP No. 21029 to increase the expenditure budget by $350,000 using General Fund Capital Unassigned Fund Balance; and
Authorize the City Manager to approve: (i) a contract amendment in a form approved by the City Attorney’s office, an amended purchase order and task budget for RWBID/The Cumming Group Construction Management LLC, (ii) a contract amendment in a form approved by the City Attorney’s office, an amended purchase order and task budget for the general contractor, Optima RPM, Inc, and (iii) an amended agreement in a form approved by the City Attorney’s office, purchase order, and task budget for the design team, BAM Creative; and
Authorize the City Manager to execute the contract amendments described above.
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PRIOR ACTION/VOTE
On October 20, 2020, the City Council adopted Resolution No. 20-4321, authorizing submittal of a grant funding application to the U.S. Economic Development Agency for the purpose of constructing a wet lab, dry lab, and additional tenant improvements in the Murrieta Innovation Center; and authorized the Mayor to execute a commitment letter as part of the grant application package (Vote: 5-0).
On February 15, 2022, the City Council adopted Resolution No. 22-4520, authorizing the Mayor to sign a Lien Acknowledgement Letter to the United States Economic Development Administration for the Murrieta Innovation Center (Vote: 5-0).
On May 17, 2022, City Council adopted Resolution No. 22-4568, entitled: A Resolution of the City Council of the City of Murrieta, California, Accepting the U.S. Department of Commerce’s Economic Development Agency’s Grant for $2,429,910 to Support Extensive Real Estate Improvements to the Murrieta Innovation Center; Authorizing City Manager to Execute All Grant Related Documents, and Amending the Capital Improvement Plan Budget to Allocate and Appropriate the Grant Funds (Vote: 5-0).
On February 18, 2025, the City Council approved a construction contract with Optima RPM, Inc., for the Murrieta Innovation Center (MIC) tenant improvement project, for a total not-to-exceed amount of $3,668,059.37. The City Council also approved a $155,000 purchase order for RWBID Construction Management, LLC, to provide construction management services, including labor compliance, for the MIC tenant improvements. Lastly, the City Council also approved an additional contingency of $324,888.84 for unanticipated expenditures, bringing the total construction budget to $4,147,948.21 (Vote: 5-0).
On December 16, 2025, the City Council authorized the reallocation of funding within the current budget for project completion, specifically for construction and construction management; and authorized the City Manager to approve an amended purchase order and task budget for RWBID Construction Management LLC, as well as a change order and a purchase for the general contractor, Optima RPM, Inc. (Vote: 5-0).
STRATEGIC ALIGNMENT
This item aligns with the City Council goal to aggressively pursue economic development relating to priority Tier 1. The project is included in the City of Murrieta Capital Improvement Plan (Fiscal Years 2024/25-2028/29) as the Murrieta Innovation Center Upgrades project.
DISCUSSION
In 2022, the City of Murrieta was awarded grant funding from the U.S. Economic Development Agency (EDA) for the purpose of constructing a wet lab, dry lab, and additional tenant improvements to renovate the Murrieta Innovation Center into a best-in-class life science start-up incubator and a driver of job creation in Southwest Riverside County. The design was completed at the end of 2024, and construction began in March 2025 by Optima RPM, Inc.
The initial construction schedule estimated project completion in October 2025. However, as work progressed, unforeseen site conditions and necessary adjustments to the interior improvements emerged, requiring the use of additional contingency funding to complete the project as planned.
Multiple change orders resulted in the use of a substantial percentage of the current contingency budget. The prior change orders also had an impact on the progress of the project, which has extended the anticipated project completion date to the third quarter of 2026.
The project’s change orders and Errors & Omissions during construction will result in overruns of approximately 22%, or $829,888.84, over the original contract value. As a result, an additional $350,000 in funding is needed to complete the remaining change order work. The anticipated final Contract amount is $4,497,948.21, of which $2,429,910.00 is from the EDA.
PUBLIC NOTICING
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
CEQA AND REGULATORY OVERVIEW
This action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly.
FISCAL IMPACT
Staff recommends amending the Fiscal Year 2025/26 Capital Improvement Budget for CIP No. 21029 to increase the expenditure budget by $350,000 using General Fund Capital (Fund 112) Unassigned Fund Balance.
ATTACHMENTS
None.