Metro - File #: 2016-0625

• File #: 2016-0625
• Type: Contract
• Status: Passed
• File created: 8/10/2016
• In control: Executive Management Committee
• On agenda: 9/15/2016
• Final action: 9/22/2016
• Title: AUTHORIZE the Chief Executive Officer to execute the renewal of a five-year (5-year) lease agreement with Caltrans for Location 403 in Los Angeles at a monthly lease rate of eleven thousand six hundred dollars ($11,600) with annual increases of three percent (3%) per year, including one option to extend the term of the lease for an additional five years.
• Sponsors: Executive Management Committee
• Indexes: Budgeting, Contracts, Division 02, Location 403, Metro Divisions, Property Agreement, Systemwide Bus Ops Mgmt & Admin (Project)

Date	Action By	Action	Result
9/22/2016	Board of Directors - Regular Board Meeting
9/15/2016	Executive Management Committee

Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
SEPTEMBER 15, 2016

Subject/Action
SUBJECT: RENEWAL OF LEASE AGREEMENT WITH CALTRANS AT LOCATION 403

ACTION: AUTHORIZE THE CEO TO EXECUTE THE RENEWAL OF A FIVE-YEAR LEASE AGREEMENT

Heading
RECOMMENDATION

Title
AUTHORIZE the Chief Executive Officer to execute the renewal of a five-year (5-year) lease agreement with Caltrans for Location 403 in Los Angeles at a monthly lease rate of eleven thousand six hundred dollars ($11,600) with annual increases of three percent (3%) per year, including one option to extend the term of the lease for an additional five years.

Issue
ISSUE

Metro staff has negotiated the renewal of the lease agreement with Caltrans to provide for the continued use of Location 403 for employee parking.
Approval of the lease agreement requires board approval.

Discussion
DISCUSSION

Metro has leased Location 403 from Caltrans since 1999 for employee parking for Division 2. This site is located under the Santa Monica Freeway at the southeast intersection of 16th Street and Griffith Avenue. This site consists of approximately 72,825 square feet and provides parking for approximately 200 employees.
The current lease expired on September 30, 2015 and has continued on month to month holdover. The current monthly rent is $9,949.
Negotiations for a new five-year lease commenced in June 2015, however, the negotiations were unusually protracted due to Metro's efforts to negotiate competitive rental rates. Metro staff appraised the site and concluded that the fair market rental rate for this site is approximately $11,600 per month or $0.16 per square foot. Caltrans and Metro staff subsequently agreed to this rental rate. Staff believes that the new rental rate for this location is fair and reasonable.
Staff is developing a facility master plan to assess and optimize the use and service deployment at the Bus Divisions. Division 2 is included in the assessment, and this may impact the use of Locati...