Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
FEBRUARY 16, 2017
Subject/Action
SUBJECT: EXTENSION OF REVENUE LEASE AGREEMENT AND TEMPORARY REDUCTION OF MONTHLY RENT
ACTION: AUTHORIZE TEN-YEAR LEASE EXTENSION AND REDUCTION OF MONTHLY RENT BY $1,800 FOR 24 MONTHS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute a lease amendment with Camille's Inc. (Camille's or tenant), dba Denny's Restaurant, to extend the term of the lease for ten years, terminating January 31, 2034, and to reduce the monthly rental amount from $18,000 to $16,200 effective March 1, 2017 for a two-year period.
Issue
ISSUE
Camille's has operated the Denny's Restaurant for approximately forty-five years on a property currently owned by Los Angeles County Metropolitan Transportation Authority (Metro). The existing lease will expire on January 31, 2019. The tenant has an option that would extend the term until January 31, 2024. The long-term lease is in keeping with the Metro's goal of generating revenue from its real property assets.
Authorization to extend the lease term for ten years and to reduce the monthly rental amount temporarily to $16,200 requires Board approval.
Discussion
DISCUSSION
The property is located at 530 Ramirez Street (Property), diagonally across the street from the Gateway Building. Metro terminated the use of approximately 25,143 square feet of the parking area from the leasehold for use by Metro as a laydown yard for the Patsaouras Plaza Busway Station (PPBS) project. The PPBS project will require the continued use of this area for construction staging until approximately November 2018.
The loss of this parking has resulted in a reduction in the tenant's potential revenue and they have requested a ten percent or $1,800 monthly reduction in rent for the two-year period. Metro staff has reviewed this request and determined that a temporary rent reduction is warranted. Staff is also working with the City of Los Angeles to assis...
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