Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
NOVEMBER 15, 2017
Subject
SUBJECT: TRAXX RESTAURANT LEASE AGREEMENT
Action
ACTION: APPROVE 3-YEAR LEASE WITH A 3-YEAR OPTION TO EXTEND
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute a three-year exclusive lease agreement and a three-year extension option with Tara Thomas Enterprises, Inc., a California corporation for the Traxx Restaurant and the Bar located in Union Station.
Issue
ISSUE
The lease area consists of 4,276 square feet on the west side of Union Station including seating area in the waiting room, entry vestibule, and north patio. In addition, the tenant has an office and two storage areas with stair access on the 2nd floor and in the basement totaling 702 square feet (see Attachment A).
Metro and Tara Thomas Enterprises, Inc. (Lessee) have conducted negotiations and desire to enter into a new lease that will replace and supersede all prior agreements and understandings between the parties. The prior lease expired and, per that agreement, the tenancy reverted to a month-to-month lease term. A new agreement and monthly base rent of $9,080.00 has been negotiated with the assistance of County Counsel.
Over the proposed 6-year term (3 years plus one 3-year option dependent on performance per Attachment B term sheet), this lease is anticipated to generate in excess of $1,100,000 in base rent, three percent annual increase, eight percent of gross sales percentage rent, and common area maintenance fees. Board authorization is requested because the expected lease revenue exceeds the CEO's current authority.
Discussion
DISCUSSION
The Traxx Restaurant and Bar is a fine dining amenity for our public transit customers. It has been in operation in Union Station for twenty years and has created a following. Over the years, Traxx has been featured in many articles in restaurant magazines, the Los Angeles Times, and LA Weekly. The tenant also negotiates on a ca...
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