Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
JANUARY 16, 2019
Subject
SUBJECT: LICENSE AGREEMENT WITH SOUTHERN CALIFORNIA EDISON FOR THE BLUE LINE STORAGE YARD
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer (CEO) to execute a five (5)-year license agreement commencing November 1, 2018 with Southern California Edison ("Licensor") for the Blue Line Storage Yard located next to Division 11 in Long Beach at a rate of $117,848.33 annually with escalations of three percent (3%) annually for a total license value of $625,673 over the term.
Issue
ISSUE
Metro Operations has a continued need for the storage yard next to Division 11 for ongoing Blue Line operations needs. Approving this license will secure the space for an additional five-year term (Nov. 1, 2018 - Oct. 31, 2023). The Licensor will only issue licenses for five-year periods.
Background
BACKGROUND
The current five-year license expired on October 31, 2018. The current rental rate is a fair estimation of market value based on a recent Metro staff appraisal from early 2018. No alternate location has been found which can offer a similar affordability and proximity to Division 11 that provides a best fit approach to both operational need and dollar cost to satisfy storage requirements.
Although Real Estate was ready to present the agreement for Board approval at the September 27, 2018 meeting, SCE's counsel was delayed in providing final terms and conditions nor was SCE willing to accept more than a five-year agreement. This impacted the department's timeline for Metro Board approval. However, the current agreement remains in holdover and operates as a month-to-month arrangement while the successor agreement is fully negotiated and approved by all parties.
Discussion
DISCUSSION
Findings
Metro has maintained storage at this location dating to the 1990s, so Real Estate finds little agency exposure in continuing the license with the...
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