Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
SEPTEMBER 16, 2020
Subject
SUBJECT: LEASE AGREEMENT WITH WETZEL'S PRETZELS FOR KIOSK K-1 AT LOS ANGELES UNION STATION
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer (CEO) to execute a lease agreement with Wetzel's Pretzels ("Wetzel's") for Kiosk K-1 in Union Station West and a vending cart located in the East Portal at a monthly rent of $28,292 with annual increases of three-percent (3%), plus common area maintenance fees, eight-percent (8%) of gross sales above the natural breakpoint, as well as provisions related to COVID-19 for an initial term of five-years and a tenant-initiated five-year extension at fair market value.
Issue
ISSUE
The 2009 tenant lease with Wetzel's for the K-1 kiosk (see Attachment A for location), will expire on November 12, 2020. Union Station Management working with its broker CBRE, Inc. placed the K-1 kiosk on the market for several months. Two offers were submitted with Wetzel's being the more competitive of the two. Board approval is required to enter into the lease as both the total dollar amount and the amount of time exceeds the CEO's authority.
Background
BACKGROUND
As the owner of Union Station, Metro is responsible for approving all dining amenities offered at Union Station brought forward for approval by its third-party property management firm Morlin Asset Management. Many of the tenants presently occupying the Passenger Concourse on the Westside of the station (Starbucks, Ben & Jerry's, and Subway) predate Metro's ownership and were assigned to Metro as tenants upon purchase of the station from Catellus (prior ownership).
All rental rates have been negotiated using underlying values taken from professional appraisals provided by third-party appraisers hired to assess rental rates by location at Union Station.
Discussion
DISCUSSION
Considering the ongoing COVID-19 pandemic, station manageme...
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