Meeting_Body
FINANCE, BUDGET & AUDIT COMMITTEE
SEPTEMBER 16, 2020
Subject
SUBJECT: LEASE AGREEMENT WITH CILANTRO FRESH MEXICAN GRILL FOR KIOSK K-5 AT LOS ANGELES UNION STATION
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer (CEO) to execute a lease agreement with Cilantro Fresh Mexican Grill for Kiosk K-5 at Los Angeles Union Station at a monthly rent of $5,100 with annual increases based on CPI of no less than three-percent (3%) and no more than five-percent (5%), exclusive of common area maintenance fees, gross sales rent of eight-percent (8%) above the natural breakpoint, as well as provisions related to COVID-19 for an initial term of five years with a tenant-initiated five-year extension at fair market value.
Issue
ISSUE
Union Station Management, working with its broker CBRE, Inc. placed kiosk K-5 (see Attachment A for location) on the market after the existing tenant T&Y Bakery informed management of its intent to vacate the space in October 2019. After several months, multiple offers were received and evaluated by management. Cilantro Fresh Mexican Grill ("Cilantro") was found to provide the best fit for Union Station amid its existing dining options, as well as provide a financial benefit to the station. Cilantro operates six locations throughout the greater Los Angeles Area with a menu consisting of a price point of around six to eight dollars per ticket. 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 west side of the station (Starbucks, Ben & Jerry's, and Subway) predate Metro's ownership ...
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