Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
NOVEMBER 18, 2020
Subject
SUBJECT: LEASE AGREEMENT FOR METRO OPERATOR LAYOVER OFFICE, 8305 HINDRY AVENUE, LOS ANGELES
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute a three (3)-year lease agreement with two (2) one-year options commencing December 1, 2020 with Priceless Westchester Investment, LLC (“Lessor”), for the LA Metro rail operator layover space located at 8305 Hindry Avenue in Los Angeles at a rate of $4,810.00 per month with escalations of three percent (3%) annually and approximately $500,000 in tenant improvements for a total of $906,627.39 over the initial term and options, if needed (see Attachment B - Deal Points).
Issue
ISSUE
Metro is in need of a rail operator layover site for light rail transit operators along the Crenshaw/LAX (CLAX) line in close proximity to the Westchester/Veterans Station in Los Angeles to be complete and fully operational by summer 2021.
Background
BACKGROUND
The location and scope of the Airport Metro Connector (AMC) construction project will require the temporary relocation of a current Metro rail operator layover space due to the AMC project requiring closure of rail operations within the project area. Originally located at the Southwest Maintenance Yard (SWY), the rail operator layover space - vital in providing necessary rest and transfer points for rail operators - will be moved to a new leased space consisting of 1,850 square feet to include bathrooms, breakroom and office space located within walking distance to the next northern CLAX station (Veterans/Westchester Station) until the AMC Station project is complete and ready to operate (see Attachment A - Lease Location and Plan Draft). Once rail operations are started in this area, the new operator layover space will be transferred back permanently to previous location at the SWY thus terminating the new lease location.
Discussion
DISCUSSION
Findings
The proposed location at 8305 Hindry Ave has been identified as the optimal location due to its close proximity to the Westchester/Veterans Station. Of the available sites, this location is the closest walking distance from the station, providing more safety and efficiency for Rail Operators. Metro Real Estate staff conducted a rental survey (Attachment C) and found the pricing is consistent with other surrounding properties, after taking into account the smaller size and better location.
Considerations
Without a Metro rail operator layover space near the Westchester/Veterans Station, Metro will not be able to meet the needs of the light rail operators required breaks and make the maximum use of their time to be rested and alert during their shift.
Equity Platform
This project addresses Metro’s equity platform by improving access to Metro transportation services in underserved communities and stations.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
This board action will not have an impact on safety standards for Metro.
Financial_Impact
FINANCIAL IMPACT
Approval of the lease with Priceless Westchester Investment, LLC is estimated to be a total of $906,627.39 over the term including tenant improvements, and any term extensions if needed. The terms are within market rate for similar space in the area.
Impact to Budget
The proposed lease obligations & tenant improvements are currently budgeted in Airport Metro Connector FY21 budget.
Cost Center: 8510 Project: 860303
For Tenant Improvement: Account 53101 Task 3.3.02.04
For Lease: Account 51201 Task 3.4.02
Future lease obligations will be included in annual budget preparation.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
Recommendation supports strategic plan goal # 2, to provide “outstanding trip experiences for all.”
Alternatives_Considered
ALTERNATIVES CONSIDERED
The alternative is to not select the proposed site and lease another site at an alternative location which would be less convenient and potentially add longer layover times for the CLAX Line operations.
Next_Steps
NEXT STEPS
Complete negotiations of favorable lease terms with the landlord subject to review and approval by County Counsel. Upon Board authorization, Real Estate staff will finalize the lease agreement with Priceless Investment, LLC, forward to County Counsel for approval review, and submit for execution by the CEO for the initial three-year lease period and, if needed, additional lease options.
Tenant improvement construction is planned to begin approximately January 4, 2021, with occupancy expected summer 2021.
Attachments
ATTACHMENTS
Attachment A - Lease Location & Plan Draft
Attachment B - Deal Points
Attachment C - Rental Survey
Prepared_by
Prepared by: Paul Whang, Senior Director, Engineering, Program Management (213) 922-4705
John Beck, Principal Real Estate Officer, Countywide Planning & Development, (213) 922-4435
John Potts, Executive Officer, Countywide Planning & Development, (213) 928-3397
Holly Rockwell, SEO - Real Estate, Transit Oriented Communities and Transportation Demand Management, (213) 922-5585
Reviewed_By
Reviewed by: James de la Loza, Chief Planning Officer, (213) 922-2920
