Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
OCTOBER 20, 2021
Subject
SUBJECT: FIRST LEASE AMENDMENT AGREEMENT WITH THE STATE OF CALIFORNIA
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer (CEO), or their designee, to execute a five (5) year First Lease Amendment commencing October 1, 2021 with the State of California, (“Lessor”) for the Division 2 Employee Parking Lot (“Location 403”) located at 17th Street and Griffith Avenue in Los Angeles at a rate of $13,447.00 per month with annual increases of three percent (3%) for a total of $858,192.00 over the five (5) year term.
Issue
ISSUE
Metro leases Location 403, a parking lot for Division 2 employee parking, which expired on September 30, 2021. It is necessary to renew this lease for the continued use by employees or there will be not be a permanent parking option, which will limit the ability of Metro employees to park near their assigned work location.
Background
BACKGROUND
Metro has leased Location 403 from the State of California since 1999. The current five (5) year lease commenced on October 1, 2016 and expired on September 30, 2021 at a monthly rental rate of $13,055. This site is located under the Santa Monica Freeway at the intersection of 17th Street and Griffith Avenue and consists of approximately 72,825 square feet (200 parking spaces) of secure parking for Metro employees.
Discussion
DISCUSSION
Findings
The lease expired on September 30, 2021 and is currently in a month-to-month holdover. The State of California cannot sell this property because it is airspace under the freeway. This First Lease Amendment will extend the lease so employees will continue to have a place to park their vehicles. After reviewing seven comparable properties provided by Metro Transportation Demand Management Programs, it was determined that the new rental rate for the subject lease is reasonable.
Considerations
The parking lot is located next to Division 2 and provides the most convenient and safe option for employee parking at a highly economical rate.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
This Board Action will not have an impact on safety standards for Metro operations.
Financial_Impact
FINANCIAL IMPACT
The proposed rent for FY22 is $121,023 ($13,447 monthly), which is currently budgeted in 0651.306006.01.001.51201 Rent Property/Facilities. Future lease obligations will be included in annual budget preparation by Real Estate staff.
Impact to Budget
The funding for the proposed lease will come from Federal, State and Local sources that are eligible for Operating projects.
Equity_Platform
EQUITY PLATFORM
This lease amendment will not have any direct equity impacts. This agreement will continue to provide parking for Metro employees at Division 2.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
This recommendation supports strategic plan goals
2: Deliver outstanding trip experiences for all users of the transportation system.
5: Provide responsive, accountable, and trustworthy governance with the Metro organization.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The alternative is for the Board to not approve the First Lease Amendment. This alternative is not recommended because Location 403 provides employee parking for staff at Division 2. The location is paved and fenced. In addition, there are no available properties in the area that could replace this location without implementing a shuttle service to and from an alternative location resulting in an increase to operating expenses for a transport shuttle.
Next_Steps
NEXT STEPS
Execute the First Lease Amendment with the State of California subject to County Counsel approval as to form.
Attachments
ATTACHMENTS
Attachment A - Plot Plan for Location 403
Attachment B - Deal Points
Prepared_by
Prepared by: 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
