City Council Meeting: July 28, 2009

Agenda Item: 1-K

To:                   Mayor and City Council

From:              Andy Agle, Director of Housing and Economic Development

Subject:          Lease Agreement for the Property Located at 3300 Pico Place North

 

 

Recommended Action

Staff recommends that the City Council authorize the City Manager to negotiate and execute a Lease with Morgan Auto Service for parking on the 1,746 sq. ft. property located at 3300 Pico Place North, for a term ending July 31, 2012, at a rate of $90/space/month, subject to an annual escalation in rent.

 

Executive Summary

The City owns a 1,746 sq .ft. parcel at 3300 Pico Place North that has been leased since 2003. The lease expired on January 15, 2009, and is on a month-to-month holdover.  Staff released a Request for Proposals (RFP) to advertise the availability of the property.  Morgan Auto Service, the existing tenant, was the only respondent to the RFP.  The recommended lease with Morgan Auto Service is for $630 per month (based on seven (7) tandem parking spaces rented at a monthly fee of $90.00 per parking space), with an annual escalation, for a term ending July 31, 2012.

 

 

Background

The 1,746 sq. ft. parcel is located at 3300 Pico Place North (Attachment A).  The City has been leasing this property to Morgan Auto Service since 2003 and its predecessor since 1993.  Morgan Auto Service uses the property for parking for its auto service customers.  There are seven tandem parking spaces on-site.

 

Discussion

Prior to the lease’s expiration, staff in Housing and Economic Development consulted with staff in Planning and Community Development to determine whether the City would be better served by making this property available for private or public parking.

The lot is small, irregularly shaped, and in a remote location adjacent to the Santa Monica Freeway.  The pavement is in need of repair.  Striping the lot to meet standards for public parking would not result in as many parking spaces as could be made available by a private lessee who manages tandem parking spaces.

 

In consideration of these factors, staff determined that this City-owned property, by itself, would have more value to a private user than for public parking.  However, staff does not recommend selling the property at this time because there may be an opportunity in the future to operate this lot in conjunction with an adjacent private parking lot, to create a larger parking area that could serve the business district. Staff plans to explore the feasibility of this concept in the coming years as LUCE recommendations regarding district parking are implemented.

 

On March 19, 2009, staff issued a Request for Proposals and reissued it on May 26, 2009 for an additional three weeks due to a lack of response.  The RFP was advertised on the City’s website and mailed directly to thirty businesses on Pico Boulevard.  The RFP indicated leasing preferences for a Santa Monica based business, with experience in maintaining and operating a parking lot, and who would pay fair market rent.   Morgan Auto Service was the only respondent to the RFP.

 

Morgan Auto has been a City tenant since June 1, 2003 and fulfilled the obligations of its lease. Therefore, staff recommends that Council authorize a new lease with Morgan Auto Service for $630 per month (based on seven (7) tandem parking spaces at a monthly fee of $90.00 per parking space), for a term ending July 31, 2012, and with an annual escalation in the base rent based on CPI, but not less than 2%.

 

Financial Impacts & Budget Actions

 

Anticipated revenues of $7,560 from rent payments were budgeted at account number 01263.400770.

 

 

 

Prepared by:   Donna Rickman, Senior Administrative Analyst

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Andy Agle, Director

Housing and Economic Development

 

P. Lamont Ewell

City Manager

 

 

Attachments: