SR-900-002 (5)
RMD:EDD:GK:F:\RESOURCE\SHARE\GRETCHSHARE\STAFFREPORTS\MAINSTREETLEASE.DOC
Council Meeting: November 13, 2001 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Agreement with Maury Herman and Catherine Popesco to lease office space
at 1918 Main Street for the Citys Civil Engineering Division
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INTRODUCTION
This report recommends that the City Council authorize the City Manager to negotiate and
execute an agreement with Maury Herman as Trustee of The Maury Herman Family Trust
#1 dated September 17, 1985, as amended, and Catherine Popesco to lease office space
at 1918 Main Street for the Citys Civil Engineering Division.
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DISCUSSION
The Civil Engineering Division?s staff currently operate in three locations: leased space at
1918 Main Street and 525 Broadway, and space at City Hall. To accommodate additional
staff of Planning and Community Development, retain the newly implemented one-stop
planning service counter and consolidate engineering staff, a search for appropriate space
to relocate Engineering staff was undertaken. The desired features included office space
which could be configured to accommodate office space for 24 employees, a plan reading
room, public meeting area, conference room, storage area, and reasonable proximity to
City Hall. Staff visited sites in close proximity to City Hall and identified an 8,400 square
foot office space at 1918 Main Street as the most desirable location. Discussions with the
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property owner ensued and resulted in agreement on tentative terms and conditions. City
staff has proposed, subject to Council approval, that the term be five years with an option
to extend the lease for an additional five years, and that the City will waive it?s one-time
right to early cancellation of the existing lease for a portion of the second floor at 1918
Main Street.
The initial rent will be $2.55 per square foot (including one full floor of parking,
approximately 22 spaces, at no additional charge) with an annual escalator of six percent.
The escalator will be in lieu of a CPI adjustment as well as any increases in operating
expenses and real estate taxes. The landlord will provide a tenant improvement allowance
so that the space can be modified to meet the specific needs of the Civil Engineering
Division. Upon vacating the space at 525 Broadway, those offices will be available for
sub-lease.
BUDGET/FINANCIAL IMPACT
Funds for this lease are in the current fiscal year budget at account number 01402.522620.
The annual cost in the first year to rent this space will not exceed $149,940, the entire
sum of which will be drawn from the current fiscal year budget, assuming a December 1,
2001 commencement date. Incorporating annual adjustments, the total cost of the lease
over five years would be $1,448,958. In future fiscal years, funds for the lease payment
will be budgeted at the same account number.
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RECOMMENDATION
It is recommended that the City Council authorize the City Manager to negotiate and
execute an agreement with Maury Herman as Trustee of The Maury Herman Family Trust
#1 dated September 17, 1985, as amended, and Catherine Popesco to lease office space
at 1918 Main Street for the Citys Civil Engineering Division.
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Prepared By: Jeff Mathieu, Director of Resource Management
Craig Perkins, Director of EPWM
Mark Richter, Economic Development Manager
Anthony Antich, City Engineer
Ruth Firestone, Engineering Support Supervisor
Gretchen Kubacky, Senior Real Estate Analyst
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