SR-6-H (69)
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JP:MIHRJsI.mac Santa Monica. CalifornIa
J allUary 10. 1995 JAN 1 0 1995
To: Mayor and City Council
From: City Staff
Subject: Recommendatlon to Authonze City Manager to re-negotIate lease tenns and execute
lease amendments with Western Industnal Investors for parkmg at 3300 Pico Place
North.
Introduction
This report requests the City Council authonze the CIty Manager to re-negotIate lease terms and
execute lease amendments wuh Western Industrial Investors for a surface parking lot located at
3300 PIco Place North and reduce budgeted revenue in the appropriate revenue account by $3,488.
Back~round
The City owns a small (1746 sq.ft.) tnangular lot located one block north of Pica Boulevard.
abuttIng the Santa Monica Freeway and frontmg on PICO Place North, a twenty foot WIde alley.
The parcells accessed vIa Urban Avenue. Use of the parcel is hmited to parkmg no more than
eight (8) autOmobiles due to Its substandard sIze and unbUlldable locatIon. The property was
appraISed in April, 1992 at $45,000.
Discussion
On December 14. 1993, the City Counell authonzed the City Manager to negotlate and execute a
five-year lease WIth Western Industnal Investors for the 3300 PICO Place North parcel. Western
Industnal Investors had been the only acceptable bidder in a public Request for Proposal (RFP)
process initiated by staff. The rental rate was established at $715.00 per month.
Within six (6) months of executing the lease, the tenant requested a lowenng of the monthly rent,
on the basis that it was paymg rental rates far in excess of market rates. Staff declined the request
for a rent reduction. However, in an effort to aVOId a lease dispute or encounter legal enforcemefjgs
JAN 1 0
efforts out of proportion to the small dollar amounts involved in this lease. s~f suggested it may
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be prudent to VOId the tive-year lease and re~lssue a new RFP. A new RFP was Issued in July,
1994. Property owners and commercial tenants wIthm 300 feet of the parcel and all prevIous
bidders were noufied. The mInImUm bId was set at $350 per month, reflectmg current parkrng
lease rates 10 the area. Western Industnal Investors was the only bidder. The bId amount was
$377 per month.
Bud!!etarvlFinancial Imnaet
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The amended five year lease WIth Western Industnal Investors will generate $4,524 per year In
revenue for the City and may be adjusted upward by a consumer pnce index CCPI) factor
throughout the term of the lease. Revenues for 1994-95 WIll decrease to $5,200 from the budgeted
amount of $8,688 due to the decrease in lease rate retroactive to September 1, 1994.
RecommendatiQIl
It is recommended that the City CouncIl authonze the City Manager to re-negonate lease terms and
execute lease amendments with Western Industnal InvestOrs for parking at 3300 PICO Place North,
reflecting a monthly rent of $377, and reduce budgeted revenue in the revenue account #0 1-130-
224-00000-0077-10000. by $3,488.
Prepared by: Jeff Mathieu, Director of Resource Management
Howard Robmson. Real EsHHe Manager
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