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FED 2 5 1997
RM JM BM pm c \wpwln\offlce\Sec8\s8move Santa Monica, California
Council Meeting February 25, 1997
TO Mayor and City Council
FROM City Staff
SUBJECT Recommendation to Authorize the City Manager to Negotiate and Execute a
Three-Year Lease Agreement with En S Krach and Yona K Kroch for Office
Space for the Housing Authority and a Two-Year Lease Agreement with En S
Kroch and Yona K Kroch for Office Space for the Multi-Family Earthquake
Repair Loan Program(MERL)
INTRODUCTION
ThiS report recommends that the City CouncIl authorize the the City Manager to negotiate and
execute a three-year lease agreement with ErI SKroch and Yona K Kroch In the amount of
$5,610/month for the Housing Authority and a two-year lease agreement with En S Krach and
Yona K Kroch In the amount of $2,750/month for the Multi-Family Earthquake Repair Loan
Program(MERL) The proposed leases stipulate that any Incremental operatmg cost Increase
Incurred by the landlord dunng the term of the lease Will be passed on to the lessee after the
first year of the lease
BACKGROUND
The Housing Authonty has occupied an office In the City owned bUilding located at 612
Colorado Boulevard since 1988 The MERL program has occupied office space at the same
location Since 1994 Both programs have expanded and require more office space than IS
currently available at 612 Colorado Boulevard Staff engaged the services of a professional
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FED 2 5 1997
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commercIal broker, at no cost to the CIty, to analyze current market condItIons and the
avaIlability of lease office space In Santa Monica After considering several other sites, the
bUilding located at 2121 Cloverfield Boulevard was found to be the most accessible and cost
effective office space There IS sufficient office space to accommodate the needs of both
programs, the site IS easily accessible by bus and on-site parking IS available for both staff and
clients The Rent Control Hearings Office IS also located at the site and the three City programs
often work together on speCific Issues
The proposed HOUSing Authority lease IS for a three-year term The two-year term of the
proposed MERL program lease reflects the temporary nature of that program which IS
anticipated to complete Its work and close out by that time Both proposed leases reflect a
monthly base rent of $1 65 per square foot In addition, parking spaces are prOVided at $55 per
month per parking space The annual lease cost for the HOUSing Authority (Including parking)
will be $67,320 The tenant Improvements reqUired to accommodate the HOUSing Authority
exceed the owner's tenant Improvement allowance by $15,000 and are bUilt Into the first year
of that lease as a one-time cost for total costs of $82,320, including parking The annual
lease cost for the MERL program (Including parking) Will be $33,000
BUDGET/FINANCIAL IMPACT
Neither the Housmg Authority or the MERL program are supported by the General Fund
Consequently, there IS no budget Impact on the General Fund Funds to pay the Housmg
Authority's rent for 612 Colorado Boulevard are budgeted at account 12-700-695-00000-7832-
00000 The budget at thiS account must be Increased by $22,362 In order to pay for the one-
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time tenant Improvement cost and the Increased per square foot monthly lease cost through
June 30. 1997 In addItIon, the budget at account 01-620.264-00005-8809-00000 must be
Increased by $20,000 for fixtures, Improvements and to replace furniture that has exceeded Its'
useful life for the Section 8 office and by the follOWing amounts In order to reimburse the
General Fund for this cost $20,000 at account 12-700-695-0000-7725-00000 and ($20.000) at
account No 01-700-695-00000-7725-00000 Funds for the MERL program's rent at 612
Colorado Boulevard are budgeted In Non-Departmental Account No 19-700-695-00000~4483-
00000 No addItional budget authonty IS required for the MERL program
RECOMMENDA liON
It IS recommended that the City Council authonze the the City Manager to negotiate and
execute a three-year lease agreement with En SKroch and Yona K Kroch for the HOUSing
Authonty and a two-year lease agreement with En SKroch and Yona K Kroch for the Multi-
Family Earthquake Repair Loan Program(MERL) [t IS also recommended that the City Council
approve the budget changes set forth above
Prepared by Jeff Mathieu, Director, Resource Management Department
Bob Moncnef, Housmg Manager
Peter Mezza, HOUSing Coordinator
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