SR-900-002 (8)
RMD:EDD:GK:F:\RESOURCE\SHARE\STAFFREPORTS\Housing Lease Renewal Expansion52203.doc
Council Meeting: June 10, 2003 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Authorization for the City Manager to Negotiate and Execute a Five-Year
Lease with 2121 Cloverfield Boulevard Associates, LLC for Office Space
for the City?s Housing Authority
INTRODUCTION
This report recommends that the City Council authorize the City Manager to negotiate
and execute a five-year lease with 2121 Cloverfield Boulevard Associates, LLC for
office space for the City?s Housing Authority.
DISCUSSION
The Housing Authority office, which is part of the Resource Management Department, is
currently leasing a 3,031 square foot office at 2121 Cloverfield Boulevard, Suite 130.
This lease term expired March 31, 2003, and the tenancy is in a holdover status. The
Housing Authority requires additional space for its current operations. No space for
these functions exists within the City Hall complex, and, after analyzing current market
conditions and the availability of lease space in Santa Monica, it was determined that,
with the addition of 1,170 square feet in adjoining Suite 131, the Cloverfield space will
continue to satisfy the needs of the Housing Authority.
Discussions with the property owner?s representative have resulted in agreement on
tentative terms and conditions of the renewal. The City has proposed, subject to Council
approval, that the term be five years, effective approximately July 1, 2003, with one five-
year option to extend the lease. There is an early termination option at the three year
1
point, to be exercised at the City?s discretion, with a total cost of $53,315. The rent
upon renewal will be $2.05 per square foot, with an annual escalation keyed to the cost
of living index (CPI). Twelve parking spaces will be provided at a cost of $840.00 per
month. Tenant improvements are estimated to be $30,000.
BUDGET/FINANCIAL IMPACT
In FY03/04, the annual cost to rent this space will be $113,425 (including parking),
assuming a July 1, 2003 commencement date. One-time tenant improvements are
estimated to be $30,000 in FY03/04. Funds of $113,425 for the lease agreement will be
available at 12274.578320, and funds of $30,000 for tenant improvements will be
available at 01264.588090, sub-ledger 00005 in the FY03/04 Adopted Budget.
RECOMMENDATION
It is recommended that the City Council authorize the City Manager to negotiate and
execute a five-year lease with 2121 Cloverfield Boulevard Associates, LLC for office
space for the City?s Housing Authority.
Prepared By: Jeff Mathieu, Director of Resource Management
Bob Moncrief, Housing and Redevelopment Manager
Peter Mezza, Housing Authority Administrator
Gretchen Kubacky, Senior Real Estate Analyst
2