SR-900-002 (16)~- . .
C~ty Counc~l Report
~ City of
Santa Monica
City Council Meeting: July 25, 2006
Agenda Item: ~
To: Mayor and City Council
From: Martin Kennerly, Acting Director, Resource Management Department
Subject: Authorization to Negotiate and Execute a Lease for Big Blue Bus of 1660
Lincoln Boulevard from 1660 Lincoln Boulevard, LLC
Recommended Action
It is recommended that Council authorize the City Manager to negotiate and execute a
lease of 1660 Lincoln Boulevard from 1660 Lincoln Boulevard, LLC, for use as the Big
Blue Bus parts storage warehouse and ancillary office use, and Print Shop and Mail
Room.
Executive Summary
Since March 2001, the Big Blue Bus has leased a building located at 1660 Lincoln
Boulevard for use as a parts storage warehouse and ancillary office use. The building
also houses the City's Print Shop and Mail Room. The lease expired March 6, 2006,
and has continued on a month-to-month hold-over. Council is asked to authorize the
City Manager to negotiate and execute a lease extension, for five-years ending in 2011,
for a total annual rent of $302,400 per year, subject to an annual cost of living
adjustment. Parts storage and office space at 1660 Lincoln will be required for a
minimum of five years while the new Big Blue Bus facilities are under construction.
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Discussion
On February 2, 1999, the Council approved a design contract for new LNG/CNG bus
fueling and washing facilities for the Big Blue Bus. The construction of the facility was
scheduled to start in late spring 2001. In anticipation of the start of construction, the Big
Blue Bus relocated several storage functions to 1660 Lincoln Boulevard. The Print
Shop and Mail Room had been located at 612 Colorado Avenue, an interim Big Blue
Bus facility. The Print Shop and Mail Room subsequently moved to 1660 Lincoln
Boulevard.
No space is available within City-owned facilities for Big Blue Bus storage or the Print
Shop and Mail Room and these functions will continue the need to rent space for
several more years. Construction of the Big Blue Bus campus renovation and
expansion project is scheduled to run through the end of 2010, followed by a transitional
period when the parts storage warehouse will be incorporated into its permanent home
on the new campus. In 2007, the City's Print Shop and Mail Room are expected to be
relocated to City Hall or the new Civic Center parking garage, but until that time, they
will continue to need space.
After analyzing current market conditions and the availability of lease space in Santa
Monica, as well as the cost of moving and the need for space to be located within close
proximity to the main Big Blue Bus campus, staff concluded that the 12,000 square foot
space located at 1660 Lincoln Boulevard continued to best fit the needs of the Big Blue
Bus over the next five years. The approximately 4,000 square foot area to be vacated
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when the Print Shop and Mail Room moves to the Civic Center Parking Garage or City
Hall in early 2007 will be used by Big Blue Bus for storage.
Discussions with the property owner have resulted in agreement on tentative terms and
conditions. Subject to Council approval, staff proposes that the lease term be five
years, with one three-year extension. The agreement would be effective August i,
2006. The rent will be decreased from approximately $2.12 per square foot to $2.10
per square foot, with an annual escalator set at the actual CPI, with a minimum increase
of 3%, but not to exceed 5% annually. This rental rate is reasonable and competitive,
based upon current rental market comparisons. Operating expenses are paid by the
Big Blue Bus. Approximately 10 parking spaces are included as part of the lease rate.
Previous Council Actions
On February 13, 2001, Council authorized the Big Blue Bus to enter into a five year
lease for this space, for the same purposes. This lease expired in March 2006, and the
Big Blue Bus and Print Shop and Mait Room have occupied the space on a month-to-
month holdover status since that time.
BudgedFinancial Impact
Funds for this lease are included in the FY2006-07 Adopted Budget at Big Blue Bus
account number C41010104.589000.
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The total cost of the five year lease, effective August 1, 2006 (excluding increases in
CPI and operating expenses) is $1,512,000.
Prepared by:
Gretchen Kubacky, Senior Real Estate Analyst
roved:
Forwarded to Council:
~
'a
Martin Kenner~, ~g ~irector ~~ P. a ont Ewell
Resource Management Depa ent it anager
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