SR-1000-001-06 (11)
RMD:BBB:JM:GK:SN:\BBBCustomerInformationCenterLease.doc
Council Meeting: January 24, 2006 Santa Monica, California
To: Mayor and City Council
From: City Staff
Subject: Recommendation to Authorize the City Manager to Negotiate and Execute
a Lease Agreement with Third Street Limited to Lease Retail Space at 223
Broadway for the Big Blue Bus Customer Service Division
INTRODUCTION
This report recommends that the City Council authorize the City Manager to negotiate
and execute a Lease agreement with Third Street Limited to lease retail space at 223
Broadway for the Big Blue Bus (BBB) transit customer information center.
BACKGROUND
The Big Blue Bus Customer Relations Division is the primary interface for customers
seeking information, requesting assistance, and making purchases. In a typical month
the Division serves an average of 1,500 walk-in customers and 4,600 phone customers.
The customer service office also sells over $50,000 in fare media such as Little Blue
Cards, EZPasses, merchandise, and special transit service tickets.
Access to the customer service office has been an issue for some time and has become
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even more problematic since the temporary move to 1660 7 Street, which fronts
Olympic Blvd. and is adjacent to the 10 freeway. Customers have complained the
location is inconvenient, difficult to find and not easily accessible for pedestrians.
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DISCUSSION
The BBB campus expansion plan calls for a convenient customer service office to be
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located at the corner of 6 Street and Colorado Ave. Until the facility is completed an
interim location has been identified on the Third Street Promenade. The proposed new
location is directly in front of one of the busiest transit stops in our system making it
easily accessible for customers to reach. This facility will be open to the public
weekdays between the hours of 7 am and 6 pm with future consideration for extended
weekend hours.
The customer information center will provide a better location to offer customer service
and easier access to transit activities for the community and should increase sales
revenues and customer goodwill. The location will be the primary outlet for fare media,
sales, answering questions, providing trip planning assistance, selling Getaways and
other products and services.
No other space for these functions is available within City Hall or other City buildings at
this time, and the public’s customer service needs will best be met at this high-visibility
space. The lease space totals 845 square feet and will be utilized to house
approximately eight customer service staff.
Discussions with the property owner have resulted in agreement on tentative terms and
conditions. The City has proposed that the lease term be six years, with one five-year
extension. BBB’s main campus, with the customer service facility, will be completed by
December 2009. The agreement will be effective March 1, 2006, with three months’ free
rent in order to allow time for renovations to the space.
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The rent will be approximately $7.25 per square foot with an annual escalator set at the
actual CPI but not to exceed four percent annually. There is a monthly pass-through of
approximately $661 for operating expenses and real estate taxes. Monthly cost will
equal $7,448.25.
BUDGET/FINANCIAL IMPACT
Funding for this project is from a federal grant from discretionary funds 5307 dedicated
to transit use. The funds for this lease are in the current fiscal year budget at BBB
account number C410749.589000. The total cost of the six-year lease, effective
February 1, 2006, with three months’ free rent, but excluding increases in CPI and
operating expenses, is $468,320.25. The BBB will provide alterations and tenant
improvements estimated at $300,000.
RECOMMENDATION
It is recommended that the City Council authorize the City Manager to negotiate and
execute a Lease agreement with Third Street Limited to lease retail space at 223
Broadway for the City’s BBB Customer Relations Division in accordance with the terms
outlined in this staff report.
Prepared by: Jeffrey P. Mathieu, Director of Resource Management
Stephanie Negriff, Director of Transit Services
Gretchen Kubacky, Senior Administrative Analyst – Real Estate
Dan Dawson, Acting Transit Customer Relations Manager
Attachment : Map
Reference Contract No. 8549 (CCS)
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