SR-04-09-2013-3CID
City of City Council Report
Santa Monica"
City Council Meeting: April 9, 2013
Agenda Item: 34-6°
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Print Shop and Mail Room Lease Amendment
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute an amendment to Contract No. 8615 (CCS), with 1660 Lincoln Blvd., LLC, in
the amount of $8,240 per month to extend the lease at 1660 Lincoln Boulevard to
accommodate continued occupancy by the Print Shop and Mail Room through
March 31, 2014.
Executive Summary
The City currently leases 3,723 square feet at 1660 Lincoln Boulevard for the Print Shop
and Mail Room. A new location for the Print Shop and Mail Room has been identified at
the City's Corporation Yards located at 2500 Michigan Avenue. Tenant improvements
to accommodate the Print Shop and Mail Room at this location are expected to be
completed in March 2014.
To protect the Print Shop and Mail Room's leasehold interest at their existing location
until such time as tenant improvements are complete at 2500 Michigan Avenue, a lease
amendment is recommended to replace the City's existing month -to -month lease and
provide for a secured term from May 1, 2013 through March 31, 2014.
The lease would also include a month -to -month provision after the expiration of the
10 -month term should additional time be required to finish tenant improvements.
The proposed lease amendment would also amend an existing provision requiring a
90 -day notice to vacate by either party to a 30 -day notice period by either party.
Upon execution of the lease amendment, the rent would increase by three percent from
$8,000 per month to $8,240 per month, or $2.21 per sq.ft.
Background
In 2001, the City entered into a lease at 1660 Lincoln Boulevard for 12,000 sq. ft. to be
used for the warehouse needs of the Big Blue Bus, as well as the City's Print Shop and
Mail Room activities. On November 23, 2010, in anticipation of a reduction in space
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needs following the Big Blue Bus' relocation to its new campus, Council approved an
addendum to the lease to reduce the lease space to 3,723 sq. ft. to solely
accommodate the Print Shop and Mail Room and reduce the rent from
$27,884 per month to $8,000 per month. In addition, Council approved a change in the
lease term to a month -to -month lease until such time as a suitable space for the Print
Shop and Mail Room could be secured.
Discussion
Space at the City Corporation Yards, located at 2500 Michigan Avenue, has been
identified as available for the Print Shop and Mail Room. However, the space will
require tenant improvements to accommodate the Print Shop and Mail Room's needs,
and are estimated to be completed by March 2014. Therefore, the Print Shop and Mail
Room will need to stay at its current location until the improvements have been
completed.
To protect the Print Shop and Mail Room's leasehold interest at its existing location, a
lease amendment is required to replace the existing month -to -month lease and provide
for a lease term commencing on May 1, 2013 and concluding on March 31, 2014, that
would revert back to, a month -to -month lease at the conclusion of the lease period,
should additional time be required to finish tenant improvements. The owners of the
building are amenable to these changes in the lease. In addition, the owners have also
agreed to reduce the notice to vacate period from the existing 90 -day period to a 30 -day
noticing period by either party.
Alternatives
If the City Council decides not to amend the existing lease, staff would continue its
month -to -month lease at its existing location until such time as their new location at the
Public Works warehouse is completed. However, without the security of a lease term
through March 31, 2014, there is a risk that the Print Shop and Mail Room could be
given 90 days notice to vacate the premises at any time. Considering the significant
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electrical needs of the Print Shop, this may not be sufficient time to locate a suitable
temporary location, which could result in service disruptions.
Financial Impacts & Budget Actions
Currently, the Print Shop and Mail Room pay rent in the amount of $8,000 per month
($2.15 /sq.ft). The new rent would be $8,240 per month ($2.21 /sq.ft) effective
May 1, 2013, and would result in a monthly rent increase of $240. Funds are available
in the FY 2012 -13 budget in division 01211; rent would be charged to account
01211.522620. Budget authority for FY 2013 -14 will be requested as part of the
proposed FY 2013 -15 Biennial Budget for Council approval. Future funding is
contingent upon Council approval and budget adoption.
Prepared by: Elsa Trujillo, Senior Development Analyst
Approved: Forwarded to Council:
Andy Agle, Director Rod Gould
Housing and Eco is Development City Manager
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Reference Lease
Agreement No. 9722
(CCS)