SR 05-28-2019 3H
City Council
Report
City Council Meeting: May 28, 2019
Agenda Item: 3.H
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To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development, Economic
Development Division
Subject: Award Request for Proposal and enter into License Agreement for parking
located at 3300 Pico Place North
Recommended Action
Staff recommends that the City Council:
1. Award RFP# 3719 to Arsher LLC, a California-based company, for parking on
City property located at 3300 Pico Place North;
2. Authorize the City Manager to negotiate and execute a license agreement with
Arsher LLC, at a rate of $1,400 per month for a five-year term, subject to annual
escalations in rent, with five additional one-year renewal options on the same terms and
conditions.
Summary
The City owns a small parking lot situated near the corner of Pico Boulevard and 33rd
Street that has traditionally been leased by neighboring businesses who lack sufficient
parking. A Request for Proposals (RFP) was issued to advertise the availability of the
property for parking or electric-vehicle charging and to seek proposals from those
interested in using the space. Two proposals were received from nearby property
owners. Staff recommends the City award the RFP and enter into a license agreement
with Arsher LLC as the best-qualified firm based on their parking need, shared-use
arrangement, and proposed license fee. The agreement would have a five-year term,
with five additional one-year renewal options, at a rate of $1,400 per month, subject to
annual escalations in rent.
Discussion
Since 1993, the unimproved, vacant, 1,746-square-foot site (Attachment A) has been
leased for parking by Morgan Automotive and its predecessor for their auto -service
customers. The small, irregularly shaped lot is only accessible from the alley and is a
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remnant property in the public right-of-way resulting from construction of the Santa
Monica Freeway. There are approximately seven parking spaces on the site, with a
majority of the spaces allowing for tandem parking, making the lot more suitable for a
private lessee.
On March 7, 2019, staff issued an RFP seeking proposals from neighboring businesses
or property owners who have a parking need, the financial ability to pay fair market rent
and maintain insurance, and the organizational capacity to maintain and operate
the site. Alternatively, given the site’s adjacency to the freeway and the City’s growing
number of registered electric vehicles, the City was also willing to consider proposals
that would use some or all of the lot to support the recharging of electric vehicles for the
general public. Given the lack of parking in the area, preference was given to those
willing to consider sharing the lot with other users to maximize the lot’s parking
potential.
The RFP was advertised on Planet Bids and a notice was mailed directly to businesses
and property owners fronting Pico Boulevard from 30th to 34th Street. The City received
two proposals: one from Arsher LLC, property owner of 3301-3303 Pico Boulevard, and
the other from Morgan Automotive, the City’s existing tenant and property/business
owner of 3317 Pico Boulevard. Based on the evaluation criteria of preferred uses,
experience, qualifications, financial capability, and proposed rent, staff recommends
Arsher LLC as the proposed Licensee of the site.
RFP Data
RFP Posting
Date RFP Posted On
RFP Advertised In
(City Charter &
Municipal Code)
# of Vendors
Downloaded
# of Submittals
Received
Date Publicly
Opened
03/07/2019 City's Online
Bidding Site N/A 20 2 4/15/2019
RFPs Received Selection Criteria
Arsher LLC Municipal Code SMMC 2.24.073
Morgan Automotive
Evaluation Criteria
Concept; Preferred Uses; Experience;
Qualifications; Financial Capability; Proposed
Rent
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Justification to Award
Staff recommends Arsher LLC as the best qualified firm to license the site based on
their parking need, shared-use arrangement, and proposed license fee. While Morgan
Automotive submitted a strong proposal and has been a long-standing City tenant who
has fulfilled the obligations of its lease over the years, Arsher LLC’s proposal best met
the City’s criteria including addressing a parking-shortage need, collaborating with
local property owners, and offering a higher monthly rental rate. Arsher LLC’s 9,000 -
square-foot building hosts five tenants, including Unurban Coffee and small
information technology and entertainment businesses who collectively employee 15
people. Arsher’s proposal includes letters of support from two neighboring property
owners, 3307 Pico, LLC and MONO Enterprises, LLC, who represent another 7,500
square feet and 10 employees. While Morgan Automotive has existing parking spaces
on its property, the others lack any on-site parking.
Given the ability to meet a greater parking need and provide more revenue, staff
recommends that Council authorize the City Manager to negotiate and execute a
license agreement with Arsher LLC at a rate of $1,400 per month for a five-year term,
with five additional one-year renewal options, subject to annual rent escalations based
on the Consumer Price Index for Los Angeles-Anaheim-Riverside. Arsher LLC would be
responsible for all costs associated with the space, including maintenance, insurance
and any necessary or desired improvements.
Staff also evaluated opportunities to use the property for other City needs, such as
affordable housing or park space. However, the size of the site makes it infeasible for
affordable housing and the lack of visibility and direct public access from a City street
makes it infeasible for a public park. Staff also evaluated selling the property and
concluded that it could not be made into a legal parcel since it does not meet the 5,000-
square-foot minimum-parcel-size requirement. As a result, the only way to dispose of
the property would be to merge it with the adjacent lot at a reduced value.
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Past Council Actions
Meeting Date Description
7/28/2009 (attachment B) Lease Agreement with Morgan Auto Service
Financial Impacts and Budget Actions
Anticipated annual lease revenues of $16,800 from rent payments would be deposited
into account number 01160001.414000 (Lease Rental Revenue).
Prepared By: Kriss Casanova, Senior Development Analyst
Approved
Forwarded to Council
Attachments:
A. Site Map 3300 Pico Place North
B. July 28, 2009 Staff Report (Web Link)
C. Arsher - SM Oaks Initiative form
Site Map - 3300 Pico Place North
REFERENCE:
Contract No. 10851
(CCS)