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SR 05-28-2019 3H City Council Report City Council Meeting: May 28, 2019 Agenda Item: 3.H 1 of 4 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 2 of 4 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 3 of 4 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. 4 of 4 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)