ARLINGTON COUNTY, VIRGINIA. County Board Agenda Item Meeting of May 14, 2016

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1 ARLINGTON COUNTY, VIRGINIA County Board Agenda Item Meeting of May 14, 2016 DATE: May 6, 2016 SUBJECT: Deed of Lease between NOBE I, LLC and SHCII, LLC, both Virginia limited liability companies, as landlord, and the County Board of Arlington County, Virginia, as tenant, for real property located at 2631 Shirlington Road, Arlington, Virginia (RPC# ). C. M. RECOMMENDATIONS: 1. Approve the attached Deed of Lease between NOBE I, LLC and SHCII, LLC as landlord and the County Board of Arlington County, Virginia as tenant for 2631 Shirlington Road, Arlington, Virginia; and 2. Authorize the Real Estate Bureau Chief, Department of Environmental Services, or his designee, to execute the Deed of Lease, and any related documents, on behalf of the County Board, subject to approval as to form by the County Attorney. ISSUES: There are no outstanding issues relating to approval and execution of the Deed of Lease. SUMMARY: Upon approval and execution of the attached Deed of Lease ( Lease ) on behalf of the County Board, the County will be entitled to utilize the leased premises to address County Arlington Transit (ART) bus and Trades Center parking needs until at least The term of the Lease is for seven years, with automatic one-year extensions, until terminated by either party upon at least six months prior written notice. The initial base rent is $720,000 per year, with 2.75% annual rent escalations. Site improvement costs are estimated to be $460,000. BACKGROUND: ART s entire bus fleet is currently stored at the former LaPorte site, located at 3600 S. Four Mile Run Drive. The current ART bus fleet consists of 65 buses. The County will terminate the storage of the ART buses at the former LaPorte site upon completion of the new Eads Street ART House facility that is currently under construction. The new ART House facility will have the capacity to store only 46 ART buses, leaving 19 ART buses that must be stored elsewhere. The ART bus storage shortfall will increase to 44 buses by County Manager: ##### County Attorney: ***** 19. Staff: Doug Raiden, DES Real Estate, Steve Yaffe, DES Transportation

2 2020, because of planned fleet expansion. The storage of the entire ART bus fleet within the County is both desirable and recommended to reduce deadhead costs and to reduce the operational risk of extended travel to the ART House facility for dispatch purposes. Additional parking will also be required for approximately 160 cars and heavy vehicles that will be displaced during the construction of the expansion of the Trades Center parking structure. Construction of the Trades Center parking structure expansion is scheduled to commence this fall and last for at least eight months. The leased site can accommodate both the Trades Center vehicles during the parking structure expansion project and the ART bus fleet overflow, along with a bus dispatch trailer and a bus shelter storage area. Once the heavy vehicles return to the Trades Center post-construction, the leased site will give the County flexibility to meet other temporary storage needs. DISCUSSION: The proposed Lease will give the County until at least 2023 to find a more permanent bus storage solution. The Shirlington site is attractive because of its immediate availability and its location near the ART House facility and away from residential neighborhoods. Few other properties in Arlington County are both undeveloped and zoned lightindustrial for bus storage/maintenance use. The key lease provisions are as follow: Term: Seven years, with rolling automatic one-year extensions, unless and until notice of termination is given by either party upon at least six months written notice before expiration of the term or any extension thereof. Base Rent: Initial Base Rent of $720,000 per year, with 2.75% annual escalations. Additional Rent: Reimbursement of landlord s real property taxes in excess of taxes charged to landlord in first year of term. Rent Commencement: Upon delivery of the leased premises. The estimated cost to improve the site for the County s use is $460,000. Staff expects construction, consisting of site clearing, fencing, lighting, and a trailer hook-up, to take three to six months, barring any unforeseen conditions. FISCAL IMPACT: Funding of $1.1 million in FY 2017 for the lease and the initial capital construction will come from a new grant from the Department of Rail and Public Transit (DRPT) covering 34% of both the capital build-out and lease costs, and from the County s State transit funds held at the Northern Virginia Transportation Commission (NVTC). Funding in FY 2018 FY 2024 will come from a combination of the DRPT grant and Northern Virginia Transportation Authority (NVTA) 30% local funding. Funding of the ongoing lease costs will also be included in the County s FY 2017 FY 2026 Capital Improvement Plan

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29 V i c i n i t y M a p S h i r l i n g t o n R o a d R P C SHIRLINGTON RD RAMP RAMP INTERSTATE 395 RAMP INTERSTATE 395 HOV LANES RAMP Feet Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2015 Commonwealth of Virginia. Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center. Produced and March Contact us at gismc@arlingtonva.us for spatial reference notes. ± INTERSTATE TH RD S

30 Vicinity Map 2631 Shirlington Road RPC TON RD RA MP ING SHIRL O RA MP V L AN ES P 5H M RS TA TE 39 IN T RA S RD TH ± 27 Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2015 Commonwealth of Virginia. Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center. Produced and March Contact us at gismc@arlingtonva.us for spatial reference notes. ER S 100 Feet IN T 0 TA TE 39 5 IN TE RA MP ER S TA TE

31 V i c i n i t y M a p S h i r l i n g t o n R o a d R P C S LINCOLN ST S GLEBE RD 24TH RD S S LOWELL ST 25TH ST S 25TH ST S 25TH CT S RAMP RAMP KEMPER RD S FOUR MILE RUN DR CT S KENMORE SHIRLINGTON RD RAMP RAM P S FOUR MILE RUN DR 27TH ST S RAMP INTERSTATE 395 RAMP 27TH RD S S CLEVELAND ST Four Mile Run Park S RANDOLPH ST Jennie Dean Park S ARLINGTON MILL CAMPBELL AVE DR SHIRLINGTON RD SHIRLINGTON RD RAMP RAMP CIR INTERSTATE 395 HOV LANES SHIRLINGTON RAMP ST S QUINCY RAMP RAMP QUAKER LN GUNSTON RD Feet Pursuant to Section of the Code of Virginia, any determination of topography or contours, or any depiction of physical improvements, property lines or boundaries is for general information only and shall not be used for the design, modification, or construction of improvements to real property or for flood plain determination. Aerial Photography 2015 Commonwealth of Virginia. Easement Locations are Approximate. Map prepared by Arlington County GIS Mapping Center. Produced and March Contact us at gismc@arlingtonva.us for spatial reference notes. ±