LEASE FOR LOS ANGELES METRO PROTECTIVE SERVICES (LAMPS) SUB-STATION APPROVE LEASE AGREEMENT FOR 4401 CRENSHAW BLVD

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1 55 Metro Los Angeles County Metropolitan Transportation Authority One Gateway Plaza os Angeles, CA ':J) met'o.ec CONSTRUCTON COMMTTEE NOVEMBER 15, 2012 SUBJECT: ACTON: LEASE FOR LOS ANGELES METRO PROTECTVE SERVCES (LAMPS) SUB-STATON APPROVE LEASE AGREEMENT FOR 4401 CRENSHAW BLVD RECOMMENDATON A. Authorize the leasing of office space to provide Los Angeles Metro Protective Services (LAMPS) sub-station. B. Authorize the Chief Executive Officer (CEO) to execute a 5 year lease agreement, as described herein, including up to five (5}, one year options, with the Bakewell Hawthorne, LLC for the rental of office space and associated parking in an office building located at 4401 Crenshaw Blvd in Los Angeles, CA commencing January 1, 2013 at a not-to-exceed $3,529,310 (inclusive of tenant improvements) lease agreement monthly rent plus the annual cost of utilities and operating expenses. BACKGROUND Currently, law enforcement is housed in Metro's Rail Operations Center and requires an estimated forty minutes (40) travel time each way to respond to incidents occurring on the Exposition and Crenshaw lines. The difference of minutes can make a difference to the safety of our patrons and employees. n order to mitigate this issue, Metro has identified and proposed an office located in Los Angeles Crenshaw Community. This location is in close proximity to Exposition and the future Crenshaw line. The office space is a high visibility, four story building at the Southwest corner of Crenshaw Blvd and Vernon Avenue, approximately 1 mile from the Expo/Crenshaw station (please see Attachment C). The building will accommodate large open areas for cubicles, existing enclosed offices, conference rooms, storage space, existing data, voice cabling, abundant electrical infrastructure and other amenities that will house our law enforcement officers. The proximity to the Crenshaw/Exposition station will allow our law enforcement officers to rapidly respond to incidents and calls for service. There will also be a greater presence in the area of law enforcement for the community. The lease agreement is based on an initial 5-year lease, with five (5), one (1) year options. This will provide Metro with the flexibility to retain the lease for future law

2 enforcement expansion requirements. The duration of this lease agreement is similar to ntegrated Project Management Office lease agreement to support the Crenshaw LAX Transit Corridor Project (Eight (8) year lease agreement, including up to two (2), one year options). ALTERNATVES CONSDERED An option considered would be not to approve this lease agreement. This is not recommended by staff as Metro currently does not have law enforcement sub-station dedicated to the Crenshaw/Exposition station. The response time to incidents along this rail line will continue to be a concern due to the estimated average travel time of 40 minutes between stations. DETERMNATON OF SAFETY MPACT The implementation of the projects will provide positive impact on safety for our employees and patrons by mitigating potential terrorist incident(s), improve departmental coordination, and inter-agency training. FNANCAL MPACT The base lease cost for the balance FY13 is estimated to be approximately $65,520 (Estimated occupancy time of March 2013). The base rent is $1.40/sq. ft./month. The base rent will increase by 3% annually during the lease term and the total cost of the lease is $3.5 million over the ten-year term (if five- 1 year options are exercised). Maintenance of the building interior will be the responsibility of landlord. The office will require tenant improvements consisting of painting, carpet cleaning, reconfiguration of office areas, and removal/replacement of walls - all at the expense of Metro as tenant. The tenant improvements are expected to not-to-exceed $681,506. The tenant improvements will be performed by the Landlord for Tenant and the cost of the improvements will be amortized over the first six months of the lease. The funding of $681,506 (inclusive of 6 payments of tenant improvements costs) for this lease agreement is included in the budget in cost center 2610, System Security and Law Enforcement under multiple bus and rail projects, Contract Services. mpact to Bus and Rail Operating and Capital Budget The funding for this lease agreement will come from Enterprise Fund revenue (fares, sales tax revenues, and TDA4) for $681,506. No other sources of funds were considered for these expenses because this is the appropriate fund source for activities that benefit bus and rail operations. LEASE FOR LAW ENFORCEMENT SUB-STATON 2

3 Rental Value The lease rental is competitive as it relates to other space in the subject building and to other available office space in the general Crenshaw Community. The propose rental rate of $1.40 per square foot is below market price for retail/commercial space in the Crenshaw District. NEXT STEPS Staff will complete negotiations of a lease agreement through the Owner's broker subject to review and approval by County Counsel. ATTACHMENTS A. Site Plan of Proposed Building B. Property List C. Aerial Map of Property Location and Expo/Crenshaw Station D. Staffing Plan Prepared by: Duane Martin, DEO Project Management Office of the CEO (213) LEASE FOR LAW ENFORCEMENT SUB-STATON 3

4 Pa»ul C. Taylor Deputy Chief Executive Officer Arthur T. Leahy Chief Executive Officer

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6 No. Building Premises SF MTA Sheniff Substation Crenshaw Area Prospect Summary Lease Term Rental Rate Parking Comments Contact Baldwin Hills Crenshaw Plaza 3650 Martin Luther $1 49/sf 1-5. Tenant pays 80+ secure 5 yrs $ Kmg Boulevard S1.67/sf6-10 electmal SO 20 designated parkmg Los Angeles. CA Stocker Street Los Angeles $1 65/sf + 3"!C yrs annual bumps 1-- '4401 Crenshaw T Boulevard $1 40/sf + 3% al yrs Los Angeles CA annual bumps 1-'t; Exit1ng LAPD Substation mimmial mprovements necessary occupancy 1n 90 davs $1 0/sfT's + $25/sf Full Service Gross $ spaces ammort1zed mto rent ' --+ Full Se!Vice Gross. Raw space mcludes S 20/sffor $ spaces On site Landlord Build to Taxes. 1n s suit z La Brea As-s currently w...j Ken Lombard Mike Dunn Danny Bakewell Avenue $1.65/sf + 3% built out with 10 Josh Golcheh 310- >- 4 10,000 5 yrs $0 35 $ spaces Los Angeles CA annual bumps offices. open area :c-e LEASED (.) <C Crenshaw Bl As-s; Space $1 85/sf+3% Mark Ranftle 310- t Los Angeles. CA 5,400 5yrs $0.45 $ spaces deemed to be too annual bumps small <C Rodeo As-s, currently Avenue $2.50/sf + 3% built out w1th 100 Ed Shannessy yrs $0 35 $ space Los Angeles CA annual bumps offices. too big not , divisible 5753 Rodeo i Avenue $1 65/sf + 3% As-s currently Greg Basllste yrs $0.50 $ spaces bu1lt out as Charter Los Angeles CA annual bumps 478 _ 7700 chool LEASED r 3679 Crenshaw Bl yrs $ 'l'o annual bumps 2-Story Buildmg. FSG $ spaces As-s, Built out w1th t 2 offices Enc Moore l 3831 Stocker St $1 75/sf + 3'% As-s, currently Chris Holland 3 t 0-9 Los Angeles CA yrs $0.50 $ pace' bulltoutas med1cal annual bumps 478 _ building

7 ATTACHMENT C Aerial Map of Property Location and Expo/Crenshaw Station LEASE FOR LAW ENFORCEMENT SUB-STATON 7

8 ATTACHMENT D Staffing Plan Current Sergeants Detectives Deputies _Security Assistants Plan subject to Metro's review and authorization. - j LEASE FOR LAW ENFORCEMENT SUB-STATON 8