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Agenda Report
May 20, 2024
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TO: Honorable Mayor and City Council
FROM: City Manager
SUBJECT: AUTHORIZE THE CITY MANAGER TO ENTER A FORTY-MONTH OFFICE LEASE AGREEMENT WITH 199 S. LOS ROBLES, LLC., SAND 199 LOS ROBLES, LLC. AND ROBLES SM, LLC. FOR THE PREMISES LOCATED AT 199 S. LOS ROBLES AVE. SUITE #350, IN AN AMOUNT NOT TO EXCEED $774,147 FOR THE RENT STABILIZATION
DEPARTMENT
RECOMMENDATION:
It is recommended that the City Council:
1. Find that the leasing of 199 S. Los Rabies Avenue is categorically exempt from the California Environmental Quality Act (CEQA") pursuant to the State CEQA Guidelines Section 15301 (Existing Facilities); there are no features that distinguish this project from others in the exempt classes, and therefore, there are no unusual circumstances; and
2. Authorize the City Manager to enter a lease agreement with 199 S. Los Robles, LLC, Sand 199 Los Rabies, LLC. And Robles SM, LLC. in the amount not to exceed $774,147 for the office space located at 199 S. Los Robles Avenue incorporating the terms and conditions generally described below, and to execute any other related agreements necessary to effectuate the transaction, including non-substantial revisions.
BACKGROUND:
The Rent Stabilization Department was created in December 2023 to support the Pasadena Rental hlousing Board duties to regulate rent increases on certain rental properties in the city, provide eviction protections, and carry out the other duties set forth in the Pasadena Fair & Equitable Housing Charter Amendment (Charter Amendment) approved by Pasadena voters in November 2022.
The new Rent Stabilization Department needs approximately 6,000 usable square feet of space for 22 staff and multiple conference rooms sized for public hearings and client ;
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MEETING OF 0512012.021tAGENDA ITEM NO..13
Lease for Rent Stabilization Department -199 S Los Robles Ave May 20, 2024
consultations. Additional requirements include sufficient parking, a lobby, a break room, and storage needs.
Proposed Terms:
The proposed lease would start on July 1st, 2024, for a term of 40 months. It would become co-terminus with the City's other Departments and align with the City's Facility Needs Assessment goals to consolidate all departments.
The proposed lease rental rate is $2.75 per square foot for 7,649 total square feet, with an effective rental rate of $2.03 per square foot when all landlord concessions are considered and factored into the tease term. Of the 7,649 total square feet, which includes common areas shared with other tenants, such as corridors and bathrooms, 5,880 are usable square feet. The base rental rate does not include parking (Est. $88,200/term) or the annual pro rata operating expenses increases above the base year of 2024.
Table 1: Summary of Base Rent for 199 S. Los Robles Ave Suite 350 Category07/2024-06/2025l07/2025-06/2026l07/2026-06/2027l07/2027-ll/2027Category Total Annual Base
Rent
$ 252,417.00 | $ 259,989.51 | $ 267,789.20 | $91,940.96$ 872,136.66 Landlord Concessions
Total
Concessions$ (97,989.72)$$$$ (97,989.72)
Estimated
Totals
$ 154,427.28$259,989.51$267,789.20$91,940.96$ 774,146.95 The landlord will provide a rental concession in the form of a tenant improvement allowance of $122,113 for tenant-designed office improvements and 3 months of base rent abatement for months 2 through 4, equaling $63,104, plus an additional $34,885 in lieu of the broker's commission.
COUNCIL POLICY CONSIDERATION:
The lease in consistent with the City Council's goal to maintain fiscal responsibility and stability and to support and promote the quality of life and local economy.
ENVIRONMENTAL ANALYSIS:
Entering into a lease at 199 S. Los Robles Avenue is categorically exempt from CEQA pursuant to State CEQA Guidelines Title 14, Chapter 3, Article 19, Class 1, Section 15301 (Existing Facilities). This exemption applies to the continued operation of existing facilities involving negligible or no expansion of use. Neither the landlord provided tenant improvements nor the operation for the proposed terms will Lease for Rent Stabilization Department -199 S Los Robles Ave May 20, 2024
result in any expansion of the existing use. Further, there are no features on this property that distinguish this project from others in the exempt classes, and therefore, there are no unusual circumstances.
FISCAL IMPACT:
The total estimated cost of this action will be $774,147 over 40 months. Funding for this action will be addressed by utilizing budget appropriations in the Rent Stabilization Fund (689). It is anticipated that $154,427 will be spent during the upcoming FY2025 fiscal year. The remainder of the cost, $619,720, be spent over fiscal years FY2026 though FY2028.
Prepared by:
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JErP^E?'^ERNAN6EZ
Real Property Manager
Approved by:
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/.^MIGUEL MARQUEZ
!^c City Manager
Respectfully submitted,
DAVID A.KLUG
Economic Development Director
Concurred by:
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HILLIP L£CIPHILLIP LECLAIR
Rent Stabilization Department
Interim Director