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Agenda
June 9, 2025
TO: Honorable Mayor and City Council
FROM: City Manager
SUBJECT: AUTHORIZE THE CITY MANAGER TO ENTER INTO A THIRTY-TWO- 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 #550, IN THE AMOUNT NOT-TO-EXCEED $583,489 FOR WATER AND
POWER DEPARTMENT OFFICES
RECOMMENDATION:
It is recommended that the City Council:
(1) Find that the leasing of 199 S. Los Robles 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 for others in the exempt classes, and therefore, there are no unusual circumstances; and
(2) Authorize the City Manager to execute a lease agreement with 199 S. Los Robles, LLC., Sand 199 Los Robles, LLC. and Robles SM, LLC. in the amount not-to-exceed $583,489 for 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:
Over the past several years, Pasadena Water and Power ("PWP") has made efforts to recruit and fill multiple staff positions throughout the Utility. This decrease in PWP's vacancy rate has led to a need for more office space to provide dedicated workspaces to all staff members. PWP's current office space at 150 South Los Robles, 1055 Colorado, and at the City Yards is completely occupied.
In order to accommodate current staffing levels, PWP will need to either remodel its leased premises or expand its office space footprint. A remodel of existing premises would result in considerable expense to PWP, disrupt business operations, and displace I
MEETING OF.
06/09/2025
AGENDA ITEM NO.
2 Lease for Water and Power Department -199 S Los Robles Ave Ste 550 June 9, 2025
staff for unpredictable periods of time. It was determined that PWP should pursue additional office space. To that end, Economic Development has identified a 6,356 square foot space at 199 South Los Robles Avenue. This space is in close proximity to City Hall and to PWP headquarters and can provide workspace and meeting facilities for several staff teams. The space also includes the option to rent 18 subterranean parking spots at $105 per parking space, per month. Additional parking needs can also be met by existing arrangements at the 150 and 200 South Los Robles garages.
PROPOSED TERMS:
The proposed lease would start on June 1, 2025, for a term of 32 months. The proposed lease will be co-terminus with the City's other Departments and align with the City's Facility Needs Assessment goals to consolidate divisions currently located in disparate locations.
The proposed lease base rate is $3.10 per square foot for 6,356 total square feet with an effective rate of $2.39 per square foot when all landlord concessions are taken into consideration and factored into the lease term.
Table 1: Summary of Base Rent for 199 S. Los Robles Ave Ste. 550
NET BASE RENT SUMMARY
Year 1Year 2Year iYear 4Years
CategoryMonth 1-12Month 13-24Month 25-36Month 37.39Total Gross Rent I $236,443 | $243,536 | S167,228 | $$$647,208 LANDIORD CONCESSIONS^
Less Rent Abatement I S39,407 | $$$$s39,407
Less RE Commissions Rebate I S24,312 | $$$$s24,312
Net Base Rent | S172,724 | $243,536 | $167,228 | $s$583,489 The landlord will provide a rental concession in the form of a tenant improvement allowance of $80,000 for tenant office improvements. In addition, the landlord will provide two months' base rent abatement from months two and three, equaling $39,407, plus an additional $24,312 rent credit in lieu of broker's commission.
Table 2: Summary of Tenant Improvement Allowance for 199 S. Los Robles Ave Ste. 550
TENANT IMPROVEMENT SUMMARY
Year 1Year 2Year 3Year 4Years
CategoryMonth l-12Month 13-24Month 25-36Month 37-39Total Tl Allowance$80,000$$s$s80,000
Lease for Water and Power Department -199 S Los Robles Ave Ste 550 June 9, 2025
Table 3: Summary of Effective Rate for 199 S. Los Robles Ave Ste. 550
EFFECTIVE RATE SUMMARY
Base Rent
$647,208
Contract Rate
$3.10
Rent Abatement
RE Commissions Rebate
Tl Allowance
Seller Concessions
s39,407 | $
Adjusted Base Rent
607,801 | $
Effective Rate
2.91 s24,312
s80,000
$583,489
$503,489
$2.79
$2.39
COUNCIL POLICY CONSIDERATION:
The lease is 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:
The City's continued leasing of 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 continued operation for the proposed terms will result in any expansion of the existing use. Further, there are no features on this property that distinguishes this project from others in the exempt classes, and therefore, there are no unusual circumstances.
Lease for Water and Power Department -199 S Los Robles Ave Ste 550 June 9, 2025
FISCAL IMPACT:
The total estimated cost of this action will be $583,489 over a 32-month initial term. The Department will utilize existing budgeted appropriations in the Power Operating Fund 401 and Water Operating Fund 402 to support the first year of lease costs. The remainder of the cost, $563,785, will be spent over fiscal years FY 2026 through FY 2028. Future contract costs will be budgeted as part of the Department's annual operating budget. There is no impact to the General Fund.
Respectfully submitted,
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DAVID A. KLUG ^
Economic Development Director
Prepared by:
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J^fffeyHernandez
Real Property Meager
Approved by:
MIQyS-MARQUEZ
City Manager
Concurred by:
DAVID REYES
Water and Power Department
General Manager