Administrative
Report
H.6., File # 22-5202 Meeting Date: 12/20/2022
To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATEFRONT & ECONOMIC DEVELOPMENT DIRECTOR TITLE
ADOPT BY TITLE ONLY RESOLUTION NO. CC-2212-115, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY TO ELECTRIC RIDES, LLC.
APPROVE THE LEASE WITH ELECTRIC RIDES, LLC. FOR A MONTHLY MINIMUM RENT OF $3,519 AND A MONTH-TO-MONTH TERM
EXECUTIVE SUMMARY
In March 2012, the City purchased the Pier Plaza leasehold and began the process of direct leasing to various tenants. Pier Plaza is comprised of several buildings totaling approximately 75,000 square feet of office and retail uses. The proposed office lease with Electric Rides, LLC (Tenant) is for the space at 129 W. Torrance Boulevard, Suite 100 for an area of approximately 1,564 square feet.
The proposed lease is for a month-to-month term which can be terminated by either the City or Tenant with a 30 days prior written notice. Monthly rental revenue to the City’s Harbor Uplands Fund will be $3,519, or approximately $2.25 per square foot, with a 3% increase on the anniversary date each year thereafter. The proposed lease also includes two months of rent abatement to assist the Tenant with interior office improvements.
BACKGROUND
The Pier Plaza leasehold is comprised of buildings 103 to 131 West Torrance Boulevard (on the top level of the Pier Parking Structure) and totals approximately 75,000 square feet of space. The property is comprised almost entirely of office uses, with the lone exceptions being a restaurant and child care center. The proposed lease with Electric Rides, LLC. is for the office space at 129 W.
Torrance Boulevard, Suite 100 (Premises). The lease area totals approximately 1,564 square feet.
Electric Rides will open a bike shop and bike and boogie board rental business.
The proposed monthly rent is $3,519, or approximately $2.25 per square foot, which is consistent with other similar office leases in the waterfront and the broader market. The lease is for a month-tomonth term which can be terminated by either the City or Tenant with 30 days prior written notice.
The lease contains a provision that escalates the rent at 3% per year on the anniversary date each year thereafter. A security deposit of $3,519 will be kept on file for the lease, which is personally guaranteed by Mark McCracken, owner of Electric Rides, LLC. The City will make repairs to the plumbing, mechanical and HVAC systems and will replace ceiling tiles and window blinds as needed.
The proposed lease allows for two months of rent abatement to allow the Tenant to make additional
H.6., File # 22-5202 Meeting Date: 12/20/2022
The proposed lease allows for two months of rent abatement to allow the Tenant to make additional upgrades and improvements to the interior of the space above and beyond those previously described.
The proposed lease also allows for the Tenant to install up to two (2) bike racks on the exterior of the premises. Per Exhibit A of the lease, the bike racks may not interfere with pedestrian walkways, existing tenant ingress or egress or emergency/maintenance vehicle access routes. The Tenant will review the location and method of installation of the bike racks with on-site property management prior to installation. The Tenant will also work with property management regarding any necessary signage directing bike riders to the bike path. Said signage will also deter bike riders from areas that prohibit bicycles, such as International Boardwalk. Bike riders will be reminded to walk their bikes until they reach the bike path.
COORDINATION
The Waterfront and Economic Development Department collaborated with the City Attorney’s Office on this report. The City Attorney’s Office has approved the lease document as to form.
FISCAL IMPACT
Lease revenue from the property will accrue to the City’s Harbor Uplands Fund. The proposed lease will result in a monthly rent of $3,519 during the month-to-month term with an annual total of $42,228.
A 3% annual increase will take place starting the second year of the lease.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Resolution No. CC-2212-115
· Lease between the City of Redondo Beach and Electric Rides, LLC