L.A. Watchdog — At its meeting on Tuesday of last week, the politically appointed Board of Commissioners of our Dept. of Water and Power postponed consideration of a proposed 10-year, $63 million lease of 124,350 square feet of office space in Figueroa Plaza.
A decision on the city-owned office complex was delayed because a City Watch story suggested the department may be overpaying by $20 million.
This overpayment is part of the city’s scheme to stick the department and its ratepayers with almost $15 million of tenant improvements, Normally, this expense is the responsibility of the landlord, the city of Los Angeles.
The city also is attempting to extract an additional $5 million through higher-than- market rents.
However, it appears that DWP is being slammed for an additional $20 million as market professionals and several DWP employees have indicated that the department needs only half the contracted space to house the 550 employees who are scheduled to occupy Figueroa Plaza. This would require DWP to adopt space-planning techniques similar to those in the private sector.
Of course, if the DWP had adopted proper space-planning techniques for its 1.6 million square foot headquarters building, then this 10-year, $63 million lease would not be necessary. But past attempts by the DWP to modernize its historic 50-year-old headquarters building were shot down by the former Mayor Villaraigosa and the City Council when it was led by current Mayor Garcetti.
The concept of proper space planning also applies to the city and its 32,000 employees. Imagine how the tens of millions in annual savings could be used to repair and maintain our lunar-cratered streets or house the homeless, alleviating the need for an increase in our taxes.
The Culprits
This lease for 124,250 square feet of city- owned office space was the creation of the Municipal Facilities Committee and its members, the City Administrative Officer, the Chief Legislative Analyst, and Mayor Garcetti. They were looking to offload the expense of this office space vacated by the Lewis Brisbois law firm as a result of the DaVinci Fire on Dec. 8, 2014.
Last November, the city was prepared to move the Housing and Community Investment Dept. and its 600 employees into this office space. It intended to finance the tenant improvements and relocation from the leased Garland Building by issuing debt and recouping any debt, operating, and maintenance expenses by hitting up their department’s special funds.
Relocation was scrapped when Mr. Garcetti’s office realized that it would be easier to dump the surplus office space and the cost of the tenant improvements onto DWP and its ratepayers. This would be “saving” the city and its General Fund $63 million over the next 10 years. This was despite pushback from DWP’s management.
The terms of this unfavorable lease need to be reviewed and analyzed by an independent third party in conjunction with the Ratepayers Advocate. Any opinions and findings, along with all backup material, must be shared in a timely manner with the ratepayers and the public before the lease is discussed by the politically appointed Board of Commissioners.
This deal also serves as a call to reform the relationship between DWP and the city. This would require an ordinance requiring that any transaction between the department and the city be subject to a thorough analysis by the city, the department, and the Ratepayers Advocate. This analysis would also be shared with the ratepayers and the public.
Of course, this uneconomic deal that further soils the reputation of our Elected Elite raises the question of how many other stinkers have been approved by the mayor, the City Council, and the politically appointed Board of Commissioners that are not in the best interest of the ratepayers.
Mr. Humphreville writes L.A. Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Mr. Humphreville is the publisher of the Recycler Classifieds — www.recycler.com. He may be contacted at lajack@gmail.com.