City of Alexandria, Virginia
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MEMORANDUM
DATE: NOVEMBER 20, 2024
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER /s/
FROM: JEREMY MCPIKE, DIRECTOR, GENERAL SERVICES
DOCKET TITLE:
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Consideration of a Lease Agreement Between the City and Eisenhower Mill Properties, LLC for office space at the Eisenhower Center III Office Building located at 2331 Mill Road
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ISSUE: Consideration of a Lease Agreement between the City and Eisenhower Mill Properties, LLC for office space at the Eisenhower Center III Office Building located at 2331 Mill Road to accommodate the relocation of City offices from City Hall during the planned City Hall Renovation Project.
RECOMMENDATION: That City Council authorize the City Manager to execute the proposed lease agreement with Eisenhower Mill Properties, LLC.
BACKGROUND: After many years of service, City Hall requires major updates to repair aging components, improve operating systems, optimize space utilization, improve building circulation and wayfinding, and enhance security. Therefore, the City has initiated an extensive project to design and renovate City Hall which will provide a revitalized safe, and sustainable environment to better service City staff, Alexandria residents, and visitors well into the future.
During the City Hall renovation project, the entire building, its offices, staff and operations will be required to vacate the building. As a result, the City will need to secure alternative temporary office space, or swing space in nearby office buildings, to accommodate the relocation of City staff and offices from City Hall.
DISCUSSION: To accommodate office relocations during the City Hall renovation project, staff has identified a total of 35,230 square feet across the first, second and third floors of the Eisenhower Center III Office Building located at 2331 Mill Road.
The lease agreement for office space at 2331 Mill Road shall commence April 1, 2025, for 30,734 square feet of the space and August 1, 2025, for the remaining 4,496 square feet all for a term of three years with an expiration of March 31, 2028, to align with the estimated completion of the City Hall renovation project and the relocation of offices back to the renovated City Hall.
The lease rate will be $20.00 per square foot, which for 35,230 square feet will result in a cost of $704,600 per year with an escalation of two and a half percent (2.5%) per year. In the event the leased space is required longer than the three-year term, the lease includes three, one year renewal options.
The lease includes up to 105 parking spaces at a rate of $50.00 per space per month and a tenant allowance of $150,000 for improvements to the leased areas.
FISCAL IMPACT: The lease rate for the 35,230 square feet of leased office space in the Eisenhower Center III Office Building located at 2331 Mill Road will be $20.00 per square foot, or $58,717 per month. In addition, the rate for operating expenses and real estate taxes per the terms of the lease will be $10.00 per square foot, or $29,358 per month. Based on the lease commencement dates, real estate taxes and operating expenses, the fiscal impact for FY 2025 will be $230,505; and $1,050,065 for FY 2026 including the two and a half percent (2.5%) annual increase.
ATTACHMENT:
1. Lease Agreement Between the City of Alexandria and Eisenhower Mill Properties LLC for Office Space at 2331 Mill Road
STAFF:
Julian Gonsalves, Assistant City Manager
Alfred Coleman, Deputy Director, General Services
Dominque de ’la Bay, Building Manager, General Services
Daniela Licata, Real Estate Specialist, General Services
Bryan MacAvoy, Assistant City Attorney