(Photo: Miles Freeman/Google)
RAND Seeks Changes to 25-Year-Old Development Deal to Allow for Mixed-Use
At tonight’s City Council meeting, the RAND Corporation is seeking changes in its Development Agreement with the city agreed to in 2000 that is set to expire in 2055. Given radical changes in commuting patterns, the famous downtown Santa Monica RAND building is operating at only 17% occupancy and RAND estimates this is costing the city millions of dollars every year.
The RAND Corporation is a non-profit organization that, in its own words, “develops solutions to public policy challenges, aiming to create safer, more secure, healthier, and more prosperous communities worldwide.“ The headquarters is located at 1776 Main Street, adjacent to the unused Civic Auditorium.
In 2000, RAND and the city agreed to a development plan for the structure that focused on creating a visually appealing office building for both its research endeavors and the RAND School of Public Policy. Because RAND has shifted staff to other locations and remote work by RAND staff has increased, there are (on average) only 225 people per day in the building which has 328,000 feet of office space. The fifth floor is completely abandoned.
So what can be done? RAND is offering two solutions to the city. The first would be allowing RAND to sublet office space to other interests to help fill the empty offices. The second would be allowing RAND to sell the building outright so they could move to a smaller building.
For the city, there are millions of dollars in benefits should RAND sell the building. As a nonprofit, RAND is exempt from property taxes and pays negligible business license taxes and fees to the city. Experts at RAND estimate that adding for-profit office rentals or sale could net $3.3-3.6 million annually for the county and state. In addition, returning hundreds of office workers to the downtown area would increase local business revenue. If the building is sold, a transfer tax could net the city $20-25 million for a one-time transfer tax.
Should the city agree to change the existing Developer’s Agreement, RAND is proposing a number of amendments;
- Allow a “reasonable range” of potential commercial uses for the existing building (e.g., business/professional or creative offices, research and development for life sciences, and ground floor pedestrian-oriented retail/restaurants).
- $5,500,000 in community-benefit payments from RAND to the City of Santa Monica
- Right of first offer for the city to lease unused parking in the building’s underground garage
- A $40,000 annual contribution from RAND to the Santa Monica Early Childhood Lab School will continue and be extended.
For years, RAND was one of the city’s largest employers, but the corporation’s footprint has shrunk significantly in recent years. Since its founding in 1948, and moved to its unique downtown headquarters five years later, RAND has called Santa Monica home. Even though it has opened offices in Washington, D.C. it’s hard to picture RAND without Santa Monica.
