On Monday, the San Diego City Council will consider approving a new lease agreement for about 400 utility employees who don’t fit in City Hall.

I analyzed the true savings of the deal here. And then I compared it to the San Diego Association of Government’s new lease right across the street.

That didn’t come out looking good for SANDAG at all. SANDAG appears to have gotten a bad deal and will spend up to $4.7 million more over the next six years than the city will for a comparable property.

A few readers had some questions after the SANDAG piece on Tuesday.

Here was one:

It would be interesting to see what, if any, annual escalations of rent are in the City Lease. 3% per year is a Landlord’s dream.

The city’s lease deal is right here. The City Council is considering approving this letter of intent and then the mayor would sign the final lease and then the employees would move to the new digs.

The base rent for the city’s new digs is $1.25 per square foot. And it goes up $0.06 per year (or, almost 5 percent the first year, 4.6 percent the next, etc.). If you add the cost of moving and construction, that could be up to $0.08 per square foot additional cost. Even with all that, if you compare the same 66-month period, the city will spend $4.7 million less than SANDAG.

Another reader asked how many employees the city and SANDAG would be housing.

Now this was interesting. SANDAG has a total of 249 employees, according to its latest budget, if you add “limited term employees” to the 214 regular employees. They will fit into 94,000 square feet.

The city is renting about 90,000 square feet for what could be up to 450 employees, but is at least 400.

There’s one big difference: SANDAG has to maintain public areas and a board room with public seating. The city does not, at least in this office space.

However, even subtracting thousands of square feet from the comparison to accommodate for public spaces does not make the SANDAG lease look much better.

If SANDAG left $3 million to $4 million on the table when it renewed its lease, what could that money have funded?

Well, just as an example, $3 million is the total cost of this parks and boardwalk project in Pacific Beach. Organizers asked SANDAG asked for partial funding. That project did not get anything.

Correction: This post originally implied that the Pacific Beach project likely would get funding. It actually did not make the cut last week.

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Scott Lewis

Scott Lewis oversees Voice of San Diego’s operations, website and daily functions as Editor in Chief. He also writes about local politics, where he frequently...

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