ICANN Resolutions » Los Angeles Office Lease Renewal
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Whereas, ICANN's Los Angeles office lease is expiring in June 2022 and ICANN org recommends remaining at the current office location and entering into a new 10-year lease.
Whereas, the Board Finance Committee has reviewed the financial implications of the lease.
Whereas, both ICANN organization and the Board Finance Committee have recommended that the Board authorize the President and CEO, or his designee(s), to take all actions necessary to execute a new 10-year lease for ICANN's current Los Angeles office location, and to make all necessary disbursements pursuant to the lease.
Resolved (2021.07.22.07) the Board authorizes the President and CEO, or his designee(s), to take all necessary actions to execute a new 10-year lease for ICANN's current Los Angeles office location, and to make all necessary disbursements pursuant to the lease.
Resolved (2021.07.22.08), specific items within this resolution shall remain confidential for negotiation purposes pursuant to Article 3, section 3.5(b) of the ICANN Bylaws until the President and CEO determines that the confidential information may be released.
ICANN organization believes face to face interaction, including that which occurs at its headquarters, is essential to carry out its work and mission. Although the organization has been effectively operating remotely during the pandemic, the goal is to return to offices to support staff, and eventually community, collaboration at ICANN's physical office locations.
In 2012, ICANN signed a 10-year lease for 30,300 square feet of office space on the third floor of a Class A building in Playa Vista, California. ICANN added 5,782 square feet the following year and added 12,819 square feet in 2016 on the fourth floor of the building, along with tenant improvement customizations such as an interior staircase to connect the third and fourth floors, and a common area corridor on the fourth floor. ICANN now rents about 50,000 square feet total and its lease is set to expire in June 2022.
In early 2020, ICANN org began evaluating office space options upon the expiration of the current lease. While evaluating properties, ICANN org considered the following criteria:
Buildings of similar type and location to the current office
ICANN's space requirements, including conference rooms
Disruption to staff
Amenities in the area
Proximity to LAX and public transportation
Safety and security
If ICANN decided to move, the restoration cost to remove the interior staircase and restore the common area corridor on the fourth floor (about US$250,000)
After thorough consideration of many options, ICANN org began negotiating lease terms with the current landlord. The real estate market for suitable office space locations, such as the current space in Playa Vista, did not drop as much as other areas across the United States as a result of the pandemic. Given the current outlook of the pandemic and much of California reopening, market activity and rental rates have been steadily increasing. Because negotiations started during the pandemic, ICANN org is in a favorable bargaining position with the current landlord.
[REDACTED – CONFIDENTIAL NEGOTIATION INFORMATION]
In early 2021, ICANN org evaluated all the parameters affecting the decision to stay at the current Play Vista headquarters or move to another location. The evaluation included consideration of the real estate market conditions set forth above, as well as the current and expected workload the organization is expecting to face, including multiple large, complex and new projects and activities that are expected to have a significant impact on the organization overall and on reshaping several teams specifically.
Although ICANN may save some money in the long term with some of these alternative options, in the context of workload, ICANN org has recommended staying at the current location to avoid disruption to staff and operations as well as the risks and costs of moving. Staying at the current location maintains the current building's safety and security, its ability to host board and community meetings, in addition to its proximity to airports, hotels, amenities, public transportation, and freeways.
Given the current market conditions and alternative property options, ICANN org recommended staying at the existing location and entering into a new 10-year lease. The Board Finance Committee has reviewed the financial implications of the lease and agrees with ICANN org's recommendation.
Executing the new office lease is in the public interest as it maintains ICANN's presence in Los Angeles where about half of ICANN org's staff is based. ICANN org will be able to continue to carry out ICANN's mission without disruption while maintaining collaboration with community stakeholders and the general public.
There will be a fiscal impact in average costs per month compared to the final year of the current lease. However, this increase is reasonable given the current real estate market and ICANN will be able to absorb the cost increase.
Taking this decision will have no anticipated impact on the security, stability, and resiliency of the domain name system.
This is an Organizational Administrative function that does not require public comment.