UPDATED, May 21, 2020, 12:24 p.m.: The Los Angeles Department of Water and Power, the nation’s largest municipal utility, has inked a long-term lease for 132,000 square feet at a Downtown L.A. office, The Real Deal has learned.
The City Council approved the 10-year deal between LADWP and Golden Hill Properties LLC, an entity incorporated by real estate scion Michael Delijani, records show. The cost for the life of the lease is $72.5 million for the building at 233 South Beaudry Avenue.
LADWP has an option for a five-year extension, which would cost an additional $39 million. The utility also claims responsibility for $15 million in building operating expenses, with an extensive planned buildout for the property.
LADWP has a total of $7 billion in infrastructure and IT projects planned and has said it will hire a significant number of employees as it maps out those massive projects over the next five years.
The Council approved the lease agreement April 1, but it has not been previously reported. LADWP confirmed the lease deal. The utility serves four million city residents and has a $6 billion annual budget.
Delijani, who runs Delson Investment Company, is the son of the late L.A. real estate investor Ezat Delijani. The family maintains deep political connections in the city.
Michael Delijani owns multiple commercial and residential properties downtown, including one nearby at 136 South Beaudry Avenue. In 2018, Delijani acquired the century-old Beaux Arts Barclay Hotel at 101 W. 4th Street for $21 million.
CORRECTION: In the caption, a previous version of this story incorrectly identified David Nahai as current head of LADWP. Martin Adams now leads the utility as chief engineer and general manager. It also incorrectly identified Nahai as CEO. He was general manager. This article also updates LADWP’s comments.