REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
February 11, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
JEANY ZEPEDA, Director, Children and Family Services
SUBJECT
Title
Amendment to Lease Agreement with Rancho Tech, LLC For Office Space in Rancho Cucamonga
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 3 to Lease Agreement No. 12-741 with the Rancho Tech, LLC for office space is an exempt project under the California Environmental Quality Act Guidelines Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 3 to Lease Agreement No. 12-741 with Rancho Tech, LLC to extend the term of the lease by five additional years for the period of February 1, 2025 through January 31, 2030, following a permitted holdover period of May 15, 2024, through January 31, 2025, adjust the rent schedule, correct the Premises Suite number and update standard lease agreement language, for approximately 34,691 square feet of office space at 9518 9th Street in Rancho Cucamonga in the amount of $5,142,784, including a permitted month to month holdover of $589,873, for a new total amount of $12,567,856.
3. Direct the Real Estate Services Department to file the Notice of Exemption in accordance with the California Environmental Quality Act.
(Presenter: Terry W. Thompson, Director, 387-5000)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Pursue County Goals and Objectives by Working with Other Agencies.
FINANCIAL IMPACT
Approval of this item will not require additional Discretionary General Funding (Net County Cost). The total cost of this five-year amendment is $5,142,784. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Human Services (HS) Administrative Claim Budget (5011151000). HS Administrative Claim departments are funded with 85% Federal and State funding, 8% realignment revenue and 7% Discretionary General Funding (Net County Cost). Sufficient appropriation is included in both the HS and RESD Rents 2024-25 budgets and will be included in future recommended budgets. Annual lease costs are as follows:
|
Year |
Lease Cost |
|
*May 15, 2024 - January 31, 2025 |
$589,873 |
|
February 1, 2025 - January 31, 2026 |
$857,562 |
|
February 1, 2026 - January 31, 2027 |
$883,288 |
|
February 1, 2027 - January 31, 2028 |
$909,787 |
|
February 1, 2028 - January 31, 2029 |
$937,081 |
|
February 1, 2029 - January 31, 2030 |
$965,193 |
|
Total Cost |
$5,142,784 |
*Permitted holdover period
BACKGROUND INFORMATION
The recommended action will amend Lease No. 12-741 (Lease) with Rancho Tech, LLC (Rancho) by extending the term of the Lease five years for the period of February 1, 2025 through January 31, 2030, adjusting the rent schedule, correcting the Premises Suite number from Suite B to Suite A-1 and updating standard lease agreement language due to the continuing need to provide office space for the San Bernardino County (County) Department of Children and Family Services (CFS) in the Rancho Cucamonga area. On September 25, 2012 (Item No. 52), the Board of Supervisors (Board) approved the 10-year Lease, with two five-year options including 32,549 square feet of office space at 9518 9th Street in Rancho Cucamonga. The original term of the Lease was for the period of January 1, 2014, through December 31, 2023. In the 10 years since the Lease was originally approved, the Board has approved two amendments to amend the commencement date of the Lease, modify the rent, and update standard lease agreement language.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
May 7, 2013 |
64 |
|
2 |
July 22,2014 |
43 |
In June 2024, RESD received approval from CFS to extend the Lease by five additional years. Amendment No. 3 to the Lease extends the term of the Lease by five additional years for the period of February 1, 2025, through January 31, 2030, adjusts the rent schedule, and updates standard lease agreement language. All other terms and conditions of the Lease remain unchanged.
The project to approve the Amendment was reviewed pursuant to the California Environmental Quality Act (CEQA) and determined to be categorically exempt under Section 15301 - Existing Facilities (Class 1) because there is no possibility that the leasing of the subject property will have a significant effect on the environment. Accordingly, no further action is required under CEQA.
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Summary of Lease Terms |
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Lessor: |
Rancho Tech, LLC Isaac Moradi, Managing Partner |
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Location: |
9518 9th Street, Suite A-1, Rancho Cucamonga |
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Size: |
34,691 square feet of office space |
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Term: |
Five years commencing February 1, 2025 |
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Options: |
One five-year option remains |
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Cost per sq. ft. per month: |
Monthly |
Annual |
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Rent: |
|
$71,463 |
$857,562 |
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*Low-range for comparable facilities in the Rancho Cucamonga area per supporting Lease comparable on file |
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Annual Increases: |
3% |
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Holdover: |
Month to month under the same terms and conditions of the Lease |
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Improvement Costs: |
None |
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Custodial: |
Provided by Lessor |
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Maintenance: |
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Provided by Lessor |
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Utilities: |
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Provided by Lessor |
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Insurance: |
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The Certificate of Liability Insurance, as required by the lease, is on file with RESD |
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Right to Terminate: |
County has the right to terminate with 90-days’ notice |
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Parking: |
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Sufficient for County needs |
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Daniella Hernandez, Deputies County Counsel, 387-5455) on December 10, 2024; Children and Family Services (Jeany Zepeda, Director, 387-2792) on December 17, 2024; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on January 6, 2025; Finance (John Hallen, 388-0208, and Eduardo Mora, 387-4376, Administrative Analysts) on January 31, 2025; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on January 31, 2025.
(AR: 501-7579)