Legislation Details

File #: 11670   
Type: Consent Status: Passed
File created: 2/6/2025 Department: Real Estate Services
On agenda: 2/11/2025 Final action: 2/11/2025
Subject: Amendment to Lease Agreement with Rancho Tech, LLC For Office Space in Rancho Cucamonga
Attachments: 1. CON-RESD-CFS-021125-Lease Amd w Rancho Tech 12-741 A3, 2. Item #35 Executed BAI, 3. 12-741 A-3 Executed Contract

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.

 

Summary of Lease Terms

Lessor:

Rancho Tech, LLC Isaac Moradi, Managing Partner

 

 

Location:

9518 9th Street, Suite A-1, Rancho Cucamonga

 

 

Size:

34,691 square feet of office space

 

 

Term:

Five years commencing February 1, 2025

 

 

Options:

One five-year option remains

 

 

 

Cost per sq. ft. per month:

Monthly

Annual

Rent:

 

$71,463

$857,562

 

 

 

 

 

*Low-range for comparable facilities in the Rancho Cucamonga area per supporting Lease comparable on file

 

 

Annual Increases:

3%

 

 

Holdover:

Month to month under the same terms and conditions of the Lease

 

 

Improvement Costs:

None

 

 

Custodial:

Provided by Lessor

 

 

 

Maintenance:

 

Provided by Lessor

 

 

 

Utilities:

 

Provided by Lessor

 

 

 

Insurance:

 

The Certificate of Liability Insurance, as required by the lease, is on file with RESD

 

 

 

Right to Terminate:

County has the right to terminate with 90-days’ notice

 

 

 

Parking:

 

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)