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
GEORGINA YOSHIOKA, Director, Department of Behavioral Health
SUBJECT
Title
Acquisition of Improved Property for Office Space in Rancho Cucamonga
End
RECOMMENDATION(S)
Recommendation
1. Find that the acquisition of approximately 4.78 acres of real property improved with an office building, totaling approximately 83,248 square feet, located at 10740 4th Street, in Rancho Cucamonga (Assessor’s Parcel Number 0210-082-88-0000), is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
2. Approve Capital Improvement Program Project No. 25-164 to acquire approximately 4.78 acres of real property improved with an office building, totaling approximately 83,248 square feet, located at 10740 4th Street, in Rancho Cucamonga (Assessor’s Parcel Number 0210-082-88-0000), for the purchase price of $21,000,000, escrow expenses and other fees estimated to be $6,100, due diligence inspection costs estimated to be $110,000, and administrative costs estimated to be $15,000, for a total estimated one-time cost of $21,131,100.
3. Authorize the acquisition of approximately 4.78 acres of real property improved with an office building, totaling approximately 83,248 square feet, located at 10740 4th Street, in Rancho Cucamonga (Assessor’s Parcel Number 0210-082-88-0000), for the purchase price of $21,000,000, escrow expenses and other fees estimated to be $6,100, due diligence inspection costs estimated to be $110,000, and administrative costs estimated to be $15,000 for a total estimated one-time cost of $21,131,100, in accordance with Government Code Section 25350.
4. Approve Purchase and Sale Agreement and Joint Escrow Instructions with Omninet Empire, LLC, a Delaware Limited Liability Company, to acquire said improved property in Recommendation No. 3.
5. Authorize the Auditor-Controller/Treasurer/Tax Collector to post budget adjustments to the 2024-25 budget as detailed in the Financial Impact Section (Four votes required).
6. Authorize the Director of the Real Estate Services Department to execute escrow instructions and any other documents necessary to complete this transaction, subject to County Counsel review.
7. 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
Improve County Government Operations.
Operate in a Fiscally Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The total estimated one-time cost is $21,131,100, which includes the following items: a purchase price of $21,000,000; escrow expenses and other fees estimated at $6,100; due diligence inspection costs estimated at $110,000; and administrative costs estimated at $15,000. This will be funded by Mental Health Services Act funds, 1991 Realignment funds, and 2011 Realignment funds. The acquisition will result in the termination of County Lease Agreement No. 13-702 (Lease) for office space located at 303 E. Vanderbilt Way in San Bernardino, resulting in annual savings of approximately $2,340,000 in rent expenses.
Real Estate Services Department and Department of Behavioral Health (DBH) request the following adjustments to the 2024-25 budgets:
|
Fund Center |
Commitment / GL Account |
Description |
Action |
Amount |
WBSE |
|
9200002200 |
55405040 |
Intra-Fund Transfers Out |
Increase |
$10,354,239 |
|
|
9200002200 |
52002445 |
Other Professional & Special Services |
Decrease |
$10,354,239 |
|
|
1010001000 |
55405040 |
Intra-Fund Transfers Out |
Increase |
$1,690,488 |
|
|
1010001000 |
52002445 |
Other Professional & Special Services |
Decrease |
$1,690,488 |
|
|
9203311000 |
55415041 |
Intra-Fund Transfers In |
Increase |
$12,044,727 |
|
|
9203311000 |
52002445 |
Other Professional & Special Services |
Decrease |
$9,086,373 |
|
|
9203311000 |
55305030 |
Operating Transfers Out |
Increase |
$21,131,100 |
|
|
7700003105 |
40909975 |
Operating Transfers In |
Increase |
$21,131,100 |
94.10.0008 |
|
7700003105 |
54304030 |
Structures & Improvements to Structures |
Increase |
$21,131,100 |
94.10.0008 |
BACKGROUND INFORMATION
DBH desires to purchase the property, located at 10740 4th Street, in Rancho Cucamonga (Assessor’s Parcel Number 0210-082-88-0000) (Property), which represents an opportunity to provide an updated office space for several DBH Administration divisions, providing a newer and more efficient work environment. The new building will offer updated facilities and allow DBH to relocate staff from the existing lease property located at 303 E. Vanderbilt Way in San Bernardino (Vanderbilt Building) that experienced numerous ongoing issues, including frequent plumbing concerns, outdated elevators, and general maintenance challenges. The acquisition will aim to improve DBH operations and ensure a more comfortable and productive setting for staff, supporting DBH's long-term growth and success.
On August 20, 2013 (Item No. 56), the Board of Supervisors (Board) approved the Lease, for a term from May 1, 2014, through April 30, 2024, subject to the successful sale and execution of a lease by the successful bidder for the Vanderbilt Building. F&R County Building, LLC was the successful bidder at an auction held on October 3, 2013, and subsequently executed the Lease on October 15, 2013. On March 11, 2014 (Item No. 30) the Board approved Amendment No. 1 to the Lease with Vanderbilt Partners, LLC, a California limited liability company to reflect a change of ownership effective December 9, 2013, increase the Lease area to 70,000 square feet, change the commencement date from July 1, 2014, through June 30, 2024, the date the County can terminate the Lease, and adjust the rent schedule. On October 7, 2014 (Item No. 37) the Board approved Amendment No. 2 to the Lease to change the Lease end date from June 30, 2024, to July 31, 2024, and change the date the County can terminate the Lease from June 30, 2024, to July 31, 2024.
On January 28, 2025, (Item No. 54) the Board approved Amendment No. 3 to the Lease to extend the term by five years, for the period of February 1, 2025, through January 31, 2030, following a permitted six-month holdover period. The Lease’s extended term will allow time to acquire the Property and renovate it to meet DBH’s needs. The Lease will be terminated on the earlier of its expiration date or at the time DBH takes possession of the Property.
The project to acquire the Property was reviewed pursuant to the California Environmental Quality Act and determined to be categorically exempt under Section 15301 - Existing Facilities (Class 1) because there is no possibility that the purchase of the Property will have a significant effect on the environment.
PROCUREMENT
The purchase of this Property complies with Government Code Section 25350 and Section 6063, which address the authority to acquire this facility and need to publish the acquisition.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Dawn Martin, Deputies County Counsel, 387-5455) on January 13, 2025; Auditor-Controller/Treasurer/Tax Collector (Charlene Huang, Auditor-Controller Manager, 382-7022) on January 10, 2025; Behavioral Health (Lydia Bell, Administrative Manager, 386-9732) on January 8, 2025; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on January 6, 2025; Finance (Yael Verduzco, Principal Administrative Analyst, 387-5285, and Paul Garcia, Administrative Analyst, 386-8392) on February 4, 2025; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5426) on February 5, 2025.
(TJS: 893-0340)