REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
February 25, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
MELANIE OROSCO, County Librarian, County Library
SUBJECT
Title
Amendment to Lease Agreement with Blue Jay Retail, LLC for Library and Office Space in Blue Jay
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 8 to Lease Agreement No. 03-474 with Blue Jay Retail, LLC, for library and office space, is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 8 to Lease Agreement No. 03-474 with Blue Jay Retail, LLC, through the use of an alternative procedure, as allowed per County Policy 12-02 - Leasing Privately Owned Real Property for County Use, to extend the term of the lease five additional years, by exercising the five-year option to extend, for the period of March 1, 2025, through February 28, 2030, following a permitted holdover period of June 1, 2024, through February 28, 2025, adjust the rent schedule, add one five-year option to extend the term of the lease and update standard lease agreement language, for approximately 5,513 square feet of library and office space at 27235 Highway 189 in Blue Jay, for the County Library, in the amount of $1,041,555, including the holdover amount of $125,554, for a new total amount of $3,209,403.
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 Amendment No. 8 (Amendment) to Lease Agreement No. 03-474 (Lease) with Blue Jay Retail, LLC (BJR) will not require Discretionary General Funding (Net County Cost). The total cost of this five-year Amendment is $1,041,555. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the County Library (Library) budget (64022152600), which is 100% funded by property tax. Additional Lease costs include janitorial, maintenance, and utility expenses, which will be paid from the Library budget. Sufficient appropriation is included in both the Library and RESD Rents 2024-25 budgets and will be included in future recommended budgets. Annual Lease costs are as follows:
|
Year |
Lease Cost |
Additional Lease Cost |
Total Lease Cost |
|
*June 1, 2024 - February 28, 2025 |
$95,264 |
$30,290 |
$125,554 |
|
March 1, 2025 - February 28, 2026 |
$130,989 |
$41,567 |
$172,556 |
|
March 1, 2026 - February 28, 2027 |
$134,918 |
$42,814 |
$177,732 |
|
March 1, 2027 - February 29, 2028 |
$138,966 |
$44,098 |
$183,064 |
|
March 1, 2028 - February 28, 2029 |
$143,015 |
$45,421 |
$188,436 |
|
March 1, 2029 - February 28, 2030 |
$147,429 |
$46,784 |
$194,213 |
|
Total Cost |
|
|
$1,041,555 |
*Permitted holdover period
BACKGROUND INFORMATION
On June 3, 2003 (Item No. 68), the Board of Supervisors (Board) approved the Lease with one three-year option and one two-year option to extend the term for 5,513 square feet of library and office space at 27235 Highway 189 in Blue Jay. The original term was for the period of June 1, 2003, through May 31, 2008. In the 20 years since the Lease was originally approved, the Board has approved seven amendments and extended the term through May 31, 2024, added options to extend, modified the rent, reflected changes in ownership, and updated standard lease agreement language.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
November 20, 2007 |
38 |
|
2 |
October 21, 2008 |
39 |
|
3 |
May 17, 2011 |
55 |
|
4 |
May 21, 2013 |
49 |
|
5 |
May 19, 2015 |
61 |
|
6 |
April 19, 2016 |
54 |
|
7 |
May 21, 2019 |
89 |
In September 2024, RESD received approval from the Library to extend the Lease by five additional years and add one five-year option to extend the term. Due to the ongoing negotiations between the County and the Landlord, the Lease has been extended into a holdover period. RESD was able to negotiate a renewal of the Lease at the current rate for year one. The recommended action will amend the Lease with BJR by extending the term five years by exercising the existing option to extend for the period of March 1, 2025, through February 28, 2030, adjust the rent schedule, add one five-year option to extend the term, and update standard lease agreement language due to the continuing need to provide library and office space for the Library in the Blue Jay area. 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.
|
Summary of Lease Terms |
|
Lessor: |
Blue Jay Retail, LLC Peter Hollingshead, Managing Partner |
|
|
|
|
Location: |
27235 Highway 189, Blue Jay |
|
|
|
|
Size: |
5,513 square feet of library and office space |
|
|
|
|
Term: |
Five years commencing March 1, 2025 |
|
|
|
|
Options: |
One five-year option |
|
|
|
|
Rent: |
Cost per sq. ft. per month |
Monthly |
Annual |
|
|
$1.98 |
$10,916 |
$130,989 |
|
|
*Low-range for comparable facilities in the Blue Jay area per supporting lease comparable on file |
|
|
|
|
Annual Increases: |
3% |
|
|
|
|
Improvement Costs: |
None |
|
|
|
|
Holdover: |
Month to Month upon same terms and conditions of the Lease |
|
|
|
|
Custodial: |
Provided by County |
|
|
|
|
Maintenance: |
Lessor to provide exterior maintenance; County to provide interior maintenance |
|
|
|
|
Utilities: |
Lessor to provide trash disposal; County to provide all other utilities |
|
|
|
|
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
Exceptions to County Policy 12-02, Leasing Privately Owned Real Property for County Use. The Policy provides that the Board may approve the use of an alternative procedure to the use of a formal Request For Proposal (RFP) whenever the Board determines that compliance with the formal RFP requirements would unreasonably interfere with the financial or programmatic needs of the County, or when the use of an alternative procedure would otherwise be in the best interests of the County. The Lease and continued occupancy of the Library best meets the needs of the County in providing uninterrupted public services to the population within the local service area.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Daniella Hernandez, Deputies County Counsel, 387-5455) on January 3, 2025; Library (Melanie Orosco, County Librarian, 387-2220) on December 19, 2025; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on December 20, 2025; Finance (Elias Duenas, 387-4052, and Eduardo Mora, 387-4376, Administrative Analysts) on February 5, 2025; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on February 7, 2025.
(AR: 501-7579)