REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
April 29, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
ARLENE MOLINA, Director, Preschool Services Department
SUBJECT
Title
Amendment to Lease Agreement with Springfield, LLC, for Office and Playground Space in Adelanto
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 8 to Lease Agreement No. 02-759 with Springfield, LLC, for office and playground space is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class I).
2. Approve Amendment No. 8 to Lease Agreement No. 02-759 with Springfield, LLC, to extend the term of the lease for five years, for the period of May 1, 2025, through April 30, 2030, by exercising one of the two existing five-year options to extend, following a permitted holdover period from September 1, 2024, through April 30, 2025, at a cost of $82,732, adjust the rental rate schedule, and update standard lease agreement language for 6,800 square feet of classroom and office space, and approximately 7,000 square feet of playground area for the Preschool Services Department, at 11497 Bartlett Road in Adelanto, in the amount of $777,148, for a new total contract amount of $2,688,052.
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.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of Amendment No. 8 (Amendment) to Lease Agreement No. 02-759 (Lease) will not result in the use of Discretionary General Funding (Net County Cost) as the Preschool Services Department (PSD) lease costs are 90% federally funded and 10% state funded. The total cost of the Amendment is $777,148. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the PSD budget (5911802220). Sufficient appropriation is included in the 2024-25 budget and will be included in future recommended budgets. Annual lease costs are as follows:
|
Lease Year |
Annual Lease Cost |
|
*September 1, 2024 - April 30, 2025 |
$82,732 |
|
May 1, 2025 - April 30, 2026 |
$128,928 |
|
May 1, 2026 - April 30, 2027 |
$133,824 |
|
May 1, 2027 - April 30, 2028 |
$138,720 |
|
May 1, 2028 - April 30, 2029 |
$143,616 |
|
May 1, 2029 - April 30, 2030 |
$149,328 |
|
Total Lease Cost: |
$777,148 |
*Holdover Period
BACKGROUND INFORMATION
On July 23, 2002 (Item No. 46), the Board of Supervisors (Board) approved the Lease with one three-year and one two-year option to extend the term of the Lease with Springfield, LLC, for approximately 3,600 square feet of classroom and office space and approximately 5,000 square feet of playground area, located at 11497 Bartlett Road, Suites A-1 through A-5 in Adelanto. The original term was for the period of September 1, 2002, through August 31, 2007. In the 23 years since the Lease was originally approved, the Board has approved seven amendments to increase the square footage of leased classroom and office space to approximately 6,800 square feet, increase the playground area to approximately 7,000 square feet, adjust the rental rate schedule, extend the Lease term, include in-kind cost sharing, and update to standard lease agreement language.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
January 27, 2004 |
52 |
|
2 |
June 19, 2007 |
39 |
|
3 |
September 28, 2010 |
48 |
|
4 |
November 6, 2012 |
61 |
|
5 |
May 6, 2014 |
50 |
|
6 |
July 11, 2017 |
25 |
|
7 |
June 11, 2019 |
59 |
PSD requested that RESD negotiate an amendment to extend the existing term of the Lease, which expired on August 30, 2024. Approval of this Amendment was delayed due to continued negotiations concerning the terms and possible tenant improvements to be performed by the landlord. On September 1, 2024, the Lease went into a permitted holdover and PSD has continued to occupy 11497 Bartlett Road in Adelanto (Premises) and abide by the terms of the Lease.
The Amendment will extend the term for the period of May 1, 2025, through April 30, 2030, by exercising one of the two existing five-year options to extend, following a permitted holdover period from September 1, 2024, through April 30, 2025, for the Premises, adjust the rental rate schedule and update standard lease agreement language. All other terms 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- Class 1 Existing Facilities because the proposed Lease is to secure property to operate within the existing structure with negligible or no expansion of existing use.
|
Summary of Lease Terms |
|
|
Lessor: |
Springfield, LLC Hendon Harris, Member |
|
|
|
|
Location: |
11497 Bartlett Road, Suites A-1 - A-5, Adelanto |
|
|
|
|
Size: |
Approximately 6,800 square feet of classroom and office space, and approximately 7,000 square feet of playground area |
|
|
|
|
Term: |
Five years commencing May 1, 2025, through April 30, 2030 |
|
|
|
|
Options: |
One five-year option remaining |
|
|
|
|
Rent: |
Cost per square foot per month: $1.58 |
|
|
Monthly: $10,744 |
|
|
Annual: $128,928 |
|
|
*Mid-range for comparable facilities in the Adelanto area per the competitive set analysis on file with RESD |
|
|
|
|
Annual Increases: |
4% |
|
|
|
|
Improvement Costs: |
None |
|
|
|
|
Custodial: |
Provided by County |
|
|
|
|
Maintenance: |
Provided by Lessor; County maintains the playground area |
|
|
|
|
Utilities: |
Provided by County |
|
|
|
|
Insurance: |
The Certificate of Liability Insurance, as required by the lease, is on file with RESD |
|
|
|
|
Holdover: |
Month-to-month term upon the same terms and conditions, including the rent which existed at the time of expiration |
|
|
|
|
Right to Terminate: |
County has the right to terminate the Lease in the event of loss of funding to County by providing a 120-day notice |
|
|
|
|
Parking: |
Sufficient for County needs |
PROCUREMENT
Policy 12-02 requires a thorough and detailed review by the County Administrative Office (CAO) or designee to validate the need for and provide a competitive analysis of any lease with a term of more than 20 years. Approval of the Amendment will yield an aggregate term of 28 years, and a potential aggregate term of 33 years if the remaining extension option is exercised.
RESD, acting in its approved capacity as the CAO designee to review proposed real property leases under Policy 12-02, completed a market analysis of comparable properties and found the current rental rate, including annual increases during the five-year extended term, to be competitive. The site best meets the long-term requirements of PSD, minimizes disruption to PSD operations and saves on moving costs.
Regarding the term extension, pursuant to Exceptions to County Policy 12-02 Leasing Privately Owned Property For County Use, Section 3.A. Amendments of Existing Leases, this policy shall not apply to amendments of existing leases (including an amendment to exercise an option to extend the term of a lease), provided the amendment does not exceed the maximum term (including options) of the lease.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Adam Ebright, Deputies County Counsel, 387-5455) on April 2, 2025; Preschool Services (Arlene Molina, Director, 383-2028) on April 2, 2025; Purchasing (Dylan Newton, Buyer III, 387-3377) on March 25, 2025; Finance (Allegra Pajot, 388-0218, and Eduardo Mora, 387-4376, Administrative Analysts) on April 8, 2025; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on April 14, 2025.
(YG: 655-0268)