REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
May 20, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
JAMES LOCURTO, Director, Transitional Assistance Department
SUBJECT
Title
Amendment to Lease Agreement with Moss Colton Properties, LLC for Office Space in Colton
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 5 to Lease Agreement No. 13-997 with Moss Colton Properties, 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. 5 to Lease Agreement No. 13-997 to extend the term of the lease for five years, for the period of June 1, 2025, through May 31, 2030, through the County’s exercise of an existing extension option, for approximately 46,500 square feet of office space at 1900 West Valley Boulevard in Colton, for the Transitional Assistance Department in the amount of $7,404,660, for a new total contract amount of $20,646,010.
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. 5 (Amendment) to Lease Agreement No. 13-997 (Lease) will not result in the use of Discretionary General Funding (Net County Cost). The total cost of this five-year Amendment is $7,404,660. 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 (5010001000). The HS Administrative Claim budget is 85% federal and state funded, 15% Local Share which is comprised of Realignment revenue and Discretionary General Funding (Net County Cost). Sufficient appropriation is included in the 2024-25 Rents and HS Administrative Claim budgets and will be included in future recommended budgets. Annual lease costs are as follows:
|
Year |
Annual Lease Cost |
|
June 1, 2025 - May 31, 2026 |
$1,395,000 |
|
June 1, 2026 - May 31, 2027 |
$1,439,640 |
|
June 1, 2027 - May 31, 2028 |
$1,478,700 |
|
June 1, 2028 - May 31, 2029 |
$1,523,340 |
|
June 1, 2029 - May 31, 2030 |
$1,567,980 |
|
Total Cost: |
$7,404,660 |
BACKGROUND INFORMATION
On December 17, 2013 (Item No. 57), the Board of Supervisors (Board) approved the Lease, with two five-year options to extend the term for 46,500 square feet of office space for the Transitional Assistance Department (TAD) at 1900 West Valley Boulevard in Colton (Premises). The original term of the Lease was for the period of January 1, 2015, through December 31, 2024. In the 12 years since the Lease was originally approved, the Board has approved four amendments to reflect a change of ownership from Bridge Financial Advisors, LLC to COLTAD, LLC, change the term for the period June 1, 2015, through May 31, 2025, change the date the County can terminate the Lease, adjust the rent schedule, revise the construction dates, reflect a change of ownership from COLTAD, LLC to Moss Colton Properties, LLC (Moss), update to reduce the parking premises, update the insurance provision to add Moss as additional insured, and update standard lease agreement language.
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Amendment No. |
Approval Date |
Item No. |
|
1 |
May 20, 2014 |
69 |
|
2 |
October 7, 2014 |
35 |
|
3 |
October 3, 2017 |
29 |
|
4 |
June 11, 2024 |
80 |
TAD requested RESD to negotiate this Amendment to extend the existing term, which is set to expire on May 31, 2025. The Amendment will extend the term for the period of June 1, 2025, through May 31, 2030, adjust the rental rate schedule, update the termination language to allow the County to terminate the Lease beginning June 1, 2028, and update standard lease agreement language. This Amendment keeps the Lease out of holdover and allows for Moss to review TAD’s request for tenant improvements. All other Lease terms 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.
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Summary of Lease Terms |
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Lessor: |
Moss Colton Properties, LLC Glenn Moss, Owner |
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Location: |
1900 West Valley Boulevard in Colton |
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Size: |
Approximately 46,500 square feet |
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Term: |
June 1, 2025, through May 31, 2030 |
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Options: |
One five-year option remains |
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Rent: |
Cost per square foot: $2.50* |
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Monthly: $116,250 |
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Annual: $1,395,000 |
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*Mid-range for comparable facilities in the Colton area per the competitive set analysis of file with RESD |
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Annual Increases: |
3% |
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Improvement Costs: |
None |
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Custodial: |
Provided by Lessor |
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Maintenance: |
Provided by Lessor |
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Utilities: |
Provided by Lessor; County to pay electrical costs in excess of $122,760 per year or $0.22 per square foot per month (electrical utility expense cap) and to pay gas costs in excess of $33,480 per lease year or $0,06 per square foot per month (gas expense cap), both subject to 3% annual increase |
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Insurance: |
The Certificate of Liability Insurance, as required by each lease, is on file with RESD |
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Holdover: |
Upon the end of the term, if permitted by Lessor, the Lease shall continue on a month-to-month term upon the same terms and conditions which existed at the time of expiration with 3% annual increases |
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Right to Terminate: |
County has the right to terminate beginning June 1, 2028, with a 90-day written notice |
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Parking: |
Sufficient for County needs |
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Adam Ebright, Deputies County Counsel, 387-5455) on April 22, 2025; Transitional Assistance (James Locurto, Director, 388-0245) on April 21, 2025; Purchasing (Dylan Newton, Buyer III, 387-3377) on April 21, 2025; Finance (John Hallen, 388-0208, and Eduardo Mora, 387-4376, Administrative Analysts) on April 28, 2025; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on May 4, 2025.
(YG: 665-0268)