REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
January 28, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
SHANNON D. DICUS, Sheriff/Coroner/Public Administrator
SUBJECT
Title
Lease Amendment with WGI, Inc. for Office Space in Phelan for the Sheriff/Coroner/Public Administrator
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 8 to Lease Agreement No. 05-223 with WGI, Inc. for office space is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class I).
2. Approve the Real Estate Services Department’s use of an alternative procedure in lieu of a Formal Request for Proposals, as allowed per County Policy 12-02; “Leasing Privately Owned Real Property for County Use” to extend the term of Lease Agreement No. 05-223, with WGI, Inc. for three years, for the period of February 1, 2025 through January 31, 2028, following a permitted eleven month holdover for the period of March 1, 2024, through January 31, 2025, and add one three-year option to extend the term of the lease for the continued use of approximately 3,285 square feet of office space located at 4050 Phelan Road, Units 1 and 2 for the Sheriff/Coroner/Public Administrator.
3. Approve Amendment No. 8 to Lease Agreement No. 05-223 with WGI, Inc. to extend the term of the lease for three years, for the period of February 1, 2025 through January 31, 2028, following a permitted eleven month holdover for the period of March 1, 2024, through January 31, 2025, adjust the rental rate schedule, add one three-year option to extend the term of the lease, and update standard lease agreement language for the continued use of approximately 3,285 square feet of office space located at 4050 Phelan Road, Units 1 and 2, in Phelan for the Sheriff/Coroner/Public Administrator, increasing the contract amount by $308,702, from $1,190,575 to $1,499,277.
4. 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. 05-223 (Lease) will not result in the use of additional Discretionary General Funding (Net County Cost). The total cost of this three-year Amendment totals $308,702 and includes amounts for an eleven month holdover period. Lease payments will be made from the Real Estate Services Department’s (RESD) Rents budget (7810001000). RESD will be reimbursed from the Sheriff/Coroner/Public Administrator’s (Sheriff) budget (4430001000). Other costs associated with this Lease include custodial, electric utility costs, and maintenance of fire suppression equipment paid from the Sheriff’s (4430001000) budget. Sufficient appropriation is included in both the RESD and Sheriff’s 2024-25 budgets and will be included in future recommended budgets. Annual lease costs are as follows:
|
Year |
Annual Lease Cost |
Estimate of Other Costs |
|
* March 1, 2024 - January 31, 2025 |
$69,014 |
$16,126 |
|
February 1, 2025 - January 31, 2025 |
$77,544 |
$16,770 |
|
February 1, 2025 - January 31, 2026 |
$79,872 |
$17,441 |
|
February 1, 2026 - January 31, 2027 |
$82,272 |
$17,965 |
|
Total Cost |
$308,702 |
$68,302 |
* Holdover period
BACKGROUND INFORMATION
On March 29, 2005 (Item No. 50), the San Bernardino County (County) Board of Supervisors (Board) approved the five-year Lease with Fontana Juniper, LLC for approximately 3,285 square feet of office space located at 4050 Phelan Road Units 1 and 2, in Phelan. The initial term of the Lease covered the periods of April 1, 2005, through March 31, 2020, and included two two-year options. In the 19 years since the Lease was originated, the Board has approved seven amendments, including exercising extension options, adding three two-year options, addressing two property ownership changes, modifying rent terms, and updating standard lease agreement language.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
May 11, 2010 |
68 |
|
2 |
March 13, 2012 |
42 |
|
3 |
October 8, 2013 |
43 |
|
4 |
March 1, 2016 |
47 |
|
5 |
July 24, 2018 |
33 |
|
6 |
January 28, 2020 |
38 |
|
7 |
January 11, 2022 |
31 |
On March 1, 2024, the Lease entered a holdover period for eleven months due to protracted negotiations with the Landlord. The County has continued to occupy the premises abiding by all current Lease terms. Current market survey reports reveal that the rental rate for the extended term is equivalent to predominantly higher range competitive rates in the Phelan area.
RESD consulted with the Sheriff to evaluate the extended term’s rental rates against relocation costs, including potential service disruptions in the downtown Phelan area. The Sheriff desires to proceed with the Lease to provide uninterrupted service and use of approximately 3,285 square feet of office space located at 4050 Phelan Road, in Phelan.
The proposed Lease extension includes a three-year term, commencing on February 1, 2025 through January 31, 2028, with adjusted rental rates and an additional three-year option to extend.
The project to approve the Amendment was reviewed pursuant to the California Environmental Quality Act (CEQA) and was determined to be categorically exempt under CEQA Guidelines Section 15301 - Existing Facilities (Class I) 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: |
WGI, Inc William G. Ingalls, President |
|
|
|
|
Location: |
4050 Phelan Road Units 1 and 2, Phelan |
|
|
|
|
Size: |
3,285 square feet of office space |
|
|
|
|
Term: |
3 years, February 1, 2025 - January 31, 2028 |
|
|
|
|
Options: |
One three-year option to extend |
|
|
|
|
Rent: |
Base Rent Cost per square foot per month: $1.97* full-service gross |
|
|
Monthly: $6,462 |
|
|
Annual: $77,544 |
|
|
*High-range for comparable facilities in the Phelan area per the supporting competitive set analysis on file |
|
|
|
|
Annual Increases: |
3% |
|
|
|
|
Improvement Costs: |
None |
|
|
|
|
Custodial: |
Provided by County |
|
|
|
|
Maintenance: |
Provided by Lessor, County provides maintenance of fire suppression equipment |
|
|
|
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Utilities: |
Provided by County, except for exterior lighting |
|
|
|
|
Insurance: |
The Certificate of Liability Insurance, as required by the lease, is on file with RESD |
|
|
|
|
Holdover: |
Month-to-month basis upon the same provisions of the Lease, including the rent |
|
|
|
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Right to Terminate: |
County has the Right to Terminate with 90-Days’ Notice |
|
|
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Parking: |
Sufficient for County needs |
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs, and Grace Parsons, Deputies County Counsel, 387-5455) on December 19, 2024; San Bernardino County Sheriff's Department (Jose Torres, Administrative Manager, 387-3648) on December 19, 2024; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on December 26, 2024; Finance (Erika Rodarte, 387-4919, and Ivan Ramirez, 387-4020, Administrative Analysts) on January 6, 2025; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on January 6, 2025.
(BR: 531-2674)