REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
October 21, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
ARLENE MOLINA, Director, Preschool Services Department
SUBJECT
Title
Lease Amendment with Upland Unified School District for Classroom, Office, and Playground Space in Upland
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 10 to Lease Agreement No. 00-802 with Upland Unified School District for classroom, office, and playground space is exempt under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 10 to Lease Agreement No. 00-802 with Upland Unified School District dated August 1, 1997, to:
a. Extend the term of the lease three years for the period of November 1, 2025, through October 31, 2028, by exercising one of the County’s remaining three-year options to extend the lease term, leaving one option available, following a permitted month-to-month holdover from February 1, 2025, through October 31, 2025.
b. Adjust the rental rate schedule.
c. Update the termination and standard lease agreement language.
d. Continue leasing approximately 3,840 square feet of classroom and office space, 6,000 square feet of parking lot, and 3,200 square feet of playground areas, located at 732 North 3rd Avenue in Upland, for the Preschool Services Department.
e. Increase the total lease amount by $179,355, inclusive of $26,955 for the holdover period, from $847,818 to $1,027,173.
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.
FINANCIAL IMPACT
Approval of Amendment No. 10 (Amendment) to Lease Agreement No. 00-802 (Lease) will not result in the use of Discretionary General Funding (Net County Cost) as the program is 90% federally funded and 10% state funded. The total Amendment cost, including the permitted holdover period, will be $179,355, of which $26,955 covers the holdover period. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Preschool Services Department (PSD) budget (5911622220). Sufficient appropriation is included in the 2025-26 PSD and RESD budgets and will be included in future recommended budgets. Annual lease costs are as follows:
|
Lease Year |
Annual Lease Cost |
|
February 1, 2025 - October 31, 2025* |
$26,955 |
|
November 1, 2025 - October 31, 2026 |
$49,308 |
|
November 1, 2026 - October 31, 2027 |
$50,784 |
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November 1, 2027 - October 31, 2028 |
$52,308 |
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Total Lease Cost: |
$179,355 |
*Permitted holdover period
BACKGROUND INFORMATION
The recommended action will amend the Lease with Upland Unified School District to extend the term three years for the period of November 1, 2025, through October 31, 2028, following a permitted month-to-month holdover from February 1, 2025, through October 30, 2025, and adjust the rental rate schedule for the use of approximately 3,840 square feet of classroom and office space, 6,000 square feet of parking lot area, and 3,200 square feet of playground area, located at 732 North 3rd Avenue in Upland, because of the continuing need to provide PSD services in the Upland Area.
PSD has occupied the preschool facility located at 732 North 3rd Avenue in Upland since 1997 under the provisions of Lease Agreement No. S98-014, which was originally approved by the Director of RESD and subsequently converted to Lease Agreement No. 00-802. In the 28 years since the Lease was originally approved, RESD and the Board of Supervisors (Board) have approved nine amendments to extend the term through January 31, 2025, increase the parking lot area from 3,000 to 6,000 square feet, and update standard lease agreement language.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
March 30, 1999 |
N/A |
|
2 |
July 11, 2000 |
48 |
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3 |
June 3, 2003 |
72 |
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4 |
August 17, 2004 |
48 |
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5 |
June 5, 2007 |
63 |
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6 |
July 13, 2010 |
60 |
|
7 |
June 25, 2013 |
84 |
|
8 |
July 25, 2017 |
37 |
|
9 |
January 10, 2023 |
41 |
On June 26, 2025, PSD notified RESD of its desire to extend the term and requested that RESD process this Amendment for the extension and negotiate the rental rate for the extended term. RESD conducted a market survey and determined that the lease rate at the time of renewal was below the market rate.
Prior to negotiations regarding the rental rate for the extension, the Lease went into holdover status as of February 1, 2025. PSD continued to occupy the premises and abide by the provisions of the Lease on a month-to-month basis while it was decided whether to remain in this location. This Amendment provides for continued use by PSD for the period of November 1, 2025, through October 31, 2028, following a permitted holdover period from February 1, 2025, through October 31, 2025. All other terms and conditions of the Lease remain unchanged.
RESD, acting in its approved capacity as the County Administrative Office 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 three-year extended term, to be competitive. The site meets the current requirements of PSD and, if the extension is approved by the Board, would minimize disruption to PSD operations and save moving costs.
RESD staff reviewed the recommended action pursuant to the California Environmental Quality Act and determined that it is 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.
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Summary of Lease Terms |
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Lessor: |
Upland Unified School District |
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Location: |
732 North 3rd Avenue, Upland |
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Size: |
3,840 square feet of classroom/office space, 6,000 square feet of parking lot area, and 3,200 square feet of playground area |
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Term: |
November 1, 2025 through October 31, 2028 |
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Options: |
One three-year option remains |
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Rent: |
Cost per square foot per month: $1.07 |
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Monthly: $4,109 |
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Annual: $49,306 |
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*Low range for comparable facilities in the Upland area per the competitive set analysis on file with RESD |
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Annual Increases: |
3% |
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Improvement Costs: |
None |
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Custodial: |
Provided by County |
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Maintenance: |
To be provided by Lessor except County provides minor interior maintenance, routine maintenance of the grounds, landscaping, parking area, and playground |
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Utilities: |
County pays 10% of all utility costs |
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Insurance: |
The Certificate of Liability Insurance, as required by the 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 a month-to-month term upon the same terms and conditions which existed at the time of expiration |
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Right to Terminate: |
Either party may terminate with 120 days’ notice beginning November 1, 2026 |
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Parking: |
Sufficient for County’s needs |
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Sophie Curtis, Deputies County Counsel, 387-5455) on September 11, 2025; Preschool Services (Arlene Molina, Director, 383-2028) on September 12, 2025; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on September 19, 2025; and County Finance and Administration (Allegra Pajot, 388-0218, and Eduardo Mora, 387-4376, Administrative Analysts) on October 3, 2025.
(JF: 269-1984)