REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
December 17, 2024
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
ARLENE MOLINA, Interim Director, Preschool Services Department
SUBJECT
Title
Amendment to Lease Agreement with IV3 662-696 S Tippecanoe Ave, LLC for Office Space in San Bernardino
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 6 to Lease Agreement No. 06-1152 with IV3 662-696 S Tippecanoe Ave, LLC, for approximately 18,000 square feet of office space at 662 South Tippecanoe Avenue in San Bernardino is an exempt project under the California Environmental Quality Act Guidelines Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 6 to Lease Agreement No. 06-1152 with IV3 662-696 S Tippecanoe Ave, LLC to exercise the final option and extend the term by three years, from January 1, 2025, through December 31, 2027, for approximately 18,000 square feet of office space at 662 South Tippecanoe Avenue in San Bernardino, for the Preschool Services Department, increasing the amount by $1,574,640, from $7,104,552 for a total of $8,679,192.
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 this item will not result in the use of Discretionary General Funding (Net County Cost). The total cost of Amendment No. 6 (Amendment) to Lease Agreement No. 06-1152 (Lease) of $1,574,640, is 84% federally funded and 16% state funded. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Preschool Services Department (PSD) budget (5910002220). Sufficient appropriation and revenue are included in the 2024-25 RESD Rents and PSD budgets and will be included in future recommended budgets.
|
Year |
Annual Lease Cost |
|
January 1, 2025 - December 31, 2025 |
$509,760 |
|
January 1, 2026 - December 31, 2026 |
$524,880 |
|
January 1, 2027 - December 31, 2027 |
$540,000 |
|
Total Cost |
$1,574,640 |
BACKGROUND INFORMATION
The recommended action will amend the Lease with IV3 662-696 S Tippecanoe Ave, LLC (IV3) to extend the term three years, exercising the final three-year option to extend the term, and will update standard lease agreement language for approximately 18,000 square feet of office space located at 662 South Tippecanoe Avenue in San Bernardino to provide for the continuing administration of PSD.
On November 28, 2006 (Item No. 21), the Board of Supervisors (Board) approved the Lease, with three, three-year options to extend the term with Perris Campus Plaza, LLC for approximately 18,000 square feet of office space located at 662 South Tippecanoe Avenue in San Bernardino. The original term was for the period of June 1, 2007, through May 31, 2017. In the 18 years since the Lease was originally approved, the Board has approved five amendments, which extended the term of the Lease through December 31, 2024, adjusted the monthly rental rate schedule, adjusted the commencement and expiration dates of the Lease, adjusted the critical completion date of the building, reflected a change of property ownership, exercised two of the three three-year options to extend the term, and updated standard lease agreement language.
|
Amendment No. |
Approval Date |
Item No. |
Contract Total |
|
Original |
November 28, 2006 |
21 |
*$4,120,872 |
|
1 |
August 21, 2007 |
32 |
N/A |
|
2 |
October 7, 2008 |
51 |
N/A |
|
3 |
July 24, 2018 |
34 |
$1,334,880 |
|
4 |
December 14, 2021 |
54 |
$1,648,800 |
|
5 |
August 9, 2022 |
43 |
N/A |
|
Total |
|
|
$7,104,552 |
|
*Includes holdover rent |
|
|
On May 13, 2024, RESD informed IV3 of the County's desire to exercise the last three-year option extending the Lease term through December 31, 2027.
Staff has reviewed the recommended action pursuant to the California Environmental Quality Act (CEQA) and has determined that it does not constitute a project. Accordingly, no further action is required under CEQA.
|
Summary of Lease Terms |
|
|
Lessor: |
IV3 662-696 S Tippecanoe Ave, LLC Joonas Partanen, Senior Vice President |
|
|
|
|
Location: |
662 South Tippecanoe Avenue in San Bernardino |
|
|
|
|
Size: |
Approximately 18,000 square feet of office space |
|
|
|
|
Term: |
Three years commencing January 1, 2025 |
|
|
|
|
Options: |
None |
|
|
|
|
Rent: |
Cost per square foot per month: $2.36* |
|
|
Monthly: $42,480 |
|
|
Annual: $509,760 |
|
|
*Mid-range for comparable facilities in the San Bernardino area per the competitive set analysis on file with RESD |
|
|
|
|
Annual Increases: |
3% |
|
|
|
|
Improvement Costs: |
None |
|
|
|
|
Custodial: |
Provided by Lessor |
|
|
|
|
Maintenance: |
Provided by Lessor |
|
|
|
|
Utilities: |
Provided by Lessor |
|
|
|
|
Insurance: |
The Certificate of Liability Insurance, as required by the Lease, is on file with RESD |
|
|
|
|
Holdover: |
None |
|
|
|
|
Right to Terminate: |
County has the right to terminate with 90-days’ notice |
|
|
|
|
Parking: |
Provided by the Lessor and must be sufficient to meet the County’s needs |
PROCUREMENT
N/A
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Adam Ebright, Deputies County Counsel, 387-5455) on November 20, 2024; Preschool Services (Arlene Molina, Interim Director, 383-2028) on November 20, 2024; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on November 18, 2024; Finance (Paul Garcia, 386-8392, and Garrett Baker, 387-3077, Administrative Analysts,) on November 25, 2024; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on November 25, 2024.
(KB:453-9865)