REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
March 24, 2026
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
JANKI PATEL, Acting Director, Department of Public Health
SUBJECT
Title
Amendment to Lease Agreement with Bailey Ave LLC for Clinic Space in Needles
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 9 to Lease Agreement No.95-1020 with Bailey Ave LLC, for approximately 1,620 square feet of office space, is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 9 to Lease Agreement No. 95-1020, through the use of an alternative procedure as allowed per County Policy 12-02 - Leasing Privately Owned Real Property for County Use, to:
a. Reflect a change of property ownership from Richardson Investment Limited Partnership, to Bailey Ave LLC, for property located at 1406 Bailey Avenue, Suite D, in Needles.
b. Extend the term of the Lease Agreement for the period of April 1, 2026 through March 31, 2029, for approximately 1,620 square feet of office space for the Department of Public Health, located at 1406 Bailey Avenue, Suite D, in Needles, based on the County’s exercise of the existing three-year option to extend the lease, following a permitted month -to-month holdover for the period of January 1, 2026 through March 31, 2026.
c. Adjust the Rental Rate schedule for the three-year term, resulting in a total cost of $71,478.
d. Increase the total lease amount by $71,478, from $473,415 to a new total amount of $544,893.
e. Add one additional three-year option to extend the term.
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
Promote and Fulfill the Countywide Vision
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. 9 (Amendment) to Lease Agreement No. 95-1020 (Lease) is $71,478, which includes a holdover cost in the amount of $5,298 for the permitted month-to-month holdover period from January 1, 2026 through March 31, 2026. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Department of Public Health (DPH) budget (1003638). Other costs associated with this Lease include interior maintenance, and custodial and utility expenses, which will be paid directly from the DPH budget. Sufficient appropriation is included in the 2025-2026 Rents and DPH budgets and will be included in future recommended budgets. Annual Lease costs are as follows:
|
Year |
Annual Rent |
Estimate of Other Costs Associated With This Lease |
|
*January 1, 2026 - March 31, 2026 |
$5,298 |
$3,237 |
|
April 1, 2026 - March 31, 2027 |
$21,624 |
$13,208 |
|
April 1, 2027 - March 31, 2028 |
$22,056 |
$13,472 |
|
April 1, 2028 - March 31, 2029 |
$22,500 |
$13,741 |
|
Total Cost: |
$71,478 |
$43,658 |
*Permitted holdover period
BACKGROUND INFORMATION
On November 28, 1995 (Item No. 28), the County entered into a Lease with Richardson Investment Limited Partnership (Prior Landlord). Since the original approval, the Board has approved eight amendments to extend the lease term, adjust the rental rate schedule, and update standard lease agreement language. Under the Lease, the Landlord leases to the County certain premises located at 1406 Bailey Avenue, Suite D, in Needles (Premises), for a term that expired on December 31, 2025.
|
Amendment No. |
Board Date |
Item No. |
|
1 |
October 3, 2000 |
46 |
|
2 |
December 3, 2002 |
57 |
|
3 |
December 6, 2005 |
40 |
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4 |
November 18, 2008 |
52 |
|
5 |
November 1, 2011 |
36 |
|
6 |
December 17, 2013 |
60 |
|
7 |
December 15, 2015 |
47 |
|
8 |
January 1, 2021 |
35 |
The Lease entered a permitted month-to-month holdover beginning January 1, 2026, due to timing associated with negotiations and administrative processing. Continued occupancy was necessary to avoid disruption of critical public health clinic services in Needles. The holdover period was at the same rental rate and terms as the prior lease period. RESD notified DPH that the Lease would need to be renewed to avoid a month-to-month term. RESD conducted a market survey of comparable properties in the Needles area and determined the proposed rental rate of $1.11 per square foot per month is consistent with current market conditions in Needles and surrounding areas. DPH has requested that RESD negotiate a lease amendment to extend the Lease for an additional three-year term.
Approval of this Amendment is recommended for a fixed term of April 1, 2026 through March 31, 2029, following a permitted holdover from January 1, 2026 to March 31, 2026, with the Landlord for 1,620 square feet of office space. This Amendment also reflects the change of ownership from Richardson Investment Limited Partnership to Bailey Ave LLC and updates the relevant Lease provisions accordingly.
The project to approve the Amendment was reviewed pursuant to the California Environmental Quality Act (CEQA) and determined to be categorically exempt under CEQA Guidelines Section 15301 - Existing Facilities (Class 1), because the approval of an amendment to a lease agreement for an existing facility is an exempt activity under CEQA. There is no possibility that the leasing of the subject property will have a significant effect on the environment; therefore, the activity is not subject to the provisions of CEQA.
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Summary of Lease Terms |
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Lessor: |
Bailey Ave LLC |
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Location: |
1406 Bailey Avenue, Suite D, Needles |
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Size: |
Approximately 1,620 square feet of office space |
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Term: |
Three years commencing April 1, 2026 |
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Options: |
One three-year Option |
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Rent: |
Cost per square foot per month $1.11 Monthly: $1,802 Annual: $21,624 *Mid-range for comparable facilities in the Needles area per the competitive set analysis on file with RESD |
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Annual Increases: |
Approximately 2% |
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Improvement Costs: |
N/A |
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Custodial: |
Provided by County |
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Maintenance: |
Exterior maintenance provided by Lessor, interior maintenance provided by County |
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Utilities: |
Provided by County |
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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 expiration of the term, and if permitted by Lessor, the Lease shall continue on a month to month basis under the same terms and conditions, 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
Policy 12-02 provides that the Board may approve the use of an alternative procedure in lieu of a Formal Request for Proposal (RFP) process whenever the Board determines that compliance with the Formal RFP requirements would unreasonably interfere with the financial or programmatic needs of the County, or when the use of an alternative procedure would otherwise be in the best interest of the County.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II and Adam Ebright, Deputies County Counsel, 387-5455) on March 5, 2026; Public Health (Janki Patel, Acting Director, 387-9146) on February 24, 2026 ; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on February 12, 2026; and County Finance and Administration (Iliana Rodriguez, 387-4205, and Eduardo Mora, 387-4376, Administrative Analysts) on March 9, 2026.
(PHL: 665-4890)