San Bernardino County - File #: 13813

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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

JOSH DUGAS, Acting Director, Department of Behavioral Health

SUBJECT

Title

Amendment to Lease Agreement with CommStar5, LP for Office Space in Apple Valley

End

RECOMMENDATION(S)

Recommendation

1. Find that approval of Amendment No. 6 to Lease Agreement No. 19-187 with CommStar5, LP for office space, 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. 19-187 with CommStar5, LP to:

a. Modify the rental rate structure.

b. Update standard lease agreement language as set forth in the Amendment.

c. Establish a revised rent structure commencing April 8, 2026.

d. With no change to the total previously approved contract amount of $18,599.27.

e. With no change to the remaining lease term of April 8, 2026 through February 7, 2038.

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 this item will not result in the use of Discretionary General Funding (Net County Cost).

Amendment No. 6 (Amendment) to Lease Agreement No. 19-187 (Lease) restructures the rental rate schedule effective April 8, 2026, and does not increase the total lease amount of $18,599,27 that was previously approved by the Board under Amendment No. 5. The Amendment does not extend the Lease term and does not add any new financial obligation to the County.

The revised rent structure adjusts the timing and allocation of rental payments within the existing lease term, resulting in no net increase to the total lease cost through February 7, 2038. Payments under the Lease will continue to be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed by the Department of Behavioral Health’s (DBH) budget (9200002200), which is funded by Federal Financial Participation Medi-Cal, Mental Health Services Act, and Realignment funds. Sufficient appropriation and revenue are included in the 2025-26 RESD Rents and DBH budgets and will be included in future recommended budgets.

A comparison of the remaining-term totals confirms that Amendment No. 6 does not increase the previously approved lease amount. The remaining-term total under Amendment No. 5 for April 8, 2026 through February 7, 2038, is $15,016,067, which is the same remaining-term total reflected under Amendment No. 6. The Amendment only restructures the timing of rental payments within the existing lease term.

Annual lease costs for the remainder of the term are as follows:

Period	Annual Rent	Annual Amortized Improvement Payments	Annual Utility Cost	Total Annual Rent
April 8, 2026 - June 7, 2026	$152,368	$29,722	$12,616	$194,706
June 8, 2026 - February 7, 2027	$631,689	$118,888	$63,080	$813,657
February 8, 2027 - February 7, 2028	$970,274	$178,332	$77,210	$1,225,816
February 8, 2028 - February 7, 2029	$992,978	$178,332	$78,754	$1,250,064
February 8, 2029 - February 7, 2030	$1,016,114	$178,332	$80,329	$1,274,775
February 8, 2030 - February 7, 2031	$1,039,790	$178,332	$81,936	$1,300,058
February 8, 2031 - February 7, 2032	$1,064,017	$178,332	$83,575	$1,325,924
February 8, 2032 - February 7, 2033	$1,088,490	$178,332	$85,246	$1,352,068
February 8, 2033 - February 7, 2034	$1,113,525	$0	$86,951	$1,200,476
February 8, 2034 - February 7, 2035	$1,139,136	$0	$88,690	$1,227,826
February 8, 2035 - February 7, 2036	$1,165,336	$0	$90,464	$1,255,800
February 8, 2036 - February 7, 2037	$1,190,973	$0	$92,273	$1,283,246
February 8, 2037 - February 7, 2038	$1,217,532	$0	$94,119	$1,311,651
Total Cost:	$12,782,222	$1,218,602	$1,015,243	$15,016,067

BACKGROUND INFORMATION

The County occupies approximately 27,019 square feet of office space, including 124 parking spaces, at 18818 Highway 18 in Apple Valley, California (Premises), under the Lease with CommStar5, LP (Landlord). The Premises supports ongoing operations of DBH and serve a critical service area within the High Desert region.

The existing term is scheduled to expire on February 7, 2038. The Landlord approached the County to discuss a restructuring of the rental rate schedule in connection with refinancing efforts and long-term asset planning. Following negotiations, the parties agreed to revise the timing of rental payments within the existing lease term. The restructuring is financially neutral to the County, as it does not increase the total lease amount previously approved by the Board and does not modify the lease term. The revised schedule reallocates rent payments during the remaining term and provides more level and predictable annual increases, resulting in a more stable annual rent progression while maintaining the same total lease obligation.

Since approval by the Board of Supervisors (Board), five Amendments have been approved to address changes in project timing, ownership, and construction-related matters. Amendment No. 2 was executed by the Director of RESD under delegated authority.

Amendment No.	Board Date	Item No.
1	October 27, 2020	78
2	January 22, 2021	-
3	August 10, 2021	30
4	July 26, 2022	45
5	May 23, 2023	77

Amendment No. 6 modifies only the rental rate schedule and updates certain standard lease language. The Amendment includes a transitional rental period from April 8, 2026 through June 7, 2026, to apply a discounted rental amount during implementation of the revised rent schedule, ensuring continuity in the rental structure and preventing an unintended increase in lease costs. Beginning June 8, 2026, the revised rental schedule will apply throughout the remainder of the Lease term. The Amendment does not extend the Lease term, does not increase the total Lease amount, and does not add any new financial obligation beyond what has already been authorized by the Board. All other terms and conditions of the Lease remain unchanged.

Approval of this Amendment ensures continuity of services at the existing location and provides a fiscally responsible adjustment to the rent structure without increasing the overall Lease cost.

The project to approve the Amendment was reviewed pursuant to the California Environmental Quality Act (CEQA) and is an exempt project under CEQA Guidelines, Section 15301 - Existing Facilities (Class 1). Class 1 consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. The proposed Amendment is to secure property to operate within the existing structure with negligible or no expansion of existing use.

On March 19, 2019 (Item No. 33), the Board approved Lease Agreement No. 19-187 for 10 years, which was procured in accordance with County Policy 12-02 - Procuring Privately Owned Real Property for County Use (Policy) using an alternative procedure. The procurement process required by the Policy does not apply to amendments of existing leases, provided the amendment does not exceed the maximum term (including options) of the lease.

Summary of Lease Terms
Lessor:	CommStar5, L.P., a California Limited Partnership Stanley Huang, General Partner

Location:	18818 Highway 18, Apple Valley, CA 92307

Size:	Approximately 27,019 square feet of office space

Term:	Remaining term April 8, 2026 through February 7, 2038

Options:	One five-year option to extend

Rent:	Rent per square foot per month: $2.92* full-service gross
	Monthly: $93,822
	Annual: $1,125,864
	*High-range for comparable facilities in the Apple Valley area per the competitive set analysis on file with RESD (Base Rent $2.92 + $0.55 tenant improvements)

Annual Increases:	Varies by Lease year; annual increases range from approximately 2.2% to 2.4% from April 8, 2026 through February 7, 2038

Improvement Costs:	Amortized monthly payments of $14,861 through February 7, 2033, are included in annual Lease costs

Custodial:	Provided by Landlord

Maintenance:	Provided by Landlord, except County reimbursement of certain maintenance and repairs expenses incurred by the Landlord resulting from the intentional misconduct of County or its invitees

Utilities:	Provided by County, County to pay electrical costs up to $75,696 per year or approximately $0.23 per square foot per month (electric utility expense cap), which cap is increased 2% annually

Insurance:	The Certificate of Liability Insurance, as required by the Lease, is on file with RESD

Holdover:	Upon the end of the term, if permitted by landlord, tenant shall continue on month-to-month term upon the same terms and conditions, including rent, as existed at the time of the expiration of the term of this Lease

Parking:	Exclusive use of 124 parking spaces

PROCUREMENT

Not applicable.

REVIEW BY OTHERS

This item has been reviewed by County Counsel (John Tubbs II, Deputy County Counsel, and Charles Phan, Supervising County Counsel, 387-5455) on March 3, 2026; Behavioral Health (Lydia Bell, Administrative Manager, 658-1053) on February 10, 2026; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on February 5, 2026; and County Finance and Administration (Iliana Rodriguez, 386-8392, and Eduardo Mora, 387-4376, Administrative Analysts) on March 10, 2026.

(JAG: 677-8210)