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
GEORGINA YOSHIOKA, Director, Department of Behavioral Health
SUBJECT
Title
Amendment to Lease Agreement with 1330 Cooley Drive, LLC, for Office Space in Colton
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 6 to Lease Agreement No. 02-159 with 1330 Cooley Drive, LLC, for office space, is exempt under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 6 to Lease Agreement No. 02-159 with 1330 Cooley Drive, LLC, through the use of an alternative procedure as allowed per County Policy 12-02 - Leasing Privately Owned Real Property for County Use, to:
a. Extend the term of the lease for five years, for the period of November 1, 2025, through October 31, 2030, following a permitted holdover period from August 1, 2023, through October 31, 2025.
b. Provide for turnkey tenant improvements by Landlord at no cost to the County.
c. Add two five-year options to extend the lease.
d. Adjust the rental rate schedule and update standard lease agreement language.
e. Continue leasing approximately 14,565 square feet of office space, located at 1330 E. Cooley Drive in Colton, for the Department of Behavioral Health.
f. Increase the total lease amount by $2,847,326, from $5,866,288 to a new total amount of $8,713,614, inclusive of $805,898 for the permitted holdover period.
g. Authorize the Purchasing Agent to issue purchase orders, as necessary, for a total amount not to exceed $50,000, for any minor change orders that may arise for any County requested modifications or additions to the turnkey tenant improvements set forth in Amendment No. 6 to Lease Agreement No. 02-159 (Four votes required).
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 Amendment No. 6 (Amendment) to Lease Agreement No. 02-159 (Lease) will not result in the use of Discretionary General Funding (Net County Cost). The total cost of the Amendment is funded by 1991 Realignment, Federal Financial Participation Medi-Cal, and Mental Health Services Act funds. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Department of Behavioral Health (DBH) budget (9200001000). Sufficient appropriation is included in the 2025-26 budget and will be included in future recommended budgets. Annual lease costs are as follows:
|
Lease Year |
Lease Cost |
|
*August 1, 2023 - October 31, 2025 |
$805,898 |
|
November 1, 2025 - October 31, 2026 |
$384,516 |
|
November 1, 2026 - October 31, 2027 |
$396,048 |
|
November 1, 2027 - October 31, 2028 |
$407,928 |
|
November 1, 2028 - October 31, 2029 |
$420,168 |
|
November 1, 2029 - October 31, 2030 |
$432,768 |
|
Total Cost: |
$2,847,326 |
*Holdover Period
BACKGROUND INFORMATION
The original term of the lease was for the period of July 1, 2002, through June 30, 2009. In the 23 years since the Lease was originally approved, the Board has approved five amendments that changed the commencement date, increased square footage, added options to extend, adjusted lease rates, and updated standard lease agreement language.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
July 9, 2002 |
39 |
|
2 |
September 22, 2009 |
35 |
|
3 |
November 6, 2012 |
57 |
|
4 |
June 14, 2016 |
103 |
|
5 |
July 28, 2020 |
52 |
DBH requested that RESD negotiate an amendment to extend the existing term, which expired on July 31, 2023. Approval of this Amendment was delayed due to continued negotiations concerning the terms and possible tenant improvements to be performed by the Landlord. On August 1, 2023, the Lease went into a permitted holdover and DBH continued to occupy the Premises and abide by its terms.
The Amendment will extend the term for the period of November 1, 2025, through October 31, 2030, following a permitted holdover period from August 1, 2023, through October 31, 2025, for the Premises, provide for turn key tenant improvements by the Landlord at no cost to the County, adjust the rental rate schedule, add two five-year options to extend the term, and update standard lease agreement language. All other terms of the Lease remain unchanged. Pursuant to Lease provisions regarding any County modifications or additions to the Landlord’s Improvements, in order to timely compete the Improvements without undue delay, RESD requests, on behalf of DBH, that the Board authorize the Purchasing Agent to issue purchase orders, as necessary, for a total amount not to exceed $50,000 for any minor change orders that may arise for any County requested modifications or additions to the turnkey tenant improvements set forth in the Lease. Any proposed change orders that cumulatively exceed $50,000 shall be processed by a formal amendment to the Lease approved by the Board. Public Contract Code 20137 requires four votes by the Board to authorize changes or alterations to a contract where the cost of such change does not exceed 10% of the original contract price but does exceed the amount specified in Public Contract Code sections 20121 ($4,000) and 21031 ($25,000). All change orders and/or contingencies will be approved by RESD prior to authorizing any work or payment(s) to the Landlord.
The project to approve the Amendment was reviewed pursuant to the California Environmental Quality Act (CEQA) and determined to be categorically 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: |
1330 Cooley Drive, LLC Jian Torkan, President |
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Location: |
1330 E. Cooley Drive, Colton |
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Size: |
Approximately 14,565 square feet of office space |
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Term: |
Five years commencing November 1, 2025, through October 31, 2030 |
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Options: |
Add two five-year options |
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Rent: |
Cost per square foot per month: $2.20 |
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Monthly: $32,043 |
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Annual: $384,516 |
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*Mid-range for comparable facilities in the Colton area per the competitive set analysis on file with RESD |
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Annual Increases: |
Approximately 3% |
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Improvement Costs: |
Landlord, at its sole cost, will complete specified improvements (carpet, paint, ceiling tiles, landscaping, patio furniture) by April 30, 2026, per Exhibit A-1 of the Amendment; no County costs are associated with these improvements |
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Custodial: |
Provided by Lessor |
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Maintenance: |
Provided by Lessor |
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Utilities: |
Provided by Lessor with County to pay for electricity in excess of an electric utility expense cap of $0.26 per square foot per month subject to 3% annual increases |
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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: |
Month-to-month term upon the same terms and conditions, including the rent which existed at the time of expiration |
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Right to Terminate: |
The County may terminate for default but has no right to terminate the Lease for convenience during the five-year term; County 90 Days’ Notice Termination Rights resume beginning November 1, 2030 |
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Parking: |
Sufficient for County needs |
PROCUREMENT
Policy 12-02 requires a thorough and detailed review by the County Administrative Office (CAO), or designee, to validate the need for and provide a competitive analysis of any lease with a term of more than 20 years. Approval of the Amendment will yield an aggregate term of 28 years, and a potential aggregate term of 38 years, if the remaining extension options are exercised.
RESD, acting in its approved capacity as the CAO 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 five-year extended term, to be competitive. The site best meets the long-term requirements of DBH, minimizes disruption to DBH operations, and saves on relocation costs.
Policy 12-02 provides that the Board may approve the use of an alternative procedure to the use 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 Dawn Martin, Deputies County Counsel, 387-5455) on September 25, 2025; Behavioral Health (Lydia Bell, Administrative Manager, 658-1053) on September 23, 2025; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on September 19, 2025; and County Finance and Administration (Paul Garcia, 386-8392, and Eduardo Mora, 387-4376, Administrative Analysts) on October 2, 2025.
(JF: 269-1984)