REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
June 22, 2021
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
PHALOS HAIRE, Director, Preschool Services Department
SUBJECT
Title v
Amendment No. 8 to Lease Agreement with Celeste Lajoinie for Land for Playground Area, Bus Drop-Off and Parking for the Preschool Services Department in Apple Valley
End
RECOMMENDATION(S)
Recommendation
1. Approve the Real Estate Services Department’s use of an alternative procedure in lieu of a formal Request for Proposals as allowed per County Policy 12-02 - Leasing Privately Owned Real Property for County Use, to add one three-year option to extend the term of the lease for Lease Agreement No. 00-269 with Celeste Lajoinie, a single woman, (for an aggregate term of 32 years if the extension option is exercised) at 13575-13579 Navajo Road in Apple Valley for the Preschool Services Department.
2. Approve Amendment No. 8 to Lease Agreement No. 00-269 with Celeste Lajoinie, a single woman, to extend the term of the lease three years by exercising an existing extension option, for the period of July 1, 2021 through June 30, 2024, following a permitted holding over for the period of April 15, 2021 through June 30, 2021, add one three-year option to extend the term of the lease (for an aggregate term of 32 years if the extension option is exercised), adjust the rental rate schedule, and update standard lease agreement language for 38,870 square feet of land for a playground area, bus drop-off site, and auxiliary parking at 13575-13579 Navajo Street in Apple Valley for the Preschool Services Department in the amount of $165,312.
(Presenter: Terry W. Thompson, Director, 387-5000)
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COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Pursue County Goals and Objectives by Working with Other Agencies.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost) as Preschool Services Department’s (PSD) lease costs are 90% federally funded and 10% state funded. The total cost of this three-year amendment is $165,312. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the PSD budget (5911402220). Other costs associated with this lease include site maintenance of the playground area, bus drop-off site, and the auxiliary parking, which will be paid from the PSD budget. Sufficient appropriation and revenue are included in the 2021-22 Recommended Budget and will be included in future recommended budgets. Annual lease costs are as follows:
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Period |
Lease Cost |
Estimate of Other Costs Associated With This Lease |
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*April 15, 2021 - June 30, 2021 |
$ 10,066 |
$ 3,534 |
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July 1, 2021 - June 30, 2022 |
$ 49,733 |
$17,374 |
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July 1, 2022 -June 30, 2023 |
$ 51,722 |
$17,982 |
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July 1, 2023 -June 30, 2024 |
$ 53,791 |
$18,611 |
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Total Cost: |
$165,312 |
$57,501 |
*These costs are associated with the permitted hold over period that occurred in 2020-21.
BACKGROUND INFORMATION
The recommended action will amend an existing lease with Celeste Lajoinie, a single woman, by extending the term of the lease three years by exercising an existing extension option, for the period of July 1, 2021 through June 30, 2024 following a permitted holding over for the period of April 15, 2021 through June 30, 2021. This amendment will add one three-year option to extend the term of the lease (for an aggregate term of 32 years if the extension option is exercised), adjust rental rate schedule, and update standard lease agreement language because of the need for PSD to provide playground, bus drop-off and parking areas for PSD’s Head Start program. This program is operated from an adjacent building located at 13589 Navajo Road, which is leased by the County under the provisions of Lease Agreement No. 98-691 with Ashok Talwar and Kay Talwar, Co-Trustees of the Talwar Trust dated June 29, 1989.
PSD has leased land for a playground area, bus drop-off site, and auxiliary parking area since 1995, under lease agreement, Contract No. S-95-029, executed by the Director of RESD on March 8, 1995. The original term of the lease was for the period of March 8, 1995 through October 14, 1996. The Director of RESD extended term of the lease by exercise of an option through October 13, 1999.
On May 9, 2000 (Item No. 40), the Board of Supervisors (Board) approved an amendment to further extend the term from October 14, 1999 through April 14, 2001 and the agreement was re-named Lease Agreement No. 00-269. In the 21 years since the Board approved the lease, the Board has approved seven amendments to extend the term of the lease, modify the rent, add additional option periods, reflect the change of ownership and provide updates to various lease provisions.
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Amendment No. |
Approval Date |
Item No. |
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1 |
November 6, 2001 |
49 |
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2 |
April 30, 2002 |
45 |
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3 |
November 20, 2007 |
40 |
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4 |
February 14, 2012 |
34 |
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5 |
May 8, 2012 |
32 |
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6 |
October 20, 2015 |
50 |
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7 |
April 3, 2018 |
33 |
PSD requested RESD prepare an amendment to exercise the last three-year option to extend the term of the lease for the period of July 1, 2021 through June 30, 2024, following a permitted holding over period, during which the landlord and County have continued to abide by the provisions of the lease, to add a new three-year option period, adjust the rent schedule, and update standard lease agreement language.
Amendment No. 8 to Lease Agreement No. 00-269 extends the term of the lease three years by exercising an existing extension option, for the period of July 1, 2021 through June 30, 2024 following a permitted holding over for the period of April 15, 2021 through June 30, 2021, adds one three-year option to extend the term of the lease, adjusts the rental rate schedule, and updates standard lease agreement language. All other terms and conditions of the lease remain unchanged.
Staff has reviewed the recommended action pursuant to the California Environmental Quality Act (CEQA) and has determined that it does not constitute a project under CEQA. Accordingly, no further action is required under CEQA.
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Summary of Lease Terms |
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Lessor: |
Celeste Lajoinie, a Single Woman, Owner |
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Location: |
13575-13579 Navajo Street in Apple Valley |
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Size: |
38,870 square feet of land for playground, bus drop-off and parking areas |
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Term: |
Three years commencing July 1, 2021, following a permitted holding over for the period of April 15, 2021 through June 30, 2021 |
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Options: |
One three-year option |
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Rent: |
Cost per sq. ft. per month: $0.11* modified gross |
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Monthly: $4,144.40 |
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Annual: $49,733 |
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*Low-range for comparable facilities in the Apple Valley area per the competitive set analysis on file with RESD |
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Annual Increases: |
4% |
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Improvement Costs: |
None |
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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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Right to Terminate: |
County has the right to terminate with 90-days’ notice only if there is a reduction of at least 10% in funding from the Federal Administration for Children and Family or the State Department of Education that is used to fund the lease or the programs/activities performed on the Premises |
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Parking: |
Sufficient for County needs |
PROCUREMENT
On May 9, 2000 (Item No. 40), the Board approved Lease Agreement No. 00-269, which was procured using an alternative process in accordance with County Policy 12-02 - Leasing Privately Owned Real Property for County Use (Policy). The procurement process required by the Policy does not apply to the three-year extension of the term of the lease due to the exercise of an existing extension option. Policy 12-02 provides that the Board may approve the use of an alternative procedure in lieu of a formal Request for Proposals (RFP) process to add one three- year option to extend the term of the lease 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.
Policy 12-02 also 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 Amendment No. 8 to the lease will yield an aggregate term of 29 years, and a potential aggregate term of 32 years if the extension option is 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 three-year extended term, to be competitive. The site best meets the needs the long-term requirements of the department for space for playground, bus drop-off and parking areas because it is located adjacent to the leased building for preschool operations, which would minimize disruption to preschool operations, and save on moving costs.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Agnes Cheng, Deputy County Counsel and Adam Ebright, Deputy County Counsel, 387-5455) on May 27, 2021; Preschool Services Department (Phalos Haire, Director, 383-2005) on May 16, 2021; Purchasing Department (Bruce Cole, Supervising Buyer, 387-2148) on May 19, 2021; Finance (Paul Garcia, Administrative Analyst, 386-8392 and Carl Lofton, Administrative Analyst, 387-5404) on June 7, 2021; and County Finance and Administration (Matthew Erickson, County Chief Financial Officer, 387-5423) on June 7, 2021.
(LB: 909-453-5227)