REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
May 6, 2025
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
AMY COUGHLIN, Director, Department of Child Support Services
SUBJECT
Title
Amendment to Lease Agreement with Yi Feng Investments, LLC for Office Space in Victorville
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 6 to Lease Agreement No. 02-963 with Yi Feng Investments, LLC 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. 02-963 with Yi Feng Investments, LLC, to extend the term of the lease by five years, for the period of June 1, 2025, through May 31, 2030, by exercising an existing option to extend, following a permitted 13-month holdover beginning May 1, 2024, through May 31, 2025, and update standard lease agreement language, for an approximately 26,947 square foot office building located at 15400 Civic Drive in Victorville, for the Department of Child Support Services, increasing the total lease amount by $4,521,019 which includes a 13-month holdover amount of $795,600, for a new total agreement amount of $17,636,056.
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. 02-963 (Lease) is $4,521,019. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Department of Child Support Services (DCSS) budget (4521101000). This program is funded with 66% federal and 34% state funding. Sufficient appropriation is included in the 2024-25 RESD Rents and DCSS budgets and will be included in future recommended budgets. Annual lease costs are as follows:
|
Year |
Lease Cost |
|
*May 1, 2024 - May 31, 2025 |
$795,600 |
|
June 1, 2025 - May 31, 2026 |
$701,700 |
|
June 1, 2026 - May 31, 2027 |
$722,751 |
|
June 1, 2027 - May 31, 2028 |
$744,433 |
|
June 1, 2028 - May 31, 2029 |
$766,766 |
|
June 1, 2029 - May 31, 2030 |
$789,769 |
|
Total Cost |
$4,521,019 |
*Holdover period
BACKGROUND INFORMATION
This Amendment exercises the option to extend the Lease by an additional five years, from June 1, 2025, through May 31, 2030, following a permitted 13-month holdover from May 1, 2024, to May 31, 2025. The total rent payable during the holdover period shall not exceed $795,600. The Lease extension is executed under the County’s existing extension option and maintains the same terms and conditions, except for the monthly rent, which will be adjusted to market rates.
The Department of Child Support Services (DCSS) is dedicated to enhancing the well-being of children by ensuring they receive financial and medical support from both parents. DCSS’ mission encompasses determining parentage, establishing and enforcing child support orders, and securing payments to assist families in meeting their children’s needs.
On September 24, 2002 (Item No. 44), the Board of Supervisors (Board) approved the 10-year Lease (Lease), with two five-year options to extend the Lease, covering 26,947 square feet of office space at 15400 Civic Drive in Victorville. The original term of the Lease was for the period of October 1, 2003, through September 30, 2013. In the 22 years since the Lease was originally approved, the Board has approved five amendments, which changed the commencement and termination dates, extended the term 10 years, reduced the square footage of the leased area from approximately 33,853 square feet to 26,947 square feet, adjusted the rent schedule, provided for tenant improvements and documented a change in property ownership from Civic Center Properties, Inc. to Yi Feng Investments, LLC.
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Amendment No. |
Approval Date |
Item No. |
|
1 |
August 26,2003 |
55 |
|
2 |
October 8, 2013 |
46 |
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3 |
May 20, 2014 |
66 |
|
4 |
February 14, 2017 |
49 |
|
5 |
November 6, 2018 |
44 |
DCSS requested that RESD process an amendment to exercise one of the two available five-year extension options and update the standard lease language. However, due to extended negotiations with the landlord, the Lease expired on April 30, 2024, and the facility has remained in permitted holdover status since that date.
A competitive market analysis conducted by RESD confirmed that the rental rate for the extended term is competitive. This facility remains the best fit for DCSS’s operational needs, minimizes program disruptions, eliminates relocation costs, and allows DCSS to continue effectively serving residents in the high desert area.
The Lease was procured according to County Policy 12-02 - Leasing Privately Owned Real Property for County Use (Policy) using a Request for Proposals. 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. Extending the term of the Lease five years for the period of June 1, 2025, through May 31, 2030, will provide for an aggregate term of 26 years.
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 there is no possibility that the leasing of the subject property will have a significant effect on the environment.
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Summary of Lease Terms |
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Lessor: |
Yi Feng Investments, LLC |
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|
Xiao Yi Luo, Managing Member |
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Location: |
15400 Civic Drive, Victorville |
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Size: |
Approximately 26,947 square feet |
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Term: |
Five years commencing June 1, 2025 |
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Options: |
One five-year option |
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Rent: |
Cost per square foot per month: $2.17* |
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Monthly: $58,475 |
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Annual: $701,700 |
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*Mid-range for comparable facilities in the Victorville area per the competitive set analysis on file with RESD |
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Annual Increases: |
3% |
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Improvement Costs: |
N/A |
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Custodial: |
Provided by Lessor |
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Maintenance: |
Provided by Lessor |
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Utilities: |
Provided by Lessor; except that County pays for electric and gas expense that exceeds utility cap |
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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 the end of the term, if permitted by Lessor, the Lease shall continue on a month-to-month term; either party shall have the right to terminate the Lease with not less than sixty (60) days prior written notice during any holdover tenancy |
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Right to Terminate: |
Either party has the right to terminate with 90-days’ notice |
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Parking: |
Sufficient for County needs |
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, Deputy County Counsel, 387-5455) on April 1, 2025; Child Support Services (Amy Coughlin, Director, 478-7459) on April 2, 2025; Purchasing (Dylan Newton, Buyer III, 387-3377) on April 7, 2025; Finance (Allegra Pajot, 388-0218, and Eduardo Mora, Administrative Analysts, 387-4376) on April 21, 2025; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on April 21, 2025.
(AR: 531-2674)