REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
January 9, 2024
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
MELANIE OROSCO, County Librarian, County Library
SUBJECT
Title
Subordination, Non-Disturbance, and Attornment Agreement to Lease Agreement with City of Hesperia for Library and Office Space
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RECOMMENDATION(S)
Recommendation
Approve a Subordination, Non-disturbance, and Attornment Agreement among San Bernardino County, City of Hesperia, a municipal corporation and general law City duly organized and existing under the laws of the State of California, and Hesperia Joint Public Finance Authority, in connection with Lease Agreement No. 06-1001, for the existing term of October 1, 2006 through September 30, 2026, for approximately 20,102 square feet of library and office space for the County Library at 9650 7th Avenue in the City of Hesperia.
(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.
FINANCIAL IMPACT
Approval of this item will not require Discretionary General Funding (Net County Cost) as there is no cost associated with the Subordination, Non-disturbance, and Attornment Agreement (SNDA). The rent due during the 20-year term of the lease is $1 per year.
BACKGROUND INFORMATION
The recommended action will approve the SNDA) among San Bernardino County (County), City of Hesperia, a municipal corporation and general law City duly organized and existing under the laws of the State of California (Landlord), and Hesperia Joint Public Finance Authority (Finance Authority), in connection with Lease Agreement No. 06-1001 (Lease) at 9650 7th Avenue in the City of Hesperia (Premises). A SNDA is a document that addresses the priority of the rights of tenants and lenders, commonly used in commercial leases to clarify the rights of tenant, landlord, and related third-parties, such as the landlord’s lender or purchaser of a property.
On September 26, 2006 (Item No. 28), the Board of Supervisors (Board) approved the 20-year Lease with two, five-year options to extend the term of the Lease with the Landlord for approximately 20,102 square feet of library and office space for the County Library at the Premises. The original projected term of the Lease was from October 1, 2006 through September 30, 2026.
The Landlord and the Finance Authority are about to execute the 2023 Financing Leases in connection with the issuance by the Finance Authority of its Hesperia Joint Public Finance Authority 2023 Refunding Lease Revenue Bonds, pursuant to an Indenture (legal agreement), dated as of July 1, 2023, by and between the Finance Authority and U.S. Bank Trust Company, National Association. Due to new financing, the SNDA is needed to ensure that County’s rights under the Lease are not disturbed in the event of a lender foreclosure. The SNDA does not modify the existing terms of the Lease.
The Real Estate Services Department recommends approval of the SNDA, as the approval will enable the County Library to continue providing library services to the public.
County Staff have reviewed the recommended action pursuant to the California Environmental Quality Act (CEQA) and has determined that it does not constitute a project. Accordingly, no further action is required under CEQA.
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Summary of Lease Terms |
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Lessor: |
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City of Hesperia (Tad Honeycutt, Mayor) |
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Location: |
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9650 7th Avenue, Hesperia |
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Size: |
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20,102 square feet |
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Term: |
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20 years commencing on October 1, 2006 |
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Options: |
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Two five-year extension options |
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Rent: |
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$1 per year |
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Annual Increases: |
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None |
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Improvement Costs: |
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Provided by the Lessor |
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Custodial: |
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Provided by County |
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Maintenance: |
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Provided By Lessor; County to contribute to major maintenance or capital improvements to be negotiated on a case-by-case basis |
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Utilities: |
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Lessor to provide electricity, not to exceed $60,000 per year, County to provide all other utilities |
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Right to Terminate: |
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Either party may terminate this Lease with 180-days’ notice |
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Parking: |
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Sufficient for County needs |
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, and Kaleigh Ragon, Deputies County Counsel, 387-5455) on September 27, 2023; Library (Melanie Orosco, County Librarian, 387-2220) on September 27, 2023; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on September 28, 2023; Finance (Elias Duenas, Administrative Analyst, 387-4052, and Garrett Baker, Administrative Analyst, 387-3077) on December 13, 2023; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) December 13, 2023.
(AR: 893-0002)