REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
March 10, 2020
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
JOHN MCMAHON, Sheriff/Coroner/Public Administrator
SUBJECT
Title
Amendment No. 2 to Lease Agreement with Desert Son Outdoor LLC for Office, Warehouse, and Parking Space for the Sheriff/Coroner/Public Administrator in Barstow
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 extend the term of Lease Agreement No. 13-819 with Desert Son Outdoor LLC for three years, for the period April 1, 2020 through March 31, 2023, and add two three-year options to extend the term of the lease for the Sheriff/Coroner/Public Administrator.
2. Approve Amendment No. 2 to Lease Agreement No. 13-819 with Desert Son Outdoor LLC to extend the term of the lease for three years, for the period of April 1, 2020 through March 31, 2023, following a permitted six-month holdover for the period of October 1, 2019 through March 31, 2020; delete the existing one one-year option to extend the term of the lease; add two three-year options to extend the term; adjust the rental rate schedule; and update standard lease agreement language for 3,200 square feet of office and warehouse space and 21,000 square feet of parking area at 2151 Armory Road in Barstow for the Sheriff/Coroner/Public Administrator in the amount of $166,080.
(Presenter: Terry W. Thompson, Director, 387-5252)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Improve County Government Operations.
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 additional Discretionary General Funding (Net County Cost). The total cost of this amendment, including the permitted holdover, is $166,080. Lease payments will be made from the Rents budget (7810001000) and reimbursed from the Sheriff/Coroner/Public Administrator (Sheriff) budget (4434101000). The Sheriff is also responsible for interior maintenance, custodial and utility costs (with the exception of water, sewer, and trash), which will be paid from the Sheriff’s (4434101000) budget. Sufficient appropriation is included in the Sheriff’s 2019-20 budget and will be included in future recommended budgets. Annual lease costs are as follows:
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Period |
Annual Lease Cost |
Estimate of Other Costs Associated With This Lease |
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October 1, 2019 - March 31, 2020 |
$ 22,848 |
$ 6,678 |
|
April 1, 2020 - March 31, 2021 |
$ 46,800 |
$ 13,757 |
|
April 1, 2021 - March 31, 2022 |
$ 47,736 |
$ 14,170 |
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April 1, 2022 - March 31, 2023 |
$ 48,696 |
$ 14,595 |
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Total Cost |
$ 166,080 |
$ 49,200 |
BACKGROUND INFORMATION
Amendment No. 2 to Lease Agreement No. 13-819 provides for a three-year extension of the lease for the period from April 1, 2020 through March 31, 2023, following a permitted six-month holdover from October 1, 2019 through March 31, 2020, and adjusts the rental rate schedule; deletes the existing one-year option to extend the term of the lease; adds two (2) three-year options to extend the term of the lease; and updates standard lease agreement language. The Real Estate Services Department (RESD) negotiated a rental rate of $1.22 per square foot per month for the office and warehouse space ($46,800 annually) for the first year of the extended term, which is an increase of $0.03 per square foot per month from the prior rental rate of $1.19 per square foot per month ($45,696 annually), with two percent annual rent escalations thereafter.
On September 24, 2013 (Item No. 59), the Board of Supervisors (Board) approved a three-year Lease Agreement, No. 13-819, for 3,200 square feet of office and warehouse space at 2151 Armory Road in Barstow. The original term of the lease was for the period of October 1, 2013 through September 30, 2016. In the six years since the lease was originally approved, the Board has approved one amendment to reflect a change of ownership, extend the term of the lease through September 30, 2019, adjust the rental rate schedule, and update standard lease agreement language.
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Amendment No. |
Approval Date |
Item No. |
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1 |
July 26, 2016 |
35 |
The Sheriff Search and Rescue Station (Search & Rescue) located at 2151 Armory Road in Barstow provides services to over 9,200 square miles of land and covers the largest geographic
jurisdiction in San Bernardino County. This current facility provides 3,200 square feet of office and
warehouse space, 16-foot-high warehouse doors, and 21,000 square feet of parking area, of which approximately 11,000 square feet is used as a paved parking lot and approximately 10,000 square feet is used as a fenced gravel lot for the storage of the trucks, trailers and search and rescue vehicles.
The Sheriff requested that RESD negotiate a three-year extension of the lease because of the need to continue to provide search and rescue services in the Barstow area. Due to protracted negotiations regarding the rental rate, the lease went into a permitted holdover period on October 1, 2019. Amendment No. 2 to Lease Agreement No. 13-819 extends the term of the lease for the period of April 1, 2020 through March 31, 2023, (following a permitted holdover from October 1, 2019 through March 31, 2020), deletes the existing one-year option to extend the term of the lease, adds two three-year options to extend the term of the lease, which are more practical extension option periods given the anticipated need for this facility, adjusts the rental rate schedule, and updates standard lease agreement language. All other provisions and terms of the lease shall remain the same.
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.
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Summary of Lease Terms |
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Lessor: |
Desert Son Outdoor LLC (Joel Mumford, Managing Member) |
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Location: |
2151 Armory Road in Barstow |
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Size: |
3,200 square feet of office and warehouse space plus 21,000 square feet of parking area, comprised of an 11,000-square-foot paved lot for parking and a 10,000 square-foot fenced gravel lot for storage |
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Term: |
Three years commencing April 1, 2020 |
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Options |
Two three-year options to extend |
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Cost per sq. ft. per month: $1.22 |
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Rent: |
Monthly: $3,900.00 |
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Annual: $46,800.00 |
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*High range for comparable facilities in the Barstow area per supporting lease comparables on file |
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Annual Increases: |
2% |
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Improvement Costs: |
None |
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Custodial |
Provided by County |
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Maintenance: |
Exterior maintenance provided by Lessor, interior maintenance provided by County |
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Utilities: |
Water, sewer, and trash provided by Lessor; all other utilities provided by County |
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Insurance: |
The Certificate of Liability Insurance, as required by the lease, is on file with the RESD |
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Right to Terminate: |
County has the right to terminate with 90-days’ notice |
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Parking: |
Sufficient for County needs |
PROCUREMENT
On September 24, 2013 (Item No. 59), the Board approved Lease Agreement No. 13-819, procured according to County Policy 12-02 - Leasing Privately Owned Real Property for County Use (Policy), using a Solicitation of Proposal process. Extending the term of the lease for three years would normally require a Formal Request for Proposal (Formal RFP) process. The Policy provides that the Board may approve the use of an alternative procedure to the use of a Formal RFP 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 interests of the County. RESD completed a competitive analysis of the area and found the negotiated rental rate for the extended term is competitive and the department would avoid considerable moving expenses if the Sheriff stays in the current location. The Sheriff is requesting the Board approve an alternative procedure as allowed in the Policy, to extend the term of this lease three years, and add two (2) three-year options as this facility best meets the needs of the department.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Agnes Cheng, Deputy County Counsel and Rick Luczak, Deputy County Counsel, 387-5455) on January 23,2020; Sheriff (Jose Torres, Administrative Manager, 387-0640) on January 9, 2020; Purchasing Department (Michael Candelaria, Buyer III, 387-0321) on January 6, 2020; Finance (Carolina Mendoza, Administrative Analyst, 387-4222 and Monique Amis, Administrative Analyst, 387-4883) on February 20, 2020; and County Finance and Administration (Matthew Erickson, County Chief Financial Officer, 387-5423) on February 24, 2020.
(JAG: 677-8210)