REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
November 17, 2026
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
SHARON NEVINS, Director, Department of Aging Adult Services
SUBJECT
Title
Amendment to Lease Agreement with Fairway Business Centre on Milliken, LLC for Office Space in Rancho Cucamonga
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 4 to Lease Agreement No. 08-104 with Fairway Business Centre on Milliken, LLC, for office space is an exempt project under the California Environmental Quality Act Guidelines Section 15301 - Existing Facilities (Class I).
2. Approve Amendment No. 4 to Lease Agreement No. 08-104 with Fairway Business Centre on Milliken, LLC, to:
a. Extend the term of Lease Agreement No. 08-104 by five years, for the period of December 1, 2026 through November 30, 2031, through the County’s exercise of the second of two five-year extension options.
b. Adjust the rental rate schedule.
c. Add one five-year option to extend the maximum term of the lease agreement through the use of an alternative procedure as allowed per County Policy 12-02 - Leasing Privately Owned Real Property for County Use.
d. Update the standard lease agreement language.
e. Add a right of first refusal for additional space within the building.
f. Increase the lease agreement amount by $3,671,892, from $10,154,705 for a new total amount of $13,826,597.
g. Continue leasing approximately 24,772 square feet located at 9445 Fairway View Place, Rancho Cucamonga for the Department of Aging and Adult Services.
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 this item will not result in the use of Discretionary General Funding (Net County Cost). The total cost of Amendment No. 4 (Amendment) to Lease Agreement No. 08-104 (Lease) is $3,671,892. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Human Services (HS) Administrative Claim budget (5015011000). Sufficient appropriation is included in the 2026-27 budget and will be included in future recommended budgets. Annual Lease costs are as follows:
|
Year |
Lease Cost |
|
December 1, 2026 - November 30, 2027 |
$698,568 |
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December 1, 2027 - November 30, 2028 |
$716,028 |
|
December 1, 2028 - November 30, 2029 |
$733,932 |
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December 1, 2029 - November 30, 2030 |
$752,280 |
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December 1, 2030 - November 30, 2031 |
$771,084 |
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Total Cost |
$3,671,892 |
BACKGROUND INFORMATION
On March 4, 2008 (Item No. 67), the Board of Supervisors (Board) approved the Lease with Fairway Business Centre on Milliken, LLC (Landlord) for 20,085 square feet of office space located at 9445 Fairway View Place (0210-082-60-0000) in Rancho Cucamonga (Premises) for use by the Department of Aging and Adult Services (DAAS). The original term of the Lease was for the period of June 1, 2008 through May 31, 2014. Since the Lease was originally approved, the Board has approved three amendments to extend the term of the Lease, adjust the rental rate schedule, add options to extend the term, provide for tenant improvements, expand and correct the square footage of the Premises to 24,772 square feet, and update standard lease agreement language to include County’s right of first refusal and the right to terminate the Lease
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Amendment No. |
Approval Date |
Item No. |
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1 |
June 17, 2014 |
66 |
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2 |
November 17, 2015 |
41 |
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3 |
November 16, 2021 |
55 |
DAAS requested that RESD negotiate an Amendment to the Lease to extend the existing term which is set to expire on November 30, 2026. The Amendment will extend the term for the period of December 1, 2026 through November 30, 2031, adjust the rental rate schedule, add one five-year option to extend the term, and provide the County with a right of first refusal to lease additional space that becomes available within the building. All other Lease terms remain unchanged.
This Amendment was reviewed pursuant to the California Environmental Quality Act (CEQA) and determined to be categorically exempt under Section 15301 - Existing Facilities (Class 1) because the Amendment is for continued occupancy and operation within an existing facility with negligible or no expansion of existing use.
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Summary of Lease Terms |
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Lessor: |
Fairway Business Centre on Milliken, LLC Kyle Desmet, Asset Manager |
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Location: |
9445 Fairway View Place, Suites 110 and 115, Rancho Cucamonga |
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Size: |
Approximately 24,772 square feet of office space |
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Term: |
December 1, 2026 through November 30, 2031 |
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Options: |
One five-year option |
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Right of First Refusal: |
County has a right of first refusal to lease additional space within the building that becomes available during the Fourth Extended Term and any extensions, subject to the terms of the Lease. |
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Rent: |
Cost per square foot per month: $2.35 full-service gross* |
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Monthly: $58,214 |
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Annual: $698,568 |
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*Low-range for comparable facilities in the Rancho Cucamonga area per the competitive set analysis on file with RESD |
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Annual Increases: |
Approximately 2.5% |
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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 shall pay for electric costs that exceed the electric utility expense 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 upon the same terms and conditions which existed at the time of expiration |
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Right to Terminate: |
County has the right to terminate with 90 days’ notice |
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Parking: |
98 unreserved parking spaces |
PROCUREMENT
County 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 23 years and six months, and a potential aggregate term of 28 years and six months if the added five-year 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 proposed rental rate to be competitive. RESD also reviewed alternative facilities in the area and determined that remaining at the existing location is in the County’s best interest when compared with the significant costs and operational impacts associated with relocating DAAS. Policy 12-02 provides that the Board may approve the use of an alternative procedure to the Formal Request for Proposals process whenever the Board determines that compliance with the Formal Request for Proposals 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. The Premises continues to meet DAAS’s operational needs, and remaining at its existing location avoids significant cost and time that would be expended if DAAS were required to relocate its operations.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Josiah Houck, Deputy County Counsel, 387-5455) on November 4, 2026; Aging and Adult Services (Sharon Nevins, Director, 891-3917) on October 20, 2026; Purchasing (Dylan Newton, Buyer III, 665-4793) on November 5, 2026; and County Finance and Administration (John Hallen, Principal Administrative Analyst, 388-0208, and Eduardo Mora, Administrative Analyst, 387-4376) on November 5, 2026.
(YG: 665-0268)