REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
September 22, 2026
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
BRADLEY GATES, Director, Workforce Development Department
SUBJECT
Title
Sublease Agreement with the State of California for Office Space in Victorville
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Sublease Agreement with the State of California for office space, is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
2. Find that approval of Sublease Agreement with the State of California for office space located at 17310 Bear Valley Road, Suite B-102, and Suites B-104 through B-109, within the County leased building in Victorville (Assessor’s Parcel Number 3091-271-55-0000), serves a public purpose and is in the best interests of county residents.
3. Approve Sublease Agreement with the State of California, for approximately 4,456 square feet of office space at 17310 Bear Valley Road, Suites B-102, and Suites B-104 through B-109, within the County leased building in Victorville (Assessor’s Parcel Number 3091-271-55-0000), for use by the State of California, for a one year and four months term commencing October 1, 2026 through January 31, 2028, for a total revenue amount of $215,314.
4. Terminate Sublease Agreement No. 13-809, effective September 30, 2026, contingent upon execution of the new Sublease Agreement, which generated a total revenue of $950,086 during the holdover period from December 1, 2017 through September 30, 2026.
5. 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 revenue associated with this transaction is $1,165,400. This amount includes historical rental revenue received during the permitted holdover occupancy under Prior Sublease Agreement No. 13-809 (Prior Sublease) dated December 1, 2017 through September 30, 2026, in the amount of $950,086, and prospective rental revenue to be received under the proposed new Sublease Agreement (Sublease).
The proposed new Sublease will generate an additional $215,314 in rental revenue during the term of October 1, 2026 through January 31, 2028.
Sublease payments will continue to be deposited into the Workforce Development Department (WDD) budget (5715352260). Sublease revenues are as follows:
|
Year |
Lease Cost |
|
*December 1, 2017 - September 30, 2026 |
$950,086 |
|
October 1, 2026 - January 31, 2027 |
$52,224 |
|
February 1, 2027 - January 31, 2028 |
$163,090 |
|
Total Cost |
$1,165,400 |
*The rental amounts for the period of December 1, 2017 through September 30, 2026, reflect the State of California’s permitted month-to-month holdover occupancy under the Prior Sublease, Agreement No. 13-809, and is memorialized in the Board item for historical and audit purposes only.
BACKGROUND INFORMATION
On September 24, 2013 (Item No. 55), the Board of Supervisors (Board) approved the five-year, Prior Sublease with the State of California (State) for the Premises.
On March 13, 2012 (Item No. 45), the Board approved a five-year Master Expense Lease Agreement, No. 12-169 (Master Lease), under which the County leases10,346 square feet of office space at the Premises from the property owner for use by WDD. The County, in turn, subleases a portion of the Premises to the State pursuant to the Prior Sublease and, upon approval of this item, the new Sublease. The original term of the Master Lease was from July 1, 2012 through June 30, 2017. On December 4, 2012 (Item No. 23), the Board approved Amendment No. 1 to the Master Lease, which changed the commencement date to October 1, 2012, and the termination date to September 30, 2017. In the 14 years since the Master Lease and Prior Sublease were originally approved, the Board has approved four amendments, adjusting the commencement date, provided for change of ownership, and extended the term until January 31, 2028.
Master Expense Lease 12-169:
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
December 4, 2012 |
23 |
|
2 |
July 12, 2016 |
40 |
|
3 |
June 13, 2017 |
75 |
|
4 |
January 24, 2023 |
47 |
WDD requested that RESD negotiate a continued sublease to the State. However, completion of this Sublease was significantly delayed by a combination of factors that occurred over an extended period, including turnover among State personnel responsible for the sublease, changes in State representatives that required matters to be revisited and re-coordinated, longer-than-anticipated State review and approval processes, and continued negotiations between the Landlord and the Department regarding contract terms. Collectively, these circumstances resulted in extended periods between negotiations, reviews, and required approvals, and prevented the parties from finalizing a replacement sublease within the anticipated timeframe. As a result, the Prior Sublease entered a permitted holdover on December 1, 2017, during which the State continued uninterrupted occupancy of the Premises under the existing terms of the prior Sublease of approximately 4,456 square feet of office space at 17310 Bear Valley Road, Suites B-102, and Suites B-104-B-109, in Victorville (Assessor’s Parcel Number 3091-271-55-0000) (Premises), and paid rental revenue totaling $950,086 in accordance with the terms of the Prior Sublease. The proposed new Sublease will generate an additional $215,314 in rental revenue during the term of October 1, 2026 through January 31, 2028.
The Sublease will memorialize the mutual agreement of the parties to continue a sublease term for the period of October 1, 2026 through January 31, 2028, which mirrors the Master Lease expiration. Aligning the expiration dates, as requested by the State, ensures the Sublease does not extend beyond the County’s underlying leasehold interest in the Premises and maintains consistency between the agreements. The Sublease will also increase the leased premises from approximately 4,440 square feet to approximately 4,456 square feet, adjust the rental rate schedule, and update standard lease language from the Prior Sublease. The recommended action will approve the new Sublease and terminate the Prior Sublease, following the permitted holdover period from December 1, 2017 through September 30, 2026.
The State has continuously occupied the Premises for 13 years. The Premises continues to meet the operational needs of both the State and WDD, and relocation would result in significant disruption of both WDD and State services, including substantial relocation costs.
The project to approve the Sublease was reviewed pursuant to the California Environmental Quality Act (CEQA) and determined to be categorically exempt under Section 15301 - Class 1 Existing Facilities because the proposed Sublease is to continue occupancy of existing office space within an existing facility with negligible or no expansion of existing use.
|
Summary of Lease Terms |
|
|
Sublessee: |
State of California Brian Hensley, Real Estate Leasing Manager and Planning |
|
|
|
|
Location: |
17310 Bear Valley Road, Suites B-102, and Suites B-104-B-109, Victorville |
|
|
|
|
Size: |
Approximately 4,456 square feet of office space |
|
|
|
|
Extended Term: |
One year and four months commencing October 1, 2026 through January 31, 2028 |
|
|
|
|
Options: |
None |
|
|
|
|
Rent Revenue: |
Cost per square foot per month: $2.93 *Full-Service Gross Sublease |
|
|
Monthly: $13,056 |
|
|
Annual: $156,672 |
|
|
*Mid to High-range for comparable facilities in the Victorville area per the competitive set analysis on file with RESD |
|
|
|
|
Annual Increases: |
Approximately 4.10% |
|
|
|
|
Improvement Costs: |
N/A |
|
|
|
|
Custodial: |
Provided by Sublessor |
|
|
|
|
Maintenance: |
Provided by Sublessor |
|
|
|
|
Utilities: |
Provided by Sublessor |
|
|
|
|
Insurance: |
The State is self-insured for liability exposures pursuant to applicable State law |
|
|
|
|
Holdover: |
Month-to-month under the same terms and conditions, including rent |
|
|
|
|
Right to Terminate: |
The State has the right to terminate with 30 days’ notice |
|
|
|
|
Parking: |
Sufficient for County and State needs |
PROCUREMENT
California Government Code section 26227 authorizes the County to grant the use of real property to other public agencies for programs that serve a public purpose by meeting the public safety, welfare, and public service needs of the County and the general public.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, Deputy County Counsel, 387-5455) on August 17, 2026; Workforce Development (Bradley Gates, Director, 387-9856) on August 17, 2026; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on August 21, 2026; and County Finance and Administration (Eduardo Mora, Administrative Analyst, 387-4375) on September 2, 2026.
(JF:269-1984)