Legislation Details

File #: 9361   
Type: Consent Status: Passed
File created: 12/27/2023 Department: Real Estate Services
On agenda: 1/9/2024 Final action: 1/9/2024
Subject: Amendment to Lease Agreement with CCI Club SB LLC, a Colorado Limited Liability Company for General Office and Warehouse Space in San Bernardino
Attachments: 1. CON-RESD-PERC-PRB-010924-Lease Amd w CCI Club SB LLC 07-1112 A3, 2. Item # 43 Executed BAI, 3. 07-1112 A-3 Executed Contract

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

CHERYL ADAMS, Deputy Executive Officer, Human Services

Tracy Reece, Chief Probation Officer, Probation Department 

         

SUBJECT                      

Title                     

Amendment to Lease Agreement with CCI Club SB LLC, a Colorado Limited Liability Company for General Office and Warehouse Space in San Bernardino

End

 

RECOMMENDATION(S)

Recommendation

1.                     Find that the approval of Amendment No. 3 to Lease Agreement No. 07-1112 with CCI Club SB LLC, a Colorado Limited Liability Company, is exempt under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).

2.                     Approve Amendment No. 3 to Lease Agreement No. 07-1112 with CCI Club SB LLC, a Colorado Limited Liability Company, for the location at 295 E. Caroline Street in San Bernardino to extend the term of the lease 10 years for the period of February 1, 2024 through January 31, 2034, following a permitted holdover period of May 1, 2023 through January 31, 2024, add an additional rental space of Unit E1-A, adjust the rent schedule and update standard lease terms, for approximately 18,850 square feet for Unit C, that is projected to be vacant in April 2024, and approximately 10,827 square feet for Unit E1-A, for a total leased space of approximately 29,677 square feet that the Probation department will occupy upon anticipated vacancy in April 2024, and completion of tenant improvements provided by CCI Club SB LLC, a Colorado Limited Liability Company, in the amount of $7,883,492.

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 require additional budgeted Discretionary General Funding (Net County Cost).  The total cost of this 10-year amendment is $7,883,492.  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) until HS vacates and the Probation Department (Probation) occupies that space.  Probation will reimburse RESD Rents budget for the current lease obligation using Probation budget (4810001000) which is 100% federally funded through Assembly Bill 109 funds.  Sufficient appropriation is included in the 2023-24 Rents, HS and Probation budgets and will be included in future recommended budgets.  Other costs associated with this lease include custodial and utilities, which will be paid from the HS Administrative Claim budget until HS vacates, and Probation occupies. Lease costs are as follows:

 

Year

Annual Lease Costs for Unit C

Annual Lease Costs for Unit E1-A

Total Annual Costs Associated with the Lease

May 1, 2023 to January 31, 2024

$324,036

$0

$324,036

February 1, 2024 to January 31, 2025

$432,048

$227,367

$659,415

February 1, 2025 to January 31, 2026

$445,009

$234,188

$679,197

February 1, 2026 to January 31, 2027

$458,360

$241,214

$699,574

February 1, 2027 to January 31, 2028

$472,110

$248,450

$720,560

February 1, 2028 to January 31, 2029

$486,274

$255,904

$742,178

February 1, 2029 to January 31, 2030

$500,862

$263,581

$764,443

February 1, 2030 to January 31, 2031

$515,888

$271,488

$787,376

February 1, 2031 to January 31, 2032

$531,365

$279,633

$810,998

February 1, 2032 to January 31, 2033

$547,305

$288,022

$835,327

February 1, 2033 to January 31, 2034

$563,725

$296,663

$860,388

Total

$5,276,982

$2,606,510

 $7,883,492

 

BACKGROUND INFORMATION

The recommended action will amend an existing lease with CCI Club SB LLC, a Colorado Limited Liability Company (CCI Club SB), with an amendment term of 10 years commencing February 1, 2024 through January 31, 2034, following a permitted month-to-month holdover for the period of May 1, 2023 through January 31, 2024, adjust the rent schedule and update standard lease agreement language for the continuing need for the Performance, Education and Resource Center (PERC) to provide services for its clients in the San Bernardino area.  The amendment will also add additional lease space, Unit E1-A, for Probation’s use, including occupancy of Unit C upon PERC’s vacancy, and CCI Club SB completing tenant improvements, to expand its Multidimensional Anti-Recidivism Partnership Program (MAP) services, which bring together collaborative partnerships and agencies to provide a multidimensional rehabilitative and community integration program that promotes long-term, self-sustaining, social and independent living skills among justice-involved individuals through treatment, vocational training, and personal development services. Upon completion of tenant improvements, Probation will expand its MAP services and occupy Unit E1-A, effective February 1, 2024. 

 

On December 18, 2007 (Item No. 041), the Board of Supervisors (Board) approved 10-year Lease Agreement No. 07-1112 (Lease), with one five-year option to extend the term of the Lease for approximately 18,850 square feet of office space located at 295 East Caroline Street, Unit C in San Bernardino, for PERC.  The original term of the Lease was for the period of May 1, 2008 through April 30, 2018.  In the nine years since the Lease was originally approved, the Board has approved the following two amendments for the execution of a Subordination, Non-Disturbance and Attornment Agreement between the County, Landlord and the Landlord's lender, extending the term of the lease five years by exercising an option, for the period of May 1, 2018 through April 30, 2023, adjusting the rent schedule and updating standard lease agreement language.

 

Amendment No.

Approval Date

Item No.

1

October 21, 2008

38

2

March 20, 2018

43

 

Amendment No. 3 to the Lease extends the term of the lease for the period of February 1, 2024 through January 31, 2034, following a permitted month-to-month holdover for the period of May 1, 2023 through January 31, 2024, adjusts the rental rate and updates standard lease agreement language, and adds Unit E1-A for Probation’s use.  During the tenancy, PERC will vacate its currently occupied Unit C and Probation will take over the unit from PERC and associated cost obligations.  All other terms and conditions of the Lease remain unchanged.

 

The project to approve Amendment No. 3 to the Lease was reviewed pursuant to the California Environmental Quality Act (CEQA) and determined to be categorically exempt under Section 15301 Existing Facilities (Class 1) of the CEQA Guidelines because there is no possibility that the leasing of the Property will have a significant effect on the environment.

 

Summary of Lease Terms

 

Lessee: 

CCI Club SB LLC, a Colorado Limited Liability Company (David Runberg, CFO)

 

 

Location:

295 East Caroline Street, Unit C and Unit E1-A, in San Bernardino

 

 

Size:

Approximately 18,850 square feet for Unit C, and approximately 10,827 square feet for Unit E1-A, for a total leased space of approximately 29,677 square feet

 

 

Extended Term:

February 1, 2024 through January 31, 2034

 

 

Options:

None

 

 

Unit C Rent:

Cost per square foot per month: $1.91* Monthly: $ 36,004

 

Annual: $ 432,048

 

 

Unit E1-A Rent:

Cost per square foot per month: $1.75* Monthly:  $ 18,947

 

Annual:  $ 227,367

 

 

 

*Mid-range for comparable land in the San Bernardino area

 

 

Annual Increases:

3%

 

 

Improvement Costs:

Provided by Lessor

 

 

Custodial:

Provided by County

 

 

Maintenance:

Provided by Lessor

 

 

Utilities:

Provided by County

 

 

Insurance:

The Certificate of Liability Insurance, as required by the Lease, is on file with RESD

 

 

Holdover:

Month-to-month

 

 

Right to Terminate:

County has the right to terminate with 90 days’ notice

 

PROCUREMENT

County Policy 12-02, Exceptions to Policy, provides that the Board may approve the use of an alternative procedure to the use of a Formal Request for Proposal (RFP) process whenever the Board determines that compliance with the 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 interest of the County. 

 

REVIEW BY OTHERS

This item has been reviewed by County Counsel (John Tubbs II,  Kaleigh Ragon, and Maria Insixiengmay, Deputies County Counsel, 387-5455) on December 13, 2023; Performance, Education and Resource Centers (Kristen DeLongchamp, Interim Chief Learning Officer, 420-6404) on December 14, 2023; Probation (Thomas Kamara, Director of Probation Administration, 387-5822) on December 13, 2023; Purchasing (Ariel Gill, Supervising Buyer, 386-8046) on December 8, 2023; Finance (John Hallen, 388-0208, Iliana Rodriguez, 387-4205, and Garrett Baker, 387-3077, Administrative Analysts) on December 19, 2023; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on December 19, 2023.

 

(AR: 893-0002)