REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 28, 2022
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
WILLIAM L. GILBERT, Director, Arrowhead Regional Medical Center
SUBJECT
Title
Amendment to Lease Agreement with Vanderbilt Property, LLC for Office Space for Arrowhead Regional Medical Center in San Bernardino
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RECOMMENDATION(S)
Recommendation
Approve Amendment No. 1 to Lease Agreement No. 20-01 with Vanderbilt Property LLC, to reflect a change of property ownership from Vicky L. Thomas, Trustee of the Vicky L. Thomas Trust dated February 7, 2007, to Vanderbilt Property, LLC, affirm the commencement date of the lease as February 1, 2020 and the expiration date as January 31, 2025, and update standard lease agreement language for approximately 17,504 square feet of office space located at 412 West Hospitality Lane for Arrowhead Regional Medical Center in San Bernardino at no additional cost.
(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.
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) as there is no cost to San Bernardino County (County) associated with this amendment to reflect a change of property ownership, affirm the initial term of the lease, and update the standard lease agreement language.
BACKGROUND INFORMATION
The recommended action will amend an existing lease to reflect a change of property ownership from Vicky L. Thomas, Trustee of the Vicky L. Thomas Trust dated February 7, 2007 (Thomas) to Vanderbilt Property, LLC (Vanderbilt), affirm the commencement date of the lease as February 1, 2020, and the expiration date as January 31, 2025, and update standard lease agreement language.
On January 7, 2020 (Item No. 27), the Board of Supervisors (Board) approved Lease Agreement, No. 20-01, with Thomas for a five-year term with one two-year extension option for approximately 17,504 square feet of office space located at 412 West Hospitality Lane in San Bernardino. The original term of the lease was projected to be for the period of February 1, 2020 through January 31, 2025, subject to Thomas’s completion of certain turnkey tenant improvements. Thomas completed the improvements on February 1, 2020, and the parties desire to affirm that the commencement date of the lease is February 1, 2020, and the expiration date is January 31, 2025.
The Real Estate Services Department (RESD) was notified on April 11, 2022, that Vanderbilt had acquired ownership of the property from Thomas. Amendment No. 1 to Lease Agreement No. 20-01 reflects a change in property ownership from Thomas to Vanderbilt, affirms that the commencement date of the lease is February 1, 2020, and the expiration date is January 31, 2025, and updates standard lease agreement language. To facilitate the administration of the lease, the amendment also permits the RESD Director to execute future amendments to the lease that solely reflect a successor landlord following a sale of the property and assignment of the lease. All other terms and conditions of the lease remain unchanged.
Staff has 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: |
Vanderbilt Property LLC (Jon Alberon, Managing Member) |
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Location: |
412 West Hospitality Lane, San Bernardino |
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Size: |
17,504 square feet of office space (2nd Floor) |
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Term: |
Existing term expires on January 31, 2025 |
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Options: |
One two-year option |
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Annual Increases: |
Approximately 2% |
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Improvement Costs: |
$60,444 in turnkey improvements ($0.10 per square foot per month) constructed by landlord and amortized over the first 36 months of the initial five-year term |
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Custodial: |
Provided by Lessor |
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Maintenance: |
Provided by Lessor |
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Utilities: |
Provided by Lessor |
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Insurance: |
The Certificate of Liability Insurance, as required by the lease, is on file with RESD |
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Right to Terminate: |
County has the right to terminate with 90-days’ notice effective on or at any time after January 31, 2023 |
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Parking: |
Sufficient for County needs |
PROCUREMENT
On January 7, 2020 (Item No. 27), the Board approved Lease Agreement No. 20-01, for a five-year term with one two-year extension option for approximately 17,504 square feet of office space located at 412 West Hospitality Lane in San Bernardino, which was procured according to County Policy 12-02 - Leasing Privately Owned Real Property for County Use (Policy). The procurement process required by the Policy does not apply to amendments of existing leases, provided the amendment does not exceed the maximum term (including options) of the lease.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Agnes Cheng, Deputy County Counsel, and Charles Phan, Deputy County Counsel, 387-5455) on June 2, 2022; Arrowhead Regional Medical Center (Andrew Goldfrach, Chief Operating Officer, 580-6170) on April 27, 2022; Purchasing (Bruce Cole, Supervising Buyer, 387-2148) on April 27, 2022; Finance (Jenny Yang, Administrative Analyst, 387-4884, and Carl Lofton, Administrative Analyst, 387-5404) on June 8, 2022; and County Finance and Administration (Diana Atkeson, Deputy Executive Officer, 387-4376) on June 8, 2022.
(PN: 677-8321)