REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
TERRY W. THOMPSON, Director, Real Estate Services Department
GEORGINA YOSHIOKA, Director, Department of Behavioral Health
SUBJECT
Title
Amendment to Revenue Lease Agreement with Valley Star Behavioral Health, Inc. for Office Space and Treatment Center in Joshua Tree
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 2 to Revenue Lease Agreement No. 18-126 with Valley Star Behavioral Health, Inc. for office space and treatment center in Joshua Tree is an exempt project under the California Environmental Quality Act Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 2 to Revenue Lease Agreement No. 18-126 with Valley Star Behavioral Health, Inc., to extend the term of the lease for the period of July 1, 2023 through June 30, 2027, following a permitted 17 day holdover for the period of June 14, 2023 through June 30, 2023, for the use of approximately 10,584 total square feet of office and clinic space within the San Bernardino County-owned facility located at 60805 29 Palms Highway in Joshua Tree, for a total revenue in the amount of $1,066,868.
3. Direct the Clerk of the Board of Supervisors to file and post the Notice of Exemption for the project as required under 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 revenue anticipated to be received by the Department of Behavioral Health (DBH) for this four-year amendment is $1,066,868. Other costs associated with this amendment include custodial, utility and maintenance expenses estimated at $134,533 annually, which will be paid by DBH through Mental Health Services Act (MHSA) funds in the DBH budget (9204332200). Sufficient appropriation is included in the DBH 2023-24 budget and will be included in future recommended budgets. Annual revenue and costs are as follows:
|
Year |
Annual Lease Revenue |
Estimate of Annual Costs Associated with this Lease |
|
July 1, 2023 - June 30, 2024 |
$266,717 |
$134,533 |
|
July 1, 2024 - June 30, 2025 |
$266,717 |
$134,533 |
|
July 1, 2025 - June 30, 2026 |
$266,717 |
$134,533 |
|
July 1, 2026 - June 30, 2027 |
$266,717 |
$134,533 |
|
Total |
$1,066,868 |
$538,132 |
BACKGROUND INFORMATION
Revenue Lease Agreement No. 18-126 (Lease) with Valley Star Behavioral Health, Inc. (Valley Star) will be extended for the period of July 1, 2023 through June 30, 2027. The amendment will adjust the rental rate schedule for the use of approximately 10,584 total square feet of office and clinic space for a Crisis Residential Treatment (CRT) program services at the San Bernardino County (County)-owned CRT center located at 60805 29 Palms Highway in Joshua Tree (Premises).
On August 22, 2017 (Item No. 19), the Board of Supervisors (Board) approved Contract No. 17-710 with Valley Star for the provision of CRT program services in the Eastern Desert region of the county. The facility in the Eastern Desert region is comprised of 16 beds, for adults aged 18-59, specializing in providing crisis residential treatment for individuals diagnosed with mental health and/or co-occurring mental health and substance use disorders. Services include, but are not limited to, assessments, treatment plan development, collateral services, crisis intervention, medication support services when necessary, and individual and group therapy. Consumers may receive services in a CRT program for up to 90 days. Valley Star provides CRT program services to approximately 127 individuals annually.
On March 13, 2018 (Item No. 35), the Board approved the five-year revenue Lease with Valley Star for 10,584 square feet of office and clinic space at the Premises. The original term of the Lease commenced upon the completion of the County’s installation of certain County-owned furnishings, which was projected to occur on April 1, 2018. The installation was completed on June 14, 2018.
On May 10, 2022 (Item No. 43), the Board approved Amendment No. 1 to the Lease which confirmed the commencement date of June 14, 2018, and the expiration date of June 13, 2023. Amendment No. 1 to the Lease also removed Valley Star’s obligation to pay the County a proportionate share of security service costs.
DBH requested that the Real Estate Services Department (RESD) prepare an amendment to extend the term of the Lease for the period of July 1, 2023 through June 30, 2027, following a permitted 17 day holdover for the period of June 14, 2023 through June 30, 2023. Either party may terminate the Lease by giving the other party 30 days’ prior written notice. All other terms and conditions of the Lease remain the same.
The project to approve Amendment No. 2 to the Lease with Valley Star was reviewed pursuant to the California Environmental Quality Act (CEQA) and determined to be categorically exempt under Section 15301 - Existing Facilities (Class 1) because there is no possibility that the leasing of the subject property will have a significant effect on the environment.
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Summary of Lease Terms |
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Lessee: |
Valley Star Behavioral Health, Inc. (Kent Dunlap, President and Chief Executive Officer) |
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Location: |
60805 29 Palms Highway in Joshua Tree |
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Size: |
Approximately 10,584 total square feet |
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Term: |
Four years, July 1, 2023 through June 30, 2027 |
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Options: |
None |
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Rent: |
Cost per square foot per month: $2.10* |
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Monthly: $22,226 |
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Annual: $266,717 |
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*High-range for comparable facilities in the San Bernardino area per the competitive set analysis on file with RESD |
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Annual Increases: |
None |
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Improvement Costs: |
None |
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Custodial: |
Provided by County |
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Maintenance: |
Provided by County |
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Utilities: |
Provided by County |
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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: |
Month-to-month basis upon the same provisions of the Lease |
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Right to Terminate: |
Either party has the right to terminate with 30-days’ prior written notice |
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Parking: |
Sufficient for Lessee needs |
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, Deputy County Counsel, and Dawn Martin, Deputy County Counsel, 387-5455) on May 9, 2023; Behavioral Health (Lydia Bell, Administrative Manager, 386-9732) on May 23, 2023; Purchasing (Michelle Churchill, Supervising Buyer, 387-2070) on May 25, 2023; Finance (Chris Lange, Administrative Analyst, 386-8393, and Garrett Baker, Administrative Analyst, 387-3077) on June 2, 2023; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on June 7, 2023.
(YG: 665-0268)