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
JAMES LOCURTO, Director, Transitional Assistance Department
SUBJECT
Title
Amendment to Lease Agreement with Holt Blvd, LLC for Office Space in Ontario
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 2 to Lease Agreement No. 16-265 with Holt Blvd, LLC for office space, is an exempt project under the California Environmental Quality Act Guidelines, Section 15301 - Existing Facilities (Class 1).
2. Approve Amendment No. 2 to Lease Agreement No. 16-265 with Holt Blvd, LLC, for approximately 26,640 square feet of office space located at 1647 East Holt Boulevard in Ontario (Assessor’s Parcel Number 0110-091-05-0000), to:
a. Extend the term of Lease Agreement No. 16-265 by five years, for the period of December 1, 2026 through November 30, 2031, by exercising the first of two five-year extension options.
b. Adjust the rental rate schedule for the five-year extended term.
c. Provide for certain improvements to the premises, including improvements completed at Holt Blvd, LLC’s sole cost and expense and improvements funded by the County through amortized rental payments.
d. Increase the total lease agreement amount by $4,405,512, from $8,459,708 to a new total amount of $12,865,220.
3. Authorize the Purchasing Agent to issue purchase orders, as necessary, for a total amount not to exceed $4,300, for any minor change orders associated with the tenant improvements set forth in Amendment No. 2 (Four votes required).
4. 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 require Discretionary General Funding (Net County Cost). The Human Services (HS) Administrative Claim for the Transitional Assistance Department (TAD) budget is funded by 96% federal and state, and 4% local share. The total cost of Amendment No. 2 (Amendment) to Lease Agreement No. 16-265 (Lease) is $4,405,512. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the HS Administrative Claim budget (3000444). Sufficient appropriation is included in both the RESD and TAD 2026-27 budgets and will be included in future recommended budgets. Annual Lease costs are as follows:
|
Year |
Rent |
Tenant Improvement Amortization |
Lease Cost |
|
December 1, 2026 - November 30, 2027 |
$821,580 |
$8,724.00 |
$830,304.00 |
|
December 1, 2027 - November 30, 2028 |
$846,228 |
$8,724.00 |
$854,952.00 |
|
December 1, 2028 - November 30, 2029 |
$871,620 |
$8,724.00 |
$880,344.00 |
|
December 1, 2029 - November 30, 2030 |
$897,768 |
$8,724.00 |
$906,492.00 |
|
December 1, 2030 - November 30, 2031 |
$924,696 |
$8,724.00 |
$933,420.00 |
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Total Cost |
$4,361,892 |
$43,620 |
$4,405,512 |
BACKGROUND INFORMATION
On May 24, 2016 (Item No. 132), the Board of Supervisors (Board) approved the Lease with Holt Blvd, LLC (Landlord) for the term of December 1, 2016 through November 30, 2026, with two five-year options to extend the term, for approximately 26,640 square feet of office space at 1647 East Holt Boulevard in Ontario, Assessor’s Parcel Number 0110-091-05-0000, (Premises). In the 10 years since the Lease originated, the Board approved Amendment No. 1 (Item No. 43) on June 26, 2018, to correct and revise rental rates and tenant improvement costs, and complete tenant improvements.
On April 29, 2025, TAD requested that RESD negotiate an amendment to extend the existing Lease term. The Amendment will memorialize the mutual agreement of the parties to extend the Lease term for the period of December 1, 2026 through November 30, 2031; adjust the rental rate schedule; and provide for certain improvements to the Premises. Pursuant to the Amendment, the Landlord will, at its sole cost and expense, provide full carpet replacement, interior painting, replacement of damaged ceiling tiles, and structural electrical preparations for security equipment. The County will be responsible for certain additional improvements, including ceiling fans, a water-filling station, security cameras and badge readers, security window film, and lobby security desk modifications. The Landlord will also be responsible for 50% of the costs associated with parking lot speed bumps and signage. County-funded improvements will be subject to the cost and payment provisions of the Amendment. All other Lease terms will remain unchanged.
RESD requests, on behalf of TAD, that the Board authorize the Purchasing Agent to issue purchase orders, as necessary, for a total amount not to exceed $4,300 in contingency. The requested contingency is being established solely to address any unforeseen minor change orders that may arise during construction as a result of requested modifications or additional work outside the Landlord’s agreed-upon turnkey scope. The contingency will provide the flexibility to address such changes in a timely manner without delaying construction. Any costs charged against this authority will be limited to work requested by the County that is not otherwise included in the Landlord’s obligations under the Amendment. Public Contract Code section 20137 requires four votes by the Board to authorize changes or alterations to a contract where the cost of such change does not exceed 10% of the original contract price but does exceed the amount specified in Public Contract Code section 20121 ($4,000). All change orders will be approved by RESD prior to authorizing any work or payment(s).
RESD, acting in its approved capacity as the County Administrative Office designee to review proposed real property leases under Policy 12-02, completed a market analysis of comparable properties and found the current rental rate, including annual increases during the five-year extended term, to be competitive. The site meets the current requirements of TAD which minimizes disruptions to operations and saves moving costs.
TAD has continuously occupied the Premises for 10 years. The Premises remain operationally suitable for TAD’s needs, and relocation would result in significant disruption of services and substantial relocation costs. Therefore, RESD determined that use of an Alternative Procedure in lieu of a Formal Request for Proposals (RFP) was appropriate and in the County's best interest.
The project to approve the Amendment 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 Lease will secure property to operate within the existing structure with negligible expansion of existing use.
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Summary of Lease Terms |
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Lessor: |
Holt Blvd., LLC Don Berry, Manager |
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Location: |
1647 East Holt Boulevard, Ontario |
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Size: |
Approximately 26,640 square feet of office space |
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Extended Term: |
Five years, December 1, 2026 through November 30, 2031 |
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Options: |
One five-year option |
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Rent: |
Cost per square foot per month: $2.57* full-service gross |
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Monthly: $68,465 |
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Annual: $821,580 |
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*Low to Mid-range for comparable facilities in the Ontario area per the competitive set analysis on file with RESD |
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Annual Increases: |
Approximately 3% |
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Improvement Costs: |
$43,620 |
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Custodial: |
Provided by Lessor |
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Maintenance: |
Provided by Lessor |
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Utilities: |
Provided by Lessor; County to pay electrical costs in excess of $97,352.62 per lease year or $0.30 per square foot per month (electric utility expense cap), which cap is increased 3% annually |
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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: |
In the event the County shall hold over and continue to occupy the Premises with the consent of the Landlord, expressed or implied, the tenancy shall be deemed to be a tenancy from month-to-month upon the same terms and conditions, including rent, as existed and prevailed at the time of the expiration of the term of this Lease |
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Right to Terminate: |
The County shall have the right to terminate the Lease with 180 days’ notice any time during the extension period |
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Parking: |
182 parking stalls - sufficient for County needs |
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Josiah Houck, Deputy County Counsel, 387-5455) on November 5, 2026; Transitional Assistance (James Locurto, Director, 388-0245) on October 20, 2026; Purchasing (Dylan Newton, Buyer III, 665-4793) on October 26, 2026; and County Finance and Administration (John Hallen, Principal Administrative Analyst, 388-0208, and Eduardo Mora, Administrative Analyst, 387-4376) on October 29, 2026.
(JF:269-1984)