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
JOSHUA DUGAS, Director, Department of Behavioral Health
SUBJECT
Title
Amendment to Lease Agreement with T.T. Group, Inc. for Office Space in Barstow
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 2 to Lease Agreement No. 13-352 with T.T. Group, Inc. 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. 13-352 with T.T. Group, Inc., through the use of an alternative procedure as allowed per County Policy 12-02 - Leasing Privately Owned Real Property for County Use, to:
a. Acknowledge the permitted holdover period from January 16, 2021 through November 30, 2026, and extend the term of Lease Agreement No. 13-352 for three years through the exercise of the existing option, for the period of December 1, 2026 through November 30, 2029.
b. Adjust the rental rate schedule.
c. Add two additional three-year options to extend the lease agreement.
d. Update standard lease agreement language for 9,808 square feet of office space for the Department of Behavioral Health located at 1841 East Main Street in Barstow (Assessor’s Parcel Number 0427-04-263-0000), increasing the total lease agreement amount by $2,478,019, including $1,659,499 for the permitted holdover period, for a new total amount of $4,318,771.
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.
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 cost of Amendment No. 2 (Amendment) to Lease Agreement No. 13-352 (Lease) is $2,478,019, which includes $1,659,499 for the period of January 16, 2021 through November 30, 2026. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed from the Department of Behavioral Health (DBH) budget (9206261000). DBH Lease costs are 30% federally funded, 28% state funded, and 42% State Mental Health. Sufficient appropriation is included in the 2026-27 budget and will be included in future recommended budgets. Annual lease costs are as follows:
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Lease Year |
Annual Lease Cost |
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*January 16, 2021 - November 30, 2026 |
$1,659,499 |
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December 1, 2026 - November 30, 2027 |
$264,816 |
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December 1, 2027 - November 30, 2028 |
$272,760 |
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December 1, 2028 - November 30, 2029 |
$280,944 |
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Total Lease Cost: |
$2,478,019 |
*Permitted holdover period
BACKGROUND INFORMATION
On June 4, 2013 (Item No. 49), the Board of Supervisors (Board) approved the Lease with one three-year option to extend the term with T.T. Group, Inc. (Landlord), for approximately 9,808 square feet of office space, located at 1876 E. Main Street, in Barstow (Premises). The Lease was originally approved for a seven-year term commencing December 1, 2013. On March 11, 2014 (Item No. 27), the Board approved Amendment No. 1 to adjust the commencement date to January 16, 2014, and the expiration date to January 15, 2021, and correct the Premises address.
DBH requested that RESD negotiate an Amendment to extend the Lease, which expired on January 15, 2021. Negotiations were extended due to evolving departmental operational needs and changes in the proposed scope of tenant improvements. During this period, DBH evaluated the potential acquisition of the entire building and, upon determining not to proceed, obtained updated proposals for the proposed clubhouse expansion. Following review, the anticipated improvement costs were determined to be financially unfavorable compared to alternative facility options. Consequently, DBH elected not to proceed with the proposed expansion and instead began exploring more cost-effective alternatives, including build-to-suit opportunities or existing facilities capable of accommodating operations in a single location. Following this reassessment, DBH determined that continued occupancy of the existing Premises would best support its immediate operational needs while continuing to evaluate long-term alternatives, allowing RESD to move forward with the proposed Lease Amendment. During this period, DBH continued to occupy the Premises under the permitted month-to-month holdover provisions of the Lease, beginning January 16, 2021.
The Amendment will extend the term by exercising the existing three-year option to extend the term for the period of December 1, 2026 through November 30, 2029, following a permitted holdover period from January 16, 2021 through November 30, 2026, for the Premises, adjust the rental rate schedule, and add two three-year extension options. All other terms of the Lease remain unchanged.
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- Existing Facilities (Class 1) because the proposed Lease is to secure property to operate within the existing structure with negligible or no expansion of existing use.
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Summary of Lease Terms |
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Lessor: |
T.T. Group, Inc. Jennifer Chen, Chief Financial Officer |
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Location: |
1841 E. Main Street, Barstow |
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Size: |
Approximately 9,808 square feet of office space |
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Term: |
Three years, commencing December 1, 2026 through November 30, 2029 |
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Options: |
Two additional three-year extension options |
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Rent: |
Cost per square foot per month: $2.25* |
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Monthly: $22,068 |
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Annual: $264,816 |
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*Mid-range for comparable facilities in the Barstow area per the competitive set analysis on file with RESD |
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Annual Increases: |
Approximately 3% beginning in year two |
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Improvement Costs: |
None |
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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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Holdover: |
Month-to-month term upon the same terms and conditions, including the rent which existed at the time of expiration |
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Right to Terminate: |
County has the right to terminate the Lease in the event of loss of funding to County by providing a 120-day notice |
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Parking: |
Sufficient for County needs |
PROCUREMENT
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 three-year extended term, to be competitive. The site best meets the long-term requirements of DBH, minimizes disruption to DBH operations, and saves on relocation costs.
Policy 12-02 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 Formal 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.
Based on the competitive rental terms, continued suitability of the Premises, and costs and operational impacts associated with relocation, RESD recommends approval of the Amendment through the alternative procedure.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, Deputy County Counsel, 387-5455) on October 14, 2026; Behavioral Health (Dina Bunch, Administrative Manager, 386-9732) on October 14, 2026; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on October 15, 2026; and County Finance and Administration (Lizveth Varela, 387-4883, and Eduardo Mora, 387-4376, Administrative Analysts) on October 29, 2026.
(JF: 269-1984)