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 SBCO, LLC for Office Space in Hesperia
End
RECOMMENDATION(S)
Recommendation
1. Find that approval of Amendment No. 7 to Lease Agreement No. 01-693 with SBCO, 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. 7 to Lease Agreement No. 01-693 with SBCO, LLC utilizing an alternative procedure pursuant to County Policy 12-02 - Leasing Privately Owned Real Property for County Use, to:
a. Extend the term of Lease Agreement No. 01-693 for five years, through the exercise of an existing five-year option to extend, from February 1, 2027 through January 31, 2032.
b. Adjust the rental rate schedule and provide two additional five-year options to extend.
c. Continue leasing approximately 16,371 square feet of office space at 15980 Main Street (Assessor’s Parcel Number 0413-034-38-0000) in Hesperia, for the Transitional Assistance Department.
d. Increase the total lease agreement amount by $2,336,292, from $9,268,288 to $11,604,580.
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)
Title
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 Human Services (HS) Administrative Claim for the Transitional Assistance Department (TAD) budget is supported by 96% federal and state funding and 4% local share funding. The total cost of Amendment No. 7 (Amendment) to Lease Agreement No. 01-693 (Lease) with SBCO, LLC (SBCO) is $2,336,292. Lease payments will be made from the Real Estate Services Department (RESD) Rents budget (7810001000) and reimbursed through the HS Administrative Claim budget (3000460). Sufficient appropriation is included in the 2026-27 budget and will be included in future recommended budgets. Annual Lease costs are as follows:
|
Year |
Lease Cost |
|
February 1, 2027 - January 31, 2028 |
$440,052 |
|
February 1, 2028 - January 31, 2029 |
$453,252 |
|
February 1, 2029 - January 31, 2030 |
$466,848 |
|
February 1, 2030 - January 31, 2031 |
$480,852 |
|
February 1, 2031 - January 31, 2032 |
$495,288 |
|
Total Cost |
$2,336,292 |
BACKGROUND INFORMATION
On June 26, 2001, the Board of Supervisors (Board) approved the Lease for approximately 16,371 square feet of office space and use of the parking lot at 15980 Main Street (Assessor’s Parcel Number 0413-034-38-0000) in Hesperia (Facility) for TAD. The Lease provided for a 10-year term from February 1, 2002 through January 31, 2012, with two five-year options to extend the term. TAD has continued to utilize the facility to provide public assistance and related services to residents in the Hesperia area.
Since the Lease was approved, the Board has approved six amendments that have addressed the continued occupancy and operation of the facility. These actions have included extending the lease term, adjusting the rental rate schedule, providing for tenant improvements, updating lease provisions, and reflecting a change in ownership of the property. Tenant improvements completed during the Lease included modifications to support TAD's operations and the development of a call center, as well as subsequent security and restroom improvements provided by the previous landlord.
TAD's continued occupancy of the facility has been supported by its ongoing operational need for space in the Hesperia area. Previous evaluations by RESD determined that while comparable office space was available in the area, facilities providing sufficient parking were limited and relocating would require additional build-out and moving costs. TAD therefore elected to remain at the existing location to maintain continuity of services and avoid the costs associated with relocation.
In 2017, ownership of the Facility transferred from Hesperia Plaza, LLC to SBCO, LLC, and Amendment No. 6 memorialized the change in ownership without modifying the remaining terms and conditions of the Lease. The current Lease term expires January 31, 2027.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
June 18, 2002 |
75 |
|
2 |
May 9, 2011 |
3 |
|
3 |
January 10, 2012 |
39 |
|
4 |
July 10, 2012 |
41 |
|
5 |
October 18, 2016 |
50 |
|
6 |
October 31, 2017 |
44 |
TAD has requested that RESD process an amendment to continue its occupancy of the Facility beyond the current Lease expiration of January 31, 2027. The Amendment will extend the Lease for an additional five-year term through the County’s exercise of an existing five-year option to extend, from February 1, 2027 through January 31, 2032, incorporate evening janitorial services, and provide the County with two additional five-year options to extend the Lease term. All other terms and conditions of the Lease will 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 - Class 1 Existing Facilities because the proposed Amendment will secure property to operate within the existing structure with negligible or no expansion of existing use.
|
Summary of Lease Terms |
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Lessor: |
SBCO, LLC, a California limited liability company Jaekyong Lawrence Han, Member |
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Location: |
15980 Main Street, Hesperia |
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Size: |
Approximately 16,371 square feet of office space and parking lot area |
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Term: |
Five years; February 1, 2027 through January 31, 2032 |
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Options: |
Two five-year options |
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Rent: |
Cost per sq. ft. per month: $2.24* modified gross |
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Monthly: $36,671 |
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Annual: $440,052 |
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*Low-range for comparable facilities in the Hesperia area per the competitive set analysis on file with RESD |
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Annual Increases: |
Approximately 3% |
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Holdover: |
Upon the same terms and conditions, including rent, as existed and prevailed at the time of the expiration of the term |
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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; County is responsible for separately metered telephone service and verified electrical costs exceeding the applicable electric utility expense cap, which increases 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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Right to Terminate: |
County may terminate the Lease with 90 days’ notice |
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Parking: |
Sufficient for County needs |
PROCUREMENT
County Policy 12-02 provides that the Board may approve the use of an alternative procedure in lieu 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.
The use of an alternative procedure is recommended because TAD has an ongoing operational need to remain at the existing facility to maintain continuity of public assistance services. Relocation would require additional tenant improvements, moving costs, and potential service disruptions. Continuing occupancy at the existing location is therefore considered to be in the County's best interest.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (John Tubbs II, Deputy County Counsel, 387-5455) on October 20, 2026; Transitional Assistance (James Locurto, Director, 388-0245) on October 20, 2026; Purchasing (Dylan Newton, Buyer III, 665-4793) on October 21, 2026; and County Finance and Administration (Allegra Pajot, 388-0218, and Eduardo Mora, 387-4375, Administrative Analysts) on October 29, 2026.
(AH: 840-266-8977)