Title
a. Approve and authorize the Contracts/Purchasing Officer to execute Amendment No. 2 to extend Lease Agreement No. A-07540, dated October 16,1997, effective July 1, 2018, with Salinas Airport Business Park, and General Partnership until June 30, 2025 for 16,353 square feet of general office; and
b. Authorize the Auditor/Controller to make monthly Lease payments of $28,617.75 in accordance with the terms of AMENDMENT 2 to said Lease Agreement.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Approve and authorize the Contracts/Purchasing Officer to execute AMENDMENT 2 to extend Lease Agreement No. A-07540, dated October 16, 1997, effective July 1, 2018, with Salinas Airport Business Park, and General Partnership until June 30, 2025 for 16,353 square feet of general office; and
b. Authorize the Auditor/Controller to make monthly rent payments of $28,617.75 in accordance with the terms of AMENDMENT 2 to said Lease Agreement.
SUMMARY:
AMENDMENT 2 to Lease Agreement A-07540 will provide for the Child Support Services Department (CSS) to continue to operate at 752 LaGuardia for an additional seven (7) years. AMENDMENT 2 will reduce the CSS footprint from 25,750 square feet to 16,353 square feet, effective July 1, 2018, and reduce the corresponding monthly rent payments from $47,585.23 to $28,617.75 per month resulting in a savings of $227,609.76 per year not including anticipated reductions in utility costs, and janitorial costs. AMENDMENT 2 will also include a reduction in the cost per square foot from $1.85 to $1.75 per square foot. Additionally, AMENDMENT 2 to said Lease Agreement will include no rent escalations for the remaining term of said Lease, resulting in savings over the long term, and reducing administrative time adjusting rents each year. The existing Lease Agreement A-07540 provides for an annual Consumer Price Index (CPI) escalation. Lease Agreement No. A-07540 dated October 16, 1997 was approved by the County on November 4, 1997. Said Lease Agreement was amended on October 13, 2008 to provide for an extended lease term, which expires on June 30, 2018. CSS has occupied this space since on or about October/November 1997. Through years of attrition, and staff reductions CSS has determined the amount of space which CSS currently leases is no longer needed. Janitorial costs for the newly created common area restrooms will be 63.7% the responsibility of the County and 36.3% the responsibility of the other tenant. CSS will occupy 63.7% of the facility once tenant improvements are complete.
Tenant improvements will include eight (8) new offices, a new conference room, and telecom improvements amongst other items pursuant to the AMENDMENT 2. There will also be a reduction in the amount of storage area, which will be redeployed as employee cubicle areas. Tenant Improvements should be complete by July 30, 2018 and minimally disruptive to CSS staff and customers. Major demolition and framing work will occur on nights and weekends, with finish work taking place during normal business hours. These are some of the proactive measures taking place to ensure the safety and comfort of staff and customers during the construction process.
Upon evaluating other opportunities in the market this site provides the best location and layout to continue operations for the long term. The existing public facing lobby, interview rooms, and restrooms are ideal for CSS operations. This space reduction allows the County to significantly reduce costs without incurring the capital expense of moving, and reconfiguring an alternative space to suit the needs of the department.
OTHER AGENCY INVOLVEMENT:
The Resource Management Agency negotiated the AMENDMENT 2, and assisted with the development of this report. The Office of the County Counsel has approved AMENDMENT 2 to Lease Agreement No. A-07540 as to form.
FINANCING:
There is no fiscal impact to the County General Fund with this recommendation.
The Department of Child Support Services will be responsible for costs associated with the move such as, moving cubicles, telecom, etc. The Department estimates the costs to be approximately $10,000.00. These costs will be fully financed with Federal and State funds, and the Department will not be requesting County General Funds. The tenant improvement costs will be paid for by the Lessor.
BOARD OF SUPERVISORS STRATEGIC INITIATIVES:
Check the related Board of Supervisors Stategic Initiatives:
X Economic Development
X Administration
X Health & Human Services
Infrastructure
Public Safety
Prepared by: Darrell McGowan
Approved by: Jody Holtzworth
Dated:
Attachments:
Attachment A- Location Map
Attachment B - Lease Agreement A-07540
Attachment C - AMENDMENT 1
Attachment D - AMENDMENT 2
(Attachments are on file with the Clerk of the Board)