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Approve a Lease Agreement for 1,890 square feet of office space at 2220C Boynton Ave., in the City of Fairfield commencing May 1, 2024 and expiring April 30, 2029, at a base rent of $6,004 per month, with three (3) percent annual increases and six (6) months of prior rent totaling $17,580 due at commencement; and Authorize the County Administrator or designee to execute the Lease Agreement and any subsequent modifications or amendments
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Department of General Services recommends that the Board of Supervisors:
1. Approve a Lease Agreement (Attachment A) for 1,890 square feet of office space at 2220C Boynton Ave., in the City of Fairfield commencing May 1, 2024 and expiring April 30, 2029, at a base rent of $6,004 per month, with three (3) percent annual increases and six (6) months of prior rent totaling $17,580 due at commencement; and
2. Authorize the County Administrator or designee to execute the Lease Agreement and any subsequent modifications or amendments.
SUMMARY/DISCUSSION:
The County Probation Department currently operates its Youth Services Programs and Supervision Center at 709 Beck Ave. in Fairfield. Additional office space of approximately 1,890 square feet located at 2220C Boynton Ave., in the same building and adjacent to the existing office space at 709 Beck Ave., is needed to support the Youth Services Programs and Supervision Center. The proposed lease at 2220C Boynton Ave. will be for an initial 5-year term with two successive and separate 3-year extension options. The lease rate will be consistent with the market rate that the County is currently paying for the office space at 709 Beck Avenue. The tenant improvements required to improve the space to meet the program requirements of the Probation Department will be provided by the Lessor and amortized as additional rent over the initial 5-year term of the lease.
The rent consists of a market rate base rent of $3,017 per month. Also, the rent will include amortized Lessor tenant improvement reimbursement costs of $2,987 per month, for a total beginning monthly rent of $6,004. In addition, an upfront payment of six (6) months’ prior year base rent of $17,580 at $2,930 per month is due upon lease commencement. Three percent rent increases are included annually for the base rent only. The tenant improvements required to improve the leased space to meet the program requirements of the Probation Department are described in Exhibit B of the Lease Agreement (Attachment A). The estimated tenant improvement cost is $179,220 and will be provided by the Lessor and amortized as additional rent over the initial 5-year term of the lease.
The Probation Department’s Youth Services Programs and Supervision Center includes assessment, case management meetings, employment and education classes, skill development workshops, counseling, drug and alcohol education, and youth development activities such as art, leadership training, prosocial games, safety training, and financial planning. All activities are supervised by a Probation Officer or a trained community-based counselor. Outdoor activities are utilized to engage youth in positive activities and often involve games with a counselor or case manager.
FINANCIAL IMPACT:
The initial term of the Lease Agreement is for a 5-year term commencing May 1, 2024 and expiring April 30, 2029. The monthly total for the first year is $6,004 per month ($72,048 annual). An additional $17,580 equivalent to 6 months prior base rent at $2,930 per month is due upon commencement to compensate for time the landlord held the property vacant at the County’s request. Rent during the first year will total $89,628. The monthly rent consists of a market rate base rent of $3,017 and amortized Lessor tenant improvement costs of $2,987. Three percent rent increases are included annually for the base rent only. The total 5-year lease commitment is $389,033. Additionally, the Lease Agreement has provisions for two successive and separate options to renew the lease term for an additional 3-year period. The lease rental rate and subsequent annual increases are consistent with other County leases for similar property in Fairfield.
Funding for the Lease Agreement is included in Probation Department’s FY2023/24 Working Budget. There is no further financial impact on the County General Fund.
ALTERNATIVES:
The Board of Supervisors may:
1. Choose not to approve the proposed Lease Agreement; or
2. Choose to propose other terms and conditions for the Lease Agreement, which will require additional negotiations with the property owner.
These alternatives are not recommended as the proposed Lease Agreement provides suitable adjacent and cost-effective program space for the Probation Department.
OTHER AGENCY INVOLVEMENT:
County Counsel has reviewed the Lease Agreement as to form. The County Probation Department has been involved in developing the proposed tenant improvements to support its program operations and concurs with the Departmental recommendation.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION