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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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County Manager's Office
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DATE:
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December 6, 2001
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BOARD MEETING DATE:
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December 11, 2001
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TO:
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Honorable Board of Supervisors
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FROM:
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Paul T. Scannell, Assistant County Manager
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SUBJECT:
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Sublease of a portion of the building at 1133 Industrial Road, San Carlos for the use of Employee and Public Services for storage of surplus property, the Sheriff for evidence storage and retrieval, and the Superior Court for record storage and retrieval.
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Recommendation
Adopt a Resolution authorizing the Board President to execute a Sublease Agreement for a portion of the building at 1133 Industrial Road, San Carlos, and authorizing the Assistant County Manager to execute such sub-agreements needed to assure full utilization of the Premises throughout the term of the sublease.
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Background
Surplus Property currently occupies a portion of the Fair Oaks Service Center building at 2710 Middlefield Road, Redwood City, comprised of approximately 3,200 square feet of warehouse space. Health Services occupies a portion of the same building, and plans to increase the size of the Service Center at that site. Moving the Surplus Property operation will make sufficient space available at the Middlefield Road location to accommodate the planned Health Services expansion.
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The Office of the Sheriff does not currently have sufficient secure evidence storage in close proximity to the Hall of Justice.
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The Superior Court currently stores records at 2700 Middlefield Road, and in the County's Elections Building. The Court needs ready access to retrieve records on a daily basis.
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Discussion
The proposed sublease of 25,395 square feet of warehouse space at 1133 Industrial Road provides a long term agreement (_10 years, including extension option) at a fixed rental rate that is at or below current market rates.
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Surplus Property will occupy _ 4,890 square feet, the Sheriff _ 4,675 square feet, and the balance of _15,830 will be occupied by the Court.
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Under a sub-agreement with the County, the Court will make the necessary improvements to the premises to create three separate, secure areas within the premises. Upon completion of the improvements, the County will reimburse the Court for its prorata share of the improvement costs, which share is estimated to be between $40,000 and $50,000, but which would in no event exceed $60,000. Reimbursement by the County will be in the form of a monthly rent offset to Court's rent under the sub-agreement, which offset will be in an amount sufficient to amortize County's proportionate share of the improvement costs over the initial term of the sublease.
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Surplus Property will occupy approximately 53% more space at the new premises than in its current location, with a rent increase of approximately 29%. The initial increase includes amortization of the Surplus Property proportionate share of leasehold improvements in the sum of approximately $496 per month. The amortization period ends April 30, 2006, at which time the Surplus Property rent will decrease by that amount
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The Sheriff's rent per square foot will be the same as that paid by Surplus Property, and will include approximately $474 per month for the Sheriff's proportionate share of the amortization of improvements.
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The Court's space planner has prepared preliminary plans, and its contractor has provided construction cost estimates. Final construction costs are not yet available, but timely approval and execution of this sublease will protect the County's rights in relation to this economically advantageous agreement.
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Fiscal Impact
The initial monthly rent for Surplus Property, including amortization of improvement costs, will increase by approximately $882 per month through the end of the fiscal year. That amount will need to be absorbed in the current Employee and Public Services budget.
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The initial monthly rent, including amortization of improvement costs, for the Sheriff's portion of the premises will be approximately $3,780, which is available from a combination of federal grant funds and the current budget of the Office of the Sheriff.
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The Court has agreed to pay its proportionate share of the monthly rent, estimated at the initial rate to be $10,226. Court has further agreed to contract for the necessary leasehold improvements, and to pay the cost thereof, subject to reimbursement by County of its prorata share of such costs.
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The Executive Officer of the Court, Sheriff and Director of Employee and Public Services concur with this recommendation.
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