COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

December 26, 2006

BOARD MEETING DATE:

January 23, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Division

SUBJECT:

Sublease with Carmichael & Associates for medical offices in Foster City, California for use by San Mateo Medical Center (Sublease No. 1280).

RECOMMENDATION:

Adopt a resolution authorizing:

1. The Board President to execute a Sublease Agreement with Carmichael & Associates for 4200 square feet of medical offices at 1241 East Hillsdale Boulevard, Foster City, California at a rate of $163,800 per year, and

2. The County Manager or designee to accept or execute on behalf of the County, any and all notices, options, consents, approvals, terminations and documents in connection with the Sublease.

VISION ALIGNMENT:

Commitment: Ensure basic health and safety for all.

Goal 8: Help vulnerable people – the aged, disabled, mentally ill, at-risk youth and others – achieve a better quality of life. This sublease contributes to this commitment and goal by increasing the capacity of the County to offer medical services to the community.

PERFORMANCE MEASURES:

This facility consists of medical office space. Market rates for medical space are significantly higher than for general office space. Although the rate of $3.25 per square foot per month is significantly higher than the Countywide average asking rate of $2.32 per square foot for general office space, it compares favorably with other premium medical space in the County, which leases for approximately $4.25 per square foot per month. In addition to improvements typically offered in the marketplace, Carmichael & Associates, (“Sublandlord”), will furnish and equip the premises.

Measure

Actual

County-wide

Average Asking Rate:

$3.25 per sq. ft.

$2.32 per sq. ft.

BACKGROUND:

San Mateo Medical Center (SMMC) has determined that it would be advantageous to rent space at this facility. Specifically, SMMC anticipates that colocating certain selected specialist physicians at this facility will increase access to specialist medical care for County residents, as there are currently space and capacity limits at SMMC’s facilities.

Sublandlord has a master lease in place for approximately 10,000 square feet of space at 1241 E. Hillsdale Boulevard in Foster City, California. Sublandlord proposed to sublease approximately 4200 square feet of rentable space on the second floor of the building. Improvements needed to bring the facility into compliance with ADA Requirements have been identified and are being completed by Sublandlord.

DISCUSSION:

The Sublease will be for a term of three years beginning January 1, 2007. SMMC has the right to terminate after one year, with six months notice in writing. Sublandlord shall be solely responsible to improve, furnish and equip the premises.

The Director of the Health Department and the ADA Compliance Committee concur with this recommendation.

FISCAL IMPACT:

The current lease rate is $163,800 per year, payable at the rate of $13,650 per month. Adequate funds have been budgeted in the adopted 2006/2007 fiscal year budget.