COUNTY OF SAN MATEO

COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

January 28, 2008

BOARD MEETING DATE:

February 12, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Division

SUBJECT:

Second Amendment to Lease Agreement with Borel Estate Company of office space at 1700 South El Camino Real, San Mateo, for First Five San Mateo County (Lease No. 1259).

RECOMMENDATION:

Adopt a resolution:

1. Authorizing the execution of a Second Amendment to Lease Agreement with Borel Estate Company of office space at 1700 South El Camino Real, San Mateo, which extends the expiration date to October 31, 2012 with two options to extend for one year each and increases the leased area to 2,997 square feet, at an initial monthly rent of $7,492.50, with a one-time charge of $35,000.00 for improvement work, and

2. Authorizing the County Manager or his designee to execute notices, options and documents associated with the Second Amendment and the Lease including, but not limited to, extension or termination of the agreement under the terms set forth therein.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government

Goal 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. This Amendment contributes to this commitment and goal by continuing to provide a centrally located and affordable facility in which First 5 can provide services to the residents of the County.

PERFORMANCE MEASURES:

Real Property Services strives to maintain an average cost of leased facilities that compares favorably with the average asking rate for comparable facilities in the County. The rental rate for the leased area is $2.50 per square foot per month, which compares favorably with the Countywide average asking rate of $3.33.

Measure

Lease – Actual

FY 2007/2008

Avg. Asking Rate

San Mateo County

Q4-2007

Monthly Rate:

$2.50 per sq. ft.

$3.33 per sq. ft.

BACKGROUND:

In 2002, the County entered into a lease of 1,855 square feet of office space at 1700 South El Camino Real, Suite 405 in San Mateo for First 5 San Mateo County. In 2003, the County entered into the First Lease Amendment, which increased the area of the Premises to 2,278 square feet with a corresponding increase in rent. The current lease expired on October 31, 2007. The County has remained in the premises on a month-to-month basis while the terms of the Amendment were negotiated, including necessary ADA improvements.

DISCUSSION:

Real Property Services has negotiated the Second Lease Amendment, which extends the termination date to October 31, 2012 and increases the leased area of the premises to 2,997 square feet. In addition, the amendment increases the rent to an initial monthly rate of $7,492.50, with annual increases of 3%.

Improvements needed to bring the facility into compliance with current ADA requirements have been identified in the County’s transition plan. As a condition of the amendment, the landlord has agreed to make certain improvements at its sole cost within six months of execution of the amendment.

The Landlord has also agreed to make ADA improvements to one of the restrooms, as well as improvements to the office space requested by First 5, at County’s cost, with an estimated budget of $35,000. The improvements will be completed within six months of execution of the amendment.

The amendment is otherwise on the same terms and conditions contained in the Lease.

County Counsel has reviewed and approved the Amendment as to form. The Director of First 5, the First 5 Commission and the ADA Compliance Committee concur with this recommendation.

FISCAL IMPACT:

The initial monthly rent of $7,492.50 and the one-time charge of $35,000.00 for the improvement work are included in First 5’s Adopted Budget for Fiscal Year 2007-08.



COUNTY OF SAN MATEO Inter-Departmental Correspondence
County Manager’s Office

DATE:		January 28, 2008
BOARD MEETING DATE:		February 12, 2008
SPECIAL NOTICE/HEARING:		None
VOTE REQUIRED:		Majority

TO:	Honorable Board of Supervisors
FROM:	Steve Alms, Manager, Real Property Division
SUBJECT:	Second Amendment to Lease Agreement with Borel Estate Company of office space at 1700 South El Camino Real, San Mateo, for First Five San Mateo County (Lease No. 1259).

RECOMMENDATION:
Adopt a resolution: 1. Authorizing the execution of a Second Amendment to Lease Agreement with Borel Estate Company of office space at 1700 South El Camino Real, San Mateo, which extends the expiration date to October 31, 2012 with two options to extend for one year each and increases the leased area to 2,997 square feet, at an initial monthly rent of $7,492.50, with a one-time charge of $35,000.00 for improvement work, and 2. Authorizing the County Manager or his designee to execute notices, options and documents associated with the Second Amendment and the Lease including, but not limited to, extension or termination of the agreement under the terms set forth therein.

VISION ALIGNMENT:
Commitment: Responsive, effective and collaborative government
Goal 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. This Amendment contributes to this commitment and goal by continuing to provide a centrally located and affordable facility in which First 5 can provide services to the residents of the County.

PERFORMANCE MEASURES:
Real Property Services strives to maintain an average cost of leased facilities that compares favorably with the average asking rate for comparable facilities in the County. The rental rate for the leased area is $2.50 per square foot per month, which compares favorably with the Countywide average asking rate of $3.33.
Measure Lease – Actual FY 2007/2008 Avg. Asking Rate San Mateo County Q4-2007 Monthly Rate: $2.50 per sq. ft. $3.33 per sq. ft.

BACKGROUND:
In 2002, the County entered into a lease of 1,855 square feet of office space at 1700 South El Camino Real, Suite 405 in San Mateo for First 5 San Mateo County. In 2003, the County entered into the First Lease Amendment, which increased the area of the Premises to 2,278 square feet with a corresponding increase in rent. The current lease expired on October 31, 2007. The County has remained in the premises on a month-to-month basis while the terms of the Amendment were negotiated, including necessary ADA improvements.

DISCUSSION:
Real Property Services has negotiated the Second Lease Amendment, which extends the termination date to October 31, 2012 and increases the leased area of the premises to 2,997 square feet. In addition, the amendment increases the rent to an initial monthly rate of $7,492.50, with annual increases of 3%. Improvements needed to bring the facility into compliance with current ADA requirements have been identified in the County’s transition plan. As a condition of the amendment, the landlord has agreed to make certain improvements at its sole cost within six months of execution of the amendment. The Landlord has also agreed to make ADA improvements to one of the restrooms, as well as improvements to the office space requested by First 5, at County’s cost, with an estimated budget of $35,000. The improvements will be completed within six months of execution of the amendment. The amendment is otherwise on the same terms and conditions contained in the Lease.

County Counsel has reviewed and approved the Amendment as to form. The Director of First 5, the First 5 Commission and the ADA Compliance Committee concur with this recommendation.

FISCAL IMPACT:
The initial monthly rent of $7,492.50 and the one-time charge of $35,000.00 for the improvement work are included in First 5’s Adopted Budget for Fiscal Year 2007-08.