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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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County Counsel and San Mateo Medical Center
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DATE:
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February 14, 2008
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BOARD MEETING DATE:
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March 11, 2008
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Michael P. Murphy, County Counsel
Sang-ick Chang, CEO, San Mateo Medical Center
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SUBJECT:
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Termination of Sublease Agreement Between the County of San Mateo and Carmichael and Associates
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RECOMMENDATION:
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Adopt a resolution ratifying the notice of termination of the sublease agreement between the County of San Mateo and Carmichael and Associates.
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VISION ALIGNMENT:
Commitment: This action keeps the commitment to Ensure Basic Health and Safety for All.
Goal(s): Provide residents access to health care and preventive care. This action contributes to this commitment and goal by ensuring that County health care resources are allocated in the most efficient and effective ways possible.
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BACKGROUND:
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Effective as of January 15, 2007, the County entered into a sublease agreement with Carmichael & Associates, which holds a master lease for space on East Hillsdale Boulevard in Foster City, in a building known as Mariner Medical Center. The San Mateo Medical Center (SMMC) uses the space at Mariner Medical Center to collocate specialist physicians in order to provide services to County residents who receive medical care at Mariners.
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Pursuant to the sublease agreement, the County subleased approximately 4,200 square feet of space for a monthly payment of $3.50 per square foot (or $13,650 per month). The term of the sublease agreement runs through January 1, 2010. Under the sublease agreement, the County may terminate it upon six months’ prior notice, which notice may be given at any time after the first year of the agreement. Thus, as of January 15, 2008, the County may give notice of its intent to terminate in six months.
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The Office of the County Counsel has provided Carmichael and Associates with a letter indicating the intent of staff to recommend to this Board that the sublease be terminated, effective six months from January 15, 2008.
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DISCUSSION:
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The San Mateo Medical Center and its Board of Directors have closely monitored the sublease and the results for the County’s operations at Mariner. In addition, consultants have assessed the San Mateo Medical Center operations at Mariner. They have concluded that, while the County’s operations at Mariner might become profitable in the long term, such a result is not likely in the near future and that a continued presence there would require substantial additional investment of staff time and County resources.
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FISCAL IMPACT:
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Adoption of this action will save $13,650 per month of rent payments for the last eighteen months of the sublease term (or a total of $245,700.00).
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