COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

June 9, 2008

BOARD MEETING DATE:

June 24, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

4/5ths

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Division

SUBJECT:

First Amendment to Lease Agreement with Kiewit Pacific Co. for Unimproved Land at the Half Moon Bay Airport. (Lease No. 5325)

RECOMMENDATION:

Adopt a resolution:

1.

Authorizing execution of a First Amendment to Lease Agreement with Kiewit Pacific Co., extending the term by four months to April 15, 2009, increasing the area of the Premises to from 18,000 to 41,000 square feet of unimproved land at the Half Moon Bay Airport with a corresponding increase in rent from $4,500 to $10,250 per month, and setting forth a process to authorize further increases to the area of the Premises, and

2.

Authorizing the County Manager or his designee to execute notices, options and documents associated with the First Amendment and Lease including, but not limited to, further expansion of the Premises, extension of the term 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 gain.

The First Amendment to Lease Agreement contributes to this commitment by providing additional space for construction staging in connection with the Devil’s Slide Tunnel Project, which is essential to the Coastside communities.

BACKGROUND:

Kiewit Pacific Co. is the Caltrans contractor constructing the new tunnel and bridge on the Devil’s Slide portion of Highway 1 on the Coast. As authorized by your Board, on April 22, 2008, County and Kiewit entered into a Lease Agreement for approximately 18,000 square feet of unimproved land at the Airport to be used for the staging and storage of materials related to the tunnel project, at a rate of $4,500.00 per month, for a term from May 1, 2008 to December 15, 2008. Kiewit has requested an amendment to the Agreement to extend the term, expand the Premises to 41,000 square feet, and establish a process to allow additional expansions of the Premises as future needs arise.

DISCUSSION:

Real Property Services has negotiated a First Amendment to Lease Agreement, extending the term by four months to April 15, 2009 and increasing the size of the Premises to 41,000 square feet, with a corresponding increase in the monthly rent to $10,250. The Amendment further authorizes the County Manager to agree to future increases in the area of the Premises, provided they are made in 5,000 square foot increments and that there is a corresponding increase in rent. If the area of the Premises increases, the increase will remain in effect through the expiration of the lease term.

County Counsel has reviewed and approved the Amendment as to form. The Director of Public Works and Airport Manager concur with this recommendation.

FISCAL IMPACT:

The estimated revenue of $99,000 for the balance of the lease term, and any additional revenue from further expansions of the premises, will be deposited into the Airport Enterprise Fund.