COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

July 6, 2010

BOARD MEETING DATE:

July 13, 2010

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Division

SUBJECT:

Seventh Lease Amendment with Ferrando and Franceschini, a Partnership, Extending a Lease of Approximately 30,413 Square Feet of Office and Warehouse Space at 2700 Middlefield Road in Unincorporated North Fair Oaks (Lease No. 1173)

RECOMMENDATION:

Adopt a resolution authorizing the:

1. President of the Board of Supervisors to execute a Seventh Amendment to Lease Agreement with Ferrando and Franceschini, a partnership, for approximately 30,413 square feet of office and warehouse space at 2700 Middlefield Road in Unincorporated North Fair Oaks, at a flat monthly rate of $56,910, and extending the term to August 14, 2015 with a right for the County to terminate by giving twelve months notice at any time after August 14, 2012, and

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

BACKGROUND:

Since 1989, the County has leased approximately 8,484 square feet of clinic space and 21,451 square feet of warehouse space on Middlefield Road in Unincorporated North Fair Oaks. The Medical Center operates a primary care adult health clinic at this site. The warehouse space is shared with the Public Administrator and the Public Guardian. The County has occupied the premises on a month to month basis since August 2009 in accordance with the holdover provision of the existing lease.

DISCUSSION:

The Seventh Lease Amendment extends the term of the Lease through August 14, 2015, and provides the County with the right to terminate early by giving 12 months written notice to the Landlord at any time after August 14, 2012, resulting in a minimum extension of three years from the date of the Lease Amendment.

County Counsel has reviewed and approved the Resolution and the Seventh Amendment as to form. The Chief of the Health System concurs in this recommendation.

Approval of this Agreement contributes to the Shared Vision 2025 outcome of a Healthy Community by maintaining vital services in the North Fair Oaks community while the County continues to explore plans for the long term location of these services.

Performance Measure(s):

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 extended term is $1.87 per square foot per month, which has been in effect since August 2008. The rate reflects the high ratio of warehouse space and the short term nature of the extension. The Countywide average asking rate for office space is $2.60 per square foot per month.

Measure

FY 2010-11
Actual

Avg. Asking Rate

San Mateo County

Q1-2010

Monthly Rate:

$1.87

$2.60

FISCAL IMPACT:

The rent of $56,910 per month is included in the Health System tentatively adopted budget for Fiscal Year 2010-11.