COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

July 12, 2010

BOARD MEETING DATE:

July 27, 2010

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Steve Alms, Manager, Real Property Division

SUBJECT:

Third Amendment to Lease Agreement with Furneri Properties of office space at 3123 Middlefield Road, North Fair Oaks, California, for use as the Sheriff’s North Fair Oaks Substation. (Lease No. 1213)

RECOMMENDATION:

Adopt a resolution authorizing the:

1. President of the Board to execute a Third Amendment to Lease Agreement with Furneri Properties of 1,866 square feet of office space at 3123 Middlefield Road, North Fair Oaks, for use as the Sheriff’s North Fair Oaks Substation, extending the term through June 30, 2015 with two options to extend the term for one year each, reducing the Base Rent to $3,452.00 per month through June 30, 2011 with annual increases of 3% each year of the term thereafter, and

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

BACKGROUND:

Since 1997, the Sheriff's Office has operated a substation at 3123 Middlefield Road in Redwood City. In 2002, as authorized by Resolution No. 65248, the First Amendment to Lease increased the area of the premises from 954 square feet to 1,866 square feet and extended the expiration to May 31, 2007. At that time, the Landlord made ADA improvements to the premises at its cost. On May 22, 2007, as authorized by Resolution No. 68727, the Second Amendment to Lease extended the term to May 31, 2010 with two options to extend the Lease for one additional year each. The County opted not to exercise the first option to extend the term for one year, and County and Landlord have instead negotiated an amendment to the lease to acknowledge a change in the ownership interest in the property, reduce the base rent and extend the term.

DISCUSSION:

Real Property Services has prepared a Third Amendment to Lease Agreement which acknowledges a change in ownership interest from Furneri Family Partnership to Furneri Properties for Concetta Hayes, Trustee of the Concetta Hayes Exempt Trust - UTD 8/29/78 as AMD; Concetta Hayes, Trustee of the Nicoletta Mustart Exempt Trust - UTD 8/29/78 as AMD; Concetta Hayes, as her sole and separate property; and Nicoletta Mustart, as her sole and separate property. In addition, the Third Amendment extends the term of the Lease for five years to June 30, 2015 with two options to extend the term for one year each, and reduces the base rent from $3,796.49 per month to $3,452.00 per month through June 30, 2011 with 3% annual increases each year of the term thereafter, and is otherwise under the terms and conditions set forth in the Lease.

County Counsel has reviewed and approved the Third Amendment and Resolution as to form. The Sheriff concurs in this recommendation.

Approval of this Amendment contributes to the Shared Vision 2025 outcome of a Healthy Community by promoting safe neighborhoods and maintaining a facility for the Sheriff’s Office in North Fair Oaks so that it can conduct operations in an efficient and timely manner to enhance the health and safety of the community.

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 initial rental rate for the leased area is $1.85 per square foot per month, which compares favorably with the Countywide average asking rate of $2.60 per square foot per month.

Measure

FY 2010-11
Actual

Avg. Asking Rate

San Mateo County

Q1-2010

Monthly Rate:

$1.85

$2.60

FISCAL IMPACT:

The rent of $3,452.00 per month is included in the tentatively adopted FY 2010-11 budget of the Sheriff’s Office.