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:

Second Amendment to Lease Agreement with HMB Stone Pine, LLC for office space at 80 Stone Pine Road, Half Moon Bay, for use by UC Cooperative Extension (Lease No. 1267).

RECOMMENDATION:

Adopt a resolution authorizing the:

1. President of the Board to execute a Second Amendment to Lease Agreement with HMB Stone Pine, LLC of 2,730 square feet of office space at 80 Stone Pine Road, Half Moon Bay, California, which extends the expiration date to June 30, 2015 at a monthly base rent of $5,870.00 through June 30, 2012 with annual increases of 3% thereafter, and eliminates the County’s right to terminate the Lease early, and

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

BACKGROUND:

In 1957 the County and University of California Regents entered a Memorandum of Understanding in which the County agreed to provide facilities and staffing in support of the UC Cooperative Extension Agriculture and Resources program in the County. That agreement is now administered by the Health Department. On June 8, 2004, as authorized by Resolution No. 66676, the County and HMB Stone Pine (“Landlord”) entered into a lease of 2,730 square feet of office space at 80 Stone Pine Road, Suite 100 in Half Moon Bay for the program. The lease included an early termination right that would enable the County to terminate on ninety days notice at anytime after March 31, 2005. As authorized by Resolution No. 69079 on October 30, 2007, County and Landlord entered into a First Amendment to Lease Agreement which extended the term to June 30, 2012, modified the base rent, changed the early termination date to June 30, 2010, and set forth ADA improvements to be completed by Landlord. County and Landlord have negotiated an amendment to extend the term, reduce the base rent, and eliminate the early termination right.

DISCUSSION:

Real Property Services has prepared a Second Amendment to Lease Agreement which extends the term of the Lease to June 30, 2015, reduces the base rent from $6,951.00 per month to $5,870.00 per month through June 30, 2012 with 3% annual increases thereafter, eliminates the County’s right to terminate the Lease early, and is otherwise under the terms and conditions set forth in the Lease.

County Counsel has reviewed and approved the Second Amendment and Resolution as to form. The Director of Community Health Services concurs in this recommendation.

Approval of this Amendment contributes to the Shared Vision 2025 outcome of a Healthy Community by continuing to provide an affordable and accessible facility in which UC Cooperative Extension can offer its services to the residents and visitors of the County.

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 $2.15 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:

$2.15

$2.60

FISCAL IMPACT:

The rent of $5,870.00 per month is included in the tentatively adopted FY 2010-11 budget of the Health Department.