DATE: September 8, 2026
TO: Board of Supervisors
SUBMITTED BY: Daniel Lynch, Interim Director, General Services Department
Joe Prado, Director, Department of Public Health
Sally Gomez, County Librarian
Sanja Bugay, Director, Department of Social Services
Susan Holt, Director, Department of Behavioral Health
SUBJECT: Retroactive Amendments to West Fresno Regional Center Lease Agreements
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize the Chairman to execute a retroactive Second Amendment to Lease Agreement No. A-08-302 with Edison Plaza Partners, LP, for approximately 29,828 square feet of office space located at 142 East California Avenue, Fresno, California 93706, for continued use by the Department of Behavioral Health, Department of Public Health and Department of Social Services, extending the term by approximately eight years from January 21, 2026, through January 31, 2034, increasing the base rent by $6,481,210 to $22,714,675;
2. Approve and authorize the Chairman to execute a retroactive Third Amendment to Lease Agreement No. A-08-303 with Edison Plaza Partners, LP, for approximately 8,431 square feet of office space located at 188 East California Avenue, Fresno, California 93706, for continued use by the Library, amending language relating to the option to purchase and extending the term by approximately eight years from January 21, 2026, through January 31, 2034, increasing the base rent by $1,833,723 to $6,266,887;
3. Authorize the Director of General Services, or their designee, to approve and execute, upon review and approval as to legal form by County Counsel, an Estoppel Certificate, and Subordination and Non-Disturbance Agreement relating to the recommended Lease Agreements, if requested by Lessor to sign such documents; and
4. Authorize the Director of General Services, or their designee, to approve and execute (or accept, as applicable), upon review and approval as to legal form by County Counsel, (a) a Memorandum of Lease, and any notices, instruments, certificates, and documents, relating to the consummation of the recommended Lease Agreement, and (b) any notices and documents relating to the County’s administration of the leased premises under the recommended Lease Agreements.
REPORT
There is no increase in Net County Cost associated with the recommended actions, which will allow the Department of Behavioral Health (DBH), Department of Public Health (DPH), Department of Social Service (DSS), and the Library to continue collectively leasing approximately 38,259 square feet (sq. ft.) of space at 142 and 188 East California Avenue, Fresno, California 93706 (Premises, also known as the West Fresno Regional Center).
The first recommended action will execute a retroactive Second Amendment to Lease Agreement No. A-08-302 (Second Amendment) for approximately 29,828 sq. ft. of office space at 142 East California Avenue currently used by DBH, DPH, and DSS for various human services operations, increasing the term length by approximately eight years through January 31, 2034, subsequently increasing the base rent by $6,481,210 to $22,714,675 for the potential 24-year lease.
The second recommended action will likewise execute a retroactive Third Amendment to Lease Agreement No. A-08-303 (Third Amendment) for approximately 8,431 sq. ft. of office space at 188 East California Avenue, inclusive of public/common area space and an outside reading area, for operation of the West Fresno Regional Library, amending previous language about the option to purchase, increasing the term length by approximately eight years, and subsequently increasing the base rent by $1,833,723 to $6,266,887 for the potential 24-year lease.
The third and fourth recommended actions will allow the Director of General Services, or their designee, to approve and execute standard documents for the administration of both leases. This item pertains to a location in District 1, but services are provided countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve the first and second recommended actions, your Board may direct staff to find an alternative location, or locations, for DBH, DPH, DSS, and the Library to otherwise provide services and only authorize recommended Lease Amendments with Edison Plaza Partners, LP (Lessor) for the duration necessary to secure the new location(s).
Should your Board not approve the third or fourth recommended actions, staff would return to your Board for execution of any further documents required to lease the Premises.
RETROACTIVE AGREEMENT:
Both recommended Lease Agreements are retroactive to January 21, 2026, due to extended contract negotiations.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended actions. Rent for the recommended Second Amendment is $59,656 per month for the first approximate five months of the extension term, increasing 2.5% annually, and will be funded with Federal Financial Participation (DBH); 1991 Realignment funds (DBH, DPH); State Maternal Child Adolescent Health funds, State Black Infant Health Program grants (DPH); and 2011 Realignment funds (in lieu of State General Funds for Child Welfare Services and Adult Protective Services programs that were realigned to counties through Assembly Bill 118), Net County Cost which offsets the General Relief Program share of cost, and State General Funds (DSS).
Rent for the recommended Third Amendment is $16,862 per month for the first approximate five months of extension term, increasing 2.5% annually, and will be funded by Measure B library sales tax and property tax revenues.
Both leases include operating costs billed at each department’s pro-rata share of triple net building expenses, paid monthly at a fixed rate and adjusted annually each calendar year to account for difference between the paid amount and actual costs.
Sufficient appropriations and estimated revenues will be included in the DBH Org 5630, DPH Org 5620, DSS Org 5610, and Library Org 7511 FY 2026-27 Recommended Budgets and future Recommended Budget requests for the duration of the Lease Agreements’ terms. To date, there is approximately $1,210,079 in both base rent and operating costs for both Lease Agreements owed to the Lessor, including $661,568 in base rent and $280,803 in operating costs for Lease Agreement No. A-08-302, and $188,779 in base rent and $78,929 in operating costs pending for Lease Agreement No. A-08-303.
DISCUSSION:
On June 17, 2008, the Board approved Lease Agreements No. A-08-302 (Human Services Lease) and A-08-303 (Library Lease) for approximately 38,259 sq. ft. of space to support various DBH, DPH, DSS, and Library operations. These operations include employment services and public assistance programs, clinical assessment, case management, and brief interventions to substance abuse and mental health clients, children’s welfare and mental health services, nurse case management and programs to serve high risk pregnancies and parenting women, as well offering children, young adult, and adult reading materials and programs. The Human Services Lease included a 16-year term to lease 29,037 sq. ft. with base rent totaling $15,374,148. Similarly, the Library Lease had a 16-year term to lease9,222 sq. ft. totaling $4,731,675. All departments occupied the space effective January 21, 2010, with the 16-year terms expiring on January 21, 2026.
On December 8, 2009, the Board approved the First Amendment to the Library Lease, which removed the requirement to pay real property tax by the Library for the term of the lease as the California Constitution, Section 3(d) of Article XXIII, sections 202, 202.2, 254, 259.8 or 259.9 of the Revenue and Taxation Code exempts paying real property tax if the property is being used by a free public library. There was no change to the term length or base rent.
On January 11, 2011, the Board approved the First Amendment to the Human Services Lease and Second Amendment to the Library Lease, reallocating 791 sq. ft. from the Library’s space to that shared by DBH, DPH, and DSS, reducing the total sq. ft. under the Library’s Lease to 8,431, and increasing the Human Services leased space increased to 29,828 sq. ft. There was no change in the term for either lease, but total base rent for the Human Services Lease increased to an estimated $16,233,465 and the Library’s total base rent decreased to $4,433,164. The method of paying operating costs has remained the same through all amendments; building operating costs are billed at a fixed rate and adjusted annually each calendar year to account for any over or underpayment based on actual operating costs. The new rate for the calendar year is based on the average of the previous year’s actual expenses.
The recommended Lease Amendments both include an approximate eight-year extension, increasing the total term length to 24 years. The base rent rate under both lease agreements will decrease to $2 per sq. ft., which was negotiated and adjusted to better match the current market value. The new rate schedule will be prorated beginning September 9, 2026, and remain in effect through January 31, 2027, and will increase by 2.5% annually for the remainder of the lease terms. Operating costs will continue to be paid at a fixed rate and adjusted each year. DBH, DPH, DSS and the Library each owe back rent from January 22, 2026, through September 8, 2026, for continued use of the West Fresno Regional Center during amendment negotiations, which will be paid under the rent rate in the Original Agreements.
The first recommended action will approve the retroactive Second Amendment, increasing the term and adjusting the rent as applicable. The second recommended action will approve the retroactive Third Amendment, increasing the term, adjusting the rent accordingly, and changing language relating to the County’s option to purchase the entire building, not just the Library’s leased portion. These recommended changes to the option to purchase language better define the process for fair market valuation for ease of negotiations if a notice of option of purchase is provided in the future.
The original term length of each Lease expired during the parties’ negotiations to extend and amend the leases. The recommended Lease Amendments, which therefore retroactively extend the term length of each lease, do deviate from the County’s standard practice of bringing new Lease Agreements before your Board when the original term has expired. Approval is recommended based on the specific circumstances of the recommended Lease Amendments, in order to maintain continuity of DBH, DPH, DSS, and Library operations at the West Fresno Regional Center and avoid disrupting services to the public.
REFERENCE MATERIAL:
BAI #39, January 11, 2011
BAI #22, December 8, 2009
BAI #55, June 17, 2008
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Second Amendment to A-08-302
On file with Clerk - Third Amendment to A-08-303
CAO ANALYST:
Amy Ryals