DATE: September 22, 2026
TO: Board of Supervisors
SUBMITTED BY: Daniel Lynch, Interim Director, General Services Department
Susan L. Holt, Director, Department of Behavioral Health
SUBJECT: Lease Agreement with Fresno-Air Ltd
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize the Chairman to execute a Lease Agreement with Fresno-Air Ltd for approximately 38,921 square feet of office space located at 2719 N. Air Fresno Drive, Suite 107, Fresno, California 93727, for continued use by the Department of Behavioral Health, effective October 1, 2026, which includes a three-year base term and two optional one-year extensions, with base rent not to exceed $2,288,555 and operating costs not to exceed $696,805, for a total maximum of $2,985,359;
2. 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 Agreement, if requested by Lessor to sign such documents; and
3. 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 Agreement.
REPORT
There is no additional Net County Cost associated with the recommended actions, which will allow the Department of Behavioral Health (DBH) to continue leasing approximately 38,921 square feet of office space and 152 parking spaces at 2719 N. Air Fresno Drive, Suite 107, Fresno, California 93727 (Premises) for its Children’s and Transitional Age Youth Clinical Outpatient operations. This item pertains to a location in District 3, but services are provided countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve the first recommended action, staff will seek an alternative location for DBH to provide services and request authorization of a Lease Agreement with Fresno-Air Ltd (Lessor) for the duration necessary to secure a new location.
Should your Board not approve the second or third recommended actions, staff will return before your Board for execution of any further documents required for the administration of the leased premises.
FISCAL IMPACT:
There is no additional Net County Cost associated with the recommended actions. Rent is approximately $36,586 per month for the first year of the term and increases 2% annually. Operating costs are approximately $10,509 per month and may increase up to 5% annually, as requested and justified by the Lessor. Sufficient appropriations and estimated revenues will be included in the DBH Org 5630 FY 2026-27 Recommended Budget and future Recommended Budget requests for the duration of the Lease Agreement term.
DISCUSSION:
On August 9, 2022, the Board executed Lease Agreement No. A-22-344 for use of the Premises for a two-year term, totaling $837,499. The Lease Agreement allowed DBH to relocate its Children’s and Transitional Age Youth Clinical Outpatient operations amid ongoing tenant improvements at the Heritage Center.
On December 17, 2024, the Board executed Amendment No. 1 to Lease Agreement No. A-22-344 (A-24-663), extending the term for two additional years through September 30, 2026, and increasing the maximum rent by $870,997 to a total base rent of $1,708,496. The Amendment allowed DBH to continue operations on the Premises while construction continues on the Olive Campus, located at 5555 E. Olive Avenue, which will eventually house both the DBH Children and Adult Clinical Outpatient operations.
The recommended Lease Agreement includes a three-year base term with two optional one-year extensions, with a total maximum of $2,985,359 over the potential five-year term. The recommended Lease Agreement maximum includes base rent and operating costs that are reconciled at the end of each term year. The recommended Lease Agreement deviates from County’s standard termination language by allowing for termination without cause by giving 180 days advanced written notice, provided that such notice is only submitted after 18 months; this aligns with DBH’s long-term plan to transition from the Premises to the Olive Campus once the facility is ready for occupancy.
REFERENCE MATERIAL:
BAI #38, December 17, 2024
BAI #35, August 9, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Lease Agreement with Fresno-Air Ltd
CAO ANALYST:
Amy Ryals