DATE: January 21, 2020
TO: Board of Supervisors
SUBMITTED BY: Delfino Neira, Director, Department of Social Services
Robert W. Bash, Director of Internal Services/Chief Information Officer
SUBJECT: Lease Agreement with Kosla Properties, LLC for Office Space at 3830 McCall Ave., Selma
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize the Chairman to execute a lease agreement with Kosla Properties, LLC, for 21,440 square feet of office space at 3830 McCall Ave, Selma, CA 93662, for use by the Department of Social Services, effective upon the first date of occupancy, not to exceed 19 consecutive years, total not to exceed $13,112,149.
2. Authorize the Director of Internal Services to terminate L-281 (Agreement #13-511) upon completion of tenant improvements at 3830 McCall Ave., Selma, CA 93662.
REPORT
Approval of the first recommended action will authorize the execution of a 19-year lease for 21,440 square feet of office space for the Department of Social Services to continue providing services to Selma residents. The maximum for the first year’s rent under the recommended lease is $240,000, and will increase by 2% annually. The County currently leases space from this property owner under Lease L-281. Approval of the second recommended action will allow the Director of Internal Services to terminate L-281 upon completion of the tenant improvements at the new space. This item pertains to a location in District 4.
ALTERNATIVE ACTION(S):
Your Board could opt not to approve the recommended actions and have the Department wait for the current lease to expire in 2021; however, the proposed building may not be available at that time.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended action. The maximum amount of the recommended Lease Amendment for the nineteen-year term is $13,112,149, which includes $5,481,734 in rent and $7,630,415 in tenant improvements. The cost for the Agreement will be offset with State and Federal Social Services Allocations ($11,315,066), and 2011 Realignment ($1,148,883) in lieu of State General Funds for Child Welfare Services, and Adult Protective Services Programs that were realigned to counties through Assembly Bill (AB) 118, 1991 Social Services Realignment ($568,884), and the required Net County Cost ($79,316) which offsets the General Relief Program share of cost. Total cost for the first year will be $641,601. Sufficient appropriations and estimated revenues will be included in the FY 2020-21 Recommended Budget for the Department of Social Services, Organization 5610, and will be included in subsequent budgets.
DISCUSSION:
The Selma Regional Center provides services to Selma residents and the surrounding areas. Services provided include CalWORKs, Employment Services for CalWORKs recipients, CalFRESH, General Relief, Medi-Cal, and Child Welfare Services among other services. Approval of the first recommended action will lease 21,440 square feet of office space located at 3830 McCall Avenue, Selma, CA 93662, to be used by the Department of Social Services (DSS). Rent for the first year will be $20,000 per month ($0.93 per square foot), and will increase by 2% annually. In addition to rent, tenant improvements will be amortized over the 19-year term, at an amount not to exceed $33,467 monthly.
The County currently leases space at 3800 and 3810 McCall Avenue, Selma, CA 93662 from the same landlord. The existing space has been leased by the County since October 1999, and no longer meets the functional needs of the Department. Operational efficiencies will be gained by the configuration of the new space being designed to fit desired business practices. This will ultimately allow the community to receive a higher level of service.
Both the landlord and DSS are agreeable to terminating the current lease (L-281) before its term expires in 2021, and relocating to the new space, at 3830 McCall Avenue. Authorizing the Director of Internal Services to terminate the current lease with the written consent of the landlord will allow the Director of ISD the flexibility necessary to ensure timely occupancy of the new space.
REFERENCE MATERIAL:
BAI #58, August 20, 2013
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Agreement
CAO ANALYST:
Ronald Alexander