Agenda Item   



                                                                                                                        ASR Control  18-000225




legal entity taking action:

Board of Supervisors

board of supervisors district(s):


SUBMITTING Agency/Department:

County Executive Office   (Approved)

Department contact person(s):

Scott Mayer (714) 834-3046 



Richard Sanchez (714) 834-2830



Subject:  Health Care Agency Lease at 140 South State College Boulevard in Brea


      ceo CONCUR

County Counsel Review

Clerk of the Board


Approved Agreement to Form




3 Votes Board Majority




    Budgeted: Yes

Current Year Cost:   N/A

Annual Cost: See Financial Impact Section




    Staffing Impact:


# of Positions:

Sole Source:   N/A

    Current Fiscal Year Revenue: N/A

  Funding Source:      See Financial Impact Section

County Audit in last 3 years: N/A



    Prior Board Action:          N/A






Find that the project is categorically exempt from the California Environmental Quality Act (CEQA), Class 1 (Existing Facilities), pursuant to CEQA guidelines, section 15301.



Approve the Chair of the Board to execute the Lease Agreement with BPAP East 140 LLC for 9,738 rentable square feet of office and clinical space for the Health Care Agency located at 140 South State College Boulevard, Suite 150, in Brea, anticipated to commence on or about August 1, 2018, continuing for 10 years and 10 months through April 30, 2029.



Authorize the Chief Real Estate Officer or designee to execute subsequent lease amendments that make non-monetary and/or monetary changes which do not increase County costs by more than $50,000 per year.








Approval of the Lease Agreement with BPAP East 140, LLC, will provide the Health Care Agency with 9,738 rentable square feet of office and clinical space at 140 South State College Boulevard, Suite 150 in Brea, for 10 years and10 months to provide services to emotionally disordered youth and their families.






The Health Care Agency (HCA) and its Children and Youth Behavioral Health (CYBH) division provide a broad range of services for emotionally and/or mentally disordered children and adolescents.  These services include assessments, therapy, case management, medication monitoring, crisis intervention and collateral services to youth and their families. Other services CYBH provides include information for hospitalization, consultation with local education agencies, coordination of services with private and public providers, and case management for Medi-Cal beneficiaries placed in psychiatric hospitals or other 24-hour settings. CYBH has regionally established outpatient clinic locations throughout Orange County where these services are provided. 


HCA's goal was to remain at the current North Orange County Clinic site at 377 E. Chapman Avenue in Placentia (Current Clinic Site), in which the lease is expiring on March 31, 2018. CEO/Real Estate engaged the landlord to discuss expansion and reconfiguration options for the lease renewal.  Although the landlord and County signed a Letter of Intent (LOI) on January 31, 2018, the parties were unable to conclude a mutually acceptable lease extension. The proposed LOI increased the current rent, from $1.72 per rentable square foot (RSF) to $2.15 per RSF, and added an additional 745 RSF to HCA’s total leased space to accommodate program growth.   The County has been required to seek an alternative location. 


The new location at 140 South State College Boulevard in Brea (Premises) offers the County an alternative solution which resulted in both parties negotiating a new 130 month Lease (Proposed Lease).  Under the terms of the Proposed Lease, the first year’s rental rate will be at $2.65 per rentable square foot (RSF) full-service gross, with no pass through for building operating expenses.  This rental rate, which is at current market for the North Orange County area, will increase annually at a fixed three percent.  The Premises will be delivered to HCA in “turn-key” condition according to a mutually agreed upon plan and finish schedule, saving HCA an estimated $730,350 in tenant improvement costs.  And in lieu of free rent, the landlord will provide HCA a moving, furniture, fixtures and equipment allowance of $20 per RSF, which correlates to $194,760, to help reduce HCA’s out of pocket moving expenses. The commencement of the Proposed Lease will be based upon substantial completion of the tenant improvements, which is anticipated to be at or about August 1, 2018. 


The Proposed Lease allows a termination option upon evidence of loss of program funding and at least 365 days written notice, with a termination fee equal to the unamortized leasing costs at eight percent.  To provide further flexibility and stability to HCA, there are two five-year options to extend the lease.


The Proposed Lease is consistent with HCA’s program goals and the location is central, close to freeways and public transportation to best meet client needs.  The new space also allows the flexibility and ability to grow as the program may require for future years.


The County and the landlord at the Current Clinic Site are actively negotiating a mutually acceptable short term renewal for the continued occupancy at that site for the period between the expiration of the current lease and the commencement of the Proposed Lease at the new Premises.


Compliance with CEQA:  The proposed project is Categorically Exempt (Class 1) from the provisions of CEQA pursuant to Section 15301, because it involves leasing of existing private facilities for health care services involving negligible or no expansion of use beyond that currently existing.






Appropriations for this lease are included the Health Care Agency’s FY 2017-18 Modified Budget and will be included in the budgeting process for future years.



FY 2018-19

$ 283,866

FY 2024-25

$ 368,859

FY 2019-20

$ 318,186

FY 2025-26

$ 379,931

FY 2020-21

$ 327,727

FY 2026-27

$ 391,328

FY 2021-22

$ 337,566

FY 2027-28

$ 403,071

FY 2022-23

$ 347,694

FY 2028-29

$ 380,481

FY 2023-24

$ 358,121




The above table of fiscal-year cost is based upon an August 1, 2018, commencement date.


Funding Source:



57% (2011 Realignment - Early and Periodic Screening, Diagnostic and Treatment, and Mental Health Realignment)


41% (Federal Financial Participation Medi-Cal)












Health Care Agency




Attachment A - Lease
Attachment B - Lease Summary
Attachment C - Acquisition Questionnaire
Attachment D - Location Map