Agenda Item AGENDA STAFF REPORT ASR Control 23-000317
MEETING DATE:	06/27/23
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	2
SUBMITTING Agency/Department:	County Executive Office (Approved)
Department contact person(s):	Thomas A. Miller (714) 834-6019
	An Tran (714) 541-7712

Subject: Social Services Agency Second Amendment to Lease at 744 & 746 Eckhoff in Orange

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Discussion

3 Votes Board Majority

Budgeted: N/A

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: State:60%; FED:34%; GF:6%	County Audit in last 3 years: No
Levine Act Review Completed: Yes

Prior Board Action: 7/26/2022 #21; 3/19/2002 #45

RECOMMENDED ACTION(S):

Approve and execute a Second Amendment to Lease Agreement with IPT Partners, LLC, a California limited liability company, for approximately 46,686 rentable square feet of office and warehouse space located at 744 and 746 Eckhoff Street in Orange, for Social Services Agency/Children and Family Services use, for a term of 12 months, commencing on August 1, 2023, and terminating July 31, 2024, with total rent not to exceed $1,476,990, with an additional one-year option to extend the term under the same terms and conditions of the lease agreement.

Authorize the Chief Real Estate Officer or designee to exercise subsequent one-year option to extend the lease term pursuant to the Second Amendment to Lease Agreement with IPT Partners, LLC, a California limited liability company, under the same terms and conditions, commencing on August 1, 2024, through July 31, 2025, with total rent not to exceed $1,523,015.

Authorize the Chief Real Estate Officer or designee to execute subsequent documents, option terms and amendments that make non-monetary changes and/or monetary changes which do not increase County liability, obligations or cost by more than $75,000 per year, as approved by County Counsel.

SUMMARY:

Approval of the Second Amendment to Lease with IPT Partners, LLC, which extends the term of the lease for an additional year, will allow Social Services Agency’s continued use of 46,686 square feet of office and warehouse space located at 744 and 746 Eckhoff in Orange for its Children and Family Services, with no additional rental or moving costs.

BACKGROUND INFORMATION:

On March 19, 2002, the Board of Supervisors (Board) approved a 10-year lease agreement (Original Lease) with IPT Partners, LLC, a California limited liability company (Lessor), commencing on August 1, 2002, for Social Service Agency’s (SSA) use of 40,581 square feet of office space within a two-story office building and 6,105 square feet within a portion of a one-story warehouse, together approximately 46,686 rentable square feet (RSF), located within the same business complex at 744 and 746 Eckhoff Street in the city of Orange (collectively the Premises), for its Children and Family Services staff (C&FS). The Lease included two additional 5-year options to extend the term (each an Option to Extend).

On November 15, 2011, the County exercised one 5-year Option to Extend through July 31, 2017. On September 1, 2016, the County exercised its remaining Option to Extend for an additional five years through July 31, 2022. Subsequently, a First Amendment to the Original Lease was approved by the Board on July 26, 2022, which extended the term of the Original Lease through July 31, 2023, (First Amendment and Original Lease, collectively referred to herein as the Lease).

C&FS provides services to at risk families designed to protect children from abuse and neglect, by strengthening and stabilizing families in order to create an environment where children are free from abuse in permanent, nurturing homes. The Premises continues to meet programming needs and provides excellent access to clients from the surrounding areas. SSA desires to continue to occupy the Premises, allowing flexibility for current and future program requirements and evaluation of its portfolio optimization strategies.

The Second Amendment to Lease proposes to extend the term of the Lease through July 31, 2024, with a one-year option to extend thereafter, unless terminated sooner (Proposed Second Amendment). Under the terms of the Proposed Second Amendment, the rent for the Premises will remain at the current rental rate of $2.86 RSF per month, which equates to $116,061 for the office space and $1.15 RSF per month, which equates to $7,021, for the warehouse space.

Additionally, the Proposed Second Amendment will provide the County with a new option to extend the term of the Lease for an additional one-year period, with written notice six months prior to the Lease termination date, and a base rent increase of approximately three percent to $2.95 RSF per month, which equates to $119,714, for the office space and $1.18 RSF per month for the warehouse space, which equates to $7,204, commencing on August 1, 2024.

Compliance with CEQA: The proposed project was previously determined to be Categorically Exempt from CEQA pursuant to Section 15301 (Class 1) of the CEQA Guidelines, on July 26, 2022, when the Lease was originally approved because it involves the lease of an existing office facility involving negligible or no expansion of an existing use. The proposed project is still consistent with this determination.

General Plan: The project conforms to the General Plan of the city of Orange.

FINANCIAL IMPACT:

Appropriations for this Proposed Second Amendment are included in the SSA Budget Control 063 FY 2023-24 Budget and will be included in the budgeting process for future years. Funding is comprised of 34 percent federal, 60 percent state and six percent County General Funds. The federal and state dollars are comprised of all qualified SSA program funding based on its generic supportive function.

The below table of fiscal-year costs is based upon the Proposed Second Amendment commencing on August 1, 2023:

FY 2023-24 $1,353,907

FY 2024-25 $123,083

The below table of fiscal-year costs is based upon the Proposed Second Amendment option to extend exercise commencing on August 1, 2024:

FY 2024-25 $1,396,097

FY 2025-26 $126,918

STAFFING IMPACT:

N/A

REVIEWING AGENCIES:

Social Services Agency

ATTACHMENT(S):

Attachment A – Proposed Second Amendment
Attachment B – Acquisition Questionnaire
Attachment C – Lease Summary