HomeMy WebLinkAboutMINUTES - 09181990 - 2.4 004
TO: BOARD OF SUPERVISORS _ 'F Contra
L
Phil Batchelor, County Administrator f \ �OS+a
FROM:
. . •_� -.�;;,; 4� Count
Septmeber 18, 1990 Y
DATE:
i
.. . Lease with Purchase Option - 50 Douglas Drive, Martinez
SUBJECT:
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1. Authorize the General Services Director to,. execute. a lease
with purchase option for 50 Douglas Drive,,. Martinez for use
by the Probation Department.
2. Determine that the project is a Class 27 Categorical
Exemption under the California Environmental Quality Act.
3 . Direct the Director of General Services to file a Notice of
Exemption with the County Clerk.
FINANCIAL IMPACT
Payments required for the proposed lease are budgeted in the
1990-91 General Services Department Building Occupancy Budget.
BACKGROUND
The proposed lease for the Probation Department will allow for
consolidation of functions, increase operational efficiency and
improve working conditions. The department central
administration will be relocated with the central County staff to
improve supervision and communication. The Douglas Drive
location is more central to Probation service needs and" will
result in no unbudgeted cost increases.
CEQA requirements have been complied with and the City 'of
Martinez has been notified of the proposal. The use is in
compliance with City zoning and land use requirements
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON SEP 1 9 APPROVED AS RECOMMENDED OTHER
1,
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
n
CC: County Administrator ATTESTED SEP" 18
" 1990
General Services PHIL BATCHELOR,CLERK OF THE BOARD OF
Social Services SUPERVISORS AND.000NTYADMINISTRATOR
Auditor-Controller
Probation
BY DEPUTY
M382 (10/88)
The proposed lease includes a purchase option at a -very favorable
amount that can be exercised anytime during the first year., The
building contains 90 ;000 square feet on three floors. The
Probation Department will occupy the second floor. A private
engineering firm has use of one-half of the third floor. It is
proposed that Social Service use the remaining space on the: third
floor. They would relocate staff from another leased space at a
net decrease in cost.
LEASING COST COMPARISON
The cost comparison for leasing 1-1/2 floors of the building
versus the existing space is as follows:
I . Existing Space Costs:
Probation Department:
Present lease term, 7/90 to 11/90. . . . . . $114,814
Estimate to extend for 11/90 to 7/91 . . . 2450, 500
Admin. Bldg. space 90/91 . . . . .. . . . . . . . . . 38 , 364
Annual Cost for existing space. . . . . . . . . $396 , 678
Social Service Department:
Arnold Drive present lease, 90-91 . .. . . . $231 , 468
Total projected cost for
existing space. . . . . . . . . . . . . . . . . . . . . $628 , 146
II . Projected Cost for New Lease at 50 Douglas:
Probation Department:
50 Douglas, second .floor. . . . . . . . . . . . . . $432 , 240
Social Service:
50 Douglas, One-half third floor. . . . . . . $195 , 848
Total projected cost for 50 •Douglas. . . . $628 , 088
The above comparison indicates that the cost, based upon a ; 12-
month basis is the same. The Probation Department,.will gain
substantial space designed to meet the current department
requirements in a new building adjacent to three other County
buildings. The Social Service Department use willrelocate staff
development adjacent to their new Administrative Headquarters
building currently under construction. County benefits
as a result of grouping buildings include reduced travel time for
maintenance and mail delivery,. communication system inter-ties,
parking availability and improved public identity.
PURCHASE OPTION
The purchase option of $4 , 500 , 000 can be exercised any time
during the first year of the lease. The debt service for the
purchase including buying out the cost of the Probation
improvements, and bond issuance costs will result in an annual
cost of approximately $670 , 000 .
The General Services Department has discussed with Kaiser
Martinez the potential for Kaiser use of one or more floors in
the building for a five-year period. A pro-rata share of the
debt service would be passed on to Kaiser. Kaiser participation
plus the existing private tenant would reduce the County cost for
the debt service to approximately $225 , 000 per year or about
$350 , 000 with all operating costs. This compares to the lease
cost of $432, 000 for the Probation space at the fully serviced
rate.
-3-
. -The lease arrangement with Kaiser would allow for fixing costs at
a very low rate (approximately 40% lower than comparable rates in
central County) while retaining full control of the ."*building.
The space leased .to Kaiser would be available for future County
needs at the end of lease term.
Leasing and subsequent purchase of the building at 50 Douglas
Drive appears to have many benefits' for the County 'and can be
accomplished without impact upon the budget. The user
departments will gain immediate benefits and the County fixes '
long-term costs for needed space.