To: Board of Supervisors
From: Warren Lai, Public Works Director/Chief Engineer
Report Title: Lease of 3890 Railroad Avenue, Pittsburg, for use by District Attorney
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Public Works Director, or designee, to execute a Lease with Albert D. Seeno Construction Co. L.P., under which the County will Lease approximately 4,699 square feet of office space located at 3890 Railroad Avenue in Pittsburg for fifteen years for use by the District Attorney’s office at an initial annual base rent of $60,147.20, and annual increases thereafter.
AUTHORIZE the Public Works Director, or designee, to exercise lease extension options in accordance with the terms of the Lease.
AUTHORIZE the Public Works Director, or designee, to execute a Subordination, Non-Disturbance and Attornment Agreement with the lender in substantially the form attached to the Lease, in the event the subject property is ever used by the owner as security for a loan.
DIRECT the Public Works Director to execute and record a memorandum of Lease, memorializing the existence of the County’s Lease.
FISCAL IMPACT:
100% General Fund. The County will pay annual base rent in the first year equal to $60,147.20, which includes four months of no rent, and annual base rent in the second year equal to $92,927.40, with annual increases thereafter. In addition, the County will be responsible for paying Lessor’s operating expenses, insurance expenses, and Real Property taxes for the property, which are expected to cost approximately $14,097 in the first year and increase annually thereafter. The County is also responsible for paying approximately $750,000 toward the cost of tenant improvements. The County shall pay in three equal installments of $249,922.22 as follows: (i) the first within 60 days after 50% completion, but not later than June 30, 2025, (ii) the second within 60 days after 75% completion, but not later than June 30, 2025, and (iii) the third within 90 days after the Substantial Completion Date.
BACKGROUND:
The District Attorney provides necessary and ongoing legal prosecution services for the County in both the Martinez and Pittsburg courthouses. Having an office in Pittsburg would alleviate the challenges associated with limited space at the District Attorney’s Martinez office and would eliminate travel between the Martinez office and the Pittsburg courthouse for both District Attorney staff and County-wide law enforcement agencies.
The subject property is a 4,699 square foot standalone building. Tenant improvements are needed to update the building and prepare it for use by the District Attorney’s office. The tenant improvements will be carried out by the Lessor and the building delivered to the County in a turnkey condition. The total estimated cost of the tenant improvements is approximately $985,000. The landlord will pay approximately $235,000 of the cost of tenant improvements; the County is responsible for approximately $750,000 of the cost of tenant improvements. The County’s share of the cost of tenant improvements will be paid for in three equal installments according to a payment schedule.
The initial term of the Lease is fifteen years. The County will have four options to renew the Lease for a term of five years for each option.
CONSEQUENCE OF NEGATIVE ACTION:
If the Lease is not approved, the District Attorney will not have an office within reasonable proximity to the Pittsburg courthouse, which could cause a disruption in providing legal prosecution services for the community.