Title
Second Amendment to Lease Agreement for Triple-R Adult Center at 5962 South Land Park Drive
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FileID
File ID: 2024-01040
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Location
Location: 5962 South Land Park Drive, District 7, Represented by Councilmember Jennings
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Recommendation
Recommendation: Pass a Motion: 1) authorizing the City Manager or the City Manager’s designee to execute a second amendment to lease agreement number 2018-1588 with Garrett P. Scales and Ward Johnson, as Trustees (“South Hills Trust”) for space at the South Hills Shopping Center located at 5962 South Land Park Drive with a three-year extension of the lease term in an amount of approximately $203,565 for the three-year extension, plus two additional three-year options to extend with the base rent amount for those extensions set at a “market rental value” amount agreed to by the City and South Hills Trust (with City Council approval required to exercise any lease extension costing $250,000 or more); and 2) authorizing the City Manager or the City Manager’s designee to execute minor lease amendments, provided that the total amount of the expenditure resulting from the amendment is less than $250,000.
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Contact
Contact: Steve Ward, Real Property Agent, (916) 808-1081 stward@cityofsacramento.org; James Christensen, Facilities Manager, (916) 808-5863, jechristensen@cityofsacramento.org; Department of Public Works; Stephanie Wilson, Recreation Superintendent, (916) 808-1591, smwilson@cityofsacramento.org, Department of Youth, Parks & Community Enrichment
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Lease Agreement
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Description/Analysis
IssueDetail
Issue Detail: The City is currently operating its Triple-R Adult Day Programs for seniors with memory loss in a leased space at the South Hills Shopping Center located at 5962 South Land Park Drive. The location is a 3,951 square foot space with convenient parking and common area amenities. A lease agreement was originally executed between the City and the South Hills Trust in 2018. City staff is recommending that the City Council authorize the City’s first renewal option, which would extend the lease through April 30, 2027, and amend the lease to allow for two additional three-year options to extend following expiration of the first option on April 30, 2027. The lease previously had two five-year options to extend, but the City and South Hills Trust desire to amend the lease to instead have three three-year options to extend to provide greater flexibility for the Triple-R Program.
Leasing of the South Hills Shopping Center space allows for the continuation and expansion of the Triple-R Program. The Triple-R Program provides access to specialized social and recreational opportunities for seniors with Alzheimer’s which is not possible in standard programming for older adults.
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PolicyConsiderations
Policy Considerations: The Triple-R program needs to extend its lease to allow for continued services for seniors, which is in line with the mission, vision and goals of the Youth, Parks, & Community Enrichment Department.
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
Environmental Considerations: The leasing of space in the ordinary course of City operations is a continuing administrative activity and is not considered a project under the California Environmental Quality Act (CEQA) per CEQA Guidelines section 15378(b)(2). Additionally, the City’s continued lease of existing private facilities with no expansion of prior use is exempt from environmental review under CEQA Guidelines Section 15301.
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Sustainability
Sustainability: None.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: Triple-R is an adult day program operated by the Youth, Parks, & Community Enrichment Department providing recreation for seniors with Alzheimer’s disease or other issues that result in memory loss and dementia. It was initiated in 1992 by the Older Adult Services section of the Department and each of its three locations is licensed as a Social Adult Day Program through the California Department of Social Services, Community Care Licensing Division. Approximately 150 families are served by the program.
The Triple-R Program serves an important community need for non-medical adult care for seniors experiencing dementia. The program is well-regarded by families, doctors and senior service agencies as the resource of choice to help families struggling to care for loved ones affected by Alzheimer’s and other conditions impacting memory and cognitive functioning. Providing a seamless extension of the existing location is important to the well-being of families currently served by the program. Staff leased private property in 2018 because it was not able to identify any appropriate City-owned facilities to accommodate the five-day per week, ten-hour per day program.
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FinancialConsiderations
Financial Considerations: The monthly rent for the first three-year extension term of the lease will be $1.00 per square foot for the 3,951 square foot facility or $3,951.00 per month, which is a “market rental value” agreed to by the City and South Hills Trust. Additionally, a monthly Common Area Maintenance (CAM) fee of $1,621.18 per month (with a likely 5% increase annually) is required for the first three-year extension term. Accordingly, the monthly amount that the City will pay for the first three-year extension term will be as follows:
|
Term |
Rate / s.f. |
Monthly Rent |
Monthly CAM |
Total / Month |
Total / Year |
|
Months 1-12 |
$1.00/s.f. |
$3,951.00 |
$1,621.18 |
$5,572.18 |
$66,866.16 |
|
Months 13-24 |
$1.00/s.f. |
$3,951.00 |
$1,702.24 |
$5,653.24 |
$67,838.88 |
|
Months 25-36 |
$1.00/s.f. |
$3,951.00 |
$1,787.35 |
$5,738.35 |
$68,860.22 |
|
|
|
|
|
|
|
The total lease expense for the first three-year extension term through April 30, 2027, will be approximately $203,565 (Measure U, Fund 2401).
Triple-R is a fee-for-service program paid for by families who use the program and by several agencies that use Triple-R as part of a care plan for their clients who attend the program. Scholarships are available for low-income families and some families use long-term care insurance for this qualified community-based service. Triple-R operates on the $427,000 per year amount in revenue it receives for program participants. There is sufficient funding available in the Youth, Parks, & Community Enrichment Department, Older Adult Services Division operating budget to cover the lease costs at the South Hills Shopping Center through the nine years of extension terms that are specified in the Second Amendment. The base rental rate for the three extended option periods will be “market rental value” as agreed upon by the two parties.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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