HomeMy WebLinkAboutDoc 128 - Amend Lease Agrmt - State - Desch Svcs CenterDeschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of March 5, 2014
Please see directions for completing this document on the next page.
DATE: February 28,2014
FROM: Susan Ross Property & Facilities 383-6713
TITLE OF AGENDA ITEM:
Consideration of Board signature of Document 2014-128, Lease Amendment #3 between Deschutes
County and the State of Oregon, Department of Human Services.
PUBLIC HEARING ON THIS DATE? No
BACKGROUND AND POLICY IMPLICATIONS:
In 2002, the State of Oregon Department of Human Services (DHS) entered into a lease for
approximately 31,000 square feet of office space in the Deschutes Services Center at 1300 NW Wall
Street. Various DHS services began occupying the space in March 2004. This lease expires February
28,2014. The original lease term was for ten years and called for three 2-year options for a total of 16
years. State of Oregon is exercising its first two-year extension option.
DHS has two components to its lease:
1) There is a rent portion that has an annual escalator of 2.5% which was established with the
original lease and subsequent amendments. This amount is shown as the "Net Rent" in the
lease.
2) DHS contracts with Deschutes County for its custodial service and payment of all utility costs.
This charge is shown in the lease agreement as the "Base Operations Expense." Although the
County receives a monthly payment from DHS for this service, the final annual charge is
subject to escalation and de-escalation depending on the actual costs. Property & Facilities
prepares an annual accounting for DHS in order to "true up" the expenses. For the past ten
years, the County has received a one-time lump payment each year to make up for any shortfall
that was not covered by DHS's monthly payments. For the two-year option being exercised
with this amendment, DHS has increased the base operations expense by $3,266 in order to
more accurately align with historic actual expenses.
FISCAL IMPLICATIONS:
Monthly rent for year I of the extension (March 2014 -February 2015) is $49,870.43, an increase of
2.5% over previous year.
Monthly rent for year 2 of the extension (March 2015 February 2016) is $51,117.19, an increase of
2.5% over previous year.
The base operations expense for both years will be $11,613.44.
RECOMMENDATION & ACTION REQUESTED:
Staff recommends Board signature of Document 2014-128.
ATTENDANCE: Susan Ross
DISTRIBUTION OF DOCUMENTS:
Return to Susan Ross to return to State. State will return one fully signed original to County.
DESCHUTES COUNTY DOCUMENT SUMMARY
(NOTE: This fonn is required to be submitted with ALL contracts and other agreements. regardless of whether the document is to be
on a Board agenda or can be signed by the County Administrator or Department Director. If the document is to be on a Board
agenda. the Agenda Request Fonn is also required. If this fonn is not included with the document. the document will be returned to
the Department. Please submit documents to the Board Secretary for tracking purposes. and not directly to Legal Counsel. the
• County Administrator or the CommiSSioners. In addition to submitting this fonn with your documents, please submit this fonn I electronically to the Board Secretary.)
Please complete all sections above the Official Review line.
Date: IFebruary 28, 2014 I Department: IProperty & Facilitie~
1
Contractor/Supplier/Consultant Name: State of Ore on
Contractor Contact: Lisa Haver, DAS Leasin A ent Contractor Phone #: 1503-373j
1708~
Type of Document: Lease Amendment for space at 1300 Wall Street, Bend
(Deschutes Services Center)
Goods and/or Services: NIA
I Background &History: In 2002, the State of Oregon Department of Human Services
(DHS) entered into a lease for approximately 31,000 square feet of office space in the
Deschutes Services Center at 1300 NW Wall Street. Various DHS services began
I occupying the space in March 2004. This lease expires February 28, 2014. The
original lease term was for ten years and called for three 2-year options for a total of 16
years. State of Oregon is exerciSing its first two-year extension option.
DHS has two components to its lease:
1) There is a rent portion that has an annual escalator of 2.5% which was established
with the original lease and subsequent amendments. This amount is shown as the "Net
Rent" in the lease.
2) DHS contracts with Deschutes County for its custodial service and payment of all
utility costs. This charge is shown in the lease agreement as the "Base Operations
Expense." Although the County receives a monthly payment from DHS for this service,
the final annual charge is subject to escalation and de-escalation depending on the
actual costs. Property & Facilities prepares an annual accounting for DHS in order to
"true up" the expenses. For the past ten years, the County has received a one-time
lump payment each year to make up for any shortfall that was not covered by DHS's
monthly payments. For the two-year option being exercised with this amendment, DHS
has increased the base operations expense by $3,266 in order to more accurately align
with historic actual expenses.
Agreement Starting Date: 103/01/201 ~ Ending Date: 102/29/201ij
I
t Annual Value or Total Payment: ~737,806.44 year 11$752,767.56 year 21
I NI A -Statutory
I o Insurance Certificate ReCeiVjd (ChiCk box)
Insurance Expiration Date: 1
l N/A
Check all that apply:
2/28/2014
i
t
o RFP, Solicitation or Bid Process o Informal quotes «$150K)o Exempt from RFP, Solicitation or Bid Process (specify -see DCC §2.37)
N/A
Funding Source: (Included in current budget? 0 Yes 0 No
If No, has budget amendment been submitted? 0 Yes 0 No
Is this a Grant Agreement providing revenue to the County? 0 Yes C8J No
Special conditions attached to this grant:
Deadlines for reporting to the grantor:
If a new FTE will be hired with grant funds, confirm that Personnel has been notified that
it is a grant-funded position so that this will be noted in the offer letter: DYes D No
Contact information for the person responsible for grant compliance: Name:
Phone#:
Departmental Contact and Title: Isusan RosS! Phone #: 541 ~383-671 ~
Department Director Approval: ~4L--Z-/?:'5 (I c/
Signature Date
Distribution of Document:
Return to Susan Ross to return to State. State will return one fully signed original to
County.
Official Review:
County Signature Required (check one): 0 BOCC 0 Department Director (if <$25K)
o Administrator (if >$25K but <$150K; if >$150K, BOCC Order No. ____-J)
Legal Review Date
Document Number 2014-128
2/28/2014
STATE OF OREGON
INTERGOVERNMENTAL OFFICE SPACE LEASE AMENDMENT
TIllS LEASE AMENDMENT, dated February 25, 2014, is made by and between DESCHUTES
COUNTY, a political subdivision of the State of Oregon (Lessor) and the STATE OF OREGON, acting
by and through its Department of Human Services (Lessee).
Lessor and Lessee are parties to a Lease dated October 10, 2002, as amended or supplemented by Lease
Amendment dated December 18, 2002, and Intergovernmental Office Space Lease Amendment dated
April 22, 2004, (herein referred to as the Lease), covering Premises described as approximately 31,167
rentable square feet of office space located at 1300 NW Wall Street, Suite 100, Bend, Deschutes County,
Oregon 97701.
Lessor and Lessee desire to amend or supplement the Lease.
In consideration of the mutual agreements contained herein, Lessor and Lessee agree that the Lease shall
be amended or supplemented as follows:
1. :film. The term of the Lease is hereby extended for two (2) years commencing March 1, 2014, and
continuing through February 29,2016.
2. Rent. Lessee shall pay Base Rent in an-ears by the 10th day of each month for the preceding month or
partial month. The Base Rent for any partial month shall be prorated on a per diem basis. The monthly
Base Rent shall be per the following Rent Schedule:
LEASE PERlOD NET RENT BASE OP EXPNS* BASE RENT
03/01114 -02/28115 $49,870.43 $11,613.44 $61,483.87
03/01/15 -02/29116 $51,117.19 $11,613.44 $62,730.63
*The Base Operating Expenses component in the Base Rent shall be subject to escalation and de
escalation per actual costs accounted on an annual basis, as provided under Section 24(a) of the Lease.
~. Insurauce. Effective March 1, 2014, Section 13 of the Lease is hereby deleted in its entirety and
replaced with the foHowing:
13. Insurance. Lessee shall provide for its own personal property damage coverage and liability
insurance, within the limits as provided under ORS 30.260 to 30.300, and as limited by Oregon
Constitution, Article XI, Seetion 7. Lessor shall provide for its own liability coverage and real
property damage coverage for the building StructUl-e and the building systems, subject to the same
limitations as provided under the law.
4. Default. Effective March 1, 2014, Section 21 of the Lease is hereby deleted in its entirety and
replaced with the following:
21. Default. Neither party shall be in default under this Lease until written notice of the unperformed
obligation has been given and that obligation remains unperformed after notice for fifteen (15) days
in the case of a payment or for thirty (30) days in the case of other obligations. If the obligation
cannot be perfonned within the thirty day period, there shall be no default if the responsible party
commences a good faith effort to perform the obligation within such period and continues diligently
to complete the performance. In case of a default the nondefaulting party may terminate this Lease
with thirty (30) days prior written notice to the defaulting party, and it shall be entitled to recover
,
; ! ,
Lessee Initial & Date i ssor Initial & Date
damages or any other remedy provided by applicable law, or it may elect to perform the defaulting
party's obligation and recover from the defaulting plllty the costs plus interest at the legal rate of
eight percent (8%) per annum for judgment. If Lessee makes such expenditures as the nondefaulting
party, those expenditures plus reasonable administrative costs shall be deducted from the rent.
5. Operatine Expenses EscalationlDe-escalation. Effective March 1,2014, Section 24(a) of the Lease
is hereby deleted in its entirety and replaced with the following:
24. Operating Expense EscalationIDe-escalation.
" (a) It is the intent of the parties that Lessee shall pay its share of the Operating Expenses for the
Premises. The monthly Base Rent contains a component covering such expenses in terms of the best
estimate, which is to be reconciled with the actual expenses on an annual bases in accordance with the
procedures provided below. The component in the Base Rent for the Operating Expenses is
$11,613.44 per month or $139,361.28 per year ("Base Operating Expenses"). The share of the
Premises is 79.5% of 50% of the total rentable square feet of the building in which Premises are
located. The Operating Expense Year shall be the twelve (12) month period commencing with the
first full month of Lessee's occupancy of the Premises, and each twelve (12) month period thereafter.
For this Lease the fust and Base Operating Expense Year shall be from March 1, 2014 through
February 28, 2015.
6. Counterparts. The following language is added as Section 30 of the Lease:
30. Counterparts. This Lease, including any amendments to the Lease, may be executed in two or
more counterparts, by facsimile or otherwise, each of which is an original, and all of which together
are deemed one and the same Lease, notwithstanding that all parties are not signatories to the same
~ounterpart.
Except as expressly amended or supplemented hereby, all other terms and conditions ofttie Lease shall
remain.in full force and effect.
State Workers' Compensation Act.
(1). Should Lessor employ any "subject worker," as defined in ORS 656.005(28), to perform any
work required under this Lease, the Lessor shall comply with the Workers' Compensation Law, ORS
656.001, et seq. Lessor, to the extent it employs such "subject worker(s)," and Lessor's contractors or
subcontractors, ifany, and any employers providing work, labor or matelials under this Lease are "subject
employers" under the Workers' Compensation Law and shall comply with ORS 656.017, which requires
"subject employers" to provide Oregon workers' compensation coverage that conforms to Oregon law for
all oftheir "subject workers", or are exempt under ORS 656.126.
Lessor agrees to comply with all federal, state, and local laws, regulations, executive orders and
ordinances applicable to this Lease which are incorporated by reference herein.
Page 2
Lessee Initial & Date
This Lease Amendment shall not become effective nor be binding on the State of Oregon or the Lessee
agency until it has been executed, in the signature spaces provided below, by all parties to the
Amendment.
LESSOR: DESCHUTES COUNTY, a political subdivision of the
State of Oregon
By __________~-------------------------
Tammy Baney, Chair
Deschutes County Board of Commissioners
LESSEE: STATE OF O~PN-'~i~g by ,np th~u~ its /1
IYJJJJf/}Department 0 , an ~tvlpes \' / _ ~J Ij j. vvllJ% f/4 / \ J •
By \ [v
Date___?-.--,--)~_S---,'_l_~-,--\ ______
APPROVAL: STATE OF OREGON, acting by and through its
Department of Administrative Services
By ____________________________________
Real Estate Services
Date _____________._________
2413 DHS Bend-Intergovernmental Lease Amendment
02/25/14 LH
Lessee Initial &. Date . 11/ sor Jnitial &: Date