Agenda 10-03-23; 8-g - Five-Year Lease Extension for Hillsborough Commons

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1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 3, 2023 Action Agenda Item No. 8-g SUBJECT: Five-Year Lease Extension for Hillsborough Commons DEPARTMENT: Asset Management Services; Social Services ATTACHMENT(S): INFORMATION CONTACT: 1) Five-Year Lease Extension Alan Dorman, Assistant Director of Asset Management Services, 919-245-2627 Steven Arndt, Director of Asset Management Services, 919-245-2628 PURPOSE: To approve a five-year extension of the lease of Hillsborough Commons, a 66,444 square foot building that houses the Department of Social Services. BACKGROUND: The County began leasing Hillsborough Commons in 2008 for the Department of Social Services (DSS). The original lease allowed for several options to extend the lease, with the first option approved in September 2019 and expiring on January 21, 2024. The current base lease rate is $71,705 per month, or $860,000 per year. If the second option period is approved, the lease will extend through January 21, 2029, with a base rate of$77,740 per month or$932,880 per year. FINANCIAL IMPACT: Funds for extending the lease for the balance of FY 2023-24 were already approved as part of the FY 2023-24 budget, so no additional funding would be necessary. Currently, DSS can receive at least 50% administrative reimbursement on rental costs and other related operating costs such as utilities. SOCIAL JUSTICE IMPACT: There are no Orange County Social Justice Goals associated with this item. ENVIRONMENTAL IMPACT: There are no Orange County Environmental Responsibility Goal impacts associated with this item. RECOMMENDATION(S): The Manager recommends that the Board approve the five-year lease extension for Hillsborough Commons (Attachment 1) and authorize the Chair to sign upon final review by the County Attorney.