HomeMy WebLinkAboutFULLY EXECUTED AMENDMENT 2023 (2).pdf Agreement No. 23-389
1 AMENDMENT NO. 1 TO LEASE AGREEMENT
2 This Amendment No. 1 to Lease Agreement ("Amendment No. 1") is dated
3 August 8, 2023 and is between Heritage Centre, LLC, a California limited liability
4 company ("Lessor"), and the County of Fresno, a political subdivision of the State of California
5 ("Lessee").
6 Recitals
7 A. On February 22, 2022, Lessor and Lessee entered into Lease Agreement, which is
8 County Agreement Number 22-059 ("Lease"), for a lease with a purchase option for the
9 Heritage Centre, as set forth in the Lease. Capitalized terms used but not defined in this
10 Amendment No. 1 shall have the meanings ascribed to such terms in the Lease.
11 B. The Lease includes a scope of work for Tenant Improvements ("Tls") with a specified
12 budget that will allow for Lessee to renovate space designed to accommodate the move of
13 several 24-hour mental health facilities onto the site for the Department of Behavioral Health.
14 C. During the course of the Tenant Improvements, Lessee has identified additional large-
15 scale components that will be required for these facilities to operate, including a new backup
16 generator, new HVAC equipment, and several other minor campus improvements.
17 D. Lessee and Lessor now desire to amend the Lease to revise the scope of work for the
18 Tenant Improvements and increase the related spending limits for the Tls for the site.
19 The parties therefore agree as follows:
20 1. Subsection 10.a of the Lease located at page 12, lines 7 through 12 is deleted in its
21 entirety and replaced with the following:
22 "Lessor shall use commercially reasonable efforts to ensure that those certain tenant
23 improvements ("Tenant Improvements") for which a Notice to Proceed is timely issued,
24 are completed, as and to the extent provided in, and in accordance with and subject to
25 the terms and conditions of, the provisions of this Section 10; provided, however, that
26 the total cost of all such Tenant Improvements in the aggregate shall not exceed the
27 sum of$13,200,000 (the "TI Budget")."
28
00516.00100/1299337v3 1
1 2. Subsection 10.g of the Lease located at page 14, lines 6 through 13 is deleted in its
2 entirety and replaced with the following:
3 "Cost of Work: Lessor and Lessee shall use commercially reasonable efforts to
4 promptly finalize and jointly approve such TI Costs and any revisions to the
5 Working Drawings necessary to achieve a mutually acceptable TI Costs budget.
6 Notwithstanding the foregoing or anything to the contrary contained in this
7 Section 10, in no event shall the aggregate TI Costs for all phases of Tenant
8 Improvements hereunder exceed the total TI Budget of$13,200,000, unless the
9 Parties mutually agree in writing, through an amendment to this Lease, in their
10 respective sole and absolute discretion, to increase the allowable TI spending
11 limits or otherwise to provide for the payment of the excess TI Costs."
12 3. The portion of Subsection 10.k of the Lease located at page 15, lines 20-28 and
13 page 16, lines 1-2, is deleted and replaced with the following:
14 "TI COST REIMBURSEMENT. In consideration of the TI Costs incurred by Lessor in
15 connection with this Section 10, Lessee shall pay Additional Rent to Lessor, which
16 shall be calculated by Lessor and paid by Lessee in accordance with the following
17 provisions ("TI Rent"):
18 ,a. (i) The amount of the cost for each completed separate Tenant Improvement
19 "Task" up to a maximum of$10,000,000, as listed on the schedule in Exhibit C
20 (whether a Tenant Improvement has been completed shall be determined in
21 accordance with Section 10 0) above) shall be increased at the rate of 8% per
22 annum from the date expended through the first day of the calendar month
23 following Task completion (as so increased, collectively, the "Task TI Cost").
24 (ii) Lessor will, by the 20t" of each month, invoice Lessee for actual expenses
25 incurred in the previous month for TI Costs as listed on Exhibit C (whether a TI
26 has been completed shall be determined in accordance with Section 10 0)
27 above) for TI Costs incurred over and above the initial $10,000,000 threshold.
28 These separately invoiced costs shall not exceed $3,200,000. Invoices shall be
00516.00100/1299337v3 2
1 accompanied by documentation in support of the expense. Lessee agrees to
2 reimburse Lessor within 45 days of receipt and approval of the invoice. Lessor
3 shall submit invoices referencing the provided agreement number to Department
4 of Behavioral Health — Invoices, 3151 N. Millbrook Ave, Fresno, CA 93703 (dbh-
5 invoices@fresnocountyca.gov).
6 4. Subsection 10.1 of the Lease located at page 17, line 9 is deleted and replaced with
7 the following:
8 "E-mail: dbhfacilities@fresnocountyca.gov"
9 5. Exhibit C of the Lease located at page 49 through 51 of the Lease is deleted in its
10 entirety and replaced with Exhibit C attached to this Amendment No. 1.
11 6. Section 45 ENTIRE LEASE located on page 45 lines 1-7 is deleted and replaced
12 with the following:
13 "This Lease Agreement constitutes the entire Lease Agreement between the
14 Lessor and the Lessee with respect to the subject matter hereof and supersedes
15 all previous Lease Agreement negotiations, proposals, commitments, writings,
16 advertisements, publications, and understandings of any nature whatsoever
17 unless expressly included in this Lease Agreement. In the event of any
18 inconsistency in interpreting the documents which constitute this Lease
19 Agreement, the inconsistency shall be resolved by giving precedence in the
20 following order of priority: (1) the text of this Amendment No. 1 (2) the Agreement
21 including all exhibits, and (3) the exhibits to the Agreement.
22 7. When both parties have signed this Amendment No. 1, the Lease and this
23 Amendment No. 1 together constitute the Lease.
24 8. Lessor represents and warrants to Lessee that:
25 a. Lessor is duly authorized and empowered to sign and perform its obligations
26 under this Amendment No. 1.
27
28
00516.00100/1299337v3 3
1 b. The individual signing this Amendment No. 1 on behalf of Lessor is duly
2 authorized to do so and his or her signature on this Amendment No. 1 legally
3 binds Lessor to the terms of this Amendment No. 1.
4 9. The parties agree that this Amendment No. 1 may be executed by electronic
5 signature as provided in this section.
6 a. An "electronic signature" means any symbol or process intended by an
7 individual signing this Amendment No. 1 to represent their signature, including
8 but not limited to (1) a digital signature; (2) a faxed version of an original
9 handwritten signature; or (3) an electronically scanned and transmitted (for
10 example by PDF document) version of an original handwritten signature.
11 b. Each electronic signature affixed or attached to this Amendment No. 1 is
12 deemed equivalent to a valid original handwritten signature of the person
13 signing this Amendment No. 1 for all purposes, including but not limited to
14 evidentiary proof in any administrative or judicial proceeding, and (2) has the
15 same force and effect as the valid original handwritten signature of that person.
16 c. The provisions of this section satisfy the requirements of Civil Code section
17 1633.5, subdivision (b), in the Uniform Electronic Transaction Act (Civil Code,
18 Division 3, Part 2, Title 2.5, beginning with section 1633.1).
19 d. Each party using a digital signature represents that it has undertaken and
20 satisfied the requirements of Government Code section 16.5, subdivision (a),
21 paragraphs (1) through (5), and agrees that each other party may rely upon that
22 representation.
23 e. This Amendment No. 1 is not conditioned upon the parties conducting the
24 transactions under it by electronic means and either party may sign this
25 Amendment No. 1 with an original handwritten signature.
26 10. This Amendment No. 1 may be signed in counterparts, each of which is an original,
27 and all of which together constitute this Amendment No. 1.
28
00516.00100/1299337v3 4
1 11. The Lease as amended by this Amendment No. 1 is ratified and continued. All
2 provisions of the Lease and not amended by this Amendment No. 1 remain in full
3 force and effect.
4 [SIGNATURE PAGE FOLLOWS]
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
00516.00100/1299337v3 5
1 The parties are signing this Amendment No. 1 on the date stated in the introductory
2 clause.
3
HERITA E C TRE, LLC COUNTY OF FRESNO
4
5
6 J.R. Ortdn, ifr, Manager Sa Qui a o, C airman of the Board of
Su or a County of Fresno
7
Attest:
8 Bernice E. Seidel
Clerk of the Board of Supervisors
9 County of Fresno, State of California
10 f�
By:
11 Deputy
12 For accounting use only:
13 Org No.: 5630
Account No.: 7340
14 Fund No.: 0001
Subclass No.: 10000
15
16
17
18
19
20
21
22
23
24
25
26
27
28
00516.00100/1299337v3 6
Exhibit C
Tenant Improvement Tasks and Payment Schedule
Monthly Base Rent Monthly Tenant Improvement
Payments
Year 1 $ 220,000.00 Year 1 $Year 2 $ 220,000.00 Year 2 $ -
Year 3 $ 220,000.00 Year 3 $ 141,366.79
Year 4 $ 220,000.00 Year 4 $ 141,366.79
Year 5 $ 220,000.00 Year 5 $ 141,366.79
Year 6 $ 230,000.00 Year 6 $ 141,366.79
Year 7 $ 230,000.00 Year 7 $ 141,366.79
Year 8 $ 230,000.00 Year 8 $ 141,366.79
Year 9 $ 230,000.00 Year 9 $ 141,366.79
Year 10 $ 230,000.00 Year 10 $ 141,366.79
* Example: Tenant Improvement costs of$10,000,000 are completed and paid for one month before Year
2, and amortized over 8-years at 8% per annum.
Actual TI Costs over and above $10,000,000 will be invoiced to DBH-Invoices(a)_fresnocountyca.gov and
processed and paid within 45 days of receipt and approval of invoice accompanied by documentation in
support of the expense. TI Costs incurred over and above the initial $10,000,000 threshold shall not
exceed $3,200,000.
Tenant Improvement Costs shall not exceed $13,200,000 without LESSEE's written approval. This
schedule shall be updated to reflect actual costs once final costs are known.
Tenant Improvement Tasks
The Scope of Work (including all labor, materials and equipment required to complete the work as outlined
below (subject to change), shall be performed by Lessor and Lessor's contractor.
The Scope of Work includes the following:
Demolition/Abatement
- Demo and remove interior walls, acoustical ceiling system and wires
- HVAC ductwork as needed per plans
- Remove abandoned electrical
- Dispose of plumbing fixtures, restroom fixtures and partitions per plans
- Demo and remove doors and frames per plans
Concrete
- Pour and place concrete to patch trenches for new plumbing per plans
Rough Carpentry
- Supply all lumber and hardware per plans
Casework
- Fabricate and install upper/lower cabinets and hardware per plans and Tenant Specifications
- Install Countertops per plans and Tenant specifications
Insulation
00516.00100/1299343v3
Exhibit C
Tenant Improvement Tasks and Payment Schedule
- Furnish and install all wall and ceiling insulation per plans
Door Frames/Hardware
- Furnish and install all doors and hardware per plans
Studs/Drywall
- Furnish and install all studs and drywall per plans
Flooring/Base
- Furnish and install all carpet, VCT or LVT per plans
Painting
- Paint interior surfaces per plans and Tenant specifications
- Exterior painting not included
Acoustical Ceiling
- Furnish and install all acoustical ceiling per plans
Code Signage
- Provide and install code signage per plans
Restroom Accessories
- Furnish and install all restroom accessories per plans
Fire Extinguishers/Cabinets
- Furnish and install all fire extinguishers and cabinets per plans
Fire Sprinklers
- Modify existing fire sprinklers per plans as necessary
Plumbing
- Provide and install all plumbing per plans, including Central Kitchen
- Furnish and install plumbing fixtures for all restrooms and break rooms
HVAC
- Furnish and install all ducting to accommodate new offices, rooms, and Restrooms
- Furnish and install new registers/grilles per plans
Electrical
- Provide and install all electrical per plans
- Furnish and install new light fixtures and controls per plans
Fire Alarm
- Modify existing fire alarm system per plans
Generator
- Design, spec and install backup generator(s) for 24-hour facilities
Chiller/ Cooling Towers and Variable Frequency Drives (VFD)
Design, spec and install
00516.00100/1299343v3
Exhibit C
Tenant Improvement Tasks and Payment Schedule
Outdoor Recreation Yard Fencing
- Design, spec and install
Appliances for Central Kitchen
- Design, spec and install
Exclusions
- Data (servers, patch panel, cable, punch-down etc.)
- Phone systems (cables and equipment)
- Security camera and intrusion systems
- Noise mitigation systems
- Furniture (Cubicles/modular furniture, chairs etc and fixtures)
- Appliances (Exception —Central Kitchen Equipment)
- Playground equipment
- New roof
- Elevator modernization
- LEED Certification
00516.00100/1299343v3
Exhibit C
Tenant Improvement Tasks and Payment Schedule
Construction Timeline
0
2022 2023 2OU
Jan Fab Mar Jun Jul Oa Nw Dac Jae Feb Mx A r Ma Jun JW Oa Nw Dac Ln Feb Mar Am Mft
+ nstzw naa.
v:'
2 !1H 1
f/11
3 3t2i"nen
7/2a
4 lt2 !Kl
12114
5 nn 177H
00516.00100/1299343v3