Real Estate Services & Strategies
Preparation of regents' items
- Section 3.1: Regents' Item Example
- Section 3.2: Amendments to Regents Item
- Section 3.3: Regental Action between Meetings (Interim/Emergency/Concurrence Items)
- Section 3.4: Coordination and Review Process
The following material is intended to provide guidance on the processing of Regents' agenda items for real property lease agreements.
There are also Regents' policies which must be adhered to that affect campus/laboratory leasing decisions. The real estate office at each site should be mindful of these policies.
REGENTS' POLICIES OF INTEREST TO RESG
- Policy# Title
- 6004 Interim Authority
- 6007 Regents' Items Coordination
- 6036 Competitive Bidding
- 6039 Consultants
- 6040 Administration of UC Housing Facilities
- 6043 Investments of Campus Foundations
- 6051 Interest Rates for Loans from Regents' Funds
- 6090 Design approval
- 6091 Architects and Engineers--Faculty As
- 6092 Food Services--Public Use
- 6093 Inclusion Areas
- 6096 Parking Construction--Underground
- 6101 Architects and Engineers--Appointment of
- 6102 Architects and Engineers, Consulting
- 6104 Campus and Community Planning and Development
- 6122 Rent Due
- 6138 University-Provided Housing
- 6171 Acceptance of Gifts for Housing Student Groups
More information on the subject of Regents' policies can be found here.
If a transaction will require Regents' approval, the campus should inform the potential lessor/lessee that, depending on the Regents' meeting schedule, it may take up to three months to obtain Regental approval. Currently, the only Regents' meetings in which lease items may be submitted for approval are the seven business meetings in the months of January, March, May, June, July, September, and November.
Once it becomes apparent to the campus that a proposed lease transaction may need Regental approval, the campus should coordinate with RESG to confirm that the transaction requires Regental approval. (See Chapter II - AUTHORITY TO EXECUTE) Upon completion, by the campus, of a draft of the proposed Regents' Item, an advanced copy should be provided directly to RESG along with lease documents for review if available. The campus is responsible for securing technical assistance as necessary, such as architectural and engineering advice and/or environmental health and safety review.
Once the item is finalized, the campus Chancellor's office should send the proposed Regents' Item directly to Special Assistant Jeanne Gardner of Coordination and Review in the Office of Business and Finance. As soon as the item is received, Jeanne will distribute it to the appropriate Vice President in accordance with that Vice President's areas of responsibility (in the case of leases, to Assistant Vice President Bocchicchio -- Facilities Administration). Distribution directly to Special Assistant Gardner assures that all proposed Regents' items are included on the Regents' Agenda within the deadline provided.
The item will then be reviewed by RESG and distributed to other appropriate University offices such as General Counsel, Secretary of The Regents, Clinical Services, etc. for their review. Once the coordination is complete, the item is then returned to the Senior Vice-President -- Business and Finance. The Senior Vice President will then make his/her recommendation to the President. If the President approves, the proposed item will be submitted to The Regents for their action.
The above described procedure allows RESG to begin its analysis ahead of the designated deadline for campus submission as noted on the Regents Agenda Calendar. The advance review is important to RESG to assure timely and thorough review of the item, which is especially important if one or more deal points require renegotiation as to University policy.
Section 3.01: Regents' Item Example
PROPOSED REGENTS' AGENDA
Office of the Chancellor
Date submitted: By:
Item No. _______
Item for Action
TO MEMBERS OF THE COMMITTEE ON FINANCE:
ITEM FOR ACTION
For Meeting of___________________
LEASE OF OFFICE/CLINIC SPACE, MEDICAL CENTER, CAMPUS
The President recommends that the Committee on Finance recommend to The Regents that:
(1.) The Secretary be authorized to execute a lease agreement between The Regents, as tenant, and ________________, as landlord, for approximately _______________ rentable square feet (rsf) of ________________ space located at ________________, ______, to be used by the __________, Medical Center, _____________ Campus, said lease to include the following provisions:
a. Term of the lease shall be ___ years.
b. Rent shall be $_________/month ($__.__rsf/month, subject to annual adjustments in the Consumer Price Index-All Urban Consumers (Los Angeles-Long Beach-Anaheim) or (San Francisco-Oakland-Sacramento);
c. University shall have_______ ____-year option(s) to extend the lease under the same terms and conditions as the original lease, or add exceptions such as: except that rent shall be at ninety-five percent of the then prevailing fair market value as agreed upon by both parties;
d. ______________ shall pay for all utilities and services; or University shall pay its pro-rata share of all expenses above the base year of 19__;
e. Landlord shall provide a tenant improvement allowance of up to $_______________ or Landlord will construct tenant improvements estimated to not exceed $__________ and amortized at 10 percent over 10 years and paid monthly as additional rent or University shall be responsible for tenant improvements;
f. Landlord will provide approximately_____ parking spaces at no additional cost or Landlord will provide approximately_____ parking spaces at a cost of _________________;
(2.) The President, after consultation with the General Counsel, be authorized to approve and the Secretary be authorized to execute any documents required by the exercise of the option in 1.c. above or any amendments or ancillary documents which do not substantially modify the terms of the lease.
It is recommended that The Regents lease approximately ________________ rsf of ________________ space at _________________________________ to begin approximately________________. The space will be used by the ____________________________ department of the Medical Center, ___________ Campus. [Describe what the space will be used for including any compelling programmatic justification.]
[If the tenant is vacating other premises, describe what will happen to those premises. If the tenant's occupation displaces other UC departments, describe what will happen to those departments. Briefly describe the impact of this move on long-term stacking plans for this department.]
State whether the lease rent is competitive with market rents and describe the market compared.
[Describe any other relevant information which the Regents should consider in evaluating the advantages of proposed lease, i.e. proximity issues, downsizing, cost savings, etc. Describe any financial implications and include the name of the funding sources for all lease components.]
(If an Independent Seismic Review is required) The building was constructed in _______ and has been assigned a rating of "_________" as defined in the University Policy on Seismic Safety. The building currently meets the University's and all other applicable requirements including handicapped accessibility. The proposed lease has been classified categorically exempt under the provisions of the California Environmental Quality Act.
(If an Independent Seismic Review is not required) The building was constructed in _______ and meets the University's and all other applicable requirements, including those relating to seismic safety and handicapped accessibility. The proposed lease has been classified categorically exempt under the provisions of the California Environmental Quality Act.
Section 3.02: Amendments to Regents Item
Sometimes it is necessary to make changes in an action previously approved by The Regents. In most cases, it is easiest and clearest to make such changes using the legislative bill style: strike out old language, underline new language. (SAMPLE A). Coordination and Review prefers a slash or oblique (/) to strike out deleted text instead of a hyphen (-). The sample shows the preferred style.
Common sense will determine how much of the previous action should be displayed; there should be enough previous action language for the reader to comprehend the significance of the proposed amendments.
It is always necessary to display a change in the outline headings if a section of the previous action is being deleted or a new section is being proposed. That is, when a section is deleted or a new section added in the middle of the action, it is necessary to show how the succeeding action paragraphs are re-numbered; it is not necessary to recite fully the text of the re-numbered paragraphs.
Section 3.03: Action Under Interim Authority/Emergency Authority
Occasionally, Regental approval is necessary between regular meetings. There are two formats available for this contingency. They are Interim Authority and Emergency Authority. Interim Authority and Emergency Authority items receive exactly the same level and detail of analysis and review as all other proposed Regents' actions.
Interim Authority- Interim Authority is invoked when action is required before the next meeting and when there are at least three working days to complete the action. Obviously, the proposed action must be free from unresolved policy issues and other such deficiencies if action is to be accomplished in so short a time. Under Interim Authority, the President and the Board Chairman act together to approve a recommendation. The item is in the form of a letter, with signature lines for their approval at the end of the Background statement. Once RESG has completed the coordination process the Regents Interim Item is signed by the President and then sent to the Chairman for signature. The date on the Interim Authority item is the official date of the action, even though the Chairman may not sign until after that date. The Secretary of The Regents reports Interim Authority actions to The Regents at the next business meeting.
Emergency Authority - Emergency Authority is invoked when action is required in less than three working days. In an emergency, the President acts alone under authority delegated by The Regents. When emergency action is required by a campus: 1) the Chancellor signs a letter addressed to the President containing all details of the emergency and forwards the letter to Senior Vice President Kennedy. That letter is covered by a brief letter from Senior Vice President Kennedy adding clarifying information as needed, and telling the President which OP and other Officers reviewed and approved the recommendation during the coordination process; or 2) An analyst in OP drafts a letter for the Vice President to sign, addressed to the President and containing all details of the emergency. An Item for Action must be prepared for presentation at the next business meeting, to the Committee of jurisdiction over the action that was taken under Emergency Authority.
If either of the above actions requires execution of lease documents, the documents to be executed must be approved as to form by the Office of the General Counsel and must accompany the letter to the President, with the required number of duplicate originals tabbed or clipped in all places where signature or initial is required.
There are some practical problems with Interim and Authority items if the need for such arises too close to the date of a Regents' meeting. Depending on the schedule of Regents meetings, the President and many OP and other reviewers and signatories may be unavailable. While it is not impossible to complete an action during the two or three days before a scheduled Regents' meeting, it is chancy at best. It should be noted that Interim Authority or Emergency Authority items are increasingly difficult to conduct. There is a growing tendency among Chairs of The Regents to view these types of items as necessary only under the most extreme conditions where financial resources or significant programs would be jeopardized by a delay in action.
Section 3.04: Coordination and Review Process
The office of Coordination and Review has responsibility for the preparation of the President's agenda and schedule for Regents' meetings. Toward that end, C&R is the final review point within OP for Regents' items and materials before they are printed in final form and mailed to The Regents. C&R edits for substance, style, format, etc. and verifies coordination of all Regents' agenda items and materials University-wide: from the campuses, Laboratories, and Office of the President. C&R then prepares and duplicates these materials in their final edited form, appropriate format, sequence, number of copies, naming conventions etc., for presentation to The Regents.
Lease items generally originate at a campus or Laboratory and are submitted according to a deadline schedule to OP through the Senior Vice President--Business and Finance. The items are routed to the Assistant Vice President--Facilities Administration, where they are extensively reviewed by staff (RESG) and distributed for coordination to their offices, as appropriate (i.e., other Vice Presidents' offices as indicated by the subject matter, the Secretary of the Regents, and the General Counsel of The Regents).
Following review by all appropriate parties, the revised draft Regents' item is submitted for review and approval to the Senior Vice President--Business and Finance. Once he has approved the item, it is submitted to C&R for final review and preparation. C&R edits and verifies coordination (from the sign-off list).
The items are then printed in final form and duplicated for distribution to The Regents. The completed copies are delivered to the Secretary's office for mailing to The Regents by the deadline for such mailings (generally on the Wednesday one week before the scheduled meeting).