1.  Section 100.4 (cc) of the Standing Orders of The Regents of the University of California

2.  Section 21.3.(f) (2) (cc) of the Bylaws of The Regents of the University of California

3.  University of California Lease Administration Manual

4.  UCSD Policy and Proceure Manual (PPM)

   516	Environment, Health & Safety
   530-9	Renovations and Alterations

5.  UCSD Revised Long Range Development Plan - 1989

6.  UCSD Medical Center (Hillcrest) Long Range Development Plan - 1995

POLICY

All requests or inquiries regarding leasing of University land and buildings to external entities or leasing property from external entities must be directed to Real Estate Development (RED). No commitment may be made on behalf of the University, either orally or in writing, except by persons having formal delegations of authority for real property contract execution. Persons making unauthorized commitments may be held personally responsible for financial commitments.

THE REGENTS AS LANDLORD

1. Scope

   Transactions involving the use of University real property by an external entity require a lease agreement between The Regents of the University of California (The Regents) and an external entity. The Regents (Landlord) on behalf of a UCSD/UCSDMC department/entity conveys to an external entity (Tenant) an exclusive right to occupy and use a specific University owned real property on a temporary basis.

2. Background

   Real Estate Development is responsible for leasing of University-owned land or building space to external entities, which entities may (as Tenants) be subject to possessory interest tax as determined by the County Assessor. In addition,Real Estate Development acts as the property and asset manager for University-owned land and buildings located off-campus having non-University tenants or mixed tenancy (non-University as well as University tenants).

3. PROCEDURES

   On-campus educational or research facilities, in general, are leased to non-profit organizations conducting instruction, research, or healthcare functions. Any lease revenues from such activities will be applied first towards the appropriate pro-rata share of the debt vehicle used to finance the building improvement cost, as well as reimbursement of applicable maintenance costs. Departments should direct all inquiries to Real Estate Development regarding leasing of University real property to external entities.

   Real Estate Development coordinates with Physical Planning regarding environmental review and physical planning concerns.

THE REGENTS AS TENANT

1. Scope

   Transactions involving the use of non-University real property by a UCSD/UCSDMC department/entity require a lease agreement. The external entity (Landlord) gives The Regents (Tenant) on behalf of the UCSD/UCSDMC department/entity an exclusive right to occupy and use a specific real property owned by the external entity on a temporary basis.

2. BACKGROUND

   Real Estate Development has been designated by the Chancellor as the office responsible for all off-campus leased space. This includes review, negotiation, coordination, and processing with both internal and external entities, for all UCSD and UCSDMC requests for leased space off-campus. This ensures (i) appropriate approvals to proceed with leasing space off-campus are received; (ii) coordination of inspections conducted by UCSD’s Environment, Health & Safety (EH&S) and Facilities Design & Construction (FD&C) is completed; (iii) all financial and business negotiations with external entities are conducted by Real Estate Development; (iv) an evaluation of fair market rents is completed; (v) appropriate approvals on the Standard Form Lease Agreement (SFLA) are obtained; and (vi) leased space is delivered to the department in a timely and satisfactory manner.

3. Time Frames

   Time frames for execution of a lease agreement and occupancy of the premises after submission to Real Estate Development will be affected by which entity within the University system will be reviewing and/or executing the document and the following:

   1. Complex lease agreements requiring review by several offices,

   2. Lease agreements for space requiring special design and construction for specific uses,

   3. Lease agreements for space requiring major tenant improvements (referenced as “TI” in Exhibit A) prior to occupancy,

   4. Lease agreements requiring approval of the Clinical Services Development Division at the Office of the President. This shall include all off-campus lease agreements for space used by (i) UCSDMC, (ii) the Medical Group and classified as clinical space and, (iii) the Medical Group where the lease agreement includes language pertaining to affiliation agreements or contains a provision of malpractice insurance, and

   5. Lease agreements requiring approval of The Regents and/or execution at the Office of the President, coordinated through the Real Estate Services Group (RESG) located at Office of the President.

4. PRCOCEDURE - (Refer to Exhibit A for flowchart of procedures for The Regents as Tenant)

   1. Initial Lease Agreement

      1. Initiating Party (UCSD/UCSDMC department/entity requesting space)

         NOTE: Facilities Planning & Management (FP&M) coordinates, through Real Estate Development (RED), all UCSDMC requests for leased space off campus.

         1. Completes an Off-Campus Space Request (OCSR) form (Refer to Exhibit B) and submits it for approval to 1) the department chair and appropriate dean’s or vice chancellor’s office if a campus department or 2) the department chair and Director of Facilities Management if an UCSDMC department/entity. The appropriate office will then forward the approved OCSR to RED.

         2. Determines and completes space planning requirements for the potential leased space (RED will provide a Space Planning Guide to assist with this process) and submits the completed Space Planning Guide to RED prior to an official site visit.

         3. Coordinates with the appropriate departments all telecommunication and computer data needs, moving arrangements, including mail services and/or U.S. Post Office. This step is completed after RED has negotiated the terms of the lease agreement and a move date has been set.

         4. Coordinates the start-up of utilities for the space with the external entity or San Diego Gas & Electric, if applicable. It is recommended this step be completed prior to occupancy of the space. Please note that FP&M monitors and authorizes payment of utilities for all UCSD and UCSDMC leased and owned properties south of Convoy Court in Kearny Mesa.

      2. Real Estate Development

         1. Works with the Initiating Party representative on site selection for the off-campus space. After RED has received the approved OCSR, RED will determine if the service of a broker will be needed to facilitate the request.

         2. Coordinates site visit(s) with the building representative and Initiating Party representative. Distributes the Landlord Packet.

         3. Coordinates EH&S inspections (initial, tenant improvement and final) for selected sites. Prepares and sends a letter(s) addressing the results of all inspections .

         4. Coordinates with FD&C 1) the required reviews, inspections, and certifications pertaining to the 1997 Revised UC Seismic Safety Policy (Refer to Exhibit C) and 2) any other reviews and/or inspections handled by FD&C such as ADA compliance.

         5. Gathers lease comparables and completes financial analysis.

         6. Negotiates all financial and policy matters with the external entity, to include presentation of counter proposals to the external entity. Coordinates any involvement with Office of the President and/or Office of the General Counsel of The Regents for legal matters pertaining to the transaction.

         7. Coordinates obtaining the Environmental Impact Classification in compliance with the California Environmental Quality Act (CEQA) with the Physical Planning staff.

         8. Prepares the lease agreement with the necessary terms and conditions, or reviews terms and conditions of the external entity's lease agreement.

         9. Secures necessary approvals for changes in the lease agreement, from the Office of the President and/or the Office of the General Counsel of The Regents.

         10. Secures signature of the authorized University party on the Data and Approval Sheet (Refer to Exhibit D) prior to obtaining authorized University signatures on the lease agreement.

         11. Secures signature(s) of the authorized University representative on the lease agreement.

         12. Secures signature(s) of the external entity.

         13. Distributes the executed lease agreement and Data and Approval Sheet to the Initiating Party, dean’s and/or director's office, the Office of the President, accounting office(s) and any other department involved in performing the terms and conditions of the lease agreement.

         14. Enters the terms and conditions of the lease agreement in RED's lease database system.

         15. Maintains all original lease agreements and ancillary documents as the office of record.

         16. Coordinates obtaining the certificate(s) of insurance as described in the lease agreement from both the external entity and UCSD's Risk Management.

   2. Administrative Responsibilities

      1. Renovations, Repairs and Alterations - All proposed facility related changes to leased properties, as described in the lease agreement, regardless of the fund source are to be negotiated and coordinated by RED. Renovations, repairs and alterations at leased facilities are subject to requirements beyond those on campus, which may include obtaining City of San Diego building permits, inspections by City building inspectors, liability issues and compliance with City codes. It is in the best interest of the University that work at off-campus leased facilities be approved and accomplished by the external entity and coordinated through RED. RED will coordinate the required approval by the external entity and the EH&S review and approval of plans for all renovations, repairs and alterations to University-occupied space.

      2. Lease Renewals - RED is responsible for negotiating and coordinating the renewal of lease terms for all off-campus leased space. RED will contact the department representative four to six months prior to the required lease renewal notification date, as described in the lease agreement, to discuss renewal of the lease agreement. RED will negotiate the new lease terms, including financial terms, and process the appropriate documents memorializing the agreement.

      3. Lease Terminations - RED will contact the department representative four months prior to the notice date as stated in the lease agreement to determine if the department plans to vacate the premises or renew the lease agreement. RED will coordinate all aspects of either vacating the premises or renewing the lease agreement.

      4. Lease Administration - Any questions arising from occupancy of off-campus leased space are to be directed to RED for coordination and/or resolution.