September 22, 2026
Agenda Item No. 12
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Seimone Jurjis, City Manager - 949-644-3001, [email protected] PREPARED BY:
Lauren Wooding Whitlinger, Real Property Manager - 949-644-3236, [email protected] TITLE:
Third Amendment to Lease with Secada Medical, LLC for Use of Suites 470, 485, and 400 at 1201 Dove Street ABSTRACT:
The City of Newport Beach (City) acquired the office building located at 1201 Dove Street, Newport Beach in May 2023. The building currently has 18 tenants and is actively being marketed for lease. Secada Medical, LLC, dba Ventris Medical (Secada) has been a tenant in the building since 2019 and has expanded with prior lease amendments in 2020 and 2024, occupying Suites 470 and 485. Secada desires to once again expand its lease premises by taking over the adjacent Suite 400, adding 3,323 square feet.
For the City Council’s consideration is a Third Amendment to Lease (Amendment) with Secada for the addition of Suite 400, which will run concurrently with the existing term expiring in 2031, at market rate rents.
RECOMMENDATIONS:
a) Find this matter is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing facilities) and Section 15302 (Replacement or Reconstruction) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment; and b) Authorize the City Manager and City Clerk to execute the Third Amendment to Lease between the City of Newport Beach and Secada Medical, LLC (dba Ventris Medical) for use of City Property, office space Suites 400, 470, and 485 located at 1201 Dove Street, in a form substantially similar to the amendment attached to the staff report.
DISCUSSION:
The City originally purchased the office building at 1201 Dove Street (Property) as an option for possibly developing a future headquarters for the Newport Beach Police Department (NBPD). This early acquisition has allowed the City to continue leasing the office spaces at the Property and recoup a portion of the purchase price with the pre-existing net income stream. The Property currently has 18 tenants and is actively being marketed for lease.
Lease History
Under its initial Office Lease Agreement (Lease) executed in 2019, Secada leased Suite 470, its original tenant space (Premises), at the Property for an initial term of five and a half years. The First and Second Amendments to Lease, executed in November 2020 and April 2024, respectively, expanded the Premises into Suite 485 and extended the term through April 30, 2031. The Lease and its First and Second Amendments are included for reference as Attachment B.
As Secada’s business continues to grow, the tenant seeks additional space for staff and operations. The proposed Amendment would allow expansion into the adjacent Suite 400, increasing the size of the Premises by 3,323 square feet, for a total rentable area of 7,818 square feet. With the expansion, the Amendment proposes the term of the agreement for the new space would expire concurrently with the existing agreement.
The City and tenant have negotiated an amended lease that reflects current market rents, including rent abatements and tenant improvement allowances consistent with market rate deal terms offered by competitive office properties in the area.
Third Amendment to Office Lease
While not an exhaustive list, key terms of the proposed Amendment for use of Suite 400 at the Property are summarized below:
The initial term shall commence the earlier of the date the tenant commences operation from the expansion space or seven months following the date of the Amendment, and will terminate concurrently with the existing lease on April 30, 2031, with no options to extend the term.
Monthly base rent during the term shall be set as follows:
Period
Monthly Base Rent
(expansion space)
Monthly Base Rent Per Rentable Square Foot
Additional Space Commencement – 12th full calendar months $10,467.45
$3.15
Months 13-24
$10,781.47
$3.24
Months 25-36
$11,104.92
$3.34
Months 37-48
$11,438.07
$3.44
Months 49- April 30, 2031
$11,781.21
$3.55
Base rent shall be abated in its entirety for the first five months of the new term for the expansion space, and $2,592.45 of the monthly rent shall be abated for months six through eleven of the new term for the expansion space. While Secada anticipates needing all the expansion space within approximately 12 months, a portion of the new space will not initially be utilized by the tenant.
A tenant work allowance in an amount not to exceed $30.00 per square foot of the leased Premises (3,323 square feet) may be reimbursed for expenses incurred related to alterations to the expansion space, to be performed by the tenant’s contractor. Disbursement of the allowance must be requested by June 30, 2027, or the allowance will be forfeited.
Secada shall increase the amount of its security deposit on retainer with the City by $12,959.33, for a total of $31,006.76, in connection with the entire Premises under the Amendment.
Brokers from CBRE, Inc. represented the property manager and the City in brokering the transaction and will be paid a commission for this Amendment.
Secada shall continue to provide certificates of insurance to the satisfaction of the City’s property manager, naming the City as additional insured.
The Amendment has been reviewed by the City Attorney’s Office and has been approved as to form. Secada has reviewed and approved the terms of the Amendment.
FISCAL IMPACT:
Revenues collected pursuant to the proposed Amendment, $125,609 per year, shall be increased annually as prescribed in the Amendment, and will be posted to the General Fund Real Property accounts in the City Manager’s Office, 010-01020205-551305. The revenues net of any tenant improvement allowance, rent abatement, or broker fees are included in the budget for Fiscal Year 2026-27.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this matter is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing facilities) and Section 15302 (Replacement or Reconstruction) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because this project has no potential to have a significant effect on the environment. The City Council’s action authorizes execution of the Third Amendment for Secada’s use of an existing commercial office space, which may include tenant improvements (i.e., remodeling) pursuant to the Amendment.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A – Third Amendment to Lease
Attachment B – Office Lease Agreement and First and Second Amendments to Lease Third Amendment to Lease with Secada Medical, LLC for Use of Suites 470, 485, and 400 at 1201 Dove Street September 22, 2026
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