Item Number: 19
City Council / Board of Directors
Written Communications
Meeting of: July 21, 2026
Submitted By:
Jenele Davidson, Deputy City Manager
Subject:
Lease Agreement Between the City of Victorville and the Victor Valley Transit Authority for the Victor Valley Transportation Center
Recommendation:
That the Honorable City Council:
(1) Adopt Resolution No. 26-068 authorizing and approving the lease agreement between the City of Victorville and the Victor Valley Transit Authority (VVTA) for the Victor Valley Transportation Center; and
(2) Authorize the Deputy City Manager to execute said lease agreement.
Fiscal Impact:
If approved, the proposed Lease Agreement will have an initial five-year term from October 1, 2026, through September 30, 2031, with a monthly base rent of $8,973.00, resulting in total anticipated revenue of $107,676.00 for the first year. The lease provides for a two percent (2%) base rent increase each year following the initial year. Revenues associated with this lease have been budgeted under Account Code 4705403-45200 for the 2026/27 Fiscal Year.
The Lease Agreement also includes an Annual Prepayment Discount of five percent (5%) if the full year's rent is paid in advance of the lease commencement date or any anniversary thereof. Should this option be exercised in any lease year, the associated budgeted revenue will be adjusted accordingly.
Revenue generated by this lease and expenses associated with maintaining the Victor Valley Transportation Center are tracked separately in Fund 470 to monitor lease revenue, ensure the annual rent escalator is applied, and allow unexpended funds from each fiscal year to remain available for future maintenance and related expenses. 4 8
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Strategic Plan Goal:
This item aligns with Strategic Goal A, Financial Sustainability. By leasing the Victor Valley Transportation Center to VVTA, the City will generate a reliable revenue source that offsets maintenance obligations, supports future capital improvements to the facility, and ensures the facility remains actively utilized for its intended public transportation purpose.
Background:
On September 30, 2021, the City of Victorville entered into a Sublease Agreement with the Victor Valley Transit Authority (VVTA) for the Victor Valley Transportation Center (“Transportation Center”), located at 16838 D Street in Old Town Victorville. The sublease allowed for the relocation of VVTA’s transfer hub from its former location at 7th Street and Lorene Drive, near Costco, to its current location. The Transportation Center is better suited for VVTA’s operations and is used to operate and conduct various functions associated with providing public transportation in the High Desert region.
The Sublease Agreement commenced on October 1, 2021, and is set to expire on September 30, 2026. Although the agreement includes an option to extend the term upon written notice of at least 365 days prior to the expiration of the initial term, VVTA did not provide such notice. Accordingly, City staff notified VVTA of the upcoming termination at the end of the initial term.
Following this notification, VVTA requested that the City grant an additional term to allow for continued use of the property. The City and VVTA have agreed to enter into a new Lease Agreement with updated terms, while largely maintaining the prior sublease agreement’s conditions.
At the time the prior Sublease Agreement was executed, the property was encumbered by a lease associated with the Victorville Joint Powers Financing Authority’s Variable Rate Lease Revenue Bonds, 2007 Series A – Cogeneration Facility Project, which required the agreement to be structured as a sublease with written consent from the credit entity, BNP Paribas. As this encumbrance is no longer in place, the parties are now able to enter into a direct Lease Agreement.
Discussion:
If approved, the City and VVTA will enter into a new Lease Agreement (Exhibit 1 of Resolution No. 26-068 in Attachment A) for the Victor Valley Transportation Center with an initial term of five (5) years, commencing on October 1, 2026, and expiring on September 30, 2031, with an option to renew the lease for two (2) additional one (1) year terms. The leased premises will consist of the 6,730 square foot Transportation Center building and the parking lots, walkways, concrete areas immediately surrounding the Transportation Center building, and other exterior paved areas, but excluding the Compressed Natural Gas Station (“CNG Station”) and eight (8) parking spaces in the lot west of 4th Street.
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As part of the agreement, VVTA has agreed to conduct annual meetings between the Victorville City Manager and the Executive Director of VVTA, or their designees, to discuss the status of VVTA’s efforts regarding future development of a transfer hub within the City and its intentions related the continued use of the Victor Valley Transportation Center site.
In preparation for the new Lease Agreement, staff conducted a fair market analysis and determined that a monthly base rent of $8,973 is appropriate for the location. Consistent with the prior sublease, the new lease includes an annual escalation of two percent (2%) on each anniversary of the lease commencement date, as well as an Annual Prepayment Discount of five percent (5%) if the full year’s rent is paid in advance of the lease commencement date or any anniversary thereof.
The proposed Lease Agreement will ensure the facility is utilized for its originally intended purpose, provide a steady site presence, and generate lease revenue to fund the City’s maintenance obligations. Under the Lease Agreement, VVTA will continue to perform day-to-day maintenance and operation of the facility, including:
•Janitorial and cleaning services for the interior and exterior of the leased premises; •Preventative maintenance and repairs;
•Inspection, servicing, and repair of mechanical, electrical, lighting, plumbing and life safety systems (with the exception of the heating, ventilation, and air conditioning (“HVAC”) systems);
•Servicing of fire extinguishers and the fire suppression system; •Repairs to fixtures and/or equipment; and
•Maintaining exterior paint and signage.
VVTA will also provide onsite security during all hours of operation, including at least one security guard, maintain an active security alarm system and surveillance cameras at all times, and report any accidents or incidents on the leased premises to the City within 24 hours of occurrence.
The City will maintain and repair the facility’s roof and HVAC system, as well as the CNG Station and structural repairs to concrete sidewalks, pathways, and curbing. VVTA and the City will share expenses related to the maintenance and repair of drive aisles and parking lot areas that endure vehicular traffic, including, but not limited to, slurry seal, repaving, concrete repairs, and painting/restriping.
Staff recommends that the City Council adopt Resolution No. 26-068 authorizing and approving the Lease Agreement between the City of Victorville and VVTA for the Victor Valley Transportation Center and authorize the Deputy City Manager to execute said Lease Agreement.
Staff is available for any questions the City Council may have. 4 8
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Prepared By:
Alex M. Garcia, Finance Analyst
Attachments: A. Resolution No. 26-068