City of Culver City, California
Agenda Item Report
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Meeting Date: 02/17/2011 Item Number: J-1
CITY COUNCIL / REDEVELOPMENT AGENCY BOARD / REDEVELOPMENT
FINANCING AUTHORITY BOARD AGENDA ITEM: (1) Adoption of a Resolution of
the City Council Approving the Issuance, Sale and Delivery of Tax Allocation
Bonds, (2) Adoption of a Resolution of the Redevelopment Agency Authorizing the
Issuance, Sale and Delivery of Tax Allocation Bonds, Approving as to Form and
Authorizing the Execution and Delivery of Certain Documents in Connection with
Such Bonds and Authorizing other Related Actions, (3) Adoption of a Resolution of
the Redevelopment Financing Authority Approving the Execution and Delivery of a
Bond Agreement, and (4) Approval of Agreements with Bond Consultants in
Connection with the Sale and Issuance of 2011 Tax Allocation Bonds for the Culver
City Redevelopment Project.
Contact Person/Dept.: Glenn Heald/CDD
Todd Tipton/CDD
Nick Kimball/Finance
Phone Number: 310-253-5752
310-253-5783
310-253-6013
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail and Posting on Website) Press Release Dated and Released
on Thursday, February 10, 2011 to E-Mail Notification Groups for the City Council and
Agency Board Agenda and Media and Posting of Said Press Release on the City’s
Website (02/10/11); (Announcement) Announcement at the City Council/Agency
Board/Financing Authority Board Meeting of Tonight’s Meetings (02/14/11);
Advertisement in the Culver City News (02/17/11) (E-Mail) Meetings and Agendas – City
Council (02/15/11); (E-Mail) Meetings and Agendas - Redevelopment Agency (02/15/11);
(E-Mail) Ongoing Topics – Fiscal and Budget Issues (02/15/11).
Department Approval:
Sol Blumenfeld (02/14/11)
Jeff Muir (02/14/11)
City Attorney Approval:
Agency General Counsel Approval:
Murray Kane: (02/15/11)
Chief Financial Officer Approval:
Jeff Muir (02/14/11)
City Manager/Executive Director Approval:
John Nachbar: (02/15/11)
RECOMMENDATION:
Staff recommends the City Council (City Council), Redevelopment Agency
(Agency Board) and Redevelopment Financing Authority Board of Directors
(Authority Board) take action to approve documents and adopt resolutions
authorizing the sale and issuance of 2011 Tax Allocation Bonds for the Culver City
Redevelopment Project (2011 Bonds) and authorize the execution of agreements
with the bond consultants in connection with the 2011 Bonds.
BACKGROUND:
Over the years, the Culver City Redevelopment Agency has issued tax allocation
bonds to finance various redevelopment activities|1010|. California Redevelopment Law City of Culver City, California
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allows redevelopment agencies to pledge property tax increment to support bonded
indebtedness and to be expended directly on Agency obligations.
The deadline for issuing debt for Component Areas 1 and 2 occurs in 2014, after
which the Agency can no longer pledge tax increment from those Component Areas
to fund new debt. After 2014, tax increment will only be received from those areas
to repay debt that existed prior to the expiration date. Upon repayment of that debt,
tax increment can no longer be collected from the expired Component Areas.
DISCUSSION:
Due to the looming expiration dates and the flattening of tax increment generated
from the Component Areas during the past few years, the Agency has an
opportunity to maximize its bonding capacity by issuing tax allocation bonds and
receiving new bond proceeds. The new bond proceeds may be used to pursue a
number of potential development opportunities, including some projects identified in
a Cooperation Agreement with the City.
Tax-exempt bonds may be used primarily for infrastructure type projects for which
no revenues will be received in return. Tax-exempt bond proceeds typically must be
spent within three years of receipt. Taxable bonds offer much more flexibility as they
may be used for any legal purpose, including for projects that generate revenue, and
there is no specific deadline for expending the funds.
Consultant Services:
At the Agency Board meeting on November 1, 2010, the Agency Board approved
staff’s recommendation to secure the team of professional bond consultants that
assisted the Agency in its previous bond issues: Financial Advisor, Fieldman
Rolapp & Associates; Fiscal Consultant, Keyser Marston Associates; Bond
Underwriter, Stone & Youngberg LLC; Agency Bond Counsel, Richards Watson and
Gershon; and Agency Counsel, Kane, Ballmer & Berkman. All of these firms are
specialized professional bond service firms and are highly regarded in their
respective fields. Staff recommends approving professional service agreements
with these firms related to the proposed 2011 Bond Issue.
2011 Bonds:
The Bond Team has prepared documents for the Agency to sell up to $16 million of
tax-exempt Tax Allocation Bonds and up to $45 million of taxable Tax Allocation
Bonds. It is unlikely the actual proceeds will reach these amounts, but if pricing
conditions improve this provides adequate flexibility. If approved for issuance and
sale, the proceeds of the 2011 Bonds will be used only for projects and purposes as
directed and authorized by the Agency Board. Staff has identified several
appropriate uses and their estimated costs, as denoted in Table 1, Potential Bond
Proceeds Uses and Estimated Costs (Attachment No. 7). Use of 2011 Bond
proceeds will also include: (a) funding a debt service reserve account for the 2011 City of Culver City, California
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Bonds, and (b) paying the costs of issuing the 2011 Bonds, including costs for
consultant services and bond rating services related thereto. The 2011 Bonds are
special obligations of the Agency, payable exclusively from tax increment revenues
to be derived by the Project Area, less amounts needed to make loan payments on
certain outstanding senior loans of the Agency. The 2011 Bonds are not an
obligation of the City of Culver City.
The Redevelopment Financing Authority will sell the 2011 Bonds to Stone &
Youngberg LLC, as underwriter of the Bonds, pursuant to a Bond Purchase
Agreement, to affect a negotiated bond sale.
Procedure:
To initiate the bond financing, the following actions, which are also referenced in the
Preliminary Official Statement (Attachment No. 5), are required.
• Adopt a City Council Resolution approving the issuance, sale and delivery of tax
allocation bonds by the Culver City Redevelopment Agency.
• Adopt an Agency Resolution authorizing the issuance, sale and delivery of tax
allocation bonds, and authorizing the execution and delivery of certain
documents in connection with such bonds and authorizing other related actions
• Approve the execution of agreements with members of the Bond Team: Stone &
Youngberg LLC, as Bond Underwriter; Keyser Marston Associates, as Fiscal
Consultant; Richards Watson & Gershon, as Bond Counsel; and Fieldman,
Rolapp and Associates, as Financial Advisor.
• Adopt a Financing Authority Resolution approving the execution and delivery of a
bond purchase agreement by and among the Agency, the Financing Authority
and the Underwriter.
The Agency Resolution provides that the maximum par amount of the 2011 Bonds
will be $16 million of tax-exempt bonds and $45 million of taxable bonds, and the
interest rates on the 2011 Bonds will be such that the true interest cost would not
exceed 9% for the tax-exempt series and 10% for the taxable series. These are the
upper limits to provide adequate flexibility at the time of pricing. Staff anticipates
both the actual interest rates and the amount of bonds issued to be lower than these
amounts.
By adopting its Resolution, the Agency Board will be approving as to form the
documents to be executed by the Agency in connection with the sale and issuance
of the 2011 Bonds. U.S. Bank National Association, which presently serves as
trustee under the Master Indenture and the First, Second, Third and Fourth
Supplemental Indenture, will continue to serve as Trustee under the Fifth
Supplemental Indenture.
City of Culver City, California
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FISCAL ANALYSIS:
The current estimate of the bond issue is up to $61,000,000. The average true
interest cost on the bonds is estimated at 8.5%. Debt service coverage of current
revenues is 125% or more in all years. Assuming current rates, the issuance and
sale of the proposed 2011 Tax Allocation Bonds would increase the Agency’s debt
service cost by approximately $6 million per year to a total annual debt service cost
of $20 million. Under current market conditions, the total estimated amount of bond
proceeds would be approximately $34 million taxable and $13 million tax exempt.
The final amounts will depend on interest rates at the time of bond. The Agency’s
bond underwriter anticipates a bond closing in early March 2011.
The full costs of issuance of the 2011 Bonds, including the cost of the services of
the Bond Team, will be paid out of the proceeds of the sale of the 2011 Bonds.
ATTACHMENTS:
1. City Council Resolution approving the issuance, sale and delivery of tax
allocation bonds by the Culver City Redevelopment Agency.
2. Redevelopment Agency Resolution authorizing the issuance, sale and delivery of
tax allocation bonds, and authorizing the execution and delivery of certain
documents in connection with such bonds and authorizing other related actions.
3. Redevelopment Financing Authority Resolution approving the execution and
delivery of a bond purchase agreement by and among the Agency, the Financing
Authority and the Underwriter.
4. Fifth Supplemental Indenture.
5. Preliminary Official Statement.
6. Bond Purchase Agreement.
7. Table 1 - Potential Bond Proceeds Uses and Estimated Costs.
8. Agreements with the Bond Consultant Team.
MOTIONS (must be taken separately and in this order):
That the City Council:
1. Adopt a Resolution Approving the Issuance, Sale and Delivery of Tax Allocation
Bonds by the Culver City Redevelopment Agency.
City of Culver City, California
Agenda Item Report
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That the Redevelopment Agency Board:
1. Adopt a Resolution Authorizing the Issuance, Sale and Delivery of Tax Allocation
Bonds, Approving as to Form and Authorizing the Execution and Delivery of
Certain Documents in Connection With Such Bonds and Authorizing Other
Related Actions; and,
2. Approve the Agreements with Stone & Youngberg, LLC, as Bond Underwriter,
Keyser Marston Associates as Fiscal Consultant, Richards Watson & Gershon as
Bond Counsel, and Fieldman, Rolapp and Associates as Financial Advisor; and,
3. Authorize the Agency General Counsel to review/prepare the necessary
documents; and,
4. Authorize the Executive Director to execute such documents on behalf of the
Agency.
That the Redevelopment Financing Authority Board:
1. Adopt a Resolution Approving the Execution and Delivery of a Bond Purchase
Agreement by and Among the Culver City Redevelopment Agency, the Culver
City Redevelopment Financing Authority and Stone & Youngberg LLC.
|1010| In 1989, the Authority issued the 1989 Series A and Series B Revenue Bonds ($149,995,467.30
aggregate principal amount) for financing and refinancing activities in Redevelopment Project Area
Nos. 1, 2, and 3. In connection with the 1989 Authority Bonds, the Authority and the Agency entered
into three separate loan agreements (one for each project area), pursuant to which the Agency made
loan repayments in amounts sufficient for the Authority to pay debt service on the bonds.
Subsequently, the Authority issued the 1993 Tax Allocation Refunding Revenue Bonds
($128,070,000 original principal amount) to refinance a majority of the outstanding 1989 Bonds. The
Agency and the Authority also entered into separate loan agreements in connection with the 1993
Authority Bonds. . Subsequently, the Agency issued the 1999 Series A and Series B Tax Allocation
Refunding Bonds in September 1999, the 2002 Series A Tax Allocation Bonds in April 2002, 2004
Series A Tax Allocation Refunding Bonds, and 2005 Series A Tax Allocation Refunding Bonds. The
1999 Bonds refinanced most of the remaining outstanding 1989 Bonds (totaling $22,920,000) and
realized a net present value savings of over $1.1 million. In addition, the 1999 Bonds generated
$25,006,779.39 in new bond proceeds to finance eligible redevelopment activities within the merged
Culver City Redevelopment Project Area. The Agency sold the bonds to the Authority, which then
immediately resold the bonds to Stone & Youngberg LLC, as underwriter of the Bonds, pursuant to a
Bond Purchase Agreement among the Authority, Agency, and Stone & Youngberg, in a negotiated
bond sale. The 1999 Series A Bonds were issued under an Indenture (Master Indenture) by and
between the Agency and U.S. Bank National Association (formerly U.S. Bank Trust National
Association), as trustee. The Agency issued $28,280,000 in 2002 Tax Allocation Bonds, and
generated net proceeds of $25,465,765. The 2004 Bonds in the principal amount of $83,470,000
effected a refunding of some of the remaining 1993 Authority Bonds. The most recent bond issuance
was in 2005 for $17,780,000 at 4.35% to refund all of the 1999 Series B Bonds. Upon sale of the
2005 Bonds, the Agency’s bond indebtedness was approximately $282,037,000 and debt service
coverage of current revenues was 133%. The 2002, 2004 and 2005 bonds were also sold in a
negotiated sale through the Authority to Stone & Youngberg and were issued on a parity with the
1999 Series A Bonds under the Master Indenture, as supplemented and amended by supplemental
indentures. .
MEETING DATE: 02/17111
AGENDA ITEM: JOINT CITY COUNCIL/REDEVELOPMENT
AGENCY/FINANCING AUTHORITY: Consideration of Issuance of a Tax
Allocation Bond.
ATTACHMENTS
1. City Council Resolution approving the issuance, sale and
delivery of tax allocation bonds by the Culver City
Redevelopment Agency.
2. Redevelopment Agency Resolution authorizing the issuance,
sale and delivery of tax allocation bonds, and authorizing the
execution and delivery of certain documents in connection
with such bonds and authorizing other related actions,
including execution of agreements with bond counsel.
3. Redevelopment Financing Authority Resolution
approving the execution and delivery of a bond purchase
agreement by and among the Agency, the Financing Authority
and the Underwriter.
Pages
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4. Fifth Supplemental Indenture. 11-31
5. Preliminary Official Statement. 32-105
6. Bond Purchase Agreement. 106-128
7. Table 1 - Potential Bond Proceeds Uses and Estimated Costs. 129
8. Agreements with the Bond Consultant Team. 130-149 I
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Attachment
RESOLUTION NO. 2011-R
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CULVER CITY, CALIFORNIA, APPROVING THE ISSUANCE,
SALE AND DELIVERY OF TAX ALLOCATION BONDS BY THE
CULVER CITY REDEVELOPMENT AGENCY.
WHEREAS, the Culver City Redevelopment Agency (the "Agency") is a
redevelopment agency authorized pursuant to the Community Redevelopment Law of the
State of California, being Part 1 of Division 24 (commencing with Section 33000) of the
California Health and Safety Code (the "CRL") to incur indebtedness for the purpose of
financing certain redevelopment activities for the benefit of its redevelopment project areas;
WHEREAS, a redevelopment plan (the "Redevelopment Plan") for the Culver
City Redevelopment Project (the "Project") has been duly approved and adopted by the
City of Culver City, and all requirements of law for and precedent to the adoption and
approval of such Redevelopment Plan have been duly complied with;
WHEREAS, the Redevelopment Plan contemplates that the Agency would
issue bonds from time to time to finance a portion of the costs of the Project;
WHEREAS, the Agency proposes to issue tax allocation bonds (the "2011
Bonds") for the purpose of financing costs of the Project;
WHEREAS, Section 33640 of the CRL requires the Agency to obtain the
approval of the City Council before the issuance of the 2011 Bonds; and
WHEREAS, the City Council, with the aid of City staff, has reviewed the
documentation relating to the issuance of the 2011 Bonds and desires to approve the
issuance, sale and delivery of the 2011 Bonds by the Agency_
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iMillinr z . ( ZAP ...
CA atOL A. H wr: B, ity Attorney f erL__
APPROVGD AS TO FQ
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NOW, THEREFORE, the City Council of the City of Culver City DOES
HEREBY FIND, DETERMINE, RESOLVE AND ORDER, as follows:
SECTION 1. Recitals. The foregoing recitals, and each of them, are true and
correct.
SECTION 2. Approval of Financing. The issuance, sale and delivery of the
2011 Bonds by the Agency are hereby approved.
SECTION 3. Other Acts. Each officer of the City, is hereby authorized and
directed, jointly and severally, to execute and deliver such documents and instruments and
to do such things which may be necessary or proper for assisting the Agency in connection
with the issuance, sale and delivery of the 2011 Bonds and to effectuate the purposes of
this Resolution, and any such actions previously taken by such officers are hereby ratified
and confirmed.
SECTION 4. Effective Date. This Resolution shall take effect immediately
upon adoption,
APPROVED AND ADOPTED, this 17th day of February, 2011.
CHRISTOPHER ARMENIA, MAYOR
City of Culver City, California
ATTEST:
MARTIN R. COLE, City Clerk
All-00088
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Attachment 2
RESOLUTION NO. 2011-A
A RESOLUTION OF THE CULVER CITY REDEVELOPMENT
AGENCY AUTHORIZING THE ISSUANCE, SALE AND
DELIVERY OF TAX ALLOCATION BONDS, APPROVING AS
TO FORM AND AUTHORIZING THE EXECUTION AND
• DELIVERY OF CERTAIN DOCUMENTS IN CONNECTION
WITH SUCH BONDS AND AUTHORIZING OTHER RELATED
ACTIONS.
WHEREAS, the Culver City Redevelopment Agency (the "Agency") is a
redevelopment agency, a public body, corporate and politic, duly created, established and
authorized to transact business and exercise its powers, all under and pursuant to the
Community Redevelopment Law of the State of California (Part 1 of Division 24 of the
Health and Safety Code), and the powers of the Agency include the power to issue bonds,
notes, interim certificates, debentures or other obligations for any of its corporate purposes;
WHEREAS, a redevelopment plan (the "Redevelopment Plan") for the Culver
City Redevelopment Project (the "Project") has been duly approved and adopted by the
City of Culver City, and all requirements of law for and precedent to the adoption and
approval of such Redevelopment Plan have been duly complied with;
WHEREAS, the Redevelopment Plan contemplates that the Agency would
issue bonds from time to time to finance a portion of the costs of the Project;
WHEREAS, the Agency has previously issued bonds pursuant to an
Indenture, dated as of October 1, 1999 (the "Master Indenture"), by and between the
Agency and U.S. Bank National Association, as successor trustee (the "Trustee"), as
amended and supplemented by a First Supplemental Indenture, dated as of April 1, 2002,
a Second Supplemental Indenture, dated as of April 1, 2004, a Third Supplemental
Indenture, dated as of March 1, 2005, and a Fourth Supplemental Indenture, dated as of
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June 11, 2007, each by and between the Agency and the Trustee (the Master Indenture,
as so amended and supplemented, and as further supplemented by the Fifth Supplemental
Indenture described below, being referred to herein as the "Indenture");
WHEREAS, the Agency desires to issue additional tax allocation bonds (the
"2011 Bonds") pursuant to and secured by the Indenture to finance a portion of the costs of
the Project; and
WHEREAS, there has been presented to the Agency the form of a Bond
Purchase Agreement (the "Bond Purchase Agreement"), pursuant to which the Agency will
sell the Bonds to the Culver City Redevelopment Financing Authority (the "Authority") for
resale to Stone & Youngberg LLC, the underwriter for the 2011 Bonds (the "Underwriter").
NOW, THEREFORE, the Culver City Redevelopment Agency Board DOES
HEREBY FIND, DETERMINE, RESOLVE AND ORDER, as follows:
SECTION 1. Recitals. The foregoing recitals, and each of them, are true and
correct.
SECTION 2. Series 20011 Bonds; Fifth Supplemental Indenture. Subject to
the parameters set forth below, the issuance of the 2011 Bonds, in one or more series,
pursuant to the terms of the Indenture, is hereby authorized. The form of the Fifth
Supplemental Indenture (the "Fifth Supplemental Indenture") with respect to the 2011
Bonds, to be entered into by and between the Agency and the Trustee, and on file in the
office of the Secretary of the Agency (the "Secretary"), is hereby approved. Each of the
Chair (or, in the absence of the Chair, the Vice Chair) and the Executive Director of the
Agency (the "Authorized Officers"), acting singly, is hereby authorized and directed, for and
in the name and on behalf of the Agency, to execute and deliver the Fifth Supplemental
Indenture in substantially said form, with such changes therein as the Authorized Officer
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executing the same may approve (such approval to be conclusively evidenced by the
Authorized Officer's execution and delivery thereof).
SECTION 3. Bond Purchase Agreement. The form of Bond Purchase
Agreement, proposed to be entered into by and among the Agency, the Authority and the
Underwriter, and on file with the Secretary, is hereby approved. Subject to the limitations
set forth below, each Authorized Officer, acting singly, is hereby authorized and directed to
execute and deliver, for and in the name of the Agency, the Bond Purchase Agreement in
substantially said form, with such changes therein as the Authorized Officer may approve
(such approval to be conclusively evidenced by the Authorized Officer's execution and
delivery thereof).
SECTION 4. Certain Parameters Relating to Sale of Bonds. Each
Authorized Officer, acting singly, is hereby authorized and directed to act on behalf of the
Agency to establish and determine the following:
a. Whether the 2011 Bonds shall be issued in one or multiple
series;
b. With respect to each series of 2011 Bonds, whether the Agency
shall covenant to comply with the requirements of Internal Revenue Code of 1986, as
amended (and the regulations promulgated thereunder), to make the interest on such
series of 2011 Bonds excludable from gross income for federal tax purposes (the 2011
Bonds for which such covenants will apply being referred to below as the "Tax-Exempt
Bonds," and all other 2011 Bonds being referred to below as the "Taxable Bonds");
c. With respect to each series of 2011 Bonds, whether the bonds
will be current interest bonds or capital appreciation bonds, or a combination thereof;
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d. The aggregate principal amount the 2011 Bonds, provided that
the aggregate initial principal amount of the Tax-Exempt Bonds shall not exceed
$16,000,000, and the aggregate initial principal amount of Taxable Bonds shall not exceed
$45,000,000;
e. The purchase price of the 2011 Bonds and the interest rates
thereon, provided that the true interest cost with respect to the Tax-Exempt Bonds shall not
exceed 9.0 percent, and the true interest cost with respect to the Taxable Bonds shall not
exceed 10.0 percent; and
f. The Underwriter's compensation (i.e., underwriter's discount),
provided that such compensation, exclusive of any original issue discount, shall not exceed
1.5% percent of the aggregate principal amount of the 2011 Bonds.
The authorization and powers delegated to the Authorized Officer by Sections 2 and 3 of
this Resolution shall be valid for a period of 180 days from the date of adoption of this
Resolution.
SECTION 5. Preliminary Official Statement. The preliminary Official
Statement relating to the 2011 Bonds (the "Preliminary Official Statement"), in the form
presented and on file with the Secretary, is hereby approved. Each Authorized Officer,
acting singly, is hereby authorized and directed, for and in the name and on behalf of the
Agency, to cause the Preliminary Official Statement in substantially said form, with such
changes therein as such Authorized Officer may approve, to be deemed final for the
purposes of Rule 15c2-12 of the Securities and Exchange Act of 1934. The distribution by
the Underwriter of copies of the Preliminary Official Statement to potential purchasers of
the 2011 Bonds is hereby approved.
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SECTION 6. Official Statement. Each Authorized Officer, acting singly, is
hereby authorized and directed to cause the Preliminary Official Statement to be brought
into the form of a final Official Statement (the "Official Statement"), and to execute the
same for and in the name and on behalf of the Agency, with such changes therein as such
Authorized Officer may approve (such approval to be conclusively evidenced by such
Authorized Officer's execution and delivery thereof). The distribution and use of the Official
Statement by the Underwriter in connection with the sale of the 2011 Bonds are hereby
approved.
SECTION 7. Other Acts. Each Authorized Officer and the other officers of
the Agency are hereby authorized and directed to do any and all things and to execute and
deliver any and all documents which they may deem necessary or advisable in order to
effectuate the purposes of this Resolution and each document approved hereby, and any
such actions previously taken by such officers are hereby ratified and confirmed.
SECTION 8. Effective Date. This Resolution shall take effect immediately
upon adoption.
APPROVED AND ADOPTED, this 17 th day of February, 2011.
MICHEAL 0' LEARY, CHAIR
Culver City Redevelopment Agency
ATTEST: APPROVED AS TO FORM:
ALICE PRASAD, Secretary MURRAY KANE, Agency General Counsel
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Attachment 3
RESOLUTION NO. 2011- F
A RESOLUTION OF THE CULVER CITY REDEVELOPMENT
FINANCING AUTHORITY, APPROVING THE EXECUTION
AND DELIVERY OF A BOND PURCHASE AGREEMENT.
WHEREAS, the City Council of the City of Culver City approved and adopted
a redevelopment plan for a redevelopment project designated as the Culver City
Redevelopment Project (the "Project");
WHEREAS, the Culver City Redevelopment Agency (the "Agency") desires to
issue tax allocation bonds (the "2011 Bonds") for the purpose of financing costs of the
Project Area;
WHEREAS, pursuant to the Marks-Roos Local Bond Pooling Act of 1985
(being Article 4, Chapter 5, Division 7, Title 1 of the California Government Code), the
Culver City Redevelopment Financing Authority (the "Authority") has the authority to
purchase and resell the 2011 Bonds; and
WHEREAS, there has been presented to the Authority a Bond Purchase
Agreement (the "Bond Purchase Agreement"), proposed to be entered into by and among
the Authority, the Agency and Stone & Youngberg LLC (the "Underwriter"), pursuant to
which the Authority would purchase the 2011 Bonds from the Agency for resale to the
Underwriter.
NOW, THEREFORE, the Culver City Redevelopment Financing Authority
DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER as follows:
SECTION 1. Recitals. The foregoing recitals, and each of them, are true
and correct.
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SECTION 2. Approvals. The Bond Purchase Agreement, in the form on file
with the Secretary of the Authority, and the purchase and resale of the 2011 Bonds
pursuant to the Bond Purchase Agreement upon the terms and conditions set forth therein
are hereby approved. Subject to the parameters set forth in the Resolution of the Agency
authorizing the sale and issuance of the 2011 Bonds, each of the Chair, Vice Chair and the
Executive Director of the Authority (each, an "Authorized Officer), acting singly, is hereby
authorized and directed, for and in the name and on behalf of the Authority, to execute and
deliver the Bond Purchase Agreement in substantially said form, with such changes
therein as the Authorized Officer executing the same may approve (such approval to be
conclusively evidenced by the Authorized Officer's execution and delivery thereof).
SECTION 3. Other Acts. Each Authorized Officer and the other officers of
the Authority are hereby authorized and directed, jointly and severally, to execute and
deliver any and all documents and instruments which they may deem necessary or proper
in connection with the purchase and resale of the 2011 Bonds as described above, or
otherwise to effectuate the purposes of this Resolution and the Bond Purchase Agreement,
and any such actions previously taken by such officers are hereby ratified, confirmed and
approved.
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SECTION 4. Effective Date. This Resolution shall take effect immediately
upon adoption.
APPROVED AND ADOPTED this 17th day of February, 2011.
MICHEAL 0' LEARY, CHAIR
Culver City Redevelopment Financing
Authority
ATTEST: APPROVED AS TO FORM:
ALICE PRASAD, Secretary Murray Kane, Legal Advisor
Al 1-00086 Attachment 4
CULVER CITY REDEVELOPMENT AGENCY
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee .
FIFTH SUPPLEMENTAL INDENTURE
Dated as of March 1,2011
Relating to
Culver City Redevelopment Agency
Tax Allocation
Capital Appreciation Bonds,
2011 Series A
(Culver City Redevelopment Project)
Culver City Redevelopment Agency
Taxable Tax Allocation Bonds,
2011 Series B
(Culver City Redevelopment Project)
RWG DRAFT: 2/11/2011
10634-000311327253v3.doc TABLE OF CONTENTS
Page
ARTICLE I AUTHORITY AND DEFINITIONS 2
Section 1.01 Supplemental Indenture 2
Section 1.02 Authority for Fifth Supplemental Indenture 2
Section 1.03 Definitions 2
ARTICLE II THE SERIES 2011 BONDS 3
Section 2.01 Authorization 3
Section 2.02 Terms of Series 2011A Bonds 3
Section 2.03 Terms of Series 2011B Bonds 3
Section 2.04 Form. of Series 2011 Bonds 5
Section 2.05 Book-Entry System 5
Section 2.06 Redemption of Series 2011A Bonds 5
Section 2.07 Redemption of Series 2011B Bonds 5
Section 2.08 General Redemption Provisions 6
Section 2.09 Application of Proceeds of Series 2011 Bonds 6
ARTICLE III MISCELLANEOUS 7
Section 3.01 Executions in Counterparts 7
APPENDIX A — FORM OF SERIES 2011A BOND
APPENDIX B — FORM OF SERIES 2011B BOND
1 0634-0003\1327253 v3.doc Fifth Supplemental Indenture
This Fifth Supplemental Indenture, dated as of March 1, 2011, is entered into by and
between the Culver City Redevelopment Agency, a public body, corporate and politic (the
"Agency"), and U.S. Bank National Association, a national banking association duly organized
and existing under laws of the United States of America and authorized to accept and execute
trusts of the character herein set forth, as trustee (the "Trustee").
Recitals ,
A. The Agency is a redevelopment agency, a public body, corporate and politic, duly
created, established and authorized to transact business and exercise its powers, all under and
pursuant to the Law (as defined in the Master Indenture hereinafter described), and the powers of
the Agency include the power to issue bonds for any of its corporate purposes.
B. A Redevelopment Plan (the "Redevelopment Plan") for a redevelopment project
known and designated as the "Culver City Redevelopment Project" (the "Project") has been
adopted and approved and all requirements of law for, and precedent to, the adoption and
approval of the Redevelopment Plan have been duly complied with.
C. The Redevelopment Plan contemplates that the Agency may issue bonds to
finance a portion of the costs of the Project.
D. Pursuant to an Indenture, dated as of October 1, 1999 (the "Master Indenture"), by
and between the Agency and U.S. Bank National Association, as successor trustee, as amended
and supplemented by a First Supplemental Indenture, dated as of April 1, 2002, a Second
Supplemental Indenture, dated as of April 1, 2004, a Third Supplemental Indenture, dated as of
March 1, 2005, and a Fourth Supplemental Indenture,- dated as of June 11, 2007, each by and
between the Agency and the Trustee, the Agency has previously issued its Tax Allocation
Refunding Bonds, 1999 Series A (Culver City Redevelopment Project) (the "Series 1999
Bonds"), Tax Allocation Bonds, 2002 Series A (Culver City Redevelopment Project) (the "Series
2002 Bonds"), Tax Allocation Refunding Bonds, 2004 Series A (Culver City Redevelopment
Project) (the "Series 2004 Bonds") and Tax Allocation Refunding Bonds, 2005 Series A (Culver
City Redevelopment Project) (the "Series 2005 Bonds").
E.
The Agency deems it necessary and desirable to issue Additional Bonds (as•
defined in the Master Indenture) for the purpose of financing costs of the Project.
F.
The Agency has determined to issue two series of bonds (together, the "Series
2011 Bonds"), all pursuant to and secured by the Master Indenture, as previously amended and
supplemented and as further supplemented by this Fifth Supplemental Indenture: (i) Capital
Appreciation Tax Allocation Bonds, 2011 Series A (Culver City Redevelopment Project) (the
"Series 2011A Bonds"), in the aggregate initial principal amount of $ , and
(ii) Taxable Tax Allocation Bonds, 2011 Series C (Culver City Redevelopment Project) (the
"Series 2011C Bonds"), in the aggregate principal amount of $
G.
Pursuant to the Master Indenture, as amended, the Series 1999A Bonds, the Series
2002 Bonds, the Series 2004 Bonds, the Series 2005 Bonds, and the Series 2011 Bonds and all
10634-0003 11327253v3.doc other Additional Bonds issued hereafter are secured by a pledge of the Agency's tax increment
revenues and are subordinate to the Agency's obligations to repay loans relating to the
outstanding Culver City Redevelopment Financing Authority 1993 Tax Allocation Refunding
Revenue Bonds.
H. The execution and delivery of the Series 2011 Bonds and of this Fifth
Supplemental Indenture have been duly authorized and all things necessary to make the Series
2011 Bonds, when executed by the Agency and authenticated by the Trustee, valid and binding
legal obligations of the Agency and to make this Fifth Supplemental Indenture a valid and
binding legal instrument for the security of the Series 2011 Bonds, have been done.
NOW THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETFI,
that in order to secure the payment of the principal of, and the interest and premium, if any, on,
all Series 2011 Bonds at any time issued and Outstanding under the Indenture, according to their
tenor, and to secure the performance and observance of all the covenants and conditions therein
and herein set forth, and to declare the terms and conditions upon and subject to which the Series
2011 Bonds are to be issued and received, and in consideration of the premises and of the mutual
covenants herein contained and of the purchase and acceptance of the Series 2011 Bonds by the
owners thereof, and for other valuable consideration, the receipt whereof is hereby
acknowledged, the Agency does hereby covenant and agree with the Trustee, for the benefit of
the respective holders from time to time of the Series 2011 Bonds, as follows:
ARTICLE I
AUTHORITY AND DEFINITIONS
Section 1.01 Supplemental Indenture. This Fifth Supplemental Indenture is
supplemental to the Master Indenture, as previously amended and supplemented. Save and
except as amended and supplemented by the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental
Indenture, the Master Indenture shall remain in full force and effect.
Section 1.02 Authority for Fifth Supplemental Indenture. This Fifth Supplemental
Indenture is adopted (i) pursuant to the provisions of the Law, and (ii) in accordance with Article
IV and Article VIII of the Master Indenture.
Section 1.03 Definitions. (a) Except as provided by this Fifth Supplemental Indenture,
all terms which are defined in Section 1.01 of the Master Indenture (as heretofore amended),
shall have the same meanings, respectively, in this Fifth Supplemental Indenture. The following
additional tetnis shall, for all purposes of the Indenture, have the following meanings:
"Closing Date" means, with respect to the Series 2011 Bonds,
"Fifth Supplemental Indenture" means this Fifth Supplemental Indenture, dated as
of , 2011, by and between the Agency and the Trustee.
"Initial Principal Amount" means, with respect to any Capital Appreciation Bond,
the initial principal amount thereof as of the Closing Date relating to such Bond.
2
2011. 2011.
10634-000311327253v3.doc "Series 2011 Bonds" means, together, the Series 2011A Bonds and the Series
2011B Bonds.
"Series 2011A Bonds" means the Culver City Redevelopment Agency Tax
Allocation Capital Appreciation Bonds, 2011 Series A (Culver City Redevelopment Project),
issued pursuant to this Fifth Supplemental Indenture.
"Series 2011B Bonds" means the Culver City Redevelopment Agency Taxable
Tax Allocation Bonds, 2011 Series B (Culver City Redevelopment Project), issued pursuant to
this Fifth Supplemental Indenture.
ARTICLE II
THE SERIES 2011 BONDS
Section 2.01 Authorization. The Series 2011 Bonds are hereby authorized to be issued
for the purpose of financing costs of the Project.
Section 2.02 Terms of Series 2011A Bonds. The Series 2011A Bonds authorized to be
issued by the Agency under and subject to the terms of the Indenture and the Law shall be
designated the "Culver City Redevelopment Agency Tax Allocation Capital Appreciation Bonds,
2011 Series A (Culver City Redevelopment Project)" and shall be in the initial aggregate
principal amount of $ . The Series 2011A Bonds shall be issued in fully
registered form in any denominations of Initial Principal Amount but shall reflect denominations
of $5,000 Final Compounded Amount or any integral multiple thereof. No Series 2011A Bond
shall have more than one maturity date. The Series 2011A Bonds shall be dated the Closing
Date, shall mature on November 1 in each of the years and in the Final Compounded Amounts
set forth in the following schedule. The Series 2011A Bonds shall be delivered on the Closing
Date in the aggregate Initial Principal Amounts set forth below. Interest on the Initial Principal
Amount of the Series 2011A Bonds shall accrue and compound at the yield to their maturity set
forth below (such interest being equal to the difference between the Final Compounded Amounts
and the Initial Principal Amounts thereof):
Maturity Initial Final Initial Principal Amount Yield to
Date Principal Compounded per $5,000 Final Maturity
(Nov. 1) Amount Amount Compounded Amount Date
Interest on each Series 2011A Bond shall be compounded semi-annually at the yield set
forth above from the Closing Date on each May 1 and November 1, commencing November 1,
2011, until maturity or earlier redemption thereof, coniputed using a year of 360 days of twelve
30-day months and shall be payable (i) at maturity as part of the Final Compounded Amount, or
(ii) at redemption as part of the Accreted Value to the redemption date. The Final Compounded
3
10634-000311327253v1doc
cs Amount, or the Accreted Value and redemption premium (if any), as applicable, with respect to
any Series 2011A Bond shall be paid upon presentation and surrender thereof, at maturity or the
prior redemption thereof, at the Trust Office, in lawful money of the United States of America.
Section 2.03 Terms of Series 2011B Bonds. The Series 2011B Bonds authorized to be
issued by the Agency under and subject to the terms of the Indenture and the Law shall be
designated the "Culver City Redevelopment Agency Taxable Tax Allocation Bonds, 2011 Series
B (Culver City Redevelopment Project)" and shall be in the aggregate principal amount of
. The Series 2011B Bonds shall be dated as of the Closing Date for the Series
2011B Bonds, shall bear interest at such rates (payable on May 1 and November 1 in each year,
commencing November 1, 2011) and shall mature and become payable as to principal on
November 1 in each of the years in the amounts set forth below:
Maturity Date Principal Interest Maturity Date Principal Interest
(Nov. 1) Amount Rate (Nov. 1) Amount Rate
Interest on the Series 2011B Bonds shall be computed on the basis of a 360-day year of
twelve 30-day months.
The Series 2011B Bonds shall be issued as fully registered bonds in the denomination of
$5,000, or any integral multiple of $5,000 (not exceeding the principal amount of Series 2011B
Bonds maturing at any one time). The Series 2011B Bonds shall be numbered as determined by
the Trustee. The Series 2011B Bonds shall bear interest from the Interest Payment Date next
preceding the date of authentication thereof, unless (i) such date of authentication is during the
period from the 16th day of the month next preceding an Interest Payment Date to and including
such Interest Payment Date, in which event they shall , bear interest from such Interest Payment
Date, or (ii) such date of authentication is on or before the 15th day of the month next preceding
the first Interest Payment Date, in which event they shall bear interest from their dated date;
provided, however, that if, at the time of authentication of any Series 2011B Bond, interest is
then in default on the Outstanding Series 2011B Bonds, such Series 2011B Bond shall bear
interest from the Interest Payment Date to which interest previously has been paid or made
available for payment on the Outstanding Series 2011B Bonds. Payment of interest on the Series
2011B Bonds due on or before the maturity or prior redemption of such Series 2011B Bonds
shall be made to the person whose name appears on the bond registration books of the Trustee as
the registered owner thereof, as of the close of business on the 15th day of the month next
preceding the Interest Payment Date. Subject to Section 2.12 of the Master Indenture, such
interest to be paid by check mailed on each Interest Payment Date by first-class mail to such
registered owner at his address as it appears on such books, or, upon written request received by
the Trustee prior to the 15th day of the month preceding an Interest Payment Date, of an Owner
of at least $1,000,000 in aggregate principal amount of Series 2011B Bonds, by wire transfer in
immediately available funds to an account within the United States designated by such Owner.
4
I 0634-000311327253v3.doc Principal of and redemption premiums, if any, on the Series 2011B Bonds shall be
payable upon the surrender thereof at maturity or the earlier redemption thereof at the Trust
Office. Principal of and redemption premiums, if any and interest on the Series 2011B Bonds
shall be paid in lawful money of the United States of America.
Section 2.04 Form of Series 2011 Bonds. The Series 2011A Bonds and the Series
2011B Bonds, and the certificate of authentication and the assignment to appear thereon, shall be
substantially in the forms attached hereto as Appendix A and Appendix B respectively, with
necessary or appropriate variations, omissions and insertions as permitted or required by this
Fifth Supplemental Indenture.
Section 2.05 Book-Entry System. The Series 2011 Bonds shall be initially issued as
Book-Entry Bonds, in accordance with Section 2.12 of the Master Indenture.
Section 2.06 Redemption of Series 2011A Bonds.
(a) Optional Redemption. The Series 2011A Bonds maturing on or before
November 1, 20 are not subject to optional redemption by the Agency. The Series 2011A
Bonds maturing on or after November 1, 20 shall be subject to redemption as a whole, or in
part among maturities as the Agency shall designate (Which designation shall be in writing and
shall be delivered to the Trustee no later than 45 days [or such shorter period as acceptable to the
Trustee] prior to the redemption date) and by lot within a maturity, in integral multiples of
$5,000 of Final Compounded Amount, on any date on or after November 1, 20 , at a
redemption price equal to [100] percent of the Accreted Value of the called Series 2011A Bonds
on the redemption date, without premium.
(b) Mandatory Sinking Account Redemption. The Series 2011A Bonds are
not subject to mandatory sinking account redemption prior to maturity.
Section 2.07 Redemption of Series 2011B Bonds.
(a) Optional Redemption. The Series 2011B Bonds maturing on or before
November 1, 20 are not subject to optional redemPtion by the Agency. The Series 2011B
Bonds maturing on or after November 1, 20 shall be subject to redemption as a whole or in
part, by such maturities as the Agency shall designate (which designation shall be in writing and
shall be delivered to the Trustee no later than 45 days [or such shorter period as acceptable to the
Trustee] prior to the redemption date), prior to their respective maturities at the option of the
Agency on any date on or after November 1, 20 , from funds derived by the Agency from any
source, at a redemption price equal to [100] percent of the principal amount of Series 2011B
Bonds called for redemption, together with interest accrued thereon to the redemption date.
(b) Mandatory Sinking Account Redemption. The Series 2011B Bonds
maturing on November 1, 20 are subject to redemption prior to their stated maturity, in part by
lot, from Sinking Account Instalhnents deposited in the Sinking Account, at the principal amount
thereof and interest accrued thereon to the date fixed for redemption, without premium,
according to the following schedule:
Redemption Date Principal Amount
5
10634-000311327253v3.doc (November 1) to be Redeemed
* maturity.
The Series 2011B Bonds maturing on November 1, 20 are subject to
redemption prior to their stated maturity, in part by lot, from Sinking Account Installments
deposited in the Sinking Account, at the principal amount thereof and interest accrued thereon to
the date fixed for redemption, without premium, according to the following schedule:
Redemption Date
(November 1)
Principal Amount
to be Redeemed
* maturity.
Section 2.08 General Redemption Provisions. Except as otherwise provided in this
Fifth Supplemental Indenture, the provisions set forth in Section 2.04(c) of the Master Indenture
shall apply to the Series 2011 Bonds. Without limiting the provisions set forth elsewhere in the
Indenture, it is hereby clarified that the Agency shall have the right to rescind any optional
redemption by written notice of rescission. Any notice of optional redemption of Series 2011
Bonds shall be cancelled and annulled if for any reason funds are not available on the date fixed
for redemption for the payment in full of the Series 2011 Bonds then called for redemption.
Neither such cancellation nor lack of available funds shall constitute an Event of Default under
the Indenture. The Agency and the
Trustee shall have no liability to the Owners or any other
party related to or arising from such rescission of redemption. The Trustee shall send notices of
rescission of such redemption in the same manner as the original notices of redemption were
sent.
Section 2.09 Application of Proceeds of Series 2011 Bonds.
(a) On the Closing Date, the Trustee shall receive proceeds from the sale of
the Series 2011A Bonds in the amount of $ (representing the aggregate principal
amount of the Series 2011A Bonds, less an underwriter's discount of $
). Immediately
upon receipt, the Trustee shall (i) transfer $ of such proceeds to the Agency for deposit
in the Series 2011A Account of the Redevelopment Fund (which account the Agency shall
establish upon issuance of the Series 2011A Bonds), (ii) deposit the amount of $
in
the Series 2011A Subaccotmt of the Reserve Account, and (iii) deposit the balance of
in the Series 2011A Expense Account of the Expense Fund.
(b) On the Closing Date, the Trustee shall receive proceeds from the sale of
the Series 2011B Bonds in the amount of $ (representing the aggregate principal
amount of the Series 2011B Bonds, [plus/minus] a net original issue [premium/discount] of
, and less an underwriter's discount of $ ). Immediately upon receipt,
the Trustee shall (i) transfer $ of such proceeds to the Agency for deposit in the Series
10634-000311327253v1doc
ksi3 2011B Account of the Redevelopment Fund (which account the Agency shall establish upon
issuance of the Series 2011B Bonds), (ii) deposit the amount of $ in the Series 2011B
Subaccount of the Reserve Account, and (iii) deposit the balance of $ in the Series
2011B Expense Account of the Expense Fund.
ARTICLE HI
MISCELLANEOUS
Section 3.01 Executions in Counterparts. This Fifth Supplemental Indenture may be
executed in any number of counterparts, each of such counterparts shall for all purposes be
deemed to be an original; and all such counterparts, as many of them as the Agency and the
Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the Culver City Redevelopment Agency has caused this Fifth
Supplemental Indenture to be signed in its name and on its behalf by one of its duly authorized
officers and U.S. Bank National Association to evidence its acceptance of the trusts hereby
created, has caused this Fifth Supplemental Indenture to be signed in its name and behalf by one
of its duly authorized officers all as of the date first above written.
CULVER CITY REDEVELOPMENT
AGENCY
By:
Executive Director
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
7
10634-000311327253v3.doc DOLLARS
DOLLARS
APPENDIX A
[Form of Series 2011A Bond]
[Unless this certificate is presented by an authorized representative of the Depository Trust
Company, a New York Corporation ("DTC"), to the Culver Redevelopment Agency or its agent
for registration of transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), any transfer, pledge, or other use hereof for value or
otherwise by or to any person is wrongful inasmuch as -the registered owner hereof, Cede & Co.,
has an interest herein.]
No. R-
CULVER CITY REDEVELOPMENT AGENCY
TAX ALLOCATION CAPITAL APPRECIATION BOND, 2011 SERIES A
(CULVER CITY REDEVELOPMENT PROJECT)
CUSIP:
YIELD TO MATURITY DATE ORIGINAL
MATURITY ISSUE DATE:
November 1,20 ,2011
REGISTERED OWNER: CEDE & CO.
INITIAL PRINCIPAL AMOUNT:
FINAL COMPOUNDED AMOUNT:
The Culver City Redevelopment Agency, a public body, corporate and politic, duly
organized and existing under and pursuant to the laws of the State of California (the "Agency"),
for value received hereby promises to pay to the registered owner specified above, or registered
assigns, in lawful money of the United States of America, either the Final Compounded Amount
identified above on the Maturity Date or the Accreted Value, plus any applicable redemption
premium, upon redemption prior to maturity. "Accreted Value," with respect to any Series
2011A Bond, means as of any date of calculation, the sum of the Initial Principal Amount thereof
and the interest accrued thereon to such date of calculation, compounded from the Original Issue
Date at the stated Yield to Maturity thereof on each May 1 and November 1, commencing
November 1, 2011. Interest on each Series 2011A Bond shall be computed using a year of 360
days of twelve 30-day months and shall be payable (i) at maturity as part of the Final
Compounded Amount, or (ii) at redemption as part of the Accreted Value to the redemption date.
The Final Compounded Amount, or the Accreted Value and redemption premium (if any), as
applicable, with respect to any Series 2011A Bond shall be paid upon presentation and surrender
thereof, at maturity or the prior redemption thereof, at the
This Series 2011A Bond is one of a duly authorized issue of bond of the Agency
designated "Culver City Redevelopment Agency Tax Allocation Capital Appreciation Bonds,
2011 Series A (Culver City Redevelopment Project)" (the "Series 2011A Bonds"), limited in
A-1
10634-000311327253v3.doc
ZD aggregate initial principal amount to $ , issued under the provisions of the
Community Redevelopment Law of the State of California, as supplemented and amended (the
"Law"), and pursuant to the provisions of an Indenture, dated as of October 1, 1999 (the "Master
Indenture"), as amended and supplemented by a First Supplemental Indenture, dated as of April
1, 2002, a Second Supplemental Indenture, dated as of April 1, 2004, a Third Supplemental
Indenture, dated as of November 1, 2005, a Fourth Supplemental Indenture, dated as of June 11,
2007, and a Fifth Supplemental Indenture, dated as of March 1, 2011 (the Master Indenture, as so
amended and supplemented, and as the same may be further amended and supplemented from
time to time in accordance with the terms thereof, the "Indenture"), by and between the Agency
and the Trustee. All Series 2011A Bonds are equally and ratably secured in accordance with the
terms and conditions of the Indenture. Reference is hereby made to the Indenture and to the Law
for (i) a description of the terms on which the Series 2011A Bonds are issued, (ii) the provisions
with regard to the nature and extent of the security provided for the Series 2011A Bonds and of
the nature, extent and manner of enforcement of such security, and (iii) a statement of the rights
of the registered owners of the Series 2011A Bonds. All the terms of the Indenture and the Law
are hereby incorporated herein and constitute a contract between the Agency and the Owner from
time to time of this Series 2011A Bond. By acceptance of hereof, the Owner of this Series
2011A Bond consents and agrees to all the provisions of the Indenture and the Law. Each
Owner hereof shall have recourse to all the provisions of the Law and the Indenture and shall be
bound by all the terms and conditions thereof.
The Series 2011A Bonds are issued to provide funds to aid in the financing of costs of the
Culver City Redevelopment Project, a duly adopted redevelopment project in Culver City,
California, as more particularly described in the Indenture. The Series 2011A Bonds are special
obligations of the Agency and are payable, as to interest thereon, principal thereof and any
premiums upon the redemption thereof, exclusively from the Tax Revenues (as that term is
defined in the Indenture) and certain other funds, and the Agency is not obligated to pay them
except from the Tax Revenues and such other funds. The Series 2011A Bonds and all other
Bonds (defined below) issued under the Indenture are equally secured by a pledge of, and charge
and lien upon, the Tax Revenues. The Tax Revenues constitute a trust fund for the security and
payment of the interest on and principal of and redemption premiums, if any, on the Series
2011A Bonds. The Series 2011A Bonds rank on a parity with the Agency's Tax Allocation
Bonds, 1999 Series A (Culver City Redevelopment Project) (the "Series 1999 Bonds"), the Tax
Allocation Bonds, 2002 Series A (Culver City Redevelopment Project) (the "Series 2002
Bonds"), Tax Allocation Refunding Bonds, 2004 Series A (Culver City Redevelopment Project)
(the "Series 2004 Bonds"), Tax Allocation Refunding Bonds, 2005 Series A (Culver City
Redevelopment Project) (the "Series 2005 Bonds"), and Taxable Tax Allocation Bonds, 2011
Series B (Culver City Redevelopment Project) (the "Series 2011B Bonds"), but are subordinate
to the Agency's obligations with respect to loans relating to certain outstanding bonds issued by
the Culver City Redevelopment Financing Authority in 1993, all as more particularly described
in the Indenture. Additional tax allocation bonds payable from the Tax Revenues may be issued
which will rank equally as to security with the Series 1999 Bonds, the Series 2002 Bonds, the
Series 2004 Bonds, the Series 2005 Bonds, the Series 2011A Bonds and the Series 2011B Bonds
but only subject to the terms and conditions set forth in the Indenture.
The Agency covenants and warrants that, for the payment of the interest on and principal
of and redemption premium, if any, on this Series 2011A Bond and all other Bonds issued under
A-2
10634-000311327253v3.doc the Indenture when due, there has been created and will be maintained by the Trustee a special
fund into which all Tax Revenues transferred to the Trustee pursuant to the Indenture shall be
deposited, and as an irrevocable charge the Agency has allocated the Tax Revenues to the
payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and
the Agency will pay promptly when due the interest on and principal of and redemption
premium, if any, on this Series 2011A Bond and all other Series 2011A Bonds of this issue, the
Series 1999 Bonds, the Series 2002 Bonds, the Series 2004 Bonds, the Series 2005 Bonds and
the Series 201113 Bonds and all additional tax allocation bonds authorized by the Indenture
(collectively, the "Bonds") out of said special fund, all in accordance with the terms and
provisions set forth in the Indenture.
The Series 2011A Bonds maturing on or before November 1, 20 are not subject to
optional redemption by the Agency. The Series 2011A Bonds maturing on or after November 1,
20 shall be subject to redemption as a whole, or in part among maturities as the Agency shall
designate and by lot within a maturity, in integral multiples of $5,000 of Final Compounded
Amount, on any date on or after November 1, 20 , at a redemption price equal to 11001 percent
of the Accreted Value of the called Series 2011A Bonds on the redemption date, without
premium.
As provided in the Indenture, notice of redemption of this Series 2011A Bond shall be
mailed by first class mail not less than 30 days before the redemption date to the registered
owner hereof (or with respect to notices to be received by DTC or its nominee, any Information
Services or Securities Depository, by such transmission method as acceptable to such entity), but
failure to receive such notice shall not affect the sufficiency of such proceedings for redemption.
If notice of redemption has been duly given as aforesaid and money for payment of the above-
described redemption price is held by the Trustee, then such Series 2011A Bonds shall, on the
redemption date designated in such notice, become due and payable at the above-described
redemption price; and from and after the date so designated interest on the Series 2011A Bonds
so called for redemption shall ,cease•to accrue and registered owners of such Series 2011A Bonds
shall have no rights in respect thereof except to receive payment of such redemption price
thereof.
-
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds
may be declared due and payable upon the conditions, in the manner and with the effect provided
in the Indenture; except that the Indenture provides that in certain events such declaration and its
consequences may be rescinded by the Owners of at least a majority in aggregate principal
amount of the Bonds then outstanding.
The Owner of any Series 2011A Bond or Series 2011A Bonds may surrender the same at
the Trust Office in exchange for an equal aggregate principal amount of fully registered Series
2011A Bonds of any other authorized denominations, in the manner, subject to the conditions
and upon the payment of the charges provided in the Indenture.
This Series 2011A Bond is transferable, as provided in the Indenture, only upon a register
to be kept for that purpose at the Trust Office by the Owner hereof in person, or by such
registered owner's duly authorized attorney, upon surrender of this Series 2011A Bond together
with a written instrument of transfer satisfactory to the Trustee duly executed by the Owner or
A-3
10634-000311327253v1doc
21 such Owner's duly authorized attorney, and thereupon a new fully registered Series 2011A Bond
or Series 2011A Bonds, in the same aggregate principal amount, shall be issued to the transferee
in exchange therefor as provided in the Indenture, and upon payment of the charges therein
prescribed. The Agency and the Trustee may deem and treat the person in whose name this
Series 2011A Bond is registered as the absolute owner hereof for the purpose of receiving
payment of, or on account of, the interest hereon and principal hereof and redemption premium,
if any, hereon and for all other purposes. The Trustee shall not be required to register the
transfer or exchange of any Series 2011A Bond during the period in which the Trustee is
selecting Series 2011A Bonds for redemption or any Series 2011A Bond selected for
redemption.
The rights and obligations of the Agency and of the registered owners of the Bonds may
be amended at any time in the manner, to the ) extent and upon the terms provided in the
Indenture, but no such amendment shall (1) extend the maturity of this Series 2011A Bond, or
reduce the interest rate hereon, or otherwise alter or impair the obligation of the Agency to pay
the interest hereon or principal hereof or any premium payable on the redemption hereof at the
time and place and at the rate and in the currency provided herein, without the express written
consent of the Owner of this Series 2011A Bond, or (2) permit the creation by the Agency of any
mortgage, pledge or lien upon the Tax Revenues superior to or on a parity with the pledge and
lien created in the Indenture for the benefit of the Bonds authorized by the Indenture, or (3)
reduce the percentage of Bonds required for the written consent to an amendment of the
Indenture, or (4) modify any rights or obligations of the Trustee without its prior written assent
thereto; all as more fully set forth in the Indenture.
This Series 2011A Bond is not a debt of the City of Culver City, the State of California or
any of its political subdivisions, and neither said City, said State nor any of its political
subdivisions is liable hereon, nor in any event shall this Series 2011A Bond or any interest
hereon or any redemption premium hereon be payable out of any funds or properties other than
those of the Agency. The Bonds do not constitute an- indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction, and neither the members of the Agency
nor any persons executing the Bonds shall be personally liable on the Bonds by reason of their
issuance.
This Series 2011A Bond shall not be entitled to any benefits under the Indenture or
become valid or obligatory for any purpose until the certificate of authentication and registration
hereon endorsed shall have been manually signed by the Trustee.
It is hereby certified that all of the acts, conditions and things required to exist, to have
happened or to have been performed precedent to and in the issuance of this Series 2011A Bond
do exist, have happened and have been performed in due time, form and manner as required by
law and that the amount of this Series 2011A Bond, together with all other indebtedness of the
Agency, does not exceed any limit prescribed by the Constitution or laws of the State of
California, and is not in excess of the amount of Bonds permitted to be issued under the
Indenture.
IN WITNESS WHEREOF, the Culver City Redevelopment Agency has caused this
Series 2011A Bond to be executed in its name and on its behalf by its Chairman and attested by
A-4
10634-000311327253v3.doc
23 its Secretary, and has caused its seal to be reproduced hereon, all as of the Dated Date first
written above.
CULVER CITY REDEVELOPMENT
AGENCY
By:
Chairman
(Seal)
Attest:
Secretary
A-5
10634-0003 1327253 v3.doc [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Series 2011A Bonds described in the within-mentioned Indenture.
Date:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
Authorized Signatory
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto
whose tax identification number is , the within-mentioned registered Bond and
hereby irrevocably constitute(s) and appoint(s)
attorney to transfer the same on the books of the Trustee with full power of substitution in the
premises.
Dated:
Signature guaranteed:
NOTE: The signature(s) on this Assignment must
con-espond with the name(s) as written on the face
of the within Bond in every particular without
alteration or enlargement or any change whatsoever.
NOTICE: Signature must be guaranteed by a member of an institution which is a participant
in the Securities Transfer Agent Medallion Program (STAMP) or other similar program.
A-6
10634-000311327253v3.d0c
25 APPENDIX B
[Form of Series 2011B Bond]
[Unless this certificate is presented by an authorized representative of the Depository Trust
Company, a New York Corporation ("DTC"), to the Culver Redevelopment Agency or its agent
for registration of transfer, exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is reqUested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), any transfer, pledge, or other use hereof for value or
otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.]
No. R-
CULVER CITY REDEVELOPMENT AGENCY
TAXABLE TAX ALLOCATION BOND, 2011 SERIES B
(CULVER CITY REDEVELOPMENT PROJECT)
RATE OF
INTEREST
CUSIP : MATURITY DATE ORIGINAL
ISSUE DATE:
November 1,20 ,2011
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
The Culver City Redevelopment Agency, a public body, corporate and politic, duly
organized and existing under and pursuant to the laws of the State of California (the "Agency"),
for value received hereby promises to pay to the registered owner specified above, or registered
assigns, on the Maturity Date specified above the Principal Amount specified above, together
with interest thereon from the interest payment date next preceding the date of authentication of
this Series 2011B Bond (unless (i) this Series 2011B Bond is authenticated during the period
from the 16th day of the month next preceding an interest payment date to and including such
interest payment date, in which event it shall bear interest from such interest payment date, or (ii)
this Series 2011B Bond is authenticated on or before the 15th day of the month next preceding
the first interest payment date, in which event it shall bear interest from the Original Issue Date
shown above) until the principal hereof shall have been paid, at the Rate of Interest specified
above, payable on [November] 1, 2011, and semiannually thereafter on May 1 and November 1
in each year. Both the interest hereon arid principal hereof are payable in lawful money of the
United States of America. The principal (or redemption price) hereof is payable upon surrender
hereof at maturity or the earlier redemption hereof at the corporate trust office of U.S. Bank
National Association (the "Trustee") in St. Paul, Minnesota, or at such other office as the Trustee
may designate (the "Trust Office"). Interest hereon is payable by check mailed on each interest
payment date by first class mail to the person in whose name this Series 2011B Bond is
registered at the close of business on the 15th day of the month next preceding the applicable
interest payment date at such person's address as it appears on the registration books of the
Trustee, or upon written request received by the Trustee prior to the 15th day of the month
B-1
10634-000311327253v3.doe
2C? preceding an interest payment date of a registered owner (an "Owner") of at least $1,000,000 in
aggregate principal amount of outstanding Series 2011B Bonds, by transfer in immediately
available funds to an account within the continental United States designated by such Owner.
This Series 2011B Bond is one of a duly authorized issue of bond of the Agency
designated "Culver City Redevelopment Agency Taxable Tax Allocation Bonds, 2011 Series B
(Culver City Redevelopment Project)" (the "Series- 2011B Bonds"), limited in aggregate
principal amount to $ , issued under the provisions of the Community
Redevelopment Law of the State of California, as supplemented and amended (the "Law"), and
pursuant to the provisions of an Indenture, dated as of October 1, 1999 (the "Master Indenture"),
as amended and supplemented by a First Supplemental Indenture, dated as of April 1, 2002, a
Second Supplemental Indenture, dated as of April .1, 2004, a Third Supplemental Indenture,
dated as of November 1, 2005, a Fourth Supplemental Indenture, dated as of June 11, 2007, and
a Fifth Supplemental Indenture, dated as of March 1, 2011 (the Master Indenture, as so amended
and supplemented, and as the same may be further amended and supplemented from time to time
in accordance with the terms thereof, the "Indenture"), by and between the Agency and the
Trustee. All Series 2011B Bonds are equally and ratably secured in accordance with the terms
and conditions of the Indenture. Reference is hereby made to the Indenture and to the Law for
(i) a description of the terms on which the Series 2011B Bonds are issued, (ii) the provisions
with regard to the nature and extent of the security provided for the Series 2011B Bonds and of
the nature, extent and manner of enforcement of such security, and (iii) a statement of the rights
of the registered owners of the Series 2011B Bonds. All the terms of the Indenture and the Law
are hereby incorporated herein and constitute a contract between the Agency and the Owner from
time to time of this Series 2011B Bond. By acceptance of hereof, the Owner of this Series
2011B Bond consents and agrees to all the provisions of the Indenture and the Law. Each Owner
hereof shall have recourse to all the provisions of the Law and the Indenture and shall be bound
by all the terms and conditions thereof.
The Series 2011B Bonds are issued to provide funds to aid in the financing of costs of the
Culver City Redevelopment Project, a duly adopted redevelopment project in Culver City,
California, as more particularly described in the Indenture. The Series 201113 Bonds are special
obligations of the Agency and are payable, as to interest thereon, principal thereof and any
premiums upon the redemption thereof, exclusively from the Tax Revenues (as that teiui is
defined in the Indenture) and certain other funds, and the Agency is not obligated to pay them
except from the Tax Revenues and such other funds. The Series 2011B Bonds and all other
Bonds (defined below) issued under the Indenture are equally secured by a pledge of, and charge
and lien upon, the Tax Revenues. The Tax Revenues constitute a trust fund for the security and
payment of the interest on and principal of and redemption premiums, if any, on the Series
2011B Bonds. The Series 2011B Bonds rank on a parity with the Agency's Tax Allocation
Bonds, 1999 Series A (Culver City Redevelopment Project) (the "Series 1999 Bonds"), the Tax
Allocation Bonds, 2002 Series A (Culver City Redevelopment Project) (the "Series 2002
Bonds"), Tax Allocation Refunding Bonds, 2004 Series A (Culver City Redevelopment Project)
(the "Series 2004 Bonds"), Tax Allocation Refunding Bonds, 2005 Series A (Culver City
Redevelopment Project) (the "Series 2005 Bonds") and Tax Allocation Capital Appreciation
Bonds, 2011 Series A (Culver City Redevelopment Project) (the "Series 2011B Bonds"), but are
subordinate to the Agency's obligations with respect to loans relating to certain outstanding
bonds issued by the Culver City Redevelopment Financing Authority in 1993, all as more
D-2
10634-000311327253v3.doc
2:1 particularly described in the Indenture. Additional tax allocation bonds payable from the Tax
Revenues may be issued which will rank equally as to security with the Series 1999 Bonds, the
Series 2002 Bonds, the Series 2004 Bonds, the Series 2005 Bonds, the Series 2011A Bonds and
Series 2011B Bonds but only subject to the terms and cemditions set forth in the Indenture.
The Agency covenants and warrants that, for the payment of the interest on and principal
of and redemption premium, if any, on this Series 2011B Bond and all other Bonds issued under
the Indenture when due, there has been created and will be maintained by the Trustee a special
fund into which all Tax Revenues transferred to the Trustee pursuant to the Indenture shall be
deposited, and as an irrevocable charge the Agency has allocated the Tax Revenues to the
payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and
the Agency will pay promptly when due the interest on and principal of and redemption
premium, if any, on this Series 2011B Bond and all other Series 2011B Bonds of this issue, the
Series 1999 Bonds, the Series 2002 Bonds, the Series .2004 Bonds, the Series 2005 Bonds and
the Series 2011A Bonds and all additional tax allocation bonds authorized by the Indenture
(collectively, the "Bonds") out of said special fund, all in accordance with the terms and
provisions set forth in the Indenture.
The Series 2011B Bonds maturing on or before November 1, 20 are not subject tO
optional redemption by the Agency. The Series 2011B Bonds maturing on or after November 1,
20 shall be subject to redemption as a whole or in part, by such maturities as the Agency shall
designate, prior to their respective maturities at the option of the Agency on any date on or after
November 1, 20 , from funds derived by the Agency from any source, at a redemption price
equal to [100] percent of the principal amount of Series 2011B Bonds called for redemption,
together with interest accrued thereon to the redemption date.
The Series 2011B Bonds maturing on November 1, 20 and November 1, 20 shall be
subject to mandatory sinking fund redemption by lot, at a redemption price equal to the principal
amount thereof to be redeemed, without premium, on November 1 of each year commencing
November 1, 20 and November 1, 20 , respectively, in the aggregate respective principal
amounts set forth in the Indenture.
As provided in the Indenture, notice of redemption of this Series 2011B Bond shall be
mailed by first class mail not less than 30 days before the redemption date to the registered
owner hereof (or with respect to notices to be received by DTC or its nominee, any Information
Services or Securities Depository, by such transmission method as acceptable to such entity), but
failure to receive such notice shall not affect the sufficiency of such proceedings for redemption.
If notice of redemption has been duly given as aforesaid and money for payment of the above-
described redemption price is held by the Trustee, then such Series 2011B Bonds shall, on the
redemption date designated in such notice, become due and payable at the above-described
redemption price; and from and after the date so designated interest on the Series 2011B Bonds
so called for redemption shall cease to accrue and registered owners of such Series 2011B Bonds
shall have no rights in respect thereof except to receive payment of such redemption price
thereof.
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds
may be declared due and payable upon the conditions, in the manner and with the effect provided
D-3
10634-000311327253v3.doc
9.2 in the Indenture; except that the Indenture provides that in certain events such declaration and its
consequences may be rescinded by the Owners of at least a majority in aggregate principal
amount of the Bonds then outstanding.
The Owner of any Series 2011B Bond or Series 2011B Bonds may surrender the same at
the Trust Office in exchange for an equal aggregate principal amount of fully registered Series
2011B Bonds of any other authorized denominations, in the manner, subject to the conditions
and upon the payment of the charges provided in the Indenture.
This Series 2011B Bond is transferable, as provided in the Indenture, only upon a register
to be kept for that purpose at the Trust Office by the Owner hereof in person, or by such
registered owner's duly authorized attorney, upon surrender of this Series 2011B Bond together
with a written instrument of transfer satisfactory to the Trustee duly executed by the Owner or
such Owner's duly authorized attorney, and thereupon a new fully registered Series 2011B Bond
or Series 2011B Bonds, in the same aggregate principal amount, shall be issued to the transferee
in exchange therefor as provided in the Indenture, and upon payment of the charges therein
prescribed. The Agency and the Trustee may deem and treat the person in whose name this
Series 2011B Bond is registered as the absolute owner hereof for the purpose of receiving
payment of, or on account of, the interest hereon and principal hereof and redemption premium,
if any, hereon and for all other purposes. The Trustee shall not be required to register the
transfer or exchange of any Series 2011B Bond during the period in which the Trustee is
selecting Series 2011B Bonds for redemption or any Series 2011B Bond selected for redemption.
The rights and obligations of the Agency and of the registered owners of the Bonds may
be amended at any time in the manner, to the extent and upon the terms provided in the
Indenture, but no such amendment shall (1) extend the maturity of this Series 2011B Bond, or
reduce the interest rate hereon, or otherwise alter or impair the obligation of the Agency to pay
the interest hereon or principal hereof or any premium payable on the redemption hereof at the
time and place and at the rate and in the currency provided herein, without the express written
consent of the Owner of this Series 2011B Bond, or (2) permit the creation by the Agency of any
mortgage, pledge or lien upon the Tax Revenues superior to or on a parity with the pledge and
lien created in the Indenture for the benefit of the Bonds authorized by the Indenture, or (3)
reduce the percentage of Bonds required for the written consent to an amendment of the
Indenture, or (4) modify any rights or obligations of the Trustee without its prior written assent
thereto; all as more fully set forth in the Indenture.
This Series 2011B Bond is not a debt of the City of Culver City, the State of California or
any of its political subdivisions, and neither said City, said State nor any of its political
subdivisions is liable hereon, nor in any event shall this Series 2011B Bond or any interest
hereon or any redemption premium hereon be payable out of any funds or properties other than
those of the Agency. The Bonds do not constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction; and neither the members of the Agency
nor any persons executing the Bonds shall be personally liable on the Bonds by reason of their
issuance.
D-4
10634-000311327253v3,doc
2.12 This Series 201113 Bond shall not be entitled to any benefits under the Indenture or
become valid or obligatory for any purpose until the certificate of authentication and registration
hereon endorsed shall have been manually signed by the Trustee.
It is hereby certified that all of the acts, conditions and things required to exist, to have
happened or to have been performed precedent to and in the issuance of this Series 2011B Bond
do exist, have happened and have been performed in due time, form and manner as required by
law and that the amount of this Series 2011B Bond, together with all other indebtedness of the
Agency, does not exceed any limit prescribed by the Constitution or laws of the State of
California, and is not in excess of the amount of Bonds permitted to be issued under the
Indenture.
IN WITNESS WHEREOF, the Culver City Redevelopment Agency has caused this
Series 2011B Bond to be executed in its name and on its behalf by its Chairman and attested by
its Secretary, and has caused its seal to be reproduced hereon, all as of the Dated Date first
written above.
CULVEICCITY REDEVELOPMENT
AGENCY
By:
Chairman
(Seal)
Attest:
Secretary
D-5
10634-000311327253v3.cloc [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Series 2011B Bonds described in the within-mentioned Indenture.
Date:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
Authorized Signatory
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto
whose tax identification number is • the within-mentioned registered Bond and
hereby irrevocably constitute(s) and appoint(s)
attorney to transfer the same on the books of the Trustee with full power of substitution in the
premises. •
Dated:
Signature guaranteed:
NOTE: The signature(s) on this Assignment must
correspond with the name(s) as written on the face
of the within Bond in every particular without
alteration or enlargement or any change whatsoever.
NOTICE: Signature must be guaranteed by a member of an institution which is a participant
in the Securities Transfer Agent Medallion Program (STAMP) or other similar program.
D-6
10634-0003 11327253 v3.doc
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Ratings:
Attachment 5 Standard & Poor's: " "
(See "CONCLUDING INFORMATION - Ratings")
In the opinion of Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, Bond Counsel, under existing law (i)
assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the 2011 Series A Bonds is
excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum
tax imposed on individuals and corporations. Interest on the 2011 Series A Bonds may be subject to certain federal taxes imposed only on
certain corporations, including the corporate alternative minimum tax on a portion of that interest. It is not the intent of the Agency that interest
on the 2011 Series B Bonds be exempt for federal income .tax purposes and Bond Counsel expresses no opinion on whether such interest is
excluded from gross income of the owners of the 2011 Series B Bonds. In the further opinion of Bond Counsel, interest on the 2011 Series A
Bonds and 2011 Series B Bonds is exempt from personal income taxation by the State of California. For a more complete discussion of the tax
aspects, see "CONCLUDING INFORMATION— Tax Matters" herein.
•
S[Series B principal amount]*
CULVER CITY REDEVELOPMENT AGENCY
Taxable Tax Allocation Bonds, 2011 Series B
(Culver City Redevelopment Project)
Due: November 1, as shown on the inside front cover
This cover page contains certain information for quick reference only. It is not intended to be a summary of all factors relating to an investment
in the 2011 Bonds. Investors should review the entire Official Statement before making any investment decision. Attention is hereby directed to
certain riskfactors more fully described herein.
The Culver City Redevelopment Agency (the "Agency") is issuing the above-captioned bonds (the "2011 Series A Bonds" and the "2011 Series
B Bonds," and collectively, the "2011 Bonds") pursuant to an Indenture, dated as of October 1, 1999, as amended by a First Supplemental
Indenture, dated as of April 1, 2002, a Second Supplemental Indenture, dated as of April 1, 2004, a Third Supplemental Indenture, dated as of
November 1, 2005, a Fourth Supplemental Indenture, dated as of June 11, 2007, and a Fifth Supplemental Indenture, dated as of March 1, 2011
(collectively, the "Indenture") between the Agency and U.S. Bank National Association, as trustee (the "Trustee"). Proceeds of the 2011 Bonds
will be used to (i) finance certain redevelopment activities of the Agency within the Culver City Redevelopment Project (the "Project Area"), (ii)
provide for a debt service reserve for the 2011 Bonds, and (iii) pay the costs of issuing the 2011 Bonds. See "FINANCING PLAN."
The 2011 Series A Bonds will be issued as Capital Appreciation Bonds ("Capital Appreciation Bonds"), the interest on which is compounded
semiannually on May 1 and November 1 of each year (each an "Interest Payment Date") until the maturity date or earlier redemption thereof.
The 2011 Series B Bonds will be issued as Current Interest Bonds ("Current Interest Bonds"), the interest on which is payable semianually on
each Interest Payment Date, commencing November 1, 2011. The Capital Appreciation Bonds will be issued in denominatimis of Initial
Principal Amount and will reflect denominations of $5,000 Final Compounded Amount or any integral multiple thereof. The 2011 Series B
Bonds will be issued in denominations of $5,000 or any integral multiple thereof. The 2011 Bonds will be delivered as fully registered bonds,
registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to
ultimate purchasers ("Beneficial Owners"), under the book-entry system maintained by DTC. Beneficial Owners will not be entitled to receive
delivery of certificates representing their ownership interest in the Bonds. The principal of, premium if any, and semiannual interest on the 2011
Bonds will be payable by the Trustee to DTC for subsequent disbursement to DTC Participants, so long as DTC or its nominee remains the
registered owner of the Bonds. See "THE 2011 BONDS — Description" and "APPENDIX 0— Book Entry-Only System."
The 2011 Series A Bonds are subject to optional redemption. The 2011 Series A Bonds are not subject to mandatory redemption. The
- 2011 Series B Bonds are subject to optional redemption and mandatory redemption. See "THE 2011 BONDS — Redemption."
The 2011 Bonds are secured by and payable from "Tax Revenues." Tax Revenues generally consist of tax increment revenues to be derived from
the Agency's Project Area and amounts on deposit in certain funds and accounts established pursuant to the Indenture, less (i) amounts needed to
make loan payments on certain outstanding senior loans of the Agency, (ii) unsubordinated pass-through obligations, and (iii) amounts to be
deposited in the Low and Moderate Income Housing Fund. See "SECURITY FOR THE 2011 BONDS." The receipt of Tax Revenues is subject
to certain risks and limitations. See "RISK FACTORS" and "LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING
LIMITATIONS."
THE 2011 BONDS ARE NOT A DEBT OF THE CITY OF CULVER CITY (THE "CITY"), THE STATE OF CALIFORNIA, OR ANY
OF THEIR POLITICAL SUBDIVISIONS OTHER THAN THE AGENCY, AND NEITHER THE CITY, THE STATE NOR ANY OF
THEIR POLITICAL SUBDIVISIONS, OTHER THAN THE AGENCY, IS LIABLE THEREFOR. THE PRINCIPAL OF, PREMIUM,
IF ANY, AND INTEREST ON THE 2011 BONDS ARE PAYABLE SOLELY FROM TAX REVENUES ALLOCATED TO THE
AGENCY FROM THE PROJECT AREA AND AMOUNTS IN CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE
INDENTURE. NEITHER THE OFFICERS OF THE AGENCY OR THE CITY, NOR ANY PERSONS EXECUTING THE 2011
BONDS, ARE LIABLE PERSONALLY ON THE 2011 BONDS BY REASON OF THEIR ISSUANCE.
MATURITY SCHEDULE
(See inside front cover)
The 2011 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to legality by Richards, Watson &
Gershon, A Professional Corporation, Los Angeles, California, Bond Counsel, and subject to certain other conditions. Richards, Watson &
Gershon, A Professional Corporation, Los Angeles, California, is also serving as Disclosure Counsel to the Agency. Certain legal matters will be
passed on for the Agency by Kane Ballmer & Berkman, Los Angeles, California. Certain legal matters will be passed on for the Underwriter by
Jones Hall, A Professional Law Corporation, San Francisco, California. It is anticipated that the 2011 Bonds, in book-entry fonn, will be
available for delivery to DTC in New York, New York on or about March , 2011.
Stone 8z Youngberg
Dated: February , 2011
New Issue - Full Book Entry
S[Series A principal amount]"
CULVER CITY REDEVELOPMENT AGENCY
Tax Allocation Bonds, 2011 Series A
(Culver City Redevelopment Project)
Dated: Date of Delivery
Preliminary, subject to change.
RWG Draft 2/13/11
1,-- MATURITY SCHEDULE *
S[Series A principal amount]*
CULVER CITY REDEVELOPMENT AGENCY
Tax Allocation Bonds, 2011 Series A
(Culver City Redevelopment Project)
Capital Appreciation Bonds
Maturity Date Initial Yield to Final CU SIPt
(November 1) Principal Maturity Compounded (Base: )
Amount Amount
$1Series B principal amount]*
CULVER CITY REDEVELOPMENT AGENCY
Taxable Tax Allocation Bonds, 2011 Series B
(Culver City Redevelopment Project)
Current Interest Bonds
Maturity Date Principal CUSTPt
(November 1) Amount Interest Rate Price (Base:
% Term Bond due November 1, 20 Price: % CUS1P:t
Preliminary; subject to change.
t Copyright 2011, American Bankers Association. CUSIP data herein are provided by Standard & Poor's CUSIP Service Bureau, a
division of The McGraw-Hill Companies, Inc., and are provided for convenience of reference only. Neither the Agency nor the
Underwriter assumes any responsibility for the accuracy of these CUSIP data. CULVER CITY REDEVELOPMENT AGENCY
CITY COUNCIL /AGENCY MEMBERS
• Christopher Annenta, Mayor, Agency Member
Micheal O'Leary, Vice-Mayor, Agency Chair
D. Scott Malsin, Council Member, Agency Vice Chair
Andrew Weissman, Council Member, Agency Member
Jeffrey Cooper, Council Member, Agency Member
SPECIAL SERVICES
Bond Counsel
Richards, Watson & Gershon,
A Professional Corporation
Los Angeles, California
Agency Counsel
Kane Bailin& & Berkman
Los Angeles, California
Fiscal Consultant
Keyser Marston Associates, Inc.
Los Angeles, California
Financial Advisor
Fieldman, Rolapp & Associates
Irvine, California
Trustee
U.S. Bank National Association
Los Angeles, California No dealer, broker, salesperson or other person has been authorized by the Agency to give any
information or to make any representations other than those contained herein. If given or made, such
other information or representations must not be relied upon as having been authorized by any of the
foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy
any of the Bonds by any person in any jurisdiction in which such offer of solicitation is not authorized or
in which the person making such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be
construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement
which involve estimates, forecasts or matter of opinion, whether or not expressly so described herein, are
intended solely as such and are not to be construed as a representation of fact.
Certain statements included or incorporated by reference in this Official Statement constitute
"forward-looking statements." Such statements are generally identifiable by the terminology used such as
"plan," "expect," "estimate," "budget," or other similar words and include, but are not limited to,
statements under the caption "TAX REVENUES." The achievement of certain results or other
expectations contained in such forward-looking statements involves known and unknown risks,
uncertainties and other factors which may cause actual results, performance or achievements described to
be materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements. While the Agency has agreed to provide certain on-going financial and
other data for a limited period of time the Agency does not plan to issue any updates or revisions to those
forward-looking statements if or when the expectations or events, conditions or circumstances on which
such statements are based change.
The information set forth herein has been obtained from the Agency and other sources that the
Agency believes are reliable, but it is not guaranteed as to its accuracy or completeness. The information
and expressions of opinions herein are subject to change without notice, and neither delivery of this
Official Statement nor any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Agency since the date hereof. All summaries of the
resolutions, the Indenture, laws and statutes or other documents are made subject to the provisions of such
documents, respectively, and do not purport to be complete statements of any or all of such provisions.
The Underwriter has reviewed the information in this Official Statement in accordance with, and
as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and
circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of
such information.
This Official Statement is submitted in connection with the sale of the Bonds referred to herein
and may not be reproduced or used, in whole or in part, for any other purpose.
The Bonds have not been registered under the Securities Act of 1933, as amended, nor has the
Indenture been qualified under the Trust Agreement Act of 1939, as amended, in reliance upon an
exception from the registration requirements contained in such acts. The Bonds have not been registered
or qualified under the securities laws of any state.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IT COMMENCED, MAY
BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL BONDS TO
CERTAIN DEALERS AND OTHERS AT A PRICE LOWER THAN THE OFFERING PRICE. THE
OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE ORIGINAL
PURCHASERS.
1S [REGIONAL LOCATION MAP] TABLE OF CONTENTS
Page
INTRODUCTION 1
FINANCING PLAN 3
The Project 3
Estimated Sources and Uses of Funds 4
THE 2011 BONDS 4
Authority for Issuance 4
Description 4
Redemption 6
Transfer and Exchange 7
Debt Service Schedules 7
SECURITY FOR THE 2011 BONDS 9
Tax Allocation Financing 9
Allocation of Taxes 9
Tax Revenues; Flow of Funds 10
Reserve Account 12
Issuance of Additional Bonds 13
THE AGENCY 13
Agency Existence and Personnel 13
Agency Powers and Duties 14
Agency Financial Statements 15
Outstanding Agency Debt 15
Agency Investment Policy 16
Agency Pension Obligation 17
THE CULVER CITY REDEVELOPMENT
PROJECT 17
General 17
Redevelopment Plan Limitations 17
Land Use 19
Major Taxable Property Owners 20
Existing Land Ownership, Land Use and
Current Development 22
Statutory Pass Through Requirements 22
Tax Sharing Agreement 23
Low and Moderate Income Housing 23
TAX REVENUES 24
Historic Assessed Value and Tax Revenues 24
Appeals of Assessed Values 26
Page
Projected Tax Revenues 29
Estimated Debt Service Coverage 33
RISK FACTORS 35
Reduction in Taxable Value 35
Reduction in Inflationary Rate 35
Future Limits on Receiving Tax Increment 35
Levy and Collection 36
Risks Associated With Additional Bonds 36
Bankruptcy Risks 36
State Budget Issues 37
Seismic Factors 40
Hazardous Substances 40
Secondary Market 40
Loss of Tax Exemption 41
LIMITATIONS ON TAX REVENUES AND
POSSIBLE SPENDING LIMITATIONS 41
Property Tax Limitations - Article XIIIA 41
Challenges to Article XHIA 41
Implementing Legislation 42
Property Tax Collection Procedures 42
Unitary Property 43
Appropriations Limitations — Article XHIB 44
Exclusion of Tax Revenues for General
Obligation Bonds Debt Service 44
Senate Bill 1045; Senate Bill 1096 44
Proposition 21 44
Future Initiatives 45
CONCLUDING INFORMATION 45
Litigation 45
Ratings 45
Tax Matter 43
Continuing Disclosure 47
Underwriting 48
Professionals Involved in the Offering 48
EXECUTION 48
APPENDIX A -
APPENDIX B -
APPENDIX C -
APPENDIX D -
APPENDIX E -
APPENDIX F -
APPENDIX G -
APPENDIX H -
APPENDIX I -
Summary of Certain Provisions of the Indenture A-1
Property Ownership in the Project Area B-1
Culver City General Information C-1
Audited Financial Statements of the Agency for Fiscal Year Ended June 30, 2010 D-1
Form of Bond Counsel Opinions E-1
Form of Continuing Disclosure Agreement F-1
Book Entry-Only System G-1
Fiscal Consultant Report H-1
Accreted Values Table I-1 S[Series A principal amount]*
CULVER CITY REDEVELOPMENT AGENCY
Tax Allocation Bonds, 2011 Series A
(Culver City Redevelopment Project)
$[Series B principal amount]*
ClULVER CITY REDEVELOPMENT AGENCY
Taxable Tax Allocation Bonds, 2011 Series B
(Culver City Redevelopment Project)
INTRODUCTION
This Official Statement, including the cover page, inside cover page, and appendices, is provided
to furnish information in connection with the sale by the Culver City Redevelopment Agency (the
"Agency") of $[Series A principal amount] aggregate principal amount of Tax Allocation Bonds, 2011
Series A (Culver City Redevelopment Project) (the "Series A Bonds") and $[Series B principal
amount]*
aggregate principal amount of Taxable Tax Allocation Bonds, 2011 Series B (Culver City Redevelopment
Project) (the "Series B Bonds" and together with the Series A Bonds, the "2011 Bonds"). This
Introduction contains a brief summary of certain information contained in this Official Statement. It is
not intended to be complete and is qualified by the more detailed information contained elsewhere in this
Official Statement. Defmitions of certain terms used in this Official Statement are set forth in
"APPENDIX A — Summary of Certain Provisions of the Indenture."
The City. The City of Culver City, California (the "City"), is located on the western portion of
Los Angeles County (the "County"), approximately five miles north of Los Angeles International Airport
and five miles east of the Marina del Rey small craft harbor and the Pacific Ocean. The City was
incorporated as a general law city in 1917 and became a charter ,city in 1947. For certain information
regarding the City, see "APPENDIX C - Culver City General Information."
The Agency. The Agency is a redevelopment agency existing under the Community
Redevelopment Law of the State of California (the "State"), constituting Part 1 of Division 24
(commencing with Section 33000) of the California Health and Safety Code, as amended (the
"Redevelopment Law"). The Agency was activated on February 8, 1971 by an ordinance of the City
Council, at which time the City Council declared itself to be the governing board of the Agency. See
"THE AGENCY."
The Project Area. The Culver City Redevelopment Project (the "Project Area") was initially
fornaed by the merger of the following three former project areas (each, a "Component Area") of the
Agency:
Former Project Area
Slauson-Sepulveda Redevelopment Project Area No. 1
Overland-Jefferson Redevelopment Project Area No. 2
Washington-Culver Redevelopment Project Area No. 3
Component
"Component Area No. 1"
"Component Area No. 2"
"Component Area No. 3"
Under Ordinance No. 98-014 adopted by the City Council on November 23, 1998, each of the
currently existing redevelopment plans for the Component Areas (each, a "Redevelopment Plan") were
amended to provide, among other things, for the merging of the Component Areas into the Project Area.
In addition, pursuant to Ordinance No. 98-015, adopted by the City Council on November 23, 1998, the
Agency added territory known as "Component Area No. 4" to the Project Area. The Project Area
includes 1,286 gross acres of land, representing residential, commercial, industrial and public land uses.
The Project Area is now the sole redevelopment project area of the Agency.
* Preliminary, subject to change.
1
'8 See "THE CULVER CITY REDEVELOPMENT PROJECT" for additional information on land
use and property ownership within the Project Area.
Financing Purpose. Proceeds of the 2011 Bonds will be used to: (i) to finance certain
redevelopment activities of the Agency within the Project Area; (ii) to fund a debt service reserve for the
2011 Bonds, which will equal the Reserve Account Requirement for the 2011 Bonds (as defined in the
Indenture); and (iii) pay the costs of issuing the 2011 Bonds. See "FINANCING PLAN."
Authority for Issuance. The 2011 Bonds are being issued under the Redevelopment Law. The
2011 Bonds will be issued pursunnt to and will be secured by the terms of an Indenture, dated as of
October 1, 1999, as amended by (i) a First Supplemental Indenture, dated as of April 1, 2002, (ii) a
Second Supplemental Indenture, dated as of April 1, 2004 and (iii) a Third Supplemental Indenture, dated
as of November 1, 2005 (iv) a Fourth Supplemental Indenture, dated as of June 11, 2007, and (v) a Fifth
Supplemental Indenture, dated as of March 1, 2011 (collectively, the "Indenture"), each by and between
the Agency and U.S. Bank National Association, Los Angeles, California, as trustee (the "Trustee"). See
"THE 2011 BONDS — Authority for Issuance."
Security for the 2011 Bonds. The 2011 Bonds are payable from and secured by Tax Revenues
(as defined below), generally consisting of a portion of the tax increment eligible for allocation to the
Agency pursuant to the Redevelopment Law from the Project Area.
, Tax Revenues do not include tax increment used by the Agency to make payments on two
outstanding loan agreements dated as of November 1, 1993 (the "Senior 1993 Loan Agreements")
between the Agency and the Culver City Redevelopment Financing Authority (the "Authority"):
(i) Project No. 1 Loan Agreement (Senior Lien) dated as of November 1, 1993, and
(ii) Project No. 2 Loan Agreement (Senior Lien) dated as of November 1, 1993.
Payments by the Agency to the Authority under the Senior 1993 Loan Agreements are used by
the Authority to pay debt service on its outstanding 1993 Tax Allocation Refunding Revenue Bonds (the
"Senior 1993 Bonds") until their maturity on November 1, 2014.
Tax Revenues also do not include tax increment that the Agency is obligated by the
Redevelopment Law to pass through to other taxing entities. See "THE CULVER CITY
REDEVELOPMENT PROJECT — Statutory Pass Through Requirements".
Outstanding Senior and Parity Debt. The Agency has incurred the following outstanding senior
loans and parity or subordinate bonded indebtedness:
Senior 1993 Loan Agreements; Senior 1993 Bonds. As a result of the Agency's obligations under
the Senior 1993 Loan Agreements, the Senior 1993 Bonds are payable from tax increment generated in
the Project Area on a senior basis to the Parity Bonds (each as defined below) and the 2011 Bonds. As a
result of a partial refunding of the Senior 1993 Bonds in 2004, only one maturity of the Senior 1993
Bonds remains outstanding (maturing on November 1, 2014); as of November 2, 2010, the Senior 1993
Bonds will be outstanding in the principal amount of $19,800,000.
Parity Bonds. The 2011 Bonds are payable from and secured by Tax Revenues on parity with
four outstanding series of the Agency's Bonds:
2 (i)
Tax Allocation Bonds, 1999 Series A (Culver City Redevelopment Project) (the "Parity
1999 Series A Bonds"), outstanding in the principal amount of $21,385,000 as of
November 2, 2010 (with a final maturity date of November 1, 2025);
Tax Allocation Bonds, 2002 Series A (Culver City Redevelopment Project) (the "Parity
2002 Bonds"), outstanding in the principal amount of $19,650,000 as of November 2,
2010 (with a final maturity date of November 1, 2025);
(iii) Tax Allocation Refunding Bonds, 2004 Series A (Culver City Redevelopment Project)
(the "Parity 2004 Bonds"), outstanding in the principal amount of $66,035,000 as of
November 2, 2010 (with a final maturity date of November 1, 2023); and
(iv) Tax Allocation Refunding Bonds, 2005 Series A (Culver City Redevelopment Project)
(the "Parity 2005 Bonds," and together with the Parity 1999 Series A Bonds, the Parity
2002 Bonds, and the Parity 2004 Bonds, the "Parity Bonds"), outstanding in the principal
amount of $16,385,000 as of November 2, 2010 (with a final maturity date of November
1, 2023).
A portion of the debt service on the Senior 1993 Loan Agreements, the Parity 1999 Series A
Bonds, the Parity 2004 Bonds and the Parity 2005 Bonds is payable from the Low and Moderate Income
Housing Fund. See "THE CULVER CITY REDEVELOPMENT PROJECT - Low and Moderate hacome
Housing." See "THE AGENCY — Outstanding Agency Debt" for a description of these bonds as well as
subordinate debt of the Agency. The 2011 Bonds, the Parity Bonds and future "Additional Bonds"
(defined below) issued under the terms of the Indenture are collectively referred to in this Official
Statement as the "Bonds."
Additional Bonds. The Indenture permits the Agency to issue additional bonds payable from Tax
Revenues on a parity basis to the Bonds. See "SECURITY FOR THE 2011 BONDS — Issuance of
Additional Bonds."
Possible Risk Factors. Any future decrease in the taxable valuation in the Project Area or in the
applicable tax rates could reduce the Tax Revenues allocated to the Agency and correspondingly could
have an adverse impact on the ability of the Agency to pay debt service on the 2011 Bonds. See "RISK
FACTORS."
FINANCING PLAN
The Project
The Agency anticipates using the proceeds of the 2011 Bonds deposited to the Redevelopment
Fund to fund the costs of public improvements and infrastructure in accordance with the Redevelopment
Law, such as, but not limited to, the construction of several parking structures and infrastructure, median
and streetscape improvements.
[The Agency plans on purchasing Cardiff Parking Structure from the City in order to have better
control over implementation of downtown parking garages. A new parking structure on Washington
Blvd. and Centinela Avenue will be built, which consists of three above-grade levels and one-half level
below ground, with approximately 245 spaces. Five levels of above grade parking with approximately
350 spaces will be built on Hayden Tract.]
3 Estimated Sources and Uses of Funds
The anticipated sources and uses of funds relating to the 2011 Bonds are as follows:
2011 Series A 2011 Series B
Sources Bonds Bonds
Principal Amount
[Less/Plus]: Original Issue [Discount/Premium]
Less: Underwriter's Discount
Total Sources of Funds
Uses
Redevelopment Fund
Expense Fund°
Reserve Accolint (2)
Total Uses of Funds
Represents the costs of issuing the 2011 Bonds, and includes Trustee fees, Bond Counsel
fees and expenses, fiscal consultant fees, financial advisor fees, printing costs, rating
agency fees and other related costs.
To be deposited in the Series 2011 Subaccount of the Reserve Account, and is equal to the
Reserve Account Requirement for the 2011 Bonds. See "SECURITY FOR THE 2011
Bonds — Reserve Account."
THE 2011 BONDS
Authority for Issuance
The 2011 Bonds are being issued pursuant to the Redevelopment Law under the Indenture, a
resolution of the Agency adopted on February 17, 2011, and a resolution of the City adopted on February
17, 2011.
Description
2011 Series A Bonds
The 2011 Series A Bonds will be issued in fully registered form in any denominations of Initial
Principal Amount but will reflect denominations of $5,000 Final Compounded Amount or any integral
multiple thereof. No 2011 Series A Bond will have more than one maturity date. The 2011 Series A
Bonds will be dated the date of delivery (the "Closing Date"), will mature on November 1 in each of the
years and in the Final Compounded Amounts set forth on the inside cover of this Official Statement. The
2011 Series A Bonds will be delivered on the Closing Date in the aggregate Initial Principal Amounts set
forth on the inside cover of this Official Statement.
Interest on the Initial Principal Amount of each 2011 Series A Bond will be compounded semi-
annually at the yields set forth on the inside cover of this Official Statement (such interest being equal to
the difference between the Final Compomided Amounts and the Initial Principal Amounts thereof) from
the Closing Date on each May 1 and November 1, commencing November 1, 2011, until maturity or
earlier redemption thereof, computed using a year of 360 days of twelve 30-day months and will be
payable (i) at maturity as part of the Final Compounded Amount, or (ii) at redemption as part of the
Accreted Value to the redemption date. [A table of Accreted Values (as of each May 1 and November 1)
4
(I)
(2) of the 2011 Series A Bonds of each maturity per $5,0000 of Accreted Value at maturity is attached hereto
as Appendix I.] The Final Compounded Amount, or the Accreted Value and redemption premium (if
any), as applicable, with respect to any 2011 Series A Bond will be paid upon presentation and surrender
thereof, at maturity or the prior redemption thereof, at the Trust Office, in lawful money
, of the United
States of America.
2011 Series B Bonds
The 2011 Series B Bonds will be dated the Closing Date, will be issued as fully registered bonds
in denominations of $5,000 or any integral multiple of $5,000, and will mature in the amounts and on the
dates as set forth on the inside cover of this Official Statement. Interest on the 2011 Series B Bonds will
be payable semiannually on May 1 and November 1 of each year (each, an "Interest Payment Date"),
commencing November 1, 2011.
Interest due on the 2011 Series B Bonds will be calculated on the basis of a 360-day year
composed of twelve 30-day months. Each 2011 Series B Bond will bear interest from the appropriate
Interest Payment Date next preceding the date of authentication, unless (i) it is authenticated during the
period from the day after the Record Date for an Interest Payment Date to and including such Interest
Payment Date, in which event it will bear interest from such Interest Payment Date, or (ii) it is
authenticated on or prior to the Record Date for the first Interest Payment Date, in which event it will bear
interest from the Closing Date, provided, however, if, at the time of authentication of any 2011 Series B
Bond, interest with respect to that 2011 Series B Bond is in default, that 2011 Series B Bond will bear
interest from the Interest Payment Date to which interest has, been paid or made available for payment
with respect to such 2011 Series B Bond. A "Record Date" means, with respect to any Interest Payment
Date, the 15th calendar day of the month immediately preceding such Interest Payment Date, whether or
not such day is a Business Day.
Payment of interest on the 2011 Series B Bonds is payable in lawful money of the United States
of America on each appropriate Interest Payment Date to the registered owner thereof according to the
registration books of the Trustee (the "Owner") as of the close of business on the Record Date.
DTC and Book-Entry Only System
DTC will act as securities depository for the Bonds. The Bonds will be executed and delivered as
fully-registered securities registered initially in the name of Cede & Co. (DTC's partnership nominee).
So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references in this
Official Statement to the "Owners" will mean Cede & Co., and will not mean the Beneficial Owners of
the Bonds. See "APPENDIX G — Book Entry-Only System."
Method of Payment
Principal of and, premium, if any, and interest on the Bonds are payable directly to DTC by the
Trustee in lawful money of the United States of America. Upon receipt of payments of principal,
premium or interest, DTC is to remit such principal, premium or interest to the "DTC Participants" (as
defined in APPENDIX G) for subsequent disbursement to the Beneficial Owners of the Bonds. See
"APPENDIX G — Book Entry-Only System."
5
1-U2- Redemption
2011 Series A Bonds
Optional Redemption. The 2011 Series A Bonds maturing on or before November 1, 20 , are
not subject to optional redemption prior to maturity. The 2011 Series A Bonds maturing on and after
November 1, , are subject to redemption as a whole, or in part among maturities as the Agency
designates and by lot within a maturity, in integral multiples of $5,000 of Final Compounded Amount, on
any date on or after November 1, , at a redemption price equal to [100]% of the Accreted Value of
the called 2011 Series A Bonds on the redemption date, without premium.
Mandatory Redemption From Sinking Fund Payments. The 2011 Series A Bonds are not
subject to mandatory sinking account redemption prior to maturity.
2011 Series B Bonds
Optional Redemption. The 2011 Series B Bonds maturing on or before November 1, 20 , are
not subject to optional redemption prior to maturity. The 2011 Series 13 Bonds maturing on and after
November 1, , are subject to redemption as a whole or in part, by such maturities as the Agency
designates, prior to their respective maturities at the option of the Agency on any date on or after
November 1, from funds derived by the Agency from any source, at a redemption price equal to the
principal amount of the 2011 Series B Bonds called for redemption, together with accrued interest thereon
to the date fixed for redemption, without premium.
Mandatory Redemption From Sinking Fund Payments.
The 2011 Series B Bonds maturing on
November 1, (the "2011 Series B Term Bonds") are also subject to redemption prior to their stated
maturity, in part by lot, from Sinking Account Installments deposited in the Sinking Account, at the
principal amount thereof and interest accrued thereon to the date fixed for redemption, without premium,
as set forth in the following tables.
Sinking Fund
Redemption Date
(November 1)
Principal Amount
To Be Redeemed
(maturity)
In lieu of redemption of any 2011 Series B Term Bond, amounts on deposit in the Special Fund
or in the Sinking Account therein, may be used and withdrawn by the Trustee at any time, upon the
written request of the Agency, for the purchase of such 2011 Series 13 Term Bonds at public or private
sale as and when and at such prices (including brokerage and other charges, but excluding accrued
interest, which is payable from the Interest Account) as the Agency may in its discretion determine, but
not in excess of the principal amount thereof plus accrued interest to the purchase date; provided,
however, that no 2011 Series B Bonds will be purchased by the Trustee with a settlement date more than
60 days prior to the redemption date.
Notice of Redemption
6 The Trustee will mail notice of redemption (by first class mail, postage prepaid) at least 30 days
prior to the redemption date to the respective registered Owners of the 2011 Bonds designated for
redemption, to one or more Tnfonnation Services, and to the Securities Depositories. The Agency has the
right to rescind any optional redemption by written notice. Any notice of optional redemption of Series
2011 Bonds will be cancelled and annulled if for any reason funds are not available on the date fixed for
redemption for the payment in full of the Series 2011 Bonds then called for redemption. Neither such
cancellation nor lack of available funds will constitute an Event of Default under the Indenture. The
Agency and the Trustee will have no liability to the Owners or any other party related to or arising from
such rescission of redemption. The Trustee will send notices of rescission of such redemption in the same
manner as the original notices of redemption were sent.
Selection of Bonds for Redemption
Whenever less than all Outstanding 2011 Bonds are called for redemption at any one time, the
Trustee will select the 2011 Bonds to be redeemed, from the Outstanding 2011 Bonds maturing on such
date not previously selected for redemption, by lot.
Transfer and Exchange
Any 2011 Bond may, in accordance with its terms, be transferred, upon the registration books of
the Trustee, upon surrender of such 2011 Bond, accompanied by delivery of a written instrument of
transfer in a form acceptable to the Trustee, duly executed. Whenever any 2011 Bond is or 2011 Bonds
are surrendered for registration of transfer, the Agency will execute and the Trustee,will authenticate and
deliver a new 2011 Bond or 2011 Bonds, of like series, interest rate, maturity and principal amount of
authorized denomination.
The Trustee is not required to transfer or exchange any 2011 Bond during the 15 days preceding
any date established by the Trustee for selection of 2011 Bonds for redemption or any 2011 Bonds which
have matured or been selected for redemption.
Debt Service Schedules
Scheduled debt service on the Senior 1993 Loan Agreements, the Parity 1999 Series A Bonds, the
Parity 2002 Bonds, the Parity 2004 Bonds, the Parity 2005 Bonds and the 2011 Bonds, without regard to
any optional redemption, is shown in the following table:
7
1-N Senior 1993 Loan
Agreements
$5,649,000
5,653,200
5,643,375
5,649,525
$22,595,100
Bond Year
Ending Nov. 1
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
Total
Parity 1999
Series A Bonds
$2,228,690
2,225,940
2,234,585
2,228,745
2,232,901
1,608,295
1,608,520
1,614,840
1,613,360
1,614,360
1,607,560
1,038,240
1,037,760
5,140,880
5,142,720
$33,177,396
2011 Bonds
Totalw*
$1,900,629
2,919,902
2,913,318
5,911,538
5,920,586
5,921,811
5,919,871
5,916,864
5,917,750
5,916,900
5,920,100
6,190,200
5,998,650
5,712,700
11,553,300
9,435,000
8,130,000
8,130,000
$110,229,116
Aggregate Total*
$15,877,082,
16,889,379
16,889,760
19,890,265
19,892,426
19,891,170
19,891,829
19,887,687
19,891,400
19,890,238
19,892,388
19,890,898
19,630,379
19,550,393
19,338,339
9,435,000
8,130,000
8,130,000
$312,888,630
TABLE 1
Debt Service Schedules*
Parity 2002 Parity 2004 Parity 2005 2011 Bonds 2011 Bonds
Bonds Bonds Bonds Principal(1)* Interest(')*
$2,080,950 $3,026,999 $990,814 $1,900,629
2,077,800 3,023,549 988,989 $45,000 2,874,902
2,082,625 3,024,869 990,989 40,000 2,873,318
2,082,050 3,025,819 992,589 3,040,000 2,871,538
2,078,863 8,671,288 988,789 3,205,000 2,715,586
2,079,863 9,292,538 988,664 3,395,000 2,526,811
2,080,888 9,293,288 989,264 3,610,000 2,309,871
2,077,788 9,288,978 989,219 3,855,000 2,061,864
2,075,563 9,291,028 993,700 4,140,000 1,777,750
2,078,938 9,287,815 992,225 4,460,000 1,456,900
2,082,363 9,292,040 990,325 3,361,730 2,558,370
1,247,163 9,292,295 2,123,000 3,536,698 2,653,502
1,245,144 6,632,575 4,716,250 3,529,800 2,468,851
1,320,563 7,376,250 3,543,059 2,169,641
1,319,319 1,323,000 5,515,029 6,038,271
2,680,012 6,754,988
2,097,215 6,032,785
1,900,875 6,229,125
$28,009,875 $92,443,078 $26,434,065 $51,954,417 $58,274,700
(1) Includes a combination of current interest bonds and capital appreciation bonds at an assumed true interest cost of 8.1%. Shows principal at maturity and
compounded interest for capital appreciation bonds.
* Preliminary; subject to change.
8 SECURITY FOR THE 2011 BONDS
Tax Allocation Financing
The Redevelopment Law provides a means for financing redevelopment projects based upon an
allocation of taxes collected within a redevelopment project area. The taxable valuation of a
redevelopment project area last equalized prior to adoption of the redevelopment plan, or base roll, is
established and, except for any period during which the taxable valuation drops below the base year level,
the taxing agencies thereafter receive the taxes produced by the levy of the then current tax rate upon the
base roll. Taxes collected upon any increase in taxable valuation over the base roll are allocated to a
redevelopment agency and may be pledged by a redevelopment agency to the repayment of any
indebtedness incurred in financing or refinancing a redevelopment project. Redevelopment agencies
themselves have no authority to levy property taxes and must look specifically to the allocation of taxes
produced as indicated above. See "APPENDIX H — Fiscal Consultant Report" for more information
about applicable tax rates in the Project Area.
Allocation of Taxes
As provided in the Redevelopment Plan, and pursuant to Article 6 of Chapter 6 of the
Redevelopment Law (commencing with Section 33670 of the California Health and Safety Code) and
Section 16 of Article XVI of the Constitution of the State of California, taxes levied upon taxable
property in the Project Area each year by or for the benefit of the State of California and any city, county,
city and county, district or other public corporation (herein collectively referred to as "taxing agencies")
for each fiscal year beginning after the effective dates of the ordinance approving the original
redevelopment plans for the Components, are divided as follows:
1. To other taxing agencies:
That portion of the taxes which would be produced by the rate upon
which the tax is levied each year by or for each of the taxing agencies upon the total sum of the
assessed value of the taxable property in the Project Area as shown upon the assessment roll used
in connection with the taxation of such property by such taxing agency last equalized prior to the
establishment of the respective Component Areas (the "Base Year Amount") will be allocated to
and when collected will be paid into the funds of the respective taxing agencies in the same
manner as taxes by or for the taxing agencies on all other property are paid; and
2. To the Agency:
Except for taxes which are attributable to a tax rate levied by a taxing agency
for the purpose of producing revenues to repay bonded indebtedness approved by the voters of
the taxing agency on or after January 1, 1989, which will be allocated to and when collected will
be paid to the respective taxing agency, and except for statutory pass-through payments, that
portion of the levied taxes each year in excess of the Base Year Amount will be paid into a
special fund of the Agency to pay the principal of and interest on bonds, loans, moneys advanced
to, or indebtedness (whether funded, refunded, assumed, or otherwise) incurred by the Agency to
finance or refinance, in whole or in part, the Project Area.
When all bonds, loans, advances, and indebtedness, if any, and interest thereon, have been paid,
all moneys thereafter received from taxes upon the taxable property in the Project Area is paid into the
funds of the respective taxing agencies as taxes on all other property are paid. See "Tax Revenues; Flow
of Funds" below.
9
t-k6 Tax Revenues; How of Funds
Tax Revenues. The 2011 Bonds are equally secured by a pledge of, security interest in, and lien
on all of the Tax Revenues, and a pledge of all of the moneys in the Special Fund, Debt Service Fund,
Interest Account, Principal Account, Sinking Account and 2011 Subaccount of the Reserve Account
created pursuant to the Indenture. See "APPENDIX A — Summary of Certain Provisions of the
Indenture."
In the Indenture, the term "Tax Revenues" is defined to mean, for each Bond Year, the taxes
(including all payments, reimbursements and subventions, if any, specifically attributable to ad valorem
taxes lost by reason of tax exemptions and tax rate limitations) eligible for allocation to the Agency
pursuant to the Law in connection with the Project Area.
"Tax Revenues" exclude the following:
(i) amounts, if any, received by the Agency pursuant to Section 16111 of the Government
Code (relating to the allocation of "special supplemental subventions" to certain local agencies,
including redevelopment agencies),
(ii) amounts required to be used to comply with the terms of the Senior 1993 Loan
Agreements, and
(iii) amounts payable to taxing agencies pursuant to Section 33607.5 of the Law, except
to the extent that such payments are subordinated pursuant to Subsection (e) of such Section
33607.5.
"Tax Revenues" includes amounts deposited by the Agency in the Housing Fund pursuant to
Section 33334.2 or Section 33334.6 of the Law, as provided in the Redevelopment Plan, but only to the
extent such amounts are used to pay principal or interest or other financing charges with respect to bonds
or other obligations issued to increase, improve or preserve the supply of low and moderate income
housing within or of benefit to the Project Area.
The definition of Tax Revenues reflects the fact that the Agency's pledge of tax increment
generated in the Project Area to payment of debt service on the 2011 Bonds is subordinate to the
Agency's pledge of tax increment revenues to payment of its obligations with respect to the
outstanding Senior 1993 Bonds (which represent the remaining outstanding portion of the Senior
1993 Loan Agreements).
For purposes of the provisions of the Indenture regarding the issuance of Additional Bonds, "Tax
Revenues" do not exclude amounts required to be used to comply with the terms of the Senior 1993 Loan
Agreements.
Flow of Funds. The Indenture establishes a "Special Fund" to be held by the Agency, into which
the Agency will deposit Tax Revenues received. On or before the 5th Business Day immediately
preceding any Interest Payment Date, the Agency will withdraw from the Special Fund and transfer to the
Trustee for deposit into the Debt Service Fund, an amount equal to the deposits required to make the
interest, principal and sinking account payments coming due on the Parity 1999 Series A Bonds, the
Parity 2002 Bonds, the Parity 2004 Bonds, the Parity 2005 Bonds and the 2011 Bonds, and if needed, the
amount necessary to replenish the Reserve Account to the Reserve Account Requirement for each series
of Bonds outstanding.
10
RI Maintenance of Special Fund After November 1, 2016. Unless (i) the time limits on the
effectiveness of the Redevelopment Plan with respect to Component Area No. 1 (July 26, 2014) and
Component Area No. 2 (December 28, 2014) of the Project Area are extended to a date no earlier than the
final maturity date of the Parity 1999 Series A Bonds (November 1, 2025), the Parity 2002 Bonds
(November 1, 2025), the Parity 2005 Bonds (November 1, 2025), and the 2011 Bonds (November 1,
20 ), and any Additional Bonds, pursuant to the Redevelopment Law, or (ii) Tax Revenues derived
solely from Component Area No. 3 and Component Area No. 4 of the Project Area ("Area 3 and 4
Revenues") then meet the coverage requirements set forth in the Indenture, as evidenced by a
Consultant's Report (as defined in the Indenture), then the Agency is required to take the following
actions:
(i)
After November 1, 2015 and prior to November 1, 2016, the Agency will
determine the total amount of debt service payable on the Bonds during the Bond Years ending
November 1, 2022 through November 1, 2025, inclusive ("Total Debt Service") and the total
amount of Area 3 and 4 Revenues projected to be received by the Agency during such Bond
Years ("Projected Revenues"). Such projections will assume that Area 3 and 4 Revenues in each
such Bond Year will be equal to the Area 3 and 4 Revenues received by the Agency during the
Bond Year ending November 1, 2015. Commencing on and after November 1, 2016, the Agency
is required to transfer, from Tax Revenues received by the Agency in excess of the amounts
required to be transferred to the Trustee for deposit in the Debt Service Fund described above, to
a special holding account to be established and held by the Trustee, all such excess Tax Revenues
until the amount accumulated therein, together with the amount of the Projected Revenues, equals
125% of Total Debt Service.
(ii) Within the special holding account, the Trustee will establish two subaccounts
designated as the "Component Area No. 1 Special Subaccount" and "Component Area No. 2
Special Subaccount." When transferring excess Tax Revenues to the Trustee, the Agency will
specify in writing the amount of such excess Tax Revenues to be deposited in the Component
Area No. 1 Special Subaccount and the amount of such excess Tax Revenues to be deposited in
the Component Area No. 2 Special Subaccount.
(iii) Because Tax Revenues derived from a particular Component Area can only be
used to pay debt service on the Bonds until the final date established by the applicable
Redevelopment Plan for payment of indebtedness (most significantly, July 26, 2024 for
Component Area No. 1 and December 28, 2024 for Component Area No. 2), the Agency has
covenanted that all of the moneys deposited in the Component Area No. 1 Special Subaccount
and the Component Area No_ 2 Special Subaccount will be used to optionally redeem a portion of
the Bonds on or before the last day on which the Agency may repay indebtedness from
Component Area No. 1 Tax Revenues or Component Area No. 2 Tax Revenues, respectively.
The Agency may choose to call any Bonds eligible for optional redemption, provided, that, after
redeeming Bonds from such moneys, the projected Tax Revenues each fiscal year shall be at least
125 percent of the Annual Debt Service for the corresponding Bond Year through the remaining
tenn of the Outstanding Bonds.
Limitations on Tax Revenues. The Agency's receipt of Tax Revenues is subject to certain
limitations ("Plan Limits") contained in the Redevelopment Plan on the number of dollars of taxes which
may be divided and allocated to the Agency pursuant to the Redevelopment Plan, as such limitation is
prescribed by Section 33333.4 of the Redevelopment Law. See "THE CULVER CITY
REDEVELOPMENT PROJECT — General," and "— Redevelopment Plan Limitations."
11
R8 lit addition, the Redevelopment Plan with respect to Component Area No. 4 limits the amount of
bonded indebtedness which the Agency has outstanding at any one time to $100 million. The Agency
believes that the various limitations contained in the Redevelopment Plan will not adversely affect its
ability to issue or to pay debt service on the 2011 Bonds.
The Agency has no power to levy and collect property taxes, and any property tax limitation,
legislative measure, voter initiative or provisions of additional sources of income to taxing agencies
having the effect of reducing the property tax rate, could reduce the amount of Tax Revenues that would
otherwise be available to pay debt service on the 2011 Bonds and, consequently, the principal of, and
interest on, the 2011 Bonds. Likewise, broadened property tax exemptions could have a similar effect.
See "RISK FACTORS" and "LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING
LIMITATIONS."
Limited Sources of Payment for the 2011 Bonds. THE 2011 BONDS ARE NOT A DEBT OF
THE CITY, THE STATE OF CALIFORNIA OR ANY OF THEIR POLITICAL SUBDIVISIONS
(OTHER THAN THE AGENCY TO TUE EXTENT DESCRIBED HEREIN), AND NEITHER THE
CITY, THE STATE NOR ANY OF THEIR POLITICAL SUBDIVISIONS (OTHER THAN THE
AGENCY) IS LIABLE THEREON. THE AGENCY HAS NO TAXING POWER. THE 2011 BONDS
ARE REVENUE BONDS, PAYABLE EXCLUSIVELY FROM THE TAX REVENUES AND OTHER
FUNDS AS PROVIDED IN THE INDENTURE. THE OBLIGATIONS OF THE AGENCY UNDER
THE 2011 BONDS AND ANY ADDITIONAL BONDS OF THE AGENCY ARE PAYABLE SOLELY
FROM TAX REVENUES ALLOCATED TO THE AGENCY FROM THE PROJECT AREA.
Reserve Account
Series 2011 Subaccount; Reserve Requirement. The Indenture provides that on the Closing
Date a subaccount within the Reserve Account will be created, the "Series 2011 Subaccount," and will be
funded in an amount equal to the Reserve Account Requirement for the 2011 Bonds.
The Indenture defines "Reserve Account Requirement" as an amount equal to the least of: (i)
10% of the proceeds (within the meaning of Section 148 of the Code) of that portion of 2011 Bonds
Outstanding with respect to which Annual Debt Service is calculated, (ii) 125% of Average Annual Debt
Service of the 2011 Bonds or (iii) Maximum Annual Debt Service on the 2011 Bonds. See "APPENDIX
A — Summary of Certain Provisions of the Indenture."
Application. Amounts in the Series 2011 Subaccount of the Reserve Account will be used to pay
principal, interest and sinking account payments (if any) with respect to the 2011 Bonds. Each
subaccount of the Reserve Account is available only for payment of the series of Bonds to which it
relates, and only those funds on deposit in the Series 2011 Subaccount will be available for payment of
debt service on the 2011 Bonds.
Use of Surety Bond. The Agency has the right to satisfy the Reserve Account Requirement for
the Bonds by crediting to the Reserve Account moneys or a Qunlified Reserve Account Credit Instrument
(as defined in the Indenture) or any combination thereof, which in the aggregate make funds available in
the Reserve Account in an amount equal to the Reserve Account Requirement. Upon the deposit with the
Trustee of such Qualified Reserve Account Credit Instrument, the Trustee will release moneys then on
hand in the Reserve Account to the Agency, to be used for any lawful purpose relating to the Project
Area, in an amount equal to the face amount of the Qualified Reserve Account Credit Instrument.
12 Whenever both cash and a Qualified Reserve Account Credit Instrument are on deposit in the
Series 2011 Subaccount of the Reserve Account, any draw on the Qualified Reserve Account Credit
Instrument will be made only after all cash in the Series 2011 Subaccount has been expended.
Issuance of Additional Bonds
Additional Bonds. The Indenture permits the Agency, subject to certain conditions, to issue
additional Bonds ("Additional Bonds") payable from Tax Revenues on a parity with the Parity 1999
Series A Bonds, the Parity 2002 Bonds, the Parity 2004 Bonds, the Parity 2005 Bonds and the 2011
Bonds. Because any Additional Bonds would be secured by Tax Revenues on a parity with the Bonds,
they would be payable from tax increment revenue generated in the Project Area on a basis subordinate to
the portion of the Senior 1993 Loan Agreements corresponding to the outstanding Senior 1993 Bonds.
The conditions for the issuance of Additional Bonds include, among other things, the following:
(i) actual Tax Revenues (excluding any unsubordinated payments to taxing agencies pursuant to the
Redevelopment Law) based upon the assessed valuation of taxable property in the Project Area as shown
on the most recently equalized assessment roll preceding the date of the Agency's adoption of the
Supplemental Indenture providing for the issuance of such Additional Bonds plus, at the option of the
Agency, the Additional Allowance, must be in an amount equal to at least 125% of Combined Maximum
Annual Debt Service following the issuance of such Additional Bonds, as evidenced by a Consultant's
Report; and (ii) projected annual Tax Revenues over the term of the Bonds must be in an amount equal to
at least 125% of Combined Annual Debt Service following the issuance of such Additional Bonds, as
evidenced by a Consultant's Report.
For purposes of subsection (i) above, the amount of Tax Revenues will be the amount received in
the most recent Fiscal Year (which may be the current Fiscal Year) for which records are available from
the County. For the purposes of calculating Tax Revenues, a tax rate of $1.00 per $100 of assessed
valuation will be assumed.
"Additional Allowance" is defined to mean, as of the date of any calculation, the amount of Tax
Revenues which, as shown in a Consultant's Report, is estimated to be receivable by the Agency in the
next Fiscal Year as a result of increases in the assessed valuation of taxable property in the Project Area
due to construction which has been completed but has not yet been reflected on the tax roll.
See "APPENDIX A — Summary of Certain Provisions of the Indenture" for additional detail
about the issuance of Additional Bonds.
THE AGENCY
Agency Existence and Personnel
The Agency is a public body corporate and politic, organized and existing under and pursuant to
the Constitution and laws of the State. The Agency was established on February 8, 1971 by action of the
City Council pursuant to the Redevelopment Law. The five members of the City Council of the City
serve as the governing body of the Agency and exercise all rights, powers, duties and privileges of the
Agency.
The Agency is a separate public body and exercises governmental functions in planning and
carrying out redevelopment projects. The Agency can build public improvements, facilitate the
development of on- and off-site improvements for private development projects, acquire and re-sell
property, and provide services of special benefit to the Component Areas.
13 Micheal O'Leary, Chair
D. Scott Malsin, Vice Chair .
Christopher Annenta, Member
Andrew Weissman, Member
Jeffrey Cooper, Member
Member Term Expires
April 2012
April 2014
April 2012
April 2012
April 2014
Members of the Agency and their terms of office are shown below:
The Agency has entered into various agreements with the City for financial assistance and
services, facilities and personnel support. The Agency reimburses the City for all such services
performed on its behalf in amounts equal to the gross salary and employee fringe benefits for all City
employees used by the Agency, plus an allocation of overhead costs. The Agency is charged interest on
the balance of billings and advances from the City not paid within thirty days at the lower of 0.5 percent
per annum above the average monthly interest rate earned by the City on its other investments or the
maximum legal interest rate.
The following summarizes key Agency staff:
John Nachbar is the Executive Director of the Agency and the City Manager of the City since
August 2010. Prior to joining the City, he was City Manager of Overland Park, Kansas for ten years.
Mr. Nachbar has over thirty one years of experience in the city management profession. He has also
managed the cities of Albany and Patterson, CA, and was the Deputy City Manager of Tucson, Arizona.
Sol Blumenfeld has served as the Director of Community Development and Assistant Executive
Director of the Agency since 2007. He is a graduate of University of California, Berkeley and holds a
Masters Degree from the University of Pennsylvania Graduate School of Design in City Planning with
specialization in urban design and a Masters Degree in Landscape Architecture from California
Polytechnic University. He is also a California Building Official. He has worked extensively in the fields
of design, land planning, city planning, project management and municipal program administration in the
public and private sectors.
Todd Tipton is Redevelopment Administrator. Mr. Tipton has worked for the City since 1990
and the Agency since 2000. Mr. Tipton obtained a Bachelor of Science degree in Geography from
Arizona State University in 1988 and a Master of Planning and Development Studies degree from the
University of Southern California in 2000. Mr. Tipton has extensive experience with land use, urban
design and redevelopment projects. Mr. Tipton is certified by the American Institute of Certified
Planners (AICP) and the National Trust for Historic Preservation (CMSM).
Jeff Muir serves as Treasurer of the Agency and is the Chief Financial Officer of the City. Mr.
Muir became the first Chief Financial Officer of Culver City in 2007 after the elected City Treasurer
position was eliminated through a City Charter amendment. Mr. Muir obtained a Bachelor of Arts in
Economics from Occidental College and a Master of Business Administration from the University of
Southern California. Mr. Muir has extensive experience with municipal fmance and administration.
Agency Powers and Duties
The Agency is charged with the responsibility for eliminating blight through the process of
redevelopment. Generally, this process is culminated when the Agency disposes o. for development
by the private sector, but before this can be accomplished, the Agency must complete the process of
acquiring and assembling the necessary sites, relocating residents and businesses, demolishing the
14
s \ deteriorated improvements, grading and preparing the sites for purchase by developers and providing for
ancillary off-site improvements.
Redevelopment in the State is carried out pursuant to the Redevelopment Law. Section 33020 of
the Redevelopment Law defines redevelopment as the "planning, development, replanning, redesign,
clearance, reconstruction or rehabilitation, or any combination of these, of all or part of a survey area and
the provision of such residential, commercial, industrial, public or other structures or spaces as may be
appropriate or necessary in the interest of the general welfare, including recreational and other facilities
incidental or appurtenant to them."
All powers of the Agency are vested in its five members. The Agency exercises all of the
governmental functions authorized under the Redevelopment Law and has, among other powers, the
authority to acquire, administer, develop and sell or lease property, including the right of eminent domain,
and the right to issue debt and expend the proceeds.
Agency Financial Statements
The Redevelopment Law requires redevelopment agencies to have an independent financial audit
conducted each year. The financial audit is also required to include an opinion of the Agency's
compliance with laws, regulations and administrative requirements governing activities of the Agency.
The firm of Mayer Hoffman McCann P.C., Irvine, California, prepared a financial statement for the
Agency for the fiscal year ended June 30, 2010. The firm's examination was made in accordance with
generally accepted auditing standards and the standards applicable to financial audits contained in
Goverment Audit Standards, issued by the Comptroller General of the United States. The Agency
follows fund accounting principles reflecting the modified accrual basis of accounting in which revenues
are recognized when they become measurable and available and expenditures are generally recognized
when incurred except for principal and interest on general long-term debt, which is recognized when due.
The audited financial statements of the Agency, including Mayer Hoffman McCann's auditor's
report and report on compliance and on internal control over financial reporting, are attached as
"APPENDIX D - Audited Financial Statements of the Agency for Fiscal Year Ended June 30, 2010."
Mayer Hoffman McCann has not performed any post-audit review of the financial condition or operations
of the Agency.
Outstanding Agency Debt
The Agency currently has the following outstanding indebtedness. See "APPENDIX D —
Audited Financial Statements of the Agency for Fiscal Year Ended June 30, 2010" for additional
information relating to the payment of indebtedness of the Agency.
Senior Debt. The defmition of "Tax Revenues" excludes amounts required to be used to pay debt
service on the Senior 1993 Loan Agreements, made by the Authority to the Agency and seeming the debt
service on the remaining outstanding portion of the Senior 1993 Bonds. Debt service on the Parity 1999
Series A Bonds, the Parity 2002 Bonds, the Parity 2004 Bonds, the Parity 2005 Bonds and the 2011
Bonds is payable on a basis subordinate to the Senior 1993 Loan Agreements and the Senior 1993 Bonds.
The outstanding 1993 Bonds mature on November 1, 2014. As of the date of this Official Statement, the
outstanding principal amount of the 1993 Bonds will be $19,800,000.
Parity Debt. As described above, the 2011 Bonds are secured by Tax Revenues on a parity with
the Parity 1999 Series A Bonds, the Parity 2002 Bonds, the Parity 2004 Bonds and the Parity 2005 Bonds.
15
S2_ Subordinate Debt.
The Agency also has incurred the following obligations, all of which are
payable on a basis subordinate to the Senior 1993 Loan Agreements and the Parity Bonds.
City Loan to Agency.
In June 2007, the City advanced $9,000,000 to the Agency with a one year
term at a rate of 5.7% per annum (the "City Loan") to facilitate various redevelopment activities.
The Agency made a payment of $2,000,000 in June 2009. Due to a downturn in the economic
environment, the City approved a deferment of the loan payment over two years at the Agency's
request. In June 2010, the Agency paid down $4,500,000 leaving the final balance of $3,500,000
due in June 2011.
Agency/City Cooperation Agreements.
[The Agency and the City have entered into Cooperation
Agreements for Component Areas Nos. 1, 2 and 3, which require the Agency to reimburse the
City for advances related to various capital or public improvements of benefit to the respective
Component Areas. This indebtedness to the City is subordinate to any tax allocation
indebtedness incurred by the Agency, including the Senior 1993 Loan Agreements, the Parity
1999 Series A Bonds, the Parity 2002 Bonds, the Parity 2004 Bonds, the Parity 2005 Bonds and
the 2011 Bonds. — update status]
Agency Investment Policy
The Agency's funds are invested by the Chief Financial Officer in accordance with (i) the City's
Investment Policy, most recently amended in August 2010, (ii) Culver City Charter Article VI, Section
692, and (iii) Culver City Redevelopment Agency Bylaws Article II Section 203.
The Chief Financial Officer is required to submit an investment report to the City Council and the
City Manager no less frequently than quarterly (and within 30 days of the quarter end). The City has also
established an Investment Committee to meet at least twice annually to review and evaluate previous
investment activity and yield, to review the current status of all invested funds, and to discuss anticipated
cash requirements and investment activity; the Investment Committee also meets with the City's outside
auditors at least annually. The Investment Committee reviews, and the City Council adopts by resolution,
the Investment Policy at least annually.
The primary objectives of the Investment Policy are:
Safety of principal.
Liquidity.
Yield.
According to the Chief Financial Officer's most recent report for the quarter ended December 31,
2010, the Agency has invested funds as set forth in the table below. As of December 31, 2010, the market
value of the Agency's investment portfolio was 100.6% of the investment portfolio's book value.
CULVER CITY REDEVELOPMENT AGENCY
INVESTMENT PORTFOLIO SUMMARY
(as of December 31, 2010)
Type of Investment Book Value Market Value Percent of Total
Federal Agency securities $22,988,013 $23,210,230 57%
Local Agency Investment Fund (LAW) 13,041,648 13,041,648 32
Money Market Funds 1,164,982 1,164,982 3
16
SS 8 3,057,010 3,060,970
Medium-Term Notes
Former Project Area
Component Gross Acres
Total $40,251,653 $40,477,830 100%
Source: City of Culver City.
Agency Pension Obligation
The Agency has no employees and is not allocated any portion of the City's pension costs.
THE CULVER CITY REDEVELOPMENT PROJECT
General
The Culver City Redevelopment Project (the "Project Area") was formed by the merger of three
existing project areas of the Agency and the addition of additional land to the Project Area, with the
following gross acreage as set forth below:
Slauson-Sepulveda Redevelopment Project Area No. 1 "Component Area No. 1" 306
Overland-Jefferson Redevelopment Project Area No. 2 "Component Area No. 2" 184
Washington-Culver Redevelopment Project Area No. 3 "Component Area No. 3" 526
"Component Area No. 4" 270
TOTAL: 1,286
Pursuant to Ordinance No. 98-014 adopted by the City Council on November 23, 1998, each of
the currently existing redevelopment plans for the Components (each, a "Redevelopment Plan") was
amended to provide, among other things, for the merging of Component Areas Nos. 1, 2 and 3 into the
Project Area. Ordinance No. 98-015, adopted by the City Council on November 23, 1998, added territory
known as "Component Area No. 4" to the Project Area.
Redevelopment Plan Limitations
General. The land use restrictions in each Component Area of the Redevelopment Plan expire
upon different dates as shown below. Furthermore, no loans, advances or indebtedness to be repaid from
tax increment revenues of any Component Area may be established or incurred by the Agency after the
expiration of the date set forth in the Redevelopment Plan for such Component Area, but such loan,
advance or indebtedness may be repaid with tax increment revenue until the last date the Agency may
receive tax increment revenue under the Redevelopment Plan for that Component Area.
In 1993, the California Legislature enacted AB 1290. Among the changes to the Redevelopment
Law accomplished by AB 1290 was a provision which limits the period of time for incurring and
repaying loans, advances and indebtedness which are payable from tax increment revenues.
The Agency has covenanted in the Indenture to undertake financing of redevelopment of the
Project Area in conformance with the Redevelopment Plan and the Redevelopment Law.
1998 Redevelopment Plan Amendments. As part of the 1998 Redevelopment Plan amendment,
the Agency established, with respect to Component Areas Nos. 1, 2 and 3, time limits on incurring loans,
advances and indebtedness, the redevelopment plan termination dates set forth below, and the last dates to
receive tax increment revenues set forth below (all as extended under the Redevelopment Law). The
17 1998 Redevelopment Plan amendment also set time limits for Component Area No. 4, pursuant to
applicable law governing the addition of new territory to a redevelopment project area, with respect to
establishing loans, advances, and indebtedness to be paid with tax increment revenue, the deadline for
effectiveness of the amendment to the redevelopment plan set forth below, and the last date on which
indebtedness may be repaid with tax increment revenues set forth below.
2004 Redevelopment Plan Amendments (SR 1045).
In January 2004, under the authority of
California Health and Safety Code Sections 33333.2(c) and 33333.6(e)(2)(C) (SB 1045), the City Council
adopted Ordinance No. 2004-001, which extended by one year the redevelopment plan expiration dates
and last date to receive tax increment for each Component Area, as set forth below.
2005 Redevelopment Plan Amendments (SB 1096). On September 12, 2005, under the authority
of California Health and Safety Code Section 33333.6(e)(2)(0) (SB 1096), the City Council adopted an
ordinance extending by two years the redevelopment plan expiration dates and last date to receive tax
increment for Component Areas No_ 1, 2 and 3.
The following table summarizes the Redevelopment Plan expiration dates for each of the
Component Areas and the final date on which each Component Area can receive tax increment revenue.
Component Area
Component Area No. 1
Component Area No. 2
Component -Area No. 3
Component Area No. 4
Plan Adoption
July 26, 1971
December 28, 1971
November 24, 1975
November 23, 1998
Plan Expiration
July 26, 2014
December 28, 2014
NOvember 24, 2018
November 23, 2029
Last Date to Receive Tax
Increment/Pay Indebtedness
July 26, 2024
December 28, 2024
November 24, 2028
November 23, 2044
Future Limits on Receiving Tax Increment from Two Component Areas. The last dates to
receive tax increment revenue from Component Areas No. 1 (July 26, 2024) and Component Area No. 2
(December 28, 2024) will occur before the final maturity of the 2011 Bonds (November 1, 20 ), the
Parity 2005 Bonds (November 1, 2025), the Parity 2002 Bonds (November 1, 2025) and the Parity 1999
Series A Bonds (November 1, 2025) (the Senior 1 .993 Bonds mature on November 1, 2014 and the Parity
2004 Bonds mature on November 1, 2023), meaning that, after December 28, 2024, debt service on the
2011 Bonds, the Parity 2005 Bonds, the Parity 2002 Bonds and the Parity 1999 Series A Bonds will be
payable solely from tax increment derived from Component Areas Nos. 3 and 4. Significant defaults by
the owners of property in Component Areas Nos. 3 and 4 in the payment of property taxes after
December 28, 2024 could adversely affect the ability of the Agency to pay debt service on the 2011
Bonds, the Parity 2005 Bonds, the Parity 2002 Bonds and the Parity 1999 Series A Bonds. See "RISK
FACTORS - Future Limits on Receiving Tax Increment."
Limits on Cumulative Tax Increment Revenues and Maximum Bonded Debt. The
Redevelopment Plan specifies (i) the cumulative total of tax increment revenues the Agency may collect
in Component Areas Nos. 1, 2 and 3, and (ii) the maximum bonded indebtedness that may be outstanding
in Component Area No. 4. The table below shows these limits for the Component Areas, as well as the
cumulative amount of tax increment revenue collected in each Component Area, from the time of
adoption of the respective Component Areas, according to the records of the Agency.
Component Area No. 4 has no limit on the total tax increment revenues that may be collected, in
that redevelopment plans adopted after January 1, 1994 have no such requirement. However, the
maximum outstanding bonded indebtedness payable from tax increment revenues the Agency may incur
with respect to Component Area No. 4 is $100 million.
18 Land Use
Residential — Single Family/Condos
Residential — Multi Family
Commercial
Industrial — Movie, Radio, TV
Industrial — Other
Miscellaneous
Government Owned
Vacant
Possessory Interest/Mineral Rights
Unsecured
Total 4,434
TABLE 2
Summary of Land
No. of
Parcels
2,591
244
908
11
292
55
194
139
Permitted Cumulative Tax
Component Area Increment Revenues
$ 755,000,000
830,000,000
3,080,000,000
no limit
Component Area No. 1
Component Area No. 2
Component Area No. 3
Component Area No. 4
Gross Tax Increment
Revenues Received
through June 30, 2010
$172,950,048
116,129,527
232,521,351
17,509,846
Maximum Outstanding
Bonded Indebtedness
no limit
no limit
no limit
$100 million
The Agency projects that Component Area No. 1 would not reach its cumulative gross tax
increment limit prior to July 26, 2024 (the last date on which the Agency is authorized to receive tax
increment in Component Area No. 1) unless assessed values in Component Area No. 1 were to grow at a
future annual rate of approximately 16%. Between fiscal year 2005-06 and 2010-11, assessed values in
Component Area No. 1 grew an average of approximately 11.68% per year.
The Agency projects that Component Area No. 2 would not reach its cumulative gross tax
increment limit prior to December 28, 2024 (the last date on which the Agency is authorized to receive
tax increment in Component Area No. 2) unless assessed values in Component Area No. 2 were to grow
at a future annual rate of approximately 26%. Between fiscal year 2005-06 and 2010-11, assessed values
in Component Area No. 2 grew an average of approximately 7.15% per year.
The Agency projects that Component Area No. 3 Component Area No. 3 would not reach its
cumulative gross tax increment limit prior to November 24, 2028 (the last date on which the Agency is
authorized to receive tax increment in Component Area No. 3) unless assessed values in Component Area
No. 3 were to grow at a future annual rate of approximately 22%. Between fiscal year 2005-06 and 2010-
11, assessed values in Component Area No. 3 grew an average of approximately 7.56% per year.
Component Area No. 4 does not have a cumulative tax increment revenue limit.
Land Use
The table below summarizes Project Area land uses and assessed values by land use.
Uses
20 10-1 1 Assessed
Value
$ 734,202,122
118,654,343
1,848,842,978
364,378,033
421,739,188
78,337,454
--
59,502,399
21,105,833
397,836,120
$4,044,598,470
Percent of
Total Value
18.15%
2.93
45.71
9.01
10.43
1.94
0.00
1.47
0.52
9.84
100.00%
Source: Keyser Marston Associates, Inc.
19 Assessee Name
1 Sony Related Entities:
Lot Inc.
TCE - Fihnland
Sony
2 Symantec CORP
Symantec CORP
Property Use
hid - Ent, Parking
Office
Unsecured
Office
Unsecured
Total
Total
% of Total Estimated Appeal
Incremental Value (2) Reduction
$(16,161,420)
(13,636,703)
(29,798,123)
7.62%
2.59%
2.52%
12.73%
2.88%
0.65%
3.54%
3 Transwestem Corporate Pointe Office, Parking 4 Area 1 106,840,000 2.64% (19,080,750) 3.06%
2.31%
0.07%
Ind - Ent, Parking
Unsecured
4 PCCP Studio City
PCCP Studio City
Total 2.38%
6 Area 3 80,724,320 2,00%
2 Area 3 2,506,278 0.06%
8 83,230,598 2.06%
(14,332,386)
(14,332,386)
5 SY Culver City Portfolio LP
6 Fox Hills Mall LLC
7 CRP Pacifica Plaza LP
8
Culver Center Partners East
9 Legacy III Culver City LLC
10 Target Jefferson
Target Corporation DBA
2.05%
2.01%
1.90%
1.85%
1.62%
(8,341,495)
(8,341,495)
$(71,552,754)
1.34%
0.03%
1 .37%
32.49%
Major Taxable Property Owners
Major Owners List.
The following table lists the ten largest property owners in the Project Area as of the date of this Official Statement
based on the records of the County Assessor's office and information compiled by Agency staff.
TABLE 3
Ten Largest Assessees
Fiscal Year 2010-11 Values
Component Areas 1, 2, 3 and 4
Culver City Redevelopment Agency
No. of Component % of Total
Parcels Area 201011 Value Project Value (I)
2 Area 3 $266,547,820 6.59%
1 Area 3 90,493,617 2.24%
7 Area 3 88,095,062 2.18%
10 4 445,136,499 11.01%
1 Area 1 100,773,238 2.49%
1 Area 1 22,880,525 0.57%
2 123,653,763 3.06%
Office
Regional Shopping Ctr, Vacant
Office, Hotel, Vacant, Parking
Shopping Center, Auto
Service, Pkg, Vacant
Office, Parking
Neighborhood Shopping Ctr
Unsecured
Total
TOTALS
1 Area 3 71,831,655 1.78%
12 Area 1 ' 70,346,849 1.74%
5 Area 1 66,290,000 1.64%
28 Area 3 64,617,017 1.60%
2 Area 1 56,510,000 1.40%
1 Area 2 46,707,041 1.15%
1 Area 2 1,148,445 0.03%
2 . 47,855,486 1.18%
$1,136,311,867 28.09%
(1) Based upon reported FY 2010-11 Project Area secured and unsecured value of $4,044,598,470.
(2) Based upon reported FY 2010-11 Project Area incremental assessed value of $3,497,126,858.
Source: Keyser Marston Associates, Inc.
20
---1 Discussion of Top Three Ownership Interests.
The following discussion summarizes
information regarding the three owners of land with the highest assessed value in the Project Area.
Sony Corporation. The global operations of Sony Pictures Entertainment, Inc. ("SPE"),
encompass motion picture production and distribution, television programming and syndication, home
video acquisition and distribution, operation of studio facilities, development of new entertainment
technologies and distribution of filmed entertainment world-wide. Its affiliated companies own or control
the three properties with the highest assessed value in the Project Area. Lot Inc. is the record owner of
the main studio lot and the four acre Thalberg Office Building parcel and adjacent parking lot, all of
which were originally a portion of the original motion picture production and office facilities of Metro-
Goldwyn-Mayer Film Company. Lot Inc. is an affiliated company of Sony Corporation of America.
In December 1989, Lot Inc. acquired the main studio lot, which includes a variety of movie
production and recording studios that today represent one of the most complete filmmaking facilities in
Southern California. SPE uses the site as its headquarters and locus for film production activities. Sony
and its divisions, Columbia Tri-Star Motion Picture Group, Columbia Tri-Star Home Entertainment,
Columbia Tri-Star Domestic Television and Columbia Tri-Star International Television, are presently
-operating on the site.
The Filrnland Corporate Center, the largest single building in the downtown area, is the result of a
disposition and development agreement between the Agency and Filmland Development, Inc. (the third
largest assessee in the Project Area). Completed in March 1986, the U-shaped building, consisting of
eight stories and a three-level underground parking structure for 1,100 vehicles, provides 320,000 square
feet of space. Located immediately east of the main studio facilities, the Filmland Corporate Center (now
called Sony Pictures Plaza) is now occupied by SPE under a long-term lease.
Symantec CORP: Syraantec Corporation provides security, storage and systems management
solutions to help businesses and consumers secure and manage their information. Symantec Corporation
owns 900 Corporate Pointe, which totals 285,675 square feet, and is owner-occupied. Symantec
Corporation is the largest maker of security software for computers and is a Fortune 500 company and a
member of the S&P 500 stock market index.
Transwestem Corporate Pointe: Transwestem Corporate Pointe owns 600 Corporate Point, a
Class A, 12-story office tower containing approximately 273,339 square feet of multi-tenant space. Sony
is the largest tenant, housing their accounting and information technology business units.
Appeals by Major Owners. As shown in the table below, certain major taxpayers have appealed
portions of their property assessments. Property owners with pending assessment appeals are shown
above with their pre-appeal valuations. Based upon estimates provided by the Agency, the Fiscal
Consultant has included an estimate of the reduction resulting from resolved and pending appeals in the
projection of Tax Revenues presented in "Projected Tax Revenues." See "APPENDIX H - Fiscal
Consultant Report."
Property Owner
TOE Filmland
Sony
Transwestern Corporate Pointe
PCCP Studio City
Target Jefferson
Source: Keyser Marston Associates, Inc.
Estimated Appeal Reduction
$16,161,420
13,636,703
19,080,750
14,332,386
8,341,495
21 Likelihood of Future Concentration of Ownership.
The last dates to receive tax increment
revenue from Component Areas Nos. 1 and 2 are July 26, 2024 and December 28, 2024, respectively,
meaning that tax increment revenue derived from those Component Areas will become unavailable to the
Agency prior to the maturity date of the Bonds. See "—Redevelopment Plan Limitations" above. The
three largest property owners in the Project Area (all of which are affiliated with Sony), currently
representing a total of 11.01% of total (secured and unsecured) taxable value in the Project Area, are
located in Component Area No. 3. Therefore, the concentration of taxable property ownership on these
three Sony-affiliated entities is likely to increase significantly after fiscal year 2024-25 (the final maturity
date of the 2011 Bonds is November 1, 20 ). See "RISK FACTORS – Future Limits on Receiving Tax
Increment."
Existing Land Ownership, Land Use and Current Development
See "APPENDIX B – Property Ownership in the Project Areas" for a discussion of existing land
ownership, land use and current development in the Project Areas.
Statutory Pass Through Requirements
Debt service on the Bonds is subject to the statutory pass-through requirements, as follows. The
Projected Tax Revenue tables set forth in this Official Statement (Table S and Table 9) assume that the
amount of Tax Revenues available to pay debt service reflects the prior payment of the pass-through
payments from tax increment generated in the Project Area.
Component Areas Nos. 1, 2 and 3. On November 23, 1998, the Agency approved technical
amendments to the redevelopment plans for Component Areas Nos. 1, 2 and 3, which extended the time
limits for establishing debt. As a result, the Agency is required to allocate the statutory pass-through to
the affected taxing entities commencing in the first fiscal year following the one in which one or more of
the limitations amended in 1998 would have otherwise taken effect. For each of Component Areas No. 1,
2 and 3, the statutory pass-through commenced in Fiscal Year 2004-05 according to the following
formulas (except for payments to the Culver City Unified School District (the "School District") with
respect to Component Area No. 2, which will be made through the subordination agreement described
under "– Tax Sharing Agreement" below):
(a)
From Fiscal Year 2004-05 through Fiscal Year 2013-14, the Agency will pay affected taxing
agencies an amount equal to 25% of the tax increment received by the Agency in excess of the
Fiscal Year 2003-04 adjusted base value (net of the 20% required to be deposited into the Low
and Moderate Income Housing Fund).
(b)
Commencing in Fiscal Year 2014-15, the Agency will pay affected taxing agencies, in
addition to the amount specified in (a) above, an amount equal to 21% of the tax increment in
excess of the Fiscal Year 2013-14 adjusted base value (net of the 20% required to be deposited
into the Low and Moderate Income Housing Fund).
Component Area No. 4. Component Area No. 4 is subject to the statutory pass-through
requirements providing for the following specific formulas for payment by the Agency to affected taxing
entities:
(a) "Tier One": From the first fiscal year through the last fiscal year in which the Agency
receives tax increment from Component Area No. 4, the Agency will pay affected taxing agencies
an amount equal to 25% of the tax increments received by the Agency (net of the 20% required to
be deposited into the Agency's Low and Moderate Income Housing Fund).
22
S't (b) "Tier Two": From the eleventh fiscal year through the last fiscal year in which the Agency
receives tax increment from Component Area No. 4, the Agency will pay affected taxing
agencies, in addition to the amount specified in (a) above, an amount equal to 21% of the tax
increment which are in excess of the values in Component Area No. 4 in the tenth fiscal year (net
of the 20% required to be deposited into the Low and Moderate Income Housing Fund).
(c) "Tier Three": From the thirty-rust fiscal year through the last fiscal year in which the Agency
receives tax increments, the Agency will pay affected taxing agencies, in addition to the amount
specified in (a) and (b) above, an amount equal to 14% of the tax increments received by the
Agency from Component Area No. 4 which are in excess of the values in Component Area No. 4
in the thirtieth fiscal year (net of the 20% required to be deposited into the Low and Moderate
Income Housing Fund).
Tax Sharing Agreement
In 1990 the Agency, the City and the School District entered into a Third Amended Agreement
for the Overland-Jefferson Redevelopment Project No. 2 (the "Subordination Agreement"), effective
March 27, 1990. Under the Subordination Agreement, the Agency agreed to make certain annual
payments to the School District, and the School District agreed that all such annual payments made on
and after September 30, 1994, would be subordinate to the following:
(i) the Agency's bonded indebtedness as of the date of the Subordination Agreement,
(ii) future indebtedness for refunding such bonded indebtedness in amnia] amounts not to exceed
the then-current annual debt service, and
(iii) the Agency's sale of new, non-refunding tax allocation bonds;
provided, however, that the Agency agreed it would not incur any indebtedness for such bonds
when it is reasonably foreseeable such indebtedness would impair the Agency's obligations under the
Subordination Agreement. Failure by the Agency to size such new bonds in the manner required by the
Subordination Agreement constitutes a material breach of the Subordination Agreement.
Payments by the Agency under the Subordination Agreement are also subordinate to the
Agency's annual administrative costs for Component Area No. 2, the Agency's programs/projects set
forth in the cash flow analysis for Component Area No. 2, dated March 13, 1990, and the Agency's
retention of an annual balance of $1 million for Component Area No. 2.
Low and Moderate Income Housing
Legal Requirements. The Redevelopment Law generally requires redevelopment agencies to set
aside 20% of all tax increment revenues derived from redevelopment project areas in a low and moderate
income housing fund.
Deferred Set-Aside Payments. During fiscal years 1985-86 through 1995-96, pursuant to Section
33334.6 of the Redevelopment Law, the Agency made the required findings to defer certain of its low and
moderate income housing deposit requirements. As of June 30, 2010, the Agency had deferred the
payment of $33,944,195 (including interest). This obligation will be repaid from tax increment revenues
in future years after certain existing obligations and bonded indebtedness (including the Bonds) are
repaid.
23 Senior 1993 Loan Agreements
Parity 1999 Series A Bonds
Parity 2002 Bonds
Parity 2004 Bonds
Parity 2005 Bonds
51.4%
30.0
0.0
51.4
70.5
Senior 1993 Loan Agreements
Parity 1999 Series A Bonds
Parity 2002 Bonds
Parity 2004 Bonds
Parity 2005 Bonds
0.3
0.0
8.0 declining to 4.0
0.4%
8 .0%
Priority of Senior Set-Aside Obligations.
The obligation of the Agency under the
Redevelopment Law to set aside moneys for low and moderate income housing activities is subordinate to
the Agency's obligation to make principal and interest payments on certain obligations created prior to
January 1, 1986 ("Senior Set-Aside Obligations"). Obligations incurred on or after January 1, 1986 are
deemed obligations created prior to January 1, 1986 if the net proceeds are used to refinance Senior Set-
Aside Obligations.
Set forth below is a table identifying the portions of the Senior 1993 Loan Agreements and the
Parity Bonds that constitute Senior Set-Aside Obligations:
Portion Constituting Senior
Obligation Set-Aside Obligations
Amounts Available From Low and Moderate Income Housing Fund to Pay Debt Service on
the Senior 1993 Loan Agreements and the Parity Bonds.
Under the Redevelopment Law, the Agency
must use amounts deposited in the Low and Moderate Income Housing Fund to increase, improve, and
preserve the supply of low .and moderate income housing within the jurisdiction of the Agency. Because
a portion of the 1989 Bonds was used to finance or refinance low and moderate income housing projects,
debt service on a portion of the Senior 1993 Loan Agreements and the Parity Bonds is payable from the
Low and Moderate Income Housing Fund.
Set forth below is a table identifying the portions of the debt service on the Senior 1993 Loan
Agreements and the Parity Bonds that are payable from the Low and Moderate Income Housing Fund.
Portion Payable from the Low and Moderate
Obligation and Income Housing Fund
TAX REVENUES
Historic Assessed Value and Tax Revenues
Set forth in the table below is a summary of the historical assessed values in the Project Area for
the current and five prior fiscal years. Between fiscal year 2005-06 and fiscal year 2010-11, total secured
and unsecured assessed values in the Project Area increased approximately 8.42%.
24 Table 4
Historic Project Area Assessed Values
Component Areas 1, 2, 3 and 4
Secured (1):
Land
Improvements
Personal Property
Exemptions
Total Secured
Unsecured (1) :
Land
Improvements
Personal Property
Exemptions
Total Unsecured
Project Area
Value (1):
Land
Improvements
Personal Property
Exemptions
Total Project Area
2005-06
$1,285,902,809
1,367,260,617
16,691,451
68,080,298
2,601,774,579
1,285,902,809
1,463,029,429
246,923,853
69,209,398
$2,926,646,693
2006-07
$1,415,673,859
1,419,646,804
9,997,568
79,463,078
2,765,855,153
1,415,673,859
1,517,573,364
264,406,676
81,549,778
$3,116,104,121
2007-08
$1,642,530,419
1,545,119,355
10,734,701
68,965,889
3,129,418,586
1,642,530,419
1,645,686,476
287,692,765
73,084,389
$3,502,825,271
2008-09
$1,845,194,390
1,644,286,815
5,046,003
78,619,358
3,415,907,850
1,845,194,390
1,755,585,991
319,421,026
80,522,231
$3,839,679,176
2009-10
$1,888,626,801
1,907,741,393
10,542,404
83,997,597
3,722,913,001
1,888,819,481
2,027,408,462
331,470,913
86,390,144
$4,161,308,712
2010-11
$1,890,444,895
1,853,204,743
13,236,204
110,123,492
3,646,762,350
1,890,444,895
1,966,758,488
299,713,001
112,317,914
$4,044,598,470
0 0 0 0 192,680 0
95,768,812 97,926,560 100,567,121 111,299,176 119,667,069 113,553,745
230,232,402 254,409,108 276,958,064 314,375,023 320,928,509 286,476,797
1,129,100 2,086,700 4,118,500 1,902,873 2,392,547 2,194,422
324,872,114 350,248,968 373,406,685 423,771,326 438,395,711 397,836,120
(1) SoUrce: Los Angeles County Auditor-Controller; Compiled by Keyser Marston Associates, Inc.
25
C2_ Tax Increment
Gross Tax Increment
Unitary Tax Revenue
Total Computed Levy
23,972,301
375,875
24,348,176
25,864,160
373,453
26,237,613
• 29,753,493
373,453
30,126,946
33,168,794
373,453
36,373,105
373,453
33,542,247 36,746,558
The following table shows, for each of the most recent five fiscal years: (i) reported assessed
values, (ii) incremental taxable value and total tax levy, (iii) actual receipts of tax increment, and (iv)
delinquency rate (i.e., the percentage of current year collections relative to the amount levied). The
County has not elected to follow the procedures of Sections 4701 et seq. of the California Revenue and
Taxation Code, known as the "Teeter Plan" as to general taxes entered and collected on the secured tax
roll. Therefore, property tax revenues in the Project Area reflect actual collections.
TABLE 5
Historic Incremental Values and Tax Receipts
Component Areas 1, 2, 4 and 4
Secured (1)
Unsecured (1)
2005-06 2006-07 2007-08 2008-09 2009-10
$2,601,774,579 $2,765,855,153 $3,129,418,586 $3,415,907,850 $3,722,913,001
324,872,114 350,248,968 373,406,685 423,771,326 438,395,711
Total Project Value
Less Base Value (1)
Incremental Value
Averaged Tax Rate
2,926,646,693
(543,621,579)
2,383,025,114
1.0059550%
3,116,104,121
(543,621,579)
2,572,482,542
1.0054163%
3,502,825,271
(543,504,544)
2,959,320,727
1.0054163%
3,839,679,176
(540,668,301)
3,299,010,875
1.0054163%
4,161,308,712
(543,592,594)
3,617,716,118
1.0054163%
Tax Allocation (2 '
Secured Tax Increment
Unsecured Tax Increment
Unitary Tax Revenue
Total Annual Tax Increment
Computed Levy Variance
% Collections
21,685,365
2,127,766
376,081
24,189,211
(158,964)
9935%
22,648,647
2,325,672
373,453
25,347,771
(889,841)
96.61%
26,244,495
2,522,647
388,957
29,156,099
(970,847)
96.78%
28,436,867 32,262,175
2,799,096 3,060,155
420,415 408,009
31,656,378 35,730,338
(1,885,868) (1,016,219)
94.38% 97.23%
(1) Amounts shown as reported by the Los Angeles County Auditor-Controller in August of each fiscal year.
(2) Source: Los Angeles County Auditor-Controller year-end remittance advice summaries. Amounts represent the annual tax
increment revenues allocable to the Agency and do not include administrative fees, supplemental taxes, adjustments by the
County Auditor-Controller and pass-through payments.
Source: Keyser Marston Associates, Inc.
Based on the table above, the average rate of collections for fiscal years 2005-06 through 2009-10
was approximately 96.87%.
Appeals of Assessed Values
General. Pursuant to California law, property owners may apply for a reduction of their property
tax assessment by filing a written appeal. After the applicant and the assessor have presented their
arguments, the applicable local appeals board makes a final decision on the proper assessed value. The
appeals board may rule in the assessor's favor, rule in the applicant's favor, or set its own opinion of the
26 proper assessed value, which may be more or less than either the assessor's opinion or the applicant's
opinion.
Any reduction in the assessment ultimately granted applies to the year for which the application is
made and may also affect the values in subsequent years. Refunds for taxpayer overpayment of property
taxes may include refunds for overpayment of taxes in years after that which was appealed. Current year
values may also be adjusted as a result of a successful appeal of prior year values. Any taxpayer payment
of property taxes that is based on a value that is subsequently adjusted downward will require a refund for
overpayment.
Appeals for reduction in the "base year" value of an assessment, if successful, reduce the
assessment for the year in which the appeal is taken and prospectively thereafter. The base year is
determined by the completion date of new construction or the date of change of ownership. Any base
year appeal must be made within four years of the change of ownership or new construction date. A base
year assessment appeal has significant future revenue impacts because a reduced base year assessment
will then reduce the compounded value of the property prospectively. Except for the 2% inflation factor,
the value of the property cannot be increased until a change of ownership occurs or additional
improvements are added.
Section 51 of the Revenue and Taxation Code permits a reduction in the assessed value if the full
cash value of the property has been reduced by damage, destruction, depreciation, obsolescence, removal
of property or other factors causing a decline in value. Significant reductions have taken place in some
counties due to declining real estate values. Reductions made under this code section may be initiated by
the County Assessor or requested by the property owner.
After a roll reduction is granted under this section, the property is reviewed on an annual basis to
determine its full cash value and the valuation is adjusted accordingly. This may result in further
reductions or in value increases. Such increases must be in accordance with the full cash value of the
property and it may exceed the maximum annual inflationary growth rate allowed on other properties
under Article MITA of the State Constitution. Once the property has regained its prior value, adjusted for
inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article
MITA. See "LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING LIMITATIONS —
Property Tax Limitations-Article XIIIA" below.
The taxable value of unitary property may be contested by utility companies and railroads to the
State Board of Equalization. Generally, the impact of utility appeals is on the statewide value of a utility
determined by the State Board of Equalization_ As a result, the successful appeal of a utility may not
impact the taxable value of a project area but could impact a project area's allocation of unitary property
tax revenues.
Historic Appeals. The Agency has provided appeal information for the period from fiscal year
2004-05 to fiscal year 2009-10 from the Los Angeles County Assessment Appeals Board database. The
table below shows a history of appeals in the Project Area. See "APPENDIX H — Fiscal Consultant
Report" for more information about appeals in the Project Area.
27
t-fc TABLE 6
History of Appeals in Project Area
Resolved
Fiscal Total Appeals/No
Year Appeals(1) Reduction(2)
2009-10 113 79
2008-09 113 90
2007-08 54 49
2006-07 45 32
2005-06 50 31
2004-05 70 51
Successful
Appeals/With
Reduction
34
23
5
13
19
19
Percent
Successful/With
Reduction
30%
20
9
29
38
27
Contested
Original Value
$252,056,375
480,601,944
431,389,046
292,690,230
447,232,616
227,485,526
Successful
Appeal Value
Loss
$(14,767,975)
(4,886,809)
(237,962)
(20,011,022)
(29,439,330)
(18,398,220)
Percent of
Original
Value
5.86%
1.02
0.06
6.84
6.58
8.09
(1) Excludes any appeals with an "open" status designation, i.e., unresolved appeals as of the date of the database.
(2) Appeals that were denied or deemed invalid by the Appeals Board, withdrawn, or applicant failed to appear.
Source: Keyser Marston Associates, Inc.
Projected Appeals and Valuation Reductions. In projecting Tax Revenues for future fiscal years,
the Fiscal Consultant Report (see Appendix H) assumed the following:
1. $2,343,000 of tax refunds in fiscal year 2010-11.
2 Secured values would be incrementally reduced by a total of $116.8 million in fiscal year
2011-12 and unsecured values would be incrementally reduced by $37.9 million in fiscal year 2011-12.
The Fiscal Consultant Report made the following assumptions to calculate these projections:
1. If the parcel assessment was reduced by prior stipulation or Appeals Board action, the
contested value was reduced to the reported resolved value.
2. If the applicant, in prior fiscal year appeal filings, withdrew an appeal or failed to appear
for a scheduled hearing or was denied the appeal request by the Appeals Board, it was assumed that the
same would occur with respect to the open appeals being filed by the applicant.
For all other appeal records, the following assumptions listed below were incorporated in the
analysis.
3. For contested Secured property values less than $1 million, a reduction to the greater of
either the applicant's opinion of value or 86% of the contested value was used (the 14% reduction was
determined from the average percentage reduction experienced by a sampling of 71 stipulated secured
appeals in the Project Area).
4. For contested Secured property values greater than $1 million, a reduction equal to the
greater of either the applicant's opinion of value or 82% of the contested value was used (the 18%
reduction was determined from the average percentage reduction experienced by a sampling of 31
stipulated secured appeals in the Project Area).
5. For contested Unsecured property values, a reduction equal to the greater of either the
applicant's opinion of value or 85% of the contested value was used (the 15% reduction was determined
28 from the average percentage reduction experienced by a sampling of 10 stipulated unsecured appeals in
the Project Area).
The Fiscal Consultant Report also reports that, for fiscal years 2004-05 through fiscal year 2009-
10, properties that were the subject of assessment appeal filings in the Redevelopment Project only
experienced an overall average net secured value reduction of 2.7% and an overall average net unsecured
value reduction of 8.8%.
See APPENDIX H — "Fiscal Consultant Report" for further information.
Projected Tax Revenues
The tax increment revenue projections for the Project Area, as prepared by Keyser Marston
Associates, are summarized in the table below. These projections are based upon the following
assumptions:
Assessed Values
• The projections are based on the actual 2010-11 fiscal year and base year assessed real property
values reported by the County Auditor-Controller, increased in fiscal year 2011-12 by 0.75% and in fiscal
year 2012-13 and thereafter, by the application of the maximum annual inflationary factor allowed under
Proposition 13 (a maximum of 2% per year), plus any anticipated values added from new developments
identified by Agency staff (see Appendix B). .
• In projecting Tax Revenues for future fiscal years, the Fiscal Consultant Report (see Appendix
H) assumed (i) there would be a $2,343,000 tax refund in fiscal year 2010-11, (ii) secured values would
be incrementally reduced by a total of $116.8 million in fiscal year 2011-12 and (iii) unsecured values
would he incrementally reduced by $37.9 million in fiscal year 2011-12. The Fiscal Consultant Report
made no assumptions about reductions in future years. See "— Appeals of Assessed Values" above.
• Future personal property values are assumed to stabilize at the previous year's level.
• Because the City's projections of future new developments occurring in the Project Area do not
contain specific completion months (making an annual supplemental tax estimate difficult to project), for
purposes of the projections below, the Fiscal Consultant has not included any revenues in the tax
increment projection resulting from future supplemental assessments.
Net Tax Increment Revenues
• The tax rate is assumed to be 1.0037%.
• It is assumed the Agency will collect 100% of tax increment allocated to the Agency (see
"Historic Assessed Value and Tax Revenues" above).
• Net tax increment revenues shown below represent the gross tax increment revenue less the sum
of the County's collection fee authorized under SB 2557, which is assumed to continue in subsequent
years at a factor of approximately 1.6% of gross tax increment revenue_
• Net tax increment revenues shown below also reflect a deduction for statutory pass-through
payments required under AB 1290.
29 •The projections deduct from tax increment revenues the full 20% required Low and Moderate
Income Housing Set-Aside, but then add back a portion of the set-aside the Agency may use to pay debt
service on the Senior 1993 Bonds, the Parity 1999 Series A Bonds, the Parity 2004 Bonds and the Parity
2005 Bonds (which corresponds to the proportion of the proceeds of such bonds that were used to finance
low- and moderate-income housing activities). See "THE CULVER CITY REDEVELOPMENT
PROJECT — Low and Moderate Income Housing."
• The Agency was required to make a SERAF payment to the County Auditor- Controller totaling
$10,946,277 in fiscal year 2009-10; the Agency currently expects to be obligated to make a fiscal year
2010-11 SERAF payment of $2,251,463. Because the SERAF obligation may be paid from any revenue
source available to the Agency, the obligation is not incorporated into the projeCtions below. See "RISK
FACTORS — State Budget Issues."
- According to the County Auditor-Controller, the Agency should receive nearly $407,000 in
unitary tax revenues in Fiscal Year 2010-11. For purposes of the projections, it is assumed that the
unitary tax revenues will stabilize at this amount in subsequent fiscal years.
• Reassessments of a property's assessed value are authorized upon a change of ownership or
completion of new construction. Supplemental taxes are pro rated by the number of months that remain in
the fiscal year. For purposes of the projections, it is assumed that the Agency will not receive any
supplemental assessments in the future.
30 TABLE 8
Tax Increment Revenue Projections - Growth
Component Areas 1, 2,3 and 4
($000's Omitted)
Reported Projected Projected Projected Projected Projected
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Real Property Value $3,633,147 $3,633,147 $3,730,992 $3,884,472 $,306,920 $4,606,872
Estimated Appeal Value Reduction -- (116,830) -- -- -- --
Prop 13 Inflationary Growth -- 26,372 74,620 77,689 86,138 92,137
New Development -- 188,302 78,861 344,758 213,814 --
Total Real Property Value 3,633,147 3,730,992 3,884,472 4,306,920 4,606,872 4,699,009
Personal Property 411,451 411,451 373,510 373,510 373,510 373,510
Estimated Appeal Value Reduction -- (37,941) -- -- -- --
Total Personal Property Value 411,451 373,510 373,510 373,510 373,510 373,510
Total Project Value 4,044,598 4,104,502 4,257,982 4,680,430 4,980,382 5,072,520
Less Base Value (547,472) (547,472) (547,472) (547,472) (547,472) (547,472)
Incremental Value 3,497,127 3,557,030 3,710,511 4,132,958 4,432,911 4,525,048
,
Gross Tax Revenue 35,101 35,702 37,242 41,482 44,493 45,418
Unitary Tax Revenue 407 407 407 407 407 407
County Admht Charge (-1.60%) (568) (584) (609) (678) (727) (742)
Estimated Appeal Refund (2,343) -- -- -- __ --
Statutory Pass-Through(l) - ' (2,759) ' (2,893) (3,246) (4,207) (5,231) (5,538) '
Annual Net Housing Set Aside (2) (6,393) (6,513) (6,821) (7,670) (8,271) (8,457)
Net Tax Increment for Bonds (3) 23,445 26,119 26,973 29,336 30,672 31,089
2010-11 SERAF Payment (2,251) -- -- -- -- --
Culver City USD Pass Through (1) (1,569) (1,581) (1,613) (1,646) (1,679) (1,713)
Housing Fund Repayment - SERAF) (4) (2,550) (2,550) (2,550) (2,550) (2,550) (350)
Net Tax Increment Remaining 17,075 21,988 22,810 25,140 26,443 29,027
(1) For Component Area No. 2, the pass-through obligation with the Culver City Unified School District is subordinate to Agency bonded
indebtedness pursuant to the Subordination Agreement. The Component Area No. 2 statutory pass-through calculation excludes 24.31%
representing the School District, The Tier 2 and 3 statutory pass-through payments exclude 13% representing the City General Fund Share.
(2) Equal to the amount projected to be deposited into the Low and Moderate Income Housing Fund, i.e., 20% of projected gross tax increment less
the amount projected to be available to pay debt service.
(3) Equal to the amount of tax increment projected to be available to pay debt service on the Senior 1993 Bonds, the 2011 Bonds, the Parity 2005
Bonds, the Parity 2004 Bonds, the Parity 2002 Bonds and the Parity 1999 Series A Bonds. See Table 10 for a projected coverage table.
(4) The Agency borrowed moneys from the Housing Fund to pay the SERAF obligation. The Agency anticipates repaying such borrowing from
tax increment revenues over a five year period through 2015-16.
Source: Keyser Marston Associates, Inc.
31 TABLE 9
Tax Increment Revenue Projections - No Growth
Component Areas 1, 2, 3 and 4
($000's Omitted)
Reported Projected Projected Projected Projected Projected
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Real Property Value $3,633,147 $3,633,147 $3,516,317 $3,516,317 $3,516,317 $3,516,317
Estimated Appeal Value Reduction -- (116,830) -- -- -- --
Prop 13 Inflationary Growth -- -- -- -- -- --
New Development -- -- -- -- -- --
Total Real Property Value 3,633,147 3,516,317 3,516,317 3,516,317 3,516,317 3,516,317
Personal Property 411,451 411,451 373,510 373,510 373,510 373,510
Estimated Appeal Value Reduction -- (37,941) -- -- -- --
Total Personal Property Value 411,451 373,510 373,510 373,510 373,510 373,510
Total Project Value
Less Base Value
Incremental Value
4,044,598 3,889,827 3,889,827 3,889,827 3,889,827 3,889,827
(547,472) (547,472) (547,472) (547,472) (547,472) (547,472)
3,497,127 3,342,356 3,342,356 3,342,356 3,342,356 3,342,356
Gross Tax Revenue 35,101 33,547 33,547 33,547 33,547 33,547
Unitary Tax Revenue 407 407 407 407 407 407
County Admin Charge (-1.60%) (568) (549) (549) (549) (549) (549)
Estimated Appeal Refund (2,343) -- -- -- -- --
Statutory PasS-Thrbugh (1) - • (2,759) (2;460) (2,460) (2,460) ' (2,460) (2,460)
Annual Net Housing Set Aside (2) (6,393) (6,082) (6,082) (6,083) (6,082) (6,082)
Net Tax Increment for Bonds (3) 23,445 24,863 24,863 24,863 24,864 24,863
2010-11 SERAF Payment (2,251) -- -- -- -- --
Culver City USD Pass Through (1) (1,569) (1,570) (1,570) (1,570) (1,570) (1,570)
Housing Fund Repayment - SERAF(4) (2,550) (2,550) (2,550) (2,550) (2,550) (350)
Net Tax Increment Remaining 17,075 20,744 20,744 20,743 20,744 22,944
(1) For Component Area No. 2, the pass-through obligation with the Culver City Unified School District is subordinate to Agency bonded
indebtedness pursuant to the Subordination Agreement. The Component Area No. 2 statutory pass-through calculation excludes 24.31%
representing the School District. The Tier 2 and 3 statutory pass-through payments exclude 13% representing the City General Fund Share.
(2) Equal to the amount projected to be deposited into the Low and Moderate Income Housing Fund, i.e., 20% of projected gross tax increment less
the amount projected to be available to pay debt service.
(3) Equal to the amount of tax increment projected to be available to pay debt service on the Senior 1993 Bonds, the 2011 Bonds, the Parity 2005
Bonds, the Parity 2004 Bonds, the Parity 2002 Bonds and the Parity 1999 Series A Bonds. See Table 11 for a projected coverage table.
(4) The Agency borrowed moneys from the Housing Fund to pay the SERAF obligation. The Agency anticipates repaying such borrowing from
tax increment revenues over a five year period through 2015-16.
Source: Keyser Marston Associates, Inc.
32 Estimated Debt Service Coverage
The following table shows projected debt service coverage ratios based on (i) estimated tax
increment available to pay debt service, using a growth scenario, on the Senior 1993 Bonds, the 2011
Bonds, the Parity 2005 Bonds, the Parity 2004 Bonds, the Parity 2002 Bonds and the Parity 1999 Series A
Bonds (see Table 9) from the Project Area and (ii) the combined debt service on the Senior 1993 Bonds,
the 2011 Bonds, the Parity 2005 Bonds, the Parity 2004 Bonds, the Parity 2002 Bonds and the Parity
1999 Series A Bonds. Debt service on the outstanding Senior 1993 Bonds is payable by the Agency from
tax increment on a senior basis to the 2011 Bonds, the Parity 2005 Bonds, the Parity 2004 Bonds, the
Parity 2002 Bonds and the Parity 1999 Series A Bonds.
TABLE 10
Culver City Redevelopment Project
Estimated Debt Service Coverage - Growth *
($000s)
Senior 1993 Bonds Proposed Total Estimated
Net Tax and Parity Bonds 2011 Debt Estimated Debt Service
Fiscal Year Increment (1) Debt Service Service* Debt Service* Coverage*
2010-11 23,445 13,976 1,901 15,877 1.48x
2011-12 26,119 13,969 2,920 16,889 1.55
2012-13 26,973 13,976 2,913 16,890 1.60
2013-14 29,336 13,979 5,912 19,890 1.47
2014-15 30,672 . 13,972 , 5,921 . 19,892 . 1.54
2015-16 31,089 13,969 5,922 19,891 1.56
2016-17 31,715 13,972 5,920 19,892 1.59
2017-18 32,154 13,971 5,917 19,888 1.62
2018-19 32,602 13,974 5,918 19,891 1.64
2019-20 33,059 13,973 5,917 19,890 1.66
2020-21 33,525 13,972 5,920 19,892 1.69
2021-22 34,000 13,701 6,190 19,891 1.71
202223 34,164 13,632 5,999 19,630 1.74
2023-24 34,559 13,838 5,713 19,550 1.77
2024-25 34,794 7,785 11,553 19,338 1.80
2025-26 20,302 9,435 9,435 2.15
2026-27 18,156 8,130 8,130 2.23
2027-28 18,438 8,130 8,130 2.27
(1) See Table 8, growth scenario.
(2) Debt service for Senior 1993 Bonds, Parity 1999 Series A Bonds, Parity 2002 Bonds, Parity 2004 Bonds and Parity 2005 Bonds.
Source: Stone & Youngberg.
* Preliminary; subject to change.
33 The following table shows projected debt service coverage ratios based on (i) estimated tax
increment available to pay debt service, using a no growth scenario, on the Senior 1993 Bonds, the 2011
Bonds, the Parity 2005 Bonds, the Parity 2004 Bonds, the Parity 2002 Bonds and the Parity 1999 Series A
Bonds (see Table 9) from the Project Area and (ii) the combined debt service on the Senior 1993 Bonds,
the 2011 Bonds, the Parity 2005 Bonds, the Parity 2004 Bonds, the Parity 2002 Bonds and the Parity
1999 Series A Bonds.
Debt service on the outstanding Senior 1993 Bonds is payable by the Agency from
tax increment on a senior basis to the 2011 Bonds,
the Parity 2005 Bonds, the Parity 2004 Bonds, the
Parity 2002 Bonds andihe Parity 1999 Series A Bonds.
TABLE 11
Culver City Redevelopment Project
Estimated Debt Service Coverage - No Growth
($000s)
Senior 1993 Bonds Proposed Total Estimated
Net Tax and Parity Bonds 2011 Debt Estimated Debt Service
Fiscal Year Increment (1) Debt Service Service* Debt Service* Coverage*
2010- 11 23,445 13,976 1,901 15,877 1.48x
2011-12 24,863 13,969 2,920 16,889 1.47
2012-13 24,863 13,976 2,913 16,890 1.47
2013-14 24,863 13,979 5,912 19,890 1.25
2014-15 24,863 13,972 5,921 19,892 1.25
2015-16 24,863 13,969 5,922 19,891 1.25
2016-17 24,863 , 1,3,972 5,920 19,892
. 1.25
2017-18 24,863 13,971 - 5,917 19,888 1.25
2018-19 24,863 13,974 5,918 19,891 1.25
2019-20 24,863 13,973 5,917 19,890 1.25
2020-21 24,863 13,972 5,920 19,892 1.25
2021-22 24,863 13,701 6,190 19,891 1.25
2022-23 24,540 13,632 5,999 19,630 1.25
2023-24 24,441 13,838 5,713 19,550 1.25
2024-25 24,172 7,785 11,553 19,338 1.25
2025-26 14,069 9,435 9,435 1.49
2026-27 12,118 8,130 8,130 1.49
2027-28 12,118 8,130 8,130 1.49
(3) See Table 9, no growth scenario.
(4) Debt service
for Senior 1993 Bonds, Parity 1999 Series A Bonds, Parity 2002 Bonds, Parity 2004 Bonds and Parity 2005 Bonds.
Source: Stone & Youngberg.
To estimate the revenues available to pay debt service on the 2011 Bonds, the Agency has made
certain assumptions with regard to the assessed valuation in the Project Area, future tax rates and
percentage of taxes collected. The Agency believes these assumptions to be reasonable, but to the extent
that the assessed valuation, the tax rates or the percentage of taxes collected are less than the Agency's
assumptions, the Tax Revenues available to pay debt service on the 2011 Bonds will, in all likelihood, be
less than those projected.
No assurance can be given that the projections shown above will be met.
The 2011 Bonds were sized in conformance with the test for issuing additional bonds set forth in
the Indenture (see "SECURITY FOR THE 2011 BONDS - Issuance of Additional Bonds"), and
accounting for the projected loss of tax increment revenues from Component Areas Nos. 1 and 2 after
fiscal year 2024-25 (see "THE CULVER CITY REDEVELOPMENT PROJECT - Redevelopment Plan
Limitations" and "- Major Taxable Property Owners").
* Preliminary; subject to change.
34
t RISK FACTORS
The following information should be considered by prospective investors in evaluating the 2011
Bonds. However, the following does not purport to be an exhaustive listing of risks and other
considerations which may be relevant to investing in the 2011 Bonds. In addition, the order in which the
following information is presented is not intended to reflect the relative importance of any such risks.
Reduction in Taxable Value
Tax Revenues allocated to the Agency are determined by the amount of incremental taxable value
in the Project Area allocable to the Project Area and the current rate or rates at which property in the
Project Area is taxed. The reduction of taxable values of property caused by economic factors beyond the
Agency's control, such as a relocation out of the Project Area by one or more major property owners, or
the transfer, pursuant to California Revenue and Taxation Code Section 68, of a lower assessed valuation
to property within the Project Area by a person displaced by eminent domain or similar proceedings, or
the discovery of hazardous substances on a property within the Project Area (see "Hazardous Substances"
below) or the complete or partial destruction of such property caused by, among other eventualities, an
earthquake (see "Seismic Factors" below), flood or other natural disaster, could cause a reduction in the
Tax Revenues securing the 2011 Bonds. Property owners may also appeal to the County Assessor for a
reduction of their assessed valuations or the County Assessor could order a blanket reduction in assessed
valuations based on then current economic conditions. See "PROJECT AREA TAX REVENUES -
Appeals of Assessed Values."
Any reduction of assessed valuations and the resulting decline in Tax Revenues or the resulting
property tax refunds could have an adverse effect on the Agency's ability to make timely payments of
principal of and interest on the 2011 Bonds.
Reduction in Inflationary Rate
As described in greater detail below, Article XBIA of the California Constitution provides that
the full cash value base of real property used in determining taxable value may be adjusted from year to
year to reflect the inflationary rate, not to exceed a 2% increase for any given year, or may be reduced to
reflect a reduction in the consumer price index or comparable local data. Such measure is computed on a
calendar year basis. Because Article XIIIA limits inflationary assessed value adjustments to the lesser of
the actual inflationary rate or 2 percent, there have been years in which the assessed values were adjusted
by actual inflationary rates, which were less than 2%.
Since Article XII1A was approved, the annual adjustment for inflation has fallen below the 2%
limitation six times: in fiscal year 1983-84, 1.000%; in fiscal year 1995-96, 1.194%; in fiscal year 1996-
97, 1.115%; in fiscal year 1999-00, 1.853%; in fiscal year 2004-05, 1.867%; and in fiscal year 2009-10,
(0.237)%.
The fiscal year 2011-12 inflation adjustment is anticipated to be 0.75% and commencing fiscal
year 2012-13 the factor is assumed for the projections of Tax Revenues to be 2%. The Agency is unable
to predict if any adjustments to the full cash value base of real property within the Project Area, whether
an increase or a reduction, will be realized in the future.
Future Limits on Receiving Tax Increment
The last dates to receive tax increment revenue from Component Areas Nos. 1 and 2 are July 26,
2024 and December 28, 2024, respectively, meaning that tax increment revenue derived from those
35 Component Areas will become unavailable to the Agency prior to the maturity date of certain series of the
Bonds. After December 28, 2024, debt service on the 2011 Bonds (final maturity date of November
1,
20 ), the Parity 2005 Bonds (final maturity date of November 1, 2025), the Parity 2002 Bonds (fmal
maturity date of November 1, 2025), the Parity 1999 Series A Bonds (final maturity date of November
1,
2025) and any Additional Bonds will be payable solely from tax increment derived from Component
Areas Nos. 3 and 4. The Parity 2004 Bonds mature on November 1, 2023 and the Senior 1993 Bonds
mature on November 1, 2014.
The three current largest property owners in the Project Area (all of winch are affiliated with
Sony), currently representing 11.01% of total (secured and unsecured) taxable value in the Project Area,
are located in Component Area No. 3. Therefore, the concentration of taxable property ownership on
these three Sony-affiliated entities is likely to increase significantly after fiscal year 2024-25. Significant
defaults by the owners of property in Component Areas Nos. 3 and 4 in the payment of property taxes
after fiscal year 2024-25 could adversely affect the ability of the Agency to pay debt service on the 2011
Bonds, the Parity 2005 Bonds, the Parity 2002 Bonds, the Parity 1999 Series A Bonds and any Additional
Bonds. See "SECURITY FOR THE 2011 BONDS — Tax Revenues; Flow of Funds — Maintenance of
Special Fund After November 1, 2016," "THE CULVER CITY REDEVELOPMENT PROJECT —
Redevelopment Plan Limitations" and "— Major Taxable Property Owners."
Levy and Collection
The Agency does not have any independent power to levy and collect property taxes. Any
reduction in the tax rate or the, implementation of any constitutional or legislative property tax decrease •
could reduce the Tax Revenues, and accordingly, could have an adverse impact on the ability of the
Agency to repay the 2011 Bonds. Likewise, delinquencies in the payment of property taxes could have
an adverse effect on the Agency's ability to make timely debt service payments. Because the County has
not adopted the Teeter Plan, the Agency's tax increment revenues reflect actual collections rather than the
amount levied. See "PROJECT AREA TAX REVENUES — Historic Assessed Value and Tax
Revenues."
Risks Associated With Additional Bonds
As described in "SECURITY FOR THE 2011 BONDS — Issuance of Additional Bonds," the
Agency may issue or incur obligations payable from Tax Revenues on a parity with its pledge of Tax
Revenues to payment of debt service on the 2011 Bonds. In addition, debt service on the 2011 Bonds is
payable from Tax Revenues on a subordinate basis with debt service on the 1993 Loan Agreements and
the 1993 Bonds_ The existence of and the potential for such obligations increases the risks associated with
the Agency's payment of debt service on the 2011 Bonds in the event of a decrease in the Agency's
collection of Tax Revenues.
Bankruptcy Risks
The enforceability of the rights and remedies of the owners of the 2011 Bonds and the obligations
of the Agency may become subject to the following: the federal bankruptcy code and applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the
enforcement of creditors' rights generally, now or hereafter in effect; usual equitable principles which
may limit the specific enforcement under state law of certain remedies: the exercise by the United States
of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary
exercise, in certain exceptional situations of the police power inherent in the sovereignty of the State of
California and its governmental bodies in the interest of servicing a significant and legitimate public
purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if
36
s initiated, could subject the owners of the 2011 Bonds to judicial discretion and inteipretation of their
rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification
of their rights.
State Budget Issues
Transfers to Educational Revenue Augmentation Fund (ERAF)
In connection with its approval of the budget for the 1992-93, 1993-94, 1994-95, 2002-03, 2003-
04, 2004-05, 2005-06, and 2008-09 fiscal years, the State Legislature enacted legislation which, among
other things, reallocated funds from redevelopment agencies to school districts by shifting a portion of
each agency's tax increment to school districts for such fiscal years for deposit in the Educational
Revenue Augmentation Fund ("ERAF") established in each county treasury throughout the State. The
aggregate amount for the transfers for all redevelopment agencies in the State in each such fiscal year was
respectively, as follows: $205 million (1992-93), $65 million (1993-94), $65 million (1994-95), $75
million (2002-03), $135 million (2003-04), $250 million (2004-05), $250 million (2005-06), and $350
million (2008-09). The amount required to be paid by a redevelopment agency under such legislation was
apportioned among all of its redevelopment project areas on a collective basis, and was not allocated
separately to individual project areas.
The legislation adopted by the State Legislature, and signed by the Governor of the State, to
implement the ERAF shift for fiscal year 2008-09 was Assembly Bill No. 1389, Chapter 751, Statutes
2008 ("AB 1389"). On April 30, 2009 (prior to the May 10, 2009 payment deadline for the ERAF
transfers),- a California superior court in California Redevelopment Association v. Genest (County of
Sacramento) (Case No. 34-2008-00028334) held that the required payment by redevelopment agencies
into ERAF in fiscal year 2008-09 pursuant to AB 1389 violated the California constitution and
invalidated and enjoined the operation of the California Health and Safety Code section requiring such
payment. On May 26, 2009, the State filed a notice that it would appeal the decision of the superior court.
On or about September 28, 2009, the State withdrew its appeal of the superior court's decision in
California Redevelopment Association v. Genest.
Transfers to Supplemental Educational Revenue Augmentation Fund (SERAF)
In connection with various legislation related to the budget for the State for its fiscal year 2009-
10, in late July 2009 the State Legislature adopted, and the Governor of the State signed, Assembly Bill
No. 26, Chapter 21, Statutes of 2009 ("AB 26"). AB 26 mandates that redevelopment agencies in the
State make deposits to the Supplemental Educational Revenue Augmentation Fund ("SERAF") that is
established in each county treasury throughout the State, in the aggregate amount of $1.7 billion for fiscal
year 2009-10, which was due prior to May 10, 2010, and $350 million for fiscal year 2010-11, which is
due prior to May 10, 2011. Similar to the ERAF legislation, each transfer required to be paid by a
redevelopment agency under AB 26 is apportioned among all of its redevelopment project areas on a
collective basis, and is not allocated separately to individual project areas.
On October 8, 2010, the State Legislature adopted, and the Governor of the State signed, the
budget for the State for its fiscal year 2010-11. The State's 2010-11 budget does not require any
additional transfer from redevelopment agencies to the ERAF or SERAF other than the existing transfer
required under AB 26 for fiscal year 2010-11, due prior to May 10, 2011.
The California Redevelopment Association, the Union City Redevelopment Agency and the
Fountain Valley Redevelopment Agency filed a lawsuit in Sacramento Superior Court on October 20,
2009 challenging the constitutionality of the SERAF transfer provisions of AB 26. Subsequently, the
Court certified all redevelopment agencies in the State as a class of plaintiffs in the lawsuit. The Court
37 Governor's Pronosed 2011-12 Budget: Disestablishment of Redevelopment A encies
announced its ruling in the case on May 4, 2010, in which it upheld the constitutionality of SERAF
transfer provisions of AB 26. On August 30, 2010, the California Redevelopment Association and the
other plaintiffs in the lawsuit challenging the SERAF transfer provisions of AB 26 filed an appeal to the
Court's May 4, 2010 decision. The Agency cannot predict the ultimate outcome of such appeal.
The Agency made the required $10,946,277 SERAF payment for fiscal year 2009-10 by May 10,
2010 by borrowing from the Agency's Low and Moderate Income Housing Fund. The Agency is paying
back the Housing Fund through five equal payments from Fiscal Year 2010-11 through 2014-15. The
Agency's SERAF payment for fiscal year 2010-11 is estimated by the California Redevelopment
Association to be $2,251,463 and is due by May 10, 2011. The Agency believes it will have sufficient
funds to pay the full amount of the 2010-11 SERAF payment when due.
AB 26 contains provisions that subordinate the obligation of redevelopment agencies to make the
SERAX payments specified therein to certain indebtedness. California Health and Safety Code Sections
33690(a)(3) and 33690.5(a)(3) state: "The obligation of any agency to make the payments required
pursuant to this subdivision shall be subordinate to the lien of any pledge of collateral securing, directly or
indirectly, the payment of the principal, or interest on any bonds of the agency including, without
limitation, bonds secured by a pledge of taxes allocated to the agency pursuant to Section 33670 of the
California Health and Safety Code. Agencies shall factor in the fiscal obligations created by this
subdivision when issuing bonded indebtedness."
AB 26 imposes various restrictions on redevelopment agencies that fail to timely make the
required SERAF payments, including (i) a prohibition on adding or expanding project areas, (ii) a
prohibition on the incurrence of additional debt, (iii) limitations on the encumbrance and expenditure of
funds, including funds for operation and administration expenses, and (iv) commencing with the July 1
following the due date of a SERAF annual payment that is not timely made, a requirement that the
applicable redevelopment agency allocate an additional five percent (5%) of all taxes that are allocated to
the redevelopment agency under the Redevelopment Law for low and moderate income housing for the
remainder of the time that the applicable redevelopment agency receives allocations of tax revenues under
the Redevelopment Law.
Proposition 22
On November 2, 2010, the voters of the State approved Proposition 22, which amended the
California Constitution to prohibit the State, even during a period of severe fiscal hardship, from delaying
the distribution of tax revenues for transportation, redevelopment, or local government projects and
services. As amended by Proposition 22, Article XIII of the California Constitution prohibits the State
Legislature from enacting a statute that requires a community redevelopment agency (i) to pay, remit,
loan, or otherwise transfer, directly or indirectly, tax increment allocated to the agency (see "TAX
ALLOCATION FINANCING — General Allocation of Taxes") to or for the benefit of the State, any
agency of the State, or any jurisdiction, or (ii) to use, restrict, or assign a particular purpose for tax
increment allocated to the agency for the benefit of the State, any agency of the State, or any jurisdiction,
except for statutory tax sharing, and for the purpose of increasing, improving, and preserving the supply
of low and moderate income housing available at affordable housing cost. The effect of Proposition 22
generally is to preclude the State Legislature from enacting legislation to require future ERAF or SERAF
shifts or other legislation reducing the tax increment revenues allocated to redevelopment activities.
On January 10, 2010, the Governor released the proposed fiscal year 2011-12 State budget, which
proposes the elimination of redevelopment. The proposed budget calls for prohibiting redevelopment
agencies from creating new contracts or obligations on or after the date urgency legislation is adopted.
38 The proposed budget also calls for disestablishing existing agencies by July 1, 2011, and establishing
successor local agencies which would be required to use the property tax that the agencies would
otherwise have received to retire pre-existing agency debts and contractual obligations in accordance with
existing payment schedules. In this regard, the Governor's Budget Summary for the proposed 2011-12
State budget states, "No existing obligations will be impaired." This is a reference to provisions in the
federal and State Constitutions that, subject to certain exceptions, generally prohibit states from passing a
law that impairs the obligations of contracts.
Under the Governor's proposal, the amount remaining in fiscal year 2011-12 after the payment of
pre-existing agency obligations would be distributed on a one-time basis in various ways, including to the
affected local taxing entities (including cities) and to the State General Fund to offset the costs for Medi-
Cal and trial courts. Beginning in fiscal year 2012-13, the amount remaining after the payment of pre-
existing agency obligations generally would be distributed to cities, counties, special districts, and K-14
schools in amounts proportionate to their share of the countywide property tax. Amounts in Low and
Moderate Income Housing Funds would be shifted to local housing authorities for low and moderate
income housing. The budget also proposes that the Constitution be amended to provide for 55 percent
voter approval for limited tax increases and bonding against local revenues for development projects such
as those projects currently undertaken by redevelopment agencies.
As with any legislative proposal by the Governor, the budget is subject to the legislative process,
and as of the date of this Official Statement, it is not clear whether the Governor will have the
Legislature's support regarding these proposals. In any case, it is uncertain when any budget legislation
may be adopted or what the exact provisions of any such legislation will be. The potential impact of
future legislation could be material to the Agency and its ability to finance or repay existing and future
obligations and conduct its redevelopment activities.
The State Legislative Analyst Office, in its Overview of the Governor's Budget for fiscal year
2011-12, dated January 12, 2011, observes that if redevelopment agencies undertake new bonded
indebtedness and contractual obligations within the projected next several weeks or months that are
required for the State Legislature to draft, review, and complete fiscal year 2011-12 budget-related
legislation, such agency actions could constrain the State's ability to redirect redevelopment revenues and
to realize the State savings and local benefits anticipated in the Governor's proposal. Therefore, the
Legislative Analyst Office recommends that the State Legislature pass urgency legislation as soon as
possible to prohibit redevelopment agencies from taking actions that increase their debt, or from creating,
amending, or extending any redevelopment project areas. The Agency cannot predict whether or when
any such urgency legislation may be approved by the State Legislature, or what the provisions of any such
urgency legislation actually adopted may be.
Although the Governor's Budget Summary for the proposed fiscal year 2011-12 State budget
provides for successor agencies that will be required to retire redevelopment agency debts in accordance
with existing payment schedules, and the federal and State Constitutions generally prohibit states from
passing a law that impairs the obligation of contracts, the Agency cannot predict whether the fmal State
budget legislation for fiscal year 2011-12 approved by the State Legislature and signed by the Governor
will include the successor agency provisions proposed by the Governor or similar provisions to provide
for payment of outstanding redevelopment agency debts in accordance with existing payment schedules.
In the event such legislation does not provide for the payment of outstanding redevelopment agency debts
in accordance with existing payment schedules, the Agency cannot predict whether or not a court would
uphold the validity of such legislation based on an exception to the general federal and/or State
Constitution prohibitions on the Legislature's impairment of contracts, or otherwise. Accordingly, the
Agency is not able to predict the effect any such legislation, if enacted, would have on future Tax
Revenues available for the payment of principal of and interest on the Bonds.
39 Information about the State budget and State spending is available at various State maintained
websites. Text of the Governor's Budget Summary for the proposed fiscal year 2012-12 State budget,
text of the current State budget, and other documents related to the State budget may be found at the
website of the Department of Finance, www.dolca.gov . A nonpartisan analysis of the budget is posted by
the Legislative Analyst Office at www.lao.ca.gov . In addition, various State official statements, many of
which contain a summary of the current and past State budgets may be found at the website of the State
Treasurer, www.treasurer.ca.gov. None of such websites is in any way incorporated into this Official
Statement, and the Agency makes no representation whatsoever as to the accuracy or completeness of any
of the information on such websites.
Seismic Factors
The City, like most regions in the State of California, is located in an area of seismic activity from
movements along the active fault zones and, therefore, could be subject to potentially destructive
earthquakes. In January 1994, an earthquake of magnitude 6.8 on the Richter Scale occurred in the
northwest San Fernando Valley which caused widespread damage to commercial and residential
structures. The City's General Plan Seismic Safety element identifies potential risks and hazards that may
relate to future land use planning in the City. The Seismic Safety Element includes maps of known
seismic, geologic and soils conditions. In addition, the City also refers to updated maps prepared by the
State geologist, pursuant to the Alquist-Priolo Earthquake Fault Zoning Act and the Seismic Hazard
Mapping Act, that identify hazard zones susceptible to surface faulting, liquefaction and slope failure.
Construction projects within such hazard zones are required to provide to the City additional geologic
studies to identify mitigation measures to limit the potential, for loss of life and property damage.
According to the City's Seismic Safety Element, the two most probable major earthquake sources
for the City are the San Andreas Fault Zone (located 45 miles from the City at its closest point), and the
Newport-Inglewood Fault Zone, a portion of which is located within the City. The City is also in
proximity to the Overland and Charnock faults, but movement along those faults is not anticipated
because evidence suggests those faults are no longer active.
The occurrence of severe seismic activity in the City could result in substantial damage to
property located in the Project Area, and could lead to successful appeals for reduction of assessed values
of such property. Such a reduction of assessed valuations could result in a reduction of the Tax Revenues
that secure the 2011 Bonds.
Hazardous Substances
An additional environmental condition that may result in the reduction in the assessed value of
property would be the discovery of a hazardous substance that would limit the beneficial use of taxable
property within the Project Area. In general, the owners and operators of a property may be required by
law to remedy conditions of the property relating to releases or threatened releases of hazardous
substances. The owner or operator may be required to remedy a hazardous substance condition of
property whether or not the owner or operator has anything to do with creating or handling the hazardous
substance. The effect, therefore, should any of the property within the Project Area be affected by a
hazardous substance, could be to reduce the marketability and value of the property by the costs of
remedying the condition.
Secondary Market
There can be no guarantee that there will be a secondary market for the 2011 Bonds, or, if a
secondary market exists, that the 2011 Bonds can be sold for any particular price. Occasionally, because
40 of general market conditions or because of adverse history or economic prospects connected with a
particular issue, secondary marketing practices in connection with a particular issue are suspended or
terminated. Additionally, prices of issues for which a market is being made will depend upon the then
prevailing circumstances. Such prices could be substantially different from the original purchase price.
Loss of Tax Exemption
As discussed under the caption "CONCLUDING INFORMATION — Tax Matters," interest on
the 2011 Series A Bonds could become includable in gross income for purposes of federal income
taxation retroactive to the date the 2011 Series A Bonds were issued as a result of future acts or omissions
of the Agency in violation of its covenants contained in the Indenture. Should such an event of taxability
occur, the 2011 Series A Bonds are not subject to special redemption or any increase in interest rate and
may remain outstanding until maturity.
LIMITATIONS ON TAX REVENUES AND POSSIBLE SPENDING LIMITATIONS
Property Tax Limitations - Article XMA
California voters, on June 6, 1978, approved an amendment (commonly known as both
Proposition 13 and the Jarvis-Gann Initiative) to the California Constitution. This amendment, which
added Article XBIA to the California Constitution, among other things, affects the valuation of real
property for the purpose of taxation in that it defines the full cash value of property to mean "the county
assessor's valuation of real property as shown on the 1975176 tax bill under full cash value, or thereafter,
the appraised value of real property when purchased, newly constructed, or a change in ownership has
occurred after the 1975 assessment." The full cash value may be adjusted annually to reflect inflation at a
rate not to exceed 2% per year, or any reduction in the consumer price index or comparable local data, or
any reduction in the event of declining property value caused by damage, destruction or other factors.
The amendment further limits the amount of any ad valorem tax on real property to 1 percent of the full
cash value except that additional taxes may be levied to pay debt service on indebtedness approved by the
voters prior to July 1, 1978. In addition, an amendment to Article XIII was adopted in June 1986 by
initiative which exempts any bonded indebtedness approved by two-thirds of the votes cast by voters for
the acquisition or improvement of real property from the 1 percent limitation.
In the general election held November 4, 1986, voters of the State of California approved two
measures, Propositions 58 and 60, which further amend Article XBIA. Proposition 58 amends Article
XILIA to provide that the terms "purchased" and "change of ownership," for purposes of determining full
cash value of property under Article )(IRA, do not include the purchase or transfer of (1) real property
between spouses and (2) the principal residence and the first $1,000,000 of other property between
parents and children.
Proposition 60 amends Article XIIIA to permit the Legislature to allow persons over age 55 who
sell their residence to buy or build another of equal or lesser value within two years in the same county, to
transfer the old residence's assessed value to the new residence. Pursuant to Proposition 60, the
Legislature has enacted legislation permitting counties to implement the provisions of Proposition 60.
Challenges to Article XILIA
There have been many challenges to Article XB1A of the California Constitution. Recently, the
United States Supreme Court heard the appeal in Nordlinger v. Hahn, a challenge relating to residential
property. Based upon the facts presented in Nordlinger, the United States Supreme Court held that the
41
Its method of property tax assessment under Article XfilA did not violate the federal Constitution. The
Agency cannot predict whether there will be any future challenges to California's present system of
property tax assessment and cannot evaluate the ultimate effect on the Agency's receipt of tax increment
revenues should a future decision hold unconstitutional the method of assessing property.
Implementing Legislation
Legislation enacted by the California Legislature to implement Article XfilA (Statutes of 1978,
Chapter 292, as amended) provides that, notwithstanding any other law, local agencies may not levy any
property tax, except to pay debt service on indebtedness approved by the voters prior to July 1, 1978, and
that each county will levy the maximum tax permitted by Article XIIIA.
The apportionment of property taxes in fiscal years after 1978/79 has been revised pursuant to
Statutes of 1979, Chapter 282 which provides relief funds from State moneys beginning in fiscal year
1978/79 and is designed to provide a permanent system for sharing State taxes and budget surplus funds
with local agencies. Under Chapter 282, cities and counties receive about one-third more of the
remaining property tax revenues collected under Proposition 13 instead of direct State aid. School
districts receive a correspondingly reduced amount of property taxes, but receive compensation directly
from the State and are given additional relief.
Future assessed valuation growth allowed under Article XIIIA (new construction, change of
ownership, 2% annual value growth) will be allocated on the basis of "sitn.s" among the jurisdictions that
serve the tax rate area within which the growth occurs except for, certain utility property assessed by the
State Board of Equalization which is allocated by a different method discussed herein.
Property Tax Collection Procedures
Classifications. In California, property which is subject to ad valorem taxes is classified as
"secured" or "unsecured." Secured and unsecured property are entered on separate parts of the
assessment roll maintained by the county assessor. The secured classification includes property on which
any property tax levied by the County becomes a lien on that property sufficient, in the opinion of the
county assessor, to secure payment of the taxes. Every tax which becomes a lien on secured property has
priority over all other liens on the secured property, regardless of the time of the creation of other liens. A
tax levied on unsecured property does not become a lien against unsecured property, but may become a
lien on certain other property owned by the taxpayer.
Collections.
The method of collecting delinquent taxes is substantially different for the two
classifications of property. The taxing authority has four ways of collecting unsecured property taxes in
the absence of timely payment by the taxpayer: (1) a civil action against the taxpayer; (2) filing a
certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on
certain property of the taxpayer; (3) filing a certificate of delinquency for record in the county recorder's
office, in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of the personal
property, improvements or possessory interests belonging or assessed to the assessee.
The exclusive means of enforcing the payment of delinquent taxes with respect to property on the
secured roll is the sale of property securing the taxes to the State for the amount of taxes which are
delinquent.
Penalties. A 10 percent penalty is added to delinquent taxes which have been levied with respect
to property on the secured roll. In addition, property on the secured roll on which taxes are delinquent is
declared in default on or about June 30 of the fiscal year. Such property may thereafter be redeemed by
42 payment of the delinquent
taxes and a delinquency penalty, plus a redemption penalty of 1.5 percent per
month to the time of redemption and a $15 Redemption Fee. If taxes are unpaid for a period of five years
or more, the property is recorded in a "Power to Sell" status and is subject to sale by the county tax
collector. A 10 percent penalty also applies to the delinquent taxes on property on the unsecured roll, and
further, an additional penalty of 1-1/2 percent per month accrues with respect to such taxes beginning the
first day of the third month following the delinquency date.
Delinquencies.
The valuation of property is determined as of January 1 each year and equal
installments of taxes levied upon secured property become delinquent on the following December 10 and
April 10. Taxes on unsecured property are due January 1. Unsecured taxes enrolled by July 31, if
unpaid, are delinquent August 31 at 5:00 p.m. and are subject to penalty; unsecured taxes added to roll
after July 31, if unpaid, are delinquent on the last day of the month succeeding the month of enrollment.
Disbursement to the Agency.
The secured tax revenues are disbursed beginning in December
with a 35 percent advance payment followed by a 5% advance in January. A reconciliation payment
reflecting actual first installment collections is made in February. In April, 75% of the total levy is
disbursed to the Agency, followed by a reconciliation payment in May reflecting actual second
installment collections. Final payments are generally allocated in August. Over-allocations, if any, are
deducted from the next year's allocation. The unsecured tax increment revenues are advanced in
November and March of each year, with final reconciliation payments made in August.
Supplemental Assessments.
A bill enacted in 1983, SB 813 (Statutes of 1983, Chapter 498),
provides for the supplemental assessment and taxation of property as of the occurrence of a change in
ownership or completion of new construction. The statute may provide increased revenue to
redevelopment agencies to the extent that supplemental assessments as a result of new construction or
changes of ownership occur within the boundaries of redevelopment projects subsequent to the lien date.
To the extent such supplemental assessments occur within the Project Area, Tax Revenues may increase.
The Fiscal Consultant has not included supplemental assessments in the tax increment projection set forth
in Table 8.
Tax Collection Fees.
SB 2557 (Chapter 466, Statutes of 1990) permits county auditors to
withhold a portion of annual tax revenues for the recovery of county charges related to property tax
administration services to cities in an amount equal to their property tax administration costs
proportionately attributable to cities. Subsequent legislation specifically includes redevelopment agencies
among the entities which are subject to a property tax administration charge.
See "TAX REVENUES — Projected Tax Revenues" for a discussion of the Agency's projected
assumptions regarding future County administrative charges.
Unitary Property
AB 2890 (Statutes of 1986, Chapter 1457) provides that, commencing with the fiscal year 1988-
89, assessed value derived from State-assessed unitary property (consisting mostly of operational property
owned by utility companies and herein defined as "Unitary Property") is to be allocated county-wide as
follows: (I) each tax rate area will receive the same amount from each assessed utility received in the
previous fiscal year unless the applicable county-wide values are insufficient to do so, in which case
values will be allocated to each tax rate area on a pro-rata basis; and (ii) if values to be allocated are
greater than in the previous fiscal year, each tax rate area will receive a pro-rata share of the increase from
each assessed utility according to a specified formula. Additionally, the lien date on State-assessed
property has been changed to January 1. Railroad property will continue to be assessed and revenues
allocated to all tax rate areas where the railroad property is sited.
43
go See "TAX REVENUES – Projected Tax Revenues" for a discussion of the Agency's projected
assumptions regarding future unitary tax revenues.
Appropriations Limitations – Article X111113
On November 6, 1979, California voters approved Proposition 4, the so-called Gann Initiative,
which added Article XITIB to the California Constitution. The principal effect of Article XLUB is to limit
the annual appropriations of the State and any city, county, school district, authority or other political
subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted for changes in
the cost of living, population and services rendered by the government entity.
Effective November 30, 1980, the California Legislature added Section 33678 to the
Redevelopment Law which provided that the allocation of taxes to a redevelopment agency for the
purpose of paying principal of, or interest on, loans, advances, or indebtedness will not be deemed the
receipt by such agency of proceeds of taxes levied by or on behalf of the agency within the meaning of
Article XIBB, nor will such portion of taxes be deemed receipt of taxes by, or an appropriation subject to
the limitation of, any other public body within the meaning or for the purpose of the Constitution and
laws of the State, including Section 33678 of the Redevelopment Law.
Exclusion of Tax Revenues for General Obligation Bonds Debt Service
An initiative to amend the . California Constitution entitled "Property Tax Revenues
Redevelopment Agencies" was approved by California voters at the November 8, 1988 general election.
Under prior law, a redevelopment agency using tax increment revenue received additional property tax
revenue whenever a local government increased its property tax rate to pay off its general obligation
bonds. This initiative amended the California Constitution to allow the California Legislature to prohibit
redevelopment agencies from receiving any of the property tax revenues raised by increased property tax
rates imposed by local governments to make payments on their bonded indebtedness. The initiative only
applies to tax rates levied to finance general obligation bonds approved by the voters on or after January
1, 1989. Any revenue reduction to redevelopment agencies would depend on the number and value of the
general obligation bonds approved by voters in prior years, which tax rate will reduce due to increased
valuation subject to the tax or the retirement of the indebtedness. The Agency did not experience a
revenue loss as a result of the initiative.
Senate Bill 1045; Senate Bill 1096
Pursuant to Senate Bill 1045 ("SB 1045") in connection with adoption of statutes requiring an
ERAF shift for fiscal year 2003-04, and pursuant to Senate Bill 1096 ("SB 1096") in connection with the
adoption of statutes requiring an ERAF shift for fiscal years 2004-05 and 2005-06, the State Legislature
authorized amendments of redevelopment plans to extend by one year the time limit of the effectiveness
of the plan and the time limit to repay indebtedness and receive tax increment.
With respect to SB 1045 and SB 1096, the Agency has extended the time limits of the Component
Areas as permitted by SB 1045 pursuant to Ordinance No. 2004-0001 adopted on January 12, 2004 and
pursuant to SB 1096 by an ordinance adopted on September 12, 2005.
Proposition 218
On November 5, 1996, California voters approved Proposition 218—Voter Approval for Local
Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative Constitutional
44 Amendment. Proposition 218 added Articles XMC and XELD to the California Constitution, imposing
certain vote requirements and other limitations on the imposition of new or increased taxes, assessments
and property-related fees and charges. Tax Revenues securing the Bonds are derived from property taxes
which are outside the scope of taxes, assessments and property-related fees and charges which were
limited by Proposition 218.
Future Initiatives
Article XMA, Article XIM3 and certain other propositions affecting property tax levies were
each adopted as measures which qualified for the ballot pursuant to California's initiative process. From
time to time other initiative measures could be adopted, further affecting Agency revenues or the
Agency's ability to expend revenues.
CONCLUDENG INFORMATION
Litigation
There is no litigation pending or, to the knowledge of the Agency or the City, threatened in any
way to restrain or enjoin the issuance, execution or delivery of the 2011 Bonds, to contest the validity of
the 2011 Bonds, the Indenture or any proceedings of the Agency or the City with respect thereto. In the
opinion of the Agency, the City and their counsel, there are no lawsuits or claims pending against the
Agency or the City which will materially affect the finances of the Agency or City so as to impair the
ability to pay principal of and interest on the 2011 Bonds when due.
Ratings
Standard & Poor's has assigned its municipal bond rating of " " to the 2011 Bonds. The ratings
issued reflect only the view of such rating agency, and any explanation of the significance of such ratings
should be obtained from such rating agency. There is no assurance that such ratings will be retained for
any given period of time or that they will not be revised downward or withdrawn entirely by such rating
agency if, in the judgment of such rating agencies, circumstances so warrant. Any such downward
revision or withdrawal of any ratings obtained may have an adverse effect on the market price of the 2011
Bonds.
Tax Matters
The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain requirements
which must be met subsequent to the issuance and delivery of the 2011 Series A Bonds for interest
thereon to be and remain excluded from gross income for Federal income tax purposes. Noncompliance
with such requirements could cause interest on the 2011 Series A Bonds to be included in gross income
for Federal income tax purposes retroactive to their date of issue. These requirements include, but are not
limited to, provisions which limit bow the proceeds of the 2011 Series A Bonds may be spent and
invested, and generally require that certain investment earnings be rebated on a periodic basis to the
United States of America. The Agency has made certifications and representations and has covenanted to
maintain the exclusion of the interest on the 2011 Series A Bonds from gross income for Federal income
tax purposes pursuant to Section 103 of the Code.
In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under
existing law and assuming the accuracy of such certifications and representations by the Agency and
compliance with such covenants, (i) interest on the 2011 Series A Bonds is excluded from gross income
for Federal income tax purposes under Section 103 of the Code, and (ii) the 2011 Series A Bonds are not
45 "specified private activity bonds" within the meaning of Section 57(a)(5) of the Code and, therefore,
interest on the 2011 Series A Bonds is not a preference item for purposes of computing the alternative
minimum tax imposed by Section 55 of the Code.
Under the Code, a portion of the interest on the 2011 Series A• Bonds earned by certain
corporations may be subject to a federal corporate alternative minimum tax. In addition, interest on the
2011 Series A Bonds may be subject to a federal branch profits tax imposed on certain foreign
corporations doing business in the United States and to a federal tax imposed on excess net passive
income of certain S corporations. The exclusion of interest from gross income for federal income tax
purposes may have certain adverse federal income tax consequences on items of income, deduction or
credit for certain taxpayers, including financial institutions, certain insurance companies, recipients of
Social Security and Railroad Retirement benefits, those deemed to incur or continue indebtedness to
acquire or carry tax-exempt obligations, and individuals eligible for the earned income tax credit. Bond
Counsel will express no opinion regarding these and other such consequences.
. Bond Counsel has not undertaken to advise in the future whether any circumstances or events
occurring after the date of issuance of the 2011 Series A Bonds may affect the tax status of interest on the
Bonds. No assurance can be given that future legislation, or amendments to the Code, if enacted into law,
will not contain provisions which could eliminate, or directly or indirectly reduce, the benefit of the
exclusion of interest on the 2011 Series A Bonds from gross income for Federal income tax purposes.
Certain requirements and procedures contained or referred to in relevant documents may be changed and
certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in
such documents, upon the advice or with the approving opinion of nationally recognized bond counsel.
Bond Counsel expresses no opinion as to any 2011 Series A Bonds, or the interest thereon, if any such
change occurs or action is taken upon the advice or approval of bond counsel other than Richards, Watson
& Gershon, A Professional Corporation.
If the issue price of a 2011 Series A Bond (the first price at which a substantial amount of the
bonds of a maturity are to be sold to the public) is less than the stated redemption price at maturity of such
2011 Series A Bond, the difference constitutes original issue discount, the accrual of which is excluded
from gross income for Federal income tax purposes to the same extent as interest on the 2011 Series A
Bonds. Further, such original issue discount accrues actuarially on a constant yield method over the term
of each such 2011 Series A Bond and the basis of each 2011 Series A Bond acquired at such initial
offering price by an initial purchaser thereof will be increased by the amount of such accrued original
issue discount. The accrual of original issue discount is generally taken into account as an increase in the
amount of tax-exempt income for purposes of determining various other tax consequences of owning such
2011 Series A Bonds. Purchasers who acquire 2011 Series A Bonds with original issue discount are
advised that they should consult with their own independent tax advisors with respect to the federal, state
and local tax consequences of owning such 2011 Series A Bonds.
If the issue price of a 2011 Series A Bond is greater than the stated redemption price at maturity
of such 2011 Series A Bond, the difference constitutes original issue premium, the amortization of which
is not deductible from gross income for Federal income tax purposes. Original issue premium is
amortized over the period to maturity of such 2011 Series A Bond based on the yield to maturity of that
2011 Series A Bond (or, in the case of a 2011 Series A Bond callable prior to its stated maturity, the
amortization period and yield may be required to be determined on the basis of an earlier call date that
results in the lowest yield on that Bond), compounded semiannually. For purposes of determining gain or
loss on the sale or other disposition of such 2011 Series A Bond, the purchaser is required to decrease
such purchaser's adjusted basis in such 2011 Series A Bond by the amount of premium that has amortized
while the purchaser has owned the 2011 Series A Bond. Purchasers who acquire 2011 Series A Bonds
46
S with original issue premium are advised that they should consult with their own independent tax advisors
with respect to the federal, state and local tax consequences of owning such 2011 Series A Bonds.
Payments of interest on tax-exempt obligations, including the 2011 Series A Bonds, are generally
subject to IRS Form 1099-1NT information reporting requirements. If an owner of a 2011 Series A Bond
is subject to backup withholding under those requirements, then payments of interest will also be subject
to backup withholding. Those requirements do not affect the exclusion of such interest from gross
income for federal income tax purposes.
Prospective purchasers of the 2011 Series A Bonds should consult their own independent tax
advisers regarding pending or proposed federal and state tax legislation and court proceedings, and
prospective purchasers of the 2011 Series A Bonds at other than their original issuance at the respective
prices indicated on the cover of this Official Statement should also consult their own tax advisers
regarding other tax considerations such as the consequences of market discount, as to all of which Bond
Counsel expresses no opinion.
The Internal Revenue Service has established a program to audit issues of tax-exempt bonds in
order to determine whether, in its view, interest should instead be included in gross income of the
Bondholders for purposes of federal income taxation. It cannot be predicted whether or not the 2011
Series A Bonds will be subjected to such an audit. If such an audit is undertaken, it could adversely affect
the market value of the 2011 Series A Bonds until the audit is concluded, regardless of the ultimate
outcome of the audit.
Bond Counsel expresses no opinion on whether interest on the 2011 Series B Bonds is excluded
from gross income for federal income tax purposes, and it is not the intent of the Agency that such interest
be tax-exempt.
Bond Counsel is also of the opinion that under existing law, interest on both the 2011 Series A
Bonds and 2011 Series B Bonds is exempt from State of California personal income taxes.
A copy of each of the proposed forms of Bond Counsel's final approving opinions with respect to
the 2011 Series A Bonds and the 2011 Series B Bonds is attached hereto as APPENDIX E.
Continuing Disclosure
The Agency has undertaken for the benefit of holders and beneficial owners of the 2011 Bonds to
provide certain financial information and operating data relating to the Agency by not later than nine
months following the end of the Agency's fiscal year (currently by March 31 each year based upon the
Tune 30 end of the Agency's fiscal year), commencing March 31, 2012 with the report for the 2010-11
Fiscal Year (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events,
if material. The Annual Report and notices will be filed by the Agency with the Municipal Securities
Rulemaking Board. The specific nature of the information to be contained in the Annual Report or the
notices of material events is set forth in "APPENDIX F — Form of Continuing Disclosure Agreement."
These covenants have been made in order to assist the Underwriter in complying with SEC Rule 15c2-
12(b)(5) (the "Rule"). [confirm - The Agency has not failed to comply in any material respects with
previous undertakings to provide annual reports and notices of material events under the Rule in the past
five years.]
47 Underwriting
Stone & Youngberg LLC (the "Underwriter") has agreed to purchase the 2011 Series A Bonds at
a purchase price of $ (being the principal amount of the 2011 Series A Bonds ($
[less/plus] a net original issue [discount/premium] of $ and less an underwriter's discount of
$ . ). The Underwriter has agreed to purchase the 2011 Series B Bonds at a purchase price of
(being the principal amount of the 2011 Series B Bonds ($ ) [less/plus] a net original
issue [discount/premium] of $ and less an underwriter's discount of $ ). The
Underwriter may change the initial public offering prices of the Bonds from time to time. The Bond
Purchase Agreement provides that the Underwriter will purchase all the 2011 Bonds if any are purchased,
and that the obligation to make such purchase is subject to certain terms and conditions set forth in the
Bond Purchase Agreement, including, among others, the approval of certain legal matters by counsel.
Professionals Involved in the Offering
The following professionals are participating in this financing: Richards, Watson & Gershon, A
Professional Corporation, as Bond Counsel and Disclosure Counsel; Kane Ballmer & Berkman, as
Agency counsel; Keyser Marston Associates, Inc., as Fiscal Consultant; 'Fieldman, Rolapp & Associates,
as Financial Advisor to the Agency; U.S. Bank National Association, as Trustee; Stone & Youngberg
LLC, as Underwriter; and Jones Hall, A Professional Law Corporation, as Underwriter's counsel. The
fees of Bond Counsel, Disclosure Counsel, the Underwriter and Underwriter's counsel are contingent on
the issuance of the Bonds.
EXECUTION
The execution and delivery of this Official Statement has been duly authorized by the Agency.
CULVER CITY REDEVELOPMENT AGENCY
By:
Executive Director
48 APPENDIX A
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
A- 1
48c APPENDIX B
PROPERTY OWNERSHIP IN THE PROJECT AREA
Current Developments. The following discussion summarizes information regarding current
office, industrial, retail, residential and public developments in the Project Area.
Office/Industrial.
Corporate Pointe.
In 1981, the Agency entered into a Disposition and Development Agreement
("DDA") for the development of Corporate Pointe, a master-planned multi-phase development that
provides for up to 1,550,000 square-feet of gross leaseable floor area of office space, including restaurants
and associated retail stores. To date, six of the nine planned buildings have been constructed containing
approximately 745,377 square-feet of office space. Entitlements for two, 12-story, 250,000 square-foot
office buildings at 600 and 700 corporate Pointe were approved in 1987. 600 Corporate Pointe is }milt
and owned by Arden Realty and 700 Corporate Pointe has yet to be constructed. Twelve acres still
remain vacant in the Corporate Pointe area. For nine of those remaining 12 acres, the Agency has
entered into an agreement with Symantee Corporation for the development of a research and development
facility. Symantec obtained approval of entitlements for 550,000 square-feet of office space in two, four-
story buildings and a multi-level parking structure. Development costs are estimated at approximately
.$89.2 million. Construction is expected to begin in late-2005 with occupancy in fiscal year 2007 708 (and
the value expected to be added to the tax rolls in fiscal year 2008-09). 700 Corporate Pointe is an
entitled project anticipated to add $45 millions of assessed value to the Project Area. The project provides
new Class A office space comprised of 287,000 sq. ft. to the City's office building stock. Construction
cost is estimated to be $47 million dollars. The project provides new Class A office space comprised of
287,000 sq. ft. to the City's office building stock.
Fox Hills Business Park. In August 2004, Broadreach Capital Partners, LLC acquired a 157,000-
SF office campus known as "Park Place" for $27.25 million.
Jefferson Boulevard.
The Agency adopted a Design for Development ("DFD") for the north side
of Jefferson Boulevard in 1977 to guide future development. The properties subject to the DFD have
been redeveloped or substantially rehabilitated. In November 2002, National Public Radio ("NPR")
acquired and rehabilitated a 25,000 square-foot building at 9099 Jefferson Boulevard to operate NPR's
West Coast Production Center. Other businesses along Jefferson Boulevard include Price Grabber.com L
L C, Q-tech Corporation and the architectural firm HOK. In May 2003, the Agency approved
development plans for construction of a 241,872 square-foot, flex industrial/office building at 10100
Jefferson Boulevard, but entitlements expired in June 2005.
Howard Industries. Howard Industries project includes a warehouse, distribution and office
facility for heating, ventilation and air conditioning equipment distribution, consisting of approximately
164,000 square-feet.
Washington Boulevard (Helms Area). The Agency approved development plans for construction
of a 43,747 square-foot, two-story office, art gallery, café, and live-work units at 8601 Washington
Boulevard. Development costs are approximately $1.5 million. The Helms Bakery offers goods from
Alan Desk, H.D. Buttercup plurnmers, and Room & Board, and offers dining by Father's Office, La
Dijonaise, and Lukshon (noted as one of the best new restaurants in the Los Angeles region).
B-1 Hayden Tract.
The 57-acre area known as the Hayden Tract is the City's largest and oldest
industrial area containing almost 1.5 million square-feet of leaseable industrial and commercial space.
The area boasts some of the most interesting adaptive architecture, with several buildings creatively
redesigned by award-winning architect Eric Owen Moss, and earning the distinction as "Architecture as
Art". The Agency has funded public improvements (such as street lighting, street trees and parking lot
improvements) and provided financial assistance to new businesses in this area. Among the area's
notable businesses are Smashbox Photo Studio and Cosmetics, N B C Productions, Debbie Allen Dance
Academy, Ogilvy & Mather (advertising), Sussman/Prejza (graphic design), Rock & Republic Enterprise
Inc. (clothing designers), Jason Natural Products (natural cosmetics), Discus Dental Supply, Southern
California Graphics (printing), National Gym Supply, Big Imagination Group (marketing), Viant (Internet
.
services), Bidz.cora (Internet services) and HSI Productions (commercial production). The RDA is
partnering with adjacent businesses and property owners to develop more than 200 additional parking
spaces to the Hayden Tract area. On-going maintenance would he funded through a property based
assessment district.
Entertainment-Related Uses.
Sony Pictures Studios.
Sony Studios is a major land owner and employer in Culver City located
at 10202 Washington Boulevard. The property is approximately 46.11 acres and located within Culver
City Redevelopment Project Component Area No. 3. The Studios currently houses 22 sound stages
ranging from 7,600 — 43,000 square feet. Sony Studios is currently implementing a long range master
plan for the entertainment facility with the goal of creating a sustainable campus environment that
provides ample open space, new production, offices and commissary to enhance the quality of the work
environment. The following components are part of the current implementation plan: 1.) 4th Avenue
Building -- a 117,058 square foot four story office building; 2.) The Culver Blvd. Building -- a 105,646
square foot 4 story office building with an employee health club; 3.) A new park centrally location
between the 4th Avenue and Culver Blvd. Office Buildings; 4.) A six level parking garage housing
approximately 1,015 parking spaces; 5). Two new digital stages and support areas totaling 37,656 feet;
6) New entrance gates at Motor Avenue and Mentone Avenue. The value of these improvements totaled
over $53 million dollars.
The Culver Studios The Culver Studios is a major land owner and employer in Culver City
occupying a 14 acre site with a fully operational entertainment studio. The Culver Studios is currently
implementing a long-range master plan that includes a recently completed a new/office support building
(Building J) and a new above ground parking structure. Both projects are part of Comprehensive Plan
Amendment #5. The projects have improved operations and have filled the need for additional support,
office and parking. Building J is 48,216 square feet with a valuation of $8.4 million dollars and the 2-
story, 3 1/2 tiered parking structure is 70,201 square feet with a valuation of approximately $4 million
dollars.
Commercial/Retail.
Westfield Culver City — is a newly remodeled 1.3 million sq. ft regional retail mall. The
renovation includes a 167,000 sq. ft. mall expansion that provides new retail and restaurant tenant space.
New tenanting includes Target, Best Buy, Forever 21, H & M, Coach, Hollister and BJ's Brewhouse.
Westfield Culver City improvements were valued at $180 million dollars. The Redevelopment Agency
contributed tax increment toward the renovation to leverage the renovation. The mall received 10 million
visitors last year, currently employs 2,000 people and is exceeding sales tax projections.
Downtown Area. In 2003, OliverMcMilla.n Culver City, LLC opened a mixed-use entertainment
complex, Town Plaza Development, in the heart of downtown. The project includes a 1,850 seat Pacific
13-2
48,t, Theaters Culver Stadium 12 cinema (12 screens), a Trader Joe's Market, Daphne's Greek Café and
Coldstone Creamery. Town Plaza, a major pedestrian plaza expansion valued at approximately $3
million dollars will commence with improvements that include special paving, lighting, landscaping and
water features and will provide a new venue for special arts and music events and connect to the Parcel B
redevelopment and Culver Hotel. The Redevelopment Agency is currently soliciting developer interest to
develop an entitled 118,000 sq. ft. office and retail project on the Agency's last major, un-built
redevelopment parcel in downtown. The project is valued at more than $70 million. Plans for Parcel B
(currently vacant) consist of a three-story building containing 115,108 gross leasable square-feet, of
which 40,335 square-feet of space is for ground floor retail or restaurant/cafe space, arid 74,773 square-
feet of office space. Other restaurants in the Downtown area include Rush Street, Gyenari, Kay &
Dave's, Tender Greens, Ford's Filling Station, K-ZO, Novecento Pasta & Grill,
Santa Maria Barbecue Co. Cafe, Native Foods, Le Epicene Market, Libra, Lunch, Le Saint Amour, Meet,
Kaizuka, Honey Kettle's Fried Chicken, Ugo Italian Café, The Culver Hotel and Starbuck's Coffee.
Businesses include Gregg Fleishman Gallery, Wonderful World of Animation, Alandales, The Wellness
Spa and Wolcott Architecture and Interiors. The Redevelopment Agency has entered into an ENA to
redevelop Agency owned property in the downtown for a new jazz theater located adjacent to the
redeveloped Kirk Douglas Theater. The project will provide a 150 seat jazz theater, community
performing space, jazz museum and ground level cafe. The Redevelopment Agency has entered into a
long-term parking agreement to supply the historic Culver Hotel with off-site parking to accommodate
guest parking needs. The agreement requires the hotel to make more than $2 million in improvements and
ensures the ongoing operation of the hotel as a high-quality, boutique hotel.
Kite ,Site Master Plan. In ,1994, the Agency approved a DDA with Office Depot, Inc., Circuit
City Stores, Inc., and General Motors, for a master planned development for the Kite Site, a major parcel
owned by the Agency. The 25,000 squnre-foot Office Depot and the 33,000 square-foot Sprouts opened
in Summer 2010. Sprouts Farmer's Market opened in June 2010 providing a 32,000-square-foot grocery
store which is the chain's first LEED-certified market and its second using refrigerant technologies that
will qualify for the EPA's environmentally friendly GreenChill certification. The project improvements
are valued at $1.5 million.
Target Shopping Center.
In 2005, Target spent approximately $3 million remodeling their
133,116 square-foot store, including the sales floor, stock rooms, snack bar, pharmacy and restrooms. In
March 2005, Bed, Bath & Beyond submitted building plans for $850,000 in tenant improvements to
occupy an existing 27,396 square-foot retail space adjacent to Target.
Studio Village Shopping Center. This five-acre, 55,675 square-foot retail commercial
development consists of 15 shops, including a Pavilions, TJ Maxx, Ross Dress for Less, Rite Aid Drug,
Carter's, Pier 1 Imports and PETsMART.
Culver Center. (formerly Westside Walk) is a 50-year old community shopping center that was
rehabilitated in 2000 pursuant to a DDA with the Agency. Major tenants of this 10.5 acre, 204,725
square-foot facility include a 45,000 square-foot Best Buy with an upper-level parking deck, and 48,000
square-foot Ralphs Market, Rite-Aid Drug, Sit 'n Sleep, Bally's Health Club, Starbuck's, Best Buy, a
branch of Bank of America, and several food establishments including Baja Fresh, Panda Express,
Subway, CPK ASAP and Famima. The Culver Center is owned by Culver Center Partners, LLC.
Car Dealerships. The Project Area contains four car dealerships, including Mike Miller Toyota,
Mike Miller Honda, BUIE1) Chevrolet and Westside Volvo.
B-3
s
le‘ Costco. A 223,000 square-foot commercial development was completed on an 18-acre site on
Washington Boulevard, which includes a Costco Store (opened in 1999), Albertson's Market, Starbucks
Coffee, First Federal Bank and other retail tenants.
Washington National --The Triangle Site — The Agency has assembled $24 million of property
and entered into multi-party agreements with the Metropolitan Transit Authority, the Expo Construction
Authority and the City of Los Angeles to develop a 5.1 acre Transit Oriented Development project at the
Washington National Triangle Site. The mixed use development project will include up to 150 housing
units, 200,000 sq. ft. of office, 70,000 sq. ft. of retail and restaurants, a 148 room boutique hotel with a
1/3 acre of open space and is valued at $250 million.
Washington National Area Improvement Plan — The Agency has committed $4 million to
infrastructure and streetscape improvements for the emerging transit oriented development district around
Washington National.
Washington Centinela — is a 25,000 sq. ft. market hall, office and retail development which
includes a new 245 car public parking garage planned for the West Washington area. The project is
valued at $28 million will anchor the westerly part of the city. The development will offer sit-down
dining, unique/high-quality food products (gourmet pastries, meats, spices, produce, etc.), and
neighborhood serving retail.
The Baldwin Site - The Baldwin Hotel property located at 12803 West Washington Blvd will be
redeveloped with a 35,000 sq. it office/retaillrestaurant project. The site is entitled and in a Development
and Disposition Agreement. The project will provide a new creative office building and public parking
available to business/property owners in the area. The building will feature a sustainable design including
a green roof, solar photovoltaics and natural lighting, heating and cooling.
ECF / Machado Road Parking- RDA is working with Exceptional Children's Foundation (ECF)
to re-use a remnant parcel of land near Jefferson Blvd. and Machado to develop school parking facilities.
Residential.
Tilden Terrace —
is a mixed use retail and affordable housing development located at 11042 -
11056 Washington Blvd in the West Washington Area. The Agency entered into an ENA to develop the
site with office and retail uses. The project includes new streetscape and capital improvements and a new
area commercial rehabilitation program for abutting properties. The project is valued at approximately
$21 million dollars.
Globe Avenue Housing - The Agency is in the process of selecting a development company to
redevelop Agency owned property for a twelve unit housing development valued at $6.3 million.
The Classics at Heritage Park. In 1998, the Agency approved a DDA with Braemar Urban
Ventures, The Lee Group, Inc, and the Educational Resource and Services Center, Inc. (ERAS) for the
sale and development of the former Studio Drive-In Theatre, a nine-acre site located between Sepulveda
Boulevard and Jefferson Boulevard. The development, which was completed in 2000, consists of 57
single family dwellings, known as "The Classics at Heritage Park" and a 39,000 square-foot facility for
the Kayne-ERAS Center.
Grand View Palms. Building permits were issued in 2002 for the development of a new 70 unit
residential assisted living/elderly care facility. The project is currently under construction.
Development costs are valued at approximately $5,613,000.
B-4
cso Public Improvements and Facilities.
City Hall and Other Public Buildings. The Agency funded and managed the construction of an
80,000 square-foot City Hall, completed in the summer of 1995. Also in Downtown, the Agency funded
construction of the 330-space Watseka Public Parking Structure (completed in 1992), Replacement Fire
Station No. 1 (completed in 1993), and construction of the 400-space Cardiff Public Parking Structure
(completed in 1999).
Downtown Streetscape. The City and Agency have made the reanimation of the Downtown area
a priority and have recently funded numerous improvements to Culver Boulevard including 30-foot wide
sidewalks, street furniture, landscaped median islands, street trees, reconstruction of the
Culver/Washington Boulevard intersection, and funding of extensive public art installations. Other
improvements include facade grants to renovate existing buildings and the construction of three parking
structures to provide a total of 1,530 parking spaces to serve the Downtown area.
Kirk Douglas Theatre. In 1985, the Agency acquired the Culver Theater, a motion picture
theater. The Agency approved an agreement with Center Theatre Group, the performing arts group that
operates the Mark Taper Forum and Ahmanson Theater in Los Angeles, to renovate and operate this
facility as a 320-seat live performing arts venue. The theater was renamed the Kirk Douglas Theatre in
honor of a $2.5 million donation by Anne and Kirk Douglas. Construction was completed October 2004.
Ivy Substation and Media Park. Pursuant to the terms of a 50-year lease executed in 1987 with
the City of Los Angeles, the Agency completed the award winning renovation of Ivy Substation and
Media Park. The Ivy Substation is an historic building identified on the National Register of Historic
Places. This facility can be rented for private parties, and is also used for cultural activities and as a live
performance venue. In June 2005, the Agency announced that one of Southern California's most
successful theater companies, The Actors' Gang, with artistic director Tim Robbins, is the resident
company at the Theatre. The Actors' Gang's five-year contract begins on July 1, 2005. Having The
Actors' Gang as a resident theater company in the Ivy provides a theatre district anchored by the Kirk
Douglas Theatre on one end and the Ivy on the other end of historic downtown along Culver Boulevard.
Police Headquarters. A 10,000 square-foot expansion to the Culver City Police Department
headquarters facility, funded and managed by the Agency, was completed in 1999.
Senior Center. Construction was completed in 2003 for a new 27,300 square-foot senior center
on the three-acre former Interim City Hall site at 4095 Overland Avenue.
Paseo Network. In November 1997, the Agency approved the Paseo Network Concept Plan,
which set forth the framework and priorities for making improvements to alleyways in the Downtown
area. The Agency completed the first link of the Paseo Network in 1997 with improvements adjacent to
9523 Culver Blvd., and a second phase in 1999. The Agency completed the third and fmal phase in 2002.
Revitalization Programs.
West Washington Area Improvement Plan — Three new revitalization demonstration projects have
been initiated in the westerly part of the city to promote redevelopment around two Agency owned
redevelopment sites (Washington Centinela and Baldwin). The twelve block area includes a total funding
commitment $2.1 million to revitalize the area. To date, $660,000 of private reinvestment has been
leveraged with commercial grants, loans and public improvements.
B-5 Sepulveda Boulevard Area Improvement Plan — The Agency has committed $1 million dollars to
establish a new revitalization demonstration area along twelve blocks of the Sepulveda Boulevard
commercial corridor. The plans include new streetscape and crosswalk improvements and commercial
rehabilitation matching grants and gap loans.
B-6 APPENDIX C
CULVER CITY GENERAL INFORMATION
General
The city of Culver City (the "City") is situated on the western portion of Los Angeles County (the
"County"), approximately five miles north of the Los Angeles International Airport and five miles east of
the Marina del Rey small craft harbor and the Pacific Ocean. The City is bordered on all sides by the City
of Los Angeles, with the exception of a portion of the eastern side at which the boundary is contiguous
with unincorporated County territory.
The City is located within the heart of the La BaRona Valley, which was originally inhabited by
Native Americans and then farther settled in the eighteenth century by ranchers who utilized the resources
of the temperate climate and availability of water in Ballona Creek. With the advent of a railroad
connecting downtown Los Angeles to the Pacific Ocean coastline, the City's location along the railroad
line facilitated subsequent development culminating in the creation of the City through incorporation in
1917.
Since its inception, Culver City has been intimately intertwined with the motion picture industry.
Prior to incorporation, Thomas Ince built his film studio in 1915, which became Metro-Goldwyn-Mayer
(MGM) in 1924. Other studios have located in Culver City over the past seven decades, including Hal
Roach Studios, David Selznick International, RKO-Pathe, Desilu, Lorimar, Sony Pictures Entertainment,
Columbia, Tri-Star, and Cecil B. Demille Picture Corp. In the decades following the end of World War
11, the City also became a center for specialized aerospace contracting firms, movie studios, and small
office development.
The City's favorable location in the western section of the County, traversed by the San Diego
and Route 90 freeways and immediately adjacent to the Santa Monica Freeway, has resulted in a strong
economic base for the community. At the present time, the entertainment, medical, design and digital
industries provide the largest sources of community employment. The City is considered the "Heart of
Screenland." Sony Pictures Entertainment, a major television and movie producer, anticipates that it will
continue to be the largest employer in the City. Many other entertainment industry firms have moved into
newly renovated buildings throughout the City (including HSI Productions and GMT).
Government and Administration
The City was incorporated as a general law city on September 17, 1917 and became a charter city
on January 17, 1947. The charter provides for a council-manager form of government. The City
Council's role of making policy decisions is supplemented by the City Manager's supervision of day-to-
day functions.
Members of the City Council are elected to alternating four-year terms. The Mayor is selected
annually by the Council from among its members. The City charter does not require primary elections,
and filing fees are minimal in order to provide the opportunity for persons with varying backgrounds to
seek public office.
The City government is operated on the Civil Service System of merit appointment and
promotion. Positions of the City Manager, City Attorney and other department heads are direct appointees
of the City Council. The remaining positions, including the division department heads and their
employees, are filled by appointments based on competitive examinations. The City is directly
C-1
11 responsible for providing all municipal services with the exception of library services and health
department services, both of which are provided by the County.
Population
Population figures for the City, the County and the State for 1970, 1980 1990, 2000 and the last
five years are shown in the following table. The City has been substantially built out since the 1970s.
CITY OF CULVER CITY
Population Estimates
Year
1970
1980
1990
2000
2006
2007
2008
2009
2010
City of Culver City
34,451
38,150
39,550
38,816
40,516
40,401
40,399
40,507
40,722
County of Los
Angeles
7,041,980
7,441,700
8,832,500
9,519,330
10,202,094
10,231,000
10,285,296
10,355,053
10,441,080
State of California
19,953,902
23,667,902
29,558,000
33,873,086
37,087,005
37,463,609
37,871,509
38,255,508
38,648,090
Source: 'State Department of Finance estimates (as of January 1, except 1990 and 2000,
which are as Of April 1).
C-2 Employer Name Location Industry
Largest Employers
The table below lists the larger employers in the Los Angeles County area as of January 1, 2011.
Major private employers in the Los Angeles area include those in the health care, electronics, retail and
package delivery industries. Major public sector employers include the State of California and the
County.
LOS ANGELES COUNTY
Major Employers
American Honda Motor Co.
California Institute of Technology
California State University
Cedars Sinai Medical Center
Century Plaza Towers
Contractors State License Center
Fire Command Control
Gold Cost Tire Co., Inc.
Kaiser Foundation Hospital
Kaiser Permanente
LAC & USC Medical Center
,Long Beach City Hall
Long Beach Financial Mgmt.
Long Beach Memorial Medical Ctr.
Los Angeles County Sheriff
Los Angeles Police Department
Nestle USA
Raytheon Space & Airborne Sys.
Santa Monica College
Six Flags
Sony Pictures Entertainment
SYNXIS
UCLA
UCLA Health System
Walt Disney Company
Torrance
Pasadena
Northridge
West Hollywood
Los Angeles
Burbank
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Long Beach ,
Long Beach
Long Beach
Monterey Park
Los Angeles
Glendale
El Segundo
Santa Monica
Valencia
Culver City
Pasadena
Los Angeles
Los Angeles
Burbank
Automobile & Truck Brokers
Non-Profit Organization
University
Hospital
Office Buildings and Parks
Vocational School
Fire Department
Batteries — Storage & Retail
Hospital
Physicians & Surgeons
Hospital
City Government
City Finance and Taxation
Hospital
Sheriff
Police Department
Food products
Business Services
College
Amusement Park
Motion Picture Studio
Hotel
University
University
Motion Picture Studio
Source: State of California Employment Development Department.
C-3
ctS Employment
The following table summarizes the civilian labor force in Los Angeles County for the calendar
years 2005 through 2009. These figures are countywide statistics and may not accurately reflect
employment trends in the City.
LOS ANGELES COUNTY
Annual Average Industrial Employment (1)
Calendar Years 2005 through 2009
Industry 2005 2006 2007 2008 2009
Private, non-farm
Goods producing:
Natural resources and mining 3,700 4,000 4,400 - 4,400 4,100
Construction 148,700 157,500 157,600 145,200 116,500
Manufacturing - durable goods 263,400 257,300 250,900 243,200 217,100
Manufacturing - non-durable goods 208,300 204,400 198,300 191,200 172,000
Service Providing:
Wholesale trade 219,300 225,700 227,000 223,700 204,100
Retail trade 414,400 423,300 426,000 416,500 386,600
Transport., warehousing and utilities 161,700 165,200 165,600 163,100 151,700
Information 207,600 205,600 209,800 210,300 193,700
Financial activities 244,000 . 248,800 246,000 235,700 220,200
Professional and business services 576,100 598,900 605,400 582,600 528,100
Educational and health services 471,300 478,700 490,500 503,400 513,900
Leisure and hospitality 377,800 388,600 397,900 401,600 383,900
Other services 144,300 145,200 147,100 146,100 137,900
Subtotal 3,440,500 3,503,100 3,526,400 3,467,000 3,229,900
Government 583,700 589,400 595,700 603,700 599,500
Farm 7,400 7,600 7,500 6,900 6,200
Total 4,031,600 4,100,100 4,129,600 4,077,600 3,835,600
Employment reported by place of work; does not include persons involved in labor-management disputes. Figures are
rounded to the nearest hundred. Columns may not add due to rounding. Based on March 2009 benchmark. Not seasonally
adjusted.
Source: State of California, Employment Development Department.
C-4
41k) Commercial Activity
The following table summarizes the annual volume of taxable transactions within the City for
calendar years 2005 through 2009.
CITY OF CULVER CITY
Taxable Transactions
(in Thousands of Dollars)
2005 2006 2007 2008 2009
Retail Outlets
Apparel store $ 93,844 $ 94,355 $ 91,747 $ 101,836 $ 73,380
Gen. merchandise stores 367,295 383,975 385,075 363,752 125,644
Food stores 39,824 46,503 45,315 44,916 32,607
Eating & drinking places 105,274 116,730 123,440 137,212 50,175
Home furn. & appliances 62,461 75,407 74,951 92,250 61,027
Building materials 84,752 83,682 67,430 45,123 125,541
Motor vehicles & parts 213,938 195,141 178,594 123,203 331,458
Service stations 62,834 67,742 72,092 75,591 138,389
Other retail stores 243,875 253,741 267,816 225,209 156,049
Subtotal $1,274,097 $1,317,276 $1,306,460 $1,209,093 $1,094,272
All Other Outlets 278,990 310,374 312,925 318,125 249,200
All Outlets $1,553,087 $1,627,650 - $1,619,385 - $1,527,219 , $1,343,472
Source: Compiled from data published by State of California Board ofEqualization.
Construction Activity
Building activity in the City for the past five calendar years for which data is available is shown
in the following table.
CITY OF CULVER CITY
Total Building Permit Valuations
(in Thousands of Dollars)
2005 2006 2007 2008 2009
Permit Valuation
New Single-family
New Multi-family
Res. Alterations/Additions
Total Residential
New Commercial
New Industrial
New Other
Corn. Alterations/Additions
Total Nonresidential
New Dwelling Units
Single Family
Multiple Family
TOTAL
[INFORMATION TO COME]
Source: "California Building Permit Activity," Economic Sciences Corporation.
C-5 Education
Public education is provided to City residents of school age through the Culver City Unified
School District, which operates five elementary schools, one intermediate school (Culver City Middle
School), one high school (Culver City High School), one alternative high school (Culver Park High
School), an adult school and a children's center. Private elementary schools located in the City include
the Willows Community School, Turning Point School and Echo Horizon School. The Kayne-ERAS
Center and The H.E.L.P. Group West are private special academic education schools also located in the
City.
Abutting the eastern boundary of the City is the West Los Angeles Community College. This
two-year facility provides City residents an opportunity to continue their education after high school and
supplements the higher education opportunities provided at UCLA (five miles northwest of the City) and
USC (nine miles east of the City). Pepperdine University offers an off-campus Masters of Business
Administration program near the City.
Community Facilities
There are many community services available to local residents. Medical facilities include one
hospital, Brotman Medical Center, plus numerous medical clinics and convalescent hospitals. The City
also has one library, 18 churches, a local newspaper, and 11 banks with a total of 14 branches. The City's
Parks, Recreation and Community Services Department provides professional supervision for a varied
program of playground activities available to city residents at 13 city-owned parks, three gymnasiums,
and three school playgrounds open after school hours. The City maintains a community and youth center,
and a senior citizen's facility at Veterans' Memorial Park, which furnishes modern facilities for all age
groups of the community and includes the renovated Veteran' Memorial Auditorium. Ivy Substation and
Media Park, a facility leased and managed by the Agency, is used for cultural activities and as a live
performance venue.
Transportation
The area is served by the Los Angeles International Airport, the largest airport facility in
California.
The sole source of public transportation in the City is bus service. The largest transit system in
the area is operated by the Los Angeles County Metropolitan Transportation Authority, which has more
than 2,200 miles of local and inter-urban routes serving the County's cities and communities. The City
operates Culver City Bus, also known as Culver City Municipal Bus Lines, which is the second oldest
continually operating municipal bus line in California.
The City's Transportation Facility, completed in June 1999, includes a 50,000 square-foot
Administration and Maintenance Facility, a fueling island, a bus wash, a two-story, 124-space parking
structure, and a compressed natural gas fueling station.
Residents continue to rely on the automobile as the primary source of transportation. A network
of fifteen freeways facilitates intra- and inter-County travel. Major freeways include Interstate 405,
which runs through the western portion of the City on a north-south axis; Interstate 5, the main west coast
route from the Canadian border to the Mexican border; and Interstate 10, a major highway connecting the
east and west coasts. Interstate 10 is located immediately to the north of the City.
C-6
'18 APPENDIX D
AUDITED FINANCIAL STATEMENTS OF THE AGENCY
FOR FISCAL YEAR ENDED JUNE 30, 2010
D-1
(1"1 APPENDrX E
FORM OF BOND COUNSEL OPINIONS
Upon issuance and delivery of the 2011 Series A Bonds, Richards Watson & Gershon, A
Professional Corporation, Bond Counsel, proposes to render its final approving opinion with respect to
the 2011 Series A Bonds in substantially the following form:
to come]
Upon issuance and delivery of the 2011 Series B Bonds, Richards Watson & Gershon, A
Professional Corporation, Bond Counsel, proposes to render its final approving opinion with respect to
the 2011 Series B Bonds in substantially the following form:
[to come] APPENDIX F
FORM OF CONTINUING DISCLOSURE AGREEMENT
F-1
‘cA APPENDIX G
BOOK ENTRY-ONLY SYSTEM
The information in this Appendix concerning DTC and DTC 's book-entry system has been
obtained from sources that the Agency believes to be reliable, but neither the Agency nor the City takes
any responsibility for the accuracy thereof The Agency and the City give no assurances that (1) DTC, the
Direct and Indirect Participants or others will distribute payments of principal, premium (if any) or
interest with respect to the Bonds paid to DTC or its nominee as, the registered owner, to the Beneficial
Owners, (ii) such entities will distribute redemption notices or other notices, to the Beneficial Owners, or
(iii) an error or delay relating thereto will not occur.
The Depository Trust Company ("DTC"), New York, New York, will act as securities depository
for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede &
Co. (DTC' s partnership nominee) or such other name as may be requested by an authorized representative
of DTC. One fully-registered certificate will be issued for each maturity of the Bonds, each in the
aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world's largest depository, is a limited-purpose trust company organized under the New
York Banking Law, a 'banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million
issues of U.S. and non-U.S. .equity issues, corporate and municipal debt issues, and money market
instruments (from o'er WO countries) that DTC's participants ("Direct Participants") deposit with DTC.
DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants' accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company
for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which
are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the
DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers,
banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship
with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard &
Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities
and Exchange Commission. More information about DTC can be found at www.dtcc.com and
www. dtc. org .
Purchases of Bonds under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual
purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership
interests in the Bonds, except in the event that use of the hook-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are
registered in the name of DTCs partnership nominee, Cede & Co., or such other name as may be
G-1
ko requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration
in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the
identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be
the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to
the Bonds unless authorized by a Direct Participant in accordance with DTC's MAID Procedures. Under
its usual procedures, DTC mails an Omnibus Proxy to the Agency as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Principal, premium (if any) and interest payments on the Bonds will be made to Cede & Co., or
such other nominee as may be requested by an authorized representative of DTC. DTC' s practice is to
credit Direct Participants' accounts Upon DTC' s receipt of funds and corresponding detail information
from the Agency or the Trustee, on payable date in accordance with their respective holdings shown on
DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant and not of DTC, the Agency
or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.
Principal, premium (if any) and interest payments with respect to the Bonds to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the Agency
or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC,
and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time
by giving reasonable notice to the Agency or the Trustee. Under such circumstances, in the event that a
successor depository is not obtained, Bond certificates are required to be printed and delivered.
The Agency may decide to discontinue use of the system of book-entry transfers through DTC (or
a successor securities depository). In that event, Bond certificates will be printed and delivered in
accordance with the provisions of the Indenture.
G-2
VD3 APPENDIX II
FISCAL CONSULTANT REPORT
H-1
pLk APPENDIX I
ACCRETED VALUES TABLE
I-1
0S 2-10-11
2-13-11
29079-199 Attachment 6
CULVER CITY REDEVELOPMENT AGENCY
Tax Allocation Capital Appreciation Bonds,
2011 Series A
(Culver City Redevelopment Project)
Taxable Tax Allocation Bonds,
2011 Series B
(Culver City Redevelopment Project)
BOND PURCHASE AGREEMENT
,2011
Culver City Redevelopment Agency
Culver City Redevelopment Financing Authority
9770 Culver Blvd.
Culver City, CA 90232
Ladies and Gentlemen:
The undersigned (the "Underwriter") offers to enter into this Bond Purchase
Agreement (this "Purchase Contract") with the Culver City Redevelopment Financing
Authority (the "Authority") and the Culver City Redevelopment Agency (the "Agency"),
which will be binding upon the Authority, the Agency and the Underwriter upon the
acceptance hereof by the Authority and the Agency. This offer is made subject to its acceptance
by the Authority and the Agency by execution of this Purchase Contract and its delivery to the
Underwriter on or before 5:00 p.m., California time, on the date hereof. All terms used herein
and not otherwise defined shall have the respective meanings given to such terms in the
Indenture (as hereinafter defined).
Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of
the representations, warranties and agreements hereinafter set forth, the Underwriter hereby
agrees to purchase from the Authority for offering to the public, and the Authority hereby
agrees to sell to the Underwriter for such purpose, all (but not less than all) of the above-
referenced (the "Series 2011A Bonds," "Series 2011B Bonds," and, collectively, the "Bonds"), at
the following purchase prices:
Series 2011A Bonds: Purchase price equal to $ (being the aggregate
denominational amount thereof less an underwriter's discount of $ and less an
original issue discount of $ ).
Series 2011B Bonds: Purchase price equal to $ (being the aggregate
principal amount thereof less an underwriter's discount of $ and less an original
issue discount of $ ).
‘oc. The Bonds are to be purchased by the Authority from the Agency pursuant hereto for
resale and delivery to the Underwriter concurrently with the purchase of the Bonds by the
Underwriter from the Authority; provided that the obligation of the Authority to purchase the
Bonds from the Agency shall be solely with moneys provided by the Underwriter.
Section 2. Description of the Bonds; Purpose of the Bonds; Security for the Bonds.
Authority for the Bonds. The Bonds are being issued under the following:
(i) the California Community Redevelopment Law, constituting Part 1, Division
24 commencing with Section 33000) of the California Health and Safety Code (the
"Redevelopment Law"),
(ii) resolutions of the City Council of the City of Culver City (the "City")and the
Agency adopted on February 17, 2011,
(iii) an Indenture dated as of October 1, 1999, as amended by (i) a First
Supplemental Indenture dated as of April 1, 2002, (ii) a Second Supplemental Indenture
dated as of April 1, 2004, (iii) a Third Supplemental Indenture dated as of November 1,
2005, (iv) a Fourth Supplemental Indenture, dated as of June 11, 2007 and (iv) a Fifth
Supplemental Indenture, dated as of March 1, 2011 (collectively, the "Indenture"), each
by and between the Agency and U.S. Bank National Association, as successor trustee
and trustee (the "Trustee"). The Bonds shall be as described in the Indenture and the
Official Statement (as defined below) relating to the Bonds.
The Bonds shall be as described in the Indenture and the Official Statement related to
the Bonds (which, together with all exhibits and appendices included therein or attached
thereto and such amendments or supplements thereto which shall be approved by the
Underwriter, is hereinafter called the "Official Statement").
Purpose of the Bonds. The net proceeds of the Bonds will be used to (i) finance certain
redevelopment activities with respect to the Agency's Culver City Redevelopment Project (the
"Project Area"); (ii) make a deposit to a debt service reserve account for the Bonds; and (iii) pay
the costs of issuing the Bonds.
Security for the Bonds. The Bonds will be secured by a pledge of and lien on the Tax
Revenues (as defined in the Indenture) allocated to the Agency with respect to the Project Area.
"Tax Revenues" generally consist of tax increment revenues to be derived from the Project
Area, less (i) amounts needed to make loan payments on certain outstanding senior loans of the
Agency (primarily consisting of a loan securing the Culver City Redevelopment Financing
Authority's (the "Authority") outstanding 1993 Tax Allocation Refunding Revenue Bonds), (ii)
less amounts required to make unsuborclinated pass-through payments and (iii) less amounts
required by the Redevelopment Law to be deposited into the Agency's Low and Moderate
Income Housing Fund. The pledge of Tax Revenues to the Bonds will be on a parity with the
pledge of Tax Revenues to four outstanding series of bonds issued by the Agency (collectively,
the "Parity Bonds"):
(i) Tax Allocation Bonds, 1999 Series A (Culver City Redevelopment Project)
(the "Series 1999A Bonds").
-2-
16( (ii) Tax Allocation Bonds, 2002 Series A (Culver City Redevelopment Project)
(the "Series 2002 Bonds").
(iii) Tax Allocation Refunding Bonds, 2004 Series A (Culver City Redevelopment
Project) (the "Series 2004 Bonds").
(iv) Tax Allocation Refunding Bonds, 2005 Series A (Culver City Redevelopment
Project) (the "Series 2005 Bonds").
Section 3. Public Offering. The Underwriter agrees to make a bona fide public
offering of all the Bonds initially at the public offering prices (or yields) set forth on Appendix
A attached hereto and incorporated herein by reference. Subsequent to the initial public
offering, the Underwriter reserves the right to change the public offering prices (or yields) as it
deems necessary in connection with the marketing of the Bonds, provided that the Underwriter
shall not change the interest rates set forth on Appendix A. The Bonds may be offered and sold
to certain dealers at prices lower than such initial public offering prices.
Section 4. Delivery of Official Statement. The Agency has delivered or caused to
be delivered to the Underwriter prior to the execution of this Purchase Contract, copies of the
Preliminary Official Statement, dated as of , 2011, relating to the Bonds (the "Preliminary
Official Statement"). Such Preliminary Official Statement is the official statement deemed final
by the Agency for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the
"Rule") and approved for distribution by resolution , of the Agency. The Agency shall have
executed and delivered to the Underwriter a certification to such effect in the form attached
hereto as Appendix B.
Within seven (7) business days from the date hereof, the Agency shall deliver to the
Underwriter a final Official Statement, executed on behalf of the Agency by an authorized
representative of the Agency and dated the date hereof, which shall include information
permitted to be omitted by paragraph (b)(1) of the Rule and with such other amendments or
supplements as shall have been approved by the Agency and the Underwriter. The Agency
also agrees to delivery to the Underwriter, at the Agency's sole cost and at such address as the
Underwriter shall specify, as many copies of the Official Statement as the Underwriter shall
reasonably request as necessary to comply with paragraph (b)(4) of the Rule and with Rule G-
32 and all other applicable rules of the Municipal Securities Rulemaking Board.
The Agency will undertake, pursuant to the 'Indenture and a continuing disclosure
certificate (the "Continuing Disclosure Certificate"), to provide certain annual financial
information and notices of the occurrence of certain events, if material. The form of the
Continuing Disclosure Certificate is appended to the Official Statement.
Section 5. The Closing. At 8:00 a.m., California time, on , 2011 (the "Closing
Date"), or at such other time or on such earlier or later business day as shall have been
mutually agreed upon by the Agency and the Underwriter, the Authority and the Agency will
deliver (i)the Bonds in definitive form, registered in the name of Cede & Co., as the nominee of
The Depository Trust Company ("DTC"), to the Trustee (so that the Bonds may be
authenticated by the Trustee and credited to the account specified by the Underwriter under
DTC's Fast Automated Securities Transfer procedures), and (ii) the closing documents
hereinafter mentioned at the offices of Richards Watson & Gershon, A Professional
-3- Corporation, Los Angeles, California ("Bond Counsel"), or another place to be mutually agreed
upon by the Authority, the Agency and the Underwriter. The Underwriter will accept such
delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by federal
funds wire payable to the order of the Trustee. This payment and delivery, together with the
delivery of the aforementioned documents, is herein called the "Closing."
Section 6. Agency Representations, Warranties and Covenants. The Agency
represents, warrants and covenants to the Underwriter that:
(a) Due Organization and Existence of Agency. The Agency is a public body
corporate and politic, organized and existing under the laws of the State, including the
Redevelopment Law, with full right, power and authority to execute, deliver and
perform its obligations under the Indenture, the Continuing Disclosure Certificate and
this Purchase Contract (the "Agency Documents") and to carry out and consummate
the transactions contemplated by the Agency Documents and the Official Statement.
(b) Due Authorization and Approval. By all necessary official action of the
Agency, the Agency has duly authorized and 'approved the execution and delivery of,
and the performance by the Agency of the obligations contained in, the Agency
Documents and as of the date hereof, such authorizations and approvals are in fall force
and effect and have not been amended, modified or rescinded. When executed and
delivered, assuming due authorization, execution and delivery by the other parties
thereto, the Agency Documents will constitute the legally valid and binding obligations
of the Agency enforceable in accordance with their respective terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, debt adjustment,
fraudulent conveyance or transfer, moratorium, reorganization or other laws affecting
the enforcement of creditors' rights generally and equitable remedies if equitable
remedies are sought, to the exercise of judicial discretion in appropriate cases and
limitations on remedies against public agencies. The Agency has complied, and will at
the Closing be in compliance in all respects, with the terms of the Agency Documents,
provided that no representation is made with respect to compliance with the securities
or "Blue Sky' laws of the various states of the United States.
(c) Official Statement Accurate and Complete. The information relating to the
Agency, the Authority and the City contained in the Preliminary Official Statement was
as of its date, and the final Official Statement is, and at all times subsequent to the date
of the final Official Statement up to and including the Closing will be, true and correct
in all material respects, and the Preliminary Official Statement and the final Official
Statement contain, and up to and including the Closing will contain, no misstatement of
any material fact and do not, and up to and including the Closing will not, omit any
statement necessary to make the statements contained therein, in the light of the
circumstances in which such statements were made, not misleading.
(d) Underwriter' s Consent to Amendments and Supplements to Official Statement.
The Agency will advise the Underwriter promptly of any proposal to amend or
supplement the Official Statement and will not effect or consent to any such amendment
or supplement without the consent of the Underwriter, which consent will not be
unreasonably withheld. The Agency will advise the Underwriter promptly of the
institution of any proceedings known to it by any governmental agency prohibiting or
-4- otherwise affecting the use of the Official Statement in connection with the offering, sale
or distribution of the Bonds.
(e) No Breach or Default. As of the date hereof, to the best of its knowledge
based on reasonable inquiry, the Agency is not in any material respect in breach of or
default under any applicable constitutional provision, law or administrative regulation
of any state or the United States, or any agency or instrumentality of either, or any
applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the Agency is a party and which breach or
default has or may have an adverse effect on the ability of the Agency to perform its
obligations under the Agency Documents and no event has occurred and is continuing
which with the passage of time or the giving Of notice, or both, would constitute such a
default or event of default under any such instrument. The execution and delivery of
the Agency Documents, and compliance with the provisions on the Agency's part
contained in the Agency Documents will not conflict in any material way with or
constitute a material breach of or a material default under any constitutional provision,
law or administrative regulation of the State. or the United States, or any applicable
judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other
instrument to which the Agency is a party nor will any such execution, delivery,
adoption or compliance result in the creation or imposition of any lien, charge or other
security interest or encumbrance of any nature whatsoever upon any of the property or
assets of the Agency or under the terms of any such law, regulation or instrument,
except as provided by the Agency Documents.
(I) No Litigation. As of the time of acceptance hereof and the Closing, to the
best of the Agency's knowledge based on reasonable inquiry, except as disclosed in the
Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, government agency, public board or body, is pending
and the notice of which has been received by the Agency or threatened (i) in any way
questioning the corporate existence of the Agency or the titles of the officers of the
Agency to their respective offices; (ii) affecting, contesting or seeking to prohibit,
restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or
collection of any amounts pledged or to be pledged to pay the principal of and interest
on the Bonds, or in any way contesting or affecting the validity of the Bonds or the
Agency Documents or the consummation of the transactions contemplated thereby, or
contesting the exclusion of the interest on the Bonds from taxation or contesting the
powers of the Agency and its authority to pledge the Tax Revenues; (iii) which may
result in any material adverse change relating to the Agency; or (iv) contesting the
completeness or accuracy of the Preliminary Official Statement or the final Official
Statement or any supplement or amendment thereto or asserting that the Preliminary
Official Statement or the final Official Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and there is no basis for any action, suit, proceeding,
inquiry or investigation of the nature described in clauses (i) through (iv) of this
sentence.
(g) Excess Surplus. The Agency's Low and Moderate income Housing Fund
established pursuant to Section 33334.3 of the Redevelopment Law does not on the date
hereof, and will not on the date of the Closing, contain an "excess surplus" (within the
-5-
k [t) meaning of Section 33334.12 of the Redevelopment Law) that would cause the Agency
to be subject to the sanctions contained in Section 33334.12(e)(1) of the Redevelopment
Law.
(h) Court Order. The Agency is not s,ubject to a court order rendered pursuant
to Section 33080.8 of the Redevelopment Law prohibiting the Agency from among other
things, issuing, selling, offering for sale, or delivering bonds or other evidences of
indebtedness.
(i)
Arbitrage Certificate. The Agency has not been notified of any listing or
proposed listing by the Internal Revenue Service to the effect that it is a bond issuer
whose arbitrage certificates may not be relied upon.
• a) Prior Liens on the Tax Revenues; Bonded Indebtedness. As of the date hereof,
the Agency has not previously pledged the Tax Revenues as security for any obligation
other than the Parity Bonds. The Agency has complied with the applicable provisions of
the Indenture relating to the issuance of obligations on a parity with the Parity Bonds in
• connection with execution and delivery of the Bonds. As of the date hereof, there will be
no "bonded indebtedness" of the Agency outstanding payable from tax increment
derived from the Project Area which is counted towards the "bonded indebtedness
limit" of the Agency established pursuant to Section 33334.1 of the Redevelopment Law
other than the 1993 Bonds and the Parity Bonds.
(k) Compliance With Rule 15c2-12. The Preliminary Official Statement heretofore
delivered to the Underwriter is deemed final by the Agency as of its date and as of the
date hereof, except for the omission of such information as is permitted to be omitted in
accordance with paragraph (b)(1) of Rule 15c2-12. The Agency hereby covenants and
agrees that, within seven business days from the date hereof, the Agency shall cause a
final printed form of the Official Statement to be delivered to the Underwriter in
sufficient quantity to comply with paragraph (b)(4) of Rule 15c2-12 and rules of the
Municipal Securities Rulernaking Board. The Agency has not failed to comply with any
material provision of a continuing disclosure undertaking in the past five years.
(1) Additional Deposits to Low and Moderate Income Housing Fund. In order that
the Agency shall not become subject to the additional deposits into the Low and
Moderate Income Housing Fund mandated by Section 33334.2(k)(3) or (4) of the
Redevelopment Law or Section 33690(c) or Section 33690.5(c) of the Redevelopment
Law, the Agency shall pay or cause to be paid timely to the Los Angeles County
Auditor-Controller the amounts required to be paid by Section 33690 and Section
33690.5 of the Redevelopment Law and, if applicable, shall repay timely to the Low and
Moderate Income Housing Fund any deposit suspended or amount borrowed from the
Low and Moderate Income Housing Fund for the purpose of making such payments to
the Los Angeles County Auditor Controller.
(m) Filing Requirements. As of the time of acceptance hereof and of the date of
the Closing, except as otherwise disclosed in the Official Statement, the Agency has
made all the filings required by Section 33080, Section 33334.6 (if applicable) and Section
33675 of the Redevelopment Law.
-6- (n) No Use for City Hall. In accordance with Section 33445(g) of the
Redevelopment Law, no portion of the proceeds of the Bonds will be used to pay for,
directly or indirectly, property of any sort to be used for a city hall, unless the Agency
used proceeds of the such refunded obligations issued prior to January 1, 1994 for such
purpose, as evidenced by documents approved at the time of the issuance, or otherwise
as permitted under such section.
(o) Pass-Through Liabilities, For purposes of Health and Safety Code Section
33684 and related sections, the Agency has not been listed on the most recent
Controller's report pursuant to subparagraph (B) or (E) of Section 33684(g)(1) related to
reporting deficiencies outstanding pass-through liabilities.
(P) Supplemental Educational Revenue Augmentation Fund. The Agency has
paid all amounts due and payable as of the date hereof pursuant to Health and Safety
Code Sections 33690 and 33690.5 to the Supplemental Educational Revenue
Augmentation Fund or otherwise and has budgeted sufficient existing resources to pay
the amount payable for fiscal year 2010-11.
(q) Relationship to Underwriter. The Agency acknowledges and agrees that (i)
the purchase and sale of the Bonds pursuant to this Agreement is an arm's-length
commercial transaction among the Authority, the Agency and the Underwriter, (ii) in
connection therewith and with the discussions, undertakings and procedures leading
up to the consummation of such transaction, the Underwriter is and has been acting
solely as a principal and is not acting as the agent or fiduciary of the Agency, (iii) the
Underwriter has not assumed an advisory or fiduciary responsibility in favor of the
Agency with respect to the offering contemplated hereby or the discussions,
undertakings and procedures leading thereto (irrespective of whether the Underwriter
has provided other services or is currently providing other services to the Agency on
other matters) and the Underwriter has no obligation to the Agency with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement and (iv) the Agency has consulted its own legal, financial and other advisors
to the extent it has deemed appropriate.
Section 7. Authority Representations, Warranties and Covenants. The Authority
represents, warrants and covenants to the Underwriter -that:
(a) Due Organization and Existence of Authority. The Authority is a joint
powers authority, duly organized and existing, and authorized to transact business and
exercise powers under and pursuant to the' provisions of the laws of the State of
California and has, and on Closing date will have, full legal right, power and authority
to enter into this Purchase Contract, and to carry out and to consummate the
transactions contemplated by this Purchase Contract.
(b)
Official Statement Accurate and Complete. The information relating to the
Authority contained in the Preliminary Official Statement and the final Official
Statement is correct in all material respects and does not contain any untrue statement
of a material fact or omit to state any material fact required to be .stated therein or
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
-7- (c) Purchase and Sale of Bonds. The Bonds will be purchased and sold by the
Authority pursuant to the Mark-Roos Local Bond Pooling Act of 1985, constituting
Article 4 of Chapter 5, Division 7 of Title 1 (commencing with Section 6584) of the
California Government Code (the "JPA Act").
(d) Compliance with Law. The Authority has complied, and will on the
Closing Date be in compliance, in all respects, with the JPA Act and all other applicable
laws of the State of California (and it is understood that the Authority is not responsible
for compliance with or the consequences of failure to comply with applicable "Blue Sky"
laws).
(e) Relationship to Underwriter. The Authority acknowledges and agrees that
(i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm's-
length commercial transaction among the Authority, the Agency and the Underwriter,
(ii) in connection therewith and with the discussions, undertakings and procedures
leading up to the consummation of such transaction, the Underwriter is and has been
acting solely as a principal and is not acting as the agent or fiduciary of the Authority,
(iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of
the Authority with respect to the offering contemplated hereby or the discussions,
undertakings and procedures leading thereto (irrespective of whether the Underwriter
has provided other services or is currently providing other services to the Authority on
other matters) and the Underwriter has no obligation to the Authority with respect to
the offering contemplated hereby except the obligations expressly set forth in this
Purchase Contract and (iv) the Authority has consulted its own legal, financial and
other advisors to the extent it has deemed appropriate.
Section 8. Closing Conditions. The Underwriter has entered into this Purchase
Contract in reliance upon the representations, warranties and covenants herein and the
performance by the Agency of their respective obligations hereunder, both as of the date hereof
and as of the date of the Closing. The Underwriter's obligations under this Purchase Contract
to purchase and pay for the Bonds shall be subject to the following additional conditions:
(a) Bring-Down Representation. The representations, warranties and
covenants of the Authority and the Agency contained herein shall be true, complete and
correct at the date hereof and at the time of the Closing, as if made on the date of the
Closing.
(b)
Executed Agreements and Performance Thereunder. At the time of the
Closing (i) the Agency Documents shall be in full force and effect, and shall not have
been amended, modified or supplemented except with the written consent of the
Underwriter and (ii) there shall be in full force and effect such resolutions of the
Agency, the City of Culver City (the "City") and the Authority (the "Resolutions") as,
in the opinion of Bond Counsel, shall be necessary in connection with the transactions
contemplated by this Purchase Contract, the Official Statement and the Agency
Documents.
(c) Closing Documents. At or prior to the Closing, the Underwriter shall
receive each of the documents identified in Section 9.
-8- Section 9. Closing Documents. In addition to the other conditions to the
Underwriter's obligations under this Purchase Contract to purchase and pay for the Bonds, at
or before the Closing the Underwriter shall receive each of the following documents, provided
that the actual payment for the Bonds by the Underwriter and the acceptance of delivery
thereof shall be conclusive evidence that the requirements of this Section 9 shall have been
satisfied or waived by the Underwriter.
(a) Bond Counsel Opinions. An approving opinion of Bond Counsel for each
series of Bonds, dated the date of the Closing and substantially in the form appended to
the Official Statement, together with a letter from Bond Counsel, dated the date of the
Closing and addressed to the Underwriter, to the effect that the foregoing opinion may
be relied upon by the Underwriter to the same extent as if such opinion were addressed
to it.
(b) Supplemental Opinion. A supplemental opinion or opinions of Bond
Counsel addressed to the Underwriter, in form and substance acceptable to the
Underwriter, and dated the date of the Closing substantially to the following effect:
(1) The Agency has full power and authority to execute,
deliver and perform its obligations under this Purchase Contract, and this
Purchase Contract has been duly authorized, executed and delivered by
the Agency and constitutes the valid, legal and binding agreement of the
Agency enforceable in accordance with its terms.
(2) The statements contained in the Official Statement
pertaining to the Bonds under the captions "THE 2011 BONDS,"
"SECURITY FOR THE 2011 BONDS," and "CONCLUDING
INFORMATION - Tax Matters," and in APPENDIX A - "Summary of
Certain Provisions of the Indenture" and APPENDIX E - "Form of Bond
Counsel Opinions," insofar as such statements purport to summarize
certain provisions of the Bonds, the Indenture and the final approving
opinions of Bond Counsel, fairly and accurately summarize the
information presented therein.
(3)
The Bonds are • exempt from registration under the
Securities Act of 1933, as amended, and the Indenture is exempt from
qualification pursuant to the Trust Indenture Act of 1939, as amended.
(c) Agency Counsel Opinion. An opinion of Counsel to the Agency, dated the
date of the Closing and addressed to the Underwriter, in form and substance acceptable
to the Underwriter substantially to the following effect:
(1) The Agency has full power and authority to execute,
deliver and perform its obligations under the Agency Documents, and
the Agency Documents have been duly authorized, executed and
delivered by the Agency and constitute the valid, legal and binding
agreements of the Agency enforceable in accordance with their respective
terms.
-9- (2) The Agency is a public body corporate and politic duly
organized and validly existing under the laws of the State of California.
(3)
The resolution of the Agency approving and authorizing
the execution and delivery of the Agency Documents, and approving the
Official Statement, has been duly adopted and is in full force and effect
and has not been modified, amended or rescinded.
(4) The statements contained in the Official Statement under
the captions "THE AGENCY," "THE CULVER CITY REDEVELOPMENT
PROJECT," "TAX REVENUES," and "CONCLUDING INFORMATION -
Litigation," fairly and accurately summarize the information presented
therein; provided that Agency Counsel need not express any opinion
with respect to any financial or statistical information contained therein.
(5)
Except as otherwise disclosed in the Official Statement and
to the best knowledge of such counsel after due inquiry, there is no
litigation, proceeding, action, suit, or investigation at law or in equity
before or by any court, governmental agency or body, pending or
threatened against the Agency, (a) challenging the creation, organization
or existence of the Agency, or the validity of the Agency Documents, or
(b) seeking to restrain or enjoin the repayment of the Bonds, or (c) in any
way contesting or affecting the validity of the Agency Documents, or (d)
contesting the authority of the Agency to enter into or perform its
obligations under any of the Agency Documents, or (e) which, in any
manner, questions the right of the Agency to use the Tax Revenues for
repayment of the Bonds, or (f) affects in any manner the right or ability of
the Agency to collect or pledge the Tax Revenues.
(d) Authority Counsel Opinion. An opinion of counsel to the Authority, dated
the Closing Date and addressed to the Underwriter, to the effect that:
(1) The Authority is a public body, corporate and politic, organized
and existing under the laws of the State;including the jPA Act.
(2) This Purchase Contract has been duly authorized, executed and
delivered by the Authority and constitutes the valid, legal and binding
agreement of the Authority enforceable in accordance with its terms.
(3)
The resolution of the Authority approving and authorizing the
execution and delivery of this Purchase Contract (the "Authority Resolution")
was duly adopted at a meeting of the Authority which was called and held
pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout and the Authority Resolution is in
full force and effect and has not been modified, amended or rescinded
(4) To the best of such counsel's knowledge after due investigation,
there is no action, suit, proceeding or investigation at law or in equity before or
by any court, public board or body pending or threatened against or affecting
the Authority to restrain or enjoin the Authority's participation in, or in any way
-10-
( contesting the existence of the Authority or the powers of the Authority with
respect to the transactions contemplated by this Purchase Contract.
(e) City Attorney Opinion. An opinion of the City Attorney, dated the Closing
Date and addressed to the City and the Underwriter, in form and substance acceptable
to Bond Counsel and the Underwriter, substantially to the following effect:
(1)
The City is a general law city and municipal corporation duly
organized and validly existing under the laws and the Constitution of the State
of California.
(2) The resolution of the City approving and authorizing issuance of
the Bonds (the "City Resolution") is in full force and effect and has not been
modified, amended or rescinded.
(f) Trustee Counsel Opinion. The opinion of counsel to the Trustee, dated the
date of the Closing, addressed to the Underwriter, to the effect that:
(1) The Trustee is a nationalbanking association, duly organized and
validly existing under the laws of the United States of America, having full
power to enter into, accept and administer the trusts created under the
Indenture.
(2) The Indenture has been duly authorized, executed and delivered
by the Trustee, has been duly authorized, executed and delivered by the Trustee,
and constitutes the legal, valid and binding obligation of the Trustee, enforceable
in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights generally and by the application of equitable principles, if equitable
remedies are sought.
(3) Except as may be required under Blue Sky or other securities laws
of any state, no consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the Trustee that
has not been obtained is or will be required for the execution and delivery of the
Indenture, or the consummation of the transactions contemplated by the
Indenture.
(g) Disclosure Counsel Letter. A letter from the Agency's disclosure counsel
("Disclosure Counsel"), dated the Closing Date, and addressed to the Underwriter, to
the effect that during the course of serving as Disclosure Counsel in connection with the
execution and delivery of the Bonds arid without having undertaken to determine
independently or assuming any responsibility for the accuracy, completeness or fairness
of the statements contained in the Official Statement, no information came to the
attention of the attorneys in such firm rendering legal services in connection with the
issuance of the Bonds that would lead them to believe that the Official Statement
(excluding therefrom the financial statements, any financial or statistical data, or
forecasts, charts, numbers, estimates, projections, assumptions or expressions of opinion
included in the Official Statement, information relating to DTC and its book-entry only
system and the appendices to the Official Statement as to which no opinion need be
-11-
l() expressed), as of the date thereof, contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made,
not misleading;
(h) Underwriter's Counsel Opinion. An opinion of Jones Hall, A Professional
Law Corporation, San Francisco, California, as counsel to the Underwriter
("Underwriter's Counsel"), dated the Closing Date, and addressed to the Underwriter,
to the effect that:
(1) during the course of serving as Underwriter's Counsel in
connection with the execution and delivery of the Bonds and without having
undertaken to determine independently or assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the Official
Statement, no information came to the attention of the attorneys in such firm
rendering legal services in connection with the issuance of the Bonds that would
lead them to believe that the Official Statement (excluding therefrom the
financial statements, any financial or statistical data, or forecasts, charts,
numbers, estimates, projections, assumptions or expressions of opinion included
in the Official Statement, information relating to DTC and its book-entry only
system and the appendices to the Official Statement as to which no opinion need
be expressed), as of the date thereof, contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(2) the Bonds are exempt from registration pursuant to the Securities
Act of 1933, as amended.
(i) Agency Certificate. A certificate of the Agency, dated the date of the
Closing, signed on behalf of the Agency by the Executive Director or other duly
authorized officer of the Agency to the effect that:
(1)
The representations, warranties and covenants of the Agency
contained in this Purchase Contract are true and correct in all material respects
on and as of the date of the Closing as if made on the date of the Closing and the
Agency has complied with all of the terms and conditions of this Purchase
Contract required to be complied with by the Agency at or prior to the date of
the Closing.
(2) No event affecting the Agency has occurred since the date of the
Official Statement which has not been disclosed therein or in any supplement or
amendment thereto which event should be disclosed in the Official Statement in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
a) Authority Certificate. A certificate of the Authority, dated the date of the
Closing, signed on behalf of the Authority by the Executive Director or other duly
authorized officer of the Authority to the effect that:
-12-
Ui (1) The representations, warranties and covenants of the Authority
contained herein are true and correct in all material respects on and as of the
date of the Closing as if made on the date of the Closing and the Authority has
complied with all of the terms and conditions of this Purchase Contract required
to be complied with by the Authority at or prior to the date of the Closing.
(2) No event affecting the Authority has occurred since the date of
the Official Statement which has not been disclosed therein or in any
supplement or amendment thereto which event should be disclosed in the
Official Statement in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(3)
Except as otherwise disclosed in the Official Statement and to the
best knowledge of such signing officer after due inquiry, there is no litigation,
proceeding, action, suit, or investigation at law or in equity before or by any
court, governmental Authority or body, pending or threatened against the
Authority, challenging the creation, organization or existence of the Authority,
or the validity of this Purchase Contract or contesting the authority of the
Authority to enter into or perform its obligations under this Purchase Contract.
(k) Trustee's Certificate. A certificate of the Trustee, dated the date of Closing,
in form and substance acceptable to counsel for the Underwriter, to the following effect:
(1) The Trustee is duly organized and existing as a banking
corporation in good standing under the laws of the State of California, having
the full power and authority to enter into and perform its duties under the
Indenture and the Escrow Agreement.
(2) The Trustee is duly authorized to enter into the Indenture and the
Escrow Agreement.
(3)
To its best knowledge after due inquiry, there is no action, suit,
proceeding or investigation, at law or in equity, before or by any court or
governmental agency, public board or body that has been served on the Trustee
or threatened against the Trustee which in the reasonable judgment of the
Trustee, would affect the existence of the Trustee or in any way contesting or
affecting the validity or enforceability of the Indenture or the Escrow Agreement
or contesting the powers of the Trustee or its authority to enter into and perform
its obligation under the Indenture or the Escrow Agreement.
(1) Documents. An original executed copy of each of the Agency Documents
and a certified copy of each of the Resolutions.
(m) Ratings. Evidence that the Bonds have been given the rating shown in
the Official Statement.
(n) Fiscal Consultant. A certificate dated the Closing Date executed by Keyser
Marston Associates, Inc., as fiscal consultant to the Agency, in substantially the form of
Appendix C hereto.
-13-
‘1?) (0) Indenture. Evidence of compliance with the parity debt provisions of the
Indenture.
(13) Additional Documents. Such additional certificates, instruments and other
documents as Bond Counsel, the Agency or the Underwriter may reasonably deem
necessary.
If the Agency or the Authority shall be unable to satisfy the conditions contained in this
Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the
Underwriter nor the Agency or the Authority shall be under further obligation hereunder,
except as further set forth in Section 11 hereof.
Section 10. Termination Events.
(i) The Underwriter shall have the right to terminate this Purchase Contract,
without liability therefor, by notification to the Agency and the Authority if at any time
between the date hereof and prior to the Closing:
(a) any event shall occur which causes any statement contained in the
Official Statement to be materially misleading or results in a failure of the
Official Statement to state a material fact necessary to make the statements in the
Official Statement, in the light of the circumstances under which they were
made, not misleading; or
(b)
the marketability of the Bonds or the market price thereof, in the
opinion of the Underwriter, has been materially adversely affected by an
amendment to the Constitution of the United States or by any legislation in or by
the Congress of the United States or by the State, or the amendment of
legislation pending as of the date of this Purchase Contract in the Congress of
the United States, or the recommendation to Congress or endorsement for
passage (by press release, other form of notice or otherwise) of legislation by the
President of the United States, the Treasury Department of the United States, the
Internal Revenue Service or the Chairman or ranking minority member of the
Committee on Finance of the United States Senate or the Committee on Ways
and Means of the United States House of Representatives, or the proposal for
consideration of legislation by either such Committee or by any member thereof,
or the presentment of legislation for consideration as an option by either such
Conimittee, or by the staff of the Joint Committee on Taxation of the Congress of
the United States, or the favorable reporting for passage of legislation to either
House of the Congress of the United States by a Committee of such House to
which such legislation has been referred for consideration, or any decision of any
Federal or State court or any ruling or regulation (final, temporary or proposed)
or official statement on behalf of the United States Treasury. Department, the
Internal Revenue Service or other federal or State authority materially adversely
affecting the federal or State tax status of the Agency, or the interest on bonds or
notes or obligations of the general character of the Bonds; or
(c) any legislation, ordinance, rule or regulation shall be introduced
in, or be enacted by any governmental body, department or agency of the State,
44-
t ‘Qc or a decision by any court of competent jurisdiction within the State or any court
of the United States shall be rendered which, in the reasonable opinion of the
Underwriter, materially adversely affects the market price of the Bonds; or
(d) legislation shall be enacted by the Congress of the United States,
or a decision by a court of the United States shall be rendered, or a stop order,
ruling, regulation or official statement . by, or on behalf of, the Securities and
Exchange Commission or any other governmental agency having jurisdiction of
the subject matter shall be issued or made to the effect that the issuance, offering
or sale of obligations of the general character of the Bonds, or the issuance,
offering or sale of the Bonds, including all underlying obligations, as
contemplated hereby or by the Official Statement, is in violation or would be in
violation of, or that obligations of the general character of the Bonds, or the
Bonds, are not exempt from registration under, any provision of the federal
securities laws, including the Securities Act of 1933, as amended and as then in
effect, or that the Indenture needs to be qualified under the Trust Indenture Act
of 1939, as amended and as then in effect; or
(e)
additional material restrictions not in force as of the date hereof
shall have been imposed upon trading in securities generally by any
governmental authority or by any national securities exchange which restrictions
materially adversely affect the Underwriter's ability to trade the Bonds; or
(f)
a general banking moratorium shall have been established by
federal or State authorities; or
(g)
the United States has become engaged in hostilities which have
resulted in a declaration of war or a national emergency or there has occurred
any other outbreak of hostilities or a national or international calamity or crisis,
or there has occurred any escalation of existing hostilities, calamity or crisis,
financial or otherwise, the effect of which on the financial markets of the United
States being such as, in the reasonable opinion of the Underwriter, would affect
materially and adversely the ability of the Underwriter to market the Bonds; or
(h)
any rating of the Bonds shall have been downgraded, suspended
or withdrawn by a national rating service, which, in the Underwriter's
reasonable opinion, materially adversely affects the marketability or market
price of the Bonds; or
(i)
the commencement of any action, suit or proceeding described in
Section 6(f) hereof which, in the judgment of the Underwriter, materially
adversely affects the market price of the.Bonds; or
(i) there shall be in force a general suspension of trading on the New
York Stock Exchange.
(ii) The Agency and the Authority shall have the right to terminate this
Purchase Contract, without liability therefor, by notification to the Underwriter if at any
time between the date hereof and prior to the Closing: (a) the interests of the Agency, the Authority or the City, in the
reasonable opinion of the Agency and the Authority, have been or would be
materially adversely affected by an amendment to the Constitution of the United
States or by any legislation in or by the Congress of the United States or by the
State, or the amendment of legislation pending as of the date of this Purchase
Contract in the Congress of the United States, or the recommendation to
Congress or endorsement for passage (by press release, other form of notice or
otherwise) of legislation by the President of the United States, the Treasury
Department of the United States, the Internal Revenue Service or the Chairman
or ranking minority member of the Committee on Finance of the United States
Senate or the Committee on Ways and Means of the United States House of
Representatives, or the proposal for consideration of legislation by either such
Committee or by any member thereof, or the presentment of legislation for
consideration as an option by either such Committee, or by the staff of the Joint
Committee on Taxation of the Congress of the United States, or the favorable
reporting for passage of legislation to either House of the Congress of the United
States by a Committee of such House to -which such legislation has been referred
for consideration, or any decision of any federal or State court or any ruling or
regulation (final, temporary or proposed) or official statement on behalf of the
United States Treasury Department, the Internal Revenue Service or other
federal or State authority materially adversely affecting the federal or State tax
status of the Agency or the Authority, or the interest on bonds or notes or
obligations of the general character of the Bonds; or
(b) any legislation, ordinance, rule or regulation shall be introduced
in, or be enacted by any governmental body, department or agency of the State,
or a decision by any court of competent jurisdiction within the State or any court
of the United States shall be rendered .which, in the reasonable opinion of the
Agency and the Authority, materially adversely affects the interests of the
Agency, the Authority or the City; or
(c) the commencement of any action, suit or proceeding described in
paragraph 6(f) which, in the reasonable opinion of the Agency and the
Authority, materially adversely affects the interests of the Agency, the Authority
or the City.
Section 11. Expenses. Subject to the next paragraph, the Underwriter shall be under
no obligation to pay and the Agency shall pay or cause to be paid the expenses incident to the
performance of the obligations of the Agency and the Authority hereunder including but not
limited to (a) the costs of the preparation and printing, or other reproduction (for distribution
on or prior to the date hereof) of the Agency Documents and the cost of preparing, printing,
issuing and delivering the definitive Bonds, (b) the fees and disbursements of any counsel,
financial advisors, accountants or other experts or consultants retained by the Agency; (c) the
fees and disbursements of Bond Counsel and Disclosure Counsel; (d) the cost of printing the
Preliminary Official Statement and any supplements and amendments thereto and the cost of
printing the Official Statement, including the requisite number of copies thereof for distribution
by the Underwriter; and (e) charges of rating agencies for the rating of the Bonds.
The Underwriter shall pay and the Agency shall be under no obligation to pay all
expenses incurred by it in connection with the public offering and distribution of the Bonds,
-16-
V2-1 including fees to the MSRB, California Public Security Association and SIFMA expenses
relating to the qualification of the Bonds for offer and sale under Blue Sky or other laws of
regulations, the fees and expenses of counsel to the Underwriter, the fees of the California Debt
and Investment Advisory Commission and the CUSIP Service Bureau charge for the
assignment of CUSIP numbers to the Bonds.
Section 12. Notice. Any notice or other communication to be given to the Agency
and the Authority under this Purchase Contract may be given by delivering the same in writing
to such entity at the address set forth above. Any notice or other communication to be given to
the Underwriter under this Purchase Contract may be given by delivering the same in writing
to:
Stone & Youngberg LLC
One Ferry Building
San Francisco, CA 94111
Attention: Jim Cervantes
Section 13. Entire Agreement. This Purchase Contract, when accepted by the
Agency and the Authority, shall constitute the entire agreement between the Agency, the
Authority and the Underwriter and is made solely for the benefit of the Agency, the Authority
and the Underwriter (including the successors or assigns of any Underwriter). No other person
shall acquire or have any right hereunder by virtue hereof, except as provided herein. All the
Agency's and the Authority's representations, warranties and covenants in this Purchase
Contract shall remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Underwriter.
Section 14. Counterparts. This Purchase Contract may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the same instrument.
Section 15. Severability. In case any one or more of the provisions contained herein
shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision hereof.
Section 16. State of California Law Governs. The validity, interpretation and
performance of this Purchase Contract shall be governed by the laws of the State.
I/
-17-
t'LL Section 17. No Assignment. The rights and obligations created by this Purchase
Contract shall not be subject to assignment by the Underwriter, the Authority or the Agency
without the prior written consent of the other parties hereto.
STONE & YOUNGBERG LLC
By
Authorized Representative
Accepted as of the date first stated above:
CULVER CITY REDEVELOPMENT
FINANCING AUTHORITY
BY:
Time of Execution:
CULVER CITY REDEVELOPMENT
AGENCY
By:
Time of Execution:
-18-
-2S Yield
Maturity
Value
Maturity Date Denominational Interest
(November 1) Amount Rate
APPENDIX A
MATURITY SCHEDULES
Series 2011A Bonds
Total
Optional redemption provisions:
A-1 Series 2011B Bonds
Maturity Date Principal Interest Priced to First
(November 1) Amount Rate . Yield Price Par Call Date
Total
Optional redemption provisions: APPENDIX B
CULVER CITY REDEVELOPMENT AGENCY
Tax Allocation Capital Appreciation Bonds,
2011 Series A
(Culver City Redevelopment Project)
Taxable Tax Allocation Bonds,
2011 Series B
(Culver City Redevelopment Project)
RULE 15c2-12 CERTIFICATE
The undersigned hereby certifies and represents to Stone & Youngberg LLC (the
"Underwriter") that he is a duly appointed and acting officer of the Culver City
Redevelopment Agency (the "Agency"), and as such is to execute and deliver this Certificate
and further hereby certify and reconfirm on behalf of the Agency to the Underwriter as follows:
The undersigned hereby certifies and represents that he/she is the duly appointed and
acting Executive Director of the Culver City Redevelopment Agency (the "Agency"), and as
such is duly authorized to execute and deliver this Certificate and further hereby certifies and
reconfirms on behalf of the Agency as follows:
(1) This Certificate is delivered in connection with the offering and sale of the
above-captioned bonds (the "Bonds"), in order" to enable the underwriters of the Bonds
to comply with Securities and Exchange Commission Rule 15c2-12 under the Securities
Exchange Act of 1934 (the "Rule").
(2) In connection with the offering and sale of the Bonds, there has been
prepared a Preliminary Official Statement setting forth information concerning the
Bonds and the issuer of the Bonds (the "Preliminary Official Statement").
(3) As used herein, "Permitted Omissions" shall mean the offering price(s),
interest rate(s), selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings and other terms of the Bonds depending on such
matters, all with respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of the Rule. .
IN WITNESS WHEREOF, we have hereunto set our hands as of , 2011.
CULVER CITY REDEVELOPMENT
AGENCY
B-1
?-(;. By
Executive Director
13-2
1 APPENDIX C
CULVER CITY REDEVELOPMENT AGENCY
Tax Allocation Capital Appreciation Bonds,
2011 Series A
(Culver City Redevelopment Project)
Taxable Tax Allocation Bonds,
2011 Series B
(Culver City Redevelopment Project)
CERTIFICATE OF FISCAL CONSULTANT
The undersigned hereby states and certifies:
(i)
that the undersigned acted as fiscal consultant (the "Fiscal Consultant")
to the Culver City Redevelopment Agency (the "Agency") in connection with the
issuance by the Agency of the above-referenced bonds (the "Bonds"), and as such, is
familiar with the facts certified below and is authorized and qualified to certify the
same; and
(ii) that the assessed valuation, tax increment and appeal information, and
other fiscal information provided by us and contained in the Official Statement relating
to the Bonds, including our Report attached thereto as an appendix thereto, are
presented fairly and accurately and we consent to use of our Report in the Official
Statement_
Dated: , 2011
KEYSER MARSTON ASSOCIATES, INC.,
as Fiscal Consultant
By:
Its:
C-1 Attachment 7
Table 1. Potential Bond Proceed Uses and Estimated Costs
Potential Use/Project Amount* Taxable/Exempt
Refinance remaining 1999 bonds TBD Taxable
Washington-Cenfinela parking structure .$ 8,300,000 Taxable
Purchase of Cardiff parking structure $ 14,000,000 Taxable
Hayden Tract parking structure $ 10,000,000 Taxable
Other parking participation $ 6,000,000 Taxable
Washington-National offsite costs $ 4,000,000 Tax-exempt
Washington-National shoring wall -$ 6,000,000 Tax-exempt
Area Improvement Projects City-wide $ 2,200,000 Tax-exempt
Total taxable: $38,300,000
Total tax-exempt: $12,200,000
Total for all: $50,500,000
* Note: all figures are staff estimates only
NOTE: The Agency has identified an estimated $65 million of potential projects in
the 2011 Cooperation Agreement between the City and the Agency that could be
funded with bond proceeds.
t2 Attachment 8
PROFESS IONAL SERVICES AGREEMENT
FOR FINANCIAL ADVISOR
This agreement has been entered into this day of February, 2011 by and between the Culver
City Redevelopment Agency (the "Agency") and Fieldrhan, Rolapp & Associates, (herein, the
"Consultant").
WE . EREAS, the Agency desires independent financial advisory services to be perforrhed in
connection with the 2011 Tax Allocation Bonds (herein, the "Bonds"); and
WHEREAS, the Agency desires to retain the professional and technical services of the
Consultant for the purpose of debt issuance, (herein, the 'Services").
WHEREAS, the Consultant is well qualified to provide professional financial advice to public
entities such as We Agency . ,
NOW, THERE...L . :Z*7 m consideration of the above recitals and the mutual covenants
conditions hereinafter set forth, it is agreed as follows:
Section 1 Enancial Advisory Services.
As directed by the Agency, Consultant will provide services in connection with
suance of the Bonds as such Services are fully described in Exhibit A
attached to this Agreement. Consultant is engaged in an expert financial
advisory capacity to the Agency only It is exi,nssly understood that the
ServiceS rendered hereunder are rendered solely to the Agency. COnstil+ant does
not und.ertake any ]-esponsibility to review disclosure documents On behalf of
owners or berieficial owners of bonds or debt which may arise from thc
Consultant's Work hereunder.
Sect:;.r2 Additional Services.
Services performed for the Agency by Consultant that are not otherwise
specifically identified in E;shibit A to this Agreement, shall he additional
services. Additional. services inclade, but are not limited to Following:
2,01 Assisting the Agency in obtaining enabling legislation or conducting referendum
elections,
2.02 Extraordinary services and extensive computer analysis in the structuring or
planning of any debt issue or financing program.
2.03 The repeat of any element of a service described in Exhibit A to this Agreement
which is made necessary through no fault of Consultant.
2.04 Financial management services, including development of financial policies,
capital improvement plans, economic development planning, credit analysis or
review and sfe.:.'3 other services that are not ordinarily considered within the scope
of services described in Exhibit A to this Agreement
CULVER CITY RDA/FIELDIVIAN, ROLAPP & ASSOCIAMS Page 1
Project No. 10218 2.05 Services rendered in connection with any undertaking of the Agency relating to a
continuing disclosure agreement entered into in order to comply with Securities
and Exchange Commission Rule 15c2-12 or other similar rules.
2.06 Seces rendered to the Agency in connection with calculations or deter) ' tnination
of any arbitrage rebate liability to the United States of A nerica arising from
investment activities associated with debt issued to fund the Pt rject.
Section 3 Corn
3.01 F .pr CoP performance of Services as described in Section 1 of this
Agreement the Consultant's compensation will be as pro' ;.rled in Part 1 of Tx bit
B attached to this Agreement plus. Consultant's expenses incurred in rendering
such Services. Consultants expenses may include, but are not limited tO travel,
teIephone/coriferenee calls, postage; courier, database access services, and
nrintmg
102 For Consultant's performance of additional ,services as described in Section 2 of
this Agreement, the Consultant's compensation will be as provided in Part 2 of
Exhibit B attached to this agreement plus Consultant's expenses incurred in
rendering such services. Consultants expenses may include, but are not limited
to travel, telephone/conference calls, postage, courier, database access services
and printing.
3.03 The Consultant may submit monthly invoices for payment for services Fovided
pursuant to Section 2 of this Agreement unless an alternate date or dates have
been Specifically agreed to in writing. Unless otherwise specified, p.;.:tymmt of
Consifoiant's compensation and expenses is due thirty (30) days after sub fission
a Consultants invoice for services.
3.04 In Vic the Seryive qf the c101$01Wit Are abandoned by the Agency prior to. •
cOmpletion. of Constiltants work ., Consultant shall be compensated for Sendees•
perfortried to tile point of abaridonnient as if such Services were an additional
serViCeitJUtSuant reSettion 2 of this Agreeinerit An act of abandcniment shall be
deemed to have. occurred. whee r.o action has been taken by the Agency relative
to the services or i he Consultant for a period of thre e . (3) months from the date of
the initial pei•fortuatyce : of a: service, or there has been a written notification to the
Consultant of 4q.4Nugi.primezt Of the Bonds by the Agency.
3.05 Consultant fees set forth n n this Agreement and Exhibits are guaranteed by
Consultant for a period of twelve (12) months from the date of this Agreement.
Section 4 Personnel.
Consultant has, or will secure, all personnel required to perform the services
under this Agreement. Consultant shall make available other qualified personnel
of the firm as may be required to complete Consultant's services. The Agency
has the right to approve or disapprove any proposed changes in Consultants staff
providing service to the Agency. The Agency and Consultant agree that such
personnel are employees only of Consultant and shall not be considered to be
employees of the Agency many way whatsoever.
CULVER CITY RDAJFIELDMAN, ROLAPP & ASSOCIATES Page 2
Project No. 10218
t Section 5 Term of Agreement.
This Agreement shall continue in full force and effect for a period of twenty-four
(24) months from the date hereof unless terminated by either party by not less
than thirty (30) days written notice tc the other party except Lhat the Agreement
shall continue in full force and effect until completion of Consultant's services or
until an abandonment shall have occurred as described in Section 3.04 hc. reof.
This Agreement may be extended from time to time as agreed by the Agency and
the Consultant.
Modification.
This Agreement contains the entine agreement of the parties. It may be amended
in whole or in part from time to time by rnuttlal consent of the parties. 1This shall
not prohibit the Agency and Consulmin from entering into sepal are agreement s
for other services.
Section 7 Assignment.
The rights ad obligations of the Agency unde: tills Agreement shall inure to the
benefit of and shall he binding upon the successors and assigns of the Agency.
This agreement may not be assigned by the ConsuItain without the consent of the
AD: In:), except for compensation due Consultant.
Section 8 Disclosure.
Consultant does not assume the responsibilifios of 111::; Agency, OW die
responsibilities of the other profeSSionals and vendors reprcSontinA the Agency,
in the provision of services and the preparation of the financing documents,
including initial and secondary mAtke.t disclosure, for financings undertaken by
the Agency. Information obtained by Consultant and included in any disclosure
documents is by reason of experience; believed to be accurate, however, such
information is rinit guanriteed by Consultant.
Section 9 Confidentiality.
The Consultant agrees that all fmancial, statistical, personal, technical and other
data and infounation designated by the Agency as confidential shall be protected
by the Consultant from unauthorized use or disclosure.
Section TO rndernr.Textiori.
The Agency and Consultant shall each indemnify and hold harmless the other
from and against any and all losses, claims, damages, expenses, including legal
fees for defense, or liabilities, collectively, damages, to which either may be
subjected by reason of the other's acts, errors or omissions, except however ;
neither will indemnify the other from or against damages by reason of changed
events and conditions beyond the control of either.
CULVER CITY RDA/FIELDMAN, ROLAPP & ASSOCIATES Page 3
Project 10218
k "1- Section 11 Insurance.
11.01 Consultant shall maintain workers compensation and employer's liability
insurance during the term of this Agreement.
11.02 Consultant, at its own expense, shot] obtain and maintain insurance at all times
jilting the prosecution of this contract. Such insurance must be written with a
Best Cuide "A"-rated or higher insurance carrier admitted to write insurance in
the state where. the work is located.
11.03 Certificates of insurance naming the Agency as an additional insured shall be
subm:tted to the Agency evidencing the required coverages, limits and locations
of operations to which the insurance applies, and the policies of insurance shall
conLin a 30 day notice of cancellation or non-renewal.
11.04 Insura ; 1 • ,.:• cc - verges shall not be less than the following:
A. Workers' Compersatim
1. State woiker's compensation. StailiteriN bene
2. Employer's Liability - policy liMits of not less than $1,000,000.
B. Comprehensive Ge- aeral Liability coverage- with policy limits of not less than
$1,000,000 combined single limit lbr bodily injury and property damage and
including cge for the followi
1. Premises operations
2. Contractual liability
3. ;D:oducts
4. Completed operation
C. Errors and omissions with policy limits of $2,000,000.
Section 12 Permits/Licenses.
The Consultant shall obtain any permits or licenses, as may be required for it to
complete the services required under this Agreement.
Section 13 ridiñg Effect.
13.01 A waiver or indulgence by the Agency of a breach of any provision of this
Agreement by the Consultant shall not operate or be constnied as a waiver of any
subsequent breach by the Consultant.
13.02 All agreements and covenants contained herein are severable and in the event any
of them shall be held to be invalid by any competent court, thil Agreement shall
be interpreted as if such invalid agreements or covenants were not contained
hcro:n, and the remaining provisions of this Agreement shall not be affected by
such determination and shall remain full force and effect. This Agreement
CULVER CITY RDNFIELDMAN, ROLAPP & ASSOCIATES
Project No. 10218
Page 4
(13 Title: Vice President By:
shall not fail because any part or any clause hereof shall be held indefinite or
invalid_
13.03 Each party hereto represents and warrants that this Agreement has been duly
authorized and executed by it and constitutes its valid and binding agreement,
and that any governmental approvals necessary for the performance of this
Agreement have been obtaii:ter,l_
13.04 The validity, interpretation and construction of this Agreement and of each part
hereof shall be governed by the laws of the State of California. Venue for any
lawsuit concernirig this agreement is Orange County, California.
IN WITNESS Whereof, the parties have duly executed this Agreement as of the day and year
first above set forth.
CONSULTANT
:Heldman, Rolapp• & Associates
'.9g00 -N/lacArtlitir Boulevard, Suite 1100
vi CA 92612
Date: February 8, 2011
CULVER CITY R.EDEVELOPMENT AGENCY
By Dated:
CULVER crry RDA/FIbLDMAN, ROLAPP 84 ASSOCIATES Page 5
Project No. 10218
t es EXHIBIT A
TO
pRorisSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR
BY AND BETWEEN
THE CULVER CITY REDEVELOPMENT AGENC7 1qELDIVIAN, ROLAPP &
ASSOCI.A.77,fl
Services.
General Services.
The Consultant shall perfoini all the dtitieS and services specifically set forth herein and shall
prOvide such other services AS:it. dm 8 necessary or advisable, or are reasonable and necessary to
accomplish the intent of this Ageernent in a manner consistent with the standards and practice of
ptOfeSSiOnal financial advisors pitvaiiiiig 'alb: time such services are rendered to the Agency_
The Agency may, with the concurrence of Consultant, expand trtis Agrcernerr to include any
additional services not specifically itlec.lilied within the terms c; Agreement. Any addiLici. -ial
services may be described in an adclendwri ;0 1 :-is Exhibit A and are subject to fees described in
Exhibit B to thiS Agreement.
B Debt Issuance Services. •
The Consultant shall assume primaryresnensibility . for assisting the Agency in Coordinating the
planni:ig and execution of each debt iStm Waling: to the Project . Insofar as the fOligUralta ig
p.-oviding Services which are rendered only to the Agency, the overall coordination of the
financing shall be WO. gE.S: 0:10m the costs of the transaction :coincident with ntaxlinizing the_
Agency'S flodbility and Capital Market access, The Consultant's: proposed debt
is.s.unce Serv'ces y include,. but shAll not be limited to the following:.
• Establish the Financing Objectives
Develop the Financing Schedule
Monitor the Transaction Process
Review the Official Statement, to'. h preliminary and final
Procure and Coordinate Addi Service Providers
Provide Financial Advice to the Agency Relating to Financing
Documents
Compute Sizing and Design Structure of the Debt Issue
• Plan and Schedule Rating Agency Presentation and Investor Briefings
• Conduct Credit Enhancement Procurement and Evaluation
• Conduct Market Analysis and Evaluate Timing of Market Entry
• Recommend Award of Debt Issuance
• Provide Pre-Closing and Closing Assistance
•
a
CULVER CITY RDA/FIELDMANT, ROLAPP 8z ASSOCIATES Exhibit A, Page 1
rs Specifically, Consultant. Will:
1. Review the Official Statement
a. Generally, SEC, MSRB, and GFOA guidelines encourage full disclosure so that
potential investors have sufficient data to analyze each proposed financing.
Upon direction of the Agency, the Consultant shall review the official statement
for eacb debt issue relating to the Bonds to insure that the Agency's official
statement is compiled in a manner consistent with industry standards, typically
including the following matters:
O Legal Authority for the Financing
O Security for the Financing
• Restrictions on Additional Financings
e rpo se and Funds for which the Financing is Being Issued
e Revenue Sources
? OtttatttndingFhiaw:itt gs
O Panned '.:utune Financings
O Legal Opinions Regarding Tax Exemption
• Such Other Mailers as the Context May Require.
The Consultan.t will post and niaintain the final official statement on an intemet
web site.
2. Procure and Coordinate Additional Service Providers.
Should the Agency desire, the Consultant may act as Agency's representatiVe
procuring tiie se Tykes of financial printers for the official statement and related
documents, and for the printing of any securities. hi .iddition, the Consultant may act
as the Agency's representative in procuring the services of trustees, paying agents,
fiscal agents, feasibility consultants. consultants, or escrow
verification agents or other professionals, if the Agency directs,
Provide Financial Advice to the Agency Relating to Financing Documents.
Simultaneous with assisting in the preparation of official statements for each debt
issue relating to the Bonds, the Consultant shall assist the managing underwriters,
bond counsel and/or other legal advisors in the drafting of the respective financing
resolutions, notices and other legal documents. In this regard, the Consultant shall
monitor document preparation for a consistent and accurate presentation of the
recommended business terms and financing structure of each debt issue relating to
the Bonds, it being specifically understood however that the Consultant's services
shall in no manner be construed as the Consultant engaging in the practice of law.
4. Compute Sizing and Design Structure of Debt Issue,
The Consultant shall work with the Agency's staff to design a financing structure for
each debt issue relating to the Bonds that is consistent with the Agency's objectives,
that coordinates each transaction with outstanding issues and that reflects current
conditions in the capital markets.
CULVER CITY RDA/FIELDIVIAN, ROLAPP & ASSOCIATES Exhibit A, Page 2 . Plan and Schedule Investor Briefings.
If appropriate, the Consultant shall develop a plan for presenting the financing
program to the investor community. The Consultant shall schedule underwriter
and/or investor visite., if appropriate, to assure the appropri.re and most
knowledgeable personnel i-rte.: available for the presentation and if requested, will
develop presentation materials and assist the Agency officials in preparing for the
presentations.
6. Conduct Credit Enhancement Evaluation and Procurement.
If appropriate and at the Agelcy's direction . the Consultant will initiate discussions
with letter of c:edit providees and vendors of other forms of credit enhancements to
provide credit support for the financings.
7. Conduct Market Analysis and Evaluate Timing of Market Ent: -
The Consultant shall provide regular sninma.:ies of current municipal market
conditions, trends in the market and how these may ./avorably or unfavorably affect
the Agency's proposed financing.
In the case of a negotiated sale of debt, the Consultant shall perform a thorough
evaluation of market conditions preceding the negotiation of Cre temis of the sale of
debt and will assist the Agency with die flegotiation of final issue structure, interest
rates, interest cost, reoffering terms and gross underwriting spread and provide a
reeenunenda! on on acceptance OT rejection of the offer to purchaS0 the debt. This
assistance an evaluation will focus on the following areas as determinants of interest
cost:
Size of financing
Sources and uses of funds
Terms and maturities of the debt issue
Review of the rating in pricing of the debt issue
Investment of debt issue proceeds
Distribution mix among institutional and retail purchasers
Interest rate, reoffering terms and underwriting discount with comparabi
issues
Redemption provisions
8. Recommend Award of Debt Issuance.
Based upon activities outlined in Task 7 above, the Consultant will recommend
accepting or rejecting offers to pureha5;e the clett issue. If the Agency elects to award
the debt issue, the Consultant will instruct all parties and help facilitate the actions
required to formally consummate the award.
CULVER CITY RD/l LDNIAN. ROLAPP ASSOCIAIES Exhibit A, Page3
•
•
t 9. Provide Pre-Closing and Closing Activities.
The Consultant shall assist in arranging for the dosing of each financing. The
Consultant shall assist counsel in assuming responsibility for such arrangements as
they are required, including arranging for or monitoring the progress of bond
printing, qualification of issues for book-entry status, signing and final delivery of the
securities and settlement of the costs of issuance.
CULVER CITY RDA/FELDMAN, ROLAPP & ASSOCIATES Exhibit A, Page 4
k EXHIBIT B
TO
FINANCIAL ADVISORY SERVICES AGREEMENT
BY AND BETVVEEN
CULVER CITY REDEVELOPMENT AGENCY AND FIELDMAN, ROLAPP &
ASS TES
Compensation
Part 1: Fee for Services
For financial Advisory Services performed p•rs1.;ant to Section 1 of this Agreement, and as more
fully described in the Scope of Services set forth in Exhibit A, the Consultant will be
compensated in the following amounts:
1. For the 1-_::ocatign Bonds (new money both Tax Exempt and Taxable), a
compensalion of $78,000;
Payment of fees earned by Consultant pursuant to this Patti shall be contingent on, and payable
a the icIos:.7.g of the debt issite(s) uidellakpp to fillatAg(: the Borids. ro:rooilit to our previous
agreement vc'oa the City fik.t , finarzial advisory service's ; we agree to discount our total fee
C. at closing :2:: 1 , e 3c-s.`,:;:f ten (:.0%) percent,.
Part 2: Other Services
Unless agree.4 to otherwise, financial advisory serviees performed pursuant to Section 2 of this
Agreement will be biiR:Id at the then current liourly rates. The table below reflects the rates in
effect as of the date of execution of this Agree...not.
Personnel Hoiv cte
Executive Officers
Principals ...... . . . ...... .
Senior Vice President , fi,273 00
Vice Presidents $225.00
Assistant Vice President ... , $195 00
Senior Associate . ........... .......... . . $150.00
Associate $125.00
Analyst $85 00
Administrative Assistants $65 00
Clerical $35.00
Expenses
Expenses will be billed for separately and will cover, among other things, travel, lodging,
subsistence, overnight courier, computer, arid fax transmission charges. Advances made on
behalf of the Agency for costs of preparing, printing or distributing disclosure materials or related
CULVER CITY RDA/FIELDM.AN, ROLAPP & ASSOCIATES Exhibit B, Page 1 11 !::cr whether by postal services or electronic means, ina.y also be billed through to the Agency
upon prior authorization. Additionally, a surcharge of 6% of the, net fee amount is added to
verifiable out-of-pocket costs for recovery of costs such as telephone, postage, document
reproduction and the like.
Limiting Terms and Conditions
The above fee is based on completion of work: orders; oh or before May 31, 2011, and assumes
ibai tho Agreggy will provide all necessary infotmation timely manner.
The fee shown above in Part I presumes attendance at up TO 10 meetings in the Agency's offices
or such other location within a 25-mile radius of the Agency place of business as the Agency may
designate.
AbandeminMi
1.f, once commenced, the services of the Consultant are ternlinatt.4 prior to completion of the
project for any reason, we are to be reimbursed for professional sei -vices and direct expenses
incurred up to the time we receive notification of such terminatio:a at the standard hourly rates
shown in Part 2.
CULVER CITY RDA/HELDMAN, ROLAPP & ASSOCIATES Exhibit B, Page 2
tit) CULVER CITY REDEVELOPMENT AGENCY
AGREEMENT
WITH: RICHARDS, WATSON & GERSHON
FOR: BOND COUNSEL AND DISCLOSURE COUNSEL
SERVICES REGARDING CULVER CITY
REDEVELOPMENT AGENCY 2011 TAX ALLOCATION
BONDS (CULVER CITY REDEVELOPMENT PROJECT)
THIS AGREEMENT is made and entered into by and between the CULVER CITY
REDEVELOPMENT AGENCY, a public body, corporate and politic, hereinafter referred to as
"AGENCY," and RICHARDS, WATSON & GERSHON, A PROFESSIONAL
CORPORATION, hereinafter referred to as "COUNSEL."
1. COUNSEL'S SERVICES. Counsel agrees to perform during the term of this Agreement,
the tasks, obligations, and services set forth in the "Scope of Service" attached to and
incorporated into this Agreement as Exhibit "A."
2. TERM OF AGREEMENT. The term of this Agreement shall be from the effective date
pursuant to Paragraph 24 of this Agreement and shall end on the earlier of (a) December
31, 2011 or (b) the date of issuance of Counsel's final approving opinions with respect to
the Agency's Tax Allocation Bonds, 2011 Series A (Culver City Redevelopment Project)
(the "Series 2011A Bonds") and Taxable Tax Allocation Bonds, 2011 Series B (Culver
City Redevelopment Project) (together with the Series 2011A Bonds, the "Bonds").
3. PAYMENT FOR SERVICES. Agency shall pay for the services performed by Counsel
pursuant to the terms of this Agreement the compensation set forth in the "Schedule of
Compensation" attached to and incorporated into this Agreement as Exhibit "B." The
compensation shall be paid at the time and manner set forth in said Exhibit "B."
TIME FOR PERFORMANCE. Counsel shall not perform any work under this
Agreement until (a) Counsel furnishes proof of (i) taxpayer I.D. pursuant to paragraph 13
and (ii) insurance as required under Paragraph 7 of this Agreement; and, (b) Agency
gives Counsel a written and signed duplicate original of this Contract which constitutes
Counsel's Notice to Proceed.
5. DESIGNATED REPRESENTATIVE. William L. Strausz shall be the designated
Counsel Representative, and shall be responsible for job performance, negotiations,
contractual matters, and coordination with the Agency. Counsel's professional services
shall be actually performed by, or shall be immediately supervised by, the Counsel
Representative.
6. HOLD HARMLESS. Counsel shall be responsible for any and all injuries to or death of
any person, and for any and all damage to any and all real or personal property including
Agency's or others, caused by or resulting from any negligent acts, errors or omission of
10634.0007\838357.1 -1-
VA. Counsel, its employees or its agents arising out of or connected with rendition of services
hereunder. Counsel shall defend, hold harmless and indemnify Agency, the City of
Culver city and each of their officers and employees from any and all liability claims,
including costs, for damages to real or personal property, or personal injury or death,
resulting from negligent acts, errors or omissions of Counsel, its employees or agents
arising out of or connected with rendition of services hereunder.
7. INSURANCE. Counsel shall submit proof of Comprehensive General Liability
insurance of minimum One Million Dollars ($1,000,000) single limit coverage,
Automobile Liability insurance and Worker's Compensation insurance in the statutorily
required amounts. Proof of insurance shall consist of a Certificate of Insurance, attached
to and incorporated into this Agreement as Exhibit "C," executed by Counsel's insurer in
amounts satisfactory to, and in a form approved by, the Agency Counsel.
8. INDEPENDENT CONTRACTOR STATUS. The Agency and Counsel agree that
Counsel, in performing the services herein specified, shall act as an independent
contractor and shall have control of all work and the manner in which it is performed.
Counsel is not an agent or employee of Agency, and is not entitled to participate in any
pension plan, insurance, bonus or similar benefits Agency provides for its employees.
Counsel shall be responsible to pay and hold Agency harmless from any and all payroll
and other taxes and interest thereon and penalties therefor which may become due as a
result of services performed hereunder.
9. OTHER CLIENTS OF COUNSEL. Agency acknowledges that Counsel represents many
political subdivisions, companies and individuals. It is possible that its present or future
clients will have transactions with the Agency. It is also possible that Counsel may be
asked to represent, in an unrelated matter, one or more of the entities involved in the
issuance of the Bonds. Counsel does not believe such representation, if it occurs, will
adversely affect its ability to represent Agency as provided in this Agreement, either
because such matters will be sufficiently different from the issuance of the Bonds so as to
make such representation not adverse to its representation of Agency, or because the
potential for such adversity is remote or minor and outweighed by the consideration that
it is unlikely that advice given to the other client will be relevant to any aspect of the
issuance of the Bonds. Approval of this Agreement will signify Agency's consent to
Counsel's representation of others consistent with the circumstances described in this
paragraph.
10. ASSIGNMENT. This Agreement is for the specific services of Counsel as set forth
herein. Any attempt by Counsel to assign the benefits or burdens of this Agreement
without written approval of Agency shall be prohibited and shall be null and void; except
that Counsel may assign payments due under this Agreement to a financial institution.
11. RECORDS AND INSPECTIONS. During the term of this Agreement, Counsel shall
maintain full and accurate records with respect to all services and matters covered under
this Agreement. The Agency shall have free access at all reasonable times to such
records, and the right to examine and audit the same and to make transcripts therefrom,
and to inspect all program data, documents, proceedings and activities. Counsel shall
10634.0007\838357.1 -2-
t-c2- maintain an up-to-date list of key personnel and telephone numbers for emergency
contact alter normal business hours. At Agency's request, papers and property furnished
by Agency will be returned promptly upon receipt of payment for outstanding fees and
client charges. Counsel's own files, including lawyer work product, pertaining to the
transaction will be retained by Counsel. For various reasons, including the minimization
of unnecessary storage expenses, Counsel reserves the right to dispose of any documents
or other materials retained by Counsel after the termination of its engagement hereunder.
12. NOTICES. All notices given or required to be given pursuant to this Agreement shall be
in writing and may be given by personal delivery or by mail. Notice sent by mail shall be
addressed as follows:
To Agency: Culver City Redevelopment Agency
Attention: Executive Director
9770 Culver Boulevard
P.O. Box 507
Culver City, California 90232-0507
To Counsel: Richards, Watson & Gershon
Attention: William L. Strausz
355 South Grand Avenue, 40 th Floor
Los Angeles, California 90071-3101
13. TAXATION IDENTIFICATION NUMBER. Counsel shall provide Agency with a
complete Request for Taxpayer Identification Number and Certification, Form W-9 (Rev.
12-87), as issued by the Internal Revenue Service.
14. PERMITS AND LICENSES. Counsel, at its sole expense, shall obtain and maintain
during the term of this Agreement, all appropriate permits, licenses, and certificates that
may be required in connection with the performance of services under this Agreement.
15. APPLICABLE LAWS, CODES AND REGULATIONS. Counsel shall perform all work
in accordance with all applicable laws, codes and regulations required by all authorities
having jurisdiction over such work.
16. MODIFICATION OF AGREEMENT. This Agreement may not be modified, nor may
any of the terms, provisions or conditions be modified or waived or otherwise affected,
except by a written amendment signed by the parties hereto.
17. WAIVER. If at any time one party shall waive any term, provision or condition of this
Agreement, either before or after any breach thereof, no party shall thereafter be deemed
to have consented to any future failure of full performance hereunder.
18. COVENANTS AND CONDITIONS. Each term and each provision of this Agreement to
be performed by Counsel shall be construed to be both a covenant and a condition.
19. RIGHT TO TERMINATE. Agency or Counsel may terminate this Agreement at any
time, with 30 days notice, with or without cause, in its sole discretion.
10634.0007\838357.1 -3- 20. EFFECT OF TERMINATION. Upon termination as stated in Paragraph 18 of this
Agreement, Agency shall be liable to Counsel only for expenses incurred by Counsel up
to and including the date of termination of this Agreement. Such payment will be subject
to Agency's receipt of a close-out billing.
21. GOVERNING LAW. The terms of this Agreement shall be interpreted according to the
laws of the State of California. Should litigation occur, venue shall be in the Superior
Court of Los Angeles County.
22. LITIGATION FEES. Should litigation arise out of this Agreement for the performance
thereof, the court shall award costs and expenses, including attorney's fees, to the
prevailing party. In awarding attorney's fees, the court shall not be bound by any court
fee schedule but shall award the full amount of costs, expenses and attorney's fees paid or
incurred in good faith.
23. INTEGRATED AGREEMENT. This Agreement represents the entire Agreement
between Agency and Counsel, and all preliminary negotiation and agreements are
deemed a part of this Agreement. No verbal agreement or implied covenant shall be held
to vary the provisions of this Agreement. This Agreement shall bind and inure to the
benefit of the parties to this Agreement, and any subsequent successors and assigns.
Should any conflict arise, the terms of this Agreement shall control.
24. EFFECTIVE DATE. The effective date of this Agreement is March , 2011.
RICHARDS, WATSON & GERSHON
A Professional Corporation
Dated: ,2011 By
William L. Strausz
CULVER CITY REDEVELOPMENT AGENCY
Dated: ,2011 By
Executive Director
APPROVED AS TO FORM:
Agency Counsel
10634.0007\838357.1 -4-
tAtA EXHIBIT A
CULVER CITY REDEVELOPMENT AGENCY
AGREEMENT
WITH: RICHARDS, WATSON & GERSHON
FOR: BOND COUNSEL AND DISCLOSURE COUNSEL
SERVICES REGARDING CULVER CITY
REDEVELOPMENT AGENCY 2011 TAX ALLOCATION
BONDS (CULVER CITY REDEVELOPMENT PROJECT)
SCOPE OF SERVICE
Counsel agrees to render legal services as Bond Counsel and as Disclosure
Counsel to the Agency with respect to the Bonds when and as requested by its Executive
Director or by such officer of the Agency as he may delegate for that purpose.
Specifically, as Bond Counsel, Counsel shall:
(a) Subject to the completion of proceedings to its satisfaction, render its legal
opinion (the "Bond Opinion") regarding the validity and binding effect of
the Bonds, the source of payment and security for the Bonds, the
excludability of interest on the Series 2011A Bonds from gross income for
federal income tax purposes and the exemption of interest on the Bonds
from California personal income taxes.
(b) Prepare and review documents necessary or appropriate to the
authorization, issuance and delivery of the Bonds and coordinate the
authorization and execution of such documents.
(c) Review legal issues relating to the structure of the Bond issue.
(d) Review those sections of the official statement to be disseminated in
connection with the sale of the Bonds involving a description of the
Bonds, the authority for issuance, the security therefor, the tax exempt
status of the Bonds and the Bond Opinion.
Assist Agency in presenting information to bond rating organizations and
providers of credit enhancement as relating to legal issues affecting the
issuance of the Bonds.
The Bond Opinion will be addressed to the Agency and will be delivered
by Counsel on the date the Bonds are exchanged for their purchase price (the
"Closing").
(e)
10634,0007\838357.1 A-1
VAS The Bond Opinion will be based on facts and law existing as of its date.
In rendering the Bond Opinion, Counsel will rely upon the certified proceedings
and other certifications of public officials and other persons furnished to Counsel,
without undertaking to verify the same by independent investigation, and Counsel
will assume continuing compliance by the Agency with applicable laws relating
to the Bonds. During the course of this engagement, Counsel will rely on the
Agency to provide complete and timely information on all developments
pertaining to any aspect of the Bonds and their security.
Specifically, as Disclosure Counsel, Counsel shall:
Prepare the official statement based on information provided by the
Agency, the underwriter, the fiscal consultant and others on the financing
team.
(ii) Review the continuing disclosure certificate of the Agency relating to the
Bonds.
(iii) Provide a letter at the closing and the delivery of the Bonds addressed to
the issuer, which indicates that on the basis of the information which is
made available to Counsel and without undertaking to determine
independently the accuracy, completeness or fairness of that information,
nothing has come to Counsel's attention which causes Counsel to believe
that the official statement contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Counsel's duties in this engagement are limited to those expressly set forth above.
Among other things, such duties do not include:
(1) Except as described in paragraphs (d) and (iii) above, perform any
independent investigation to determine the accuracy, completeness or sufficiency of any
disclosure document or rendering advice that the official statement or other disclosure document
does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein, in light of the circumstances under which they were
made, not misleading.
(2) Except as described in paragraph (ii) above, assisting in the preparation of,
or opining on, a continuing disclosure undertaking pertaining to the Bonds or, after Closing,
providing advice concerning any actions necessary to assure compliance with any continuing
disclosure undertaking.
(3) After Closing, providing continuing advice to the Agency or any other
party concerning any actions necessary to assure that interest paid on the Series 2011A Bonds
will continue to be excludable from gross income for federal income tax purposes (e.g.,
Counsel's engagement does not include rebate calculations for the Series 2011A Bonds).
(i)
10634.0007\838357.1 . A-2 (4) Addressing any other matter not specifically set forth above that is not
required to render the Bond Opinion.
Upon approval of this Agreement, the Agency will be Counsel's client and an
attorney-client relationship will exist between Counsel and the Agency. Counsel assumes that all
other parties will retain such counsel as they deem necessary and appropriate to represent their
interests in this transaction. Counsel further assumes that all other parties understand that in this
transaction Counsel represents only the Agency, is not counsel to any other party, and is not
acting as an intermediary among the parties. Counsel's representation of the Agency will not
affect, however, its responsibility to render an objective Bond Opinion.
Counsel's representation of the Agency and the attorney-client relationship
created by this Agreement will be concluded upon issuance of the Bonds. Nevertheless,
subsequent to Closing, Counsel (as in its capacity as Bond Counsel), will mail the appropriate
Internal Revenue Service Form 8038-G, and prepare and distribute to the participants in the
transaction a transcript of the proceedings pertaining to the Bonds.
10634.0007\838357.1 A-3 EXHIBIT B
CULVER CITY REDEVELOPMENT AGENCY
AGREEMENT
WITH: RICHARDS, WATSON & GERSHON
FOR: BOND COUNSEL AND DISCLOSURE COUNSEL
SERVICES REGARDING CULVER CITY
REDEVELOPMENT AGENCY 2011 TAX ALLOCATION
BONDS (CULVER CITY REDEVELOPMENT PROJECT)
COMPENSATION
1. AMOUNT OF FEE. For performing and completing work and services as Bond Counsel
described in Exhibit A, Agency shall pay Counsel a fee of $85,000. For performing and
completing work and services as Disclosure Counsel described in Exhibit A, Agency
shall pay Counsel a fee of $40,000. Such fees shall be payable by the Agency upon
receipt of an invoice from Counsel at or following the Closing.
2. FEE CONTINGENT UPON CLOSING. It is understood that the fee set forth in
paragraph 1 of this Exhibit B and any other compensation of Counsel for time expended
on the Agency's behalf pursuant to this Agreement will be paid from the proceeds of sale
of the Bonds and will be contingent upon the sale and delivery of the Bonds and the
receipt of such proceeds of sale by the Agency.
3. REIMBURSABLE EXPENSES. Counsel shall be reimbursed for expenses at cost for
long distance telephone calls, messenger and delivery charges, word processing,
photocopying, special clerical overtime, and travel at Agency's request. Counsel does
not expect these expenses to exceed $1,500. Counsel shall bill for such expenses at or
following the Closing or, if the Bonds are not issued, upon the termination of this
Agreement.
10634.0007\838357.1 B-1
Te) EXHIBIT "C"
CERTIFICATE OF INSURANCE
[See attached]
10634.0006\766464.2 C-1
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