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CC - Approval of Proposed Transfer and Assignment of Disposition and Development Agreement for Parcel B from Combined/Hudson 9300 Culver LLC (Developer) to HC 9300 Culver, LLC (Managed and Controlled by Hackman Capital Partners, LLC) and Authorizing the City Manager to Consent in Writing to the Assignment and Assumption Agreement Providing for Such Transfer.
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Meeting Date: November 14, 2016
Contact Person/Dept: Sol Blumenfeld, Community Development
Phone Number: (310) 253-5700
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No []
Public Hearing: [] Action Item: [X] Attachments: []
Commission Action Required: Yes [] No [X]
Public Notification: (E-Mail) Meetings and Agendas - City Council (11/10/16);
Department Approval: Sol Blumenfeld, Community Development Director (11/10/16)
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RECOMMENDATION
Staff recommends the City Council approve the proposed Transfer and Assignment of Disposition and Development Agreement for Parcel B from Combined/Hudson 9300 Culver LLC (Developer) to HC 9300 Culver, LLC (managed and controlled by Hackman Capital Partners, LLC) and authorize the City Manager to consent in writing to the Assignment and Assumption Agreement providing for such transfer.
BACKGROUND
On January 30, 2012, the City of Culver City (City) approved a Disposition and Development Agreement (DDA) with the Developer for the development of Parcel B, and the construction of an expanded Town Plaza on adjoining public property (City Parcel), and the construction of approximately 100 public parking spaces, anticipated at the time to be under Town Plaza and accessed from the Developer’s parking structure under Parcel B (collectively, the Public Parking Improvements).
Parcel B and the City Parcel were originally owned by the former Culver City Redevelopment Agency (CCRA). As a result of the dissolution of the CCRA on February 1, 2012, both parcels were transferred to the Successor Agency to the former CCRA (Successor Agency). On March 18, 2014, the State Department of Finance (DOF) approved the City’s Long Range Property Management Plan (LRPMP) providing for the disposition of Parcel B and the City Parcel consistent with the terms of the DDA; and on May 15, 2014, the DOF approved the Successor’s Agency’s sale of Parcel B to the Developer pursuant to and in accordance with the terms of the DDA, and approved the Successor Agency’s transfer of the City Parcel to the City for the public improvements.
On October 18, 2016, the Developer met with staff to request the reassignment of their DDA with the City to HC 9300 Culver, LLC which is interested in developing Parcel B under the terms and conditions of the current DDA and pursuant to approved project plans
DISCUSSION
The DDA provides a method to approve the Developer’s request for a property transfer which includes the assignment of the DDA when not otherwise a “Permitted Transfer” to a Developer affiliate. Pursuant to Section 206.3, the approval process involves the submittal of the Developer’s written Notice to the City requesting approval of the Transfer which the City may approve or disapprove. The Notice must contain sufficient evidence and details regarding the proposed assignee’s operational qualifications and experience and its financial commitments and resources to carry out the project. Within thirty (30) days after the receipt of Developer’s written notice requesting City approval of a transfer pursuant to the DDA, the City must either approve or disapprove such proposed transfer or must identify what further information, if any, the City reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. On October 28, 2016, the City issued a letter to the Developer requesting additional information regarding the assignee.
An Assignment and Assumption Agreement must also be executed in a form satisfactory to the City’s legal counsel and the City. The Assignment and Assumption Agreement includes the following terms:
1. It must be executed by the Assignor and Assignee and Consented to by the City.
2. The new Developer assumes all of the obligations of the current Developer under the DDA and agrees to be bound to perform the obligations in accordance with the DDA, and otherwise steps into the shoes of Combined/Hudson to carry out the Project.
3. The current Developer remains liable for all DDA obligations that have accrued prior to the assignment.
4. The City’s out of pocket costs are paid by Developer.
5. Obligations of new Developer are guaranteed by Hackman Capital Partners, LLC.
6. Provisions are added assuring the City that Hackman Capital Partners, LLC will be responsible for managing and controlling the Developer entity in its implementation of the DDA and successful development of the Project.
7. The City must approve any changes to the management role of Hackman Capital Partners, LLC.
8. The City is not waiving any requirement for the review, approval and issuance of all City regulatory approvals and permits required for the Project, including planning, zoning, building code etc.
Combined/Hudson is proposing to assign the DDA to HC 9300 Culver, LLC, which will own and develop the Project under a management contract with Hackman Capital Partners, LLC. The City may approve or disapprove the proposed assignment based on whether the proposed assignee has adequate financial capability, experience, track record and qualifications to carry out the DDA. Hackman Capital Partners, LLC has the financial capability, track record and qualifications to carry out the Project. It has real estate holdings throughout the United States and is the owner of The Culver Studios and has provided evidence that it has the means to construct the project, and further that it will comply with the assignment terms including assuming the developer’s obligations to guarantee the Project.
FISCAL ANALYSIS
There is no fiscal impact with the proposed reassignment as all out of pocket expenses must be paid by the Developer.
MOTION
That the City Council:
1. Approve the Proposed Transfer and Assignment of Disposition and Development Agreement for Parcel B from Combined/Hudson 9300 Culver LLC to HC 9300 Culver, LLC (managed and controlled by Hackman Capital Partners, LLC), subject to (i) execution of an assignment and assumption agreement reasonably acceptable to the City; (ii) execution and delivery of a Guaranty by Hackman Capital Partners, LLC guaranteeing the performance by Developer of its DDA obligations; and (iii) receipt by the City of payment by Developer of the City’s out of pocket costs to review and approve the assignment.
2. Authorize the City Manager to Consent in Writing to the Assignment and Assumption Agreement providing for such transfer in a form consistent with this Staff Report upon satisfaction of the required conditions precedent listed in Motion #1 above.