OWNER PARTICIPATION AGREEMENT
Between
CULVER CITY REDEVELOPMENT AGENCY
as “Agency”
and
FOX HILLS MALL, LP
and
CMF FOX HILLS, LLC
as “Developer”
December ______, 2007
December 14, 2007
Schedule I
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
WESTFIELD FOX HILLS
OWNER PARTICIPATION AGREEMENT
THIS OWNER PARTICIPATION AGREEMENT (the “Agreement”) is entered into
effective this _________day of December, 2007, by and between the CULVER CITY
REDEVELOPMENT AGENCY (the “Agency”), a community redevelopment agency
organized and existing under the California Community Redevelopment Law, and FOX HILLS
MALL, LP, a Delaware limited partnership and CMF FOX HILLS, LLC, a Delaware limited
liability company (collectively, and jointly and severally, the “Developer”), with reference to the
following facts:
A. The development that is to be developed pursuant to this Agreement
(“Development”) is a redevelopment and expansion of the retail shopping center currently
known as the Fox Hills Mall (“Mall”) which currently consists of approximately 844,000
leaseable square feet and which is within the redevelopment project area covered by the
Redevelopment Plan for the Culver City Redevelopment Project (the “Culver City Plan” and
such area is referred to herein as the “Culver City Project Area”). City adopted the Plan as
amended and restated to merge three existing redevelopment projects into a single project and
add a fourth area to the project by Ordinance No. 98-014 and 98-015 adopted on November 23,
1998. The Plan was further amended to reflect changes in certain time limits adopted by the
Agency in 2004. Pursuant to the Culver City Plan, Agency has determined that the Culver City
Project Area is blighted and warrants the use of Community Redevelopment Law, Health &
Safety Code Sections 33000 et seq. powers and financing tools and mechanisms to eliminate the
blight on the property and to facilitate its redevelopment. It is the intent of the parties to further
redevelop the Development in accordance with the terms of the Culver City Plan and this
Agreement.
B. The Development will occur on an approximately 40 acre property known as the
Fox Hills Mall (“Developer Parcel”), which is owned by the Developer, and that has been
proposed for redevelopment. The Development will consist of demolishing the vacant former
Robinsons May space and an office building on the site, remodeling the exterior and interior of
the existing Mall and constructing new building space to redevelop the Mall with a net addition
to the Mall of approximately 167,000 square feet of leasable space, including the New Target
Space, merchants, specialty stores, a dining court and restaurants offering indoor and outdoor
patio seating.
C. This Agreement sets forth the terms and conditions under which Developer will
construct certain improvements in the Development in conformance with the Culver City Plan,
as amended pursuant to this Agreement and the Agency will provide certain financial assistance
for the Development. NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and
mutual obligations contained in this Agreement, and in reliance on the representations and
warranties set forth herein, the Agency and the Developer agree as follows:
1. DEFINITIONS
1.1. The following terms and their derivatives have the meanings set forth below
wherever used in this Agreement, attached exhibits, or documents incorporated into this
Agreement by reference:
1.1.1. Affiliate. “Affiliate” shall mean an entity under the control
of or under common control with the Developer or those of its managing members
having a collective controlling interest in Developer as of the date of this
Agreement.
1.1.2. Agency. The “Agency” means the Culver City
Redevelopment Agency, a community redevelopment agency organized and
existing under the California Community Redevelopment Law (Health and Safety
Code Sections 33000, et seq.). Any reference hereafter to “Agency” shall also be
deemed to include any successors or assigns of the Culver City Redevelopment
Agency.
1.1.3. Agency Approved Tenant. “Agency Approved Tenant”
shall mean any of the following tenants occupying space within the Mall and open
for business which enter into a Lease with a minimum term of ten (10) year with
Developer in the Development:
(i) any of the tenants listed on Schedule II attached hereto (the
tenants referenced in this clause (i) are hereinafter referred to as “Pre-Approved
Tenants”); and
(ii) any tenant, who, although not listed on Schedule II, is
proposed by Developer and approved by Agency pursuant to this clause (ii) to
become added to the list of Pre-Approved Tenants (the Agency approved tenants
added to the list of Pre-Approved Tenants on Schedule II pursuant to this clause
(ii) are hereinafter referred to as “Additional Approved Tenants”). If Developer
wishes to obtain approval of an Additional Approved Tenant or Tenants, it shall
notify the Agency in writing of the tenant or tenants it wishes to have approved.
Within thirty (30) days after such submission, the Agency Executive Director or
his designee shall approve or disapprove the proposed tenant or tenants as an
Additional Approved Tenant. Agency approval of a proposed tenant or tenants
as an Additional Approved Tenant shall not be unreasonably withheld,
conditioned or delayed. If Agency reasonably requires any additional information
from Developer in order to determine whether any proposed tenant or tenants
should be approved as an Additional Approved Tenant, Developer shall provide
any such requested and available information to Agency promptly upon request;
provided, that, such Agency request for additional information shall be communicated to Developer in writing no more than fifteen (15) busines
after receipt by Agency of such Developer request for approval of a proposed
Additional Approved Tenant. In the event Agency does not respond to
Developer’s request for approval of any proposed Additional Approved
within such thirty (30) day period after receipt of said request, the proposed tena
or tenants shall be deemed approved as an Additional Approved Tenant; provided,
however, that such “deemed approval” shall only occur if the Developer
prominently includes in the submission requesting approval of the Additio
Approved Tenant the following phrase in bold capital letters: “THIS ITEM O
MATTER WILL BE DEEMED APPROVED BY YOU IF NOT
DISAPPROVED BY [INSERT ACTUAL DATE OF DEADLINE
APPROVAL OR DISAPPROVAL].”.
s days
Tenant
nt
nal
R
FOR
(iii) any other tenants who, although not initially listed on
Schedule II an th
re of
r
l
l
ch
ll
the
AL
Agency approval or disapproval shall only be for purposes of determining
whethe
he
d not ereafter added as an Additional Approved Tenant, are
hereafter approved by the Agency as reasonably equivalent to any one or mo
the tenants listed on Schedule II (the Agency approved tenants listed in this clause
(iii) are hereinafter referred to as “Equivalent Tenants”). If Developer wishes to
obtain approval of an Equivalent Tenant, it shall notify the Agency in writing of
the tenant it wishes to have approved and the Pre-Approved Tenant(s) to which
the proposed tenant is reasonably comparable. Within twenty-one (21) days afte
such submission, the Agency Executive Director or his designee shall approve or
disapprove the proposed tenant as an Equivalent Tenant. Such Agency approval
or disapproval shall be based upon whether such tenant is reasonably comparable
to the identified Pre-Approved Tenant(s) in terms of market recognition, scope of
operation, and level of quality of service and product offering. Agency approval
of a proposed tenant as an Equivalent Tenant shall not be unreasonably withheld,
conditioned or delayed. If Agency reasonably requires any additional information
from Developer in order to determine whether a proposed tenant is an Equivalent
Tenant, Developer shall provide any such requested and available information to
Agency promptly upon request; provided, that, such Agency request for additiona
information shall be communicated to Developer in writing no more than fifteen
(15) business days after receipt by Agency of such Developer request for approva
of a proposed Equivalent Tenant. In the event Agency does not respond to
Developer’s request for approval of a Proposed Equivalent Tenant within su
twenty-one (21) day period after receipt of said request, the proposed tenant sha
be deemed approved as an Equivalent Tenant; provided, however, that such
“deemed approval” shall only occur if the Developer prominently includes in
submission requesting approval of the Equivalent Tenant the following phrase in
bold capital letters: “THIS ITEM OR MATTER WILL BE DEEMED
APPROVED BY YOU IF NOT DISAPPROVED BY [INSERT ACTU
DATE OF DEADLINE FOR APPROVAL OR DISAPPROVAL].”.
r a specified tenant is an Additional Approved Tenant or an Equivalent
Tenant, and, without limiting the obligations of the Developer to comply with t
provisions of Section 10.1 hereinbelow, Developer does not need Agency approval of any tenant if the gross leasable square footage of that tenant’s s
not being counted towards the Agency Approved Square Footage Threshold.
Agency shall not have a general right to approve or disapprove the occupancy
any tenant within the Mall, and, without limiting the obligations of the Developer
to comply with the provisions of Section 10.1 hereinbelow, Developer shall have
the right to lease to any tenant(s) it deems appropriate whether or not such Tenant
is a Pre-Approved Tenant, Additional Approved Tenant, or Equivalent Tenant or
otherwise approved by and acceptable to the Agency; provided, that, unless a
tenant is an Agency Approved Tenant (because it is either a Pre-Approved
Tenant, Additional Approved Tenant added to the Pre-Approved Tenant list
Equivalent Tenant), occupancy of such tenant in the Mall shall not constitute
Qualifying Occupied Square Footage credited toward satisfaction of the Agen
Approved Square Footage Threshold requirement.
pace is
of
, or an
cy
The following shall not be included as an Agency Approved Tenant for
(a) Target and/or the New Target Space;
(b) Any tenant occupying more than 20,000 square feet of
(c) Any tenant in the food court;
(d) Any tenant or licensee occupying a kiosk;
(e) Any tenant who occupied or was an occupant of the Mall as
ge
(f) Any restaurant; provided however that as to the Agency
-
1.1.4. Agency Assistance
any purpose under this Agreement:
gross leasable area;
of the date of this Agreement and any former tenant of the
Mall who has been closed for business for less than one
hundred and eighty (180) days, except as to any net new
square footage of gross leasable area which exceeds the
square footage occupied by the existing tenant as of the
date of this Agreement or which exceeds the square foota
formerly occupied by the former tenant; and
Approved Square Footage Threshold requirement for the
first year only as shown on Exhibit J, a maximum of thirty
six thousand (36,000) square feet of gross leasable area and
a maximum of four (4) restaurants may count towards such
first year requirement.
. “Agency Assistance” shall mean the
total amount o
1.1.5. Agency Assistance Termination Date
f the financial assistance provided by the Agency to Developer as
described herein in the form of Annual Disbursement Payments.
. “Agency Assistance
Termination Date” shall mean the first to occur of (i) the expiration date for receipt of tax i
ll
e if the
is
ncrement under the Culver City Plan (which is currently July 21,
2024), as such date may be hereafter extended; provided, however, that an
amendment extending the date of the Culver City Plan beyond July 21, 2024, sha
only extend the Agency Assistance Termination Date beyond said 2024 dat
implementation of such amendment and extension of the Agency Assistance
Termination Date do not impose a material adverse financial impact on Agency, or
(ii) the date upon which the Agency has disbursed to Developer pursuant to th
Agreement an aggregate total Agency Assistance amount having a Net Present
Value of at least Ten Million Dollars ($10,000,000).
1.1.6. Agency Funding Amount. The maximum amount that
Agency is required to fund, subject to the terms and conditions of this Agreement
including, without limitation, Section 5.
1.1.7. Agency Approved Square Footage Threshold. “Agency
Approved Square Footage Threshold” shall mean those milestones for gross
leasable square or
e
footage occupied by Agency Approved Tenants within the Mall
minimum percentage of tenants listed on the Pre-Approved Tenant list (Schedul
II) that lease stores within the Mall, as set forth in Exhibit J attached hereto for each
year of operation of the Mall after the issuance by the Agency of the Release of
Construction Covenants for the Developer Parcel Work of Improvements. The
milestones set forth in said Exhibit J for the third year of operation shall apply to
the third and each subsequent year of operation after the issuance by the Agency
the Release of Construction Covenants for the Developer Parcel Work of
Improvements. By way of example, per
of
Exhibit J, in the first year after the
Developer Parcel Work of Improvement has been completed, the Agency
Approved Square Footage Threshold shall mean at least Ninety Thousand (9
square feet of gross leasable area of space within the Mall leased to Agenc
Approved Tenants, of which at least Twenty Thousand (20,000) square feet of such
gross leasable area shall be located in the Existing Mall, or the leasing of stor
within the Mall to a minimum of 75% of the tenants listed on the Pre-Approved
Tenant list (Schedule II).
1.1.8. “
0,000)
y
es
ncy Tenant Requirements Age ” shall mean the requirements
set forth in Section 10.1.3.
al Disbursement Dates 1.1.9. Annu . “Annual Disbursement Date”
shall mean the first October 1
st
following the date on which the Agency issued or
was obligated to issue the Release of Construction Covenants for the Developer
Parcel Work of Improvement pursuant to Section 4.2, and every October 1
st
thereafter until the Agency Assistance Termination Date. For example, if the
Release of Construction Covenants for the Developer Parcel Work of Improv
is issued May 1, 2008, the first Developer Parcel Annual Disbursement Date sh
be October 1, 2008 for the 2007-08 fiscal year or if the Release of Construction
Covenants is issued November 1, 2008, the first Developer Parcel Annual
Disbursement Date shall be October 1, 2009 for the 2008-09 fiscal year. If Agen
receives any Net Developer Parcel Tax Increment attributable to a prior fisc
ement
all
cy
al year after the Annual Disbursement Date for that prior year has occurred (i.e., after the
applicable October 1st payment date), then Agency shall also disburse that portion
of the Annual Disbursement Payment to Developer within thirty (30) days after
receipt by the Agency.
1.1.10. Annual Disbursement Payments. “Annual Disbursement
Payments” shall mean one hundred percent (100%) of the Net Developer Parcel
Tax Increment e
operty
received by Agency for each prior fiscal year, provided that as to th
fiscal year in which the Release of Construction Covenants is issued, the Annual
Disbursement Payment shall not include tax increment generated prior to the
issuance of the Release of Construction Covenants.
1.1.11. Agreement Affecting Real Pr . “Agreement
Affecting Real Property” shall mean the Agreement Affecting Real Property
substantially in the form attached to this Agreement as Exhibit G.
1.1.12. Approved Entity. “Approved Entity” has the meaning set
forth in Section 1.1.28. .
1.1.13. City. “City” means Culver City.
1.1.14. Construction Drawings. “Construction Drawings” means
those certain construction plans and drawings with respect to the Developer Parcel
Work of Improvement, as more particularly set forth in Exhibit F attached hereto.
1.1.15. Culver City Plan. “Culver City Plan” has the meaning set
forth in Recital A.
6. Culver City Project Area 1.1.1 . “Culver City Project Area” has
the meaning set forth in Recital A
1.1.17. Developer. The “Developer” means Fox Hills Mall, LP, a
Delaware limited partnership and CMF Fox Hills, LLC, a Delaware limited liability
company, whic
h two entities shall be collectively referred to herein as the
Developer and shall be jointly and severally liable for the performance of all of the
obligations of Developer under this Agreement. Any reference hereafter to
“Developer” shall also be deemed to include any successors to or assigns of Fox
Hills Mall, LP, and CMF Fox Hills, LLC, as permitted by this Agreement.
1.1.18. Developer Parcel. “Developer Parcel” means that certain
approximately 40 acre parcel owned by Developer and more particularly described
in Exhibit A.
Parcel Opening
That portion of the Developer Parcel designated in Exhibit A-1 as the
“Fox Hills Mall, LP, Parcel” is owned by Fox Hills Mall, LP. That portion of the
Developer Parcel designated in Exhibit A-2 as the “CMF Fox Hills, LLC, Parcel” is
owned by CMF Fox Hills, LLC.
1.1.19. Developer . “Developer Parcel Opening”
shall mean as to each year of operation of the Mall, the first date upon which Mall Shops occupie
ment
d by Agency Approved Tenants consisting of not less than the
Agency Approved Square Footage Threshold for the applicable year of operation of
the Mall, have opened for business to the general public.
1.1.20. Developer Parcel Work of Improve . “Developer
Parcel Work of Improvement” or “Development” shall mean those
improvements shown in the Schematic Design Drawings and the Construction
Drawings, which are more particularly described in Exhibit F, and desc
“Description of Developer Work of Improvement (Exhibit C
ribed in the
).
1.1.21. Existing Mall. “Existing Mall” shall mean that portion of
Fox Hills Mall existing as of the date of this Agreement and prior to expansion and
improvement by construction of the Developer Parcel Work of Improvement.
1.1.22. Holder. “Holder” has the meaning assigned in Section
13.2.
1.1.23. Mall. “Mall” shall mean Westfield Fox Hills Mall, or any
portion thereof.
1.24. Mall Shops 1. . “Mall Shops” shall mean the total retail area
on the Developer Parcel, excluding New Target Space.
ent 1.1.25. Net Developer Parcel Tax Increm . “Net Developer
Parcel Tax Increment” shall mean the total ad valorem property tax increment
revenue alloca
m
t
ted to and received by the Agency in each fiscal year pursuant to
Section 33670(b) of the Redevelopment Law, as said statute may be amended fro
time to time, to the extent attributable to an increase in the assessed value of the
Developer Parcel over and above the assessed value established by the Los Angeles
County Tax Assessor in the equalized assessment roll for the 2006-07 year, but
specifically excluding therefrom all of the following: (a) the portion of such tax
increment revenues that is required to be set aside pursuant to Sections 33334.2 e
seq. of the Redevelopment Law or any successor law for low-and moderate-incom
housing purposes (currently 20%); (b) the portion of such tax increment revenues
that the Agency is required to pay to any other governmental entities pursuant to
any statutorily required pass through payments and County administrative fees as
such statutory requirements may be amended from time to time; and (c) the portio
of such tax increment revenues which the Agency may hereafter be required by the
State to pay or set aside for a specific funding purpose from time to time, including,
for example, and without limiting the generality of the foregoing, any payments
which the Agency may be required to pay to the Education Revenue Augmentation
Fund pursuant to Section 33681 et
e
n
seq. of the Redevelopment Law. The deductio
from Net Developer Parcel Tax Increment shall be limited to only those payments
that are mandatory requirements on the Agency which the Agency has no
discretion to avoid or which can only be avoided by exercise of discretion in a way
that would have a material adverse financial impact on Agency and/or City
Agency covenants that it shall not take any discretionary action that would cause a
ns
. reduction or loss in the Net Developer Parcel Tax Increment available for pay
of Agency Assistance during the term of this Agreement unless not taking such
discretionary action would have a material adverse financial impact on Agency
and/or City, as set forth above.
1.1.26. Net Prese
ment
nt Value. “Net Present Value” shall mean net
present value of the Agency Assistance measured as of the date of this Agreement,
based upon the r discount of all Agency Assistance hereafter received by Develope
back to that date based upon a discount rate of six percent (6%).
1.1.27. New Target Space. “New Target Space” shall mean the
new anchor space contemplated for occupancy by Target as shown on Exhibit I
attached hereto
1.28. Note
.
1. . “Note” means that certain promissory note entered
into between the Agency and the Developer in the form attached hereto as Exhibit
E.
1.1.29. Permanent Closure. “Permanent Closure” shall mean that
all the business operation within the New Target Space has ceased for at least
ninety (90) con
e
r
n of
not
secutive days, without the prior written consent of the Agency,
which consent shall not be unreasonably withheld, conditioned or delayed. Th
date of Permanent Closure shall be the first day immediately following the
expiration of said 90-day period. Notwithstanding the foregoing, time periods
during which closure is due to (1) events of repair, alteration, construction, o
remodeling, or (2) an Unavoidable Delay, shall not be included in the calculatio
said 90-day period; provided, that such exclusion for Unavoidable Delay shall
exceed one hundred and eighty (180) days (i.e., Permanent Closure shall be deemed
to have occurred following a closure for two hundred and seventy (270)
consecutive days even if attributable to Unavoidable Delay).
1.1.30. Permanent Partial Closure. “Permanent Partial Closure”
as to any tenant other than the New Target Space shall mean that the business
operation of su
t
anent
all
0)
ch tenant has ceased for at least ninety (90) consecutive days,
without the prior written consent of the Agency in each instance, which consen
may not be unreasonably withheld, conditioned or delayed. The date of Perm
Partial Closure shall be the first day immediately following the expiration of said
90-day period. Notwithstanding the foregoing, time periods during which closure
is due to (1) events of repair, alteration, demolition, relocation within the Mall,
construction, or remodeling, including installation of tenant improvements, or (2)
an Unavoidable Delay, shall not be included in the calculation of said 90-day
period; provided, however, that such exclusion for Unavoidable Delay shall not
exceed one hundred and eighty (180) days (i.e., a Permanent Partial Closure sh
be deemed to have occurred following a closure for two hundred and seventy (27
consecutive days even if attributable to Unavoidable Delay). 1.1.31. Permitted Transfer. “Permitted Transfer” means any
Transfer (i) to any entity listed on Schedule I hereto (an “Approved Entity”), (ii)
to any partnership, corporation, limited liability company or other entity in which
an Approved Entity has a majority or controlling interest, and (iii) any of the
following:
(a) Any Transfer arising from or pursuant to any Mortgage and any
foreclosure (or deed or assignment in lieu of foreclosure) resulting therefrom.
(b) The granting of easements or dedications to any appropriate
governmental or quasi-governmental agency or utility or permits to facilitate the
development of the Site.
(c) A Transfer resulting from or in connection with a reorganization as
contemplated by the provisions of the Internal Revenue Code of 1986, as
amended or otherwise, in which the ownership interests of a corporation or other
entity are assigned directly or by operation of law to a Person or Persons which
acquires the Control of the voting capital stock of such corporation or other entity
or all or substantially all of the assets of such corporation or other entity.
(d) A Transfer between members of the same immediate family, or
transfers to a trust, testamentary or otherwise, in which the beneficiaries consist
solely of immediate family members of the trustor .
(e) A Transfer between or among Affiliates of Developer.
(f) The execution of any leases or subleases of any portion of the
Developer Parcel, or any improvements thereon, for occupancy purposes.
(g) A Transfer, in whole or in part, to any of the following
(collectively, "intra-corporate transfers”) (1) any entity which as of the date of this
Agreement has the power to direct Developer’s management and operations, or
any entity whose management and operations are controlled by Developer, an
Approved Entity or a Westfield Entity; (2) any entity, a majority of whose voting
stock is owned by an Approved Entity or a Westfield Entity; or (3) any
corporation or entity which as of the date of this Agreement holds a majority of
the outstanding shares of voting stock in an Approved Entity or a Westfield
Entity.
1.1.32. Schedule of Performance. “Schedule of Performance”
means the timetable attached hereto as Exhibit B for the construction of the
Developer Parcel Work of Improvement, as amended from time to time, as well as
the time periods within which other obligations of Developer hereunder shall be
performed; provided, however, that such time periods shall be extended by the
period of any Unavoidable Delays. 1.1.33. Schematic Design Plans. “Schematic Design Plans” means
schematic design plans for the Development as approved from time to time by the
City and Agency, including those schematic design plans more particularly
described on Exhibit F attached hereto.
1.1.34. Transfer. As used in this Agreement, the term “Transfer”
shall mean:
1.1.34.1 Any total or partial sale, assignment or co
or creation of any trust or power by deed of trust or otherwise, or any
transfer in any other mode or form of or with respect to the Develop
Parcel or the Mall or any interest therein, or any contract or agreement t
any of the same, provided, however, the sale or lease of an individual unit
within the Mall does not constitute a Transfer;
nveyance,
er
o do
an 1.1.34.2 Any transfer of any ownership interest greater th
a 20% interest in the Developer, to a single entity or person or group of
entities or persons, made for the purposes of effecting a change in the
management or control of Developer, provided that for the purposes of the
foregoing (a) any transfer of an ownership interest to a non-managing
equity member of the Developer shall not be considered included in the
definition of “Transfer,” and (b) any transfer of the Developer Parcel or of
any ownership interest in Developer to an entity that is at least 50% owned
and is controlled by Fox Hills GP, LLC, Westfield America Limited
Partnership, or Westfield U.S. Holdings, LLC, or any Affiliate thereof
(herein a “Westfield Entity”) shall not be considered a “Transfer”
hereunder;
1.1.34.3 Any assignment by Developer of all or any part of
this Agreement; or
1.1.34.4 Any merger, consolidation, sale or lease of all or
substantially all of the assets of Developer to any entity that is not a
Westfield Entity.
1.1.35. Unavoidable Delay means a delay due to war, acts of
terrorism, insurrection, strikes, lock-outs, other labor disputes, labor or material
shortages, riots, civil disturbances, floods, earthquakes, fires, windstorms, hail,
casualties, natural disasters, acts of God, acts of the public enemy, epidemics,
quarantine restrictions, freight embargoes, lack of transportation attributable to any
of these, acts or failure to act of the other Party, acts or the failure to act of any
public or governmental agency or entity (except that acts or failure to act of the
Agency or City shall not excuse performance by Agency), legal or governmental
restrictions on priority, initiative or referendum, moratoria, processing with
governmental agencies other than Agency, unusually severe weather, third party
claims or litigation of this Agreement, or any other similar causes beyond the
control or without the fault of the Party claiming an extension of time to perform. 2. DEVELOPMENT APPROVALS
Land Use Approvals. Agency’s staff will use reasonable efforts to assist Developer in
connection with processing and issuance of permits on approvals for all pending applications for
the Developer Parcel Work of Improvement, assist the Developer with the filing, processing and
issuance of permits and approvals for any additional applications which may be necessary for the
Developer Parcel Work of Improvement, and will attempt to facilitate the expeditious processing
and consideration thereof by coordinating the procedures therefor with all applicable City
departments and/or other bodies who may have jurisdiction over such matters (collectively the
“Land Use Approvals”); provided, however, that the foregoing shall not constitute a
commitment by Agency to cause any approvals to be issued, and provided further that all
documents submitted in connection with any applications or other submissions shall be
submitted to, reviewed by and approved or rejected by the appropriate planning and building
departments of City, pursuant to City’s codes, ordinances, rules and regulations. The assistance
to be provided by Agency pursuant to this Section 2 shall be given with the objective of
obtaining the Land Use Approvals on a timely basis and preserving the financial viability of the
Developer Parcel Work of Improvement and compliance with the Schedule of Performance so
that the Developer can construct the Developer Parcel Work of Improvement. Nothing in this
Agreement shall be deemed to require the City to approve any application for or in connection
with the Developer Parcel Work of Improvement.
3. CONSTRUCTION OF THE DEVELOPMENT
3.1. Schematic Design Plans and Construction Drawings
3.1.1. Schematic Design Plans. Developer has, prior to the date of this
Agreement, submitted Schematic Design Plans for the Developer Parcel Work of
Improvement, as more particularly described in Exhibit F attached hereto.
3.1.2. Construction Drawings. Developer has, prior to the date of this
Agreement, submitted construction plans and drawings with respect to the Development,
as more particularly set forth in Exhibit F attached hereto (collectively, the
“Construction Drawings”).
3.2. Agency Review and Approval. The Agency has reviewed the Schematic Design
Drawings and the Construction Drawings and has approved the same in order to satisfy the
Agency’s obligation to promote the sound development and redevelopment of the Development,
and to promote a high level of design which will impact the surrounding development (in
accordance with Section 3.3 below).
3.3. Revisions to Construction Plans. The Agency shall have the right to approve or
disapprove in its reasonable discretion any proposed material revisions to the Construction
Drawings, only if, in any material respect, (a) the proposed revision to the Construction Drawings
does not conform to the approved Schematic Design Plans, or (b) the proposed revision to the
Construction Drawings does not conform to the Description of Developer Work of Improvement
attached hereto as Exhibit C (the “Description of Developer Work of Improvement”) or this
Agreement. If such Agency approval is required, the Agency Executive Director shall approve or disapprove the proposed change and notify the Developer in writing within 21 days after
submission to the Agency. In the event that the Agency Executive Director does not appr
disapprove such proposed change within such 21 day period, the proposed modification to the
Construction Drawings shall be deemed approved. Any and all change orders or revisions
required by the City and its inspectors which are required under the City’s Municipal Code
other applicable Uniform Codes (e.g. Building, Plumbing, Fire, Electrical, etc.) and under other
applicable laws and regulations shall be included by the Developer in its Construction Drawings
and completed during the construction of the site improvements and are deemed approved by the
Agency. During the preparation of any revisions to the Construction Drawings, staff of the
Agency and the Developer shall hold regular progress meetings to coordinate the preparation
submission to, and review of the revised Construction Drawings by the Agency. The staff of the
Agency and the Developer shall communicate and consult informally as frequently as is necessary
to ensure that the formal submittal of any documents to the Agency can receive prompt and
thorough consideration. The Agency shall designate an Agency employee to serve as the
development manager who is responsible for the coordination of the Agency’s activities un
Agreement and for expediting the land use approval and permitting process. The Developer, upon
receipt of a disapproval based upon powers reserved by the Agency hereunder, shall revise such
portions and resubmit to the Agency.
ove or
and all
of,
der this
3.4. Defects in Plans. The Agency shall not be responsible either to the Developer or
to third es i
is
parti n any way for any defects in the Construction Drawings, nor for any structural or
other defects in any work done according to the approved Construction Drawings, nor for any
delays reasonably caused by the review and approval processes which are in accordance with th
Agreement (except that times for Developer’s performance may be extended as set forth in
Section 3.4). The Developer shall hold harmless, indemnify and defend the Agency, the Cit
their officers, employees, agents and representatives from and against any claims, suits for
damages to property or injuries to persons arising out of or in any way relating to defects in
Construction Drawings, including without limitation the violation of any laws, and for defects in
any work done according to the Construction Drawings.
y and
the
3.5. Use of Architectural Plans. Unless the Agency purchases Developer’s rights to
the Pla e ns, th Agency shall not have the right to use any Construction Drawings which are
submitted to the Agency by the Developer pursuant to this Section 3.5, nor shall the Agency
confer any rights to use such architectural plans to any person or entity.
3.6. Schedule of Performance. As a material consideration for entering into this
Agreement, Developer has committed, and Agency is relying on such commitment, to cause the
redevelopment of the Developer Parcel (in accordance with the time periods set forth in this
Agreement and the Schedule of Performance), subject only to Unavoidable Delays and cure
periods specifically provided hereunder. Except for extension of time due to Unavoidable Delay
or cure periods, the time limitations set forth in this Agreement and in the Schedule of
Performance for Developer’s performance of its covenants, conditions and obligations, are of the
essence, and Developer waives any right at law or in equity to tender or complete performance
beyond the applicable time period, or to require Agency to accept such performance. Each party
shall notify the other party as soon as reasonably possible after a party receives actual knowledge
of the occurrence of any event that is causing or is likely to cause a Unavoidable Delay. After
execution of this Agreement by the Agency, Developer shall, in accordance with the Schedule of Performance, cause the construction of the Developer Parcel Work of Improvement to begin and
thereafter shall diligently prosecute both the Developer Parcel Work of Improvement to
completion, as provided in the Description of Developer Work of Improvement, plans approved
for the Developer Parcel Work of Improvement by the City and Agency, all entitlements, all
Governmental Approvals, and any applicable requirements of any Governmental Authority.
Subject to Unavoidable Delays, failure to commence or to complete construction of either the
Developer Parcel Work of Improvement within the respective times provided therefor in the
Schedule of Performance shall be a default hereunder. Developer may terminate this Agreement
within one hundred eighty (180) days after its execution of this Agreement due to a material
adverse or catastrophic economic circumstance.
3.7. Construction of the Development. Developer shall cause construction of the
Develo arce s
3.8. Construction Obligations
per P l Work of Improvement subject to the Schedule of Performance, and the term
and conditions of this Agreement, but subject to Unavoidable Delay, in accordance with the
Construction Drawings.
. Construction of the Developer Parcel Work of
Improv ings.
on plans,
ce
f-site
3.9. Development Funding
ement undertaken by Developer shall be in accordance with the Construction Draw
Developer shall be solely responsible for all aspects of the Developer Parcel Work of
Improvement, including, but not limited to, the quality and suitability of the constructi
the supervision of construction work, and the qualifications, financial conditions, and performan
of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property
managers. The Developer shall be solely responsible at its own expense for installing any of
improvements required by the City entitlements in connection with the construction of the
Developer Parcel Work of Improvement.
. Developer shall be solely responsible for obtaining funds
commi nd r
3.10. Employment Nondiscrimination
tted a eadily-available for the Developer Parcel Work of Improvement in an amount
sufficient to complete development of the Developer Parcel Work of Improvement. Nothing in
this Section 3.12 shall alter or amend in any way the duty of the Agency to pay to Developer any
amounts of Net Developer Tax Increment required to be paid to Developer pursuant to this
Agreement and/or the Note.
. The Developer and its contractors and
subcon s s n
l
ical
off
3.11. Disabled Access
tractor hall not discriminate against any employee or applicant for employment i
connection with the use of the Developer Parcel on the basis of race, color, ancestry, nationa
origin, religion, sex, sexual preference, marital status, AIDS or AIDS-related complex, or phys
or mental disability. Each of the following activities shall be conducted in a nondiscriminatory
manner: hiring; upgrading; demotion and transfers; recruitment and recruitment advertising; lay
and termination; rates of pay and other forms of compensation; and selection for training,
including apprenticeship.
. The Developer shall develop the Developer Parcel Work of
Improv ement in compliance with all applicable federal, state, and local requirements for access
for disabled persons. 3.12. Lead-based Paint. The Developer and its contractors and subcontractors shall not
use lead-based paint in the construction of the Developer Parcel Work of Improvement or
maintenance of Developer Parcel Work of Improvement units. The Developer shall insert this
provision in all contracts and subcontracts for work performed on the Developer Parcel Work of
Improvement which involve the application of paint.
3.13. Site Inspections. The Developer shall permit and facilitate observation and
inspection of work at the Developer Parcel Work of Improvement site by the Agency’s authorized
representatives during normal business hours, subject to the indemnity provided in Section 7
hereof.
3.14. Quality of Work. The Developer shall construct the Developer Parcel Work of
Improvement in conformance with general industry standards and the Land Use Approvals, and
shall employ building materials of a quality suitable for the requirements of the Developer Parcel
Work of Improvement. The Developer shall develop the Developer Parcel Work of Improvement
in full conformance with applicable local, state, and federal statutes, regulations, and building and
housing codes.
3.15. Insurance. The Developer shall cause to have in full force and effect such
policies of insurance as are required by the Agency pursuant to Exhibit D which is attached hereto
and incorporated herein by this reference.
3.16. Local, State, and Federal Laws; Prevailing Wages. Developer shall carry out
development, construction (as defined by applicable law) and operation of the Developer Parcel
Work of Improvement on the Developer Parcel, including, without limitation, any and all public
works (as defined by applicable law), if any, in conformity with all applicable local, state and
federal laws, including, without limitation, all applicable federal and state labor laws (including,
without limitation, any applicable requirement to pay state prevailing wages). Developer hereby
agrees that Developer shall have the obligation to provide any and all disclosures, representations,
statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726
and 1781, as the same may be enacted, adopted or amended from time to time, or any other
provision of law. Developer hereby agrees that Developer shall have the obligation to provide and
maintain or cause to be provided and maintained any and all bonds to secure the payment of
contractors (including the payment of wages to workers performing any public work) which may
be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or
amended from time to time, or any other provision of law. Developer shall indemnify, protect,
defend and hold harmless Agency Indemnified Parties (as defined in Section 14.1.1. ) with
counsel reasonably acceptable to Agency and City, from and against any and all loss, liability,
damage, claim, cost, expense, and/or “increased costs” (including labor costs, penalties,
reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in
connection with the development, construction (as defined by applicable law) and/or operation of
the Developer Parcel Work of Improvement, including, without limitation, any and all public
works (as defined by applicable law), if any, results or arises in any way from any of the
following: (1) the noncompliance by Developer of any applicable local, state and/or federal law,
including, without limitation, any applicable federal and/or state labor laws (including, without
limitation, if applicable, the requirement to pay state prevailing wages); (2) the implementation of
Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (3) failure by Developer to provide any required
disclosure representation, statement, rebidding and/or identification which may be required by
Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time
to time, or any other provision of law; and/or (4) failure by Developer to provide and maintain or
cause to be provided and maintained any and all bonds to secure the payment of contractors
(including the payment of wages to workers performing any public work) which may be required
by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended
from time to time, or any other provision of law. Developer hereby expressly acknowledges and
agrees that neither City nor Agency has ever previously affirmatively represented to the
Developer or its contractor(s) for the Developer Parcel Work of Improvement in writing or
otherwise, that the work to be covered by the bid or contract is not a “public work,” as defined in
Section 1720 of the Labor Code. It is agreed by the parties that, in connection with the
development, construction (as defined by applicable law) and operation of the Developer Parcel
Work of Improvement, including, without limitation, any public work (as defined by applicable
law), if any, Developer shall bear all risks of payment or non-payment of state prevailing wages
and/or the implementation of Labor Code Sections 1726 and 1781, as the same may be enacted,
adopted or amended from time to time, and/or any other provision of law. “Increased costs” as
used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same
may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive
termination of this Agreement and shall continue after recordation of the Release of Construction
Covenants.
4. COMPLETION
4.1. Completion of Developer Works of Improvement.
4.1.1. Completion. Developer hereby agrees to cause the Developer
Parcel Work of Improvement to be completed in substantial accordance with the
approved Schematic Design Drawings, Construction Drawings, Description of
Developer Work of Improvement, all entitlements, all Governmental Approvals
and any applicable requirements of any Governmental Authority and to pay all
development costs (hard and soft) to complete the Developer Parcel Work of
Improvement as provided in this Agreement.
4.1.2. Completion Procedures. When Developer has received from
its architect and from its general contractor a written certification that the
Developer Parcel Work of Improvement is complete, and determines that it has
completed the Developer Parcel Work of Improvement of Improvement in
accordance with subsection 4.1.1, Developer shall immediately take the following
actions:
4.1.2.1 Notify the Director of Building and obtain final
written inspections and approvals from them and final certificates of
occupancy from the City; 4.1.2.2 Notify the Agency in writing and request final
inspection of the Developer Parcel Work of Improvement; and
4.1.2.3 Record a Notice(s) of Completion, as referred to in
Section 3093 of the California Civil Code, with respect to its Developer
Parcel Work of Improvement.
4.1.3. Final Inspection and Punch List. After the Agency receives
the notice described in subsection 4.1.2.2. above, the Agency and Developer and
their designated agents and representatives may, but are not obligated to, conduct a
joint and final inspection of the Developer Parcel Work of Improvement in order to
(1) verify that the Developer Parcel Work of Improvement has been completed; (2)
determine if Developer is in material default of any provision of this Agreement
relating to the Developer Parcel Work of Improvement; and (3) prepare a list of
those parts of the Developer Parcel Work of Improvement if any, that remain to be
completed, or which need additional work, correction, repair or replacement (the
“Punch List”).
4.1.4. Completion of Punch List. Developer shall use diligent and
best efforts to correct and complete all Punch List items, if any, identified pursuant
to Section 4.1.3 above, within the earlier of 60 days after receipt of the Punch List
or the applicable Scheduled Completion Date, and shall immediately notify the
Agency when all Punch List Items are completed. The Agency and its designated
representatives may, but are not obligated to, inspect the listed items to verify
correction and completion of the Punch List Items.
4.1.5. Bond for Minor Punch List Items. Notwithstanding any
remaining uncompleted Punch List items, the Agency nevertheless shall treat the
Developer Parcel Work of Improvement as completed if: (1) the Punch List items
are limited to minor corrections, modifications and adjustments the existence and
completion of which shall not materially interfere with the principal ability to
utilize and operate all portions of the Developer Parcel Work of Improvement for
their intended purposes; and (2) Developer posts with the Agency a lien and
completion bond or letter of credit (or other security reasonably acceptable to the
Agency) in an amount representing Agency’s reasonable estimate of the cost of the
work not yet completed.
4.2. Release of Construction Covenants.
4.2.1. Promptly upon completion of the Developer Parcel Work of
Improvement in accordance with this Agreement and satisfaction of the conditions
set forth in Section 4.2.2 of this Section, Agency shall issue to Developer a Release
of Construction Covenants, in the form attached hereto as Exhibit H, upon written
request therefor by Developer. Agency shall not unreasonably withhold or delay
issuing the Release of Construction Covenants. Such Release of Construction
Covenants shall be, and shall so state, conclusive determination of satisfactory
completion of the Developer Parcel Work of Improvement required by this Agreement, and of full compliance with the terms of this Agreement with respect to
such Developer Parcel Work of Improvement. After the recordation of the Release
of Construction Covenants, Developer and any party thereafter purchasing, leasing,
subleasing, or otherwise acquiring any interest in Developer’s interest in the
Developer Parcel shall not (because of such purchase, lease, sublease or
acquisition) incur any obligation or liability under this Agreement with respect to
such Developer Parcel Work of Improvement except as provided in the Agreement
Affecting Real Property. Issuance of the Release of Construction Covenants shall
not waive any rights or claims that Agency may have against Developer, any
general contractor or any architect, or any subcontractors or suppliers for any latent
or patent defects in design, construction or similar matters under any applicable
law. The Release of Construction Covenants shall be in such form as to permit it to
be recorded in the Office of the Recorder of Los Angeles County.
4.2.2. Agency shall not be obligated to issue the Release of
Construction Covenants until each of the following has occurred:
4.2.2.1 Final inspection of the Development by or on b
of Agency and determination by Agency that (a) the Developer Parcel
Work of Improvement has been completed in substantial conform
this Agreement, or (b) only minor Punch List items remain to be completed
and Developer has provided the security described in Section 4.1.5 of this
Agreement; and
ehalf
ance with
above, the Agency shall issue the Release of Construction Covenants upon the
4.2.2.2 Issuance of a certificate of substantial completion by
the architect; and
4.2.2.3 Issuance of the final certificate(s) of occupancy by
the City for the Developer Parcel Work of Improvement; and
4.2.2.4 Recordation of Notices of Completion, as referred to
in Section 3093 of the California Civil Code; and
4.2.2.5 Releases or waivers of all liens or rights to record
liens having been obtained from the general contractor and all
subcontractors having served valid Preliminary 20-day Notices, and the
statutory period for filing liens having expired; and
4.2.2.6 Occurrence of the Developer Parcel Opening.
4.2.3. If the Agency refuses or fails to issue a Release of
Construction Covenants after written request from Developer, the Agency shall,
within thirty (30) days of the written request, provide Developer with a written
statement which details the reasons the Agency refused or failed to issue the
Release of Construction Covenants. The statement shall also contain a statement of
the actions Developer must take to obtain a Release of Construction Covenants. If
the reasons for such refusal is confined to minor Punch List Items as described posting of the security described in subsection 4.1.5. If the Agency fails to
provide such written statement within said thirty (30) day period, Developer s
be deemed entitled to the Release of Construction Covenants and shall have the
right to legally compel delivery.
hall
4.2.4. Such Release of Construction Covenants shall not constitute
evidence of co
5. AGENCY ASSISTANCE
5.1. Developer Parcel Disbursement
mpliance with or satisfaction of any obligation of Developer under
any loan documents, or to any other party (other than Agency). Such Release of
Construction Covenants is not notice of completion as referred to in Section 3093
of the California Civil Code.
.
5.1.1. In consideration of Developer’s obligations undertaken
pursuant to thi
l of
s Agreement in connection with the Developer Parcel, until the
Agency Assistance Termination Date, so long as (1) Developer has satisfied al
the Developer Parcel Conditions Precedent (as defined below); (2) and at all times
that the Developer Parcel On-Going Conditions (as defined below) are satisfied, the
Agency shall make the Annual Disbursement Payments to Developer on each
Annual Disbursement Date in accordance with the provisions of this Section 5 and
in accordance with the Note attached hereto as Exhibit E. The Agency shall also
make Proportional Annual Disbursement Payments and Accrued Annual
Disbursement Payments, if any, to Developer in accordance with Section
below and in accordance with the Note. The Note shall be executed by the Age
on the Effective Date and delivered to Developer concurrently therewith. The Note
is evidence of the Agency’s obligations in this Agreement and is not a condition to
or limitation upon those obligations of Agency expressly set forth herein.
5.1.4
ncy
5.1.2. Priority of Obligation. The Agency’s obligations hereunder
are not, and sh
e
by
pect
t
all not, be construed as a pledge of tax increment pursuant to
Redevelopment Law Section 33671. Agency’s obligations hereunder shall b
subordinate to any existing bonds which Agency has issued which are secured
tax increment Agency receives from the Redevelopment Project and the refunding
or refinancing thereof and any future bonds Agency may issue and the bonded
indebtedness incurred in connection therewith; provided, however, that with res
to any future bonds, refunding of existing bonds (to the extent the principal amount
and/or interest rate of the refunding bonds exceeds the then outstanding principal
balance or then current interest rate of the refunded bonds), refunding of future
bonds, or other indebtedness described herein, Agency shall notify Developer no
less than thirty (30) days prior to issuance and, concurrent therewith, provide to
Developer the fiscal consultant report described below demonstrating that, at the
time of issuance, any such issuance and indebtedness will not adversely affect
Agency’s ability to perform its current and prospective obligations under this
Agreement. In connection with any financing for which notice to Developer isrequired pursuant to the foregoing provision, Agency shall appoint a consultant
firm of such consultants generally recognized in the bond financing marketplace to
be well qualified in the field of public finance consulting relating to tax increment
financing, bond transactions, and the Community Redevelopment Law who is not a
present or past consultant of the Agency and will not be involved in the proposed
debt issuance in order to determine whether, in good faith, it can be demonstrated
that, at the time of issuance, any such issuance and indebtedness will not adversely
affect Agency’s ability to perform its current and prospective obligations under this
Agreement. Following its selection, the financial consultant shall prepare a report
that reasonably demonstrates to Developer whether, following issuance of the
proposed debt, sufficient debt service coverage will remain to pay debt service
all obligations currently outstanding and the obligations to Developer under this
Agreement as well as the proposed issuance, assuming reasonable and customary
debt coverage ratios. Unless it is demonstrated that there will be no adverse impac
to Agency’s ability to perform its obligations hereunder, such proposed financing
shall not proceed. Agency shall consult with Developer as to the qualifications and
selection of such consultant or firm of consultants and shall reasonably consider
Developer’s recommendations with respect to such selection. When required by
this section, such report shall be delivered by Agency to Developer concurrently
with the above-referenced 30-day notice of intended issuance of debt. The
Agency’s obligations under this Section 5.1.2 shall terminate on the Agency
Assistance Termination Date. Bonded indebtedness includes any indebtednes
incurred by the Agency for bonds, notes, interim certificates, debentures,
certificates of participation or other obligations issued by the Agency. No
herein is intended to, nor shall it, limit the amount of tax increment the Agency
currently receives for the Redevelopment Project or otherwise.
or
on
t
s
thing
5.1.3. Tax Increment Note. The Agency shall evidence its
obligation to p
o as
ay the Developer the Agency Assistance as provided by this
Agreement by execution and delivery of the Note in the form attached heret
Exhibit E. The Agency Assistance shall be paid to the Developer in the form of
Annual Disbursement Payments delivered to Developer when and as required by
this Agreement. The Note shall provide for the Agency’s commitment to pay the
Agency Assistance to Developer up to and including the Agency Assistance
Termination Date. The Developer shall have the right to commoditize the No
and/or to assign the Note.
te
5.1.4. Proportional and Accrued Annual Disbursement Payments.
In the event th
loper
l
ed
l
the
e Developer is not entitled to receive an Annual Disbursement
Payment on any Annual Disbursement Date because of the absence of a Deve
Parcel Opening or the failure of Developer to meet the Agency Approved Square
Footage Threshold for the applicable operating period, then (a) the Developer shal
receive on such Annual Disbursement Date a payment of a percentage of the
Annual Disbursement Payment otherwise payable under the terms of this
Agreement reduced in proportion to the percentage of the Agency Approv
Square Footage Threshold that Developer has failed to satisfy (“Proportiona
Annual Disbursement Payment”); (b) the Agency shall withhold and set asideunpaid balance of such Annual Disbursement Payment remaining after such
reduced payment, less any applicable Penalty, in an interest bearing account f
to three (3) years from the Annual Disbursement Date on which such reduced
Annual Disbursement Payment was made to Developer; and (c) if the Develop
fully satisfies the Agency Approved Square Footage Threshold originally
applicable to such withheld funds during such 3-year period, then such wit
portion of the Annual Disbursement Payment, less any applicable Penalty, plus
interest earned on such withheld funds, shall be paid to Developer within thirty (
days of such full satisfaction of the Agency Approved Square Footage Threshold
for the applicable period (“Accrued Annual Disbursement Payments”). In the
event the Developer fails to fully satisfy the Agency Approved Square Footage
Threshold originally applicable to such withheld funds during such 3-year period
then such withheld funds, plus interest earned on such withheld funds, shall be
retained by the Agency as the property of the Agency, together with any applica
Penalty, and shall at no time be paid to Developer.
or up
er
hheld
30)
,
ble
The investment of any funds withheld by the Agency under this Section 5.1.4 shall
“Penalty” shall mean, for purposes of this Section 5.1.4, an amount equal to ten
ved
The following is an illustrative example of the application of the provisions of this
Year 2 of operation
Agency Approved Square Footage Threshhold is 115,000 square feet of Agency
Actual Square Footage of Agency Approved Tenants on the Annual Disbursement
I
be at the sole discretion of the Agency, and the Agency shall not guarantee any
particular level of interest earnings nor suffer any liability based on the actual
amount of interest earned thereon.
percent (10%) of any funds withheld under Section 5.1.4(b), which shall be
imposed by the Agency only if the Developer fails to meet an Agency Appro
Square Footage Threshold in a given year by ten percent (10%) or more of such
Agency Approved Square Footage Threshold. Each Penalty shall be retained by
the Agency as the property of the Agency and shall at no time be paid to
Developer.
Section 5.1.4. This example is intended to be illustrative only, and in the event of
any conflict between this illustration and the provisions of this Section 5.1.4 set
forth above, such provisions shall control.
Approved Tenants, with 25,000 square feet of Agency Approved Tenants in the
Existing Mall, or, 85% of the tenants of the list of Pre-Approved Tenants on
Schedule II being open for business in the Mall.
Date is 92,000 square feet of which 25,000 square feet are located in the Existing
Mall. 70% of the tenants listed on the list of Pre-Approved Tenants on Schedule I
are open for business in the Mall. Developer has only met 80% of the Agency Approved Square Footage Threshhold
(92,000 of 115,000 square footage required).
Annual Disbursement Payment available is $1,000,000.
$800,000 is paid to Developer on the Annual Disbursement Date as a Proportional
Annual Disbursement Payment.
$200,000 is withheld by the Agency. A Penalty of $20,000 is imposed, and the
remaining $180,000 is placed into an interest bearing account. Agency retains the
Penalty as its property.
If 115,000 square feet of Agency Approved Tenants are open for business in the
Mall within 3 years of the original Annual Disbursement Date involved, then the
$180,000 plus interest is paid to Developer within 30 days such condition is
satisfied. If not, the $180,000 plus interest is retained by the Agency as its
property.
5.2. Conditions Precedent to Developer Parcel Disbursement. The disbursement of
the Agency Assistance pursuant to this Agreement is conditioned upon the satisfaction by
Developer of the conditions precedent described in this Section 5.2. Such conditions (the
“Developer Parcel Conditions Precedent”) are solely for the benefit of the Agency, and shall be
satisfied by Developer (or waived by the Agency in writing in its sole and absolute discretion)
within the time periods provided in the Schedule of Performance (if applicable), as such dates may
be extended for Unavoidable Delays. If all Developer Parcel Conditions Precedent have not been
satisfied or waived by the Agency by December 31, 2008, and if Developer fails to thereafter
satisfy such condition after written notice from Agency of the unsatisfied condition within the
cure period provided in Section 5.2.5. below, then this Agreement and the Agency’s obligation to
disburse the Agency Assistance to Developer pursuant to this Agreement shall automatically
terminate. The Developer Parcel Conditions Precedent are:
5.2.1. Developer shall have executed this Agreement.
5.2.2. Developer shall have executed the Agreement Affecting Real
Property in the form attached hereto as Exhibit G and the Agreement Affecting
Real Property shall have been recorded against the Developer Parcel and shall be
superior to the lien of any encumbrance or financing; provided, however, that only
as to the Existing Mortgage (as defined in Section 11.2.1 below, and only for the
period ending on July 11, 2011, the condition precedent required by this Section
5.2.2 may be satisfied by Developer performing all of the following:
(a) Developer shall use commercially reasonable and
diligent good faith efforts to obtain reasonably satisfactory
documentation of the superiority of the Agreement Affecting Real
Property to the Existing Mortgage;
(b) If Developer has not obtained such documentation, and
a foreclosure or the conveyance of a deed in lieu of foreclosure occurs with respect to the Existing Mortgage at any time after the
date of this Agreement, and concurrently with such foreclosure or
conveyance of a deed in lieu of foreclosure there is no assumption
of the Developer’s obligations under the Agreement Affecting Real
Property such that the Agreement Affecting Real Property is then
superior to the lien of any encumbrance or financing, then
Developer shall repay to Agency any and all Annual Disbursement
Payments theretofore paid by Agency to Developer, and no further
Annual Disbursement Payments shall be payable by the Agency
under this Agreement and/or the Note unless and until (i) the
Agreement Affecting Real Property is superior to the lien of any
encumbrance or financing, and (ii) there is no uncured default of
any of Developer’s obligations under this Agreement and/or the
Agreement Affecting Real Property; and
(c) Developer shall, on or before August 1, 2011, provide
documentation that the Agreement Affecting Real Property is in
any event superior to the lien of any encumbrance or financing
whatsoever as of July 12, 2011.
5.2.3. Delivery of evidence reasonably satisfactory to the Agency
Assistant Executive Director that Developer has spent a minimum of $125,000,000
in verified hard direct construction costs (exclusive of tenant improvements) to
complete the Developer Parcel Work of Improvement. Such evidence to be
delivered shall include a copy of all relevant construction contracts and change
orders, a certification of construction costs from Developer’s architect, and a
verification of construction costs by an independent qualified construction cost
verifier reasonably acceptable to Agency’s Assistant Executive Director.
Developer shall pay for the cost of such verification.
5.2.4. Developer shall have provided evidence reasonably
satisfactory to the Agency that Developer owns fee simple title to the Developer
Parcel.
5.2.5. Subject to extensions of time for Unavoidable Delay,
Developer shall have completed construction of the Developer Parcel Work of
Improvement consistent with the Schematic Design Plans, the Construction
Drawings and the Description of Developer Work of Improvement (Exhibit C)
within the time set forth in the Schedule of Performance.
5.2.6. The Agency shall have issued, or shall be obligated to issue, a
Release of Construction Covenants for the Developer Parcel Work of Improvement
pursuant to Section 4.2 above.
5.2.7. The Developer Parcel Opening shall have occurred as
applicable to each year of operation of the Mall. This pre-condition may be
partially satisfied or deferred and Proportional and Accrued Annual Disbursement Payments may be made in the absence of full satisfaction of this pre-condition in
accordance with and subject to the provisions of Section 5.1.4 above.
5.2.8. The Mall shall consist of tenants that have been approved by
the Agency for compliance with the Agency Tenancy Requirements.
5.2.9. There shall exist no condition, breach of a covenant, event or
act which would constitute a default under this Agreement or the Agreement
Affecting Real Property, or which upon the giving of notice or the passage of time
or both, would constitute a default hereunder or thereunder.
5.2.10. This Agreement shall not have been terminated as a result of
Developer’s Uncured Default hereunder or under the Agreement Affecting Real
Property.
5.2.11. Developer shall have delivered to Agency a guaranty of
Developer’s obligations to make the payment required by Section 5.2.2 (b) above,
if any, from Developer’s parent company or a Westfield Entity or Affiliate
reasonably approved by Agency’s Assistant Executive Director, the form and
substance of which guaranty shall be subject to the reasonable approval of
Agency’s Assistant Executive Director and General Counsel.
5.3. On-Going Conditions to Developer Parcel Disbursement. The on-going
disbursement of the Annual Disbursement Payments is conditioned upon the continuing
satisfaction by Developer of the on-going conditions described below. Such conditions (the
“Developer Parcel On-Going Conditions”) are solely for the benefit of the Agency, and shall be
satisfied by the Developer as reasonably determined by the Agency’s Executive Director or
designee (or waived by the Agency in its sole and absolute discretion).
5.3.1. Developer shall use, operate and maintain, or cause the use,
operation and maintenance of, the Developer Parcel pursuant to the this Agreement
and the Agreement Affecting Real Property with Mall Shops occupied and opened
for business by Agency Approved Tenants consisting of not less than the Agency
Approved Square Footage Threshold. This condition may be partially satisfied or
deferred and Proportional and Accrued Annual Disbursement Payments may be
made in the absence of full satisfaction of this condition in accordance with and
subject to the provisions of Section 5.1.4 above.
5.3.2. There is no Transfer other than a Permitted Transfer.
5.3.3. Subject to the notice and cure provisions provided herein,
there is no default by Developer of its obligations under this Agreement.
5.3.4. Developer shall not have closed all or any portion of the
Development.
5.3.5. Developer shall continue to be in compliance with the
Agency Tenant Requirements. 5.3.6. Developer shall be in substantial compliance with the
Agency-approved master plan and schedule for the Developer Parcel.
5.3.7. Developer shall continue to comply with Section 10.1.7.
5.3.8. This Agreement has not been terminated by Agency because
of Developer’s Uncured Default hereunder.
5.3.9. The Agency continues to remain legally entitled to receive
tax increment from the Developer Parcel pursuant to applicable provisions of law;
provided, that, Agency shall take any action reasonably necessary to preserve
Agency’s right to receive such tax increment as contemplated by this Agreement.
5.3.10. There shall be no Permanent Closure.
5.3.11. There shall not be Permanent Partial Closures (a) to the
extent that Agency Approved Tenants open for business in the Mall constitute less
than the Agency Approved Square Footage Threshold nor (b) to the extent that
there are Permanent Partial Closures involving more than ten percent (10%) of the
gross leasable area of the Mall, excluding the New Target Space and the food court.
This condition may be partially satisfied or deferred and Proportional and Accrued
Annual Disbursement Payments may be made in the absence of full satisfaction of
this condition in accordance with and subject to the provisions of Section 5.1.4
above; provided however that notwithstanding the provisions of Section 5.1.4
above with respect to the condition set forth in Section 5.3.11(b) there shall be no
Proportional Annual Disbursement Payment and the maximum accrual period for
purposes of Accrued Annual Disbursement Payments shall be six (6) months
instead of three (3) years.
5.4. Sharing of Sign Revenue. So long as the signs identified on Exhibit K attached
hereto remain in operation, Developer shall pay to Agency (i) a base annual payment of Five
Hundred Thousand Dollars ($500,000) (“Base Payment”); and (ii) an additional payment equal to
fifty percent (50%) of the “Gross Sign Revenue” received by Developer during each calendar
year which is in excess of a base of Two Million Two Hundred Thousand Dollars ($2,200,000.00)
per calendar year (“Additional Payment”). “Gross Sign Revenue” shall mean all gross
revenues and credits of any kind whatsoever received by or credited to Developer and/or any
Affiliate and/or any Westfield Entity arising in any way from the use or operation of the signage
identified on Exhibit J attached hereto. The Base Payment and the Additional Payment shall be
paid to Agency on March 1 of each year for the prior calendar year, commencing on the first
March 1 following the first calendar year in which the signs identified on Exhibit K attached
hereto commence operation.
5.5. Windfall Participation Payments Upon Sale or Refinancing of the Mall or Any
Portion Thereof. Developer shall pay to Agency ____ percent (___ %) of the Windfall Amount, if
any, received by Developer and/or any Affiliate and/or any Westfield Entity from or in connection
with the sale or refinancing of the Mall or any portion thereof (“Windfall Participation
Payment”). The term “Windfall Amount” shall mean for purposes of this Section 5.5 that portion of net sale proceeds and/or net refinance proceeds, if any, received by Developer and/or
any Affiliate and/or any Westfield Entity after the date of this Agreement which is in excess of
Developer’s Preferred Rate of Return on Developer’s investment in the Developer Parcel as of the
date of any such sale and/or refinancing. The term “Developer’s Preferred Rate of Return”
shall mean for purposes of this Section 5.5 a cumulative annual return to Developer on
Developer’s investment in the Developer Parcel as of the date of any such sale and/or refinancing
of _____ percent (___%).
5.6. Agency and City Legal Costs re Signs. Within ninety (90) days of the date of this
Agreement, Developer shall reimburse Agency and City all costs and expenses incurred by the
Agency and the City for legal fees and costs and legal services in connection with the Developer’s
application to construct and operate signs on the Developer Parcel, the research, drafting and
approval of the Agency’s Design for Development relating to the Developer Parcel and the
proposed City Master Sign Program, and any and all legal fees and costs incurred in connection
therewith.
6. RELOCATION.
6.1. The relocation of any occupants or businesses, if any, required for construction
and operation of the Developer Parcel Work of Improvement, including provisions of relocation
assistance and benefits pursuant to Relocation Laws, shall be the sole financial responsibility of
Developer. Relocation obligations, if any, which arise from this Agreement shall be administered
by the Agency (or its designee, a qualified relocation consultant chosen by the Agency) in
conformity with the Relocation Laws and in cooperation with Developer, with such administration
paid by Developer. Agency acknowledges and agrees that Developer is working out relocation
arrangements or payments to certain tenants and in some cases, such obligation is contractually
agreed to or dealt with in tenant leases and Agency agrees to consult with Developer and
coordinate with Developer any activities concerning the relocation process and payment of any
relocation payments.
6.2. All of the cost and expenses incurred or to be incurred by Developer to cause the
vacating of the Developer Parcel and/or relocation of all occupants and businesses from the
Developer Parcel for construction and operation of Developer Parcel Work of Improvement
(including, but not limited to, payments made to displaced persons and businesses, pre- or post-
relocation rental payments, fees and actual expenses of attorneys, relocation consultants and other
experts employed to effect the relocation of occupants and businesses, etc.) shall be the sole
financial responsibility of Developer. Any costs arising related in any respect to such
displacement, such as, but without limitation, claims for loss of business goodwill, payment for
furniture, fixtures and equipment, payment for leasehold bonus value, and any other compensable
interest under Relocation Laws shall be the sole financial responsibility of Developer and
administered and reviewed by the Agency (or its designee), in consultation and cooperation with
Developer as provided above.
6.3. Developer hereby covenants and agrees to indemnify, save, protect, hold
harmless, pay for and defend the Agency and the Agency Indemnified Parties (as defined in
Section 14.1.1. ) from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses,
costs, or expenses, including, without limitation, reasonable consultants’ and reasonable attorneys’
fees, or relocation benefits (including, but not limited to, payments made to displaced persons and
businesses, pre- or post-relocation rental payments, fees and actual expenses of attorneys,
relocation consultants and other experts employed to effect the relocation of occupants and
businesses, etc.) claimed or payable under the Relocations Laws which may now or in the future
be incurred or suffered by the Agency or the Agency Indemnified Parties by reason of, or
resulting from, in full or in part, or in any respect whatsoever from the displacement of businesses
or other occupants of the Developer Parcel pursuant to this Agreement. This indemnification shall
survive the termination of this Agreement.
6.4. Developer, on behalf of itself and any and all successors and assigns, hereby fully
and finally releases the Agency, the City, and their respective past and present elective and
appointive boards, commissions, officials, employees, representatives and agents from any and all
manner of actions, causes of actions, suits, obligations, liabilities, judgments, executions, debts,
claims, and demands of every kind and nature whatsoever, known and unknown, which Developer
or any of its successors or assigns may now have or hereafter obtain against the Agency or the
City or their respective past and present elective and appointive boards, commissions, officials,
employees, representatives and agents by reason of, arising out of, relating to, or resulting from, in
full or in part, Developer’s election to acquire fee title to the Developer Parcel. The parties agree
that, with respect to the release of claims as set forth above, all rights under Section 1542 of the
California Civil Code and any similar law of any state or territory of the United States are
expressly waived. Section 1542 reads as follows:
Civil Code Section 1542. Certain claims not affected by general releases. A general
release does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release which if known by him must have
materially effected his settlement with the debtor.
________________
Developer’s Initials
7. RIGHTS OF ACCESS.
During the period of construction of the Developer Parcel Work of Improvement, the
Agency and its employees, agents, architects, engineers and contractors shall have the right to
enter upon the Developer Parcel to inspect the Developer Parcel and the Developer Parcel Work
of Improvement at reasonable times, but in no event without forty-eight (48) hour prior written
notice of such access, to ensure development and operation in conformance with this Agreement,
provided, however, that Agency has no right to enter a portion of the Developer Parcel once
Developer has transferred possession of such portion of the Developer Parcel over to the tenant
of such space. The Agency shall indemnify, defend and hold the Developer and its officers,
agents and employees, harmless from any and all claims, demands, damages, losses, actions,
liabilities, causes of action or judgments, including reasonable attorney’s fees, which the
Developer may incur or be required to pay by reason of entry onto the Developer Parcel and
activities thereon by the Agency or the Agency’s agents, employees, contractors or consultants,
including, without limitation, any damages, injury or death to any person or the Developer Parcel suffered by any person, firm or corporation, except to the extent the same are attributable to the
negligence or willful misconduct of the Developer or any person or entity acting on the
Developer’s behalf or under the Developer’s authority. Prior to entry upon the Developer Parcel,
the Agency shall deliver to Developer a certificate of insurance evidencing liability insurance
coverage of at least Two Million Dollars ($2,000,000.00) naming Developer as an additional
insured.
8. HAZARDOUS MATERIALS.
8.1. Hazardous Materials. For purposes of this Agreement, the term “Hazardous
Materials” shall mean any substances that are toxic, corrosive, inflammable, or ignitable,
petroleum and petroleum byproducts, lead, asbestos, any hazardous wastes, and any other
substances that have been defined as “hazardous substances, “hazardous materials,” “hazardous
wastes,” “toxic substances,” or other terms intended to convey such meaning, including those so
defined in any of the following federal statutes, beginning at 15 U.S.C. section 2601, et seq., 22
U.S.C. section 1251, et seq., 42 U.S.C. section 6901, et seq. (RCRA), 42 U.S.C. section 7401, et
seq., 42 U.S.C. section 9601, et seq. (CERCLA), 49 U.S.C. section 1801, et seq. (HMTA); or
California statutes beginning at California Health and Safety Code section 25100, et seq., section
25249.5, et seq., and 25300, et seq., and California Water Code section 13000, et seq., the
regulations and publications adopted and promulgated pursuant to such statutes and any similar
statutes and regulations adopted hereafter. Hazardous Materials shall not include substances
stored on the Developer Parcel that are stored as part of the normal construction and operation of a
retail project.
8.2. Remediation. The Developer shall be solely responsible for all costs of
investigation, removal, cleanup, treatment, transportation, disposal, and monitoring of any
contamination by Hazardous Materials on the Developer Parcel as required in connection with the
Development. The Developer shall be solely responsible for developing, submitting, and
implementing any risk assessments or remediation workplans for the Developer Parcel as required
by the appropriate regulatory agencies. The Developer hereby waives and releases the Agency
from any claims, causes of action, liabilities or costs arising from the presence of or associated
with the investigation, monitoring or remediation of any Hazardous Materials contamination on
the Developer Parcel as of the date of this Agreement, whether or not such contamination was
known as of the date of this Agreement.
8.3. Environmental investigation. The Developer shall have the right to engage its
own environmental consultant to make such environmental assessments or investigations of the
Agency Parcel with respect to possible contamination by Hazardous Materials as the Developer
deems necessary.
8.4. Use and operation of Development. Neither the Developer, nor any agent,
employee, or contractor of the Developer, nor any authorized user, occupant, or lessee of the
Developer Parcel shall use the Developer Parcel or allow the Developer Parcel to be used for the
generation, manufacture, storage, disposal, or release of Hazardous Materials in violation of law
following conveyance of title to the Developer Parcel to the Developer. 9. POST-CONSTRUCTION REQUIREMENTS AND COVENANTS.
9.1. Conformance with Culver City Redevelopment Plan. The Developer covenants
for itself, its lessees, successors and assigns and every successor in interest to the Developer
Parcel that the Developer, its lessees, successors and assigns shall use the Developer Parcel in full
conformance with and subject to the requirements of the Culver City Plan, as modified from time
to time, for so long as the Culver City Plan is in effect; provided, that no modification of the
Culver City Plan that would adversely impact the use of the Developer Parcel for the uses
contemplated by this Agreement shall be applicable to the Developer Parcel without Developer’s
written consent thereto. In satisfaction of the foregoing, Developer shall ensure that language
substantially similar to the above is incorporated as covenants running with the land into all
leases, rental agreements and grant deeds for the Development.
9.2. Nondiscrimination. The Developer covenants for itself, its heirs, executors,
administrators and assigns and all persons claiming under or through them, that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
religion, creed, sex, sexual preference, marital status, ancestry, national origin, AIDS or AIDS-
related complex, or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Developer Parcel nor shall Developer or any person claiming under or through
Developer establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the Developer Parcel. The foregoing covenants shall run with the land.
The Developer shall ensure that language substantially similar to the above is incorporated as
covenants running with the land into all leases, rental agreements and grant deeds for the
Development.
9.3. Maintenance of the Development. Developer, for itself and its successors and
assigns, hereby covenants and agrees to maintain and repair or cause to be maintained and
repaired the Developer Parcel and all related on-site improvements and landscaping, including,
without limitation, buildings, refuse areas, loading areas, parking areas, landscaping, lighting,
signs and walls, in a good first class condition and repair, free of rubbish, debris and other hazards
to persons using the same, and in accordance with all applicable laws, rules, ordinances and
regulations of all federal, state, and local bodies and agencies having jurisdiction over the
Development. Such maintenance and repair shall include, but not be limited to, the sweeping and
trash removal, and the care and replacement of all shrubbery, plantings, and other landscaping in a
healthy condition. In addition, Developer shall be required to maintain the Developer Parcel in
such a manner as to avoid the reasonable determination of a duly authorized official of Agency or
City that a public nuisance has been created by the absence of adequate maintenance such as to be
detrimental to the public health, safety or general welfare or that such a condition of deterioration
or disrepair causes appreciable harm or is materially detrimental to property or improvements.
9.4. Agreement Affecting Real Property. The covenants set forth in Sections 9.1, 9.2
and 9.3 shall be included in the Agreement Affecting Real Property to be recorded against the
Developer Parcel pursuant to this Agreement. In addition, appropriate provisions shall be
included in the Agreement Affecting Real Property as covenants running with the land relating to
the performance of Developer’s ongoing obligations under Sections 5.4, 5.5, 10.1, 10.2, 10.3, 11.1
and 11.2. Unless otherwise stated below in this Section 9.4, all such covenants shall expire on December 31, 2034; provided that the non-discrimination covenants shall be binding in
perpetuity; the obligation to refrain from certain property tax assessment appeals shall expire on
the Agency Assistance Termination Date, the obligation to pay the Base Payment and the
Additional Payment from sign operation pursuant to Section 5.4 shall expire when such signs no
longer exist; and the following covenants shall expire on December 31, 2024: any Agency
Approved Tenant requirements (Section 10.1.3), and restrictions on Transfer (Article 11).
10. USE OF THE DEVELOPER PARCEL.
10.1. Use of the Developer Parcel. For the period referred to in Section 9.4 above,
Developer covenants and agrees for itself, its successors, its assigns and every successor in
interest to the Developer Parcel, or any portion thereof, that Developer, such successors and such
assignees shall:
10.1.1. Develop and construct the Developer Parcel Work of
Improvements in substantial accordance with the Description of Developer Work
of Improvement, Agency approved plans, this Agreement, the Culver City Plan, the
plans approved for the Developer Parcel Work of Improvements by the City, the
Schedule of Performance, all entitlements, all Governmental Approvals, and any
applicable requirements of any Governmental Authority.
10.1.2. Use the Developer Parcel, or cause the Developer Parcel to
be used, solely as a high-quality retail shopping center in substantial accordance
with the Culver City Plan, this Agreement (including, without limitation the Scope
of Development) and the Agreement Affecting Real Property or other uses
reasonably approved in writing by Agency. No change in the use of the Developer
Parcel shall be permitted without the prior written approval of the Agency.
10.1.3. Make commercially reasonable good faith efforts to sign
Agency Approved Tenants occupying square footage equal to or greater than the
Agency Approved Square Footage Threshold. Prior to entering into any lease with
any tenant, Developer shall submit to Agency evidence reasonably satisfactory to
the Agency’s Executive Director demonstrating that such proposed tenant meets
the following criteria:
10.1.3.1 After the Developer Parcel Opening the
tenant’s/subtenant’s use is compatible with the existing uses on the
Developer Parcel and the use is consistent with the OPA and this
Agreement;
10.1.3.2 The tenant/subtenant has or employs managers
with appropriate managerial experience in operating the type of business for
which tenant/subtenant is attempting to lease/sublease space on the
Developer Parcel; and 10.1.3.3 The tenant/subtenant has the financial ability to
operate the type of business for which tenant/subtenant is attempting to
lease/sublease space on the Developer Parcel.
10.1.4. Comply with the Municipal Code such that neither the
Developer Parcel nor any part of it shall be used and no building or other
improvements shall be constructed, maintained, or used for any purposes other than
that which is allowed by the City’s Municipal Code and development permits, if
any, issued therefor.
10.1.5. Ensure that no use or operation will be made, conducted or
permitted on or with respect to all or any part of the Developer Parcel, which use or
operation is obnoxious to or out of harmony with the use of the Developer Parcel as
a first-class retail shopping center, including, but not limited to, the following:
(i) Any public or private nuisance (as defined in California
Civil Code Section 3479) connected with business operations conducted on the
Developer Parcel;
(ii) Any noise or sound that is objectionable due to
intermittence, beat, frequency, shrillness or loudness;
(iii) Any obnoxious odor;
(iv) Any noxious materials, and any toxic or caustic, or
corrosive fuel or gas in violation of applicable law;
(v) Any dust, dirt or particulate matter in excessive quantities;
(vi) Any unusual fire, explosion, or other damaging or
dangerous hazard;
(vii) Any warehouse, other than that which is incidental to the
primary commercial use or business operation, and any assembly, manufacturing,
distillation, refining, smelting, agriculture, or mining operation;
(viii) Any pawn shop or retail sales operation involving second-
hand merchandise;
(ix) Any adult business or facility as defined and regulated in
the City’s Municipal Code. Such uses include, without limitation, massage
establishments, adult news racks, adult bookstores, adult motion picture theaters,
and paraphernalia businesses;
(x) Any gun shop or retail sales operation for which the main
commercial use or business operation is the sale of guns; (xi) Any retail sales operation for which the average price of
merchandise is $5.00 or less, except that this prohibition shall not apply to (a) any
retail sales operation for which the main commercial use or business operation is
the sale of food and/or beverages, or (b) kiosks, or (c) an Agency Approved
Tenant;
(xii) Any non-retail, non-sales tax generating use, which
represents, in the aggregate, more than twenty percent (20%) of the total building
area on the Developer Parcel, unless such non-retail, non-sales tax generating uses
do not detract from the overall retail orientation of the Development.
10.1.6. Maintain and repair and operate the Developer Parcel and
all improvements constructed or to be constructed thereon (including landscaping,
lighting and signage), or cause the Developer Parcel and all such improvements to
be maintained and repaired and operated in a first-quality condition, free of debris,
waste and graffiti, and in compliance with the terms of the Culver City Plan and the
following:
10.1.6.1 All improvements on the Developer Parcel shall be
maintained in good condition in accordance with the custom and practice
generally applicable to comparable first class retail shopping centers in Los
Angeles County, and in substantial conformance and substantial
compliance with all plans, drawings and related documents approved by the
Agency pursuant to this Agreement and the City, all conditions of approval
of land use entitlements adopted by the City or the City’s planning
department or planning commission, including painting and cleaning of all
exterior surfaces of all private improvements and public improvements to
the curbline.
e 10.1.6.2 Landscape maintenance shall be consistent with th
custom and practice generally applicable to comparable first-class, retail
shopping centers in Los Angeles County, including, without limitation,
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree
and shrub pruning, trimming and shaping of trees and shrubs to maintain a
natural and healthy appearance, road visibility, and irrigation coverage;
replacement, as needed, of all plant materials; control of weeds in all
planters, shrubs, lawns, ground covers, or other planted areas; and staking
for support of trees.
10.1.6.3 Clean-up maintenance shall be consistent with the
custom and practice generally applicable to comparable first-class, retail
shopping centers in Los Angeles County, including, without limitation,
maintenance of all sidewalks, paths and other paved areas in a clean and
weed-free condition; maintenance of all such areas clear of dirt, mud, trash,
debris or other matter which is unsafe or unsightly; removal of all trash,
litter and other debris from improvements and landscaping; clearance and
cleaning of all areas on which maintenance operations are performed prior to the end of each day to ensure that all cuttings, weeds, leaves and other
debris are properly disposed of by maintenance workers.
10.1.7. If the Agency gives written notice to Developer that the
maintenance or condition of the Developer Parcel or any portion thereof or any
improvements thereon does not comply with this Agreement and such notice
describes the deficiencies, Developer shall correct, remedy or cure the deficiency
within thirty (30) days following the submission of such notice, unless the notice
states that the deficiency is an urgent matter relating to public health and safety in
which case Developer shall commence to cure the deficiency within forty-eight
(48) hours following the submission of the notice and shall proceed with all due
diligence to complete the cure at the earliest possible time thereafter but in no event
later than thirty (30) days following the submission of such notice. In the event
Developer fails to maintain the Developer Parcel or any portion thereof or any
improvements thereon in accordance with this Agreement and fails to cure any
deficiencies within the applicable period described above, the Agency shall have, in
addition to any other rights and remedies hereunder, the right to maintain the
Developer Parcel and the improvements thereon, or portion thereof, or to contract
for the correction of any deficiencies, and Developer shall be responsible for
payment of all such costs actually and reasonably incurred by the Agency and such
payment shall constitute a lien on the Developer Parcel pursuant to California Civil
Code Section 2881.
10.1.8. Pay when due all real estate taxes and assessments assessed
or levied on the Developer Parcel or any portion thereof or any improvements
thereon or any interest therein.
10.1.9. As a material inducement to entering into this Agreement,
Agency is relying on Developer to waive and refrain from making any appeal,
challenge or contest of or to the validity or amount of any tax assessment,
encumbrance or lien on the Developer Parcel; provided, however, that Developer
may appeal, challenge or contest (1) the initial assessment of the Developer Parcel
following the issuance of the Release of Construction Covenants for the Developer
Parcel Work of Improvement by the Agency to the extent that such initial
assessment is greater than the development costs of the applicable portion of the
improvements; (2) any increase in assessment of the Developer Parcel improperly
assessed because of a purported change of ownership where no such change took
place; (3) any increase in assessment of the Developer Parcel occurring by reason
of a bona fide arms-length sale to the extent such increase in assessment results in
an assessment in excess of the purchase price of such bona fide arms-length sale; or
(4) any other assessment, so long as such challenge does not attempt to obtain or
result in an assessment which is lower than an amount equal to that established by
the Los Angeles County Tax Assessor as reflected in the first equalized assessment
roll reflecting the completion of the Developer Parcel Work of Improvements,
increased by a compounded 2% per year thereafter to the date of challenge; and
further provided that, with respect to any such challenge or appeal under the
foregoing exceptions, the Developer shall prosecute any such permitted appeal, challenge or contest diligently and in good faith. Developer covenants and agrees
to provide the Agency with at least thirty (30) days advance written notice of the
filing of any property tax appeal and the basis therefor, and to refrain from
objecting in any way to the standing of the Agency to participate in any such
appeals.
10.1.10. As a material inducement to entering into this Agreement,
Agency is relying on Developer to provide for the Development to be operated,
managed and maintained in accordance with the covenants and restrictions set forth
in the Agreement Affecting Real Property, attached to this Agreement as Exhibit G.
10.2. Obligation to Refrain from Discrimination. Developer covenants and agrees, in
perpetuity, for itself, and shall cause its successors and assigns in interest to the Developer Parcel
or any part thereof to covenant, that there shall be no discrimination against or segregation of any
person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of
the Developer Parcel, nor shall the transferee itself or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees of the Developer Parcel.
10.3. Form of Nondiscrimination and Nonsegregation Clauses. The Developer shall
refrain from restricting the rental, sale or lease of the property on the basis of sex, sexual
orientation, marital status, race, color, creed, religion, ancestry or national origin of any person.
All deeds, leases or contracts shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
10.3.1. In deeds: “The grantee herein covenants by and for himself
or herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in
the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the
premises herein conveyed, nor shall the grantee or any person claiming under or
through him or her, establish or permit any practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees, or vendees in the premises herein
conveyed. The foregoing covenants shall run with the land.”
10.3.2. In leases: “The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons
claiming under or through him or her, and this lease is made and accepted upon and
subject to the following conditions: That there shall be no discrimination against or segregation of any person or
group of persons, on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the Government Code, as those bases are defined in Sections
12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section
12955, and Section 12955.2 of the Government Code, in the leasing, subleasing,
transferring, use, occupancy, tenure, or enjoyment of the premises herein leased
nor shall the lessee himself or herself, or any person claiming under or through
him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy,
of tenants, lessees, sublessees, subtenants, or vendees in the premises herein
leased.”
10.3.3. In contracts: “There shall be no discrimination against or
segregation of any person or group of persons, on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are
defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in
the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land,
nor shall the transferee itself or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use, or occupancy, of tenants,
lessees, sublessees, subtenants, or vendees of the land.”
11. TRANSFERS AND CHANGES IN DEVELOPER.
11.1. Changes in Ownership or Control of Developer; Transfers. Developer represents
and agrees that its undertakings pursuant to this Agreement are for the purpose of redevelopment
of the Developer Parcel and not for speculation in land holding. Developer further recognizes that
the qualifications and identity of Developer are of particular concern to the City and Agency, in
light of the following: (a) the importance of the redevelopment of the Developer Parcel to the
general welfare of the community; (b) the public assistance that has been made available by law
and by the Agency for the purpose of making such redevelopment possible; and (c) the fact that a
change in ownership or control of Developer or any other act or transaction involving or resulting
in a significant change in ownership or control of Developer, is for practical purposes a transfer or
disposition of the property then owned by Developer. Developer further recognizes that it is
because of such qualifications and identity that Agency is entering into the Agreement with
Developer. Therefore, no voluntary or involuntary successor in interest of Developer shall
acquire any rights or powers under this Agreement except as expressly set forth herein. The
provisions of this Article shall no longer apply after July 21, 2024, and, upon such date, all
restrictions on transfer set forth in this Agreement or the Agreement Affecting Real Property shall
automatically terminate.
11.1.1. Changes in Ownership or Control of Developer.
11.1.1.1 Developer represents and agrees for itself, its
officers, members, partners and any successor in interest of itself and each officer, member and partner that following the date of execution of this
Agreement by the Agency there shall be no significant change in the
general partner of Developer, or with respect to the identity of the parties in
control of Developer, by any method or means, except Permitted Transfers
or unless pre-approved in writing by the Agency.
11.1.1.2 Developer shall promptly notify the Agency of an
and all changes whatsoever in the identity of the parties in control of
Developer, of which it or any of its officers, members or partners have been
notified or otherwise have knowledge or information.
y
11.1.1.3 This Agreement may be terminated by the Agency
if there is any significant change (voluntary or involuntary) in the
management or control of Developer (other than such changes occasioned
by the death or incapacity of any individual) following the date of execution
of this Agreement by the Agency unless it is a Permitted Transfer or it has
been pre-approved in writing by the Agency.
11.1.2. Prohibition against Transfer.
11.1.2.1 Developer represents and agrees for itself, its
officers, members, partners and any successor in interest of itself and each
officer, member and partner that following the date of execution of this
Agreement by the Agency Developer shall not make or permit a Transfer,
by any methods or means, except a Permitted Transfer or unless approved
in writing by the Agency, which such approval cannot be unreasonably
withheld.
11.1.2.2 Developer shall promptly notify the Agency of an
and all Transfers of which it or any of its officers, members or partners
have been notified or otherwise have knowledge or information.
y
11.1.2.3 Following the date of execution of this Agreement
by the Agency, this Agreement may be terminated by the Agency
(following notice to Developer and opportunity to cure) if there is any
Transfer (other than a Permitted Transfer) without the prior written
approval of Agency, which Agency may not unreasonably withhold.
11.1.3. Agency Consideration of Permitted Transfer or Other
Transfer.
11.1.3.1 Permitted Transfers. Developer shall provide the
Agency written notice of a Permitted Transfer, which notice shall be
accompanied by sufficient evidence demonstrating that the Transfer is, in
fact, a Permitted Transfer. The Agency shall provide Developer a written
response indicating whether the Agency agrees with Developer that it is a
Permitted Transfer. If the Agency does not reasonably agree with
Developer and if the Transfer is not in fact a Permitted Transfer, then Developer shall be obligated to comply with subsection 11.1.3.2 , belo
In the absence of a specific written agreement executed by the Agency, no
Permitted Transfer, or approval by the Agency of any such Permitted
Transfer, shall be deemed to relieve Developer or any other party from
obligations under this Agreement. Notwithstanding anything contained
herein to the contrary, the provisions of this Section 11.1 shall not apply
any Permitted Mortgagee, or its successor in interest after a foreclosure or
deed-in-lieu of foreclosure.
w.
any
to
11.1.3.2 Other Transfers. Developer shall provide the
Agency written
nts and
11.2. No Encumbrances Except Permitted Mortgages
notice requesting approval of any Transfer other than a
Permitted Transfer, which notice shall be accompanied by evidence
sufficient to the Agency demonstrating the proposed transferee’s
operational qualifications and experience and financial commitme
resources, in sufficient detail to allow the Agency to evaluate the proposed
transferee pursuant to the criteria set forth in this Agreement and the goals
and objectives of the Agency in entering into this Agreement. The Agency
shall not unreasonably withhold such approval. In the absence of a specific
written agreement executed by the Agency, no Transfer, or approval by the
Agency of any such Transfer, shall be deemed to relieve Developer or any
other party from any obligations under this Agreement.
. The following provisions shall
be appl un
11.2.1. Developer may encumber its interests in any portion of the
Developer Par
ncy
e
per to
s
11.2.1.1 No such Mortgage shall be binding upon Agency in
the enforcemen
y of
er with
icable til a Release of Construction Covenants for the Developer Parcel Work of
Improvement has been recorded:
cel with a deed of trust or mortgage or other security instrument
(referred to herein as a “Mortgage”) without the consent or approval of the Age
so long as such deed of trust or mortgage or other security instrument is a Permitted
Mortgage. A “Permitted Mortgage” means (i) any Mortgage meeting all of the
criteria set forth in this Section 11.2.1 (it being agreed that no written consent of th
Agency is required so long as such criteria are satisfied) and (ii) that certain Fee
and Leasehold Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, dated as of July 11, 2001, given by Develo
Chicago Title Company, for the benefit of UBS Warburg Real Estate Investment
Inc., and recorded with the Los Angeles County Recorder’s Office, as the same has
been or may hereinafter be amended, modified or supplemented from time to time
(as amended, the “Existing Mortgage”).
t of its rights and remedies herein, unless and until
Developer delivers or causes to be delivered to Agency a certified cop
the fully executed original Mortgage bearing the date and recording
information and a certified copy of the original note secured by the
Mortgage, each certified as true and correct by the Developer, togeth
written notice of the address of the Mortgagee to which notices may be sent; and in the event of an assignment of such Mortgage, such assignment
shall not be binding upon Agency unless and until a copy thereof, bearing
the date and recording information together with written notice of the
address of the assignee thereof to which notices may be sent, have been
delivered to Agency.
11.2.1.2 The Mortgage shall be originated only by a
Qualified Lend er”
(i) Any one or a combination of the following lending sources
authorized und ppli
(i) a
sumer Price
er. For the purposes hereof, the term “Qualified Lend
shall consist of:
er a cable California law to make mortgage loans and not under
any order or judgment of any court or administrative agency restricting or
impairing its operation as a lender, and having (together with its affiliates)
net worth in the amount of not less than Twenty-Five Million Dollars
($25,000,000), increased by the percentage increase, if any, in the Con
Index - all Urban Consumers, Los Angeles-Riverside-Orange County, CA from
the date of this Agreement to the date of anniversary thereof most recently
preceding the date of calculation, and/or (ii) originating in excess of One Hu
Million Dollars ($100,000,000) of mortgage and/or mezzanine loans in the prior
twelve (12) month period, including, without limitation: a commercial or savings
bank; a trust company; an insurance company; a savings and loan association; a
building and loan association; a real estate investment trust; a pension retirement
or welfare fund or pension advisory firm; mutual fund; or an endowment fund or
foundation authorized to make loans in the State of California; or
ndred
(ii) Any other person or company who is generally accepted as
a lender or pro r of
11.2.2. To effectuate this Section, Developer shall timely submit to
the Agency Ex
11.2.3. Any extension, modification, change or amendment to a
Mortgage that
11.2.4. A mortgagee of a Permitted Mortgage shall not be bound by
any amendmen
11.2.5. In any event, Developer shall promptly notify Agency of
any mortgage r
vide capital in the financing and capital markets, subject to the
prior written approval by the Agency Executive Director or designee, which
approval may be withheld in its reasonable discretion.
ecutive Director or designee reasonable information concerning the
identity of any proposed lender.
would make such Mortgage no longer meet the requirements of
subsection (i), above shall not be effective, or binding upon Agency, unless and
until approved by Agency.
t, implementation agreement or modification to this Agreement
subsequent to its approval without such lender giving its prior written consent.
or deed of trust created or attached to the Developer Parcel whetheby voluntary act of Developer or otherwise (other than the Existing Mortgage, for
which no additional notification shall be necessary).
11.3. Mortgagee Not Obligated to Construct Works of Improvement. The holder of a
Permitted Mortgage (a “Permitted Mortgagee”) shall not be obligated by the provisions of this
Agreement to construct or complete either the Developer Parcel Work of Improvement or to
guarantee such construction or completion.
11.4. Notice of Default to Mortgagees; Right of Mortgagee to Cure Defaults.
Whenever the Agency shall deliver any notice or demand to Developer with respect to any breach
or default by Developer in the completion of the construction of the Improvements, the Agency
shall at the same time deliver to each Permitted Mortgagee of record for the applicable parcel a
copy of such notice or demand. Each such Permitted Mortgagee shall (insofar as the rights of the
Agency are concerned) have the right at its option within one hundred twenty (120) days after the
receipt of the notice and any applicable Developer cure period, to cure or remedy, or commence to
cure or remedy, any such default and to add the cost thereof to the security interest debt and the
lien of its security interest. If such default shall be a default which can only be remedied or cured
by such lender upon obtaining possession of the applicable parcel, such Permitted Mortgagee shall
seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall
remedy or cure such default within one hundred twenty (120) days after obtaining possession;
provided that in the case of a default which cannot with diligence be remedied or cured, or the
remedy or cure of which cannot be commenced within such one hundred twenty (120) day period,
such Permitted Mortgagee shall have such additional time as reasonably necessary to remedy or
cure such default with diligence and continuity; and provided further that such Permitted
Mortgagee shall not be required to remedy or cure any non-curable default of Developer. Any
Permitted Mortgagee who forecloses on its Permitted Mortgage, or is assigned or otherwise
succeeds to the Developer Parcel or any portion thereof, shall have the right to undertake or
continue the construction or completion of the Improvements upon the parcel acquired by such
Permitted Mortgagee upon execution of a written agreement with the Agency by which such
Permitted Mortgagee expressly assumes Developer’s rights and obligations under this Agreement,
approval of which agreement shall not be unreasonably withheld, conditioned or delayed by the
Agency. Any such Permitted Mortgagee completing the Developer Parcel Work of Improvement
shall be entitled, upon written request made to the Agency, to a Release of Construction
Covenants from the Agency for either the Developer Parcel Work of Improvement.
11.5. Failure of Permitted Mortgagee to Complete Works of Improvement. In any
case prior to the issuance of the Release of Construction Covenants for the Developer Parcel
Work of Improvements by the Agency, where, following notice and an opportunity to cure as
provided in this Agreement, neither Developer nor the Permitted Mortgagee has cured a default
under this Agreement, the Agency may terminate this Agreement.
11.6. Mortgagee Protections. No violation or breach of the covenants, conditions,
restrictions, provisions or limitations contained in this Agreement or the Agreement Affecting
Real Property shall defeat or render invalid or in any way impair the lien or charge of any
mortgagee, but this Agreement and the Agreement Affecting Real Property and the covenants
contained herein and therein shall be senior in priority to any lien on the Developer Parcel except
as expressly approved in writing by the Agency and except as otherwise provided as to the Existing Mortgage only in Section 5.2.2. In the event any Mortgagee or proposed Mortgagee
requests any modification or amendment to the lender protection provisions set forth in this
Agreement, Agency agrees not to unreasonably withhold its consent to such requested
modification or amendment.
12. TERMINATION AND REMEDIES.
12.1. No Fault Termination. Developer may terminate this Agreement if despite
diligent and good faith efforts, Developer is unable to obtain the land use approvals required for
construction of the Development. If Developer so terminates the Agreement, neither party shall
have any rights or obligations under this Agreement.
12.2. Fault of the Agency. Any breach by the Agency of any material provision of this
Agreement shall be an “Event of Default” by the Agency under this Agreement.
12.3. Developer Remedies. If an Event of Default on the part of the Agency occurs, the
Developer shall first notify the Agency in writing of the purported breach, giving the Agency at
least thirty (30) calendar days from receipt of such notice to cure or begin in good faith to cure
such breach. If the Agency does not cure or begin to cure the breach within the time period
specified, or the Agency does not thereafter diligently and continuously pursue such cure to
completion, the Developer may pursue any of the following remedies: (i) terminating this
Agreement; (ii) prosecuting an action for damages; (iii) seeking equitable relief from a court of
competent jurisdiction, including but not limited to specific performance; or (iv) pursuing any
other remedy at law or in equity.
12.4. Fault of the Developer. The occurrence of any of the following events shall be an
“Event of Default” by the Developer under this Agreement:
12.4.1. The Developer fails to commence or complete construction
of any portion of the Developer Parcel Work of Improvement undertaken by
Developer within the times set forth in the Schedule of Performance, for any reason
other than Unavoidable Delay.
12.4.2. The Developer voluntarily or involuntarily undertakes or
attempts to undertake a Transfer in violation of this Agreement.
12.4.3. Any of the Developer’s representations or warranties made
in this Agreement, any statements made to the Agency by the Developer, or any
certificates, documents, or schedules supplied to the Agency by the Developer were
untrue in any material respect when made, or that the Developer concealed or failed
to disclose a material fact from the Agency and such misrepresentation or failure to
disclose has a material, adverse effect on Developer’s ability to perform hereunder.
12.4.4. The Developer, or any partner, managing member, or parent
entity of the Developer, files for bankruptcy, dissolution, or reorganization, fails to
obtain a full dismissal of any involuntary filing brought by another party under
bankruptcy or similar laws before the earlier of final relief or 90 days after filing, makes a general assignment for the benefit of creditors, applies for the appointment
of a receiver, trustee, custodian, or liquidator, or fails to obtain a full dismissal of
any such involuntary application brought by another party before the earlier of final
relief or 90 days after the filing, becomes insolvent, or fails to pay its debts as they
become due.
12.4.5. The Developer breaches any other material provisions of
this Agreement.
If an Event of Default on the part of the Developer occurs, the Agency shall notify the
Developer and any of its lenders for the Development in writing of its purported breach or
failure, giving the Developer at least thirty (30) calendar days from receipt of such notice to cure
such breach or failure, or, if such breach cannot reasonably be cured within the 30-day period,
then the Developer shall not be in default if the Developer commences such cure within such 30-
day period and diligently pursues such cure to completion, provided, however that in any event
such default shall be cured within ninety (90) days. In the event the Developer does not cure
within this time period, the Agency may pursue the remedies set forth below. In addition, if the
Event of Default is not cured and this Agreement is terminated, the Developer shall deliver to the
Agency all plans, specifications, drawings, studies, surveys, test results, and reports concerning
the Development, which shall thereafter become the property of the Agency to the extent of
Developer’s interest therein, and subject to any restrictions on the use thereof contained in the
underlying contracts related thereto.
12.5. Agency Remedies. If an Event of Default by the Developer occurs and the Event
of Default is not cured as set forth above, the Agency may pursue any or all of the following
remedies: (i) terminating this Agreement; (ii) prosecuting an action for damages; (iii) seeking
equitable relief from a court of competent jurisdiction, including but not limited to specific
performance; or (iv) pursuing any other remedy at law or in equity.
13. RIGHTS OF MORTGAGE HOLDERS.
13.1. Encumbrance for Development Purposes. The Developer may place, mortgages,
deeds of trust, or any other reasonable method of security upon the Developer Parcel before the
Development has been completed, for the purpose of securing loans of funds to be used for
financing the development of the Development, subject to the terms and conditions of Section 13
hereof. Prior to commencement of the construction of the Development, the Developer shall
promptly notify the Agency of any mortgage, deed of trust, sale and lease-back or other financing,
conveyance, encumbrance or lien that has been or will be created or attached to the Developer
Parcel. Notwithstanding any provision of this Agreement, the rights of the Agency under this
Agreement shall not defeat, render invalid, or limit in any way any lien or encumbrance placed on
the Developer Parcel for development purposes as authorized under this Agreement or any rights
or interest of any holder of such lien or encumbrance, except for any limitations specifically
imposed by this Agreement.
13.2. Holder Not Obligated to Construct. The mortgagee of any mortgage, beneficiary
of any deed of trust, or holder of any other recorded security interest authorized by this Agreement in any part of the Developer Parcel (a “Holder”) is not obligated to construct or complete any
improvements or to guarantee such construction or completion. However, nothing in this
Agreement shall be deemed to permit any Holder to devote the Developer Parcel to any uses, or to
construct any improvements thereon, other than those uses or improvements provided for or
authorized by this Agreement.
13.3. Notice of Default and Right to Cure. Whenever the Agency pursuant to its rights
set forth in Section 4 of this Agreement delivers any notice or demand to the Developer with
respect to the commencement, completion, or cessation of the construction of the Development,
the Agency shall at the same time deliver to each Holder a copy of such notice or demand. If an
Event of Default on the part of the Developer remains uncured after the expiration of the period
provided herein for Developer to remedy or cure such default, any Holder shall have the right to
remedy, or cause to be remedied, such default the period provided in Section 11.4 above, and the
Agency shall accept such performance by or at the insistence of the Holder as if the same had
been timely made by the Developer. The Holder shall have the right to add the cost of the cure to
its security. Nothing in this Agreement is intended to permit a Holder to construct improvements
on the Developer Parcel (beyond the extent necessary to conserve or protect such improvements
or construction already made) without first having expressly assumed the Developer’s obligations
to the Agency herein by written agreement reasonably satisfactory to the Agency. The Holder in
that event must agree to complete, in the manner provided in this Agreement, the Development
and submit evidence satisfactory to the Agency that it has the qualifications and financial
responsibility necessary to perform such obligations. After approval by the Agency, any Holder
properly completing the Developer Parcel Work of Improvement shall be entitled, upon written
request made to the Agency, to a Release of Construction Covenants as provided for in this
Agreement.
13.4. Right of Agency to Cure. By appropriate agreement with a Holder, the Developer
shall cause a Holder to provide the Agency with written notice by registered mail of the
occurrence of any event of default under the mortgage, deed of trust of other security instrument.
In the event of a default or breach by the Developer of a mortgage, deed of trust or other security
instrument prior to the completion of the Development, and if the Holder has not exercised its
option to complete the Development, the Agency may (but is not required to) cure the default,
prior to the completion of any foreclosure. In such event the Agency shall be entitled to
reimbursement from the Developer for all costs and expenses incurred by the Agency in curing
the default. The Agency shall also be entitled to a lien upon the Developer Parcel to the extent of
such costs and disbursements. Any such lien shall be subordinate to mortgages, deeds of trust or
other security instruments executed for the purpose of obtaining funds to purchase and develop the
Developer Parcel as authorized herein.
13.5. Right of Agency to Satisfy Other Liens. After the conveyance of title to the
Developer Parcel and prior to the recordation of a Release of Construction Covenants, and after
the Developer has had a reasonable time to challenge, cure or satisfy any liens or encumbrances
on the Developer Parcel or any portion thereof, the Agency shall have the right to satisfy any such
lien or encumbrances not satisfied by the Developer; provided, however, that nothing in this
Agreement shall require the Developer to pay or make provision for the payment of any tax,
assessment, lien or charge so long as the Developer in good faith shall contest the validity or
amount thereof and so long as the Developer shall provide such reasonable security as may be required by the Agency to insure the payment of such tax, assessment, lien or charge to prevent
any sale, foreclosure or forfeiture of the Developer Parcel by reason of such nonpayment. Such
security shall be not less than the amount of the contested tax, assessment, lien or charge,
including all penalties, fines and interest which can be assessed thereon.
13.6. Transfers by Holder. If any Holder shall acquire the Developer Parcel by
foreclosure, deed in lieu of foreclosure or other transfer in satisfaction of debt, such Holder shall
have the same rights afforded to Developer to Transfer the Developer Parcel to Permitted
Transferees, without being required to assume this Agreement. Further, in the event that any
consent of Agency is required in connection with any such Transfer by the Holder, Agency shall
not unreasonably withhold its consent to any such Transfer.
14. INDEMNIFICATION AND INSURANCE.
14.1. Environmental Indemnities
14.1.1. In addition to the indemnifications set forth in Section 6,
and subsection 15.10 of this Agreement, Developer hereby agrees to indemnify,
protect, defend and hold harmless, individually and collectively Agency, the City
and their respective elected officials, officers, employees, agents, consultants,
contractors, attorneys, and representatives (and the successors to and assignees of
such parties’ respective interests in either the Development) (collectively, the
“Agency Indemnified Parties”), and hold Agency Indemnified Parties harmless
from and against any and all losses, liabilities, damages, injuries, costs, expenses
and claims of any and every kind whatsoever paid, incurred or suffered by, or
asserted against Agency Indemnified Parties for, with respect to, or as a direct or
indirect result of, the use, generation, storage, release or disposal of Hazardous
Materials, on or under the Developer Parcel (“Subject Hazardous Materials”) by
Developer, its tenants, subtenants, employees or agents, or the escape, seepage,
leakage, spillage, discharge, emission or release of any Subject Hazardous
Materials from the Developer Parcel (including, without limitation, any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or arising under
CERCLA, any so-called “Superfund” or “Superlien” law, or any other federal, state
or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct concerning any Hazardous
Materials), if caused by, or within the control of Developer, its employees, agents,
tenants, subtenants, or their respective successors or assigns (referred to as the
“Claims”); provided, however, that this indemnity shall not apply to the extent
Claims result from the negligence or willful misconduct of an Agency Indemnified
Party.
14.1.2. Developer represents that, except as disclosed to the
Agency in writing, it has not received any notice of (1) the happening of any event
involving the spillage, discharge or cleanup of any Hazardous Materials affecting
the Developer Parcel or (2) any complaint, order, citation or notice with regard to
air emissions, water discharges, noise emissions or any other environmental, health or safety matter affecting the Developer Parcel (“Environmental Complaint”)
from any person or entity, including, without limitation, the United States
Environmental Protective Agency (“EPA”) which has not been remedied.
14.1.3. Without limitation of the Agency’s rights under this
Agreement, if Developer fails to remove or cause to be removed or dispose of or
caused to be disposed of any Subject Hazardous Materials covered under the
Developer’s indemnity obligation in this Section, or to take reasonable actions to
clean up, remove, resolve or minimize the impact of, or otherwise deal with, any
such Subject Hazardous Materials or any Environmental Complaint, upon
Developer’s receipt of any notice from any person or entity, including without
limitation, the EPA, asserting the existence of any such Subject Hazardous
Materials or Environmental Complaint on or pertaining to the Developer Parcel
which, if true, could result in an order, suit or other action against the Developer or
Agency affecting any part of the Developer Parcel by any governmental agency or
otherwise which, in the reasonable judgment of the Agency, could jeopardize the
Agency’s interests under this Agreement, then, after providing reasonable notice to
Developer of the alleged failure by Developer under this subsection and providing
Developer an opportunity to cure such alleged failure, the Agency shall have the
right, but not the obligation, to enter onto the Developer Parcel or take such other
actions as the Agency deems necessary or advisable to do so; provided, that no
such entry or other actions shall interfere with the work of Developer on the
Developer Parcel or Developer’s operations thereon or with the use or occupancy
of any portion of the Developer Parcel by any tenant of the Developer Parcel.
14.2. Indemnification.
14.2.1. As a material part of the consideration to the Agency,
Developer agrees to indemnify, protect, defend and hold harmless, individually and
collectively, the Agency and the Agency Indemnified Parties from and against all
lawsuits, causes of action, claims, demands, damages, injuries, fines, losses,
judgments, liens, encumbrances, charges, obligations, liabilities, costs and expenses
(including but not limited to injury or loss of life to persons or damage to or loss of
property, and reasonable attorneys’ fees, expert witness fees and other costs of
defense or of enforcing this indemnity) asserted by a third-party against Agency
(collectively “Agency Claims”) arising out of or relating to any of the following:
14.2.1.1 Any defect in the Developer Parcel Work of
Improvement, subject to any limitations in applicable law (including
specifically, but without limitation, any statutes of limitations applicable to
any action which may be brought respecting alleged defects in the plans,
drawings and related documents for the Developer Parcel Work of
Improvement);
14.2.1.2 Any act or omission by any person or entity (other
than by an Agency Indemnified Party) occurring on the Developer Parcel, in connection with construction of the Developer Parcel Work of
Improvement;
14.2.1.3 Any mechanics’, materialpersons’, vendors’, or
suppliers’ lien claimed by any person, furnishing construction, labor,
materials, supplies or services to or for the Developer Parcel, or with
respect to the Developer Parcel Work of Improvement (other than to an
Agency Indemnified Party), during the construction of the Developer Parcel
Work of Improvement (the “Construction Period”);
14.2.1.4 Use, possession or development of the Developer
Parcel, the existence of any unsafe or dangerous condition on the Developer
Parcel, and any accident, injury or damage whatsoever to any person or
entity occurring on the Developer Parcel, or with respect to the Developer
Parcel Work of Improvement (unless caused by an Agency Indemnified
Party) during the Construction Period;
14.2.1.5 The breach or falsity of any material re
or warranty made or given by Developer under this Agreement;
presentation
14.2.1.6 Any willful misconduct or negligent act or
omission by D
or
14.2.1.7 Any assertion, claim or cause of action against the
Agency or a A
of the
14.2.1.8 Any assertion, claim or cause of action against the
Agency or a A
e to
14.2.2. If the Agency receives notice of an Agency Claim or
otherwise has orm
eveloper or its officers, directors, partners, members,
employees, agents, tenants, subtenants, or their respective successors
assigns in connection with the construction of the Developer Parcel Work
of Improvement;
gency Indemnified Party for the payment or performance of
any indebtedness or obligation of Developer or its officers, directors,
partners, members, employees, agents, tenants, subtenants, or their
respective successors or assigns in connection with the development
Developer Parcel Work of Improvement, whether on account of any theory
of relationship, derivative liability, comparative negligence or otherwise;
and
gency Indemnified Party based on California Health &
Safety Code Section 33426.7 in connection with any Agency Assistanc
Developer arising out of the opening of the Target store in the Development
in relation to the existing Target store on La Cienega Blvd. in Los Angeles.
actual knowledge of an Agency Claim, it shall promptly (1) inf
Developer of such claim of which it has knowledge and (2) send to Developer a
copy of all written materials it receives from the claimant relating to the Agency
Claim. Such written material shall consist of copies of any complaint, motion or
other documents filed with any court, tribunal or other body before which a proceeding has been filed. Failure of the Agency to so inform Developer or
provide materials shall not, however, waive, cause forfeiture of or limit the
remedies available to any Agency Indemnified Party with respect to enforce
its indemnification rights as stated herein, except to the extent such failure inhibits
Developer from taking, or otherwise prejudices Developer’s ability to take,
corrective action or otherwise defend such Agency Claim.
to
ment of
14.2.3. Developer shall, immediately upon receipt of written
notification of for
l
s.
14.2.4. The provisions of this Section shall survive the termination
of this Agreem
14.3. Obligation to Maintain Insurance
any Agency Claim or demand, assume in full the responsibility
the defense of any Agency Claim or demand and pay in connection therewith any
loss, damage, deficiency, liability, obligation, cost or expense. In the event of any
action or proceeding, in court, arbitration or otherwise, in connection with any
Agency Claim or demand, Developer shall have the right and responsibility to
assume the defense of any such action, all at Developer’s own cost with counse
selected by Agency; and Developer shall immediately satisfy and discharge any
final decree or judgment rendered therein. Developer shall fully and regularly
inform the Agency of the progress of the defense and any settlement discussion
ent and completion of the Developer Parcel Work of Improvement
with respect to any Agency Claim arising prior to said completion.
. Throughout any construction period,
Develo ll
urance
14.3.1. Insurance Policies
per sha procure or cause to be procured and continuously maintain or cause to be
maintained such insurance policies as are required under this Section (individually an “Ins
Policy” and collectively the “Insurance Policies”).
. During any Construction Period,
Developer sha
14.3.1.1 General Liability Insurance
ll procure or cause to be procured and maintain or cause to be
maintained in full force and effect the following Insurance Policies:
. Commercial general
liability insura
y
rsonal
ctor
nd
streets
nce, including supplementary coverage of Blanket
Contractual Liability (specifically including Developer’s indemnit
obligations under this Agreement), Broad Form Property Damage, Pe
Injury Liability with the “employee” and “contractual” exclusions deleted,
Product and Completed Operations Liability, Fire Legal Liability, Business
Automobile Bodily Injury and Property Damage Liability extending to
owned, non-owned and hired vehicles of Developer or its general contra
used in performance of Developer’s obligations hereunder, amended as
necessary to comply with Governmental Requirements. Such coverage
shall insure on an occurrence basis against claims for “personal injury” a
“property damage,” including but not limited to bodily injury, death or
property damage occurring upon, in or about the Developer Parcel
including construction and staging areas, or any adjoining sidewalk,
and passageways. Such coverage shall take effect and afford protection on
or prior to commencement of construction of the Developer Parcel Work of Improvement. Such coverage shall have an initial minimum coverage limit
per occurrence of not less than $3,000,000 with respect to personal injury or
death to any one or more persons or damage to property (i.e. combined
single limit), and carry a deductible per occurrence of not more than
$25,000.
14.3.1.2 Builder’s Risk Insurance Throughout any
Construction P
r’s Risk
s
y, but in
and
reciation
14.3.1.3 Workers’ Compensation Insurance
eriod, coverage of the type now known as builder’s
completed value risk insurance, as delineated on an All Risk Builde
100% Value Non-Reporting Form. Such insurance shall insure against
direct physical loss or damage by fire, lightning, wind, storm, explosion,
collapse, underground hazards, flood, vandalism, malicious mischief, glas
breakage and such other causes as are covered by such form of insurance.
Such policy shall include (a) an endorsement for broad form property
damage, breach of warranty, demolition costs and debris removal, (b) a
“Replacement Cost Endorsement” in amount sufficient to prevent
Developer from becoming a co-insurer under the terms of the polic
any event in an amount not less than 100% of the then full replacement
cost, to be determined at least once annually, and (c) an endorsement to
include coverage for budgeted soft costs. The replacement cost coverage
shall be for work performed and equipment, supplies and materials
furnished to the Developer Parcel or any adjoining sidewalks, streets
passageways, or to any bonded warehouse for storage pending
incorporation into the work, without deduction for physical dep
and with a deductible not exceeding $25,000 per occurrence.
. Workers’
compensation r,
of
to
14.3.1.4 Errors and Omissions Insurance
insurance, to be carried by Developer, its general contracto
and all subcontractors and consultants, in an amount and form sufficient to
meet all applicable Governmental Requirements, and employer’s liability
coverage to a limit of not less than $1,000,000, with respect to personal
injury or death to any one or more persons or damage to property. Such
policies shall cover all persons providing labor or services to or on behalf
Developer, its general contractor, subcontractors or consultants and all risks
to such persons arising out of construction, use or occupancy of the
Developer Parcel, repair of or entry onto the Developer Parcel, prior
completion of the Developer Parcel Work of Improvement.
. Unless waived by
Agency, errors
y
d it
and omissions insurance, specifically and exclusively
designated for the Developer Parcel Work of Improvement to be carried b
the architect and engineer for the Developer Parcel Work of Improvement.
Such insurance shall provide a minimum coverage limit per claim of not
less than $500,000, or such lesser amount as Agency may approve, in
writing. Such policy may be written on a “claims made” basis provide
commences as to each named insured upon execution of each covered
contract, continues until completion of the Developer Parcel Work of Improvement and includes at least a five-year discovery period after th
of each such policy period for submitting claims. Such policy shall provide
coverage against loss or liability arising out of willful, negligent or innocent
errors, omissions and misfeasance of the insured party in performing its
contractual and professional obligations relating to the design, engineerin
and construction of the Developer Parcel Work of Improvement or
subsequent alteration or work of improvement, as applicable, and sh
include such endorsements as reasonably required by Agency.
e end
g
all
14.3.2. Requirements Regarding Insurance. Each Insurance Policy
required (or th
14.3.2.1 Be in form and substance as is then standard in
California for p
14.3.2.2 Be issued by insurance carriers qualified and
licensed to eng d
st's
e particular Insurance Policies specified below) shall:
olicies of like coverage;
age in the insurance business in the State of California an
having a current Policyholder’s Management and Financial Size Category
Rating of not less than “A:X” (other than the Workers’ Compensation
Insurance, which shall be not less than “A:VII”) according to A. M. Be
Insurance Reports Key Rating Guide or if such rating system shall cease,
then of recognized financial responsibility reasonably approved by the
Agency in writing;
14.3.2.3 Provide coverage on an occurrence basis, except
for the errors a
14.3.2.4 Provide that the Insurance Policy cannot be
canceled, susp
14.3.2.5 With respect to the Insurance Policies described in
subsections
nd omissions Insurance Policies;
ended, lapsed or modified upon less than 30 days’ prior
written notice by registered or certified mail to Agency;
14.3.1.1 and 14.3.1.2 , (a) name Agency and the City as an
additional insured, as their interests appear, (b) provide that the coverage
thereof is primary and non-contributory coverage with respect to any
insurance maintained by an additional insured, (c) contain a Standard
Liability endorsement providing that the insurance (except for aggregate
policy limit) applies separately to each insured against whom a claim is
filed, and that the policy covers claims or suits by one insured against the
other, and (d) provide that the interests and protections of the additional
insureds shall not be affected by any misrepresentation, act or omission o
named insured or any breach by a named insured of any provision in the
policy which would otherwise result in forfeiture or reduction of coverage
Cross
f a
;
14.3.2.6 With respect to the Insurance Policies described in
subsections 14.3.1.1 , 14.3.1.2 and 14.3.1.4 of this Agreement, contain
either (a) a waiver by the insurer of the right of subrogation against Agency, the City, Developer, and its board members, commissioners, directors,
officers, partners, members, employees, agents and representatives or (b
statement that the insurance shall not be invalidated should any insured
waive in writing its right of recovery or right of subrogation prior to
occurrence of a loss covered by the Insurance Policy;
) a
14.3.2.7 With respect to the Insurance Policy described in
subsection 14.3.1.4 of this Agreement, contain the right to an assignment
of statutory lien for the benefit of and upon request of Agency.
14.4. Delivery of Insurance Policies. Prior commencement of construction of the
Develo rce of per Pa l Work of Improvement and not less than 30 days prior to the expiration date
each Insurance Policy required under Section 14.3.1. of this Agreement, Developer shall cause t
be delivered to the Agency: (a) a complete certified copy of each such Insurance Policy or renewal
or replacement Insurance Policy, provided, however, that delivery of a certificate of insurance
shall be sufficient for purposes of this clause (a); (b) satisfactory evidence of payment of the
premium therefor; and (c) a statement of noncancellation consistent with Section
o
14.3.2.4 of
Agreement. If Developer has not provided the Agency with the foregoing proof of coverage and
payment within ten (10) Business Days after receipt of written request therefor, Agency may, in
addition to any other available remedy, without obligation and without further inquiry as to
whether such insurance is actually in force, obtain such an Insurance Policy and Developer s
reimburse Agency for the cost thereof upon demand.
this
hall
14.5. Co-Insurer Liability. If on account of Developer’s failure to comply with the
provisi th
14.6. No Limit on Liability
ons of is Article 4, Agency is adjudged to be a co-insurer by an insurance carrier, then
any loss or damage it shall sustain by reason thereof shall be borne by Developer and Developer
shall immediately pay the same upon receipt of written demand therefor and evidence of such loss
or damage.
. Neither Agency nor Developer makes any representation
that the o
ed
,
he
15. GENERAL PROVISIONS
15.1. Notices, demands and communications
limits f liability specified for the Insurance Policies to be carried pursuant to this Article
X are adequate to protect Developer against its undertakings under this Agreement, or to protect
any general contractor, any architect, any engineer or other consultant against their respective
undertakings. In no event shall the limits of any coverage maintained or caused to be maintain
limit the liability of any person under this Agreement or limit the liability of any general
contractor, any architect, any engineer or other consultant under their respective contracts
warranties, guarantees and indemnities. The Agency shall not be limited to the amount of t
insurance premium not paid in the proof of any damages it may claim against any person arising
out of or by reason of failure of Developer, any general contractor, any architect, any engineer or
other consultant to provide and keep in force the Insurance Policies required by this Article 4; but
the Agency shall instead be entitled to recover the full amount of damages available.
. Formal notices, demands and
communications under this Agreement shall be given in writing by any commercially accepted m y as follows, or if any such office is relocated, to the new
address specified by the relocated party:
oulevard, 11 Floor
Los Angeles, CA 90025
dwin, Vice President of Development
Los Angeles, CA 90025
ice President of Development
WITH A COPY TO:
Los Angeles, CA 90025
partment
AND A COPY TO:
Floor
Los Angeles, CA 90025
nt
GENCY: nt Agency
9770 Culver Boulevard
Culver City, CA 90232
/o Kane, Ballmer & Berkman
Figueroa Street, Suite 1850
Los Angeles, CA 90071
ne, Esq., City Attorney
If mailed, the w nd shall be effective three (3)
business days after dep ail in the State of California or upon actual
receipt by the addresse r
eans to the principal offices of a part
DEVELOPER: Fox Hills Mall, LP
c/o Westfield LLC
11601 Wilshire B
th
Attention: John Goo
CMF Fox Hills Mall, LLC
c/o Westfield, LLC
11601 Wilshire Boulevard, 11
th
Floor
Attention: John Goodwin, V
Fox Hills Mall, LP
c/o Westfield, LLC
11601 Wilshire Boulevard, 11
th
Floor
Attention: Legal De
CMF Fox Hills Mall, LLC
c/o Westfield, LLC
11601 Wilshire Boulevard, 11
th
Attention: Legal Departme
A Culver City Redevelopme
c/o Culver City
Attn: Jerry Fulwood, City Manager
Copy to:
Agency Counsel
c
515 South
Attn: Murray Ka
ritten notice shall be deemed received a
osit in the United States m
e if ea lier. 15.2. Conflicts of Interest. The Developer warrants and represents, to the best of its
resent knowledge, that no public official of the Agency who has been involved in the making
his Agreement, or who is a member
p of
t of an Agency or City board or commission which has been
involved in the making of this Agreement, has or will receive a direct or indirect financial interest
in this A e
, that (1) no public official of the Agency who has participated in decision-making
concerning this Agreement or the Development or has used his or her official position to
influen
l
close
of
nt
greem nt or the Development in violation of the rules contained in California
Government Code Section 1090, et seq., pertaining to conflicts of interest in public contracting.
The Developer shall exercise due diligence to ensure that no such official will receive such an
interest.
The Developer further warrants and represents, to the best of its present knowledge and
excepting any written disclosures as to these matters already made by the Developer to the
Agency
ce decisions regarding this Agreement or the Development, has an economic interest in
the Developer or the Development, and (2) neither the Development nor this Agreement wil
have a direct or indirect financial effect on said official, the official’s spouse or dependent
children, or any of the official’s economic interests. The Developer agrees to promptly dis
to the Agency in writing any information it may receive concerning any such potential conflict
interest. The Developer’s attention is directed to the conflict of interest rules applicable to
governmental decision-making contained in the Political Reform Act (California Governme
Code Section 87100, et seq.) and its implementing regulations (California Code of Regulations,
Title 2, Section 18700, et seq.).
15.3. Nonliability. No member, official, employee, or agent of the Agency or the City
hall be personally liable to the Developer, or any successor in interest, in the event of any default
r breach by the Agency or for an
s
o y amount which may become due to the Developer or successor
under the terms of this Agreement.
15.4. Developer’s warranties. The Developer represents and warrants: (1) that it has
access to professional advice and support to the extent necessary to enable the Developer to fully
comply with the terms of this Agreement and otherwise carry out the Development; (2) that there
are no pending or threatened actions or proceedings before any court or administrative agency
which m
ay substantially affect the financial condition or operation of the Developer, other than
those already disclosed to the Agency; (3) that it is duly organized, validly existing and in good
standing under the laws of the state of its organization and the laws of the State of California; (4)
that the organizational documents it has submitted to the Agency concerning it or its partners or
members are true, correct, and complete as of the date of this Agreement; (5) that it has the full
power and authority to undertake the Development; and (6) that the persons executing and
delivering this Agreement are authorized to execute and deliver such document on behalf of the
Developer.
15.5. Litigation. The Developer shall promptly give notice in writing to the Agen
any litigation pending or threatened against the Developer, any of Developer’s partners or
members, or
cy of
the Developer’s parent entity in which the amount claimed is in excess of five
hundred thousand dollars ($500,000). 15.6. Waiver. Any waiver by a party of the any of the other party’s obligations in
Agreement must be in writing and exec
this
uted by an authorized agent of the party against whom the
waiver is sought to be enforced. No waiver will be implied from the delay or failure of a party to
take ac a tion on ny breach or event of default by the other party, or to pursue any remedy allowed
under this Agreement or applicable law. Any extension of time granted to a party by the other to
perform any obligation under this Agreement shall not operate as a waiver or release from any of
the relevant party’s obligations under this Agreement. Consent by a party shall not be construed
as consent to any other act or omission of the other party or to waive any requirement that a party
obtain the written consent of the other under this Agreement.
15.7. Inspection of Records. The Agency has the right at all reasonable times to inspect
the books, records and all other documentation of the Develop
er pertaining exclusively to its
obligations under this Agreement, but not material that is confidential or a trade secret; provided,
howeve A
gn
l
er
r, that gency shall have the right to inspect and copy all books and records pertaining to
Developer’s obligations hereunder, including without limitation verified construction costs, si
revenue, qualification of Agency Approved Tenants, square footage measurements. Agency shall
exercise its best efforts to maintain the confidentiality of all financial and other proprietary
information provided by Developer to Agency in connection with the Development. Agency shal
not use, or assist or allow any third party in using, any financial, proprietary or tenanting
information provided by Developer to Agency in connection with this Agreement in a mann
which adversely affects the Developer or the Development or the achievement of the
redevelopment purposes contemplated by this Agreement.
15.8. Governmental Approvals. Should the Developer require the approval
governmental body or board, the Developer shall bear the so
of any
le cost and responsibility for
obtaining the approval.
15.9. Real Estate Commissions. Neither party shall be responsible to the other f
real estate commissions o
or any
r brokerage fees which may arise from this Agreement or otherwise be
incurred by the other party.
15.10. Applicable Law. This Agreement shall be governed by the laws of the State of
California, except for those provisions preempted by federal law.
15.11. Severability. If any term, provisions, covenant or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void or une
nforceable, the remainder of the
provisions shall continue in full force and effect unless the rights and obligations of the parties
have be r en mate ially altered or abridged by such invalidation, voiding or unenforceability.
15.12. Time. Time is of the essence in the performance of this Agreement.
15.13. Binding Upon Successors; Covenants to Run With the Land. This Agreement
shall be ransferees,
successors-in-interests and assigns of each of the parties hereto, except that there shall be no
transfer i nt.
all
binding upon and inure to the benefit of the heirs, administrators, executors, t
of any nterest of any of the parties hereto except pursuant to the terms of this Agreeme
The term “Developer” as used in this Agreement shall include all such assigns, successors-in-
interest, and transferees. The parties intend that the covenants contained in this Agreement shconstitute covenants running with the land and shall bind the Developer Parcel and every perso
having an interest in the Developer Parcel during the term of this Agreement. The Developer
agrees for itself and for its successors that in the event that a court of competent jurisdiction
determines that the covenants herein do not run with the land, such covenants shall be enforce
equitable servitudes against the Developer Parcel.
15.14. Relationship of Parties
n
d as
. The relationship of the Developer and the Agency for this
Development shall not be construed as a joint venture, equity venture, or partnership. The Agency
neither k
e for all aspects of its conduct in connection with
construction of the Development, including, but not limited to, the quality and suitability of the
plans a
e
s
underta es nor assumes any responsibility or duty to the Developer (except as provided for
herein) or any third party with respect to the Development or the Developer Parcel. Except as the
Agency may specify in writing, the Developer shall have no authority to act as an agent of the
Agency or to bind the Agency to any obligation.
The Developer shall be solely responsibl
nd specifications, the supervision of construction work, and the qualifications, financial
conditions, and performance of all architects, engineers, contractors, subcontractors, suppliers,
consultants, and property managers. The Agency is under no duty to review the construction
plans or to inspect construction of the Development. Any review or inspection undertaken by th
Agency for the Development is solely for the purpose of determining whether the Developer i
properly discharging its contractual obligations to the Agency, and should not be relied upon by
the Developer or by any third parties as a warranty or representation by the Agency as to the
quality of the design or construction of the Development.
15.15. Reasonable Approvals. Except as otherwise expressly provided herein, the
approval of a party of any documentation, approvals, consents or submissions herein called for
shall not be unreasonably withheld, delayed or conditioned.
15.16. Agency Approvals. Whenever a reference is made herein to an action or approval
to be undertaken by the Agency, the Agency Executive Director or his or her designee is
authori c zed to a t on behalf of the Agency, unless specifically provided otherwise.
15.17. Execution of Other Documentation. The Agency and the Developer agree to
execute any further documentation that may be reasonably necessary to carry out the intent and
obligat e
. Amendments
ions und r this Agreement, provided said documentation does not conflict with this
Agreement.
15.18 . Any amendment to this Agreement must be in writing, must be
approved by the Agency Board and must be executed by both the Agency and the Developer.
15.19. Estoppel certificates. Either party to this Agreement shall provide an estoppel
certificate to the other as requested from time to time stating that this Agreement has not been
modifie
ay
d, or, if modified, stating the nature of such modification, and certifying that this
Agreement, as modified, is in full force and effect, certifying that there are no known defaults
hereunder (or identifying the same), and certifying such other matters as the other party m
reasonably request within thirty (30) days after the other party’s written request therefor. 15.20. Integration. This Agreement constitutes the entire understanding and agreem
of the parties with respect to the transaction contemplated by this Agreement.
ent
15.21. Execution and Counterparts. This Agreement is executed in three duplicate
originals, each of which is deemed to be an original. This Agreement may be signed in multiple
counterparts, which, when signed by all parties, shall constitute a binding agreement.
15.22. Exhibits. The following Exhibits are attached to this Agreement and are hereby
incorporated into this Agreement by reference:
Schedule I: Approved Entities
Schedule II: Agency Approved Tenants
Exhibit A: Legal Description of Developer Parcel
ance
nd Schematic Design Plans
al Property
ction Covenants
hreshold
Sharing Obligation
SIG
Exhibit B: Schedule of Perform
Exhibit C: Scope of Development
Exhibit D: Insurance requirements
Exhibit E: Promissory Note
Exhibit F: Construction Drawings a
Exhibit G: Agreement Affecting Re
Exhibit H: Release of Constru
Exhibit I: New Target Space
Exhibit J: Agency Approved Square Footage T
Exhibit K: Signs Subject to New Sign Revenue
[ NATURE BLOCKS ON NEXT PAGE] IN WITNESS WHEREOF, the undersigned parties have executed this Disposition and
Development Agreement effective as of the date first above written.
“AGENCY”
THE CULVER CITY REDEVELOPMENT AGENCY,
a community redevelopment agency organized and existing under the California
Community Redevelopment Law
By: _____________________________________
Approved as to form and legality:
Kane, Ballmer & Berkman
Agency General Counsel
By: _____________________________________
Murray O. Kane
“DEVELOPER”
FOX HILLS MALL, LP,
a Delaware limited partnership
By: Fox Hills GP LLC,
a Delaware limited liability company
Its: General Partner
By: Westfield America Limited Partnership,
a Delaware limited partnership
Its: Sole Member
By: Westfield U.S. Holdings, LLC,
a Delaware limited liability company
Its: General Partner
By: _____________________________
Name: ___________________________
Its: ______________________________
CMF FOX HILLS, LLC,
a Delaware limited liability company
By: CMF, Inc.,
a Delaware corporation
Its: Sole Member
By: _____________________________
Name: ___________________________
Its: ______________________________
Schedule I
Approved Entities
The Approved Entities shall include the following entities, and all of their affiliates and
subsidiaries:
Fox Hills GP LLC
Westfield America Limited Partnership
Westfield U.S. Holdings, LLC
Schedule II
Pre-Approved Tenants
Schedule II
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit A
Legal Description of Developer Parcel
(attached)
Exhibit A-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit B
Schedule of Performance
Exhibit B-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit C
Description of Developer Work of Improvement
Exhibit C-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit D
Insurance Requirements
I. Insurance requirements during construction
The Developer shall ensure that the general contractor for the Development obtains the following
insurance coverage, and maintain such coverage in full force and effect during Development
construction. Before issuance of a notice to proceed with the Development, the Developer shall
deliver to the Agency certificate(s) of insurance, or a binder followed within 30 days by a
certificate of insurance, evidencing the required coverage.
• COMPREHENSIVE GENERAL LIABILITY AND VEHICLE INSURANCE.
• Minimum coverage: Bodily injury limits of $5,000,000 for each occurrence; property
damage limits of $5,000,000 for each occurrence.
• Policies shall include, at a minimum, but need not be limited to, coverages for bodily
injury, property damage, personal injury, broad form property damage, premises and
operations, severability of interest, products and completed operations, contractual
liability, independent contractors and XCU.
• BROAD FORM PROPERTY DAMAGE (BUILDERS RISK INSURANCE).
• Minimum coverage: 100% of replacement cost.
• Deductible: $25,000 maximum deductible per occurrence.
• Property covered: Structure and all insurable items within the Property (including
landscaping and common areas).
• Perils covered: All risk, or fire and hazardous installation, vandalism and malicious
mischief.
• Builders’ risk installation floater for coverage of the contractor’s labor, materials and
equipment to be used for completion of work performed under the construction
contract.
• WORKERS’ COMPENSATION.
• Workers’ Compensation as required by the California Labor Code for all persons
employed in connection with this Development.
• Employer’s Liability insurance with a limit of no less than $1,000,000 combined
single limit per occurrence.
• AUTOMOBILE INSURANCE (if not part of CGL).
• Minimum coverage: Bodily injury limits of $1,000,000 for each person and
$1,000,000 for each accident or occurrence; property damage liability limits of
$500,000 for each accident or occurrence
II. Property insurance
The Developer shall obtain property insurance including all risk coverage or standard fire and
extended coverage insurance, with vandalism and malicious mischief endorsements to the extent
of the full replacement value of the Developer Parcel (which may exclude existing improvements
Exhibit D-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
which are to be demolished) for the duration of the term of this Agreement. Coverage amount
may be adjusted for fluctuation in replacement values.
III. Insurance requirements for professional services providers
The Developer shall ensure that any architect, design professional, engineer, consultant, and any
other professional services provider that the Developer contracts with to perform work on the
Development carries professional liability insurance for errors and omissions with a limit of no
less than $1,000,000. The Agency may in its discretion waive this requirement on a case-by-case
basis. Before any such professional begins work on the Development, the Developer shall
deliver to the Agency certificate(s) of insurance, or a binder followed within 30 days by a
certificate of insurance, evidencing the required coverage.
IV. General requirements
The aforementioned insurance shall be endorsed and have all the following conditions:
• Additional Insured: The Developer shall ensure that the Culver City
Redevelopment Agency, Culver City, their respective Councilmembers, directors,
officers, agents and employees are named as additional insureds in its comprehensive
commercial general liability, professional liability, and automobile liability policies.
If the Developer submits the ACORD Insurance Certificate, the additional insured
endorsement must be set forth on a CG20 10 11 85 form (or more recent) and/or CA
20 48 - Designated Insured Form (for business auto insurance). A STATEMENT OF
ADDITIONAL INSURED ENDORSEMENT ON THE ACORD INSURANCE
CERTIFICATE FORM IS INSUFFICIENT AND WILL BE REJECTED AS PROOF
OF THE ADDITIONAL INSURED REQUIREMENT;
• Loss Payee: The Developer shall ensure that the Culver City Redevelopment
Agency, Culver City, their respective Councilmembers, directors, officers, agents and
employees are named as Loss Payee in the builders’ risk insurance and property
insurance. The Developer shall provide appropriate Loss Payee endorsement as proof
of meeting this requirement.
• Cancellation Notice: 30-day prior written notice of cancellation, termination or
material change in coverage.
• Certificate holder is to be the same person and address as indicated in the “Notices”
section of this Agreement.
• Insurer shall carry a Best Rating of B+ or greater.
In the case of the breach of any of the insurance provisions of this Agreement, the Agency may,
at the Agency’s option, take out and maintain at the expense of the Developer such insurance in
the name of Developer as is required pursuant to this Agreement.
All endorsements, certificates, forms, coverage and limits of liability referred to herein shall have
the meaning given such terms by the Insurance Services Office (ISO) as of the date of this
Agreement.
Exhibit D-2
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
The Developer or its general contractor shall include all subcontractors as insureds under its
policies or shall maintain separate certificates and endorsements for each subcontractor. All
coverages for subcontractors shall be subject to all the requirements stated herein. The Agency
reserves the right to perform an insurance audit during the course of the Development to verify
compliance with requirements.
Any deductible or self-insured retentions greater than $50,000 must be declared to and approved
by the Agency. At the option of the Agency, either the insurer shall reduce or eliminate such
deductible or self-insured retentions as respects the Agency, the City and their respective
Councilmembers, directors, officers, agents, employees and volunteers; or the Developer shall
provide a financial guarantee satisfactory to the Agency guaranteeing payment of losses and
related investigations, claim administration and defense expenses.
Exhibit D-3
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit E
Form of Promissory Note
FOX HILLS MALL PROMISSORY NOTE
$10,000,000 Net Present Value Culver City, California
___________, 20__
FOR VALUE RECEIVED, CULVER CITY REDEVELOPMENT AGENCY, a
community redevelopment agency organized and existing under the California Community
Redevelopment Law (the “Agency”), effective as of the effective date of this Note as hereinafter
defined (the “Effective Date”) hereby promises to pay to FOX HILLS MALL, LP, a Delaware
limited partnership and CMF FOX HILLS, LLC, a Delaware limited liability company
(collectively, the “Developer”) at their offices located at: c/o Westfield, LLC, 11601 Wilshire
Boulevard, 11th Floor, Los Angeles, CA 90025, or at such other place as holder hereof may from
time to time designate in writing, or registered assigns, in legal tender of the United States of
America, a principal sum equal to the amount of TEN MILLION DOLLARS and 00/100
DOLLARS ($10,000,000) measured as of the date of this Note based upon a discount rate of six
percent and as more particularly described in the Westfield Fox Hills Owner Participation
Agreement (the “OPA”) dated as of the date of this Note (the “Loan”). Except as otherwise
provided herein, the capitalized terms herein used herein shall have the meanings prescribed for
those terms in the OPA.
This Note shall become effective only upon the occurrence, if at all, of the Effective
Date. For purposes of this Note, the “Effective Date” shall mean the date on which all of the
Developer Parcel Conditions Precedent have been satisfied in accordance with Article 5 of the
OPA
All payments hereunder shall be payable on the Annual Disbursement Dates commencing
on the first October 1
st
following Agency’s issuance of the Release of Construction Covenants
for the Developer Parcel Work of Improvement, and every October 1
st
thereafter until the
Agency Assistance Termination Date, subject to and in accordance with the terms and conditions
of the OPA.
All payments of by the Agency under this Note shall be from the total ad valorem
property tax increment revenue received by the Agency and allocable to a fiscal year pursuant to
Section 33670(b) of the Redevelopment Law, as said statute may be amended from time to time,
to the extent attributable to an increase in the assessed value of the Developer Parcel over and
above the assessed value established by the Los Angeles County Tax Assessor in the equalized
assessment roll for the 2006-07 year, but specifically excluding therefrom all of the following:
(a) the portion of such tax increment revenues that is required to be set aside pursuant to Sections
33334.2 et seq. of the Redevelopment Law or any successor law for low-and moderate-income
Exhibit D-4
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
LIBD/2014084.7
LIBD/2014084.9 DP9 121963.170627
housing purposes (currently 20%); (b) the portion of such tax increment revenues that the
Agency is required to pay to any other governmental entities pursuant to any statutorily required
pass through payments and County administrative fees, as said statutory requirement may be
amended from time to time; and (c) the portion of such tax increment revenues which the
Agency may hereafter be required by the State to pay or set aside for specified funding purpose
from time to time, including, for example, and without limiting the generality of the foregoing,
any payments which the Agency may be required to pay to the Education Revenue
Augmentation Fund pursuant to Section 33681 et seq. of the Redevelopment Law (“Net
Developer Parcel Tax Increment”). The deductions from Net Developer Parcel Tax Increment
shall be limited to only those payments that are mandatory requirements on the Agency and
which the Agency has no discretion to avoid, or which can only be avoided by exercise of
discretion in a way that would result in a material financial adverse impact to the Agency.
Agency covenants that it shall not take any discretionary action that would cause a reduction or
loss in the Net Developer Parcel Tax Increment available for payment of Agency Assistance
during the term of this Agreement.
This Note shall be payable solely from Net Developer Parcel Tax Increment and from no
other revenue or property of the Agency, it being understood that this instrument is a special
limited obligation of the Agency and is payable solely from Net Developer Parcel Tax Increment
and only to the extent required to be paid pursuant to the OPA.
This Note may be prepaid, in whole or in part, at any time, without prepayment charge or
penalty.
Reference is made to the OPA for a description of the covenants and agreements made by
the Agency and Developer with respect to payment of Net Developer Parcel Tax Increment to
pay this Note, the nature and extent of the security for this Note, the rights, duties and obligations
of the Agency with respect hereto and, the rights of the Developer hereof.
Any provision contained herein or in any other agreement or document delivered in
connection with or otherwise relating to the loan evidenced by this Note to the contrary
notwithstanding, it is agreed that, upon the occurrence and continuance of any default, Developer
shall neither seek nor take any deficiency or monetary judgment against the Agency, and
Developer’s only recourse is against the Net Developer Parcel Tax Increment funds.
This Note shall be construed and enforced in accordance with the laws of the State of
California and Agency consents to personal jurisdiction of the appropriate state or federal court
located in Los Angeles County, California.
The Agency’s obligations hereunder are not, and shall not, be construed as a pledge of
tax increment pursuant to Redevelopment Law Section 33671. Agency’s obligations hereunder
shall be subordinate to any existing bonds which Agency has issued which are secured by tax
increment Agency receives from the Redevelopment Project and the refunding or refinancing
thereof and any future bonds Agency may issue and the bonded indebtedness incurred in
connection therewith; provided, however, that with respect to any future bonds, refunding of
existing bonds (to the extent the principal amount and/or interest rate of the refunding bonds
exceeds the then outstanding principal balance or then current interest rate of the refunded
LIBD/2014084.7
LIBD/2014084.9 DP9 121963.170627
bonds), refunding of future bonds, or other indebtedness described herein, Agency shall notify
Developer not less than thirty (30) days prior to issuance and, concurrent therewith, provide to
Developer the fiscal consultant report described below demonstrating that, at the time of
issuance, any such issuance and indebtedness will not adversely affect Agency’s ability to
perform its current and prospective obligations under this Agreement. In connection with any
financing for which notice to Developer is required pursuant to the foregoing provision, Agency
shall appoint a consultant or firm of such consultants generally recognized in the bond financing
marketplace to be well qualified in the field of public finance consulting relating to tax increment
financing, bond transactions, and the Community Redevelopment Law who is not a present or
past consultant of the Agency and will not be involved in the proposed debt issuance in order to
determine whether, in good faith, it can be demonstrated that, at the time of issuance, any such
issuance and indebtedness will not adversely affect Agency’s ability to perform its current and
prospective obligations under this Agreement. Following its selection, the financial consultant
shall prepare a report that reasonably demonstrates to Developer whether, following issuance of
the proposed debt, sufficient debt service coverage will remain to pay debt service on all
obligations currently outstanding and the obligations to Developer under this Agreement as well
as the proposed issuance, assuming reasonable and customary debt coverage ratios. Unless it is
demonstrated that there will be no adverse impact to Agency’s ability to perform its obligations
hereunder, such proposed financing shall not proceed. Agency shall consult with Developer as
to the qualifications and selection of such consultant or firm of consultants and shall reasonably
consider Developer’s recommendations with respect to such selection. When required by this
section, such report shall be delivered by Agency to Developer concurrently with the above-
referenced 30-day notice of intended issuance of debt. The Agency’s obligations under this Note
shall terminate on the Agency Assistance Termination Date. Bonded indebtedness includes any
indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures,
certificates of participation or other obligations issued by the Agency. Nothing herein is
intended to, nor shall it, limit the amount of tax increment the Agency currently receives for the
Redevelopment Project or otherwise.
Upon the Agency Assistance Termination Date, any amounts then outstanding under this
Note shall be forgiven.
CULVER CITY REDEVELOPMENT AGENCY,
a community redevelopment agency organized
and existing under the California Community Redevelopment Law
______________________________
______________________________
Exhibit F-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit F
Construction Drawings
Civil Sanitary Force Main set dated 11/22/06
Submitted 11/22/06
File number E07-0162
Civil On-Site set dated 12/11/06
Submitted 12/11/06
File number E07-0160
Civil Off-Site set dated 12/21/06
Submitted 12/21/06
File number E07-0159
Civil LSWPPP set dated 04/13/07, Civil SUSMP set dated 08/09/07 – “NPDES Permit”
Submitted 04/13/07 and 08/09/07, respectively
File number E07-0074
10/07 Design Plans [add specific description] ____________________________________
Bid and Permit set through Addendum 1 dated 03/28/07 - Architecture, Landscape, Structural -
“Building”
Submitted 04/02/07
Permit application number 69462
Bid and Permit set through Addendum 1 dated 03/28/07 - Electrical
Submitted 04/02/07
Permit application number 69463
Bid and Permit set through Addendum 1 dated 03/28/07 - Mechanical
Submitted 04/02/07
Permit application number 69464
Bid and Permit set through Addendum 1 dated 03/28/07 - Plumbing
Submitted 04/02/07
Permit application number 69465
Exhibit G-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit G
Agreement Affecting Real Property
Exhibit H-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit H
Release of Construction Covenants Exhibit I-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit I
New Target Space
Exhibit J-1
V:\COMMDEV\AGENCY STAFF REPORTS\2007 Agenda Draft\December 17\ATT 2007_12_17 Westfield OPA .doc
Exhibit J
Agency Approved Square Footage Threshold
Total Square Footage of
Agency Approved
Tenants Within Mall
Minimum Portion of
Square Footage Threshold
Located in Existing Mall
% New Tenants from
Agency Approved
Tenant List
Year 1 90,000 20,000 75%
Year 2 115,000 25,000 85%
Year 3 and
subsequent
years
140,000 30,000 90%
LIBD/2014084.9 DP9 121963.170627
Exhibit K
Signs Subject to New Sign Revenue Sharing Obligation
City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 1 of 6
RECOMMENDATION:
That the Culver City Redevelopment Agency (the “Agency”) consider adoption of an
Owner Participation Agreement (“OPA”) with Westfield, Inc. (“Westfield”) for the
Westfield Mall Culver City.
BACKGROUND:
In November 2005, the Westfield obtained Planning Commission approval to
construct a project that consisted of modifying the existing 1.05 million square foot
mall (the “Mall”) by demolishing some 180,000 square feet of existing space and
replacing it with some 446,000 square feet of new space in a multi-level
configuration with rooftop parking. The new Mall would have approximately 1.3
million square feet of retail space upon completion, would be supported by 4,233
parking spaces, and would implement an array of on-site and off-site access and
circulation improvements.
This expansion and remodeling program was subject to environmental review
pursuant to the California Environmental Quality Act via the preparation of a
Mitigated Negative Declaration (“MND”) by the City in August 2005 and as revised in
September and November 2005. This document was duly circulated for public
review and adopted by the City Planning Commission with the conclusion that the
Project would not result in significant adverse environmental impacts in November
2005.
Meeting Date: 12/17/07 Item Number: A-4
AGENDA ITEM: Consideration of an Owner Participation Agreement with
Westfield, Inc. for the Westfield Mall Culver City.
Contact Person/Dept.: Sol Blumenfeld
and Todd Tipton/ CDD
Phone Number: (310) 253-5760
Fiscal Impact: Yes [] No [] General Fund: Yes [] No []
Public Hearing: [] Consent Item: [] Action Item: [] Attachments: []
Public Notification: Master Notification List; Fox Hills Homeowner Association on
December 14, 2007; Chamber of Commerce on December 14, 2007.
Department Approval:
Sol Blumenfeld 12/13/07
Executive Director Approval:
Jerry Fulwood 12/13/07
Chief Financial Officer:
Jeff Muir 12/13/07
City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 2 of 6
In the successive two years, the Mall’s scale, massing and mix of uses has
remained in substantial conformance with that approved by the Planning
Commission in November 2005.
DISCUSSION:
Westfield has requested that the Agency assist with financing in order to implement
the high-quality project they propose. Westfield has requested that they receive all
of the net new tax increment generated by their project until 2024, the expiration of
time limit to receive tax increment for Component Area One. An OPA is necessary
to memorialize the terms requirements of the Agency’s participation.
If the Agency authorizes execution of an OPA with Westfield, staff believes the
following items to be of importance:
A. Tenant threshold requirements;
B. Proportional assistance and accrual of the Agency’s assistance;
C. Conditions to be satisfied prior to the release of initial Agency assistance;
D. Conditions to be satisfied prior to the release of ongoing Agency assistance;
E. Agency participation in sign revenues;
F. Agency participation in net sale or refinance proceeds;
G. Duration of Agency restrictions and covenants; and
H. Waiver of property tax assessment.
A. Tenant threshold requirements
When the Mall renovation is complete, Westfield will seek tenants to occupy the new
floor area. The quality of the tenants is imperative to the Mall’s long-term success.
To that end staff and its consultants have establish the threshold square footage
requirements described in Table 1 below and the attached preferred tenant list (the
“List”). The List is comprised of quality, national tenants from a variety of categories
that include housewares and home; men’s, women’s and children’s fashion and
accessories; books, cards and gifts; health and beauty; and restaurants.
In order to receive Agency assistance, Westfield must either satisfy the threshold
requirements in Option 1 or provide tenants from the List in accordance with the
percentages in Option 2. This requirement will be applied to the initial and ongoing
Agency assistance.
It is noted for the Agency’s information that Westfield will be allowed to utilize up to
36,000 square feet of new restaurants in order to satisfying Option 1 in Table 1
below if they so choose. This option (including restaurant tenants) would be City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 3 of 6
available to Westfield during Year 1 only and is intended to ensure a diverse mix of
tenants.
Option 1 Option 2
Table 1 Total Sq. ft. of
Tenant Threshold
in Mall Expansion
Minimum Sq. ft. of
Tenant Threshold
in Existing Mall
% New
Tenants from
the List
Year 1 90,000 20,000 75%
Year 2 115,000 25,000 85%
Year 3 140,000 30,000 90%
B. Proportional assistance and accrual of the Agency’s assistance
Staff believes it important to reward Westfield’s performance if it satisfies the
threshold requirements in Table 1. In the same regard, if Westfield fails to satisfy
the threshold requirements, actions must occur that encourage them to perform.
To encourage performance staff recommends withholding a portion of the Agency’s
assistance in an amount equivalent to the threshold Westfield failed to satisfy less a
10 percent grace factor. The withholding would be deposited in an interest bearing
accrual account and paid to Westfield once the thresholds are achieved. Westfield
would have up to three years to satisfy the threshold requirements. If they fail to do
so within the time period, the assistance would return to the Agency.
In addition to withholding the assistance, staff also recommends that there be a 10%
penalty for poor performance. The penalty would be applied to the funds Westfield
would be eligible to receive after the withholding was deducted. The formula would
commence when the Agency’s assistance began and renew every three years
thereafter throughout the term of the agreement (until 2024).
For example, if in Year 2 the threshold is 85 percent and Westfield only secures 73
percent of the tenants from the List then 12 percent of the Agency’s assistance will
be deducted and deposited in an interest bearing account to accrue. If Westfield
satisfies the threshold for Year 3 then the accrual plus interest will be provided, less
the 10% penalty for the prior year. Thus at Year 2 with a $1 million annual per year
of tax increment payment to Westfield, the amount would be:
$1,000,000 x .12 (amount Westfield deficient) = $120,000 amount withheld and
deposited in an interest bearing account.
$1,000,000 - $120,000 = $880,000 amount of Agency assistance prior to penalty. City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 4 of 6
The penalty is calculated as follows:
$880,000 x .10 percent penalty = $88,000 amount returned to the Agency.
$880,000 - $88,000 = $792,000 amount available to Westfield less penalty.
C. Conditions to be satisfied prior to the release of initial Agency assistance
Prior to payment of the initial disbursement, staff believes Westfield must:
1. Provide documentation that identifies the amount of funds to be expended
to improve to the Mall. Staff believes this important because the total
expenditure is related to the resulting scope and quality of the
improvements. Westfield indicates that the expenditure is anticipated to be
approximately $125 million.
2. Execute the Agreement Affecting Real Property, which assures that
Agency’s ongoing restrictions and requirements related to maintenance,
land use, development obligations, use of Agency Approved Tenants,
prohibited uses, property tax payments and appeals, prohibitions on
assignment and encumbrances and return of Agency Assistance, and
payment of Agency participation in sign revenues will be memorialized. The
Agreement Affecting Real Property will not be subordinate to the property’s
financing.
3. Comply with the thresholds established in Table 1 above.
4. Facilitate discussions with Target in order to ascertain the status of the
existing Target store on Jefferson Boulevard.
5. There must not be an event that could become a default pursuant to the
agreement. Staff believes this important because the Agency assistance
will be delivered over time once Westfield meets conditions precedent, and
so long as they meet ongoing conditions. If a default were identified after
disbursement of the assistance, there may not be sufficient motivation for
Westfield to expeditiously resolve the default.
D. Conditions to be satisfied prior to the release of ongoing Agency assistance
Prior to payment of the ongoing disbursements, staff believes Westfield must:
1. Be in compliance with the preferred tenant threshold and Agreement
Affecting Real Property.
2. Not have transferred the property to a non-Westfield affiliate. If Westfield
were to sell the Mall to a non-Westfield affiliate that was not acceptable to
the Agency, Westfield will return all Agency assistance provided. City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 5 of 6
3. Not have closed more than 10 percent of the Mall permanently. Westfield
will be able to occasionally close portions of the Mall in order to facilitate
retenanting. If Westfield should close more than 10 percent of the Mall,
then Agency assistance will be suspended and accrued until the Mall is
again more than 90 percent occupied.
4. Be in compliance with the Agency approved Master Plan and the Schedule
of Performance for the Westfield parcel.
E. Agency participation in sign revenues
Should the Agency authorize execution of this agreement and the Design for
Development (“DFD”) related to Westfield’s proposed Master Sign Program (“MSP”),
staff believes it important that the Agency receive a portion of the gross revenues
generated in the form of a $500,000 guaranteed annual payment and 50 percent of
any gross proceeds in excess of $2.2 million. The Agency will be entitled to gross
revenues as long as the signs are in existence. Please see the Agenda Item Report
related to the DFD for additional information.
It is noted for the Agency’s information that staff explained to Westfield the Agency’s
request to see the Mall’s design improved if additional signs were proposed. To
date, Westfield has not responded to this request.
F. Agency participation in net sale or refinance proceeds
If Westfield was to refinance or sell the Mall to an approved affiliate and they
experienced a windfall, staff believes the Agency should participate due to its $10
million in assistance. If Westfield was to sell the Mall to a non-approved Westfield
affiliate, staff believes the Agency should receive all of the assistance it provided up
to the time of the sale.
G. Duration of Agency restrictions and covenants
The conditions identified in the Agreement Affecting Real Property will remain in
effect until 2037 (30 years) in order to justify the Agency’s assistance.
H. Waiver of property tax assessment
Agency legal counsel has developed language that would limit Westfield’s ability to
seek a reduction in assessed value below that initially established following
completion of the Mall’s expansion.
City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 6 of 6
FISCAL ANALYSIS:
It is estimated that Westfield’s improvements to the Mall will generate approximately
$1 million annually in net new tax increment. Pursuant to the proposed Owner
Participation Agreement, this amount would be returned to the Westfield until 2024.
It is estimated that Westfield’s improvements to the Mall will generate approximately
$1.3 annually in sales tax.
ATTACHMENTS:
1. Draft Owner Participation Agreement with Westfield
2. Preferred Tenant List.
MOTION:
That the Culver City Redevelopment Agency:
1. Adopt an Owner Participation Agreement with Westfield, Inc. for the Westfield
Mall Culver City.