City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 1 of 3
RECOMMENDATION:
Staff recommends the Culver City Redevelopment Agency Board (Agency Board)
approve the First Amendment to the 2008 Owner Participation Agreement (OPA)
between the Culver City Redevelopment Agency and Westfield Corporation.
BACKGROUND:
In 2008, the Redevelopment Agency entered into an OPA with Westfield Corporation
which provides for $168 million of mall improvements in consideration for Agency
reimbursement of net new tax increment generated from the project over ten years
from the date of project completion.
1
Westfield Corporation has requested that the Agency Board consider an amendment
to the 2008 Westfield OPA in order to finalize the project and commence receiving tax
increment reimbursements. A Temporary Certificate of Occupancy (C of O) was
issued for the project in 2009 allowing the mall to operate pending completion of non-
life safety related items.
A substantial renovation and expansion of the mall has been completed, consistent
with the plans reviewed and approved by the Agency Board and presented to the
community. The renovation and expansion was valued at $168 million dollars and
included a 167,000 sq. ft. expansion, new restaurants, new major tenants, re-
tenanting of the mall, outdoor dining along the west and north mall frontage, new
interior food court, new common areas, entirely new building finishes, landscape and
hardscape, and parking structure and surface parking improvements. Thus Westfield
Meeting Date: 2/28/11 Item Number: A-3
REDEVELOPMENT AGENCY BOARD AGENDA ITEM: Consideration of the First
Amendment to the 2008 Owner Participation Agreement with Westfield Corporation.
Contact Person/Dept.:
Sol Blumenfeld / Community Development
Phone Number:
(310) 253-5700
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas – Redevelopment Agency (2/24/11);
(E-Mail) The Westfield Corporation (2/24/11); (E-Mail) The Downtown Business
Association (2/24/11);
Department Approval:
Sol Blumenfeld: (02/24/11)
Agency General Counsel Approval:
Murray Kane: (02/24/11)
Chief Financial Officer Approval:
Jeff Muir (by N. Kimball): (02/24/11)
Executive Director Approval:
John Nachbar: (02/24/11) City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 2 of 3
Culver City has met the Agency Board and community expectations and produced a
first rate regional shopping mall that provides a regional retail and entertainment draw
to the area. The redeveloped project has successfully operated since October 2009
and has performed well as outlined on the attached table summarizing annual gross
receipts. (Please see Attachment No. 2)
Final completion of the mall requires the following items which can be addressed
through a letter of credit covering the cost of the improvements in the event they
require additional time for completion.
§ Modification of existing pedestrian stairway along Hannum Avenue ;
§ Covenant Joining Project site Parcels; and,
§ Implementation of an employee Congestion Management Plan Transportation
Demand Program (TDM).
DISCUSSION:
The purpose of the First Amendment is to clarify certain provisions for the
calculation of and the procedures for payments by the Agency to the Developer
under the OPA, including clarifying the Developer’s conditions precedent to
disbursement and establishing more specific provisions for the timing and other
procedures for such disbursements. Under the First Amendment, the Agency is
not increasing the amount of future annual payments to Developer nor, in any
event, is the total amount payable to the Developer under the OPA increasing.
Further, by entering into the First Amendment and thereby amending the OPA, the
Agency is not waiving any rights or remedies with respect to pending appeals filed
by Developer for certain tax assessments which appeals are prohibited.
The Agency Board is requested by Westfield Corporation to consider the following:
§ Whether the OPA should be amended to allow more latitude on
reimbursement from the date of opening (temporary C of O) October 2009
rather than C of O which has yet to be issued. Advancing the funding will
not resulting in a net increase in the amount pledged to Westfield, but
rather an earlier payment than originally identified in the OPA.
§ Whether the OPA payment schedule should be modified to allow a 50%
partial reimbursement of net new tax increment at mid-year and the balance
paid at the end of the tax year. Finance believes that this would not
adversely affect the Agency’s cash flow. Based upon the earlier
commencement date and this payment formula, the amount due Westfield
is $882,000.|1010|
§ Whether to support Westfield’s assessment appeal. Agency Counsel and
KMA believe that the affect on the Agency’s tax increment would be
minimal.
City of Culver City, California
Redevelopment Agency Agenda Item Report
Page 3 of 3
FISCAL ANALYSIS:
Acceleration of the tax increment reimbursement does not result in a higher
reimbursement to Westfield Corporation beyond that pledged in the original OPA,
but it does require an earlier start date for reimbursement. If the OPA is amended
the proposed formula for reimbursement would continue for nine years pursuant to
the reimbursement schedule in the OPA. The mall has produced sale and property
tax benefits that will inure to the City for many years beyond the reimbursement
period. Additionally the presence of a high quality mall provides economic synergy
with the Fox Hills Business Park and surrounding hotels which has a positive
economic value. Sufficient funds have been appropriated in the FY 2010-11
budget (55092400) to cover the proposed reimbursement of net new tax
increment.
ATTACHMENTS:
1. First Amendment to the 2008 Owner Participation Agreement between the
Redevelopment Agency and Westfield Corporation.
2. Summary of Gross Receipts
3. Summary of Letter of Credit Requirements
MOTIONS:
That the Agency Board:
1) Approve the First Amendment to the 2008 Westfield Owner Participation
Agreement; and,
2) Authorize the Executive Director or designee to execute the document on
behalf of the Agency.
NOTES:
1. Date of completion is defined as receipt of a Certificate of Occupancy and filing of a Notice
of Completion.
2. The calculation is as follows: $1.008 million/year for the estimated 50% payment for tax
increment for the period October 2009 through June 2011 with estimated tax increment
from new commencement date at issuance of temporary C of O (October 2009) rather
than C of O.
MEETING DATE: 02.28.10
AGENDA ITEM: REDEVELOPMENT AGENCY BOARD AGENDA ITEM:
Consideration of the First Amendment to the 2008
Owner Participation Agreement with Westfield
Corporation.
ATTACHMENTS
Pages
1. First Amendment to the 2008 Owner Participation
Agreement between the Redevelopment Agency and Westfield
Corporation 1- 16
2. Summary of Gross Receipts 17
3. Summary of Letter of Credit Requirements 18
First Amendment
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FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT
(Westfield Culver City Mall Project)
This FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT (Westfield
Culver City Mall Project) (herein “First Amendment”) is made and entered into as of
February ___, 2011, by and between the CULVER CITY REDEVELOPMENT AGENCY, a
community redevelopment agency organized and existing under the California Community
Redevelopment Law (the “Agency”), 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”).
R E C I T A L S
A. The Agency and the Developer entered into that certain Owner Participation
Agreement dated April 14, 2008 (the “OPA”) with respect to the redevelopment and expansion
of the retail shopping center currently known as the Westfield Culver City Mall ("Mall"). All
defined terms used herein and not otherwise defined herein shall have the meaning prescribed in
the OPA.
B. Pursuant to the OPA, the parties contemplated the redevelopment of the
Developer Parcel with the improvements defined and described in the OPA as the Developer
Parcel Work of Improvement.
C. The Developer Parcel Work of Improvement is now complete and the Developer
and the Agency wish to enter into this Agreement to (i) set forth certain remaining agreed actions
to be taken with respect to the Developer Parcel Work of Improvement, (ii) clarify, simplify and
streamline the procedures for documentation and disbursement of the Annual Disbursement
Payments by the Agency to Developer, and (iii) modify the timing for delivery of such Annual
Disbursement Payments, subject to annual reconciliation.
D. Agency is also concurrently pursuing a bond financing and is requesting certain
confirmations and waivers from Developer under the OPA with respect thereto, and Agency also
wishes to provide to Developer an estoppel with respect to the OPA and confirmation regarding
satisfaction of conditions precedent to Developer’s entitlement to Annual Disbursement
Payments payable under the OPA.
NOW, THEREFORE, based upon the foregoing Recitals, which are a substantive part
of this First Amendment, and for good and valuable consideration, including the covenants
contained herein, Agency and Developer hereby agree as follows:
1. Promptly following the execution hereof, Agency and Developer shall complete
the following actions:
(i) Developer shall deliver to the Agency (A) a letter of credit, in form and
substance reasonably acceptable to Agency, in the amount of Thirty Six Thousand Dollars
($36,000) which shall be held by the Agency as security for Developer's completion of all
remaining punch list items relating to construction of the Developer Parcel Work of
Improvement, and which shall be returned to Developer upon satisfactory completion of that
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First Amendment
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work, and (B) a cash payment to Agency in the amount of Eighteen Thousand Dollars ($18,000)
in full satisfaction of any further obligation of Developer with respect to installation of transit
related furniture.
(ii) Following receipt of the above letter of credit and funds, Agency shall
work with Developer to secure issuance of a Certificate of Occupancy by the City with respect
to the Developer Parcel Work of Improvement.
(iii) Developer shall concurrently proceed with recordation of a Notice of
Completion with respect to the Developer Parcel Work of Improvement.
(iv) Within ten (10) days after satisfaction of items (i)-(iii) above, Agency
shall execute and deliver to Developer and Developer shall cause to be recorded a Release of
Construction Covenants in the form of Exhibit H to the OPA; and
(v) Notwithstanding the above, and subject to all other conditions precedent
set forth in Section 4.2.2 of the OPA, the Developer shall not be obligated to obtain a Certificate
of Occupancy in order for Agency to issue the Release of Construction Covenants.
2. Agency and Developer hereby acknowledge and agree that the provisions set
forth in the OPA concerning Annual Disbursement Payments and Annual Disbursement Dates
shall be modified as follows:
(i) the first Annual Disbursement Payment shall consist of one hundred
percent (100%) of the Net Developer Parcel Tax Increment attributable to the period from
October 8, 2009, through June 30, 2011 (the “First Payment Period”);
(ii) subsequent Annual Disbursement Payments shall mean one hundred
percent (100%) of the Net Developer Parcel Tax Increment attributable to the then current fiscal
year (the “Subsequent Payment Periods”);
(iii) the first Annual Disbursement Payment shall be due in two installments:
(A) the first installment in the amount of Eight Hundred Eighty Two Thousand Dollars
($882,000) (“Initial Agency Payment”), shall be paid by Agency to Developer within ten (10)
days after the recordation of the Release of Construction Covenants; and (B) a second
installment equal to the excess of (x) the Net Developer Parcel Tax Increment attributable to the
First Payment Period over (y) the Initial Agency Payment shall be paid by Agency to Developer
on or prior to August 15, 2011 (provided, that, if the information necessary to determine the
final amount of the Net Developer Parcel Tax Increment attributable to the First Payment Period
is not available by the date, then the balance of the estimated first Annual Disbursement
Payment (i.e., a second payment of $882,000) shall be made on August 15, 2011, and as soon as
the information necessary to determine such final payment becomes available, the parties shall
determine the amount of the first Annual Disbursement Payment and make such payment
between them as is necessary to reconcile such estimated payments to the final payment
amount); and
(iv) all subsequent Annual Disbursement Payments shall also be due in two
installments: (A) the first installment, in the amount of Fifty Percent (50%) of the projected Net
ATTACHMENT 1
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First Amendment
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Developer Parcel Tax Increment attributable to the then current fiscal year (the “Estimated
Agency Payment”), shall be paid to Developer prior to October 1 of that fiscal year,
commencing on October 1, 2011; and (B) a second installment, equal to the excess of (x) the
Net Developer Parcel Tax Increment attributable to the then current fiscal year over (y) the
Estimated Agency Payment for that fiscal year shall be paid by Agency to Developer prior to
date which is forty-five (45) days after the conclusion of such fiscal year.
3. Agency and Developer acknowledge and agree that the first Annual
Disbursement Payment shall be made to Developer subject only to satisfaction of the conditions
set forth in paragraph 1(i)-(iv) above, and that any other conditions to the release of such initial
Annual Disbursement Payment, including all Developer Parcel Conditions Precedent are hereby
deemed satisfied or waived as to such initial Annual Disbursement Payment and as to any
subsequent Annual Disbursement Payment to which such Developer Parcel Conditions
Precedent might otherwise be applied. Notwithstanding the above, Agency reserves its rights
under the OPA with respect to any tax assessment appeal filed by or on behalf of the Developer
after the date of this First Amendment.
4. Section 5.1.2 of the OPA is hereby amended and restated in its entirety to read as
follows:
5.1.2. Priority of Obligation. Prior to Agency’s issuance of its Tax
Allocation Bonds, 2011 Series A (Culver City Redevelopment
Project) and Taxable Tax Allocation Bonds, 2011 Series B (Culver
City Redevelopment Project) (collectively, the “2011 Bonds”),
Agency’s obligations hereunder are not, and shall not be construed
as, a pledge of tax increment pursuant to California Health and
Safety Code Section 33671. Commencing immediately after the
issuance of the 2011 Bonds and continuing thereafter until the
Agency Assistance Termination Date, however, Agency’s
obligations hereunder and under the Note shall be, and shall
(subject to the subordination provisions hereinbelow) be construed
as, a pledge of tax increment pursuant to California Health and
Safety Code Section 33671. Agency’s obligations hereunder and
under the Note, shall constitute an indebtedness of Agency for the
purpose of carrying out the redevelopment of the Culver City
Project Area and a pledge of Net Developer Parcel Tax Increment
to repay such indebtedness under the provisions of Section 16 of
Article XVI of the California Constitution and California Health
and Safety Code Sections 33670 — 33674. The obligations of
Agency set forth herein and in the Note are contractual obligations
that, if breached, will subject Agency to damages and other
liabilities or remedies, as set forth in Section 12 hereof.
Notwithstanding anything herein to the contrary, Net Developer
Parcel Tax Increment shall refer to and mean the tax increment
revenue, or payments in lieu thereof, which the Agency (or any
successor entity, including any entity established by law to carry
out the Culver City Redevelopment Project and/or expend tax
ATTACHMENT 1
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First Amendment
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increment and/or pay any indebtedness of the Agency to be repaid
in whole or in part with tax increment pursuant to Section 33670 of
the Community Redevelopment Law) is legally entitled to receive
for application to its obligations, whether arising under any
applicable constitutional provision, statute or other provision of
law. Agency shall include its obligations hereunder and under the
Note in all statements of indebtedness filed annually by Agency
pursuant to California Health and Safety Code Section 33675.
Notwithstanding the foregoing, Agency’s obligations hereunder
and the pledge of tax increment securing such obligations shall be
subordinate to any existing bonds (including, without limitation,
the 2011 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 (bonded indebtedness includes any
indebtedness incurred by Agency for bonds, notes, interim
certificates, debentures, certificates of participation or other
obligations issued by Agency); 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 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 and the Note. 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 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 and
the Note. 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
ATTACHMENT 1
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First Amendment
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Agreement and the Note as well as the proposed issuance,
assuming reasonable and customary debt coverage ratios. 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. Agency’s
obligations under this Section 5.1.2 shall terminate on the Agency
Assistance Termination Date.
5. The form of Promissory Note attached to the OPA is hereby replaced with the
form of Promissory Note attached hereto as Exhibit A. Concurrent with execution of this First
Amendment, the Agency shall deliver to Developer the revised executed Promissory Note.
6. Agency hereby represents and warrants to Developer that, to the best of
Agency’s knowledge, the Tax Increment Revenue Projection (Westfield Coverage Test, Tax
Increment Revenue Projection Component Areas 1, 2, 3 and 4) provided to Agency and
Developer by Keyser Marston Associates, Inc. to demonstrate that there is adequate coverage
for timely payment in full of the Agency’s obligations under the OPA (i) fully and fairly sets
forth the projected tax increment revenues to be received by the Agency over the period shown,
(ii) all Agency obligations that constitute a claim upon Agency tax increment revenues that is
senior to the payments to the Developer under the OPA have been included in the Tax
Increment Revenue Projection and reflected in the Westfield Mall coverage calculation, and (iii)
no information has been omitted or excluded that would render the projections shown
misleading or inaccurate in any material respect.
7. Developer hereby confirms to the Agency that it has waived any requirement for
a 30-day advance notice with respect to issuance of the 2011 Bonds, and that it has no objection
to the issuance thereof in accordance with the terms set forth in that certain Preliminary Official
Statement dated February 17, 2011. Concurrently with the execution of this First Amendment,
Developer agrees to execute the Waiver in substantially the form attached hereto as Exhibit B.
8. In the event of any conflict between the OPA and this First Amendment, this
First Amendment shall control. Except as provided in this First Amendment, the OPA remains
in full force and effect. This First Amendment shall also constitute an estoppel certificate from
each party to the other acknowledging that, subject to performance of the terms and obligations
set forth herein, and subject to the obligations by the Developer under the OPA relating to tax
assessment appeals, and further subject to compliance will applicable provisions of the
Subdivision Map Act by Developer, there are no outstanding defaults of the other party under
the OPA with respect to any events that have occurred on or prior to the date hereof.
9. The parties agree that to the extent the initial assessment of the Developer Parcel
following the issuance of the Release of Construction Covenants for the Developer Work of
Improvement by the Agency (the “Initial Assessment”) is less than One Hundred Fifty Million
Dollars ($150,000,000), the Developer shall pay the difference between the gross site-generated
tax increment that the Agency would have received had the Initial Assessment been One
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First Amendment
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Hundred Fifty Million Dollars ($150,000,000) and the gross site-generated tax increment
actually received by the Agency pursuant to the Initial Assessment.
[SIGNATURES FOLLOW ON NEXT PAGE]
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First Amendment
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IN WITNESS WHEREOF, this First Amendment has been executed as of the day and
year set forth above in the first paragraph hereof.
"AGENCY"
CULVER CITY REDEVELOPMENT AGENCY,
a community redevelopment agency organized and
existing under the California Community
Redevelopment Law
By:
Name:
Its:
ATTEST:
_________________________________
Agency Secretary
Approved as to form and legality:
Kane, Ballmer & Berkman
Agency General Counsel
By:
Murray O. Kane
[SIGNATURES CONTINUE ON NEXT PAGE]
ATTACHMENT 1
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First Amendment
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"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. Holding, 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:
ATTACHMENT 1
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EXHIBIT A
Form of Promissory Note
[behind this page]
ATTACHMENT 1
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WESTFIELD CULVER CITY MALL PROMISSORY NOTE
$10,000,000 Net Present Value Culver City, California
April 14, 2008
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 used herein shall have the meanings prescribed for those
terms in the OPA, as modified by that First Amendment to Owner Participation Agreement,
dated February ___, 2011.
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
conditions set forth in Paragraph 1 of the First Amendment to Owner Participation Agreement
have been satisfied.
All payments hereunder shall be payable on the Annual Disbursement Dates, subject to
and in accordance with the terms and conditions of the OPA, as modified by the First
Amendment to Owner Participation Agreement.
All payments 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, 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
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 a 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
ATTACHMENT 1
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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, as modified by the First Amendment to Owner
Participation Agreement, 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.
Prior to Agency’s issuance of its Tax Allocation Bonds, 2011 Series A (Culver City
Redevelopment Project) and Taxable Tax Allocation Bonds, 2011 Series B (Culver City
Redevelopment Project) (collectively, the “2011 Bonds”), Agency’s obligations hereunder are
not, and shall not be construed as, a pledge of tax increment pursuant to California Health and
Safety Code Section 33671. Commencing immediately after the issuance of the 2011 Bonds and
continuing thereafter until the Agency Assistance Termination Date, however, Agency’s
obligations hereunder shall be, and shall be construed as, a pledge of tax increment pursuant to
California Health and Safety Code Section 33671. Agency’s obligations hereunder shall
constitute an indebtedness of Agency for the purpose of carrying out the redevelopment of the
Culver City Project Area and a pledge of Net Developer Parcel Tax Increment to repay such
indebtedness under the provisions of Section 16 of Article XVI of the California Constitution
and California Health and Safety Code Sections 33670 - 33674. The obligations of Agency set
forth herein are contractual obligations that, if breached, will subject Agency to damages and
other liabilities or remedies. Notwithstanding anything herein to the contrary, Net Developer
Parcel Tax Increment shall refer to and mean the tax increment revenue, or payments in lieu
ATTACHMENT 1
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thereof, which the Agency is legally entitled to receive for application to its obligations
notwithstanding any change in law that may occur after the date hereof. Agency shall include its
obligations hereunder in all statements of indebtedness filed annually by Agency pursuant to
California Health and Safety Code Section 33675. Notwithstanding the foregoing, Agency’s
obligations hereunder and the pledge of tax increment securing such obligations shall be
subordinate to any existing bonds (including, without limitation, the 2011 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 (bonded indebtedness includes any indebtedness
incurred by Agency for bonds, notes, interim certificates, debentures, certificates of participation
or other obligations issued by Agency); 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 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 and the Note. 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 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 Note.
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 Note as well as the proposed issuance, assuming reasonable
and customary debt coverage ratios. 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. Agency’s obligations under this Note
shall terminate on the Agency Assistance Termination Date.
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Upon the Agency Assistance Termination Date, any amounts then outstanding under this
Note shall be forgiven. This Note amends, restates, replaces and supersedes the Note originally
attached as Exhibit H to the OPA and this Note shall relate back to the date of that OPA and have
the same priority as if originally executed on that date.
"AGENCY"
CULVER CITY REDEVELOPMENT AGENCY,
a community redevelopment agency organized and
existing under the California Community
Redevelopment Law
By:
Name:
Its:
ATTEST:
_________________________________
Agency Secretary
Approved as to form and legality:
Kane, Ballmer & Berkman
Agency General Counsel
By:
Murray O. Kane
ATTACHMENT 1
13
EXHIBIT B
Form of Waiver of Notice
[behind this page]
ATTACHMENT 1
14
WAIVER OF NOTICE
The undersigned, on behalf of 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”), and on behalf of any and all of their heirs, assigns, successors-in-
interest, acknowledge and agree to the following:
1. THE CULVER CITY REDEVELOPMENT AGENCY (the “Agency”), a community
redevelopment agency organized and existing under the California Community
Redevelopment Law, and Developer are parties to that certain Owner Participation
Agreement dated as of April 2008, as may be amended from time to time, (collectively,
the “OPA”) related to the Developer Parcel Work of Improvement (defined therein) on
the Developer Parcel (defined therein) and which is within the redevelopment project
area covered by the Redevelopment Plan for the Culver City Redevelopment Project.
2. Developer has been advised by the Agency that the Agency intends to issue up to $16
million of tax-exempt Tax Allocation Bonds and up to $45 million of taxable Tax
Allocation Bonds for the Culver City Redevelopment Project.
3. Pursuant to Section 5.1.2 of the OPA and the Promissory Note (Exhibit E to the OPA),
Agency shall notify Developer not less than thirty (30) days prior to issuance and,
concurrent therewith, provide to Developer the fiscal consultant report (described therein)
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
the OPA.
4. Developer acknowledges that Agency has caused to be prepared and delivered to
Developer the fiscal consultant report in accordance with Section 5.1.2 of the OPA.
5. Upon inspection of said fiscal consultant report and further review, the Developer hereby
notifies Agency that the Developer has elected to waive the thirty (30) day notification
requirement pursuant to Section 5.1.2 of the OPA.
[SIGNATURES BEGIN ON NEXT PAGE]
ATTACHMENT 1
15
Accepted and agreed to as of this date of February , 2011.
"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. Holding, 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:
ATTACHMENT 1
16Summary of Westfield Mall Gross Receipt Over Ten Years
Year $ in Thousands
2000 15.4
2001 15.9
2002 17.1
2003 20.7
2004 17.9
2005 18.4
2006 18.8
2007 20.6
2008 20.3
2009 20.3
2010 18.8
2011 32.02
ATTACHMENT 2
17Westfield Culver City - Outstanding Conditions of Approval (February –2011)
Condition
No.
Outstanding
Condition
Division
Expected
Completion
Date
Anticipated
Cost
59
Modification of existing pedestrian stairway
Pedestrian stairway shall be modified to meet proper railing,
lighting and terminus design upgrades, etc. (along the Hannum
Avenue frontage and the sloped pedestrian ramp along the
Green Valley Circle frontage).
Planning Nov.1, 2011 $20,000
67B
Covenant Joining Project site Parcels
Record covenant holding all lots comprising the project site as a
single parcel as required by the City Engineer.
Planning
September 1,
2011
$10,000
133
Implementation of an employee congestion management plan
[i.e., transportation demand program (TDM)]
Submit for review and approval, and then implement, an
employee congestion management plan.
Transportation June 30, 2011 $6,000
TOTAL $36,000
ATTACHMENT 3
18