City of Culver City, California
Agenda Item Report
Meeting Date: 06/06/2011 Item Number: JC-1
JOINT CITY COUNCIL/REDEVELOPMENT AGENCY BOARD AGENDA ITEM:
Approval of an Assignment and Assumption Agreement between the Culver City
Redevelopment Agency and the City of Culver City, and a Sixth Implementation
Agreement with Axis Mundi RE II, LLC, for Development of the Baldwin Site (12803-
23 West Washington Boulevard)
Contact Person/Dept.:
John Fisanotti/CDD
Todd Tipton/CDD
Phone Number:
(310) 253-5767
(310) 253-5783
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [] Attachments: []
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas – City Council (06/01/11); (E-Mail)
Meetings and Agendas – Redevelopment Agency (06/01/11), Redevelopment Agency
Projects - West Washington Boulevard and Axis Mundi RE II, LLC (06/01/11)
Department Approval:
Sol Blumenfeld (05/25/11)
City Attorney Approval:
Carol Schwab (by H. Baker) (05/31/11)
Agency General Counsel Approval:
Murray O. Kane (05/17/11)
Chief Financial Officer Approval:
Jeff Muir (by N. Kimball) (06/01/11)
City Manager/Executive Director Approval:
John M. Nachbar (06/01/11)
RECOMMENDATION:
Staff recommends the Redevelopment Agency Board (Agency Board) approve an
Assignment and Assumption Agreement with the City of Culver City (City) to transfer
its rights and obligations and assign the Agency’s Disposition and Development
Agreement with Axis Mundi RE II, LLC (Axis Mundi) to the City for the development
of the Baldwin Site located at 12803-23 West Washington Boulevard (Site).
AND
Staff recommends the City Council (1) approve an Assignment and Assumption
Agreement with the Culver City Redevelopment Agency to assume the Agency’s
rights and obligations and Disposition and Development Agreement with Axis Mundi
RE II, LLC for the development of the Site and (2) approve a Sixth Implementation
Agreement for the development of the Site.
BACKGROUND:
On February 4, 2008, the Agency Board approved a Disposition and Development
Agreement (DDA) with Axis Mundi for the purchase and development of the Site.
The development proposed for the Site will create: a 37,000+/- square foot City of Culver City, California
Agenda Item Report
commercial building featuring office condominiums above ground floor retail, a 39
space public parking lot to be operated in partnership with the City, underground
parking for the office users, environmentally friendly “green” features, and a public
art component that will be incorporated in the building’s design.
Five subsequent Implementation Agreements have been executed between the
Culver City Redevelopment Agency (Agency) and Axis Mundi. The purpose of the
Implementation Agreements has been to extend the time frame in the DDA’s
Schedule of Performance for the sale of the property and construction of the project
necessitated by the downturn in the economy.
On March 14, 2011, the Agency transferred ownership of the Site to the City.
DISCUSSION:
Assignment and Assumption Agreement:
As a result of the transfer of the Site from the Agency to the City in March 2011, it is
appropriate that the Agency’s current contractual obligation related to the Site (i.e.
the DDA with Axis Mundi) be likewise transferred to the City. The proposed
Assignment and Assumption Agreement transfers all of the Agency’s rights and
obligations under the DDA to the City. The draft agreement includes written consent
from Axis Mundi to the Assignment.
Sixth Implementation Agreement:
The economic downturn that began in the fall of 2008 resulted in Axis Mundi being
unable to secure financing from its equity partners or other sources. As a result,
Axis Mundi was unable to satisfy its obligations pursuant to the initial Schedule of
Performance. Since then, Axis Mundi has looked for replacement funding and also
looked at design changes in order to lower the project’s cost. These efforts have not
resulted in the project moving forward. To date, Axis Mundi and the Agency Board
have remained committed to the original building design and have agreed to a series
of time extensions.
The proposed Sixth Implementation Agreement gives Axis Mundi a six month
extension (until December 31, 2011) to secure the financing, which is the critical
step needed to proceed. Without this extension, Axis Mundi will very likely default
on its commitments, leading to the termination of the DDA. The Agency would then
have to initiate a search for a project and a developer.
Staff recommends to the City Council approve the Sixth Implementation Agreement
for the following reasons:
City of Culver City, California
Agenda Item Report
• The principals comprising Axis Mundi are Wally Marks and Jim Suhr, who
have proven track records of successful development. Mr. Marks is best
known in Culver City for the nationally known Helms Bakery complex.
• The architect they selected, Roger Sherman Associates, has won accolades
for its innovative designs using the latest energy efficient materials. Staff
feels it would be difficult to replace a team of this quality.
• The building design, which is entitled, is an eye-catching, energy efficient
retail/office building that has potential to become the icon for the renaissance
of the western end of Washington Boulevard.
• Of all the various designs and uses proposed to the Agency Board for the Site
over the years, none combine the innovative architecture, public art, energy
efficiency, urban design, and additional public parking that Axis Mundi has
agreed to in the DDA.
FISCAL ANALYSIS:
There is no fiscal impact associated with the proposed Sixth Implementation
Agreement. The proposed project, as currently constituted, is estimated to generate
$40,000 annually in ongoing Business, Sales, and Utility Users Taxes and $68,000
annually in Parking Meter revenues for the City once complete. The project is
estimated to generate approximately $96,000 in tax increment revenues for the
Agency once complete.
MOTION:
That the Agency Board:
1. Approve an Assignment and Assumption Agreement to transfer its rights and
obligations under the DDA with Axis Mundi RE II, LLC for the development of
the Baldwin Site (12803-23 West Washington Boulevard) to the City of Culver
City; and,
2. Authorize the Agency General Counsel to review/prepare the necessary
documents; and,
3. Authorize the Executive Director to execute such documents on behalf of the
Agency.
That the City Council:
1. Approve an Assignment and Assumption Agreement to accept the rights and
obligations of the Agency under the DDA with Axis Mundi RE II, LLC for the
development of the Baldwin Site (12803-23 West Washington Boulevard);
and,
City of Culver City, California
Agenda Item Report
2. Approve a Sixth Implementation Agreement with Axis Mundi RE II, LLC for
the development of the Baldwin Site (12803-23 West Washington Boulevard);
and,
3. Authorize the City Attorney to review/prepare the necessary documents; and,
4. Authorize the City Manager to execute such documents on behalf of the City.