City of Culver City, California
Agenda Item Report
Meeting Date: 01/30/12 Item Number: J-3
JOINT CITY COUNCIL/REDEVELOPMENT AGENCY BOARD AGENDA ITEM:
Approval of a Commitment Letter with the Jazz Bakery for the Sale and
Redevelopment of City Owned Property located at 9814 Washington Boulevard.
Contact Person / Department:
Joe Susca/CDD
Todd Tipton/ CDD
Phone Number:
(310) 253-5763
(310) 253-5783
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 – City Council (01/26/12); (E-Mail)
Redevelopment Agency Projects (01/23/12); (E-Mail) Meetings and Agendas –
Redevelopment Agency (01/26/12); (E-Mail) The Downtown Business Association
(01/23/12); (E-Mail) The Advisory Committee on Redevelopment (01/23/12); (E-Mail) The
Gateway Neighborhood Association (01/23/12); (E-Mail) The Downtown Neighborhood
Association (01/23/12); (E-Mail) The Culver City Chamber of Commerce (01/12/12);
(Newspaper) A public notice was published in the January 19 and 26, 2012 editions of the
Culver City News; (U.S. Post) A public notice was mailed to businesses, residents, and
property owners in excess of a 500’ radius of the site (01/23/12); (E-Mail) Jazz Bakery
(01/23/12).
Department Approval:
Sol Blumenfeld: (01/25/12)
City Attorney Approval;
Carol Schwab (by H. Baker) (01/25/12)
Agency General Counsel Approval:
Murray Kane: (01/25/12)
Chief Financial Officer Approval:
Jeff Muir (01/26/12)
City Manager/Executive Director Approval:
John M. Nachbar (01/26/12)
RECOMMENDATION:
Staff recommends the City Council approve a Commitment Letter with the Jazz
Bakery for the sale of City owned property located at 9814 Washington Boulevard
(Property) pursuant to Section 33433 of the California Health and Safety code for
development of a live performance jazz theatre.|1010|
BACKGROUND/DISCUSSION:
On January 10, 2011 the Agency Board approved an Exclusive Negotiation
Agreement (ENA) with the Jazz Bakery for sale of the Property for its
redevelopment as a live performance jazz venue with 250 seats, a museum,
bakery/café, rehearsal studios, community meeting rooms, and a roof top deck
(Project).
City of Culver City, California
Agenda Item Report
On March 7, 2011 the Agency Board approved amending the ENA; extending its
schedule of performance to provide the Jazz Bakery additional time to prepare
detailed conceptual plans, an operational plan and attain evidence of financing for
the Project.
On December 29, 2011 the Supreme Court of California upheld AB X1 26, which
eliminates redevelopment agencies statewide effective February 1, 2012.
On January 13, 2012 the Jazz Bakery submitted a proposal that includes
conceptual, capital and operational plans for the Project. (See Attachment No. 1).
A Commitment Letter with the Jazz Bakery has been prepared pursuant to the
proposal with the following terms and conditions:
Jazz Bakery:
1. Develops an iconic jazz facility comprised of approximately 250 seats with
box office.
2. Funds design, construction documents, entitlement and construction costs.
3. Remits an in-lieu parking fee and/or secures offsite code complying parking
in order to satisfy Culver City Municipal Code parking requirements.
4. Develops the facility in accordance to a Schedule of Performance.
5. Fully funds costs associated with the relocation of mechanical equipment
within the craft area of the Kirk Douglas Theatre.
6. Makes the facility available to the public for community meetings and
performances.
7. Prepare an operation and project development funding plan for review and
approval by City Council.
Culver City:
1. Facilitates the relocation of the Kirk Douglas Theatre mechanical equipment
at the Jazz Bakery’s expense.
2. Conveys 9814 Washington Boulevard at no cost to Jazz Bakery “as-is”
through a disposition and development agreement.
FISCAL ANALYSIS:
The Jazz Bakery has received a $2 million grant from the Annenberg Foundation
for the Project, which is estimated to cost $10.2 million, not including the in lieu
parking fee and mechanical equipment costs.
The retail portion of the Project will generate modest sales tax, business tax, and
utility users tax revenues to the General Fund. Patrons of the theatre will also
frequent downtown restaurants, increasing their business. The elimination of the
blighted Property may spur additional redevelopment along Washington and City of Culver City, California
Agenda Item Report
Culver Boulevards in the future, which would have a positive financial effect upon
the area.
ATTACHMENTS:
1. January 13, 2012 Jazz Bakery Proposal
2. Draft Commitment Letter
3. Summary Report Pursuant to Section 33433 of the California Health and Safety
Code.
4. Public Notices
MOTION:
That the City Council:
1. Approve a Commitment Letter with the Jazz Bakery for the sale and subsequent
development of 9814 Washington Boulevard for construction of a live
performance jazz theatre pursuant to Section 33433 of the California Health and
Safety Code; and
2. Authorize the City Attorney and City Special Counsel to review/prepare all
necessary documents; and
3. Authorize the City Manager to execute the Commitment Letter on behalf of the
City, and to issue interpretations, waive provisions, enter into amendments on
behalf of the City, and to sign all such other documents and instruments
necessary to implement and carry out the agreement on behalf of the City in
such form as is reasonably acceptable to the City Manager.
NOTES:
|1010|The Agency and the City entered into a Cooperation Agreement dated January 15, 2011, as
amended on February 22, 2011 and March 7, 2011 (collectively the “Cooperation Agreement”). In
furtherance of the Cooperation Agreement and to achieve important public purposes, the Agency
has conveyed the 9814 Washington Boulevard property and other Agency-owned properties to the
City and has transferred the Agency’s cash accounts to the City to carry out the duties and
obligations of the Agency (without resulting liability to the City), devoid of relieving the Agency of its
duties and obligations to fulfill the goals and objectives of the Redevelopment Plan for Component
Area No. 3.
MEETING DATE: 01/30/12
AGENDA ITEM:
CITY COUNCIL ITEM: Approval of Commitment Letter for the Sale
of Property Located at 9814 Washington Boulevard to the Jazz
Bakery for redevelopment as a live performance theatre.
ATTACHMENTS
No. Item Pages
1
2
3
4
January 13, 2012 Jazz Bakery Proposal
Commitment Letter
Summary Report Pursuant to Section 33433 of the
California Health and Safety Code.
Public Notices
1-6
7-16
17-23
24-26
GEHRY PARTNERS, LLP.
JAZZ BAKERY
TWO LEVEL SCHEME - 250 SEATS
GROUND FLOOR
PROGRAM AREAS
(N.S.F.) ()
JAZZ BAKERY
LOBBY/GALLERY:2026
CAFE:195
PUBLIC RESTROOMS:292
BLACK BOX:794
CAFE:397
OFFICE:230
BOH/STORAGE:252
VERTICAL CIRCULATION:627
TOTAL: 4813
GROSS AREA
4919 SQ.FT.
CENTER THEATER
PARCEL B:1333 33 P|1010|ATTACHMENT 1GEHRY PARTNERS, LLP.
JAZZ BAKERY
TWO LEVEL SCHEME -250 SEATS
SECOND FLOOR
PROGRAM AREAS
(N.S.F.) ()
JAZZ BAKERY
UPPER LOBBY_MAIN:1133
UPPER LOBBY(NORTH):360
AUDITORIUM:2086
LOADING/STAGING:138
OFFICE:319
BOH/STORAGE:170
TOTAL: 4206
GROSS AREA
4541 SQ.FT.|1010|ATTACHMENT 1GEHRY PARTNERS, LLP.
JAZZ BAKERY
TWO LEVEL SCHEME -250 SEATS
ROOF PLAN|1010|ATTACHMENT 1EXHIBIT I
Jazz Bakery Capital Plan
Preliminary and Subject to Change
2 Story - 2 Theater - Paskin Site in Culver City designed by Frank Gehry
($000)
Preliminary Estimate of Buiding Costs:
Building 7,000 $
FFE 1,000 $
Fees 700 $
Parking TBD
CTG associated Costs 400 $
Project Management 300 $
Transition Costs 800 $
Total Requirements 10,200 $
Preliminary Esitmate of Funding Sources:
Grants Received 2,000 $
Planned Capital Campaign 8,200 $
Targeted Sources:
Individuals 5,000 $
Institutions 3,000 $
Events 200 $
Total Funding 8,200 $ |1010|ATTACHMENT 1Jazz Bakery Preliminary Operational Plan EXHIBIT II
Preliminary and Subject to Change
2 Story - 2 Theater - Paskin Site in Culver City designed by Frank Gehry
2007 Actual
(prior Theater) Projected - New Buiding Operational
($000) ($000)
Cost of Operations:
Artist Director 100 $
Executive Director 100 $
General Operations 100 $
Admin/Finance 50 $
Marketing & PR 30 $
Development 40 $
Performance Space - Occupancy 77 $ 80 $
Other Operations 173 $ - $
Total Costs 250 $ 500 $
Net Production Income (Exhibit IIa) 126 $ 200 $
Other Earned/Rentals 35 $ 50 $
Earned Revenues 161 $ 250 $
Philanthropic Support 89 $ 250 $
Philanthropic Sources:
Grants 150 $
Individuals 50 $
Events - $ 50 $
Total Philanthropic 130 $ 250 $
Net Cash Flow 41 $ - $
Summary P&L
Revenues:
Ticket Sales 850 $
Rentals 50 $
Grants 200 $
Events 50 $
Total 1,150 $
Expenses:
Artist Fees & Production 650 $
Operations 500 $
1,150 $ |1010|ATTACHMENT 1Estimated Annual Production Income Assumptions EXHIBIT IIa
Preliminary and Subject to Change
2 Story - 2 Theater - Paskin Site in Culver City designed by Frank Gehry
New Building
Seats 250
Shows per year 250
Seats Available 62,500
Paid Attendance 40%
Seats Sold 25,000
Ticket Price 35.00 $
Gross Revenue 875,000 $
3,500
Artist Fees & Production 75%
Gross Expense 656,250 $
Net Revenue 218,750 $
Average Cost per Show 2,625
Note: Actual Tickets Solds:
2007 18,660
2008 21,468 |1010|ATTACHMENT 1
CITY OF CULVER CITY
9770 Culver Boulevard, Culver City, California 90232
Sol Blumenfeld 310 253-5700
Community Development Director 310 253-5779 Fax
____________________________
Culver City Employees take pride in effectively providing the highest levels of service to enrich the quality of life for the community by building on
our tradition of more than seventy-five years of public service, by our present commitment, and by our dedication to meet the challenges of the
future.
PRINTED ON RECYCLED PAPER
January 31, 2012
* Via Certified Mail,
Return Receipt Requested
Ruth Price, President and Artistic Director
The Jazz Bakery Performance Center
1836 Benedict Canyon Road
Beverly Hills, California 90210
Re: Sale and Development of City of Culver City Owned Property
Located at 9814 Washington Boulevard,
Culver City, California 90232
Dear Ms. Price:
On behalf of the City of Culver City (“City”), I am pleased to inform you that the
City has approved a commitment to Jazz Bakery Performance Center, a
California non-profit corporation (the “Buyer”) for the City’s disposition of that
certain real property located at 9814 Washington Boulevard, Culver City,
California, also known as APN No. 4207-006-915 and described in the legal
description attached hereto as Exhibit A and incorporated herein by this
reference (the “Property”), and Buyer’s development and construction thereon of
a premier live performance state of the art jazz venue with two hundred and fifty
(250) seats, ground level lobby, a jazz museum, black box performance area
and a bakery/café with outdoor dining, consistent with that certain proposal dated
January 13, 2012 (the “Proposal”) submitted by Buyer to the Culver City
Redevelopment Agency, a public body, corporate and politic (the “Agency”)
which Proposal is hereby incorporated herein by this reference (the “Project”).
By entering into this commitment, the goal of the City and Buyer is to provide a
Project which implements the City’s General Plan, completes the objectives of
reanimating the Downtown area, and compliments the redevelopment activities
already begun in the Downtown area.
Unless otherwise agreed in writing by the City in its sole discretion, the City’s
approval of this commitment is subject to and contingent upon the following
terms and conditions. This conditional commitment will expire on March 30,
2012, unless accepted by the Buyer.
|1010|ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 2 of 10
PRINTED ON RECYCLED PAPER
TERMS AND CONDITIONS
1. The Project will consist of the acquisition of the Property by Buyer from the
City and the development thereon of a premier live performance state of the art
jazz venue with two hundred and fifty (250) seats, ground level lobby, a jazz
museum, black box performance area and a bakery/ café with outdoor dining.
2. The Project will be LEED certified and will comply with the CalGreen
requirements, photovoltaic requirements and green building requirements as
mandated by the City.
3. The Project will be developed consistent with (i) the Proposal (which is
subject to changes or revisions as mutually agreed to in writing by the City and
Buyer), (ii) the Redevelopment Plan for the Culver City Redevelopment Project
Area approved and adopted by the City pursuant to Ordinance No. 98-014 on
November 23, 1998, as amended pursuant to Ordinance 98-015 on November
23, 1998, (iii) plans and specifications approved by the City, and (iv) all
applicable local, state and federal laws, rules and regulations. Each of the
documents described in this paragraph are hereby incorporated herein by this
reference.
4. This commitment is contingent upon the written approval of CTG as
lessee of a portion of the Property and a holder of certain development rights to
the Property pursuant to that certain Lease Agreement entered into by and
between the City (as successor landlord) and CTG on or about September 4,
2003 (“Lease Agreement”). Such approval by CTG includes approval for the
Buyer’s development of the Project on the Property until such time the initial ten
(10) year time period from the term of the Lease Agreement expires, as set forth
in Section 202(d) of the Lease Agreement.
5. The Property shall be conveyed to Buyer from the City subject to the
Lease Agreement as it currently exists and/or as such Lease Agreement may be
amended.
6. The City’s commitment hereunder is based on the Buyer’s submittal of a
final financial pro forma within 90 days following execution of this document,
estimating the total development costs for the Property and the Project shown
below (these are current projections and are subject to change). The Buyer shall
prepare and submit a final sources and uses project budget for approval by the
City at the respective time provided in the schedule of performance (see
paragraph 22 below). Line item estimates of the uses of funds shall be
supported by such documentation, including appraisals and construction cost
estimates, as may reasonably be required by the City Manager or designee. The
final sources and uses of funds for the Property and Project shall be consistent
with the project budget except as otherwise approved by the City Manager or
designee. |1010|ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 3 of 10
PRINTED ON RECYCLED PAPER
Permanent Sources of Funds
Permanent Lender $_________
Buyer Equity $_________
Philanthropic Resources $250,000
Annenberg Foundation Grant $2,000,000
Total $10,200,000
1
7. The Buyer shall be responsible, without any cost to the City, for obtaining
all funds necessary to pay costs to construct the Project, including, but not limited
to costs of demolishing any improvements on the Property, developing the
Property, constructing the improvements, including any offsite or onsite
improvements required by the City in connection therewith, and all other costs
necessary to complete the Project. Buyer shall be solely responsible for
developing and constructing the Project including the costs to provide code
complying parking subject to this commitment.
8. Buyer shall prepare for City approval an Operations/Business Plan
identifying annual costs and revenues to operate the Project over a five year
period.
9. Buyer shall pay all costs for relocating HVAC equipment and electrical
transformers within the CTG craft area to accommodate Buyer’s construction of
the Project. As of the date of this commitment, the estimated cost to relocate the
HVAC, boiler and electrical transformer to an above grade location equals
$575,000. Buyer shall be responsible for estimating and funding any below grade
installation of HVAC equipment, electrical transformers, boilers or other related
equipment. In any event the Buyer assumes all costs for estimating and
relocating the specified equipment pursuant to City requirements and obligations.
10. At the sole cost of Buyer, City shall use commercially reasonable efforts to
facilitate the Kirk Douglas Theater HVAC and SCE transformer relocation.
11. At the closing of the construction financing for the Project, the City will
convey the Property to Buyer for the purchase price of $ 0 subject to and
conditioned upon the terms and conditions of this commitment.
12. Buyer shall provide all required parking in accordance with the Culver City
Municipal Code.
1
Please note, the final estimated cost to acquire and develop the Project set forth herein must include costs
attributed to parking and required HVAC relocation costs. |10 10|ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 4 of 10
PRINTED ON RECYCLED PAPER
13. In connection with the parking requirements, the total number of code
complying parking spaces required for the Project will be as determined by the
City. To satisfy the parking needs of the Project, Buyer shall make an in lieu
parking payment to the City and/or secure off-site parking to serve the Project, in
order to provide parking that complies with the City’s municipal code. In addition,
Buyer shall comply with the Culver City Municipal Code and any and all
requirements of the City.
14. At the closing of the construction financing for Project, certain documents
will be recorded against the Property, as applicable, that will evidence and
secure the City’s required use and operating covenants of the Property,
including, but not limited to an Agreement Containing Covenants, or similar
document, restricting for at least sixty (60) years the use of the Property as a
premier live performance state of the art jazz venue or other use approved by the
City Manager or designee. At the closing of the construction financing for the
Project, Buyer will also provide a performance guaranty in favor of the City, in
form and substance approved in writing by the City Manager or designee.
Notwithstanding the foregoing sentence, this commitment is not intended to
describe all of the requirements, terms, conditions and documents necessary or
required therefor; each of the parties hereto shall execute such other and further
documents and do such further acts as may be reasonably required to effectuate
the intent of the parties hereto and carry out the terms of this commitment. The
City Manager or designee is authorized to take such actions on behalf of the City
that are consistent with this commitment, without further approval from the City
Council of the City.
15. The Buyer shall comply with State Prevailing Wage and/or Federal Davis-
Bacon requirements, if applicable, and shall indemnify and hold harmless the
City in connection therewith.
16. Any transfer of the Buyer’s interests in the Property or this commitment is
prohibited, unless the City has granted its prior written consent thereto, which
shall not be unreasonably withheld or delayed.
17. Events of default by the Buyer will permit the City, after notice and
opportunity to cure, to pursue appropriate remedies, including the City’s right to
enter and retake the Property. These events may include, but are not limited to,
failure to complete timely the development of the Project as required by this
commitment, failure to comply with use restrictions, transfers of interests in the
Buyer or in the Project without the reasonable prior consent of the City, failure to
comply with terms and conditions of covenants, deeds of trust, and similar
occurrences.
18. Buyer shall purchase the Property “AS IS, WHERE IS”, and “WITH ALL
FAULTS”, after such inspection, analysis, examination and investigation Buyer
cares to make and expressly without City’s covenant, warranty or representation
as to physical condition, title, leases, rents, revenues, income, expenses,
10
ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 5 of 10
PRINTED ON RECYCLED PAPER
operation, zoning or other regulation, compliance with law, suitability for
particular purposes or any other matter whatsoever. City has no obligation to
make repairs, replacements or improvements to the Property, or to pay any fees,
costs or expenses related to the Property.
19. The Buyer shall obtain all land use entitlements, approvals and permits
necessary for the development of the Project not already obtained and shall pay
all fees in connection therewith, including, but not limited to the review and
processing of such land use entitlements, approvals and permits by the City.
20. The Buyer’s architect and general contractor shall be subject to the
reasonable approval of the City Manager or designee.
21. The Project shall be subject to compliance with all applicable
environmental requirements (e.g., CEQA and/or NEPA).
22. Within sixty (60) days after the date of this commitment, the Buyer shall
prepare and submit a scope of development for approval by the City. The City
Manager or designee shall have the right to review and approve all design
drawings and plans for the Project. All plans for the construction of the Project
shall be subject to applicable City design review approval procedures, and shall
be consistent with and a logical evolution of the scope of development, except as
otherwise approved by the City Manager or designee.
23. Within sixty (60) days after the date of this commitment, the Buyer shall
prepare and submit a schedule of performance providing for the timely
satisfaction of all conditions precedent to the closing and the timely
commencement and completion of construction, for approval by the City. Except
as otherwise approved by the City Manager or designee, failure to comply with
the schedule of performance shall be a default under the terms of this
commitment.
24. At the respective times provided in the schedule of performance, the
Buyer shall submit for approval by the City Manager or designee evidence of
financing consistent herewith and sufficient to completely finance the
development of the Project. At the respective times provided in the schedule of
performance, Buyer shall also submit to the City a pro forma showing the fiscal
feasibility for all aspects of the Project, including on-going operations of the
Project, and evidence of quality cafe/bakery tenant commitments.
25. At the respective times provided in the schedule of performance, Buyer
shall prepare and submit a final operational maintenance plan for the Project,
including, but not limited to a plan for satisfaction of all parking requirements.
26. The Buyer shall submit an audited cost certification following completion of
construction.
11
ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 6 of 10
PRINTED ON RECYCLED PAPER
27. Certain portions of the Property shall be offered for rent by Buyer to
members of the public for community meetings and performance space, on terms
and conditions first reasonably approved in writing by the City Manager or
designee.
28. Buyer shall provide quarterly progress reports of Project implementation to
the City Manager or designee in a format reasonably requested by the City
Manager or designee. These reports, at a minimum, shall include status reports
regarding progress associated with the schedule of performance and the Buyer’s
efforts to secure quality retail and restaurant/bakery tenants for the Project.
29. The Buyer shall indemnify and hold the City harmless for any costs
relating to hazardous materials affecting the Property. Prior to the closing, the
Buyer shall submit to the City a Phase 1 Environmental Site Assessment.
Subject to a right of entry and license approved by the City, the Buyer shall
conduct such additional environmental testing as may be necessary to determine
that hazardous materials are not present on the Property, or that any hazardous
materials on the Property may be remediated without adversely affecting the
feasibility of the Project. The Buyer shall execute an environmental indemnity in
favor of the City similar to the form of environmental indemnity used in other City
or Agency transactions. Buyer shall have the sole responsibility for all costs and
fees associated with the removal or remediation of any potentially hazardous
materials from the Property, demolition of any improvements on the Property,
and relocation of any persons, entities or equipment from the Property.
30. Buyer shall submit for City approval all corporate and partnership or
limited liability formation documents, agreements with the tax credit investor, and
authorizing resolutions, as applicable.
31. Buyer shall obtain and maintain policies of insurance in the form and in the
amounts required by the City, not including earthquake insurance, naming the
City as an additional insured and meeting the insurance requirements
customarily included in disposition and development agreements.
32. Prior to the closing of the construction financing for the Project, the Buyer
shall obtain and submit evidence of insurance, evidence of financing
commitments, copies of construction loan documents and such other
documentation as customarily included in disposition and development
agreements.
33. The City reserves its right, in its sole and absolute discretion, to assign
this commitment and all of the City’s rights, title and interest in this commitment
to an affiliate entity of the City without obtaining the consent or approval of the
Buyer or any interested party in the Project.
34. Buyer and its successors-in-interest shall indemnify, defend and hold
harmless the City and its elected and appointed officials, officers, employees,
12
ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 7 of 10
PRINTED ON RECYCLED PAPER
agents, contractors and consultants (individually and collectively, the
“Indemnitees”) from and against any and all claims, lawsuits, judgments, liability,
injury or damage, including without limitation associated and reasonably incurred
attorneys’ fees and court and litigation costs arising out of the defense of any
such claims and/or lawsuits, and actual attorneys’ fees and court and litigation
costs that may be awarded by the court and required to be paid by the
Indemnitees resulting or arising from or in any way connected to this commitment
or the Project including, but not limited to the following: (i) any plans or designs
for improvements prepared by or on behalf of Buyer, including without limitation
any errors or omissions with respect to such plans or designs; (ii) any loss or
damage to the City resulting from any inaccuracy in or breach of any
representation or warranty of Buyer, or resulting from any breach or default by
Buyer under this commitment; and (iii) the death of any person or any accident,
injury, loss, or damage whatsoever caused to any person or to the property of
any person which shall be directly or indirectly caused by the acts of, or any
errors or omissions of, the Buyer or its officers, shareholders, directors,
members, agents, servants, employees, contractors, or invitees. Buyer shall not
be responsible for any liability, loss, damage, cost, or expense (including
reasonable attorney’s fees and court costs) arising from or as a result of the
gross negligence or willful misconduct of the Indemnitees. The City shall have
the sole discretion to select legal counsel to represent the City’s legal interests in
the defense of any such lawsuits, claims or other actions filed against the City.
35. The obligation of the City to pay any costs in connection with this
commitment shall be a special limited obligation of the City payable exclusively
from funds paid by the Agency and its successors. Nothing contained herein
shall be construed to create any obligation payable from the City of Culver City’s
general fund.
36. Except as otherwise expressly provided herein, the execution and delivery
of this commitment shall not be deemed to confer any rights upon, nor obligate
any of the parties hereto, to any person or entity other than the parties hereto.
[Remainder of page intentionally blank]
[Signatures on following page]
13
ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 8 of 10
PRINTED ON RECYCLED PAPER
Please acknowledge your consent to the foregoing terms and conditions by
signing and returning a copy of this commitment to my attention. If you have any
questions regarding the matters discussed herein, then please do not hesitate to
contact Mr. Sol Blumenfeld, Community Development Director for the City, at
310-253-5700.
Sincerely,
CITY OF CULVER CITY,
a municipal corporation
By: ______________________
John M. Nachbar
City Manager
APPROVED AS TO CONTENT:
By: _________________________________
Sol Blumenfeld
Community Development Director
APPROVED AS TO FORM:
KANE, BALLMER & BERKMAN
City Special Counsel
By: _________________________________
Murray O. Kane
[Signatures Continue on Following Page]
14
ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 9 of 10
PRINTED ON RECYCLED PAPER
Jazz Bakery Performance Center, a California non-profit corporation, hereby
acknowledges and consents to all of the terms and conditions set forth in this
commitment.
JAZZ BAKERY PERFORMANCE CENTER,
a California non-profit corporation
By:_________________
Its:_________________
By:_________________
Its:_________________
15
ATTACHMENT 2Jazz Bakery Commitment Letter
January 31, 2012
Page 10 of 10
PRINTED ON RECYCLED PAPER
EXHIBIT A
LEGAL DESCRIPTION
16
ATTACHMENT 2
1
1201016-V1;CC:KHH:DP
11410.001.099/1/26/12
SUMMARY REPORT PURSUANT TO
CALIFORNIA HEALTH AND SAFETY CODE SECTION 33433
ON A
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
THE CITY OF CULVER CITY
AND
THE JAZZ BAKERY PERFORMANCE CENTER
The following Summary Report has been prepared pursuant to California Health and Safety
Code Section 33433 (Section 33433). The Summary Report sets forth certain details of the
proposed Purchase and Sale Agreement (Agreement), as evidenced by a Commitment Letter
(Letter), between the City of Culver City (City), and The Jazz Bakery Performance Center, a
California non-profit corporation (Developer). The Agreement requires the City to convey the
6,590 square foot parcel located at 9814 Washington Boulevard (Site) to the Developer for the
construction of a live performance theater (Project). The purpose of the Agreement is to
effectuate the Redevelopment Plan (Redevelopment Plan) for the Component Area No. 3 –
Washington/Culver Project Area (Project Area).
The proposed conveyance of the Site to the Developer is subject to the reporting requirements
imposed by Section 33433. Specifically, Section 33433 requires the conveying entity to prepare
a report that summarizes the financial terms associated with the disposition transaction for the
Site. The following Summary Report is based upon the information contained within the
Agreement, and is organized into the following seven sections:
I. Salient Points of the Agreement: This Section summarizes the major responsibilities
imposed on the Developer and the City by the Agreement.
II. Cost of the Agreement to the City and the Agency: This section details the costs
previously incurred by the Agency, and the additional costs that must be incurred by the
City to implement the Agreement.
III. Estimated Value of the Interests to be Conveyed Determined at the Highest Uses
Permitted under the Redevelopment Plan: This section estimates the value of the
interests to be conveyed determined at the highest use permitted under the
Redevelopment Plan.
IV. Estimated Reuse Value of the Interests to be Conveyed: This section summarizes
the valuation estimate for the Site based on the required scope of development, and the
other conditions and covenants required by the Agreement.
V. Consideration Received and Comparison with the Established Value: This section
describes the compensation to be received by the City, and explains any difference
between the compensation to be received and the established value of the Site.
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VI. Blight Elimination: This section explains how the Agreement will assist in alleviating
blight in the Project Area.
VII. Conformance with the AB1290 Implementation Plan: This section describes how the
Agreement achieves goals identified in the adopted AB1290 Implementation Plan.
This Summary Report and the Agreement are to be made available for public inspection prior to
the approval of the Agreement.
I. SALIENT POINTS OF THE AGREEMENT
Scope of Development
The proposed scope of development includes the following elements:
1. A state-of-the-art jazz venue/live performance theater comprised of approximately 250
seats;
2. A ground level lobby;
3. A jazz museum;
4. A bakery/café with outdoor dining;
5. A second floor performance theater with a mezzanine; and
6. A Black Box Theater.
The City’s Parking Code requires the Project to be served by 91 parking spaces. It is anticipated
that the parking requirement will be fulfilled through an in lieu parking fee and/or the provision of
off-site code complying parking.
CTG Lease
A portion of the Site is leased by Center Theater Group (CTG) for loading and other purposes to
serve its use of the adjacent parcel located at 9820 Washington Boulevard. The CTG rights to
the Site are pursuant to the Lease Agreement (Lease) by and between the City and CTG, dated
September 4, 2003. The City is responsible for arriving at a mutually satisfactory agreement
with CTG to amend the Lease and to provide CTG with an interest in the Project that provides
comparable space and preserves on the Site the loading and other uses. The Agreement and
the Project are contingent upon receiving written approval from CTG.
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Developer Responsibilities
The Agreement requires the Developer to accept the following responsibilities:
1. The Developer must accept conveyance of the Site in an “as-is” condition.
2. The Project must be consistent with the following:
a. All plans and specifications approved by the City; and
b. All applicable local, state and federal laws, rules, and regulations.
3. The Developer will construct the Project to a LEED certified standard and will comply
with the CalGreen requirements, photovoltaic requirements, and green building
requirements as mandated by the City.
4. The Project approval is subject to the Developer’s compliance with all applicable
environmental requirements (NEPA, CEQA, etc.).
5. The Developer shall prepare and submit a Project sources and uses budget for approval
by the City, including back up documentation as requested by the City. The final sources
and uses of funds for the Project must be consistent with the budget except as otherwise
approved by the City.
6. The Developer must submit for City approval all corporate and partnership or limited
liability formation documents, agreements with the tax credit investor, and authorizing
resolutions, as applicable.
7. The Developer must obtain and maintain insurance policies as required by the City.
8. The Developer must comply with the Culver City Municipal Code and any other
requirements of the City regarding parking. The City and the Developer will mutually
agree upon the manner in which this parking requirement is fulfilled.
9. The Developer must submit a Scope of Development for approval by the City. The City
has the right to review and approve all design drawings and plans for the Project and all
plans shall be subject to applicable City design review procedures.
10. The Developer must adhere to a Schedule of Performance for Project implementation.
The Developer must provide quarterly progress reports of Project implementation.
11. The Developer must submit the following at the respective times provided in the
Schedule of Performance:
a. Evidence of financing that is sufficient to completely finance the development of
the Project;
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b. A pro forma showing the fiscal feasibility of all aspects of the Project operations,
including evidence of quality retail and restaurant/bakery tenant commitments;
c. An operational maintenance plan for the Project, including, but not limited to a
plan for satisfying the parking requirements; and
d. A performance guaranty approved in writing by the City.
12. The Developer must obtain approval of the Project architect and general contractor from
the City.
13. The Developer must obtain all land use entitlements, approvals, and permits necessary
for the development of the Project that are not already obtained, and must pay all related
fees.
14. The Developer must indemnify the City for any costs relating to hazardous materials
affecting the Site. The Developer accepts all responsibility for costs and fees associated
with the removal or remediation of any potentially hazardous materials from the Site,
demolition of any improvements on the Site, and relocation of any persons, entities or
equipment from the Site.
15. The Developer must pay for the cost of relocating the HVAC equipment and electrical
transformer within the CTG craft area to accommodate construction of the Project. The
estimated cost to relocate the HVAC equipment is $575,000 for an above grade
relocation.
16. The Developer must comply with state prevailing wage and/or federal Davis-Bacon
requirements, if applicable.
17. The Developer must submit to the City an audited cost certification following completion
of construction.
18. The Developer must enter into an Agreement Containing Covenants, or similar
document, restricting the use of the Site for at least 60 years as a live performance jazz
venue or other use approved by the City.
19. The Developer may not transfer its interest in the Project without prior written consent
from the City.
20. The Developer must rent community meeting and rehearsal space to the public.
21. The Developer agrees to indemnify the City from any and all claims resulting from the
implementation of the Agreement and the construction of the Project.
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City Responsibilities
The Agreement imposes the following responsibilities on the City:
1. The City must convey the Site to the Developer for the purchase price of $0, subject to
the terms and conditions of the Agreement.
2. The City must use commercially reasonable efforts to amend the Lease with CTG to
facilitate construction of the Project.
3. The City agrees to facilitate the HVAC and transformer relocation, at the Developer’s
expense.
II. COST OF THE AGREEMENT TO THE CITY AND THE AGENCY
The Agency previously incurred costs totaling $337,805 associated with assembling the Site.
Total Dollars
Property Acquisition $280,000
Relocation Costs 55,940
Miscellaneous Improvement Costs 1,865
Total Previously Incurred Costs $337,805
If the Project parking requirement is met through the payment of an in-lieu fee, the City will
receive a payment of up to $1,911,000, based on 91 required spaces and an in-lieu fee of
$21,000 per space. The required parking spaces may be allocated to the City Hall parking
structure or the Downtown Parking Pool. The City will incur the annual cost of operating the
public parking, and will receive any revenue generated by the spaces.
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN
Section 33433 requires the City to identify the value of the interests being conveyed at the
highest use allowed by the requirements imposed by the Redevelopment Plan. The valuation
must be based on the assumption that near-term development is required, but the valuation
does not take into consideration any extraordinary use, quality and/or income restrictions that
are being imposed on the development by the City.
In an appraisal dated October 17, 2011 and in a supplemental letter to appraisal dated
November 7, 2011, Lea Associates, Inc. (Appraiser) concluded that the market value of the
nearby Parcel B site, located at 9300 Culver Boulevard (Parcel B), is approximately $100 per
square foot. The Appraiser’s conclusion was based on a sales comparison approach.
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The subject Site is located approximately 0.2 miles from Parcel B. In addition, the two sites are
located within the Commercial/Downtown Overlay Zone and are both designated for Downtown
land use in the City’s General Plan and in the Redevelopment Plan. Therefore, the appraised
per square foot market value of Parcel B is a reasonable approximation of the value of the
subject Site. Based on the above, the estimated market value of the subject Site is $659,000.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
The Agreement requires the Developer, a non-profit organization, to own and operate a live
performance venue. Based on the financial projections provided by the Developer, the Project is
estimated to generate an annual operating deficit of negative $250,000.
Total Dollars
Gross Income – Production & Rentals $250,000
Cost of Operations (500,000)
Net Annual Operating Deficit ($250,000)
The Developer expects to raise approximately $250,000 annually in philanthropic sources
(grants, donations, and event income) to cover the operating deficit. The projected annual net
cash flow is $0.
Total Dollars
Net Annual Operating Deficit ($250,000)
Total Annual Philanthropic Sources 250,000
Net Cash Flow $0
In summary, the Developer is a non-profit entity and the Project is expected to operate at a
deficit. Only through identifying philanthropic sources will the Project reach a break-even status.
Based on the above, the fair reuse value of the Site is estimated at $0.
V. CONSIDERATION RECEIVED AND COMPARISON WITH THE ESTABLISHED
VALUE
The Agreement requires the City to convey the Site at no cost to the Developer, which is equal
to the reuse value of $0. Thus, it can be concluded that the consideration being received by the
City is not less than the fair reuse value for the Site given the use, the covenants and
conditions, and the development costs required by the Agreement.
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VI. BLIGHT ELIMINATION
The Site is located near a major intersection in Downtown Culver City. Currently, the Site is
occupied by a vacant single family residence. Development of the Project on the Site will fill in a
gap in the Downtown streetscape and eliminate the blighting conditions caused by the improper
and underutilization of land. Thus, the proposed Project fulfills the blight elimination requirement
imposed by Section 33433.
VII. CONFORMANCE WITH THE AB1290 IMPLEMENTATION PLAN
The Project was identified in the Five Year Implementation Plan for 2010 – 2014. The goals
and objectives that will be achieved through the implementation of the Project are outlined
below:
Goal 1.0 Eradicate blighting influences in the Project Area.
Objective 1.4 Facilitate private investment in the Downtown commercial area.
Task Utilize Agency authority to acquire and assemble appropriate Downtown
redevelopment sites for disposition and redevelopment.
Goal 2.0 Return land to productive use through a coordinated program of new
construction, rehabilitation, and supportive public improvements in the Project
Area.
Objective 2.1 Facilitate appropriate development of vacant and underutilized sites in the
Project Area.
Task Utilize Agency authority to acquire and assemble appropriate development
sites for disposition and redevelopment in the Project Area.
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The City Council is pleased to invite your participation in:
NOTICE OF CITY COUNCIL PUBLIC HEARING TO CONSIDER THE SALE OF 9814
WASHINGTON BOULEVARD TO THE JAZZ BAKERY PERSUANT TO A COMMITMENT LETTER
AND SECTION 33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
WHO: Staff Contact – Joe Susca, Redevelopment Project Manager,
310.253.5763 or joe.susca@culvercity.org
WHAT: Approval of a Commitment Letter and 33433 Report for the sale of 9814 Washington Blvd. to the Jazz
Bakery for construction of a live performance theatre. A copy of the report pursuant to Section 33433 of
the California Health and Safety Code, preliminary conceptual plans and related documents are available
for public review at the Community Development public counter, at City Hall, third floor.
WHERE: City Hall - Mike Balkman Council Chambers,
9770 Culver Boulevard, Culver City, CA 90232
WHEN: Monday, January 30, 2012 – 7:00 PM
WHY: To obtain public comment and input on the land sale and 33433 Report.
More Info: The staff report will be available for viewing on the City’s website on or after January 25, 2012, at
www.culvercity.org/agendas or at the City Hall Community Development Department, or the Julian Dixon
Library, 4975 Overland Avenue, Culver City. Persons unable to attend the meeting who wish to submit
written comments may do so by any of the following means to Joe Susca, Redevelopment Project
Manager BEFORE Noon on January 30, 2012:
1. By LETTER (Culver City-City Hall, Redevelopment Division,
9770 Culver Blvd., Culver City, CA 90232);
2. By FAX to 310-253-5779
3. By E-MAIL to joe.susca@culvercity.org
4. By PHONE at 310-253-5763
City Council meetings can be viewed live on Channel 35 by most Time-Warner subscribers. To view the
meetings live over the Internet please visit www.culvercity.org/agendas.
You may sign up for the City’s E-Mail Notification System by visiting www.culvercity.org and selecting “Subscribe” from
the very top right of the webpage or by calling the City Clerk’s Office at 310-253-5851. A U.S. Post notification system is
also available. They are both FREE!
This notice was mailed on January 23, 2012
Sale of 9814 Washington
Boulevard to the
Jazz Bakery
City of Culver City
Official Courtesy Notification
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ATTACHMENT 4NOTICE OF CITY COUNCIL PUBLIC HEARING TO CONSIDER THE CONVEYANCE
OF 9814 WASHINGTON BLVD TO THE JAZZ BAKERY PURSUANT TO SECTION
33433 OF THE CALIFORNIA HEALTH AND SAFETY CODE
YOU ARE INVITED to learn more about and participate in a City Council public hearing on
January 30, 2012 concerning the following:
Consideration of an agreement to convey 9814 Washington Blvd (the “Site”) from the City to the
Jazz Bakery for construction of a live performance theatre. The Site will be conveyed pursuant
to Section 33433 of the California Health and Safety Code and a Commitment Letter.
The above proposed project requires the following action:
33433 Report and Commitment Letter:
Consideration of a report pursuant to Section 33433 of the California Health and Safety Code
and a Commitment Letter between the Developer and the City of Culver City. The report and
Commitment Letter outline the terms and conditions of the Site’s conveyance.
The January 30, 2012 the public hearing will convene at 7:00 PM in the Mike Balkman Council
Chambers at City Hall, 9770 Culver Boulevard. The Council Chambers are accessible to
disabled persons and public parking is available in the City Hall parking structure from
Duquesne Avenue. City Hall is served by the Culver CityBus. For information regarding the
bus schedule, you may call (310) 253-6500. Other items may precede this item on the agenda.
For more information, to review related project documents, or to submit written comments on
the 33433 Report, Commitment Letter or pending conveyance of the Site, please write or call
Joe Susca, Redevelopment Project Manager, Culver City Community Development
Department, Post Office Box 507, Culver City, California 90232, (310) 253-5763. It is advisable
to call prior to visiting City Hall to be certain that appropriate staff will be available. City Hall
business hours are 7:30 AM to 5:30 PM, Monday through Friday, except alternate Fridays and
holidays. City Hall shall be closed on Friday, January 27, 2012.
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