City of Culver City, California
Redevelopment Agency Agenda Item Report
RECOMMENDATION:
Staff recommends the Culver City Redevelopment Agency (“Agency”) approve the
Second Implementation Agreement with Axis Mundi RE II, LLC (“Axis Mundi”), for
the development of the Baldwin Site located at 12803-23 West Washington
Boulevard (the “Site”).
BACKGROUND:
On February 4, 2008, the Agency approved the Disposition and Development
Agreement (DDA) with Axis Mundi which provides for the sale of the Site to Axis
Mundi and the subsequent development of the Site by Axis Mundi. The
development proposed for the Site will create: a 37,000 square foot 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, extensive environmentally friendly “green” features which incorporates
the public art component into the building design. The DDA contained a Schedule of
Performance, which listed tasks and dates which the parties must achieve leading to
the sale and development of the Site. The Schedule of Performance required the
close of escrow by December 10, 2008.
On December 8, 2008, the Agency approved an Implementation Agreement with
Axis Mundi, which revised the Schedule of Performance, allowing Axis Mundi six
more months to close escrow, to June 10, 2009. The revised schedule was
necessary as a result of the current economic crisis. The equity investors for the
project withdrew and construction financing was not available.
Meeting Date: 05/04/09 Item Number: A-2
AGENDA ITEM: Approval of a Second Implementation Agreement with Axis
Mundi RE II, LLC, for Development of the Baldwin Site (12803-23 West
Washington Boulevard)
Contact Person/Dept.: John Fisanotti Phone Number: (310) 253-5767
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification:
Master E-Mail Notification List (04/29/09)
Department Approval:
Sol Blumenfeld (04/23/09)
Executive Director Approval:
Jerry B. Fulwood (04/29/09)
Chief Financial Officer Approval:
Jeff Muir (by N. Kimball) (04/29/09)
City of Culver City, California
Redevelopment Agency Agenda Item Report
On March 10, 2009, Axis Mundi wrote to the Assistant Executive Director to request
another six month extension for the close of escrow in the Schedule of Performance.
The request was made necessary because the continuing economic conditions have
continued to delayed Axis Mundi’s ability to secure financing for the project.
DISCUSSION:
Recent economic events have affected Axis Mundi’s ability to line up the financing
needed to meet its obligations in the Schedule of Performance to the DDA. Axis
Mundi has requested a six month extension to the close of escrow, and staff
recommends the Agency approve the request. The Second Implementation
Agreement, which is enclosed in the Agenda packet as Attachment No. 1, revises
the close of escrow date in the Schedule of Performance from June 10, 2009 to
December 10, 2009. It is hoped that the extra time afforded Axis Mundi to close
escrow will be sufficient to obtain the necessary financing in order to complete the
sale and begin construction of the project.
The alternative to not approving the Second Implementation Agreement is to allow
the DDA as amended to stand as is. Under this scenario, the contractual agreement
between the parties will remain unchanged even though it is highly doubtful that Axis
Mundi will be able to close escrow by June 10, 2009. The DDA has contingent
provisions in this event, but the cost to the Agency and the potential delay could be
much greater than the six month delay proposed in the Second Implementation
Agreement. Should the Agency determine to not approve the Second
Implementation Agreement, the probability would increase that the Agency would
have to start its efforts over to market, sell and develop the Site.
FISCAL ANALYSIS:
Approval of the proposed Second Implementation Agreement does not change the
financial terms of the DDA. It does give the developer more time to arrange
financing and to close escrow on the purchase of the Site from the Agency. If the
Second Implementation Agreement is approved, then the land sale proceeds the
Agency expects to realize will be received in Fiscal Year 2009-10, which is one year
later than originally expected.
Barring any further time extensions, the Agency will receive $3.2 million in land sale
proceeds no later than December 2009. In June 2007, the City loaned $9 million to
the Agency, to be repaid from land sale proceeds. The Agency has made one
payment so far and the loan balance is currently $7 million. Proceeds received from
the sale of the Site are expected to be used to re-pay the loan to the City. A delay of City of Culver City, California
Redevelopment Agency Agenda Item Report
six months will make it more difficult for the Agency to make a repayment in fiscal
year 2008-09, but not approving the Second Implementation Agreement does not
necessarily ensure that the land sale proceeds will be received any sooner by the
Agency, and could in fact, lead to much lengthier delays in selling the property.
ATTACHMENTS:
1. Second Implementation Agreement
MOTION:
That the Redevelopment Agency:
1. Approve the Second Implementation Agreement with Axis Mundi, RE II, LLC
for the development of the Baldwin Site (12803-23 West Washington Boulevard);
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.
MEETING DATE: 05104/09
AGENDA ITEM: Authorization for the Executive Director to Execute a
Second Implementation Agreement with Axis Mundi RE II, LLC, for
Development of the Baldwin Site (12803-23 West Washington Boulevard.)
ATTACHMENT
Pages
1. Second Implementation
Agreement 1-7SECOND IMPLEMENTATION AGREEMENT
TO THE
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
THE CULVER CITY REDEVELOPMENT AGENCY
and
AXES MUNDI RE II, LLCSECOND IMPLEMENTATION AGREEMENT TO THE
DISPOSITION AND DEVELOPMENT AGREEMENT
This SECOND IMPLEMENTATION AGREEMENT TO THE DISPOSITION AND
DEVELOPMENT AGREEMENT ("Second Implementation Agreement") is dated as of
2009, and is entered into by and hetweeu the CULVER CITY REDEVELOPMENT
AGENCY, a public body, corporate and politic rAgency"), and AXIS MUNDT RE II, LLC, a California
limited liability company ("Developer"), with reference to the following facts:
RECITALS
A. The Agency and Developer entered into that certain Disposition and Development Agreement dated
as of February 7, 2008, and that First Implementation Agreement to the Disposition and Development
Agreement dated as of December 11, 2008, pertaining to the development and construction of a high
quality 37,300 square foot commercial/office condominium building ("the Project"). The DDA is
incorporated herein by this reference. DDA as used herein shall mean, refer to and include the DDA,
as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments
thereto (which are hereby incorporated herein by this reference). Any capitalized term not defined
herein hall have the meaning ascribed to such term in the DDA_
B. Due to the continuing turmoil in the national economy, Developer has requested, and the Agency has
agreed, to adopt a revised financing, development and construction schedule for the Project, as set
forth in the Second Revised Schedule of Performance, attached hereto as Attachment No. 1.
C. Developer and Agency additionally agree that the Executive Director shall be authorized to approve
an additional three (3) month extension for close of escrow and other milestones in the Second
Revised Schedule of Performance, subject to certain conditions as set forth herein.
NOW, THEREFOR, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
I. Recitals. The Recitals and attachments referenced above are hereby incorporated by reference into
this Second Implementation Agreement and adopted by the parties to this Second Implementation
Agreement as true and correct.
2, Schedule Changes. The Developer's obligations regarding the schedule of development and
construction of the Project shall be in accordance with the Second Revised Schedule of Performance,
attached hereto as Attachment No. 1. The Second Revised Schedule of Performance shalt supersede
in its entirety the Revised Schedule of Performance attached to the First Implementation Agreement
as Attachment No.1 and any conflicting language in the DDA.
3. Project Status Review. On or about October 16, 2009, Developer must attend a "Project Status
Review" meeting with Agency staff at the principal office of the Agency, located at 9770 Culver City
Boulevard, Culver City, California 90232-0507, during which time Developer shall disclose to
Agency staff the current status of the Project's financing and development.
4. Request for Three Month Extension. If Agency staff and Developer mritually conclude that a three
Final \Iasi=
2month extension of milestones in the Second Revised Schedule is necessary, then the Executive
Director shall be authorized to approve an additional three (3) month extension of milestones in the
Second Revised Schedule, subject to the following condition(s) precedent: On or before November
10, 2009, but after the Project Status Review meeting, Developer must submit a written request to the
Executive Director of the Agency for the extension ("Request for Extension") along with a copy of
the commitment or commitments obtained by the Developer for the mortgage loan or loans (for both
construction financing and take out financing, if a condition to funding the construction loan) to
assist in financing the cost of the improvements to be developed on the Site in accordance with the
Scope of Development ("Construction Loan"), certified by the Developer to be a true and correct
copy or copies thereof. The commitment for financing shall be in such form and content acceptable
to the Executive Director as reasonably evidences a firm cotanaitment normally issued by an
institutional lender. The Executive Director shall approve or disapprove such Request for Extension
within ten (10) days of Developer's submittal. Developer acknowledges, understands, and agrees that
nothing herein is intended to supersede, modify, replace, reduce or delete any evidence of financing
required in the DDA or the Second Revised Schedule of Performance_
5. Binding on Successors and Assigns. This Second Implementation Agreement and all of the terms
and conditions herein shall be binding upon and inure to the benefit of the successors, assignees,
personal representatives, heirs and legatees of the parties.
6. DDA in Full Force and Effect. Except as otherwise expressly provided herein, the terms and
conditions of the DDA shall remain unmodified and in full force and effect.
7. Further Assurances. The parties agree to execute such other documents and to take such other action
as may be reasonably necessary to further the purposes of this Second Implementation Agreement.
8. Third Party Beneficiaries. The parties to this Second Implementation Agreement acknowledge and
agree that the provisions of this Second Implementation Agreement are for the sole benefit of Agency
and Developer, and not for the benefit, directly or indirectly, of any other person or entity.
9_ Effectiveness of this Agreement. This Second Implementation Agreement shall not be effective
unless and until both of the following conditions have been satisfied:
a. This Second Implementation Agreement has been duly approved by the Agency; and
b. This Second Implementation Agreement has been duly executed by the Agency and
Developer.
SIGNATURES ON NEXT PAGE
SPACE INTENTIONALLY LEFT BLANK
Final Version
3By: James Sniff & LLC,
a CaliforniN limited liability company,
Member
The date ofthis Second Implementation Agreement shall be the date it is signed by Agency.
DEVELOPER
AXIS NICUNDI RE II, LLC, a California limited
liability company
By Waiter N. Marks Realty Company,
a California corporation, Member
CULVER. CITY REDEVELOPMENT AGENCY
Jetty Fidwood
Executive Director
APPROVED AS TO FORM:
KANE, BALLMEFt & BERKMAN
B_ Y: Muiray 0. Kane
Agency General CounselATTACHMENT NO. 1
SECOND REVISED SCHEDULE OF PERFORMANCE
L GENERAL PROVISIONS
1. Opening of Escrow_ Opening of escrow Within five (5) days of the Agency's
shall occur. execution of the DDA.
2. Submission - Architect, Landscape Architect
and Civil Engineer. Developer shall submit
to Agency for approval of the names and
qualifications of its architect, landscape
architect, and civil engineer.
Within seven (7) days of Agency
execution of the DDA.
3. Approval - Architect, Landscape Architect Within seven (7) days following receipt
and Civil Engineer. Agency shall approve by the Agency.
or disapprove the architect, landscape
architect, and civil engineer.
H. ACQUISTION
1. Submission of First Deposit. Developer shall
deposit into escrow the First Deposit in the
amount of $160,000.
2. Submission of Second Deposit_ Developer
shall deposit into escrow the Second Deposit
in the amount of $640,000.
1. Submission of Final Deposit_ Developer
shall deposit into escrow the Second Deposit
in the amount of $2,400,000.
4. Close of Escrow. Developer shall satisfy all
conditions precedent to conveyance of the
Site listed under Sections 215(a)(1)-(10) and
216(a)(1)-(5) of the DDA.
HI. DEVELOPMENT
Submission — Schematic Level Drawings.
Developer shall prepare and submit to
Agency the Schematic Level Drawings for
the Improvements on the Site.
Within five (5) business days after
execution of the DDA by the Agency
and upon opening of Escrow.
No later than sixty (60) days prior to
Close of Escrow.
At least two (2) business days prior to
Close of Escrow.
No later than December 10, 2009.
Within thirty (30) days of execution of
the DDA by the Agency.
Versian.1
Attachment No. 1
Page 1 of 3
52. Approval - Schematic Level Drawings_ Within seven (7) business days after
Agency shall approve or disapprove the receipt by Agency.
Schematic Level Drawings for the
Improvements on the Site.
3. Submission - Preliminary Construction Within ninety (90) days after Agency's
Drawings, and Preliminary Landscaping and approval of Schematic Level Drawings.
Grading Plans. Developer shall prepare arid
submit to Agency preliminary construction
drawings and preliminary landscaping and
grading plans for the Improvements on the
Site.
4. Approval - Preliminary Construction Within fifteen (15) business days after
Drawings, and Preliminary Landscaping Land receipt by Agency.
Grading Plans. Agency shall approve or
disapprove the preliminary construction
drawings and preliminary landscaping and
grading plans for the Site.
Submission - Local Storm Water Pollution No later than September 14, 2009.
Prevention Plan ("LSWPPY') and Standard
Urban Storm Water Mitigation Plan
("SUS1VIP"). Developer shall obtain written
approval from the City Engineer or designee
of a LSWPPP and SUSMP for the
Improvements on the Site.
6. Submission - Final Construction Drawings No later than October 12, 2009.
and Landscaping and Finish Grading Plans
Developer shall prepare and submit the final
construction drawings and specifications and
the final landscaping and finish grading
plans for the Improvements on the Site.
7. Approval - Final Construction Drawings and Within seven (7) business days after
Landscaping and Finish Grading Plans. receipt by Agency.
Agency shall approve or disapprove the final
construction drawings and specifications and
the final landscaping and finish grading
plans for the Improvements on the Site.
Version 1
Attachment No. 1
Page 2 of 3
6No later than sixty (60) days prior to
Close of Escrow.
8. First Submission of Evidence of Financing.
Developer shall submit to Agency for
approval the First Submission of evidence of
financing in accordance with Section 214 of
the DDA.
9. Building Permit Developer shall obtain a
building permit for the Project.
10. Approval of Financing. Agency shall
approve or disapprove the First Submission
of evidence of financing with respect to the
Site, and shall so notify Developer.
11. Second Submission of Evidence of
Financing. Developer shall submit to
Agency for approval the Second Submission
of evidence of financing in accordance with
Section 214 of the DDA.
12. Approval of Financing. Agency shall
approve or disapprove the Second
Submission of evidence of financing with
respect to the Site, and shall so notify
Developer.
13. Site Mobilization. Developer shall
commence Site mobilization.
14_ Site Preparation. Developer shall commence
Site preparation, including utility relocation.
15. Commencement of Construction/ Site
Excavation. Developer shall commence
construction and Site excavation.
16. Completion of Construction. Developer
shall complete construction of all the
Improvements on the Site in accordance
with the DDA.
No later than thirty (30) days prior to
Close of Escrow.
With respect to the First Submission,
within fifteen (15) business days after
receipt of such submission by Agency.
No later than thirty (30) days prior to
Close of Escrow.
With respect to the Second Submission,
within fifteen (15) business days after
receipt of such submission by Agency.
Within seven (7) day after Close of
Escrow.
Within seven (7) days after Close of
Escrow.
Within seven (7) day after Close of
Escrow.
Within twenty-one (21) months after
Developer's contractor commences
construction.
Version I
Attachment No. 1
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