AGENDA REPORT
Meeting Date: November 19, 2024
Item Number:
To: Honorable Mayor & City Council
From: Jeff S. Muir, Director of Finance
Subject: RESOLUTION OF THE COUNCIL OF THE CITY OF BEVERLY HILLS
APPROVING A REIMBURSEMENT AGREEMENT AND THE
ENGAGEMENT OF CERTAIN FINANCING PROFESSIONALS IN
CONNECTION WITH THE PROPOSED FORMATION OF
COMMUNITY FACILITIES DISTRICT 2025-1 (ONE BEVERLY HILLS) Attachments: 1. Resolution
2. Reimbursement Agreement
RECOMMENDATION
It is recommended that City Council adopt the resolution approving the reimbursement agreement with Oasis BH, LLC, a Delaware limited liability company for the reimbursement of bond issuance costs related to the proposed formation of a Community Facilities District being established in order to finance eligible costs related to the One Beverly Hills development project, and authorizing the City Manager or the Director of Finance to negotiate and execute fee letters or agreements with the firms as may be necessary to complete the legal and financial work on behalf of the City.
INTRODUCTION
The One Beverly Hills (OneBH) project includes the renovation and construction of multiple residential and commercial buildings containing approximately 1.9 million square feet of floor area. The project is proposed to include 255 condominium units, a new luxury hotel, renovation of the existing Beverly Hilton Hotel, and 12.7 total acres of open space, of which approximately 4.5 acres will be publicly accessible botanical gardens.
Construction of the project is underway and is anticipated to last about four years.
The developer, Oasis BH, LLC, a Delaware limited liability company has approached the City to assist in the establishment of a Community Facilities District (“CFD”) to help fund construction of certain eligible public infrastructure through the issuance of tax-exempt Meeting Date: November 19, 2024
bonds secured by a special tax imposed on the properties within the CFD. There are a variety of steps involved in the formation of a CFD and specifics of the proposed CFD will be brought back to the City Council at a future Council meeting as detailed below. The first step in the CFD formation process is to enter into a reimbursement agreement with the developer.
DISCUSSION
The Deposit and Reimbursement Agreement will ensure all CFD formation costs are borne by the developer. The proposed agreement would require the developer to deposit $100,000 with the City to offset costs incurred on the project and includes provision for subsequent deposits as necessary.
CFD Formation Team
Due to the complexity of the CFD formation process and any subsequent bonded indebtedness, the City will rely on its financing team of experts and consultants that have worked on prior City bond issuances. The current team is as follows:
1. Financial Advisor— Fieldman, Rolapp and Associates (James Fabian) Assists with all aspects of the proposed CFD formations and preparation for bond issuance.
2. Bond Counsel / Disclosure Counsel — Stradling Yocca Carlson & Rauth (Brian Forbath and Lawrence Chan) Provides legal advice and consultation related to the formation of the proposed CFDs, prepares associated legal documents, and prepares the official statement and continuing disclosure agreement for the bond market.
3. Special Tax Consultant— Goodwin Consulting Group (Susan Goodwin) Collects various data on the tax base in the proposed CFDs and assists in the development of appropriate special tax rate and method of apportionment, CFD Boundary Map, and Special Tax Lien.
4. Underwriter— To be determined at a later date
Assists in the structuring of the bond issue, including marketing and underwriting the bonds.
Next Steps – Tentative CFD Formation Schedule
Staff anticipates scheduling the next set of formal actions for City Council consideration during the first half of calendar year 2025, as follows:
First Quarter of 2025
• Resolution approving CFD boundary map and authorizing recordation of the map • Resolution of Intention to Establish CFD
• Resolution of Intention to Incur Bonded Indebtedness
Approximately 30-60 Days Later
• Public Hearing and resolution forming the CFD
• Call and conduct landowner-voter election and declare results • Give first reading to ordinance authorizing levy of the special tax within the CFD Meeting Date: November 19, 2024
Meeting Following Public Hearing
• Second reading of Special Tax Ordinance
FISCAL IMPACT
Approval of the agreement will provide the City a mechanism for receiving developer deposits to recover City costs associated with the possible formation of a Community Facilities District at the OneBH development project. All costs associated with the formation of a Community Facilities District are borne by the developer.
Jeff S. Muir
Director of Finance
Approved By
Attachment 1
B0785-0001\3031398v2.doc
RESOLUTION NO. 24-_____
A RESOLUTION OF THE COUNCIL OF THE CITY OF
BEVERLY HILLS APPROVING A REIMBURSEMENT
AGREEMENT AND THE ENGAGEMENT OF CERTAIN
FINANCING PROFESSIONALS IN CONNECTION WITH THE
PROPOSED FORMATION OF COMMUNITY FACILITIES
DISTRICT NO. 2025-1 (ONE BEVERLY HILLS)
WHEREAS, at the request of Oasis BH, LLC, a Delaware limited liability company (the “Developer”), the City of Beverly Hills (the “City”) is considering the formation of a community facilities district to be designated “Community Facilities District No. 2025-1 of the City of Beverly Hills (One Beverly Hills)” (the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California; and
WHEREAS, the Developer and the City Council desire to enter into the reimbursement agreement (the “Reimbursement Agreement”) presented at this meeting pursuant to which the Developer will agree to provide funds to the City from time-to-time to pay the fees of the certain consultants in connection with the formation of the District and the issuance of bonds, as requested by the City, with such payments to be reimbursed to the Developer if the bonds of the District are issued; and
WHEREAS, the City Council desires to authorize staff to execute such engagement letters or agreements as may be necessary to retain the consultants provided for herein; and NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Beverly Hills as follows:
Section 1. Each of the above recitals is true and correct.
Section 2. The City Council hereby approves the following firms to serve in the following capacities in connection with the formation of the District and if formed and authorized, the issuance of bonds of the District (i) Fieldman, Rolapp & Associates, Inc., as municipal advisor, (ii) Goodwin Consulting Group, as special tax consultant, and (iii) Stradling Yocca Carlson & Rauth LLP, as bond and disclosure counsel. Each of the City Manager and the Director of Finance of the City (the “Authorized Officers”) are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver such engagement letters or agreements as may be necessary to retain the foregoing consultants.
Section 3. The form of the Reimbursement Agreement by and between the City and the Developer presented at this meeting and on file in the office of the City Clerk is hereby approved and each of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Reimbursement Agreement substantially in the form hereby approved, with such additions thereto and changes therein as the officer or officers executing the same deem necessary to cure any defect or ambiguity therein, with such approval to be conclusively evidenced by the execution and delivery of such agreement.
Section 4. This Resolution shall be effective upon its adoption.
Docusign Envelope ID: 5F1A6352-1039-4D75-AA79-C74A08995F4B -2-
B0785-0001\3031398v2.doc
Section 5. The City Clerk shall certify to the adoption of this resolution and shall cause this resolution and her certification to be entered in the Book of Resolutions of the Council of this City.
Adopted:
LESTER J. FRIEDMAN
Mayor of the City of Beverly Hills,
California
ATTEST:
By: (SEAL)
HUMA AHMED
City Clerk
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
_______________________________ ________________________________ LAURENCE S. WIENER NANCY HUNT-COFFEY
City Attorney City Manager
Docusign Envelope ID: 5F1A6352-1039-4D75-AA79-C74A08995F4B Certificate Of Completion
Envelope Id: 5F1A635210394D75AA79C74A08995F4B Status: Sent Subject: Complete with Docusign: BH Resolution approving deposit agreement (CLEAN).DOCX Source Envelope:
Document Pages: 2 Signatures: 1 Envelope Originator:
Certificate Pages: 2 Initials: 0 Sivan Levin
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Time Zone: (UTC-08:00) Pacific Time (US & Canada)
455 N. Rexford Drive
Beverly Hills, CA 90210
[email protected]
IP Address: 198.245.189.166
Record Tracking
Status: Original
11/12/2024 9:24:22 AM
Holder: Sivan Levin
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Laurence S. Wiener
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Using IP Address: 69.75.7.194
Sent: 11/12/2024 9:28:02 AM
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Resent: 11/13/2024 3:58:55 PM
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Viewed: 11/13/2024 6:40:46 PM
Signed: 11/13/2024 6:40:56 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Anthony Rodstein
[email protected]
Purchasing Services Manager
City of Beverly Hills (Finance Department)
Security Level: Email, Account Authentication
(None)
Sent: 11/13/2024 6:40:58 PM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Nancy Hunt-Coffey
[email protected]
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Electronic Record and Signature Disclosure:
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Lester J. Friedman
[email protected]
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Electronic Record and Signature Disclosure:
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Huma Ahmed
[email protected]
Security Level: Email, Account Authentication
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Electronic Record and Signature Disclosure:
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Shani Parker
[email protected]
Security Level: Email, Account Authentication
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Sent: 11/12/2024 9:28:00 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Jill Doohen
[email protected]
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 11/12/2024 9:28:01 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Witness Events Signature Timestamp
Notary Events Signature Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 11/12/2024 9:28:00 AM
Envelope Updated Security Checked 11/13/2024 1:57:45 PM Envelope Updated Security Checked 11/13/2024 1:57:45 PM Payment Events Status Timestamps
Attachment 2
S-1
4872-4894-2573v3/022362-0005
REIMBURSEMENT AGREEMENT
RE PROPOSED
COMMUNITY FACILITIES DISTRICT NO. 2025-1
OF THE CITY OF BEVERLY HILLS (ONE BEVERLY HILLS)
THIS REIMBURSEMENT AGREEMENT RE PROPOSED COMMUNITY FACILITIES DISTRICT NO. 2025-1 OF THE CITY OF BEVERLY HILLS (ONE BEVERLY HILLS) (the “Agreement”) dated as of November __, 2024, is entered into by and between the City of Beverly Hills, a general law city organized and existing under the laws and constitution of the State of California (the “City”), and Oasis BH, LLC, a Delaware limited liability company (the “Developer”).
R E C I T A L S :
A. The Developer is the indirect parent of BH Luxury Residences, LLC, which owns approximately 13.24 acres of land described in Exhibit A attached hereto (the “Property”) which the Developer desires to include within proposed Community Facilities District No. 2025-1 of the City of Beverly Hills (One Beverly Hills) (the “District”) to be established by the City pursuant to the Mello-Roos Community Facilities Act of 1982 (Government Code Section 53311 et seq.) (the “Act”).
B. The City and the Developer are desirous of entering into this Agreement in order to provide a mechanism by which the Developer may advance certain amounts related to the cost of formation of the District and the issuance of bonds, and to provide that such District, if formed and the bonds are issued, will reimburse the Developer for the amounts advanced hereunder from the proceeds of the bonds.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows:
1. Recitals. Each of the above recitals is incorporated herein and is true and correct.
2. Potential Formation of the District and Issuance of Bonds. (a) At the request of the Developer, the City will undertake to form the District.
The City will retain, at the Developer’s expense, the necessary consultants to analyze and conduct proceedings for the proposed formation of the District and issuance of bonds, including an engineer, special tax consultant, municipal advisor, bond counsel, market absorption consultant, appraiser and other consultants deemed necessary by the City. In addition, City staff time spent in connection with the formation of the District and the issuance of bonds, including a reasonable allocation of City overhead expense related thereto, shall be at Developer’s expense. (b) In order to begin the process of analyzing the potential formation of the District, the Developer has advanced to the City a sum totaling $100,000.00. From time to time, the Developer shall make additional advances to the City within 15 days following receipt from the City’s Finance Director of a reasonable request for an additional advance to cover the costs of forming the District and/or issuing bonds. In the event the Developer does not deliver the requested amount to the City within such 15-day period, the City will have no obligation to proceed with the analysis, District formation, or bond issue unless and until such additional advance is received. The Developer shall have the right to notify the City at any time, in writing, of its intention to abandon the formation of the District or the issuance of bonds. Upon receipt of such notice, the City shall instruct its consultants to cease work as soon as practicable. The Developer shall be responsible to pay all costs and expenses incurred by the City or any City consultant or advisor prior to the date on which the City’s consultants are notified of the Developer’s notice of abandonment. Notwithstanding a decision of the Developer to abandon the formation of the District or the issuance of bonds, the City may, in its sole discretion, elect to proceed with formation of the District and/or the issuance of bonds with funds other than those of the Developer; provided, however, that, in executing this Agreement, the Developer shall not be deemed to have waived their right to object to the formation of the District or the issuance of bonds. (c) The City’s Director of Finance will provide to the Developer within 10 business days of the receipt of a written request a summary of how the advances have been spent and the unexpended balance remaining. The amounts advanced by the Developer will be reimbursable to the Developer, without interest, from the proceeds of bonds issued by the District when and if the District is formed (promptly thereafter). In the event that bonds are not issued to provide a source of reimbursement to the Developer, the City shall have no liability to the Developer to reimburse them for any of amounts previously advanced by the Developer and expended by the City in accordance with this Agreement.
3. Reimbursement Procedure. In accordance with Government Code Section 53314.9, if the qualified electors of the proposed District do not approve the proposed special tax to be levied within the District, the City shall promptly return any funds which have been advanced by the Developer which are not committed for or expended on the purposes set forth in Section 2 above by the time of the election. In addition, the City shall promptly return any funds which have been advanced by the Developer which are not committed or expended on the purposes set forth in Section 2 if funds remain after the bonds have been issued, or if proceedings for the formation of the District or issuance of bonds is terminated. All such returned funds shall be without interest, and shall be returned as soon as is reasonably possible.
4. Abandonment of CFD Formation Process. The Developer understands that any formation of the District and issuance of bonds shall be in the sole discretion of the City. No provision of this Agreement shall be construed as a promise, warranty or agreement by the City to form the District, to annex the Property to any other district or improvement area of the City or to issue any bonds. The City shall have no liability to Developer for its decision not to annex the Property to any other district or improvement area, form the District or issue bonds.
5. Indemnification and Hold Harmless. The Developer hereby assumes the defense of (with counsel acceptable to the City), and indemnifies and saves harmless, jointly and severally, the City and each of its officers, directors, employees and agents, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or arising out of any acts or omissions taken by the Developer or any of the Developer’s officers, employees, contractors and agents with respect to the formation of the District or the issuance of the bonds, except to the extent of the City’s gross negligence or willful misconduct.
6. Release. Except in the event of the City’s gross negligence or willful misconduct, the Developer hereby fully and irrevocably releases, waives, acquits and discharges the City and each of its officers, directors, employees and agents of and from any and all actions, damages, claims, losses or expenses of every type and description, whether known or unknown, existing or potential, anticipated or unanticipated, or which may hereafter be sustained, by reason of, or arising out of, or related to this Agreement, the formation of the District or the issuance of the bonds. To this end, the Developer expressly waives and relinquishes all rights and benefits under California Civil Code Section 1542, which states as follows: "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
7. Notices. Any notice to be provided pursuant to this Agreement shall be delivered to the following addresses:
Developer Oasis BH, LLC
c/o Cain Development LP
100 N. Crescent Drive, 3rd Floor
Beverly Hills, CA 90210
Attention: Larry Green
Email: [email protected]
With a copy to: Oasis BH, LLC
c/o Cain International, LP
767 Fifth Avenue, 17th Floor
New York, NY 10153
Attention : Zach Aries
Email : [email protected]
City: City of Beverly Hills
455 North Rexford Drive
Beverly Hills, CA 90210
Attn: Director of Finance
Telephone: (310) 285-2423
Email: [email protected]
With a copy to: Stradling Yocca Carlson & Rauth LLP
660 Newport Center Drive, Suite 1600
Newport Beach, CA 92660
Attention: Brian Forbath, Esq.
Telephone: (949) 725-4193
Email: [email protected]
Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party.
8. Assignment. The Developer may assign its interest in this Agreement at any time provided, however, that the Developer shall provide written evidence of any assignment to the City.
9. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent permitted by law.
10. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the matters provided for herein.
11. Amendments. This Agreement may be amended or modified only by written instrument signed by all parties.
12. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
13. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California.
14. No Third Party Beneficiaries. No person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the City, the District, and the Developer, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
15. Singular and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine.
16. Termination. This Agreement shall terminate and be of no further force and effect on December 1, 2029 unless expressly amended by the parties; provided, however, that the Developer’s obligations under Sections 5 and 6 shall survive the termination and the City’s obligation to provide reimbursement in accordance with Section 3 for expenses incurred prior to the termination date shall also survive termination.
17. Agreement Not a Debt or Liability of the City. The parties acknowledge and agree that this Agreement is not a debt or liability of the City, as provided in Government Code Section 53314.9. No member of the City Council or any officer, agent, or employee of the City shall be personally liable hereunder.
[Signatures follow]
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written.
CITY OF BEVERLY HILLS, a political subdivision
of the State of California
By:
Jeff S. Muir, Director of Finance
Oasis BH, LLC, a Delaware limited liability company
By:_ ___________
Johnathan Goldstein, Director
CERTIFICATE REGARDING AUTHORIZED SIGNATORY
In my capacity as __________________ of Oasis BH, LLC, a Delaware limited liability company, I hereby certify that Jonathan Goldstein is a duly appointed Director of Oasis BH, LLC, and he is duly empowered and authorized to execute this Agreement on behalf of Oasis BH, LLC and upon such execution this Agreement shall be binding and enforceable against Oasis BH, LLC.
Date: ____________, 2024 By: _________________________
Name: Zachary Aries
Title: _________________________
Oasis BH, LLC
A Delaware limited liability company
APPROVED AS TO FORM:
CITY ATTORNEY
By:
Laurence Wiener, City Attorney
A-1
4872-4894-2573v3/022362-0005
EXHIBIT A
DESCRIPTION OF PROPERTY
Real property in the City of Beverly Hills, County of Los Angeles, State of California, described and shown in Vesting Tentative Tract Map 83356.