AGENDA REPORT
Meeting Date: September 1, 2026
Item Number:
To: Honorable Mayor and City Council
From: Logan Phillippo, Real Property Development Manager Subject: OPTION TO GROUND LEASE BY AND BETWEEN THE CITY OF
BEVERLY HILLS AND ROBERTSON SUNFLOWER LLC
REGARDING CITY-OWNED PROPERTY AT 327-335 SOUTH
ROBERTSON BOULEVARD
Attachment: 1. Option to Ground Lease Agreement
RECOMMENDATION
Staff recommends City Council approve the Option to Ground Lease by and between the City of Beverly Hills and Robertson Sunflower LLC regarding City-Owned property at 327- 335 South Robertson Boulevard (the “Option Agreement”).
INTRODUCTION
The City is currently in an exclusive negotiation agreement approved by City Council on November 12, 2025, (the “ENA”) with developer West Hollywood Community Housing Corporation (“WHCHC” or the “Developer”) to build an affordable senior apartment project that now contemplates three levels of subterranean public parking (the “Project”) on Cityowned property at 327-335 South Robertson Boulevard (the “Property”).
The proposed option agreement allows WHCHC to meet threshold requirements for its upcoming 4% Low-Income Housing Tax Credit application through the California Tax Credit Allocation Committee, which is due on September 8, 2026. If WHCHC does not meet the September 8, 2026, deadline, WHCHC will risk losing another funding grant for the Project which is conditioned on applying for tax credits.
DISCUSSION
In order to meet State requirements set forth in the City’s Housing Element of the General Plan, the City has been exploring options to partner with developers to build affordable housing on City-owned properties, including the subject Property. During the ENA period, it is expected that WHCHC will conduct due diligence site investigations, seek community input in coordination with the City, and apply to various funding opportunities.
Meeting Date: September 1, 2026
Most recently, on July 28, 2026, Staff and WHCHC presented conceptual project plans during a community input meeting at the La Cienega Park Community Center where approximately 30-40 stakeholders attended. City Council attended the meeting as well to hear community input first-hand. More information about the meeting and Project plans can be found on the City’s Roberson Sunflower Project webpage at beverlyhills.org/robertsonsunflower.
Staff anticipates (i) that the City would ground lease the property to WHCHC with ground lease payments made from the project’s income, otherwise known as residual receipts, (ii) that the City would pay for the construction of the public parking component, currently estimated at approximately $9.6 million, and (iii) that WHCHC would obtain funding for the Project through various federal, state, and local sources.
On April 15, 2026, the Project was awarded $11,707,159.28 from a Los Angeles County Affordable Housing Solutions Agency (“LACAHSA”) funding opportunity and an additional $877,798 from a supplemental Westside Cities Council of Government (“WSCCOG”) opportunity for a total of $12,584,957.28 to date. WHCHC intends to submit a 4% LowIncome Housing Tax Credit application for an additional $18 million through the California Tax Credit Allocation Committee (“CTCAC”) by the September 8, 2026, deadline.
Staff has reviewed correspondence from LACAHSA to the Developer, which correspondence indicates that should the Developer not meet the CTCAC deadline, LACAHSA may not fund the Project with this award.
A threshold requirement of the CTCAC application requires that WHCHC demonstrate site control, which will eventually take place in the form an executed disposition and development agreement (“DDA”) and ground lease. Negotiations for both are under way but will not be complete prior to the tax credit application deadline. CTCAC will accept option agreements in lieu of a final ground lease and DDA. In order for WHCHC to meet application threshold requirements and thereby limit the risk of losing LACAHSA funding for the Project, Staff recommends City Council approve the proposed Option Agreement.
The Option Agreement includes the key terms listed below. • Option and Option Term: The City grants Robertson Sunflower LLC, an entity specific to the Project that is wholly controlled by WHCHC and otherwise referred to as WHCHC or Developer, an exclusive option to ground lease the Property with such option exercisable from September 1, 2026, through June 21, 2027. • Option Payment: In consideration of the grant of the option, WHCHC will pay a $100 option payment to the City.
• Exercise of Option: WHCHC may exercise the option during the option term provided that it will only be effective if WHCHC has provided evidence satisfactory to the City, in its sole and absolute discretion, of the following:
o WHCHC has received financing adequate to develop the Project and such financing shall include, in part, 4% Low Income Housing Tax Credits; o WHCHC has procured adequate insurance for the Property; o WHCHC has entered into a guaranteed maximum price (GMAX) contract to construct the Project;
Meeting Date: September 1, 2026
o WHCHC has completed final plans, received issuance of permits and entitlements, and shall have paid all related fees;
o The ground lease along with any customary leasehold mortgagability provisions with the City have been approved by all parties and WHCHC has recorded a customary regulatory agreement restricting the Project to affordable units only.
• Ground Lease: During the option term, WHCHC and the City shall negotiate the form of ground lease for the Property and both parties shall use good faith efforts to finalize the ground lease during the option term. The ground lease shall include the following:
o A term of at least 55 years;
o A ground lease payment equal to $6,050,000, or such higher amount supported by an appraisal, payable annually from the City’s pro rata share of residual receipts for the term of the ground lease; and o The obligation to pay the ground lease payment from residual receipts may be documented in a promissory note or in the ground lease.
Meeting Noticing
In addition to the standard noticing for all City Council meetings, Staff emailed notices on August 27, 2026, to those individuals who have signed up on the City’s project interest list.
FISCAL IMPACT
If WHCHC were to satisfy all conditions to exercise the option to ground lease during the option term, the City would be required to enter into a ground lease. This currently contemplates a term of 55 years and a ground lease payment equal to $6,050,000, or such higher amount supported by an appraisal, payable annually from the City’s pro rata share of residual receipts for the term of the ground lease. The obligation to pay the ground lease payment from residual receipts may be documented in a promissory note or in the ground lease.
During the option term, a final ground lease would be negotiated and presented to City Council for approval at a future date along with all other related documents.
Additionally, costs to construct the public parking component of the Project are currently estimated at approximately $9.6 million and will be paid by the City and/or Parking Authority. Estimates will be further refined and the process for determining the final construction amount to be paid by the City will be set forth in the future ground lease and related documents. City funding sources will be identified prior to approval by City Council.
If WHCHC were unable to meet any of the conditions in the Option Agreement described above, terms would be renegotiated and presented to City Council for approval or the project would not proceed.
Ryan Gohlich,
City Manager
Approved By
Attachment 1
1 OPTION TO GROUND LEASE
THIS OPTION TO GROUND LEASE (this “Agreement”) is entered into as of September 1, 2026 (the “Effective Date”), by and between Robertson Sunflower LLC, a California limited liability company (“Developer”), and the City of Beverly Hills (“City”).
WHEREAS, City is the fee owner of certain real property located at 327 S. Robertson Blvd. in Beverly Hills, California, more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”); and WHEREAS, Developer and City desire that City ground lease the Property to Developer on and subject to the terms and conditions contained herein and for the public purpose of constructing an affordable rental housing project on the Property on terms and conditions which the City will have reasonable discretion to specify (the “Affordable Rental Housing Project”) as further provided herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Option to Ground Lease. City hereby grants to Developer an exclusive option (the “Option”) to ground lease the Property on and subject to the terms and conditions contained in this Agreement.
2. Option Term. The rights conferred upon Developer shall commence on the Effective Date, and shall automatically terminate, without any further action of either party hereto, at five o’clock p.m. (5:00 p.m.) on June 21, 2027 (the “Option Term”).
3. Option Payment. In consideration for the grant of the Option, concurrently with Developer’s execution of this Agreement, Developer shall pay to City One Hundred Dollars ($100.00) (the “Option Payment”), which amount shall be nonrefundable to Developer.
4. Exercise of Option. Developer may exercise the Option by delivery of a written notice of exercise to City no later than the expiration of the Option Term; provided that, the effectiveness of the exercise of the option shall be subject to Developer having provided evidence satisfactory to City, in its sole and absolute but good faith discretion, that Developer has (1) received financing adequate to develop the Affordable Rental Housing Project, which financing shall include, in part, using 4% Low Income Housing Tax Credits, and any construction period financing will close concurrently with exercise the of Option, (2) procured insurance for the Property at levels customary for the City on comparable city owned properties, (3) entered into a GMAX construction contract to construct the Affordable Rental Housing Project, (4) completed final plans, received issuance of permits (or a permit ready to issue letter) and entitlements, and paid all related fees connected to the Affordable Rental Housing Project, other than building permit fees which are being paid with proceeds from the closing, (5) recordation of a customary regulatory agreement restricting the Affordable Rental Housing Project’s leasehold interest, which regulatory agreement shall provide for a minimum of approximately sixty-two (62) affordable rental units and a public parking component operated separately by the City or its assignee, and (6) the ground lease has been approved by all parties, including customary leasehold mortgagability provisions Docusign Envelope ID: 56DABD59-DC7A-8B3D-8007-CFBCC45CF488 2 with City, duly executed, to be effective upon the closing of the construction financing and recordation of a memorandum of lease. The date of Developer’s written notice shall be the “Option Exercise Date.”
5. Ground Lease. During the Option Term, the parties shall negotiate in good faith a form of ground lease for the Property (the “Ground Lease”). Developer shall prepare the initial draft of the Ground Lease. The parties shall use good faith, diligent efforts to finalize the Ground Lease during the Option Term. The execution of the Ground Lease (the “Closing”) shall occur substantially concurrently with the execution and delivery of the Ground Lease and the recording of the memorandum of lease (the “Closing Date”), unless the parties mutually agree to a different Closing date. The Ground Lease shall include the following terms, subject to compliance with Govt. Code Section 37380, together with such other terms as are mutually acceptable to the parties:
(a) A term of at least fifty-five (55) years from permanent loan closing; and (b) A ground rental payment equal to $6,050,000, or a higher amount supported by an appraisal, payable annually from the City’s pro rata share of residual receipts for the term of the Ground Lease. The obligation to pay the rental payment from residual receipts may be documented in a promissory note or in the ground lease.
6. Conditions to Closing; Closing of Financing. The obligation of City to execute and deliver leasehold possession of the Property pursuant to the Option of Developer to ground lease the Property shall be subject to the conditions to exercise of the Option in Section 4 being satisfied and such other conditions customarily and normally applied by City (including City’s intention to apply the standards and customs of California cities with similar affordable housing goals as City) in connection with affordable housing transactions which utilize ground leases such as: a delineation of improvements required in detail satisfactory to City; requirements that evidence of financing, satisfactory to the City, be in place; and requirements that a title insurer acceptable to City and Developer be prepared to insure leasehold title to the Property, including all portions thereof, subject only to encumbrances approved by Developer and a customary regulatory agreement in favor of City as described in Paragraph 4 hereof.
7. Assignment. Developer shall not assign, transfer or convey its rights and/or obligations under this Agreement and/or with respect to the Property without the prior written consent of City, which consent City may withhold in its sole and absolute discretion.
8. Modification. No modification, variation or amendment of this Agreement shall be effective unless it is in writing and is signed by all parties to this Agreement.
9. Entire Agreement. This Agreement contains the entire agreement between the parties and supersedes all prior agreements, with respect to the subject matter, and no warranties, agreements or representations have been made or shall be binding upon either party unless expressly set forth therein.
10. Construction. This Agreement shall be construed according to the laws of the State of California. As to any questions of ambiguous construction, the drafter of this Agreement shall be considered Developer and inferences shall be construed against the drafter.
Docusign Envelope ID: 56DABD59-DC7A-8B3D-8007-CFBCC45CF488 3 11. Authority. Each party has full power and authority to execute this Agreement and perform its respective obligations hereunder.
12. Counterparts. This Agreement may be executed in counterparts. [remainder of page left intentionally blank; signature page follows] Docusign Envelope ID: 56DABD59-DC7A-8B3D-8007-CFBCC45CF488 4 IN WITNESS WHEREOF, Developer and City have executed this Agreement as of the day and year first above written.
CITY:
City of Beverly Hills
By: ______________________________
Craig A. Corman, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Huma Ahmed, City Clerk Laurence S. Wiener, City Attorney APPROVED AS TO CONTENT:
______________________________
Ryan Gohlich, City Manager
______________________________
Logan Phillippo, Real Property
Development Manager
DEVELOPER:
Robertson Sunflower LLC,
a California limited liability company
By: West Hollywood Community Housing Corporation,
a California nonprofit public benefit corporation,
its sole member/manager
By: ____________________________
Jesse Slansky,
President and Chief Executive Officer
Docusign Envelope ID: 56DABD59-DC7A-8B3D-8007-CFBCC45CF488 A-1
230.022/728319
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
LOTS 39, 40 AND THE NORTHERLY 20 FEET OF LOT 41 OF TRACT NO. 6380, IN THE CITY OF
BEVERLY HILLS, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 69, PAGES 11 THROUGH 20, INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN 4333-010-901
Docusign Envelope ID: 56DABD59-DC7A-8B3D-8007-CFBCC45CF488 Certificate Of Completion
Envelope Id: 56DABD59-DC7A-8B3D-8007-CFBCC45CF488 Status: Sent Subject: Complete with Docusign: Option to Ground Lease - 327 S Robertson Blvd.pdf Source Envelope:
Document Pages: 5 Signatures: 3 Envelope Originator:
Certificate Pages: 2 Initials: 0 Jonathan Gernes
AutoNav: Enabled
EnvelopeId Stamping: Enabled
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
8/26/2026 10:40:18 AM
Holder: Jonathan Gernes
[email protected]
Location: DocuSign
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Jesse Slansky
[email protected]
President & CEO
West Hollywood Community Housing Corporation
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Logan Phillippo
[email protected]
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Andrew Bragin for
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Logan Phillippo
[email protected]
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Ryan Gohlich
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Craig A. Corman
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Huma Ahmed
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Denise Garcia
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Keith Sterling
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Megan Grilley
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