worthe
July 25, 2023
Mr. Greg Mirza-Avakyan
Associate Planner, City of Burbank Planning Department
150 N. Third Street
Burbank, California 91502
Email: gmirzaavakyan@burbankca. gov
Re: Ranch Lot- Assignment of the Development Agreement
Dear Greg,
VIA EMAIL
This letter is a response to your request for information on the financial condition of the proposed assignee of the Ranch Lot Development Agreement. The proposed assignee is Ranch Lot Studios Owner, LLC, a joint venture of Stockbridge Real Estate Fund Ill ("Stockbridge") and M. David Paul Ventures, LLC r'Worthe"). These are the same parties in the joint venture the City approved for the assignment of the NBC Master Plan Development Agreement in 2007 for The Burbank Studios. I have attached our prior assignment request as reference.
Since our letter dated November 26, 2007 requesting that assignment, Worthe has developed The Pointe and Second Century, adding to our sizable portfolio of properties in the City of Burbank. After 39 years of being a developer and property owner in the City, Worthe now owns approximately 3.5 million square feet of commercial properties (studios and office) in Burbank.
Today, Stockbridge's parent entity manages $33.9B of real estate assets and Fund Ill in particular has over $1.3B of assets.
The joint venture between Worthe and Stockbridge alone has developed The Pinnacle, The Pointe, and now Second Century pursuant to Development Agreements with the City over the last 22 years. We have an excellent track record in demonstrating compliance with all our development agreements, both financially and in construction of mitigation measures that fulfill our development obligations.
We look forward to adding the Ranch Lot Studios to our development portfolio in Burbank. Please call me if you have any questions.
Very truly yours,
~ >
~=·-··-··-Jeffrey M. Worthe
Worthe Real Estate Group
100 vVilshirc Boulevard, Suite 2100
Santa l'vlonica, CA 90401
worth e. com
3.10 .193 9653 t
Broker License #01198449
ATTACHMENT 5 - PAGE 1
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NY I 00 I 7
2 I 2 450 4000
FAX 2 I 2 450 3800
MENLO PARK
WASHINGTON, D . C
LONDON
PARIS
THOMAS PATRICK DORE, .JR.
2 I 2 450 4 I 36
PAT . DORE:@DPW.COM
FRANKFURT
MADRID
TOKYO
BEI.JING
HoNG KONG
November 26, 2007
Re: Request for Consent to Transfer of NBC Master Plan Development Agreement ("Development Agreement") dated March 19, 1997 between NBC Universal ("NBCU") and the City of Burbank ("City") Ms. Joy Forbes
Deputy City Planner
City of Burbank
333 East Olive Avenue
Burbank, CA 91502
Ms. Susan Georgina
Community Development Director
Community Development Department
333 East Olive Avenue
P.O. Box 6459
Burbank, CA 91502
Dear Ms. Forbes and Ms. Georgino:
In a letter dated November 15, 2007 (see Attachment #I), NBCU has submitted a request to the City for consent to the transfer of its remaining rights and obligations under the Development Agreement covering the property commonly known as the NBC Main Lot. This letter provides information relating to the qualifications and financial condition of the proposed transferee.
The proposed transferee, Catalina Media Development II, LLC, is a Delaware limited liability company formed and wholly owned by the Stockbridge Real Estate Fund III partnerships ("Stockbridge") and M. David Paul Ventures, LLC ("MDP") to acquire the ownership of the NBC Main Lot from NBCU. An organizational chart of the proposed transferee is attached (see Attachment #2).
Davis Polk & Wardwell and Gibson Dunn & Crutcher are counsel for the transferee.
ATTACHMENT 5 - PAGE 2
Ms. Joy Forbes
Ms. Susan Georgino 2 November 26, 2007
The transferee will initially invest equity of $65 million in the Project. As part of the purchase, Stockbridge has committed to have a $100 million net worth in support of certain guarantees made on behalf ofNBCU and will reserve approximately $190 million in capital as support for its acquisition loan. MDP will be the managing member responsible for construction, leasing, and managing the property, including day to day operational control of the property as it has for the PinnacJe and Catalina I projects. Stockbridge will have approval of major decisions such as financing and sale of the property.
The Stockbridge Real Estate Fund III partnerships are a real estate group of funds capitalized by public and private pension funds. To date, $900 million in capital commitments have been closed; the Stockbridge principals expect total capital commitments of$2 billion upon completion of its fund-raising process over the next six months. Since 1994, the senior Stockbridge professionals have invested in more than $8.5 billion of real estate on behalf of Paine Webber Group, Inc. and Stockbridge Real Estate Funds I and II.
M. David Paul Ventures and its principals have been active in the City of Burbank for 23 years and responsible for the development and acquisition of approximately 2.3 million square feet ofbuildings (all of which MOP retains an ownership position in), namely:
• 3500 W. Olive Avenue, 250,000 square feet*
• 3400 W. Olive Avenue, 395,000 square feet*
• 3300 W. Olive Avenue, 235,000 square feet"'
• 3800 W. Alameda Avenue, 424,000 square feet
• 4411 W. Olive Avenue, 41,000 square feet
• 3100 Thornton Avenue, 213,000 square feet*
• 2255 N. Ontario Street, 215,000 square feet"'
• 2233 N. Ontario Street, 96,000 square feet"'
• 3333 Empire Avenue, 165,000 square feet*
• 3355 Empire Avenue, 185,000 square feet*
• 2300 N. Ontario Street (Childcare), 8,600 square feet* Catalina Media Development II, LLC is the third joint venture between Stockbridge Real Estate Funds and M. David Paul Ventures. Previously the parties purchased and developed The Pinnacle, a 630,000 square foot media office building located in Burbank. In 2005, the parties purchased the nine-acre Catalina parcel from NBCU, which parcel was subject to the Development Agreement.
The City approved the assumption by the parties of certain responsibilities under the Development Agreement and phase one of the project is currently under construction. All applicable mitigation measures related to this development under the Development Agreement have been met.
• Developed
ATTACHMENT 5 - PAGE 3
Ms. Joy Forbes
Ms. Susan Georgina 3 November 26, 2007
Neither M. David Paul Ventures nor Stockbridge Real Estate Funds has ever filed for protection under State or Federal bankruptcy laws, nor have they been the subject of any involuntary bankruptcy action. Further, no real estate asset held by either company has been foreclosed upon or the subject of a deed in lieu by any lender or mortgagee.
The operating history and creditworthiness of the transferee demonstrate that it has the qualifications and financial capacity to consummate the Development Agreement and to fulfill the obligations set forth therein. If you have any questions concen1ing the capabilities or financial condition of M. David Paul Ventures or Stockbridge Real Estate Funds, kindly contact JeffWorthe at (310) 393"9653 or Terry Fancher at (415) 658"3344. Please feel free to address any other questions to the undersigned.
cc: Jeff W orthe
Kevin Cox
Mary Murphy
Tom Smith
Andrew Fossett
James L. Arnone
v~~
Thomas Patrick Dare, Jr.
ATTACHMENT 5 - PAGE 4
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Contents
I. OVERVIEW
II. TRACK RECORD
III. SELECTED CASE STUDIES
IV. STOCKBRIDGE PROFESSIONALS
2 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 14
Overview
Stockbridge
• Real estate investment advisor with offices in San Francisco, Los Angeles, New York and Chicago
• Currently managing over $2 billion of equity capital
• Principals have executed more than 500 real estate and capital markets transactions, with aggregate value of $50 billion
• Fully independent firm with no conflict of interest
• Broad experience investing in a wide range of real esta te product types throughout the U.S.
- Including office, retail, residential, hotel, mixed-use and land entitlement projects
• Strong network of operating partner relationships
• Deep knowledge of capital and financial markets
3 STOCK .BRIDGE
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ATTACHMENT 5 - PAGE 15
Track Record
All Prior Investments Since 1994 By Property Type
Other
9o/o
Office
42%
Residential
8°/o
Retail
2°/o
4 Hotel
10% Land
Entitlement
5°/o
Mixed-Use
24o/o
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ATTACHMENT 5 - PAGE 16
Track Record
All Prior Investments Since 1994 By Location
..; Stockbridge
Investments
5 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 17
Selected Case Studies
Catalina Site- Burbank, CA
• Joint venture with M. David Paul
Ventures, an experienced Burbank
developer and operator
• 9-acre land parcel fully-entitled for 1
million SF of office space
• Located in one of strongest submarkets in
Los Angeles, fueled by strength of
entertainment industry
As of September 2007, Burbank's
office vacancy rate was 2.4%
• Under construction for the first phase of
development
6 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 18
Selected Case Studies
The Pinnacle - Burbank, CA
• 624,000 SF Class A office development
built in two phases on 4.4 acres
• Located in Southern California media
district with limited new construction
and high barriers to entry
• Phase I completed in 2002 and sold in
2003
• Executed 16-year lease with Warner
Brothers for 100°/o of Phase II
Phase II sold in 2006
7 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 19
Selecte d Case Studies
California Office Portfolio
• 2.5 million square foot Class A portfolio
located in three major California office
markets:
- Los Angeles, San Francisco and
Orange County
• Secured an additional 141,000 SF of
office and R&D space for San Francisco
asset
• Sold portfolio in 2005
• 95% leased upon sale
• Retained a portion of land in Orange
County for residential development
8 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 20
Selected Case Studies
Note: Parcels acquired by Fund I are outlined in blue.
Park Place at Bay Meadows
San Mateo, CA
• 7-acre, 300,000 square foot mixed-use
development project
• Selected as Best N orthem California
Mixed-Use Development in 2003
• Located at the crossroads of major Bay
Area freeways
Bay Meadows Racetrack
• Prime, 83-acre infill redevelopment site
• Entitlements approved unanimously by
City Council in November 2005
• Endorsed by Sierra Club, Green Belt
Alliance and Building Trades Council
9 STOCK .BRIDG£
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ATTACHMENT 5 - PAGE 21
Selected Case Studies
Hollywood Park -Inglewood, CA
• 238-acre thoroughbred horse racetrack
• One of the largest undeveloped land areas
in greater Los Angeles
• Proposed redevelopment includes:
2,950 residential units
625,000 SF of retail space
- 300-room full-service hotel
• Entitlements on track for approval in 2008
10 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 22
Selected Case Studies
Treasure Island
San Francisco, CA
• Redevelopment of 490-acre site
•
•
Program includes:
6,000 residential units
250,000 SF of retail space
420 hotel rooms
- 30°/o affordable housing
One of the most environmentally
sustainable developments in the nation
San Francisco Board of Supervisors
endorsed redevelopment plan in 2006
Currently negotiating with the U.S. Navy
regarding property transfer
11 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 23
Stockbridge Professi onals
Terrence E. Fancher
Executive Managing
Director
Stephen M. Steppe
Executive Managing
Director
• Founding principal of Stockbridge and head of Stockbridge's opportunity fund business
• From 1994 to 2000, Managing Director in charge of Paine Webber's Real Estate Investment Banking Group and also responsible for PaineWebber's principal investment activities in real estate
• From 1989 to 1994, Managing Director in charge of Real Estate Group at Kidder, Peabody & Co.
• Past member of the Board of Governors of NAREIT
• A.B. in Economics from Harvard College, M.B.A. from Harvard Business School and J.D. from Harvard Law School
• Founding principal of Stockbridge overseeing expansion of Stockbridge's value-added and core investment vehicles
• More than 35 years of real estate industry experience • Formerly Chairman of RREEF North America, and an active member of all of RREEF's key North American investment committees and fund boards • Past member of the RREEF Global Securities Strategic Investment Committee and the RREEF Global Investment Committee
• B.A. from the University of Arizona
12 STOCKBRIDGE
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ATTACHMENT 5 - PAGE 24
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ATTACHMENT 5 - PAGE 25