sr-051110-8eCity Council Meeting: May 11, 2010
Agenda Item: ~'-~-
To: Mayor and City Council
Chairperson and Redevelopment Agency
From: Andy Agle, Director of Housing and Economic Development
Subject: Acquisition of Property at 1301 - 1333 Fourth Street
Recommended Action
Staff recommends that the City Council:
1. consider the proposed negative declaration together with any comments received
during the public review process, and approve a resolution adopting the negative
declaration for the purchase of property at 1301 - 1333 Fourth Street ("subject
property");
2. authorize the City Manager to negotiate a lease and reimbursement agreement
with the Redevelopment Agency for the acquisition of the subject property; and
3. introduce for first reading an Ordinance authorizing the execution of and
approving the act of entering into a lease and reimbursement agreement with the
Agency for the subject property.
Staff recommends that the Redevelopment Agency of the City of Santa Monica:
1. authorize the Executive Director to negotiate and execute a Letter of Intent,
Purchase and Sale Agreement and other related documents, to acquire the
subject property owned by Virginia Tegner Spurgin Investment Co., LLC, Karl E.
Schober, Boys and Girls Club of Santa Monica, Shriners Hospital for Crippled
Children of Los Angeles, YMCA of Santa Monica, YWCA of Santa Monica, and
Pendleton Trust (collectively, "the sellers"); .
2. authorize. the Executive Director to negotiate and execute a lease and
reimbursement agreement with the City for acquisition of the subject property.
Executive Summary
The proposed actions would make necessary findings and authorize the City Manager
to negotiate and execute agreements for the purchase of a 52,500-square foot property
located at the southeast corner of Fourth Street and Arizona Avenue. The proposed
transaction is a purchase not to exceed $42.5 million (depending upon the date of
closing) financed by the sellers at 6.75 percent, with the initial annual repayment
starting at $1.6 million and growing to $3.6 million in 2042. The Agency would lease the
property to the City and enter into a reimbursement agreement with the City to cover the
cost of the repayments.
1
Discussion
During the past three years, the City has acquired 67,500 square feet of property on
Fifth Street, south of Arizona Avenue. While specific uses for 1301 - 1333 Fourth
Street have not been identified, acquisition of the subject property would broaden the
City's ability to achieve its goals as identified in the Bayside District Specific Plan, as the
subject property is directly across Fourth Court from the City-owned properties on Fifth
Street.
The proposed transaction differs from most acquisitions the City has completed as it
contemplates a finahced sale rather than alump-sum payment to acquire the land.
Under the proposed transaction, the Redevelopment Agency would immediately gain
fee title to the property subject to a deed of trust in favor of the Sellers while making
annual payments of $1.6 million prorated in 2010, $1.648 million in 2011, $1.697 million
in 2012 and $3.3 million per year from 2013 through 2029. Between 2030 and 2042,
the annual installments would increase incrementally until reaching $3.6 million per year
between 2040 and 2042. Under the proposed transaction, the Redevelopment Agency
would lease the property to the City, and the City and Redevelopment Agency would
enter into a reimbursement agreement so that Agency funds would reimburse the City
for the rent. The City's lease would be for 99 years. The City's rent payments, which
are equal to the installment payments being made by the Redevelopment Agency to the
Sellers, has been determined to be the fair market rent based on an economic analysis
of the capitalized value of the leases on the property, as well as the residual land value
of the parking lot. The City will be able to purchase the property from the Agency for
$1.00 at the end of the lease. The proposed arrangement provides that if Agency funds
were not available to reimburse the City for the requisite payments, the Agency would
be obligated to use the City's rent payments to make payments to the Sellers. The
Agency would purchase the property subject to the existing, long-term leases with two
banks, Bank of America and Chase.
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The sellers have represented that structuring the acquisition as a financed sale is
acceptable because it supports the various owners' financial objectives, while alump-
sum sale does not. -The financed sale also represents advantages for the City, as the
Redevelopment Agency does not have sufficient funds on hand to pay for alump-sum
purchase. Alternatively, issuing debt to complete alump-sum purchase is expected to
exceed the $27 million of Redevelopment Agency funding capacity that the Council
allocated for downtown property acquisition. An additional advantage of the financed
sale is that it creates along-term Redevelopment Agency obligation, which can be paid
from Agency tax increment following the Agency's indebtedness deadline of 2014.
While the financed sale creates certain advantages for the City, it also creates certain
risks. First, if future Agency tax increment is insufficient to make the financing
payments, it would create a liability for the City. With the State of California's on-going
actions to raid local redevelopment funds, as well as uncertainties in the real estate
market, there is a risk that redevelopment funds could be insufficient to make the
required payments. Given the current challenges facing the General Fund, creating a
long-term liability to make the payments would not be insignificant.
Two- elements help mitigate the risks- to the City. The first is .rent paid by the existing
bank tenants on the site which would provide the City with more than .half of the
.required funds for payments to the Sellers. The second mitigating. factor is that future
development of the site could provide additional revenues to offset the payments to the
sellers.
Another risk is that the existing bank tenants on the site are governed by long-term
leases with options. The City would need to work closely with the tenants regarding any
development on the site. The deed of trust on the site could also impact the ability to
secure financing for future development on the property. Securing such financing may
require the Agency to demonstrate that sufficient capital improvement funds have been
allocated toward payments to the sellers. The Purchase Agreement will include an
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option to allow the Agency to eliminate the Deed of Trust in return for the deposit into
escrow of a lump sum sufficient to make the remaining payments to the Sellers. As part
of its due diligence, staff conducted a Phase I environmental assessment of the
property. The Phase I assessment reported that the site is a low threat and that further
analysis was not necessary. There were no findings except for potential use of
asbestos-containing materials and lead-based paint during construction of the buildings.
The banks' leases include general indemnity in favor of the property owner.
Environmental Analysis
An Initial Study and Negative Declaration for the proposed purchase of the subject
property were prepared by the Gity Planning Division in compliance with CEQA. The
Initial Study did not identify any significant adverse environmental impacts resulting from
acquisition of the subject property by the City as originally contemplated.. The document
found that the property will remain in its existing condition and that the City intends to
purchase the property with the purpose of achieving various public purpose goals and
objectives. The property will remain in -its present condition until such time as plans are
prepared and approved by the City. Any future reuse and redevelopment of the site will
be subject to separate review for compliance with CEQA. As a result, no project-related
environmental impacts were identified in the Initial Study. The Notice of Intent to adopt
a Negative Declaration was published on July 12, 2006, with the comment period
ending August 1, 2006. One comment was received, though it was subsequently
withdrawn.
Since completion of the Negative Declaration, the proposed project has been modified
with respect to the financial mechanism by which the subject property shall be acquired.
Instead of the City purchasing the site, it is proposed that the Agency shall acquire the
subject property through a Purchase and Sale Agreement, receiving fee title subject to a
deed of trust in favor of the Sellers subject to installment Agency promissory notes in
favor of the sellers as described above and secured by one first priority deed of trust on
the Property. Under the proposed transaction, the Agency would lease the property to
4
the City, the annual rent payments under which would be equal to the fair rental value of
the Property, which in turn is expected to be the annual amount payable under the
Agency notes. The City and Agency would enter into a reimbursement agreement so
that Agency funds would reimburse the City for the annual rent payments.
CEQA Guideline section 15073.5 identifies when a lead agency is required to re-
circulate anegative declaration after public notice of its availability has been given.
Recirculation is required only when there has been a "substantial revision" of the
Negative Declaration. Because no new significant impact arises from the change in the
financial manner in which the subject property shall be acquired, recirculation is not
required.
Financial Impacts & Budget Actions
The terms of the financed purchase and sale agreement will commit the Redevelopment
Agency to make annual payments of $1.6 million prorated for 2010, $1.648 million in
2011, $1.697 million in 2012, $3.3 million per year from 2013 through 2029, $3.4 million
per year from 2030 through 2034, $3.5 million per year from 2035 through 2039 and
$3.6 per year from 2040 through 2042. Sufficient funds for at least the first four years of
financing repayments are available in capital improvement account 0172075.589000.
Funds for subsequent years' payments will be allocated in future Redevelopment
Agency budgets.
Prepared by: Miriam Mack, Economic Development Manager
Andy Agle, Director
Housing and Economic
Forwarded to Council:
Rod Gould
City Manager
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Attachments:
A. Negative Declaration for the Acquisition of 1301- 1333 4th Street in the City of
Santa Monica
B. Resolution of the City Council Adopting a Negative Declaration for Purchase of
the Property
C. Ordinance authorizing the execution of and approving the act of entering into the
lease and reimbursement agreement with the Agency for the subject property.
D. Payment Schedule.
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Attachment A
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Room 212, Santa Monica, California 90401-3295
DETERMINATION
Project Title: Acquisition of 1301 - 1333 4t" Street by the City Of Santa Monica
Project Address: 1301 - 1333 4t" Street
On the basis of this initial evaluation:
I find that the proposed. project COULD NOT have a significant
effect on the environment, and a NEGATIVE DECLARATION
wilt be prepared. X
I find that although the proposed project could have a significant
effect on the environment, there will not be a significant effect
in this case because revisions in the project have been made by
or agreed to by the project proponent. A MITIGATED NEGATIVE
DECLARATION will be prepared.
I find that the proposed project MAY have a significant effect on
the environment, and an ENVIRONMENTAL IMPACT REPORT
is required. _
I find that the proposed project MAY have a "potentially significant
Impact" or "potentially significant unless mi#igated impact" on the
environment, but at feast one effect 1) has been adequately analyzed
in an earlier document pursuant to applicable legal standards, and
2) has been addressed by mitigation measures based on the earlier.
analysis as described on attached sheets. An ENVIRONMENTAL
IMPACT REPORT is required, but it must analyze only the effects
that remain to be addressed.
I find that although the proposed project could have a significant
effect on the environment, because all potentially significant effects
(a) have been analyzed adequately in an earlier EIR or NEGATIVE
DECLARATION pursuant to applicable standards, and (b) have
been avoided or mitigated pursuant to that earlier EIR or NEGATIVE
DECLARATION, including revisions or mitigation measures that are
imposed upon fhe proposed project, nothing further is required.
Date Planning Manager
City Planning Division
EFF4
Last Revised: 3/99
eff4
CITY OF SANTA MONICA
Hall, 1685 Main Street, Santa Monica, California 90401-3295
INITIAL STUDY
AND
NEIGHBORHOOD IMPACT STATEMENT
DATE FILED: June 30, 2006
This checklist is to be completed for all projects that are not exempt from environmental
review underthe California Environmental Quality Act (CEQA). The information, analysis
and conclusions contained in the checklist form the basis for deciding whether an
Environmental Impact Report (EIR), a Negative Declaration (ND) or a Mitigated Negative
Declaration (MND) is to be prepared. Additionally, the checklist shall be used to focus an
EIR on the effects determined to be potentially significant.
Project Title: Property Acquisitions of 1301 and 1333 4rh Street Street,
City of Santa Monica, California
Lead Agency Name and Address: Planning and Communify
Development Deparfinent, 1685 Main Streef, Room 212, Santa.
Monica, CA 90401
3. Contact Person and Phone Number: Paul Foley, Principal Planner,
Planning and Community Development Department. (310) 458-8341
4. Project Location: The properties to be acquired are located at 1307 and
1333 4th Stree#, situated on the eastside of 4~' Streef in the block south
of Arizona Avenue and north of Santa Monica Boulevard.-
5. Project Sponsor's Name and Address: City of Santa Monica, 1685 Main
Street, Santa Monica, CA 90401
6. General Plan Designation: Downtown Core
7. Specific Plan Designation: Bayside District Specific Plan
8. Zoning: BSC-3 (Bayside Commercial -Downtown Commercial DisfrictJ
CITY OF SANTA NiONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, Galifornia 90401-3295
9. Description of Project:
The project is the acquisition by the Gify of Santa Monica of the
properties as described below:
The properties have the street address of 9309-1333 4r" Street and are
under common ownership. The entire site is improved with two (2) one-
storyplus mezzanine financial office buildings with a combined 30, 928
square feet of gross building area and 22,328 square feet of renfab/e
area. The entire site is arectangular-shaped lot that is approximately
52,500 square feet in size and consists ofseven (7) separate lots.
The propertyat 9309 4f" Streetconsists ofa freestanding 1959/60-built
Bank ofAmerica bank branch with the public areas on the main street-
level floor, plus a basement and mezzanine. There is drivewa~ access
from 4r" Street and a paved public alley on the east side (4 Court).
There is an open, uncovered parking lot on the south side of the
building with 50 parking spaces.
9333 4`" Street consists of afree-standing VI/ashington Mutual bank
branch with the general public areas on the main, street-level, floorand
a mezzanine which contains some offices. There is also drivewa~r
access from 4r" Street and paved public alley on the easf side {4"
Gourt). There is an open, uncovered parking lot on the north side of the
building with 37 parking spaces.
The City intends to purchase the site with fhe purpose of achieving
various public purpose goals and objectives. There is currently no
building demolition being contemplafed and no plans for reuse or
redevelopment have been prepared. The property will remain fn its
present condition and wilt be leased back to the current occupants unfit
such time as plans are developed and approved bythe City. Anyfuture
re-use or re-development of the site will be subject to separate review
for compliance with the California Environmental Quality Act {CEQA).
10. Surrounding Land Uses and Setting: Briefly describe fhe project's
surroundings.
Surrounding uses include restaurants, a. church, playhouse theatre,
bank and an electronics store to the norfh; a clothing retailer and a
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
mixed-use retaiUresfdential building to the south; the Pacific Ocean and
the Third Street Promenade. with various retailers, restaurants and
theatres to the west; public parking, office buildings and retail stores to
the east.
11. Other public agencies whose approval is required (e.g., permits, financing
approval, or participation agreement.)
Santa Monica City Council authorization to proceed with purchase of
the sites.
ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED
Environmental factors checked below would be potentially affecfed by this project,
involving at least one impact that is a "Potentially Significant Impact" as indicated by
the checklist on the following pages.
J Geology/Soils _ Shadows _ Public Services
_ Construction Effects _ Hazards/Hazardous Materials _ Air Quality
Biological Resources _ Hydrology/Water Quality _ Economic and
Social Impacts
_ Population/Housing
_ Cultural Resources
_ Transportation/
Circulation
_ Land Use/Planning
Aesthetics
Recreation
Noise
_ Utilities/Service
Systems
_ Neighborhood
Effects
Mineral Resources
_ Mandatory Findings of _ Agriculture Resources
Significance
ENVIRONMENTAL IMPACTS
In completing this checklist, keep in mind the following:
1) A brief explanation is required for all answers except "No Impact" answers
that are adequa#ely supported bythe information sources a lead agency cites
3
CITY OF SANTA MONICA
PLANNINGAND COMMUNITY DEVELOPMENT DEPARTMENT
City Nail, 1685 Main Street, Santa Monica, California 90401-3295
in the parentheses following each question. A "No Impact" answer is
adequately supported if the referenced information sources show that the
impact simply does not apply to projects like the one involved (e.g. the
project falls outside a fault rupture zone). A "No Impact" answer should be
explained where it is based on project-specific factors as well as general
standards (e.g. the project will not expose sensitive receptors to pollutants,
based on aproject-specific screening analysis). All explanations should be
contained in a "Discussion of Environmental Evaluation" which should be
attached to this checklist.
2) All answers must take account of the whole action involved, including off-site
as well as on-site, cumulative as well. as project-level, indirect as well as
direct, and construction as well as operational impacts.
3) Once the lead agency has determined that a particular physical impact may
occur, then the checklist answers must indicate whether the impact is
potentially significant, less than significant with mitigation, or Tess than
significant. A potentially Significant Impact is appropriate if there is
substantial evidence that an effect may be significant. If there are one or
more Potentially Significant Impact entries when the determination is made,
an EIR is required.
4) A Negative Declaration: Less Than Significant With Mitigation Incorporated
applies where the incorporation of mitigation measures has reduced an
effect from a Potentially Significant Impactto a Less Than Significant Impact.
The lead agency must describe the mitigation measures, and briefly explain
how they reduce the effect to a less than significant level (mitigation
measures from "Earlier Analyses," may be cross-referenced).
5) Earlier analysis maybe used where, pursuant to the tiering, program EIR, or
other CEQA process an effect has been adequately analyzed in an earlier
EIR or negative declaration. Section 15063(c)(3){D). In this case, a brief
discussion should identify the following:
a) Earlier analysis Used. Identify and state where they are available for
review.
b) impacts Adequately Addressed. Identify which effects from theabave
checklist were within the scope of and adequately analyzed in an
earlier document pursuant to applicable legal standards, and state
whether such effects were addressed by mitigation measures based
on the earlier analysis.
4
CITY OF SANTA MONICA
City Hall, 1885
Monica, California 90401-3295
c) Mitigation Measures. For effects that are "Less than Significant with
Mitigation Measures Incorporated," describe the mitigation measures
that were incorporated or refined from the earlier document and the
extent to which they address site-specific conditions for the project.
6) Lead agencies are encouraged to incorporate into the checklist references to
information sources for potential impacts (e.g. genera! plans, zoning
ordinances}. Reference to a previously prepared or outside document
should, where appropriate, include a reference to the page or pages where
the statement is substantiated. A source list should be attached, and other
sources used or individuals contacted should be cited in the discussion.
7) The explanation of each issue should identify:
a) The significance criteria or threshold, if any, used to evaluate each
question; and
b) The mitigation measure identified, if any, to reduce the impact to less
than significance.
III. ENVIRONMENTAL IMPACTS
Pot.
Signif.
Impact
Geology and Soils. Would the project:
a. Expose people or structures to
potential substantial adverse
effects, including the risk of
loss, injury, or death involving:
i} Rupture of a known earthquake
fault, as delineated on the most
recent Alquist-Priolo Earthquake
Fault Zoning Map issued by the
State Geologist for the area or
based on other substantial
evidence of a known fault?
Refer to Division of Mines and
5
Less Than Less Than No
Signif. Signif. Impact
With Impact
Mitigation
Incorporated
CITY OF SANTA MONICA
S5 Main Street, Santa Moniaa, California 90401-3295
Geology Special Publication
42. x
ii) Strong seismic ground
shaking? _ _ x
iii) Seismic-related ground failure,
including liquefaction? _ _ _ x
iv) Landslides? _ _ _ x
b) Result in substantial soil
erosion or the loss of
topsoil? _ _ _ x
c) Be located on a geologic unit
or soil that is unstable, or that
would become unstable as a
result of the project, and
potentially resul# in an- or off
-site landslide, lateral spreading,
subsidence, liquefac#ion or
collapse? _ _ _ x
d) Be located on expansive soil,
as defined in Table 18-1-B of
the Uniform Building Cdde
(1994), creating substantial
risks to life ar property?
x
e) Have soils incapable of adequately
supporting theuse of septic tanks
or alternative waste water disposal
systems where sewers are not
available for the disposal of waste
water? _ _ _ x
2. Air Quality -Where available, the
significance criteria established by the
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CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
applicable air quality management or air
pollution control district may be relied
upon to make the fallowing
determinations. Would the project:
a) Conflict with or obstruct
implementation of the applicable
air quality plan? _ _
b) Violate any air quality standard
or contribute substanfiaily to an
existing or projected air quality
violation?
c) Result in a cumulatively
considerable net increase of any
criteria pollutant for which the
project region is non-attainment
under an applicable federal or
state ambient air quality standard
(including releasing emissions .
which exceed quantitative
thresholds for ozone
precursors}? _ _
d} Expose sensitive receptors to
substantial pollutant
concentrations? _, _
e) Create objectionable odors
affecting a substantial number
of people? _ _
3. Hydrology and Water Quality -
Would the project:
a) Violate any water quality
standards or waste discharge
requirements?
b) Substantially deplete groundwater
7
x
x
x
x
x
x
CITY OF SANTA MONICA
1685
Monica, California 90401-3295
supplies or interfere substantially
with groundwater recharge such
that there would be a net deficit in
aquifer volume or a lowering of the
local groundwater table level (e.g.,
the production rate of pre-existing
nearby wells would drop to a level
which would not support existing
land uses or planned uses for
which permits have been
granted)? _ _
c) Substantially alter the existing
drainage pattern of the site or area,
including through the alteration of
the course of a stream or river, in a
manner which would result in
substantial erosion or siltation on
or off-site?
d) Substantially alter the existing
drainage pattern of the site or area,
including through the alteration of
the course of a stream or river, or
substantially increase the rate or
amount of surface runoff in a manner
which would result in flooding on-
or off-site?
e) Create or contribute runoff water
which would exceed the capacity
of existing or planned stormwater
drainage systems or provide
substantial. additional sources of
polluted runoff?
f) Otherwise substantially degrade
water quality? _ _
x
x
x
x
x
g} Place housing within a 100-year
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, Galifomia 90401-3295
flood hazard area as mapped on
a federal Flood Hazard Boundary
or Flood Insurance Rate Map or
other hazard delineation map?
x
h) Place within a 100-year flood
hazard area structures which
would impede or redirect flood
flows? x
i) Expose people or structures to a
significant risk of loss, injury or
death involving flooding, including
flooding as a result of the failure
of a levee or dam? x
j) Inundation by seiche, tsunami,
or muditow?
x
4. Biological Resources -Would the project:
a) Have a substahtial adverse effect,
either directly or through habitat
modifications, on any species in
local or regional plans, policies, or
regulations, or by the California
Department of Fish and Game or
U.S. fish and Wildlife Service?
x
b) Have a substantial adverse effect
on any riparian habitat or other
sensitive natural community
identified in local or regional plans,
policies, regulations or by the
California Department of Fish and
Game or US Fish and Wildlife
Service? x
9
CITY OF SANTA MONICA
PL4NNING AND COMMUN
City Hall, 1685 Main Street,
VIENT DEPARTMENT
California 90401-3295
c) Have a substantial adverse effect
on federally protected wetlands
as defined by Section 404 of the
Clean Water Act (including, but
not limited to, marsh, vernal pool,
coastal, etc.) through direct
removal, filling, hydrological
interruption, or other means?
x
d) Interfere substantially with the
movement of any native resident
or migratory fish or wildlife
species or with established native
resident or migratory wildlife
corridors, or impede the use of
native wildlife nursery sifes?
x
e) Conflict with any local policies
or ordinances protecting
biological resources, such as a
tree preservation policy or
ordinance?
f) Conflict with the provisions of
an adopted Habitat Conservation
Plan, Natural Community
Conservation Plan, or other
approved local, regional, or state
habitat conservation plan?
x
x
5. Noise -Would the project result in:
a) Exposure of persons to or
generation of noise levels in
excess of standards established
in the local general plan or noise
ordinance, or applicable standards
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CITY OF SANTA MONiCA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
of other agencies? _ _
b) Exposure of persons to or
generation of excessive groundborne
vibration ar grouhdborne noise
levels?
c) A substantial permanent increase
in ambient noise levels in the
project vicinity above levels
existing without the project?
_ x
x
x
d) A substantial femporary or
periodic increase in ambient
noise levels in the project
vicinity above levels existing
without the project? _ _ _ x
e) For a project located within an
airport land use plan or, where
such a plan has not been adopted,
within two miles of a public
airport or public use airport,
would the project expose people
residing or working in the project
area to excessive noise levels?
x
6. Shadows. Will the proposal produce
extensive shadows affecting adjacent
light sensitive uses or property?
x
7. Hazards and Hazardous Materials -
Would the project:
a) Create a significant hazard to
the public or the environment
11
GITY OF SANTA MONICA
nta
thrcugh the routine transport,
use, or disposal of hazardous
materials? x
b) Create a significant hazard to the
public or the environment through
reasonably foreseeable upse# and
accident conditions involving the
release of hazardous materials
into the environment? x
c) Emit hazardous emissions or
handle hazardous or acutely
hazardous materials, substances,
or waste within one-quarter mile
of an existing or proposed
school? x
d) 8e located on a site which is
included on a list of hazardous
ma#erials sites compiled pursuant
to Government Code Section
65962.5 and, as a result, would
it create a significant hazard to
the public or the environment?
x
e) For a project located within an
airport land use plan or, where
such a plan has not been
adopted, within twc miles of a
public airport or public use
airport, would the project result
in a safety hazard for people
residing or working in the
project area? _ ,_ _ x
f) For a project wi#hin the vicinity
of a private airstrip, would the
project result in a safety hazard
for people residing or working
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CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
in the project area? _
g) Impair implementation of or
physically interfere with an .
adopted emergency response
plan or emergency evacuation
plan? _ _
h) Expose people or structures
to a significant risk of Ibss,
injury or death involving
wildland fires, including
where wildlands are adjacent
to urbanized areas or where
residences are intermixed
with wildlands?
8. Population and Housing -
Would the project:
a) Induce substantial population
growth in an area, either
directly (for example, by
proposing new homes and
businesses) or indirectly (for
example, through extension of
roads or other infras#ructure)?
_ x
_ x
x
x
b) Displace substantial numbers
of existing housing, necessi#ating
the construction of replacement
housing elsewhere? ,^ _ _ x
c) Displace substantial number of
people, necessitating the
construction of replacement
housing elsewhere? _ _ _ x
9. Land Use and Planning. Would
the project:
13
CITY OF SANTA MONICA
PLANNING AND COMMUP
City Hall, 1685 Main Street
a} Physically divide an established
community?
b) Conflict with any applicable land
use plan, policy, or regulation
of an agency with jurisdiction
over the project (including,
but not limited td the general
plan, specific plan, local
coastal program, or zoning
ordinance) adopted for the
purpose of avoiding or
mitigating an environmental
effect?
c) Conflict with any applicable
habitat conservation plan
or natural community
conservation plan?
10. Teansportation/Traffic -
Would the project:
a) Cause an increase in traffic
which is substantial in relation to
the existing traffic load and
capacity of the street system
(i.e., result in a substantial
increase in either the number of
vehicle trips, the volume to
capacity ratio on roads, or
congestion at intersections)?
x
x
x
x
b) Exceed, either individually or
cumulatively, a level of service
standard established by the
county congestion management
agency for designated roads
14
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
or highways?
c) Result in a change in air traffic
patterns, including either an
increase in traffic levels or a
change in location that results,
in substantial safety risks? _ _
d} Substantially increase hazards
due to a design feature (e.g.,
sharp curves or dangerous
intersections} or incompatible
uses (e.g., farm equipment)?
x
x
x
e) Result in inadequate
emergency access? _ _ _ x
f) Result in inadequate parking
capacity? _ _ _ x
g) Conflict with adopted policies,
plans, or programs supporting
alternative transportation (e.g.,
bus turnouts, bicycle racks)?
x
i) Involve right of way dedicafion
resulting in a reduced lot area? _ _ x
j) Reduce access to other
properties and uses? _ _ _ x
k) Create abrupt grade differential
between public and private
. properly? _ _ _ x
11. Utilities and Service System -
Would the project:
15
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
a) Exceed wastewater treatment
requirements of the applicable
Regional Water Quality
Control Board?
b) Require or result in the
construction of new water or
wastewater treatment facilities
or expansion of existing
facilities, the construction of
which could cause significant
environmental effects?) _ _
c) Require or result in the
construction of new storm water
drainage facilities or expansion
of existing facilities, the construction
of which could cause significant
environmental effects
d) Have sufficient water supplies
available to serve the project
from existing entitlements and
resources, or are new or
expanded entitlements
needed?
e) Result in a determination by
the wastewater treatment
provider which serves or may
serve the project that it has
adequate capacity to serve
the project's projected demand
in addition to the provider's
existing commitments?
~ 8e served by a landfill with
sufficient permifted capacity
to accommodate the project's
solid waste disposal needs?
x
x
x
x
x
x
16
CITY OF SANTA MONfCA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City hall, 1685 Main Street, Santa Monica, California 90401-3295
g) Comply with federal, state, and
local statutes and regulations
related to solid waste?
12. Public Services
a) Would the project result in
substantial adverse physical
impacts associated with the
provision of new or physically
altered governmen#al facilities,
the construction of which could
cause significant environmental
impacts, in order to maintain
acceptable service ratios,
response times or other
performance objectives for any of
the public services:.
Fire protection?
Police protection?
Schools?
Parks?
Other public facilities?
13. Recreation
a) Would the project increase the
use of existing neighborhood
and regional parks or other
recreational facilities such that
substantial physical deterioration
of the facility would occur or
be accelerated?
b} does the project include
17
x
- - _ x
x
x
x
- - - x
x
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
recreational facilities or require
the construction or expansion of
recreational facilities which migh#
have an adverse physical effect
on the environment? x
14. Cultural Resources -
Would the project:
a) Cause a substantial adverse
change in the significance
of a historical resource as
defined in '15064.5 x
b) Cause a substantial adverse
change in the significance
of an archaeological
resource pursuant to
' 15064.5? x
c} Directly or indirectly destroy a
unique paleontological
resource or site or unique
geologic feature? _ - _ x
d) Disfurb any human remains,
including those interred
outside of formal cemeteries?
x
15. Aesthetics -Would the project:
a) Have a substantial adverse
effect on a scenic vista? 0 _ _ •_ x
b) Substantially damage scenic
resources, including, bu#
not limited to, trees, rock
outcroppings, and historic
buildings within a state
scenic highway? _ _ _ x
18
CITY OF SANTA MONICA
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
c) Substantially degrade the
existing visual character or
quality of the site and its
surroundings? _
d) Create a new source of
substantial light or glare which
would adversely affect day or
nighttime views in the area?
16. Construction Effects. Would the
proposal have considerable construction-
period impacts due to the scope, or
location of construction activities?
17. Economic and Social impacts.
Does the project have economic or
social effects which would result ih
additional physical changes (e.g. if
a new shopping center located away
from a downtown shopping area would
take business away from the down-
town and thereby cause business
closures and eventual physical
deterioration of the downtown}? _
18. Agriculture Resources: In determining
whether impacts to agricultural resources
are significant environmental effects, lead
agencies may refer to the California
Agricultural Land Evaluation and Site
Assessment Model {1997) prepared by
the California Dept. of Conservation as
an optional model to use in assessing
impacts on agriculture and farmland.
Would the Project:
a) Convert Prime Farmland, Unique
x
x
x
x
19
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
Farmland, or Farmland of
Statewide Importance (Farmland),
as shown on the maps prepared
pursuant to the Farmland Mapping
and Monitoring program of the
California Resources Agency, to
non-agricultural use? _ _ _ x
b) Conflict with existing zoning for
agricultural use, or a Williamson
Act contract? x
c) Involve other changes in the
existing environment which, due
to their location or nature, could
result in conversion of farmland,
to non-agricultural use? _ _ _ x
19. Mineral Resources -Would the project;
a) Result in the loss of availability
of a known mineral resource that
would be of value to the region
and the residents of the State?
x
b) Result in the loss of availability
of alocally-important mineral
resource recovery site delineated
on a local general plan, specific
plan or other land use plan?
x
20. Neighborhood Effects. Will the
proposal have considerable effecfs
on the projecf neighborhood? _ _ _ x
21. Mandatory Findings of Significance.
a) Does the project have the paten-
20
CITY OF SANTA MONICA
Hall, 1685 Main Street, Santa Monica, California 90401-3295
tial to degrade the quality of the
environment, substantially reduce
the habitat of a fish or wildlife
species, cause a fish or wildlife
population to drop below self
sustaining levels, threaten to
eliminate a plant or animal commun-
ity, reduce the number or restrict
the range of a rare or endangered
plant or animal or eliminate
important examples of the major
periods of California history or
pre-history _ _ _ x
b) Does the project have impacts
that are individually limited,
but cumulatively considerable?
("Cumulatively considerable"
means that the increinentai
effects of a project are considerable
when viewed in connection with
the effects of pasf projects, the
effects of other current projects,
and the effects of probable
future projects)? _ _ _ x
c} Does the project have environ-
mental effects which will cause
substantial adverse effects on
human beings; either directly
or indirectly? _ _ x
IV. DISCUSSION OF ENVIRONMENTAL EVALUATION
The project is the acquisition by the City of Santa Monica ofthe properties as
described below:
The properties have the street address of 1301-1333 4`h Street and are
under common ownership. The entire site is improved with two (2) one-story
plus mezzanine financial office buildings with a combined 30,128 square feet
21
CITY OF SANTA MONICA
Half, 1685 Main Street, Santa Monica, California 90401-3295
of gross building area and 22,328 square feet of rentable area. The entire
site is arectangular-shaped lot that is approximately 52,500 square feet in
size and consists of seven (7) separate parcels.
The property at 1301 4th Street consists of afree-standing 1959/60-built
Bank of America bank branch with the public areas on the main, street-level,
floor, p{us a basement and mezzanine. There is driveway access from 4"'
Street and a paved public alley on the east side (4th Court). There is an
open, uncovered parking lot on the south side of the building with 50 parking
spaces.
1333 4th Street consists of afree-standing Washington Mutual bank branch
with the general public areas on the main, street-level, floor plus a
mezzanine, which contains some offices. There is also driveway access
from 4th Street and 4th Court alley to the east. There is an open, uncovered
parking lot on the north side of the building with 37 parking spaces.
The City intends to purchase the site with the purpose of achieving various
public purpose goals and objectives. There is currently no building
demolition being contemplated and no plans for reuse or redevelopment
have been prepared. The property will remain in its present condition and
will be leased back to the current occupants until such tirrie as plans are
developed and approved by the City. Any future re-use or re-development of
the site will be subject tc separate review for compliance with the California
Environmental Quality Act.
Geology and Soils (a, b, c, d, e)
The proposed project does not have any impacts on geology and soils as the
project entails only the purchase of commercial property by the City of Santa
Monica and does not include construction.
2. Air Quality (a, b, c, d, e)
The proposed project does not have any impacts on air quality as the project
entails only the purchase of commercial property by the City of Santa
Monica and does not include construction.
3. Hydrology and Water Quality
The proposed project does not have any impacts on hydrology and water
quality as the project entails only the purchase of commercial property bythe
City of Santa Monica and does not include construe#ion.
22
CITY OF SANTA MONICA
1685 Main Street, Santa Monica, California 90401-3295
4. Biological Resources (a, b, e, d, e, f)
The proposed project does not have any impacts on biological resources
as the project entails only the purchase of commercial property bythe City of
Santa Monica and does not include construction.
5. Noise {a, b, c, d, e}
The proposed project will not have impacts on noise as the project entails
only the purchase of commercial properly by the City of Santa Monica and
does not include noise-generating construction activities.
6. Shadows
The proposed project will not have impacts on shadows as the project entails
only the,purchase of commercial property by the City of Santa Monica and
does not include construction.
7. Hazards and Hazardous Materials
The proposed project will not have impacts on hazards and hazardous
material as the project entails only the purchase of commercial property by
the City of Santa Monica and does not include construction.
8. Population and Housing {a, b, c}
The proposed project will not have impacts on population and housing as the
project entails only the purchase of commercial property by the City of Santa
Monica:
9. Land Use and Planning (a, b, c)
The proposed projectwill not have impacts on land use and planning as the
project entails only the purchase of commercial property by the City of Santa
Monica and does not include construction.
10. TransportationITraffic (a, b, c, d, e, f, g, h, I, j, k}
The proposed project will not have impacts on transportationltraffic as the
project entails only the purchase of commercial properly by the City of Santa
Monica and does not include construction.
11. Utilities and Service System (a, b, c, d, e, f, g)
The proposed project will not have impacts on u#ilities and the service system
as the project entails only the purchase of commercial property by the City of
Santa Monica and does not include construction.
12. Public Services {a)
23
CITY OF SANTA MONICA
Hall, 1685 Main Street, Santa Monica,
The proposed project will not have impacts on public services as the project
entails only the purchase of commercial property by the City of Santa Monica
and does not include construction.
13. Recreation (a, b}
The proposed project will not have impacts oh recreation as the project
entails only fhe purchase of commercial property by the City of Santa
Monica.
14. Cultural Resources (a, b, c, d)
The proposed project wil! not have impacts on cultural .resources as the
project entails only the purchase of commercial property by the City of Santa
Monica and does not include construction.
15. Aesthetics (a, b, c, d)
The proposed project will not have impacts on aesthetics as the project
entails only the purchase of commercial property bythe City of Santa Monica
and does not include construction.
16. Construction Effects
The proposed project will not have construction effects as the project entails
only the purchase of commercial property by the City of Santa Monica and
does not include construction.
17. Economic and Social Impacts
The proposed project will not have economic and social impacts as the
project entails only the purchase of commercial property by the City of Santa
Monica.
18. Agriculture Resources (a, b, c}
The proposed project will not have impacts on agriculture resources as the
project entails only the purchase of commercial property by the City of Santa
Monica and does not include construction.
19. Mineral Resources (a, b} .
The proposed project will not have impacts on mineral resources as the
project entails only the purchase of commercial property by fhe City of Santa
Monica and does not include construction.
20. Neighborhood Effects
The proposed project will not have impacts on neighborhood effects as the
24
CITY OFSANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1685 Main Street, Santa Monica, California 90401-3295
project entails only the purchase of commercial property by the City of Santa
Monica and does not include construction.
21. Mandatory Findings of Significance (a, b, c)
a) Does the project have the potential to degrade the quality of the
environment, substantially reduce the habitat of a fish orwildlife
species, cause a fish or wildlife population to drop below self
sustaining levels, threa#en to eliminate a plant or animal
community, eeduce the number or restrict the range of a rare or
endangered plant or animal or eliminate important examples of
the major periods of California history or pre-history?
No. The project will not degrade the quality of fhe environment as the
project entails only the purchase ofcommerciat propertyby the City of
Santa Monica and does not include construction.
b) Does the project have impacts that are individually limited, but
cumulatively considerable? {"Cumulatively considerable" means
#hat the incremental effects of a project are considerable when
viewed in connection with the effects of past projects, the effects
of other current projects, and the effects of probable future
projects)?
No. The project has no cumulative impacts as the project entails only
fhe purchase of commercial property by the City of Santa Monica and
does not include construction.
c) Does the project have environmental effec#s which will cause
substantial adverse effects on human beings, either directly or
indirectly?
No. The project has no adverse effect on human beings as the
project entails only the purchase of commercial propertyby the City of
Santa Monica and does not include construction.
V. DETERMINATION
(See attachment)
25
CITY OF SANTA MONICA
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
City Hall, 1686 Main Street, Santa Monica, California 90401-3295
VI. SOURCES
The following documents were used in determining the environmental effects of the
proposed project: Downtown Parking Program Environmental Impact Report (EIR),
Safety Element, and Zoning Ordinance (all are available .for review at the City
Planning Division Public Counter).
The following summarizes the content of these documents:
Downtown Parking Program EIR: Evaluates environmental impacts on
transportation and circulation, air quality, land-use and planning, aesthetics,
construction effects, and neighborhood effects of the Downtown Parking Program
including mitigation measures. EIR approved May 9, 2006. State Clearinghouse
Number 2002121122.
Safety Element: Goals and policies to reduce risks associated with natural and
man-made hazards. EIR certified February 21; 1995. State Clearinghouse Number
92031082.
Zoning Ordinance: City wide development standards. Final Supplemental EIR,
June 1988.
F:\EconomictkvetopmentlPmperiy AcquisitionsiRomney-Jones Initial Study and Neighborhood Impact Statemenf.doc
26
Attachrrsent A
Legal Description
All that certain real property situated in the County of Los Angeles, State of California,
described as follows:
1301 4T" STREET
Parcel 1:
Lots "U", "V", "W" and "X" and the northwesterly 15 feet of Lot "T" in Block 145 Of Santa
Monica, In The City Of Santa Monica, County Of Los Angeles, State Of California As
Per Map Recorded In Book 39 Page (S} 45 et seq. and in Book 3 Pages 80 and 81 of
Miscellaneous Records, In The Office Of The County Recorder Of Said County.
Excepting from Lots "V", "W" and "X" the buildings and improvements thereon, as
exception in documents recorded February 28, 1951.
Parcel 2:
The buildings and improvements on Lots W and X in Block 145 of Santa Monica; In The
City of Santa Monica, County of Los Angeles, State of California, As Per Map Recorded
In Book 3 Pages 80 and 81 of Miscellaneous Records, In The Office Of The County
Recorder Of Said County.
1333 4T" STREET
Lots "R" and "S" and the southeasterly 35 feet of Lot "T", In Block 145 Of Santa Monica,
In The City Of Santa Monica, County Of Los Angeles, State Of California As Per Map
Recorded In Book 39 Page (S} 45 et seq. and in Book 3 Pages 80 and 81 of
Miscellaneous Records, In The Office Of The County Recorder Of Said County.
A-1
A-2
F: W tty\MuniLaw\Share\Laws\ALS\§542400Yd
City Council Meeting: May 11, 2010 Santa Monica, California
ORDINANCE NO. (CCS)
(CITY COUNCIL SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA APPROVING THE ACT
OF ENTERING INTO CERTAIN LEASE AND
REIMBURSEMENT AGREEMENTS
WHEREAS, the Redevelopment Agency of the City of Santa Monica (the
"Agency") has authorized the acquisition of the property located within the City of Santa
Monica (the `'City") commonly known as 1301 - 1333 Fourth Street (the "Property); and
WHEREAS, the Agency proposes to acquire the Property through a Purchase and
Sale Agreement, receiving fee title to the property subject to installment Agency
promissory notes in favor of the sellers and, under the proposed transaction, the Agency
would lease the property to the City ("Agency Lease"), and the City and Agency would
enter into a Reimbursement Agreement so that Agency funds would reimburse the City
for the annual rent payments; and
WHEREAS, under the proposed transaction, the Agency Lease would not exceed
99 years, the City's annual lease payments would not extend beyond 2042 nor exceed the
total sum set forth in Exhibit A attached hereto, and the City will have the option to
purchase the Property from the Agency for $ I.00 at the end of the lease; and
WHEREAS, the rental payments to be made by the City pursuant to the Agency
Lease will be used by the Agency for payment of the Agency's promissory notes or other
evidences of indebtedness to finance the purchase of the Property; and
WHEREAS, the Agency constitutes a "public leaseback corporation,'' as such
term is defined in subsection (c) of Section 54240 of the California Government Code;
and
WHEREAS, the proposed Lease and Reimbursement agreement constitutes a
"public leaseback," as such term is defined in subsection (b) of Section 54240 of the
California Government Code; and
WHEREAS, Section 54241 of the California Government Code provides that no
public lease back, the term of which will exceed five years or more, shall be entered into
until the act of entering into a formal agreement with the public leaseback corporation
shall have been approved by ordinance; and
WHEREAS, the City desires to approve, by this Ordinance, the act of entering
into the Agency Lease and the act of entering into the Reimbursement Agreement;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES ORDAIN, AS FOLLOWS:
Section 1. The act of entering into the Agency Lease is hereby approved.
Section 2. The act of entering into the Reimbursement Agreement is hereby
approved.
Section 3. This Ordinance is subject to the provisions for referendum applicable
to the City.
Section 4. Any provision of the Santa Monica Municipal Code or appendices
thereto inconsistent with the provisions of this Ordinance, to the extent of such
inconsistencies and no further, are hereby repealed or modified to that extent necessary to
affect the provisions ofthis Ordinance.
Section 5. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of any competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby declares that it would
have passed this Ordinance, and each and every section, subsection, sentence, clause or
phrase not declared invalid or unconstitutional without regard to whether any portion of
this Ordinance would be subsequently declared invalid or unconstitutional.
Section 6. The Mayor shall sign and the City Clerk shall attest to the passage of
this Ordinance. The City Clerk shall cause the same to be published once in the official
newspaper within I S days after its adoption. This Ordinance shall become effective after
30 days from its adoption.
APPROVED AS TO FORM:
~~`~ ~~
M sha Jon Ioutrie, C' y Attorney
Attachment A
Payment
Year Date Annual Payments
2010 1,600,000.00 **
2011 01 /01 /11 1,648, 000.00
2012 01/01/12 1;697;000.00
2013 01/01/13 3,300,000.00
2014 01/01/14 3,300;000.00
2015 01/01/15 3,300,000.00
2016 01/01/16 3,300,000.00
2017 01/01/17 3,300,000.00
2018 01/01/18 3,300,000.00
2019 01/01/19 3,300,000.00
2020 01/01!20 3,300,000.00
2021 01 /01 /21 3, 300, 000:00
2022 01/01/22 3,300,000.00
2023 01/01/23 3,300,000.00
2024 01/01/24 3,300,000.00
2025 01/01/25 3,300,000.00
2026 01/01/26 3,300,000.00
2027 01/01/27 3,300,000.00
2028 01/01/28 3,300,000.00
2029 01/01/29 3,300,000.00
2030 01/01/30 3,400,000.00
2031 01 /01131 3, 400, 000.00
2032 01/01/32 3,400,000.00
2033 01/01/33 3,400,000.00
2034 01/01/34 3,400,000.00
2035 01/01/35 3,500,000.00
2036 01/01/36 .3,500,000.00
2037 01/01/37 3,500,000.00
2038 01/01/38 3,500,000.00
2039 01/01/39 3,500,000.00
2040 01/01/40 3,600,000.00
2041 01 /01141 3,600, 000.00
2042 01/01/42 3,600,000.00
`First-year payment due upon close
of escrow
"First-year payment will be prorated
based on the closing date
Attachment D
Year Payment
Date
Annual Pa ments
2010 * ** 1,600,000.00
2011 Ol/Ol/11 1 648 000.00
2012 01/01/12 1 697 000.00
2013 01/01/13 3 300 000.00
2014 01 01/14 3 300 000.00
2015 01/01/15 3 300 000.00
2016 Ol 01/16 3 300 000.00
2017 01/01/17 3 300 000.00
2018 01/01/18 3 300 000.00
2019 Oi Ol 19 3 300 000.00
2020 Ol 01 20 3 300 000.00
2021 O1 01 21 3 300 000.00
2022 Ol 01/22 3 300 000.00
2023 01/01/23 3 300 000.00
2024 O1 Ol 24 3 300 000.00
2025 O1/01 25 3 300 000.00
2026 Ol/Ol 26 3 300 000.00
2027 Ol Ol 27 3 300 000.00
2028 01/01/28 3 300 000.00
2029 01/01/29 3 300 000.00
2030 Ol Ol 30 3 400 000.00
2031 01/01 31 3 400 000.00
2032 O1 Ol 32 3 400 000.00
2033 01/01/33 3 400 000.00
2034 01/01/34 3 400 000.00
2035 01/01/35 3 500 000.00
2036 01/01/36 3 500 000.00
2037 01/01/37 3 500 000.00
2038 01/01/38 3 500 000.00
2039 .01/01/39 3 500 000.00
2040 01/01/40 3 600 000.00
2041 01/01/41 3 600 000.00
2042 01/01/42 3 600 000.00
~ First--year payment due upon
escrow c%se of
~~ First-yearpaymentwi//be prorated
bayed on the c%sin date
Reference Resolution No.
10476 (CCS) and Contract
Nos. 9013 (CCS/RAS) and
9014 (CCS/RAS).