sr-cont from 052411-8a~;,YO, Supplemental Report
Sauta Monica"
City Council Meeting: May 26, 2011
Agenda Item:
To: Mayor and City Council
From: Andy Agle, Housing and Economic Department Director
Subject: Redevelopment Agency Immediate Funding Opportunities
Background
In response to the Council discussion on May 24, 2011 regarding the proposed
renovation of the Civic Auditorium staff has prepared a chart entitled Comparison of
Options for the Civic Auditorium (attachment A) and responses to frequently asked
questions (Attachment B)
Prepared by: Andy Agle, Director
.Approved:
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Andy Agle
Director, Housing and Economic
Development.
Forwarded to Council:
od Gould
City Manager
Attachments:
A. Comparisons of Options for Civic Auditorium
B. Frequently Asked Questions
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COMPARISONS OF OPTIONS FOR CIVIC AU
Net Operating Costs
Average annual subsidy/10yrs $3.3M $1.2M $0.75M $1.OP
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20 Yr Net Present ValueZ ($61.8M) ($57.2M) ($60.7M)
10 Yr Net Present Value ($45.9M) ($53.OM) ($52.7M)
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Landmark Status Preserved Preserved Mo i ie
Parking Existing or future replacement' Existing or future replacement' Reduced Civic parkin)
City Parking Revenues $360,000-420,000 $490,000-880,000 $100,000-175,1
I~~ Range depends on the nature of the facility ranging from amulti-use community cultural center to aworld-class museum
[zl Initial investment and annual subsidy over 20 years, discounted at 6%. Includes event parking revenue.
Isl Range depends on the nature of the facility
lal Stairway, Santa Monica Symphony, College Fair
Isl Given CCIUP and Memorial Park gym, demand would be regional.
tel Over a few years the Civic would lose market position in terms of shows.
I'I Replacement needed if surface lot is converted per CCSP.
Attachment B
Santa Monica Civic Auditorium Renovation and Repurposing
Frequently Asked Questions (FAA's)
Where did the recommendation come from?
The future of the Santa Monica Civic Auditorium has been an important component of a number of
recent community planning initiatives. They include the Civic Center Specific Plan (2005), the City's
adopted cultural plan, Creative Capital (2007), which held a series of focus groups on the Civic, and the
Santa Monica Redevelopment Agency's 2009 five year implementation plan. Each of these processes
confirmed the community's desire to see the venue refurbished and brought to life as the cultural heart
of the Civic Center area, as a venue for large musical performances and cultural events.
What is the proposed deal with Nederlander?
The proposed Exclusive Presenter/Joint Venture model invests the Nederlander Organization, a top
industry promoter, in the success of the venue and ensures that the City shares in that success based on
a net profit sharing formula. The City would continue to manage the venue and Nederlander would use
its industry connections to book the venue. The proposed deal term is 10 years from completion of the
renovation. The Council approved the partnership model with Nederlander, the major deal terms and
the minimal performance levels at its March 8, 2011 meeting.
Is there a loss prevention clause?
A final agreement has not been negotiated, the current term sheets states that after the first three year
period, Nederlander could be terminated if it failed to achieve a net gain for any two consecutive year
period.
Would the City still need to subsidize the Civic Auditorium?
The City's overhead (2/3 of which are staffing costs) is such that the venue would still require a subsidy
of $0.8M to $1.4M annually when averaged over the first 10 years. The City subsidy is projected to
decrease over 33% over the ten year term; compared to a 64% increase with the Status Quo model.
What about capital reserves?
The projected subsidies include an annual allocation to a capital reserve fund of $500,000 for a facility
renewal program.
Who will determine what events will take place at the Civic?
Both the City and Nederlander will discuss and review regularly the types of events at the Civic.
What would take place at the Civic Auditorium?
In soliciting proposals, the City stated that it wanted a mix of events, much broader than what has been
at the civic in recent years, yet while also preserving local tradition. Once renovated the Civic
Auditorium would host a mix of concerts, theatrical performances, and special events, including film
screenings, award shows, consumer shows and corporate events. It would also continue to host key
community events such as Stairway and the Santa Monica Symphony.
What is the time frame?
The Civic would close in the winter of 2012 with construction to begin soon thereafter. Construction is
estimated to last 18 months to two years.
What will the renovation include and what will it cost?
Once renovated the Civic Auditorium would become a state of the art mixed use facility while retaining
its notable characteristics such as the fa4ade and the hydraulic floor. Anticipated improvements include
a flexible seating system, much enhanced technical capacity (modern sound, lighting, projection, etc.)
and improved public spaces.
The total cost is estimated at $46.7 M -which includes infrastructure improvements to address ADA
accessibility and retrofits for earthquake safety in conformance with the Secretary of the Interior
standards for historic preservation for an estimated $26M. The balance includes soft costs and
substantial technical and "green" improvements to the facility. The City has issued a "request for bid"
which will be available in a few months.
Has this cost increased?
In preparing the Santa Monica Redevelopment Agency's 2009 five year implementation plan, a
preliminary estimate was developed for the improvements to the Civic Auditorium. That estimate was
for $66M, towards which Council allocated $25M in 2009.
What about parking?
The proposed Nederlander deal calls for 1000 adjacent parking spaces on nights and weekends, and 630
spaces on weekdays. Replacement parking may become necessary if the City redevelops the surface lot
in the future. The City retains all parking revenue.
What about revenue from naming rights?
The estimated revenue from title sponsor naming rights is $1M to $2M total over a ten year period. An
aggressive campaign that named virtually all the spaces in the Civic Auditorium could generate
additional revenue.
What if the redevelopment funds were used to build Parking Structure 6?
One of the alternatives discussed by Council is to apply redevelopment funds toward the construction of
Parking Structure 6, estimated at between $40 and $43 million. The current financing plan for Parking
Structure 6 anticipates that increased parking revenues, Parking Authority funds and Downtown parking
in-lieu fees will finance the construction of the structure.
If redevelopment funds were used to fund all or part of the construction of Parking Structure 6, the
report mentions that the parking funds that would otherwise be applied to the financing of Parking
Structure 6 could be applied toward the creation of public parking at Fourth Street /Fifth Street /
Arizona Avenue. The staff report mentions that the transfer offunds could reduce the pressure to
create sufficient development value on the site to pay for the desired public parking.
There are other means available to the City to finance public parking, as identified in the Downtown
Parking Strategy. One option is to create an assessment district to support the creation of new parking
resources. The existing parking district assessment expires in 2016 and the Downtown Parking Strategy
anticipated that a new assessment would be created to support additional parking resources. Such an
assessment would need to be approved by a majority of property owners to whom the assessment
would be applied. Another option recommended by the Downtown Parking Strategy is to increase
parking rates to finance parking. The full range of parking rate adjustments proposed by the Walker
Parking Study has not been implemented. Since parking rates were increased last year, occupancy has
remained strong, indicating that prices have not yet reached an elasticity breaking point for most users
of the parking facilities.
ity u cil, a evel® n
~~tYO, ency and u lic Finance
Santa Monica
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City Council Meeting: May 24, 2011
Agenda Item: ~~
To: Mayor and City Council
Chairperson and Redevelopment Agency
Chairperson and Public Finance Authority
From: Andy Agle, Director of Housing and Economic Development
Carol Swindell, Director of Finance
Subject: Redevelopment Agency Immediate Funding Opportunities
Recommended Action
Staff recommends that the City Council (Council) and Redevelopment Agency
(Agency):
1. Consider immediate redevelopment funding opportunities and direct staff to
prepare necessary contracts to take advantage of such opportunities as
recommended below;
Staff recommends that the Council:
1. Authorize the City Manager to negotiate and execute a memorandum of
understanding (MOU) between the City, Agency and Santa Monica Malibu
Unified School District (School District) to provide a stream of tax increment
funding to the School District for implementation of Phase I of the Civic Center
Joint Use Project (CCJUP);
2. Authorize the City Manager to negotiate and execute a funding agreement
between the City, Agency and Exposition Metro Line Construction Authority
(Expo) and/or Los Angeles County Metropolitan Transportation Authority (Metro)
to provide a stream of tax increment funding to Expo and/or Metro for basic
elements of the Downtown, Memorial Park, and Bergamot light rail stations;
3. Approve the payment of issuance costs associated with the 2011 Bonds and
approve the modification of agreement with Stradling, Yocca, Carlson,. and Rauth
(SCYR) to increase total to not exceed $400,000.
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4. Adopt the attached Resolution approving the issuance of Earthquake Recovery
Redevelopment Project Area, Series 2011 Tax Allocation Bonds (2011 Bonds)
by the Santa Monica Public Financing Authority, and making certain
determinations relating thereto; and,
5. Appropriate funds and adopt budget changes as outlined in the Financial Impacts
and Budget Actions section of this report.
Staff recommends that the Agency:
1. Authorize the Agency Executive Director to negotiate and execute a
memorandum of understanding (MOU) between the City, Agency and Santa
Monica Malibu Unified School District (School District) to provide a stream of tax
increment funding to the School District for implementation of Phase I of the Civic
Center Joint Use Project (CCJUP);
2. Authorize the Agency Executive Director to negotiate and execute a funding
agreement between the City, Agency and Exposition Metro Line Construction
Authority (Expo) and/or Los Angeles County Metropolitan Transportation
Authority (Metro) to provide a stream of tax increment funding to Expo and/or
Metro for basic elements of the Downtown, Memorial Park, and Bergamot light
rail stations; and,
3. Adopt the attached Resolution authorizing the issuance of Earthquake Recovery
Redevelopment Project Area Series 2011 Tax Allocation Bonds (2011 Bonds) by
the Santa Monica Public Financing Authority, and approving and authorizing
other official action and matters related thereto.
Staff recommends that the Public Financing Authority:
1. Adopt the attached Resolution authorizing the purchase and sale- of Earthquake
Recovery Redevelopment Project Area Series 2011 Tax Allocation Bonds (2011
Bonds), and approving and authorizing related documents and actions.
Executive Summary
In 2009, the Agency, in accordance with California Redevelopment Law, adopted its
Five-Year Implementation Plan for FY 2009-10 through FY 2013-14 (the Implementation
Plan) to delineate the goals, objectives, programs, and estimated expenditures for its
four redevelopment project areas. In preparing the Implementation Plan, the Agency
prioritized certain capital improvement projects for redevelopment funding based on
projections of available tax increment and debt financing structures.
Given pending legislative proposals to dissolve redevelopment agencies in California,
staff recommends that the City move forward immediately to establish funding or
construction obligations for those redevelopment priority projects that are sufficiently
developed to enter into contractual obligations. While this staff report focuses on
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immediate actions, staff will continue to move forward on all of the remaining
redevelopment priority projects, with the expectation that redevelopment will continue in
its current form. Staff recommends authorizing funding agreements for the Civic Center
Joint Use Project and Exposition Light Rail Stations Project, and pursuing contractual
obligations in the near-term for the development of Affordable Housing, Palisades
Garden Walk-and Town Square /Freeway Capping (PGW), Pico Neighborhood Branch
Library, Civic Auditorium Renovation, Colorado Esplanade, Pier Infrastructure, and Fire
Station 1, when appropriate. Additionally, staff recommends the Council and Agency
approve the attached Resolutions to proceed with issuance of tax-exempt bonds to help
finance the projects.
Background
On November 17. 2009, the Agency adopted its Five-Year Implementation Plan for the
period of FY 2009-10 through FY 2013-14, with established goals to support affordable
housing, disaster prevention and mitigation, community revitalization, commercial
revitalization, and institutional revitalization. The Agency established redevelopment
funding priorities to implement the programs and activities (the Projects) associated with
each goal. Priority allocations totaled $283 million and were based on a variety of
assumptions regarding growth in tax increment, borrowing costs, timing of borrowing,
State grabs of local funds, leveraging opportunities and State law. The Agency's
funding allocations for the priority Projects are summarized in the following table.
11/2009 Council
RDA Priority Projects Priorities
(in millions)
Affordable Housing 43.6
Civic Center Planning and Design 2.5
Palisades Garden Walk and Town Square 25.0
Civic Auditorium Renovation 25.0
Civic Auditorium District Projects 21.0
Early Childhood Education Center 4.4
Expo Green Streets and Pathways 20.g
Exposition Light Rail Station Enhancements 10.0
Civic Center Joint Use (Phase 1) 57.0
Civic Center District Shared Parking 25.0
Memorial Park Expansion 2.3
Pico Neighborhood Branch. Library 12.g
Traffic Signal Master Plan 4.4
Freeway Capping & Bridging (Colorado/Ocean Sidewalk Widening) 2.0
Property Acquisition 27,0
Total $282.9
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On August 10. 2010, to ensure the timely implementation and completion of the
Projects, the City ahd Agency entered into Cooperation Agreement No. 9267
(CCS/RAS) for the City to carry out the Projects on behalf of the Agency, and, on
January 17, 2011, following analysis of the Agency's financial obligations for the
Projects, the City and Agency entered into Implementing Agreement No. 9318
(CCS/RAS) to set forth the schedule of payments to reimburse the City for costs
associated with the Projects' implementation.
On March 8. 2011, the Agency and Council approved an agreement with Wells Fargo
Bank for a loan with net proceeds of $60 million for the purposes of financing
redevelopment priority capital projects. The City also has a net balance of
approximately $50 million of Agency funds that were transferred to the City in order to
meet the Agency's obligations under Cooperation Agreement No. 9267. As a result, the
City has approximately $110 million available for projects that are ready to move
forward in the coming weeks. In addition, staff issued a request for, and identified, an
underwriter for Tax Allocation Bonds that would utilize the Agency's remaining tax
allocation bonding authority. If the bond offering is ultimately successful, it would
provide approximately $36.5 million of additional funds for projects, bringing the total
amount available within the next two months to an estimated $146.5 million.
In January 2011, California Governor Jerry Brown announced his intention to eliminate
all redevelopment agencies in California as part of his proposed FY 2011-2012 budget.
State legislation regarding the fate of redevelopment is pending, with several proposals
and bills having received varying levels of support from legislators. As of May 13, no
decisive action has been taken. In light of the State challenges, it is prudent for the City
and Agency to continue to pursue appropriate measures to ensure that as many
projects as possible are completed according to community expectations.
Discussion
In the two years since adoption of the Implementation Plan, several priority
redevelopment projects have achieved critical path milestones in design development,
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community input, environmental analysis and development of construction cost
estimates. A comprehensive summary of each Project's description, status and refined
project costs is provided in Attachment A.
There are four projects that are ready or will soon be ready to move forward with
design-build contracts, two projects for which funding agreements can be established,
and three projects requiring new contract authority as part of their ongoing work.
Design-Build Contracts
PGW is completing design development and the Pico Branch Library is completing
schematic design this month. CEQA review has been completed, and both projects are
ready to enter into design-build contracts. The Civic Auditorium Renovation and
Colorado Esplanade's scopes of work have been sufficiently developed to enable
design-build RFBs to be issued. The Civic Auditorium's RFB for adesign-build team
was posted on April 29, 2011.
Project Estimated Full
Development Cost
Palisades Garden Walk /Town Square /Freeway Capping` $ 46.1 million
Pico Neighborhood Library $ 10.4 million
Civic Auditorium Renovation $ 46.8 million
Colorado Esplanade $ 12.4 million
TOTAL DESIGN-BUILD CONTRACTS $115.7 million
`NOTE: Full project cost is $49.3 million; however, $3.2 million has already been awarded for design.
The proposed amounts noted above reflect the latest full development cost estimates of
the four projects. These cost estimates are less. than the original full development cost
estimates presented to Council in 2009, though in the case of PGW and the Civic
Auditorium, the current estimated costs are greater than the RDA funding allocations
made in 2009, which were initially estimated at $54 million and $55 million, respectively.
For PGW, the City applied for a State Prop 1-C Infill Infrastructure grant of over
$15 million, with all indications that the application would be successful based on the
awards made in the first round of Prop 1-C grants. This grant program was designed to
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provide funding for open space improvements that would serve affordable housing
projects and, although the City's grant application emphasized the strong linkage that
would be provided between PGW and the adjacent Village housing project, the grant
application was not successful, leaving PGW underfunded.
For the Civic Auditorium renovation, through its due diligence and negotiations with
Nederlander, the Gity has learned that performing arts and concert venues operate with
slim margins and cannot produce revenues that can fund significant capital
improvements. Council directed staff to work with the Civic's financial consultant to
determine if there are viable private financing strategies that could generate significant
additional revenue toward the renovation. To date, strategies that have been analyzed
would either yield limited funds, add to the operating deficit, require an expensive and
speculative fund-raising. campaign, or require major land use changes to the Civic
Center area to allow for adjacent private development to support the project. An
information item transmitting this report to Council was provided on May 13. 2011.
Staff struggled with the large anticipated cost associated with renovation of the Civic
Auditorium and ultimately decided to recommend that the City move forward
immediately with renovation of the Civic due to its priority as a community objective, its
importance in providing long-term fiscal stability for the City, and the ideal timing to
make the investment. More information on the considerations regarding funding the
Civic Auditorium is provided in Attachment B.
The current cost estimate for the Pico Library is lower than the 2009 RDA allocation
because the original cost estimates anticipated subterranean parking, which is not a
part of the proposed project.
The Colorado Esplanade project is recommended for adesign-build contract of
$12.4 million as the first priority project under the Expo Green Streets and Pathways
Project, and includes the required match for the awarded Metro Call for Projects Grant
of $3.3 million. In addition, the scope for this project has been increased to address
providing improved pedestrian access to PGW.
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Staff recommends that all four projects be fully funded at this time to ensure that they
can move forward immediately
Funding Agreements
Two of the redevelopment priority projects are proposed to be completed by other
entities and staff recommends that the City and Agency immediately enter into funding
agreements to enable the projects to continue moving forward. The projects and the
proposed structure of the funding agreements are described below.
Civic Center Joint Use Project
Under the Implementation Plan, $57 million of Agency funding capacity was prioritized
for the CCJUP. The City's adopted Capital Improvement Project budget for FY 2010-11
included approximately $1.1 million in general funds for planning and design for the
CCJUP. In January 2011, the City and School District entered into an MOU to provide
for the City's reimbursement to the School District for additional planning, design;
project definition work, and initiation of environmental review up to approximately
$1.1 million.
On April 6, 2011, the School District Board adopted the project description for the
CCJUP shown in Attachment A. Staff supports the proposed description and
recommends that the City and Agency authorize the negotiation and execution of an
MOU with the School District for further development of Phase 1 of the CCJUP. The
MOU would provide the terms and conditions for additional planning, completion of
environmental review, design, entitlements, and project development and management
work, and provide that upon the School District's compliance with CEQA, construction of
the CCJUP may proceed. Funding would be disbursed in a stream of payments for the
completion of the CCJUP. The agreement would also ensure that the District is kept
whole with respect to tax increment pass-through payments.
The MOU is a funding mechanism for environmental review and construction of future
facilities to be identified and approved for construction after compliance with CEQA, and
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is therefore exempt from CEQA pursuant to CEQA Guideline 15378(b)(4). The first year
payment to the District under the MOU is projected to be $5.9 million.
Exposition Light Rail Stations
Under the Implementation Plan, $10 million of Agency funding capacity was prioritized
for Exposition Light Rail Station Enhancements to fund station area enhancements such
as additional platforms, crossings and station entrances. Metro is requiring each
jurisdiction within the County that will receive light rail to make a three percent
contribution toward the construction costs withih its jurisdiction. For Santa Monica, the
estimated contribution cost is not to exceed $16.5 million. As the light rail line has been
further defined, and as the City has prepared station area analyses as part of the LUCE
and subsequent planning studies, the .estimated cost for stations and station area
access improvements is approximately $49 million, including the City's $16.5 million
contribution toward basic light rail station development in Santa Monica. Staff
recommends that the Agency and City enter into an agreement with Expo and/or Metro
to provide for a stream of payments over a period of no less than four years to be
applied toward the basic construction of light rail stations in Santa Monica. The first
payment would be drawn from tax increment revenues in 2012 and thereby would not
affect the Agency's current available cash. The funding agreement would ensure that if
the final construction costs for the Exposition Light Rail Line are less than currently
budgeted, the City would receive a proportionate reduction in its contribution. Funding
for enhancements to the basic light rail stations will be considered at a future point.
Additional Obligations
Afifordable Housing
Under the Implementation Plan, the goal of affordable housing is to continue to facilitate
the acquisition, rehabilitation and construction of residential buildings to increase,
improve, and preserve the supply of affordable housing. The Agency's $50 million line
of credit for affordable housing has enabled the City to invest in the production and
preservation of approximately 370 affordable residences in 13 developments. In
addition, the Council allocated $43.6 million from the Earthquake Project Area's non-
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housing funds to support affordable housing. In line with this effort, staff has identified
$21.2 million in acquisition, design, and construction projects and is ready to commit
funds for these projects at this time. Staff is working on due diligence for the projects
utilizing the remaining $22.4 million allocation and will commit the funds as each project
becomes ready. Combined, the $43.6 million funding will produce approximately 126
affordable residences.
Early Childhood Education Center
Under the Implementation Plan, $4.4 million of Agency funding capacity was prioritized
for the Early Childhood Education Center (ECEC) to supplement existing
redevelopment funds of $1.163 million allocated in FY 2006-07. The ECEC is to be
developed and operated by Santa Monica College (SMC) in cooperation with the City.
To ensure that the project moves forward expeditiously and that the pass-through
payments for SMC are sustained, staff has identified General Funds to cover the
$5.63 million needed for the project; these funds will be highlighted in the proposed
Capital Improvement Project FY 2011-12 budget.
Pier Improvements
Under the Implementation Plan, the goal of disaster prevention and mitigation supports
efforts to repair, replace, upgrade or reconstruct buildings, public facilities and utilities.
The Agency has supported activities such as the seismic retrofit of parking structures 1,
2, 4, 5, 7 and 8 in the downtown, the seismic retrofit and repair of Palisades Bluff, and,
more recently, the seismic retrofit and renovation of the Civic Auditorium. Staff
recommends the $5.63 million (previously allocated to support the construction of the
ECEC) be utilized to fund the seismic and infrastructure improvements necessary to
retrofit and repair the Pier. Specifically, the $5.63 million allocation would fund the
following Pier Infrastructure projects:
® Pier Infrastructure Phase IV: $674,200. This project involves the reconstruction
of the Municipal Pier from the upgraded timber area at Bent 41 at the high-tide
line to the existing concrete-pile supported area at Bent 59, using a concrete sub-
structure and timber superstructure designed to accommodate a 20 ton
emergency vehicle. This section of the pier currently has limited capacity to
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support emergency vehicles and the existing timber substructures have limited
life and higher maintenance costs.
• Carousel Floor and Infrastructure Repair: $841,000. This project involves
replacement of the oak floor of the Carousel Building and substructure repair
which include repair and/or replacement of stringers, piles and caps, relocation of
utilities and relocation and reassembly of the carousel during the project. The
Carousel floor is currently buckling and sinking in certain areas, potentially
creating unsafe conditions for visitors.
• Newcomb Deck Infrastructure: $4.1 million. This project involves constructing
the recommended structural upgrades to the Newcomb's parking deck and
walkway areas to support loads of 30,000 pounds for vehicles and future
buildings. The Pier Infrastructure Upgrade Study, submitted to Council on
May 19. 2009, examined the existing conditions on the pier and prioritized the
phasing of the upgrades based on urgency of repairs, the Newcomb Deck repairs
were identified as a high priority.
Fire Station 7
As noted above, the Implementation Plan includes the goal of disaster prevention and
mitigation to support efforts to repair, replace, upgrade or reconstruct buildings, public
facilities and .utilities. Fire Station 1 (FS 1), located at 1444 7th Street, services a
significant portion of the Agency's Earthquake Recovery Redevelopment Project Area.
Based on a recent study of the seismic integrity of FS 1, this nearly 57-year-old facility
needs to be replaced in order to comply with current ADA accessibility guidelines as
well as seismic and building and safety standards, and to meet the current needs of the
Fire Department. Staff recommends an allocation of $3 million to fund the development
of plans and specifications for an approximately- 25,000-square foot replacement fire
station featuring basic improvements such as apparatus bays, dormitories, training
room, locker room, kitchen and dining facilities, storage and mechanical areas, and
parking.
Financing Program
The financing plan for the priority projects anticipated the use of various debt
instruments to maximize funding. As noted in earlier reports, City staff and consultants
would analyze the projects to be financed in order to determine the financing structure
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that best meets the Agency's needs in maintaining flexibility and reducing the overall
costs of borrowing. Based on study by the Agency's financial advisor and bond
counsel, it is recommended that the Agency proceed with the issuance of tax-exempt
tax allocation bonds (TABs) to help fund the projects.
The Agency has the opportunity to issue tax allocation bonds with expected net
proceeds of $36.5 million. The Agency has previously sold its bonds through a
competitive bid process where the bond offering is advertised and bids for the bonds
are taken on a specific date and time and awarded to the bidder offering the lowest
costs. In order to provide the Agency with greater flexibility in determining the date of
sale of the Series 2011 Bonds, staff is proposing to sell the Series 2011 Bonds through
a negotiated sale whereby the bond underwriter is predetermined and the interest rates
for the bonds are set through a process of negotiation. The Agency's financial advisor
believes that a negotiated sale has the best chance of providing the lowest borrowing
cost to the Agency given the relatively small size of the Series 2011 Bond issue, the
absence of a competitive sale market at this time for redevelopment agency credits and
the added uncertainty surrounding redevelopment due to the Governor's budget
proposals. In order to provide for a negotiated sale under State law, the Series 2011
Bonds will be sold initially to the Santa Monica Public Financing Authority, who will in
turn immediately sell the Series 2011 Bonds to the bond underwriters.
The attached. Resolutions authorize the Agency to proceed with the issuance of the
Series 2011 Bonds, with a maximum principal amount of $41.05 million, a final maturity
date of June 2042, and a maximum true interest cost of 7.75 percent. After depositing
$4 million in the debt service reserve and deducting $0.6 million in issuance costs, net
proceeds will be approximately $36.5 million. The actual amount of proceeds will
depend on the final bond interest rates, based on market conditions.
The Resolutions also provide authority to execute related documents, certificates and
actions necessary to complete the financing. The Public Financing Authority resolution
will authorize the Public Financing Authority to purchase the Series 2011 .Bonds and to
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immediately sell such Series 2011 Bonds to E. J. De La Rosa & Co. Inc. as
representative of itself and Wells -Fargo Securities pursuant to a Bond Purchase
Agreement to be entered into between the Underwriters, the Agency and the Public
Financing Authority.
The issue costs associated with these bonds will include bond and disclosure counsel
fees, financial advisory fees, fiscal consultant and other costs not to exceed $340,000
and the underwriter's discount cost not to exceed $235,000, for a total of $575,000. The
current contract with SYCR, bond and disclosure council limits compensation to an
amount not to exceed $220,000. For the fees associated with this bond issuance and
others anticipated in the near term, staff recommends that this contract amount be
increased to $400,000.
Available Current Funds and Recommended Commitments
Available Funds
Wells Fargo Bank Loan Net Proceeds $ 60.0 million
Available Cash Assets $ 50.0 million
Total $110.0 million
Estimated Prospective TAB Net Proceeds'' $ 36.5 million
Potential Capacity $146.5 million
`NOTE: Amount is net of closing costs and funding of the debt service reserve.
Recommended Commitments
PGW Design-Build Contract $ 46.1 million
Civic Auditorium Renovation Design-Build Contract $ 46.8 million
Pico Neighborhood Library Design-Build Contract $ 10.4 million
Colorado Esplanade $ 12.4 million
CCJUP MOU with District (2011 payment) $ 5.9 million
Light rail station agreement with Expo (payments begin in 2012) $ 0 million
Pier Improvement (2011 payment) $ .7 million
Affordable Housing (2011 payment) $ 21.2 million
Fire Station 1 (2011 payment) $ 3.0 million
Total $146.5 million
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Alternatives
Should the Council wish to fund projects other than those recommended, the alternative
projects would need to be ready to establish construction contracts, design-build
contracts or other contractual obligations within the coming weeks in order to take
advantage of available cash and loan and bond proceeds. Other projects that could be
ready to take advantage of the timing window include:
® Affordable Housing: With additional funding, the City could quickly establish loan
agreements with affordable housing providers to purchase .existing apartment
buildings for rehabilitation or to acquire property for new' construction. One
additional affordable residence could be created through acquisition and
rehabilitation or new construction for every $300,000 to $350,000 invested in
affordable housing.
® Parking Structure 6: Funding could be used for the reconstruction of Parking
Structure 6. The estimated cost of Parking Structure 6 ranges from $40 to $43
million, depending on the additional features that may be included, such as rear
facade improvements and occupancy sensors. Staff expects to return to Council
with adesign-build guaranteed maximum price for the project on June 28, 2011.
Funding Parking Structure 6 with redevelopment funds could allow the parking
funds that have been designated for Parking Structure 6 to be used to help pay
for the some of the public parking ultimately planned for the site at 4th Street and
Arizona Avenue. Additional funding for .public parking could reduce the
pressures to create development value on the site to subsidize the cost of public
parking. The parking funds that would have otherwise gone to Parking
Structure 6 could also be used for other parking needs in Downtown Santa
Monica.
® Exposition Light Rail Enhancements: On July 13, 2010, City Council supported
staff's recommendations for design improvements to the Light Rail stations that
would address safety and functionality. City staff could work quickly with Expo
staff to identify costs for the desired betterments to the planned rail stations in
Santa Monica. The City and Expo could then expeditiously enter into an
agreement to fund Expo's construction of the desired betterments. Preliminary
cost estimates for potential station betterments range from $20 million to $33
million.
® Traffic Signal Master Plan Phase IV: Phase IV of the traffic signal master plan
covers the intersections in the Mid-City area and Arizona in the downtown. Staff
anticipates that a contract of $4.4 million for the work could be awarded early
next fiscal year.
13
Next Steps
With Council approval, and market support for the Agency's issuance of tax allocation
bonds, staff will move forward with the projects recommended in this report. In addition,
staff will continue to further define and plan all of the Agency-funded priority projects.
Once there is more clarity on exactly which legislative measures, if any, will be adopted
by the State with respect to redevelopment agencies, staff will return to Council with an
updated funding capacity analysis. While some of the recommended project
commitments are greater than the original Council earmarks, it is likely that there will be
sufficient funding capacity for all of the priority project allocations if redevelopment
continues in its current form. A primary reason is that the original debt capacity analysis
completed in 2009 anticipated that the State of California would take over $4 million per
year of Agency funds. With the passage of Proposition 22 in November 2010, the
State's ability to take local redevelopment funds has been curtailed. However, given the
Governor's proposal to completely eliminate redevelopment, as well as the variety of
alterative redevelopment proposals in Sacramento, any long-term projections of the
Agency's funding capacity would be unreliable.
Financial Impacts & Budget Actions
It will be necessary to establish revenue budgets for the proceeds from the issuance of
the Series 2011 Bonds and payment of issuance costs. Revenue and expenditure
appropriation actions necessary at this time to record the sale of the Series 2011 Bonds
follow:
Account Name
Other Financing Sources
Bond Issuance Costs
Underwriter's Discount
Amount Account Number
$41, 050, 000 17990.601003
$ 340, 000 17274.555980
$235,000 17274.555980
The following budget appropriations are necessary to fully fund the projects that will be
entering design-build contracts or funding .agreements in FY 2010-11. A number of
these projects have already received previous budget appropriations.
14
Account Name Amount Account Number
Palisades Garden Walk & Town $ 46,098,276 0172071.589000
Square/Freeway Capping
Civic Auditorium Renovation $43,749,800 0174053.589000
Colorado Esplanade $ 12,002,049 0177040.589000
Pier Infrastructure Improvements $ 674,200 New account
Fire Station 1 $ 3,000,000 New account
Low/Moderate Income Housing $ 13,078,475 017005010.589000
Low/Moderate Income Housing $ 3,000,000 015004911.589000
Any approved funding commitments beyond FY 2010-11 will be appropriated in
subsequent fiscal years.
Prepared by: Nia Tang, Senior Development Analyst
Approved:
Andy Agle, Director
Housing and Economic Development
Forwarded to Council:
~ ~~h
Rod Gould
City Manager
~~
Carol Swindell
Finance Director
Attachments
Attachment A: RDA Priority Projects -Updated Costs and Status
Attachment B: Civic Auditorium Funding Considerations
Attachment C: Resolution of Issuance of Tax Allocation Bonds (Agency)
Attachment D: Resolution Approving Issuance of Agency Bonds (City)
Attachment E: Resolution Approving Purchase and Sale of Bonds
Financing Authority)
Attachment F: Second Supplement to Indenture of Trust
Attachment G: Continuing Disclosure Certificate
Attachment H: Preliminary Official Statement
Attachment I: Bond Purchase Agreement
15
(Public
ATTACHMENT A
RDA PRIORITY PROJECTS -UPDATED COSTS AND STATUS -MAY 2011
~~~ ~ r
RDA Pnoniy P"rojects ' r J ~~
PrgecLDescr[pgon " ~~'
r ~ Project Status `~ ~ Nov'2009
~
~ Revised PfojecL:
.; ~,,,q :.
e. ... ..: .~ ,~
v..oc. ~.~ ..~
~ ~ a; ... ...
~ Allocabon
.
. :'.Costs.
~:. ...r:. ~.
Palisades Garden The Palisades Garden Walk and Town Square will Following a competdive bidding process the City Council 25,000,000 47,048,276
Walk (antl Town create seven acres of park space bountled by contracted with James Corner Field Operations totlesign
Square) Inlerstatel0 and Olympic Drive; City Hall and Ocean the parks. An extensive wmmunity engagement process
Avenue. A central component of the Civic Center incultling several community workshops was also
Specifc Plan (CCSP), these parks will provitle a undertaken. Staff anticipates going to Couricil in June
critical link between the Civic Center, Palisades Park, 2071 for approval of design development plans antl
the Pier and Downtown. awartl of a tlesign-build contract. It is Anticipatetl that
atltlitional funding, above the $26 million in RDA funtls
prioritized, will be neetletl to fully realize this project. This
project is on-schetlule: Anticipated Conslmilion Start:
early summer 2012. Anticipated Completion: fa112013.
:Freeway Capping & A key recommendation of the Civic Center Spec'dc In January 2010, the City contracted wdh AECOM to 2,000,000 2,260,000
Budging (Ocean Plan was to explore options for capping anumber of complete afeasibilily stutlyof freeway capping options,.
Sidewalk - different segments of Interstate 70. Cappstl areas including cost estimates. Based on the results, the
Witlening) '. would create new lantl for open space, parks, and immediate priority is the consWCtion of a limitetl freeway
pedestrian connections between Downtown and the capping and the widening of the sidewalk ai Ocean -
Civic Center Avenue to provide better access to the new Palisades
Gartlen Walk. Contract awartl is anticipated in June 2011,
final design anticipated in mid 2012. Anticipatetl
ConsWCtion Start: late 2072. Anticipated Completion:
2073-2074.
May 24 Staff Report Recommends Footling the Palisades Gartlen Walk & Town Square, antl the Ocean Avenue Freeway Capping Component in the near-term.
Civic Auditorium This project involves the design antl renovation of the Following a Request for Qualifications from non-pro&t 25,000,000 46,749,800
Renovabon historic Civic Autlitonum. Funds will support seismic and/or for-proft entities interested in participating in a
and accessibility upgrades to the lantlmark huilding as public/private partnership for the use antl programming of
well as some upgrades to equipment (lighting, sound, the Civic Auditorium, the City Council authorized the City
stage) antl builtling systems (i e, HVAC, acoustical; Manager to negotiate an agreement unth the Nededander
electrical). Organization in September 2009. On March 2011,
Council approvetl terms of the Nederlander agreement
'Staff issued a request for bitls for constmcgon, antl plans
to go to Council in June 2011 to awaN aconsWCtion
wnUact. Anticipated Constmction Stau: falNrvinler 2012.
Anticipated Completion: summer 2014.
May 245ta9Report Recommends Funding forme Civic Auditorium Renovation in fhe near-term.
Pico Neighborhootl An 8,300 square fool neighbomootl library will be built After issuing a Request for Proposals for the design, the 72,800,000 t0,400,ODD.
Branch Library in the Pico neighborhood at Virginia Avenue Park, on City executed a contrail wdh Koning E¢enberg
the wmer Clovefield antl Pico Boulevards The ' Architecture in June 2010. An uptlated sde survey antl an '
library willerihance existing park amenities, including geotechniwl report were completed in 2010, and four
the weekly Fanners Market, Commundy Center; Teen communty workshops were held to gather input on the
.Center; antl Park Center euiltling. new branch library. A schematic design is expected to be
complete by me end of FY 2010.2071. Anticipate going
to Council idJune 2011-for awartl ofaconsWction
contract. Anticipatetl Construction Start: 2012. Anticipatetl
Completion 2013.
May 24 Staff Report Recommends Fundi ng forme Pica Neighborhood Branch LI62ry in the near-term.
Affordable Housing
_ Fgntls for affordable housing activdies (primarily Projects have been itlent~ed. Pepping tlue tliligenge. 43,600,000 63,934,950
through acquisftion and predevelopmen[donstruction
or rehabilitiation loans orgrants tonon-profiC
developers. Will fund an estimatetl 126 affordable
.housing units. Addiliorially, as notetl in the'
Implementation Plan,lhe Agency tletlicatstl all of the
Downtown Project Area's tax increment net of the
'housing set aside;debt and atlministretive costs to
increasing, improvingand preserving the supply of
affordable housing inane City. However; given the
requirement to repay the Generel FUntl for the$20.3
million debt associated wdh Downtown Project Area
promissory notes, starling in FY 2010-77, the available
tax increment from the Downtown Project Area to
support affordable housing will be insumcient. To
maintain the commitment of the Downtown Project
Area, tt is recommentletl that funds of $2D.3 million
from the Earthquake Project Area be sllocatetl to
supportthe Implementation Plan's affordable housing
: 'goals. This 520.3 million is Anticipatetl to preserve of
. builtl 68 residences antl will be included in the Ciys
capital improvement project butlget in future years.
May 24 StaSReport Recommends Footling of $21.2m forAUordable Housing in the near-term.
ATTACHMENT A
RDA PRIORITY PROJECTS -UPDATED COSTS AND STATUS -MAY 2011
'r'~
RDA Pnonty Projects " ~
Profectbescn
tron ~ ~ ~
~
Pr
ect
Status ~ Nov 2009"~~~ Revised Pro7eck`
p
• r ~ . ~.. ; ~
g
.
., ..: .~ AllocaLOri. ~~; ~ ':Costs:.
...~
~
Civic Center Joint The CCJUP. seeks to connen the School Disinct's ~ In June 2070, Council allocated $t 084 million in General 57,000,000 57000,000
Use Project long-range plan to improve the Santa Monica High Fund revenue to the CCJUP, which reduced total Agency
School campus with revitalization efforts underway in funding to $55.976 million, stnicWred as a stream of
the civic center. The CCJUP will expand recreational annual payments. In October 2070, Council authorized
and cultural facildies that the public can access when staff to negotiate a Memorandum of Understanding with
not needed by the high school. The improved joint use the School DisMC[ to spend the initial funding on
facilHies will include a full gymnasium that will include planning, design; and preliminary environmental review
basketball and volleyball courts; muNipurpose rooms on the project. Currently, the School District is moving
far dance or yoga classes, restrooms, showers, forwaM with technical studies for environmental review
dressing areas, and spectator acwmotlations. The and design, and has finalized a project description that
project will also resurtace the existing football feltl has been approved by the School District Board. City staff
wdh synthetic turt and may replace eMerior courts, or has worked with District staff to develop the terms of an
improve lM1e pool orfleltl spectator accomodalions. agreement far the remaining $55.9 million allocation. This
Atltlitionally, the CCJUP will expand cultural anivities May 24 staff report recommends authorizing stag to
by adding restrooms, dressing rooms, storage areas negotiate and execute that agreement and begin
for props and equipment, stage IighlinginfrasGuclure, disbursing the stream of payments.
and backstage enhancements for the Greek theater.
May 24 Staff Report Recommends ExecuGh9 the MOU with the School District and allocating $5.em for the firs! years payment.
Exposition Light Through discussions wHh the Ezposflion Rail Staff is exploring funding such as joint development 10,000,000 49,288,577
Rail Station Authordy, City staff now haveabetter untlerslantling opportunities, transit fees, and grant funding where
Enhancements of required costs, which are higher than anticipated. possible. Final design is anticipated in late 2011
Improvements to facilitate the incorporation of the Constriction anticipated in 2012-2015, depending on
Expo Slabons Downtown, on 17th Street, and al Expo schedule. The following enhancements for each
Bergamont; transit plazas, second entrances, bike statioh; reviewed by Council on July 73, 2010 Aprilg2,
station faciliffes; side plaffonns, and plaza 2011, have been identified as priordies for safety and
improvements, where applicable. Station "function:
enhancements for the Downtown Slalien inlcutle Downtown access for transit and bike ped:
necessary site circulation improvements, an expanded • Downtown Station Access - Fealign arid improve the 4th
plaza and a second entrance to the station on 4th Street off-remp to enable circulation around the
Street. Enhancements at the 17th Street Station Downtown Slalion and provide access to TOD sites
include converting Expo's planned surtace parking lot • Gateway Plaza
into a Transit Hub and Plaza Shuffle; and Bus Stop,' Bergamot Station access to Bergamot Arts Center:
and adding a Bike Center, sewntl entrance, rail • Second pedestrian crossing
crossing, and a roadway reconfiguration: • Side platforms
Ehhancements at the Bergamot Statiodinclude side Memorial Panc{access for bus, bike and ped:
platforms with a second entrance, atltlilional rail • Transit Transfer Plaza"-
crossings for improved access, aBike Center, and • Second Entrance at west end of stations
improvements to the Station Plaza wffhin the The revised total project costs includes a required Qty
Bergamot Arts Complex. match of $76.5m.
May 24 StaHRepoR Recommends Executing an agreement vAth Expo to coverthe City's required $76.5m contribution. Payments would not start un6720tt.
Expo Green Streets ConsWCtion of the Exposition Light Rail Transtt (LRT) Staff issued a Request for Quaycations (RFO) and then 20,900,000 58,667,809
and Pathways is scheduled to begin in Santa Monica in 2074. As the a Request for Proposals (RFP) for a consultant team to
Expo LRT project is more fully designed and as the '. develop criteria far integrating the Expo LRT; and design
City has conducted thorough analysis, it has become: '.a downtown station plaza antlan "Esplanade" along
clearer what atltlitional station design and wnsWCtioh ' Colorado Avenue. In Febniary 2010, ffie Council awarded
projects will be needed for optimal integration The a contract to Cityworks Design. Planning concepts and
project has been refined and tlescibed as four sub- project ident~cation are complete, and were reviewed by
projects Council on April 12, 2011: There are four sub-
. components to the overall project, described below.
Colo2do Avenue After cimula8'on and linkages analysis, stafrexpanded Stafris prepadnga revised RequestforProposais based 72,402,046
Esplanande the Esplanade Project to include the intersections of on the expanded scope. The five films that have already
Colorado with Main St. and Second St.; Main St. been selected (or the Short list will receive the RFP and
Bodge sidewalk improvements; enhancements to the bids for construction will be recieved shortly
vies! side of Ocean Ave. from the Pier to Moomaf
Ahiko to provide pedeSMan access fmm the Pierand
Palfsades Padc to Palisades Garden Walk; and
adjacent iMUence areas including the north side of
CO/o2do Avenue between 4th antl5th Street, 4th
Street between Colorado and the 4th Street bridge,
and linkages fo Ocean Ave. north of Colorado and to
The Pier
May 24 Staff Report Recommends allocating $72.4m to spend on the Colorado Esplanade in the near fens. Ofher components will occurin the futur e.
Colorado Avenue Catenary system betterments; Three crossings on Final design anticipated in late 2073; COn5tNCtion 9,378,352
Integre6on Coloredo; Ped lights, curt extensions and trees; anticipated in 2075.
Landscaping, safety LED and reflectors; artist fencing;
Silva cells fornamow sidewalk tee installation; Sa/ety
enhanced paving treatment for parking lane.
I
Bike Nefwork These funds ale needed to make necessary $1.2m forbike lanes and wayfintling can be committed in 5,237,420
Improvements circulation improvements fo minimize conflicts with FY 2077-2012.
bikes, petlestnans and buses at the future Expo
Downtown Station.
ATTACHMENT A
RDA PRIORITY PROJECTS -UPDATED COSTS AND STATUS -MAY 2011
~` ~ `
k6A Pnonty Projects j r ~
~ protect descnQfion ~ ~ ;" r~~
ProJeck Status Novi2009 ~.
~~ Revised PrajecE
`
~cu r ~.,. cm. k ti
.:..: ..~ ..... ~ ., r; :: ~: ~
s, .:..~ ~ ..:~.; ..
~ Allocation°> :
.. ~ FPets
>
....
Downtown Ekpo 4th St. brdge wldeningend pedesMan rmprovements; Adtlrhonal Nnding forthls project is requested fo cover 31,655,988
Circulation 4th St. off-ramp, 7th Street bridge bike antl pedestrian the Pierbike bridge, schemaL'c desing and engineering
Enhancements improvements; antl Pierbike bridge. tlesing/tlocumentaticn for the 4th street etldge
Improvements and 4th Street pff 2mp.
Pier Improvements The Pier is in need of several repairs antl upgmdes that are consistent wAh thetlisaster prevention and mitigation goals of the Earthquake Recovery
Retlevelopment Project Area. The three subprbjeclslisted below describe the necessary improvements.
Pierlnf25tructure As part of the PieYS phased infrdstruclure While a recentinspechon indicated that none of the ofr 0 674,200
improvements program, the next phase to complete is shore piles on the Municipal Piershowed damages
Phase IV- the reconst2cbon of the Municipal Pier requiring immediate attention, emergency vehicles
from the upgreded timber area at Bent 41 at the high- exceeding 20 tons cannot be supported in this area
tide line to the existing concrete-pile supported area without the femporery intervenG'on of steel plates. Wodc
at Bent 59 using a concrete sub-structure and timber will also include utility relocation, design, fabdcation and
superstructure designed to accommotlate a 20 tan installation of new udlity supports.
emergency vehicle.
May 24 Staff Report Recommends allocating $700k to spentl on the Pier Infrastructure Improvements in the neat-teml. Othercomponents will occur in the future.
Carousel Floor and Carousel Floor Replacement and substructure repair The Carousel flooris buckling and sinking in areas, 0 84 f,000
SubsWCfure will involve replacement of the oak floor of the potentially creaG'ng unsafe conditions for visitors. In
Carousel euiltling antl substructure repair addition, a preliminary review of the substructure untler
the floorshows evidence ofdeterioration. It mayinvolve
the repair and/orreplacement ofsMngers, repair and/or
replacement of piles and caps, relocation of utilities, and
relocation and reassembly of the carousel tludng the
project.
Newcomb Dect The Newcomb Deck involves the structure/ upgrades The Pier/n(restructure Upgrade Study, submitted to 0 4,048,446
Infrastructure ofthe Newcomb's deck and walkway area. Council on May 19, 2009, ezaminetl conditions on the
Newcomb Pier and recommended structure/ upgrades to
the Newcomb's parking deck and walkway areas that
would accept loads of 30,000 pounds either Nrvehicles
or for future buildings. This study prioritized the phasing
by year o/the upg2tles based on urgency of repair.
Fire Station 7 Design and builtl a fre station in Downtown.. In preliminary planning phase. (Preliminary cost 0 53,000,000
(Preliminary cest estimate). estimate). However, due to seimic problems with the
existing fre station, this project is a high priority and will
be expetlRed to the extent possible.
May 24 Staff Report Recommends allocating $3m in the neaFtenn.
~,~ r r ~r Pfofed~NOtAd~res~ed by AaLOps.irlthe May grf Staff Report
. .: .. .. .a^ ......, :~ .. :..?:. .... .... ,.... .g.
Traffic Signal Amufti-phased upgrade of the City's traffic signal < Cunently finishing the design if Phase IV; construction 4,400 000 4,400,000
Master Plan technology wi0allow forcentralized management of contract anticipatetl in FY 2011-2012
the Cfly's 1fi0 signals in teal time to handle incidents,
special events and unique timing needs: Previous
phases were completetlih poor years: This funtling is.
for Phase lV which includes the Mid City area.
Civic Center The Civic Center Specific Plan (CCSP) resultetl in Funtls have been spent on staffing, planning and design 2,500,000 2,500,000
Planning & Design plans, concept designs; antl studies tot various project work for Civic Center area projects, inclutling feasibility .
wmpondnts of the Civic Center, especially public analyses, circulation studies, freeway capping antl
open spaces cultural faciliLes antl renovation antl bridging analysis, and initial staffing costs.
upgrades to the Qvic Center AutlROrium: These Euntls
are tletlicatetl to refning the CCSP goals by funtling
plans, concept designs, and studies for various project
components of the Civic Center '
Early Childhood 'The Civic Center Specifc Plan (CCSP)calls forthe After delays tlue to uncertainty of siting plans fora 4,400,000: 0
Education Center orealion of art early dhildfiootl education center museumlcultural facility, staff has resumetl negotiations
(ECEC) ld provide a teaming environment for Santa on an MOU with SMC. The Center will likely be located in
Monica College (SMC) students and a childcare facility the area tlesignaletl in the CCSP (leaving an opportunity
for the civic center: These funds will cover site fora cultural facility in place while allowing the ECEC
improvements(only) to allow SMC to construct the project to progress). The ECEC will likely be designed
ECEC at the Civic Center antl built by SMC. Note: Tnis project will now be coveretl
by the general fund
Civic Auditorium These open space and culture) facility projects will After opportunities for an EIi Broad museum fell through, 21,000,000 21,000,000
District Projects) `occupy the block bounded by 4th, Main, Pico, antl staff issued a notice of opportunity to other potential
Civic Center Drive. The projects include a new 5.6 museum founders antl is actively exploring possibiltties.
acre park and a potential cultural facility with Design and donstucion of open space improvements on
slreetscapes and pedestrian linkages designed to the Civic Auditorium Campus are sequenced to occur
complement the Civic Auditorium Renovation antl the following the use of portions of the site for constnrcion
ECEC.(tlescribed below). staging for the Civic Autldodum Renpvatiogfor the Early
Childhood Education Center, and for interim parking use
during the cansWction of downtown improvements.
ATTACHMENTA
RDA PRIORITY PROlECiS -UPDATED COSTS AND STATUS -MAY 2011
~,~
a
~
~ ' ~.
~
Nov 2004
~.~
t;.
sect P{ojec
vi
R,qA Pnonty pro/
cts , Pro/eat Descnption ~ Project Status
~
~ ' °
,~~
~ ~ ~ .; .
,
~ . a ....
.., :. AIIoc
ation
.. Cosfr
,?
.
.
. ,.:... ..
..,.~::U ..... .. ...~: .. .. .... ;, .. ...~ .. ; .,. ... ."... .~.. .. :?; ..
~Sharetl Parking Efforts le capitalize on sharedparking opportunities This project ispn hold. The interim parking plan requires 25,000,000 25,000,000 '
-'are a priorRy as Civic Center projects proceetl with full use of the cunent surtace parking area until 2016.
planning antl tlesign. A traffic circulation stutlywas This project is also gentling further assessment of
completed to consitler optimal circulation based on downtowri circulation parking neetls when Expo and the
the Civic Center Speck Plan build ou[ and phasing, repurposetl auditorium are operating
while planning for effective Civic Center circulation in
relation to the Downtovm as well. This would fund a
maximum of of 7,350 subtertaneanparking spaces at
one or more locations in the Civic Center, 'rf they are
needed
Memorial Park This project invovles a Master Plan for Memorial Park, The inHiatien of the park master plan process is pending 2,300,000 2,300,000
Expansion :Including ident~cation of replacement sde for the Exposition Rail Authority decisions regarding the new light
Communky Maintenance activities occupying the 2.9 rail ahgnmenl, which includes a station next to Memorial
acre former Fisher Lumber stte; environmental review, Park on Colorado. It is likely that the Fxpo project will
'.and design of Phase I park improvements. need tc "lake' of one to two of the buildings on this site
and eliminate street parking on one side ofCOlorado
Given the significant impacts this property"take°would '
have on the Colorado Yards, public parking; options fof
park expansion antl the importance of properly linking the
park to the station, the planning for the Memorial Park
Expansion is on holtl until a resolution is reached
Civic Center-Cafe This Civic Center outtloor cafe for Palisades Garden Through the planning and design stages to tlate for the 0 3,916,250.
for Palisades Walk (PGW) is called for in the CCSP. Apark- PGW, community members antl Council have reiterated
Garden Walk Park adjacent restaurant was indptletl for this location as the need and desire for a park grientetl cafe. An outdoor
part of the CCSP cafe will be locatetl near ariexisting restaurant (Chez
Jay),currently untlera monthly lease agreement wdh the
City; that will integrate into and serve the park. An
analysis is uhtlertvay to determine the market need antl
- '. physmal parameters of a successful cafe. The City will
need to solicit a padner/operator forthe cafe and there is
astrong likelihootl that the City will need to contribute to
'the design antl constmction of a restaurant kitchen and
cafe slmdure.
Property Continuation of the Downtown Parking Strategic Plao- Aomplete. In November 2010, the Agency purchased a 27,000,000 27,000,000
ACgwsmon ' through opportunities for acquisdion of appropriate '. key property at 4th Street and Anzona The parcel
properties. facilttates land assemblage on a key Downtown city
black. The property is being paid forthropgh an
established stream of payments, not included in totals
here.
`~TQ7AL
Cj15H€LOW NEEDS ar ~~r~ ~ r ~
r ~ ~ ~r ~ `292900000 ~ 48R 019308
, ~ -r
~ ;,
Attachment B
Santa Monica Civic Auditorium Renovation
History
The Santa Monica Civic Auditorium, designed by renowned Los Angeles architect Welton
Becket, opened in 1959. The facility was designated a City Landmark on November 12,
2001. That decision was upheld by the City Council at its April 9. 2002 meeting. Over the
course of its history the Civic has been the subject of a number of studies as the City
grappled with its future such as the June 2004 Urban Land Institute report.
Community Vision
The Santa Monica Civic Auditorium has also been an important component of a number of
recent community planning initiatives. Each of these processes confirmed the community's
desire to see the venue brought to life as a focal point for large musical and cultural
performances. They include:
® Civic Center Specific Plan (CCSP), June 2005, defines the "Civic Auditorium District"
with the Civic Auditorium as its cornerstone, to be bordered by open space as well
as an early childhood education center and additional cultural facilities. The CCSP
identifies the need to make improvements to the Civic Auditorium as a venue for
large musical and cultural performances as well as exhibitions and community
gatherings.
® Creative Capital, approved by City Council on Februarv, 27, 2007 committed the-City
to a cultural use of the Civic Auditorium in line with the community's vision for the
facility. That vision includes the need for significant upgrades to the building and its
technical equipment in order to support its repurposing from primarily an exhibition
hall to primarily a cultural venue or performing arts center, highlighting concerts,
theatrical shows and other special events.
® The Santa Monica Redevelopment Agency's five year implementation plan, adopted
November 17. 2009, includes an allocation for Civic Auditorium. During the
extensive community process that the City undertook to develop that plan, investing
in the renovation of the Civic Auditorium emerged as the key cultural priority.
Renovation
Once renovated, the Civic Auditorium would become a state of the art facility while retaining
notable characteristics such as the facade and the hydraulic floor. Anticipated
improvements include a flexible seating system, enhanced technical capacity (sound,
lighting, .projection, etc.) and improved public spaces such as the lobby and concession
areas. The renovated facility would be able to host a full range of events from concerts to
award shows, including corporate events and consumer shows.
Timin
The confluence of the economic downturn's impact on construction costs and the option of
RDA funding create a unique opportunity for the renovation of Civic Auditorium. The City
1
Attachment B
recently issued an RFB for adesign-build team for the renovation and close to two hundred
interested parties attended the recent job walk. Interest in the project is extremely high and
will undoubtedly ensure a highly competitive and responsive process. If the City were to
undertake the renovation in the future it would likely come at a much higher cost, with fewer
responses from highly qualified teams.
Return on Investment
® City-wide Economic Impact: The City can anticipate a substantial increase in
economic activity, primarily in the hospitality sector, as a result of repurposing the
Civic Auditorium due to spending by an increased number of attendees at an
expanded range of Civic Auditorium events. Strategic Advisory Group, the City's
consultants for this project, did an analysis of the projected economic impact of a
repurposed Civic Auditorium which shows an anticipated increase of approximately
95,000 attendees in year seven. of this proposed agreement over 2010, with an
estimated increase of almost $18M in combined direct spending and indirect
spending. A renovated Civic would also support the planned development in the
area by providing confidence in its long-term vitality and sustainability and by
attracting tens of thousands of visitors, many of whom will stay overnight.
® Enhanced Asset: Renovation of the Civic Auditorium would result in the
enhancement of a significant asset for the City and the creation of an outstanding
facility for the community. If there were a dramatic change in the concert and
performing art industries, such-that the proposed business model failed, the City
would still own a first rate facility that could serve other community needs, such as
supporting the visitor industry through expanded convention and consumer shows.
Were the Gity to choose to return to programming the facility at that point, with a mix
of events and consumer shows, it is likely that the upgraded facility would be more
.competitive and attract events with larger audiences and a higher return.
Partnership Option
The proposed Exclusive Presenter/Joint Venture model invests Nederlander, a top industry
promoter, in the success of the venue and ensures that the City shares in that success.
Nederlander, established almost 100 years ago, is one of America's premier entertainment
companies with the ability to secure top headline entertainment based on long-term industry
relationships. Nederlander is one of the primary theatrical producers and theater operators
on Broadway, whose production list includes shows such as Lion King, Wicked, Rent,
Avenue Q, Stomp, Riverdance, Evita and Chicago, among many others. Nederlander also
has a major concert programming division that works with a broad array of talent across all
musical genres, including such superstars as Sting, Bruce Springsteen, and Bob Dylan, as
well as Erykah Badhu and Kristin Chenoweth. Further they have extensive experience
working with municipalities and other government entities as well as with landmark facilities.
In California, they have agreements to operate or program the Greek Theater in Los
Angeles, the Santa Barbara Bowl, the Grove in Anaheim, the San Diego Civic Theater, and
2
Attachment B
the Civic Auditorium and Center for the Performing Arts in San Jose. Nederlander's
standing in the industry and status as an international promoter are critical to repositioning
the Santa Monica Civic Auditorium as a destination venue for music and theatrical
productions; it is not likely the City can achieve this on its own.
Proposed Business Model
• Event Mix: Under the proposed model, once renovated, the Civic Auditorium would
host a mix of concerts, theatrical performances, film screenings, Broadway shows
and special events, which would include a broad range of activities from award
shows and movie premieres, to select corporate events. It would also continue to
host Stairway and the Santa Monica Symphony, along with a limited number of other
popular Santa Monica charitable and community events.
• Conservative Baseline Scenario: The various financial scenarios developed to
analyze the proposed business model included both pessimistic and optimistic
options, along with the baseline. Given the volatile nature of the entertainment
business, in developing the number of events a renovated Civic Auditorium might
host under a baseline scenario, all parties agreed to take a conservative approach.
This was confirmed by a range of consultants that reviewed the baseline.
• City Subsidy Comparison: Although in all scenarios modeled the venue would still
require an annual subsidy ranging from $0.6M to $1.7M, the projected cumulative
subsidy over the same time frame under a "status quo" scenario, where the Civic
Auditorium would continue to operate as it currently does, is over $32.9M.
Repurposing the Civic under the proposed business model is projected to result in a
significant subsidy reduction of $18M to $24M over the ten year term. (Additional
information on the business models and scenarios is available in the March 8. 2011
staff report on the proposed agreement with the Nederlander Organization.)
Summary of Projected pity Subsidy
over 10 Years
Status Quo ~.% v.,~:a. ~.'~„-~^'.'"'.~..;,~.mr5 $32,903,166
'°~E t~=~~~"'®"'®7 $14,702,111
Very Pessimistic
,.~.-U~~r.;:~„~u:;,,»~~-, $13,998,931
Pessimistic
- ~~~-~~~=='3: $12,196,255
Base
'-'~~~-~~%-~^~_"' $8,891,074
Optimistic
E,,. ~ y.-,~,;,:~_.:-.,, $8,697,458
Very optimistic
3
Attachment B
Alternatives
® Status Quo: The City Council could choose to continue to operate the Civic
Auditorium as is, presenting primarily consumer shows. However the projected
deficit would continue to mount, reaching $32.9M over the next ten years. The
facility would also still require major infrastructure improvements to address ADA
accessibility and retrofits for earthquake safety at an estimated cost of $15M to
$20M.
® Mothballing the Facility: The Gity Council could choose to simply close the Civic
Auditorium until such time as an alternative funding source for the necessary
improvements is identified. Annual costs associated with .shuttering the facility are
estimated at $1.7M if the core staff identified in the proposed business model were
retained and assigned other responsibilities. Or $0.25M for such items as insurance,
security, and utilities, if the City were to lay-off all Civic Auditorium staff and close the
building.
® Development of Adjacent City Land: Another possible measure to fund the renovation
of the Civic is for the City Council to capitalize the development value of the Civic parking
lot. Currently, the Civic Center Specific Plan designates the Civic parking lot for a new
park, cultural uses and the Civic Center Early Childhood Education Center. Rather than
using the properly for park and cultural uses, the City could make the parking lot
available for development in order to help fund the renovation of the Civic. If the City
kept a portion of the lot for the Early Childhood Education Center, up to five additional
acres could be made available for development. Depending on how much of the lot was
made available, the timing with respect to market conditions, and the requirements
imposed on the development, the City could generate significant income to support the
Civic renovations. For example, if only one acre of the lot was made available for
development, market timing was poor and many requirements were placed on the
development, the City might generate as little as $6M. If the full five acres were made
available, the real estate market had regained its full strength, and requirements placed
on the development were modest, the land could generate as much as $80M.
4
ATTACHMENT F
SECOND SUPPLEMENT TO INDENTURE OF TRUST
Dated as of June 1, 2011
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
and
Union Bank, N.A. ,
as Trustee
Relating to
$[Bond Amount]
Redevelopment Agency of the City of Santa Monica
Earthquake Recovery Redevelopment Project
2011 Tax Allocation Bonds
DOCSOC/t 481488x4/200120-0004
TABLE OF CONTENTS
SECTION I. Supplement to Bond Indenture .............
SECTION 2. Attachment of Exhibit C ......................
SECTION 3. Partial Invalidity ...................................
SECTION 4. Execution in Counterparts ....................
SECTION 5. Governing Law .....................................
Appendix A Exhibit C to Indenture -Form of Bond
i
DOCSOC/ 1481488v4/200120-0004
SECOND SUPPLEMENT TO INDENTURE OF TRUST
This SECOND SUPPLEMENT TO INDENTURE OF TRUST (this "Second Supplement"),
dated as of June 1, 2011, is by and between the REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA, a public body corporate and politic duly organized and existing under the laws of
the State of California (the "Agency"), and Union Bank, N.A. (formerly known as Union Bank of
California, N.A.), a national banking association organized and existing under the laws of the United
States of America, as trustee under the hereinafter defined Bond Indenture (the "Trustee");
WITNESSETH.
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of the
Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the
Health and Safety Code of the State of California (the "Redevelopment Law"), including the power
to issue bonds for any of its corporate purposes; and
WHEREAS, a redevelopment plan for the Santa Monica Earthquake Recovery
Redevelopment Project (the "Redevelopment Project") has been adopted by the Agency pursuant to
all applicable requirements of the Redevelopment Law; and
WHEREAS, the Agency has .previously issued its Earthquake Recovery Redevelopment
Project 2006 Tax Allocation Refunding Bonds, Series A and its Earthquake Recovery
Redevelopment Project 2006 Taxable Tax Allocation Refunding Bonds, Series B (collectively, the
"2006 Bonds") pursuant to an Indenture of Trust and First Supplement to Indenture of Trust, each
dated as of April 1, 2006 (collectively, the "Existing Indenture") between the Agency and Union
Bank of California, N.A. (now known as Union Bank, N.A.), as trustee (the "Trustee"); and
WHEREAS, in order to finance redevelopment activities of the Agency in or of benefit to the
Project Area the Agency has determined to issue hereunder its Redevelopment Agency of the City of
Santa Monica Earthquake Recovery Redevelopment Project 2011 Tax Allocation Bonds, in the
principal amount of $[Bond Amount] (the "2011 Bonds") on a parity with the 2006 Bonds pursuant
to the Existing Indenture and this Second Supplement, all as provided herein; and
WHEREAS, the 2011 Bonds will be payable from Tax Revenues (as herein defined) on a
parity with the 2006 Bonds; and
WHEREAS, the Agency has certified that all acts and proceedings required by law necessary
to make the 2011 Bonds, when executed by the Agency, authenticated and delivered by the Trustee,
and duly issued, the valid, binding and legal special obligations of the Agency, and to constitute this
Second Supplement a valid and binding. agreement for the uses and purposes herein set forth in
accordance with its terms, have been done and taken, and the execution and delivery of the Second
Supplement have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the parties hereto do hereby agree as follows:
SECTION L Supplement to Bond Indenture. In accordance with the provisions of
Section 7.01(c) of the Bond Indenture, the Bond Indenture is hereby amended by adding a
DOCSOC/1481488v4/200120-0004
supplement thereto consisting of a new article to be designated as Article XL Such Article XI shall
read in its entirety as follows:
ARTICLE XI
2011 Bonds
Section 11.01. Definitions. Unless the context otherwise requires, the terms defined in this
Section 11.01 shall, for all purposes of this Article but not for any other purposes of this Indenture,
have the respective meanings specified in this Section 11.01. All terms defined in Section 1.01 and
not otherwise defined in this Section 11.01 shall, when used in this Article XI, have the respective
meanings given to such terms in Section 1.01.
"Article XI" means this Article XI which has been incorporated in and made a part of this
Indenture pursuant to the Second Supplement, together with all amendments of and supplements to
this Article XI entered into pursuant to the provisions of Section 7.01.
"Bond Year" means the one-year period beginning on July 2 in any year and ending on the
next succeeding July 1, both dates inclusive, except that the first Bond Year shall begin on the
Closing Date and end on July 1, 2012.
"Closing Date" means the date on which the 2011 Bonds are delivered to the Original
Purchaser.
"Continuine Disclosure Certificate" means that certain Continuing Disclosure Certificate
relating to the 2011 Bonds executed by the Agency and dated the date of issuance and delivery of the
2011 Bonds, as originally executed and as it may be amended from time to time in accordance with
the terms thereof.
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to the Agency relating to the authorization, issuance, sale and delivery of the 2011
Bonds, including but not limited to printing expenses, rating agency fees, municipal bond insurance
and surety bond premiums, filing and recording fees, initial fees, expenses and charges of the
Trustee, and its counsel, including the Trustee's first annual administrative fee, fees, charges and
disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals,
fees and charges for preparation, execution and safekeeping of the 2011 Bonds and any other cost,
charge or fee in connection with the original issuance of the 2011 Bonds.
"Second Supplement" means the Second Supplement to Indenture of Trust, dated as of June
1, 2011, by and between the Agency and the Trustee, as the same may be amended from time to time
in accordance with the terms of the Bond Indenture.
"Interest Payment Date" means January 1, 2012, and each July 1 and June 1 thereafter so
long as any of the Bonds remain unpaid.
"Ordinal Purchaser" means collectively E.J. De La Rosa & Co., Inc., and on behalf of itself
and Wells Fargo Bank National Association, as the initial underwriters of the 2011 Bonds.
"Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure
Certificate.
DOC SOC/ 1481488v4/200120-0004
"Bond Indenture" means the Indenture of Trust, dated as of April 1, 2006, by and between
the Agency and the Trustee as amended to date and, as the same may be amended from time to time
in accordance with the terms thereof, including, without limitation, as amended and supplemented by
the Second Supplement.
"2011 Bonds" means the Bonds which are authorized and issued under Section 11.02.
"2011 Bonds Costs of Issuance Fund" means the fund by that name established and held by
the Trustee pursuant to Section 11.07.
"2011 Bonds Redevelopment Account" means the account by that name established and held
by the Trustee in the Redevelopment Fund pursuant to Section 11.07.
"2011 Bonds Reserve Account Subaccount" means the subaccount, by that name established
and held by the Trustee pursuant to Secfion 11.14.
Section 11.02. Authorization of 2011 Bonds. The 2011 Bonds are issued as Parity Debt in
the aggregate principal amount of Dollars ($[Bond Amount]) under
and subject to the terms of this Indenture and the Redevelopment Law, for the purpose of providing
fiords to finance redevelopment activities with respect to the Redevelopment Projects. This
Indenture constitutes a continuing agreement with the Owners of all of the 2011 Bonds issued
hereunder and at any time Outstanding to secure the full and final payment of principal of and
premium, if any, and interest on all 2011 Bonds which may from time to time be executed and
delivered hereunder, subject to the covenants, agreements, provisions and conditions herein
contained. The 2011 Bonds shall be designated the "Redevelopment Agency of the City of Santa
Monica Earthquake Recovery Redevelopment Project 2011 Tax Allocation Bonds". Upon the
execution and delivery of the Second Supplement, the Agency shall execute and deliver 2011 Bonds
in the aggregate principal amount of $[Bond Amount] to the Trustee and the Trustee shall
authenticate and deliver the 2011 Bonds to the Original Purchaser upon receipt of a Request of the
Agency therefor.
Section 11.03. Terms of 2011 Bonds. The 2011 Bonds shall be dated as of the Closing Date,
and shall be issued in fully registered form without coupons in denominations of $5,000 or any
integral multiple thereof and shall be subject to the book entry system provisions of Section 2.11.
The 2011 Bonds shall mature on July 1 in each of the years and in the respective principal amounts,
and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months)
which is payable on each Interest Payment Date in the respective amounts, as set forth in the
following table:
3
DOC SOC/ 1481488v4/200120-0004
Maturity Principal Interest
(July 1) Amount Rate
Interest on the 2011 Bonds shall be payable from the Interest Payment Date next preceding
the date of authentication thereof unless (i) a 2011 Bond is authenticated on or before an Interest
Payment Date and after the close of business on the preceding Record Date, in which event it shall
bear interest from such Interest Payment Date, (ii) a 2011 Bond is authenticated on or before the first
Record Date with respect to the 2011 Bonds, in which event interest thereon shall be payable from
the Closing Date, or (iii) interest on any 2011 Bond is in default as of the date of authentication
thereof, in which event interest thereon shall be payable from the date to which interest has been paid
in full, payable on each Interest Payment Date. Interest shall be paid on each Interest Payment Date
to the persons in whose names the ownership of the 2011 Bonds is registered on the Registration
Books at the close of business on the immediately preceding Record Date. Interest on any 2011
Bond which is not punctually paid or duly provided for on any Interest Payment Date shall be
payable to the person in whose name the ownership of such 2011 Bond is registered on the
Registration Books at the close of business on a special record date for the payment of such defaulted
interest to be fixed by the Trustee, notice of which shall be given to such Owner not less than ten (10)
days prior to such special record date.
Interest on the 2011 Bonds shall be paid by check of the Trustee mailed by first class mail,
postage prepaid, on each Interest Payment Date to the Owners of the 2011 Bonds at their respective
addresses shown on the Registration Books as of the close of business on the preceding Record Date;
provided, however, that at the written request of the Owner of 2011 Bonds in an aggregate principal
amount of at least $1,000,000, which written request is on file with the Trustee prior to any Record
Date, interest on such 2011 Bonds shall be paid on each succeeding Interest Payment Date by wire
transfer in immediately available funds to such account at a financial institution within the United
States of America as shall be specified in such written request. The principal of the 2011 Bonds and
any redemption premium shall be payable in lawful money of the United States of America by check
of the Trustee upon presentation and surrender thereof to the Trustee.
Section 11.04. Redemption. The 2011 Bonds are subject to optional redemption or
mandatory sinking account redemption by the Agency's set forth below:
(i) Optional Redemption.
The 2011 Bonds maturing on or before July 1, 20_, shall not be subject to
optional redemption prior to maturity. The 2011 Bonds maturing on or after July 1, 20_, shall be
subject to redemption in whole, or in part among such maturities as shall be determined by the
Agency, and in any case by lot within a maturity, at the option of the Agency, on any date on or after
July 1, 20 ,from any available source of funds, at a redemption price equal to the principal amount
DOCSOC/ 1481488v4/200120-0004
of the 2011 Bonds to be redeemed, plus accrued interest thereon to the redemption date, without
premium.
The Agency shall be required to give the Trustee written notice of its
intention to redeem 2011 Bonds and of the annual maturities determined to be redeemed under this
subsection (a) at least forty-five (45) days prior to the date fixed for such redemption (or such lesser
number of days as the Trustee may accept).
(ii) Sinking AccountRedemptiora.
(A) The 2011 Bonds maturing July 1 in each of the years ,and
shall be subject to mandatory sinking fund redemption in part by lot on July 1 and July
1, ,respectively and on July 1 in each year thereafter, from Sinking Account payments made
by the Agency pursuant to this Section 11.04(b), at a redemption price equal to the principal amount
thereof to be redeemed together with accrued interest thereon to the redemption date, without
premium, or in lieu thereof shall be purchased pursuant to paragraph (ii) of this subsection (b), in the
aggregate respective principal amounts and on the dates as set forth in the following table (provided,
however, that if some but not all of such 2011 Bonds have been redeemed, the total amount of all
future Sinking Account payments attributable to such 2011 Bonds shall be reduced by the aggregate
principal amount of such 2011 Bonds so redeemed, to be allocated among such Sinking Account
payments on a pro rata basis, or on such other basis, in integral multiples of $5,000 as determined by
the Agency (written notice of which determination shall be given by the Agency to the Trustee)):
Term Bond Maturing on July i, 20_
Sinking Account
Redemption Date Principal Amount To Be
Jul 1 Redeemed or Purchased
20 $
20
Maturity.
Term Bond Maturing on July 1, 20_
Sinking Account
Redemption Date Principal Amount To Be
Jul 1 Redeemed or Purchased
20 $
20 '
Maturity.
Maturity.
(B) In lieu of redemption of any 2011 Bonds pursuant to the preceding
paragraph (i) of this subsection (b), amounts on deposit in the Special Fund may also be used and
withdrawn by the Agency at any time for the purchase of such 2011 Bonds at public or private sale as
DOCS OC/ 1481488v4/200120-0004
and when and at such prices (including brokerage and other charges and including accrued interest)
as the Agency may in its discretion determine. The par amount of any of the 2011 Bonds so
purchased by the Agency in any twelve-month period ending on January 1 in any year shall be
credited towards and shall reduce the par amount of such 2011 Bonds required to be redeemed
pursuant to this subsection (b) on July 1 in such year.
(iii) Notice of Redemption. The Trustee on behalf and at the expense of the
Agency shall mail (by first class mail) notice of any redemption to the respective Owners of any
2011 Bonds designated for redemption at their respective addresses appearing on the Registration
Books, at least thirty (30) but not more than sixty (60) days prior to the date fixed for redemption;
provided, however, that neither failure to receive any such notice so mailed nor any defect therein
shall affect the validity of the proceedings for the redemption of such 2011 Bonds or the cessation of
the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date, the
redemption place and the redemption price and shall designate the CUSIP numbers, the individual
number of each 2011 Bond to be redeemed or state that a112011 Bonds between two stated numbers
(both inclusive) have been called unless all 2011 Bonds within a maturity have been called, or will
state that all of the 2011 Bonds Outstanding of one or more maturities and Series are to be redeemed,
and shall require that such 2011 Bonds be then surrendered at the office of the Trustee for
redemption at the redemption price, giving notice also that further interest on such 2011 Bonds will
not accrue from and after the redemption date.
Additionally, on the date on which the notice of redemption is mailed to the Owners
of the 2011 Bonds pursuant to the provisions above, such notice of redemption shall be given by
(i) first class mail, postage prepaid, (ii) confirmed facsimile transmission, or (iii) overnight delivery
service to the Agency, to each of the Securities Depositories and to one or more of the Information
Services as shall be designated in writing by the Agency to the Trustee.
(iv) Manner of Redemption. Whenever provision is made in this Section 11.4 for
the redemption of less than all of the 2011 Bonds of any maturity, the Trustee shall select the 2011
Bonds of such maturity to be redeemed by lot in any manner which the Trustee in its sole discretion
shall deem appropriate. For purposes of such selection, all 2011 Bonds shall be deemed to be
comprised of separate $5,000 denominations and such separate denominations shall be treated as
separate 2011 Bonds which may be separately redeemed.
(v) Partial Redemption of 2011 Bonds. In the event only a portion of any 2011
Bond is called for redemption, then upon surrender of such 2011 Bond the Agency shall execute and
the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Agency, a new
2011 Bond or 2011 Bonds of the same maturity date, of authorized denominations in aggregate
principal amount equal to the unredeemed portion of the 2011 Bond to be redeemed.
(vi) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the principal of and interest (and premium, if any) on the 2011 Bonds so
called for redemption shall have been duly provided, such 2011 Bonds so called shall cease to be
entitled to any benefit under this Indenture other than the right to receive payment of the redemption
price, and no interest shall accrue thereon from and after the redemption date specified in such
notice. A112011 Bonds redeemed pursuant to this Section 10.4 shall be canceled and destroyed.
(vii) Rescission. The Agency shall have the right to rescind any optional
redemption by written notice to the Trustee on or prior to the dated fixed for redemption. Any notice
DOCSOC/ 1481488v4/200120-0004
6
of optional redemption shall be cancelled and annulled if for any reason funds will not or are not
available on the date fixed for redemption for the payment in full of the 2011 Bonds then called for
redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The
Agency and the Trustee shall have no liability to the Owners or any other party related to or arising
from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption
in the same manner as the original notice of redemption was sent.
Section 11.05. Form and Execution of 2011 Bonds. CUSIP Numbers. The 2011 Bonds, the
form of Trustee's Certificate of Authentication, and the form of Assignment to appear thereon, shall
be substantially in the respective forms set forth in Exhibit C attached hereto and by this reference
incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted
or required by this Indenture.
The 2011 Bonds shall be executed on behalf of the Agency by the signature of its Chair and
the signature of its Secretary who are in office on the date of execution and delivery of the Second
Supplement or at any time thereafter, and the seal of the Agency shall be impressed, imprinted or
reproduced by facsimile signature thereon. Either or both of such signatures may be made manually
or may be affixed by facsimile thereof. If any officer whose signature appears on any 2011 Bond
ceases to be such officer before delivery of the 2011 Bonds to the purchaser, such signature shall
nevertheless be as effective as if the officer had remained in office until the delivery of the 2011
Bonds to the purchaser. Any 2011 Bond may be signed and attested on behalf of the Agency by such
persons as at the actual date of the execution of such 2011 Bond shall be the proper officers of the
Agency although on the date of such 2011 Bond any such person shall not have been such officer of
the Agency.
Only such of the 2011 Bonds as shall bear thereon a Certificate of Authentication in the form
set forth in Exhibit C, executed and dated by the Trustee, shall be valid or obligatory for any purpose
or entitled to the benefits of this Indenture, and such Certificate of the Trustee shall be conclusive
evidence that such 2011 Bonds have been duly authenticated and delivered hereunder and are entitled
to the benefits of this Indenture.
The Trustee and the Agency shall not be liable for any omission, defect or inaccuracy in the
CUSIP number that appears on any 2011 Bond or in any redemption notice. The Trustee may, in its
discretion, include in any redemption notice a statement to the effect that the CUSIP numbers on the
2011 Bonds have been assigned by an independent service and are included in such notice solely for
the convenience of the Owners and that neither the Trustee nor the Agency shall be liable for any
inaccuracies in such numbers.
Section 11.06. Application of Proceeds of Sale of 2011 Bonds. Upon the receipt of payment
of the purchase price for the 2011 Bonds ($ ) on the Closing Date (representing
$ principal amount issue premium of $ and less original issue discount of
$ ), the proceeds thereof shall be paid to the Trustee and deposited in a temporary.
fund (if required by the Trustee to make the following transfers and deposits, which temporary fund
shall be closed after such transfers and deposits have been made), all of the amounts on deposit in
which shall be transferred on the Closing Date as follows:
DOCSOC/ 1481488v4/200120-0004
(a) The Trustee shall deposit to the 2011 Bonds Costs of Issuance Fund the amount of
(b) The Trustee shall transfer to the Agency for deposit in the 2011 Bonds
Redevelopment Account of the Redevelopment Fund created pursuant to Section 3.04(a) of the
Indenture the amount of $ for application in accordance with Section 3.04(a)
and Section 11.07(b).
(c) The Trustee. shall deposit to the 2011 Bonds Subaccount of the Reserve Account the
amount of $ which shall, together with the credit of the Reserve Account Surety Bond to
the 2006 Series A Bonds Reserve Account Subaccount with respect to the 2006 Series A Bonds and
the 2006 Series B Bonds Reserve Account Subaccount with respect to the 2006 Series B Bonds,
represents the full amount of the Reserve Requirement upon delivery of the 2011 Bonds.
Section 11.07. 2011 Bonds Costs of Issuance Fund and 2011 Bonds Redevelopment
Account. (a) There is hereby established a separate fund to be known as the "2011 Bonds Costs of
Issuance Fund", which shall be held by the Trustee in trust. The moneys in the 2011 Bonds Costs of
Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of
Issuance upon submission of a Written Request of the Agency stating (a) the person to whom
payment is to be made, (b) the amount to be paid, (c) the purpose for which the obligation was
incurred, (d) that such payment is a proper charge against the 2011 Bonds Costs of Issuance Fund,
and (e) that such amounts have not been the subject of a prior Written Request of the Agency; in each
case together with a statement or invoice for each amount requested thereunder. On the earlier of
(i) [November) 1, 2011, or (ii) the date of receipt by the Trustee of a Request of the Agency therefor,
all amounts (if any) remaining in the 2011 Bonds Costs of Issuance Fund shall be withdrawn
therefrom by the Trustee and deposited in the Interest Account.
(b). There is hereby established a separate account in the Redevelopment Fund to be known
as the "2011 Bonds Redevelopment Account", which shall be held by the Agency. The moneys in
the 2011 Bonds Redevelopment Account shall be used and withdrawn by the Agency from time to
time to pay authorized costs upon submission (and retention in the records of the Agency) of a
Written Request of the Agency stating (a) the person to whom payment is to be made, (b) the amount
to be paid, (c) the purpose for which the obligation was incurred, (d) that such payment is a proper
charge against the 2011 Bonds Redevelopment Account and the Redevelopment Fund, and (e) that
such amounts have not been the subject of a prior Written Request of the Agency; in each case
together with a statement or invoice for each amount requested thereunder. On the the date of the
Agency's certification (and retention in the records of the Agency) that it has completed the
expenditure of all amounts to be expended from the 2011 Bonds Redevelopment Account, all
amounts (if any) remaining in the 2011 Bonds Redevelopment Account shall be withdrawn therefrom
and transferred to the Trustee for deposit in the Interest Account.
Section 11.08 Security for 2011 Bonds. The 2011 Bonds shall be Parity Debt within the
meaning of such term in Section 1.02 and shall be secured in the manner and to the extent set forth in
Article IV. As provided in Section 4.01, the 2011 Bonds shall be secured on a parity with all other
Bonds issued under this Indenture, including the 2006 Bonds, by a first pledge of and lien on all of
the Tax Revenues in the Special Fund and the moneys in the Reserve Account. [Without limiting
any other provision of this Indenture, the Agency hereby covenants and agrees to pay all amounts
due under the Indenture with respect to the 2011 Bonds maturing July 1, 2042 on or before the last
DOC SOC/1481488v4/200120-0004
day for the Agency to repay indebtedness pursuant to the Redevelopment Plan and the
Redevelopment Law.]
Section 11.09 Continuinu Disclosure. The Agency hereby covenants and agrees that it will
comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Indenture, failure of the Agency to comply with the
Continuing Disclosure Certificate shall not be considered an Event of Default; however, any
Participating Underwriter or any holder or beneficial owner of the 2011. Bonds may take such actions
as may be necessary and appropriate, including seeking specific performance by court order, to cause
the Agency to comply with its obligations under this Section 11.09.
Section 11.10 Benefits Limited to Parties. Nothing in this Article XI, expressed or implied,
is intended to give to any person other than the Agency, the Trustee, and the Owners of the 2011
Bonds, any right, remedy, claim under or by reason of this Article XI. Any covenants, stipulations,
promises or agreements in this Article XI contained by and on behalf of the Agency shall be for the
sole and exclusive benefit of the Trustee, and the Owners of the 2011 Bonds.
Section 11.11. Federal Tax Covenants. The provisions of Section 5.11 and the further
provisions of this Indenture relating to the Tax Code shall apply to the 2011 Bonds as if restated in
full herein.
Section 11.12. 2011 Bonds Reserve Subaccount. The 2011 Bonds Reserve Subaccount is
hereby created as a Subaccount of the Reserve Account. The portion of the Reserve Requirement
allocable to the 2011 Bonds shall be satisfied initially by the deposit of a portion of the proceeds of
the 2011 Bonds to the 2011 Bonds Reserve Subaccount pursuant to Section 11. 06 hereof.
[Notwithstanding any other provision of this Indenture to the contrary, amounts on deposit therein
shall be applied exclusively to the payment of 2011 Bonds [as further set forth below].
Section 11.13. Effect of this Article XI. Except as in this Article XI expressly provided or
except to the extent inconsistent with any provision of this Article XI, the 2011 Bonds shall be
deemed to be Bonds under and within the meaning of Section 1.02, and every term and condition
contained in the other provisions of this Indenture shall apply to the 2011 Bonds with full force and
effect, with such omissions, variations and modifications thereof as may be appropriate to make the
same conform to this Article XL In addition, Section 9.03(b) relating to the 2006 Insurer shall apply
to the defeasance of the 2011 Bonds.
Section 11.14. [Reserved
Section 11:15. Further Assurances. The Agency will adopt, make, execute and deliver any
and all such further resolutions, instruments and assurances as may be reasonably necessary or proper
to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring
and confirming unto the Owners of the 2011 Bonds and the rights and benefits provided in this
Indenture.
SECTION 2. Attachment of Exhibit C. The Bond Indenture is also hereby further amended
by attaching thereto and incorporating therein an Exhibit C setting forth the form of the 2011 Bonds,
which shall read substantially as set forth in Appendix A which is attached hereto and by this
reference incorporated herein.
DOCS OC/1481488v4/200120-0004
SECTION 3. Amendment of Existin¢ Indenture. (a) Section 1.01 is hereby amended to
restate in full the definition of Reserve Requirement as follows:
Reserve Requirement means, as of the date of any calculation, [(a) with respect to the
Series 2006A Bonds and the Series 2006B Bonds], the lesser of (1) Maximum Annual Debt Service
[with respect to the Series 2006A Bonds and the Series 2006B Bonds], or (2) the maximum amount
permitted to be deposited in the Reserve Account under the Tax Code [from the proceeds of the
Series 2006A Bonds and the Series 2006B Bonds], as certified to the Trustee by the Agency; [(b)
with respect to the Series 2011 Bonds], the lesser of (1) Maximum Annual Debt Service [with respect
to the Series 2011 Bonds], or (2) the maximum amount permitted to be deposited in the Reserve
Account under the Tax Code without yield restriction [from the proceeds of the Series 2011 Bonds],
as certified to the Trustee by the Agency and [(c) with respect to any other Parity Debt authorized
pursuant to a Parity Debt Instrument, the lesser of (a) Maximum Annual Debt Service [with respect
to the Parity Debt authorized pursuant to such Parity Debt Instrument], or (b) the maximum amount
permitted to be deposited in the Reserve Account under the Tax Code without yield restriction [from
the proceeds of such Parity Debt], as certified to the Trustee by the Agency, in each case computed
and maintained separately for each issue or series of Parity Debt.
(b) Section 4.02(d) of the Bond Indenture is hereby amended to read in full as follows:
(d) Reserve Account. In addition to the Reserve Account, the Trustee shall establish
within the Reserve Account the 2006 Series A Bonds Reserve Account Subaccount. In the event that
the Trustee has actual knowledge that the amount on deposit in the Reserve Account at any time
becomes less than the Reserve Requirement, the Trustee shall promptly notify the Agency of such
fact. Promptly upon receipt of such notice, the Agency shall transfer to the Trustee for deposit in the
applicable subaccount to which the deficiency relates (pro rata in the event a deficiency exists in
more than one Subaccount and Tax Revenues are insufficient to fund the entire deficiency) an amount
of available Tax Revenues sufficient to maintain the Reserve Requirement on deposit in the Reserve
Account. Amounts in the Reserve Account shall be used and withdrawn by the Trustee solely for the
purpose of making transfers pursuant to any applicable Parity Debt Instrument in the applicable order
of priority and to the Interest account, the Principal Account and the Sinking Account, in such order
of priority, on any date which the principal of or interest on the Bonds becomes due and payable
hereunder, in the event of any deficiency at any time in any of the applicable accounts. In the event
there shall be insufficient amounts in the Reserve Account to make all of the transfers required by
this Section 4.02(d) and any applicable Parity Debt Instrument, then such transfers shall be made
from the applicable Subaccount for the benefit of the Bonds to which the applicable Subaccount
relates. So long as no Event of Default shall have occurred and be continuing, any amount in the
Reserve Account in excess of the Reserve Requirement on the fourth (4"') Business Day preceding
each Interest Payment Date shall be withdrawn from the Reserve Account by the Trustee and
deposited in the Interest Account and the Interest Account established by any Parity Debt Instrument,
for deposit to the applicable Bonds and/or Parity Debt to which the Subaccount relates.
The Agency shall have the right at any time to direct the Trustee to release funds
from the Reserve Account, in whole or in part, by tendering to the Trustee: (i) a Qualified Reserve
Account Credit Instrument, and (ii) an opinion of Bond Counsel stating that neither the release of
such funds not the acceptance of such Qualified Reserve Account Credit Instrument will cause
interest on the Bonds to become includable in gross income for purposes of federal income taxation.
Upon tender of such items to the Trustee, and upon delivery by the Agency to the Trustee of written
calculation of the amount permitted to be released from the Reserve Account (upon which
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DOCSOC/ 1481488v4/200120-0004
calculation the Trustee may conclusively rely),the Trustee shall transfer such funds from the Reserve
Account and deposit such funds in the Redevelopment Fund to be used solely as provided in Section
3.04(a). The Trustee shall comply with all documentation relating to a Qualified Reserve Account
Credit Instrument as shall reasonably be required to maintain such Qualified Reserve Account Credit
Instrument in full force and effect and as shall reasonably be required to receive payments thereunder
in the event and to the extent required to make any payment when and as required under this
subsection (d). Upon the expiration or any default with respect to any Qualified Reserve Account
Credit Instrument, the Agency shall be obligated either (i) to replace such Qualified Reserve Account
Cr3edit Instrument, or (ii) to deposit or cause to be deposited with the Trustee an amount of funds
equal to the Reserve Requirement, to be derived from the first available Tax Revenues.
The Reserve Account shall be maintained in the form of one or more separate
subaccounts which are established at the direction of the Agency for the purpose of holding the
proceeds of separate issues of the bonds inconformity with applicable provisions of the Tax Code.
The portion of the Reserve. Requirement allocable to the 2006 Series A Bonds shall
be satisfied initially by the credit to the 2006 Series A Bonds Reserve Account subaccount of the
Bond Reserve Fund Policy. As long as the Bond Reserve Fund Policy shall be in full force and
effect, the Trustee and the agency, if applicable, agree to comply with the provisions of Section 4.08
relating to the Bond Reserve Fund Policy Agreement. Amounts in the subaccount of the Reserve
Account shall be available only for the payment of the Bonds, including any Parity Debt to which the
subaccount relates, except as may be otherwise set forth in any Parity Debt Instrument, as to amounts
in the subaccount created thereunder.
(c) Section 8.08 of the Existing Indenture is hereby amended as follows: All references to
the Bonds in Section 8.08 shall mean and refer to the 2006 Series A Bonds and the 2006 Series B
Bonds, and no others.
SECTION 3. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this
Second Supplement shall for any reason be held illegal, invalid or unenforceable, such holding shall
not affect the validity of the remaining portions of this Second Supplement. The Agency hereby
declares that it would have entered into this Second Supplement and each and every other Section,
paragraph, sentence, clause or phrase hereof and authorized the issue of the 2011 Bonds pursuant
thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or
phrases of this Second Supplement may be held illegal, invalid or unenforceable.
SECTION 4. Execution in Counterparts. This Second Supplement may be executed in
several counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument.
SECTION 5. Governing Law. This Second Supplement shall be construed and governed in
accordance with the laws of the State of California.
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DOC SOC/1481488v4/200120-0004
IN WITNESS WHEREOF, the REDEVELOPMENT AGENCY OF THE CITY OF SANTA
MONICA has caused this Second Supplement to be signed in its name by its Executive Director and
attested by its Secretary, and Union Bank, N.A. , in token of its acceptance of the trusts created
hereunder, has caused this Second Supplement to be signed in its corporate name by its officers
thereinto duly authorized, all as of the day and year first above written.
REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA
Executive Director
(SEAL)
ATTEST:
Secretary
APPROVED AS TO FORM
By;
Agency General Counsel
Union Bank, N.A. , as Trustee
By:.
Authorized Officer
12
DOCSOC/ 1481488v4/200120-0004
APPENDIX A
EXHIBIT C TO INDENTURE
(FORM OF 2011 BOND)
No.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
EARTHQUAKE RECOVERY REDEVELOPMENT PROJECT
201 I TAX ALLOCATION BOND
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
July 1, [Closing Date)
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The Redevelopment Agency of the City of Santa Monica, a public body, corporate and
politic, duly organized and existing under the laws of the State of California (the "Agency"), for
value received, hereby promises to pay (but only out of the Tax Revenues and other moneys and
securities hereinafter referred to) to the Registered Owner specified above or registered assigns (the
"Registered Owner"), on the Maturity Date specified above (subject to any right of prior redemption
hereinafter provided for), the Principal Amount specified above in lawful money of the United States
of America, and to pay interest thereon at the Interest Rate specified above in like lawful money from
the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this
Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth
(15th) calendar day of the month preceding such Interest Payment Date (a "Record Date"), in which
event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on
or prior to [December 15, 2011], in which event it shall bear interest from the Dated Date specified
above; provided, however, that if, at the time of authentication of this Bond, interest is in default on
this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has
previously been paid or made available for payment), payable semiannually on January 1 and July 1
in each year, commencing [January 1, 2012] (the "Interest Payment Dates"), until payment of such
Principal Amount in full. The Principal Amount hereof is payable upon presentation hereof at the.
principal corporate trust office of Union Bank, N.A. in Los Angeles, (the "Trustee"), or such other
office of the Trustee as the Trustee may designate (the "Principal Corporate Trust Office"). Interest
hereon is payable by check of the Trustee mailed by first class mail on each Interest Payment Date to
the Registered Owner hereof at the address of such Registered Owner as it appears on the registration
books of the Trustee as of the preceding Record Date; provided that at the written request of the
owner of at least $1,000,000 aggregate principal amount of Bonds, which written request is on file
with the Trustee prior to the Record Date immediately preceding the applicable Interest Payment
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DOCSOC/1481488v4/200120-0004
Date, interest on such Bonds shall be paid on such Interest Payment Date by wire transfer to such
account within the United States of America as shall be specified in such written request.
This Bond is one of a duly authorized issue of bonds of the Agency designated as the
"Redevelopment Agency of the City of Santa Monica Earthquake Recovery Redevelopment Project
2011 Tax Allocation Bonds" (the "Bonds") of an aggregate principal amount of
Dollars ($[Bond Amount]), all of like tenor and date (except for such
variation, if any, as maybe required to designate varying numbers, maturities or interest rates) and all
issued pursuant to the provisions of the Community Redevelopment Law of the State of California,
constituting Part 1 of Division 24 of the Health and Safety Code of the State of California (the
"Redevelopment Law"), and pursuant to an Indenture of Trust, dated as of April 1, 2006, by and
between the Agency and the Trustee as supplemented and amended by a First Supplement to
Indenture of Trust, dated as of April 1, 2006 and a Second Supplement to Indenture of Trust, dated as
of June 1, 2011, in each case by and between the Agency and the Trustee (as so amended and
supplemented, the "Indenture"). The Bonds have been issued on a parity with the Redevelopment
Agency of the City of Santa Monica Earthquake Recovery Redevelopment Project 2006 Tax
Allocation Refunding Bonds, Series A, issued in the original principal amount of $49,945,000 (the
"2006 Series A Bonds") and the Redevelopment Agency of the City of Santa Monica Earthquake
Recovery Redevelopment Project 2006 Taxable Tax Allocation Refunding Bonds, Series B"), issued
in the original principal amount of $14,775,000 (the "2006 Series. B Bonds" and, together with the
2006 Series A Bonds, the "2006 Bonds"). The Agency may issue or incur additional obligations on a
parity with the 2006 Bonds and the Bonds, but only subject to the terms of the Indenture. Reference
is hereby made to the Indenture (copies of which are on file at the office of the Agency) and all
supplements thereto and to the Redevelopment Law for a description of the terms on which the
Bonds are issued, the provisions with regard to the nature and extent of the Tax Revenues, as that
term is defined in the Indenture, and the rights thereunder of the owners of the Bonds and the rights,
duties and immunities of the Trustee and the rights and obligations of the Agency thereunder, to all
of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and
agrees.
The Bonds have been issued by the Agency for the purpose of providing funds to finance
redevelopment activities with respect to its Earthquake Recovery Redevelopment Project (the
"Project Area").
In accordance with the Indenture, this Bond and the interest hereon, together with all other
Bonds, a112006 Bonds and all other Parity Debt (as defined in the Indenture) and the interest thereon
(to the extent set forth in the Indenture), are payable from, and are secured by a pledge of and lien on
the Tax Revenues derived by the Agency from the Project Area. As and to the extent set forth in the
Indenture, all of the Tax Revenues are exclusively and irrevocably pledged in accordance with the
terms and provisions of the Indenture and the Redevelopment Law, to the payment of the principal of
and interest on the Bonds, the 2006 Bonds and any additional Parity Debt. Notwithstanding the
foregoing, certain Tax Revenues maybe applied for other purposes as provided in the Indenture.
This Bond is not a debt, liability or obligation of the City of Santa Monica, the State of
California, or any of its political subdivisions, and neither said City, said State, nor any of its political
subdivisions is liable hereon, nor in any event shall this Bond be payable out of any funds or
properties other than the Tax Revenues.
A-2
DOC SOC/ 1481488v4/200120-0004
The rights and obligations of the Agency and the owners of the Bonds may be modified or
amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but
no such modification or amendment shall permit a change in the terms of maturity of the principal of
any outstanding Bond or of any installment of interest thereon or a reduction in the rate of interest
thereon without the consent of the owner of such Bond, or shall reduce the percentages of the owners
required to effect any such modification or amendment.
The 2011 Bonds maturing on or before July 1, 20 ,are not subject to redemption prior to
their respective stated maturities.. The 2011 Bonds maturing on or after July 1, 20_, are subject to
redemption in whole, or in part among such maturities as shall be determined by the Agency and by
lot within a maturity, at the option of the Agency, on any date on or after July 1, 20_ from any
available source of funds, at a redemption price equal to the principal amount thereof to be redeemed
together with accrued interest thereon to the redemption date, without premium.
The 2011 Bonds maturing on July 1 in each of the years, 20 and 20 ,are subject to
redemption from sinking account payments made by the Agency, in part by lot, on July 1, 20_ and
20_ respectively, and on July T in each year thereafter, at a redemption price equal to the principal
amount thereof to be redeemed together with accrued interest thereon to the redemption date, without
premium, as set forth in the following table (provided, however, that if some but not. all of such 2011
Bonds have been redeemed, the total amount of all future Sinking Account payments attributable to
such 2011 Bonds shall be reduced by the aggregate principal amount of such 2011 Bonds so
redeemed, to be allocated among such Sinking Account payments on a pro rata basis in integral
multiples of $5,000 as determined by the Agency (written notice of which determination shall be
given by the Agency to the Trustee)):
2011 Bonds Maturing on July 1, 20_
Sinking Account
Redemption Date Principal Amount To Be
Jul 1 Redeemed or Purchased
20 $
20 '
Matuity.
2011 Bonds Maturing on July 1, 20_
Sinking Account
Redemption Date Principal Amount To Be
Ju( 111 Redeemed or Purchased
20 $
20 '
Maturity.
A-3
DOCSOC/ 1481488v4/200120-0004
As provided in the Indenture and subject to rescission to the extent provided in the Indenture,
notice of redemption shall be mailed by first class mail, postage prepaid, not less than thirty (30) nor
more than sixty (60) days prior to the redemption date to the respective owners of any 2011 Bonds
designated for redemption at their addresses appearing on the 2011 Bond registration books of the
Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall effect
the sufficiency of the proceedings for redemption..
If this Bond is called for redemption and payment is duly provided therefor as specified in the
Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
If an Event of Default, as defined in the Indenture, shall occur, the Trustee may, and if
requested by a majority in aggregate principal amount of the Bonds then outstanding shall, exercise
any remedies available to the Trustee in law or in equity.
This Bond is transferable by the Registered Owner hereof, in person or by an attorney duly
authorized in writing by such person, at said Principal Corporate Trust Office of the Trustee, but only
in the manner, subject to the limitations and upon payment of the charges provided in the Indenture,
and upon surrender and cancellation of this Bond. Upon registration of such transfer a new Bond or
Bonds, of authorized denomination or denominations, for the same aggregate principal amount and
of the. same maturity will be issued to the transferee in exchange herefor.
Unless this Bond is presented by an authorized representative of The Depository Trust
Company, a New York Corporation ("DTC"), to the Trustee for registration of transfer, exchange or
payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
The Agency and the Trustee may treat the Registered Owner hereof as the absolute owner
hereof for all purposes, and the Agency and the Trustee shall not be affected by any notice to the
contrary.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all of the things, conditions
and acts required to exist, to have happened or to have been performed precedent to and in the
issuance of this Bond do exist, have happened or have been performed in due and regular time, form
and manner as required by the Redevelopment Law and the laws of the State of California and that
the amount of this Bond, together with all other indebtedness of the Agency, does not exceed any
limit prescribed by the Redevelopment Law or any laws of the State of California, and is not in
excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or
obligatory for any purpose until the Certificate of Authentication hereon endorsed shall have been
manually signed by the Trustee.
DOC SOC/ 1481488v4/200120-0004
A-4
IN WITNESS WHEREOF, THE REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA has caused this Bond to be executed in its name and on its behalf with the
facsimile signature of its Chair and its seal to be reproduced hereon and attested to by the facsimile
signahire of its Secretary, all as of the Dated Date set forth above.
REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA
Chair
(SEAL)
ATTEST:
By:
Secretary
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DOCSOC/ 1481488v4/200120-0004
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.
Dated:
Union Bank, N.A. as Trustee
By:
Authorized Signatory
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DOCSOC/ 1481488v4/200120-0004
ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto
whose address and social security or other tax
identifying number is ,the within-mentioned Bond and hereby
irrevocably constitute(s) and appoint(s)
attorney, to transfer the same on the registration books of the Trustee with full power of substitution
in the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) most be guaranteed by an eligible
guarantor institution.
Note: The signature(s) on this Assignment must correspond
with the name(s) as written on the face of the within Bond in
every particular without alteration or enlazgement or any
change whatsoever.
A-~
DOC SOC/ 1481488v4/200 ] 20-0004
ATTACHMENT G
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure. Certificate") is executed and
delivered by the Redevelopment Agency of the City of Santa Monica (the "Agency") in connection
with the issuance by the Agency of its $ aggregate principal amount of Redevelopment
Agency of the City of Santa Monica Earthquake Recovery Redevelopment Project, 2011 Tax
Allocation Bonds (the "Bonds"). The Bonds are being issued pursuant to Resolution No. of the
Agency, adopted on , 201 I, and an Indenture of Trust and First Supplement to Indenture of
Trust, each dated as of April 1, 2006, and a Second Supplement to Indenture of Trust dated as of June
1, 2011 (collectively, the "Indenture"), in each case between the Agency and Union Bank, N.A., as
trustee (the "Trustee"). The Bonds are payable from and secured by certain Tax Revenues of the
Agency. The Agency covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the Agency for the benefit of the holders and beneficial owners of the
Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule ISc2-
12(b)(5).
Section 2. Defmitions. In addition to the definitions set forth in the Indenture described in
the Official Statement, which apply to any capitalized term used in this Disclosure Certificate unless
otherwise defined in this Section, the following capitalized terms shall have the following meanings:
"Annual Report" means any Annual Report provided by the Agency pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Certificate.
"Annual Report Date" means the date that is eight (8) months after the end of the Agency's
fiscal year (currently March 1 based on the City's fiscal year end of June 30).
"Dissemination Agent" means the Agency, or any successor Dissemination Agent designated
in writing by the Agency and which has filed with the Agency and the Trustee a written acceptance of
such designation.
"Listed Events" means any of the events listed in Sections 5(a) and (b) of this Disclosure
Certificate.
"MSRB" means the Municipal Securities Rulemaking Board, which has been designated by
the Securities and Exchange Commission as the sole repository of disclosure information for purposes
of the Rule, or any other repository of disclosure information that may be designated by the Securities
and Exchange Commission as such for purposes of the Rule in the future.
Bonds.
"Official Statement" means the Official Statement dated , 2011, related to the
"Participating Underwriter" means E.J. De La Rosa & Co., Inc., on behalf of itself and Wells
Fargo Bank, National Association, the original underwriters of the Bonds required to comply with the
Rule in connection with offering of the Bonds.
"Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as the same may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The Agency shall, or shall cause the Dissemination Agent to, not later than the
Annual Report Date, commencing March 1, 2012, with the report for the 2010-11 fiscal year, provide
to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent
with the requirements of Section 4 of this Disclosure Certificate, with a copy to the Trustee. Not later
than fifteen (15) Business Days prior to the Annual Report Date, the Agency shall provide the Annual
Report to the Dissemination Agent, if other than the Agency. The Annual Report may be submitted as
a single document or as separate documents comprising a package, and may include by reference
other information as provided in Section 4 of this Disclosure Certificate. If the Agency's fiscal year
changes, the Agency, upon becoming aware of such change, shall give notice of such change in the
same manner as for a Listed Event under Section 5(c). The Agency shall provide a written
certificafion with each Annual Report fiirnished to the Dissemination Agent to the effect that such
Annual Report constitutes the Annual Report required to be furnished by it hereunder. The
Dissemination Agent may conclusively rely upon such certiftcation of the Agency and shall have no
duty or obligation to review such Annual Report.
(b) If by fifteen (15) Business Days prior to the Annual Report Date, the Dissemination
Agent (if other than the Agency) has not received a copy of the Annual Report, the Dissemination
Agent shall notify the Agency of such non-receipt.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been
provided to the MSRB by the Annual Report Date, the Dissemination Agent shall provide to the
MSRB (with a copy to the Trustee and the Participating Underwriter) a notice, in substantially the
form attached as Exhibit A.
(d) Unless the Agency has done so pursuant to Section 3(a) above, the Dissemination
Agent (if other than the Agency) shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and
electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the Agency, file a certificate with the
Agency to the effect that The Annual Report has been provided pursuant to this Disclosure Certificate,
stating, to the extent it can confirm such filing of the Annual Report, the date it was provided.
Section 4. Content of Annual Reports. The Agency's Annual Report shall contain or
incorporate by reference the following:
(a) Audited financial statements prepared in accordance with generally accepted
accounting principles as promulgated to apply to governmental entities from time to time by the
Governmental Accounting Standards Board, and as further modified according to applicable State
law. If the Agency's audited financial statements are not available by the Annual Report Date, the
Annual Report shall contain unaudited financial statements in a format similar to the usual format
utilized by the Agency, and the audited financial statements shall be filed in the same manner as the
Annual Report when they become available.
(b) The following additional items:
1. Assessed valuations and Tax Revenues for the fiscal year to which the
Annual Report pertains, by means of an update to the "Historical Project Area Assessed
Values Values" table for the Project Area shown in the Official Statement for the Bonds
(Table ~;
2. Description of any Parity Debt (date, amount, term, rating, insurance) issued
by the Agency in 4he fiscal year to which the Annual Report pertains and amount of all
Agency debt outstanding payable with tax increment revenue from the Project Areas as of the
end of the fiscal year to which the Annual Report pertains;
3. Estimated annual debt service coverage for obligations of the Agency by
means of an update to the "Projected Tax Revenues" table for the Project Area shown in the
Official Statement for the Bonds (Table 8);
4. Top ten property tax assessees in the Project Area for the fiscal year to
which the Annual Report pertains, taxable value and percentage of total taxable value for the
Project Area.
Any or all of the items above may be included by specific reference to other documents, including
official statements of debt issues of the Agency or related public entities, which are available to the
public on the MSRB's Internet web site or filed with the Securities and Exchange Commission. The
Agency shall clearly identify each such other document so included by reference.
-The Trustee shall have no responsibility for the content of the Annual Report, or any part
thereof.
Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Agency shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the Bonds in a timely
manner not more than ten (10) days after the event, if material
1. Principal and interest payment delinquencies;
2. Unscheduled draws on debt service reserves reflecting financial difficulties;
3. Unscheduled draws on credit enhancements reflecting financial difficulties;
4. Substitution of credit or liquidity providers, or their failure to perform;
5. Issuance by the Internal Revenue Service of proposed or final determination
of taxability or of a Notice of Proposal Issue (IRS Form 5701-TEB);
6. Tender Offers;
7. Defeasances;
8. Rating changes; and
9. Bankruptcy, insolvency, receivership or similar proceedings..
Note: For the purposes of the event identifted in subparagraph (9), the event is considered to
occur when any of the following occur: the appointment of a receiver, ftscal agent or similar officer
for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding
under state or federal law in which a court or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the obligated person, or if such jurisdiction has been
assumed by leaving the existing governmental body and officials or officers in possession but subject
to the supervision and orders of a court or governmental authority, or the entry of an order confirming
a plan of reorganization, arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) Pursuant to the provisions of this Section 5, the Agency shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the 2011 Bonds, if
material in a timely manner not more than ten (10) days after occurrence:
1, tmless described in Section 5(a)(5), adverse tax opinions or other material
notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds
or other material events affecting the tax status of the Bonds.
2. modifications to the rights of Bondholders;
optional, unscheduled or contingent Bond calls;
4. release, substitution or sale of property securing repayment of the Bonds;
5. non-payment related defaults;
6. the consummation of a merger, consolidation, or acquisition involving the
Agency or the Authority or the sale of all or substantially all of the assets of the Agency or the
Authority, other than in the ordinary course of business, the entry into a definitive agreement to
undertake such an action or the termination of a definitive agreement relating to any such actions,
other than pursuant to its terms; and
name of a trustee.
appointment of a successor or additional trustee or the change of the
(c) If the Agency determines that knowledge of the occurrence of a Listed Event under
subsection (b) would be material under applicable federal securities laws, and if the Dissemination
Agent is other than the Agency, the Agency shall promptly notify the Dissemination Agent in writing.
Such notice shall instruct the Dissemination Agent to file a notice of such occurrence with the MSRB
in an electronic format as prescribed by the MSRB in a timely manner not more than ten (10) Business
Days after the event.
(d) If the Agency determines that the Listed Event under subsection (b) would not be
material under applicable federal securities laws and if the Dissemination Agent is other than the
Agency, the Agency shall so notify the Dissemination Agent in writing and instruct the Dissemination
Agent nat to report the occurrence.
(e) The Agency hereby agrees that the undertaking set forth in this Disclosure
Agreement is the responsibility of the Agency and, if the Dissemination Agent is other than the
Agency, the Dissemination Agent shall not be responsible for determining whether the Agency's
instructions to the Dissemination Agent under this Section 5 comply with the requirements of the
Rule.
Section 6. Identi ing_Information for Filings with the MSRB. All documents provided to
the MSRB under this Disclosure Certificate shall be accompanied by identifying information as
prescribed by the MSRB.
Section 7. Termination of Reporting Obli ap lion. The obligations of the Agency, the Trustee
and the Dissemination Agent under this Disclosure Certificate shall terminate upon the legal
defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior
to the final maturity of the Bonds, the Agency shall give notice of such termination in the same
manner as for a Listed Event under Section 5(c).
Section 8. Dissemination Agent. From time to time, the Agency may appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and
may discharge any such Agent, with or without appointing a successor Dissemination Agent. If at any
time there is not any other designated Dissemination Agent, the Agency shall be The Dissemination
Agent. The Dissemination Agent may resign by providing .sixty days prior written notice to the
Agency.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Agency may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Section 3(a), 4 or 5(a), it may
be made only in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change in the identity, nature, or status of an obligated person with
respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, in the opinion of
nationally recognized bond counsel, would have complied with the requirements of the Rule at the
time of the primary offering of the Bonds, after taking into account any amendments or interpretations
of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in
the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or
(ii) in the opinion of nationally recognized bond counsel, does not materially impair the interests of
the holders or beneficial owners of the Bonds.
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed
to prevent the Agency from disseminating any other information, using the means of dissemination set
forth in this Disclosure Certificate or any other means of communication, or including any other
information in any Annual Report or notice of occurrence of a Listed Event, in addition to-that which
is required by this Disclosure Certificate. If the Agency chooses to include any information in any
Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically
required by this Disclosure Certificate, the Agency shall have no obligation under this Disclosuee
Certificate to update such information or include it in any future Annual Report or notice of
occurrence of a Listed Event.
Section 11. Default. In the event of a failure of the Agency to comply with any provision of
this Disclosure Certificate, the Trustee may (and, at the request of any Participating Underwriter or the
holders of at least 25% aggregate principal amount of Outstanding Bonds, shall), after receiving
indemnification satisfactory to the Trustee, or any holder or beneficial owner of the Bonds may, take
such actions as may be necessary and appropriate, including seeking mandate or specific performance
by coiut order, to cause the Agency to comply with its obligations under this Disclosure Certificate. A
default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture,
and the sole remedy under this Disclosure Certificate in the event of any failure of the Agency to
comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination
Agent and the Trustee shall be entitled to the protections and limitations from liability afforded to the
Trustee in Article 6 of the Indenture. The Dissemination Agent shall have only such duties as are
specifically set forth in this Disclosure Certificate, and the Agency. agrees tc> indemnify and hold
.harmless the Dissemination Agent, its officers, directors, employees and agents, against any loss,
expense and liabilities which the Dissemination Agent may incur arising out of or in the exercise or
performance of its powers and duties hereunder, including the costs and expenses (including
attorneys' fees) of defending against any claim of liability, but excluding ]iabilities due to the
Dissemination Agent's negligence or willful misconduct. The obligations of the Agency under this
Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
The Trustee shall not be required to consent to any amendment which would impose any greater
duties or risk of liability on the Trustee. No person shall have any right to commence any action
against the Trustee seeking any remedy other than to compel specific performance of this Agreement.
The Trustee shall not be liable under any circumstances for monetary damages to any person for any
breach of this Disclosure Certificate.
Section 13. Notices. Any notice or communications to be given under this Disclosure
Certificate maybe given as follows:
To the Agency: Redevelopment Agency of the City of Santa
Monica
Sata Monica, CA
Fax ~)
Attention:
To the participating Underwriters:
Fax: (~
Attention: Public Finance
To the Trustee: Union Bank of California, N.A.
Los Angeles, CA
Any person may, by written notice to the other persons listed above, designate a different address or
telephone number(s) to which subsequent notices or communications should be sent.
Section 14. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the Agency, the Trustee, the Dissemination Agent, the Participating Underwriters and holders and
beneficial owners from time to time of the Bonds, and shall create no rights in any other person or
entity.
Date: 2011
REDEVELOPMENT AGENCY OF THE CITY
OF SANTA MONICA
By:
EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Obligor: Redevelopment Agency of the City of Santa Monica
Name of Issue: City of Santa Monica Earthquake Recovery Redevelopment Project, 2011
Tax Allocation Bonds
Date of Issuance: , 2011
NOTICE IS HEREBY GIVEN that the Redevelopment Agency of the City of Santa Monica
(the "Agency") has not provided an Annual Report with respect to the above-named Bonds as required
by Section _ of the Indenture of Trust, dated as of April 1, 2006, as amended, by and between the
Redevelopment Agency of the City of Santa and Union Bank of California, N.A., as trustee. The
Agency anticipates that the Annual Report will be filed by
Dated:
cc: Trustee and Participating Underwriter
REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA
By:_
A-1
DOCSOC/ 1485103 v3/200120-0004
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Date: 5/16/2011
Time: 12:42:43 PM
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Stradling Yacea Carlson & Routh
Draft of 5/I3/ll
PRELIMINARY OFFICIAL STATEMENT DATED _, 2011
Ratings: Standard & Poor's: ""
Fitch: "
New Issue-Book Entry Only (See "OTHER MATTERS -Ratings")
In the opinion of Stradling Yocca Carlson & ~Rauth, a Professional Corporation, Newport Beach, Calijornia, Bond Counsel, under
existing Jaws, regulations, rulings and judicial decisions, and assuming certain representaaons and compliance with certain covenants and
requirements described herein, interest (and original issue discount) on the 2011 Bands is exclaeded from grass income for federal income tax
purposes and is not an item of tax preference for purposes of calculating the federn[ alternative minimum tax imposed on individuals and
corporations. Zn the further opinion of Bond Counsel, snterest (and originad issue discount) on the 2011 Bonds is exempt from State of
Calijornia personal income taxes. The difference between the issue price of a Bond (the first price at which a substantial amount of the
Bonds ofa maturity is to be sold to the public) and the stated redemption price ad maturity with respect to the Bond constitutes originad issue
discount. See "OTZIER iLlATTERS-Tax Matters"herein.
$41,050,000*
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
EarthquaKe Recovery Redevelopment Project
2011 Tax Allocation Bonds
Dated: Date of Delivery Due: July 1, as shown on inside cover
The Redevelopment Agency of the City of Santa Monica (the "Agency") is issuing the bonds captioned above (the "201 I Bonds") pursuant
to a Second Supplement to Indenture of Trust dated as of May 1, 2011, supplementing an Indenture of Trust and Fast Supplement to Indenture of
Trust, respectively, eaoh dated as of April 1, 2006, and each by and between the Agenoy and Union Bank of California, N.A., as trustee (collectively,
the "Indenture"). See "THE 2011 BONDS Authority for Issuance"
Proceeds of the 2011 Bonds will be used to (i) fund certain costs of the Agency's Santa Monica Earthquake Recovery Redevelopment
Project (the "Project Area"), (ii) provide for a debt service reserve for the 2011 Bonds, and (iii) pay the costs of issuing the 2011 Bonds. See "PLAN
OF FINANCE."
The 2011 Bonds will be delivered as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust
Company, New York, New York ("DTC"), and will be available to ultimate purchasers ("Beneficial Owners"), under the book-entry system
maintained by DTC. Beneficial Owners will not be entitled to receive delivery of certificates representing their ownership interest in the 2011 Bonds.
The principal of, premium if any, and semiannual interest on the 2011 Bonds will be payable by the Trustee to DTC for subsequent disbursement to
DTC Participants, so long as DTC or its nominee remains the registered owner of the 2011 Bonds. See APPENDIX F - "Book Entry-Only System."
Interest on the 2011 Bonds is due January 1 and July 1 of each year, commencing July 1, 2011. The 2011 Bonds will be issued in
denominations of $5,000 or any integral multiple of $5,000. See "THE 2011 BONDS-Description."
The 2011 Bonds are subject to redemption prior to maturity as described herein. See "THE 2011 BONDS -Redemption."
The 2011 Bonds are secured by and payable from "Tax Revenues" from the Agency's Earthquake Recovery Redevelopment Project Area
(the "Project Area") and amounts on deposit in certain funds and accounts established pursuant to the Indenture on a parity the Agency's
2006A Bonds and 2006B Bonds currently outstanding in the respective principal amounts of $49,945,000 and $4,005,000. Tax Revenues generally
consist of tax increment revenues to be derived from the Agency's Project Area, less unsubordinated pass-through obligations and certain amounts
treated as Housing Set-Aside, except to the limited extent described herein. See "SECURTTY FOR THE 2011 BONDS." The receipt of Tax
Revenues is subject to certain risks and limitations. See "RISK FACTORS" and "LIMITATIONS ON TAX REVENUES AND POSSIBLE
SPENDING LIMITATIONS."
The Indenture authorizes the Agency to incur additional debt secured by Tax Revenues on a parity with the 2006A Bonds, the 2006B
Bonds and the 201 I Bonds. See "SECURITY FOR THE 2011 BONDS Parity Debt"
THE 2011 BONDS ARE NOT A DEBT OF THE CITY OF SANTA MONICA (THE "CITY"), THE STATE OF CALIFORNIA,
OR ANY OF THEIR POLITICAL SUBDIVISIONS OTHER THAN THE AGENCY, AND NEITHER THE CITY, TAE STATE NOR ANY
OF T1iEIR POLITICAL SUBDIVISIONS, OTHER THAN THE AGENCY, IS LIABLE THEREFOR. THE PRINCIPAL OF, PREMIUM,
IF ANY, AND INTEREST ON THE 2011 BONDS ARE PAYABLE SOLELY FROM TAX REVENUES ALLOCATED TO THE AGENCY
FROM THE PROJECT AREA AND AbIOUNTS IN CERTAIN FUNDS AND ACCOUNTS HELD UNDER THE LNDENTURE. NEITFIER
THE OFFICERS OF THE AGENCY OR TAE CITY, NOR ANY PERSONS EXECUTING THE 2011 BONDS, ARE LIABLE
PERSONALLY ON THE 2011 BONDS BY REASON OF THEIR ISSUANCE.
An investment in the 201 I Bonds involves risk. Potential investors in the Bonds should review the entire Official Statement to evaluate an
investment in the Bonds. See "RISK FACTORS" for a discussion of factors that should be considered, in addition to the other matters set forth
herein, in evaluating the investment quality of the Bonds.
This cover page contains certain information for quick reference only. It is not intended to be a summary of all factors relating to an
investment in the 2011 Bonds.
MATURITY SCHEDULE
(See inside front cover)
The 2011 Bonds are offered when, as and if issued and accepted by the Underwriters, subject to approval as to legality by Stradling Yocca
Cazlson & Routh, a Professional Corporation, Newport Beach, California, Bond Counsel, and subject to certain other conditions. Stradling Yocca
Cazlson & Routh is also serving as Disclosure Counsel for the Agency. Certain legal matters will be passed on for the Agency by Kane, Ballmer &
Berkman, Los Angeles, California, and for the Underwriters by Jones Hall, A Professional Law Corporation, San Francisco, California. It is
anticipated that the 201 I Bonds, in book-entry form, will be available for delivery to DTC in New York, New York on or about June ~ 2011.
Dated: 7une~ 2011
De La Rosa & Co. Wells Fargo Securities
" Preliminary, subject to change.
DOCSOC/ 148179 t v5/200120-0004
$41,050,000
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
Earthquake Recovery Redevelopment Project
2011 Tag Allocation Bonds
MATURITY SCHEDULE
(Base CUSIP: )
$ % Term Bonds due July 1, 20_, Yield %CUSIP' No.
$ % Term Bonds due July 1, 20~ Yield %CUSIPI No.
$ % Term Bonds due July 1, 20~ Yie]d %CUSIPI No.
Preliminary, subject to change.
t Copyright 2011, American Bankers Association. CUSIP data herein is provided by Standard and Poo/s CUSIP Service Bureau, a division of
The eNcGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute far the CUSIP
Service. CUSIP numbers are provided for conveniettce of reference only. Neither the Agency or the Underwriters takes any responsibiliryfor the
accuracy of such numbers. The CUSIP number for a specific makrriry is subject m being changed after the iss¢mnce of the 2071 Bonds as a
result of various subsequent actions, Including but ttot 7rmited to a refunding in whole or in part ar as a result of the praamement of secandmy
market portfolio insurance or other similar enhancement by investors that is applicable to all ar a portion of certain maturifies of the
20//Bonds.
DOCSOG 1481791 v5/200120-0004
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
AGENCY/CITY COUNCIL MEMBERS
Richard Bloom, Agency Chair, Mayor
Gleam Davis, Agency Vice Chair, Mayor Pro-Tempore
Robert Holbrook, Agency Member,. Council Member
Kevin McKeown, Agency Member, Coamcil Member
Pam O'Connor, Agency Member, Council Member
Terry O'Day, Agency Member, Council Member
Bobby Shriver, Agency Member, Council Member
ADMINISTRATIVE OFFICIALS
Rod Gould, Agency Executive Director/City Manager
Carol Swindell, Agency Treasurer/Director of Finance
Andy Agle, Director of Housing and Economic Development
Marsha Jones Moutrie, Agency General Counsel/City Attorney
SPECIAL SERVICES
Agency Counsel
Kane, Ballmer & Berkman
Los Angeles, California
Financial Advisor
Public Resources Advisory Group
Los Angeles, California
Bond Counsel and Disclosure Counsel
Stradling Yocca Carlson & Routh
a Professional Corporation
Newport Beach, California
Fiscal Consultant
HdL Coren & Cone
Diamond Bar, Califomia
Trustee
Union Bank of California, N.A.
Los Angeles, California
DOCSOC/ 1481791 v5/200120-0004
No dealer, broker, salesperson or other person has been authorized by the Agency to give any information
or to make any representations with respect to the 2011 Bonds other than as contained in this Official Statement,
and, if given or made, such other information or representation must not be relied upon as having been given or
authorized by the Agency or the Underwriters.
This Official Statement is submitted in connection with the sale of the 2011 Bonds described herein and
may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement does not
constitute a contract between any Bond owner and the Agency or the Underwriters.
The information contained in this Official Statement has been obtained from sources that are believed to be
reliable, but this information is not guaranteed as to accuracy or completeness. This Official Statement speaks only
as of its date, and the information and expressions of opinion contained in this Official Statement are subject to
change without notice. Neither the delivery of this Official Statement nor any sale of the 2011 Bonds will, under
any circumstances, create any implication that there has been no change in the affairs of the Agency, the other
parties described in this Official Statement, since the date of this Official Statement.
The Underwriters have provided the following sentence for inclusion in this Official Statement: The
Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, the
responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this
transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.
When used in this Official Statement and in any continuing disclosure made by the Agency, the words or
phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "forecast,"
"expect," "intend" and similar expressions identify "forward looking statements" within the meaning of the Private
Securities Litigafion Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause
actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is
subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and
unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts
and actual results, and those differences may be material.
All summaries of the Indenture or other documents contained in this Official Statement are made subject to
the provisions of such documents and do not purport to be complete statements of any or all such provisions. All
references in this Official Statement to the Indenture and such other documents are qualified in their entirety by
reference to such documents, which are on file with the Agency.
This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy in any state in
which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
The issuance and sale of the 2011 Bonds have not been registered under the Securities Act of 1933 or the
Securities Exchange Act of 1934, both as amended, in reliance upon exemptions provided thereunder by Sections
3(a)(2) and 3(a)(12), respectively, for the issuance and sale ofmunicipal securities.
The Underwriters may offer and sell the 201 I Bonds to certain dealers and dealer banks and banks acting
as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and
the Underwriters may change those public offering prices from time to time.
The Agency and the City maintain a website. However, the information presented therein is not a part of
this Official Statement and must not be relied upon in making an investment decision with respect to the Bonds.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR
AFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAII, IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAYBE DISCONTINUED AT ANY TIME.
DOCSOC/1481791v5/200t 20-0004
Insert Map
DOC SOC/ 1481791 v~/200120-0004
TABLE OF CONTENTS
Page
INTRODUCTION ........................................ ......... I
PLAN OF FINANCE ................................... .........3
Plan of Finance ......................................... .........3
Estimated Sources and Uses of Funds ...... .........3
THE 2011 BONDS ....................................... .........3
Authority for Issuance .............................. .........3
Description ............:................................... .........4
Redemption ............................................... .........4
Transfer and Exchange ............................. .........6
Debt Service Schedule .............................. .........7
SECURITY FOR THE 2011 BONDS :......... .........7
Tax Allocation Financing ......................... .........7
Tax Revenues ........................................... .........8
Pledge of TaxRevenues ........................... ...:.....9
Reserve Account ....................................... .........9
Parity Debt ................................................ .......10
THE AGENCY ............................................. .......11
Agency Existence and Personnel .............: ....... l l
Agency Powers and Duties ....................... ....... l l
Agency Financial Statements ................... .......12
Outstanding Agency Debt ......................... .......12
THE EARTHQUAKE RECOVERY
REDEVELOPMENT PROJECT .................. .......15
General ..................................................... .......15
Land Use ................................................... .......15
Redevelopment Plan Limitations .............. .......16
Major Taxable Properly Owners .............. .......17
Recent Transfers ........................................ ......17
Statutory Pass-Through Requirements ...... ......17
Tax Sharing Agreements ........................... ......18
Low and Moderate Income Housing ......... ......19
TAX REVENUES .......................:................. ...:..19
Historical Assessed Value and Tax
Revenues .................................................... ......19
Appeals of Assessed Values ...................... ......21
Projected Tax Revenues ............................ ......22
Estimated Debt Service Coverage ............. ......25
RISK FACTORS ........................................... ......27
Reduction in Taxable Value and Tax
Revenues .................................................... ...... 28
Concentration of Tax Base .:...................... ......28
Estimates of Tax Revenues ........................ ......28
Reduction in Inflationary Rate ................... ......28
Levy and Collection ................................... ......29
Risks Associated With Parity Debt ............ ......29
Bankruptcy Risks ....................................... ......29
State Budget and SERAF ........................... ......29
Governor's Proposal to Eliminate
Paee
Redevelopment ............................................. ... 31
Seismic Factors ............................................ ... 37
Hazardous Substances .................................. ... 38
Investment Funds ......................................... ... 38
Bankruptcy and Foreclosrve ......................... ... 38
Changes in the Law ...................................... ... 38
Bonds Are Limited Obligations ................... ... 38
Limited Recourse on Default ....................... ... 39
Secondary Market ........................................ ... 39
Loss of Tax Exemption ................................ ... 39
LIMITATIONS ON TAX REVENUES AND
POSSIBLE SPENDING LIMITATIONS........ ...39
Property Tax Limitations -Article XIIIA .... ... 39
Challenges to Article XIIIA ......................... ... 40
Implementing Legislation ...................:........ ... 40
Properly Tax Collection Procedures ............. ... 40
Unitary Property ........................................... :.. 41
Appropriations Limitations -Article XIIIB . ... 42
Statement of Indebtedness ............................ ... 42
Proposition 218 ............................................ ... 43
Future Initiatives ........................................... .. 43
OTHER MATTERS .......................................... .. 43
Litigation ........................:.............................. .. 43
Ratings .......................................................... .. 44
Tax Matters ................................................... .. 44
Continuing Disclosure ................................... .. 45
Underwriting ................................................. .. 46
Financial Statements .........................:........... .. 46
Financial Advisor .:........................................ .. 46
Professionals Involved in the Offering.......... .. 46
EXECUTION .................................................... .. 46
APPENDIX A - Summary of Certain
Provisions of the Indenture
APPENDIX B - Santa Monica General
Information
APPENDIX C - Audited Financial Statements
of the Agency for Fiscal Year
Ended June 30, 2010
APPENDIX D - Form of Bond Counsel
Opinion
APPENDIX E - Form of Continuing
Disclosure Certificate
APPENDIX F - Book Entry-Only System
APPENDIX G - Fiscal Consultant Report
DOCSOC/ 1481791 v5/200120-0004
$41,050,000'
REDEVELOPMENT AGENCY OF TAE CITY OF SANTA MONICA
Earthquake Recovery Redevelopment Project
2011 Tax Allocation Bonds
INTRODUCTION
This Official Statement, including the cover page, inside cover page, and appendices, is provided to
furnish information in connection with the sale by the Redevelopment Agency of the City of Santa Monica
(the "Agency") of the bonds captioned above (the "2011 Bonds"). This Introduction contains a brief summary
of certain information contained in this Official Statement. It is not intended to be complete and is qualified by
the more detailed information contained elsewhere in this Official Statement. Definitions of certain terms used
in this Official Statement are set forth in APPENDIX A - "Summary of Certain Provisions of the Indenture."
The City
The City of Santa Monica, California (the "City"), is located in the western portion of Los Angeles
County (the "County"), bordered by the City of Los Angeles on three sides and by the Pacific Ocean to the
west. The City encompasses an area slightly greater than eight square miles and has an estimated population
of 92,703 persons as of January 1, 2010. The City was incorporated as a general law city in 1886 and became
a charter city in 1945. For certain information regarding the City, see APPENDIX B - "Santa. Monica
Genera] Information."
The Agency
The Agency is a redevelopment agency existing under the Community Redevelopment Law of the
State of California (the "State"), constituting Part 1 of Division 24 (commencing with Section 33000) of the
California Health and Safety Code, as amended (the "Redevelopment Law"). The Agency was activated on
August 13, 1957 by an ordinance of the City Council, at which time the City Cormcil declared itself to be the
governing board of the Agency. See "THE AGENCY."
The Project Area
The Santa Monica Earthquake Recovery Redevelopment Project (the "Project Area") encompasses
approximately 2.89 square miles or 34.8% of the City's total land area. The Project Area is almost entirely
developed, with use (based on fiscal year 2010-I1 assessed value inclusive of unsecured values) primarily
characterized as commercial (48.47%), residential (39.61%) and industrial (2.64%).
The Project Area was formed after the 1994 Northridge Earthquake to assist in the maintenance,
repair, restoration, demolition or replacement of property in the City as a result of the earthquake pursuant to
the Redevelopment Law, as then constituted, the Community Redevelopment Financial Assistance and
Disaster Project Law, as then constituted (Health & Safety Code Sections 34000 et seq., the "Disaster Project
Law"), the California Constitution, and all applicable local codes and ordinances.
See "THE EARTHQUAKE RECOVERY REDEVELOPMENT PROJECT" for additional
information on land use and property ownership within the Project Area.
Preliminary, subject fo change.
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Authority fop Issuance
The 2011 Bonds are being issued under the Redevelopment Law and pursuant to an Indenture of Trust
as supplemented by a First Supplement to Indenture of Trust, each dated as of April 1, 2006, and a Second
Supplement to Indenture of Trust dated as of May 1, 2011 (collectively, the "Indenture"), each by and between
the Agency and Union Bank of California, N.A., Los Angeles, California, as trustee (the "Trustee").
See "THE 2011 BONDS -Authority for Issuance."
Financing Purpose
Proceeds of the 2011 Bands will be used for the following purposes: (i) to pay Agency costs of
redevelopment activities in or of benefit to the Agency's Earthquake Recovery Redevelopment Project; (ii) to
provide for a debt service reserve for the 2011 Bonds; and (iii) to pay the costs of issuing the 2011 Bonds. See
"PLAN OF FINANCE."
Pledge of Tax Revenues
The 2011 Bonds are payable from and secured by Tax Revenues (as defined below), generally
consisting of a portion of the tax increment eligible for allocation to the Agency pursuant to the
Redevelopment Law from the Project Area. The pledge of Tax Revenues securing the 2011 Bonds is on a
parity with the pledge of Tax Revenues securing the 2006 Bonds (defined below).
Tax increment that the Agency is obligated to deposit into its Low and Moderate Income Housing
Fund (the "Housing Set-Aside") is included in the definition of Tax Revenues for the purpose of paying up to
20% of the debt service on the 2006 Bonds (see "THE EARTHQUAKE RECOVERY REDEVELOPMENT
PROJECT -Low and Moderate Income Housing") and a portion of the debt service on any Parity Debt to the
extent proceeds of such parity Debt are applied far eligible Housing Set-Aside purposes. Tax Revenues does
not include amounts that the Agency is obligated to pay to other taxing agencies pursuant to statutory pass-
through obligations established by the Redevelopment Law. See "THE EARTHQUAKE RECOVERY
REDEVELOPMENT PROJECT -Statutory Pass Through Requirements".
Outstanding Parity Debt
The 2011 Bonds are issued on a parity with the Agency's Earthquake Recovery Redevelopment
Project, 2006 Tax Allocation Refunding Bonds, Series A (the "2006A Bonds") originally issued in the
principal amount of $49,945,000 and the Agency's Earthquake Redevelopment Project, 2006 Taxable Tax
Allocation Refunding Bonds, Series B (the " 2006B Bonds" and collectively with the 2006A Bonds, the "2006
Bonds") originally issued in the aggregate principal amount of $14,775,000. The 2006 Series A Bonds are
currently outstanding in the principal amount of $49,945,000 and the 2006 Series B Bonds are currently
outstanding in the principal amount of $4,005,000.
Additional Parity Debt
The Indenture permits the Agency to issue additional bonds payable from Tax Revenues on a parity
basis to the 2006 Bonds and the 2011 Bonds. See "SECURITY FOR THE 2011 BONDS -Parity Debt."
The 2006 Bonds, the 2011 Bonds and future "Parity Debt" (defined below) issued under the terms of the
Indenture are collectively referred to in this Official Statement as the `Bonds."
Possible Risk Factors
Any future decrease in the taxable valuation in the Project Area or in the applicable tax rates could
reduce the Tax Revenues allocated to the Agency and correspondingly could have an adverse impact on the
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ability of the Agency to pay debt service on the 2011 Bonds. Currently pending legislation would eliminate
redevelopment agencies and alter the mechanism by which tax revenues would be made available to pay debt
service on the 2011 Bonds. See "RISK FACTORS: '
PLAN OF FINANCE
The 2011 Bonds are being issued primarily to pay the cost of redevelopment activities of the Agency
in or of benefit to the. Project Area. Proceeds of the 2011 Bonds will also be used to provide for a debt service
reserve account for the 2011 Bonds and pay the costs of issuing the 2011 Bonds.
Plan of Finance
Proceeds .from the sale of the 2011 Bonds will be used by the Agency to finance redevelopment
activities within or benefiting the Project Area, including but not limited to a payment to the City to satisfy a
portion of the Agency's obligations pursuant to the Master Cooperation Agreement dated as of September I,
2010 by and between the Agency and the City. See "THE AGENCY-Outstanding Agency Debt-City
Obligation" herein. The Agency (or the City pursuant to the Master Cooperation Agreement) plans on
applying 2011 Bond proceeds to fund the following:
[Describe use of proceeds for Projects]
Estimated Sources and Uses of Funds
The anticipated sources and uses of funds relating to the 2011 Bonds are as follows:
SOURCES OF FUNDS
Principal Amount $
Plzrs/Less: Net Premium/(Discount)
Less: Underwriters' Discount
Total Sources of Funds $
USES OF FUNDS
Costs of Issuance Fund P) $
Redevelopment Fund 1~1
2011 Reserve Account
Total Uses of Funds $
~'~ Represents the costs of issuing the 2011 Bonds, Trustee fees, Bond Counsel and Disclosure Counsel fees and expenses,
Agency Counsel fees; Financial Advisor fees and expenses, fiscal consultant fees and expenses, printing costs, rating agency
fees and other related costs.
«1 To be transferred to the Agency for deposit in the Redevelopment Fund.
THE 2011 BONDS
Authority for Issuance
The 2011 Bonds are being issued pursuant to the Redevelopment Law, the Indenhve, a resolution of
the Agency adopted on May 24, 2011, and a resolution of the City adopted on May 24, 2011. The 2011 Bonds
will initially be sold to Santa Monica Public Financing Authority, which will immediately sell the 201 I Bonds
to the Underwriters.
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Description
The 2011 Bonds will be dated their date of delivery (the "Closing Date"), will be issued as filly
registered bonds in denominations of $5,000 or any integral multiple of $5,000, and will mature in the amounts
and on the dates as set forth on the inside cover of this Official Statement.
Interest on the 2011 Bonds will be payable semiannually on January 1 and July I of each year (each,
an "Interest Payment Date"), commencing July 1, 2011.
Interest due on the 2011 Bonds will be calculated on the basis of a 360-day year comprised of twelve
30-day months at the respective rates per annum, as set forth on the inside cover page of this Official
Statement. Interest on the 2011 Bonds will be payable. from the Interest Payment Date next preceding the date
of authentication thereof unless (i) a 2011 Bond is authenticated on or before an Interest Payment Date and
after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest
Payment Date, (ii) a 2011 Bond is authenticated on or before the first Record Date, in which event interest
thereon shall be payable from the Closing Date, or (iii) interest on any 2011 Bond is in default as of the date of
authentication thereof, in which event interest thereon shall be payable from the date to which interest has been
paid in full, payable on each Interest Payment Date. A "Record Date" means, with respect to any Interest
Payment Date, the 15th calendar day of the month immediately preceding such Interest Payment Date, whether
or not such day is a Business Day.
Payment of interest on the 2011 Bonds is payable in lawful money of the United States of America on
each appropriate Interest Payment Date to the registered owner thereof according to the registration books of
the Trustee (the "Owner") as of the close of business on the Record Date.
DTC will act as securities depository for the 2011 Bonds. The 2011 Bonds will be executed and
delivered as fully-registered securities registered initially in the name of Cede & Co. (OTC's partnership
nominee). So long as Cede & Co. is the registered owner of the 2011 Bonds, as nominee of DTC, references
in this Official Statement to the "Owners" will mean Cede & Co., and will not mean the Beneficial Owners of
the 2011 Bonds. See APPENDIX F - "Book Entry-Only System."
Principal of and, premium, if any, and interest on the 2011 Bonds are payable directly to DTC by the
Trustee in lawful money of the United States of America. Upon receipt of payments of principal, premium or
interest, DTC is to remit such principal, premium or interest to the "DTC Participants" (as defined in
Appendix F) for subsequent disbursement to the Beneficial Owners of the 2011 Bonds. See APPENDIX F -
"Book Entry-Only System."
Redemption
Optional Redemption. The 2011 Bonds maturing on or before July 1, 20~ are not subject to
optional redemption prior to maturity.
The 2011 Bonds maturing on and after July 1, 20, are subject to redemption in whole, or in part
among maturities on such basis as shall be designated in a Request of the Agency filed with the Trustee, and in
any case by lot within a maturity, on any date on or after July 1, 20~ at the option of the Agency from any
available source of funds, at a redemption price equal to the principal amount of the ZOI1 Bonds to be
redeemed plus accrued interest thereon to the redemption date, without premium.
Mandatory Sinking Fund Redemption. The 2011 Bonds maturing July 1 in each of the years
and shall be subject to mandatory sinking fund redemption in part by lot on July 1,
July 1, and July 1, ,respectively, and on July 1 in each year thereafter, from Sinking Account
payments made by the Agency, at a redemption price equal to the principal amount thereof to be redeemed
together with accrued interest thereon to the redemption date, without premium, or in ]ieu thereof shall be
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