CRA/LA, A DESIGNATED LOCAL AUTHORITY (Successor Agency to The Community Redevelopment Agency of the City of , CA)

M E M O R A N D U M

DATE: AUGUST 5, 2021 2

TO: GOVERNING BOARD

FROM: DAN KAHN, CHIEF EXECUTIVE OFFICER

SUBJECT: PROPERTIES RETAINED FOR FUTURE DEVELOPMENT. Approve 12-month extension to Option Agreement with City of Los Angeles (“City”) for CRA/LA-owned property known as Marlton Square and identified as Long Range Property Management Plan (“LRPMP”) Asset ID Nos. 82 and 505-509.

RECOMMENDATION

That the Governing Board approve the City’s request to extend by 12-months (through September 2, 2022) the term of the Option Agreement for LRPMP Asset ID Nos. 82 and 505-509 (“Marlton Square”), providing additional time for the City to exercise its option to acquire CRA/LA’s fee interest in the assets.

SUMMARY

In its letter dated July 9, 2021 (Attachment A), the City requests a 12-month extension (through September 2, 2022) to the term of the Marlton Square Option Agreement (“Option Agreement”). The extension will allow the City more time to exercise its option. The term of the Option Agreement currently expires on September 2, 2021.

In September of 2017, the City entered into an Exclusive Negotiation Agreement (“ENA”) with MLK Partners, LLC, a private development firm and adjacent property owner, to pursue development of a 10.58-acre commercial retail center that would include both the City and CRA/LA sites. After numerous attempts and several amendments to extend the term of the ENA, a feasible acquisition and development plan did not materialize, and the City allowed the ENA to expire in March 2019. Negotiations with the developer ended in October 2020.

On April 6, 2021, the adopted a motion (Attachment B) relative to the City exercising its option to acquire the CRA/LA-owned parcels for the purpose of creating a public-private partnership for development of a state-of-the-art bioscience campus. City leaders concluded that Marlton Square is an ideal site for companies and training partners in need of large central space in the heart of Los Angeles and that the site can be developed in a manner that targets employment opportunities for individuals with a range of educational backgrounds and skill levels.

OPTION AGREEMENT – EXTENSION REQUEST PAGE 2

Marlton Square is located at 3700, 3742, 3750, 3760-3772 W. Martin Luther King Jr. Blvd. and 4023-4025 Marlton Avenue. CRA/LA owns 12 parcels (comprising 2.6 acres of land), as shown on the Marlton Square Property Ownership Map (Attachment C).

PREVIOUS ACTIONS

November 7, 2019 – Governing Board approved a 24-month extension (through September 2, 2021) to the Initial Term of the Option Agreement for CRA/LA Asset ID Nos. 82 and 505- 509.

April 6, 2018 – Governing Board approved an 18-month extension (through September 2, 2019) to the Initial Term of the Option Agreement for CRA/LA Asset ID Nos. 82 and 505- 509.

January 8, 2015 – Following approvals by the Governing and Oversight Boards and DOF, CRA/LA entered into 10 Option Agreements with the City of Los Angeles for assets categorized as Retain for Future Development within the LRPMP.

DISCUSSION & BACKGROUND

As shown in the table, below, the initial term of the Option Agreement was for three years, beginning on March 2, 2015, with an option to extend the Option Agreement by 18-months. On April 6, 2018, the Governing Board approved the 18-month extension through September 2, 2019. The City then requested an additional extension of 24-months through September 2, 2021. The City is now requesting an additional extension of 12-months through September 2, 2022.

Term of Marlton Square Option Agreement Approved Approved Extended Extension Proposed Agreement Initial Term Request Term Proposed Extended Term Asset Property Effective Initial Term Extended Expiration for 2nd Expiration Extension Expiration ID No. Description Date Term Expiration Term Date Extension Date Term Date 82, Marlton Square 3/2/2015 3 years 3/2/2018 18-months 9/2/19 24-months 9/2/2021 12-months 9/2/2022 505- (vacant land) 509

SOURCE OF FUNDS

No funding is being requested for this item.

ROPS AND ADMINISTRATIVE BUDGET IMPACT

There is no ROPS impact anticipated with this action. There is no impact on the Administrative Budget associated with this action.

Attachment A

(

ERIC GARCETTI MAYOR July 9, 2021

Governing Board of CRA/LA, A Designated Local Authority c/o Daniel Kahn, Chief Executive Officer CRA/LA, A Designated Local Authority 448 S. Hill Street, 12th Floor Los Angeles, CA 90013

RE: REQUEST FOR TWELVE MONTH EXTENSION OF OPTION AGREEMENT CITY – CRA/LA OPTION AGREEMENT C-125179 MARLTON SQUARE PROPERTIES –ID #s 82,505,506,507,508 & 509 Expiration of Current Extended Term: September 2, 2021 Additional Extended Term Requested to: September 2, 2022

Dear Governing Board Members:

With this letter, the City of Los Angeles (City) provides written notice requesting that the Governing Board of CRA/LA, a Designated Local Authority (CRA/LA), approve an Extension of Term for the City - CRA/LA Option Agreement referenced above, to the Extended Term date referenced above, in accordance with Section 7 of the Option Agreement.

Section 7 states that "… the Initial Term may be extended for the duration of the Extended Term to accomplish the preparation and submission of the disposition plan ... or to exercise the Option .... If the Governing Board determines (which determination shall not be unreasonably withheld or delayed) that the City has made significant progress toward the preparation and submission of the disposition plan or the exercise of the Option, as applicable, then the Governing Board, without any required approval of the Oversight Board, shall authorize the Extended Term." Following is the City's report on key components of the progress made to date on the preparation and submission of the Disposition Plan and the exercise of the Option for this project:

• In March 2016, all Marlton Square property owners/litigants completed a Global Settlement resolving all claims concerning access and related issues, allowing land holders to proceed to develop the City and City/CRA Option Properties Retained for Future Development at Marlton Square; Attachment A Mr. Daniel Kahn Request for Option Extension - Marlton Square July 9, 2021 Page 2

• The City and CRA/LA reached an agreement on Joint Appraisal Instructions per Section 12 of the Option Agreement; • In November 2016, initial appraisals were completed by both CRA/LA and the City, per Section 12 of the Option Agreement, that were within 10 percent and therefore established the initial Fair Market Value for acquisition. That appraisal will be updated by both parties within six months of the execution of the Option, as required; • In 2017, in pursuit of achieving a future Development and Disposition Agreement (DDA) within the Marlton Square Project site, the City entered into an Exclusive Negotiating Agreement (ENA) with MLK Partners, LLC (MLK), a Marlton Square landowner, that included the CRA/LA and City-owned parcels. Despite concerted efforts and multiple ENA extensions, the parties did not reach agreement on a DDA. The ENA with MLK was terminated in October 2020. • On March 3, 2021, City Council took additional actions to accelerate the exercise of the Option to obtain ownership of the CRA/LA parcels and partner with industry leaders to lease the entire publicly-owned site with the goal of the development of a state-of-the art bioscience campus or similar high-impact project providing jobs and/or goods and services for the community. • In May 2021, the City and CRA/LA updated both parties’ original appraisals. The new appraised values are more than 10 percent apart, and pursuant to Option Agreement Section 12, the City and CRA/LA are now working to engage a third appraiser required as part of the process to establish the Fair Market Value for the Option properties.

As noted by the above report, the City has made significant progress toward the preparation and future submission of a Disposition Plan for the site, along with actions that will lead toward exercising the Option and bringing this important project to fruition. The City therefore respectively requests an extension to the current Option Agreement term, to September 2, 2022. We look forward to completing all actions required to enter escrow and purchase the property from CRA/LA consistent with the provisions of the Option Agreement.

An approved Disposition Plan will be transmitted at a future date.

We want to thank CRA/LA staff for their continuing cooperation and assistance in this endeavor.

Thank you for your consideration.

Sincerely,

William Chun Deputy Mayor for Economic Development

cc: Hon. Mark Ridley-Thomas, Councilmember, 10th District Matthew W. Szabo, City Administrative Officer Sharon Tso, Chief Legislative Analyst Carolyn Hull, General Manager, EWDD Attachment B ECONOMIC DEVELOPMENT & JOBS MOTION

In the 1940's and 50's, Marlton Square was a thriving retail center known as Santa Barbara Plaza that was home to over 200 locally owned businesses and major department stores such as Broadway, May Company, and Woolworth's. Over time, investment in the area declined and the property deteriorated, resulting in severe blight by the 1990s.

The City's former redevelopment agency, the Community Redevelopment Agency of the City of Los Angeles (CRA) made extensive efforts to rehabilitate the area by establishing the Crenshaw Amended Redevelopment Project Area in 1994 and acquiring various parcels within Marlton Square. The goal was to attract new public and private investment, in partnership with the City, to facilitate a multi-phased development that included community-serving housing and commercial uses. CRA's efforts to redevelop the property, however, never came to fruition.

In 2012, CRA was dissolved and replaced by CRNLA, a Designated Local Authority, under the State dissolution statutes and was required to dispose of all of its retained property. On January 8, 2015, the City of Los Angeles (City) entered into an Option Agreement with CRA/LA which provides the City the option to purchase 2.7 acres (117 ,486 square feet) of real property located within Marlton Square, a 22-acre commercial district located in the Baldwin Hills/Crenshaw community of (C.F. 14-0425; Contract No. C-125179). The CRA/LA-owned properties consist of nine noncontiguous parcels that are collectively referred to as the Marlton Square site. In addition to the CRNLA-owned properties, the City owns 8 properties, and a portion of the parking lot, totaling 2.7 acres adjacent to the CRNLA-owned properties. The Option Agreement, which expires in September 2021, requires, among other things, that the City pay fair market value for the nine CRAILA-owned parcels.

In September 2017, the City entered into an Exclusive Negotiation Agreement (ENA) with MLK Partners, LLC, a private development firm and adjacent property owner, to pursue development of a 10.58-acre commercial retail center that would include both the City and CRA/LA owned sites. After numerous attempts and three amendments to extend the term of the ENA, a feasible acquisition and development plan did not materialize and the City allowed the ENA to expire in March 2019. Negotiations with the developer ended in October 2020.

Moving forward, it is in the City's best interest to exercise the Option Agreement to obtain ownership of the CRNLA parcels on the Marlton Square site and then partner with industry leaders to lease the entire publicly-owned site in order to facilitate the development of a state-of-the-art bioscience campus (Bioscience Campus).

The benefits of expanding bioscience opportunities in Los Angeles include fostering a sustainable diverse economy that meets citywide economic needs, meaningful well-paying jobs for city residents, and an opportunity to address environmental health and safety with new innovations. Currently, the bioscience industry in the City of Los Angeles directly employs 21,508 people with annual average earnings of $82,399.

The combination of research need, venture capital funding, educational opportunities, and the depth of the skilled labor pool make Los Angeles well positioned to continue its emergence as a national bioscience hub. The Bioscience Campus could help expand the vitality of the LA's bioscience economy, nurture home grown talent, and contribute to the long-term economic health of the community and City at-large.

The Marlton Square site is ideal for companies and training partners in need of large central space in the heart of Los Angeles, and could be developed in a manner that targets employment opportunities for individuals with a range of educational backgrounds and skill levels. Los Angeles has robust bioscience training and education programs to link residents to new bioscience job opportunities created at the Marlton S site.

There remai ificant o rtunity to revitalize Marlton Square in a manner that not only renews the econo ty of e area, but directly benefits surrounding residents. In addition to a

MAR 0 3 2021 Attachment B bioscience use, the City could also explore the inclusion of ancillary development on the site such as related commercial and residential uses.

In order to pursue acquisition of the Marlton Square site, Council action is needed to instruct the Economic and Workforce Development Department to perform the tasks identified in the Option Agreement, including the preparation of a disposition plan for the CRA/LA-mvned parcels and the determination of fair market value and purchase price for the parcels, and report back to Council with the final terms for the proposed purchase of the CRA/LA-owned parcels and for the exercise of the Option Agreement for the Council's consideration and potential action.

I THEREFORE MOVE that the Economic and Workforce Development Department, with the assistance of the Chief Leg1slative Analyst, City Administrative Officer. and City Attorney, be instruclcd to perform the activities necessary to allow the City to exercise the Option Agreement and to negotiate directly with CRA/LA, A Designated Local Authority, for the acquisition of CRA/LA-owned propeny located at 3700 W. Martin Luther King Jr. Boulevard (A.P.N. 5032-003-900), 3742 W. Martin Luther King Jr. Boulevard (A.P.N. 5032-003--906); 3750 W. Martin Luther King Jr. Boulevard (A.P.N. 5032-003-902); 3760 W. Martin Luther King Jr. Boulevard (A.P.N. 5032-003-904): 3772 W. Martin Luther King Jr. Boulevard (A.P.N. 5032-003-905); 3800 W. Martin Luther King Jr. Boulevard (A.P.N. 5032-004-900); 4023 Marlton Avenue (A.P.N. 5032- 003-903); 4013 Marlton Avenue (A.P.N. 5032- 003-901); to facilitate development of a bioscience campus and other related uses, develop strategies to implement the project, and report to Council with the final terms and conditions for the purchase of the CRA/LA-owned parcels and the exercise of the Option Agreement.

PRESENTED BY M~~~L~ttAs Council member, 10 " District

MARQUEECE-HARRIS DAWSON Counciimember 8th, District

~A-~~(j-. SECONDED BY ______:_/ ____ CURREN D. PRICE Counciimember 9th, District Attachment B

File No. 21-0259

ECONOMIC DEVELOPMENT AND JOBS COMMITTEE REPORT relative to the City exercising the Option Agreement and to negotiate directly with Community Redevelopment Agency/Los Angeles (CRA/LA), A Designated Local Authority, for the acquisition of certain CRA/LA-owned properties.

Recommendations for Council action, pursuant to Motion (Ridley-Thomas – Harris- Dawson – Price):

1. INSTRUCT the Economic and Workforce Development Department (EWDD), with the assistance of the Chief Legislative Analyst (CLA), City Administrative Officer (CAO), and City Attorney to perform the activities necessary to allow the City to exercise the option agreement and negotiate directly with CRA/LA, A Designated Local Authority, for the acquisition of CRA/LA-owned properties, to facilitate development of a bioscience campus and other related uses and develop strategies to implement the project, located at:

a. 3700 W. Martin Luther King Jr. Boulevard (APN 5032-003-900)

b. 3742 West Martin Luther King Jr. Boulevard (APN 5032-003—906)

c. 3750 West Martin Luther King Jr. Boulevard (APN 5032-003-902)

d. 3760 West Martin Luther King Jr. Boulevard (APN 5032-003-904)

e. 3772 West Martin Luther King Jr. Boulevard (APN 5032-003-905)

f. 3800 West Martin Luther King Jr. Boulevard (APN 5032-004-900)

g. 4023 Marlton Avenue (APN 5032- 003-903)

h. 4013 Marlton Avenue (APN 5032- 003-901)

2. INSTRUCT the EWDD to report with the final terms and conditions for the purchase of the CRA/LA-owned parcels and the exercise of the Option Agreement.

Fiscal Impact Statement: Neither the City Administrative Officer nor the Chief Legislative Analyst has completed a financial analysis of this report.

Community Impact Statement: None submitted.

Summary: Attachment B

On March 23, 2021, your Committee considered a Motion (Ridley-Thomas – Harris- Dawson – Price) relative to the City exercising the Option Agreement and to negotiate directly with the CRA/LA, A Designated Local Authority, for the acquisition of certain CRA/LA-owned properties. After consideration and having provided an opportunity for public comment, the Committee moved to recommend approval of the Motion. This matter is now submitted to Council for its consideration.

Respectfully Submitted,

Economic Development and Jobs Committee

PRICE: YES KREKORIAN: YES BLUMENFIELD: YES RAMAN: YES HARRIS-DAWSON: YES

-NOT OFFICIAL UNTIL COUNCIL ACTS- HOLLY L. WOLCOTT Attachment B OFFICE OF THE CITY CLERK City of Los Angeles CITY CLERK PETTY F. SANTOS Council and Public Services Division EXECUTIVE OFFICER 200 N. SPRING STREET, ROOM 395 LOS ANGELES, CA 90012 GENERAL INFORMATION - (213) 978-1133 FAX: (213)978-1040

April 6, 2021 ERIC GARCETTI PATRICE Y. LATTIMORE MAYOR DIVISION MANAGER

CLERK.LACITY.ORG OFFICIAL ACTION OF THE LOS ANGELES CITY COUNCIL

Council File No.: 21-0259 Council Meeting Date: April 6, 2021 Agenda Item No.: 18 Agenda Description: ECONOMIC DEVELOPMENT AND JOBS COMMITTEE REPORT relative to the City exercising the Option Agreement and to negotiate directly with Community Redevelopment Agency/Los Angeles (CRA/LA), A Designated Local Authority, for the acquisition of certain CRA/LA-owned properties.

Council Action: ECONOMIC DEVELOPMENT AND JOBS COMMITTEE REPORT- ADOPTED FORTHWITH

Council Vote: YES Blumenfield YES Bonin YES Buscaino YES Cedillo YES de León YES Harris-Dawson YES Koretz YES Krekorian YES Lee YES Martinez YES O'Farrell ABSENT Price YES Raman YES Ridley-Thomas YES Rodriguez

HOLLY L. WOLCOTT CITY CLERK

Adopted Report(s)Title 21-0259_PAAW Committee Report_3-23-21

AN EQUAL EMPLOYMENT OPPORTUNITY – AFFIRMATIVE ACTION EMPLOYER Attachment C MARLTON SQUARE DEVELOPMENT SITES & PROPERTY OWNERSHIP

Parcel D: FUTURE CITY DEVELOPMENT SITE Parcel C: LEEDS DEVELOPMENT SITE D1 Lots 14 - 21 portion of Lot 51 -- City C1 Lots 1-4 -- Leeds (MLK Marlton) Entities D2 Portion of Lot 52 -- City C2 New Leeds (MLK Marlton) Parcel -- portion of Lots 51 D3 Lots 10 - 13 -- CRA/LA- DLA (City Option) and 52 C3 Lots 5-9, 49-50, and 50A – CRA/LA-DLA (City Option) *

50A

D1 D3 C3 C1 C3 A2

B2 D2 C2

B1 A1

Parcel B: BUCKINGHAM PLACE SENIOR Parcel A: KAISER MEDICAL FACILITY B1 Portions of Lots 23 - 27 and a portion of Lot 52 -- META A1 Lots 28 - 48, portion Lots 51 and 52 Parcel B: METRO @ BUCKINGHAM SENIOR APARTMENTS A2 Easement to Martin Luther King Jr. Blvd B2 Lot 22, portions of Lots 23, 24, 25, 26, 27 and 52 -- META

*“CRA/LA-DLA is the successor to the City’s former redevelopment agency (a “Designated Local Authority”).