Community Redevelopment Agency of the CITY OF LOS ANGELES eRA/LA Building communities with jobs & housing DATE / JUL 11200a

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CRA File No. ®3CO Council District: .f. Contact Person: Gazala Pirzada (213) 977-1767 Honorable Council of the City of Los Angeles John Ferraro Council Chamber 200 N. Spring Street Room 340, City Hall Los Angeles, CA. 90012

Attention: Alan Alietti, Office of the City Clerk

COUNCIL TRANSMITTAL: Transmitted herewith, is a Board Memorandum adopted by the Agency Board on July 17, 2008, for City Council review and approval in accordance with the "Community Redevelopment Agency Oversight Ordinance" entitled:

VARIOUS ACTIONS RELATED TO: Authorization to Extend the Exclusive Right to Negotiate Agreement with Snyder RECP Valley Plaza, LLCfor Revitalization of the Valley Plaza Located Within the Earthquake Disaster Assistance Project for Laurel Canyon Commercial Corridor East Valley Region (C02)

RECOMMENDATION That City Council approve(s) recommendation(s) on the attached Board Memorandum.

ENVIRONMENTAL REVIEW

The recommended action does not constitute a "project" under CEQA guidelines. In anticipation of an OPA that may result from negotiations under the ENA, preparation of an Environmental Impact Report (EIR) is underway. The EIR will be presented to the CRA/LA Board for certification' preceding consideration of the OPA for approval by the Board and City Council. eRA/LA Building communities with jobs & housing

FISCAL IMPACT STATEMENT There is no fiscal impact to the City's General Fund, as a result of this action.

eci ta V. Estolano, Chief Executive Officer

cc: Alan Alietti, Office of the City Clerk (Original & 3 Copies on 3-hole punch) Lisa Johnson Smith, Office of the CAO Ivania Sobalvarro, Office of the CLA Helmi Hisserich, Office of the Mayor Noreen Vincent, Office of the City Attorney THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CA MEMORANDUM 6 DATE: JULY 17, 2008 LC2100

TO: CRA/LA BOARD OF COMMISSIONERS

FROM: CECILIA V. ESTOLANO, CHIEF EXECUTIVE OFFICER

RESPONSIBLE PARTIES: MARGARITA H. DE ESCONTRIAS, REGIONAL ADMINISTRATOR GAZALA PIRZADA, PROJECT MANAGER REGINA KIRSCHENBAUM, ASSISTANT PROJECT MANAGER

SUBJECT: AMENDMENT TO EXTEND THE EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT WITH SNYDER RECP VALLEY PLAZA, LLC FOR REVITALIZATION OF THE VALLEY PLAZA SHOPPING CENTER LOCATED WITHIN THE EARTHQUAKE DISASTER ASSISTANCE PROJECT FOR LAUREL CANYON COMMERCIAL CORRIDOR EAST VALLEY REGION (C02)

RECOMMENDATION

That the CRA/LA Board of Commissioners, subject to City Council review and approval, authorize the Chief Executive Officer or designee to:

Execute the third extension to the Exclusive Right to Negotiate Agreement with Snyder RECP Valley Plaza, LLC, for one hundred and eighty (180) days from July 12, 2008 to January 11, 2009 with two optional ninety (90)-day extensions to complete financial plans and environmental analysis and to finalize the deal points for an Owner Participation Agreement for redevelopment of the 22-acre Valley Plaza Shopping Center located in the Earthquake Disaster Assistance Project for the Laurel Canyon Commercial Corridor.

SUMMARY

Valley Plaza is an approximately 22-acre commercial site bounded by Victory Boulevard on the north, the 170 Freeway on the west and south, and by on the east (see Attachment A). It is located in the Earthquake Disaster Assistance Project for the Laurel Canyon Commercial Corridor ("Laurel Canyon Project"). The proposed project consists of the construction of a 664,000 square foot retail and entertainment center incorporating two department stores, restaurants, a multi-plex theater and 2,998 parking spaces. Extension of the Exclusive Right to Negotiate Agreement ("ENA") will provide the parameters and timeframe to complete negotiations for the proposed project culminating in the execution of an Owner Participation Agreement ("OPA"). On February 15, 2007, the CRA/LA Board of Commissioners and, subsequently, the City Council on April 11, 2007 approved the execution of an ENA with Snyder RECP Valley Plaza (lithe Developer"), LLC for a period of two hundred and seventy (270) days, with two optional ( ( VALLEY PLAZA ENA EXI t:NSION 2

ninety (90) day extensions. The ENA was extended in April and June of this year and expired on July 11, 2008. The recommended action requests approval to extend the ENA for a period of one hundred and eighty (180) days, with two optional ninety (90) day extensions, to complete the negotiations for and execute an OPA. This time is necessary to complete the EIR process for the Developer to continue to negotiate with existing property owners to complete propertyacquisition. Currently, the Developer owns approximately 70% of the total parcels on site. Over the next few months, the Developer proposes to pursue the acquisition of the remaining privately held properties on the Site, initiate relocation activities and complete environmental analysis and project design. . Extension of the negotiation period for the ENA will enable CRA/LA staff to continue negotiations with the Developer and bring back a final project to the Board for approval. Extension of the ENA will also allow the Developer to complete negotiations and execute lease documents with the proposed anchor tenants, complete the financial plans as well as finalize the deal points for execution of the OPA.

During the ENA period previously approved, the following was accomplished:

• The Developer conducted Significant community outreach to receive input on the proposed project scope and design. The project received approval formally by the Mid- Town Neighborhood Council.

o CRA/LA staff and consultants analyzed several design and development alternatives presented by the Developer and explored various approaches to reduce the project funding gap in order to arrive at an option that is feasible from both economic and community benefit points of view.

• An agreement was reached between the Developer and Macy's department store to relocate the store from its current location on to the proposed Valley Plaza shopping center site.

• . The Developer has continued to- negotiate with remaining property owners .and is in the process of finalizing acquisition deals with three major property owners.

• Pursuant to the California Environmental Quality Act (CEQA) requirements, a Draft EIR was completed and circulated for public review in November 2007. The public review period for the Draft EIR ended on December 19, 2007. It is estimated that the Final EIR will be completed by November 2008. As part of this process, the Developer has agreed to provide several additional traffic mitigation measures requested by Los Angeles Department of Transportation.

• CRA/LA staff also met with the City staff from the departments of Recreation and Parks and City Planning and discussions are ongoing regarding the transfer of a portion of the Valley Plaza Park and the adoption of a Community Plan Amendment respectively.

February 15, 2007 - CRA/LA approval to enter into an ENA with Snyder RECP Valley Plaza, LLC for a 270- day period with the option for two 90 day extensions. VALLEY PLAZA ENA EXTI::I'-lSION 3

April 11,2007- City Council approval of the CRA/LA action.

SOURCE OF FUNDS

Earthquake Disaster Assistance Project for the Laurel Canyon Commercial Corridor Tax Increment and bond proceeds.

ENVIRONMENTAL REVIEW

The recommended action does not constitute a "project" under CEQA guidelines. In anticipation of an OPA that may result from negotiations under the ENA, preparation of an Environmental Impact Report (EIR) is underway. The EIR will be presented to the CRA/LA Board for certification preceding consideration of the OPA for approval by the Board and City Council.

PROGRAM AND BUDGET IMPACT

The recommended action is consistent with the FY2009 Budget and Work Program. No CRA/LA funds are required for this action.

BACKGROUND

Valley Plaza Shopping Center is one of the first large-scale open-air shopping centers in . Like many older shopping centers, Valley Plaza consists of multiple property ownerships, poor parcelization, and lack of maintenance and general deterioration. It is poorly configured and contains buildings that are functionally obsolete in today's retail environment. The devastating effects of the 1994 Northridge Earthquake further hastened the Plaza's decline.

At the time of adoption of the Laurel Canyon Project, it was believed that recovery could be accomplished entirely through rehabilitation activities. That approach did not prove successful for revitalization of the shopping center. A new revitalization approach consisting of a combination of rehabilitation and new development was considered more appropriate.

An EIR was initiated in June 2006. In accordance with the Owner Partlclpation Rules for the Laurel Canyon Project, approved by the CRA/LA Board and City Council in April 1998, Statement of Interest e'SOI") letters were sent to property owners on August 28, 2006. The deadline to submit responses to the SOl letters was September 29,2006. Eight responses were received. All but one of the property owners expressed a desire to participate at their existing locations. Subsequently, Staff issued a RFP to the SOl respondents on October 28, 2006. One development proposal from Snyder RECP Valley Plaza, LLC, an entity formed by J.h. Snyder Company, was received in response to the RFP by the deadline of December 4, 2006. An evaluation of the proposal by CRA/LA Staff indicated that it fulfilled all the requirements set forth in the RFP. An ENA with the Developer was, subsequently, executed in April 2007 for a period of 270 days with two 90-days extensions which were approved by the Chief Executive Officer -andexpired on July 11, 2008.

As currently proposed, the Valley Plaza Shopping Center project consists of the development of 664,000 square feet of commercial space including two department stores, restaurants and other commercial retail uses, a multi-plex theater and a 2,998 space parking garage. The proposal includes replacing land currently devoted to a portion of Valley Plaza Park with VALLEY PLAZA ENA E~" eNSION 4

commercial development. That portion of Valley Plaza Park is approximately five acres and is situated south of Victory Boulevard along the easterly edge of the 170 Freeway adjacent to existing commercial property that fronts Laurel Canyon Boulevard. The Developer is proposing to replace the existing park with the construction of a new park, with the same acreage as the original, southwest of Radford Avenue and Erwin Street, on land currently used as a parking lot for Laurel Plaza where the Macy's Department Store is currently located.

The proposed project will provide the following economic and community benefits:

• Provide upgraded retail and entertainment uses in a creatively designed retail center and community gathering place

• Generate approximately 1500 permanentjobs and 1900 construction jobs

• Provide additional annual sales tax revenue of over $2.0 million

• Facilitate the development of the neighboring Laurel Plaza site into a condominium and apartment residential complex

• Replace the existing irregularly shaped and unattractive piece of Valley Plaza Park with a new public park on the Laurel Plaza site

• Comply with all CRA/LA policies including Living Wage and Prevailing Wage, Art Policy etc.

Developer Team

The J.h. Snyder Company is a successful development company with extensive experience in retail and mixed-use projects. Its portfolio currently consists of over 1 million square feet of existing multi-family, office and retail uses. During its 53-year history, the Developer has built 40,000 single-family homes, apartments and condominiums and 4 million square feet of retail and office space. Included are award-winning projects such as the Wilshire Courtyard,the Water Garden, and . Currently, the Developer is in the process of ···initiatingconstructionof-Phas8.III-of-NobioCommons,-athree.phase-mixed~use.projectlocated-- adjacent to the Red Line Metro station in the North Hollywood Redevelopment Project Area. Phases I and II consisting of 730 residential units, including 143 affordable units and 60,000 square feet of retail space are completed. Construction of Phase III consisting of 180,000 square feet of office space, a 7-screen Laemmle Theater and a 600 space parking garage is anticipated to commence within the next three months. The team assembled by the Developer for the Valley Plaza project includes Elkus Manfredi Architects, designers of such projects as The Grove near Farmers Market in Los Angeles.

Preliminary Financing Plan

CRA/LA staff anticipates that the project will have a funding gap. At the conclusion of the negotiation period, an OPA between the CRA/LA and the Developer is expected to be executed that would provide gap financing for the proposed project to further the goals of the Laurel Canyon Redevelopment Plan. It is anticipated that site-specific tax increment resources will be leveraged with other resources such as New Market Tax Credits and other state and/or federal VALLEY PLAZA ENA EXT I::I'-lSION 5

sources of funding. To facilitate the development of the proposed project, a Redevelopment Plan Amendment has been initiated that includes the following: a) addition of eminent domain authority; b) extending the period of effectiveness of the Plan from 2012 to 2027; c) extending the time for incurring debt from 2009 to 2024; d) extending the last date to receive tax increment from 2031 to 2041; and, e) increasing the limitation on the amount of bonded indebtedness from the current level of $25.0 million to an amount that will be identified by financial analysis required for the proposed Plan Amendment, based upon a work program that includes the redevelopment of the Valley Plaza Shopping Center and fulfillment of other goals and objectives of the Redevelopment Plan.

Cecilia V. Estolano Chief Executive Officer

By:

e n F. Wasserman ief Operating Officer

There is no conflict of interest known to me which exists with regard to any CRA/LA officer or employee concerning this action.

Attachments

Attachment A - Project Location Map VALLEY PLAZA ENA EXTb~SION 6

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