protest - City Clerk Internet Site - City of Los Angeles

protest - City Clerk Internet Site - City of Los Angeles

BROWN GORDON K. ENG WINFIELD CANZONERI E-MAIL: [email protected] PROTEST ABRAM INC. C'F DIRECT DIAL: 213.687.2176 DIRECT FAX: 213.687.1776 t)~-...

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BROWN

GORDON K. ENG

WINFIELD CANZONERI

E-MAIL: [email protected]

PROTEST

ABRAM INC.

C'F

DIRECT DIAL: 213.687.2176 DIRECT FAX: 213.687.1776

t)~-D9S7

Cc..( ": -:5(2<3(0<6

File No. 1378-3

May 27,2008

BY COURIER FOLLOWED BY U.S. MAIL Rockard J. Delgadillo, Esq. City Attorney City of Los Angeles 800 City Hall East 200 N. Main Street Lds Angeles, CA 90012

David J. Michaelson, Esq. Chief Assistant City Attorney City of Los Angeles 800 City Hall East 200 N. Main Street Los Angeles, CA 90012

Noreen Vincent, Esq. City of Los Angeles Supervising City Attorney 800 City Hall East 200 N. Main Street Los Angeles, CA 90012

Ms. Karen Kalfayan Interim City Clerk Office of City Clerk City of Los Angeles Room 224 200 N. Spring Street Los Angeles, California 90012

Mr. Paul Makowski BID Analyst Special Assessment Section Office of City Clerk City of Los Angeles Room 224 200 N Spring Street Los Angeles, CA 90012 Re:

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Proposed Century City Property Based Improvement District ("PBID")

To Each of the Persons Addressed Above: This firm represents certain owners of properties located along Century Park East who are not affiliated with the proponents of the PBID, as listed on Schedule A attached hereto (the "ePE Owners"). As our office has discussed with Noreen Vincent and briefly with David Michaelson, the proposed PBID as presented in the May 19, 2008 report by the Interim City Clerk to the ATTORNEYS AT LAW ONE CALIFORNIA PLAZA

TELEPHONE: 300

497664.4 001378.0003 5/27/2008 -12:15 PM

213.687.2100

SOUTH GRAND

FACSIMILE:

213 ..687.2149

AVENUE, 14TH FLOOR, LOS ANGELES,

WWW.SWCALAW.COM CALIFORNIA

90071-3124

.

Rockard J. Delgadillo, Esq., Noreen Vincent, Esq., Mr. Paul Makowski, David 1. Michaelson, Esq., Ms. Karen Kalfayan May 27, 2008 Page 2

Council is based on major factual and legal deficiencies which, if adopted and accepted, will put the City at risk for assuming significant maintenance and improvement obligations that were conditions of the entitlements for the so called "ALCOA" parties Avenue of the Stars development. The proponents propose as part of their Management District Plan to terminate those covenants. Following is a more detailed discussion of issues which warrant the City Attorney's review: I. The PBID will allow the ALCOA parties to escape their obligation to install and

maintain the median along the Avenue of the Stars The property owners along Avenue of the Stars are bound by covenants which run with the land to install and maintain the improvements along the Avenue of the Stars. These obligations originated with the Aluminum Company of America ("ALCOA") when it developed Century City and are described in more detail in the so called "ALCOA Agreement," I The median contains the Century City fountains and landscaping. The proponent's Management District Plan recites their intention to terminate the ALCOA Agreements and require the PBID to absorb these responsibilities. It is the intent of the PBID to take over the responsibility of this maintenance whereby

the existing agreement [ALCOA Agreement] will be terminated in accordance with its terms. (Management District Plan, dated May 5, 2008, Section 4 first paragraph; bracketed language added.) While proponents emphasize that the ALCOA Agreement may be terminated, they neglect to note that in the very same paragraph which allows the termination of the obligation to perform the maintenance work, ALCOA agreed to continue to be bound to lli!Y for the performance of the work. ALCOA waived their right to protest any action by the City to assess the Avenue of the Stars property owners for the cost to install and maintain the median.

I Covenant and Agreement Re Beautification, dated Feb. 2, 1962, between Aluminum Company of America and City of Los Angeles (the "Base Alcoa Agreement"). The proponents fail to fully disclose in the PBID that there are further agreements which amend the Alcoa Agreement and extend the covenant to other property owners, including the Landscape and Maintenance Agreement, recorded Jan. 3, 1983 Doc. 83-2366, between Century City, Inc. and Studio Properties Co. (which also creates an obligation to maintain a strip of land which runs along Century Park West); Allocation of Responsibility Under Landscape and Maintenance Agreement; Doc. 85-143272; Grant Deed Century City, Inc. to Century Hill North Co., recorded Sept. 30, 1981 Doc. 81-967566; Grant Deed from Century City Inc. to Great Western Savings and Loan Assn.; Grant Deed from Century City Inc. to Le Pare dated Sept. 26, 1977; Agreement among Century City Inc, S. Jon Kreedman and Century Towers Assn. dated Feb.16, 1973. Copies of these agreements were only provided to us by proponents after we began to investigate the provisions of the PBID.

497664.4 001378.0003 5/27/2008 - 12:15 PM

Rockard J. Delgadillo, Esq., Noreen Vincent, Esq., Mr. Paul Makowski, David J. Michaelson, Esq., Ms. Karen Kalfayan May 27, 2008 Page 3

.. the undersigned hereby covenant to and agree with said City that with respect to their rights in and to such proceedings because of their ownership of said real property, they will not make any objection or protest, as provided for in section 22089 of the [Streets and Highways] Code, to one or more such proceedings. (ALCOA Agreement pages 3-4; bracketed language added.) While a PBID creates an assessment district, it is not permanent. A PBID has an initial term of 5 years and then must be renewed for successive 10 years term. But at any time by a 50% vote of the owners in the District (a vote which the proponents control) the PBID can be terminated. The proponents have not provided for a continued performance of the ALCOA obligations or obligation to pay the City to perform the work after the PBDI expires or it terminated. By allowing a bare termination of the ALCOA Agreement the City may lose its right to compel the Avenue of the Stars property owners to either perform the work or pay for same. A number of alternatives are available for the City to solve this issue. The ALCOA Agreement could be merely suspended during the existence of the PBID, The properties subject to the ALCOA Agreement (and the related agreements) could be subject to a further covenant which calls for the continuation of the ALCOA obligations if the PBID fails to perform those obligations, terminates or expires. By allowing the proponents to terminate the ALCOA Agreement without replacing these private obligations with a comparable substitute we are concerned that such action may also be considered a gift of public funds which would also be an improper use of a PBID. II. The Ordinance of Intention is reaching conclusions that violate Due Process The following are sections contained in the proposed Ordinance of Intention: Sec. 3. PARCELS WITHIN THE DISTRICT .. The City Council hereby affirms its finding that all parcels, which will have a special benefit conferred upon them and upon which an assessment will be imposed, are identified in the Management District Plan. Sec. 4. PROPORTIONAL BENEFIT. The City Council hereby reaffirms that the assessment proposed to be imposed on each parcel does not exceed the reasonable cost of the proportional benefit conferred on that parcel. Sec. 5. SEPARATION OF GENERAL AND SPECIAL BENEFITS. The City Council hereby affirms that it has separated the general benefits, if any, from the special benefits conferred on the each parcel.

497664.4 001378.0003 5127/2008- 12:15 PM

Rockard J. Delgadillo, Esq., Noreen Vincent, Esq., Mr. Paul Makowski, David 1. Michaelson, Esq., Ms. Karen Kalfayan May 27,2008 Page 4

Sec. 6. ASSESSMENTS SUPPORTED BY ENGINEER'S REPORT. The City Council hereby affirms that all proposed assessments are supported by a detailed engineer's report prepared by a registered professional engineer certified by the state of California. These statements in the proposed Ordinance of Intention are drafted as findings of the City Council. As the City Council has not yet held a public hearing on this matter, it is inappropriate for these "findings" to be included in the proposed Ordinance of Intention (as opposed to the Ordinance of Establishment which should be issued if the PBID is accepted after public hearing and Council approval). III. The posting of an inaccurate and out of date staff report and related documents may not satisfy the public notice requirement in Los Angeles The Los Angeles City Council Agenda containing the PBID matter appears to have been posted at least seventy-two (72) hours in advance of the City Council meeting addressing the matter. However, the City Clerk's office failed to attach an accurate staff report and other related documents, including a current Engineer's Report and PBID Management Plan. The latest version of the staff report and related documents incorporate some of the changes the CPE Owners have suggested and the proponents have accepted. The revised May 2008 version of the PBID greatly differs from the documents that were posted by the city clerk on Friday, May 23,2008. The public relies on the accuracy of staff reports and related documents. Interested parties might opt out of attending the City Council meeting based on the content of these documents. To the extent out of date PBID documents were attached to the City Council agenda, justice requires that the public receive adequate notice and time to consider the same documents that the City Council will consider when voting on the PBID at the May 28, 2008 City Council meeting. We received the update today but we are looking for guidance from the City Attorney as to if posting inaccurate, out of date information satisfies the notice requirement in Los Angeles.

* * * * * In summary, the above described flaws in the PBID must be corrected before it is allowed to proceed. Please note that we are also sending a more detailed objection letter to the Mayor, the City Council, City Clerk and City Attorney, describing these and further deficiencies in the PBID.

497664.4 001378.0003 5127/2008 - 12:15 PM

Rockard J. Delgadillo, Esq., Noreen Vincent, Esq., Mr. Paul Makowski, David J. Michaelson, Esq., Ms. Karen Kalfayan May 27,2008 Page 5

We respectfully request that the PBID be rejected in its current form. If you have any questions, please feel free to call. Sincerely yours,

GKEIkt cc:

Ann D'Aifiato, Esq. Noreen Vincent, Esq. Anthony Canzoneri, Esq. CPE Consortium

497664.4 001378.0003 5/2712008-12:15 PM

Rockard J. Delgadillo, Esq., Noreen Vincent, Esq., Mr. Paul Makowski, David 1. Michaelson, Esq., Ms. Karen Kalfayan May 27,2008 Page 6

Schedule A - CPE Owners

Cameron Benson, CPM, RP A Watt Companies 1875 Century Park East, Suite 110 Los Angeles, CA 90067 [email protected]

Mr. Robert D. Held Held Properties 1880 Century Park East, Suite 500 Los Angeles, CA 90067 [email protected]

Jon Borg, CPM, RP A Held Properties 1880 Century Park East, Suite 500 Los Angeles, CA 90067 [email protected]

Mr. Kevin Houser Broadway Partners 1888 Century Park East Los Angeles, CA 90067 [email protected]

Mr. JeffR. Buttikofer Realtech Construction Co., LLC 2080 Century Park East, Penthouse Los Angeles, CA 90067 j [email protected]

Ms. Linda Potts General Manager CB Richard Ellis, Asset Services 1800 Century Park East, Suite 330 Los Angeles, CA 90067 [email protected]

Ms. January P. Garabedian Equity Office 1888 Century Park East, Suite 1104 Century City, CA 90067 January [email protected]

497664.4 001378.0003 5/27/2008 - 12:15 PM

BROWN

GORDON

WiNFIELD CANZONERI

K. ENG

E-MAIL: [email protected]

P

ABRAM fNC.

C

EST a F - bg~ b'lS"

DIRECT DIAL: 213.687.2176 DIRECT FAX: 213.687.1776

c.I I-I~ _ 6/'-
May 27, 2008 BY COURIER FOLLOWED BY U.S. MAIL The Honorable Antonio R. Villaraigosa The City Council of the City of Los Angeles The City Attorney of the City of Los Angeles The City Clerk of the City of Los Angeles Lisa Trifiletti, Esq. Persons on the attached Distribution List Re: Proposed Century City Property Based Improvement District ("PBID") To The Hon. Villaraigosa, Councilmembers, The City Attorney, The City Clerk and Ms. Trifiletti: This firm represents certain owners of properties located along Century Park East who are not affiliated with the proponents of the PBID, as listed on Schedule A attached hereto (the "CPE Owners"). All of the property owners in Century City, my clients included, have been proud to participate in the development and success of this signature location in the City of Los Angeles. We are, however, concerned that this historic alliance not be subverted by a rushed and closed door process that was directed and controlled by a few property owners that had an incentive to be relieved of maintenance and improvement covenants that were long ago established as conditions of the entitlements that were granted by the City permitting the development of those proponents' property, While we are pleased to report that the PBID proponents have, within the last few weeks, have begun to address the concerns of the CPE Owners and work in a cooperative manner, the proponents have not adequately corrected the provisions of the PBID so that they are fair to the City and CPE Owners. This is a fiscal and practical issue that will adversely and . irrevocably jeopardize and impair the rights of the City and the Century Park East owners. It goes far beyond the importance of correcting the flaws we have observed in the PBID's compl,iancewith legal requirements. That is in the interest of all owners. While we believe that the proponents of the PBID do understand the importance of not starting of on a wrong and divided step in forming a landm~rk alliance of Century City ATTORNEYS AT LAW

TELEPHONE: 213.687.2100

ONE CALIFORNIA PlAZA 493757.7 0013780003

5125/2008

FACSIMILE: 213.687.2149

WWW.BWCALAW.COM

300 SOUTH GRAND AVENUE, 14THFLOOR, LOS ANGELES, CALIFORNIA 90071-3124

- 10:00 PM

May 27, 2008 Page 2 property owners, the rush to meet the City Clerk's and the proponents' artificially imposed deadline for adoption, has prevented staff from conforming the report and action before you to what we thought was a mutually acceptable resolution. Because the PBID documents before you do not reflect the appropriate changes which (i) are necessary to correct legal defects in the PBID documents, and (ii) which reflect the spirit of our recent meetings with the proponents, as well as changes the proponents' have agreed to make, we submit the following as our formal objection and confirmation of matters which should be addressed to form a legally and practically effective alliance of Century City property owners. This letter has two major parts: In PART 1, we have described the legal challenges to the PBID in its current form. To highlight' some of the major points: Certain costs such as security, landscaping along Century Park West, street sweeping, and related administrative expenses are being improperly charged to the owners of property along Century Park East (the "CPE Owners") because the CPE. Owners neither receive a statutorily required "special benefit" nor is there a constitutionally required reasonable relationship of the cost charged to the CPE Owners and the benefit received. The PBID documents do not contain protection/assurances that the PBID will not be later amended so that the described services and improvements will not be materially altered. The property owners along Avenue of the Stars have an obligation to install and maintain the fountains, landscaping and other work in the median along Avenue ofthe Stars. The proponents intend to terminate these obligations and replace them with the PBID. However the PBID will terminate in 5 years (unless extended) and can be terminated at any time by a vote of the District. The PBID, standing alone, does not provide a sufficient replacement for the current obligation of the Avenue of the Stars property owners. We have made progress with the proponents in preventing the shifting of the cost of performing the-is Avenue of the Stars work to the rest of the District but when the District ends there will be a shifting of these costs to the City and this issue has not been addressed by the proponents. The PBID document contains information and claims which are inaccurate and in some instances the PBID fails to disclose material information.

493757.7 001378.0003 5/25/2008

- 10:00 PM

May 27,2008 Page 3 In PART 2, we have provided our proposed changes to the PBID and some related correspondence between the proponents and the CPE Owners regarding changes to the PBID. To highlight some of the major points: The proponents have accepted some of our requested changes, resulting in their submission of the March 2008 version of the Management District Plan, which amended their original petition version dated February 23, 2007. The primary changes in the March 2008 PBID document is a recognition that many of the proposed services and capital expenditures were not appropriate and to confirm that the rest of the District should not be charged for the Avenue for the Stars work. We were not informed that the proponents were submitting the March 2008 PBID document. After the document was submitted we had an opportunity to discuss necessary revisions and the proponents agreed to make changes that are identified in PART 2. However, critical changes have not been accepted and they are attached. One thrust of the attached revisions if to separate the CPE Owners from services . and work for which they should not be charged. Our changes include a worksheet which shows that the CPE Owners can be removed from the allocated costs for the Century Park West landscaping, security, street sweeping and administrative expenses without causing any increase in the assessments proposed in the petition for the PBID. Therefore, under the PBID statute the City Council can implement the requested changes. Another thrust of the changes is to define a procedure for the termination or suspension of the private agreements which the Avenue of the Stars property owners have for the maintenance of the Avenue of the Stars median during the existence of the PBID but revival of these obligation if the PBID terminates. Additionally, we have drafted procedures to prevent changes in the PBID after its adoption which will undermine the protections which are necessary to preserve and maintain an equitable District. Our changes also include specific wording changes which address the other .deficiencies described in PART 1. In summary, there are a number of significant legal flaws in the PBID and overall there is an elemental unfairness of the structure of the PBID. We respectfully request that the PBID be rejected in its current form . . If you have any questions, please feel free to call.

493757.7 001378.0003 5/25/2008

- 10:00 PM

May 27, 2008 Page 4 Sincerely yours,

GKE/kt cc:

Anthony Canzoneri, Esq. CPE Consortium

493757.7 001378.0003 5125/2008- 10:00 PM

May 27, 2008 Page 5 Distribution List Name

Address

The Honorable Antonio R. Villaraigosa

Mayor City of Los Angeles 200 North Spring Street Los Angeles, CA 90012-4810

City Attorney of Los Angeles

800 City Hall East 200 N. Main Street Los Angeles, CA 90012 Attention: Noreen Vincent, Esq.

The Honorable Ed P. Reyes

Councilmember 151 District City of Los Angeles 200 North Spring Street, Room 410 Los Angeles, CA 90012-4810

The Honorable Wendy Greuel

Councilmember 2nd District City of Los Angeles 200 North Spring Street, Room 475 Los Angeles, CA 90012-4810

The Honorable Dennis P. Zine

Councilmember 3rd District City of Los Angeles 200 North Spring Street, Room 450 Los Angeles, CA 90012-4810

The Honorable Tom LaBonge

Councilmember 4th District City of Los Angeles 200 North Spring Street, Room 480 Los Angeles, CA 90012-4810

The Honorable Jack Weiss

Councilmember 5th District City of Los Angeles 200 North Spring Street, Room 440 Los Angeles, CA 90012-4810

The Honorable Tony Cardenas

Councilmember 6th District City of Los Angeles 200 North Spring Street, Room 455 Los Angeles, CA 90012-4810

The Honorable Richard Alarcon

Councilmember 7th District City of Los Angeles

493757.7

001378.0003

512512008 - 10:00 PM

May 27,2008 Page 6 Name

Address 200 North Spring Street, Room 425 Los Angeles,CA 90012-4810

The Honorable Bernard C. Parks

Councilmember 8th District City of Los Angeles 200 North Spring Street, Room 460 Los Angeles, CA 90012-4810

The Honorable Jan Perry

Councilmember 9th District City of Los Angeles 200 North Spring Street, Room 420 Los Angeles, CA 90012-4810

The Honorable Herb J. Wesson, Jr.

Councilmember 10th District City of Los Angeles 200 North Spring Street, Room 430 Los Angeles, CA 90012-4810

The Honorable Bill Rosendahl

Councilmember 11th District City of Los Angeles 200 North Spring Street, Room 415 Los Angeles, CA 90012-4810

The Honorable Greig Smith

Councilmember 12th District City of Los Angeles 200 North Spring Street, Room 405 Los Angeles, CA 90012-4810

The Honorable Eric Garcetti

Councilmember 13th District City of Los Angeles 200 North Spring Street, Room 470 Los Angeles, CA 90012-4810

The Honorable Jose Huizar

Councilmember 14th District City of Los Angeles 200 North Spring Street, Room 465 Los Angeles, CA 90012-4810

The Honorable Janice Hahn

Councilmember 15th District City of Los Angeles 200 North Spring Street, Room 435 Los Angeles, CA 90012-4810

Karen E. Kalfayan

City Clerk City of Los Angeles

493757.7 001378.0003 5125/2008 -10:00 PM

May 27, 2008 Page 7 Name

Address 200 North Spring Street, Room 395 Los Angeles, CA 90012

Lisa Trifiletti, Esq.

District Counsel & Senior Planning Deputy Fifth Council District 822 S. Robertson Blvd., Suite 102 Los Angeles, CA 90035

493757.7

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5125i2008 - 10:00 PM

May 27,2008 Page 8 Schedule A - ePE Consortium

Cameron Benson, CPM,. RP A Watt Companies 1875 Century Park East, Suite 110 Los Angeles, CA 90067 [email protected]

January P. Garabedian Equity Office 1888 Century Park East, Suite 1104 Century City, CA 90067 january [email protected]

Jon Borg, CPM, Rf> A Held Properties 1880 Century Park East, Suite 500 Los Angeles, CA 90067 [email protected]

Robert D. Held Held Properties 1880 Century Park East, Suite 500 Los Angeles, CA 90067 [email protected]

JeffR. Buttikofer Realtech Construction Co., LLC 2080 Century Park East, Penthouse Los Angeles, CA 90067 [email protected]

Kevin Houser Broadway Partners 1888 Century Park East Los Angeles, CA 90067 [email protected] Linda Potts, General Manager CB Richard Ellis, Asset Services 1800 Century Park East, Suite 330 Los Angeles, CA 90067 linda. [email protected]

493757.7 001378.0003 512512008 - 10:00 PM

May 27,2008 Page 9 PART 1- LEGAL CHALLENGES TO PBID While the PBID proponents assert that the PBID is for the benefit of all of Century City, the PBID is seriously flawed and should be rejected or modified in order to correct its inequities and other legal flaws. Among its most fatal defects are: 1. The PBID Creates a Procedure Which Can Saddle The City With The Alcoa Parties' Ongoing Obligations To Maintain And Repair The Improvements And Landscaping Within The Avenue Of The Stars Median. 2.

The Proponents Have Not Satisfied The Purposes Of The PBID Statute .

. 3. The Cost Allocations Do Not Satisfy California Constitutional Regarding the Fairness Of The Allocated Assessments.

Requirements

4. The Budget Has Been Developed In A Fundamentally Flawed Manner So They Do not Comply With Applicable Law. 5. The Information Contained In the Petition For The PBID Is Not Accurate Rendering It Defective. 6. The Proponents Are Not Ready To Proceed So An Approval Of the PBID Is Not Yet Appropriate. 1.

The PBID Creates a Procedure Which Can Saddle The City With The Alcoa Parties' Ongoing Obligations To Maintain And Repair The Improvements And Landscaping Within· The Avenue Of The Stars Median. The property owners along A venue of the Stars (the "Alcoa Parties") promised the City that they would install, maintain and preserve the landscaping, irrigation systems, fountains, and other landscaping within the Avenue of the Stars median or pay the City to perform this work (the "Alcoa Agreements") 1• Some of the Alcoa Parties are within the proposed District and some have been left out. The proponents state that they will terminate the Alcoa Agreements prior to the effectiveness of the PBID. By terminating the Alcoa Agreements the proponents will replace the long term Alcoa obligations with a short term patch. The PBID has an initial term of only five (5) years. Even this five year term can be shortened because the PBID statute allows the PBID to be terminated at any time by a

I Covenant and Agreement Re Beautification, dated Feb. 2, 1962, between Aluminum Company of America and City of Los Angeles (the "Base Alcoa Agreement"); Landscape and Maintenance Agreement, recorded Jan. 3, 1983 Doc. 83-2366, between Century City, Inc. and Studio Properties Co.; Allocation of Responsibility Under Landscape and Maintenance Agreement; Doc. 85-143272; Grant Deed Century City, Inc. to Century Hill North Co., recorded Sept. 30, 1981 Doc. 81-967566; Grant Deed from Century City Inc. to Great Western Savings and Loan Assn.; Grant Deed from Century City Inc. to Le Pare dated Sept. 26, 1977; Agreement among Century City Inc, S. Jon Kreedman and Century Towers Assn. dated Feb.16, 1973 - copies provided by proponents.

493757.7 001378.0003 5/2512008 - 10:00 PM

May 27, 2008 Page 10 50% vote of the PBID members. As we know, the proponents control a 50% block, as this vote was needed to petition for the PBID. The proponents have not offered a permanent assurance that the Alcoa Parties will continue to perform their obligations under the Alcoa Agreements after the PBID terminates. In other words, the City will be left holding the bag after the PBID expires or is terminated. The proponents often assert that the Alcoa Agreements can be terminated at any time. But this statement obscures the full story. The proponents neglect to disclose that the Alcoa Agreements further provide that if the agreements are terminated, the City can implement an assessment District and charge the Alcoa Parties for the performance of the Alcoa work by the City. As is customary in these kinds of agreements where the City intends to enforce its rights, the Alcoa Agreements provide that the Alcoa Parties have waived their right to object to the formation of an assessment Districe. While the proponents emphasize their ability to terminate the Alcoa Agreements, they fail to disclose that they cannot walk away for their obligation to pay for this work. The full extent of the Alcoa obligations have been disclosed in the PBID. The Base Aleda Agreement refers to information which was submitted to the City's planning department and which further describes the Alcoa work yet the proponents have not provided these documents and assert that they have not reviewed these documents. Without a detailed description it is possible that the District will accidentally undertake Alcoa work and charge the entire District for the cost. . Allowing the PBID to be approved in its current form will allow all of the Alcoa Parties to escape from their obligation to pay for the installation, repair and maintenance of the fountains and landscaping within the Avenue of the Stars median. By allowing the proponents to terminate the Alcoa Agreements without replacing these private obligations with a comparable substitute we are concerned that such action may be considered a gift of public funds which would also be an improper use of a PBID. 2.

2 3 4

The Proponents Have Not Satisfied The Purposes Of The PBID Statute. The PBID law is to be used to provide a method to pay for "improvements and activities which confer special benefits upon the real property or businesses for which the improvements or activities are provided'" and the PBID can provide "security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality.'"

Base Alcoa Agreement, pages 3-4. Streets and Highway Code sec. 3660 I(emphasis added) Streets and Highway Code sec. 36612(e) (emphasis added)

493757.7 001378.0003 5/25/2008 - 10:00 PM

May 27, 2008 Page 11 The proponents have failed to apply the term "special benefit" in a uniform and fair manner. This will result in improper and inequitable assessments. For example, the Fox studio property fronts on a very substantial portion of the Ave. of the Stars. Yet the proponents summarily conclude that Fox should be charged a small allocation for Ave. of the Stars median maintenance because its special benefit is less than for the rest of the Ave. of the Stars owners. Following this analysis the owners of property along Century Park East (the "ePE Owners") should not be charged for services, capital expenditures and related administrative charges for work that does not provide them with a special benefit. For example, with regard to maintenance services, the CPE Owners are charged for landscaping along Century Park West. (Note that this information is not disclosed in the PBID materials submitted to the City or the property owners in the District in the petition but was learned after the proponents disclosed the worksheets used to develop the PBID budgets.) This Century Park West work is as much a benefit to properties outside of the District as it is to the CPE Owners so it is a general benefit which cannot be assessed to the CPE Owners under the PBID law. The Capital Improvements budget includes work related to the irrigation system in the Avenue of the Stars median. Not only is this an example of how the Alcoa Agreement obligations are being improperly shifted to the entire District but this work provides no "special benefit" to the Century City property owners who are not on the Ave. of the Stars because the Alcoa Parties are already obligated to pay for this expense. Proponents have asserted in their responses attached under Part 2 of this Letter that the reference to the irrigation system is intended as an example of capital improvement work that may be funded by an MTA grant. We would like the City to hold proponents to their word on this point. In the PBID, including the Engineer Report, the proponents assume that the work they have listed as capital improvements and general maintenance will provide a special benefit to the property owners in the District yet no evidence is given to support this bare conclusion. Without evidence of a "special benefit" the allocation of costs for generally described capital improvements and general maintenance to the Century Park East property owners under of the PBID is not proper. The City Council is required to make a finding that the businesses or property in the District will be benefited by the proposed improvements services. ' It does not appear that the PBID documents provide sufficient support for this finding with regard to the CPE Owners. In addition to a "special benefit" the District "supplemental" to the work performed by the City. 5

Streets and Highway Code Section 36625(a)(7).

493757.7 001378.0003 5/2512008 - 10:00 PM

is required

to do work that

IS

May 27, 2008 Page 12 With regard to Avenue of the Stars, under the Alcoa Agreements the City has delegated to the Alcoa Parties the obligation to "at all times cause such trees and structures to be maintained in good condition and repair, and the landscaping herein provided for shall at Least meet the minimum standards of said city for the Landscaping of a major streetr" . In other words, the work to be performed within the Avenue of the Stars median is the current municipal standard for services along Avenue of the Stars. The PBID is not "supplementing" this work. The PBID also includes the maintenance of landscaping along Santa Monica Blvd. We were informed by the proponents that the "deal" with the City was that the City would stop maintaining the Santa Monica Boulevard medians one year after completion. We do not believe the City would abandon its responsibilities so it is not clear that the District, in performing this work is supplementing the City's work. 3.

The Cost Allocations Do Not Satisfy California Constitutional Requirements Regarding the Fairness Of The Allocated Assessments. Article XIIiD of the California Constitution (Proposition 218) requires, among other things, that the City Council not impose an assessment on a parcel which exceeds the reasonable cost of the proportional benefit conferred on that parcel and that all assessments be supported by a detailed Engineer's Report prepared by a registered professional engineer certified by the State of California. We disagree with the City Clerk's conclusion that the constitutional requirements have been satisfied with respect to the incorporation of the Century Park East properties in many of the costs allocated under the PBID. The proponents Management District Plan and Engineer's Report summarily conclude that all properties in the District will equally benefit from the improvements and services described in their documents. They do not cite any independent evidence to support their conclusions. The flaws in their assumptions can be demonstrated with a few examples: (a) with regard to the proposed Enhanced Maintenance such as street cleaning, proponents use building and land square footage to allocate costs yet this metric has no bearing on the actual service area to be maintained. Actual street square footage is one measure which more closely approximates the cost of this service. The size of a building does not correlate to the size of its street.

6

Base Alcoa Agreement, page 3 (emphasis added).

493757.7 001378.0003 5/2512008- 10:00 PM

May 27,2008 Page 13 (b) if one accepts the proponent's assertion that the District will employ a street cleaning team that will wander around the District spot cleaning where needed, their activity would more likely be concentrated in areas of higher pedestrian activity. No study or evaluation of traffic patterns was performed by the proponents. However, it appears to be more likely than not that the higher traffic zones in the District will be along Ave. of the Stars. (c) security services are likewise being allocated by building and land square footage when pedestrian traffic is more likely to be a better indicator of usage. In this case, a building square footage method of allocation is flawed and does not reflect the constitutional mandate that the assessments to be charged must reflect a "reasonable cost of the proportional benefit conferred .." Looking at the way the assessment is allocated to parking structures we find additional defects in the PBID. A parking structure is subject to assessment when it serves an adjacent building and the parking structure and building are under common ownership. Yet if the same parking is under a building it is not subject to assessment. Moreover, a standalone parking structure is assessed at a higher rate. In other words, a very large building with underground parking is not assessed for its parking element but a small low rise building with adjacent parking structure or independent parking is assessed. While we concur with proponent's contention that parking structures in general receive less benefit from District Services, the proponents have not demonstrated the degree to which the services are reduced. The owners of properties along Century Park East and Century Park West will bear the burden of cost increases for the work which is supposed to be performed solely by the Alcoa Parties. Most people in the District and the proponents themselves acknowledge that the maintenance of the Avenue of the Stars median, including the fountain and landscaping, have not been adequate. In order to achieve an appropriate level of performance, the budget amount for A venue of the Stars must increase. Since the PBID locks in an assessment rate and allocation for each District member, in order to fund the increase, the District will either increase the assessment which is applied to all members of the District or cut services to the Standard Zone. If the Avenue of the Stars/Alcoa work estimate is flawed, this results in a flaw in the assessment for every owner in the District. Private owners are obligated to maintain a strip of land which runs along the length of the Century Park West border of the District. This strip is bordered by City property. The proponents would have the entire District pay for the cost to maintain this border area, including the strip. Yet the private parties that are obligated to maintain the strip are not being charged an additional amount for their relief from this obligation.

493757.7 001378.0003 5/25/2008 - 10:00 PM

May 27,2008 Page 14 The PBID is drafted in a way that allows the District to be used in a manner which does not comply with the Constitutional mandate that the costs must be reasonable and correlate to the benefits of the District. For example, the proponents could elect to install trash cans only at the entrance to each building on Ave. of the Stars and charge the Standard Zone owners for a share of this cost. Rather than monitor the activities of the District the CPE Owners have requested to be excluded from these kinds of costs. Moreover, the PBID has included an assumption that any work in the District (other than in the Ave. of the Stars median) will automatically benefit the entire District. This is an open invitation to abuse. The proponents also assert that the District has the power to enter into agreements to perform work on private property in the District. Combining these concepts and the District is at the mercy of the majority control of the proponents who could as described above assume the obligation of a single private owner to maintain part of the Century Park West landscaping and charge the Century Park East Owners and the rest of the District for this cost. With respect to costs allocated to Century Park East, the Engineer has not satisfied the constitutional standard for proceeding with the PBID. The Engineer and proponents have not provided proof that the assessments are fair and represent reasonable value for the property owners. Moreover, we have shown that there is ample room for abuse in the administration of the District resulting in the imposition of costs without demonstrable benefit. Protections against this abuse must be added to the PBID. 4.

The Budget And Resulting Assessments Have Been Developed In A Fundamentally Flawed Manner. Budget worksheets were not included in the PBID petition but were obtained by the CPE Owners from the proponents and are attached hereto as SCHEDULE 1. Upon questioning by the CPE Owners the Engineer and proponents conceded that the estimates set forth in the worksheets which were used to create the budgets in the PBID were based on verbal estimates obtained by the proponents and given to the Engineer to insert in the budget. No critical cross checking of this information was performed. Proponents would later say that they also reviewed other PBID budgets to estimate costs but we are not able to determine whether this information was.relevant to the PBID at issue but it is not demonstrated that the other precedents are sufficiently current or similar to the Century City PBID. Further, the way proponents have described the General Maintenance and Capital Improvements contemplated under the PBID there is no certainty that the work will be performed. The PBID states that the District will perform general maintenance and may perform capital improvement work each from a general shopping list of items. The work is not prioritized and no particular items are firmly committed. Given this uncertainty we are very concerned that the members of the District are being forced to sign on to a vague list of promises that will not be fulfilled; or even worse the actual work performed will not bear any resemblance to the items of work shown in the PBID.

493757.7 001378.0003 512512008- 10:00 PM

May 27,2008 Page 15 In this iteration of the PBID, the proponents have created a separate zone for Fox but continue to fail to accept that fact that Century Park East should also be a separate zone for the same reasons that Fox deserves its own zone. The PBID permits extensive amendment to the budget, improvements and services. As long as the budget total is not increased the line items can be changed. Without implementing structural protections for the property owners who are not part of the proponents' control group, we could agree to make changes in the PBID today but tomorrow the proponents could amend these changes out of existence. The budgets for the PBID are based on unconfirmed information and the work to be performed is so uncertain that property owners cannot be sure what work if any will be performed with their assessment payments. 5.

The Information Contained In the Petition For The PBID Is Not Accurate Rendering It Defective. We have reviewed the Assessment Roll attached to the petition for the PBID and compared it to information available from the Assessor's Office and found the following conflicts:

ZONE

LESS: Gara~e

Bld~ SF

APN·

Owner Name 1888 Cp Property 4319 001 006 LLC

Site' Address 1888 Century Park E

Standard

4319001009

Site One LLC Cc

Century Park E

Standard

4319001010

Site One LLC Cc Avenue Of The Stars Assocs LLC

2010 Century Park E

Standard

0

2055 Avenue

Premium

0

4319004038

Of The Stars

4319 004 138 Ap Properties

Ltd

'no Site Address'

4319 004 141 Ap Properties Entertainment 4319016031 Center LLC Entertainment 4319016032 Center LLC

Ltd

10250 Constellation

Blvd

2040 Avenue

Of The Stars

2020 Avenue

OfThe

824,156

(295.020)

Assessable Lot SF Only

NETBld~

529,136 3,337

10,500 sq.f1. bldg not shown

30,05

30,057

60,000 sq. II bldg not shown

165,528

165,528

373,697 sq. ft shown

94,539

94,539

PBID assessment vacant land

Standard

945,387

Standard

44,275

44,275

44,275

Premium

361,248

361,248

361,248 361,248

Premium

361,248

361,248

Plant LLC Cc

2052 Century Park E

Standard

43,472

43,472

4319003063

Cc Building LP Century City Mall LLC

1930 Century Park W

Standard

72,256

10250 Santa Monica Blvd

Standard

1,416,416

4319003064

garage is 200 sq. II. less

3,33

4319001013

Stars

Notes

Pootaqe

529,136

0

(850,848)

Assessable

256

72,

1,416,416

1

639,184 sq. ft shown 2040 & 2020 replaced by 2000and tot sq. ft higher

16,000 sq. II bldg shown

II

72,256 1,416,416

48,417 sq ft shown 522,659 sq ft shown

We request the input of the City Clerk on this issue as the proponents' engineer explained that the property information contained in the assessment roll attached to the petition may not have been accurate but the calculations of the proposed assessments were based on the official assessment roll information. In our view if the petition information is not accurate then the calculated assessments may also be in error. 6.

The Proponents Are Not Ready To Proceed, We have been told by the proponents that they would not proceed unless they had obtained the necessary approvals of the Alcoa

493757.7 001378.0003 5125/2008 - 10:00 PM

roll says

May 27,2008 Page 16 Parties to terminate the Alcoa Agreements. Moreover, the PBID provides that this consent is a condition to the effectiveness of the PBID . Yet when asked if they had all of the necessary consents they responded that they would not proceed until the PBID was approved. If the PB ID is approved by the City it will result in the imposition of the assessments set forth in the PBID. But if the proponents do not have the required approvals from the Alcoa Parties to terminate the Alcoa Agreements the PBID will remain in a state of limbo for an uncertain period of time. Therefore proponent's request for City Council approval of the PBID is premature unless and until the proponents have proven that they have definitive agreements for the resolution of the Alcoa obligations with the Alcoa parties in a form acceptable to the City.

493757.7 001378.0003 5/2512008 - 10:00 PM

May 27, 2008 Page 17 PART 2 - PROPOSED CHANGES TO PBID We have proposed a number of corrective changes to the PBID and proponents have accepted some of these changes. By mutual agreement the size of the overall budget was reduced from the amount set forth in the initial petition. This was done in recognition that the scope of services was too broad. Our most recently proposed changes and the responses from the proponents are attached hereto as PART 2 - EXHIBIT A (which includes our recent mark-up of the PBID), EXHIBIT B (which contains proponents' acceptance of some of the changes and rejection of the rest), EXHIBIT C (which contains our follow up comments). However the following changes should be implemented.

In order to better:

(i) assure that provisions of the PBID meet Constitutional and other statutory requirements for fairness and reasonableness - in this regard one significant change requires a recognition that the Century Park East property owners ("CPE Owners") do not receive the "special benefit" of a number of services including security, street cleaning, administrative, and landscaping (except along Santa Monica Boulevard, assuming this is not City work). We have demonstrated on attached SCHEDULE 2 that the CPE Owners can be excluded from these costs and the individual assessment for each member of the District will not be increased from the initial assessment set forth in the petition and therefore the City is within its authority to' make this change in the PBID and related budgets. (ii) protect the City and property owners in the proposed District from being assigned the cost of maintenance and restoration obligations which are already private obligations of specific third parties, (iii) prevent the proponents from exercising their majority control from eliminating, amending or modifying the PBID in the future. The requested changes are: I. Specific Resolutions to be adopted by the City Council II. An Addendum to the PBID II Specific word Changes to the PBID

493757.7 001378.0003 5/25/2008 - 10:00 PM

May 27,2008 Page 18

r.

To be added to City Council Resolution of Formation and Enabling Ordinance. We propose including the following resolutions to the resolution of formation and enabling ordinance for the PBID (or provisions with substantially the same meaning). These resolutions will incorporate the needed changed into the PBID and prevent the proponents form amending these changes out of existence in the future: RESOLVED, that the addendum to the Management District Plan set forth on EXHIBIT A attached hereto shall be incorporated into such Plan and become a part of the PBID (the "Addendum") RESOLVED, that notwithstanding the provisions of Streets and Highway Code Sections 36635 and 36636 (and any similar sections or applicable statutes as well as any successor or replacement statutes), the terms and provisions of the Addendum shall not be subject to amendment or modification without the prior written approval of 80% (by relative assessment) of the owners in the Premium Zone, the Standard Zone, Fox and the property owners which front on Century Park East. RESOLVED, that the wording changes to the Management District Plan attached hereto as EXHIBIT B attached hereto are deemed incorporated into the Management District Plan and, as revised, the Management District Plan is approved by the Council. The Owners Association for the PBID is directed to revise the Management District Plan accordingly. II. Addendum to the PBID which will be adopted by the City Council in its Authorizing Resolution. We propose the following addendum to the PBID which would also be attached the City Council's resolutions authorizing the PBID: EXHIBIT A TO CITY COUNCIL RESOLUTIONS - ADDENDUM TO MANAGEMENT DISTRICT PLAN

The following provisions are hereby incorporated into the Century City Business Improvement District, Management District Plan, dated March, 2008, and made a part. The provisions of this Addendum shall prevail if there are any inconsistencies or conflicts between the terms or provisions of this Addendum and those of the Management District Plan or any other document regarding the PBID. Notwithstanding the provisions of Streets and Highway Code Sections 36635 and 36636 (and any similar sections or applicable statutes as well as any successor or replacement statutes), the terms and provisions of this Addendum shall not be subject to amendment or modification without the prior written approval of 80% (by relative assessment) of the owners in the Premium Zone, the Standard Zone, Fox and the property owners which front on Century Park East.

493757.7 001378.0003 512512008 - 10:00 PM

May 27, 2008. Page 19

SECTION 9: AMENDMENTS, CLARIFICATIONS

AND ADJUSTMENTS

Amendments. In order to better assure certainty and continuity in the application of the PBID to the owners of property in the District, notwithstanding anything to the contrary contained in the PBID, this Management District Plan,or otherwise, certain provisions of the PBID described below shall not be subject to amendment or modification (unless expressly provided below): 1. The following budget/sub-budgets constitute all of the categories/items of improvements and services to be rendered under the PBID and no additional budgets shall be permitted. Copies of the revised PBID Budget Summary for 2008, Operating Budget for 2008, Budget Detail Sheets for the budget and sub-budgets for 2008 are attached as SCEHDULE - I. No funding shall be transferred from one budget or sub-budget to another. No increases of any of the following budgets or sub-budgets shall be permitted without the approval of 80% (by relative assessment) of the owners in the Premium Zone, the Standard Zone, Fox and the property owners which front on Century Park East ("CPE Owners"). Capital Improvements Enhanced Maintenance General Maintenance Landscaping and Utilities Insurance Security Management and Advocacy Avenue of the Stars Maintenance 2. All improvements, maintenance, repairs or services performed or installed within the median within the Avenue of the Stars, (including the improvements, maintenance, repairs or services to be performed under the ALCOA Agreements, shall be performed solely within the budget for Avenue of the Stars Maintenance. No such work shall be paid with funds from any other budget or sub-budget (except an appropriate allocation of the Management. and Advisory Budget shall be made to the Premium Zone on account of the Avenue of the Stars Maintenance). If the fountains in the Avenue of the Stars medians are replaced, the cost thereof shall be borne solely by the Premium Zone and no change shall be made to the assessment for the Standard Zone property owners on account thereof. 3. The assessment charged to the Standard Zone property owners shall not be increased on account of any deficit, actual or projected, in the budget for Avenue of the Stars Maintenance. If permitted under applicable law, a special assessment may be charged to the Premium Zone property owners to cover any such deficit, and a reduction in the assessment for the Standard

493757.7 001378.0003 512512008-10:00 PM

May 27,2008 Page 20 Zone property owners shall be made if reserves for the services or improvements to be made to the Standard Zone should exceed 5% of the budget therefor. 4. The PBID shall not enter into any agreement to directly provide services or improvements to privately owned property without the approval of 80% (by relative assessment) of the owners in the Premium Zone, the Standard Zone, Fox and the CPE Owners. This includes without limitation, any private agreement to maintain or repair the pedestrian bridge which crosses Avenue of the Stars. Clarifications. 1. It has been determined that the CPE Owners will not receive any special benefit from the provision of the following services/expenses under the PBID: Capital Improvements - Trash Receptacles Enhanced Maintenance General Maintenance - all Landscaping and Utilities - all except for Santa Monica Blvd maintenance Buffer Zone, Electricity and Water Security - all Management and Advocacy - all Correspondingly, the assessment amount and allocation for the CPE Owners have been reduced and are reflected on SCHEDULE II. However, the finding that the management services/expenses are not a special benefit to the CPE Owners is not intended to exclude the CPE Owners from full participation in the Owners Association, including but not limited to board of directors membership and receipt of all information related to the PBID, District or the Owner's Association. 2.

As a condition to the effectiveness of the PBID,

(i) Binding contractual agreements that run with the land shall be obtained from the property owners that are subject to the ALCOA Agreements ("ALCOA Parties") which shall provide that: (a) if and when the PBID is terminated each of the ALCOA Parties agree to thereafter pay to the City of Los Angeles their allocable share of any amounts incurred by the City to perform any of the ALCOA Work (a memorandum of this obligation may be recorded in the real property records by any owner of property in the District) and (b) each of the ALCOA Parties agree that they will not protest the establishment of an assessment District covering the properties that border on Avenue of the Stars for the payment of costs to perform the ALCOA Work. (ii) Currently, ALCOA Property Owners who are not part of the District are paying their share of the cost of the ALCOA Work under separate agreements. Appropriate contractual

493757.7 001378.0003 5/25/2008 - 10:00 PM

May 27,2008 Page 21 arrangements shall be made for the continuation Agreements are terminated.

of these payments

after the ALCOA

(iii) If the contractual agreements described on clause (i) and (ii) above are not received by the City and reasonably approved by the City Attorney within 30 days after the resolution of formation for the PBID is adopted by the City Council, the PBID shall be deemed null and void and of no force of effect.

493757.7 001378.0003 5/25/2008

- 10:00 PM

May 27,2008 Page 22

EXHIBIT B TO CITY COUNCIL RESOLUTIONS - SPECIFIC WORDING CHANGES TO MANAGEMENT DISTRICT PLAN

[attached]

493757.7 001378.0003 5/2512008 - 10:00 PM

FINAL Century City Business Improvement District Management District Plan

Los Angeles, California

May 2008

Prepared by: Kristin Lowell Inc.

Prepared pursuant to the state of California Property and Business Improvement District Law of 1994 And Article XIIID of the California Constitution to create a property-based business improvement district in Century City

Century City Business Improvement District Management District Plan

Table of Contents Page Number

Section Number Management

2.

PBID Boundary

3.

PBID Improvement

4.

Existing Maintenance

5.

PBID Operating

6.

Public Sector Participation

11

7.

Assessment Methodology

12

8.

PBID Governance

18

~"

10 ". 11

1

1.

District Plan Summary

3

5

and Activity Plan

8

Agreement

9

Budget

==r=====~~.

""=-==-=-'='-~,-

JP.

Implementation

19

Timeline

20

Assessment Roll 9. Amendments,

Clarifications

ATTACHMENTS: Engineers Report - Attachment A PBID Boundary Map - Attachment B

and Adjustments

century City Business Improvement District Final Management District Plan

May 5,2008 Page 6 ot 2/

In addition to the capital improvements listed above, the City of Los Angeles, through PBID funds may leverage matching funds with the Metropolitan Transit Authority and/or other organizations for various pedestrian-related corridor improvements within the PBID boundary. Some examples of qualifying projects may include, but shall not be. limited to, the following: Fixture replacement for street lighting on Avenue of the Stars (between Santa Monica Boulevard and Constellation Boulevard), Century Park East (between Santa Monica Boulevard and Constellation Boulevard. TreeiilStallation in the Avenue of the stars median between Santa Monica Boulevard and Constellation Boulevard. Gateway signage on Santa Monica Boulevard at Century Park. West and Century Park East. Diagonal pedestrian crossing at the intersection of Avenue of the Stars and Constellation Boulevard. Median

.

Fountams

pw)-

ir)

/J-oS'

!.4;LjJtY-

Pre 1'1'\ IiAi'Yl "2OV\.Q

The er . ners als indicated they would like to refurbls J replace the fountains on Avenue of the Starswi in the PBIDboundary, but the cost to re ·ce them is prohibitively expensive for the G ~fy property owners to fund alone. The : .' owners wish to work with the City to determine an equitable solution to fund the iconic fountains in Centu City. In the interim, the PBIDwill provide basic maintenance services until a longterm solution can be found. The Premium Zone receives the special benefit from the fountains and the maintenance thereof and will be assessed for said maintenance. The fountains were installed more than four decades ago as an integral part of the design of the "City of the Future." They help to define Century City as a sophisticated and unique destination for both businesses and investors. The fountains are important and internationally recognized iconic symbols that have been as much a part of Century City as the elegant office buildings and unique hotels that have been built around them. They anchor the landscaped medians and provide an aesthetic element of progressive urban attention that defines the center of Century City's grand boulevard. The' fountains are a key part of Century City's history, identity, and property values, now and in the future. All capital improvements will be provided to both the premium and standard zones. The Fox Studios Zone does not receive any of the capital improvements, and therefore does not receive any special benefit or assessment.

ENHANCED MAINTENANCE The second priority for the Century City property owners is enhanced maintenance. PBID maintenance teams will provide enhanced cleaning services, including ~ sweeping uniformly throughout the district. The proposed maintenance service frequencies are proposed for 6 days per week for both the Premium tone and the Standard Zone. Note that if the cost to provide' these services drastically increases, then the frequency will change to adjust to the new budget.

*'

~,t1t,td~

Century City Business Improvement District Final Management District Plan

May 5,2008 Page 7 of 21

y* In addition to the street4drl1J31~ maintenance, landscape maintenance services for all the medians and landscaped corridors including the Santa Monica Boulevard median will be provided. These landscape maintenance services may include tree maintenance, median landscoping, seasonal flowers. All parcels within the Premium Zone and the Standard Zone receive special benefit from the enhanced maintenance services from a cleaner environment. Therefore both of these benefit zones will be assessed for the maintenance services. Fox Studios will benefit from the londscope median maintenance for that portion of Avenue of the stars that is Odjacent to their property and will only be assessed for their fair share of the special benefit derived therefrom.

PEDESTRIAN SECURITY AND SAFETY The third priority for the property owners is to provide a safer environment for businesses, employees and pedestrians within the PBID boundary for the. purpose of improving the 'Se"CDmytrlttle ~Ommercjal cor· he neWly .createq AmBassador utce s program suppo s. en orceir)'en dgencies and property owners in overall crime prevention efforts wbile offerihg a customer service orientation. The program assistsin the prevention of break-ins, graffiti tags and disruptive street behavior. The Guldes' are also trained to direct pedestrians to civic, shopping and business destinations, and are informed on promotiOns and events to encourage pedestrian traffic. The proposed nightly bike patrol will provide surveillance app.i'ox rna e y 16 hours per day, six days a week. Anticipated costs include a fee to contract with an outside service to supply Guides, uniforms for the Guides, the bicycles used by the Guides to patrol the area, walkie-talkies and related communication equipment; video surveillance equipment; and incidental expenses. Both the Premiu Zo~ and ythe Standard Zone receive speclal benefit from these services by enjoying a safer environment for all pedestrians, tenants and employe~ 1'~ The security services are not provided to Fox Studio:f, and therefore, F<3)(St\"fai0rcro~\ . not receive any special benefit from these services. \. ~ C~v.,'\J f r.!'-

po.;vk ~Y-J-t

*ADMINISTRATION

c~

ru~lv'h'

Ll3.

*'

Costs associated :~dministrative services include com emotion for a part-time Executive Director/ah' Operations Manager." an a ministrative assistdn or the dayto-day operations of the PBID. The budqeffor this also includes funds for office expenses such as; utilities, stationary, postage, copies, faxes, vehicle mileage reimbursement, annual CPA review of financial statement, and other incidental items. Additionally, the administrative budg~t includes funds for insurance premiums (both general liability coverage and director and officer liability coverage). All benefit zones receive special benefit from administrative services; in that all properties benefit from an efficient, well-managed PBIDso that the P'BIDis managed and operated efficiently and effectively.

Century City Busiriess Improvement District Final Management District Plan

May 5,2008 Page 9 of 21

Section 5: PBID Operating Budget 2008 Operating Budget The following table outlines the PBID maximum assessment operating budget for January 1, 2008 through December 3L 2008. However, since the PBID will only deliver services beginning September 1, 2008, it is anticipated that the budget for 2008 will be one-half of the total, or $422,146. Premium Zone Budqet

Total Bud!')et

Service Capital Improvements Enhanced Maintenance Ave of the Stars Maintenance Public Safety Subtotal Activities

Standard Zone Budqet

Fox Zone Budqet

$107,000 $178,800 $317,593 $56,400 $659,793

$42,800 $71,520 $304,889 $22,560 $441,769

$64,200 $107,280 $0 $33,840 $205,320

$0 $0 $12,704 $0 $12,704

Management and Advocacy Reserve Fund Subtotal Management & Reserve

$152,000 $32,500

$101,773 $21,761

$47,301 $10,114

$2,927 $626

$184,500

$123,533

$57,414

$3,552

TOTAL BUDGET

$844,293

$565.,302

$262,734

$16,256

will commence September L 2008, the City Clerk, rather than the LA County Assessor, will bill the 2008 assessments. (2) Unpaid 2008 assessments billed by the City Clerk will be added to the 2008-2009 property tax assessment. (3) Accrued interest and delayed payment will be expended in the abovebudgeted categories. A change greater than 10% will require City Council approval. (4) Funds earmarked for non-Avenue of the Stars maintenance and/or improvements shall not be used for Avenue of the Stars maintenance and/or -r: J. improvements. ,J--VlS v.-i -rr; 5-Year Operating Budget The following table illustrates the PBID's operating budget for the 5-year life term based upon the following assumptions: (1) Since the services

~ 9



I Description

The PBID budget keep pace with below shows an The budget for increase.

and assessments may increase by as much as 5% per year to the consumer price index and other program costs. The table annual budget increase of 5%. 2009 assumes a full year's budget, \$844,293), plus the 5%

2008

2009

2010

2011

2012

V

century City Business Improvement District Final Management District Plan

May 5,2008 Page 14 of 21

Management District Plan and Engineer's Report, provided the assessment formula does not change. If the assessment formula changes, then a Proposition 218 ballot will be required for approval of the formula changes. MTA Layover Zone: The Metropolitan Transit Authority (MTA) owns and operates a public transit layover area within the PBID boundaries at the comer of Constellation Avenue and Century Park West (APN 4319-004-142). This is a public transit layover zone for MTA buses. This area is for MTA vehicles only and it is not intended for public to access. The area is not commercial in nature and is not intended for pedestrians and is deemed not to benefit from the PBID services. Residential Parcels: All residential properties developed and not zoned solely residential in the future will receive the same level of service and benefit as all other properties in the District. Therefore they will be assessed the same rate as all other developed parcels in the PBID based on it based on the benefit zone. Assessments are levied on newly developed parcels at the time of Certificate of Occupancy. The owners of such parcels ~agr~ to the future assessment at the time of the PBID formation. cULQ. S 4.

~J~ *-

Vacant Parcels: Vacant undeveloped parcels receive the same benefit from the proposed improvements as do developed parcels, however the benefit of services is delivered to the lot. Therefore, so long as a parcel is vacant and undeveloped it will be assessed based on its lot square footage taking into account the benefit zone. However, if the vacant parcel is developed during the course of the PBID, it will be assessed the same rate as all other developed parcels in the PBID based on the benefit zone. Assessments are levied on newly developed parcels at the time of Certificate of Occupancy. The vacant parcels at the time of this report are: 4319-001-01 4319-001-02 4319-002-53 4319-002-54 4319-002-55 4319-002-59 4319-004-38 4319-004-139 Owner: formation.

of such parcels ~

to the future assessment at the time of the PBID M.t S' t.l

bJ tJ- -¥

Century City Business Improvement District Final Management District Plan

May 5,2008 Page 18 of 21

Section 8: PBIDGovernance Consistent with business improvement district legislation throughout the nation, California's "Property and BusinessImprovement District Law of 1994", and subsequent amendments establishes a' governance framework that allows property owners who pay assessments to determine how those assessments are used. The following components are required within a PBIDgoverning structure.

City Council Following the submlsslon of petitions from property owners representing. more then 50% of the assessments to be paid, the City Council, upon holding a public hearing on the proposed District, may elect to form a PBID. The PBID is established by a City Council ordinance, which may include the levy of on assessment on property, if the assessment is approved in a balloting process.

PBID Governance To encourage cost effective operations, rnoxlmlze stakeholders' accountability and encourage a unified management structure, it is recommended, but not required, that the City of Los Angeles contract with a non-profit organization to provide the day-today operations of the PBID. This organization will hold an election of assessed property owners to act as the governing board, the Owners Association. The Owner's Associotlon should be made up of 9-11 property owners that will implement the services and activities as outlined in the Management District Plan. The Owners' Assoclotlon will annually review the PBIDbudgets and policies within the limitations of the Management District Plan and the City's administration contract, and file annual reports with the City Council. The Owners Association may also elect Ex-Officio non-voting members to be part of the association. Such EX-Officio members may include; the Chamber of Commerce, residential homeowners associations, city representative or business owners. Each year the Owners Association will determine how many, if any, Ex-officio members there will be.

Century City Business Improvement District Final Management District Plan

May 5,2008 Page 19 of 21

10 Section?: Implementation Timeline The Century City PBID will have a five year life from January 1, 2008 to December 31, 2012. However, activities are not planned to start until September 1, 2008 and a reduced assessment will be applied in the first year due to the late start in services. In order for the PBID to meet the mid-year start-up formation needs to adhere to the following schedule:

date

of September

1, 2008, the

- Initiate petition phase - Gather petitions - Council adopts Ordinance of Intention - Ballots are mailed (pursuant to Prop 218) - Ballot tally and final Public Hearing July 2008 - Council adopts Ordinance of Establishment - City mails out handbills to collect July 2008 assessments - Initiate Administrative Contract with Association - Owners Association starts implementation plan Summer 2008 - Begin BID operations September 1, 2008 February 2008 February 2008 May 2008

property Owners

Century City Business Improvement District Final Management District Plan

u

Section

Jtf:

May 5,2008 Page 20 of 2/

Assessment Roll

The following table shows the assessment roll for a full year of services from January " 2008 through December 31, 2008. However, because the services are not expected to be delivered until September 1, 2008 the following table shows the assessments levied for the one-half year, from September " 2008 through December 31, 2008. Assessable APN 4319002057 4319003061 4319002060 4319001006 4319001 007 4319003065 4315019005 4319004138 4319004 140 4319004141 4319001 008 4319004038 4319001 903 4319001 904 4319003063 4319002053 4319002054 4319002055 4319002059 4319003064 4319001014 4315019012 4319001 005 4319004109 4319004139 4319002045 4319003055 4319002046 4319002056 4319016031 4319016032 4319016029 4319016030 4319001 803 4319001013 4319001 009 4319001 010 4315019006 4319001 001 4319001 002

TOTAL:

Owner Name 10100 Santa Monica. Inc. 1801 Avenue OfThe Stars Limited 18751925 Century Park East Co 1888 Cp Property Lie 1940 Century City Lie 1999 Stars Lie 2121 Avenue OfThe Stars Lie Ap Properties Ltd Ap Properties Ltd Ap Properties Ltd Automobile Club Of So Calif Avenue Of The Stars Assocs Lie Ca Public Employees Retirement System Ca Public Employees Retirement System Ce Building Lp Ce Site Two Lie Cc Site Two Lie Ce Site Two Lie Ce Site Two Lie Century City Mall Lie Century City Med Pz Lnd Co Tr Century Fox Film Corp Twentieth Century Park Century Star Lie Sunstone Century Woods Condominium Douglas Emmett 1997 Lie Douglas Emmett 2000 Lie Duesenberg Investment Co Duesenberg Investment Company Entertainment Center Lie Entertainment Center Llc One Hundred Towers Lie One Hundred Towers lIc Pacific Bell Plant Llc Ce Site One Lie Cc Site One Lie Ce Sumitomo Realty and Development CA Suneal Century City LLC Suneal centurv Citv LLC

Site Address 10100 Santa Monica Blvd 1801 Avenue OfThe Stars 1875 Century Park E 1888 Century Park E 1940 Century Park E 1999 Avenue OfThe Stars 2121 Avenue OfThe Stars "no Site Address" 10250 Constellation Blvd 10250 Constellation Blvd 1950 Century Park E 2055 Avenue Of The Stars 1800 Century Park E 1840 Century Park E 1930 Century Park W "no Site Address" 10131 Constellation Blvd 1950 Avenue OfThe Stars "no Site Address* 10250 Santa Monica Blvd 2070 Century Park E 10201 W Pieo Blvd #111 1880 Century Park E #500 2025 Avenue Of The Stars "no Site Address" 1801 Century Park E 1901 Avenue OfThe Stars 1800 Avenue OfThe Stars 1900 Avenue Of The Stars 2040 Avenue OfThe Stars 2020 Avenue Of The Stars 2029 Century Park E 2049 Century Park E #260 -no Site Address" 2052 Century Park E Century Park E 2010 Century Park E 2151 Avenue OfThe Stars 10000 Santa Monica Blvd 10000 Santa Monica Blvd

ZONE Standard Premium Standard Standard Standard Premium Premium Standard Standard Standard Standard Premium Standard Standard Standard Premium Premium Premium Premium Standard Standard Fox Standard Premium Standard Standard Premium Premium Premium Premium Premium Standard Standard Standard Standard Standard Standard Premium Standard Standard

655,174 302,550 880,240 529,136 50,889 840,124 795,039 94,539 808,626 44,275 24,773 165,528 239,600 304,640 72,256 110,642 33,106 42,689 55,510 1,416,416 221,878 1,435,943 343,712 803,989 70,597 378,063 487,810 302,550 625,631 361,248 361,248 1,226,598 1,226,598 65.392 43,472 3,337 30,057 337,336 94,525 11,200

PARCEL ASSMT $19,481.31 $30,405.73 $26,173.54 $15,733.62 $1,513.16 $84,430.95 $79,899.99 $2,811.07 $24,044.13 $1,316.50 $736.61 $16,635.27 $7,124.40 $9,058.33 $2,148.50 $11.119.32 $3,327.09 $4,290.17 $5,578.65 $42,116.50 $6,597.44 $16,256.09 $10,220.12 $80,799.44 $2,099.17 $11,241.53 $49,024.03 $30,405.73 $62,874.79 $36,304.77 $36,304.77 $36,472.34 $36,472.34 $1,944.40 $1,292.62 $99.22 $893.73 $33,901.66 $2,810.66 $333.03

15,896,93 6

$844 293

Footaue

INSERTS TO CENTURY CITY MDP Page 5 Insert: No improvements or services under this PBID shall be performed on private property. No such work shall replace or substitute the work which any private property owner or tenant is required to perform in the District unless such work is fully disclosed to the property owners in the District and the private party obligated to perform such work is directly charged for any and all costs incurred by the District to perform such work, including but not limited to, a reasonable allocation of administrative costs incurred by the District relating to such work. Page 6 Insert: The replacement, repair and maintenance of the fountains within the Avenue of the Stars median is part of the work described in Section 3 relating to the ALCOA agreements. The Premium Zone receives a special benefit from the fountains and their replacement, repair and maintenance. The Premium Zone and no other Zone shall be assessed for such work. Page 9 Insert: (5) No surplus or savings in any budget line item shall be used to fund any other budget line item. The budget shall not be modified, replaced or amended. Budget worksheets under the following categories; Avenue of the Stars Maintenance, General Maintenance, Landscaping and Utilities, Insurance, Security, Capital Improvements, and Management & Advocacy have been prepared by the Engineer; no surplus or savings from any of these budgets/sub-budgets shall be used to fund any other budget/sub-budget and they shall not be modified, replaced or amended. (6) The budget and assessment roll include a reduction of approximately _% in the amount allocable to the property owners which border on Century Park East because they do not require and do not obtain a special benefit for work to be performed under the budget/sub-budgets for Landscaping and Utilities (other than along Santa Monica Boulevard), Security and related Management & Advocacy. The budget shall not be modified, replaced or amended without the consent of the City Council of Los Angeles, 85% of the Premium Zone (by relative assessment), Fox, 85% of the owners of property along Century Park East (by relative assessment)" and of the Standard Zone (by relative assessment).

Page 18 Insert:

It.eJ fa ~~bJ tc.n'lh

~

SECTION 9: AMENDMENTS, CLARIFICATIONS

AND ADJUSTMENTS /

C

L~lfVl

- J to

Amendments.

In order to better assure certainty and continuity in the application of the PBID to the owners of . property in the district, notwithstanding anything to the contrary contained in the PBID, this

1 494547.1 001378.0003

ry

May 27,2008 Page 23

SCHEDULE-I [Attach proponents' revised budget and Worksheets]

493757.7 001378.0003 5125/2008 - 10:00 PM

Century City Business Improvement District Budget Summary Initial Year 2008 2008 Budget

Subtotals

Revenue Premium Zone Standard Zone Fox Zone Total Revenue

565,302 262,734 16,256

565,302 262,734 16,256

844,293

844,293

EXl2ense Ave of the Stars Maintenance Electricity Water (LADWP charges) Irrigation Maintenance Fountain Maintenance (cleaning, water treatment) Landscape Maintenance Irrigation Repairs Fountain Repairs General Maintenance Service Sweeper Supervisor Equipment Landscaping and Utilities Santa Monica Boulevard Landscaped Maintenance Electricity Water Insurance General Liability Worker's Comp Security Night Patrol Supplies Capital Improvements Seed Money Reimbursement SignagelWayfinding Management and Advocacy Executive Director Operations Manager Office Expenses Reserve

Total Expense

317,593 106,050 27,300 11,440 14,805 67,998 25,000 65,000 67,800 19,200 33,600 15,000 82,200 27,600 21,600 12,000 21,000 28,800 18,600 10,200 56,400 42,000 14,400 107,000 95,000 12,000 152,000 36,000 96,000 20,000 32,500

32,500

844,293

844,293

C:\Documents and Settings\eng\Local Settings\Temporary Internet Files\OLK2\Budget 5-5-2008 (3).xls

Century City BID 2008 Operating Budget

Ave of the Stars Maintenance

317,593

96%

304,889

0%

4%

12,704

General Maintenance

67,800

40%

27,120

60%

40,680

0%

0

landscaping

82,200

40%

32,880

60%

49,320

0%,

0

Insurance

28,800

40%

11,520

60%

17,280

0%

0

56,400

40%

22,560

60%

33,840

0%

0

107,000

40%

42,800

60 /1)

64,200

0%

Security Capitallmprovemenls Subtofal

659,793

Activities

Management and Advocacy Reserve Fund Subtotal Management & Reserve

11

441,769

205,320

67%

101,n3

31%

47,301

2%

32,500

67%

21,761

31%

10,114

2%

123,533

57,414

~\~l~t~~~~i:k:4Hf.~yt~§1t§i~p~~~

Premium Zone

5,625,000 8,835,993

61% 100%

Premium Zone

$0.100498

77%

Standard Zone

$0.029735

23%

$0.130233

100%

Line Hem Includes the residential vacant land reimbursement

for undeveloped

parcels within the boundaries

$565,302.36 $262.734.30 $828,036.66

or the

cenutury

844,293

City PBID (pre- TCO).

These amounts will be adjusted upwards and will be billed per each residential unit sold as the units reach Temporary Certilicate of Occupancy and are sold 10 the public.

C:\Documenls and Sel1ings\eng\local Sel1ings\Temporary Internet Files\OlK2\Budget 5-5-2008 (3).xls

2,927 626 3,552

~~~t ~!tf~~~:j;~~~§git~~:t:t ifit~J~_f~~fFjy~j~y~'~u~}

39%

14,460,993

0 12,704

152,000 184,500

Standard Zone

0

Service Capital Improvements Enhanced Maintenance Ave of the Stars Maintenance Public Safety Subtotal Activities

Premium Standard Total Budget Zone Budg~t Zone Budget

'j

Management and Advocacy Reserve Fund Subtotal Management & Reserv

TOtAL'SU(J'G'ET .. .... _."_ Assessable Sq.Ft.: Assmt Rates:

..

.,

...

,.

~.... .. - ... _

>-'-_

..

Fox Zone Budget

$107,000 $178,800 $317,593 $56,400

$42,800 $71,520 $304,889 $22,560

$64,200 $107,280 $0 $33,840

$0 $0 $12,704 $0

$659,793

$441,769

$205,320

$12,704

$152,000 $32,500

$101,773 $21,761

$47,301 $10,114

$2,927 $626

$184,500

$123,533

$57,414

$3,552

$2~2"'7'34

$H~256 ., ' -!. ,"',

$84:4,2'93 .. ' ..,.. -" , $422,146 ,

, $56?,3'O~:.: 5,625,000 $0.100498

8,835,993 $0.029735

$0.010050 $0.050249

$0.002973 $0.014867

1,435,943 $0.011321

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D:esctiption Capital Improvements Enhanced Maintenance Ave of the Stars Maintenance Public Safety Subtotal Activities Management and Advocacy Reserve Fund Subtotal Management & Reserve

ror AL I3~R~I::T..

~l:):g~,: .....

.~~9~

20fO

2()11

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$53,500 $89,400 $158,796 $28,200 $329,896

$112,350 $187,740 $333,472 $59,220 $692,782

$117,968 $197,127 $350,146 $62,181 $727,422

$123,866 $206,983 $367,653 $65,290 $763,793

$130,059 $217,333 $386,036 $68,555 $801,982

$76,000 $16,250 $92,250

$159,600 $34,125 $193,725

$167,580 $35,831 $203,411

$175,959 $37,623 $213,582

$184,757 $39,504 $224,261

. $977,3""(4

~1,O2(?,24~

$42-2,14~

'.

...~8131?,507

~930;8~3

May 27,2008 Page 24

SCHEDULE - II [Attach CPE Owner Revised Worksheet]

493757.7

001378.0003

5125/2008

- 10;00 PM

DRAFT FOR DISCUSSION REVISION

PROPONENrS

PURPOSES

ONLY

3

PBlo TOTAL BUDGET

CENTURY PARK EAST PROPERTIES Total

Standard

Assessable

Owner Name

APN 4319001001 4319001002 4319002060 4319002057 4319001006 4319001007 4319004 136 4319004140 4319004141 4319004142 4319001008 4319001903 4319001904 4319003063 4319003064 4319001014 4319001005 4319004139 4319002045 4319016029 4319016030 4319001803 4319001013 4319001009 4319001010 Subtotal

Site

Address

Suncal CentUlY City LLC

10000

Santa

Monica

Blvd

sonear

10000

Santa Monica

Blvd

1875

Century

City LLC

Century

1925

Santa

10100

1875 Century Park E 10100 Santa Monica Blvd 1888 Century Park E

Parle East Co

Monlca,lnc.

1666 Cp Property Uc 1940 C.ntury City Uc Ap Prcpenlea Ltd Ap Properties Lid Ap Properties Ltd Ap Properties Ltd Automobile Club Of So

1940 Century

'ne Site

Park E

Address·

10250

ConslellaUon

Blvd

10250

ConstellaUon

Blvd

Ca Public Emoloyees

Retlrement

System

Blvd 1950 Century Pari< E 1800 Century Pari< E

Ca Public Employees

Rellrement

System

1840 Century

Park E

1930 Cenlury

Pari; W

ConstellaUon Calif

Lp Century City Mati Lie Cenlury City Med pz lnd Cenlury Park Cc Building

Century

Woods

Douglas

Emme"

1997

Co

Uc

One Hundred

Towers

LIe

Blvd

Santa Monica

Park E 1880 Century Pari< E #500

Tr

2070 Century

·no Site Address·

ue

Towers

Paclllc

10250

CondominIum

One Hundred

1801 Century Pari< E ~2029 Century Pari< E E#260

Bell

2052 Cenlury Park E CenluryPark E 2010 Century Park E

Plant L1eCc SlleOne

L1c Cc

Slle One

LIe

Cc

Standard:

Proponent's

PBID

Proponent's

CPE Budget

Feet

Square

Total

Square

Square

Feet

94,525 11,200 860,240 655,174 529,136 SO,899 94,539 808,626 44,275

-

PBlo Total

PBIO BUDGET

& Utilities

landscape

- Santa Monica

and Utilities

Boulevard

- Electricity

-

43,472

-

0

3.337 30,057 8,835,993

REoualONS

27,600

Agreed

12,000

Agreed Agreed

Insurance

- General

UablUtv

Insurance

- Worker's

Comp

10,200

Agreed Agreed

Capital Improvements - Signage/Wayfindfng

95,000 12,000

Management

and Advocacy

- Executive

36,000

Agreed

Management

and Advocacy

- Operations

96,000

Agreed

Management

and Advocacy

- Office

20,000

Agreed

Reserve

32,500

Agreed

Subtotal

380,900

Ut1lJtles - Waler

Capltallmprovemenls

No Reduction Ellm1nated

- seed Money

Reimbursement Director Manager

EJrpenses

Agreed

from ePE Catagorles

General

Maintenance

Service

Maintenance

Servlce - Supervisor

General

Maintenance

Service

landscaping

& Utilities

Security

- Night Patrol

Security

- Supplies

~ Sweeper - Equipment

-Landscaped

Maintenance

19,200

Not used on CPE.

33,600 15,000 21,600

Not used on CPE.

42,000

Not used on (PE.

Not used on (PE. Not used on

cPE.

Not used on CPE.

14.400

145,800

Subtotal Multiplied

by CPE's Share

Budget

Proponent's Adjusted

Agreed

ID.OD~)

General

45,371

(31.12%)

45,371

Reductions

PBlo Total

Budget

paiD Total Budget

CPE's Dollar Share of Proponent's CPE's Percentage

CPE's Dollar Share of Adjusted CPE's Percentage

PBIO Total

Budget

PBlo Total Budget

Share of Adjusted

Dollar Share or Proponent's

Remainder's

Percentage

Remainder's

Dollar Share of Adjusted

Remainder's

Percentage

PBIO Total Budget

Share of Proponent's

PBID Total

Budget

PBID Total Budget

Share of Adjusted

PBlo Total

From Proponent's

798,922

$844,293 . $45,371

27.21%

PBID Total Budget

Remainder's

844,293

$262,734 31.12% 217,363

PBIO Total Budget

Share of Proponent's

Budget

581,559 68.88%

581,559 72.79%

-

304,640 72,256 1,416,416 221,878 343,712 70,597 378,063 1,226,598 1,226,598 65,392

-

21,000 18,600

&

landscaping

Assessment

24,773

Upon Catagorles

landscaping

Feet

239,600

68.88%

Budget

CPE

Fox Zone

31.12%

Total Budget

PROPOSED

Total

Feet

94,525 11,200 660,240 655,174 529,136 50,669 94,539 606,626 44,275 0 24,773 239,600 304,640 72,256 1.416,416 221,878 343,712 70,5~7 378,063 1,226.598 1.226,598 65,392 43,472 3,337 30,057 8,835,993

Zone

CPE

Zone

844,293 262,734

Total Budget

a Percentage of Proponent's PBIO RemaInder as a Percentage of Proponent's CPE as

Agreed

Square

Premium

From Proponent's

PBID Total Budget

PBIO Total Budget

$262,734 / $844.293 $262,734· $45,371 $217,363/ $798,922 $844,293· $262,734 $581,559/ $844,293 $798,922 - $217,363 $581,559 / $79B,922

(See Above}

(See Above)

0

$2,610.66 $333.03 526,173,54 $19.461.31 515,733.62 51,513.16 52,611.07 $24,044.13 51,316.50 $0.00 5736.61 57,124.40 59,058.33 S2,148.50 542,116.50 56,597.44 510,220.12 52,099.17 511,241.53 $36,472.34 $36,472.34 Sl.944.40 51,292.62 $99.22 S893.73 $262,734.30

DRAfT

FOR DISCUSSION

PURPOSES

REVISION

AOJUSTED paiD

ONLY

3

BUDGET

SAVINGS

TOTALPBIO SAVINGS Proponent's PBIDTotal Budget Adjusted pelD Total Budget Adjusted paiD Reduction - Dollars Adjusted paiD Reduction - Percentage

$

Proponent's PBID CPEShare Adjusted PBIO CPE Share Adjusted PBID CPE Reduction - Dollars Adjusted PBID (PE Reduction - Percentage

s

Proponent's PBID Remainder Share Adjusted PBID Remainder Share Adjusted pam Remainder Reduction - Dollars Adjusted paID Remainder Reduction - Percentage

$ $

s $

s $

844,293 798,922 45,371 5.37% 262,734 217,363 45,371 17.27% 581,S59 581,559

s 0.00,*

REVISED PBIO ePE ASSESSMENT BASED ON THE ASSUMPTIONS ABOVE

APN 4319001001 4319001002 4319002060 4319002057 4319001006 4319001007 4319004 138 4319004140 4319004141 4319004142 4319001006 4319001903 4319001904 4319003063 4319003064 4319001014 4319001005 4319004 139 4319002045 4319016029 4319016030 4319001803 4319001013 4319001009 43t9 001010 SubtDtalStandard:

Owner Name

century City LLC Suncal Cenlury City LLC 18751925 Century Park East Co 10100 Santa Monlca,lne. 1B88 Cp Property Ue 1940 Cenlury City LIe Ap Properties ltd Ap Properties lid Ap Propemes Lid Ap Properties lid Aulcmcblle Club Of So Calif Ca Public Employees Rellremenl System Co Public Employees Retirement System Cc Building Lp Cenlury City Mall Lie Cenlury City Med Pz Lnd Co Tr Century Park Cenlury Woods Condominium Douglas Emmell 1997 LIe One Hundred Towers lie One Hundred Towers lie Pacific Bell Plant Uc Ce SUe One LIe Cc SUe One LIe Cc Surreal

Site Address 10000 Santa MonIca Blvd 10000 Santa Monica Blvd 1875 Cenlury Pari
1801 Century Parle E 2029 Century Park E 2049 Century Pari
Total Assessable Square Feet 9~,525 11,200 880,240 655,17~ 529,136 50,889 94,539 806,626 44,275 0 24,773 239,600 304,640 72,256 1,416,416 221,878 343,712 70,597 378,063 1,226,596 1,226,598 85,392 43,472 3,337 30,057 8,835,993

Standard Zone prernlum Zone Square Feet

cPE Square Feel

-

94,525 11,200 880,240 655,174 529,136 50,889 94,539 809,626 44,275

-

-

-

-

0

Total

cPE

Fox-lone Square Feet

24,773 239,600 304.640 72,256 1,416,416 221,878 343,712 70,597 378,063 1,226,598 1,226,598 65,392 43,472 3,337 30,057 8,835,993

-

-

-

0

Assessment 52,325.29 $275.52 521,653.66 516,117.10 513,016,60 $1,251.86 52,325.63 519,891.96 51,089,15 $0.00 $609.41 S5,B04.09 57,464.06 Sl,777.48 534,843.45 55,458.14 58,455.22 Sl,736.67 S9.300.25 530,173.98 530,173.96 51,608.63 51,069.40 S62.09 5739.39 $217,363.01

May 27,2008 Page 25

PART 2

EXHIBIT A - CPE Owners' Recent mark-up of the PBID

[attached]

493757.7 001378.0003 5/25/2008 - 10:00 PM

Page 1 of2 Gordon K. Eng From:

Gordon K. Eng

Sent:

Tuesday, May 13, 20082:06

To:

'[email protected]'

Cc:

Tony Canzoneri; '[email protected]'; 'noreen. [email protected]'

Subject:

Century City BID- Coments to May 08 MOP

Attachments:

Untitled. pdf

PM

'Kristin Lowell Schubert'; [email protected];

Dear Katy, Attached is my mark-up of the MOP. My clients appreciate the steps taken by the proponents to reduce the overall budget which has the effect of reducing the assessment for all of the owners in the District. We feel that a number of other issues which have been raised by the CPE Consortium were not adequately addressed, as follows: 1. The allocation of costs for security, landscaping (other then Santa Monica Blvd; although we are not clear as to how there can be a "deal" with the City that it would only provide maintenance for a period of 1 year); administrative expenses (the focus of management will be on Avenue of the Stars and the services which are not a benefit to CPE so we do not think it is fair to charge the CPE owners for anything or just a de minimus amount for this cost). Robert Held's office is working on another worksheet, similar to our last analysis of the proponent's budget, to show how we propose to equitably adjust the allocations and assessment in a way that does not increase any individual assessment. His worksheet is based on the budget format used by the proponents so if accepted J think Kristin can use it to replace the current budget and assessment roll. 2. Detailed firewall protections to prevent modifications and changes in the budgets. Now that we have worked so hard to right size the budgets and sub-budgets for the District we do not want them to be changed or else the property owners in the District will feel they have been subject to some kind of bait and switch. 3. Alcoa protections to contain all the Alcoa work in the Avenue of the Stars budget and prevent these costs from spilling over to the rest of the District. This cost protection concept holds true for any private obligation which is being absorbed by the District. The private party should not be allowed to shift its cost on the the District. The City must also be protected from being left holding the Alcoa obligations once the PBID terminates. I have not received a redline of the changes made in the Engineer's Report but the Engineer's Report seemed to be very similar to the MOP in the last draft. Please make consistent changes in the Engineer Report if the enclosed are acceptable. I understand that Kristin had personal commitments and this may have led to her submission of the revised MOP without input or review by the CPE Consortium. However, these are important issues to my Clients and I think our comments can be adopted by the proponents with little difficulty. I believe the comments are consistent with the purpose of PBID which the proponents have touted. Also please note that we have been mindful of proposing language and concepts that would not require proponents to repetition. We have refrained from submitting a formal protest letter in to the record because my clients desired work toward a mutual and cooperative resolution of their concerns. But please note that given the speed at which proponents are driving this matter we cannot be sure if our changes will be embraced by proponents and frankly I thought some of the changes (if not in word then in concept) noted in the attachment would have been incorporated by the proponents' revision. Therefore, we may feel it necessary to (file an objection letter before the City Council takes further action.

Gordon K. Eng Brown Winfield Canzoneri Abram Inc. 300 S. Grand Avenue, 15th Floor

5/2112008

Page 2 of2 Lcs Angeles, CA 9007]-3]25 . Direct Dial: 213.687.2]76 Direct Fax: 213.687.]776 [email protected] wvvw.bwcalaw .com The information contained in this e-mail may be protected by the attorney-client and/or the attorney/work product privileges and may be confidential. This e-mail message and its contents and attachments are for the sole use of the intended recipient(s). Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender bye-mail and destroy all copies of the original e-mail. To reply directly, send an e-mail to [email protected] IRS Circular 230 Disclosure: To comply with certain U.S. Treasury regulations, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this communication, including attachments, was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding any penalties that may be imposed on such taxpayer by the Internal Revenue Service.

5/2112008

FINAL Century City Businesslinprovement District Management District Plan

Los Angeles,

California

May 2008

Prepared by: Kristin Lowell Inc.

Prepqred pursuant to the state of California Property and BusinessImprovement District Low of 1994 And Article XII/D of the California Constitution to create a property-based business improvement district in Century City

Century City Business Improvement District Management District Plan

.,

Table of Contents Page Number

Section Number Management

2.

PBID Boundary

3.

PBID Improvement

4.

Existing Maintenance

5.

PBID Operating

6.

Public Sector Participation

11

7.

Assessment Methodology

12

8.

PBID Governance

18

10 }J'. 11

JIll.

District Plan Summary

1

1.

3 Plan

Agreement

Budget

Implementation Assessment

and Activity

Tlmeline

Roll 9. Amendments, Clarifications and Adjustments

ATTACHMENTS: Engineers Report - Attachment A PBID Boundary Map - Attachment B

5 8 9

19 20

century City Business Improvement District Final Management District Plan

May 5,2008

Page lof21

SECTION 1: Management District Plan Summary Developed by a coalition of property and business owners, the "Century City Property BusinessImprovement District (PBID)"is a proposed benefit assessment district designed to improve and convey special benefits to properties within the central businessdistrict of Century City. The PBIDis being established pursuant to the state law known as the "Property and BusinessImprovement District Law of 1994", as amended. The purpose of the Century City PBID Is to provide new services and activities, including: capital improvements and maintenance, and pedestrian security and safety above and beyond what the City currently provides in order to improve commerce through retaining and attracting businessesand increasing pedestrian traffic. The PBIDis approximately 6 blocks. 11is roughly bounded by Santa Monica Boulevard median to the north, century Park West to the west, Olympic Boulevard and Pico Boulevard to the south and Avenue of the stars and the Beverly HillsCity Limit Line to the east. Please see Attachment B for a map of the proposed PBIDboundaries. Location:

Services and Activities Provided: •

• •

Capital Improvements: Improve and maintain the physical appearance of the medians, landscaped corridors and pedestrian walkways; replace the aging irrigation lines. Enhanced Maintenance: Engage in activities to provide a cleaner environment and maintain the landscaped corridors. Pedestrian Security and Safety: Initiate and carry out programs that provide a safer environment for businesses,employees and pedestrians.

Budget: Total PBIDbudget for its firstyear of operation is $844,293.

There are three benefit zones: the Premium Zone, the Standard Zone, and Fox Studios that benefit differently from the proposed services and activities. The Premium Zone encompasses every parcel that has Avenue of the Starsfrontage except for those properties expressly exempted, as detailed herein. The Standard Zone includes all other parcels in the district boundary excluding the Fox Studios, which makes up its own third zone. Please refer to Section 2 for a discussion of Benefit Zones. Benefit lones:

of Financing: Levy of assessmentsupon real property that specially benefit from the proposed services and activities.

Method

Annual assessmentsare calculated based upon each property's special benefit received from the identified services and activities and their relative cost. The assessment factors are based on the building square footage for developed parcels and lot square footage for undeveloped vacant parcels. The first year's assessment rates, including residential parcels, per building square foot for developed parcels and lot square foot for vacant parcels are: Assessments:

century City Business Improvement District Final Management District Plan

MayS, 2008 Page 2 of21

Benefit Zone

Assmt Rates

Premium Zone Standard Zone Fox studios Note: Parking structures receive defined in Section 7 below.

a reduced

$0.100498 $0.029735 $0.011321 assessment based on benefits received,

The PBID budget and assessments may be subject to changes in the Los Angeles Consumer Price Index (CPI), with annual increases not to exceed 5% per year. Increases will be determined by the Owners Association, defined in Section 8 below, and will vary between 0% and 5% annually. Cap:

Assessments will appear as a separate line item on the annual County of Los Angeles Property Tax bills. The City of Los Angeles also has the authority to and may choose to bill the property owners.

Collection:

City Services: The City of Los Angeles has established a policy to maintain the level of services (baseline services) currently provided after the PBIDis established. District Formation: PBIDformation requires submission of petitions from property owners representing more than 50% of total assessments. Following a public hearing, if ballots, weighted by assessments, submitted in opposition to the assessment do not exceed the ballots submitted in favor of the assessments, the City Council may authorize the levy of assessments. Duration: Per state law, the PBID will have a five year life from January 1, 2008 to December 31, 2012. However, activities are not planned to start until September 1, 2008 and a reduced assessment will be applied In the first year due to the late start in services. Before December 31, 2012 the property owners within the PBID may elect to renew the District. If the District is not renewed, or otherwise terminated for any reason, unexpended funds will be returned to the property owners in a pro-rata share.

The City will contract with a non-profit organiza1ion to run the day-to-day operations of the PBID. The PBIDwill have a governing board, the Owners Association. Pursuant to the Property and Business Improvement District Law of 1994, the Owners Association will among other duties, annually review the PBID budgets and pollcles within the limitations of the Management District Plan and file annual reports with the City Council. Governance:

The non-prom agency will work closely with the District 5 Council Office, the City of Los Angeles, and other community organizations.

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Section 2: PBID Boundary An approximately 6 block area has been Identified as the Century City PBIDboundary. The proposed PBIDBoundary (see Attachment B) is roughly bounded by the following streets:





+

NORTH: Santa Monica Blvd,

santa Monica Boulevard to the north between Century Park East and Century Park West is a natural barrier between Century City and the residential community on the north side of Santa Monica Blvd; Santa Monica Boulevard is a major thoroughfare which prevents the delivery of services or any benefits to the parcels on the north side of Santa Monica Boulevard. The services will be delivered to the Santa Monica Boulevard median between Century Park Eastand Century ParkWest. WEST: century Park West,

Century Park West between Pica Boulevard and Santa Monica Boulevard, including the west property line of parcel 4315-01<9-012 (Fox Studios) is the western boundary. There is a solid fence line that separates Century Park West and the residential community to the west. Because of the fence line, the properties to the west of the fence will not receive any services or benefit from the PBIDimprovements and activities. There Is also a fenced in residential condominium development that lies at the northeast corner of Century Park West and Olympic Boulevard and is not In the PBIDboundary. Thisdevelopment is excluded because the PBIDwill not provide any services to the fenced in condo development and therefore will not receive any special benefit from the services provided. SOUTH: Olympic Boulevard and Plco Boulevard,

The southern boundary begins at the Northeast corner of Olympic Boulevard and Century Park Eastcontinuing to Avenue of the Starsand proceeds south to Pico Boulevard between Avenue of the stars and the west property line of parcel 4315-019-012 IFox Studios). Olympic Boulevard and Pico Boulevard serve to delineate the business corridor from the residential community of Century City. The residential condominium developments are fenced in provide self-inclusive security and maintenance. These condominium projects do not have their primary access on Avenue of the Stars. The fenced-in condominium projects are excluded from "the PBID boundaries because PBID services will not be provided to those fenced-in condo projects and therefore do not receive special benefit from said services.

+

EAST: The City limit line.

The City Limit line is the boundary to the east between Santa Monica Boulevard and Olympic Boulevard. Is a political boundary separating the City of Los Angeles and the City of Beverly Hills. The eastern boundary continues down the western portion of Avenue of the Stars between Olympic Boulevard and Plco Boulevard. The residential oondominlum developments east of Avenue of the Stars are fenced in and provide selfinclusive security and maintenance services. These condominium projects

century City Business Improvement District Final Management District Plan

May 5,2008 Page 4 of21

are excluded from the PBID boundaries because PBID services will not be provided to those fenced in condo developments and therefore do not receive special benefit from the proposed services.

Benefit Zones There are three benefit zones within the PBID;the Premium Zone includes every parcel that has frontage along Avenue of the stars, except for those properties expressly exempted, as detailed herein. The Standard Zone includes every other parcel within the district boundary except for Fox Studios. The Fox Studios zone Includes solely the Fox Studios parcel 4315-019-12. The Premium Zone and the Standard Zone receive the same level of service from the Security, General Maintenance and Capital Improvements. The Premium Zone also receives an enhanced level of maintenance services for the Avenue of the Stars median and the fountains. Therefore the Premium Zone will be responsible for the cost of these additional maintenance services. The Fox Studios encompasses being approximately 5% of the district area, receives a benefit strictly from the maintenance portion of Avenue of Stars that is adjacent to their property, and will pay their proportionate share for that service.

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Section 3: PBIDImprovement and Activity Plan Century City PBID Management

District Plan

As determined by area property and business owners, the top priorities for services and activities within the Century City PBIDarea include: ' • • •

Capital Improvements, Enhanced Maintenance, and Pedestrian Security and Safety

Based upon these findings, the following service and activity categories are recommended for the PBID., The following narrative provides recommendations for the PBID's first year of operation. Program activities may be amended in subsequent years within the following general categories. Final programs and budgets will be subject to the review and approval of the PBIDOwners' Association prior to City Council approval. All ef the improvements and activities detailed below are provided only within the boundaries of the District and provide no special benefit to the properties outside the boundary area. The definition of special benefit is a benefit unique and speclol to identified properties resulting from the improvement, activity, or service to be provided by the assessment levied. All benefits from the assessments outlined in this Management District Plan go only for services directly benefiting the properties In the PBIDto increase commerce and all the other goals and objectives of the PBID. Inasmuch as all services will be provided to the properties within the District boundaries and no services will be provided outside the District natural boundaries, including fencing, street width and adjacent City, any potential general benefits are Intangible and not quantifiable.

1P - P%e. §

~S~

CAPITAL IMPROVEMENTS Capital improvements are the top priority with property owners in an effort to improve and maintain the physical appearance of the medians and landscaped corridors in the Century City business corridor. The Owners Association will develop the annual work programs and budgets from a wide variety of options that may include, but shall not necessarily be limited to: Installation and maintenance of such items as pedestrian scale street furniture, signage, newsstands, seasonal banners, tree lighting' and enhanced landscaping. Replacement of the aging irrigation lines in all the medians and landscaped corridors. Collaboration with the City to maintain high standards of design and maintenance.

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In additlon to the capital improvements listed above, the City of LosAngeles, through PBIDfunds may leverage matching funds with the Metropolitan TransitAuthority and/or other organizations' for various pedestrian-related corrldor improvements within the PBID boundary. Some examples of qualifying projects may include, but shall not be limited to, the following: Fixture replacement for street lighting on Avenue of the stars (between Santa Monica Boulevard and Constellation Boulevard), Century Park East (between S~onica Boulevard and Constellation BoulevaWJ. ~ t Tree insfalrafion In the Avenue of the Stars median between Santa Monica Boulevard and Constellation Boulevard. Gateway signage on Santa Monica Boulevard at Century Park. West and Century Park East. Diagonal pedestrian crossing at the intersection of Avenue of the stars and Constellation Boulevard. Median Fountains

Pif~·e.:.:.m:..:.l

(;t=:'

i-,:.:..:'

...:'2::'

MQ~)..::;'

._

p"t I- I!) 11-05'

bLl-(;i.~

'-,..J------_

The er nersals· indicated they would like to refurbls r replace the fountains on Avenue of the Starswi in the PBIDboundary, but the cost to re ce them isprohibltively expensive for the G 1:!r-y-Gl4y property owners to fund alone. The owners Wishto work with the City to determine an equitable solution to fund the iconic fountains in Centu Cit. In the interim, the PBIDwill provide basic maintenance servicesuntil a longterm solution can be found. The Premium Zone receives the. special benefit from the fountains and the maintenance thereof and will be assessedfor said maintenance. The fountains were installed more than four decades ago as an integral part of the design of the "City of the Future." They help to define century City as a sophisticated and unique destination for both businessesand investors. The fountains are important and internationally recognized iconic symbols that have been as much a part of Century City as the elegant office buildings and unique hotels that have been built around them. They anchor the landscaped medians and provide an aesthetic element of progressive urban attention that defines the center of Century City's grand boulevard. The fountains are a key part of Century City's history,identity, and property values, now and in the future. All capital improvements will be provided to both the premium and standard zones. The Fox studios Zone does not receive any of the capital improvements, and therefore does not receive any special benefit or assessment.

ENHANCED MAINTENANCE The second priority for the Century City property owners is enhanced maintenance. PBID maintenance teams will provide enhanced cleaning services, includings~ sweeping uniformly throughout the district. The proposed maintenance service frequencies are proposed for 6 days per week for both the Premium Zone and the Standard Zone. Note that if the cost to provide these services drastically increases, then the frequency will change to adjust to the new budget.

~·tJ'tJ..P.:t

century City BusinessImprovement District Final Management District Plan

MayS, 2008 Page 7 of 21

In addition to the street ,,' maintenance, landscape maintenance servicesfor all the medians and lan"aped corridors including the Santa Monica Boulevard median will be provided. Theselandscape maintenance services may include tree maintenance, median landscaping, seasonal flowers. All parcels within the Premium Zone and the Standard Zone receive special benefit from the enhanced maintenance servicesfrom a cleaner environment. Therefore both of these benefit zones will be assessed for the maintenance services. Fox Studioswill benefit from the landscape median maintenance for that portion of Avenue of the stars that is adjacent to their property and will only be assessedfor their fair share of the special benefit derived therefrom.

PEDESTRIAN SECURITY AND SAFETY The third priority for the property owners is to provide a safer environment for businesses, employees and pedestrians within the PBIDboundary for the purpose of improving the iecunty Ir~)e ~(jmmercial ~The newly crealed Ambassador GUide's .program Wppo s· en orcemerif agencies and property owners in overall crime prevention :.,iWortsWhile offering a customer service orientation. The program assistsin the prevention :Of breok-lns, graffiti tags and disruptive street behavior. The Guides are also trained to 'direct pedestrians to civic, shopping and business destinations and are informed on \'~promotionsand events to encourage pedestrian traffic The proposed nightly bike patrol will provide surveillance approx ma e y 16 hours per day, six days a week. Anticipated costs include a fee to contract with an outside service to supply Guides, uniforms for the Guides, the bicycles used by the Guides to patrol the area, walkie-talkies and related communication equipment: video surveillance equipment: and incidental expenses. B, h the Premium Zone and - he Standard Zone receive special benefit from these services by enjoying ci safer environment for all pedestrlons, tenants and employee,j;.The security services are not provided to Fox Studio:/.'and therefore, Fox SlYdiOfOO~\ not receive any special benefit from these services. ~ ~ C~\V'\J f a>

t!vL..q

PetAk t"kd-

~~\'O:L.

ADMINISTRATION

c-~ Costs associated '1~administratiVe services include com 'ensation for a part-time Executive Director/an Operations Manager:: ....an a mihistratlve dssrSlarl" or the dayto-day operations of the PBID. The budget for this also includes tunos for office expenses such as; utilities, stationary, postage, copies, faxes, vehicle mileage reimbursement, annual CPA review of financial statement, and other incidental items. Additionally, the administrative budget includes funds for insurance premiums (both general liability coverage and director and officer liability coverage). All benefit zones receive special benefit from administrative services in that all properties benefit from an efficient, well-managed PBIDso that the PBIDis managed and operated efficiently and effectively.

if

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Section 4: ExistingMaintenance Agreement The City of Los Angeles currently recognizes a maintenance agreement with properties that front Avenue of the stars. It isthe intent of the PBIDto take over the responsibility of this maintenance whereby the existing ooreement will be terminated in accordance with its terms. Below is a discussionof the existing agreement.

1962 ALCOA Agreement History ALCOA purchased all of the land along Avenue of the stars between Santa Monica and Pico Boulevards from Twentieth Century Fox ("Fox"), leasing back a portion of the property to Fox for use as a studio. The remainder of this ALCOA land was divided into 14 tracts. Subsequently, ALCOA and the City entered into a beautification agreement in 1962 for maintenance of the medians along Avenue of the Stars between Santa Monica and Pico Boulevard (the "1962 ALCOA Agreement"). Portions of this property were further divided and sold off for development. Numerous property owners continue to pay for Avenue of the stars median maintenance pursuant to this 1962 ALCOA Agreement. Foxalso pays for a share of these maintenance costs pursuant to a series of agreements with Century City Inc" ALCOA's successor In Interest, whereby Fox and its affiliates and successors in interest agree to pay pursuant to the terms of the 1962ALCOA Agreement. Thus,currently all the existing properties along Avenue of the stars that were Included within the terms of the 1962 ALCOA Agreement, as well as Fox's Studio property, pay a percentage of the maintenance costs. . Details of the 1962 ALCOA Agreement ALCOA and the City of LosAngeles entered into a fully revocable agreement whereby ALCOA and subsequent property owners agreed to maintain the medians along Avenue of the stars between Santa Monica and Pico Boulevards until the "undersigned, or the owners of more than 50% of the area of said real property" give notice that they elecfto cease to provide the services, at which point they are no longer bound by the 1962 ALCOA Agreement. The agreement provides that the City, after termination of the 1962 ALCOA Agreement, can establish a process to assess property owners for median maintenance. Future of the 1962 ALCOA Agreement Posf-PBID Under the terms of the PBIDproposal, those properties currently paying for Avenue of the Stars median maintenance under the terms of the 1962ALCOA Agreement (except for the existing residential properties and Fox Studios), will continue to pay for these median improvements through the PBIDaccording to the special benefits received. JMB and the necessary number of property owners will terminate the ALCOA Agreement prior to the formation of the PBIDby the City.

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Section 5: PBID Operating Budget 2008 Operating

Budget

The following table outlines the PBID maximum assessment operating budget for January 1, 2008 through December 31, 2008. However, since the PBIDwill only deliver services beginning September 1, 2008, it is anticipated that the budget for 2008 will be one-half of the total, or $422, 146.

Total Budaet $107,000 $178,800 $317,593 $56,400 $659,793

Premium Zone Bud~et $42,800 $71,520 $304,889 $22,560 $441,769

Standard Zone Buduet $64,200 $107,280 $0 $33840 $205,320

Fox Zone Budget $0 $0 $12,704 $0 $12,704

Management and Advocacy Reserve Fund Subtotal Management & Reserve

$152,000 $32,500

$101,773 $21,761

$47,301 $10,114

$2,927 $626

$184,500

$123,533

$57,414

$3,552

TOTAL BUDGET

$844,293

$565.,302

$262,734

$16,256

Service Capital Improvements Enhanced Maintenance Ave of the Stars Maintenance Public Safety Subtotal Activities

(1) Since the services will commence September 1,2008, the City Clerk, rather than the LA County Assessor,will bill the 2008 assessments. (2) Unpaid 2008 assessments billed by the City Clerk will be added to the 2008-2009 property tax assessment. (3) Accrued interest and delayed payment will be expended in the abovebudgeted categories. A change greater than 10% will require City Council approval. (4) Funds earmarked for non-Avenue of the Stars maintenance and/or improvements shall not be used for Avenue of the Stars maintenance and/or

P~ 9 -:rV15v:t~provements. 5- Year Operating

Budget

The following table illustrates the PBID's operating budget for the 5-year life term based upon the following assumptions: The PBIDbudget and assessments may increase by as much as 5% per year to keep pace with the consumer price index and other program costs. The table below shows an annual budget increase of 5%. The budget for 2009 assumes a full year's budget, ($844,293), plus the 5% increase.

I Description

2008

2009

2010

2011

2012

v

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Capital Improvements Enhanced Maintenance Ave of the Stars Maintenance Public Safety Subtotal Activities

$53,500 $89,400 $158,796 $28200 $329.896

$112,350 $187,740 $333,472 $59,220 $692,782

$117,968 $197.127 $350,146 $62,181 $727,422

$123,866 $206,983 $367,653 $65,290 $763,793

$130,059 $217,333 $386,036 $68,555 $801,982

Management and Advocacy Reserve Fund Subtotal Management & Reserve

$76,000 $16,250

$159,600 $34,125

$167,580 $35,831

$175,959 $37,623

$184,757 $39,504

$92,250

$193.725

$203,411

$213,582

$224,261

$422,146

$886,507

$930,833

.$977,374

TOTAL

BUDGET

$1026243

Every year the Owners' Association may reduce or increase the annual budget. A budget increase may not increase the assessmentrate any greater than 5% per year. Budget Adjustment: Any annual budget surplus will be rolled over to the following veer's PBID budget, and assessments recalculated proportionately as long as the assessment rates stay within the maximum 5% increase. The PBID reserve will be maintained at approximately 5%of the annual PBIDbudget Bond Issuance: No bonds will be issued to finance improvements.

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Section 6: Public Sector Participation Baseline Services Agreement

It is not the intent of the PBID to use property assessment funds to pay for services that the City currently provides. Assessment funds are to pay for services that are above and beyond those services provided by the City and that provide special benefit to the property owners. The City of Los Angeles has established a policy to maintain the level of services (baseline services) currently provided affer the PBIDis established. Public Property Assessments

The Century City PBID Management District Plan assumes that the City of Los Angeles and any other government or non-profit owned parcels within the PBID boundary will pay their fair share assessment based on the special benefits conferred to those parcels. Article XIIiD of the California Constitution was added in November 1996 and provides for these assessments. There are two California Public Employees Retirement System parcels within the Century City PBID boundary, APNs 4319-001-903,904; representing a total assessment of $16,182.73.

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Section 7: Assessment Methodology General This Management District Plan provides for the levy of assessmentsfor the purpose of providing services and activities that specially benefit real property in the PBID. These assessmentsare not taxes for the general benefit of the City, but are assessmentsfor the services and activities which confer special benefits upon the real property for which the services and activities are provided.

Assessment

Factors.

century City property owners and business owners have emphasized that the assessment formula for the Century City PBID be fair, balanced and have a direct relationship to special benefits received. The state enabling legislation, Section 36632(0) of the streets and Highways Code states, "Assessments levied on real property shall be levied on the basis of the estimated benefit to the real property within the district." The recommended methodology for the PBIDis to use building square footage for developed parcels and lot square footage for vacant parcels. If a vacant parcel is developed during the course of the assessment district, then that parcel's future assessmentwill be its developed building square footage multiplied by the assessment rate for that year for the appropriate benefit zone. Since the building square footage and the 101 square footage benefit to the same degree from the proposed services, the assessmentrate for the building square footage and the lot square footage isthe same rate depending on the benefit zone. Building Square Footage or Lot Square Footage are the assessment variables used for determining the appropriate level of benefits received. Property owners, building owners and their tenants will receive the most direct special benefit from the improvements and activities. The total number of building square feet or lot square feet for each Benefit Zone is shown in the following table: Area Premium Zone Standard Zone Foxstudios

Bldg SCl.Ft.

5,217,525 8,626,277 1,435,943 15,279,745

Lot SCl.Ft. 407,475 209,716 617,191

TOTAL SCl.Ft. 5,625,000 8,835,993 1,435,943 15,896,936

Benefit Zone Assessments As previously mentioned there are three benefit zones; the Premium Zone which is every parcel that has frontage along Avenue of the Stars, except for those properties expressly exempted, as detailed herein; Standard Zone, which includes every other

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parcel except Fox Studios in the District boundary; and the Fox Studios zone, which is limited to the Fox Studios parcel 4315-019-12. The Premium Zone and the Standard Zone receive the same level of service from the Security, General Maintenance and Capital Improvements. However, the Premium Zone also receives an enhanced level of maintenance services for the Avenue of the Stars median and the fountains. Therefore the Premium Zone will be responsible for the cost of these additional maintenance services. The Fox Studios, encompassing approximately 5% of the district area, receives benefit strictly from the maintenance portion of Avenue of Stars that is adjacent to their property. Therefore, Fox Studios will pay approximately 5% of the budget allocated for Avenue of the Stars maintenance. With that said, the total cost allocation to the Premium Zone is $565,302. To calculate the assessment rate for that zone, divide the $565,302 by the total number of assessable square feet for that Zone (5,625,000),which equals an assessment rate of $0.100498 per building or lot square foot. The total cost allocated to the Standard Zone is $262,734. To calculate the assessment rate for that zone is to divide the $262,734 by the total number of assessable building square feet for that Zone (8,835,993),which equals an assessment rate of $0.029735 per assessable building or lot square foot. The assessment for Fox Studios is proportionate to the percentage of the district area and equal to the amount of benefit it receives from the maintenance services of Avenue of Stars. The amount attributable to Fox Studios is $16,256. There are 1,435,943 building square feet on the Fox Studios parcel, which equals an assessment rate of $0.011321. Assessment rates for both building square footage and lot square footage exceed the following during the first year of the PBID: Benefit Zone

Premium Zone Standard Zone Fox Studios

will not

Assmt Rates

$0.100498 $0.029735 $0.011321

Annual Assessment Adjustments Future Development: As a result of continued development, the PBID may experience the addition or subtraction of assessable building square footage for parcels Included and assessed within the PBID boundaries. The modification of parcel improvements assessed within the PBID may then change upwards or downwards the amount of total building square footage assessment for these parcels. In future years, the assessments for the special benefits bestowed upon the included PBIDparcels may change in accordance with the assessment methodology formula listed In the

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Management District Plan and Engineer's Report, provided the assessment formula does not change. If the assessment formula changes, then a Proposition 218 ballot will be required for approval of the formula changes. MTA Layover Zone: The Metropolitan

a public Avenue for MTA access. deemed

Transit Authority (MTA) owns and operates transit layover area within the PBID boundaries at the corner of Constellation and Century Park West (APN 4319-004-142). Thisis a public transit layover zone buses. This area is for MTA vehicles only and it is not intended for public to The area is not commercial in nature and is not intended for pedestrians and is not to benefit from the PBIDservices.

Residential Parcels: All residential properties developed and not zoned solely residential in the future will receive the same level of service and benefit as all other properties in the District. Therefore they will be assessed the same rate as all other developed parcels in the PBIDbased on it based on the benefit zone. Assessments are levied on newly developed parcels at the time of Certificate of Occupancy. The

ro~~~t~o~~ such parcels ~+.::~~Jh:Juture

assessment at the time of the PBID

Vacant Parcels: Vacant undeveloped parcels receive the same benefit from the proposed improvements as do developed parcels, however the benefit of services is delivered to the lot. Therefore, so long as a parcel is vacant and undeveloped it will be ossessed based on its lot square footage taking into account the benefit zone. However, if the vacant parcel is developed during the course of the PBID, it will be assessed the same rate as all other developed parcels in the PBIDbased on the benefit zone. Assessments are levied on newly developed parcels at the time of Certificate of Occupancy. The vacant parcels at the time of this report are:

4319-001-01 4319-001-02 4319-002-53 4319-002-54 4319-002-55 4319-002-59 4319-{)04-38 4319-{)04-139 owner~ of such parcels ~ torrnotlon.

to the, fut~re assessment at the time of the PBID M:tS' ithJ

tJ-

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Gross Square Footage of Parking: Depending on usage, parking structures will vary in the level of special benefit received from the proposed BID services/ improvements intended to increase pedestrian traffic and attract business. The assessment methodology for finished property (based ·on building square tootoqe) and the methodology for vacant property (based on lot square Iootope}, result from the special benefits of the PBID's proposed services and the PBIDsoverall ability to attract business end increase pedestrian traffic. Therefore, parking structures will be assessed at a rate commensurate with the special benefit received. Parking uses will be subject to one of the following methodologies:

Parking separate from C1building with different ownership - Commercial parking structures, with different ownership than the adjacent building, will benefit from increased business. However, they will not benefit from all services to the same extent as other commercial businesses. These structures will benefit from security patrol services and the portions of maintenance which pertain to sidewalk maintenance, but they do not benefit from capital improvements or the portions of maintenance that relate to landscaped median maintenance. Therefore, parking structures separate from a building are deemed to receive a lower special benefit and will receive a proportionately lower assessment rate per assessment zone for the special benefits derived. Parking structures meeting these criteria will be assessed at $0.014867 per square foot of the qualified parking structure in the Standard Zone and $0.050249 per square foot of the qualified parking structure in the Premium Zone due to their reduced level of benefit. Parking structures in the Fox Studio Zone are completely fenced-in and do not benefit from any services and therefore will not be assessed. Parking adjacent to a building with the same building ownership Parking structures, and/or surface parking lots on otherwise vacant parcels, that are adjacent to a building and which have the same ownership as the adjacent building is primarily used for the private use of the adjacent building tenants/ owners. These structures/lots are not intended for commercial operation use, and mostly do not contribute to an attraction of business or an increase in pedestrian traffic. However, their independent, non-Integrated design alone demands for a miniscule amount of maintenance services to be applied to the perimeter, and thus benefit - to a minor extent - from a reduced level of maintenance services. These independent. non-integrated structures/lots do not benefit from any other service. Due to this miniscule amount of special benefit. parking structures and/or surface parking lots meeting this description will receive a proportionately lower assessment rate per assessment zone for the special benefits they derive. Therefore, parking structures/lots meeting this criteria will be assessed at $0.002973 per square foot of the qualified. structure/lot in the Standard Zone and at $0.01 0050 per square foot of the qualified structure/lot in the Premium Zone due to their reduced level of benefit. Parking In the Fox Studio Zone Is completely fencedin and do not benefit from any service and therefore will not be assessed. Parking completely integrated within a building

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Page 16of21

Parking structures that are completely integrated within a building, sharing the same owner and parcel as the building, primarily used for the private use of building tenants/owners, not intended for commercial operation use, and which do not contribute to an attraction of business or an increase In pedestrian traffic will not be assessed. The Integrated parking within a building is intended only for internal building access. This type of private parking structure does not receive additional benefits from the BID services provided for the main building at the street level. Therefore, the portions of these buildings which consist of parking will be subtracted from the overall building square footage since the area for the parking does not benefit. Parking type

Separated lot/structure independentlvowned Separated lot/structure with same owner as an adjacent bulldlno owner Completely integrated within a building

Standard Zone Rate

Premium Zone Rate

Fox Studio Zone Rate*

$0.014867

$0.050249

N/A

$0.002973

$0.010050

N/A

N/A

N/A

N/A

*AII parking structures/lots within the Fox studio Zone are completely fenced within the Fox Studio property and do not benefit from any of the services provided in the District. Therefore, they will not be assessed.

Budget Adjustment: Any annual budget surplus or deficit will be rolled over to the following year's PBID budget, and assessments will be recalculated proportionately as long as they stay within the maximum 5% increase. The PBID reserve will be maintained at approximately 5% of the annual PBIDbudget. Government

and Non-Profit Assessments

The Century City PBID Management District Plan assumes that the City of Los Angeles and any other government or non-profit-owned parcels within the PBID boundary will pay their fair share assessment based on the special benefits conferred to those parcels. Article XIIiD of the California Constitution was added in November 1996 and provides for these assessments. There are no City-owned parcels within the District. There are, however, two California Public Employees Retirement System parcels within the Century City PBIDboundary, APNs 4319-001-903,904; representing a total assessment of $1 6,182.73. Time and Manner for Collecting Assessments

As provided by state law, the Century City PBID assessment will appear as a separate line item on the annual Los Angeles County property tax rolls, and will either be paid in

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one lump sum or in two equal installments. Laws for enforcement and collection of property taxes also apply to the PBIDassessment. The City of Los Angeles also has the authority to and may choose to bill the property owners, which is expected the first year of PBID operation. The Owners Association shall not issue bonds to finance any service or improvements of the District. Disestablishment

state law provides for the disestablishment of a PBIDpursuant to an annual process. The 30-day period begins each year on the anniversary day that the City Council first establishes the District. Within this annual 30-day period, if the owners of real property who pay more than 50 percent of the assessments levied submit a written petition for disestablishment, the PBIDmay be dissolved. The City Council will hold a public hearing on the disestablishment prior to actually doing so. If the District is not renewed, or otherwise terminated for any reason, unexpended funds will be returned to the property owners In a pro-rata share. Durotion

Per state law, the PBID will have a five year life from January 1, 2008 to December 31, 2012. However, activities are not planned to start until September 1, 2008 and a reduced assessment will be applied in the first year due to the late start in services. Before December 31,2012 the property owners within the PBIDmay elect to renew the District. If the District Is not renewed, or otherwise terminated for any reason, unexpended funds will be returned to the property owners on a pro-rata share.

Century City Business Improvement District Final Manog,ement District Plan

MayS, 2008 Page 18 of 21

Section 8: PBIDGovernanc.e Consistent with business lmprovernent district legislatian thraughaut the notion, Califarnia's "Praperty and BusinessImprovement District Law ot 1994", and subsequent amendments establishes a gavernance framewark that allaws property owners who p.ay assessments to. determine haw those assessments are USed. The followin'g components are required within a PBIDgaverning structure.

City Council Following the submlsslon of petitions from property owners representing mare than 50% of the assessments to. be paid, the City Council, upan holding a public hearing on the proposed District, may elect to. form a PBID. The PBIDis established by a City Council ordinance, which may include the levy of on assessment an property. if the assessment is approved in a balloting process.

PBID Governance To. encaurage cast effective aperations, maximize stakeholders' accauntability and encouroqe a unified management structure, it is recommended. but nat required, that the City of Las Angeles contract with a non-profit orqcnlzotlon to. provlde the day-today operotlons of the PBID. This arganizatian will hold an electian ot ossessed property owners to. act as the gaverning baard, the Owners Assoclotlon. The Owner's Associatian should be made up of 9-11 praperty owners that will implement the services and activities as autlined in the Management District Plan. The Owners' Assaciatlan will annually review the PBIDbudgets and policles within the llrnltotlons of the Management District Plan and the City's administratian cantract, and file annual reports with the City Council. The Owners Associatian may also. elect Ex-Officio. nan-vating members to. be part of the assaciation. Such Ex-Officio. members may include; the Chamber of Commerce, residential homeawners assaciations, city representative ar business owners. Each year the Owners Assaciation will determine how many, if any, Ex-Officio. members there will be.

Century City BusinessImprovement District Final Management District Plan

May 5, 2008 Page 19 of 21

10 Section!!

Implementation Timeline

The century City PBID will have a five year life from January 1, 2008 to December 31, 2012. However, activities are not planned to start until September 1, 2008 and a reduced assessment will be applied in the first year due to the late start in services. In order for the PBID to meet the mid-year start-up date of September formation needs to adhere to the following schedule:

1, 2008, the

- Initiate petition phase - Gather petitions - Council adopts Ordinance of Intention - Ballots are mailed (pursuant to Prop 218) - Ballot tally and final Public Hearing July 2008 - Council adopts Ordinance of Establishment - City mails out handbills to collect property July 2008 assessments _. Initiate Administrative Contract with Owners Association - Owners Association starts implementation plan Summer 2008 - Begin BID operations September 1, 2008

February 2008 February 2008 May 2008

Century City Business Improvement District Final Management District Plan

u

Section

J.0':

May 5,2008 Page 20 of 21

Assessment Roll

The following table shows the assessment roll for a full year of services from January 1, 2008 through December 31, 2008. However, because the services are not expected to be delivered until September 1, 2008 the following table shows the assessments levied for the one-half year, from September 1, 2008 through December 31, 2008.

APN 4319002057 4319003 061 4319002060 4319001006 4319001007 4319003065 4315019005 4319004138 4319004140 4319004141 4319001008 4319004038 4319001903 4319001 904 4319003063 4319002053 4319002054 4319002055 4319002059 4319003064 4319001014 4315019012 4319001005 4319004 109 4319004139 4319002045 4319003055 4319002046 4319002056 4319016031 4319016032 4319016029 4319016030 4319001 803 4319001 013 4319001 009 4319001 010 4315019006 4319001 001 4319001 002

TOTAL:

Owner

Site Address

Name

10100 Santa Monica, Inc. 1801 Avenue OfThe Stars Limited 18751925 Century Park East Co 1888 Cp Property Lie 1940 Century City Llc 1999 Stars Lie 2121 Avenue OfThe Stars Lie Ap Properties Ltd Ap Properties Ltd Ap Properties Ltd Automobile Club Of So Calif Avenue OfThe Stars Assocs Llc Ca Publie Employees Retirement System Ca Pub lie Employees Retirement System Ce Ce Ce Cc Cc

Building Site Two Site Two Site Two Site Two

Lp Lie Lie Lie Lie·

Century City Mall Lie Century City Med Pz Lnd Co Tr Century Fox Film Corp Twentieth Century Park Century Star Lie Sunstone Century Woods Condominium Douglas Emmett 1997 Lie Douglas Emmett 2000 Lie Duesenberg Investment Co . Duesenberg Investment Company Entertainment Center Lie Entertainment Center L1c One Hundred Towers Llc One Hundred Towers Lie Pacific Bell Plant Lie Ce Site One Lie Ce Site One Lie Ce Sumitomo Realty and Development Suncal Century City LLC Suncal Century City LLC

CA

10100 Santa Monica Blvd 1801 Avenue Of The Stars 1875 Century Park E 1888 Century Park E 1940 Century Park E 1999 Avenue OfThe Stars 2121 Avenue OfThe Stars *no Site Address" 10250 Constellation Blvd 10250 Constellation Blvd 1950 Century Park E 2055 Avenue Of The Stars 1800 Century Park E 1840 Century Park E 1930 Century Park W *no Site Address" 10131 Constellation Blvd 1950 Avenue OfThe Stars *no Site Address" 10250 Santa Monica Blvd 2070 Century Park E 10201 W Pleo Blvd #111 1880 Century Park E #500 2025 Avenue Of The Stars *no Site Address" 1801 Century Park E 1901 Avenue OfThe Stars 1800 Avenue Of The Stars 1900 Avenue Of The Stars 2040 Avenue Of The Stars 2020 Avenue Of The Stars 2029 Century Park E 2049 Century Park E #260 *no Site Address* 2052 Century Park E Century Park E 2010 Century Park E 2151 Avenue Of The Stars 10000 Santa Monica Blvd 10000 Santa Monica Blvd

ZONE Standard Premium Standard Standard Standard Premium Premium Standard Standard Standard Standard Premium Standard Standard Standard Premium Premium Premium Premium Standard Standard Fox Standard Premium

Standard Standard Premium Premium Premium Premium Premium Standard Standard Standard Standard Standard Standard Premium Standard Standard

Assessable Footage 655,174 302,550 880,240 529,136 50,889 840,124 795,039 94,539 808,626 44,275 24,773 165,528 239,600 304,640 72,256 110,642 33,106 42,689 55,510 1,416,416 221,878 1,435,943 343,712 803,989 70,597 378,063 487,810 302,550 625,631 361,248 361,248 1,226,598 1,226,598 65,392 43,472 3,337 30,057 337,336 94,525 11,200

15,896,93 6i

PARCEL ASSMT $19,481.31 $30,405.73 $26,173.54 $15,733.62 $1,513.16 $84,430.95 $79,899.99 $2,811.07 $24,044.13 $1,316.50 $736.61 $16,635.27 $7,124.40 $9,058.33 $2,148.50 $11,119.32 $3,327.09 $4,290.17 $5,578.65 $42,116.50 $6,597.44 $16,256.09 $10,220.12 $80,799.44 $2,099.17 $11,241.53 $49,024.03 $30,405.73 $62,874.79 $36,304.77 $36,304.77 $36,472.34 $36,472.34 $1,944.40 $1,292.62 $99.22 $893.73 $33,901.66 $2,810.66 $333.03

$844 293

century City Business Improvement District Final Management District Plan

MayS, 2008 Page 21 of 21

The following table shows the half-year assessments September 1, 2008 through December 31, 2008.

Assessable FootaQe

Half Year ASSMT

Owner

4319002057

10100 Santa Monica, Inc.

10100 Santa Monica Blvd

Standard

655,174

$9,740.65

4319003061

1801 Avenue OfThe

1801 Avenue OfThe

Premium

302,550

$15,202.86

4319002060

18751925 Century Park East Co 1888 Cp Property Lie

1875 Century Park E 1888 Century Park E

Standard

880,240

Standard

529,136

$13,086.77 $7,866.81

4319001007

1940 Century City Lie

1940 Century Park E

4319003065

1999 Stars Lie

1999 Avenue OfThe

Stars

4315019005

2121 Avenue Of The Stars Lie

2121 Avenue OfThe

Stars

4319004138

Ap Properties

Ltd

"no Site Address"

4319004140

Ap Properties

Ltd

10250 Constellation

Blvd

4319004141

Ap Properties Ltd Automobile Club Of So Calif

10250 Constellation

Blvd

4319001

008

Site Address

provided from

APN

4319001006

Name

for services

Stars Limited

ZONE Stars

Standard

50,889

$756.58

Premium

840,124

$42,215.47 $39,949.99

Premium

795,039

Standard

94,539

$1,405.53

Standard

808,626

$12,022.07

Standard

44,275

$658.25

1950 Century Park E 2055 Avenue OfThe Stars

Standard

24,773

Premium

165,528

$368.31 $8,317.63

4319004038

Avenue Of The Stars Assoes LIe

4319001

903

Ca Public Employees

Retirement

System

1800 Century Park E

Standard

239,600

$3,562.20

4319001

904

Ca Public Employees

Retirement

System

1840 Century Park E

Standard

304,640 72,256

$4,529.17 $5,559.66

Premium

110,642 33,106

Premium

42,689

$2,145.08

55,510 1,416,416

$2,789.33 $21,058.25

221,878 1,435,943

$7,874.34 $40,399.72

4319003063

Ce Building Lp

1930 Century Park W

Standard

4319002053

Ce Site Two Lie

*no Site Address"

Premium

4319002054

Ce Site Two Lie

10131 Constellation

4319002055

Ce Site Two Lie

1950 Avenue OfThe

4319002059 4319003064

Ce Site Two Lie Century City Mall Lie

*no Site Address" 10250 Santa Monica Blvd

Century City Me.d Pz Lnd Co Tr

2070 Century Park E

Premium Standard Standard

Century Fox Film Corp Twentieth

Fox Standard

4319001

014

Blvd Stars

$1,074.25 $1,663.55

$3,298.72

4319001005

Century Park

10201 W Pieo Blvd #111 1880 Century Park E #500

4319004109

Century Star Lie Sunstone

2025 Avenue Of The Stars

Premium

343,712 803,989

4319004139

Century Woods Condominium Douqlas Emmett 1997 Lie

"no Site Address' 1801 Century Park E

Standard Standard

70,597 378,063

$1,049.59

4319002045 4319003055

Douglas Emmett 2000 Lie

1901 Avenue OfThe

Stars

Premium

487,810

4319002046

Duesenberg Duesenberg

1800 Avenue Of The Stars

Premium

302,550

$24,512.01 $15,202.86

1900 Avenue OfThe

Stars

Premium

625,631

$31,437.39 $18,152.39

4315019012

4319002056

Investment Investment

Co Company

$5,110.06

$5,620.77

4319016031 4319016032

Entertainment

Center Lie

2040 Avenue Of The Stars

Premium

361,248

Entertainment

Center Lie

2020 Avenue Of The Stars

Premium

361,248

$18,152.39

4319016029

One Hundred Towers Lie

2029 Century Park E

Standard

1,226,598

$18,236.17

4319016030

One Hundred Towers Lie

2049 Century Park E #260

Standard

1,226,598

$18,236.17

4319001803

Paeifie Bell

4319001013

Plant Lie Ce

*no Site Address" 2052 Century Park E

Standard Standard

65,392 43,472

$972.20 $646.31

4319001009

Site One Lie Ce

Century Park E

Standard

3,337

$49.61

4319001010 4315019006

Site One Lie Ce

2010 Century Park E

Standard

30,057

Sumitomo

Premium

337,336

$446.87 $16,950.83

4319001

001

Suneal Century City LLC

10000 Santa Monica Blvd

Standard

94,525

$1,405.33

4319001

002

Suneal Century City LLC

10000 Santa Monica Blvd

Standard

11,200

$166.51

TOTAL:

Realty and Development

CA

2151 Avenue OfThe

Stars

15,896936

$.421,893

INSERTS TO CENTURY CITY MDP Page 5 Insert: No improvements or services under this PBID shall be performed on private property. No such work shall replace or substitute the work which any private property owner or tenant is required to perform in the District unless such work is fully disclosed to the property owners in the District and the private party obligated to perform such work is directly charged for any and all costs incurred by the District to perform such work, including but not limited to, a reasonable allocation of administrative costs incurred by the District relating to such work. Page 6 Insert: The replacement, repair and maintenance of the fountains within the Avenue of the Stars median is part of the work described in Section 3 relating to the ALCOA agreements. The Premium Zone receives a special benefit from the fountains and their replacement, repair and maintenance. The Premium Zone and no other Zone shall be assessed for such work. Page 9 Insert: (5) No surplus or savings in any budget line item shall be used to fund any other budget line item. The budget shall not be modified, replaced or amended. Budget worksheets under the following categories; Avenue of the Stars Maintenance, General Maintenance, Landscaping and Utilities, Insurance, Security, Capital Improvements, and Management & Advocacy have been prepared by the Engineer; no surplus or savings from any of these budgets/sub-budgets shall be used to fund any other budget/sub-budget and they shall not be modified, replaced or amended. (6) The budget and assessment roll include a reduction of approximately _% in the amount allocable to the property owners which border on Century Park East because they do not require and do not obtain a special benefit for work to be performed under the budget/sub-budgets for Landscaping and Utilities (other than along Santa Monica Boulevard), Security and related Management & Advocacy. The budget shall not be modified, replaced or amended without the consent of the City Council of Los Angeles, 85% of the Premium Zone (by relative assessment), Fox, 85% of the owners of property along Century Park East (by relative assessment)" and of the Standard Zone (by relative assessment).

Page 18 Insert: SECTION 9: AMENDMENTS, CLARIFICATIONS

AND ADJUSTMENTS

Amendments. In order to better assure certainty and continuity in the application of the PBID to the owners of property in the district, notwithstanding anything to the contrary contained in the PEID, this

494547.1

001378.0Q(n

Management District Plan, or otherwise, the provisions of the PBID described below shall not be subject to amendment or modification, except as expressly provided below: 1. Any 'increase in the area covered by a Zone shall require the unanimous approval of the property owners in such Zones increased and decreased by such action. 2. The following budget/sub-budgets constitute all of the categories/items of improvements and services to be rendered under the PBID and no additional budgets shall be permitted. Copies of the revised PBID Budget Summary for 2008, Operating Budget for 2008, Budget Detail Sheets for the budget and sub-budgets for 2008 are attached as SCEHDULE - I. -- [please attach the engineers budget worksheets] .- No funding shall be transferred from one budget or sub-budget to another. No increases of any of the following budgets or sub-budgets shall be permitted. Capital Improvements Enhanced Maintenance General Maintenance Landscaping and Utilities Insurance Security Management and Advocacy Avenue of the Stars Maintenance 3. All improvements, landscaping, repair, maintenance and replacements performed with respect to the medians within the Avenue of the Stars shall be performed solely under the Avenue of the Stars Maintenance Budget and shall be assessed and allocated solely to the Premium Zone. If the fountains in the Avenue of the Stars medians are replaced the cost thereof shall be borne solely by the Premium Zone and no change shall be made to the assessment for the Standard Zone property owners on account thereof. The assessment charged to the Standard Zone property owners shall not be increased on account of any deficit, actual or projected, in the budget for Avenue of the Stars Maintenance. If permitted under applicable law, a special assessment may be charged to the Premium Zone property owners to cover any such deficit, and a reduction in the assessment for the Standard Zone property owners shall be made if reserves for the services or improvements to be made to the Standard Zone should exceed 5% of the budget therefor. 4. The pedestrian bridge which crosses Avenue of the Stars shall not be subject to or included in any of the improvements or services provided by the PBID and no property owner shall be assessed for any cost related thereto. 5. No improvements or services under this PBID shall be performed on private property. No such work shall replace or substitute the work which any private property owner or tenant is required to perform in the District unless such work is fully disclosed to all the property owners in the District and the private party obligated to perform such work is directly charged for any and all costs incurred by the District to perform such work, including but not limited to, a reasonable allocation of administrative costs incurred by the District relating to such work.

2 494547.1

001378.0003

Clarifications. 1. It has been determined that the owners of property bordering on Century Park East ("CPE Owners") will not receive any special benefit from the provision of the following services/expenses under the PBID: Enhanced Maintenance Landscaping and Utilities - all, except Santa Monica Blvd. Security - all Management and Advocacy - all Correspondingly, the assessment amount and allocation for the CPE adjusted. However, these finding are not intended to exclude the participation in the Owners Association, including but not limited board and receipt of all information related to the PBID, district or the Owner's 2. As a condition to the effectiveness

Owners has or will be CPE Owners from full of directors membership Association.

of the PBID,

(i) Binding contractual

agreements that run with the land shall be obtained from the property owners that front on Avenue of the Stars ("ALCOA Parties") which shall provide that: (a) if and when the PBID is terminated or expires each of the ALCOA Parties agree to thereafter pay to the City of Los Angeles their allocable share of any amounts incurred by the City to perform any of the improvements, work or services (the "ALCOA Work") described in the 1962 ALCOA Agreement as amended and supplemented including all agreements among property owners and tenants along A venue of the Stars arising from or related to the 1962 ALCOA Agreement (collectively, the "ALCOA Agreements"), (b) each of the ALCOA Parties agree that they will not protest the establishment of an assessment district covering the properties that border on Avenue of the Stars for the payment of costs to perform the ALCOA Work, and (c) providing for the recordation of such agreements in the real property records by any owner of property in the district.

(ii) the binding agreements

shall be subject to the approval by the City, including the City Attorney and copies thereof shall be provided to the owners of property in the District concurrently with providing a copy to the City.

(iii) if the binding agreements are not obtained or approved on or before [45] days after the City Council has approved a resolution of formation for the District, this PBID shall terminate and be of further force or effect. (iv) until the binding agreements are obtained and approved, no assessments assessed.

3 494547.1

001378.0003

shall be collected or

May 27, 2008 Page 26 PART 2 - EXHIBIT B - Correspondence from proponents accepting some of the changes requested and rejection of the rest.

[attached]

493757.7 001378.0003 512512008 - 10:00 PM

Page 1 of 5 . Gordon K. Eng Prom:

[email protected]

Sent:

Wednesday,

To:

Gordon K. Eng

Cc:

Tony Canzoneri; [email protected]; [email protected]; [email protected]; [email protected]

May 14, 2008 12:30 PM

[email protected];

Subject: RE: Century City BIO- Coments to May 08 MOP

Dear Gordon: Thank you for your comments to the MDP and BID budget. While we believe that all of your essential concerns are addressed in the version of the MDP currently under review by the City Clerk's office, we would be happy to propose that the City Council adopt the following of your amendments to the MDP (and the Engineer's Report where parallel language is used): •

Replace "property owners" with "Premium Zone properties" in the Median Fountain paragraph on page 6.



Replace "sidewalk" with "street" on page 6.



Remove "and sidewalk" at the top of page 7.



Remove the following language from the Pedestrian Security and Safety paragraph on page 7: "The newly created Ambassador Guide's program supports law enforcement agencies and property owners in overall crime prevention efforts while offering a customer service orientation. The program assists in the prevention of break-ins, graffiti tags and disruptive street behavior. The Guides are also trained to direct pedestrians to civic, shopping and business destinations, and are informed on promotions and events to encourage pedestrian traffic." .



Insert "and" after "a part-time Executive Director" and remove "and an administrative assistant" in that same sentence on page 7.



Replace "will agree" with "are subject".in the Residential Parcels and the Vacant Parcels sections on page

14. With respect to your other recommendations, we feel that they are either unnecessary or inequitable to the other Century City property owners. We address each of those recommendations in tum: •

Language barring transfer of A venue ofthe Stars maintenance costs onto non-Avenue ofthe Stars properties- In light of the BID engineer's incorporation of new language protecting non-Avenue of the Stars property owners from liability for Avenue of the Stars maintenance costs, we believe that additional language to this effect is unnecessary. Specifically, the BID engineer inserted the following language on page 5 of the Engineer's Report, which protects your client from liability for Avenue of the Stars maintenance costs: "Funds earrn.arked for non-Avenue of the St;:lTSmaintenance and/or improvements shall not be used for Aven~e of the St~~i11~llh}tenl:U1c~ and/or improvements."



BID improvements on private property (p.5)- You propose language to the effect that the BID may not pay for maintenance or improvements to private property. Because state law forbids the use of BID funds on private property, the inclusion of this language js unnecessary..



Tree installation in the Avenue ofthe Stars median (p.6)- This bullet point was intended only as an example of the types of matching projects that could benefit from grants such as the MTA grant. The BID's application for matching funds for tree plantings along Avenue of the Stars-or any other BID improvement project-should be welcomed by all BID members because it would provide additional funds to the BID without detracting from the budget in any way.

5/2]/2008

Page 2 of 5 •

Fountaln maintenance (p.6)- You propose language that will make only Avenue of the Stars properties responsible for fountain maintenance. We believe this additional language is unnecessary, in light of the following language included just below where you propose similar language: "The Premium Zone receives the special benefit from the fountains and the maintenance thereof and will be assessed for said maintenance." That being said, we are willing to propose that the following sentence from the Median Fountains discussion on page 6 be amended as follows to clarify that only the Premium Zone will be assessed for capital improvements to the fountain: "Ad+ W11H~ itJ~ al1!~cipatedthat capital improvements wtlfmay be provided to both the premium and standard on)ythe premillin wln' be assessed for Avenue'ofthe Stars capital items, which include all Avenue of the Stars fountain ~inproveinerits." ..

io~es,

io~e



Special benefit to properties on Century Park East (p.7)- The BID engineer disagrees with your client's position that Century Park East property owners will receive no special benefit from the BID's provision of security, management and advocacy, or landscaping and utilities. This position is made clear in the MDP and Engineer's Report, and is reflected in the budget allocations. We reduced the budget for maintenance, and management/advocacy at the request of your client to a level that everyone, including several of your clients, seemed comfortable with at our meeting on May 1. For the reasons set forth in the MDP and Engineer's Report, properties along Century Park East are not similarly situated to FOX with respect to pedestrian security and safety. Therefore, we object to your insertion of the words "part of' and "and Century Park East properties" on page 7 to suggest that your client does not receive a benefit from these services.



Future modification ofthe budget (p.9)- The proposed insert for page 9 limiting the BID's ability to modify the budget is untenable, in light of the BID's need to maintain some degree of budget flexibility, as well as language in the MDP and Engineer's Report that allows for limited annual budget increases. That being said, the inclusion of language in the Engineer's Report that protects Standard Zone properties from paying for Avenue of the Stars maintenance ensures that your client will not have to pay for any of those costs. For the reasons set forth above we also do not agree with the proposed language under (b). In terms of the necessary percentages to alter the budget, we expect that the BID bylaws will address the issue.



Amendments. Clarifications and Adjustments proposed for inclusion (p.18)- We respectfully object to the proposed amendments, clarifications, and adjustments, and set forth our reasons below: Amendments 1. Increase in area o(BID requiring unanimous approval o(property owners- This is contrary to the express language in the MDP that automatically incorporates new developments into the BID as they are constructed. By adding new properties to the BID, everyone's assessment will go down; we therefore expect that your client would welcome this provision. Property owners with projects currently under construction have agreed to this; we don't see why your client should object. 2. Prohibition on additional budget categories and the transfer offunding tram one budget category to another- For the reasons discussed above, we think it is necessary to provide a degree of flexibility to the BID budget. As noted above, express language in the Engineer's Report prohibits the use ofnonAvenue of the Stars funds for Avenue of the Stars work. 3. Limitation on spreading costs for Avenue o(the Stars work to the Standard Zone properties- As discussed above, language has been included in the Engineer's Report that already provides this protection. Therefore, this additional language is unnecessary. 4. Exclusion ofthe pedestrian bridge from the BID- The pedestrian bridge is private property. As previously noted, state law forbids the use of BID funds for the maintenance or repair of private property. Therefore this additional proposed language is unnecessary. 5. Improvements or services to private property- As discussed above, private property may not be improved with BID funds, pursuant to state law. However, state law allows the BID to enter into third party contracts for services on private property. Any such third party contracts would need to approve pursuant to the terms of the BID bylaws. Clarifications

5/21/2008

Page 3 of 5 1. Enhanced maintenance and management/advocacy benefits to Century Park East properties- As discussed above, the assertion that properties along Century Park East do not receive any special benefit from enhanced maintenance or management/advocacy runs contrary to the determination of the BID engineer and goes against the general consensus of participants-including several Century Park East representatives-at our May 1 meeting that enhanced maintenance, including security, as well as management and advocacy should be included in the budget at the reduced level now incorporated into the MDP and BID budget. 2.

Contracts binding Avenue of the Stars properties- Properties currently paying for Avenue of the Stars maintenance should not be expected to enter into binding contractual agreements that require them to promise more than they are currently bound by under the terms of the ALCOA Agreement. We therefore cannot accept your proposed clarification that would make BID formation and operation contingent upon such contacts.

Finally, we believe the current budget, certified by the BID engineer, reflects the appropriate assessment rates and fairly spreads the costs of BID administration. Therefore, proposed amendments to the budget will not be recommended for approval. While we appreciate your input, and have sought to incorporate your comments where possible, we remind you that we've made significant changes to the BID structure and budget over the past year in an effort to reach a compromise with your clients. Key changes over the past year include the creation of three zones to better allocate assessment responsibilities and the recent significant reduction in the budget to reflect concerns over security, maintenance, and advocacy costs. As discussed above, we are happy to recommend for adoption by the City Council those of your proposed amendments that are consistent with conclusions reached at our May 1 meeting. While we hope that these additional recommended modifications will prove sufficient to your client, we leave it to you and your client to decide whether to file a protest letter at this point.

Please let me or Ursula know if you have any questions. Best, Katy

Katharine E. Young LATHAM & WATKINS LLP 633 West Fifth Street, Suite 4000 Los Angeles, CA 90071-2007 Direct Dial: +1.213.891.8019 Fax: +1.213.891.8763 Email: [email protected] j1ttp://www.lw.com

From: Gordon K. Eng [mailto:[email protected]]

Sent: Tuesday, May 13, 2008 2:06 PM

To: Young,

Katharine (LA) Cc: Tony Canzoneri; [email protected]; Kristin Lowell Schubert; Hyman, Ursula (LA); [email protected] S~bject: Century City BID- Coments to May 08 MDP . Dear Katy,

Attached is my mark-up of the MDP.

5/21/2008

Page 4 of5 .My clients appreciate the steps taken by the proponents to reduce the overall budget which has the effect of reducing the assessment for all of the owners in the District.. We feel that a number of other issues which have been raised by the CPE Consortium were not adequately addressed, as follows: 1. The allocation of costs for security, landscaping (other then Santa Monica Blvd; although we are not clear as to how there can be a "deal" with the City that it would only provide maintenance for a period of 1 year); administrative expenses (the focus of management will be on Avenue of the Stars and the services Which are not a benefit to CPE so we do not think it is fair to charge the CPE owners for anything or just a de minimus amount for this cost). Robert Held's office is working on another worksheet, similar to our last analysis of the proponent's budget, to show how we propose to equitably adjust the allocations and assessment in a way that does not increase any individual assessment. His worksheet is based on the budget format used by the proponents so if accepted I think Kristin can use it to replace the current budget and assessment roll. 2. Detailed firewall protections to prevent modifications and changes in the budgets. Now that we have worked so hard to right size the budgets and sub-budgets for the District we do not want them to be changed or else the property owners in the District will feel they have been subject to some kind of bait and switch. 3. Alcoa protections to contain all the Alcoa work in the Avenue of the Stars budget and prevent these costs from spilling over to the rest of the District. This cost protection concept holds true for any private obligation which is being absorbed by the District. The private party should not be allowed to shift its cost on the the District .. The City must also be protected from being left holding the Alcoa obligations once the PBID terminates. I have not received a red line of the changes made in the Engineer's Report but the Engineer's Report seemed to be very similar to the MDP in the last draft. Please make consistent changes in the Engineer Report if the enclosed are acceptable. I understand that Kristin had personal commitments and this may have led to her submission of the revised MDP without input or review by the CPE Consortium. However, these are important issues to my clients and I think our comments can be adopted by the proponents with little difficulty. I believe the comments are consistent with the purpose of PBID which the proponents have touted. Also please note that we have been mindful of proposing language and concepts that would not require proponents to repetition. . We have refrained from submitting a formal protest letter in to the record because my clients desired work toward a mutual and cooperative resolution of their concerns. But please note that given the speed at which proponents are driving this matter we cannot be sure if our changes will be embraced by proponents and frankly I thought some of the changes (if not in word then in concept) noted in the attachment would have been incorporated by the proponents' revision. Therefore, we may feel it necessary to file an objection letter before the City Council takes further action.

Gordon K. Eng Brown Winfield Canzoneri Abram Inc. 300 S. Grand Avenue, 15th Floor Los Angeles, CA 90071-3125 Direct Dial: 213.687.2176 Direct Fax: 213.687.1776 [email protected] www.bwcalaw.com The information contained in this e-mail may be protected by the attorney-client and/or the attorney/work product privileges and may be confidential. This e-mail message and its contents and attachments are for the sole use of the intended recipient(s). Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender bye-mail and destroy all copies of the original e-mail. To reply directly, send an e-mail to [email protected] IRS Circular 230 Disclosure: To comply with certain u.S. Treasury regulations, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this communication, including attachments, was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding any penalties that may be imposed on such taxpayer by the Internal Revenue Service. ******************************************************************************* To comply with IRS regulations, we advise you that any discussion of Federal For more

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May 27,2008 Page 27

PART 2

EXHIBIT e - ePE Owners' follow up comments.

[attached]

493757.7

001378.0003

5125/2008 - 10;00 PM

Page 1 of 5 Gordon K. Eng From:

Gordon K. Eng

Sent:

Wednesday,

To:

'Katy. [email protected]'

Cc:

Tony Canzoneri; [email protected]; [email protected]; [email protected]; [email protected]

May 14, 2008 3:19 PM

[email protected];

Subject: RE: Century City BID- Coments to May 08 MDP Dear Katy, Thanks for your reply. My clients are on board with all of the wording changes I have suggested which the proponents are willing to accept and we are in favor of the wording change you have proposed for the section describing the fountain maintenance. Thank you for making these clarifications. It appears we are apart on some of the remaining issues. I will consult with my clients and see if they still have strong feelings about them. I would like to make sure we are not misunderstanding the proponents on two related issues. The PBID has a a broad definition of the work that might be included in the general maintenance and CAPEX budgets. The District is not required to complete or undertake any of this work and can amend the described work during the term of the PBID. It was our intent to prevent dramatic changes in the work by keeping the budgets and sub-budgets from being amended. Do the proponents intend to keep this right or is the District prevented by applicable law from making dramatic changes in the work and budgets (as long as the aggregate amount of the budget is not increased)? Proponents acknowledge that if the District assumes a private maintenance obligation the private party is still charged for the cost. With regard to the landscaping budget there is a cost for maintenance of the CPW border. JMB has an obligation to maintain part of the CPW border. So if the District is picking up JMB's obligation to maintain a strip within CPW landscape border where is the charge back to JMB?

Gordon K. Eng Brown Winfield Canzoneri Abram Inc. 300 S. Grand Avenue, 15th Floor Los Angeles, CA 90071-3125 Direct Dial: 213.687.2176 Direct Fax: 213.687.1776 [email protected] www.bwcalaw.com The information contained in this e-mail may be protected by the attorney-client and/or the attorney/work product privileges and may be confidential. This e-mail message and its contents and attachments are for the sole use of the intended recipient(s). Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender bye-mail and destroy all copies of the original e-mail. To reply directly, send an e-mail to [email protected] IRS Circular 230 Disclosure: To comply with certain u.s, Treasury regulations, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this communication, including attachments, was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding any penalties that may be imposed on such taxpayer by the Internal Revenue Service.

From: [email protected]

[mailto:[email protected]]

Sent: Wednesday, May 14, 2008 12:30 PM To: Gordon K. Eng Cc: Tony Canzoneri; [email protected]; [email protected]; [email protected] Subject: RE: Century City BID- Coments to May 08 MDP

Dear Gordon: 5/2112008

[email protected];

[email protected];

Page 2 of5

Thank you for your comments to the MDP and BID budget. While we believe that all of your essential concerns are addressed in the version of the MDP currently under review by the City Clerk's office, we would be happy to propose that the City Council adopt the following of your amendments to the MDP (and the Engineer's Report where parallel language is used): •

Replace "property owners" with "Premium Zone properties" in the Median Fountain paragraph on page 6.



Replace "sidewalk" with "street" on page 6.



Remove "and sidewalk" at the top of page 7.



Remove the following language from the Pedestrian Security and Safety paragraph on page 7: "The newly created Ambassador Guide's program supports law enforcement agencies and property owners in overall crime prevention efforts while offering a customer service orientation. The program assists in the prevention of break-ins, graffiti tags and disruptive street behavior. The Guides are also trained to direct pedestrians to civic, shopping and business destinations, and are informed on promotions and events to encourage pedestrian traffic."



Insert "and" after "a part-time Executive Director" and remove "and an administrative assistant" in that same sentence on page 7.



Replace "will agree" with "are subject" in the Residential Parcels and the Vacant Parcels sections on page 14.

With respect to your other recommendations, we feel that they are either unnecessary or inequitable to the other Century City property owners. We address each of those recommendations in tum: •

Language barring transfer of Avenue of the Stars maintenance costs onto non-Avenue ofthe Stars properties- In light of the BID engineer's incorporation of new language protecting non-Avenue of the Stars property owners from liability for Avenue of the Stars maintenance costs, we believe that additional language to this effect is unnecessary. Specifically, the BID engineer inserted the following language on page 5 of the Engineer's Report, which protects your client from liability for Avenue of the Stars maintenance costs: "Funds earmarked for non-Avenue of the Stars maintenance and/or improvements shall not be used for Avenue of the Stars maintenance and/or improvements."



BID improvements on private property (p.5)- You propose language to the effect that the BID may not pay for maintenance or improvements to private property. Because state law forbids the use of BID funds on private property, the inclusion of this language is unnecessary.



Tree installation in the Avenue ofthe Stars median (p.6)- This bullet point was intended only as an example of the types of matching projects that could benefit from grants such as the MT A grant. The BID's application for matching funds for tree plantings along Avenue of the Stars-or any other BID improvement project-should be welcomed by all BID members because it would provide additional funds to the BID without detracting from the budget in any way.



Fountain maintenance (p.6)- You propose language that will make only Avenue of the Stars properties responsible for fountain maintenance. We believe this additional language is unnecessary, in light of the following language included just below where you propose similar language; "The Premium Zone receives the special benefit from the fountains and the maintenance thereof and will be assessed for said maintenance." That being said, we are willing to propose that the following sentence from the Median Fountains discussion on page 6 be amended as follows to clarify that only the Premium Zone will be assessed for capital improvements to the fountain: "~ While it is anticipated that capital improvements wtHmay be provided to both the premium and standard zones, only the premium zone will be assessed for Avenue of the Stars capital items, which include all Avenue of the Stars fountain improvements."



Soecial benefit to properties on Centurv Park East (p.7)- The BID engineer disagrees with your client's position that Century Park East property owners will receive no special benefit from the BID's provision of

5121/2008

Page 3 of5 security, management and advocacy, or landscaping and utilities. This position is made clear in the MDP and Engineer's Report, and is reflected in the budget allocations. We reduced the budget for maintenance, and management/advocacy at the request of your client to a level that everyone, including several of your clients, seemed comfortable with at our meeting on May 1. For the reasons set forth in the MDP and Engineer's Report, properties along Century Park East are not similarly situated to FOX with respect to pedestrian security and safety. Therefore, we object to your insertion ofthe words "part of' and "and Century Park East properties" on page 7 to suggest that your client does not receive a benefit from these services. •

Future modification a/the budget (p.9)- The proposed insert for page 9 limiting the BID's ability to modify the budget is untenable, in light of the BID's need to maintain some degree of budget flexibility, as well as language in the MDP and Engineer's Report that allows for limited annual budget increases. That being said, the inclusion oflanguage in the Engineer's Report that protects Standard Zone properties from paying for Avenue of the Stars maintenance ensures that your client will not have to pay for any of those costs. For the reasons set forth above we also do not agree with the proposed language under (b). In terms of the necessary percentages to alter the budget, we expect that the BID by laws will address the issue.



Amendments. Clarifications and Adjustments proposed for inclusion (p.18)- We respectfully object to the proposed amendments, clarifications, and adjustments, and set forth our reasons below: Amendments 1. Increase in area a/BID requiring unanimous approval o,[property owners- This is contrary to the express language in the MDP that automatically incorporates new developments into the BID as they are constructed. By adding new properties to the BID, everyone's assessment will go down; we therefore expect that your client would welcome this provision. Property owners with projects currently under construction have agreed to this; we don't see why your client should object. 2. Prohibition on additional budget categories and the transfer offunding tram one budget category to another- For the reasons discussed above, we think it is necessary to provide a degree of flexibility to the BID budget. As noted above, express language in the Engineer's Report prohibits the use ofnonAvenue of the Stars funds for Avenue of the Stars work. 3. Limitation on spreading costs for Avenue a/the Stars work to the Standard Zone properties- As discussed above, language has been included in the Engineer's Report that already provides this protection. Therefore, this additional language is unnecessary. 4. Exclusion a/the pedestrian bridge tram the BID- The pedestrian bridge is private property. As previously noted, state law forbids the use of BID funds for the maintenance or repair of private property. Therefore this additional proposed language is unnecessary. 5. Improvements or services to private property- As discussed above, private property may not be improved with BID funds, pursuant to state law. However, state law allows the BID to enter into third party contracts for services on private property. Any such third party contracts would need to approve pursuant to the terms of the BID bylaws. Clarifications I. Enhanced maintenance and management/advocacy benefits to Century Park East properties- As discussed above, the assertion that properties along Century Park East do not receive any special benefit from enhanced maintenance or management/advocacy runs contrary to the determination of the BID engineer and goes against the general consensus of participants-including several Century Park East representatives-at our May 1 meeting that enhanced maintenance, including security, as well as management and advocacy should be included in the budget at the reduced level now incorporated into the MDP and BID budget. 2. Contracts binding Avenue ofthe Stars properties- Properties currently paying for Avenue of the Stars maintenance should not be expected to enter into binding contractual agreements that require them to promise more than they are currently bound by under the terms of the ALCOA Agreement. We therefore cannot accept your proposed clarification that would make BID formation and operation

5/2112008

Page 4 of 5 contingent upon such contacts. Finally, we believe the current budget, certified by the BID engineer, reflects the appropriate assessment rates and fairly spreads the costs of BID administration. Therefore, proposed amendments to the budget will not be recommended for approval. While we appreciate your input, and have sought to incorporate your comments where possible, we remind you that we've made significant changes to the BID structure and budget over the past year in an effort to reach a compromise with your clients. Key changes over the past year include the creation of three zones to better allocate assessment responsibilities and the recent significant reduction in the budget to reflect concerns over security, maintenance, and advocacy costs. As discussed above, we are happy to recommend for adoption by the City Council those of your proposed amendments that are consistent with conclusions reached at our May 1 meeting. While we hope that these additional recommended modifications will prove sufficient to your client, we leave it to you and your client to decide whether to file a protest letter at this point.

Please let me or Ursula know if you have any questions. Best, Katy

Katharine E. Young LATHAM & WATKINS LLP 633 West Fifth Street, Suite 4000 Los Angeles, CA 90071-2007 Direct Dial: +1.213.891.8019 Fax: +1.213.891.8763 Email: [email protected] http://www.lvy.com

._--_._---_._--_._-_._-------_

..

_-

From: Gordon K. Eng [mailto:[email protected]] PM

Sent: Tuesday, May 13, 20082:06 To: Young, Katharine (LA)

Cc: Tony Canzoneri; [email protected]; Kristin Lowell Schubert; Hyman, Ursula (LA); [email protected] Subject: Century City BID- Coments to May 08 MDP Dear Katy, Attached is my mark-up of the MDP. My clients appreciate the steps taken by the proponents to reduce the overall budget which has the effect of reducing the assessment for all of the owners in the District. We feel that a number of other issues which have been raised by the CPE Consortium were not adequately addressed, as follows 1. The allocation of costs for security, landscaping (other then Santa Monica Blvd; although we are not clear as to how there can be a "deal" with the City that it would only provide maintenance for a period of 1 year); administrative expenses (the focus of management will be on Avenue of the Stars and the services Which are not a benefit to CPE so we do not think it is fair to charge the CPE owners for anything or just a de minimus amount for this cost). Robert Held's office is working on another worksheet, similar to our last analysis of the proponent's budget, to show how we propose to equitably adjust the allocations and assessment in a way that does not increase any individual assessment. His

5/21/2008

Page 5 of 5. worksheet is based on the budget format used by the proponents so if accepted I think Kristin can use it to replace the current budget and assessment roll. ~. Detailed firewall protections to prevent modifications and changes in the budgets. Now that we have worked so hard to right size the budgets and sub-budgets for the District we do not want them to be changed or else the property owners in the District will feel they have been subject to some kind of bait and switch . .3. Alcoa protections to contain all the Alcoa work in the Avenue of the Stars budget and prevent these costs from spilling over to the rest of the District. This cost protection concept holds true for any private obligation which is being absorbed by the District. The private party should not be allowed to shift its cost on the the District. The City must also be protected from being left holding the Alcoa obligations once the PBIO terminates. I have not received a redline of the changes made in the Engineer's Report but the Engineer's Report seemed to be very similar to the MOP in the last draft. Please make consistent changes in the Engineer Report if the enclosed are acceptable. I understand that Kristin had personal commitments and this may have led to her submission of the revised MOP without input or review by the CPE Consortium. However, these are important issues to my clients and I think our comments can be adopted by the proponents with little difficulty. I believe the comments are consistent with the purpose of PBID which the proponents have touted. Also please note that we have been mindful of proposing language and concepts that would not require proponents to repetition. We have refrained from submitting a formal protest letter in to the record because my clients desired work toward a mutual and cooperative resolution of their concerns. But please note that given the speed at which proponents are driving this matter we cannot be sure if our changes will be embraced by proponents and frankly I thought some of the changes (if not in word then in concept) noted in the attachment would have been incorporated by the proponents' revision. Therefore, we may feel it necessary to file an objection letter before the City Council takes further action.

Gordon K. Eng Brown Winfield Canzoneri Abram Inc. 300 S. Grand Avenue, 15th Floor Los Angeles, CA 90071-3125 Direct Dial: 213.687.2176 Direct Fax: 213.687.1776 [email protected] www.bwcalaw.com The information contained in this e-mail may be protected by the attorney-client and/or the attorney/work product privileges and may be confidential. This e-mail message and its contents and attachments are for the sole use of the intended recipient(s). Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender bye-mail and destroy all copies of the original e-mail. To reply directly, send an e-mail to [email protected] IRS Circular 230 Disclosure: To comply with certain U.S. Treasury regulations, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this communication, including attachments, was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding any penalties that may be imposed on such taxpayer by the Internal Revenue Service. ******************************************************************************* To comply with IRS regulations, we advise you that any discussion of Federal

tax issues

in this

For more information please go to http://www.lw.com/docs/irs.pdf ******************************************************************************* This email maycontainmaterialthatisconfidential.privileged Latham

& Watkins

5/2112008

LLP

and/or

attorney

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