PURPOSE

The purpose of this item is to seek Council approval of a substitution of a childcare needs survey obligation with a childcare payment obligation under the Development Agreements between the City and Warner Bros. Entertainment Inc. for the Main and Ranch Studio Lots and the approval of a related Release Agreement.

BACKGROUND

On November 27, 1995, Warner Bros. Entertainment Inc. and the City of Burbank entered into two separate Development Agreements, one for the Main Lot and one for the Ranch Studio Lot, approving certain development on each site.  An obligation in each of those agreements requires Warner Bros. Entertainment to conduct a childcare needs survey every five years; specifically the language reads:

3.4       Child Care Needs Survey.  Developer agrees to provide on-site child care as needed by its employees.  Developer agrees to conduct a survey of the child care needs of its employees every 5 years following the Effective Date of this Agreement.  A written report including the survey instrument and results shall be submitted to the Parks and Recreation Department.  In the event the survey shows that Developer is not meeting the child care needs of its employees, Developer agrees to provide the additional on-site child care facilities.  Developer shall maintain a list of off-site child care facilities in the area to assist any employees who need referral information on child care facilities.

At the present time, halfway through the twenty year term of the development agreements, Warner Bros. Entertainment has developed little of its entitlements authorized under the agreements. It currently operates an existing child care center that serves over 100 children and it provides an updated list of off-site child care facilities in the area for its employees. However, Warner Bros. Entertainment has not conducted the childcare needs survey required under the development agreements. It is in full compliance with all other provisions under the agreements.

DISCUSSION

The parties have a difference of opinion over the interpretation of Section 3.4, specifically as to the actions required once a survey is conducted. In order to resolve these differences, Warner Bros. Entertainment proposes to substitute the childcare needs survey provision obligation with a childcare payment obligation under the development agreements. The proposal involves a one-time fee payment of $150,000.00 by Warner Bros. Entertainment to help fund new childcare facilities or community programs as determined by the City. This fee amount is commensurate to fees paid by other developers in the City for childcare.  The developer of the Media Studio North project included the $100,000 child care obligation for that project in their pro forma for the Cottages development and built the shell for what is now the Burbank Housing Corporation Children�s Center.  The developer for the Empire Center Project paid $100,000 to the City for the development of childcare facilities in-lieu of constructing a center on-site.

A release agreement between the parties provides for the one time payment of $150,000.00 as full compliance with provision 3.2 in each development agreement, and once paid, releases Warner Bros. Entertainment from all obligations to comply with that section.  

RECOMMENDATION

Staff recommends that the City Council approve the substitution of a childcare needs survey obligation with a childcare payment obligation under the Development Agreements with Warner Bros. Entertainment Inc. for the Main and Ranch Studio Lots and the approval of a related Release Agreement.

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