One Beverly Hills, the development project underway at the southwest intersection of Santa Monica and Wilshire Boulevards, will receive up to $550 million in funds generated through city-issued bonds in the coming years. The decision came following a public hearing and vote by the Beverly Hills City Council at its Aug. 19 meeting.
The council unanimously approved the request of developer Cain International (“Cain”) to establish a Community Facilities District (CFD) including two improvement areas within One Beverly Hills, to issue the requested bonds and to levy special taxes on entities within the CFD to repay those bonds.
The bond authorization is broken down into two parts. Cain has requested approximately $315 million in net proceeds to reimburse the cost of constructing the approved public improvements. The city has determined that a gross bond authorization of $390 million is necessary to generate this amount. The remaining $160 million will facilitate a future City Council’s ability to finance major repairs, replacements or enhancements to public infrastructure in proximity to the One Beverly Hills project site.
Councilmember Craig Corman recused himself from the discussion and vote because he is a member of a nearby country club.
Cain will cover all costs related to the creation of the CFD and bonds. In addition, the city will receive a $15 million contribution from the developer to be used at the city’s discretion, with certain limitations, as well as an Environmental Mitigation and Sustainability fee between 2% and 4%.
Beverly Hills Mayor Sharona Nazarian negotiated the contribution up from $10 million during the Aug. 19 meeting. According to Jeff Muir, the city’s director of finance, the contribution will be paid when the first series of CFD bonds are issued.
Nazarian reflected on the significance of the council’s actions in a statement to the Courier.
“In Beverly Hills, we must lead with vision as we plan for the future of our city,” she said. “I’m delighted that we were able to reach a unanimous vote that not only ensures the completion of this unique and important anchor project, but also delivers meaningful public benefit to our community. The additional upfront funding and EMS fees will provide critical resources to continue strengthening public safety, investing in infrastructure upgrades, and enhancing the quality of life for our residents for generations to come. We are grateful for this partnership.”
Cain’s Managing Director Larry Green told the Courier in a statement, “We are pleased the city has taken this important step toward establishing a Community Facilities District, a key part of the public improvements for the One Beverly Hills project. This unanimous vote reflects not only the strong partnership between Cain and the city of Beverly Hills, but also the incredible support of the community that made this milestone possible. With the CFD in place, we will be building best-in-class infrastructure that delivers meaningful benefits to the community, including enhanced safety and security, improved streets, and upgraded public spaces. The council’s action demonstrates a shared commitment to the city’s future and ensures continued progress on this transformative development. We thank the Mayor, Vice Mayor, and Councilmembers for their partnership, and we are grateful to the community for their support as we work together to advance One Beverly Hills.”
One Beverly Hills is a mixed-use project on a 17.5-acre parcel that encompasses the Beverly Hilton and Waldorf Astoria Beverly Hills. Once complete, the development will include a new Aman Hotel, two residential towers, boutiques, casual dining, a conference center and approximately 10 acres of botanical gardens and open space.
The development broke ground in February 2024 and is expected to be completed in 2028.
Cain petitioned the city in the fall of 2024 to form a CFD to assist with financing certain elements of the project, including public infrastructure improvements and ongoing maintenance services. According to representatives for the project who spoke at the Aug. 19 meeting, the amount requested through bonds accounts for 3% of the project’s total financing.
Beverly Hills residents who live outside of the CFD will not incur any taxes related to the bonds, and no money will come out of the city’s general fund. If the developer defaults or goes into bankruptcy, the city will not be liable for the bonds.
The proposal falls under the state’s Mello-Roos Community Facilities Act, which allows local agencies to finance public improvements and services through the establishment of CFDs and special taxes levied only on properties that will benefit from the improvements.
In a letter to the city, former Assembly Speaker Pro Tempore Mike Roos, who co-authored the act with then-Senator Henry Mello, said that the city’s bonds plan is in accordance with the intent of the legislation.
“I commend your City Council for considering this prudent and effective financial tool,” Roos wrote. “Your approach is entirely consistent with the intent and protective nature of Mello-Roos and it reflects a commitment to smart growth and fiscal responsibility that will benefit your community for generations to come.”
Infrastructure improvements covered by the bonds will include work on such facilities as roadways, tunnels, parks, bike trails and traffic signals. Services and incidental expenses would include the maintenance, design, landscaping and repair of certain facilities.
During public comment, residents spoke both in favor and against the issuance of bonds. Those in favor emphasized the fact that the city will not incur any debt, and that the financing will support a development of which many in the city are in favor.
Those opposed argued that the developer appeared to be asking for a large sum of money and it was unclear what the city would receive in return.
The City Council will hold a second reading and adoption of the special tax ordinance on Sept. 9. Bonds will not be issued until the project is nearer to completion.
