Page 379 - FY 2022-23 Proposed Budget

STAPLES ARENA FUNDING AGREEMENT RECONCILIATION

The Crypto.com Arena, previously known as the Staples Center, is a sports and entertainment complex located adjacent
to the Los Angeles Convention Center. The City entered into various agreements with the Arena Developer to advance
approximately $70 million towards the project. Pursuant to the Gap Funding Agreement between the City and the
Developer, the Developer is obligated to fully offset the City's costs for debt service on bonds issued for the Arena,
reimbursement for property conveyed to the Developer, and compensation for loss of interest earnings on cash
advanced toward the project. The Agreement specifies certain credits that will offset the Developer's obligations to the
City. This schedule serves as an accounting of the Developer's obligations and offsetting credits.

Actual Estimated Budget
2020-21 2021-22 2022-23
OBLIGATIONS
$ 3,458,930 $ 3,453,000 Arena Debt Service *............................................................... $ 3,445,795
730,000 13,825,000 City Proceeds Obligation......................................................... --
451,830 452,000 City Property Obligation........................................................... 451,830
$ 4,640,760 $ 17,730,000 Total Obligations.................................................................. $ 3,897,625

CREDITS
$ 1,987,663 $ -- Excess Allowable Credits from Prior Period............................ $ --
1,031,024 6,000,000 Gross Receipts from Arena Admissions Fee........................... 8,000,000
182,056 (598,000) Shortfall Prepayment per Amendment No. 1........................... (648,994)
130,759 500,000 Incremental Convention Center Parking Revenue................... 1,000,000
-- 13,825,000 City Proceeds Payment........................................................... --
59,851 30,000 Interest Earnings..................................................................... 94,153
$ 3,391,353 $ 19,757,000 Total Credits........................................................................ $ 8,445,159

$ 1,249,407 $ (2,027,000) Obligation/(Credit) **............................................................... $ (4,547,534)

*Debt payments are budgeted within the Capital Finance Administration Fund, with the Staples Arena Trust Fund as the source of funds.
Actual cash payment to Trustee may vary from budgeted amount due to interest earnings.
**The 1998 Gap Funding Agreement authorized the Staples Developer to offset the repayment obligations with certain allowable credits.
When the allowable credit exceeds the obligation amount, the Staples Developer is allowed to carry the credit forward in the following
fiscal year. In 2003, Amendment No. 1 to the Gap Funding Agreement authorized the Staples Developer to prepay its repayment
obligations. In exchange for the City's agreement to modify the credit enhancement requirements, the Staples Developer paid the City
$16.5 million, comprised of $14.7 million for estimated shortfalls and $1.8 million for additional inducement.

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