By Los Angeles County Politics
Along with picking up the garbage and filling potholes, Culver City appears to have added a new municipal service: real estate investing.
The city has formally walked away from buying the Culver Steps, the downtown shopping and office complex, but it is still weighing a $103 million purchase of the vacant former Sony Pictures Animation campus next door.
City Manager Odis Jones said in an emailed statement yesterday that after months of due diligence and financial analysis, the Culver City Public Finance Authority would not pursue the Culver Steps. City Attorney Heather Baker first reported that decision out of closed session at the Sept. 14 council meeting, according to Culver City Crossroads.
“Following that analysis and continued discussions with the CPFA Board of Directors, we determined that acquiring The Culver Steps would not be in the best interest of the CPFA at this time,” said Jones, not mentioning the former Sony Pictures Animation campus purchase.
On Sept. 28, the City Council and the finance authority’s board unanimously approved a purchase option on the campus at 9050 Washington Blvd., according to the Culver City Observer. The authority agreed to pay $375,000 in non-refundable earnest money and up to $500,000 for due diligence, including appraisal, environmental, structural and traffic reviews. It has until Feb. 28, 2027, to decide whether to buy, and the price must not exceed fair market value as confirmed by an independent appraisal.
The city is evaluating the campus for public parking, recreation, tourism, jobs, new revenue and possible affordable or workforce housing, according to Connect CRE, citing the Culver City Observer. City staff said the authority would likely finance any purchase with revenue bonds, with no current impact on the city’s General Fund, the Culver City News reported.
The campus has lost much of its value since Sony Pictures Animation moved out in 2024. Hackman Capital Partners bought it for $160 million in 2021. After Hackman defaulted, Fortress Investment Group bought out the roughly $104 million unpaid mortgage and took title through a Sept. 10 trustee’s sale for $71 million, according to WestsideToday. The city’s option price roughly matches the debt Fortress took over.
Before the auction, developer Michael Hackman joined Jones in a closed council session in June to negotiate terms and price, the Los Angeles Business Journal reported.
Hackman’s troubles extend well beyond Culver City. This year, his firm agreed to turn over Radford Studio Center in Studio City to Goldman Sachs after defaulting on a $1.1 billion loan, and Deutsche Bank has filed a $340 million pre-foreclosure action against his Kaufman Astoria Studios in New York, according to PincusCo.
The Culver Steps, also a Hackman property, have been on the market since May, Culver City Crossroads reported.
A letter published in the Culver Crescent questions the city’s approach. It argues that the finance authority, which the council created in April, lets the city commit General Fund money to decades of lease payments without voter approval, payments that would compete with police, fire, streets and parks. It also notes that the city borrowed $42.69 million in June through bonds sold directly to one bank without competitive bidding, which the letter calls the city’s first such sale in more than 15 years.
Councilmember Yasmine Imani McMorrin has pressed for the deal to play out in public.
“Just to reiterate that any future city council action to purchase or acquire any of the properties listed on the agenda will be discussed and acted upon in open public meeting,” said McMorrin at the Sept. 14 meeting, according to Culver City Crossroads.
The council approved the finance authority’s structure and planned uses of bond proceeds on a 4-1 vote in May, according to Culver City Crossroads. City officials have said the authority is meant to help fund affordable housing, infrastructure, parks and other capital needs.
City staff will return to the council and the finance authority’s board with findings and any recommendation before the option expires in February.
