By John Mirisch
In 2021, as the lone dissenting councilmember, I voted against Cain International’s multi-billion dollar condo/hotel development One Beverly Hills.
Although I am a huge fan of Lord Norman Foster, who designed the project, the main reason I voted against it was that I felt the Development Agreement (DA) with the City was heavily weighted toward the developer. In short, since the City wasn’t receiving sufficient compensation for the extraordinary benefits that the developer, Cain International, was seeking, it was a bad deal.
True, I felt and do feel that the project itself, with a 31-story and a 28-story condo tower, as well as a 10-story hotel tower were out of scale for the town I had grown up in, which had always felt like Mayberry RFD. But if a project of such magnitude were to be built anywhere in town, the location at the border of Los Angeles, next to Century City with its skyscrapers, was really the one place where it made sense.
If the Development Agreement for the initial project had been more balanced, I would have voted in favor of the project in 2021, despite my qualms about height and density.
During the summer of 2024, Cain came to the City requesting the creation of Community Facilities District (CFD), which would allow the City to issue up to $550 million in tax exempt bonds, which would be used to reimburse Cain for the cost of building infrastructure to serve the project. Cain’s obligation to build the infrastructure was already outlined in the 2021 DA, so the creation of the CFD would represent a significant financial boost to the developer. The bonds would be repaid in great part by the future owners of the project’s multimillion condos.
At a public Council meeting earlier in the summer, yet again as the sole councilmember, I expressed disapproval of the proposed CFD. The reason was similar to my opposition to the 2021 DA: from my perspective, this was another bad deal for the City. While the developer’s lobbyists rallied support for the creation of the CFD among a cadre of ex-mayors, commissioners and “pro-business” interests such as the Chamber of Commerce, there was significant grass-roots opposition among “ordinary” residents who felt that, yet again, the City was simply doing the bidding of developers without any solid reasons.
Last month, on August 19, 2025, along with the rest of the Council on a 4-0 vote (one of the councilmembers had recused himself), I voted to approve the creation of the contentious One Beverly Hills CFD.
What happened?
The initial proposal for the creation of the CFD would have given the City the use of $10 million from the bond issuance for eligible infrastructure upgrades. This deal had been negotiated by City staff, who tried to present the amount as an “unprecedented” public benefit. City staff may be competent in many fields, but clearly when it comes to negotiating with developers on behalf of the City, they are both unqualified and outgunned.
After my public opposition to the initial proposal, I was contacted by Jonathan Goldstein, Cain’s CEO. He noted my concern with the CFD proposal and asked if I wanted to talk. I told him I’m always open to discussions.
If the $10 million figure wasn’t enough, he asked, then what would I feel would be a fair sum? I told him that the money up front was not the issue for me: any lump payments would disappear down any number of the City’s budgetary black holes and would be a temporary fix, at best.
Many of the letters in favor of creation of the CFD expressed the view that the success of the project would benefit the City. I didn’t and don’t disagree with that. We definitely want One Beverly Hills to be successful. But, conversely, the success of the City – the ability of the City to fund on an ongoing basis critical City services, including Police, Fire, Schools, parks, street repair etc. etc. — would also benefit One Beverly Hills and its future guests and residents. The point I made to Jonathan was that it goes both ways. He agreed.
I also told Jonathan that while I appreciated his reaching out to me, I was very clear that I thought Cain had the three votes it need to move forward with the CFD. He probably didn’t need my vote. “That’s not how I look at it,” said Jonathan, who expressed a willingness to come to an understanding that I also felt was fair for the City, not just for the developer.
I wanted to propose something that would benefit the City, but would have only a marginal impact, at most, on Cain’s prospects for success. In short order, we were able to reach an agreement: in addition to the $10 million from the bond sales the City itself could use for eligible infrastructure improvements, the City would get an additional 1% EMS (Environmental Mitigation and Sustainability) fee from the second sale of the condo units, with the exclusion of 20 of the 177 units for which pre-sale agreements had already been made with Cain. EMS fees have the same character as documentary transfer taxes and provide ongoing revenue to the City, as the units turn over. The enhanced EMS fee means that the City still receives a 2% fee upon first sale, but 4% — rather than the 3% from the DA — upon second sale for 157 of the units (remaining at 3% for the 20 pre-sale units).
At the Council meeting, another option was presented, namely that the City would receive upon bond issuance a flat $20 million rather than $10 million plus the enhanced second-sale EMS fee. It seems this second option was presented at the request of another councilmember, but when looked at side-by-side, the benefits to the City weren’t even close. The enhanced EMS fee option would provide additional revenue to the City of between $74 million to $140 million through 2055, with the ongoing revenue continuing after that in perpetuity each time a unit sells.
In addition to the enhanced EMS fee and the $10 million for the City to cover eligible uses after issuance of the bonds, Mayor Sharona Nazarian was able to negotiate from the dais an additional $5 million for the City to be added to the $10 million.
Fortunately, the Council voted unanimously for the deal I had negotiated with Cain, with the addition of the $5 million Mayor Nazarian was able to add on at the meeting.
In over 15 years of dealing with land use projects on the Council, I’ve often said that developers are like cholesterol: there’s the bad kind and there’s the good kind. In agreeing to conditions that balance the benefit to Cain with a significant benefit to Beverly Hills, Jonathan Goldstein and Cain have shown themselves to be like Omega 3-boosted HDL cholesterol.
At the end of the day, approval of the One Beverly Hills CFD is an example of an approval process that worked for both sides.
As Mayor Nazarian has said:
“In Beverly Hills, we must lead with vision as we plan for the future of our City.
I’m delighted that we were able to reach a unanimous vote that not only ensures the completion of this incredibly stunning and innovative anchor project, but also delivers meaningful public benefits to our community.
The additional upfront funding and EMS feels 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.”
As the lone dissenter because I’ve felt the City was effectively getting bad deals, I’ve been on the losing side of votes on numerous occasions. As the author of a HuffPost piece entitled “The Art of the Municipal Deal” over eight years ago, I’m gratified that our Council, in this case thanks to the willingness of the developer to see both sides, was finally able cut a deal with commensurate direct benefits to the City. Win-Win is truly possible, but only if we are willing to say “no” to one-sided agreements. As former City Manager Rod Wood once said: “If you’re not willing to say ‘no,’ it’s not negotiating; it’s begging.”
Let this also be a lesson to all the community members who wrote to the Council, urging the Council to approve the CFD under the initial bad deal, without commensurate public benefits. One former mayor even wrote: “The question is not why should we approve the CFD; the question is why shouldn’t we?”
Leaving up to $140 million or more (present day value) plus recurring revenue, i.e. the future value of an additional 1% EMS of the units would seem to answer that question. In fact, every single individual who urged the Council to accept the initial proposal for creation of the CFD was effectively willing to leave major public benefits on the table.
Hopefully, there are lessons learned here. Cities, municipalities, counties and other public entities have been notoriously bad about negotiating public benefits with private developers. That needs to change.
It can be done.
John Mirisch was elected to the Beverly Hills City Council in 2009 and has served three terms as mayor. He is currently Beverly Hills Vice Mayor.