Other Commitments And Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Other Commitments and Contingencies

As of September 30, 2019, the Company had the following future commitments to fund development projects:



	Number of projects	Commitment (in millions)
Entertainment	6	$	31.2
Recreation	2	25.1
Education	1	3.9
Total	9	$	60.2

Development costs are advanced by the Company in periodic draws. If the Company determines that construction is not being completed in accordance with the terms of the development agreement, it can discontinue funding construction draws. The Company has agreed to lease the properties to the operators at pre-determined rates upon completion of construction.

The Company has certain commitments related to its mortgage notes and notes receivable investments that it may be required to fund in the future. The Company is generally obligated to fund these commitments at the request of the borrower or upon the occurrence of events outside of its direct control. As of September 30, 2019, the Company had four mortgage notes and notes receivable with commitments totaling approximately $11.9 million. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.

At December 31, 2018, the Company had $5.3 million in other assets and $16.1 million in other liabilities related to the Company's payment guarantees of two economic development revenue bonds. During the nine months ended September 30, 2019, the Company prepaid in full the two economic development revenue bonds totaling $24.8 million and the other asset and liability related to the Company's obligation to stand ready to perform under the terms of the guarantees were extinguished. The Company took ownership of and recorded the leasehold interest and improvements for the theatre in Louisiana that secured one of the bonds at fair value which approximated $14.0 million at September 30, 2019. No gain or loss was recognized on these transactions. At September 30, 2019, the Company does not have any remaining guarantee assets or liabilities.

In connection with construction of its development projects and related infrastructure, certain public agencies require posting of surety bonds to guarantee that the Company's obligations are satisfied. These bonds expire upon the completion of the improvements or infrastructure. As of September 30, 2019, the Company had three surety bonds outstanding totaling $30.4 million.

Early Childhood Education Tenant

Since 2017, the Company and Children’s Learning Adventure USA, LLC (CLA) have been involved in lengthy negotiations and legal proceedings regarding a restructuring of CLA and the ultimate disposition of the properties owned by the Company and leased to CLA. As a result of those negotiations, the Company and CLA have undertaken a process that provides for the continuation of the lease to CLA and the transfer of the properties one at a time to Crème de la Crème (Crème) as it receives the necessary licenses and permits for each property. In February 2019, the Company entered into new leases with Crème on all of the 21 operating CLA properties owned by the Company. These leases are contingent upon the Company delivering possession of the properties to Crème and include different financial terms based on whether CLA delivers to Crème the assets associated with the in-place operations of the school. The leases with Crème have 20 year terms that commence upon Crème beginning operations of the schools. Additionally, both the Company and Crème have early termination rights based on school level economic performance. During the nine months ended September 30, 2019, CLA transferred 13 of the properties to Crème. Consideration provided by the Company for such transfers during the nine months ended September 30, 2019 included the release of CLA for past due rent obligations related to the transferred properties, previously fully reserved by the Company. Additional consideration was paid of approximately $9.2 million which includes approximately $2.6 million for equipment used in the operations of these schools recorded in notes receivable and due from Crème, and $6.6 million recognized in transaction costs. Subsequent to September 30, 2019, four additional properties were transferred to Crème, resulting

in a transfer of 17 of the properties to Crème since commencement of the process. As of October 30, 2019, there are four properties remaining to be transferred from CLA to Crème.

CLA continues to cooperate with Crème by providing access to facilities, staff and information. With this assistance, Crème has made substantial progress transferring the properties and with its license applications and preparations to begin operating the remaining four schools. This process is expected to be complete before the end of 2019. There can be no assurance that Crème will timely obtain necessary licenses and permits, and therefore there can be no assurance as to the outcome of the contemplated transaction or whether some or all of the remaining properties will be transferred to Crème with in-place operations. In addition, there can be no assurance that CLA will continue to cooperate with Crème and provide access to personnel and information needed to acquire the operations of the remaining properties. If the Company is unable to transfer the remaining four properties to Crème with in-place operations, the Company intends to take possession of the properties and transfer them without operations. If some or all of the four remaining schools are not transferred to Crème with in-place operations, there will be a delay in re-opening such schools and a corresponding reduction in near term rents from Crème.