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Transactions with Curbline Properties | 12 Months Ended
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Dec. 31, 2024
Transactions and Separation of Properties [Abstract] |
Transactions with Curbline Properties | 13. Transactions with Curbline Properties On October 1, 2024, the Company completed the spin-off of Curbline Properties. To govern certain ongoing relationships between the Company, the Operating Partnership and Curbline Properties after the distribution, and to provide for the allocation among the Company, the Operating Partnership and Curbline Properties of the Company's assets, liabilities and obligations attributable to periods both prior to and following the separation of Curbline Properties and the Operating Partnership from SITE Centers, the Company, Curbline Properties and the Operating Partnership entered into agreements pursuant to which each provides certain services and has certain rights following the distribution, and Curbline Properties, the Operating Partnership and SITE Centers indemnify each other against certain liabilities arising from their respective businesses. The Separation and Distribution Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Shared Services Agreement and other agreements governing ongoing relationships were negotiated between related parties and their terms, including fees and other amounts payable, may not be the same as if they had been negotiated at arm’s length with an unaffiliated third party. Separation and Distribution Agreement The Company, Curbline Properties, and the Operating Partnership entered into the Separation and Distribution Agreement, which sets forth, among other things, the Company’s agreements with Curbline Properties and the Operating Partnership regarding the principal transactions necessary to separate Curbline Properties and the Operating Partnership from SITE Centers, including providing for the allocation among the Company, Curbline Properties and the Operating Partnership of the Company’s assets, liabilities and obligations attributable to periods both prior to and following the separation of Curbline Properties and the Operating Partnership from SITE Centers. Furthermore, the Separation and Distribution Agreement governs the rights and obligations among the Company, Curbline Properties and the Operating Partnership regarding the distribution both prior to and following the completion of the separation. The Separation and Distribution Agreement contains obligations for the Company to complete certain redevelopment projects at properties that are owned by Curbline Properties. As of December 31, 2024, such redevelopment projects were estimated to cost $32.9 million to complete which is recorded in Amounts payable to Curbline in the Company’s consolidated balance sheets. Tax Matters Agreement The Company entered into a tax matters agreement, or the Tax Matters Agreement, with Curbline Properties and the Operating Partnership that governs the respective rights, responsibilities and obligations of the Company, Curbline Properties and the Operating Partnership with respect to various tax matters. Pursuant to the Tax Matters Agreement, (i) the Company (a) represented that, commencing with its taxable year ending in December 31, 1993 through its taxable year ending on December 31, 2023, the Company was organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, or the Code and (b) covenanted to qualify as a REIT under the Code for its taxable year ending December 31, 2024 (unless the Company obtains an opinion from a nationally recognized tax counsel or a private letter ruling from the U.S. Internal Revenue Service, or IRS, to the effect that the Company’ failure to maintain its REIT status will not cause Curbline Properties to fail to qualify as a REIT) and (ii) Curbline Properties covenanted to (a) be organized and operated so that it will qualify as a REIT for its initial taxable year ending December 31, 2024 and (b) elected to be taxed as a REIT commencing with its initial taxable year ending December 31, 2024. Employee Matters Agreement In connection with the separation and distribution, the Company entered into an employee matters agreement, or the Employee Matters Agreement, with Curbline Properties and the Operating Partnership that governs the respective rights, responsibilities, and obligations of the Company, Curbline Properties and the Operating Partnership after the separation with respect to transitioning employees, equity plans and retirement plans, health and welfare benefits, and other employment, compensation, and benefit-related matters. The Employee Matters Agreement also generally provides that the Company and Curbline is each responsible for the employment and compensation of its own employees and for the costs associated with providing its employee’s health and welfare benefits and retirement and other compensation plans. Shared Services Agreement The Shared Services Agreement provides that, subject to the supervision of the Company’s Board of Directors and executives, Curbline and the Operating Partnership or its affiliates will provide the Company (i) leadership and management services that are of a nature customarily performed by leadership and management overseeing the business and operation of a REIT similarly situated to the Company, including supervising various business functions of the Company necessary for the day-to-day management operations of the Company and its affiliates and (ii) transaction services that are of a nature customarily performed by a dedicated transactions team within an organization similarly situated to the Company. The Shared Services Agreement also requires the Company to provide the Operating Partnership and its affiliates the services of its employees and the use or benefit of the Company’s assets, offices and other resources as may be necessary or useful to establish and operate various business functions of the Operating Partnership and its affiliates in a manner as would be established and operated for a REIT similarly situated to Curbline Properties. The Operating Partnership has the authority to supervise the employees of the Company and its affiliates and direct and control the day-to-day activities of such employees while such employees are providing services to the Operating Partnership or its affiliates under the Shared Services Agreement. The agreement also provides Curbline Properties an option to lease a portion of the Company’s Beachwood headquarters which is exercisable until the earlier of the three-year anniversary of the agreement or certain terminations of the agreement as noted below. The fair value of the services provided to Curbline Properties, which was in excess of the fees received by and the fair value of the services received by the Company, is reflected as $0.5 million of additional fee income within Fee and Other Income and $0.5 million of expense within Transaction Costs and Other Expense, in the Company’s consolidated statements of operations for the year ended December 31, 2024. The Operating Partnership pays the Company a fee in the aggregate amount of 2.0% of Curbline’s Gross Revenue (as defined in the Shared Services Agreement) during the term of the Shared Services Agreement to be paid in monthly installments in arrears no later than the tenth calendar day of each month based upon Curbline Properties’ Gross Revenue for the prior month. There is no separate fee paid by the Company in connection with the provision of services by the Operating Partnership or its affiliates under the Shared Services Agreement. Unless terminated earlier, the term of the Shared Services Agreement will expire on October 1, 2027. In the event of certain early terminations of the Shared Services Agreement, the Company will be obligated to pay a termination fee to the Operating Partnership equal to $2.5 million multiplied by the number of whole or partial fiscal quarters remaining in the Shared Services Agreement’s three-year term (or $12.0 million in the event the Company terminates the agreement for convenience on its second anniversary). Other Curbline Properties owns two properties subject to ground leases with the Company. The Company owns a portion of three properties subject to ground leases with Curbline Properties. No payments are due under these leases. These five properties are governed by Declarations of Easements, Covenants and Restrictions under which the declarant is responsible for the common area maintenance and of the shared common areas and real estate taxes of combined parcels and the other party is required to reimburse the declarant for its proportionate share of the expenses. Summary For the year ended December 31, 2024, the Company recorded in Fee and Other Income on the Company’s consolidated statements of operations $0.6 million which represents 2% of Curbline’s Gross Revenue and $0.5 million for the incremental fair value of services provided to Curbline. Amounts payable to Curbline and amounts receivable from Curbline as of December 31, 2024, under the agreements described above, aggregated $33.8 million (including obligations to complete redevelopments) and $1.8 million, respectively.

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