John Kite: Hey, Floris, it’s John. Let me start that real quick, though, on the land. I want to be clear what we’re doing there, because it’s very important that the market understand. We have an entitled land bank that has significant value. That when you, again, go back to our investor presentation and look at the page that goes through NAV, I think, which is page, I’m turning it right now, Page 7, you’ll see that we’re not including that and how we’re kind of handicapping the stock prices. That being said, it doesn’t mean that we’re not working on it. It doesn’t mean that we’re not actively engaged in having that be the next level of upside. And we’ve been pretty clear about that that we are going to be CapEx light in the development program, while we’re spending $200 million at very, very high returns in the leasing program.
So I wanted to give you that basis before we dug into anything particularly specific. Again, I think it’s just another area that is very misunderstood in the sense of what we’re doing to prepare to create that value. But, Tom, you want to…
Tom McGowan: Yes. So if you take a look at our supplement there’s seven properties that are identified and then in addition to that, we have Legacy and Lakewood that are also on our list. So if you take a look at those nine properties, we have about 76 acres that are able to be developed, and they would be developed in a form of different styles and different approaches with JVs, maybe a potential sale ground leases. So we’re being very thoughtful of the best way to do that. But if you take a look at apartment counts that can be done there, retail, office, et cetera, it offers a lot of opportunities as we’re moving forward. And that’s going to be a big goal as we move into 2024 is moving those to the next level to be in an income generation position.
Floris van Dijkum: And the movie theatre in California.
Tom McGowan: Yes. So on the movie theatre in California, it’s Ontario, a little bit east of LA. We’re in the process of moving forward with a rezoning process. And that rezoning objective is to ultimately put the property in a position to sell to various multi-family developers. So we’re making great progress there. But it’s a situation that it could at some point generate 800 multifamily units in an area that is very much starved for that type of housing.
John Kite: The thing about that, Floris, we already today have an economic interest in just under 1,700 units that are open and operating. And the one Loudoun project alone is another 1,700 units of potential growth. But I want to be clear. And so the reason we don’t bring up Ontario is it’s a long process, it’s got to get rezoned, but the value creation is enormous, as you might imagine. So I think it all kind of comes back to the thematic that we have an incredible next couple of years ahead of us in terms of value creation. But the great part about that is the great majority of it is just straight up leasing. And we’ve been getting 30% returns on capital and 30% rent spread. So we’ll do that all day long. Eventually we’ll run out of it because we’re going to lease it up. So we have this other opportunity down the road. So again, I think it’s important that people understand that this will continue.
Floris van Dijkum: Thanks, John.
John Kite: Thanks.
Heath Fear: Thanks, Floris.
Operator: Thank you. Our next question comes from Craig Mailman with Citi. Your line is open.
Craig Mailman: Hey, guys, quickly on City Center. I’m going back through the presentation you guys did the end of October, then in NARI. Was that included in the headwinds that you had kind of pointed out for 2024?
Heath Fear: Craig, hi, this is Heath. That was not quoted. Again, they failed to renew at the end of November, Craig. So we were in discussions with them and our hope was that we were going to get them to renew and it just didn’t turn out that way. So they left at the end of November, which is why it didn’t appear on our page in early November.
Tom McGowan: Yes. And that was just a basic decision where they decided to close multiple New York area units and that was the cause.
John Kite: Hey, Craig, it’s John. The only reason we’re talking about this and calling it out, we wouldn’t normally talk about one tenant, obviously, but you got a situation here where you have one tenant, a very large tenant, like 80,000 square feet, and the rent is obviously significant if it’s a $0.02 impact. So, I think this is an aberration. I don’t think. I know it’s an aberration. And good thing is, as Tom said earlier, this is good real estate. It’s hard to find a slot like this in a major metro market and by the way, these guys were doing significant revenue. I mean, the rent structure didn’t work for them, but the good news is, we have a choice to make, not who is it going to be? We actually have a choice. So, we feel good about it. It is what it is. It’s very unique. And as I said, it’s an aberration.
Craig Mailman: So the tenant that you’re talking to, is that – does it stay movie theater, and that’s why maybe there’s a potential that it could commence sometime in 2024? Or is it an alternative use?
Tom McGowan: Yes. It is an East Coast theater operator. And this went through a recent renovation. So in terms of conversion to be able to open the store, you’re down to projectors and some various FF&E items. So we are going to be able to turn this rent on very quickly.
