WHEREAS, pursuant to the

the

City

obtained an

independent appraisal of the

on

property; and WHEREAS,

pursuant to Sections 142-421

held

82-39 of the Code

requirements of Section
fair

the

of

City,

market or rental value of its

22,1999,after a duly noticed public hearing

through 142-425 of the Code of the
June

the proposed private use of the land owned by the City and zoned
GU government use district,and in connection with such review the Planning Department prepared an
analysis using the criteria set forth in

City, the

Planning Board reviewed

Section 82-38

of the

Code

of

the City;and WHEREAS, the

aforesaid public hearings on the Development Agreement and the Lease have been duly noticed and held and
the Mayor and City Commission hereby find and

determine

that it is in

the best interest of the

City to enter into the Development Agreement and the Lease. NOW,

THEREFORE, BE IT DULY RESOLVED BY THE MAYOR

COMMIS ION OF
that the

AND

CITY

It is hereby
THE CITY OF MIAMI BEACH, FLORIDA, as follows: 1.
set
matters
forth in the recitals are true and

determined

and declared

correct

and they are hereby incorporated as part of this Resolution. 2.

Mayor
The
and City Commission hereby approve the Development Agreement on second reading and
approve the Lease Agreement substantially in the form attached
hereto, and authorize the Mayor

and City Clerk to

execute said documents. 3. This

Resolution shall

take

effect

immediately

upon its

adoption.
ADOPTED this

PASSED and

day
7th
ofJuly, 1999.

n!
YOR
ftbr f

AA~

ATTEST:
CITY

CLERKAP ROVED

AS

10

fORM &

CITY
CITY HALL

FLORIDA

33139

OF

MIAMI

BEACH

1700 CONVENTION CENTER DRIVE MIAMI BEACH,

http:\\
ci.
miami- beach.

FROM:SUBJECT:COMMISSION
fl.

MEMORANDUM

us

City C
mission DATE:

TO:

July 7,1999

THE

of

NO.503 - 9'
7

Mayor Neisen O.Kasdin and

MAYOR

OF

the

Members

Sergio Rodriguez City Manager A RESOL I OF

AND

CITY

COMMISSION

OF

MIAMI BEACH,FLORIDA,

THE

CITY

APPROVING ON

SECOND READING, THE DEVELOPMENT AGREEMENT, IN ACCORDANCE WITH

THE REQUIREMENTS OF THE FLORIDA LOCAL GOVERNMENT DEVELOPMENT

AGREEMENT ACT,BETWEEN THE CITY OF MIAMI BEACH
AND LINCOLN PLAZA PARTNERS LLC,

FOR

DEVELOPMENT OF THE SITE LOCATED

AT 17TH STREET AND LINCOLN LANE AND JEFFERSON AND

MICHIGAN A VENUES AND APPROVING THE LEASE AGREEMENT BETWEEN
THE CITY OF MIAMI BEACH AND LINCOLN PLAZA PARTNERS LLC,

TO LEASE SAID SITE

HELD

IN

PUBLIC HEARING

FOLLOWING A

ACCORDANCE WITH THE PROVISIONS OF SECTION 82-

36 THROUGH 8240
OF

THE CODE OF
THE

Resolution. BACKGROUND: On January

AN EFFECTIVE DATE. RECOMMENDATION: Adopt the
1998,the City of Miami Beach issued
RFP 20-97/ 98,
5,
seeking proposals for the development of Public- Private Parking facilities. On April
different development
6,1998, proposals from five 5)
teams were submitted and
(
evaluated by an
CITY

AND

PROVIDING

proposed

of the

15,

Committee. On July
1998,the City

Commission

authorized negotiations commence

1:
Municipal Parking

with

four 4)
(

Municipal
2:

Evaluation

development

projects as follows:

Site
Systems

Parking

Site
Systems

Site
3:

ParkOne,

July

7,

J 999

Commission
Memorandum

2 On September 10,
1998, the City issued
Page
RFP 11198,
eval
u
ate
the
4)
municipal
surface
lots
proposed
97/ to
parking
four (
for
the development of Public-Private Parking facilities. On September 23,1998, the City
Commission authorized the Administration to contract
to conduct such an
with HNTB
evaluation of the proposed developments. On February 3,
1999, the City Commission referred
Phase I ofHNTB' s report and recommendations, regarding the proposed Public- Private

Development Proposals,

to

the Finance and Citywide Projects Committee, which met on February

1999, the City Commission accepted the Finance and Citywide Projects
25,1999. On March 3,
Commit ee' s report to phase
the development of the projects and directed the Administration to begin negotiations for Site I
and Site 4 and to begin discussions with the developer for Site 3 to try
to work out the differences and allow for possible agreement on terms that
could
be presented back to the Committee. To facilitate the negotiations, the City
Attorney

the firm of Bloom &Minsker to assist

engaged
Lease
Agreement
Ground
and Development Agreement. On May 26,1999, the City
hearing and approved the Development Agre ment on first

and

draft the attached

Commission held a public

reading for both

4. On June
22,1999, the
Site I and Site
proposed project
favorably reviewed by the City' s Planning Board. Pursuant to the provisions of
was
City Ordinance 92-2783 (the Shapi
r
o
Ordinance"),
"
which is codified in Sections 82- 36 through 82-

of the Code
City,the lease of any Cityowned property for a period
of five years or more,including
40
ofthe

option periods, is subject to the following conditions:

a Planning Department analysis a public hearing to obtain citizen input an advertised public
or rental value of the property
bidding process an independent appraisal to determine the fair market
Said Ordinance further provides that except for the public hearing and the Planning Department analysis, the above
referenced conditions may

be

waived by a 5/7ths vote of the City Commission upon

public interest would be served by waiving such conditions. A

fmding that the

public hearing

has been scheduled on this date and the Planning Department analysis of the proposed
Lease
is attached for City Commission consideration (
Agreement

see Exhibit
I).
As previously stated, this lease was

for which an appraisal has been

time.Development
In

negotiated based upon a publicly advertised RFP

procured; therefore no waivers are requested at this

Regulations:

accordance with the Florida Local

the City of
Development Agreement Act,
Miami Beach and Lincoln Plaza Partners LLC, are entering
into a Development Agreement to address, among other things:the proposed development at the
site the development regulations applicable
Government

July
1999
7,

Commission

Page 3 The City Commission has held the first of two public hearings required to enter
into a Development Agreement. This resolution will approve the Development Agreement on second
and
Memorandum

public hearing. The subject City land is presently zoned Government Use GU).
(
The
GU
devel
o
pment
s
joint
gov
e
r
n
ment
/
private
uses
in
the
private
proposed publicrepresent privateor
Pursuant to Section 142- 423 of the City Code,any such use requires review by
district.
Board
the City Commission. On June 22,
the Planning
prior to approval by
1999,Lincoln Plaza Partners LLC presented their proposed development project to the Planning Board,
outlining the uses and setting forth the applicable development regulations.The
Planning Board favorably reviewed the proposed project commenting on its favorable location
final

and adequacy of

parking for

the public. Pursuant to Section 142-425 of the

City Code, the City Commis ion must confirm the development regulations that apply asa result of such proposed
private or joint government/private use to be the average of the requirements in the
surrounding districts, as determined by the Planning and Zoning Director. The Planning and
Director has determined that the development regulations for CDZoning
3 will apply to this
site
and said development
regulations are confirmed

that

the

in the Development Agreement. CONSULTANT' S RECOMMENDATION: HNTB evaluated the proposals

City should not sell its property to the developers at

any

of the sites but should instead negotiate leases wherein:

be in the neighborhood of 10%
of the market value of the

and recommended

the guaranteed lease payments should

City owned land based on the ultimate zoning of the property. the
term
of the land leases should be
in the average of 40 to 45 years in order to allow the developer

achieve a reasonable profit and the City retain control of its property.
the City should also obtain additional
monthly payments based on gross revenues ( profit sharing) generated by the overall development. require the developer at each
site to pay the City a lump sum amount for the estimated or actual
to

losses

in

parking revenue during the time the site is inoperable for parking.
APPRAISALS: The appraisals
the Public- Private Parking projects were completed on March 19,1999, by J.
Alhale
&
Associ
a
t
e
s
Inc.,
B.

of

July
7,
1999

Commission
Memorandum

Washington
Sl.
17"St.

Site

Page
Site

2:

Site

3:

1: Michigan
Site

4:

17"
Lenox &

10"St.16"
&

Collins &
800,

St.

000 $
2,
600,

Appraised Value: 5,
$

070, 000 $2,

000 3
$
,
900,

000 Highest &Best

Use @ 3/
15/99

Proposed

Less than

highest

TBD

Less

than

highest

Site has

affecting ability to develop the highest and best

1999, staff

Development: and best use and best use

use without additional land. As reported on April 28,
limitations

prepared

projected

cashflow analysis in order to

reconcile the fair market value and

payabl
e
to
the
City,
based
rent
upon the proposed value in use.
ANALYSIS: Based on the consultant recommendations and based on the appraisals submitted,
conducted
negotiations for
three (3)
the Administration has
of the four (4)
project

the annual

projects, as

for Site 2 will commence

prioritized by the City Commission. Negotiations
(
1,
Site 3,
and Site 4,
ifso
upon completion of negotiations with the proposers on Site

directed

by the City

terms

of the proposed project

are delineated

below.Additional tenns negotiated

since

Commission.)The

the first
public hearing held
on

26,
are

May

in bold
for

your easy

reference. TERMS:
Lincoln

Plaza

recommended negotiated

July
7,
1999

Commission
Memorandum Page

Adjustments: 50

Base Rent

5 Lease
Term: Commencement Date:

with

2,
20-

year extension

coups
Agreement execution date. 50, 000 (This fee rethe City' s out of pocket costs and represents
the up-front fee while the developer obtains permits
and

Feeupon

years

options

approvals prior to possession date.City continues

to operate surface parking

Execution:Construction/ Permitting: Preliminary

and

lots during this

Plans

delays. No later

Spees:DRBIHP
Application:Building

8 weeks from

period.)Subject to unavoidable

than 24

weeks

from commencement

date.No later

than

Permit:Construction

and spees approvals.

approval of preliminary

weeks from DRBIHP approval No later than 2 years

from Possession date One year from com encement date. Private land is
deeded to City

Completion:Possession

plans

No later than 32

at

this time with a reverter in

commence. Upon possession, one year

the

event construction does

not

Date:Security Deposit:
Rent during Possession Date

of base rent

will be provided as security deposit until CO date.175,

OOO/ annua1ly This fee represents the City' s projected loss
ofrevenue on

the
compensate City
thru Construction Period: Base Rent

site.We are requiring

for this loss

during

developers to

construction,

estimated to

last

at Delay

2 years from possession

610.
Earlier

Date: Delay

Date:CO

250, 000

date.)

5 increasing
1-

for

lease years

300, 000 for lease

to $
CO Date or

2 years from possession date,not subject to unavoidable delays. (

this date,Base Rent commences whether or

Date:

years

of

On

not construction is completed.) Earlier of date upon which TCO/ CO is obtained or

years

from possession date,subject to unavoidable delays.Base

2
rent will be adjusted at the end
of the

July
999
7.
/

Commission
Prohibited Uses: Condominium: At the

Memorandum Page
6 Percentage

Rent:as a

percentage

earlier

of i)
( a

sale

of

the

project

or (

and every Lease Year

ii)beginning in Year 9,
of gross revenues will
thereafter, percentage rent of 2.5%

calculated in addition to base rent.Only in Lease

Year 9,
percentage rent will be payable, in equal instal ments
through
years,
ten
in Lease Years II
over
Beginning in Lease Year 10,and every
Lease Year 20.
payable at the end
year thereafter, percentage rent will be due and
of
2.5%gross revenues, payable in the
of each year, i.e.
be

first
of

gross

sixty (60)
days of

h Lease Year and every

II.

thereafter. If developer exercises extension options, the land will

be re- appraised, based upon the terms set forth in

year
the Lease
use

revenues):Reappraisals:

Agreement,

the

to determine

in the 49th year

Rent will never

rent. Included

and

rent

new base

and 69th

be

year.

based upon the value in

The Base

less than the prior year's

defined

as Additional

Rent

in

are abated, waived or exempted. If taxes are reduced

result

Real Estate

the event

base

taxes

as

of

decline in property values in the area, this provision will not

parking rates shall not be less than
the City/Agency rates or more than comparable garage
parking rates charged in Miami- Dade County.
apply. Garage

Taxes:

rates will apply during special events and may

rent to
not be increased. City agrees to subordinate percentage

Standard

debt

service

payments on first mortgage, but not

rent.If a
is not

Parking Rates:

foreclosure

base

occurs, to the extent cashftow

available,

percentage rent will

cease

until

transferee

has five

years to
operations. unlawful/ illegal businesses or any
use which is public nuisance tatoo parlors,
psychics, palm and tarot card readers,body piercing
shops or gambling casino
stabilize

Subordination:

for any use involving ownership structure such as time

share, cooperative, etc. Developer may create a condominium with a
maximum of 3 units, consisting of an office unit, a retail
unit and garage unit,subject to the City'
s review and approval of the Condominium Declaration

7,

July

J 999

Commission
MemorandumPage

Developer has the right to sell project,

purchaser must have
a
e.
criteria i.
(
of 20
$ million in equity,track record, no

7
subject to
minimum

litigation

Sale/ Refinancing:

certain

Right of

with City,etc.),

first
interest in

refusal

First

Refusal:

CitylDeveloper has the right

of

to purchase other' s

the

Premises. Environmental

Matters:

Property

is

and
leased "as is"

developer
is responsible for remediation

Financial

Return to the City: The

financial return to the City consists of rent (base rent,percentage rent

and additional rent),real estate taxes the
( property is currently tax exempt) and additional private land that
project
will revert to the City at the termination of the lease. Additionally, the
will

approximately 449 net

which there is

provide

for

revitalize

the city

office space,
in the area and will provide new Class "A"
a demand, that will attract private corporations to anchor and
center. Such investment
serves as a catalyst and perpetuates a strong
new

parking spaces

economic
impact

for our community. n1; The negotiated terms represent a fair market return on the appraised value of the

land in the form of base rent and percentage

rent. In addition,to the $
000
50,
fee upon execution
Agreement
and
the
rent
of
1
$
75,
year
during
const
ruction,
of the
000/
base rent in the amount of 250,
000/year will be
$
possession. The base rent escalates to $
300,000/year at the
year,thereafter,

due and payable two years after

end of the 5th lease

escalations

first 25

rent occur every 5 years. The total base rent payments over the
to base
8.
earlier of a
years,total $ 4 million. Percentage Rent commences at the
sale of

the project or

6 million over the

year and is estimated to total 2.
$
25 year term.The terms provide a return to the
City that would enable the Developer to
stabilize the project and
5%)
allow the City to begin to participate in a percentage (2.
of
the 9th Lease Year. Based upon a 25 year operating
gross revenues, during
proforma

during

for

the 9th lease

the

project, the aggregate City

return

over the first

25

year

period totals $

11.

4 million.The Developer' s aggregate return during this same period, totals $50 million. Note:
(
This return
is
calculated over 25 years and not over the 90 year lease term.) The Lease Agreement further provides

that any

abatement or

waiver of real estate taxes will be paid as Additional

"Rent" to
that
tax
exemptions
are
the
event
granted for
land and improvements. The
land is currently tax exempt but non- public uses on municipal land are subject to ad valorem taxes pursuant
the City in the

to State
Statute. This Agreement

provides that any change in law would require the Developer to pay an amount equal to the City
the City will
and County taxes in the form of Additional Rent.Real Estate Taxes Additionally,
benefit from the projected annual
real estate taxes
that will be paid to the City. It

July
1999
7,

Commission
Memorandum
payable

to the

Page 8 and $112,213 will represent the County' s annual increment

Redevelopment Trust Fund, as a result of the property' s location in the City

Redevelopment District. In FY 2023 the City will no longer benefit

expiration of the term of the Redevelopment District. Tax payments
25 year period are estimated to
Center

the County increment due to the

to the City over the first
from

total 7

Land Contribution The Developer is also contributing

inclusive of the County increment.
000
sf
of
14,
additional
land
to
approximately
the aggregate project.This land will be deeded to the
City upon possession date and will become part of the premises that revert to
million,

City upon termination

of the Lease Agreement. See
Sale. Assignment. Transfer &
Sublet ing The Lease Agreement provides that City
( Exhibit 2)
consent will be required in the event of a sale,assignment, transfer or sublease to a
Permitted Buyer,"
if the Permited Buyer does not meet certain criteria. The Permitted Buyer is a real estate
investor, pension fund or developer and the
the

criteria set forth

in the Lease Agreement

meet minimum equity
requirement of$
20 mil ion Must not be owned by a foreign instrumentality
Has not been in litigation with the City over the past 7 years Cannot be
consists of the following: Must

owned
by an individual who has
under indictment

for

bankruptcy during the

past

not
against

been convicted or is
not filed for

felonies Has
7

be

the

a minimum of 5 years operating history Must

advocate or have as its stated purpose: resistance

years

an

Must

have

U.S.
Government; or genocide, violence,

hatred

or animosity toward persons based

on race,religion, creed, sexual orientation or national origin.

and
the attached Development Agreement
Lease have been "redIined" to show changes from
RECOMMENDATION:
the documents presented at the May 26th meeting of the City Commission in order to expedite
your review. Deleted material is indicated by a strike-through, and inserted text is indicated by double
" copy of the documents has
underlining. A clean"
Please note that

been provided to the City

City.It is

City
approve the

Clerk for inclusion in the official records of the

recommended that the Mayor and

Commission
Development

Agreementand Lease

Agreement and

"

SCHEDULE TO FINANCING STATEMENT

1.
Building Equipment

described

as

follows: all

located at or attached to and used

installations incorporated in,
or usable in the operation of,or in cOIUlection with, the Premises
and shall include, but shall not be limited to,
machinery,
apparatus, devices, motors, engines, dynamos, compressors, pumps,boilers

and

burners, heating, lighting, plumbing, ventilating, air cooling and

air conditioning equipment; chutes, ducts, pipes, tanks, fittings,
conduits and wiring;incinerating equipment; elevators,escalators and
hoists;washroom, toilet and lavatory plumbing equipment;window
washing hoists and equipment; and all additions or replacements
thereof, excluding, however, any property which is owned by
subtenants, licensees,concessionaires or contractors (except to the extent any
the foregoing are Affiliates of Debtor) and excluding

of

furniture, fixtures

and equipment used in the operation, management

and maintenance of the

Premises. 2.
Reserve

Account

described

as

Reserve Account"
follows: that specific account designated as the "
as more fully described in that certain Agreement of

Lease

described hereinbelow. 3.
All Products and

Proceeds

Any reference to the Premises means the Land described on Exhibit A

from items 1 and 2.
attached hereto and made a part hereof and the Improvements thereon which include a Garage,
office building and retail space to be constructed on the Land in accordance with that certain Agreement
of Lease between the City of Miami Beach,Florida and Lincoln Plaza Partners LLC and
any buildings ( including footings and foundations) and other improvements, appurtenances of every kind
and description now existing or hereafter erected, constructed, or placed upon the Land (whether
temporary or permanent),and any and all alterations and replacements thereof,

ad it ons

theretoand substitutions

therefor.F:\

MINSKER\C.M.

B\
Michipn-

UtICl) ln

P1aza\ Sehtdule

to

SCHEDULE TO FINANCING STATEMENT

1.
Building Equipment described as
follows: all

located at or attached to and used

installations incorporated in,
the operation of,or in connection with, the Premises
and shall include, but shall not be limited to,
machinery,
apparatus, devices, motors, engines, dynamos, compressors, pwnps,boilers
and burners, heating, lighting, plwnbing, ventilating, air cooling and
air conditioning equipment; chutes, ducts, pipes, tanks, fittings,
conduits and wiring;incinerating equipment; elevators,escalators and
hoists;washroom, toilet and lavatory plwnbing equipment;window
washing hoists and equipment; and all additions or replacements
thereof, excluding, however, any property which is owned by

or usable in

subtenants, licensees,concessionaires or contractors (except to the extent any

of the foregoing are Affiliates of Debtor) and excluding
furniture, fixtures

and equipment used in the operation, management

and maintenance of the

Premises.2. Resen'e

Account

described

as

Reserve Account"
follows: that specific account designated as the "
fully
Agreement
more
described
in
certai
n
of
as
that

Lease

described hereinbelow. 3.
All Products and

from items

Proceeds

1 and 2.
Any reference to the

Premises

means the Land described on Exhibit

hereof and the Improvements thereon which include a Garage,

attached hereto and made a part.
office building and retail space to be constructed on the Land in accordance with that certain Agreement
of Lease between the City of Miami Beach,Florida and Lincoln Plaza Partners LLC and
any buildings (including footings and foundations) and other improvements, appurtenances of every kind
and description now

existing

or hereafter erected, constructed, or placed upon the Land (whether

temporary or permanent),and

any and

additions

C.
M, B\MichiSIn. Lino l Plaza\Sclledule

theretoand substitutions

therefor.F:\

MINSKER\

all alterations and replacements thereof,