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3Office of the City Manager December 22, 2010 Mr. Alfred Sanchez President & CEO YMCA of Greater Miami 1200 NW 78 Avenue, Suite 200 Miami, Florida 33126 Re: Lease Agreement between City of South Miami and YMCA of Great Miami Dear Mr. Sanchez, As the City of South Miami City Manager, I thoroughly reviewed the lease agreement between the City and the YMCA dated December 1, 2005, and concluded that the YMCA as tenant may have has defaulted in said lease. These defaults include tearing down existing structures without any suitable replacement built by December 1, 2010, as required by the terms and conditions of the lease. As a result the health and social services and recreational programs normally offered and operated by the YMCA are completely non existent. The YMCA provide no significant benefits to the citizens of South Miami as promised. Your failure to provide these services or build on this land is a direct violation of section 22.2 of the Lease of December 1, 2005: 22.2 Failure to Perform. Failure of the YMCA to perform in accordance with or to comply with any of the covenants, conditions, and agreements which are to be performed or complied with by YMCA in this Agreement, other than those requiring payment of money as provided in subparagraph 22.1 above, and the continuance of such failure for a period of 30 days after notice thereof in writing form the City to YMCA (which notice shall specify the respects in which the City contends that YMCA has failed to perform any such covenants, conditions and agreements), shall constitute an Event of Default; provided, however, if such default cannot with reasonable diligence be cured within 30 days and YMCA within such 30 -day period shall have commenced and thereafter shall have continued diligently to prosecute all actions necessary to cure such default, then YMCA shall have such additional time as YMCA requires which and so long as YMCA continues to diligently prosecute all reasonable actions necessary to cure such default. South Miami M- AmeflmOH . 8Ov® 2001 6130 Sunset Drive South Miami, Florida 33143 -5093. ^ Tel: (305) 663 -6336 • Fax: (305) 663 -6345 www.cityofsouthmiami.net Page Two December 22, 2010 Mr. Alfred Sanchez Until the City has provided YMCA with written notice pursuant to this subparagraph 22.2 and the time periods for cure set forth in this Agreement have elapsed without such cure having been affected, the failure of YMCA to perform or comply with the non - monetary convents, conditions, and agreements of this agreement shall not be deemed an Event of Default. In addition to the above non - monetary default, the YMCA also committed a failure to pay required monies by its breach of Section 3.7 of the Lease. In Section 3.7 it clearly states that "In the event that the YMCA, elects not to build a new community center, the YMCA agrees to deposit $20,000 annually into a segregated escrow account to be utilized for improvements, maintenance, and repairs. The parties shall mutually agree on maintenance, repairs, and replacement to be performed." It is clear that the YMCA has not now nor in the past deposited the required $20,000 set forth by December 1. This monetary breach is a direct violation of the following clause of the Lease. 22.1 Failure to Pa. Failure of YMCA to pay any, debt service on the Borrowings, or any other payments of money as herein provided or required when due shall constitute a monetary default of YMCA hereunder. In the event that any debt service on the Borrowings, or other payment of money is not paid to the City within then (10) days prior to the date the same becomes due and payable, the city may assess the YMCA a charge of 18% per annum on a pro rated basis until such amount is paid in full. If the payment remains delinquent for thirty (30) days after the date which such payment is otherwise due, an Event of Default shall have occurred, and the City may proceed to exercise any and all remedies provided herein nor available at law for an Event of Default including but no limited to termination of this Agreement and institution of foreclosure proceedings. YMCA covenants agrees to pay to the City interest on the amount there for from the date such payment or installment became due and payable to date of payment t hereof, at the Default Rate. If the foregoing defaults are not cured within the time period as defined in the lease agreement, then in that event, these defaults shall be deemed to effectuate a cancellation and termination of the existing Lease Agreement. PLEASE GOVERN YOURSELF ACCORDINGLY. Sincerel}r� H' eetor Mirabile, Ph.D. City Manager 6130 Sunset Drive South Miami, Florida 33143 -5093 • Tel: (305) 663 -6338 • Fax: (305) 663 -6345 www.cityofsouthmiami.net Florida Venture Lawyers Attorneys at Law January 7. 2011 Hector Mirabile, Ph.D. Office of the City Manager City of South Miami 6130 Sunset Drive South Miami, Florida 331.43 Re- Lease Agreement between City of South Miami and YMCA of Greater Miami (the "Lease Agreement ") Dear Mr. Mirabile: The YMCA of Greater Miami received your letter dated December 22, 2010 and asked that I respond. The YMCA is troubled by your letter and fully disagrees with all of your conclusions. Under a facial review of the Lease Agreement (without considering any of the background details), the YMCA has not defaulted. For you to fully appreciate the Y'MCA's position in this matter, more than Just a review of the lease Agreement is required. You must also have a command of the historic facts and circumstances relating to the City's and the YMCA's interactions concerning the property. Given your recent appointment and the City's high turn -over rate, we assume you do not have this requisite institutional knowledge. This is not the first time that the City has improperly pressured the YMCA to leave the leased property, In fact, most recently in December 2009, the City advised the YMCA that it desired to know the terms upon which the YMCA would voluntarily terminate the Lease Agreement. Vacating the property has never been part of the YMCA's business plan and, by way of my letter dated December 24, 2009, the YMCA expressed that it desired to continue its efforts to build a new community center at the property. Following this letter, representatives of the City and the YMCA held a meeting on May 3, 2010 to discuss plans for the development of the property. This meeting was attended by, among others, members of the YMCA's Executive Committee, Alfred Sanchez, President & CEO of the YMCA, YMCA senior staff, the Honorable Mayor Phillip Stoddard, and City Manager Roger Carlton . An accord was reached at that meeting by the City and the YMCA that both parties would stay further actions against the other for a minimum of five years. During that time, the City and the YMCA would work together to revisit the City's Master Plan for the site, which currently depicts the YMCA as a "black box" with no details. A new plan would be developed that included details of the YMCA building. Further along these lines, the YMCA had been asked by the City Manager to help arrange a meeting with Miami -Dade County Public Schools Superintendent, Alberto Carvalho, and his staff, which it did. At this meeting, the possibility of expanding the City's Master Plan to include portions of the elementary school bordering the site was explored. This would create a possible new ingress /egress to the property and also included the possibility of having the Miami -Dade Public School System assist in funding the one -mile sewer line that is required to support any new building on the leased property or the surrounding site. Stephen M. ROW, PA. 2625 Weston Road Weston, Ftodda 33331• P: (954) 667 -9529 • F: (954) 622 -9789 . srubin @flvcnIaw.com Hector Mirabile, Ph.D. Office of the City Manager Page 2 of 3 January 7, 2011 The City failed to make good on its obligations in regards to the stay. The City met with the YMCA only one additional time in August 23, 2010, a meeting arranged to bring then - interim City Manager Bufford Witt up to speed and discuss possible next steps in the relationship. Commissioner Brian Beasley, City Attorney' Laurence Feingold, and other key City Staff attended this meeting. Mr. Feingold advised all of the attendees, including the YMCA's representatives, that any action in furtherance of the development of any longstanding policy decisions with respect to the leased property would be futile in light of the changes in the City's administration which would take place soon after this meeting. Therefore, Mr. Feingold recommended that no action be taken nor further expenses be assumed until after the City had selected the new City Manager and the City Commissioners had a chance to hold a Committee of the Whole ("COW ") to discuss and set the direction they wanted to take at the site. While the YMCA was not particularly interested in further delays for the project, the YMCA was willing to fully participate in the COW. In anticipation of this opportunity, the YMCA invited City officials to tour the YMCA's Weston facilities for ideas of what could be done with the leased property. But, despite the YMCA's further efforts to reach out to the City, including Mr. Feingold, no subsequent meetings 'took place between the City and the YMCA and the YMCA was not invited to participate in the COW, if indeed it ever took place. Concerning the conclusions in your letter, you must understand that the buildings at the leased property were damaged by a hurricane and the City requested that the YMCA demolish these structures as the hurricane damage made them unsafe. Before the hurricane, however, the YMCA fully intended to develop the new community center and advised the City that a new community center would be feasible. At the time the property was sold to the City, all parties understood that the YMCA could not construct the new facilities without the City's cooperation. Accordingly, the City agreed in the Lease Agreement to provide the YMCA assistance with borrowings from the Florida League of Cities Municipal Loan Program. Contrary to its obligations in Section 3.1 of the Lease Agreement, tlhe City has not undertaken any efforts to assist the YMCA with this or any other financing. In this regard, the City has defaulted. Nothing in the Lease Agreement would require the YMCA to construct facilities while the City is in default of its financing obligations. Furthermore, the YMCA is not required to pay annual installments of $20,000. As you have been advised above, the YMCA elected to build new facilities but has been unable to do so due to the City's actions and inactions, including the City's lack of financing support. These payments were only intended to provide for the maintenance, repair and upkeep of the aging facilities that have been demolished. To require the YMCA to make payments for the maintenance, repair and upkeep of non- existent facilities is contrary to the spirit, intent and plain language of the Lease Agreement. The foregoing is only a brief summary of the most recent actions by the City in contravention of the YMCA's efforts to build a new community center. In fact, there have been a number of other examples of obstacles perpetuated by the City which have contributed to the YMCA's inability to build and operate the new community center. Since shortly after signing the agreement in 2005, the City has played the role of obstructionist and your letter is only the most recent example. As a result, the YMCA has incurred substantial costs and expenses in connection with this project, including professional fees and other costs and expenses for planning for the construction of the new community center, and has lost significant revenues due to these delays. Stephen M. Rubin, P.A. 4143 Cinnamon way, Weston, Florida 33331 + P: (954) 562 -3973 • F: (954) 622 -9789 • srubin(u)noridaveirtarelawyers.com Hector Mirabile, Ph.D. Office of the City Manager Page 3 of 3 .Tan nary 7, 2011. In light of the foregoing, the YMCA must advise you that it will, if necessary,, vigorously pursue all legal remedies to enforce its rights under the Lease Agreement and to defend against any claims that the City may make. The YMCA remains hopeful that the City will cooperate in good faith with the YMCA in furtherance of the development of the new community center and sincerely desires to resolve the matter amicably. Be advised, however, that if you do not withdraw your notice of default immediately, then please consider this letter as notice to the City of its default under the Lease Agreement. Again, the YMCA hopes to be able to resolve this matter amicably and does look forward to your response. Please also note that the YMCA has a new address and that all further correspondence directly to the YMCA should be addressed to 730 N.W. 107`t' Avenue, Suite 200, Miami, Florida 33172. Very truly yours, Stephen M. Rubin Cc: Alfred Sanchez Stephen M. Rubin, P.A. 4143 C;:#nnamon Way, Weston, Fim ida 33331* P: (954) 562-3973 • F: (954) 622 -9789 • srubin @floridaventurclawyers.eom Florida Venture Lawyers Attorneys at Law December 24, 2009 Roger Carlton City Manager City of South Miami 6130 Sunset Drive South Miami, Florida 33143 Re: Lease Agreement between City of South Miami and YMCA of Greater Miami Dear Mr. Carlton: This firm represents YMCA of Greater Miami (the "YMCA ") in various matters, including the above referenced matter. As you know, Alfred Sanchez and Miguel De Grandy have been meeting with you and other City officials to explore ways of coordinating with City staff and planners to develop Downrite Park. Recently, Mr. De Grandy advised the YMCA that the City of South Miami desires to know under what terms the YMCA would consider terminating its Lease Agreement (the "Lease ") with the City of South Miami (the "City"). The YMCA views this option as one of last resort as it is contrary to all of the YMCA's efforts thus far to develop the proposed Downright Park Facility at the leased premises. Accordingly, you can imagine the YMCA's disappointment with the City's current request. As you may know, the YMCA acquired the parcel at 4300 S.W. 58`r' Avenue, Miami, Florida 33155 (the "Land ") in 1956. Since that time, the YMCA used this Land to promote its community focused programs for the benefit of residents of the City. The YMCA always viewed the Land as a crucial component for the YMCA's overall plans to serve residents of the City, as well as residents of Miami -Dade County in general. In 2005, the YMCA began considering different scenarios for the Land to achieve these plans. The YMCA was in active negotiations with various groups, including Miami -Dade County and private developers, when the YMCA began considering the City's oiler. After numerous discussions with the City's Manager and Mayor, as well as Mr. Jimmy Morales (then, the County Commissioner), a sale /lease back arrangement with the City was viewed to be in the best interests of the YMCA and the community. The purchase price offered by the City was significantly lower than that offered by other parties. However, the YMCA was ultimately swayed to sell to the City only because the City also agreed to grant. the YMCA a long term lease and provide assistance for the financing of the Downrite Park Facility through the Florida League of Cities Municipal Loan Program. Frankly, without the long term lease and the City's commitment to assist in the development of the facility, the YMCA never would have agreed to the sale to the City. Since it has never been the YMCA's intention to vacate the leased premises, the YMCA has not invested time and resources to analyze the terms upon which it would "walk away" from the Lease. Nevertheless, if the City wishes to explore this option, the YMCA believes that it is incumbent upon the City to propose a methodology for an amicable termination that fully compensates the YMCA for both tangible and intangible benefits to be derived from the long tern agreement. In so doing, we respectfully submit that the City must factor in the following, among a host of ocher things: The deeply discounted purchase price for the sale of the Land to the City; Stephen M. Rubin, P.A. 2625 Weston Road Weston, Florida 33331# P: (954) 667.9529 • h': (954) 622 -9789 • srubin@flvenlaw.com Page 2 of 2 December 24, 2009 2. That the YMCA is being Asked to forego a beneficial lease for property that would have served as the foundation for the Downrite Park Facility, and would provide a significant source of revenues over the course of at least a 50 year term; 3. It is virtually impossible to find a similar parcel in the community and, furthermore, assuming one were available; the purchase price would likely be astronomically more than the YMCA's not for profit budget could bare; and 4. The significant costs incurred by the YMCA in preparing for the development of the facility. In summary, the YMCA is understandably concerned with the City`s potential determination not to proceed as it had originally agreed. However, the YMCA does remain hopeful that we can expand our dialogue in this matter to include meaningful and good faith discussions of alternatives to the termination of the Lease. In any case, the YMCA looks forward to your response to this letter, and stands ready to meet with you at the beginning of the New Year to discuss these options. Very truly yours, Stephen Cc: Alfred Sanchez Stephen Al. Rubin, P.A. 4143 Cinnamon way, Weston, Florida 33331.• P: (954) 562 -3993 . F: (954) 622.9789 • sruhin (G,noridaventurelawyers.com Page 1 of 2 Menendez, Maria M. From: AslanF @aol.com Sent: Tuesday, January 25, 2011 12:56 PM To: Menendez, Maria M. Cc: Garcia, Maria Subject: Fwd: City of South Miami/YMCA Lease Agreement musT GO ON AGENDA Attachments: LettertoH.Mirabilel.7.2011.PDF; CityofSouth Miami. PDF Maria M. ....under city atty reports put this email and all attachments as attachments My report will be YMCA Property and Presentation by YMCA officials. (see attachments) . Add to the reference material herein the ManAger's letter and and other letter from Roger Maria Garcia. Please send the Clerk the Manager's DEFAULT LETTER OF DEC 22, Larry Laurence Feingold P.A. City Attorney of South Miami. City Hall (305) 663 -6340 Beach Office: (305) 538 -1686 Cell: (305) 495 -7887 Fax: (305) 538 -7875 Web: laurencefeingold.com NOTICE: This email message and all attachments transmitted with it are intended solely for the addressees and does contain legally privileged, protected and confidential attorney /client information. if you have received this message in error, please notify the sender immediately by email reply and delete this message from your computer and destroy any copies. From: srubin @flvenlaw.com To: AslanF @aol.com Sent: 1/24/2011 2:34:25 P.M. Eastern Standard Time Subj: City of South Miami/YMCA Lease Agreement Larry, For your reference, I have attached the two letters I have written to the City of South Miami on the YMCA's behalf concerning the Lease Agreement. As noted in my most recent letter, the YMCA disagrees that it has defaulted under the Lease Agreement. But, rather than engaging in costly and time consuming litigation, the YMCA believes that it is worthwhile to continue good faith efforts to amicably resolve this matter. We believe that a "C.O.W. ", which was suggested in our prior meeting, would be a good starting point in this regard. Accordingly, please consider this as the YMCA's formal request for the Commission's approval for the holding of a "C.O.W." with respect to the Lease Agreement and the underlying and contiguous property. We sincerely hope that this is a matter that could be considered by the Commission as early as possible. I look forward to your response. Thank you. Florida Venture Lawyers 1/25/2011 Page 2 of 2 Attorneys at Law Stephen M. Rubin 2625 Weston Road Weston, FL 33331 Direct: 954.667.9529 Cell: 954.562.3973 Facsimile: 954.622.9759 srubin(a_tivenlaw.com I www.floridaventurelawyers.com Pursuant to Internal Revenue Service Circular 230, we are required to advise you that if there is any tax advice contained herein, it is not intended to be used, and cannot be used, by the addressee or any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. This email transmission (and/or the attachments accompanying it) may contain legally privileged and confidential information, and is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any dissemination, disclosure, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please promptly notify the sender by reply email and destroy the original message. 1/25/2011