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Ord. No. 35-01-1766ORDINANCE NO.35-01-1766 AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI,FLORIDA,RELATING TO CONTRACTS;APPROVING A LEASE AGREEMENT BETWEEN THE CITY AND MARK RICHMAN PROPERTIES,INC.,FOR THE GRANTING OF AIR RIGHTS ABOVE MRP PROPERTY TO THE CITY,THE LEASE BY MRP OF CERTAIN CITY PROPERTY AND THE CO-DEVELOPMENT OF A PARKING STRUCTURE PROJECT AT SW 73 STREET BETWEEN SW 58 COURT AND 58 AVENUE; PROVIDING FOR SEVERABILITY,ORDINANCES IN CONFLICT, AND AN EFFECTIVE DATE. WHEREAS,the City of South Miami is the owner of property located at S.W.73rd Street onthe south,S.W.58th Avenue on the east,S.W.58th Court on the west and an alleyway onthe north,which iscurrentlyusedforsurfaceparking;and, WHEREAS,theMayorandCity Commission,desiringtodevelopa multi-use parkingfacilityontheproperty,issueda Request forProposalsonJune20,1997;and, WHEREAS,theresponse by SPG Phase One,Ltd.wasselected by theMayorand CityCommission,thepartiesengagedinextensivenegotiationsoverthetermsand conditions of theagreementfortheconstructionand management of theparkingfacility, andthe City approvedaleaseagreement between theCityandSPG;and, WHEREAS,thelease agreement allowsSPGtoassigntheleasetoMark Richmond Properties,Inc.andtheCityhasre-negotiatedtheleasetoprovidethatMRP willdeedtheairrightsoveritspropertytotheCity,theCitywillleaseadditionalground spacetoMRPforretailuse,andthepartieswill co-develop aparkingstructureonthe property;and, WHEREAS,thisleaseagreementwillbesubjecttoapproval by theCity of applications for development approval of theproperty,suchasspecialexceptions, funding of the development by the Florida MunicipalLoanCouncilorotherlender acceptabletotheCity,adetermination of crecbt-worthiness of Mr.Richmond in connection with anyprivate guarantee forrepayment of fundsborrowed by theCity,and delivery of arelease of liability by SPGanditsprincipals;and, WHEREAS,theMayorandCity Commission have determined thatitisinthe bestsinterests of theCity of SouthMiamitoenterintotheproposedAgreement. Page1 of2 Additions shown by underlininganddeletionsshownby ovcrstriking. NOW,THEREFORE,BEIT ORDAINED BY THE MAYOR ANDCITY COMMISSION OF THE CITY OF SOUTH MIAMI,FLORIDA: Section1.TheLeaseAgreementbetweentheCity of SouthMiamiandMark RichmanProperties,Inc,datedNovember,2001,whichisannexedtothisordinance, is approved;provided,however,this lease,thelease between theCityandSPG Phase I, theassignment of theSPGPhaseIleasetoMRPProperties,Inc.andthereleaseofclaims bySPGPhaseIshallbedeliveredsimultaneouslyataclosing of thistransaction. Section 2.TheCityManagerisauthorizedtoexecutetheAgreementon behalf of theCity of SouthMiami. Section3.If anysection,clause,sentence,orphrase of thisordinanceisforany reasonheldinvalidorunconstitutionalbyacourtofcompetent jurisdiction,theholding shallnot affect the validity of theremainingportions of this ordinance. Section 4.All ordinances orparts of ordinances in conflict withtheprovisions of this ordinance are repealed. Section 5.This ordinance shalltakeeffect immediately uponapproved. PASSEDAND ADOPTED this20_day of November ,20qi. ATTEST: CITY CLERK 1st Reading-Nov.6,2001 2nd Reading -Nov.20,2001 (as amended) READ AND APPROVED AS TO FORM ^/&.(b^Jty CITY ATTORNEY APPROVED: MAYOR COMMISSION VOTE:5-0 Mayor Robaina:Yea Vice Mayor Feliu:Yea Commissioner Wiscombe:Yea Commissioner Bethel:Yea Commissioner Russell:Yea Page 2 of 2 Additionsshownbyunderlininganddeletionsshownby ovorstriking. PROPOSED LEASE SUMMARY i^AiU }^J 1.Tenant:MarkRichmanProperties("MRP") 2.Landlord:City of SouthMiami 3.Guarantor:MarkRichman(seeparagraph 10) 4.Demised Premises: (a)The municipal parking lot located at S.W.73rd Street,S.W.58th Avenue, and S.W.58l Court together with the air rights over the Mark Richman Property located at the corner of S.W.73rd Street and S.W.58th Court,in the City of South Miami. (b)Permitted use:mixed use retail and parking garage building. 5.Air Rights:MRPwilldeedtheairrightstothe City. 6.Assignment from SPG:SPG under the lease agreement with the City specifically reserved the right to assign the Project to MRP.MRPshallobtaina formal assignmenttodeveloptheProjectfromSPG. 7.Release:MRP will secure a general release from SPG releasing the City from any and all causes of action,claims,demands or alleged damages arising from or related to the Request for Proposal issued by the City of South Miami.A copy of the Release language is attached. 8.TaxAbatement:During the lease term,theCityshallabateitsshareofthead valorem taxes assessed against the 11,345 square feet of retail to be located on the City's property. 9.Lease Agreement with MRP:MRP proposes to enter into a lease agreement withtheCity. A.Initial Term.The initial term ofthe lease agreement with Richman Properties will be for 50 years.There isno renewal option. B.Ownership of the Building.The City of South Miami owns the parking structure;including theair rights over the Richman Property. C Alleyway Considerations.The proposed Project as reconfigured should not impact the alleyway immediately behind Dabby Properties. D.Easement.MRP shall grant the City a perpetual non-exclusive easement for seven parking spaces located on ground level which are partially situated on MRP's Parcel. Page1 of3 E.Thirty Decal Spaces.TheCitywillprovideRichmanthefirstoptionto acquire30decalspacesforhistenantsatthethenprevailingrates.As consideration for theeasement,theCitywillreducetheratechargedforsevenparkingspacestoaccount forMRP"ownership interestinthesevengroundlevelspaces. F.RentPayments.TherentpaymentsforMRPwillbe calculated tobe sufficient to allow forthe repayment of MRP's share of the principal and interest of the Project loan. 10.Financing:TheCity of SouthMiamishallprocuretheProjectloantofinancethe designandconstruction of theProject.TheCitycanpledgeitsparkingrevenuesto obtaintheProjectfinancing.MRPwillpledgetherentalincomeearnedfromtheretail space.MarkRichmanwillalsopersonallyguarantee MRP's share of thebridgeloan. Theremainder of MRP's shareoftheloanwillbesecuredbytheLease,theNewMRP BuildingandtheMRPLand.ThebridgeloanwillbeusedtoallowMRPtopayfor projectrelatedcosts(includingitsshare of thearchitecturalandengineeringfees), refinancetheMRPproperty(thisallowstheCitytobeinfirstpositionasthesecured creditor)andtopayfortheCity'sshare of architecturalandengineeringfees.Theparties anticipate that thepermanentfinancingfor construction wouldbe obtained in November, 2002.Theapplicationforbridgefinancingwilltakeapproximately45-60daystoprocess andfund.Bank of Americawillrequirethatcertain commission approvalsbeinplaceto ensurethattheProjectisviablebeforefunding.Approval of thenewleaseagreement with MRP should be sufficient. 10.Cost Sharing:Thecosts of thedesignand construction oftheProjectwillbe shared as follows: (a)Thepartieswillparticipateinthedesignand construction costs of the Projectinproportiontoeachparty'sgrossareaoccupation of theProject. (b)TheLandlordwillpay 100%of thecosts of construction of additional parkinglevelsontheParkingStructurewhichmaybe constructed atafuturedate. (c)The Landlord will contribute $100,000 towards Tenant's share of the constructioncosts of theshell of theProject. (d)MRPwillpay100%ofthecostsassociatedwithdemolishingtheOld MRPbuilding. (e)Tenant willpayits proportionate share of thefees associated with obtaining the bridge and long term financing basedonits percentage ofthe Borrowings. (f)Tenantwillpay100%ofthecost of theretailspacebuildout of the ReplacementMRPBuildingandthePremises. Page 2 of3 (g)Landlord will pay 100%ofthecost of theparkingstructurefinishes. 12.Designand Construction:TheCitywillpreparerequestsforproposalsforthe selectionofanarchitectandaconstructionmanagementfirm. 13.Commencement of Construction:Thepartiesestimatethatconstructionwill commencein January-February,2003.Noholidayseasonconstructionwhichimpacts theretailshopsbyseverallyimpactingtrafficflowwilloccur. 14.Project Name:TheCityagreesto consult with MRP toselectanameforthe Project. Page3 of3 Excellence,Integrity,Inclusion MEMORANDUM To:Mayor andCity Commission Date:November 19,2001 (Updated) From:Charles D.Scurr City Manager •rlCds^' Agenda Item #14 Lease Agreement with Mark Richman Properties,Inc. REQUEST AN ORDINANCE OF TFIE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI,FLORIDA,RELATING TO CONTRACTS;APPROVING A LEASE AGREEMENT BETWEEN THE CITY AND MARK RICHMAN PROPERTIES,INC.,FOR THE GRANTING OF AIR RIGHTS ABOVE MRP PROPERTY TO THE CITY,THE LEASE BY MRP OF CERTAIN CITY PROPERTY AND THE CO-DEVELOPMENT OF A PARKING STRUCTURE PROJECT ATSW73rd STREET BETWEEN 58th COURT AND58th AVENUE; PROVIDING FOR SEVERABILITY, AND EFFECTIVE DATE. BACKGROUND &ANALYSIS ORDINANCES IN CONFLICT, Project History TheCity of South Miamifirstissueda Request for Proposals in June 1997forthe municipalparkinglotlocatedatSW 73™StreetandSW 58U1 Avenue.InSeptember 1997, theCity Commission awarded theproposedprojectforthedesign,construction,leasing and management of the mixed-use development and parking garage toSPG Phase One. Theinitial project wasfora mixed-use parkinggaragethat included thefollowing: •Area-OnlytheCity of SouthMiamiParkingLot,not including the Richman Property; •Parking Spaces ♦Total Spaces -257 ♦City Replacement Parking -73 ♦CodeRequiredParking-58*(*Includessharedparkingcredit,doesnot include Metrorail credit) ♦Net New Parking Available 100%-126 ♦Net New Parking Available Nights &Weekends -133 •Mixed Uses ♦Retail-15,000 SF ♦Office-8,000 SF ♦Residential -0 Units Theprojecthas experienced aseries of changes,evolutions anddelays.On February 6, 2001,theCity Commission approved aLease Agreement with SPG for "Version 7"of the Project.The "Final SPG Mixed Use Project"included the following: •Area-TheCity of SouthMiami Parking Lotandthe Richman property; •Parking Spaces ♦Total Spaces -442 ♦City Replacement Parking -73 ♦Code Required Parking -148*(Includes shared use credit;doesnot include Metrorail credit) ♦Net New Parking Available 100%-221 ♦Net New Parking Available Nights &Weekends -314 •Mixed Uses ♦Retail@28,200SF ♦Office@29,434SF ♦Residential@0Units The geometry of thefinalprojectincludedthefollowing: •Ground Level -Retail •Second Level-100%Municipal Parking •Third Level -100%Municipal Parking •Fourth &Fifth Level -50%Office;50%Parking •Roof-100%Parking Theheight of thebuildingwouldhavebeen approximately 59feet.The allowable height inthe Hometown Districtis56feet.Theproject,as expected inagaragefacility,might have included maximum lot coverage and might have required a number of special exceptions,whichwouldhavebeenthesubject of aseparateplanning/zoningprocessand approvals. Sincetheapprovaltherehasbeennopermitting,designor construction activity . TheleaseapprovedbytheCity Commission allowsSPGtoassigntheleasetoMark Richman Properties,Inc.Mr.Richmanand representatives of SPGhave indicated that thepartiesareinterestedintheleaseassignment.The assignment andrevisedleaseare the subject of this Ordinance. The Richman Project The Richman Project includes the following: •Area-TheCity of SouthMiamiParkingLotandthe Richman property; •Parking Spaces (Two Story/Three Story/Four Story and Rooftop Configuration) ♦Total Spaces -250/350/450 ♦City Replacement Parking -73 ♦Code Required Parking -60 ♦Net New Parking Available 100%-117/217/317 ♦Net New Parking Available Nights &Weekends -117/217/317 ♦Height (Approximate)-26'/36'/46' •Mixed Uses ♦Retail®19,845SF ♦Office @0SF ♦Residential@0Units Thegeometry of thefinalprojectincludesthefollowing: •Ground Level-Retailand Municipal Parking •SecondLevel-100%MunicipalParking •Thirdand Fourth Levels (Optional)-100%Municipal Parking •Roof-100%Municipal Parking TheprojectisverysimilartotheprojectproposedbytheRed-SunsetMerchants Association Conceptually theprojectisquite straightforward: •TheCitywillbe responsible forthecosts of construction of the parking garage.TheCitywillhavefullcontrolovertheoperationandmaintenance of the parking garage.TheCitywillretainallrevenuesfromthe parking garage. •Richman willdeedtotheCitytheairrightsabovethe Richman Property. Richmanwillberesponsibleforthecosts of construction of theretailspaceon theRichmanProperty.Richmanwillbe responsible forthecosts of construction,lessa $100,000 credit,fortheretail space onthe City Property. Richman will receive the revenues fromtheretail space. •Theterm of theLeaseis50years.Attheend of 50yearstheCityretains ownership of theairrightsaboveRichmanandtheCitywillgaincontrol of theretailontheCityproperty.Richmanretainsownership of theretailon Richman Property. TheCitywillobtain,throughtheFloridaLeague of Cities,bridgeandlong termfinancingfortheentireproject.RichmanwillrepaytheCityits proportionateshare.Richmanwillguaranteerepayment of hisportion of the costs. Financial Considerations LuisFigueredo of theCityAttorney'sOfficehaspreparedamemorandumdetailingthe framework of theLeaseagreement(AttachmentA),aswellasafinancialpro-forma (Attachment B). The financial pro-forma isbasedonvery conservative assumptions.Underthese conservative assumptions thenet income fortheCitywouldbeanexpenseof $34,000 in thefirstyear of operation.Ifthe $75,000 inparkingmeter revenue theCity currently receivesfromthesurfaceparkinglotisconsideredtheCity'snetfinancialpositioncould be impacted underamost conservative case scenario byupto $100,000 thefirst year. Theconservativefinancialprojectionsarebasedondailyrevenue of $2dayperspaceand ticketrevenuebasedona10%perspaceperdayviolationrate.Itisexpectedthatboth of thesefactorswillexceedthisprojectionbyatleast50%.Revenuefromthecurrent surface meter operation exceeds $3.00 perdayanditis likely that revenue fromthenew facility willatleast equal $3.00 per day.Similarly,current parking violations exceed 10%anditislikelythatviolationsinthenewfacilitywillexceed10%andbecloserto 20%.Theselessconservationandmorelikelyassumptionswouldyieldincreasesin revenuethatcouldputthe facility ina break-even positioninthefirstyearortwoof operation. ItshouldbenotedthattheCitywouldbeplacingaloan instrument withthe Florida League ofCitiesforthe project.Itis likely thattheCitywillbe required to pledge a portion ofthe parking revenue stream forthe project.This is standard and a pledge of revenue doesnot alter thecashflow of theCityorthe project. TheCity retains full control overall aspects oftheparkingsystem.This includes hours of operation,rates,etc. Hometown Plan and Parking Considerations The Hometown Plan envisions vibrant mixed uses downtown.A central and vital component ofthe realization ofthe Hometown Planisthe provision ofan "Infrastructure Parking Facility".This facility is contemplated toprovideparkingfortheexisting merchantbaseandprovideasupply of parkingforfuturegrowth. The Richman Project achieves theseobjectives.Itisavery straightforward project thatis essentially an infrastructure parkingfacilitywiththerequiredretailonthefirstfloor. TheProjectwillinclude approximately 250parkingspaceswiththetwostoryandrooftop configuration.Thedesignwouldincludethestructuralsupporttoaddanadditionaltwo floorsthatcould provide uptotal of 450spaces. Thecostanddisruption of buildingtheseadditionalfloorsinthefutureareimportantand significantfactors.Thecostperspacefortheadditionalfloorswouldbeconsiderably higherandtherecouldbea disruption totheexiting facility duringtheperiodof construction.Staff is,therefore,currentlyanalyzingthecostbenefitandneedtoprovide oneadditionalflooratthistime.Itisanticipatedthatafinal recommendation willbe madeduringthedesignprocesswhentheactualconstructioncostsaremorefully developed. Other Considerations Theschedulefortheprojecthasbeendevelopedtoaccommodatethedowntown merchants and businesses.Construction would not commence until February 2003,after the Holiday Season. TheCityand Richman also recognize thatthis facility willbea"signature"and important element of thedowntownarea.Everyeffortwillbemadetohavethearchitecturaldesign completed inan exemplary manner.TheCitywillbeissuinga competitive RFPforthe designofthe facility.Itisalso anticipated thatthecompetitive"ConstructionManagerat Risk"procedurewillbeusedforconstruction. Itshouldbenotedthatone of the City's requirementsisthe provision by Richman of a generalreleasefromSPGreleasingtheCityfromanyandallcauses of actions,claims, demandsorallegeddamagesarisingfromorrelatedtotheoriginalRFPissuedbythe City. Finally,itshouldbenotedthatthisgaragefacilitymay,dependentuponthedesign, requirespecialexceptionsforitemssuchaslotcoverage.Thereisnospecialexception requiredforheight.SpecialexceptionswillbeconsideredbytheCityseparatelythrough the planning andzoningprocess. RECOMMENDATION Approval is recommended. Attachments INCOME Parking meters (150 spaces)est.$2 per day.(3%). Decal parking (100 spaces S30 per month-3%annual increase Ticket revenue est.$12 per day-10%of meters ticketed daily. Gross Income Expenses O&M 250x210/year/3% Utilities cost per space-$60 Maintenance cost per space-S60 Insurance cost per space-$30 Supplies cost per space-S18 Miscellaneous cost per space-$12 Administrative cost per space-$30 Net before debt service Debt-3 million@5%/30 years Net Income 11.1901 Year 2 Year 3 Year 4 Year 5 YearC Year 7 Year 8 Year 9 Year 10 S109.500 $112.785 S116.168 $119,653 S123.242 $126,939 $130,747 $134,669 $138,709 $36,000 $37,080 $38,192 $39,337 S40.517 $41,732 $42,983 $44,272 $45,600 $65,700 $67,671 $69,701 $71,792$73,945 $76,163 $78,447 $80,800 $83,224 $211,200 $217,536 $224,061 $230,782 $237,704 $244,834 $252.177 $259,741 $267,533 $52,500 $54,075 $55,697 $57,367 $59,088 $60,860$62,865 $64,745 $66,687 $158,700 $163,461 $168,364 $173,415 $178,616 $183,974 $189,312 $194,996 $200,846 $193,254 $193,254 $193,254 $193,254 $193,254 $193,254 $193,254 $193,254 $193,254 ($34,554)($29,793)($24,890)($19,839)(S14.638)($9,280)($3,942)$1,742 $7,592 MIAMI DAILY BUSINESS REVIEW Published Daily except Saturday,Sunday and Legal Holidays Miami,Miami-Dade County,Florida STATE OF FLORIDA COUNTY OF MIAMI-DADE: Before the undersigned authority personally appeared O.V.FERBEYRE,who on oath says that she is the SUPERVISOR,LegalNoticesoftheMiamiDaily Business Reviewf/k/aMiami Review,adaily (except Saturday,Sunday and LegalHolidays)newspaper,published atMiamiin Miami-Dade County,Florida;that the attached copy of advertisement, being aLegal Advertisement of Notice in the matter of CITY OF SOUTH MIAMI -PUBLIC HEARING 11/20/01 ORD.RELATING TO THE YEAR 2002 GENERAL ELECTION ETC. in the XXXX Court, was published in said newspaper in the issues of 11/09/2001 Affiant further says that the said MiamiDaily Business Review isa newspaper published atMiamiin said Miami-Dade County,Florida and that the said newspaper has heretofore been continuously published in said Miami-Dade County, Florida,each day (except Saturday,Sunday and Legal Holidays) and has been entered as second class mail matter at the post officeinMiamiin said Miami-Dade County,Florida,fora period of one year next preceding the first publication of the attached copy of advertisement;and affiant further says that she has neither paidnor proniised§nvperson,firmor corporation anydiscount,rebate,comm1ssiorio\refundforthe purpose of securing ttysadye^js^rjent for publication in the said newspaper/ '$&*/{£ Sworn to and subscribe?before me this 09 defy of NOVEMBER ./A. }*FIC1AL NOTARY btAb JANETT LLERENA I NOTARY PUBLIC STATE OF FLORIDA j O.V.I-ER3EYRE pelorteftytogaoTq NO.CC 912958 MY COMMISSION EXP.JUNE 23,2004 I i : i : CITY OF SOUTH MIAMI NOTICE OF PUBLIC HEARINGS j All interested persons are hereby notified that the City Commission of- the City of South Miami,will conduct a public hearing at its regular City Commission meeting scheduled for Tuesday,November20,2001 be ginning at 7:30 PM in the City Commission Chamber,City Hall 6130 Sun- 'set Drive,to consider the following described ordinance(s): .AN ORDINANCE OFTHE MAYOR AND CITY COMMISSION OFTHE CITY OF SOUTH MIAMI,FLORIDA RELATING TO THE YEAR 2002 GENERAL ELECTION OFTHE MAYOR AND CITY COMMISSIONERS FORGROUPS,I AND IV AND POSSI BLECHARTERAMENDMENTS;SCHEDULINGTHE DAY, PLACEANDTIMEOFTHEELECTION;PROVIDINGFOR QUALIFICATION OF CANDIDATES;PROVIDING FORCLOSE OF ELECTION BOOKS;APPROVING THE OFFICIAL BALLOT; PROVIDING FOR NOTIFICATION;PROVIDING FOR SEVER-I ABILITY,ORDINANCES IN CONFLICT,AND AN EFFECTIVE DATE.(1stReading —November 6,2001)I ANORDINANCEOFTHEMAYORANDCITYCOMMISSION OFTHE CITY OFSOUTH MIAMI,FLORIDA RELATING TO CODEENFORCEMENT PROCEDURES;AMENDING SEC-.' TION 2-25 (L)OF CHAPTER 2 THE CODE OF ORDINANCES • ENTITLED "SCHEDULE OFFINES";PROVIDINGFORSEV ERABILITY,ORDINANCES IN CONFLICT,AND ANEFFEC TIVE DATE.(1stReading—November6,2001) AN ORDINANCE OF THE MAYOR AND CITY COMMISSION j OF THE CITY OF SOUTH MIAMI,FLORIDA,RELATING TOj CONTRACTS;APPROVING A LEASE AGREEMENT BE TWEENTHECITYANDMARK RICHMAN PROPERTIES,INC., FORTHE GRANTING OF AIR RIGHTS ABOVE MRPPROPER-} TY TOTHE CITY,THE LEASE BY MRPOF CERTAIN CITY PROPERTY AND THE CO-DEVELOPMENT OFA PARKING STRUCTURE PROJECT ATSW73 STREET BETWEENSW58 COURT AND 58 AVENUE;PROVIDING FOR SEVERABILITY, ORDINANCES IN CONFLICT,ANDANEFFECTIVEDATE.(1St Reading —November 6,2001) The subject ordinance canbe inspected inthe City Clerk's Office, Monday-Fridayduringregularofficehours. Inquiries concerning this item should be directed tothe City Manager's Office at 305-663-6338.j ALL interestedpartiesareinvitedtoattend. • Ronetta Taylor,CMC City Clerk CityofSouthMiami Pursuant toFlorida Statutes 286.0105,theCity hereby advises the pub-, lie that if apersondecidestoappealany decision madebythis Board, Agency or Commission with respecttoany matter considered atits meet-, ing or hearing,heorshe will needa record ofthe proceedings,andthatfor such purpose,affected person may need to ensure thata verbatim record'' ofthe proceedings ismade which record includes the testimony and evi denceuponwhichtheappealistobe based. H/g 01-3-09/212441M