Res No 004-02-11353: j ,! ! / I,f
RESOLUTION NO. 4-02-11353
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF SOUTH MIAMI, FLORIDA, RELATING TO
FINANCE; AUTHORIZING THE CITY MANAGER TO
NEGOTIATE A BRIDGE LOAN FOR AN AMOUNT NOT TO
EXCEED $2,400,000.00 AND A PERMANENT LOAN FOR AN
AMOUNT NOT TO EXCEED $8,500,000.00 FOR THE DESIGN
AND CONSTRUCTION OF A PUBLIC PARKING GARAGE
PROJECT LOCATED S.W. 73 rd STREET FOR REFINANCING
THE PROPERTY WHICH CONSTITUTES MARK RICHMAN
PROPERTIES CONTRIBUTION TO THE PROJECT;
PROVIDING AN EFFECTIVE DATE.
WHEREAS, on November 20, 2001, the Mayor and City Commission
approved Ordinance no. 35-01-1766 authorizing the City Manager to execute a
lease agreement with Mark Richman Properties, Inc. (MRP) for a parking garage
project; and,
WHEREAS, the parking garage project consists of the constmction and
operation of a parking garage stIUcture on two parcels of land, one of which is
owned by the City and the other is owned by MRP; and,
WHEREAS, the properties are generally located at S.W. 73 rd Street on the
south, S.W. 58 th Avenue on the east, S.W. 58 tli Court on the west and an alleyway
on the north; and,
WHEREAS, the lease agreement provides, among other things, that MRP
will deed the air rights over its property to the City, the City will lease additional
ground space to MRP for retail use, and the parties will co-develop the project;
and,
WHEREAS, the lease agreement is subject to, among other things, funding
of the project by the Florida Municipal Loan Council or other lender acceptable to
the City; and,
WHEREAS, Mayor and City Commission desire to authorize the City
Manager and the City Attorney to enter into negotiations with the Florida
Municipal Loan Council for a bridge loan for an amount not to exceed
$2,400,000.00 and permanent loan for an amount not to exceed $8,500,000.00 for
Additions shown by underlining and deletions shown by overstriking.
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the design and construction of the project and for refinancing the property.which
constitutes MRP's contribution to the project; and
WHEREAS, the loan documents shall be presented to the Mayor and City
Commission for approval as required by the city charter.
NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA;
Section 1. The City Manager and the City Attorney are authorized to
make application to the Florida Municipal Loan Council and to negotiate the
interest rate and the terms and conditions for a bridge loan and a permanent loan
for the purposes and the amounts stated in the "Whereas" clauses. The loan
documents shall be presented to the Mayor and City Commission and shall not
take effect until approved by the city commission as required by the city charter
Section 2. This resolution shall take effect immediately upon approval.
PASSED AND ADOPTED this 15 th day of January, 2002.
ATTEST:
/~~in_
CITYCLERK ,
COMMISSION VOTE: 5-0
READ AND APPROVED AS TO FORM:
;t;:1 b. ~I/p*
CITY ATTORNEY ,
Mayor Robaina:
Vice Mayor Feliu:
Commissioner ,Wiscombe:
Commissioner Bethel:
Yea
Yea
Yea
Yea
Commissioner Russell: Yea
\ \Dell_ 61 OO\Documents\City of South Miami\0022-023\123 87 .doc
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Res. No. 4-02-11353
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CITY OF SOUTH MIAMI
INTER-OFFICE MEMORANDUM
To: Mayor and City Comm'n.
Charles D. Scurr, City Mgr.
Subrata Basu, Ass't. City Mgr.
From: Earl G. Gallop, City Attorney
Date: January 11, 2002
1
Re: Resolution authorizing application
for FMLC loan
Subject: A resolution authorizing the City Manager and City Attorney to apply for, and
negotiate the terms and conditions of a $2,100,000 bridge loan and a $8,500,000.00
permanent loan from the Florida Municipal Loan Council.
Discussion: The city must secure financing for the parking garage project on S.W. 73 rd
Street. The project consists of the design and construction of a parking garage on two parcels
of land. The larger parcel is owned by the city and is currently operated as a surface parking
lot. The other parcel is owned by Mark Richman Properties, Inc. and is used for retail. The
existing building will be demolished and the amount of ground floor retail space will be
expanded in the project. MRP will deed the city the air rights over the MRP property, retain
title to the MRP property and lease the expanded retail space from the city. A portion of the
funds will be used to refinance the MRP property. The parties will co-develop the parking
garage structure. The city will operate the garage.
Funds from the $2,100,000 bridge loan will be used to refinance the MRP property ($1.5
million), to cover Mr. Richman's share of the architectural, engineering and other
professional-fees for project development ($300,000) and to pay for the city's share of the
project development expenses ($300,000). See attached memorandum from Mr. Figueredo,
dated January 11, 2002. The project development cost estimate includes a $100,000
contingency factor.
The-permanent loan ($8,500,000) will fund the total project cost and includes the bridge loan.
Approval of the loan agreements require further city commission action.
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Memorandum to Mayor and City Comm'n
Cc: Charles D. Scurr, City Manager
Subrata Basu, Ass't City Manager
January 11, 2002
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The parties have negotiated an acceptable release. We are awaiting execution of the lease
by the principal of SPG Phase One, Ltd. Additionally, we are awaiting execution of the
assignment of the lease between the city and SPG to MRP. Copies of the release, the
assignment of lease, and MRP lease summary are attached.
Recommendation: Approve the resolution authorizing the City Manager and City Attorney
to apply for and negotiate the loan.
MEMORANDUM
TO: Earl G. Gallop
FROM: Luis R. Figueredo ~
DATE: January 11, 2002
RE: Status of Parking Garage Project
Release Agreement
"Ve have reached an agreement with George McArdle, the representative for SPG, regarding
acceptable language for the release agreement to be executed by SPG. A copy of the release
agreement is attached for your review. The only condition which we added to our initial draft is a
requirement that the City submit a request for project financing.
Assignment
The assignment of the SPG agreement has been prepared. Attached is a copy for your
review. I am advised by Mr. McArdle that Mr. Elias is in Brazil and is expected to return next week.
MRPLease
. The MRP lease in is final form. Mr. Richman is prepared to execute the lease agreement.
I have advised Mr. McArdle that the assignment and lease agreement must be executed before
presenting the MRP lease to the City for execution. Attached is my overview ofthe MRP lease.
Bridge Loan
Based on my discussions with Mr. McArdle and Mr. Richman, we estimate that the bridge
loan should equal $2.1 million.
(i) $1.5 million will be used to refinance the MRP property;
(ii) $300,000 will be used to cover Mr. Richman's share of
architectural, engineering fees and other professional services
associated with the project development; and
(iii) $300,000 will be utilized to pay the City's share ofthe project
development costs.
Memorandum to Earl G. Gallop
January 11,2002
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At this time, it is difficult to provide a specific breakdown of the initial fees which will be
likely to be incurred. However; we estimate that the professional fees for architectural services,
engineering services and other professional fees associated with project development should not
exceed $500,000 over the course of the next 10 months. I have included an additional $100,000 to
address any unforeseen contingencies.
'",.
MUTUAL RELEASE OF ALL CLAIMS AGAINST AND BETWEEN
THE CITY OF SOUTH MIAMI, FLORIDA AND SPG PHASE ONE, LTD.
SPG Phase One, Ltd., a Florida limited partnership, its officers, partners,
successors and assigns ("SPG"), and the City of South Miami, its elected officials,
principals, officers, agents, employees and successors and assigns ("City") agree that
upon the approval and execution of the SPG/City of South Miami Lease Agreement
(attached as Exhibit 1), the approval of the assignment of that lease to Mark Richman
Properties ("MRP") the approval and execution of a replacement MRP/City of South
Miami Lease Agreement by the City Commission and the submittal of a request for
project financing by the City to the Florida League of Cities to construct the mixed use
parking structure, they each fully remise, release, acquit and discharge each other from
any and all liability, accrued or unaccrued, known or unknown, on account of any and all
manner of action or actions, cause or causes of actions, suits, debts, covenants, contracts,
agreements, judgments, executions, claims and demands whatsoever in law or in equity
which they now have or may have against each other for or by reason of any transaction,
matter, cause arising from or relating to the Request for Proposal published by the City of
South Miami for the development of a mixed use parking structure and the ensuing
negotiations and actions taken by the City and SPG as a result of SPG having been
awarded the bid, including but not limited to, any and all claims arising or which might
arise out of any and all expenditures made by either party or accounts payable owed by
either party.
The undersigns declare that they have all the necessary power and authority to
execute and deliver this release. The undersigns further declare that they have read and
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fully understand the terms of this release, including without limitation the consideration
and freely and voluntarily enter into this mutual release.
The parties agree that in the event any dispute arises in any way relating to or
arising out of this release. the prevailing party in any arbitration or court proceeding will
be entitled to recover an award of its reasonable attorneys' fees and costs.
This agreement is governed by the laws of the State of Florida.
IN WITNESS WHEREOF, the undersigned executes this release this __ day
of November, 2001.
SPG PHASE ONE,LTD., a Florida limited partnership
By: The Initial Phase, Inc., its sole general partner
Albert S. Elias. President
ALL THE ABOVE was subscribed and
sworn to this _ day of November, 2001.
Notary Public
State of Florida
My Commission Expires:
CITY OF SOUTH MIAMI, a municipality of
Miami-Dade Connty, Florida
Charles Scurr, City Manager
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ASSIGNMENT, ACCEPTANCE AND CONSENT
THIS ASSIGNMENT, ACCEPTANCE AND CONSENT (the "Assignment") is made as of
the fourteenth day of December 2002 by and between SPG PHASE ONE, LTD. a Florida limited
partnership ("Assignor"), Mark Richman Properties, Inc., a Florida corporation ("Assignee") and
the City of South Miami, a municipality located in Miami-Dade County, Florida ("Landlord")
WHEREAS the Landlord, as lessor, and Assignor, as lessee, have entered into a lease dated
(the "Lease"). -----
WHEREAS a provision of the Lease names Assignee as an approved assignee of the Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor, Assignee and Landlord agree as follows:
1. Assignment. Assignor hereby grants, bargains, sells, assigns, transfers and sets over unto
Assignee all of Assignor's right, title and interest to the Lease.
2. Acceptance. Assignee hereby accepts, any and all rights, title and interest of Assignor as
lessee under the Lease and Assignee agrees to be bound by the terms and provisions of the Lease.
3. Consent. Landlord hereby consents to the assignment of Assignor's right, title and interest
to the Lease by Assignor to Assignee and Landlord agrees to accept Assignee as the lessee under
the Lease.
4. Release. Landlord hereby releases Assi~or of all liability and responsibility under the
Lease and Landlord acknowledges that Assignor has no outstanding liabilities, obligations or debts
under the Lease prior to the effective date of this Assignment.
This Assignment shall inure to the benefit of, and be binding on, the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, Assignor, Assignee and Landlord have caused this Assignment
to be executed in their names, by their duly authorized officers, respectively, as ofthe date first
above written. .
WITNESSED: Assignor:
Mark Richman Properties Inc., a Florida
corporation
By: -----------------------Mark Richman, President
Assignee
SPG Phase One Ltd., a Florida limited
partnership
By: The Initial Phase, Inc., aFlorida
corporation and sole general partner
By: ______ --:-______ _
Albert S. Elias, President
LANDLORD:
City of South Miami, a municipality of Miami-
Dade County, Florida
By: ____________ _
Charles Scurr, City Manager
SWORN TO AND SUBSCRIBED before me this __ day of December, 2001, by Mark
Richman, as president of Mark Richman Properties, Inc. a Florida corporation, on behalf of the
corporation. He __ (a) is personally known to me, or __ (b)' has produced
as identification. ---------------------
My commission expires:
SEAL1
Notary Public -State of Florida
Name: ------------------------------
SWORN TO AND SUBSCRIBED before me this __ day of December, 2001, by Albert
Elias, as president of The Initial Phase, Inc. a Florida corporation, on behalf of the corporation. He
__ (a) is personally known to me, or __ (b) has produced ______________ _
as identification.
My commission expires:
[SEAL]
Notary Public -State of Florida
Name: -----------------------
SWORN TO AND SUBSCRIBED before me this day of November, 2001, by
Charles Scurr, as City Manager of the City of South Miami, Florida, on behalf of the City of South ..
My commission expires:
[SEAL
.' ' "
Notary Public -State of Florida
Name: --------~---------------------------
"
PROPOSED LEASE SUMMARY
1. Tenant: Mark Richman Properties ("MRP")
2. Landlord: City of South Miami
3. Guarantor: Mark Richman (see paragraph 10)
4. Demised Premises:
(a) The municipal parking lot located at S.W. 73 rd Street, S.W. 58 th Avenue,
and S.W. 58 th Court together with the air rights over the Mark Richman Property located
at the comer of S.W. 73 rd Street and S.W. 58 th Court, in the City of South Miami.
(b) Permitted use: mixed use retail and parking garage building.
5. Air Rights: MRP will deed the air rights to the City.
6. Assignment from SPG: SPG under the lease agreement with the City
specifically reserved the right to assign the Project to MRP. MRP shall obtain a formal
assignment to develop the Project from SPG.
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. Tax Abatement: During the lease term, the City shall abate its sh~lre of the ad
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
with the City.
A. A_ Initial Term. The initial term of the lease agreement with Richman
Properties will be for 50 years. There is no renewal option.
B. Ownership of the Building. The City of South Miami owns the parking
structure; including the air 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.
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E. Thirty Decal Spaces. The City will provide Richman the first option to
acquire 30 decal spaces for his tenants at the then prevailing rates. As consideration for
the easement, the City will reduce the rate charged for seven parking spaces to account
for MRP" ownership interest in the seven ground level spaces.
F. Rent Payments. The rent payments for MRP will be calculated to be
sufficient to allow for the repayment of MRP's share of the principal and interest of the
Proj ect loan.
10. Financing: TheCity of South Miami shall procure the Project loan to finance the
design and construction of the Project. The City must pledge a revenue stream such as its
parking revenues to obtain the Project financing. MRP will pledge the rental income
earned from the retail space. Mark Richman will also personally guarantee MRP's share
of the bridge loan. The remainder of MRP's share of the loan will be secured by the
Lease, the New MRP Building and the MRP Land. The bridge loan will be used to allow
MRP to pay for project related costs (including its share of the architectural and
engineering fees), refinance the MRP property (this allows the City to be in first position
as the secured creditor) and to pay for the City's'share of architectural and engineering
fees. The parties anticipate that the permanent financing for construction would be
obtained in November, 2002. The application for bridge financing will take
approximately 45-60 days to process and fund. Bank of America will require that certain
commission approvals be in place to ensure that the Project is viable before funding.
Approval of the new lease agreement with MRP should be sufficient.
10. Cost Sharing: The costs of the design and construction of the Project will be
shared as follows:
(a) The parties will participate in the design and construction costs of the
Project in proportion to each party's gross area occupation of the Project.
(b) The Landlord will pay 100% of the costs of construction of additional
parking levels on the Parking Structure which may be constructed at a future date.
(c),_ The Landlord will contribute $100,000 towards Tenant's share of the
construction costs ofthe shell of the Project.
(d) MRP will pay 100% of the costs associated with demolishing the Old
MRP building.
( e) Tenant will pay its proportionate share of the fees associated with
obtaining the bridge and long term financing based on its percentage of the Borrowings.
(f) Tenant will pay 100% of the cost of the retail space build out of the
Replacement MRP Building and the Premises.
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(g) Landlord will pay 100% of the cost of the parking structure finishes.
12. Design and Construction: The City will prepare requests for proposals for the
selection of an architect and a construction management firm.
13. Commencement of Construction: The parties estimate that construction will
commence in January-February, 2003. No holiday season construction which impacts
the retail shops by severally impacting traffic flow will occur.
14. Project Name: The City agrees to consult with MRP to select a name for the
Project.
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