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HomeMy WebLinkAboutR-03-0839J-03-580 07/24/03 RESOLUTION NO. 93 - S A9 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENT NO. 2, IN SUBSTANTIALLY THE ATTACHED FORM, TO THE LEASE AGREEMENT BETWEEN THE CITY OF MIAMI AND THE MIAMI OUTBOARD CLUB, A FLORIDA NOT-FOR-PROFIT CORPORATION, TO CORRECT THE FORMULA FOR THE CALCULATION OF COST OF LIVING INCREASES TO THE MINIMUM GUARANTEE, COMMUNITY SERVICE CREDIT, BASE RESTAURANT REVENUES AND THE ANNUAL CONTRIBUTION TO THE RESERVE FUND; AUTHORIZING THE CITY MANAGER TO ALLOCATE TO THE MIAMI OUTBOARD CLUB A NET RENT CREDIT, IN THE AMOUNT OF $26,802.00 REIMBURSING THE MIAMI OUTBOARD CLUB FOR THE PAST OVERPAYMENT OF RENT BASED ON THE INCORRECT CPI FORMULA. WHEREAS, the City of Miami ("City") and the Miami Outboard, a Not -For -Profit corporation entered into a Lease Agreement dated June 14, 1996 ("Lease") for a twenty-year term commencing on April 1, 1996, and expiring on March 31, 2016, with the option to renew for two additional five-year periods; and WHEREAS, the Lease provides for annual adjustments to the Minimum Guarantee, Community Service Credit, Base Restaurant 'ATTAC i E T 10 COTIIE CITY COMMISSION MEETING OF J U L 2 4 2003 ResolaltWn No. e�3— 839 Revenues and Annual Contribution to Reserve Fund based upon increases in the Consumer Price Index ("CPI"); and WHEREAS, on December 5, 2000, the City and Miami Outboard executed Amendment No. 1 to the Lease which provided in part that effective April 1, 2000, the Base Restaurant Revenues would be established at $10,000 per month and would no longer be subject to the CPI escalation; and WHEREAS, the formula provided for in the Lease to calculate the CPI percentage results in a compounding effect to the increase; and WHEREAS, the administration recommends that the CPI formula be amended; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are adopted by reference and incorporated as if fully set forth in this Section. Page 2 of 4 03- 839 Section 2. The City Manager is authorized!/ to execute Amendment No. 2, in substantially the attached form, to the Lease Agreement, between the City and the Miami Outboard Club, Inc., amending the formula for calculating cost of living adjustments to the Minimum Guarantee, Community Service Credit, Base Restaurant Revenues and the Annual Contribution to the Reserve Funds For Capital Improvements, as set forth in Sections 4.5 and 11.3 of the Lease eliminating the compounding effect. Section 3. The City Manager is authorized!/ to establish a net credit, in the amount of $26,802.00, to be issued to the Miami Outboard Club, which credit shall be applied against the next amount of rent and use tax due to the City, reimbursing the Miami Outboard Club for the excess rent paid as a result of the application of the incorrect CPI formula from April 1, 1996 through May 31, 2003. �i The herein authorization is further subject to compliance with all requirements that may be imposed by the City Attorney, including but not limited to those prescribed by applicable City Charter and Code provisions. Page 3 of 4 o3- 83y Section 4. This Resolution shall become effective immediately upon its adoption and signature of the Mayor.V PASSED AND ADOPTED this 24th day of July , 2003. ATTEST: 22 PRISCILLA A. TH PSO "e% CITY CLERK APPROVE 0 FORM AND CORRECTNESSZtl REJANDRO VILARELLO ITY ATTORNEY W7340:JOB:tr:AS:BSS 2/ If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission. Page 4 of 4 ,�3- 839 AMENDMENT NO. 2 TO LEASE AGREEMENT BETWEEN THE CITY OF MIAMI AND MIAMI OUTBOARD CLUB, INC. This Amendment is entered into this day of , 2003, (the "Amendment") by and between the City of Miami, a municipal corporation of the State of Florida (the "Lessor"), and Miami Outboard Club, Inc. a non-profit corporation (the "Lessee") for the purpose of modifying certain Lease Agreement between the City and Lessee dated June 14, 1996, as amended (the "Lease") as follows: WHEREAS, Lessor leased to Lessee a portion of Watson Island for a term of twenty years commencing on April 1, 1996 and expiring on March 31, 2016 with the option to renew for two (2) additional five (5) year periods; and WHEREAS, the Lease provides for annual adjustments to the Minimum Guarantee, Community Service Credit, Base Restaurant Revenues and Annual Contribution to Reserve Fund based upon increases in the Consumer Price Index (CPI); and WHEREAS, on December 5, 2000 the City of Miami and Lessee executed Amendment No. 1 to the Lease which provided in part that effective April 1, 2000, the Base Restaurant Revenues would be established at $10,000 per month and would no longer be subject to the CPI escalation; and WHEREAS, the formula provided for in the Lease to calculate the CPI percentage results in a compounding effect to the increase that was not intended; NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and in consideration of other valuable consideration the parties covenant and agree as follows: 1. Effective April 1, 1996, Section 4.5 entitled "Adjustment of Base Monthly Rent, Community Service Credit and Base Restaurant Revenues" is hereby deleted in its entirety and substituted with the following: Lessee agrees that, as provided for below, the Base Monthly Rent, the Community Service Credit and Base Restaurant Revenues shall be increased on the first day of each Lease Year (hereinafter the "Anniversary Date'), by any increase during the prior year in the index known as "United States Bureau of Labor Statistics, Consumer Price Index". The Base Monthly Rent and Community Service Credit shall utilize the "Consumer Price Index for All Items, Miami - Ft. Lauderdale, Florida", Base Year 1982-84=100 (hereinafter the "CPI'). Said adjustment shall be hereinafter referred to as the "CPI Escalation". The CPI Escalation of the Base Monthly Rent shall be equal to Base Monthly Rent in effect for the immediately preceding Lease Year plus the product of that Base Monthly Rent multiplied by the "CPI Percentage" (as defined below). The CPI Escalation of the Community Service Credit shall be equal to the Community Service Credit in effect for the immediately preceding Lease Year plus the product of that same Community Service Credit multiplied by the "CPI Percentage" (as defined below). The CPI Escalation of the Base Restaurant Revenues shall be equal to the Base Restaurant Revenues in effect for the immediately preceding Lease Year plus the product of that same Base Restaurant Revenues multiplied by the "CPI Percentage" (as defined below). The CPI Percentage shall equal the fraction (i) whose numerator equals the total of (a) the monthly Index published immediately prior to the Anniversary Date (or the nearest reported previous month), minus (b) the monthly Index published immediately prior to the Anniversary Date of the preceding Lease Year (or the nearest reported previous month) and (ii) whose denominator is the same monthly Index as (b) above. If the Index is discontinued with no successor Index, Lessor shall select a comparable index. 7 03- 839 Lessor shall compute the CPI Escalations and send a notice, with calculations, to Lessee setting forth the adjusted Base Monthly Rent, Community Service Credit and Base Restaurant Revenues within sixty (60) days of the commencement of each Lease Year or as soon as such Index is available. In the event the Minimum Guarantee increases, Lessee shall pay to Lessor within thirty (30) days of receiving such notice, the additional Minimum Guarantee owed for the months which have elapsed in the current Lease Year. In the event the Base Restaurant Revenues increase and Lessee has paid Percentage Rent based on the previous Lease Year's Base Restaurant Revenues within the months which have elapsed in the current Lease Year, Lessee shall be entitled to receive a credit against the next payment of the Minimum Guarantee of any overpayment of Percentage Rent. Notwithstanding the above, effective April 1, 2000, the Base Restaurant Revenues shall be established at ten thousand dollars ($10,000) and shall not be subject to the CPI Escalation. 2. Effective April 1, 1996, Section 11.3 entitled "Reserve Funds For Capital Improvements" is hereby amended as follows: Lessee agrees by the end of Lease Years one through five, Lessee shall deposit in a separate account by the end of each of these lease years the sum of ten thousand dollars and 00/100 ($10,000) (the "Annual Contribution') for the purpose of establishing a Reserve Fund for the sole purpose of funding "Capital Improvements" to the Lease Property, and no other purpose. A Capital Improvement is defined as a capital expenditure of five thousand dollars and 00/100 ($5,000) or more, resulting in the acquisition, improvement or addition to fixed assets in the form of buildings or improvements, more or less permanent in character and durable equipment with a life expectancy of at least three years. By the end of Lease Year five, said Reserve Fund shall have an ending balance of fifty thousand dollars ($50,000). Except for Lease Years 1 through 5, by the end of each Lease Year, the Reserve Fund shall have a minimum fund balance of fifty thousand dollars ($50,000). By the end of each Lease Year thereafter, Lessee shall make an Annual Contribution to said fund. Lessee agrees that, as provided for below, the Annual Contribution shall be increased by any increase during the prior year in the index known as "United States Bureau of Labor Statistics, Consumer Price Index for All Items, Miami -Ft. Lauderdale, Florida, Base Year 1982- 84=100 (hereinafter the "CPI') or five percent (5%), whichever is less. The adjustment utilizing the CPI Index shall hereinafter be referred to as the "CPI Escalation". The CPI Escalation shall be equal to the Annual Contribution in effect for the immediately preceding Lease 03- 839 Year plus the product of that same Annual Contribution multiplied by the "CPI Percentage". The CPI Percentage shall be equal to the fraction (I) whose numerator equals the total of (a) the monthly Index published immediately prior to the Anniversary Date (or the nearest reported month), minus (b) the monthly Index published immediately prior to the OfeGtive Date Anniversary Date of the preceding Lease Year (or the nearest reported previous month) and (ii) whose denominator is the same monthly Index as (b) above. If the Index is discontinued with no successor Index, Lessor shall select a comparable index. The five percent (5916) escalation shall be equal to the Annual Contribution in effect for the immediately preceding Lease Year plus the product of that same Annual Contribution multiplied by five percent (5%). Lessor shall compute the CPI Escalation and five percent (596) escalation and send a notice with calculations to Lessee setting forth the adjusted Annual Contribution within sixty (60) days of the commencement of each Lease Year or as soon as such Index is available, whichever is later. All Capital Improvements shall be performed in accordance with Sections 6.2 and 7.1 herein. Maintenance of the Base Fund Balance shall not waive the requirement that Lessee make the required Annual Contribution in the Reserve Fund by the end of each Lease Year. It is the intent of the Reserve Fund to facilitate the funding of Capital Improvements. The Annual Contribution required above is a minimum contribution and is not meant to limit the ability of Lessee to deposit additional monies in said fund for the purpose of funding Capital Improvements, which may be desired or required pursuant to this Lease. Except as specifically provided herein, all of the terms and provisions of the Lease Agreement shall remain in effect. 4 �j3- 839 In witness whereof, the parties hereto have executed this Amendment to the Lease Agreement on the day and year first above written. LESSOR: ATTEST: CITY OF MIAMI, a municipal corporation of the State of Florida In By: Priscilla A. Thompson Joe Arriola City Clerk City Manager APPROVED AS TO FORM AND CORRECTNESS: Alejandro Vilarello City Attorney ATTEST Signature Print Name and Title MIAMI OUTBOARD CLUB Signature Print Name and Title s si3— 839 CITY OF MIAMI, FLORIDA CA=8 INTER -OFFICE MEMORANDUM TO: Honorable Mayor and Members DATE: JJL 16 2,003 FILE: Of the City Commission SUBJECT: Amendment to Lease with Miami Outboard Club FROM: REFERENCES: Joe Arcola City Commission Agenda Chief Administrator ENCLOSURES: July 24, 2003 RECOMMENDATION: It is respectfully recommended that the City Commission adopt the attached Resolution authorizing the City Manager to execute Amendment No. 2, in substantially the attached form, to the Lease Agreement+etween the City and Miami Outboard Club ("MOC") for the purpose of correcting the formula for the calculation of cost of living increases to the Minimum Guarantee, Community Service Credit, Base Restaurant Revenues and Annual Contribution to the Reserve Fund; further authorizing the City Manager to allocate to the MOC a net credit in the amount of $11,274.44, thereby reimbursing the MOC for the past overpayment of Minimum Guarantee based on the incorrect CPI formula. BACKGROUND: The City entered into a Lease Agreement with Miami Outboard Club dated June 14, 1996 for a term of twenty (20) years with an option to renew for two (2) additional five (5) year periods. The Lease provides for annual adjustments to the Minimum Guarantee, Community Service Credit, Base Restaurant Revenues and Annual Contribution to Reserve Fund based upon increases in the Consumer Price Index (CPI). The formula provided in the Lease to calculate the CPI percentage results in a compounding effect to the increase. On December 5, 2000 the City of Miami and Lessee executed Amendment No. 1 to the Lease, which provided in part that effective April 1, 2000, the Base Restaurant Revenues would be established at $10,000 per month and would no longer be subject to the CPI escalation. 03839 The Honorable Mayor and Members Of the City Commission The proposed amendment will correct the formula effective April 1, 1996 through May 31, 2003 with the exception of the Base Restaurant Revenues that will be adjusted through March 31, 2000. Financial Impact: There is financial impact. Due to the correction of the CPI formula, a net credit in the amount of $11,274.44 shall be granted to MOC commencing with the execution of this amendment. JA:LMH I{ . - cover memo amd 2 CPI formula 03- 839