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HomeMy WebLinkAboutCC 2002-06-24 MinutesMINUTES OF SPECIAL MEETING OF THE CITY COMMISSION OF MIAMI, FLORIDA On the 24th day of June, 2002, the City Commission of Miami, Florida, met at its special meeting place in the City Hall, 3500 Pan American Drive, Miami, Florida in regular session. The meeting was called to order at 5:45 p.m. by Chairman Thomas Regalado with the following members of the Commission found to be present: Commissioner Angel Gonzalez (District 1) Vice Chairman Johnny L. Winton (District 2) Commissioner Joe Sanchez (District 3) Chairman Tomas Regalado (District 4) Commissioner Arthur E. Teele, Jr. (District 5) ALSO PRESENT: Carlos A. Gimenez, City Manager Alejandro Vilarello, City Attorney Pricilla A. Thompson, City Clerk Sylvia Scheider, Assistant City Clerk June 24, 2002 2. DISCUSSION CONCERNING STATUS OF CURRENT REVOCABLE LICENSE AGREEMENT AND MEMORANDUM OF UNDERSTANDING (MOU) WITH RACEWORKS, LLC. Chairman Regalado: Good afternoon. We have a special City Commission meeting. One item only. It is -- this session was called in the last Commission meeting. We have Assistant City Manager, Frank Rollason with a report, I believe, that all members of the City Commission have been briefed. Mr. George Luis Lopez had requested a right to be heard, and, of course, in this public hearing he will have the opportunity to do so, but, first, we are going to hear from the City Attorney and the Assistant City Manager, and the Manager regarding this only -- item that will be discussed, and immediately after that, we'll go into a CRA (Community Redevelopment Agency) meeting chaired by Commissioner Teele. Mr. City Attorney or Frank, which one of you want to -- Frank Rollason (Assistant City Manager): You want to go? I'll go. I'll go. I will go. Mr. Chairman, members of the Commission, as Chairman Regalado stated, this is a follow up to the Commission meeting on June 13th, where there were several issues that were up in the air that you directed the administration to come back with you for us to go forward with a third agreement. Since that time, the City Attorney -- and I'll let him speak to that -- but he has opined that the exchange of shares does not constitute an assignment, and as a result of that, the administration has decided not to propose a third agreement for consideration and action by the Commission. The second agreement is in full force and effect, and the administration will go forward under that existing agreement. The question of the amendment to the existing MOU (Memorandum of Understanding) -- It's true that the MOU may require a clarification amendment in the future. We're not sure if that's going to be necessary. If it is, the administration will bring that forward as a regular agenda item. As far as where we are on the agreement number two, the only thing that's left for us to comply or for Raceworks to comply with is a list of punch list items to complete the track. They are minor in nature and we're on track in completing that, and the other issue was the issue of the liability insurance for the actual race itself. There's a $20 million requirement for the insurance. They have located ten and have not located the other ten million. They indicated the other day that they have located the other ten million, and they faxed me a copy of the proposal. I received that on the 20th, and forwarded it to Risk Management for them to evaluate. Upon that evaluation, if that insurance pans out to be what's acceptable to Risk Management, it will then be our intent to go forward and issue the race permit as required under the Florida Statutes. That concludes the report. If you have any questions, I'll be glad to answer them. Commissioner Sanchez: Mr. Chairman. Chairman Regalado: Mr. City Attorney, so the basic thing is nothing has changed? Alejandro Vilarello (City Attorney): Essentially, you have an existing revocable license agreement with Raceworks and that continues to be in effect. It's revocable at the will of 2 June 24, 2002 the City Commission and until this City Commission revokes it or it's otherwise revoked by its own terms, it continues in effect. Commissioner Sanchez: Mr. City Attorney, are you satisfied with this agreement? Mr. Vilarello: Yes, sir. Chairman Regalado: OK. I need to make a correction. I said that this was the only item on the special City Commission meeting and it's not. The City Commission has to deal with the CRA boundaries, so that would be the second item in this special City Commission meeting. Mr. Lopez, you requested by fax, letter, in person, phone to be heard on this matter. This -- as you have heard, this doesn't change much the nature of the past documents, so -- but go ahead, sir. George Lopez: Thank you, Mr. Chairman. George Lopez, Steel, Hector and Davis representing Homestead Miami Speedway, and I thank you, Mr. Chairman, for this opportunity. I will keep it brief. I know this Commission, in its special meeting, has a very aggressive agenda, but I think there's one major point of separation between where we stand and you stand is that your perception that nothing has changed. In fact, a lot has changed, the reason you're here today is that this Commission acknowledged that a substantial change in the ownership of the company that you originally did and agreed to do business with. A court of law refuted your ability to do so under a no -bid deal, and more importantly, you have entered into a new agreement -- is a substantial change. We have requested some documentation, and I want to thank those who have provided it to us just now. Under most principles of due process, that's kind of stretching, but we'll work through it. We will tell you that when you advertise in the Miami Herald that you're going to take up the two documents you claim are no longer to be taken up. That may be misleading. When you publish on your website documents that are no longer accurate, valid or in effect, that may be misleading, and, therefore, we operate under the assumption that there is a lot of change going on, and that to assume that none is taking place is also misleading, but I think there are three very important observations that need to be made, and we pray that this Commission will once again consider stopping this nonsense -- Note for the Record: Commissioner Winton entered the meeting at 5:52 p.m. Mr. Lopez: -- and giving us -- as long as other people -- an opportunity to enter into a competitive bid process. This no -bid deal for up to 25 years for the exclusive use of public waterfront property is not in the public's best interest. There is a legal duty that I think began last Commission meeting to investigate who you're doing business with. There is a legal duty to provide the public with information, and I've told you on numerous occasions that that's not always been forthcoming, and then, more importantly Chairman Regalado: Yes, sir. 3 June 24, 2002 Vice Chairman Winton: Who's chairing this meeting, please? You are? Chairman Regalado: Yeah, I am. Vice Chairman Winton: Thank you. So how long does this -- Chairman Regalado: Five minutes. Mr. Lopez: We appreciate that, Mr. Chairman. More importantly, your ethical obligation to understand who you're doing business with to determine whether, in fact, you may or may not be entering into a contractual conflict, or a direct or indirect conflict is also something to be -- must be considered, but more importantly, you do have an obligation -- a fiduciary obligation before you vote on an agreement that you've already passed on, now claim you're not going to have to pass on again, but some of you will also vote on a loan within 48 hours of today of up to $1.5 million of public money. You do have an obligation to review -- Chairman Regalado: We're not doing that today. No, no. Mr. Lopez: No, sir. Chairman Regalado: There's no money involved. Mr. Lopez: Not today, but -- Commissioner Teele: For the record, it's up to $2 million. Mr. Lopez: Thank you. -- the fiduciary duty to investigate who you're doing business with, I think, inures to the companies that have already been identified before you. You have a package of information that your staff has provided you, which is current, except that it's not completely current. It indicates -- your own financial analysis indicates that you're about to enter into possibly a loan agreement -- again, possibly up to $2 million -- with a company that has an operating net loss, a company whose stock has been dropping successively, and a package of information that doesn't completely disclose the directors of the company CART (Championship Auto Racing Team), which you are about to allow to acquire a majority interest in this company Raceworks, which originally started by two local individuals that came before you with a pretty good idea. We request, Mr. Chairman, that you would, respectfully, reconsider where you are today; that you honor the various questions that were asked at the last Commission meeting, which are not answered here today, including the issue of flipping this deal, including the issue of letting parties do business with companies that do not disclose who their principals are, and certainly -- and certainly, complete your obligation to review that transaction in earnest. Mr. Chairman, I want to close by making one observation and with the highest respect to the City Attorney. If you are to rely on the opinion given to you on this issue of assumption, I think you need to keep three things in mind. Number one, none of these appear to be Florida cases. Number two, none of these cases appear to be dealing with a 4 June 24, 2002 revocable license, and number three, this issue is before the courts and will ultimately be passed on by either the Third District Court of Appeals or a lower tribunal. I thank you for the time. I appreciate your consideration and patience, and would hope that you would consider our arguments of some validness and act upon them accordingly. Thank you, Mr. Chairman, honorable members of this Commission. Chairman Regalado: Thank you, sir. Thank you. Mr. City Attorney, anything else that we need consider before a motion? Mr. Vilarello: No, Commissioner, and there's no motion necessary. Commissioner Sanchez: There's no motion. Chairman Regalado: Oh, there is no motion. Just a report because there have been no change, at all. Commissioner Teele: Mr. Chairman. Chairman Regalado: Yes, sir, Commissioner Teele. Commissioner Teele: Mr. Chairman, again, I'm always nervous when so many things are put on the record, nobody responds, because a judge looking at the record sort of may have the feeling that we're potted plants, or we're not paying close attention, and I want to, at least, respond to counsel in a direct way of saying that I've certainly reviewed the matter with the staff and with the Attorney. In fact, I've spend considerable time with the City Attorney on the matter. I'm convinced that the opinion of the Attorney is sound and that no transfer or assignment has been made. I'm comfortable with the disclosures as to who the owners are and the -- you said that there's no record of the directors, Mr. Lopez? Mr. Lopez: I'm sorry, Commissioner. There's not a complete record of the directors of CART. For example, Mr. Ralph Sanchez is now director of CART and he's not listed in your documentation. Commissioner Teele: Are you saying CART or the local company? Mr. Lopez: CART. Commissioner Teele: Well, he argued both on the record. He said it was -- yeah, but he argued both on the record. He said that there's no complete list of directors of CART, and then he said, although, it was formed by two local individuals. Now, I mean, the record will speak for itself, but I don't want to split hairs with you. I just want to be very clear, Mr. Lopez. Are we talking about the local company called Raceworks, or are we talking about CART? Mr. Lopez: As we understand it, we're talking about both, Commissioner, just to answer your question. 5 June 24, 2002 Commissioner Teele: No. Which one are you referring to when you said -- Mr. Lopez: I'm referring to this package of information that was distributed to you and that's CART. Commissioner Teele: OK, but you made the argument that we don't have a list of the directors, and I would just want -- Mr. Lopez: Complete list, sir. Commissioner Teele: Of which directors? Mr. Lopez: Complete list of the majority interest holder in CART, which, in essence, is the same now. If you're -- by the representations here today, you accept the fact that CART now may own -- having acquired (UNINTELLIGIBLE), 33 and a half percent convertible interest, holding 97 percent of this company. It really is academic. Whether there's three local or 12 national players, it's all the same company. CART is a majority -- a substantial majority interest holder in this company and you don't have a complete list. Commissioner Teele: And you're not satisfied with the IOK disclosures of CART or the Q disclosures of CART? Mr. Lopez: Commissioner, we're -- it's not really up to us to be satisfied -- Commissioner Teele: But you're -- I mean, but the question was you said we're not, and I just want to be on the record that I looked at the I OK and I looked at the Q and -- Mr. Lopez: It's not up-to-date, sir. Commissioner Teele: Well, that's an SEC (Securities and Exchange Commission) matter. I think we ought to be able to rely, to some extent, on a public disclosure before the Securities and Exchange Commission. Mr. Lopez: Not to argue with you, sir. That is absolutely correct, except that if you just simply go to their Web site, you'll see who their directors are. You may be relying on information that's stale, and, therefore, once again, if you're going to make these decisions, we simply want to encourage you to have a complete review of all the information. Commissioner Teele: But I think we agree that CART is a publicly traded company. Mr. Lopez: Yes, sir. Commissioner Sanchez: Mr. Rollason, did you perform or did you get a firm to perform due diligence? 6 June 24, 2002 Mr. Rollason: Yes, we did. Commissioner Sanchez: OK. Mr. Rollason: And the results of that were delivered to you today. We also had the information off the web that gave us the biographies and those people that were listed as the officers of CART, and then we had one of our financial advisors perform the same due diligence over the weekend, and they produced a document that was delivered to you today. Commissioner Sanchez: And, if at any time we are not satisfied with the corporate ownership, we could make a motion to revoke the license agreement. Mr. Rollason: That's correct. Commissioner Sanchez: Each of us can do that at any time. Mr. Rollason: That is correct. Commissioner Teele: Mr. Attorney, I would only ask that the record that has been delivered be made a part of this proceeding. Since -- I mean, you know, we need to make a record, as well, Mr. Attorney, and I just continue to -- I mean -- Mr. Vilarello: Mr. Chairman, I -- Commissioner Teele: I think a balanced record should be presented. Mr. Vilarello: And, certainly, the legal opinion that I've issued -- MI number 02013 -- certainly is something that should be made a part of the record, as well as the advice given to us by our financial advisors. I simply do not respond to Mr. Lopez, as I've issued a written legal opinion that clearly asserts the difference of the legal issues that his -- he and his client may take to court, and in fact, the very first -- Commissioner Teele: Mr. Attorney. Mr. Vilarello: -- case cited -- yes. Commissioner Teele: Mr. Attorney, please just understand what I'm responding to. I'm not responding to your opinion. I'm responding to the very personal challenge of the members of this board who do have a duty to make certain determinations, and those challenges I think he said were ethical. I'm not sure I would characterize them totally as ethical, but Mr. Lopez did and I'm very sensitive to that because I think the record should be clear that we have made an effort. I sat down with you -- I mean, not to waive an attorney-client privilege -- but I sat down with you and went through the various owners of companies in your office, and I just don't want a record to go up and make it look like 7 June 24, 2002 I'm a, you know, knot on a log sitting here not doing what I think Mr. Lopez is suggesting we should do, and I think Mr. Lopez is correct in asserting that we should ensure that the public interest is being protected and that the revocability issues are with us, and if any of us, individually, are not certain, we do have the right -- if that's correct - - to come back and challenge. Mr. Vilarello: Yes, sir. Chairman Regalado: OK. Counsel for the Raceworks doesn't -- do you want to add anything at all? Lucia Dougherty: Not at this time, other than just thank you and thank the City Commission and also the City Attorney -- Commissioner Teele: Your name and address for the record. Chairman Regalado: Name and address. Ms. Dougherty: Lucia Dougherty, with offices at 1221 Brickell Avenue. I'd like to thank the City Manager's office and the City Attorney's office. They have worked tirelessly and endlessly in trying to resolve all of these issues, and we are very grateful for that. Chairman Regalado: OK. OK. Since there is no need for a vote, we move on to the other item on the special City Commission meeting, CRA boundaries. Commissioner Teele: Good to see you, Mr. Lopez. Chairman Regalado: Mr. Manager. Carlos Gimenez (City Manager): Yes, sir. Chairman Regalado: There are several proposals. Mr. Gimenez: This item was brought -- was requested by Annette Lewis, the Acting Executive Director of the CRA, as an ordinance that would amend, I guess, the plan and the boundaries of the CRA, so I suppose that they have a presentation for the Commission. Commissioner Teele: Mr. Chairman. Chairman Regalado: Yes, sir. Mr. Vilarello: Mr. Chairman. I'm sorry, Commissioner Teele. This was noticed as a separate special Commission meeting, as opposed to a second item of the other Commission meeting, so just -- 8 June 24, 2002 Chairman Regalado: OK. Mr. Vilarello: -- for the record, the first meeting should be adjourned. This is a new special Commission meeting. Chairman Regalado: OK, so we have -- Commissioner Teele: Motion to adjourn the pre -- the meeting. Commissioner Sanchez: Second. Chairman Regalado: It's been moved and second, a motion to adjourn the first special City Commission meeting. All in favor, say "aye." The Commission (Collectively): Aye. Chairman Regalado: It passes. The following motion was introduced by Commissioner Teele, who moved for its adoption: MOTION NO. 02-718 A MOTION TO ADJOURN THE SPECIAL MEETING CONCERNING THE STATUS OF THE CURRENT REVOCABLE LICENSE AGREEMENT AND MEMORANDUM OF UNDERSTANDING (MOU) WITH RACEWORKS, LLC. Upon being seconded by Commissioner Sanchez, the motion was passed and adopted by the following vote: AYES: Chairman Tomas Regalado Vice Chairman Johnny L. Winton Commissioner Angel Gonzalez Commissioner Joe Sanchez Commissioner Arthur E. Teele, Jr. NAYS: None ABSENT: None Note for the Record: Following the Special Session of the City Commission stated above, the City Commission again reconvened another Special Session to consider an ordinance on second reading to extend the boundaries of the CRA. 9 June 24, 2002