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Home My WebLink AboutR-00-0560a. Y Z"�•� J-00-1139 6/29/00 RESOLUTION NO. A RESOLUTION OF THE MIAMI CITY COMMISSION ACCEPTING THE VOLUNTARY CANCELLATION OF THE REVOCABLE PERMIT AGREEMENT BETWEEN CALOR DEVELOPMENT, LTD., AND THE CITY OF MIAMI, TO CONSTRUCT AND OPERATE A PARKING LOT AT APPROXIMATELY NORTHWEST 8TH STREET, EAST BISCAYNE BOULEVARD, MIAMI, FLORIDA; AUTHORIZING THE CITY MANAGER TO INSTRUCT THE DIRECTOR OF ASSET MANAGEMENT TO PREPARE A REQUEST FOR PROPOSALS INCLUDING- CERTAIN MINIMUM BID STANDARDS COMMENSURATE WITH A FIRST CLASS PARKING LOT TO BE APPROVED BY THE CITY'S PLANNING AND ZONING DEPARTMENT, FOR THE COMMISSION'S CONSIDERATION; FURTHER AUTHORIZING THE CITY MANAGER TO TAKE POSSESSION AND CONTROL OF SAID PARKING LOT FACILITY AND TO UTILIZE OPTIONS AVAILABLE TO HIM TO MANAGE THE FACILITY SUBJECT TO RATIFICATION BY THE CITY COMMISSION. BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The voluntary cancellation of the Revocable Permit Agreement between Calor Development, Ltd., and the City of Miami, to construct and operate a parking lot at approximately Northwest 8th Street, East Biscayne Boulevard, Miami, Florida, is accepted by the City. CITY COMOSSION MEETING OF JUN 2 9 2000 Resuludon No, 00- 560 Section 2. The City Manager is instructed!' to direct the Director of Asset Management to prepare a Request For Proposals including certain minimum bid standards commensurate with a first class parking lot facility to be approved by the City's Planning and Zoning Department subject to the Commission's consideration. Section 3. The City Manager is further authorized 21 to take possession and control of said parking lot facility and utilize options available to him in managing the said facility subject to ratification by the Commission. Section 4. This Resolution shall become effective immediately upon its adoption and signature of the Mayor .3/ 1� 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. 2� Ibid. 3/ 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 2 of 3 00— 560 • PASSED AND ADOPTED this 29th.*, -j day of June 2000. JOE CAROLLO, MAYOR in accordance with Miami Code -Sec. 2-36, sins® the Mayot did not indicate approval of ATTEST: this legislation by signing it In the designated pI becomes effective with the elapse of *jrf-(1 0) daysdate of C:LmFT4:S5 ciicn regarding same, without the Mayor e#ercisin9_ave F WALTER J. FOEMAN CITY CLERK APPROV,a� A,$' TO FORM 40 09ANDF0 .,WA,ftLLO CITY ATTORNEY W5431:LN:BSS J. CORRECTNESS:t/ I Page 3 of 3 00- 560 0 CITY OF MIAMI, FLORIDA 28 INTER -OFFICE MEMORANDUM TO: The Honorable Mayor and Members of the City Commission FROM DATE: FILE: TOO SUBJECT : Discussion regarding License Agreement between City of Miami and Calor Development, Ltd. For REFERENCES: Parking ENCLOSURES: This memorandum serves as a follow-up to the discussion item on June 8, 2000, regarding a review of the terms and conditions of the Revocable License Agreement ("Agreement") between the City and Calor Development, Ltd. ("Calor" or "Licensee") for construction and operation of a surface parking area at approximately NW 8 Street, east of Biscayne Boulevard. The Department of Internal Audits and Reviews has reviewed the Agreement. They have noted that while the Agreement may have been conceived and signed with the best intentions, the absence of a competitive bid may have resulted in the Agreement being perceived as an arrangement designed and contrived to favor the .Licensee. The audit report is presently being finalized. Upon -its availability, the report will be distributed under separate cover to the City Commission prior to the June 29, 2000 meeting. The information contained in this report as well as an investigation on the feasibility'of the City operating this parking facility will provide me the adequate information to recommend a course of action. Additionally, The Parking Network, Inc., a private, independent company, reviewed the revised revenue and expense projections prepared by Asset Management. Calor provided the City current data as to the number of events to be held at the arena and the fees to be charged. This resulted in an adjustment to the revenue and expense data. The Parking Network determined the revised projections to be reasonable given the assumptions provided. They further acknowledged that the uncertainty of a term may make it difficult to attract bidders willing to risk the capital necessary to construct the parking lot. A copy of their letter dated June 20, 2000 and the revised projections is attached hereto as Attachment 1 for reference. Based on the foregoing, bidding this project may not result in a greater return to the City given the uncertainty of a term even if the City reduces the amount of required improvements to construction of the parking facility. In the event the Commission elects to issue a request for proposal for this parking facility, I am attaching hereto as Attachment 2 highlights of the scope of services by.which the bidders would be asked to submit proposals. CAG:GZm Pkg Disc 6-29-00 ThePwkft maw hic- ' T 26M er eay w Boar wv • •ff&v& R • sa1r7 June 20, 2000 Lori Bilberry OfEce of Asset ManageeMM City of Mrami 444 SW 2°d Avenue 3`d Floor Miami, FL 33130 Dear Ms. Merry- CACHMENT Ig As you requested, I have reviewed the revised revenue and expense projections presented in your fox dated 06!19100. I believe these projections are accurate under the asmnnpd a given, most notably the following I. The rate schedule is adhered to strictly and the average parking fee is $14.55- 2. "Stacking" can only be done when valet service is provided. 3. The lot is onky used for areae events. As we discussed, an accurate comparison of this itfformatiou with other parking proposals would require the development of a detailed RF.P. outlining these same operational requirements. This could result in a "Lease" or "Concession" agreement that would give the City a guaranteed amount of income or a percentage of gross revenue, whichever is higher. The operator would then cover their indW investment, operating ogxm es and potential profit with the balance of the revenue. However, given the uncertain term of the subject agreement, it may be difficolt to attract bidders willing to nsk the capital for the necessary improvements. I hope this information is useful. I will forward some sample R.F.P. docaments for. your review. Please let me know if you require additional information. S' y, Fred Bredemeyer Project Team Leader The Parking Natworkg Inc. tialpaaW P2Wruff ,- Ma@jeft (3"JW14W" • NwY PARKING - CALOR VALET NO STACKING Proiected Revenues No. of Spaces 119 No. of Events 110 Avg Parking Fee $ 14.55 Percentage Occupancy 100°l0 Gross Revenue $ 190,460 Less Sales Tax & Pkg Surcharge $ 41,430 Net Revenue $ 149,029 Proiected Expenses $ 50,623 Annual Growth Rate 3% Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Net Revenues $ 74,515 $ 153,500 $ 158,105 $ 162,848 $ .167,734 i Oper Exp $ . 25,312 $ 52,142 . $ 53,706 $ 55,317 $ 56,977 N OI before fee to City $ 49,203 $ 101,359 $ 104,399 $ 107,531' $ 11'0,757 City Fee $ 31,956 $ 31,950 $ 31,950 $ 57,510 $ 60,386 NO[ after City fee $, 17,253 $ 69,409 $ 72,449 $ 50,021 $ 50,372 City Fee as % of NOI 65% 32% '5A 550% City Fee as % of Gross 43% 21% .31% 20% 35% 36% IRR Initial Investment $ (528,000) i 2000 $ 17,253 j 2001 $ 69,409 2002 $ 72,449 2003 $ 50,021 Jan -Jun, 2004 $ 25,186 IRR if terminated Dec 2002 -39% IRR if terminated Jun 2004 -23%. * Yr 1 revenue and expenses divided by 2 since not currently in operation; Calor has paid City fee since Jan, '00 PARKING - CALOR VALET STACK +24 Projected Revenues No. of Spaces No. of Events Avg Parking Fee Percentage Occupancy Gross Revenue Less Sales Tax & Pkg Surcharge Net Revenue Proiected Expenses - Annual Growth Rate 143 110 $ 14.55 92% $ 210,562 $ 45,803 $ 164,759 $ 50,623 3% IRR Initial Investment $ (528,000) 2000-$ 25,118 2001 $ 85,610 2002 $ 89,137 2003 $ 67,209 Jan -Jun, 2004 $ 34,038 IRR if terminated Dec 2002 #NUM! IRR if terminated Jun 2004 -16% Yr 1 revenue and expenses divided by 2 since not currently in operation; Calor has paid City fee since Jan, '00 0- B60 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Net Revenues $ 82,379 $ 169,702 $ 174,793 $ 180,036 $ 185,438 Oper Exp $ 25,312 $ 52,142 $ 53,706 $ 55,317 $ 56,977 NOI before fee to City $ 57,068 $ 117,560 $ 121,087 $ 124,719 $. 128,461 City Fee $ 31,950 $ 31,950 $ 31,950 $ 57,510 $ 60,386 NOI after City fee $ 25,118 $ 85,610 $ 89,137 $ 67,209 $ 68,075 City Fee as % of NOI 56% 27% 26% 46% 47% City Fee as % of Gross 39% 19% 18% 32% 33% IRR Initial Investment $ (528,000) 2000-$ 25,118 2001 $ 85,610 2002 $ 89,137 2003 $ 67,209 Jan -Jun, 2004 $ 34,038 IRR if terminated Dec 2002 #NUM! IRR if terminated Jun 2004 -16% Yr 1 revenue and expenses divided by 2 since not currently in operation; Calor has paid City fee since Jan, '00 0- B60 PARKING - CALOR STACK +35 Projected Revenues _ No. of Spaces 154 No. of Events 110 Avg Parking Fee $ 14.55 Percentage Occupancy 92% Gross Revenue $ 226,759 Less Sales Tax & Pkg Surcharge $ 49,326 Net Revenue $ 177,433 Proiected Expenses $ 50,623 Annual Growth Rate 3%. Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Net Revenues $ 88,716 $ 182,756 $ 188,238 $ 193,885 $ 199,702 Oper Exp $ 25,312, $ 52,142 $ 53,706 $' 55,317 $ 56,977 NOI before fee to City $ 63,405 $ 130,614 $ 134,532 $ 138,568 $ 142,725 City Fee $ 31,950 $ 31,950 $ 31,950 $ 57,510 $ 60,386 NOI after City fee $ 31,455 $ 98,664 $ 102,582 $ 81,058 $ 82,340 City Fee as % of NOI 50% 24% 24% 42% 42% City Fee as % of Gross 36% 17% 17% 30% 30% IRR Initial Investment . $ (528,000) 2000 $ 31,455 2001 $ 98,664 2002 $ 102,582 2003 $ 81,058 Jan -Jun, 2004 $ 41,170 IRR if terminated Dec 2002 ; -29% IRR if terminated Jun 2004 -12% Yr 1'revenue and expenses divided by.2 since not currently in operation; .Calor has paid City fee since Jan, '00 r PARKING - STACKING ONE ADD'L ROW (+35) LESS 5 RUNNERS Projected Revenues No. of Spaces 154 No. of Events 110 Avg Parking Fee $ 14.55 Percentage Occupancy 92% Gross Revenue $ 226,759 Less Sales Tax & Pkg Surcharge $ 49,326 Net Revenue $ 177,433 Projected Expenses $. 32,775 Annual Growth Rate 3%u Net Revenues Oper Exp NOI before fee to City City Fee NOI after City fee City Fee as % of NOI City Fee as % of Gross IRR Yr 1" Yr 2 Yr 3 Yr 4 Yr 5 $ 88,716 $ 182;756 $ 188,238 $ 193,885 $ 199,702 $ 16,388 $ 33,758 $ 34,771 $ 35,814 $ 36,889 $ 72,329 $ 148,997 $ 153,467 $ 158,071 -$ 162,813 $ 31,950 $ 31,950 $ 31,950 $ 57,510 $ 60,386 $ 40,379 $ 117,047 $ 121,517 $ 100,561 $ 102,428 44% 21% 21% 36% 37% 36% 17% 17% 30% 30% Initial Investment $ (528,000) 2000 $ 40,379 2001 $ 117,047 2002 $ 121,517 2003 $ 100,561 Jan -Jun, 2004 $ 51,214 IRR if terminated Dec 2002 -24% IRR if terminated Jun 2004 -6% ' Yr 1 revenue and expenses divided by 2 since not currently in operation; Calor has paid City fee since Jan, '00 U_ VALET SERVICE Number of Events 110 Projected Expenses Labor Statistics Cashiers Runners Cashiers Runners Number of Employees., 2 6 I Hours/Event 6 6 6 6 Hourly Rate $6 $4.25 $6 $6.00 Payroll $24,750 Payroll Taxes $2,225 Workers Compensation $1,780 Profit Sharing $619 Group Insurance (20% of Payroll) $4,950 Management Fee $7,200 Supplies $2,400 Repairs & Maintenance $1,200 Liability Insurance $4,000 Licenses $500 Uniforms $100 Professional Services $900 TOTAL $50,623 SELF PARK STACKING Number of Events 110 Projected Expenses Labor Statistics Cashiers Runners Number of Employees 1 Hours/Event 6 6 Hourly Rate $6 $6.00 Payroll $11,880 Payroll Taxes $1,068 Workers Compensation $854 Profit Sharing : $297 Group Insurance (20% of Payroll) $2,376 Management Fee $7,200 Supplies $2,400 Repairs & Maintenance $1;200 Liability Insurance $4,000 Licenses $500 Uniforms $100 Professioanl Services $900 TOTAL $32,775 • 0 AVERAGE PARKING RATE BASED UPON EVENTS & RATES CHARGED BY CALOR MAXIMUM OCCUPANCY 100% of 143 spaces 100% of time 15,730 DIVIDED BY PROJECTED OCCUPANCY 100% of 119 spaces 100% of the time 13,090 100% of additional 24 stacking spaces 50% of the time 1,320 14,410 POTENTIAL OCCUPANCY 92% U- X60 spaces Occup Events Rate Gross NBA Preseason 119 100% 119 3 $ 20.00 $ 7,140.00 NBA Regular 119 100% 119 41 $ 20.00 $ 97,580.00 NBA Post 119 100% 119 3 $ 20.00 $ 7,140.00 VVNBA 119 100% 119 18 $ 10.00 $ 21,420.00 Major Concerts 119 100% 119 6 $ 15.00 $ .10,710.00 Family Shows 119 100% 119 15 $ 10.00 $ 17,850.00 Theater 119 100% 119 4 $ 10.00 $ 4,760.00 Minor Concerts 119 100% 119 20 $ 10.00 $ 23,800.00 TOTAL 119 110 $ 190,400.00 AVG RATE $ 14.55 MAXIMUM OCCUPANCY 100% of 143 spaces 100% of time 15,730 DIVIDED BY PROJECTED OCCUPANCY 100% of 119 spaces 100% of the time 13,090 100% of additional 24 stacking spaces 50% of the time 1,320 14,410 POTENTIAL OCCUPANCY 92% U- X60 C C ATTACE MENT 2 HIGHLIGHTS OF SCOPE OF SERVICES FOR PARKING FACILITIES AT APPROXIMATELY NW 8 STREET, EAST OF BISCAYNE BOULEVARD The intent of the RFP will be to awarda. revocable license agreement ("Agreement") forthe operation of a parking facility ("Facility") in the area shown in Exhibit A attached hereto. Operator shall furnish the highest -caliber parking service on a fair and reasonable basis to all patrons. The Operator shall operate the Facility in a first-class, efficient and economical manner. Operators shall be permitted to operate the parking facility as a self -park facility or valet facility. No stacking of vehicles will be permitted unless providing a valet service. TERM The Agreement will be on a month-to-month basis. MONTHLY FEE TO CITY OF MIAMI The Proposer must include in its proposal the fee to be paid to the City. The proposed fee must include a guaranteed amount to the City. Proposers are encouraged to provide an additional fee to the City based upon a percentage of gross sales. TERMINATION Either party may cancel the Agreement at any time, (60) days advance notice to the non -canceling party. INSURANCE without cause, upon by providing not less than sixty Prior to the commencement of the Agreement, the operator shall fumish to the City proof of insurance in the form and amounts required by the Department of Risk Management. CONSTRUCTION OF PARKING FACILITIES Proposer, at its sole cost and expense, will be required to design and construct the Facility within the area identified in Exhibit A. The Facility shall be an asphalt paved parking lot constructed in accordance with the South Florida Building Code and City of Miami Zoning Ordinance. The Facility shall include lighting in compliance with applicable provisions of the South Florida Building Code and landscaping in compliance with the Miami -Dade County Landscape Ordinance. The Facility shall be a voluntary contribution to the City. AVAILABILITY OF SERVICES The Facility shall be offered to patrons of the American Airlines Arena and surrounding area in connection with scheduled entertainment events. PARKING RATES Proposers must include in its proposal a listing of the rates to be charged. Parking rates will be reviewed as to reasonableness. Any change to the parking rates from that proposed will require the prior written consent of the City Manager. 0- 560 W :AV PARKING EQUIPMENT AND SUPPLIES' All equipment and supplies, includimg but not limited to, valet parking stand(s), booth(s), cash register(s), and tickets, required for the operation of the parking facility shall be supplied by, and at the expense of the operator. REFUNDS Proposers must incl ' ude in its proposal a statement describing the circumstances and procedures whereby refunds will be provided to patrons.. OPERATIONAL PLANS Proposers shall submit a concise -description and organizational chart, outlining their methods of operation, operational structures and services to be. provided. This description should demonstrate the'. . Proposer's intended methods for recruiting, hiring, training, termination, staffing levels, pay schedules V and supervision. Proposers are encouraged to provide any other pertinent information which will assist the City in evaluating the proposed method of operation. EXPERIENCE Proposers shall submit a statement of Proposer's experience in providing and managing similar parking facilities. If a Proposer does, .not possess experience similar to the services required, Proposer must' provide any pertinent information 'or experience that will qualify them for consideration of award. OPERATING COSTS Proposer shall be fully responsible for all operating expenses associated with the Facility, including, but not limited to, maintenance, operation, utilities, waste removal, upkeep, taxes and parking surcharge., EMPLOYEE UNIFORMS AND IDENTIFICATION Proposer shall provide all employees with a sufficient number, of full uniforms (top and bottom).. All employees will be dressed in clean, neat -appearing uniforms. Cost of the unif6rms will be borne by the operator. FINANCIAL ACCOUNTABILITY Proposer shall be financially responsible for all cash shortages and missing, lost and unaccounted for tickets. Missing, lost or unaccounted for tickets shall be calculated at the maximum daily rate. EVALUATION CRITERIA Price to customers Ability, capacity and skill of proposer Experience Completeness of Proposed Operational, Plan Fee to City of Miami Minority Participation 1 06•'29.00 THU 11:18 FAX 305 37 0 0 802 VIA COL'MR MN—VI HEAT EXEC —L�t'M 1A 002 1 ` AsnotaalcAf iaa v of Basketball and Enterblomtnt Color Development Miami HEAT AmericanAirlines Arena Miami SOL TO: Mayor Joe Carollo FROM: Jay Cross Comm. Willy Gort Comm. Tomas P. Regalado Comm. Joe M. Sanchez Comm. Arthur Teele, Jr. Comm. Johcmy Winton City Manager Carlos Girnenez SUBJECT: parking Facilities Revocable Licensc DATE. June 28, 2000 Agreement Issued by the City of Miami to Calor Development Ltd. for the Occupancy of Property Located North of NW 811 Street and East of Biscayne Boulevard dated December 14, 1999 It would seem that the above -referenced Revocable License Agreement (the "Agreement") between the City of Miami and Calor Development has become a subject of.some debate. The Agreement has caused more trouble than it is worth and to avoid further needless 'controversy, 1: am writing to set the record straight and to exercise our right to cancel the Agreement_ Several months before the opening of the Arena, we were concerned with the condition of the City -owned property of approximately 56,600 square feet at the head of the slip (see attached map). The land was then being rented from the City as a staging area by the Arena's contractors, and the shoreline was a hazard for pedestrians and an eyesore on national television. Calor proposed to clean up the area, develop it into a temporary parking lot, repair the decrepit shoreline, and donate the improvements to the City. The total cost for the improvements to the area around the head of the slip was projected to be approximately 5545,000. The City Commission agreed with our proposal and expressly directed the City Manager and Attorney to enter into an agreement to beautify the area and to construct and operate a parking lot. The City Commission imposed two conditions: that it be compensated $2.5001month and that it have the discretion to revoke the License on 30 -days' notice. For the record, the attached map clearly identifies the proposed parking facility as designed by our landscape architects Curtis & Rogers The area to the north of the proposed parking lot, in Bicentennial Park, adjacent to the pump -out facility was outside the scope of this Agreement and was not intended to be used by and was never used by BPL, Calor or the Miami Heat to park vehicles. calor Submitted into the public; record in connection with item on z q - V Walter Foeman City C4eit calor oewtopment 6m Biscayne eaulmrd Miami, Fiorillo 33132 Tot 786 777-IW0 WWW.oaanna. r, ty — J 6 i_, 08.29• 00 THC 11: 19 FAX 303 30802 NiAMI HEAT EXEC ® 003 Page 2, Although the original intent was to make the improvements immediately, we encountered several unexpected delays. The .Arena contractors did not vacate the site until early March because of their continued work on the Arena. In addition, because of the sensitivity of shoreline matters and the complications of drainage for the parking facility, we have not been able to proceed as rapidly through the design and permit process as we had hoped. To date, we have made approximately $180,000 of the improvements to the shoreline and have applied for the permits necessary to complete the worm as verified by the upcoming City Auditor's report. Because the work is still to be completed, we have been unable to park cars there during Arena events but have nevertheless paid our monthly rent to the City. In exchange for making the improvements and donating them to the City, operating the parking facility would have provided an opportunity to earn some minimal, below-market return on our investment of over half -a -million dollars. Clearly, this undertaking involved a high degree of risk because the Agreement is revocable by the City on 30 -day's notice. In any case, the lot would have to be abandoned when FDOT begins widening Biscayne Boulevard in approximately three years, which means that we were unlikely to ever got our investment back. By entering into the Agreement, the City was to become the beneficiary of the physical improvements in the amount of $540,000, the monthly rent of $2,000 per month, and the City surcharge collected. The thought that there was somehow "money 'to be made" on this property is a misperception. In fact, there was a great deal of money to be spent with little prospect to recoup. We believed that we had structured a unique public-private partnership between the City and the Heat Group that would be a win-win solution for all parties. However, rather, than continue to be the focus of a controversy, we believe it is in everyone's interest for the City to put the property out for a public RFP. In order to facilitate this process, Calor is hereby exercising its right to voluntarily cancel the Agreement We remain concerned about the condition of the premises for safety and aesthetic reasons and are hopeful that the City will move forward immediately to rehabilitate the property. We would be pleased to share Curtis & Rogers' design work completed to date in order to assist the City in expediting the completion of the parking facility which has been designed to comply with the City Code for surface parking lots and landscape improvements. In good faith, please accept the work already performed as a donation to the City. If you have any questions or concerns, please do not hesitate to contact me. cc: Laura Bilberry, Asset Management Attachment Submit; record , d into the Public ) 6 tteill Co, ne to on With On 2 q_pv Walter FOOrtl n City Clerk 560 06/29/00 THU 11:18 FAX 305 3 0802 MIAMI HEAT EXEC tO 4 J U r., -F c L .8 cj() "AWO M11W 4c ""E awwNTIOW Submifl-ad inflo, tii:y jJ Et ti: recordin connection with item en 29 -00 Walter Foeman City Clerk SHOMM Fd"UYAIM PROJECT SITE PLAN MWAM PARKINQ DA LOT WIN& FLORI 00— 5.60 -T] *,�7,f f�J I CITY OF MIAMI, OFFICE OF INTERNAL AUDITS n i 1 LIMITED REVIEW OF THE REVOCABLE LICENSE AGREEMENT BETWEEN THE CITY OF MIAMI AND CALOR DEVELOPMENT, LTD. AUDIT NO. 00-019 Prepared By Office of Internal Audits Victor I. Igwe, CPA, CIA Director Submitted into the public record in connection with item -2P on % Walter Foeman City Cleric RICARDO LINARES, CISA, SENIOR INFO. SYSTEMS AUDITOR Y �r I 0.-CITINI Ulf ffliaml VICTOR I. IGWE, CPA,CIA Director Mr. Carlos A. Gimenez City Manager 444 SW 2n' Avenue Miami, FL 33130 June 28, 2000 CARLOS A. GIMENEZ City Manager Re: Limited Review of the Revocable License Agreement between the City of Miami t and Calor Development, Ltd. Audit No. 00-019 1 F� At the City Commission meeting of April 27, 2000, the City Commission directed that the Office of Internal Audits review the Revocable License Agreement between the City of Miami and Calor Development, Ltd. (Calor). The purpose of the Agreement is to allow Calor to construct and operate a parking facility on the City owned property, pursuant to Resolution number 99-813, which authorized the City Manager on October 26, 1999, to negotiate and execute a Revocable License Agreement with Calor for the use of approximately 56,660 square feet of property owned by the City. This review was limited only to the evaluation of the reasonableness of certain provisions of the Revocable License Agreement. Sincerely, Victor I. Igwe, CPA, CIA Director i _ . Office of Internal Audits Submlll,9d rnfa the_public re ojrd jn,an ctio'ri With _tem c: Honorable Joe Carollo, Mayor. Wahbt Foematt) Honorable Wilfredo (Willy) Gort, City Commissioner City Cleik OFFICE OF INTERNAL AUDITS — 0 444 S.W. 2nd Avenue, Suite 715/Miami, FL 33128/(305) 416-2040/FAX (305) 416-2046 Mailing Address: P.O. Box 330708 Miami Florida 33233-0708 1 1 1 1 • Honorable Johnny L. Winton, City Commissioner Honorable Joe M. Sanchez, City Commissioner Honorable Tomas P. Regalado, City Commissioner Honorable Arthur Teele, Jr., City Commissioner Genaro Iglesias, Chief of Staff, City Manager's Office Thad Sheelly, Associate Vice President, The Miami Heat. Laura L. Billberry, Director, Asset Management Department Scott Simpson, Acting Director, Finance Department Alejandro Vilarello, City Attorney Walter J. Foeman, City Clerk File cul`-j�ni'Ned ica it u, re.-oud in connection v M item 2g on 6-22 -oma Walter Fceman City Clerk 0— 5, J J n Submitted into tPle pubilt, reword in. cOnijaction v%'6ttj item of � "z R -o.0 Walter Fo rnaff 0 _ � 0 City Clerk LIMITED REVIEW OF THE AGREEMENT BETWEEN THE CITY OF MIAMI AND CALOR DEVELOPMENT, LTD. ' FOR THE PERIOD OCTOBER 26, 1999 THROUGH JUNE 9, 2000 TABLE OF CONTENTS INTRODUCTION.......................:............................................................................. 1 SCOPE AND OBJECTIVES...................................................................................:..... 3 METHODOLOGY..................................................................................................... 4 RESULTSIN BRIEF.................................................................................................. 5 ' ASSET MANAGEMENT ......................................... ................................::.............. 5 AGREEMENT WAS NOT SUBJECTED TO COMPETITIVE BIDDING ............................ 5 CALOR DEVELOPMENT, LTD................................................................................ 6 ' UNTIMELY MONTHLY FEE PAYMENTS AND ADDITIONAL FEES DUE TO THE CITY. 6 REASONABLENESS OF PROJECTED REVENUES AND EXPENSES FOR THE OPERATION OF THE PARKING FACILITY.........................:..................................................... 6 t THE DEMOLITION OF THE SEAWALL AND THE INSTALLATION OF RIP -RAP ALONG THE SOUTH EDGE OF THE SLIP.......................................................................... 7 AUDIT FINDINGS AND RECOMMENDATIONS...........................:................................. 8 ' ASSET MANAGEMENT ................. :....................................................................... 8 AGREEMENT WAS NOT SUBJECTED TO COMPETITIVE BIDDING ............................ 8 CALOR DEVELOPMENT, LTD............................................................................... 10 ' UNTIMELY MONTHLY FEE PAYMENTS AND ADDITIONAL FEES DUE TO THE CITY. 10 REASONABLENESS OF PROJECTED REVENUES AND EXPENSES FROM THE OPERATION OF THE PARKING FACILITY............................................................ 14 1 EXHIBITI............................................................................................................. 16 EXHIBITII............................................................................................................ 17 ' EXHIBIT III........................................................................................................... 18 EXHIBITIV........................................................................................................... 19 J J n Submitted into tPle pubilt, reword in. cOnijaction v%'6ttj item of � "z R -o.0 Walter Fo rnaff 0 _ � 0 City Clerk J 1 1 INTRODUCTION In accordance with Resolution number 99-813, the City Commission authorized the City Manager on October 26, 1999, to negotiate and execute a Revocable License Agreement in a form acceptable to the City Attorney, with Calor Development, Ltd. (Calor) for the use of approximately 56,660 square feet of City owned property. The Mayor did not sign this legislation to evidence his approval. However, the legislation became effective in accordance with City Code Section 2-36, which provides that in the absence of the Mayor's signature or veto, legislation becomes effective at the end of ten calendar days from the date the Commission passed and adopted the Resolution. On December 14, 1999, the City entered into a Revocable License Agreement (Agreement) with Calor. The purpose of the Agreement is to allow Calor to construct and operate a parking facility on the City .owned property, as noted above. The Agreement provided that the parking facility would be used solely for events at the American Airline Arena. The State Oversight Board approved this Agreement on December 14, 1999. This Agreement is on a month-to-month basis and can be cancelled or terminated by any of the parties with or without cause. The Agreement stipulates that the City will realize the following benefits: • Calor agreed to demolish the seawall of broken slabs of concrete and install rip - rap along the southern and eastern edges of the slip. In order to use the area for the intended purpose, these repairs will be necessary and the projected cost is $541,836. Calor agreed to perform the restoration work, at its sole cost and expense, as a voluntary contribution to the City. • In consideration for this Agreement, Calor agreed to pay the City a monthly fee in the amount of $2,500, plus State Use Tax, if applicable. Commencing thirty - Submitted into the p��l�lic re COW in connection With 1 ftem -.e on Cx) r 6Walter Foernan Citlr Clerk six months from the effective date, the monthly fee shall increase to $4,500, and every twelve months thereafter; the monthly fees shall increase by five percent. • The City reserves the right to use the property as long as its use does not conflict with events sponsored by the Miami Heat in the American Airline Arena. Submitted into the p0lic record in connection with item 2-6 on -2900 Walter Foeman City Clerk 2 �- X60 ISCOPE AND OBJECTIVES As part of our oversight responsibilities, the Office of Internal Audits (OIA) performs financial and operational audits to determine the extent of compliance with provisions of contracts, programs, and/or lease agreements between the City, private companies and/or government agencies. The limited review covered the period October 26, 1999, through June 6, 2000. In ' general, the audit focused on the following 6 broad objectives: ' • To determine whether the Agreement between the City and Calor was executed in accordance with applicable City Code provisions and guidelines. n • To evaluate the timeliness of the security deposit and monthly fee payments remitted to the City in compliance with the Agreement. • To determine if all payments from Calor were properly recorded in the City's accounting system. • To determine the progress that has been made towards the demolition of the seawall of broken slabs of -concrete and installation of rip -rap along the southern and eastern edges of the slip. 3 record in connec "C)'.1 'vvoon item 2--- on Fqo:m l�4ait�r F City Clerk b ., ru • To examine the reasonableness of the projected financial data (revenues and ' expenses) in connection with the operation of the parking facility. ' • To determine whether monthly fees and the required deposit fee were paid to the City as provided in the Agreement. n • To evaluate the timeliness of the security deposit and monthly fee payments remitted to the City in compliance with the Agreement. • To determine if all payments from Calor were properly recorded in the City's accounting system. • To determine the progress that has been made towards the demolition of the seawall of broken slabs of -concrete and installation of rip -rap along the southern and eastern edges of the slip. 3 record in connec "C)'.1 'vvoon item 2--- on Fqo:m l�4ait�r F City Clerk b ., ru METHODOLOGY ' We conducted our limited review in accordance with generally accepted auditing ' standards and applicable auditing standards contained in Standards for the Professional Practice of Internal Auditing, issued by the Institute of Internal Auditors. However, ' our Office has not gone through the required peer review process. To obtain an understanding of the internal controls, we interviewed appropriate personnel, reviewed ' applicable written policies and procedures, and made observations to determine whether the prescribed controls had been placed in operation. The audit methodology included the following: • Reviewed provisions of the Agreement. • Reviewed and researched the City Code to determine the relevant controlling legal authority. ' • Interviewed personnel in Asset Management department, Calor, the Miami Heat, and the Parking Network. • Examined source documents and other evidential data supporting expenditures. ' • Reviewed and recomputed revenues and expenses as shown on proforma financial statements. • Examined financial records to assess the timeliness and accuracy of the ' payments received from Calor in compliance with the Agreement. 'fitted into file publ * • We performed other procedures as deemed necessary. Subrn ' r va in record in connectio 2g on ( item - V1iaMT Foc-man C-1C'10rtc 4 r RESULTS IN BRIEF ASSET MANAGEMENT ' AGREEMENT WAS NOT SUBJECTED TO COMPETITIVE BIDDING. We noted that Article III, Section 18-79 of the City Code titled "Com etitive Sealed Bidding;" and Article V. Section 18-177, of the City Code also titled, "Competitive ' Sealed Bidding," do not specifically -require that a Revocable License Agreement be ' subjected to competitive biding. However, good business practice would require that all contracts be subject to some form of competitive bidding or written finding, as to ' why competitive sealed bidding was waived. Such finding should be ratified by an affirmative vote of two-thirds of the City Commission after a properly advertised public hearing. Notwithstanding that this Agreement was not subjected to competitive bidding, it appears that it may have been conceived and signed with the best of ' intentions. However, in the absence of competitive bidding, or written finding, as to why competitive bidding was waived, this or similar Agreements could be perceived as an arrangement designed and contrived to favor the Licensee. Also, the City may not be assured that the monthly fees offered by Calor for the operation of parking facility ' was the most that could be obtained or earned from the going market rate. tape ed ON(\ �yZg pO 1 L I 7 CALOR DEVELOPMENT, LTD. UNTIMELY MONTHLY FEE PAYMENTS AND ADDITIONAL FEES DUE TO THE CITY. The Agreement provides that: "In the event any installment of the Monthly Fee is not received by the City on or before the fifth day of the month, Licensee shall pay to the City a late charge in an amount equal to five percent (5 %) of the Monthly Fee. We noted that the Agreement commenced on December 14, 1999. The prorated monthly fee for December 1999 was paid to the City on December 28, 1999, and all subsequent monthly fees was not paid to the City on or before the fifth day, as required. Our analysis disclosed that as of June 15, 2000, a balance of $487.50 of monthly fees with the applicable State Use Tax, and $680.83 in late fees are due to the City. REASONABLENESS OF PROJECTED REVENUES AND EXPENSES FOR THE OPERATION OF THE PARKING FACILITY. As part of our limited review we evaluated the reasonableness of the revenues and expenses projected for the parking facility when it becomes operational. Based on a one hundred percent occupancy plus additional twelve vehicles, and one hundred and ten annual events, there is no material differences in our projected revenues and expenses as compared to those derived by the Asset Management department, the Calor Development Inc., and the Parking Consultant retained by the City. Please see Exhibits I through IV. Additionally, it should be noted that some parts of this parking facility would be affected by the proposed widening of Biscayne Boulevard. This Biscayne Boulevard widening project, which would reduce the total number of parking spaces in the proposed parking facility, is projected to start in the middle of the year 2004. The monthly fees to be earned by the City will not be affected during and/or after the completion of the street widening project. Submitted into the pubif record in connection with 6 item 2$ on (,-2q on 1 4y ,; ® -b Walter Foeman THE DEMOLITION OF THE SEAWALL AND THE INSTALLATION OF RIP-RAP ALONG THE SOUTH EDGE OF THE SLIP. Our review disclosed that Calor has incurred total expenses of $131,836.14 towards the demolition the installation of seawall and of rip-rap along the south edge of the slip. It tnotwithstanding should be noted that Calor has made the above improvements on City owned property that the construction of the parking facility has not even been started ' and the organization (Calor) has not realized any revenues from the operation of the parking facility due to unforeseen delays. 1 1 t Subrnitted into the Publle ' McOrd in connuctlon With item Zsd On IAUDIT FINDINGS AND RECOMMENDATIONS ' ASSET MANAGEMENT 1 - AGREEMENT WAS NOT SUBJECTED TO COMPETITIVE BIDDING. Notwithstanding that this Agreement was not subjected to competitive bidding, it appears that it may have been conceived and signed with the best of intentions. Our review of ' Submitted into the public record in connection with 8 item 29 onq2 2___ g�� .Waiter Foeman Cita Clerk On December 14, 1999, the City entered into a Revocable License Agreement (Agreement) with the Calor Development, Ltd (Calor) pursuant to Resolution number 99-813, which was approved by the City Commission on October 26, 1.999. The tpurpose of the Agreement is to allow Calor to construct and operate a parking facility on City owned property. The Agreement provided that the parking facility would be used solely for events at the American Airline Arena. In consideration for this Agreement, Calor agreed to pay the City a -monthly fee in the amount of $2,500, plus State Use Tax, if applicable. Commencing thirty-six months from the effective date, the monthly fee shall increase to $4,500, and every twelve months thereafter; the 1 monthly fees shall increase by five percent. Upon completion of the parking facility, Calor will be responsible for the operation and maintenance of the parking facility. We noted that Article III (Purchasing and Contracts Generally), Section 18-79 of the City Code titled, "Competitive Sealed Bidding;" and Article V (Sale or Lease of City's Real Property), Section 18-177, of the City Code also titled, "Competitive Sealed Bidding," do not specifically require that a Revocable License Agreement be subjected to competitive biding. However, good business practice would, require that all contracts be subject to some form of competitive bidding or written finding, as to why competitive sealed bidding was waived. Such finding should be ratified by an affirmative vote of two-thirds of the City Commission after a properly advertised public hearing. Notwithstanding that this Agreement was not subjected to competitive bidding, it appears that it may have been conceived and signed with the best of intentions. Our review of ' Submitted into the public record in connection with 8 item 29 onq2 2___ g�� .Waiter Foeman Cita Clerk 11 1 1 l 0 0 pertinent records, indicate that certain improvements as ' noted on page 13, would be donated to the City. Additionally, either party, with only 30 -days advance notice, could revoke the Agreement. However, in the absence of competitive bidding, or written finding, as to why competitive bidding was waived, this or similar Agreements could be perceived as an arrangement designed and contrived to favor the Licensee. Also, the City may not be assured that the monthly fees offered by Calor for the operation of parking facility was the most that could be obtained or earned from the going market rate. Upon audit inquiry, the Director of the Asset Management department informed us that an informal and unwritten legal opinion dictates that competitive bidding is not required when a license Agreement does not convey a leasehold right or when an Agreement is revocable. The Director stated that this unwritten legal opinion has been the general rule over the years. In addition the Director stated that there was a sense of urgency to have the parking facility completed by the official opening of the American Airline Arena. The Arena was officially opened on December 31, 1999. However, we noted that as of June 15, 2000, the construction of the parking has not started. Recommendations. We recommend that all contracts be subject to some form of competitive bidding or written finding, as to why competitive sealed bidding was waived. Such finding should be ratified by an affirmative vote of two-thirds of the City Commission after a properly advertised public hearing. Auditee Response and Action Plan. The Asset Management department concurs with this finding and recommendations. Submitted into the publio record in connection with item 2 on __(94 Z 9 Walter Foes, n r U,.. 1 • • CALOR DEVELOPMENT, LTD. UNTIMELY MONTHLY FEE PAYMENTS AND ADDITIONAL FEES DUE TO ' THE CITY. ' The Agreement provides that: "In the event any installment of the Monthly Fee is not received by the City on or before the fifth day of the month, Licensee shall pay to the City a late charge in an amount equal to five percent (5%) of the Monthly Fee." We ' noted that the Agreement commenced on December 14, 1999. The prorated monthly fee for December 1999 waspaid to the City on December 28, 1999, and all subsequent ' monthly fees should have been paid to the City on or before the fifth day of each month. Our review of the fees due and collected since the inception of the Agreement ' disclosed that monthly fee payments were not made on timely manner as noted below: Fees Due Fees Received Amount of Month Amount * Date Amount Late fee due December $ 1,545.97 (1) 12/28/99 $ 2,662.50 January 2,662.50 (1) $ 55.83 February 2,662.50 125.00 March 2,662.50 3/10/00 6,870.97 125.00 ' April 2, 662.50 125.00 May.. 2,662.50 5/9/00. 5,0001.00 125.00 June 2,662.50 6/15/00 2,500.00 125.00 Total $ 17,520.97 $ 17,033.47 $ 680.83 ' * Amounts include 6.5 percent State Use Tax (1) Amount was prorated The above analysis indicates that as of June 15, 2000, a balance of $487.50 ($17,520.97 - $17,033.47) of monthly fees with the applicable State Use Tax and $680.83 in late fees are due to the City. Upon review of payment records we noted that the amounts remitted by Calor did not include the applicable State Use Tax; and it is not clear whether the monthly fees are subject to State Use Tax. We have made a formal written request for interpretation from State of Florida Department of Revenues. SubMitted into the public 10 record in connection with au 'altor Fo, rriam rl 1 0 - 0 We also noted that the Finance department failed to assess the required late fees due from these late payments. It should be noted that Calor has made the above payments to the City notwithstanding that the construction of the parking facility has not even been started and the organization (Calor) has not realized any revenues from operation of the parking facility. Recommendations. We recommend that Calor make its monthly fee payment more timely. The Finance department should assess and collect late payment fees when payments are not made in a timely manner. The Finance department should bill and collect the $680.83 late fees and the additional $487.50 due, from Calor. Calor should seek a refund from the State of Florida Department of Revenues, if it is determined that monthly fees are not subject to State Use Tax. Auditee Response and Action Plan. Calor in its response to these findings and recommendations stated that the State has not made a determination as to whether the State Use Tax was applicable, and therefore, will withhold the payment of the Use Tax until a determination is made. Calor concurred with the other findings and recommendations. submitted into the public record in connection with item Z3 on baiter Foernan l 1 _ City clerk i r 0 RESTORATION OF THE BROKEN SLABS OF CONCRETE ALONG THE EASTERN PROPERTY LINE. As noted on page one, Calor agreed to demolish the seawall of broken slabs of concrete and installation of rip -rap along the southern and eastern edges of the slip. In order to use the area for the intended purpose, these repairs will be necessary and the projected cost is $541,836. Calor agreed to perform the restoration work, at its sole cost and expense, as a voluntary contribution to the City. In response to Asset Management department's request for information regarding the status of the construction of the parking facility, the Associate Vice President of Business Development on a May 3, 2000, memorandum stated that the construction has not progress rapidly because of the sensitivity of the shorelines. Additionally, the Associate Vice -President stated that phase I, which included the removal of seawall above the water line and the installation of rip -rap along the southern edge of the slip have been completed at a total cost of $178,000. Our review of the source documents supporting these expenditures disclosed that as of June 9, 2000, payments were made to the following vendors in connection with the demolition of the seawall of broken slabs of concrete and installation of rip -rap along the southern edge of slip: Submitted into, the public record in connection with item _.LL_ on 12 Walter ►_ Ll Total • Type. of Work Invocie Vendor Name Performed Date 1125 $ 2,885.00 Curtis Rogers Landscape Arthitect 08/06/99 Coastal Systems Intenational Design Services 10/18/99 Precision Engineer Surveing Fees 11/11/99 Central Florida Equipmmrjt Shoreline Stabilization .12/23/99 Central Florida Equipment Shoreline Stabilization 01/18/00 Total • Check Number Amount 1125 $ 2,885.00 1156 5,984.92 1190 7,966.22 1214 103,500.00 1264 11,500.00 $ 131,836.14 It should be noted that Calor has made the above improvements on City owned property notwithstanding that the construction of the parking facility has not even been started and the organization (Calor) has not realized any revenues from this Revocable License Agreement. However, these improvements were made for the best interest of the Miami Heat operation. These improvements would enhance the outlook and surroundings of the American Airline Arena, and therefore boost ticket sales for all Miami Heat and other events held in the Arena. Submitted into the public record in connection with item 2`6 on fo-Lq - o� Walter Foeman 13 0 - 560 J ' REASONABLENESS OF PROJECTED REVENUES AND EXPENSES FROM THE OPERATION OF THE PARKING FACILITY. 1 As part of our limited review, we evaluated the reasonableness of the revenues and expenses projected for the operation of the parking facility. Based on a one hundred percent capacity plus additional twelve vehicles, and one hundred and ten annual events, there are no material differences in our projected net operating income as shown on Exhibit I, page 16, as compared to those projected by: ' • The Asset Management department, Exhibit II, page 17 • The Parking Network, Exhibit III, page 18 ' • Calor Development Inc., Exhibit IV, page 19 ( Calor's projections are based on 95 % occupancy). Our projected Gross Revenue for the year 2000 was prorated to $104,800 to reflect six- month parking operation. Calor is behind schedule in the construction of the parking facility mainly due to unanticipated delays. After. taxes and expenses, the projected Net ' Operating Income for the year 2000 is projected at $29,166. With a full year of operations in 2001, the projected amount increases to $91,883. Considering a 3% annual increase in parking revenues and operational expenses, the projected Net Operating Income increases to $95,539 for the year 2002, $75,305 for year 2003, and $38,242 for 2004. The decrease in the projected Net Operating Income ' for the year 2003 is due to the increase in Monthly Fees to be paid to the City, which ' will increase from $2,500 to $4,500 per month. The decrease in the projected Net Operating Income for the year 2004 is attributed to the expansion of Biscayne Boulevard scheduled to begin in mid -2004. Starting in the year 2004, the Agreement provides an automatic 5 % increase to the monthly fees to be paid to the City. ' Submitted into the public record in connection with ' item .?S'� on -2 14 Walter Foeman City Clerlc ' Submitted into the Public record in connection with qtr, �28 on —�z2 falter Foemar' 15 r City Cleric I �. r Notwithstanding that Calor Development Inc. had already made improvements totaling $131,836.14 and anticipates to make more improvements to this City owned property. ' It should be noted those improvement would enhance the outlook and surroundings of the American Airline Arena, and therefore boost ticket sales for all Miami Heat and other events held in the Arena. Recommendations. ' We recommend that the monthly fees to be paid by Calor be renegotiated and require Calor to pay the City additional fees if revenues earned, exceed certain threshold. Auditee Response and Action Plan. In response to our finding and recommendation, the Director of the Asset Management department, suggested that Calor be allowed to pay the City the flat rates as agreed ' upon for two years, as a way of recouping some its investment. After the two period, monthly fees should then be subject to the amounts of revenues earned by Calor. ' Submitted into the Public record in connection with qtr, �28 on —�z2 falter Foemar' 15 r City Cleric I �. Exhibit I REVIEW OF THE, AGREEMENT BETWEEN CALOR DEVELOPMENT AND CITY OF MIAMI NET OPERATING INCOME PROJECTIONS - OFFICE OF INTERNAL AUDIT OCTOBER 26. 1999 THROUGH JUNE 9, 2000 Year: 2000 2001 * 2002 * 2003 * 2004 * Runners Gross Revenue $.104,800 ** $215,888 $222,365 $ 229,036 $ 117,953 ** Sales Tax 6,396 6 13,176 13,572 13,979 7,199 Supplies Parking Surcharge 16,401 2,225 33;785 34,799 35,843 18,459 Liability Insurance Net Revenue after Taxes 82,003 619 168,927 173,994 179,214 92,295 Uniforms Operating Expenses Monthly Fee - 22,837 30,000 ** 47,044 30,000 48,455 30,000 49,909 54,000 25,703 28,350 ** ** $ 29,166 Gross Revenue $ 91,883 $ 95,539 $ 75,305 $ 38,242 Net Operating Income: * Estimated annual growth rate of 3 % ** Amounts prorated to six-month of operation during calendar year Operating Expenses do not include Group Insurance Projected Expenses: Events Attendance All -in Rate Labor Statistics Cashiers ... Runners 15,063 Number of Employees 2 6 41 Hours/Event 6 6 NBA Post -Season Hourly Rate _ 6 4 7,860 Payroll 24,750 Supplies 2,400 Payroll Taxes 2,225 Repairs and Maint. 1,200 Workers Comp. 1,780 Liability Insurance 4,000 Profit Sharing 619 Licenses 500 Group Insurance - Uniforms 100 Management Fee 7,200 Professional Services 900 26,200 Total TOTAL 45,674 Event Parking Events Attendance All -in Rate Before Taxes Capacity: Full + 12 NBA Pre -Season 3 15,063 20 7,860 Stacked Cars NBA Regular Seaso 41 16,984 20 107,420 NBA Post -Season 3 19,181 20 7,860 WNBA 18 7,809 10 23,580 Major Concerts 6 11,808 15 11,790 Family Shows 15 7,608 10 19,650 Theater 4 3,561 10 5,240 Minor Concerts 20 4,052 10 26,200 Total 110 86,066 Gross Revenue 209,600 Submitted 1;1t(,, the pul)ljc record in Connection w1' itemth on o I6 AA��falter FOOman fl o_ 560 GiIY Clel1s tExhibit II REVIEW OF THE AGREEMENT BETWEEN CALOR DEVELOPMENT AND CITY OF MIAMI NET OPERATING INCOME PROJECTIONS - ASSET MANAGEMENT OCTOBER 26, 1999 THROUGH JUNE 9. 2000 r r Year: 2000 2001 * 2002 * 2003 * 2004 Number of Events Gross Revenue $'104,833 ** $ 215,955 $ 222,434 $ 229,107 $ 117,990 ** Sales Tax 6,398 13,180 13,576 13,983 7,201 Parking Surcharge 16,406 33,796 34,810 35,854 18,465 Net Revenues after Taxe 82,029 168,979 174,048 179,270 92,324 Opererating Expenses 25,312 ** 52,142 53,706 55,317 28,488 ** Monthly Fee 30,000 30,000 30,000 54,000 28,350 Net Operating Income26,717 LK $ 86,837 $ 90,342 $ 69,953 $ 35,486 * Estimated annual growth rate of 3 % $619 Group Insurance (20% of Payroll) ** Amounts prorated to six-month of operation during calendar year Management Fee Projected Revenues Number of Spaces 131 Number of Events 110 Average Parking Fee $14.55 Percentage Occupancy 100% Revenue $209,666 Less Sales Tax and Parking Surcharge $45,608 NET REVENUE $164,058 Projected Expenses Labor Statistics Cashiers Runners Number of Employees 2 6 Hours/Event 6 6 Hourly Rate $6 $4.25 Payroll $24,750 Payroll Taxes $2,225 Workers Compensation $1,780 Profit Sharing $619 Group Insurance (20% of Payroll) $4,950 Management Fee $7,200 Supplies $2,400 Repairs & Maintenance $1,200 Liability Insurance $4,000 Licenses $500 Uniforms $100 Professional Services $900 TOTAL $50,623 Net Operating Income Projection $113,434 Submitted into the1 public record ire c000ectioo 17 item ?�'- ��"2`i .cam. vueAlter t-oeman City Clerk),; F'' 0 n I-] Exhibit III REVIEW OF THE AGREEMENT BETWEEN CALOR DEVELOPMENT AND CITY OF MIAMI NET OPERATING INCOME PROJECTION - THE PARKING NETWORK FOR ANY CONSECUTIVE 12 -MONTH OPERATIONS OCTOBER 26, 1999 THROUGH JUNE 9, 2000 Gross Revenue $ 216,470 Labor Statistics Other Expenses: Number of Employees 2 6 Sales Tax and Surcharge 47,088 Hourly Rate Operating Expenses 62,324 * Includes $18,842 in Group Insurance. CityFee 30,000 The Parking Network agrees that this amount Net Operating Income $ 77,058 is too high and that 20%-30% of Payroll Group Insurance $18,842 is more reasonable. Projected Revenues Number of Spaces 119 Number of Events 110 Average Parking Fee $17.41 Percentage Occupancy 95% Revenue $216,470 Less Sales Tax and Parking Surcharge $47,088 NET REVENUE $169,382 Projected Expenses Labor Statistics Cashiers Runners Number of Employees 2 6 Hours/Event 6 6 Hourly Rate $6 $4.25 Payroll $24,750 Payroll Taxes $2,225 Workers Compensation $1,780 Profit Sharing $619 Group Insurance $18,842 Management Fee $5,009 Supplies $2,400 Repairs & Maintenance $1,200 Liability Insurance $4,000 Licenses $500 Uniforms $100 Professional Services $900 TOTAL $62,324 Net Operating Income Projection $107,058 18 v re �yawp-, 000k f Exhibit IV REVIEW OF THE AGREEMENT BETWEEN CALOR DEVELOPMENT AND CITY OF MIAMI GROSS REVENUE PROJECTION - CALOR DEVELOPMENT FOR ANY CONSECUTIVE 12 -MONTH OPERATIONS. OCTOBER 26, 1999 THROUGH JUNE 9, 2000 Gross Revenue $ 216,502 Other Expenses Sales Tax and Surcharge 47,095 Operating Expenses 62,324 City Fee 30,000 Net Operating Income: $ 77,083 Miami Heat projects 95 % of capacity of all 110 events * Includes $18,842 -in Group Insurance Projected Revenues - Number of Spaces 119 Number of Events 110 Average Parking Fee $17.41 Percentage Occupancy 95% Revenue $216,502 Less Sales Tax and Parking Surcharge $47,095 NET REVENUE $169,382 Projected Expenses Labor Statistics Cashiers Runners Number of Employees 2 6 Hours/Event 6 6 Hourly Rate $6 $4.25 Payroll $24,750 Payroll Taxes $2,225 Workers Compensation $1,780 Profit Sharing $619 Group Insurance $18,842 Management Fee $5,009 Supplies $2,400 Repairs & Maintenance $1,200 Liability Insurance $4,000 Licenses $500 Uniforms $100 Professional Services $900 TOTAL Net Operating Income Projection $62,324 '' , "'^` D $107,058 �eG��Zpv0 le in o e� � Gee �a`� dn\; tec"D J' vmeo 19 • CITY op, ly 3 liLi 9 IIItEI Is 11/1 O�CO., F Office of Internal Audits 444 SW 2^" Avenue Miami, Florida 33131 (305) 416-2040 email: vigweC ci.miami.fl.us ft