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HomeMy WebLinkAboutR-98-1076J-98-1130 10/27/98 RESOLUTION NO. 9 8 1 O• 6 A RESOLUTION AMENDING RESOLUTION NO. 97-774, TO REVISE CERTAIN TERMS AND CONDITIONS OF THE LEASE AND DEVELOPMENT AGREEMENT, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY, WITH GROVE HARBOUR MARINA AND CARIBBEAN MARKETPLACE, LLC. (HEREINAFTER "LESSEE") AS APPROVED BY THE CITY COMMISSION ON OCTOBER 28, 1997 ("LEASE") TO, INTER ALIA: (A) PROVIDE FOR INCREASES IN (i) THE AMOUNT OF RENT TO BE PAID TO THE CITY, (ii) THE SECURITY DEPOSIT, (iii) LESSEE'S INITIAL INVESTMENT AND (iv) THE ANNUAL SET ASIDE FOR THE MARINA MAINTENANCE FUND, AS SPECIFIED HEREIN; (B) REQUIRE LESSEE TO INDEMNIFY THE CITY IN CONNECTION WITH ANY LEGAL ACTION BROUGHT BY ANY OWNER(S) OF LESSEE AND (C) ESTABLISH THE PROPORTIONATE PAYMENTS TO BE MADE BY CITY AND LESSEE TO THE STATE OF FLORIDA FOR A WAIVER OF DEED IF ANY PAYMENTS ARE REQUIRED; FURTHER AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE SAID LEASE, AS REVISED HEREIN, FOR THE PLANNING AND DESIGN, CONSTRUCTION, LEASING AND MANAGEMENT OF A COMMERCIAL AND RECREATIONAL MULTIPLE USE FACILITY INCLUDING A FULL SERVICE BOAT YARD, MARINA, MARINE RELATED RETAIL USES AND A PUBLIC MARKET WITH ADAPTIVE REUSE OF TWO EXISTING HISTORIC HANGAR STRUCTURES ON A 13.55 ACRE SITE (6.95 UPLAND AND 6.6 SUBMERGED ACRES) ON DINNER KEY FOR A PERIOD OF FORTY (40) YEARS. WHEREAS, pursuant to Resolution No. 97-774, adopted on October 28, 1997, the City Commission authorized the City Manager to execute a Lease and Development Agreement with Grove Harbour Marina and Caribbean Marketplace, LLC. (hereinafter "Lessee"), for the planning and design, construction, leasing and management of a commercial and recreational multiple use facility including OTT COMMSSION MEETING OF OCT 2 7 1998 Resolution No. 98-1076 a full service boat yard, marina, marina related retail uses and a public market with adaptive reuse of two existing historic hangar structures on a 13.55 acre site (6.95 upland and 6.6 submerged acres) on Dinner Key (hereinafter "Subject Property") for a period of forty (40) years, thereby requiring said Lessee to (i) make a total capital investment in the Subject Property of not less than $5,000,000.00 and (ii) paying to the City a minimum annual lease payment of not less than $300,000.00 or a percentage of revenues, whichever is greater, including a rent escalation provision; and WHEREAS, upon its review of the Lease, the State of Florida Emergency Financial Oversight Board (hereinafter "Oversight Board") recommended, inter alia, that the Lessee increase its: (i) rental payments to the City, (ii) initial investment, and (iii) annual set aside for the Marina Maintenance Fund; and WHEREAS, pursuant to the Oversight Board's recommendations, the City and the Lessee have renegotiated the financial terms of the Lease as set forth herein; and WHEREAS, there are other revisions to the terms and conditions of the Lease that have been agreed upon by the Lessee and the City, to include the proportionate amount of the fee to be paid to the State of Florida should the State impose a fee on the City for obtaining a Partial Modification of Restrictions of the restrictions set forth within Deed No. 19448 as authorized by the Board of Trustees of the Internal Improvements Trust Fund of - 2 - 98-1076 the State of Florida; 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 hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. Section 2. Resolution No. 97-774 is hereby amended, to revise certain terms and conditions of the Lease and Development Agreement, in a form acceptable to the City Attorney,l/ with Grove Harbour Marina and Caribbean Marketplace, LLC. (hereinafter "Lessee") as approved by the City Commission on October 28, 1997, in the following particulars: A. Minimum Annual Rpnt and Pprepntage Rent, Rent is to be amended only as provided below. The remaining Percentage Rents shall be as presently set forth in the Lease. (i) Minimum Annual Rent: Commencing on the Possession Date and continuing throughout the Lease Term, Minimum Annual Rent for each Lease Year shall be: Years 1 and 2 $300,000 Year 3 $350,000 Year 4 $450,000 Year 5 $500,000 Years 6 thru 7 $550,000 (ii) Percentage Rent: Marina Years 1 thru 7 12% Years 8 thru 40 15% 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. - 3 - 98-10 6 Marketplace Gross Revenues $0-$200,000 5% $200,001-$500,000 10% Above $500,000 12% B. Adjustment to Minimum Annual Rent - At the end of the seventh (7th) Lease Year and every five (5) years thereafter, the City shall appraise the fair market rent of the Subject Property for the purpose of adjusting the Minimum Annual Rent, however, in no event shall the Minimum Annual rent be less than $550,000. C. security nelangit._ The Security Deposit is to be amended to provide for increases in accordance with the amended schedule of increases of the Minimum Annual Rent then in effect. D. T,essee'G Tni ial Tny c m n Lessee's initial investment shall be no less than $7,500,000.00. Of this amount, no less than $4,900,000 shall be spent on hard construction costs. E. Marina Maintenance Fund: The annual set aside for the Marina Maintenance Fund shall be increased from 2% to 2.5% of the Lessee's Gross Revenues generated from the Marina, or $35,000.00 annually, whichever is greater, for purposes of funding and paying for capital improvements and other capital items to maintain the Marina in the condition required by the Lease and not the day -day maintenance of the Marina. F. Definition of Mar place: The definition of "Marketplace" is to be amended to prohibit the sale of secondhand merchandise. - 4 - 98-1076 A provision shall be included to provide for the City Manager's review and approval of the marketing and management plan prepared by the Lessee's consultants for the Marketplace. Further providing for the amendment of said plan from time to time in order to provide for changes in market conditions and tenant demands. H. Fee for Waiver of nppd R c ri innc- In the event the City is required to make payments to the State of Florida or to the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida (the "Trustees") in order to obtain a Partial Modification of Restrictions of the restrictions set forth within Deed No. 19448 as authorized by the Trustees, the Lessee shall reimburse the City for a portion of the payments so made, as follows: Lessee shall pay to the City 100% of any fees paid by the City to the State or the Trustees during the first two (2) years after Lessee takes possession of the Subject Property. Commencing in the third year after the Possession Date, the Lessee shall reimburse the City for amounts paid by the City to the extent the payments by City to the State or the Trustees exceed $50,000.00 in any Lease Year. I. Tndemnifiration• In addition to the indemnification provision in the Lease, Lessee will further indemnify the City against and from any and all claims against the City by any owner or beneficial owner of Lessee if such claim is related to the approval of the Lease or resulting from any litigation among the owners or beneficial owners of Lessee. Section 3. The City Manager is hereby authorized and directed to execute the Lease and Development Agreement with Grove Harbour Marina and Caribbean Marketplace, LLC. approved by - 5 - 98-1076 the City Commission on October 28, 1997, as revised herein. Section 4. This Resolution shall become effective immediately upon its adoption and signature of the Mayor2l. PASSED AND ADOPTED this 27th day of October , 1998. ATTEST: JOE CAROLLO, MAYOR In accordance with Miami Code Sec. 2-36, since the Mayor did not indicate appr^val of this legislation by signing it in the designa144d pb(� r prr-"' in'�'a . 'aid legislation becomes effective with the elapse of ten (10) day, from the date of Co:mrrn"ssion action regarding same, without the Mayor exerc/is a eto. y Walt ,i a City Clark WALTER J. FOEMAN CITY CLERK AND CORRECTNESS:i'- KDRO VILARELLO ATTORNEY LKK/BSS/CSK/W3043 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. - 6 - 98-1070 TO FROM CITY OF MIAMI, FLORIDA 17 INTER -OFFICE MEMORANDUM The Honorable Mayor and Members of the City Commission 42 Donald H. Warshaw City Manager DATE : OCT 1 9 1998 FILE: SUBJECT: Grove Harbour Marina & Caribbean Marketplace, LLC Lease Agreement REFERENCES: Discussion Item on 10/27/98 ENCLOSURES: Commission Meeting Agenda As directed by the City Commission at its meeting of October 130', 1998, a Discussion Item has been placed on the City Commission meeting agenda of October 271', 1998, regarding the Grove Harbour Marina and Caribbean Marketplace, LLC ("Grove Harbour") Lease and Development Agreement. For -your information, a meeting between representatives of Grove Harbour and the City administration is scheduled for October 20`'', 1998, to conclude the lease negotiation process. On October 27', 1998, the administration will present its recommendations for finalizing the proposed Lease & Development Agreement with Grove Harbour. i(2;qy .�o DHW/Dl3/AW 1, IS -076 -/� GROVE HARBOUR MARINA & CARIBBEAN MARKETPLACE LEASE AND DEVELOPMENT AGREEMENT Listed below is a summary of recommended changes to the proposed lease between the City and Grove Harbour Marina and Caribbean Marketplace on which the parties have reached consensus. The City administration recommends that the acceptance of these changes be subject to receipt by the City of an executed agreement between Grove Harbour and RCI Marine, Inc., or its affiliate, for management of the marina facilities prior to the execution of the lease agreement. 1) Rent Rent is to be amended only as provided below. The remaining percentage rents shall be as presently set forth in the lease. Pay Greater of Current Proposed Minimum vs. Percent Minimum Rent $300,0001yr Years 1 & 2 $300,000 Year 3 $350,000 .Year 4 $450,000 Year 5 $500,000 Year 6 $550,000 Pe entage Rent Marina 10% Years 1 - 7 12% Years 8 - 40 15% Marketplace 2% Gross Revenues $0 - $200,000 5% $201,000 - $500,000 10% Above $500,000 12% Adjustment to Appraise at end of year 7 Appraise at end of year 7 Minimum Annual and every 5 years and every 5 years Rent thereafter. In no event shall thereafter. In no event shall the Minimum Annual Rent the Minimum Annual Rent be less than $300,000 be less than $550,000 2) Security Deposit Amend to provide for increases in Security Deposit in accordance with the amended schedule of increases to the Minimum Annual Rent. The Security Deposit shall at all times equal six months of the Minimum Annual Rent then in effect. 98-i076 3) Lessee's Financial Obligations Amend to provide that Lessee's initial investment shall be no less than $7,500,000. Of this amount, no less than $4,900,000 shall be spent on hard construction costs. The previous language provided for Lessee to invest no less than $5,000,000 in Total Construction Costs which amount included certain soft costs. 4) Marina Maintenance Fund Increase the annual set aside for the Marina Maintenance Fund from 2% to 2.5% of Lessee's Gross Revenues with a minimum contribution of $35,000fyear. The use of the fund will also be clarified to provide that said funds are to be utilized for capital improvements to the marina and not the day-to-day maintenance of the facility. 5) Definition of `Marketplace" Amend definition to prohibit the sale of secondhand merchandise. 6) Marketplace Consultants To include a provision to provide for City review and approval of the marketing and management plan prepared by the Lessee's consultant for the marketplace. The marketing plan may be amended from time to time in order to provide for changes in market conditions and client and tenant demands. 7) - Delivery of Possession of Subject Property In accordance with the initial lease, the City must obtain the necessary approvals from the State of Florida with respect to the deed restriction on the submerged land which requires that the submerged land be used for public or municipal purpose. The City believes that the proposed lease is in compliance with the deed restriction since the marina is open to the public. Consequently, we anticipate receiving a notice of compliance from the State with respect to the Lessee's use of the submerged land. In the past when the State has found a use to be non -compliant with a deed restriction, they have imposed a fee upon the City. The proposed change to the lease is to clarify responsibility for the payment of such a fee, if any. Lessee agrees that it shall pay 100% of the fees during years 1 and 2. Commencing in year 3, the City shall pay up to $50,000 out of the rent it receives to cover the fees to the State. Grove Harbour shall be responsible for any fees to the State in excess of $50,000. The above changes address each of the concerns stated by the State Oversight Board.