HomeMy WebLinkAboutItem #44 - Discussion ItemTO: Edward Marquez
City Manager
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM 37
DATE: September 26, 1997 FILE:
SUBJECT:
Discussion Item
FROM: REFERENCES:
Wifredo (Willy) Gort ENCLOSURES:
Commissioner
Would you please place on the Commission Agenda of October 14, 1997 as a discussion
item Mr. Carlos Alamilla, President of Cha Cha Foods Corp. to discuss The Fire House 4
property.
Thank you for your cooperation.
WG/kk
DATAJFMF,4-AI
cc:Elvy Gallastegui-Alonso, Agenda Office
CHA CHA FOODS CORP.
CARLOS ALAMILLA
PRESIDENT -
525 N.W. 27 Ave.Ste 208 (305)541-784r
Miaj i Florida 33125 FAX (305)541-503C
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CITY OF MIAMI, FLORIDA
' INTER -OFFICE MEMORANDUM
TO: Honorable Mayor and Members DATE : October 3, 1997 FILE
of the City Commission SUBJECT:
Firehouse IV Property
1
FROM: REFERENCES:
Edward Marqu zo
City Manager ENCLOSURES:
On October 25, 1996, in response to a Request for Proposals (RFP) issued by the City of
Miami, Alamilla and Associates, Inc. submitted a proposal on behalf of Firehouse Miami
Bar & Grill offering to lease the City owned property located at 1000 South Miami Ave.,
Miami, Florida. The proposal submitted by Mr. Alamilla included documented evidence
that Republic National Bank of Miami held available credit facilities to Alamilla and
Associates, Inc. in the medium six figures. In December of 1996, the selection committee
which evaluated and ranked all the responsive and responsible proposals received by the
City gave Mr. Alamilla's proposal a number two (2) ranking.
Subsequently, pursuant to City Commission directive, the administration negotiated a
lease agreement with the entity which submitted the number one ranked proposal,
Firehouse Four, LLC. Thereafter, the lease negotiated by and between the City and
Firehouse Four, LLC was terminated as a result of this company's failure to perform
under the terms of said lease. Consequently, Mr. Alamilla was extended an opportunity
to negotiate a lease agreement with the City.
At this time, the City has determined that the financial commitment relied upon by Mr.
Alamilla to successfully perform under the terms offered in its proposal is no longer
effective. Because of Mr. Alamilla's inability to secure the necessary financial
commitment, he has furnished this office via fax dated August 15, 1997 copies of Articles
of Incorporation for Firehouse Miami Bar and Grill, Inc., which he seeks to substitute as
the entity who would negotiate a lease agreement with the City.
The City can not accept a substitution of corporate entities for purposes of negotiating a
lease transaction. The terms of the RFP required that the proposer must have been a
corporation duly authorized to do business at the time of submission of the proposal. The
Articles of Incorporation for Firehouse Miami Bar and Grill, Inc. became effective and
the corporate existence began on August 15, 1997. Furthermore, this a business entity
completely separate and distinct from the business entity which submitted the bid and
was evaluated and ranked by the selection committee. It is impermissible under a
competitive bidding process, such as the one utilized by the City to solicit these
proposals, to allow after receipt of proposals a substitution as to the proposer. Any right
or opportunity which Mr. Alamilla had to negotiate by virtue of the proposal which it
submitted to the City in 1996 can not be assigned to Firehouse Inc. If this were
permissible, the justification for entertaining proposals at a time certain and on the basis
of the information provided in the four comers of the proposal would be dap. S�
'� 5
Cha Cha Foods Corp.
October 3, 1997
a new entity which in fact had no involvement in the process would now be allowed to
negotiate with the City. Therefore, at this time the City is prohibited from negotiating
any further with Firehouse Miami Bar and Grill, Inc.
On Wednesday, October 1, 1997, City staff met with Mr. Alamilla and his attorney, Ms.
Linda L. Carroll, to make him aware of the problem created by him changing from the
corporation originally submitted in the bid. Mr. Alamilla indicated that he understood the
problem and that he was prepared to show evidence of financing under Alamilla and
Associates, Inc., the corporation which had responded to the City's RFP. Mr. Alamilla
has been apprised of this requirement and we are waiting a response from him.
Additionally, on August 29, 1997 Mr. Alamilla submitted a revised list of improvements
with a total proposed investment amount of $340,200. The RFP states, "In no event shall
the final terms and conditions of the lease agreement provide for estimated cost of
improvements which vary below 15% of what was estimated in the Proposal." Mr.
Alamilla's proposal, received October 25, 1996, stated the total cost for capital
expenditures to be $525,700. Fifteen (15) percent reduction of this amount is
$446,845.00, which represents the minimum dollar amount acceptable for improvements
per the requirements of the RFP. The City Commission has the right to waive this
requirement, however it is our recommendation that Mr. Alamilla be required to provide
certification from a licensed engineer/architect stating that the necessary work can be
provided with the amount of money proposed by Mr. Alamilla.
Unless Mr. Alamilla can provide adequate evidence of financing ability and agrees to
expand the required amount on the improvements on the . property, staff cannot
recommend that a lease be negotiated.
For your information, we are providing a comparison of financial terms required in the
RFP, those proposed by Firehouse IV - LLC, the organization that was unsuccessful in
obtaining financing for this property and the two (2) proposals received from Alamilla
and Associates, Inc. Please be advised that Mr. Alamilla has not agreed to provide a
security deposit.
As of Friday, October 3, Mr. Alamilla has yet to provide staff with the requested evidence
of financing. He was informed that the City Commission will be discussing this item at
the October 14"' Commission meeting and that any evidence or information that he would
like to submit must be presented no later than October 8'.
If Mr. Alamilla does not provide the requested,items, staff recommends that an analysis
be conducted as to whether it is in the City's best interest to continue efforts to lease the
property or to put it out for sale. This analysis will be presented at the City Commission
meeting of October 28'.
�ISG�c SSai�...
6 w
1000 South Miami Avenue - Comparison of Financial Terms
REQUEST FOR PROPOSALS
ALAMILLA & ASSOCIATES, INC.
ALAMILLA & ASSOCIATES, INC.
(issued 7125/96)
(Proposal received 10125196)
(Proposal received 7124197 from Carlos Alamilla, after Lease
'
was canceled with first Proposer, Kim Driscoll)
Annual Rent,
Percentage
Rent and Breakpoint:
Annual Rent, Percentage Rent and Breakpoint:
Annual Rent, Percentage
Rent and Breakpoint:
Lease
Minimum
Annual %
Breakpoint
Estimated
Lease
Minimum
Annual % Breakpoint
Estimated
Lease
Minimum
Annual %
Breakpoint
Estimated
Year
Annual Rent
Rent
Return*
Year
Annual Rent
Rent
Return"
Year
Annual Rent
Rent
Return"
$ 76,500
6%
$2.200,000
$ 48,000
1
$ 76,500
11%
$2.200,000
$ 88,000
1
$ 76,500
11%
$2,200,000
$ 88,000 '
$ 76,600
6%
9 2,200,000
$ 48,000 '
2
$ 76.500
11%
$2,200,000
$ 88,000
2
$ 76,500
11%
$ 2,200,000
$ 88,000 `
$ 76,500
6%
$ 2,200.000
$ 48,000 "
3
$ 76,500
11%
$2,200.000
$ 88,000 '
3
$ 76,500
11%
$ 2,200,000
$ 88,000 '
4
$ 83,385
6%
$ 2,400,000
$ 36,000 `
4
$ 83,385
11%
$2,400.000
$ 66,000 '
4
$ 83.385
11%
$ 2,400.000
$ 66.000 '
5
$ 83,385
6%
$ 2,400,000
$ 36,000 •
5
$ 83,385
11%
$2,400.000
$ 66,000
5
$ 83,385
11%
$ 2,400,000
$ 66,000 '
6
$ 83,385
6%
$ 2,400,000
$ 36,000 `
6
$ 83,385
11%
$2,400.000
$ 66,000 '
6
$ 83,385
11%
$2,400,000
$ 66,000 '
7
$ 90,890
6%
$2,600,000
$ 24,000 "
7
$ 90.890
11%
$2,600,000
$ 44,000 "
7
$ 90,890
11%
$2,600,000
$ 44.000 '
8
$ 90,890
6%
$ 2,600,000
$ 24,000 •
a
$ 90,890
11%
$2,600,000
$ 44,000 `
8
$ 90,89D
11%
$ 2,600.000
$ 44,000 '
9
$ 90,890
6%
$ 2,600,000
$ 24.000 "
9
$ 90,890
11%
$2,600,000
$ 44,000 "
9
$ 90,890
11%
$ 2,600,000
$ 44,000 '
10
$ 99,070
6%
$ 2,850,000
$ 9,000 '
10
$ 99,070
11%
$2.850,000
$ 16,500 '
10
$ 99,896
11%
$ 2.850,000
$ 16.500 '
11
$ 99,070
6%
$ 2,850,000
$ 9,000 '
( 11
$ 99,070
11%
$2,850,000
$ 16,500 `
11
$ 99,896
11%
$ 2,850,000
$ 16,500 "
12
$ 99,070
6%
$ 2,850,000
$ 9,000 •
12
$ 99,070
11%
$2,850,000
$ 16,500 "
12
$ 99,896
11%
$ 2,850,000
$ 16,500 `
13
$ 107,896
6%
$ 3,100.000
$ - '
13
$ 107,896
11%
$3.100,000
$ - '
13
$ 107.896
11%
$ 3,100,000
$ - `
14
$ 107,896
6%
$ 3,100,000
$ - '
14
$ 107,896
11%
$3,100,000
$ - '
14
$ 107,896
11%
$ 3,100,000
$ -
15
$ 107,896
6%
$ 3,100.000
$ -
15
$ 107,896
11%
$3,100,000
$ -
15
$ 107,896
11%
$ 3,100,000
$
TOTAL:
$ 1,373,223
$ 351,000 '
TOTAL:
$ 1.373,223
$ 643.500 `
TOTAL:
$1.375,701
$ 643,500
. This is
an estimated annual
percentage rent payment to the City based on gross revenues
of $3,000,000.
It is of course expected that gross
revenues would
increase substantially over the $3,000,000
used in this examp
Prepaid Rent:
Silent
40
Insurance Proceeds:
The City stated that the insurance settlement for the vandalized
air conditioning equipment, in the amount of $20,605, would be
given to the Lessee for the replacement of the air conditioners.
Letter of Credit:
To be negotiated
A
0
LEASE AGREEMENT WITH FIREHOUSE FOUR, LLC
(KIMBERLY DRISCOLL)
(Executed 4124197 - Canceled 7110/97)
Annual Rent, Percentage Rent and Breakpoint:
Lease Minimum Annual % Breakpoint Estimated
Year Annual Rent Rent Return`
1 $ 76,500 6.00% $2,000,000 $ 60.000 "
2 $ 76,500 6.50% $2,000,000 $ 65,000 '
3 $ 76,500 7.00% $2,000.000 $ 70,000 '
4 $ 100,000 7.50% $1,667.000 $ 99,975 `
5 $ 100,000 7.50% $1,667.000 $ 99,975 '
6 $ 100,000 7.50% $1,667,000 $ 99,975 '
7 $ 109,000 7.50% $1,817,000 $ 88,725 '
8 $ 109,000 7.50% $1,817,000 $ 88,725 `
9 .$ 109.000 7.50% $1,817,000 $ 88,725 '
10 $ 118,000 7.50% $1.967,000 $ 77,475 `
11 "$ 118.000 7.50% $1,967,000 $ 77,476 '
12 $ 118,000 7.50% $1,967,000 $ 77,475 '
13 $ 129,500 7.50% $2,150,000 $ 63,750 '
14 $ 129,500 7.50% $2,160,000 $ 63,750 '
15 $ 129,50D 7.50% $2,150,000 $ 63,750
TOTAL: $ 1,599,000 $1,184,775 '
Prepaid Rent: Prepaid Rent: Prepaid Rent:
Silent $9,562.50 - which represents 50% of the first 3 months rent $219,000
(The RFP stated "The City will provide up to a 50% reduction in
the total amount of rent due for the first 6 months of the lease for
providing assistance in initial marketing and the grand opening")
Insurance Proceeds:
Proposer did not waive his rights to receive the insurance
proceeds.
Letter of Credit:
Silent
Insurance Proceeds:
Proposer did not waive his rights to receive the insurance
proceeds.
Letter of Credit:
Silent
Insurance Proceeds:
None
Letter of Credit:
$250,000 Letter of Credit for the furniture, fixtures and
equipment (I=FBE)
REQUEST FOR PROPOSALS
(Issued 7/25/96)
Performance Bond:
To be negotiated
*Mty Deposit:
To be negotiated
Payment Upon Transfer:
To be negotiated
Leasehold improvements:
The estimated cost for physical improvements cannot vary
below 15 % of what the proposer estimated in the proposal.
•
1p-7-.1-
1000 South Miami Avenue - Comparison of Financial Terms - Continued
ALAMILLA & ASSOCIATES, INC. ALAMILLA & ASSOCIATES, INC.
(Proposal received 10125/96) (Proposal received 7/24/97 from Carlos Alamilla, after Lease
was canceled with first Proposer, Kim Driscoll)
Performance Bond: Performance Bond:
Silent Will be provided in the amount of the construction costs
Security Deposit:
Silent
Payment Upon Transfer:
( Silent
Leasehold Improvements:
$525,700
Security Deposit:
Proposer slated that"tenant will provide the improvements
on the property as the security deposit'
Payment Upon Transfer:
Tenant will not pay the City any transfer fee if there is an
ownership transfer
Leasehold Improvements:
Proposed investment of $340,200
•
LEASE AGREEMENT WITH FIREHOUSE FOUR, LL
(KIMBERLY DRISCOLL) 4
41
(Executed 4/24197 - Canceled 7110197)
Performance Bond:
$1,000,000 Construction Payment and Performance Bond
Security Deposit:
Commencing on the 4th Lease year, tenant shall deposit with
the City $50,000
Payment Upon Transfer:
Tenant to pay City 7 3/4 % of any and all consideration paid to
Tenant in connection with any transfer or sale
Leasehold Improvements:
$ 692,450 TOTAL '
($283,450 for furniture, fixtures & equipment and
$409,000 for construction)
CI
Re