HomeMy WebLinkAboutR-97-0412J-97-390
6/5/97
RESOLUTION NO. 9 7- 412
A RESOLUTION, WITH ATTACHMENT(S), APPROVING THE
CITY OF MIAMI'S SALE, TO THE DEPARTMENT OF
OFF-STREET PARKING (DOSP), OF TRACT 3 OF THE
PROPERTY KNOWN AS THE MIAMI RIVERSIDE CENTER
("MRC"), AS DESCRIBED IN EXHIBIT "A" TO THE CONTRACT
ATTACHED HERETO AS EXHIBIT "'I", FOR THE PURCHASE
PRICE OF $2,436,066.15; FURTHER APPROVING THE CITY'S
CONVEYANCE TO DOSP OF LEGAL TITLE TO A CERTAIN
PARCEL OF LAND COMMONLY KNOWN AS LOT 10, AS
DESCRIBED IN EXHIBIT "B" TO THE CONTRACT ATTACHED
HERETO AS EXHIBIT "'I"; AUTHORIZING THE CITY
MANAGER TO EXECUTE AN AGREEMENT BETWEEN THE
CITY AND DOSP, IN SUBSTANTIALLY THE ATTACHED
FORM, TO EVIDENCE THE SALE AND CONVEYANCE OF THE
HEREINABOVE DESCRIBED PROPERTIES; APPROVING THE
ENGAGEMENT OF THE LAW FIRM OF HOLLAND & KNIGHT
BY THE BOARD OF DIRECTORS OF DOSP TO REPRESENT
THEIR INTERESTS IN THIS TRANSACTION.
WHEREAS, the City of Miami (the "City") and Alandco, Inc., (the "Seller"), entered
into an agreement dated July 13, 1995, for the purchase and sale of the real property
described therein, which includes Tract 3 of the property now known as the Miami River
Center ("Tract 3"), as amended by a Modification to Purchase Agreement, dated
September 15, 1995 (the "Purchase and Sale Agreement"); and
WHEREAS, pursuant to the terms of the Purchase and Sale Agreement, the Seller
elected to withdraw Tract 3 from the sale contemplated in said Agreement, and in
accordance with the Purchase and Sale Agreement, the City and the Seller executed an
ATTACHMENT (S)
CONTAINED i
CITY'COMMISSION
MEETING OF
J U N 9 9 1997
Resolution No.
9'7- 412
Escrow Agreement, dated October 16, 1995, which provided for the purchase and sale of
Tract 3 under the terms and conditions set forth therein (the "Escrow Agreement"); and
WHEREAS, the City has deposited with Kirkpatrick & Lockhart, as Escrow Agent
under the Escrow Agreement; the sum of $1,640,000 (the "Escrow Deposit"), which
represents all amounts due from Buyer to Seller to consummate the purchase of Tract 3,
and which is being held by Escrow Agent, in an interest bearing escrow account, in
accordance with the terms of the Escrow Agreement; and
WHEREAS, DOSP wishes to purchase from the City all of the City's rights and
obligations under the Purchase and Sale Agreement, provided that the City agrees to
convey to DOSP legal title to Lot 10, subject to the limitations and restrictions, and in
accordance with the terms and conditions set forth in the Agreement between the City
and DOSP for Sale of Tract 3 and Conveyance of Legal title to Lot 10, a copy of which is
attached hereto; and
WHEREAS, the Board of Directors of DOSP has authorized the engagement of the
law firm of Holland & Knight, as special outside counsel, to represent DOSP's interest in
the purchase of Tract 3,
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. The City of Miami's (the "City") sale to the Department of Off -Street
Parking (DOSP), of Tract 3 of the property known as the Miami Riverside Center ("MRC"),
as described in Exhibit "A" to the contract attached hereto as Exhibit "1 ", for the purpose
price of $2,436,066.15, is hereby approved.
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97- 412
Section 3. The City's conveyance to DOSP of legal title to a certain parcel of
land commonly known as Lot 10, as described in Exhibit "B" to the contract attached
hereto as Exhibit "1 ", is hereby approved.
Section 4. The City Manager is hereby authorized to execute an agreement
between the City and DOSP, in substantially the attached form, to evidence the sale and
conveyance of the hereinabove described properties.
Section 5. The City Commission hereby approves the engagement of the law
firm of Holland & Knight by the Board of Directors of DOSP to represent their interests in
this transaction.
Section 6. This Resolution shall become effective immediately upon its adoption.
PASSED AND ADOPTED this 9th day of June 1997.
CAROLLO, MAYOR
ATTES
ALTER J FO AN
CITY CLER
PREPARED AND APPROVED BY:
r
OLG RAMIREZ-SEI AS
AS TANT CITY ATTORNEY
W 1664:csk:ORS
APPROVED AS TO FORM AND
CORRECTNESS:
3-
97- 412
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AGREEMENT BETWEEN THE CITY OF MIAMI AND THE DEPARTMENT OF
OFF-STREET PARKING FOR SALE OF TRACT 3 AND CONVEYANCE OF
LEGAL TITLE TO LOT 10
This Agreement is made and entered into this day of , 1997
by and between the City of Miami, a municipal corporation of the State of Florida
("City") and the Department of Off -Street Parking of the City of Miami ("DOSP") for
the sale and purchase of the City's rights to purchase the property known as Tract 3 of the
Miami Riverside Center and the conveyance by the City to DOSP of City's legal title to
the property known as Lot 10 ("Lot 10").
RECITALS
A. The City and Alandco, Inc., a Florida corporation ("Seller"), entered into
an agreement dated July 13, 1995 for the purchase and sale of the real property described
therein, which includes Tract 3 of the property now known as the Miami Riverside Center
("Tract 3"), as more particularly described in Exhibit "A" hereto, as amended by a
Modification to Purchase Agreement dated September 15, 1995 (the "Purchase and Sale
Agreement").
B. Pursuant to the terms of the Purchase and Sale Agreement, the Seller
elected to withdraw Tract 3 from the sale contemplated in said agreement, and in
accordance with the Purchase and Sale Agreement, the City and the Seller executed an
Escrow Agreement dated October 16, 1995, which provides for the purchase and sale of
Tract 3 under the terms and conditions set forth therein (the "Escrow Agreement").
C. The City has deposited with Kirkpatrick & Lockhart, as Escrow Agent
under the Escrow Agreement (the "Escrow Agent"), the sum of $1,640,000 (the "Escrow
Deposit), which represents all amounts due from Buyer to Seller to consummate the
purchase of Tract 3 and which is being held by Escrow Agent, in escrow, in an interest
bearing account, in accordance with the terms of the Escrow Agreement.
D. The City wishes to sell to DOSP and DOSP wishes to purchase from the
City all of the City's rights and obligations under the Purchase and Sale Agreement and
the Escrow Agreement, including the Escrow Deposit and all interest earned thereon.
E. DOSP wishes to purchase from the City all of the City's rights and
obligations under the Purchase and Sale Agreement, provided that the City agrees to
convey to DOSP legal title to. Lot 10, which is legally described in Exhibit "B" hereto,
subject to the limitations and restrictions, and in accordance with the terms and conditions
set forth herein.
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NOW, THEREFORE, in consideration of the covenants and agreements herein
set forth and other good and lawful consideration, the receipt and sufficiency of which is
hereby acknowledge, the parties hereto, intending to be legally bound, agree as follows:
1. RECITALS. The foregoing recitals are true and correct and are hereby
incorporated in this Agreement by reference.
2. SALE AND PURCHASE OF TRACT 3: In consideration of the Purchase
Price, as defined below, the City agrees to sell to DOSP and DOSP hereby agrees to
purchase from the City all of the City's rights and obligations under the Purchase and Sale
Agreement and the Escrow Agreement, including, specifically, the Escrow Deposit. The
sale and purchase shall be evidenced and consummated by an Assignment, Assumption
and Consent to Assignment Agreement, executed by the City, DOSP, the Escrow Agent
and the Seller on or before , 1997 (the Assignment").
3. PURCHASE PRICE FOR TRACT 3: The total Purchase Price for Tract 3
is $2,436,066.15, consisting of the purchase price of $2,350,000 plus the sum of
$86,066.15, which represents interest earned on the Escrow Deposit from the date the
escrow was established through May 20, 1997, as shown in Escrow Agent's statement of
escrow balance, attached hereto as Exhibit "C". DOSP agrees to pay to the City the
Purchase Price upon its receipt of the Assignment signed by the City, the Seller and the
Escrow Agent.
4. CONVEYANCE OF LOT 10: Simultaneously with the payment of the
Purchase Price for Tract 3, the City agrees to quit claim to DOSP the City's legal title to
Lot 10, by executing and delivering to DOSP a Quit Claim Deed, which shall contain the
following restrictions and limitations:
(a) In the event the property is used for any purpose other than to provide
parking to the public, title to Lot 10 shall revert to the City.
(b) In the event that DOSP sells or leases the property, or a portion thereof, to
a third party, then all "net proceeds" from the sale or lease shall be paid by the
Buyer to the City. The term "net proceeds" shall mean all amounts paid or payable
to the seller of the property, reduced by the sum of $477,000, which represents
reimbursement of the amount DOSP paid to the original seller of the property to
the City.
S. CONDITIONS PRECEDENT: The obligations of DOSP and the City under
this Agreement are subject to the parties obtaining all necessary approvals from their
respective governing bodies and the consent of the Seller to the Assignment
6. CITY'S RIGHT TO PURCHASE PROPERTY FROM DOSP: DOSP shall
not sell Tract 3 to a third party for a period of 10 years following the date of the
Assignment without the consent of the City, which may be withheld or conditioned in the
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City's sole discretion. During said 10 year period, the City shall have the right to purchase
Tract 3 from DOSP and DOSP shall be obligated to sell Tract 3 to the City for the
purchase price of $2,350,000.
7. RIGHT OF FIRST REFUSAL: Subsequent to the expiration of the 10 year
period described in paragraph 6 above, if DOSP desires to sell or otherwise transfer all or
any portion of Tract 3 to a third party, then DOSP must first give written notice thereof to
the City ("Notice of Sale"), in order to give the City an opportunity to buy it. The Notice
of Sale shall offer Tract 3 to the City for purchase, at a purchase price equal to the amount
that DOSP would be prepared to sell or otherwise transfer the property to a bona fide
third party. The City shall have a period of days after receipt of the Notice of
Sale, in which to deliver to DOSP a notice of its intent to purchase the property at the
purchase price specified in the Notice of Sale. In such event, the closing of the purchase
by the City shall occur at a date not later than months following the date of the
City's notice. If the City fails to consummate the purchase within the aforementioned
period, then DOSP, for a period of months thereafter, shall have the right
to sell the property to a third party under terms not more favorable than those offered the
City. In the event DOSP. It is understood and agreed that DOSP shall be required to
comply with the provisions of this paragraph prior to any sale or other transfer of Tract 3
by DOSP. DOSP and the City agree to record a Notice of Right of First Refusal in the
public records of Dade County, Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date set forth above.
ATTEST:
Walter Foeman, City Clerk
APPROVED AS TO FORM AND
CORRECTNESS
31
A. Quinn 'Jones, III
City Attorney
CITE' OF MIAMI
Edward Marquez, City Manager
DEPARTMENT OF OFFSTREET
PARKING
Clark Cook, Executive Director
97- 412
EXHIBIT A
The property known as Tract 3 is legally described as follows:
Tract 3 of "Riverside Plaza" according to the Plat
thereof, recorded in Plat Book 139 at Page 43 of the
Public Records of Dade County, Florida (the
"Property").
ORS:EXFiIB[T Adoc
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EXHIBIT B
LEGAL DESCRIPTION OF PROPERTY KNOWN AS LOT 10:
FOLIO NUMBER: 01-0107-070-1050
MIAMI NORTH
PB B-41
LOT 5 & 6 LESS NI OFT & 16-17-18-19 & 20 BLK 77
LOT SIZE 65500 SQ FT
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&EXHIBIT B.doc
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CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO: Honorable Mayor and Members DATE
of the City Commission
SUBJECT
FROM: Edward Marquez REFERENCES
City Manager
ENCLOSURES:
May 30, 1997 FILE
Sale of Tract 3 and Conveyance of
Legal Title to Lot 10 to Off -Street
Parking Authority
City Commission Agenda - June 9, 1977
Pocket Item
As part of its Financial Recovery Plan, the City of Miami had anticipated the sale of two
properties to the Department of Off -Street Parking (DOSP) - Tract 3 (Riverside Plaza) and Block
77, also known as Lot 10 ("Lot 10").
Appraisals were conducted on the properties and fair market values were established as follows:
Appraisal 1 Appraisal 2 Appraisal 3 Fair Market Value
Tract 3 $2,100,000 $2,800,000 $2,100,000 $2,350,000
Appraisal 1 Appraisal 2 Appraisal 3 Fair Market Value
Lot 10 $2,125,000 $2,600,000 N/A $2,362,500
DOSP had agreed to purchase these properties assuming the City could provide clear title at time
of sale. During the due diligence period, a question arose concerning the ownership of Lot 10.
Special Counsel for DOSP concluded that in all likelihood, DOSP has equitable title to Lot 10.
A copy of DOSP's Counsel's opinion is attached hereto. Review by the City's Law Department
confirms this opinion.
DOSP has asked that the following occur:
• DOSP will purchase Tract 3 (Riverside Plaza) from the City for $2,350,000 plus $86,066,
which represents money earned on the City's escrow deposit for the purchase of the property.
• DOSP shall not sell Tract 3 to a third party for a period of 10 years without the consent of the
City. During said 10 year period, the City shall have the right to purchase Tract 3 from
DOSP for the purchase price $2,350,000. Subsequent to the expiration of the 10 year period,
DOSP must give the City first right of refusal to purchase the property at a purchase price
equal to the amount of any bona fide offer they have received for the property.
• The City provide a Quit Claim deed to DOSP for Lot 10, with the caveat that:
1. In the event the property is not used for public parking, title to Lot 10
shall revert to the City, or
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2. If the property is sold or leased to a third party, all net proceeds from the
sale or lease of the property shall be paid by the buyer to the City, after
payment by the City to DOSP of all amounts paid by DOSP. It is
anticipated that this property will be sold either to the Federal
Government of a private purchaser within the next 24 months. The term
"net proceeds" means all amounts paid or payable to the seller of the
Property, approximately $477,000, which is the amount paid by DOSP to
the seller of the property to the City.
It is in the City's best interest to consummate the transaction on Tract 3 before June 20, 1997 as
if the property is not transferred to DOSP by that date, the escrow on the property will close and
the City will automatically become the owner of the property. Should this occur, DOSP will lose
all rights associated with a direct purchase from Alandco, Inc., the current owner.
9'7- 412
Ai'R-30-97 WED 01 : 39 PM t,
LAW OFPITES
FIELDSTONE LESTER & SHEAR
FIRST UNION FINANCIAL CENTER
SUITE 2100
200 SOUYN 0ISCAYNE BOULEVARD
MI>tlai, Florida 33131
RONALD FIELDSTONE, P.A.
PAUL A. LESTER. P.A.
DAVID SHEAR, P.A.
TELEPHONE (3051 982.1555
..—
FACSIMILE (305) 982-1550
LYNNE HAMPYON NOWALL
WES SITE: hitp://wvr.f!•r.com
E-MAIL: jlj@fl-s.com
OF COUNSEL
ROBERT a. OAOY. P.A.
NVESTIOATION REPORT
TO: Clark Cook, Executive Director
David L. Willis, Director -Administration and Enforcement
Michael Kosnitzky, Chairman
Miami parking System
Dept. of Off -Street Parking
FROM: Ronald R. Fieldstone, Esquire
DATE. April 25, 1997
P, 02
FIELDSTONE LETTER h SHEAR
IS OF COUN664. TO:
HANIMAN CRIDEN
KOROE & CNAYKIN. I.A.
RE: Municipal Parking Lot 10 - Review and Analysis of Documentation and Information
This Memorandum shall serve as a Seal report with respect to this firm's review of
documentation provided in connection with the issue involving the legal and equitable ownership
of Municipal Lot Number 10 ("Lot 10").
A. I§s= to Im Investiewed. The issue has arisen as to who is the rightful owner of Lot
10. The City of Miami ("City") has legal title to Lot 10 although as will be sot forth in this report,
both the City and the Department of Off -Street Parking ("Department") have treated Lot 10 as being
awned by the Departmena for approximately 40 years, There have been recent discussions initiated
by the City about the Department purchasing Lot 10 fioii the City. In connection therewitb, our law
frm was engaged as special counsel for the Depa tmmt to analyze.the legalities involving tl e
potential purchase of Lot 10 by the Depamnent from the City and whether such purchase would,be
appropriate. Accordingly, we have undertaken the task of investigating all documents available wvith
respect to the original acquisition in 1956, the subsequent mortgage payments, and the maintenance,
operation and internal treatment of Lot 10, We have also interviewed those palsies that have had any
degree of knowledge involving Lot 10 going back to the 1950's.
It is our understanding that the City and the Department are aeon -adverse with respect to the
issue at hand: however, the Department needs to have a legal justification to purchase Lot 10 from
the City.
Our report includes a review of existing documentation, certain relevant City ordinances as
Well as interviews with key public officials, together with legal research involving the issues of
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resulting trust and equitable title, In particular, we have also reviewed certain bond offerings
authorized by the City on behalf of the Department to determine what disclosures were made therein
with respect to Lot No. 10.
I. In an effort to deal with its parking problems in the early 19501s, the City
Connnission ("Commission") of the City adopted an ordinance creating an advisory Off -Street
Parking Authority (the "Authority"), The Authority eventually reeouunended that a municipal
packing program should be established and centralized, and in November 1955, the Commission
passed an ordinance (No. 5461) creating the Off -Street Parking Board ("Board") and the Off -Street
Parking Department. The Board was given the powers, duties, and responsibilities typically given
to private corporations, in addition to the supervisory control over the operation of municipal off-
street parking facilities. All acts of the Department were subject to the Board's approval.
2. Additionally, the 1955 ordinance obligated the Department to operate, manage
and control the off-street parking facilities of the City, and gave the Department the authority to
acquire, own, use, lease, operate and dispose of real and personal property (including the power to
enter into contracts and to make and enforce rules governing the off-street parking facilities of the
City). The Director was given general supervision over and responsibility for the maintenance of off-
street parking facilities, subject to the direction and approval of the Board and the City Manager.
3. In 1956, William L. Pallot, the. Chairman of Department, prepared a proposal
to purchase the Property from the current owners for $400,000. The proposal was on behalf of the
"Department of Off -Street Parking of the City of Miami," After the proposal was prepared, it was
presented to and approved by tiro Commission, as evidenced by the resolution passed by the
Commission an June 20,1956. There was to be a down payment of $125,000 and a purchase money
mortgage in favor of the Seller for the balance, which mortgage was to be repaid from revenues
derived from the Property. Thereafter, in 1959, the Commission passed Ordinance No. 6631 in order
to do the following: (1) establish the Department of Off -Street Parking acid the Off -Street Parking
Board for the City under State Law, rather than City Ordinance; (2) repeal the Department and Board
that were established under City Ordinance by Ordinance No. 5461, and (3) ratify, validate and
confirm the acts and proceedings of the Department and Board that were performed after the Board
and Department were created by Ordinance No. 5461.
4. In 1960, the Commission passed Ordinance No. 6631 in anticipation of the
purchase of additional properties, construction of parking facilities thereon and the issuance of
revenue bonds to pay the costs involved. The ordinance was careful to point out that the revenue
bonds were not to constitute a debt of the City and that they were to be repaid out of revenues earned
from the operation of parking facilities throughout the City.
S. Various correspondence, internal memoranda, City resolutions, interviews
with key public officials, revenue bond offerings, and other documentation throughout the years aU
indicate that the City and the Department believe that the Department owns the Property, In the early
1990's when the City encouraged redevelopment in the Overtown area, the City asked the
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Department to sell the Prop
erty perty to it at market value. The City then could turn around and sell it to
a development company interested in the redevelopment project. In connection with the City's
interest to purchase the Property, the Commission passed resolutions authorizing any action
necessary to complete the purchase; the Department did likewise. ,After the project failed, the issue
of ownership of the Property was dropped until recently.
6. In an effort to locate assets to pay its Iarge deficit, the City realized that the
"legal" title, or deed to the Property is in the City's name. Now the City has offered to sell the
Property to the Department. Because of the belief that the Property belonged to The Department for
all these years, our firm was Hired to investigate and report to the Commission.
C. Dement eyiew.
In connection with our review, we are including the following with this
Mcmomndum-.
1. Copies of ordinances which have been provided to us related to the
establishment of the Off -Street Parking Board by the City and subsequent ordinances related thereto,
including ordinances and resolutions involving Lot 10 subsequent to the formation of the Board.
This includes information provided by the Clerk of the City .
2. ReIevant correspondence and other documentation related to Lot 10 and
fiuvding matters and ownership issues related thereto.
3. Copies of quit claim deeds related to the acquisition by the City of Garage #1
on behalf of the Department.
4. Acquisition documents related to OId Garage #2, which garage was purchased
by the City for the benefit of the Department.
S. Copies of relevant pages ofthe City, Parking System Revenue Bonds, for the
years 1992 and 1993.
6. Legal research memorandum with supporting cases.
A. Other FactoTs and Information.
In addition 'to the above documentation, relevant copies of which are enclosed, we have had
numerous discussions with both Clark Cook and David Willis concerning this matter. We have
contacted Walter Foeman, the City Clerk, to obtain relevant documentation that may be in the
j Clerk's file concerning Lot 10. We have also contacted the City Attorney's office and have been
referred to Rafael Diaz, Esq., who confirmed that the City Attorneys office has no relevant
j` documentation in its files.
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FIELDSTONE LESTER & SHEAR
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In addition to the above, we met with George Kunde, the former Director of the Department
during the 1950's when Lot 10 was initially purchased, as well as Jack Rice, the former City
attorney, who was the attorney for the City during the 1950's and until 1972.
Although Mr. Kunde and Mr. Rice each had different thoughts and comments, I believe that
there was a certain consistency in what each one stated, which is the following:
1. Both believe that revenues from the Department were utilized to pay the
$125,000 down payment on the Lot 10 property. George was almost sure of this fact and Jack Rice
believed that the City had no other source of handing and that utilizing the Department revenues
would be the norm with respect to City operations.
2. George was pretty sure that all checks for the Department was conducted
through the City and that the City basically kept the books and records for the Department during
the 1950's. George was not aware of any separate bank account for the Department at that time since
it was basically run as an agency of the City. In fact, George actually worked for the City and was
appointed as the Director of the Department as as adjunct to bis City fiauction.
3. Both parties were clesi that Lot 10 was utilized and controlled solely by the
Department and that the City had = operating rights with respect w same.
4. Jack Rice advised me to review the 1960 Bond Offering to determine what
statements were made therein. It was Sack's opinion that the revenues of the Department were
pledged to support the bands. This would probably apply with respect to subsequent bond offerings
as well. Although we have been unable to secure a copy of the 1960 Bond offering after contacting
the special bond- counsel, Howard Whittaker, Esq.', as well as cheoking the microfilm records atthe
City , we were able to review more recent bond offerings concerning the issue at hand. Both the
1992 and 1993 bond offerings confirm that Lot 10 is owned and operated by the Department.
In reviewing the City ordinance documentation, the original Ordinance No, 5461 established
the Department pursuant to Section 19(a) of the Charter of the City , It is apparent that the initial
intent was to form the Department as an,agency of the City,and not really, as. a separate independent
entity. We understand that initially, the books, records and operations of the Department were e
maintained by the City and it is evident from the real estate files that the funding of acquisitions was
apparently done directly by the City on behalf of the Depatiment. Thereafter, in 1959, it became
necessary for the City to have the Departmerit established under applicable State law and not
pursuant to the City Charter_ Accordingly, pursuant to Ordinance No. 6631, and in anticipation of
a 1960 bond offering, the old authorization was rescinded and the new authorization was established
under applicable State law, Ordinance No. 6406 actually ratified and corifinned all prior actions of
the.Off-Street Parking Board. notwithstanding the fact that the Board was established pursuant to a
City Charter rddw than pursuant to State law.
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It is noteworthy that Resolution No, 71-405 involving the Department actually confirms that
the Department owns Lot 10 and authcrized the purchase of adjacent lots to complete the parcel.
Revolution No. 91-42 further reiterates the fact that Lot 10 was owned by the Department or was
intended as such. In fact, Resolution No. 91-42 actually discussed the notion of the City acquiring
Lot 10 from the Department pursuant to terms which were then being negotiated.
From reviewing various correspondence that is referenced as paragraph C.Z. above, the
Department actually funded the mortgage payments and the mortgage payoff on the purchase money
mortgage related to the purchase of Lot 10, For informational purposes, Lot 10 was acquired in the
name of the City for the sum of $400,000.00, with a S 125,000.00 down payment and a $275,000.00
Mortgage provided to the seller. The enclosed correspondence confirms that the Department actually
made the mortgage payments and received funding to satisfy the mortgage prior to its maturity. In
addition, all Off -Street parking documentation as included in the file further indicates that Lot 10
(referenced as Northwest 1st Avenue 4-5 Streets Lot-144 spaces metered) was owned by the
Depar=ent.
C. LegW Research. Based upon the factual investigations made, our firm conducted legal
research on the issues of resulting taut and the concept of legal vs. equitable ownership of Lot No.
10. These concepts are defined as follows:
1. A "Resulting Trust" is atrustthat arises by operation of law, and is established
in accordance with the presumed intention of the parties as gathered from the nature of the
transaction. It arises in situations in which parties actually intend to create a trust relationship but
fail to execute documeuts or establish adequate evidence of intent A common example of a resulting
trust is where 9ne party f amishes the money to buy a parcel of property in the name of another party,
with both parties intending at the time thai the legal title is held by the named grantee for the bey efat
of the unnamed beneficiary. (Waldington v. Edwards, 92 So. 2d 629, 631 (Fla. 1937).
2. The concept of "Equitable Title" or "Equitable Ownership" is the beneficial
interest of one person whom equity regards as the real owner, although the legal title is invested in
another party.
A legal memorandum together with supporting case law is included with this package as Item
VI.
In reviewing the above documentation and discussing this matter with the parties indicated
above, I have the following conclusions:
1. The Department did not take title to real property in its name immediately
after its organization in 1955. The files reflected that the City took legal title to Lot 10 on behalf of
the Department, since the City viewed the Department as an agency of the City. In fact, the
Department was the entity that actually contracted to buy the property.
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FIELIISTONE LESTER &r SHEAR
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2. It is unclear at this time who made the initial down payment of $125,000.00
to purchase Lot 10 although Messrs. Kunde and Rice have both opined that funds were provided by
the Department to make the purchase. Unfortunately, no City records are currently available to
reflect the actual source of the funding.
3. In reviewing the funding with respect to Old Garage No. 2, the City
requisitioned funding on behalf of the Department, who had contracted for the purchase, and the City
took title to such property thereafter. however, when the property was subsequently sold in 1979,
it was actually the Department that was listed as the seller on the CIosing Statement.
4. The Department funded the mortgage payments on Lot 10 and actually funded
the payoff of the mortgage as well, which payoff was approximately $273,000.00.
5. Both the Department and the City have in the past taken the position that the
Department owns Lot 1 b. This is based upon the above -referenced advances as well as the bond
offering documents.
6. The above referenced conclusions also are supported by the fact that the City
has never demanded nor received any compensation with respect to Lot 10. The Department owns
and operates properties for itself and also manages properties for the City. With respect to parking
facilities that are managed for the benefit of the City, the Department charges a management fee and
then remits all net proceeds to the City. Such has never been the case with respect to Lot 10.
Accordingly, if the City really believes it is the owner of Lot 10, it has neither followed its past
practices of receiving revenue in connection with the facility, nor has it viewed the Department as
the management agent for the City in connection therewith.
7. For informational purpose's, the preliminary title report we received indicates
that the City is still the record owner of Lot 10 and that there has been no change in title since the
City's acquisition in 1956.
S. The City authorized the formation of the Department as an adjunct to the City
pursuant to City Ordinance No. 5461. Thereafter, in 1959, the City passed Ordinance No. 6406,
declared the need for The Department to be formed according to Chapter 30997, and ratified all
provisions of Ordinance No. 5461 in connection therewith. This was accomplished in anticipation
of a bond offering. Them was documentation confirming same. Accordingly, it is reasonable to
conclude that the City took title to real estate on behalf of the Departmmt since the City did not view
the Department as an independent entity. Once the new Ordinance was passed in 1959 and the bond
offering was completed sometime in 1960, the City apparently took a different position and,we
assume that the Department thereafter started acquiring properties in its name.
9. The legal analysis set forth confirms the conclusion that the City received
legal title to Lot 10 and that the Department has equitable title to Lot 10. 'Therefore, the Department
should be deemed the owner of Lot 10.
If you have any questions or comments, please feel free to contact me.
V.w 0""'
FIELDSTONE LESTER & SHEAR
97— 412
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