Loading...
HomeMy WebLinkAboutCC 1996-01-31 Minutescl�Ti� l,�'' MIAlY�I 1 I 0141 lit MAP a vf. ZI INDEX MINUTES OF SPECIAL MEETING January 31, 1996 ITEM SUBJECT LEGISLATION PAGE NO. NO. 1. DISCUSSION CONCERNING MIAMI HEAT, R 96-81 1-15 FLORIDA PANTHERS, AND MIAMI 1/31/96 ARENA -- DIRECT CITY ATTORNEY TO FILE ACTION FOR DECLARATORY RELIEF IN CONNECTION WITH CONTRACT WITH DECOMA / LEISURE MANAGEMENT INTERNATIONAL. MINUTES OF SPECIAL MEETING OF THE CITY COMMISSION OF MIAMI, FLORIDA On the 31st day of January, 1996, the City Commission of Miami, Florida, met at its regular meeting place in the City Hall, 3500 Pan American Drive, Miami, Florida in special session. The meeting was called to order at 5:07 p.m. by Mayor Stephen P. Clark with the following members of the Commission found to be present: !00, PRESENT: ABSENT: Mayor Stephen P. Clark Vice Mayor Wifredo Gort Commissioner Joe Carollo Commissioner J.L. Plummer, Jr. Cesar H. Odio, City Manager A. Quinn Jones, III, City Attorney Walter J. Foeman, City Clerk Maria J. Argudin, Assistant City Clerk Commissioner Miller J. Dawkins 1. DISCUSSION CONCERNING MIAMI HEAT, FLORIDA PANTHERS, AND MIAMI ARENA -- DIRECT CITY ATTORNEY TO FILE ACTION FOR DECLARATORY RELIEF IN CONNECTION WITH CONTRACT WITH DECOMA / LEISURE MANAGEMENT INTERNATIONAL. Mayor Clark: We've got a quorum present of this Commission at the present time. Vice Mayor Gort: Sorry I'm late. Mayor Clark: That's all right. The reason this meeting was called, so everyone in the audience and those in the public that are viewing can understand why, we have been severely criticized in the past for not trying to do the best we could to keep the Heat and the Panthers in the Miami Arena, which they both admitted that they came to, to start with, because the Arena wasn't built when the Heat was even in operation, to tell you the truth, nor was the Panthers. We've done our best to accommodate them up to this time. And we have an attorney, an outside attorney, Mr. Ron Krongold, who has a statement to make of where we are in any negotiations that have been tried in the past, in vain on our part. We have tried, but no response. Mr. Ron Krongold. Ron. 1 January 31, 1996 Ronald Krongold, Esq.: Mr. Mayor and Commissioners, as you know, I was hired by the City to negotiate a contract or negotiate with Decoma, who is the operator of the Arena, to buy their contract so that the City of Miami, whose hands have been tied up until this time with regard to negotiating with the Miami Heat or the Panthers, so that we could do all we could to keep the Miami Heat and possibly the Panthers here in Miami. The reason we had to buy that Decoma contract was that there is a provision in it which may or may not be operative, but it provides that the City of Miami cannot compete or build a new Arena in replacement of the Arena that's existing right now. Furthermore, because of various comments by Decoma, through LMI (Leisure Management International) and John Blaisdell, their president, the City of Miami has had its hands tied, with the threat of a lawsuit, to go and speak directly to the Heat. And, in fact, I think that the Commission is aware of a letter from Mr. Blaisdell, the president of LMI, the operator for Decoma, to myself, dated January 19, 1996. This letter is in reply... We had a meeting, after a number of requests, with LMI here at the City of Miami on January 4th, where Commissioner Plummer told Decoma that the City of Miami wants to do all they can to keep the Miami Heat here in Miami. And therefore, it seems that the most expedient way and the fastest way would be to buy the Decoma contract, so we could terminate the noncompete. And we would like to enter into negotiations, which they were aware of when they came to that meeting, and, in fact, we thought possibly that they would come with a number for the City of Miami to mull over, that we would like to buy the contract. At that meeting, Mr. Blaisdell said he would get back to us, after speaking to his various partners, and let us know their position. He did... And also at that meeting, we asked permission to talk to the Heat directly. He did get back to us _.. _ _.._..in..his_January 19th letter, and I'll paraphrase and read parts of the letter, but I'm paraphrasing correctly: "Although we are mindful of the City's objectives, any actions by the City and its officials must respect the contractual rights of LMI, DMAL (Decoma Miami Associates Limited), and Decoma Ventures. LMI, DMAL and Decoma Ventures believe that any conversations between the City and the Miami Heat regarding the Miami Arena or any alternative to the Miami Heat remaining as a tenant in the Miami Arena would constitute tortious interference with or violation of the respective rights under one or more of the license agreements, the lease, or the Arena contract, a breach of a covenant thereunder, or both. None of LMI, DMAL or Decoma Ventures are willing to waive their rights under such agreements or under such... under applicable law, and if the City of Miami or those acting on its behalf interfere with or violate the rights of LMI, DMAL or Decoma Venture, under any such agreements or under applicable law or breach any covenants thereunder, such party will vigorously pursue all available remedies to enforce their rights." Whether or not they have the right to keep the City of Miami from talking to the Heat is a legal question. But certainly, when somebody that's the operator of the Arena gives you a letter that so strongly says that they don't want you to talk to the Heat, and they are basically working for the City, without knowingly entering into litigation, you're put... you're therein advised, you better not speak to them. Even if they leave the City of Miami, you better not speak to them. Well, after that letter, I had further conversations with John Blaisdell with regard to the... purchasing the contract. And we didn't arrive at a price, but I told him in those conversations that if we did arrive at any price for buying the contract and being able to remove the noncompete clause and so forth, that, of course, it would have to be approved by the Commission, and in addition to that, we would have to have the authority, or we'd have to have their approval - not necessarily that we need it, but we wouldn't want to go... we wouldn't subject ourselves to unnecessary litigation - to go to speak to the Heat. Because it really doesn't make a lot of sense for us to pay a fairly heavy number for their contract, and then two days later, the Heat says to the Miami Commission, "We're leaving anyways." He again told me that he would think about it, and on Monday, he called me back and told me that he really couldn't reach a conclusion, he'd rather we didn't speak to the Heat. Well, it sort of has left us where 2 January 31, 1996 we've been all along - in limbo. If we want to speak to the Heat, then it seems they're going to sue us. If we don't speak to the Heat, and especially in light of what's going on in Broward County, it seems that they may leave Miami. In my conversations with A. Quinn Jones, who is the counsel, City Attorney, we've been discussing as to whether or not that noncompete is operative, or is it voidable, especially in light of what's happened just recently. And it's the opinion of the City Attorney - and I concur - that there certainly is a question as to whether or not we are prohibited under that noncompete from either negotiating with the Heat or entering into negotiations with regard to a new Arena. And based on that, I believe that the City Attorney, with your permission or your acquiescence, should file an action for declaratory relief, to ask the courts exactly whether or not we are prohibited from going and building a new Arena. That brings you up to date. Commissioner Plummer: Mr. Mayor, I so move. Mayor Clark: All right. Moved that we follow that advice. Vice Mayor Gort: Second. Commissioner Carollo: Discussion. Mayor Clark: Discussion. Commissioner Carollo: Mr. Mayor, if I may get on the record from the lady that's transcribing the minutes of the meeting who she's representing. (INAUDIBLE COMMENT NOT ENTERED INTO THE PUBLIC RECORD) Commissioner Carollo: OK. You are here on behalf of Greenberg Traurig? OK. That's fine. Mr. Mayor, if I may, if it's appropriate. We always usually give the courtesy to former City officials who might be present to speak. Former Mayor Suarez is here, and I understand he has to leave by six, if not before. Mayor Clark: Plummer's got a funeral at six. Commissioner Plummer: Well, Mr. Carollo, I only agreed to meet today based on the fact that this was going to be a five to ten minute meeting. Commissioner Carollo: Well, I... Commissioner Plummer: I've never tried to cut Xavier off, but he can speak another day. My customers don't have that opportunity. Commissioner Carollo: I need to get... I need to get his legal opinion, not as a former Mayor, but as an attorney, on the record... Commissioner Plummer: Fine. Commissioner Carollo:... because this is going to affect my decision. Mayor Clark: All right. Mr. Suarez, you've been convinced to speak, so, for the record. Mr. Xavier Suarez: Mr. Mayor and Commissioners, as you know... And not in any way to disagree with distinguished counsel, with whom I've had very fruitful conversations. The Manager told me that he had been hired in connection with these issues some months ago, and I 3 January 31, 1996 1i had occasion to discuss the matter very briefly with him. But I had made a proposal, as you know, that was a public proposal on the financing of a new Arena. And in connection with that, I had occasion to look at the noncompete provision in question, and to discuss with yourself, Commissioner Plummer, the City Manager, some of the ideas that arose in my mind, having read that provision. The reason, of course, that I discussed them with yourself is that you are chief elected official of the City, and Commissioner Plummer, because he had been appointed, as I understood, by yourselves, to lead negotiations in connection with trying to keep the Heat in town. Mayor Clark: Along with the Manager. Mr. Suarez: Exactly. And I didn't want to in any way leave out Commissioner Gort, but I think maybe we briefly touched upon it one time, Commissioner, at your office, when I was there for another reason. I don't disagree with distinguished counsel. I do want to say, however, that whatever the provision means when it says that the City shall not sponsor a competing facility, it cannot mean that you are prohibited from having conversations, from discussing with the Miami Heat what their needs would be, what they would like by way of an extension of a lease, what they would like by way of a new facility. So that's one point that should go on the record. Anyone that suggests that this Commission and individuals in the Commission cannot discuss these matters, that cannot be a valid opinion. And I would object strongly to the letter that you received some months ago, or some weeks ago, or some days ago, I guess... j_......... Commissioner Plummer: A week ago. Mr. Suarez: ... from Decoma, a week and a half, two weeks ago. A couple of other things. In conjunction with my review of that provision, Mr. Mayor and Commissioners, in a pamphlet that I received from the people who run the Arena... And frankly, they have so many different entities, I'm never too sure which is which. I saw their fall bulletin, and in the back of that - this is apparently a quarterly publication - in the back of it, they seem to be promoting the Arena for trade and exhibitions, which is something that another provision in the same clause, which I believe is Section 11 of the Master Lease Agreement, it states there that they cannot principally market the Arena for that purpose - trade and exhibitions, et cetera. In view of the fact that everyone knows that two of the principal sports tenants in the facility are considering leaving, it would seem that if they are now promoting the Arena for those purposes, they could be in violation of the very provision that they're asking you and they're suggesting you're in violation of. One other thing. I think the City Commission and the Sports and Exhibition Authority would be well served if it researched the full implications of this provision in toto, as a whole. The provision could be a restraint of trade and against Florida Statutes. I am not ready to give you an opinion on that... By the way, I'm here as an individual, and not on behalf of my law firm. And I have just looked at the statute. It is a very complex statute, and I'll give you a citation for it. I think that perhaps special counsel could look at the implications of Florida Statute 542.33. Ron, perhaps you've looked at it. It may be that this entire provision is unenforceable, and there are other public policy implications. The idea that the City's hands are tied, to me, is an idea that... I don't want to say it's preposterous, but that's the word that comes to mind. And whether it's a declaratory judgment action, or simply putting them on notice that they may be violating the same provision, simply acting in good faith to try to make sure that the Miami Heat stays in town, cannot possibly put the City in legal jeopardy. Of course, what the courts will do, as you know, Mr. Mayor, is, something depends on a particular day and a particular time, and, you know, it's always unpredictable. But the City has never shied from litigation when it wanted to do something that it felt was worthwhile, and I think the City would be well served in pursuing all of these avenues, and not being in any way cowed by the letter received from Decoma. Mayor Clark: Thank you, Mr. Suarez. Now, I'd like to read... This is to Mr. Carollo by the City Attorney: 4 January 31, 1996 f "You have requested a legal opinion on the following question: 'Does the competition clause contained in Section 11 of the Land Lease Agreement dated October the 10th, 1986 (The Agreement) prohibit the City of Miami (The City) from constructing or participating in discussions about the construction of a new Arena? May said clause be waived or otherwise rendered void?' The question cannot be answered categorically yes or no, because of conflict in principles, the impact upon them, and the different interpretations which a court may have concerning said principles. Therefore, we will attempt to summarize our research concerning the matter, and to give our best conclusion with regard to the validity of the noncompetition clause in the Agreement." Mr. Quinn Jones, let's hear from you for a moment on this. A. Quinn Jones, III, Esq. (City Attorney): Mr. Mayor and members of the Commission, you were given copies, I guess, by... Mayor Clark: We have them. Mr. Jones:... Commissioner Carollo relative to... Commissioner Carollo: Yes, I was. Mr. Jones: ... relative to the opinion. Of course, I'd rather not go into the theory that would be utilized in going and seeking a declaratory judgment. I've mentioned in the opinion the various things that Mr. Suarez has mentioned about restraint on trade, further concerns about tortious interference, and the like. What I would suggest to you, and with all due respect to whatever you wish to do, I think that because there is some uncertainty as to what the City's rights and obligations are with respect to that particular clause, that the best and most practical way to proceed would have to be for a court to construe those rights and obligations. And that's exactly what needs to be done, and that was... that's what I would respectfully suggest that you authorize our office to proceed with it. Mayor Clark: All right. Any further questions? Commissioner Plummer: Mr. Mayor, let me just make one brief comment. The thing that doesn't make any sense to me is that we have expressed all the way along that we want that team to stay here, we should have it here. But the thing I don't understand is, is if that team leaves, it affects Decoma's income tremendously, no question about it. Commissioner Carollo: Absolutely. Commissioner Plummer: And why they have been meeting, as they expressed to us, on many occasions, with the Heat, and are completely stalemated, that they won't allow us to try to come in there and help matters, which would, in effect, financially help them to keep the Heat here. Yet, they are stonewalling, every time you turn around, to say, "We don't want you to interfere." And I think that it's wrong, that they just are not making good sense to me. Commissioner Carollo: Well, not only that, Commissioner Plummer, but even more so, according to the law, they also have what I would construe to be a fiduciary responsibility to act in good faith, and to try to keep the two major tenants that we have in that Arena. And as of now, I haven't seen anything that shows me that they have acted in good faith in order to keep a them in the Arena. And I think that's the question that everyone in Miami should be asking the people behind Decoma, "Why are you doing this?" Now, Mayor Suarez, you wanted to say something else before you left. 5 January 31, 1996 �i Mr. Suarez: In case I wasn't clear, Mr. Mayor, if I may, and Commissioners, I don't recommend the course of action that is represented by the motion before you. I think the City, under advice of legal counsel and special counsel, and any other counsel it wants to get, could simply act as it deems the agreement to be binding and effective on you, and not seek a declaratory judgment. You may or may not get litigation, in any event. Why anticipate it? The City should take an aggressive posture to respond to that letter, to suggest to Decoma they may be in violation of the same provision, and not engage in litigation that may be thrown out as premature, in any event. Declaratory judgment actions are not just engaged in by courts, as it states here, with all due respect to the City Attorney, because case law is unclear. That's not enough to get a declaratory judgment. I think the City ought to get its legal advice and act accordingly. I thought Mr. Krongold put on the record sufficient justification for the City to continue negotiations - not negotiations, I'm sorry - conversations leading to the possibility of a new Arena being built. As long as the City doesn't do things like acquire land, make available land, provide resources, or take a positive legal act in furtherance of the building of a new Arena, you're not sponsoring a new Arena. You're simply talking, and considering, and contemplating, and discussing with the Heat how to keep them in town. Mayor Clark: Mr. Suarez, from your vantage point, that's very clear and very easy to say. But from our vantage point, we will be held personally responsible - do you want to write the check now? - if it... Mr. Suarez: Who said that you're going to be held personally responsible? Mayor Clark: That letter says that. Commissioner Carollo: John Blaisdell, from Miami Leisure International (sic). Mr. Suarez: You're acting in your capacity as officers of the City of Miami, officials of the City of Miami, elected officials. You have official immunity. I'd love to represent you for free, Mr. Mayor, in that one. Mayor Clark: All right. OK. I think... Vice Mayor Gort: Mr. Mayor, I have a question. Commissioner Carollo: Let me correct that. Mayor Clark: Wait a minute, wait a minute. Willy's got the... Commissioner Carollo: It's Leisure Management International. Mayor Clark: Mr. Gort has the floor. Go ahead. Vice Mayor Gort: I can understand what Mayor Suarez is saying. And if you read the covenant, it says we cannot "build" another Arena. Does that also tell us we cannot talk? Two questions. One is talk about a new Arena. And number two, can we talk to a third party about the agreement that... the lease agreement with the Heat? That is... that's a different situation. Mr. Krongold: To answer your question... IVice Mayor Gort: Yes. Mr. Krongold: As to the noncompete, the noncompete says that you can't take any action to do r any kind of.. to build a new Arena, any action. So that's the first part. The second part is, with regard to talking - OK? - it's not necessarily contained within the noncompete. F 4 6 January 31, 1996 f Y 'tyr� �y2.ilf Commissioner Plummer: That's correct. Mr. Krongold: What Blaisdell is saying is, he's saying that there's a contract between Decoma and the Heat, and that we would be tortiously interfering with that contract. Commissioner Plummer: That's the key. Mr. Krongold: That's what he's saying in his letter. Do I agree with him? We've been put on notice that if we talk to the Heat, we're going to be sued. One of the reasons why we were negotiating and trying to reach an amicable agreement with Decoma, and, in fact, we told them we were willing to pay a reasonable profit to buy their contract, was to avoid long, laborious negotiation - long, laborious litigation - that while we're litigating, if there is not an immediate determination as to that litigation, the Heat leaves and the Panthers leave. Commissioner Carollo: Mr. Manager, refresh my memory, because we were both here at the time, and so was Commissioner Plummer. Wasn't John Blaisdell one of the two individuals that helped negotiate the agreement, representing the City's interest at that time with Decoma? Mr. Cesar Odio (City Manager): Yes, he was. Yes, he was. Commissioner Carollo: OK. Who was the other individual? Mr. Odio: Myself. Commissioner Carollo: No, no, no. I'm talking from the Law Department, that worked with Mr. Blaisdell. Mr. Odio: The City Attorney was Chris Korge. Commissioner Carollo: Chris Korge and John Blaisdell. Remember those two names. Now, after Mr. Blaisdell finished negotiating that contract for the City, some time after, he went to work where, sir? Mr. Odio: After the contract... Commissioner Carollo: Don't get nervous, Mr. Manager. Just state for the record how the facts are. Mr. Odio: I am... I'm too old to get nervous, Commissioner. Commissioner Carollo: I know that. I know that. We all are. Mayor Clark: Please. Mr. Odio: I'm trying to remember that. It wasn't immediately after we finished the contract and the Arena began to be built... Commissioner Carollo: Well, I'm saying some time after that, you know. Mr. Odio: About two years later, I would say, he went to work for Decoma Ventures. Commissioner Carollo: Now, did he go work as the Executive Director of the Miami Sports and 'Exhibition Authority? 7 January 31, 1996 Mr. Odio: No. At first... The Executive Director of the Miami Sports and Exhibition Authority was me, the City Manager. And... Commissioner Carollo: Until they got rid of you through shenanigans. Mr. Odio: And he represented me... Commissioner Plummer: Or your designee. Mr. Odio:... or my designee. I appointed him to represent me in those meetings. After... Vice Mayor Gort: Wasn't that Rick Horrow? Mr. Odio: Sir? Vice Mayor Gort: What happened to Rick Horrow? Commissioner Plummer: He was already gone. Mr. Odio: No, Rick Horrow had been gone before the Arena was built. Then Mr. Blaisdell later was appointed by the Exhibition and Sports Authority an Executive Director, after the City Manager was removed as the Executive Director. Commissioner Carollo: OK. Then after that... OK. So he was one of the two individuals representing the City with yourself, negotiating this agreement with Decoma. Then he became the Executive Director of the Miami Sports and Exhibition Authority. Then where did he go after that? Mr. Odio: After he left the Exhibition and Sports Authority, he went to work for Decoma in Europe. Commissioner Carollo: OK. He went to work for Decoma. Mr. Odio: In Europe. Commissioner Carollo: In Europe. Then when did he pop out again in Miami with Decoma? Mr. Odio: I don't have the exact time. I know he went from Europe to Houston. Commissioner Carollo: Mm-hmm. Mr. Odio: And later on, he came back to Miami. Commissioner Carollo: But it was with Decoma. Mr. Odio: Yes, sir. Commissioner Carollo: So the John Blaisdell that - John A. Blaisdell - that sent this letter threatening to sue us and me, individually, and as a government official, is the same John Blaisdell that we have been talking about here, right? Mr. Odio: Yes, sir. 8 January 31, 1996 Commissioner Carollo: Well, then, as someone once said, I think, in a debate, I know John Blaisdell. He was a friend of mine. Mayor Clark: He "was" a friend. Commissioner Carollo: Yeah. The... Well, anyone that is threatening to sue me, Mr. Mayor, I'd certainly have to consider their friendship. Now, I wanted to establish the facts as they are so that the public could get a better picture of what's going on here. I don't think it's a pretty picture, not a pretty picture at all. But the bottom line is that if we go for a declaratory judgment... And by the way, I was the one, that - after hearing so much verbally, that we couldn't speak to them, we could speak to them - I was the one that asked for the City Attorney to give me a written legal opinion as to what he thought. And also, I requested the same of Mr. Christopher Korge, the former general counsel of the Miami Sports and Exhibition Authority. The opinion that Mr. Quinn Jones gave me was dated January 26th. The one that Mr. Korge gave me was dated January 17th, with an additional memo to clarify the first memo dated January 23, 1996. Now, Mr. Korge, who also negotiated this contract with the City, sometime later became the legal counsel for the Miami Sports and Exhibition Authority for nine and a half years. Now, I have a great concern as to, you know, all the friendships that I'm seeing here, so that I won't call it by another name, but I have a greater concern, and I really need to clarify this - at some point in time, I wish it would be clarified - as to, for instance... And maybe there is a logical explanation, I don't know. I'm just asking. In the list of lobbyists for Dade County government, for the full year of 1995, Christopher Korge appears as the lobbyist for Leisure _.._._. .__Management of Miami, which then became Leisure Management International, as I understand it, the very same people that are managing the Arena, and are threatening to sue us. It would seem to me that - or at least it's a little confusing in my eyes - that he could be legal counsel and also be listed as a lobbyist for these people. Then again, there might be a logical explanation for that. I also understand or had been told - maybe again, it's a total confusion, but I do have a question on that, too, and I would like for it to be clarified - that when the manager of Leisure Management of Miami, that is now Leisure Management International, was buying - I don't know if it was a home or a piece of property here in Dade County - that at the closing, the attorney that was present with him was Christopher Korge. Now, why am I bringing all this history here? For the simple fact that someone is putting a gun to our heads and threatening that they are going to use it. And my position is that either use the gun or put it away, because I, for one, that have just come to this Commission, and have been here for a little over 60 days, and have not been a party to this, I haven't had the opportunity to request these legal opinions, to go through so much of the information that I've been going through for weeks now. I am not going to stand by and be threatened by these individuals, and risk losing the Heat for the citizens of Miami. I think that we deserve the right, and by law, we have the right, to go ahead and speak to the Heat or whomever we want. And at the same time, my position is that all the threats that were put in this letter by Mr. Blaisdell are unenforceable. Now, with that, let me ask the following of the City Attorney, Mr. Krongold, and of any other of the many attorneys that I see that are here today: As a lay person, it would seem to me that if someone sues you, there has to be some damage. So what damage can there be if we discuss the concerns with the Heat, their concerns for staying, their requirements for staying in Miami, with the Heat, or any other entity? What damages are there? Mr. Jones: Commissioner, I can't quantify for you what damages they may ask the Court to award them. I mean, that's pure speculation at this point. You know, you asked me for an opinion. I gave you my best advice. It's not binding on you, and if a majority of this Commission wants to follow my advice, so be it. I've given you my best call. If you want to listen to Mayor Suarez or any other lawyer out there, you have that right, as Commissioner, to accept that. Commissioner Carollo: And I understand, Mr. Jones, and by no means am I trying to degrade your legal opinion. Please understand that. 9 January 31, 1996 Commissioner Plummer: I'm about ready to call the question. Commissioner Carollo: I respect your legal opinion, just like I do the legal opinion of other individuals that we heard from here today, and might hear from before the day is over. Mr. Suarez: Mr. Mayor, if I may, one last thing in relation to what the City Attorney just said, and what Commissioner Carollo just asked about, and I think Commissioner Plummer and Commissioner Gort also alluded to this. If they were to succeed in a lawsuit against you, the damages would be limited to what you're already considering paying to them to take back the rights at the Arena. The only way it would ever exceed that is if they could prove a tort, a tortious interference. And for that, it has to be unjustified on your part. There is no way they would ever be able to prove this is unjustified. The City has a valid interest in trying to keep its principal tenant at the Arena. It could never be a tort. This would just simply be a breach of contract action. The damages would never be more than what you're already talking about paying to Decoma. So it's almost no greater exposure than if you simply continue along the double path of trying to negotiate with Decoma in good faith, and at the same time, trying to negotiate to keep the Heat in town. Mayor Clark: OK. Commissioner Plummer: There's two damages here, Mr. Mayor. There's one financial. The __....__other one is from a PR (public relations) standpoint. If, in fact, we proceed, they call a breach of contract, and the Heat leaves, they're going to turn around and they're going to say, "Well, if the City of Miami had not got themselves involved and stuck their nose in our business, we would have been able to succeed in a negotiation which was ongoing." So you got a double-edged sword. Commissioner Carollo: Well, they could say that, but they got to prove that. Mayor Clark: Wait, wait, wait. Commissioner Plummer: Well, hey. Mr. Mayor... Vice Mayor Gort: Mr. Mayor, you know, I'm not an attorney. Commissioner Plummer: Neither am I. Let's do it. Vice Mayor Gort: And I think we have our Attorneys here that we hired because of the conflicts that could have been with the two different attorneys from the Authority and outside attorneys who have been dealing with this, I think, for more than six months now. Commissioner Plummer: We pay a man, let's follow his advice. Mr. Krongold: That's right. Vice Mayor Gort: How long have you been at this now? Mr. Krongold: Five, six months. Vice Mayor Gort: Five or six months, to prove to the City that we wanted to do something, and we wanted to do it legally, and we wanted to do it correctly. Mayor Clark: Someone who could do it objectively, too. 10 January 31, 1996 r Vice Mayor Gort: I think we have an outside attorney that doesn't have any influence. He hasn't been influenced by anyone at all, and that's why we got an outside attorney to give an opinion. I'm hearing they both are saying the same thing. And now, the declaratory judgment, how long will something like this take? Mr. Krongold: I don't do litigation, and I defer to your attorney. Mr. Jones: Under the Declaratory Judgment Act, or the State Statute, you can ask for expedited consideration. So, of course, if we file, we would ask the Judge to give it expedited consideration. I can't tell you how long, really, because I don't know what Judge it would be assigned to, or what his or her calendar would be like. I would hope that we could get a hearing on it as soon as is practical in that Judge's schedule. Mayor Clark: All right. Vice Mayor Gort: Thank you. Mayor Clark: Mr. Manager, you got a word, then I'm going to call the question. Commissioner Plummer: Please. _..__Mr-.Odio: No, sir. We have to keep two things in mind. One, that we have to obtain an extension of the lease for the Miami Heat. Then, two, be able to, at some point - and I'm not sponsoring an Arena, I'm qualifying that - at some point, find the permanent solution for the future of the Miami Heat in town. So whatever we do has to be in mind that we... The first step is at some... We have to be able to intercede for the City of Miami people, to keep the Heat in town, that we have to get an extension of the lease. We have been at this for two years. We have been trying in every way to intercede for the Heat extension, and we have not been successful. If they leave town, Commissioner Plummer, it's not because of the doing of the City of Miami and Commission, or anybody else... Commissioner Plummer: Well, that's what they'll say. Mr. Odio:... but because of the failure of negotiations between Decoma and the Heat. Commissioner Carollo: See, this is the point that I was making, Mr. Manager. Commissioner Plummer: Call it. Commissioner Carollo: That the point was that we have been at this for two years. I've only been here for slightly over 60 days. Now, what has been told to me by key representatives of the Huizenga organization was that approximately that time, two years or so, whatever time it was, that they bought the interest in Decoma, that they did that because there were people with this City or involved with the Sports Authority and this City that were the ones that pushed for the Huizenga people to buy into Decoma. Now, that, in itself, is a great concern to me, because if I would have been here in this Commission two years ago, I would have certainly brought up what is being brought up today, and more, and that's the fact that... You know, I would have asked the question of whether it was legal for any one of the major tenants to have bought into the management company that had the management contract for the Arena... Commissioner Plummer: We couldn't have stopped them. We couldn't have stopped them. 11 January 31, 1996 �i Commissioner Carollo: ... and if that, in itself, wasn't a possible conflict of interest. I would have asked that question then, and I'm asking it now, because I don't know. I'm not an attorney. But I think a logical person would have asked that. Mr. Odio: Commissioner, we did, at the time, and I think Krongold - where is he? He fainted? - researched that for us. The way the contract was structured, I believe that the new owners would have had to buy more than 85 percent of the interest of Decoma Ventures Limited to be able to... Commissioner Plummer: That's correct. Mr. Odio: For them, it would have triggered that they would have had to come to the City Commission for approval. Mayor Clark: Which they did not. Mr. Odio: They did not buy more than 85, so therefore, we could not interfere with the sale. Commissioner Carollo: What percent did they actually end up buying? Mr. Krongold: Commissioner Carollo, on November loth, in answer to our special resolution where we questioned as to the makeup of the owner or the operator - the owner, Decoma - we received a letter dated November 15th, which was sent to Bill Perry, again, from John Blaisdell, where he identified the operators. And, in fact, one provision is fairly interesting. In August 1994, in a transaction widely reported, the shareholders of BIL Development, Linbeck Miami Corporation, HSA Management Inc., which entitles, makes up Decoma Venture, sold their interest in such entities... entities related to H. Wayne Huizenga. OK. To answer your question, in effect, Mr. Huizenga owns, it would seem from his letter, 85 percent of effective ownership of the operator. We inquired. We were given these documents. Unless you want it to go beyond that, with some type of a litigation, which at that time would... Commissioner Carollo: Well, if we're sued, then we could certainly get into that and much more. Right? Mr. Krongold: There's a number of things that you can inquire about. Mayor Clark: All right. Now, listen. We called for a short meeting. I think everyone has discussed their... Commissioner Carollo: Well, I just want to state, Mr. Mayor, what my position is going to be, before we vote. If we go for a declaratory judgment now... And what I ask myself is, "Why wasn't this done a long time ago?" But, you know, we're here today and the past is the past. If we go for a declaratory judgment now, this is probably going to take weeks. I doubt it very much if this is going to take days. And it might take months before we get one back. And in essence, what this Commission would be doing is saying good-bye to the Miami Heat, because we are going to lose them. And the people in Leisure Management... Mayor Clark: Well, if you keep talking like that, we'll lose them. Commissioner Carollo: Well, no, sir. The people in Leisure Management International will. If we're losing the Heat, Mr. Mayor, it's not going to be because of me, sir, with all due respect. Mayor Clark: Well, I wasn't here when this contract... You were here when this contract was made. And now, all of a sudden, you're back here again after eight years... 12 January 31, 1996 r Commissioner Carollo: That's correct, sir. Mayor Clark:... and now, the contract is all screwed up. Commissioner Carollo: That's correct, sir. Mayor Clark: Why wasn't it straightened out eight years ago? Commissioner Carollo: Sir, because the people that were assigned by the Manager to negotiate for this City, this contract, some of them are working for the other side now, and the others, I don't know which side they're at. They seem to be jumping back and forth all the time. Mayor Clark: Well, the City Commission had to approve the contract eight years ago. You're the final... The buck stops right here. Commissioner Carollo: That is correct, sir. And Commissioner Plummer and myself were here, and we approved the contract, based on the advice of the City Attorneys, Mr. Korge, Mr. John, Blaisdell, and the City Manager, and others who were here then. Mayor Clark: All right. Commissioner Carollo: And we're not about to take the blame for that one, sir. Mayor Clark: And we're not about to take the blame for the Heat leaving Miami. We have tried incessantly to get in charge, or to get in touch with the people that can make the decision, and we're been stopped, right at the door, without talking to them. So we're going to take some action here today. I don't know what's going to happen, but if there's no further discussion, I'm going to... Call the roll, Mr. Clerk. Commissioner Carollo: Sir, my last statement, if I may. We vote upon this today for a declaratory judgment. This is going to take weeks, if not months. We've lost the Heat. My position, as one member of this Commission is going to be that this contract is unenforceable. If they want to sue, let them sue. They could sue me. We will see them in court. And at the same time, I will be willing to meet with the owners of the Heat and anyone else interested in keeping the Heat in Miami the minute this meeting is over. And having said that, let me say this. That I think the world of Mr. Huizenga, Ted and Mickey Arison. There's been so much talk, negative to them. We might disagree, but these are people that have truly been champions of this community. Whether there might be disagreements now or not, we have a lot to be thankful to them for, for bringing the Heat, bringing the Panthers, and the other sports teams to Miami. So having said that, sir, I'm ready to vote. Mayor Clark: Call the roll, Mr. Clerk. 13 January 31, 1996 The following resolution was introduced by Commissioner Plummer, who moved its adoption: RESOLUTION NO. 96-81 A RESOLUTION OF THE MIAMI CITY COMMISSION DIRECTING THE CITY ATTORNEY TO FILE A COMPLAINT FOR DECLARATORY JUDGEMENT IN THE COURT OF APPROPRIATED JURISDICTION AGAINST DECOMA MIAMI ASSOCIATES, LTD., TO DECLARE THE RIGHTS AND STATUS OF THE PARTIES WITH RESPECT TO SECTION 11.1 OF THE LEASE AGREEMENT BETWEEN THE CITY OF MIAMI, MIAMI SPORTS AND EXHIBITION AUTHORITY, AND DECOMA MIAMI ASSOCIATES, LTD. (Here follows body of resolution, omitted here and on file in the Office of the City Clerk.) Upon being seconded by Vice Mayor Gort, the resolution was passed and adopted by the following vote: AYES: Commissioner J.L. Plummer, Jr. Vice Mayor Wifredo Gort Mayor Stephen P. Clark NAYS: Commissioner Joe Carollo ABSENT: Commissioner Miller J. Dawkins COMMENTS MADE DURING ROLL CALL: Commissioner Plummer: I think that there's things that have to be considered. Number one, that we are entering into this action predicated on the fact that we wanted to move forward. That doesn't mean that we can't, next week, change our minds, but at least we've filed and shown the good faith that this City is trying to do. I would say that there is no way that I'm looking for 25 percent of anybody's revenue, or increasing the price of the tickets by twelve dollars ($12). I vote yes on the motion. Vice Mayor Gort: We've worked in downtown trying to keep the Heat in here. We've tried to do everything that's possible. But at the same time, you know, if you look at sports today, it's becoming a multi -billion dollar business. And let's face it, there's no loyalty. And I think the Heat are very nice, and all that, but I think the Heat should be very thankful, like at Joe Robbie's and the Dolphins, that Miami gave them a break so they could get started, and, well, after they made it, they want to leave. I think that the City of Miami has bent over backwards to bring these people here. We gave them all the chances and all the breaks in the world so they could make it. And then what happens after they make it? They leave. And I'm going to do everything possible to keep them here, Joe, because I want to keep it, and I think it's important 14 January 31, 1996 for us, because of all that. But at the same time, I think they should have some consideration. Look what happened to the Browns. I don't think... The loyalty to the City or to the fan is not there anymore. I think all they're worried about is their money. Who's going to pay the biggest buck. Right now, they're in the best deal they could be. They're negotiating from strength. They got two hundred and two million dollars ($202,000,000) committed from Dade County - I mean from Broward County. So they want us to come up with two... I hope we can come up with the idea to finance it, and I hope we do it. Yes. Commissioner Carollo: I vote no for the reasons stated. COMMENTS MADE FOLLOWING ROLL CALL: Mayor Clark: It's five -fifty-one. We are now in recess. Commissioner Carollo: Yeah. Mr. City Attorney, will you be the one representing the City, sir, in the declaratory judgment request? Mr. Odio: That was the motion that you voted on. Commissioner Carollo: Yeah. I just want to clarify that. Mr. Jones: Yes, right. Commissioner Carollo: Thank you very much, sir. THERE BEING NO FURTHER BUSINESS TO COME BEFORE THE CITY COMMISSION, THE SPECIAL MEETING WAS ADJOURNED AT 5:51 P.M. Stephen P. Clark MAYOR ATTEST: Walter J.Foeman CITY CLERK Maria Josephine Argudin ASSISTANT CITY CLERK 15 January 31, 1996