HomeMy WebLinkAboutM-95-0784MEMORANDUM
TO: MEMBERS OF THE MIAMI CITY COMMISSION
MEMBERS OF THE MIAMI SPORTS AND EXHIBITION AUTHORITY
FROM: W ILLIAM R. PERRY,
EXECUTIVE DIRECTOR/CEO
DATE: NOVEMBER 15, 1995
RE: MIAMI HEAT LEASE EXTENSION
Per the mandate of the Miami City Commission last week, representatives from the Miami
Sports and Exhibition Authority, Leisure Management International and the Miami Heat met
today to discuss an extension of the Heat's License Agreement at the Miami Arena.
At that meeting, the Heat requested that their current License Agreement be extended two years,
with the rental payment increasing ten percent per year commencing during the 1998/1999
season. They have also requested that they retain all of the advertising and suite rights they
currently have under the terms of their existing License Agreement. Leisure Management
International has rejected the Miami Heat's offer.
LMI has countered that offer with a two-year extension with the Miami Arena keeping the
advertising and suite rights and the Heat paying $9,000 Base Rent per game plus 7.5 % of all
Net Ticket Sales Receipts in excess of $200,000, plus applicable taxes. The Miami Heat and
Leisure Management International have agreed to meet again in early December to continue their
negotiations.
Please do not hesitate to contact me if you have any questions.
Submitted into the public
WRP/mch/heatext.mem record in connection with
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9 5— 784 Ca• ,le�h
300 Biscayne Boulevard Way, Suite 1120, Miami, Florida 33131 (305) 381-8261 / Fax (305) 375-0636
CITY OF MIAMI, FLORIDA.
INTER -OFFICE MEMORANDUM
Commissioner Miller J. Dawkins November 15, 1995
TO : DATE FILE
SUBJECT MSEA/Land Lease Agreement
FROM A. Quinn Jones, III REFERENCES:
City Attorney
ENCLOSURES:
The following is a brief summary of our research concerning the questions posed by your
memorandum dated November 14, 1995.
1. The Miami Sports and Exhibition Authority ("MSEA") was created pursuant to Section
212.057, Florida Statutes (subsequently repealed and replaced by Section 212,0305, Florida
Statutes). MSEA was created by Ordinance No. 9662 which has since been amended several
times. The City Commission may amend, alter or change MSEA in any way it sees fit as long as
such changes are consistent with the statutory requirements set forth in Section 2I2.0305(4)(b)4a,
Florida Statutes, which states as follows:
... The governing bodies of such municipalities shall designate or
appoint an authority that shall have the sole power to approve the
concept, location, program, and design of the facilities or
improvements to be built in accordance with this paragraph and to
administer and disburse such proceeds and any other related source
of revenue. The members of each such authority shall be selected
from the tourism and hospitality industry that does business within
such municipality and shall serve at the pleasure of the governing
body of such municipality. The annual budget of such authority
shall be subject to approval of the governing body of the
municipality.
b. The authority, by resolution to be adopted from time to
time, may invest and reinvest the proceeds from the convention
development tax and any other revenues generated by the authority
in the same manner that the municipality in which the authority is
located my invest surplus funds....
2. Section 1 1.1 of the Land Lease Agreement between the City of Miami ("City"), MSEA
and Decoma Miami Associates, Ltd. as Operator ("Decoma") dated October 10, 1986 (the
"Lease") can be interpreted to mean that the City has agreed not to "sponsor in any manner" a
competing facility to the Miami Arena "during the term" of the Lease. Section 1 1.1 appears to be
unrelated to the identity of the Operator under the Lease and would continue in effect for the term
of the Lease or until the Lease is terminated by default or otherwise. Section 11.2 on the other
9 5- 784 Aalter �:oernan
21ty Clerk
hand, is applicable only while Decoma remains the Operator. The moment Decoma is no longer
the Operator, its duty not to compete appears to end despite the fact that the Lease may not have
been terminated. The documents that have been requested by the City Commission in its
Resolution 95-780, adopted at the October 26, 1995 Commission meeting may shed some
additional light on whether Section 11.2 continues to be applicable.
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