HomeMy WebLinkAboutR-94-0198J-94-112
03/14/94
RESOLUTION NO. 9 198
A RESOLUTION, WITH ATTACHMENT(S)I ACCEPTING
THE RECOMMENDATION OF THE OFF-STREET PARKING
BOARD THAT THE PROPOSAL SUBMITTED BY OLYMPIA
BUILDING PARTNERS, LTD., A FLORIDA LIMITED
PARTNERSHIP, IS THE MOST ADVANTAGEOUS
PROPOSAL FOR THE REDEVELOPMENT OF THE OLYMPIA
BUILDING, LOCATED AT 174 EAST FLAGLER STREET,
MIAMI, FLORIDA; AND AUTHORIZING AND DIRECTING
THE CITY MANAGER TO EXECUTE A LEASE
AGREEMENT, IN SUBSTANTIALLY THE ATTACHED
FORM, BETWEEN THE CITY OF MIAMI AND OLYMPIA
BUILDING PARTNERS, LTD., FOR THE
REDEVELOPMENT, INCLUDING THE PLANNING AND
DESIGN, CONSTRUCTION, LEASING AND MANAGEMENT,
OF A RESIDENTIAL FACILITY WITH ANCILLARY
RETAIL USES AT SAID BUILDING.
WHEREAS, the Board of Directors of the Off -Street Parking
Board of the City of Miami (the "DOSP Board"), on
July 29, 1992, voted to recommend to the City Manager that it
is in the best interest of the Gusman and Olympia Enterprise,Fund
to seek proposals from private parties to redevelop the Olympia
Building; and
WHEREAS, the City Commission, pursuant to Resolution
No. 93-791, adopted December 16, 1993, waived competitive
bidding procedures and authorized the Off -Street Parking Board to
(a) advertise for proposals for renovations and use of Olympia
Building to provide housing for low and/or moderate income
ATTit T
I �{ N a id�61
cm corMSSION
MEETING OF
NEAR 2 4 1994
Fl&"uflon No.
94- 198
people; (b) evaluate/select proposals received and negotiate a
i
proposed contract with the most acceptable proposer; and (c)
present a negotiated contract to the City Commission for its
j review and ultimate approval prior to execution thereof; and
WHEREAS, the DOSP Board received two proposals in response
to its duly issued Request for Proposals, formed a selection
committee and retained the services of Kenneth Leventhal &
Company as its outside consultant to conduct an independent
review of the proposals; and
WHEREAS, the DOSP Board accepted the recommendations of both
the selection committee and Kenneth Leventhal & Company that the
proposal submitted by Olympia Building Partners, Ltd., a Florida
limited partnership, is the most advantageous proposal to
redevelop the Olympia Building, and voted to recommend to the
City Commission that the negotiated contract with Olympia
Building Partners, Ltd., be approved by the City Commission for
the redevelopment, including planning and design, construction,
leasing and management, of the Olympia Building;
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 recommendation of the DOSP Board that the
proposal submitted by Olympia Building Partners, Ltd., is the
most advatageous proposal for the redevelopment of the Olympia
94- 198
Building, located at 174 East Flagler Street, Miami, Florida, is
hereby accepted.
Section 3. The City Manager is hereby authorized and
directed to execute a Lease Agreement, in substantially the
attached form, between the City of Miami and Olympia Building
Partners, Ltd., for the redevelopment, including the planning and
design, construction, leasing and management, of a residential
facility with ancillary retail uses at the Olympia Building.
Section 4. This Resolution shall become effective
immediately upon its adoption.
PASSED AND ADOPTED this 24th
AT
TY HIRAI
City Clerk
PREPARED AND APPROVED BY:
.) MUWM 416QA--,
G. MIRIAM MAER
Chief Assistant City Attorney
GMM/as/M4219
day of March , 1994.
STCE CLARYf, MAYOR
APPROVED AS TO FORM AND
CORRECTNESS:
-3- 94- 198
LEASE AGREEMENT
Between
THE CITY OF MIAMI, a municipal corporation
of the State of Florida
and
OLYMPIA BUILDING PARTNERS, LTD.
a Florida limited partnership
94- 198
TABLE OF CONTENTS
Page
ARTICLE I
INCORPORATION AND RECITAL . . . . . . . .
. .
2
ARTICLE II
EXHIBITS AND DEFINITIONS . . . . . . . . .
. .
2
Section
2.1 Exhibits . . . . . . . . . . . . . . .
. .
2
Section
2.2 Defined Terms . . . . . . . . . . . . .
. .
3
ARTICLE III
GENERAL TERMS OF LEASE OF CITY PROPERTY .
. .
8
Section
3.1 Lease of City Property . . . . . . . .
. .
8
( a )
City Property . . . . . . . . . . . . . .
. .
8
(b)
Term . . . . . . . . . . . . . . . . . . .
. .
9
(c)
Possession of City Property . . . . . . .
. .
9
(d)
Extension of Possession Date . . . . . .
. . .
10
Section
3.2 Restrictive Covenants . . . . . . . . .
. .
11
(a)
Use Prohibitions of the City Property . .
. .
12
(b)
Non Discrimination . . . . . . . . . . . .
. .
12
(c)
Minority Procurement Compliance . . . . .
. .
13
(d)
Approval of Leases . . . . . . . . . . . .
. .
13
.(e)
Assignment of Existing Tenants' Leases . .
. .
14
(f)
Existing Historic Artifacts . . . . . . .
. .
14
Section
3.3 Easements and Areas Reserved to City .
. .
14
(a)
Easements and Use Rights Granted to City .
. .
14
(c)
Confirmatory Instruments . . . . . . . . .
. .
15
Section
3.4 Warranty as to Title or Condition of City
Property . . . . . . . . . . . . . .
. .
15
Section
3.5 Rental . . . . . . . . . . . . . . . .
. .
16
( a )
Initial Payment . . . . . . . . . . . . .
. .
16
( b )
Second Payment . . . . . . . . . . . . . .
. .
16
( c )
Third Payment . . . . . . . . . . . . . .
. .
16
( d )
Rental . . . . . . . . . . . . . . . . . .
. .
17
(e)
Rental Payments . . . . . . . . . . . . .
. .
19
( f )
Operating Expenses . . . . . . . . . . . .
. .
19
(g)
Payment Guarantee . . . . . . . . . . . .
. .
19
(h)
Developer's Records . . . . . . . . . . .
. .
20
(i)
The True -Up Period . . . . . . . . . . . .
. .
22
Section
3.6 Covenants for Payment of Public Charges
by
Developer . . . . . . . . . . . .
. .
23
Section
3.7. Security and Police Protection . . . .
. .
24
Section
3.8. Condition of City Property . . . . . .
. .
25
Section
3.9. Interruption of Theater Operations . .
. .
25
ARTICLE IV
DESIGN AND CONSTRUCTION . . . . . . . . .
. .
25
Section
4.1 Payment and Performance Bond . . . . .
. .
25
Section
4.2 Construction Schedule; Preliminary and
Construction Plans . . . . . . . . . .
. .
25
Section
4.3 Construction Plans . . . . . . . . . .
. .
27
Section
4.4. Access . . . . . . . . . . . . . . . .
. .
27
Section
4.5. Progress of Construction . . . . . . .
. .
28
Section
4.6. Permits and Approvals . . . . . . . . .
. .
28
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94- 198
�i
Section 4.7. Compliance with Law . . . . . . . . . . . .
28
Section 4.8 Extension of Time Requirements . . . . a
29
Section 4.9 Alterations and Renovations . . . . . . .
29
ARTICLE V LAND USES . . . . . . . . . . .
30
Section 5.1 Uses . . . . . . . . . . . . . . . . . . .
30
ARTICLE VI TRANSFER ASSIGNMENT . . . . . . . . . . . . .
30
Section 6.1 Definitions . . . . . . .
30
Section 6.2 Purposes of Restrictions on Transfer
31
Section 6.3 Transfers . . . . . . . . . . . . . . . . .
32
Section 6.4 Notice of Transfer; Information as to
Holders of Partnership Interest . . . . . .
33
Section 6.5 Effectuation of Certain Permitted
Transfers . . . . . . . . . . . . . . . .
34
ARTICLE VII MORTGAGEE FINANCING; RIGHTS OF
MORTGAGEE. . . . . . . . . . . . . . . .
35
Section 7.1 Leasehold Mortgage . . . . . . . . . . . .
35
Section 7.2 No Waiver of Developer's Obligations or
City' s Rights . . . . . . . . . . . . . .
44
ARTICLE VIII REMEDIES . .
44
Section 8.1 Events of Default
44
(b) Failure - Performance of Other Covenants,
Etc . . . . . . . . . . . . . . . . . . .
45
(c) Failure - Bankruptcy, Etc . . . . . . . . . .
45
Section 8.2 Remedies for Developer's Default . . . . .
46
Section 8.3 Events of Default - City . . . . . . . . .
47
(a) Events of Default . . . . . . . . . . . . . .
47
(b) Remedies for City's Default . . . . . . . . .
48
Section 8.4 Unavoidable Delay . . . .
48
Section 8.5 Obligations, Rights and Remedies
Cumulative . . . . . . . . . . . . . . .
49
ARTICLE IX PROTECTION AGAINST MECHANICS' LIENS AND OTHER
CLAIMS; INDEMNIFICATION . . . . .
50
Section 9.1 Mechanics' Liens and Payments
of
Obligations . . . . . . . . . . . . . . .
50
(a) Developer to Discharge Mechanics' Liens . . .
50
(b) Payment of Materialmen and Suppliers . . . . .
51
Section 9.2 Indemnity . . . . . . . . . . . . . . . .
51
ARTICLEX INSURANCE . . . . . . . . . . . . . . . . . .
52
Section 10.1 Insurance Coverage . . . . . . . . . . .
52
(a) Property Insurance . . . . . . . . . . . . . .
52
(b) Business Interruption Insurance . . . . . . .
53
(c) Automobile Liability Insurance . . . . . . . .
53
(d) Liability Insurance . . . . . . . . . . . .
54
'(e) Theft Coverage . . . . . . . . . . . . . . . .
54
( f ) Flood Insurance . . . . . . . . . . . . .
54
(g) Worker's Compensation . . . . . . . . . .
55
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(h)
Copies . . . . . . . . . . . . . . . . . . . .
55
Section
10.2 Responsible Companies - Blanket
Insurance . . . .
55
Section
10.3 Named Insureds - Notice to City of
Cancellation
56
Section
10.4 City May Procure Insurance if Developer
Fails to Do So
57
Section
10.5. Insurance Does Not Waive Developer's
Obligations . . . . . . . . . . . . . . .
57
Section
10.6 Loss or Damage Not to Terminate Rental or
This Lease . . . . . . . . . . . . . . .
57
Section
10.7 Proof of Loss . . . . . . . . . . . . . .
58
Section
10.8 Property Insurance Proceeds . . . . . . .
58
(a)
Authorized Payment . . . . . . . . . . . . . .
58
(b)
Disposition of Insurance Proceeds for
Reconstruction . . . . . . . . . . . . . . . .
59
Section
10.9 Covenant for Commencement and Completion
of Reconstruction . . . . . . . . . . . .
60
ARTICLE XI
CONDEMNATION
61
Section
11.1 Entire City Property Taken by
Condemnation . . . . . . . . . . . . . .
61
ARTICLE XII
RIGHTS OF OCCUPANCY AND ACCESS; . . . . . . .
62
MAINTENANCE; OWNERSHIP OF IMPROVEMENTS
AND
PARKING. . . . . . . . . . . . . . . . . . .
62
Section
12.1 Waste . . . . . . . . . . . . . . . .
62
Section
12.2 Maintenance and Operation of
Improvements . . . . . . . . .
62
Section
12.3 Ownership of Improvements - During
Lease . . . . . . . . . . . . . . . .
62
Section
12.4 Surrender of City Property . . . . .
62
Section
12.5 City and Developer to join in Certain
Actions . . . . . . . . . . . . . . . . .
63
Section
12.6 Parking . . . . . . . . . . . . . . . . .
63
ARTICLE XIII
MISCELLANEOUS PROVISIONS . . . . .
64
Section
13.1 No Partnership or Joint Venture . . .
64
Section
13.2 Florida and Local Laws Prevail . . . . . .
64
Section
13.3 Arms Length Transaction . . . . . . . . .
64
Section
13.4 Attorneys Fees . . . . . . . . . . . . . .
65
Section
13.5 Antitrust Certification . . . . . . . . .
65
Section
13.6 Award of Lease . . . . . . . . . . . . . .
65
Section
13.7 Notice . . . . . . . . . . . . . . . . . .
65
( a )
Developer . . . . . . . . . . . . . . . . . .
66
(b)
City Manager
66
Section
13.8 Receipt of FEMA Monies
66
Section
13.9 Conflict of Interest . . . . . . . . . . .
67
Section
13.10 Titles of Articles and Sections . . . . .
67
Section
13.11 Counterparts . . . . . . . . . . . . . . .
67
Section
13.12 Successors and Assigns . . . . . . . . . .
67
Section
13.13 Entire Agreement . . . . . . . . . . . . .
68
94- 198
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") made as of the day of
, 1994 (the "Effective Date"), by and between THE
CITY OF MIAMI, a municipal corporation of the State of Florida
(hereinafter referred to as "City"), and OLYMPIA BUILDING PARTNERS,
LTD., a Florida limited partnership (hereinafter referred to as
"Developer").
STATEMENT OF BACKGROUND AND PURPOSE
City as owner, leases to Developer, in "AS IS" condition, the
land and improvements described in Exhibit "A" attached hereto and
made a part hereof (the "City Property"). The Gusman Center for
the Performing Arts, (the "Theater"), the Theater lobby, the second
floor, the alley running south from Flagler Street, and the alley
running west from Southeast Second Avenue south of the Theater, all
of which are highlighted in Exhibit "A", are not part of the City
Property.
Developer proposes to develop a mixed -use project, consisting
of retail and residential (affordable housing) uses, (hereinafter
referred to as the "Project"). The City Property, as it presently
exists, is a ten (10) story office building which, together with
the adjacent Theater, is listed in the National Register of
Historic Places. The Developer will improve, renovate, restore and
reconstruct this prominent historical landmark as part of the
Project (the "Development"). The Project shall consist of the
following improvements, more fully described in the plans and
specifications identified on Exhibit "B" attached hereto:
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(a) A retail area, containing approximately 3,664 square
feet.
(b) 79 affordable housing rental units, containing
approximately 33,790 square feet, (hereinafter collectively
referred to as the "Housing Units").
(c) All other amenities listed on Exhibit B.1, as more
particularly described in the Proposal submitted by Developer (as
hereinafter described as Exhibit F) except as such Exhibit F may be
hereinafter modified.
In consideration of the foregoing and of the rent, covenants,
and agreements hereinafter set forth, the parties do hereby
covenant and agree as follows:
ARTICLE I
INCORPORATION AND RECITAL
The recitals contained in the statement of background and
purpose of this Lease are hereby incorporated herein and made a
part hereof.
ARTICLE II
EXHIBITS AND DEFINITIONS
Section 2.1 Exhibits. Attached hereto and forming a part
of this Lease are the following Exhibits:
Exhibit A - Description of the City Property.
Exhibit B - Plans and Specifications for the Project,
including the ground floor and floors 3 to 10.
Exhibit C - Development team
Exhibit D - Easements
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94- 198
Exhibit E - Request for Proposals and Revisions Addenda
dated January 7, 1994.
Exhibit F - Proposal dated February 11, 1994 and Responses
to Proposal review committee questions
submitted by the Developer.
Exhibit G - Permitted Exceptions. (To be provided prior to
Possession Date.)
Exhibit H - Standard Approved Retail Lease Form. (To be
provided prior to Possession Date.)
Exhibit I - Standard Approved Residential Lease Form. (To
be provided prior to Possession Date.)
Exhibit J - Special Repairs and Renovations. (To be
provided prior to Possession Date.)
Section 2.2 Defined Terms. As used herein, the term:
"Acceptable Operator" means an entity experienced in building
management, possessing the qualifications, good reputation,
financial resources and adequate personnel necessary for the proper
performance of all of Developer's obligations under this Lease, in
a manner consonant with the quality, reputation and economic
viability of the City Property and*Improvements, as defined herein
below.
"Acceptable Operator's Agreement" has the meaning ascribed to
it in Section 7.1(c)(iv).
"Acceptable Purchaser" has the meaning ascribed to it in
Section 6.3(b).
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94- 198
"Additional Rental" means any and all payments required of
Developer to the City by the terms of this Lease, other than
Rental.
"Audited Financial Statements" means financial statements,
certified by the Auditor to have been prepared in accordance with
Generally Accepted Accounting Principles and Generally Accepted
Auditing Standards, as promulgated by the American Institute of
Certified Public Accountants.
"Auditor" means a nationally recognized firm of certified
public accountants as may be used from time to time by the
Developer for the purpose of certifying the annual reports of its
financial condition.
"The City Manager" is the Chief Executive Officer of the City,
or its designee.
"Construction Plans" has the meaning ascribed to it in Section
4.3.
"Debt Service Payments" means all sums or amounts paid or
payable during the term of this Lease in connection with any
transaction entered into to finance the Project.
"Default Rate" has the meaning ascribed to it in Section
3.5(e).
"Development Team" shall mean all of those persons or entities
set forth on Exhibit C. Any change in the Development Team shall
require prior written approval of the chief legislative body of the
City (the "City Commission").
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MC •
"Development Costs" means an amount equal to the aggregate of
all costs and expenses actually incurred by Developer for the
purpose of and properly allocated to the Development, including but
not limited to:
(1) Design, planning, architectural and engineering fees,
presentation costs and expenses, surveys and geotechnic tests,
testing and inspections, and design consulting costs;
(2) The cost of labor, equipment, supplies, materials and
services paid to contractors and subcontractors utilized in
connection with the Development;
(3) Legal and accounting fees and expenses;
(4) Interest and other financing costs incurred with respect
to the sale by the Developer of limited partnership interests
carrying tax credits, and other types of financing for the Project,
including all reserves and interest, commitment fees, points and
other financing costs incurred in connection with Developer's
applications and closing of such financing.
(5) Fees and expenses paid to the contractors and
subcontractors.
(6) The cost of property, liability, worker's compensation,
title and other insurance;
(7) The cost of obtaining permits and licenses;
(8) Utility relocation costs and expenses and tap -in fees or
other fees including those of City and County for connection to
utility systems and utility services during construction;
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(9) All reasonable and prudent costs and expenses incurred in
connection with the negotiations and execution of this Lease;
(10) The allocable cost of preopening management, advertising
and publicity and the allocable cost of any opening event,
including advertising and publicity of same;
(11) Construction and bridge loan interest;
(12) Initial Payment, Second Payment and Third Payment to
City as described in Section 3.5(a), (b) and (c).
(13) Developer's Fee and Developer's overhead.
(14) Other reasonable costs and expenses usually and
customarily incurred in connection with developments of this
nature.
"Events of the City's Default" has the meaning ascribed to it
in Section 8.3(a).
"Events of Developer's Default" has the meaning ascribed to it
in Section 8.1.
"Gross Revenue" shall mean all moneys received by Developer
from rental income transactions made and for services rendered by
Developer in the operation of the Improvements, regardless of when
or where the services are rendered including (without limitation)
all rental income from retail and residential uses, fees, all
income derived from vending machines, telephones, laundries or
other sources located on the City Property. If Developer shall
receive insurance or condemnation proceeds or awards, the amount
thereof which represents reimbursement to Developer for items
-6-
94- 198
accounted for as usual and customary Operating Expenses shall be
deemed to be Gross Revenue.
"Improvements" shall mean all existing and future structures
at the City Property.
"Institutional Investor" has the meaning ascribed to it in
Section 7.1(b).
"Insurance Trustee" has the meaning ascribed to it in Section
10.8(a)(ii).
"Leasehold Mortgage" has the meaning ascribed to it in Section
7.1(b).
"Lender" has the meaning ascribed to it in Section 7.1(b).
"Management Fee" shall mean six percent (6%) of Gross Revenue.
"Operating Expenses" means (without duplication) (1) all
reasonable and prudent expenditures for the Improvements, according
to the then current standards of the industry accounted for by the
accrual method of accounting in accordance with generally accepted
accounting principles, made by the Developer or which the Developer
is obligated to make in the operation, ownership or management of
the City Property and the Improvements or any part of either,
including (without limitation) payroll and payroll expenses,
Management Fee, business taxes and Public Charges, costs and
expenses of compliance with tax credit and other governmental
regulations, supplies, license and permit fees, repair and
maintenance expenses, costs and expenses of cleaning, maintaining
and repairing the common area and City Property, utility charges,
ad valorem and personal property taxes, insurance premiums,
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94-- 198
auditing and professional fees and expenses, publicity costs and
expenses, and (2) Rental. In no event shall depreciation of the
Improvements constitute a portion of Operating Expenses.
"Owner" has the meaning ascribed to it in Section 6.1(b).
"Plans" has the meaning ascribed to it in Section 4.2.
"Possession Date" has the meaning ascribed to it in Section
3.1(c).
3.6.
"Public Charges" has the meaning ascribed to it in Section
"Rental" has the meaning ascribed to it in Section 3.5(d).
"Rental Year" means a calendar year consisting of twelve (12)
consecutive calendar months, the first year of which shall commence
on the first day of January of the year following the date of
issuance of the T.C.O. as hereinafter defined.
"Section", "Subsection", "Paragraph", "Subparagraph",
"Clause", or "Subclause", followed by a number or letter, means the
section, subsection, paragraph, subparagraph, clause or subclause
of this Lease so designated.
"Transfer" has the meaning ascribed to it in Section 6.1.
ARTICLE III
GENERAL TERMS OF LEASE OF CITY PROPERTY
Section 3.1 Lease of City Property:
(a) City Property. The City demises and leases to Developer,
and Developer takes and leases from the City, in "AS IS" condition,
the City Property, subject to all of the terms of this Lease.
Mt
94- 198
(b) Term. The Lease shall have a term of forty (40) years,
commencing on Effective Date.
(c) Possession of City Property. The date that the City
delivers the City Property to Developer in accordance with this
subsection (c) is the Possession Date (the "Possession Date"). The
City shall deliver possession of City Property to Developer and
Developer shall take possession thereof, no later than December 31,
1994, subject to the requirements set forth in subparagraphs (i)
through (vi) below, or this Lease shall automatically terminate
without notice of any kind, except as provided in 3.1(d) below.
(i) The City Manager shall have received a Payment and
Performance Bond, as hereinafter defined, as set forth in Section
4.1 of this Lease from Developer.
(ii) The City Manager shall have received a Payment
Guarantee in accordance with Section 3.5(g) of this Lease.
(iii) The City Manager shall have approved a Construction
Schedule in accordance with Section 4.2 of this Lease.
(iv) The Developer shall have obtained financing for all
Development Costs, through a combination of mortgage financing and
the sale of limited partnership 'interests carrying low income
housing and/or historic tax credits.
(v) The Developer shall have received a commitment, from
a generally -recognized title insurance company doing business in
Florida, for the issuance of a leasehold title policy, with no
exceptions to title other than those enumerated in Exhibit G (the
"Permitted Exceptions"); and
94- 198
(vi) The Developer shall have received an unconditional
building permit for construction of the Improvements (the "Building
Permit").
(a) The parties acknowledge that Developer's
ability to obtain the Building Permit may be delayed due to the
existing sewer moratorium in Dade County. Developer shall
diligently pursue, using its best efforts, obtaining the Building
Permit, by the timely filing of all appropriate applications and
requests with Metropolitan Dade County Department of Environmental
Resources Management ("DERM") and Miami -Dade Water and Sewer
Authority.Department (the "Department").
In the event that, notwithstanding Developer's best efforts,
Developer is unable to obtain the Building Permit by December 31,
1994, due only to the fact that the Developer is unable to obtain
a permit for a sewer connection for the Project (the "Sewer
Permit") and Developer shall have delivered a written certification
of its inability to obtain the Sewer Permit to the City, the final
date for taking possession listed in Section 3.1(c) shall be
extended, as follows:
In such event, this Lease shall continue in full force and
effect and the Possession Date shall be extended, with no payment
to City for such extension, for a period of no more than thirty
i
(30) days from the date that the Sewer Permit is obtained, or
i
Developer waives said condition, but in no event shall the
Possession Date be extended beyond December 31, 1995.
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94— 198
(d) Extension of Possession Date. In the event Developer
desires to extend the Possession Date for any reason other than
Developer's failure to obtain the Building Permit due to
Developer's inability to obtain a Sewer Permit pursuant to the
process set forth in Section 3.1(c)(vi)(a) above, Developer may
extend the Possession Date in the following manner. On or before
December 1, 1994, Developer may request an extension of the
Possession Date by sending notification to the City as provided in
Section 13.7 of the Lease. During the period of any such
extension, Developer shall pay to the City Ten Thousand Dollars
($10,000) prior to the first day of each month by which the
Possession Date is extended. In the event any portion of the
extension is for a period of less than one (1) month, Developer
shall pay the prorated amount for that month. If any extension is
requested pursuant to this subsection 3(d), Developer shall notify
City at least ten (10) days prior to the date Developer intends to
take possession of the City Property. All sums paid by the
Developer during any such extension period shall be applied against
the Three Hundred Thousand Dollar ($300,000) Second Payment due on
the Possession Date pursuant to Section 3.5(b).
However, notwithstanding the above, if Developer fails to take
possession by December 31, 1995, this Lease shall be automatically
terminated, without notice of any kind.
Section 3.2 Restrictive Covenants. The restrictive covenants
contained in Paragraphs.(a), (b), (c) and (d) of this Section 3.2
are intended and designed to bind the Developer and its successors
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and assigns and are covenants running with the City Property
throughout the term of this Lease. The parties recognize, however,
that the development and operation of the City Property and the
Improvements in a manner which is in the best interests of both
parties may from time to time require the confirmation,
clarification, or elaboration of this Lease in order to deal
adequately with circumstances which may not now be foreseen or
anticipated by the parties. The parties reserve unto themselves
the right to enter into such interpretive, implementing or
confirmatory agreements from time to time as they may deem
necessary or desirable for any such purpose without obtaining the
consent or approval of any person or entity not a party to this '
Lease, except as may be expressly otherwise provided in this Lease,
or by law.
(a) Use Prohibitions of the City Property. The City Property
hereby demised shall not be used for any unlawful or -illegal
business, use or purpose or for any business, use or purpose which
is immoral or disreputable or extra -hazardous, or in such manner as
to constitute a nuisance of any kind (public or private), or for
any purpose or in any way in violation of the certificates of
occupancy issued by the City (or other similar approvals of
applicable governmental authorities). Parties hereto agree that in
the event casino gambling is legalized during the term of the Lease
the parties shall renegotiate the Rental to provide for an increase
of not less than fifty (50%) percent of the increase in Gross
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Revenues derived from such gambling operated upon the City
Property.
(b) Non Discrimination. No covenant, agreement, lease,
conveyance or other instrument shall be effected or executed by
Developer, or any of its successors or assigns, whereby the City
Property or any portion thereof is restricted by Developer, or any
successor in interest, upon the basis of race, color, religion,
sex, or national origin or disability in the lease, use or
occupancy thereof. Developer will comply with all applicable
federal, state and local laws, in effect from time to time,
prohibiting discrimination or segregation by reason of race, color,
religion, sex, or national origin or disability in the lease or
occupancy of the City Property.
(c) Minority Procurement Compliance. Developer acknowledges
that it has been furnished a copy of Ordinance No. 10062, the
Minority Procurement Ordinance of the City of Miami, and agrees to
comply with all applicable substantive and procedural provisions
therein, including any amendments thereto.
(d) Approval of Leases. All leases of retail space within
the Improvements are subject to prior written approval of the City
Manager, which approval shall not be unreasonably withheld or
delayed. It shall be considered unreasonable for the City Manager
to disapprove any retail lease which utilizes the Standard Approved
Retail Lease Form, as hereinafter defined, has a rental rate in
excess of Fifty Dollars.($50.00) per square foot. No Housing Unit
shall be rented other than pursuant to an executed residential
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lease, utilizing the Standard Approved Residential Lease Form, as
hereinafter defined, for a term of less than seven (7) months for
said Housing Unit.
(i) Standard Approved Retail Lease Form shall mean the
form attached hereto as Exhibit H, or such other form as shall be
mutually agreed upon by the parties.
(ii) Standard Approved Residential Lease Form shall mean
the form attached hereto as Exhibit I, or such other form as shall
be mutually agreed upon by the parties.
(e) Assignment of Existing Tenants' Leases. As of the
Possession Date, the City shall assign to Developer all tenant
leases, and Developer shall assume all rights and obligations
related thereto. Developer shall make a good faith attempt to re-
negotiate leases with the existing tenants at the City Property.
(f) Existing Historic Artifacts. The City retains all rights
of ownership to materials of a historic nature, including but not
limited to doors, light fixtures, and the like; unless such
materials are agreed to be incorporated into the Project under the
terms of the Secretary of the Interior's Standards for
Rehabilitation.
Section 3.3 Easements and Areas Reserved to City:
(a) Easements and Use Rights Granted to City. Developer
grants to City, at no cost to City, the following easements and use
rights, as depicted on Exhibit D attached hereto and made a part
hereof.
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(i) permanent easement over and across the lobby of the
Project for access to the elevators and to the second floor of the
Project;
(ii) permanent easement over and across that portion of
the City Property required to reach the roof of the projection
booth, theater attic and the projection booth;
(iii)
use of contiguous
storage space
consisting
of
not
less than 1200
square feet in
the Project,
accessible
to
the
Theater.
(iv) use of area consisting of no less than three
thousand (3,000) square feet as presently located on the sixth
floor of the Project, at no cost to the City, for use by City,
until such time as the construction of the Development requires
said area to be vacated, in accordance with the Construction
Schedule.
(b) The Developer shall deliver permanent access easements
and use agreements for the areas described in subparagraphs (i),
(ii), (iii) and (iv) above, in form and substance as to space and
means satisfactory to the City.
(c) Confirmatory Instruments. Each party covenants and
agrees that, from time to time, at the request of the other party,
it shall execute and deliver such additional documents or
instruments confirming the rights and easements granted and
reserved in this Section 3.3, or more precisely fixing their
location as such requesting party shall deem to be necessary or
desirable.
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Section 3.4 Warranty as to Title or Condition of City
Property.
The City represents and warrants that, subject only to the
Permitted Exceptions, it has fee simple title to the City Property
and to the improvements thereon. The City does not represent or
warrant that it has marketable or merchantable title. In the event
City does not possess fee simple title to the extent described in
this Section 3.4, the extent of the City's liability is limited to
a maximum of Thirty-five Thousand Dollars ($35,000). Developer
takes the City Property "AS IS", and no representations or
warranties whatsoever are made as to the condition of the Project
and the Improvements, nor any materials or other components
thereof.
Section 3.5 Rental:
(a) Initial Payment. The Developer hereby agrees to pay to
the City the non-refundable sum of Eighteen Thousand Dollars
($18,000) on the Effective Date of this Lease, (the "Initial
Payment"). The Initial Payment represents costs of preparation of
the Request for Proposals (the "R.F.P") for the Project and other
associated expenses payable by the Developer pursuant to the R.F.P.
(b) Second Payment. The Developer hereby agrees to pay to
the City the non-refundable sum of Three Hundred Thousand Dollars
($300,000) on the Possession Date.
(c) Third Payment. In the event the first Temporary
Certificate of Occupancy (the "T.C.O.") has not been obtained by
Developer from City by a date no later than fifteen (15) months
from the Possession Date,.Developer shall pay an extension fee to
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the City in the amount of Ten'Thousand Four Hundred Seventeen
Dollars ($10,417) per month, if the Developer is required to pay
and pays ad valorem taxes on the Project or, Twelve Thousand Five
Hundred Dollars ($12,500) per month, if the Developer is not
required to pay ad valorem property taxes on the Project (the
"Extension Fee"). The Extension Fee shall be payable at the
beginning of each month until the T.C.O. is issued.
The Extension Fee paid by the Developer pursuant to this
Section 3.5(c) shall not be applied as a credit against Rental
payments due and payable.
(d) Rental:
(1) If the Developer is required to pay and pays ad
valorem taxes on the Project, then, for that period of time for
which ad valorem taxes are actually paid, Rental for each Rental
Year shall be the greater of: (a) twenty-five percent (25%) of the
Gross Revenue of the Project for each Rental Year, or; (b) for
Rental Years one through four, Rental for each year shall be One
Hundred Twenty-five Thousand Dollars ($125,000), and for Rental
Years five through forty, Rental for each Rental Year shall be
Twenty-five Thousand Dollars ($25,000);
(2) If the Developer is NOT required to pay ad valorem
taxes on the Project, then, Rental for each Rental Year shall be
the greater of: (a) thirty-two percent (32%) of the Gross Revenue
of the Project for each Rental Year, or; (b) for Rental Years one
through four, Rental for each year shall be One Hundred -Fifty
Thousand Dollars ($150,000), and for Rental Years five through
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4,1
forty, Rental for each Rental Year shall be Fifty Thousand Dollars
($50,000).
In the event the T.C.O. is issued on any day other than the
first day of a calendar year, the Rental due for the period
commencing on the day following the issuance of the T.C.O. through
December 3;, of the same year shall be payable on a prorated basis
based upon the Rental rate applicable to the first four Rental
Years. Accordingly, the Rental due for the period commencing on
January 1 of that year that occurs three years following the
issuance of the T.C.O. and ending on the exact date of the four-
year anniversary of the issuance of the T.C.O., shall also be
prorated and payable at the Rental rate applicable to the first
four Rental Years. Thereafter, all Rental shall be payable at the
Rental rate applicable to Rental Years five through forty.
The parties agree that the Developer's obligation to pay the
percentage rent referenced in (d)(1)(a) and (d)(2)(a) above shall
be deferred for any period in which there is insufficient cash flow
from operation of the City Property for the applicable period (the
"Cash Flow") to meet such obligation, but such obligation shall
accrue from the date said payment was due and payable and be
payable, with interest at the Default Rate, from the Cash Flow from
future periods if, and when, available. It is understood that all
Cash Flow for the applicable period would be paid to the City to
reduce the obligation which shall accrue. In no event shall any
Rental payment due hereunder be deferred for a period beyond the
True -up Payment Date, described in 3.5(1) below.
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Cash Flow shall mean the difference between Gross Revenues and
necessary expenses, which expenses shall include all debt service,
Rental paid pursuant to Section 3.5(d)(1)(b) or 3.5(d)(2)(b),
utilities, taxes, cost of maintaining, insuring and managing the
Improvements and employee payroll (the "Necessary Expenses"). It
is agreed that, for so long as Cornerstone Olympia, Ltd. is
managing the Improvements, the Management Fee shall not be
considered part of the Necessary Expenses.
(e) Rental Payments. Payment of Rental under Section (d)(1)
or (d)(2) above shall be due and payable on a quarterly basis
within sixty ( 60 ) days after the end of each quarter without notice
or demand therefor and shall be paid to the G & 0 Enterprise Fund"
of the City at the office of the Executive Director of the Miami
Parking System, 190 NE Third Street, Miami, Florida 33132, or at
such other place as the City Manager shall designate from time to
time in a notice given pursuant to the provisions of Section 13.7.
Any late payment shall automatically accrue interest at the rate
equal to two (2%) percent above that rate charged by the Citibank,
N.A., of New York to its best commercial customers, generally
referred to as its prime rate ("Default Rate") from the date that
payment was due. If there is an underpayment of Rental, Developer
shall pay the City the amount of the deficiency plus the Default
Rate within thirty (30) days from the date that payment was due.
(f) Operating Expenses. Commencing on Possession Date, all
Operating Expenses incurred in connection with the City Property
shall be paid by Developer.
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(g) Payment Guarantee. On Possession Date, Developer shall
deliver to the City a payment guarantee, executed by Cornerstone
Olympia, Ltd., and Cornerstone Affordable Housing, Inc., in a form
reasonably acceptable to the City (the "Payment Guarantee"). The
Payment Guarantee shall guarantee the payment of all Rentals due
under Section 3.5(d)(1) and (2) above. The Payment Guarantee shall
be further secured by the delivery by Developer on the Possession
Date of an assignment, by the Developer, in favor of the City, in
a form reasonably acceptable to the City, of a first priority
interest in the rents from a sufficient number of the leases for
retail space at the Project, to secure the Payment Guarantee (the
"Assignment"). The City's right to recover under the Assignment
shall not arise unless the Developer fails to pay the City all
Rental required under Sections 3.5(d)(1) and (2) and, the recovery
by the City shall be limited to the total amount of such Rental due
and owing.
Upon receipt of each Rental payment for Rental Years two (2)
through four (4) of the Lease, the liability under the Assignment
shall be reduced as follows: after the second Rental Year, by One
Hundred Fifty Thousand Dollars ($150,000); after the third Rental
Year, by One Hundred Fifty Thousand Dollars ($150,000); and after
the fourth Rental Year, by One Hundred Fifty Thousand Dollars
($150,000). At the conclusion of the fourth Rental Year, the
Assignment shall terminate.
(h) Developer's Records. For the purpose of permitting
verification by the City of any amounts due on account of Rental,
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Developer will keep and preserve or cause the Acceptable Operator
to keep and preserve for at least five (5) years in Dade County,
Florida, at the address specified in Section 13.7, auditable
original or duplicate books and records for the City Property.
After five (5) days advance notice to Developer, the City, through
its City Manager or its designee, shall have the right during
business hours to inspect such books and records and to make, at
the City's expense, any examination or audit thereof which the City
may desire. If such audit shall disclose a liability for Rental in
excess of the Rental theretofore paid by Developer for the period
in question, and if Developer does not dispute said liability,
Developer shall promptly pay such Rental plus the Default Rate.
Such Default Rate to accrue from the date underpayment occurred.
If Developer disputes such liability, Developer may employ
independent auditors at Developer's cost to examine the books and
determine if there is a liability for excess Rental. If
Developer's audit discloses a liability, Developer shall promptly
pay such Rental plus the Default Rate. In the event the City's
audit that disclosed the liability for excess Rental was performed
by employees of the City and the• Developer's independent audit
discloses that there is no liability for excess Rental, the City
will pay the cost of Developer's audit. In the event the City's
audit that disclosed the liability for excess Rental was performed
by independent auditors and the Developer's independent audit
discloses that there is no liability or excess Rental, each party
shall pay the cost of its own audit and the parties shall agree
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upon a third independent auditor to determine if excess Rental is
due. The findings of the third independent auditor shall be final
and the cost of the auditor's services shall split evenly between
the parties.
Developer further covenants and agrees to deliver to the City
on a quarterly basis, commencing as of the Possession Date and
within sixty (60) days after the termination of the Lease, a
statement showing, in reasonable detail, the computation of the
Gross Revenue, Operating Expenses and, if applicable, Necessary
Expenses for the preceding calendar quarter. The quarterly
statement shall be signed and verified by the General Partner of
Developer or certified by the appropriate authorized officer of the
Acceptable Operator, stating specifically that such person has
examined the report, that such person's examination included such
tests of the books and records as such person considered necessary,
under the circumstances, and that such report presents fairly the
Rental due with respect to the preceding calendar quarter. if
Developer shall fail to deliver the foregoing statement to the City
within said period, or the City shall give written notice of its
desire to audit the quarterly statements, the City shall have the
right to either conduct an audit itself or to employ an independent
certified public accountant to examine such books and records as
may be necessary to certify the amount of the Rentals due with
respect to such calendar quarter. Developer shall promptly pay to
the City, as Additional Rental, the cost of any audit performed by
or for the City, in the event the City's audit was in lieu of a
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quarterly report by Developer or if the City audits the quarterly
report at its own initiative and demonstrates a discrepancy of more
than four (4%) percent of Rental.
(i) The True -Up Period. Developer shall provide the City
with an annual Audited Financial Statement for the Project,
certified by an independent Certified Public Accountant acceptable
to the City, within one hundred twenty (120) days after the close
of each Rental Year, which shall be subject to the audit provisions
of the previous subparagraph. In the event the Audited Financial
Statement discloses an underpayment of Rental for the applicable
Rental Year, Developer shall pay said amount due within thirty ( 30 )
days (the "True -Up Payment Date"). In the event the Audited
Financial Statement discloses that the Developer has overpaid the
Rental due for the Rental Year, said overpayment shall be credited
against the next Rental payment due. In addition, any Rental
payment accrued pursuant to Section 3.5 (d) shall be payable in full
by Developer on the True -up Payment Date.
Section 3.5 Covenants for Payment of Public Charges by
Developer.
Developer, in addition to the. Rental, covenants and agrees to
pay and discharge, before any fine, penalty, interest or cost may
be added, all real and personal property taxes levied or assessed
against the City Property and/or Improvements, all taxes on rentals
payable hereunder and under subleases, as well as sales, use,
income and all other taxes which may be imposed by a governmental
authority, public assessments, and utility and other public
charges, including but not limited to electric, water and sewer,
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rates and charges (all such taxes, public assessments utility
charges and other public charges being hereinafter referred to as
"Public Charges") levied, assessed or imposed by any public
authority against the City Property, including all Improvements
thereon, including all connection and installation charges, in the
same manner and to the same extent as if the same, together with
all Improvements thereon, were owned in fee simple by Developer;
provided that Developer's obligation to pay and discharge Public
Charges levied, assessed or imposed against or with respect to City
Property shall not commence until the Possession Date.
Notwithstanding the provisions of this Section 3.6, Developer shall
have the right to contest the amount or validity, in whole or in
part, of any Public Charges by appropriate proceedings. The City
agrees to consent to and/or formally join in any such proceedings
to the extent it may be allowed by law, if such consent and/or
joinder be required by law for the prosecution thereof. In
addition, the City shall work with Developer in pursuing all steps
which may be reasonably necessary to obtain and maintain tax exempt
status for the City Property. Developer shall pay all charges for
electricity, metered water, sewer service charges [but not for
sewer connection charges) and other fees or charges, lawfully
imposed by any public authority upon or in connection with the City
Property and the Theater, subject to the following allocation
formulae: from the Possession Date until such time as said fees and
charges are separately metered, for water and sewer: fifty percent
(50%) to Developer and fifty percent (50%) to City, and for
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electricity: fifty percent (50%) to Developer and fifty percent
(50%) to the City. The City retains all its rights to impose
special assessments or other Public Charges for all other purposes.
Developer, upon written request, shall furnish or cause to be
furnished, to the City Manager, official receipts of the
appropriate taxing authority, or other proof satisfactory to the
City Manager evidencing the payment of any Public Charges, which
were delinquent or payable with penalty thirty (30) days or more
prior to the date of such request.
Section 3.7. Security and Police Protection. Developer
shall provide all security and protection for the City Property as
may be reasonably necessary in the Developer's reasonable
discretion, after consultation with the City.
Section 3.8. Condition of City Propert On the Possession
Date the City shall deliver to the Developer possession of the City
Property. Prior to the Possession Date, the City Property shall be
maintained by the City in "AS IS" condition.
Section 3.9. Interruption of Theater Operations. If during
the Lease Term any portion of the Theater is damaged or caused to
be damaged or rendered incapable of operation as determined at the
reasonable discretion of the City by any act or omission of the
Developer, the Developer shall remedy and/or restore the Theater to
its predamaged condition as soon as possible but in no event later
than ten (10) days. If the Developer fails to remedy and/or
restore the damage within ten (10) days, then the City at its
option may cause any necessary action to be taken. The entire cost
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y
of such action(s) shall be borne by the Developer at its sole cost
and obligation.
ARTICLE IV
�. DESIGN AND CONSTRUCTION
Section 4.1 Payment and Performance Bond.
On Possession Date, Developer shall deliver to City a
Payment and Performance Bond in an amount equal to not less than
one hundred percent (100%) of the construction costs of the
Project, in a form, from a surety, and in an amount acceptable to
the City, the City Attorney and the Insurance Manager, and which
shall comply with Florida Statute 255.05, as amended (the "Payment
and Performance Bond").
Section 4.2 Construction Schedule; Preliminary and
Construction Plans.
Developer shall submit a construction schedule (the
"Construction Schedule") to the City Manager for its written
approval thirty (30) days prior to the anticipated Possession Date.
The City Manager shall review same and shall, within twenty (20)
days of receipt of the Construction Schedule, give Developer
written notice of its approval or disapproval, setting forth in
detail its reasons for any disapproval. In the event City Manager
disapproves the Construction Schedule, Developer shall submit a
revised Construction Schedule to the City Manager within twenty
(20) days of receipt of City Manager's disapproval. Failure to
submit such revised Construction Schedule within such ten (10) day
period shall constitute an Event of Developer's Default. (as
hereinafter defined within this Lease). In the event the City
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..1
Manager fails to give Developer notice of disapproval within the
ten (10) day period, the Construction Schedule shall be deemed
approved as submitted. Developer shall submit the Preliminary
Plans and Construction Plans ("the Plans") to the City Manager for
written approval on or before the time set forth for same on the
Construction Schedule. The City Manager shall have thirty (30)
days to review the Plans. In the event of a disapproval, Developer
shall, within fifteen (15) days of the date the Developer receives
the notice of such disapproval, resubmit such Plans to the City
Manager, altered to satisfy the grounds for disapproval. Any
resubmission shall be subject to review and approval by the City
Manager. In the event the City Manager fails to give Developer
notice of disapproval within the thirty (30) day period, the Plans
shall be deemed approved as submitted.
Section 4.3 Construction Plans. For the purpose of this
Lease, "Construction Plans" shall consist of final working drawings
and specifications, including (without limitation) the following
information: (a) definitive architectural drawings; (b) definitive
electrical and mechanical drawings; (c) final specifications and
shop drawings; and (d) graphics.
All design and improvements shall be made in conformance with
the Secretary of the Interior's Standards for Rehabilitation, which
govern restoration of registered historic properties.
No approval by the City Manager of any Plans pursuant to this
Article shall relieve. Developer of its obligation to submit such
Plans to any department of the City or any other governmental
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authority having jurisdiction over the issues or to obtain any
building or other permit or approval required by law.
Developer acknowledges that any approval given by the City
pursuant to this Section 4 shall not constitute an opinion or
agreement by the City that the Plans are structurally sufficient or
in compliance with any laws, codes or other applicable regulations,
and no such approval shall impose any liability on or waive any
rights of the City.
Section 4.4. Access:
(a) Prior to delivery of possession of the City
Property to Developer, the City, subject to the City Manager's
prior approval, shall permit Developer access thereto for
inspections.
( b ) The Developer shall permit the City Manager to enter
the City Property at any time for any reasonable purpose the City
deems necessary.
Section 4.5. Progress of Construction. Subsequent to
the delivery of possession of the City Property to Developer, and
until construction of the Improvements have been completed,
Developer shall keep the City Manager apprised, on a monthly basis,
of the progress of Developer with respect to such development and
construction. All such construction shall be in accordance with
the Construction Schedule.
Section 4.6 Permits and Approvals. Developer shall secure
and pay for any and all permits and approvals necessary for proper
construction and completion of the Project, and all costs and
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expenses in connection with same shall be borne by Developer.
Developer shall secure any and all permits and approvals, required
to perform any and all of the work or operations contemplated to be
done or performed under any of the provisions of this Lease,
including but not limited to, any alterations and renovations made
pursuant to Section 4.9 hereof, and shall pay all required fees and
charges in connection with the issuance of any permits and
approvals.
Section 4.7. Compliance with Law. Developer shall comply in
every respect with any and all federal, state, county and municipal
laws, ordinances, codes, rules, regulations and notices now or
hereafter in force or issued which may be applicable to any and all
of the work or operations to be done, performed, or carried on by
Developer hereunder. Nothing herein contained shall be deemed to
limit the right of Developer to contest the validity or
enforceability of any statute, law, ordinance, code, rule,
regulation, order or notice with which Developer may be required to
comply.
Section 4.8 Extension of Time Requirements. The times within
which Developer must submit the Plans, and the times within which
Developer must commence and complete the development of the City
Property and the construction of the Improvements thereon as
specified in this Section may be extended in writing by the City
Manager in its sole discretion, for such periods of time as it
deems advisable, for good and sufficient cause shown by the
Developer to the satisfaction of the City Manager.
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Section 4.9 Alterations and Renovations. After the
completion of construction of the Improvements, Developer from time
to time may make such alterations or renovations thereof as it
shall deem desirable subject to the prior written approval of the
City Manager, which approval shall not be unreasonably withheld or
delayed; provided, however, that no renovation or alteration which
affects the exterior appearance of the Project or substantially
affects the overall character and appearance of any public
circulation area shall be made until such time as the City Manager
shall have approved, in writing, definitive construction plans and
specifications therefor. Developer must secure and pay for any and
all permits and approvals required to perform any of the
contemplated alterations or renovations.
ARTICLE V
LAND USES
Section 5.1 Uses. Developer and the City agree, for
themselves and their successors and assigns, to devote the City
Property exclusively to the uses specified in the Lease and to be
bound by and comply with all of the provisions and conditions of
this Lease.
ARTICLE V1 '
TRANSFER ASSIGNMENT
Section 6.1. Definitions. As used herein, the term:
(a) "Transfer" means:
(i) any total or partial sale, assignment or conveyance
( other than by a Leasehold Mortgagee) or any trust or power, or any
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transfer in any other mode or form of or with respect to this Lease
or of the leasehold estate in the City Property or any part thereof
or any interest therein, or any contract or agreement to do any of
the same;
(ii) any merger, consolidation or sale or lease of all
or substantially all of the assets of Developer or of any Owner.
(b) "Owner" means:
(i) any person, firm, corporation or other entity which
owns, directly or indirectly, legally or beneficially, fifty
percent (50%) or more interest in the limited partnership which is
one of the two General Partners of Developer or more than fifty
percent (50%) of the stock of the corporation that is the other
General Partner of Developer.
Section 6.2 Purposes of Restrictions on Transfer. This Lease
is granted to Developer solely for the purpose of Development of
the City Property and its subsequent use in accordance with the
terms hereof, and not for speculation or landholding. Developer
recognizes that, in view of:
(a) the importance of the Development of the City Property to
the general welfare of the community;
(b) the fact that a transfer of a substantial interest in the
General Partner of Developer, or any other act or transaction
involving or resulting in a significant change in the ownership of
such interest with respect to the identity of the parties in
control of Developer or the degree thereof, is for practical
purposes, a transfer or disposition of the leasehold interest in
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the City Property then owned by Developer, and that the
qualifications and identity of Developer and any owner are of
particular concern to the community and the City. Developer
further recognizes that it is because of such qualifications and
identity that the City is entering into this Lease with Developer,
and, in so doing, is further willing to accept and rely on the
obligations of Developer for the faithful performance of all
undertakings and covenants by it to be performed.
(c) The City recognizes that Developer intends to sell
limited partnership interests, carrying low income tax credit
benefits, in the Florida limited partnership that is the Developer
hereunder. The limited partnership interests that will be sold
will consist of ninety-nine percent (99%) of the total financial
interest in the Developer.
Section 6.3 Transfers. Developer, on behalf of itself and
all owners, represents and warrants that neither Developer nor any
Owner has made, created or suffered any Transfers. Except as
permitted pursuant to subparagraphs (a) and (b) hereof, no Transfer
may be made, suffered or created by Developer or any Owner. The
following Transfers shall be permitted hereunder:
(a) Any Transfer directly resulting from the foreclosure of
a Leasehold Mortgage or the granting of a deed in lieu of
foreclosure of a Leasehold Mortgage or any Transfer made by the
purchaser at foreclosure of a Leasehold Mortgage or by the grantee
of a deed in lieu of foreclosure of a Leasehold Mortgage, provided
that such purchaser or grantee is an Institutional Investor or an
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agent, designee or nominee of an Institutional Investor which is
wholly owned or controlled by an Institutional Investor, and that
such purchaser or grantee, within six (6) months after taking
possession of the Project, shall have entered into an Acceptable
Operator's Agreement, as described in Section 7.1(c)(iv) of this
Lease, subject to the right of first refusal of the City to cure
the foreclosure as set forth in Section 7.1(c).
(b) Any Transfer to a purchaser having a good reputation and
financial resources to own the leasehold interest and to operate
and manage the Project in the reasonable opinion of the City
Commission that shall have entered into an Acceptable Operator's
Agreement (an "Acceptable Purchaser").
Any consent to a Transfer shall not waive any of the City's
rights to consent to a subsequent Transfer. Any Transfer made in
violation of the terms hereof shall be null and void and of no
force and effect.
Section 6.4 Notice of Transfer; Information as to Holders
of Partnership Interest:
(a) With respect to any Transfer which must be approved by
the City, Developer shall give to the City written notice
(including all information necessary for the City to make an
evaluation of the proposed Transfer according to the requirements
of this Lease) of any requested Transfer, not less than ninety (90)
days prior to the date of the proposed Transfer and the City
Commission shall, after a public hearing by the City Commission,
advise Developer if it shall consent to same. If the City is not
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required to consent to a Transfer pursuant to the terms hereof,
Developer shall notify the City in writing of same within thirty
(30) days after the date of Transfer.
(b) Developer shall from time to time throughout the term of
this Lease as the City shall reasonably request, furnish the City
with a complete statement, subscribed and sworn to by the General
Partner of Developer, setting forth the full names and addresses of
holders of partnership interests in Developer, and the extent of
their holdings, and in the event any other parties have a
beneficial interest in such interests, their full names and
addresses and the extent of such interest as determined or
indicated by the records of Developer, by inquiry which such
officers shall make of all parties who on the basis of such records
own ten (10%) percent or more of the ownership interest of
Developer or by such other knowledge or information as such general
partner shall have.
Section 6.5 Effectuation of Certain Permitted Transfers.
There shall be no Transfer other than that described in
Section 6.3(a) of this Lease without prior approval by the City
Commission after a public hearing. No Transfer of the nature
described in Subsection (b) of Section 6.3 of this Lease shall be
effective unless and until the entity to which such Transfer is
made, by instrument in writing satisfactory to the City Manager and
in recordable form shall expressly assume all of the obligations of
Developer under this Lease and agree to be subject to all
conditions and restrictions to which Developer is subject;
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provided, however, that any Leasehold Mortgage transferee shall not
be required to assume any personal liability under this Lease with
respect to any matter arising prior or subsequent to the period of
such transferee's actual ownership of the leasehold estate created
by this Lease (it being understood, nevertheless, that the absence
of any such liability for such matters shall not .impair, impede or
prejudice any other right or remedy available to the City for
default by Developer); and provided, further, that the fact that
any such transferee of, or any other successor in interest
whatsoever to, the leasehold estate in the City Property or the
Improvements, or any part thereof, shall not assume such
obligations or so agree, shall not (unless and only to the extent
otherwise specifically provided in this Lease or agreed to in
writing by the City) relieve or exempt such transferee of or from
such obligations, conditions or restrictions, or deprive or limit
the City of or with respect to any rights, remedies or controls
with respect to the leasehold estate in the City Property or the
construction of the Improvements.
ARTICLE VII
MORTGAGEE FINANCING; RIGHTS OF MORTGAGEE
Section 7.1 Leasehold Mortgage:
(a) Notwithstanding the provisions set forth in Article VI
hereof regarding any assignment of this Lease, but subject to the
provisions of this Article VII, provided that an Event of Default
has not occurred and.is.not continuing, Developer shall have the
right at any time and from time to time to encumber the leasehold
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11\
estate created by this Lease and any Improvements by a Leasehold
Mortgage, as defined below including, without limitation, an
assignment of the rents, subject to the City's share of the Rental
as set forth in Section 3.5 of this Lease, and profits from the
City Property and Improvements to secure repayment of a loan or
loans made to Developer by an Institutional Investor (as defined
below) for the sole purpose of securing the financing of the
construction of any Improvements made pursuant to the terms of this
Lease or for the long-term financing or refinancing of any such
Improvements. In no event may the amount of such financing or
refinancing exceed Development Costs. Developer shall deliver to
City, promptly after execution by Developer a true and verified
copy of any Leasehold Mortgage, and any amendment, modification or
extension thereof, together with the name and address of the owner
and holder thereof.
(b) For purposes of this Article VII: "Institutional
Investor" shall mean any national bank organized under the laws of
the United States or any commercial bank, or any savings and loan
association, savings bank, trust company or insurance company
organized under the laws of the United States or any state of the
United States, or any pension, retirement or welfare trust or fund
supervised by a government authority of any state or the United
States or any such trust or fund administered by an entity which is
supervised by a governmental authority or any municipality or any
agency, board or department of the Federal, State, County or City
government; "Leasehold Mortgage" shall mean a mortgage, deed of
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trust or assignment of the rents, issues and profits from the
Leased Property and Improvements, which constitutes a lien on the
leasehold estate created by this Lease and on the fee interest of
Developer in any Improvements during the term of this Lease; and
"Lender" shall mean an Institutional Investor who is the owner and
holder of a Leasehold Mortgage; provided, however, that the City
shall have no duty or obligation to determine independently the
relative priorities of any Leasehold Mortgages, but shall be
entitled to rely absolutely upon a preliminary title report current
as of the time of any determination of the priorities of such
Leasehold Mortgage and prepared by a generally -recognized title
insurance company doing business in Miami, Florida.
(c) During the continuance of any Leasehold Mortgage until
such time as the lien of any Leasehold Mortgage has been
extinguished, and if a true and verified copy of such Leasehold
Mortgage shall have been delivered to the City Manager together
with a written notice of the name and address of the owner and
holder thereof as provided in Section 7.1(a) above:
(i) and (ii) intentionally omitted.
(iii) Subject to the provisions of Subparagraph (iv)
immediately below, the Department of Off -Street Parking, a semi-
autonomous agency of the City (the "Miami Parking System") shall
have the right, but not the obligation, at any time prior to
termination of this Lease and without payment of any penalty, to
pay all of the rents due hereunder, to provide any insurance, to
pay any taxes and make any other payments, to make any repairs and
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improvements, to continue to construct and complete the
Improvements, and do any other act or thing required of Developer
hereunder, and to do any act or thing which may be necessary and
proper to be done in the performance and observance of the
covenants, conditions and agreements hereof to prevent the
terminating of this Lease. All payments so made and all things so
done and performed by Miami Parking System shall be as effective to
prevent a termination of this Lease as the same would have been if
made, done and performed by Developer instead of by Miami Parking
System.
( iv) Should any Event of Default under this Lease occur,
Miami Parking System shall have the first right of refusal prior to
any right of Lender pursuant to subparagraphs (v) and (vi) of this
Section, said right to be exercised within thirty (30) days from
receipt of notice from the City Manager, setting forth the nature
of such Event of Default by written notice delivered to the City
Manager pursuant to the Notice provision set forth in Section 13.4
of this Lease, to remedy said Event of Default, and, if the Event
of Default is such that possession of the City Property and
Improvements may be reasonably necessary to remedy the Event of
Default, Miami Parking System shall, within such thirty (30) day
period, commence and diligently prosecute a foreclosure action or
such other proceeding as may be necessary to enable Miami Parking
System to obtain such possession, and to continue to manage the
Project with the same rights and obligations as if it were the
Developer provided that: (a) Miami Parking System on behalf of the
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City shall have fully cured any Event of Default in the payment of
any monetary obligations of Developer under this Lease within such
thirty (30) day or longer period and shall continue to pay
currently such monetary obligations as and when the same are due;
(b) Miami Parking System shall, within six (6) months of the date
that it takes possession of the City Property, enter into an
agreement on terms and conditions reasonably acceptable to the City
with an Acceptable Operator for the continued operation of the City
Property and Improvements (hereinafter called "Acceptable
• Operator's Agreement"); and (c) Miami Parking System shall have
acquired Developer's leasehold estate created hereby or commenced
foreclosure or other appropriate proceedings in the nature thereof
within such sixty (60) day period or prior thereto, and shall be
diligently and continuously prosecuting any such proceedings to
completion. All rights of the City Manager to terminate this Lease
as the result of the occurrence of any such Event of Default shall
be subject to and conditioned upon the City Manager having first
given Miami Parking System written notice of such Event of Default
and Miami Parking System having failed to exercise its right of
first refusal to remedy such Event of Default or acquire
Developer's leasehold estate created hereby or commence foreclosure
or other appropriate proceedings in the nature thereof as set forth
in and within the time period specified by this Subparagraph (iv).
In the event the Miami Parking System fails to exercise its right
to cure the Event of . Default, then City shall notify Lender and
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Lender may exercise its rights under Subparagraphs (v) and (vi) of
this Section.
(v) Subject to the provisions of Subparagraph (vi)
immediately below, Lender shall have the right, but not the
obligation, at any time prior to termination of this Lease and
without payment of any penalty, to pay all of the rents due
hereunder, to provide any insurance, to pay any taxes and make any
other payments, to make any repairs and improvements, to continue
to construct and complete the Improvements, and do any other act or
thing required of Developer hereunder, and to do any act or thing
which may be necessary and proper to be done in the performance and
observance of the covenants, conditions and agreements hereof to
prevent the terminating of this Lease. All payments so made and
all things so done and performed by Lender shall be as effective to
prevent a termination of this Lease as the same would have been if
made, done and performed by Developer instead of by Lender.
(vi) Should any Event of Default under this Lease occur,
Lender shall have sixty (60) days after receipt of notice from the
City Manager, setting forth the nature of such Event of Default, to
remedy same, and, if the Event of Default is such that possession
of the Leased Property and Improvements may be reasonably necessary
to remedy the Event of Default, Lender shall, within such sixty
(60) day period, commence and diligently prosecute a foreclosure
action or such other proceeding as may be necessary to enable
Lender to obtain such possession, provided that: (a) Lender shall
have fully cured any Event of Default in the payment of any
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..........
monetary obligations of Developer under this Lease within such
sixty ( 60 ) day or longer period and shall continue to pay currently
such monetary obligations as and when the same are due; (b) Lender
shall within six ( 6 ) months of the date that it takes possession of
the Leased Property enter into an "Acceptable Operator's Agreement"
and (c) Lender shall have acquired Developer's leasehold estate
created hereby or commenced foreclosure or other appropriate
proceedings in the nature thereof within such sixty (60) day period
or prior thereto, and shall be diligently and continuously
prosecuting any such proceedings to completion. All rights of the
City Manager to terminate this Lease as the result of the
j occurrence of any such Event of Default shall be subject to and
conditioned upon the City Manager having first given Lender written
notice of such Event of Default and Lender having failed to remedy
such default or acquire Developer's leasehold estate created hereby
I
or commence foreclosure or other appropriate proceedings in the
nature thereof as set forth in and within the time period specified
by this Subparagraph (vi).
(vii) An Event of Default under this Lease which in the
nature thereof cannot be remedied by Lender shall be deemed to be
remedied if (a) within sixty (60) days after receiving written
notice from the City Manager setting forth the nature of such Event
of Default, Lender shall have acquired Developer's leasehold estate
created hereby or commenced foreclosure or other appropriate
proceedings in the nature thereof; (b) Lender shall diligently and
continuously prosecute any such proceedings to completion; (c)
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Lender shall have fully cured any Event of Default in the payment
of any monetary obligations of Developer under this Lease which do
not require possession of the City Property and Improvements within
such sixty (60) day period and shall thereafter continue to
faithfully perform all such monetary obligations which do not
require possession of the Project; and (d) within six (6) months
after Lender shall have gained possession of the City Property and
Improvements, Lender shall have entered into an Acceptable
Operator's Agreement. Upon the taking of possession of the Leased
Property and Improvements by Lender, Lender shall perform all of
the obligations of the Developer hereunder as and when the same are
due. Any assignee or successor in interest to a Lender that has
taken possession of the City Property must, however, assume all of
Developer's obligations hereunder, including, but not limited to,
the construction obligation.
(viii) If the Lender is prohibited by any process or
injunction issued by any court or by reason of any action by any
court having jurisdiction of any bankruptcy, debtor rehabilitation
or insolvency proceedings involving Developer from commencing or
prosecuting foreclosure or other appropriate proceedings in the
nature thereof, then the times specified in Subparagraphs (vi) and
(vii) above for commencing or prosecuting such foreclosure or other
proceedings shall be extended for the period of such prohibition;
provided that Lender shall have fully cured any default in the
payment of any monetary obligations of Developer under this Lease
and shall continue to pay currently such monetary obligations as
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and when the same fall due, and provided that Lender shall
diligently attempt to remove any such prohibition.
(ix) Intentionally omitted.
(x) Foreclosure of a Leasehold Mortgage or any sale
thereunder, whether by judicial proceedings or by virtue of any
power of sale contained in the Leasehold Mortgage, or any
conveyance of the leasehold estate created hereby from Developer to
Lender by virtue or in lieu of the foreclosure or other appropriate
proceedings in the nature thereof, shall not require the consent of
the City or constitute a breach of any provision of or a default
under this Lease. Upon such foreclosure, sale or conveyance, the
City shall recognize Lender, or any other foreclosure sale
purchaser, as tenant hereunder, except that all obligations on
Developer herein contained shall be binding on the Lender only from
and after the date that it shall take title to the Developer's
leasehold estate unless otherwise in this Article VII provided;
provided, that Lender or any such foreclosure sale purchaser must
enter into an Acceptable Operator's Agreement, within four (4)
months of the date of such foreclosure, sale or conveyance, and
further, provided, that in the event there are two or more
Leasehold Mortgages or foreclosure sale purchasers (whether the
same or dif ferent Leasehold Mortgages) , the City shall have no duty
or obligation whatsoever to determine the relative priorities of
such Leasehold Mortgages or the rights of the different holders
thereof and/or foreclosure sale purchasers. In the event Lender
subsequently assigns or transfers its interest under this Lease
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after acquiring the same by foreclosure or by an acceptance of a
deed in lieu of foreclosure or subsequently assigns or transfers
its interest under any such new lease, and in connection with any
such assignment or transfer Lender takes back a mortgage
encumbering such leasehold interest to secure a portion of the
purchase price of the leasehold interest as contemplated under this
Section 7.1, Lender shall be entitled to receive the benefit of
this Article VII and any other provisions of this Lease intended
for the benefit of the holder of a Leasehold Mortgage. Any person
or entity to whom this Lease or any such new lease is assigned must
either enter into or assume Lender's obligations under an
Acceptable Operator's Agreement.
Section 7.2 No Waiver of Developer's Obligations or Citv's
Rights. Nothing contained herein or in any Leasehold Mortgage
shall be deemed or construed to relieve Developer from the full and
faithful observance and performance of its covenants, conditions
and agreements contained herein, or from any liability for the non-
observance or non-performance thereof, or to require or provide for
the subordination to the lien of such Leasehold Mortgage of any
estate, right, title or interest of the City in or to the
Improvements or this Lease.
ARTICLE VIII
REMEDIES
Section 8.1 Events of Default - Developer. The following
events are hereby defined as "Events of Developer's Default":
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(a) Failure - Payment of Money. Failure of Developer to pay
any Rental, Additional Rental or Public Charges or any other
payments of money as herein provided or required, when due and the
continuance of such failure for a period of ten (10) days after
notice thereof in writing.
In the event that any payment or installment of Rental is not
paid to the City on the date the same becomes due and payable,
Developer covenants and agrees to pay to the City interest on the
amount thereof from the date such payment or installment became due
• and payable to the date of payment thereof, at the Default Rate.
All other payments of money required to be paid to the City by the
Developer under this Lease, including interest, penalties and
contributions, shall be treated as Additional Rental.
(b) Failure - Performance of Other Covenants, Etc. Failure
of Developer to perform any of the other covenants, conditions and
agreements in this Lease and the continuance of such failure or
default for a period of sixty ( 60 ) days after notice thereof in
writing from the City to Developer (which notice shall specify the
respects in which the City contends that Developer has failed to
perform any such covenants, conditions and agreements), unless such
default was not caused or created by the Developer and cannot be
cured within sixty (60) days and the Developer within said sixty
(60) day period shall have commenced and thereafter shall have
continued diligently to prosecute all actions necessary to cure
such default, said failure shall constitute an Event of Developer's
Default.
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(c) Failure - Bankruptcy, Etc. The following, if not
remedied by Developer within sixty (60) days of the institution or
happening thereof, shall constitute an Event of Developer's
Default:
(i) if an order of relief shall be entered upon any
petition filed by or against Developer, as debtor, seeking relief
(or instituting a case) under Chapters 7, 9, 11 or 13 of the
Bankruptcy Code, 11 U.S.C. (Sec. 10, et seq.), or any successor
thereto; or
(ii) if Developer admits its inability to pay its debts,
or if a receiver, trustee or other court appointee is appointed for
all or a substantial part of Developer's property; or
(iii) if the leasehold interest of Developer is levied
upon or attached by process of law; or
(iv) if Developer makes an assignment for the benefit of
creditors or takes the benefit of any insolvency act, or if any
proceedings are filed by or against Developer to declare Developer
insolvent or unable to meet its debts; or
(v) if a receiver or similar type of appointment or is
made for court appointee or nominee of any name or character is
made for Developer or its property; or
(vi) if Developer shall abandon the City Property during
the term of this Lease or any renewals or extensions thereof; or
(vii) if Developer shall assign this Lease or sublet any
portion of the City Property, except as permitted herein.
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l
Section 8.2 Remedies for Developer's Default. If any of the
Events of Developer's Default shall occur, the City may, at its
option, institute such proceedings as in its opinion are necessary
to cure such defaults to compensate the City for damages resulting
from such defaults, including but not limited to the right to give
to the Developer a notice of termination of this Lease. If such
notice is given, the term of this Lease shall terminate, upon the
date specified in such notice from the City to Developer, as fully
and completely as if that date were the date herein originally
fixed for the expiration of the term of this Lease, and on the date
so specified, Developer shall then quit and surrender the City
Property to the City in accordance with Section 12.4 of this Lease.
Upon the termination of this Lease, as provided in this Section
8.2, all rights and interest of the Developer in and to the Leased
Property and every part thereof shall cease and terminate and the
City may, in addition to any other rights and remedies it may have,
retain all sums paid to it by the Developer under this Lease. In
addition to the rights set forth above, the City shall have the
right to pursue any or all of the following:
(a) the right to injunction or other similar relief,
available to it under Florida law against the Developer.
(b) the right to maintain any and all actions at law or
suits in equity or other proper proceedings to obtain damages
resulting from such default.
Section 8.3 Events of Default - City.
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(a) Events of Default. The failure of the City to perform
any of the covenants, conditions and agreements of this Lease which
are to be performed by the City and the continuance of such failure
for a period of ninety (90) days after notice thereof in writing
from Developer to the City (which notice shall specify the respects
in which Developer contends that the City has failed to perform any
of such covenants, conditions and agreements) and unless such
default be one which cannot be cured within ninety (90) days and
the City within such ninety (90) day period shall have commenced
and thereafter shall continue diligently to prosecute all actions
necessary to cure such defaults, such failure shall constitute an
"Event of the City's Default".
(b) Remedies for City's Default. If an Event of the City's
Default shall occur, Developer, to the fullest extent permitted by
law, shall have the right to pursue any or all of the following
remedies:
(i) the right to a writ of mandamus, injunction or other
similar relief, available to it under Florida law against the City;
(ii) the right to maintain any and all actions. at law
or suits in equity or other proper proceedings to obtain damages
resulting from such default.
Section 8.4 Unavoidable Delay. For the purpose of any of the
provisions of this Lease, neither the City nor Developer, as the
case may be, nor any successor in interest, shall be considered in
breach of or in default in any of its obligations, including but
not limited to the preparation of the City Property for
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Development, or the beginning and completion of construction of the
Improvements, or progress in respect thereto, in the event of
unavoidable delay in the performance of such obligations due to
strikes, lockouts, acts of God, inability to obtain labor or
materials due to governmental restriction, inability to obtain
approvals or permits due to moratoriums or other similar actions of
government, enemy action, civil commotion, fire, or other similar
causes beyond the reasonable control of a party (not including such
party's insolvency or financial condition), it being the purpose
and intent of this paragraph that in the event of the occurrence of
any such unavoidable delays the time or times for the performance
of the covenants, provisions and agreements of this Lease,
including but not limited to the obligations of the Developer with
respect to construction of the Improvements, shall be extended for
a period of unavoidable delay; provided, however, that the party
seeking the benefit of the provisions of this Section shall, within
thirty (30) days after such party shall have become aware of such
unavoidable delay, give notice to the other party thereof in
writing of the cause or causes thereof and the time delayed. In no
event shall the period of unavoidable delay exceed a maximum of
sixty (60) days. This provision does not apply to extensions or
deferrals permitted pursuant to Section 3.1(c), Section 3.5(c) or
Section 3.5(d). This section shall not apply to the payment of
Rental required pursuant to Section 3.5.
Section 8.5 Obligations, Rights and Remedies Cumulative.
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The rights and remedies of the parties to this Lease, whether
provided by law or by this Lease, shall be cumulative, and the
exercise by either party of any one or more of such remedies shall
not preclude the exercise by it, at the same or different times, of
any other such remedies for the same default or breach or of any of
its remedies for any other default or breach by the other party.
No waiver made by either party with respect to performance, or
manner or time thereof, of any obligation of the other party or any
condition to its own obligation under this Lease shall be
considered a waiver of any rights of the party making the waiver
with respect to the particular obligations of the other party or
condition to its own obligation beyond those expressly waived and
to the extent thereof, or a waiver in any respect in regard to any
other rights of the party making the waiver or in regard to any
obligation of the other party.
ARTICLE IX
PROTECTION AGAINST MECHANICS'
LIENS AND OTHER CLAIMS; INDEMNIFICATION
Section 9.1 Mechanics' Liens and Payments of Obligations
(a) Developer to Discharge Mechanics' Liens. Developer shall
not be given possession of the City Property or authorized to begin
construction thereon prior to the recording of this Lease and prior
to Possession Date so as not to subject the City's interest to
mechanics' liens. If any such mechanics, liens shall at any time
be filed against the City Property, Developer shall promptly take
and diligently prosecute appropriate action have the same
discharged or to contest in good faith the amount or validity
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thereof, and if unsuccessful in such contest, to have the same
discharged. Upon Developer's failure so to do, the City, in
addition to any other right or remedy that it may have, may take
such action as may be reasonably necessary to protect its interest,
and Developer shall pay any amount paid by the City in connection
with such action, and all reasonable legal and other costs and
expenses incurred by the City in connection therewith (including
reasonable counsel fees, court costs and other necessary
disbursements). Any such amounts paid by the City and the amount
of any such expenses or costs incurred by the City, if not paid by
the Developer to the City within thirty (30) days after the date
Developer receives written notice from the City of the amount
thereof and demand for payment of the same, shall, together with
interest thereon at the Default Rate from the date of the receipt
by Developer of the aforesaid written notice and demand to the date
of payment thereof by Developer, be treated as Additional•Rental,
and shall be payable by Developer to the City not later than the
next monthly installment of the Rental becoming due.
(b) Payment of Materialmen and Suppliers. Developer shall
make, or cause to be made, prompt payment of all money due and
legally owing to all persons doing any work or to subcontractors in
connection with the development, construction, equipment, repair or
reconstruction of any of the Improvements required by this Lease.
Nothing in this Subparagraph (b) shall limit the right of Developer
to contest, in good faith, by legal proceedings or otherwise,
whether any amount claimed or alleged to be due and owing to any
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such person is legally due and owing and to withhold payment of
such amounts pending resolution of such dispute.
Section 9.2 Indemnity. Notwithstanding any policy or
policies of insurance required of Developer, Developer shall
indemnify, save harmless and defend the City and any and all of its
agents and employees, from or in connection with, claims and
demands of whatever nature, including allegations of negligence,
gross negligence, willful or intentional misconduct, violations of
civil rights, etc., arising out of the use or occupancy of the City
Property by Developer, its agents, servants, employees or
contractors. Developer shall defend any and all such actions,
claims, demands or suits on behalf of the City at Developer's sole
cost and expense.
ARTICLE X
INSURANCE
Section 10.1 Insurance Coverage. Beginning on the Possession
Date and during the term of this Lease, Developer at its sole cost
and expense shall maintain or cause to be maintained:
(a) Property Insurance. Insurance on the Improvements and
the City Property against All Risks of physical loss or damage;
including the expense of the removal of debris of such property as
a result of damage by an insured peril. Coverage shall be written
on a replacement cost basis. If the policy or policies of
insurance contain a co-insurance requirement, the policy or
policies shall contain an agreed amount endorsement. During the
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construction period, property insurance may be provided on a
Completed Value Builder's Risk form. The City and Developer shall
be designated as named insureds on such Builder's Risk Policy. The
term "Improvements", as used in this paragraph, shall include,
without limitation, all personal property, machinery, fixtures and
j equipment furnished or installed on the premises and owned by the
Developer, and the insurance herein provided shall cover the same.
The adequacy of all insurance coverage may be reviewed
i
periodically by the City Manager at his discretion. Any review by
the City Manager shall not constitute an approval or acceptance of
the amount of insurance coverage. In the event that insurance
proceeds are inadequate to rebuild and restore the damaged
Improvements and City Property to substantially their previous
condition before an insurable loss occurred, and the cause of the
deficiency in insurance proceeds is the failure of the Developer to
adequately insure the Improvements and the City Property as
required by this Lease, Developer must nevertheless rebuild and
restore such Improvements and the City Property pursuant to the
terms hereof and must pay the entire cost of same, notwithstanding
the fact that such insurance proceeds are inadequate.
(b) Business Interruption Insurance. Business interruption
insurance, so that Developer will be insured against loss of
business income occasioned by any of the insured against perils
included in the Property Insurance policy during the period
required to rebuild, repair or replace the property damaged, which
policy or policies of insurance shall expressly provide by
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endorsement thereon that the interest of the City as lessor under
this Lease shall be covered to the extent earned, in an amount
equal to the total of the Rental payable during said period of
business interruption; such amount shall not be less than ninety-
five percent (95%) of the occupancy rate at the then prevailing
rental rates. The adequacy of the business interruption insurance
may be reviewed by the City Manager periodically. Any review by
the City Manager shall not constitute an approval or acceptance of
the amount of insurance coverage.
(c) Automobile Liability Insurance. Automobile liability
insurance and equivalent policy forms covering all owned, non --
owned, and hired vehicles, if any, used in connection with any work
arising out of this Lease. Such insurance shall afford protection
to at least a combined single limit for bodily injury and property
damage liability of $1,000,000 per occurrence. The adequacy of the
automobile liability insurance coverage may be reviewed
periodically by the City Manager. Any review by the City Manager
shall not constitute an approval or acceptance of the amount of
insurance coverage.
(d) Liability Insurance. Comprehensive general liability,
including contractual liability, or an equivalent policy form
providing liability insurance against claims for personal injury or
death or property damage, including broad form property damage,
occurring on or about the Leased Property, the Improvements, or any ,
elevator, escalator or hoist thereon. Such insurance shall afford
protection to at least a combined single limit for bodily injury
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and property damage liability of $5,000,000 per occurrence/-
$10,000,000 aggregate. The adequacy of the liability insurance
coverage shall be reviewed periodically by the City Manager. Any
review by the City Manager shall not constitute an approval or
acceptance of the amount of insurance coverage. Such liability and
property damage insurance shall also be placed in effect during the
period of permitted access provided in Section 3.3 herein.
(e) Theft Coverage covering employee fidelity, inside or
outside loss and burglary with a limit of not less than $100,000
per occurrence.
(f) Flood Insurance in an amount satisfactory to the City.
(g) Worker's Compensation. Worker's Compensation and
Employer's Liability Insurance in compliance with Florida Statute
440. For work that is subcontracted, the Developer shall require
the subcontractor to provide Worker's Compensation insurance for
all of the subcontractor's employees. The adequacy of the Workers'
Compensation and Employers Liability Insurance coverage shall be
reviewed periodically by the City Manager. Any review by the City
Manager shall not constitute an approval or acceptance of the
amount of insurance coverage.
(h) Copies. Developer shall furnish Certificates of Insurance
with the City, Miami Parking System and Gusman Center for the
Performing Arts named as additional insured for the coverages
specified hereunder, which shall clearly indicate that Developer
has obtained insurance in the type, amount and classification as
herein required. Copies of all policies of insurance and renewals
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thereof shall be furnished to the City Manager by the Developer
prior to the effective date thereof. Copies of new or renewal
policies replacing any policies expiring during the term of this
Lease shall be delivered to City Manager at least thirty (30) days
prior to the date of expiration of any policy, together with proof
satisfactory to the City that all premiums have been paid.
Section 10.2 Responsible Companies - Blanket Insurance
Permitted. All insurance provided for in this Article X shall be
effected under valid and enforceable policies issued by insurers of
recognized responsibility, which are licensed to do business in the
State of Florida. All such companies must be rated at least "A" as
to management, and at least "Class X" as to financial strength in
the latest edition of Best's Insurance Guide, published by Alfred
M. Best Co., Inc., 75 Fulton Street, New York, NY. The insurance
required by this Article may be part of another policy or policies
of the Developer in which other properties and locations are also
covered, so long as the amount of insurance available to pay losses
at this location is at least the minimum required by this Section,
and it cannot be reduced in any manner by losses occurring at other
properties or locations.
Section 10.3 Named Insureds - Notice to City of Cancellation.
All policies of insurance described herein shall name Developer and
the City and Miami Parking System and Gusman Center for the
Performing Arts as insureds as their respective interests may
appear. The policies shall also name as insured, if required by
either party or required pursuant to the terms of any Leasehold
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Mortgage, any Leasehold Mortgagee as the interest of such Leasehold
Mortgagee may appear. Notwithstanding any such inclusion, the
parties hereto agree that any losses under such policy shall be
payable, and all insurance proceeds recovered thereunder shall be
applied and disbursed in accordance with the provisions of this
Lease. All insurance policies shall provide that no material
change, cancellation or termination shall be effective until at
least thirty (30) days after receipt of written notice thereof has
been received by the City. Each policy shall contain an
endorsement to the effect that no act or omission of the Developer
shall affect the obligation of the insurer to pay the full amount
of any loss sustained.
Section 10.4 City May Procure Insurance if Developer Fails to
Do So. In the event Developer at any time refuses, neglects or
fails to secure and maintain in full force and effect any or all of
the insurance required pursuant to this Lease, the City, at its
option, may procure or renew such insurance, and all amounts of
money paid therefor by the City shall be treated as Additional
Rental payable by Developer to the City, together with interest
thereon at the Default Rate from the date the same were paid by the
City to the date of payment thereof by Developer. The City shall
notify Developer in writing of the date, purposes and amounts of
any such payments made by it, which shall be payable by Developer
to the City within ten (10) days of such notification.
Section 10.5. Insurance Does Not Waive Developer's
Obligations. No acceptance or approval of any insurance agreement
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or agreements by the City or the City Manager shall relieve or
release or be construed to relieve or release Developer from any
liability, duty or obligation assumed by, or imposed upon it by the
provisions of this Lease.
Section 10.6 Loss or Damage Not to Terminate Rental or This
Lease. Any loss or damage by fire or other casualty, of or to any
of the Improvements on the City Property at any time, shall not
operate to terminate this Lease or to relieve or discharge
Developer from the payment of Rental, or from the payment of any
money to be treated as Additional Rental in respect thereto,
pursuant to this Lease, as the same may become due and payable, as
provided in this Lease, or from the performance and fulfillment of
any of Developer's obligations pursuant to this Lease.
Section 10.7 Proof of Loss. Whenever any Improvements, or
any part thereof constructed on the City Property (including any
personal property furnished or installed in the premises) and/or
the City Property shall have been damaged, or destroyed, Developer
shall promptly make proof of loss in accordance with the terms of
the insurance policies and shall proceed promptly to collect or
cause to be collected, all valid claims which may have arisen
against insurers or others based upon any such damage or
destruction. Developer shall promptly give City written notice of
such damage or destruction.
Section 10.8 Property Insurance Proceeds.
(a) Authorized Payment. Except as otherwise provided in
Subsection (c) of this Section 10.8, all sums payable for loss and
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damage arising out of the casualties covered by the property
insurance policies shall be payable:
(i) Directly to Developer for purposes of rebuilding,
replacing and repair if the total recovery is Five Hundred Thousand
Dollars ($500,000) or less, which amount shall be adjusted every
five (5) years commencing with the Possession Date by the
percentage change in the Consumer Price Index (all urban consumers)
as published by the Bureau of Labor Statistics of the Department of
Labor (the "CPT") for such 5-year period, or, in the event the CPI
has changed or is no longer published, such other appropriate
measure of changes in the relative purchasing power of the dollar
agreed upon by the parties, except that if Developer is then in
default under this Lease, such proceeds shall be paid over to City,
who shall apply the proceeds first to the rebuilding, replacing and
repairing of the City Property, and then to the curing of such
default. Any remaining proceeds shall be paid over to Developer.
(ii) To the Insurance Trustee as defined hereinbelow, if
the total recovery is in excess of Five Hundred Thousand Dollars
($500,000), which amount shall be adjusted periodically every five
(5) years commencing with the Possession Date by the percentage
change in the CPI for such 5-year period as above set forth, to be
held by such Insurance Trustee pending establishment of
reconstruction, repair or replacement costs and shall be disbursed
to Developer pursuant to the provision Subparagraph (b) of this
Section 10.8. The Insurance Trustee (the "Insurance Trustee" or the
"Trustee") shall be a commercial bank or trust company designated
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by Developer and approved by the City Manager, which approval shall
not be unreasonably withheld or delayed.
(b) Disposition of Insurance Proceeds for Reconstruction.
All amounts received upon such policies shall be used, to the
extent required, for the reconstruction, repair or replacement of
the Improvements and the personal property of Developer contained
therein, so that the Improvements or such personal property and/or
the City Property shall be restored to a condition comparable to
the condition prior to the loss or damage (hereinafter referred to
as "Reconstruction Work"). From the Insurance Proceeds received by
the Insurance Trustee, there shall be disbursed to Developer such
amounts as are required for the Reconstruction Work. Developer
shall submit invoices or proof of payment to the Trustee for
payment or reimbursement in accordance with an agreed schedule of
values approved in advance by the City Manager.
Section 10.9 Covenant for Commencement and Completion of
Reconstruction. Subject to the provisions of Section 10.8(b),
Developer covenants and agrees to commence the Reconstruction Work
(the "Reconstruction Work") as soon as practicable, but in any
event within six ( 6 ) months after the insurance proceeds in respect
of the destroyed or damaged Improvements or personal property have
been received, and to fully complete such Reconstruction Work as
expeditiously as possible consistent with the nature of the damage,
but in any event within eighteen (18) months from the start
thereof; provided, that if it is not practicable to commence such
Reconstruction Work within such six ( 6 ) month period or to complete
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such Reconstruction Work within such eighteen (18) month period,
then such Reconstruction Work may be commenced and completed within
a longer period, provided that such period shall be approved in
writing by the City Manager after written request from Developer.
As used in the preceding sentence, the term "available net
insurance proceeds" means the sum actually paid by the insurer or
insurers in respect of the claim in question, less all costs and
expenses incurred by Developer or the Insurance Trustee in the
collection, holding and disbursement of same, including (without
limitation) reasonable attorneys' fees.
ARTICLE XI
CONDEMNATION
Section 11.1 Entire City Property Taken by Condemnation.
In the event that the whole of the City Property and Improvements
(or such portion thereof as shall render it economically unfeasible
to effect the Project) shall be taken for any public use or purpose
by the exercise of the power of eminent domain, or shall be
conveyed by the City and Developer acting jointly to avoid
proceedings of such taking, the Rental and money to be treated as
Additional Rental pursuant to this Lease and the Public Charges
shall be prorated and paid by the Developer to the date of such
taking or conveyance, and this Lease shall terminate and become
null and void as of the date of such taking or conveyance. The
award or awards of damages allowed to the City or Developer shall
be paid as follows:
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First: There shall be paid all expenses, if any, including
reasonable attorneys' fees, incurred by the City and Developer in
such condemnation suit or conveyance.
Second: City and Developer shall be paid portions of the
balance of said award or awards which are allocable to and
represented by the value of their respective interest in the City
Property as found by the court or jury in its condemnation award,
or if no such separate awards are obtained, such balance shall be
paid to Developer and the City in the same proportion as the then
fair market value of each party's respective interest or estate in
the City Property and the Improvements within thirty (30) days of
the time of the taking.
ARTICLE XII
RIGHTS OF OCCUPANCY AND ACCESS;
MAINTENANCE; OWNERSHIP OF IMPROVEMENTS AND PARKING
Section 12.1 Waste. Developer shall not permit, commit or
suffer waste or impairment of the City Property, or the
Improvements thereon, or any part thereof.
Section 12.2 Maintenance and operation of Improvements.
Developer shall at all times keep the Improvements and all
furnishings located therein and the City Property in good and safe
condition and repair, as other first class projects in similar
usage are kept, in the occupancy, maintenance and operation of such
Improvements and of the City Property, and shall comply with all
laws, ordinances, codes and regulations applicable thereto
including, without limitation, laws or regulations which are
applicable to historic structures.
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Section 12.3 Ownership of improvements - During Lease.
During the term of the Lease, title to the Improvements shall vest
in the Developer. During the term of the Lease, Developer shall be
entitled to claim depreciation on the Improvements and all
equipment, fixtures and machinery therein contained, for all
taxation purposes.
Section 12.4 Surrender of City Property. Upon the expiration
or termination of this Lease, title to the Improvements shall vest
in the City and it shall be lawful for the City to re-enter and
repossess the City Property and the Improvements thereon, without
process of law, and Developer, in such event, does hereby waive any
demand for possession thereof, agrees to surrender and deliver the
City Property and the Improvements thereon, without process of law,
peaceably to the City immediately upon such expiration or
termination.
Section 12.5 City and Developer to join in Certain Actions.
Within ten (10) days after receipt of written request from
Developer, the City shall:
(a) Join Developer when required by law in any and all
applications for permits, licenses or other authorizations required
by any governmental or public authority which has jurisdiction in
connection with any work as may be reasonably necessary or
appropriate for the construction of the Improvements to be
constructed by Developer on the City Property; and
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(b) Join Developer in any grants of, or grant such access
easements or easements or rights with respect to electric,
telephone, gas, water, sewer, and such other public utilities and
facilities as may be reasonably necessary or appropriate for the
construction, operation or use of the City Property or any
Improvements to be erected by Developer thereon. Developer shall
pay all fees and charges for all such applications and grants.
Section 12.6 Parking. The Miami Parking System shall make
up to 80 parking spaces available at a reduced residential rate to
Developer for the use of tenants of the Improvements. The tenants
shall pay. the Miami Parking System for the use of the parking
spaces.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 No Partnership or Joint Venture. It is
mutually understood and agreed that nothing contained in this Lease
is intended or shall be construed in any manner or under any
circumstances whatsoever as creating or establishing the
relationship of co-partners, or creating or establishing the
relationship of a joint venture between the City and Developer, or
as constituting Developer as the agent or representative of the
j City for any purpose or in any manner whatsoever.
i
Section 13.2 Florida and Local Laws Prevail. This Lease
shall be governed by the laws of the State of Florida. If any
term, covenant, or condition of this Lease or the application
thereof to any person or circumstances shall, to any extent, be
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ter\
illegal, invalid, or unenforceable because of present or future
laws or any rule or regulation of any governmental body or entity
or becomes unenforceable because of judicial construction, the
remaining terms, covenants and conditions of this Lease, or the
application of such term, covenant or condition to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term,
covenant, or condition of this Lease shall be valid and be enforced
to the fullest extent permitted by law.
Section 13.3 Arms Length Transaction. This Lease was
drafted as part of an arms length transaction fully negotiated
between the Developer and the City. Each of the Developer and the
City contributed material portions of this Lease; consequently,
this Lease shall not be construed to have been drafted by either
party, as same was drafted by both parties equally. No provision
of this Lease shall be construed against either party solely based
on an assumed fact or assertion that the party against whom
enforcement of the provisions is sought drafted the provisions.
Section 13.4 Attorneys Fees. If it becomes necessary for
the Developer or the City to enforce their respective rights under
this Lease or any part hereof through litigation, the Developer and
the City agree that the prevailing party shall be entitled to
recover from the other party all costs and expenses of such
litigation, including a reasonable attorney's fee for all trial and
appellate proceedings.
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5) 4- 198
Section 13.5 Antitrust Certification. Developer hereby
certifies to City that it is in compliance with the antitrust laws
of the United States and of the State of Florida and does hereby
agree to hold harmless, defend and indemnify the City for any non-
compliance by the Developer with the above laws.
Section 13.6 Award of Lease. Developer warrants that it has
not employed or retained any person employed by the City to solicit
or secure this Lease and that it has not offered to pay, paid, or
agreed to pay any person employed by the City any fee, commission
percentage, brokerage fee, or gift of any kind contingent upon or
resulting from the award of this Lease.
Section 13.7 Notice. A notice of communication under this
Lease by either the City or the City Manager, to Developer, or, by
Developer to the City or the City Manager, shall be sufficiently
given or delivered if dispatched by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
(a) Developer. In the case of a notice or communication to
Developer, if addressed as follows:
Olympia Building Partners, Ltd.
c/o The Cornerstone Group
2121 Ponce De Leon Boulevard
Penthouse
Coral Gables, Florida 33134
(b) City Manager. In the case of a notice or communication
to the City or the City Manager, if addressed as follows:
and to:
City Manager
3500 Pan American Drive
Miami, FL 33133
Executive Director
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Miami Parking System
190 N.E. 3rd Street
Miami, FL 33132
or if such notice is addressed in such other way in respect to any
of the foregoing parties as that party may, from time to time,
designate in writing, dispatched as provided in this Section 13.7.
Section 13.8 Receipt of FEMA Monies. Developer shall
reimburse Miami Parking System for the cost of providing elevator
and security personnel on a 24-hour, 7-day per week basis (which
personnel may be supplied by Miami Parking System) , until such time
as the manual elevator is replaced by an automatic elevator system,
to the extent that the benefit of FEMA monies in the approximate
amount of Fifty-four Thousand Dollars ($54,000) inures to the City
Property in the form of repairs and renovations listed in Exhibit
J, such repairs and renovations to be performed by Developer.
Section 13.9 Conflict of Interest. Developer covenants that
no person under its employ who presently exercises any functions or
responsibilities in connection with this Lease has any personal
financial interest, direct or indirect, with the City or with the
Miami Parking System. Developer further covenants that, in the
performance of this Lease, no person having such conflicting
interest shall be employed. Any such interests on the part of
Developer or its employees, must be disclosed in writing to the
City.
Developer is aware of the conflict of interest laws of the
City of Miami (City of Miami Code Chapter 2, Article V), Dade
County Florida (Dade County Code Section 2-11.1) and the State of
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4 "6
Florida, and agrees that it shall fully comply in all respects with
the terms of said laws.
Section 13.10 Titles of Articles and Sections. Any titles for
the several parts, Articles and Sections of this Lease are inserted
for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
Section 13.11 Counterparts. This Lease is executed in six (6)
counterparts, each of which shall be deemed an original, and such
counterparts shall constitute one and the same instrument.
Section 13.12 Successors and Assigns. Except to the extent
limited elsewhere in this Lease, all of the covenants, conditions
and obligations contained in this Lease shall be binding upon and
inure to the benefit of the respective successors and assigns of
the City and the Developer.
Section 13.13 Entire Agreement. This instrument and its
attachment constitute the sole and only agreement of the parties
hereto relating to said Lease and correctly sets forth the rights,
duties and obligations of each to the other as of its date. Any
prior agreements, promises, negotiations, or representations not
expressly set forth in this Lease are of no force or effect. In
the event of conflict between terms of this Lease and any terms or
conditions contained in any attached documents, the terms of this
Lease shall rule.
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IN WITNESS WHEREOF, the Developer has executed this Lease and the
CITY COMMISSION OF THE CITY OF MIAMI has caused this Lease to be signed
in its name by Cesar H. Odio, the City Manager, and to be duly attested
to by Matty Hirai, the City Clerk, on the day and year first above
written.
WITNESSES:
rewl-WFE
OWNER:
THE CITY OF MIAMI, a municipal
corporation of the State of Florida
By: The City Commission of the City of
Miami
By:
Its: City Manager
THE DEVELOPER:
OLYMPIA BUILDING PARTNERS, LTD., a
Florida limited partnership
By: Its General Partner,
Cornerstone Olympia, Ltd., a Florida
limited partnership _
By: Its G9A�/&5*17—
dr,
Cornedable Housing,
Inc.,orporation
ByIt
By: Its General Partner
DEEDCO Olympia, Inc., a Flor da
corporat" n
B /
Y
Its:
-69-
94- 198
STATE OF FLORIDA)
COUNTY OF DADE }
The foregoing instrument was acknowledged before me this day of
, 1994 by Cesar H. Odio, City Manager of The City
Commission of the City of Miami, on behalf of The City of Miami, a
municipal corporation of the State of Florida. He is personally known
to me or has produced as identification and who did ( did
not) take an oath.
NOTARY PUBLIC
Typed or Printed Name of Notary
My commission expires:
Serial No., if any:
STATE OF FLORIDA)
COUNTY OF DADE )
The foregoing instrument s ackno edged before me this /j day of
1994 by� ��z.d of Cornerstone Affordable
Housing, Inc., a Florida corporation on behalf of its General Partner,
Cornerstone Olympia, Ltd., a Florida limited partnership, on behalf of
its General Partner, Olympia Building Partners, Ltd., a Florida limited
paptnership. He is personally known to me or has produced
,eL4 G�i,-e! as identification and who did ( did not) take an oath.
or Prin
I
f
ame of Notary
My commission expires
GF t"I,OTZIDA
Serial No., if any.
-70-
94- 198
Y
I
STATE OF FLORIDA)
COUNTY OF DADE )
The foregoing instrument w acknowledged before me this % day of
1994 by �k of DEEDCO Olympia,
Inc., -a Florida corporat on, on behal of its General Partner, Olympia
Building Partners, Ltd., a Florida limited partnership. He is
personally known to me or has produced.�sT:�, as identification
and who did (did not) take an oath.
typed or Printed Name of Notary'
�• [F,C'ip L �' :lj'CAE.1' SEAL
My commission expires: �,1;3ii:?'f.ii L sY`, iI'
FNICY,
ILl:1'' i'l1B[.iC �t'rITL' l'i' FI.O�IUA
Serial No., if any: -.�' . ', 'Al
-71-
94- 198
APPROVED AS TO FORM AND
CORRECTNESS:
A. Quinn Jones, III
City Attorney
MIAMI 263663.4 - SLB
-72-
94- 198
EXHIBIT A
Description of the City Property
(On file with the Miami Parking System
190 N.E. Third Street, Miami, FL 33132)
Z U161,
Plans and Specifications for the Project
(On file with the Miami Parking System,
190 N.E. Third Street, Miami, FL 33132)
4 j i
EXHIBIw B.1
ULYMM BUMMING
an
1. Approxhr ately 1200 square feet of storW,spue on either the iaofdock or
. elsewhere in the building.
2. Entry systom ibr eeourlty
I Phone in lobby
4. Mail bozos
S. Laundry facilitico
C Small study Reference room
7. "Murphy" bed or equivalent
94- 198
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Easements
(On file with the Miami Parking System,
190 N.E. Third Street, Miami, FL 33132)
94- 198
S
Request for Proposals and Revisions Addenda
Dated 1/7/94
(On file with the Miami Parking System,
190 N.E. Third Street, Miami, FL 33132)
94- 198
EXHIBIT F
Proposal dated 2/11/94 and Responses to Proposal
review committee questions submitted by the Developer
(On file with the Miami Parking System,
190 N.E. Third Street, Miami, FL 33132)
94- 198
33
TO: Sontrable Mayor and DATE: march 4, 1994
Members of the City Commission
FROM:
Ci
SDBJSCT: Redevelopment of the
Olympia Building
On December 16, 1993, the City Coanaission (by Resolution 93-791)
authorised the Off -Street Parking Board to advertise for proposals
for the renovation and use of the Olympia Building, to evaluate the
proposals, to make a recommendation regarding the most advantageous
proposal, and to negotiate a proposed contract. The Board was
further instructed to bring the negotiated contract to the City
Commission for its review, and if acceptable, its approval.
The following events have taken place since that time:
o Request for Letters' of Interest issued,
by public notice, 12/26/93
o Letters of Interest received 1/4/94
o Pre -proposal Conference held 1/7/94
o TWO (2) proposals received 1/21/94
o Proposals rejected as non -responsive 2/1/94
o Request for Proposals reissued, by public notice, 2/2f94
o Two (2) proposals received 2/11/94
The proposals have been reviewed by the Selection Committee, as well
as by Kenneth Leventhal & Company. At its meeting of March 1, 1994,
the Selection Committee concluded its deliberations and voted to
recommend that Olympia Building Partners, Ltd. be selected as the
most advantageous proposal to redevelop the Olympia Building. This
recommendation was accepted by the Off -Street parking Board on March
7, 1994. Contract negotiations commenced immediately thereafter in
order to have the proposed agreement before the City Conidesion on
March 24, 1994.
Because of the time constraints described above, the Resolution and
recommended lease agreement will be distributed to you under separate
cover by 5:co p.m. Friday, March is, 1994. It is essential that this
'item be considered by the Commission on March 24, 1994 in order to
allow the proposed developer an opportunity to apply for tax credits
that are needed for project financing by April 4, 1994.
KPW:or /
94- 198
TO: Honorable Mayor and DATE: March 17, 1994
Members'of the City Commission
FROM: Ces o SUSJSCT: Olympia Building
Cit g r Redevelopment
This item, scheduled for consideration at the March 24, 1994 City Commission
meeting regarding the proposal redevelopment of the Olympia Building, is being
distributed to you separately from the regular agenda package because of the
short time frame for lease negotiations. The background, evaluation of the
proposals, and proposed lease terms are described below.
D
A Request for Proposals (RFP) for a Unified Development Project (UDP) for the
redevelopment of the Olympia Building into affordable housing was originally
issued in December, 1992. The affordable housing strategy was selected
because it is not economically feasible to refurbish the Olympia Building for
office use, given the 25 percent office vacancy rate in Downtown, the
investment required to achieve marketable Class A-B space, and the rental
rates which would be required to provide a reasonable return on investment.
one response was received to this original RFP, submitted by Gusman Center
Partners (GCP) in January, 1993. The City Commission approved a lease with
Gusman Center Partners in May, 1993. However, financing was not successful
and GCP defaulted on the agreement in October, 1993.
Due to the continuing need to reverse the deterioration of the Olympia
Building and the need for cash flow to offset the operating deficit of Gusman
Theater, on December 16, 1993, the City Commission (by Resolution 93-791)
authorized the Off -Street Parking Board to advertise for proposals for the
renovation and use of the Olympia Building, to evaluate the proposals, to make
a recommendation regarding the most advantageous proposal, and to negotiate a
proposed contract. The Board was further instructed to bring the negotiated
contract to the City Commission for its review, and if acceptable, its
approval.
The following events have taken place since that time:
o Request for Letters of Interest issued, by public notice, 12/26/93
o Letters of Interest received 1/4/94
o Pre -proposal Conference held 1/7/94
o Two (2) proposals received 1/21/94
o Proposals rejected as non -responsive 2/1/94
Honorable Mayor and Members
of the City Commission
Page No. 2
o Request for Proposals reissued, by public notice, 2/2/94
o Two (2) proposals received 2/11/94
The proposals, submitted by Olympia Building Partners and Related Building
Associates, have been reviewed by the staff Selection Committee, as well as by
Kenneth Leventhal & Company. At its meeting of March 1, 1994, the Selection
Ccmmittee concluded its deliberations and voted to recommend that Olympia
Building Partners, Ltd. be selected as the most advantageous proposal to
redevelop the Olympia Building. This recommendation was accepted by the
Off -Street Parking Board on March 7, 1994. Contract negotiations commenced
immediately thereafter in order to have the proposed agreement before the City
Commission on March 24, 1994.
EVALUATION OF THE PROPOSALS
The two (2) proposals, received from Olympia Building Partners and Related
Building Associates, were evaluated by a staff Selection Committee (members of
the,public were not required to serve on the Committee as the Commission had
waived the provisions of a UDP) and by Kenneth Leventhal and Company, a
certified public accounting firm. Members of the Selection Committee were:
o Clark Cook, Executive Director, Miami Parking System
o Nancy Skinner, Managing Director, Gusman Center for the Performing
Arts
o Paul Thompson, Business Development Manager, Gusman Center for the
Performing Arts
o Karen Wilson, Director of Planning and Development, Miami Parking
System
o Harold Manasa, Chief Financial Officer, Miami Parking System
o Dave Willis, Staff Analyst, Miami Parking System
The primary objective of the work of Kenneth Leventhal was to provide to the
City an independent evaluation of the submissions received based on the
following:
o Experience, financial capability and extent of minority
participation of the proposed development teams;
o General project redevelopment characteristics including proposed
uses of the Building, site improvements and accommodation of Gusman
administrative offices;
o Economic feasibility of the proposers' redevelopment plans
including proposed uses of the Building, pricing, absorption, and
operating costs, as well as the comparability of development cost
characteristics;
94- 198
N
Honorable Mayor and Members
of the City Commission
Page No. 3
o The comparability and reasonableness of the financing strategies of
the proposers including those elements that relate to the sale of
tax credits;
o The long and short term financial return to the City of Miami with
respect to lease terms, estimated annual return to the City for the
lease of the Building, the dollar value and timing of capital
improvements and any other benefits that may be received by the
City; and
o The return to the proposers and the not -for -profit entities that
are part of the proposed development team.
The report of Kenneth Leventhal is attached, and provides and an excellent
summary of the two proposals. Based upon the report_of Kenneth Leventhal and
its own deliberations (including follow-up questions to both proposers), the
Selection Committee concluded its evaluation on March 1, 1994. The scoring
summary of the proposals was as follows:
Evaluation Criteria
Olympia
Related
Note:
Building
Building
Maximum
Partners
Associates
Points
1. Experience of the
proposer and capability of
the development team (20*)
115
110
120
2. Financial capability,
level of financial commit-
ment (25V)
134
130
150
3. Financial return to
the City (30t)
154
115
180
4. Overall project design
(1510
87
75
90
5. Extent of minority
participation (101k)
..JU
60
TOTAL
546
485
600
The recommendation of Olympia Building Partners as the most advantageous
proposal to redevelop the Olympia Building was then forwarded to the
Off -Street Parking Board. The Board accepted this recommendation on March 7,
1994, and contract negotiations commenced immediately.
94- 198
Honorable Mayor and Members
of the City Commission
Page No. A
SUMMARYOF THE PROPOSAL AND LEASE TERMS
Development Team•
The Cornerstone Group -
Dade Employment and Economic
Development Corp. (DEEDCO)-
Development Management
Services, Inc.-
Urbaniza/Stull & Lee Group
RPJ, Inc. -
Santiago Engineers -
Alden & Associates -
Vantage Construction Co. -
The Christman Co. -
Cornerstone Management Corp./
Clinton International Group -
Managing General Partner
Principals: Stuart Meyers
Jorge Lopez
Advisory Non -Profit General Partner
Principal: Bernice Butler
Project Manager/Historic Preservation
Principal: Joseph Herndon
Architecture -
Principals: Victor Morales
David Lee
Engineering
Principal: Rafael Pena
Environmental/Structural
Principal: Eugenio Santiago
Landscape Architecture
Principal: Charles Alden
General Contractor
Principal: Arturo Xiques
Managing Rehabilitation Contractor
Principal: Ron Staley
Residential/Retail Management
Principals: Stuart Meyers
Stewart Marcus
Each member of the proposed development team has significant experience in
their area of expertise. Most importantly, the principals of the two General
Partners have extensive experience in rehabilitation projects, affordable
housing, and tax credit financing.
94- 198
Honorable Mayor and Members
of the City Commission
Page No. 5
The proposal contemplates a 40 year lease with the City to redevelop floors
3-10 of the Olympia building into 79 units of affordable housing. Seventy-two
(72) of these units are proposed to be studios (325 - 400 square feet) and
seven (7) would be one-bedroom/one bath units (590'square feet). The units
would be marketed primarily to students at Miami -Dade Community College and
Downtown workers. Rents are proposed to be $315 per month for the studios and
$335 per month for the one -bedroom apartments. These rental rates are
targeted for those prospective tenants at 50 percent of Dade County median
income: '
The proposal also includes restoration of the building facades (Flagler Street
and S.S. 2nd Avenue) and windows consistent with the Secretary of the
Interior's Standards for Historic Rehabilitation, as the building is listed on
the National Register of Historic Places. The original S.S. 2nd Avenue
entrance would be restored, the elevators would be .fully automated, the air
conditioning/plumbing/electrical systems would be completely overhauled, and
fire safety systems would be added.
The existing retail space (3,664 square feet) on the ground floor will remain,
but the store fronts would be redone and the masonry repaired. Existing
retail leases would be renegotiated as they expire (1995-96), with first
option being given to existing tenants. If retail space becomes available,
the developer proposes targeting such uses as a deli, drug store or cafe.
The proposal includes total construction costs of $3,100,000 of a total
development budget of $4,920,000. Construction is anticipated to begin in the
fall of 1994, pending the completion .of the proposers financing and plans
development, as well as Dade County's completion of sewer -related construction
in order to allow the project to be permitted. Construction is proposed to
take 12-15 months, with occupancy forecast for late 1995. The City retains
full approval authority over the construction plans and scheduling.
Olympia Building Partners contemplates two major sources of financing.
Application has been made to the City of Miami and Dade County for HOME loans
of $2.5 million. The balance of development financing is proposed to come
from Historic Tax Credits ($650,000) and Low Income Housing Tax Credits
($1,770,000) from the State of Florida. The application deadline for the
latter is April 4, 1994. Once the developer sells limited partnership
interests which carry the low income housing tax credit benefits, the Limited
Partnership will own 99 percent of the project, Olympia Building Partners will
own 2/3 of one percent of the project,;,and DSEDCO will own the remaining 1/3
of one percent.
The proposed financial return to the City of Miami is as follows:
Upon execution of lease $18,000 (approximately)
(expenses associated with RFP)
4- 198
Honorable Mayor and Members
of the City Commission
Page No. 6
Upon Possession Date (no later than
12/31/94, unless sewer moratorium
prevents obtaining building permit,
but in no event later than 12/31/95)
Developer Option to Extend Possession
Date (beyond 12/31/94 for reason other
than sewer moratorium, but in no event
later than 12/31/95, to be credited
against $300,000 above)
Construction Extension
issued within 15 months
Date)
$300,000
$10,000 per month
(if T.C.O. not $10,417 per month if subject
of Possession to ad valorem taxes
$12,500 per month if not
subject to ad valorem taxes
Rental
-If subject to ad valorem taxes
-If not subject to ad valorem taxes
The greater of:
Years 1-4 - $125,000 or 25V
of gross revenues per year
Years 5-40- $25,000 or 25W of
gross revenues per year
Years 1-4- $150,000 or 32V of
gross revenues per year
Years 5-40- $50,000 or 32V of
gross revenues per year
If the developer's cash flow (after the payments of necessary expenses only)
is not sufficient in any quarter to pay the full required percentage of gross
revenue, any shortfall will accrue with interest until sufficient cash flow -is
available, but in no event will accrue beyond the conclusion of that Rental
Year. Any receivable would be paid in full at the end of the Rental Year and
the developer would always be required to pay the minimum guarantee each
quarter regardless of cash flow.
The developer will also be required to provide, by the Possession Date, a
Payment and Performance Bond in the full amount of construction costs, as well
as a Payment Guarantee for rental payments. The latter will take the form of
corporate guarantees executed by Cornerstone Olympia, Ltd. and Cornerstone
Affordable Housing, Inc. and an assignment of the retail rents to the -City.
It is reco¢nsnended that the attached resolution be approved, accepting the
recommendation of the Off -Street Parking Board that the proposal submitted by
Olympia Building Partners is the most advantageous proposal for the
redevelopment of the Olympia Building. The resolution further authorizes the
City Manager to execute the attached lease with Olympia Building Partners.
94- 198
Honorable Mayor and Members
of the City Commission
Page No. 7
This recommendation is made based on the critical need to redevelop the
Olympia Building to achieve the highest return from this City asset. The
financial return from the proposed redevelopment would be applied to offset
any future operating deficits of Gusman Theater. In addition, solely needed
housing would be provided to support the revitalization of Downtown Miami.
olyb:KW: dr
94- 198
OLYMPIA BUILDING REDEVELOPMENT
EVALUATION OF PROPOSALS
THE CITY OF MIAMI
FEBRUARY 1994
Lif
Kenneth Leventhal & Company
Certified Public Accouutauls
94- 198
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Em
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N
LN
OLYMPIA BUILDING REDEVELOPMENT
EVALUATION OF PROPOSALS
A�►
THE CITY OF MIAMI
FEBRUARY 1994
a
19
10
[am
le 94- 198
0 '
2100
Ponce de Leon Blvd
Coral Gables
Florida 33134
Telephone 305.443.2323
OA Facsimile 305.447.8651
The City of Miami
Department of Off Street Parking
H
Kenneth Leventhal & Company
Certified Public Accountants
On behalf of Kenneth Leventhal & Company, we are pleased to submit this report
outlining our findings and conclusions regarding our evaluation of two proposals sent
to you in response to your Request for Proposal (RFP) regarding redevelopment of the
Olympia Building. Specifically, the City of Miami - Department of Off Street Parking
(the "City") issued an RFP for the purpose of obtaining proposals from qualified and
experienced teams to plan, design, construct, manage and lease the Olympia Building.
The Olympia Building (the "Building"), located in downtown Miami on the southwest
corner of East Flagler Street and SE 2nd Avenue, is owned by the City of Miami and
managed by Miami Parking System. The Building, as it currently exists, is a
rectangular 10-story office structure adjacent and architecturally linked to Gusman
Center ("Gusman"), a 1,711-seat performing arts center.
The RFP issued by the City sought a creative development plan for the Building that
would succeed as a moderate -priced residential project while generating income to
support Gusman Center's operating deficit. The Building is to be redeveloped, leased,
managed and maintained at no cost to the City or the Miami Parking System, by the
successful proposer under a property lease agreement with the Miami Parking System
and the City of Miami. Two development teams responded to the RFP: Olympia
Building Partners, Ltd. and Related Building Associates, Ltd. Based on criteria outlined
in the RFP, we evaluated the proposals to determine which development team would
best meet the objectives of the City with respect to redevelopment of the Building.
These objectives and the scope of services that we provided in this regard are outlined
..� in the paragraphs below.
STUDY OBJECTIVES AND SCOPE OF SERVICES
The primary objective of our assignment was to provide to the City an independent
evaluation of the submissions received based on the following:
Experience, financial capability and extent of minority participation of the
proposed development teams;
94— 198
Id
City of Miami
Department of Off Street Parking
Page 2
• General project redevelopment characteristics including proposed uses of the
Building, site improvements and accommodation of Gusman administrative
offices;
• Economic feasibility of the proposers redevelopment plans including proposed
uses of the Building, pricing, absorption, and operating costs, as well as the
comparability of development cost characteristics;
• The comparability and reasonableness of the financing strategies of the
proposers including those elements that relate to the sale of tax credits;
• The long and short term financial return to the City of Miami with respect to
lease terms, estimated annual return to the City for the lease of the Building,
the dollar value and timing of capital improvements and any other benefits that
may be received by the City; and
• The return to the proposers and the not -for -profit entities that are part of the
proposed development team.
To accomplish this objective, we undertook a scope of services that included the
following:
• Read each of the two proposals submitted to and accepted by the City;
• Evaluated those elements contained in each submission related to the above to
ascertain if the proposers met development criteria established in the RFP and
to effectively compare the outcomes of the proposals. Elements evaluated in
this regard included the following:
- Experience of the proposer and capability of the development team;
- Financial capability and level of financial commitment;
- Minority participation;
- Development objective;
' - Use and related amenities;
- Site improvements;
- Adjacent property considerations;
- Architectural treatment of improvements;
- Parking;
- Permitting;
- Method of operation;
94- 198
City of Miami
Department of Off Street Parking
Page 3
- Residential and commercial pricing;
- Absorption period;
- Other operating income and operating expenses;
- Estimated development costs and schedule;
- Financing strategies;
- Characteristics related to the acquisition and sale of tax credits;
- Characteristics related to the return to the City; and
- Characteristics related to the return to the proposers and the not -for -
profit entities that are part of the proposers' development team.
• Gathered pertinent and relevant published and/or secondary market -oriented
data to evaluate the reasonableness of the proposed uses for the Building and
the pricing structure. Reports utilized in this regard included two studies:
Downtown Miami Housing Market Analysis Study, prepared by Goodkin
Research Corp. for the Downtown Development Authority and Rental
Apartment Market Analysis, prepared by Reinhold P. Wolff Economic Research,
Inc. for the Downtown Development Authority. Additionally, we conducted
market interviews to clarify issues regarding the demand for and pricing of
residential units and retail space in the Central Business District;
• Gathered pertinent and relevant published and/or secondary operating expense
data to evaluate the operating assumptions set forth within each proposal;
• Read and analyzed the financial statements of the proposers provided in the
submissions to conclude on the proposers' ability to continue as going concerns
and complete the proposed redevelopment of the Building as outlined in the
submissions;
• Reviewed Section 42 of the Internal Revenue Code and related regulations to
evaluate certain issues related to the proposers' redevelopment plan and
associated ability to qualify for certain tax credits;
e Tested the mathematical accuracy of each submission;
J • Ranked the submissions; and
• Prepared a letter report detailing the results of the aforementioned procedures.
The approach and methodologies used to meet the stated objective do not comprise
an examination in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the fair presentation of
94- 198
City of Miami
Department of Off Street Parking
=� Page 4
financial statements of information presented in accordance with generally accepted
accounting principles. We express no opinion on, and accept no responsibility for the
accuracy or completeness of information provided to us by others, obtained from
independent sources or provided within the submissions, which we used and relied
on. The approach and methodologies applied in this engagement did not constitute
market feasibility research and analysis. Rather, we depended upon the sources of
information described above which we did not review for accuracy or completeness.
Furthermore, there will usually be a difference between forecasted and actual results,
because events and circumstances frequently do not occur as expected, and those
differences may be material. We have no responsibility for the occurrence of any
differences, nor do we have responsibility to update this report for events and
circumstances occurring after the date of this report.
The following pages summarize our findings and conclusions regarding the two
proposals to redevelop the Building and outline and compare the key characteristics
contained within each proposer's submission. Additionally, we have highlighted those
differences we feel are pertinent and relevant given the criteria established for
evaluation and the ultimate decision regarding the proposal that presents the best
alternative for redevelopment of the Building.
SUMMARY OF QUALITATIVE CHARACTERISTICS
Exhibits 1.A and 1.6 on the following pages summarize the qualitative characteristics
of the proposers including the team members, the role of each team member in the
redevelopment project, the prior experience of the team members, the financial
capability of the lead team member and minority participation. The team of Related
Building Associates, Ltd. ("Related") consists of two entities on the development side,
Related Group of Florida and the Downtown Miami Community Development
Corporation, Inc. (CDC) as well as three architectural, design and/or engineering firms,
one construction company and a management group. The team of Olympia Building
Partners, Ltd. ("Cornerstone") also consists of two entities on the development side,
The Cornerstone Group and the Dade Employment and Economic Development
Corporation, Inc. (DEEDCO) in addition to five architectural, design and/or engineering
firms, three construction related companies and two management groups. Review of
the qualifications and prior experience of each of the team members for Related and
Cornerstone reveals that both proposer groups are qualified to undertake
redevelopment of the Building from a planning and general development perspective,
as well as from the viewpoint of a historic renovation project.
J 94- 198
EXHIBIT 1.A
RELATED BUILDING ASSOCIATES, LTD.
SUMMARY OF QUALITATIVE CHARACTERISTICS
FINANCIAL MINORITY
TEAM MEMBERS PROJECT PARTICIPATION PRIOR EXPERIENCE CAPABILITY STATUS 111
Developer(s)
Related Group of Florida
Development
Significant historic rehabilitations and use of tax-exempt
Company able to continue as
Hispanic
bonds and government financing.
a going concern and complete
project as proposed.
Downtown Miami Community Development
Development
New alliance between the Downtown Development
N/AP
N/AP
Corporation, Inc. (CDC)
Authority and the Downtown Miami and the Downtown
Business Association whose focus is on creation of
affordable housing and economic development in core
area of Downtown.
Architectural/Design/Engineering
R,J. Heisenbottle Architects, P.A.
Preservation Architect
Extensive public/private renovations and
N/AP
None
restorations.
Maurice Gray Associates
Civil/Structural Engineering
Significant structural inspections and renovations.
N/AP
Black
Gartek Engineering Corporation
Mechanical/Electrical Engineering
Significant historic rehabilitations.
N/AP
Female
Construction
The Related Group of Florida
Construction Management
Significant experience with timing, cost control
N/AP
Hispanic
(Fortune Construction)
and quality control.
Management
Related Management Company of Florida
Property Leasing and Management
Extensive experience; over 10,000 units currently.
N/AP
Hispanic
11) Represents fifty-one percent minority ownership,
N/AP - Not Applicable
N/AV - Not Available
94- 198
EXHIBIT 1.8
OLYMPIA BUILDING PARTNERS, LTD.
SUMMARY OF QUALITATIVE CHARACTERISTICS
FINANCIAL MINORITY
TEAM MEMBERS PROJECT PARTICIPATION PRIOR EXPERIENCE CAPABILITY STATUSIII
Developeris)
The Cornerstone Group
Developer/General Partner
Significant experience with rehabilitation projects,
Company able to continue as a
Hispanic partner owns
Section 8 moderate rehabilitations and LIHTC.
going concern and complete
shares in one of two
the project as proposed.
companies that make up
group.
Dade Employment and Economic
Financing, development, startup
Non-profit affordable housing and commercial
N/AP
Significant minority
Development Corporation (DEEDCO)
and all public sector involvement.
development entity with significant experience In
management
the provision of affordable housing in Dade County.
Architectural/Design/Engineering
Development Management Services, Inc.
Project Management - Historic
Extensive experience with historic rehabilitation
N/AP
None
Preservation
projects including residential and commercial.
Urbanite/Stull & Lee Group
Architecture
Extensive experience with architecture, urban
N/AP
Female/Hispanic/ Black
design, community planning and financial feasibility.
RPJ, Inc. Mechanical & Electrical Engineers
Electrical and Mechanical
Extensive experience In providing electrical and
N/AP
Hispanic
Engineering
mechanical engineering services.
Santiago Engineers
Environmental Structural
Significant experience in providing land planning and
N/AP
Hispanic
design services.
Alden & Associates
Landscape Architecture
Significant experience with renovations of public and
N/AP
N/AV
private commercial properties.
Construction
Vantage Construction Company
General Contractors
Experience with interior tenant Improvements (Wholly
N/AP
Hispanic
owned subsidiary of The Cornerstone Group).
The Christman Company
Managing Rehabilitation Contractor
Extensive construction management experience;
N/AP
None
significant historic restoration projects.
DMS, Inc.
Historic Preservation Standards/Credits
Extensive historic preservation/re-development.
N/AP
N/AV
Management
Extensive residential/commercial/retail management
N/AP
Hispanic partner
Cornerstone Management Corporation/
Management of Residential and
experience between the two entities.
Clinton International Group
Retail Components of Project
Experience with economic development and provision
N/AP
Significant minority
DEEDCO
Tenant Relations
of low-cost/affordable housing, particularly for minorities.
employment
11) Represents fifty-one percent minority ownership.
N/AP - Not Applicable
N/AV - Not Available
City of Miami
Department of Off Street Parking
Page 7
The only difference in the two proposers in this regard relates to the not -for -profit
entities involved. The CDC is a new alliance between the Downtown Development
Authority and the Downtown Business Association. While the focus of the CDC is
the creation of affordable housing and economic development in the Core Area or
Central Business District (CBD) of Downtown Miami (and the CDC is currently testing
the feasibility of three projects) the organization to date has not undertaken any
developments. However, the Consultant/Director of the CDC has significant public
and private experience. DEEDCO is a not -for -profit affordable housing and commercial
development entity with significant experience in the provision of affordable housing
in Dade County.
Both lead team members appear to be viable companies that will be able to continue
as going concerns. This conclusion is based upon review of the financial statements
provided in the submissions for The Related Companies and The Cornerstone Group.
Specifically, the following observations were made:
• The financial statements for the Related Companies showed cash and cash
equivalents of over $15 million, total equity of over $23 million and a liabilities
to equity ratio of approximately 26 percent. It should be noted that the
financial statements provided are over 13 months old.
• The unaudited financial statements for The Cornerstone Group and the personal
financial statements of the three principals of the company showed total capital
of over $1.5 million, a liabilities to capital ratio of 0.3 percent and a combined
net worth of the three named principals of the Cornerstone Group of over $11
million.
Finally, while there are some variations in minority participation between the two
teams, the proposers are essentially equal on this point, exhibiting extensive minority
participation at various levels including company ownership.
GENERAL REDEVELOPMENT CHARACTERISTICS
Exhibit 2.0 on the following page summarizes the general redevelopment
characteristics set forth by each of the proposers including development objectives,
proposed use, site improvements, accommodation of Gusman administrative offices,
adjacent property considerations, architectural treatment of improvements, parking,
permitting and method of operation. Review of these elements indicates differences
between the redevelopment plans of Related and Cornerstone that are not considered
94- 198
.14
M"
`-4
1 �4
EXHIBIT 2.0
GENERAL REDEVELOPMENT CHARACTERISTICS
OLYMPIA BUILDING
COMPARABLE ELEMENT
RELATED BUILDING ASSOCIATES, LTD.
OLYMPIA BUILDING PARTNERS, LTD.
Development Objective(s)
Restore the facade to its 1926 condition.
Reestablish identity of building.
Improve the function of the building to that of residential
Create a viable and exciting downtown facility.
units for college students and downtown workers.
Adapt existing office $pace for residential use.
Improve the retail space to complement theatre operations.
Renovate retail space with partial cultural orientation.
Enable the property to generate a fair return to the City.
Use
Mixed Use Development:
Mixed Use Development:
Retail (3,226 square feet)
Retail 13.664 square feet)
Residential (64 Affordable Housing Units)
Residential 179 Affordable Housing Units)
Eight 2/2
Seventy-two Studios
• Sixteen III
• Seven 1/1
Forty Studios
Site Improvements
Building facade restoration and addition of exterior lighting.
Restoration of building facade and lobby to original plan.
Redevelopment of 3rd thru 10th floors to accommodate
Interior renovation and construction toward residential use.
residential use.
Treat block as an urban area; high quality paving.
Streatscape improvement; Royal Palm trees at entrances.
Create a design feature in pavement at Flagler St. & N.E. Ave.
Aesthetic safety lighting.
Accommodation of Gutman
2nd floor will remain as theatre dressing rooms and 1,200
Existing theatre uses on the second floor and the required
Administrative Offices
square feet storage area will be provided on roof.
access for production will be respected and protected.
Allocate the third floor to the Theatre Groups and/or
1,200 square feet of storage will be provided on the
Guarneri offices and storage for the same net rent that
roofdeck.
the 8 apartments on the floor would produce.
Adjacent Property Consideration
Will not be negotiating with adjacent property owners for
Collaboration in scheduling work will be required for the first
(Gutman Theatre)
parking and will not be submitting an alternative bid.
month of construction. After that, construction will have
Conduct restoration and renovation activity with minimal
a minimal effect on the theatre.
disruption to operation of the theatre.
Architectural Treatment of
Mediterranean Revival Architecture. Project will be treated
Project will be treated as a historic renovation project.
Improvements
as historic renovation project and facade will be restored
Altered historic facades will be restored to the extent
to original 1926 condition. All major improvements to be
possible. All major improvements to be made to the
made to the building are consistent with the Secretary
building are consistent with the Secretary of the Interior's
Interior's Standards for Historic Rehabilitation.
Standards for Historic Rehabilitations.
Parking
Maximum of two spaces per residence (C.B.D. Zoning).
Developer will negotiate on behalf of tenants a fair
Miami Parking System will provide spaces at 'minimal
arrangement at Garage 03.
cost' in Garages N3 and/or 04.
Permitting
Will acquire all required permits, licenses and
N/AV
'
approvals.
Method of Operation
Related Management Company:
Cornerstone Management Corporation/
- Property manager
Clinton International Group
• Site manager
Office clerk
DEEDCO - Tenant Relations
Maintenance man
• Cleaning person
9 198
i-0
City of Miami
Department of Off Street Parking
Page 9
meaningful to prospects for success. The one primary exception is the uses proposed
for the Building. Specifically, Related is proposing the redevelopment of the third
through tenth floors to accommodate 64 affordable housing units: eight two-
bedroom/two-bathroom units, 16 one-bedroom/one-bathroom units and 40 studio/
one -bathroom units. Alternatively, Cornerstone is proposing the redevelopment of
these floors to accommodate 79 affordable housing units: seven one-bedroom/one-
bathroom units and 72 studio/one-bathroom units.
-' The Downtown Miami Housing Market Analysis Study reports that residential uses
within the CBD (the area in which the Building is located) are virtually non-existent,
and therefore the CBD lacks full-time residents and is mainly transient in nature. (At
the time of the 1990 Census, only 623 people resided in the CBD). Additionally,
there were concerns among survey participants whose responses were critical to the
' conclusions in the study regarding security, the appearance of the downtown area in
general and parking. However, the study concludes that there will be demand for
300 rental residences in the CBD at a rate of under $625 per month from 1993 to
2000. It should be noted that this estimate relied most heavily upon sources of
residential demand that did not extensively take into consideration the possible
demand for rental units in the area by students. Accordingly, this estimate of
residential rental unit demand in the CBD may be somewhat understated.
it should be noted that the survey does not provide indications of residential demand
in the CBD by unit type. However, based on our review of this study, our knowledge
of the area and the characteristics of the target market (i.e., the characteristics of unit
demand by students), we believe that the differences in unit types proposed by
Related and Cornerstone do not present any market issues that would hinder the
successful development and marketing of the Building. While the information provided
in the report did not specifically define rental unit demand in the CBD by unit type, we
believe that two -bedroom units may be successfully marketed by Related given that
the proposer is targeting two unrelated individuals, the pricing is within the guidelines
established for affordable housing and the recommendations of the aforementioned
study, and the fact that only eight two -bedroom units would be developed.
The only other difference between the proposers with respect to general development
characteristics is that the Cornerstone not -for -profit entity (DEEDCO) appears to be
involved in the actual operation/management of the Building upon completion to some
degree as well as assistance with financing Issues. The role of the CDC appears to
be limited to assisting the partnership with obtaining financing within the guidelines
dictated for receipt of Low income Housing Tax Credits (LIHTC).
94- 198
City of Miami
Department of Off Street Parking
Page 10
ESTIMATED PRICING AND ABSORPTION
Exhibit 3.0 on the following page summarizes pricing and absorption for the
commercial and residential elements proposed under the two submissions. Related
has set forth pricing for the retail space at $50 per square foot plus a common area
maintenance (CAM) charge of $6.50 per square foot. This pricing is relatively
consistent with what is paid by current tenants of the retail space at the Building.
However, Related proposes to increase retail lease rates 15 percent in the sixth year
and 10 percent in the eleventh year to bring them in line with market rates for the
area. Cornerstone is more aggressive in this regard, increasing retail lease rates to
$74 per square foot in 1996, with an annual escalation rate of four percent. While
the Cornerstone estimate is more aggressive, our review of existing data and
conversations with brokers knowledgeable about the retail market in the area revealed
that, in the area of the Building, retail lease rates currently range from $70 to $125
per square foot depending on location, frontage and lease terms.
Residential pricing is in line with the recommendations of the study sighted previously,
and more importantly are within the guidelines set forth for affordable housing and
qualification of LIHTC. Additionally, estimates of residential absorption appear
reasonable given the number, pricing and type of units to be offered. Both proposers
plan to offer the retail space to existing, paying tenants of the Building at the new
lease rates before pursuing other tenants. Given the renovation of the Building, its
adjacency to Gusman and the desirability of the location and frontage of the retail
space, we expect that the proposers will be successful in marketing the retail
component of the project within the anticipated time frames.
With respect to operating issues, we also reviewed operating expenses set forth in the
estimates of cash flow submitted by each of the proposers and compared these
figures to published operating expense data for similar residential structures in the
Miami area. Both Related and Cornerstone have estimated operating expenses within
a range (as a percentage of revenue) that is reasonable for multi -story apartment
buildings in urban environments considering also the operation and maintenance of the
retail space.
J
94- 198
.J
EXHIBIT 3.0
ESTIMATED PRICING AND ABSORPTION
OLYMPIA BUILDING
E
Use Mixed Use Development:
Retail (3,225 square feet)
Residential (64 Affordable Housing Units)
Eight 2/2 containing 664 square feet.
Sixteen 111 containing 552 to 594 square feet.
Forty studios containing 341 to 355 square feet.
Residential Amenities
Commercial Pricing
Residential Pricing
Absorption Period
Other Income
Note: Utility allowances are as follows:
Studio - $54
One -bedroom - $58
Two -bedroom - $66
Laundry rooms on 4th and 7th floors.
Kitchens with ranges, refrigerator and laminate cabinets.
Security system.
Commercial/Retail Rental Pricing:
Triple -net basis
Average of $50 per square foot for first five years.
15% increase for years six to ten.
10% increase for years eleven to fifteen.
CAM of $6.50 per square foot, 3% increase per year
Residential Rental Pricing without Utility Allowance (see note):
Eight 2/2 @ $500 per month,
Sixteen 1/1 @ $413 per month.
Twenty-seven studios @ $386 per month.
Thirteen studios @ $239 per month.
Rent increases at 3.0% per year .
5% vacancy rate.
Residential: Two months - August and September 1995,
including occupancy.
Laundry and cable T. V. at $10 per month per unit,
increasing at 3% per year.
Mixed Use Development:
Retail (3,664square feet)
Residential (79 Affordable Housing Units)
Seventy-two studios containing 325 to 400 square feet.
Seven 111 containing 590 square feet.
Small study/reference room on third floor.
Laundry on third floor.
Studios furnished with wall unit including "Murphy" bed,
shelving , drawers and computer networking capability.
Kitchenettes in all units.
Management will develop a leasing program for furnishings.
Commercial/Retail Rental Pricing:
Triple -net basis
Average of $74 per square foot at stabilization (1996).
4% increase per year.
First option given to existing tenants on a one-
year basis. Targeted new retailers include deli, drug
store, cafe, etc.
Lease terms vary depending on type of units with
longer lease terms available to most desirable retailers.
Residential Rental Pricing without Utility Allowance (see note):
Seventy-two studios @ $315 per month.
Seven 1/1 @ $335 per month.
Rent increases at 4.0% per year.
5% vacancy rate.
Residential: Three months - Beginning two months prior to
delivery of the first apartment in August 1995.
Application fees, laundry and late fees at $10 per month,
increasing at 4% per year.
City of Miami
Department of Off Street Parking
Page 12
DEVELOPMENT COST CHARACTERISTICS
Exhibit 4.0 on the following page summarizes development cost characteristics of
each of the submissions. With respect to site improvements and the anticipated
development schedule, the two proposers are essentially equal. The proposers'
estimates of construction costs are slightly different: $2,986,000 for Related and
$3,100,000 for Cornerstone. Related's construction costs include the removal of
asbestos and security while Cornerstone's estimates of construction costs do not
specifically delineate these costs. With this in mind, the higher construction costs
associated with the Cornerstone proposal may be attributed to the larger number of
residential units in the plan, (i.e., more bathrooms and kitchens) as well as the
addition of some unit amenities that are not included in the Related plan.
' Additionally, the two proposers' development costs differ with respect to
contingency, developer's overhead and developer's fee with these line items totaling
$1,211,800 for Related and $900,000 for Cornerstone.
} FINANCING STRATEGIES
Both Related and Cornerstone have proposed to finance redevelopment of the building
through a combination of HOME loans from the City of Miami and/or Dade County and
tax credits. The only real difference in strategies is that Related is anticipating taking
a out a bridge loan to finance development and operations during the construction
period. This loan would be guaranteed by Related and may be obtained given The
Related Company's reputation and involvement in the community, and its prior
relationship with financial institutions in Dade County. The financing strategies set
forth by both proposers are reasonable given the project's scope and character (i.e.,
affordable housing). Additionally, both proposers have demonstrated through letters
submitted in the proposals and prior successes, their abilities to obtain the financing
needed. Both Related and Cornerstone have contingency plans should the financing
sources described in the submissions fall short of expectations.
94- 198
EXHIBIT 4.0
DEVELOPMENT COST CHARACTERISTICS
OLYMPIA BUILDING
COMPARABLE ELEMENT
RELATED BUILDING ASSOCIATES, LTD.
OLYMPIA BUILDING PARTNERS, LTD.
Use
Mixed Use Development:
Mixed Use Development:
Retail (3,225 square feet)
Retail (3,664 square feet)
Residential (64 Affordable Housing Units)
Residential (79 Affordable Housing Units)
Eight 2/2
Seventy-two Studios
Sixteen 1/1
Seven 1/1
Forty Studios
Site Improvements
Building facade restoration and addition of exterior lighting.
Building infrastructure.
Redevelopment of 3rd thru 10th floors to accommodate
Aesthetic safety lighting.
residential use.
Treat block as an urban area; high quality paving.
Streetscape improvement; Royal Palm trees at entrances.
Create a design feature in pavement at Flagler St. & N.E. 2nd Ave.
Redevelopment of 3rd thru 10th floors to accommodate
residential use.
Estimated Development Costs
Construction costs $2,986,000
Construction costs $3,100,000
Payment to city 220,000
Payment to city 300,000
Professional fees 394,300
Professional fees 275,000
Permits and other fees 80,600
Permits and other fees 50,000
Taxes and insurance 25,000
Taxes and insurance 35,000
Inspections and surveys 54,300
Inspections and surveys 29,000
Finance fees, interest, tax credit fees 101,900
Finance fees, interest, tax credit fees 150,000
Marketing 25,000
Marketing 40,000
Miscellaneous 50,000
Miscellaneous 41,000
Contingency 370,200
Contingency 220,000
Developer's overhead 210,400
Developer's overhead 170,000
Developer's fee 631,200
Developer's fee 510,000
Total development costs $5,148,900
Total development costs $4,920,000
Development Schedule
20 months from proposal submission to occupancy in Sep-
20 months from Home Fund Application to occupancy in
tember 1995 including 9 months of construction from
August 1995 including 9 months of residential construc-
October 1994 thru June 1995.
tion from October 1994 thru June 1995 and 3 months
of retail construction from April thru June 1995.
City of Miami
Department of Off Street Parking
Page 14
Financing strategies for Related and Cornerstone are summarized in Exhibit 5.0 on the
following page.
LOW INCOME HOUSING TAX CREDIT COMPARISON
Exhibit 6.0, following the chart outlining the financial strategies of the two proposers,
summarizes the most pertinent points relative to Related's and Cornerstone's plans
to sell tax credits to assist in the financing of the redevelopment project. Related
anticipates obtaining a total of $2,181,832 from the sale of tax credits including
Historic Tax Credits of $963,516 at 80 percent of value yielding $770,812 and LIHTC
of $313,516 per year for ten years at 45 percent of value yielding $1,411,020.
Cornerstone anticipates obtaining $2,400,000 for the sale of tax credits representing
' Historic Tax Credits of $650,000 and LIHTC of $1,770,000. The difference in the
proposers' anticipated funds from tax credits is relatively small (less than $250,000),
and may be attributed to a number of factors including the variances between the two
plans with respect to total development costs, construction costs, number and type
of residential uses, tax credit sales value and other considerations. There is
insufficient data in the proposals to fully ascertain which variables individually or in
combination are most accountable for the actual difference. Each of the proposer's
presented commitment letters within their submissions that document the interest by
a qualified party to purchase the tax credits. While there is a discrepancy between
the Related commitment letter and the proposal with respect to the actual amount of
e funds forthcoming from the sale of tax credits, the difference is insignificant and does
not appear to invalidate the interest in purchasing tax credits.
It is important to note that, while the two plans vary with respect to some
characteristics that are critical to the qualification of the residential units for tax credit
purposes, we did not identify any elements that would preclude the proposer's from
applying for and having reasonable prospects for receiving the tax credits as stated
in the submissions. However, since the selected proposer would be competing with
other projects seeking credit allocations, there is no way of predicting that any
application for the Olympia Building will meet with success. Both Related and
Cornerstone have priced the residential units at a level required by Section 42 of the
Internal Revenue Code.
94- 198
EXHIBIT 5.0
FINANCING STRATEGIES
OLYMPIA BUILDING
FUNDING SOURCES
RELATED BUILDING ASSOCIATES, LTD.
OLYMPIA BUILDING PARTNERS, LTD.
City of Miami
S1,000,000 to $1,500,000 HOME loan at 0%.
$2,500,000 HOME loan at 5%.
Loan is self amortizing for 10 years, and forgiven in
increments.
Dade County
$1,500,000 HOME loan at Applicable Federal Rate.
N/AP
Tax Credits (Equity Investment)
Historic Tax Credits: $ 770,812
Historic Tax Credits: $ 650,000
Low Income Housing Tax Credit: $ 1,411,020
Low Income Housing Tax Credit: $ 1,770,000
Total Tax Credits: $ 2,181,832
Total Tax Credits: $ 2,420,000
Bank Loans
Bridge Loan of $457,253 at prime + 1.0%
NIAP
Alternative Financing
State of Florida Loan of up to $500,000 if the City cannot
To replace or supplement shortfalls in the above funds:
provide $1,500,000.
City of Miami HOME funds, Block Grant Program
City of Miami Community Development Funds
- Dade County Home Funds
Dade County Hurricane Andrew Disaster Relief Funds
Dade County Surtax
State of Florida - Hurricane Andrew Relief Funds
Dade County Community Development Block Grant
Other Financing Characteristics
After construction is complete, the government loans will be
N/AV
rolled over into a permanent loan and the equity investment
will repay the bank loan and the developer's fees.
N/AP - Not Applicable
N/AV - Not Available
00
00
EXHIBIT 6.0
TAX CREDIT COMPARISON
OLYMPIA BUILDING
COMPARABLE ELEMENT RELATED BUILDING ASSOCIATES, LTD.
Amount of Tax Credits Total of $2,181,832 from the following:
Sale of Historic Tax Credits of $963,516 @ 80% of value
or$770,812.
Sale of $313,560 LIHTC per year for 10 years @ 45°% of
value of $1,411,020.
Tenant Income Composition 13 units (20%) set aside at rents affordable to persons
earning 40°% of the County median income and the
remaining units at rents affordable to 60 % of the
County median.
Gross rents (inclusive of utility allowance) do not
exceed 30°% of income standard.
Other Tenant Characteristics ' 8 Two -bedroom units are expected to attract two unrelated
individuals who wish to share an apartment.
Lease Term N 40 years.
Development Costs Total development cost: $5,148,900
Construction cost/capital improvements: $2,986,000
Prior Experience/Success In The Related Group of Florida has substantial experience in
Obtaining Tax Credits obtaining and utilizing LIHTC and Historic Rehabilitation
Tax Credits in developing affordable housing. Mr. Cohen,
Vice President of the firm and Director of Affordable
Housing has successfully syndicated Federal LIHTC and
secured LIHTC allocations for 8 projects raising tax credit
equity of $25,000,000.
Existing commitment from Related Capital Company to
purchase LIHTC.
Projected Rent and Operating ' Rent increase: 3.0°%
Expense Increases Operating expense increase: 5.0%
OLYMPIA BUILDING PARTNERS,
Total of $2,420,000 from the following:
Sale of Historic Tax Credits of 6650,000.
Sale of LIHTC of $1,770,000.
100°% of the units set aside at rents affordable to persons
earning 60°% of the County median income.
Gross rents (inclusive of utility allowance) do not
exceed 30°% of income standard.
No two -bedroom units, hence no roommates i.e., unrelated
Individuals living together.
40 years with an option to renew for an additional 10 years.
Total development cost: $4,920,000
Construction cost/capital improvements. $3,100,000
Stuart Meyers, while at Related Companies of Florida, was
responsible for completion of over 2,500 units ($100
million), all of which were financed utilizing the benefits of
Federal Low Income Housing Tax Credits. Cornerstone
currently has 3 affordable housing projects (459 units) in
development with existing allocations of LIHTC in place.
Existing commitment from The Richman Group, Inc. to
purchase LIHTC.
Rent increase: 4.0°%
Operating expense increase: 3.5%
City of Miami
Department of Off Street Parking
Page 17
Additionally, we could not find anything in the federal law that would preclude units
occupied by unrelated individuals from qualifying for tax credits so long as they would
otherwise qualify. The statute also provides special exceptions for qualifying students
that specifically allow a unit to be occupied by a qualified student (narrowly defined
in the statute) to avoid qualification under the income limitations. Finally, rent and
expense increases are subject to federal and state review for units to continue to
obtain LIHTC status. However, properly substantiated and documented increases may
° be approved, and given the explanation provided by Cornerstone in this regard, we do
not foresee any problems with the proposer qualifying the units for tax credit
application. It should also be noted that even if Cornerstone's projections are recast
j to reflect a three percent increase in rent and a five percent increase in expenses, the
project would continue to perform as a feasible venture.
Most importantly, both Related and Cornerstone have extensive experience in
obtaining and utilizing Historic Tax Credits and LIHTC in developing affordable
housing. One of the principals of Related has successfully syndicated federal LIHTC
and secured allocations for eight projects raising tax credit equity of $25,000,000.
Similarly, one of the principals of Cornerstone, while at another company, was
responsible for completion of over 2,500 units valued at $100 million, all of which
were financed utilizing the benefits of LIHTC. Cornerstone currently has three
affordable housing projects containing 459 units in development with existing
allocations of LIHTC in place.
COMPARABLE RETURN TO THE CITY
Exhibit 7.0 on the following page summarizes the return to the City under the two
plans. Until this point in our analysis of the proposals, there have been relatively few
and narrow differences between the proposers and their ability to meet the City's
criteria. Under the Cornerstone plan, the return to the City of $10.2 million is
estimated at more than double the return to the City under the Related plan.
Assuming the absence of ad valorem taxes, the return to the City is estimated at
4 approximately $6.0 million and $13.0 million for Related and Cornerstone,
respectively. The large variance in the return to the City under the two plans may be
attributed to the following:
s Cornerstone proposes to develop and rent 79 units while Related proposes to
develop and rent 64 units. While the rent levels proposed in the Cornerstone
plan are lower, these residential units effectively produce approximately
$11,000 more in gross income per year.
4 OJ4- 198
I
EXHIBIT 7.0
COMPARABLE RETURN TO THE CITY
OLYMPIA BUILDING
RETURN ISSUES
RELATED BUILDING ASSOCIATES, LTD.
OLYMPIA BUILDING PARTNERS, LTD.
Lease Term
Forty years with option for additional ten years.
Forty years with option for additional ten years.
Dollar Value and Timing of
$2,986,000 over nine months from October 1994 to June 1995.
$3,100.000 over nine months from October 1994 to June 1995.
Capital improvements
Minimum Guaranteed Payment
$150,000 to $220,000 from the development budget. $70,000
- $300,000 guaranteed initial lump sum payment to be paid upon
during Construction Period
difference represents salary associated with elevator operator.
closing estimated for 10131/94.
$100,000 from commercial and residential rentals.
Annual Lease Payment with
Greater of the following:
Greater of the following:
Real Estate Tax Obligation
Years 1.5 Percentage of Effective Gross Income: 15%
Years 1.4 Percentage of Effective Gross Income: 25%
Minimum Guaranteed Rent : $100,000
Minimum Guaranteed Rent : $125.000
Percentage of Cash Flow: 60%
Years 5-40 Percentage of Effective Gross Income: 25%
Years 6-30 Percentage of Effective Gross Income: 10%
Minimum Guaranteed Rent : $26,000
Minimum Guaranteed Rent : 4100,000
Percentage of Cash Flow: 60%
Years 31.40 Percentage of Effective Gross Income: 5%
Minimum Guaranteed Rent : 1100,000
Percentage of Cash Flow: 60%
Annual Lease Payment without
Greater of the following:
Greater of the following:
Real Estate Tex Obligation
Years 1.5 Percentage of Effective Gross Income: 20%
Years 1.4 Percentage of Effective Gross Income: 32%
Minimum Guaranteed Rent: $125,000
Minimum Guaranteed Rent: $150,000
Percentage of Cash Flow: 60%
Years 5-40 Percentage of Effective Gross Income: 32%
Years 6.30 Percentage of Effective Gross Income: 15%
Minimum Guaranteed Rent : $50,000
Minimum Guaranteed Rent : $125,000
Percentage of Cash Flow: 60%
Years 31-40 Percentage of Effective Gross Income: 10%
Minimum Guaranteed Rent : 4125,000
Percentage of Cash Flow: 60%
Payment to City Based on
Estimates of Cash Flow
With Real Without Reel
With Reel Estate Without Real Estate
from Operations:
Estate Taxes Estate Taxes
Taxes (2) Taxes 121
Construction Year 11)
$324.892 4345,000
$300,000 $300,000
Years 1 - 5
500,000 625,000
748,351 957,888
Years 6 - 10
500,000 625,000
910,484 1,165,420
Years 11 • 40
3,124,319 4,449,119
8,277,380 10,595,034
Total Payment
$4,449,211 $6,044,119
$10,236,215 $13,018,342
(1) Under the Related plan, the return to the City during the construction year represents $220,000 plus 60% of cash flow during that period, and includes the salary of on elevator
operator. It Is proposed that this amount be paid over the period. Under the Cornerstone plan, the return to the City is expected to be paid in one lump sum at the time of closing.
(2) Since the Olympia Building Partners, Ltd. proposal only provided operating proforma for Years 1 thru 20, the payments to the City for years 21 thru 40 were calculated based on
the payment in Year 20 multiplied by 20 .
4
94- 198
City of Miami
Department of Off Street Parking
Page 19
• Cornerstone plans to lease 3,664 square feet of retail space at $74 per square
foot compared to 3,225 square feet at 56.50 per square foot (including CAM).
The lower amount of square feet available under the Related plan is most likely
attributable to the difference in renovation plans, and while the variance
appears insignificant, it alone accounts for over $32,000 in gross income per
year. The greater gross leasable area coupled with the higher retail lease rate
accounts for a total of $88,900 more in annual gross income under the
Cornerstone proposal.
• Under the Cornerstone plan, revenue is estimated to increase at four percent
annually versus three percent per year under the Related plan.
• Under the Cornerstone proposal, the minimum guarantee as a percentage of
effective gross income is 25 percent with real estate taxes and 32 percent of
effective gross income without real estate taxes. Alternatively, under the
Related proposal these percentages are 15 and 20 percent respectively, for
years one through five, decreasing to ten percent and 15 percent in years six
through 30, and 5 percent and ten percent in years 31 through 40. In fact,
under the Related proposal, the anticipated return to the City is not greater than
the minimum guaranteed rent payments of $100,000 with real estate taxes or
$125,000 without real estate taxes until the third decade of operations.
Moreover, under the Related proposal, the maximum payment to the City in
these latter years is 60 percent of cash flow after debt service and income
taxes rather than a percentage of gross income.
To test the sensitivity of the return to the City under the Cornerstone plan to
reductions in the retail lease rate and the annual escalation of income, we recast
Cornerstone's cash flows assuming a retail lease rate of $65 per square foot and an
annual revenue increase of three percent for years one through 20, and zero percent
for years 21 through 40. Under this scenario, the return to the City under the
Cornerstone plan would still be higher than under the Related plan. Moreover, if the
first year's revenue is reduced to reflect a payment to the City of $100,000 through
an increase in the vacancy factor to 27.5 percent, the return to the City under the
Cornerstone plan would also be greater than under the Related plan. This implies that
the Related plan would only yield a greater return to the City if no meaningful
residential market for affordable housing in the CBD materialized. It should be noted
that the return to the City on a net present value basis is also greater under the
Cornerstone plan than under the Related plan.
Yr�
94- 198
NO
"I
City of Miami
Department of Off Street Parking
Page 20
RETURN TO PROPOSERS AND NOT -FOR -PROFIT ENTITIES
Exhibit 8.0 summarizes the return to the proposers and their not -for -profit entities.
It should be noted that, since Related and Cornerstone represent joint venture
partnerships between The Related Companies and the CDC and The Cornerstone
Group and DEEDCO, respectively, the return to the not -for profit entities is included
in the return to the proposer. Evaluation of this data reveals that both not -for -profit
entities receive significant monies from the joint venture partnership. Since the
Cornerstone submission only provided 20 years of prospective operating data and
Related provided 40 years, it is not appropriate to compare the returns to the CDC and
DEEDCO to each other. It should be noted that in the Related submission, the cash
flows indicate that the CDC will receive an annual management fee of 1.0 percent of
effective gross income for 40 years, which the text of the document indicated the
receipt of a management fee by the CDC for 15 years.
CONCLUSION
Based on our analysis of the proposal submitted by Related and Cornerstone, we
believe that there are relatively few and insignificant differences between the two that
could potentially present issues related to criteria established by the City with the
exception of the anticipated return to the City. With respect to the return to the City,
it is clear that the Cornerstone presents the best alternative. Accordingly, based on
the criteria, we conclude that the Cornerstone proposal should be ranked first and the
Related proposal second.
February 24, 1994
4
94- 198
M
EXHIBIT 8.0
RETURN TO PROPOSERS AND NOT -FOR -PROFIT ENTITIES
OLYMPIA BUILDING
RETURN 14SUES
RELATED BUILDING ASSOCIATES, LTD. (1)
OLYMPIA BUILDING PARTNERS, LTD, (2)
f`.iM�1 y
With Taxes Without Taxes
With Texts Without Taxes
Cash Flow after Payments
to city and Debt Service
/1,351,720
/3,110,468 I
/2,298,129
12,486,582
$631.176
$510,000
Developer Foos
Developers Overhead
$ 210, 392
$170,000
Property Management Fees
$1,862,230
$987,435
Representative of 5.5% of effective gross income
Representative of 6% of eflecctive gross income
Other
Annual management advisory fee of one percent of effective
gross income totaling $338,586 over 40 operating years
$100,000 consulting fee during construction period
One -quarter of the tour percent interest paid for public sector
financing equating to $385,099 over the forty year operating period
11,000,000 representative of a two percent compounded
accrual which is converted to principal and repaid
between years 35 and 40
CDC (1)
DEEDCO W
x`1{IOt 10!'�lfial7t a,tita.y `°.
v
Capture of Cash Flow Retained by the
Developer Limited Partnership (3)
Distribution of 30% of Cash Row
$67,586
/ 155,528
$344,719
$372,987�
$126, 235
Representative of 20% of the developer's fee
Annual management advisory fee of one percent of effective
gross income totaling $338,586 over 40 operating years
$100,000 consulting fee during construction period
One -quarter of the four percent interest paid for public sector
financing equating to $385,099 over the forty year operating period
It 1,000,000 representative of a two percent compounded
accrual which is convened to principal and repaid
between years 35 and 40
(1) Operating years one through forty.
12) Operating years one through twenty.
(3) Representative of five percent o1 total cash flow lien percent
&hers of fifty percent cash flow allocation to General Partners).
i `i
94- 198