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Home My WebLink AboutM-88-0160.4~ ~ ~ O ~t\ T7iE ROUSE COMPANY February 16, 1988 Mr. Albert Armada Property & Lease'Manager General Services Administration Dept. 1390 N. N. 20th Street Miami, FL 33142 Dear Mr. Armada: Enclosed please find the 1987 Calculations of the Retail Parcel and Garage Parcel Ground Rents and the verification statement signed by an officer of • the company. Should you have any questions in this regard, please do not hesitate to call me. Sincerely, ~~~ y~ Mark B. Greco Senior Group Controller (301) 964-3401 MBG:nsn Enclosure GG ~~ ~~ /d~Ger'J~ /~u~er ~~ncc~~ 10215 L~ple PafuxeM Perkrvay Columbia. Maryland 21044.3456 ~ ~!1 V o . 62-/ .~.. ••. ~8~V0. February 16, 1988 T0: THE CITY OF MIAMI I have examined the attached calculations of the Retail Parcel Ground Rent and Garage Parcel Ground Rents for the period Apr i1 8, 1987 through December 31, 1987. ~ examination included such tests of the company's books and records as considered necessary under the circumstances. Accordingly, I conclude that the - attached reports present fairly, the rentals due for the aforementioned period. • s J y P. tera Vi President and Controller Rouse-Miami, Inc. JPM:nsn Attachment __--- - -- r?¢3-160: ~O~"~ r 4 ~~ ~e-iso. BAISIDE CENTER LIMITED PARTNERSHIP ' Calculation of Retail Parcel Ground Rents For the Period April 8, 1987 to December 31, 1987 Operating Revenues and Other Payments Operating Contributions Operating Income less: Operating Expenses: (1) Other Operating Expenses (2) On-Site Management Costs ' (3) Management Costs (4) Minimum Base Rental (Pro-rated) (5) Area A-5 Minimum Rental Debt Service Payments lOX of Developers Equity Investment Net Income Available for Oistribution Annual Basic Rental at the greater of: ~ 4,943,278 1,940,631 f 6,883,909 X3,247,487 252,428 240,937 237,431 -0- s 3,978,283 4,215,830 430,065 s 1 740 269) 35x of Net Income Available for Distribution Or Minimum Base Rental (Pro-rated) _ -0- = 237,431 ~g-iso: ~~-~/ ~~: ~~-sso. December 16, 1987 The Honorable Xavier Suarez Mayor, City of Miami City Hall 3500 Pan American Drive Miami, Florida 33133 Dear Mayor Suarez: - ~~ . -- ~_•.i.'_,.. • • r+. IL• ii 1VVV V •~~ The City of Miami entered into an agreement with The Rouse Co. to develop a portion of City-owned bayfront property into a specialty shopping center, which is known today as Bayside. One of the major concerns of the Bayside Agreement was the participation of minorities in all phases of Bayside; specifically, as owners, builders, providers of professional services, tenants and employees. With regard to leasing or the tenant component, the Minority Participation Plan established a SOX goal for minority tenants. To achieve this goal, The Rouse Company agreed to do the following: 1) Hold high volume stores off the market for one year and make them available to minority tenants first; 2) Identify and, as appropriate, stimulate•joint ventures between prospective minority tenants and qualified and experienced non-minority business persons or entities; 3) Provide communications and outreach programs to the minority communities; 4) Implement a financing program and enlist the participation of local banks, local businesses, the SBA and local, state and federal business development assistance agencies and; S) Provide cash grants as tenant allowances to fund a portion of the start-up, inventory, leasehold improvement and capital equipment costa. Zt should be noted that the amount of the cash grant required by the Rouse Company was $4 million which was supplemented by $1 million each from the City of Miami and Dade County in the form of low interest loans, thereby increasing the minority assistance fund to $6 million. _ The City of Miami's Minority Participation Plan for Bayside is unique and the first of its kind in the country. Unlike previous governmental plans -_ which required employment provisions far minorities only, the Bayside plan required minority participation at all levels -from ownership to employment. Furthermore, it is the only plan that provided financial and _ technical assistance to minorities to ensure their successful entry into the marketplace. ~~-/ ~8-ssa. The success of the Bayside Minority Plan is demonstrated by the fact that fifty-three (53) minorities (22 Black, 30 Latiri, and 1 other) are tenants at Bayside. Previous plans have been good in its written intentions, but have failed to achieve the desired results for many reasons. Some of those reasons are: 1. Lack of commitment by decision-makers. 2. Lack of follow-up by decision-makers. 3. Lack of adequate capitalization. 4. Lack of technical and financial assistance prior to and during the program. Many of the past minority programs have resulted in failed businesses as a result of the above reasons. And after many such unsuccessful attempts, frustration, mistrust, and lack of enthusiasm increases on both sides - from those who are trying to help the disadvantaged and from those who need the help. The Bayside Minority Program has overcome many of these obstacles to success. The primary reasons for this success was the commitment on the part of the City of Miami, The Rouse Co. and the business community. The other reason for the success vas the provision of technical and financial assistance to minorities who were interested in becoming tenants at Bayside. ~" However, no provisions have been made to ensure the continued success of .. minorities after they become tenants at Bayside, which has been one of the faults of previous minority programs. The Miami Bayside Foundation proposes to use a portion of its limited funds, _ which is $100,000 per year, to provide assistance to the largest and most _ successful minority entrepreneurial effort to date - the minority tenants at Bayside. The Foundation feels that this may be the last significant chance for minorities to participate in the economic mainstream of Miami and that every effort should be made to guarantee their continued success and maintain their participation at Bayside. Specifically, The Foundation's _ position is as follows: 1. Minority tenants at Bayside are unique and have unique problems. 2. Minority tenants need an independent forum to discuss and resolve problems that are unique to their survival. 3. Minority tenants need a support system that will assist them in resolving their problems. 4. Minority tenants need an advocate to ensure their continued participation at Bayside similar to the advocacy that existed to permit their initial participation at Bayside. 5. Minority tenants need technical assistance such as accounting, financial management, marketing, merchandising and advertising. ~8--iso - ~ ~„ ~~ 6. Minority tenants need financial assistance in the form of working capital. 7. Failures of past minority programs can be avoided at Bayside if ongoing support (financial, technical and advocacy) is made available. A meeting was held with Bayside minority tenants and trustees of The Foundation to allow the tenants to share their experiences at Bayside as well as to inform the trustees about the type of assistance they need to continue their success. The meeting revealed that the minority tenants were concerned about their survival and making a profit. They felt that the use of The Foundation's funds for a technical assistance program to assist minorities is needed and appreciated. The discussion with the minority tenants highlighted the need for various types of assistance to ensure their success as perceived by them. It also highlighted the need for a forum to discuss problems that are unique to them as well as some problems that are applicable to other tenants at Bayside. The need for an independent forum was revealed by one of the minority tenants who conveyed a story about individual efforts to resolve problems without satisfaction. He felt that if they acted as a group to resolve common problems, they would be more effective in bringing about solutions to same. He also felt that a forum would permit minority tenants to share and learn from each other's problems and solutions to same. The Foundation proposes to•implement a technical assistance program for minority tenants at Bayside. The program will be designed to provide minority tenants with timely business information to assist them in managing their businesses successfully. Minority tenants who need the service will undergo a Key Factory Analysis which is designed to measure business performance and compare that performance to pro3ected performance, past performance and industry standards and industry averages. These key factor analyses will be used to determine whether the business is doing well or experiencing problems that require corrective action. Specifically, it is proposed that the following technical services be offered to the minority tenants at Bayside: 1. Basic accounting services (recording of entities transactions) 2. Preparation of formal financial statements (balance sheet, profit/loss, and statement of changes in financial position) 3. Set up of proper accounting system (including internal accounting control systems) 4. Sales, payroll and income tax preparation and consultation S. Development of business plan 3 ~8-isa • 6. Consultation with regard to: a) Cash and working capital management b) Inventory management c) Sales and marketing strategies d) Budgeting and capital expenditure requirements The cost of such a technical assistance program will depend on the number of minority tenants that need technical assistance and the extent of that need. It is estimated that 30X (15) of the 50 minority tenants will require some -~ form of technical assistance. However, since many of the minority tenants are first-time entrepreneurs, it can be assumed that more will need some technical assistance and may elect to seek such service once it becomes available. i ~ For the purpose of developing a coat estimate for a technical assistance ' program, it is assumed that 15 minority tenants will require assistance. ~ Outlined below is a cost estimate to provide technical assistance to fifteen (15) minority tenants by service on month and annual bases: Est. Est. Est. - Monthly Total Annual Cost/Tenant Monthly Cost Service 1 Basic Accounting Services $ 275 $4,125 $ 49,500 Service 2 Preparation of Financial Stmts. 500 (1) NA 30,000 Service 3 Establish Proper Accounting System 1,500 NA 22,500 Service 4 Sales, Payroll & Income Tax Prep. 65 975 11,700 Service 5 Development of Business Plan 2,500 (2) NA 30,000 Service 6 Cash Mgmt., Inventory Mgmt, Sales 300 4,500 54,000 ~& Mktg. Strategies, Budgeting and Capital Expend. Total Projected Cost $197,700 Out-of-Pocket Costs 2,300 Total Projected Cost $200,000 Assume tenants pay 1/3 of cost (66,000)(3) Administration 40,000 Total capital requirement of The Foundation $174,000 (1) Quaterly (2) One-time charge (3) Average cost to tenant is approximately $4,400. Cost to tenants will be based on need and ability to pay. The minimum cost to tenants is 1/3 of the total cost. 9 `38-1;0 -- -:~- ~~ The total cost of the program is $200,000 plus administratrion with the tenant contributing $66,900 (1/3) leaving a balance of $174,000 to be financed. The Foundation proposes to finance $58,000 of~ this amount and requests that the City of Miami contribute $116,000 toward the Minority Technical Assistance Program. The program needs to be implemented immediately as~demonstrated by the closing of two (2) minority operations at Bayside. The City of Miami's Minority Program at Bayside is a laudable program and The Foundation wishes to assist the City in continuing its success. Therefore, The Foundation requests your support of this worthwhile and necessary program to assist minority tenants at Bayside. Because of the urgency of this matter, The Foundation also requests that the City Commissian act upon this request as soon as possible. Sincerely Eduar Padron, Ph. D. Chas. i T. Willard Fair Vice~hairman cc: Mr. Cesar Odio Gx5 ~9-ib0