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Home My WebLink AboutR-87-0993J-87-872 11/16/87 RESOLUTION NO. S 7 993 A RESOLUTION AUTHORIZING THE CITY MANAGER TO AMEND THE MEMORANDUM OF AGREEMENT DATED SEPTEMBER 13, 1982, BETWEEN THE CITY OF MIAMI AND THE MARTIN LUTHER KING ECONOMIC DEVELOPMENT CORPORATION, INC. (MLKEDC) DEFERRING IT YEARLY PRINCIPAL AND INTEREST PAYMENTS IN THE AMOUNT OF THIRTY-THREE THOUSAND ONE HUNDRED FORTY-EIGHT DOLLARS ($33,148) FOR A PERIOD OF THREE (3) YEARS. WHEREAS, Martin Luther King Economic Development Corporation, Inc_. (MLKEDC) entered into a contract with the City of Miami and the State of Florida, Department of Veteran and Community Affairs to coordinate economic development activities within the Model City area; and WHEREAS, the City of Miami mandated Martin Luther King Economic Development Corporation, Inc. to undertake, as part of its work program, an economic development project within the Edison Center Business District; and WHEREAS, Martin Luther King Economic Development Corporation, Inc. purchased the Lincoln Square Office Complex in the Edison Center Business District; and WHEREAS, Martin Luther King Economic Development Corporation, Inc. is experiencing financial difficulties and requested assistance from the City and County to maintain the viability of the Lincoln Square Office Complex. NOW THEREFORE BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The City Commission hereby authorizes the City Manager to amend the memorandum of agreement dated September 13, 1982 between the City of Miami and the Martin Luther King Economic Development Corporation, Inc. to defer the yearly CITY C0141AISSION MEETING OF NOV 19 19�87 RESOLUTION No. 137•Q` 911 principal and interest payments in the amount of thirty-three thousand one hundred forty-eight dollars ($33,148) for a period of three years. PASSED AND ADOPTED this 19th 1967. ATTE T : M TY HIRAI CITY CLERK day of November XAVIER L. SU6AEZ MAYOR COMMUNITY DEVELOPMENT REVIEW AND APPROVAL: FRAN CA aAA,DIRECTOR DEPARTMENT OF COMMUNITY DEVELOPMENT PREPARED AND APPROVED BY: ROBERT F. CLARK CHIEF DEPUTY CITY ATTORNEY APPROVED XS 10 FORM AND CORRECTNESS: glA (A. DOUG TY ATTORNE-Y /gjd RTY I CITY OF MIAMI. FLORIDA 13 INTER -OFFICE MEMORANDUM TO. Honorable Mayor and Members DATE: NOV �} 1981 nLt: of the City Commission SUBJECT: Resolution authorizing the City r` Manager to execute an amendment to the September 13,1982 Agree- ment with Martin Luther King - FROM: Cesar H. Odio REFERENCES: Economic Development Corporation City Manager Development Corporation — ENCLoSUREs:Lincoln Square Office Complex RECOMMENDATION: It is respectfully recommended that the City Commission approve the attached resolution authorizing the City Manager to amend in a form acceptable to the City Manager, the Memorandum of Agreement dated September 13, 1982 between the City of Miami and the Martin Luther King Economic Development Corporation, Inc. (MLKEDC) to defer the yearly principal and interest payments in the amount of thirty-three thousand one hundred .forty-eight dollars ($33,148) for a period of three (3) years beginning October, 1987 for the purpose of assisting MLKEDC in maintaining the viability of the Lincoln Square Office Complex (LSOC). BACKGROUND: The Department of Community Development has analyzed the need to execute the attached amendment to the existing City agreement with the Martin Luther King Economic Development Corporation, Inc. The Miami City Commission passed Resolution No. 82-601 authorizing a contract agreement between the City and MLKEDC. This resolution further authorized the allocation of four hundred thousand dollars ($400,000) to MLKEDC from the Eighth (8th) Year Community Development Block Grant Contingency Fund to purchase the LSOC in the Edison Center Business District. In October, 1982, MLKEDC purchased the LSOC. Financing for this building was as follows: MORTGAGE First Mortgage Second Mortgage Third Mortgage Fourth Mortgage MORTGAGOR Bank of Miami Dade County Services by Southeast Mortgage Company Dade County Services by Southeast Mortgage Company City of Miami Total AMOUNT $250,000 182,788 69,713 400,000 $902.501 /3 -1 S -993 Honorable Mayor and Members of the City Commission Page 2 The terms of the aforementioned loan given to MLKEDC included execution of a Promissory Note in the amount of the loan four - hundred thousand dollars ($400,000) which was evidenced by a mortgage recorded in the public records of Dade County, Florida. The loan was given at an annual interest rate of three percent (3%) for a twenty (20) year period. The contract stipulates that repayment by MLKEDC during the first five (5) years shall be in the amount of twelve thousand dollars ($12,000), representing interest only. The sixth (6th) through twentieth (20th) years respectively, shall be in the amount of thirty-three thousand one hundred forty-eight dollars ($33,148) representing interest and principal due. Annual payments shall be prorated and due on a quarterly basis. Unforeseen financial problems within the MLKEDC, including an un- projected increase in the insurance coverage on the Lincoln Square Office Complex Building from five thousand six hundred nine dollars ($5,609) in 1985 to twenty-four thousand three hundred twenty-nine dollars ($24,329) in 1986, have substantially impacted MLKEDC's ability to financially operate and maintain the LSOC. The deferment of principal and interest will be added to the end of the mortgage note. In addition to MLKEDC payments to the City for its loan, below are the other mortgages in which MLKEDC has responsibility for: MORTGAGE First Mortgage Second and Third Mortgage Fourth Mortgage (City) Total Approximate monthly payments AMOUNT $2,800 - $3,200 (fluctuating, not fixed) 1,658 1,000 $5,400 - $6,000 To -date, the Lincoln Square Office Complex is eighty percent (80%) rented. MLKEDC has successfully worked in developing.and implementing neighborhood commercial activities in the Model Cities/Edison Center Business District. One of its major accomplishments has been the acquisition of the LSOC which includes major tenants such as Miami -Dade Water A Sewer, Florida Power and Light Company and Miami -Dade Community College. 87`993 Honorable Mayor and Members of the City Commission Page 3 Since MLKEDC has a significant investment in the LSOC, MLKEDC has requested assistance from both the City and County. The following work/plan has been designed in order to assist MLKEDC in maintaining the viability of the LSOC in the Edison Center Business District: a) The City will provide a three (3) year moratorium on principal and interest. b) The City of Miami will provide technical assistance as requested by the MLKEDC. c) Establish and maintain a building reserve account setting aside at least twenty percent (20%) of monthly gross revenues. d) MLKEDC"s Board of Directors will approve all expenditures related to the LSOC. e) MLKEDC shall provide quarterly fiscal management reports to the City of Miami. f) An informal committee will be established with representatives from City of Miami, Metropolitan Dade County and MLKEDC to review future leases and approve planned expenditures. g) The City in conjunction with Metropolitan Dadc County will assist MLKEDC in aggressively marketing the LSOC. h) Metropo.litan Dade County will provide a loan not to exceed sixty—six thousand dollars ($66,000) for maintenance, amenities and working capital. 3 LKE DCO 0. MARTIN i.11'I'IIIiR KING ECONOMIC 1)I:V1:1.()1'MENTCORI'ORA'110N . 6116 N.W. 7:h Avcnuc. Minna, norida 31127, Tcicphunc: (105) 737.7652 October 19, 1987 Mr. Frank Castenada City of Miami Department of Community Development Miami, Florida 33136 RE: LETTER DATED.9/23/87 Ernest Maertin Office; Department of Economic Development Dear Mr. Castenada: This letter is in response to the Martin Luther King Economic Development Corporation, Lincoln Square Office Complex -Martin Luther King Business Center. In response to your request to assist Martin Luther King Economic Development Corporation, we have problems with your courses of actions. A) "The City will provide a two (2) year moratorium on principal and interest." Response: We are requesting three years which the county has already promised. `V "The City of Miami will review and approve all future leases for tenants in the Lincoln Square Office Complex. Response: We don't think that this should be a function of the City or County, but we will take technical assistance from both whenever we deem it necessary. C) Establish and maintain a Building Reserve Account. No expenditures from this account will be made without City and/or County approv*A,..- Response: We agree with establishing a reserve account and we would like for this reserve account to be at a maximum of $40,000.00. This we know is essential for the well being of the organization. D) The City of Miami in conjunction with Metropolitan Dade County will review and approve all expenditures relating to the Lincoln Square Office Complex. Response: This is unrealistic at this time. This would be a form of management and we don't think the City or County is in the business of managing community property. Our Board of Directors will approve all expenditures 87f -993 Continued D) Response (Continued) relating to the Lincoln Square Office Complex. E) Set up an accounting system for MLKEDCO in conjunction with the City's Department of Internal Audits and Reviews in conjunction with the University of Miami's Entrepreneurial Institute. Responses We have hired a MBA and our whole accounting system will be computerized. We appreciate the City's Internal Auditing Department for assistance, and in the future we will continue to ask for it. We are also members of the Entrepreneurial Institute. We feel our system is adequate, but we will improve its present capacity. F) MLKEDCO shall provide quarterly fiscal management reports to the City of Miami%*.' Response: The Board of Directors, City of Miami and Dade County will receive a quarterly fiscal management report. G) Monthly meetings will be held with City, County officials, MLKEDCO board members and any other representatives to review thdJiscal and management progress of the building. Response: We don't think the City or County has the time to have monthly meeting witir our Board to deal with fiscal management problems. We will take care of these things ourselves. We receive assistance from Greater Miami United, and the Entreprenuurial Institute. H) The City in conjunction with Metropolitan Dade County will assist MLKV= in aggressively marketing the Lincoln Square Office Complex. Response: We have no problems with marketing assistance. The Building is 98Z occupied (leased). We have the best leasing record in the area. If the City or County has agencies that want to occupy the available space, now that service will be highly appreciated. Sincer Samuel Mason APPredent/C.E.O. Mary W. hnson Chairman of Boar cc: Board of Directors Ernest Martin