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HomeMy WebLinkAboutR-87-0732f J-87-4 92 6/3/87 RESOLUTION NO. , A RESOLUTION ArrEPTING (IN PRINrIPL.E) THE RErOMMENDATION OF THE rITY MANAj R AND THE OFF --STREET PARK114G i3OAFD TJ ArrEPT THE PROPOSAL. SUBMITTED BY FL.AGI.ER LANDMARK ASSOCIATES, INr. FOR THE: PLANNING AND DESIGN, CONSTRUCTION, LEASING AND MANAGEMENT INrL.UDING THE RENOVATION AND RESTORATION OF THE OL.YMPIA BUILDING/ GUSMAN CULTURAL CENTER AS A UNIFIFD DEVELOPMENT PROJECT; AND AUTHORIZING THE rITY MANAGER AND THE rITY ATTORNEY IN CONJUNCTION WITH THE DEPARTMENT OF OFF-STREET PARKING TO NEGOTIATE A CONTRACT WITH FL.AGLER LANDMARK ASSOCIATES, IMPLEMENTING SAID PROPOSAL.; AND FURTHER DIRECTING THE rITY MANAGER AND THE DEPARTMENT OF OFF- STREET PARKING TO PRESENT THE NEGOTIATED CONTRArT TO THE CITY COMMISSION AS SOON AS PRACTICABLE FOR CONSIDERATION AND APPROVAL. BY THE CITY COMMISSION PRIOR TO THE EXECUTION THEREOF. WHEREAS, in 1985, philanthropist Maurice Gusman deeded Gusrran Center for the Performing Arts and the Olyrr.pia Building to the City of Miami with a deed restriction that assigned the management responsibility to the Department of Off -Street Parking; anti WHEREAS, in 1981 the Off -Street Parking Board and City Commission determined that the redevelopment and renovation of Gusman Center for the Performing Arts and Olyrr•pia Building would best. be accomplished using the unified development project process; and WHEREAS, the city Commission on July 18, 1985 authorized the issuance of the Request. for Proposals for the unified development project. which contained specific evaluation criteria to be used by the certified Public accounting firm: and the review committee; and WHEREAS, one proposal was received by the City anti the Department. of Off -Street Parking in response to the request for proposals on October 30, 1985, the published date for receipt of proposals; anti WHEREAS, the certified public accounting firm's report to the City Manager analyzed the proposals based on the financial viabi CITY COMMISSION MEETING OF JUL 23 1987 ILUTION No. 8 A' m.'r e_2 p proposed development team and it's proposed fin arioial stra+egies, assessed the short —and long—range economi,: and fiscal returns to the pity, assessed the propcser's market analysis and conclusions, nvaluafen the econorr,io. feasibility of the proposed ;•edeveloprrenf, and rendered its written report to the pit y Manager ; and WHEREAS, the review committee received t.he presentation of the proposer and inputfrom the public, anri, after extensive analysis and discussion of the proposal, rendered a written report to the City Manager containing an evaluation of the proposal based on the specific evaluation criteria included in the request for proposals; and WHEREAS, the committee adjudged the Flagler Landmark Associates proposal to be acceptable; and WHEREAS, the City Manager, taking into consideration the findings of the certified public accounting firm and the evaluations of the review committee, recommended the acceptance of the Flagler Landmark Associates proposal for the planning and design, construction, leasing and management phases including the securing of cabaret- and tenant leases; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA-- Section 1. The reaommendat ion of the City Manager that. Flagler Landmark Associates be selected for the planning and design, construction, leasing and management of the Gusman Center for the Performing Arts/Olympia Building Redevelopment. Project. is hereby accepted, in principle. Section 2. The City Manager, the City At.t.orney and Department. of Off —Street Parking are hereby authorized and directed to negotiate a contract. with Flagler Landmark Associates for the planning and design, construction and leasing and management. of Gusman Center for the Performing Arts and Olympia Building implementing the proposal submitted by said firm. Section 3. Tre rit y Manager and Department of Off -Street Parking are further ciirecteci to present the negotiated ;ontraot to the city commission as soot; as practicable for consirieration and approval by the City Commission prior t.o execution thereof. PASSED AND ADOPTED this 23rd nay of July , 1987. VIER I.. SUARE , MAYOR ATTEST: --7 /11 elfTi MATTY HIRAI, CITY CLERK PREPARED AND APPROVED BY: - g - - &at'.14�e ROBERT F. CLARK, CHTEF DEPUTY CITY ATTORNEY APPROVED AS 7 FORM AND CORRECTNESS LUCIA A. UGHERTY, CIT ATTORNEY IF 8 f.y.-.1 R -' I 1 % I S;. -3- TO: Honorable Mayor and Members of the City Commission FROM: Roger M. 14riton Directa .1' Departme4t',�` Str'At Recommendation DATE: July 8, 1987 SUBJECT: GUSMAN THEATER AND OLYMPIA BUILDING RENOVATION PROJECT: It is recommended that the City Commission approve the attached resolution selecting Flagler Landmark Associates for the Unified Development Project including planning and design, construction leasing and management for the renovation and restoration of the Gusman Theater and Olympia Building, and further authorizing the City Manager in conjunction with the Off -Street Parking Director to negotiate a unified development contract with Flagler Landmark for the planning and design, construction, leasing, and management of the Gusman Theater and Olympia Building including in said contract certain terms and obligations as set forth herein. Background The Department of Off -Street Parking assumed management responsibility for Gusman Center for the Performing Arts and the Olympia Building in 1975 as a result of a deed restriction between the City of Miami and Maurice Gusman. The Department operated the Center as a "passive house" until 1981 when a change of direction was approved by the Off -Street Parking Board and the City Commission. The essential elements of that change of direction were to retain a new Managing Director with the ability to produce events culminating in the "Eight Singular Sensations" and other productions; the establishment of a fundraising group known as the Friends and Founders of Gusman; and the initiation of a redevelopment program for the Olympia Building and Gusman Center utilizing the City of Miami Unified Development Process. Approval to issue a Request for Proposals was given by the City Commission on July 18, 1985. The sole bid, received on November 28, 1985, was Flagler Landmark Associates which includes Al Cardenas, Jim Beauchamp, Jaime Borelli, and Art Hill as principals. The City Commission adopted Motion No. 86-628 on July 24, 1986, authorizing and directing the City Manager to negotiate an agreement with Flagler Landmark Associates in connection with the proposed redevelopment of the Olympia Building and Gusman Cultural Center and further directed the City Manager to come back to City Commission for final approval. The project, approved conceptually by the Off -Street Parking Board and the City Commission, envisioned investment of approximately $9.5 million for the restoration of the Olympia Building and Gusman Center with the City of Miami and the Department of Off -Street Parking occupying all available office space. The retail space is currently 'eased with an average of eight years remaining on the leases and restaurant/cabaret tenants have been secured by Flagler Landmark. 3y -/ q 0 The economic impact on the Department of Off —Street Parking originally included a $1.3 million contribution to infrastructure costs and a commitment of $22 per foot for approximately 25,000 square feet. The City of Miami commitment is also $22 per foot for approximately 35,000 square feet. Both leases are envisioned to be ten years. The Gusman Center was originally to participate in 40 percent of the net cash flow which was expected to be approximately 185,000 during the first year. The financial basis of the transaction assumes rental of all office space for ten years by the Department of Off —Street Parking and the City of Miami at $22.00 per square foot. All profits of the rental will inure to Gusman Center for the Performing Arts. A final agreement will be brought to the City Commission for review and approval in September, 1937. Analysis Contract negotiations have been lengthy. The City Commission determination to move forward with negotiations was granted in July, 1986. The initial draft of the agreement was delivered ny Flagler Landmark Associates during October, 1986. The predominant reason for the time lapse was negotiations with Natan Rok to obtain the contiguous land necessary to expand the Olympia Building and improve the Gusman dressing rooms. Department staff reviewed the document submitted by Flagler Landmark Associates and determined, in conjunction with Legal Counsel, to prepare a new draft which was delivered to Flagler Landmark Associates in late January, 1987. Flagler Landmark Associates then requested an increase to approximately $29 per square foot from the original $22 per square foot. The basis for this request was unanticipated costs to achieve the Natan Rok acquisition and inflationary costs of approximately eighteen months since the initial proposal was submitted. Alternatives The Department, in conjunction with representatives of the City Manager, informed Flagler Landmark Associates that $29 per square foot was unacceptable. After much deliberation and several meetings, it was determined that the best strategy, short of terminating negotiations, would be to enter into a unified development contract pursuant to which Flagler Landmark would perform the planning and design and construction phases, and would secure executed leases with cabaret and restaurant tenants, and would then upon completion of the renovation of the Gusman Center and the Olympia Building assign its remaining interest in the contract (the leasing and management functions) to the Department of Off —Street Parking. Flagler Landmark would be required to indemnify the City and the Department of Off — Street Parking and hold both harmless against any claims or causes of action arising out of the execution of the contracts, including attorneys' fees, costs, and expenses. If deemed necessary by the City Attorney, Flagler Landmark Associates will also be required to agree to a "No Recourse" clause with regard to the City and the Department of Off —Street Parking. The entire package would be delivered for an agreed upon maximum price. OA Subsequent to the assignment to Flagler Landmark Associates, Flagler Landmark Associates would contract with the Department of Off -Street Parking to manage the operation. The Department of Off -Street Parking in conjunction with the City of Miami would secure project financing. This arrangement, acceptable in concept to both Flagler Landmark Associates and the Off -Street Parking Board, would allow the City of Miami and the Department of Off -Street Parking to rent the newly --renovated office space at the previously agreed $22 per square foot (as compared to Flagler Landmark's revised $29 per square foot rate) which would result in sufficient funds to operate Gusman Center without any General Fund support. The City would be allowed to withdraw from its lease with a one year notice, but would be required to support any negative cash flow of Gusman up to the City rental commitment until an alternate tenant could be found. While the City would join the Department of Off -Street Parking in the financing, the only revenue pledge required of the City would be the annual rental payments. The reason for joining the Department is that the building belongs to the City and not the Department of Off -Street Parking. rnnelusinn The net result of modifying the original proposal is to capitalize on the project related expertise of the Flagler Landmark group and to utilize the committed cabaret and restaurant tenants while still complying with the terms of the City Charter and the Unified Development ordinance. This will allow the project to commence within approximately twelve months with office occupancy to be available in 24 months. The alternative of rejecting Flagler Landmark's proposal and commencing the renovation using conventional architectural selection, design, competitive bidding and public construction could easily lengthen the process by eighteen months with no indication or guarantee of cost savings. Based upon the critical need to provide office space for the Department of Off -Street Parking and other City entities, and the need to provide a non -General Fund source of revenue for Gusman Center for the Performing Arts, City Commission authorization to negotiate the unified. development project arrangement described above with Flagler Landmark Associates is recommended. Att. 3